NOS SGPS

Annual Report (ESEF) • Mar 15, 2024

NOS, SGPS, S.A. 2023 Annual Integrated Report 2023 Annual Integrated Report NOS, SGPS, S.A. NIPC 504453513 2023 Annual Integrated Report Integrated Management Report Consolidated Financial Statements Individual Financial Statements Corporate Governance Report 01 02 03 04 This report is a translation of the Portuguese original version of the Annual Integrated Report 2023 of NOS, SGPS, S.A., disclosed on 15 March 2024 on CMVM's website and on NOS' institutional website, in ESEF format. In case of discrepancies between this version and the official ESEF version, the latter prevails. 2023 Annual Integrated Report 01 Integrated Management Report 01 02 03 04 2023 Annual Integrated Report 01 Integrated Management Report 02 03 04 Chapter 1 1.1. Message from the CEO 1.2. About this report 1.3. NOS in Numbers 1.4. Value creation model 1.5. Our essence: Purpose, Mission, Vision, and Values 1.6. Activity and portfolio 1.7. Our strategy 1.8. Governance model 1.9. Doing what hasn’t been done before 05 07 08 09 09 12 13 15 19 23 1.1 Message from the CEO 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 5 1.1 Message from the CEO Dear Stakeholders, Doing what hasn’t been done before The strong investment which NOS has made in Portugal's digital infrastructure in recent years, combined with its portfolio of innovative services, has contributed decisively to the country's development, creating value for the economy and the social well- being of companies and families. NOS has been a powerful lever for promoting greater and better connectivity, which has continually redesigned how we live and work. Technology, innovation, and customer experience have been core elements of our operations. Our vision of technological leadership is achieved through heavy investment in building a state-of-the-art network infrastructure. As one of the groups that most invests in Portugal, NOS has been making a major contribution to accelerating the country's development, cities are becoming safer, more efficient, and sustainable spaces, using ever more advanced smart city solutions, and companies are becoming more competitive, productive, and ready for the future. For families, our network offers more connectivity, with the best quality, and ensures greater well-being for people. Today, NOS, is publicly recognised as having the best 5G network in the country, covering over 94% of the population. NOS's technological strategy continues to drive expansion of our Next Generation fixed network, which is already present in more than 5.4 million households. In 2023 we Increased our turnover by 5% to 1.6 billion euros, an increase which resulted in a 10.1% growth in operating profitability, EBITDA AL, to 603.2 million euros and an increase in Cash Flow generation of 131 million euros. These results show the determination of NOS' team to achieve the strategic objectives we set ourselves, in a challenging environment, marked by continued uncertainty associated with geopolitical tensions, a slowdown in the European economy, and a slowdown in the growth of the Portuguese economy, combined with inflationary pressure and supply chain constraints. Our excellent results and performance have been recognised by the market. In 2023, several independent agencies and organisations continued to award NOS for the excellence of its infrastructure, technology, innovation, and services. In addition to our ambition of achieving 5G leadership, customer focus remained the ultimate goal of everything we did throughout the year. We improved NOS' value proposition, updating service bundles, integrating communications, media, content and security services, alwayss striving to exceed our customers' expectations. We added innovative services and solutions to our portfolio, and expanded our operations into new businesses, taking advantage of our technological assets and complementary service offering. We value our people The strong results we have achieved are evidence of the enormous capacity we have, as a Team, to achieve and overcome the objectives we set ourselves. Our People are a core asset for our success and in 2023 we implemented major projects to enhance how we engage with our team. We developed a new performance evaluation and talent model, promoting a culture of talent development and investing in numerous training programs. We also created a fully dedicated diversity and inclusion team, having made significant progress towards increasing diversity in our leadership, with 33% of our management positions now held by women, on track for our target of 40% by 2030. 1.1 Message from the CEO 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 6 We are building for a better future. We are proactively addressing our environmental responsibility having adopted numerous structural measures to reduce the carbon footprint of our own operations, such as the continued electrification of our fleet, measures to increase the energy efficiency of our facilities and operations, the activation of power-saving features and the launch of new customer end-point devices with significant energy performance improvements. I would like to highlight the significant increase in energy efficiency of our telco operation, whichh achieved a 13% reduction yoy in electricity consumed per unit of data traffic, a result made possible by some of the aforementioned measures and the Investments we have been making In the continuous modernization of our technological infrastructure. We have also made Important progress in measuring the environmental footprint and and assess the performance of our value chain, having launched a screening programme to evaluate the environmental, social and governance practices of our main suppliers. Regarding circularity, we have also undertaken an ambitious commitment, having signed up, along with 11 major international operators, to the GSMA's new targets for the reduction of e-waste production and resource use. Our technology allows us to provide an increasing number of innovative solutions which generate environmental and social benefits for society and the planet, covering areas such as energy efficiency and low-carbon solutions; smart cities and mobility; health and active living; circular economy and dematerialisation. As an example, in healthcare, NOS's 5G technology enabled the first remote ultrasounds to be performed and the establishment of a close monitoring service for patients with chronic Illnesses, through real-time transmission of biomedical information. These innovations drive important benefits for patients' wellbeing and support more efficient healthcare system and human resource management. We continued to explore opportunities for sustainable innovation, having participated in various R&D projects throughout the year, supported by NOS' technologies and expertise in 5G, IoT, Cloud, Analytics and AI. Our commitment to innovation is reflected in the 68 million euros we invested in Research & Development projects - according to the most recent data from the Directorate- General for Education and Science Statistics, we rank fourth amongst Portuguese companies in submission of patent applications in Portugal. We will continue creating opportunities for our Next Generation communications to enable more sustainable development, contributing to the achievement of the Sustainable Development Goals set out in the United Nations 2030 Agenda, and to the Principles of the United Nations Global Compact, to which we subscribe. We aspire to more 2024 is set to be a year of enormous challenges, but I am confident that with this Team we will continue on our path of success. We will pursue our ambitions, driving a business which promotes an economy and a country that is more inclusive, environmentally responsible, and that promotes new and better ways of living and working. We are aware that the opportunities enabled by technology are immense and we intend to capture their full potential, extending and deepening the benefits of connectivity to new areas and dimensions. We are guided by NOS' culture, our rigourous work ethic, our transformative energy, our relentless desire for more, and by the passion we put into everything we do. Miguel Almeida CEO 1.1 1.2 About this report 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 7 1.2. About this report An integrated view of impact and value creation The NOS 2023 Integrated Annual Report presents the Group's integrated performance, framed by the strategic vision we have for the future, and by a unique management model, which we continue to improve, to maximise value creation for stakeholders. The report covers the period from 1st January to 31st December 2023. Whenever appropriate and relevant, the report incorporates data from previous years, enabling a comparison, or an adequate background to the company's decisions, actions, or results, as well as insights or information on future prospects. Aligned with part of the International Integrated Reporting Council (IIRC) guidelines, this report provides a detailed view of NOS' approach to value creation in its' various dimensions. As in the previous year, the 2023 Annual Report includes: the Integrated Management Report, the Consolidated Financial Statements, the Individual Financial Statements, and the Corporate Governance Report. The Integrated Management Report is structured in two parts. The first provides the reader with an overview of NOS' identity, presenting its purpose and values, the Group's structure and respective governance model and its value creation model, which has been adjusted from the previous year to reflect more clearly the capital used and the value created for stakeholders. In this first part, NOS also discloses the major milestones of its strategy and its operational and financial results. The second part of the Integrated Management Report presents, in greater detail, NOS' management model, the initiatives implemented, and the results obtained in 2023, disclosing non-financial information about NOS'operation and value chain, in an approach consistent with the previous year's report. The Integrated Annual Report has been prepared in accordance with the legal requirements established in the Commercial Companies Code. It also complies with the requirements established in Decree-Law 89/2017 of 28 July (DL 89/2017). It voluntarily follows the 2021 version of the Global Reporting Initiative (GRI) sustainability reporting standards and has been prepared in accordance with these standards. The report also discloses the management practices, initiatives and performance associated with United Nations Global Compact principles and Sustainable Development Goals (SDGs). The importance of climate to NOS has led to this year's report also presenting the vision of NOS's adoption of the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), including a correspondence table for the content disclosed in the annexes. The full content of this report, covering both financial and sustainability information, has been subject to independent verification by Ernst & Young Audit & Associados, S.R.O.C., S.A., whose reports are annexed to this report. Regarding sustainability information, this verification assessed the conformity and reliability of the sustainability information disclosed in this report, in accordance with the GRI standards, providing an additional guarantee as to the suitability, balance and transparency of the Group's communication on its ESG actions and performance, particularly on material topics. The financial audit, conducted by the same organisation, verified the consistency between the Integrated Management Report and the Financial Statements. Contact for questions or feedback on the report We are happy to answer any questions you may have upon reading this report, or any further information you may require. For this purpose, please contact: Investor Relations and Sustainability Department NOS SGPS, S.A., Rua Actor António Silva, nº9, Campo Grande, 1600-404 Lisboa ir@nos.pt sustentabilidade@nos.pt 1.1 1.2 1.3 NOS in Numbers 1.4 1.5 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 8 1.3 NOS in Numbers Figures for 2023 1.1 1.2 1.3 1.4 Our Value Creation Model 1.5 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 9 1.4 Our Value Creation Model NOS' value creation model has 3 main pillars: 1st - the unique assets we use as input for NOS' operations and which are the foundation of our current and future success. 2nd - the strategic framework, which guides the Group's activity, defining priorities, organised into 6 strategic pillars. Supported by NOS' Purpose, Vision, and Values, and by responsible, bold, and competent leadership, the 6 pillars of the NOS NEXT GEN Strategy respond to the challenges and opportunities of the context in which we operate. 3rd - the shared value created by our operations, which demonstrates the transversal impact and value of our solutions for financial and non-financial stakeholders. 1 The representation of the value creation model has been updated from the previous year. 1.1 1.2 1.3 1.4 Our Value Creation Model 1.5 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 10 1.1 1.2 1.3 1.4 Our Value Creation Model 1.5 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 11 1.1 1.2 1.3 1.4 1.5 Our essence: Purpose, Mission, Vision and Values 1.6 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 12 1.5 Our essence: Purpose, Mission, Vision and Values Purpose Why we exist We exist to bring life to life, expanding all the possible and imaginary connections. Vison Where we want to go To be a driving force in Portugal's progress to becoming a better society, in which everything and everyone is connected to everyone and everything in extraordinary ways. Mission What we do Our mission is to connect people, companies and institutions to everything and everyone, leveraging the most advanced technologies to provide the best experience, surprising and building empathetic and transparent customer relationships. We always act with ambition, with a challenging and transformational mindset, with the future as our inspiration and the creation of value for society as our ultimate goal. We work every day to build an increasingly capable, efficient, and innovative company, ready to lead the new technological wave. NOS is an increasingly customer-centric company, with a digital mindset, proud of its future proof technology and recognised for its ability to innovate and execute, differentiating through its strong and bold culture. Values We are committed to our customers • We strive to improve customer experience every day, putting the customer at the centre of our thinking, decisions, and actions. • We build transparent and genuine relationships, simplifying customer interactions wherever possible. We want more • We have the will to lead, to always do better and go beyond. • We operate with the determination and enthusiasm necessary to achieve success. • We are action-focused and swift to act. We do what no one else has done • We anticipate the future and change. We challenge the status quo, valuing different opinions. • We have the courage and enthusiasm to test new solutions, without fear of failure and we learn from our mistakes. We take responsibility • We act with integrity. • We act on trust and encourage a sharing and collaborative working environment. • We are autonomous and know how to assume individual and collective responsibility for our options and decisions. We value our people • We invest in the development of our potential and learning. • We take advantage of the opportunities we create and acknowledge achievements and merit. We build a better future • We create with impact, generating value for ourselves, for those we are connected to and for the community. • We contribute, through our actions, to the resolution of environmental and social challenges. 1.1 1.2 1.3 1.4 1.5 1.6 Activity and Portfolio 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 13 1.6 Activity and Portfolio NOS is the largest telecommunications and entertainment group in Portugal. Through our operations we are connected to a world that connects us all. Telecommunications NOS Comunicações offers state-of-the-art fixed and mobile television, internet, voice, and data solutions for all market segments - Residential, Private, Business and Wholesale, and is a leading provider of Pay TV, Next Generation Broadband services and cinema distribution and exhibition in Portugal. NOS offers convergent multidevice services which aim to provide the best user experience, nationwide. In the business market it offers a broad portfolio of telecommunications solutions, tailored to the needs of each sector and business profile, complemented by ICT, IoT and cloud services, among others. Media & entertainment NOS Cinemas, with 214 screens, is the leading Cinema exhibitor In Portugal and was first chain in Europe to become fully digital and one of the first worldwide to use technologies such as IMAX, 4DX, XVision and ATMOS. NOS Audiovisuais operates in the audiovisual distribution market. It is the leading content distributor in the Portuguese market and ensures, through the acquisition and management of exhibition rights, the distribution of films and series from independent producers and major studios, for cinema, audiovisual platforms, and television. The NOS Universe Our portfolio of companies allows for greater specialisation of our activities and the optimisation of our resource management. 2 More detailed information about our activity areas is provided at note 1 and note 50 of the Consolidated Financial Statements 1.1 1.2 1.3 1.4 1.5 1.6 Activity and Portfolio 1.7 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 14 Our business areas We are the largest telecommunications and entertainment group in Portugal. In addition to the telecommunications and media & entertainment businesses, NOS has developed a number of adjacent businesses such as "NOS Alarmes", in partnership with Securitas Portugal, a targeted advertising business - "Playce" and an insurance business for handsets, invoicing and travel. In 2023, NOS autonomised its' dedicated IT consultancy business, creating "Ten Twenty One". 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Our Strategy 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 15 1.7 Our Strategy NOS NEXT GEN Strategic Pillars NOS NEXT GENERATION strategic priorities establish the guidelines to achieve unequivocal market leadership and sustained competitiveness. Execution has led to superior results, ahead of the market and the sector. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Our Strategy 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 16 Strategic Execution Solid operating performance remained a catalyst for positive financial results in 2023. We highlight below the major milestones of the 2023 strategic execution, in each of the 6 strategic pillars. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Our Strategy 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 17 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Our Strategy 1.8 1.9 2023 Annual Integrated Report 01 02 03 04 18 Trends which impact the business 3 NOS regularly analyses macro-trends - geopolitical, economic, and social, to understand potential impacts on the business and define the most value accretive strategies. In 2023, from the external environment, we highlight: • Volatility, economic uncertainty, and inflation; • Armed conflicts and international wars; • The negative impact of energy and raw material costs on the business sector and consumption. In the telco sector, the market in which we operate, we recorded: • Increased need for connectivity between people, machines and devices, and the importance of AI; • Growing competition for talent; • Consolidation of partnerships and strategic alliances; • Increased demand for more reliable, faster, convergent, and secure solutions, particularly personal data security; • Constraints in the supply chain. NOS's growth strategy is influenced by macroeconomic trends, the national, European, and international external environment, particularly the international markets which impact our value chain. NOS continuously analyses the impact of the external environment on the business and adjusts its strategy whenever necessary, ensuring continued value creation for shareholders and other stakeholders. Highlights from 2023: • Uncertainty associated with geopolitical tensions remains - continued conflict between Russia and Ukraine, and the outbreak of war in 2023 between Israel and Hamas, as well as other international armed conflicts. • Economic slowdown - The European economy is an area of global economic contraction. • Slowdown in the Portuguese economy's growth rate - slowdown in economic activity associated with the slowdown in private consumption, penalised by rising interest rates and inflation. Slowdown in exports, due to the cooling of the main markets for Portuguese exports. • Inflationary pressure - during 2023, inflation had a relevant impact on the economy and, consequently, on our operation, albeit starting to show some relief later in the year. • Constraints in supply chains - constraints in logistics chains remain, with an impact on associated costs, particularly energy costs. • Risk of cyber-attacks - the risk of cyber-attacks and their impact is ever present. • ESG - increased ESG relevance, becoming one of the factors influencing public policies and the European financial system. 3 The information in this section should be complemented with the more detailed information provided in the External Context section. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Governance Model 1.9 2023 Annual Integrated Report 01 02 03 04 19 1.8 Governance Model Shareholder Structure Distribution of the Company's capital on the 31st of December 2023 Structure and Composition of the Governing Bodies 4 NOS uses the empowered Latin governance model, to ensure the company's operational success and a transparent and appropriate dialogue between the various governing bodies and its shareholders and other stakeholders. The model ensures compliance with the separation of powers, enabling monitoring and supervision by non-executive members. NOS Board of Directors is the corporate body responsible for managing the Company's business, delegating to the Executive Committee the necessary powers for the day- to-day management of the Company. In addition to the Board of Directors, NOS's governing bodies include the Board of the General Meeting, the Remuneration Committee, the Statutory Independent Audit Board, and the Statutory Auditor. 4 For more information on the structure, composition and functioning of the company's governing bodies, see points 17, 21, 27 and 29 of the Corporate Governance Report, as well as the respective annex, and and on the institutional page of our website (Corporate Governance (nos.pt)). 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Governance Model 1.9 2023 Annual Integrated Report 01 02 03 04 20 The members of each Governing Body are elected for a period of 3 years. A new term of office - 2022-2024 - began in 2022, following the Shareholders' General Meeting held in April 2022. In 2023, the NOS Board of Directors self-assessed the functioning of this body and its internal committees for the 2022 fiscal year, endeavouring to guarantee increasingly efficient and informed performance. It also endeavoured to ensure that topics such as diversity in the composition of bodies, skills, expertise, and representation are given due priority and addressed within these bodies. The Governing Bodies, Commissions and Committees supporting the Board of Directors and their composition as of 31 December 2023 are as follows. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Governance Model 1.9 2023 Annual Integrated Report 01 02 03 04 21 Composition of the Board of Directors On the 31st of December 2023, the Board of Directors was composed of 15 members, providing NOS with all the experience, expertise and skills required to execute the Group's strategic framework. Chairman of the Board of Directors COB | Non-executive First appointment: 1 October 2013 (COB since 27 Jan 2020) No. of Terms: 4 Te lc o ex p er ie n ce : 11 years Member of the following Committees: Appointments and Assessments Committee (Chairman) Audit and Finance Committee (Member) Chief Executive Officer, CEO Chairman of the Executive Committee First appointment: 1 October 2013 No. of Terms: 4 Te lc o ex p er ie n ce : 26 years Responsibilities: Strategy and Business Development; Corporate Communication; Transformation; NOS Madeira and NOS Açores Ângelo Paupério Miguel Almeida Chief Financial Officer, CFO Executive Board Member First appointment: 21 September 2007 No. of Terms: 6 Te lc o ex p er ie n ce : 26 years Responsibilities: Financial and Assurance Services; Corporate Finance; Data Protection Officer; Investor Relations & Sustentabilidade; Planeamento e Controlo de Gestão; Compras Executive Board Member First appointment: 29 de June 2017 No. of Terms: 3 Te lc o ex p er ie n ce : 21 years Responsibilities: Customer Service, Back-office, and Processes; R&M, Technical Support, Logistics and Terminal Management; People and Organisation; Cinemas; Audiovisuals; Content; Advertising Member of the following Committees: Ethics Committee (Member) José Pedro Pereira da Costa Luís Nascimento Chief Technology Officer, CTO Executive Board Member First appointment: 16 April 2016 No. of Terms: 3 Te lc o ex p er ie n ce : 19 years Responsibilities: Quality & Transversal Projects; Mobile & Fiber Centric; Operations; Information & Innovation Services Executive Board Member First appointment: 1 October 2013 No. of Terms: 4 Te lc o ex p er ie n ce : 25 years Responsibilities: Centre for Business Transformation; Business Solutions; B2B Direct Sales; Business Channels; Wholesale Jorge Graça Manuel Ramalho Eanes Chief Compliance Officer, CCO Executive Board Member First appointment: 15 January 2021 No. of Terms: 2 Te lc o ex p er ie n ce : 26 years Responsibilities: Audit, Risk and Compliance; Market & Customer Intelligence; Legal and Regulation Member of the following Committees: Corporate Governance and Sustainability Committee (Member) Executive Board Member First appointment: 15 January 2021 No. of Terms: 2 Te lc o ex p er ie n ce : 17 years Responsibilities: Brand & Communication; B2C Segment Management B2C Product; B2C Sales; CRM & Customer Experience; Alarms Filipa Santos Carvalho Daniel Beato Non-Executive Board Member First appointment: 1 October 2013 No. of Terms: 4 Te lc o ex p er ie n ce : 11 years Member of the following Committees: Corporate Governance and Sustainability Committee (Chairman) Non-Executive Board Member First appointment: 16 April 2016 No. of Terms: 3 Te lc o ex p er ie n ce : 13 years Member of the following Committees: Audit and Finance Committee (Chairman) Appointments and Assessments Committee (Member) Cláudia Azevedo João Dolores Non-Executive Board Member First appointment: 23 March 2020 No. of Terms: 2 Te lc o ex p er ie n ce : 7 yeas Member of the following Committees: Audit and Finance Committee (Member) Non-Executive Board Member First appointment: 21 April 2022 No. of Terms: 1 Te lc o ex p er ie n ce : 2 years Member of the following Committees: - Cristina Marques Eduardo Verde Pinho Non-Executive Board Member First appointment: 23 March 2020 No. of Terms: 2 Te lc o ex p er ie n ce : 11 years Member of the following Committees: Audit and Finance Committee (Member) Appointments and Assessments Committee (Member) Non-Executive Board Member First appointment: 1 October 2013 No. of Terms: 4 Te lc o ex p er ie n ce : 11 years Member of the following Committees: Ethics Committee (Chairman) Corporate Governance and Sustainability Committee (Member) Ana Rita Rodrigues António Lobo Xavier 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Governance Model 1.9 2023 Annual Integrated Report 01 02 03 04 22 Non-Executive Board Member First appointment: 27 November 2012 No. of Terms: 5 Te lc o ex p er ie n ce : 14 anos Member of the following Committees: — Catarina Van-Dunem * On the 10th of November 2023, José Pedro Faria Pereira da Costa resigned from his position as Executive Member of the NOS Board of Directors, with effect from the 31st of December 2023. On the same date, the Board of Directors co-opted José Alexandre Koch Ferreira as an executive Member of the Board of Directors to serve until the end of the current 2022-2024 Term, with effect from 1 January 2024. Changes to the Composition of the Board of Directors - Executive Committee On the 10th of November 2023, the Board of Directors decided to co-opt José Alexandre Koch Ferreira as a Member of the Board of Directors to serve until the end of the current term (2022-2024). The new director will also be appointed a member of the Executive Committee, which remains composed of seven members. Composition of the Statutory Independent Audit Board On the 31st of December 2023 Chairman of the Statutory Independent Audit Board First appointment: 8 May 2019 No. of Terms: 2 Te lc o ex p er ie n ce : 5 years Member of the following Committees: Ethics Committee (Member) Statutory Independent Audit Board Member First appointment: 26 April 2016 No. of Terms: 3 Te lc o ex p er ie n ce : 8 years Member of the following Committees: — José Pereira Alves Patrícia Te ix ei ra Lo p es Statutory Independent Audit Board Member First appointment: 21 April 2008 No. of Terms: 5 Te lc o ex p er ie n ce : 16 years Member of the following Committees: — Statutory Independent Audit Board Member First appointment: 8 May 2019 No. of Terms: 2 Te lc o ex p er ie n ce : 5 years Member of the following Committees: — Paulo Mota Pinto Ana Luísa Fonte Responsibilities matrix of the Board of Directors The responsibilities of the executive members of the Board of Directors are regularly updated and reinforced through training provided by the NOS Campus Corporate Academy, among which we highlight, in 2023, training in Advanced Analytics, specifically dedicated to emerging Generative AI technologies (FAAST Programme - more information in section 3.3.6 "Talent Management" in this report). Chief Financial Officer, CFO Executive Board Member First Designation: 1 January 2024 No. of Terms: 1 Responsibilities: Financial and Assurance Services; Corporate Finance; Data Protection Officer; Investor Relations & Sustainability; Planning and Management Control; Procurement José Koch Ferreira 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 23 Unequivocal leadership in 5G, combined with the best solutions and services, are driving strong operating performance, reflected in positive financial results. The positive operating and financial results generated in 2023 position NOS as a model and benchmark for the creation of shared value for shareholders, customers, employees, and partners, and, globally, for the digital transition of the portuguese economy and the development of Portuguese society. 1.9 Doing what hasn’t been done before Summary Future focus • Complete the 5G and fibre network investment plan to continue leveraging the potential of next-generation networks with new services. • Continue to expand the portfolio of innovative solutions and adjacent services which represent significant growth avenues for the Group. We create shared value Contribution Growth in consolidated EBITDA AL (vs 2022), totalling 603.2 million, with an increase in the EBITDA AL margin of 1.7% Net additions in 2023, increasing total RGU's to 11.014 million 5.0% Growth in NOS consolidated revenues (vs 2022), totalling 1,597.5 million 1.7% Performance highlights 231 k 94% Population covered by NOS' 5G network Market Recognition NOS 5G and mobile network voted the best in the market by independent agencies and renowned Institutions (Ookla©; Open Signal and Deco Proteste). Technological supremacy complemented by innovative solutions Ground-breaking implementation of the new core data for 5G Stand Alone. Launch of eSIM Youth by WTF technology, simplifying the creation of telephone numbers in a 100% digital environment. Investment in innovation and exploration of new business segments NOS among the top 5 companies which most invest and apply for patents. We launched services based on AI, IoT, data analytics, cybersecurity, smart cities, and security solutions: new areas and market segments with growth potential. Highlighted Facts 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 24 Recognitions Market recognises technological supremacy and excellence of NOS solutions Our efforts and strategic choices have been consistently recognised, validating the path we have been following and the work of the entire NOS team. In 2023, the market once again recognised NOS as the 5G technological leader in Portugal, in a year in which the overall quality of our network and services was widely acknowledged. We continued to be recognised by consumers, customers and other entities for our service experience, innovation and ESG performance. Market Recognition Specialised Technical Reviews Ookla© awards NOS' 5G network as the fastest in Portugal and Europe For the third consecutive year, Ookla© awarded NOS's 5G network as the fastest in Portugal, confirming the success of its commitment towards leading 5G from the outset. In 2024, for the first time, NOS' mobile network was considered the fastest in Europe. OPEN Signal crowns NOS' mobile network the best in Portugal NOS is the most awarded operator in the mobile network experience rating in Portugal. NOS came first in categories such as 5G availability and coverage and consistent experience quality. It is also the leader in overall download and upload speed experience. Consumer Voice NOS voted best operator by consumers Consumers voted NOS the best operator in 5 categories associated with the user experience of NOS solutions: Safe Browsing, voted best internet service; UMA TV NOS voted best TV experience; App NOS TV voted best TV App; NOS Wi-Fi Total voted best Signal Extender; Alarme Inteligente NOS | Securitas voted best security service. NOS has the best mobile internet NOS is the operator with the best mobile internet, according to DECO PROTESTE. NOS leads in average download and upload speeds, as well as access to streaming services and web browsing. Best Site.PT 2023 Award NOS won the Best .PT Site award from ACEPI - Digital Economy Association. Consumer Choice Awards 2023 NOS was recognised in the following categories: Internet, Mobile Network and TV Experience. NOS Alive, organised by event promoter Everything Is New and sponsored by NOS, won the award in the "Urban music festivals" category. WOO was recognised in the "Mobile tariffs" category. NOS cinemas were recognised for the 9th consecutive year. WTF - 2023 Recommended Brand WTF won the " 2023 Recommended Brand" award in the "Mobile and Fixed Telecommunications" category, awarded by the Portal da Queixa by Consumers Trust, a recognition which, through consumer votes, distinguishes brands which have established close and trusted relationships with their customers. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 25 Partner Recognition Technological Partners The Biggest and Best of Technological Portugal NOS won the Innovation category at the "The Biggest and Best in Technological Portugal" awards, organised by Exame Informática. Leader in Value Creation NOS was awarded the "Leader in Value Creation" prize by BT Sourced. It was also considered a "Bronze sponsor" by BT Sourced. Other Partners NOS enters the Guinness World Records NOS' Wi-Fi Total connects 127 people in a video call and gets NOS into the Guinness World Records for breaking the record for the "largest number of people simultaneously in an online video". Best Contact Centers 2023 NOS was once again recognised in the "Telecommunications" category in the 2023 edition of the APCC Best Awards Trophies: Silver Award: Nos Fidelização | Manpower TBO Bronze Award: NOS 16990 | Manpower TBO / Randstad / Rhmais. ESG Recognition SUSTAINALYTICS In 2023, NOS' risk level decreased compared to the previous year (14.6 in 2023 vs. 15 in 2022) and assumes a low risk assessment of suffering significant financial impacts from environmental, social, and corporate governance factors. CDP Climate Change NOS was assessed by CDP - Disclosure, Insight, Action at the Leadership level for performance and transparency in the fight against climate change. Bloomberg Gender-Equality Index (GEI) NOS is a member of the Bloomberg Gender- Equality Index (GEI) for the second consecutive year, with a score of 84.11 %, above the overall average of companies on the index (73 %), the Communications sector (73.53 %) and the participating Portuguese companies (81.77 %). MOODY'S ESG Solutions In 2023, NOS scored 64 out of 100, a score above the sector average in all three ESG dimensions. MSCI ESG Ratings In 2023, Morgan Stanley Capital International (MSCI ESG ratings) gave NOS a C rating. ISS Quality Score In 2023, NOS improved its assessment in the social and environmental dimensions, with a score of 3 and 4 respectively. In the governance dimension it scored 10. Corporate Sustainability Assessment (CSA) NOS's 2023 S&P Global assessment scored 59 points out of 100, reflecting an increase in all ESG dimensions. We recorded an increase of 10 points in the social dimension, 7 points in governance and 1 point in the environment. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 26 External Context NOS' strategic priorities respond to its external environment and to global and national trends. NOS aims, with its characteristic dynamism, to transform challenges and risks into growth opportunities, generating value in the short, medium, and long term. As a result of this positioning and due to its relevance in the Portuguese telecommunications market, NOS ultimately influences the context in which it operates. This positive and decisive influence in an already cutting- edge market has been leveraged by an ambitious investment plan and the leading role it has taken in developing the 5G network in Portugal. Overview of the national and European telco market with Portugal at the forefront Continuous sector investment The Portuguese telecommunications market is at the forefront of the European market. It stands out for its high and continuous investment in the very latest technology, generally above the European average. CAPEX to revenue ratio for telecommunications sector (%, Source: New Street Broker Research) Sector investment is a strong contributor to the national economy. According to ANACOM, global investment in the electronic communications sector totalled 1.5 billion euros in 2022, which corresponds to more than 3% of Portugal's Gross Fixed Capital Formation for the same year, consistent with the figures for previous years. Weight of overall investment in the Electronic Communications sector in Gross Fixed Capital Formation (%, Source: Anacom) Leadership in coverage and connectivity in the European context The sector's heavy investment, with a major contribution from NOS, is reflected in Portugal's leading position in Europe in terms of coverage and connectivity. In fixed network coverage, it ranks well above the European average, with 93 % of Portuguese houses covered by new generation networks compared to the European Union average of 73 %. Within these technologies, more than 90% of houses in Portugal are covered by fibre. NOS' strong contribution for Portugal's cutting-edge network coverage landscape Overall high-capacity fixed network (VHCN) coverage (FTTH and DOCSIS 3.1 coverage) (% househoulds, 2022, Source: DESI 2023) 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 27 Fibre-to-the-Premises (FTTP) coverage (% of homes, 2022, Source: DESI 2023) The example set in the fixed service is followed in the mobile service. Despite being one of the last countries to launch 5G mobile services, due to a lengthy frequency auction, Portugal is among the countries with the highest percentage of the population covered by a 5G network. Based on the latest public data available, reported by the European 5G Observatory, with reference to September 2023, more than 75% of the Portuguese population is covered by a 5G network. By the end of 2023, NOS' 5G coverage of the population was already over 93 %, reflecting the company's strong strategic investment in this new technology. Meanwhile, the 4G network continues to play a significant role in mobile communications, with almost the entire country covered by this technology, in line with other European countries, and maintaining its key role while the 5G network is being developed. In terms of connectivity, Portugal has a unique position, with high penetration of both fixed and mobile services among the Portuguese and a growing trend. In fixed connections, over 77 % of households have a high-speed fixed broadband subscription, namely with a speed of over 100Mbps. Percentage of households with a fixed broadband subscription of at least 100 Mbps (% of households, 2022, Source: DESI 2023) In an analysis by type of offering, Portugal is characterised by a high penetration of bundled services. By the end of the year, 93 out of 100 Portuguese households had bundled services (source: ANACOM, "Bundled Services Q3 2023"), with more than 50 % of bundled service subscribers having 4P/5P bundles. For the other services, penetration is also quite high. For pay-tv service, penetration among Portuguese households is 97.8 %, showing the importance of this service in Portugal (ANACOM, " Pay-Tv 3Q 2023 "), while for fixed broadband, the figure reached 93 out of 100 households (ANACOM, " Internet Service at a Fixed Location 3Q 2023 "). NOS' significant contribution to the national 5G coverage landscape through heavy investment driven by the ambition to be the leader in this technology 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 28 Penetration of fixed services (%, 3Q 2023, Source: ANACOM) In mobile service, penetration is 123.2 per 100 inhabitants (ANACOM, "Mobile Service 3Q 2023"), considering mobile accesses which are effectively used and excluding accesses exclusively for data services and Internet access ("PC/tablet/pen/router cards"). Moreover, ANACOM reported that there were 2.05 million 5G mobile Internet accesses in November 2023, accounting for 19.8 % of total mobile Internet accesses in Portugal. With this connectivity and coverage data, it is possible to be concluded that the telecommunications sector in Portugal continues, and is increasingly, providing the best technology and service to the country and the Portuguese, with NOS contributing decisively to this reality. Change in Market Structure On 30th September 2022, Vodafone announced the purchase of NOWO, the fourth largest operator in Portugal, through the takeover of its holding company, Carbonitel. The final decision on the operation is awaiting analysis by the Competition Authority, which is expected to be published in 2024. In addition, following the spectrum acquisition in the 2021 auction, Digi Portugal, a subsidiary of Romanian telecommunications group Digi Communications, is due to enter the market. Macroeconomic context 2023 was marked by the continuation of the inflationary cycle for the several types of products, from raw materials to end products. In response to the high levels of inflation, the European Central Bank continued its program of interest rate increases in an effort to slow down rising prices. As a result, borrowing costs increased, along with the rising cost of products & services, putting pressure on households and companies. Some economies in Europe showed signs of recession in 2023, particularly major economies such as Germany. The slow recovery in consumption and production has contributed to the slowdown in the post-Covid 19 economic recovery. Although there has been a recovery compared to the figures at the end of 2022, the level of consumer confidence is still relatively low compared to the pre-war in Ukraine period. Consumer confidence index, monthly evolution (balance of external responses, Source: INE) The national Gross Domestic Product (GDP) is expected to grow by 2.1 %, according to Banco de Portugal's expectations. This figure is below the forecasts of the other organisations: i) International Monetary Fund (IMF), with 2.3%; ii) European Commission (EC) with 2.4%; and iii) Portuguese Public Finance Council with 2.5%. The forecast for Portugal's GDP (+2.1%) is above the Euro Zone figure of 0.7 % - this strong slowdown could be a challenge for the national economy, considering this is one of Portugal's main trading partners. Evolution of Gross Domestic Product (Source: Banco de Portugal) Banco de Portugal is predicting that the unemployment rate will rise to 6.5 % in 2023. For the following years, the unemployment rate is expected to rise to 6.7 % in 2024 and 6.9 % in 2025. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 29 Evolution of the Unemployment Rate (Source: Banco de Portugal) Private consumption in turn benefits from real disposable income gains resulting from moderating prices and rising employment and wages but is constrained by rising interest rates. Private consumption is therefore expected to grow by 1.0 % in 2023, a slowdown compared to 2022. A recovery is expected in 2024 and 2025. The average inflation rate for 2023 reached 4.3% according to the National Statistics Institute. The figure shows a slowdown compared to the previous year, a possible sign that policies aimed at controlling rising prices are working. The slowdown in the inflation rate is expected to continue - an average inflation rate of 2.9% is expected for next year, and then to normalise to previous figures in 2025, recovering the 2.1% figure that year. Evolution of Private Consumption (Source: Banco de Portugal) Regulatory Framework NOS monitors the evolution of the overall legal and regulatory framework, with special focus on the sectoral legal and regulatory framework which applies to it. This monitoring is aimed at incorporating the regulations into its operations and improving the threat and opportunity management this framework represents for its competitive position in the Portuguese market. Regarding regulatory decisions, over the course of 2023 there have been several events that have or will have repercussions on telecoms operators, which we highlight below. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 30 European discussion on the sustainability of the European electronic communications sector Throughout 2023, there was intense discussion at European level about the sustainability of telecommunications operators' operations. More specifically, at first the European Commission, in the words of its Vice-President, Internal Market Commissioner Thierry Bréton, raised the issue of Over the Top (OTT) subsidising European operators' investment in very high capacity fixed and mobile networks. This concern was raised in light of the ambitious coverage targets for new generation infrastructures, both fixed and mobile, of the Digital Decade Programme 2030, and was included in the European consultation "The future of the electronic communications sector and its infrastructure", which occurred between February and May 2023. The proposal for this contribution was strongly contested, particularly by net neutrality supporters, OTTs, and the audiovisual industry, the latter due to fears this measure could jeopardise the principle of net neutrality. The proposal for this contribution was strongly contested, particularly by net neutrality supporters, OTTs, and the audiovisual industry, the latter due to fears this measure could jeopardise the principle of net neutrality. As a result, in the last quarter of 2023, Commissioner Thierry Breton announced the launch of a new piece of legislation called the Digital Networks Act, which aims to guarantee a legal framework that allows European operators to build scale and overcome the existing barriers in the European market to the creation of a true single market. The text of this proposal is only expected to be known in 2024 and should become a centrepiece of discussion in the new Commission's term of office, starting in the last quarter of 2024. However, it is expected to adopt a more benign view towards consolidation movements in the electronic communications market, as well as some regulation, particularly regarding the acquisition of spectrum, disconnection of legacy networks or security. Gigabit Infrastructure Act Also at European level, it is worth highlighting the approval process for the Gigabit Infrastructure Act Regulation, which is expected to be completed in the first quarter of 2024. This Regulation replaces Directive 2014/61/EU of 15 May of the European Parliament and of the Council, also called the Broadband Cost Reduction Directive, which was approved 10 years ago to streamline and harmonise network construction processes in the European market but which, after almost 10 years, has proved to be insufficient. In practice, the European Commission believes that the directive's instrument gave member states too much leeway in the transposition process, which undermined the objectives of harmonisation and the removal of administrative obstacles. Therefore, in 2023, it proposed a Regulation aimed at addressing the weaknesses identified over the last 10 years. Despite the difficulties still persisting, the national legislative system in this area is among the most advanced in Europe, so the challenge posed by the GIA is to ensure that, by virtue of a "compulsory" harmonisation mechanism, there is no deterioration in national conditions for network construction, while at the same time it is expected this Regulation to be an opportunity to address the weaknesses that persist at national level. At the end of 2023, the Regulation proposal was already being negotiated by the trialogues (European Council - European Parliament - European Commission), and at the beginning of February 2024 an agreement in principle was announced for the final text of the Regulation. As of the date of this report, not much detail is yet known about the approved version, but there are encouraging signs suggesting the final version of the Regulation will not clash with the factors behind the success of national legislation, specifically: speedy licensing deadlines, the application of the principle of tacit approval in the event of non-compliance with response deadlines by the municipality and the principle of cost-orientation in access to suitable infrastructure. Zero rating offers in Portugal ANACOM has released a final decision on zero-rating offers in Portugal, with a significant impact on these offers. In this context, we highlight the imposition of the termination of zero-rated offers for new subscriptions within a maximum of 20 working days (30 March 2023) and the amendment of offers for ongoing contracts up to 90 working days (12 July 2023) after the communication of the decision, with customers with an ongoing loyalty period being given the option of maintaining zero-rated offers until the end of that period. This decision does not prevent the maintenance of offers covered by specific provisions of the Regulation on specialised services. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 31 Access to fibre and ducts ANACOM has approved a decision on the market analysis for the access to fibre and ducts at the end of 2023. In this decision, the regulator chose to identify two markets: one regarding suitable infrastructures, which includes the Altice Group's ducts and posts, and the other covering new generation fixed networks, whether fibre or coaxial, We highlight significant changes to the document initially submitted for market consultation, such as the reduction in the number of parishes where Altice's fibre is regulated, the exclusion of NOS and NOWO as entities with Significant Market Power and the type of offer to be provided for fibre access by the Altice Group. On the other hand, the concept of reasonable prices for access to fibre networks was maintained. Also in this decision, the regulator decided that The costing system for ducts and posts will be discussed in a consultation, as early as 2024. On the other hand, the end of the RUO and Rede ADSL.PT offers is scheduled for the end of 2026, while the provision conditions for the ORAC and ORAP offers remain unchanged. Dedicated circuits (including cam and inter-island) ANACOM approved decisions on (1) wholesale markets for access to dedicated capacity and (2) leased lines transit segments. ANACOM considered that MEO continues to hold a Significant Market Position (SMP) in CAM circuits and extended the scope of SMP in inter-islands to circuits in the Western group, following the takeover of Fibroglobal by FastFiber. In addition, ANACOM imposed a revision of the tariffs for CAM and inter-island circuits. On terrestrial circuits, MEO no longer holds SMP in the market for transit segments between MEO exchanges, removing the obligation to provide the respective wholesale offer (RELLO) on the currently named Non- Competitive Routes. ANACOM justified this decision with the generalised expansion of alternative operators' transport networks. In the access segments, ANACOM reduced to 2020 the parishes where MEO has SMP, which constitute the universe of parishes where MEO has more than 50 % market share. In the remaining 1,072, parishes obligations to provide access to wholesale offers were removed. GEO.ANACOM Platform ANACOM has launched GEO.ANACOM, the platform provided for by Decree-Law 40/2022, where users can consult georeferenced information on the coverage of fixed, mobile and satellite networks in Portugal. The platform allows users to visualise, for a given point/address, the coverage of fixed and mobile networks, namely the operators available, the technologies and the download and/or upload speeds. 5G obligations Operators who acquired 5G spectrum in the 700 MHz and 3.6 GHz bands were subject to coverage and network development obligations. In December 2023, ANACOM approved a decision on the methodology for assessing the obligations provided for in the 5G Auction Regulation. In accordance with the methodology approved by the regulator, on 30 January 2024, NOS reported the population coverage recorded at the end of 2023 for each of the parishes considered to be low density, and for each of the parishes in the Autonomous Regions of Madeira and the Azores. Reporting on network development obligations associated with spectrum in the 3.6 GHz band and concerning the installation of antennas operating in said band, including those requested by previously identified entities such as hospitals or universities, should only occur in January 2025. High-risk suppliers In May 2023, the Security Assessment Committee ("SAC"), created by the Electronic Communications Act, adopted resolutions on the security of 5G network equipment. SAC has defined the criteria for classifying 5G network equipment suppliers as "high risk". The criteria include, among others, whether the 5G network equipment supplier is resident in, or in any other relevant way tied to, a country outside the EU, NATO, or OECD. SAC has also identified the relevant 5G network asset groups for the application of potential restrictions. NOS is analysing the relevant deliberations on the security of 5G network equipment and is engaged in discussions with the authorities to safeguard the security and resilience of communications networks, as well as the best interests of its customers. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 32 Provision of statistical information The regulator has approved an amendment to the regulation on the provision of statistical information, which systematises the deadlines and requirements to be complied with by electronic communications operators. The amendment to the regulation includes a first quarterly report with the new rules for data from the 1st quarter of 2024, to be submitted in April 2024. The first annual report under the new regulation will be for 2024, to be submitted in February 2025. As for the quarterly indicators for international roaming by parish, the first report will be for the 3rd quarter of 2024, to be submitted in October 2024. Public tender for white spots In a statement published on 23 November by the Portuguese Council of Ministers, it was announced that the launch of the international public tender for the installation, management, operation, and maintenance of fibre-optic networks in white spots had been approved, with an overall investment of 425 million euros. This investment will be partly funded by European funds, and it is planned that the public tender will be organised in lots (North, Centre, Lisbon, Algarve, Alentejo, Madeira and Azores), which can be bid by different wholesale operators. 700 MHz allocation ANACOM has released the conclusions of the public consultation on making spectrum available in the 700 MHz bands - duplex gap and guard bands launched at the end of 2022. The regulator has not established a specific timetable for the spectrum allocation but has indicated it will define the access and use conditions in due course. ANACOM stated that it will continue to consider the most appropriate schedule for making the band available, which could be phased in according to the evolution of market needs. Numbering regulation 49 ANACOM has approved the Regulation on the designation of the '49' numbering range in the National Numbering Plan (NNP) for use in M2M services, mobile broadband services, and e-call. The regulation establishes the conditions for assigning and associating the rights of use for numbering resources in the '49' numbering range in the National Numbering Plan (NNP) for the provision of the Transmission Service used for the provision of M2M services and the Mobile Internet Access Service. This range may also be used for e-Call services. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 33 Operating Results NOS is a brand that is increasingly present in the lives of people and companies. Its unequivocal 5G leadership, combined with its commitment to offer the best solutions for customers, drives strong commercial dynamics, with growing levels of customer satisfaction. NOS' strong operational performance in 2023, with 231k positive net adds, reflects the commitment to offer customers the best solutions across different areas. The best mobile network in the country, with prominent 5G leadership, a state-of-the-art fixed network with 74.8 % FttH coverage, and a comprehensive range of innovative solutions and equipment. The best technology, services and equipment led in 2023 to increased customer satisfaction and positve net adds across all segments, with total services provided increasing by 2.1 % to 11.014 million. Market reconfirms NOS as the operator with the best performing network. In 2023, NOS continued to lead in 5G, one of the Group's strategic axis, as a result of the completion of its major investment plan, conducted in a fast-paced timeframe. By the end of 2023, NOS had more than 4,200 5G stations deployed in 305 municipalities, covering 94 % of the population. The investment in the 5G network expansion has enabled superior operating performance, recognised by various external and independent organisations, which voted NOS the best operator in Portugal in various parameters For the third time in a row, Ookla© recognised NOS' 5G network as the fastest in Portugal. NOS' leadership was also recognised by OPEN Signal for the consistency of the mobile experience and network speed. OPEN Signal voted NOS as the best global mobile network, ranking first, or joint first, in 13 of the 14 criteria rated. The superior performance of the NOS network was also recognised in DECO PROTESTE's 'Melhor do Teste – Internet Móvel', which voted NOS mobile network the best. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 34 The supremacy of its network infrastructure has allowed NOS to capitalise on its potential by launching new solutions. One such example, in 2023, was the ground- breaking introduction of the new core data for 5G Stand Alone (5G SA), which enables the provision of services with differentiating features. Examples include ultra-low latency, guaranteed quality of service ("network slicing"), private networks and the ability to massively support IoT equipment, among others. The ultra-low latency provided, under 10 Ms, extends the range to applications with real-time interaction needs, such as remote machine control, where a few milliseconds difference is critical. Reduced latency is also central to augmented/virtual reality and gaming applications, improving quality of experience for end users. The new data architecture was developed in partnership with NOKIA, and the voice and customer profile component with Ericsson. The investment made in our mobile network led to the recognition as the the best moble network in the country: NOS has the fastest, most reliable, secure, and highest capacity network. This superior performance has had commercial repercussions, with a continued increase in mobile customers, with 183 thousand services net additions for a total of 5.917 million at the end of 2023. Post-paid mobile services recorded positive net additions, more than offsetting the decrease in pre-paid mobile services, with more irregular behaviour and lower added value. Post-paid mobile services accounted for 65.7 % of total mobile services, an increase of 2.5pp compared to 2022. By the end of 2023 our gigabit fixed network covered 5.427 million homes and ensures high quality internet network, supported by state-of-the-art equipment. In the fixed network, NOS continued investing in our gigabit fixed network which enabled it to provide customers with a high-quality internet network reaching more than 5.427 million homes by the end of 2023. The investment made in the network was complemented by the provision of new equipment and the launch of Wi-FI 6E technology, which improves network speed and signal consistency in the various rooms of a home or business, generating more reliable, secure, and fluid connections on the various devices. With the launch of this more advanced Wi-Fi technology, we also enabled the integration of the HomePass solution, which lets users check the network quality and customise access to the network by creating dedicated networks for guests or introducing filters for children. The quality of NOS's Wi-Fi network earned it recognition and entry into the Guinness World Records for the largest group of people to participate in a video call to date. The quality of NOS' Total Wi-Fi enabled 127 people to simultaneously join a high-quality, glitch-free video call. Convergent services continue to be favoured by consumers, with sustained leadership of Portugal's best mobile network, expansion of the FTTH network and development of state-of-the-art customer equipment driving sustained growth in RGUs The penetration of convergent and integrated services continued to be favoured by our customers, increasing by 2.4 pp, and reaching a total of 69.6% of fixed access customers. The total number of convergent and integrated customers increased by 4.4 % compared to 2022, to a total of 1.137 million. Customers subscribed an average of 5.25 services, an increase of 1.4% vs. 2022, totalling 5.975 million convergent RGUs. Total pay-tv customers totalled 1.670 million, with total net additions of 5.7 thousand. The commercial momentum in the fixed access customer segment, with total net additions of 25.4 thousand customers, more than offset the downward trend in the legacy base of satellite TV customers. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 35 Total services subscribed to in the Broadband and Fixed Voice segments also performed well, with net additions in 2023 of 28.3 thousand and 13.0 thousand, respectively. These services are typically subscribed to as part of convergent and integrated bundles, also helping to explain their good performance. The continued strategic choice to invest on innovation, technological superiority, equipment upgrades and customer experience contributed to the good operating results in 2023, with an increased number of services subscribed by customers and a 5.0% increase in fixed residential ARPU compared to 2022, to a total of 50.3 euros. Innovation The investment in network infrastructure done by NOS over the last few years has been an enabler of innovation. Through innovation, we improve our offering of services and solutions, and through it create new avenues for growth, increasing customers and revenues. The Group's sustained leadership in networks, technology and services has allowed NOS to continue to innovate and provide customers with an up-to-date portfolio of connectivity solutions which improve the lives of people, families, and businesses. NOS continues to endeavour to improve the customer experience, with one of its management objectives being to increase the attraction of new customers and the retention of current customers. In 2023, it launched solutions focusing on different moments of the customer journey. A solution was developed centred on the time of purchase and subscription, with the aim of disruptively simplifying the subscription to mobile communications services. With the launch of eSIM Youth by WTF technology, NOS has simplified the creation of telephone numbers, allowing them to be created in a 100% digital environment. Developed in collaboration with IDEMIA, it is based on a worldwide ground-breaking technology representing the evolution of eSIM technology (electronic SIM cards), allowing a single QR code to generate multiple virtual cards with different unique phone numbers. Until now, each eSIM was generated by a different QR code, and the new technology offers a previously non-existent possibility. A problem resolution solution has been developed for the after-sales process, which has a strong impact on the customer experience. With the launch of the chat bot with Generative AI, NOS is promoting customer autonomy in resolving problems they may encounter with its services. Developed by an in-house team, the virtual assistant is able to maintain a natural and dynamic conversation with customers, similar to an interaction with a human being, and is available 24 hours a day on the NOS Forum. This innovation tends to positively influence customer satisfaction and reduce churn rates. In TV services, 2023 was marked by the offering of a disruptive solution: group TV viewing. This new experience, available to 100 % of customers with the NOS APP, allows several users to meet in a virtual room to watch TV as a group, being able to chat and interact with the content. This solution, which is mainly relevant to entertainment and sports content, has been complemented by the launch of match highlights, which allows customers to browse the most relevant moments of matches, being able to directly see goals, fouls, penalties, cards awarded, among other moments. In a year which saw a record number of patent applications from Portugal to the European Patent Office (EPO), NOS Inovação is one of the Portuguese organisations to have applied for the most patents. NOS was the 3rd Portuguese company to invest the most in R&D in 2021, and the fourth with the most patents filed in key areas in 2022. Among the various applications, we highlight the registration of a USA patent for an innovative system which utilises users' zapping patterns to improve the speed and way they change channels on their boxes. There were also applications for solutions in the fields of computer vision, artificial intelligence, nanomaterials, and more appealing ways of broadcasting video content. The infrastructure superiority and the constant ambition to provide a service of excellence has been providing NOS the resources to develop, offer and extend the range of solutions and services in different business segments, such as cybersecurity, cloud, data analytics or AI, which add value to the competitiveness of companies. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 36 High-potential business segments and areas In 2023, the digital transformation of companies continued to define NOS' positioning for the business segment. We provide a telecommunications, information technology and data management solutions portfolio, leveraged by our technological assets, such as 5G, internal technical and innovation skills, complemented by world-class technological partners. Of the new services integrated into our portfolio, we highlight the launch of solutions in the areas of data analytics, virtualisation, and security. We have launched FLOW, a data analytics consultancy service which supports companies in their digital transformation process and responds to the need for data-based decision-making. FLOW is the result of a strategic partnership between NOS, a natural large-scale data producer, and LTPlabs, a specialist in advanced analytics. The application of the cross-skills from both NOS and its partner will allow companies to correlate Portuguese consumer data to optimise their decisions in various areas of the company, from marketing to operations. Realising cybersecurity is a critical challenge, today and in the future, which needs to be addressed, NOS has strengthened its operation with Fortinet's Advanced Partner and launched the Net 360º Protection solution, reinforcing NOS' portfolio in the area of online security. A complete security solution, with technology developed by F-Secure, a leader in the digital security sector. It protects NOS customers against online threats and keeps their personal data private via features such as VPN, antivirus, parental control, identity monitoring and password manager. The smart cities technological solutions NOS provides in cities with a 5G network are among the areas with the greatest growth potential. Of particular note in 2023 is the implementation of some solutions in the Azores, where NOS technology is contributing to a profound transformation in how the islands connect to each other and to the world, accelerating their digital transformation and their economic and social development. By 2023, NOS' 5G network covered 100% of the Azorean islands and 96% of their population, providing services such as safer pedestrian crossings, smart parking, and mobility analysis in Ponta Delgada. These solutions, which integrate the collection and analysis of real-time information, enable the optimisation of processes and resources and decision-making based on real information, with a positive impact on the quality of life and safety of the population. In Ponta Delgada, the video analytics solution installed addresses, for the city's mobility area, traffic control parameters, routes, and busiest times, based on semi-anonymised data. The solution also improves safety in the city with smart pedestrian crossings, which detect pedestrians in the pedestrian crossing and automatically activate a warning system for drivers. The city also has an intelligent waste management application for the maintenance and collection of rubbish bins, which allows for better fleet management. The cameras and sensors installed also facilitate the detection of emergency situations which require immediate intervention. On the residential front, NOS has integrated NOS Smart Home, a smart home solution, into its portfolio. Initially aimed at property developers, the solution offers integrated control of the home's features via a control panel, app, or voice assistant. By allowing automation rules to be set for lighting, air conditioning, blinds and locks, the solution contributes to a significant improvement in the comfort of the residents and maximises energy savings. It also ensures greater security by enabling movements in the house to be displayed in real time and alerts and notifications to be sent to the APP. Financial results In 2023, consolidated revenues increased 5.0% year-on- year to 1,597.5 million euros, with the operating performance in the telecommunications segment, combined with the good performance in the Audiovisuals & Cinemas segment, driving positive financial results. Revenues in the telecommunications segment rose 4.3 % year-on-year to a total of 1,532.7 million. The Audiovisuals & Cinemas segment continued to recover after the pandemic, achieving year-on-year revenue growth of 11.0% to 99.4 million euros. The Telecommunications segment grew by 4.3% year- on-year, totalling 1,532.7 million euros. Year-on-year growth in the core Telecommunications business was 5.1%, excluding licence resale revenues, which are typically characterised by low margins and volatility. Consolidated revenues adjusted for this effect increased by 5.8 %. In the consumer segment, revenues grew by 6.2 % to 1,097.5 million euros, as a result of strong operational performance, namely growth in RGUs and increased penetration of convergent services, driving sustained ARPU and revenue growth. Revenues from the business segment grew by 3.4 %, with the adjustment for the resale business mentioned above. The remaining telco revenues, regarding the "Wholesale and other" segment, which represent less than 7% of the telecoms business revenues, increased by 0.6% year-on-year, supported by the recovery of roaming revenues. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 37 Revenues from cinema exhibition and audiovisuals increased by 11.0% year-on-year to 99.4 million euros, driven particularly by the good performance in the third quarter, with the "Barbenheimer" phenomenon boosting the cinema exhibition segment and achieving an all-time record in quarterly ticket sales. Box office hits such as Barbie, Oppenheimer, Furious X, Avatar or Mission Impossible, which were displayed in cinemas, contributed to an increase in ticket sales of 28.7% compared to 2022 and 13.1% lower compared to 2019. Revenues from the cinema exhibition segment increased by 31.4% and those from the Audiovisuals segment decreased by 11.2% compared to the same period in 2022, with the drop in cinema distribution revenues impacted by the lower share of big box office hits compared to the previous year. NOS' operating profitability, EBITDA AL, increased by 10.1% year-on-year, driven by revenue growth and by efforts to contain different cost lines and optimise processes. Telecommunications AL EBITDA increased by 10.6% year-on-year to 566.9 million euros, while cinema and audiovisual exhibition AL EBITDA increased by 3.6% to 36.3 million euros. Consolidated operating expenses after leasings increased by 2.2 % year-on-year to 994.3 million euros. In the telecommunications business, operating expenses after leasings increased by 1.0% to 965.8 million euros and by 15.7% in the cinema exhibition and audiovisuals business to 63.2 million euros. With the current macroeconomic context, with higher levels of inflation, optimising the cost structure is essential to maintain competitiveness. Through different operational transformation programs and an effort to contain costs, we have been mitigating the multiple inflationary pressures experienced in cost areas essential to our operation. With a positive impact, we recorded a very significant decrease in the cost of goods sold, due to lower sales of IT licences, with lower margins, compared to 2022. External services, such as maintenance and repairs, or support services, continue to be negatively impacted by inflation. In 2023, NOS managed to reduce electricity costs by approximately 10 million euros. Prior to the current inflationary context which has impacted the price of electricity, NOS fixed the price of approximately one third of its consumption through a long-term power purchase agreement (PPA). For the remainder of its electricity needs, NOS has alternately procured on the regulated market, with controlled prices, or on the spot market, depending on the price levels at the time. Leasing costs increased by 9.8 % to 113.5 million euros. The increase in leasing costs is partly due to the incorporation of new costs related to the sale of mobile sites to Cellnex, now contracted under leasing agreements. It should be noted that leasing contract adjustments with Cellnex, regarding inflation, are limited to a maximum of 2% per year. Consolidated net profit in 2023 increased by 30.7% to 181.0 million euros, excluding the capital gain recorded in 2022 from selling a tower portfolio to Cellnex as part of the long-term partnership announced in April 2020. Adjusting for the impact of this capital gain, net income in 2022 decreased by 19.4 % compared to the previous period. The main contributor to the growth in net income was the good operating performance of EBITDA AL. Depreciation and amortisation remained stable, with a slight increase of 0.6% year-on-year. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 38 Net financial expense increased by 34.0 million euros to 69.2 million euros, reflecting the current macroeconomic context, with higher interest rates, impacting the new refinancing lines. The results of subsidiaries had an impact of 5.1 million in 2023, a decrease of 17.0 million year-on-year, with ZAP's contribution being Impacted by the exchange rate context. In 2023, income of 38.5 million euros was recognised as a result of favourable decisions in the Constitutional Court in legal proceedings filed by the company regarding the settlement of the Activity Tax, with NOS having already been paid 15.6 million euros in 4Q23 as a result of these decisions. Evolution of Net Profit (2022-2023, Millions of euros) CAPEX Total CAPEX, excluding leasing and other contractual rights, decreased 21.8 % year-on-year to 387.6 million euros. After a cycle of major investment with the expansion of the 5G mobile network, with coverage of 94% of the population by the end of 2023, and the fixed network with FttH, with an increase in fixed network penetration by 10.8pp to 74.8 %, 2023 sees a reversal of the trend. Technical telecommunications CAPEX decreased by 30.7 % to 225.3 million euros, with CAPEX associated with network expansion, replacement and integration projects decreasing sharply by 52.6 % to 77.7 million euros. CAPEX related to customers totalled 142.5 million euros, a decrease of 3.7% year-on-year, reflecting commercial robustness and the maintenance of historically low churn rates. The investment level in the telecommunications business measured according to revenues decreased by 8.2pp to 24.0%, reflecting the growth in revenues and the decrease in investment needs during 2023. CAPEX in the Audiovisuals & Cinema area decreased by 13.3% to 19.8 million euros. The decrease in the purchase price of film rights explains the CAPEX decrease in the Audiovisuals segment, more than offsetting the CAPEX increase in the Cinema Exhibition segment, associated with the operating recovery of the business. Free Cash Flow In 2023, AL EBITDA excluding leasings and other contractual rights totalled 215.6 million euros, driven by the positive trend in AL EBITDA and also by the reduction in investment needs, compared to the peak levels reached in 2022, thus registering a 4x increase year-on- year. Operating cash flow increased by 165.6 million to 220.3 million, driven by the strong performance of EBITDA AL - CAPEX. Operating funds also decreased by 1.8 million compared to 2022. Total Free Cash Flow prior to dividends, financial investments, acquisition of own shares, and excluding the tower sale deal with Cellnex, increased by 119.3 million euros, with the strong performance of operating cash flow as the main driver. The other costs/income item recorded a positive extraordinary figure of 15.6 million in 2023 due to the return of activity fees in the last quarter of the year. Interest and other financial expenses increased by 23.9 million euros to a total of 34.4 million euros due to the current macroeconomic context, with higher interest rates. In 2022, we recorded income from the agreement with Cellnex for the monetisation of mobile towers, amounting to 163.3 million euros and 0.5 million euros from the combined effect of the VAT charged and received on the sale of the towers. In 2023, we recorded 18.0 million euros mainly representing the VAT payment from the sale of the towers which was collected from the final transaction of the towers in 2022. Including these impacts, total Free Cash Flow prior to dividends, financial investments and acquisition of own shares decreased by 32.4%. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 39 FCF before dividends, financial investments, and acquisition of own shares (2022-2023, Millions of euros) Capital Structure Total Net Debt, including Leasings and Long-Term Contracts (in accordance with IFRS16) totalled 1,715.8 million euros at the end of 2023, an increase of 5.8% year- on-year. Total Financial Debt increased by 9.9% compared to 2022, to a total of 1,107.5 million euros, and the Cash and Equivalents position on the Consolidated Balance Sheet as of the 31st of December 2023 amounted to 18.2 million euros, so Net Financial Debt as at the 31st of December was 1,089.3 million euros. At the end of 2023, besides the cash and equivalents position, NOS also had 299 million euros in unissued commercial paper programs, so liquidity amounted to 317 million euros. The all-in average cost of debt stood at 3.5% in 2023, an increase compared to 2022 (1.4%), reflecting the context of rising interest rates. The Net Financial Debt / EBITDA After Leasing ratio now stands at 1.8x, slightly below the benchmark. On the 31st of December 2023, the proportion of debt issued by NOS with a fixed interest rate was approximately 26%. In addition, 34% of the debt was subject to band hedging, through interest rate hedging collars. The average maturity of the debt at the end of 2023 was 2 years and 8 months, compared to 2 years and 3 months at the end of 2022. NOS contracted 300 million euros in bank loans (200 million euros in December 2023 and 100 million euros in January 2024), indexed to sustainability objectives, divided between bond loans and commercial paper programs, with three financial institutions - Banco BPI, Caixa Geral de Depósitos and Millennium bcp. The contracted lines expire between 2025 and 2026, years in which NOS had a reduced number of lines to re-finance, thus allowing it to balance its maturity curve. With these bank loans, NOS anticipated its refinancing needs for the year 2024, having obtained favourable conditions. The terms agreed include a component on NOS' ESG performance and rating and a component associated with its Sustainability-Linked Financing Framework, which was the subject of a Second Party Opinion by Standard and Poor's (both published in February 2022, and available on the NOS website). In this case, the lines are thus indexed to the objective of reducing greenhouse gas emissions from our own operations (scope 1 and 2 emissions) by at least 80% by 2025, compared to 2019. 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Doing what hasn’t been done before 2023 Annual Integrated Report 01 02 03 04 40 With the contracting of these operations and the respective repayment of the lines maturing in 2024, NOS will have around 95% of its contracted debt associated with Sustainability indicators and targets. This consolidation of the connection between the financing cost and sustainability performance reinforces and demonstrates its strategic significance and the commitment, at all levels of the Organisation, to meeting best in class targets in ESG (Environmental, Social and Corporate Governance) indicators. NOS' long-term credit rating was reaffirmed by S&P at BBB- (Outlook stable) in May, and by Fitch at BBB (Outlook stable) in August. Maintaining the rating allows NOS to strengthen the conditions for continuing to diversify its financing sources, expand the average maturity of its debt and keep the average cost of its debt at a competitive level. Shareholder Return NOS SGPS – 2023 Performance NOS' Total Shareholder Return in 2023 was -4.07%, with dividends paid mitigating the penalisation of the share's performance, with a depreciation of 15.43%. In 2023, the dividend paid was €0.430, with the ordinary dividend of €0.278 added by an extraordinary dividend of €0.152, representing a dividend yield of 10.8% (as at the date of the announcement of the dividend proposal to be approved at the General Shareholders' Meeting). NOS shares closed the year with a market price of €3.200, which represents a market capitalisation of 1.649 million. Market capitalisation is calculated considering the 515,161,380 shares listed on the capital markets. Over the period the share price fluctuated between a low of €3.132 and a high of €4.418. The evolution of the market performance of NOS shares in relation to the PSI Index and Eurostoxx Telco Index during 2023 is shown in the graph below: Analyst Coverage At the end of 2023, NOS was covered by 17 analysts from different research teams, who published independent recommendations and estimates. According to the latest research notes published by each analyst, at the end of 2023, 41% recommended buy, 47% hold and 18% sell. The consensus target price according to the notes mentioned above was €4.12. All analysts monitoring NOS SGPS, as well as their price target recommendations, can be found on our website and all analyst estimates are based exclusively on the analysis of independent financial analysts. Any opinion, estimate, projection or forecast presented by these analysts regarding the NOS's performance reflects only their own interpretation and does not represent the opinion, estimate, projection or forecast of the NOS or its management team. Proposed distribution of profit Whereas: For the year ended on the 31st of December 2023, a net profit of 6,374,321.15 euros was recorded in the Company's individual accounts for the year, and this figure already reflects that, under the terms of the applicable accounting standards, the Company recognised the sum of 1,542,553.00 euros in its accounts for the year as being allocated, under the terms of Article 14.3 of the Company's Articles of Association, for the distribution of profits by the Directors.; It is proposed that the following resolution be passed: 1. Given the current financial situation of NOS, that of the net profit, distributable under the terms of articles 32 and 33 of the Companies Code, amounting to 6,374,321.15 euros, the amount of 318,716.06 euros be transferred to Legal Reserves, and the remaining amount be paid to shareholders, plus 174,250,877.91 euros from Free Reserves, representing an overall payment, as ordinary dividends for the 2022 financial year, of 180.306.483,00 euros (corresponding to 0.35 euros per share, in relation to the number of shares issued); 2. That, since it is not possible to accurately determine the number of own shares held on the date of the aforementioned payments, the overall sum of 180,306,483.00 Euros provided for in the previous paragraph, calculated on the basis of a unit amount per share issued (in this case, 0.35 Euros per share), be distributed as dividends as follows: a) The unit amount of 0.35 Euros which determined the preparation of this proposal be paid for each share issued; b) The unit amount corresponding to the shares held by the Company on the first day of the payment period mentioned above is not paid and is transferred to Free Reserves; Under the terms of paragraph 3 of article 14 of the Company's Articles of Association and as profit sharing in the Company, it is proposed to resolve on the allocation of the amount of 1,542,553.00 Euros to the Directors. 2023 Annual Integrated Report 01 Integrated Management Report 02 03 04 Chapter 2 2.1. We value our people 2.2. We build a better future 2.3. We assume responsibility 2.4. We want more 2.5. Annexes 42 54 90 151 153 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 42 With people as its main asset, NOS works to maintain a confident and capable team, motivated and aligned with its pioneering and excellence spirit. NOS prioritises talent development and training for the challenges of the future, a diverse and inclusive culture, and physical and emotional well-being (individual and collective), with the ambition of being recognised as the best national company to work for. In 2023 the employee experience was the focus, and the experiencing of the culture was centred on team spirit, sharing, and consolidating an attractive environment. 2.1 We value our people Summary We take care of and invest in our people Cuidamos e apostamos nas nossas pessoas Contribution Contributo Work-life balance Index (vs 59% In 2022) 83% NOS recommendation rate as a great company to work for (vs 69% in 2022) 70% Performance Highlights 33% 45,855 Ratio of women in management positions (Directors and Managers), maintaining the ambition of reaching 40 per cent by 2025 Total training hours (vs 34,547 hours in 2022) • Continue to develop the employee experience, particularly in terms of career development • Continue to evolve as the first- choice organisation for all those entering the job market Future Focus Leadership Development Program Leadershift Program, launched in 2022. In 2023, communication, training and engagement initiatives were introduced for leaders, aiming to ensure that they feel part of a strengthened leadership structure, accompanied, and supported by the organisation. Third edition of the N Factor Terceira edição do Fator N An initiative focused on stimulating employee engagement with the organisation's culture and with each other, which had a great turnout. New Performance and Development model Developed with the ambition of guaranteeing a culture of continuous feedback, involving all parties responsible for the professional growth of employees. Highlighted Facts 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 43 2.1.1 Our People Overview NOS reinforces its commitment to valuing people, both in their personal dimension, investing in their well-being and in diversity and inclusion as a pillar, and in their professional dimension, centred on a culture of continuous feedback, which is the foundation for individual and collective development. The focus on diversity and inclusion intensified with the creation of a 100% dedicated team and the signing of the "Commitment to Inclusion". In 2023, these initiatives and other dynamics implemented resulted in a strengthened team culture and in satisfaction and pride levels that corroborate the success of the path travelled. Focus on People People are the foundation of the organisation, and their ambitions are an important driver for the success of NOS' business. The company ensures excellence during the integration process and promotes an inclusive environment where team spirit and well-being are also key vectors. At the same time, NOS promotes a comprehensive understanding of the company and its culture. It consistently invests in the mechanisms necessary for effective professional and personal development, with the aim of driving and maximising the skills and capabilities of its people. NOS aspires to position itself as the best company to work for, respecting the work-life balance of its employees and encouraging collaboration and celebration. Distinction in results and the organisational success we aspire to are driven by diversity, by our strategic bet on talent management, with a focus on team development and training. These principles guide our daily actions, inspiring the dynamization of concrete actions that promote both individual and collective value creation. The NOS Team NOS employs best practices to design its policies and working conditions, in an effort to build a qualified, diverse, and motivated team. A team where each person feels welcome, safe, and able to take on a responsible but challenging autonomy, putting their talent and the training provided at the service of the collective ambition. As of 31 December 2023, NOS had a total of 1,835 employees, 1,075 men (58.6%) and 760 women (41.4%), most of whom (94.6%) work in the telecommunications business. The distribution by professional category shows the proportion to be expected in a company operating in the technology sector, whose workforce is mainly technical, with technicians accounting for 78.1% (including specialist, professional and assistant categories), managers 18.9% and directors 3.0%. The company's activity is entirely centred on the Portuguese market, with a higher density of employees in the Lisbon and Porto metropolitan areas, and the rest in the autonomous regions. Since 2017, 100% of direct employees work full-time and, by 2023, almost all (99.5%) have permanent contracts, reflecting NOS' commitment to sustainable employability policies. More than three quarters of employees have higher education ualifications (77% at the end of 2023). This core qualification is further reinforced by the wide range of training programs provided. 5 The employee data does not consider directors, trainees, employees of companies in which NOS holds less than 51% and cinema employees, except for the percentage of women on the Board of Directors and the Executive Committee. +11% 70 % rating on the work-life balance index (vs 59 per cent in 2022) Source: Climate Study 2023 Work/life balance 83% rating on the NOS Recommendation Rate as a great company to work for (vs 69% in 2022) Source: Climate Study 2023 +14% Best company to work for Percentage of women in management positions, considering Directors and Managers (ambition to reach 40 per cent by 2025) 33% Equal opportunities 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 44 Diversity and Inclusion As a technology-based company, NOS operates in a sector that faces significant challenges regarding gender equality. However, the company is strongly committed to working on this dimension by monitoring metrics and implementing a comprehensive set of initiatives aimed at promoting structural change. As of 31 December 2023, women accounted for 33% of all management positions, including managers and directors. With regard to the governing bodies, at the end of 2023, 5 women were members of the Board of Directors, representing 33 % of the total number of Directors (15). And there was a woman on the executive committee, representing 14% of the total composition of this body (7 executive directors). The integration of employees with some kind of disability is also a NOS strategic bet, which was reinforced in 2023, with further developments of this commitment expected in the future. NOS is aware of the influence that diversity and inclusion have on the success of the entire team, due to the positive impact it has on people and the way the culture is experienced. The well-being and satisfaction of employees, partners and customers depends largely on making the Organisation an increasingly inclusive and diverse environment, thus contributing to the growth of innovation, teamwork, motivation, productivity, and willingness to change. 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 45 In this sense, the People & Organisation Department, empowered by the Director of the Department, has the mission of ensuring equal opportunities for the personal and professional development of the team. NOS is committed to identifying and eliminating barriers, deconstructing prejudices, and unconscious biases, recognising, and valuing the different ways of being and behaving of its people, and promoting a work environment where everyone feels integrated. To continue to materialise its vision on the topic of Diversity & Inclusion, which is aligned with the " Statement of Commitment to Diversity and Inclusion" in 2023, NOS has taken stock and rethought its strategy, reflecting on what has already been done and what remains to be done. The Statement of Commitment to Diversity and Inclusion can be consulted on the institutional website at: sustainability/more-for-our-people. NOS' commitment and structuring strategic bet to increase gender diversity made it possible to achieve an internal target which had been set for 2025: 15% of women in technology roles, with this indicator standing at 14.8% on 31 December 2023. As diversity and inclusion is a key pillar of the People & Organisation Department's global strategy, which is established through the principle of valuing "our people", a team 100% dedicated to Diversity & Inclusion was created within this department in 2023. Diversity & Inclusion Team This fully dedicated team is responsible for developing initiatives and policies that promote equity, diversity, and inclusion in the Organisation, thereby strengthening the strategic implementation capacity in these matters. This creation is another step towards strengthening governance in this area, following the creation in 2021 of the Diversity & Inclusion Committee, an advisory body to the Executive Committee, which is responsible for monitoring the measures adopted by NOS in this area and for challenging the People & Organisation Department to improve related initiatives and practices. Initiatives developed Also in 2023, we developed a series of initiatives regarding Diversity & Inclusion, of which we highlight the following: • “Commitment to Inclusion" • Awareness-raising action for the recruitment of people with disabilities • Partnership with Technovation Girls Portugal • Our Women in Tech" Celebration • Renewal of the PWN Partnership  • NOS at Girls in ICT Day  • 2024 Gender Equality Plan • 2024 Gender Equality Plan   The Gender Equality Plan embodies NOS' commitment and objective in this matter, and in safeguarding meritocracy in all its forms and circumstances. The 2024 plan reinforces the commitment to the priorities that guide the company's actions in this area, making it possible to monitor and measure the progress of the path being taken. We remain focussed on improving the expertise and tools that our people have in this regard, striving to offer the best resources at our disposal. The full document can be consulted in the institutional area of the website.  To ensure that the company is more and better in this development area, we remain committed to having 40% women in management positions by 2030.    The full document can be found in the institutional area of the website at: People/Diversity 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 46 2.1.2 We take care of our people Overview NOS is committed to strengthening its position as a benchmark employer, focused on the integral well-being of its people and its team. To this end, the company has been strengthening its policy on benefits and the promotion of health and well-being. In 2023, among others, we highlight the following: • The reinforcement of the NOS VITA Program, with the extension of benefits to employees' family members and friends; • The focus on mental health and emotional balance, reinforced by internal measures and by association with an external initiative: the Pact for Mental Health in the Workplace; • The strategic bet in training first aid teams in Basic Life Support using Automated External Defibrillators. Regarding collective well-being, we highlight the 2023 re- edition of the Factor N, a corporate teambuilding initiative, promoted with the aim of strengthening employee engagement as well as challenging the bonds of trust, teamwork, and leadership. More than 900 employees attended the event. Remuneration & Benefits NOS's remuneration policy is guided by a set of principles that are in line with both national and international best practice. NOS frequently participates in benchmark studies on compensation and benefits trends, which enables assessment and improvement of the competitiveness of its model, adjusting it by benchmarking against the dynamics of the best companies and the market. Principles of NOS' Remuneration Policy Equity Ensure the principles of internal equity that support integration into a single culture ----- Balance Ensuring a balance between the fixed and variable components of the remuneration structure ----- Simplicity Simplified remuneration structure, ensuring clarity in its communication and understanding by employees ----- Flexibility Ensuring, within the defined rules, flexibility in dealing with different situations, namely when managing high-potential employees ----- Performance Ensure that compensation is tailored to individual and company performance in the short and long term ----- Competitiveness Ensuring the levels of competitiveness needed to attract and retain talent Aware of the importance that compensation and benefits policy has in attracting and retaining talent, benefits are not only incorporated into the formal scope of the compensation policy, but also into the experience and emotional context. 75% % of employees satisfied or very satisfied with the basic benefits offered by NOS to its employees Source: NOS Vita Survey, 2023 Satisfaction with benefits 0 External audit of the occupational health & safety management system certified according to ISO 45001 revealed no findings Health & Safety 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 47 One way of obtaining a return and contributing to higher levels of engagement is to devise and provide benefits that meet people's needs, while simultaneously generating value for the company and its employees. To the remuneration package is thus added a variety of benefits, partnerships, programs, and initiatives aimed at different generations at NOS, enriching the value proposition offered to employees. In 2023, the offering continued to be reinforced with benefits and advantages in the NOS VITA Program, not only in terms of the diversity of products and services offered with special discounts, but also in extending the Program to employees' family members and friends. NOS VITA Program A holistic well-being program created in 2022, with the ambition of improving employees' lives by acting in different domains and contexts (body, mind, and social dimension), raising awareness, and facilitating a better life. The NOS VITA Program is currently a benchmark for several companies. In addition to flexible entry and exit times, the public holidays and leave policy in force provides for leave on birthdays, leave on the morning of the first day of a new school term for employees with children under the age of 15, the full day on 24 December, and the afternoon of 31 December. Safety, Health, and Well-being NOS guarantees a safe and balanced working environment for employees, suppliers, and partners, promoting emotional well- being and preventing the occurrence of incidents and occupational illnesses. These elements are an essential foundation for maintaining attractive working conditions, helping to sustain the ambition of positioning NOS as the best company to work for. Occupational health & safety management • Health & safety management system aligned with ISO 45001 Since 2015, NOS Comunicações S.A. has had an Occupational Health & Safety (OHS) Management System implemented and certified in accordance with the ISO 45001 standard. The certification essentially covers Products & Services in the Corporate market segment. However, regardless of the scope of the certification, the health & safety management processes and procedures extend across the entire Group and are therefore aligned with the standard's principles for the entire organisation, impacting all employees, as well as employees of partners, when they work on our premises or on premises that are operated and/or managed by NOS. External security audit with no findings The most recent certification follow-up external audit, conducted in October 2023, resulted in no findings, showing NOS's commitment to legal and regulatory compliance and to ensuring the systematic and comprehensive implementation of best practices and processes, with the aim of minimising risks and continuously improving behaviour and working conditions. • Risk management benefits from greater systematisation in protection systems management Through the annual mapping exercise of the main OHS hazards and risks, psychosocial, ergonomic, physical, mechanical, electrical, and commuting risks continued to be identified as the main risk categories, on which we have been working by defining and implementing action plans. Working conditions in terms of air quality, noise, lighting, and air conditioning are regularly monitored. 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 48 An annual survey is organised to consult employees on OHS conditions, as provided for in the legislation and in the Health and Safety certification. This is an important opportunity to obtain useful feedback for the continuous improvement of the processes implemented. The results are analysed to support decision-making in this area. Following on the work developed since 2021, the implementation of the Personal Protective Equipment (PPE) and Collective Protective Equipment (CPE) Management Procedure was completed and published on the IMS (Integrated Management System) Portal. The procedure provides greater systematisation of the entire process, from supply, delivery, handling and return of the equipment, ensuring a more optimised management. Also, as part of the PPE project, the Electromagnetic Field (EMF) Radiation Control Procedure was also developed, implemented, and published on the IMS Portal, helping to further systematise operations at this level. The purpose of the document is to describe the methodology for ensuring the monitoring of EMF levels, the associated records (readings and mitigation actions if justified) and responsibilities. Responsibility for recording and processing readings, including any thresholds that may have been exceeded, was assigned to a group of pivots, who received training to understand how to record and manage any incidents in the new internal system. As part of this procedure, dosimeters were provided for monitoring. All employees exposed to this type of risk were given training in "EMF Radiation Prevention", the purpose of which was to identify the types of radiation, characterise where they come from, understand what EMF radiation is, be aware of legal requirements, health risks and understand how to record measurements and incidents. Find out more about the management approach to electromagnetic radiation from antennas in the section with the same name Also, as part of the PPE project, in 2022 training was provided on "Principles of safety when working at heights" on the Portuguese mainland, with the aim of making people aware of the proper attitudes and behaviours to adopt, identify the appropriate equipment, learn about the procedures for checking and maintaining PPE, and how to use it correctly. In 2023, similar training was given for the Azorean islands: "Working at Heights", with the aim of making people aware of the appropriate equipment and how to use it correctly, learn about the inherent procedures, assess the surrounding conditions, and learn about the safety procedures for each work situation. • Emergency prevention and management Within the scope of physical security, "Fire Safety" e-learning training is provided for new employees, so that they know how to act in prevention and emergency situations in the company's buildings. In 2023, this achieved a 90% completion rate. NOS has dedicated teams for emergency response and evacuation. These teams have been reorganised and have completed training so that they are aware of the prevention measures set out in the Intervention Plan and how to respond in the event of an emergency, according to the specific nature of each facility.  When it comes to first aid, NOS has trained new teams so that they are able to identify the most common types of medical emergency in an out-of-hospital environment and learn how to provide first aid in life-threatening situations until the medical team arrives. To improve the response to possible cases of cardiopulmonary arrest, NOS installed an Automated External Defibrillator (AED) in each building. These teams were trained on how to correctly perform Basic Life Support (BLS) manoeuvres using an AED on a victim in cardiopulmonary arrest. • Health services Since 2020, employees have been able to attend Occupational Health appointments and exams more easily and conveniently at NOS' three main buildings (Campo Grande, Expo and NorteShopping). This process is fundamental to ensuring compliance with both regulatory and the legal obligations of Article No. 108 of the Legal Framework for the Promotion of Occupational Health and Safety, while also allowing everyone to look after their own health. With the protection of employees and everyone in mind, a seasonal flu vaccination campaign was organised. • Health and well-being In 2023, the NOS VITA Program continued to expand its presence and activities in its 3 dimensions - physical health, emotional health, and social health. Reflecting its personalised, holistic, impactful, and sustainable approach, various initiatives were developed with the aim of inspiring choices, empowering change, and facilitating employees' access to well-being- promoting activities. 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 49 Written and audiovisual information and good practices were disseminated on topics such as stress management, emotional intelligence, and financial education. Communication on the programs offered by the health insurance scheme for employees was also reinforced. We celebrated Health and Well-being Days, as well as Mental Health Month. • Focus on mental health and emotional balance Emotional balance and mental health are aspects that are increasingly important to the management team because of their complex and unobvious nature. In the annual update of the health insurance policy offered, mental health cover was included for all employees and special leave was given to parents so that they could attend their children's first day at school. Believing that change in organisations has to come from the top, a leadership pilot program was also launched, which took the form of an 8-week journey of learning and self-knowledge with a view to more sustainable leadership performance, where emotional balance is one of the aspects explored. On a more strategic level, NOS signed the Pact for Mental Health in the Workplace. Pact for Mental Health in the Workplace An initiative of the Centre for Responsible Business and Leadership at CATÓLICA-LISBON and the MindForward Alliance. By joining this pact, NOS is teaming up with a group of Portuguese companies that have also put mental health at the top of their priorities and want to work together in favour of better conditions for the mental well-being of their people. Engage and Motivate Team spirit and unity around a common culture and values are developed in a variety of ways at NOS. Dedicated actions are developed, and these aspects are considered in the most varied dimensions of people management. Studies measuring the levels of employee identification, satisfaction, and motivation as a result of this sense of culture and values are one way of achieving this, since they provide useful feedback to management, either by corroborating the validity of the path that has been mapped out, or by identifying the aspects that need to be improved. One example that we highlight is the "Factor N" initiative, which was reissued in 2023. Fator N – engagement and energising initiative The Factor N is an engagement, energising and fun initiative, which consists of the largest corporate teambuilding event. The third edition of this initiative sought to develop three sets of skills: • Courage and confidence: overcoming the fear barrier of participating; daring, taking risks, and allowing the opportunity to be challenged and surprised, individually and as a team; psychological security; believing and trusting in oneself and one's colleagues. • Socialising and sharing: meeting new people, creating new bonds, building new contacts, sharing moments, living experiences, and creating collective and individual memories. • Energy and joy: participating in light, relaxed and fun activities full of positive energy; contagious with enthusiasm, laughter, and lots of smiles. 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 50 The Factor N allowed us to work, within the context of the NOS culture and experience, on diversity and inclusion, the feeling of pride in what everyone does and achieves as a team, as well as the joy and celebration of individual and collective achievements. 2.1.3 We invest in our people Overview In 2023, the employee experience was the main focus, with special investment in performance, embarking on the path of creating a culture of continuous feedback, autonomy, trust, and psychological security. This goal was achieved through the new performance and development model, Developing our People, and the consolidation of the leadership training program, Leadershift, while the other talent management and development tools, which are crucial to the success of employees and the organisation, were maintained and consolidated, namely: • NOS Alfa trainees program; • Internal mobility program; • NOS Campus - corporate academy Talent Management NOS ensures that all employees have access to career development opportunities and transparent evaluation processes. Operating in a highly dynamic technological area, NOS continues to regard talent management as one of the keys to its success and sustainability, as well as recognising the need to continuously evolve and adapt management models, practices, and policies in this area. This constant focus and adaptation are crucial to meeting the new skills, new work dynamics and new social priorities of young talent. As such, NOS has invested heavily in improving the employee experience, revisiting some of its people management programs and processes. 923 Number of employees who participated in a voluntary teambuilding initiative, which had a strong motivational and corporate cohesion impact N Factor Participation 71% Learning and development rate (vs 69% in 2022) Source: Climate Study 2023 Learning & development Overall score, on a scale of 1 to 5, for the 2023 edition of the NOS Alfa trainee program 4.9 Attracting young talent 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 51 New performance and development model This new model is the pillar for building a culture of continuous feedback and promoting greater autonomy and empowerment at NOS, guaranteeing a continuous path of progression, development and both individual and collective growth. The DOP ensures that performance is evaluated and tailored to the training and career plan. The company continued to invest and work to strengthen its young talent, with 43 new alphas (professional internships), the highest number since the program began, and 61 new curricular and summer internships. • NOS Alfa trainees program This program, which lasts a total of 12 months, is designed to develop trainees by rotating them through two business areas. It includes a very strong mentoring and monitoring program, combined with specific, tailor-made training. The program has evolved along with business needs and changes in the work context. The overall feedback on the NOS Alfa onboarding week was very positive, with an almost maximum overall rating: 4.9 on a scale of 1 to 5. With this program, NOS intends to continue to be a benchmark in attracting young graduates, attracting talent aligned with a culture and values of excellence and innovation. • Internal mobility program In 2023, NOS maintained the Internal Mobility Program, a program that promotes the development of employees, allowing horizontal career moves and enabling them to work alongside other teams, giving employees more visibility for their career progression and development. It thus represents an opportunity for the employee to receive new and different feedback, which is a driver for acquiring new skills and a more comprehensive knowledge of the business. Since 2020, 636 mobility actions have been performed. In 2023, the rate stood at 10.6% of the organisation. • Leadershift Program The development of leaders aligned with the NOS culture, capable of mobilising and maintaining motivated, emotionally balanced, efficient teams that evolve together, is decisive in the talent development and retention process. This is the challenge of the Leadershift program designed for 2022: to develop and train NOS leaders so that they can drive the organisation's cultural transformation process. In 2023, the program's implementation was reinforced with the implementation of various highly customised training initiatives to support and promote the cultural change we aim to achieve. 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 52 Continuous employee training Skills development is a fundamental pillar for the growth of people and organisations, contributing to attracting and retaining talent. • NOS CAMPUS – Corporate University At NOS, the continuous training of employees is ensured through NOS CAMPUS, its corporate university, which operates in four key areas, designed to support, and drive the organisation's strategy: • Leadership and Management; • Technical and Digital; • Technological; and • Transversal. These action areas are fully aligned with NOS's organisation strategy and culture, allowing to develop the capacity to undertake new goals and the skills needed to face the challenges of the technologies of the future. Among other topics, in 2023 NOS CAMPUS focussed on five relevant fronts: • Leadership development • Advanced Analytics FAAST Program • Cloud Training • Training for the new Performance and Development Model • Training as a vehicle for aligning values and managing risks In 2023, the stabilisation of the training offering allowed different dimensions to be addressed, including, besides Employee Upskill, the promotion of initiatives that contribute to the creation of a life-long learning culture and the strategic bet on Reskill. Training on potential transversal risks to the organisation Sustainability E-learning training, consisting of 3 series and covering environmental, social and governance aspects aligned with NOS' sustainability policy (e.g. Climate and Energy, Waste and Circular Economy; Electro Magnetic Radiation, etc.). ----- Ethics at NOS E-learning training that strengthens the ethical commitments that all NOS employees must undertake and comply with on a daily basis. It explains the principles of the Code of Ethics and the relevant associated mechanisms (e.g. whistleblowing channel). For a better understanding, questions are asked, and examples are given of appropriate and inappropriate behaviour regarding the various topics covered in the code (e.g. harassment, corruption, and fraud, etc.). ----- Security & Privacy E-learning training, consisting of 3 stages, covering NOS' existing policies on this matter. ----- Everyone safe General e-learning training on Safety, Health and Well-being and Working Conditions. ----- Fire safety E-learning training to introduce existing resources and practices in the event of a fire. ----- Emergency Response Teams On-site training to introduce emergency teams to their roles and modus operandi. ----- First Aid On-site training to enable trainees to perform basic life support actions. 2.1 We value our people 2.2 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 53 With the exception of emergency team and first aid training, most of this training is transversal in nature and applies to all employees. These trainings are complemented by circumstantial and/or more specific trainings, which are frequent, for example, when new procedures are defined or adjusted. In 2023, this was the case, for instance, with training on the new procedure on electromagnetic radiation, or the training on working at heights in the Azores. Training modules are also provided for suppliers and partners, covering these topics. For more information on the topics covered by the training courses, see " Sustainability management and strategy" For more information on specific occupational health & safety training see "We Take Care of Our People" For more information on the topics covered by the Code of Ethics and, consequently, ethics e-learning, see "Ethics and Conduct" For more information on Security and Privacy training, see "Security & Privacy" For more information on training for suppliers and partners, see "We promote our partners and support the local economy" Additional training • Training outside the catalogue For specific needs not covered by the NOS CAMPUS training catalogue, the employee can request training outside the catalogue via the platform. • Advanced training NOS offers the possibility for employees at different levels of seniority to apply for advanced training. In 2023, 4 MBA applications were approved. Overall, the training included in the NOS CAMPUS training catalogue and additional training totalled 45,855 hours of training in 2023, corresponding to an average of 25 hours of training per employee and an increase of around 33% on the total hours of training recorded in 2022 (34,547 hours). This positive evolution was driven by the consolidation of the training offered at NOS CAMPUS, the development of training projects for the organisation as a whole, and also by greater contextual standardisation which enabled training to be resumed without constraints throughout the year, regardless of the format. +33% of total training hours in 2023 compared to 2022 (45,855 vs 34,547 hours) de horas totais de formação em 2023, face a 2022 Employee training 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 54 Contribution NOS' actions and its products & services contribute to a more digital and inclusive society, one which is more environmentally efficient and aligned with ESG values. In 2023, NOS continued to contribute to the SDGs, boosting the local economy and supporting the digital transformation of organisations. With a strong presence in the national innovation ecosystem, NOS continued to promote entrepreneurship and the development of solutions with environmental and social benefits in its operations and in the products and services it provides. Digital inclusion and training continued to be strengthened, both through the business and the social responsibility program. 2.2 We build a Better Future Summary We are an enabler of the climate and inclusive digital transition of Portuguese society • Prepare processes and teams to meet the new targets for the take-back and reuse of used mobile phones. • Continue to be an engine of innovation and inclusive and sustainable transformation of society, through products/services, as well as expanding the social responsibility program. Future Focus Refurbished boxes and routers installed in total -13% Reduction of telecommunications service energy consumption per data traffic 54% Performance Highlights 500 +8,000 Elderly people assisted remotely by health telemonitoring supported by NOS 5G to prevent critical episodes People impacted by the ZERO1 project and other initiatives to develop future skills and inclusion through training, supported by NOS 5G Climb A virtual climb that testifies to the transformative power of 5G technology at the service of the community, demonstrating its potential to bring people together and experience what they otherwise would not be able to. This was one of several initiatives in NOS's social responsibility program that took place in 2023. Launch of the 5G & Digital Transformation Test Bed The Test Bed, the BE. Neutral Mobilising Agenda, and intelligent territorial management solutions, developed and tested in projects led by NOS, bear witness to its contribution to technological and sustainable innovation. Improved energy efficiency The acceleration of the energy rationalisation program has reduced the operation's consumption and contributed to improving the energy efficiency of the telecommunications service. Increased take-back and refurbishment of customer equipment generated environmental and economic benefits. Highlighted Facts 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 55 2.2.1 Products & Services with Sustainable Innovation Overview NOS undertakes the responsibility and commitment of being a protagonist and differentiating player in innovation at the service of the environment and the community, through 5G leadership and the potential of digital technology. The momentum that the company has established in this area has resulted in: • The provision to the market of various innovative solutions, products and services that contribute to an environmentally more efficient, decarbonised, digital, and inclusive society. • A boost to entrepreneurship and research, two assets that NOS fosters to create social and environmental value. • Another year of achievements, with the promotion of initiatives such as Test Bed 5G & Digital Transformation, more innovative achievements in the health area, and more intelligent services implemented in Portuguese towns and cities. Approach to Sustainable Innovation Innovation is one of the NOS' main assets, one of the companies most invested in innovation in Portugal as an essential pillar of business development, but also in line with its commitment to promoting entrepreneurship, creativity, and value creation for Portugal. Through the focus provided by its sustainability strategy, a significant part of NOS' innovation effort is channelled into projects that create environmental and/or social value, combining competitiveness with a contribution to the United Nations Sustainable Development Goals (SDGs). The company's activities in this area are based on three fundamental technological pillars: • 5G technology; • IoT (internet of things), in particular NB IoT (Narrow Band); and • Advanced Analytics. Combining these technological enablers with other technologies, NOS invests in a comprehensive intervention leveraging internal innovation potential and, through partnerships, the innovation potential developed by third parties, involving customers, partners, developers, and academia in a virtuous ecosystem, with whom it closely collaborates. The main focus areas it explores in the field of sustainable innovation are: • Energy efficiency and low-carbon solutions; • Smart and sustainable cities and mobility; • Health and an active and healthy living; and increasingly, also • Circular economy and dematerialisation. Dematerialisation and the circular economy have been gaining increasing expression in products and services with sustainable innovation, especially in the area of products/services aimed at the consumer segment, such as self-installation services on the HFC network, or e-sim, and in internal and sales processes, which also influence the sustainability of NOS' commercial offering to its customers (e.g. paperless project in Direct Sales). 5 cities where smart management solutions based on NOS' 5G infrastructure have been implemented or tested: Matosinhos, Barreiro, Pombal, and since 2023, Vila Nova de Famalicão, and Ponta Delgada (ongoing) NOS 5G Smart Cities 7 co-funded projects focused on sustainability active in 2023, 5 led by NOS and two in which it participated. 4/7 generated concrete results in 2023. Active R&D projects 5G 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 56 Co-funded projects with a focus on sustainability NOS is currently involved in a number of co-funded research, technological development, and innovation projects. The company develops projects in partnership with multiple players, from established companies to start-ups, and entities from the national scientific system (e.g. universities, research centres, collaborative laboratories), taking the lead of the consortium in some of these projects. NOS participates in a total of 24 R&D projects involving Green and Mobilising Agendas for Business Innovation, the National Network of Test Beds and Portugal 2020, with 5G being central to many of them, as well as IoT, Cloud, Analytics and AI. These projects involve areas/sectors such as Smart Cities, Production Technologies, Energy, Health, Tourism, Textiles, Gaming, Retail, Conversational AI, Autonomous Mobility, Aerospace, Forestry and Media. These projects allow new fields of expertise to be explored and to create value that will be fundamental to the further digital transformation of society, and thus to a society that tends to be more efficient in its use of resources. Most of these projects extend over several years (usually 2-3). Part of these projects have a specific focus on sustainability vectors. These are projects that aim to generate and endogenize new scientific, technical, and technological knowledge and, simultaneously, develop and test new solutions and business models in different contexts involving energy, smart cities, and the active and healthy lives of senior citizens. Figures and facts on co-financed projects active in 2023 which focus on sustainability • 5 NOS-led projects (2 initiated and 3 completed) involving contributions to the following fields: - Energy efficiency and low-carbon solutions (3) - Smart and sustainable cities and mobility (3) - Health and active and healthy living (1) Ø Projects: BE Neutral; C-Tech; Link4S, City Analyser and 5G & Digital Transformation Test Bed • 2 projects in which NOS participates without leading (1 initiated and 1 completed) involving contributions to the following fields: - Energy efficiency and low-carbon solutions (1) - Smart and sustainable cities and mobility (1) Ø Projects: Energy Transition Alliance and City Catalyst These 7 projects are subsidised by Portugal 2020 (4) or the PRR (3) 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 57 Among these, we highlight the results of the projects led by NOS that were completed in 2023: C-Tech, Link4S and City Analyser. Test of a Smart Cities platform to reduce the cities' carbon footprint, developed as part of the C-Tech project During 2023, a platform which uses modelling (a three- dimensional representation of the city) and users' mobile data to measure and simulate different energy efficiency scenarios for buildings was tested in a real-world context, listing the work needed to improve the energy index. The application also assesses the buildings' potential for implementing urban gardens, and analyses variables that support the planning of more attractive areas for pedestrian mobility. The platform's main objective is to provide support to local decision-makers, enabling them to study solutions to the specific issues of each region, with the aim of reducing the carbon footprint. This project was co-promoted by several higher education institutes and development agencies, such as IST and CEiiA, and was one of the 7 flagship projects of the MIT Portugal program. Predictive platform, City Analyser, to improve the energy efficiency of telecommunications networks and adjust mobility solutions and other services to people's real needs The platform, developed in consortium with various institutes and companies, such as INESC TEC or SONAE MC, allows information extracted from mobile network geolocation data to be used, duly anonymised, and processed in real-time, to better understand people's real behaviours and preferences, enabling predictive models to be created to optimise services for the benefit of the population. The platform has been tested in four key areas; however, it can be used in multiple areas for more informed decision-making, based on people's real behaviours. For transport, tourism and retail, the data collected allows the offering and all associated management to be modelled (e.g. adjusting transport routes and schedules, adjusting the tourist offering, adjusting ranges, and optimising in-store stock management, or even adjusting languages in communication). In telecommunications, it was possible to establish a predictive model for optimising the binomial of energy savings - quality of service, which is estimated to prevent the emission of a thousand tonnes of CO2 in a year. Thus, this project simultaneously represented a contribution aligned with the strategy of incorporating advanced Artificial Intelligence and Machine Learning algorithms into the management of NOS' 5G network, with the aim of reducing the carbon footprint. New smart connectivity solutions for new sustainability paradigms in the territory and cities, with the Link4S project Under this collaborative research project between various R&D&I and business partners, with the support of a number of local authorities, a new generation of smart and connected devices and platforms was developed and tested, based on IoT and 5G-ready, configuring solutions which allow various features to be combined, with decarbonisation and environmental quality in mind. Sensorised solutions were tested that monitor and provide data to help understand the maintenance status of critical energy infrastructures, helping to adopt timely measures to prevent their degradation or prevent natural gas leaks, while also collecting additional environmental parameters to help the authorities prevent wildfires. A new model of shared and sustainable mobility has been developed which simultaneously allows mobility patterns to be assessed and atmospheric quality to be measured, combining a sustainable transport network (shared electric bicycles) and urban logistics ( drone-based), with a network of key sensors attached to this equipment and the real-time processing of the data collected on a platform. The system also includes a carbon reward component, which calculates the emissions avoided when using bicycles and gives citizens a reward that can be used to purchase sustainable services/products. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 58 The City Catalyst project, in which NOS participated, also ended in 2023 and is another co-funded project involving the research, development and validation, in a real-world context, of innovative technological solutions and services that enable integrated, more efficient, and effective urban management and catalyse the sustainable development of the smart cities of the future. The project involved four Portuguese cities: Porto, Aveiro, Guimarães and Famalicão. Smart Cities Smartcities have been a top strategic bet for NOS for some years now. Through a strategy of rapprochement and cooperation with municipalities, and together with various partners, the company already has a considerable portfolio of innovative solutions already implemented, responding to different needs and challenges, and fostering the sustainability of various cities/towns. Interactive apps that strengthen the connection between municipalities and citizens, intelligent and sustainable mobility solutions, optimized water, energy and waste management systems, administrative modernization and operating cost reduction are some of the solutions to which we have been contributing. All these solutions reach their full potential through the ultra- fast speed, reduced latency, security, reliability, and connectivity offered by 5G technology. Over the last two years, NOS' strategic bet on this technology made it possible to increase the impact of this type of solution. Several cities already have this type of solution leveraged on NOS' 5G network. During 2023, NOS continued to support the intelligent modernization of Portuguese cities and towns, revealing that, in addition to the concrete projects implemented, market dynamics in demand for this type of solution are increasing, also as a result of its efforts to promote this type of solution. Smart irrigation With the increased risk of severe drought, smart irrigation projects have been implemented in two towns. The solutions implemented, which ensure management based on patterns and predicting conditions, allow for more optimized soil irrigation, reducing unnecessary consumption. New NOS 5G smart cities • Vila Nova de Famalicão NOS has been supporting Vila Nova de Famalicão on the path to digital transformation that began in 2019. After a significant milestone in 2021, with the inauguration of the Urban Intelligence Control Centre that integrates a platform developed by NOS and a partner, and which aggregates the municipality's smart management tools, 2023 saw a new milestone, with the city making a strategic bet on NOS's 5G to promote smart mobility. This new stage takes advantage of the fact that the city has achieved more than 95% coverage for the entire population of the municipality with NOS' 5G, which allows, on the one hand, an optimized use of the innovative technological solutions already implemented, and on the other, an increase with new solutions. Thanks to the specific characteristics of this network and new measures that the municipality has implemented, with NOS and other partners, which include sensors, big data solutions and video analytics, residents can count on smarter and safer mobility. The city now has safe crosswalks (equipped with sensors and connected), which detect pedestrians and automatically activate a warning system for drivers. It also has other connected solutions that help detect mobility, traffic and parking patterns, helping authorities make informed decisions and enabling citizens to find parking spaces or make better use of public transport. The safe pedestrian crossings provided by Cway also help to save energy by managing the operation of the associated traffic lights only when people are present. 12 Cities or towns that over the years (cumulative value) have been impacted by smart management solutions implemented with NOS' support (4 of them correspond to projects or protocols that were active in 2023 and 3 are part of NOS' smart cities portfolio for the first time) Cities/ towns impacted 12 Cities/towns impacted 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 59 • Ponta Delgada Ponta Delgada has also joined NOS' list of 5G cities, combining the potential provided by the increased coverage of this technology with the implementation of technological solutions for mobility and intelligent urban management. NOS has invested more than 3 million euros in 5G infrastructure in the Azores over the past year, and the region has achieved approximately 100% coverage, which has enabled the acceleration of a series of smart city technological solutions in the city, involving sensors, cameras, and video analytics, and covering aspects such as: • Control and command centre equipped with an integrated territorial management and vision platform capable of real-time management and response to incidents on the ground; • Application for citizens to collaboratively report incidents; • Safe pedestrian crossings; • Mobility and smart parking analysis and • Smart waste management. Supporting the Portuguese business fabric to be more sustainable Sustainability business offering In the B2B segment, NOS positions itself as a partner for the digital transformation of its business customers, developing, together with the Portuguese technological ecosystem, multiple projects focused on capitalising on the gains that digitalisation offers to the competitiveness and sustainability of companies in different sectors. Besides smart cities, focused on supporting local management authorities, the company develops technological transformation projects with efficiency and sustainability gains for different business sectors, such as healthcare (telemedicine and telemonitoring) or Industry 4.0, and involving different offering types, such as remote support; managed transformation programs, or M2M (Machine to Machine) offerings. Whether through innovation in business models, dematerialisation of processes or experiences, or gains in operational efficiency, many of these initiatives lead to positive ESG impacts. In 2023 we highlight the launch of the NOS Smart Home solution for the real estate development sector. NOS Smart Home A smart, safe, and efficient home solution developed in partnership with Securitas, Alarm.com and Qolsys. The system integrates various automation features, including security and energy efficiency features, and operates with a user-friendly interface. Furthermore, the company has also been investing in technological partnerships aimed at developing new solutions specifically focussed on supporting companies in their ESG challenges, or enabling them to speed up their adoption, be it by saving on utilities (electricity, water, gas), adopting sustainable mobility solutions, or increasing renewable energy production. Some examples are solutions such as: • Fleet management (Follow Solutions) • Bike Sharing • Smart irrigation +2 In 2023 NOS supported two more cities to provide smart services to their citizens driven by NOS' 5G technology and services. Em 2023 a NOS apoiou mais duas cidades a 5G Smart Cities 5G 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 60 • Water distribution network management • Energy efficiency • Electric chargers and solar energy (EDP partnership) NOS' 5G as a driving force for greater health and inclusivity NOS remains committed to exploring and demonstrating the full potential of 5G technology and digital transformation to the business community and society, to encourage its adoption in favour of innovative business models and to benefit a more evolved and inclusive society. In 2023, in addition to smart cities, we highlight the development of, or participation in, innovative projects that have proved the potential of this technology for the health sector. This is the case with the "S@úde+Perto" project, as well as the "First remote ultrasounds scans performed via NOS 5G". • S@úde + Perto: 5G telemonitoring brings healthcare closer to 500 elderly people in the centre of the country This project, promoted by Hospital de Avelar in partnership with NOS and Hope Care, guarantees remote yet close monitoring of chronically ill patients, allowing them to anticipate health complications and react to emergencies. Through tele-health devices that use NOS' 5G network to transmit real-time information, biomedical signals are monitored, collected, and processed on a platform, and an alarm system is activated in case of deviations, which is monitored remotely by healthcare professionals. NOS' 5G ensures the system's connectivity and the quality of telecare appointments to monitor the situation. • Remote ultrasound scans via NOS 5G avoid patients travelling to remote areas Portugal's first real-time remote ultrasound system, using robotic technology, works via NOS' 5G network. ROSE - Robot Sensing for tele-Echography, developed by the Pedro Nunes Institute (IPN), in partnership with the University of Coimbra, the company Sensing Future Technologies and Hospital da Luz, provides remote ultrasound examinations, thus avoiding the need for patients to travel to the hospital. ROSE is equipped with two robotic stations, a set of ultrasound probes and communication structures running on NOS 5G, guaranteeing that the entire process is performed in real time, with instant feedback and without fail. This process optimises resources and, above all, improves access to healthcare in remote areas where there are no permanent specialised professionals. It also opens the door to new possibilities such as remote training or technical supervision. • 5G Health Conference 5G's relevance as an enabler of the healthcare sector was also demonstrated through the promotion of the 5G Healthcare Conference, organised by NOS and held in May 2023 in Lisbon. The purpose of the event was to debate and demonstrate the role of innovation and technology, leveraged by 5G, in the modernisation of healthcare services, promoting greater differentiation and effectiveness in meeting the needs of the population. As part of this event, NOS brought to Portugal the British neurosurgeon Owase Jeelani, world-renowned after the separation in 2022 of Siamese twins who were connected by their skulls using virtual reality, a real case of success in the combination of new technologies and healthcare. Other 5G potentialities in the healthcare area and other dimensions of social benefit which NOS has helped explore and demonstrate to the business community and society will be explored below in this sub-chapter under "Promoting entrepreneurship" and "Promoting literacy and digital inclusion". 500 Elderly people monitored remotely to prevent critical medical episodes, using NOS' 5G-supported telemonitoring solution Health telemonitoring 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 61 Sustainability in the Consumer Segment offering NOS is committed to promoting a positive social and environmental impact through the potential of technology and as a mobilising agent in its value chain. Through its products and services offering and associated initiatives, the company not only benefits its customers by promoting more efficient resource management, but also engages and influences them towards more sustainable choices. Evolution of the offering in 2023 Following the centrality of sustainability in NOS' strategy, the company has been progressively innovating its offering, with more efficient options from an energy, carbon, and circularity perspective. As has been the case in recent years, new solutions were also introduced in 2023. • UMA v2 box runs more efficiently Launch in December 2023 of deep standby mode on the UMA v2 box. A new automatically activated standby mode that reduces energy consumption by 10 times compared to "normal" standby mode. • eSIM Youth by WTF based on a 100% digital ecosystem NOS has once again innovated in the eSIM area, making it possible for a single QR code provided in digital formats to be used to generate multiple virtual eSIMs with different unique telephone numbers. The solution, which is groundbreaking worldwide, was developed in collaboration with IDEMIA, and NOS was the first operator to launch it on the market, in a pilot in August (during Youth Days). With this solution, NOS not only saves on raw material consumption (no longer using paper with the code), but also contributes to the digitalisation and convenience of the customer journey, achieving a 100% digital ecosystem. • Digital decoder eco packaging To ensure a more sustainable package, all the plastics inside the packaging of this equipment were removed, allowing for a saving of 4 tonnes/year of virgin plastic. With these new solutions and the maintenance of existing solutions, NOS has continued its strategy of reducing the use of virgin consumables, opting for recycled or more sustainable materials by design, and also by the strategic bet on the digitalisation of processes to reduce the ecological footprint of both customers and its own operations. Pre-existing offering of products and services with environmental benefits • One Purchase = One Tree The initiative, implemented for the first time in 2022, continued in 2023, with two sales campaigns (one in April and the other in October) whose sales of NOS products and services were converted into an additional 21,895 trees to be planted, adding to the more than 25,000 trees secured in 2022. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 62 • Equipment take-back Promotion of used equipment take-back for refurbishing (TV boxes, routers and hubs for residential and fixed service customers, and smartphones). In 2023 NOS reinforced its commitment to the take-back of used mobile phones by joining a sector initiative under the GSMA aegis, a sector pact to increase the take-back and refurbishing of mobile phones, which sets two ambitious targets by 2030, to be achieved by the signatories. • Eco SIM SIM Cards and packaging produced using recycled and recyclable consumables, saving 7 tonnes/year of virgin plastic. • Eco Rating on NOS Equipment Implemented at the end of 2022, it is a labelling system that allows the environmental impact of mobile phones to be assessed throughout their life cycle, following EU guidelines and standards. It helps NOS customers to be more aware when choosing their equipment and, at the same time, encourages suppliers to reduce the environmental footprint of the equipment they produce. • 100% Self-installed HFC network equipment It gives customers the possibility of installing their equipment themselves, without the need for a technician to come to their premises. In 2022, NOS ensured that this option covered all self-installable equipment in the active range of our HFC network, avoiding 400,000 km/year of travelling and corresponding emissions. • eSIM 100% Digital Woo Launched in 2022, this project made it possible to dematerialise the SIM card, avoiding Woo customers having to travel to have their card installed, in a 100% digital process, without consuming packaging, plastic parts and without the need for a logistics chain to guarantee its supply. • NOS Guaranteed Sale of refurbished smartphones. • Giga Router Wi-Fi 6 and Uma Remote Control using recycled material Giga Router Wi-Fi 6 with a plastic structure made from 100% recycled plastic and high energy performance; Uma remote control with a 100% recycled plastic structure and plastic-free packaging made from 100% recycled paper. • Paperless – eliminating paper in direct sales acquisition The processes which form the backbone of the sales circuit, when based on innovative and/or dematerialised models, also contribute to the sustainability of the commercial offering. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 63 NOS has been progressively digitalising the commercial approach and acquisition process in Direct Sales. This project gained momentum in 2018, with the introduction of tablets for the commercial team, allowing them not only to display NOS services and products in a more dynamic way, but also to complete the sign-up process 100% digitally, with receipts sent by email. This project has been consolidating year after year and by 2023 will have saved 26 tonnes of paper (compared to the 2018 baseline). The elimination of paper in direct sales comes within a broader context of progressive global digitalisation of NOS processes (internal and customer interaction), with the consequent elimination or reduction of associated paper consumption (paperless). Currently more than 83 % of NOS customers have already signed up to electronic billing. Alongside products and solutions and campaigns, NOS also endeavours to encourage and convey values of environmental awareness to customers by establishing delight dynamics. To this end, in 2023 NOS continued its protocol with EDP, which, in addition to providing immediate benefits to those who are NOS Convergent Packages customers and EDP Comercial customers (up to a 2% discount on energy and the chance to double their mobile data ceiling), also contributes to the future of the planet, as it has indexed the supply of green electricity produced exclusively from renewable sources. The partnership can be activated completely digitally and has no impact on the customer's loyalty period. These solutions, aligned with our 2021-2025 strategy, reduce customers' environmental impact. For more Information on the introduction of increasingly sustainable solutions in the products and services offering, and on their impact, is complemented, see "On behalf of the Planet". Promoting entrepreneurship NOS' contribution to innovation as a whole, including innovation at the service of sustainability, largely involves supporting entrepreneurship, which is also, in itself, a form of socio-economic contribution. NOS HUB 5G The Hub 5G is a collaborative and co-creative laboratory for the development of 5G at a national level, designed as a space for ideation, experimentation, and technological transformation. It is a space for training companies, start-ups, universities, and partners, bringing together and providing the most advanced technical capacities, teams, and resources. The project was born in 2022, driven by NOS' ambition to lead the development of the fifth mobile generation, and was supported by more than 20 partners, mostly technological, with Nokia and Accenture as founding partners, benefiting from the shared and complementary capabilities of the three organisations, and from the know-how and innovation transfer from the global network of dozens of international innovation hubs. 2023 was the first full year of operation, and during the year it recorded: • More than 150 customer and partner visits • Around 40 events • 3 training actions With the Hub's support, 5G use cases have been released, ranging from smart city platforms such as smart parking, traffic analysis, waste management or smart lighting, to telehealth applications, remote assistance products for industry with augmented reality or immersive experiences for tourism, among others. From its creation until the end of 2023, around 40 use cases have been released. • Launch of the 5G & Digital Transformation Test Bed ~40 xx no. of 5G use cases released with the support of the 5GHub, from its inception until the end of 2023 (roughly a year and a half) HUB 5G Use Cases released 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 64 This Test Bed, launched in July 2023 (marking the one-year anniversary of the HUB 5G), is part of the National Network of Test Beds and is the result of a consortium with Sonae MC and Wells, with INESC TEC, CEiiA and Ericsson as core partners. Over three years, it plans to support the development of up to 165 pilots, supporting start-ups and SMEs in the development of digitally-based products and services, helping them in their innovation cycles to transform their technology into commercially viable solutions. This initiative is also key to promoting the creation and transfer of knowledge by connecting relevant and experienced partners with start-ups, contributing to a more robust innovation ecosystem that is aligned with the real needs of the sectors. It will focus on innovative products or services using next- generation connectivity in key areas of the Portuguese economy and society: Industry, Retail, Health, and Smart Cities and Sustainability. For this purpose, the co-promoters will invest around eight million euros. • Launch of the Open Innovation program In November, as part of this 5G Test Bed, an Open Innovation program was launched, focused on supporting startups that are developing virtual or augmented reality solutions. The teams accepted will be able to count on NOS' transversal connectivity expertise and on the consultancy services of experts from the sectors covered, as well as the support of mentors. They will be able to develop pilot projects with benchmark companies and present their solution to national and international investors. The selected projects may also be included in NOS' solutions portfolio, taking advantage of its distribution channels. As part of this program, which has Unicorn Factory Lisboa, Armilar, Alaian, PWC and Unlimit as partners, mini events will be organised within the ecosystem involved to promote information sharing, such as tech talks, workshops, innovation breakfasts and sector pitch days. • NOS 5G Fund NOS also maintains the NOS 5G Fund, the first fund to have been created in Portugal, targeted at 5G technology. It is a fund created in partnership with Armilar Venture Partners, which manages it, and its mission is also to support start-ups, with a total of five organisations supported since their launch and start-up to date. • TECH4INNOV: The Present and Future of Innovation ANI, as promoter of the "TECH4INNOV" project, which aims to combine dynamics of knowledge transfer and valorisation for the economic fabric, creating and consolidating relations between academia and business, launched the Open Innovation Challenges, in partnership with NOS, Critical Software, GeoSAT and GALP. NOS launched two challenges. One of the challenges concerned home security enabled by 5G, leveraging the power of connected devices to improve home security. The second challenge, which won the initiative, centred on improving the performance of high-performance athletes through the use of Augmented Reality technology, and involved a partnership between NOS and the University of Évora. The researchers involved, besides receiving monetary support, won the chance to further develop their idea in collaboration with NOS. • Smart treadmill helps improve athletes' performance and prevent injuries The "Smart Treadmill" is equipped with an augmented reality platform which incorporates software, allowing athletes to perform training routines while responding to challenges in virtual environments. Sensors integrated into the treadmill analyse the athlete's movement, measuring parameters such as position, speed, force intensity and muscle response. This data allows the platform to infer walking, running, or jumping patterns, identifying movement faults to optimise performance and prevent injuries, while also contributing to rehabilitation. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 65 2.2.2 On behalf of the planet Overview The material environmental topics for NOS business are energy consumption and associated carbon emissions, and the circularity of the equipment and materials we use. In 2023, total energy consumption in our operation decreased by 4%, as a result of the reinforcement of the energy efficiency program, and the telecommunications service we provide consumed 13% less energy per unit of data traffic. Our approved Science-Based Target (SBT) commits us to reducing 90% of emissions from our own operation and 30% of indirect emissions from our value chain by 2030, compared to 2019. We are redefining our strategy for the procurement of renewable electricity, electrifying our fleet, and mobilising the value chain to ensure we meet this target. In 2023, we produced 9% less waste in our operation, and the overall recovery rate increased to 99,6%. We refurbished 528,000 customer equipment items in the fixed segment and 54% of the total number of TV boxes and routers we installed were refurbished equipment. Recognising the need to increase circularity in the mobile segment too, we joined other international telecommunications operators in adopting take-back and recovery targets for used mobile phones for 2030. Environmental strategy The telecommunications sector is both a key enabler of the economy's climate and circular transition and an energy and material resources consumer in its own activity. Our challenge is to minimise the environmental impact of our operations, while helping our customers reduce theirs, through increasingly advanced digital solutions that enhance productivity and reduce consumption and emissions. The material environmental topics for NOS business are energy consumption and associated carbon emissions, and the circularity of the equipment and materials we use. We monitor performance through an increasingly complete set of indicators, covering the entire value chain: from the production and installation of equipment by our suppliers; through our own operations; to the use of our products and services by customers. We manage environmental impacts through an integrated management system certified according to the ISO 14001 standard, implemented in NOS Group companies which account for 89% of consolidated turnover and 90% of total employees (2023 figures). Our environmental strategy -13% Reduction in telecommunications service energy consumption per data traffic between 2022 and 2023. Energy and Climate Number of boxes and routers refurbished for reuse in 2023. 528,000 Circularity 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 66 Energy and Climate Our approach to climate transition is built around two essential commitments: to increase the energy and carbon efficiency of the operation and the value chain; and to contribute to the decarbonisation of the economy, through innovative products and services that reduce customer emissions. These commitments are translated into quantified objectives, formally integrated into the NOS Next Generation 2021-2025 business strategy, and into the NOS Sustainability- Linked Financing Framework, which frames our issuance of sustainable financing instruments. Our approach to climate transition Our approved Science-Based Target (SBT) commits us to reducing 90% of greenhouse gas (GHG) emissions from our own operations (scope 1 and 2) and 30% of emissions from the value chain (scope 3) by 2030, compared to 2019 figures. As a founding member, in 2021, of the European Green Digital Coalition, we have also undertaken to ensure that our operation will be fully carbon neutral by 2040. We are assessing the extension of this commitment to value chain emissions and its alignment with the Science Based Target initiative (SBTi) requirements for the approval of net-zero targets. We continue to actively participate in telecommunications sector initiatives that support clear public policies aligned with 1.5ºC scenarios, particularly the European Green Digital Coalition, ETIS - The Community for Telecom Professionals, and the GSMA - Global System for Mobile Communications. Our journey has once again been recognised internationally, with the CDP Climate 2023 Program's Leadership rating, which assesses the performance and disclosure of corporate climate strategies. Risks and opportunities associated with climate change are integrated into the NOS risk management model. We have identified these risks and opportunities and plan to characterise them further through both a physical and transitional climate scenario assessment exercise, thus ensuring full alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). In 2024, we also intend to assess the implementation of an Internal Carbon Price, a decision support tool that we have already begun to explore. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 67 Main climate risks and opportunities 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 68 Ensuring an energy efficient operation In 2023, despite a 15% increase in the volume of data transmitted, total energy consumption in our operation decreased by 4% compared to the previous year, as a result of the all-round reinforcement of the energy efficiency program. NOS Group total energy consumption 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 69 More than 80% of energy consumption occurs in the technical infrastructure (telecommunications network and Data Centres) and around 90% of energy is consumed as electricity. The main challenge is to contain electricity consumption in the network infrastructures, while at the same time ensuring the processing of ever-increasing data volumes, with greater speed and a better customer experience. Our energy efficiency program also covers our other technical infrastructures, especially our dedicated Data Centres, as well as our support activities (buildings, stores, and fleet) and our cinema venues network. Our energy efficiency program 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 70 Evolution of energy consumption by area 2022-2023 Telecommunications Network In 2023, we accelerated the implementation of the energy efficiency program on our network, transmitting 15% more data than in 2022, while reducing consumption by more than 9 GWh. At 5G mobile access sites, we continued to activate intelligent energy management features (Power Saving Features, PSF), exploiting advanced usage prediction analytical models that maximise savings. By the end of the year, these features were active in more than 80% of our 5G network, generating savings of between 3 and 8% depending on the type of installation. The first stage of the project to optimise the air conditioning of technical rooms was also completed, with consumption reductions of around 2%, and HVAC systems were replaced with more efficient models in the main facilities. The implementation of free cooling solutions, which use outside air instead of mechanical cooling, also proceeded, reducing energy needs. Optimising Air Conditioning in Technical Rooms We have completed the first phase of the project to optimise the climatization of technical rooms, which will cover 144 fixed and mobile network facilities across the country (56% of our own rooms). The project involves three types of intervention: reinforcement of thermal insulation using blank plates; containerisation of cold corridors to prevent the air in contact with the equipment from heating up; and optimisation of the operating parameters of the HVAC systems. These changes allow the rooms to operate at temperatures recommended by international standards, without losing performance, and with reductions in electricity consumption of around 2%. By the end of 2023, over 60 rooms had been intervened, with an improvement of over 3% in the PUE (Power Usage Effectiveness) of the facilities covered. PUE is an energy efficiency indicator for IT facilities, calculated as the ratio between total energy consumption and the consumption of data processing, storage, and transmission equipment. The project will continue in 2024 with the implementation of a new ventilated rack solution that will further improve the energy efficiency of these rooms. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 71 The implementation of the mobile network infrastructure sharing program has been practically completed. This solution rationalises the use of resources, allowing for energy savings of 30 to 40% under similar configuration and traffic conditions, compared to a scenario in which each operator uses its own sites. A new network sharing agreement has already been announced for early 2024, which will bring new energy efficiency gains and economic and environmental rationalisation. Backoffice buildings The consolidation of our back office to a limited number of more energy-efficient buildings continued. In 2023, we occupied circa 10% less floor space and total building energy consumption decreased by 18%, compared to the previous year. We made significant investments in one of the main buildings, with the installation of our own means of producing thermal energy through heat pumps, modernisation of the air conditioning system, and replacement of lifts with models that store and use the energy generated during deceleration. Overall, it is estimated that these measures will reduce the building's annual energy consumption by between 10% and 15%. In other buildings, emergency lighting has been replaced with LED technology and the air conditioning systems have been optimised, while a wider range of interventions is being considered. Fleet In 2023, our fleet's energy consumption - fuel and electricity - increased by 10 % compared to 2022, a year that, up until February, still saw Covid-19 related restrictions to mobility. Nevertheless, total fleet energy consumption remained 17 % lower than in 2019 (and energy efficiency, expressed in GJ per km travelled, improved by 19%. The implementation of the fleet electrification plan in 2023 was affected by disruptions in the automotive supply chain, which delayed the planned vehicle replacement rate. At the end of the year, 24 % of our fleet was composed of electric vehicles (22. 5% plug-in hybrids and 1. 7% electric), an increase of 9 p.p. compared to the previous year. The number of chargers available in our buildings increased to 64. By 2024, we plan to have approximately 70 % of our vehicles electrified, consistent with the goal of having an fully electric fleet by 2030, and we are going to start implementing a new vehicle use policy that promotes a more rational, efficient, and safe vehicle use. Stores The energy consumption of our shop network decreased slightly (-2%) compared to 2022. Following on from the conclusions of the energy audit program - which identified a potential reduction of around 20% in total consumption - the lighting at service points was replaced, with brightness levels adjusted and more efficient LED technology introduced. At the end of the year, the program's implementation rate was almost 25%. Cinemas In 2023, NOS' 214 cinemas consumed +3% more energy than in the previous year, while at the same time registering a 29% increase in the number of spectators. A program is underway to replace air conditioning equipment with more energy-efficient technologies that will reduce electricity consumption while simultaneously eliminating the consumption of natural gas for heating. Energy efficiency of the telecommunications service To measure the energy performance of our core business, we use an energy efficiency indicator for the telecommunications service we provide, considering all the necessary activities for its provision, whether in our own facilities or those of third parties. Our goal is to achieve an 80% reduction in this indicator by 2030, compared to the 2019 base year, with an intermediate target of -70% by 2025. Telecommunications service energy efficiency indicator Note: Excludes energy consumption in own facilities which do not contribute to the telecommunications service (Data Centres dedicated to data processing and storage services and cinemas). In 2023, the Telco service's energy consumption remained practically the same, despite a 15 % increase in the volume of data transmitted, which shows the energy efficiency gains of 5G technology. The consumption per traffic indicator decreased by 13 % compared to the previous year, standing at 53 % below the 2019 figure, which means we are on course to meet the target we set for 2030 and the intermediate target for 2025. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 72 Energy consumption of the telecommunications service per data traffic Note: Considers all forms of energy consumed in Telco service provision activities (fixed and mobile network and support activities), at NOS and third- party facilities. Consuming renewable electricity In a business-as-usual scenario, with no renewable tariff contracting or use of renewable certification instruments, the carbon emissions associated with electricity production represent around 90% of NOS operation's carbon footprint. The commitment to consume exclusively renewable electricity is a key component of our decarbonisation strategy. In 2023, the renewable energy percentage of our total electricity consumption decreased to 29% 6 . During the year exceptional circumstances continued to arise in the energy market, which resulted in very high prices for electricity and Guarantees of Origin associated with renewable production. These circumstances prompted us to reassess the implementation timing of our 100% renewable electricity consumption target, ensuring it remains aligned with best practices and the timeline of our emissions reduction SBT (2030). To consolidate a structural and sustainable increase in renewable electricity use in our operation, we are exploring different market options and contractual models for both purchase and self-generation, namely the signing of long- term agreements (Power Purchase Agreements - PPAs), the contracting of electricity offerings from 100% renewable sources, electricity generation solutions at our facilities, or the unbundled purchase of Guarantees of Origin. At the end of 2023, four solar photovoltaic micro-generation units were installed in technical rooms of our fixed network, which will allow us to assess the potential for renewable self- generation at this type of facility. A larger solar photovoltaic generation system is scheduled for commissioning in one of our Data Centres in 2024. Our approach to renewable electricity 6 Figure corresponds to the renewable fraction in the energy mix of the suppliers' standard electricity product offerings. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 73 Mobilising the value chain The emissions that occur in the value chain, upstream (supply chain) and downstream (use of products and services by customers) of our own operations, represent, on average, around 80 % of our carbon footprint. Mobilising suppliers, partners, and customers to reduce energy and material consumption is essential to achieving our decarbonisation goals, but also our circularity goals. Our value chain's carbon footprint Supply chain Upstream, the most important category is the production of purchased goods and services, including the equipment in our technical infrastructure and the equipment we provide to customers. In 2023, we significantly deepened our knowledge of emissions associated with the production of customer equipment, using specific data from our suppliers. This data shows that, in 2023, the average carbon footprint of the production and transport of the mobile phones we sell was 8% lower than that estimated for 2019. For TV set-top boxes and routers, the reduction was 18 %. The reuse of equipment and the reduction of the amount of materials used also contribute towards reducing environmental impacts upstream in our value chain. In 2023, 54 % of the boxes and routers we installed were refurbished, thus avoiding the consumption and emissions associated with the production of new products. We also engage manufacturers in replacing raw materials with recycled versions, particularly plastic, with benefits in terms of carbon performance and production circularity. In collaboration with our logistics partner, we installed photovoltaic solar panels at the warehouse we use. In 2023, the first year of full operation, the system provided 32 % of the facility's electricity needs, reducing the use of electricity from the grid and avoiding emissions. In the last quarter of 2023, we launched the first stage of the ESG supplier evaluation system. The new evaluation survey was sent to a group of 174 suppliers deemed critical, one of the criteria for this rating being their estimated weight in the total emissions from the production of purchased goods and services. These results, which will be available in 2024, will form the basis for defining new reduction initiatives. For more information, see "Ethical supply chain management" 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 74 Use of products and services To reduce downstream emissions in the value chain, we are reinforcing the energy efficiency criteria of TV set-top boxes and routers, and developing engagement campaigns that promote greater use of the energy-saving features of this equipment. At the end of 2023 we began implementing a new deep standby mode in the latest generation of our cable boxes, which significantly reduces energy consumption. Deep stand by reduces energy consumption of TV boxes In December 2023, the new deep standby mode for UMA v2 TV boxes was launched. 20 minutes after the customer switches off the equipment, an advanced energy-saving mode is automatically activated that reduces standby energy consumption by up to 10 times. By the end of the first quarter 2024, this feature will have been installed in the entire UMA v2 equipment, and it is estimated that it will generate savings of around 10 GWh/year. The project will be extended to the previous model boxes during the second half of the year, generating additional energy savings. We held the second edition of the 1 Purchase = 1 Tree campaign and continued to promote specific content on our website about more energy-efficient use patterns for mobile phones and fixed service equipment. Based on the monitoring we conducted at the end of the year, the % of customers who put their TV boxes on stand-by has been increasing over time. Since 2019, the average annual energy consumption of the new boxes we have installed has decreased by 57% and routers by 23%. Average energy consumption of boxes and routers For more information on sustainable innovation and customer engagement see "Sustainability in the Consumer Segment Offering". Monitoring the carbon footprint In 2023, we improved the monitoring of our carbon footprint by reviewing the accounting methodology for value chain emissions (scope 3) and collecting specific information on the carbon intensity of our purchases. We prioritised the purchased equipment we provide to customers. By participating in the Eco Rating project, we now have data on the environmental impacts throughout the life cycle of most of the mobile phones we sell, including the GHG emissions associated with the extraction of raw materials and the manufacturing process. For fixed service equipment (set- top boxes and routers), we directly engage our suppliers in conducting Life Cycle Analyses (LCA) for the models we purchase. In 2023, 67 % of emissions from the production of customer equipment were accounted for with data from the respective manufacturers. We also conducted an extensive exercise to recalculate emissions from the production of the remaining supply categories (categories 1 and 2 of scope 3), increasing the granularity, improving the mapping, and using more appropriate sectoral carbon intensity ratios, with particular attention to the supply of equipment, infrastructure construction and service provision in the telecommunications network. To ensure comparability of results, we have recalculated scope 3 emissions according to the new methodology, starting from the base year of our reduction targets (2019). We will continue to further improve the value chain emissions accounting, namely by integrating the information generated by the new ESG supplier evaluation process, which began this year. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 75 NOS Carbon Footprint by scope and emissions category t CO2e 2019 2020 2021 2022 2023 ∆ 22-23 (%) ∆ 19-23 (%) Scope 1 - Direct emissions 7,320 3,569 3,514 4,421 4,545 3% -38% Fuel consumption - fleet 4,571 3,017 3,031 3,584 3,675 3% -20% Fuel consumption - facilities 119 85 94 99 94 -6% -21% Fugitive emissions of fluorinated gases 2,630 467 389 738 777 5% -70% Scope 2 - Indirect Energy Emissions – Market based method 43,064 30,929 35,630 11,471 47,686 316% 11% Scope 2 - Indirect Energy Emissions – Location based method 48,126 39,298 31,646 34,017 32,966 -3% -32% Electricity consumption - Market based method 42,083 30,226 34,856 10,725 46,969 338% 12% Electricity consumption - Location based method 47,146 38,595 30,872 33,272 32,249 -3% -32% Thermal energy consumption 980 703 774 746 717 -4% -27% Scope 3 - Other indirect emissions 310,880 261,085 265,179 237,023 191,033 -19% -39% C1 - Purchased goods and services 65,457 55,481 63,371 57,371 54,618 -5% -17% C2 - Capital goods 78,422 88,899 99,383 100,232 62,854 -37% -20% C3 - Energy, not accounted for in scope 1 and 2 11,815 10,027 12,315 12,751 12,158 -5% 3% C4/C9 - Outsourced logistics and transportation for multi-operator retail 338 310 334 321 284 -11% -16% C5 - Waste generated in operations 169 109 81 93 92 -1% -46% C6 - Business travel 733 153 39 413 874 112% 19% C7 - Employee commuting 1,181 429 164 213 168 -21% -86% C8 - Equipment on third party sites 7,110 5,628 4,888 4,245 6,071 43% -15% C11 - Use of sold products 142,905 97,579 82,844 58,053 51,775 -11% -64% C12 - End of life of products and packaging 137 203 225 311 308 -1% 125% C14 - Franchised shops 386 233 171 138 140 2% -64% C15 - Investment in affiliated companies and joint ventures 2,226 2,034 1,364 2,884 1,692 -41% -24% 4% Total scope 1 + scope 2 - Market-based approach 50,383 34,499 39,144 15,892 52,231 229% -33% Total scope 1 + scope 2 + scope 3 - Market-based approach 361,263 295,583 304,324 252,915 243,264 -4% -33% Scope 1 and 2 emissions: Our own operation Scope 3 emissions: Value chain 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 76 Scope 1 and 2 emissions In 2023, emissions from our operation (scope 1 and 2) increased significantly compared to the previous year. This variation is due to the procurement and cancellation of Guarantees of Origin (GOs) in 2022, which certified the renewable origin of 81% of the electricity we consume. In 2023, since it was not possible, due to energy market conditions, to procure and cancel GOs, the renewable percentage of our total electricity consumption decreased to 29% - renewable fraction in the energy mix of the suppliers' standard electricity product offerings leading to an increase in Scope 2 emissions. Analysing the 2022-2023 trend in a scenario with no purchase of GOs in 2022, scope 1 and 2 emissions in 2023 would have been 14% lower than the previous year. This evolution results from the combined effect of the reduction in energy consumption as a result of the reinforcement of efficiency measures (-4%) and the reduction in the average carbon content of the electricity consumed (-11%), a factor which we intend to increasingly integrate in our electricity procurement decisions and which we hope will also be reflected in supplier offerings. We are defining a new strategy for the procurement of renewable electricity that will bring our Scope 2 emissions back on track with the SBT reduction target for 2030. The electrification of our fleet by 2030 will make a decisive contribution to reducing Scope 1 emissions. During the transition period, we voluntarily offset emissions from fuel consumption through carbon removals delivered by a reforestation project of burnt areas in the north and centre of Portugal, which we continue to support. Scope 3 emissions Total scope 3 emissions decreased by 19% compared to 2022. The production of purchased goods and services (categories 1 and 2) and the use of customer equipment (category 11) - which combined account for around 90 % of the scope 3 total - were the main drivers of this change. Evolution of scope 3 emissions in 2022-20233 The 25% reduction in emissions in categories 1 and 2 is consistent with the end of the strong investment cycle in the technological renovation of our telecommunications network - particularly the expansion of the 5G mobile network, which involved the procurement and construction of new technical fixed assets -which was reflected in the associated emissions. The evolution in these two categories was also positively impacted by the improvement in the carbon efficiency of customer equipment production - which we were able to capture using quantification methods based on specific data from our suppliers - and the reduction in the need to purchase new equipment, due to the use of refurbished equipment. The 11% reduction in category 11 emissions was due to the increased energy efficiency of new customer equipment in the fixed segment (boxes and routers) and the growing % of customers using stand-by mode. Reducing customer emissions We aim to be an active agent in the climate transition of the Portuguese economy, and we have made it our goal to reduce customer emissions by more than our own operation's emissions by 2025. Our portfolio currently includes Communications and Collaboration, Cloud and Data Centre, IoT (Internet of Things) and Analytics solutions, which avoid travel, reduce energy, and water consumption, and provide secure and energy- efficient data storage and processing infrastructures. In 2023, we expanded this portfolio with a set of new solutions that capitalise on the additional features of 5G technology and significantly reinforce the environmental benefits they bring. Worth highlighting is augmented and virtual reality solutions such as Remote Assist. This solution ensures more efficient and faster remote support for operators in the field, using video and augmented reality, allowing them to solve a greater number of problems while interacting with a specialist, thus avoiding travelling and the associated carbon emissions. Quantifying the benefit, emissions-wise, of using digital solutions - climate enabling effect - is a complex exercise whose methodologies are still evolving. Through our participation in the European Green Digital Coalition, we are following their development, and we intend to conduct a first simplified application exercise on a selected set of our products and services. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 77 Our solutions to reduce customer emissions These products and services, recognised as eligible activities according to the EU Taxonomy of environmentally sustainable activities, represented 2% of NOS' consolidated turnover in 2023, already corresponding to 11% of turnover in the business segment. As the EU Taxonomy evolves, it is expected that NOS solutions will be recognised as activities that contribute significantly to European climate change mitigation and adaptation objectives. Maintaining an adapted and resilient network Our operation - in particular the technical infrastructure - is exposed to physical risks from climate change. We have identified and assessed these risks, and reinforced specific mitigation measures in our Business Continuity Management (BCM) program and Network and Service Oversight processes, including: • Resilience and response capacity assessment of our network and systems to failures, disturbances, or external events; • Contingency procedures in exceptional weather situations; • Identification of technical facilities in locations with a high fire hazard, with the adoption of additional vegetation clearance procedures; • Reinforcement of the energy autonomy of critical installations; • Adoption, in the main technical rooms, of more rigorous maintenance criteria adapted to the foreseeable impacts of climate change in Portugal (greater number of extreme heat days and higher average temperatures). In 2023, a risk assessment project was developed for the main technical rooms across the country, which included specific assessments for fire and flood risk, two of the main physical climate risks identified for our operation. For more information on the quality, availability and resilience of our network infrastructures, see "A resilient, reliable and available system". 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 78 Circularity For the current strategic cycle, we have made it our goal to consistently increase the level of circularity of our business between 2022 and 2025. Our commitment to circularity covers the consumption of materials and the production of waste in our own operations, but also in the use of our products and services, particularly the equipment we provide to our customers in the fixed and mobile segments. In 2023, we mapped and integrated the various actions already implemented in the organisation and began to set quantified objectives for specific areas, such as mobile customer equipment, following the commitment made by other GSMA member international operators. In a sector where technological renovation is constant, the challenge is to turn used equipment into resources, prioritising repair, and reuse and, when this is not possible, ensuring that it is recycled. We use licensed operators to route all waste not collected by municipal systems, and we have implemented selective collection systems which, in all our facilities, minimise the amount sent to landfill. Our approach to circularity 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 79 Increasing the circularity of our operation In 2023, we produced 9% less waste than the previous year and the overall recovery rate increased to 99.6%. The reduction in production was felt across all the main categories but was particularly noticeable in equipment and batteries (-19%), as a result of the completion of the renovation cycle of our mobile and fixed network over the last three years, which led to the replacement of many pieces of equipment. Operation waste production and recovery rate Telecommunications Network All the equipment withdrawn from our network is assessed: part is returned to the operation after refurbishment or reused internally for spare components; legacy equipment, with older technologies but potential for reuse in other networks, is sold on secondary markets; the remaining equipment is sent to recycling. In 2023, more than 27,000 network components were resold for reuse, avoiding the use of energy resources and materials needed to produce new equipment and/or components. Logistics In the logistics operation, we continued to redefine the shipping, internal operation and packaging processes, reducing the quantities of material used and replacing them with certified sustainable and/or recycled versions. The cumulative effect of the eco-efficiency measures introduced since the beginning of 2022 translates into a reduction in consumption of 34 tonnes/year of plastic, paper and cardboard, and the replacement of 61 tonnes/year of materials with recycled versions. In 2023 we also started to systematically monitor the quantities and characteristics of the materials used in our logistics centre. In 2023, 89% of the materials used were recycled (not including product packaging). Buildings and back-office processes We installed containers for the separation and selective waste collection in the pantries of our back-office buildings and replaced disposable coffee cups with reusable cups, with an 18% reduction in plastic consumption. The level of digitalisation of billing processes continued to evolve favourably, increasing efficiency, and rationalising the consumption of printing material and energy associated with transport. Digitalisation level of billing processes Stores In our store network, client contracts, which were previously paper-based, are now entirely digital. In 2023, we reinforced measures to reduce paper consumption by training employees and rationalising procurement processes. We have also significantly reduced the production of paper leaflets for in-store distribution. The measures implemented are expected to generate a reduction in consumption of around 5 tonnes/year. Cinemas In 2023, 47 % of tickets were sold through digital channels, an increase of 9 p.p. compared to the previous year and 30 p.p. compared to 2019. Giving new life to customer equipment To minimise the environmental impact of the production and end-of-life of the equipment we provide to our customers, we act on three fronts: reducing the amount of material incorporated and changing its profile; implementing take- back, refurbishment and reuse schemes; and contributing to integrated systems that collect and recycle equipment and packaging. Reusing customer equipment increases the circularity of our business, while reducing our carbon footprint by avoiding the emissions associated with producing new equipment. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 80 Materials reduction and sustainability The latest models of our cable TV set-top box and router are already produced with 100% recycled plastic casings. In 2023, we replaced virgin plastic with recycled plastic in one of our satellite TV box models and in all cable box remotes and their packaging. With this change we have avoided using more than 5 tonnes of virgin plastic per year. Take-back and reuse of fixed equipment The equipment used by our fixed service customers (TV boxes and routers) is collected, assessed and, whenever technically feasible, refurbished and reused. In 2023, 62 % of the equipment collected was refurbished for re-marketing, exceeding the target set for this year (48 %). Considering technological evolution and the planning of its introduction onto the market, we set annual targets for the rate of collected equipment that will be reused. The target for 2024 is 61%, and the target for 2025 is 63%. Take-back and recovery of customer equipment in the fixed service In 2023, 54 % of the total number of boxes and routers we installed at our customers was refurbished equipment. Take-back and reuse of mobile equipment In the mobile devices segment, take-back and reuse levels are still low: in 2023, we collected less than 0.5% of the devices we sold to customers in the same period through our take- back pilot project for used smartphones. All of this equipment was refurbished and reused or, when this was not technically feasible, sent for recycling. The sale of refurbished devices also represented a marginal share of sales in 2023. Recognising the need to increase levels of circularity in this segment as well, NOS was one of 12 international telecommunications operators to adopt targets for the take- back and recovery of used mobile phones for 2030. We are aware of the ambition of these goals and have already started preparing our sales teams and logistics circuits to meet this challenge. NOS teams up with international telecommunications operators to commit to reusing used mobile phones According to estimates by the GSMA - the international association for the mobile telecommunications sector - there are more than five billion unused mobile phones in customers' hands worldwide. With the aim of preventing the production of electronic waste and recovering valuable and scarce materials - including critical minerals and rare earth elements - 12 international operators, including NOS, made a take-back and recovery commitment in June 2023, adopting two quantified targets for 2030: • Take-back, through its own circuits, of used mobile devices in a number corresponding to at least 20 % of the new devices provided directly to customers; • Guarantee that 100% of used mobile devices taken back will be repaired, reused, or sent for authorised recycling through own circuits. If all unused mobile phones were recycled, enough cobalt could be recovered to produce batteries for 10 million electric cars, according to GSMA estimates. Contribution to integrated systems We are partners in integrated waste systems, through which we fund collection and recycling networks for all equipment we place on the market. Packaging waste is also sent for recycling through the integrated system managed by Sociedade Ponto Verde. Other Environmental Impacts Although not material, we also monitor and manage other environmental impacts of our operation. Protecting biodiversity and the landscape The presence of telecommunications network infrastructure can have an impact on the landscape and biodiversity, particularly outside urban areas and in high conservation value areas. Through our operational options and planning processes, we prevent or minimise these impacts. With the sharing agreement for the mobile access network in inland areas of the country, the implementation of which was practically completed in 2023, we are rationalising the use of infrastructures. This is a strategic decision that results in a better service level, with less visual impact, less land occupation, and less risk of negative effects on fauna and flora. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 81 Potential negative effects on the landscape are also mitigated through visual integration solutions, such as concealment chimneys in urban areas, or chromatic options adapted to the natural surroundings in rural areas. Whenever it is necessary to install new infrastructure in areas with special environmental sensitivity or adjacent areas, we implement additional protection measures, defined by the environmental authorities, namely the Institute for the Conservation of Nature and Forests (ICNF). Since 2021, we have supported a reforestation project for areas affected by wildfires in the municipalities of Fundão, Mangualde, Meda and Pampilhosa da Serra, in Portugal, using a mixed planting model of maritime pine, oak, chestnut, and other species. In 2023, actions to reforest burnt areas in Mangualde were conducted, mostly using hardwood plantations such as oak-roble oak and black oak, restoring water lines, reinforcing areas with scattered oak trees, and creating groves. This reforestation project combines carbon removal, biodiversity protection and natural resistance to forest fires. The CO2 removed from the atmosphere is monitored and assigned to the voluntary offset of unavoidable carbon emissions from the use of fossil fuels in our fleet, until it is fully electrified. Managing water consumption Our operation is not an intensive water consumer; however, this is a scarce natural resource, which we monitor and rationalise in all our facilities, including support buildings, the technical network, our own stores, and cinemas. Our Parque das Nações building in Lisbon is equipped with a rainwater harvesting system, which is then used in the irrigation and fire-fighting circuits. With the exception of this rainwater collection, the only source of water consumed in our facilities is the municipal supply systems. In 2023, there was a slight increase (+6%) in water consumption. We are implementing efficiency measures to counteract this trend: in stores, we have started installing timer taps and flow reducers, with 9 stores undergoing intervention by the end of 2023. In technical facilities, the replacement of air conditioning equipment, namely chillers, with more energy-efficient systems will have the added benefit of reducing water consumption. Total volume of water collected and % of water reused 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 82 2.2.3 Promoting Inclusion and Digital Literacy Overview Digital transformation will only result in a genuine evolution of society if it is full and inclusive. It is therefore essential to contribute to measures that promote widespread and informed access to digital technologies, with a focus on the most vulnerable audiences, which is the main objective of NOS' social responsibility actions. Within the scope of the Social Responsibility Program, and its response to strategic sustainability commitments, in 2023 NOS continued to strengthen its contribution with: • the ZER01 digital training project, which has evolved to reach more students, with a greater geographical distribution in areas that are essentially decentralized. This high-impact program brings NOS closer to the literacy and training target set out in its ESG strategy; • other initiatives and projects, the main focus of which is to use NOS technology (e.g. 5G) and services (communications and cinemas) for social development. As a result, around 40 institutions were supported by all the support and social responsibility initiatives developed by NOS in 2023, and more than 8,000 people were impacted by initiatives to develop the skills of the future and social integration through training (one of the main focus areas). Contribution of the Social Responsibility Program NOS' mission is to connect everything to everyone through technology, and its ambition is to contribute to a digital transformation that is fair, inclusive and which generates development and a positive social impact. One of the key pillars of NOS' ESG strategy, it embodies and makes tangible the company's commitment to promoting Digital Inclusion: "For a digital future - Promoting the digital transformation of society, through democratic access to technology and the inclusion of the most vulnerable audiences". All of NOS' activity is implied in this commitment: • The investment in network infrastructure for greater coverage and higher quality; • the strategic bet on leveraging 5G technology, always at the forefront of innovation and open to society, through various initiatives to demonstrate the potential of this technology; • the consumer and business segment offerings, with various market solutions that directly contribute to social inclusion (such as the social tariff, some smart city solutions, or accessibility solutions for people with special needs). However, being a responsible brand, NOS has also set a target and runs a specific social responsibility program which complements this action, and which includes actions aimed at digital inclusion and training of vulnerable groups, and support for the technological structure of third sector institutions, as its main intervention focuses. NOS' Social Responsibility Program develops a dynamic and evolving approach to contributing to the strategic pillar "For a digital future", focused on access to technology and training, while simultaneously cutting across the various spheres of society to contribute as much as possible to the social inclusion of vulnerable populations (including children and young people, health, animal protection and humanitarian support in general, among others). The work is conducted through three fundamental axes. 7 Projects supported by NOS which involve not only the development of digital competences but also training in ICT areas, therefore including the ZERO1 Project. The figure does not reflect the people impacted by all the projects developed/supported, as it was not possible to obtain information for some. people impacted in 2023 by skills for the future development initiatives and social integration through training +8,000 More training 40 Institutions supported in 2023 under the NOS Social Responsibility Program Supported associations 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 83 Action axes of NOS' social responsibility program ZERO1 project to promote new skills This project responds to the commitments undertaken under the strategic pillar of sustainability mentioned above, of: • Defining a program focused on promoting digital literacy and access to technology for vulnerable groups; • Define a program aimed at training young people and professionals in the digital skills of the future. ZERO1 Project is NOS' main digital training initiative, as part of its Social Responsibility Program, and is evolving to increase its impact. The initiative was created in partnership with ENSICO to provide computer education to schools across the country. With the second edition taking place in the 2023/2024 school year, the total impact of the project from the beginning to date has increased to 1200 students. After a first year in which 400 students from 18 elementary and middle school classes received weekly computer lessons, NOS stepped up its investment in this initiative, focusing its intervention on geographically decentralized areas with greater socio-economic challenges. In the second edition, the project now covers 54 elementary and middle school classes in 13 schools in the Arcos de Valdevez, Bragança, Gondomar, Vila do Conde, Mirandela and São João da Pesqueira school groups. The project now also includes specialized and accredited training (with the Portuguese Mathematical Society) for teachers, in order to increase the number of professionals qualified to teach computer classes in their schools, with a total of 45 being trained. Evolving and with prospects for expansion, this project is intended to be one of the main contributors, by 2025, to achieving the literacy and training target stipulated in the 2021-2025 strategic sustainability cycle: to impact 10,000 people through support and initiatives that promote social inclusion, digital literacy, and the development of new skills. Elementary and middle school students impacted by the ZERO1 Project from the first edition until the end of 2023 1,200 Digital training 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 84 NOS also supports other initiatives which help to promote digital literacy and skills for vulnerable groups, such as EUSOUDIGITAL, a program which helps Portuguese adults who have never used the internet, promoted by MUDA - Movement for Active Digital Use. Support for third sector institutions to strengthen communications infrastructure One of the preferred courses of action for social responsibility is to support third sector institutions to strengthen communications infrastructures, by providing or offering discounts on telecommunications services and equipment. This support is either supported by medium or long-term protocols, or one-off support. In this context, many associations are supported, including, but not limited to: • The Vida Norte Association (which supports pregnant women and babies in fragile situations); • The SOS Voz Amiga (an emotional support line that offers help to all those who find themselves in situations of suffering caused by loneliness, anxiety, depression, or suicide risk); • The UAPT Refugees Association (supports refugees from Ukraine through various social responses and is currently building a War Wounded Rehabilitation Centre); or • The Stand4Good Association, which supports university students in a proven situation of financial hardship, with the aim of combating school abandonment and promoting youth employability, helping them to prepare for their future through quality educational and professional opportunities. Many of the supports provided this way, or through donations, go to projects or initiatives for social integration through training. This is the case with the Stand4Good Association; the recurring support for the Rotary Club Lisboa- Centennarium, through the scholarships it awards to low- income students; or the Bagos d'Ouro Association, which NOS has also supported for several years, a support it reinforced in 2023 to help the association reach 30 more young people in the municipality of Mesão Frio, located in Douro, one of the poorest in the European Union. Considering the various supports given to associations and social integration projects through training, in 2023 NOS had an impact on more than 8,000 people. 5G for GOOD – the contribution of next- generation technology 5G also serves the community with initiatives specifically focused on social impact. As part of 5G's social responsibility and leadership objectives, the transformative potential of this technology and all its unique features are used to promote well-being through solutions that break down different kinds of barriers and do what nobody else has done. In 2023, we highlight three initiatives: • Virtual climb NOS, with the support of Salvador Association, provided João Sousa, a quadriplegic since 2016, with a unique experience that allowed him to feel the thrill of climbing again. With 5G smartphones and a 360º camera, it was possible to create this moment by combining two locations and several people who were 270 km apart. • 5G festival-goer NOS used 5G to provide a different experience for a patient with Amyotrophic Lateral Sclerosis (ALS), who has very limited mobility. José was the first "5G Festival-goer", experiencing all the emotions of NOS Alive live using a virtual reality headset that projected the real-time images captured at the festival by his friend and therapist. The initiative was developed by NOS, with the support of APELA. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 85 • Christmas event at São João Hospital in Porto For the second straight year, NOS' 5G animated Christmas at the São João Hospital, this time with the broadcast of the musical "Panda e os Caricas no Mar", with the children in mind. The real-time show, which took place in the Rosa Mota Pavilion, was captured by a 360 camera, and transmitted live to the virtual reality headsets worn by the children admitted to the hospital, guaranteeing an immersive experience that was very close to reality, allowing the children to experience taking part in the show and interacting with the artists, as if they were really on stage. The contribution of cinemas NOS Cinemas promote, support, and advertise various social initiatives. In 2023, some examples were: • an exclusive Christmas campaign in which part of the box office revenue generated by the Disney film 'Wish: The Power of Wishes' was donated to Make-a-Wish, to help make wishes come true for children and young people with serious illnesses; and • the promotion and offer of an exclusive cinema session for young people from the Campanhã Youth Centre (for some of them it was their first time at the cinema), which gave away 36 tickets and popcorn. The overall impact of the Social Responsibility Program These and other support examples, covering various institutions and action areas (e.g. support for the Sempre Mulher Race promoted by APAMCM, or WTF's Christmas solidarity campaign, associated with its extra data offering for customers during Christmas, which will convert subscriptions into a donation for ZERO environmental association, used to plant 5,000 native trees/shrubs in an area heavily affected by the 2017 fires) determined an overall impact of NOS' Social Responsibility Program of: • 40 institutions supported; and • More than 600 thousand euros of support Other inclusion support dynamics - accessibility for special situations Connectivity is essential to prevent info-exclusion and social exclusion. NOS therefore offers a number of solutions for the consumer segment that promote accessibility to its products and services for customers in situations of special need. Although there are no specific regulations, in 2023 a partnership was developed for service using a video sign language interpreter for customers with hearing disabilities by dialling 12472. For customers with a 60% or more disability, NOS has special conditions for service subscriptions. A specific page has been created on the site for this customer segment. NOS also has a range of solutions for people with hearing and visual disabilities, including: • subtitles for the hearing impaired on video on demand (VOD) • provision, in the Video Club, of Portuguese classics with audio description. • provision of a remote control designed for an easier handling by visually impaired or blind people: a tactile indicator on button 5 to situate the Customer at the centre of the numpad; raised "+", "-", volume button, "˄" and "˅" arrows, and channel change button. Central and differentiated voice feature button to allow easy tactile identification and different materials used in the construction of the remote control that enable the various features to be identified. +600 thousand euros of community support under the NOS Social Responsibility Program in 2023, impacting 40 social institutions Community support 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 86 • The "UMA" Box includes a voice search feature that enables a number of simple actions to be performed without complex interactions. To do this, users simply need to be UMA v1 customers or higher and have the new remote control. By accessing this voice search function, it is possible to access the catalogues of audiovisual services on demand, as well as search within these catalogues. • NOS allows customers to connect Its offering with Apple TV, thus giving them access to the platform's features, which include VoiceOver; Switch Control; Hearing; Type to Siri; Siri, among others. Support to Portuguese culture and cinema NOS promotes other relevant social dimensions which help dynamize the national economy and society. One of these is the support for Portuguese culture and cinema. The promotion of "Encontros do Cinema Português" (Portuguese Cinema Meetings) is the most important initiative supported by NOS in this area. The eighth edition of this event was held in 2023. A total of 55 projects from Portuguese productions were presented, in what was the biggest edition ever of the event organised by NOS Audiovisuais, in partnership with ICA - Instituto do Cinema e do Audiovisual. Attended by more than 200 people from the national film production sector, this edition was held under the motto and theme of the closing debate: 'How can the public's relationship with Portuguese Cinema be improved?' With the aim of giving a stage to national film production and promoting reflection, since 2016 around 300 projects have been presented at the "Encontros do Cinema Português" and around 1,600 representatives from the sector have taken part. 2.2.4 We support partners and boost the local economy Overview NOS works closely with a wide range of partners and suppliers. A collaboration that: • Boosts the national economy, promoting mutual growth; • Promotes innovative agents and solutions; • Promotes the development of skills and alignment with NOS' ethics and conduct principles; • Is continuously improving. Supply and Economic Boost NOS' activity plays a key role in promoting an extensive network of suppliers and partners. The procurement conducted by NOS has a significant impact on boosting the national economy, creating jobs, and generating revenue. In 2023, the company collaborated with more than 6,100 suppliers, totalling a procurement volume of just over 1,421 million euros, of 86.1% corresponds to national suppliers. The most relevant supply areas are associated with the eletronic communications sector, which represents the most substantial share of payments to suppliers (86% in 2023), and more specifically, with the acquisition of the spectrum licence and 5G technology-related equipment, interconnection costs, IT equipment and services. This amount of transactions with the supplier network reflects NOS' potential for economic stimulation in 2023. 1,421 Volume of purchases (M€)) of the total value of purchases from domestic suppliers in 2023. 86% Local supply 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 87 Partnership Ecosystem: An Engine for Innovation and Development NOS fosters a broad ecosystem of partners, which it considers to be a catalyst in the achievement of its strategic priorities. These partnerships boost the company's ability to deliver a diversified and innovative value proposition, favouring the sustained development of its business and the partners involved. The establishment of partnerships is fundamental to strengthening NOS's capacity to deliver technological innovation, supply model innovation and sustainable innovation. To this extent, NOS' partnerships not only positive impact its activity and that of its partners, but also positively contribute to technological, environmental, and social progress, benefiting customers and Portuguese society as a whole. NOS partnerships are ranging and include: • Development and testing of new solutions to promote a better technological footprint, including sustainable innovation projects, in partnership with universities and research & technology centres. • Fostering of technology-based entrepreneurship: the company works with several incubators accelerators and supports startups and scaleups, especially Portuguese ones, such as Kit.Ar or Neadvance, contributing to the development of the Portuguese Innovation ecosystem. • Combined offering with major technology players: NOS collaborates with companies such as AWS, Microsoft, or Google to bring the latest trends in innovation to Portugal and offer innovative solutions to its customers. These partnerS are a determining factor in NOS' contribution to the digital transformation of the national business fabric. • Offering diversification and complementarity: NOS works with partners such as Securitas or EDP to offer adjacent benefits, products, and services to its customers, such as alarms or renewable energy. Throughout the report, concrete examples of the benefits resulting from these partnerships are quoted, with special focus on the section: "Products & Services with Sustainable Innovation". " For more information on technological partnerships see the NOS website Empresas/Transformação Digital/Transformação de Empresas/Parceiros Tecnológicos. For more information about our approach to innovation see the Nos institutional website institutional/A NOS/Inovação Supply Chain Management Promoting Evolution and Alignment NOS invests in the continuous improvement of suppliers and partners, as crucial links that help ensure operational excellence and ensure the provision of a good service to customers. NOS also requires them to align themselves with the ethical and environmentally and socially responsible conduct principles established in its framework of policies and guiding codes. The requirements and principles established in NOS' policy instruments and codes, and the communication, training and evaluation processes implemented, serve as a driver for alignment and improvement of the service provision to the company, while also having a positive impact on the internal management standards of those players, and/or on the standards and skills of their employees. They are therefore likely to be reflected in potential added value that goes beyond the strict context of their relationship with NOS. On the other hand, the results of the evaluation process of supplies/services provided are communicated annually to suppliers, and those companies that obtain higher ratings can use these results as a driving force for quotations in supplier selection processes with other companies for whom the propose to provide services, which could be reflected in a competitive advantage for these processes. 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 88 2.1 2.2 We build a Better Future 2.3 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 89 Supplier/Partner Training Without prejudice to other partner training programs, the most common and recurrent are on ethics and conduct, information security, occupational health and safety, environmental management and sustainability, and commercial and customer service techniques. Training in environmental management and sustainability The sustainability and environmental management topic is addressed both in training courses for own and franchised stores and in the NOS Academia online platform targeted at sales/commercial teams. Improvement processes developed or under development in 2023 Since the end of 2022 and 2023, programs have been developed that will strengthen NOS' ability to identify and influence its supply chain's alignment with its principles, innovation mindset, quality, and sustainability standards.: • Supplier ESG, Security and Privacy Performance Evaluation System (first evaluation started in 2023, covering critical suppliers). • Supplier Relationship Management (SRM) program (under development and to be implemented during 2024). Programa de “Supplier Relationship Management, SRM” (em desenvolvimento e a implementar no decorrer de 2024). These tools, as well as the strategic bet on more agile procurement processes using AI, will contribute to increasingly efficient procurement and closer relations with suppliers and partners. It is expected that these processes will also contribute even more effectively to improving the skills and development of the companies and employees of suppliers and partners. The chapter "We assume responsibility" provides more detail on the practices and mechanisms that contribute to ethical management in the supply chain (implemented, developed and under development). Supplier Relationship Management (SRM) The procurement team has been improving its processes, driven by systematic feedback gathering processes from both internal stakeholders (Business Units) and external stakeholders (suppliers). These involve satisfaction surveys on the consultation procedures in which they participate and assess improvements that may be needed following this process. They also reflect a "Supplier Relationship Management (SRM)" program that has been under development throughout 2023, with implementation planned for 2024. The aim of this program is to tighten relations and increase the input and engagement of suppliers/partners in the innovation processes that characterise NOS' business model. The SRM is to be interlinked with the ESG supplier evaluation process, by training internal stakeholders ( procurement team and others) and external stakeholders (suppliers/partners) in how the ESG evaluation system should be applied and its results maximised (e.g. training suppliers who show shortcomings in these areas); through events among the network of participants to recognise and share good practices; among other things. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 90 In 2023, NOS management continued to guide decision-making by the "management commitments to stakeholders", which structure the management approach focused on creating shared value in the long-term. IN 2023, NOS remained committed to the principles of ethics and conduct in its operations and supply chain, having developed a new ESG evaluation system for suppliers. It continued to implement its risk management and security & privacy models. It also continued to implement and monitor its sustainability strategy progress and to improve management so as to better manage material impacts. 2.3 We assume responsibility Summary NOS' responsible management model creates value for all stakeholders across the value chain Contribution New Security & Privacy Framework The launch and publication of the new "S&P by Design 2.0" framework was accompanied by a training program, aimed at employees with S&P Pivot roles and held over 17 sessions (13 on- site and 4 online). Sustainability Strategy and ESG Scorecard We are proceeding with the implementation of the ESG strategy. The ESG Scorecard metrics allow us to measure progress and identify improvements, to maximise the creation of shared value. First ESG evaluation for suppliers As part of the new ESG performance evaluation system for the supply chain, we launched an ESG evaluation for 174 suppliers. Highlighted facts • Strengthen the responsible management model, adjusting systems and tools to further progress in managing the impacts of the operation and value chain. • Continue to subscribe to initiatives and adopt ESG benchmarks, such as the CSRD Directive. In this context, the focus will be on analysing dual materiality and the procedures which are required by the new ESG legislation. Future focus Clarification requests or concerns about compliance with the Ethics and/or Conduct Codes 91% Employee satisfaction with NOS' ethical conduct 16% Performance highlights 491 Number of critical suppliers covered by the new ESG evaluation model. Electromagnetic radiation measurements taken at mobile network sites 174 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 91 2.3.1 Stakeholder Engagement and Creating Shared Value Overview Creating value with stakeholders is key for the development of NOS' business. • In 2023, NOS' management continued to guide decision-making by the "management commitments to stakeholders", which structure the management approach focused on creating shared value in the long term. • NOS continued to implement the 4 stages of our stakeholder management model, which allows us to understand and integrate stakeholder concerns and expectations into the Group's processes and operations. • Regarding the topics most valued by stakeholders, we found that, in 2023, the topics that impact a greater number of stakeholder categories are: network coverage and quality; products and services with social and environmental benefits; energy efficiency and renewable energy; and EMF prevention and exposure. • For these topics, along with areas which are of concern to a particular stakeholder category, NOS has continued to integrate the appropriate procedures into its management, to identify opportunities for performance improvement, and to report on the progress it has made on these topics via various communication channels. • NOS also continued its partnerships, as well as the benchmark initiatives to which it is a signatory, in the following areas: Sustainable Society; Climate; Human Rights; Strategic Partnerships; Support for Culture. Our ambition of remaining the best telecommunications and entertainment business group in Portugal makes us a player that contributes to a better society and economy, creating value for the stakeholder ecosystem with which we build strong and trusting relationships. Management team commitments The mapping and ranking of our stakeholders are a process that has taken place in the stage that precedes each stakeholder listening process. To identify the main categories, we used the influence and dependence level as criteria, following the methodology of the AA 1000 SES standard. The management of the Group's positive and negative impacts on the value chain in which we operate is a commitment we have established with our stakeholders, and which is reflected in our management structure: in our governance, in our development strategy and in the policies and programs that structure our operation. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 92 Costumers We place our customers at the centre of our actions and decisions, continually seeking to respond efficiently and effectively to their needs. We connect families, companies, and the country with state-of-the-art telecommunications services We constantly surprise our customers with relevant innovation, anticipating their needs People & Organisation We maintain a non-negotiable commitment to ethics, rigour, inclusion, and meritocracy at all times and in all contexts. We promote a sustainable work-life balance, building the foundations for more sustainable working models adapted to the new reality We are committed to retaining, training, and attracting talent, seeking to ensure skills for today's and tomorrow's challenges. We believe in the value of diversity and are committed to strengthening our commitment to an even more inclusive future Sustainability We have an ambitious ESG agenda, supported by our management team, embraced by the entire organisation, and promoted across the company We play a central and active role in the economic and social development of the regions where we operate, with particular focus on digital access, inclusion, and literacy. We are committed to responding assertively to climate challenges, actively promoting the accelerated transition to a clean energy-based reality. Our ultimate goal is to create sustainable value for society Shareholders We maintain a culture of excellence in operations, rigour in delivering results and discipline in managing our assets and the investments we make We comply with the commitments we made to our shareholders, maintaining a solid financial performance We are optimistic about the future and ambitious in our goals as a company Partners We are fair and transparent in our relations with all our partners, seeking to reach agreements that maximise the value generated for all parties We demand that our partners have an operating philosophy and values that are compatible with ours Transformation We do not settle for the status quo and continually challenge the pillars of our operation, seeking to evolve towards an increasingly efficient operating model. We are committed to anticipating relevant context and paradigm changes, focussing on the endogenous and exogenous dynamics of our operation. Our strategy is adaptive and dynamic, translating new opportunities and challenges into concrete, actionable strategic responses for the organisation 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 93 Purpose of our approach to stakeholders We created a stakeholder relationship model, which we implement on an ongoing basis, to promote the creation of shared value and the establishment of trusting and responsive relationships. The stakeholder categories that are integrated in the NOS stakeholder relationship model reflect the main influence and dependency relationships with the stakeholders, considering the characteristics of NOS' business. The model is organised into four guidelines, which cut across different levels of engagement, from monitoring to cooperation. These allow us to map the current concerns and future expectations of the stakeholders, which may substantiate new risks or opportunities, and to use them as input for informed decision-making. They also enhance the creation of shared value and the establishment of trusting and responsive relationships. It is also our purpose, within the scope of accountability towards our stakeholders, to report, with materiality and balance, and cooperate in building a more sustainable value chain, and therefore promoting shared value. A systematic and responsive interaction allows identifying and anticipating risks and opportunities and establishing the necessary bonds of trust to enhance the creation of shared value in the long term. Implementation of the stakeholder engagement model is conducted by each of the functional areas responsible for interfacing with each category of stakeholder. The satisfaction of critical stakeholders regarding NOS, such as customers, is one of the criteria included in the performance evaluation of employees with customer interface responsibilities. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 94 1. We are attentive - what matters most to our stakeholders The regular and systematic engagement of our main stakeholders allows us to understand how we impact them, as well as their expectations and needs. The subsequent analyses we conduct allow us to obtain an integrated view of our impacts, which we then use to support business management. Stakeholder listening is conducted by each of the functional areas. For some stakeholder categories, such as shareholders, it is conducted centrally by the Investor Relations and Sustainability team. In other cases, such as with customers, NOS is constantly listening to customers in different segments. The listening process is conducted by different functional areas, considering the customer segment and the motive or purpose of the listening process, which can occur either in an after-sales context or as part of a standardised listening process. The NPS is one of the indicators that NOS uses to measure customer satisfaction. It also has specific customer satisfaction surveys to respond to specific customer journey events. It also conducts an employee satisfaction index. The results of all these indicators are analysed in specific forums with senior management and directors. The analysis process for the results of these tools allows progress to be monitored in a multitude of parameters, and also includes the identification of opportunities for improvement in the management model and existing programs/initiatives aimed at improving performance. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 95 To pi cs / Shareholder Category Customers Shareholders and Investors Employees Partners and Suppliers Government and Regulatory Authorities Community Industry Good Corporate Governance Practices Good practices in tax matters Cybersecurity Clarity of customer information and contractual conditions Network coverage and quality Combating corruption Operational and financial performance Career development and assessment Diversity and inclusion Energy efficiency and renewable energy (important for Corporate customers) Greenhouse Gas Emissions (important for Corporate customers) Innovation Social Responsibility Policy Anti-competitive and market practices Preventing exposure to electromagnetic fields Products and services with social and environmental benefits Local Development Projects Projects that promote sustainable consumption and lifestyles Protection & privacy Recycle used customer equipment Remuneration and benefits Troubleshooting contracted products and services Respect for Human and Employees' Rights Shareholder return Health and well-being Transparency and equitable treatment Legal and regulatory compliance Network resiliency and emergency response Price competitiveness Products and services for customers with low incomes or special needs Volunteering 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 96 2. We integrate - how we respond to stakeholder concerns The management choices we adopt aim to align NOS with the expectations and needs of stakeholders, maximising the creation of shared value. Policies, programs, and measures which respond to the positive and negative impacts associated with NOS' value chain are assessed on a regular basis. After each assessment, we endeavour to make the necessary adjustments to improve the results they generate. Among the measures NOS has implemented to respond to the impacts of our operation, we highlight the following: Needs/ Expectations NOS responses § Cybersecurity § Protection & privacy § Maintenance of ISO 27001 Certification § Security & Privacy programs and processes § Partnership for new security solutions § NOS Safe Net § Career development & assessment § Health and well-being § Remuneration and benefits § Maintenance of ISO 45001 certification § Remuneration and benefits policy § Performance and Development Model § NOS Campus § Health and well-being program § Climate and satisfaction survey and associated improvement plans § Innovation § Promotion of entrepreneurship § Projects that promote sustainable consumption and lifestyles § Products and services with social and environmental benefits § Greenhouse gas emissions § Recycle used customer equipment § Energy efficiency and renewable energy § Preventing exposure to electromagnetic fields § Products and services for customers with special needs or lower-income § Local development projects § Vo luntee ring § Social Responsibility Policy § Maintenance of ISO 14001 certification § Environmental goals and targets § Development of products and services that respond to social and environmental challenges § Monitoring plan for electromagnetic radiation § Investment on 5G technology, IoT and Advanced Analytics § Projects and partnerships to promote the development and digital transformation of companies and institutions § Offering for people with special needs and other special situations § Cooperation protocols with municipalities for Smart Cities § Co-financed innovation projects for sustainability § 5G Fund § Tr oubl esh ooti ng c ontrac te d produ cts and ser vice s § Network resilience and emergency response § Clarity of customer information and contractual conditions § Network coverage and quality § Maintenance of ISO 9001 certification § Investment plan to increase network resilience and emergency response § Investment plan to expand network coverage and quality § Implementation of a customer autonomy model for troubleshooting, with the corresponding digitalisation of processes § Principles of responsible communication § Communication plan for systematic adaptation of communication content § Legal and regulatory compliance § Good Corporate Governance Practices § Good Tax practices § Anti-competitive and market practices § Preventing and combating corruption § Price competitiveness § Respect for Human and Workers' Rights § Diversity & Inclusion § Tra nsp arency an d eq uita ble treat ment of par tne rs § Code of Ethics and other policies assumed by NOS § Ethics action and training plan § Risk management Policy § Internal audit program § Ta x p ol ic y § Commercial discount plan for extreme situations § Statement of commitment to diversity and inclusion § Gender equality plan § Involvement in various diversity and inclusion initiatives (e.g. Women Empowerment Principles) § Financial performance and shareholder return § Strategic plan and execution § Budget control § Dividend distribution policy 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 97 3. We communicate - the channels we use in engaging with our stakeholders Engagement with stakeholders uses a variety of means, depending on the engagement purpose and the target audience. In this context, we complement the use of more cross-cutting channels, such as the website, with more specific ones, such as investor roadshows. On the other hand, we select the most appropriate tools for the different engagement levels: the annual report or internal and market publications are the media of choice when our priority is to inform. The employee climate survey, customer satisfaction surveys or partner/supplier surveys are all examples of the tools we use to gather feedback. In other cases, the engagement level is marked by the participation of the stakeholders involved, such as employee welcome sessions or meetings with the regulator. The frequency with which we communicate also depends on the purpose of the interaction. This is why we use communication channels which are permanently activated, or on a daily basis, such as the website, Apps, or stores, for example, as well as mechanisms which operate as campaigns with a specific regularity, on an annual or even supra-annual basis, such as the listening process developed to identify priority sustainability issues. Stakeholder listening process has taken place during the planning stage of each new strategic cycle, most recently in 2020, as part of the planning for the strategic cycle that started in 2021. In other cases, it can also occur on demand, in response to the specific needs of each moment, as is the case with some direct contacts with the regulator. The next stakeholder listening process will take place in 2024, as we detail in the material sustainability topics section of the report. Without prejudice to the departments/areas ensuring the management of relations with certain groups of stakeholders under their more direct responsibility and in coordination with the members of the Executive Committee within the scope of their respective areas (as is the case of Human Resources with Employees, or Purchasing with Suppliers), the application of the stakeholder relationship approach, described above, is a cross- cutting responsibility to the entire organization. It is headed by the global commitments of the management team towards the stakeholders and supported by various communication and interaction mechanisms, of which we highlight those in the figure. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 98 4. We advance being connected - our partnerships, alliances, and external strategic initiatives We challenge ourselves to do better, in cooperation with other organizations. The partnerships we establish allow us to act in alliance with our stakeholders, promoting a more inclusive and sustainable society, and one that is more aligned with science-based climate targets and Human Rights. The various benchmark initiatives to which NOS is a signatory, and the partnerships it enters into or promotes, drive its strategic commitment and contribution to sustainability forward in line with the spirit underlying SDG 17. Our commitment to sustainability is endorsed at the highest level of the organisation and is reflected in the various international and national initiatives which NOS has subscribed to over the years, under the supervision of the Chief Executive Officer, and to which it remains bound. These initiatives strengthen the commitments undertaken by the management team and have underlying principles and commitments of responsible and proactive action in the environmental, social and governance fields, reflected in and complemented by our internal policies and codes. The initiatives and partnerships fall into the following categories: Sustainable Society; Climate; Human Rights; Strategic Partnerships; Support for Culture. 1. Sustainable Society NOS has subscribed and joined a number of initiatives that promote a more sustainable economy and society. In addition to transversal initiatives, which bring together companies and organisations from various economic sectors, we have also joined specific initiatives for our industry. In 2023 we highlight the ZERO01 project, a program dedicated to training in computing. ZERO1 The Zero1 Project, NOS' main digital training initiative, was created in partnership with ENSICO, with the aim of bringing computer education to schools across the country. For more information on this Social Responsibility program, see Promoting Inclusion and Digital Literacy. GRACE membership A NOS joined GRACE, a business association whose mission is to promote and develop a sustainable business culture. By joining this organisation, NOS will participate in the association's various initiatives and projects, as well as in GRACE's forums for sharing good sustainability practices. Initiatives subscribed (subscription prior to 2023) • United Nations Global Compact • Global Enabling Sustainability Initiative (GeSI) • “Digital With Purpose” • BCSD Portugal's Charter of Principles • Católica University: NOS participated in the study by the SDG Observatory in Portuguese companies • «Taking advantage of the crisis to launch a new paradigm of sustainable development » Manifesto, promoted by BCSD Portugal • ETIS Sustainability Working Group (circular economy in the telecommunications sector) 2. Climate Our decarbonization trajectory is in line with the Paris Agreement goal of limiting global temperature rise to 1.5°C. NOS recognizes the role of technology in responding to the challenge of the climate emergency, and, in this sense, has been associating itself with various initiatives focused on climate. GSMA NOS has teamed up with more than 10 operators worldwide to reuse and recycle 5 billion unused mobile phones. In collaboration with the GSMA, the global representative of the mobile industry. For more information on this initiative, please see "On behalf of the Planet", in the section "Giving new life to customer equipment". 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 99 European Green Digital Coalition (EGDC) NOS was the only Portuguese company to undertake the commitment to be an active part of Europe's digital transformation process for the next decade. The commitment comes as part of the initiative promoted by the European Commission and the Portuguese Presidency #DigitalDay2021. By signing the European Green Digital Coalition (EGDC) declaration, NOS commits to implementing actions which will reduce greenhouse gas emissions at a rate consistent with limiting global warming to 1.5ºC, with the aim of reaching carbon neutrality (net-zero) by 2040. Initiatives subscribed (subscription prior to 2023) • “Towards COP27” Manifesto • Porto Climate Pact • Letter of Commitment “Business Ambition for 1.5ºC” • Lisbon Green Capital 2020 • European Green Digital Coalition 3. Human rights - Diversity The initiatives to which NOS has been subscribing in the Human Rights area, namely in the equality and diversity areas, are important milestones for greater maturity in the management of this topic. Initiatives subscribed/joined the initiative (subscription/joined the initiative prior to 2023) • Women’s Empowerment Principles (WEPs) • Portuguese Women in Tech • CEO's Guide on Human Rights • United Nations Target Gender Equality • Portuguese Charter for Diversity • Technovation Girls Portugal • PWN • Girls In ICT For more information on the Technovation Girls Portugal, PWN and Girls In ICT initiatives see the We Value Our People section. 4. Strategic Partnerships We are members of a number of associations where our presence assumes a strategic value, due to the role that the association plays in our business areas, or, in the case of transversal associations, due to the value contributed by each one of them, to NOS, or to Portuguese society and economy. In addition to these strategic partnerships, where NOS is part of the governing bodies of the respective organizations, our business model also includes a set of technical partnerships, which support us in the development of the business. These technical partnerships are referred to in this report, in the sections Value for Customers and for a More Evolved Society, and We Generate Value for Our Business Partners. • COTEC Portugal Associação Empresarial para a Inovação • APRITEL Associação dos Operadores de Comunicações Eletrónicas • AEM Associação de Emitentes de Valores Mobiliários • APDC Associação Portuguesa para o Desenvolvimento das Comunicações • IPCG Instituto Português de Corporate Governance • Porto Business School 5. Support for Culture Entertainment is one of NOS' business areas. Given the importance that this business segment has among the Portuguese, NOS is a relevant cultural player, promoting cinema, but also other cultural areas such as theatre, opera, and dance, among others. As a company whose core business includes entertainment, we have invested in supporting culture, as mentioned in the section of this report dedicated to NOS' social responsibility initiatives. In this context, we are also associate members of leading cultural institutions, where we play an important role as members of their governing bodies. Associations of which we are members, and where we are part of the governing bodies: • Quinta da Regaleira • Fundação CulturSintra • Fundação Serralves 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 100 2.3.2 Sustainability management and strategy Overview Since NOS is a key element in the business and technology ecosystem, we play a fundamental role in promoting more sustainable practices, with the ambition of improving the lives of companies and people through technology. We ensure integrated global management, based on a model of responsible competitiveness. We have established an integrated management model that sees ESG management as a value creation lever for NOS and for the stakeholders that are part of the value chain in which we operate. In 2023, NOS' sustainability management included the following elements: • Sustainability codes, policies, systems, and management tools; • The bodies, structures and responsibilities defined for ESG management; • NOS’ sustainability strategy developed based on the materiality study conducted in 2020. The status reached in 2023 for each of the strategic areas is also presented. In pursuit of our mission and policy, we have a responsible management model based on a set of bodies and structures with their respective responsibilities and on systems and tools which contribute to monitoring the progress of NOS' sustainability strategy. NOS sustainability management components Our Codes, Policies and Procedures, approved by governing bodies such as the Board of Directors and/or the Executive Committee, are supported by the principles and concepts of intergovernmental instruments which relate to the topic(s) each of our Policies/Codes aims to manage. They were created to allow us to structure and formalise the commitments and principles that guide systematic and continuous management, the main impacts of the business, and the respective value chain. They include our commitment to identify, prevent, mitigate, or compensate for negative impacts and maximise positive ones. Some of them also stipulate the processes that must be implemented for conducting due diligence. Our sustainable management system comprises, in addition to Codes and a transversal Policy, a set of policies and procedures aimed at specific topics and/or stakeholders. Its scope covers NOS's operations and the activities that occur in its value chain, specifically with its supply chain and partners. In this sense, the communication with the different stakeholders has been fundamental so that the instruments can be understood and implemented effectively, in our operation and chain of suppliers and partners. This system, built and perfected over the last few years, has been developed, with the integration of new topics in our instruments, as a response to new potentially relevant risks, associated with emerging topics highlighted in our stakeholder engagement mechanisms. All of them are publicly available at the institutional area of our website. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 101 Codes, Policies, Systems and Management Tools for a More Sustainable Management 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 102 Risk Management Policy The Risk Management Policy is part of NOS' Corporate Governance instruments. Its main objective is to define the risk management system, including the respective methodologies, the main processes associated with risk management and monitoring, the entities involved and their respective responsibilities. Security and Privacy Policies The Statement of Commitment to Privacy and Protection of Personal Data details NOS' commitment to privacy, security, and data protection. This commitment is embodied in privacy policies and standards, including the Customer Privacy Policy, the Employee Privacy Policy, as well as the General Information Security Policy. The Information Security Policy defines the Information Security Principles that must be followed by Employees and by Suppliers and Partners, as well as the security levels and domains, and respective control objectives. The purpose of the NOS Privacy Policy is to allow customers to understand how our organization collects, processes, and protects the personal information transmitted by all those who use NOS services. Ta x Po l ic y The Group's Tax Policy combines its tax strategy and its commitment to tax regulations and the application of all good tax practices, thus promoting collaboration and co-operation with the Tax Authorities. The tax strategy consists of ensuring compliance with the applicable tax legislation and rules and seeking adequate coordination of the tax practices followed by the Group's companies, considering the social interest, and ensuring the achievement of long- term objectives, avoiding tax risks and inefficiencies in decision-making, thus enhancing the creation of value for the shareholder. Codes and Requirements for Suppliers and Partners The Procurement Manual comprises the steps and principles we apply to the procurement of products and services. Recognising that our activity has environmental and social impacts, we consider it essential that our suppliers and partners comply with the legislation applicable to their activity, and that they internalise and comply with the principles set out in our code of ethics. To this end, we have created a short version of the Code for Partners and Suppliers. We have also developed Sustainability Requirements for Suppliers and Partners, which reflect the essential elements of our positioning and commitment to sustainability, stipulating the set of principles and rules of action that must be adopted by our suppliers and partners. In this document we also present the management mechanisms associated with incorporating sustainability into our chain of suppliers and partners. Specific policies and instruments Codes, Plans and Statements applicable to people management In our Statement of Commitment for Diversity and Inclusion, we set out the principles that guide the behaviour of all governing bodies and employees of the Group regarding the topic of Diversity and Inclusion. It materializes one of the strategic axes of the NOS Sustainability Policy - Valuing our People. In The Gender Equality Plan, we define NOS' commitment and objective towards equal treatment and opportunities for all its people, promoting the elimination of any type of discrimination based on gender. The Code of Conduct for Preventing and Combating Harassment comprises the principles and rules that aim to prevent and, if necessary, combat harassment behaviour or any other form of attack on the dignity of employees or the people with whom they relate. Code of Ethics Defines the ethical principles and rules that govern the internal and external relations of the NOS Group Companies with stakeholders. The Code applies to all members of the governing bodies and employees of the Group, and also to all those who represent NOS (“Partners”) and any person or entity that provides services, on a permanent or temporary basis, to the Group (“Suppliers"). Code of Conduct for the Prevention of Corruption and Related Offenses Its main objective is to establish a set of principles, values and operating rules, transversal to all NOS activities, containing, among others, the rules applicable to the improper acceptance and offering of benefits, as well as in the areas of corruption, influence peddling and financial crimes, including money laundering or fraud in obtaining or embezzling subsidies, funds, or credits. It also defines the person responsible for Regulatory Compliance (“RCN” or “Compliance Officer”) as the one responsible for the adoption and implementation of this Code and compliance programs arising from it. Transversal codes and policies Sustainability Policy Clarifies NOS' commitment to the implementation of a responsible management model. Defines the operating principles, which embody the ambition and what we propose to do to ensure sustainable progress: On Behalf of the Planet; For a Digital Future; Our People and Ethical and Responsible Management; 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 103 Intergovernmental instruments, adopted as benchmarks in the various instruments of our responsible management system The principles and commitments that we establish, in our Codes, Policies and other procedures that structure our actions, are based on national and European Community legislation and on the alignment with and respect for internationally recognised principles in intergovernmental instruments. • United Nations Sustainable Development Goals • Declaration of the International Labour Organization (ILO) on fundamental principles and rights at work and the fundamental conventions established by it • Principles of the United Nations Global Compact • Charter of Fundamental Rights of the European Union • Treaty on European Union, which emphasizes the values of the Member States, such as pluralism, non-discrimination, tolerance, justice, solidarity and equality between men and women • Organization for Economic Co-operation and Development Guidelines for Multinational Enterprises • International Bill of Human Rights, which encompasses (the Universal Declaration of Human Rights; the International Covenant on Civil and Political Rights and the International Covenant on Economic, Social and Cultural Rights) • United Nations Convention on the Elimination of All Forms of Discrimination against Women • European Pact for Gender Equality • United Nations Guiding Principles on Business and Human Rights • World Business Council for Sustainable Development CEO's Guide to Human Rights Commitment to human rights As a signatory of the CEO's Guide on Human Rights, NOS recognizes them as fundamental rights and freedoms to which every human being is entitled, without discrimination, as set out in the International Bill of Human Rights and the Declaration of Fundamental Principles and Rights of the International Labour Organization. In 2022, we carried out the process of identifying the current and potential impacts of NOS in this matter, and the additional commitments that must be integrated into our system of principles and policies, whether in the form of a dedicated policy, or by integration into one or more of the existing instruments, an aspect that is still being assessed. It should be noted that the topic of Human Rights is already addressed, albeit from a less in-depth perspective, by the Code of Ethics, in the Sustainability Requirements for Suppliers and Partners, as well as in other Topic Policies, and respective initiatives. Additionally, NOS has a supplier engagement program, which evaluates suppliers' level of compliance in terms of human rights, among other parameters. In addition to an evaluation component, the program includes an improvement module for suppliers with lower scores, with whom an action plan is developed. For more information, see Ethical supply chain management. Appropriate systems and tools to identify and monitor the effectiveness of the measures adopted to manage ESG impacts, risks, and opportunities Among the elements comprising NOS's management system, as well as the tools that enable the Group to manage its main ESG impacts, we highlight the Scorecard and the Integrated Management System, due to their critical nature. The former as a tool for monitoring progress and as an instrument to facilitate the results assessment by the EC. The latter because it ensures the implementation of procedures which allow the Group to identify and assess ESG impacts and determine programs and initiatives to manage them. Scorecard Following the approval of NOS' sustainability strategy for the 2021-2025 cycle, an ESG Scorecard was defined and approved by the Executive Committee, with structured metrics for each of the strategic axes that comprise the sustainability strategy. This tool systematically and regularly records and reports to the Executive Committee and Board of Directors, through a selected set of KPIs, the progress of the strategy's implementation, the associated performance and the milestones reached. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 104 Integrated Management System (IMS) The continuous improvement of our processes and activities is an essential element of our organisational culture and sustainability. Part of our commitment is to adopt the best market practices. To this end, we use a range of management systems certified in accordance with international benchmarks based on this philosophy. Our certified management systems cover the following domains: Integrated Management System: • ISO 9001 “Quality Management System”, • ISO 14001” Environmental Management System” • ISO 45001 “Occupational Health and Safety Management System”; Other Certified Management Systems: • ISO 27001 “Information Security Management System”; • ISO 20000 “Service Management System”. Within the scope of the integrated management system, processes are implemented to identify the main impacts, and programs and initiatives to address these impacts. These systems are subject to audits and comply with a cycle of continuous improvement, which promotes the prevention and mitigation of the main negative impacts associated with the business. For more information consult the institutional area of the NOS website. Bodies, structures, and responsibilities defined to ensure ESG management In addition to the NOS bodies and committees, which have their sustainability responsibilities described and which can be consulted on the Group's website, sustainability-related operational management is provided by the business areas and a number of structures dedicated to ESG, under the supervision of the NOS governing bodies and committees, as illustrated and explained below. Board of Directors In defining the Company's strategy and policies, the Board of Directors seeks to ensure the long-term success of the Company and to contribute towards the overall welfare of the community. Executive Committee The Executive Committee is fully committed to the sustainability management in the company, with the utmost responsibility for approving the Corporate Sustainability Strategy. It is the body that supervises and approves the ESG information included in NOS' annual report. Additional information at the Corporate Governance Report section. Corporate Governance and Sustainability Committee Its function is to reflect on the corporate governance system, structure and practices adopted, verify their effectiveness, and propose to the competent bodies the measures to be implemented for their improvement. It supports the Board of Directors in supervising the company's activities in terms of corporate governance, rules of conduct and social responsibility. For more information see the Corporate Governance Report section. Ethics Committee Its mission is to disclose and monitor, with impartiality and independence, the NOS Group Code of Ethics. More detailed information at the Risk Management section and at the Corporate Governance Report section. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 105 Investor Relations and Sustainability Department The Investor Relations and Sustainability Department, delegated by the executive committee, is responsible for coordinating the respective implementation and day-to- day management of the Corporate Sustainability Strategy with the various departments and business areas which in turn ensure its operational execution. The Investor Relations and Sustainability Department works in close articulation and coordination with the Ethics Committee with regard to all relevant actions for the implementation of the sustainability strategy that intersect with ethics and conduct topics. Likewise, it regularly coordinates with the Integrated Management System (IMS) Coordination Committee, participating in the quarterly IMS Forum organised by this Committee, but also on a day-to-day basis whenever justified, particularly in the environmental and Occupational Health and Safety (OSH) areas. Reporting to the Vice-Chairman of the Executive Committee and CFO, shares quarterly with the Executive Committee the results of the corporate strategy scorecard, which includes the ESG targets and commitments (ESG scorecard). Sustainability Forum Created in 2021 with the aim of increasing the coordination dynamics of the information and experience exchange, promoting a transversal approach throughout the company in the pursuit of common strategic objectives and targets and establishing a regular and systematic monitoring and reporting dynamic to the Management team on the course of the initiatives associated with the strategy's implementation and performance towards the respective targets. It is coordinated by the Investor Relations and Sustainability Department and involves members of the Executive Committee and Directors and/or representatives of the areas with the greatest impact on ESG strategy and performance, as permanent members. In this context, it also acts as a platform for improving the knowledge of government bodies members on ESG. Diversity and Inclusion Committee Created in 2021, the Diversity and Inclusion Committee is responsible for implementing, maintaining, supervising, and improving the Diversity Policy/Gender Equality Plan and the measures contained therein, as well as suggesting the measures it considers appropriate for developing a diverse and inclusive company culture. For this purpose, the Committee is sponsored by the Executive Committee and is composed of the Coordinator of the Diversity Policy Operational Team and the Director of People and Organisation, as well as, occasionally, by representatives from other departments, who act as experts on different matters. Audit, Risk and Compliance and IMS Forum The IMS Forum is promoted by the Risk and Compliance area, integrated in the Audit, Risk and Compliance Department. This area has the role of coordinating the Integrated Management System (IMS) Coordination Committee. The Committee is sponsored by the Executive Committee and is composed of Pivots from different Departments/Areas of the Company The Forum meetings are one of the fundamental pillars for IMS management and aim to promote the sharing of information between the areas of the company most directly involved in quality, environment and OHS, optimising their interaction and promoting participative decision-making processes. Sustainability Strategy Our performance is governed by strategic cycles, in order to ensure adjustment to a highly dynamic market and the focus of our action on what, at any given moment, is most relevant to the business and to our stakeholders. In each strategic cycle, strategic priorities are defined that make the sustainability mission tangible. The current strategic cycle corresponds to NOS' third sustainability strategic cycle and is for the first-time coinciding with the Group's global strategic planning cycle in order to allow a convergent action plan and statement of the increasingly strategic character that SDG performance assumes. When establishing priorities for action, identified in each new strategic cycle, the structured and systematic approach is based on: • The context and trend analysis that we conduct on an ongoing basis to assess the main impacts, risks, and opportunities relevant to the business; More information at the section Our Strategy and Risk Management • Identifying relevant ethical, environmental, and social topics and impacts for stakeholders and the organization; More information at the section Material Sustainability Topics • A strategy of proximity and dialogue with stakeholders, which allows us to know and effectively respond to their main concerns and expectations and build solid relationships that drive value creation. More information at the section Purpose of our approach to stakeholders 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 106 Materiality definition process and sustainability strategy In preparation for and at the beginning of each cycle, we promote a comprehensive reflection which aims, firstly, to identify the sustainability issues which are most relevant to the context of our activity and considering our business positioning and vision, which are the main sustainability drivers and what is relevant to our stakeholders. Based on the results of this materiality analysis, we then define a new strategic positioning, identifying priority pillars of action and respective commitments and, simultaneously, we identify the priority topics which will constitute the main focus of the sustainability report to be prepared during the cycle. This process was conducted during 2020 and early 2021 in preparation for the current 2021-2025 strategic cycle. 2021-2025 Sustainability Strategy Strategic pillars Priorities Commitments Targ et s Materiality matrix External context • Global and sectoral risks • ESG topics on the sector agenda • Regulatory context • Financial markets • Peer behaviour Business context • Business strategy • ESG risks and opportunities • Reporting practices • ESG commitments Scoring criteria • Company impacts (positive/negative) Stakeholders • Priority areas • Priority topics Identification • Priority areas • Priority topics 1 Scoring • Company impact (positive/negative) • Relevance to stakeholders 2 Prioritisation • Topics segmented by level of relevance/materiality 3 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 107 Material sustainability topics In the preparation period for a new strategic cycle, we promote a broad reflection aimed at identifying the sustainability topics that are most relevant in the context of our activity. The process considers our business positioning and vision, the main sustainability drivers, the main ESG impacts associated with our business and the topics which are relevant to our stakeholders. The 2021-2025 sustainability strategy was concluded after reflecting on the results of the internal and external stakeholder listening process conducted in 2020. The results of the stakeholder listening process, as well as contextual factors such as the market challenges, regulation, analysts' expectations, among others, reflected in risks and opportunities, were considered in the process of preparing the sustainability strategy. This exercise allowed us to identify the four guiding axes of our actions, reflected in the strategy, and the most relevant sustainability topics, which encompass the vision of the main impacts, risks and opportunities related to ethical, environmental, social, and human rights issues, which impact the ability to generate value for our business and our stakeholders. The process involved three stages: (i) Identification; (ii) Scoring; and (iii) Prioritisation, as illustrated. Its direct output was the materiality matrix, also presented below. NOS will be implementing a new materiality study in 2024, following the guidelines of the CSRD Directive and ESRS standards. This study will be conducted by applying the concept of dual materiality. The results of the prioritisation, reflected in the materiality matrix, were analysed and in some cases, based on their correlation, were regrouped into broader topics, resulting in the following list of material topics. These topics form the foundation of the strategic pillars and, at the same time, are the main focus of sustainability reporting, reflected in this report. The following table shows the relationship between the material sustainability topics, the priority action axes of the 2021-2025 sustainability strategy and the GRI standards considered, as they best reflect the respective material topics. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 108 On behalf the planet For a digital future More for our people Ethical and responsible management Material topics Energy and climate Increase energy efficiency. Increased renewable energy consumption. Reduce greenhouse gas emissions in the operation and in the value chain - GRI: 201-2; 302-1; 302-3; 302-4; 305-1; 305-2; 305-3; 305-5 Waste management and circular economy Reduce and recover waste generated at the facilities. Promote circularity by reusing, reselling, or recycling network and customer equipment, as well as offering products and services that include recycled materials. - GRI: 306-1; 306-2; 306-3; 306-4; 306-5 Network and service coverage and quality Increase network coverage and quality of service (e.g., connection reliability, data traffic speed). Network resilience Ensuring network resilience and response to emergency situations (e.g., operation in storm or fire situations). Digital inclusion Promotion of widespread and informed access to digital technologies, via a general offering and specific solutions for low-income customers and customers with special needs, as well as initiatives to promote digital literacy and skills. - GRI: 413-1 Security & Privacy associated with products and services Ensure the protection of customers' personal data and privacy and protect customers and systems against cyber-attacks and fraud. Protect customers, and particularly vulnerable groups (e.g. children and young people), from access to abusive content and illegal activities. - GRI: 418-1 Sustainable Innovation Promote new technological solutions or innovative application contexts, which translate into an offering or development projects that respond to social and environmental challenges (e.g., connectivity solutions that increase energy efficiency and reduce emissions, telemedicine for isolated populations, smart cities) - GRI: 413-1 Diversity, inclusion, and equal opportunities Ensuring equal opportunities, diversity and combating discrimination - GRI: 405-1; 405-2; 406-1 Evaluation and development Ensuring career development opportunities and fair and transparent evaluation processes - GRI: 404-1; 404-3 Working conditions Ensuring adequate working conditions (e.g. adequacy of facilities, working hours, rules for teleworking, contractual rights and guarantees and others) - GRI: 2-7; 2-30; 401-1; 401-3 Remuneration and benefits Remuneration and benefits package compatible with the role - GRI: 401-2; 405-2 Safety, health, and well-being Promote the safety, health, and physical and emotional well-being of employees (e.g., combating work stress, initiatives that promote a healthy lifestyle, motivation, and team spirit) - GRI: 403-1; 403-2; 403-3; 403-4; 403-5; 403-6; 403-7; 403-9; 403-10 - Fair and transparent business relationships Clear, simple, and transparent commercial and contractual information and quick resolution of problems related to contracted products and services. - GRI: 417-2; 417-3 Ethics and conduct Principles and mechanisms for promoting an integrated conduct that safeguards fundamental ethical factors in conducting business, such as preventing and combating corruption or fair competition practices, among several other aspects legally established or corresponding to good practices - GRI: 2-23; 2-26; 2-27; 201-4; 205-2; 205-3; 206-1; 406-1 407-1; 408-1; 409-1; 415-1; 418-1 Good Corporate Governance Practices Adopt a governance structure in line with the best corporate governance practices (e.g., rules on the composition, appointment and responsibilities of management bodies, management remuneration rules, including ESG criteria). - GRI: 2-9; 2-12; 2-10 Responsible supply chain management Integrate social and environmental criteria in the selection and contracting of suppliers e.g., respect for human and labour rights, environmental control, and eco-efficiency practices), ensuring fair and transparent selection and evaluation processes. - GRI: 2-6; 204-1; 308-1; 407-1; 408-1; 409-1; 414-1 Contribution to local development Contribute to local development through business and by promoting or supporting local socio-economic development projects. - GRI: 204-1; 201-1; 413-1 Prevention of exposure to electromagnetic fields Ensuring safe levels of exposure to electromagnetic fields generated by network facilities and customer equipment (e.g., mobile network antennas, mobile phones). - GRI: 2-23; 416-1; 416-2 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 109 Strategy aligned with SDGs The Sustainability Strategy is aligned with the United Nations Sustainable Development Goals (SDGs), contributing more actively to 11 of the 17 goals, as they are those that are most intertwined with our activity and positioning and, therefore, on which we can add more value, and promote the sustainable development of society. NOS' sustainability strategy, organised into strategic cycles and aligned with the 2030 agenda/SDGs, addresses the main ESG impacts, risks, and opportunities. The strategy is organised into four strategic pillars and includes clearly defined and ambitious commitments and targets for each one, enabling them to be monitored and the contribution of their implementation to be perceived. Progress in meeting these commitments and targets systematically reflects our contribution to the SDGs. The commitments assumed under our sustainability vision, as expressed in these four pillars, articulate with the action areas inherent to NOS NEXT GEN's strategic priorities, in particular the strategic priority to " Preparing and training the organisation for current and future challenges", in a series of actions that start with the business and customers, but provide a more comprehensive coverage value, to stimulate a positive transformation inspired by the future. Progress in meeting these commitments and targets systematically reflects our contribution to the SDGs, although it is largely complemented by various other initiatives, which are described throughout this report. On Behalf of the Planet For a Digital Future More for Our People Ethical and Responsible Management Lead unequivocally in combating climate change and in the circular use of resources, positively influencing the entire value chain Promote the digital transformation of society, through democratic access to technology and the inclusion of the most vulnerable audiences Positioning NOS as the best company to work for, promoting diversity and inclusion, equal opportunities, and people's physical and emotional balance To be an example in the implementation of best management practices, with a focus on ethics, governance, risk management and continuous assessment of the supply chain 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 110 On behalf of the planet Lead unequivocally in combating climate change and in the circular use of resources, positively influencing the entire value chain. Commitment Strategic Target Status 2023 Increase the energy efficiency of the operation Reduce the energy consumption of the telecommunications service per data traffic by 70% by 2025 and 80% by 2030, compared to 2019 • In 2023, we reinforced the energy efficiency program in all areas of the company, achieving a 4% reduction in the energy consumption of our operation. In the mobile access network, the deployment of intelligent power management features (Power Saving Features) in 5G sites reached more than 80% of facilities. • The first stage of the project to optimise the air conditioning of technical rooms in the fixed and mobile network was also completed, with a general improvement in the efficiency indicators of the more than 60 facilities covered. The fleet electrification program also continued, with a total of 24% of vehicles being electric by the end of the year and preparations for a significant increase in 2024. • The energy consumption indicator for the telecommunications service per data traffic decreased by 13%, to 53% below the 2019 figure and putting us on a path to meeting the strategic target. More information in "On behalf of the planet." Use renewable electricity to meet our consumption Consume 100% renewable electricity • In 2023, due to energy market conditions, it was not possible to procure and cancel Guarantees of Origin and the renewable percentage of our total electricity consumption decreased to 29%. • Four solar micro-generation units have been installed in technical rooms on the fixed network, which will allow the assessment of the potential for renewable self-production in this type of facility. • We have reassessed the timing of the implementation of our strategic target for renewable electricity, ensuring it remains in line with best practice and within the timeframe of our emissions reduction target (2030). To consolidate a structural and sustainable increase in the use of renewable electricity in our operation, we are exploring different market options and contractual models, both for purchase and for self- production. More information in "On behalf of the planet." Reduce the carbon footprint in line with climate science Reduce our own operation's carbon footprint (scope 1 and 2 emissions) by 90% by 2030, compared to 2019 (approved Science-Based Target). • Due to the reduction in renewable electricity consumption, there was an increase in Scope 2 emissions. Total emissions from our own operation (scope 1 and 2) were 4% higher compared to the base year (2019). • We continued to implement the fleet electrification plan and are defining a new strategy for the procurement of renewable electricity, with the aim of bringing our scope 1 and 2 emissions back in line with the SBT reduction for 2030. More information in "On behalf of the planet." Reduce value chain carbon footprint (Scope 3 emissions) by 30% by 2030 compared to 2019 (approved Science-Based Target). • In 2023, we improved the accounting methodology for emissions from the value chain (scope 3) and recalculated the respective figures from the base year of our Science-Based Target (2019), to ensure comparability. • Total Scope 3 emissions decreased in 2023 to 39 % below the 2019 figure. The completion of the investment cycle in the renovation of the mobile and fixed networks, the use of refurbished customer equipment and improved carbon performance in the production of new equipment contributed to the reduction of upstream emissions. Improved energy efficiency and greater use of the energy-saving features of customer equipment contributed to the reduction of downstream emissions. More information in "On behalf of the planet." Contribute to reducing emissions in the economy Reduce, by 2025, customer emissions through our products and services, in an amount greater than the emissions of our own operation. • We continued to expand the portfolio of products & services that reduce customer emissions, with a set of new solutions that capitalise on the additional features of 5G technology and significantly reinforce the environmental benefits induced. In 2023, these solutions accounted for 11% of turnover in the business customer segment and 2% of consolidated turnover. More information in "On behalf of the Planet." Promote the circularity of NOS business through the reuse, resale or recycling of network and customer equipment Increase, annually, the level of circularity between 2022 and 2025 • In 2023, our operation generated 9% less waste compared to the previous year and the overall recovery rate increased to 99.6%. • In 2023, more than 27,000 components were resold for reuse in other networks, avoiding the consumption of new materials and energy. In the logistics operation, we used 89% recycled materials and, as a result of the measures introduced since the beginning of 2022, we have reduced material consumption by 34 tonnes per year and replaced 61 tonnes per year with recycled versions. • The level of digitalisation of billing processes reached 83% for customers and 71% for suppliers and 47% of cinema tickets were sold through digital channels. • We refurbished 528,000 customer devices in the fixed segment for reuse and 54% of the boxes and routers installed during the year were refurbished devices. We have set new targets for the take-back, reuse and recycling of used mobile phones. More information in "On behalf of the Planet". 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 111 For a Digital Future Promote the digital transformation of society, through democratic access to technology and the inclusion of the most vulnerable audiences. Commitment Strategic Target Status 2023 Generalize digital access by expanding network and service coverage. Increase the percentage of population covered with 4G/5G by 2025 • In 2023, NOS continued to expand the 5G network and, concurrently, the 4G network continues to have a significant importance in mobile communications, with almost the entire country covered by this technology, maintaining a crucial role while the 5G network is being developed. More information in "We do what nobody else has done." • The quality and scope of the network provided makes it possible to use applications that benefit personal and business communications, reflected in another year of wide recognition. More information in "We do what nobody else has done." • In 2023, the NOS network demonstrated its resilience during World Youth Day in Lisbon, resulting from continuous work centred on improving the network's physical layout, service platforms and energy performance. More information in "Network infrastructure quality, availability, and resilience" . Increase network resilience and emergency situations response in general Define a program focused on promoting digital literacy and access to technology for vulnerable groups Impact 10,000 people through programs to promote digital literacy and digital skills training for the future, by 2025 • In 2023, in the area of inclusion and digital literacy for young people and vulnerable groups, and inclusion through training, NOS reinforced its investment in the "ZER01 Entra na Logica da Computação Project" initiative, increasing its scope and prioritising intervention in geographically decentralised areas with greater socio-economic challenges. More information on "Promoting Inclusion and Digital Literacy". • In addition to this project, NOS's social action involves various aspects of support for the third sector, and therefore support for young people and other vulnerable sections of society. The support is focussed on access to technology, namely on strengthening the communication infrastructures for this type of organisation, and on inclusion through training. More information on the actions developed in 2023, and the number of people and institutions impacted in "Promoting Inclusion and Digital Literacy". • In 2023, a partnership was developed to provide a sign language video interpreter for customers with hearing disabilities, promoting accessibility to products & services. More information on "Promoting Inclusion and Digital Literacy." • The main developments in the security & privacy area were related to a more procedural perspective and internal awareness, with the development of the new "S&P by Design 2.0" framework, with the respective new support tools and training actions. More information on "Security & Privacy" Define a program aimed at training young people and professionals in the digital skills of the future Develop P&S offering for low-income market segments, or customers with disabilities. Inform and raise awareness about security & privacy in the use of products & services Implement, through new technological solutions, a P&S offering that meets social and environmental challenges. 500,000 objects linked by IoT solutions with environmental or social benefits, by 2025 • In 2023, NOS continued to innovate in environmentally beneficial solutions for the consumer segment, with new solutions and greater coverage of some existing solutions. More information in "Products & Services with Sustainable Innovation". • NOS also continued to innovate in solutions for the sustainable transformation of companies and territories: - Associating its 5G technology with new remote support initiatives in the healthcare sector. More information in "Products & Services with Sustainable Innovation". - Continuing its smart cities projects, highlighting smart irrigation projects, and 5G- based smart cities. More information in "Products & Services with Sustainable Innovation". - With the conclusion of RD&I projects that it led and participated in, which allowed disruptive solutions to be developed and tested in the area of energy and carbon efficiency in different contexts. More information in "Products & Services with Sustainable Innovation". Promote the sustainable development of companies and institutions through their digital transformation. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 112 More for Our People Positioning NOS as the best company to work for, promoting diversity and inclusion, and equal opportunities, as well as people's physical and emotional balance Commitment Strategic Target Status 2023 Promote equal opportunities for personal and professional development for all employees and ensure a rigorous, transparent, constructive, and meritocratic performance evaluation. Improvement of the employee satisfaction index • In 2023, we continued on the path of increasing the total number of training hours, a new performance and development model was also launched, and the young talent program - NOS Alfa - obtained an almost maximum score. More information in "We invest in our people". • These and other dynamics which have been implemented have resulted in a positive trend of recognition among employees, with an increase in various relevant indexes such as the "NOS recommendation index as a great company to work for", the "Learning and development index" and the general employee satisfaction rate. More information on "Our People" and "We invest in our people". Promote diversity, in all its different dimensions, and foster an inclusion mindset at NOS Increase in the number of women in management positions (= or > manager), by 2025 • In 2023, NOS continued to be involved with a comprehensive set of initiatives aimed at helping to promote a structural change in the interest of young women in technological areas and created a 100% team dedicated to this topic. Despite the efforts made, the number of women in management positions (managers or directors) remained with a slight positive adjustment of 0.2 p.p. More information on "Our People" • The promotion of inclusion was also an area of focus, with the signing of the "Commitment to Inclusion". More information on "Our People" • 2023 was a year of consolidation for the new benefits, health and well-being program launched in 2022, the NOS VITA Program, with the extension of benefits to family members and friends of employees, the strategic bet on improving the benefits associated services, and a stronger focus on mental health and emotional balance. More information on "We take care of our People" • The Personal Protective Equipment (PPE) and Collective Protective Equipment (CPE) Management Procedure started in 2021 was continued, with a strong focus on procedural systematisation. More information on "We take care of our People" Redefine the health and well-being program to increase the impact on promoting healthy living in a sustainable way. Ethical and Responsible Management To be an example in the implementation of best management practices, with a focus on ethics, governance, risk management and continuous assessment of the supply chain Commitment Strategic Target Status 2023 Promote reflection on the current government model in line with the best practices of structure, evaluation, independence, over presence and diversity, namely of gender and experience. Positive score of employees on the company's ethical performance between 2022-2025 • In 2023, NOS continued to honour the commitments of the various codes and policies, supported by a governance model which incorporates ESG and is aligned with good practices in terms of structure, evaluation, independence, and diversity. More information in Management and Sustainability Strategy. • In 2023, 91 % of employees said they were proud of NOS' ethical conduct. More information in Ethics and Conduct. Acting ethically and responsibly with our employees, customers, suppliers, and business partners Environmental and social evaluation of 100% of the risk suppliers by 2025. • In 2023, we highlight the launch of the first risk supplier evaluation campaign as part of the ESG, Safety and Privacy Supplier Performance Evaluation System, a new, more proactive model for promoting ESG alignment and social and environmental assessment of the supply chain. More information in Ethical Supply Chain Management. • The environmental evaluation of suppliers promotes the reduction of environmental impact and the establishment of a value chain that contributes to this commitment. More information in Ethical Supply Chain Management. Promote the reduction of environmental impact 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 113 2.3.3 Ethics and Conduct Overview Ethics is one of the pillars of NOS' culture. To achieve this, we reflect ethics in many of the Group's processes. NOS has a number of codes and guidelines that govern our activity and our commitment to acting ethically, of which we highlight two structuring codes: the Code of Ethics and the Code of Conduct on the Prevention of Corruption and Related Offences. The clarification request and whistleblowing channels allow us to monitor compliance with the values and principles of conduct and to comply with legal requirements in these matters. Any requests for clarification or concerns regarding compliance with the Code of Ethics and/or Code of Conduct for the Prevention of Corruption and Related Offences, can be submitted by Employees, Partners, Suppliers, Customers or third parties, and are addressed via the dedicated channels on the NOS website and intranet. In 2023, NOS once again implemented a stakeholder engagement plan on ethical conduct, with training activities aimed at employees, partners, and suppliers. The unwavering commitment to act ethically and responsibly with our employees, customers, suppliers, and business partners requires the daily alignment of everyone. Professionalism, integrity, transparency, and independence are the fundamental ethical and responsible business principles at NOS. They structure our actions in the market, in the various activities we conduct associated with the business and guide our conduct in the relationships we establish with our stakeholders. They are also a commitment of our employees, in their relationship with each other and with the company. NOS also continued to apply the principles of responsible communication with customers. Our Ethics organisational culture To establish ethics as a structuring pillar of our organisational culture, NOS' values and principles are reflected in many of the company's processes which, as a whole, reflect the way in which we introduce environmental and social responsibility into our management, as explained in greater detail in the How We Manage Sustainability section. The management of our ethical commitment uses a documentary structure, composed of different tools, monitoring mechanisms and stakeholder engagement, as explained below. 16 In 2023 NOS received 16 requests for clarification from its employees. 8 of these requests concerned conflicts of interest; 7 concerned the receipt or offer of benefits and 1 concerned liability. Requests for clarification 18 In 2023, of the 18 alleged irregularities reported, 3 had consequences after investigation, resulting in a warning, reprimand, or other type of sanction Alleged Irregularities 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 114 1. Tools that structure our commitment to ethics • Code of Ethics • Code of Ethics – short-version for Suppliers and Partners • Code of Conduct for the Prevention of Corruption and Related Offenses • Risk Prevention Plan for Corruption and Related Offences • Guide to a Responsible Online Presence • Guide to a Responsible Online Presence – version for Suppliers and Partners • Code of Conduct for Preventing and Combating Harassment at Work • Gender Equality Plan 2. Monitoring compliance with our values and principles • Whistleblowing channel • Clarification requests channel 3. Engagement of stakeholders to promote alignment with our values and principles • Annual communication and training plan for employees, suppliers, and partners 1. Tools that structure our commitment to ethics Code of ethics • Its fundamental objective is to share a set of principles and rules that should govern the internal and external relations of NOS Group companies with their stakeholders. • It must be complied with by all members of the NOS governing bodies and employees, as well as, with the necessary adaptations, by all those who represent or provide services to the NOS Group. • Published in its first version in 2015, it underwent a first revision in 2020 and was revised more recently in 2022 to ensure alignment with the legislation on Prevention of Corruption and Related Offences. Code of Ethics – short-version for Suppliers and Partners • It aims to promote understanding and adoption of the principles and rules described in the Code of Ethics by Suppliers and Partners. • Since 2016, the practice has been adopted of providing these players with a short-version version of the Code of Ethics for these stakeholders, who must ensure its strict compliance. Code of Ethics To p i cs c ov er e d by t he Code of Ethics • Meritocracy • Team Spirit • Legal and regulatory compliance • Appropriate use of resources and information • How to avoid corruption or other related offences • How to avoid conflicts of interest • Fair Competition • Respect for human and labour rights • Diversity and equal opportunities • Non-discrimination • Combating moral and sexual harassment • Accounting transparency • Employee and customer privacy • Customer data privacy • Honesty, cordiality, and other aspects related to civic conduct • Environmentally and socially sustainable conduct 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 115 Code of Conduct for the Prevention of Corruption and Related Offenses • It arises from a legal obligation, and aims to establish a set of principles, values and rules of action, transversal to all NOS activities in matters of Corruption and Related Offences. Created and released in its first version in 2022. • It must be read in conjunction with the other rules or policies in force at the Company, in particular the Code of Ethics and the Regulation for Reporting Irregularities (Whistleblowing). • It incorporates the rules for accepting and offering benefits, which were previously provided for in the Regulation for the improper acceptance and offering of benefits. • Defines the RCN - Regulatory Compliance Officer or CCO - Chief Compliance Officer, Filipa Santos Carvalho, as responsible for the adoption and implementation of this Code and compliance programs arising from it. • It applies to all members of the governing bodies, directors, and employees of NOS, as well as, with the respective adaptations, to all those who represent NOS as our Partners and to any person or entity that provides services, on a permanent or temporary basis, to NOS. Risk Prevention Plan for Corruption and Related Offences • Created and released in its first version in 2022. • It arises from a legal obligation and must be interpreted in conjunction with the other rules or policies in force at NOS, in particular the NOS Code of Conduct for the Prevention of Corruption and Related Offences. • It allows the NOS to recognise potential risks of corruption and related offences (RCIC) and their causes, to establish preventive and corrective measures to reduce the likelihood of occurrence and the impact of RCIC, to define mechanisms for monitoring and assessing the effectiveness of the implementation of the Plan and to create an environment that deters any corruption practices and related offences at NOS. 2. Monitoring compliance with our values and principles: whistleblowing and clarification requests channels Requests for clarification or expression of concerns related to compliance with the Code of Ethics and/or Code of Conduct for the Prevention of Corruption and Related Offences, originated by Employees, Partners, Suppliers, Customers or third parties, are addressed through the channels created for this purpose, available on the NOS website and on the intranet. • Alleged irregularities: comunicar.irregularidades@nos.pt • Clarification requests: duvidas.etica@nos.pt These whistleblowing and clarification requests are available on the NOS website in Portuguese and English. They are available 24/7 to receive these requests and communications. The information received through these channels is confidential and restricted and situations reported anonymously are addressed, guaranteeing anonymity with the aim of ensuring trust in the process. The communications received are handled by the Internal Audit, and subsequently forwarded to the Ethics Committee or Statutory Independent Audit Board, according to the nature of the situation (ethics or corruption in particular). Channel activity indicators Activity indicators are compiled annually for whistleblowing/ clarification requests channels, which are internally disclosed to employees. In 202 these indicators revealed that during the year: • 16 clarification requests were received in the mailbox duvidas.etica@nos.pt • 18 alleged irregularities were reported via the comunicar.irregularidades@nos.pt mailbox, 3 of which were investigated and resulted in warnings, reprimands, or other sanctions. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 116 3. Stakeholder engagement to promote alignment with our values and principles NOS defines and implements annual action plans for ethics, which involve training and communication actions on this subject. Regularly undertaking these initiatives helps to ensure that we share the information necessary for employees and other stakeholders to be aware of the principles and rules of conduct, and to know how to act if they detect a potential irregularity or need additional information or clarification of a doubt. To this end, NOS defines and implements annual ethics action plans. The training and communication actions are aimed at employees, partners, and suppliers, and are intended to promote knowledge and understanding of the Policies and Codes on ethics and conduct, obtaining greater clarity and alignment on behaviours that may be considered less ethical. E-learning on ethics The training plan for Employees provides for mandatory e- learning on the Code of Ethics, which is an integral part of the welcoming process of new Employees. Within the scope of this training, the employee signs an individual statement of commitment to comply with the Code. By the end of 2023, 98% of all NOS employees had completed this e-learning course (maintaining this percentage compared to 2022). Main goals of the e-learning on ethics: • Know the NOS Code of Ethics and the policies related to certain ethical topics; • Know the Group's ethical principles and rules; • Realize each person's role and responsibilities in complying with these principles and rules on a daily basis; • Understand the impacts that each person's behaviour assumes for NOS; • Know which the mechanisms are to report an alleged irregularity or clarify doubts and concerns; • Get information and understand how to use the whistleblowing channel. Let's talk about ethics "Let's Talk Ethics" consists of open sessions to share knowledge about business ethics. Aimed at employees and with the participation of the Ethics Committee. The aim of the sessions is to reinforce the importance of ethical issues for the Group, clarify the Committee's role in the company, generate trust in the existing processes and clarify existing doubts on the topic. This dynamic demonstrates the Ethics Committee's total openness and transparency in resolving the ethical dilemmas presented and has proved to be a success. Those who participate highlight the contribution to increasing trust in the Organisation that proximity to the Ethics Committee brings and recognise the importance of ethics for the Organisation's reputation. In the 2023 edition, the session, conducted in a hybrid format (on-site session with the possibility of attending online), was attended by around 260 employees. The session debated an increasingly relevant and pressing topic, Sustainability, and was attended by two external guests who are experts on the topic. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 117 Actions for Suppliers and Partners The employees of each Partner or Supplier, acting on NOS' behalf, are obliged to follow the principles and rules of the Code of Ethics with the adaptations described in the short version for Suppliers and Partners and of the Code of Conduct for the Prevention of Corruption and Related Offences. Whenever confronted with alleged violations of the aforementioned Code, and within the scope of the contractual relationship with NOS, the Partner or Supplier must report them through the channels available for this purpose. Employees of Suppliers and Partners who provide services in organisational units identified as having activities more exposed to ethical risks also took part in ethics training sessions in 2023, the format of which was determined by the unit itself. By the end of the year, more than 10,100 employees of Partners had completed this training. Fair and transparent customer relations In a business where the decision-making is customer-centric, NOS's principles for dealing with customers are a relevant guiding principle. Provide customers with complete, clear, and accurate information, necessary for making an enlightened and informed decision and ensuring scrupulous compliance with the agreed conditions, as well as working every day to minimize and promptly respond to customer issues, are key factors in ensuring customer satisfaction in accordance with the experience principles we have defined. We make efforts, on a permanent basis, to ensure respect and compliance with all applicable legal provisions in terms of marketing and advertising, being members of the Portuguese Association of Advertisers (APAN) and the Advertising Self- Regulation Association (formerly the Civil Institute of Advertising Self-Regulation) and having subscribed to the Code of Conduct prepared and approved by the latter. The main objectives of this Code are, namely, to demonstrate good practices and responsibility in the different forms of Commercial Communication, guarantee public trust and respect for consumer privacy and preferences. In line with the publication of the Electronic Communications Law, which transposed the European Electronic Communications Code (EECC), in 2023 we strengthened the measures we have in place to ensure that our customers are fully informed of their contractual rights, and to make the NOS-customer relationship even more transparent and simple with regard to information and the safeguarding of their rights. As a result, we have currently implemented the following set of measures: • One month's prior notice of changes in the conditions of service provision; • Information about contractual loyalty and associated charges available on digital channels and on invoices for all segments; • Information about the qualification of extraordinary situations, which allow customers to cancel the contract in advance and free of charge, available on digital channels; • Simplification measures for SMEs and non-profit organizations; • Contract summary model (MRC) with the inclusion of the costs of additional services and all the information of the contractual relationship, when there are changes to any of the services contracted by the customer; • Explicit confirmation/"active" acceptance of the sale, for the purpose of its conclusion and through the provision of all pre-contractual information, ensuring a conscious and enlightened contracting of customers; • Annual proactive communication of the best available offers adjusted to the lifecycle of each customer profile; • Refund to the Customer of prepaid amounts on balance at the time of the portability request; • Proactive compensation in the event of non- compliance with deadlines for activating and repairing faults and/or service unavailability; • Internet Social Tariff for low-income families; • Temporary Suspension of Services, allowed for a wide range of situations of economic and/or social constraints, making the management of contractual commitments with NOS more flexible; • Exemption from payment of contractual breach, with extension of the exceptions to the charging of contractual breach (unemployment, disability, emigration), and facilitation of termination of the contract in some situations, including the adoption of the platform provided by the Directorate-General for Consumers that allows to expedite these processes; • Information regarding support lines and their costs included in written communications with the consumer. We also have a number of additional measures under preparation, which also derive from EECC, and which are currently being regulated by ANACOM, with a view to providing a fairer and more accessible service, especially for customers in more fragile situations. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 118 We also have mechanisms and procedures to ensure proper communication with the customer through various channels, such as the customer support lines, the NOS Ombudsman, the NOS Forum, and our stores network. These channels can be activated by customers whenever they feel it is relevant, either to clarify contractual issues or to address any problem that arises regarding the use of our products and services or transactional issues. To this end, we are addressing communication with foreign customers and have already implemented customer service for these customers by managers with the respective skills in the various channels, and we have made our website available in English. During 2024, we aim to adapt the pre- contractual and termination documents, improving the clarity and transparency of communication for this segment, as well as evolving the e-menu to optimise their identification and customer service. A central aspect of our customer service model is the principle of "First-Call Resolution”, and we have been adjusting increasingly move closer to this paradigm. The complaints analysed, both those addressed directly to NOS and those addressed through independent bodies such as the "Portal da Queixa" or the best mobile network, are subject to reflection and the definition of improvement plans, always working towards excellence. In 2023, we took the lead in these two organisations as the operator with the best customer satisfaction. Notwithstanding the specific action measures taken to resolve the problems addressed by our customers, our greatest effort is focused upstream, on the way we choose our investments, direct our focus on innovation, work on our internal processes and define our offering, always with the interests and needs of customers in mind. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 119 2.3.4 Ethical supply chain management Overview • Commitments NOS is committed to the quality and excellence of its offering and customer journey, focused on digital transformation, and is equally committed to a positive social and environmental impact, leveraging the transformational potential of technology. • Strategic instruments These commitments, which emanate from the company's strategic instruments and sustainability policy, require the collaboration and alignment of NOS' network of suppliers and commercial partners. • Guiding principles and mechanisms The company has guiding principles and mechanisms to help promote and evaluate this alignment, such as the sustainability requirements for suppliers and partners and the whistleblowing channel. • Prospects for greater future proactivity NOS is further developing its practices in this area and has taken a decisive step in 2023 with the launch of the first ESG evaluation campaign under the Supplier ESG, Safety and Privacy Performance Evaluation System, a new model more focused and proactive in promoting ESG alignment and assessing the environmental and social impact of its supply chain. Guiding Principles supporting Strategic Commitments To promote the alignment of partners and suppliers with NOS' standards of quality, ethics, and sustainability, and to minimise the negative impacts of its business on people and the environment, both currently and in the future, the company has established a set of guiding principles for its action towards them, and of them towards NOS. These principles and guidelines are the foundation supporting the strategic commitments, and are formalised and communicated through two key documents: • NOS Code of Ethics - short version for Suppliers and Partners Establishes our commitment to the integration of ethical, environmental, and social factors in the supply chain and through which we encourage and promote the adoption of the best sustainability practices in the operations of our Suppliers and Business Partners. • Sustainability Requirements for Suppliers and Partners Presents the guidelines underlying NOS' positioning and commitment to acting sustainably. It states that all NOS Suppliers and Partners must adopt these guidelines, emphasising their alignment with the national and EU legal framework, with international law standards and principles, and with leading international initiatives in the ethical, social, and environmental fields. These include the United Nations Global Compact, the Universal Declaration of Human Rights and Fundamental Rights at Work of the International Labour Organisation. Recommends alignment with the ISO14001 standard or others whose scope covers measures to prevent and minimise environmental impacts. These requirements are communicated to all suppliers and partners (100%) and are an integral part of the General Conditions for the Supply of Goods and Services to the NOS Group sent to suppliers in the market consultation processes. Within the scope of the supply of products and services to NOS, Suppliers are obliged to fully comply with the provisions of the Requirements, insofar as they are applicable to the supply in question. They are also obliged, in case of subcontracting, to make these requirements known to their subcontracted parties and ensure that they guarantee the respective compliance. 174 Number of suppliers covered (critical suppliers) by the first assessment, which started in 2023, according to the new ESG evaluation model ESG supplier evaluation 100% Rate of suppliers notified of Sustainability Requirements for suppliers Sustainability requirements 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 120 For more information on the code of ethics, including the short version for suppliers and ethics training for partners, see "Ethics and Conduct". The Sustainability Requirements for Suppliers and Partners are available on the NOS institutional website/Sustainability/Ethical and Responsible Management/Responsible Partners. Additionally, NOS subscribe to various external initiatives that strengthen and publicly state our commitment to promoting integrity and responsible management of our business, both internally and throughout the value chain. These Include the BCSD Portugal Charter of Principles or the CEO's Guide on Human Rights. Alignment and prevention, monitoring, and control mechanisms NOS has mechanisms implemented to help influence and ensure its supply chain is aligned with the excellence it wants to offer and with the values and standards it depends on the environmental, social and governance fronts. These are mechanisms that contribute to the prevention, identification and minimisation of potential environmental risks and impacts and those related to human rights, labour, and other fundamental rights. Some of these mechanisms, such as the supplier selection process and the supply and service evaluation process, also ensure the application of parameters and rules which promote fair access and transparent and fair management of business relations, within a framework of healthy competition. Supplier selection Given the importance of the participation of Suppliers and Partners in our operations, NOS pays special attention to the selection and relationship we establish with them. Through the Procurement Manual, it ensures the implementation of best practices in terms of the procurement process within the Group, and establishes rules and principles for consultation, subsequent award, and process control. This ensures careful risk management, maximising gains and contributing to the development and maintenance of healthy and lasting relationships. Selection is made according to objective criteria, considering technical and economic aspects and compliance with the required obligations and certifications. This process is supported by an electronic platform with recognised market credibility. At the end of each formalisation, a survey is carried out among technically valid suppliers to assess their satisfaction regarding the conduct of the negotiation process, the quality of information provided and the user-friendliness of this platform. Evaluation processes are also applied which include criteria regarding the ethical, environmental and health and safety performance of potential suppliers, providing an initial assessment of the risks associated with their contracting. As a result, we witness a very low level of non-compliance or non-conformities in the provision of services by Suppliers, with high levels of satisfaction with the process itself. Supplies/services provided evaluation Supplier evaluation regarding the supplies/services provided is a fundamental process for identifying opportunities for improvement in these services and, thus, inducing continuous improvement in the supply chain. In this context, an annual supplier evaluation process is conducted internally, selected according to criteria of relevance/criticality to the business; billing volume; suppliers who ensure a direct interface with the NOS customer, on behalf of the company; or suppliers with a previous evaluation of less than 70%, among others. The evaluation methodology comprises 8 analysis criteria (including, since 2019, ESG criteria), with associated metrics and considerations, designed to render the exercise more objective and comparable between different evaluations. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 121 Analysis criteria for the supplier evaluation process • Proactivity, competitiveness, customer orientation, responsiveness to requests and problem resolution • Compliance with Contractual Conditions, Service Level Agreements (SLA's), Service Level Objectives (SLO's) • Compliance with deadlines, delivery time, response, and resolution time • Quality in technical and operational performance and level of follow-up • Quality of materials, products, and services • Ethics • Environment and Occupational Health and Safety • Security & Privacy (covers security, privacy and resilience of products and services) sharing best practices; among other aspects. To ensure excellence in the services provided, suppliers with lower overall ratings (< 70%) are incentivised to improve their performance through a continuous improvement process, which includes meetings between representatives of the provider and key NOS stakeholders and a mid-term evaluation process. The focus of the process is on driving continuous improvement, but it also allows for rational selection and disqualification for future contracting processes. These processes are coordinated by the Procurement Department, which has ultimate responsibility for supply chain management, reporting directly to the CFO, who ensures supervision of these matters and coordinates with the Board of Directors. Supplies/services provided evaluation conducted in 2023 In the 2023 evaluation, referring to supplies provided in 2022, 180 suppliers were evaluated, of which only 4% (8) obtained scores below 70%. 1. 172 suppliers with a score >= 70% (corresponding to 96% of the suppliers analysed, a fraction higher compared to the previous year's evaluation) 2. Regarding the criteria on ethical aspects, 3 suppliers obtained an average score below the desirable threshold (70%), which was an improvement compared to the previous year's evaluation 3. Regarding criteria on environmental and occupational health and safety aspects, no supplier found to be applicable to the supply in question had an average score below the desirable threshold (70%), as in the previous year. Comparing the results of this evaluation with the one conducted for supplies/services provided in 2021, we can see that, of the 11 suppliers who scored below 70% at the time, 7 showed a positive evolution, having scored above 70%, with an increase of 10pp or more, and 4 were not renewed. In the mid-term evaluation process for 2023, of the 8 suppliers who scored below 70 percent in the annual 2022 evaluation, we found that 2 were re-evaluated and scored above 70%; 5 of them, however, were disqualified from future contracting processes due to their low scores. One of them was not evaluated and remains in the continuous improvement process. Risk management and internal control system: The internal risk management and control system enables the risks inherent to the business activity of the NOS Group to be anticipated and minimised. This system classifies and groups risk types according to a risk dictionary. The NOS risk dictionary includes risk typologies, including potential causes or drivers such as: Ethics; Social Responsibility; Human Rights, Diversity, and Inclusion; Health and Safety at Work; Partner Management/Outsourcing; Employee/Partner Fraud; Sustainable Products & Services; Environmental Impacts or Climate Change, among others. The system includes structures and routines for continuous risk monitoring and control, as well as an annual identification routine of the main risks which could impact the business's ability to meet its priorities and strategic objectives, leading to the definition of prevention and mitigation measures for the risks identified as priorities, based on their probability and impact. To this extent, whenever any of the risks mentioned above, or others directly related to responsible management topics, become significant above the acceptance level, whether in terms of internal operations or the supply chain, they are subject to appropriate processes or initiatives to address or mitigate them. For more information on this system, methodology and main responsibilities, see "Risk Management" in this report. For more information see the Risk Management Policy, available on the NOS/Investors/Corporate Governance/Corporate Policies website. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 122 Clarification and whistleblowing channels: These channels can be used by supplier or partner employees whenever they see fit and are available 24x7 to raise the alarm about any suspected violation of the principles and rights established by NOS, legally enshrined or included in international conventions associated with fundamental human and labour rights. Within the scope of internal control procedures, audits/investigations are conducted whenever suspected incidents concerning Ethics and Corruption are raised. The results of these processes can be correlated with the ethics indicators we release in our Integrated Management Reports. For more information on these channels and the ethics indicators for 2023, see "Ethics and Conduct" in this report. Certifications and other evaluation, awareness-raising, and commitment mechanisms: The Integrated Management System entails conducting an internal and external audit program, which acts as a forum for assessing and identifying non-conformities and aspects for improvement, in terms of management quality, service, environmental, occupational health and safety and information security. The procurement and supplier management processes are covered by the integrated audits. In internal and external audits of the Occupational Health and Safety Management System, certified by ISO 45001, when the audited area has a Supplier or Partner involved, that Supplier or Partner's process is also audited, with an assessment of the health and safety requirements defined by the aforementioned standard and NOS' internal requirements. In 2023, external audits were performed by the certifying body, involving various areas/activities in which contracted third parties are involved, such as building management (Workplace) and occupational health (People Services). Internal audits are also performed covering environmental aspects, such as Operational Audits by the different areas, such as building and infrastructure management and maintenance, and Internal Environmental Compliance Audits; as well as external audits, within the scope of ISO14001 Certification, which often cover services provided by third parties on NOS facilities. The findings are subsequently addressed through corrective and preventive actions. Although supplier certification in accordance with the ISO 14001 standard is only recommended, any service provider whose supply falls within NOS' scope of services covered by the certification must comply with the requirements of the standard when supplying NOS. In order to promote awareness and commitment, partner employees are also provided with various training courses that include content on cross-cutting risks to the organisation and the value chain, such as training in Ethics, Security & Privacy or Physical Security. Development and start-up of the ESG supplier evaluation system Following a coordinated effort between the Investor Relations and Sustainability Department, the Audit, Risk and Compliance Department and the Procurement Department, under the supervision of the Executive Committee, NOS has been developing a supplier selection and evaluation system specifically focussed on assessing ESG and Security and Privacy practices, which started operating in the last quarter of 2023. This process is aligned with the strategic sustainability target establishing a commitment to environmental and social evaluation of 100 % of NOS' risk suppliers by 2025. The first step towards meeting this target was taken in 2022, with the start of the parameterisation of a questionnaire and respective evaluation framework, which includes questions on environmental performance, social performance, and responsible governance, including aspects concerning the impact on human rights, as well as on Security & Privacy. The questionnaire and framework provide for the sending of supporting evidence for the replies, with an associated scoring system to leverage benchmarking and the recording of evolutionary trends. During 2023, the questionnaire and the entire operating model have been stabilised. In the last quarter of the year, a first stage of dissemination to 174 suppliers considered critical was organised, based on three risk criteria: • environmental risk (based on CO2 emission estimates, this supplier group represents 62% of the greenhouse gas emissions associated with the purchase of goods and services: categories 1 and 2 of scope 3 emissions, as categorised by the GHG Protocol); • business risk (relevance to the development/maintenance of NOS' business); and • geographic risk (exposure of the supplier's sector/country of origin to environmental and social risks, according to the S&P ESG Risk Atlas). 100% Environmental and social evaluation of 100 % of NOS risk suppliers by 2025 2025 ESG Target 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 123 In 2024, and in a second stage, the plan is to extend the process by sending the Questionnaire and Evaluation to priority 2 suppliers. This ESG supplier evaluation will be shared with them, and improvement action plans will be defined with NOS to reduce any risks identified and/or improvement measures to be implemented. At a later stage, this evaluation methodology will be considered in the supplier selection process. Concurrently, an ESG engagement model has been defined which will be integrated into the supplier engagement program being developed by the Procurement department (SRM). The aim is to maximise this evaluation tool, creating awareness and knowledge-sharing moments in this field with the entire NOS internal and partner ecosystem. For more information on SRM (Supplier Relationship Management), see "We support partners and boost the local economy". The first dissemination and questionnaire-sending stage also serves the important purpose of collecting feedback to fine- tune the system itself. The results will not be available until 2024. Supplier evaluation system specifically focused on ESG and Security & Privacy practices OBJECTIVES OF THE ESG EVALUATION PROCESS § Aligning suppliers to comply with the sustainability targets set by NOS § Demonstrating ESG commitment and encouraging suppliers to prioritise sustainability measures and collaborate with NOS in this area, promoting knowledge sharing • Minimising risks and increasing supply chain resilience by collecting and analysing metrics • Promoting transparency about the criteria and processes involved in the evaluation analysis system PROCESS STAGES § Selection of suppliers to be evaluated by risk criteria, considering 3 types of risk (environmental, business, and geopolitical) § Application of an ESG performance survey to suppliers and information gathering, managed by a dedicated platform § Replies processing and ESG and Security & Privacy risk classification, according to a matrix defined and managed within the platform § Incorporation of results into supplier management decisions and improvement plans QUESTIONNAIRE ELEMENTS The questionnaire integrates several analysis elements, such as: § Environmental management; § Eco-design and biodiversity; § Resource consumption and waste; § Carbon footprint § Labour practices; § Human Rights; § Supply chain initiatives § Anti-corruption policies and measures; § Compliance and Security & Privacy 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 124 2.3.5 Risk Management Overview The process of identification and selection of relevant risks was based on NOS' Business Risk Model. Following on from the risk assessment conducted in 2022, 27 relevant risks were considered in 2023, 5 of which have a high- risk level: economic environment, competition, legal, regulation and cybersecurity. No higher risk levels were identified. For each of the relevant risks, NOS has identified the respective risk management, mitigation, follow-up, and monitoring actions, presented in this section of the report. For each of these risks, NOS also identified the opportunities associated with the risk drivers, as well as the impacted pillar of the strategy (NOS NEXT GEN). This way, it was possible to both protect the business from risks and maximise value for stakeholders. Risk management approach Risk management is an integral part of NOS' management culture and one of the fundamental pillars of Corporate Governance. NOS has a risk management model, which includes a policy, risk assessments, an internal control system and audits. Risk management policy Risk assessments Internal control system based on the internal control manual Management system audits (ISO9001, 14001, 45001, 27001 and 20000) and external audits (Statutory Auditor) The risk management processes are supported by the Enterprise Risk Management (ERM) methodology, a consistent, systematic, and based on the best international practices and standards methodology. It follows 5 stages to prepare information for decision-making, which may be applicable, both at the corporate level of NOS Group companies/businesses, or at the level of specific processes/projects: 1. Evaluate; 2. Explore; 3. Measure; 4. Manage; 5. Monitor. The risk dictionary used by NOS is organised into 5 risk categories and 19 risk subcategories. It totals 82 risks. Of these, 27 risks were considered relevant in 2023. Risk management is an integral part of NOS' management culture and one of the fundamental pillars of Corporate Governance. The creation of value for our stakeholders is crucial to the development of our business. NOS has a comprehensive perspective of the main risks to which it is exposed, ensuring careful monitoring and assessment of the enabling factors presented both by the external and internal environment, which allows it to identify effective and proportionate management and mitigation responses that safeguard the business and the interest of its main stakeholders. Risk management policy Definition of methodologies, intervening entities, and their respective responsibilities in risk management in the organization. It provides for periodic risk assessment exercises that allow reviewing and prioritizing the main corporate risks that may compromise the performance and objectives of the different areas of the organization. Risk assessments Periodic performance of risk assessments that allow reviewing and prioritizing the main risks, positioning them in a Risk Matrix Internal control system based on the internal control manual Systematisation is made, with reference to and supporting evidence of: functional / financial controls; IT controls; controls associated with the requirements of ISO standards. Management system audits (ISO9001, 14001, 45001, 27001 and 20000) and external audits (Statutory Auditor) Compliance audits (internal and external) covering ISO management system certifications and Statutory Auditors' Report. From a total of 82 risks included in the NOS Business Risk Model (risk dictionary), 27 risks were identified as being relevant, of which only 5 have a high-risk level. 27relevant Relevant Risks 5 ≥ high-risk 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 125 The risk management model is based on the Enterprise Risk Management (ERM) methodology, as shown in the figure "The 5 stages of the risk management process". The 5 stages of the risk management process The risk management processes are supported by the Enterprise Risk Management (ERM) methodology, a consistent, systematic, and based on the best international practices and standards methodology. It follows 5 stages to prepare information for decision-making, which may be applicable, both at the corporate level of NOS Group companies/businesses, or at the level of specific processes/projects: 1. Evaluate ; 2. Explore; 3. Measure; 4. Manage; 5. Monitor. 2023 Relevant Risks The process of identification and selection of the relevant risks for 2023 was based on the NOS Business Risk Model, the risk dictionary used at NOS, which is organised into 5 categories, 19 risk subcategories and 82 risks. Of these, 27 were considered relevant. The relevant risks were identified based on 4 criteria: context risks, risks intrinsic to NOS activities, sustainability risks (ESG) and financial risks. 1. Context Risks (Top 10) These are the risks with the highest probability and/or impact (Top 10) for the NOS context, resulting from the corporate risk assessment exercise conducted by the NOS Executive Committee in 2022. Every 3 years we conduct a more in- depth risk identification and assessment ("zero base" review) and, on an annual basis, we incorporate reviews and adjustments. We also considered relevant risks those identified in the specific risk assessments of the following certifications: • ISO 27001 “Information Security Management System” • ISO 20000 “Service Management System” 2. Intrinsic risks (to NOS’ activities) These are the main risks to which NOS' businesses and activities are intrinsically subject, in addition to those that may already be considered in the Top 10 of context risks. 3. Sustainability Risks (ESG) These are the risks most directly associated with environmental, social, and corporate governance topics; they also consider the most relevant risks identified by NOS in the specific risk assessments of these certifications: • ISO 9001 “Quality Management System” • ISO 14001” Environmental management system” • ISO 45001 “Occupational Health and Safety Management System” 4. Financial risks These are the main financial risks identified by the External Financial Auditor, in accordance with the standard: • ISA 701 - KAM - Key Audit Matters The application of these criteria totalled 27 risks in the Business Environment, Governance, Operational and Financial categories. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 126 NOS | BRM - Business Risk Model | 2022-2023 NOS global risk dictionary and highlight of risks considered relevant in 2022-2023 Business environment Business strategy Operational Politics and Economy Strategy and Planning People P&S and Customer Satisfaction Political Environment Business Portfolio Leadership Agile Development of P&S Economic Environment Life cycle Skills and Training Sustainable P&S Planning and Control Resistance to change P&S Communication Sector and Market P&S Performance Monitoring Internal Communication & Sharing P&S Pricing Sector/Market Attractiveness Strategic Partnerships Performance & Recognition P&S Sales and Distribution Mergers and Acquisitions Investment Assessment and Decision Recruiting and Talent Retention P&S Performance Competition Human Rights, Diversity and Inclusion Customer Experience Quality Te ch n ol o gi c al I nn ova t io n Brand and Reputation Occupational Health and Safety Service Management Quality (B2B) Consumer preferences Brand Well-being Customer awareness and retention Reputation Customer Credit and Collections Shareholders and Financial Markets External Communication Te c -Op. Resources Shareholders relations Sponsorship and Patronage Network and Systems Dev.&Op Partners Funding and Capital Facilities Dev.&Op Partner/Outsourcing Management Financial Markets Financial Procurement and Suppliers Partners/Third Parties Credit and Collections Interest Rate Financial Performance Rights and Licenses Management Exchange Rate Liquidity Business Assurance FCF | EBITDA- CAPEX Processes Revenues and Cost Assurance Legislation and Regulations FCF | Working Capital Communication and Strategy Alignment Employee/Partner Fraud Legal Digital Transformation Customer/Third Party Fraud Regulation Financial investments Process Efficacy and Agility Financial Assets or Real Estate Process Efficiency and Performance Security & Privacy Governance Compliance Confidentiality Corporate Governance Accounting and Reporting Contractual Commitments Integrity Government Practices Accounting Practices Availability / Resilience Social responsibility Ta xa t io n Environment Privacy Relations with Official Entities Financial Reporting Environmental impacts Cybersecurity Ethics Climate change Catastrophic Losses/ Business Continuity Management Fraud Corruption and Related Offenses Organization Structure and Organizational Agility Skill Segregation and Delegation Risk Relevant Risk Relevant Risk 2022-2023 context (Top 10) 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 127 NOS Risk Matrix In the matrix we present the relevant risks organized into 4 clusters that correspond to the aforementioned identification criteria. In each of the clusters, the risks are organized in the order in which they appear in the BRM risk subcategories. Additionally, in the matrix, risks are typified as Economic, Financial or Legal, in line with what is required in the Corporate Governance Report in point “53. Identification and description of the main risk types (economic, financial, and legal) to which the company is exposed in the exercise of its activity”. Intrinsic Risks Context Risks (Top 10) 2 Tec hnolog ic al Innovation 3 Economic Environment 2 Digital Transformation 3 Competition 1 Revenues and Costs Assurance 2 Tale nt Re cruit ment and Retention 1 Customer/Third Party Fraud 2 P&S performance 2 Availability/Resilience 2 Privacy 3 Cybersecurity 2 Business Continuity / Catastrophic Losses 3 Legal 3 Regulation 1 Social Responsibility 1 Interest rate 1 Human Rights, Diversity & Inclusion 1 Credit and Collections 1 Corruption and Related Offenses 1 Liquidity 1 Occupational Health and Safety 1 Taxa tion 1 Sustainable P&S 1 P&S Communication 2 Customer Experience Quality 1 Environmental Impacts 1 Climate Change Sustainability Risks Financial Risks Risk level 1 Low 2 Moderate 3 High 4 Very high 5 Catastrophic In the matrix the risks are also categorised by risk level (according to the scale presented, from 1 to 5). For risks assessed above the tolerance level, i.e. risks with a level greater than or equal to High (≥3), according to the NOS methodology, it is mandatory to identify the possible causes and define mitigation actions. Furthermore, even for the set of relevant risks which do not exceed the tolerance level, NOS also monitors and reports on the causes and actions of these risks as they are significant for NOS's Context (e.g. Talent Recruitment and Retention; Privacy; Cybersecurity; Business Continuity), as they are relevant in terms of Sustainability (e.g. Human Rights, Diversity and Inclusion; Corruption and Related Offences; Customer Experience Quality; Occupational Health and Safety; Climate Change), as they are Intrinsic to the company's activity (e.g. Technological Innovation; Customer/Third Party Fraud) or as they are financial key risks (e.g. Interest Rate; Liquidity). Regarding the risk timeframe, the Context Risks are the most potentially relevant in the short-term (1-to-3-year cycle), considering that they have been assessed with a higher risk level (Top 10) for NOS' current context. By their nature, and because they have a lower risk level at NOS, Financial Risks, Risks Intrinsic to the company's activity and Sustainability Risks are all risks which the company has been identifying systematically over the years, which is why we consider them to be medium-term (3-to-5 years) and long-term (more than 5 years) risks which are relevant to continue monitoring. In the following tables we identify and summarise the risks and the respective risk management, mitigation, and monitoring actions. We have also identified the opportunities associated with the risk drivers, thereby both protecting the business from risks and maximising value for stakeholders. Risk type Economic Risks Financial Risks Legal Risks 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 128 Context Risks (Top 10) Risks Actions Opportunities Impact on NOS Strategy Economic Environment l Worsening macroeconomic conditions due to the geopolitical and economic consequences of conflicts with a global impact (e.g. Ukraine, Middle East) l Global inflationary pressure impacting on the cost structure (e.g. labour-intensive external services) l Variations in the energy costs and scarcity and rising costs of various raw materials (an effect that will continue into 2023 as a result of the conflict in Ukraine). l Exploring alternatives to optimise the operating cost structure and mitigate inflationary pressures, e.g. by renegotiating relevant supply contracts and monitoring material prices to assess better purchase timing. l Positive effect on the cost structure resulting from the optimisation of energy costs, as a result of market cost variations, control actions and/or the setting of energy procurement prices, and the implementation of measures to reduce energy consumption in the network, offices, and cinemas. l Additional information can be found in the "Trends impacting the business" section. l Reduction of energy consumption. l Reduction of the carbon footprint. l Cost Optimisation l Value Creation Competition l Increase of the competitive intensity of the market (including new entrant operator), potential reduction of market share and/or loss of customers, potential difficulty in attracting and retaining customers. l Strategy of constant improvement of quality, differentiation and innovation of products and services, protection, and diversification of the offering, crossing offerings between NOS businesses. l Reinforcement of the new business / brand portfolio in the B2C and B2B segments over recent years (e.g. NOS Insurance, NOS Alarms, NOS Smart Home, Ten Twenty-One) l Consolidation of the offering for protection of specific segments of the telco market l Additional information in the "Trends impacting the business" section of this report. l Possible new opportunities to expand the business portfolio. l Expanding sources of customer revenue l 5G leadership l Competitive Offering l Close Relation l Value Creation Legal Regulation l Changes in European or national legislation or regulations can have an impact on the company's operations (see section "External context - regulatory framework"). l Supervision and possible proceedings and fines: from sector-specific regulators, such as ANACOM for the electronic communications business, and the Portuguese Regulatory Authority for the Media (ERC) for television services activities and provision of audiovisual content; from transversal regulators, such as the Competition Authority (AdC), the National Data Protection Commission (CNPD) and the National Cybersecurity Centre (CNCS). l Projects and initiatives to address and ensure compliance with changes in legislation and regulations that impact NOS, involving the corporate, business, and technological areas necessary for their implementation. l Legal department and Regulatory department activity that monitors the evolution of the applicable legal and regulatory framework, including interaction with regulators, participation in public consultations, responding to lawsuits and contesting fines. Existence of RCN - Regulatory Compliance Officer or CCO - Chief Compliance Officer. l Additional information in the section "External context - regulatory framework”. l Identification of possible opportunities for NOS companies' competitive position in the business sectors in which they operate, as a result of analysing the threats and opportunities associated with changes in legislation and regulation, and the adaptation of international sector trends (via benchmarking). l 5G leadership l Digital Emancipation l Competitive Offering l Close Relation l Value Creation l Focus on People oco nas Pessoas Ta le n t Re cr u it m en t a nd Re te n ti o n l Non-effective recruitment, talent management or retention policies or practices. l Shortage of technological/digital profiles, due to the globalisation of the labour market and the greater demand from companies for this type of profile. l Improvements in various People and Organisation processes, highlighting the reorganisation of the "Talent Acquisition", "Employee Experience" and "People Relations" processes, along with improvements in some of the support platforms. l NOS Alfa programs (e.g. Alfa Biz, Alfa Tech) for the selection and recruitment of highly talented recent graduates, including approaches to universities in technological areas. l NOS Leadershift Program (training, coaching and leadership development) with the aim of training the different leadership levels at NOS, creating the conditions to accelerate the organisation's transformation (with the motto " Whoever does, brings the team along"). l Conduction of the Organisational Climate Survey (+SAT) among all NOS employees and sharing the l Increase NOS's attractiveness as an employer. l Increased employee satisfaction. l Cost reduction in replacing key resources with a high degree of expertise or specialisation. l Focus on People 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 129 Risks Actions Opportunities Impact on NOS Strategy results with the different leadership levels as an input for improvement actions. l Hybrid working model ("on-site" and "remote" days) for the majority of employees, including flexibility mechanisms. l Additional information in the sections on "We value our people”. P&S Performance l Products & Services potentially subject to non-conformities, failures or performance and reliability problems, which may not meet customer expectations or result in complaints. l Possibility of lower quality communications services than desired (e.g. network coverage and quality, service execution/delivery speed, unsuitable equipment). l Application of analytical models to proactively identify causes of service degradation, speed up fault detection and resolution and recommend to customers the best actions to resolve them. l Strengthening the capacity of mobile and fixed networks, to respond to changes in standards and the increased needs of residential and business customers in the growing context of remote work and digitalisation. l Introduction of new equipment to improve the quality of service (e.g. new TV boxes; Wi-Fi routers; smart Wi-Fi). l Existence of civil liability and professional civil liability insurance, applicable to customer complaints concerning physical damage caused by NOS or service failures with breach of contract with proven impacts on the customer. l Te ch no lo gi ca l le ad er sh ip i n mo bi le s er vi ce q ua li ty validated by independent agencies (Ookla recognised NOS's 5G network as the fastest in Portugal and Open Signal named NOS the best global mobile network in several criteria, including download and upload speed experience, coverage, and consistency). l Additional information in the sections "We do what nobody else has done" and "Quality of service, network resilience and reliability, and emergency response". l Increased customer satisfaction. l Proactivity in identifying service problems and preventive resolution. l Operational costs reduction in customer management/support. l 5G leadership l Digital Emancipation l Competitive Offering l Close Relation Availability / Resilience Business Continuity/Catastrophic Losses l Possibility that information or technological resources may become unavailable or lack the necessary resilience capabilities to withstand an incident and to continue to provide the company's information and services l Possibility of the company not being able to maintain business continuity, including critical activities or the provision of priority products and services, as a result of a catastrophic event caused by a natural disaster or a critical technical-operational interruption/rupture (e.g., systems, network platforms, physical infrastructure, other assets), human resources (e.g., pandemics), financial resources or other key resources. l Business Continuity Management (BCM) program that covers facilities, network infrastructures, business activities and the most critical functions that support the communications services. For these areas, the company develops and maintains plans/actions to improve the availability and resilience of services and incident/crisis management plans/procedures. l Additional information in the sections "Security & Privacy - Business Continuity Management" and " Quality of Service, network resilience and reliability, and emergency response". l Increasing the company's response capacity to prevent incidents from becoming major crises, ensuring the continuity of critical activities and services for the community. l Strengthening the protection of the company's reputation and image. l Digital Emancipation Privacy l Possible non-compliance with rules on personal data protection. l Program of initiatives aimed at implementing processes for the Protection of Personal Data, as well as continuously monitoring and improving compliance with the General Data Protection Regulation (GDPR) and other regulations with an impact on privacy. l Existence of Privacy Policies and Rules periodically updated and disclosure via training. l Existence of the NOS Data Protection Officer (“DPO” or “Data Protection Officer”). l Additional l Increased trust from customers and employees in the protection of their personal data. l Digital Emancipation 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 130 Risks Actions Opportunities Impact on NOS Strategy information in the "Security & Privacy - Personal Data Protection Management" section. Cybersecurity l Critical resources (systems, network platforms, infrastructure, other assets) potentially exposed to security vulnerabilities that make them subject to attacks, intrusions, alterations, destruction or other threats, from internal or external sources (e.g. ransomware, malware , phishing).l Widespread increase in cyber- attacks with a significant impact at national and international level, with the aim of compromising the information security of individuals and companies and causing interruptions in essential services for the community l Set of initiatives to improve operational procedures, continuous monitoring and technical measures for cybersecurity protection and contingency. l Existence of Information Security Policies and Rules periodically updated and disclosure via training. l Reinforcement of the set of technological tools used to prevent, detect, and respond to cybersecurity incidents. l Continued reinforcement of the Cybersecurity team in its various field of expertise. l Existence of CISO - Chief Information Security Officer NOS.. l Additional information in the "Security and Privacy - Cybersecurity Management" section”. l Increased trust from customers and the community in the company's ability to defend itself against cyber- attacks, protecting information and securing critical services. l Expansion of cybersecurity services for B2B customers. l Digital Emancipation Intrinsic Risks Risks Actions Opportunities Impact on NOS Strategy Te c h n ol o g i c al I n n ov a ti o n l Possibility of the company not being able to adequately take advantage of, accompany investment in or monetise technological advances to achieve or maintain a competitive advantage (e.g. 5G deployment, 5G use cases, cloud services, managed services) l Various initiatives to promote the application of 5G use cases, most notably the existence of the 5G Fund sponsored by NOS and the NOS Hub 5G. l Launch of the Open Innovation program, developed as part of the 5G & Digital Transformation Test Bed, aimed at helping startups accelerate the development, testing and experimentation of innovative 5G-based products & services. l Pioneering launch of 5G Stand Alone in Portugal (new 5G Stand Alone data core developed in partnership with Nokia). l Launch of the NOS Smart Home business line, offering equipment and services for property developers who wish to include a smart home solution in their developments l Reinforcement of the services portfolio for B2B customers (e.g. cloud, managed services, cybersecurity). l Additional information in the sections "NOS Next Gen strategic pillars" and "Products & services with sustainable innovation". l Leading the communications market through leadership on 5G network and expertise, challenging and supporting the community to evolve with 5G. l Expansion of the service portfolio (Smart Home), leveraging synergies and successful experiences in similar services (Alarms). l Expansion of the low-carbon services portfolio, especially for B2B customers, taking advantage of technological innovations resulting from the use of electronic communications in conjunction with IoT and Cloud-based solutions. l 5G leadership l Digital Emancipation l Competitive Offering Digital transformation l Changes in consumer profile (from physical to virtual) l The company's possible inability to ensure the digital transformation of traditional business processes. l Intensive and massive data processing (e.g. Big Data, Advanced Analytics), supported by new technologies (e.g. Cloud, Data Lake, Machine Learning, Artificial intelligence), has enabled the automation of processes and the application of analytical models that allow a deeper understanding of changes in consumer profiles. l Continued expansion of the RPA - Robotic Process Automation program l Digitalisation of business processes with impact on the customer: improvements to features in NOS Apps, increasing promotion of electronic billing, digitalisation of processes in NOS stores, robotisation of internal customer management processes. Additional information in the sections l Optimisation and simplification of internal and customer processes. l Increased customer satisfaction. l Creation of more personalised customer journeys tailored to each customer. l Expansion of the low-carbon services portfolio, taking advantage of the growing digital transformation needs of B2B customers supported by new technologies. l Digital Emancipation 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 131 Risks Actions Opportunities Impact on NOS Strategy "Products & services with sustainable innovation" and "Fair and transparent customer relations". Revenue and Costs Assurance l Inherent operational risks regarding the assurance and monitoring of customer revenues and costs, from a revenue stream and platform integrity perspective. l Dedicated Revenue Management and Control team (Revenue Assurance) that applies revenue integrity control processes (under- or over-billing) and cost control. l Billing processes with revenue controls, regarding billing quality. l Reduction of revenue losses or service costs. l Improved customer satisfaction for the quality and integrity of the service bills they receive.. l Competitive Offering l Value Creation Customer/Third Party Fraud l Fraudulent customers or third parties can take advantage of potential vulnerabilities in business processes, network, or communications services. l Dedicated fraud control teams, including subscription fraud, consumption fraud and content fraud. l Fraud monitoring and control processes to avoid anomalous situations of fraudulent consumption or misuse of services (e.g. illegal provision of TV channel content, phishing actions via SMS directed at NOS customers). l Additional information in the "Security and privacy - Combating content fraud and copyright protection" section”. l Reduction of adverse impacts on customer satisfaction and possible service disruptions. l Reduction of service revenue losses.. l Competitive Offering l Value Creation Sustainability Risks (ESG) Risks Actions Opportunities Impact on NOS Strategy Social Responsibility l Possible failures to honour commitments to social responsibility principles. l NOS Sustainability Policy. l Social responsibility program, focused on developing digital skills, aimed at the most vulnerable segments of the population. l Projeto “ZER01 - Entra na lógica da Computação”, in partnership with ENSICO, aimed at bringing computer education to children and young people and preparing them for a future in the digital age, with the aim of covering more than 1,200 elementary and middle school students throughout the 2023-24 school year. l Additional information in the sections "Promoting inclusion and digital literacy" and "Products & services with sustainable innovation". l Socially and ethically responsible policies for the community and employees, benefiting the image, reputation, and sustainability of the business. l Focus on People Human Rights, Diversity, and Inclusion l Possible failures to honour commitments to human rights principles. l Possible failures in the mechanisms for guaranteeing equal opportunities, gender, diversity and combating discrimination. l Review of NOS Human Rights, Diversity, and Inclusion Policy. l NOS Code of Conduct for Preventing and Combating Harassment at Work. l NOS Gender Equality Plan. l Subscription to the CEO's Guide to Human Rights. l Additional information in the "Diversity and Inclusion" section l Additional information in the "Ethical management and value creation in the supply chain" section l Socially and ethically responsible policies for the community and employees, benefiting the image, reputation, and sustainability of the business l Focus on People Corruption and Related Offences l Possible failures in the mechanisms required for preventing and combating corruption and related offences and for protecting whistleblowers. l Rules of conduct provided for in the NOS Code of Ethics and respective training for Employees and Suppliers; l NOS Code of Conduct on the Prevention of Corruption and Related Offences. l NOS Risk Prevention Plan for Corruption and Related Offences. l NOS Whistleblowing Regulation, Whistleblowing Channels and Whistleblower Protection Mechanisms. l Monitoring compliance through whistleblowing channels.l Existence of RCN - NOS Regulatory Compliance Officer or CCO - Chief Compliance Officer. l Additional information in the "Ethics and Conduct" section”. l Socially and ethically responsible policies for the community and employees, benefiting the image, reputation, and sustainability of the business. l Focus on People 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 132 Risks Actions Opportunities Impact on NOS Strategy Occupational Health and Safety l Situations that could jeopardise people's health or physical safety. l Existence of structured contingency plans to guarantee the protection of people in the workplace, in accordance with the legal obligations in force. l Continued reinforcement of employees' Personal Protective Equipment (PPE) for ergonomic, physical, mechanical, and electrical risks. l Initiatives of the NOS Vita Health and Well-being Program (physical, emotional, and social health), including prevention of psychosocial risks and improvement of employees' work/life balance. l Monthly "Healthy Talks" sessions (e.g. stress management, work recovery, emotional recognition) and "Health and Well-being Days" in offices (e.g. sessions with health screening experiences, workplace gymnastics, on-site healthy talks). l Annual questionnaire to employees on Occupational Health and Safety. l Additional information in the "Safety, health and well-being" section”. l Improvement of employees' well-being and work/life balance. l Increased protection levels for the health and physical safety of employees. l Focus on People Sustainable P&S l Possible failure to adopt practices which promote the existence of Products & Services perceived as sustainable. l Provision of increasingly environmentally and socially efficient Products & Services (e.g. SIM cards made from 100 % recycled plastic, innovative technological projects, and solutions with a social impact, mainly aimed at elderly home care). l Implementation of the Eco Rating label in NOS Stores (system for assessing the environmental impact of the entire production, transport, use and disposal of mobile phones process). l Additional information in the "Products & services with sustainable innovation" section. l Positive impacts for society, increased accessibility for the population, reducing info- exclusion and promoting diversity. l Competitive Offering l Focus on People P&S communication l Possible failures to adopt responsible communication (e.g. information clarity, transparency, etc.) on the Product & Services' characteristics, contractual conditions, and tariffs. l Ensure compliance with agreed conditions and applicable legal and regulatory requirements. l NOS subscribed to the Code of Conduct of the Advertising Self-Regulation Association. l Additional information in the "Fair and transparent customer relations" section”. l Improved customer attraction and retention. l Competitive Offering l Focus on People Customer Experience Quality l Possibility of customer journeys not consistently meeting or exceeding customer expectations. l Significant improvement in customer satisfaction and the NPS indicator, due to the implementation of new generation networks, continuous investment in upgrading to state-of-the-art equipment at customer premises, and constant attention to improving customer experience processes. l Continued expansion of new analytical models which have allowed better understanding of customer needs at touchpoints with NOS (e.g. telephone customer service, technical support, telephone marketing) and trigger improvements in these interactions. l Initiatives to increase the customer-centric approach in various processes (e.g. sales, customer service, technical support, customer service and the like). l Continuation of the Digital Transformation Program, with initiatives focused on customer interaction (e.g. new Chatbot on the website, new features on the NOS App). l Recurring monitoring and assessment processes with indicators of customer satisfaction. l Annual supplier evaluation processes, covering the main suppliers/partners that have an impact on customer interactions, and including continuous improvement meetings with suppliers for whom opportunities for improvement have been identified. l ISO9001 certification (Quality Management) in which an external organisation l Improving the customer experience at the various physical and digital touchpoints (e.g. contact centres, stores, customer homes, websites, Apps). l Digital Emancipation l Competitive Offering l Close Relation 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 133 Risks Actions Opportunities Impact on NOS Strategy audits and certifies that NOS consistently provides customers with processes and services that meet quality standards. l Additional information in the sections "Products & services with sustainable innovation" and "Fair and transparent customer relations”. Environmental Impacts l Possibility of the company's activities causing harmful environmental impacts associated with resource consumption (energy, water, paper, etc.), waste production (electronic equipment, batteries, etc.) or greenhouse gas emissions. l Transversal program to reduce emissions, covering own operations (scopes 1 and 2) and the value chain (scope 3). l Energy efficiency improvement program in NOS' technological operations, in communications infrastructures (e.g. power saving features in the 5G network, other smart energy consumption management features in network equipment, sharing mobile network infrastructures with another operator enables consumption reduction) in data centres (e.g. free cooling solutions, cold curtains). l Digitalisation program for in-store customer processes (e.g. paperless, digital labels, queue management system with digital tickets). l Adoption of circularity targets by 2030 for mobile devices within the scope of the GSMA (increase in device take-back and total recovery and recycling of collected devices). l Operations to collect, refurbish and reuse equipment used by fixed service residential customers (TV boxes, routers, and hubs) and sale of reused smartphones. l Expansion of the NOS electrified vehicle fleet and charging stations in NOS buildings. l Existence of a long-term Power Purchase Agreement between NOS and EDP for the purchase of renewable energy, which presupposes the construction of a new wind farm and the supply of green electricity for NOS operations. l Additional information in the "Climate and Energy" section. l Improved energy efficiency by reducing energy consumption. l Reduction of consumables. l Recycling materials and equipment. l Carbon footprint reduction. l Operating cost reduction. l Digital Emancipation l Competitive Offering l Focus on People Climate Change l Possibility of the company not incorporating environmental sustainability and climate change as relevant factors for its long-term strategies. l Possible failures in how the company addresses the critical services resilience (e.g. communications networks) in locations where it has operations which may be affected by climate change or extreme weather conditions (e.g. fires, hurricanes, other adverse weather phenomena). l NOS has subscribed to various global initiatives to reduce carbon emissions and promote sustainable development (e.g. United Nations Global Compact European Green Digital Coalition, Digital with Purpose). l External assessments and ratings on ESG practices (e.g. CDP, S&P Global Corporate Sustainability Assessment, Sustainalytics Moody's ESG Solutions, MSCI ESG ratings). l Participation in "CDP Climate Change", which includes an annual exercise to identify and characterise risks and opportunities related to climate change. l Monitoring of sustainability commitments and targets, through the Internal ESG Scorecard and the NOS Sustainability Forum. l Inclusion in NOS' BCM program for emergency situations caused by natural disasters (e.g. storms, floods, and fires), including actions such as assessment of various network resilience scenarios for critical services, implementation of specific maintenance plans for technical sites classified as "high risk", adoption of alternative radio relay solutions to protect the most vulnerable communications, permanent monitoring of IPMA alerts. l Additional information in the "Climate and Energy" section. l Distinctive ESG performance and long-term commitments to the community. l Incentives from investors and the financial community to follow good practices and international benchmarks in ESG areas. l Reinforcement of network resilience for extreme weather events l Digital Emancipation l Focus on People 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 134 Financial Risks Risks Actions Opportunities Impact on NOS Strategy Interest Rate Liquidity l Economic environment and rising interest rates cause uncertainty in the financial markets with increased costs in access to financing and debt costs exposed to great volatility in future periods. l Possible shortfalls in expected cash flows or timing changes. l Possible inability to comply with financial or operational obligations in a timely manner. l Possible need to take out new loans. l NOS' robust capital structure and liquidity position reinforced by refinancing operations with more stable market conditions. l Bank financing contracted in early 2023, aimed at anticipating 2023 refinancing needs, divided between bond loans and commercial paper programs, indexed to sustainability objectives (within the framework of NOS' Sustainability-linked Financing Framework). l Extension of NOS' debt cost risk coverage. l Issuance of sustainable financing lines, indexed to sustainability performance (NOS was the first operator with sustainable financing). l Value Creation Credit and collections l Reduction of customer receipts due to ineffective or deficient operation of the collection system. l Changes in legislation regulating the provision of essential services which have an impact on the collection of customer debts. l Specific teams for Credit Control, Collections and Litigation Management. l Definition of a monthly plan for collection actions, monitoring, and evaluation of results. l Adjustments to the collection schedule and timings, when necessary, to maximise the collection of customer debts.l Credit insurance for certain business segments. l Bill insurance sales to customers (protection against payment of communications bills). l Digital Emancipation l Close Relation l Value Creation Ta xa t io n l Ta x l eg i sl a ti o n dev el op m en t s. l Possible interpretations of the application of tax and parafiscal regulations in different ways. l Specific taxation teams to monitor and comply with tax regulations. l Support from external consultancy services whenever the issues being analysed are more critical. l Maximising tax efficiency, including maximising tax incentives. l Value Creation * Additional information in the annexes to the Financial Statements, in the "Risk Management Policies" section, which contains more specific information on financial risk management policies, as well as on how the risks associated with financial statements are managed and controlled. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 135 Prevention and monitoring of electromagnetic fields (EMF) Mobile telecommunications devices use radio frequencies which, as it happens with the operation of other electrical equipment, generate electromagnetic fields (EMF). NOS assumes responsibility for monitoring and implementing the best practices regarding preventive measures that protect potential adverse effects of human exposure to electromagnetic radiation. Currently, most people are permanently exposed to very low intensity electric and magnetic fields, generated by the functioning of equipment necessary for the most varied activities, including research, communications, medicine, transport and distribution of electricity, aeronautics, or maritime navigation. Most sources of EMF, both at home and in the workplace, produce extremely low levels of exposure, and the most common day-to-day activities are unlikely to give rise to risks that exceed exposure limit values. (ELV). The current scientific consensus is that there is no evidence of a relationship between adverse health effects and the use of mobile telecommunications devices within the internationally established exposure limits. Nevertheless, since part of our activity is based on radioelectric spectrum emitting electromagnetic fields (operating the mobile network and the transport network), NOS monitors and implements the best practices for protecting public health against the possible adverse effects of EMF exposure, following the principles of prevention and precaution. Our approach to electromagnetic fields: due diligence processes applied The Code of Ethics and the NOS Sustainability Policy express our commitment: • Inform customers of all possible risks associated with the use of the products and services we provide • Comply with legal and regulatory requirements in force • Apply, in line with the principles of prevention and precaution, measures that protect the general population, our people, partners and other relevant entities, against possible adverse effects on human health from exposure to electromagnetic radiation generated by our infrastructure and equipment NOS assumes the responsibility of monitoring, studying, and implementing the best practices produced at national and international level for the application of preventive measures which protect potential adverse effects of human exposure to electromagnetic radiation We guarantee • That all network and terminal equipment comply with national and European requirements, standards, and regulations; • That all exposure limits are complied with • The implementation of preventive measures beyond what is legally required We follow • Research and information disclosed by national and international reference forums and publications We inform • All stakeholders – populations and public and private entities – on the effects of EMFs 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 136 All our network equipment and mobile phones provided to customers comply with Portuguese legislation on electromagnetic field exposure limits, which follows European Union regulations and international scientific guidelines. Based on the precautionary principle, we implement additional preventive measures to those legally required to ensure that all exposure limits are met. We run an annual plan to monitor exposure to electromagnetic fields in our fixed and mobile land service network, which covers all relevant facilities, identified according to the requirements defined specifically for this purpose by the Portuguese telecoms regulator (ANACOM): new or reconfigured facilities, located indoors, on top of or on the façade of buildings that fall within the above-mentioned parameters. Annual EMF monitoring plan: measurement of electromagnetic radiation on mobile network sites All monitored stations had electromagnetic field power density values below the reference values and only 5.6 % of stations in locations with public access registered a level 50 times below this threshold. The results of our measurements are communicated to national and local authorities, including ANACOM, which also publicly discloses the results of its measurements following requests from public and private organisations. The measurements conducted in 2023 reflect the number of new licensed stations which are subject to these measurements by regulation, being the first year to include 5G stations. How we materialize the precautionary principle in EMF impacts Public Locations with target exposure values 50 x lower than the legal maximum threshold For locations accessible to the public, as established in the applicable legislation, we define as a target a level at least 50 times below the reference power density value (ELV" - maximum permissible value of exposure to the frequency-dependent electromagnetic field under analysis in accordance with the applicable legislation). In locations where the value, although below the ELVs, still does not meet this target, safeguard measures are taken to control exposure, in line with regulations and good practice: access restrictions and the power granted to all those engaged in maintenance, operation and installation duties to, as a preventative measure, switch off the emission source whenever necessary to perform the intervention in perfect safety conditions. Follow-up scientific development on EMF We follow the latest scientific developments on the subject, including the recommendations of the World Health Organization (WHO) and the International Commission on Non- Ionizing Radiation Protection (ICNIRP), an independent reference entity that contributes with recommendations as a result of studies on the impact of non-ionizing radiation on human health. Follow-up of the activity of organizations which monitor EMF impacts At a national level, we participate in initiatives such as the FAQtos, promoted by INOV, INESC INOVAÇÃO with the aim of monitoring and disseminating information on the impacts of electromagnetic radiation to public entities such as municipal councils, schools, hospitals, and health centres. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 137 Support for the “Prémio FAQtos”, to promote youth literacy on EMF In this context, we annually support the national " Prémio FAQtos "competition, aimed at high-school students. The initiative is part of the curriculum for all study areas and aims to help raise collective awareness of electromagnetic fields and their potential effects on human health, the environment and society. Follow-up of studies on the impact of the new 5G networks on the land mobile service EMFs We are following the studies conducted by various organisations on the impact of the new 5G networks on the electromagnetic field emissions of the land mobile service. Given the widespread public interest in this topic, various national and international organisations, such as ANACOM, the French regulator, ANFR, and the British regulator, OFCOM, have also conducted and released studies on the subject and the main conclusion is that the values measured are below the ICNIRP limit values, and that 5G's contribution to the total electromagnetic field is minor. In 2022, ANACOM published a guide clarifying doubts about the impact of mobile networks on human health and environmental balance. This publication provides answers to questions on emerging topics concerning the human and environmental safety of electronic communications networks, with a special focus on electromagnetic fields. NOS participates in the EMF Working Group, promoted by ANACOM With the ultimate aim of updating the current standards and procedures for measuring and calculating electromagnetic fields and measuring the power density around the human body, in order to include new radio technologies, a working group was created in 2021 under the aegis of ANACOM, with the aim of gathering national contributions in the field of "electromagnetic fields in the human environment”. NOS participates in this process, as a permanent member of the National Technical Committee for Electrotechnical Standardization CTE 106, which carries out its activity in the scope of “electromagnetic fields in the human environment”. The national committee comes from the equivalent technical committee of the European Committee for Electrotechnical Standardization (CENELEC) - CLC/106X. During 2022 and 2023, the working group conducted various EMF measurements with a special focus on 5G technology with multi-beam technology. An update on the measurement procedures to be applied when reporting annual EMF measurements is expected soon. Increased communication and internal training on EMF In 2023 we reworked our EMF Radiation Control Procedure internally. As a complement, we digitalized the internal process for reporting and recording risk situations in which EMF values are above the stipulated values. The new Procedure was communicated through specific training sessions aimed at employees whose activity areas at NOS are more exposed to this type of risk. We also reinforced the provision of protective equipment (dosimeters) for employees to use. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 138 2.3.6 Security & Privacy Overview Security & Privacy (S&P) is a critical topic for NOS. The management of this topic in our organization encompasses a governance model with specific roles and responsibilities for S&P, various S&P policies, standards, and processes, as well as a set of programs featuring initiatives in the areas of information security, cybersecurity, personal data protection and business continuity. Of these initiatives, we highlight the following in 2023: the development of the new "S&P by Design 2.0" framework, with the respective new support tools and the training actions held on this new framework; continued strengthening of the Cybersecurity team in its various specialties and the respective technological tools used to prevent, detect and respond to incidents; reviewing the Basic Security and Privacy Assessment, which is fundamental for analysing risks and identifying measures to protect personal data; strengthening disaster recovery capacity with a technological impact; and implementing a Crisis Management Plan and Contingency Plans for the 2023 World Youth Day period. NOS also continued its actions on combating fraud and copyright protection. Security & Privacy Approach NOS' Security and Privacy (S&P) governance model is based on the 3 lines of defence model, to ensure an effective and segregated distribution of responsibilities within the organisation. The Executive Committee has ultimate responsibility in the organisation on this topic. In the 1st line of defence for S&P risk management are the various areas of the organisation with direct responsibility for ensuring the S&P of the processes and assets they own. In the 2nd line we find key roles in NOS's S&P approach, highlighting the Central S&P Team and the areas' S&P Pivots, as well as the CISO and his Cybersecurity team, the DPO and Legal. The approach is completed by the 3rd line of defence, comprised of Internal Audit and the corporate governance bodies that oversee risk-related issues. The Information Security Policy (ISP) is the guideline that determines the S&P stance of our organisation as a whole. It comprises the General Information Security Policy and all the company's S&P standards and other documents, organised in a hierarchical structure. Security & Privacy (S&P) governance model NOS' Security and Privacy (S&P) governance model adequately addresses the growing exposure to security, privacy and continuity risks and the legal and regulatory framework risks, which have increased considerably over the last few years. Supported by three lines of defence, a reference practice in Governance, Risk & Compliance (GRC), the NOS Security and Privacy governance model aims at an effective and segregated distribution of responsibilities, highlighting the role of the various stakeholders and the type of relationship in Risk Governance. Transversely to the aforementioned lines of defence, the NOS Executive Committee represents the management's commitment to S&P, approves the S&P Governance Model and the S&P strategy and planning, having the utmost responsibility for S&P topics in the organization. The security and privacy of all people who interact with NOS is a critical topic, and one we continue to prioritize. Our management of this topic guarantees customers, employees, suppliers, partners, and other stakeholders that they have the necessary and appropriate conditions for safe use of our services. 83% In 2023, 83% of NOS employees completed the three Stages comprising the 14 S&P e-learning modules, 1 pp more compared to 2022. Internal S&P training 75% In 2023, 75% of employees of the main NOS Partner Academies completed other e-learnings on S&P, 2 pp less compared to 2022. S&P training for partners 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 139 1st Line of Defence The 1st line of defence in S&P risk management are the various areas of the organisation (Corporate, Business and Technology areas), which have direct responsibility for ensuring the S&P of the assets they own (processes, systems, products, services), operationalising the defined S&P strategy and managing S&P risks to ensure compliance with the organisation's internal and external requirements. 2nd Line of Defence In S&P's 2nd line of defence, we highlight the following functions: The Central S&P function is part of the Audit, Risk and Compliance department (reporting to the CCO - Chief Compliance Officer). The main role of this team is to (i) develop a strategic plan, guidelines and support the areas in S&P and associated risk management and (ii) develop methodologies and tools to support the organisation's S&P management. The Chief Information Security Officer (CISO), under the Quality and Transversal Projects department, which has responsibilities of a transversal nature in the technological areas (reporting to the CTO - Chief Technology Officer), has a Cybersecurity Team which is responsible for the security of NOS' technological cluster, articulating with the other technological areas' S&P Functions. The Data Protection Officer (DPO) (reporting to the CFO) is a pillar of the Organization's compliance with the laws and rules applicable to the protection of personal data and privacy. The Legal Department (reporting to the CCO - Chief Compliance Officer) who provides advice to the various elements responsible for S&P topics. The various S&P Functions of the Areas which represent the extension of the Central S&P Function, being responsible for coordinating the correct management of S&P risks in the respective areas. 3rd line of defence In the 3rd line of defence of the Security & Privacy governance model, we highlight the Internal Audit, an independent figure in risk management. They report hierarchically to the Executive Committee and functionally to the Audit and Finance Committee and the Statutory Independent Audit Board. Internal Audit's main role in S&P Governance is to provide assurance on the reliability of S&P Management's risks and processes within the organisation. Security & Privacy Policies The Information Security Policy (ISP) is the guideline that determines the S&P posture of our organization as a whole. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 140 It comprises the General Information Security Policy and all the company's S&P documents, organized in a hierarchical structure. • General Information Security Policy, constituting a corporate Policy, applicable to corporate functions and electronic communications (focus), cinemas, audiovisual and advertising businesses; • Specific Policies, Standards, Rules, and Guidelines on certain sub-domains of ISP, whose development responsibility lies predominantly with the S&P Central Function; • Procedures, Processes, and other documents that operationalize the ISP and that are managed and controlled by the (Corporate, Business and Technological) areas, through the respective S&P Functions/Pivots. Information Security Policy (ISP) Main Security & Privacy documents available and communicated to internal employees, partners, and customers Security & Privacy Documents General Information Security Policy Identify the Information Security principles that must be followed by NOS employees and service providers, as well as defining ISP's security levels, domains, subdomains, and the respective control objectives Statement of Commitment on Privacy and Personal Data Protection Explain NOS' commitment to privacy, security, and data protection rules, ensuring that all those who process personal data within the scope of their relationship with NOS subscribe to and act in accordance with the underlying principles Customer Privacy Policy Communicate the main guidelines on the protection of Customer's privacy and personal data Employee Privacy Policy Communicate the main guidelines on the protection of Employees' privacy and personal data User Safety Rules Manual Communicate the main rules to be complied with by Internal Employees and NOS Partners' Employees on the following topics: (i) Security Organisation, Roles and Responsibility; (ii) Human Resources Security (includes both internal employees and partners); (iii) Systems and Facilities Security (includes logical and physical access management); (iv) Safe Use of ICT Resources; (v) Information Classification and Management; (vi) Security Incident Management; (vii) Business Continuity Management; (viii) Confidentiality of Information and Privacy of Personal Data Security and Privacy Quick Guide To recall the fund amental technical security measures in information and equipment use and organisational privacy measures in the processing of Personal Data 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 141 Security & Privacy Processes The Security & Privacy (S&P) programs and processes we have developed and maintain translate into practice the principles of our policies, allowing us to manage the risks related to availability, integrity, confidentiality, privacy, and cybersecurity associated with information/data, processes/assets, or products/services. NOS companies, areas and employees are responsible for ensuring the operation and monitoring of security, privacy and business continuity controls whose implementation is assigned to them. The NOS Security & Privacy Central team is responsible for defining the S&P processes and promoting their implementation in the organization. Security & Privacy Processes Planning and strategy (including S&P Steering Committees) S&P objects (inventory and risk assessment of assets, activities and products or services) Policies and Regulations Record of processing activities (RPAs) Tra ini ng an d Awa re ne ss Privacy Impact Assessments (PIAs) Control and monitoring (including risk assessments, control of S&P initiatives, KRIs) Subcontractors Security & Privacy by Design Business continuity and crisis management (BCM) Compliance support (including changes to S&P legislation and/or regulation, area support) S&P Incidents S&P Certifications Information security management The NOS Information Security Management (ISM) program aims to implement processes to protect information and its supporting assets on the three fundamental pillars (availability, integrity, and confidentiality). Information protection must comply with both internal information policies and external laws and regulations. The service requirements documented in the agreed service levels, contracts or operational agreements with customers must also be considered. 8 Main Information Security Areas Organization & Management of Security Risks Human Resources Security Systems & Installations Security and Operation Information & Communication Management Incident Management Business Continuity Management Monitoring & Auditing Privacy & Personal Data 1 2 3 4 5 6 7 8 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 142 Regarding security management processes, we highlight some points: NOS is certified to the ISO27001 Information Security Management System standard, covering: the business processes relating to installation, activation, account management and service requests, billing, and collection from communications customers, in the Private (B2C) and Business (B2B) market segments; and also, the security processes relating to NOS Data Centre services. Maintenance of this certification is subject to annual Internal Audits and External Audits; The information security management system, namely the requirements required by the ISO 27001 standard, are mapped in the NOS Internal Control Manual. This Manual is subject to periodic compliance self-assessment actions (Control Self-Assessments) by the areas responsible for controls, in collaboration with the S&P Central team. For internal control procedures considered non-compliant, corrective actions are defined; Regarding the management of security risks, we also use risk sharing and transfer strategies, so it is important to note that NOS has a professional civil liability insurance policy that includes a "Data Protection & Cyber Liability" module that covers information security risks (own damage and third-party damage). Cybersecurity management NOS develops and maintains Cybersecurity initiatives, with the aim of protecting information and its support assets against threats from possible attacks and unauthorized external access, guaranteeing their confidentiality, integrity, and availability. These initiatives are aimed not only at defining and implementing improvements in Cybersecurity operational procedures, such as incident management procedures, but also at the continuous monitoring of Cybersecurity risks, promoting proactive action in mitigating potential weaknesses Chief Information Security Officer (CISO) and Cybersecurity Team For cybersecurity issues, NOS has appointed the CISO - Chief Information Security Officer, Duarte Sousa Lopes, who reports to a member of the Executive Committee, namely the CTO - Chief Technology Officer, Jorge Graça. The CISO and his specialised Cybersecurity Team are part of the technological areas and have the following main responsibilities: Cyberintelligence and Offensive Security Monitoring the risk outlook, assessing vulnerabilities and internal alignment to reduce technological and process risks. • Monitor technological changes and ensure the reassessment of security issues. • Implement relevant use cases aligned with cybersecurity processes. • Identifying and exploiting vulnerabilities and forensic analysis of S&P incidents. • Identify needs and promote specific cybersecurity training and awareness- raising actions. Security Strategy and Architecture Collaborative design of the cybersecurity strategy, reducing risk through the implementation of best security practices in networks and information systems. Structured evolution of capabilities, based on new platforms and benchmark architectures. • Develop the Cybersecurity strategy aligned with the transversal strategy and planning guidelines proposed by the S&P Central function. • Develop, implement, and maintain cybersecurity management policies, standards, and procedures (e.g., incident management, security assessments). • Conduct cross-sectional mapping of security weaknesses, maturity, and progress indicators. • Plan and perform security assessments on a regular basis. • Liaising with the Network Security Officer, the S&P Central Team and Regulation regarding security weaknesses and the findings of network and service security monitoring. • Be responsible for managing the security of cloud services under Law 46/2018. Cyberdefense Coordination of the cyber defence operation. Representation of NOS as an official point of contact with the National Cybersecurity Centre (CNCS). • Coordinate the organization's Cyberdefense operation and Security Operations Centre (SOC). • Create mechanisms for continuous and proactive monitoring of security weaknesses. • Assess impacts of identified incidents and ensure their containment and resolution. • Define and implement a response plan for threats, incidents, and critical scenarios. • Support the reporting of incidents that affect the security of networks and services to regulatory bodies and internal and external communications during disruption scenarios. • Supporting the assessment of the sufficiency and suitability of the cybersecurity measures implemented by service providers who manage or operate information systems/networks at NOS. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 143 Network Security Officer NOS also has a Network Security Officer, Jorge Frazão Oliveira, who is the appointed NOS representative for the purposes of ANACOM's Network and Service Security Regulations and the Cyberspace Legal Framework. Incident Management At NOS we promote a "zero tolerance" culture regarding cybersecurity incidents that jeopardise NOS information and data, which is why there are measures in place should the S&P Policies be breached. In the event of S&P incidents (security, privacy, continuity) NOS has several processes defined and implemented for the respective management that specify the procedures to be followed in the stages of: detection; screening; processing; reporting to regulatory bodies and notification to affected customers; and post-mortem incident analysis. We highlight that: All internal and partner employees must report, through the defined channels, any S&P incidents of which they are aware, as well as collaborate in the investigation of the incident if necessary. The violation by a NOS employee of any S&P standard, rule or procedure that falls under the NOS S&P Policies constitutes grounds for a potential disciplinary offence and may be sanctioned, depending, if confirmed, on its seriousness, and the Employee may incur civil and/or criminal liability. In the case of a Partner's employee, through the respective partner companies/suppliers, the sanctions provided for in legal disputes or in the contract will apply. Personal data protection management For NOS, privacy is a concept of information security associated with confidentiality which includes information protection, in particular the personal data of customers, employees and other data subjects, with the aim of ensuring compliance with applicable standards and the fundamental right of each individual to have access and decide who should have access, at any given time, to their data. In this context, and in conjunction with the Information Security Management (ISM) program, we have developed and maintain a program of initiatives aimed at implementing processes for the protection of personal data, as well as continuously monitoring and improving compliance with the General Data Protection Regulation (GDPR) and other legislation with an impact on privacy. Data Protection Officer (DPO) For specific issues relating to the privacy of personal data, NOS has appointed a Data Protection Officer (DPO), Pedro Cota Dias , whose main responsibilities include: Data Protection Officer (DPO) • Monitor data processing compliance with applicable standards • To be a p oi nt o f co nt ac t wi th c us to me r s, u se rs , or o th er d at a holders for the clarification of questions related to the processing of their data by NOS • Cooperate with the national supervisory authority (CNPD - National Commission for Data Protection) • Provide information and advice to the data processors or controllers on their obligations in terms of privacy and data protection. Among the various technical security and organizational measures specifically implemented to ensure the protection of personal data (of customers, employees, and other data subjects) by our employees, we highlight the following: • All internal employees and partners' employees are obliged to protect personal data and maintain the confidentiality of NOS information, and therefore are not allowed to share any data they have access to during and as a result of their work. These obligations remain in force even after leaving the company (termination of the employment or provision of services contract. • In the case of internal employees, these obligations are included in the clauses of employment contracts or in a "Statement of Liability on Confidentiality of Information and Protection of Personal Data”. • For partners, personal data may be transmitted to partner companies for them to process the data on behalf of NOS, acting as subcontractors. In these cases, NOS takes the necessary contractual measures to ensure that subcontractors respect and protect personal data. These obligations are part of the "Data Processing Agreements" signed between NOS and partner companies whose employees may have access to personal data of customers, employees, or other data subjects. In addition, partners are responsible for communicating and enforcing these rules to all employees who provide services to NOS. Partners' employees must sign a "Statement of Liability for Use of IS/IT, Confidentiality and Protection of Personal Data". • Partners, as subcontractors, are contractually obliged to observe the duties of confidentiality and secrecy and to ensure the security of any personal data communicated to them for this purpose and may not use such data for any other purpose, for their own benefit or for the benefit of third parties or correlate it with other data in their possession. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 144 • When selecting and contracting our partners, we communicate the "Sustainability Requirements for Suppliers and Partners" (which include obligations on Information Security, Personal Data Privacy and Business Continuity), and partners are obliged to comply with them. • Internal employees and partner employees can only access and process personal data which they are authorised to, according to their needs (need-to- know), and only for permitted and lawful purposes in accordance with the Records of Processing Activities (RATs). Through its Privacy Policy, NOS informs its customers that in order to collect, use, process or retain their data, at least one valid lawful ground must exist, such as the customer's consent, the performance of a contract or pre-contractual steps, the compliance with a legal obligation and/or the NOS' legitimate interest. • NOS has auditing processes to verify compliance with the Privacy Policy, such as verifying whether employees access personal data exclusively for the purposes of performing their professional duties, to ensure the protection of personal data. NOS performs various types of audits, including Internal Audits (e.g. Access to Personal Data, Information Security), External Audits (e.g. ISO27001 Certification, External Audit to ITGC Internal Control), Continuous Monitoring (e.g. Circularisation of Access to Information/Critical Data) and Incident Audits (e.g. investigation of Security & Privacy incidents). Business continuity management NOS develops and maintains a Business Continuity Management (BCM) program with the objective of implementing processes to reduce the risk of interruption of critical business activities or of critical products and services, arising from disasters, technical-operational failures, or massive human resource failures. With regard to business continuity management processes, we highlight that: • The processes cover the facilities, network infrastructures and the most critical activities that support critical services, for which resilience strategies, continuity plans and actions are developed, as well as S&P incident/crisis management procedures. • Continuity processes are periodically subject to impact and risk analyses, such as Business Impact Analysis (BIA) and Risk Assessment (RA), and some of these specific risk analyses may incorporate Sensitivity Analysis and/or Stress Testing mechanisms. • Facilities and infrastructures are also periodically subjected to audits, tests, and drills. • NOS promotes liaison with external official entities for disaster scenarios, protection of critical infrastructures and crisis communication, including, for example, collaboration with ANEPC (National Emergency and Civil Protection Authority). • In the event of disruption to the communications services network, customers can check the network status on the NOS website and find out whether there are any planned improvements or unexpected situations. This information is disclosed whenever events with a significant impact occur, in accordance with the obligation to inform the public provided for in the sector's regulations by ANACOM (National Communications Authority). For more information, see the section on "Quality of service, network resilience and reliability, and emergency response". Security & Privacy Actions In 2023, we continued to develop new initiatives and deepen ongoing initiatives in security, cybersecurity, privacy, and business continuity. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 145 Main Security & Privacy Initiatives developed in 2023 Update of relevant internal Security & Privacy Standards (e.g. Access Management Standard, Incident Management Standard). Rework of the Responsible Disclosure of Security Vulnerabilities Policy, which aims to define the cooperation methodology between the infosec community and NOS for ethically and responsibly identifying and disclosing security vulnerability. Development of the new "S&P by Design 2.0" and respective new support tools (e.g. New Business & Partnerships framework; Marketing Communications framework; subcontracting questionnaire, etc.). Update of the Basic Security and Privacy Assessment (BSPA), an internal tool used to analyse risks and respective S&P measures to be applied in personal data processing, systems development, product & service development, among other types of projects. Continuation of the incorporation of S&P by Design requirements in structuring transformational projects regarding Advanced Analytics, Go To Cloud and Digital Marketing. Continuation of the update of the Business Impact Analysis (BIA) for the critical activities of the Telco business and the extension to the Cinemas business focused on technological failure scenarios. Continued strengthening of the Cybersecurity team in its various specialties, with the objective of consolidating the risk identification and mitigation model and promoting the creation of transversal capabilities. Continuation of the Risk Assessment (RA) for the specific features of the Business' products/services. Reinforcing the set of technological tools used to prevent, detect, and respond to cybersecurity incidents (e.g. Endpoint Detection and Response; Threat intelligence; Vulnerability Management; etc.). Strengthening of security perimeters, to reinforce and standardize security measures in different layers, ensuring the protection and integrity of critical assets for business continuity and minimizing recovery time. Increased proactive actions to identify security vulnerabilities as quickly as possible and strengthen the Vulnerability Management process. Reinforcing disaster recovery capacity with a technological impact (e.g. reinforcing replications/redundancies in the critical systems infrastructure; reinforcing backups, including cloud backups). Development of projects to improve logical access management strategies, processes, and mechanisms (e.g. corporate identity management; external partner access management; continuous access monitoring/circularization; etc.) Update of the Crisis Management Plan and Contingency Plans (e.g. communications network, customer support, technical support, etc.) to prevent potential failures during World Youth Day 2023. Continuation of the review of the various internal controls associated with the requirements of the ISO27001 (Security) and ISO20000 (Service Management) standards. Conduction of a security incident drill, involving the Operational Tec hnolog y and Cybersecurity teams. Security & Privacy training and communication Training and raising awareness of practices and behaviours which minimize S&P risks is key to maintaining and properly managing these aspects. To this end, since 2022, we have been renewing and reinforcing the content of two of the main internal communication tools on S&P: • The S&P Portal - repository of Policies, Standards and Procedures; • The BCM Portal - repository of Crisis Management Plans for various scenarios. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 146 S&P by Design 2.0" training Regarding the S&P Portal, we highlight the development and publication of the new "S&P by Design 2.0" framework, which aims to systematize and detail more easily and intuitively the activities to be conducted by NOS areas to apply the S&P by Design requirements and processes. To promote the new "S&P by Design 2.0" content, a training program was developed during 2023, mainly aimed at the S&P Pivots of the NOS areas. The training sessions, mostly on-site, included theoretical components (flow explanations) and practical components (demonstration and application of the S&P tools with real use cases). The "S&P by Design 2.0" training program has two levels of complexity, composed of different modules, with the following results obtained in 2023: Foundational level Mandatory completion for S&P pivots Consists of two modules, "S&P Basics" and "Subcontracting", which cover various essential S&P activity flows. 12 Sessions 8 on-site 4 online 122 Participants Advanced Level Optional completion Consists of two modules, "Developing Analytics Use Cases" and "Developing Products & Services and Partnerships", which cover more complex S&P activity flows 5 Sessions 5 on-site 48 Participants E-learnings on "Security & Privacy" for employees We have also continued to implement the training plan for most employees and partners, which includes e-learnings on "Security & Privacy". Phishing Awareness Drills In 2023 we continued to run more Phishing Awareness drills, a user awareness and training initiative that includes phishing attack drills and interactive training videos on how to behave when faced with potential phishing messages. The Phishing Awareness drills covered around 12,000 users (NOS Employees and Partner Employees), and continued to show an improvement in user behaviour: • The vast majority of users continued to correct their behaviour in subsequent drills compared to previous drills, with the level of difficulty of subsequent drills increasing depending on each user's correct behaviour in previous drills and also depending on the user type. • An increase in phishing reports by users was verified, using the report button feature available in MS Outlook. • The percentage of users who have compromised their access credentials in these phishing drills has been low and has been decreasing consistently, since these users are mandatorily directed towards the training content. • There has been an improvement in the completion rate of training content by users, boosted by the introduction of new mechanisms which require the user to complete the training to continue to have valid access credentials. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 147 In 2023, we also provided our employees with a number of phishing and cybersecurity alerts, among which we highlight the email communications, addressed to all NOS Employees and Partner Employees, on the following topics: • "Targeted phishing attacks. Can you spot them?": communication aimed at alerting people to the rise in increasingly advanced, sophisticated, and targeted phishing attempts, accompanied by a set of recommendations to help employees verify the authenticity of messages. • "Use AI tools safely and responsibly": communication aimed at raising employee awareness of the security and privacy risks associated with the use of Artificial Intelligence tools, accompanied by a set of recommendations on safe behaviours to adopt when using them. Combating content fraud and copyright protection Television content fraud, such as peer-to-peer sharing or the commercialisation and illegitimate streaming access to linear and non-linear content, and to real-time events, namely sports, constitutes an infringement of intellectual property rights and, in particular, affects the profitability of pay TV operators, including NOS. This is a sometimes- complex reality to decipher, an aspect which is also reflected in the ways of acting, from a proactive perspective, which is why NOS has a dedicated Content Protection team. Since 2015, NOS, as an Internet Service Provider (ISP) and member of APRITEL, has performed thousands of blocks (about 4,000) by Domain Name Server (DNS) for copyright and related rights protection. These blocks, supported by judicial or administrative orders, inhibit access to illegitimate content, such as movies and series, but also allow us to avoid sharing malware on the NOS network and on our customers' equipment, since illegal sites (streaming and online gambling) are one of the main tools for sharing viruses or malware. During 2022, the operationalization of Law n. º 82/2021, of November 30, 2021, - Law on Monitoring, Control, Removal and Prevention of Access to Protected Content, regarding contents protected by copyright and related rights, with the effectiveness of the first blocks already framed in the procedures introduced by it. NOS maintains an active stance of contribution towards the various national and European Union stakeholders interested in these matters. To this end, NOS participated actively from the outset in the public consultation process on the European Commission's proposal for a recommendation on combating online piracy of sporting events and other live events, contributing clear proposals for legislative reinforcement at pan- European level to combat piracy in the audiovisual sector, as well as demonstrating the impacts of the phenomenon, a KPI toolkit and also sharing the Portuguese experience, particularly on a legislative level. In this context, the European Parliament adopted a Resolution on 19 May 2021, which the Commission followed up with the approval of its Recommendation of 4 May 2023, which will have its final wording and respective decision by the European Commission in 2025. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 148 2.3.7 Network infrastructure quality, availability, and resilience Overview NOS network, which is increasingly comprehensive and based on state-of-the-art technology, allows for the provision of a reliable service of widely recognised quality, both under normal use and when responding to extreme situations. The heavy investment made over recent years in the infrastructure's scope and technological renovation is coupled with investment in improvement initiatives, such as new redundancy solutions and ever greater automation in fault resolution processes, which is reflected in the continuous improvement of quality, availability, and resilience indexes. In 2023, we continued the work developed in recent years, highlighting, among other things: • The performance achieved during the World Youth Day gathering in Lisbon; • The revision of the interconnection architecture with the Azores and Madeira islands; and • The award of the 2/7 lots to NOS which comprised the public tender for the provision of operation and maintenance services for SIRESP, the State's exclusive network for emergency communications, which demonstrates the trust placed in the company's systems and response capacity. A resilient, reliable, and available system The quality, availability, and resilience of the infrastructures and all the resources inherent in the services NOS provides are essential foundations for achieving the excellence goals established with customers in mind. For this reason, the company is continually working to improve the resources installed and to ensure an increasingly optimised response capacity. The actions developed also contribute to improving the ability to support the authorities and the population in general in the event of unexpected or extreme events. The entire implemented strategy is aimed at excellence in the provision of the services that NOS offers, through sustainable and increasingly automated methods and operating models. The new post-pandemic network usage patterns, associated with a greater preponderance of remote and hybrid working models, continue putting pressure on telecommunications networks - mobile and fixed - with customers more demanding, because there is greater dependence on the continuity of this type of service. The new working models mean that during working hours there have been changes in traffic patterns, in both volume and geographical dispersion on the outskirts of large cities, requiring a greater state of readiness to resolve faults in what used to be essentially residential areas, where previously the usage peaks were only towards the evening. To ensure reliability and quality standards tailored to the needs and excellence standards that NOS aims to provide, new service redundancy solutions and new physical layouts have been implemented over time, which have led to a significant reduction in the volume of incidents with a major impact. These results are also the product of the implementation of analytical models which, based on recorded occurrences, help to proactively identify situations that may result in service degradation or interruption, enabling early action to be taken. Increasing automation of monitoring and intervention in the event of network failure During 2023, we continued our strategy of reinforcing new automation and digitalisation processes, with faster detection and resolution times in the event of a network failure. The development projects conducted in previous years have allowed the fault resolution times to be reduced due to this strategic bet on automation. Whenever an event is detected which indicates service unavailability, the corresponding fault resolution flows are run automatically. Furthermore, the automatic routing of tasks to other partners in the field has been improved and extended, minimising the time elapsed between detection and the assignment of each task to the available technicians. 100% redundancy in the central service platform models (VOICE, TV, and INTERNET), ensuring very high levels of service resilience and availability Central Platforms Resilience 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 149 The digitalisation of processes improves the agility of teams by eliminating low-added value repetitive tasks, which enables better resource allocation to more complex processes and more effective monitoring of network interventions. The dynamics which can be achieved thus increase the fault resolution capacity. Datacentre resilience In Datacentre and Cloud areas, NOS has continued its strategic bet on optimising and improving the resilience of its service infrastructures, continuing with the implementation of a new multi-AZ (AZ = Availability Zone) and multi-region architecture, applicable to some systems that require this kind of resilience. This type of solution ensures that if a computing or storage component in one of the areas fails, a second one can provide the service without any impact or functional disruption, guaranteeing total protection in datacentre failure scenarios. In the information management area, we also continued to complement our storage technologies with an innovative Smart Storage solution, which allows for a more effective information distribution through technological levels suited to differences in data criticality and performance requirements in terms of access. The new platform has been implemented in a resilient by design model, ensuring the geographical resilience of the information by default, so as to guarantee its total availability in the event of a total loss of a datacentre. In the automation area, the effort to digitalise Datacentre and Cloud service provision and control processes continued, involving the development of the mechanisms necessary to automate the creation, activation, and management of resources at NOS' Datacentres, as well as at the main Cloud service providers (AWS, Google, and Azure). These efforts translate into faster implementation times, also allowing for no human intervention in the processes, with the inherent reduction in the potential for human error, while simultaneously promoting a more sustainable operation, due to reduced travelling. Access/transmission network resilience Various projects have been implemented which, resulting from ongoing resilience analyses or the impact analysis of force majeure events, namely the fires which occurred in the centre of the country in 2022, in the districts of Leiria and Santarém, have resulted in improvements to the resilience and quality of NOS' networks. We highlight the project to improve the resilience of fibre network routes in the north and in Baixo Alentejo/Algarve, which began in 2022 and was completed in 2023, as well as improvements to access and transmission networks in the centre of the country - Leiria and Santarém districts. Various improvements were also made to processes and tools, of which we highlight the following: • Automation development to optimise geographical analysis processes for transmission circuit layouts, allowing for easier detection of weaknesses and optimisation opportunities; and • New models and tools to optimise root-cause identification processes in the event of a fault, enabling faster recovery processes. Upgrade of mobile station batteries and management of peak consumption In 2023, while continuing to modernise the network for 5G, the progressive replacement of lead acid batteries with the latest generation of lithium batteries, which can withstand many more charge/discharge cycles, was maintained, thus enabling the Peak Energy Control feature to be activated. This new technological feature allows battery charging to be controlled, allowing it to take place during periods of low consumption (off- peak hours). Energy management is thus more effective, which contributes to better cost management and better management of electricity grids, one of the most critical problems identified in the energy crisis in Europe, with benefits for security of supply and, in turn, for the resilience of the communications network. The activation of Advanced Analytics also enabled the Peak Energy Control process to be optimised individually - for each mobile station - according to their profile. Island interconnection resilience In 2023, we reviewed the architecture of the interconnection with the islands to guarantee better mobile and fixed services in the Autonomous Regions of the Azores and Madeira, and following the whole 5G network investment process, which this year began to fully cover the two autonomous regions, with the conclusion of the Azores expansion. Central service platform resilience As a result of several years of strong investment in VOICE, TV and INTERNET service resilience, NOS currently has very high levels of service availability, through its central platforms' 100% redundant models. In 2023, improvements to TV and Messaging services were made, with the renovation of geographical redundancies for non-linear TV platforms, the contribution of the most relevant channels and the implementation of a new redundancy architecture for messaging systems (SMS). Energy efficiency of installations and equipment NOS has continued its strategic bet on renewing its datacentre and technical room equipment. During this process, one of the priority criteria was the renovation of equipment that would maximise energy efficiency gains, which has resulted in the proactive renovation of various pieces of DC, UPS, and HVAC equipment. 2.1 2.2 2.3 We assume responsibility 2.4 2.5 2023 Annual Integrated Report 01 02 03 04 150 Other components of the energy efficiency program which contribute to increasing the resilience of the network have also been reinforced. For more information on energy efficiency, see " On behalf of the Planet" Emergency response capacity Regarding service continuity and emergency response, 2023 was a very special year, with a major event such as World Youth Day Lisbon. With millions of people continually moving around the city of Lisbon, mobile services (data and voice) had to be provided in locations with a very high concentration of people, as well as at road, pedestrian, and public transport access points. In this challenging context, the stability of services was guaranteed both during and after the scheduled events. To ensure that everything went as planned, monitoring plans were prepared in advance, with associated action and contingency processes to guarantee the continuity of services for both regular customers and all foreign customers who signed up to the NOS network. In 2023, requests to send alerts to the population using the mobile network, requested by the National Emergency and Civil Protection Authority (ANEPC), were also successfully ensured, whether the alert requests were made in advance or instantly. Requests to send alerts were handled with the utmost urgency, and the periods defined for mass messaging were complied with, followed by the respective monitoring of the messages delivered so as to report to ANEPC the percentage of customers who were notified in the desired geographical areas. This system was used recurrently to notify the population in geographical areas affected by anomalous natural phenomena, as well as in fire scenarios. NOS makes a significant contribution to public safety and emergency response, having increased its commitment by being awarded 2 of the 7 lots comprising the public tender for the provision of operation and maintenance services for SIRESP, the State's exclusive emergency communications network. These lots guarantee SIRESP's terrestrial circuit transmission services (Lot 2) and satellite transmission redundancy services (Lot 3). The implementation of this project involved a strong engineering component in the architectural design to ensure the simultaneous operation and resilience of both lots. The migration of the services to the NOS network was completed so that services would be fully operational in the 4th quarter of 2023. The strategic bet over the years on network resilience and process optimisation is now key to successfully meeting the objectives associated with providing these services. 2.1 2.2 2.3 2.4 We want more 2.5 2023 Annual Integrated Report 01 02 03 04 151 2.4 We want more With increasingly strong connections inspired by the future, NOS continues to stimulate positive transformation, paving the way for inclusion, innovation, competitiveness, and sustainability. With "connections" as its business, and a DNA of innovation, rigour, and a desire to go further, NOS has been able to demonstrate the robustness of its value creation model, its strategy, and its team. Another year of challenges and achievements Although 2023 saw the official end of the Covid-19 pandemic, a positive fact with transversal impact and especially positive for the audiovisual sector, one of the Group's business areas, the overall reality was that it was still a very challenging year, with prospects worsening in the final stages, given the new conflict in the Middle East, and growing geopolitical instability. But the truth is that, despite the challenging and complex context which has persisted throughout the Group's current strategic cycle (2021-2025), 2023 represented another year of achievements and very positive contributions, with NOS: • once again expanding its leadership in 5G, bringing its state-of-the-art network and services to an ever- increasing number of Portuguese, reaching a new coverage and investment record: 5G coverage of 94% of the Portuguese population and around 420 million euros of accumulated investment in the fifth generation of mobile networks.; • once again inspiring customers and society to do what nobody else has done, by continuing to demonstrate the potential of 5G and digital technologies to pave the way for new possibilities, such as providing sensations to people with physical impairments who would otherwise not be able to experience them; and • maintaining a strong presence in the national innovation ecosystem, with multiple projects and a very broad partner network, having a direct impact on the digitalisation of society and the promotion of sustainability by supporting the development of disruptive technological solutions, such as an app that identifies construction works to be done on buildings to improve their energy efficiency. NOS's investment efforts in technology, innovation, and service quality and experience continued to be strongly reflected in 2023, again with high recognition levels from independent national and international organisations and increasing customer satisfaction levels. This effort is reflected in the positive stimulus that NOS has been able to provide, offering the future not only to its customers, but to society as a whole. This represents a clear strategic bet on the country and on strengthening its competitiveness, contributing to the acceleration of the digital transformation of Portuguese companies and regions, through advanced technological solutions, leveraged by the potential of 5G, which provide efficiency gains and, therefore, sustainability. Solutions such as remote support in the healthcare sector, augmented reality for industry, or intelligent irrigation or traffic management systems, and other solutions for smart cities. In 2023, NOS further expanded its commitment and the alignment of all its activities with sustainable management practices. A mindset that is increasingly embedded and transversal to all company operations, reflected in multiple dimensions: • including the continuous reinforcement of solutions aimed at reducing the ecological footprint of internal processes and products & services, both in the consumer and business segments, combined with the promotion of more responsible and sustainable behaviour in the customer's choice of products, in particular the listing of products with Eco-Rating.; • the launch of an ESG evaluation model for the supply chain, which will strengthen the alignment of the entire chain with NOS' ethical, environmental, and social principles; • we also highlight the increasingly comprehensive strategic bet on developing the population's digital skills and social inclusion through training, with the ZERO1 Project as the main initiative in this area. This initiative expanded its scope from 18 to 54 classes in the elementary and middle schools from the initial school year (2022/2023) to the current year (2023/2024), focusing on intervention in geographically decentralised areas with greater socio-economic challenges. • from financing, where the sustainable financing component has been growing very significantly - the contracted debt associated with ESG ratings and sustainability indicators and targets reached 70% in May 2023 and reached 95 % at the beginning of 2024; All these aspects are part of a wider set of results highlighted throughout this Report, which reflect NOS' strong commitment to its customers, to Portuguese society, and to the Sustainable Development Goals (SDGs). They also reflect the Group's ability to implement its value creation model, which, although presented differently than in previous reports, relies on the same set of differentiating assets: a unique combination of people, technology, infrastructures and know-how, combined with an innovative and bold spirit, and guided by a business development plan that combines core strategic priorities with an ambitious sustainability framework, focused on relevant sustainability issues in the context of the organisation and its stakeholders. 2.1 2.2 2.3 2.4 We want more 2.5 2023 Annual Integrated Report 01 02 03 04 152 Future outlook NOS wants more and, with the determination, enthusiasm and rigour of the management team and the entire team, it will pursue the ambitious strategic plan for development and value creation that it has planned for the 2021-2025 period. Moving forward in the strategic cycle, NOS will consolidate its leadership in new generation networks and take advantage of its technological characteristics to create innovative solutions which support this competitiveness and help customers address their sustainability challenges, while also continuing to accelerate the dissemination and adoption of these technological solutions: • maintaining the customer-centric approach in everything it does, with the ambition of offering the best service and the best experience and insisting on promoting more sustainable behaviour when choosing products and services; • continuing its strategic bet on and investment in its resources to maintain and strengthen its distinctive character, committing to the cohesion and development of its team to ensure it remains capable of bringing the communications of the future to the present and evolves in its experience in the organisation, so that, as an organisation, NOS becomes the first choice for talented young people and all those entering the job market; • remaining committed to its sustainability mission, with 2024 representing two particularly important milestones: the first year in which the specific ESG supplier evaluation model will produce results, following the first evaluation campaign launched at the end of 2023, and also being the year in which the entire adaptation process to the new sustainability reporting model advocated by the European Corporate Sustainability Reporting Directive (CSRD, EU Directive 2022/2464 of 14 December 2022) will be developed and which will impact the next annual report to be released in 2025. NOS wants to continue doing better and going further. Through long-term value sharing, aligned with the SDGs and based on connectivity and the transformative drive of new technologies, it wants to continue expanding strong connections inspired by the future, aspiring to an inclusive and sustainable tomorrow, full of possibilities for everyone. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 153 2.5 Annexes Taxonomy To achieve the European Union's sustainability goals, over the next decade it will be necessary to mobilise public and private resources to finance the transition to a carbon-neutral, green, competitive, and inclusive economy. Through Regulation (EU) 2020/852, the European Commission created the EU Taxonomy of environmentally sustainable activities, a system for classifying economic activities which aims to identify those that contribute to European environmental objectives, thus creating a framework to facilitate sustainable investment. The aim is for the taxonomy to eventually evolve to explicitly include social aspects as well. In 2021, Commission Delegated Regulation (EU) 2021/2139 was published, establishing the first list of activities eligible for inclusion in the EU Taxonomy, as well as the criteria for assessing their contribution to two of the environmental objectives: i) mitigation and ii) adaptation to climate change. This contribution can result either from the climate performance of the activity itself or from its potential to improve the performance of other sectors - the so-called enabling activities - as is the case with various activities in the Telecommunications sector. Simultaneously, new disclosure obligations were also introduced for companies, including NOS, which are now required to report on how and to what extent their business activities fit into the EU Taxonomy, namely regarding turnover, capital expenditure (CapEx) and operating expenditure (OpEx), including whether they meet the respective technical assessment criteria (aligned activities). In 2023, the list of remaining activities eligible for inclusion in the EU Taxonomy was published, as well as the criteria for assessing their contribution to the remaining four environmental objectives: i) sustainable use and protection of water and marine resources; ii) transition to a circular economy; iii) pollution prevention and control; and iv) protection and restoration of biodiversity and ecosystems. In addition, certain activities have been added to those previously published for the two climate objectives. However, considering that the delegated acts establishing these activities were only adopted in November 2023, companies are only required to disclose the eligible activities and their indicators, with the assessment of the technical criteria being voluntary. NOS has therefore opted to provide only the mandatory disclosures for 2023. Eligible activities Alongside investment in measures to improve the energy efficiency of NOS operations, the company has been strengthening its portfolio of innovative products & services which reduce customer emissions, particularly in the business segment. Some of these activities are listed in the Delegated Regulations: • Activity 8.1. Data processing, hosting, and related activities (NACE code: J.63.1.1) • Activity 8.2. Data-based solutions for reducing GHG emissions (NACE codes: J.61, J.62 and J.63.11) • Activity 8.3. Computer programming and broadcasting activities (NACE code: J.60) • Activity 13.3 Film, video and television show, sound recording and music production activities (NACE code: J.59) • Activity 4.1. Provision of information technology solutions/data-based operating technologies (NACE codes: C.26, C.27, J.58.29, J.61, J.62, J.63.1) • Activity 5.1. Repair, refurbishment and remanufacturing (NACE codes: C.26, C.27, C.28.23, among others, associated with other industries) • Activity 5.4. Sale of second-hand goods (NACE codes: C.26, C.27, C.28.23, among others, associated with other industries) • Activity 5.5 Product as a service and other service models focused on results and circular utilisation (NACE codes: C.26, C.27, C.28.23, among others, associated with other industries) The NOS Group's activities eligible for the EU Taxonomy items correspond to: • Activities 8.1 and 8.2 essentially correspond to revenues from the Corporate segment related to cloud and data centre services, analytics (mobility, smart cities, energy efficiency) and IoT (smart cities, mobility and fleet and asset management and optimisation); • Activities 8.3 and 13.3 are essentially related to the production and distribution of television and cinema content; • Activity 4.1 corresponds essentially to data processing and automation projects related to the lifecycle of products inherent to the business; • Activities 5.1 and 5.4 are related to the process of repairing and preparing end-of-life equipment used in the provision of services, along with the sale of second- hand products; • Activity 5.5 is associated with equipment leased to customers. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 154 Proportion of eligible activities In line with the disclosure guidelines defined by the EU Taxonomy, the figures reported have been calculated according to the Group's consolidated accounts. Regarding the figures presented in the first line: Turnover (€1,597.5m): corresponds to the consolidated sum of services provided, sales and other operating income, determined on the basis of the consolidated financial statements as of 31 December 2023. Opex (151.5 M€): corresponds to: • Non-capitalised research and development expenditure; • Expenditure on renovation/maintenance of buildings and other facilities; • Maintenance and repair costs; • Expenditure on short-term leases; and • Other costs directly related to the maintenance of tangible fixed assets and recognised in the consolidated financial statements under Direct costs - Telecommunications costs - capacity (58.3 M€), Direct costs - Costs related to large corporate customer services (20.6 M€), Support services - Information systems (17.4 M€) and External supply and services - Maintenance and repair (55.2 M€). Capex (€387.6m): corresponds to the sum of the acquisitions of tangible fixed assets, intangible assets, customer contract charges and use rights made in 2023, disclosed in notes 8, 9, 10 and 11 to the consolidated financial statements, totalling €474.8m, excluding leases (€82.7m) and other contractual rights (€4.5m). The Turnover figures classified as eligible correspond to revenues from the Corporate segment related to cloud and data centre services, analytics and IoT services, as well as revenues from the distribution of cinema rights, TVCine channels, sales of television rights and video-on-demand. The Capex figures classified as eligible essentially correspond to the procurement of telecommunications devices, such as set-top-boxes, routers, extenders, among others, and alarm devices, such as control panels, video cameras, motion sensors, among others, as well as investments associated with increasing datacentre capacity, developments to transform the 5G network and content rights operated in various display formats (cinemas, premium channels, others). The Opex figures classified as eligible essentially correspond to expenditure on cloud data centres and asset centralisation, fleet and asset management and optimisation, IoT expenditure and the purchase of products & services to improve the operation's energy performance. These also include licences for the use of certain equipment, such as UMA's and Plume, as well as resources used for data centre maintenance and expenditure on content operated in various display formats (cinemas, premium channels, others). Turnover OpEx CapEx Figures (M€) % Figures (M€) % Figures (M€) % 1,597.5 100.0% 151.5 100.0% 387.6 100.0% Eligible activities 8.1.Data processing, information hosting and related activities 29.8 1.9% 20.7 13.6% 11.4 2.9% 8.2 Data-based solutions for reducing GHG emissions 3.9 0.2% 1.1 0.7% 29.6 7.6% 8.2 Computer programming, computer consultancy and related activities 35.4 2.2% 11.3 7.5% 21.2 5.5% 8.3 Programming and broadcasting activities 4.5 0.3% 1.5 1.0% 1.5 0.4% 13.3 Film, video and television show production, sound recording and music production activities. 0.0 0.0% 1.5 1.0% 1.8 0.5% 4.1 Provision of information technology solutions/data-based operating technologies 0.0 0.0% 1.3 0.9% 0.1 0.0% 5.1 Repair, refurbishment, and remanufacturing 0.2 0.0% 0.2 0.2% 0.0 0.0% 5.5 Product as a Service and other service models focused on results and circular utilisation 21.3 1.3% 2.5 1.6% 45.0 11.6% Total eligible activities - 2023 95.0 5.9% 40.0 26.4% 110.6 28.5% Non-eligible activities - 2023 1,502.5 94.1% 111.4 73.6% 277.0 71.5% Total eligible activities - 2022 30.0 2.0% 12.2 8.9% 2.9 0.6% 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 155 The necessary precautions have been taken to avoid double counting throughout the process, particularly through (i) obtaining data from accounting sources, ensuring adequate consideration of eliminations and adjustments in consolidation; (ii) using consistent sources of information, preventing the same item from being counted under two different indicators or twice within the same indicator; and (iii) verifying the integrity and accuracy of the data. Proportion of aligned activities In 2023, NOS set up a working group to assess compliance with the taxonomy alignment criteria, namely the significant contribution to climate change mitigation and adaptation criteria and the "do no significant harm" criteria. Compliance with the minimum safeguards was assessed at Group level. Activity 8.1. Data processing, information hosting and related activities Regarding the climate change mitigation objective, although NOS has adopted energy management practices in its data centres in line with the practices established in the European code of conduct on energy efficiency in data centres and with the recommended practices for data centre energy management published in the document "CLC TR50600-99- 1 of CEN-CENELEC - Data centre facilities and infrastructures", the adoption of these practices has not been verified/audited by an independent third party in the last three years, thus NOS does not meet one of the criteria of significant contribution to climate change mitigation, which is why this activity was reported in 2022 and 2023 as non-aligned. In terms of assessing the "do no significant harm" criteria, no situations of non-compliance with the assessment criteria were identified, namely: • Climate change adaptation: NOS has assessed the physical risks relevant to the activity, based on the National Platform for Disaster Risk Reduction; • Sustainable use and protection of water and marine resources: No risks of environmental degradation were identified regarding the preservation of water quality and the preservation of water stress related to this activity; • Transition to a circular economy: NOS presents a waste management strategy which guarantees, in the first instance, the use of brokers who can find potential interested parties for the technologies on the secondary market and who can reuse the equipment. If there are no interested parties in reusing the equipment, the Group moves towards a solution of disposal of the equipment via recycling chains and operators licensed for this purpose. As for the objective of climate change adaptation, NOS assessed the physical risks relevant to the activity, based on the National Platform for Disaster Risk Reduction, thus meeting the criteria for a significant contribution to climate change adaptation. Activity 8.1. Data processing, information hosting and related activities was considered non-aligned for both objectives. Activity 8.2. Data-based solutions for reducing GHG emissions Regarding the objective of climate change mitigation, the ICT solutions involved in this activity are predominantly used to provide data and analyses which contribute to the reduction of GHG emissions and, depending on the assessment implied in the customers' choice, are innovative solutions which are different from others on the market. In terms of assessing the "do no significant harm" criteria, no situations of non-compliance with the assessment criteria were identified, namely: • Climate change adaptation: NOS has assessed the physical risks relevant to the activity, based on the National Platform for Disaster Risk Reduction; • Sustainable use and protection of water and marine resources: No risks of environmental degradation were identified regarding the preservation of water quality and the preservation of water stress related to this activity; • Transition to a circular economy: NOS presents a waste management strategy which guarantees, in the first instance, the use of brokers who can find potential interested parties for the technologies on the secondary market and who can reuse the equipment. If there are no interested parties in reusing the equipment, the Group moves towards a solution of disposal of the equipment via recycling chains and operators licensed for this purpose. As for the objective of climate change adaptation, NOS assessed the physical risks relevant to the activity, based on the National Platform for Disaster Risk Reduction, thus meeting the criteria for a significant contribution to climate change adaptation. In terms of assessing the "do no significant harm" criteria, as already mentioned for the climate change mitigation objective, no situations of non-compliance with alignment criteria were identified. Activity 8.2. Data-based solutions for reducing GHG emissions was considered aligned for both objectives. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 156 8.3. Programming and broadcasting activities and 13.3 Film, video and television show production, sound recording and music production activities As a result of the assessment of the eligibility of its activities, the NOS Group identified, during 2023, these activities as eligible with regard to the climate change adaptation objective. Regarding the technical criteria, it was concluded that these have been met, insofar as adaptation solutions have been adopted to substantially reduce the most important physical risks associated with climate which are relevant to the activities. According to the technical criteria, these activities do not exhibit any "do no significant harm" criteria, so the tables were considered to be aligned with the climate change adaptation objective. As mentioned above, the remaining eligible activities were not assessed for alignment in 2023, as this assessment is voluntary this year. Minimum social safeguards The taxonomy stipulates that, in addition to the significant contribution criteria and the do no significant harm criteria, an activity is only considered aligned if it is conducted in compliance with minimum social safeguards. The minimum social safeguards prevent activities from being considered aligned, and therefore perceived as sustainable, if they have been conducted at the expense of violating human rights and labour rights, through corruption or non- competitive practices, and if they do not comply with tax legislation. Compliance can be seen from two perspectives, according to the guidance published by the Platform on Sustainable Finance: • There are adequate processes and controls in place in the human rights, corruption, taxation, and fair competition areas; and • There have been no violations or non-compliance with these principles. The Group has assessed compliance with the minimum social safeguards, namely by assessing the policies and processes implemented and investigating possible cases of violation by Group companies. The Group concluded the processes, policies and controls implemented are robust and no cases of violation or proceedings related to the principles of minimum social safeguards were identified. More information on practices and processes in the human rights, corruption, taxation, and competition areas can be found in the respective sections of this report. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 157 Turnover Proportion regarding Aligned Activities in 2023 ! Revenue (Millions of Euros) Substancial contribution criteria Do no significant harm criteria Activities Code Turnover Turnover Proportion Climate Change Mitigation Climate Change Adaptation Water and marine resources Transition to a Circular Economy Polluition prevention and control Biodiversity and ecosystems Climate Change Mitigation Climate Change Adaptation Water and marine resources Transition to a Circular Economy Polluition prevention and control Biodiversity and ecosystems Minimum safeguards Proportion of alignment in 2023 Proportion of alignment in 2022 € % % % % % % % S/N S/N S/N S/N S/N S/N A. Elegible activities 8.2. 3.9 0.2% 100% N/A S N/A S N/A N/A S 100% 100% A.1. Aligned activities 8.3. 35.4 2.2% 100% N/A N/A N/A N/A N/A N/A S 100% 0% Data-based solutions for reducing GHG emissions 13.3. 4.5 0.3% 100% N/A N/A N/A N/A N/A N/A S 100% 0% Computer programming. computer consultancy and related activities 437 27% Programming and broadcasting activities, film, video and television show production, sound recording and music production activities 8.2. 3.9 0.2% 100% N/A S N/A S N/A N/A S 100% 100% Turnover from aligned activities (A.1) 8.3. 35.4 2.2% 100% N/A N/A N/A N/A N/A N/A S 100% 0% A.2. Eligible but non-aligned activities Data processing, information hosting and related activities 8.1. 29.8 1.9% Supply of information technology solutions/data-based operating technologies 4.1. 0.0 0.0% Repair, refurbishment and remanufacturing 5.1. 0.0 0.0% Sale of second-hand goods 5.4. 0.2 0.0% Product as a service and other service models focused on results and circular utilisation 5.5. 21.3 1.3% Turnover from eligible activities for which alignment was not assessed in 2023 (A.2.) 51.2 3.2% Total (A.1 + A.2) 95.0 5.9% B. Non-eligible activities Turnover from non-eligible activities 1,502.5 94.1% Total (A + B) 1,597.5 100.0% ! ! 1 The activities represented as eligible and for which alignment was not assessed in 2023 are due to the alignment reporting being voluntary for the year 2023. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 158 OPEX Proportion regarding Aligned Activities in 2023 ! OpEx (Millions of Euros) Substancial contribution criteria Do no significant harm criteria Activities Code Turnover Turnover Proportion Climate Change Mitigation Climate Change Adaptation Water and marine resources Transition to a Circular Economy Polluition prevention and control Biodiversity and ecosystems Climate Change Mitigation Climate Change Adaptation Water and marine resources Transition to a Circular Economy Polluition prevention and control Biodiversity and ecosystems Minimum safeguards Proportion of alignment in 2023 Proportion of alignment in 2022 € % % % % % % % S/N S/N S/N S/N S/N S/N Data-based solutions for reducing GHG emissions 8.2. 1.1 0.7% 100% N/A S N/A S N/A N/A S 100% 100% Computer programming, computer consultancy and related activities 8.3. 11.3 7.5% 100% N/A N/A N/A N/A N/A N/A S 100% 0% Programming and broadcasting activities, film, video and television show production, sound recording and music production activities 13.3. 1.5 1.0% 100% N/A N/A N/A N/A N/A N/A S 100% 0% OpEx from aligned activities (A.1.) 13.9 9.1% Data-based solutions for reducing GHG emissions 8.2. 1.1 0.7% 100% N/A S N/A S N/A N/A S 100% 100% Computer programming, computer consultancy and related activities 8.3. 11.3 7.5% 100% N/A N/A N/A N/A N/A N/A S 100% 0% A.2. Eligible but non-aligned activities Data processing, information hosting and related activities 8.1. 20.7 13.6% Supply of information technology solutions/data-based operating technologies 4.1. 1.5 1.0% Repair, refurbishment and remanufacturing 5.1. 1.3 0.9% Sale of second-hand goods 5.4. 0.2 0.2% Product as a service and other service models focused on results and circular utilisation 5.5. 2.5 1.6% OpEx from eligible activities for which alignement was not assessed in 2023 (A.2.) 26.2 17.3% Total (A.1 + A.2) 40.0 26.4% B. Non-eligible activities OpEx from non-eligible activities 111.4 73.6% Total (A + B) 151.5 100.0% ! 1 The activities represented as eligible and for which alignment was not assessed in 2023 are due to the alignment reporting being voluntary for the year 2023. ! ! ! 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 159 CAPEX Proportion regarding Aligned Activities in 2023 ! CapEx (Millions of Euros) Substancial contribution criteria Do no significant harm criteria Activities Code Turnover Turnover Proportion Climate Change Mitigation Climate Change Adaptation Water and marine resources Transition to a Circular Economy Polluition prevention and control Biodiversity and ecosystems Climate Change Mitigation Climate Change Adaptation Water and marine resources Transition to a Circular Economy Polluition prevention and control Biodiversity and ecosystems Minimum safeguards Proportion of alignment in 2023 Proportion of alignment in 2022 € % % % % % % % S/N S/N S/N S/N S/N S/N A. Elegible activities A.1. Aligned activities Data-based solutions for reducing GHG emissions 8.2. 29.6 7.6% 100% N/A S N/A S N/A N/A S 100% 100% Computer programming, computer consultancy and related activities 8.3. 21.2 5.5% 100% N/A N/A N/A N/A N/A N/A S 100% 0% Programming and broadcasting activities, film, video and television show production, sound recording and music production activities 13.3. 1.5 0.4% 100% N/A N/A N/A N/A N/A N/A S 100% 0% CapEx from aligned activities (A.1.) 52.3 13.5% A.2. Eligible but non-aligned activities Data processing, information hosting and related activities 8.1. 11.4 2.9% Supply of information technology solutions/data-based operating technologies 4.1. 1.8 0.5% Repair, refurbishment and remanufacturing 5.1. 0.1 0.0% Sale of second-hand goods 5.4. 0.0 0.0% Product as a service and other service models focused on results and circular utilisation 5.5. 45.0 11.6% CapEx from eligible activities for which alignement was not assessed in 2023 (A.2.) 58.4 15.1% Total (A.1 + A.2) 110.6 28.5% B. Non-eligible activities CapEx from non-eligible activities 277.0 71.5% Total (A + B) 387.6 100.0% 1 The activities represented as eligible and for which alignment was not assessed in 2023 are due to the alignment reporting being voluntary for the year 2023. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Integrated Annual Report 01 02 03 04 160 GRI Content Table Statement of use NOS, SGPS, S.A. reported in accordance with the GRI Standards for the period from January 1st to December 31st 2023 Version used GRI1: Foundation 2021 GRI Applicable Sectoral Standards N.A. at the date of publication of this Report GRI2: 2021 General Disclosures Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) Organisation and Reporting Practices 2-1 Organisational details RIG: 1.2 About this Report; 1.6 Activity and portfolio; 1.8. Governance model - Shareholder structure; DFC: note 50 Maps Annexed ü • CSC | Article 508-G, Number 2, Subparagraph a) 2-2 Entities included in the organisation's sustainability reporting The scope of non-financial/sustainability information covers the companies included in the Consolidated Financial Statements (CFS) in which the NOS Group holds a stake of more than 50% and has management control, i.e. those consolidated using the full consolidation method (Companies listed in Block "A)" of note 50 to the Consolidated Financial Statements, excluding Lusomundo Moçambique. In this context, the information on employees includes all direct employees with the exception of cinema employees, internship contracts and governing bodies. Regarding environmental information, the companies included in the above-mentioned scope whose context, activity and size mean that they are not material in this performance dimension are not included in the information gathering process (this is the case of: NOS Sistemas España; Per-Mar; Sontária; NOS Mediação de Seguros; Teliz Holding; Lusomundo - Sociedade de investimentos imobiliários SGPS, SA and NOS 5G Fund). Non-financial information is consolidated using the full consolidation method, unless otherwise specified. Any scope specification regarding the general scope of the aforementioned non-financial/sustainability information, as well as any other relevant data for its correct understanding, can be found next to the information to which it refers, throughout the report, in the methodological notes, or in this GRI content index. DFC: note 50 Maps Annexed ü 2-3 Reporting period, frequency and contact point Report published at the end of March 2024. RIG: 1.2 About this Report ü 2-4 Reformulated information In the reporting period, the following figures reported in last year's Annual Report were reformulated: • 305 - 2 Indirect GHG emissions (Scope 2): Emissions from purchased electricity (location-based method) recalculated using the emission factor published by the same source for all years reported (European Environment Agency). Emissions reported using the market-based method have not changed; • 305 -3 Other indirect GHG emissions (Scope 3): Emissions recalculated according to the new methodology applied from 2023. Changes: new source for EEIO tables used to calculate some categories of goods and services reported in C1 and C2; change in the methodology for calculating emissions from services of other operators and programming; application of a location-based emission factor published by the same source for all years reported, in line with the option for Scope 2 (European Environment Agency). The new methodology is presented in detail in the methodological notes; • "404-1 Average annual hours of training per employee"; "404-3 Percentage of employees receiving performance and career development assessments"; and "405-1 Diversity in governance bodies and employees": The data for these indicators is presented differently in terms of the breakdown by professional category: - ü 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Integrated Annual Report 01 02 03 04 161 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) specialist+professional+analist=technician (category previously presented), but the base figures have not changed. • 403-9 Occupational accidents > figure for "Frequency rate (or accident rate)"; Rate of days lost due to accidents or occupational illnesses (specific NOS indicator) > figure for " Occupational accident rate": figures for 2022 revised due to adjustment of the number of hours worked. 2-5 External Verification/Assurance RIG: 1.2 About this Report; Annexes > External Verification Statement; RGS: II. Board and Supervision > point 29 (part on the Audit and Finance Committee); III. Supervision > point 37; V. External Auditor > point 46 ü Activities and Employees 2-6 Activities, value chain and other business relationships A new cloud services company, Ten Twenty One, has been created. This company represents the autonomisation of technology consultancy services for the business segment, allowing for greater specialisation. The aim of this development is to reinforce the existing range of services in this area, strengthening the company's ability to penetrate the market. See also response to 204-1 RIG: 1.4 Our Value Creation Model; 1.6 Activity and portfolio; 2.2.4 We support partners and boost the local economy; ü • CSC | Article 508-G, Number 2, Subparagraph a) 2-7 Employees Total number of employees by type of contract and by gender: 2021 2022 2023 Permanent employees Men 1,078 1,061 1,075 Women 734 727 751 Subtotal 1,812 1,788 1,826 Temporary employees Men 3 5 0 Women 14 10 9 Subtotal 17 15 9 Total Employees 1,829 1,803 1,835 Total number of employees by employment type and gender: 2021 2022 2023 Full-time Men 1,081 1,065 1,075 Women 748 737 760 Subtotal 1,829 1,802 1,835 Part-time Men 0 1 0 Women 0 0 0 Subtotal 0 1 0 Total Employees 1,829 1,803 1,835 • Scope: All employees except cinema employees, internship contracts and governing bodies RIG: 1.3 NOS in Numbers; 2.1.1 Our People ü • CSC | Article 508-G, Number 2, Subparagraph a) 2-8 Employees with no employment relationship with the organisation To run the operation, NOS hires services from external entities and service providers (in activities ranging from cleaning and security services to call- centre services), and these partners are solely responsible for managing their employees. Therefore, it does not have a parameterised accounting system or routine to report the number of workers involved. - ü • CSC | Article 508-G, Number 2, Subparagraph a) Governance 2-9 Governance structure and composition RIG: 1.8 Governance model; 2.3.2 Sustainability Management and Strategy RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance> B. Governing bodies and committees; Part 3 Annex ü • CVM | Article 29-H, Number 1, Subparagraph q) 2-10 Appointment and selection of the highest governing body RIG: 1.8 Governance model RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance> B. Governing bodies and committees > Points 19 and 29 ü • CVM | Article 29-H, Number 1, Subparagraph q) 2-11 Chairman of the highest governing body RIG: 1.8 Governance model ü • CVM | Article 29-H, Number 1, Subparagraph q) 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Integrated Annual Report 01 02 03 04 162 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) 2-12 Role of the main governing body in supervising the impact management RIG: 2.3.2 Sustainability Management and Strategy RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance> B. Governing bodies and committees > Points 21, 27-34, 38-40, 42- 45; C. Internal Organisation > Points 50-51 ü • DL89 | Introduction, 5th Paragraph 2-13 Delegation responsible for impact management RIG: 2.3.2 Sustainability Management and Strategy RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance> B. Governing bodies and committees > Points 27-30 ü 2-14 Role of the main governing body in the sustainability report RIG: 2.3.2 Sustainability Management and Strategy ü 2-15 Conflicts of interests RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance> B. Governing Bodies and Committees > Points 26 and 29 (regarding the Corporate Governance and Sustainability Committee); C. Internal Organisation > Points 49 and 51; E. Related Party Transactions > Points 89-92 ü Governance 2-16 Communication of critical concerns 2023 Number of clarification requests received (no.) 16 Number of clarification requests received regarding the topic conflicts of interest (no.) 8 Number of clarification requests received regarding the topic receiving or offering benefits (no.) 7 Number of clarification requests received regarding the topic responsibilities (no.) 1 Number of requests for clarification received which resulted in an investigation (no.) 0 Number of alleged irregularities reported (no.) 18 Number of alleged irregularities reported - supplier or partner (no.) 6 Number of alleged irregularities reported - customer (no.) 3 Number of alleged irregularities reported - employee (no.) 4 Number of alleged irregularities reported - unidentified (no.) 5 Number of alleged irregularities investigated (no.) 14 Number of alleged irregularities investigated regarding improper behaviour (no.) 6 Number of alleged irregularities investigated, regarding responsibilities (no.) 8 Number of alleged irregularities investigated and resulting in consequences (no.) 3 RIG: 2.3.3 Ethics and Conduct RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance> B. Governing bodies and committees > Points 29, 38; C. Internal Organisation > Point 49 ü 2-17 Collective awareness of the main governing body RIG: 1.8 Governance model 2.3.2 Sustainability Management and Strategy ü 2-18 Evaluation of the performance of the main governing body The evaluation • Note: the evaluations are not independent RIG: 1.8 Governance model RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance> B. Governing bodies and committees > Points 18, 19, 24, 25 e 29 ü 2-19 Remuneration policies RIG: 1.8 Governance model RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance > D. Remuneration > Points 69-88 ü 2-20 Process for determining remuneration RIG: 1.8 Governance model RGS: Part 1 Mandatory information on shareholder structure, organisation, and corporate governance > D. Remuneration > Points 69-88 ü 2-21 Total annual compensation ratio Annual compensation ratio: 20.6% Annual compensation percentage increase ratio: 0.0% ü 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Integrated Annual Report 01 02 03 04 163 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) Ratios calculated considering the yearly basic salary of the highest paid person in the organisation and the yearly basic salary of the other employees Strategy, Policies and Practice 2-22 Statement on sustainable development strategy RGI: 1.1 Message from the CEO ü • CSC | Article 508-G, Number 2, Subparagraph a) 2-23 Political commitments RIG: 1.5 Our Essence; 2.3.1 Stakeholder Engagement and Creating Shared Value; 2.3.2 Sustainability Management and Strategy; 2.3.3 Ethics and Conduct; 2.3.4 Ethical supply chain management; 2.3.5 Risk Management ü • CSC | Article 508-G, Number 2, Subparagraph a) 2-24 Incorporating political commitments RIG: 2.3.2 Sustainability Management and Strategy; 2.3.3 Ethics and Conduct; 2.3.4 Ethical supply chain management ü • CSC | Article 508-G, Number 2, Subparagraph a) 2-25 Processes to remedy negative impacts RIG: 2.3.2 Sustainability Management and Strategy; 2.3.3 Ethics and Conduct; 2.3.4 Ethical supply chain management ü • CSC | Article 508-G, Number 2, Subparagraph c) 2-26 Mechanisms for requesting clarification or advice and for reporting concerns or alleged irregularities (whistleblowing) RIG: 2.3.3 Ethics and Conduct RGS: Part 1 Mandatory information on shareholder structure, organisation and corporate governance> B. Governing bodies and committees > Point 38; C. Internal Organisation > Point 49 ü 2-27 Compliance with laws and regulations During 2023, NOS was convicted in 4 administrative offence proceedings, totalling €1.365 million, concerning situations of non-compliance with the regime applicable to contract termination procedures, service contracting, the Complaints Book and signage associated with a fixed electronic communications station. - ü • CSC | Article 508-G, Number 2, Subparagraph e) 2-28 Associations of which the organisation is a member RIG: 2.3.1 Stakeholder Engagement and Creating Shared Value ü Stakeholder Engagement 2-29 Approach to stakeholder engagement RIG: 2.3.1 Stakeholder Engagement and Creating Shared Value ü • DL89 | Introduction, 5th Paragraph 2-30 Collective bargaining agreements 100% of the employees of NOS Cinemas and NOS Audiovisuais (101 employees as of 31.12.2023) are covered by a collective bargaining agreement, representing 5.5% of total employees at the same date. NOS considers best practices, conducting external competitiveness and benchmark reviews to design its policies and working conditions. - ü • UNGC: 3 • SDG: 8 GRI3: 2021 Material Topics Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) 3-1 Process for determining material topics RIG: 2.3.2 Sustainability Management and Strategy ü 3-2 Material Topic List RIG: 2.3.2 Sustainability Management and Strategy ü 3-3 Material topics management See response in each specific disclosure associated with material topics - ü 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Integrated Annual Report 01 02 03 04 164 Specific Disclosures Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) GRI 200 Standards: Economic Performance GRI 201: 2016 Economic Performance 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Operating and financial results; 1.10 We do what nobody else has done > Recognitions; 2.2.1 Products & Services with Sustainable Innovation ü 201-1 Direct economic value generated and distributed Millions € 2021 2022 2023 Economic Value Generated (revenues) 1,434 1,627 1,603 Distributed Economic Value 1,435 1,575 1,641 Suppliers 1,120 1,226 1,244 Shareholders 142 142 220 Employees 90 90 94 Government 42 76 11 Debt financiers 40 41 73 Community (donations) 0.2 0.5 0.6 Retained Value -0.9 52 -38 In the year ended on the 31st of December 2023, an income of 38.5 million euros was recognised as a consequence of favourable decisions in the Constitutional Court in legal proceedings filed by the company regarding the settlement of the Activity Tax. For further information on this aspect, see note 40 in the notes to the Consolidated Financial Statements. • Scope: Companies in which the Group has more than 50% stake and holds management control (in accordance with consolidated financial statements). • See Methodological Notes - ü • SDG: 8 201-2 Financial implications and other risks and opportunities arising from climate change RIG: 2.2.2 On behalf of the Planet ü 201-4 Financial benefits received from the State Millions € 2021 2022 2023 Amount 18 17 14 The support received from the state through tax credits and incentives totalled around 14 million euros, largely as a result of the award of Tax Incentives for Business R&D. The largest proportion is related to the approval of the application in 2021 to the Corporate R&D Tax Incentive System (SIFIDE), representing almost 70 %. Innovation projects co-funded by Portugal 2020 (Link4S, City Analyser, among others) and advances on projects co-funded by the Recovery and Resilience Plan, namely Mobilising Agendas for Business Innovation and Test Beds, account for the remaining amount. - ü GRI 200 Standards: Economic Performance GRI 204: 2016 Procurement Practices 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.2.4 We support partners and boost the local economy ü 204-1 Proportion of expenses with local suppliers National International 2021 87.6% 12.4% 2022 86.0% 14.0% 2023 86.1% 13.9% • Local = national • See Methodological Notes RGI: 2.2.4 We support partners and boost the local economy ü • SDG: 8, 12, 16, 17 • • 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 165 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) GRI 205: 2016 Anti-Corruption 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.1.3 We invest in Our People > Continuous employee training; 2.3.3 Ethics and Conduct; 2.3.4 Ethical supply chain management; 2.3.5 Risk Management ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) • 205-2 Communication and training on anti-corruption policies and procedures. RGI: 2.1.3 We invest in our people > Continuous employee training; 2.3.3 Ethics and Conduct ü • UNGC: 10 • SDG: 16 • CSC | Article 508-G, Number 2, Subparagraph e) • 205-3 Confirmed cases of corruption and measures taken No confirmed cases of corruption were identified in the reporting period. - ü • UNGC: 10 • SDG: 16 • GRI 206: 2016 Unfair Competition 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.3 Ethics and Conduct ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) • 206-1 Legal proceedings for unfair competition, antitrust and monopoly practices In the 2023 period, there is no record of any occurrences of this nature. The two proceedings filed by the Competition Authority (ADC) in previous years, one in 2021 and the other in 2020, for which NOS presented a defence, are still pending a final decision by the ADC. RGI: 2.1.3 We invest in our people > Continuous employee training; 2.3.3 Ethics and Conduct ü • SDG: 16 • GRI 300 Standards: Environmental Performance GRI 302: 2016 Energy 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.2.2 On behalf of the Planet > Energy and Climate ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) • 302-1 Energy consumption within the organization • See Methodological Notes RGI: 2.2.2 On behalf of the Planet > Energy and Climate > Ensuring an energy-efficient operation ü • UNGC: 7, 8 • SDG: 7, 9, 12, 13 • 302-3 Energy intensity • See Methodological Notes RGI: 1.3 NOS in Numbers; 2.2.2 On behalf of the Planet > Energy and Climate > Ensuring an energy-efficient operation ü • UNGC: 8 • SDG: 7, 9, 12, 13 • 302-4 Energy consumption reduction RGI: 2.2.2 On behalf of the Planet > Energy and Climate > Ensuring an energy-efficient operation ü • UNGC: 8, 9 • SDG: 7, 12, 13 302-5 Reduction of product & service energy requirements RGI: 2.2.2 On behalf of the Planet > Energy and Climate > Mobilising the value chain ü GRI 303: 2018 Water and Wastewater 3-3 Material topics management • The topic is non-material for NOS. Our response allows for greater alignment with the DL 89/2017. ü 303-5 Water consumption RGI: 2.2.2 On behalf of the Planet > Other Environmental Impacts ü • CSC | Article 508-G, Number 2 - Recycled and reused water (NOS specific indicator) RGI: 2.2.2 On behalf of the Planet > Other Environmental Impacts ü GRI 300 Standards: Environmental Performance GRI 304: 2016 Biodiversity 3-3 Material topics management • The topic is non-material for NOS. Our response allows for greater alignment with the DL 89/2017. ü 304-2 Significant impacts of activities, products and services on biodiversity RGI: 2.2.2 On behalf of the Planet > Other Environmental Impacts ü • CSC | Article 508-G, Number 2 GRI 305: 2016 Emissions 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.2.2 On behalf of the Planet > Energy and Climate ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 305-1 Direct Greenhouse Gas Emissions-GHG (Scope 1) • See Methodological Notes RGI: 2.2.2 On behalf of the Planet > Energy and Climate > > Monitoring the carbon footprint ü • UNGC: 7, 8 • SDG: 12, 13 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 166 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) • CSC | Article 508-G, Number 2, Subparagraph e) 305-2 Indirect GHG emissions (Scope 2) • See Methodological Notes RGI: 2.2.2 On behalf of the Planet > Energy and Climate > Monitoring the carbon footprint ü • UNGC: 7, 8 • SDG: 7, 12, 13 • CSC | Article 508-G, Number 2, Subparagraph e) 305-3 Other indirect GHG emissions (Scope 3) • See Methodological Notes RGI: 2.2.2 On behalf of the Planet > Energy and Climate > Monitoring the carbon footprint ü • UNGC: 7, 8 • SDG: 12, 13 • CSC | Article 508-G, Number 2, Subparagraph e) 305-5 Reduction of GHG emissions RGI: 2.2.2 On behalf of the Planet > Energy and Climate > Monitoring the carbon footprint ü GRI 306: 2020 Waste 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.2.2 On behalf of the Planet > Circularity ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 306-1 Significant impacts related to the generated waste RGI: 2.2.2 On behalf of the Planet > Circularity ü 306-2 Management of significant impacts related to the generated waste NOS' Sustainability Policy is orientated in accordance with the principles of the ISO 14001 standard, ensuring a waste management process which complies with all the legal precepts applicable to waste management, safeguarding the prevention of pollution (impacts) and encouraging continuous improvement. RGI: 2.2.2 On behalf of the Planet > Circularity ü 306-3 306-4 306-5 Generated waste Waste diverted from final disposal Waste sent for final disposal 2021 2022 2023 Non-hazardous waste (ton) Recovery Multi-material recycling 666.6 789.4 750.9 Disposal Landfill 22.6 15.4 0.0 Energy recovery 0.0 0.3 0.0 Hazardous waste (ton) Recovery Multi-material recycling 48.3 38.0 12.5 Disposal Landfill 0.3 0.0 0 Energy recovery 0.0 0.0 3.4 Total recovery 714.9 827.3 763.4 Total disposal 22.9 15.7 3.4 Total non-hazardous waste 689.1 805 750.9 Total hazardous waste 48.6 38.0 15.9 TOTAL 737.8 843.0 766.9 RGI: 2.2.2 On behalf of the Planet > Circularity ü • UNGC: 7, 8 • SDG: 12 • CSC | Article 508-G, Number 2, Subparagraph e) GRI 308: 2016 Suppliers Environmental Evaluation 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.4 Ethical supply chain management; 2.2.4 We support partners and boost the local economy ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) GRI 300 Standards: Environmental Performance GRI 308: 2016 Suppliers Environmental Evaluation 308-1 Percentage of new suppliers that were screened using environmental criteria. The supplier evaluation for the year 2023 will be held during the first quarter of 2024. For the sixth consecutive year, it will include Ethics, Environment and Occupational Health & Safety criteria. At the same time, 2023 saw the launch of the first evaluation campaign of critical suppliers for NOS specifically focussed on ESG and Security & Privacy criteria, in accordance with a supplier evaluation and engagement model which has been developed by NOS based on best practices in this area. The RGI: 2.3.4 Ethical supply chain management ü • CSC | Article 508-G, Number 2 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 167 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) results of this campaign will be released in 2024. This first campaign covered current suppliers, and the process is expected to be extended to the selection of new suppliers in the future. GRI 400 Standard: Social Performance GRI 401: 2016 Employment 3-3 Material topics management In addition to the information contained throughout the report, mentioned in the "Location" column, we highlight the following aspects: (i): Compensation structure: The compensation structure is comprised of fixed salary and bonus elements, with different proportions in each organisational group. Each group has a reference salary range, aimed at guaranteeing a competitive position in the telecommunications and information technology market. (ii): Reorganisations: Our approach aims not only to maximise our ability to respond to challenges collectively, but also to meet individual needs and interests, providing a positive environment for change and personal and professional growth for our employees. This attitude leads us to promote our people’s performance and development processes consistently and responsibly, allowing for mobility and internal recruitment opportunities (with appropriate follow-up), reskilling and upskilling initiatives, as well as attractive exit conditions, to reduce the impact of organisational restructuring. In 2023, the company did not resort to measures such as collective redundancies and lay-offs. RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.1.1 Our People; 2.1.2 We take care of our people ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 401-1 Hiring new employees and employee turnover Evolution of the number of new employees hired: Year 2021 2022 2023 <30 years old 114 118 122 30-50 years old 67 116 80 >50 years old 1 0 1 Female 77 105 105 Male 105 129 98 Total 182 234 203 Overall hiring rate 10% 13% 11% Evolution of employee turnover and net replacement rates: Year 2021 2022 2023 <30 years old 67 93 58 30-50 years old 180 143 98 >50 years old 36 22 13 Female 114 115 81 Male 169 143 88 Total 283 258 169 Overall exit rate 15% 14% 9% Net replacement rate -5.5% -1.3% 1.9% • Scope: All employees except cinema employees, internship contracts and governing bodies. • See Methodological Notes - ü • UNGC: 6 • SDG: 5, 8 • CSC | Article 508-G, Number 2, Subparagraph e) 401-2 Benefits for full-time employees which are not granted to temporary or part-time employees NOS does not distinguish the benefits granted between full-time employees and part-time employees. • Scope: All employees except cinema employees, internship contracts and governing bodies. 2.1.2 We take care of our people > Remuneration & benefits ü • SDG: 8 401-3 Parental leave - ü • UNGC: 3, 6 • SDG: 5, 8 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 168 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) Women Men Total Total number of employees entitled to take maternity/paternity leave 760 1,075 1,835 Total number of employees who took maternity/paternity leave 29 32 61 Total number of employees who returned to work after maternity/paternity leave ended 23 33 56 Total number of employees who returned to work after maternity/paternity leave ended, and remained employed 12 months after their return 24 38 62 Return Rate 92.9% 97.6% 95.7% Retention rate 92.3% 95.0% 93.9% NOS respects the period of parental leave stipulated by law, which can last 120 or 150 consecutive days, optionally, and can be shared after childbirth. Leave between 120 and 150 days can also be enjoyed simultaneously by both parents. In addition to this number of days, an extra 30 days can be added in the following cases: (i) leave shared between the parents, when the mother and father choose to exclusively share the initial leave, but not at the same time; (ii) if it is twins, an extra 30 days is added for each twin in addition to the first. • Scope: All employees except cinema employees, internship contracts and governing bodies. • See Methodological Notes GRI 403: 2018 Occupational Health & and Safety 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.1.2 We take care of our people > Safety, Health and Well-being; 2.1.3 We invest in our people > Continuous employee training; 2.3.4 Ethical supply chain management > Alignment and prevention, monitoring, and control mechanisms ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) GRI 400 Standard: Social Performance GRI 403: 2018 Occupational Health & and Safety 403-1 403-2 403-3 403-4 403-5 403-6 403-7 OHS Management System Identification, assessment and investigation of hazards, risks and incidents Occupational health services Participation, consultation, and communication with employees on OSH OHS training for employees Promotion of employee health Prevention and mitigation of OHS impacts related to business relationships In addition to the information mentioned in a separate section of the report, we should also mention that the annually revised OHS action plan includes a number of monitoring and action initiatives aimed at guaranteeing and improving working conditions for employees in terms of air quality, noise, lighting and air conditioning. Quarterly food audits are also performed to ensure the quality of the food provided in the company's buildings. Regular questionnaires are held with the aim of listening to NOS employees and getting feedback on their perceptions of various OHS topics, to ensure the continuous improvement of the processes implemented. The results are monitored to support decision-making in this area. The Occupational Health services we provide are aligned with the applicable legal requirements, but also with the standards of NOS OHS certification, as is the case with occupational safety. We have two specialised OHS technicians specifically assigned to coordinating these issues, who are part of the Human Resources Department and liaise with the Sustainability Pivots and emergency management teams. RGI: 2.1.2 We take care of our people > Safety, Health and Well-being; 2.1.3 We invest in our people > Continuous employee training; 2.3.4 Ethical supply chain management > Alignment and prevention, monitoring, and control mechanisms ü • CSC | Article 508-G, Number 2 , Subparagraph b) 403-9 Occupational accidents   2021 2022 2023 No. of Occupational accidents 2 6 12 - ü • SDG: 8 • CSC | Article 508-G, Number 2, Subparagraph e) 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 169 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) Frequency Rate (or accident index) 0.58 1.77 3.48 Index of accidents with serious consequences (generating leaves of absence > 6 months) 0.29 0.00 0.00 There were no work-related fatalities resulting from accidents at work in 2023 (fatality rate of 0%). Nor were there any accidents in 2023 with a recovery period of more than 6 months. There were also no reportable occupational accidents (reportable occupational accident rate = 0%). • Scope: All employees except cinema employees, internship contracts and governing bodies. • See Methodological Notes • The Frequency Rate (or accident rate) for 2022 was adjusted from 1.85 to 1.77 due to the adjustment of hours worked. 403-10 Occupational Diseases NOS does not report this information for confidentiality purposes • Scope: All employees except cinema employees, internship contracts and governing bodies. - ü • SDG: 8 • CSC | Article 508-G, Number 2, Subparagraph e) - Lost days rate due to accidents or occupational diseases (NOS specific indicator) 2021 2022 2023 Occupational accident rate 47.18 45.20 90.63 • Scope: All employees except cinema employees, internship contracts and governing bodies. • See Methodological Notes • The lost days rate due to occupational accidents for 2022 was adjusted from 45.20 to 47.22 due to the adjustment of hours worked.. - ü • SDG: 8 • CSC | Article 508-G, Number 2, Subparagraph e) GRI 400 Standard: Social Performance GRI 403: 2018 Occupational Health & and Safety - Absenteeism rate (NOS specific indicator) 2021 2022 2023 1.26% 1.55% 1.28% • Scope: All employees except cinema employees, internship contracts and governing bodies. • See Methodological Notes - ü GRI 404: 2016 Training and Education 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.1.3 We invest in our people ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 404-1 Average annual hours of training per employee 2021 2022 2023 By gender Women 9.9 20.8 27.9 Men 16.1 18 22.9 By professional category Assistant 7.6 3.2 12.4 Professional 12.5 17.0 23.5 Specialist 19.8 10.9 20.7 Managers 15.6 33.1 36.0 Directors 13.3 23.5 17.6 Total 13.6 19.2 25.0 • Scope: All employees except cinema employees, internship contracts and governing bodies. • See Methodological Notes RGI: 2.1.3 We invest in our people > Continuous employee training ü • UNGC: 6 • SDG: 4, 5, 8 • CSC | Article 508-G, Number 2, Subparagraph e) 404-3 Percentage of employees receiving regular performance evaluations and career development assessments The NOS performance evaluation process is mandatory for all employees with the following exceptions: - ü • UNGC: 6 • SDG: 5, 8 • CSC | Article 508-G, Number 2, Subparagraph e) 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 170 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) a) employees with less than 3 months of seniority; b) employees with a long period of absence during the year. The coverage rate for eligible employees was 100% in 2023. The table below shows the translation of the rate compared to the total number of employees at the end of the year (31/12/2023). 2021 2022 2023 By gender Women 93% 96% 91% Men 96% 96% 93% By professional category Assistant 95% 94% 94% Professional 95% 95% 90% Specialist 97% 99% 95% Managers 93% 99% 97% Directors 98% 100% 100% Total 95% 96% 92% • Scope: All employees except cinema employees, internship contracts and governing bodies. GRI 400 Standard: Social Performance GRI 405: 2016 Diversity and Equal Opportunities 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 1.8. Governance model; 2.1.1Our People ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 405-1 Diversity in governing bodies and employees Category Gender Age (years old) Men Women <30 30 - 50 >50 Assistant N.º 13 53 25 22 19 % 19.7% 80.3% 37.9% 33.3% 28.8% Professional N.º 629 561 223 766 201 % 52.9% 47.1% 18.7% 64.4% 16.9% N.º 163 15 2 119 57 % 91.6% 8.4% 1.1% 66.9% 32.0% Specialist N.º 231 115 3 225 118 % 66.8% 33.2% 0.9% 65.0% 34.1% Manager N.º 39 16 0 33 22 % 70.9% 29.1% 0.0% 60.0% 40.0% N.º 13 8 0 10 11 % 61.9% 38.1% 0.0% 47.6% 52.4% • Scope: All employees with the exception of cinema employees and trainee contracts. The Governing Bodies consider the Board of Directors, the Statutory Independent Audit Board(permanent and alternate Members), and the Board of the General Meeting. RGI: 1.3 NOS in Numbers; 1.8. Governance model; 2.1.1Our People ü • UNGC: 6 • SDG: 5, 8 • CSC | Article 508-G, Number 2, Subparagraph e) 405-2 Ratio of base salary and remuneration between women and men See also the response to topic 3-3 of GRI 401: 2016 Employment RGI: 2.1.1Our People > Diversity & Inclusion ü • UNGC: 6 • SDG: 5, 8 • CSC | Article 508-G, Number 2, Subparagraph e) GRI 406: 2016 Non-Discrimination GRI 407: 2016 Freedom of Association and Collective Bargaining GRI 408: 2016 Child Labour GRI 409: 2016 Forced or Slave Labour 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.1 Stakeholder Engagement and Creating Shared Value > Purpose of our approach to stakeholders > 4. We advance connected - our strategic partnerships, alliances and external initiatives; 2.3.3 Ethics and Conduct; 2.3.4 Ethical supply chain management; 2.3.5 Risk Management ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 406-1 Incidents of discrimination and corrective measures taken No incidents of discrimination were recorded. - ü • UNGC: 1, 6 • SDG: 5, 8, 16 • CSC | Article 508-G, Number 2 407-1 408-1 409-1 Operations and suppliers where freedom of association and of collective bargaining may be at risk Operations and suppliers where there is a significant risk of child labour incidents Operations and suppliers where there is a significant risk of slave or forced labour incidents RGI: 2.3.3 Ethics and Conduct; 2.3.4 Ethical supply chain management; 2.3.1 Stakeholder Engagement and Creating Shared Value > Purpose of our approach to stakeholders > 4. We advance connected - our strategic partnerships, alliances and external initiatives ü • UNGC: 1, 6 • SDG: 5, 8, 16 • CSC | Article 508-G, Number 2 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 171 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) At NOS we are not aware of any situations of this nature, not even involving its supply chain. NOS guides its performance by ethical principles and responsible business, respecting labour legislation. Additionally, it subscribes to several external initiatives that promote Human Rights. NOS requires similar conduct from its suppliers, through its Code of Ethics, applicable in the scope of the provision of services to NOS, and the Sustainability Requirements for Suppliers and Partners. GRI 400 Standard: Social Performance GRI 413: 2016 Local Communities 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.2.1 Products & Services with Sustainable Innovation; 2.2.3 Promoting Inclusion and Digital Literacy; 1.10 We do what nobody else has done > Operating and financial results; 2.2.4 We support partners and boost the local economy ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 413-1 Operations with local community engagement, impact assessments and development programs RGI: 2.2.1 Products & Services with Sustainable Innovation; 2.2.3 Promoting Inclusion and Digital Literacy; 1.10 We do what nobody else has done > Operating and financial results; 2.2.4 We support partners and boost the local economy ü • CSC | Article 508-G, Number 2 GRI 414: 2016 Supplier Social Evaluation 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.4 Ethical supply chain management; 2.2.4 We support partners and boost the local economy ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 414-1 New suppliers screened using social criteria The supplier evaluation for the year 2023 will be held during the first quarter of 2024. For the sixth consecutive year, it will include Ethics, Environment and Occupational Health & Safety criteria. At the same time, 2023 saw the launch of the first evaluation campaign of critical suppliers for NOS specifically focussed on ESG and Security & Privacy criteria, in accordance with a supplier evaluation and engagement model which has been developed by NOS based on best practices in this area. The results of this campaign will be released in 2024. This first campaign covered current suppliers, and the process is expected to be extended to the selection of new suppliers in the future RGI: 2.3.4 Ethical supply chain management ü • SDG: 1, 2, 3, 4, 5, 6 • CSC | Article 508-G, Number 2 GRI 415: 2016 Public Policies 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.3 Ethics and Conduct ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 415-1 Political contributions NOS assumes itself as a nonpartisan and apolitical organization. It does not support financially or in kind, under any circumstances, political parties, organizations, or individuals associated with them whose mission is essentially political. - ü • UNGC: 10 • SDG: 16 • CSC | Article 508-G, Number 2 GRI 416: 2016 Customer Health and Safety 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.5 Risk Management > Prevention of and monitoring of electromagnetic fields (EMF) ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 416-1 Assessment of the health and safety impacts of products & services RGI: 2.3.5 Risk Management > Prevention of and monitoring of electromagnetic fields (EMF) ü • SDG: 16 • CSC | Article 508-G, Number 2, Subparagraph e) 416-2 Incidents of non-compliance related to health and safety impacts caused by products & services In the reporting period there is no record of such occurrences. - ü • SDG: 16 • CSC | Article 508-G, Number 2, Subparagraph e) GRI 417: 2016 Information/Labelling of Products &Services 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 172 Disclosure / Response Location EV Correspondence • UNGC Principles, • SDG, • Legal (CSC/ DL 89/ CVM) 2.3.3 Ethics and Conduct > Fair and transparent customer relations 417-2 Incidents of non-compliance related to information/labelling of products & services In the reporting period there is no record of such occurrences - ü • SDG: 16 • CSC | Article 508-G, Number 2, Subparagraph e) 417-3 Incidents of non-compliance related to marketing communications In the reporting period there is no record of such occurrences. - ü • SDG: 16 • CSC | Article 508-G, Number 2, Subparagraph e) GRI 400 Standard: Social Performance GRI 418: 2016 Customer Privacy 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.6 Security & Privacy ü • CSC | Article 508-G, Number 2, Subparagraph b) and c) 418-1 Founded complaints regarding breaches of customer privacy and losses of customer data In the reporting period there were 241 verified complaints about privacy violations and none about loss of customer data. - ü • CSC | Article 508-G, Number 2, Subparagraph e) Material NOS sustainability topics not directly related to GRI Standards 2021 topics Network and service coverage and quality: Increasing network coverage and service quality (e.g. connection reliability, data traffic speed) 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 1.7 Our Strategy > Strategic Execution; 1.10 We do what nobody else has done > Operating and financial results; 2.3.7 Network infrastructure quality, availability, and resilience ü - Homes with new generation fixed network Homes with FttH - Fiber-to-the-Home Percentage of Gigabit fixed network covered with FttH - Fiber-to-the-Home 5G mobile network population coverage No. of 5G stations (NOS specific indicators) Indicator 2021 2022 2023 Homes with new generation fixed network (thousands) 5,089 5,284 5.427 Percentage of Gigabit fixed network covered with FttH - Fiber-to-the-Home 54.0% 63.0% 74,8% 5G mobile network population coverage 72.0% 87.0% 94% No. of 5G stations 5,840 4,200 ü Network resilience: Ensuring network resilience and response to emergency situations (e.g. operating in storm or wildfire scenarios) 3-3 Material topics management RGI: 2.3.2 Sustainability Management and Strategy; 1.10 We do what nobody else has done > Recognitions > ESG Recognitions; 2.3.7 Network infrastructure quality, availability, and resilience ü - Redundancy in central service platform models (NOS specific indicators) 100% redundancy in central service platform models (VOICE, TV and INTERNET), guaranteeing excellent levels of service resilience and availability. Legend: RGI 2023 Integrated Management Report DFC 2023 Consolidated Financial Statements RGS 2023 Corporate Governance Report EV External Verification (disclosure verified by an external and independent entities - see External Verification Statement) UNGC principles - United Nations Global Compact SDG Sustainable Development Goals DL89 Decree-Law no. 89/2017 of July 28th CSC Portuguese Companies Code | Amendments introduced by Decree-Law no. 89/2017 of July 28th CVM Portuguese Securities Market Code | Amendments introduced by Decree-Law no. 89/2017 of July 28th 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 173 Methodological Notes • Economic and governance indicators 201-1 Direct economic value generated and distributed Economic value generated: The economic value generated is equivalent to turnover and corresponds to the sum of the following parts: net sales; revenue from financial investments; revenue from asset sales. Economic value distributed: Distributed economic value is equivalent to the procurement costs of products, materials and services and corresponds to the sum of the following parts: operating expenses; employee salaries and benefits; payments to shareholders and capital providers; payments to governments; investments in the community (as donations); Accumulated economic value: The accumulated economic value corresponds to the difference between the economic value generated and the economic value distributed. 204-1 Proportion of expenses with local suppliers For NOS, a national supplier is a Supplier with headquarters in the country of the NOS company. For example, for “NOS Sistemas Espanha,” a Spanish supplier is a national supplier. Intragroup expenses are not considered. Electromagnetic fields Radiation exposure thresholds - Maximum power density value allowed for electromagnetic field exposure, depending on the frequency under analysis, in accordance with Ordinance no. 1421/2004 of the 23rd of November, which follows Council Recommendation no. 1999/519/EC of the 12th of July and Regulation no. 86/2007. Compliance Indicators - Non-Conformities For the purpose of reporting this type of indicator, all legal proceedings resulting in the imposition of any sanctions on NOS for non-compliance with laws or decisions issued by the regulatory authority were considered. • Indicadores ambientais GRI 302 - Energy Consumption and Energy Efficiency Total energy consumption - Total energy consumption of the NOS Group. Considers all forms of energy consumed by all activities on company facilities. It includes consumption of fossil fuels (fleet, heat generation in buildings and cinema venues and emergency generators), consumption of electricity, heat and cold procured from third parties (technical infrastructure, buildings, own stores, cinemas and fleet) and consumption of electricity from renewable self-production (micro-generation of electricity in technical infrastructure facilities and solar thermal energy in buildings). The indicator is expressed in Megawatt-hour (MWh), using the most recent versions of the conversion factors released by the Portuguese national authorities: Lower calorific value and fuel density (Directorate-General for Energy and Geology). Data traffic - Total volume of data traffic associated with telecommunications services provided. Includes all mobile and fixed data. Energy consumption of the telecommunications service per data traffic – Ratio between energy consumption of the telecommunications services provided, expressed in kWh, per associated data traffic, expressed in Terabyte (TB). Considers all forms of energy consumed in activities related to Telco service provision (fixed and mobile network and support activities - fleet, buildings, and stores), in NOS and third-party facilities (infrastructures under housing regime, leased facilities where energy costs are borne by the owner, and sites shared with other operators). Excludes consumption in Data Centres dedicated to data processing and storage services and in cinemas of the Media & Entertainment segment. GRI 305 - Carbon Footprint Methodology – NOS' carbon footprint is accounted according to The GHG Protocol Corporate Accounting and Reporting Standard - Revised Edition (2004) methodology, complemented with the guidelines contained in The GHG Protocol Scope 2 Guidance (2015), when accounting for Scope 2 emissions, and The GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011), when accounting for Scope 3 emissions. The consolidation approach used is that of financial control. Emissions from NOS Madeira and NOS Açores operations for which it is not possible to obtain operational data are estimated based on the respective number of customers. Greenhouse Gases (GHG) - The GHGs included are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and fluorinated gases (hydrofluorocarbons - HFCs, perfluorocarbons - PFCs, sulphur hexafluoride - SF6; nitrogen trifluoride - NF3). The results are converted into equivalent carbon dioxide (CO2e) based on the Global Warming Potential (GWP) figures used in the most recent edition of the National Emissions Inventory, at the time of preparing each report. Consistent with this principle, from 2023 onwards the GWP figures published in the Intergovernmental Panel on Climate Change Fifth Assessment Report (AR5) have been used. Previous years used the GWP figures from the Fourth Assessment Report (AR4). Scope 1 emissions - Total direct emissions that occur at sources owned or controlled by NOS. Includes emissions associated with the fixed and mobile combustion of fossil fuels and fugitive emissions from cooling gases used in equipment. Fossil fuels - Emissions calculated based on the fuel supplied and emission factors representative of the national reality. For road diesel and petrol, the conversion factor considers the incorporation of biofuels (biodiesel and bioethanol, respectively) into the fuel sold in Portugal. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 174 Fluorinated gases – Emissions calculated by applying GWP values, specific for each type of gas, to the quantities emitted. The quantity emitted is considered equal to the quantity consumed to replenish leaks. Scope 2 emissions - Total emissions associated with the production of final energy purchased from third parties and consumed at NOS' facilities and equipment. Includes emissions associated with purchased electricity, heat and cold. Electricity – Emissions calculated using billed electricity. The calculation according to the Location-Based Method uses the emission factor representative of the average carbon content of the electricity from Portugal's electricity grid, according to the most recent data published by the European Environment Agency (EEA proxy for electricity production in year n-1). The Market- Based Method calculation uses the specific emission factor of the carbon content of the electricity supplied by the suppliers NOS contracted during the reporting year, calculated using the most recent information available at the time (for year n-1). Thermal energy - Emissions calculated on the basis of invoiced thermal energy (heat and cold). The calculation uses the specific conversion factor of one of the two thermal energy suppliers. This factor is considered representative of the entire supply, given the similarity of the fuel (natural gas) and technology (cogeneration) used. Scope 3 emissions - Total emissions associated with third- party activities in NOS' value chain, upstream and downstream of the company's own activities. Purchased goods & services (category 1) - Emissions from the extraction of raw materials, production, and transport of purchased goods & services in the reporting year. The calculation uses different approaches depending on the information available: Physical approach, with primary and secondary data - For mobile customer devices (mobile phones), Life Cycle Analyses (LCA) specific to the models purchased or representative of the type of device are used. Hybrid approach - For services provided by other operators, the average financial ratio (scope 1 and 2 emissions per €) of a representative group of operators is used, calculated from the most recent public information available. The figures are updated based on the Consumer Price Index published by INE. Financial approach - For the remaining purchased products & services, sectoral financial ratios from Environmentally Extended Input-Output (EEIO) tables updated annually are used. The figures are updated using the Consumer Price Index published by INE. Capital Goods (category 2) - Emissions from the extraction of raw materials, production and transport of capital goods purchased in the reporting year. The calculation uses different approaches, depending on the information available: Physical approach, with primary and secondary data - For fixed customer equipment (TV set-top-boxes, routers and televisions), model-specific LCAs are used for the models purchased or representative of the type of equipment. Financial approach - For the rest of the capital goods purchased, sectoral financial ratios from Environmentally Extended Input- Output (EEIO) tables updated annually are used. The values are updated using the Consumer Price Index published by INE Energy emissions, not included in scope 1 and 2 (category 3) - Upstream emissions (extraction, refining and transport) in the life cycle of fossil fuels, electricity and thermal energy consumed, and emissions from the production of electricity lost in the transport and distribution network. The calculation uses reference LCA emission factors and national figures for T&D losses in Portugal and for the location-based emission factor. Upstream and downstream logistics and distribution (categories 4 and 9) – Emissions from subcontracted logistics and distribution. Includes emissions from electricity consumption at the logistics centre and transport of customer equipment to the store network and to the customer's premises (direct and reverse logistics). It accounts for both transport paid for by NOS (category 4) and transport paid for by customers and partners (category 9). Upstream transport, paid for by the supplier, is accounted for in categories 1 and 2. The calculation uses NOS logistics operation activity data (weights transported, distances travelled and type of vehicle) and reference emission factors by type of vehicle. Waste generated in the operation (category 5) – Emissions from the disposal and treatment of waste and wastewater generated in our own operations. The calculation uses representative emission factors for Portugal and excludes emissions from recycling and energy recovery operations, allocated to the recycling and energy sectors respectively. Does not include transport to treatment plants. Business travel (category 6) – Emissions from employee missions in third-party vehicles (airplane, train, and taxi). The calculation uses information on distances travelled and number of passengers and a reference emission factor. Air travel emissions include Radiative Force Index. Employee Commuting (category 7) – Emissions from employee commuting in non-company vehicles. The calculation uses specific data on the mobility patterns of NOS employees, obtained through surveys, and emission factors representative of each transport mode. Energy consumption at third-party facilities (category 8) – Emissions from electricity consumption by company equipment on third-party facilities (sites shared with other operators, leased facilities and housing equipment). The calculation uses electricity consumption estimates based on similar equipment and the location-based emission factor for electricity in Portugal. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 175 Use of sold products (category 11) - Emissions from electricity consumption over the useful lifetime of customer equipment, in the mobile and fixed segments, sold or installed by the company in the reporting year. The calculation uses data representative of the energy consumption, useful life, logistical process and use patterns of the equipment sold each year, and the location-based emission factor for electricity in Portugal. It does not include energy consumption in equipment used by customers to use the services provided by NOS, but which was not sold or installed by the company. End of life treatment of sold products and packaging (category 12) - Emissions from the end-of-life waste treatment of customer equipment sold or installed in the reporting year and its packaging. The calculation considers recovery rates in Portugal for electrical and electronic equipment (category 6) and its packaging, and reference emission factors. Excludes emissions from recycling and energy recovery operations, allocated to the recycling and energy sectors respectively. Franchised stores (category 14) - Emissions from electricity consumed in franchised stores managed by third parties. The calculation uses consumption estimates - based on the average consumption per area of NOS- owned shops and the total area of the franchised shop network - and the location-based emission factor for electricity in Portugal. Investments (category 15) - Scope 1 and 2 emissions, as a % of share capital held, from associated companies and joint ventures not consolidated for accounting purposes using the full consolidation method. The calculation uses estimates based on ratios of emissions per € of NOS revenue: Subsidiaries in the telecommunications sector - Using the ratio of emissions from NOS operations (total scope 1 and 2 per €). Other subsidiaries - Using the ratio of emissions from NOS support activity (scope 1 and 2 of buildings and fleet per € ). The operation of these subsidiaries is essentially limited to back-office activities. Associates and joint ventures in which NOS is the largest customer are excluded, since the emissions associated with the purchase of the respective goods & services are already accounted for in categories 1 and 2. Category 10 (processing of sold products) and category 13 (leasing of assets to third parties) - These categories are not applicable, as NOS does not sell intermediate products and does not lease assets to third parties. GRI 306-2 - Waste production and disposal Total waste from the operation - Includes all waste produced at NOS facilities and where the company is identified as the producer. The quantities produced by type of waste and the respective disposal are monitored using information from the respective Waste Information Forms. Excludes waste equivalent to urban waste channelled through municipal systems (exclusion estimated as immaterial) and equipment, network components and accessories sold on secondary markets. Recovery - Includes multi-material recycling and composting. Disposal - Includes landfill, physical-chemical treatment, and incineration (with or without energy recovery). • Labour and human resources management indicators 401-1 New hires and employee net replacement In calculating the admissions and net replacement rates the following formulas were used: Admission rate: Number of admissions/total number of employees Net Replacement Rate: [((Entries-Exits) + Total number of employees) /Total number of employees]-1 (as of December 31, of each year) 401-3 Return to work and employee retention rates In calculating the rates of return to work and retention the following formulas were used: Return rate: Total number of employees returning after the period of compulsory parental leave /Total number of employees that should return to work after compulsory parental leave) * 100 Retention rate: Total number of employees who returned to work after the period of compulsory parental leave and remain employed after 12 months /Total number of employees who returned to work after the period of compulsory parental leave in the previous period) * 100 403-9: Occupational accidents 403-10 Occupational diseases Occupational accidents: for the purposes of accounting for work accidents that occurred in the reporting period, all accidents reported to the People and Organization Department are considered. 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 176 Days lost: Only working days are accounted in the accounting of days lost. The counting of lost days starts the day after the date of the accident. Occupational diseases: For NOS, occupational diseases are related to the type of work developed by the employee and predictably they would be related to psychiatric leave, nervous exhaustion, tendinitis, and musculoskeletal injuries. For the purposes of reporting this indicator, are considered as occupational diseases those communicated and proven in the reporting year. Absenteeism: number of working days lost, with the exception of vacation days and leaves decided by the company. Accident rates: in calculating the accident rates the following calculation formulas were used: • Frequency rate = (number of work accidents occurred in the reporting period / No. of workable hours) * 1000000 • Lost Days Rate (specific indicator, non-GRI Standards 2018) = (number of lost working days related to work accident or occupational disease in the reporting period / No. of workable hours) * 1000000 • Absenteeism rate (specific indicator, non-GRI Standards 2018) = number of working days lost due to absence / number of workable days 404-1 Average hours of training per year and per employee In calculating the average number of training hours, per gender and organizational group, the following calculation formulas were used: Average number of hours of training per employee: Total number of training hours/Total number of employees * Average hours of training per gender (M / F): Total number of training hours per gender (M/F) / Total number of employees * per gender (M/F) Average number of training hours per organizational group (M/F): Total number of training hours per organizational group / Total number of employees * in each organizational group (as of December 31, of each year) 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 177 Adoption of the Task Force on Climate-Related Financial Disclosure (TCFD) Recommendations TCFD Recommendations NOS Disclosure Recommendation Recommended disclosure Information disclosed by NOS References Governance Disclose the organization's governance model for climate risks and opportunities a) Climate risk and opportunities supervision process, at the level of the Board of Directors Our response to the CDP Climate Change survey details the responsibilities and processes of climate supervision at the NOS Board of Directors level, including the existence of specific responsibilities on the topic. In the Integrated Management Report, we present how we are organised to manage sustainability issues, in a global manner, including the Board of Directors' role in the process. Response to 2023 CDP Climate Change – C1.1 2023 Integrated Management Report – 2.3.2 Sustainability Management and Strategy, 1.8 Governance model b) The management's role in assessing and managing climate risks and opportunities Our response to the CDP Climate Change survey details the climate assessment and management responsibilities and processes, at the management level immediately below the NOS Board of Directors. In the Integrated Management Report, we present how we are organised to manage sustainability issues, in a global manner, including the senior management role in the process. Response to 2023 CDP Climate Change – C1.2 2023 Integrated Management Report – 2.3.2 Sustainability Management and Strategy Strategy Disclose the actual and potential impact of climate risks and opportunities on business strategy and financial planning, to the extent that this information is material a) Climate risks and opportunities identified in the short, medium and long-term In the response to the CDP Climate Change survey, we annually disclose the characterisation of the climate risks (physical and transitional) and opportunities that we have identified, including the respective drivers, estimated potential financial impact, response mechanisms and response costs. In the Integrated Management Report, we also present these risks and opportunities, their description, potential impact and our response. Response to 2023 CDP Climate Change – C2.1, C2.3, C2.4 2023 Integrated Management Report – 2.2.2 On behalf of the Planet, Energy and Climate section b) Impact of climate risks and opportunities on business strategy and financial planning Our response to the CDP Climate Change survey details how the climate risks and opportunities we have identified influence our business strategy (in terms of the products and services we place on the market, our own operation, and the value chain) and the way we plan resources (in terms of revenues, capital costs and operating costs). The Integrated Management Report presents the NOS Next Generation 2021-2025 business strategy and its integration with ESG issues, including climate-related topics. It also presents the main implications of climate risks and opportunities for our revenues and costs. Response to 2023 CDP Climate Change – C3.1, C3.3, C3.4, C3.5 2023 Integrated Management Report – 1.7 Our Strategy, 2.2.2 On behalf of the Planet, Energy and Climate section c) Resilience of the business strategy in various climate scenarios, including 2ºC or lower scenarios We continue to further characterise the climate risks and opportunities which impact our business, with particular attention to the most relevant physical risks in the geography in which we operate, namely wildfire risk, and the potential impact on our network infrastructure. We plan to integrate a climate scenario analysis exercise into this process, which will allow a full assessment of the resilience of our business strategy in different scenarios of the physical, regulatory and market consequences of climate change. Response to 2023 CDP Climate Change – C3.2 2023 Integrated Management Report – 1.7 Our Strategy, 2.2.2 On behalf of the Planet, Energy and Climate section Risk Management Disclose how the organization identifies, assesses, and manages climate risks a) Processes for identifying and assessing climate risks Our response to the CDP Climate Change survey details the responsibilities and processes we have implemented to manage climate risks and opportunities (identification, assessment, and management) and how they are integrated into the NOS risk management model. The Integrated Management Report details our global risk management model, including its methodology and processes, and how it covers climate risks and opportunities. Response to 2023 CDP Climate Change – C2.1, C2.2 2023 Integrated Management Report – 2.3.5 - Risk Management b) Climate risk management processes c) Integration of climate risk identification, assessment, and management processes into the organisation's overall risk management model 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 178 Indicators and targets Describe the indicators and targets used to assess and manage climate-relevant risks and opportunities, to the extent that this information is material a) Indicators used to assess climate risks and opportunities, in line with the risk management strategy and process The Integrated Management report provides detailed information on the indicators we use to monitor our climate performance and thus manage the risks and maximise the associated opportunities. These indicators include metrics for GHG emissions, energy efficiency, renewable electricity consumption and products & services which reduce customer emissions. We also provide financial indicators associated with activities that contribute significantly to the European Union's climate change mitigation and adaptation goals. Our response to the CDP Climate Change questionnaire also presents indicators for emissions, energy and products & services which prevent emissions, as well as financial indicators for the climate transition, namely turnover associated with low-carbon products & services, costs (operating and investment) for reducing the carbon intensity of our operation, and eligibility and alignment indicators with the European Union's Taxonomy of environmentally sustainable activities regarding climate goals. It also includes information on the integration of climate performance metrics into remuneration policies. 2023 Integrated Management Report – 2.2.2 On behalf of the Planet, Energy and Climate section, Annex - EU Ta xo n o my of Environmentally Sustainable Activities Response to 2023 CDP Climate Change – C6.1, C6.3, C6.5, C6.10, C8, C9, C4.3, C4.5, C3.5, C1.3 b) Scope 1, 2 and, if relevant, Scope 3 greenhouse gas (GHG) emissions and associated risks The Integrated Management Report discloses the NOS carbon footprint, including scope 1 and 2 emissions and all applicable categories of scope 3 emissions. Quantification is done according to The GHG Protocol methodology and results are subject to independent external verification. Our response to the CDP Climate Change survey also discloses these results. 2023 Integrated Management Report – 2.2.2 On behalf of the Planet, Energy and Climate section Response to 2023 CDP Climate Change – C5.3, C6.1, C6.2, C6.3, C6.5, C10.1 c) Targets set to manage climate risks and opportunities and performance on those targets The Integrated Management Report discloses the quantitative targets we have set for each of the energy and emissions indicators, as well as our annual performance on these targets. Our emission reduction targets (scope 1, 2 and 3) for 2030 are recognised as Science-Based Targets by the Science Based Target initiative (SBTi). We also commit to being carbon neutral by 2040 and are assessing the extension of this commitment to the value chain and its alignment with the SBTi requirements for the approval of carbon neutrality targets. Our response to the CDP Climate Change survey also includes these targets and their performance 2023 Integrated Management Report – 2.2.2 On behalf of the Planet, Energy and Climate section Response to 2023 CDP Climate Change – C4.1, C4.2 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 179 Glossary %: Percentage AA: Advanced Analytics ACEPI: Digital Economy Association ACV: Life Cycle Analysis (LCA) AdC: Portuguese Competition Authority ADSL PT: Asymmetric Digital Subscriber Line, Portugal Telecom AEM: Securities Issuers Association ANACOM: Portuguese Communications Authority ANEPC: Portuguese Civil Protection and Emergency Authority ANFR: L'Agence Nationale des Fréquences ANI: National Innovation Agency APAMCM: Portuguese Association for the Support of Women with Breast Cancer APAN: Portuguese Advertisers Association APCC: Portuguese Association of Contact Centres APDC: Portuguese Association for the Development of Communications APELA: Portuguese Amyotrophic Lateral Sclerosis Association App: Application APRITEL: Portuguese Association of Electronic Communications Operators ARPU: Average revenue per unit ASF: Insurance and Pension Funds Supervisory Authority AV: Audiovisuals AVAC: Heating, Ventilation and Air Conditioning AWS: Amazon Web Services AZ: Availability Zone B2B: Business to Business B2C: Business to Consumer BCM: Business Continuity Management BCSD: Business Council for Sustainable Development BEREC: Body of European Regulators of Electronic Communications BIA: Business Impact Analysis BRM: Business Risk Model BSPA: Basic Security and Privacy Assessment CA: Board of Directors (BoD) CAPEX: Capital expenditures CAS: Security Assessment Committee CCO: Chief Compliance Officer CDP: Disclosure, Insight Action CE: Executive Committee (EC) CECE: European Electronic Communications Code (EECC) CEM: Electromagnetic Fields (EMF) CEN: European Committee for Standardisation CENELEC: European Committee for Electrotechnical Standardisation CEO: Chief Executive Officer CFO: Chief Financial Officer CH4: Methane CISO: Chief Information Security Officer CLC: Statutory Auditors CMVM: Portuguese Securities Market Commission CNCS: National Cyber-security Centre CNPD: National Data Protection Commission CO2: Carbon Dioxide CO2e: Carbon dioxide equivalent COP27: 27th United Nations Climate Change Conference CRM: Client Relationship Management CSA: Corporate Sustainability Assessment (S&P) CSC: Portuguese Companies Code CSRD: Corporate Sustainability Reporting Directive CTE: Electrotechnical Technical Commission CTO: Chief Technology Officer CVM: Portuguese Securities Commission DAE: Automated External Defibrillator DC: Datacentre DECO: Portuguese Association for Consumer Protection DESI: Digital Economy and Society Index DFC: Controlled Financial Statements DGEEC: Directorate-General for Education and Science Statistics DL: Decree-Law DNA: DeoxyriboNucleic Acid DNS: Domain Name System DOCSIS: Data Over Cable Service Interface Specifications DOP: Developing our People DPO: Data Protection Officer EBITDA: Earnings before interest, taxes, depreciation, and amortization EBITDA-AL: EBITDA After Leasings EBT: Eletronic Benefits Transfer EDP: Energias de Portugal EEA: European Environment Agency EEIO: Environmentally Extended Input-Output EGDC: European Green Digital Coalition ELA: Amyotrophic Lateral Sclerosis ENSICO: Association for Computing Education EoY: End-of-Year EPCs: Collective Protective Equipment EPIs: Personal Protective Equipment (PPE) ERC: Portuguese Regulatory Authority for the Media ERM: Enterprise Risk Management ESG: Environmental, Social and Governance eSIM: Embedded SIM ESRS: European Sustainability Reporting Standards ETIS: The Community for Telecom Professionals EUA: United States of America (USA) FAAST: Forward the Advanced Analytics Smart Transformation FCF: Free Cash Flow FMI: International Monetary Fund (IMF) FttH: Fiber-to-the-Home FTTP: Fiber to the Premises Gbps: Gigabits per second GHG: Greenhouse Gases GEI: Gender-Equality Index (Bloomberg) GeoSAT: Global Earth Observation Satellites GeSI: Global Enabling Sustainability Initiative GHG: Greenhouse Gas GHz: Giga Hertz GJ: Giga Joules 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 180 GOs: Guarantees of Origin GRC: Governance, Risk & Compliance GRI: Global Reporting Initiative GSMA: Groupe Speciale Mobile Association GWh: Gigawatt-hour HFC: Hybrid Fiber Coax HFCs: Hydrofluorocarbons R&D: Research & Development I&M: Investment and Mortgages AI: Artificial Intelligence ICA: Film and Audiovisual Institute ICF: Inclusive Community Forum ICNF: Institute for Nature Conservation and Forests ICNIRP: International Commission on Non-Ionizing Radiation Protection ICT: Information and Communication Technology IDEMIA: Information, Detection, and Identity Management IEP: European Patent Office IFRS: International Financial Reporting Standards IIRC: International Integrated Reporting Council IMAX: Image Maximum INE: National Institute for Statistics INESC TEC: Systems and Computer Engineering, Technology and Science Institute INOV: Systems and Computer Engineering Innovation Institute IoT: Internet of Things IMS: Integrated Management System IPCG: Portuguese Institute of Corporate Governance   IPMA: Portuguese Institute for the Sea and Atmosphere IPN: Pedro Nunes Institute ISM: Information Security Management ISO: International Organization for Standardization ISP: Internet Service Provider ISS: Institutional Shareholder Services IST: Instituto Superior Técnico IT: Information Technology ITED: Telecommunications Infrastructures in Buildings ITGC: Information Technology General Controls VAT: Value-Added Tax KAM: Key Audit Matters km: Kilometre km2: Square Kilometre KPIs: Key Performance Indicators KRIs Key Risk Indicators kWh: Kilowatt-hour LED: Ligh Emitting Diode LTP: Large Transaction Processing (LTPlabs) M€: Millions of Euros M2M: Machine to Machine MBA: Master of Business Administration Mbps: Megabit per second MHz: Mega Hertz MIT: Massachusetts Institute of Technology MRC: Contract Summary Model ms: milliseconds MS: Microsoft MSCI: Morgan Stanley Capital International M MUDA: Movement for Active Digital Use. MWh: Megawatt-hour NACE: Statistical Classification of Economic Activities in the European Community NATO: North Atlantic Treaty Organisation No.: Number NB IoT: Narrow Band Internet of Things NF3: Nitrogen Trifluoride NPS: Net Promoter Score N2O: Nitrous Oxide OECD: Organisation for Economic Co-operation and Development SDG: United Nations Sustainable Development Goals OFCOM: Office of Communications (United Kingdom) ILO: International Labour Organization WHO: World Health Organisation OPEX: Operational Expenditure ORAC: Duct Access Reference Offer ORAP: Poles Access Reference Offer OTT: Over the Top players P&S: Products & Services GWP: Global Warming Potential PC: Personal Computer COB: Chairman of the Board PFCs: Perfluorocarbons PIAs: Privacy Impact Assessments GDP: Gross Domestic Product SMEs: Small and Medium Enterprises SMP: Significant Market Position PNN: National Numbering Plan P.p.: Percentage point PPA: Power Purchase Agreement PRR: Recovery & Resilience Plan PSF: Power Saving Features PSI: Information Security Policy PUE: Power Usage Effectiveness PWC: PricewaterhouseCoopers PWN: Professional Women’s Network QoS: Quality of Service QR: Quick-Response RA: Risk Assessment RATs: Records of processing activity RCIC: Risks of Corruption and Related Offences RCN: Regulatory Compliance Officer RGI: Integrated Management Report GDPR: General Data Protection Regulation RGS: Corporate Governance Report RGUs: Revenue Generating Units ROC: Statutory Auditor ROSE: Robot Sensing for tele-Ecography RPA: Robotic Process Automation S&P: Standard & Poor's; Security & Privacy S.A: Joint Stock Company SBE: School of Business & Economics SBT: Science Based Target SBTi: Science Based Targets initiative SBV: Basic Life Support SF6: Sulphur Hexafluoride SGI: Integrated Management System (IMS) SGPS: Sociedade Gestora de Participações Sociais SIFIDE: System of Tax Incentives for Research and Business Development SIM: Subscriber Identity Module 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 181 SIRESP: Portugal's Integrated Emergency and Security Network System SLAs: Service Level Agreements SLOs: Service Level Objectives SMS: Short Message Service SOC: Security Operations Centre SRM: Supplier Relationship Management SROC: Statutory Audit Firm OHS: Occupational Health and Safety STEM: Science, Technology, Engineering, Mathematics t: Tonne TB: Terabyte TCFD: Task Force on Climate-Related Financial Disclosures tCO2e: tonnes of CO2 equivalent T&D: Transport & Distribution IT: Information Technology ICT: Information and Communication Technologies ton: tonne(s) TV: Television EU: European Union UNGC: United Nations Global Compact UPS: Uninterruptible Power Supply VHCN: Very High-Capacity Networks VLE: Maximum Emission Threshold VOD: Video On Demand VPN: Virtual Private Network Vs: Versus W: Watts WEPs: Women’s Empowerment Principles ZERO: Association for the Sustainability of the Earth System 9M23: 3rd Quarter 2023 4G: 4th Generation 5G: 5th Generation 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 182 External Verification Statement 2.1 2.2 2.3 2.4 2.5 Annexes 2023 Annual Integrated Report 01 02 03 04 183 Integrated Annual Report 2023 184 02 2.1 Consolidated Financial Statements 2.2 Notes to the Consolidated Financial Statements 185 191 Consolidated Financial Statements 01 02 03 04 2.1 Consolidated Financial Statements 2.2 Integrated Annual Report 2023 01 02 03 04 185 Consolidated statement of the financial position At 31 de December 2022 and 2023 (Amounts stated in thousands of euros) Notes 31-12-2022 31-12-2023 Assets Non-current assets: Tangible assets 8 1,107,052 1,093,584 Investment property 514 349 Intangible assets 9 1,209,558 1,207,946 Contract costs 10 160,594 158,406 Rights of use 11 297,723 307,090 Investments in jointly controlled companies and associated companies 12 38,961 29,440 Accounts receivable - other 13 4,758 4,364 Tax receivable 14 369 51 Other financial assets non-current 15 5,248 6,028 Deferred income tax assets 16 89,554 81,906 Derivative financial instruments 21 11,249 5,583 Total non-current assets 2,925,580 2,894,747 Current assets: Inventories 17 67,223 48,215 Accounts receivable - trade 18 319,441 363,692 Contract assets 19 60,095 47,011 Accounts receivable - other 13 16,632 15,682 Tax receivable 14 6,906 37,050 Prepaid expenses 20 52,232 44,425 Cash and cash equivalents 22 15,215 18,158 Total current assets 537,744 574,233 Total assets 3,463,324 3,468,980 2.1 Consolidated Financial Statements 2.2 Integrated Annual Report 2023 01 02 03 04 186 Notes 31-12-2022 31-12-2023 Shareholder's equity Share capital 23.1 855,168 855,168 Capital issued premium 23.2 4,202 4,202 Own shares 23.3 (15,968) (15,059) Legal reserve 23.4 1,030 4,374 Other reserves and accumulated earnings 23.4 (22,914) (41,578) Net Income 224,574 180,995 Equity before non-controlling interests 1,046,092 988,102 Non-controlling interests 24 6,251 6,585 Total equity 1,052,343 994,687 Liabilities Non-current liabilities: Borrowings 25 1,210,181 1,496,900 Provisions 26 81,267 80,154 Accounts payable - other 30 42,128 44,726 Deferred income 28 2,824 - Derivative financial instruments 21 - 1,036 Deferred income tax liabilities 16 50,125 49,507 Total non-current liabilities 1,386,525 1,672,323 Current liabilities: Borrowings 25 427,453 237,069 Accounts payable - trade 29 253,355 243,991 Accounts payable - other 30 53,789 50,349 Tax payable 14 38,842 23,213 Accrued expenses 27 212,430 203,943 Deferred income 28 38,190 42,964 Derivative financial instruments 21 397 441 Total current liabilities 1,024,456 801,970 Total liabilities 2,410,981 2,474,293 Total liabilities and shareholder's equity 3,463,324 3,468,980 The Notes to the Financial Statements form an integral part of the consolidated statement of financial position as of 31 December 2023. The Chief Accountant The Board of Directors 2.1 Consolidated Financial Statements 2.2 Integrated Annual Report 2023 01 02 03 04 187 Consolidated statement of income by nature For the financial years ended on 31 of December 2022 and 2023 (Amounts expressed in thousands of euros) Notes 4 th quarter 22 12M 22 4 th quarter 23 12M 23 Revenues: Services rendered 350,298 1,362,741 370,273 1,451,987 Sales 38,319 128,044 36,844 116,277 Other operating revenues 8,892 30,222 7,226 29,190 31 397,509 1,521,007 414,343 1,597,454 Costs, losses and gains: Wages and salaries 32 22,861 85,898 21,391 90,206 Direct costs 33 99,072 345,019 97,409 354,391 Costs of products sold 34 34,710 114,562 38,307 104,411 Marketing and advertising 16,906 34,748 18,059 38,960 Support services 35 24,967 83,466 24,052 91,634 Supplies and external services 35 37,722 155,238 40,539 153,529 Other operating losses / (gains) 163 798 371 1,056 Taxes 8,178 34,985 8,870 35,713 Provisions and adjustments 36 1,991 15,233 1,710 10,885 Depreciation, amortization and impairment losses 8,9,10,11 & 38 135,331 480,887 123,784 483,638 Restructuring costs 39 2,438 4,001 2,378 3,605 Losses / (gains) on sale of assets, net (25,876) (100,423) (128) (851) Other losses / (gains) non recurrent net 40 (215) (3,613) (34,535) (33,935) 358,248 1,250,799 342,207 1,333,242 Income before losses / (gains) participated companies, financial results and taxes 39,261 270,208 72,136 264,212 Net losses / (gains) of affiliated companies 12 & 37 (5,148) (22,123) (432) (5,081) Financial costs 41 8,044 31,578 19,703 65,293 Net foreign exchange losses / (gains) 624 224 149 88 Net losses / (gains) on financial assets 6 103 22 217 Net other financial expenses / (income) 41 778 3,319 868 3,607 4,304 13,101 20,310 64,124 Income before taxes 34,957 257,107 51,826 200,088 Income taxes 16 1,687 32,663 (3,096) 18,754 Net consolidated income 33,270 224,444 54,922 181,334 Attributable to: NOS Group Shareholders 33,293 224,574 54,675 180,995 Non-controlling interests 24 (23) (130) 247 339 Earnings per shares Basic - euros 42 0,07 0,44 0,11 0,35 Diluted - euros 42 0,07 0,44 0,11 0,35 As a recurring practice, only the annual accounts are audited therefore, the quarterly figures have not been audited independently. The Notes to the Financial Statements form an integral part of the consolidated statement of income by nature for the financial year ended on 31 December 2023. The Chief Accountant The Board of Directors 2.1 Consolidated Financial Statements 2.2 Integrated Annual Report 2023 01 02 03 04 188 Consolidated statement of comprehensive income For the financial years ended on 31 of December 2022 and 2023 (Amounts expressed in thousands of euros) Notes 4 th quarter 22 12M 22 4 th quarter 23 12M 23 Net consolidated income 33,270 224,444 54,922 181,334 Other income Items that may be reclassified subsequently to the income statement: Accounting for equity method 12 (9,317) (178) (1,522) (13,481) Fair value of interest rate swap 21 1,310 10,957 (7,138) (6,597) Deferred income tax - interest rate swap 21 (294) (2,465) 1,606 1,484 Fair value of equity swaps 21 - 186 - - Deferred income tax - equity swap 21 - (42) - - Fair value of exchange rate forward 21 (3,559) (251) (617) (114) Deferred income tax - exchange rate forward 21 1,028 72 172 33 Currency translation differences and others 805 698 (30) (368) Income recognized directly in equity (10,027) 8,977 (7,529) (19,043) Total comprehensive income 23,243 233,421 47,393 162,291 Attributable to: NOS Group Shareholders 23,266 233,551 47,146 161,952 Non-controlling interests (23) (130) 247 339 23,243 233,421 47,393 162,291 As a recurring practice, only the annual accounts are audited therefore, the quarterly figures have not been audited independently. The Notes to the Financial Statements form an integral part of the consolidated statement of comprehensive income for the financial year ended on 31 December 2023. The Chief Accountant The Board of Directors 2.1 Consolidated Financial Statements 2.2 Integrated Annual Report 2023 01 02 03 04 189 Consolidated statement of changes in shareholder's equity For the financial year ended on 31 of December 2022 and 2023 (Amounts expressed in thousands of euros) Attributable to NOS Group Shareholders Total Notes Share capital Capital issued premium Own shares Legal reserve Other reserves Net income Non- controlling interests Balance as of 1 January 2022 5,152 854,219 (12,353) 1,030 (35,586) 144,159 6,379 963,000 Result appropriation Transfers to reserves - - - - 144,159 (144,159) - - Dividends paid 23.4 - - - - (142,357) - - (142,357) Share capital increase by incorporation of share premium 23.2 850,016 (850,016) - - - - - - Acquisition of own shares 23.2 - - (7,087) - - - - (7,087) Distribution of own shares: Distribution of own shares - share incentive scheme 23.3 - - 3,186 - (3,186) - - - Distribution of own shares - other remunerations 23.3 - - 286 - (14) - - 272 Share Plan - costs incurred in the period and others - - - - 5,093 - 2 5,095 Comprehensive Income - - - - 8,977 224,574 (130) 233,421 Others - (1) - - - - - (1) Balance as of 31 December 2022 855,168 4,202 (15,968) 1,030 (22,914) 224,574 6,251 1,052,343 Balance as of 1 January 2023 855,168 4,202 (15,968) 1,030 (22,914) 224,574 6,251 1,052,343 Result appropriation Transfers to reserves - - - 3,344 221,230 (224,574) - - Dividends paid 23.4 - - - - (219,987) - - (219,987) Acquisition of own shares 23.3 - - (5,171) - - - - (5,171) Distribution of own shares: Distribution of own shares - share incentive scheme 23.3 - - 5,970 - (5,970) - - - Distribution of own shares - other remunerations 23.3 - - 110 - 7 - - 117 Share Plan - costs incurred in the period and others 47 - - - - 5,099 - (5) 5,094 Comprehensive Income - - - - (19,043) 180,995 339 162,291 Balance as of 31 December 2023 855,168 4,202 (15,059) 4,374 (41,578) 180,995 6,585 994,687 The Notes to the Financial Statements form an integral part of the consolidated statement of changes in shareholders' equity for the financial year ended on 31 December 2023. The Chief Accountant The Board of Directors 2.1 Consolidated Financial Statements 2.2 Integrated Annual Report 2023 01 02 03 04 190 Consolidated statement of cashflows For the financial years ended on 31 December de 2022 and 2023 (Amounts expressed in thousands of euros) Notes 12M 22 12M 23 Operating activities Collections from clients 1,805,986 1,836,611 Payments to suppliers (953,908) (895,357) Payments to employees (107,520) (118,306) Receipts / (Payments) relating to income taxes (29,388) (58,496) Other cash receipts / (payments) related with operating activities (72,748) (35,742) Cash flow from operating activities (1) 642,422 728,710 Investing activities Cash receipts resulting from Financial investments 44.1 1,100 1,150 Tangible assets 136,317 1,562 Intangible assets 1 - Interest and related income 5,839 7,300 143,257 10,012 Payments resulting from Financial investments 44.2 (3,147) (1,629) Disposal of discontinued operating unit - (129) Tangible assets (226,574) (231,616) Intangible assets and contract costs (244,377) (218,876) (474,098) (452,250) Cash flow from investing activities (2) (330,841) (442,238) Financing activities Cash receipts resulting from Borrowings 478,693 700,200 Dividends - 622 478,693 700,822 Payments resulting from Borrowings (520,533) (606,600) Lease rentals (principal) (79,877) (105,796) Interest and related expenses (42,520) (49,327) Dividends 23.4 (142,357) (219,987) Acquisition of own shares 23.3 (7,087) (5,171) (792,374) (986,881) Cash flow from financing activities (3) (313,681) (286,059) Change in cash and cash equivalents (4)=(1)+(2)+(3) (2,100) (413) Effect of exchange differences 8 2 Cash and cash equivalents, net of bank overdrafts at the beginning of the year 10,171 8,079 Cash and cash equivalents, net of bank overdrafts at the end of the period 22 8,079 8,490 The Notes to the Financial Statements form an integral part of the consolidated statement of cash flows for the financial year ended on 31 December 2023. The Chief Accountant The Board of Directors 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 191 Notes to the consolidated financial statements As of 31 December 2023 (Amounts stated in thousand euros, unless otherwise stated) 1. Introductory Note NOS, SGPS, S.A. ("NOS", “NOS SGPS” or "Company"), whose designation did not change during the year, formerly named ZON OPTIMUS, SGPS, S.A. (“ZON OPTIMUS”) and until 27 August 2013, named ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. (“ZON”), with Company headquarters registered at Rua Actor António Silva, nº9, Campo Grande, was established by Portugal Telecom, SGPS, S.A. ("Portugal Telecom") on 15 July 1999 for the purpose of implementing its multimedia business strategy. During the 2007 financial year, Portugal Telecom proceeded with the spin-off of ZON through the attribution of its participation in the company to their shareholders, which become fully independent from Portugal Telecom. During the 2013 financial year, ZON and Optimus, SGPS, S.A. ("Optimus SGPS") have merged through the incorporation of Optimus SGPS into ZON. Thereafter, the Company adopted the designation of ZON OPTIMUS, SGPS, S.A. On 20 June 2014, because of the launch of the new brand “NOS” on 16 May 2014, the General Meeting of Shareholders approved the change of the Company’s name to NOS, SGPS, S.A. The businesses operated by NOS and its associated companies, form the "NOS Group" or "Group", which includes cable and satellite television services, voice and Internet access services, video production and sale, advertising on Pay TV channels, cinema exhibition and distribution, the production of channels for Pay TV, management of datacenters and consulting services in IT, mainly in the Portuguese market. NOS shares are listed on the Euronext Lisbon market. The shareholders’ structure of the Group as of 31 December 2023 is shown in Note 23. The business of NOS Comunicações, S.A. (“NOS SA”) and its subsidiaries, NOS Technology, NOS Açores, NOS Madeira, NOS Wholesale and NOS Sistemas comprehends: a) cable and satellite television distribution; b) the operation of the latest generation mobile communication network, GSM/UMTS/LTE/5G; c) the operation of electronic communications services, including data and multimedia communication services in general; d) IP voice services ("VOIP" - Voice over IP); e) Mobile Virtual Network Operator (“MVNO”), f) the provision of consultancy and similar services directly or indirectly related to the above mentioned activities and services, and g) datacenter management and consulting services in IT. The business of these companies is regulated by Law no. 5/2004 (Electronic Communications Law), which establishes the legal regime governing electronic communications networks and services. The main activity of NOS Audio – Sales and Distribution, S.A., previously designated NOS Lusomundo TV, S.A. and the result of the merger of NOSPUB with NOS Lusomundo TV on December 2020, is the negotiation, acquisition and distribution of content rights and other multimedia products to television and other platforms of distribution, currently producing films and series channels through the compilation of the acquired contents, which are distributed, among other operators, by NOS SA and its subsidiaries. This company also manages the advertising space on Pay TV channels and in the cinemas of NOS Cinemas. NOS Audiovisuais and NOS Cinemas, together with their associated companies, operate in the audiovisual sector, which includes video production and sale, cinema exhibition and distribution, and the acquisition/negotiation of Pay TV and VOD (video-on-demand) rights. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 192 NOS Inovação main activities are conducting and stimulating scientific activities of R&D (it owns all the intellectual property developed within the NOS Group, intending to guarantee the return of the initial investment through the commercialization of patents and concessions regarding commercial operation, as a result of the creation of new products and services), the demonstration, disclosure, technology and training transfers in the services and information management domains as well as fixed and mobile solutions of the latest generation of TV, internet, voice and data solutions. These notes to the Financial Statements follow the order in which the items are shown in the consolidated financial statements. The consolidated financial statements for the financial year ended on 31 December 2023 were approved by the Board of Directors and their issue authorized on 5 March 2024. They are also subject to approval by the General Shareholders' Meeting, under the terms of the commercial legislation in force in Portugal. The Board of Directors believes that these financial statements give a true and fair view of the Group’s operations, financial performance, and consolidated cash flows. 2. Accounting Policies The principal accounting policies adopted in the preparation of the financial statements are described below. These policies were consistently applied to all the financial years presented, unless otherwise stated. 2.1. The principles of presentation The consolidated financial statements of NOS were prepared in accordance with International Financial Reporting Standards ("IAS/IFRS") issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the former Standing Interpretations Committee ("SIC"), adopted by the European Union, effective January 1, 2023. The consolidated financial statements are presented in euros as this is the main currency of the Group's operations and all amounts are presented in thousands of euros, except when referred to the financial statements of subsidiaries located abroad were converted into euros in accordance with the accounting policies described in Note 2.3.21. The consolidated financial statements were prepared on a going concern basis from the ledgers and accounting records of the companies included in the consolidation (Annex A)), using the historical cost convention, adjusted when necessary for the valuation of financial assets and liabilities (including derivatives) at their fair value (Note 2.3.24). In preparing the consolidated financial statements in accordance with IFRS, the Board used estimates, assumptions, and critical judgments with impact on the value of assets and liabilities and the recognition of income and costs in each reporting period. Although these estimates were based on the best information available at the date of preparation of the consolidated financial statements, current and future results may differ from these estimates. The areas involving a higher element of judgment and estimates are described in Note 3. The Board of Directors is convinced that there are no material uncertainties that might question this assumption. An analysis was made that the Group has the necessary resources to continue its operations into the future, for a period of no less than 12 months from the reporting date. In the preparation and presentation of the consolidated financial statements, the NOS Group declares that it complies explicitly and without reservation with IAS/IFRS reporting standards and related SIC/IFRIC interpretations as approved by the European Union. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 193 Changes in accounting policies and disclosures The following standards, interpretations, amendments and revisions endorsed by the European Union have mandatory application for the first time in the financial year beginning on January 1, 2023: • IFRS 17 - Insurance Contracts. IFRS 17 replaces IFRS 4 and applies to all insurance contracts (i.e., life, non-life, direct insurance and reinsurance), regardless of the type of entity issuing them, as well as some guarantees and some financial instruments with discretionary participation characteristics. In general terms, IFRS 17 provides a more useful and consistent accounting model for insurance contracts for issuers. In contrast to the requirements of IFRS 4, which are based on previously adopted local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. • Amendments to IFRS 17 - Insurance contracts - Initial application of IFRS 17 and IFRS 9 - Comparative information. This amendment to IFRS 17 refers to the presentation of comparative information for financial assets in the initial application of IFRS 17. The amendment adds a transition option that allows an entity to overlay the classification of a financial asset in the comparative period(s) presented on initial application of IFRS 17. The overlay allows all financial assets, including those held in relation to non-contract activities within the scope of IFRS 17, to be classified, instrument by instrument, in the comparative period(s) in a manner aligned with how the entity expects those assets to be classified on initial application of IFRS 9.. • Amendments to IAS 1 - Disclosure of accounting policies. These changes are intended to help an entity disclose 'material' accounting policies, previously referred to as 'significant' policies. However, due to the absence of this concept in the IFRS, it was decided to replace it with the concept of "materiality", a concept already known to users of financial statements. When assessing the materiality of accounting policies, the entity must consider not only the size of the transactions but also other events or conditions and their nature. • Amendments to IAS 8 - Definition of accounting estimates. The amendment clarifies the distinction between a change in accounting estimate, a change in accounting policy and the correction of errors. In addition, it clarifies how an entity uses measurement techniques and inputs to develop accounting estimates. • Amendments to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction. IAS 12 now requires an entity to recognize deferred tax when its initial recognition gives rise to equal amounts of taxable temporary differences and deductible temporary differences. However, it is a matter of professional judgment whether such deductions are attributable to the liability that is recognized in the financial statements or to the related asset. This is particularly important when determining the existence of temporary differences on initial recognition of the asset or liability, as the initial recognition exception does not apply to transactions that give rise to equal taxable and deductible temporary differences. Among the applicable transactions are the recording of (i) right-of-use assets and lease liabilities; (ii) provisions for dismantling, restoration or similar liabilities, and the corresponding amounts recognized as part of the cost of the related asset, when on the date of initial recognition, they are not relevant for tax purposes. This amendment applies retrospectively. • Amendments to IAS 12 - International Tax Reform - Second Pillar Model Rules. These changes come as part of the implementation of the OECD's Global Anti-Base Erosion ("Globe") rules, which may have significant impacts on the calculation of deferred taxes that are difficult to estimate at the time these changes were issued. These amendments introduce a temporary exception to the accounting of deferred taxes arising from the application of the model rules of the second pillar of the OECD, and additionally establish new specific disclosure requirements for the affected entities. These standards and amendments had no material impact on the Group's consolidated financial statements. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 194 The following standards, interpretations, amendments and revisions, with mandatory application in future financial years, have been endorsed by the European Union up to the date of approval of these financial statements: • Amendments to IAS 1 - Presentation of financial statements - Classification of current and non-current liabilities. This amendment aims to clarify the classification of liabilities as current or non-current balances depending on the rights an entity has to defer their payment at the end of each reporting period. The classification of liabilities is not affected by the entity's expectations (the assessment should determine whether a right exists but should not consider whether or not the entity will exercise that right), or by events occurring after the reporting date, such as non- compliance with a covenant. However, if the right to defer settlement for at least twelve months is subject to certain conditions being met after the balance sheet date, these criteria do not affect the right to defer settlement for the purpose of classifying a liability as current or non-current. This amendment also includes a new definition of "settlement" of a liability and is of retrospective application. • Amendments to IFRS 16 - Lease liabilities in sale and leaseback transactions. This amendment to IFRS 16 introduces guidance on the subsequent measurement of lease liabilities related to sale and leaseback transactions that qualify as a "sale" under the principles of IFRS 15, with greater impact when some or all of the lease payments are variable lease payments that do not depend on an index or a rate. When subsequently measuring lease liabilities, seller- lessees should determine "lease payments" and "revised lease payments" in such a way that they do not recognize gains/(losses) in relation to the right of use they retain. This amendment is retrospective. The Group did not early apply any of these standards in the financial statements for the financial year ended on 31 December 2023. No significant impacts are expected on the financial statements as a result of their adoption. The following standards, interpretations, amendments and revisions, with mandatory application in future financial years, have not, as of the date of approval of these financial statements, been endorsed by the European Union: • Amendments to IAS 7 and IFRS 7 - Disclosures: Supplier financing arrangements. These amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, aim to clarify the characteristics of a supplier financing arrangement and introduce additional disclosure requirements when such arrangements exist. The disclosure requirements are intended to help users of financial statements understand the effects of supplier financing arrangements on the entity's liabilities, cash flows and exposure to liquidity risk. The amendments come into force for the period beginning on or after January 1, 2024. Early adoption is permitted, but must be disclosed. • Amendments to IAS 21 - The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability. This amendment aims to clarify how to assess the exchangeability of a currency, and how the exchange rate should be determined when it is not exchangeable for a long period. The amendment specifies that a currency should be considered exchangeable when an entity is able to obtain the other currency within a period that allows for normal administrative management, and through an exchange or market mechanism in which an exchange transaction creates enforceable rights and obligations. If a currency cannot be exchanged for another currency, an entity must estimate the exchange rate at the measurement date of the transaction. The objective is to determine the exchange rate that would be applicable on the measurement date for a similar transaction between market participants. The amendments also state that an entity may use an observable exchange rate without making any adjustment. The amendments come into force for the period beginning on or after January 1, 2025. Early adoption is permitted, however the transition requirements applied must be disclosed. These standards have not yet been endorsed by the European Union and, as such, were not applied by the Group in financial year ended on 31 December 2023. No significant impacts are expected on the financial statements as a result of their adoption. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 195 2.2. Bases of Consolidation Controlled companies Controlled companies were consolidated by the full consolidation method. Control is deemed to exist when the Group is exposed or has rights, because of their involvement, to a variable return of the entity's activities, and has capacity to affect this return through the power over the entity. Namely, when the Company directly or indirectly holds a majority of the voting rights at a General Meeting of Shareholders or has the power to determine the financial and operating policies. In situations where the Company has, in substance, control of other entities created for a specific purpose, although it does not directly hold equity in them, such entities are consolidated by the full consolidation method. The entities in these situations are listed in Annex A). The interest of third parties in the equity and net profit of such companies’ income presented separately in the consolidated statement of financial position and in the consolidated statement, respectively, under the item “Non- controlling Interests” (Note 24). The identifiable acquired assets and the liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the acquisition date, irrespective of the existence of non-controlled interests. The excess of acquisition cost over the fair value of the Group’s share of identifiable acquired assets and liabilities is stated in Goodwill. When the acquisition cost is less than the fair value of the identified net assets, the difference is recorded as a gain in the income statement in the period in which the acquisition occurs. The non-controlling interests are initially recognized as their proportion of the fair value of the identifiable assets and liabilities. On the acquisition of additional equity shares in companies already controlled by the Group, the difference between the share of capital acquired and the corresponding acquisition value is recognized directly in equity. When an increase in position in the capital of an associated company results in the acquisition of control, with the latter being included in the consolidated financial statements by the full consolidation method, the share of the fair values assigned to the assets and liabilities, corresponding to the percentages previously held, is stated in the income statement. The directly attributable transaction costs are recognized immediately in profit or loss. When the Group loses control over a controlled entity, the assets and liabilities of that entity, and any non- controlling interests and other components recognized in equity, are derecognized. Any resulting gain or loss is recognized in the income statement. Any interest retained in the entity is measured at fair value when control is lost. The results of companies acquired or sold during the year are included in the income statements from the date of obtaining control or until the date of disposal, respectively. Intercompany transactions, balances, unrealized gains on transactions and dividends distributed between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction shows evidence of impairment of the transferred asset. When necessary, adjustments are made to the financial statements of controlled companies in order to align their accounting policies with those of the Group. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 196 Jointly controlled companies A The classification of investments as jointly controlled companies is determined based on the existence of shareholder agreements, which show and regulate the joint control. Financial investments of jointly controlled companies (Annex C)) are stated by the equity method. Under this method, financial investments are adjusted periodically by an amount corresponding to the share in the net profits of jointly controlled companies, as a contra entry in “Losses / (gains) of affiliated companies” in the income statement before financial results and taxes. Direct changes in the post-acquisition equity of jointly controlled companies are recognized as the value of the shareholding as a contra entry in reserves, in equity. Additionally, financial investments may also be adjusted for recognition of impairment losses. Any excess of acquisition cost over the fair value of identifiable net assets and liabilities (goodwill) is recorded as part of the financial investment of jointly controlled companies and subject to impairment testing when there are indicators of loss of value. When the acquisition cost is less than the fair value of the identified net assets, the difference is recorded as a gain in the income statement in the period in which the acquisition occurs. Losses in jointly controlled companies, which exceed the investment made in them, are not recognized, except when the Group has entered into undertakings with that entity. Dividends received from these companies are recorded as a reduction in the value of the financial investments. Associated companies An associated company is a company in which the Group exercises significant influence through participation in decisions about its financial and operating policies, but in which does not have control or joint control. Any excess of the acquisition cost of a financial investment over the fair value of the identifiable net assets is recorded as goodwill and is added to the value of the financial investment and its recovery is reviewed annually or whenever there are indications of possible loss of value. When the acquisition cost is less than the fair value of the identified net assets, the difference is recorded as a gain in the statement of comprehensive income in the period in which the acquisition occurs. Financial investments in associated companies (Annex B)) are stated by the equity method. Under this method, financial investments are adjusted periodically by an amount corresponding to the share in the net profits of associated companies, as a contra entry in “Losses / (gains) of affiliated companies” in the income statement. Direct changes in the post-acquisition equity of associated companies are recognized as the value of the shareholding as a contra entry in reserves, in equity. Additionally, financial investments may also be adjusted for recognition of impairment losses. Losses in associated companies, which exceed the investment made in them, are not recognized, except when the Group has entered undertakings with that associated company. Dividends received from these companies are recorded as a reduction in the value of the financial investments. Holdings in entities without significant influence Investments made by the Group in entities where it does not have significant influence are initially recorded at cost and subsequently measured at fair value through profit or loss. These investments are presented under "Other financial assets non-current" in the statement of financial position and changes in fair value are recorded against "Net losses / (gains) of affiliated companies" in the income statement. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 197 Balances and transactions between Group companies Balances and transactions as well as unrealized gains between Group companies, and between them and the parent company, are eliminated in the consolidation. The part of unrealized gains arising from transactions with associated companies or jointly controlled companies attributable to the Group is eliminated in the consolidation. Unrealized losses are similarly eliminated except when they show evidence of impairment of the transferred asset. 2.3. Accounting policies 2.3.1. Segment reporting As stipulated in IFRS 8, the Group presents operating segments based on internally produced management information (Note 6). Operating segments are reported consistently with the internal management information model provided to the chief operating decision maker of the Group, who is responsible for allocating resources to the segment and for assessing its performance, and for taking strategic decisions. 2.3.2. Classification of the statement of financial position and income statements The Group presents assets and liabilities in the financial statements based in the current and non-current classification. An asset is classified as current when: • The asset is expected to be realized, sold or consumed in its normal operational cycle; • If the asset is held, essentially, for negotiation purposes; • The asset is expected to be realized 12 months after reported; • The asset is a cash or a cash equivalent, unless its trade or use is limited to settle a liability during, at least, 12 months after reporting; A liability is classified as current when: • The liability is expected to be settled in its normal operational cycle; • The liability is held, essentially, for negotiation purposes; • The liability is expected to be settled in a 12-month period after reported; • There is no unconditional right to differ the liability settlement during, at least, 12 months after reported. The remaining assets and liabilities of the Group are classified as non-current. Realizable assets and liabilities due in less than one year from the date of the statement of financial position are classified as current in assets and liabilities, respectively. In accordance with IAS 1, "Integration costs", "Losses / (gains) on disposal of assets" and "Other non-recurring costs / (gains)"reflect unusual costs and revenues, that should be disclosed separately from the usual cost and revenues lines, in order to avoid distortion of the financial information from regular operations and be consistent with the way the group's financial performance is analyzed and monitored by management. These unusual costs and revenues may not be comparable to similarly titled measures used by other companies. When determining whether an event or transaction is unusual, management considers both quantitative and qualitative factors. Examples of unusual costs and revenues are business restructuring programs and respective compensation; regulatory affairs and lawsuits; extraordinary impairment of assets due to the reduction of their recoverable amount, sale of non-current assets, among others. If costs and revenues meet these criteria, which are applied consistently from year to year, they are treated as unusual and presented in the specific lines above. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 198 2.3.3. Tangible assets Tangible assets are stated at acquisition cost, less accumulated depreciation and impairment losses, when applicable. Acquisition cost includes, in addition to the purchase price of the asset: (i) costs directly attributable to the purchase; and (ii) the estimated costs of decommissioning and removal of the assets and restoration of the site, which in Group applies to the cinema operation business, telecommunication towers and offices (Note 8). Estimated losses resulting from the replacement of equipment before the end of its useful life due to technological obsolescence are recognized by a deduction, from the corresponding asset as a contra entry in profit and loss. The costs of current maintenance and repairs are recognized as a cost when they are incurred. Significant costs incurred on renovations or improvements to the asset are capitalized and depreciated over the corresponding estimated payback period when it is probable that there will be future economic benefits associated with the asset and when these can be measured reliably. The gains and losses from the disposal of tangible assets, determined by the difference between the sale value and the net book value, are recognized in the item “Losses/ (gains) on disposal of assets”. Depreciations Tangible assets are depreciated from the time they are completed or ready to be used. These assets, less their residual value, are depreciated by the straight-line method, in twelfths, from the month in which they become available for use, according to the useful life of the assets defined as their estimated utility. The depreciation rates used correspond to the following estimated useful lives: 2022 2023 (Years) (Years) Buildings and other constructions 2 - 50 2 - 50 Technical equipment: Network Installations and equipment 7 - 40 7 - 40 Terminal equipment 2 - 8 1 - 5 Other technical equipment 1 - 16 1 - 16 Transportation equipment 3 - 4 3 - 4 Administrative equipment 2 - 10 2 - 10 Other tangible assets 4 - 8 4 - 8 2.3.4. Non-current assets held for sale and discontinued operations The non-current assets (or discontinued operations) are classified as held for sale if the respective value is realizable through a sale transaction instead of its continued use. This situation is considered to happen only when: i) the sale is very likely to happen and the asset is immediately available to be sold in its current conditions, ii) the Company made the commitment to sell, and iii) the sale is expected to take place in a period of 12 months. In this case, the non-current assets are measured by the lower amount between accounting value, or the respective fair value deducted from the costs of the sale. The non-current assets held for sale and discontinued operations are measured at the lower of two: i) the accounting value and, ii) the fair value deducted from the costs of the sale. The costs of the sale are the incremental costs directly assigned to the disposal of the asset (or group to be disposed), excluding financial costs and income tax expenses. From the moment that tangible assets are considered to be “held for sale” the inherent depreciation of those assets’ ceases, and the assets are determined as non-current asset held for sale. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 199 A discontinued operation unit is a component of and entity that was disposed or is classified as held for sale and: • It represents an important line of business or geographical area separated from operating units; • It is an integrant part of a single coordinated plan to dispose an important line of business or geographical area separated from the operational units or; • It is a subsidiary acquired exclusively for resale. Discontinued operations are excluded from the continued operations results and are presented in separate as an amount of net income after taxes from discontinued operations on the financial statement of income by nature. 2.3.5. Intangible assets Intangible assets are stated at acquisition cost, less accumulated amortization and impairment losses, when applicable. Recognized only when they generate future economic benefits for the Group and when they can be measured reliably. Intangible assets consist mainly of goodwill, telecom and software licenses, content utilization rights and other contractual rights. Group companies periodically carry out an impairment assessment of intangible assets in-progress. This impairment assessment is also carried out whenever events or changes in circumstances indicate that the amount at which the asset is recorded may not be recoverable. When such indications exist, the Group calculates the recoverable value of the asset in order to determine the existence and extent of the impairment loss. Goodwill Goodwill represents the excess of acquisition cost over the net fair value of the assets, liabilities, and contingent liabilities of a subsidiary, jointly controlled company or associated company at the acquisition date, in accordance with IFRS 3. Goodwill is recorded as an asset and included in “Intangible assets” (Note 9) in the case of a controlled company or in the case in which the excess of cost has been originated by a merger, and in “Financial investments in group companies” (Note 12) in the case of a jointly controlled company or an associated company. Goodwill is not amortized and is subject to impairment tests at least once a year, on a specified date, and whenever there are changes in the test’s underlying assumptions at the date of the statement of financial position which may result in a possible loss of value. Any impairment loss is recorded immediately in the income statement in “Impairment losses” and is not liable to subsequent reversal. For the purposes of impairment tests, goodwill is attributed to the cash-generating units to which it is related (Note 9), which may correspond to the business segments in which the Group operates, or a lower level. Internally generated intangible assets Internally generated intangible assets, including expenditure on research, are expensed when they are incurred. Research and development costs are only recognized as assets when the technical capability to complete the intangible asset is demonstrated and when it is available for use or sale. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 200 Industrial property and other rights Assets classified under this item relate to the rights and licenses acquired under contract by the Group to third parties and used in realizing the Group's activities, and include: • Telecom licenses; • Software licenses; • Content utilization rights; • Other contractual rights . Software-as-a-Service (SaaS) agreements are service contracts in which NOS has the right to access a particular Cloud application/software for a specified period of time, contracted with the supplier. The costs incurred with the configuration, customization and ongoing access to the Cloud application/software are recognized as operating expenses when the services are received. Costs incurred with the development, improvement or modification of existing applications/software at NOS, even if interconnected with SaaS agreements, and which meet the recognition criteria, are recorded as intangible assets. The content exploration rights are recorded in the consolidated statement of financial position, as intangible assets, when the following conditions are fulfilled: (i) there is control over the content, (ii) the Company has the right to choose the way to explore the content, and (iii) it is available for exhibition. The conclusion of contracts relating to sports contents, which are not immediately available, originates rights that are initially classified as contractual commitments. In the specific case of broadcasting rights of sports competitions, these are recognized as assets when the necessary conditions to organize each sports competition are present, which occurs in the homologation date of the participating teams in the competition that is being held in the sports season to be initiated, by the organizing entity, taking into consideration that it is from that date that the conditions for the recognition of an asset are present, namely, the unequivocal attainment of the exploration rights of the games of the stated season. In this situation, the stated rights are recognized in the income statement in “Depreciation, amortization, and impairment losses”, by the linear method, by twelfths, starting from the beginning of the month in which they are available for use. Resulting from agreements concluded for the cession of the exclusive rights to exploit sports content, and as it is permitted by IAS 1, since 2017, NOS presents the net assets and liabilities of the values ceded to other operators, considering that this compensation best reflects the substance of the transactions. When the recognized intangible assets involve payments in periods above 1 year, the intangible asset corresponds to the present value of those payments. Amortization The useful lives of the intangible assets are classified as finite or indefinite. Intangible assets with finite useful lives are amortized over their useful lives, with an impairment analysis carried out whenever there are indications that the amount at which the intangible asset is mentioned in the financial statements may not be recovered. The amortization period and the amortization method of an intangible asset with a finite useful life are reviewed periodically. Any changes in the expected useful life or in the expected pattern of future consumption of the economic benefits incorporated in the asset, are considered in the modification over the period or method of amortization and, if verified, are treated as changes in accounting estimates. The amortization costs of intangible assets with finite lives are recognized in the income statement. The assets with finite useful life are amortized by the straight-line method, in twelfths, from the beginning of the month in which they become available for use. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 201 The amortization rates used correspond to the following estimated useful lives: 2022 2023 (Years) (Years) Telecom licenses 20 - 33 20 - 33 Software licenses 1 - 8 1 - 8 Period of the Period of the Content utilization rights contract contract Other 1 - 20 1 - 20 The intangible assets with indefinite useful lives are not amortized, and impairment assessments are performed annually. Accordingly, the useful life of an intangible asset that is not being amortized is periodically reviewed to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If not, the change in the assessment of the useful life from indefinite to finite is accounted for as a change in an accounting estimate. An intangible asset is unrecognized in its disposal moment, or when no future economic benefits from its use or disposal are expected. The gain or loss related with an unrecognized intangible asset (determined as the difference between the net income of its disposal, if there is any, and the carrying amount of that same asset) is recognized in the financial statement of income by nature. 2.3.6. Contract costs This item corresponds to costs incurred in attracting customers and costs associated with fulfilling a contract that are capitalized whenever they meet all of the following criteria: • they are related to an existing contract or a specific future contract; • generate or increase resources that will be used in the future; • costs are expected to be recovered; and • they are not already covered by the scope of another standard, such as inventories, tangible or intangible assets. These costs are recognized for the period expected to fulfill the contract (2 to 4 years). The costs of attracting customers are essentially: • Commissions paid to third parties with the acquisition of new contracts / new customers; • Commissions paid to third parties for upgrading the services provided; • Commissions paid to third parties for renewal of loyalty of services and offers to customers; and • Several commissions with revenue collection. The costs associated with fulfilling the contracts are essentially: • Costs incurred with the portability of mobile / fixed numbers of other operators; • Variable costs, variables, incurred with the activation of services contracted by customers. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 202 2.3.7. Impairment of non-current assets, excluding goodwill Group companies periodically carry out an impairment assessment of non-current assets. This impairment assessment is also carried out whenever events or changes in circumstances indicate that the amount at which the asset is recorded may not be recoverable. When such indications exist, the Group calculates the recoverable value of the asset to determine the existence and extent of the impairment loss. The recoverable value is estimated for each asset individually or, if that is not possible, assets are grouped at the lowest levels for which there are identifiable cash flows to the cash-generating unit to which the asset belongs. Each of the Group’s businesses is a cash-generating unit, except for the assets allocated to the cinema exhibition business, which are grouped into regional cash-generating units. The recoverable amount is calculated as the higher of the net sale price and the current use value. The net sale price is the amount that would be obtained from the sale of the asset in a transaction between independent and knowledgeable entities, less the costs directly attributable to the sale. The current use value is the current value of the estimated future cash flows resulting from continued use of the asset or of the cash-generating unit. When the amount at which the asset is recorded exceeds its recoverable value, it is recognized as an impairment loss. The reversal of impairment losses recognized in previous years is recorded when there are indications that these losses no longer exist or have decreased. The reversal of impairment losses is recognized in the statement of comprehensive income in the year in which it occurs. However, an impairment loss can only be reversed up to the amount that would be recognized (net of amortization or depreciation) if no impairment loss had been recorded in previous years. 2.3.8. Financial assets Financial assets are recognized in the statement of financial position of the Group on the trade or contract date, which is the date on which the Group undertakes to purchase or sell the asset. Initially, apart from commercial accounts receivable, financial assets are recognized at fair value plus directly attributable transaction costs, except for assets at fair value through income in which transaction costs are immediately recognized in income. Trade accounts receivable, at the initial time, are recognized at their transaction price, as defined in IFRS 15. The financial assets are derecognized when: • the Group’s contractual rights to receive their cash flows expire; • the Group has substantially transferred all the risks and benefits associated with their ownership; or • although it retains part but not substantially all of the risks and benefits associated with their ownership, the Group has transferred control of the assets. The financial assets and liabilities are offset and shown as a net value when, and only when, the Group has the right to offset the recognized amounts and intends to settle for the net value. The Group classifies its financial assets into the following categories: financial assets at fair value through profit or loss, financial assets measured at amortized cost, financial assets at fair value through other comprehensive income. Its classification depends on the entity's business model to manage the financial assets and the contractual characteristics in terms of the cash flows of the financial asset. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 203 Financial assets at fair value through profit and loss This category includes financial derivatives and equity instruments that the Group has not classified as financial assets through other comprehensive income at the time of initial recognition. This category also includes all financial instruments whose contractual cash flows are not exclusively capital and interest. Financial assets at fair value through results are presented in the financial statements at fair value, the net changes being known in the income statement. This category of assets includes derivative instruments and investments in listed companies for which the Company has not classified them as financial assets at fair value through other comprehensive income. Dividends from investments in listed companies are recognized as income in the income statement when the respective right of receipt is formalized. Gains and losses resulting from changes in the fair value of assets measured at fair value through profit or loss are recognized in results in the year in which they occur under “Losses / (gains) on financial assets”, including the income from interest and dividends. Financial assets at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income are those that are part of a business model whose objective is achieved through the collection of contractual cash flows and the sale of financial assets, being that these contractual cash flows are only capital and interest reimbursement on the capital in debt. Financial assets measured at amortized cost Financial assets measured at amortized cost are those that are included in a business model whose purpose is to hold financial assets in order to receive the contractual cashflows, being that these contractual cash flows are only capital reimbursement and interest payments on the capital in debt. Financial assets measured at amortized cost are subsequently measured using the effective tax rate method and subject to impairment. Income and costs are recognized in the income statement when the asset is derecognized, updated or an impairment is recognized over it. Financial assets measured at the Company's amortized cost include accounts receivable and loans granted to related parties. Cash and equivalents The amounts included in “Cash and cash equivalents” correspond to the amounts of cash, bank deposits, term deposits and other investments with maturities of less than three months which may be immediately realizable and with a negligible risk of change of value. For the purposes of the statement of cash flows, “Cash and cash equivalents” also includes bank overdrafts included in the statement of financial position under “Borrowings” (when applicable). 2.3.9. Financial liabilities and equity instruments Financial liabilities and equity instruments are classified according to their contractual substance irrespective of their legal form. Equity instruments are contracts that show a residual interest in the Group’s assets after deducting the liabilities. The equity instruments issued by Group companies are recorded at the amount received, net of the costs incurred in their issue. Financial liabilities are recognized only when extinguished, i.e., when the obligation is settled, cancelled, or extinguished. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 204 In accordance with IFRS 9, financial liabilities are classified as subsequently measured at amortized cost, except for: • Financial liabilities at fair value through profit or loss. These liabilities, including derivatives that are liabilities, should subsequently be measured at fair value; • Financial liabilities that arise when a transfer of a financial asset does not meet the conditions for derecognition or when it is applied the continued involvement approach; • Financial guarantee contracts; • The commitments to grant a loan at a lower interest rate than the market; • The recognized contingent consideration by a buyer in a concentration of business activities to which IFRS 3 applies. Such contingent consideration shall be subsequently measured at fair value, with changes recognized in profit or loss. Financial liabilities of the Group include borrowings, accounts payable and derivative financial instruments. 2.3.10. Impairment of financial assets At the date of each financial position statement, the Group analyses and recognizes expected losses on its debt securities, loans and accounts receivable. The expected loss results from the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive, discounted at the original effective interest rate. The objective of this impairment policy is to recognize expected credit losses over the respective duration of financial instruments that have undergone significant increases in credit risk since initial recognition, assessed on an individual or collective basis, considering all reasonable and sustainable information, including prospects. If, at the reporting date, the credit risk associated with a financial instrument has not increased significantly since the initial recognition, the Group measures the provision for losses relating to that financial instrument by an amount equivalent to the expected credit losses within a period of 12 months. For receivables and assets resulting from contracts under IFRS 15, the Group adopts the simplified approach when calculating expected credit losses. As a result, the Group does not monitor changes in credit risk, recognizing instead impairment losses based on the expected credit loss on each reporting date. The Group established a provisions’ matrix where it presents an impairment loss criterion based on the history of credit losses, adjusted by specific prospective factors for the clients and the economic environment. 2.3.11. Derivative financial instruments Initial and subsequent recognition The Group uses derivative financial instruments, such as exchange rate forward contracts, interest rate swaps, to cover its exchange rate risks, interest, respectively. Such derivative financial instruments are initially recorded at fair value on the date the derivative is contracted and are subsequently measured at fair value. Derivatives are presented in assets when their fair value is positive and in liabilities when their fair value is negative. In terms of hedge accounting, hedges are classified as: • Fair value hedge when the purpose is to hedge the exposure to fair value changes of a registered asset or liability or an unregistered Groups’ commitment; • Cash flow hedge when the purpose is to hedge the exposure to cash flow variability arising from a specific risk associated with the whole or a component of a registered asset or liability or an anticipated highly probable occurrence or exchange risk associated with an unregistered Groups’ commitment; • Coverage of a net investment in a foreign operational unit. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 205 NOS Group uses derivative financial instruments with fair value and cash flow hedges. At the beginning of the hedge relationship, the Group formally designates and documents the hedging relationship for which hedge accounting is intended to apply as well as the management and strategy purpose of such hedge. The documentation includes the identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all the following effectiveness requirement: • There is an economic relationship’ between the hedged item and the hedging instrument; • The effect of credit risk does not “dominate the value changes” that result from that economic relationship; and • The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group hedges and the quantity of the hedging instrument that the Group actually uses to hedges that quantity of hedged item. Hedges that meet all the quantifying criteria for hedge accounting are accounted for, as described below: Fair value hedges The change in the fair value of a hedging instrument is recognized in the statement of profit or loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognized in the statement of profit or loss. For fair value hedges relating to items carried at amortized cost, any adjustment to carrying value is amortized through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortization may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognized, the unamortized fair value is recognized immediately in profit or loss. When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset or liability with a corresponding gain or loss recognized in profit or loss. Cash flow hedges The effective portion of the gain or loss on the hedging instrument is recognized in OCI in the cash flow hedge reserve, while any ineffective portion is recognized immediately in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The Group uses forward contracts of: • currency contracts for its exposure to foreign currency risk in forecast transactions and firm commitments; • interest rates to cover the risk of volatility of the interest rates; • own shares contracts for its exposure to volatility in own shares to be distributed within the scope of share incentive scheme. The ineffective portion relating to foreign currency contracts is recognized as “Net foreign exchange losses/(gains)”, the ineffective portion relating to interest rates is recognized as “Financial costs” and the ineffective portion relating to own shares contracts is recognized as “Wages and salaries”. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 206 On the financial year ended on 31 December 2023, the Group did not change the recognition method. The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the amount accumulated in equity is removed from the separate component of equity and included in the initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not be recognized in OCI for the period. This also applies where the hedged forecast transaction of a non-financial asset or non-financial liability subsequently becomes a Group’s commitment for which fair value hedge accounting is applied. For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss. If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature of the underlying transaction as described above. 2.3.12. Inventories Inventories, which mainly include mobile phones, customer terminal equipment, DVDs, and content broadcasting rights, are valued at the lower of their cost or net realizable value. The acquisition cost includes the invoice price, freight, and insurance costs, using the Weighted Average Cost as the method of costing goods sold. Inventories are adjusted for technological obsolescence, as well as for the difference between the purchase cost and the net realizable value, whichever is the lower, and this reduction is recognized directly in the income statement. The net realizable value corresponds to the normal sale price less restocking costs and selling costs. The differences between the cost and the corresponding net realizable value of inventories, when this is less than the cost, are recorded as operating costs in “Cost of goods sold”. Inventories in transit, since they are not available for consumption or sale, are separated out from other inventories and are valued at their specific acquisition cost. The signing of contracts related with sports content originates rights that are initially classified as contractual commitments. The content broadcasting rights are recorded in the consolidated statement of financial position, as Inventories, in the event of the nonexistence of full right over the way of exploration of the asset, by the respective value of cost or net realizable value, whenever it is lower, when programmatic content has been received and is available for exhibition or use, according to contractual conditions, without any production or change, given that the necessary conditions for the organization of each sports competition are present, which occurs in the homologation date of the participating teams in the competition that is being held in the sports season to be initiated, by the organizing entity. The stated rights are recognized in the income statement in “Direct costs: Exhibition costs”, on a systematic basis given the pattern of economic benefits obtained through their commercial exploration. No balances of content rights are registered in the Inventories caption. Due to the agreement between the three national operators of reciprocal availability, for several sports seasons (collaborative arrangement), of sports content (national and international) owned by them, (Note 43.2), NOS considered the recognition of the costs, excluding those divided by the remaining operators, on a systematic basis, given the pattern of economic benefits obtained through their commercial exploration. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 207 2.3.13. Subsidies Subsidies are recognized at fair value when there is reasonable assurance that they will be received and that the Group companies will comply with the requirements for their award. Operating subsidies, mainly for employee training, are recognized in the statement of comprehensive income by deduction from the corresponding costs incurred. Investment subsidies, which were recorded as deferred income and recognized as income, from 2023 onwards, are deducted from tangible and intangible fixed assets to the extent of the associated expenses and are recognized in the income statement (depreciation and amortization) on a systematic and rational basis over the useful life of the asset. 2.3.14. Provisions and contingent liabilities Provisions are recognized when: • there is a present obligation arising from past events and it is likely that in settling that obligation, the expenditure of internal resources will be necessary; and • the amount or value of such obligation can be reasonably estimated. When one of the above conditions is not met, the Group discloses the events as a contingent liability unless the likelihood of an outflow of funds resulting from this contingency is remote, in which case they are not disclosed. Provisions for legal procedures taking place against the Group are made in accordance with the risk assessments carried out by the Group and by their legal advisers, based on success rates. Provisions for restructuring are only recognized when the Group has a detailed, formal plan, which identify the main features of the restructuring program, and after these facts have been reported to the entities involved. Provisions for dismantling costs, removal of assets and restoration of the site are recognized when the assets are installed, in line with the best estimates available at that date. The amount of the provisioned liability reflects the effects of the passage of time and the corresponding financial indexing is recognized in results as a financial cost. Obligations arising from onerous contracts are recorded and measured as provisions. An onerous contract exists when the Company is an integral part of a contract, whose compliance has associated costs directly associated with the contract (both incremental costs and an allocation of costs directly related to the contract) that exceed future economic benefits. Provisions for potential future operating losses are not covered. Contingent liabilities are not recognized in the financial statements, unless the exception provided under IFRS 3 business combination, and are disclosed whenever there is a good chance to shed resources including economic benefits. Contingent assets are not recognized in the financial statements, being disclosed when there is a likelihood of a future influx of financial resources. Provisions are reviewed and brought up to date at the date of the statement of financial position to reflect the best estimate at that time of the obligation concerned. 2.3.15. Rights of use and leases A lease is defined as a contract, or part of a contract, that transfers the right to use a good (the underlying asset) for a period in exchange for a value. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 208 At the beginning of each contract, it is evaluated and identified if it is or contains a lease. This assessment involves an exercise of judgement as to whether each contract depends on a specific asset if NOS obtains substantially all the economic benefits from the use of that asset and whether NOS has the right to control the use of the asset. All contracts that constitute a lease are accounted for based on the on-balance model. At the commencement date of the lease, NOS recognizes the liability related to lease payments (lease liability) and the asset representing the right to use the underlying asset during the lease period (the right of use or "ROU"). The cost of interest on the lease liability and the depreciation of the ROU are recognized separately. Lease liability is remeasured at the occurrence of certain events (such as a change in the lease period, a change in future payments that result from a change in the reference rate or rate used to determine such payments). This remeasurement of the lease liability is recognized as an adjustment in the ROU. The estimated costs of dismantling, removal of assets and restoration of the site related with leases are recognized in tangible assets with works carried out (Note 2.3.3). 2.3.15.1. Rights of use The Group recognizes the right to use the assets at the start date of the lease (that is, the date on which the underlying asset is available for use). The right to use the assets is recorded at acquisition cost, deducted from accumulated depreciation and impairment losses and adjusted for any new measurement of lease liabilities. The cost of the ROU of the assets includes the recognized amount of the lease liability, any direct costs incurred initially, and payments already made prior to the initial rental date, less any incentives received. Unless it is reasonably certain that the Group obtains ownership of the leased asset at the end of the lease term, the recognized right of use of the assets is depreciated on a straight-line basis over the shorter of its estimated useful life and the term of the lease. Rights of use are subject to impairment. The rights of used of assets are depreciated using the straight-line method by the shortest period between length of the contract and its expected useful life. If at the end of the leasing contract the asset is transferred to the company, or if the cost reflects the possibility of exercising the call option, the depreciation is calculated according to the estimated useful life of the asset. 2.3.15.2. Liabilities with leases At the start date of the lease, the Group recognizes the liabilities measured at the present value of the future payments to be made until the end of the lease. Lease payments include fixed payments (including fixed payments on the substance), deducted of any incentives to be received, variable payments, dependent on an index or rate, and expected amounts to be paid under residual value guarantees. The lease payments also include the exercise price of a call option if it is reasonably certain that the Group will exercise the option, and penalties for termination of the lease if it is reasonably certain that the Group will terminate the lease. Variable payments that do not depend on an index or a rate are recognized as an expense in the period in which the event giving rise to them occurs. To calculate the present value of the lease payments, the Group uses the incremental loan rate at the start date of the lease if the implied interest rate is not readily determinable. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 209 After the start date of the lease, the value of the lease liability is increased to reflect the increase in interest and reduces by the payments made. In addition, the book value of the lease liability is remeasured if there is a change, such as a change in the lease term, fixed payments or the purchase decision of the underlying asset. 2.3.16. Income tax NOS is covered by the special tax regime for groups of companies, which covers all the companies in which it directly or indirectly owns at least 75% of the share capital and which simultaneously are resident in Portugal and subject to Corporate Income Tax (IRC). The remaining subsidiaries not covered by the special tax regime for groups of companies are taxed individually based on their respective taxable incomes and the applicable tax rates. Income tax is stated in accordance with the IAS 12 criteria. In calculating the cost relating to income tax for the period, in addition to current tax, allowance is also made for the effect of deferred tax calculated in accordance with the liability method, taking into account the temporary differences resulting from the difference between the tax basis of assets and liabilities and their values as stated in the consolidated financial statements, and the tax losses carried forward at the date of the statement of financial position. The deferred income tax assets and liabilities were calculated based on the tax legislation currently in force or of legislation already published for future application. Deferred income tax assets are recognized for all the deductible temporary differences until it is likely that a taxable profit is obtained to which the deductible temporary difference may be used, unless the deferred income tax asset results from the initial recognition of an asset or liability in a transaction which: • Is not a concentration of business activities; • At the moment of the transaction, it does not affect neither the accounting profit nor the taxable profit (fiscal loss); • With respect to deductible temporary differences arising from investments in subsidiaries, branches and associates and interests in joint arrangements, deferred income tax assets are recognized only to the extent that the temporary difference will revert in the foreseeable future and taxable profit against which the temporary difference can be used will be available. As stipulated in the above standard, deferred income tax assets are recognized only when there is reasonable assurance that these may be used to reduce future taxable profit, or when there are deferred income tax liabilities whose reversal is expected to occur in the same period in which the deferred income tax assets are reversed. At the end of each period an assessment is made of deferred income tax assets, and these are adjusted in line with the likelihood of their future use. The amount of tax to be included, either in current tax or in deferred tax resulting from transactions or events recognized in equity accounts, is recorded directly under those items and does not affect the results for the period. In a business combination, the deferred tax benefits acquired are recognized as follows: • The deferred tax benefits acquired recognized in the measurement period of one year after the date of merger and that result from new information about facts and circumstances that existed at the date of acquisition are recorded against the goodwill-carrying amount related to the acquisition. If the goodwill-carrying amount is null, any remaining deferred tax benefits are recognized in the income statement. • All the other acquired deferred tax benefits performed are recognized in the income statement (when applicable, directly in shareholders' equity). Estimates to deal with uncertainties regarding the acceptance of a given tax treatment by the tax authorities are recognized as deferred tax liabilities. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 210 Pillar II The Council of the EU approved the Directive (EU) 2022/2523, of December 15, 2022 ("Directive"), on the guarantee of a worldwide minimum level of taxation for multinational enterprise groups and large domestic groups within the Union, commonly known as "Pillar II". Although Portugal has not met the deadline for transposing this Directive, it is estimated that this will happen in 2024. Considering the rules approved in the Directive and the best information available at the moment, NOS has carried out an assessment of the possible impacts of Pillar II for the NOS Group, and it is estimated that the group will benefit from the supplementary tax exclusion in the initial phase of international activity, provided for in Article 49 of the Directive, under the transitional regime, applicable for a period of 5 years (2024-2028). 2.3.17. Payment based in shares The benefits granted to employees under share purchase or share option incentive plans are recorded in accordance with the requirements of IFRS 2 – Share-based payments. In accordance with IFRS 2, since it is not possible to reliably estimate the fair value of the services received from employees, their value is measured by reference to the fair value of equity instruments in accordance with their share price at the grant date. The cost is recognized, linearly over the period in which the service is provided by employees, under the caption “Wages and salaries” in the income statement, with the corresponding increase in “Other reserves” in equity. The accumulated cost recognized at the date of each statement of financial position up to the vesting reflects the best estimate of the number of own shares that will be vested, weighted by the tire elapse between the grant and the vesting. The impact on the income statement each year corresponds to the accumulated cost valuation between the beginning and the end of the year. In turn, benefits granted based on shares but paid in cash lead to the recognition of a liability valued at fair value at the date of the statement of financial position. 2.3.18. Equity Share issue premium Issue of shares corresponds to premiums from the issuance or capital increases. According to Portuguese law, share premiums follow the treatment given to the "Legal reserve", that is, the values are not distributable, except in case of liquidation, but can be used to absorb losses after having exhausted all other reserves and to increase share capital. Own shares The own shares are recorded at acquisition cost as a deduction from equity. Gains or losses on the sale of own shares are recorded under "Other reserves". Legal reserve Portuguese commercial legislation requires that at least 5% of annual net profit must be appropriated to a legal reserve until it represents at least 20% of the share capital. This reserve is not distributable, except in case of liquidation, but can be used to absorb losses, after having exhausted all other reserves and to increase share capital. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 211 Other reserves and accumulated earnings Reserves for plans of medium-term incentive According to IFRS 2 - "Share-based payments", the responsibility with the medium-term incentive plans settled by delivery of own shares is recorded as credit under "Reservations for mid-term incentive plans" and such reserve is not likely to be distributed or used to absorb losses. Hedging reserves Hedging reserve reflects the changes in fair value of derivative financial instruments as cash flow hedges that are considered effective, and they are not likely to be distributed or be used to absorb losses. Own shares reserves The "Own shares reserves” reflect the value of the shares acquired and follows the same legal regime as the legal reserve. Other reserves and Retained results This item includes the results available for distribution to shareholders and earnings per fair value in financial instruments increases, financial investments and investment properties, which, in accordance with paragraph 2 of article 32 of the CSC, will only be available for distribution when the elements or rights that originated them are sold, exercised, terminated, or settled. Under Portuguese law, the amount of distributable reserves is determined according to the individual financial statements of the company prepared in accordance with IFRS. In addition, the increases resulting from the application of fair value through equity components, including its application through the net profit can only be distributed when the elements that originated them are sold, exercised liquidated or when the end their use, in the case of tangible assets or intangible assets. Dividends The company recognizes the liability, as well as its impact over the equity, associated with the responsibility to distribute dividends when it is approved by the shareholders. 2.3.19. Revenue The main types of revenue of NOS subsidiaries are as follows: • Revenues of Communications Services: • Cable/Satellite television, fixed broadband and fixed voice: The revenues from services provided using the fibre optic cable network result from: o Basic channel subscription packages that can be sold in a bundle with fixed broadband/fixed voice services; o premium channel subscription packages and S-VOD; o terminal equipment rental; o consumption of content (VOD); o traffic and voice termination; o service activation; 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 212 o sale of equipment, licensing and others; and o other additional services (ex: firewall, antivirus). • Mobile broadband and voice services: Revenues from mobile broadband Internet access services and mobile voice services result mainly from monthly subscriptions and/or usage of the Internet and voice service, as well as the traffic associated with the type chosen by the client. • Advertising revenue: Advertising revenues mainly derive from the attraction of advertising for Pay TV channels to which the Group has publicity rights and in cinemas. These revenues are recognized from when they are received, taken off any discounts given. • Film showings and distribution: Distribution revenue pertains to the distribution of films to film exhibitors not distributed by the Group, that are included in the film showings, whilst income from film showings mostly derive from cinema ticket sales and the product sales in the bars; the film showings revenue includes the revenue from ticket sales and bar sales respectively. • Revenue from distributing channel content: Revenue from distribution essentially includes the sale of DVDs, the sale of content and the distribution of television channels subscriptions to third parties and count from the time at which they are sold, shown, and made available for distribution to telecommunications operators, respectively. The television channels distribution by subscription to third parties consists in the transmission and retransmission of information, including, namely, the distribution of television emissions and radio broadcasting, owned and third partied owned, codified or not, as well as the addressed nature rendered services and data transmission. NOS is leading these activities since it: controls the channel exhibition, in its package of products disposes the power of pricing, the retribution corresponds to the service price and not to a mere commission and it is exposed to the credit risk of its customers. • Consultancy and datacenter management: information systems consultancy and datacenter management are the major services rendered by NOS Sistemas. • Insurance brokerage commissions: income from insurance sales commissions is obtained by NOS Mediação de Seguros. • Intelligent Alarm: the revenues obtained with the NOS | Securitas Intelligent Alarm include security solutions for people and property, which combine the professional monitoring of the Securitas Alarm Center with NOS latest technology. The Group's revenue is based on the five-step model established by IFRS 15: • Identification of the contract with the customer; • Identification of performance obligations; • Determining the price of the transaction; • Allocation of the price of the transaction to the performance obligations; and • Recognition of revenue. Thus, at the beginning of each contract, the NOS Group evaluates the promised goods or services and identifies, as a performance obligation, every promise of transfer to the customer of any distinct good or service (or package of goods or services). These promises in customer contracts may be express or implied, provided such promises create a valid expectation in the client that the entity will transfer a good or service to the customer, based on the entity's published policies, specific statements or usual business practices. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 213 The NOS Group has internally defined that a performance obligation corresponds to the promise of delivery of a good or service that can be used in an isolated/separated way by the customer and on which there is a clear perception of this good or service by the customer among the available in each contract. The main performance obligations are summarized as Sales of Mobile Phones, Telephones, Hotspots, DVD's, Movie Tickets, Licensing and Other Equipment and the Services Rendered of Mobile Internet Services, Fixed Internet, Mobile Phone, Landline Phone, Television, Consulting, Cloud/ IT Services, distribution of audio-visual rights among others. The provision of Set-top-boxes, routers, modems and other terminal equipment at the customers' home and respective installation and activation services were considered by the group as not corresponding to a performance obligation, since they are necessary actions to fulfil the promised performance obligation. In determining and allocating the transaction price of each performance obligation, NOS used stand-alone prices of the promised products and services at the time of entering into the agreement with the customer to distribute the amount expected to be received under the contract. The recognition of revenue occurs at the time of performance of each performance obligation. Revenue from selling equipment is included when the buyer takes on the risks and advantages of taking possession of goods and the value of the benefits are reasonably quantified. Revenue from telecom services subscriptions (TV, internet, mobile and fixed voice services bundle subscription, individually or as a bundle) is recognized linearly over the subscription period. Revenue from equipment rental is recognized linearly over the rental agreement, except in the case of instalment sales, which are accounted as credit sales. The Group attributes to its customers loyalty points in each call or recharge, that might be exchanged, over a limited period, for discounts in equipment purchase. In each reporting period, NOS recognizes the current liability with discounts to be awarded in the future. This responsibility is calculated based on the amount of points awarded and not yet used, discounted from the estimate of points that will not be used (based on the history of use) and valued based on the offer available at each time for the use of points (specific catalog). The recognition of liability configures a deferred income (until the date on which the points are definitively converted into benefits), which is recognized at the time of the use of the discount, as a revenue accrual. Revenue related with traffic, roaming, data usage, audiovisual content, and others is recognized when the service is rendered. The Group also offers various personalized solutions, particularly to its corporate customers in telecom management, access, voice, and data transmission services. These personalized solutions are also recognized when the service is rendered. Unless demanded or allowed by IFRS, the compensation of revenues and costs is not performed, namely, when it reflects the nature of the transaction or other event. The compensation of revenues and costs is performed in the following situations: • When the gross inflows from economic benefits do not result in equity increases to the Group, i.e., the amount charged to the customer is equal to the amount delivered to the partner. This situation is applicable to the revenue obtained by the invoicing special services operators, in these cases the amounts charged on account of the capital are not revenue; and 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 214 • When the counterpart is not a “customer” but a partner who shares the risks and benefits of developing a product or services in order for it to be commercialized. Thus, a counterpart of a contract will not be a customer if, for instance, the counterpart has hired from NOS to participate in an activity or process in which the parties in the contract share the risks and benefits instead of obtaining the Group’s ordinary activities result. These cases are designated collaborative arrangements. This situation is applicable to revenues from operators affected by the reciprocal availability agreement regarding broadcasting rights of sports content. Discounts granted to customers related with loyalty programmes are allocated to the entire retention contract to which the customer is committed to. Therefore, the discount is recognized as the goods and services made available to the customer. Amounts that have not been invoiced for are included based on estimates. The differences between the estimated amounts and the actual amounts, which are normally immaterial, are recorded in the next financial year. The revenue from penalties is recognized in the “Other income” item upon receival. Interest revenue is recognized using the effective interest method, only when they generate future economic benefits. 2.3.20. Accruals A Group’s revenues and costs are recognized in accordance with the accrual’s principle, under which they are recognized as they are generated or incurred, regardless of when they are received or paid. The costs and revenues related to the current period and whose expenses and income will only occur in future periods are registered under “Accounts receivable – trade”, “Accounts receivable – other”, “Prepaid expenses”, “Accrued expenses” and “Deferred income”, as well as the expenses and income that have already occurred that relate to future periods, which will be recognized in each of those periods, for the corresponding amount. The costs related to the current period and whose expenses will only occur in future periods are registered under “Accrued expenses” when it is possible to estimate with certainty the related amount, as well as the timing of the expense’s materialization. If uncertainty exists related to any of these aspects, the value is classified as Provisions (Note 2.3.14). 2.3.21. Assets, liabilities and transactions in foreign currencies Transactions in foreign currencies are converted into the functional currency at the exchange rate on the transactions dates. On each accounting date, outstanding balances (monetary items) are updated by applying the exchange rate prevailing on that date. The exchange rate differences in this update are recognized in the income statement for the year in which they were calculated in the item "Losses / (gains) on exchange variations". Exchange rate variations generated on monetary items, which constitute enlargement of the investment denominated in the functional currency of the Group or of the subsidiary in question, are recognized in equity. Exchange rate differences on non-monetary items are classified in “Other reserves” in equity. The financial statements of subsidiaries denominated in foreign currencies are converted at the following exchange rates: • The exchange rate obtaining on the date of the statement of financial position for the conversion of assets and liabilities; • The average exchange rate in the period for the conversion of items in the income statement, apart from cases of affiliated companies that are in a hyperinflationary economy; • The average exchange rate in the period, for the conversion of cash flows (in cases where the exchange rate approximates to the real rate, and for the remaining cash flows the rate of exchange at the date of the operations is used), apart from cases of affiliated companies that are in a hyperinflationary economy; 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 215 • The historical exchange rate for the conversion of equity accounts. Exchange differences arising from the conversion into euros of the financial statements of subsidiaries denominated in foreign currencies are included in equity under “Other reserves”. In the last quarter of 2017, the Angolan economy was considered a hyperinflationary economy according to IAS 29 - Financial Reporting in Hyperinflationary Economies. This standard requires that the financial statements prepared in the currency of a hyperinflationary must be expressed in terms of the current measurement unit at the financial statements’ preparation date. In summary, the general aspects that must be considered for the restatement of the individual financial statements are the following ones: • The monetary assets and liabilities are not amended because they are already updated to the current unit at the financial statements date; • The non-monetary assets and liabilities (that are still not expressed in terms of the current unit at the financial statements) are restated by the application of an index; • The effect of the inflation on the net monetary position of the subsidiaries companies is reflected in the income statement as a loss in the net monetary position. Additionally, according to IAS 21, the restatement of the consolidated financial statements is prohibited when the parent company does not operate in a hyperinflationary economy. The conversion coefficient that was used for the restatement of the individual financial statements of the subsidiaries in Angola was the Consumer Price Index (CPI), issued by the National Bank of Angola. In the last quarter of 2019, the Angolan economy was no longer considered a hyperinflationary economy. IAS 29 - Financial Reporting in Hyperinflationary Economies provides that “when an economy ceases to be hyperinflationary, the company should treat the amounts expressed in the current unit of measurement at the end of the previous reporting period, as the basis for the carrying amounts in its statements subsequent financial statements”. In this way, the adjustments / revaluations, carried out until the end of the classification as a hyperinflationary economy, are treated as a deemed cost and recognized in the same proportion as the assets that gave rise to it. On 31 December 2022 and 2023, assets and liabilities expressed in foreign currencies were converted into euros using the following exchange rates of such currencies against the euro, as published by the Bank of Portugal. 31-12-2022 31-12-2023 US Dollar 1.0666 1.1050 Angolan Kwanza 537.5664 930.9625 British Pound 0.8869 0.8691 Mozambican Metical 67.4500 69.8700 Canadian Dollar 1.4440 1.4642 Swiss Franc 0.9847 0.9260 Real 5.6386 5.3618 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 216 In the financial years ended on 31 December 2022 and 2023, the income statements of subsidiaries expressed in foreign currencies were converted to euros at the average exchange rates of the currencies of their countries of origin against the euro. The average exchange rates used are as follows: 12M 22 12M 23 Angolan Kwanza 476.0086 759.5493 Mozambican Metical 66.3800 68.4942 2.3.22. Financial charges and borrowings Financial charges related to borrowings are recognized as costs in accordance with the accrual’s principle, except in the case of loans incurred (whether these are generic or specific) for the acquisition, construction or production of an asset that takes a substantial period (over one year) to be ready for use, which are capitalized in the acquisition cost of that asset. Costs from capitalized borrowings are determined having in consideration the amount of borrowing costs obtained that can be capitalized, according to the application of a capitalization rate over the expenses associated with that asset. The capitalization rate (aligned with NOS average financing rate) as well as with the costs to be capitalized are determined monthly, taking into consideration the monthly balance of eligible borrowings and the monthly amount of the asset in progress that qualifies. 2.3.23. Investment property Investment property mainly includes buildings held to generate rents rather than for use in the production or supply of goods or services, or for administrative purposes, or for sale in the ordinary course of business. These are measured initially at cost. Subsequently, the Group uses the cost model for the valuation of investment property since use of the fair value model would not result in material differences. An investment property is eliminated from the statement of financial position on disposal or when the investment property is taken permanently out of use and no financial benefit is expected from its disposal. 2.3.24. Fair value measurement The Group measures part of the financial assets, such as financial assets available for sale, and some of its non- financial assets, at fair value on the date of the financial statements. The fair value measurement assumes that the asset or liability is exchanged in an orderly transaction among market participants to sell the asset or transfer the liability at the measurement date under current market conditions. The fair value measurement is based on the assumption that the transaction to sell the asset or transfer the liability may occur: • On the main market of the assets and liabilities, or • In the absence of a primary market, it is assumed that the transaction occurs in the most advantageous market. This is what maximizes the amount that would be received for selling asset or minimizes the amount that would be paid to transfer the liability, after considering transaction costs and transport costs. Since different entities and businesses within a single entity can have access to different markets, the main or most advantageous market for the same asset or liability can vary from one entity to another, or even between businesses within the same entity, but it is assumed that they are accessible to the Group. The fair value measurement uses assumptions that market participant’s use in defining price of the asset or liability, assuming that market participants would use the asset to maximize its value. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 217 The Group uses valuation techniques appropriate to the circumstances whenever there is information to measure the fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities measured at fair value or of which disclosure is mandatory, are rated on a fair value hierarchy, which ranks data in three levels to be used in the measurement at fair value, and detailed below: • Level 1 – Listed and unadjusted market prices, in active markets for identical assets or liabilities that the entity can access at the measurement date; • Level 2 - valuation techniques using inputs that aren’t quoted, but which are directly or indirectly observable; • Level 3 - valuation techniques using inputs not based on observable market data, based on unobservable inputs. The fair value measurement is classified in the same fair value hierarchy level at the lowest level of input, which is significant to the measurement as a whole. 2.3.25. Assets and liabilities offsetting Financial assets and liabilities are offset and presented at the net amount when, and only when, the Group has the right to offset the recognized amounts and intends to settle for the net amount . 2.3.26. Employee benefits Personnel expenses are recognized when the service is rendered by employees independently of their date of payment. Here are some specificities: • Termination of employment. The benefits for termination of employment are due for payment when there is cessation of employment before the normal retirement date or when an employee voluntarily accepts to leave in exchange of these benefits. The Group recognizes these benefits when it can be shown to be committed to a termination of current employees according to a detailed formal plan for termination and there is no realistic possibility of withdrawal or these benefits are granted to encourage voluntary redundancy. When the benefits of cessation of employment are due more than 12 months after the balance sheet date, they are updated to their present value. • Holiday, holiday allowances, and bonuses. According to the labor law, employees are entitled to 22 days annual leave, as well as one month of holiday allowances, rights acquired in the year preceding payment. These liabilities of the Group are recorded when incurred, independently of the moment of payment, and are reflected under the item "Accounts payable and other". • Labor Compensation Fund (FCT) and the Labor Compensation Guarantee Fund (FGCT). Based on the publication of Law No. 70/2013 and subsequent regulation by Order No. 294-A / 2013, entered into force on 1 October the Labor Compensation Fund schemes (FCT) and the Guarantee Fund Compensation of Labor (FGCT). In this context, companies that hire a new employee are required to deduct a percentage of the respective salary for these two new funds (0.925% to 0.075% and the FCT for FGCT), in order to ensure, in the future, the partial payment the compensation for dismissal. Considering the characteristics of each Fund, the following is considered: o The monthly deliveries to FGCT, made by the employer are recognized as expense in the period to which they relate. o The monthly deliveries to FCT, made by the employer are recognized as a financial asset, in the caption "Other non-current financial assets” of the entity, measured at fair value with changes recognized in the respective results. With the publication of Law no. 13/2023, as of 1 May 2023, it is no longer mandatory to make payments corresponding to 0.925% of each worker's basic salary and seniority to the FCT, which has been converted into a closed accounting fund. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 218 According to the same law, the obligations relating to the FGCT corresponding to 0.075% are suspended for the duration of the Medium-Term Agreement for the improvement of incomes, wages and competitiveness, which is expected to run until 2026. 2.3.27. Statement of cash flows The statement of cash flows is prepared in accordance with the direct method. The Group classifies under “Cash and cash equivalents” the assets with maturities of less than three months and for which the risk of change in value is negligible. For purposes of the statement of cash flows, the balance of cash and cash equivalents also include bank overdrafts included in the statement of financial position under "Borrowings". The statement of cash flows is divided into operating, investing, and financing activities. Operating activities include cash received from customers and payments to suppliers, staff and others related to operating activities. Under "Other cash receipts / (payments) related with operating activity" includes the amount received and subsequent payments related to assignments without recourse, coordinated by the Banco Comercial Português and Caixa Geral de Depósitos, and these operations do not involve any change in the accounting treatment of the underlying receivables or in the relationship with their clients. The cash flows included in investing activities include acquisitions and disposals of investments in subsidiaries and cash received and payments arising from the purchase and sale of tangible and intangible assets, amongst others. Financing activities include cash received and payments relating to borrowings, the payment of interest and similar costs, finance leases, the purchase and sale of own shares and the payment of dividends. 2.3.28. Subsequent events Events occurring after the date of the statement of financial position, which provide additional information about conditions that existed at that date, are considered in the preparation of financial statements of the quarter. Events occurring after the date of the statement of financial position, which provide information on conditions that occur after that date, are disclosed in the notes to the financial statements, when they are materially relevant 3. Judgements and estimates 3.1. Relevant accounting estimates The preparation of consolidated financial statements requires the Group's management to make judgments and estimates that affect the statement of financial position and the reported results. These estimates are based on the best information and knowledge about past and/or present events and on the operations that the Company considers it may implement in the future. However, at the date of completion of such operations, their results may differ from these estimates. Changes to these estimates that occur after the date of approval of the consolidated financial statements will be corrected in the income statement in a prospective manner, in accordance with IAS 8 - "Accounting Policies, Changes in Accounting Estimates and Errors". The estimates and assumptions that imply a greater risk of giving rise to a material adjustment in assets and liabilities are described below: Entities included in the consolidation perimeter To determine the entities to be included in the consolidation perimeter, the Group assesses the extent to which it is exposed, or has rights, to variability in return from its involvement with that entity and can take possession of them through the power it holds over this entity. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 219 The decision that an entity must be consolidated by the Group requires the use of judgment, estimates, and assumptions to determine the extent to which the Group is exposed to return variability and the ability to take possession of them through its power. Other assumptions and estimates could lead to the Group's consolidation perimeter being different, with direct impact on the consolidated financial statements. Impairment of non-current assets, excluding goodwill The determination of a possible impairment loss can be triggered by the occurrence of various events, such as the availability of future financing, the cost of capital or other market, economic and legal changes or changes with an adverse effect on the technological environment, many of which are beyond the Group's control. The identification and assessment of impairment indicators, the estimation of future cash flows, and the calculation of the recoverable value of assets involve a high degree of judgment by the Board. Impairment of goodwill Goodwill is annually subject to impairment tests or whenever there are indications of a possible loss of value, according to the criteria referred on Note 9. The recoverable values of the cash-generating units to which goodwill is allocated are determined based on the calculation of current use values. These calculations require the use of estimates by management. Tangible and intangible assets The life of an asset is the period during which the Company expects that an asset will be available for use and this should be reviewed at least at the end of each financial year. The determination of the useful lives of assets, the amortization/depreciation method to be applied, and the estimated losses resulting from the replacement of equipment before the end of its useful life due to technological obsolescence is crucial in determining the amount of amortization/depreciation to be recognized in the consolidated income statement each period. These three parameters are defined using management's best estimates for the assets and businesses concerned and taking account of the practices adopted by companies in the sectors in which the Group operates. The capitalized costs with the audiovisual content distribution rights acquired for commercialization in the various windows of exhibition are amortized over the period of exploration of the respective contracts. Additionally, these assets are subject to impairment tests whenever there are indications of changes in the pattern generation of future revenue underlying each contract. The residual value, the useful life and the depreciation methods are periodically revised by the various companies of the Group and prospectively adjusted, if appropriated. Rights of use The Group determines the end of the lease as the non-cancelable part of the lease term, together with any periods covered by an option to extend the lease if it is reasonably certain that it will be exercised, or any periods covered by an option to terminate the lease agreement, if it is reasonably certain that it will not be exercised. The Group has the option, under some of its lease agreements, to lease its assets for additional periods. NOS assesses the reasonableness of exercising the option to renew the contract. That is, NOS considers all the relevant factors that create an economic incentive for exercising the renewal. After the start date, the Group re-evaluates the termination of the contract if there is a significant event or changes in circumstances that are under control and affect its ability to exercise (or not exercise) the renewal option (a change in strategy of business). 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 220 Provisions The Group periodically reviews any obligations arising from past events, which should be recognized or disclosed. The subjectivity involved in determining the probability and amount of internal resources required to meet obligations may give rise to significant adjustments, either due to changes in the assumptions made, or due to the future recognition of provisions previously disclosed as contingent liabilities. Deferred income tax assets Deferred income tax assets are recognized only when there is strong assurance that there will be future taxable income available to use the temporary differences or when there are deferred tax liabilities whose reversal is expected in the same period in which the deferred tax assets are reversed. The assessment of deferred income tax assets is undertaken by management at the end of each period taking account of the expected future performance of the Group. Expected credit losses The credit risk on the balances of accounts receivable is assessed at each reporting date, using a collection matrix based on the historical past collections adjusted from the future expectation of collections evolution, to determine the uncollectability rate. The expected credit losses of the accounts receivable are thus adjusted for the assessment made, which may differ from the effective risk that will incurred in the future. Fair value of financial assets and liabilities When the fair value of an asset or liabilities is calculated, on an active market, the respective market price is used. When there is no active market, which is the case with some of the Group's financial assets and liabilities, valuation techniques generally accepted in the market, based on market assumptions, are used. The Group applies evaluation techniques for unlisted financial instruments, such as derivatives, financial instruments at fair value and instruments measured at amortized cost. The most frequently used valorization models are models of discounted cash flows and option models, which incorporate, for example, interest rate and market volatility curves. For certain types of more complex derivatives, more advanced valuation models are used containing assumptions and data that are not directly observable in the market, for which the Group uses internal estimates and assumptions. 3.2. Errors, estimates, and changes to accounting policies During the financial years ended 31 December 2022 and 2023 no material errors, estimates or changes in accounting policies were recognized in relation to prior years. On 31 December 2022, a reclassification of estimates to address uncertainties regarding the acceptance of a particular tax treatment by the Tax Administration was made from Taxes payable to deferred tax liabilities in the amount of €42.6 million (Note 16). 4. Financial Risk Policies Management 4.1. Financial Risk Management The Group's activities are exposed to a variety of financial risk factors: credit risk, liquidity risk and market risk. The Group's Board of Directors takes responsibility for defining the principles for risk management and policies covering specific areas such as: exchange rate risk, interest rate risk, credit risk, the use of derivatives and other non-derivative financial instruments, and the investment of excess liquidity. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 221 A) Credit Risk Credit risk is essentially related to the risk of a counterparty defaulting on its contractual obligations, resulting in a financial loss to the Group. The Group is subject to credit risk in its operating and treasury activities. The credit risk associated with operations is mainly related to receivables from services provided to customers (Notes 13 and 18). This risk is monitored on a regular business basis, and the aim of management is to: i) limit the credit granted to customers, considering the average collection period of each customer; ii) monitor the evolution of the level of credit granted; and iii) perform impairment analyses of accounts receivable on a regular basis. The classification of a customer as being in default takes into account the particularity of each customer, business/segment and amounts involved. In the majority of segments, a customer is considered to be in default if the debt is overdue for more than 180 days. In the residential segment, the main segment, NOS has as a restriction measure, the blocking of the services provided after 50 days of maturity without receipt. The Group does not face any significant credit risk with any particular customer, insofar as the accounts receivable derive from a large number of customers from a wide range of businesses. The adjustments for expected credit losses on accounts receivable are calculated considering: i) the risk profile of the customer, depending on whether it is a residential or corporate customer; ii) the average collection period, which differs from business to business; iii) the customer's financial condition; and iv) the future prospects for collection. Given the dispersion of customers it is not necessary to consider an additional adjustment for credit risk, besides the expected credit losses already recorded in accounts receivable - customers and accounts receivable - other. On a regular basis, doubtful debts, overdue for more than 24 months and with total impairment loss recorded, are derecognized, after all collection procedures considered adequate for credit recovery have been exhausted or frustrated. The following table represents the Group's maximum exposure to credit risk, as of 31 December 2022 and 2023, without taking into account any collateral held or other credit enhancements. For assets in the statement of financial position, the defined exposure is based on their carrying amount on the face of the statement of financial position. 31-12-2022 31-12-2023 Accounts receivable trade - current (Note 18) 229,636 272,749 Accounts receivable other - non-current (Note 13) 4,758 4,364 Accounts receivable other - current (Note 13) 4,667 4,085 Cash and cash equivalents (Note 22) 14,198 17,271 Total financial assets 253,259 298,469 Accounts receivable – customers The Group's exposure to credit risk is attributable mainly to the accounts receivable related to its operating activity. The amounts presented in the statement of financial position are net of expected credit losses that were estimated by the Group, in accordance with its experience and based on the economic environment evaluation. The Board of Directors believes that the carrying amounts of accounts receivable are similar to its fair value. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 222 On 31 December 2022 and 2023, the ageing of the trade receivables - trade receivables is as follows: 31-12-2022 31-12-2023 Not overdue 123,367 157,010 0 to 90 days 39,633 57,803 90 to 180 days 23,468 18,608 180 to 360 days 25,828 27,019 Over 360 days 231,922 225,650 Accounts receivable 444,218 486,090 Not overdue (5,909) (11,016) 0 to 90 days (6,179) (11,696) 90 to 180 days (12,588) (9,232) 180 to 360 days (14,980) (18,240) Over 360 days (174,926) (163,157) Expected credit losses (214,582) (213,341) Total accounts receivable 229,636 272,749 Credit risk monitoring is performed on a continuous basis and can be summarized as follows: • Regular customers are analyzed on an aggregate basis (homogeneous group) and the expected credit losses are calculated through the use of a collection’s matrix, which is based on past collections adjusted for the expected future evolution of collections, to determine the uncollectability rate; • The balances of operators, agents and others are analyzed individually and the expected credit losses are calculated taking into consideration the age of each balance, the existence of claims, the current financial situation of each third party and the future expectation of receiving the respective amounts due. Cash and cash equivalents The guarantees and collaterals existing for some operators and agents are not material. The quality of the Group's credit risk, on 31 December 2022 and 2023, associated with this type of assets (Cash and Cash Equivalents except cash value), whose counterparties are financial institutions, is detailed as follows: 31-12-2022 31-12-2023 A 42 60 A- 5,834 4,791 BBB+ 3,871 4,709 BBB- 1,084 674 BBB - 5,536 BB+ 2,016 - B+ 1 1 B- 1,244 1,419 without rating 106 81 Total 14,198 17,271 The ratings information was taken from Reuters, based on the ratings assigned by the three main rating agencies (Standard & Poor's, Moody's and Fitch). 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 223 B) Liquidity risk Prudent management of liquidity risk implies maintaining an adequate level of cash and cash equivalents to meet the assumed responsibilities, associated to the negotiation of credit lines with financial institutions. Under the adopted model, the Group has: b.1) Commercial paper programmes used of €668.6 million, of which €42.6 million issued under programmes without underwriting. The total amount contracted under firm underwriting programmes is 925 million euros, corresponding to seventeen programmes, with seven banking institutions, 825 million of which bear interest at market rates and 100 million are issued at fixed rates. b.2) Bonds by private and direct offer in the amount of 425 million euros. Based on estimated cash flows and taking into consideration the compliance with any covenants normally existing in loans payable, management regularly monitors the forecasts of the Group's liquidity reserve, including the amounts of unused credit lines, the amounts of cash and cash equivalents. Covenants From the loans obtained (excluding financial leases), besides being subject to the Group's compliance with its obligations (operational, legal and fiscal) 100% of them are subject to Cross default and Pari Passu, 96% to Negative Pledge clauses and 71% are subject to Ownership clauses. Additionally, about 19% of the total loans obtained require that consolidated net financial debt does not exceed up to 3 times EBITDA after consolidated lease payments, around 4% require that consolidated net financial debt does not exceed up to 3.5 times EBITDA after consolidated lease payments, around 15% require that consolidated net financial debt does not exceed up to 4 times EBITDA after payment of consolidated leases, around 6% require that consolidated net financial debt does not exceed up to 4.5 times EBITDA after payment of consolidated leases, and around 7% require that consolidated net financial debt does not exceed up to 5 times EBITDA after payment of consolidated leases. Net Financial Debt = Loans - Leasings - Cash and Cash Equivalents EBITDA = Operating profit + Depreciation, amortization and impairment losses + Restructuring costs + Losses / (gains) on disposal of assets + Other non-recurrent costs / (gains) EBITDA after lease payments = EBITDA - lease payments (principal and interest) The table below shows the Group's liabilities by contractual residual maturity intervals. The amounts shown in the table are the contractual undiscounted cash flows payable in the future and including the interest at which these liabilities are being remunerated. 31-12-2022 31-12-2023 Between Between Less than Over 5 Less than Over 1 and 5 To ta l 1 and 5 To ta l 1 year years 1 year 5 years years years Borrowings: Bond issue 302,943 289,467 - 592,410 78,743 349,008 - 427,751 Commercial paper 42,889 364,992 - 407,881 69,278 600,809 - 670,087 Bank overdrafts 7,136 - - 7,136 9,668 - - 9,668 Financial leases 74,485 214,269 341,453 630,207 79,379 190,875 356,208 626,462 Accounts payable - trade 253,355 - - 253,355 243,991 - - 243,991 Accounts receivable - trade 53,789 9,618 32,510 95,917 50,349 5,460 39,266 95,075 Derivatives financial instruments 397 - - 397 441 1,036 - 1,477 To ta l 734,994 878,346 373,963 1,987,303 531,849 1,147,188 395,475 2,074,512 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 224 C) Market risk Exchange market risk Exchange rate risk is mainly related to exposure resulting from payments made to suppliers of terminal equipment and producers of audiovisual content for the Pay TV and audiovisual businesses, respectively. The commercial transactions between the Group and these suppliers are mainly denominated in US dollars. Considering the balance of accounts payable resulting from transactions denominated in a currency different from the Group's functional currency, the Group contracts or may contract financial instruments, namely short-term foreign currency forwards, in order to hedge the risk associated with these balances (Note 21). The Group has investments in foreign entities whose assets and liabilities are exposed to exchange rate variations (the Group has two subsidiaries in Mozambique, Lusomundo Moçambique and Mstar, whose functional currency is the Metical and two in Angola, Finstar and ZAP Media whose functional currency is the Kwanza). The Group has not adopted any policy of hedging the risk of exchange rate variations of these companies on the Group's cash flows in foreign currency. A sensitivity analysis was performed considering a 10% strengthening or weakening of the functional currencies of the various financial investments on 31 December 2023. Thus, the value of the financial investments would decrease by 2,410 thousand euros (2022: 3,248 thousand euros) or increase by 2,946 thousand euros (2022: 3,982 thousand euros), respectively, with the counterpart of these variations being recorded in equity. In this sensitivity analysis, gains or losses that financial investments would recognize resulting from currency fluctuations are not considered. The table below shows the Group's exposure to exchange rate risk at 31 December 2022 and 2023, based on the figures in the statement of financial position of the Group's financial assets and liabilities (amounts expressed in local currency): 31-12-2022 US dollar British pound Metical Assets Accounts receivable - trade 4,383 - - Accounts receivable - other 1 1 - Tax receivable - - 651 Cash and cash equivalents - - 6,911 Total assets 4,384 1 7,562 Liabilities Accounts payable - trade 7,943 (5) 35 Accounts payable - other 117 1 2 Total liabilities 8,060 (4) 37 Net (3,676) 5 7,525 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 225 31-12-2023 US dollar British pound Metical Assets Accounts receivable - trade 6,911 - - Accounts receivable - other 2 2 - Tax receivable 40 1 13 Cash and cash equivalents 6,953 3 13 Total assets Liabilities 5,025 - - Accounts payable - trade 146 6 - Accounts payable - other 5,171 6 - Total liabilities 1,782 (3) 13 NOS uses a sensitivity analysis technique that measures the estimated changes in results and equity of an immediate strengthening or weakening of the Euro against other currencies in the rates applied on 31 December 2023, for each class of financial instruments, holding other variables constant. This analysis is for illustrative purposes only, as in practice exchange rates rarely change in isolation. The sensitivity analysis was performed using a strengthening or weakening of the Euro by 10% in all exchange rates. In such case, profits before taxes would have increased by 179 thousand euros (2022: increased by 307 thousand euros) or decreased by 146 thousand euros (2022: decreased by 375 thousand euros), respectively. D) Interest rate risk The risk of interest rate fluctuation can result in a cash flow risk or a fair value risk, depending on whether variable or fixed interest rates have been negotiated. The Group's borrowings (with the exception of the public bond issue of 100 million euros and the contracted leases) have variable interest rates, which exposes the Group to cash flow interest rate risk. The Group has adopted policy of hedging risk with interest rate swaps to hedge future interest payments on Bond loans and other borrowings (Note 25). The NOS Group uses the sensitivity analysis technique, which measures the expected impacts on results and equity of an immediate increase or decrease of 0.25% (25 basis points) in market interest rates, for the rates applying at the date of the statement of position for each class of financial instrument, with all other variables constant. This analysis is for illustrative purposes only, as in practice market rates rarely change in isolation. The sensitivity analysis is based on the following assumptions: • Changes in market interest rates affect interest income or interest expense of variable financial instruments; • Changes in market interest rates only affect interest income or expense in relation to financial instruments with fixed interest rates if these are recognized at fair value; • Changes in market interest rates affect the fair value of derivative financial instruments and other financial assets and liabilities; Changes in the fair value of derivative financial instruments and other financial assets and liabilities are estimated by discounting future cash flows from current net values, using market rates at the year end. Under these assumptions, a 0.25% increase or decrease in market interest rates for unhedged or floating rate loans as of 31 December 2023 would result in an increase or decrease in annual profit before tax of approximately €1.7 million or €1.8 million, respectively (2022: €1.4 million). 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 226 Regarding the interest rate swaps contracted, the sensitivity analysis that measures the estimated impacts of an immediate increase or decrease of 0.25% (25 basis points) in market interest rates, results in changes, compared to the current fair value of the instruments of more than 79 thousand euros (2022: approximately more 183 thousand euros) and less 69 thousand euros (2022: approximately less 167 thousand euros). 4.2. Capital risk management The objective of capital risk management is to safeguard the continuity of the Group's operations, with an adequate return to shareholders and generating benefits for all stakeholders. The NOS Group's policy is to contract loans with financial entities, mostly at the level of the parent company, NOS, which in turn grants loans to its subsidiaries and associates. In the case of joint ventures, which contract financing in their own name, NOS participates in the contract process and is the guarantor for repayment of the loan. This policy aims to optimize the capital structure with a view to greater tax efficiency and reducing the average cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amounts of dividends to be distributed to shareholders, issue new shares, dispose of assets to reduce liabilities or launch share buyback programmes. As applied by other entities operating in the market in which the Group's operations are carried out, the Group manages capital on the basis of the net financial debt/EBITDA ratio. Net financial debt is calculated as the total of current and non-current borrowings, excluding finance leases related to contracts for the acquisition of capacity utilization rights and other long-term contracts, less cash and cash equivalents, less cash and cash equivalents. The internal ratio set as a target is a debt level below 3 times EBITDA. 31-12-2022 31-12-2023 Financial debt (Note 25) 1,007,427 1,107,507 Cash and cash equivalents (Note 22) (15,215) (18,158) Total financial debt 992,212 1,089,349 financial leases (Note 25) 630,207 626,462 Total net debt 1,622,419 1,715,811 (1)EBITDA 651,060 716,669 (2)EBITDA after leasing payments 547,727 603,200 Net financial debt / EBITDA after leasing payments 1.81 1.81 Net debt / EBITDA 2.49 2.39 (1) EBITDA = Operating Result + Depreciation, Amortization and Impairment Losses + Restructuring Costs + Losses/(Gains) on disposals of assets + Other Costs/(Gains) Non-Recurring (2) EBITDA after leasings payments = EBITDA – Leasings payments (Capital and Interest) 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 227 Estimated fair value 31-12-2022 Level 1 Level 2 Level 3 Total Assets Other financial assets non-current (Note 15) - - 5,248 5,248 Interest rate derivatives (Note 20) - 10,947 - 10,947 Exchange rate derivatives (Note 21) - 302 - 302 - 11,249 5,248 16,497 Liabilities Exchange rate derivatives (Note 21) - 397 - 397 - 397 - 397 31-12-2023 Level 1 Level 2 Level 3 Total Assets Other financial assets non-current (Note 15) - - 6,028 6,028 Interest rate derivatives (Note 21) - 5,386 - 5,386 Exchange rate derivatives (Note 21) - 197 - 197 - 5,583 6,028 11,611 Liabilities Interest rate derivatives (Note 21) - 1,036 - 1,036 Exchange rate derivatives (Note 21) - 441 - 441 - 1,477 - 1,477 The levels of the fair value hierarchy, as established by IFRS 13 - Fair value measurement, are defined as follows: • Level 1 - Financial instruments valued based on quotations in active markets to which the Company has access. This category includes securities valued based on executable prices (with immediate liquidity) published by external sources. • Level 2 - Financial instruments whose valuation is based on directly or indirectly observable data in active markets. This category includes securities valued based on bids provided by external entities and internal valuation techniques that use only observable market data. • Level 3 - All financial instruments valued at fair value that do not fall into levels 1 and 2. Assets available for sale were valued using the discounted cash flow method (level 3). The calculation of the fair value of interest rate swap derivatives was based on an estimate of discounted future cash flows, using the estimated market interest rate curve calculated by the entities with which the swaps were contracted (level 2). The fair value of forward rate agreement derivatives is calculated based on the spot exchange rate (level 2). 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 228 5. Changes in the perimeter During the financial year ended on 31 December 2022, there were no changes in the perimeter. During the financial year ended on 31 December 2023, the following changes in the perimeter occurred: • Incorporation of the company Ten Twenty One, S.A., in February 2023, whose main activity is the provision of engineering and consulting services in the area of information technologies, communications and electronics; • Disposal of the stake held in Big Picture 2 Films (20%), in June 2023, for the amount of 50 thousand euros (Note 12); • Acquisition of the company BLU, S.A., in March 2023, whose main activity is the provision of telecommunications services, establishment, management and operation of telecommunications networks, and subsequent merger into NOS Comunicações in May 2023. This merger did not originate any material impacts on the Group’s consolidated financial statements. • Acquisition of a stake in the company BrightCity, S.A. (50%), in September 2023, for the sum of 255 thousand euros (Note 12) and shareholder loans of 129 thousand euros. • Subscription of 150 shares in CEIIA - Centro de Engenharia e Desenvolvimento (16.2%), in December 2023, for 150 thousand euros (Note 12). Following the acquisition of BLU, S.A., NOS made a preliminary assessment of the fair value of assets acquired and liabilities assumed through this operation, so the purchase price allocation is still subject to changes until the conclusion of the period of one year from the control date, as permitted by IFRS 3 - Business Combinations. Nevertheless, NOS does not estimate material changes as a result of any changes to the allocation made. The detail of net assets acquired and goodwill arising on this transaction is as follows: Book Value Adjustments to fair value Fair value Acquired assets Contract costs - customer portfolio - 316 316 Accounts receivable 141 - 141 Prepaid expenses 21 - 21 Cash and cash equivalents 158 - 158 320 316 636 Acquired liabilities Deferred tax liabilities - 71 71 Accounts payable 120 - 120 Tax payable 7 - 7 Deferred income 26 - 26 153 71 224 Total net assets acquired 167 245 412 Goodwill - Acquisition price 412 The difference between the amount paid and the net assets acquired was allocated in full to the company's client portfolio, taking into account the rationale behind the acquisition operation. The contribution of BLU, S.A. to net income and revenues for the financial year ended on 31 December 2023, was 72 thousand euros and 275 thousand euros respectively, corresponding to a period of three month (from March to May, date of the fusion). 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 229 The net cash flows with the acquisition of BLU, S.A., resulted in a payment of 254 thousand euros, included in the cash flows of Investment Activities (Price paid: 412 thousand euros; Cash and cash equivalents: 158 thousand euros). Following the acquisition of the stake in BrightCity, S.A., NOS carried out a preliminary assessment of the fair value of the assets acquired and liabilities assumed through this operation, so the purchase price allocation is still subject to change until the conclusion of the one-year period from the date of control, as permitted by IFRS 3 - Business Combinations. Nevertheless, NOS does not estimate any material changes as a result of possible alterations to the allocation made. Book Value Adjustments to fair value Fair value Assets acquired Tangible and Intagible assets 63 595 658 Accounts receivable 530 - 530 Tax receivable 153 - 153 Prepaid expenses 6 - 6 Cash and cash equivalents 123 - 123 875 595 1,470 Liabilities acquired Deferred tax liabilities - 134 134 Loans 256 - 256 Accounts payable 568 - 568 Tax payable 2 - 2 826 134 960 Total net assets acquired 49 461 510 Total net assets acquired (50%) 25 231 255 Goodwill - Acquisition price (Note 12) 255 The difference between the amount paid and the net assets acquired was allocated in full to the company's Intangible Assets, consider the intellectual property owned/developed by the company. The net value of the assets and liabilities acquired is recognized under "Investments in joint ventures and associates". 6. Segment reporting The business segments are as follows: • Telco – TV, Internet (fixed and mobile) and voice (fixed and mobile) services rendered and includes the following companies: NOS Technology, Per-mar, Sontária, NOS SGPS, NOS Açores, NOS Property, NOS Madeira, NOS SA, NOS Audio- Sales and Distribution, Teliz Holding, NOS Sistemas, NOS Sistemas España, NOS Inovação, NOS Internacional SGPS, NOS Corporate Center, NOS Wholesale, Fundo NOS 5G, Dualgrid, NOS Mediação de Seguros, Ten Twenty One and CEiiA. • Audiovisual – the supply of video production services and sales, cinema exhibition and distribution and the acquisition/negotiation of Pay TV and VOD (video-on-demand) rights and includes the following companies: NOS Audiovisuais, NOS Cinemas, Lusomundo Moçambique, Lda ("Lusomundo Moçambique"), Lusomundo Imobiliária 2, S.A. ("Lusomundo Imobiliária 2"), Lusomundo Sociedade de Investimentos Imobiliários, SGPS, S.A. (“Lusomundo SII”), Empracine – Empresa Promotora de Atividades Cinematográficas, Lda (“Empracine”), NOS Audio SGPS and Dreamia S.L. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 230 Assets and liabilities by segment on 31 December 2022 and 2023 are shown below: 31-12-2022 Telco Audiovisuals Eliminations Group Assets Non - current assets: Tangible assets 1,098,022 9,030 - 1,107,052 Intangible assets 1,117,022 92,536 - 1,209,558 Contract costs 160,594 - - 160,594 Rights of use 270,493 27,230 - 297,723 Investments in jointly controlled companies and associated companies 122,712 46,256 (130,007) 38,961 Accounts receivable - other 43,569 3,082 (41,893) 4,758 Deferred income tax assets 81,545 8,009 - 89,554 Other non-current assets 16,917 463 - 17,380 Total non - current assets 2,910,874 186,606 (171,900) 2,925,580 Current assets: Inventories 66,657 566 - 67,223 Account receivables 391,650 47,390 (42,872) 396,168 Prepaid expenses 50,891 1,721 (380) 52,232 Other current assets 4,788 2,118 - 6,906 Cash and cash equivalents 14,265 950 - 15,215 Total current assets 528,251 52,745 (43,252) 537,744 Total assets 3,439,125 239,351 (215,152) 3,463,324 Shareholder's equity Share capital 855,168 48,917 (48,917) 855,168 Capital issued premium 4,202 - - 4,202 Own shares (15,968) - - (15,968) Legal reserve 1,030 1,989 (1,989) 1,030 Other reserves and accumulated earnings 7,998 37,897 (68,809) (22,914) Net income 216,203 18,207 (9,836) 224,574 Equity before non - controlling interests 1,068,633 107,010 (129,551) 1,046,092 Non-controlling interests 6,251 - - 6,251 Total equity 1,074,884 107,010 (129,551) 1,052,343 Liabilities Non - current liabilities: Borrowings 1,188,142 63,931 (41,892) 1,210,181 Provisions 73,656 7,611 - 81,267 Other non-current liabilities 44,952 - - 44,952 Deferred income tax liabilities 49,296 829 - 50,125 Total non - current liabilities 1,356,046 72,371 (41,892) 1,386,525 Current liabilities: Borrowings 433,941 17,185 (23,673) 427,453 Accounts payable 305,870 17,086 (15,812) 307,144 Tax payable 37,485 1,357 - 38,842 Accrued expenses 199,001 17,274 (3,845) 212,430 Other current liabilities 31,898 7,068 (379) 38,587 Total current liabilities 1,008,195 59,970 (43,709) 1,024,456 Total liabilities 2,364,241 132,341 (85,601) 2,410,981 Total liabilities and shareholder´s equity 3,439,125 239,351 (215,152) 3,463,324 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 231 31-12-2023 Telco Audiovisuals Eliminations Group Assets Non - current assets: Tangible assets 1,084,379 9,205 - 1,093,584 Intangible assets 1,114,748 93,198 - 1,207,946 Contract costs 158,406 - - 158,406 Rights of use 272,228 34,862 - 307,090 Investments in jointly controlled companies and associated companies 144,077 45,224 (159,861) 29,440 Accounts receivable - other 13,076 3,173 (11,885) 4,364 Deferred income tax assets 74,775 7,131 - 81,906 Other non-current assets 11,720 291 - 12,011 Total non - current assets 2,873,409 193,084 (171,746) 2,894,747 Current assets: Inventories 47,607 608 - 48,215 Account receivables 415,253 51,225 (40,093) 426,385 Prepaid expenses 43,278 1,525 (378) 44,425 Other current assets 35,027 2,023 - 37,050 Cash and cash equivalents 17,359 799 - 18,158 Total current assets 558,524 56,180 (40,471) 574,233 Total assets 3,431,933 249,264 (212,217) 3,468,980 Shareholder's equity Share capital 855,168 78,925 (78,925) 855,168 Capital issued premium 4,202 - - 4,202 Own shares (15,059) - - (15,059) Legal reserve 4,374 2,697 (2,697) 4,374 Other reserves and accumulated earnings (22,388) 49,319 (68,509) (41,578) Net income 171,661 18,608 (9,274) 180,995 Equity before non - controlling interests 997,958 149,549 (159,405) 988,102 Non-controlling interests 6,585 - - 6,585 Total equity 1,004,543 149,549 (159,405) 994,687 Liabilities Non - current liabilities: Borrowings 1,468,909 39,875 (11,884) 1,496,900 Provisions 73,182 6,972 - 80,154 Other non-current liabilities 45,762 - - 45,762 Deferred income tax liabilities 47,998 1,509 - 49,507 Total non - current liabilities 1,635,851 48,356 (11,884) 1,672,323 Current liabilities: Borrowings 249,176 9,942 (22,049) 237,069 Accounts payable 291,055 16,726 (13,441) 294,340 Tax payable 22,186 1,027 - 23,213 Accrued expenses 190,993 18,010 (5,060) 203,943 Other current liabilities 38,129 5,654 (378) 43,405 Total current liabilities 791,539 51,359 (40,928) 801,970 Total liabilities 2,427,390 99,715 (52,812) 2,474,293 Total liabilities and shareholder´s equity 3,431,933 249,264 (212,217) 3,468,980 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 232 The results by segment and investments in tangible and intangible assets, contract costs and rights of use for the financial years ended on 31 December 2022 and 2023 are shown below: Telco Audiovisuals Eliminations Group thththth 4 quarter 22 12M 22 4 quarter 22 12M 22 4 quarter 22 12M 22 4quarter 22 12M 22 Revenues: Services rendered 339,200 1,325,968 23,838 82,372 (12,740) (45,599) 350,298 1,362,741 Sales 34,440 115,823 3,952 12,404 (73) (183) 38,319 128,044 Other operating revenues 8,308 29,153 735 1,672 (151) (603) 8,892 30,222 381,948 1,470,944 28,525 96,448 (12,964) (46,385) 397,509 1,521,007 Costs, losses and gains: Wages and salaries 19,621 75,262 3,244 10,640 (4) (4) 22,861 85,898 Direct costs 100,936 356,738 5,978 18,695 (7,842) (30,414) 99,072 345,019 Costs of products sold 33,770 111,836 952 2,761 (12) (35) 34,710 114,562 Marketing and advertising 19,136 43,774 801 2,870 (3,031) (11,896) 16,906 34,748 Support services 24,995 83,718 476 2,619 (504) (2,871) 24,967 83,466 Supplies and external services 36,449 147,282 2,844 9,121 (1,571) (1,165) 37,722 155,238 Other operating losses / (gains) 99 596 64 202 - - 163 798 Taxes 8,147 34,858 31 127 - - 8,178 34,985 Provisions and adjustments 2,041 15,998 (50) (765) - - 1,991 15,233 245,194 870,062 14,340 46,270 (12,964) (46,385) 246,570 869,947 EBITDA 136,754 600,882 14,185 50,178 - - 150,939 651,060 Depreciation, amortization and impairment losses 128,563 452,126 6,768 28,761 - - 135,331 480,887 Other losses / (gains), net (23,748) (100,488) 95 453 - - (23,653) (100,035) Income before losses / (gains) participated companies, financial results and taxes 31,939 249,244 7,322 20,964 - - 39,261 270,208 Net losses / (gains) of affiliated companies (5,890) (22,798) 742 675 - - (5,148) (22,123) Financial costs 8,847 31,437 (803) 141 - - 8,044 31,578 Net foreign exchange losses / (gains) 675 298 (51) (74) - - 624 224 Net losses / (gains) on financial assets 4 (7,278) 299 (2,455) (297) 9,836 6 103 Net other financial expenses / (income) 773 3,296 5 23 - - 778 3,319 4,409 4,955 192 (1,690) (297) 9,836 4,304 13,101 Income before taxes 27,530 244,289 7,130 22,654 297 (9,836) 34,957 257,107 Income taxes (198) 28,216 1,885 4,447 - - 1,687 32,663 Net income 27,728 216,073 5,245 18,207 297 (9,836) 33,270 224,444 Capex 198,698 596,866 13,523 28,948 - - 212,221 625,814 EBITDA - Capex (61,944) 4,016 662 21,230 - - (61,282) 25,246 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 233 Telco Audiovisuals Eliminations Group th thth th 4quarter 23 12M 23 4 quarter 23 12M 23 4quarter 23 12M 23 4quarter 23 12M 23 Revenues: Services rendered 360,686 1,404,144 18,377 81,633 (8,790) (33,790) 370,273 1,451,987 Sales 33,450 100,161 3,466 16,393 (72) (277) 36,844 116,277 Other operating revenues 7,037 28,440 399 1,410 (210) (660) 7,226 29,190 401,173 1,532,745 22,242 99,436 (9,072) (34,727) 414,343 1,597,454 Costs, losses and gains: Wages and salaries 18,178 78,633 3,214 11,576 (1) (3) 21,391 90,206 Direct costs 99,434 357,052 4,399 22,377 (6,424) (25,038) 97,409 354,391 Costs of products sold 37,497 100,659 820 3,778 (10) (26) 38,307 104,411 Marketing and advertising 20,456 47,157 1,067 4,185 (3,464) (12,382) 18,059 38,960 Support services 24,119 91,885 1,008 3,060 (1,075) (3,311) 24,052 91,634 Supplies and external services 37,264 141,866 1,373 5,630 1,902 6,033 40,539 153,529 Other operating losses / (gains) 232 797 139 259 - - 371 1,056 Taxes 8,840 35,616 30 97 - - 8,870 35,713 Provisions and adjustments 1,904 11,477 (194) (592) - - 1,710 10,885 247,924 865,142 11,856 50,370 (9,072) (34,727) 250,708 880,785 EBITDA 153,249 667,603 10,386 49,066 - - 163,635 716,669 Depreciation, amortization and impairment losses 115,954 455,504 7,830 28,134 - - 123,784 483,638 Other losses / (gains), net (32,385) (31,601) 100 420 - - (32,285) (31,181) Income before losses / (gains) participated companies, financial results and taxes 69,680 243,700 2,456 20,512 - - 72,136 264,212 Net losses / (gains) of affiliated companies (908) (5,908) 626 827 - - (282) (5,081) Financial costs 19,194 63,389 509 1,904 - - 19,703 65,293 Net foreign exchange losses / (gains) 124 79 25 9 - - 149 88 Net losses / (gains) on financial assets 921 (5,766) (3,287) (3,291) 2,238 9,274 (128) 217 Net other financial expenses / (income) 859 3,586 9 21 - - 868 3,607 20,190 55,380 (2,118) (530) 2,238 9,274 20,310 64,124 Income before taxes 49,490 188,320 4,574 21,042 (2,238) (9,274) 51,826 200,088 Income taxes (2,686) 16,320 (410) 2,434 - - (3,096) 18,754 Net income 52,176 172,000 4,984 18,608 (2,238) (9,274) 54,922 181,334 Capex 108,715 438,206 7,248 36,638 - - 115,963 474,844 EBITDA - Capex 44,534 229,397 3,138 12,428 - - 47,672 241,825 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 234 EBITDA = Operational Result + Depreciation, amortization and impairment losses + Restructuring costs + Losses / (gains) on sale of assets + Other losses / (gains) non-recurrent CAPEX = Increases in tangible and intangible assets, contract costs and rights of use Transactions between segments are performed on market terms and conditions in a comparable way to transactions performed with third parties. On 31 December 2023, fully consolidated foreign companies represent less than 1% of assets (at 31 December 2022: less than 1%) and their turnover is less than 0.1% of consolidated turnover. 7. Financial assets and liabilities classified in accordance with the IFRS 9 – financial instruments The accounting policies set out in IFRS 9 for financial instruments were applied to the following items: 31-12-2022 Total Non-Financial Financial financial financial Derivatives Total assets liabilities assets and assets and liabilities liabilities Assets Other financial assets non-current (Note 15) 5,248 - - 5,248 - 5,248 Derivative financial instruments (Note 21) - 11,249 - 11,249 - 11,249 Accounts receivable - trade (Note 18) 319,441 - - 319,441 - 319,441 Accounts receivable - other (Note 13) 9,425 - - 9,425 11,965 21,390 Cash and cash equivalents (Note 22) 15,215 - - 15,215 - 15,215 Total financial assets 349,329 11,249 - 360,578 11,965 372,543 Liabilities Borrowings (Note 25) - - 1,637,634 1,637,634 - 1,637,634 Derivative financial instruments (Note 21) - 397 - 397 - 397 Accounts payable - trade (Note 29) - - 253,355 253,355 - 253,355 Accounts payable - other (Note 30) - - 95,725 95,725 192 95,917 Accrued expenses (Note 27) - - 212,430 212,430 - 212,430 Total financial liabilities - 397 2,199,144 2,199,541 192 2,199,733 31-12-2023 Total Non-Financial Financial financial financial Derivatives Total assets liabilities assets and assets and liabilities liabilities Assets Other financial assets non-current (Note 15) 6,028 - - 6,028 - 6,028 Derivative financial instruments (Note 21) - 5,583 - 5,583 - 5,583 Accounts receivable - trade (Note 18) 363,692 - - 363,692 - 363,692 Accounts receivable - other (Note 13) 8,449 - - 8,449 11,597 20,046 Cash and cash equivalents (Note 22) 18,158 - - 18,158 - 18,158 Total financial assets 396,327 5,583 - 401,910 11,597 413,507 Liabilities Borrowings (Note 25) - - 1,733,969 1,733,969 - 1,733,969 Derivative financial instruments (Note 21) - 1,477 - 1,477 - 1,477 Accounts payable - trade (Note 29) - - 243,991 243,991 - 243,991 Accounts payable - other (Note 30) - - 94,871 94,871 204 95,075 Accrued expenses (Note 27) - - 203,943 203,943 - 203,943 Total financial liabilities - 1,477 2,276,774 2,278,251 204 2,278,455 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 235 Considering its nature, the balances of the amounts to be paid and received to/from state and other public entities were considered outside the scope of IFRS 7. Also, the captions of “Prepaid expenses” and “Deferred income” were not included in this note, as the nature of such balances are not included in the scope of IFRS 7. The Board of Directors believes that the fair value of the breakdown of financial instruments recorded at amortized cost or registered at the present value of the payments does not differ significantly from their book value. This decision is based in the contractual terms of each financial instrument. 8. Tangible assets In the financial years ended on 31 December 2022 and 2023, the movements in this item were as follows: Disposals and Transfers 31-12-2021 Increases 31-12-2022 write-offs and others Acquisition cost Lands 796 - (277) - 519 Buildings and other constructions 276,320 1,140 (46,115) 32,914 264,259 Basic equipment 2,765,157 48,038 (106,233) 202,213 2,909,175 Transportation equipment 514 - - - 514 Tools and dies 1,596 - 11 - 1,607 Administrative equipment 195,035 1,460 (2,769) 2,195 195,921 Other tangible assets 43,864 139 (90) 249 44,162 Tangible assets in-progress 41,226 231,250 5,414 (224,452) 53,438 3,324,508 282,027 (150,059) 13,119 3,469,595 Accumulated depreciation and impairment losses Buildings and other constructions 180,308 10,801 (31,615) 24 159,518 Basic equipment 1,872,564 200,375 (101,234) (31) 1,971,674 Transportation equipment 513 1 - - 514 Tools and dies 1,479 59 (10) - 1,528 Administrative equipment 185,182 3,082 (2,766) 152 185,650 Other tangible assets 43,362 388 (105) 14 43,659 2,283,408 214,706 (135,730) 159 2,362,543 1,041,100 67,321 (14,329) 12,960 1,107,052 Disposals and Transfers 31-12-2022 Increases 31-12-2023 write-offs and others Acquisition cost Lands 519 - - - 519 Buildings and other constructions 264,259 (715) (9,564) 27,686 281,666 Basic equipment 2,909,175 48,154 (231,008) 202,136 2,928,457 Transportation equipment 514 - - (2) 512 Tools and dies 1,607 - (5) 86 1,688 Administrative equipment 195,921 1,346 (4,485) (45,711) 147,071 Other tangible assets 44,162 139 (48) 323 44,576 Tangible assets in-progress 53,438 130,176 - (137,674) 45,940 3,469,595 179,100 (245,110) 46,844 3,450,429 Accumulated depreciation and impairment losses Buildings and other constructions 159,518 12,758 (9,564) (19,036) 143,676 Basic equipment 1,971,674 187,989 (231,008) 98,823 2,027,478 Transportation equipment 514 1 - (4) 511 Tools and dies 1,528 102 (5) (640) 985 Administrative equipment 185,650 3,784 (4,439) (44,955) 140,040 Other tangible assets 43,659 534 (48) 10 44,155 2,362,543 205,168 (245,064) 34,198 2,356,845 1,107,052 (26,068) (46) 12,646 1,093,584 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 236 In the year ended on 31 December 2022, the net amount of "Disposals and write-offs" corresponds predominantly to the sale of a portfolio of 293 mobile sites, with NOS receiving 163.6 million euros for the transaction, giving rise to a gain of 100.6 million euros, recognized under the heading Losses / (gains) on disposal of assets. In the year ended on 31 December 2023, the net amount of "Disposals and write-offs" corresponds predominantly to the sale of infrastructure and equipment replaced by newer generations and models, for approximately 1 million euros. The net amount of "Transfers and Other" corresponds predominantly to the transfer of assets from "Intangible Assets" (Note 9). On 31 December 2023, the net value of tangible assets is composed mainly by basic equipment, namely: • Network and telecommunications infrastructure (fibre optic network and cabling, network equipment, and other equipment) in the amount of 807.5 million euros (31 December 2022: 831.8 million euros); • Terminal equipment installed on client premises, included under Basic equipment, amounts to 93.5 million euros (31 December 2022: 105.7 million euros). Tangible and intangible assets include interests and other financial expenses incurred directly related to the construction of certain tangible or intangible assets in progress. On 31 December 2023, total net value of these costs amounted to 9.3 million euros (31 December 2022: 13.6 million euros). The amount of interest capitalized in the financial year on 31 December 2023 was null (31 December 2022: 1.1 million euros). On 31 December 2022 and 2023, the value of commitments to third parties relating to investments to be made was as follows: 31-12-2022 31-12-2023 Network investments 64,220 94,197 Information systems investments 2,555 7,236 66,775 101,433 During the year ended on 31 December 2023, the Company carried out an impairment analysis (see assumptions in Note 9) of the fixed assets allocated to cinema exhibition. Given the range of influence of each complex, the cinemas were grouped as cash-generating units on a regional basis for purposes of impairment testing. The regional cash generating units are Lisbon, Porto, Coimbra, Aveiro, Viseu and the cinemas dispersed throughout the remaining regions of the country are considered individual cash generating units. In these impairment tests, a discount rate (before taxes) of 9.8% and a perpetuity growth rate of 2.0% were considered. From this analysis did not result any recognition of impairment losses. Sensitivity analyses were performed to variations in discount rates and revenue growth of approximately 10% and to a perpetuity growth rate of 0%, from which no additional impairment losses were recognized. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 237 9. Intangible assets In the financial years ended on 31 December 2022 and 2023, the movements in this item were as follows: Disposals and Transfers 31-12-2021 Increases 31-12-2022 write-offs and others Acquisition cost Industrial property and other rights 1,981,959 13,730 (357) 107,848 2,103,180 Goodwill 641,400 - - - 641,400 Intangible assets in-progress 39,861 108,264 - (120,908) 27,217 2,663,220 121,994 (357) (13,060) 2,771,797 Accumulated amortization and impairment losses Industrial property and other rights 1,456,166 104,507 (357) (409) 1,559,907 Intangible assets in-progress 2,023 - - 309 2,332 1,458,189 104,507 (357) (100) 1,562,239 1,205,031 17,487 - (12,960) 1,209,558 Disposals and Transfers 31-12-2022 Increases 31-12-2023 write-offs and others Acquisition cost Industrial property and other rights 2,103,180 24,710 (659) (25,744) 2,101,487 Goodwill641,400 217 - (217) 641,400 Intangible assets in-progress 27,217 92,150 - (92,177) 27,190 2,771,797 117,077 (659) (118,138) 2,770,077 Accumulated amortization and impairment losses Industrial property and other rights 1,559,907 110,971 (659) (109,070) 1,561,149 Intangible assets in-progress 2,332 - - (1,350) 982 1,562,239 110,971 (659) (110,420) 1,562,131 1,209,558 6,106 - (7,718) 1,207,946 The amount of “Transfers and Others” corresponds, mainly, to the transfer of assets to “Tangible assets" (Note 8). On 31 December 2023, the item "Industrial property and other rights" includes mainly: • A net amount of 135.6 million euros (31 December 2022: 143.2 million euros) corresponding to the acquisition of frequency usage rights in 5G bands and other relevant bands (100MHz in the 3.6GHz band and 2x10MHz in the 700MHz band, also acquiring 2x5MHz in the 2100MHz band and 2x2MHz in the 900MHz band); • A net amount of 77.5 million euros (31 December 2022: 85.8 million euros) mainly related to the investment, net of amortization, made in the development of the UMTS network by NOS SA, including: o 24.5 million euros (31 December 2022: 27.2 million euros) related to the license; o 8.2 million euros (31 December 2022: 9.1 million euros) related to the agreement signed in 2002 between Oni Way and the other three mobile telecommunication operators with activity in Portugal; o 2.5 million euros (31 December 2022: 2.8 million euros) related to the Share Capital of “Fundação para as Comunicações Móveis’’, established in 2007, under an agreement entered with “Ministério das Obras Públicas, Transportes e Comunicações” and the three mobile telecommunication operators in Portugal; o 35.9 million euros (31 December 2022: 39.7 million euros) related with the program “Iniciativas E”; and o the net amount of 4.2 million euros (31 December 2022: 4.7 million euros) corresponding to the valuation of the license in the fair value allocation process resulting from the merger; 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 238 • A net amount of 67.7 million euros (31 December 2022: 71.4 million euros) corresponding to the current value of future payments related with the acquisition of rights of use for frequencies (spectrum) bands of 800 MHz, 1800 MHz, 2600 MHz, which will be used to develop 4th generation services (LTE - Long Term Evolution) and a net amount of 2.4 million euros (31 December 2022: 2.5 million euros) corresponding to the valuation of the license in the fair value allocation process resulting from the merger; • A net amount of 175 million euros related with software development (31 December 2022: 173 million euros); • A net amount of 16.3 million euros (31 December 2022: 15.7 million euros) corresponding to the future rights to use movies and series. Increases in the financial year ended on 31 December 2023 correspond mainly to the acquisition of movies and television series usage rights, for an amount of 17 million euros, and acquisition and development of software and other assets, for an amount of 95.6 million euros. On 31 December 2022 and 2023 intangible assets in progress are broken down as follows (amounts in thousands of euros): 31-12-2022 31-12-2023 Nature 16,534 16,111 Development of information systems (i) 5,877 6,843 Rights of use of films and series (ii) 2,474 3,614 Others 24,885 26,208 i. Information Systems Development refers to costs with external companies and work for the company itself, related with information systems development projects, both for the telecommunications network and for internal business and administrative systems, not yet concluded or in operation. ii. The film and series royalties correspond to films and series that have not yet started their exploitation. Impairment tests on goodwill Goodwill was allocated to the cash-generating units of each reportable segment, as follows: 31-12-2022 31-12-2023 Telco 564,799 564,799 Audiovisuals 76,601 76,601 641,400 641,400 In 2023 impairment tests were performed based on assessments in accordance with the discounted cash flow method, which corroborate the recoverability of the book value of the Goodwill. The amounts in these assessments are based on the historical performances and forecast growth of the businesses and their markets, incorporated in medium/long term approved plans. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 239 These estimates are based on the following assumptions: Audiovisuals Segment Telco NOS NOS Segment Audiovisuals Cinemas Discount rate (before taxes) 6.5% 9.1% 9.8% Assessment period 5 year 5 years 5 years EBITDA growth (2023-28) 0.0% -3.8% 3.4% Perpetuity growth rate 2.0% 2.0% 2.0% * EBITDA = Operating Income + Depreciation, Amortization and Impairment Losses + Restructuring Costs + Losses / (Gains) on disposal of assets + Other Costs / (Gains) Non-Recurring (CAGR - average 5 years) In the Telco segment, the assumptions used are based on past performance, evolution of the number of customers, expected development of regulated tariffs, current market conditions, and expectations of future development. In the cinema segment, the most affected segment by COVID-19, strong EBITDA growth is justified on the prospect of a recovery in activity to levels close to those pre-pandemic. The number of years specified in the impairment tests depends on the degree of maturity of the several businesses and markets and were determined based on the most appropriate criterion for the valuation of each cash-generating unit. Sensitivity analyses were performed to variations in the discount rate and growth rate in the perpetuity of the various reported segments, of 1 percentage point and 0.4 percentage points, respectively. In the telecommunications segment, sensitivity analysis was also performed to variations in the operational indicators RGU (Revenue Generating Unit), ARPU (Average Revenue per User), EBITDA and CAPEX, in perpetuity, of approximately 5%. In the cinema segment, sensitivity analysis was conducted on variations in the projected number of tickets sold, average revenue per ticket, EBITDA and CAPEX, in perpetuity, of approximately 5%. These simulations did not result in the need to reinforce impairment. 10. Contract costs In the financial years ended on 31 December 2022 and 2023, the movements in this item were as follows: 31-12-2021 Increases 31-12-2022 Acquisition cost Cost of attracting customers 556,967 66,505 623,472 Costs of fulfilling customer contracts 256,884 29,956 286,840 813,851 96,461 910,312 Accumulated amortizations and impairment losses Cost of attracting customers 457,570 64,580 522,150 Costs of fulfilling customer contracts 194,163 33,405 227,568 651,733 97,985 749,718 162,118 (1,524) 160,594 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 240 31-12-2022 Increases 31-12-2023 Acquisition cost Cost of attracting customers 623,472 66,129 689,601 Costs of fulfilling customer contracts 286,840 29,810 316,650 910,312 95,939 1,006,251 Accumulated amortizations and impairment losses Cost of attracting customers 522,150 65,775 587,925 Costs of fulfilling customer contracts 227,568 32,352 259,920 749,718 98,127 847,845 160,594 (2,188) 158,406 Contract costs refers to commissions paid to third parties and other costs related to raising customers’ loyalty contracts, including portability costs. These costs are amortized, systematically and consistently, with the transfer to customers of goods or services to which the asset is related (between 2 and 4 years). 11. Rights of use In the financial years ended on 31 December 2022 and 2023, the movements in this item were as follows : Disposals and Transfers 31-12-2021 Increases 31-12-2022 write-offs and others Acquisition cost Telecommunications towers and rooftops 142,921 81,398 - - 224,319 Movie theatres 118,322 6,001 - - 124,323 Transponders 91,787 1,965 - - 93,752 Equipments 149,061 16,919 (70) - 165,910 Buildings 77,480 13,858 (3) - 91,335 Fibre optic rental 40,146 (9) - - 40,137 Stores 21,445 3,102 - - 24,547 Others 41,321 2,098 (4) - 43,415 682,483 125,332 (77) - 807,738 Accumulated amortizations and impairment losses - Telecommunications towers and rooftops 56,137 13,813 - - 69,950 Movie theatres 89,550 7,772 - - 97,322 Transponders68,380 6,172 - - 74,552 Equipments 102,784 16,424 (70) - 119,138 Buildings 58,411 7,743 (3) - 66,151 Fibre optic rental 32,019 3,049 - - 35,068 Stores 16,585 3,289 - - 19,874 Others 22,554 5,410 (4) - 27,960 446,420 63,672 (77) - 510,015 236,063 61,660 - - 297,723 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 241 Disposals and Transfers 31-12-2022 Increases 31-12-2023 write-offs and others Acquisition cost Telecommunications towers and rooftops 224,319 30,203 - (4,022) 250,500 Movie theatres 124,323 16,652 - - 140,975 Transponders93,752 383 - - 94,135 Equipments 165,910 22,020 - - 187,931 Buildings 91,335 3,418 - - 94,753 Fibre optic rental 40,137 4 - - 40,141 Stores 24,547 6,508 - - 31,055 Others 43,415 3,540 - 15 46,970 807,738 82,728 - (4,007) 886,460 Accumulated amortizations and impairment losses Telecommunications towers and rooftops 69,950 17,170 - - 87,120 Movie theatres 97,322 9,024 - - 106,346 Transponders74,552 6,520 - - 81,072 Equipments 119,138 16,470 - - 135,608 Buildings 66,151 8,455 - - 74,606 Fibre optic rental 35,068 3,053 - - 38,121 Stores 19,874 3,694 - - 23,568 Others 27,960 4,974 - (5) 32,929 510,015 69,360 - (5) 579,370 297,723 13,368 - (4,002) 307,090 The item Rights of Use refers to assets associated with lease contracts which are depreciated over the duration of the respective contract, except for equipment leases with a purchase option which are depreciated over the estimated period of use. 12. Investments in jointly controlled companies and associated companies On 31 December 2022 and 2023, this item was composed as follows: 31-12-2022 31-12-2023 Investments – equity method Finstar 32,811 22,812 Dreamia 2,347 1,544 Mstar 3,023 3,698 Other companies 780 1,386 38,961 29,440 * Consolidated from Finstar and ZAP Media 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 242 Movements in “Investments in jointly controlled companies and associated companies” in the financial year ended on 31 December 2022 and 2023 were as follows: 12M 22 12M 23 As of January 1 17,016 38,961 Gains / (losses) of exercise (Note 37) 22,123 4,227 Bright City acquisition (Note 5) - 255 CEiiA acquisition (Note 5) - 150 Big Picture 2 Films disposal (Note 5) - (50) Dividends received Mstar - (622) Changes in equity (178) (13,481) As of December 31 38,961 29,440 Amounts related to changes in equity of the companies registered by the equity method of consolidation are mainly related to foreign exchange impacts of the investment in currencies other than euro. The assets, liabilities and results of the jointly controlled companies and associated companies in the financial year ended on 31 December 2022 and 2023, are as follows: 31-12-2022 Non-Non-Current Current Entity current current Equity Revenue Net income % Held assets liabilities assets liabilities Sport TV 84,507 99,229 71 159,280 24,385 208,331 12,080 25.00% Dreamia 876 16,985 6,924 6,066 4,871 16,568 (1,272) 50.00% Finstar 77,697 199,314 - 167,640 109,371 339,309 68,907 30.00% Mstar 1,064 16,336 - 9,009 8,391 30,665 2,927 30.00% Upstar 976 20,089 - 18,873 2,192 21,423 920 30.00% Big Picture 2 Films 770 893 522 780 361 3,270 (172) 20.00% Dualgrid 6 267 - 176 97 516 38 50.00% Dreamia S.L. 14,967 1,126 6,363 2,302 7,428 2,213 (9) 50.00% 180,863 354,239 13,880 364,126 157,096 622,295 83,419 31-12-2023 Non-Non-Current Current Entity current current Equity Revenue Net income % Held assets liabilities assets liabilities Sport TV 81,581 47,757 48 106,093 23,197 192,206 (1,188) 25.00% Dreamia 963 12,952 7,146 4,029 2,740 17,229 (2,132) 50.00% Finstar 44,144 130,496 - 98,622 76,018 205,495 12,176 30.00% Mstar 871 22,476 - 13,355 9,992 27,591 5,796 30.00% Upstar 1,420 18,377 - 15,672 4,125 17,467 1,339 30.00% Dualgrid 4 258 - 174 88 575 7 50.00% Dreamia S.L. 15,190 1,156 6,551 2,319 7,476 2,307 47 50.00% BrightCity S.A. 61 1,015 - 894 182 1,388 7 50.00% CEiiA 24,809 28,080 13,475 34,731 4,683 21,813 (2,859) 16.20% 169,043 262,567 27,220 275,889 128,501 486,071 13,193 Sport TV's annual reporting period is from July 1 to June 30 (in line with the soccer season), so in the accounts presented in the tables above, revenues and net income correspond to the figures for the 12-month reporting period in each of the financial years. ** The amounts presented correspond to the year ending 31 December 2022. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 243 Indicators presented in the tables above do not include consolidated adjustments which were considered when determining the Group's interest in the results, assets and liabilities of jointly controlled and associated companies. In the financial year ended on 31 December 2023, the assets, liabilities and results of jointly controlled company ZAP Media (100% held by Finstar) are: 31-12-2023 Non-current Current Non-current Current Entity Equity Revenues Net income assets assets liabilities liabilities ZAP Media 17,306 7,957 - 14,836 10,427 34,881 1,506 The differences between the individual accounts (prepared in accordance with Angolan regulations) and the Finstar Group (Finstar + ZAP Media) correspond, predominantly, to the annulment of balances and transactions between the companies and the adjustment because the companies were in a hyperinflationary economy from 2017 to September 2019 (IAS 29). The Group has several controls regarding the reporting process of its jointly controlled and associated companies. The amounts included in the reported financial statements are subject to audit in cases where it is legally required. In the remaining cases and in those where the audit has not been completed, specific review procedures are carried out by the Group. The Board of Directors believes that the seizure of assets to Mrs. Isabel dos Santos, in the specific case of the shares held by her in Finstar, ZAP Media, Mstar and Upstar (where she holds 70% of the capital), does not change the control profile, in this case joint control as defined in IFRS 11. 13. Accounts receivable - others On 31 December 2022 and 2023, this item was composed as follows: 31-12-2022 31-12-2023 Current Non-current Current Non-current Accounts receivable 5,646 5,640 4,322 4,392 Advances to suppliers 11,965 - 11,597 - 17,611 5,640 15,919 4,392 Impairments of other receivables (979) (882) (237) (28) 16,632 4,758 15,682 4,364 On 31 December 2023, this item corresponds predominantly to: • Short-term loans, medium and long-term loans from Group and interests' receivable; and • Associated companies, the amount receivable of 1.65 million euros from the sale of NOS International Carrier Services; Additionally, on 31 December 2023, advances to suppliers correspond predominantly to amounts paid under soccer rights contracts and other operating costs. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 244 The summary of movements in impairment of other receivable in other accounts receivable is as follows: 12M 22 12M 23 As of January 1 1,524 1,861 Increases (Note 36) 231 94 Reductions (Note 37) - (854) Utilizations, transfers and others 106 (836) As of December 31 1,861 265 14. Taxes payable and receivable On 31 December 2022 and 2023, these items were composed as follows: 31-12-2022 31-12-2023 Receivable Payable Receivable Payable Non-current Debt regularization 369 - 51 - 369 - 51 - Current Value-added tax (VAT) 6,484 21,891 5,971 19,291 Income taxes - 13,070 31,063 - Personnel income tax witholdings - 1,883 - 1,715 Social Security contributions - 1,865 - 2,056 Others 422 133 16 151 6,906 38,842 37,050 23,213 7,275 38,842 37,101 23,213 On 31 December 2022 and 2023, the amounts of CIT (Corporate Income Tax) receivable and payable were composed as follows: 31-12-2022 31-12-2023 Estimated current tax on income (45,776) (19,011) Payments on account 30,596 48,129 Withholding income taxes 966 1,011 Others 1,144 934 (13,070) 31,063 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 245 15. Other non-current financial assets On 31 December 2022 and 2023, this caption is composed as follows: 31-12-2022 31-12-2023 TechTransfer Fund 1,415 1,355 Didimo 963 1,415 Seems Possible 800 1,200 Reckon.ai 500 854 MindProber 500 500 SkillAugment 300 175 Others 770 529 5,248 6,028 During the year ended on 31 December 2022, NOS reinforced its investment in the start-up Reckon.ai and invested in the start-up Didimo, which develops 3D digital avatars based on photographs, in the start-up MindProber, which has developed a pioneering platform capable of measuring the emotional impact that multimedia content has on consumers and in the start-up SkillAugment (KIT-AR), which develops solutions using emerging technologies such as augmented reality and artificial intelligence. During the year ended on 31 December 2023, NOS reinforced its investment in the TechTransfer Fund, in the company Reckon.ai and in the company Seems Possible. During the same period, impairments were recorded on the valuations of the TechTransfer Fund and the company SkillAugmented, in the amounts of 81 thousand euros and 125 thousand euros, respectively. 16. Income tax expense NOS and its subsidiaries are subject to IRC - Corporate Income Tax - at the rate of 21% on taxable amount (taxable profit less eventual tax losses subject to deduction), plus IRC surcharge at the maximum rate of 1.5% on taxable profit, giving an aggregate rate of approximately 22.5%. Additionally, following the introduction of austerity measures approved by Law 66-B/2012 of 31 December, and respective addendum published by Law 114/2017 of 29 December, this rate was raised by 3% and will be applied to the company’s taxable profit between 1.5 million euros and 7.5 million euros, by 5% to the company’s taxable profit which exceeds 7.5 million euros, and by 9% to the company’s taxable profit above 35 million euros. In the calculation of taxable income, amounts, which are not fiscally allowable, are added to or subtracted from the book results. These differences between accounting income and taxable income may be of a temporary or permanent nature. NOS is taxed in accordance with the Special Regime for Taxation of Corporate Groups, which covers the companies in which it directly or indirectly holds at least 75% of their share capital and which fulfil the requirements of Article 69 of the IRC Code. The companies covered by the Special Regime for Taxation of Corporate Groups in 2023 are: • NOS SGPS (parent company) • Empracine • Lusomundo Imobiliária • Lusomundo SII 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 246 • NOS Açores • NOS Audiovisuais • NOS Audiovisuais SGPS • NOS Cinemas • NOS Comunicações • NOS Inovação • NOS Internacional SGPS • NOS Audio – Sales and Distribution • NOS Madeira • NOS Mediação de Seguros • NOS Sistemas • NOS Technology • NOS Wholesale • NOS Corporate Center • NOS Property • Per-mar • Sontária • Teliz Under current legislation, tax declarations are subject to review and correction by tax authorities for a period of four years, except when tax losses have occurred or tax benefits have been obtained, whose term, in these cases, matches the deadline to use them. It should be noted that in the event of inspections, appeals, or disputes in progress, these periods might be extended or suspended. The Board of Directors of NOS, based on information from its tax advisers, believes that these and any other revisions and corrections to these tax declarations, as well as other contingencies of a fiscal nature, will not have a significant effect on the consolidated financial statements as at 31 December 2023. A) Deferred tax NOS and its associated companies have reported deferred tax relating to temporary differences between the taxable basis and the book amounts of assets and liabilities, and tax losses carried forward at the date of the statement of financial position. The movements in deferred tax assets and liabilities for the financial year ended on 31 December 2022 and 2023 were as follows: 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 247 Income 31-12-2021 Equity 31-12-2022 (Note B) Deferred income taxes assets Impairment of other receivable 6,531 2,757 - 9,288 Inventories 2,539 40 - 2,579 Other provisions and adjustments 46,613 (1,987) - 44,626 Intragroup gains 20,892 5,959 - 26,851 Assets recognized under application of IFRS 16 4,739 1,421 - 6,160 Derivatives 76 12 (38) 50 81,390 8,202 (38) 89,554 Deferred income taxes liabilities Tax litigation 42,167 451 - 42,618 Revaluations of assets as part of the allocation of fair value to the assets 2,429 (194) - 2,235 acquired in the merger Derivatives 116 (26) 2,397 2,487 Others 2,614 171 - 2,785 47,326 402 2,397 50,125 Net deferred tax 34,064 7,800 (2,435) 39,429 Income 31-12-2022 Equity 31-12-2023 (Note B) Deferred income taxes assets Impairment of other receivable 9,288 (2,079) - 7,209 Inventories 2,579 1,874 - 4,453 Other provision and adjustments 44,626 (3,657) - 40,969 Intragroup gains 26,851 (7,329) - 19,522 Assets recognized under application of IFRS 16 6,160 3,235 - 9,395 Derivatives 50 11 297 358 89,554 (7,945) 297 81,906 Deferred income taxes liabilities Tax litigation 42,618 1,391 - 44,009 Revaluations of assets as part of the allocation of fair value to the assets 2,235 126 - 2,361 acquired in the merger Derivatives 2,487 - (1,220) 1,267 Others 2,785 (915) - 1,870 50,125 602 (1,220) 49,507 Net deferred tax 39,429 (8,547) 1,517 32,399 On 31 December 2023, the deferred tax assets related to the other provisions and adjustments are mainly due: • impairments and acceleration of amortizations beyond the acceptable fiscally and other adjustments in fixed tangible assets and intangible assets, amounted to 25.6 million euros (31 December 2022: 31.2 million euros); and • other provisions amounted to 15.4 million euros (31 December 2022: 8.6 million euros). 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 248 In the financial year ended on 31 December 2023, the item “Tax litigation” includes liabilities, related to ongoing tax processes, of which highlights: • Future credits transferred: for the financial year ended on 31 December 2010, NOS SA was notified of the Report of Tax Inspection, when it is considered that the increase, when calculating the taxable profit for the year 2008 of the amount of 100 million euros, with respect to initial price of future credits transferred to securitization, is inappropriate. Given the principle of periodization of taxable income, NOS SA was subsequently notified of the improper deduction of the amount of 20 million euros in the calculation of taxable income between 2009 and 2013. Given that the increase made in 2008 was not accepted due to not complying with Article 18 of the CIRC, also in the years following, the deduction corresponding to credits generated in that year, will eliminate the calculation of taxable income, to meet the annual amortization hired as part of the operation (20 million per year for 5 years). NOS SA challenged the decisions regarding the 2009 to 2013 fiscal year and will appeal for the judicial review in due time the decision regarding the 2008 to 2013 fiscal year. Regarding the year 2008, the Administrative and Fiscal Court of Porto has already decided unfavorably, in March 2014. The company has appealed. In March 2021, NOS SA was notified of the dismissal issued by the Court of Appeal. Not accepting the decision, NOS filed a Review Appeal with the Supreme Administrative Court, pending, in this regard, the issuance of the respective admissibility order. In May 2022, NOS was notified of the decision which did not admit the review appeal. An appeal has been filed against the Constitutional Court with suspensive effects on the transit of that non-admission decision. In addition to that appeal, an application was lodged in the file for recognition of the invalidity of the decision, for lack of reasoning. Both applications were rejected and the means of reaction in the case relating to 2008 have been exhausted. The same outcome can be expected in the cases relating to 2009 to 2013. • Supplementary Capital: the fiscal authorities believe that NOS SA has broken the principle of full competition under the terms of (1) of Article 58 of the Corporate Tax Code (CIRC) – currently Article 63 –, by granting supplementary capital to its subsidiary NOS, without having been remunerated at a market interest rate. In consequence, it has been notified, with regard to the years 2004, 2005, 2006 and 2007 of corrections to the determination of its taxable income in the total amount of 20.5 million euros. NOS SA contested the decision with regard to all the above-mentioned years. As for the year 2004, the Court has decided favorably. This decision is concluded (favorably), originating a reversal of provisions, in 2016, in the amount of 1.3 million euros plus interest. As for the years 2006 and 2007, the Porto Fiscal and Administrative Court has already decided unfavorably. As for the year 2005, the Court decided favorably, having been concretized by the Tax Authorities, which meant the provision reversal of one million euros, in 2018. At the end of 2023, it was concluded that the remaining open provision should be reversed, given the conviction that the processes still underway will be successful. The revaluations of assets refer to the appreciation of telecommunications licenses and other assets at the merger of Group companies . On 31 December 2023, deferred tax assets were not recognized for an amount of 0.4 million euros, corresponding mainly to tax incentives and losses. Deferred tax assets were recognized when it is probable that taxable profits will occur in future that may be used to absorb tax losses or deductible tax differences. This assessment was based on the business plans of the Group’s companies, which are regularly revised and updated. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 249 On 31 December 2023, the tax rate used to calculate the deferred tax assets relating to tax losses carried forward was 21% (2022: 21%). In the case of temporary differences, the rate used was 22.5% (2022: 22.5%) increased to a maximum of 6.3% (2022: 6.3%) of state surcharge when the taxation of temporary differences in the estimated period of application of the state surcharge was perceived as likely. Tax benefits, related to deductions from taxable income, are considered 100%, and in some cases, their full acceptance is conditional upon the approval of the authorities that grants such tax benefits. Under the terms of Article 88 of the IRC Code, the Company is subject to autonomous taxation on a series of charges at the rates set out in that Article. With the State Budget for 2023, tax losses no longer have a time limit for being carried forward, but there will be a limitation on their deduction up to 65% of the taxable profit generated. B) Effective tax rate reconciliation In the financial year ended on 31 December 2022 and 2023, the reconciliation between the nominal and effective rates of tax was as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Income before taxes 34,957 257,107 51,826 200,088 Statutory tax rate 22.5% 22.5% 22.5% 22.5% Estimated tax 7,865 57,849 11,661 45,020 Permanent differences (5,387) (17,373) (1,107) (2,079) Tax benefits (1,717) (11,601) (10,979) (25,501) State surcharge 1,519 9,458 10 6,440 Autonomous taxation 154 630 148 586 Others (747) (6,300) (2,829) (5,712) Income taxes 1,687 32,663 (3,096) 18,754 Effective Income tax rate 4.8% 12.7% -6.0% 9.4% Income tax 6,699 40,463 (13,681) 10,207 Deferred tax (5,012) (7,800) 10,585 8,547 1,687 32,663 (3,096) 18,754 On 31 December 2022 and 2023, the permanent differences were composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Equity method (Note 37) (5,148) (22,123) (432) (5,081) Capital gains (17,497) (54,702) (3,674) (3,674) Others (1,298) (388) (813) (485) (23,943) (77,213) (4,919) (9,240) 22.5% 22.5% 22.5% 22.5% (5,387) (17,373) (1,107) (2,079) 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 250 In the financial year ended on 31 December 2022, the capital gains heading refers predominantly to capital gains generated from the sale of mobile sites, taxed at 50%, resulting from the reinvestment of the realizable value of assets held for more than one year. Additionally, the amount registered as fiscal benefits relates to the register of deferred taxes and the use of tax benefits for which there was no record of deferred taxes: SIFIDE (Business Research and Development Tax Incentives System), a tax benefit introduced by Law 40/2005 of 3 August; fiscal benefit – RFAI (Investment Tax Incentive Regime) introduced by Law 10/2009 of 10 March; fiscal benefit of Incentive to Capitalization of Companies (ICE) – introduced by the Law 20/2023 of 17 May; and provisions for used tax incentives. 17. Inventories On 31 December 2022 and 2023, this item was composed as follows: 31-12-2022 31-12-2023 Inventories Telco 75,818 63,317 Audiovisuals 566 608 76,384 63,925 Impairment of inventories Telco (9,161) (15,710) (9,161) (15,710) 67,223 48,215 The movements occurred in impairment adjustments were as follows: 12M 22 12M 23 As of January 1 8,935 9,161 Increase and decrease - Cost of products sold (Note 34) 1,817 7,771 Utilizations / Others (1,591) (1,222) As of December 1 9,161 15,710 18. Accounts receivables – Trade On 31 December 2022 and 2023, this item was as follows : 31-12-2022 31-12-2023 Trade receivables 444,218 486,090 Unbilled revenues 89,805 90,943 534,023 577,033 Impairment of trade receivable (214,582) (213,341) 319,441 363,692 The amounts to be invoiced correspond mainly to the value of contractual obligations already met or partially met and whose invoicing will occur subsequently. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 251 The movements occurred in impairment adjustments were as follows: 12M 22 12M 23 As of January 1 197,628 214,582 Increases and decreases (Note 36) 19,333 11,941 Penalties 18,365 25,639 Utilizations / Others (20,744) (38,821) As of December 31 214,582 213,341 Penalties correspond to the invoiced penalties, in the period, for which the full expected credit losses are registered, and the register was made by deduction from the respective revenue. 19. Contract assets On 31 December 2023, the contract assets, in the amount of 47 million euros (31 December 2022: 60.1 million euros), correspond to discounts, attributed to customers at the time of the sale of equipment (included in the telecommunications packages) and which are allocated to monthly fees / services rendered, within the scope of the allocation of credits to different types of performance obligations, according to IFRS 15. These assets are deferred, at the time of sale of the equipment, and recognized over the contract period (service rendered). 20. Prepaid expenses On 31 December 2022 and 2023, this item was composed as follow: 31-12-2022 31-12-2023 Costs related to specific corporate projects 10,941 14,248 Programming costs i) 21,091 9,617 Costs of litigation procedure activity ii) 5,591 2,707 Repair and maintenance 1,875 1,817 Insurance 1,333 1,450 Advertising 132 374 Others iii) 11,269 14,212 52,232 44,425 i. Programming costs correspond to costs inherent to the availability of channels, namely fixed fees, billed in advance. This cost is recognized in the period in which the channel is made available and transmitted, and recognized as a programming cost, in the Consolidated Income Statement. ii. Deferred costs related to collection actions correspond to services paid in advance to external entities as part of the processes for recovering customer debts / collection actions. These costs are recognized as the service is provided. iii. “Others” includes deferred costs, mainly related to expenses to be recognized from various supplies and external services, such as specialized works, maintenance and repair work and others, billed in advance by suppliers (quarterly or annual billing), the respective expense being recognized in the income statement as the service is provided. The increase in this item results mainly from expenses paid in advance at the beginning of each year in respect of the current year. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 252 21. Derivative financial instruments Interest rate derivatives On 31 December 2023, NOS have 3 interest rate swaps in a total amount of 180 million euros (31 December 2022: 180 million euros) and 9 zero cost collars, amounting a total of 377.5 million euros, contracted in 2023. Exchange rate derivatives At the date of the statement of the financial position there are foreign currency forwards open worth 19,916 thousand euros (31 December 2022: 41,147 thousand euros). 31-12-2022 Notional Assets Liabilities Current Non-current Current Non-current Interest rate derivatives 180,000 - 10,947 - - Exchange rate derivatives 41,147 - 302 397 - 221,147 - 11,249 397 - 31-12-2023 Assets Liabilities Notional Current Non-current Current Non-current Interest rate derivatives 557,500 - 5,386 - 1,036 Exchange rate derivatives 20,331 - 197 441 - 577,416 - 5,583 441 1,036 Movements during the financial year ended on 31 December 2022 and 2023 were as follows: 31-12-2021 Income Capital 31-12-2022 Fair value interest rate derivatives (10) - 10,957 10,947 Fair value exchange rate derivatives 313 (157) (251) (95) Fair value equity swaps (218) 32 186 - Derivatives 85 (125) 10,892 10,852 Deferred income tax liabilities (116) 26 (2,397) (2,487) Deferred income tax assets 76 12 (38) 50 Deferred income tax (40) 38 (2,435) (2,437) 45 (87) 8,457 8,415 31-12-2022 Income Capital 31-12-2023 Fair value interest rate derivatives 10,947 - (6,597) 4,350 Fair value exchange rate derivatives (95) (35) (114) (244) Derivatives 10,852 (35) (6,711) 4,106 Deferred income tax liabilities (2,487) - 1,220 (1,267) Deferred income tax assets 50 11 297 358 Deferred income tax (2,437) 11 1,517 (909) 8,415 (24) (5,194) 3,197 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 253 22. Cash and cash equivalents On 31 December 2022 and 2023, this item was composed as follows: 31-12-2022 31-12-2023 Cash 1,017 887 Current deposits - 9,785 Term deposits 14,198 7,486 Cash and cash equivalents 15,215 18,158 Bank overdrafts (Note 25) 7,136 9,668 Cash and cash equivalents for the purposes of the Cash Flow Statement 8,079 8,490 On 31 December 2023, the “Term deposits” have maturity of less than 10 days and bear interest at market rates. On 31 December 2022 and 2023, there are 5.6 million euros and 4.5 million euros, respectively, recorded in the item "Current deposits" and "Term deposits" whose use is restricted, because they are held by the Capital Fund NOS 5G, subscribed by NOS. 23. Shareholder’s equity 23.1. Share capital On 31 December 2022 and 2023, the share capital of NOS was 855,167,890.80 euros, respectively. On 31 December 2023, the share capital is represented by 515,161,380 shares registered book-entry shares, with a nominal value of 1.66 euro each (2022: 1.66 euro each). The main shareholders as of 31 December 2022 and 2023 are: 31-12-2022 31-12-2023 Number of % Share Number of % Share shares capital shares capital Sonaecom, SGPS, S.A. 134,322,268 26.07% 192,527,188 37.37% ZOPT, SGPS, SA 134,322,269 26.07% 134,322,269 26.07% Mubadala Investment Company 25,758,569 5.00% 25,758,569 5.00% Sonae, SGPS, S.A. 55,524,516 10.78% - 0.00% Total 349,927,622 67.93% 352,608,026 68.45% According to paragraphs b) and c) of number 1 of article 20º and article 21º of the Portuguese Securities Code, a qualified shareholding of 26.07% of the share capital and voting rights of NOS, SGPS, S.A. as calculated in the terms of article 20º of the Portuguese Securities Code, is attributable to the following companies: • Sonaecom and, consequently, to all entities in a control relationship with Sonaecom, SGPS, S.A., namely Sontel, BV and Sonae, SGPS, S.A., directly or indirectly controlled by Efanor Investimentos, SGPS, S.A., also as a result of the mentioned control relationship (as per announcements made to the CMVM by Sonae and Sonaecom on July 21, 2023). As of 29 November 2017, Efanor Investimentos SGPS, S.A. ceased to be a controlling shareholder under the terms and for the purposes of articles 20 and 21 of the Portuguese Securities Code. • ZOPT - This qualified holding is attributable to the companies Kento Holding Limited (“Kento”), BV, as well as to Mrs. Isabel dos Santos, being (i) Kento and Unitel International directly and indirectly controlled by Mrs. Isabel dos Santos; (ii) a ZOPT, a society controlled by Kento Holding Limited, Unitel International Holdings, BV. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 254 23.2. Capital issued premium On 27 August 2013, following the completion of the merger between ZON and Optimus SGPS, the Company's share capital was increased by 856,404,278 euros, corresponding to the total number of issued shares (206,064,552 shares), based on the closing market price of 27 August 2013. The capital increase is detailed as follows: • share capital in the amount of 2,060,646 euros; • premium for issue of shares in the amount of 854,343,632 euros. Additionally, the premium for issue of shares was deducted for an amount of 125 thousand euros related to costs with the respective capital increase. On 21 April 2022, was approved in the Annual General Meeting of shareholders of NOS SGPS, an increase of share capital, by incorporation of share premium, in the amount of 850,016,277.00, through the increase of the nominal value of the total shares representing the share capital in the amount of €1.65. The nominal value of each share is now €1.66. As of 31 December 2023, the amount of share issue premium is 4,202,356 euros (2022: 4,202,356 euros). The capital issued premium is subject to the same rules as for legal reserves and can only be used: • To cover part of the losses on the balance of the year that cannot be covered by other reserves; • To cover part of the losses carried forward from the previous year that cannot be covered by the net income of the year or by other reserves; • To increase the share capital. 23.3. Own shares Company law regarding own shares requires the establishment of a non-distributable reserve of an amount equal to the purchase price of such shares, which becomes frozen until the shares are disposed of or distributed. In addition, the applicable accounting rules determine that gains or losses on the disposal of own shares are stated in reserves. On 31 December 2023 there were 3,736,403 own shares, representing 0.7253% of share capital (31 December 2022: 4,008,391 own shares, representing 0.7781% of the share capital). The movements occurred in the financial year ended on 31 December 2022 and 2023 were as follows: Quantity Value Balance as of 1 January 2022 3,002,427 12,353 Acquisition of own shares 1,868,129 7,087 Distribution of own shares - share incentive scheme (791,257) (3,186) Distribution of own shares - other remunerations (70,908) (286) Balance as of 31 December 2022 4,008,391 15,968 Balance as of 1 January 2023 4,008,391 15,968 Acquisition of own shares 1,234,638 5,171 Distribution of own shares - share incentive scheme (1,479,000) (5,970) Distribution of own shares - other remunerations (27,626) (110) Balance as of 31 December 2023 3,736,403 15,059 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 255 23.4 Reserves Legal reserve Company law and NOS Articles of Association establish that at least 5% of the Company’s annual net profit must be used to build up the legal reserve until it corresponds to 20% of the share capital. This reserve cannot be distributed except in the event of liquidation of the company, but it may be used to absorb losses after all other reserves have been exhausted, or for incorporation in the share capital. Other reserves Under Portuguese law, the amount of distributable reserves is determined according to the individual financial statements of the company prepared in accordance with IAS / IFRS. Thus, on 31 December 2023 NOS had reserves, which by their nature are considered distributable for an amount of approximately 176.4 million euros, not including the net income. Dividends The General Meeting of Shareholders held on 21 April 2022 approved the Board of Directors' proposal to pay an ordinary dividend per share of €0.278, in the amount of €143,215 thousand. The dividend attributable to own shares amounted to approximately 858 thousand euros. The dividend was paid on 9 May 2022. The General Meeting of Shareholders held on 5 April 2023 approved the Board of Directors' proposal to pay an ordinary dividend per share of €0.430, in the amount of €221,519 thousand. The dividend attributable to own shares amounted to approximately 1,532 thousand euros. The dividend was paid on 21 April 2023. 24. Non-controlling interests The movements of the non-controlling interests occurred during the financial year ended on 31 December 2022 and 2023 and the results attributable to non-controlling interests for the year are as follows: Attributable 31-12-2021 Others 31-12-2022 profits NOS Madeira 5,289 142 1 5,432 NOS Açores 1,090 (272) 1 819 6,379 (130) 2 6,251 Attributable 31-12-2022 Others 31-12-2023 profits NOS Madeira 5,432 578 (4) 6,006 NOS Açores 819 (239) (1) 579 6,251 339 (5) 6,585 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 256 25. Borrowings On 31 December 2022 and 2023, the composition of borrowings was as follows: 31-12-2022 31-12-2023 Current Non-current Current Non-current Loans - nominal value 350,136 655,000 152,268 951,000 Debenture loan 300,000 290,000 75,000 350,000 Commercial paper 43,000 365,000 67,600 601,000 Bank overdrafts 7,136 - 9,668 - Loans - accruals and deferrals 2,832 (541) 5,421 (1,183) Loans - amortized cost 352,968 654,459 157,689 949,817 Leases 74,485 555,722 79,379 547,083 427,453 1,210,181 237,069 1,496,900 During the financial year ended on 31 December 2023, the average cost of debt of the used lines was approximately 3.4% (2022: 1.2%). The average global financing cost (used and unused lines) during the financial year ended on 31 December 2023 was approximately 3.5% (2022: 1.3%). On 31 December 2023 there is no default in terms of capital, interest, conditions for redemption on loans payable or other commitments. 25.1. Debenture loans On 31 December 2023, NOS has a total amount of 425 million euros of bonds issued: • A bond loan in the amount 50 million euros placed by Caixa Geral de Depósitos in July 2019 and maturing in July 2024. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount 25 million euros placed by Medio Banca in July 2019 and maturing in July 2024. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount of 15 million euros placed by BPI in July 2021 and maturing in July 2026.The loan bears interest at a variable rate, indexed to the Euribor and paid on a quarterly basis. • A bond loan in the amount of 75 million euros placed by Caixa Geral de Depósitos in March 2022 and maturing in March 2027. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount of 75 million euros placed by BPI in July 2022 and maturing in March 2027. The loan bears interest at variable rates, indexed to Euribor and paid quarterly. • A bond loan in the amount 50 million euros placed by BPI in April 2023 and maturing in January 2028. The loan bears interest at variable rates, indexed to Euribor and paid quarterly. • A bond loan in the amount 75 million euros placed by Caixa Geral de Depósitos in April 2023 and maturing in April 2028. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount of 60 million euros placed by BPI in December 2023 and maturing in June 2025. The loan bears interest at variable rates, indexed to Euribor and paid every semi-annually. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 257 On 31 December 2023, an amount of 2,751 thousand euros, corresponding to interest and commissions, was added to this amount and recorded in the item “Loans - accruals and deferrals”. 25.2. Commercial paper On 31 December 2023, the Company has borrowings of 668 million euros in the form of commercial paper of which €42.6 million issued under programmes without underwriting. The total amount contracted, under underwriting securities, is of 925 million euros, corresponding to 17 programmes, with 7 banks, 825 million euros of which bear interest at market rates and 100 million euros are issued in fixed rate. Commercial paper programmes with maturities over one-year totaling 825 million euros (of which 668.5 million euros have been used as of 31 December 2023), since the Company can renew unilaterally current issues on or before the programmes’ maturity dates and because they are underwritten by the organizer. As such, this amount, although having a current maturity, it was classified as non-current for presentation purposes in the financial position statement. On 31 December 2023 an amount of 1,487 thousand euros, corresponding to interest and commissions, was deducted to this amount, and recorded in the item “Loans - accruals and deferrals”. 25.3. Leases AOn 31 December 2022 and 2023, the leases refer mainly to rental agreements for telecommunications towers, movie theaters, equipment, shops and vehicles, exclusive acquisition of satellite capacity and rights to use distribution network capacity. The movements in lease liabilities for the financial years ended on 31 December 2022 and 2023 are as follows: Rights of use Interest 31-12-2021 Payments Others 31-12-2022 (Note 11) (Note 41) Telecommunications towers and 378,750 132,145 22,774 (50,108) - 483,561 rooftops Movie theatres 32,736 6,001 382 (9,755) - 29,364 Transponders 32,046 1,965 1,470 (6,825) - 28,656 Equipment 39,286 16,919 499 (17,624) - 39,080 Buildings 22,052 13,858 328 (9,407) - 26,831 Fibre optic rental 7,250 (9) 43 (2,725) - 4,559 Stores 5,660 3,102 64 (3,553) - 5,273 Others 16,225 2,098 367 (5,807) - 12,883 534,005 176,079 25,927 (105,804) - 630,207 Rights of use Interest 31-12-2022 Payments Others 31-12-2023 (Note 11) (Note 41) Telecommunications towers and 483,561 30,203 26,575 (61,626) 1,505 480,218 rooftops Movie theatres 29,364 16,652 1,016 (9,846) - 37,186 Transponders28,656 383 1,151 (11,838) - 18,352 Equipment 39,080 22,020 837 (15,782) (9,511) 36,644 Buildings 26,831 3,418 583 (6,864) 5,867 29,835 Fibre optic rental 4,559 4 121 (3,189) 969 2,464 Stores 5,273 6,508 219 (3,765) - 8,235 Others 12,883 3,540 476 (4,541) 1,170 13,528 630,207 82,728 30,978 (117,451) - 626,462 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 258 Leases – payments 31-12-2022 31-12-2023 Until 1 year 120,515 111,908 Between 1 and 5 year 305,011 296,689 Over 5 years 420,531 391,690 846,057 800,287 Future financial costs (leases) (215,850) (173,825) Present value of lease liabilities 630,207 626,462 Leases – present value 31-12-2022 31-12-2023 Until 1 year 74,485 79,379 Between 1 and 5 years 214,269 190,875 Over 5 years 341,453 356,208 630,207 626,462 26. Provisions On 31 December 2022 and 2023, the provisions were as follows: 31-12-2022 31-12-2023 Litigation and other - i) 32,158 30,345 Dismantling and removal of assets - ii) 22,294 22,254 Contingent liabilities - iii) 22,908 22,908 Contingencies - other - iv) 3,907 4,647 81,267 80,154 i. On 31 December 2023, the amount under the item "Litigation and other" corresponds to provisions to cover the legal and others claims in-progress; ii. The amount under the item "Dismantling and removal of assets "refers to the estimated future costs discounted to the present value, related with the termination of the use of the space where there are telecommunication towers and cinemas; iii. The amount in the item "Contingent liabilities" refers to several provisions recorded for present but not likely obligations, related to the merger by incorporation of Optimus SGPS, namely: a) Extraordinary contribution toward the fund for the compensation of the net costs of the universal service of electronic communications (CLSU): The Extraordinary contribution toward the fund for the compensation of the net costs of the universal service of electronic communications (CLSU) is legislated in Articles 17 to 22 of Law no 35/2012, of 23 August. From 1995 until June 2014, MEO, SA (former PTC) was the sole provider for the universal service of electronic communications, having been designated administratively by the government, i.e. without a formal contest procedure led by the government for that effect, which constitutes an illegality, by the way acknowledged by the European Court of Justice who, through its decision taken in June 2014, condemned the Portuguese State to pay a fine of 3 million euros for illegally designating MEO. In accordance with Article 18 of the abovementioned Law 35/2012, of 23 August, the net 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 259 costs incurred by the operator responsible for providing the universal service, approved by ANACOM, must be shared between other companies who provide, in national territory public communication networks and publicly accessible electronic communications services. NOS is therefore within the scope of this extraordinary contribution given that MEO has being requesting the payment of CLSU to the compensation fund of the several periods during which it was responsible for providing the services. In accordance with law, the compensation fund can be activated to compensate the net costs of the electronic communications universal service, relative to the period before the designation of the provider by tender, whenever, cumulatively (i) there are net costs, considered excessive, the amount of which is approved by ANACOM, following an audit to their preliminary calculation and support documents, which are provided by the universal service provider, and (ii) the universal service provider requester the Government compensation for the net costs approved under the terms previously mentioned. Therefore: – In 2013, ANACOM deliberated to approve the final results of the CLSU audit presented by MEO, relative to the period from 2007 to 2009, in a total amount of 66.8 million euros, a decision that was contested by the Company. In January 2015, ANACOM issued the settlement notes in the amount of 18.6 million euros related to NOS, SA, NOS Madeira and NOS Açores which were contested by NOS and for which a bail was presented by NOS SGPS (Note 44) to avoid Tax Execution Proceedings. The guarantees have been accepted by ANACOM. – In 2014, ANACOM deliberated to approve the final results of the CLSU audit by MEO, relative to the period from 2010 to 2011, in a total amount of 47.1 million euros, a decision also contested by NOS. In February 2016, ANACOM issued the settlement notes in the amount of 13 million euros, related to NOS, SA, NOS Madeira and NOS Açores which were also contested and for which it was before also presented bail by NOS SGPS in order to avoid the promotion of respective tax enforcement processes. The guarantees that have been accepted by ANACOM. – In 2015, ANACOM deliberated to approve the final results of the audit to CLSU presented by MEO relative to the period from 2012 to 2013, in the amount of 26 million euros and 20 million euros, respectively, and as the others, it was contested by NOS. In December 2016, the notices of settlement were issued relating to NOS, SA, NOS Madeira and NOS Açores, corresponding to that period, in the amount of 13.6 million euros which were contested by NOS and for which guarantees have been already presented by NOS SGPS in order to avoid the promotion of the respective proceedings of tax execution. The guarantees were also accepted by ANACOM. – In 2016, ANACOM approved the results of the audit to the CLSU presented by MEO related with the period between January and June 2014, for an amount of 7.7 million euros that was contested by NOS, in standard terms. – In 2017, NOS, SA, NOS Madeira and NOS Açores were notified of the decision of ANACOM concerning the entities that are obliged to contribute toward the compensation fund and the setting of the values of contributions corresponding to CLSU that must be compensated and relating to the months of 2014 in which MEO still remained as provider of the Universal Service, which establishes for all these companies a contribution around 2.4 million euros. In December 2017, the settlement notes relating to NOS, SA, NOS Madeira and NOS Açores, concerning that period, were issued in the amount of approximately 2.4 million euros, which were challenged by NOS and for which guarantees have also been presented by NOS SGPS, in order to avoid the promotion of their tax enforcement procedures. The guarantees were also accepted by ANACOM. It is the opinion of the Board of Directors of NOS that these extraordinary contributions to Universal Service (not designated through a tender procedure) flagrantly violate the Directive of Universal Service. Moreover, considering the existing legal framework since NOS began its activity, the request of payment of the extraordinary contribution violates the principle of the protection of confidence, recognized on a legal and 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 260 constitutional level in Portuguese domestic law. For these reasons, NOS has judicially challenged either the approval of audit results of the universal service net cost related with the pre-contest period as well as the liquidation of each and every extraordinary contribution that may be required. In September 2021, the Lisbon Administrative Circle Court ruled as unfounded the action regarding the administrative challenge of the results of the CLSU 2007-2009 audit, which NOS appealed in October 2021. The Board of Directors is convinced it will be successful in both challenges and appeals undertaken; iv. The amount under the caption "Contingencies - other" refers to provisions for risks related to miscellaneous events/disputes of various kinds, the settlement of which may result in outflows of cash, and other likely liabilities related to several transactions from previous periods, and whose outflow of cash is probable, namely, costs charged to the current period or previous years, for which it is not possible to estimate reliably the time of occurrence of the expense. During the financial year ended on 31 December 2022, movements in provisions were as follows: 31-12-2021 Increases Decreases Others 31-12-2022 Litigation and other 32,468 4,202 (4,512) - 32,158 Financial investments 1,075 - (1,075) - - Dismantling and removal of assets 22,326 500 (1,158) 626 22,294 Contingent liabilities 23,707 - (799) - 22,908 Contingencies - other 2,940 3,794 (62) (2,765) 3,907 82,516 8,496 (7,606) (2,139) 81,267 During the financial year ended on 31 December 2023, movements in provisions were as follows: 31-12-2022 Increases Decreases Others 31-12-2023 Litigation and other 32,158 5,141 (3,743) (3,211) 30,345 Financial investments - - - - - Dismantling and removal of assets 22,294 836 (67) (809) 22,254 Contingent liabilities 22,908 - - - 22,908 Contingencies - other 3,907 3,590 - (2,850) 4,647 81,267 9,567 (3,810) (6,870) 80,154 During the financial year ended on 31 December 2022 and 2023, the increases refer mainly to compensation to employees, provisions for legal and other claims plus interests and charges, and the decreases refer mainly to the reassessment and prescription of several legal contingencies. The movements recorded in “Others”, under the heading “Contingencies - other” correspond, predominantly, to compensations to employees. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 261 The net movements for the financial years ended on 31 December 2022 and 2023 reflected in the income statement under Provisions were as follows: 12M 22 12M 23 Provisions and adjustments (Note 36) (1,603) (1,161) Losses / (gains) of affiliated companies, net (Note 37) (1,075) - Other losses / (gains) non-recurrent (Note 39) 3,786 3,590 Interests - dismantling (658) 769 Other 440 2,559 Increases and decreases in provisions 890 5,757 27. Accrued expenses On 31 December 2022 and 2023, this item was composed as follows: 31-12-2022 31-12-2023 Current Invoices to be issued by operators i) 39,314 43,161 Investments in tangible and intangible assets 40,116 30,778 Vacation pay and bonuses 24,320 24,956 Professional services 16,306 20,580 Advertising 15,084 19,591 Costs related to specific projects of business customers 30,494 16,475 Content and film rights 13,205 13,412 Programming services 11,779 9,278 Energy and water 5,495 6,168 Energy and water 5,198 5,349 Costs of litigation procedure activity 4,033 4,108 Maintenance and repair 1,699 2,664 Other accrued expenses 5,387 7,423 212,430 203,943 i) Invoices to be issued by operators correspond predominantly to interconnection costs for international traffic and for the use of roaming services not yet billed. 28. Deferred income On 31 December 2022 and 2023, this item was composed as follows: 31-12-2022 31-12-2023 Current Non-current Current Non-current Advanced billing i) 37,844 - 42,964 - Investment grants ii) 346 2,824 - - 38,190 2,824 42,964 - 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 262 i. This item relates mainly to the billing of Pay TV services regarding the following month to the report period and amounts received from NOS Comunicações, SA customers, related with the recharges of mobile phones and purchase of telecommunications minutes yet unused. ii. This item relates mainly to the deferral of income on the implicit subsidy from obtaining a loan, which has since been fully paid off, from the EIB at interest rates below market values. In the year ended December 31, 2023, this amount was reclassified, in accordance with the change in the way subsidies are accounted for, disclosed in Note 2.3.13. 29. Accounts payable – trade On 31 December 2023, accounts payable to suppliers and other entities, amounting to 244 million euros (December 31, 2022: 253 million euros), correspond to amounts payable arising from the company's operating activities. 30. Accounts payable – others On 31 December 2022 and 2023, this item was composed as follows: 31-12-2022 31-12-2023 Non-current Contractual rights 42,128 44,726 42,128 44,726 Current Fixed assets suppliers 47,437 34,701 Contractual rights 1,934 2,881 Advances from customers 191 204 Advances on investment subsidies - 7,470 Others 4,227 5,093 53,789 50,349 95,917 95,075 The caption Contractual Rights refers to the liability to be settled over 20 years, related with the contractual right acquired with the agreement celebrated between NOS Comunicações, S.A., NOS Technology S.A., and Vodafone Portugal, Comunicações Pessoais, S.A with the aim of sharing mobile support network infrastructures (passive infrastructure such as towers and masts) and active mobile network (active radio equipment such as antennas, amplifiers and other equipment), as disclosed to the market on 22 October 2020. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 263 31. Operational Revenue Consolidated operating revenues, for financial years ended on 31 December 2022 and 2023, were as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Services rendered: Communications service revenues i 322,859 1,276,828 344,379 1,351,252 Revenue distribution and cinematographic exhibition ii 11,377 35,539 9,262 45,449 Receitas de publicidade iii 6,578 19,883 7,521 21,734 Advertising revenue iii 7,815 25,767 6,021 23,678 Production and distribution of content and channels iv 1,669 4,724 3,090 9,874 350,298 1,362,741 370,273 1,451,987 Sales: Telco v 34,500 115,771 33,436 100,117 Audiovisuals and cinema exhibition vi 3,819 12,273 3,408 16,160 38,319 128,044 36,844 116,277 Other operating revenues: Telco 8,756 29,150 7,241 28,440 Audiovisuals and cinema exhibition 136 1,072 (15) 750 8,892 30,222 7,226 29,190 397,509 1,521,007 414,343 1,597,454 These operating revenues are shown net of inter-company eliminations. i. This item mainly includes revenue relating to: (a) basic channel subscription packages that can be sold in a bundle with fixed broadband/fixed voice services; (b) premium channel subscription packages and S-VOD; (c) terminal equipment rental; (d) consumption of content (VOD); (e) traffic and mobile and fixed voice termination; (f) service activation; (g) mobile broadband access; and (h) other additional services (ex: firewall, antivirus) and services rendered related to datacenter management and consulting services in IT. ii. This item mainly includes (a) box office revenue at the NOS Cinemas, and (b) revenue relating to film distribution to other cinema exhibitors in Portugal. iii. This item includes advertising revenues on television channels and NOS cinemas. iv. This item includes revenues related to production of audiovisual content, thought the compilation of acquired contents, and distribution of channels, essentially TVCines. v. Revenue relating to the sale of terminal equipment, telephones, and mobile phones. vi. This item mainly includes sales of bar products by NOS Cinemas and DVD sales. This item includes earned income related with non-compliances and contractual penalties, as well as other supplementary income of diverse natures. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 264 32. Wages and salaries In the financial years ended on 31 December 2022 and 2023, this item was composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Remuneration 16,591 63,899 14,946 67,064 Social taxes 4,208 17,088 4,595 18,363 Social benefits 516 2,041 451 2,050 Other 1,546 2,870 1,398 2,729 22,861 85,898 21,390 90,206 In the financial years ended on 31 December 2022 and 2023, the average number of employees of the companies included in the consolidation was 2,386 and 2,454, respectively. On 31 December 2023, the number of employees of the companies included in the consolidation was 2,480 employees. The costs of compensations paid to employees, since they are non-recurring costs, are recorded in the item “Restructuring costs” (Note 39). 33. Direct costs In the financial years ended on 31 December 2022 and 2023, this item was composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Exhibition costs 49,953 188,232 46,706 185,923 Traffic costs 21,118 73,427 20,896 75,031 Costs related to corporate customers services 17,607 51,711 19,218 58,347 Capacity costs 5,599 17,991 5,402 20,564 Shared advertising revenues 4,795 13,658 5,187 14,526 99,072 345,019 97,409 354,391 34. Cost of products sold In the financial years ended on 31 December 2022 and 2023, this item was composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Costs of products sold 34,093 112,745 32,036 96,640 Increases / (decreases) in inventories impairments (Note 17) 617 1,817 6,271 7,771 34,710 114,562 38,307 104,411 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 265 35. Support services and supplies and external services In the financial years ended on 31 December 2022 and 2023, this item was composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Support services: Administrative support and others 9,309 32,475 10,395 38,861 Call centers and customer support 10,607 34,758 9,312 35,389 Information systems 5,051 16,233 4,345 17,384 24,967 83,466 24,052 91,634 Supplies and external services: Maintenance and repair 12,070 46,935 13,496 55,193 Leasing of ducts and poles 7,013 27,838 6,628 26,315 Electricity 7,199 29,097 5,403 17,382 Professional services 3,152 11,249 2,436 9,015 Installation and removal of terminal equipment 1,377 5,281 1,701 5,785 Travel and accommodation 909 2,780 985 3,569 Communications 95 3,117 552 2,617 Other supplies and external services 5,907 28,941 9,338 33,653 37,722 155,238 40,539 153,529 During the financial year ended on 31 December 2022, given the application of IFRS 16, (practical expedient to consider the changes / concessions related to COVID-19 as not being a modification to the lease) discounts from rents were recognized, on the item “Other Supplies and external services”, in the amount of approximately 2.5 million euros. 36. Provisions and adjustments In the financial years ended on 31 December 2022 and 2023, these items were composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Provisions (Note 26) (1,513) (1,603) 194 (1,161) Impairment of account receivables - trade (Note 18) 6,166 19,333 1,513 11,941 Impairment of account receivables - others (Note 13) 66 231 - 94 Others (2,728) (2,728) 3 11 1,991 15,233 1,710 10,885 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 266 37. Losses / (gains) of affiliated companies, net In financial years ended on 31 December 2022 and 2023, this item was composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Equity method (Note 12) Dreamia 740 641 627 806 Finstar (3,975) (20,672) (566) (2,945) Mstar (321) (876) (342) (1,331) Upstar (270) (276) 54 (580) Others (1,322) (940) (205) (177) (5,148) (22,123) (432) (4,227) Others (Note 13) - - - (854) (5,148) (22,123) (432) (5,081) 38. Depreciation, amortization and impairment losses In the financial years ended on 31 December 2022 and 2023, this item was composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Tangible assets Buildings and other constructions 1,644 10,801 3,853 12,758 Basic equipment 63,785 200,375 50,474 187,989 Transportation equipment - 1 - 1 Tools and dies 13 59 52 102 Administrative equipment 179 3,082 876 3,784 Other tangible assets 108 389 108 534 65,729 214,707 55,363 205,168 Intangible assets Industrial property and other rights 27,012 104,507 28,750 110,971 27,012 104,507 28,750 110,971 Contract costs Contract costs 24,447 97,985 24,526 98,127 24,447 97,985 24,526 98,127 Rights of use Rights of use 18,139 63,672 15,142 69,360 18,139 63,672 15,142 69,360 Investiment property Investment property 4 16 3 12 4 16 3 12 135,331 480,887 123,784 483,638 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 267 39. Restructuring Costs In the financial years ended on 31 December 2022 and 2023, this item was composed as follows: 4 th quarter 22 12M 22 4 th quarter 23 12M 23 Personnel compensation (Note 26) 2,398 3,786 2,366 3,590 Personnel costs related to non-recurrent projects 40 215 12 15 2,438 4,001 2,378 3,605 40. Other losses / (gains) non-recurrent, net In the financial years ended on 31 December 2022 and 2023, the other non-recurring costs / (gains) was composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Gains: Legal processes 7 6,345 38,529 38,529 Others 415 415 - - 422 6,760 38,529 38,529 Costs: Others 207 3,147 3,994 4,594 207 3,147 3,994 4,594 Total (215) (3,613) (34,535) (33,935) In the financial year ended on 31 December 2022, an income/amount receivable of 6.3 million euros was estimated, resulting from favorable decisions in lawsuits brought by the company. This amount was received on October 7, 2022. In the financial year ended on 31 December 2023, an income of 38.5 million euros was recognized, resulting from favorable decisions in the Constitutional Court in proceedings brought by the company related to the settlement of the Activity Tax (Note 46). As of December 31, 2023, NOS had already received 15.6 million euros from these decisions. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 268 41. Financing costs and other financials expenses / (income), net In the financial years ended on 31 December 2022 and 2023, financing costs and other financial expenses / (income) were composed as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Financing costs: Interest expense: Borrowings 3,541 10,303 14,365 39,342 Finance leases 7,274 25,927 7,969 30,978 Derivatives 36 60 - 50 Others (442) 720 (258) 2,492 10,409 37,010 22,076 72,862 Interest earned: Interest on late payments (865) (3,455) (963) (3,511) Derivatives - - (1,186) (3,099) Others (1,500) (1,977) (224) (959) (2,365) (5,432) (2,373) (7,569) Total 8,044 31,578 19,703 65,293 Net other financial expenses /(income): Comissions and guarantees 656 2,917 755 3,015 Others 122 402 113 592 778 3,319 868 3,607 42. Net earnings per share Earnings per share for the financial year ended on 31 December 2022 and 2023 were calculated as follows: thth4 quarter 22 12M 22 4 quarter 23 12M 23 Consolidated net income attributable to shareholders 33,293 224,574 54,675 180,995 Number of ordinary shares outstanding during the period (weighted 511,152,989 511,538,616 511,424,977 511,392,858 average) Basic earnings per share - euros 0.07 0.44 0.11 0.35 Diluted earnings per share - euros 0.07 0.44 0.11 0.35 In the above periods, there were no diluting effects on net earnings per share, so the diluted earnings per share are equal to the basic earnings per share. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 269 43. Guarantees and financial undertakings 43.1 Guarantees On 31 December 2022 and 2023, the Group had furnished sureties, guarantees, and comfort letters in favour of third parties corresponding to the following situations: 31-12-2022 31-12-2023 Tax authorities i 33,155 33,392 Others ii 13,757 15,763 46,912 49,155 i. On 31 December 2022 and 2023, this amount relates to guarantees demanded by the tax authorities in connection with tax proceedings contested by the Company and its subsidiaries (Note 46). ii. On 31 December 2022 and 2023, this amount mainly relates to guarantees provided in connection with Municipal Wayleave Tax proceedings and guarantees provided to cinema owners, and bank guarantees given to providers of satellite capacity renting services. During the first quarterly of 2015, 2016, 2017 and 2018, and following the settlement notes to CLSU 2007-2009, 2010-2011, 2012-2013 and 2014, respectively, NOS constituted guarantees in favour of the Universal Service Compensation Fund in the amount of 23.6 million euros, 16.7 million euros, 17.5 million euros and 3.0 million euros, respectively, in order to prevent the introduction of tax enforcement proceedings in order to enforce recovery of the amounts paid. In addition to the guarantees required by the tax authorities, sureties were set up for the current fiscal processes, which NOS was a surety for NOS SA for an amount of 14.1 million euros. 43.2 Other undertakings Assignment agreements football broadcast rights In December 2015, NOS signed a contract with Sport Lisboa e Benfica - Futebol SAD and Benfica TV, SA of television rights of home matches of football NOS’ league, broadcasting rights and distribution of Benfica TV Channel. The contract began in 2016/2017 sports season, had an initial duration of three years, and might be renewed by decision of either party up to a total of 10 sports seasons, with the overall financial consideration reaching the amount of 400 million euros, divided into progressive annual amounts. Also in December 2015, NOS signed a contract with Sporting Clube de Portugal - Futebol SAD and Sporting and Communication Platforms, S.A. for the assignment of the following rights: 1) TV broadcasting rights and multimedia home games of Sporting SAD; 2) The right to explore the static and virtual advertising at Stadium José Alvalade; 3) The right of transmission and distribution of Sporting TV Channel; 4) The right to be its main sponsor. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 270 The contract will last 10 seasons, concerning the rights indicated in 1) and 2) above, starting in July 2018, 12 seasons in the case of the rights stated in 3) starting in July 2017 and 12 and a half seasons in the case of the rights mentioned in 4) beginning in January 2016, with the overall financial consideration amounting to 446 million euros, divided into progressive annual amounts. Also in December 2015, NOS SA has signed contracts regarding the television rights of home senior team football games with the following sports clubs: 1) Associação Académica de Coimbra – Organismo Autónomo de Futebol, SDUQ, Lda 2) Os Belenenses Sociedade Desportiva Futebol, SAD 3) Clube Desportivo Nacional Futebol, SAD 4) Futebol Clube de Arouca – Futebol, SDUQ, Lda 5) Futebol Clube de Paços de Ferreira, SDUQ, Lda 6) Marítimo da Madeira Futebol, SAD 7) Sporting Clube de Braga – Futebol, SAD 8) Vitória Futebol Clube, SAD The contracts began in the 2019/2020 sports season and last up to 7 seasons, apart from the contract with Sporting Clube de Braga - Futebol, SAD which lasts 9 seasons. In May 2016, NOS and Vodafone have agreed on reciprocal availability, for several sports seasons, of sports content (national and international) owned by the companies, in order to assure to both companies, directly by the assigning party or indirectly through the transfer to third party content distribution channels or models, the availability of broadcasting rights of the sports clubs home football games, as well as the broadcasting and distribution rights of sports and sports clubs channels, whose rights are owned by each of the companies in each moment. The agreement came into force from the beginning of the sports season 16/17, assuring access to Benfica’s channel and Benfica’s home football games to NOS’ and Vodafone’s clients, independent from the channel where these football games are broadcast. Considering that the contract signed allowed for the possibility of extending the agreement to the other operators, in July 2016 MEO and Cabovisão joined the agreement, ending the lack of availability of Porto Canal in the NOS’s channel grid, assuring that every Pay TV client can have access to every relevant sports content, regardless of which operator they use. Following the agreement signed with the remaining operators, which is being made directly in some cases and through channel yield to third parties in others, as a counterpart of the reciprocal provision of rights, the global costs are shared according with retailer telecommunications revenues and Pay TV market shares. The estimated cash flows are estimated as follows: Seasons 2023/24 Following Estimated cash-flows with the contract signed by NOS with the sports entities 104.4 352.6 NOS estimated cash-flows for the contracts signed by NOS (net amounts charged to the operators) and 49.2 201.0 for the contracts signed by the remaining operators * Includes direct broadcasts of games and channels, advertising and others. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 271 Considering that, following the celebrated agreements with the remaining operators, the risks and benefits associated to contracts with teams are shared amongst the operators, the agreement was considered a collaborative agreement. For this reason, the revenue (with operators) is compensated with the expenses with teams. Network sharing contract with Vodafone ANOS and Vodafone Portugal celebrated on 29 September 2017 an agreement of infrastructure development and sharing with a nationwide scope. This partnership allows the two Operators providing their commercial offers under a shared network at the beginning of 2018. The agreement covers the reciprocal sharing of dark fibre in approximately 2.6 million of homes in which each of the entities shares with the other one an equivalent investment value, in other words, they share similar goods. It is assumed that both companies retain full autonomy, independence, and confidentiality concerning the design of the commercial offers, the management of the customers’ database and the choice of technological solutions they might decide to implement, that did not originate any impact on the consolidated financial statements (according to IAS 16, this exchange of similar non-monetary assets will be presented on a net basis). The partnership has also been extended to mobile infrastructure sharing where it is agreed a minimum sharing of 200 mobile towers. Celebrated agreements regarding the sharing of mobile network support infrastructure On 22 October 2020, NOS Comunicações S.A. and NOS Technology, on the one hand, and Vodafone Portugal, Comunicações Pessoais, S.A., on the other hand, celebrated a set of agreements regarding the sharing of mobile network support infrastructure (passive infrastructures such as towers and poles) and active mobile network elements (active radio equipment such as antennas, amplifiers and remaining equipment).These agreements have the following characteristics: a) the agreements have a nationwide scope with diverse geographical application according to the higher or lower level of population density. In higher density geographies, typically larger urban areas, the parties will pursue synergies by sharing support infrastructure. In lower density areas, typically rural and interior locations, in addition to shared use of support infrastructure, the parties will also share active mobile network. b) the agreements focus on assets currently held, or that may be held by each party in the future, and on existing 2G, 3G and 4G technology. Incorporation of 5G technology in these agreements will depend on each to deploy this technology. c) the agreements do not encompass spectrum sharing between the operators and each party will maintain exclusive strategic control of its networks, thus ensuring full competitive, strategic and commercial independence and the ability to differentiate in terms of customer service and provision. Each party retains the ability to develop its mobile communications network independently. These agreements will enable NOS to invest more efficiently by capturing value through synergies. NOS will also be able to deploy its mobile network faster and in a more environmentally responsible way, thus benefitting customers and remaining stakeholders. Sharing of mobile infrastructure represents an important contribution towards greater geographical cohesion and digital inclusion, both of which are essential to the sustainable development of the country. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 272 44. Notes to the cash flow report The statement of cash flows has been prepared in accordance with the provision of IAS 7, with the following points to note. 44.1. Cash receipts resulting from financial investments The statement of cash flows has been prepared in accordance with the provision of IAS 7, with the following points to note: 12M 22 12M 23 Disposal NOS International Carrier Services 1,100 1,100 Disposal Big Picture 2 Films - 50 1,100 1,150 44.2. Cash payments resulting from financial investments This item was composed as follows: 12M 22 12M 23 Fundo Tech Transfer 682 216 Didimo 1,415 - Seems Possible - 400 Reckon.Ai 250 354 MindProber 500 - SkillAugmented 300 - BLU (Note 5) - 254 BrigthCity (Note 5) - 255 CEiiA (Note 5) - 150 3,147 1,629 44.3. Earnings per share This item was composed as follows: 12M 22 12M 23 NOS SGPS 142,357 219,987 142,357 219,987 44.4. Borrowings This item presents, by net value, the reimbursements, and respective monthly issue renewals of commercial paper programs. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 273 45. Related parties 45.1. Balances and transactions between related parties Transactions and balances between NOS and companies of the NOS Group were eliminated in the consolidation process and are not subject to disclosure in this note. The balances on 31 December 2022 and 2023 and transactions in the financial period ended on 31 December 2022 and 2023 between NOS Group and its associated companies, joint ventures and other related parties are as follows: Balances on 31 December de 2022 Balances on 31 December 2022 Accounts Accounts receivables and payable and Borrowings prepaid deferred income expenses Associated companies 26,212 12,775 - (1)Big Picture 2 Films5 67 - Sport TV 26,207 12,708 - Jointly controlled companies 14,224 1,116 3,082 Dreamia S.A. 2,409 410 - Dreamia Servicios de Televisión, S.L. 102 - 3,082 Finstar 11,261 73 - Upstar 299 405 - ZAP Media 142 142 - MSTAR 11 - - DUALGRID - 86 - Other related parties 10,253 3,506 - Banco BIC Português, S.A. 199 - - Cascaishopping- Centro Comercial, S.A. 75 152 - Centro Colombo- Centro Comercial, S.A. 296 522 - Centro Vasco da Gama-Centro Comercial,S.A. 699 819 - Maiashopping- Centro Comercial, S.A. 76 102 - MC Shared Services, S.A. 1,667 - - Modelo Continente Hipermercados,S.A. 1,577 38 - Norteshopping-Centro Comercial, S.A. 351 360 - SC-Consultadoria, S.A. 341 - - Sierra Portugal, S.A. 299 131 - Universo, IME, S.A. 110 - - Worten-Equipamento para o Lar,S.A. 3,318 1,275 - Other related parties 1,245 107 - 50,689 17,397 3,082 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 274 Transactions in the financial year ended on 31 December 2022 31-12-2022 Supplies and Services rendered external Interest gains services Associated companies 63,570 77,842 - (1) Big Picture 2 Films80 2,031 - (2) Sport TV63,490 75,811 - Jointly controlled companies 15,308 224 92 Finstar 9,790 - - Upstar 24 128 - Dreamia Servicios de Televisión, S.L. - - 102 Dreamia S.A. 5,494 (175) (10) DUALGRID - 271 - Other related parties 28,145 11,731 - Arrábidashopping- Centro Comercial, S.A. 6 106 - Banco Bic Português, S.A. 1,838 - - Capwatt Services, S.A. 187 - - Cascaishopping- Centro Comercial, S.A. 13 781 - Centro Colombo- Centro Comercial, S.A. 18 1,864 - Centro Vasco da Gama-Centro Comercial, S.A. 14 835 - Continente Hipermercados, S.A. 477 30 - Cosmos - Viagens e Turismo, S.A. - 211 - Fashion Division, S.A. 299 - - Gaiashopping I- Centro Comercial, S.A. 11 360 - Insco Insular de Hipermercados, S.A. 174 39 - Irmãos Vila Nova III - Imobiliária, S.A. 161 - - Maiashopping- Centro Comercial, S.A. 10 217 - MC Shared Services, S.A. 2,927 - - (5)MDS Corretor de Seguros, S.A.1,475 - - Modalfa-Comércio e Serviços,S.A. 531 - - Modelo - Dist.de Mat. de Construção,S.A. 137 - - Modelo Continente Hipermercados,S.A. 5,952 196 - Norteshopping-Centro Comercial, S.A. 14 1,360 - (6)Olivedesportos- Publicidade Televisão e Media S.A.12 1,110 - Pharmacontinente - Saúde e Higiene, S.A. 372 - - Público-Comunicação Social,S.A. 124 6 - . (7)S21SEC Portug-Cyber Security Services, S.A54 2,392 - SC-Consultadoria, S.A. 882 - - (4)SDSR – Sports Division SR, S.A.212 - - SFS, Gestão e Consultoria, S.A. 14 300 - Sierra Portugal, S.A. 2,059 245 - Solinca Classic, S.A. 365 - - Sonae Arauco Portugal, S.A. 280 41 - Sonaecom – Serviços Partilhados, S.A. 166 - - Troiaverde-Expl.Hoteleira Imob., S.A. 111 60 - (7)UNITEL S.a.r.l.159 169 - Universo, IME, S.A. 347 - - Worten-Equipamento para o Lar, S.A. 6,872 753 - ZIPPY – Comércio e Distribuição, S.A. 200 - - Other related parties 1,672 656 - 107,023 89,797 92 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 275 Balances on 31 December de 2023 Balances on 31 December 2023 Accounts receivables Accounts payable and prepaid Borrowings and deferred income expenses Associated companies 13,550 7,289 - Sport TV 13,550 7,289 - Jointly controlled companies 14,366 1,813 3,298 Dreamia S.A. 1,453 1,428 - Dreamia Servicios de Televisión, S.L. 105 - 3,173 DUALGRID - 88 - Finstar 13,280 (40) - Mstar (467) - - Upstar (17) 237 - (3) Bright City S.A.11 100 125 Other related parties 7,181 1,678 - Banco Bic Português, S.A. 204 - - Capwatt Services, S.A. 109 - - Centro Colombo Centro Comercial, S.A. 153 27 - Centro Vasco da Gama-Centro Comercial, S.A. 80 139 - Gaiashopping I- Centro Comercial, S.A. 98 497 - Modelo Continente Hipermercados, S.A. 1,104 49 - Norteshopping Centro Comercial, S.A. 499 417 - Universo IME, S.A. 398 - - SFS, Gestão e Consultoria, S.A. 5 265 - Sierra Portugal, S.A. 435 (1) - Sonae Investment Management-S.T., SGPS, S.A. 121 - - MC Shared Services, S.A. 639 5 - The Editory Collections Hotel, S.A. 143 - - Worten - Equipamento para o Lar, S.A. 1,971 192 - Other related parties 1,221 87 - 35,097 10,780 3,298 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 276 Transactions in the financial year ended on 31 December 2023 31-12-2023 Supplies and Services rendered Interest gains external services Associated companies 52,016 66,715 - (1) Big Picture 2 Films15 934 - (2) Sport TV52,001 65,781 - Jointly controlled companies 13,204 361 96 Dreamia Servicios de Televisión, S.L. - - 94 Dreamia S.A. 4,890 (162) - Finstar 8,275 - - Mstar - 11 - Upstar 26 119 - DUALGRID 1 287 - (3) Bright City S.A.13 105 2 Other related parties 27,977 9,311 - Adira – Metal Forming Solutions, S.A. 130 - - Arrábidashopping - Centro Comercial, S.A. 11 189 - Banco Bic Português, S.A. 1,866 - - Capwatt Services, S.A. 249 - - Cascaishopping Centro Comercial, S.A. 12 1,035 - Centro Colombo Centro Comercial, S.A. 19 1,999 - Centro Vasco da Gama Centro Comercial, S.A. 13 1,107 - Continente Hipermercados, S.A. 488 37 - Estação Viana - Centro Comercial, S.A. 9 100 - Fashion Division, S.A. 563 - - Gaiashopping I Centro Comercial, S.A. 10 716 - Grupo Habit Analytics - 135 - Insco Insular de Hipermercados, S.A. 164 42 - Irmãos Vila Nova III, S.A. 214 - - Maiashopping Centro Comercial, S.A. 9 194 - Modalfa - Comércio e Serviços, S.A. 331 - - Modelo Continente Hipermercados, S.A. 5,577 156 - Norteshopping Centro Comercial, S.A. 16 1,717 - Parque Atlântico –hopping - C.C., S.A. 8 104 - Pharmacontinente - Saúde e Higiene, S.A. 397 - - Público-Comunicação Social,S.A. 116 7 - SC - Sociedade de Consultoria, S.A. 573 - - . (4)SDSR - Sports Division SR, S.A171 - - Universo IME, S.A. 817 - - SFS, Gestão e Consultoria, S.A. 21 336 - Sierra Portugal, S.A. 1,686 83 - Solinca Classic, S.A. 413 - - Sonae Arauco Portugal, S.A. 271 85 - Sonae Investment Management-S.T., SGPS, S.A. 179 - - MC Shared Services, S.A. 3,463 1 - The Editory Collections Hotel, S.A. 242 - - Aqualuz Tróia, S.A. 112 - - Worten - Equipamento para o Lar, SA 8,032 905 - Other related parties 1,791 363 - 93,197 76,387 96 (1) Company ceased to be a related party in June 2023, due to the disposal of the shareholding in the company. (2) In the financial year ended on 31 December 2023, the amount related to Sales and Services Rendered includes about 49.8 million euros (31 December 2022: 62 million euros), which are not recorded in the consolidated accounts under Sales and Services Rendered, since it is related to the agreement celebrated with the operators, which configures a sharing of costs and benefits, therefore the compensation of the revenue is made with the expenses with the clubs (Note 43.2). (3) Stake acquired in September 2023. (4) Company ceased to be a related party in October 2023. (5) Company ceased to be a related party in December 2022. (6) Company ceased to be a related party in April 2022. (7) Company ceased to be a related party in December 2022. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 277 The Company regularly performs transactions and signs contracts with several parties within the NOS Group. Such transactions were performed on normal market terms for similar transactions, as part of the contracting companies' current activity. Due to the large number of low value related parties’ balances and transactions, it was grouped in the heading "Other related parties" the balances and transactions with entities whose amounts are less than 100 thousand euros. 45.2. Remuneration of key management members Remuneration paid to managers and other key members of NOS Management (Managers) for the financial years ended on 31 December 2022 and 2023 were as follows: 12M 22 12M 23 Compensation 3,393 3,614 Profit sharing 1,290 1,467 Share plans assigned 1,290 1,467 5,972 6,548 The average number of key management members in 2023 is 15 (2022: 16). The Corporate Governance Report includes more detailed information about NOS' remuneration policy. The Company considers as Managers the members of the Board of Directors. 45.3. Fees and auditors’ services Information concerning fees and services rendered by auditors is described on note 47 of the Corporate Governance Report. 46. Legal actions and contingent assets and liabilities 46.1. Legal actions with regulators and Competition Authority (AdC) i. NOS SA, NOS Açores and NOS Madeira brought actions for judicial review of ANACOM’s decisions in respect of the payment of the Annual Fee of Activity (for 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021 and 2022) as Electronic Communications Services Networks Supplier, and furthermore the refund of the amounts that meanwhile were paid within the scope of the mentioned acts of settlement was requested. Also NOS Wholesale brought action for judicial review of ANACOM’s decision in respect of payment of the Annual Fee of Activity for 2020, 2021 and 2022. The settlement amounts are, respectively, as follows: a) NOS SA: 2009: 1,861 thousand euros, 2010: 3,808 thousand euros, 2011: 6,049 thousand euros, 2012: 6,283 thousand euros, 2013: 7,270 thousand euros, 2014: 7,426 thousand euros, 2015: 7,253 thousand euros, 2016: 8,242 thousand euros, 2017: 9,099 thousand euros, 2018: 10,303 thousand euros, 2019: 10,169 thousand euros; 2020: 10,184 thousand euros, 2021: 9,653 thousand euros and 2022: 9,850 thousand euros. b) NOS Açores: 2009: 29 thousand euros, 2010: 60 thousand euros, 2011: 95 thousand euros, 2012: 95 thousand euros, 2013: 104 thousand euros, 2014: 107 thousand euros, 2015: 98 thousand euros, 2016: 105 thousand euros, 2017: 104 thousand euros, 2018: 111 thousand euros, 2019: 107 thousand euros, 2020: 120 thousand euros, 2021: 123 thousand euros and 2022: 123 thousand euros. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 278 c) NOS Madeira: 2009: 40 thousand euros, 2010: 83 thousand euros, 2011: 130 thousand euros, 2012: 132 thousand euros, 2013: 149 thousand euros, 2014:165 thousand euros, 2015: 161 thousand euros, 2016: 177 thousand euros, 2017: 187 thousand euros, 2018: 205 thousand euros, 2019: 195 thousand euros, 2020: 202 thousand euros, 2021: 223 thousand euros and 2022: 235 thousand euros. d) NOS Wholesale: 2020: 36 thousand euros, 2021: 110 thousand euros and 2022: 90 thousand euros. This fee is a percentage decided annually by ANACOM (in 2009 it was 0.5826%) of operators’ electronic communications revenues. The appeals invoke: i) unconstitutionality and illegality, related to the inclusion in the cost accounting of ANACOM of the provisions made by the latter, due to judicial proceedings against the latter (including these appeals of the activity rate) and ii) that only revenues from the electronic communications business per se, subject to regulation by ANACOM, should be considered for the purposes of the application of the percentage and the calculation of the fee payable, and that revenues from television content should be excluded. Judgments have been handed down in more than two dozen cases on the matter, which ANACOM has appealed to the Central Administrative Court and/or the Constitutional Court, pending the outcome of the cases. In the second and third quarters of 2023, the Constitutional Court ruled, in more than a dozen separate cases, that Ordinance 1473-B/2008, of December 17, which regulates the determination of fees due for the exercise of the activity of provider of electronic communications networks and services, is unconstitutional, and ordered ANACOM to refund the amount unduly charged. In the year ended on 31 December 2023, a profit of 38.5 million euros was recognized as a result of the favorable decisions in the Constitutional Court, and 15.6 million euros were received (Note 40). The remaining process are awaiting final judgment/decision. ii. During the first quarter of 2017, NOS was notified by ANACOM of the initiation of an infraction process related to communications of prices update at the end of 2016, beginning of 2017. In the end of the last trimester of 2020, ANACOM notified NOS of the accusation, with the practice of 4 very severe offences and 1 severe offence related, respectively, with i) the non-communication to customers of the right to rescind the contract with no charges, as a result of prices changes, with (ii and iii) the supposed non-communication of pricing update and with (iv) the adequate advance and, yet, (v) the lack of information to be communicated to ANACOM. However, ANACOM did not present any value for a fine, except in relation to the with severe offence. In this case, ANACOM gave NOS the possibility to settle the fine by the minimum, in the amount of 13 thousand euros, which NOS did. NOS presented its written defense on 29 January 2021. NOS was notified, in November 2022, of ANACOM's decision that condemned NOS to pay a fine of 5.2 million euros. NOS has challenged the decision in court, and, in June 2023, the court reduced the amount of the fine imposed on NOS to €4.2 million. NOS appealed this decision to the Court of Appeal. iii. On 17 July 2020, NOS was notified by the AdC of an illegality note (accusation) related to digital marketing without a google search engine, which accuses the operators MEO, NOS, NOWO and Vodafone of concertation, for a period ranging from between 2010 and 2018, failing to identify a concrete fine. It is not possible, at this moment, to estimate the value of an eventual fine. NOS presented its written defense to the Portuguese Competition Authority (AdC) and an appeal to the Lisbon Court of Appeal, where it challenged the nullity of the obtained evidence. In July 2022, the Lisbon Court of Appeal confirmed NOS position pending further developments. Is the Board of Directors' conviction, taking into account the elements it knows, that will be able to demonstrate the various arguments in favor of its defense. iv. On 15 December 2021, NOS was notified by the Portuguese Competition Authority (AdC) of an illegality note (accusation) related to advertising service practices in automatic recordings, which accuses NOS, other operators and a consultant of concertation behavior in the television recordings advertising market. NOS presented its written defense and subsequently challenged the nullity of the taking of evidence. At the time, it is not possible to estimate whether there will be an acquittal or conviction and, in the case of the latter, the amount of a possible fine. Further developments on the AdC's decision are awaited. It is the conviction of the Board of Directors, taking into account the elements it knows, that it will be able to demonstrate the various arguments in favor of its defense. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 279 46.2. Tax authorities During the course of the 2003 to 2023 financial years, some companies of the NOS Group were the subject of tax inspections for the 2001 to 2021 financial years. Following these inspections, NOS SGPS, as the controlling company of the Tax Group, and companies not covered by Tax Group, were notified of the corrections made to the Group's tax losses, to VAT and stamp tax and to make the payments related to the corrections made to the above exercises. The total amount of the notifications unpaid is about 38 million euros, added interest, and charges. These settlement notes, which totally were contested, are the respective lawsuits in progress. Based on the advice obtained from the process representatives and tax consultants, the Board of Directors maintains the belief in a favorable outcome, which is why these proceedings are maintained in court. However, in accordance with the principle of prudence, an assessment of the group's level of exposure to these proceedings is made periodically, in the light of the evolution of case law, and consequently the provisions recorded for this purpose are adjusted. The Group provided the guarantees demanded by the Tax Authorities, related to these processes, according reference in Note 43. 46.3. Actions by MEO against NOS SA, NOS Madeira and NOS Açores and by NOS SA against MEO In 2011, MEO brought against NOS SA, in the Judicial Court of Lisbon, a claim for the compensation of 10.3 million of Euros, as compensation for alleged unauthorized portability of NOS SA in the period between March 2009 and July 2011. NOS SA contested, and the Court ordered an expert opinion, meanwhile, deemed without effect. The discussion and trial hearing took place in the first quarter of 2016, being the rendered in September of the same year, which considered the action to be partially justified, based not on the occurrence of improper portability, which the Court has determined to restrict itself to those which do not correspond to the will of the proprietor. In that regard, it sentenced NOS to the payment of approximately 5.3 million euros to MEO, a decision of which NOS appealed to the Lisbon Court of Appeal. MEO, on the other hand, was satisfied with the decision and did not appeal against the part of the sentence that acquitted NOS. This Court, in the first quarter of 2018, upheld the decision of the Court of First Instance, except for interests, in which it gave reason to the claims of NOS, in the sense that interests should be counted from the citation to the action and not from the due date of the invoices. NOS filed an extraordinary appeal with the Supreme Court of Justice (SCJ), that appeal which found that the facts established were insufficient to resolve on the substance of the case. Consequently, the SCJ ordered that the court under appeal should amplify the facts. The case was transferred to the Court of First Instance and in November 2019, this, granted the parties the possibility of requesting the production of supplementary evidence on the subject of the extension, with NOS requesting an expert examination and the repetition of testimonial evidence. In February 2020, the Court determined the need to obtain new evidence, which requires the analysis of the information relating to all portabilities that serve as the basis for the process, determining the carrying out of expert evidence for that purpose. The appointment of the expert occurred on October 2021. In December 2022, the expert asked to be relieved of his duties because he felt that the qualified non-judicial verification was unfeasible in view of the volume of documentation to be analyzed, having the court determined in April 2023, that, in view of the expert's request, the trial should be limited to the submission of written pleadings. The parties submitted their written pleadings in June and NOS, in addition, filed an autonomous appeal against that order, on the grounds that the court's decision violated the STJ judgment. In July 2023, even though no additional evidence had been produced as determined by the STJ, the Court handed down a new decision ordering NOS to pay 5.3 million euros. This decision has already been appealed to the Lisbon Court of Appeal. Further developments are awaited. In 2011, NOS SA brought an action in Lisbon Judicial Court against MEO, claiming payment of 22.4 million euros, for damages suffered by NOS SA, arising from violations of the Portability Regulation by MEO, in particular, the large number of unjustified refusals of portability requests by MEO in the period between February 2008 and February 2011. The court declared the performance of expert evidence of technical nature and an economic-financial survey, which were completed in February 2016 and June 2018, respectively. MEO argued for the nullity of the expert economic-financial report, which was dismissed. After the trial, in May 2022, the court partially agreed with NOS, condemning MEO to pay 7.9 million euros, a decision challenged by MEO and NOS by filing appeals in October 2022. At the end of March 2023, the Lisbon Court of Appeal revoked the initial decision and ordered the expansion of the 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 280 facts, which will entail new trial sessions. It is the understanding of the Board of Directors, corroborated by the attorneys accompanying the process, that it is, in formal and substantive terms, likely that NOS SA will be able to win the lawsuit, due to MEO already having been convicted for the same offences by ANACOM. 46.4. Action brought by DECO In March 2018, NOS was notified of a lawsuit brought by DECO against NOS, MEO and NOWO, in which a declaration of nullity of the obligation to pay the price increases imposed on customers at the end of 2016 is requested. In April and May 2018, the operators, including NOS, lodged a defense. The action’s value has been fixed at EUR 60,000. After the discussion and trial sessions were held in 2022, NOS filed an appeal against the court decision that dispensed with the production of testimonial evidence, which was upheld by the Lisbon Court of Appeal. The parties are now waiting for the discussion and trial sessions to be scheduled. Board of Directors is convinced that the arguments used by the author are not justified, which is why it is believed that the outcome of the proceeding should not result in significant impacts for the Group's financial statements. 46.5. Action brought by Citizens Voice In November 2022, NOS was served with a lawsuit filed by Citizens Voice - Consumer Advocacy Association ("Citizens Voice"), where a set of requests related to the automatic activation of pre-defined volumes of mobile data, once the data volume included in the monthly fee contracted by customers has been exhausted. Citizens Voice requests more specifically (i) the judicial declaration of the illegality of this practice for understanding that violates a set of national and European rules, (ii) the recognition of the right of customers to refuse to contract these services, (iii) the return of amounts paid on this basis over the past years by NOS customers, as well as (iv) the payment of compensation in the amount of 100 euros to each customer for alleged moral damages resulting from that practice. In December 2022 NOS presented its response invoking the illegitimacy of Citizens Voice to present the action, namely by the existence of a profit interest, and furthermore defending the lawfulness of the practice and its total transparency and clarity for the respective customers. The Board of Directors is convinced that the arguments used by the plaintiff are unfounded, reason why it is believed that the outcome of the process will not result in significant impacts for the Group's financial statements. 46.6. Interconnection tariffs On 31 December 2023, accounts receivable and accounts payable include 37,139,253 euros and 43,475,093 euros, respectively, resulting from a dispute between the subsidiary NOS SA and, essentially, the operator MEO – Serviços de Comunicação e Multimédia, S.A. (previously named TMN – Telecomunicações Móveis Nacionais, S.A.), in relation to the non-definition of interconnection tariffs of 2001. In what concerns to that dispute with MEO, the result was totally favorable to NOS S.A., having already become final. In March 2021, MEO filed a new lawsuit against NOS, in which it claimed the price of interconnection services between TMN and Optimus for 2001 at 55$00 (€ 0.2743) per minute. After NOS presented its defense contesting MEO's petition, a preliminary hearing was held and, by court decision, NOS was acquitted of the case. MEO filed an appeal against the decision, which was dismissed, and in February 2023 filed a new appeal to the STJ where NOS presented reply to allegations. Further developments of the process are awaited, being the understanding of the Board of Directors, supported by the lawyers who monitor the process, that there is, in substantive terms, a good chance that NOS SA can win the action. 47. Share incentive scheme On 23 April 2014, the General Meeting approved the Regulation on Short and Medium-Term Variable Remuneration, which establishes the terms of the Share Incentive Scheme ("NOS Plan"). This plan aimed at more senior employees with the vesting taking place three years being awarded, assuming that the employee is still with the company during that period. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 281 On 31 December 2023, the unvested plans are: Number of shares Plan NOS Plan 2021 1,426,069 Plan 2022 1,164,196 Plan 2023 1,038,600 During the financial year ended on 31 December 2023, the movements that occurred in the plans are detailed as follows: NOS NOS NOS NOS Total Plan 2020 Plan 2021 Plan 2022 Plan 2023 Balance as at 31 December 2022 1,459,370 1,320,809 1,079,152 - 3,859,331 Movements in the period: Awarded - - - 1,040,472 1,040,472 Vested (1,458,712) (11,380) (8,908) - (1,479,000) (1)Cancelled/Elapsed/Corrected (658) 116,640 93,952 (1,872) 208,062 Balance as at 31 December 2023 - 1,426,069 1,164,196 1,038,600 3,628,865 (1) Refers mainly to correction made for dividends paid, exit of employees not entitled to the vesting of shares and other adjustments resulting from the way the shares are vested. The share plans costs are recognized over the year between the awarding and vesting date of those shares. The responsibility is calculated taking into consideration the share price at award date of each plan, for plans settled in shares, or at the closing date, for plans settled in cash. The responsibility is recorded in Reserves and Accrued Expenses, respectively. As of 31 December 2023, the outstanding responsibility related to these plans is 7,099 thousand euros and is recorded in Reserves. The costs recognized in previous years and in the financial year ended on 31 December 2023, and its liabilities are as follows: Total Costs recognized in previous years related to plans as at 31 December 2022 6,675 Costs of plans vested in the period (4,670) Costs incured in the period and others 5,094 Total cost of the plans 7,099 48. Other matters 48.1. Preventive seizure of 26.075% of the share capital of NOS SGPS, S.A. On 4 April 2020, SONAECOM, SGPS, SA, holder of 50% of the capital of ZOPT, SGPS, SA (hereinafter “ZOPT”), was informed by this company of the communication received from the Central Criminal Investigation Court of Lisbon (hereinafter Tribunal) to proceed to the preventive seizure of 26.075% of the share capital of NOS, SGPS, SA, corresponding to half of the shareholding in NOS held by ZOPT and, indirectly, by the companies Unitel International Holdings, BV and Kento Holding Limited ”, controlled by Eng.ª Isabel dos Santos. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 282 Under the terms of the aforementioned decision, the foreclosed shares are deprived of the exercise of voting rights and the right to receive dividends, the latter of which must be deposited with Caixa Geral de Depósitos, S.A. at the court's discretion. The other half of ZOPT's participation in NOS share capital, corresponding to an identical percentage of 26.075% - and which, at least in line with the criterion used by the Court, embodies the 50% held in ZOPT by SONAECOM - was not subject to seizure, nor the rights attached to it were subject to any limitation. On 12 June 2020, ZOPT was authorized by the Lisbon Central Criminal Investigation Court to exercise the voting right corresponding to the 26.075% of NOS share capital preventively seized under the aforementioned Court order. Following the communication of April 4, 2020, ZOPT filed third-party claims, which, in June 2020, were rejected by the investigating judge on the grounds that the Portuguese courts had no jurisdiction to hear and decide them, a decision that, having been appealed by ZOPT, was revoked by the Lisbon Court of Appeal, in February 2021. In November 2021, the Investigating Judge, aware of the cause’s merit, dismissed the third-party embargoes presented by ZOPT, a decision that, according to ZOPT, was appealed to the Court of Appeal. After being admitted in February 2022, in June 2022, ZOPT was notified of the decision dismissing the appeal. Further developments are awaited. The Board of Directors of NOS is not aware of any developments in this process. In September 2022, Sonaecom informed that in a meeting of the General Meeting of ZOPT it was decided to proceed with the amortization of Sonaecom's stake in that company and the refund of the additional payments made by Sonaecom, for a consideration that includes the delivery of shares representing 26.075% of the capital of NOS. As a result of this repayment, which was subject to the applicable legal procedures, Sonaecom is no longer a shareholder of ZOPT, which is now wholly owned by Unitel International Holdings, BV and Kento Holding Limited, companies controlled by Isabel do Santos. In December 2022, Sonaecom, upon completion of the legal procedures, informed that it now directly holds 134,322,268 ordinary shares of NOS, corresponding to 26.07% of its share capital. Additionally, also informed that such participation is also attributable to the entities with which it is in a control relationship, namely, SONTEL, BV, Sonae Investments, BV, SONAE, SGPS, S.A. and EFANOR INVESTIMENTOS, SGPS, S.A.. The Board of Directors of NOS is not aware of any developments in the above mentioned preventive seizure process. 49. Subsequent events Financing In January 2024, NOS contracted 100 million euros with Caixa Geral de Depósitos, split between a bond loan and a commercial paper program, indexed to sustainability objectives, maturing in 2026. Network sharing contract with Vodafone In January 2024, NOS and Vodafone Portugal signed an agreement for the development and reciprocal sharing of dark fibre that will cover around 1.1 million homes nationwide. With this agreement and considering the agreement with the same object already signed between the parties in 2017 (Note 43.2), NOS and Vodafone Portugal will now share fibre access in around 3.9 million homes. The partnership implies sharing an equivalent amount of investment and assumes that the two companies maintain total autonomy in the design of commercial offers, as well as in the choice of technological solutions they decide to implement. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 283 The companies are also guaranteed total independence in the management of their customer base, as well as confidentiality in the processing of consumer information. As of the date of approval of this document, there have been no other relevant subsequent events that merit disclosure in this report. 50. Annexes A. Companies included in the consolidation by the full consolidation method % Percentage of ownershipCompanyHeadquarterMain activityShareholderEffective Direct Effective31-12-202231-12-2023 31-12-2023NOS, SGPS, S.A. (Holding) Lisbon Management of investments - - - -Invest and support the development of companies that aim to commercialize technologies and Fundo de Capital de Risco N5G (a) LisbonNOS 100% 100% 100%products that result from scientific and technological researchEmpracine - Empresa Promotora de Lisbon Movies exhibition Lusomundo SII 100% 100% 100%Atividades Cinematográficas, Lda.Lusomundo - Sociedade de investimentos Lisbon Management of Real Estate NOS 100% 100% 100%imobiliários SGPS, SALusomundo Imobiliária 2, S.A. Lisbon Management of Real Estate Lusomundo SII 100% 100% 100%NOS + NOS Lusomundo Moçambique, Lda. (b) Maputo Movies exhibition and commercialization of other public events100% 100% 100%CinemasNOS NOS Sistemas, S.A. Lisbon Rendering of consulting services in the area of information systems100% 100% 100%ComunicaçõesNOS NOS Sistemas España, S.L. Madrid Rendering of consulting services in the area of information systems100% 100% 100%ComunicaçõesDistribution of television by cable and satellite and operation of telecommunications services in NOS NOS Açores Comunicações, S.A. Ponta Delgada84% 84% 84%the Azores areaComunicaçõesManagement of investments participations in other companies as an indirect form of economic NOS Audiovisuais, SGPS, S.A. LisbonNOS 100% 100% 100%activityManagement of investments participations in other companies as an indirect form of economic NOS Property, S.A. LisbonNOS 100% 100% 100%activityImplementation, operation, exploitation and offer of networks and rendering services of NOS Comunicações, S.A. Lisbonelectronic comunications and related resources; offer and commercialisation of products and NOS 100% 100% 100%equipments of electronic communicationsService rendered of business support and management and administration consultancy NOS Corporate Center, S.A. Lisbonservices, including accounting, logistics, administrative, financial, tax, human resources NOS 100% 100% 100%services and any other services that are subsequent or related to previous ac tivitiesAchievement and promotion of scientific activities and research and development as well as the demonstration, dissemination, technology transfer and formation in the fields of services NOS Inovação, S.A. MatosinhosNOS 100% 100% 100%and information systems and fixed solutions and last generation mobile, television, internet, voice and data, and licensing and engineering services and consultancyManagement of investments participations in other companies as an indirect form of economic NOS Internacional, SGPS, S.A. LisbonNOS 100% 100% 100%activityNOS Audiovisuais NOS Lusomundo Audiovisuais, S.A. Lisbon Import, distribution, commercialization and production of audiovisual products100% 100% 100%SGPSNOS Lusomundo Cinemas , S.A. Lisbon Movies exhibition and commercialization of other public events NOS 100% 100% 100%Movies distribution, editing, distribution, commercialization and production of audiovisual NOS Audio - Sales and Distribution, S.A. LisbonNOS 100% 100% 100%productsDistribution of television by cable and satellite and operation of telecommunications services in NOS NOS Madeira Comunicações, S.A. Funchal78% 78% 78%the Madeira areaComunicaçõesNOS Mediação de Seguros, S.A. Lisbon Insurance distribution and related activities NOS 100% 100% 100%NOS TECHNOLOGY – Concepção, Design, construction, management and exploitation of electronic communications networks NOS Construção e Gestão de Redes de Matosinhosand their equipment and infrastructure, management of technologic assets and rendering of 100% 100% 100%ComunicaçõesComunicações, S.A. ('Artis')related servicesTrade, service rendered and exploitation of wholesale offerings of national and international NOS Wholesale, S.A. Lisbonelectronic communications services and related services, namely information and NOS SA 0% 100% 100%communication technology servicesPer-Mar – Sociedade de Construções, Lisbon Purchase, sale, renting and operation of property and commercial establishments NOS SA 100% 100% 100S.A. ('Per-Mar')Realisation of urbanisation and building construction, planning, urban management, studies, Sontária - Empreendimentos Imobiliários, NOS Lisbonconstruction and property management, buy and sale of properties and resale of purchased for 100% 100% 100%S.A. ('Sontária')Comunicaçõesthat purposeTeliz Holding, S.A. (d) Lisbon Management of group financing activities NOS 100% 100% 100%Provision of engineering and consulting services in the area of information technology, Ten Twenty One, S.A LisbonNOS - 100% 100%communications and electronics(a) NOS SGPS: 27,50%; NOS Sistemas: 20,00%; NOS Internacional SGPS: 20,00%; NOS Audiovisuais SGPS: 22,50%; NOS Cinemas: 10,00%(b) NOS SGPS: 90%; NOS Lusomundo Cinemas: 10%(c) Company constituted in February 2023 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 284 B. Associated companies C. Jointly controlled companies Financial investments whose participation is less than 50% were considered as joint arrangements due to shareholder agreements that confer joint control. Percentage of ownershipCompanyHeadquarterMain activityShareholderEffective Direct Effective31-12-202231-12-2023 31-12-2023Big Picture 2 Films, S.A. (a) Oeiras Import, distribution, commercialization and production of audiovisual products NOS Audiovisuais 20.00% 0.00% 0.00%Big Picture 2 Films, Big Picture Films, S.L. Madrid Distribution and commercialization of movies20.00% 0.00% 0.00%S.A.Conception, production, realization and commercialization of sports programs for Sport TV Portugal, S.A. Lisbontelebroadcasting, purchase and resale of the rights to broadcast sports programs for NOS 25% 25% 25%television and provision of publicity services(a) Alienated in Jun-23. Percentage of ownershipCompanyHeadquarterMain activityShareholderEffective Direct Effective31-12-202231-12-2023 31-12-2023Dreamia Servicios de Televisión, S.L. (a) Madrid Management of investments NOS Audiovisuais 50.00% 50.00% 50.00%Conception, production, realization and commercialization of audiovisual contents Dreamia - Serviços de Televisão, S.A. LisbonDreamia SL 50.00% 100.00% 50.00%and provision of publicity servicesFINSTAR - Sociedade de Investimentos e Luanda Distribution of television by satellite, operation of telecommunications services Teliz Holding S.A. 30.00% 30.00% 30.00%Participações, S.A.Electronic communications services provider, production, commercialization, Upstar Comunicações S.A. Vendas NovasNOS 30.00% 30.00% 30.00%broadcasting and distribution of audiovisual contentsProjects development and activities in the areas of entertainment, telecommunications and related technologies, the production and distribution of the ZAP Media S.A. LuandaFINSTAR 30.00% 100.00% 30.00%contents and the design, implementation and operation of infrastructure and related facilitiesSatellite television signal distribution, operation and provision of telecommunications NOS + NOS MSTAR, SA (b) Maputo30.00% 30.00% 30.00%servicesComunicaçõesRendering of technical, administrative and financial consultancy services to telecommunications companies, planning and management of telecommunications NOS Dualgrid - Gestão de Redes Partilhas, S.A. Lisbon50.00% 50.00% 50.00%networks and any other activities that are complementary, subsidiary or accessory Comunicaçõesto those referred to in the previous numbersCreation and development of technologies to improve electrical, lighting, communications, information systems management or other infrastructures; trade and provision of services for the better management of available resources with an environmental, economic and social impact, including, but not limited to, the supply, installation and maintenance of electrical equipment and electric ity NOS BrightCity S.A. Maiadistribution networks, the assembly, installation and maintenance of lighting and 0.00%50.00% 50.00%Comunicaçõessignaling systems and equipment, the optimized management of parking spaces and road traffic, the management of water consumption, the supply, installation and management of c ommunications networks, data processing, technical support, maintenance and other information technology services, as well as any other ancillary or complementary activities.(a) At 3 October 2020, NOS Lusomundo Audiovisuais acquired 1,500 shares of Dreamia Servicios de Televisión, S.L.(b) NOS SGPS: 29,40%; NOS Comunicações: 0,60%. 2.1 2.2 Notes to the consolidated financial statements Integrated Annual Report 2023 01 02 03 04 285 D. Companies in which NOS does not have significant influence Percentage of ownershipCompanyHeadquarterMain activityShareholderEffective Direct Effective31-12-202231-12-2023 31-12-2023Research applied to different areas associated with digital transformation to Associação Laboratório Colaborativo em Guimarãesencourage cooperation between R&D units, educational institutions and the NOS Inovação 4.92% 4.92% 4.92%Transformação Digital - DTX productive sectorDevelops, implements and operates innovative products and systems, together with CEiiA - Centro de Engenharia e Matosinhosits partners, for mobility industries such as aeronautics, automobiles, oceans and NOS 0% 16.20% 16.20%Desenvolvimento (b)space.DIDIMO has developed a platform that allows the generation, in about 60 seconds, Didimo Inc. (c) DoverFundo NOS 5G 0.00% 0.00% 0. 00%of 3D digital ava tars based on photographs.DIDIMO has developed a platform that allows the generation, in about 60 seconds, Didimo SA (c) PortoFundo NOS 5G 0.00% 0.00% 0. 00%of 3D digital ava tars based on photographs.Invest and support the development of companies that aim to commercialize Fundo TechTransfer LisbonNOS Inovação 3.90% 3.90% 3.90%technologies and products that result from scientific and technological researchLusitânia Vida - Companhia de Seguros, S.A Lisbon Insurance services NOS 0. 03% 0.03% 0.03%("Lusitânia Vida")Lusitânia - Companhia de Seguros, S.A LisbonInsurance services NOS 0. 02% 0.02% 0.02%("Lusitânia Seguros")The company aims to measure the emotional impact that multimedia content has Mindprober Bragaon consumers, through wearables tha t monitor biometric da ta suc h as sweat or Fundo NOS 5G 2.09% 2.09% 2.09%heartbeat acceleration.RK. AI - Serviços de Processamento de Activities related to information and computer technologies, images and data Imagens e Análise de Dados, S.A. PortoFundo NOS 5G 11.76% 11.76% 11.76%processing and analysis, hosting and related activities and IT consulting(Reckon.ai)Data processing activities, information domiciliation and related activities, namely in Seems Possible, Lda. (Knock Healthcare) (a) PortoFundo NOS 5G 0.00% 0.00% 0. 00%the health area.Conception, design, methodology development, programming, editing, testing, Fundo NOS 5G + support and maintenance of software, online web platforms and virtual and SkillAugment, Lda (KIT-AR) (a) AveiroFundo 0.00% 0.00% 0.00%augmented reality systems, with machine learning and artificial intelligence TechTransfercapabilities, in industrial and business environments.(a) The investment in the entity was in convertible debt, so the interest is 0%.(b) NOS SGPS subscribed to 150 units of CEiiA - Centro de Engenharia e Desenvolvimento, giving it a 16.2% stake.(c) The NOS 5G Fund only holds 1 share in each entity, representing 0.0% of the capital. Integrated Annual Report 2023 03 Individual Financial Statements 3.1 Individual Financial Statements 3.2 Notes to the Individual Financial Statements 287 292 01 02 03 04 3.1 Individual Financial Statements 3.2 Integrated Annual Report 2023 01 02 03 04 287 Statement of financial position On 31 December 2022 and 2023 (Amounts stated in euros) Notes 31-12-2022 31-12-2023 Assets Non-current assets: Tangible assets 6 150,017 147,142 Intangible assets 7 453,888,881 453,888,881 Rights of use 8 174,311 102,004 Financial investments in group companies 9 848,086,949 1,849,963,149 Accounts receivable 5 and 10 1,130,053,000 98,945,000 Available-for-sale financial assets 5 and 12 12,950 12,950 Deferred income tax assets 13 850,410 1,709,844 Derivative financial instruments 5 and 21 10,946,504 5,386,308 Total non-current assets 2,444,163,022 2,410,155,278 Current assets: Accounts receivable 5 and 10 111,921,546 109,923,724 Tax receivable 11 65,275 30,822,473 Prepaid expenses 14 118,238 175,200 Cash and cash equivalents 5 and 15 7,633,072 11,187,505 Total current assets 119,738,131 152,108,902 Total assets 2,563,901,153 2,562,264,180 Shareholder's equity Share capital 16.1 855,167,891 855,167,891 Capital issued premium 16.2 4,202,356 4,202,356 Own shares 16.3 (15,967,529) (15,058,990) Legal reserve 16.4 1,030,323 4,373,733 Other reserves and accumulated earnings 16.4 509,871,236 348,411,872 Net income 66,868,204 6,374,321 Total equity 1,421,172,481 1.203.471.183 Liabilities Non-current liabilities: Borrowings 5 and 17 654,532,339 949,869,950 Provisions 18 191,514 3,031,945 Accrued expenses 5 and 19 454,886 454,886 Deferred income 20 2,824,046 - Derivative financial instruments 5 and 21 - 1,035,978 Deferred income tax liabilities 3.2 and 13 3,747,884 2,528,492 Total non-current liabilities 661,750,669 956,921,251 Current liabilities: Borrowings 5 and 17 345,946,205 148,107,877 Accounts payable 5 and 22 117,677,351 251,035,796 Tax payable 3.2 and 11 13,881,950 288,299 Accrued expenses 5 and 19 3,012,931 2,421,201 Deferred income 20 459,566 18,573 Total current liabilities 480,978,003 401,871,746 Total liabilities 1,142,728,672 1,358,792,997 Total liabilities and shareholder's equity 2,563,901,153 2,562,264,180 The Notes to the Financial Statements form an integral part of the statement of financial position as of 31 December 2023. The Chief Accountant The Board of Directors 3.1 Individual Financial Statements 3.2 Integrated Annual Report 2023 01 02 03 04 288 Statement of income by nature For the financial years ended on 31 December 2022 and 2023 (Amounts stated in euros) Notes 2022 2023 Revenues: Services rendered 23 15,561,339 21,475,143 Other operating revenues 11,366 7,240 15,572,705 21,482,383 Costs, losses and gains: Wages and salaries 24 7,452,365 7,818,282 Marketing and advertising 2,859 1,235 Support services 25 1,376,775 1,594,654 Supplies and external services 25 816,559 594,331 Other operating losses / (gains) 26 60,776 52,063 Taxes 110,638 127,609 Provisions and adjustments 18 (42,299) 313,204 Depreciation, amortization and impairment losses 6, 7 and 8 119,577 121,273 Restructuring costs 27 - 2,784,685 Other losses / (gains) non recurrent 28 187,570 (22,488) 10,084,820 13,384,848 Income before financial results and taxes 5,487,885 8,097,535 Financial costs / (revenues) 29 (11,198,554) 2,261,702 Foreign exchange losses / (gains) 517 (166) Losses / (gains) of affiliated companies 30 (55,969,155) (4,691,222) Other financial expenses / (income) 29 3,047,472 3,081,118 (64,119,720) 651,432 Income before taxes 69,607,605 7,446,103 Income taxes 13 2,739,401 1,071,782 Net income 66,868,204 6,374,321 Earnings per share Basic - euros 16.6 0.13 0.01 Diluted - euros 16.6 0.13 0.01 The Notes to the Financial Statements form an integral part of the statement of income by nature for the year ended on 31 December 2023. The Chief Accountant The Board of Directors 3.1 Individual Financial Statements 3.2 Integrated Annual Report 2023 01 02 03 04 289 Statement of comprehensive income For the financial years ended on 31 December 2022 and 2023 (Amounts stated in euros) Notes 2022 2023 Net income 66,868,204 6,374,321 Other income Items that may be reclassified to the income statement Fair value of interest rate swap 21 10,956,679 (6,596,174) Deferred income tax - interest rate swap 13 and 21 (2,465,253) 1,484,139 Fair value of equity swaps 21 185,872 - Deferred income tax - equity swap 21 (41,821) - Other comprehensive income 8,635,477 (5,112,035) Total comprehensive income for the year 75,503,681 1,262,286 The Notes to the Financial Statements form an integral part of the statement of comprehensive income for the year ended on 31 December 2023. The Chief Accountant The Board of Directors 3.1 Individual Financial Statements 3.2 Integrated Annual Report 2023 01 02 03 04 290 Statement of changes in shareholders’ equity For the financial years ended on 31 December 2022 and 2023 (Amounts stated in euros) Notes Share capital Capital issued premium Own shares Legal reserve Other reserves and accumulated earnings Net income Total Balance as of 1 January 2022 5,151,614 854,218,633 (12,353,087) 1,030,323 420,980,086 220,718,915 1,489,746,484 Result appropriation Transfered to reserves - - - - 220,718,915 (220,718,915) - Dividends paid 16.5 - - - - (142,357,122) - (142,357,122) Increase in share capital by incorporation of capital issued premium 16.2 850,016,277 (850,016,277) - - - - - Acquisition of own shares 16.3 - - (7,087,403) - - - (7,087,403) Distribution of own shares - share plan 16.3 - - 3,186,762 - (3,186,762) - - Distribution of own shares - other remunerations 16.3 - - 286,199 - (14,052) - 272,147 Share Plan - costs incurred in the year and others - - - - 5,094,694 - 5,094,694 Comprehensive income for the year - - - - 8,635,477 66,868,204 75,503,681 Balance as of 31 December 2022 855,167,891 4,202,356 (15,967,529) 1,030,323 509,871,236 66,868,204 1,421,172,481 Balance as of 1 January 2023 855,167,891 4,202,356 (15,967,529) 1,030,323 509,871,236 66,868,204 1,421,172,481 Result appropriation Transfered to reserves - - - 3,343,410 63,524,794 (66,868,204) - Dividends paid 16.5 - - - - (219,986,824) - (219,986,824) Acquisition of own shares 16.3 - - (5,171,275) - - - (5,171,275) Distribution of own shares - share plan 16.3 - - 5,969,560 - (5,969,560) - - Distribution of own shares - other remunerations 16.3 - - 110,254 - 6,379 - 116,633 Share Plan - costs incurred in the year and others 34 - - - - 5,094,232 - 5,094,232 Share Plan - debit to subsidiaries 34 - - - - 983,650 - 983,650 Comprehensive income for the year - - - - (5,112,035) 6,374,321 1,262,286 Balance as of 31 December 2023 855,167,891 4,202,356 (15,058,990) 4,373,733 348,411,872 6,374,321 1,203,471,183 The Notes to the Financial Statements form an integral part of the statement of changes in shareholders' equity for the year ended on 31 December 2023. The Chief Accountant The Board of Directors 3.1 Individual Financial Statements 3.2 Integrated Annual Report 2023 01 02 03 04 291 Statement of cash flows For the financial years ended on 31 December 2022 and 2023 (Amounts stated in euros) Notes 2022 2023 Operating activities Collections from clients 15,366,650 20,618,467 Payments to suppliers (1,831,994) (2,570,587) Payments to employees (4,200,310) (6,211,906) Receipts / (payments) relating to income taxes (11,399,216) (21,719,829) Other cash receipts / (payments) related with operating activities 7,383,436 (9,914,606) Cash flow from operating activities (1) 5,318,566 (19,798,461) Investing activities Cash receipts resulting from Financial investments 9 31,107,363 1,100,000 Loans granted 493,931,127 139,723,018 Interest and related income 22,853,777 36,917,765 Dividends 90,397,793 33,063,022 638,290,060 210,803,805 Payments resulting from Financial investments (4,063,500) (240,000) Tangible assets (6,993) (6,958) Loans granted (395,946,500) (15,761,064) (400,016,993) (16,008,022) Cash flow from investing activities (2) 238,273,067 194,795,783 Financing activies Cash receipts resulting from Borrowings 448,359,537 702,200,000 448,359,537 702,200,000 Payments resulting from Borrowings (520,533,333) (606,600,000) Lease rentals (principal) (118,917) 118,057 Interest and related expenses (14,563,270) (41,802,334) Dividends 16.5 (142,357,122) (219,986,824) Acquisition of own shares 16.3 (7,087,403) (5,171,275) (684,660,045) (873,678,490) Cash flow from financing activities (3) (236,300,508) (171,478,490) Change in cash and cash equivalents (4)=(1)+(2)+(3) 7,291,125 3,518,832 Cash and cash equivalents at the beginning of the year 341,947 7,633,072 Cash and cash equivalents at the end of the year 7,633,072 11,151,904 Cash and cash equivalents 15 7,633,072 11,187,505 Bank overdrafts 17 - (35,601) The Notes to the Financial Statements form an integral part of the statement of cash flows for the year ended on 31 December 2023. The Chief Accountant The Board of Directors 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 292 Notes to the individual financial statements On 31 December 2023 (Amounts stated in euros, unless otherwise stated) 1. Introductory note NOS, SGPS, S.A. ("NOS", “NOS SGPS” or "Company"), whose designation did not change during the year, formerly named ZON OPTIMUS, SGPS, S.A. (“ZON OPTIMUS”) and until 27 August 2013, named ZON Multimédia – Serviços de Telecomunicações e Multimédia, SGPS, S.A. (“ZON”), with Company headquarters registered at Rua Actor António Silva, nº9, Campo Grande, was established by Portugal Telecom, SGPS, S.A. ("Portugal Telecom") on 15 July 1999 for the purpose of implementing its multimedia business strategy. During the 2007 financial year, Portugal Telecom proceeded with the spin-off of ZON through the attribution of its participation in the company to their shareholders, which become fully independent from Portugal Telecom. During the 2013 financial year, ZON and Optimus, SGPS, S.A. ("Optimus SGPS") have merged through the incorporation of Optimus SGPS into ZON. Thereafter, the Company adopted the designation of ZON OPTIMUS, SGPS, S.A. On 20 June 2014, because of the launch of the new brand “NOS” on 16 May 2014, the General Meeting of Shareholders approved the change of the Company’s name to NOS, SGPS, S.A. The businesses operated by NOS and its associated companies, form the "NOS Group" or "Group", which includes cable and satellite television services, voice and Internet access services, video production and sale, advertising on Pay TV channels, cinema exhibition and distribution, the production of channels for Pay TV, management of datacenters and consulting services in IT, mainly in the Portuguese market. NOS shares are listed on the Euronext Lisbon market. The shareholders’ structure of the Company as of 31 December 2023 is shown in Note 16. These notes to the Financial Statements follow the order in which the items are shown in the individual financial statements. The attached financial statements refer to the Company on an individual and non-consolidated basis and have been prepared for publication in accordance with current commercial legislation. In accordance with the IFRS, financial investments were recorded at cost. Consequently, the accompanying financial statements don't include the effect of consolidating assets, liabilities, income and expenses, which will be done in the consolidated financial statements. The effect of this consolidation is to increase assets and net profit for the year by 906,716 thousand euros and 174,621 thousand euros, respectively, and to reduce shareholders' equity by 208,784 thousand euros. The individual financial statements for the financial year ended on 31 December 2023 were approved by the Board of Directors and their issue authorized on 5 March 2024. They are also subject to approval by the General Shareholders' Meeting, under the terms of the commercial legislation in force in Portugal. The Board of Directors believes that these financial statements give a true and fair view of the Company's operations, financial performance and cash flows. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 293 2. Accounting policies The principal accounting policies adopted in the preparation of the financial statements are described below. These policies were consistently applied to all the financial years presented, unless otherwise stated. 2.1. The principles of presentation The individual financial statements of NOS were prepared in accordance with International Financial Reporting Standards ("IAS/IFRS") issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the former Standing Interpretations Committee ("SIC"), adopted by the European Union, effective 1 January 2023. The individual financial statements are presented in euros as this is the main currency of the Company. The financial statements have been prepared on a going concern basis from the Company's accounting books and records and under the historical cost convention, modified, where applicable, by the valuation of financial assets and liabilities (including derivatives) at fair value. In preparing the individual financial statements, in accordance with IFRS, the Board used estimates, assumptions, and critical judgments with impact on the value of assets and liabilities and the recognition of income and costs in each reporting period. Although these estimates were based on the best information available at the date of preparation of the individual financial statements, current and future results may differ from these estimates. The areas involving a higher element of judgment and estimates are described in Note 4.1. In the preparation and presentation of the consolidated financial statements, NOS declares that it complies explicitly and without reservation with IAS/IFRS reporting standards and related SIC/IFRIC interpretations as approved by the European Union. Changes in accounting policies and disclosures The following standards, interpretations, amendments and revisions endorsed by the European Union have mandatory application for the first time in the financial year beginning on 1 January 2023: • IFRS 17 - Insurance Contracts. IFRS 17 replaces IFRS 4 and applies to all insurance contracts (i.e., life, non-life, direct insurance and reinsurance), regardless of the type of entity issuing them, as well as some guarantees and some financial instruments with discretionary participation characteristics. In general terms, IFRS 17 provides a more useful and consistent accounting model for insurance contracts for issuers. In contrast to the requirements of IFRS 4, which are based on previously adopted local accounting policies, IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects. • Amendments to IFRS 17 - Insurance contracts - Initial application of IFRS 17 and IFRS 9 - This amendment to IFRS 17 refers to the presentation of comparative information for financial assets in the initial application of IFRS 17. The amendment adds a transition option that allows an entity to overlay the classification of a financial asset in the comparative period(s) presented on initial application of IFRS 17. The overlay allows all financial assets, including those held in relation to non-contract activities within the scope of IFRS 17, to be classified, instrument by instrument, in the comparative period(s) in a manner aligned with how the entity expects those assets to be classified on initial application of IFRS 9. • Amendments to IAS 1 - Disclosure of accounting policies. These changes are intended to help an entity disclose 'material' accounting policies, previously referred to as 'significant' policies. However, due to the absence of this concept in the IFRS, it was decided to replace it with the concept of "materiality", a concept already known to users of financial statements. When assessing the materiality of accounting policies, the entity must consider not only the size of the transactions but also other events or conditions and their nature. • Amendments to IAS 8 - Definition of accounting estimates. The amendment clarifies the distinction between a change in accounting estimate, a change in accounting policy and the correction of errors. In addition, it clarifies how an entity uses measurement techniques and inputs to develop accounting estimates. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 294 • Amendments to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction. IAS 12 now requires an entity to recognize deferred tax when its initial recognition gives rise to equal amounts of taxable temporary differences and deductible temporary differences. However, it is a matter of professional judgment whether such deductions are attributable to the liability that is recognized in the financial statements or to the related asset. This is particularly important when determining the existence of temporary differences on initial recognition of the asset or liability, as the initial recognition exception does not apply to transactions that give rise to equal taxable and deductible temporary differences. Among the applicable transactions are the recording of (i) right-of-use assets and lease liabilities; (ii) provisions for dismantling, restoration or similar liabilities, and the corresponding amounts recognized as part of the cost of the related asset, when on the date of initial recognition, they are not relevant for tax purposes. This amendment applies retrospectively. • Amendments to IAS 12 - International Tax Reform - Second Pillar Model Rules. These changes come as part of the implementation of the OECD's Global Anti-Base Erosion ("Globe") rules, which may have significant impacts on the calculation of deferred taxes that are difficult to estimate at the time these changes were issued. These amendments introduce a temporary exception to the accounting of deferred taxes arising from the application of the model rules of the second pillar of the OECD, and additionally establish new specific disclosure requirements for the affected entities. These standards and amendments had no material impact on the Company's financial statements. The following standards, interpretations, amendments and revisions, with mandatory application in future financial years, have been endorsed by the European Union up to the date of approval of these financial statements: • Amendments to IAS 1 - Presentation of financial statements - Classification of current and non-current liabilities. This amendment aims to clarify the classification of liabilities as current or non-current balances depending on the rights an entity has to defer their payment at the end of each reporting period. The classification of liabilities is not affected by the entity's expectations (the assessment should determine whether a right exists but should not consider whether or not the entity will exercise that right), or by events occurring after the reporting date, such as non- compliance with a covenant. However, if the right to defer settlement for at least twelve months is subject to certain conditions being met after the balance sheet date, these criteria do not affect the right to defer settlement for the purpose of classifying a liability as current or non-current. This amendment also includes a new definition of "settlement" of a liability and is of retrospective application. • Amendments to IFRS 16 - Lease liabilities in sale and leaseback transactions. This amendment to IFRS 16 introduces guidance on the subsequent measurement of lease liabilities related to sale and leaseback transactions that qualify as a "sale" under the principles of IFRS 15, with greater impact when some or all of the lease payments are variable lease payments that do not depend on an index or a rate. When subsequently measuring lease liabilities, seller- lessees should determine "lease payments" and "revised lease payments" in such a way that they do not recognize gains/(losses) in relation to the right of use they retain. This amendment is retrospective. The Company did not early apply any of these standards in the financial statements for the financial year ended on 31 December 2023. No significant impacts are expected on the financial statements as a result of their adoption. The following standards, interpretations, amendments and revisions, with mandatory application in future financial years, have not, as of the date of approval of these financial statements, been endorsed by the European Union: • Amendments to IAS 7 and IFRS 7 - Disclosures: Supplier financing arrangements. These amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures, aim to clarify the characteristics of a supplier financing arrangement and introduce additional disclosure requirements when such arrangements exist. The disclosure requirements are intended to help users of financial statements understand the effects of supplier financing arrangements on the entity's liabilities, cash flows and exposure to liquidity risk. The amendments come into force for the period beginning on or after January 1, 2024. Early adoption is permitted but must be disclosed. • Amendments to IAS 21 - The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability. This amendment aims to clarify how to assess the exchangeability of a currency, and how the exchange rate should be determined when it is not exchangeable for a long period. The amendment specifies that a currency should be considered exchangeable when an entity is able to obtain the other currency within a period that allows for normal 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 295 administrative management, and through an exchange or market mechanism in which an exchange transaction creates enforceable rights and obligations. If a currency cannot be exchanged for another currency, an entity must estimate the exchange rate at the measurement date of the transaction. The objective is to determine the exchange rate that would be applicable on the measurement date for a similar transaction between market participants. The amendments also state that an entity may use an observable exchange rate without making any adjustment. The amendments come into force for the period beginning on or after January 1, 2025. Early adoption is permitted, however the transition requirements applied must be disclosed. These standards have not yet been endorsed by the European Union and, as such, were not applied by the Company in financial year ended on 31 December 2023. No significant impacts are expected on the financial statements as a result of their adoption. 2.2. Transactions and balances in foreign currencies Transactions in foreign currency are recorded at exchange rates on transactions dates. At each reporting date, the carrying amounts of monetary items denominated in foreign currency are updated by applying the exchange rate prevailing on that date. Non-monetary items carried at fair value denominated in foreign currency are restated at the exchange rates of the respective dates on which the fair values were determined. Exchange rate differences on monetary items that constitute an extension of the investment denominated in the functional currency of the Company or the subsidiary in question are recognized as the exchange rate on investment in shareholder’s equity. Exchange rate differences on non-monetary items are classified under “Other reserves”. Exchange differences arising on the date of receipt or payment of foreign currency transactions and the resulting updates of the above are recognized in the income statement, under "Foreign exchange losses / (gains)" for all other balances or transactions. On 31 December 2022 and 2023, assets and liabilities expressed in foreign currencies were converted into euros using the following exchange rates of such currencies against the euro, as published by the Bank of Portugal: 31-12-2022 31-12-2023 Currency US Dollar 1.0666 1.1050 2.3. Tangible assets Tangible assets are stated at acquisition cost less accumulated depreciation and eventual impairment losses. The acquisition cost includes the purchase price of the asset, expenses directly attributable to the purchase and costs incurred in preparing the asset to be ready for utilization. Costs incurred on borrowings for the construction of tangible fixed assets are recognized as part of the cost of the asset, whenever the period of construction / preparation is more than one year. Subsequent costs with renovations and major repairs that extend the useful life or productive capacity of assets are recognized as a cost of the asset. The costs of current maintenance and repairs are recognized as a cost when they are incurred. The estimated costs of dismantling and removal of the assets will be considered as part of the initial cost. Tangible assets are depreciated from the time they are completed or ready to be used. These assets, less their residual value, are depreciated by the straight-line method, in twelfths, from the month in which they become available for use, according to the useful life of the assets defined as their estimated utility. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 296 The depreciation rates used corresponds to the following useful lives: 2022 2023 Class of goods (Years) (Years) Buildings and other constructions 10 10 Basic equipment 3 to 4 3 to 4 Transportation equipment 4 4 Administrative equipment 2 to 10 2 to 10 Other tangible assets 8 8 The useful lives and depreciation method of the tangible assets are reviewed annually. The effect of any changes to these estimates is recognized prospectively in the income statement. The residual values of assets and their respective useful lives are reviewed and adjusted if appropriate, at the reporting date. If the carrying amount exceeds the recoverable amount of the asset, it is readjusted to the estimated recoverable amount by recognizing impairment losses (Note 2.6). Gains and/or losses resulting from the sale of a tangible fixed asset, determined as the difference between realizable value of the transaction and the accounting net value, are recognized in the account “Losses/(gains) on sale of assets”. 2.4. Intangible assets Intangible assets are stated at acquisition cost less accumulated amortization and impairment losses, when applicable. Intangible assets are recognized only when they are identifiable, generate future economic benefits for the Company and can be measured reliably. The Company conducts a periodic impairment assessment of the intangible assets available for use. This impairment assessment is also carried out whenever an event or change in circumstances that indicates that the amount for which the asset is recorded may not be recovered is identified. If this happens, the Company determines the recoverable value of the asset, in order to determine if an impairment loss exists and its extent. The useful lives of the intangible assets are classified as finite or indefinite. Intangible assets with finite useful lives are amortized over their useful lives, with an impairment analysis carried out whenever there are indications that the amount at which the intangible asset is mentioned in the financial statements may not be recovered. The amortization period and the amortization method of an intangible asset with a finite useful life are reviewed periodically. Any changes in the expected useful life or in the expected pattern of future consumption of the economic benefits incorporated in the asset, are considered in the modification over the period or method of amortization and, if verified, are treated as changes in accounting estimates. The amortization costs of intangible assets with finite lives are recognized in the income statement. These assets are amortized by the straight-line method, in twelfths, from the beginning of the month in which they become available for use. The amortization rates used correspond to the following estimated useful lives: 2022 2023 Class of goods (Years) (Years) Computer Programs 3 3 Industrial property and other rights 3 3 The intangible assets with indefinite useful lives are not amortized, and impairment assessments are performed annually. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 297 Accordingly, the useful life of an intangible asset that is not being amortized is periodically reviewed to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If not, the change in the assessment of the useful life from indefinite to finite is accounted for as a change in an accounting estimate. 2.5. Goodwill Goodwill represents the excess of acquisition cost over the net fair value of the assets, liabilities, and contingent liabilities of a business, a subsidiary, jointly controlled company or associated, at the acquisition date, if this is not a business combination of entities under common control in accordance with IFRS 3. In the case of a business combination of entities under common control, Goodwill represents the excess of acquisition cost over the fair value of the asset and liabilities of the acquired business. Goodwill is presented as a component of the acquisition cost of the financial investments, in the separate accounts of NOS, when business is embodied in an entity. Given the policy followed by the Company in the recognition and measurement of financial investments, Goodwill is recorded as an asset and included in “Intangible assets” if the excess of the costs common from an acquisition by merger, and in “Financial investments in group companies” in an acquisition of a subsidiary jointly controlled company or an associated company. Goodwill is not amortized and is subject to impairment tests at least once a year, on a specified date, and whenever there are changes in the test’s underlying assumptions at the date of the statement of financial position which may result in a possible loss of value. Any impairment loss is recorded immediately in the income statement in “Impairment losses” and is not liable to subsequent reversal. For the purposes of impairment tests, goodwill is attributed to the cash-generating units to which it is related, which may correspond to the business segments in which the Company operates, or a lower level. On disposal of a subsidiary, associate or jointly controlled entity, the corresponding goodwill is included in determining the corresponding gain or loss realized. 2.6. Impairment of tangible and intangible assets, excluding goodwill At each reporting date is carried out a review of the carrying amounts of tangible fixed assets and intangible assets of the Company to determine whether there is any indication that the recorded amount may not be recoverable. If there is any indicator, we estimate the recoverable amount of the respective assets in order to determine the extent of the impairment loss (if any). When it is not possible to determine the recoverable amount of an individual asset, the recoverable amount is estimated for the cash-generating unit to which the asset belongs. The recoverable amount of the asset or cash-generating unit is the greater of (i) the fair value less costs to sell and (ii) the current use value. In determining the current use value, the estimated future cash flows are discounted using a discount rate that reflects market expectations for the time value of money and the risks specific to the asset or cash-generating unit for which the estimates of future cash flows have not been adjusted. When the carrying amount of the asset or cash-generating unit exceeds its recoverable amount, is recognized as an impairment loss. The impairment loss is recognized immediately in the income statement under "Depreciation, amortization, and impairment losses" unless such loss offset a revaluation surplus recorded in shareholders’ equity. The reversal of impairment losses recognized in previous years is recorded when there are indications that these losses no longer exist or have decreased. The reversal of impairment losses is recognized in the statement of comprehensive income in the captions referred in the previous paragraph. The reversal of the impairment loss is made up to the amount that would be recognized (net of amortization) if no impairment loss had been recorded in previous years. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 298 2.7. Investments in-Group companies Financial investments in Group companies (companies in which the Company holds directly or indirectly controlling, considering that control over an entity exists when the Group is exposed, and or has rights, as a result of their involvement, on the variable returns the entity's activities, and has the ability to affect this return through the power over the entity) are recorded under the caption "Financial investments in Group companies', at their acquisition cost, in accordance with IAS 27, as Company presents, separately, consolidated financial statements in accordance with IAS/IFRS. Under this caption are also recorded at nominal value, supplementary capital granted to subsidiaries. An evaluation of investments in Group companies is performed when there are indications that the recorded amount may not be recoverable, or impairment losses recorded in previous years no longer exist. Impairment losses detected on the realizable value of the financial investments in Group companies are recognized in the year in which they are estimated, under the caption “Losses / (gains) of affiliated companies" in the income statement. Impairment losses on investments in Group companies are calculated using two different methods, and the one with the highest value is chosen: i) comparison of the carrying value of the investment with its recoverable value, the latter being the highest among the use value and the fair value less the cost of selling; and ii) comparison of the carrying value of the investment with its fair value less the cost of selling. The identification of impairment indicators, the estimate of future cash flows and the determination of the fair value of assets less costs to sell particularly in the Angolan subsidiaries (fair value less costs to sell including a discount / risk premium resulting from uncertainties related to these companies), imply a high level of judgment from the Board of Directors regarding the identification and assessment of the different impairment indicators and expected cash flows. The expenses incurred with the acquisition of financial investments in Group companies are recorded as cost when they are incurred. 2.8. Financial assets Financial assets are recognized in the statement of financial position of the Company on the trade or contract date, which is the date on which the Company undertakes to purchase or sell the asset. Initially, apart from commercial accounts receivable, financial assets are recognized at fair value plus directly attributable transaction costs, except for assets at fair value through income in which transaction costs are immediately recognized in income. Trade accounts receivable, at the initial time, are recognized at their transaction price, as defined in IFRS 15. These assets are derecognized when: i. the Company’s contractual rights to receive their cash flows expire; ii. the Company has substantially transferred all the risks and benefits associated with their ownership; or iii. although it retains part but not substantially all the risks and benefits associated with their ownership, the Company has transferred control of the assets. Financial assets and liabilities are offset and shown as a net value when, and only when, the Company has the right to offset the recognized amounts and intends to settle for the net value. The Company classifies its financial assets into the following categories: financial investments at fair value through profit or loss, financial assets measured at amortized cost, financial assets at fair value through other comprehensive income. Its classification depends on the entity's business model to manage the financial assets and the contractual characteristics in terms of the cash flows of the financial asset. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 299 Financial assets at fair value through profit and loss This category includes financial derivatives and equity instruments that the Company has not classified as financial assets through other comprehensive income at the time of initial recognition. This category also includes all financial instruments whose contractual cash flows are not exclusively capital and interest. Financial assets at fair value through results are presented in the financial statements at fair value, the net changes being known in the income statement. This category of assets includes derivative instruments and investments in listed companies which the Company has not classified as financial assets at fair value through other comprehensive income. Dividends from investments in listed companies are recognized as income in the income statement when the respective right of receipt is formalized. Gains and losses resulting from changes in the fair value of assets measured at fair value through profit or loss are recognized in results in the year in which they occur under “Losses / (gains) on financial assets”, including the income from interest and dividends. Financial assets at fair value through other comprehensive income Financial assets measured at fair value through other comprehensive income are those that are part of a business model whose objective is achieved through the collection of contractual cash flows and the sale of financial assets, being that these contractual cash flows are only capital and interest reimbursement on the capital in debt. Financial assets measured at amortized cost Financial assets measured at amortized cost are those that are included in a business model whose purpose is to hold financial assets in order to receive the contractual cashflows, being that these contractual cash flows are only capital reimbursement and interest payments on the capital in debt. Financial assets measured at amortized cost are subsequently measured using the effective tax rate method and subject to impairment. Income and costs are recognized in the income statement when the asset is derecognized, updated or an impairment is recognized over it. Financial assets measured at the Company's amortized cost include accounts receivable and loans granted to related parties. Cash and cash equivalents The amounts included in “Cash and cash equivalents” correspond to the amounts of cash, bank deposits, term deposits and other investments with maturities of less than three months which may be immediately realizable and with a negligible risk of change of value. For the purposes of the statement of cash flows, “Cash and cash equivalents” also includes bank overdrafts included in the statement of financial position under “Borrowings” (when applicable). 2.9. Financial liabilities and equity instruments Financial liabilities and equity instruments are classified according to their contractual substance irrespective of their legal form. Equity instruments are contracts that show a residual interest in the Company’s assets after deducting the liabilities. The equity instruments issued by the Company are recorded at the amount received, net of the costs incurred in their issue. Financial liabilities and equity instruments are regained only when extinguished, i.e., when the obligation is settled, cancelled or extinguished. In accordance with IFRS 9, financial liabilities are classified as subsequently measured at amortized cost, except for: • Financial liabilities at fair value through profit or loss. These liabilities, including derivatives that are liabilities, should subsequently be measured at fair value; • Financial liabilities that arise when a transfer of a financial asset does not meet the conditions for derecognition or when it is applied the continued involvement approach; 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 300 • Financial guarantee contracts; • The commitments to grant a loan at a lower interest rate than the market; • The recognized contingent consideration by a buyer in a concentration of business activities to which IFRS 3 applies. Such contingent consideration shall be subsequently measured at fair value, with changes recognized in profit or loss. Financial liabilities of the Company include borrowings, accounts payable and derivative financial instruments. 2.10. Impairment of financial assets At the date of each statement of financial position, the Company analyses and recognizes expected losses on its debt securities, loans and accounts receivable. The expected loss results from the difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive, discounted at the original effective interest rate. The objective of this impairment policy is to recognize expected credit losses over the respective duration of financial instruments that have undergone significant increases in credit risk since initial recognition, assessed on an individual or collective basis, taking into account all reasonable and sustainable information, including prospects. If, at the reporting date, the credit risk associated with a financial instrument has not increased significantly since the initial recognition, the Company measures the provision for losses relating to that financial instrument by an amount equivalent to the expected credit losses within a period of 12 months. For receivables and assets resulting from contracts under IFRS 15, the Company adopts the simplified approach when calculating expected credit losses. As a result, NOS does not monitor changes in credit risk, recognizing instead impairment losses based on the expected credit loss on each reporting date. The Company established a provisions’ matrix where it presents an impairment loss criterion based on the history of credit losses, adjusted by specific prospective factors for the clients and the economic environment. 2.11. Derivate financial instruments Initial and subsequent recognition The Company uses derivative financial instruments, such as exchange rate forward contracts, interest rate swaps, to cover its exchange rate risks, interest, respectively. Such derivative financial instruments are initially recorded at fair value on the date the derivative is contracted and are subsequently measured at fair value. Derivatives are presented in assets when their fair value is positive and in liabilities when their fair value is negative. In terms of hedge accounting, hedges are classified as: • Fair value hedge when the purpose is to hedge the exposure to fair value changes of a registered asset or liability or an unregistered Company’s’ commitment; • Cash flow hedge when the purpose is to hedge the exposure to cash flow variability arising from a specific risk associated with the whole or a component of a registered asset or liability or an anticipated highly probable occurrence or exchange risk associated with an unregistered Company’ commitment; • Coverage of a net investment in a foreign operational unit. NOS uses derivative financial instruments with fair value and cash flow hedges. At the beginning of the hedge relationship, the Company formally designates and documents the hedging relationship for which hedge accounting is intended to apply as well as the management and strategy purpose of such hedge. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 301 The documentation includes the identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the Company will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: i. There is an economic relationship’ between the hedged item and the hedging instrument; ii. The effect of credit risk does not “dominate the value changes” that result from that economic relationship; and iii. The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Company actually hedges and the quantity of the hedging instrument that the Company actually uses to hedges that quantity of hedged item. Hedges that meet all the quantifying criteria for hedge accounting are accounted for, as described below: Fair value hedges The change in the fair value of a hedging instrument is recognized in the statement of profit or loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognized in the statement of profit or loss. For fair value hedges relating to items carried at amortized cost, any adjustment to carrying value is amortized through profit or loss over the remaining term of the hedge using the EIR method. The EIR amortization may begin as soon as an adjustment exists and no later than when the hedged item ceases to be adjusted for changes in its fair value attributable to the risk being hedged. If the hedged item is derecognized, the unamortized fair value is recognized immediately in profit or loss. When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognized as an asset or liability with a corresponding gain or loss recognized in profit or loss. Cash flow hedges The effective portion of the gain or loss on the hedging instrument is recognized in OCI in the cash flow hedge reserve, while any ineffective portion is recognized immediately in the statement of profit or loss. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The Company uses forward contracts of: i) currency contracts for its exposure to foreign currency risk in forecast transactions and firm commitments; ii) interest rates to cover the risk of volatility of the interest rates; iii) own shares contracts for its exposure to volatility in own shares to be distributed within the scope of share incentive scheme. The ineffective portion relating to foreign currency contracts is recognized as “Net foreign exchange losses/(gains)”, the ineffective portion relating to interest rates is recognized as “Financial costs” and the ineffective portion relating to own shares contracts is recognized as “Wages and salaries”. The amounts accumulated in OCI are accounted for, depending on the nature of the underlying hedged transaction. If the hedged transaction subsequently results in the recognition of a non-financial item, the amount accumulated in equity is removed from the separate component of equity and included in the initial cost or other carrying amount of the hedged asset or liability. This is not a reclassification adjustment and will not be recognized in OCI for the period. This also applies where the hedged forecast transaction of a non-financial asset or non-financial liability subsequently becomes a Company’s commitment for which fair value hedge accounting is applied. For any other cash flow hedges, the amount accumulated in OCI is reclassified to profit or loss as a reclassification adjustment in the same period or periods during which the hedged cash flows affect profit or loss. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 302 If cash flow hedge accounting is discontinued, the amount that has been accumulated in OCI must remain in accumulated OCI if the hedged future cash flows are still expected to occur. Otherwise, the amount will be immediately reclassified to profit or loss as a reclassification adjustment. After discontinuation, once the hedged cash flow occurs, any amount remaining in accumulated OCI must be accounted for depending on the nature of the underlying transaction as described above. 2.12. Subsidies Subsidies are recognized at their fair value when there is a reasonable assurance that they will be received, and the Company will meet the requirements for their award. Operating subsidies, mainly for employee training, are recognized in the income statement by deduction from the corresponding costs incurred. Investment subsidies are recognized in the statement of financial position as deferred income, and it is recognized as income on a systematic and rational basis over the useful life of the asset. If the subsidy is considered as deferred income, it is recognized as income on a systematic and rational basis during the useful life of the asset. 2.13. Provisions, contingent liabilities and contingent assets Provisions are recognized when: (i) there is a present obligation arising from past events and it is likely that in settling that obligation, the expenditure of internal resources will be necessary; and (ii) the amount or value of such obligation can be reasonably estimated. When one of the above conditions is not met, the Company discloses the events as a contingent liability unless the likelihood of an outflow of funds resulting from this contingency is remote, in which case they are not disclosed. Provisions, for legal procedures taking place against the Company are made in accordance with the risk assessments carried out by the Company and by their legal advisers, based on success rates. Provisions for restructuring are only recognized when the Company has a detailed and formal plan, which identifies the main features of the restructuring program and after these facts have been reported to the entities involved. Obligations that result from onerous contracts are registered and measured as provisions. There is an onerous contract when the Company is an integral part of a contract, which entail costs that exceed the future economic benefits. Provisions for potential future operating losses are not covered. Contingent liabilities are not recognized in the financial statements, unless the exception provided under IFRS 3 business combination, and are disclosed whenever there is a good chance to shed resources including economic benefits. Contingent assets are not recognized in the financial statements, being disclosed when there is a likelihood of a future influx of financial resources. Provisions are reviewed and brought up to date at the date of the statement of financial position to reflect the best estimate at that time of the obligation concerned. 2.14. Rights of use and leases A lease is defined as a contract, or part of a contract, that transfers the right to use a good (the underlying asset) for a period in exchange for a value. At the beginning of each contract, it is evaluated and identified if it is or contains a lease. This assessment involves an exercise of judgment as to whether each contract depends on a specific asset if the NOS obtains substantially all the economic benefits from the use of that asset and whether the NOS has the right to control the use of the asset. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 303 All contracts that constitute a lease are accounted for on the basis of the on-balance model in a similar way with the treatment that IAS 17 establishes for financial leases. At the commencement date of the lease, NOS recognizes the liability related to lease payments (lease liability) and the asset representing the right to use the underlying asset during the lease period (the right of use or "ROU"). The cost of interest on the lease liability and the depreciation of the ROU are recognized separately. Lease liabilities are remeasured at the occurrence of certain events (such as a change in the lease period, a change in future payments that result from a change in the reference rate or rate used to determine such payments). This remeasurement of the lease liability is recognized as an adjustment in the ROU. The estimated costs of dismantling, removal of assets and restoration of the site related with leases are recognized in tangible assets with works carried out. 2.14.1. Rights of use of assets The Company recognizes the right to use the assets at the start date of the lease (that is, the date on which the underlying asset is available for use). The right to use the assets is recorded at acquisition cost, deducted from accumulated depreciation and impairment losses and adjusted for any new measurement of lease liabilities. The cost of the ROU of the assets includes the recognized amount of the lease liability, any direct costs incurred initially, and payments already made prior to the initial rental date, less any incentives received. When IFRS 16 was implemented, during the computation of the values of rights of use, the potential impact of the costs of dismantling and removal of the assets wasn’t considered, since they were already registered as fixed assets. Unless it is reasonably certain that the Company obtains ownership of the leased asset at the end of the lease term, the recognized right of use of the assets is depreciated on a straight-line basis over the shorter of its estimated useful life and the term of the lease. Rights of use are subject to impairment. The rights of used of assets are depreciated using the straight-line method by the shortest period between length of the contract and its expected useful life. If at the end of the leasing contract the asset is transferred to the company, or if the cost reflects the possibility of exercising the call option, the depreciation is calculated according to the estimated useful life of the asset. 2.14.2. Liabilities with leases At the start date of the lease, the Company recognizes the liabilities measured at the present value of the future payments to be made until the end of the lease. Lease payments include fixed payments (including fixed payments on the substance), deducted of any incentives to be received, variable payments, dependent on an index or rate, and expected amounts to be paid under residual value guarantees. The lease payments also include the exercise price of a call option if it is reasonably certain that the Company will exercise the option, and penalties for termination of the lease if it is reasonably certain that the Company will terminate the lease. Variable payments that do not depend on an index or a rate are recognized as an expense in the period in which the event giving rise to them occurs. To calculate the present value of the lease payments, the Company uses the incremental loan rate at the start date of the lease if the implied interest rate is not readily determinable. After the start date of the lease, the value of the lease liability is increased to reflect the increase in interest and reduces by the payments made. In addition, the book value of the lease liability is remeasured if there is a change, such as a change in the lease term, fixed payments or the purchase decision of the underlying asset. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 304 2.15. Income tax NOS is covered by the special tax regime for groups of companies, which covers all the companies in which it directly or indirectly owns at least 75% of the share capital and which simultaneously are resident in Portugal and subject to Corporate Income Tax (IRC). The remaining subsidiaries not covered by the special tax regime for groups of companies are taxed individually based on their respective taxable incomes and the applicable tax rates. Income tax is stated in accordance with the IAS 12 criteria. In calculating the cost relating to income tax for the period, in addition to current tax, allowance is also made for the effect of deferred tax calculated in accordance with the liability method, taking into account the temporary differences resulting from the difference between the tax basis of assets and liabilities and their values as stated in the Company’s financial statements, and the tax losses carried forward at the date of the statement of financial position. The deferred income tax assets and liabilities were calculated based on the tax legislation currently in force or of legislation already published for future application. Deferred income tax assets are recognized for all the deductible temporary differences until it is likely that a taxable profit is obtained to which the deductible temporary difference may be used, unless the deferred income tax asset results from the initial recognition of an asset or liability in a transaction which: a) Is not a concentration of business activities; b) At the moment of the transaction, it does not affect neither the accounting profit nor the taxable profit (fiscal loss); c) With respect to deductible temporary differences arising from investments in subsidiaries, branches and associates and interests in joint arrangements, deferred income tax assets are recognized only to the extent that the temporary difference will revert in the foreseeable future and taxable profit against which the temporary difference can be used will be available. As stipulated in the above standard, deferred income tax assets are recognized only when there is reasonable assurance that these may be used to reduce future taxable profit, or when there are deferred income tax liabilities whose reversal is expected to occur in the same period in which the deferred income tax assets are reversed. At the end of each period, an assessment is made of deferred income tax assets, and these are adjusted in line with the likelihood of their future use. The amount of tax that are either to be included in current tax or in deferred tax, resulting from transactions or events recognized in equity accounts, is directly recorded under those items and does not affect the results for the period. In a business combination, the deferred tax benefits acquired are recognized as follows: a) The deferred tax benefits acquired in the measurement period of one year after the merger, and that result from new information about facts and circumstances that existed at the date of acquisition are recorded against the goodwill-carrying amount related to the acquisition. If the goodwill carrying value is null, any remaining deferred tax benefits are recognized in the income statement. b) All the other acquired deferred tax benefits performed are recognized in the income statement (when applicable, directly in shareholders’ equity). Estimates to deal with uncertainties regarding the acceptance of a given tax treatment by the tax authorities are recognized as deferred tax liabilities. Pillar II The Council of the EU approved the Directive (EU) 2022/2523, of December 15, 2022 ("Directive"), on the guarantee of a worldwide minimum level of taxation for multinational enterprise groups and large domestic groups within the Union, commonly known as "Pillar II". Although Portugal has not met the deadline for transposing this Directive, it is estimated that this will happen in 2024. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 305 Considering the rules approved in the Directive and the best information available at the moment, NOS has carried out an assessment of the possible impacts of Pillar II for the NOS Group, and it is estimated that the group will benefit from the supplementary tax exclusion in the initial phase of international activity, provided for in Article 49 of the Directive, under the transitional regime, applicable for a period of 5 years (2024-2028). 2.16. Share-based payments The benefits granted to employees under share purchase or share option incentive plans are recorded in accordance with the requirements of IFRS 2 – Share-based payments. In accordance with IFRS 2, since it is not possible to reliably estimate the fair value of the services received from employees, their value is measured by reference to the fair value of equity instruments (own shares) in accordance with their share price at the grant date. The cost is recognized linearly over the period in which the service is provided by employees, under the caption “Wages and salaries” in the income statement, with the corresponding increase in other reserves, in equity. The accumulated cost recognized at the date of each statement of financial position up to the vesting reflects the best estimate of the number of own shares that will be vested, weighted by the time elapsed between the grant and the vesting. The impact on the income statement each year corresponds to the accumulated cost valuation between the beginning and the end of the year. In turn, benefits granted based on shares but paid in cash lead to the recognition of a liability valued at fair value at the date of the statement of financial position. Additionally, the Board of Directors of NOS SGPS, responsible for the plans’ attribution, can decide an additional debit related to costs associated to their management, which is debited to its subsidiaries and recognized in equity. 2.17. Capital Legal reserve Portuguese commercial legislation requires that at least 5% of annual net profit must be appropriated to a legal reserve until it represents at least 20% of the share capital. This reserve is not distributable, except in case of liquidation, but can be used to absorb losses, after having exhausted all other reserves and to increase share capital. Share premium reserves Issue of shares corresponds to premiums from the issuance or capital increases. According to Portuguese law, share premiums follow the treatment given to the "Legal Reserve”, that is, the values are not distributable, except in case of liquidation, but can be used to absorb losses after having exhausted all other reserves and to increase share capital. Reserves for plans of medium-term incentive According to IFRS 2 - "Share-based payments", the responsibility with the medium-term incentive plans settled by delivery of own shares is recorded as credit, under "Reservations for mid-term incentive plans" and such reserve is not likely to be distributed or used to absorb losses. The Company recognizes in equity the responsibility of all the action plans of various companies in the NOS Group, since it is responsible for its delivery to its employees, against results for the year and accounts receivable of subsidiaries when dealing with own employees or employees of subsidiary companies, respectively. Hedging reserves Hedging reserves reflect the changes in fair value of derivative financial instruments as cash flow hedges that are considered effective, and they are not likely to be distributed or be used to absorb losses. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 306 Own shares reserves The "own shares reserves” reflect the value of the shares acquired and follows the same legal regime as the legal reserve. Under Portuguese law, the amount of distributable reserves is determined according to the individual financial statements of the company prepared in accordance with IFRS. In addition, the increases resulting from the application of fair value through equity components, including its application through the net profit can only be distributed when the elements that originated them are sold, exercised liquidated or when the end their use, in the case of tangible fixed assets or intangible assets. Own shares The own shares are recorded at acquisition cost as a deduction from equity. Gains or losses on the sale of own shares are recorded under "other reserves". Dividends The company recognizes the liability, as well as its impact over the equity, associated with the responsibility to distribute dividends when it is approved by the shareholders. Retained results This item includes the results available for distribution to shareholders and earnings per fair value in financial instruments increases, financial investments and investment properties, which, in accordance with paragraph 2 of article 32 of the CSC, will only be available for distribution when the elements or rights that originated them are sold, exercised, terminated, or settled. 2.18. Revenue The Company's revenue is based on the five-step model established by IFRS 15: • Identification of the contract with the customer; • Identification of performance obligations; • Determining the price of the transaction; • Allocation of the price of the transaction to the performance obligations; and • Recognition of revenue. Thus, at the beginning of each contract, the Company evaluates the promised goods or services and identifies, as a performance obligation, every promise of transfer to the customer of any distinct good or service (or package of goods or services). These promises in customer contracts may be express or implied, provided such promises create a valid expectation in the client that the entity will transfer a good or service to the customer, based on the entity's published policies, specific statements or usual business practices. The Company only provide services, so the recognition of revenue occurs at the time of performance of each performance obligation. Interest revenue is recognized using the effective interest method, only when they generate future economic benefits for the Company and when they can be measured reliably. Revenue from dividends is recognized when the Company’s right to receive the correspondent amount is established. 2.19. Accruals Company’s revenues and costs are recognized in accordance with the accrual’s principle, under which they are recognized as they are generated or incurred, regardless of when they are received or paid. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 307 The costs and revenues related to the current period and whose expenses and income will only occur in future periods are registered under “Accounts receivable”, “Prepaid Expenses”, “Accrued expenses” and “Deferred income”, as well as the expenses and income that have already occurred that relate to future periods, which will be recognized in each of those periods, for the corresponding amount. The costs related to the current period and whose expenses will only occur in that future periods are registered under “Accrued expenses” when it is possible to estimate with certainty the related amount, as well as the timing of the expense’s materialization. If uncertainty exists related to any of these aspects, the value is classified as Provisions. 2.20. Financial charges with borrowing Financial charges related to borrowings are recognized as costs in accordance with the accruals principle, except in the case of loans incurred (whether these are generic or specific) for the acquisition, construction or production of an asset that takes a substantial period (over one year) to be ready for use, which are capitalized in the acquisition cost of that asset. Costs from capitalized borrowings are determined having in consideration the amount of borrowing costs obtained that can be capitalized, according to the application of a capitalization rate over the charges associated with that asset. The capitalization rate (aligned with NOS’ average financing rate) as well as with the costs to be capitalized are determined monthly, taking into consideration the monthly balance of eligible borrowings and the monthly amount of the asset in progress that qualifies. 2.21. Fair value measurement The Company measures part of the financial assets, such as financial assets available for sale, and some of its non- financial assets at fair value on the date of the financial statements. The fair value measurement assumes that the asset or liability is exchanged in an orderly transaction among market participants to sell the asset or transfer the liability at the measurement date under current market conditions. The fair value measurement is based on the assumption that the transaction to sell the asset or transfer the liability may occur: • On the main market of the assets and liabilities, or • In the absence of a primary market, it is assumed that the transaction occurs in the most advantageous market. This is what maximizes the amount that would be received for selling asset or minimizes the amount that would be paid to transfer the liability, after considering transaction costs and transport costs. Since different entities and businesses within a single entity can have access to different markets, the main or most advantageous market for the same asset or liability can vary from one entity to another, or even between businesses within the same entity, but it is assumed that they are accessible to the Company. The fair value measurement uses assumptions that market participant’s use in defining price of the asset or liability, assuming that market participants would use the asset to maximize its value. The Company uses valuation techniques appropriate to the circumstances whenever there is information to measure the fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities measured at fair value or of which disclosure is mandatory, are rated on a fair value hierarchy, which ranks data in three levels to be used in the measurement at fair value, and detailed below: Level 1 – Listed and unadjusted market prices, in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2 - valuation techniques using inputs that aren’t quoted, but which are directly or indirectly observable; Level 3 - valuation techniques using inputs not based on observable market data, based on unobservable inputs. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 308 The fair value measurement is classified in the same fair value hierarchy level at the lowest level of input, which is significant to the measurement as a whole. 2.22. Employee benefits Personnel expenses are recognized when the service is rendered by employees independently of their date of payment. Here are some specificities: a) Termination of employment. The benefits for termination of employment are due for payment when there is cessation of employment before the normal retirement date or when an employee accepts voluntarily to leave in exchange of these benefits. The company recognizes these benefits when it can be shown being committed to a termination of current employees according to a detailed formal plan for termination and there is no realistic possibility of withdrawal, or these benefits are granted to encourage voluntary redundancy. When the benefits of cessation of employment are due more than 12 months after the balance sheet date, they are updated to their present value. b) Holiday, holiday allowances and bonuses. According to the labor law, employees are entitled to 22 days annual leave, as well as one month of holiday allowances, rights acquired in the year preceding payment. These liabilities of the company are recorded when incurred, independently of the moment of payment, and are reflected under the item "Accounts payable and other". c) Labor Compensation Fund (FCT) and the Labor Compensation Guarantee Fund (FGCT). Based on the publication of Law No. 70/2013 and subsequent regulation by Order No. 294-A / 2013, entered into force on 1 October the Labor Compensation Fund schemes (FCT) and the Guarantee Fund Compensation of Labor (FGCT). In this context, companies that hire a new employee are required to deduct a percentage of the respective salary for these two new funds (0.925% to FCT and 0.075% to FGCT), in order to ensure, in the future, the partial payment the compensation for dismissal. Considering the characteristics of each Fund, the following is considered: • The monthly deliveries to FGCT, made by the employer are recognized as expense in the period to which they relate; • The monthly deliveries to FCT, made by the employer are recognized as a financial asset of the entity, measured at fair value with changes recognized in the respective results. With the publication of Law no. 13/2023, as of 1 May 2023, it is no longer mandatory to make payments corresponding to 0.925% of each worker's basic salary and seniority to the FCT, which has been converted into a closed accounting fund. According to the same law, the obligations relating to the FGCT corresponding to 0.075% are suspended for the duration of the Medium-Term Agreement for the improvement of incomes, wages and competitiveness, which is expected to run until 2026. 2.23. Statement of cash flows The statement of cash flows is prepared in accordance with the direct method. The Company classifies under “Cash and cash equivalents” the assets with maturities of less than three months and for which the risk of change in value is negligible. For purposes of the statement of cash flows, the balance of cash and cash equivalents also include bank overdrafts included in the statement of financial position under "Borrowings". The statement of cash flows is divided into operating, investment, and financing activities. Operating activities include cash received from customers and payments to suppliers, staff and others related to operating activities. The cash flows included in investment activities include acquisitions and disposals of investments in subsidiaries and cash received and payments arising from the purchase and sale of tangible and intangible assets, amongst others. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 309 Financing activities include cash received and payments relating to borrowings, the payment of interest and similar costs, finance leases, the purchase and sale of own shares and the payment of dividends. 2.24. Subsequent events Events occurring after the date of the statement of financial position, which provide additional information about conditions that existed at that date, are taken into account in the preparation of financial statements for the period. Events occurring after the date of the statement of financial position, which provide information on conditions that occur after that date, are disclosed in the notes to the financial statements, when they are materially relevant. 3. Judgements and estimates The preparation of financial statements requires the Company’s management to make judgments and estimates that affect the statement of financial position and the reported results. These estimates are based on the best information and knowledge about past and/or present events, and on the operations that the Company considers it may implement in the future. However, at the date of completion of such operations, their results may differ from these estimates. Changes to these estimates that occur after the date of approval of the financial statements will be corrected in the income statement in a prospective manner, in accordance with IAS 8 - "Accounting Policies, Changes in Accounting Estimates and Errors". The estimates and assumptions that imply a greater risk of giving rise to a material adjustment in assets and liabilities are described below: 3.1. Relevant accounting estimates 3.1.1. Provisions The Company periodically reviews any obligations arising from past events, which should be recognized or disclosed. The subjectivity involved in determining the probability and amount of internal resources required to meet obligations may give rise to significant adjustments, either due to changes in the assumptions made, or due to the future recognition of provisions previously disclosed as contingent liabilities. 3.1.2. Tangible and intangible assets The determination of the useful lives of assets as well as the amortization / depreciation method to be applied is crucial in determining the amount of amortization / depreciation to be recognized in the statement of comprehensive income for each year. These two parameters are defined using management’s best estimates for the assets and businesses concerned and taking account of the practices adopted by sector companies at international level. 3.1.3. Impairment assets, excluding goodwill The determination of a possible impairment loss can be triggered by the occurrence of various events, many of which outside the Company's sphere of influence, such as future availability of financing, cost of capital, as well as any other changes, either internal or external, to the Company. The identification of impairment indicators, the estimation of future cash flows and determining the fair value of assets involve a high degree of judgment by the Board of Directors with regard to the identification and evaluation of different impairment indicators, expected cash flows, applicable discount rates, useful lives, and residual values. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 310 3.1.4. Impairment of goodwill Goodwill is subjected to impairment tests annually or whenever there are indications of a possible loss of value. The recoverable values of the cash-generating units to which goodwill is allocated are determined based on the calculation of current use values. These calculations require the use of estimates by management. 3.1.5. Fair value of financial assets and liabilities When the fair value of an asset or liabilities is calculated, on an active market, the respective market price is used. When there is no active market, which is the case with some of the Company’s financial assets and liabilities, valuation techniques generally accepted in the market, based on market assumptions, are used. The Company uses evaluation techniques for unlisted financial instruments such as derivatives. The valuation models that are used most frequently are discounted cash flow models and options models, incorporating, for example, interest rate curves and market volatility. For certain types of more complex derivatives, more advanced valuation models are used containing assumptions and data that are not directly observable in the market, for which the Company uses internal estimates and assumptions. 3.2. Misstatement, estimates and changes to accounting policies During the financial years ended on 31 December 2022 and 2023, no material misstatements relating to previous years were recognized. On 31 December 2022, a reclassification of estimates was made to deal with uncertainties regarding the acceptance of a certain tax treatment by the tax authorities, from taxes payable to deferred tax liabilities, in the amount of around 1.3 million euros. 4. Risk management 4.1. Financial risk factors NOS as a holding company (SGPS) develops direct and indirect management activities over its subsidiaries. Thus, the fulfilment of assumed obligations depends on the cash flows generated by these. Therefore, the company depends on the eventual distribution of dividends by its subsidiaries, the payment of interest, repayment of loans and other cash flows generated by those companies. The ability of NOS’ subsidiaries to have available funds will depend, in part, on its ability to generate positive cash flows and, on the other hand, is dependent on the respective results, available reserves, and financial structure. NOS has a program of risk management that focuses its analysis on the financial markets in order to minimize potential adverse effects on its financial performance. Risk management is handled by the Financial Management in accordance with the policy approved by the Board. There is also at NOS an Internal Control Committee with specific functions in the control area of risks of the activity of the Company. 4.2. Exchange rate risk Exchange rate risk is mainly related to exposure resulting from payments made to foreign suppliers mainly denominated in US dollars. Depending on the balance of accounts payable resulting from transactions in a currency different from the Company’s operating currency, the Company’s subsidiaries contract or may contract financial instruments, namely short-term foreign currency forwards, in order to hedge the risk associated with these balances. NOS has investments in foreign companies whose assets and liabilities are exposed to ex-change rate variations (the Group has two subsidiaries in Mozambique, Lusomundo Moçambique and Mstar, whose functional currency is the Metical, and two in Angola, Finstar and ZAP Media, whose functional currency is the Kwanza). NOS has not 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 311 adopted any policy of hedging the risk of exchange rate variations for these companies on cash flows in foreign currencies. Additional disclosures are made in the consolidated financial statements of NOS. On 31 December 2022 and 2023, balances payable to suppliers in currencies other than the Euro are not material. 4.3. Interest rate risk The risk of fluctuations in interest rates can result in a cash flow risk or a fair value risk, depending on whether variable or fixed interest rates have been negotiated. NOS has adopted a policy of hedging risk through the use of interest rate swaps to hedge future interest payments on bond loans and other borrowings. NOS uses a sensitivity analysis technique which measures the expected impacts on results and equity of an immediate increase or decrease of 0.25% (25 basis points) in market interest rates, for the rates applying at the date of the statement of financial position for each class of financial instrument, with all other variables remaining constant. This analysis is for illustrative purposes only, since in practice market rates rarely change in isolation. The sensitivity analysis is based on the following assumptions: • Changes in market interest rates affect interest receivable or payable on financial instruments with variable rates; • Changes in market interest rates only affect interest receivable or payable on financial instruments with fixed interest rates when they are recognized at fair value; • Changes in market interest rates affect the fair value of derivatives and other financial assets and liabilities; • Changes in the fair value of derivatives and other financial assets and liabilities are estimated by discounting future cash flows from current net values using market rates at the end of the year. Under these assumptions, an increase or decrease of 0.25% in market interest rates for loans that are not covered or loans with variable interest on 31 December 2023 would have resulted in an increase or decrease in annual profit before tax of approximately 1.7 million euros and 1.8 million euros, respectively (2022: 1.4 million euros). Regarding the interest rate swaps contracted, the sensitivity analysis that measures the estimated impacts of an immediate increase or decrease of 0.25% (25 basis points) in market interest rates, results in changes, compared to the current fair value of the instruments of more than 79 thousand euros (2022: approximately more than 183 thousand euros) and less than 69 thousand euros (2022: approximately less than 167 thousand euros). Additional disclosures are made in the consolidated financial statements of NOS. 4.4. Credit risk Credit risk is mainly related to the risk of a counterparty defaulting on its contractual obligations, resulting in a financial loss to the Company’s subsidiaries. The Company’s subsidiaries are exposed to credit risk in its operating and treasury activities. This risk is monitored on a regular business basis, and the aim of management is to: i) limit the credit granted to customers, using the average payment time by each customer; ii) monitor the trend in the level of credit granted; and iii) analyze the impairment of receivables on a regular basis. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 312 The Company’s subsidiaries do not face any serious credit risk with any particular client, insofar as the accounts receivable derive from a large number of clients from a wide range of businesses and the subsidiaries obtain credit guarantees, whenever the financial situation of the customer requires. Additional disclosures are made in the consolidated financial statements of NOS. 4.5. Liquidity risk Prudent management of liquidity risk requires the maintenance of an adequate level of cash and cash equivalents to meet the liabilities associated with the negotiation of credit facilities with financial institutions. Under the model adopted, the Group has: i. Commercial paper programmes of which around 668.6 million euros is being used, of which 42.6 million euros issued under programs without underwriting. The commercial paper programmes have a total amount of 925 million euros, corresponding to seventeen programmes, with seven banks, including 825 million euros which bear interest at market rates and 100 million euros issued in fixed rate; ii. Private and direct cash bonds to the value of 425 million euros. Based on estimated cash flows and taking into consideration the compliance with any covenants typically existing in loans payable, management regularly monitors the forecasts of liquidity reserves by the Group, including the amounts of unused credit lines, amounts of cash and cash equivalents. Complementary disclosures are made in the consolidated financial statements of NOS. 4.6. Capital risk management On 31 December 2023, NOS holds financial assets and liabilities valued at fair value, namely interest rate swap derivatives (Note 21). In accordance with IFRS 13 - Fair value measurement, the levels of the fair value hierarchy are described as follows: • Level 1 - Financial instruments valued based on quotations in active markets to which the company has access are included in this category, securities valued based on executable (immediate liquidity) published by external sources. • Level 2 - Financial instruments whose value is based on directly or indirectly observable data in active markets are included in this category, securities valued based on bids provided by external entities and internal valuation techniques using only observable market data. • Level 3 - All financial instruments valued at fair value that do not fall in level 1 and 2. The calculation of the fair value of interest rate swaps derivatives was based on the estimate of discounted future cash flows (Level 2). Complementary disclosures are made in the consolidated financial statements of NOS. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 313 5. Financial assets and liabilities classified in accordance with the IFRS 9 categories – financial instruments The accounting policies set out in IFRS 9 for financial instruments were applied to the following items: 31-12-2022 Financial assets Derivatives Financial liabilities Total financial assets/liabilities Non-financial assets/liabilities Total Assets Accounts receivable – non-current (Note 10) 1,130,053,000 - - 1,130,053,000 - 1,130,053,000 Available-for-sale financial assets (Note 12) 12,950 - - 12,950 - 12,950 Accounts receivable - current (Note 10) 111,915,069 - - 111,915,069 6,477 111,921,546 Derivative financial instruments (Note 21) - 10,946,504 - 10,946,504 - 10,946,504 Cash and cash equivalents (Note 15) 7,633,072 - - 7,633,072 - 7,633,072 Total financial assets 1,249,614,091 10,946,504 - 1,260,560,595 6,477 1,260,567,072 Liabilities Borrowings - non current (Note 17) - - 654,532,339 654,532,339 - 654,532,339 Accrued expenses – non-current (Note 19) - - 454,886 454,886 - 454,886 Borrowings - current (Note 17) - - 345,946,205 345,946,205 - 345,946,205 Accounts payable - current (Note 22) - - 117,677,351 117,677,351 - 117,677,351 Accrued expenses - current (Note 19) - - 3,012,931 3,012,931 - 3,012,931 Derivative financial instruments (Note 21) - - - - - - Total financial liabilities - - 1,121,623,712 1,121,623,712 - 1,121,623,712 31-12-2023 Financial assets Derivatives Financial liabilities Total financial assets/liabilities Non financial assets/liabilities Total Assets Accounts receivable – non-current (Note 10) 98,945,000 - - 98,945,000 - 98,945,000 Available-for-sale financial assets (Note 12) 12,950 - - 12,950 - 12,950 Accounts receivable - current (Note 10) 109,919,641 - - 109,919,641 4,083 109,923,724 Derivative financial instruments (Note 21) - 5,386,308 - 5,386,308 - 5,386,308 Cash and cash equivalents (Note 15) 11,187,505 - - 11,187,505 - 11,187,505 Total financial assets 220,065,096 5,386,308 - 225,451,404 4,083 225,455,487 Liabilities Borrowings - non current (Note 17) - - 949,869,950 949,869,950 - 949,869,950 Accrued expenses – non-current (Note 19) - - 454,886 454,886 - 454,886 Borrowings - current (Note 17) - - 148,107,877 148,107,877 - 148,107,877 Accounts payable - current (Note 22) - - 251,035,796 251,035,796 - 251,035,796 Accrued expenses - current (Note 19) - - 2,421,201 2,421,201 - 2,421,201 Derivative financial instruments (Note 21) - 1,035,978 - 1,035,978 - 1,035,978 Total financial liabilities - 1,035,978 1,351,889,710 1,352,925,688 - 1,352,925,688 Considering its nature, the balances of the amounts to be paid and received to/from state and other public entities were considered outside the scope of IFRS 7. Also, the captions of “Prepaid expenses” and “Deferred Income” were not included in this note, as the nature of such balances are not included in the scope of IFRS 7. The Board of Directors believes that the fair value of the breakdown of financial instruments recorded at amortized cost or registered at the present value of the payments does not differ significantly from their book value. This decision is based in the contractual terms of each financial instrument. The Company’s activity is subject to a variety of financial risks, such as market risk, liquidity risk and economical and judicial risks, which are described in Note 4. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 314 6. Tangible assets During the years ended on 31 December 2022 and 2023, the movements in acquisition costs and accumulated depreciation in this item were as follows: 31-12-2021 Increases Disposals and write-offs Transfers and others 31-12-2022 Acquisition cost Buildings and other constructions 253,332 - - - 253,332 Basic equipment 227,450 - - - 227,450 Tools and dies 7,965 - - - 7,965 Administrative equipment 2,434,672 6,041 (1,483) - 2,439,230 Other tangible assets 293,590 - - - 293,590 3,217,009 6,041 (1,483) - 3,221,567 Accumulated depreciation and impairment losses Buildings and other constructions 253,332 - - - 253,332 Basic equipment 227,221 95 - (1) 227,315 Tools and dies 7,965 - - - 7,965 Administrative equipment 2,424,774 7,598 (1,483) 1 2,430,890 Other tangible assets 152,048 - - - 152,048 3,065,340 7,693 (1,483) - 3,071,550 151,669 (1,652) - - 150,017 31-12-2022 Increases Disposals and write-offs Transfers and others 31-12-2023 Acquisition cost Buildings and other constructions 253,332 - - - 253,332 Basic equipment 227,450 - - - 227,450 Tools and dies 7,965 - - - 7,965 Administrative equipment 2,439,230 4,883 - - 2,444,113 Other tangible assets 293,590 - - - 293,590 3,221,567 4,883 - - 3,226,450 Accumulated depreciation and impairment losses Buildings and other constructions 253,332 - - - 253,332 Basic equipment 227,315 95 - - 227,410 Tools and dies 7,965 - - - 7,965 Administrative equipment 2,430,890 7,663 - - 2,438,553 Other tangible assets 152,048 - - - 152,048 3,071,550 7,758 - - 3,079,308 150,017 (2,875) - - 147,142 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 315 7. Intangible assets During the years ended on 31 December 2022 and 2023, the movements in acquisition costs and accumulated amortization and impairment losses in this item were as follows: 31-12-2021 Increases Disposals and write-offs 31-12-2022 Acquisition cost Industrial property and other rights 5,538,531 - - 5,538,531 Goodwill 453,888,879 - - 453,888,879 Software 461,345 - - 461,345 459,888,755 - - 459,888,755 Accumulated amortization and impairment losses Industrial property and other rights 5,538,529 - - 5,538,529 Software 461,345 - - 461,345 5,999,874 - - 5,999,874 453,888,881 - - 453,888,881 31-12-2022 Increases Disposals and write-offs 31-12-2023 Acquisition cost Industrial property and other rights 5,538,531 - - 5,538,531 Goodwill 453,888,879 - - 453,888,879 Software 461,345 - - 461,345 459,888,755 - - 459,888,755 Accumulated amortization and impairment losses Industrial property and other rights 5,538,529 - - 5,538,529 Software 461,345 - - 461,345 5,999,874 - - 5,999,874 453,888,881 - - 453,888,881 Goodwill On 31 December 2022 and 2023, the value of goodwill results from the merger occurred on 27 August 2013, by the merger through the incorporation of Optimus SGPS into ZON, by overall transfer of the assets of Optimus SGPS into ZON. Impairment tests on goodwill In 2023 impairment tests were performed based on assessments in accordance with the discounted cash flow method, which corroborate the recoverability of the book value of the Goodwill. The amounts in these assessments are based on the historical performances and forecast growth of the businesses and their markets, incorporated in medium/long term approved plans. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 316 These estimates are based on the following assumptions: Telco segment Audiovisuals segment NOS NOS Audiovisuals Cinemas Discount rate (before taxes) 6.5% 9.1% 9.8% Assessment period 5 years 5 years 5 years EBITDA growth (2023-28) 0.0% -3.8% 3.4% Perpetuity growth rate 2.0% 2.0% 2.0% * EBITDA= Operational result + Depreciations, amortizations and impairment losses + Restructuring Costs + Losses/(gains) with disposal of assets + Other costs/(gains) non-recurrent (CAGR - 5-year average) In the Telco segment, the assumptions used are based on past performance, evolution of the number of customers, expected development of regulated tariffs, current market conditions, and expectations of future development. In the cinema segment, the most affected segment by COVID-19, EBITDA growth is still justified on the prospect of a recovery in activity to levels close to those pre-pandemic. The number of years specified in the impairment tests depends on the degree of maturity of the several businesses and markets and were determined based on the most appropriate criterion for the valuation of each cash-generating unit. Sensitivity analyses were performed to variations in the discount rate and growth rate in the perpetuity of the various reported segments, of 1 percentage point and 0.4 percentage points, respectively. In the telecommunications segment, sensitivity analysis was also performed to variations in the operational indicators RGU (Revenue Generating Unit), ARPU (Average Revenue per User), EBITDA and CAPEX, in perpetuity, of approximately 5%. In the cinema segment, sensitivity analysis was conducted on variations in the projected number of tickets sold, average revenue per ticket, EBITDA and CAPEX, in perpetuity, of approximately 5%. These simulations did not result in the need to reinforce impairment. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 317 8. Rights of use During the years ended on 31 December 2022 and 2023, the movements in this item were as follows: 31-12-2021 Increases Others 31-12-2022 Acquisition cost Buildings 65,785 23,481 - 89,266 Vehicles 946,726 30,169 - 976,895 1,012,511 53,650 - 1,066,161 Accumulated amortization and impairment losses Buildings 53,349 23,198 - 76,547 Vehicles 726,617 88,686 - 815,303 779,966 111,884 - 891,850 232,545 (58,234) - 174,311 31-12-2022 Increases Others 31-12-2023 Acquisition cost Buildings 89,266 - - 89,266 Vehicles 976,895 41,208 - 1,018,103 1,066,161 41,208 - 1,107,369 Accumulated amortization and impairment losses Buildings 76,547 11,741 - 88,288 Vehicles 815,303 101,774 - 917,077 891,850 113,515 - 1,005,365 174,311 (72,307) - 102,004 These assets are amortized according to the duration of the respective agreement. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 318 9. Investments in subsidiaries and associated companies On 31 December 2022 and 2023, this item was as follows: Investments Supplementary capital 2022 Investments Supplementary capital 2023 NOS Comunicações 496,761,600 - 496,761,600 1,496,761,600 - 1,496,761,600 NOS Audio - Sales and Distribution 127,150,000 - 127,150,000 124,711,200 - 124,711,200 NOS Audiovisuais SGPS 25,168,000 35,000,000 60,168,000 55,176,000 35,000,000 90,176,000 Teliz 76,587,000 10,000 76,597,000 50,883,200 50,000 50,933,200 NOS Inovação 31,417,154 - 31,417,154 31,417,154 - 31,417,154 NOS Cinemas 25,876,270 - 25,876,270 25,876,270 - 25,876,270 NOS Property 9,000,000 - 9,000,000 9,000,000 - 9,000,000 NOS Corporate Center 6,050,000 - 6,050,000 6,050,000 - 6,050,000 Mstar 5,518,502 - 5,518,502 5,518,502 - 5,518,502 NOS Wholesale 4,335,000 - 4,335,000 4,335,000 - 4,335,000 Fundo NOS 5G 2,499,000 - 2,499,000 2,499,000 - 2,499,000 NOS Internacional SGPS 2,050,000 - 2,050,000 1,970,800 - 1,970,800 NOS Lusomundo SII 437,895 150,000 587,895 437,895 150,000 587,895 NOS Mediação de Seguros 50,000 - 50,000 50,000 - 50,000 Ten Twenty One - - - 50,000 - 50,000 Upstar 26,528 - 26,528 26,528 - 26,528 CEiiA - - - - - - Sport Tv - - - - - - Lusomundo Moçambique - - - - - - 812,926,949 35,160,000 848,086,949 1,814,763,149 35,200,000 1,849,963,149 During the years ended on 31 December 2022 and 2023, the movement in "Financial Investments" of NOS was as follows: Investments Supplementary capital Total Balance as of 1 January 2022 843,309,449 65,150,000 908,459,449 Increases/(reductions) 4,053,500 (29,990,000) (25,936,500) Impairments (Note 30) (34,436,000) - (34,436,000) Balance as of 31 December 2022 812,926,949 35,160,000 848,086,949 Balance as of 1 January 2023 812,926,949 35,160,000 848,086,949 Increases/(reductions) 1,030,208,000 40,000 1,030,248,000 Impairments (Note 30) (28,371,800) - (28,371,800) Balance as of 31 December 2023 1,814,763,149 35,200,000 1,849,963,149 During the year ended on 31 December 2023, the movements in the caption were as follows: 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 319 i. NOS Comunicações, S.A.: increase of share capital by 1.000 million euros, by contribution in kind, by conversion of supplies (Note 10); ii. NOS Audiovisuais, SGPS: increase of share capital by 30 million euros, by contribution in kind, by conversion of supplies (Note 10); iii. Teliz: reinforcement of impairment by 25.7 million euros and increase of supplementary capital by 40 thousand euros; iv. NOS Audio – Sales and Distribution: reinforcement of impairment by 2.4 million euros; v. CEiiA: subscription of 150 shares for 150 thousand euros and recognition of impairment for the full amount. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 320 Assets, liabilities and shareholder’s equity, income and statutory results of subsidiaries and associated companies on 31 December 2023 are as follows: Company Assets Liabilities Shareholders’ equity Total income Total expenses Net income % Held NOS Comunicações 3,420,060,819 1,598,852,847 1,821,207,972 1,462,013,365 (1,321,073,248) 140,940,117 100% NOS Audio - Sales and Distribution 53,667,148 18,577,690 35,089,458 62,083,111 (51,605,247) 10,477.863 71.45% NOS Audiovisuais SGPS 118,305,210 12,519,026 105,786,184 - (449,500) (449.500) 100% Teliz 35,717 5,555 30,162 242 (36,972) (36,730) 100% NOS Inovação 48,644,784 9,350,029 39,294,755 22,320,459 (15,479,917) 6,840,542 100% NOS Lusomundo Cinemas 76,360,708 57,876,368 18,484,340 70,596,034 (62,919,219) 7,676,815 100% NOS Property 28,906,976 8,357,269 20,549,707 24,140,500 (13,900,591) 10,239,909 100% Mstar 23,347,250 13,355,360 9,991,890 27,591,408 (21,795,124) 5,796,284 29.4% NOS Wholesale 17,067,008 7,048,908 10,018,100 28,927,614 (26,544,997) 2,382,617 100% NOS Corporate Center 46,006,584 37,905,798 8,100,786 29,224,923 (27,886,812) 1,338,111 100% Fundo NOS 5G 8,626,363 15,424 8,610,938 - (469,767) (469,767) 27.5% NOS Internacional SGPS 1,889,815 9,238 1,880,578 - (80,380) (80,380) 100% NOS Lusomundo SII 2,216,055 147,839 2,068,216 - (28,275) (28.275) 100% NOS Seguros 414,585 148,498 266,087 366,377 (155,539) 210,838 100% Ten Twenty One 8,949,098 8,101,670 847,428 8,507,090 (7,709,662) 797,428 100% Upstar 19,796,199 15,671,875 4,124,324 17,467,481 (16,128,922) 1,338,559 30% CEiiA 52,888,931 48,205,601 4,683,330 21,813,786 (24,672,851) (2,859,065) 16% Sport TV 129,337,644 106,140,700 23,196,944 192,205,624 (193,393,179) (1,187,555) 25% Lusomundo Moçambique 75,933 41,369 34,563 23,497 (76,449) (52,952) 90% * The values presented in the table above correspond to the results during the year ended on 31 December 2022. On 2021, Sport TV changed the annual reporting period from December 31 to June 30, therefore, in the accounts presented in the table above, revenue and net income correspond to the figures for the 12-month reporting period of the financial year. In the year ended on 31 December 2023, the assets, liabilities and results of these companies jointly controlled by NOS (through investment in Teliz), are: Company Non- current assets Current assets Non-current liabilities Current liabilities Shareholders’ equity Revenues Net income Finstar 44,143,622 130,496,085 - 98,621,509 76,018,198 205,494,593 12,175,740 ZAP Media 17,305,871 7,957,342 - 14,836,491 10,426,722 34,880,567 1,505,633 Annually or whenever, there are indicators of impairment, the carrying amount of financial investments is compared to its recoverable value. The existence of these indicators is determined when: i) the affiliate’s share capital is lower than the carrying amount; or ii) there are recent transactions with implicit valuations lower than the carrying amount; or iii) the stake is located in hyper inflated countries. Additional disclosures regarding Telco and Audiovisuals segments are made in the consolidated financial statements of NOS SGPS. The extra impairment tests performed to Teliz’s financial investment (which holds several financial investments in Angola) and Mstar (Mozambique), which are valued in Kwanzas and Meticais (local currencies) respectively, considered the conservative business plans, approved by NOS’ Executive Committee, for a period of five years, which considers an average revenue growth rate (in local currencies) for the period of 10.1% (Angola) and 5.0% (Mozambique). The revenue growth rates reflect: (i) the best estimate for growth of the customer base, reflecting prudent expectations about new customers growth and churn rates; and (ii) an annual price growth that represents, for the period of 2024 to 2028, 80% of the inflation rate. The business plans also consider a perpetual growth rate of 9.1% and 5.5% in Angola and Mozambique, respectively, and a perpetual discount rate (“WACC”) of 20.2% (Angola) and 19.4% (Mozambique). The discount rate for the period of 2024 to 2028 varies between a maximum of 32.8% and a minimum of 20.2% (at 2028) for Angola, and a maximum of 20.1% and a minimum of 18.8% (at 2024) for Mozambique, in line with the most prudent inflation rate forecasts (source: International Monetary Fund (IMF)). 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 321 Additionally, it must be considered that the present uncertain economic conditions of these markets, namely in the exchange market, the limits to the transfer of currency, and the legal constraints regarding the investments, especially in Angola, increase the level of variability of the assumptions of the model, which can have a significant impact on the estimates considered, namely related with the inflation rate and its impact on the ability to reflect it on the evolution of prices. The Company prepared sensitivity analyses to the fluctuations of the discount rate (+-1 percentage point) and perpetual growth rate (+-1 percentage point). Additionally, the Company prepared sensitivity analyses to the fluctuations of the inflation rate and to its capacity to reflect the referred fluctuations on prices (simulation of several scenarios, with price repercussions between 40% and 90% of the inflation rate). Additionally, the Company forecast null growth for the customer base in Finstar and Zap Media. Fluctuations of 1 percentage point for each variable were considered. It is Board of Directors’ belief that no additional impairment should be registered. Additionally, given the mentioned seizure of assets, material consequences to the operational management of the companies are not expected, nor to NOS, besides the restrictions on dividend distribution. The Company has several controls in place regarding the financial reporting process of affiliated, jointly controlled and associated companies. The balances and transactions included in the reported financial statements are subjected to financial audits, when legally required. For the remaining companies, where financial audit is not legally required, specific review procedures are performed by the Company. 10. Accounts receivable On 31 December 2022 and 2023, this item was as follows: 2022 2023 Current Non-current Current Non-current Accounts receivable Related parties i) 108,286,338 1,128,403,000 104,405,777 98,395,000 Accrued income - interests i) 2,519,532 - 4,413,220 - Advances to suppliers 6,477 - 4,083 - Others ii) 1,109,199 1,650,000 1,100,644 550,000 111,921,546 1,130,053,000 109,923,724 98,945,000 i. On 31 December 2022 and 2023, the amounts receivable from related parties correspond predominantly to short- term loans, shareholder medium and long-term loans and interest receivable from subsidiaries and associated companies (Note 32). At the end of the year 2023, these short-term loans and supplies, bear interest at the rate of 2.4% and 3.1%, respectively. The variation in the year ended on 31 December 2023 predominantly results from the increase in the share capital of NOS Comunicações and NOS Audiovisuais SGPS by 1.000 million euros and 30 million euros, respectively, by contribution in kind, by conversion of supplies (Note 9). ii. On 31 December 2023, this item corresponds, in most part, to the 1.65 million euros to be received for the disposal of NOS International Carrier Services. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 322 11. Taxes payable and receivable On 31 December 2022 and 2023, these items were composed as follows: 2022 2023 Debit balances Credit balances Debit balances Credit balances Income taxes - 13,692,866 30,738,969 - Personnel income tax witholdings - 100,285 - 156,741 Value-added tax 65,275 - 83,504 - Social Security contributions - 88,799 - 131,558 65,275 13,881,950 30,822,473 288,299 On 31 December 2022 and 2023, the amounts receivable and payable in respect of income tax were as follows: 2022 2023 Current income taxes estimative (45,181,069) (18,146,526) Payments on account 29,575,740 47,110,564 Witholding income taxes 963,967 1,009,415 Income tax receivable 948,496 765,516 Income tax (payable)/receivable (13,692,866) 30,738,969 The current income taxes estimative includes the Company and its subsidiaries’ taxes estimates, included in the Consolidated Tax Group, where NOS SGPS is the parent company. 12. Available-for-sale financial assets On 31 December 2022 and 2023, the item “Available-for-sale financial assets”, in the amount of 12.950 euros, corresponds to equity investments of low value. 13. Taxes NOS and its associated companies are subject to IRC - Corporate Income Tax - at the rate of 21% on taxable amount (taxable profit less eventual tax losses subject to deduction), plus IRC surcharge at the maximum rate of 1.5% on taxable profit, giving an aggregate rate of approximately 22.5%. Additionally, following the introduction of austerity measures approved by Law 66-B/2012 of 31 December, and respective addendum published by Law 114/2017 of 29 December, this rate was raised by 3% and will be applied to the company’s taxable profit between 1.5 million euros and 7.5 million euros, by 5% to the company’s taxable profit which between 7.5 million euros and 35 million euros, and by 9% to the company’s taxable profit above 35 million euros. In the calculation of taxable income, amounts, which are not fiscally allowable, are added to or subtracted from the book results. These differences between accounting income and taxable income may be of a temporary or permanent nature. The Company is taxed in accordance with the Special Regime for Taxation of Corporate Groups, which covers the companies in which it directly or indirectly holds at least 75% of their share capital and which fulfil the requirements of Article 69 of the IRC Code. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 323 The companies covered by the Special Regime for Taxation of Corporate Groups in 2023 are: • NOS SGPS (parent company) • Empracine • Lusomundo Imobiliária • Lusomundo SII • NOS Açores • NOS Audiovisuais • NOS Audiovisuais SGPS • NOS Cinemas • NOS Comunicações SA • NOS Inovação • NOS Internacional SGPS • NOS Audio - Sales and Distribution • NOS Madeira • NOS Mediação de Seguros • NOS Sistemas • NOS Technology • NOS Wholesale • NOS Corporate Center • NOS Property • Per-mar • Sontária • Teliz Under current legislation, tax declarations are subject to review and correction by tax authorities for a period of four years, except when tax losses have occurred or tax benefits have been obtained, whose term, in these cases, matches the deadline to use them. It should be noted that in the event of inspections, appeals, or disputes in progress, these periods might be extended or suspended. The Board of Directors of NOS, based on information from its tax advisers, believes that these and any other revisions and corrections to these tax declarations, as well as other contingencies of a fiscal nature, will not have a significant effect on the financial statements as of 31 December 2023. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 324 A. Deferred taxes NOS has recorded deferred tax relating to temporary differences between the taxable basis and the book amounts of assets and liabilities and tax losses carried (when applicable) forward at the date of the statement of financial position. The movements in deferred tax assets and liabilities for the financial years ended on 31 December 2022 and 2023 were as follows: 31-12-2021 Income Equity 31-12-2022 Deferred tax assets Derivatives (Note 21) 75,064 (33,243) (41,821) - Share plans 437,039 147,202 - 584,241 Other provisions and adjustments 852,662 (586,493) - 266,169 1,364,765 (472,534) (41,821) 850,410 Deferred tax liabilities Tax procedures (1,602,972) 318,051 - (1,284,921) Derivatives (Note 21) (23,627) 25,917 (2,465,253) (2,462,963) (1,626,599) 343,968 (2,465,253) (3,747,884) (261,834) (128,566) (2,507,074) (2,897,474) 31-12-2022 Income Equity 31-12-2023 Deferred tax assets Derivatives (Note 21) - - 233,095 233,095 Share plans 584,241 92,593 - 676,834 Other provisions and adjustments 266,169 533,746 - 799,915 850,410 626,339 233,095 1,709,844 Deferred tax liabilities Tax procedures (1,284,921) (31,652) - (1,316,573) Derivatives (Note 21) (2,462,963) - 1,251,044 (1,211,919) (3,747,884) (31,652) 1,251,044 (2,528,492) (2,897,474) 594,687 1,484,139 (818,648) Deferred tax assets were recognized when it is probable that taxable profits will occur in future that may be used to absorb tax losses or deductible tax differences. This assessment was based on the business plan of the company, which is regularly revised and updated. On 31 December 2022 and 2023, the tax rate used to calculate the deferred tax assets relating to temporary differences was 22.5%. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 325 B. Effective tax rate reconciliation In the years ended on 31 December 2022 and 2023, the reconciliation between the nominal and effective rates of tax was as follows: 2022 2023 Income before taxes 69,607,605 7,446,103 Statutory tax rate 22.50% 22.50% Estimated tax 15,661,711 1,675,373 Permanent differences (12,650,320) (958,463) Tax loss used under RETGS 506,342 369,538 Autonomous taxation 15,209 5,708 Other adjustments (793,541) (20,374) Income taxes 2,739,401 1,071,782 Effective income tax rate 3.9% 14.4% Income tax 2,292,784 1,698,121 Deferred tax 446,617 (626,339) 2,739,401 1,071,782 On 31 December 2022 and 2023, the permanent differences were composed as follows: 2022 2023 Dividends received (Note 30) (90,397,793) (33,063,022) Impairment on Financial Investments (Note 9 and 30) 34,436,000 28,371,800 Others (261,849) 431,388 (56,223,642) (4,259,834) 22.50% 22.50% (12,650,320) (958,463) 14. Prepaid expenses On 31 December 2022 and 2023, this item was composed as follows: 2022 2023 Insurances 90,322 90,364 Employees 3,250 3,571 Other prepaid expenses 24,666 81,265 118,238 175,200 15. Cash and cash equivalents On 31 December 2022 and 2023, this item was composed as follows: 2022 2023 Cash 4,843 4,018 Deposits 7,628,229 11,183,487 7,633,072 11,187,505 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 326 16. Shareholders’ equity 16.1. Share capital On 31 December 2022 and 2023, the share capital of NOS was 855,167,890.80 euros. On 31 December 2023, the share capital is represented by 515,161,380 shares registered book-entry shares, with a nominal value of 1.66 euro each (2022: 1.66 euro each). The main shareholders on 31 December 2022 and 2023 are: 2022 2023 Number of shares % Share capital Number of shares % Share capital Sonaecom, SGPS, S.A. 134,322,268 26.07% 192,527,188 37.37% ZOPT, SGPS, SA 134,322,268 26.07% 134,322,269 26.07% Mubadala Investment Company 25,758,569 5.00% 25,758,569 5.00% Sonae, SGPS, S.A. 55,524,516 10.78% - 0.00% Total 349,927,621 67.93% 352,608,026 68.45% According to paragraphs b) and c) of number 1 of article 20º and article 21º of the Portuguese Securities Code, a qualified shareholding of 26.07% of the share capital and voting rights of the Company, as calculated in the terms of article 20º of the Portuguese Securities Code, is attributable to the following companies: • To Sonaecom and, consequently, to all entities in a control relationship with Sonaecom, SGPS, S.A., namely Sontel, BV and Sonae, SGPS, S.A., directly or indirectly controlled by Efanor Investimentos, SGPS, S.A., also as a result of the mentioned control relationship (as per announcements made to the CMVM by Sonae and Sonaecom on 21 July 2023). As of 29 November 2017, Efanor Investimentos, SGPS, S.A. ceased to be a controlling shareholder under the terms and for the purposes of articles 20º and 21º of the Portuguese Securities Code. • To ZOPT and, consequently, to the Kento Holding Limited and Unitel International Holdings, BV companies, as well as to Mrs. Isabel dos Santos, being (i) Kento Holding Limited and Unitel International Holdings, BV companies directly and indirectly controlled by Mrs. Isabel dos Santos and (ii) ZOPT a company controlled by its shareholders Kento Holding Limited and Unitel International Holdings, BV. Note: The calculation of the voting rights percentages does not consider own shares held by the Company. 16.2. Capital issued premium On 27 August 2013, and following the completion of the merger between ZON and Optimus SGPS, the Company's share capital was increased by 856,404,278 euros, corresponding to the total number of issued shares (206,064,552), based on the closing market price of 27 August 2013. The capital increase is detailed as follows: i. share capital for an amount of 2,060,646 euros; ii. premium for issue of shares for an amount of 854,343,632 euros. Additionally, the premium for issue of shares was deducted for an amount of 125 thousand euros related to costs with the respective capital increase. The capital issued premium is subject to the same rules as for legal reserves and can only be used: i. to cover part of the losses on the balance of the year that cannot be covered by other reserves; ii. to cover part of the losses carried forward from the previous year that cannot be covered by the net income of the year or by other reserves; iii. to increase the share capital. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 327 On 21 April 2022, was approved in the Annual General Meeting of shareholders of NOS SGPS, an increase of share capital, by incorporation of share premium, in the amount of 850,016,277.00, through the increase of the nominal value of the total shares representing the share capital in the amount of 1.65€. The nominal value of each share is now 1.66€. As of 31 December 2023, the amount of share issue premium is 4,202,356 euros (2022: 4,202,356 euros). 16.3. Own shares Company law regarding own shares requires the establishment of a non-distributable reserve of an amount equal to the purchase price of such shares, which becomes frozen until the shares are disposed of or distributed. In addition, the applicable accounting rules determine that gains or losses on the disposal of own shares are stated in reserves. On 31 December 2023, there were 3,736,403 own shares, representing 0.7253% of the share capital (31 December 2022: 4,008,391 own shares, representing 0.7781% of the share capital). Movements in the years ended on 31 December 2022 and 2023 were as follows: Quantity Value Balance as of 1 January 2022 3,002,427 12,353,087 Acquisition of own shares 1,868,129 7,087,403 Distribution of own shares - share plan (Note 34) (791,257) (3,186,762) Distribution of own shares - other remunerations (70,908) (286,199) Balance as of 31 December 2022 4,008,391 15,967,529 Balance as of 1 January 2023 4,008,391 15,967,529 Acquisition of own shares 1,234,638 5,171,275 Distribution of own shares - share plan (Note 34) (1,479,000) (5,969,560) Distribution of own shares - other remunerations (27,626) (110,254) Balance as of 31 December 2023 3,736,403 15,058,990 16.4. Reserves Legal reserve Portuguese commercial legislation requires that at least 5% of the Company’s annual net profit must be used to build up the legal reserve until it corresponds to 20% of the share capital. This reserve cannot be distributed except in the event of liquidation of the company, but it may be used to absorb losses after all other reserves have been exhausted, or for incorporation in the share capital. Other reserves On 31 December 2023, NOS had reserves which, by their nature, are considered distributable for an amount of approximately 176.4 million euros, not including net income. 16.5. Dividends The General Meeting of Shareholders held on 21 April 2022 approved a proposal by the Board of Directors for payment of an ordinary dividend per share of 0.278 euros, totaling 143,215 thousand euros. The dividend that is attributable to own shares totaling 858 thousand euros. The dividends were paid on 9 May 2022. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 328 2022 Dividends 143,214,864 Dividends of own shares (857,742) Dividends paid 142,357,122 The General Meeting of Shareholders held on 5 April 2023 approved a proposal by the Board of Directors for payment of an ordinary dividend per share of 0.278 euros and an extraordinary dividend per share of 0.152 euros, totaling 221,519 thousand euros. The dividend that is attributable to own shares totaling 1,532 thousand euros. The dividends were paid on 21 April 2023. 2023 Dividends 221,519,404 Dividends of own shares (1,532,580) Dividends paid 219,986,824 16.6. Net earnings per share Earnings per share for the years ended on 31 December 2022 and 2023 were calculated as follows: 2022 2023 Earnings per share Net income/(loss) for the year 66,868,204 6,374,321 Number of ordinary shares outstanding during the year (weighted average) 511,538,616 511,392,858 Basic earnings per share - euros 0.13 0.01 Diluted earnings per share - euros 0.13 0.01 During the year ended on 31 December 2022 and 2023, there were no diluting effects on net earnings per share, so the diluted earnings per share are equal to the basic earnings per share. 17. Borrowings On 31 December 2022 and 2023, the detail of borrowings is as follows: 31-12-2022 31-12-2023 Current Non-current Current Non-current Loans – nominal value 343,000,000 655,000,000 142,635,601 951,000,000 Debenture loans 300,000,000 290,000,000 75,000,000 350,000,000 Commercial paper 43,000,000 365,000,000 67,600,000 601,000,000 Bank overdrafts - - 35,601 - Loans – accruals and deferrals 2,838,338 (540,238) 5,421,867 (1,183,238) Loans – amortized cost 345,838,338 654,459,762 148,057,468 949,816,762 Leases 107,867 72,577 50,409 53,188 345,946,205 654,532,339 148,107,877 949,869,950 During the year ended on 31 December 2023, the average cost of debt of the used credit lines was approximately 3.4% (1.2% in 2022). 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 329 During the year ended on 31 December 2023, the average cost of debt (used and non-used credit lines) was approximately 3.5% (1.3% in 2022). On 31 December 2023, there is no default in terms of capital, interest, conditions for remission on loans payable or other commitments. 17.1. Debenture loans On 31 December 2023, the Company has a total amount of 425 million euros of bonds issued: • A bond loan in the amount 50 million euros placed by Caixa Geral de Depósitos in July 2019 and maturing in July 2024. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount 25 million euros placed by Medio Banca in July 2019 and maturing in July 2024. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount of 15 million euros placed by BPI in July 2021 and maturing in July 2026.The loan bears interest at a variable rate, indexed to the Euribor and paid quarterly. • A bond loan in the amount of 75 million euros placed by Caixa Geral de Depósitos in March 2022 and maturing in March 2027. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount of 75 million euros placed by BPI in July 2022 and maturing in March 2027. The loan bears interest at variable rates, indexed to Euribor and paid quarterly. • A bond loan in the amount of 50 million euros placed by BPI in April 2023 and maturing in January 2028. The loan bears interest at variable rates, indexed to Euribor and paid quarterly. • A bond loan in the amount of 75 million euros placed by Caixa Geral de Depósitos in April 2023 and maturing in April 2028. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. • A bond loan in the amount of 60 million euros placed by BPI in December 2023 and maturing in June 2025. The loan bears interest at variable rates, indexed to Euribor and paid semi-annually. On 31 December 2023, an amount of 2.751 million euros, corresponding to interest and commissions, was added to this amount and recorded in the item “Loans - accruals and deferrals”. 17.2. Commercial paper On 31 December 2023, the Company has borrowings of 668.6 million euros in the form of commercial paper, of which 42.6 million euros were issued under securities without underwriting. The total amount contracted, under underwriting securities, is of 925 million euros, corresponding to 17 programs, with 7 banks, 825 million euros of which bear interest at market rates and 100 million euros are issued in fixed rate. Commercial paper programmes with maturities over one-year totaling 825 million euros (of which 668.5 million euros have been used as of 31 December 2023) are classified as non-current, since the Company can renew unilaterally current issues on or before the programmes’ maturity dates and because they are underwritten by the organizer. As such, this amount, although having a current maturity, it was classified as non-current for presentation purposes in the financial position statement. On 31 December 2023 an amount of 1,487 thousand euros, corresponding to interest and commissions, was deducted to this amount, and recorded in the item “Loans - accruals and deferrals”. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 330 The maturities of the loans obtained are as follows: 2022 2023 Less than 1 year Between 1 and 5 years More than 5 years Less than 1 year Between 1 and 5 years More than 5 years Debenture loans 302,950,661 289,467,192 - 78,743,172 349,008,337 - Commercial paper 42,887,677 364,992,570 - 69,278,695 600,808,425 - Bank overdrafts - - - 35,601 - - Leases 107,867 72,577 - 50,409 53,188 - 345,946,205 654,532,339 - 148,107,877 949,869,950 - 18. Provisions During the years ended on 31 December 2022 and 2023, the movements recorded in provisions are as follows: 31-12-2021 Increases Reductions Others 31-12-2022 Litigation and others 3,311 37 - - 3,348 Contingencies - others 246,808 75,237 (133,879) - 188,166 250,119 75,274 (133,879) - 191,514 31-12-2022 Increases Reductions Others 31-12-2023 Litigation and others 3,348 425,646 - 428,994 Contingencies - others 188,166 2,784,685 - (369,900) 2,602,951 191,514 3,210,331 - (369,900) 3,031,945 The movements in provisions’ increases and reductions for the financial years ended on 31 December 2022 and 2023 were as follows: 2022 2023 Restructuring costs (Note 27) - 2,784,685 Provisions and adjustments (42,299) 313,204 Interest on arrears (Note 29) 25,525 99,147 Interests and others (41,831) 13,295 Increases and reductions (58,605) 3,210,331 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 331 19. Accrued expenses On 31 December 2022 and 2023, this item was as follow: 2022 2023 Current Non-current Current Non-current Wages and salaries 2,124,100 - 2,092,645 - Supplies and external services 888,831 - 328,556 - Others - 454,886 - 454,886 3,012,931 454,886 2,421,201 454,886 20. Deferred income On 31 December 2022 and 2023, this item was as follows: 2022 2023 Current Non-current Current Non-current Investment grant 346,011 2,824,046 - - Others 113,555 - 18,573 - 459,566 2,824,046 18,573 - During the year ended on 31 December 2023, the deferred income related to the implicit subsidy calculated with the obtaining of financing, in the meantime fully settled, with the EIB, at interest rates below market value, was paid to the subsidiaries that carried out the respective investments. 21. Derivative financial instruments Interest rate swaps On 31 December 2023, NOS had contracted three interest rate swaps totaling of 180 million euros (31 December 2022: 180 million euros) and nine zero cost collars totaling of 377.5 million euros, contracted in 2023. 2022 Notional Assets Liabilities Current Non- current Current Non- current Derivatives Interest rate swaps 180,000,000 - 10,946,504 - - 180,000,000 - 10,946,504 - - 2023 Notional Assets Liabilities Current Non- current Current Non- current Derivatives Interest rate swaps 557,500,000 - 5,386,308 - 1,035,978 557,500,000 - 5,386,308 - 1,035,978 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 332 Movements during the year ended on 31 December 2022 and 2023 were as follows: 31-12-2021 Income Equity 31-12-2022 Fair value of interest rate swaps (10,175) - 10,956,679 10,946,504 Equity Swaps (218,426) 32,554 185,872 - Derivatives (228,601) 32,554 11,142,551 10,946,504 Deferred tax assets (Note 13) 75,064 (33,243) (41,821) - Deferred tax liabilities (Note 13) (23,627) 25,917 (2,465,253) (2,462,963) Deferred tax 51,437 (7,326) (2,507,074) (2,462,963) (177,164) 25,228 8,635,477 8,483,541 31-12-2022 Income Equity 31-12-2023 Fair value of interest rate swaps 10,946,504 - (6,596,174) 4,350,330 Derivatives 10,946,504 - (6,596,174) 4,350,330 Deferred tax assets (Note 13) - - 233,095 233,095 Deferred tax liabilities (Note 13) (2,462,963) - 1,251,044 (1,211,919) Deferred tax (2,462,963) - 1,484,139 (978,824) 8,483,541 - (5,112,035) 3,371,506 22. Accounts payable On 31 December 2022 and 2023, the amounts that are payable correspond predominantly to loans and interests obtained from group companies (Note 32). At the end of 2023, these loans matured at the interest rate of 1.1% (2022: 0.01%). 23. Services rendered On 31 December 2022 and 2023, this caption corresponds to management services provided to NOS group companies (Note 32). 24. Personnel Costs In the years ended on 31 December 2022 and 2023, this item was composed as follows: 2022 2023 Remunerations 6,499,597 6,760,297 Social taxes 834,773 891,668 Social benefits 100,853 153,255 Others 17,142 13,062 7,452,365 7,818,282 The values included in the table above correspond to the values for key management members, 15 in 2023 (16 in 2022). 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 333 25. Supplies and external services On 31 December 2022 and 2023, this item was composed as follows: 2022 2023 Support services 1,376,775 1,594,654 Specialized works 403,485 198,182 Travelling costs 141,223 127,442 Insurances 120,992 125,482 Fuels 40,998 37,293 Cleaning, hygiene and comfort 21,911 20,840 Litigation and notaries 11,824 18,998 Communications 11,850 12,384 Other supplies and external services 64,276 53,710 2,193,334 2,188,985 26. Other operational losses / (gains) On 31 December 2022 and 2023, this item was composed as follows: 2022 2023 Contributions 51,460 51,460 Others 9,316 603 60,776 52,063 27. Restructuring costs On 31 December 2022 and 2023, this item was composed as follows: 2022 2023 Indemnities - 2,784,685 - 2,784,685 28. Other losses / (gains) non-recurring This caption in the years ended on 31 December 2022 and 2023 is as follows: 2022 2023 Donations 15,000 15,000 Others 172,570 (37,488) 187,570 (22,488) 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 334 29. Financial costs / (revenues) and other financial expenses / (income) During the years ended on 31 December 2022 and 2023, financial costs/(revenues) and other financial expenses/(income), were as follows: 2022 2023 Financial costs / (revenues): Interest expenses Debenture loans 6,510,775 16,568,551 Commercial paper 4,575,502 22,697,257 Bank loans 322,796 73,343 Derivatives 59,778 50,213 Related parties (Note 32) 10,983 1,349,024 Leases 2,164 2,856 Interest on arrears (Note 18) 25,525 99,147 Others 1 2,090 11,507,524 40,842,481 Interest earned Related parties (Note 32) (22,009,183) (35,356,379) Derivatives - (3,098,815) Others (696,895) (125,585) (22,706,078) (38,580,779) (11,198,554) 2,261,702 Net other financial expenses / (income): Comissions on commercial paper 1,836,627 2,315,103 Comissions on debenture loans 1,073,279 689,892 Bank services 122,107 63,729 Others 15,459 12,394 3,047,472 3,081,118 30. Losses / (gains) of affiliated companies During the years ended on 31 December 2022 and 2023, this caption was as follows: 2022 2023 Dividends NOS Property (9,821,722) (9,042,053) NOS Audio - Sales and Distribution (6,883,909) (8,610,158) NOS Cinemas (3,718,190) (7,035,509) NOS Inovação (4,665,643) (3,928,599) NOS Wholesale (1,998,084) (1,817,243) NOS Corporate Center (1,440,332) (1,757,138) Mstar - (777,551) NOS Mediação de Seguros - (94,771) NOS Comunicações (58,193,652) - NOS Audiovisuais SGPS (3,664,416) - NOS Internacional SGPS (11,845) - (90,397,793) (33,063,022) Others Losses/(loss reversals) for impairment on financial investments (Note 9) 34,436,000 28,371,800 Others (7,362) - 34,428,638 28,371,800 (55,969,155) (4,691,222) 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 335 31. Guarantees and financial undertakings 31.1. Guarantees On 31 December 2022 and 2023, the Company had furnished guarantees in favour of third parties corresponding to the following situations: 2022 2023 Guarantees in favour of: Tax authorities 28,233,567 30,256,612 Others 2,955 1,172 28,236,522 30,257,784 On 31 December 2022 and 2023, this amount relates to the guarantees required by the tax authorities in connection with tax proceedings contested by the Company and its subsidiaries. Other guarantees During the first quarter of 2015, 2016, 2017 and 2018, and following the settlement notes of CLSU 2007-2009, 2010- 2011, 2012-2013 and 2014, respectively, NOS constituted guarantees in favour of the Universal Service Compensation Fund in the amount of 23.6, 16.7, 17.5 and 3 million euros, respectively, in order to prevent the establishment of tax enforcement proceedings in order to enforce recovery of the paid amount. In addition to the guarantees required by the Tax Authorities were set up sureties for the current fiscal processes. NOS consisted of NOS SA surety for an amount of 14.1 million euros. 31.2. Other undertakings Covenants Of the loans obtained (excluding financial leases), in addition to being subject to the Company complying with its operating, legal and fiscal obligations, 100% are subject to cross default and pari passu clauses, 96% to negative pledge clauses and 71% to ownership clauses. In addition, approximately 19% of the total loans obtained require that the net financial debt does not exceed 3 times EBITDA, after the payment of consolidated leasings, about 4% of the total loans obtained require that the net financial debt does not exceed 3.5 times EBITDA after the payment of consolidated leasings, about 15% require that the net financial debt does not exceed to 4 times EBITDA after the payment of consolidated leasings, about 6% require that the net financial debt does not exceed to 4.5 times EBITDA after the payment of consolidated leasings and about 7% require that the net financial debt does not exceed to 5 times EBITDA after the payment of consolidated leasings. Net Financial Debt = Loans – Leasings – Cash and Cash Equivalents EBITDA = Operational result + Depreciations, amortizations and impairment losses + Restructuring Costs + Losses/(gains) with disposal of assets + Other costs/(gains) non-recurrent. EBITDA after the payment of leasings = EBITDA – Leasings Payment (Capital and Interest) Assignment agreements football broadcast rights In December 2015, NOS signed a contract with Sport Lisboa e Benfica - Futebol SAD and Benfica TV, SA of television rights of home matches of football NOS’ league, broadcasting rights and distribution of Benfica TV Channel. The contract began in 2016/2017 sports season, had an initial duration of three years, and might be renewed by decision of either party up to a total of 10 sports seasons, with the overall financial consideration reaching the amount of 400 million euros, divided into progressive annual amounts. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 336 Also in December 2015, NOS signed a contract with Sporting Clube de Portugal - Futebol SAD and Sporting and Communication Platforms, S.A. for the assignment of the following rights: 1) TV broadcasting rights and multimedia home games of Sporting SAD; 2) The right to explore the static and virtual advertising at Stadium José Alvalade; 3) The right of transmission and distribution of Sporting TV Channel; and, 4) The right to be its main sponsor. The contract will last 10 seasons, concerning the rights indicated in 1) and 2) above, starting in July 2018, 12 seasons in the case of the rights stated in 3) starting in July 2017 and 12 and a half seasons in the case of the rights mentioned in 4) beginning in January 2016, with the overall financial consideration amounting to 446 million euros, divided into progressive annual amounts. Also in December 2015, NOS SA has signed contracts regarding the television rights of home senior team football games with the following sports clubs: 1) Associação Académica de Coimbra – Organismo Autónomo de Futebol, SDUQ, Lda 2) Os Belenenses Sociedade Desportiva Futebol, SAD 3) Clube Desportivo Nacional Futebol, SAD 4) Futebol Clube de Arouca – Futebol, SDUQ, Lda 5) Futebol Clube de Paços de Ferreira, SDUQ, Lda 6) Marítimo da Madeira Futebol, SAD 7) Sporting Clube de Braga – Futebol, SAD 8) Vitória Futebol Clube, SAD The contracts began in the 2019/2020 sports season and last up to 7 seasons, apart from the contract with Sporting Clube de Braga - Futebol, SAD which lasts 9 seasons. In May 2016, NOS and Vodafone have agreed on reciprocal availability, for several sports seasons, of sports content (national and international) owned by the companies, in order to assure to both companies, directly by the assigning party or indirectly through the transfer to third party content distribution channels or models, the availability of broadcasting rights of the sports clubs home football games, as well as the broadcasting and distribution rights of sports and sports clubs channels, whose rights are owned by each of the companies in each moment. The agreement came into force from the beginning of the sports season 16/17, assuring access to Benfica’s channel and Benfica’s home football games to NOS’ and Vodafone’s clients, independent from the channel where these football games are broadcast. Considering that the contract signed allowed for the possibility of extending the agreement to the other operators, in July 2016 MEO and Cabovisão joined the agreement, ending the lack of availability of Porto Canal in the NOS’s channel grid, assuring that every Pay TV client can have access to every relevant sports content, regardless of which operator they use. Following the agreement signed with the remaining operators, which is being made directly in some cases and through channel yield to third parties in others, as a counterpart of the reciprocal provision of rights, the global costs are shared according with retailer telecommunications revenues and Pay TV market shares. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 337 Considering that, following the celebrated agreements with the remaining operators, the risks and benefits associated to contracts with teams are shared amongst the operators, the agreement was considered a collaborative agreement. For this reason, the revenue (with operators) is compensated with the expenses with teams. Additional disclosures are made in consolidated financial statements of NOS SGPS. 32. Related parties The balances on 31 December 2022 and 2023 and the transactions on 31 December 2022 and 2023 with companies of NOS Group were as follows: Balances with related parties – 2022 Accounts receivable Accounts payable Loans Borrowings Subsidiaries 45,340,098 1,228,217 1,128,403,000 102,221,654 NOS Lusomundo Cinemas 1,329,274 - - 14,165,082 Lusomundo SII 15,436 - - - MSTAR, S.A. 466,944 - - - NOS Audiovisuais SGPS 1,535,548 - 41,893,000 30 NOS Corporate Center 491,513 413,890 - 4,297,763 NOS Inovação 256,385 - - 8,929,230 NOS Property 3,379,328 - - 25,206,721 NOS Seguros 28,775 - - 131,199 NOS Wholesale 589,007 239 - 10,400,829 NOS Comunicações 32,573,600 357,182 1,086,510,000 - NOS Internacional SGPS, S.A. (35,014) - - 115,406 Teliz Holding, S.A. (4,014) 3 - 80,737 NOS Audio - Sales and Distribution, S.A. 4,712,713 454,886 - 38,894,658 Other subsidiaries 602 2,017 - - Other related parties 66,387,868 363,468 - 8,040,334 NOS Technology 46,722,227 363,086 - 202 Empracine-E.Pro.Act. Cinem, Lda 120,079 - - - Banco Bic Português, S.A. - - - 18,493 Lusomundo Imobiliária 2, S.A. (16,617) - - 180,111 NOS Sistemas 3,279,292 - - - NOS SISTEMAS ESPAÑA, S.L. 14,451 - - - Per-Mar - Sociedade de Construções, S.A. 1,844 - - 2,588,323 Sontária 11,608 - - 2,092,046 NOS Açores Comunicações 7,668,847 - - - NOS Lusomundo Audiovisuais, S.A. 9,158,296 46 NOS Madeira Comunicações (576,385) - - 3,161,114 Other related parties 4,225 382 - - 111,727,966 1,591,685 1,128,403,000 110,261,989 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 338 Transactions with related parties – 2022 Services rendered Supplies and external services Interest gains Interest losses Subsidiaries 10,173,070 1,399,921 21,634,172 9,343 NOS Lusomundo Cinemas 346,189 3,317 - 1,186 NOS Audiovisuais SGPS - - 873,192 449 NOS Corporate Center 257,416 1,396,218 - 384 NOS Inovação 266,081 (35) - 1,258 NOS Property 408,714 (2,867) - 1,927 NOS Wholesale 49,991 - - 972 NOS Comunicações 8,530,167 3,664 20,760,249 - NOS Audio - Sales and Distribution, S.A. 311,376 (263) - 3,140 Other subsidiaries 3,137 (114) 730 27 Other related parties 3,931,017 3,552 564,617 1,640 NOS Technology 2,992,312 3,847 450,483 202 NOS Lusomundo Audiovisuais, S.A. 635,735 (70) 9,243 781 NOS Sistemas 132,897 (26) 26,874 - Sontária 12,588 - - 142 NOS Acores Comunicações 40,098 - 73,262 - NOS Madeira Comunicações 109,603 - 4,354 453 Other related parties 7,785 (200) 401 61 14,104,088 1,403,473 22,198,788 10,983 Balances with related parties – 2023 Accounts receivable Accounts payable Loans Borrowings Subsidiaries 27,219,840 1,758,589 98,395,000 238,888,786 NOS Lusomundo Cinemas 2,201,957 736,641 - 16,414,063 Lusomundo SII 44,426 - - 52 NOS Audiovisuais SGPS (602,372) - 11,885,000 1,168,045 NOS Corporate Center 330,584 566,936 - 5,356,257 NOS Inovação (976,014) - - 9,588,441 NOS Property 3,679,669 - - 21,179,918 NOS Seguros 61,788 - - 48,042 NOS Wholesale 764,989 - - 11,917,457 NOS Comunicações 14,609,232 126 86,510,000 137,573,547 NOS Internacional SGPS, S.A. (33,029) - - 132,196 Teliz Holding, S.A. (9,461) - - 20,954 NOS Audio - Sales and Distribution, S.A. 3,996,730 454,886 - 35,489,815 Ten Twenty One, S.A. 3,153,357 - - - Other subsidiaries (2,017) - - - Other related parties 81,280,047 313,191 - 11,408,483 NOS Technology 66,999,295 1,493 - - Empracine-E.Pro.Act. Cinem, Lda 52,210 - - - Banco Bic Português, S.A. - - - 18,493 Lusomundo Imobiliária 2, S.A. (16,361) - - 161,958 NOS Sistemas 4,394,190 - - - NOS SISTEMAS ESPAÑA, S.L. 14,014 - - - Per-Mar - Sociedade de Construções, S.A. 31,277 - - 121,706 Sontária 69,493 - - 823,926 NOS Açores Comunicações 7,863,287 - - - NOS Lusomundo Audiovisuais, S.A. 1,655,253 311,381 - 4,032,896 NOS Madeira Comunicações 213,283 - - 6,249,505 Other related parties 4,106 317 - - 108,499,887 2,071,779 98,395,000 250,297,269 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 339 Transactions with related parties – 2023 Services rendered Supplies and external services Interest gains Interest losses Subsidiaries 12,503,666 1,386,400 34,833,845 1,256,210 NOS Lusomundo Cinemas 578,221 319 - 163,469 NOS Audiovisuais SGPS - - 1,322,301 (30) NOS Corporate Center 223,837 1,442,963 - 69,114 NOS Inovação 437,869 (36) - 108,852 NOS Property 183,257 (2,808) - 192,036 NOS Wholesale 74,737 (2,250) - 114,086 NOS Comunicações 10,555,948 5,553 33,474,523 255,319 NOS Audio - Sales and Distribution, S.A. 410,460 (274) - 350,563 Teliz Holding, S.A. 6,272 (57,389) 222 148 Ten Twenty One, S.A. 27,001 (193) 36,666 - Other subsidiaries 6,065 513 132 2,653 Other related parties 5,801,420 (3,398) 684,029 91,807 NOS Technology 4,721,941 4,685 335,790 (202) NOS Lusomundo Audiovisuais, S.A. 687,126 (71) 44,517 12,919 NOS Sistemas 131,596 (45) 108,109 - Per-Mar - Sociedade de Construções, S.A. 8,255 - - 18,805 Sontária 14,715 - - 9,007 NOS Acores Comunicações 31,992 - 188,061 - NOS Madeira Comunicações 205,546 - 3,183 51,278 Other related parties 249 (7,968) 4,371 - 18,305,086 1,383,002 35,517,875 1,348,018 The Company regularly performs transactions and signs contracts with several parties within the NOS Group. Such transactions were performed on normal market terms for similar transactions, as part of the contracting companies' current activity. Due to the large number of low value related parties’ balances and transactions, it was grouped in the heading "Other related parties" the balances and transactions with entities whose amounts are less than 100 thousand euros. 33. Remuneration of key management members Remuneration paid to managers and other key members of NOS Management (Managers) for the financial years ended on 31 December 2022 and 2023 were as follows: 12M22 12M23 Compensation 3,392,865 3,614,318 Profit sharing 1,289,558 1,467,048 Share plans assigned 1,289,558 1,467,048 5,971,981 6,548,414 The average number of key management members in 2023 is 15 (16 in 2022). The Corporate Governance Report includes more detailed information about NOS' remuneration policy. The Company considers as Managers the members of the Board of Directors. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 340 34. Share incentive schemes On 23 April 2014, in the General Shareholders Meeting, the Regulation on Short and Medium-Term Variable Remuneration was approved, which establishes the terms of the Share Incentive Schemes ("NOS Plan"). This plan is aimed at more senior employees with the vesting taking place three years after being awarded, assuming that the employees are still with the company during that period. As of 31 December 2023, the unvested plans are: Number of shares NOS Plan Plan 2021 1,426,069 Plan 2022 1,164,196 Plan 2023 1,038,600 During the year ended on 31 December 2023, the movements that occurred in the plans are detailed as follows: Plan 2020 Plan 2021 Plan 2022 Plan 2023 Total Balance as of 31 December 2022 1,459,370 1,320,809 1,079,152 - 3,859,331 Movements in the period Awarded - - - 1,040,472 1,040,472 Vested (1,458,712) (11,380) (8,908) - (1,479,000) Cancelled / Elapsed / Corrected (1) (658) 116,640 93,952 (1,872) 208,062 Balance as of 31 December 2023 - 1,426,069 1,164,196 1,038,600 3,628,865 (1) Refers mainly to correction made for dividends paid, exit of employees not entitled to the vesting of shares and other adjustments resulting from the way the shares are vested. The share plans costs are recognized over the year between the awarding and vesting date of those shares. The responsibility is calculated taking into consideration the share price at award date of each plan, for plans settled in shares, or at the closing date, for plans settled in cash. The responsibility is recorded in Reserves. As of 31 December 2023, the outstanding responsibility related to these plans is 7,099 thousand euros and is totally recorded in Reserves. The costs recognized in previous years and in the financial year, and its liabilities, are as follows: Total Costs recognized in previous years related to plans as of 31 December 2022 6,674,984 Costs of plans vested in the period (4,670,098) Costs incured in the period and others 5,094,232 Total plans costs 7,099,118 * Includes the recognized costs of the Company and its subsidiaries Additionally, during the year ended on 31 December 2023, NOS SGPS’ Board of Directors approved a debit to its subsidiaries relating to share plans in the amount of 985 thousand euros. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 341 35. Legally required disclosures Information concerning fees and services rendered by auditors is described on note 47 of the Corporate Governance Report. 36. Other matters 36.1. Preventive seizure of 26.075% of the share capital of NOS, SGPS, S.A. In 4 April 2020, SONAECOM, SGPS, SA, holder of 50% of the capital of ZOPT, SGPS, SA (hereinafter “ZOPT”), was informed by this company of the communication received from the Central Criminal Investigation Court of Lisbon (hereinafter Tribunal) to proceed to the preventive seizure of 26.075% of the share capital of NOS, SGPS, SA, corresponding to half of the shareholding in NOS held by ZOPT and, indirectly, by the companies Unitel International Holdings, BV and Kento Holding Limited ”, controlled by Eng.ª Isabel dos Santos. Under the terms of the aforementioned decision, the foreclosed shares are deprived of the exercise of voting rights and the right to receive dividends, the latter of which must be deposited with Caixa Geral de Depósitos, S.A. at the court's discretion. The other half of ZOPT's participation in NOS share capital, corresponding to an identical percentage of 26.075% - and which, at least in line with the criterion used by the Court, embodies the 50% held in ZOPT by SONAECOM - was not subject to seizure, nor the rights attached to it were subject to any limitation. On 12 June 2020, ZOPT was authorized by the Lisbon Central Criminal Investigation Court to exercise the voting right corresponding to the 26.075% of NOS share capital preventively seized under the aforementioned Court order. Following the communication of 4 April 2020, ZOPT filed third-party claims, which, in June 2020, were rejected by the investigating judge on the grounds that the Portuguese courts had no jurisdiction to hear and decide them, a decision that, having been appealed by ZOPT, was revoked by the Lisbon Court of Appeal, in February 2021. In November 2021, the Investigating Judge, aware of the cause’s merit, dismissed the third-party embargoes presented by ZOPT, a decision that, according to ZOPT, was appealed to the Court of Appeal. After being admitted in February 2022, in June 2022, ZOPT was notified of the decision dismissing the appeal. Further developments are awaited. The Board of Directors of NOS is not aware of any developments in this process. In September 2022, Sonaecom informed that in a meeting of the General Meeting of ZOPT it was decided to proceed with the amortization of Sonaecom's stake in that company and the refund of the additional payments made by Sonaecom, for a consideration that includes the delivery of shares representing 26.075% of the capital of NOS. As a result of this repayment, which was subject to the applicable legal procedures, Sonaecom is no longer a shareholder of ZOPT, which is now wholly owned by Unitel International Holdings, BV and Kento Holding Limited, companies controlled by Isabel do Santos. In December 2022, Sonaecom, upon completion of the legal procedures, informed that it now directly holds 134,322,268 ordinary shares of NOS, corresponding to 26.07% of its share capital. Additionally, also informed that such participation is also attributable to the entities with which it is in a control relationship, namely, SONTEL, BV, Sonae Investments, BV, SONAE, SGPS, S.A. and EFANOR INVESTIMENTOS, SGPS, S.A. The Board of Directors of NOS is not aware of any developments in the above-mentioned preventive seizure process. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 342 37. Subsequent events Financing In January 2024, NOS contracted 100 million euros in bond loans and commercial paper programmes, indexed to sustainability objectives, maturing in 2026, with Caixa Geral de Depósitos. Up to the date of approval of this document, there were no other subsequent relevant events that should be disclosed in this report. 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 343 Report and opinion of the Statutory Auditor 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 344 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 345 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 346 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 347 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 348 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 349 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 350 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 351 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 352 Statement Under the Terms of Article 29, Paragraph 1, Sub Paragraph C) of the Portuguese Securities Code In accordance with Article 29, paragraph 1, c) of the Portuguese Securities Code, the Board of Directors of NOS, SGPS, S.A., whose names and roles are listed below, declare that, to their knowledge: a) The management report, the annual individual and consolidated accounts, the legal certification of accounts, and other accounting documents required by law or regulation, relative to the year ended on 31 December 2023, were elaborated in compliance with the applicable accounting standards, accurately and truthfully portraying the assets and liabilities, the company’s financial situation and results, as well as those of the companies included in its consolidation perimeter; b) The management report faithfully portrays the evolution of the company’s business, performance and position, as well as those of the companies included in its consolidation perimeter and, when applicable, contains a description of the main risks and uncertainties they face. Lisbon, 5 of March 2024 The Board of Directors Ângelo Paupério Chairman of the Board of Directors Miguel Almeida Chief Executive Office José Koch Ferreira CFO – Executive Member of the Board of Directors Luís Nascimento Executive Member of the Board of Directors Jorge Graça Executive Member of the Board of Directors Manuel Ramalho Eanes Executive Member of the Board of Directors Filipa Santos Carvalho Executive Member of the Board of Directors Daniel Beato Executive Member of the Board of Directors Ana Rita Rodrigues Member of the Board of Directors António Lobo Xavier Member of the Board of Directors Catarina Tavira Van-Dúnem Member of the Board of Directors Cláudia Azevedo Member of the Board of Directors Cristina Marques Member of the Board of Directors João Torres Dolores Member of the Board of Directors Eduardo Verde Pinho Member of the Board of Directors 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 353 Report and Opinion of the Statutory Independent Audit Board Shareholders, According to the articles of association, the supervision of the Company is committed to a Statutory Independent Audit Board, comprised of three full members and one alternate member, elected by the General Meeting, as well as to an External Statutory Auditor or Firm of Chartered Accountants. In these circumstances, as set forth in paragraph 1, sub-paragraph g), of Article 420 of the Portuguese Companies Code, we hereby submit our Report on our supervision activity and our Opinion on the Individual and Consolidated Annual Report and Accounts of NOS, SGPS, S.A. (“Company”) for the financial year ended on 31 December 2023. The Statutory Independent Audit Board has regularly accompanied the evolution of the activities of the Company and of its main subsidiaries, monitoring the compliance with the law and with the articles of association, supervising the Company’s management, the effectiveness of its risk management systems, internal control and internal auditing and the preparation and disclosure of individual and consolidated financial information. Moreover, the Statutory Independent Audit Board verified the regularity of the accounting records, the accuracy of the individual and consolidated financial statements and the accounting policies and valuation criteria adopted by the Company in order to ensure that they lead to a correct appraisal of its assets and individual and consolidated results, as well as its cash flow statement. As part of its duties, the Statutory Independent Audit Board met with the Statutory Auditor / External Auditor in order to monitor their audits and learn their conclusions, supervising the works performed by it as well as its independence and competence. The Statutory Independent Audit Board also met on a regularly basis with the heads of the Internal Audit Department and Legal Department, and with the Board Member responsible for the financial area and its team whenever was deemed fit and appropriate. The Statutory Audit Board received full cooperation from all at all times. The Statutory Audit Board monitored the whistleblowing system (reception and treatment). This system is available to all shareholders, employees and to the general public. All the complaints received were duly analysed. As for the Corporate Governance Report, it is the duty of the Statutory Independent Audit Board to merely verify that it includes the elements referred to in Article 29H of the Portuguese Securities Code, which the Statutory Audit Board did. The Statutory Independent Audit Board also received from the External Statutory Auditor a letter confirming its independence in relation to the Company. As such, the Statutory Independent Audit Board issues the following: OPINION The Statutory Independent Audit Board was informed about the conclusions of the work of the examination of the Company’s accounts and external auditing on the Individual and Consolidated Financial Statements for the financial year of 2023, which include the individual and consolidated financial position on 31 December 2023, the individual and consolidated Statements of results by nature, the individual and consolidated Statements of comprehensive income, the individual and consolidated Statement of changes in equity, the individual and consolidated cash flow Statement and its respective Annexes. The Statutory Independent Audit Board scrutinized the Audit Report from the External Auditor on these documents which expressed no reservation. Within its powers, and according to paragraph 1, subparagraph c) of the article 29-G of the Portuguese Securities Code, the Statutory Independent Audit Board declares that, to its knowledge, the Management Report, and the Individual and Consolidated Financial Statements for the financial year ended on 31 December 2023 were drawn up in accordance with the applicable accounting standards, reflecting a true and fair view of the assets and liabilities, 3.1 3.2 Notes to the Individual Financial Statements Integrated Annual Report 2023 01 02 03 04 354 financial position and results of NOS, SGPS, S.A. and the companies included in the consolidation as a whole. Additionally, the Management Report faithfully states the businesses’ evolution, and the performance and position of the Company and of the Group. It also complies with the applicable legal requirements and accounting standards as well as with the articles of association and, whenever deemed necessary, contains a description of the principal risks and uncertainties faced. It is also mentioned that the Non-Financial Statements contain enough information to allow an understanding of the performance, position and impact of the group’s activities, related to the matters of environmental, social and worker issues, gender equality, non-discrimination, respect for human rights, fight against corruption and attempts at bribery. The Statutory Independent Audit Board also ensures that the Company’s Corporate Governance Report, which is announced at the same time as the Management Report, includes the elements referred to in Article 29 -H of the Portuguese Securities Code. In view of the above, taking into account the endeavours undertaken, the opinions and the information received from the Board of Directors, the Company’s areas and the External Auditor, the Statutory Independent Audit Board's opinion is as follow: I. The Management Report for 2023 may be approve; II. The Individual and Consolidated Financial Statements for 2023 may be approved; III. The Proposal for the Application and Distribution of Profits presented by the Board of Directors, namely taking into account Article 32 of the Portuguese Companies Code, may be approved. Lisbon, 5 of March de 2024 The Statutory Independent Audit Board ____ José Pereira Alves ____ Patrícia Teixeira Lopes _____ Paulo Mota Pinto Annual Integrated Report 2023 355 04 Corporate Governance Report 4.1 Part 1 Mandatory information concerning shareholder structure, organisation and corporate governance 4.2 Part 2 Corporate governance assessment 4.3 Part 3 Annex 356 397 405 01 02 03 04 Annual Integrated Report 2023 356 04 Corporate Governance Report 02 03 01 4.1 Part 1 Mandatory information concerning shareholder structure, organisation and corporate governance Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 357 A. Shareholder Structure I. Capital Structure 1. Capital structure NOS share capital is 855,167,890.80 euros and it is fully subscribed and paid up, represented by 515,161,380 ordinary shares (there are no share classes), registered book-entry shares with a nominal value of 1,66 euros per share and are admitted to trading on the Euronext Lisbon - Sociedade Gestora de Mercados Regulamentados, S.A. regulated market. (“Euronext Lisbon”). Share capital distribution of the Company on December 31, 2023 2. Restrictions on the transfer and ownership of shares The Articles of Association do not set out limitations or restrictions on the transfer of shares that represent the share capital of NOS. Notwithstanding, the Articles of Association provide that shareholders who directly or indirectly compete with the activity performed by the companies owned by NOS cannot hold ordinary shares that represent more than 10% of the Company’s share capital, without prior authorisation from the General Meeting. 3. Own shares The General Meeting of 5 April 2023 resolved to authorise the purchase and disposal of own shares by the Board of Directors for the duration of 18 months from the approval of the proposal. At the end of 2023, the number of own shares was as follows: Own Shares ⑴ Share Capital (%) 3,736,403 0.7253 ⑴ All attached rights suspended pursuant to the provision of article 324(1)(a) of the Portuguese Companies Code. 4. Impact of the change in shareholder control in important agreements NOS is not a party to any important agreements that come into force, are amended, or terminate if there is a change of Company control or change in the members of the Board of Directors. In accordance with standard market practice, NOS and its subsidiaries are parties to some financing contracts and debt issues, which include standard provisions allowing for the change of control (including, tacitly, changes in the change of control as a consequence of a public takeover bid), which are deemed necessary for the achievement of the transactions. The only consequence is the possibility of the financing entities or debt holders, as the case may be, requesting early reimbursement, which means there is no possibility of impairing the economic interest in the Company shares’ transfer or the free assessment by the shareholders of the performance of the directors. NOS also did not adopt mechanisms that imply payments or assumption of fees by the Company in the case of transfer of control or change in the composition of the Board of Directors, and which are likely to harm the economic interest in the transferability of shares and the free assessment by the shareholders of the performance of the directors. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 358 5. Countermeasures in case of change of control NOS has not adopted any measures in order to impede the success of public takeover bids contrary to the interests of the Company and its shareholders. Similarly, NOS considers that no countermeasures were adopted with the purpose of automatically causing erosion to the Company’s assets in the event of a transfer of control or of a change to the composition of the Board of Directors or that would potentially impair the economic interest in the shares' transfer and the free assessment by the shareholders of the performance of the directors. 6. Shareholders’ agreements NOS has no knowledge on any shareholders’ agreements involving the Company. II. Shareholdings and bonds held 7. Qualified shareholdings The structure of qualified shareholdings in NOS that the Company was notified of (including information rendered under article 447(5) of the Portuguese Companies Code) was, on 31 December 2023, as follows: (1) Shareholding assigned to Sonaecom and, consequently, to all entities in a control relationship with Sonaecom, SGPS, S.A., namely Sontel, BV and Sonae, SGPS, S.A., directly or indirectly controlled by Efanor Investimentos, SGPS, S.A. As of 29 November 2017, Efanor Investimentos, SGPS, S.A. ceased to be a controlling shareholder under the terms and for the purposes of articles 20 and 21 of the Portuguese Securities Code. (2) Shareholding assigned to ZOPT and, consequently, to the Kento Holding Limited and Unitel International Holdings, BV companies, as well as to Mrs. Isabel dos Santos, being (i) Kento Holding Limited and Unitel International Holdings, BV companies directly and indirectly controlled by Mrs. Isabel dos Santos and (ii) ZOPT a company controlled by its shareholders Kento Holding Limited and Unitel International Holdings, BV. NOTE: The calculation of the voting rights percentages does not consider own shares held by the Company. Company Share Capital (%) Sonaecom, SGPS, S.A. (1) 37.37 ZOPT, SGPS, S.A. (2) 26.07 Mubadala Investment Company PJSC 5.00 Others 31.56 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 359 8. Number of shares and bonds held by members of the management and supervisory bodies NAME POSITION/JOB SHARES BALANCE 31-12-2022 TRANSACTIONS 2023 BALANCE 31-12-2023 Acquisitions Disposals Unit Price Date Board of Directors Ângelo Gabriel Ribeirinho dos Santos Paupério (1) Chairman of the Board of Directors - - - - - - Miguel Nuno Santos Almeida Chairman of the Executive Committee 322 383 150 715 - - 70 000 4,222 € 4,03 € (20 000); 4,05 € (50 000) 31/03/2023 * 28/04/2023 28/04/2023 403 098 José Pedro Faria Pereira da Costa (4) Executive Member 315 405 105 577 - 4,222 € 31/03/2023 * 420 982 Daniel Lopes Beato Executive Member - 16 162 - 4,222 € 31/03/2023 * 16 162 Filipa de Sousa Taveira da Gama Santos Carvalho Executive Member 31 191 17 914 - 4,222 € 31/03/2023 * 49 105 Jorge Filipe Pinto Sequeira dos Santos Graça Executive Member 112 539 75 485 - 4,222 € 31/03/2023 * 188 024 Luís Moutinho do Nascimento Executive Member 58 396 81 502 - 4,222 € 31/03/2023 * 139 898 Manuel Ramalho Eanes Executive Member 141 675 87 521 - - 77 000 4,222 € 3,456 € (6 793); 3,454 € (4 286); 3,452 € (2 377); 3,450 € (10 011); € 3,448 (18 793); € 3,446 (6 446); € 3,444 (10 201); € 3,442 (10 550); 3,440 € (7 543) 31/03/2023 * 21/07/2023 21/07/2023 21/07/2023 21/07/2023 21/07/2023 21/07/2023 21/07/2023 21/07/2023 21/07/2023 152 196 Ana Rita Ferreira Rodrigues Non-Executive Member - - - - - - António Bernardo Aranha da Gama Lobo Xavier Non-Executive Member - - - - - - Catarina Eufémia Amorim da Luz Tavira Van-Dúnem Non-Executive Member - - - - - - Cristina Maria de Jesus Marques Non-Executive Member - - - - - - Eduardo António Salvador Verde Rodrigues Pinho Non-Executive Member 38 - - - - 38 João Pedro Magalhães da Silva Torres Dolores (2) Non-Executive Member - - - - - - Maria Cláudia Teixeira de Azevedo (3) Non-Executive Member - - - - - - Statutory Independent Audit Board José Pereira Alves Chairman of the Statutory Independent Audit Board - - - - - - Paulo Cardoso Correia da Mota Pinto Member of the Statutory Independent Audit Board - - - - - - Patrícia Andrea Bastos Teixeira Lopes Couto Viana Member of the Statutory Independent Audit Board - - - - - - Ana Luísa Nabais Aniceto da Fonte Alternate Member of the Statutory Independent Audit Board - - - - - - Statutory Auditor Ernst & Young Audit & Associados, SROC, S.A. Statutory Auditor - - - - - - Sandra e Sousa Amorim Statutory Auditor - - - - - - Pedro Jorge Pinto Monteiro da Silva e Paiva Alternate Statutory Auditor - - - - - - (1) Ângelo Gabriel Ribeirinho dos Santos Paupério is Chairman of the Board of Directors of Sonaecom, SGPS, S.A., which owned, on 31.12.2023, 192.527.188 NOS shares. (2) João Pedro Magalhães da Silva Torres Dolores is Executive Director of Sonaecom, SGPS, S.A., which owned, on 31.12.2023, 192.527.188 NOS shares. (3) Maria Cláudia Teixeira de Azevedo is Executive Director of Sonaecom, SGPS, S.A., which owned, on 31.12.2023, 192.527.188 NOS shares. (4) On 10 November 2023, José Pedro Faria Pereira da Costa resigned from his executive member position in the Board of Directors of NOS, with effect on 31 December 2023. On that same date, the Board of Directors co-opted José Alexandre Koch Ferreira as executive member of the Board of Directors for the performance of duties until the end of the current term of office 2022-2024, with effect from 1 January 2024. * Share acquisition with a 90% discount under the Regulation on Short- and Medium-Term Variable Remuneration of NOS, SGPS, S.A. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 360 9. Special powers of the Board of Directors, especially as regards resolutions on capital increase The Company’s Board of Directors exercise the powers conferred by the law and the Articles of Association. The Annual General Meeting in 2023 granted authorisation to the Board of Directors for the purchase and sale of own shares and bonds by the Company and subsidiaries, within a set of established and approved parameters by the General Meeting, in accordance with the applicable legislation. The Company’s Articles of Association do not provide any special powers to the Board of Directors regarding resolutions on capital increase. 10. Significant business relationships between the holders of qualified shareholdings and the Company The relevant commercial relations held between NOS and their holders of qualified shareholdings during the year 2023 correspond to transactions with related parties referred to in item 92 of this Report. B. Governing bodies and committees I. General Meeting a) Composition of the Board of the General Meeting 11. Details and position of the members of the Board of the General Meeting and respective term of office The Board of the General Meeting is composed by a Chairman and a Secretary, elected by the General Meeting. The current members were elected for the term of 2022- 2024, beginning on 21 April 2022 and ending on 31 December 2024, and they are: Chairman António Agostinho Cardoso da Conceição Guedes Secretary Maria Daniela Farto Baptista Passos b) Exercise of the voting right 12. Restrictions on the right to vote There are no restrictions on voting rights provided in the Company’s Articles of Association, with shareholders with voting rights being able to attend the General Meetings. To every 100 shares corresponds one vote, which is not deemed as a limit to the exercise of the voting right by the shareholders, as it does not follow the principle of one share one vote, bearing in mind that (i) the nominal value of the shares is 1,66 euros and (ii) shareholders holding less than the number of shares necessary to exercise the voting right may join together to reach the required number or more and be represented at the General Meeting by one of these shareholders. Shareholders with voting rights who, on the record date, which is at 0 hours (GMT) on the 5 th trading day before the General Meeting, own shares that grant at least one vote pursuant to the law and the Company’s Articles of Association and who comply with the legal formalities as described in the corresponding notice, have the right to participate, discuss and vote at the General Meeting. The shareholdings, as a whole, are not subject to limits on the respective voting power, as there are no cap limits on voting. Additionally, considering the relationship of proportionality there is no time lag between the right to receive dividends or to subscribe new securities and the voting right. The voting right may, on all matters included in the notice of meeting, also be exercised by correspondence or by electronic means, under the terms set forth in the Company's Articles of Association and in the notice of meeting, since the Company also has a system that allows, without limitations, the possibility of shareholders using their voting rights in both formats, being this information duly communicated to shareholders and made available to the public through the publication of the corresponding notice and other documents (including voting ballot and forms) on the Company’s website. The participation of the shareholders is ensured by electronic means, through videoconferencing and with the possibility of exercising voting rights. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 361 13. Maximum percentage of voting rights that may be exercised by a single shareholder or by shareholders that are in any relationship as set out in article 20(1) of the Portuguese Securities Code Pursuant to the Company’s Articles of Association, there is no limit on the number of votes that can be held or exercised by each shareholder. 14. Shareholders' resolutions that, imposed by the Articles of Association, may only be taken with a qualified majority, in addition to those legally provided Pursuant to the Articles of Association, the General Meeting can run at a first meeting so long as shareholders representing more than 50% of the share capital are present or represented, which represents the constitutive quorum. The Articles of Association do not set any qualified quorum greater than that provided by law. II. Administration and Supervision a) Composition 15. Identification of the corporate governance model NOS adopts the reinforced one-tier governance model, a model which is fully and effectively implemented and there are no constraints on its operations. The adopted model allows the Company to work properly, enabling a flow of information and a proper and transparent dialogue between the different governing bodies and between the Company, its shareholders and other stakeholders. 16. Rules of the Articles of Association on the appointment and replacement of directors The members of the Board of Directors are elected by the General Meeting, which appoints a Chairman and if it so wishes, one or more Vice-Chairman. If the General Meeting does not appoint a Chairman of the Board of Directors, the Board will make the appointment. One of the Company’s directors can be elected by the General Meeting through isolated appointment, from persons proposed on lists drawn up by groups of shareholders, provided that none of these groups possesses shares representing more than 20% and less than 10% of the share capital. The replacement of a director, if they cease their office before the end of the term of office, shall comply with applicable legal requirements. Without prejudice to the above, the Company’s Articles of Association state that where the director who is definitively absent is the Chairman or Vice-Chairman, he/she shall be replaced through election at the General Meeting. For this purpose, a director is considered to be definitively absent if, during their term of office, they miss two meetings in a row or five in total, without a justification that is accepted by the Board of Directors. 17. Composition of the Board of Directors The Board of Directors is composed of up to 23 members elected by the General Meeting, and no express provision is set out on the minimum number. Therefore, the statutory minimum corresponds to the minimum legal requirement for a collegial body (i.e., 2 members). If the law or the Articles of Association do not set a specific number of members on a governing body, this number shall be established, on a case-by-case basis, by the resolution of election, corresponding to the number of members elected. This does not affect the possibility to change the number of the governing body members during the term of office, up to the legal limit or up to the limit set out by the Articles of Association. General Meeting Board of Directors Company Secretary Statutory Independent Audit Board Statutory Auditor Remuneration Committee Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 362 The Board of Directors keep their terms of office for renewable periods of 3 calendar years, and the calendar year of their appointment counts as a complete year. The Board of Directors was elected in the Annual General Meeting of 21 April 2022, for the three-year term of 2022- 2024, and its term of office ends on 31 December 2024. On 31 December 2023, the Board of Directors comprised the following directors: Name Position/Job First Appointment Ângelo Gabriel Ribeirinho dos Santos Paupério Chairman of the Board of Directors 1 Oct 2013 Miguel Nuno Santos Almeida Chairman of the Executive Committee 1 Oct 2013 José Pedro Faria Pereira da Costa (1) Executive Member 21 Sep 2007 Daniel Lopes Beato Executive Member 15 Jan 2021 Filipa de Sousa Taveira da Gama Santos Carvalho Executive Member 15 Jan 2021 Jorge Filipe Pinto Sequeira dos Santos Graça Executive Member 26 Apr 2016 Luís Moutinho do Nascimento Executive Member 29 Jun 2017 Manuel António Neto Portugal Ramalho Eanes Executive Member 1 Oct 2013 Ana Rita Ferreira Rodrigues Member 23 Mar 2020 António Bernardo Aranha da Gama Lobo Xavier Member 1 Oct 2013 Catarina Eufémia Amorim da Luz Tavira Van-Dúnem Member 27 Nov 2012 Cristina Maria de Jesus Marques Member 23 Mar 2020 Eduardo António Salvador Verde Rodrigues Pinho Member 21 Apr 2022 João Pedro Magalhães da Silva Torres Dolores Member 26 Apr 2016 Maria Cláudia Teixeira de Azevedo Member 1 Oct 2013 (1) On 10 November 2023, José Pedro Faria Pereira da Costa resigned from his executive member position in the Board of Directors of NOS, with effect on 31 December 2023. On that same date, the Board of Directors co-opted José Alexandre Koch Ferreira as executive member of the Board of Directors for the performance of duties until the end of the current term of office 2022-2024, with effect from 1 January 2024. 18. Distinction to be drawn between executive and non- executive directors and details of independent members The Regulations of the Board of Directors, approved on 3 May 2022, establish that the members of the Board of Directors who do not perform executive duties should always outnumber the members of the Executive Committee, in order to ensure the effective capacity for adequate supervision, monitoring and evaluation of the performance of the members of the Executive Committee. Therefore, in order to maximise the pursuit of the Company’s interest, the management body is composed of 8 non-executive members and 7 executive members. The number of non-executive members is suitable bearing in mind, especially, the size, shareholder structure, and complexity of the risks associated with the activity of the Company. Having considered the above mentioned, and also based on the Company’s size and its shareholder structure, there is no independent director among its non-executive directors (in line with the definition of independence under the applicable CMVM Regulation and in the IPCG’s Corporate Governance Code). The non-executive directors have regularly and effectively developed their legal functions, which generally consist in the supervision, oversight and evaluation of the executive member’s activity. The Regulations of the Board of Directors provide that those directors must help the Board of Directors to define the strategy (including the strategic plan), main policies (including risk policy), business structure and decisions that should be considered strategic for the Company due to their amount or risk, as well as in evaluating their compliance, and as such they cannot be delegated to the Executive Committee. NOS non-executive directors have also made important contributions to the Company by performing their duties on the specialised Board of Directors Committees (see item 27). 19. Professional qualifications and curricular information of the members of the Board of Directors Pursuant to the Portuguese Companies Code (“CSC”), the General Meeting has the duty to elect the members of the management and supervisory bodies and, in that sense, it will be its major role in choosing qualified professionals ensuring also the promotion of diversity within these bodies. Professional qualifications and offices held by each member of the Board of Directors are in the Annex to this Report and, briefly, in the matrix of competences integrated in chapter 1.8 “Governance Model” of the Integrated Management Report. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 363 The Regulations of the Appointments and Assessments Committee of NOS provide that, during the exercise of its duties when supporting the Board of Directors, the Committee shall prepare an opinion on the adequacy of certain candidate to the board, bearing in mind criteria such as qualifications, knowledge, expertise and professional experience, independence, integrity, availability and diversity, with a particular emphasis on gender diversity. The goal is, therefore, to help enhance the management body’s performance and balance its composition. In turn, it is the duty of the Corporate Governance and Sustainability Committee to previously determine the abstract criteria and requirements of the profile for new governing bodies members suited to the position to be held which, in addition to individual attributes (such as expertise, independence, integrity, availability and experience), should also consider diversity requirements, with a particular emphasis on gender diversity which may help, in principle, to enhance the body’s performance and balance its composition. For that purpose, NOS Internal Policy for Selecting Members of the Management and Supervisory Bodies provides a set of general principles, individual merit criteria, and collective composition, which include, among others, diversity and inclusion within these governing bodies. This internal policy is also in line with the principles set forth in the Declaration of Commitment to Diversity and Inclusion of the NOS Group. The Internal Policy for Selecting Members of the Management and Supervisory Bodies is available at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da-sociedade/politica- interna-de-selecao-ca-e-cf-nos-marco2022-en.pdf The Declaration of Commitment to Diversity and Inclusion is available at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/declaration-commitment-diversity-and- Inclusion.pdf Furthermore, NOS sets out in its Code of Ethics a general principle applicable to all its employees and, therefore, including members of the management and supervisory bodies, under which the human resources management policy is based, mainly, on respect for diversity, individual rights and non-discrimination depending on age, gender, sexual orientation, race, disability, religion or creed, promoting diversity as a core value present in all internal processes and procedures. Currently, apart from the diversity of skills, variety of academic qualifications and professional experience, members of the Board of Directors and the Statutory Independent Audit Board possess the adequate diversity in terms of age and gender. In fact, apart from the fact that the percentage of female members is 33% and 50%, respectively, in both bodies – in compliance with the provisions of the law –, the members of these bodies are between 35 and 64 years of age. The Internal Policy for Selecting Members of the Management and Supervisory Bodies, prepared by the Corporate Governance and Sustainability Committee, provides a set of principles, requirements, and criteria regarding the profile of the members of the management and supervisory bodies, to be assessed at an individual and collective level. In the light of this internal policy, it is sought to promote the composition of bodies, the members of which should show evidence they have, namely, experience, expertise, integrity, independence, and availability to perform their respective duties, joining bodies characterised by its diversion and inclusion, complementarity and independence. 20. Family, professional or business relationships of members of the Board of Directors with shareholders that are assigned qualified holdings that are greater than 2% of the voting rights Name Position/Job Company Participation in NOS share capital Ângelo Gabriel Ribeirinho dos Santos Paupério (Chairman of the Board of Directors of NOS) Chairman of the Board of Directors Sonaecom, SGPS, S.A. 37.37% Maria Cláudia Teixeira de Azevedo (Member of the Board of Directors of NOS) Member of the Board of Directors Sonaecom, SGPS, S.A. 37.37% João Pedro Magalhães da Silva Torres Dolores (Member of the Board of Directors of NOS) Member of the Board of Directors Sonaecom, SGPS, S.A. 37.37% Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 364 21. Competence sharing between the various governing bodies, committees and/or Company departments, including information on competence delegation, in particular regarding daily management of the Company The Board of the General Meeting, the Remuneration Committee, the Board of Directors, the Statutory Independent Audit Board and the Statutory Auditor are governing bodies of the Company. NOS Board of Directors is responsible for managing the Company’s activity and their responsibilities are defined in the law, the Company’s Articles of Association and the corresponding Regulations. The Board of Directors created and delegated the day-to- day management of the Company to an Executive Committee for the three-year term of 2022-2024, setting out the corresponding composition, functioning and delegation of management powers. Therefore, the Board of Directors delegated to the Executive Committee the necessary powers to develop and execute the day-to-day management of the Company. For these purposes, were not deemed as current management and, as such, were not delegated by the Board of Directors, namely: (i) the definition of the Company's strategy and main policies; (ii) the organisation and coordination of the business structure; (iii) the matters which are to be deemed as strategic in view of their amount, risk or special characteristics. Alongside the day-to-day management of the Company, the Executive Committee is responsible, in particular, for: a) Proposing, to the Board of Directors, the strategic guidelines of the Group and fundamental policies of the Company and its subsidiaries; b) Working with the Board of Directors and its Committees, as needed for the fulfilment of their respective purposes; c) Determining the internal organisational and operating norms of the Company and its subsidiaries, namely with regard to employee hiring, professional categories, remuneration and other employees’ bonuses; d) Issuing binding instructions to companies in a group relationship consisting of complete control, and controlling these companies’ implementation of the guidelines and policies laid out pursuant to the above sub- paragraphs; General Meeting Board of Directors Executive Committee Audit and Finance Committee Appointments and Assessments Committee Corporate Governance and Sustainability Committee Ethics Committe Company Secretary Statutory Independent Audit Board Statutory Auditor Remuneration Committee Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 365 e) Exercising disciplinary power, and deciding on applicable penalties for the Company’s employees; f) Deciding on the acquisition of own shares by the Company, and/or by any of its dependent companies, within the scope of NOS variable remuneration policy, per the terms and conditions approved by the General Meeting. The Board of Directors, when defining the functioning of the Executive Committee, specifically delegated to the Chairman of the Executive Committee the following duties: a) Coordinating the activity of the Executive Committee; b) Convening and conducting the meetings of the Executive Committee; c) Providing for the proper implementation of the resolutions of the Board of Directors; d) Providing for the proper implementation of the resolutions of the Executive Committee; e) Ensuring the compliance with the limitations on the delegation of powers, on the strategy of the Company and the duties of cooperation before the Chairman of the Board of Directors and other members of the Board of Directors, as well as other governing bodies; f) Ensuring that the Board of Directors is informed of the actions and relevant decisions of the Executive Committee, as well as guaranteeing that all the clarifications requested by the Board of Directors are provided in a timely and appropriate manner; g) Ensuring that the Board of Directors is informed, on a quarterly basis, of the transactions that, within the powers delegated to the Executive Committee, have been entered into between the Company and shareholders of qualified holdings equal or above 2% of the voting rights (Qualified Shareholders) and/or any entities in a relationship of article 20 of the Portuguese Securities Code with them (Related Entities), when such transactions exceed the individual amount of 10,000 Euros. In the definition of the Company’s strategy and policies, the Board of Directors strives to ensure the compliance of the long-term goals of the Company and contribute for the sake of the community in general. Regarding the compliance with its environmental, social and governance goals, NOS has adopted a set of codes and policies with a view to promote good practices on those matters, and also created the necessary management system and tools responsible for establishing and implementing strategies for promoting sustainability and creation of long-term social value, as illustrated in chapter 2.2.3 “Sustainability Management and Strategy” of the Integrated Management Report, to which reference is made. On 31 December 2023, the Executive Committee was comprised by 7 members, functionally organised in the following manner: Miguel Almeida Strategy and Business Development Corporate Communication Transformation NOS Madeira & NOS Açores José Pedro Pereira da Costa (1) Financial and Assurance Services Corporate Finance Data Protection Officer Investor Relations and Sustainability Planning and Management Control Procurement Daniel Beato Product Management Offer and Segmentation Experience and Value CRM WOO and WTF Personal Sales Brand and Communication Alarms Filipa Santos Carvalho Audit, Risk and Compliance Legal Regulatory Market & Customer Intelligence Jorge Graça Quality and Transversal Projects Mobile Centric Fiber Centric Operations Information Services Innovation Services Luís Nascimento People and Organisation Customer Care and Back-office I&M, Technical Support, Logistics and Terminal Management Contents Audiovisuals Cinemas Publicity Manuel Ramalho Eanes Corporate Transformation Center Corporate Solutions Direct Sales Corporate Channels Wholesale (1) On 10 November 2023, José Pedro Pereira da Costa resigned from his executive member position in the Board of Directors of NOS, with effect on 31 December 2023. On that same date, the Board of Directors co- opted José Alexandre Koch Ferreira as executive member of the Board of Directors for the performance of duties until the end of the current term of office 2022-2024, with effect from 1 January 2024, who from that date took over the same duties previously attributed to José Pedro Pereira da Costa. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 366 b) Functioning 22. Availability and place where Regulations on the functioning of the Board of Directors may be viewed The Board of Directors, at its meeting on 3 May 2022, approved its Regulations on organisation and functioning, which is available at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/regulamento-ca-maio2022-en.pdf In line with the recommendations and good practices adopted by the Company, the Regulations on the organisation and functioning of the Board of Directors govern, namely, the exercise of the powers, the presidency, the frequency of meetings, the performance and the obligations’ framework of the members of this governing body. 23. Number of meetings held and the attendance report of the members of the Board of Directors In accordance with its Regulations, the Board of Directors of NOS meets at least 6 times a year and whenever is convened on the initiative of the Chairman, or by 2 directors. During 2023, the Board of Directors held 6 meetings, 5 hybrid (in person and by electronic means) and 1 exclusively held by electronic means, and all of them had the minutes drawn up. The attendance degree of the members of the Board of Directors in the meetings held was as follows: NAME PRESENT REPRESENTED ABSENT ATTENDANCE (%) Ângelo Gabriel Ribeirinho dos Santos Paupério (Chairman of the Board of Directors) 6 0 0 100 Miguel Nuno Santos Almeida 6 0 0 100 José Pedro Faria Pereira da Costa 6 0 0 100 Daniel Lopes Beato 6 0 0 100 Filipa de Sousa Taveira da Gama Santos Carvalho 6 0 0 100 Jorge Filipe Pinto Sequeira dos Santos Graça 6 0 0 100 Luís Moutinho do Nascimento 5 1 0 100 Manuel António Neto Portugal Ramalho Eanes 6 0 0 100 Ana Rita Ferreira Rodrigues 5 1 0 100 António Bernardo Aranha da Gama Lobo Xavier 6 0 0 100 Catarina Eufémia Amorim da Luz Tavira Van-Dúnem 4 0 2 66.67 Cristina Maria de Jesus Marques 5 1 0 100 Eduardo António Salvador Verde Rodrigues Pinho 6 0 0 100 João Pedro Magalhães da Silva Torres Dolores 6 0 0 100 Maria Cláudia Teixeira de Azevedo 6 0 0 100 24. Competent governing bodies undertaking the performance appraisal of executive directors The Remuneration Committee is empowered to annually assess the Executive Committee, supported by an opinion issued by the Appointments and Assessments Committee. The Board of Directors of NOS also has a rule to self-assess its procedures, as well as of its internal committees, ensuring an efficient, informed, and consistent performance with the objectives of the organisation. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 367 25. Predefined criteria for assessing executive directors' performance The assessment criteria for the members of the Executive Committee are totally dependent on measurable and predefined criteria, which globally consider the Company’s fulfilment of the strategy and of the established goals, plans and budget, growth, and wealth creation in a mid-long-term perspective. In this scope and for further detail please refer to items 70 and 71 of this Report. 26. The availability of the members of the Board of Directors with details of the positions held at the same time in other companies within and outside the Group The offices held by the directors in other companies, within and outside NOS Group are submitted in the Annex to this Report. All the members of the Board of Directors are able to perform their duties with utmost diligence, guaranteeing careful management in accordance with best practices, scrupulously fulfilling their general and fundamental duties. In accordance with the Regulations of the Board of Directors, the directors inform the Chairman of the Board of Directors, that informs the other members, whenever there is a situation of a potential or an effective conflict of interests of a director, on his own behalf, on other’s behalf or as determined on the Company’s Code of Ethics. Such communication of conflict of interests should not be limited to the deliberation context, but should always occur whenever there are facts which might so constitute or originate a conflict between the interests at issue and the Company’s interests. In situations regarding social deliberations, as set out in the Regulations, if the Board of Directors or the director consider that there is a conflict of interest, the latter shall not participate in the discussion nor exercise their respective right to vote in the deliberations in question and, in such situations, the director in question will not receive documentation pertaining the topics where there is a conflict of interest. In addition, at the time of their election and by 31 January of each year, all members of the Board of Directors individually complete a questionnaire on independence and applicable incompatibilities in accordance with the applicable regulations, without prejudice to the obligation to immediately report any changes to the answers to such questionnaire. c) Committees within the board of directors 27. Details of the committees created within the Board of Directors Considering the limits set out by law and the best corporate governance practices, the Board of Directors of NOS created and delegated to an Executive Committee the day-to-day management of the Company. In compliance with the applicable legal or regulatory requirements, the NOS Board of Directors created internal committees always with merely ancillary duties and the resolutions to be taken only by the management body. All Committees have internal regulations, which regulate the exercise of their functions, the presidency, the frequency of meetings, the operation and the duties of their members, namely: Corporate Governance and Sustainability Committee Audit and Finance Committee Appointments and Assessments Committee Ethics Committee 28. Composition of the Executive Committee On 31 December 2023, NOS Executive Committee comprised the following directors: Chairman Miguel Nuno Santos Almeida Member José Pedro Faria Pereira da Costa (1) Member Daniel Lopes Beato Member Filipa de Sousa Taveira da Gama Santos Carvalho Member Jorge Filipe Pinto Sequeira dos Santos Graça Member Luís Moutinho do Nascimento Member Manuel António Neto Portugal Ramalho Eanes (1) José Pedro Pereira da Costa resigned from his position on 10 November 2023, with effect on 31 December 2023. On that same date, the Board of Directors of NOS co-opted José Alexandre Koch Ferreira as executive member of the Board of Directors for the current term of office 2022-2024, with effect from 1 January 2024. The members of the Executive Committee are chosen by the Board of Directors and the Committee is made up of a minimum of 3 and a maximum of 7 directors. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 368 29. Description of the powers of each of the committees established and a summary of activities undertaken in exercising said powers The Board of Directors delegated to the Executive Committee the necessary powers to develop and execute the day-to-day management of the Company, as detailed in item 21 of this Report. The powers delegated to the Executive Committee may be sub-delegated, partially or in whole, to one or more of its members or to employees of the Company. Therefore, the Executive Committee is responsible for the day-to-day management of the Company, and comprises directors whose professional profiles ensure that they have the due reputation, competence, diversity of knowledge and experience to perform their duties. The Board of Directors set out the rules on the composition, operation, and delegation of management powers to the Executive Committee, which document is available at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da-sociedade/deleg- ce-2022-en.pdf The members of the Executive Committee shall not perform executive management functions in companies in which the Company has no shares, without the prior consent of the Board of Directors. In accordance with the provisions in its Regulations, during 2023, the Executive Committee had 41 meetings, having been discussed there, among others, issues related to the activity to be performed by the Group’s business units and companies, transactions approvals with related parties and approval of increase of capital in companies of the Group. Minutes from all the meetings were drafted and the attendance of the meetings was 98%. For more detailed information related with the professional experience and expertise to their positions by the members of the Executive Committee, refer to the Annex to this Report. CORPORATE GOVERNANCE AND SUSTAINABILITY COMMITTEE The Corporate Governance and Sustainability Committee has the duty to reflect on the governance system, structure and practices, the environmental and social sustainability, namely on the area of protection of human and labour rights, to verify its effectiveness and propose measures to the appropriate bodies with a view to improving them. On 31 December 2023, the Corporate Governance and Sustainability Committee had the following composition: Chairman Maria Cláudia Teixeira de Azevedo Member António Bernardo Aranha da Gama Lobo Xavier Member Filipa de Sousa Taveira da Gama Santos Carvalho Its Regulations can be consulted at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/regulamento-cgs-s-maio2022-en.pdf The duties and powers of the Corporate Governance and Sustainability Committee are, namely, the following: a. To study, propose and recommend the adoption by the Board of Directors of the policies, rules and procedures necessary for compliance with the applicable legal and regulatory provisions as well as those of the Articles of Association, including recommendations, opinions and best practices, both national and international, in the matter of corporate governance, rules of conduct and environmental and social sustainability; b. To ensure the supervision of environmental, social, and corporate governance risks and the creation of mitigation and resolution mechanisms for possible controversial situations associated with those risks; c. To strive for full compliance with legal and regulatory requirements, recommendations and best practices relating to the Company’s governance model and for the adoption by the Company of corporate principles and practices in matters such as: i. The structure, powers and operation of governing bodies and internal committees, and their respective internal coordination; ii. Requirements with regard to incompatibilities, independence, qualifications and experience, among other diversity requirements, applicable to members of the management and supervisory bodies; iii. Efficient means for non-executive members of the management body to perform their duties; iv. The exercising of voting rights, representation and equal treatment of shareholders; v. Preventing conflicts of interest; vi. The scheme applicable to executive directors, and their performance of executive duties at entities outside of the Group; vii. Transparency of corporate governance, of information to be disclosed to the market and of the relationships with the investors and other Company stakeholders; Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 369 d. To promote and supervise, in the different hierarchical levels, the effective compliance with the Company’s Code of Ethics, and also to propose to the Board of Directors measures it considers appropriate to perfect and update the said Code; e. Propose to the Board of Directors those measures it considers appropriate for the development of a corporate and professional ethics culture within the Company; f. To assist and support the Board of Directors in the performance of its function of supervising business activities in matters of corporate governance, rules of conduct, and environmental and social sustainability, as well as the means of ensuring an adequately and timely flow of information needed for all the Company's bodies and committees to exercise their powers under the law and Articles of Association; g. In cooperation with the Appointments and Assessments Committee, establishing criteria and requirements for the profile of new governing bodies members suited to the function to be performed, including, in addition to individual attributes, such as competence, independence, integrity, availability and experience, diversity requirements that contribute jointly towards the outstanding performance of these bodies and their balanced composition; h. To ensure full compliance with legal and regulatory requirements, recommendations, and best practices with regard to sustainability, proposing the guidelines of the Company’s social responsibility, environmental and ethics policies, including, among others, principles and values to safeguard the interests of the Company’s various stakeholders, as well as overseeing and monitoring the strategic plan for environmental, social, and corporate governance sustainability and its alignment with the corporate strategy; i. In cooperation with the Company’s Sustainability Forum, monitoring the main developments in matters of environmental and social sustainability. In 2023, under its competences, the Corporate Governance and Sustainability Committee met once, having been discussed in that meeting, among others, issues related with the corporate governance and integrated management report of 2022, as well as the activity carried out by the Ethics Committee in that year. Minutes from the meeting was drafted and the attendance was 100%. AUDIT AND FINANCE COMMITTEE The Audit and Finance Committee has the duty of assisting in the assessment of financial matters, practices and accounting policies, supervise risk control policy, and advise the Board of Directors and the Statutory Independent Audit Board in the previously mentioned matters. On 31 December 2023, the Audit and Finance Committee had the following composition: Chairman João Pedro Magalhães da Silva Torres Dolores Member Ângelo Gabriel Ribeirinho dos Santos Paupério Member Ana Rita Ferreira Rodrigues Member Cristina Maria de Jesus Marques The Company considers that the composition of the Audit and Finance Committee, as is market practice in comparable companies, ensures the efficient execution of its functions and that this number is adequate, given the dimension of the Company, and the complexity of the risks that accompany its activity. Its Regulations can be consulted at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/regulamento-caf-maio2022-en.pdf. The powers and duties of the Audit and Finance Committee are, namely, the following: a. To follow the activity of the Executive Committee; b. To review the annual, half-yearly, quarterly, and similar financial statements and to publish and report its findings to the Board of Directors; c. To advise the Board of Directors on its reports to the market to be included in the publication of the annual, half- yearly and quarterly results; d. To advise the Statutory Independent Audit Board, on behalf of the Board of Directors, on the appointment, duties and remuneration of the External Auditor; e. To advise the Board of Directors on the quality and independence of the Internal Audit function, and on the appointment and dismissal of the Internal Audit Manager; f. To review the scope of the Internal Audit and Risk Management functions, as well as their relationship with the work of the External Auditor; g. To review and discuss with the External Auditor, the Internal Auditor, and the person in charge of risk management the reports produced within the scope of their duties and, consequently, to advise the Board of Directors on matters deemed relevant; h. To oversee the Company’s risk management policy, in conjunction with the Statutory Independent Audit Board, by monitoring risk control policies, identifying key risk indicators (KRI) and integrated risk assessment methodologies; i. To review, discuss and advise the Board of Directors on the accounting policies, criteria and practices adopted by the Company; Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 370 j. To review transactions between the Company and shareholders of qualified holdings of 2% or more of voting rights (“Qualified Shareholders”) and/or entities which they have any relationship pursuant to article 20 of the Securities Code, and persons or entities qualified as related parties (“Related Parties”), pursuant to Company regulations approved by the Board of Directors by proposal of the Statutory Independent Audit Board. In 2023, under its competences, the Audit and Finance Committee had 5 meetings and discussed (i) matters related to the financing strategy, (ii) transactions with related parties, (iii) financing, planning and control, investors relationship, sustainability, and internal audit reports, (iv) quarterly and annual financial statements, and (v) press releases of earnings announcements. Minutes from the meetings were drafted and the attendance of the meetings was 100%. APPOINTMENTS AND ASSESSMENTS COMMITTEE The Appointments and Assessments Committee has the duty to ensure a competent and independent evaluation of the performance of the executive directors, the overall performance evaluation report for the Board of Directors and its various specialised committees, and also to ensure the timely identification of potential candidates with the necessary profile for the performance of director’s duties. On 31 December 2023, the Appointments and Assessments Committee had the following composition: Chairman Ângelo Gabriel Ribeirinho dos Santos Paupério Member Ana Rita Ferreira Rodrigues Member João Pedro Magalhães da Silva Torres Dolores Its Regulations can be consulted at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/regulamento-da-cna-maio2022-en.pdf It is the responsibility of the Appointments and Assessments Committee to: a. Assist the Board of Directors when appointing directors to be appointed by co-optation to join the Company’s Board of Directors; b. In its duties to support the Board of Directors, in the event of any vacancy on the Company’s Board of Directors or Executive Committee, prepare a justified opinion, identifying persons with the profile most suited to the function to be performed, considering, in addition to individual attributes, such as competence, independence, integrity, availability and experience, diversity requirements that contribute jointly towards the outstanding performance of these bodies and their balanced composition; c. Approve and make its terms of reference available, and foster, to the extent of its powers, transparent selection processes that include effective mechanisms to identify potential candidates, and ensure that those chosen as candidates possess the highest degree of merit, are best suited to the demands of the functions to be carried out, and shall encourage suitable diversity within the organisation; d. Conduct the annual evaluation process of the members of the Executive Committee, ensuring further harmonisation with the Board of Directors and the Remuneration Committee; e. Within the annual process of evaluation of the members of the Executive Committee, propose to the Remuneration Committee the criteria which will be regarded when establishing the variable remuneration, namely the individual performing goals; f. Prepare an overall performance evaluation report of the Board of Directors and its various specialised committees, bearing in mind compliance with the Company’s strategic plan, budget, risk management and internal operation, and the contribution of each member of these bodies for this purpose, together with the relationship between the Company’s bodies and committees; g. Whenever requested by the Board of Directors or by the Remuneration Committee, issue an opinion on the Executive Committee’s general remuneration policy, as well as on the variable remuneration programs based on the allocation of NOS shares or stock options. The Appointments and Assessments Committee shall observe the long-term interests of shareholders, investors and the general public, and, to the extent of its powers, shall contribute towards achieving social responsibility and sustainability goals. In 2023, under its competences, the Appointments and Assessments Committee had 2 meetings. In these meetings, an evaluation proposal for the executive members of the Board of Directors and their KPIs achievement was presented and discussed, as described in the Remuneration Policy by reference to the year 2022. Additionally, the succession plans put into place in the Company were discussed and the Remuneration Policy was analysed to assess the need for the review to be proposed to the Remuneration Committee of NOS. Minutes from the mentioned meetings were drafted and their attendance was 100%. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 371 ETHICS COMMITTEE The Ethics Committee has the duty to disclose and monitor, with impartiality and independence, the Code of Ethics of NOS Group. This document is available at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da-sociedade/codigo- de-etica-geral-en-externa.pdf It is composed by 3 members (non-executive director, Chairman of the Statutory Independent Audit Board and the director in charge of People and Organisation) appointed by the Board of Directors. On 31 December 2023, the Ethics Committee had the following composition: Chairman António Bernardo Aranha da Gama Lobo Xavier Member José Pereira Alves Member Luís Moutinho do Nascimento The Ethics Committee Regulations can be found at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/regulamento-cde-fev2022-en.pdf The Ethics Committee is responsible, inter alia, for: a. Receiving, analysing, and responding to clarification requests referring to the Code of Ethics and its compliance, either through requests directed to the supervisors, to the People and Organisation Department or via an email created for this purpose; b. Analysing and investigating the complaints referring to the alleged breach of the Code of Ethics, in accordance with its competences; c. Requesting that Internal Audit investigate whatever is required at any given time, within the scope of its powers; d. Drawing up opinions on measures to be taken in the wake of the investigations made under paragraph b); e. Promoting and monitoring the Code of Ethics’ implementation, namely with regard to communication, awareness and training initiatives for employees, suppliers and partners with a view to strengthening an ethical culture; f. Issuing opinions, when requested to do so, about ethics and conduct codes, or about professional ethical practices; g. Under the proposal by any body, committee, commission, internal unit or entity of the Company and whenever deemed suitable, making a review of the Code of Ethics and respective procedures concerning the needs of the Company and submit it for the approval of the Corporate Governance and Sustainability Committee; h. Suggesting to the Corporate Governance and Sustainability Committee policies, goals, instruments and indicators regarding the management system of corporate ethical performance; i. Ensuring the management system of corporate ethical performance is compatible with the requirements of the Company’s internal control system; j. Drawing up and submitting to the Corporate Governance and Sustainability Committee an annual report of the relevant executed actions in corporate governance matters; k. Drawing up and submitting annual activity reports to the Board of Directors; l. Drawing up an annual activity report to address the Company’s commitments in the area of sustainability. In 2023, the Ethics Committee had 4 meetings, and discussed (i) a set of situations, (ii) made recommendations for the pursuit of a conduct guided by ethical principles, (iii) monitored the communication and training plan for employees and partners, (iv) made the balance of its activities, and (v) approved activity indicators. Minutes from the mentioned meetings were drafted and their attendance was 100%. The Ethics Committee also held a hybrid session called “Let’s Talk Ethics” open to all employees, focused on the theme “Ethics and Sustainability”. III. Supervision a) Composition 30. Details of the supervisory body The Statutory Independent Audit Board is the Company’s independent supervisory body. The supervision of NOS, regarding the legal certification for the accounts, also includes a Statutory Auditor, who cannot be a member of the Statutory Independent Audit Board. 31. Composition of the supervisory body The Statutory Independent Audit Board is made up of 3 members and an alternate member, elected by the General Meeting, which shall also elect its Chairman, for terms of office of 3 years. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 372 While there is no provision in the Articles of Association requiring a minimum or maximum number of members of the Statutory Independent Audit Board, this Board should necessarily be made of 3 effective members and one alternate member per the terms of law. The Statutory Independent Audit Board was elected at the General Meeting of 21 April 2022, for the three-year term of 2022-2024, and its term of office ends on 31 December 2024. On 31 December 2023, the Statutory Independent Audit Board had the following composition: FIRST APPOINTMEN T Chairman José Pereira Alves 8 May 2019 Member Patrícia Andrea Bastos Teixeira Lopes Couto Viana 25 Apr 2016 Member Paulo Cardoso Correia da Mota Pinto 21 Apr 2008 Alternate Member Ana Luísa Nabais Aniceto da Fonte 8 May 2019 The Company considers that the composition of the Statutory Independent Audit Board, as is market practice in comparable companies, ensures the efficient execution of its functions and that this number is adequate to the dimension of the Company and to the complexity of the risks inherent to its activity. This is reinforced by the existence of the Audit and Finance Committee that, under its competences, assists, advises and supports the Statutory Independent Audit Board in several of its functions, as described above in item 29 of this Report. 32. Details of the independent members of the Statutory Independent Audit Board The Statutory Independent Audit Board is currently comprised of 3 independent members: José Pereira Alves, Patrícia Teixeira Lopes and Ana Fonte. 33. Professional qualifications of the members of the Statutory Independent Audit Board and other curricular information The members of the Statutory Independent Audit Board are manifestly suitable and have academic and professional qualifications and experience appropriate to the exercise of supervisory functions, and item 19 above on diversity matters are applicable to them. In order to ensure a more assertive understanding of the effective qualifications, experience and availability of the Statutory Independent Audit Board members, the functions performed by them, as well as their academic and professional qualifications and professional activities, are in the Annex to this Report. b) Functioning 34. Rules on the functioning of the Statutory Independent Audit Board The functioning and powers of the Statutory Independent Audit Board are established in its Regulations, reviewed and approved on 24 February 2022, which is available at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/regulamento-cf-fev-2022-en.pdf 35. Meetings held and the attendance report of the members of the Statutory Independent Audit Board In 2023, under its competences, the Statutory Independent Audit Board had 11 meetings and in their meetings, among other activities, it was discussed the annual and quarterly financial statements and it was made an opinion regarding it, the Group policy was assessed regarding the provision of non-audit services, the Internal Audit activity and the conclusion on the respective work of the NOS Group companies was monitored, the suitability of the activity and independence of the Internal Audit was evaluated, also being made the monitoring of the Risk Management model applied to NOS Group, the suitability of the accounting policies adopted by the Group was analysed, and it was presented the budget review suppositions and forecast. Minutes from the meetings were drawn-up and the attendance degree of the members of the Statutory Independent Audit Board in the meetings was 100%. 36. Availability of the members of the Statutory Independent Audit Board with details of any positions held at the same time in other companies within and outside the Group Members of the Statutory Independent Audit Board have a high degree of availability for the performance of their respective duties. The offices held by the members of the Statutory Independent Audit Board in other companies are in the Annex to this Report. c) Powers and duties Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 373 37. Description of the procedures and criteria applicable to the supervisory body for the purposes of hiring additional services from the external auditor In order to ensure the independence of the external auditors, the Statutory Independent Audit Board, according to its Regulations, has the following powers and duties with regard to the external audit: a. Selects the statutory auditors or statutory auditing firm to be proposed to the General Meeting, with a justified recommendation on its preference for one of them; b. It is the main counterpart of the External Auditor and the first recipient of the relevant reports, and is responsible, inter alia, for proposing the relevant remuneration and ensuring that the proper conditions for the provision of services are provided within the Company; c. It evaluates the External Auditor on an annual basis and proposes to the relevant governing body its dismissal or termination of the contract of services where there is a valid basis for said dismissal. In addition, the Statutory Independent Audit Board approved regulations for the provision of services by the External Auditors (“Regulations for the Provision of Services by Statutory Auditors”), which defines the rules applicable to services other than audit services ("Non- Audit Services") or related to audit ("Audit-Related Services") provided by the External Auditor to NOS and subsidiaries, included on the appropriate scope of consolidation, specifying the different audit services that cannot be carried out by the Statutory Auditor and the procedures to assure its independence. These Regulations for the Provision of Services shall apply to services provided by the External Auditor and related companies, and its latest version, approved on 24 February 2022 is available at https://www.nos.pt/content/dam/nos/institucional/inve stidores/investidores_en/governo-da- sociedade/regulamento-prestac%cc%a7a%cc%83o- servic%cc%a7os-roc-engvf.pdf Under the mentioned Regulations for the Provision of Services, hiring non-audit or audit-related services should be deemed as exceptions or complements, respectively, and in accordance with the rules laid down in those Regulations. The annual fees for non-audit services cannot exceed the amount corresponding to 70% of the average of the statutory audit fees of the last 3 financial years, provided to the Company and its subsidiaries, included in the consolidation perimeter using the full consolidation method. The provision of non-audit services by the Statutory Auditor/Statutory Auditing Firm requires the prior approval and authorisation of the Statutory Independent Audit Board, which adequately assesses the threats to independence arising from the provision of these services and the safeguarding measures applied in accordance with article 73 of Law no. 140/2015 of 7 September. For this purpose, the Statutory Independent Audit Board should receive a proposal regarding the provision of services to be submitted for approval and authorisation, as well as any additional information that may be deemed relevant, which shall comply with the following requirements: • Be clear about the services to be rendered and the fees that will be charged for them; • Include a declaration of conformity with the independence principles defined in article 2 of the Regulations for the Provision of Services; • Include reasoning for the provision of the services; • Include the initial date for the provision of services and its respective fees. As per the Regulations for the Provision of Services, if a member of the network of the Statutory Auditor/Statutory Auditing Firm who performs the statutory audit of the accounts of NOS or its subsidiaries, provides any prohibited non-audit services pursuant article 5(1) of Regulation (EU) no. 537/2014 of the European Parliament and of the Council of 16 April 2014, to an entity with offices in a third country that is controlled by NOS or its subsidiaries, the Statutory Auditor/Statutory Auditing Firm shall assess whether its independence is compromised by such service provision by the member of the network, in accordance with article 5(5) of the mentioned Regulation (EU) no. 537/2014. 38. Other duties of the supervisory body Under the terms of the Company’s Articles of Association and the relevant Regulations, and in addition to the above mentioned in item 34, it is to be noted that the Statutory Independent Audit Board: • Evaluates the functioning of the risk management system, the internal control system and the internal audit system and supervises their efficiency, proposing any adjustments that may be deemed necessary, as well as receiving the corresponding reports, ensuring that the risks effectively incurred by the Company are consistent with those objectives established by the Board of Directors or the Executive Committee; • Receives notification of irregularities and, with the support of the committees, commissions or other internal units or entities under their respective competences, promotes its record and processing, as well taking decisions within their competence in these issues, preparing a report annually on the activities performed under the Regulation on the Notification of Irregularities (Whistleblowing), the conclusions of which are informed to the Board of Directors; Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 374 • Issues a prior opinion on relevant business activities with shareholders of qualified holdings, or entities with whom they are in any relationship or other related parties; • Gives its opinion on the Company’s annual report and accounts, including its scope, preparation and disclosure, and also other financial information requiring the Statutory Independent Audit Board’s involvement pursuant to the law; • Informs the Board of Directors of the statutory audit results and explains the way it helped to assess the integrity of the preparation and disclosure of the financial information process, as well as the role which the Statutory Independent Audit Board played in such process; and • Whenever it deems appropriate, makes a decision, in advance and in good time, and gives a prior opinion on any reports, documents or information of a financial nature that may be evaluated by the Board of Directors and is to be disclosed to the market, notably the preliminary announcements of the quarterly accounts, or to be submitted by the Company to any competent supervisory authority. The Statutory Independent Audit Board also decides on strategic lines and risk policy established by the management body prior to its approval and also on work plans and the resources allocated to the internal control services, annually evaluating the compliance with the Company’s strategic plan and the budget and the risk management. The Statutory Independent Audit Board has mechanisms implemented that allow, periodically, monitoring and control (i) of the risk management model, (ii) of the liquidity and interest rate risk, (iii) of the current management of treasury operations and the accounting policies adopted by the Group, (iv) of the current main judicial and tax disputes and their possible accounting impact on the accounts, and (v) of the procedures of fraud and corruption management. The Statutory Independent Audit Board also promotes periodic meetings with the Statutory Auditor for the purposes of monitoring the latter’s work. IV. Statutory Auditor 39. Details of the statutory auditing firm and the partner that represents said auditor Pursuant to the Company’s Articles of Association, the Statutory Auditor or Statutory Auditing Firm, effective and alternate, is elected by the General Meeting acting on a proposal from the Statutory Independent Audit Board. On 31 December 2023, this governing body had the following composition: Effective Statutory Auditor ERNST & YOUNG AUDIT & ASSOCIADOS, SROC, S.A. (ROC No. 178), represented by Sandra e Sousa Amorim (ROC No. 1213) Alternate Statutory Auditor Pedro Jorge Pinto Monteiro da Silva e Paiva (ROC No. 1258) 40. State the number of years that the statutory auditor consecutively carries out duties with the company and/or group The Effective Statutory Auditor was elected for the first time on the 23 April 2014 General Meeting, and the Alternate at the General Meeting of 8 May 2019. 41. Other services provided to the Company The description of other services provided by the Statutory Auditor to the Company is in items 46 and 47 of this Report. V. External auditor 42. Details of the external auditor and the partner that represents said auditor On 31 December 2023, they were performing the audit functions provided in article 8 of the Portuguese Securities Code: Effective Statutory Auditor ERNST & YOUNG AUDIT & ASSOCIADOS, SROC, S.A. (ROC No. 178), represented by Sandra e Sousa Amorim (ROC No. 1213) Alternate Statutory Auditor Pedro Jorge Pinto Monteiro da Silva e Paiva (ROC No. 1258) 43. State the number of years that the external auditor and respective partner that represents said auditor in carrying out these duties consecutively carries out duties with the company and/or group Ernst & Young Audit & Associados, SROC, S.A. began their functions to the Company in March 2014, having consecutively served for approximately 10 years, reason why there will be an election of a new Statutory Auditor, effective and alternate, in the next Annual General Meeting of the Company. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 375 The effective statutory auditor, Sandra e Sousa Amorim, and the alternate, Pedro Paiva, serve for 6 and 4 years, respectively. 44. Rotation policy and schedule of the external auditor and the respective partner that represents said auditor in carrying out such duties Neither the Articles of Association nor the internal regulations set out the periodic rotation of the External Auditor. However, the rules provided for in the Statutory Audit Bar Statute (EOROC) are applicable to the Statutory Auditor (including the respective partner), i.e., the maximum period of performance of duties by the partner of the statutory auditing firm that acts as the external auditor is 7 years and the maximum period of performance of duties by the statutory auditing company is 10 years. 45. Details of the body responsible for assessing the external auditor and the regular intervals when said assessment is carried out The Statutory Independent Audit Board has the duty to evaluate the External Auditor on an annual basis and to propose to the relevant governing body its dismissal or termination of the contract of services where there is a valid basis for said dismissal. To that effect, the Statutory Independent Audit Board annually fills out an assessment questionnaire regarding the External Auditor, which addresses issues such as independence, internal control, meeting periodicity, and financial reporting. In addition, and to assist in the assessment, the Chief Financial Officer (CFO) in coordination with the Financial and Assurance Services and the External Auditor itself also fill out questionnaires. 46. Services, other than auditing, carried out by the external auditor for the company and/or companies in a control relationship and an indication of the internal procedures for approving the contracting of such services and a statement on the reasons for said contracting In 2023, the following non-audit services were hired by NOS or its subsidiaries: • Review of financial statements with a limited level of assurance, which includes, inter alia, limited reviews of quarterly, half-yearly or other period accounts; • Audit to the Social Responsibility and Sustainability Report; • Other certifications not required by law or by the Company’s Articles of Association. The provision of such services does not constitute a threat to the independence of the External Auditor nor does it fall within the prohibited services provided for in article 5(1) of Regulation (EU) no. 537/2014 of the European Parliament and of the Council of 16 April 2014 and, given the nature of the services concerned, there are efficiency gains which justify its provision by the External Auditor. 47. Details of the annual remuneration paid by the company and/or legal persons in a control or group relationship to the auditor and other natural or legal persons pertaining to the same network and the percentage breakdown relating to the following services In 2023, NOS Group (the Company and companies controlled by or in a group relationship with the Company) paid, as fees to NOS Statutory Auditor and External Auditor (Ernst & Young, S.A. (E&Y), and to its group of companies), the following amounts: By the Company 102 557 % Amount of the accounting services (€) 64 137 63 Amount of the reliability assurance services (€) 38 420 37 By entities that are included in the group 249 091 % Amount of the accounting services (€) 175 201 70 Amount of the reliability assurance services (€) 73 890 30 Total 351 647 % Amount of the accounting services (€) 239 337 68 Amount of the reliability assurance services (€) 112 310 32 *Including individual and consolidated statements During 2023, the non-audit services represented 40% of the average of the statutory audit fees of the last 3 financial years. The Statutory Independent Audit Board receives and reviews the information on the fees and services provided by the External Auditor on a quarterly basis. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 376 C. Internal Organisation I. Articles of association 48. The rules governing amendment to the Company’s articles of association Amendments to the Articles of Association, including those concerning share capital increases, always depend on shareholder’s resolutions, in which must be present or represented, in case of first call, at least 50% of the shareholders. Such resolutions are taken by the majority provided for by law, which consists of two thirds of the votes cast, except on a second call if the shareholders holding at least half of the share capital are present or represented, in which case these resolutions can be taken by a majority of the votes cast. II. Notification of irregularities 49. Notification means and policy of irregularities NOS has mechanisms for detecting and preventing irregularities comprised in the following policies: • The Code of Ethics https://www.nos.pt/content/dam/nos/institucional/i nvestidores/investidores_en/governo-da- sociedade/codigo-de-etica-geral-en-externa.pdf; • The Code of Conduct on the Prevention of Corruption and Related Offences https://www.nos.pt/content/dam/nos/institucional/i nvestidores/investidores_en/governo-da- sociedade/codigo-de-conduta-de-prevencao-de- corrupccao-e-infracoes-conexas-en.pdf; • The Regulation on the Notification of Irregularities (Whistleblowing) https://www.nos.pt/content/dam/nos/institucional/i nvestidores/investidores_en/governo-da- sociedade/Regulamento%20Comunicacao%20de%2 0Irregularidades_fev2022_EN.pdf • The Plan for the Prevention of Risks of Corruption and Related Offences https://www.nos.pt/content/dam/nos/institucional/i nvestidores/investidores_en/governo-da- sociedade/nos-plan-for-the-prevention-of- corruption-pub.pdf; • The internal control and risk management at NOS , described in further detail in items 50 and following of this Report. The mentioned Codes and Regulation are applicable to all members of the governing bodies and employees of NOS Group (Employees), as well as to all those who represent NOS (Partners), with the necessary adaptations, and to any person or entity providing services, temporarily or permanently, to the NOS Group (Suppliers). Any clarification related with the Codes or Regulation mentioned above can be sent, in writing, via email to duvidas.etica@nos.pt (the information exchanged under this scope shall be treated as confidential). Any evidence of irregularities should be reported in writing, marked as “confidential”, via letter to the postal address created exclusively for this purpose – Apartado 4035, Loja CTT Senhora da Hora, 4461-901, Senhora da Hora, or via email to comunicar.irregularidades@nos.pt, the chosen reporting method being at its author’s discretion. Any communication of Irregularities shall be treated as confidential, unless the author expressly and unequivocally requests otherwise. In any case, no reprisal or retaliation will be tolerated against those who, in good faith and on serious grounds, make the mentioned communications. The channels for receiving requests for clarifications or for reporting irregularities are published in NOS website, in Portuguese and in English, and are available 24/7, including to non-employees of the Company, in accordance with the applicable law. Communications are received, recorded, and processed by the independent Internal Audit and later forwarded to the Statutory Independent Audit Board or Ethics Committee, in accordance with the nature of the situation. All situations related with corruption or related offences are sent to the Statutory Independent Audit Board, an independent supervisory body. All other irregularities (such as improper behaviour situations or misuse of assets) are sent to the Ethics Committee, which include an independent member in its composition. Where it is necessary, external auditors or other experts can be hired to assist in the investigation, when the specific nature of the matters in question so justifies it. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 377 III. Internal Control and Risk Management 50. Individuals, bodies or committees responsible for the internal audit and/or implementation of the internal control systems The internal control and risk management system at NOS consists of various key parties with the following responsibilities and goals: BODY / COMMITTEE / AREA RESPONSIBILITIES Board of Directors l Define and approve the strategy and main policies of NOS, including the Risk Management Policy l Decide on the matters which are to be deemed as strategic in view of their amount, risk or special characteristics l Supervise the internal control and risk management system within NOS, and delegate its creation and operation to the Executive Committee Executive Committee l Create and ensure the functioning of the NOS internal control and risk management system, using the powers delegated by the Board of Directors l Discuss and approve the risk assumption objectives, including risk acceptance levels, approve the NOS strategic plans and risk management policies in order to ensure that the risks effectively incurred are consistent with those objectives, and respect the strategies and policies established by the Board of Directors l Make proposals to the Board of Directors on matters pertaining to NOS internal control and risk management which are considered strategic Audit and Finance Committee (internal committee of the Board of Directors) lAs a specialised committee, advise the Board of Directors on certain matters, including those relating to the functions of th e External Audit, Internal Audit, and Risk and Compliance, reinforcing, in a complementary manner, the monitoring of these matters which are carried out by the Statutory Independent Audit Board Statutory Independent Audit Board (independent body, legally competent, for the supervision of the Company) l Evaluate the efficiency of the functioning of the internal control and risk management systems and the internal audit system as the independent supervisory body with legal and statutory responsibility for these matters l Give an opinion on the work plan and the resources allocated to the internal Audit services l Serve as the main spokesperson for the External Audit, be the first recipient of their reports, and be responsible for proposing remuneration and ensuring that suitable conditions exist w ithin NOS for the performance of these External Audit services l Annually assess the E xternal Audit and propose their dismissal or the termination of their service provision agreement to the competent body, whenever justified grounds exist for this purpose l Prior to its final approval by the Board of Directors, pronounce itself on the strategic lines and the Risk Management Policy l Assess the degree of internal compliance and the performance of the risk management system, in particular as the recipient of: (i) the reports on the External Audit's assessment of the internal control system an d (ii) the annual report on the Internal Control Manual prepared by the Risk and Compliance area l Receive, record and process the communications of Irregularities and decide within their competence on these matters, supported by the Internal Audit, as well as with the support of the committees, commissions or other NOS internal or external units or entities within their competence l Assess and give an opinion as an independent supervisory body on themes of ethics and prevention of corruption External Audit (Statutory Auditor) l Check the effectiveness and functioning of internal control mechanisms and report the weaknesses identified to the Statutory Independent Audit Board l Audit the Company's accounts, issue the corresponding legal certification for the accounts and an audit report, as part of its public interest functions Internal Audit l Assess risk exposure and check the effectiveness of risk management, of the internal controls of business processes, and information and telecommunications systems, including risks related with ethics and prevention of corruption l Propose measures to improve internal controls, to achieve a more effective management of business and technological risks l Monitor changes in risk exposure associated with the main findings and nonconformities identified in the audits and report to the Statutory Independent Audit Board regarding these matters l Analyse, audit and investigate indications of Irregularities related with ethics and prevention of corruption, sent through the established complaints channels or whenever requested, within the respective competence of these bodies, by the Statutory Independent Audit Board or by the Ethics Committee Risk and Compliance l Promote awareness, measurement and management of business risks that interfere with the achievement of objectives and the creation of value for NOS l Contribute with tools, methodologies, support and know-how for the different areas l Promote and monitor the implementation of programmes, projects and actions designed to bring risk levels closer to the acceptable limits established by the Company's management l Assist NOS Chief Compliance Officer (CCO) during the exercise of its duties as the one responsible for the adoption and implementation of the Code of Conduct on Prevention of Corruption and Related Offences and the compliance programs arising therein Risk Committees (specialised committees) l Analyse and pronounce itself on specific risk matters. NOS has the following Risk Committees, which are specialised bodies composed by experts in those subjects: the Ethics Committee for Ethics risks, the Sustainability Forum for ESG risks, the IMS Forum for Quality, Environment and OHS risks, the Diversity and Inclusion Committee for Diversity and Equal Opportunities risks and the S&P Committee for Security & Privacy risks l Regularly report to the management, counting on the participation or sponsorship of members of the Executive Committee or non- executive directors that ensure the coordination of these matters with the management Business unit areas l Implement the internal controls and risk management specific to each area of the NOS business units, as part of their responsibility in the corporate or functional processes l Participate in working teams or specific risk management teams, necessary for the development of certain risk management programmes. Those areas can still be a part of the specialised Risk Committees, being represented by Directors and/or by Pivots/Champions in key business areas in the risk matters in question Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 378 51. Organisational structure, of hierarchical and/or functional dependency in relation to other bodies or committees of the company The organisational structural, of hierarchical and/or functional dependency of the areas of Internal Audit and of Risk and Compliance in relation to other bodies, committees or commissions of the Company are as follows: The areas of Internal Audit and of Risk and Compliance report hierarchically to the NOS Executive Committee: • In accordance with the provisions on the Internal Audit Charter, the Internal Audit is an independent and objective activity, and shall be free from interference from any person or body of the organisation. • The Chief Audit Executive (CAE) reports to NOS Executive Committee, namely to the CCO – Chief Compliance Officer, and combines the responsibility of being Chief Risk Officer (CRO) due to not having responsibilities or authority over the operations or assets of the organisation, being independent from the business areas. The synergy arising from combining these Audit, Risk and Compliance responsibilities contributes to a more effective management of NOS business risks. The areas of Internal Audit and of Risk and Compliance functionally report to the NOS Statutory Independent Audit Board , as an independent supervisory body with legal and statutory responsibility for assessing the efficiency of the functioning of the internal audit and of the internal control and risk management systems: • The Statutory Independent Audit Board receives the reports and must give an opinion on the work plan and resources allocated to the Internal Audit services, proposing the necessary adjustments. • The Statutory Independent Audit Board shall evaluate the degree of internal compliance and the performance of the risk management system, in particular by receiving the reports on the External Audit assessment of the internal control system. • The Statutory Independent Audit Board also receives the annual report on the Internal Control Manual (including indicators on effectiveness, coverage, etc.), prepared by the area of Risk and Compliance. • The Statutory Independent Audit Board also receives other reports that may be deemed relevant, in matters such as identification or settlement of conflicts of interest and detection of possible irregularities, made by the area of Internal Audit. • From the assessments and reports previously mentioned, the Audit, Risk and Compliance functions or other organisation areas, as applicable, may need to adjust the internal control and risk management systems to be implemented by the management bodies or other bodies. The area of Internal Audit supports the Statutory Independent Audit Board in the reception, recording and processing of communication of Irregularities received by NOS, in line with the provisions in the Regulation on the Notification of Irregularities (Whistleblowing). The area of Internal Audit secretaries the NOS Ethics Committee , in its capacity as the committee responsible for overseeing and maintaining the Code of Ethics and for monitoring its implementation. The areas of Internal Audit and of Risk and Compliance also report functionally to the NOS Audit and Finance Committee , as the specialised committee that advises the Board of Directors on certain matters, including those concerning the Internal Audit and the Risk and Compliance functions, thus reinforcing, complementarily, the supervision of these matters already carried out by the Statutory Independent Audit Board. The area of Risk and Compliance coordinates the NOS Security & Privacy Committee , via the central team for Security & Privacy, as the team responsible for supporting the organisation areas coordinating the Security, Privacy and Continuity programmes. The area of Risk and Compliance coordinates the NOS IMS Forum, via the Corporate Compliance and Monitoring team, as the team responsible for ensuring the management of the Integrated Management System (IMS) Coordination Committee which facilitates the sharing of issues related to Quality, Environment and OSH risks. Regarding the manner in which the Company organises its specialised Risk Committees : • Risk Committees are specialised bodies that analyse and pronounce themselves on specific risk matters. • The Company has the following specialised Risk Committees: the Ethics Committee for Ethics risks, the Sustainability Forum for ESG risks, the IMS Forum for Quality, Environment and OHS risks, the Diversity and Inclusion Committee for Diversity and Equal Opportunities risks, and the S&P Committee for Security & Privacy risks. • The Risk Committees are composed by experts in the respective risk subjects, and can include Directors and/or Pivots/Champions who represent key business areas in the risk matters in question. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 379 • The Risk Committees rely on the participation or sponsorship of members of the Executive Committee or non-executive directors that ensure the coordination of these matters with the management. • Risk matters are reported to the management body. • In addition, risk matters are reported to the independent supervisory body, the Statutory Independent Audit Board, as well as to the advisory body of the Board of Directors on these matters, which is the Audit and Finance Committee. With regards to the internal control and risk management system monitoring at NOS, it is also important to highlight the way in which the Board of Directors intervenes in the establishment of risk assumption objectives and its fulfilment as a management body: • The Board of Directors discusses and approves the Risk Management Policy proposed by the Executive Committee. Prior to its final approval by the Board of Directors, the Statutory Independent Audit Board assesses and pronounces itself on this policy. • The Board of Directors discusses and approves the Company’s strategic plans proposed by the Executive Committee and these plans do not exceed the risk assumption limits. • The Executive Committee ensures the functioning of the organisation's internal control and risk management system, using the powers delegated by the Board of Directors. • In any case, the responsibility to decide on matters which should be regarded as strategic by virtue of their value, risk or particular characteristics is still of the Board of Directors (not delegated in the Executive Committee). • The Board of Directors receives the relevant reports arising from the Risk Assessments from the Executive Committee, this being a periodic control mechanism to ensure that the risks effectively incurred by the Company are consistent with those objectives established by the Board of Directors as a management body. The remaining responsibilities in the creation, functioning and periodic assessment of the internal control and risk management system are set out in the Regulations of the respective Company’s bodies or committees. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 380 52. Other functional areas responsible for risk control In addition to the areas referred to in the preceding sections, the Company has other functional areas with competence in internal control and risk management that make a decisive contribution to maintaining and improving the control environment. Particularly notable in this context are the following business areas and processes: • The areas of Planning and Control , in coordination with the corresponding pivots in the areas of business, are responsible for monitoring the implementation of annual Action and Resource Plans (as part of NOS strategic plans) and the correspondent budgets and forecasts, in the financial and operational components; • The area of Investor Relations & Sustainability is responsible for coordinating the management of the corporate sustainability strategy with the various areas that NOS has, which ensure its operational implementation, as well as it monitors the strategy’s implementation through the compilation of internal and external Key Performance Indicators on the NOS social and environmental sustainability performance (ESG Scorecard). The area of Investor Relations & Sustainability is also responsible for coordinating the Sustainability Forum , which includes the members of the Executive Committee and Directors and/or representatives of the areas with the most impact on the ESG strategy and performance, and which works as a support platform of the knowledge on ESG topics for the members of the management bodies. The Corporate Governance and Sustainability Committee is responsible for ensuring the supervision of environmental, social, and corporate governance risks and the creation of mitigation and resolution mechanisms for possible controversial situations associated with those. This Committee, in cooperation with the Sustainability Forum , monitors the main developments in matters of environmental and social sustainability. In this context, the Company adopts procedures to collect and process data related to environmental and social sustainability in order to notify the management body on the respective risks and propose strategies to mitigate them; • The Financial and Assurance Services areas have a central responsibility in managing the risks relating to financial information , as described elsewhere in this Report; • The Legal and Regulatory areas must keep abreast of changes in the applicable regulatory and legal framework and the corresponding risks, given the threats and opportunities they represent for the NOS competitive position; • The Risk Assurance (usage, subscription fraud, consumption, content control, etc.), Network and Service Supervision (network and service availability, interruption incident management, etc.), and Cybersecurity (monitoring of threats to cyber vulnerability, cyber incident management, etc.) teams monitor specific risks of the NOS activity; • The technological areas , including Networks , Information Systems and Cybersecurity have indicators and alerts supporting the management of security incidents and service interruption risks at the operational level; • The area of Market & Customer Intelligence , together with other business unit areas, uses Advanced Analytics techniques integrating Artificial Intelligence mechanisms, mainly in the massive data processing for clients’ experience and operational improvement themes . This type of information is one of the several inputs for the decision-making process on the business and operations. Regarding the corporate bodies, they do not make any automated decisions, nor do they make decisions solely based on Artificial Intelligence mechanisms. The area of Market & Customer Intelligence, namely via the CoE of Advanced Analytics under its scope of action, also provides specialised counselling and specialised know- how to the various unit areas on good practices for the implementation and operation of Artificial Intelligence / Advanced Analytics mechanisms; • The various business unit areas incorporate the risks and opportunities related with climate change in the decision-making processes. Climate change is part of one of the four Cornerstones of the NOS Sustainability Strategy: “On Behalf of the Planet”. Throughout the several sections of the Integrated Management Report, NOS presents the manner in which risks and opportunities associated to climate change are equated into the organisation’s decision-making processes, including the manner in which these are integrated in the Sustainability’s goals and strategy and in the global goals and strategy of NOS (for example, see section 1.4. “Our Model of Value Creation” and section 2.3.5. “Risk Management”); • The various areas of the organisation and individual employees are required to comply with the procedures set out in the Internal Control Manual , ensuring that all acts or transactions engaged in are appropriate and properly evidenced; • The various areas of the organisation have internal controls that ensure not only the commitment of the areas towards risk management and internal control, but also permanent monitoring of the effectiveness and adequacy of these controls, as well as processes and indicators to monitor operations and Key Performance Indicators. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 381 53. Details and description of the major economic, financial and legal risks to which the company is exposed in pursuing its business activity The Company is exposed to economic, financial and legal risks arising from its business activities. In section 2.3.5. “Risk Management” of the Integrated Management Report, the main types of risks to which NOS is exposed when pursuing its business activity are detailed and described. The selection process of relevant risks can be found in the mentioned section, including the identification, description and assessment of the risks, and also their main strategies and actions for managing and mitigating, and follow-up and monitoring the risks. 54. Description of the procedure for identification, assessment, monitoring, control and risk management NOS has a Risk Management Policy that defines the methodologies, the entities involved and their responsibilities (available at https://www.nos.pt/content/dam/nos/institucional/inv estidores/investidores_en/governo-da-sociedade/nos- politica-de-gesta%cc%83o-de-risco-dez-2019-eng.pdf) particularly here sections “3.1.1. Risk management methodologies” and following. The methodologies adopted for risk management and internal control take into account the references provided by the bodies responsible for promoting control mechanisms in the markets, including the aforementioned principles and recommendations of the IPCG’s Corporate Governance Code . The methodologies also consider the applicable legal and regulatory requirements . In addition, for internal control aspects relating to ICT (Information and Communication Technologies) frameworks such as COBIT (Control Objectives for Information and related Technology) are considered. The risk management and internal control processes at NOS shall be supported by a consistent and systematic methodology, based on international reference standards such as the Enterprise Risk Management - Integrated Framework , issued by COSO (Committee of Sponsoring Organisations of the Treadway Commission). Taking into consideration these reference methodologies, the management and control of risks are achieved using the main approaches and methods presented below: CORPORATE RISK MANAGEMENT ENTERPRISE RISK MANAGEMENT (ERM) Approach : This aims at aligning the risk management cycle with the NOS strategic planning cycle. It allows NOS businesses to prioritise and identify critical risks that may compromise their performance and objectives and take action to manage those risks. The approach provides for periodic risk monitoring and implementation of certain corrective actions. Method: 1. Identify and evaluate risks that impact the business >>2. Explore risks and their causes >>3 . Measure risks using indicators >> 4. Manage risk through actions >> 5 . Monitor risks. CONTINUOUS MONITORING OD RISKS AND CONTROLS CONTINUOUS MONITORING (CM) Approach : This allows the continuous review of business processes, ensuring in a preventive, proactive and dynamic way the maintenance of an acceptable level of risk and control. The internal control manual systematises and references the controls, facilitating their dissemination and promoting their compliance by the various stakeholders of NOS. Method: 1. Define processes, business cycles and data structure >> 2. Establish control design >> 3. Implement, disseminate and ensure the effectiveness of controls >> 4. Analyse and report status metrics of control implementation >> 5. Monitor action plans and update controls. The approach adopted by NOS for Enterprise Risk Management (ERM), is to incorporate risk management into NOS strategic planning activities. During the preparation of annual Action and Resources Plans, as part of the Strategic Plans, the business areas consider risks that may compromise their performance and objectives and define actions to manage those risks, within the levels of acceptance intended and established by the management bodies. The plans are discussed and approved by the Executive Committee, following the strategies and policies established by the Board of Directors. The risk assessment exercises are approved by the Executive Committee and are subjected to a final approval by the Board of Directors, being monitored by the Statutory Independent Audit Board and by the Audit and Finance Committee, so they can assess and pronounce themselves prior to its final approval, within the scope of their respective powers in the supervision of the internal control and risk management system of the organisation. Following the mentioned risk assessment exercises and the possibility of changes to the risks, the managemenet bodies, the Audit, Risk and Compliance functions or other areas of the organization, as applicable, may need to adjust the internal control and risk management systems. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 382 55. Core details on the internal control and risk management systems implemented in the Company regarding the procedure for reporting financial information NOS is potentially exposed to risks related to accounting and financial reporting processes. The Company ensures the quality and improvement of the most relevant processes for preparing and disclosing financial statements, in accordance with the accounting principles adopted and bearing in mind the objectives of transparency, consistency, simplicity, and materiality. In this context, the Company’s attitude to financial risk management has been conservative and prudent. The main elements of the risk management and internal control systems related to financial information are described in section “3.1.4. Risk management and Financial Information controls” of the NOS Risk Management Policy . The functional responsibilities for financial statements at the corporate level of NOS and in the Group are distributed as follows: • The Entity Level Controls are defined in corporate terms, are applicable to all the group companies, and aim at establishing internal control guidelines for NOS subsidiaries; • Process Level Controls and IS/IT Controls are defined in corporate terms and applied to NOS subsidiaries, adapted to their specific characteristics, organisation and responsibility for processes; • Given this breakdown, controls relating to the collection of the information that serves as a basis for the preparation of the financial statements are generally located in the departments of each of the subsidiaries ; controls related to the processing, registration and accounting archive of this information are located, at corporate level, in the Financial and Assurance Services Department . The internal control and risk management system associated with financial statements includes several key controls , in which it is included the following: • The process of disclosure of financial information is institutionalised, the criteria for preparation and disclosure have been duly approved, are fully established and periodically reviewed; • The use of accounting principles, explained in the Annexes to the Financial Statements notably on the section regarding “Accountancy Policies”, is one of the key pillars of the control system; • The controls are aggregated by the business cycles that give rise to the financial statements and by the corresponding classes and subclasses of transactions. The Financial and Assurance Services Department must, for the most significant situations, prepare a set of documents on the policies and procedures implemented and how they relate to the IFRS (International Financial Reporting Standards) , as well as addressing potential sources of risk that may materially affect accounting and financial reporting. Among these potential sources of risk , we would like to highlight the following: • Accounting estimates – The most significant accounting estimates are described in the Annexes to the Financial Statements. The estimates were based on the best information available during the preparation of the financial statements and on the best understanding and best experience of past and/or present events; • Balances and transactions with related parties – The most significant balances and transactions with related parties are disclosed in the Annexes to the financial statements. For certain transactions with related parties there are value thresholds (disclosed in the Corporate Governance Report) above which the prior opinion of the Statutory Independent Audit Board must be requested. NOS adopts various measures to help manage risks and to maintain a robust internal control environment, including initiatives of the following type: • Conformity tests – These include periodical control self-assessment of the internal control system and the consequent revision of the Internal Control Manual, ensuring that it is always up to date. Corrective action is also included on control procedures considered to be non-compliant as a result of the compliance assessment work carried out by the Internal Audit and External Audit; • Review and improvement of design of controls – These include the review of the procedures of control and the strengthening of business cycles and financial flows with levels of relevant materiality, to improve the control environment and the control and perception of current risks (operational and financial). This reinforcement includes the creation of an aggregating vision of the life cycles of the assets or the associated financial flows, as well as the respective processes and systems that support them. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 383 • In addition to the financial risks referred to in the section on the main types of risks with an impact on the business, the Company is potentially exposed to other financial risks that may have an impact on the financial statements, such as credit risk (related to balances receivable), liquidity risk (related to sufficient assets to cover liabilities), market risk (related to exchange rate variations), interest rate risk (related with the fluctuation of the interest rate and dependant on the variable or fixed rate) and capital risk (related to financial loans and the remuneration of shareholders). • In the Annexes to the Financial Statements, namely in the “Risk Management” section, more specific information can be found on financial risk management policies, as well as on how risks associated with the financial statements are managed and controlled. IV. Investor Relations 56. Department responsible for investor assistance The Investor Relations & Sustainability Department aims at ensuring the proper relationships with shareholders, investors and analysts, under the principle of equal treatment, as well as with the financial markets in general and, in particular, with Euronext Lisbon and with CMVM. The Investor Relations & Sustainability Department, delegated by the Executive Committee is also in charge with the responsibility of implementing the NOS Sustainability Strategy, ensuring the respective daily management and coordination with the various Departments and business areas. Sustainability has a strategic importance for NOS, which seeks to highlight itself as a reference for good practices among national and international peers. The Investor Relations and Sustainability Department seeks to actively contribute to the communication and strengthening of the sustainability performance by NOS in the capital market, not only to ensure access to sustainable financing and investment models, but also to leverage the ESG (Environmental, Social and Governance) independent evaluation and public recognition, reinforcing NOS reputation before all of the stakeholders. This Department is responsible for: • Each year, publishing the integrated management report and accounts, also publishing annual, half- yearly, and quarterly privileged information and shareholders and remaining stakeholders can access this information, both in Portuguese and English, on the Company’s website (www.nos.pt/ir); • Providing regular press releases, presentations, and announcements on the quarterly, half-yearly and annual results, as well as on any relevant facts that occur; • Providing full explanations to the financial community in general – shareholders, investors (institutional and private) and analysts –, also assisting and supporting shareholders in the exercise of their rights; • Organising regular meetings between the executive management team and the Department itself with the financial community through attendance at specialised conferences and by holding roadshows both in Portugal and in the main international financial markets and frequently meeting with investors who are visiting Portugal; • Coordinating the establishment, implementation and management of the sustainability strategy with the various Departments and business areas; • Monitoring the implementation of the sustainability strategy in cooperation with the owners of the different initiatives through an ESG Scorecard, with KPIs associated with the performance and milestones achieved. This tool allows the regular registration and communication of the strategy implementation with the Executive Committee and the Board of Directors of NOS; • Quarterly, promoting the Sustainability Forum, with the main goal of promoting information and experience exchange of the initiatives associated with the implementation of the sustainability strategy. The Forum has members of the Executive Committee and Directors and/or representatives of the areas with the most impact on the ESG strategy and performance; • Collecting information and supporting the Corporate Governance and Sustainability Committee in its functions of supervising business activities in matters of corporate governance, rules of conduct, and environmental and social sustainability. In 2023, the main capital market events in which the Investor Relations and Sustainability Department participated were: Date Event 01/02 Feb Santander Iberian Conference 15 Mar Citi’s TMT Conference 15 May JPMorgan’s European TMT Conference 05/06 Sep Deutsche Bank European TMT Conference 15/16 Nov Morgan Stanley TMT Conference Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 384 Information requests can be sent to the Investor Relations and Sustainability Department, through the following contacts: Rua Actor António Silva, n.º 9 1600-404 Lisbon (Portugal) Tel. +(351) 21 782 47 25 Fax: +(351) 21 782 47 35 Email: ir@nos.pt 57. Market relations representative NOS representative for market relations is Maria João Carrapato, Investor Relations and Sustainability Director. 58. Data on the extent and deadline for replying to the requests for information received throughout the year or pending from preceding years NOS has a record of all enquiries and their processing, all of which have been immediately or dealt with within the maximum period of 24 business hours. It is to be noted that, as at 31 December 2023, there were no enquiries unanswered. V. Website 59. Address NOS offers all legal, financial, and governance information on its website www.nos.pt. 60. Place where information referred to in article 171 of the Portuguese Companies Code is available Information related to article 171 of the CSC can be found in the “Legal Identification” tab of NOS website https://www.nos.pt/en/institutional/investors/corporat e-governance?accordionid=ui-id-25 61. Place where the articles of association and regulations on the functioning of the bodies and/or committees are available Articles of Association of the Company https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/estatutos-nos-sgps- eng-abril-2022.pdf Regulations of the Board of Directors https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/regulamento-ca- maio2022-en.pdf Regulations of the Statutory Independent Audit Board https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/regulamento-cf-fev- 2022-en.pdf Composition, Operation and Delegation of Management Powers of the Executive Committee https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/deleg-ce-2022- en.pdf Regulations of the Corporate Governance and Sustainability Committee https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/regulamento-cgs-s- maio2022-en.pdf Regulations of the Audit and Finance Committee https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/regulamento-caf- maio2022-en.pdf Regulations of the Appointments and Assessments Committee https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/regulamento-da- cna-maio2022-en.pdf Ethics Committee Regulations https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/regulamento-cde- fev2022-en.pdf Regulations on Transactions with Related Parties https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da- sociedade/Regulamento%20Transacoes%20com%20Partes% 20Relacionadas%202022_EN.pdf Remuneration Committee Regulations https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da- sociedade/Regulamento_Comissao_de%20Vencimentos_2023 0306_EN.pdf Regulations for the Provision of Services by Statutory Auditors https://www.nos.pt/content/dam/nos/institucional/investidor es/investidores_en/governo-da-sociedade/regulamento- prestac%cc%a7a%cc%83o-servic%cc%a7os-roc-engvf.pdf Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 385 62. Place where information is available on the names of the governing bodies’ members, the market relations representative, the investor assistance office or comparable structure, respective functions and contact details The identity of the members of the NOS governing bodies are in the “Board of Directors”, “Executive Committee”, “Remuneration Committee”, “Board of the General Meeting”, “Statutory Independent Audit Board”, and “Statutory Auditor” tabs at the website https://www.nos.pt/institucional/EN/investors/corpora te-governance/Pages/default.aspx The market relations representative, as well as the investor assistance office contacts or comparable structure, functions and contact details are available at https://www.nos.pt/en/institutional/investors/investor s-contacts 63. Place where the documents are available and relate to financial statements reporting, which should be accessible for at least 5 years and the half-yearly calendar on corporate events that is published at the beginning of every six months, including, inter alia, general meetings, disclosure of annual, half-yearly and where applicable, quarterly financial statements The financial statements, as well as the calendar on corporate events, can be found at NOS website at https://www.nos.pt/en/institutional/investors/results- and-presentations/results https://www.nos.pt/en/institutional/investors/results- and-presentations/investors-calendar 64. Place where the notice convening the general meeting and all the preparatory and subsequent information related thereto is disclosed The notice convening the General Meeting and all the preparatory and subsequent information related thereto is disclosed at the website https://www.nos.pt/en/institutional/investors/general- meeting 65. Place where the historical archive on the resolutions passed at the company's general meetings, share capital and voting results relating to the preceding 3 years are available The historical archive on the resolutions passed at the Company’s general meetings, share capital and voting results are available at NOS website https://www.nos.pt/institucional/EN/general- meeting/notices/Pages/archive.aspx Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 386 D. Remuneration I. The power to establish 66. Respective details The Remuneration Committee has the power to, namely, set the remuneration of the members of the Board of the General Meeting, of the Board of Directors (including the Executive Committee), and of the Statutory Independent Audit Board, with the members of these two latter bodies corresponding to managers (‘ dirigentes ’) of NOS. II. Remuneration Committee 67. Composition of the Remuneration Committee The Remuneration Committee is composed by 2 members, independent from the Company’s management and appointed in the General Meeting. This Committee monitors and assesses, on an ongoing basis and with the support of the Appointments and Assessments Committee, the performance of the directors, measuring if the objectives were achieved, and meets whenever necessary. On 31 December 2023, the Remuneration Committee had the following composition: Chairman João Nonell Günther Amaral Member Mário Filipe Moreira Leite da Silva In 2023, the Committee met 2 times, having decided on the changes to the Remuneration Policy presented to the General Meeting of 5 April 2023, on the achievement of KPIs by the Company in 2022, on the definition of KPIs and respective objective values for 2023, on the variable remuneration policy applicable to executive members of the Board of Directors, as well as the Remuneration Committee Regulations. From these meetings, the respective minutes were drawn up. During 2023, the Remuneration Committee did not hire any advisory services through the Company itself or through others that are in a domain or group relationship to help comply with their mission, without prejudice to doing so, freely, whenever it deems necessary or convenient to carry out its duties, since the Company provides to the members of the Remuneration Committee permanent access, at the Company’s expense, to external advisors specialised in various areas, whenever the Committee needs it. Those external advisors shall be chosen by the Remuneration Committee, which ensures such services are provided Independently by advisors who do not provide services to the Company or to other Group companies. The composition, operation and powers of the Remuneration Committee are established in its Regulations, approved on 6 March 2023, which is available at https://www.nos.pt/content/dam/nos/institucional/inv estidores/investidores_en/governo-da- sociedade/Regulamento_Comissao_de%20Vencimento s_20230306_EN.pdf 68. Knowledge and experience by members The members of the Remuneration Committee hold a vast and recognised management experience, namely in listed companies, having the necessary knowledge to handle and decide on all matters of their expertise, including remuneration policy. The functions performed by the members, as well as their academic and professional qualifications and professional activities, are in the Annex to this Report. III. Remuneration Structure 69. Description of the remuneration policy In the NOS General Meeting on 21 April 2021, where the Remuneration Committee was present in order to provide information or clarifications to shareholders, the proposal made by the Remuneration Committee on the remuneration policy for NOS management and supervisory bodies was approved by a majority of 97.20% of the votes of the shareholders present, which is available at https://www.nos.pt/institucional/EN/general- meeting/Documents/Proposta_Ponto_4_ENG_2021.pdf Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 387 In the NOS General Meeting on 05 April 2023, where the Remuneration Committee was also present in order to provide information or clarifications to shareholders, an amendment proposal made by the Remuneration Committee on the remuneration policy for NOS management and supervisory bodies was approved by a majority of 86.3267% of the votes of the shareholders present, which is available at https://www.nos.pt/content/dam/nos/institucional/inv estidores/investidores_en/governo-da- sociedade/Proposta%20Ponto%204_ENG.pdf NOS remuneration policy is based on the following principles: • Remuneration within governing bodies takes into consideration, amongst other factors, the professional profile of the individual member, the nature of the duties to be performed, competencies of the governing body and the individual, as well as performance, both on an individual and corporate level; • Remuneration within governing bodies shall appropriately take into account the Company’s structure, size, financial position and the complexity of the challenges it faces; • Remuneration of the members of the governing bodies shall follow a model comprising a fixed component, applicable to the members of all governing bodies, and a variable component, applicable only to executive directors; • Remuneration within governing bodies, in particular that of executive directors, shall take into account the employment terms and remuneration of full-time (or equivalent) employees throughout the Company. This is to ensure that there is consistency and equity relating to remuneration, in terms of respective qualifications, responsibilities, experience and any specific risk associated with the function; • The balance of fixed and variable components of executive directors’ remuneration shall be aligned with long-term corporate objectives of the Company; • The variable remuneration shall be capped, and include a component that rewards directors for both their individual performance and that of the Company. It will also include a long-term component that reinforces the bond between executive directors and the Company, by aligning their interests with those of the shareholders and emphasising the importance of their performance to the overall success of the Company; • Non provision of any type of instrument aimed at mitigating the risk inherent in the variability of the variable component of remuneration for the executive members of the Board of Directors; • Benchmarking against those applied by comparable companies in the global market, to guarantee alignment with market recommendations and best practices; • Clarity and transparency, namely through its publication on the Company's website. Under the NOS remuneration policy: • The non-executive members of the Board of Directors, as they are not responsible for carrying out the defined strategies in a daily basis, only receive a fixed component of remuneration; • The members of the Statutory Independent Audit Board only receive a fixed component of remuneration; • The Statutory Auditor is remunerated under the terms established in the contract, in accordance with the law; • The executive directors’ total remuneration includes a fixed component, serving as the “base” remuneration, and a variable component (profit sharing and/or allocation of shares). The profit sharing can be proposed to shareholders by the Board of Directors. After assessment of the total amount to be distributed, the amount to be received by each member will also depend on alignment with the results. The Share Allocation Plan (NOS Plan), applicable to executive directors approved at the General Meeting aims to (i) ensure the alignment of individual interests with company goals and NOS’ shareholders’ interests, awarding goal achievement, which foresees sustainable value creation, as well as (ii) the strengthening of loyalty mechanisms. NOS remuneration policy does not provide any adjustment mechanisms (clawback or malus ). During 2023, the NOS remuneration policy in force was strictly complied with, without any deviation or exemption. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 388 70. Remuneration structure and alignment of interests In proportion, the annual remuneration of the executive directors in 2023 was the following: STVR corresponds to Short-Term Variable Remuneration and MTVR corresponds to Medium-Term Variable Remuneration Complying with the NOS remuneration policy principles, the total variable remuneration of the executive directors is calculated using an individual performance qualifier indicator, with a 30% weight, and the NOS performance, measured through (collective) business indicators – Key Performance Indicators (KPI) – previously established, with a 70% weight, which in 2023 corresponded to the following: 1. EBITDA; 2. Consolidated operational Free Cash Flow; 3. Consolidated business volume; and 4. Net Promoter Score (NPS). The NOS remuneration policy structure is based on a model in which initiative and competence are considered essential foundations for good performance, and that it should be aligned with a sustainable strategy considering the medium- and long-term interests of the Company, and those of its stakeholders. It also discourages risk behaviours, to the extent that it is related with performance assessment. Additionally, the implementation and execution of the Strategic Plan approved by the Board of Directors is integrated in the evaluation of the executive directors, including goals related with ESG, in its ethic, social, environmental, and governance aspects, strategic factors considered to be inseparable from the development of the organisation and the business. 71. Variable component and performance The variable remuneration of the executive directors comprises: 1. Profit Sharing or Short-Term Variable Bonus (STVR) This component is equivalent to 50% of the total variable bonus and is paid in cash in the 1 st semester following the year to which it relates. After assessing the total amount of profits to be distributed (in line with the overall results of the Company), the Remuneration Committee, in coordination with the Appointments and Assessments Committee, defines the amount to be received by each member. The STVR aims to establish a link between the total amount of bonus awarded and performance, on an individual and a collective level. This component may only be proposed for approval by the General Meeting if the Company's financial year results so permit it. Since the criteria for awarding variable remuneration are linked to the Company’s performance, in this way compliance with those criteria can be ensured. 2. NOS Plan or Medium-Term Variable Bonus (MTVR) This component is equivalent to 50% of the total variable bonus and is allocated in the 1 st semester following the year to which it relates, after approval by the Remuneration Committee. The aim of this bonus is to ensure the alignment of individual interests with company goals and NOS’ shareholder interests, awarding goal achievement, which foresees sustainable value creation. The remuneration awarded in 2023 through the NOS Plan was deferred over a period of 3 years, making the transformation of rights awarded under the NOS Plan in 2023 conditional upon positive Company results, which requires compliance with the following additional condition: The consolidated net situation in the year n+3 , excluding any extraordinary movements occurred after the end of year n, and discounting an amount for each financial year correspondent to a pay-out of 40% on the net profit in the consolidated accounts of each year of the deferral period (irrespectively of the effective pay out), must be higher than the one calculated found at the end of financial year n . Extraordinary movements, in the period between year n and n+3 , include capital increases, purchase or sale of own shares, extraordinary dividends, annual pay-out other than 40% of the consolidated profit of the respective business year or other movements that affect the net situation but do not arise from the Company’s operating profits. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 389 The net position of the year n+3 should be determined based on the accounting rules used in year n, to ensure comparability. The value of the variable components (including the NOS Plan), when the allocation is decided by the Remuneration Committee, has no minimum limit and is limited to a maximum amount of 120% with regard to the fixed remuneration. There are no contracts with guaranteed minimums for the variable remuneration, regardless of the Company’s performance, nor are there any contracts to mitigate the inherent risk of the variable remuneration. 72. Deferral of the payment of the variable remuneration See item 71 above. 73. Allocation of variable remuneration on shares See item 71 above. There are no hedging or risk transfer contracts concerning a predefined amount of the total annual remuneration of the executive directors. Consequently, the risk underlying the corresponding variability of the remuneration is not mitigated. 74. Allocation of variable remuneration in options No remunerations based in options are implemented for directors. 75. Annual bonuses and other non-financial benefits In 2023, no non-financial benefits were given, with the exception of health insurance and life insurance and personal accidents awarded to the executive directors, in line with the general policy of the Group applicable to the other employees and which terms and values fall within market practices. 76. Supplementary pensions or retirement schemes There are neither supplementary pensions nor early retirement schemes for directors. IV. Remuneration Disclosure 77. Remuneration paid to directors During the course of 2023, the director’s remuneration was as follows: Name Fixed Remuneration (€) Profit-sharing (€) Total Remuneration (€) Executive Directors Miguel Nuno Santos Almeida (CEO) 675 000 386 650 1 061 650 José Pedro Faria Pereira da Costa (CFO) (1) 437 500 237 675 675 175 Jorge Filipe Pinto Sequeira dos Santos Graça 340 000 189 930 529 930 Luís Moutinho Nascimento 350 000 195 500 545 500 Manuel António Portugal Ramalho Eanes 390 000 217 780 607 780 Daniel Lopes Beato 275 000 127 563 402 563 Filipa de Sousa Taveira da Gama Santos Carvalho 250 000 111 950 361 950 Non-Executive Directors Ângelo Gabriel Ribeirinho Santos Paupério (Chairman of the Board of Directors) 225 000 - 225 000 António Bernardo Aranha da Gama Lobo Xavier 80 000 - 80 000 Catarina Eufémia Amorim da Luz Tavira Van-Dúnem 65 000 - 65 000 João Pedro Magalhães da Silva Torres Dolores 92 500 - 92 500 Maria Cláudia Teixeira de Azevedo 72 500 - 72 500 Ana Rita Ferreira Rodrigues 92 500 - 92 500 Cristina Maria de Jesus Marques 85 000 - 85 000 Eduardo António Salvador Verde Rodrigues Pinho 65 000 - 65 000 (1) Resigned on 10/11/2023, with effect on 31/12/2023, having earned, in addition to the abovementioned amounts, 119 318 Euros corresponding to remuneration that would have been due in 2024 if he had remained in office. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 390 In 2023, under the NOS Plan, as MTVR (1), the number of shares attributed to each executive director is detailed as follows: Name No. of Shares Miguel Nuno Santos Almeida (CEO) 101 852 José Pedro Faria Pereira da Costa (CFO) 62 609 Jorge Filipe Pinto Sequeira dos Santos Graça 50 031 Luís Moutinho Nascimento 51 499 Manuel António Portugal Ramalho Eanes 57 368 Daniel Lopes Beato 33 603 Filipa de Sousa Taveira da Gama Santos Carvalho 29 490 (1) The number of attributed shares was determined on the basis of the average closing price in the 15 sessions preceding 31 March 2023 and approved by the Remuneration Committee. In 2023, the total variable component of the executive directors' remuneration was calculated using the achievement of (collective) business indicators, with 70% weight, as follows: KPI (collective) Relative weight (%) EBITDA 17.50 Consolidated Operational Free Cash Flow 17.50 Consolidated business volume 17.50 Net Promoter Score (NPS) 17.50 Furthermore, the achievement of individual performance qualitative performance indicators, which had a 30% weight in the calculation of the total variable remuneration, was taken into account. I) Annual variable remuneration of the directors, the Company’s performance, and the average remuneration of employees The variation of the annual remuneration of the directors, the Company’s performance, and the average remuneration of full-time (or equivalent) employees, excluding the management and supervisory bodies for the 2019-2023 period is as follows: Annual Variation (%) 2019 vs 2018 2020 vs 2019 2021 vs 2020 2022 vs 2021 2023 vs 2022 Name Miguel Nuno Santos Almeida (CEO) 4.84% 1.82% -0.67% 8.22% 3.87% José Pedro Faria Pereira da Costa (CFO) (1) 1.71% -0.60% -3.13% 1.47% 3.18% Jorge Filipe Pinto Sequeira dos Santos Graça 7.52% 3.78% -0.67% 7.75% 4.08% Manuel António Portugal Ramalho Eanes 6.38% 2.96% -0.67% 6.95% 3.70% Luís Moutinho Nascimento (2) N/A 7.16% -0.67% 4.38% 2.42% Daniel Lopes Beato (3) N/A N/A N/A N/A 35.52% Filipa de Sousa Taveira da Gama Santos Carvalho (3) N/A N/A N/A N/A 25.58% (1) José Pedro Pereira da Costa resigned on 10/11/2023, with effect on 31/12/2023. (2) Luís Nascimento began its term of office on 29/06/2017. (3) Daniel Beato and Filipa Carvalho began their term of office on 15/01/2021. II) Annual variation of the remuneration of the non-executive directors Annual Variation (%) 2019 vs 2018 2020 vs 2019 2021 vs 2020 2022 vs 2021 2023 vs 2022 Name Ângelo Gabriel Ribeirinho Santos Paupério (Chairman of the Board of Directors) (1) 0.00% 67.14% 19.66% 50.00% 0.00% Ana Rita Ferreira Rodrigues (2) N/A N/A N/A 16.83% 0.00% António Domingues (3) (4) N/A 29.22% 12.56% N/A N/A António Bernardo Aranha da Gama Lobo Xavier 0.00% 10.71% 5.38% 14.29% 0.00% Catarina Eufémia Amorim Da Luz Tavira Van-Dúnem -7.65% 11.10% 6.33% 8.33% 0.00% Cristina Maria de Jesus Marques (2) N/A N/A N/A 5.60% 10.98% Joaquim Francisco Alves Ferreira de Oliveira (4) -7.65% 11.10% 6.33% N/A N/A João Pedro Magalhães da Silva Torres Dolores (5) 0.00% 23.36% 16.70% 16.83% 0.00% José Carvalho de Freitas (2) (4) N/A N/A N/A N/A N/A Maria Cláudia Teixeira de Azevedo -7.65% 11.10% 6.33% 20.83% 0.00% Eduardo António Salvador Verde Rodrigues Pinho (6) N/A N/A N/A N/A 43.52% (1) Appointed Chairman of the Board of Directors on 27/01/2020. (2) Beginning of term of office on 23/03/2020. (3) Beginning of term of office on 01/03/2017. (4) Ending of term of office on 21/04/2022. (5) Beginning of term of office on 26/04/2016. (6) Beginning of term of office on 21/04/2022. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 391 The following table shows the percentage annual variation of the NOS performance goals (on a consolidated basis) between 2019 and 2023: Company performance (%) 2019 vs 2018 2020 vs 2019 2021 vs 2020 2022 vs 2021 2023 vs 2022 EBITDA 2.8% -5.7% 2.5% 5.4% 10.1% Revenue 1.2% -6.2% 4.6% 6.3% 5.0% The table below shows information on the evolution of the NOS employees’ average remuneration since 2019 until 2023: Average remuneration of full-time employees (%) 2019 vs 2018 2020 vs 2019 2021 vs 2020 2022 vs 2021 2023 vs 2022 2.0% -0.2% 0.5% 2.5% 4.4% Employees’ average remuneration calculated based on the average target remuneration, of full-time employees, at the company of 31 December of each year, excluding directors, trainees, and workers in the cinema area, in all companies which are controlled in more than 50% by NOS. Due to the condition mentioned in item 71 above being satisfied, the number of rights granted (referred to as “Allocated Shares” below) and shares delivered (referred to as “Shares Delivered” below) to the executive directors is as follows: Name (Position / Job) Share Plan Conditions Information on Reported Financial Year Plan Period of the Plan Allocation Date Maturity Date End of Retention Period No. of Allocated Shares (2) No. of Shares Delivered (1)(3) Miguel Nuno Santos Almeida (CEO) 2020/2023 01/04/2020 - 31/03/2023 01/04/2020 31/03/2023 31/03/2023 121 256 150 715 2021/2024 01/04/2021 - 31/03/2024 01/04/2021 31/03/2024 31/03/2024 116 503 - 2022/2025 01/04/2022 - 31/03/2025 01/04/2022 31/03/2025 31/03/2025 104 379 - 2023/2026 01/04/2023 - 31/03/2026 01/04/2023 31/03/2026 31/03/2026 101 852 - José Pedro Faria Pereira da Costa (CFO) (4) 2020/2023 01/04/2020 - 31/03/2023 01/04/2020 31/03/2023 31/03/2023 84 940 105 577 2021/2024 01/04/2021 - 31/03/2024 01/04/2021 31/03/2024 31/03/2024 75 630 - 2022/2025 01/04/2022 - 31/03/2025 01/04/2022 31/03/2025 31/03/2025 65 221 - 2023/2026 01/04/2023 - 31/03/2026 01/04/2023 31/03/2026 31/03/2026 62 609 - Jorge Filipe Pinto Sequeira dos Santos Graça 2020/2023 01/04/2020 - 31/03/2023 01/04/2020 31/03/2023 31/03/2023 60 730 75 485 2021/2024 01/04/2021 - 31/03/2024 01/04/2021 31/03/2024 31/03/2024 58 352 - 2022/2025 01/04/2022 - 31/03/2025 01/04/2022 31/03/2025 31/03/2025 50 862 2023/2026 01/04/2023 - 31/03/2026 01/04/2023 31/03/2026 31/03/2026 50 031 - Luís Moutinho do Nascimento 2020/2023 01/04/2020 - 31/03/2023 01/04/2020 31/03/2023 31/03/2023 65 572 81 502 2021/2024 01/04/2021 - 31/03/2024 01/04/2021 31/03/2024 31/03/2024 63 004 - 2022/2025 01/04/2022 - 31/03/2025 01/04/2022 31/03/2025 31/03/2025 54 919 - 2023/2026 01/04/2023 - 31/03/2026 01/04/2023 31/03/2026 31/03/2026 51 499 - Manuel António Portugal Ramalho Eanes 2020/2023 01/04/2020 - 31/03/2023 01/04/2020 31/03/2023 31/03/2023 70 414 87 521 2021/2024 01/04/2021 - 31/03/2024 01/04/2021 31/03/2024 31/03/2024 67 657 - 2022/2025 01/04/2022 - 31/03/2025 01/04/2022 31/03/2025 31/03/2025 58 974 2023/2026 01/04/2023 - 31/03/2026 01/04/2023 31/03/2026 31/03/2026 57 368 - Daniel Lopes Beato (5) 2020/2023 01/04/2020 - 31/03/2023 01/04/2020 31/03/2023 31/03/2023 13 002 16 162 2021/2024 01/04/2021 - 31/03/2024 01/04/2021 31/03/2024 31/03/2024 12 507 - 2022/2025 01/04/2022 - 31/03/2025 01/04/2022 31/03/2025 31/03/2025 26 894 2023/2026 01/04/2023 - 31/03/2026 01/04/2023 31/03/2026 31/03/2026 33 603 - Filipa de Sousa Taveira da Gama Santos Carvalho (6) 2020/2023 01/04/2020 - 31/03/2023 01/04/2020 31/03/2023 31/03/2023 14 412 17 914 2021/2024 01/04/2021 - 31/03/2024 01/04/2021 31/03/2024 31/03/2024 13 613 - 2022/2025 01/04/2022 - 31/03/2025 01/04/2022 31/03/2025 31/03/2025 26 528 2023/2026 01/04/2023 - 31/03/2026 01/04/2023 31/03/2026 31/03/2026 29 490 - (1) The number of Shares Delivered is the result of Allocated Shares, adjusted for dividends paid, in each year. (2) The calculation of the Shares Delivered (i.e., the rights to acquire shares under the NOS Plan) is made based on the weighted average closing price of the shares in the 15 trading sessions prior to the business day preceding the commencement of the plan. (3) Acquisition of shares with a 90% discount. (4) José Pedro Pereira da Costa resigned on 10/11/2023, with effect on 31/12/2023. (5) Daniel Beato began its term of office on 15/01/2021. (6) Filipa Carvalho began its term of office on 15/01/2021. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 392 78. Amounts paid by other companies of NOS Group Executive directors of NOS that also hold positions in other NOS Group companies do not receive any additional remuneration or other amounts on any grounds whatsoever. 79. Profit sharing or bonus payments See items 71 and 77 above. 80. Compensation to former executive directors The remuneration policy does not provide any indemnity or compensation to members of the Board of Directors regarding their resignation or any other form of termination of the term of office of director (other than the unfair dismissal) before its term, with the exception of the sums established by law. Members of the management bodies can enter into agreements that contemplate payment of compensation in the event of early termination of office, in an amount not exceeding that permitted by law, as well as non-competition clauses contemplating compensation in return for a non-competition obligation after termination of office, regardless of the respective cause. In the context of the executive director José Pedro Faria Pereira da Costa resigning, an agreement of termination of service and non-compete agreement was entered into. Without prejudice to his right to receive the shares attributed to him, but which he has not been vested, under the terms and conditions established in the Remuneration Policy in force, as mentioned above (see table in item 77 regarding the number of rights granted), having met all agreement requirements, the compensatory amount to be paid by the Company to the resigning director shall correspond to the amounts that would be owed as remuneration until the end of the term of office and the amount of 1.784.138 Euros, corresponding to the compensation due to the non- competition obligation for the duration of two years. The compensatory amount established in the mentioned agreement shall be paid in 2024. 81. Remuneration paid to the members of the supervisory body The remuneration of the members of the Statutory Independent Audit Board, during 2023, was as follows: Name (Position / Job) Fixed Remuneration (€) Short- Term Variable Remuneration(€) Total Remuneration (€) José Pereira Alves (Chairman) 47 500 - 47 500 Paulo Cardoso Correia da Mota Pinto (Member) 30 000 - 30 000 Patrícia Andrea Bastos Teixeira Lopes Couto Viana (Member) 30 000 - 30 000 The variation of the total remuneration of the members of the Statutory Independent Audit Board, for the 2019-2023 period, is as follows: Annual Variation (%) 2019 vs 2018 2020 vs 2019 2021 vs 2020 2022 vs 2021 2023 vs 2022 Name José Pereira Alves (1) N/A N/A N/A 5.6% 0.0% Paulo Cardoso Correia da Mota Pinto (2) -32.4% -26.0% 0.0% 0.0% 0.0% Patrícia Andrea Bastos Teixeira Lopes Couto Viana 0.0% 0.0% 0.0% 0.0% 0.0% In 2023, no non-financial benefits were given to the members of the Statutory Independent Audit Board. The members of the Statutory Independent Audit Board that hold positions in other NOS Group companies do not receive any additional remuneration or other amounts on any ground whatsoever. 82. Remuneration of the Board of the General Meeting The remuneration of the members of the Board of the General Meeting, during 2023, was as follows: Name (Position / Job) Fixed Remuneration (€) Short- Term Variable Remuneration (€) Total Remuneration (€) António Agostinho Bastos Teixeira da Conceição Guedes (Chairman of the Board of the General Meeting) 18 000 - 18 000 Maria Daniela Farto Baptista Passos (Secretary of the Board of the General Meeting) 5 00 - 5 000 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 393 V. Agreements with Remuneration Implications 83. Restraints on compensations for unfair dismissal The directors of NOS in the case of unfair dismissal are entitled to compensation for damages suffered in accordance with the applicable law. See item 80 regarding NOS remuneration policy. 84. Compensation in the event of resignation, unfair dismissal or termination following a change of control (directors and managers) There are no foreseen specific compensations in the event of resignation, unfair dismissal or termination of the employment relationship following a change of control of the company, besides the ones applicable pursuant to the law. VI. Share Allocation Plans 85. Plans and targets The objectives of the NOS Share Allocation Plan are: • To ensure the loyalty of employees in the different companies of the NOS Group; • To stimulate their creative and productive capacity and foster business profits; • To create favourable recruitment conditions for senior officers and high strategic value workers; • To align the interests of the employees with the business objectives and the interests of NOS shareholders, rewarding their performance in relation to value creation for NOS shareholders, reflected in the value of its shares on the stock exchange. This Plan applies to employees that belong to some organisational groups, including executive directors, is one of the pillars that makes NOS a benchmark company in personal and professional development matters and stimulates the development and mobilisation of employees around a common project. NOS Plan Regulations, which include all necessary elements for the correct evaluation of the Plan, can be found at the Company’s website at https://www.nos.pt/institucional/EN/general- meeting/Documents/Proposta_Ponto_4_ENG_2021.pdf 86. Characterisation of NOS Plan Under the NOS Plan, the Executive Committee shall select the beneficiaries employees and decide on a case- by-case basis the allocation of shares to the eligible employees. The Remuneration Committee has this responsibility for Executive Committee members. The allocation of shares to the respective beneficiaries depends entirely on collective and individual performance criteria. The number of shares to be allocated is established using the amounts that are set with reference to the percentages of the remuneration earned by the beneficiaries, considering the assessment of NOS annual objectives as well as the assessment of individual performance. The specific number of shares to be allocated will be, therefore, the result of the division of the value provided by the average closing price, weighted by the respective volume, of shares in the 15 trading sessions prior to the reference date, except if the Executive Committee or Remuneration Committee, in the case of Executive Committee’s members, considers at its sole discretion other criteria that are deemed to be more appropriate. Shares were allocated with a right to buy with a discount up to 90%. These shares, or the equivalent value in cash, are delivered after a deferral period of 3 years following the date of allocation. However, should dividends be distributed or if the nominal value of the shares or share capital is changed during the deferral period through operations with financial movements, the initial number of shares under the NOS Plan will be altered to reflect the effects of these changes, so that the Plan is aligned with the total return achieved. For the executive members of the Board, the conditions of positive performance, as described in item 71 above, must additionally be met for their appointment. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 394 On 31 December 2023, the plans that allow the delivery of shares are the following: NOS Plan Number of Shares Plan 2021 1 426 069 Plan 2022 1 164 196 Plan 2023 1 038 600 During the year ended on 31 December 2023, the movements under the NOS Plan are detailed as follows: NOS Plan 2020 NOS Plan 2021 NOS Plan 2022 NOS Plan 2023 Total Balance as at 31 December 2022 1 459 370 1 320 809 1 079 152 - 3 859 331 Movements in the period: Awarded - - - 1 040 472 1 040 472 Vested (1 458 712) (11 380) (8 908) - (1 479 000) Cancelled/Elapsed/Corrected(1) (658) 116 640 93 952 (1 872) 208 062 Balance as at 31 December 2023 - 1 426 069 1 164 196 1 038 600 3 628 865 (1) Includes, mainly, amendments introduced by virtue of the dividend paid, shares related to plans exceptionally settled in cash and shares related with termination of relationships with employees, not benefiting from the vesting of shares. 87. Stock option plans for employees No remunerations based in options are implemented for employees through share allocation. The NOS Plan, which applies to employees that belong to some organisational groups (including executive directors) only allows share allocation. 88. Control of employees’ participation in the capital The voting rights inherent to shares delivered to employees benefiting from the NOS Plan can only be exercised by them after the respective vesting of the shares. E. Transactions with Related Parties I. Control mechanisms and procedures 89. Mechanisms implemented by the company for the purpose of controlling transactions with related parties NOS has established control mechanisms and procedures for the Company’s transactions with shareholders of qualified holdings, or with entities with whom they are in any relationship, according to article 20 of the Portuguese Securities Code. Pursuant to article 3(3.1)(o) of the Delegation of Management Powers by the Board of Directors to the Executive Committee, the delegation did not cover the entering into of any transactions, between the Company and shareholders of qualified holdings representing 2% or more of the voting rights and/or entities related to them in any way pursuant to article 20 of the Portuguese Securities Code, in excess of the individual amount of € 75,000 or the aggregate annual amount per supplier of € 150,000 (without prejudice to the transactions having been approved in general terms or in terms of framework by the Board of Directors). Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 395 In turn, article 2(2.9)(g) of the Delegation of Powers determines that the Chairman of the Executive Committee is responsible in particular for ensuring that the Board of Directors is informed, quarterly, of the transactions that, in connection with the delegation of powers, have been entered into by the Company and Related Parties when in excess of the individual amount of € 10,000. The Audit and Finance Committee also scrutinises these matters, since article 3(j) of its Regulations determines that its powers include, in particular, the power to analyse and issue its prior opinion on the transactions between the Company and Related Parties. In addition, the Statutory Independent Audit Board, under its Regulations, is responsible for issuing a prior opinion on relevant business activities with Related Parties. On 4 November 2020, the Board of Directors approved, with a favourable opinion by the Statutory Independent Audit Board, a new Regulation for Transactions with Related Parties, which laid down, in particular, procedures and criteria that are required to define the relevant level of significance of business with shareholders of qualified holdings – or with Related Parties – and thus business of significant importance is dependent upon the prior opinion of that supervisory body, in strict compliance with the legal requirements in force. The Regulation on Transactions with Related Parties is available at https://www.nos.pt/content/dam/nos/institucional/inv estidores/investidores_en/governo-da- sociedade/Regulamento%20Transacoes%20com%20P artes%20Relacionadas%202022_EN.pdf 90. Details of transactions that were subject to control in the referred year During 2023, NOS did not do any significant business or operation in economic terms for any of the parties involved with members of the management and supervisory bodies or companies in a control or group relationship, that have not been conducted in normal market conditions for similar operations and that are not a part of the current activity of the Company and, as such, there were no transactions with related parties subject to the Statutory Independent Audit Board control. 91. A description of the procedures and criteria applicable to the supervisory body when same provides preliminary assessment of the business deals to be carried out between the company and the holders of qualified shareholdings or entity- relationships with the former, as envisaged in article 20 of the Securities Code The Regulations on Transactions with Related Parties lays down internal procedures for control of transactions with holders of qualified shareholdings, considered suited to the transparency of the decision-making process, defining the terms of intervention of the Statutory Independent Audit Board in this process. Thus, without prejudice to additional obligations, pursuant to these Regulations, by the end of the month following the end of each quarter, the Executive Committee shall inform the Statutory Independent Audit Board of all the transactions made in the previous quarter with each holder of qualified shareholdings and/or related party. Transactions with holders of qualified shareholdings and/or related parties require a prior opinion from the Statutory Independent Audit Board in the following cases: (i) transactions whose value per transaction exceeds a particular level set forth in the Regulations and is described in the table below; (ii) transactions with a significant impact on the activities of NOS and/or its subsidiaries due to their nature or strategic importance, regardless of their value; (iii) transactions made, exceptionally, outside normal market conditions, regardless of their value, and (iv) transactions made, exceptionally, outside current activity, regardless of their value. Types and values of the transactions to be considered for the purposes of item (i) above: Transactions - Sales, Provision of Services, Purchases and Services obtained, except in case of renovation of pending contracts More than EUR 1.000.000 Loans and other funding received and granted, except day-to-day management/operations up to 180 days More than EUR 10.000.000 Financial investments More than EUR 10.000.000 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 396 The prior opinion of the Statutory Independent Audit Board required for the transactions referred to in items (i) and (ii) above will not be necessary in the case of: (i) interest and/or exchange rate hedging transactions through trading rooms or auctions and (ii) applications or financial investments through trading rooms or auctions. For the Statutory Independent Audit Board to appraise the transaction in question and issue an opinion, the Executive Committee must provide that body with all necessary information and a reasoned justification. The assessment to authorise and issue a prior opinion applicable to transactions with holders of qualified shareholdings and/or related parties should take into account, among other relevant aspects, the principle of equal treatment of shareholders and other stakeholders, the interest of the Company and the impact, materiality, nature and justification for each transaction. II. Data on business deals 92. Details of the place where the financial statements including information on business dealings with related parties are available, in accordance with IAS 24 Relevant businesses with Related Parties made until 31 December 2023 can be found in note 45 of the financial statements, which are included in the accounting documents, available at the Company’s headquarters and on its website at https://www.nos.pt/institucional/EN/investors/nos-in- numbers/Pages/results.aspx. Annual Integrated Report 2023 397 04 Corporate Governance Report 02 03 01 4.2 Part 2 Corporate governance assessment Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 398 1. Details of the Corporate Governance Code Implemented Pursuant to article 2 of CMVM Regulation No. 4/2013, NOS adopts the Recommendations set out in the Corporate Governance Code of the Portuguese Institute of Corporate Governance (IPCG), published in 2018 and revised in 2023, available on the website of this entity www.cgov.pt. 2. Analysis of Compliance with the Corporate Governance Code Implemented The following table presents: i) the IPCG’s Recommendations on Corporate Governance; ii) the corresponding level of observance by NOS, as at 31 December 2023 and justification of recommendations not applicable or not adopted; and, also iii) reference to the Chapters of this Corporate Governance Report that describe the measures taken by the Company to comply with the aforementioned Recommendations. Corporate Governance Report 2023 Compliance Analysis CORPORATE GOVERNANCE CODE ASSESSMENT CGR REFERENCE / COMMENTS I COMPANY’S RELATIONSHIP WITH SHAREHOLDERS, INTERESTED PARTIES AND THE COMMUNITY AT LARGE Principles: I.A. In their organisation, operation and in the definition of their strategy, companies shall contribute to the pursuit of the Sustainable Development Goals defined within the framework of the United Nations Organisation, in terms that are appropriate to the nature of their activity and their size. I.B. The company periodically identifies, measures and seeks to prevent negative effects related to the environmental and social impact of the operation of its activity, in terms that are appropriate to the nature and size of the company. I.C. In its decision-making processes, the management body considers the interests of shareholders and other investors, employees, suppliers and other stakeholders in the activity of the company. I.1. The company specifies in what terms its strategy seeks to ensure the fulfilment of its long-term objectives and what are the main contributions resulting herefrom for the community at large. Adopted Item 21 I.2. The company identifies the main policies and measures adopted with regard to the fulfilment of its environmental and social objectives. Adopted Item 21 II COMPOSITION AND FUNCTIONING OF THE CORPORATE BODIES II.1. Information Principle: II.1.A. Companies and, in particular, their Directors treat shareholders and other investors in an equitable manner, namely by ensuring mechanisms and procedures for the adequate treatment and disclosure of information. II.1.1 The company establishes mechanisms to adequately and rigorously ensure the timely circulation or disclosure of the information required to its bodies, the company secretary, shareholders, investors, financial analysts, other stakeholders and the market at large. Adopted Items 15, 22, 28, 29, 34, 56 to 65 II.2. Diversity in the composition and functioning of the corporate bodies Principles: II.2.A. Companies have adequate and transparent decision-making structures, ensuring maximum efficiency in the functioning of their bodies and committees. II.2.B. Companies ensure diversity in the composition of their management and supervisory bodies and the adoption of individual merit criteria in the respective appointment processes, which shall be the exclusive responsibility of shareholders. II.2.C. Companies ensure that the performance of their bodies and committees is duly recorded, namely in minutes of meetings, that allow for knowing not only the sense of the decisions taken but also their grounds and the opinions expressed by their members. II.2.1. Companies establish, previously and abstractly, criteria and requirements regarding the profile of the members of the corporate bodies that are adequate to the function to be performed, considering, notably, individual attributes (such as competence, independence, integrity, availability and experience), and diversity requirements (with particular attention to equality between men and women), that may contribute to the improvement of the performance of the body and of the balance in its composition. Adopted Items 19, 29 and 33 II.2.2. The management and supervisory bodies and their internal committees are governed by regulations – notably regarding the exercise of their powers, chairmanship, the frequency of meetings, operation and the duties framework of their members – fully disclosed on the website of the company, whereby minutes of the respective meetings shall be drawn up. Adopted Items 22, 27, 29, 34 and 67 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 399 CORPORATE GOVERNANCE CODE ASSESSMENT CGR REFERENCE / COMMENTS II.2.3. The composition and number of meetings for each year of the management and supervisory bodies and of their internal committees are disclosed on the website of the company. Adopted Items 60 to 65 II.2.4. The companies adopt a whistle-blowing policy that specifies the main rules and procedures to be followed for each communication and an internal reporting channel that also includes access for nonemployees, as set forth in the applicable law. Adopted Item 49 II.2.5. The companies have specialised committees for matters of corporate governance, remuneration, appointments of members of the corporate bodies and performance assessment, separately or cumulatively. If the Remuneration Committee provided for in Article 399 of the Portuguese Commercial Companies Code has been set up, the present Recommendation can be complied with by assigning to said committee, if not prohibited by law, powers in the above matters. Adopted Items 27, 29 and 67 II.3. Relations between corporate bodies Principle: II.3.A. The corporate bodies create the conditions for them to act in a harmonious and articulated manner, within the scope of their responsibilities, and with information that is adequate for carrying out their functions. II.3.1. The Articles of Association or equivalent means adopted by the company set out the mechanisms to ensure that, within the limits of the applicable laws, the members of the management and supervisory bodies have permanent access to all necessary information to assess the performance, situation and development prospects of the company, including, specifically, the minutes of the meetings, the documentation supporting the decisions taken, the convening notices and the archive of the meetings of the executive management body, without prejudice to access to any other documents or persons who may be requested to provide clarification. Adopted Items 21, 22, 28, 29 and 34 II.3.2. Each body and committee of the company ensures, in a timely and adequate manner, the interorganic flow of information required for the exercise of the legal and statutory powers of each of the other bodies and committees. Adopted Items 22, 28, 29 and 34 II.4. Conflicts of interest Principle: II.4.A. The existence of current or potential conflicts of interest between the members of bodies or committees and the company shall be prevented, ensuring that the conflicted member does not interfere in the decision-making process. II.4.1. By internal regulation or an equivalent hereof, the members of the management and supervisory bodies and of the internal committees shall be obliged to inform the respective body or committee whenever there are any facts that may constitute or give rise to a conflict between their interests and the interest of the company. Adopted Item 26 II.4.2. The company adopts procedures to ensure that the conflicted member does not interfere in the decision-making process, without prejudice to the duty to provide information and clarification requested by the body, committee or respective members. Adopted Item 26 II.5. Transactions with related parties Principle: II.5.A. Transactions with related parties shall be justified by the interest of the company and shall be carried out under market conditions, being subject to principles of transparency and adequate supervision. II.5.1. The management body discloses, in the corporate governance report or by other publicly available means, the internal procedure for verification of transactions with related parties. Adopted Items 34 and 89 to 91 III SHAREHOLDERS AND GENERAL MEETING Principles: III.A. The adequate involvement of shareholders in corporate governance constitutes a positive factor for the efficient functioning of the company and the achievement of its corporate objective. III.B. The company promotes the personal participation of shareholders at general meetings as a space for reflection on the company and for shareholders to communicate with the bodies and committees of the company. III.C. The company implements adequate means for shareholders to attend and vote at the general meeting without being present in person, including the possibility of sending in advance questions, requests for clarification or information on the matters to be decided on and the respective proposals. III.1. The company does not set an excessively large number of shares to be entitled to one vote and informs in the corporate governance report of its choice whenever each share does not carry one vote. Adopted Item 12 III.2. The company that has issued special plural voting rights shares identifies, in its corporate governance report, the matters that, pursuant to the company’s N/A Item 12 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 400 CORPORATE GOVERNANCE CODE ASSESSMENT CGR REFERENCE / COMMENTS Articles of Association, are excluded from the scope of plural voting. No special plural voting rights shares were issued. III.3. The company does not adopt mechanisms that hinder the passing of resolutions by its shareholders, specifically fixing a quorum for resolutions greater than that foreseen by law. Adopted Item 14 III.4. The company implements adequate means for shareholders to participate in the general meeting without being present in person, in proportion to its size. Adopted Item 12 III.5. The company also implements adequate means for the exercise of voting rights without being present in person, including by correspondence and electronically. Adopted Item 12 The Company further notes that the raison d'être of this Recommendation (i.e., to fully enable shareholders to exercise their voting rights) is ensured by other mechanisms, such as postal voting (commonly used), and by electronic means, with information on such possibilities promptly and made available to the general public through the publication of a notice of meeting and other documents (including the ballot paper and forms) on the Company's website. III.6. The Articles of Association of the company that provide for the restriction of the number of votes that may be held or exercised by one single shareholder, either individually or jointly with other shareholders, shall also foresee that, at least every five years, the general meeting shall resolve on the amendment or maintenance of such statutory provision – without quorum requirements greater than that provided for by law – and that in said resolution, all votes issued are to be counted, without applying said restriction. N/A Item 13 The Company’s Articles of Association do not set any restriction on the number of votes that may be held or exercised by one single shareholder. III.7. The company does not adopt any measures that require payments or the assumption of costs by the company in the event of change of control or change in the composition of the management body and which are likely to damage the economic interest in the transfer of shares and the free assessment by shareholders of the performance of the Directors. Adopted Items 2, 4 and 5 IV MANAGEMENT IV.1. Management Body and Executive Directors Principles: IV.1.A. The day-to-day management of the company shall be the responsibility of executive directors with the qualifications, skills, and experience appropriate for the position, pursuing the corporate goals and aiming to contribute to its sustainable development. IV.1.B. The determination of the number of executive directors shall take into account the size of the company, the complexity and geographical dispersion of its activity and the costs, bearing in mind the desirable flexibility in the running of the executive management. IV.1.1. The management body ensures that the company acts in accordance with its object and does not delegate powers, notably with regard to: i) definition of the corporate strategy and main policies of the company; ii) organisation and coordination of the corporate structure; iii) matters that shall be considered strategic due to the amounts, risk and particular characteristics involved. Adopted Item 21 IV.1.2. The management body approves, by means of regulations or through an equivalent mechanism, the performance regime for executive directors applicable to the exercise of executive functions by them in entities outside the group. Adopted Item 29 IV.2. Management Body and Non-Executive Directors Principles: IV.2.A. For the full achievement of the corporate objective, the non-executive directors shall exercise, in an effective and judicious manner, a function of general supervision and of challenging the executive management, whereby such performance shall be complemented by commissions in areas that are central to the governance of the company. IV.2.B. The number and qualifications of the non-executive directors shall be adequate to provide the company with a balanced and appropriate diversity of professional skills, knowledge and experience. IV.2.1. Notwithstanding the legal duties of the chairman of the board of directors, if the latter is not independent, the independent directors – or, if there are not enough independent directors, the nonexecutive directors – shall appoint a coordinator among themselves to, in particular (i) act, whenever necessary, as interlocutor with the chairman of the board of directors and with the other directors, (ii) ensure that they have all the conditions and means required to carry out their duties, and (iii) coordinate their performance assessment by the administration body as provided for in Recommendation VI.1.1.; alternatively, the company may establish another equivalent mechanism to ensure such Not Adopted Item 18 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 401 CORPORATE GOVERNANCE CODE ASSESSMENT CGR REFERENCE / COMMENTS coordination. IV.2.2. The number of non-executive members of the management body shall be adequate to the size of the company and the complexity of the risks inherent to its activity, but sufficient to ensure the efficient performance of the tasks entrusted to them, whereby the formulation of this adequacy judgement shall be included in the corporate governance report. Adopted Items 17 and 18 IV.2.3. The number of non-executive directors is greater than the number of executive directors. Adopted Items 17 and 18 IV.2.4. The number of non-executive directors that meet the independence requirements is plural and is not less than one third of the total number of non- executive directors. For the purposes of the present Recommendation, a person is deemed independent when not associated to any specific interest group in the company, nor in any circumstances liable to affect his/her impartiality of analysis or decision, in particular in virtue of: • Having carried out, continuously or intermittently, functions in any corporate body of the company for more than twelve years, with this period being counted regardless of whether or not it coincides with the end of the mandate; • Having been an employee of the company or of a company that is controlled by or in a group relationship with the company in the last three years; • Having, in the last three years, provided services or established a significant business relationship with the company or with a company that is controlled by or in a group relationship with the company, either directly or as a partner, director, manager or officer of a legal person; • Being the beneficiary of remuneration paid by the company or by a company that is controlled by or in a group relationship with the company, in addition to remuneration stemming from the performance of the functions of director; • Living in a non-marital partnership or being a spouse, relative or kin in a direct line and up to and including the 3rd degree, in a collateral line, of directors of the company, of directors of a legal person owning a qualifying stake in the company or of natural persons owning, directly or indirectly, a qualifying stake; • Being a holder of a qualifying stake or representative of a shareholder that is holder of a qualifying stake. Not Adopted Item 18 IV.2.5. The provisions of paragraph (i) of the previous Recommendation do not prevent the qualification of a new Director as independent if, between the end of his/her functions in any corporate body and his/her new appointment, at least three years have elapsed (cooling-off period). N/A There are no directors under these conditions. V SUPERVISION Principles: V.A. The supervisory body carries out permanent supervision activities of the administration of the company, including, also from a preventive perspective, the monitoring of the activity of the company and, in particular, the decisions of fundamental importance for the company and for the full achievement of its corporate object. V.B. The composition of the supervisory body provides the company with a balanced and adequate diversity of professional skills, knowledge and experience. V.1. With due regard for the competences conferred to it by law, the supervisory body takes cognisance of the strategic guidelines and evaluates and renders an opinion on the risk policy, prior to its final approval by the administration body. Adopted Items 34 and 38 V.2. The number of members of the supervisory body and of the financial matters committee should be adequate in relation to the size of the company and the complexity of the risks inherent to its activity, but sufficient to ensure the efficiency of the tasks entrusted to them, and this adequacy judgement should be included in the corporate governance report. Adopted Items 29 and 31 VI PERFORMANCE ASSESSMENT, REMUNERATION AND APPOINTMENTS VI.1. Annual performance assessment Principle: VI.1.A. The company promotes the assessment of performance of the executive body and its individual members as well as the overall performance of the management body and its specialised committees. VI.1.1. The management body – or committee with relevant powers, composed of a majority of non-executive members – evaluates its performance on an annual basis, as well as the performance of the executive committee, of the executive directors and of the company committees, taking into account the compliance with the strategic plan of the company and of the budget, the risk Adopted Items 24, 25, 29, 70, 71 and following Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 402 CORPORATE GOVERNANCE CODE ASSESSMENT CGR REFERENCE / COMMENTS management, its internal functioning and the contribution of each member to that end, and the relationship between the bodies and committees of the company. VI.2. Remunerations Principles: VI.2.A. The remuneration policy for members of the management and supervisory bodies shall allow the company to attract qualified professionals at a cost that is economically justified by their situation, provide for the alignment with the interests of the shareholders – taking into consideration the wealth effectively created by the company, the economic situation and the market situation – and shall constitute a factor for developing a culture of professionalism, sustainability, merit promotion and transparency in the company. VI.2.B. Taking into consideration that the position of directors is, by nature, a remunerated position, directors shall receive a remuneration: i) that adequately rewards the responsibility undertaken, the availability and competence placed at the service of the company; ii) that ensures a performance aligned with the long-term interests of shareholders and promotes the sustainable performance of the company; and iii) that rewards performance. VI.2.1. The company constitutes a remuneration committee, whose composition shall ensure its independence from the board of directors, whereby it may be the remuneration committee appointed pursuant to Article 399 of the Portuguese Commercial Companies Code. Adopted Items 66 to 70 VI.2.2. The remuneration of the members of the management and supervisory bodies and of the company committees is established by the remuneration committee or by the general meeting, upon proposal of such committee. Adopted Item 66 VI.2.3. The company discloses in the corporate governance report, or in the remuneration report, the termination of office of any member of a body or committee of the company, indicating the amounts of all costs related to the termination of office borne by the company, for any reason, during the financial year in question. Adopted Items 80 and 83 VI.2.4. In order to provide information or clarification to shareholders, the president or another member of the remuneration committee shall be present at the annual general meeting and at any other general meeting at which the agenda includes a matter related to the remuneration of the members of bodies and committees of the company, or if such presence has been requested by shareholders. Adopted Item 69 VI.2.5. Within the budget constraints of the company, the remuneration committee may freely decide to hire, on behalf of the company, consultancy services that are necessary or convenient for the performance of its duties. Adopted Item 67 VI.2.6. The remuneration committee ensures that such services are provided independently. Adopted Item 67 VI.2.7. The providers of said services are not hired by the company itself or by any company controlled by or in group relationship with the company, for the provision of any other services related to the competencies of the remuneration committee, without the express authorisation of the committee. Adopted Item 67 VI.2.8. In view of the alignment of interests between the company and the executive directors, a part of their remuneration has a variable nature that reflects the sustained performance of the company and does not encourage excessive risk-taking. Adopted Item 70 VI.2.9. A significant part of the variable component is partially deferred over time, for a period of no less than three years, and is linked to the confirmation of the sustainability of performance, in terms defined in the remuneration policy of the company. Adopted Item 71 VI.2.10. When the variable remuneration includes options or other instruments directly or indirectly subject to share value, the start of the exercise period is deferred for a period of no less than three years. N/A Items 71 and following Unforeseen situation. VI.2.11. The remuneration of non-executive directors does not include any component whose value depends on the performance of the company or of its value. Adopted Items 69 and 78 VI.3. Appointments Principle: VI.3.A. Regardless of the method of appointment, the knowledge, experience, professional background, and availability of the members of the corporate bodies and of the senior management shall be adequate for the job to be performed. VI.3.1. The company promotes, in the terms it deems adequate, but in a manner susceptible of demonstration, that the proposals for the appointment of members of the corporate bodies are accompanied by grounds regarding the suitability of each of the candidates for the function to be performed. Adopted Item 29 VI.3.2. The committee for the appointment of members of corporate bodies includes Not Adopted Item 29 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 403 CORPORATE GOVERNANCE CODE ASSESSMENT CGR REFERENCE / COMMENTS a majority of independent directors. VI.3.3. Unless it is not justified by the size of the company, the task of monitoring and supporting the appointments of senior managers shall be assigned to an appointment committee. N/A Item 29 The management and supervisory bodies are directors of NOS. VI.3.4. The committee for the appointment of senior management provides its terms of reference and promotes, to the extent of its powers, the adoption of transparent selection processes that include effective mechanisms for identifying potential candidates, and that for selection those are proposed who present the greatest merit, are best suited for the requirements of the position and promote, within the organisation, an adequate diversity including regarding gender equality. N/A Item 29 This recommendation must be interpreted as only relating to the committee provided in recommendation VI.3.3. (which was assessed as N/A) VII INTERNAL CONTROL Principle: VII.A. Based on the medium and long-term strategy, the company shall establish a system of internal control, comprising the functions of risk management and control, compliance and internal audit, which allows for the anticipation and minimisation of the risks inherent to the activity developed. VII.1. The management body discusses and approves the strategic plan and risk policy of the company, which includes setting limits in matters of risk-taking. Adopted Items 50 and following VII.2. The company has a specialised committee or a committee composed of specialists in risk matters, which reports regularly to the management body. Adopted Items 50 and 51 The company has specialised Risk Committees. VII.3. The supervisory body is organised internally, implementing periodic control mechanisms and procedures, in order to ensure that the risks effectively incurred by the company are consistent with the objectives set by the administration body. Adopted Item 50 VII.4. The internal control system, comprising the risk management, compliance, and internal audit functions, is structured in terms that are adequate to the size of the company and the complexity of the risks inherent to its activity, whereby the supervisory body shall assess it and, within the ambit of its duty to monitor the effectiveness of this system, propose any adjustments that may be deemed necessary. Adopted Item 51 VII.5. The company establishes procedures of supervision, periodic assessment and adjustment of the internal control system, including an annual assessment of the degree of internal compliance and performance of such system, as well as the prospects for changing the previously defined risk framework. Adopted Items 51 and 54 VII.6. Based on its risk policy, the company sets up a risk management function, identifying (i) the main risks to which it is subject in the operation of its business, (ii) the probability of their occurrence and respective impact, (iii) the instruments and measures to be adopted in order to mitigate such risks, and (iv) the monitoring procedures, aimed at following them up. Adopted Items 53 and 54 VII.7. The company establishes processes to collect and process data related to the environmental and social sustainability in order to alert the management body to risks that the company may be incurring and propose strategies for their mitigation. Adopted Item 52 VII.8. The company reports on how climate change is considered within the organisation and how it takes into account the analysis of climate risk in the decision-making processes. Adopted Item 52 VII.9. The company informs in the corporate governance report on the manner in which artificial intelligence mechanisms have been used as a decision-making tool by the corporate bodies. Adopted Item 52 VII.10. The supervisory body pronounces on the work plans and resources allocated to the services of the internal control system, including the risk management, compliance, and internal audit functions, and may propose adjustments as deemed necessary. Adopted Item 51 VII.11. The supervisory body is the addressee of reports made by the internal control services, including the risk management, compliance, and internal audit functions, at least when matters related to accountability, identification or resolution of conflicts of interest and detection of potential irregularities are concerned. Adopted Item 51 VIII INFORMATION AND STATUTORY AUDIT OF ACCOUNTS VIII.1. Information Principles: Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 404 CORPORATE GOVERNANCE CODE ASSESSMENT CGR REFERENCE / COMMENTS VIII.1.A. The supervisory body, diligently and with independence, ensures that the management body observes its responsibilities in choosing policies and adopting appropriate accounting criteria and establishing adequate systems for financial and sustainability reporting, and for internal control, including risk management, compliance and internal audit. VIII.1.B. The supervisory body promotes a proper articulation between the work of the internal audit and that of the statutory audit of accounts. VIII.1.1. The regulations of the supervisory body requires that the supervisory body monitors the suitability of the process of preparation and disclosure of information by the management body, including the appropriateness of accounting policies, estimates, judgements, relevant disclosures and their consistent application from financial year to financial year, in a duly documented and reported manner. Adopted Item 34 VIII.1. Statutory audit and supervision Principle: VIII.2.A. It is the responsibility of the supervisory body to establish and monitor formal, clear, and transparent procedures as to the relationship between the company and the statutory auditor and the supervision of compliance, by the statutory auditor, with the rules of independence imposed by law and by professional standards. VIII.2.1. By means of regulation, the supervisory body defines, in accordance with the applicable legal regime, the supervisory procedures to ensure the independence of the statutory auditor. Adopted Item 34 VIII.2.2. The supervisory body is the main interlocutor of the statutory auditor within the company and the first addressee of the respective reports, and is competent, namely, for proposing the respective remuneration and ensuring that adequate conditions for the provision of the services are in place within the company. Adopted Items 34 and 37 VIII.2.3. The supervisory body annually evaluates the work carried out by the statutory auditor, its independence and suitability for the exercise of its functions and shall propose to the competent body its dismissal or termination of the contract for the provision of its services whenever there is just cause to do so. Adopted Items 34 and 37 Annual Integrated Report 2023 405 04 Corporate Governance Report 02 03 01 4.3 Part 3 Annex Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 406 Board of the General Meeting ANTÓNIO AGOSTINHO CARDOSO DA CONCEIÇÃO GUEDES Chairman of the Board of the General Meeting Qualifications • Law Degree - Portuguese Catholic University, Porto • Master’s Degree in Civil Law Sciences - Coimbra Faculty of Law • Doctorate in Civil Law Sciences - Portuguese Catholic University • Author and co-author of several publications in Civil and Commercial Law, including “A natureza jurídica do Direito de Preferência” [The Legal Nature of the Right of Preference], master’s thesis, and “O Exercício de Direito de Preferência” [The Exercise of the Right of Preference], doctoral thesis Professional Experience • Member of the General Council of the Centre for Judicial Studies (elected by the Assembly of the Republic) (2011- 2022) • Scientific Coordinator of the Double Degree course in Law and Management (Porto Regional Centre of the Portuguese Catholic University) (2014-2021) • Member of the Board of the Business Management School - Portuguese Catholic University, Porto Regional Centre (Católica Porto Business School) (2013-2020) • Vice-Chairman of the Board of the General Meeting - Banco BPI, S.A. (2016-2020) • Chairman of the Board of the General Meeting - Sonae Investimentos, SGPS, S.A. (2007-2018) • Chairman of the Board of the General Meeting - Sonae Indústria, SGPS, S.A. (2014-2015) • Chairman of the Board of the General Meeting - Sonaecom, SGPS, S.A. (2014-2015) • Member of the High Council - Portuguese Catholic University (2011-2013) • Secretary of the Board of the General Meeting - Sonae Indústria, SGPS, S.A. (2007-2014) • Secretary of the Board of the General Meeting - Sonaecom, SGPS, S.A. (2007-2014) • Chairman of the Board of the General Meeting - Sonae Capital, SGPS, S.A. (2007-2014) • Member of the Advisory Board - Business Management School UCP-CRP (2009-2013) • Director of the Porto School, Faculty of Law - Faculty of Law of the Portuguese Catholic University (2006-2013) • President of the Scientific Council of the Porto School - Faculty of Law of the Portuguese Catholic University (2006-2013) • President of the Pedagogical Council of the Porto School - Faculty of Law of the Portuguese Catholic University (2005-2006) Offices held in other institutions • Arbitrator at the Commercial Arbitration Institute (Portuguese Chamber of Commerce/Chamber of Commerce and Industry of Porto) • Consultant - Morais Leitão, Galvão Teles, Soares da Silva e Associados – Sociedade de Advogados, RL • Associate Professor - Law Faculty of the Catholic University, Porto School MARIA DANIELA FARTO BAPTISTA PASSOS Secretary of the Board of the General Meeting Qualifications • Law Degree - Portuguese Catholic University, Porto • Specialisation Course in Juridical-Commercial Sciences • Master’s Degree in Law, area of Juridical- Commercial Sciences • Doctorate in Law, area of Juridical-Commercial Sciences Professional Experience • Member of the Pedagogical Council of the Porto School of the Faculty of Law of the Portuguese Catholic University (since February 2023) • Assistant - Porto School of the Faculty of Law of the Portuguese Catholic University – Introduction to Law; Introduction to Private Law; General Theory of Legal Relationships; Commercial Law and Company Law (2004-2015) • Lecturer in the Master’s Degree in Banking and Insurance - Faculty of Economics and Management of the Portuguese Catholic University of Porto - Subject Commercial Law (2012-2014) • Member of the Direction Council - Porto School of the Faculty of Law of the Portuguese Catholic University (2002-2008) • Trainer in Executive Process - Training Centre of the District Council of the Bar Association of Porto (2006-2007) • Trainee Lecturer - Porto School of the Faculty of Law of the Portuguese Catholic University (2000- 2004) • Lecturer in the Postgraduate Course in Commercial Law and Company Law - Lisbon School of the Lisbon Faculty of the Portuguese Catholic University • Member of the Católica Research Centre for the Future of Law Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 407 • Assistant Professor - Porto School of the Faculty of Law of the Portuguese Catholic University in the subjects of the Degree of Law and Double Degree in Law and Management: Introduction to Law; Introduction to Private Law; General Theory of Legal Relationships; Commercial Law and Corporate Law • Subjects taught on the Master’s Degree in Company and Business Law and in the Master's Degree in Law and Management: Securities and Capital Markets Law; Banking Law • Seminars taught: Dismissal and Exclusion of Members • Lecturer in the Postgraduate Course in Securities Law - Lisbon Securities Institute • Lecturer in the Advanced Postgraduation Course in Banking Law - Faculty of Law of the University of Lisbon • Lecturer in the Postgraduation Course in Company Law - Porto School of the Faculty of Law of the Portuguese Catholic University • Scientific Coordinator and Lecturer in the Postgraduation Course in Securities Law and Banking Law - Porto School of the Faculty of Law of the Portuguese Catholic University Offices held in other institutions • Scientific Coordinator and Lecturer in the Postgraduation Course in Securities Law and Banking Law - Porto School of the Faculty of Law of the Portuguese Catholic University (2017 until now) • Lecturer in the Postgraduation Course in Company Law - Porto School of the Faculty of Law of the Portuguese Catholic University (2020 until now) • Lecturer in the Advanced Postgraduation Course in Banking Law - Faculty of Law of the University of Lisbon (2017 until now) • Lecturer in the Postgraduate Course in Securities Law - Lisbon Securities Institute (2017 until now) • Assistant Professor - Porto School of the Faculty of Law of the Portuguese Catholic University in the subjects of the Degree of Law and Double Degree in Law and Management: Introduction to Law; Introduction to Private Law; General Theory of Legal Relationships; Commercial Law and Corporate Law – (2015 until now) • Member of the Católica Research Centre for the Future of Law (2015 until now) • Lecturer in the Postgraduate Course in Commercial Law and Company Law - Lisbon School of the Lisbon Faculty of the Portuguese Catholic University (2004 until now) • Subjects taught on the Master’s Degree in Company and Business Law and in the Master's Degree in Law and Management: Securities and Capital Markets Law; Banking Law • Seminars taught: Dismissal and Exclusion of Members Board of Directors ÂNGELO GABRIEL RIBEIRINHO DOS SANTOS PAUPÉRIO Chairman of the Board of Directors Qualifications • Degree in Civil Engineering from Faculty of Engineering of the University of Porto • Master in Companies Management MBA (Porto Business School) Offices held in other companies as of 31.12.2023 • Chairman of the Board of Directors of Sonaecom, SGPS, S.A. • Chairman of the Board of Directors of Sonae Investment Management – Software and Technology, SGPS, S.A. • Chairman of the Board of Directors of Público - Comunicação Social, S.A. • Chairman of the Board of Directors of NOS, SGPS, S.A. • Member of the Board of Directors of MCRETAIL, SGPS, S.A. • Chairman of the Board of Directors of Sonae Holdings S.A. • Member of the Board of Directors of Sonae Sierra, SGPS, S.A. • Chairman of the Board of Directors of Universo Sonae, S.A. Offices held in other entities • Member of the Board of Directors of Sonae Capital Investment, SGPS, S.A. • Member of the Board of Directors of Sonae Indústria, SGPS, S.A. • Member of the Board of Directors of Efanor Investimentos, SGPS SE • Member of the Board of Directors of Love Letters - Galeria de Arte, S.A. • Chairman of the Board of Directors of Enxomil- Consultoria e Gestão, S.A. • Chairman of the Board of Directors of Enxomil – Sociedade Imobiliária, S.A. • Member of the Board of Directors of APGEI (Portuguese Association of Industrial Engineering and Management) • Member of the Board of Directors of Fundação Cargaleiro Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 408 Professional Experience • Structural Designer at Tecnopor (Civil Engineering) (1982-1984) • Manager at EDP (Energy) (1984-1989) • Leader of the Television Project Team at Sonae Tecnologias de Informação, S.A. (1989-1991) • Head of Planning and Management Control at Sonae Investimentos, S.A. (currently Sonae – SGPS, S.A.) (1991-1994) • Director of several subsidiaries of Sonae Distribuição, SGPS, S.A. (currently Sonae MC, SGPS, S.A.) – Retail (1994-1996) • Member of the Board of Directors of Modelo Continente Hipermercados, S.A. (1994-2007) • CFO of Sonae Distribuição, SGPS, S.A. (currently Sonae MC, SGPS, SA) and director of several of its subsidiaries (Retail) (1996-2007) • Executive Member of the Board of Directors of Sonae Capital, SGPS, S.A. (1996-2007) • Executive Vice-Chairman, CFO and Chairman of the Finance Committee of Sonae – SGPS, S.A. (2000-2007) • Member of the Board of Directors of MDS – Corretor de Seguros, S.A. (2004-2009) • Member of the Board of Directors of Sonae Investments BV (2005-2016) • Member of the Board of Directors of Sontel BV (2006-2016) • Executive Vice-Chairman of Sonae – SGPS, S.A. (2007/April 2015) • Member of the Board of Directors of MDS, SGPS, S.A. (Chairman of the Board of Directors since October 2014) (2007/March 2018) • Member of the Board of Directors of Modelo Continente, SGPS, S.A. (Chairman of the Board of Directors since January 2019) (2009/2019) • Vice-Chairman of the Board of Directors of Sonae – Specialized Retail, SGPS, S.A. (2010-2016) • Vice-Chairman of the Board of Directors of Sonaerp – Retail Properties, S.A. (2010-2016) • Chairman of the Board of Directors of MDS Auto, Mediação de Seguros, S.A. (2010-2016) • Member of the High Council of the Portuguese Catholic University (2010-2016) • Member of the Board of Directors of Sonae Center Serviços II, S.A. (currently Sonae MC – Serviços Partilhados, S.A.) (2010-2018) • Member of the High Council of Porto Business School (2011-2015) • Chairman of the Board of Directors of Sonaecom – Serviços Partilhados, S.A. (2012-2016) • Member of the Board of Directors of ZOPT, SGPS, S.A. (2012-2022) • Chairman of the Board of Directors of Sonae RE, S.A. (2013-2016) • Chairman of the Board of Directors of Sonaegest – Sociedade Gestora de Fundos de Investimento, SA (currently designated SFS – Gestão de Fundos, SGFI, SA) (2013-2016) • Chairman of the Board of Directors of Sonae Financial Services, SA (2014-2019) • Co-CEO of Sonae – SGPS, SA (2015-2019) • Chairman of the Board of Directors of SFS, Gestão e Consultoria, SA (2016-2019) • Member of the Board of Directors of Sonae Corporate, SA (2018-2019) • Vice-Chairman of the Board of Directors of Iberian Sports Retail Group, SL (2018-2020) • Member of the Board of Directors of Sonae Sierra, SGPS, SA (Since 2007) • Member of the Board of Directors of MCRETAIL, SGPS, SA (previously Sonae MC, SGPS, SA) (Since 2007) • Chairman of the Board of Directors of Sonaecom, SGPS, SA (Since 2007) • Chairman of the Board of Directors of Sonae Investment Management – Software and Technology, SGPS, SA (Since 2007) • Chairman of the Board of Directors of Público – Comunicação Social, SA (Since 2007) • Chairman of the Board of Directors of Sonae Holdings, SA (Since 2018) • Member of the Board of Directors of Efanor Investimentos, SGPS, SE (Since 2018) • Member of the Board of Directors of Sonae – SGPS, SA (Since April 2019) • Chairman of the Board of Directors of Universo Sonae, SA (previously Sonae FS, SA) (Since 2019) • Member of the Board of Directors of Sonae Capital, SGPS, SA (Since 2019) • Member of the Board of Directors of Fundação Manuel Cargaleiro (Since 2019) • Member of the Board of Directors of Sonae Indústria, SGPS, SA (Since June 2021) MIGUEL NUNO SANTOS ALMEIDA Chairman of the Executive Committee Qualifications • Degree in Mechanical Engineering from Faculty of Engineering of the University of Porto • MBA from INSEAD Offices held in other companies as of 31.12.2023 • Chairman of the Board of Directors of NOS Comunicações, S.A. • Chairman of the Board of Directors of NOS Inovação, S.A. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 409 • Chairman of the Board of Directors of NOS Açores Comunicações S.A. • Chairman of the Board of Directors of NOS Lusomundo Audiovisuais, S.A. • Chairman of the Board of Directors of NOS Lusomundo Cinemas, S.A. • Chairman of the Board of Directors of NOS Madeira Comunicações, S.A. • Chairman of the Board of Directors of NOS Audiovisuais SGPS, S.A. • Chairman of the Board of Directors of NOS Corporate Center, S.A. • Chairman of the Board of Directors of NOS Audio - Sales and Distribution, S.A. Professional Experience • Chairman of the Executive Committee of Optimus Comunicações, S.A. (2010-2013) • Member of the Board of Directors and Executive Director of Sonaecom, SGPS, S.A. (2005-2013) JOSÉ PEDRO FARIA PEREIRA DA COSTA Executive Director Qualifications • Degree in Business Management and Administration from the Portuguese Catholic University • MBA from INSEAD Offices held in other companies as of 31.12.2023 • Chairman of the Board of Directors of NOS Mediação de Seguros, S.A. • Chairman of the Board of Directors of NOS Internacional SGPS, S.A. • Chairman of the Board of Directors of Teliz Holding, S.A. • Chairman of the Board of Directors of NOS Technology – Concepção, Construção e Gestão de Redes de Comunicações S.A. • Chairman of the Board of Directors of NOS Sistemas, S.A. • Chairman of the Board of Directors of NOS Wholesale, S.A. • Chairman of the Board of Directors of NOS Property, S.A. • Chairman of the Board of Directors of Per-Mar, Sociedade de Construções, S.A. • Chairman of the Board of Directors of Sontária – Empreendimentos Imobiliários, S.A. • Chairman of the Board of Directors of Lusomundo Imobiliária 2, S.A. • Chairman of the Board of Directors of Lusomundo Sociedade de Investimentos Imobiliários, SGPS, S.A. • Vice-Chairman of the Board of Directors of Mstar, S.A. • Member of the Board of Directors of Finstar – Sociedade de Investimentos e Participações, S.A. • Member of the Board of Directors of NOS Lusomundo Cinemas, S.A. • Member of the Board of Directors of NOS Comunicações, S.A. • Member of the Board of Directors of Dreamia - Serviços de Televisão, S.A. • Member of the Board of Directors of Dreamia, S.L. • Member of the Board of Directors of NOS Sistemas España, S.L. • Member of the Board of Directors of NOS Açores Comunicações S.A. • Member of the Board of Directors of NOS Madeira Comunicações, S.A. • Member of the Board of Directors of Upstar Comunicações, S.A. • Member of the Board of Directors of Sport TV Portugal, S.A. • Member of the Board of Directors of NOS Corporate Center, S.A. • Member of the Board of Directors of ZAP Media, S.A. • Manager of Empracine - Empresa Promotora de Atividades Cinematográficas, Lda. Professional Experience • Member of the Board of Directors of Group Portugal Telecom acting as CFO and responsible for PT Comunicações, PT.COM and PT Prime companies (2002-2007) • Executive Vice-Chairman of Telesp Celular Participações (2001-2002) • Member of the Executive Committee of Banco Santander de Negócios Portugal, responsible for Corporate Finance (1997-2000) • Started his career in 1990 in McKinsey & Company in Portugal and Spain DANIEL LOPES BEATO Executive Director Qualifications • Degree in Electronic and Telecommunications Engineering from the University of Aveiro • MBA Full Time, IESE Business School – Navarra University Barcelona Offices held in other companies as of 31.12.2023 • Member of the Board of Directors of NOS Comunicações, S.A. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 410 • Member of the Board of Directors of NOS Açores Comunicações S.A. • Member of the Board of Directors of NOS Madeira Comunicações, S.A. • Member of the Board of Directors of NOS Technology – Concepção, Construção e Gestão de Redes de Comunicações S.A. • Member of the Board of Directors of NOS Property, S.A. • Member of the Board of Directors of NOS Mediação de Seguros, S.A. Professional Experience • Marketing Director of B2C at NOS Comunicações S.A. • Project Leader at the Boston Consulting Group (Aug.2012 - Jan.2015) FILIPA DE SOUSA TAVEIRA DA GAMA SANTOS CARVALHO Executive Director Qualifications • Law Degree from the Portuguese Catholic University (Porto) • Postgraduation in Management for Law graduates, Portuguese Catholic University (Porto) • MBA in Management, Portuguese Catholic University (Porto) Offices held in other companies as of 31.12.2023 • Member of the Board of Directors of NOS Comunicações, S.A. • Member of the Board of Directors of NOS Corporate Center, S.A. • Member of the Board of Directors of NOS Açores Comunicações S.A. • Member of the Board of Directors of NOS Madeira Comunicações, S.A. • Member of the Board of Directors of NOS Audiovisuais, SGPS, S.A. • Member of the Board of Directors of NOS Lusomundo Audiovisuais, S.A. • Member of the Board of Directors of NOS Lusomundo Cinemas, S.A. • Member of the Board of Directors of NOS Audio - Sales and Distribution, S.A. • Member of the Board of Directors of Sport TV Portugal, S.A. • Member of the Board of Apritel – Associação dos Operadores de Comunicações Eletrónicas • Member of the Board of APDC – Associação Portuguesa das Comunicações • Vice-Chairwoman of the Board of the General Meeting of Banco Alimentar Contra a Fome Professional Experience • Director of the Legal and Regulatory area of NOS Corporate Center, S.A. • Member of the Legal and Regulatory area of Sonaecom, SGPS, S.A. (2003-2013) • Member of the legal team of Sonaecom, SGPS, S.A. (1998-2003) • Member of the legal team of the Corporate Finance of Banco Português de Investimento, S.A. (feb.1998 - sep.1998) JORGE FILIPE PINTO SEQUEIRA DOS SANTOS GRAÇA Executive Director Qualifications • Degree in Business Management and Administration from the Portuguese Catholic University • MBA from Kellogg School of Management at Northwestern University Offices held in other companies as of 31.12.2023 • Member of the Board of Directors of NOS Comunicações, S.A. • Member of the Board of Directors of NOS Açores Comunicações S.A. • Member of the Board of Directors of NOS Madeira Comunicações, S.A. • Member of the Board of Directors of NOS Inovação, S.A. • Member of the Board of Directors of NOS Technology – Concepção, Construção e Gestão de Redes de Comunicações S.A. • Member of the Board of Directors of NOS Sistemas, S.A. Professional Experience • Director of ZON TV Cabo responsible for Product and Marketing (2010-2013) • Director of Product TV of ZON TV Cabo (2007- 2010) • Project Leader at The Boston Consulting Group (2003-2004) LUÍS MOUTINHO DO NASCIMENTO Executive Director Qualifications • Degree in Business Administration from the Portuguese Catholic University • MBA from INSEAD Offices held in other companies as of 31.12.2023 • Member of the Board of Directors of NOS Comunicações, S.A. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 411 • Member of the Board of Directors of NOS Açores Comunicações S.A. • Member of the Board of Directors of NOS Madeira Comunicações, S.A. • Member of the Board of Directors of NOS Technology – Concepção, Construção e Gestão de Redes de Comunicações S.A. • Member of the Board of Directors of NOS Sistemas, S.A. • Member of the Board of Directors of NOS Inovação, S.A. • Member of the Board of Directors of NOS Lusomundo Cinemas, S.A. • Member of the Board of Directors of NOS Lusomundo Audiovisuais, S.A. • Member of the Board of Directors of NOS Audio - Sales and Distribution, S.A. • Member of the Board of Directors of NOS Audiovisuais SGPS, S.A. • Member of the Board of Directors of Dreamia - Serviços de Televisão, S.A. • Member of the Board of Directors of Dreamia, S.L. • Member of the Board of Directors of NOS Corporate Center, S.A. • Member of the Board of Directors of NOS Wholesale, S.A. • Member of the Board of Directors of NOS Property, S.A. • Member of the Board of Directors of Per-Mar, Sociedade de Construções, S.A. • Member of the Board of Directors of Sontária – Empreendimentos Imobiliários, S.A. • Member of the Board of Directors of Lusomundo Imobiliária 2, S.A. • Member of the Board of Directors of Lusomundo Sociedade de Investimentos Imobiliários, SGPS, S.A. • Manager of Empracine - Empresa Promotora de Atividades Cinematográficas, Lda. Professional Experience • Member of the Executive Committee of Portugal Telecom, responsible for B2C Sales and Marketing (2015-2017) • Manager of the Home Segment & CRM of Portugal Telecom (2007-2015) • Non-Executive Member of the Board of Directors of PT Contact (2011-2014) • Former Manager of Strategic Marketing at PT Multimedia • Former Associate and Manager at Diamond Cluster • Started his career as analyst at McKinsey & Company MANUEL ANTÓNIO NETO PORTUGAL RAMALHO EANES Executive Director Qualifications • Degree in Management from the Portuguese Catholic University • MBA from INSEAD Offices held in other companies as of 31.12.2023 • Member of the Board of Directors of NOS Comunicações, S.A. • Member of the Board of Directors of NOS Açores Comunicações S.A. • Member of the Board of Directors of NOS Madeira Comunicações, S.A. • Member of the Board of Directors of NOS Internacional SGPS, S.A. • Member of the Board of Directors of NOS Wholesale, S.A. • Member of the Board of Directors of NOS Sistemas España S.L. • Member of the Board of Directors of Finstar – Sociedade de Investimentos e Participações, S.A. • Member of the Board of Directors of Upstar Comunicações, S.A. • Member of the Board of Directors of ZAP Media, S.A. • Member of the Board of Directors of Teliz Holding S.A. • Member of the Board of Directors of Brightcity, S.A. Professional Experience • Executive Director of Optimus Comunicações, SA, responsible for Companies and Operators (2010- 2013) • Former Director at Optimus of Home Wireline, Central Marketing, Data Service, Particular Sales, SMEs and Business Development (1999-2009) • Started his career in McKinsey & Co. (1995-1999) ANA RITA FERREIRA RODRIGUES Non-Executive Director Qualifications • Degree in Management from the Faculty of Economics, University of Porto • Postgraduation in Tax Law at the Faculty of Law of the University of Coimbra • MBA at Porto Business School Offices held in other companies as of 31.12.2023 • CFO, APCL Invest, S.A. Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 412 Professional Experience • Manager, PTCG – Consultoria de Gestão, Lda. (2020-2022) • Project Director, Terra Peregrin, S.A. (2020-2022) • Member of the Board of Directors of Santoro Finance – Prestação de Serviços, S.A. (2018-2020) • Project Director, Santoro Finance – Prestação de Serviços, S.A. (2017-2020) • Manager - Transaction Services, PricewaterhouseCoopers - AG Assessoria de Gestão, Lda. (2015-2017) • Head of Control and Consolidation Department of Sonaecom, SGPS (2011-2015) • Associate, Audit, PricewaterhouseCoopers & Associados, SROC, Lda. (2009-2011) ANTÓNIO BERNARDO ARANHA DA GAMA LOBO XAVIER Non-Executive Director Qualifications • Law Degree • Master’s Degree in Economic Law by the University of Coimbra Offices held in other companies as of 31.12.2023 • Partner at Morais Leitão, Galvão Teles, Soares da Silva & Associados • Chairman of the Board of the General Meeting of Têxtil Manuel Gonçalves, S.A. • Chairman of the Board of the General Meeting of Mysticinvest – Holding, S.A. • Vice-Chairman of the Board of Directors of Banco BPI, SGPS, S.A. • Director of BA Glass – Serviços de Gestão e Investimento, S.A. • Member of the Board of Directors of Riopele, S.A. • Member of the Board of Trustees of Fundação Belmiro de Azevedo • Chairman of the Board of the General Meeting of Greenvolt – Energias Renováveis, S.A. • Council of State (since 07.04.2016) Professional Experience • Assistant at Faculty of Law of the University of Coimbra, where he taught Political Economy and Public Finance (1983–1988) • Assistant at Faculty of Law of the University of Coimbra, responsible for the theoretical courses of Administrative and Tax Law (1988–1994) • Professor of the European Studies Course, of the Faculty of Law of the University of Coimbra, where he co-chaired the Political Finances and Tax Harmonisation (1988-1994) • Guest professor of the Law Department in the Portucalense University (1988-1994) • Executive director of SIVA, SGPS, responsible for taxes and investors relationship (1996-1999) • Member of the Board of Directors of FC Porto – SAD (2000-2002) • Since 1985, he acted as an independent legal consultant • Since 2006, Partner at “Morais Leitão, Galvão Teles, Soares da Silva & Associados – Sociedade de Advogados • Non-executive member of Sonaecom, SGPS, S.A. (2017-2018) • Executive director of Sonaecom, SGPS, S.A. (2004–2010) • Vice-Chairman of the Board of Directors of Fundação de Serralves (2000–2010) • Non-executive member of the Board of Directors of Público, S.A. (2000 -2016) • Non-executive member of the Board of Directors of PCJ – Público, Comunicação, Jornalismo, S.A. (2010–2016) • Non-executive member of the Board of Directors of Sonae IM, SGPS, S.A. (2010–2016) • Chairman of the Retirement Committee of IRC (2013) CATARINA EUFÉMIA AMORIM DA LUZ TAVIRA VAN-DÚNEM Non-Executive Director Qualifications • Degree in Management and Company Organisation from Instituto Universitário de Lisboa, ISCTE Instituto Superior de Ciências do Trabalho e da Empresa Offices held in other companies as of 31.12.2023 • Executive Director of Finstar / ZAP • General Coordination of the TV content production studios at ZAP • Executive Member of the Marketing and Product team which she created, launched and currently manages in ZAP, the company engaged with the distribution of TV channels via satellite in Angola and Mozambique Professional Experience • Was part of the startup operation of the company engaged with the distribution of channels via satellite in Angola and Mozambique since 2009 Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 413 • Created and led the Products and Services team of Unitel, the leading telecommunications operator in Angola (2005-2009) • Started her career in the USA as assistant manager in Sentis and Coral, partners of Shell Oil USA (2003-2005) CRISTINA MARIA DE JESUS MARQUES Non-Executive Director Qualifications • Executive MBA from Lisbon MBA Católica, Nova & MIT | Best Student Award • Disciplined Entrepreneurship at MIT Sloan School of Management • Master of science in Business Administration, with specialisation in Finance at CATÓLICA-LISBON School of Business and Economics • Degree in Economics from Higher Institute of Economics and Management Offices held in other companies as of 31.12.2023 • Strategy&Insights Iberia at Cabot Financial (Encore Capital Group) Professional Experience • Member of the Board of Directors of NOS, SGPS, S.A. (since 23.03.2020) • Manager of Terra Peregrin, S.A. (2020-2022) • Project Manager of Santoro-Finance – Prestação de Serviços, S.A. (2016-2020) • Business Consultant of Capgemini Consulting (2013-2016) • Controller of the Information Systems Department of Energias de Portugal (EDP) (2011- 2012) EDUARDO ANTÓNIO SALVADOR VERDE RODRIGUES PINHO Non-Executive Director Qualifications • Law Degree Offices held in other companies as of 31.12.2023 • Partner and Director at Morais Leitão, Galvão Teles, Soares da Silva & Associados - Sociedade de Advogados Professional Experience • Member of the Board of Directors of Englimo - Empreendimentos Imobiliários, S.A. • Founding Partner of Osório de Castro, Verde Pinho, Vieira Peres, Lobo Xavier & Associados - Sociedade de Advogados • Chairman of the Board of Trustees of Romão de Sousa Foundation JOÃO PEDRO MAGALHÃES DA SILVA TORRES DOLORES Non-Executive Director Qualifications • Degree in Economics from University of Porto, Faculty of Economics • Postgraduate Degree in Business – New York University, New York • MBA from London Business School Offices held in other companies as of 31.12.2023 • Non-Executive Member of the Board of Directors of MCRETAIL, SGPS, S.A. • Chairman of the Board of Directors of Sonae Corporate, S.A. • Member of the Board of Directors of Sonae Holdings, S.A. • Executive Member of the Board of Directors of Sonae Investment, BV • Executive Member of the Board of Directors of Sontel, BV • Member of the Board of Directors of Sonaecom, SGPS, S.A. • Non-Executive Member of the Board of Directors of Sonae Sierra, SGPS, S.A. • Member of the Board of Directors of Universo Sonae, S.A. • Member of the Board of Directors of Sonae Investment Management – Software and Technology, SGPS, S.A. • Member of the Board of Directors of Sparkfood, S.A. • Chairman of the Board of Directors of Sparkfood Ingredients, S.A. Professional Experience • Brand manager – JW Burmester, S.A., New York (2003-2004) • Analyst at McKinsey & Company (2005-2007) • Associate at McKinsey & Company (2009-2011) • Deputy Manager of Innovation Management of Portugal Telecom (2011- 2013) • Head of Cloud Business Unit of Portugal Telecom (2013- 2014) • Head of Corporate Strategy of Sonae – SGPS, S.A. (2014-2015) • Head of Group Strategy, Planning and Control of Sonae – SGPS, S.A. (2015-2018) • Professor of the Strategy course – Executive MBA at Porto Business School (2016-2018) • Director of Corporate Centre of Sonae – SGPS, S.A. (2018-2019) Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 414 • Non-Executive Chairman of the Board of Directors of MKTPlace - Comércio Eletrónico, S.A. (2018/July 2022) • Member of the Board of Directors of Sonae RE, S.A. (2021-2022) • Member of the Board of Directors of Iberian Sports Retail, S.L. (2020/Oct. 2023) • Non-Executive Member of the Board of Directors of NOS, SGPS, S.A. (Since 2016) • Non-Executive Member of the Board of Directors of MCRETAIL, SGPS, S.A. (previously Sonae MC, SGPS, SA) (Since 2018) • Chairman of the Board of Directors of Sonae Corporate, S.A. (2018/December 2019 Member of the Board of Directors) (Since 2018) • Member of the Board of Directors of Sonae Holdings, S.A. (Since 2018) • Non-Executive Member of the Board of Directors of Sonae Investments, BV (Since 2018) • Executive Member of the Board of Directors of Sontel, BV (Since 2018) • Member of the Board of Directors of Sonaecom, SGPS, S.A. (Since 2019) • Member of the Board of Directors and Member of the Executive Committee of Sonae - SGPS, S.A. (Since April 2019) • Non-Executive Member of the Board of Directors of Sonae Sierra, SGPS, S.A. (Since 2019) • Member of the Board of Directors of Universo Sonae, SA (previously Sonae FS, S.A.) (Since 2019) • Member of the Board of Directors of Iberian Sports Retail, S.L. (Since 2020) • Member of the Board of Directors of Sonae Investment Management – Software and Technology, SGPS, S.A. (Since August 2020) • Member of the Board of Directors of Sparkfood, S.A. (previously Sonae Food4Future, SA) (Since July 2021) • Chairman of the Board of Directors of Sparkfoods Ingredients, S.A. (previously Wad Lad, SA) (Since April 2023) MARIA CLÁUDIA TEIXEIRA DE AZEVEDO Non-Executive Director Qualifications • Degree in Management from the Portuguese Catholic University • MBA from INSEAD Offices held in other companies as of 31.12.2023 • CEO of Sonae, SGPS, S.A. • Chairwoman of the Board of Directors of MCRETAIL, SGPS, S.A. (previously Sonae MC, SGPS, S.A.) • Chairwoman the Board of Directors of Sonae Sierra, SGPS, S.A. • Member of the Board of Directors of Universo Sonae, SA. (previously Sonae FS, S.A.) • Member of the Board of Directors of Sonae Holdings, S.A. • Member of the Board of Directors of SONAECOM – SGPS, S.A. • Member of the Board of Directors of SONAE INVESTMENT MANAGEMENT - SOFTWARE AND TECHNOLOGY, SGPS, S.A. • Member of the Board of Directors of Público - Comunicação Social, S.A. • Chairwoman of the Board of Directors of Sparkfood, S.A. (previously Sonae Foo4Future, S.A.) • Member of the Board of Directors of Sonae Indústria, SGPS, S.A. • Member of the Board of Directors of SC – Sonae Capital Investment, SGPS, SA. (previously SONAE CAPITAL, SGPS; S.A.) • Member of the Board of Directors of EFANOR – Serviços de Apoio à Gestão, S.A. • Member of the Board of Directors of EFANOR – Investimentos SGPS, S.A. • Member of the Board of Directors of Setimanale SGPS S.A. • Member of the Board of Directors of Casa Agrícola de Ambrães, S.A. • Member of the Board of Directors of Realejo – Sociedade Imobiliária, S.A. • Chairwoman of the Board of Directors of IMPARFIN – Investimentos e Participações Financeiras, S.A. • Chairwoman of the Board of Directors of LINHACOM, S.A. • Chairwoman of the Board of Directors of Praça Foz - Sociedade Imobiliária, S.A. • Manager of Tangerine Wish, Lda. • Vice-Chairwoman of the Board of BRP – Associação Business Roundtable Portugal Statutory Independent Audit Board JOSÉ PEREIRA ALVES Chairman Qualifications • Degree in Economics from Faculty of Economics of the University of Porto Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 415 Offices held in other companies as of 31.12.2023 • Chairman of the Audit Committee of Corticeira Amorim, SGPS, S.A. • Chairman of the Statutory Independent Audit Board of The Fladgate Partnership, S.A. • Chairman of the Statutory Independent Audit Board of Galp Energia, SGPS, S.A. • Chairman of the Statutory Independent Audit Board of SIERRA IG, SGOIC, S.A. Professional Experience • Member of the Statutory Independent Audit Board of GMG – Grupo Manuel Gonçalves, SGPS, S.A. (June 2019 - May 2021) • Member of the Statutory Independent Audit Board of Gestmin SGPS, S.A. (March 2017 – December 2018) • Partner of PwC Portugal (1994-2016) • PwC Leader in Portugal as the Territory Senior Party - Chairman (Jul 2011 - Jun 2015) • Member of the management body of PwC in Portugal, as the Territory Human Capital Partner, as well as being responsible for the area of Knowledge Management (2007-2011) • He was a faculty member on the MBA in Finance at the Faculty of Economics of Porto University (2004-2008) • Joined the Territory Leadership Team, management body of PwC in Portugal, taking responsibility for the areas of Learning & Development and Audit Methodology (2001- 2003) • He was responsible for the coordination of the Postgraduate Course in Auditing at ISAG (2000- 2002) • As partner in PricewaterhouseCoopers (PwC), for over 22 years, was responsible for the coordination of audit work and auditing of accounts for several groups, including Amorim, RAR, Salvador Caetano, Nors, Ibersol, TAP, CTT, Semapa and Jerónimo Martins, among others • In 1993, he became a partner of Bernardes, Sismeiro & Associados, SROC • In 1990, after a professional qualification examination, he became a Statutory Auditor, registered on the official list of the, then, Chamber of Chartered Accountants and became an employee of the Statutory Auditing Firm Boto, Amorim & Associados, SROC • He started his professional activity in 1984 as an audit officer at the international audit firm Coopers & Lybrand and was responsible for the implementation and control of several financial audits, analysis of internal control systems and accounting procedures PATRÍCIA TEIXEIRA LOPES Member Qualifications • Sustainable Management Degree: A Leadership Expedition to the Future, Porto Business School, 2020 • Orchestrating Winning Performance Program course, IMD Business School, June 2019 • Doctorate in Business Science from the University of Porto, Faculty of Economics (FEP) • Master’s Degree in Business Science, with an expertise in Financing (FEP) • Degree in Management (FEP) Offices held in other companies as of 31.12.2023 • Vice-Dean of Porto Business School • Sustainability Officer of Porto Business School • Member of the Remuneration Committee of Caixa Geral de Depósitos • Non-Executive Director of the BIAL Foundation • Member of the Board of Trustees of the Santander Foundation • Member of the Statutory Independent Audit Board of BIAL Professional Experience • Pro-Dean of University of Porto, in charge of strategic planning and management (2008-2015) • Member of the BIOPOLIS Installation Committee, Centre of Excellence for Basic and Environmental Biology, Ecosystem Monitoring and AgroBiodiversity (2020-2021) • Chairwoman of the Statutory Independent Audit Board of the José Marques da Silva Foundation Institute (2012-2016) • Member of the General Council of INESC Porto – TEC (2012-2015) • Member of the Statutory Independent Audit Board of the Fundação Ciência e Desenvolvimento (2008-2012) • Member of the Board of UPTEC – Associação para o Desenvolvimento do Parque de Ciência e Tecnologia da University of Porto (2008-2009) • Director of the Instituto Mercado de Capitais da Euronext Lisboa (1999-2002) • Author of several papers on national and international professional and academic magazines, regular speaker in conferences in its areas of expertise PAULO CARDOSO CORREIA DA MOTA PINTO Member Qualifications • Degree, Master’s, and Ph.D. in Civil Law Sciences at Faculty of Law of the University of Coimbra Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 416 Offices held in other companies as of 31.12.2023 • Professor at the Faculty of Law of the University of Coimbra. He has also taught and given lectures in the field of private law at other universities in Portugal and abroad (Brazil, Angola, Mozambique, Macau, Spain, Germany, etc.) • Manager at Conselhos & Rotinas, Ld.ª. • Member of various Master’s and Doctorate panels, particularly in the field of private law, sometimes as examiner. He has published studies (articles and books) mainly in the field of civil law and fundamental rights and has written preliminary drafts of laws (such as the legal rules governing the sale of consumer goods and direct-mail advertising) • Legal adviser and arbitrator. In this latter capacity, he has chaired or been a member of adhoc arbitral tribunals, set up by the Centres for Commercial Arbitration of the Associação Comercial do Porto and the Associação Comercial de Lisboa or for the International Court of Arbitration of the International Chamber of Commerce Professional Experience • He was Chairman of the General Meeting of the Caixa Geral de Depósitos (2016-2021) • Chairman of the Intelligence Oversight Committee of the Portuguese Republic, elected by the Assembly of the Republic (mar.2013 - dec.2017) • Former Member of Parliament, Chairman of the Parliamentary Budget and Finance Committee of the 11th Legislature (nov.2009 - apr.2011), and Chairman of the European Affairs Committee, of the 12th Legislature (jun.2011- oct2015) • Former Vice-Chairman of the National Political Committee of the PSD (2008-2010) • Constitutional Court Judge, elected by the Assembly of the Republic (11 Mar 1998 – 4 Apr 2007) • Former Legal Advisor of BPI - Banco Português de Investimento (1991-1998) ANA LUÍSA NABAIS ANICETO DA FONTE Alternate Member Qualifications • Degree in Business Management and Administration from the Faculty of Economics and Management of the Portuguese Catholic University • Advanced Training in Taxation by the Portuguese Catholic University • Member of the Portuguese Institute of Statutory Auditors and the Portuguese Chartered Accountants Association Offices held in other companies as of 31.12.2023 • Partner at the Statutory Auditing Firm Ana Fonte & Associados (until September 2023) • Member of the Statutory Independent Audit Board of SDSR – Sports Division SR, S.A. • Chairwoman of the Statutory Independent Audit Board of the Sociedade Gestora dos Fundos de Pensões do Banco de Portugal, S.A. • Member of the Statutory Independent Audit Board at MARTIFER, SGPS, S.A. (alternate) • Representative of the Portuguese Institute of Statutory Auditors in the “Young Professionals” working group of Accountancy Europe (ended at the beginning of 2021) • Assistant to the Director of the Northern Regional Services of the Portuguese Institute of Statutory Auditors (ended at the beginning of 2021) • Since 2016, she has collaborated with the technical department of the Portuguese Institute of Statutory Auditors in the revision of regulations applicable to the profession (ended at the beginning of 2021) • Since 2011, she has been teaching the audit modules of the Preparation Course for Statutory Auditor and she is also a trainer for several audit training sessions organised by the Portuguese Institute of Statutory Auditors as part of the continuous training of Statutory Auditors (ended at the beginning of 2021) • In collaboration with the Portuguese Institute of Statutory Auditors, she is an audit trainer on the preparation course for Admission to the College of Certified Auditors of the Mozambican Order of Accountants and Auditors (ended at the beginning of 2021) • She is a lecturer in auditing on the Degree in Management, as well as on the Master's Degree in Auditing and Taxation and the Financial Information and Business Performance course of the Master’s Degree in Management at the Portuguese Catholic University Professional Experience • Worked at Grant Thornton's Porto office (2010-2016) • Ernst & Young (Mozambique) (2007-2010) • Auditor at PricewaterhouseCoopers – PwC (2001- 2007) Remuneration Committee JOÃO NONELL GÜNTHER AMARAL Chairman Qualifications • Master’s Degree in Electrical and Computer Engineering - Porto University (1988-1993) • MBA Executive – Porto Business School (2000- 2001) Part 1 Part 2 Part 3 Annual Integrated Report 2023 01 02 03 04 417 • Retail Strategic Management – Babson College • Accelerated Development Program – London Business School • Logistics, Materials and Supply Chain Management - Stanford University (2015) Offices held in other companies as of 31.12.2023 • Member of the Board of Directors of Sonae Holdings, S.A. • Member of the Board of Directors of Sonae Corporate, S.A. • Member of the Board of Directors of Sparkfood, S.A. • Member of the Board of Directors of Sparkfood Ingredients, S.A. • Member of the Board of Directors of Universo Sonae, SA. • Member of the Board of Directors of MCRETAIL, SGPS, SA • Member of the Board of Directors of Sonae Investment Management – Software and Technology, SGPS, SA • Member of the Board of Directors of Público - Comunicação Social, SA • Member of the Board of Directors of SIRS - Sociedade Independente de Radiodifusão Sonora, S.A. • Chairman of the Board of Directors of PCJ – Público – Comunicação e Jornalismo, S.A. Professional Experience • IT Manager - Project Manager of Innovation Strategy in North of Portugal • Innovation Agency – Innovation and Systems Analyst (1994-1997) • Diretor for Business Development and Innovation - IT Director responsible for Implementing the SAP Project at Leica Portugal, in direct collaboration with Leica AG in Germany (2001-2003) • Executive Member of the Board of Directors of MCRETAIL, SGPS, SA (since May 2014) • CDO - Chief Development Officer of Sonae - SGPS, SA (Since May 2019) MÁRIO FILIPE MOREIRA LEITE DA SILVA Member Qualifications • Degree in Economy from Porto’s Faculty of Economics • Theoretical part of the Master’s Degree in Business Science, with an expertise in Financing Offices held in other companies as of 31.12.2023 • Member of the Board of Directors of LIVREFLUXO, S.A. • Member of the Board of Directors of Expressão Livre, SGPS, S.A. Member of the Board of Directors of Cofina Media, S.A. Professional Experience • Member of the Board of Directors of NOS, SGPS, S.A. (2009-2020) • Chairman of the Board of Directors of BFA - Banco Fomento Angola (2017-2020) • Chairman of the Board of Directors of Efacec Power Solutions, SGPS, S.A. (2015-2020) • Member of the Board of Directors of ZOPT, SGPS, S.A. (2009-2022) • Member of the Board of Directors of Kento Holding Limited (2009-2021) • Member of the Board of Directors of Banco BPI, S.A. (2013-2017) • Member of the Auditing and Internal Control Committee of Banco BPI, S.A. (2011-2017) • Chairman of the Board of Directors of Fidequity – Serviços de Gestão, S.A. (2006-2020) • Chairman of the Board of Directors of Santoro Financial Holding, SGPS, S.A. (2006-2020) • Administrative Director and CFO of Américo Amorim Group (2002-2006) • CFO of Grundig Auto-Rádios Portugal (1999-2001) • Lecturer at the Portuguese Catholic University (1997-2001), at the Porto Business School (2013- 2020) and at the Porto Accounting and Business School (since 2022) • Team Manager in the Audit Department of PricewaterhouseCoopers (1996-1999) • Analyst in the Analysis and Credit Risks Control Department of BNC – Banco Nacional de Crédito (1995-1996) RUA ACTOR ANTÓNIO SILVA, Nº 9, CAMPO GRANDE, 1600-404 LISBOA www. nos.pt/ir 5493004DM8FGIY6QKF372022-12-315493004DM8FGIY6QKF372023-12-315493004DM8FGIY6QKF372021-10-012021-12-315493004DM8FGIY6QKF372022-01-012022-12-315493004DM8FGIY6QKF372022-10-012022-12-315493004DM8FGIY6QKF372023-01-012023-12-315493004DM8FGIY6QKF372021-12-31ifrs-full:IssuedCapitalMember5493004DM8FGIY6QKF372022-01-012022-12-31ifrs-full:IssuedCapitalMember5493004DM8FGIY6QKF372022-12-31ifrs-full:IssuedCapitalMember5493004DM8FGIY6QKF372021-12-31ifrs-full:SharePremiumMember5493004DM8FGIY6QKF372022-01-012022-12-31ifrs-full:SharePremiumMember5493004DM8FGIY6QKF372022-12-31ifrs-full:SharePremiumMember5493004DM8FGIY6QKF372021-12-31ifrs-full:TreasurySharesMember5493004DM8FGIY6QKF372022-01-012022-12-31ifrs-full:TreasurySharesMember5493004DM8FGIY6QKF372022-12-31ifrs-full:TreasurySharesMember5493004DM8FGIY6QKF372021-12-31ifrs-full:StatutoryReserveMember5493004DM8FGIY6QKF372022-01-012022-12-31ifrs-full:StatutoryReserveMember5493004DM8FGIY6QKF372022-12-31ifrs-full:StatutoryReserveMember5493004DM8FGIY6QKF372021-12-31NOS:MiscellaneousOtherReservesAndRetainedEarningsExcludingProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372022-01-012022-12-31NOS:MiscellaneousOtherReservesAndRetainedEarningsExcludingProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372022-12-31NOS:MiscellaneousOtherReservesAndRetainedEarningsExcludingProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372021-12-31ifrs-full:RetainedEarningsProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372022-01-012022-12-31ifrs-full:RetainedEarningsProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372022-12-31ifrs-full:RetainedEarningsProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372021-12-31ifrs-full:NoncontrollingInterestsMember5493004DM8FGIY6QKF372022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember5493004DM8FGIY6QKF372022-12-31ifrs-full:NoncontrollingInterestsMember5493004DM8FGIY6QKF372021-12-315493004DM8FGIY6QKF372023-01-012023-12-31ifrs-full:IssuedCapitalMember5493004DM8FGIY6QKF372023-12-31ifrs-full:IssuedCapitalMember5493004DM8FGIY6QKF372023-01-012023-12-31ifrs-full:SharePremiumMember5493004DM8FGIY6QKF372023-12-31ifrs-full:SharePremiumMember5493004DM8FGIY6QKF372023-01-012023-12-31ifrs-full:TreasurySharesMember5493004DM8FGIY6QKF372023-12-31ifrs-full:TreasurySharesMember5493004DM8FGIY6QKF372023-01-012023-12-31ifrs-full:StatutoryReserveMember5493004DM8FGIY6QKF372023-12-31ifrs-full:StatutoryReserveMember5493004DM8FGIY6QKF372023-01-012023-12-31NOS:MiscellaneousOtherReservesAndRetainedEarningsExcludingProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372023-12-31NOS:MiscellaneousOtherReservesAndRetainedEarningsExcludingProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372023-01-012023-12-31ifrs-full:RetainedEarningsProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372023-12-31ifrs-full:RetainedEarningsProfitLossForReportingPeriodMember5493004DM8FGIY6QKF372023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember5493004DM8FGIY6QKF372023-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:EURiso4217:EURxbrli:shares