Arteris S.A. Divulgação de Resultados...

Divulgação de Resultados 2010

25 de março de 2011 Pág. 1 de 1

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Complete Annual Financial Statements

Management Report and Statements - Article 25 (ICVM 480)

Independent Auditor’s Report

Financial Statements for the years ended

December 31, 2014 and December 31, 2013

Fiscal Council’s Report

Capital Budget Proposal

Arteris S.A.

Message from the CEO

Record investments of R$1.9 billion in 2014 shows just how important the year was for Arteris, an achievement that was only possible thanks to the quality of our teams, the efficient management of available resources and our transparent and productive relations with the regulatory authorities.

The year was marked by important deliveries, including the remodeling of the Ribeirão Preto interchange, which was concluded 16 months ahead of schedule, as well as advances on other important work fronts, such as the execution of the new contractual addenda. The ANTT (National Ground Transport Agency) authorized expenditure of an additional R$395 million on works to improve service and ensure compliance with environmental strictures at Serra do Cafezal. The Company also received authorization to invest R$91 million in duplicating the SP-318. These achievements reflect the maintenance of a relationship policy in regard to the granting authority that contributes to the development of Brazil’s infrastructure.

The record investments were applied in a sustainable manner, without jeopardizing the balance of the Company’s accounts. Net income totaled R$457 million and gross revenue came to R$2.4 billion, while EBITDA stood at R$1.4 billion, 10% up on 2013. Even in a year of low GDP growth, the volume of tolled vehicles increased by 1.3%, underlining the diversification of our 3,250 km highway network, the resilience of the businesses and the Company’s ability to cope with economically adverse and challenging times.

Throughout 2014, Arteris became increasingly committed to administrative excellence, resulting in efficiency and productivity gains. The market’s recognition of our strategy and management pillars was reflected in our successful debenture issue, which raised R$1.3 billion to be allocated to investments.

We also remained focused on operational excellence, exemplified by a series of initiatives to improve the safety of our employees and users. We held the 1st Arteris Safety Month, a pioneer initiative in Brazil’s concession industry, which allowed us to raise the awareness of 840,000 people in September.

The year was also important for our achievements on the corporate social responsibility front. The School Project, a traffic education initiative, was successfully implemented in the federal concessionaires and we sponsored a Salvador Dalí exhibition, which attracted more than 1.5 million visitors in Rio de Janeiro and São Paulo.

Arteris will maintain its long-term vision for Brazil in 2015. Our efforts will be concentrated on investing R$2.1 billion in further works, resulting in the duplication and modernization of new stretches and increased user safety and comfort. With this in mind, we can count on the commitment of our 6,500 employees, who have already demonstrated their focus on results and their pride in working for Arteris. These are the foundations on which we wish to conduct our business, generating value for

society and our shareholders and making a substantial contribution to the development of the infrastructure needed for Brazil’s sustainable growth.

David Díaz

CEO

MANAGEMENT REPORT

In compliance with the prevailing legislation and its Bylaws, the Management of Arteris S.A.

(“Arteris” or “Company”) hereby submits its report for the fiscal year ended December 31, 2014

for the appreciation of its investors and the market in general.

Profile

Arteris plays an important role in Brazil’s highway infrastructure sector, being responsible for

improving, extending, maintaining and managing toll roads under the concession programs of

the federal and São Paulo state governments.

Through its concessionaires, Arteris operates and manages 3,250 km of highways within the

country’s main economic center, comprising the states of São Paulo, Minas Gerais, Paraná, Rio

de Janeiro and Santa Catarina, which are also characterized by their high population density.

The group has nine concessionaires (four state and five federal), all of which are publicly-held

companies and wholly-owned subsidiaries of Arteris – Autovias S.A. (Autovias), Centrovias

Sistemas Rodoviários S.A. (Centrovias), Concessionária de Rodovias do Interior Paulista S.A.

(Intervias), Vianorte S.A. (Vianorte), Autopista Fernão Dias S.A. (Fernão Dias), Autopista

Fluminense S.A. (Fluminense), Autopista Litoral Sul S.A. (Litoral Sul), Autopista Planalto Sul

S.A. (Planalto Sul) and Autopista Régis Bittencourt S.A. (Régis Bittencourt).

The Company also owns 100% of Latina Manutenção de Rodovias Ltda. (Latina Manutenção)

and Latina Sinalização de Rodovias Ltda. (Latina Sinalização), which are responsible for

highway inspections, works management and maintenance, and retains a 4.68% interest in STP

– Serviços e Tecnologia de Pagamentos S.A., which pursues activities related to the electronic

toll collection system.

Economic Scenario

Arteris and the results of its business are directly affected by the overall state of Brazil’s

economy, especially in regard to inflation, interest and exchange rates, government policies, tax

policies and GDP growth.

In 2014, Brazil’s economic performance was below market expectations. Although GDP growth

is expected to be positive, it will almost certainly be far below the beginning-of-year projection.

The Brazilian Central Bank estimates growth of 0.1% in 2014, below the initial forecast of 2.0%.

As a result of the domestic and international economic scenario, the Central Bank’s Monetary

Policy Committee (Copom) increased the Selic base rate from 10.50% to 11.75% along the year

as part of the government’s efforts to control inflation, as detailed below.

Inflation measured by the IGP-M general market price index fell from 5.5% in 2013 to 3.7% in

2014, while the extended consumer price index (IPCA) moved up from 5.9% to 6.4% in the

same period. These indices influence the inflationary-economic environment and the IPCA is

used to calculate the adjustment of group concessionaires’ toll tariffs, thus directly affecting the

Company’s toll revenue.

Material Events

Minimum Percentage of Outstanding Shares

In May 2014, Arteris informed the market of the conclusion of a corporate restructuring involving the shareholder Brookfield Aylesbury S.A.R.L., through which the latter’s interest in the Company qualifies as an integral part of its free float, thereby complying with the Minimum Percentage of Outstanding Shares, as defined in the Novo Mercado Listing Rules. The corporate restructuring included the segregation of Brookfield Aylesbury S.A.R.L.’s interest through (i) the creation of a new holding company, Aylesbury Motorways Brazil Holdings SRL, 41% of whose capital stock is held by BIP Bermuda Holdings I Limited, a Brookfield Infrastructure Group company, and 59% by two subsidiaries of British Columbia Investment Management Corporation, an independent Canadian institutional investor; and (ii) the transfer of all the shares issued by Brookfield Aylesbury S.A.R.L. to Aylesbury Motorways Brazil Holdings SRL. As a result, the Company’s free float is approximately 30.739685% of its capital stock, equivalent to 105,881,135 common shares.

Inclusion of new Investments

Autovias: In September 2014, Concessionária Autovias S.A., a Company subsidiary, agreed

with the São Paulo State Public Transportation Services Regulatory Agency (ARTESP) to

include a new project in the concession agreement – the duplication of 14 kilometers of the SP-

318 involving estimated investments of R$91 million. Thanks to the inclusion of this project, the

concessionaire obtained a six-month extension to the concession, which will now terminate in

May 2019.

Autopista Régis Bittencourt: In December 2014, the ANTT authorized the inclusion of an

additional R$395 million in the concession agreement to be allocated to the duplication of the

Serra do Cafezal. The undertaking, located on the BR-116/SP between the municipalities of

Juquitiba and Miracatu, involves the duplication of 30.5 kilometers between km 336.7 and km

367.2, including the construction of 34 overpasses and four tunnels. The concessionaire will be

compensated by the addition of R$0.20929 to the Basic Toll Tariff (TBP), at June 2007 values,

to be introduced gradually over three years, the first addition, corresponding to 30% of this

amount, occurring on December 29, 2014, the second, equivalent to 35% of the total, on

December 29, 2015 and the remainder on December 29, 2016.

Autopista Fluminense: In January 2015, the ANTT authorized an 11.65% increase in the toll

tariff. This percentage, which was above period inflation, was the result of including various

highway improvement works which will be implemented in the coming years, totaling

investments of around R$100 million at today’s values. They include the installation of

pedestrian overpasses, bus stops, new interchanges and devices, and fixed weighing

machines, as well as improvements to critical points.

Term of Adjustment of Conduct (“TAC”):

In October 2014, the subsidiary concessionaires Autopista Régis Bittencourt S.A., Autopista

Litoral Sul S.A., Autopista Fernão Dias S.A. and Autopista Fluminense S.A. entered into Terms

of Adjustment of Conduct (“TACs”) with the National Ground Transportation Agency (ANTT), as

a result of administrative proceedings sanctioning possible non-compliances instituted by the

ANTT between the beginning of the concessions and September 22, 2014.

As a result of these terms, the concessionaires will invest the equivalent of R$141.3 million in new works not provided for in the original concession agreements, involving improvements and ensuring greater safety and comfort for users, this amount to be distributed in accordance with the table below:

Economic and Financial Performance

Gross Service Revenue

Arteris recorded gross revenue of R$4.2 billion in 2014, 17.6% up on 2013, fueled by the 5.7%

improvement in toll revenue to R$2.4 billion, the 39.6% upturn in construction revenue to R$1.8

billion, thanks to the acceleration of the federal highway investment plan, and the 9.8% increase

in other revenue to R$47.1 million.

Breakdown of Gross Service Revenue

2014 2013

Toll Plaza Revenue

The combination of higher average consolidated tariffs (+4.4%) and total tolled traffic growth

(+1.3%) in relation to 2013, were responsible for the 5.7% improvement in toll revenue to R$2.4

billion in 2014.

The state concessions accounted for 58% of the total, moving up by 6.0% over 2013 to R$1.4

billion, while the federal highways recorded a 5.3% improvement to R$1 billion.

Breakdown of Toll Revenue

2014 2013

Tolled Traffic: The Company’s tolled traffic volume came to 726,295 thousand vehicle

equivalents in 2014, 1.3% up on 2013.

The annual upturn in tolled traffic volume in a year of economic stagnation for the country as a

whole demonstrated the sector’s resilience in times of low growth, basically due to the profile of

Brazil’s transport industry, marked by logistics bottlenecks, a concentration on highway

transport and toll road concessions with better conditions than the public system. On the other

hand, the Company and the sector have experienced greater expansion in the past and there

was a slowdown in terms of volume throughout last year in line with Brazil’s macroeconomic

situation.

This trend becomes apparent if we analyze tolled traffic growth in terms of light and heavy

vehicles. While light vehicles recorded growth during virtually the entire year, still fueled by

household income levels and low unemployment, heavy vehicles were impacted by the

shrinkage in industrial activity, especially in the auto sector, as well as the effects of the World

Cup, and suffered successive declines throughout 2014.

Also in relation to heavy vehicles, the non-recurring growth of the state highways in the first half

was due to the charging of air lift axles* as of July 2013. In the second half, when vehicle

equivalent volume could once again be compared under equal conditions with the same period

the year before, the decline in the total number of trucks became clear. In the case of the

federal segment, those highways with the worst performance were precisely those whose

transported cargo profile was directly related to industrial GDP, notably Autopista Régis

Bitencourt and Rodovia Fernão Dias.

In the specific cases of Planalto Sul (+5.2% in the annual comparison) and Litoral Sul (+3.4%),

the former benefited in the third quarter from vehicles from parallel highways with stretches that

were blocked due to heavy rainfall in the region, while the latter posted non-recurring growth in

the second half due to the reopening, on June 20, of a toll plaza that had been transferred to

another location at the request of the ANTT.

* Since July 2013, in order to mitigate the 2013 tariff freeze on the São Paulo highways, the state government authorized the collection of a charge on heavy vehicle air lift axles, which has contributed to an increase in total vehicle volume in the state concessions.

Vehicle-Equivalents (Thousand) 2014 2013 Var%

State Concessions 213.097 206.864 3,0%

Autovias 48.939 47.422 3,2%

Centrovias 58.336 56.233 3,7%

Intervias 66.937 65.479 2,2%

Vianorte 38.885 37.729 3,1%

Federal Concessions 513.198 510.233 0,6%

Planalto Sul 30.185 28.704 5,2%

Fluminense 48.653 48.422 0,5%

Fernão Dias 164.275 165.213 -0,6%

Régis Bittencourt 148.263 150.105 -1,2%

Litoral Sul 121.823 117.787 3,4%

Total 726.295 717.096 1,3%

In terms of composition, 63.1% of 2014 tolled traffic in the state concessions (measured in

vehicle equivalents) consisted of heavy vehicles and 36.9% of light vehicles, with respective

ratios of 73.3% and 26.7% in the federal concessions.

Average Tariff: The following table shows average tariff trends in each of the concessionaires

on a consolidated and same-comparison basis:

In 2014, the average consolidated tariff of Arteris’ concessionaires was R$3.35, 4.4% up on

2013.

After a period in which the tariffs of the state concessions remained unchanged (there was no

annual increase in 2013 in compliance with an order from the São Paulo State Government), a

tariff adjustment for all state concessions was authorized on July 1, 2014. The granting

authority, via ARTESP, unilaterally imposed tariff adjustments for each concessionaire based

on the results of the air lift axle charges, in accordance with studies developed by ARTESP.

This was the reason for the different tariff percentage between the state concessionaires in the

comparison between 2013 and 2014.

The Company disagreed with the calculations and methodology adopted by ARTESP for

defining the 2014 tariffs and took all the necessary measures to ensure its rights and

compliance with the concession agreements. As a result, on September 18, 2014, Centrovias

was granted an injunction by the São Paulo State Court of Appeals authorizing the full

adjustment of its toll tariff (6.37%, versus the authorized 5.04%) and the other state

concessionaires are seeking a similar decision from the court. Consequently, the state

concessions’ average consolidated tariff came to R$6.66 in 2014, 2.9% higher than in 2013.

In both 2013 and 2014, the federal concessionaires were granted the tariff adjustments provided

for in their corresponding concession agreements, i.e. taking into account the accrued variation

in the IPCA inflation index, any economic-financial rebalancing of the contracts and rounding

criteria. Adjustments are made in February of each year for Autopista Fluminense and Litoral

Sul, and in December for Autopista Fernão Dias, Régis Bittencourt and Planalto Sul. The

federal concessions’ average consolidated tariff stood at R$1.97, 4.6% up on 2013.

Average Toll Tariff (R$ / Vehicle-Equiv.) 2014 2013 Var%

State Concessions 6,66 6,48 2,9%

Autovias 7,01 6,79 3,3%

Centrovias 6,36 6,17 3,1%

Intervias 5,76 5,62 2,5%

Vianorte 8,25 8,03 2,8%

Federal Concessions 1,97 1,88 4,6%

Planalto Sul 3,81 3,61 5,6%

Fluminense 3,39 3,28 3,3%

Fernão Dias 1,50 1,40 6,9%

Régis Bittencourt 1,80 1,80 0,0%

Litoral Sul 1,79 1,67 7,4%

Total 3,35 3,21 4,4%

At the close of 2014 and beginning of 2015, the ANTT authorized the Company to include in the

calculation of the tariffs that are in effect in the closing days of 2014 and will remain in effect

throughout 2015 additional increases to the full pass-through of inflation in order to remunerate

new investments (contractual amendments) for improvements/adjustments to federal highway

infrastructure to be implemented in the coming years. The new tariffs are shown in the following

table:

Electronic Collection: Revenue from toll plaza electronic payments (AVI System) in the state

concessionaires accounted for 66.4% of total revenue in 2014, versus 64.0% in 2013, while the

average ratio in the federal concessionaires was 52.5% in 2014, compared to 49.2% in 2013.

Construction Revenue

Construction revenue — an accounting representation of the Company’s investments in

intangible assets and therefore with no cash effect — grew by 39.6% over 2013 to R$1.8 billion,

in line with the expanding cycle of ongoing works on the federal highways.

Other Revenue

The “other revenue” line is composed exclusively of ancillary revenue from the exploration/sale

of highway right-of-way services. In 2014, this item came to R$47.1 million, 9.8% up on 2013,

with non-recurring revenue of R$16.9 million from Autopista Fernão Dias from the retroactive

charging (since 2008) for the use of this concessionaire’s right of way by telecommunications

companies (fiber-optic cable).

Net Service Revenue and Deductions from Revenue

Influenced primarily by the upturn in gross toll revenue (+5.7%) and construction revenue

(+39.6%), in addition to the increase in other revenue (+9.8%), the Company recorded total net

revenue of R$4 billion, 19% up on 2013.

Revenue deductions, composed of PIS, COFINS and ISS, totaled R$218.2 million in 2014.

Operating Costs and Expenses

Total costs and expenses came to R$3 billion in 2014, 23.7% more than in 2013. However,

most of the variation came from non-cash items, such as construction costs, which moved up by

R$498.6 million as a result of the Company’s increased investments.

Cash costs totaled R$758 million, 9.9% up on 2013, chiefly due to period inflation, which

impacted personnel costs through the respective collective bargaining agreements for all Group

employees, and the adjustments to outsourced service agreements. The Company also

expanded the scope of its highway operations, through a higher number of user mechanical and

Concessionaries Old Tariff Nrew Tariff Var% Valid from

Autopista Fernão Dias 1,50 1,60 6,7% 19/12/2014

Autopista Planalto Sul 3,80 4,10 7,9% 19/12/2014

Autopista Régis Bittencourt 1,80 2,00 11,1% 29/12/2014

Autopista Fluminense 3,40 3,80 11,8% 02/02/2015

Autopista Litoral Sul 1,80 1,90 5,6% 22/02/2015

medical assistance incidents and the start-up of radar operations, among others, in accordance

with the level of service required by the agreement or as a result of requests from the granting

authority. It is also worth noting the Company’s investments in advertising, marketing and brand

strengthening, in line with its new strategic guidelines in regard to reinforcing its corporate

image, as well as its efforts and initiatives on the social responsibility front. However, these

increases were partially offset by a reduction in the amounts due to the granting authority —

given that the state highways transfer 1.5% of their gross toll revenue to the São Paulo State

Government, versus 3% until July 2013 — and the reduction in management compensation

costs, reflecting changes in the holding company’s administrative structure.

The following table gives a breakdown of operating costs and expenses:

EBITDA and Adjusted EBITDA

Arteris recorded an annual operating result, as measured by EBITDA, of R$1.4 billion, 10.1% up

on 2013, primarily due to the period increase in toll revenue and the reduction in provisions for

highway maintenance. The annual EBITDA margin* came to 60%, 1.8 p.p. up year-on-year.

EBITDA adjusted for provisions for highway maintenance, which have no cash effect, grew by

5.2% to R$1.5 billion, with a margin* of 66.5% (-1.0. p.p.).

* The EBITDA Margin is based on Net Operational Revenue excluding Construction Revenue.

Costs and Services Expenses (R$ Thousand) 2014 2013 Var%

Third Party Services (213.728) (197.894) 8,0%

Personnel (219.012) (211.656) 3,5%

Conservation (104.936) (100.807) 4,1%

Inspection fee (38.773) (36.689) 5,7%

Costs w ith granting authority (22.660) (32.554) -30,4%

Insurance and guarantees (25.028) (21.306) 17,5%

Directors' compensation (19.259) (21.331) -9,7%

Civil, labor and tax risks (9.576) (3.960) 141,8%

Tax expenses (3.755) (3.146) 19,4%

Other operating expenses, net (101.276) (60.462) 67,5%

Subtotal (Cash Costs) (758.003) (689.805) 9,9%

% Cash Costs / Net Revenue (excl. construction) 33,5% 32,6% -1,8 p.p.

Cost of construction services (1.757.447) (1.258.870) 39,6%

Provision for maintenance in highw ays (145.463) (196.030) -25,8%

Depreciation and amortization (344.689) (285.745) 20,6%

Total (3.005.602) (2.430.450) 23,7%

2014 2013 Var%

NET REVENUE 4.018.133 3.377.473 19,0%

Cost and expenses (excl. depreciation and amortization) (2.660.913) (2.144.705) 24,1%

EBITDA ¹ 1.357.220 1.232.768 10,1%

EBITDA Margin* 60,0% 58,2% 1,8 p.p.

(+) Provision for maintenance in highw ays 145.463 196.030 -25,8%

Adjusted EBITDA ² 1.502.683 1.428.798 5,2%

Adjusted EBITDA Margin 66,5% 67,4% -1,0 p.p.

EBITDA

(In thousands of Brazilian reais)

¹ EBITDA is Earnings before Interest, Taxes, Depreciation and Amortization, an operating performance indicator also known by its Portuguese acronym

LAJIDA. EBITDA is not a measure adopted in accounting standards and does not represent cash flow for the periods presented and therefore should not be

considered an alternative to cash flow as an indicator of liquidity. EBITDA does not have a standardized meaning and therefore cannot be compared to the

EBITDA of other companies.

² Includes adjustments related to reversals of the provision for highway maintenance (accounting pronouncement ICPC 01).

The following table shows the calculation of EBITDA and Adjusted EBITDA for the Group’s

companies in 2014:

*Excludes depreciation and amortization.

Financial Result

The 2014 financial result was a net financial expense of R$322.4 million, 16.1% higher than the

net expense of R$277.8 million posted in 2013.

This result was basically due to the following factors:

Group Companies

(R$ Thousand)

Services

Revenue

(A)

Construct

Revenue

(B)

Total (A + B)

Cost of

Services

(A)

Cost of

Construction

Service (B)

Total (A + B) EBITDA

Provision for

highways's

maintenance

Ajusted

EBITDA

Adjusted

EBITDA

M argin*

Autovias 315.166 57.995 373.161 (102.103) (57.995) (160.098) 213.063 38.173 251.236 79,7%

Centrovias 341.251 6.451 347.702 (100.752) (6.451) (107.203) 240.499 38.735 279.234 81,8%

Intervias 356.725 44.798 401.523 (109.299) (44.798) (154.097) 247.426 32.597 280.023 78,5%

Vianorte 295.007 24.466 319.473 (63.573) (24.466) (88.039) 231.434 4.571 236.005 80,0%

State Concessions 1.308.149 133.710 1.441.859 (375.727) (133.710) (509.437) 932.422 114.076 1.046.498 80,0%

Planalto Sul 105.597 197.213 302.810 (66.264) (197.213) (263.477) 39.333 3.464 42.797 40,5%

Fluminense 151.099 332.654 483.753 (83.932) (332.654) (416.586) 67.167 1.190 68.357 45,2%

Fernão Dias 244.255 242.721 486.976 (150.086) (242.721) (392.807) 94.169 14.545 108.714 44,5%

Régis Bittencourt 245.550 435.615 681.165 (123.894) (435.615) (559.509) 121.656 6.117 127.773 52,0%

Litoral Sul 206.036 415.534 621.570 (117.168) (415.534) (532.702) 88.868 6.071 94.939 46,1%

Federal Concessions 952.537 1.623.737 2.576.274 (541.344) (1.623.737) (2.165.081) 411.193 31.387 442.580 46,5%

Total Concessionaires 2.260.686 1.757.447 4.018.133 (917.071) (1.757.447) (2.674.518) 1.343.615 145.463 1.489.078 65,9%

Arteris Holding 0 0 0 2.197 0 2.197 2.197 0 2.197

Constructors 0 488.362 488.362 0 (476.955) (476.955) 11.408 0 11.408

Other companies and eliminations for consolidation 0 (488.362) (488.362) 11.408 476.955 488.363 0 0 0

Total 2.260.686 1.757.447 4.018.133 (903.467) (1.757.447) (2.660.913) 1.357.220 145.463 1.502.683 66,5%

Net Revenue Costs and Expenses*

Financial Result (R$ Thousand) 2014 2013 Var%

Financial Income 127.375 61.061 108,6%

Interest Receivable 4.256 983 333,0%

Financial Investments 122.514 58.468 109,5%

Financial Charges - Reversal of Present Value Adjustments - 71 -100,0%

Other Revenues 605 1.539 -60,7%

Financial Expenses (450.073) (338.824) 32,8%

Financial Charges (383.045) (263.120) 45,6%

Monetary Adjustment of Concession Charges (22.093) (28.505) -22,5%

Financial Charges - Reversal of Present Value Adjustments (26.958) (22.713) 18,7%

Other Expenses (17.977) (24.486) -26,6%

Net Exchange Variation 324 (4) -8200,0%

Financial Result (322.374) (277.767) 16,1%

The 108.6% (R$66.3 million) increase in financial income, due to higher funding in the

year (debenture issues), which led to an increase in the average amount of cash

invested, whose returns are pegged to the CDI rate, which recorded successive upturns

in the period.

The 32.8% (R$111.2 million) increase in financial expenses, chiefly due to higher

financial charges (+44.8% or R$117.9 million) resulting from the increase in the

Company’s leverage in 2014 and the upturn in the gross debt indexing rates (TJLP, CDI

and IPCA).

Net Income

Arteris posted net income of R$456.9 million in 2014, 2% down on 2013 despite period net

revenue and EBITDA growth of 19% and 10.1%, respectively, primarily due to non-cash items

such as the 20.6% increase in amortizations, as well as the R$44.6 million reduction in the net

financial result over 2013, as mentioned above.

The Company’s consolidated income differs from the income booked by Arteris (as the Group’s

parent company), the latter being the basis for calculating the dividends to be distributed to

shareholders. As described in Note 3 to the financial statements, this difference arises from the

fact that the individual statements were prepared in accordance with accounting practices

adopted in Brazil, which, in the case of Arteris S.A., differ from IFRS, which applies to the

individual financial statements only in regard to the assessment of investments in subsidiaries

under the equity method which, for IFRS purposes, are assessed at cost or fair value, and by

the option to maintain the balance of deferred assets on December 31, 2008, which is being

amortized.

Indebtedness

On December 31, 2014, net debt totaled R$4.4 billion, 42.1%, or R$1.3 billion, more than in

2013.

At year-end, net debt represented 3.1 times Adjusted EBITDA less payment of the fixed

concession in the last 12 months.

This R$1.3 billion upturn was mainly due to disbursements of BNDES credit facilities and new

debentures issues, in addition to prepayments of older operations, as detailed below:

BNDES financing: Arteris receives long-term loans from the Brazilian Development Bank

(BNDES) to finance its federal concession investment programs. All five federal concessionaires

Debt

(In thousands of Brazilian reais)12/31/2014 12/31/2013 Var%

Gross Debt 6.052.505 4.124.728 46,7%

Short Term 1.078.249 288.482 273,8%

Long Term 4.974.256 3.836.246 29,7%

Cash Position 1.669.688 1.040.898 60,4%

Cash and equivalents 1.410.451 929.911 51,7%

Restricted investments ¹ 259.237 110.987 133,6%

Net Debt 4.382.817 3.083.830 42,1%

¹ Short and Long Term

have already received approval for long-term financing lines, guaranteeing the funds needed to

implement the main contractual projects before the end of the concession.

Up to December 31, 2014, approximately R$3.2 billion in BNDES funding had been disbursed,

out of the contracted total of R$3.7 billion, leaving R$532 million still available.

Issue of Debentures: The following table summarizes the debentures issued by the Company

and its subsidiaries in 2014:

Gross Debt:

Gross Debt Profile (%)

On December 31, 2014, the Company’s consolidated gross debt (loans and financing plus

debentures) totaled R$6.1 billion, 48% of which corresponding to contracts indexed to the TJLP

(long-term interest rate), 41% indexed to the CDI interbank rate and 12% indexed to the IPCA

inflation rate.

Company Debentures Date of issue Issue ( R # M ill ion) Cost Due Rating Moody's

Centrovias 2nd Issue of Simple Debentures Not Convertible to Shares March - 14 400.000 CDI + 0,99% p.a. June-18 Aa1br*

Intervias 4th Issue of Simple Debentures Not Convertible to Shares/ Serie 1 October - 14 150.000 CDI + 1,10% p.a. October - 19 Aa1.br*

Intervias 4th Issue of Simple Debentures Not Convertible to Shares/ Serie 2 October - 14 225.000 IPCA + 5,96% p.a. October - 19 Aa1.br*

Vianorte 2nd Issue of Simple Debentures Not Convertible to Shares March - 14 150.000 CDI + 0,86% a.a. March - 17 Aa1br*

Fernão Dias 2nd Issue of Simple Debentures Not Convertible to Shares December- 14 100.000 CDI + 1,15% p.a. June-16

Arteris 2nd Issue of Simple Debentures Not Convertible to Shares October - 14 300.000 CDI + 1,28% a.a. October - 19 AA+*

N/A

The Company’s debt amortization schedule is shown below:

Amortization Schedule – (R$ million)

Fixed Concession Fee paid to the Concession Authority

In accordance with our concession contracts, the state concessionaires must pay the

concession authority a fixed fee in exchange for the granting of the concession. In 2014, the

total amount paid was R$71.6 million.

Highway Maintenance

In 2014, the state concessionaires disbursed R$96.6 million as payment for maintenance

carried out on their highways.

It is important to note that the federal highways have not yet effected any maintenance-related

cash disbursements, which are only expected to begin as of 2017.

Investments

The Company executed more works in 2014 than in any other year, with record annual

investments of R$1.7 billion, 39% up on 2013, 85.5% of which allocated to the federal

concessionaires.

The most important construction projects receiving investments in the period are described

below:

Autopista Fluminense: In 2014, the concessionaire maintained the accelerated pace of the

duplication works of the BR 101/RJ highway between the cities of Rio Bonito and Campos dos

Goytacazes, a project that began in 3Q11 after it obtained the construction permit from IBAMA,

Brazil’s environmental protection agency. The project involves 176.6 km of highway, 35.9 km of

which concluded in 2014. Of the remaining 140.7 km, 83.1 km are currently undergoing works.

Two raised interchanges have also been installed and another six are being built.

In October 2012, the Company began works on Avenida do Contorno in the city of Niterói,

which will substantially improve this stretch of the highway by expanding its capacity.

288

810

569 597

395

206 221 237 255 274204

5613

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

288

810

569 597

395

206 221 237 255 274204

5613

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

1.078953

1.175

563 546

288 313 337 362295

10539

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

The company also built two pedestrian overpasses and concluded the structural strengthening

and widening of a bridge.

Autopista Fernão Dias: After having completed the implantation of the 8.1 km Betim Beltway

(MG) in 2013, creating an alternative for long-distance highway traffic, which used to pass

through the city, the concessionaire concluded its main contractual works.

However, other improvements have been implemented on the highway. In 2014, Autopista

Fernão Dias completed the construction of three interchanges, 11 pedestrian overpasses, 24.7

kilometers of side roads and 19 kilometers of auxiliary lanes.

Autopista Régis Bittencourt: The Serra do Cafezal (BR-116/SP) project, the concessionaire’s

main construction work, continues to move ahead. The Company has already concluded and

delivered 17.9 km of the duplication of a total of 30.5 km, including two interchanges. In

December 2014, the ANTT approved the necessary contractual rebalancing for the continuation

of the works, which include the construction of four tunnels (three of which in progress) and 33

bridges and overpasses (11 concluded and 11 in progress).

In 2014, the concessionaire also built four raised interchanges, structurally reinforced and

widened six bridges, built one pedestrian overpass and installed 6.4 km of side roads.

Autopista Planalto Sul: The concessionaire’s main project is the duplication of 25.0 km of the

BR-116/PR between Curitiba (PR) and Mandirituba (PR), whose construction permit has

already been obtained from IBAMA. Of this total, 7.3 km between Curitiba and Fazenda Rio

Grande (PR) have already been concluded and freed for traffic, and the remainder, up to

Mandirituba, is under construction.

In 2014, the concessionaire widened two bridges, constructed two pedestrian overpasses,

made corrections to the course of the existing lane (1 km) to improve user safety, and installed

one interchange and a 1.8 km side road.

Autopista Litoral Sul: The Florianópolis Beltway project, one of the most important works in

the region, began in May 2014, immediately after IBAMA had granted the installation license for

a 14 km stretch.

In 2014, the concessionaire also concluded the construction of 44.3 km of side roads, six

pedestrian overpasses and 28.7 km of new auxiliary lanes, and completed the structural

reinforcement and widening of 11 special structures (bridges and overpasses).

Autovias and Vianorte: In December 2014, through its subsidiaries Autovias and Vianorte, the

Company concluded the remodeling of the main access way to Ribeirão Preto (Waldo Adalberto

da Silveira interchange) at km 307+500 of the SP 330 – Rodovia Anhanguera – at the junction

of the SP 333, SP 255 and Avenida Castelo Branco (SPA 307/330). The project increased the

safety of Rodovia Anhanguera users, organized highway and urban vehicle traffic in the

Ribeirão Preto region and ensured access for pedestrians through overpasses. The project

arose from a concession contract amendment and included the construction of eight

overpasses, 20 access and return loops and a 440-meter pedestrian overpass, benefiting more

than 1.5 million people in the region.

In addition, in September 2014 Autovias began duplicating 13.6 km of the SP 318 between km

235 and 249, in the São Carlos region. This is a new project which was added to the

concession agreement, resulting in a six-month extension of the concession term until May

2019, in accordance with the marginal cash flow method for the economic and financial

rebalancing of the agreement.

Intervias: Implementation of the second 5 km stage of the Mogi Mirim Beltway is moving ahead

rapidly. The concessionaire is also duplicating the SP 147 between Mogi Mirim and Engenheiro

Coelho, a project that began in September 2014.

Added Value

In 2014, Arteris generated consolidated added value of R$1.7 billion, 0.6% up on 2013,

resulting from service revenue (R$4.2 billion) less costs related to the concessions and

construction, materials and consumer goods, third-party services, and depreciation and

amortization (R$2.5 billion), plus dividends, capitalized interest and other financial income

(R$219.7 million).

Distribution of Added Value (R$1.7 billion)

Personnel12,3%

Taxes and Contribuitions

29,1%

Financial Expenses,

Rentals and Others31,1%

Retained Earnings

21,1%

Dividends6,4%

Capital Market

Arteris closed 2014 with a market capitalization of R$4.3 billion, based on the closing price of

R$12.40 per share on December 30, 2014, representing depreciation of 33.2% since the

beginning of the year. In the same period, the Bovespa Index fell by 0.7%. Under the ticker

ARTR3, the Company’s stock was traded in 100% of BM&FBOVESPA trading sessions, with

financial trading volume of approximately R$1.7 billion in the year.

Shareholding Structure

Arteris’ shares are included in the following stock indices: Brazil Index (IBrX), Special Corporate

Governance Stock Index (IGC), Special Tag-Along Stock Index (ITAG), Mid-Large Cap Index

(MLCX), Brazil Broad-Based Index (IBrA) and Corporate Governance Trade Index (IGCT).

The Company’s subscribed and paid-in capital was approximately R$873.8 million on

December 31, 2014, represented by a single class of 344,444,440 common shares.

Dividends Shareholders are entitled to receive minimum mandatory dividends of 25% of annual net

income, adjusted in accordance with Article 202 of Brazilian Corporation Law.

On May 8, 2014, the Company paid its shareholders dividends of R$123.6 million on 2013

income, representing a pay-out of 50% when added to the interim dividends of R$79.2 million,

distributed on December 12, 2013, also related to 2013 income.

For the year ended December 31, 2014, the Board of Directors’ Meeting of October 30, 2014,

resolved on the payment of interim dividends totaling R$79.2 million to the Company’s

shareholders on November 28, 2014, representing R$0.23 per share. The amount will be fully

attributed to the minimum mandatory dividends for fiscal year 2014, yet to be distributed.

Personnel

Arteris closed 2014 with 6,499 employees, 43.1% of whom in the federal concessionaires,

20.9% in the state concessionaires, 33.7% in the group’s construction companies and the

remaining 2.3% in the group’s holding company, as shown below:

Social and Environmental Responsibility - Sustainability

Arteris focuses on developing its business in a sustainable manner, ensuring that its activities

permit the development of its employees, its neighboring municipalities, and society as a whole.

The Company maintains several programs focusing on reducing accidents on its highways and

on promoting traffic education, environmental preservation and the social and cultural

development of its adjacent communities.

These programs are listed below:

Safety

The Company’s goal is to reduce the total number of accidents on the Group’s highways by

50% between 2011 and 2020, in line with the UN’s own target determined in its Decade of

Action for Road Safety. The Company also maintains the Strategic Group for the Reduction of

Road Accidents (GERAR), which is responsible for creating studies and action plans designed

to reduce the number of accidents. In September 2014, the Company held the 1st Arteris Safety

Month, an initiative to raise the awareness of drivers, employees and society in general of the

importance of remaining conscientious in traffic. The initiative was concluded with the 1st Arteris

Safety Forum, attended by representatives of São Paulo state and federal regulatory agencies,

the Federal and State Highway Police, research institutions, the World Health Organization

(WHO), and non-governmental organizations.

Personnel 2014 2013 Var. %

Arteris (Holding) 149 126 18,3%

State Concessions 1.356 1.315 3,1%

Autovias 302 206 46,6%

Centrovias 283 314 -9,9%

Intervias 519 534 -2,8%

Vianorte 252 261 -3,4%

Federal Concessions 2.804 2.708 3,5%

Litoral Sul 595 562 5,9%

Planalto Sul 264 262 0,8%

Fluminense 438 403 8,7%

Fernão Dias 874 851 2,7%

Régis Bittencourt 633 630 0,5%

Latina Manutenção 2.017 2.481 -18,7%

Latina Sinalização 173 174 -0,6%

Total 6.499 6.804 -4,5%

Turnover 5,38% 4,11%

Education

Traffic humanization is the Company’s priority in the education area, exemplified by the School

Project (Projeto Escola), which prepares public school teachers for the adoption of traffic safety

activities with elementary and high school students. The same strategy is used to prepare these

teachers in relation to environmental issues through the Long Live the Environment program

(Viva Meio Ambiente).

The School Project is recognized by UNICEF (United Nations Children’s Fund). The Company

also develops specific initiatives through the Passarela Viva (for pedestrians), Viva Ciclista and

Viva Motociclista programs in order to raise the awareness of these users on the importance of

adopting a responsible attitude in traffic.

Health

The Viva Saúde program has already benefited almost 100,000 truck drivers through the

provision of advice on health and safety, as well as free medical exams and vaccination

programs, given that truckers are not always best equipped to take care of their health.

Consequently, the program favors a preventive approach that encourages quality of life and

good practices.

The Environment

Business sustainability is a Company priority and is accomplished through the control of

emissions and the rational use of natural resources, as well as the development of programs

involving the highways’ adjoining communities. The Environmental Management System is the

mechanism through which Arteris and its concessionaires monitor the execution of initiatives in

this area. Focusing on the preservation of areas near the roads, Arteris develops projects

related to reforestation and the recovery of degraded areas, the planting of native tree seedlings

and the prevention of accidents involving animals on the highways. It also controls and recycles

garbage, maintains agreements with several state and federal universities to control wildlife,

and adopts a responsible attitude to water preservation by using tanks to collect rainwater in all

of its operational bases.

Culture and Sports

The Company prioritizes the sponsorship of important sporting and cultural projects in the

regions where its concessionaires operate, and promotes partnerships with leading cultural

institutions to sponsor exhibitions by internationally renowned artists in Brazil. In 2014, it

sponsored a Salvador Dalí exhibition, the world’s most visited exhibition of his work and the

most complete ever to come to Brazil. Shown in Rio de Janeiro and São Paulo, it attracted more

than 1.5 million visitors. The Company also formed partnerships with institutions that care for

children with special needs as well as other organizations, so that children and adults who

normally would not have access to this type of cultural event, could attend the exhibition.

Volunteer Program

The Company’s employees are encouraged to maintain close relations with their surrounding

communities by developing a transformational approach in order to help build a more just

society. At the same time as it helps develop employees’ personal skills, the initiative also adds

value to the business and strengthens the Company’s image.

Arbitration Clause

The Company is subject to arbitration under the Market Arbitration Chamber, pursuant to the

arbitration clause in its Bylaws.

Final Considerations Relations with the Independent Auditors

In accordance with CVM Instruction 381/03, the Company hereby declares that, during the fiscal

year ended December 31, 2014, it did not hire BDO RCS Auditores Independentes S.S. for any

services beyond those related to the external audit. In its relations with the independent

auditors, the Company seeks to evaluate conflicts of interest in regard to non-audit-related

services based on the following precepts: the auditors must not (a) audit their own work, (b)

exercise managerial functions in the Company or (c) promote the Company’s interests.

Declaration by the Board of Executive Officers

Pursuant to Article 25 of CVM Instruction 480/09 of December 7, 2009, the Company’s

executive officers hereby declare that they have discussed, reviewed and are in full agreement

with (i) the opinions expressed in the report drawn up by BDO RCS Auditores Independentes

S.S.; and (ii) the financial statements for the fiscal year ended December 31, 2014.

São Paulo, February 26, 2015.

Board of Executive Officers David Antonio Díaz Almazán Chief Executive Officer Felipe Ezquerra Plasencia Vice Chief Executive Officer and Administrative and Finance Officer Alessandro Scotoni Levy Investor Relations Officer Maria de Castro Michielin Legal Officer Angelo Luiz Lodi Executive Officer Paulo Pacheco Fernandes Executive Officer

Board of Directors José Carlos Ferreira de Oliveira Filho Chairman Benjamin Michael Vaughan Member David Antonio Díaz Almazan Member Francisco José Aljaro Navarro Member Francisco Miguel Reynés Massanet Member Lluíz Deulofeu Fuguet Member Luiz Ildefonso Simões Lopes Member Marta Casas Caba Member Marcos Pinto Almeida Member Pedro Wongtschowski Independent Member Sérgio Silva de Freitas Independent Member

4

INDEPENDENT AUDITORS ' REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS to Board of Directors and Shareholders Arteris S.A. São Paulo - SP Introduction We have audited the individual and consolidated financial statements of Arteris S.A. ( "Company " ) , identified as Company and Consolidated , respectively , which comprise the balance sheet as at December 31, 2013 and the related statements of income, comprehensive income, changes in equity and net cash flows for the year then ended , and a summary of significant accounting policies and other explanatory notes . Management's responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting practices adopted in Brazil and the consolidated financial statements in accordance with International Financial Reporting Standards ( IFRS) issued by the International Accounting Standards Board ( IASB ) , and in accordance with accounting practices adopted in Brazil , and for such internal control as management determines is necessary to enable the preparation of financial statements free from material misstatement, whether caused by fraud or error. Auditors' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit conducted in accordance with national and international auditing standards. Those standards require that we comply with ethical requirements by auditors and the audit is planned and performed to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error . In this risk assessment, the auditor considers internal control relevant to the preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal controls of the Company. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements taken as a whole. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion. Opinion on financial statements In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Arteris SA on December 31, 2013 , the results of its operations and its cash flows for the year ended that date, in accordance with accounting practices adopted in Brazil . Opinion on the consolidated financial statements In our opinion, the aforementioned consolidated financial statements present fairly , in all material respects, the consolidated financial position of Arteris SA on December 31, 2013 ,

5

the consolidated results of its operations and its cash flows for the year then ended in accordance with accounting practices adopted in Brazil . Emphasis As described in Note 3, the financial statements have been prepared in accordance with accounting practices adopted in Brazil , which , in the case of Arteris SA , differ from IFRS applicable to the separate financial statements only as regards the valuation of investments in subsidiaries under the equity method , which , under IFRS , would be valued at cost or fair value and the option of maintaining the balance of deferred charges , as at December 2008 , which is being amortized 31 . Our opinion is not qualified in respect of this matter. Other Subjects Statements of value added Also audited the statements , individual and consolidated , Value Added ( DVA) for the year ended December 31, 2013 , prepared under the responsibility of the directors of the Company , whose presentation is required by Brazilian corporate law for public companies , and how supplementary information under IFRS that does not require disclosure. These statements are subject to the same audit procedures described above and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.


BDO RCS Independent Auditors

CRC 2 SP 013846/O-1

Paulo Sérgio Tufani

Accountant CRC 1 SP 124504/O-9

Francisco de Paula dos Reis Júnior

Accountant CRC 1 SP 139268/O-6

ARTERIS S.A.

(In thousands of Brazilian reais - R$)

ASSETS Note 12.31.2014 12.31.2013 12.31.2014 12.31.2013 LIABILITIES AND SHAREHOLDERS' EQUITY Note 12.31.2014 12.31.2013 12.31.2014 12.31.2013

CURRENT ASSETS CURRENT LIABILITIES

Cash and cash equivalents 5 109.516 185.442 1.410.451 929.911 Borrowings and financing 12 - - 198.865 142.989

Trade receivables 6 - - 154.062 126.709 Borrowings and financing - related parties 14 107.042 60.675 - -

Amounts due from related parties 14 227.103 60.227 - - Debentures 13 230.372 - 879.384 145.493

Inventories - - 9.950 7.662 Trade payables 2.809 1.003 142.868 122.115

Prepaid expenses 3.085 59 15.358 10.411 Payroll and related taxes 12.164 11.530 76.815 79.899

Taxes recoverable 14.082 - 47.482 19.965 Taxes payable 3.886 2.709 72.748 82.679

Dividends receivable 14 6.929 14.632 - - Amounts due to related parties 14 152 201 152 154

Restricted investments 8 - - 174.377 47.383 Contractual guarantees - - 61.764 44.847

Other receivables 1.267 2.826 6.806 5.691 Inspection fee - - 2.289 3.101

Total current assets 361.982 263.186 1.818.486 1.147.732 Dividends proposed 27.028 22.183 27.028 22.183

Concession fees 15 - - 74.452 70.299

NON-CURRENT ASSETS Provision for maintenance in highways 16 - - 95.258 71.043

Restricted investments 8 - - 84.860 63.604 Provision for investments in highways 16 - - 98.280 68.489

Amounts due from related parties 14 1.143.779 787.826 - - Claims received - - 18.347 40.152

Taxes recoverable - 13.726 - 13.726 Other payables 2.756 4.347 9.566 7.048

Prepaid expenses - - 3 22 Total current liabilities 386.209 102.648 1.757.816 900.491

Contractual guarantees 47 302 68 331

Deferred income tax and social contribution 7 - - 183.906 172.108 NON-CURRENT LIABILITIES

Escrow deposits 16 5.113 4.806 54.103 20.372 Borrowings and financing 12 - - 2.716.797 2.148.990

Other receivables - - 235 217 Borrowings and financing - related parties 14 1.124.251 828.577 - -

Investments in subsidiaries and associates 9 2.458.045 1.988.918 1.052 1.053 Debentures 13 309.154 205.022 2.257.459 1.687.256

Property and equipment 10 9.173 5.095 61.486 46.377 Trade payables - 68 15 290

Intangible assets 11 9.391 659 7.395.629 5.903.469 Concession fees 15 - - 163.048 216.540

Total non-current assets 3.625.548 2.801.332 7.781.342 6.221.279 Civil, labor and tax risks 16 - - 15.198 11.787

Deferred revenue - - 461 427

Deferred income tax and social contribution 7 - - 90.294 76.326

Provision for maintenance in highways 16 - - 443.244 401.395

Provision for investments in highways 16 - - 26.120 43.151

Other payables - - 599 2.785

Total non-current liabilities 1.433.405 1.033.667 5.713.235 4.588.947

EQUITY

Share capital 873.822 772.417 873.822 772.417

Profit reserves 1.316.365 1.178.057 1.277.226 1.129.427

Valuation adjustment to equity - foreign exchange differences on capital17 (22.271) (22.271) (22.271) (22.271)

Total equity 2.167.916 1.928.203 2.128.777 1.879.573

TOTAL ASSETS 3.987.530 3.064.518 9.599.828 7.369.011 TOTAL LIABILITIES AND EQUITY 3.987.530 3.064.518 9.599.828 7.369.011

The accompanying notes are an integral part of these financial statements.

BALANCE SHEET AS AT DECEMBER 31, 2014

Parent Company Consolidated Parent Company Consolidated

6

ARTERIS S.A.

INCOME STATEMENT FOR THE PERIOD ENDED DECEMBER 30, 2014

(In thousands of Brazilian reais - R$, except basic and diluted earnings per share)

Note 12.31.2014 12.31.2013 12.31.2014 12.31.2013

NET OPERATING REVENUE 18 - - 4.018.133 3.377.473

COST OF SERVICES 19 - - (2.812.470) (2.237.115)

OTHER REVENUES

Equity in the arnings (losseS) of subsidiaries 9 467.218 466.156 - -

GROSS PROFIT 467.218 466.156 1.205.663 1.140.358

OPERATING (EXPENSES) INCOME

General and administrative 19 (3.824) (20.708) (182.086) (181.818)

Management compensation 14 (6.111) (12.306) (19.259) (21.331)

Tax expenses (2.759) (2.303) (3.755) (3.146)

Other operating income, net 13.089 10.853 11.968 12.960

OPERATING PROFIT BEFORE

FINANCE INCOME 467.613 441.692 1.012.531 947.023

FINANCE INCOME (COSTS)

Finance income 20 143.462 72.725 127.375 61.061

Finance costs 20 (162.525) (87.447) (450.073) (338.824)

Foreign exchange gain (loss), net (39) - 324 (4)

(19.102) (14.722) (322.374) (277.767)

OPERATING PROFIT BEFORE INCOME TAX

ANDO SOCIAL CONTRIBUTION 448.511 426.970 690.157 669.256

INCOME TAX AND SOCIAL CONTRIBUTION

Current 22 (1.141) - (231.128) (230.600)

Deferred 22 - - (2.169) 27.684

NET PROFIT FOR THE PERIOD 447.370 426.970 456.860 466.340

PROFIT ATTRIBUTABLE TO

Owners of the Company 447.370 426.970 456.860 466.340

BASIC AND DILUTED EARNINGS PER SHARE - R$ 23 1,2988 1,2396 1,3264 1,3539


Parent Company Consolidated

7

ARTERIS S.A.

Individual statement of comprehensive income for the

period ended DECEMBER 30, 2014


12.31.2014 12.31.2013

Net income for the year from continuing operations 447.370 426.970

Other comprehensive income

- -

Total comprehensive income for the period 447.370 426.970

LUCRO ATRIBUÍDO A

Participação de controladores 447.370 426.970


8

ARTERIS S.A.

Individual statement of comprehensive income for the

period ended DECEMBER 30, 2014


12.31.2014 12.31.2013

Net income for the year from continuing operations 456.860 466.340

Other comprehensive income

- -

Total comprehensive income for the period 456.860 466.340

LUCRO ATRIBUÍDO A

Participação de controladores 456.860 466.340


9

ARTERIS S.A.


Valuation

adjustments

to capital -

Share Earnings foreign exchange Retained Consolidated

capital Legal retention differences on capital earnings equity

BALANCES AT DECEMBER 31, 2012 679.970 80.076 864.863 92.446 (22.271) - 1.695.084

Capital increase 92.447 (92.447) -

Distribution of additional dividends proposed (92.446) (92.446)

Lucro líquido do exercício - - - - 426.970 426.970

Net income for the year

Legal Reserve - 21.349 - - (21.349) -

Dividends Paid - - - - (79.222) (79.222)

Proposed dividends - - - - (22.183) (22.183)

Additional Proposed dividends - - 101.405 - (101.405) -

Retenção de lucros - - 202.811 - (202.811) -


Capital increase 101.405 (101.405) -

Distribution of additional dividends proposed (101.405) (101.405)

-

Lucro líquido do exercício - - - - 447.370 447.370

Net income for the year -

Legal Reserve - 22.369 - - (22.369) -

Dividends Paid - - - - (79.222) (79.222)



-

BALANCES AT DECEMBER 31, 2014 873.822 123.794 1.192.571 - (22.271) - 2.167.916


INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED DECEMBER 31, 2014

Profit reserves

Additional dividend

proposed

10

ARTERIS S.A.


Valuation

adjustments

to capital -

Share Earnings foreign exchange Retained Consolidated

capital Legal retention differences on capital earnings equity


Capital increase 92.447 - (92.447) - - - -

Distribution of additional dividends proposed - - -

Aumento de capital - - -

Distribuição de dividendos adicionais propostos - - - (92.446) - - (92.446)

Lucro líquido do exercício - - - - - 466.340 466.340

Net income for the year

Legal Reserve - 21.349 - - (21.349) -

Dividends Paid - - - - (79.222) (79.222)


Additional Proposed dividends - - - 101.405 - (101.405) -



Capital increase 101.405 - (101.405) - - - -

Distribution of additional dividends proposed - - (101.405) - - (101.405)

- - - - - 456.860 456.860

Lucro líquido do exercício

Net income for the year - 22.843 - - (22.843) -

Legal Reserve - - - - (79.222) (79.222)

Dividends Paid - - - - (27.028) (27.028)

Additional Proposed dividends - - 327.767 - (327.767) -

Retenção de lucros

873.822 124.268 1.152.958 - (22.271) - 2.128.777

BALANCES AT DECEMBER 31, 2014


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE PERIOD ENDED DECEMBER 31, 2014

Profit reserves

Additional dividend

proposed

11

ARTERIS S.A.

STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED DECEMBER 31, 2014


12.31.2014 12.31.2013 12.31.2014 12.31.2013

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the year 447.370 426.970 456.860 466.340

Adjustments to reconcile profit for the year to net cash (used in) generated by operating activities:

Depreciation and amortization 1.802 1.269 344.689 285.745

Write-off of permanent assets 96 129 27.774 2.368

Deferred income tax and social contribution - - 2.169 (27.684)

Inflation adjustment and interest on concession fees - - 22.105 28.500

Income from restricted investments - - (18.236) (8.486)

Interest and inflation adjustment on borrowings (6.603) (16.348) 107.214 124.963

Interest and inflation adjustment on debentures 38.321 5.022 277.108 139.080

Finance costs / (income) from discount to present value - - 26.754 22.815

Recognition (reversal) of provision for civil, labor and tax risks - - 10.343 4.655

Recognition (reversal) of provision for maintenance in highways - - 103.071 120.370

Equity in the earnings (losses) of subsidiaries (467.218) (466.156) - -

Decrease (increase) in operating assets:

Trade receivables - - (27.353) (15.695)

Amounts due from related parties (4.360) (10.043) - 90

Inventories - - (2.288) 1.216

Prepaid expenses (3.026) 39 (6.862) (1.348)

Taxes recoverable (1.151) (5.544) (11.472) (8.421)

Other receivables 1.559 (2.603) (1.115) (3.349)

Contractual guarantees 255 (64) 263 (41)

Escrow deposits (307) (229) (33.731) (5.663)

Other receivables 228 114 (18) (1)

Increase (decrease) in operating liabilities:

Trade payables 7.202 283 (85.979) 5.112

Amounts due to related parties - - (2) (13.723)

Contractual guarantees of suppliers (13) (34) 10.107 1.948

Payroll and related taxes 634 4.308 (3.084) 20.195

Taxes payable 1.177 1.188 142.609 191.612

Income tax and social contribution paid - - (152.365) (183.187)

Deferred revenue - - 34 29

Amounts due to related parties (49) 13.344 - -

Claims received - - (21.250) (8.173)

Other payables (1.591) 4.048 53 2.861

Concession fees - - 126 (1.432)

Civil, labor and tax risks - - (6.932) (3.044)

Payment of interest - federal - - (176.788) (153.382)

Net cash (used in) generated by operating activities 14.326 (44.307) 983.804 984.270

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment (5.747) (706) (19.515) (11.632)

Increase in intangible assets (8.962) (352) (1.721.640) (1.239.908)

Restricted investments - - (219.135) (303.857)

Amount redeemed from restricted investments - - 86.802 332.733

Additions to investments (444.000) (135.000) - -

Interest on capital received 10.287 19.744 - -

Dividends received 424.797 309.427 - -

Net cash generated by (used in) investing activities (23.625) 193.113 (1.873.488) (1.222.664)

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings and financing:

Funding - 290.000 773.255 862.679

Payments - - (147.148) (453.411)

Payment of interest - - (912) (9.168)

Debentures:

Issue of debentures 300.000 200.000 1.321.138 1.136.976

Payment of - principal - - (130.262) (699.791)

Payment of debentures - interest (3.817) - (171.467) (91.782)

Payment of concession fees - - (71.570) (66.852)

Payment of dividends (202.810) (191.783) (202.810) (191.783)

Loans - related parties (160.000) (273.000) - -

Net cash (used in) generated by financing activities (66.627) 25.217 1.370.224 486.868

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (75.926) 174.023 480.540 248.474

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 185.442 11.419 929.911 681.437

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 109.516 185.442 1.410.451 929.911



12

ARTERIS S.A.

STATEMENTS OF VALUE ADDED FOR THE PERIOD ENDED

DECEMBER 31, 2014


12.31.2014 12.31.2013 12.31.2014 12.31.2013

REVENUES

Services provided - - 2.431.851 2.300.436

Revenue from construction services - - 1.757.447 1.258.870

Other revenues - - 47.060 42.877

- - 4.236.358 3.602.183

INPUTS PURCHASED FROM THIRD PARTIES

Cost of services provided - - 259.792 125.881

Cost of construction services - - 1.757.447 1.258.870

Materials, energy, outside services and other - - 164.172 123.869

Cost of concession - - 110.514 121.815

Cost of provision for maintenance in highways - - 145.463 196.030

Other - - 14.490 14.007

- - 2.451.878 1.840.472

GROSS VALUE ADDED - - 1.784.480 1.761.711

DEPRECIATION AND AMORTIZATION 1.802 1.269 344.689 285.745

NET VALUE ADDED GENERATED (RETAINED) (1.802) (1.269) 1.439.791 1.475.966

VALUE ADDED RECEIVED THROUGH TRANSFER

Equity in the earnings (losses) of subsidiaries 467.218 466.156 - -

Finance income 143.462 72.725 127.375 61.061

Dividends received 6.830 7.150 78.426 7.150

Capitalized interest - 6.830 35.388

Other 6.323 3.781 7.093 70.649

623.833 549.812 219.724 174.248

TOTAL VALUE ADDED TO BE DISTRIBUTED 622.031 548.543 1.659.515 1.650.214

DISTRIBUTION OF VALUE ADDED

Personnel and payroll charges:

Salaries 2.274 6.083 149.929 217.065

Benefits 248 802 42.157 73.620

Severance Pay Fund (FGTS) 200 690 12.291 18.165

Taxes and contributions:

Federal (including tax on financial transactions - IOF) 8.188 7.831 359.081 375.097

State 25 703 356 1.048

Municipal - 73 123.541 134.866

Lenders:

Interest 32.037 - 386.964 266.357

Capitalized interest - 78.426 35.388

Rentals (2) 1.193 11.506 11.637

Other 5.760 23.060 38.404 50.631

Shareholders:

Interest 125.931 81.138 - -

Capitalized interest - - -

Dividends - - -

Profit for the year 106.251 - 106.251 110.756

341.119 426.970 350.609 355.584

- - -

622.031 548.543 1.659.515 1.650.214



13

ARTERIS S.A. AND SUBSIDIARIES

Independent auditor’s report Individual and consolidated financial statements at December 31, 2014

ARTERIS S.A. AND SUBSIDIARIES Individual and consolidated financial statements at December 31, 2014 Contents Independent auditor’s report Balance sheets Income statements Statements of comprehensive income Statements of changes in equity Statements of cash flows – indirect method Statements of value added Notes to the financial statements

12


FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014 AND INDEPENDENT AUDITOR’S REPORT

TABLE OF CONTENT

1. OPERATIONS .............................................................................................................................. 13

2. CONCESSIONS ............................................................................................................................ 13

3. BASIS OF PREPARATION ........................................................................................................... 27

4. SIGNIFICANT ACCOUNTING POLICIES .................................................................................... 30

5. CASH AND CASH EQUIVALENTS .............................................................................................. 41

6. TRADE RECEIVABLES ................................................................................................................ 41

7. DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION ........................................................ 42

8. RESTRICTED INVESTMENTS ..................................................................................................... 44

9. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES ................................................................ 45

10. PROPERTY AND EQUIPMENT ................................................................................................... 47

11. INTANGIBLE ASSETS ................................................................................................................. 49

12. BORROWINGS AND FINANCING ............................................................................................... 51

13. DEBENTURES ............................................................................................................................. 55

14. RELATED-PARTY TRANSACTIONS ........................................................................................... 60

15. CONCESSION FEES .................................................................................................................... 64

16. PROVISIONS ............................................................................................................................... 67

17. EQUITY ....................................................................................................................................... 69

18. REVENUES .................................................................................................................................. 71

19. COSTS AND EXPENSES BY NATURE......................................................................................... 71

20. FINANCE INCOME (COSTS)....................................................................................................... 72

21. STATEMENT OF CASH FLOWS ................................................................................................. 73

22. RECONCILIATION OF INCOME TAX AND SOCIAL CONTRIBUTION ....................................... 73

23. EARNINGS PER SHARE .............................................................................................................. 75

24. FINANCIAL INSTRUMENTS ........................................................................................................ 75

25. SEGMENT REPORTING .............................................................................................................. 79

26. GUARANTEES AND INSURANCES ............................................................................................. 82

27. EVENTS AFTER THE REPORTING PERIOD .............................................................................. 83

13


NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2014 (Amounts in thousands of Brazilian reais - R$, unless otherwise stated)

1. OPERATIONS

Arteris S.A. (“Company”) has its registered office and principal place of business at

Av. Presidente Juscelino Kubitschek, 1455 - 9º andar, in the city of São Paulo, state

of São Paulo, Brazil. The Company’s individual and consolidated financial

statements for the year ended December 31, 2014 include the Company and its

subsidiaries (collectively referred to as “Arteris Group” and individually as “Group

entity”). The Company was established on November 9, 1998 and is primarily

engaged in:

Execution by means of management, contracting or subcontracting of

construction works, including ancillary or complementary services, except the

supply by the Company of merchandise outside the location where the services

are provided.

Conducting of studies, calculations, projects, tests and supervision related to

engineering and civil construction activities.

Performance of infrastructure works in general, including, without restriction,

construction services, earthworks in general, signaling, reinforcement,

improvement, recovery, maintenance and conservation of highways, and

engineering consultancy in general.

Direct operation and/or operation in consortiums of businesses relating to public

construction works and/or services in the infrastructure sector in general, by

means of any agreement mode, including, but not limited to, public-private

partnerships, authorizations, permissions and concessions.

Operation and maintenance of transportation infrastructure in general.

Holding of equity interests in other companies that develop the activities

previously mentioned.

The individual and consolidated financial statements were approved by the Board of

Directors and authorized for issue on February 25, 2015.

2. CONCESSIONS

In conformity with its corporate purposes, as at December 31, 2014, the Company

holds interests in the following São Paulo State highway concessionaires and Federal

highway concessionaires:

14

State concessionaires

Autovias S.A. (“Autovias”)

Autovias is a corporation with its registered office in the city of Ribeirão Preto,

State of São Paulo, Brazil, at Anhanguera Highway, km 312.2, and started its

operations on September 1, 1998 to operate, under a concession through August

31, 2018, the highway network connecting the cities of Franca, Batatais,

Ribeirão Preto, Araraquara, São Carlos and Santa Rita do Passa Quatro and

respective access routes, under the terms of the concession agreement entered

into with the São Paulo State Highway Department (DER/SP) No. 18/CIC/97/Lot

10.

Autovias agreed with the São Paulo State Public Transportation Services

Regulatory Agency (“ARTESP”) to include a new project in the concession

agreement – the duplication of 14 kilometers of the SP 318, between km 253

and 249. The inclusion of the works in the agreement and the latter’s economic

and financial rebalancing will be executed through the Marginal Cash Flow

methodology, by extending the concession term of the Company’s by six

months.

Autovias assumed commitments to implement the works resulting from the

concession, with the main projects of such works already completed, as follows:

Works

SP 255 - Antônio Machado Sant’anna Highway:

Implementation of the second lane in the stretch between kilometers 2.8

and 48.35;

Implementation of additional lanes along the entire stretch between

kilometers 48.35 and 77.

SP 318 - Engenheiro Thales de Lorena Peixoto Júnior Highway:

Implementation of additional lanes from kilometer 257.8 to kilometer 280.

SP 330 – Anhanguera Highway:

Implementation of side lanes in Ribeirão Preto (17.2 kilometers).

SP 334 - Cândido Portinari Highway:

Complementation of the duplication of the stretch between kilometers 322

and 337;

15

Implementation of the second lane in the stretch between kilometers 337

and 348;

Implementation of the second lane in the stretch between kilometers 358

and 395.5.

SP 345 - Engenheiro Ronan Rocha Highway:

Implementation of the second lane and repaving of the stretch between

kilometers 10 and 36;

Implementation of side lanes between kilometers 30 and 35, on the right

side, and between kilometers 33 and 35, on the left side.

Centrovias Sistemas Rodoviários S.A. (“Centrovias”)

Centrovias is a corporation with its registered office in the city of Itirapina,

State of São Paulo, Brazil, located at Washington Luis Highway, km 216.8, South

Lane. It began operations on June 9, 1998 under a Highway Concession

Agreement signed with the Highway Department (DER), regulated by State

Decree No. 42,411 of October 30, 1997, and its exclusive objective is to

operate, under a concession, the highway system that connects the cities of São

Carlos to Cordeirópolis, and Itirapina to Jaú, and Jaú to Bauru.

Under Modifying Amendment 11, of December 21, 2006, the São Paulo State

Public Transportation Services Regulatory Agency (ARTESP) authorized a revision

of Centrovias concession agreement to ensure its financial and economic

balance. As a result of such revision, the concession period was extended for

additional 12 months without changing current fixed concession fees. Therefore,

the operation period of the concession was extended to June 19, 2019.

Centrovias assumed commitments to implement the works resulting from the


Works

SP 225 - Engenheiro Paulo Nilo Romano and Comandante João Ribeiro de Barros

Highways:

Implementation of the second lane in the stretch between kilometers 91 +

429 and 177 + 400;

Implementation of the second lane in the stretch between kilometers 183 +

850 and 235 + 040.

16

Concessionária de Rodovias do Interior Paulista S.A. (“Intervias”)

Intervias is a corporation with its registered office in the city of Araras, State of

São Paulo, Brazil, located at Anhanguera Highway, km 168, South Lane. It was

founded on May 28, 1999 and began operating on February 18, 2000 under a

Highway Concession Agreement signed with the State Highway Department

(DER/SP 19/CIC/98), regulated by State Decree No. 42,411 of October 30, 1997.

The purpose of the agreement is to operate, under a concession, the highway

system that links the cities of Itapira, Mogi-Mirim, Limeira, Piracicaba, Conchal,

Araras, Rio Claro, Casa Branca, Porto Ferreira and São Carlos - Lot 6. The work

under the concession encompasses performance, management and inspection of

the delegated services, including operating services, conservation and expansion

of the system, complementary and non-delegated services, besides the acts

required for compliance with the object, in the manner provided by the

concession agreement signed.

Under Modifying Amendment 14/06, of December 21, 2006, ARTESP authorized

the revision of the concession agreement of Intervias to ensure its financial and

economic balance. As a result of such revision, the concession period was

extended for additional 95 months without changing current fixed concession

fees. Therefore, the operation period of the concession was extended to

January 16, 2028 (335 months).

Intervias originally assumed commitments to implement the works resulting

from the concession, with the main projects of such works already completed,

as follows:

Works

SP 147 - Engenheiro João Tosello Highway

Duplication of the highway in the stretch between kilometers 41.36 (in

Itapira) and 54 (in Mogi-Mirim) and between kilometers 62.45 (in Mogi-Mirim)

and 106.32 (in Limeira).

SP 191 – Wilson Finardi Highway

Duplication of the highway in the stretch between kilometers 43.8 and 44.9

(Mogi-Mirim/Araras), kilometers 45.6 and 46.9 (Araras/Anhanguera) and

kilometers 49.7 and 74.72 (Araras/Rio Claro).

SP 352 - Comendador Virgolino de Oliveira Highway

Duplication of the highway in the stretch between kilometers 162.45 and

185.17 (Itapira – border with the State of Minas Gerais).

17

SP 165/330 - Anhanguera Highway – Araras Beltway

In accordance with Modifying Amendment 06/02 and third readequacy of

the work schedule of 10/08/2002, a stretch comprising 4.67 kilometers of

highway, known as Araras Beltway, was built at SP 165/330, from Km 165,225

of SP 330 - Anhanguera Highway - to Km 42,300 of SP 191 - Wilson Finardi

Highway.

Vianorte S.A. (“Vianorte”)

Vianorte is a corporation with its registered office in the city of Sertãozinho,

State of São Paulo, Brazil, located at Attílio Balbo Highway, km 327.5. It started

operations on March 6, 1998 under a Highway Concession Agreement signed with

the São Paulo State Highway Department (DER/SP 009/CIC/97/Lot 05), with

the purpose of operating, under a concession until March 2018, the highway

system made up of the following state highways: SP-330 Anhanguera Highway,

SP-322 Attílio Balbo Highway/Armando Salles de Oliveira Highway, SP-328

Alexandre Balbo Highway/northern periphery of Ribeirão Preto and SP-325/322

Avenida dos Bandeirantes.

Vianorte assumed commitments to implement the works resulting from the


Works

322 Attílio Balbo Highway / Armando Salles de Oliveira Highway

Duplication of the stretch between kilometers 343 + 500 and kilometers 390

+ 500 - Sertãozinho/ Bebedouro;

Duplication of the stretch between kilometers 307 + 500 and kilometers 325

+ 910 – Contorno Viário Sul (Southern Beltway);

Construction of access/return connections;

Construction of pedestrian overpasses between kilometers 334 + 860 and

kilometers 337 + 790 – Sertãozinho;

Construction of service roads between kilometers 333 + 160 and kilometers

343 + 480;

Expansion of the connection with state highway SP 325/322 kilometer 325 +

910 (junction);

Construction of the transposition works over the local stream Córrego Santa

Elisa at kilometer 345 + 100.

18

SP 328 Alexandre Balbo Highway

Duplication of the stretch between kilometers 323+130 and kilometers

337+010;

Construction of connections in kilometers 326+220 / 330+720 / 334+710 /

335+160 – superior overpass (PSU).

SP 330 – Anhanguera Highway

Construction of pedestrian overpass at kilometer 380 - São Joaquim da

Barra;

Construction of a user support base in Orlândia at kilometers km 366 + 150;

Construction of a connection with Avenida Lara Nilza Raffaini Cação at

kilometers 319 + 650.

SP 325/322 - Avenida dos Bandeirantes – Ribeirão Preto

Construction of pedestrian overpass at kilometers 8+550;

Construction of steel gallery at kilometers 6+400;

Construction of connection at kilometers 8+300.

As a result of these concession agreements, the state concessionaires have

recognized the rights to use and operate, accounted for in intangible assets as

concession rights, against “concession fees”, in liabilities, as mentioned in notes

11 and 15, respectively.

As set out in the concession agreements of these concessionaires, tolls are

adjusted in July, based on the variation of the General Market Price Index (IGP-

M) through May 31.

As a result of a resolution from the Managing Board of the São Paulo State Public

Transportation Services Regulatory Agency (“ARTESP” or “Concession

Authority”), of July 27, 2011, the Concession Authority prepared and the

Company agreed, in December 2011, with the Modifying Amendment - TAM,

which establishes the change of the toll adjustment index from the General

Market Price Index - IGP-M to the Extended National Consumer Price Index -

IPCA, in order to standardize the toll adjustment system, maintaining the

annual periodicity and the adjustment reference month. The change of the

adjustment index will entail an annual contractual revision with the Concession

Authority for verification of the existence of economic imbalance arising from

the use of the new index, which may determine the imbalance in favor of the

19

Company or of the Concession Authority, through the change of the concession

period or another form mutually defined between the parties. The TAM clauses

became effective on January 1, 2012 and were subject to the authorization of

the State Secretary of Logistics and Transportation. This amendment was

approved on June 28, 2012 and became effective as of July 1, 2013.

On June 27, 2013, the extraordinary resolution of ARTESP’s Managing Board

regarding the toll tariff adjustment was published in the Diário Oficial do

Estado. To sum up, the resolution authorizes adjusting the concessionaires’ toll

tariffs as of July 1, 2013 by the General market Price Index (IGP-M), but with no

pass-through of inflation to users. The Managing Board authorized the charging

of tariffs for air lift axles of heavy vehicles and the reduction of variable

concession fee percentages since July 2013, except for the payments made in

November 2013 and suggests measures for rebalancing the concession contracts.

Such measures shall be evaluated on an individual basis, and resolved on by the

Secretary of Transport, and approved by the granting authority.

Exceptionally, between July and September, November and December 2013, the

variable concession fee was calculated based on 1.5% of gross revenue to offset

the non-pass-through of inflation to tariffs as of July 1, 2013, as published on

July 27, 2013 in the Diário Oficial do Estado, proceedings No. 015.147/2013 and

registration No. 234.316/13.

On December 14, 2013, ARTESP’s Managing Board extended, for indefinite term,

the previously granted authorization to withhold and discount 50% of the

amount due as variable concession fee (which corresponds to 1.5% of the

concessionaire’s revenue). This extension does not include the payments made

in November 2013 related to the variable concession fee of October 2013.

On June 28, 2014, the extraordinary resolution of ARTESP’s Managing Board

regarding the toll tariff adjustment was published in the Diário Oficial do

Estado. To sum up, the resolution authorized adjusting the concessionaires’ toll

tariffs as of July 1, 2014 by the IPCA Index, with an adjustment of 5.17% for

Autovias, 5.04% for Centrovias, 4.67% for Intervias and 5.58% for Vianorte,

which did not correspond to the IPCA rate variation in the period. The Company

does not agree with the São Paulo state government’s unilateral decision,

announced by ARTESP, and it is taking the measures to guarantee its rights.

On September 19, 2014, the subsidiary Centrovias was granted an injunction

from the Court of Appeals of São Paulo to fully adjust its toll tariffs. The

adjustment index to be applied is 6.37% and is in compliance with the IPCA rate

variation between June 2013 and May 2014. Tariffs were adjusted as of that

date, at 12:00 a.m.

20

At the end of the concession periods, all reversible assets, rights and privileges

related to the operation of the highway systems transferred to the

concessionaires or implemented by them will be handed over to the Concession

Authority. The handover will be free of charge and automatic, with the assets in

perfect conditions of operation, use and maintenance, and free from any

encumbrances or charges. The concessionaires will be entitled to compensation

for the unamortized or undepreciated balance of works or assets whose

construction or purchase, duly authorized by the Concession Authority, have

occurred in the last five years of the concession periods, as long as carried out

to ensure the continuity and upgrading of the services included in the

concession.

The state concessionaires estimate the amounts shown below, as at December

31, 2014 and 2013, to meet the requirements to make investments and carry

out recovery and maintenance works through the end of the concession

agreements. These amounts referring to December 31, 2014, are subject to

changes due to contract adaptations and periodic revisions of cost estimates

over the concession period.

12.31.2014 Autovias Centrovias Intervias Vianorte

Total Nature of costs

Forecast from

2015 to 2018

Forecast from 2015 to 2019



Infrastructure

improvements 121,544 42,152 454,661 5,694 624,051

Special upkeep work 178,278 97,309 187,983 86,061 549,631

299,822 139,462 642,644 91,755 1,173,682

12.31.2013

Autovias Centrovias Intervias Vianorte

Total Nature of costs

Forecast from

2014 to 2018




Infrastructure

improvements 73,352 17,442 436,753 25,000 552,547

Special upkeep work 242,170 168,498 279,406 149,200 839,274

315,522 185,940 716,159 174,200 1,391,821

Investment estimates were broken down as mentioned in Note 3 “Recognition of

intangible assets.”

Regardless of the maintenance and conservation necessary to maintain the

appropriate service level throughout the concession period, the state

concessionaires are required to hand over the highway systems in good

conditions, properly adjusted at the time of the handover, and guaranteed

21

additional useful life of six years of the structures in general, especially the

pavement. During this period, subsequent to the handover, no structure

recovery and/or repair services should be required due to the maintenance

carried out designed to preserve the structure of the highways.

Federal concessionaires

Autopista Planalto Sul S.A. (“Planalto Sul”)

Planalto Sul is a corporation with its registered office in the city of Rio Negro,

State of Paraná, located at Avenida Afonso Petschow, 4040 - Industrial District.

It was founded on December 19, 2007 and its sole purpose is to engage in public

concession services for the highway lot BR-116/PR/SC, along the stretch

between Curitiba and the border between the States of Santa Catarina and Rio

Grande do Sul, object of the bidding process corresponding to lot 02, in

conformity with Bid Notice No. 006/2007, published by the National Ground

Transportation Agency (ANTT), including public works such as recovery,

maintenance, monitoring, conservation, operation, expansion and

improvements.

Planalto Sul is fully operational since February 22, 2009, date of the beginning

of operation of its last toll plaza on BR-116/km 134 - PR. The concessionaire

assumed the following commitments to implement the works resulting from the

concession:

25.4 kilometers of highway duplication;

48.3 kilometers of third lane;

10.2 kilometers of side routes;

Construction of nine pedestrian overpasses;

Construction of five toll plazas;

Construction of nine operational service bases (BSOs);

Implantation and overhaul of truck weighting stations;

Recovery and maintenance of the entire extension of the highway.

Autopista Fluminense S.A. (“Fluminense”)

Fluminense is a corporation with its registered office in the city of São Gonçalo,

State of Rio de Janeiro, Brazil, located at Avenida São Gonçalo, 100 - Unit 101.

It was founded on December 19, 2007 and its sole purpose is to engage in public

concession services for highway lot BR-101/RJ, encompassing the stretch

22

between the border of the states of Rio de Janeiro and Espírito Santo -

Presidente Costa e Silva Bridge, object of the bidding process corresponding to

lot 04, in conformity with Bid Notice No. 004/2007, published by the ANTT,

including public works such as recovery, maintenance, monitoring,

conservation, operation, expansion and improvements.

Fluminense is fully operational since August 31, 2009, date of beginning of

operation of its last toll booth area on BR-101/km 252, RJ. The concessionaire


concession:



28.3 kilometers of branch and peripheral roads;

Construction of 17 pedestrian overpasses;


Construction of seven operational service bases (BSOs);

Implantation and overhaul of truck weighting stations;

Recovery of the entire extension of the highway.

Autopista Fernão Dias S.A. (“Fernão Dias”)

Fernão Dias is a corporation with its registered office in the city of Pouso

Alegre, State of Minas Gerais, Brazil, located on BR-381 Highway, km 850.5 –

North Lane. It was founded on December 19, 2007 and its sole purpose is to

engage in public concession services for highway lot BR 381-MG/SP,

encompassing the stretch between Belo Horizonte and São Paulo, object of the

bidding process corresponding to lot 05, in conformity with Bid Notice No.

002/2007, published by the ANTT for a term of 25 years counted from February

15, 2008, including public works such as recovery, maintenance, monitoring,

conservation, operation, expansion and improvements.

Fernão Dias is fully operational since September 9, 2010, date of beginning of

operation of its last toll booth area on BR-381/km 65, SP. The concessionaire


concession:

88.8 kilometers of third lane;

23




Construction of eight toll plazas;

Construction of 12 operational service bases (BSOs);

Implementation and overhaul of truck weighting stations;


Autopista Régis Bittencourt S.A. (“Régis Bittencourt”)

Régis Bittencourt is a corporation with its registered office in the city of

Registro, State of São Paulo, Brazil, located at SP 139 Highway, 216. It was

founded on December 19, 2007 and its sole purpose is to operate highway lot

BR-116 – SP/PR, encompassing the stretch between São Paulo and Curitiba,

object of the bidding process corresponding to lot 06, in conformity with Bid

Notice No. 001/007, published by the ANTT, in the form of a 25-year public

service concession that began on February 14, 2008, with no extension of the

concession period being permitted, including public works such as recovery,

maintenance, monitoring, conservation, operation, expansion and

improvements.

Régis Bittencourt is fully operational since May 18, 2009, date of the

beginning of operation of its last toll plaza on BR-116/km 542 - SP. The

concessionaire assumed the following commitments to implement the works

resulting from the concession:


30 kilometers of third lane;

55 kilometers of side routes;



Construction of six toll plazas;



24


Autopista Litoral Sul S.A. (“Litoral Sul”)

Litoral Sul is a corporation with its registered office in the city of Joinville,

State of Santa Catarina, Brazil, located at Rua Ministro Calógenas, 343. It was

founded on December 19, 2007, and its sole purpose is to engage in public

concession services for highway lot BR-116/BR-376/PR and BR-101/SC,

encompassing the stretch between Curitiba and Florianópolis, object of the

bidding process corresponding to lot 07, in conformity with Bid Notice No.

003/2007, published by the ANTT, for a 25-year period, including public works

such as recovery, maintenance, monitoring, conservation, operation, expansion

and improvements.

Litoral Sul is fully operational since June 17, 2009, date of the beginning of

operation of its last toll plaza on BR-101/km 221 - SC. The concessionaire


concession:

30 kilometers of third lane;








On April 24, 2013, the Company signed an addendum envisaging the extension of

the concession area by 23.64 km and the transfer of the P5 toll plaza from km

220 to km 243, both located in the municipality of Palhoça/SC.

On June 17, 2013, the National Ground Transportation Agency (ANTT) published

Resolution 4,122 of June 12, 2013, which addresses matters related to the

transfer of this toll plaza.

Considering that the delay in obtaining environmental license hindered the

works necessary for the transfer of the toll plaza, the resolution approved the

25

suspension of toll collection during one (1) year, from June 22, 2013 to June 22,

2014, or until the effective transfer to the new location is carried out. On June

20, 2014, such transfer became effective and toll began to be charged.

The suspension of collection at the P5 toll plaza had no significant impact on

the Company’s consolidated revenue (Arteris S.A.), and the other toll plazas of

concessionaire Litoral Sul remained operating normally, without any operational

or tariff changes.

As set out in the concession agreements of these concessionaires, tolls are

adjusted in February for Fluminense and Litoral Sul and in December for

Planalto Sul, Fernão Dias and Régis Bittencourt, based on the variation in IPCA

[Extended National Consumer Price Index].

At the end of the concession periods, all reversible assets, rights and privileges

related to the operation of the highway systems transferred to the

concessionaires or implemented by them will be handed over to the Concession

Authority. The handover will be free of charge and automatic, with the assets in

perfect conditions of operation, use and maintenance, and free from any

encumbrances or charges. The concessionaires will be entitled to compensation

for the unamortized or undepreciated balance of assets whose purchase, duly

authorized by the Concession Authority, has occurred in the last five years of

the concession period, as long as carried out to ensure the continuity and

upgrading of the services included in the concessions.

As the federal models for concession agreements are non-onerous and consider

the lowest toll, the federal concessionaires will not pay to the Concession

Authority any fixed and variable concession fee for the right to operate such

lots.

The main commitments made by the federal concessionaires as a result of the

concession agreements are as follows:

Payment to the ANTT of the inspection fees intended to cover expenses on

inspecting the concession over the entire period. The nominal amounts of

the inspection fees are as follows:

Concessionaire Annual amount

Remaining amount in the

concession period

Planalto Sul 1,846 33,536

Fluminense 2,665 48,414

Fernão Dias 7,916 143,807

Régis Bittencourt 8,436 153,254

Litoral Sul 6,424 116,703

26

27,287 495,714

The annual inspection fees are adjusted based on the same index and at the

same date as the basic toll.

The federal concessionaires must fully assume the risk arising from errors in

the determination of quantitative amounts for performance of projects and

services set out in the Highway Concession Program – PER.

The federal concessionaires fully assume the risk arising from damages to

the highway derived from causes that should be covered by insurance,

pursuant to Chapter III, Title V, of the auction notice.

The federal concessionaires fully assume the risk arising from variations in

the costs of their raw materials, labor and financing.

The federal concessionaires fully assume the risk arising from the

settlement of any environmental liabilities within the highway’s domain

area, the triggering event of which occurs after the date the concession

agreement is signed.

The bylaws of the federal concessionaires provided for the requirement to

go public within two years after the concession agreement beginning date,

set for February 15, 2010. The petition to register the publicly-traded

corporation with the Brazilian Securities and Exchange Commission (CVM)

was granted on March 29, 2010.

The federal concessionaires must annually submit their financial statements

to the ANTT and publish them.

The federal concessionaires estimate the amounts shown below, as at

December 31, 2014 and 2013, to meet the requirements to make

investments and carry out recovery and maintenance work through the end

of the concession agreements. The December 31, 2014 amounts are subject

to changes due to contract adaptations and periodic revisions of cost

estimates over the concession period.

12.31.2014


Nature of costs

Planalto Sul Fluminense

Fernão Dias

Régis Bittencourt Litoral Sul Total

Infrastructure

improvements 438,435 1,165,844 469,491 1,399,384 769,578 4,242,732

Recovery/maintenance work 249,832 372,845 762,749 602,465 541,865 2,529,755

Total 688,267 1,538,689 1,232,240 2,001,849 1,311,442 6,772,487

27

12.31.2013


Nature of costs

Planalto Sul Fluminense

Fernão Dias

Régis Bittencourt Litoral Sul Total

Infrastructure improvements 197,339 522,353 408,175 1,040,178 598,565 2,766,610

Recovery/maintenance work 326,037 399,893 715,231 592,386 619,199 2,652,746

Total 523,376 922,246 1,123,406 1,632,564 1,217,764 5,419,356

Investment estimates were broken down as mentioned in Note 3 “Recognition of

intangible assets.”

The subsidiary concessionaires Regis Bittencourt, Litoral Sul, Fernão Dias and

Fluminense, jointly “Concessionaires”, entered into “Terms of Adjustment of

Conduct (TACs)” with the National Ground Transportation Agency (ANTT), as a result

of administrative proceedings sanctioning possible non-compliances institutes by the

ANTT between the beginning of concessions and September 22, 2014.

As a result of these terms, the concessionaires will invest the equivalent of R$141.3

million in new works not provided for in the concession agreement, involving

improvements, ensuring greater safety and comfort for users, this amount to be

distributed as follows:

Fernão Dias: R$28.2 million, Fluminense: R$31.2 million, Régis Bitencourt: R$29

million and Litoral Sul: R$52.9 million.

The Company is defining with the ANTT the works that will be part of this

agreement and, after this definition, these investments will be assessed based on

independent experts’ report to determine when to recognize the intangible asset

between two groups: (a) investments that generate potential additional revenue;

and (b) investments that do not generate potential additional revenue.

With regard to the subsidiary Planalto Sul, the Company announces that it is still

negotiating to enter into a TAC with ANTT under similar conditions in the coming

months, but it is still presenting justifications and administrative defenses in non-

compliance procedures.

3. BASIS OF PREPARATION

Statement of compliance (in regard to IFRS and CPC standards)

The individual financial statements have been prepared in accordance with the

accounting practices adopted in Brazil, and are identified as Parent Company.

28

The consolidated financial statements have been prepared in accordance with

International Financial Reporting Standards (IFRS) issued by the International

Accounting Standards Board (IASB) and accounting practices adopted in Brazil.

The accounting practices adopted in Brazil comprise those included in the Brazilian

Corporation Law and the technical pronouncements, guidance and interpretations

issued by the Accounting Pronouncements Committee (CPC) and approved by the

Brazilian Securities and Exchange Commission (CVM).

The individual financial statements present the maintenance of the effects of the

amortization of deferred charges existing at the date of transition to IFRSs, in

accordance with accounting practices adopted in Brazil. Therefore, this individual

information is not considered as being in conformity with IFRS, which require the

recognition of deferred charges in profit or loss, as incurred.

Measurement basis

The individual and consolidated financial statements have been prepared on the

historical cost basis, unless otherwise indicated.

Functional and presentation currency

The individual and consolidated financial statements are presented in reais (R$),

which is the Company’s functional currency. All financial statements presented have

been rounded to thousands of reais, unless otherwise indicated.

Use of estimates and judgments

The preparation of financial statements requires Management to make judgments,

estimates and assumptions that affect the application of accounting policies and the

reported amounts of assets, liabilities, revenues and expenses. Actual results may

differ from these estimates.

The information on uncertainties as to assumptions and estimates that have a

significant risk of resulting in a material adjustment within the next year is related

to the following aspects: determination of rates for discount to present value used in

measuring certain short- and long-term assets and liabilities, determination of

amortization rates for intangible assets obtained from traffic projection economic

studies, determination of provisions for maintenance, determination of provisions

for investments arising from concession agreements whose economic benefits are

diluted in toll rates, provisions for tax, civil and labor risks, losses on accounts

receivable, and preparation of projections for test of realization of deferred income

tax and social contribution that, although reflecting the best estimate of the

management of the Company and its subsidiaries, related to the likelihood of future

events, may present variations in relation to actual data and amounts.

29

The estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognized in the year in which the estimate is

revised and in any future years affected.

The information on critical judgments and estimates related to accounting policies

adopted that have effects on the amounts recognized in the individual and

consolidated financial statements is described below:

Accounting for concession agreements

In accounting for concession agreements, as required by the Accounting

Pronouncements Committee’s Technical Interpretation ICPC 01, the Company

performs analyses that involve Management’s judgment, mainly in regard to the

application of the interpretation of concession agreements, determination and

classification of improvement and construction expenditures as intangible assets,

and assessment of future economic benefits for purpose of determining the timing of

recognition of intangible assets generated in concession agreements.

Timing of recognition of intangible assets

The Company’s management assesses the timing of recognition of intangible assets

based on the economic features of the concession agreements, mainly segregating

investments into two groups: (a) investments that generate potential for additional

revenue; and (b) investments that do not generate potential for additional revenue:

(a) Investments that generate potential for additional revenue: are recognized only

when the costs of provision of construction services related to the infrastructure

expansion/improvement are incurred.

(b) Investments that do not generate potential for additional revenue: are estimated

considering the total amounts of concession agreements and carried at present value

at the transition date, as mentioned in Note 16.

Determination of annual amortization of intangible assets arising from concession

agreements

The Company recognizes the effect of the amortization of intangible assets arising

from concession agreements limited to the related concession period. The

calculation is made based on the pattern in which economic benefits are consumed,

which normally occurs according to the traffic demand curve. Therefore, the

amortization rate is determined by means of periodic technical and economic

studies that seek to reflect the projected highway traffic growth and the generation

of future economic benefits arising from the concession agreement.

Determination of construction revenues

30

When the Company contracts construction services, it must recognize construction

revenue realized at fair value and the related costs changed into expenses related to

the construction service contracted. The Company’s management assesses issues

related to the primary responsibility for contracting these services, even in the cases

when services are outsourced and costs are incurred in managing and monitoring the

construction works of Arteris’ subsidiaries. All assumptions described are used for

purposes of determining the fair value of the construction activities.

Provision for maintenance related to concession agreements

The provision for maintenance, repair and replacements in highways is calculated

based on the best estimate of the expenditure required to settle the obligation at

present value at the end of the reporting year, against the expense for maintenance

or restoration of the infrastructure to a specified level of operation. The present

value liability should be progressively recognized and accrued to cover payments to

be made during the execution of the works.

4. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies described below have been consistently applied in these

individual and consolidated financial statements for the year ended December 31,

2014.

The main accounting policies adopted by the Company and its subsidiaries in the

preparation of the financial statements are set out below.

Basis of consolidation

Business combinations

Acquisitions as of January 1, 2009

For the year ended December 31, 2014 there were no transactions qualifying as

business combination.

Acquisitions prior to January 1, 2009

As part of the transition to IFRSs and CPCs, the Company elected not to restate

business combinations prior to January 1, 2009. In regard to acquisitions prior to

January 1, 2009, merged concession represents the amount recognized under

previous accounting policies. This merged concession was allocated as part of the

concession intangible assets and is amortized under the criteria described in Note

4.4.

Consolidation principles

The consolidated financial statements include the balances of the Company and its

subsidiaries in which the Company directly or indirectly controls 100% of the voting

31

shares, described below. Investments in subsidiaries, intercompany balances and

transactions have been eliminated on consolidation.

The list below presents the interests in the subsidiaries included in the

consolidation:

Total/voting capital

Subsidiary 12.31.2014 12.31.2013

Autovias 100% 100%

Centrovias 100% 100%

Intervias 100% 100%

Vianorte 100% 100%

Planalto Sul 100% 100%

Fluminense 100% 100%

Fernão Dias 100% 100%

Régis Bittencourt 100% 100%

Litoral Sul 100% 100%

Paulista Gerenciamento (c) - 100%

Latina Manutenção (a) 100% 100%

Latina Sinalização (b) 100% 100%

(a) Latina Manutenção, established in 2005, has its registered office in the

city of Ribeirão Preto, State of São Paulo, Brazil, located at Anhanguera

Highway, km 312.2, and is engaged in the conservation and operation of

construction, management and maintenance activities in the

highways managed by the Company’s subsidiaries.

(b) Latina Sinalização, established in 2008, has its registered office in the

city of Ribeirão Preto, State of São Paulo, Brazil, located at Anhanguera

Highway, km 312.2, and is engaged in the provision of traffic

signaling installation and maintenance, and related services. Latina

Sinalização started its operations in the first quarter of 2009.

(c) On April 14, 2014, the Company approved the merger of Paulista

Gerenciamento de Rodovias Ltda. (“Paulista”) into Latina Manutenção.

The Company also holds 4.68% of the capital of STP - Serviços e Tecnologia de

Pagamentos S.A., engaged in the development of business related to the

electronic toll collection system at national level, which is carried at cost, as

mentioned in Note 9.

The operations of each of the highway concessionaires, main commitments

and other information are disclosed in Note 2.

4.1. Financial assets

32

Financial assets are classified into the following specified categories: assets at

fair value through profit or loss, held-to-maturity investments, available-for-

sale financial assets, and loans and receivables. The classification depends on

the nature and purpose of the financial assets and is determined at the time of

initial recognition.

The Company recognizes financial assets classified in the category “loans and

receivables”, as described below:

Loans and receivables

This classification includes non-derivative financial assets with fixed or

determinable payments that are not quoted in an active market. They are

recognized in current assets, except for maturities greater than 12 months

after the end of the reporting period, which are classified as non-current

assets.

The financial assets of the Company and its subsidiaries comprise cash and

cash equivalents (Note 5), trade receivables (Note 6), escrow deposits and

other receivables, and the main criteria adopted are as follows:

a) Cash and cash equivalents

Comprise basically cash on hand and in banks and other highly liquid short-

term investments, readily convertible to a known amount of cash and

subject to an insignificant risk of changes in value, and expected to be

used in a period shorter than 90 days.

b) Short-term investments

Basically represented by Bank Certificate of Deposit, debentures and

quotas from investment funds, with maturity greater than 90 days, and

are classified as restricted to financing with future maturity or

Management's intention of making investments. Financial assets are

classified into a specific category as financial assets at amortized cost.

The classification depends on the nature and purpose of the financial

assets and is determined at the time of initial recognition. All regular way

purchases or sales of financial assets are recognized and derecognized on

a trade date basis.

c) Trade receivables

Stated at their realizable amounts at the end of the reporting period,

recognized based on their original invoice amounts and not discounted to

present value due to their short-term maturities and immaterial effect on

33

the financial statements. The allowance for doubtful debts is recognized,

when necessary, based on estimated losses.

4.2. Property and equipment

Stated at cost of acquisition and/or construction, plus interest capitalized

during the construction period, when applicable, for qualifying assets.

Depreciation is calculated using the straight-line method, at the rates stated

in note 10, limited, when applicable, to the concession period.

4.3. Deferred charges

Technical Pronouncement CPC 43 (R1) – First-time adoption of technical

pronouncements CPC 15 to CPC 41, determines that the maintenance of the

balance of deferred charges applies only to individual financial statements

prepared in accordance with accounting practices adopted in Brazil.

Therefore, these balances were eliminated in the consolidated financial

statements to align them to the international standards (IFRS).

4.4 Intangible assets

Intangible asset arising from concession agreements

The Company recognized an intangible asset related to the right to charge for

the use of the state concession infrastructure, measured at fair value on initial

recognition. Subsequent to initial recognition, the intangible asset is measured

at cost, which includes borrowing costs capitalized, less accumulated

amortization and impairment losses.

The amortization of these intangible assets is recognized in profit or loss based

on the traffic demand curve projection, estimated for the concession period,

from the date when these assets are available for use, which is the method

that better reflects the pattern in which future economic benefits from the

asset are consumed.

Goodwill that has been allocated to concession rights, as well as those that

have not been directly allocated to the concession, or other assets and

liabilities that have the economic benefit limited in time (defined term), in

view of concession right with finite useful life, is included in intangible assets

in the consolidated financial statements and is amortized under the same

criteria described in the previous paragraph.

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are

carried at cost less accumulated amortization and accumulated impairment

34

losses. Amortization is recognized in profit or loss mainly based on the traffic

demand curve projection, estimated for the concession period, from the date

when these assets are available for use, which is the method that better

reflects the consumption pattern of future economic benefits incorporated

into the asset.

4.5. Impairment of tangible and intangible assets with finite useful lives

At the end of each reporting period, the Company and its subsidiaries review

the carrying amount of their tangible and intangible assets to determine

whether there is any indication that those assets have suffered an impairment

loss. If any such indication exists, the recoverable amount of the asset is

estimated in order to determine the extent of the impairment loss, if any. As

these assets refer basically to concessions, the Company does not estimate the

recoverable amount of an asset individually, but the recoverable amount of its

assets as a whole based on their value in use.

In assessing value in use, the estimated future cash flows are discounted to

their present value using a pre-tax discount rate that reflects current market

assessments of the time value of money and the risks specific to the asset for

which the estimates of future cash flow estimates have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to

be less than its carrying amount, the carrying amount of the asset is reduced

to its recoverable amount. An impairment loss is recognized immediately in

profit or loss.

4.6 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or

production of qualifying assets, which are assets that necessarily take a

substantial period of time to get ready for their intended use, are added to

the cost of those assets, until such time as the assets are substantially ready

for their intended use.

Investment income earned on the temporary investment of specific borrowings

pending their expenditure on qualifying assets is deducted from the borrowing

costs eligible for capitalization.

All other borrowing costs are recognized as a reduction and amortized for the

term of the agreements.

4.7 Financial liabilities

a) Classified as debt or equity

35

Debt and equity instruments are classified as either financial liabilities or

as equity in accordance with the substance of the contractual

arrangements.

b) Borrowings and financing

At the contracting date, they are carried at fair value, less transaction

costs incurred, and are subsequent measured at amortized cost using the

effective interest method.

c) Concession fees

Correspond to fixed installments to be paid to the Concession Authority,

discounted to present value at the rate of 5% per year, as described in

Note 15.

Subsidiaries Autovias, Centrovias, Intervias and Vianorte discount to

present value the balance in line item “Concession fees”, recognized in

current and non-current liabilities, based on the average rates of finance

charges contracted at the time the transactions were originated.

The balancing item of discount to present value is “Intangible assets”,

where the concession right is recognized. The discount to present value is

reversed as a balancing item of line item “Finance costs” over the

concession period.

d) Obligation from the exploration rights

It corresponds to obligations arising from the right of use and exploration

of the granite and gneiss mine in accordance with the exploration

agreement. These obligations primarily refer to fixed installments in

accordance with the original contractual value, adjusted to present value,

as from the beginning of the exploration agreement at the rate of 5% per

year plus adjustment to inflation and interests until the date of the

balance sheets. The rate used for calculation of the discount to present

value was defined by the Management based on the average interest rates

from third-party funding on that date. The counterparty of discount to

present value was recorded under “Exploration rights” (intangible). The

reversal of discount to present value has as counterparty the “Financial

expenses” line, when the term is elapsed.

4.8 Income tax and social contribution – current and deferred

Income tax and social contribution are calculated in accordance with the

criteria established by prevailing tax legislation.

36

Current taxes

The tax currently payable is based on taxable profit for the year. Taxable

profit differs from profit as reported in the income statement because of

items of income or expense that are taxable or deductible in other years and

items that are never taxable or deductible. The liability for current tax is

calculated individually for each company based on rates in effect at the end of

the reporting period.

Deferred taxes

Deferred income tax and social contribution assets are recognized for tax loss

carryforwards and temporary differences between the carrying amounts of

assets and liabilities and the corresponding tax bases, when applicable,

considering a 25% rate for income tax and a 9% rate for social contribution.

Deferred income tax and social contribution liabilities are recognized based on

discounts to present value arising from concession fees, and from adjustments

related to changes in accounting policies, as mentioned in Note 7.

4.9 Leases

Leases carried out by the Company as lessee, in which a significant part of the

ownership risks and rewards is retained by the lessor are classified as

operating leases. Operating lease payments (net of any incentive from the

lessor) are recognized in the income statement on a straight-line basis over

the lease term.

Leases in which the Company and its subsidiaries retain substantially all risks

and rewards of ownership are classified as finance leases. Finance leases are

capitalized in the balance sheet at the inception of the lease at the lower of

the fair value of the leased asset and the present value of the minimum lease

payments.

Each lease payment is allocated between the liability and finance charges so

as to achieve a constant rate of interest on the remaining balance of the

liability. The related obligations, less finance charges, are classified in current

and non-current liabilities over the agreement terms. Property and equipment

items acquired under finance leases are depreciated over their economic

useful lives or over the lease agreement terms, when these are shorter.

4.10 Provisions

Provisions are recognized when the Company has a present obligation (legal or

constructive) as a result of a past event, it is probable that the Company will

37

be required to settle the obligation, and a reliable estimate can be made of

the amount of the obligation.

The provisions for lawsuits are recognized when the Company has a present or

constructive obligation as a result of a past event, it is probable that an

outflow of resources will be required to settle the obligation, and a reliable

estimate of the obligation can be made. They are adjusted through the end of

the reporting period for estimated probable losses, considering their nature

and supported by the opinion of the legal counsel of the Company and its

subsidiaries. The bases and nature of the provisions for civil, labor and tax

risks are described in Note 16.

4.11 Liabilities discounted to present value

For certain liabilities, Management assesses and recognizes the effects of

discount to present value taking the time value of money and the

uncertainties associated thereto into consideration. The liabilities subject to

discount to present value, as well as the main assumptions used by

Management for their measurement and recognition are as follows:

Provision for investments in highways: arising from estimated expenditures

to fulfill contractual obligations of the concessions whose economic

benefits are already being flown to the Company and, therefore,

recognized against the concession intangible asset. The measurement of

the related present values was made under the discounted cash flow

method, considering the dates of the estimated outflow of resources to

settle the obligations (estimated for the whole concession period) and

discounted using the rate of 6.35% p.a. at December 31, 2014 and

2013. Management reviews the discount rate periodically. The

determination of the discount rate used by Management is based on the

free-risk interest rate since the projected flows of obligations were

based on their nominal amounts at December 31, 2014 and 2013 and do

not consider additional cash flow risks.

Provision for maintenance in highways: arising from estimated

expenditures to fulfill contractual obligations of the concession related to

the use and maintenance of highways at pre-established levels of

utilization. The measurement of the related present values was made

under the discounted cash flow method, considering the dates of the

estimated outflow of resources to settle the obligations and discounted

using the rate of 6.35% p.a. at December 31, 2014 and 2013.

Management reviews the discount rate periodically. The determination of

the discount rate used by Management is based on the free-risk interest

rate since the projected flows of obligations were based on their nominal

38

amounts at December 31, 2014 and 2013 and do not consider additional

cash flow risks.

Concession fees: arising from obligations incurred by the Company related

to concession rights. The measurement of the related present values was

made under the discounted cash flow method, considering the dates of

the estimated outflow of resources to settle the obligations and

discounted using the rate of 5% p.a. The determination of the discount

rate used by Management is based on the free-risk interest rate, and

should be consistently adopted from the initial recognition through the

realization of the obligations.

The nominal balances and the present value of current and non-current liabilities, at the

end of the reporting period, are as follows:

Current 12.31.2014 12.31.2013

Provision for investments in highways - nominal 100,002 70,738

Provision for investments in highways at present value 98,280 68,489

Effect of discount to present value 1,722 2,249

Provision for maintenance in highways - nominal 99,089 72,784

Provision for maintenance in highways at present value 95,258 71,043


Concession fees - nominal (*) 76,389 72,229

Concession fees at present value (*) 74,452 70,299


Non-current

Provision for investments in highways - nominal 30,220 51,062

Provision for investments in highways at present value 26,120 43,151


Provision for maintenance in highways - nominal 526,111 480,635

Provision for maintenance in highways at present value 443,244 401,395


Concession fees - nominal (*) 182,525 248,025

Concession fees at present value (*) 163,048 216,540


(*) Includes the variable portion, as mentioned in Note 15.

39

The recompilation of balances to their nominal amounts at the reporting date

due to passage of time is recognized as finance costs in the income statement.

4.12 Revenue recognition

Construction contracts qualified and classified as construction services

Revenue related to construction or improvement services established in the

concession contracts is recognized in accordance with the stage of conclusion

of the works performed. Revenue from operations or services is recognized in

the fiscal year in which the services are rendered.

Revenues from collection of tolls or tariffs resulting from concession rights

These revenues are measured by fair value of the consideration received or to

be received, discounted of any estimated deductions. The revenue is

recognized in the fiscal year when the public assets, which are object of the

concession, are utilized by users.

4.13 Financial revenues and expenses

They are substantially represented by interest and inflation adjustment

resulting from financial investments, escrow deposits, borrowings and

financing, debentures and liabilities with creditors due to the concession and

effect of discount to present value.

4.14 Dividends and interest on equity

The proposal for payment of dividends made by the Company’s Management,

which is included in the installment equivalent to the minimum mandatory

dividends, is recorded as liabilities under the “Proposed dividends” line

because it is considered a legal obligation envisaged in the Company’s Bylaws,

as disclosed in Note 17.

4.15 Statements of Value Added

Its aim is to show all wealth created and distributed by the Company in a given

fiscal year, being presented in compliance with the Brazilian Corporation Law,

as part of its financial statements, not being mandatory in accordance with

IFRS.

The Statement of Value Added was prepared based on the accounting

information that serves as basis to the preparation of the financial statements,

observing the provisions set forth in Technical Pronouncement CPC 09 –

Statement of Value Added. In its first part, the statement shows the wealth

40

created by the Company, represented by revenues (gross revenue from sales,

including taxes, other revenues and the effects of provision for doubtful

accounts), raw materials acquired from third parties (costs from sales and

acquisitions of materials, energy and services from third parties, including

taxes levied at the moment of acquisition, the effects of loss and recovery of

assets, and depreciation and amortization) and by the value added received

from third parties (equity accounting, financial revenues, and other revenues).

The second part of the statement shows the distribution of this wealth among

personnel, taxes and contributions, third-party capital remuneration and own

capital remuneration.

4.16 New and revised standards and interpretations of standards issued but not yet

adopted

The following accounting pronouncements and interpretations issued by the

International Accounting Standards Board (IASB) and International Financial

Reporting Standards Interpretations Committee (IFRIC) have been published or

revised, but their adoption is not yet mandatory and they have not been

subject to regulation by the Accounting Pronouncements Committee (CPC)

and, accordingly, they have not been early adopted by the Company and its

investees in their financial statements for the year ended December 31, 2014.

They will be adopted as their adoption becomes mandatory. The Company has

not yet estimated the extension of possible impacts from these new

pronouncements and interpretations on its financial statements.

Pronouncement Description Effectiveness

Amendments to IFRS 11 – Accounting for

acquisitions of interest in a joint venture

It provides guidelines on how to account for the

acquisition of interest in a joint venture whose

activities represent a business under IFRS 3 – Business

Combinations.

(1)

Amendments to IAS 16 and IAS 38 –

Clarification on the acceptable depreciation

and amortization methods

The amendments to IAS 16 forbid entities to adopt a

depreciation method based on revenue for property

and equipment items. The amendments to IAS 38

introduce a refutable assumption that revenues do

not establish an appropriate basis for the purposes of

amortization of an intangible asset.

(1)

IFRS 15 – Revenue from contracts with

customers

It establishes a single comprehensive model to be

adopted by entities when accounting for revenues

from contracts with customers.

(2)

IFRS 9 – Financial instruments

Revision in 2014 contains requirements to: a) classify

and measure financial assets and liabilities; b)

impairment methodology; c) general hedge

accounting.

(3)

(1) Annual periods beginning on or after January 1, 2016;



The amendments to the IFRS mentioned above have not been issued by the

CPC yet. However, due to CPC’s and the Federal Accounting Council (CFC)’s

41

commitment to update the set of standards issued based on the updates and

amendments by the IASB, these amendments and changes are expected to be

issued by the CPC and approved by CFC until the date of their mandatory

adoption. The Company’s Management does not expect these amendments to

affect the financial statements. There are no other standards or

interpretations issued and not yet adopted that may, in the Management’s

opinion, have a significant impact on the profit or equity reported by the

Company.

5. CASH AND CASH EQUIVALENTS

Broken down as follows:


12.31.2014 12.31.2013 12.31.2014 12.31.2013

Cash and banks 83 1,138 17,928 18,417

Short-term investments(*) 109,433 184,304 1,392,523 911,494

Total 109,516 185,442 1,410,451 929,911

(*) Represented by highly liquid short-term investments, with insignificant risk of change in value and maturity of less than 90 days from the acquisition date, as follows:


12.31.2014 12.31.2013 12.31.2014 12.31.2013

Bank Certificates of Deposit (CDB) - - 12,890 8,191

Debentures under repurchase agreements - - 129,714 35,524

Investment funds 109,433 184,304 1,249,919 867,779

Total 109,433 184,304 1,392,523 911,494

Short-term investments yielded on average 100.42% of the interbank deposit certificate (CDI) in the year.

6. TRADE RECEIVABLES


Consolidated

12.31.2014 12.31.2013

Electronic toll(*) 137,923 119,714

Toll tickets 4,302 4,893

Toll cards 937 880

Supplementary revenues 10,900 1,222

154,062 126,709

(*) According to Note 24c.

42

The Management of the Company and its subsidiaries did not identify the need to recognize a provision for loss on receivables as at December 31, 2014. The average maturity is 30 days.

7. DEFERRED INCOME TAX AND SOCIAL CONTRIBUTION


Consolidated Non-current assets 12.31.2014 12.31.2013 Bases of deferred asset:

Tax loss (a) 91,692 36,787 Accrued profit sharing 13,632 11,248 Civil, labor and tax risks (b) 11,233 9,588 Merged concession (c) (19,152) (20,916) Goodwill from SPR (d) 5,078 11,849 Provision for maintenance (adoption of Law 12,973) 58,495 - Adjustment in financial charges (adoption of Law 12,973) 144 - Adjustments related to changes in accounting policies (e) Provision for maintenance 355,554 329,469 Differences in intangible assets, deferred charges and property and equipment, net. 5,572 116,215 Adjustment in financial charges 18,066 11,425 Reversal of interest capitalization 653 536 Taxable base 540,901 506,201 Combined statutory rate 34% 34% Total deferred income tax and social contribution 183,906 172,108

Consolidated Non-current liabilities 12.31.2014 12.31.2013 Bases of deferred liability:

Tax loss (a) (83,773) (9,678) Accrued profit sharing (4,839) (4,402) Civil, labor and tax risks (b) (3,965) (1,985) Adjustments related to changes in accounting policies (e) Provision for maintenance (124,453) (99,276) Differences of intangible assets, deferred charges and property and equipment, net. 487,601 354,111 Adjustment in financial charges (4,282) (13,897) Reversal of interest capitalization (719) (384) Taxable base 265,570 224,489 Combined statutory rate 34% 34% Total deferred income tax and social contribution 90,294 76,326

(a) Refers to income tax and social contribution losses, supported by future

taxable income projections.

(b) Refer to provisions for civil, labor and tax risks related to unresolved claims.

(c) Credit arising from the amortization of the merged concession, recorded up

to the base date of the spin-off of OHL do Brasil Participações em

Infraestrutura Ltda. in June 2006 and, until then, controlled in “part B” of

43

that company's taxable income book (LALUR). With the merger of the interest

of OHL do Brasil Participações em Infraestrutura Ltda., the Company

recognized this credit that, pursuant to tax legislation, is amortized at the

rate of 20% per annum, for tax purposes, and for the term of the concession, for

accounting purposes.

(d) Credit arising from the merger of SPR - Sociedade para Participações em

Rodovias S.A., former parent company of Vianorte, recognized on the portion of

the goodwill amortized by SPR from December 2006 to September 2010. The

Company recognized this credit that, according to the tax law, was amortized

at the rate of 20% per annum, for tax purposes, and for the term of the

concession, for accounting purposes.

(e) Adjustments arising from the first-time adoption of the changes in accounting

practices adopted in Brazil and the international financial reporting

standards.

The Company has tax credits that are not being recognized given that it is a holding

company that does not record taxable result.

The future business forecasts of the Company and its subsidiaries and their income

projections are prepared by their Management. Therefore, they are dependent upon

market variables and are subject to changes.

The expectation of recovery of all credits and the actual payment of deferred tax

debits, indicated by taxable income projections, are as follows:

Year ended on:

Non-current assets

2015 8,595

2016 50,103

2017 47,662

2018 30,335

2019 20,099

After 2020 27,112

183,906

Non-current liabilities

2015 307

2016 3,757

2017 3,914

2018 4,079

2019 13,843

After 2020 64,394

90,294

44

8. RESTRICTED INVESTMENTS

The Company’s subsidiaries hold restricted investments in order to fulfill contractual

obligations related to borrowings and financing. A brief description of these

obligations is provided below:

Debentures - Sinking Fund

As guarantee of the strict and full compliance with the obligations assumed, the

Company’s subsidiaries have been withholding/depositing on a daily basis part of

their receivables to repay the principal and pay the annual interest of series 2

debentures, so that at the end of each interest and principal amortization period

the payment amount is already available. These funds are kept in an investment

fund specifically established for this purpose. As at December 31, 2014, these

investments yielded on average 96.20% of the CDI variation.

BNDES

The federal concessionaires must deposit, in a payment account with a financial

institution, part of the operating revenues, between 43% and 58% of the collection

of tool plazas. These funds are used for payment of the debt service and

maintenance of the mandatory minimum amount of the reserve account. After the

legal fulfillment of the contractual obligations, the excess funds are transferred to a

free current account.

The Company’s federal subsidiaries must maintain deposited in a reserve account

with a financial institution, until the final settlement of all obligations assumed in

the financing agreement with the BNDES, a minimum amount equivalent to three

times the amount of the last overdue debt service installment, including the

payments of principal, interest and other debt charges arising from the financing

agreement. This amount will always be recalculated on the day subsequent to each

payment of the monthly installments. As at December 31, 2014, these investments

yielded on average 98.90% of the CDI variation.

The amounts of these investments are as follow:

Consolidated 12.31.2014 12.31.2013 Current Non-current Current Non-current

Debentures 174,377 55 47,383 -

BNDES - 84,805 - 63,604

174,377 84,860 47,383 63,604

45

9. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES

Investments in subsidiaries are as follows:

12.31.2014

Common shares

Equity interest (%)

Equity Total assets Total

liabilities Net revenue Profit / (loss)

Autovias 125,040,451 100% 190,949 842,537 651,588 373,161 99,861

Centrovias 101,483,834 100% 147,612 855,392 707,780 347,702 120,223

Intervias 4,352,285 100% 198,975 1,353,720 1,154,745 401,525 142,876

Vianorte 1,132,038 100% 170,760 684,850 514,090 319,473 96,075

Planalto Sul 242,629,494 100% 228,386 812,520 584,134 302,810 (8,150)

Fluminense 160,011,942 100% 285,494 1,250,036 964,542 483,753 11,221

Fernão Dias 340,732,128 100% 315,293 1,617,465 1,302,172 486,973 (15,472)

Régis Bittencourt 209,396,514 100% 519,179 1,774,947 1,255,768 681,165 17,953

Litoral Sul 252,630,712 100% 341,759 1,452,849 1,111,090 605,919 (216)

Paulista (*) 500,000 100% - - - - (42)

Latina Manutenção (*) 2,113,205 100% 43,501 115,603 72,102 453,444 (801)

Latina Sinalização (*) 250,000 100% 15,084 18,529 3,445 34,918 3,690

(*) Shares.

46

12.31.2013

Common shares

Equity interest (%)

Equity Total assets

Total liabilities

Net revenue

Profit / (loss)

Autovias 125,040,451 100% 188,769 797,907 609,138 334,581 92,099

Centrovias 101,483,834 100% 147,038 533,159 386,121 323,841 112,163

Intervias 4,352,285 100% 200,863 948,406 747,543 356,157 138,783

Vianorte 1,132,038 100% 155,386 590,051 434,665 293,167 67,381

Planalto Sul 159,417,665 100% 156,536 631,060 474,524 218,081 (6,446)

Fluminense 105,745,395 100% 182,723 823,129 640,406 414,839 17,749

Fernão Dias 298,681,400 100% 290,765 1,289,290 998,525 480,470 (6,174)

Régis Bittencourt 138,326,717 100% 343,814 1,333,606 989,792 499,596 32,317

Litoral Sul 190,854,749 100% 259,232 1,067,530 808,298 458,105 11,547

Paulista (*) 500,000 100% 1,905 8,940 7,035 - (132)

Latina Manutenção (*) 250,000 100% 42,439 119,157 76,718 474,571 2,374

Latina Sinalização (*) 250,000 100% 18,394 21,974 3,580 43,704 4,495

(*) Shares.

Changes in investments for the year ended December 31, 2014 are as follows:

Balance at

12.31.2013

Merger of

Paulista by

Latina

Manutenção Capital

contribution

Interest on capital/

dividends

Equity in the earnings

(losses) of subsidiaries for

the year

Balance at

12.31.2014

Autovias 188,769 - - (97,681) 99,861 190,949

Centrovias 147,038 - 4,980 (124,629) 120,223 147,612

Intervias 200,863 - - (144,764) 142,876 198,975

Vianorte 155,386 - - (80,701) 96,075 170,760

Planalto Sul 156,536 - 80,000 - (8,150) 228,386

Fluminense 182,723 - 94,215 (2,665) 11,221 285,494

Fernão Dias 290,765 - 40,000 - (15,472) 315,293

Régis Bittencourt 343,814 - 161,676 (4,264) 17,953 519,179

Litoral Sul 259,232 - 82,743 - (216) 341,759

Paulista 1,905 (1,863) - - (42) -

Latina Manutenção 42,440 1,863 - - (801) 43,501

Latina Sinalização 18,394 - - (7,000) 3,690 15,084

Serviço e Tecnologia de Pagamentos S.A. 1,034 - - - - 1,034

Other investments 19 - - - - 19

Total 1,988,918 - 463,614 (461,704) 467,218 2,458,045

On April 14, 2014, the merger of Paulista Gerenciamento de Rodovias Ltda.

("Paulista") into Latina Manutenção de Rodovias Ltda. ("Latina Manutenção"), both of

them controlled by Arteris, was approved. The merger of Paulista into Latina

Manutenção is part of the Group’s corporate restructuring, which aims to improve

the organization of activities, increae economic efficiency and synergy gain, reduce

operating and financial costs and simplify the corporate structure.

47

Changes in investments for the year ended December 31, 2013 are as follows:

Balance at 12.31.2012

Capital contribution

Interest on capital/

dividends

Equity in the earnings of

subsidiaries for the year

Balance at 12.31.2013

Autovias 173,743 - (77,073) 92,099 188,769

Centrovias 120,476 2,121 (87,722) 112,163 147,038

Intervias 190,702 - (128,622) 138,783 200,863

Vianorte 123,902 - (35,897) 67,381 155,386

Planalto Sul 162,982 - - (6,446) 156,536

Fluminense 119,083 50,106 (4,215) 17,749 182,723

Fernão Dias 256,939 40,000 - (6,174) 290,765

Régis Bittencourt 257,830 61,342 (7,675) 32,317 343,814

Litoral Sul 247,035 3,391 (2,741) 11,547 259,232

Paulista 2,037 - - (132) 1,905

Latina Manutenção 40,066 - - 2,374 42,440

Latina Sinalização 13,899 - - 4,495 18,394

Serviço e Tecnologia de Pagamentos S.A. 1,034 - - - 1,034

Other investments 19 - - - 19

Total 1,709,747 156,960 (343,945) 466,156 1,988,918

10. PROPERTY AND EQUIPMENT

Changes in property and equipment are as follows:

Parent Company

Cost of property and equipment,

gross

Furniture,

fixtures and

facilities

Facilities,

buildings and

premises

Leasehold

improvements

Other

property and

equipment Land Total

Balance at 12.31.2012 2,589 2,782 2,203 2,282 586 10,442

Additions 61 - 512 133 - 706

Disposals/write-offs - - (4) (106) - (110)

Balance at 12.31.2013 2,650 2,782 2,711 2,309 586 11,038

Additions 725 - 4,086 935 - 5,746

Disposals/write-offs - (2,223) (196) - (2,419)

Balance at 12.31.2014 3,375 2,782 4,574 3,048 586 14,365

Accumulated depreciation

Balance at 12.31.2012 (1,707) (952) (1,842) (452) - (4,953)

Depreciation/amortization (425) (112) (336) (177) - (1,050)

Disposals/write-offs - - - 60 - 60

Balance at 12.31.2013 (2,132) (1,064) (2,178) (569) - (5,943)

Depreciation/amortization (289) (111) (752) (420) (1,572)

Transfers/reclassifications 793 (793)

Disposals/write-offs - - 2,139 184 2,323

Balance at 12.31.2014 (1,628) (1,175) (791) (1,598) (5,192)

Property and equipment, net

Balance at 12.31.2013 518 1,718 533 1,740 586 5,095

Balance at 12.31.2014 1,747 1,607 3,783 1,450 586 9,173

Depreciation rates - % 10 4 55.5 10 0

48

Consolidated

Cost of property and equipment, gross

Furniture, fixtures and

facilities

Computers and

peripherals Vehicles

Facilities, buildings and

premises Land Machinery and

equipment

Other property and

equipment

Property and equipment in

progress Total

Balance at 12.31.2012 15,256 6,588 17,617 12,593 586 26,279 2,402 234 81,555

Additions 1,900 665 210 6,852 - 1,011 151 361 11,150

Transfer/reclassification 9 (166) - 1 - 9 - (265) (412)

Disposals/write-offs (380) (68) (1,492) (73) - (934) (138) (31) (3,116)

Balance at 12.31.2013 16,785 7,019 16,335 19,373 586 26,365 2,415 299 89,177

Additions 2,662 1,722 4,772 4,965 - 5,231 973 15,855 36,180

Transfer/reclassification 443 (118) 1,403 (8,135) - 3,255 (4,921) (8,073)

Disposals/write-offs (310) (449) (74) (2,235) - (3,320) (223) (8) (6,619)

Balance at 12.31.2014 19,580 8,174 22,436 13,968 586 31,531 3,165 11,225 110,665

Accumulated depreciation

Balance at 12.31.2012 (8,120) (4,392) (8,409) (4,109) - (8,830) (487) - (34,347)

Depreciations/amortizations (1,799) (860) (3,091) (1,420) - (3,098) (190) - (10,458)

Transfer/reclassification (5) 21 - 1 - (17) - - -

Disposals/write-offs 266 129 1,244 20 - 274 72 - 2,005

Balance at 12.31.2013 (9,658) (5,102) (10,256) (5,508) - (11,671) (605) - (42,800)

Depreciations/amortizations (1,750) (1,364) (2,720) (1,462) (3,069) (432) - (10,797)

Transfer/reclassification 555 562 (13) 727 - 328 (793) - 1,366

Disposals/write-offs 106 71 27 2,139 - 523 186 - 3,052

Balance at 12.31.2014 (10,747) (5,833) (12,962) (4,104) - (13,889) (1,644) - (49,179)

Property and equipment, net

Balance at 12.31.2013 7,127 1,917 6,079 13,865 586 14,694 1,810 299 46,377

Balance at 12.31.2014 8,833 2,341 9,474 9,864 586 17,642 1,521 11,225 61,486

Depreciation rates - % 9 20 20 13 - 12 16.67 - -

49

11. INTANGIBLE ASSETS

Changes in intangible assets are as follows:

Parent Company

Cost of intangible asset: Software

Balance at 12.31.2012 1,217 Additions 352 Disposals/write-offs (104) Balance at 12.31.2013 1,465 Additions (*) 8,962 Balance at 12.31.2011 10,427

Accumulated amortization:

Balance at 12.31.2012 (612) Amortization (219) Disposals/write-offs 25 Balance at 12.31.2013 (806) Amortization (230) Balance at 12.31.2014 (1,036) Intangible assets, net:

Balance at 12.31.2013 659

Balance at 12.31.2014 9,391 Amortization rates - % 20%

(*) Projects development

50

Consolidated

Cost of intangible assets

Intangible assets in

highways – works and

services (a) Concession

(b) Merged

concession (c ) Software Operation right

(d)

Intangible assets in progress

Advances to suppliers Total

Balance at 12.31.2012 5,256,056 351,939 144,380 17,120 9,997 861,806 4,633 6,645,931

Additions 389,205 - - 3,340 - 892,436 (2) 1,284,979

Transfer/reclassification 580,677 - - 181 - (580,259) (946) (347)

Disposals/write-offs (1,507) - - (366) - - (233) (2,106)

Balance at 12.31.2013 6,224,431 351,939 144,380 20,275 9,997 1,173,983 3,452 7,928,457

Additions 506,527 - - 12,252 - 1,312,593 12,180 1,843,552

Transfer/reclassification 664,225 - - 40 - (642,539) (13,653) 8,073

Disposals/write-offs (974) - - (248) - (23,157) (312) (24,691)

Balance at 12.31.2014 7,394,209 351,939 144,380 32,319 9,997 1,820,880 1,667 9,755,391

Accumulated amortization

Balance at 12.31.2012 (1,480,027) (192,785) (67,233) (9,583) (1,645) - - (1,751,273)

Amortization (235,637) (26,864) (9,155) (2,217) (1,414) - - (275,287)

Transfer/reclassification 725 - - (1) - - - 724

Disposals/write-offs 717 - - 131 - - - 848

Balance at 12.31.2013 (1,714,222) (219,649) (76,388) (11,670) (3,059) - - (2,024,988)

Amortization (292,225) (28,034) (9,918) (2,141) (1,574) (333,892)

Transfer/reclassification (1,378) - - 12 - - - (1,366)

Disposals/write-offs 491 - - (7) - - - 484

Balance at 12.31.2014 (2,007,334) (247,683) (86,306) (13,806) (4,633) - - (2,359,762)

Intangible assets, net

Balance at 12.31.2013 4,510,209 132,290 67,992 8,605 6,938 1,173,983 3,452 5,903,469

Balance at 12.31.2014 5,386,875 104,256 58,074 18,513 5,364 1,820,880 1,667 7,395,629

51

(a) Refer to projects and services carried out on the highway, such as paving,

duplication, side roads, shoulders, work yards, special works of art, ground

leveling, implementing a system for collecting tolls and monitoring traffic,

signaling and other such services, amortized based on the traffic curves

projected until the final terms of the concessions.

(b) Refers to the amount assumed for the operation of the highway system

discounted to present value. See Note 15.

(c) Refers to the merged concession resulting from the merger of the spun-off

portion, in June 2006, of OHL Participações, former parent company of Autovias

and Centrovias. This amount is being amortized based on the traffic curve

projected until the final term of the concession.

(d) Refers to the amount assumed for using granite and gneiss rocks in

infrastructure work in projects for the companies belonging to the Arteris Group

and installation and safeguarding of equipment to perform the work.

12. BORROWINGS AND FINANCING


Consolidated Annual charges 12.31.2014 12.31.2013 Current liabilities:

Investment financing (BNDES) (a) TJLP + 2.3% to 2.58% p.a. 187,180 134,103

Investment financing (BNDES) - automatic (a) TJLP + 3.3% to 5.3% p.a. - 2,463

Equipment financing - State (FINAME) (b) TJLP + 3.3% to 7.93% p.a. - 29

Equipment financing - Federal (FINAME) (b) TJLP + 2.6% p.a. 287 344

Equipment financing – Construction companies (FINAME) (b) TJLP + 4.5% p.a. 3,119 3,569

Leasing (c) CDI + 1.23% p.a. to 3.7%

p.a. 1,383 2,439

Working capital (Construction companies) 112.5% CDI 6,007 -

Vehicle financing (d) 16.63% p.a. fixed rate 889 42

198,865 142,989

Consolidated Annual charges 12.31.2014 12.31.2013

Non-current liabilities :

Investment financing (BNDES) (a) TJLP + 2.3% to 2.58% p.a. 2,703,497 2,143,257

Investment financing (BNDES) - automatic (a) TJLP + 3.3% to 5.3% p.a. - 1,013

Equipment financing - State (FINAME) (b) TJLP + 3.3% to 7.93% p.a. - 92

Equipment financing - Federal (FINAME) (b) TJLP + 2.6% p.a. 818 50

Equipment financing – Construction companies (FINAME) (b) TJLP + 4.5% p.a. 139 3,232

Leasing (c) CDI + 1.23% p.a. to 3.7%

p.a. 170 1,346

Working capital (Construction companies) 9,855 -

Vehicle financing (d) 16.63% p.a. fixed rate 2,318 -

2,716,797 2,148,990

52

2,915,662 2,291,979

TJLP – Long-Term Interest Rate.

(a) Credit facility opening agreement entered into with the Brazilian Economic and

Social Development Bank (BNDES) to finance the recovery, improvement,

maintenance, conservation, expansion, and operation works and services in the

highways.

(b) Financing of equipment, guaranteed by the financed assets, collateral signature

of shareholders or promissory notes.

(c) Finance lease agreements signed with financial institutions for acquisition of

vehicles, information technology equipment and other equipment. The

guarantees are the financed assets.

(d) Bank credit notes contracted from Banco Volkswagen for purchase of vehicles for

administrative use, with repayment term of 36 months as from the transaction

formalization date, guaranteed by the financed assets.

As at December 31, 2014, the maturities of the borrowings and financing are as

follows:

Maturity year

2016 214,740

2017 240,919

2018 252,393

2019 638,818

After 2020 1,369,927

2,716,797

The long-term financing agreements with the BNDES have covenants that, if not

complied with, can accelerate their maturity. The main covenants are:

a) Comply with environmental regulations during the effective period of the

financing agreements.

b) Not suffer any penalty for nonperformance of the concession agreements, with

final administrative decision, corresponding to infringements related to

insurance or provision of guarantees determined by the National Ground

Transportation Agency (ANTT).

c) Present semiannually, to the BNDES, until the final settlement of the

agreements, balance sheets audited by an independent audit firm registered

with the Brazilian Securities Commission.

d) Except upon the express consent of the BNDES, not distribute dividends above

the mandatory minimum dividend nor pay interest on capital that is not

53

attributable to the mandatory minimum dividend until the completion of the

financed projects.

e) Not distribute dividends above the minimum mandatory amount, payment of

interest on equity not imputed to the minimum mandatory dividend, payment of

interest on loans or amortization of the principal of these loans when the

shareholders’ equity/total liabilities ratio is lower than 20%.

f) Not grant loans to any shareholder, without the previous and express

authorization from the BNDES.

g) Not present, without previous and express authorization from the BNDES, a debt

balance representing more than 15% of the gross revenue, adopting the

following definitions and conditions solely for the purpose of verifying the non-

compliance with this condition:

1) Gross revenue: gross revenue calculated in accordance with applicable

accounting legislation, earned in the prior year, verified by the stipulated

documentation, amount that will be used as a basis until the disclosure of

the balance sheet for the next year.

2) Debt balance: balance of debts contracted and actually taken from third

parties, including principal, interest and all other charges.

3) The computation excludes the amounts related to:

3.1 The contracting of financing solely for purchase of equipment for the

concessionaires’ operation.

3.2 The loans granted to concessionaires by any shareholders, as long as

the interest rate does not exceed two percent (2%) of the interbank

deposit certificate (CDI) rate or eight percent (8%) of the Extended

National Consumer Price Index (IPCA), according to the interest rate

index for the loan agreements.

3.3 The debt balances related to the credit under the Agreements.

h) Not distribute dividends above the minimum mandatory amount, pay interest on

capital, pay interest on loans or repay the principal of these loans when the

Debt Service Coverage Ratio (ICSD) is lower than 1.3, calculated under the

following formula:

ICSD = Cash Generation from the Activity Debt Service

Where:

Cash Generation from the Activity Debt Service EBITDA

54

(+) EBITDA (+) Repayment of principal (+) Profit for the year

(-) Income tax (+) Payment of interest (+) Finance cost/income, net

(-) Social contribution (+) Depreciation and amortization

(+) Provision for income tax and social contribution

(+) Other non-operating expenses/income, net

i) Not assign, dispose of, transfer, sell, pledge, encumber or, in any other form,

negotiate or burden the rights assigned or its related financial investment

without previous and express consent from the BNDES.

j) Maintain deposited in a reserve account, until the final settlement of all

obligations assumed by the Company in the financing agreement, a minimum

amount equivalent to three (3) times the amount of the last overdue debt

service installment, including the payments of principal, interest and other debt

charges arising from the financing agreement.

k) In addition to the events indicated above, the BNDES may accelerate the

maturity of the agreement and require the immediate repayment of the debt, in

the following events:

(a) Non-fulfillment of any obligation assumed with the BNDES and its

subsidiaries, by a company or entity of the Group to which the Company

belongs.

(b) A downsizing in the Company, in disagreement with the training program

approved by the BNDES.

(c) The existence of a sentence to condemn, final and unappealable, due to the

practice of acts involving child labor, slave labor or crime against the

environment.

(d) The amendment to or extinction of the concession agreements without the

previous knowledge of the BNDES.

(e) The non-fulfillment of the obligation established in the calculation of the

ICSD index previously mentioned.

The shareholders agrees

a) Submit for the approval of the BNDES any proposals of matters regarding

encumbrance of any type, of shares owned by it, issued by the concessionaires,

sale, acquisition, merger, spin-off of assets or any other act that entails or may

entail changes in the concessionaires’ current structure or transfer of the

concessionaires’ control, or change in its capacity as concessionaires’

controlling shareholder.

55

b) Not include in the concessionaires’ corporate agreements, bylaws or articles of

organization provisions that result in restrictions to the concessionaires’ growth

capacity or to their technological development or that result in restrictions to

their ability to pay the financial obligations of the transactions with the BNDES.

c) Cover, on a joint liability basis, through increases in the concessionaires’

capital, in cash, the insufficiencies of funds required for executing the project.

d) Maintain, during the effective period of the agreement, its current interests in

the concessionaires’ capital, as well as not dispose of, pledge, encumber or

burden its shares representing the concessionaires’ capital, without previous

and express consent of the BNDES.

e) Maintain pledged to the BNDES, during the effective period of the agreements,

all shares issued by the concessionaires.

f) In the event of the extinction of the Concession Agreements due to

nonperformance resulting from the concessionaires’ acts or omissions or also

due to their bankruptcy or judicial recovery, pay, on a joint liability basis, the

equivalent to 25% of the debt balance with the BNDES, in up to ninety (90)

days counted from the end of the concession agreements, regardless of the

receipt of any indemnity by the Concession Authority. After the payment of such

indemnity to the BNDES, the intervening parties shall pay to the BNDES, on a

joint liability basis, within a maximum period of sixty (60) days from this

payment, any difference existing between the remaining debt balances and the

indemnity amount.

g) If the indemnity does not occur within 12 months counted from the end of the

Concession Agreement, the intervening parties shall pay the remaining debt

balance within 60 days after such term expires.

In order to not fail to comply with any clause of the BNDES agreement, Fernão Dias

was granted referred agency’s approval for the 2nd debenture issue on October 16,

2014. Therefore, the Company and its subsidiaries are compliant with all restrictive

covenants of the agreements with the BNDES at the end of the reporting period. The

fair value of borrowings recognized in current and non-current liabilities

approximates their carrying amount, since the impact of the discount is not

significant, considering that the discount rates are substantially similar to the

contracted rates.

13. DEBENTURES

Balances are broken down as follows:

Parent Company

12.31.2014 12.31.2013

Series Number Contractual Maturities Current Non-current Current Non-

56

issued yield current rates (%)

1st Issuance (d) 20,000 CDI +

1.4% p.a. Jul/2015 230,372 - - 205,022

2nd Issuance (i) 30,000 CDI +

1.28% p.a. Oct/17 - 309,154 - - 50,000 230,372 309,154 - 205,022

Consolidated

12.31.2014 12.31.2013

Series

Number issued

Contractual yield Maturities Current Non-current Current

Non-current

rates (%) Arteris:

1st Issuance (d) 20,000

CDI + 1.4% p.a. Jul/2015 230,372 - - 205,022

2nd Issuance (i) 30,000 CDI +

1.28% p.a. Oct/2017 - 309,154 - -

50,000 230,372 309,154 - 205,022

Autovias: 1st Issuance -

Series 2 (a) 120,000 IPCA + 8% p.a. Mar/2017

3rd Issuance (c) 30,000

CDI + 0.83% p.a. Aug/2017 63,524 104,984 9,461 148,675

150,000 -

108,912 204,000 726 300,000

172,436 308,984 10,187 448,675

Transaction cost

(619) (477) (760) (1,096)

171,817 308,507 9,427 447,579

Centrovias: 1st Issuance -

Series 1 (a) 286,131 CDI + 1.7%

p.a. Mar/2015 - - 67,690 16,847

1st Issuance - Series 2 (a) 120,000

IPCA + 8% p.a. Mar/2017 62,890 105,618 9,460 148,676

2nd Issuance (f) 40,000 CDI + 0.99%

p.a. Jun/2018 115,379 285,760 - -

446,131

178,269 391,378 77,150 165,523

Transaction cost

(896) (899) (412) (294)

177,373 390,479 76,738 165,229

Intervias:

3rd Issuance (c) 60,000 CDI + 1.09%

p.a. Sept/2018 19,128 600,000 16,234 600,000

4th Issuance - Series 1 (a) 150,000

CDI + 1.10% p.a. Oct/2019 3,811 150,000 - -

4th Issuance -Series 2 (g) 225,000

IPCA + 5.96% p.a. Oct/2019 5,546 225,000 - -

435,947

28,485 975,000 16,234 600,000

Transaction cost

(1,424) (3,698) (756) (2,129)

27,061 971,302 15,478 597,871

Vianorte: 1st Issuance -

Series 1 (a) 153,776 CDI + 1.7%

p.a. Mar/2014 - - 36,379 9,054

1st Issuance - Series 2 (a) 100,000

IPCA + 8% p.a. Mar/2017 52,408 88,015 7,880 123,834

2nd Issuance - 150,000 CDI + 0.86%

p.a. Mar/2017 64,892 90,000 - -

253,776

117,300 178,015 44,259 132,888

57

Transaction cost

(426) (252) (300) (250)

116,874 177,763 43,959 132,638

Planalto Sul:

1st Issuance (e) 1,390 CDI + 1.4%

p.a. Jul/2015 16,011 - - 14,250

1,390

16,011 - - 14,250

Transaction cost

(12) (167) - (13)

15,999 (167) - 14,237

Fluminense:


p.a. Jul/2015 25,917 - 23,065

2,250 25,917 - - 23,065

Transaction cost (17) - (31) (15)

25,900 - (31) 23,050

Fernão Dias


p.a. Jul/2015 38,818 - - 34,546

2nd Issuance (h) 10,000 CDI + 1.15%

p.a. Jul/2016 - 100,530 - -

13,370 38,818 100,530 - 34,546

Transaction cost (251) (109) - (32)

38,567 100,421 - 34,514

Régis Bittencourt


p.a. Jul/2015 45,383 - - 40,389

3,940 45,383 - - 40,389

Transaction cost - -

45,383 - - 40,389

Litoral Sul:


p.a. Jul/2015 30,064 - 26,756

2,610 30,064 - 26,756

Transaction cost (25) - (58) (29)

30,039 - (58) 26,727

Total

879,384 2,257,459 145,493 1,687,256

(a) 1st issuance of debentures, Series 1 and 2, on March 15, 2010 with nominal unit

amount of R$1,000 each.

(b) 2nd issuance of debentures, in a single series, of Vianorte on March 20, 2014 with

nominal unit amount of R$10,000 each.

(c) 3rd issuance of debentures, in a single series, of Intervias, on September 25,

2013 with nominal unit amount of R$10,000 each, and 3rd issue of debentures, in

58

a single series, of Autovias, on December 18, 2013 with nominal unit amount of

R$10,000 each.

(d) 1st issuance of debentures, in a single series, of the Parent Company on October

4, 2013 with nominal unit value of R$10,000 each.

(e) 1st issuance of debentures of federal concessionaires, in a single series, on

October 4, 2013 with nominal unit value of R$10,000 each.

(f) 2nd issue of Centrovias’ debentures, in a single series, issued on March 20, 2014,

with unit face value of R$10,000 each.

(g) 4th issue of Intervias’ debentures, in two series, the agreement was issued on

October 15, 2014, with unit face value of R$10,000.

(h) 2nd issue of Fernão Dias’ debentures, in a single series, issued on December 15,

2014, with unit face value of R$10,000 each.

(i) 2nd issue of the Parent Company’s debentures on October 1, 2014, with unit face

value of R$10,000 each.

Debentures were subscribed at their nominal unit amount plus, for series two

debentures, the corresponding adjustment for inflation and, for all debentures, the

interest charged from the issue date through their actual payment date, as

described below:

Issue date

Nominal

amount Payment date

Subscribed

amount 1st Issuance – State

concessionaires

Series 2 03.15.2010 340,000 04.27.2010 345,382 2nd Issuance – Centrovias and

Vianorte 03.20.2014 550,000 03.25.2014 550,722 3rd Issuance – Autovias and

Intervias

09.25.2013 and

12.18.2013 900,000

10.07.2013 and

12.26.2013 902,168

4th Issuance – State concessionaires 10.15.2014 375,000 11.05.2014 377,640

1st Issuance – Federal concessionaires 10.04.2013 135,600 10.08.2013 141,338

2nd Issuance – Federal

concessionaires 10.04.2013 100,000 10.07.2013 100,530 1st Issuance - Arteris 10.04.2013 200,000 10.08.2013 200,156

2nd Issuance – Arteris 10.01.2014 300,000 10.01.2014 302,486 2,900,600 2,920,422

The 1st series debentures of the 1st and 2nd issues of Autovias, Centrovias, Intervias

and Vianorte concessionaires were prepaid to restructure and improve the

amortization profile and debt maturities.

59

The remuneration of 2nd series debentures of 1st issue of Autovias, Centrovias and

Vianorte concessionaires is paid yearly, every March 15, as of March 2011, and will

be amortized in three annual installments.

The yield on 3rd issuance debentures of Intervias is paid on a semi-annual basis,

every 25 of March and September, as of 2014, and amortized in three annual

installments, as of September 25, 2016.

The yield on series 3rd issuance of Autovias will be paid on a semi-annual basis, the

first payment on February 18, 2014, and amortization of principal in three annual

installments, the first of them in February 2015 and the last one in February 2017.

The yield on 1st and 2nd issuance debentures of the federal concessionaires will be

paid on a single installment jointly with the principal on the maturity date.

The remuneration of 2nd issue of Centrovias’ debentures will be paid half-yearly, the

first payment on December 20, 2014, and the others in June and December of each

year and will be amortized in seven half-yearly installments as of June 20, 2015.

The remuneration of 1st series debentures of 4th issue of Intervias concessionaire is

paid half-yearly, every April and October 15, as of 2015, and will be amortized in

three annual installments, as of October 15, 2017.

The remuneration of 2nd series debentures of 4th issue of Intervias concessionaire is

paid yearly, every October 15, as of 2015, and will be amortized in a lump sum on

October 15, 2019.

The remuneration of 2nd issue of the parent company’s debentures will be paid half-

yearly in April and October, the first payment in April 2015.

As at December 31, 2014, long-term installments of both issues are broken down as

follows:

Maturity year 2016 631,041

2017 1,041,456

2018 310,370

2019 274,592

2,257,459

1st, 2nd, 3rd and 4th issuance debentures of state concessionaires contain restrictive

covenants that could accelerate their maturity and require the fulfillment of certain

financial ratios, as disclosed in the section “Information on the Offering –

Accelerated Maturity” of the Final Public Placement Prospectus filed with the CVM.

60

As at December 31, 2014, the Company and its subsidiaries were compliant with the

contractual terms and conditions agreed for the debentures.

The debentures of the 1st Issuance - Series 2 are guaranteed by:

1. Pledge of 51% of the shares of the issuers Autovias and Centrovias, and 53.06%

for Vianorte. The pledge percentage will be periodically decreased as the

debentures are amortized up to the limit of 51%.

2. Collateralization of 80% of toll plaza receivables. The collateralized percentage

will be periodically decreased as the debentures are amortized.

3. Collateralization of 100% of the concession compensation receivables.

4. All units of the Sinking Fund, as described in Note 8.

The 1st and 2nd issuance debentures of the parent company and the federal

concessionaires have restrictive clauses that entail early redemption and require

compliance with certain financial indices, as disclosed in the section “Indentures

and advances from debentures”, filed at CVM.

As at December 31, 2014, the Company and its subsidiaries were compliant with

the contractual terms and conditions agreed for the debentures.

The 1st and 2nd issuance debentures of the federal concessionaires are guaranteed

by “aval” guarantee by Arteris S.A., in favor of the debenture holders.

14. RELATED-PARTY TRANSACTIONS

Parent Company (*)

Current Assets 12.31.2014 12.31.2013

Amounts due from related parties:

Subsidiaries:

Autovias (a) 1,024 269

Centrovias (a) 1,101 270

Intervias (a) 1,114 267

Vianorte (a) 964 267

Planalto Sul (a) 332 453

Fluminense (a) 517 621

Fernão Dias (a) 727 599

Régis Bittencourt (a) 881 892

Litoral Sul (a) 634 693

Latina Manutenção (a) 1,505 166

61

Parent Company (*)

Current Assets 12.31.2014 12.31.2013

Latina Sinalização (a) 141 120

Autovias (d) 4,913 1,716

Centrovias (d) 3,386 1,218

Intervias (d) 4,783 1,763

Vianorte (d) 2,572 -

Planalto Sul (b) 16,823 8,592

Fluminense (b) 56,804 5,415

Fernão Dias (b) 32,730 17,412

Régis Bittencourt (b) 14,393 9,908

Litoral Sul (b) 81,758 9,626

Related parties:

SPI Sociedade para participações em Infraestrutura S.A. 1 -

Total 227,103 60,227

(*) There are no balances in the consolidated.

Parent Company (*)

12.31.2014 12.31.2013

Dividends receivable from subsidiaries:



Litoral Sul - 2,742

Total 6,929 14,632

Non-current assets Parent Company (*)

12.31.2014 12.31.2013

Amounts due from related parties - subsidiaries:

Planalto Sul (b) 160,075 151,483

Fluminense (b) 165,833 100,418

Fernão Dias (b) 337,639 235,227

Régis Bittencourt (b) 147,379 127,471

Litoral Sul (b) 332,853 173,227

Total 1,143,779 787,826

(*) There are no balances in consolidated.

Current liabilities Parent Company (*)

12.31.2014 12.31.2013

Borrowings and financing - subsidiaries:

Autovias (c) 33,225 18,275

Centrovias (c) 24,702 9,840

Intervias (c) 31,493 22,485

Vianorte (c) 17,622 10,075

Total 107,042 60,675



62

12.31.2014 12.31.2013 12.31.2014 12.31.2013

Trade payables:

Related parties:

Participe en Brasil S.L. 152 154 152 154

Subsidiaries:

Centrovias (a) - 12 - -

Intervias (a) - 33 - -

Latina Sinalização - 2 - -

Total 152 201 152 154

Non-current liabilities Parent Company (*)

12.31.2014 12.31.2013

Borrowings and financing - subsidiaries:

Autovias (c) 354,230 235,955

Centrovias (c) 294,201 149,361

Intervias (c) 311,745 289,261

Vianorte (c) 164,075 154,000

Total 1,124,251 828,577


(a) Refer to the apportionment of administrative costs and expenses among Arteris

Group companies. In order to increase the efficiency of the current criterion for

cost apportionment, expedite the administrative process and ensure that all the

benefited parties pay for a share of the expenses related to the Group’s

administrative and support areas, in 2014, the Company adopted a new criterion

for apportioning costs applicable to all Group companies. This criterion adjusts

the apportioned percentages of costs based on the companies’ revenue. This

change does not affect the consolidated operating result.

(b) Intercompany loan agreements with an interest rate equivalent to 100% of the

CDI fluctuation plus 1.037% to 1.4% per year. Interest falls due beginning

December 2017.

(c) Intercompany loan agreements with an interest rate equivalent to 100% of the

CDI fluctuation plus 1.037% to 1.4% per year. Interest falls due beginning

December 2015, and the principal, beginning December 2017.

(d) Refers to interest on capital receivable.

Parent Company

12.31.2014 12.31.2013

Finance income (costs), net:

Subsidiaries:

Autovias (39,088) (21,500)

Centrovias (29,061) (11,577)

Intervias (37,051) (26,452)

63

Vianorte (20,731) (11,853)

Planalto Sul 19,792 10,108


Fernão Dias 38,507 20,483


Litoral Sul 37,458 11,324

Total 6,605 (11,440)

During the year ended December 31, 2014, the Company recognized R$6,111

(R$12,306 as at December 31, 2013), Parent Company, and R$19,259 (R$21,331 as at

December 31, 2013), Consolidated, as management compensation. The officers did

not receive loans from or grant loans to the Company and/or its subsidiaries, and

are not entitled to significant fringe benefits.

The Company grants its employees profit sharing on an annual basis, which is

calculated based on the attainment of corporate targets and specific goals

established, approved and disclosed at the beginning of each fiscal year, and the

payment is made in the following year, in accordance with the attainment of targets

and goals. During the current fiscal year, the accounting provisions are calculated

each month on bases that are estimated and appropriated to the result, having

social obligations as counterparty. The balances of the provision for profit sharing

(PLR) recorded on December 31, 2014 and 2013, respectively, under the “Social

obligations” line, are R$7,647 and R$6,874 on the parent company, and R$28,595

and R$23,631 on the consolidated.

All active employees and employees dismissed for the period, who worked during the

fiscal year, are entitled to profit sharing. In the case of employees dismissed, only

those dismissed without cause are entitled to profit sharing.

The calculation of the profit sharing is based on corporate targets and specific goals

to which weights are attributed in accordance with specific tables. The targets,

goals and weights can be mainly summarized as the achievement of the budget for

expenses and revenues, consolidated EBITDA and EBITDA by company, in addition to

individual evaluations based on technical competence and commitment to quality.

The Company and its subsidiaries offer their employees’ health care, reimbursement

of dental care expenses and life insurance during the employment period. Such

benefits are partially funded by the employees, based on their professional category

and the usage of the respective plans. These benefits are recognized as costs or

expenses when incurred.

In regard to transactions carried out with related parties, the transactions have

strictly adhered to market standards, legal requirements and the interests of the

Company and its subsidiaries. Whenever necessary, these transactions are submitted

to the Board of Directors for approval, in the manner stipulated in the Bylaws. The

64

transactions and business entered into by the Company and its subsidiaries with

related parties are subject to the finance charges previously described, which are

compatible with the rates normally charged in Brazil.

15. CONCESSION FEES

Refer to the fees payable for the concessions granted to subsidiaries Autovias,

Centrovias, Intervias and Vianorte to the São Paulo State Highway Department

(DER/SP), discounted to present value.

The concession fees will be paid in 240 monthly consecutive installments, the first

of which was paid in September 1998 by Autovias, in June 1998 by Centrovias, in

February 2000 by Intervias, and in March 1998 by Vianorte. The amounts are

adjusted using the same formula and at the same dates as the tool adjustment, and

are due on the last business day of each month.

Therefore, the amount of the fees payable was determined as follows:

Consolidated

Present value Notional amount (*)

Current

12.31.2014 12.31.2013 12.31.2014 12.31.2013

Autovias Concession fee 7,634 7,219 7,838 7,414

Variable portion (a) 441 418 441 418

Centrovias Concession fee 11,422 10,802 11,727 11,093


Intervias Concession fee 7,108 6,640 7,298 6,903

Variable portion (a/b) 605 537 605 537

Vianorte Concession fee 46,336 43,825 47,574 45,006


Total

74,452 70,299 76,389 72,229

Consolidated

Present value Notional amount (*)

Non-current 12.31.2014 12.31.2013 12.31.2014 12.31.2013

Autovias Concession fee 18,669 24,176 20,948 27,780

Centrovias Concession fee 25,464 33,910 28,402 38,735

Intervias Concession fee 25,738 30,189 29,867 35,864

Vianorte Concession fee 93,177 128,265 103,308 145,646

Total

163,048 216,540 182,525 248,025

(*) Notional amounts adjusted for inflation through the end of the reporting period, included solely as

additional information.

65

(a) The variable portion, equivalent to 3% of the gross monthly revenue, is due by

the last business day of the subsequent month. Exceptionally, between July and

September 2013, the variable concession fee was calculated based on 1.5% of

gross revenue to offset the non-pass-through of inflation to tariffs as of July 1,

2013, as published on July 27, 2013 in the Diário Oficial do Estado, proceedings

015.147/2013 and registration 234.316/13.

(b) The variable portion, corresponding to 3% of the monthly toll revenue and 25%

of the monthly supplementary revenues actually earned, is due by the last

business day of the subsequent month.

On December 14, 2014, ARTESP’s Managing Board extended, for indefinite term, the

previously granted authorization to withhold and discount 50% of the amount due as

variable concession fee (which corresponds to 1.5% of the Concessionaire’s revenue).

This extension does not include the payments made in November 2013 related to the

variable concession fee of October 2013.

The number of installments payable as at December 31, 2014 is as follows:

Installments

Current Non-current Total

Autovias 12 32 44

Centrovias 12 29 41

Intervias 12 49 61

Vianorte 12 26 38

The amounts paid by the Company to the Concession Authority during the year

ended December 31, 2014 are as follows:

Concession fee

Fixed Variable Amount paid

Autovias 7,536 5,160 12,696

Centrovias 11,275 5,578 16,853

Intervias 7,016 6,338 13,354

Vianorte 45,743 4,827 50,570

Total 71,570 21,903 93,473

As at December 31, 2014, the portions related to the notional amount classified in

non-current liabilities are broken down as follows:

Maturity year

2016 74,603

2017 74,603

2018 25,394

66

After 2019 7,925

182,525

Federal highway concessions do not entail the payment of concession fees as they were

granted on a lowest toll offered basis.

67

16. PROVISIONS

Civil, labor and tax risks

The Company and its subsidiaries are parties to ongoing lawsuits basically involving

civil liability to highway users and labor claims.

Management recognized, based on the opinion of its legal counsel, a provision to

cover probable losses on said lawsuits and estimates that the final outcome will not

affect significantly the cash flows, financial position, and results of operations of

the Company and its subsidiaries.

Changes in the consolidated balance of civil, labor and tax risks during the years

ended December 31, 2014 and 2013 are as follows:

12.31.2013 Additions Reversals Uses 12.31.2014

Civil 5,858 13,740 (5,606) (6,509) 7,483

Labor 5,929 9,093 (6,884) (423) 7,715

Total 11,787 22,833 (12,490) (6,932) 15,198

12.31.2012 Additions Reversals Uses 12.31.2013

Civil 4,624 4,845 (1,669) (1,942) 5,858

Labor 5,552 3,693 (2,214) (1,102) 5,929

Total 10,176 8,538 (3,883) (3,044) 11,787

Additionally, the Company and its subsidiaries are parties to ongoing civil and labor

lawsuits arising from the normal course of business, which were assessed as possible

loss by their legal counsel and for which no provision has been recognized. These

lawsuits total R$7,298 and R$5,419, respectively, in each nature of risk, as at

December 31, 2014 (R$8,433 and R$3,757, respectively, as at December 31, 2013).

Escrow deposits classified in non-current assets refer to lawsuits for which no

provision has been recognized because the respective risk of loss was assessed as

possible or remote.

In May 2014, the Company filed lawsuits with the Federal Court, in the amount of

R$23,308, against ANTT, to annul the deficiency notices imposed by the Agency. In

the opinion of the legal advisors, the deficiency notices were based on weak grounds

and the amounts therein were disproportionate.

Provision for maintenance and investments in highways

The provision for maintenance and investments in highways is calculated,

respectively, based on the best estimate of the expenditures to be incurred on

repairs and replacements and construction and improvement services. The provision

68

for investments considers the amounts through the end of the concession period,

while the provision for maintenance considers the amounts of the next intervention.

69

Changes in provisions for maintenance and investments in highways during the year

ended December 31, 2014 are as follows:

Current Non-current

Provisions Maintenance in highways

Investments in highways

Maintenance in highways


Balances at 12.31.2013 71,043 68,489 401,395 43,151

Additions

9,892 103,071 -

Uses (59,849) (889) - -

Discount to present value - 1,003 22,842 2,754

Transfers 84,064 19,785 (84,064) (19,785)

Balances at 12.31.2014 95,258 98,280 443,244 26,120

Current Non-current

Provisions Maintenance in highways


Maintenance in highways


Balances at 12.31.2012 80,614 56,336 252,115 54,905

Additions 10,374 - 135,331 887

Uses (25,145) (3,962) - (1)

Discount to present value 399 (459) 18,750 3,934

Transfers 4,801 16,574 (4,801) (16,574)

Balances at 12.31.2013 71,043 68,489 401,395 43,151

Payments made in the years ended December 31, 2014 and 2013, related to

maintenances performed, totaled R$96,641 and R$76,534, respectively.

17. EQUITY

a) As at December 31, 2014, share capital is R$873,822 (R$772,417 as at December 31,

2013), represented by 344,444,440 common shares without par value, held as

follows:

12.31.2014

Number of shares

subscribed Equity interest - % Participe en Brasil S.L. 238,563,304 69.26 Board of Directors 5 0.00 Other 105,881,131 30.74 Total 344,444,440 100.00

70

12.31.2013

Number of shares

subscribed Equity interest - %

Participe en Brasil S.L. 238,563,304 69.26

Board of Directors 5 0.00

Other 105,881,131 30.74

Total 344,444,440 100.00

At the Annual and Extraordinary Shareholders’ Meeting held on April 23, 2014, the

Company approved a capital increase through capitalization of profits of R$101,405,

raising the capital to R$873,822 divided into 344,444,440 common shares, without

issuance of new shares.

Each share entitles its holder to one vote in Shareholders’ Meetings.

b) Profit reserves and distribution of dividends (Parent Company):

Legal and profit retention reserve

The Company’s bylaws prescribe that the profit for the year, after recognition

of the legal reserve, as provided for by law, can be allocated to the provision

for civil, labor and tax risks, the earnings retention reserve set out in the

capital budget to be approved at the Shareholders’ Meeting, or the unrealized

earnings reserve, pursuant to Article 198 of Law 6404/76.

Distribution of dividends

The Company’s bylaws provide for the distribution of a minimum mandatory

dividend of 25% of the profit for the year, adjusted pursuant to Article 202 of

Law 6404/76.

The calculation of statutory dividends as at December 31, 2014 and 2013 is as

follows:

12.31.2014 12.31.2013

Profit for the year 447,370 426,972

Legal reserve 5% (22,369) (21,349)

Taxable base 425,001 405,623

Statutory dividends 25% 25%

Total 106,250 101,405

Dividends advanced (79,222) (79,222)

Dividends proposed 27,028 22,183

Dividends per share 0.3085 0.29440

71

18. REVENUES


Consolidated 12.31.2014 12.31.2013

Revenue from services provided 2,431,851 2,300,436

Revenue from construction services 1,757,447 1,258,870

Other revenues 47,060 42,877

4,236,358 3,602,183

The reconciliation between gross revenue and net revenue presented in the income

statement for the year is as follows:

Consolidated 12.31.2014 12.31.2013

Gross revenue 4,236,358 3,602,183

Service tax (ISSQN) (123,318) (134,753)

Tax on revenue (PIS) (17,271) (16,382)

Tax on revenue (COFINS) (76,084) (73,209)

Other deductions (1,552) (366)

Net revenue 4,018,133 3,377,473

19. COSTS AND EXPENSES BY NATURE

Broken down as follows: Parent Company

12.31.2014 12.31.2013

Expenses:

Personnel (1,193) (4,814)

Outsourced services 817 (7,488)

Depreciation and amortization (1,802) (1,269)

Insurance and guarantees (1) (44)

Consumption (91) (491)

Transportation (140) (490)

Other (1,414) (6,112)

Total (3,824) (20,708)

72

Consolidated

12.31.2014 12.31.2013

Costs:

Construction cost (1,757,447) (1,258,870)

Personnel (141,455) (133,572)

Outsourced services (174,293) (155,471)


Costs with Concession Authority (22,660) (32,554)

Insurance and guarantees (23,174) (19,748)

Conservation (104,936) (100,807)

Provision for maintenance in highways (145,463) (196,030)

Inspection fee (38,773) (36,689)

Other (67,483) (32,744)

Total (2,812,470) (2,237,115)

Consolidated

12.31.2014 12.31.2013

Expenses:

Personnel (77,557) (78,084)

Outsourced services (39,433) (42,423)


Civil, labor and tax risks (9,576) (3,960)

Insurance and guarantees (1,854) (1,558)

Other (45,763) (40,678)

Total (182,086) (181,818)

20. FINANCE INCOME (COSTS)

Represented by:

Parent Company

12.31.2014 12.31.2013

Finance income:

Interest income 134,161 60,878

Short-term investments 9,228 11,828

Other income 73 19

Total 143,462 72,725

Finance costs:

Finance charges (157,968) (71,383)

Other costs (4,557) (16,064)

Total (162,525) (87,447)

73

Consolidated

12.31.2014 12.31.2013

Finance income:

Interest income 4,256 983

Short-term investments 122,514 58,468

Finance charges – reversal of discount to present value - 71

Other income 605 1,539

Total 127,375 61,061

Finance costs: Finance charges (383,045) (263,120)

Inflation adjustment of concession fees (22,093) (28,505)

Finance charges – discount to present value (26,958) (22,713)

Other costs (17,977) (24,486)

Total (450,073) (338,824)

21. STATEMENT OF CASH FLOWS

a) Cash and cash equivalents

The breakdown of cash and cash equivalents included in the statement of cash flows is stated in Note 5.

b) Supplemental information

12.31.2014 12.31.2013 Non-cash investing and financing transactions: Purchases of intangible assets recognized under trade payables, related parties, contractual guarantees and taxes payable 60,151 18,514

Capital contribution – Profit reserves 19,612 21,960

Capitalized interest 78,426 35,344

Dividends proposed 4,697

22. RECONCILIATION OF INCOME TAX AND SOCIAL CONTRIBUTION

The reconciliation of effective and statutory income tax and social contribution rates in the income statements for the years ended December 31, 2014 and 2013 is as follows:

Parent Company 12.31.2014 12.31.2013

Profit before income tax and social contribution 448,511 426,970

Combined statutory rate 34% 34%

Income tax and social contribution according to the combined statutory rate (152,493) (145,169)

74

Adjustments to effective rate:

Equity in the earnings (losses) of subsidiaries 158,853 158,491

Interest on capital received (8,499) (7,879)

Credit on tax loss and tax loss carryforwards on which the effects of deferred income tax and social contribution were not recognized - -

Other adjustments 998 (5,443)

Expense recognized (1,141) -

Income tax and social contribution expense:

Current (1,141) -

Consolidated 12.31.2014 12.31.2013

Profit before income tax and social contribution 690,157 669,256

Combined statutory rate 34% 34%

Income tax and social contribution according to the combined statutory rate (234,653) (227,547)

Credit on tax loss and tax loss carryforwards on which the effects of deferred income tax and social contribution were not recognized -

Adjustments to effective rate:

Other adjustments 1,882 24,631

Expense recognized (233,297) (202,916)

Income tax and social contribution expense:

Current (231,128) (230,600)

Deferred (2,169) 27,684

The effects of certain items of such reconciliation, on which no deferred income tax

and social contribution were recognized, arise from specific tax situations of

companies that did not meet the conditions established in the accounting standard

for recognition of deferred tax assets.

On November 11, 2013, the Provisional Measure 627, converted into Law No. 12,973,

as of May 13, 2014, was published, introducing changes in tax rules and revoking the

Transitional Tax Regime (RTT), adopted by the Company and its subsidiaries for

calculation of income tax and social contribution on net income.

On December 31, 2014, the Company’s Management resolved on its early adoption

as provided for by laws for the fiscal year of 2014, referring to subsidiaries Autovias

and Centrovias. Other subsidiaries will apply referred law when it takes effect as of

2015. The adjustments were not relevant for the Company and consolidated results.

75

23. EARNINGS PER SHARE

The tables below present the reconciliation of profit for the year to the weighted

average of the value per share used for calculation of basic earnings and diluted

earnings per share.

Parent Company 12.31.2014 12.31.2013


Number of shares during the year 344,444 344,444

Earnings per share – basic 1.2988 1.2396

Consolidated 12.31.2014 12.31.2013

Basic


Number of shares during the year 344,444 344,444

Earnings per share – basic 1.3264 1.3539

There is no difference between basic and diluted earnings per share, since during

the fiscal year ended December 31, 2014 there were no equity instruments with

dilutive effect.

The weighted average number of common shares used in the calculation of diluted

earnings per share reconciles to the weighted average number of common shares

used in the calculation of basic earnings per share. There are no longer quantities as

employee options and/or other options to be reconciled.

24. FINANCIAL INSTRUMENTS

According to their nature, financial instruments may involve known or unknown risks

and a potential risk assessment is important. The main market risk factors that may

affect the business of the Company and its subsidiaries are as follows:

Capital risk management

The Company’s management manages its cash in order to be able to continue as a

going concern and maximize the funds for use in new investments, as well as to

provide return to shareholders.

The Company’s capital structure consists of financial liabilities, cash and cash

equivalents, marketable securities and equity, comprising share capital and profit

reserves.

76

Management periodically reviews the capital structure and its ability to settle its

liabilities, and timely monitors the average term of suppliers in relation to the

average turnover of current assets, taking the necessary actions when the ratio

between these balances presents assets higher than liabilities.

The Company’s objectives when managing capital are to safeguard its ability to

continue as a going concern in order to provide return to shareholders and benefits

to other stakeholders and to maintain an optimal capital structure to reduce the

cost of capital and maximize the funds for use in new investments and investments

in existing businesses.

Fair value of financial instruments carried at amortized cost

The financial instruments held by the Company are carried at amortized cost and

approximate their fair value because:

Borrowings, financing and debentures: are substantially contracted at floating

interest rates.

Trade receivables and payables: have average term of 30 days.

Cash and cash equivalents and restricted investments: are substantially indexed to

the CDI.

As the nature, characteristics and contracted conditions are reflected in the

carrying amounts, the eligible balances are discounted to present value, when

applicable. The Company and its subsidiaries did not hold derivatives or other

instruments with similar risks. Differences might occur if these amounts were

settled in advance.


12.31.2014 12.31.2013 12.31.2014 12.31.2013

Assets Loans receivable

Loans receivable

Loans receivable

Loans receivable

Cash and cash equivalents 109,516 185,442 1,410,451 929,911

Related parties 1,370,882 848,053 - -

Trade receivables - - 154,062 126,709

Restricted Investments - - 259,237 110,987

Other receivables 1,267 2,826 6,806 5,691


12.31.2014 12.31.201

3 12.31.2014 12.31.2013

Liabilities Financial

liabilities at amortized cost

Financial liabilities

at amortized

Financial liabilities at

amortized cost

Financial liabilities at amortized

cost

77

cost

Trade payables and contractual guarantees 2,809 1,071 204,632 166,962

Borrowings and financing - - 2,915,662 2,291,979

Debentures 539,526 205,022 3,136,843 1,832,749

Related parties 1,231,293 889,252 - -

Concession fees - - 237,500 286,839

Other payables 2,756 4,347 10,165 9,833

Market risks

a) Exposure to exchange rate risks

As at December 31, 2014 and 2013, the Company and its subsidiaries did not

have any material assets or liabilities denominated in foreign currency.

b) Exposure to interest rate risks

The Company, through its subsidiaries, is exposed to normal market risks related

to TJLP, IPCA and CDI fluctuation in connection with real-denominated

borrowings and debentures. Interest on short-term investments is pegged to CDI

fluctuation.

As at December 31, 2014, Management carried out a sensitivity analysis, taking

into account 25% and 50% increases and a 25% decrease in expected interest

rates on the balances of borrowings and financing and debentures, net of short-

term investments.

Indicators Scenario I (probable)

Scenario II (+ 25%)

Scenario III (- 25%)

Scenario IV (+ 50%)

CDI 12.50% 15.63% 18.75% 9.38%

Interest to be incurred(*) (246,002) (300,827) (354,553) (192,595)

Income from short-term investments 169,345 211,623 253,902 127,067

TJLP 5.00% 6.25% 3.75% 7.50%


Extended Consumer Price Index (IPCA) 6.40% 8.00% 9.60% 4.80%


Interest to be incurred, net(*) (286,354) (331,883) (376,652) (241,959) Source of indexes: Focus Report- Brazilian Central Bank (Bacen).

(*) Refers to the scenario of interest to be incurred in the shorter of the next

12 months or up to the agreement termination date.

78

These presentations are additional to the disclosures required by IFRS,

being in conformity with the disclosures required by the CVM.

c) Credit risk

As at December 31, 2014, the subsidiaries have receivables totaling R$137,923

(R$119,714 at December 31, 2013) from CGMP - Centro de Gestão de Meios de

Pagamento S.A., Dbtrans, Conectar and Autoexpresso, arising from tolls

collected by the electronic toll payment system (“Sem Parar”), recognized in

line item “Trade receivables”.

The subsidiaries have a letter of guarantee issued by a bank to secure the

collection of such receivables from CGMP.

d) Liquidity risk

Liquidity risk is managed by the parent company Arteris S.A., which has an

appropriate liquidity risk management model for the needs to obtain funding

and manage liquidity on a short-, medium- and long-term basis.

The parent company manages liquidity risks by maintaining adequate reserves,

bank credit lines and other credit lines for obtaining funding in the form of

loans, as deemed appropriate, through ongoing monitoring of forecast and

actual cash flows, as well as through the combination of maturity profiles for

financial assets and liabilities.

The table below shows details of the remaining contractual maturity of the

Company’s non-derivative financial liabilities and the contractual amortization

terms. This table was prepared under the undiscounted cash flow method for

financial liabilities based on the most recent date on which the Company should

settle the respective obligations. The table includes interest and principal cash

flows. To the extent that the interest flows are post-fixed, the undiscounted

amount was obtained based on the interest curves at the end of the reporting

period. The contractual maturity is based on the most recent date on which the

Company should settle the respective obligations:

Type

Effective (weighted average) interest

rate % p.a.

2014 2015 2016 2017 After 2018

Total

Debentures - CDI 13.08 558,449 670,400 669,321 545,280 526,996 2,970,496

BNDES Automático 7.95 235,369 274,812 288,150 291,086 1,883,132 2,972,549

Finame 5.99 244,429 374,015 216,424 - - 834,868

Concession fees 3.89 144,264 343,926 340,244 250,664 - 1079,098

Lease 3.75 1,462 139 - - - 1,601

79

Working capital 12.60 6,740 11,943 - - - 18,683

Debentures - IPCA 13.30 265,239 253,995 223,020 260,135 - 1,002,389

Total

1,456,002 1,929,230 1,737,159 1,347,165 2,410,128 8,879,684

25. SEGMENT REPORTING

On January 1, 2009, the Company adopted CPC 22 and IFRS 8 – Segment Reporting,

which require that operating segments be identified based on internal reports

regarding the Company’s components that are regularly reviewed by the Company’s

officers, chief operating decision-makers, to allocate funds to the segment and

assess its performance.

As a means of managing its business in both financial and operational terms, the

Company has classified its businesses as construction and concession of highways.

These two divisions are considered the primary segments for purposes of disclosing

information. The main characteristics are mentioned in notes 2 and 4.1.

a) Income statement by segment

12.31.2014

Concession Construction Total

Eliminations and holding

Consolidated balance

Net revenue of the segment 4,018,133 488,362 4,506,495 (488,362) 4,018,133

Costs (2,839,340) (448,223) (3,287,563) 475,093 (2,812,470)

Gross profit 1,178,793 40,139 1,218,932 (13,269) 1,205,663

General and administrative expenses (193,289) (35,908) (229,197) 24,097 (205,100)

Other operating (expenses) income 807 120 927 11,041 11,968

Finance income 239,933 2,814 242,747 (115,372) 127,375

Finance costs (543,545) (2,474) (546,019) 95,946 (450,073)

Foreign exchange gain (loss), net 324 324

Operating profit before taxes 682,699 4,691 687,390 2,767 690,157

Income tax and social contribution:

Current (224.034) (5.953) (229.987) (1.141) (231.128)

Deferred (1.453) 4.151 2.698 (4.867) (2.169)

Profit for the year 457.212 2.889 460.101 (3.241) 456.860

12.31.2013

Concession Construction Total

Eliminations and holding


Net revenue of the segment 3,378,837 518,275 3,897,112 (519,639) 3,377,473

Costs (2,278,381) (485,540) (2,763,921) 526,806 (2,237,115)

Gross profit 1,100,456 32,735 1,133,191 7,167 1,140,358

General and administrative expenses (147,901) (23,087) (170,988) (35,307) (206,295)

80

Other operating (expenses) income 2,910 (803) 2,107 10,853 12,960

Finance income 117,613 2,056 119,669 (58,608) 61,061

Finance costs (381,168) (1,538) (382,706) 43,882 (338,824)

Foreign exchange gain (loss), net - - - (4) (4)

Operating profit before taxes 691,910 9,363 701,273 (32,017) 669,256

Income tax and social contribution:

Current (225,556) (5,044) (230,600) - (230,600)

Deferred 215 2,417 2,632 25,052 27,684

Profit for the year 466,569 6,736 473,305 (6,965) 466,340

b) Balance sheets by segment

12.31.2014

Assets Concession Construction Total Eliminations and holding


CURRENT ASSETS Cash and cash equivalents 1,279,341 21,594 1,300,935 109,516 1,410,451

Trade receivables 152,835 1,227 154,062 - 154,062

Restricted investments 174,377 - 174,377 - 174,377

Amounts due from related parties 107,049 - 107,049 (107,049) -

Other current assets 54,099 60,279 114,378 (34,782) 79,596

Total current assets 1,760,757 83,100 1,843,857 (32,315) 1,818,486

NON-CURRENT ASSETS Restricted investments 84,860 - 84,860 - 84,860

Amounts due from related parties 1,124,251 - 1,124251 (1,124,251) -

Deferred income tax and social contribution 155,009 8,709 163,718 20,188 183,906

Other non-current assets 48,706 542 49,248 6,213 55,461

Property and equipment 16,436 35,877 52,313 9,173 61,486

Intangible assets 7,380,334 5,904 7,386,238 9,391 7,395,629

Deferred charges 59,373 59,373 (59,373)

Total non-current assets 8,868,969 51,032 8,920,001 (1,138,659) 7,781,342

Total assets 10,636,670 134,132 10,770,802 (1,170,974) 9,599,828

81

12.31.2014

Liabilities Concession Construction Total Eliminations and holding


CURRENT LIABILITIES Borrowings and financing 188,356 10,509 198,865 - 198,865

Debentures 649,012 - 649,012 230,372 879,384

Trade payables 125,281 14,778 140,059 2,809 142,868

Payroll and related taxes 106,139 27,374 133,513 16,050 149,563

Concession fees 74,452 - 74,452 - 74,452

Dividends proposed 6,929 - 6,929 20,099 27,028

Claims received 39,266 - 39,266 (20,919) 18,347

Provision for maintenance/investments 193,538 - 193,538 - 193,538

Other current liabilities 321,909 8,361 330,270 (256,499) 73,771

Total current liabilities 1,704,882 61,022 1,765,904 (8,088) 1,757,816

NON-CURRENT LIABILITIES

Borrowings and financing 2,804,569 10,164 2,814,733 (97,936) 2,716,797

Debentures 1,948,521 - 1,948,521 308,938 2,257,459

Concession fees 163,048 - 163,048 - 163,048

Provision for maintenance/investment 469,364 - 469,364 - 469,364

Other non-current liabilities 1,147,882 4,360 1,152,242 (1,045,675) 106,567

Total non-current liabilities 6,533,384 14,524 6,547,908 (834,673) 5,713,235

Equity 2,398,404 58,586 2,456,990 (328,213) 2,128,777

Total liabilities 10,636,670 134,132 10,770,802 (1,170,974) 9,599,828

82

12.31.2013

Assets Concession Construction Total Eliminations and holding


CURRENT ASSETS Cash and cash equivalents 708,395 36,074 744,469 185,442 929,911

Trade receivables 125,981 728 126,709 - 126,709 Restricted investments 47,383 - 47,383 - 47,383 Amounts due from related parties 60,682 - 60,682 (60,682) - Other current assets 33,044 79,073 112,117 (54,662) 57,455 Total current assets 975,485 115,875 1,091,360 70,098 1,161,458

NON-CURRENT ASSETS Restricted investments 63,604 - 63,604 - 63,604

Amounts due from related parties 828,577 - 828,577 (828,577) - Deferred income tax and social contribution 142,495 4,558 147,053 25,055 172,108 Other non-current assets 15,565 268 15,833 6,162 21,995 Property and equipment 19,298 21,984 41,282 5,095 46,377 Intangible assets 5,895,424 7,386 5,902,810 659 5,903,469 Deferred charges 84,424 - 84,424 (84,424) - Total non-current assets 7,049,387 34,196 7,083,583 (876,030) 6,207,553 Total assets 8,024,872 150,071 8,174,943 (805,932) 7,369,011

12.31.2013

Liabilities

Concession Construction Total Eliminations and holding


CURRENT LIABILITIES Borrowings and financing 136,872 6,008 142,880 109 142,989

Debentures 145,511 - 145,511 (18) 145,493

Trade payables 99,345 21,764 121,109 1,006 122,115

Payroll and related taxes 113,322 35,017 148,339 14,239 162,578

Concession fees 70,299 - 70,299 - 70,299

Dividends proposed 14,632 - 14,632 7,551 22,183 Provision for maintenance/investments in highways - - - 40,152 40,152

Claims received 139,532 - 139,532 - 139,532

Other current liabilities 208,327 15,738 224,065 (168,915) 55,150

Total current liabilities 927,840 78,527 1,006,367 (105,876) 900,491

NON-CURRENT LIABILITIES Borrowings and financing 2,283,329 4,578 2,287,907 (138,917) 2,148,990

Debentures 1,482,450 - 1,482,450 204,806 1,687,256

Concession fees 216,540 - 216,540 - 216,540

Provision for maintenance/investment 444,546 - 444,546 - 444,546

Other non-current liabilities 734,311 4,228 738,539 (646,924) 91,615

Total non-current liabilities 5,161,176 8,806 5,169,982 (581,035) 4,588,947

Equity 1,935,856 62,738 1,998,594 (119,021) 1,879,573

Total liabilities 8,024,872 150,071 8,174,943 (805,932) 7,369,011

26. GUARANTEES AND INSURANCES

By force of contract, the concessionaires maintain regularized and updated the

guarantees covering expansion and special conservation functions, as well as

operating functions, ordinary upkeep of the highway network and payment of the

fixed concession fees, when applicable. In addition, as required by contract and the

internal risk management policy, the concessions have insurance policies in place

83

for operating risks, engineering risks and civil liability, to ensure coverage of

damages arising from risks inherent to its activities, such as loss of revenue, total or

partial destruction of works and assets that are part of the concession, as well as

property damage and bodily injury to users. All of them are in accordance with

international standards for projects of this nature.

As at December 31, 2014, the subsidiaries’ insurance coverage is summarized as

follows:

Indemnity limits – state concessions

Type Covered risks Autovias Centrovias Intervias Vianorte

All risks Property damage/loss of revenue(*) 180,000 180,000 180,000 180,000

Civil liability 17,000 24,000 21,000 24,000

Guarantee Concession agreement performance

guarantee 92,626 131,448 160,272 122,292

Indemnity limits – federal concessions

Type Covered risks Planalto

Sul Fluminense

Fernão Dias

Régis Bittencourt

Litoral Sul

All risks Property damage/loss

of revenue(*) 180,000 180,000 180,000 180,000 180,000

Civil liability 20,000 20,000 20,000 20,000 20,000

Guarantee Concession agreement performance guarantee 50,640 74,369 131,061 139,839 106,548

(*) By claim

The Company has also civil liability insurance policies for board members, directors

and officers, with an indemnity limit of R$62,000.

27. EVENTS AFTER THE REPORTING PERIOD

Planalto Sul

As per the Extraordinary Shareholders’ Meeting of January 26, 2015, the Company

entered into a loan agreement with the parent company Arteris totaling R$13

million. This agreement matures on March 27, 2015, with annual interest rate of

1.4% plus 100% of CDI rate variation as of the date of reimbursement. Referred

proceeds will be allocated to finance the investments estimated in the Company’s

work schedule.

On January 28, 2015, the Company obtained the 10th release for the sub-credit “C”

totaling R$2.5 million of the long-term loan entered into with the Brazilian

Development Bank (BNDES). With such release, the Company raised R$331.3 million

estimated for the abovementioned agreement.

84

As per the Extraordinary Shareholders’ Meeting of February 13, 2015, the Company

entered into a loan agreement with the parent company Arteris totaling R$13

million. Referred agreement matures on April 13, 2015, with annual interest rate of

1.4% plus 100% CDI rate variation as of the date of reimbursement. Referred

proceeds will be allocated to finance investments estimated in the Company’s work

schedule.

Litoral Sul

On January 26, 2015, a total of 14,781,966 non-par common shares were fully paid

and subscribed (R$20,000) through the Minutes of the Extraordinary Shareholders’

Meeting.

Fernão Dias

On January 26, 2015, a total of 10,752,688 new non-par, registered common shares

were fully paid at the issue price of R$0.93, totaling R$10,000, and subscribed on

January 26, 2015 through the Minutes of the Extraordinary Shareholders’ Meeting.

The payment was made in domestic currency, by means of capitalization of credits

Arteris S.A. holds in the concessionaire in view of loan agreements signed.

Total subscribed and paid-up capital stock is R$348,001,003.00, divided into

351,484,816 shares.

ARTERIS S.A.

Corporate Taxpayers’ ID (CNPJ): 02.919.555/0001-67

Company Registry (NIRE): 35.300.322.746

Publicly-Held Company

FISCAL COUNCIL’S REPORT

On a meeting held on this date, at 10:00 a.m., the members of the Fiscal Council of ARTERIS S.A.

(“Company”), in compliance with Article 163 of Law 6404/76, after examining Management’s

documents and proposals submitted to analysis on this date, and in view of the unqualified report issued

by BDO Auditores Independentes, is unanimously favorable to the approval at the Company’s Annual

Shareholders’ Meeting, to be held on April 8, 2015, and based on the Management Report and the

Financial Statements for the fiscal year ended December 31, 2014 (such documents were notarized by the

Board and filed at the Company as Docs. 1, 2 and 3, respectively), of the allocation of net income for the

year, totaling four hundred forty-seven million, three hundred seventy thousand, four hundred twenty-six

reais and eighty-nine centavos (R$447,370,426.89), of which (i) twenty-two million, three hundred sixty-

eight thousand, five hundred twenty-one reais and thirty-four centavos (R$22,368,521.34) corresponding

to 5% of the net income for the year, allocated to the legal reserve, in accordance with the law and the

Company’s Bylaws; (ii) one hundred six million, two hundred fifty thousand, four hundred seventy-six

reais and thirty-nine centavos (R$106,250,476.39), corresponding to 25% of the net income for the year,

for the distribution of mandatory dividends related to 2014, as per Article 22 of the Company’s Bylaws,

of which seventy-nine million, two hundred twenty-two thousand, two hundred twenty-one reais and

twenty centavos (R$79,222,221.20) already distributed on November 28, 2014, remaining twenty-seven

million, twenty-eight thousand, two hundred fifty-five reais and nineteen centavos (R$27,028,255.19) to

be distributed to the Company’s shareholders; (iii) three hundred eighteen million, seven hundred fifty-

one thousand, four hundred twenty-nine reais and sixteen centavos (R$318,751,429.16) allocated to the

profit reserve to cover the capital budget duly prepared by the Board of Executive Officers, which was

submitted to analysis and approved by the Company’s Fiscal Council and which shall be submitted to the

analysis and approved by the Company’s Board of Directors, pursuant to Article 196 of Law 6404/76.

However, if the allocations proposed herein are approved without restrictions, the amount of the profit

reserves will exceed the amount of capital stock and will not comply with the limit established in Article

199 of Law 6404/76. Accordingly, the Board members also recommend the capitalization of a portion of

the balance of the reserves that exceed the Company’s capital stock, of one hundred fifty-nine million,

three hundred seventy-five thousand, seven hundred fourteen reais and fifty-eight centavos

(R$159,375,714.58).


“This is a free English translation of the original minutes drawn up in the Company’s records”

Maria de Castro Michielin

Secretary

2015 Capital Budget Proposal

In accordance with Article 196 of Law 6404/76, the Company’s Board of Directors submits to your analysis

and vote at the Annual Shareholders’ Meeting to be held on April 08, 2015, the 2015 capital budget proposal,

as outlined in the table below:

Additionally, in light of the investment commitments made to the Concession Authority with respect to its five

federal concessionaires, the Company expects to invest approximately R$5.4 billion during the entire

concession term. These investments in fixed and intangible assets include spending on the construction,

improvement and maintenance of the highway stretches managed by the Company, consistent with its long-

term investment plan and the legal requirements of its concession contracts.

Cash Flow Estimate for 2014 In thousands of Brazilian reais

Opening cash 1.410

Cash flow generated by operations after income tax 1.388

New financing and finance income minus financing amortization and

payment of f inance costs 319

Payment of dividends - Annual Shareholders' Meeting (27)

Payment of interim dividends (Nov/14) (69)

Cash available for investments 3.022

Investments expected - concessions (2.067)

Other investments in projects and equipment (11)

Closing cash 943

Arteris S.A. Divulgação de Resultados...

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