MANAGEMENT REPORT AND ACCOUNTS 2019

ESTORIL-SOL, SGPS, S.A. Fully paid up share capital: 59.968.420 Euros Headquartered at: Av. Dr. Stanley Ho, Edifício do Casino Estoril, 2765-190 Estoril - Cascais Tax id number: 500 101 221

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Governing Bodies	5
Management Report	7
Corporate Governance Report	43
Proposal for the application of the annual results	96
Notes to the Board of Directors Report	99
Holders of qualified shareholdings	102
Financial statements and Notes – Separate accounts	104
Financial statements and Notes – Consolidated accounts	142
Statutory Auditor's Report and Auditor's Report

Report and Opinion of the Statutory Audit Board

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BOARD OF THE ANNUAL GENERAL MEETING

Chairman Deputy Chairman Secretary	- Pedro Canastra de Azevedo Maia - Tiago Antunes da Cunha Ferreira de Lemos - Marta Horta e Costa Leitão Pinto Barbosa
ADVISORY BOARD
Chairman	- Rui José da Cunha
REMUNERATION COMMITTEE
	- Pansy Catilina Chiu King Ho - Jorge Armindo de Carvalho Teixeira - Calvin Ka Wing Chann
BOARD OF DIRECTORS
Chairman Deputy-Chairmen Members	- Stanley Hung Sun Ho - Mário Alberto Neves Assis Ferreira - Patrick Wing Ming Huen - Pansy Catilina Chiu King Ho - Ambrose Shu Fai So - Man Hin Choi - António José de Melo Vieira Coelho - Vasco Esteves Fraga - Jorge Armindo de Carvalho Teixeira - Calvin Ka Wing Chann - Miguel António Dias Urbano de Magalhães Queiroz
EXECUTIVE COMMITTEE
Chairman Deputy-Chairmen	Pansy Catilina Chiu King Ho Jorge Armindo de Carvalho Teixeira Vasco Esteves Fraga Calvin Ka Wing Chann
AUDIT BOARD
Chairman Deputy-Chairmen Alternate	- Manuel Maria Reis Boto - Vitor Pratas Sevilhano Ribeiro - Paulo Ferreira Alves - Lisete Sofia Pinto Cardoso
COMPANY SECRETARY
Secretary: Alternate:	- Carlos Alberto Francisco Farinha - Artur Alexandre Conde de Magalhães Mateus
STATUTORY AUDITOR	- Deloitte & Associados, SROC, S.A. - Represented by Pedro Miguel Argente de Freitas e Matos Gomes

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Dear Shareholders,

Pursuant to the legal and statutory provisions, we hereby present and submit the Annual Report and the Separate and Consolidated Accounts, referring to the year ended 31st December 2019, for your appreciation.

1. THE COMPANY

Estoril Sol, S.A. was incorporated on 25 June 1958 and its company object is "the operation of the gaming concession, on an exclusive basis, in the Estoril permanent area, including other related trade and industries".

On 18 March 2002, ESTORIL-SOL, SA modified its legal status to "Holding Company, SGPS", Public Corporation, thereby no longer directly conducting any business activities, and such business is now to be conducted by various associated undertakings which have been incorporated for this purpose.

The Company held indirectly through subsidiaries interests in the tourism sector, in particular, in gaming activities at casinos. The Company owns the Game Concessions of Estoril (Casino do Estoril and Casino Lisboa) and Póvoa de Varzim (Casino da Póvoa).

Since July 2016 the Company also began exploring the online gambling activity and sports betting through one of its subsidiaries.

During the year 2019 we monitored regularly and in detail the current management of the subsidiaries, giving particular attention to the evolution of gaming revenues and support to streamline and optimize processes.

2. SHARE CAPITAL, SHARES AND DIVIDENDS

At 31st December 2019, the share capital of ESTORIL-SOL, SGPS., S.A. was 59,628,420 Euros, represented by 11,993,684 shares with a nominal unit value of 5 Euros (five).

At the time this report was prepared, ESTORIL SOL, SGPS, S.A. held 62,565 treasury shares.

During the year the Company, did not sold or acquired treasury shares.

The Company's shares are listed on the Lisbon Stock Exchange since February 14, 1986. (Euronext Lisbon ISIN PTESO0AM0000)

In June 2019 the Company paid a dividend of € 0.419 per share related to the year 2018.

The price and trading volume of Estoril-Sol, SGPS, SA securities, on the dates of reporting to the market during the year 2019 were according table below:

Date for disclosing Estoril-Sol, SGPS, S.A. , information
			Price (Euros)
Disclosure	Date	Qtd	Open	High	Low	Close
Annual results for 2018	29/04/2019	100	9,80	9,80	9,80	9,80
Disclose Results - 1st Quarter 2019	30/05/2019	557	9,10	9,10	9,10	9,10
Dividends payment	24/06/2019	164	10,00	10,00	10,00	10,00
Disclose Results - 1st Semester 2019	26/08/2019	1050	9,20	9,20	9,20	9,20
Disclose Results - 3rd Quarter 2019	29/11/2019	100	8,50	8,50	8,50	8,50

3. ESTORIL-SOL GROUP

The Group Estoril-Sol focus its activity in the gambling sector. Currently holds two Game Concessions and three physical Casinos, which together represent approximately 61% of the sector in Portugal.

As a consequence of the new online gaming legislation approved during 2015, the Group founded in September 2015 a new company, Estoril-Sol Digital – Online Gaming Products and Services, S.A., in order to apply for an online gaming license, which was issued on the 25th July 2016.

Within the online gaming activities, which is carried out through Estoril Sol Digital, Online Gaming Products and Services, S.A, a subsidiary company of Estoril Sol (III) – Turismo, Animação e Jogo, S.A., a company owned by the issuer (Estoril-Sol, SGPS, S,A,), signed with Vision Gaming Holding Limited, a company based in Malta, an association agreement, through which it holds a minority interest, corresponding to 49.9998% of the share capital of Estoril Sol Digital, keeping the Estoril Sol (III) SA most of the capital and votes in that company (Estoril Sol Digital, Online Gaming Products and Services, S.A.).

The association agreement foresaw that the investment in the share capital of Estoril-Sol Digital corresponding to 50% when renewing the online casino license, which happened on July 24, 2019.

As at December 31st, 2019, Estoril Sol (III) and Vision Gaming Holding Limited both hold a share corresponding to 50% equity of Estoril Sol Digital. However, Estoril Sol (III) maintains the chairman of the Board of Directors and the control of operations is based in Portugal.

During the year ended December 31, 2019, Estoril Sol, SGPS, SA, incorporated a new company, Estoril Sol Internacional, SA, whose area of activity will be the management of projects / operations in international markets still under study and analysis as of the date of these consolidated financial statements.

ESTORIL SOL – GROUP OF COMPANIES

(a) - Detém acções próprias correspondentes a 10% do seu Capital Social

On December 31st , 2019, ESTORIL-SOL, SGPS, S.A. had the following stakes in the following subsidiaries:

ESTORIL-SOL (III) - TURISMO ANIMAÇÃO E JOGO, S.A., incorporated on 26 July 2001, headquartered in Estoril, the social object of which is the operation of games of chance in areas where this is permitted by law and, in addition, may also operate in the tourism, hotel, restaurant and entertainment industries, as well as providing consultancy services in those areas of activity. This company operates the Estoril and Lisbon Casinos.

Its share capital of EUR 34,000,000 is 100% held by ESTORIL-SOL, SGPS, S.A.

ESTORIL-SOL DIGITAL – ONLINE GAMING PRODUCTS AND SERVICES, S.A. – with a Share Capital of EUR 500.000 is 50% held by ESTORIL-SOL (III) –TURISMO, ANIMAÇÃO E JOGO, S.A.

The Company was founded in September 2015 in order to apply for an online gaming license. The license was issue during July 2016 and the Company immediately started exploring the online gambling activity. During the course of 2017, in August, the company also obtained a license for online sports betting, activity that began on August 6th, 2017.

VARZIM SOL - ANIMAÇÃO, TURISMO E JOGO, S.A., headquartered in Póvoa de Varzim, has the social object, in particular, of operating the gambling concession of Póvoa de Varzim. This company operates the Póvoa de Varzim Casino.

It has a share capital of EUR 33.650.000, 100% held by ESTORIL SOL, SGPS, S.A..

ESTORIL SOL (V) - Investimentos Imobiliários, S.A. - Its share capital of EUR 50,000 is fully paid up by ESTORIL-SOL, SGPS, S.A.. The Company is now idle, but owns a site located on maritime land in the parish of Ericeira.

DTH - DESENVOLVIMENTO TURÍSTICO E HOTELEIRO, SA – With a share capital of EUR 2,429,146, is 100% held by ESTORIL-SOL, SGPS, S.A.. It owns a plot of land in Monte Estoril, where the former Miramar Hotel stood.

ESTORIL - SOL IMOBILIÁRIA, S.A. - With a share capital of EUR 7,232,570, it is 100% owned by ESTORIL SOL, SGPS, S.A.. Its social object is the construction, promotion, management and sale of tourist complexes and real estate.

ESTORIL SOL - INVESTIMENTOS HOTELEIROS, S.A. - With a share capital of EUR 10,835,000 is 90% held by ESTORIL SOL, SGPS, S.A., with the remaining 10% being held by the company itself.

ESTORIL SOL E MAR - Investimentos Imobiliários, S.A. - With a share capital of EUR 1,286,000, is fully paid up by ESTORIL-SOL, SGPS, S.A..

ESTORIL SOL INTERNACIONAL, S.A. - With a share capital of EUR 50,000, it is 100% owned by ESTORIL-SOL, SGPS, S.A, the area of operation will be the management of international projects / operations of the Estoril Sol Group.

4. FINANCIAL ANALYSIS – SUMMARY

Game Revenues

In 2019 the Group maintained the cycle of growth in total gaming revenues. In 2019, the Group's gaming revenues (territorial and online gaming) amounted to 231.1 million Euros, having recorded an overall growth of 2.4% (see distribution of revenues by casino in the chart below). Territorial revenues decreased by 2% and amounted to 192.4 million Euros. Online gaming revenues grew 32% and amounted to 38.7 million Euros

64; 29% 86,5; 38% 45,9; 20% 29,3; 13% 2018 2225, 62,7; 27% 84,4; 36% 45,3; 20% 38,7; 17% 2019 Casino Estoril Casino Lisboa Casino Póvoa Casino Online 231,1

Group Consolidated Results

In 2019 the Group's consolidated EBITDA improved by 2.6%, driven by online gaming, and amounted to 38.9 million Euros.

In 2019 the Group reported a positive Consolidated Net Income of EUR 14.5 million, which fell by 10% compared to EUR 16 million achieved in the previous year, negatively impacted by impairment losses record in the value of the Game Concession of Póvoa de Varzim.

Performance by Segment/Casino

In 2019 only Casino da Póvoa presents a negative net result, although it presents a positive EBITDA, with all the other casinos of the Group achieving positive net results.

Casino Online was the only one that improved its global performance.

Casino de Lisboa remains the business unit that most contributes to the formation of results of the Estoril Sol Group.

Capex

Pursuing a very careful selection of the investments, and excluding the effect of the recognition of right-of-

use assets, the Group made investments (CAPEX) during the year 2019 in the total amount of approximately 1.7 million Euros, mainly in the renewal of game equipment.

The reduction in the volume of investment in recent years coincides with the approaching end of the Estoril Game Concession which includes Casino do Estoril and Casino Lisboa.

Financial Debt

In a concerted effort to financial stability and less dependence on third parties, the Group has consistently reduced its bank debt, this reduction resulted in a significant decrease in financial costs incurred by the Group.

At the end of 2018 and 2019, the Group's balance sheet no longer showed the existence of bank liabilities. Estoril Sol reimbursed 30.3 million Euros of bank liabilities from 2016 to 2018.

5. FINANCIAL ANALYSIS – MACROCROECONOMIC ENVIROMENT

In global terms, 2019 was characterized by high levels of uncertainty due to geopolitical and economic tensions, such as the trade agreements between the USA and China and the constant advances and setbacks in negotiations between the United Kingdom and the European Union which culminated in the approval of the United Kingdom's "Withdrawal Agreement" from the European Union. All of these events resulted in a slowdown in the growth rates of the main world economies.

According to data from Banco Portugal (Boletim Económico 2019), this slowdown also occurred in the Portuguese economy, with the GDP of the national economy growing 2% in 2019 compared to the 2.4% recorded in 2018. These data are all the more relevant as confirmed the trend seen in the first half of 2019, of a moderate deceleration in private consumption in line with the evolution of disposable income.

The first economic prospects of the main international institutes initially pointed to an acceleration of world growth in 2020, driven by the recovery in some Emerging Markets while anticipating the stabilization of the growth of Advanced Economies. However, the most recent events related to the progression of the COVID-19 pandemic place all these initial perspectives in an impossible scenario. It is anticipated that the adoption of restrictive measures to contain the COVID-19 pandemic could result in a worldwide recession, and a significant impact on the movement of goods and people, which may eventually favor and develop online trade and services.

Most of the affected countries, including the Eurozone and Portugal, adopted an expansionary stance, injecting liquidity into the markets, and adopting a set of measures and mechanisms to support companies and maintain jobs. The effectiveness of these measures and others that, in the meantime, will be created, will always depend on the speed of containment of the pandemic and the much desired, slow and progressive, return to normal.

6. FINANCIAL ANALYSIS – CONTEXT OF THE INDUSTRY AND THE GROUP ESTORIL-SOL

- Territorial

In Portugal, the gambling activity in territorial casinos is developed by five business groups that exploit, under a public concession, the twelve casinos existing in the national territory.

The Estoril-Sol Group, through its subsidiaries, operates three of the four largest casinos in Portugal under the concession contracts for the Póvoa Varzim (until 2023), which includes the exploration of Casino da Póvoa, and the Estoril concession contract (until 2020), which includes Casino do Estoril and Casino de Lisboa, accounting for 61% of the volume of game revenue generated in Portugal.

As of the date of this report, the terms and conditions of the specifications relating to the

public tender for the award of the new game concession for Estoril are not yet known. The shareholder structure of Estoril-Sol (III), and the respective Board of Directors, remain expectant as to the launch of the public tender, and their intention is to compete for the new game concession for the permanent game zone of Estoril.

Game revenues generated during 2019 by the Portuguese casinos amounted to 313.9 million Euros, showing a drop of 1.1% compared to the previous year (it was not possible to obtain information regarding the Casino of Ponta Delgada).

Territorial game revenues generated by the Estoril-Sol Group during 2019 amounted to 192.4 million Euros, a decrease of 2% compared to the previous year

- Online

On the 28th June 2015 the online gambling regulation approved by decree-law 66/2015 entered into force.

The issue of the first license occurred one year later, in May 2016, it was a sports betting license. The second license issued by the Turismo de Portugal took place in July 2016 and also for sports betting.

In July 2016 the first online casino license (slot machines, roulette and blackjack) was issued. This license

was granted to the Estoril-Sol Group on July 25th, 2016, and the Group started operations on the same day. Since then ten more licenses have been issued, totaling to this date eleven online casino licenses allotted. In August 2017 the Estoril-Sol Group obtained a license to operate online sports betting, and immediately started the operation. As of December 31st, 2019 there nine online licenses to explore online sports betting.

The twenty licenses issued until 31 December

2019 (11 for casino games and 9 for sports betting), in 2018 there were fifteen, are held by twelve different operators, nine in 2018.

With reference to December 31st, 2019, Estoril-Sol Digital holds the following licenses:

online casino games license (license no. 3) issued by SRIJ (Portuguese Gaming Industry Regulator), valid until July 24th, 2022 after renewal for an additional period of 3 years, and renewable for periods of three years;
online sports betting license (license nº8) issued on August 4th, 2017 and valid until August 3rd, 2020 being renewable for periods of three years. Estoril Sol Digital intends to renew this license during the year 2020.

During the year 2019, online gambling in Portugal generated gross revenues (total bets placed minus players winnings) in the overall amount of 215.4 million Euros, a 41% growth compared to the 152.1 million

Euros achieved in 2018. The sports betting segment accounts for 49.7% (52% in 2018) of the market value and generated gross revenues of 107.1 million Euros, which represents a 36% growth compared to last year. Casino Games accounts for 50.3% (48% in 2018) of the market and generated gross revenues of 108.3 million Euros, an overall growth of 48% compared to last year.

Online Gaming Revenues - 2018 / 2019 (million Euros)

Below is the player's preference by type of game based on the activity data of the last quarter of 2019. (Source: Report of the 4th Quarter of Online Game Activity in Portugal of the SRIJ – Portuguese Regulator)

During 2019, Estoril Sol recorded gross revenues from online gambling, excluding the effect of bonuses given (amount of placed bets after minus players winnings), in the total amount of 44.8 million Euros, 31.5 million Euros related to casino games and 13.3 million Euros related to sports betting (note 6 in the notes to the consolidated financial statements). This performance represents a 23% growth in the volume of revenues recorded by the Group when compared to the previous year. Despite the overall growth in Estoril Sol Digital's revenues, the Group saw its market shares in each of its segments reduced, casino games and sports betting. This situation is perfectly normal in a recent and dynamic market/sector with high growth rates and which has seen a significant increase in the number of licensed operators operating in Portugal. Even so, the growth rates achieved by Estoril Sol Digital in 2019 and the fact that it maintains a very significant market share in the segment of casino games (29%) should be highlighted and interpreted as very positive.

Estoril Sol Digital's gross revenue from casino games, excluding the effect of game bonuses given, represents 29% (41% in 2018) of the total revenue generated in Portugal, amounting to 31.5 million Euros (25 in 2018) and grew 32% over the previous year.

Estoril Sol Digital's sports betting gross revenues, excluding the effect of game bonuses given, represent 12% of the total revenues generated in Portugal in this type of betting, amounted to 13.3 million Euros (11.3 in 2018), a growth rate of 17% compared to the previous year.

- Total Game Revenues (Teritorial + Online)

During the year 2019, the Group recorded games revenues (excluding the effect of game bonuses given), territorial and online, in the total amount of € 231.1 million, representing an overall growth of 2.3% (2% decrease in the land base casinos and 32% increase in the online platform). Estoril-Sol Group has a market share of 61% in land base casino gambling, 29% in online casino games and for 12% of the online sports betting in Portugal.

7. FINANCIAL ANALYSIS - SEPARATE ACCOUNTS

The Company does not directly exercise any economic activity and so the net income recorded in the year, basically arises from of the increased valuation of the financial investments in the subsidiary companies by the equity pick-up method.

The net result for the year 2019 was positive by 9.9 million Euros, and compares with the positive net result of 13.8 million Euros recorded in the previous year. This contraction in the company's results is essentially due to the reduction in gains and losses imputed by the territorial-based gaming subsidiaries, Estoril-Sol (III) and Varzim-Sol, which saw their results fall due to the combined effect of game revenue decrease and by the recognition of impairment losses amounting to 4.2 million Euros related with the estimated recoverable amount of Póvoa de Varzim Game Concession. The improvement in the contribution of online results, 4.5 million euros in 2019 (2.3 million euros in 2018) was not enough to offset the smaller contribution from the Groups territorial operations.

8. FINANCIAL ANALYSIS - CONSOLIDATED ACCOUNTS

The financial performance of the Estoril-Sol Group is strongly dependent on the evolution of gaming revenues. In 2019, the Group saw its gross gaming revenues grow by 2.3%, reaching 231.1 million Euros.

To this increase contributed to online gambling revenues, which amounted to 38.7 million Euros in 2019, a 32% growth and already represent approximately 17% of the Group's total gaming revenues.

The Group's territorial game revenues fell by 2% in 2019 and amounted to 192.4 million Euros (196.4 in 2018).

Net from game taxes, the Group's total revenues amounted to 111 million Euros, an increase of 3.8% over the 107 million Euros achieved in 2018.

	2019	2018	Var %
Game Revenues	231 135 593	225 701 612	2,3%
Special Gaming Tax	(120 115 643) (118 740 151)		a)
Effective Tax rate	52%	52%
Net Revenue	111 019 950	106 961 461	3,8%
Other revenue ( F&B / Entertainment )	9 301 169	10 446 255	-11,0%
Operating costs	(81 416 300)	(79 474 909)	2,4%
EBITDA	38 904 819	37 932 807	2,6%
Amortization e Depreciation	(19 853 462)	(21 140 675)	-6,1%
Impairment losses	(4 177 014)	-
Financial costs	(264 368)	(610 064)	-57%
Corporate income tax (IRC)	(114 814)	(114 645)	0%
Consolidated Net Result	14 495 161	16 067 423	-10%
Equity holders of the Parent Company	9 910 553	13 752 121	-28%
Non-controlling interests	4 584 608	2 315 302	98%
	14 495 161	16 067 423

a) Incluí os montantes registados na rúbrica "Impostos sobre o Jogo" a título de "Imposto Especial de Jogo" e "Remanescente calculado sobre a Contrapartida Minima"

The effective tax rate borne by the Group in 2019 was 52% (territorial games and online games), similar last year. If we analyze it by segment, it can be concluded that the Online operations supported an effective tax rate of 48%, a combined effect of the taxation applied to casino games and sports betting.

Regarding the taxation on the territorial operations, in 2019 Casino de Estoril and Casino de Lisboa supported effective tax rates of 50%, but Casino da Póvoa returned to be borne with an effective tax rate of 61%, similar to last year, once again penalized by the application of the table of annual gaming tax minimum consideration. On this particular subject, recall that the Estoril-Sol Group and the Portuguese Association of Casinos have successively manifested, without success, their displeasure to the relevant entities (Please refer to Relevant Facts chapter).

The other operating revenues of Estoril-Sol, restaurant and entertainment, decreased by 11% to 9.3 million Euros. This decrease was mainly due to a strong reduction in the tax deductions obtained by Casino de Lisboa related to the exhibition of cultural events (see note 6 attached to the Consolidated Financial Statements).

The increase in the Group's operating costs by 2.4% mainly reflects the growth in online operation, namely in online gaming revenues, since a significant part of the costs billed by the main business partners are indexed to these. In 2019, the Group maintained its strong investment in marketing and advertising related to the online operation. This investment/campaign main goal was to target new customers and retain existing customers, but it has proved to be essential to the growth of this new business segment.

The Group's operating results (EBITDA) grew by 2.6%, driven by gaming revenues, reaching 38.9 million Euros in 2019.

Heavily penalized with the current model of land base game revenues taxes, with special focus on Casino da Póvoa Game Concession, the Group recognized impairment losses in the total amount of 4,2 million Euros related to that Game Concession.

The Consolidated Net Profit in 2019 was positive by 14.5 million Euros compared with earnings of 16 Million Euros in the previous year. Of these 14.5 million Euros, 9.9 million Euros belong to the shareholders of Estoril-Sol, SGPS, S.A, and the remainder held by minority and non-controlling interests.

The breakdown in the Group's results, although positive, is mainly due to the decrease in revenues from physical gambling and its taxation assumptions, namely through the application of the table of minimum annual compensations, which in 2019 resulted in the recognition of impairment losses in the value of the Póvoa de Varzim Game Concession. These negative effects were mitigated by the significant improvement in the results of the online operations, still insufficient to prevent the depreciation of the overall results achieved by Estoril-Sol Group.

The future:

The casinos of the Estoril Sol group, like all other Portuguese land based casinos, will experience, due to the pandemic, a very sharp drop in activity that, without the existence of support measures by the Government, will surely jeopardize the survival of the business.

Although a more accurate reading of the future reality can only begin to be understood a few months after the reopening of the casinos (which is expected to take place at the end of June), it will not be surprising that this break in activity may probably amount to around 50% in the first months after reopening.

The dramatic effects of this future reality impose the immediate Government's attention to review the operating conditions of the current concessions, namely with regard to the minimum amount guaranteed and the equity ratio.

Any forecasts of future revenues that are made with a minimum of seriousness, allow us to realize that the necessary figures to meet those indicators reach such an astronomical expression that no concessionaire will be in a position to bear them.

The rebalancing of the concession contracts, an objective for which concessionaires have justifiably been fighting for almost a decade, takes on an even more critical sense at this stage. It is important that the Government, in line with a position already formally taken in relation to another sector of activity, can finally come to accept the fairness of the claims of the gaming concessionaires.

In fact, this would be an opportunity to also review some aspects of the so-called Gaming Law that need to be updated and improved.

Today, the company does not know what is the government's intention regarding the end of the current gaming concessions of Estoril and Figueira da Foz.

As far as we are concerned, we will be available to analyse the proposals that the Government intends to put forward.

9. FINANCIAL ANALYSIS – REPORTING BY SEGMENTS

The Group's activities are mainly focused on the exploration of the Casinos: Estoril and Lisboa, conceded until 2020 to Estoril-Sol (III), and Casino da Póvoa conceded to Varzim-Sol until 2023. Since 2016 the Group started its online activity, casino games, through the ESC Online website, and subsequently started the sports betting activity, under the terms of assigned licenses, valid for 3 years and renewable.

Casino do Estoril game revenues decreased by 2% to end the year with accumulated gross game revenues of 62.7 million Estoril Lisboa Póvoa Online Others

Euros.
Casino	Lisboa
game	revenues
decreased by 2.4%
and	amounted to
84.4 million Euros.
Game	revenues
from	Casino da
Póvoa decreased by
1.3% and achieved
45.3	million Euros
for the year 2019.

62 694 934	84 420 083	45 276 382	38 744 194
-31 400 337	-42 340 862	-27 690 208	-18 684 236

50%	50%	61%	48%

31 294 597	42 079 221	17 586 174	20 059 958









				-1 098 222

				14 495 161
	7 346 388 12% -19 855 249 375	21 414 235 25% 14 481 244	1 859 201 4% -4 177 014 -8 304 748	9 211 039 24% 9 167 513

The general decline

in game revenues from physical casinos penalized the operating results of these casinos, all of which achieved an EBITDA lower than that achieved in the previous year. Penalized by game taxes applied over game revenues from Territorial Game Concessions, in particular, by applying the table of minimum annual compensations, Casino da Póvoa recognized impairment losses in the amount of 4.2 million Euros, which

strongly conditioned its results, which ended up in a total loss (negative net result) in 2019 of 8.3 million Euros. Casino de Lisboa remains the unit that most positively contributes to the formation of results achieved by the Group.

The substantial revenue growth in 2019, a significant 32%, allowed Casino Online to significantly improve its results, which in 2019 amounted to 9.2 million Euros and compared with the 4.6 million Euros achieved in 2018.

10. HUMAN RESOURCES

The salaries and social benefits policy adopted by the Group over the past recent years has been focused on retaining the level of fixed remuneration, promoting the increase in variable remuneration indexed to results, nevertheless, in addition the Group ensures a relevant set of social benefits such as, health insurance, medical support and reimbursement of health expenses excluded from health insurance contracts.

The Group has been encouraging the signing of protocols with several institutions in the context of social responsibility projects, particularly with the Portuguese Association of Casinos and EPIS "Entrepreneurs for Social Inclusion" in terms of support solidarity campaigns in the context of volunteer projects to support students with learning difficulties.

	Avg nr of Employees
	2019	2018
Casino do Estoril	351	356
Casino de Lisboa	318	316
Casino da Póvoa	260	255
Casino Online	28	25

11. SUSTAINABILITY

This chapter is issued to fulfil the obligation provided for in Art. 508-G of the Portuguese Companies Act, amended by Decree-Law 89/2017 of 28 July, by disclosing information that enables the understanding of the progress, performance, status and impact of the Estoril Sol Group's activities, specifically, environmental, social and staff-related issues, the guarantee of non-discrimination, the respect for human rights, as well as measures for fighting corruption, money laundering, terrorist financing and attempted bribery.

The information contained in this chapter applies across all of the Estoril Sol Group, which seeks to define and implement a group of initiatives to reinforce the bases of sustainability, integrating and deepening the various initiatives and policies already in use in some of the Group's companies.

Seeing as the issues above are essential, the Estoril Sol Group is clearly committed to guaranteeing that these matters are respected, implementing action measures – both as a whole as an economic Group or individually taking into consideration the Companies it holds – that are to be implemented at a management level and the strategic and business options that are considered at any given moment, but also with a direct reflection on the performance of all employees or those it interacts with, in its various relationships and capacities.

Under the terms and for the purposes of Art. 6, 508-G of the Companies Acts, we clarify that this chapter was not created in accordance with any national, European Union or international systems.

A. BUSINESS MODEL OF THE ESTORIL SOL GROUP

From the Estoril Sol Group's point of view, the business model, more than a structure of companies and/or a mere dynamic of relationships and company holdings, must be understood within the context of its activities and its specific processes. This subject is a further development of the Management Report, the Corporate Governance Report and other elements for the presentation of accounts, to which it refers, anticipating that the joint analysis would constitute an effective added value in the perception and understanding of the business model and organisation of the Estoril Sol Group.

The Estoril Sol Group company structure is headed by Estoril Sol, SGPS, S.A., the Group's parent company, and includes eight other companies, directly or indirectly held by the aforementioned Estoril Sol, SGPS, S.A.

The Estoril Sol Group focuses its activity in the sector of games of chance, specifically in games played in person, being the holder of the rights to two gaming concessions, in relation to the permanent gaming areas of Estoril and Póvoa de Varzim, and three Casinos: Casino Estoril, Casino Lisboa and Casino da Póvoa, which as a group have a considerable geographic coverage in the country and, overall, its corresponding activity is considered to represent about 63% of the gaming sector in Portugal.

Although it knows that it holds a key position in Portugal in the area of games of chance played by physically present players, the Estoril Sol Group, despite its considerable disagreement with the way the online segment of gaming was regulated in Portugal, which the State had granted exclusively to casinos and, without conceding, presented its application to operate in the online gaming and betting sector, thus keeping in step with new technologies and new trends in gaming.

By virtue of the entry into force of Decree-Law 66/2015 of 29 April, which approved the Legal Regime of Online Gaming and Betting, in September 2015, the Estoril Sol Group formed a new company, called Estoril Sol Digital, Online Gaming Products and Services, S.A., for the purpose of applying for a licence in online games of chance. The licence in question was granted on 25 July 2016.

Within the scope of the online gaming activity, under the direction of the aforesaid subsidiary, Estoril Sol Digital, Online Gaming Products and Services, S.A., Estoril Sol (III) – Turismo, Animação e Jogo, S.A., (company held by Estoril Sol, SGPS, S.A.), signed an associational agreement with Vision Gaming Holding Limited, based in Malta, through which the latter assumed a minority share, corresponding to 49.9998% of the share capital of Estoril Sol Digital, Online Gaming Products and Services, S.A., with Estoril Sol (III) S.A. holding the majority of the share and votes in the aforementioned company. The association agreement foresaw that the investment in the share capital of Estoril-Sol Digital corre-sponding to 50% when renewing the online casino license, which happened on July 24, 2019.

On December 31st, 2019, ESTORIL-SOL, SGPS, S.A. had the following stakes in the following subsidiaries:

Its share capital of EUR 34,000,000 is 100% held by ESTORIL-SOL, SGPS, S.A.

ESTORIL-SOL DIGITAL – ONLINE GAMING PRODUCTS AND SERVICES, S.A. – with a Share Capital of EUR 500.000 is 50% held by ESTORIL-SOL (III) –TURISMO, ANIMAÇÃO E JOGO, S.A.

It has a share capital of EUR 33.650.000, 100% held by ESTORIL SOL, SGPS, S.A..

ESTORIL SOL - INVESTIMENTOS HOTELEIROS, S.A. - With a share capital of EUR 10,835,000 is 90% held by ESTORIL SOL, SGPS, S.A., with the remaining 10% being held by the company itself.

ESTORIL SOL E MAR - Investimentos Imobiliários, S.A. - With a share capital of EUR 1.286.000, is fully paid up by ESTORIL-SOL, SGPS, S.A..

B - ENVIRONMENTAL ISSUES

The Estoril Sol Group has a strong commitment to the environment and to combating climate change. Consequently, the Group has been investing in environmental protection, reducing consumption, waste and emissions.

Over the last several years, the Group has installed more efficient lighting and low-energy consumption systems in its casinos, substantially reducing its energy bill in a setting where operating and lighting casinos represent high operating costs.

The operating companies have been introducing changes in procedures regarding the use of consumables, significantly reducing paper consumption, preferring the use of digital communication methods and standardising the use of consumables, resulting in a better utilisation and lower consumption of these.

The promotion of good practices internally and externally has been a concern of the sustainability policy at the Estoril Sol Group, by informing and raising awareness among staff and the different stakeholders regarding the good practices to adopt, in the pursuit of sustainable development.

Inherent to its own activity, the Estoril Sol Group must continue investing in a strong component of light, image, temperature and atmosphere controls, which makes the use and consumption of high levels of electrical energy inevitable, as well as emissions, although these have been gradually reduced.

Without prejudice in the scope of electrical energy, the Estoril Sol Group has a project of maximisation and efficiency of means, with the objective of enhancing electrical energy savings, not only for reasons of cost control, but also, and especially, for materialising its environmental concerns.

The Estoril Sol Group has focused on guaranteeing that all replacements of material and equipment are performed so as to guarantee high energy efficiency and the basic objective of savings in the levels of energy expended:

throughout 2019, timers were added on lights in spaces that are clearly used on a temporary basis, regardless of the type of users, in other words, timers

have been placed both in spaces used by customers and, especially, in support and work spaces reserved for employees;

the lighting fixtures have been gradually replaced by more modern devices, specifically LED and halogen;
the purchase of fixtures takes into consideration their characteristics, along with their performance levels, classification rating and higher energy efficiency, which are basic elements not only in regard to energy consumption, but also to water consumption and noise pollution.

In terms of the water used, there has been a strong push to raise the awareness of the employees to save water. Water usage in most of the taps is now controlled by the installation of timers, especially in bathroom facilities (where dispensers of hygiene and paper products were also installed to control quantities used). Furthermore, the use of water fountains has been a rather successful measure among employees, providing means while significantly saving water.

Throughout 2019, the Estoril Sol Group estimates, in the various units of its operation, significant water and energy savings, indicative of its concern for the environment.

Regarding liquid and solid waste, the Estoril Sol Group complies with the most rigorous environmental rules, and its facilities are subject to regular inspection by the licencing authorities, in particular. Rubbish is separated in accordance with strict recycling rules that are known by all and which are followed in a joint effort adhered to by all the employees. The company systematically collects cooking oils in an effort to decrease environmental pollution and its potential reuse.

Within the scope of administrative services and BackOffice, the Estoril Sol Group has made a significant investment in the purchase of recycled material, specifically 100% recycled paper, raising awareness among employees for the conscientious use of paper as well as the reuse and recycling of used paper. Printing has been centralised in common use equipment, with default to black-and-white copies, reducing the consumption of paper, as well as consumables, for which there are recycling collection stations, including the employees' personal consumables.

C - SOCIAL ISSUES

Over the years, the Estoril Sol Group has been incorporating the social responsibility aspect into the definition of its management strategies and the annual program of its activities, intervening in the communities close to the areas of its operations, both directly and indirectly, one of its permanent objectives being the support and involvement in places promoting culture, recreation, education, sports, health and well-being.

In line with this guidance, the various companies that make up the Estoril Sol Group maintained a proactive and consistent attitude in 2019, implementing those objectives in various actions and initiatives.

The Estoril Sol Group's social responsibility results from the voluntary integration of its social concerns in the various operations and interactions with customers, employees, partners and suppliers.

The Estoril Sol Group has multiple social concerns, but we must not omit the special importance given to the topic of Responsible Gaming, given that the core of its business activity focuses on the operation of games of chance.

Responsible Gaming is essentially a programme that seeks to guarantee that a player's behaviour, as it interacts with a game, is guided by conscious and rational choices, ensuring that the player exercises full control of the time and money that he can spend, with a clear conscience, in a manner that ensures there is no risk to his family, social and professional responsibilities, dignity and well-being.

The basic principle – always defended and communicated by the Estoril Sol Group in its various intervention means – in which it is a pioneer – is that gaming is and should always be considered a recreational and entertaining activity, no matter how it is played, whether online, in casinos or in bingo halls. The important thing to consider is that in situations where the player does not have these values and principles in mind, and in that sense does not act in accordance with them, gaming may have harmful effects, affecting not only the players but their families and anyone with whom they interact, with repercussions on their social environments, potentially leading to extreme situations of excessive and unregulated playing and to addictive behaviours and practices.

Therefore, at the social level, one of the main priorities of the Estoril Sol Group, is the promotion of and respect for the guidelines of Responsible Gaming and, as such, everything it offers is developed in accordance with the parameters of Responsible Gaming and in the prevention of addictive behaviours.

To this end, the Estoril Sol Group has developed several initiatives, of which we would like to highlight the following: The general availability, on all of the Group's online sites and in its casinos, of information regarding the responsible gaming policy, with specific advice and information on organisations specialised in helping in situations of addiction. Daily awareness and counselling from professionals in the gaming areas, recommending to customers behaviours that are adjusted to their player characteristics. Additionally, a constant concern for effectively monitoring and preventing minors and people prohibited to play from entering its casinos.

Further, within the scope of social concerns, the Estoril Sol Group has been increasingly pushing for the establishment of protocols with various organisations in the area of social responsibility projects, guaranteeing closer proximity to the communities where the various Group companies are located.

Specifically, the Estoril Sol Group has established protocols and partnerships of various types, with institutions of social solidarity, both directly and indirectly providing effective support in specific aid initiatives, both to individuals and communities that are disadvantaged or affected by catastrophes, including:

• the Portuguese Association of Casinos, supporting solidarity campaigns;

• EPIS "Entrepreneurs for Social Inclusion" in the scope of voluntary aid projects for students with academic difficulties;

• the Cascais City Hall and various event organising entities in the promotion of celebrations, concerts and festivals, in the majority of cases, events intended for the whole family, many of them geared specifically to children, open and free to all;

• the Lisbon City Hall, through partnerships in the area of sports and culture. Specifically providing support to the implementation of a national foot race at the Parque das Nações, supporting events at Lisbon festivals and free cultural shows.

• the Póvoa de Varzim City Hall, for holding cultural and sporting events;

• allocation to City Halls, in the areas where the casinos are located, of a significant portion of revenue from gaming taxes paid by concessionaires, to be used in promoting tourist areas and supporting cultural

projects both at city and national levels;

• Group companies are also obligated to allocate a percentage of their gross revenue to the implementation of cultural and sporting events and the promotion of tourism;

• entities responsible for professional training and social integration, specifically through the assignment of professional internships and training; at the Estoril

Casino, for example, the Estoril Sol Group has a strong and long-lasting partnership with the Estoril Hotel School, offering internships to its students, with strong possibilities of employment with the Group;

• the promotion and implementation of professional certification courses for dealers, in a partnership with the SRIJ (Gaming Regulation and Inspection Services) and the Estoril Hotel School, where hundreds of young people earned professional qualifications needed for the access to the profession, many of whom will be employed by the Group's casinos.

• supporting students in the Erasmus programme;

• supporting doctoral scholarships for students who wish to do research into any of the variables of gaming;

The Estoril Sol Group is aware that its gaming operations and the characteristics of its spaces, of recognised splendour, are extremely appealing to the community surrounding these spaces, which, for one reason or another, is attracted to enter. From that perspective, and using a rationale of availability and proximity, the Estoril Sol Group provides access under the legally admissible terms, which is limited as necessary and always conscientious, allowing communities to enjoy the spaces they find attractive, even if, in many cases, that does not mean - nor would it ever mean – involvement in gambling.

D - Employment-related issues

The Estoril Sol Group policy regarding its employees is one of the aspects of the Group's social responsibility, where a focus on acting according to a set of essential principles and values applies to the various structures and hierarchies across the Group. This has led to the design and implementation of an expanded set of measures, some of which are still in the phase of development and testing of results.

Among those important principles and values, and always keeping in mind the key principle of employees as human beings as well as conciliating their professional with their personal life, the Estoril Sol Group would like to highlight the following:

• Fair compensation of its employees, providing wages and benefits in accordance with national legislation, European and International standards and directives and applicable collective bargaining, considered by all as being above average in the sector;

• Establishing work schedules according to applicable legal and contractual provisions in order to balance and reconcile professional life, family life and free time;

• Prohibition and rejection of child labour;

• Beyond that which is established by law, compliance with legal rules regarding holiday time off, national holidays, absences and leaves, specifically those related to parental leave, namely the allocation of a supplementary illness benefit, prescription co-pays for the employee and household, the possibility of

providing in-house medical services, curative medicine and nursing care, in addition to health insurance extended to participating family members. The companies also offer a flexible system for recovering time off, allowing employees to trade shifts among themselves and with the company to accommodate family life;

• Promotion of safety in the workplace environment, providing safe and healthy work conditions;

• Promotion of health in the workplace environment, applying the legal norms in effect regarding occupational health;

• Respect for the freedom of association and exercise of labour union rights within its establishments;

• Non-discrimination on the basis of gender, race, religion or others where there could be differentiation, both during the recruiting and hiring processes and in the fulfilment of professional activities under work contracts;

• Promotion of employability of foreign workers, applying the legal standards in effect regarding foreign labour, respecting the same standards and rights applicable to national workers;

• Development of its disciplinary practices in strict compliance with procedural standards and the adversarial procedures provided for in law;

• Promotion of life-long learning both within and outside the Group's companies;

• Rejection of harassment or abuse, promotion of the employee's rights to report and file a complaint any time they have knowledge of any breach of legality or duties or any other similar situation that legitimises the complaint/report, with the guarantee that the Group's companies will follow through on the complaint/report.

Some of the measures implemented regarding these principles and values, due to their relevance and scope, call for a more detailed mention.

Therefore, in regard to employee wages, for example, we must point out that over the past few years the Estoril Sol Group has adopted a policy of remuneration and social benefits that favours the limitation of fixed wages, promoting an increase of variable wages tied to results, thus achieving an effective stimulus of employee dedication and performance, of motivation for teamwork and of reaching overall results that are as favourable as possible.

In addition, the Estoril Sol Group has guaranteed a significant set of benefits and social perks in the area of health, specifically: health insurance, medical support and prescription co-pays.

In this regard, it is worth remembering that Estoril Sol (III) Turismo, Animação e Jogo, S.A., a company that operates the Estoril Casino and the Lisbon Casino and which employs 679 workers, signed a new Business Agreement that ensures the maintenance of benefits and social perks that set apart, in a positive manner, these employees and the Estoril Sol Group in the country's employment landscape.

In fact, the Business Agreement signed, and the terms and conditions reached clearly reveal the indispensable and significant collaboration of the Workers' Committee, with whom the management body has an excellent relationship and its complete harmony with the SITESE – Workers and Service Technicians Syndicate and the SPBC – Professional Dealers Syndicate.

On the other hand, within a professional context that is constantly changing, training in all its aspects is increasingly a felt need among professionals and encouraged by Group companies to improve skills and abilities.

With this objective, several training initiatives were carried out by the Estoril Sol Group in 2019, operating in various education and training areas, excelling in the areas of gaming, compliance and personal and group security;

In addition to these measures, the concern for security in its operations and that of its employees is also a focal theme in the Estoril Sol Group policy.

This security policy has two aspects at its core: on the one hand, employee security in the face of potential abuse by customers, whether in accessing gaming areas, or in those areas; furthermore, the safety (hygiene and health) of employees in the face of risks inherent to the duties they each perform.

In the first of the two aspects, and considering the specific characteristics of its operations, the Estoril Sol Group ensures special security conditions for its employees, not only through an internal private security service, with staff trained specifically for control and security duties, supplemented with the hiring of a specialised security company. Added to these are electronic security systems, duly notified and authorised by legal entities.

Keeping in mind the prevention and minimisation of the risks inherent in their activities, they have specialised technical surveillance services at their disposal, responsible for the strict enforcement of the physical safety standards for customers, staff and facilities as well as compliance with the legislation that oversees the gaming sector in Portugal. Furthermore, it is important to not forget that Portuguese casinos are subject to a constant, on-site, monitoring by the State using Gaming Inspection Services from the Portugal Tourism Institute, I.P..

Periodically, with the cooperation of an outside entity, risk analyses are made of the established procedures and physical safety of assets.

In the second aspect mentioned above, the Estoril Sol Group has the support of a company providing Hygiene, Safety and Occupational Health services in order to guarantee the proper management of risks associated with the main activities carried out. This service includes awareness-raising sessions and plans for an evacuation drill at locations where employees usually exercise their duties.

In addition to this partnership, a group of first responders was created, qualified and trained for basic life support, in the event of an emergency. This team of first responders consists of internal staff of the Estoril Sol Group.

Additionally, companies in the Group annually monitor and evaluate workplace accidents and develop corrective measures. In 2019, considering all the employees of the Estoril Sol Group, the number of workplace accidents was very small and none of them was a fatal accident.

E - EQUALITY BETWEEN MEN AND WOMEN AND NON-DISCRIMINATION

Of around 981 employees that were part of the Estoril Sol Group workforce during 2019, 79% were men and 21% were women.

The employee average age was 46.

For quite some time, the diversity of its human resources structure being evident, the Estoril Sol Group has assumed the commitment of promoting equality in all its aspects, based on age, gender, qualifications, personal choices and/or professional experience.

At the Estoril Sol Group, we encourage a culture of sharing, cooperation, active dialogue, which is open to contradictory voices and conducive to the emergence of new ideas, even if unorthodox or disruptive. We believe that the strengthening of a culture of diversity and inclusion should serve as a reference to employees and their alignment with company values and, at the same time, contribute to a continual renewal of business that is in line with the expectations of the various stakeholders.

Equality of opportunities is defended, and no type of discrimination is allowed in the workplace, be it related to age, gender, race, social origin, religion, sexual orientation and physical aptitude, regardless of the hierarchical level from where that discrimination stems.

The Estoril Sol Group seeks to actively promote gender diversity during the employee's time within the company, specifically in the following ways:

• in recruiting processes, it is the Estoril Sol Group's recommended policy that recruiters present a list of candidates that is balanced in terms of representation of both genders;

• in the various hierarchical levels and functional, structural, and organisational roles, it is the Estoril Sol Group's recommended policy that teams from the different companies / employing entities consist of members from both genders, in a balanced manner, while still appropriately matching each employee to the duties to be performed;

• all performance evaluations, promotions and salary review procedures are subject to careful and objective monitoring, in order to guarantee a proper and balanced management in all teams, without favouritism and/or discrimination, positive or negative, and in strict conditions of equality.

Finally, seeing as ethics is an integral part of culture and corporate values at the Estoril Sol Group, a Code of Conduct was approved during 2017.

This Code of Conduct establishes the ethical principles and basic rules of conduct, which should govern the actions and performance of all Group employees, including equality of treatment, non-discrimination and the prohibition of harassment. The Code of Conduct applies to all Group professionals, regardless of their duties, their position in the hierarchy and/or any other factor.

It is worth noting that throughout 2019, no complaints were filed regarding ethically objectionable behaviour, and specifically any that violated the Code of Conduct, whether by employers or any of their employees.

F - HUMAN RIGHTS

Human rights directly contribute to a more inclusive and sustainable growth of the country's economy. Portuguese, European and International legislation protect human rights in an encompassing and effective manner. Through its operations and the way it manages, develops and carries out its business, in general, and, specifically, through the approval of the Code of Conduct and the implementation of measures it proposes, it guarantees the strict compliance with the legislation in force for defending and respecting the human rights of all those with whom it interacts.

G – RIGHT TO DATA PROTECTION

The Estoril-Sol Group has always observed strict discipline regarding the privacy and guarantee of the rights of the personal data holders that, by commercial option, whether by legal imposition, was collecting and treating, in compliance with national and community legislation in namely Law 103/2015, of 24th August.

It is well known that casinos, like no other establishment in Portugal, have long had identification services and that even after such services are not necessary, casinos by legal imposition continue to collect and treat certain personal data maintained in a database administered by the Portuguese Service of Regulation and Inspection of Games (SRIJ), imposing, by law, to the employees of the concessionaires the duty of secrecy.

In line with recent legislative developments in the field of registration and processing of personal data, notably those resulting from the entry into force of Regulation (EU) No 2016/679 of 27 April 2016, the Estoril-Sol Group appointed in each of its companies a Data Protection Officer, which took responsibility for the management and organization of policies for the collection and processing of personal data, ensuring, on the one hand, that companies to produce and make available, at appropriate places, the regulatory informational instruments on such matters, on the other hand the internal development of the collective conscience on related topics and the implementation of good practices, and on the other hand the coordination of the management of the existing data, ensuring full protection of the rights of holders and the adequate use of existing data.

H - FIGHT AGAINST CORRUPTION, MONEY LAUNDERING AND TERRORIST FINANCING CRIMES

Within the scope of operating games of chance, the concerns and measures for fighting corruption, money laundering and terrorist financing take on particular significance.

In this battle, which should be fought by all, the Estoril Sol Group approved a Code of Compliance during 2017, applicable to its corporate bodies and all its employees as they perform their duties.

In order to ensure strict compliance of the principles, rules and norms established in this matter, the Estoril Sol Group appointed a Compliance Officer who has carried out a process of identifying risks and evaluating a strategy for improvement and awareness, intended for all resources, from a perspective and with the objective of "being fully compliant".

The formalisation of these rules, most of which were already in practice at the Estoril Sol Group, allowed for a careful and methodical systemisation and a binding disclosure, with the general purpose of contributing to the creation of an organisational model that enables the identification, mitigation and, if possible, elimination of risks to which the Estoril Sol Group is exposed.

At its core, that task seeks to take the risks, most of which have been identified, and link them to the standards to which the Estoril Sol Group is subject (whether general or special, inherent to the particularities of the activities it carries out) and among these norms, those specifically related to the prevention and repression of corruption, money laundering and terrorist financing crimes.

According to the norms established, both nationally and internationally, and for the purpose of preventing gaming activities, and casinos in particular, from being used as the means for money laundering operations, the Estoril Sol Group has the duty, which it fulfils with the strictness incumbent on it, to communicate to the legal authorities the existence of operations that raise well-founded suspicions, and within the applicable legal framework.

The Code of Compliance imposes on company bodies and all Estoril Sol Group employees a set of obligations, among which we highlight the following:

• Duty to identify: The identity of customers in situations that are deemed suspect must be required, verified and recorded;

• Duty to refuse: The completion of any transactions in situations that are deemed suspect must be refused;

• Duty to communicate: The management body or designated person responsible must, at its own initiative, guarantee that any situation it considers irregular and that it becomes aware of or regarding which it has suspicions is immediately communicated to the Attorney General of the Republic and the Financial Information Unit;

Duty to cooperate: the corporate governing bodies, as well as all Estoril Sol Group employees, must ensure their prompt and complete willingness to cooperate when requested by the Attorney General of the Republic and/or the Financial Information Unit within the scope of their responsibilities;

• Duty to maintain confidentiality: Criminal investigations must be considered bound to absolute confidentiality, and as such it is strictly forbidden to disclose to customers or third parties (specifically to those who transmitted the communications as legally required) that a criminal investigation is in progress;

• Duty to train: The Estoril Sol Group must adopt the necessary measures so that its employees, whose duties are especially significant for the purposes of preventing money laundering and terrorist financing, have the appropriate knowledge for the duties imposed by the legislation in effect and should organise specific and periodic training programmes adapted to the various sectors of activity;

• Duty to verify the issuance of cheques: Special measures must be adopted to take care in cases when payments by cheque are accepted, specifically in gaming rooms, taking precautions that these fulfil the legal requirements and are only used in situations that are specifically provided for by law.

In implementing the inherent measures – equipped with a Code of Compliance that is scrupulously followed, plus having appointed a Compliance Officer – the Estoril Sol Group has placed itself at the level of entities that, in an organised and diligent manner, ensure the fight against corruption, money laundering and terrorist financing.

In addition to a Compliance Code, the Estoril Sol Group has approved and widely disseminated a Code of Ethics and Professional Conduct.

The Code of Ethics and Professional Conduct embodies the principles of action and the mission of the Group Estoril Sol, constituting a guide for the daily action of everyone to whom it is addressed, so that they can guide their decisions, their behaviors, their actions and omissions in accordance with those that are recognized, are the principles and values of the Group Estoril Sol. Specifically, this Code aims to:

Establish standards of professional behavior with regard to the Group's relations with its Employees, among themselves, between them with partners, customers, suppliers and other Interested Persons, internal or external, namely with public institutions and entities;
Create mechanisms to prevent infringements and prohibited conduct or that, in some way, are worthy of censorship;
Create the monitoring and control mechanisms that ensure the intended effectiveness of the entire content of this Code.

Along with the direct compliance with legal and regulatory standards, it is through the commitment to comply with this Code that each and every one assumes itself as an integral part of the Estoril Sol Group's identity, respecting and proclaiming the principles and values defended.

The non-observance of the rules contained in this Code of Ethics and Professional Conduct determines, for its Recipients, civil liability (contractual or non-contractual), criminal or administrative offense that may apply to the case, without prejudice to disciplinary or statutory liability in the case of non-compliance by Employees.

All Recipients have a duty to report, through the available channels, any violation of this Code of which they are aware, with the express guarantee that there will be no retaliation against anyone who, in good faith, reports abnormal conduct, using the procedures established for this purpose end.

Participations must be submitted in writing to the body responsible for monitoring and supervising this Code through the email address:

[email protected] or sent, by letter to Apartado 383, 2766-801 Estoril, being able to follow (or not) the formulary model available at www.estorilsolsgps.pt.

F - ATTEMPTED BRIBERY

Bribery attempts are an inherent risk of any business activity, but it is well known that gaming activities are especially vulnerable to this type of practice. In any case, the Estoril Sol Group projects and instils in each and every one of its employees ethical behaviour that seeks to overcome and remove inherent risks.

We emphasise that the Estoril Sol Group has always vehemently condemns these practices, communicating and reiterating this principle to its employees.

In any event, the Estoril Sol Group intends to formalise a specific policy and develop awareness and refreshment initiatives for all its employees in a perspective of fighting bribery, specifically identifying risks, alerting to the behaviour and establishing procedures for communicating irregularities.

Naturally, any irregularities detected during the course of their duties – applicable also to matters of fighting corruption, money laundering and terrorist financing – must be communicated to Gaming Inspection Services / Portugal Tourism, I.P., without prejudice to their monitoring responsibilities.

12. FINANCIAL POLICY OF THE GROUP

The Companies of the Estoril Sol Group pursue a financial policy based on the preservation of its financial independence, fundamentally based on the resources released each year.

With the support of various banks, the subsidiaries use a number of variable rate financial instruments, the maturities of which are negotiated according to the foreseeable ability to release funds.

13. RISK MANAGEMENT

In the normal course of their activities the Group Companies, as concessionaires of gaming operations, are exposed to a number of risks and uncertainties, as identified below:

Physical and Contractual Risk:

The companies of the Group, aiming to prevent and minimize the risk inherent to their economic activities, have specialized technical services of supervision and control, responsible for the strict fulfillment of the standards of physical safety of customers, employees and installations and also compliance with the legislation that regulates the Gaming activity in Portugal, and it should be pointed out that Portuguese Casinos are subject to the permanent supervision by the State through the Gambling Inspection Service of the Instituto do Turismo de Portugal I.P. Periodically, with the collaboration of an external entity, risk analyses are carried out on the procedures used and on the physical safety of the assets.

Concessions for operations in gambling and games of chance in the gaming areas of Estoril and Póvoa de Varzim are operated within the normative context of the contractual and legal framework of the corresponding concession contracts and of the specific legislation governing the sector of gaming activities at casinos, as they are subject to permanent inspection by the State, via the Serviço de Inspecção de Jogo do Turismo de Portugal, I.P..

The Estoril-Sol Group, through its subsidiaries, operates under the concession contracts, Póvoa de Varzim permanent game concession area (until 2023), which includes the exploration of Casino da Póvoa, and the Estoril game concession area (until 2020), which includes Casino do Estoril and Casino de Lisboa. As of this date, the terms and conditions of the specifications relating to the public tender for the award of the new game concession for Estoril are not yet known. The shareholder structure of Estoril-Sol (III), and the respective Board of Directors, remain expectant as to the launch of the public tender, and their intention is to compete for the new game concession for the permanent game zone of Estoril.

Estoril Sol is also present in the online business regulated by the "Legal Regime for Online Gambling and Betting (RJO)", approved by Decree-Law No. 66/2015, holding the following licenses:

online casino games license (license no. 3) issued by SRIJ (Portuguese Gaming Industry Regulator), valid until July 24th, 2022 after renewal for an additional period of 3 years, and renewable for periods of three years;
online sports betting license (license nº8) issued on August 4th, 2017 and valid until August 3rd, 2020 being renewable for periods of three years. Estoril Sol Digital intends to renew this license during the year 2020.

Business Risk:

Pursuant to the concession contracts, the Portuguese State grants concessionaries exclusive rights to gambling and operations of games of chance, in exchange for high initial payments and high annual tax rates. Nevertheless, the Portuguese State has proven to be unable to regulate its citizens' access to countless online casinos that abound today and which constitute a growing factor of unfair competition, both because they account for a significant increase in illicit supply and because they constitute a flagrant source of tax evasion.

Furthermore, the no less relevant fact that Decree-Law no. 275/2001 provides for the payment of minimum compensations, which were established on the basis of annual revenue growth at current prices, until the end of the concession, which in the current macroeconomic scenario of permanent crisis , leads to the annual counterpart deliveries amounting to more than 50% of gross revenue.

However, in view of the imbalance in the concession contracts that urgently needs to be regularized in favor of the Concessionaires, as well as the revenue from Tourism, we believe that the Portuguese Authorities will do everything to restore the necessary balance, and that this fact will be overcome. If this is not the case, the Concessionaires are taking legal action for this, in order to assert their rights.

Cyber Risk:

Given the characteristics of the online gaming business, there is the risk of cyber attacks on the network and online platforms of the company that impact critical business information. In order to address this risk, a number of audits are carried out periodically, such as security audits, intrusion tests and vulnerability assessments.

Financial Risk:

The significant investments that the Group Companies have made in recent years, among which we would draw attention to the amount paid for the extension of the concession contracts of the zone of Estoril and Póvoa de Varzim, the initial payment made relating to Lisbon Casino and the investments made pertaining to the renewal, modernization and expansion of the Casinos, have, in the recent past, involved increased indebtedness which, combined with the changes in market interest rates, resulted in increased financial costs and a potential liquidity risk. Depending on the operating funds that are freed up, we feel the financial risk to which the associated undertakings are exposed is minimal, and the same understanding has prevailed in the examination carried out by financial institutions, as shown by the fact that assets guarantees are dispensed with for operations under contract. At the end of 2018 and 2019, the Group's balance sheet no longer showed the existence of bank liabilities.

Credit Risk:

Portuguese legislation forbids casino concessionaries from granting credit to gaming activities, and so, in this regard, Group Companies are not exposed to credit risk. Other revenue from restaurant and entertainment activities, which account for only 3,0% of revenue, therefore represents insignificant exposure.

Exchange rate Risk:

All operations are carried out in Euros, and so the Company has no exchange rate exposure.

14. RELEVANT FACTS

During 2013, after a unanimous vote taken at the headquarters of the Portuguese Association of Casinos, the operating companies from the Group Estoril-Sol, have filed lawsuits against the State in which they seek to be restored the financial balance of Gaming Concessions. Such a claim is founded, among other reasons, because the State, through its actions and omissions has given rise to changes in circumstances that were the basis for the negotiation of the gaming concessions. Of them highlights the fact that it was assumed for tax basis a continuing and significant increase of gaming revenue throughout the concession period. Despite not having occurred this proposition due to the economic climate and as a result of the State attitude in relation to online gambling and illegal gambling, among others, it continued to require them to pay very high taxes, calculated on revenue that the Concessionaires did not obtain. Thus, remained no alternative to the Concessionaires than to challenge with the competent Administrative and Fiscal Courts the settlements of tax to that were presented to them, and for that purpose submited the necessary judicial guarantees. However by the time of approval of this report, and despite the fact that all tax settlements were contested by the Group, all taxes are without exception paid and for this reason the Group Estoril-Sol does not have any overdue debt related with game taxes. (Notes 28 and 31 from the Consolidated Accounts)

15. SUBSEQUENT FACTS

Between the 31st of December 2019 and the date of this report, no relevant facts occurred that could materially affect the financial position and the future results of Estoril-Sol, SGPS,S.A. and the other Companies of the Group, in addition to the reported below:

During the first quarter of 2020 the Group paid 26,334,204 Euros referring to the annual payment of the Special Gaming Tax and 7,709,047 Euros referring to the Special Gaming Tax relating to the period of December of 2019 (Note 28).
In August 2020, the sports betting license granted to Estoril Sol Digital will expire, with the intention of the shareholder and management structure of Estoril-Sol Digital to renew it for a period identical to the initial one, three years, similarly to what happened with the license of casino games, renewed during the year 2019. The preparatory work for the renewal of the sports betting license already started and we do not foresee any obstacles to its conclusion in time to allow the renewal of the license.

In the legal framework, the approval of the State Budget for the year 2020 included measures aimed to change the taxation of online gambling. Thus, tax rates will no longer be fixed in an increasing range that varies according to the volume of revenues / bets placed, maintaining the other calculation principles, that is, the tax basis will remain unchanged, gross revenue in casino games and the amount of placed bets for sports betting.

For casino games the tax rate to be fixed will be 25% (between 15% and 30% depending on the gaming revenue achieved in the current framework), with Estoril Sol Digital paying a fee of 27% during 2019. In sports betting, greater earnings will be expected for the sector as a whole and for Estoril Sol Digital in particular, since the tax rate to be fixed will be 8% over the amounts bet by the players. Estoril Sol Digital paid a tax rate of 12.8% during 2019 on the amounts bet on its online platform (ESC Online).

It should be noted that, on the date of approval of these consolidated financial statements, the World Health Organization declared, on March 11, 2020, the existence of a Pandemic related to Coronavirus 2019 (Covid-19), as a result of which the Portuguese Government has been establishing a set of exceptional and temporary measures related to the epidemiological situation of Covid-19. It is anticipated that the adoption of restrictive measures to contain the COVID-19 pandemic could result in a worldwide recession, severe restrictions on economic activity and a significant impact on the movement of goods and people, which may eventually favour and develop the e-commerce and online services.

Following the events mentioned above:

a) The Group Estoril-Sol, through its subsidiaries Estoril-Sol III and Varzim-Sol, was the first Gambling Concessionaire in Portugal to determine the closure of its physical casinos, which it did voluntarily and as a way to protect its workers and customers against the spread of the disease caused by the Corona virus COVID-19.
b) by order of the State Secretary for Tourism, the closing of the physical casinos was authorized, beginning at 3:00 pm on March 14th, 2020, for a minimum period of 14 days, after which the authorities should, jointly with gambling concessionaires, reassess this measure.

After said closure required by the Group, the legal duty to close the casinos was determined by the provisions contained, first by Decrees No. 2-A / 2020 and 2-B / 2020, of March 20 and April 2, respectively, and after Decree No. 2-C / 2020, of 17th April, which gives effect to declarations of a state of emergency, decreed by Decree of the President of the Republic No. 14-A / 2020, of 18th March and then renewed by Decree of the President of the Republic no. 17-A / 2020, of 2nd April, and again renewed by Decree of the President of the Republic no. 20-A / 2020, of 17th April which is now effective until 02nd May 2020.

c) In accordance with the current evolution of the pandemic and the restrictive measures associated with the state of emergency, as well as the rapid widespread deterioration of economic conditions that have occurred on a global scale, the suspension of physical casino activity will continue, while the Group's online operations, including licenses for casino gambling and sports betting, owned by Estoril Sol Digital, Online Gaming Products and Services SA (Esc Online), will remain active.
d) In this context of closing all activity in physical casinos, uncertainty regarding the evolution of the pandemic, its duration and impact on the economic prospects of the Estoril-Sol territorial businesses, the subsidiaries Estoril-Sol III and Varzim-Sol decided to apply, with effect from 10th April 2020, the "Simplified Lay-off" measure provided in paragraph 1a), of article 4 of Decree-Law no. 10-G / 2020, of March 26th.
e) The "Simplified Lay-off" measure resulted in the temporary suspension of work contracts or in the reduction of the working hours of the vast majority of Estoril-Sol III workers and Varzim-Sol workers.
f) Mandatory "Contingency Plans" were immediately activated, in order to save:
- the health and compliance with the basic rules of hygiene and safety at work in this context of a pandemic, to all workers not covered by the Lay-off measure or who have seen their working hours reduced, as well as all providers of external services that continue to ensure the minimum services of the companies involved;
- the assets, physical facilities and equipment of the subsidiaries affected by the temporary closure of the casinos.
g) In addition to the measures indicated above, the gaming subsidiaries of the Estoril-Sol Group have also adopted a series of measures with the aim of adapting their cost structure to the current reality, temporary closure of physical casinos. These measures involved the renegotiation of service provision contracts in the gambling areas revisiting the contracted service levels, such as: surveillance, reception and f&b areas, maintenance and cleaning, fees and commissions directly related to the gambling volume and activity on the gaming areas/rooms.
h) In this environment of uncertainty, the Estoril-Sol Group, within the scope to fulfill the respective concession contracts and the continuity of its operations, will continue to monitor, with the prudence required in these moments, the economic and contractual impacts resulting from the temporary closure of its physical casinos.

According to the information available on this date, the Board of Directors, which is currently evaluating the measures taken in the meantime to mitigate the impacts on territorial operations, based on the financial capacity of the Group, which presents "Cash and its equivalents", on 31 December 2019 of approximately EUR 83 million, considers that the going concern assumption, used in the preparation of the Group's consolidated financial statements as of December 31st, 2019, remains appropriate on the present date, being however uncertain the future impacts for the Group arising from this situation.

16. DECLARATIONS

Declaration of true, complete and appropriate information

The members of the Board of Directors of Estoril-Sol, SGPS, S.A. assume responsibility for the veracity of the information contained in this Annual Report, certifying that that there are no omissions that they are aware of, which faithfully portrays the evolution of the business, performance and position of the company and of the companies included in the consolidation perimeter, and that it contains an appropriate description of the main risks and uncertainties that face the companies of the Group. The separate and consolidated financial statements, prepared in conformity with the applicable accounting standards, reflect a true and appropriate image of the assets and liabilities and of the financial situation and results of the issuer, as well as of the companies included in the consolidation perimeter.

17. ACKNOWLEDGMENTS

The Board of Directors wishes to publicly express its gratitude to all the clients for their preference and trust deposit on Estoril-Sol Group companies. A word of appreciation and recognition to all of those who cooperated with us during the year, namely to the Members of all the Corporate Offices and to the Workers of the Group Companies.

Estoril, 27 th of April, 2020

The Board of Directors

Chairman Stanley Hun Sun Ho
Vice-Chairmen Mário Alberto Neves Assis Ferreira
- Patrick Wing Ming Huen
Directors Pansy Catilina Chiu King Ho
- Ambrose Shu Fai So
- Man Hin Choi
- António José de Melo Vieira Coelho
- Vasco Esteves Fraga
- Jorge Armindo de Carvalho Teixeira
- Calvin Ka Wing Chann
- Miguel António Dias Urbano de Magalhães Queiroz

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PART I – SHAREHOLDINGS STRUCTURES, ORGANISATION AND CORPORATE GOVERNANCE

A. SHAREHOLDING STRUCTURE I. Share capital structure

1. Share capital structure

The share capital of the Company is €59,968,420.00, which is fully paid-up, and is represented by 11,993,684 shares with a nominal value of €5.00 each.

The Company holds 62,565 treasury shares.

All the shares representing the share capital of the Company - ordinary, registered and bearer shares - are admitted for trading, and there are no categories of shares with special rights or duties.

Shareholder	No of Shares 31-Dec 2019	% Share Capital	% Voting rights
Finansol - Sociedade de Controlo, SGPS, S.A.	6 930 604	57,79%	60,23%
Amorim - Entretainment e Gaming International, SGPS, S.A.	3 917 793	32,67%	32,84%
Restantes Accionistas	1 082 722	9,03%	6,93%
Acções Próprias	62 565	0,52%	---
Total	11 993 684	100,00%	100,00%

2. Restrictions on the transfer and ownership of shares

There are restrictions as to the transferability of shares resulting from the provisions under Council of Ministers Resolution no. 115/99 (2nd series), as published in the D.R. II series no. 184, dated 9 August 1999, which obliges the company to observe the requirements provided for under art. 17 of Decree Law no. 422/89, of 2 December, within the following terms:

" 1 - The equity of concessionary companies must not be less than 30% of the total net assets, and the percentage should be raised to 40% of such assets as of the sixth year after concluding the concession contract, without prejudice to the corresponding minimum share capital to be set, for each one, under the regulatory decree, to which article 11 pertains.

2 – At least 60% of the share capital shall always be represented by either registered shares or bearer shares, under a registration system, and it is mandatory for concessionary companies to notify the Inspectorate-General for Gaming with regard to all transfers of property or the usufruct of these, within 30 days after registration in the company's appropriate book or via an equivalent formality.

3 – The purchase, in any capacity, of the holding or ownership of shares representing more than 10% of the capital or as a direct or indirect result of which there is a change in the control of the concessionaries by others, whether natural or legal persons, shall require permission from the member of the Government in charge of tourism, lest the purchasing parties be prevented from exercising their respective social rights.

4 - If the said party purchasing the shares is a legal person, authorization may condition the transfer in subjecting the purchasing party to the system set forth under this article.

5 – The regulatory decree to which article 11 pertains may prevent or limit direct or indirect participation in the share capital on the part of a concessionary by (an)other concessionary(ies), and any purchases that violate the provisions of the said regulatory decree shall become null and void."

3. Own shares

The Company holds 62,565 treasury shares representing 0,52% of its share capital.

Year of Acquisition No.of shares		Nominal value	Total nominal	Total premiums	Total

2001	34.900	5	174.500	280.945	455.445
2002	43	5	215	184	399
2007	22	5	110	88	198
2008	27.600	5	138.000	114.264	252.264

Total	62.565		312.825	395.481	708.306
					Euros

4. Significant agreements with ownership clauses

To the best of the knowledge of the Board of Directors, Estoril-Sol is not party to any significant agreement which takes effect, either being affected or terminated upon a change of control in the Company, following a takeover bid, without prejudice to the standard clauses in banking practice relating to the issuance of debt securities and financing contracts.

5. Defensive measures in case of change of shareholding control

No defensive measures were adopted, because it is understood that they are not justified, bearing in mind the Company's shareholder structure remains stable for several years and the existence of two reference shareholders that concentrate 90.46% of the share capital (the percentage of free-float is manifestly reduced)..

6. Shareholders' agreements

The Company is not aware of shareholder agreements that may restrict the transfer of securities or voting rights.

II. Shareholdings and holding of bonds

7. Qualified shareholdings

The Company has two shareholders of reference which, together, control, directly and indirectly, around 90,4% of the share capital and 93,07% of the voting rights:

	No of Shares 31-Dec	% Share	% Voting
Shareholder	2019	Capital	rights
Finansol - Sociedade de Controlo, SGPS, S.A.	6 930 604	57,79%	60,23%
Amorim - Entretainment e Gaming International, SGPS, S.A.	3 917 793	32,67%	32,84%
Restantes Accionistas	1 082 722	9,03%	6,93%
Acções Próprias	62 565	0,52%	---
Total	11 993 684	100,00%	100,00%

FINANSOL, SOCIEDADE DE CONTROLO, SGPS, S.A.

On 31 December 2019 ESTORIL SOL, SGPS, S.A. held 62.565 treasury shares, and as FINANSOL - SOCIEDADE DE CONTROLO, SGPS, S.A., on 31 December 2019, held 6.930.604 shares of ESTORIL-SOL, SGPS, S.A., it was a direct holder of 57,79% of the share capital and 58,09% of the voting rights.

The members of the Board of Directors and of the Advisory Board of the Companies which are controlled by or grouped under ESTORIL-SOL, held 255,698 shares of ESTORIL-SOL, SGPS, S.A., corresponding to 2,1% of the share capital and voting rights.

Therefore, in overall terms, the direct and indirect stake of FINANSOL in the capital of ESTORIL-SOL is 57,79%, and 60,23% to the voting rights.

AMORIM - ENTERTAINMENT E GAMING INTERNATIONAL, S.G.P.S, S.A.

On 31 December 2019, ESTORIL-SOL, SGPS, S.A. held 62.565 treasury shares, and, as AMORIM – ENTERTAINMENT E GAMING INTERNATIONAL, SGPS, S.A. held 3.917.793 shares, this company was a direct holder of 32,67% of the share capital and 33,84% of the voting rights of ESTORIL SOL, SGPS, S.A..

8. Number of shares and bonds held by the members of governing bodies, submitted under paragraph 5 of article 447 of the Portuguese Companies Act

In compliance with paragraph of article 447º of the Portuguese Companies Act, the information regarding the securities issued by ESTORIL-SOL, SGPS, and by companies with which the Company is in controlling or group relationship, which are owned by the members of the Corporate Offices of the Company on 31 December 2019, is as follows:

	Nr shares		Value	Nr shares	Nr shares	Nr shares
	31.12.18	Date	(€/share)	purchased	sold	31.12.19
Board of Directors
Stanley Hung Sun Ho	135 662	-	-	-	-	135 662
Mário Alberto Neves Assis Ferreira	601	-	-	-	-	601
Patrick Wing Ming Huen	55 000	-	-	-	-	55 000
Pansy Catilina Chiu King Ho	0	-	-	-	-	0
Ambrose Shu Fai So	50 000	-	-	-	-	50 000
Man Hin Choi	527	-	-	-	-	527
António José de Melo Vieira Coelho	0	-	-	-	-	0
Vasco Esteves Fraga	608	-	-	-	-	608
Jorge Armindo de Carvalho Teixeira	0	-	-	-	-	0
Calvin Ka Wing Chann	1 000	-	-	-	-	1 000
Miguel António Dias Urbano de Magalhães Queiroz	0	-	-	-	-	0
Advisory Board
Rui José da Cunha	12 300	-	-	-	-	12 300
Audit Board
Manuel Maria Reis Boto	0	-	-	-	-	0
Vitor Prata Sevilhano Ribeiro	0	-	-	-	-	0
Paulo Ferreira Alves	0	-	-	-	-	0
Lisete Sofia Pinto Cardoso	0	-	-	-	-	0
Statutory Auditor
Pedro Miguel Argente de Freitas e Matos Gomes	0	-	-	-	-	0

9. Board of Directors special powers, particularly, in what concerns to share capital increases (art. 245-A, paragraph 1, al. i). Referring, in relation to the above mentioned, the date on which it was granted, the term up to which that competence can be exercised, the share capital increase maximum quantitative limit, the amount already issued under the powers attribution and the manner in which the powers granted were implemented.

Within the terms of Articles 22 and 23 of the Articles of Association of the Company, the Board of Directors enjoys the broadest management powers, as it can decide on any matter pertaining to company management, namely regarding:

a. The election of its Chairman and Deputy Chairman, if the General Meeting itself has not made such an appointment;

b. The co-opting of replacement directors;
c. The creation, make-up, competence and working of the Executive Committee;
d. The request for convening General Meetings;
e. The annual report and accounts to be submitted to the General Meeting;

f. Proposals to the General Meeting for the provision of warranties and personal or real guarantees by the Company;

g. The proposal to the General Meeting of major extensions or reductions to the activity of the Company;

h. Important modifications in the organization of the company;
i. The establishment or cessation of lasting and important cooperation with other companies;
j. Proposal to the General Meeting for an increase or reduction in the share capital;
k. Proposal to the General Meeting of projects for the merger, division or transformation of the Company;

l. Deliberation on increases in share capital, on one or more occasions, up to an absolute maximum increase of one million six hundred thousand and twenty-one thousand and ninety-three Euros and seventeen cents, for contributions in cash, provided that, in compliance with imperative legal standards, the increase is intended to be subscribed by directors, company employees and other people or entities providing services pertaining to the same, to be identified under the terms and conditions decided in the General Meeting [article 5.2 of the Articles of Association, ex vi of line l) of Article 23.1 of the same document];

m. The appointment and dismissal of employees, and setting their salary or compensation, if applicable;

n. The constitution of representatives or attorneys and the revocation of mandates granted;

o. Representing the company, either directly or via representatives, either in or out of court, actively and passively, namely proposing, contesting and pursuing lawsuits, giving evidence, acquiescing or desisting, as well as assuming commitments in voluntary arbitration;

p. The exercise of company rights corresponding to its holdings in the capital of other companies;

q. The execution and bringing about of compliance with legal and statutory precepts and the decisions of the General Meeting;

r. Any other matter on which any director requests the deliberation of the Board.

10. Business relationship between holders of qualified shareholdings and the Company

There are no significant commercial relationships between holders of qualified shareholdings and the Company.

B. GOVERNING BODIES AND COMITTEES

I. Shareholders' general meeting

a) Composition of the Board of the Shareholders' General Meeting

11. Board of the Shareholders' General Meeting identification of members and mandate

The Board of the General Meeting, pursuant to Article 11 of the Articles of Association, comprises a Chairman, a Deputy Chairman and a Secretary, or only a Chairman and a Secretary, as decided by the General Meeting, who may or may not be shareholders. If there is a Deputy Chairman, he will replace the Chairman in his absence and impediment.

By reference to 31st December 2019, the composition of the Board of the General Meeting is currently as follows:

Chairman: ……	Dr. Pedro Canastra de Azevedo Maia
Deputy Chairman:	Dr. Tiago Antunes da Cunha Ferreira de Lemos
Secretary:………	Drª. Marta Horta e Costa Leitão Pinto Barbosa

The Chairman of the Board of the General Meeting, in performing its duties, receives the collaboration of the other members of the Board and of the services of the Company that are at his entire disposal to attend to his requests and to help him in the preparation and the practice of all the acts within his power.

We would draw attention to the collaboration provided in the preparation and realization of the General Meetings, and especially, the very close collaboration of the Administrative and Financial Board and of the Legal Services Board.

The Chairman, the Deputy Chairman and the Secretary of the Board were elected in the General Meeting of 26th May 2017, for the years 2017 to 2020.

b) Exercising voting rights

12. Possible restrictions on voting rights

Within the terms of Article 10.3 of the Articles of Association, every hundred shares correspond to one vote. Shareholders with a number of shares lower than the one conferring voting rights may be grouped in order to complete the number required for voting rights exercise (one vote per hundred shares) and be represented by one of the grouped (Article 10, paragraph 4 of the Statutes)

According to the provisions in article 10.1 of the Articles of Association of Estoril-Sol, SGPS, SA, it was established, in accordance with and with respect for the legal provisions applicable, that: "The General Meeting is constituted by the shareholders that hold, at least, one hundred shares, provided that these shares have been registered or deposited in the Company's safes up to five days before the date booked for the General Meeting, or the shares have been deposited with a financial intermediary, if they are nominal shares, or registered in registered securities accounts, if they are nominal or registered shares, and the declaration that this is so is received in the Company by that date."

Voting by correspondence is permitted under the terms of paragraph 5 of article 10 of the Articles of Association, however the possibility of voting by electronic means is not provided.

13. Maximum percentage of voting rights that may be exercised by a single or group of shareholders, under paragraph 1 of Article 20 of the Portuguese Securities Code

Estoril-Sol articles of association or other instruments do not impose any maximum percentage of voting rights that may be exercised by a single shareholder or by shareholders that are in any of the relations referred to in Article 20(1) of the CVM.

14. Deliberative Quorum

Whether upon the first or second call, decisions on statutory changes, merger, division, transformation or winding-up of the company, election of the Remuneration Committee and of the Advisory Board, suppression or limitation of the pre-emptive right in share capital increases and the appointment of company liquidators have to be approved by the majority of the votes corresponding to the share capital (article 13.3 of the Articles of Association).

II. Management and Supervision

a) Composition (during 2019)

15. Identification of the adopted governance model

The Estoril-Sol's model of governance is based on the traditional Portuguese model (also known as the "Latin model"), which comprises a Board of Directors, an Audit Board and a Statutory Auditor.

16. Rules for nominating and replacing Board Members

The rules applicable to the appointment and replacement of the members of the Board of Directors follow the imperative standards applicable, as well as the provisions in the Articles of Association. Within the terms of the Articles of Association of the Estoril-Sol, the administration of the Company is the responsibility of a Board of Directors comprising three to eleven directors, with an odd number thereof, shareholders or not, elected by the General Meeting.

The Articles of Association of the Estoril-Sol allow, within the terms of Article 392 of the CCC, for a minority that represents, at least, 10% of the share capital of the Company and that has voted against a winning proposal in the election of the Board of Directors, has the right to appoint a Director (article 17.5 of the Articles of Association).

The General Meeting that elects the Board of Directors may appoint one of its members to perform the duties of the Chairman of the Board and one or two for Deputy Chairmen. If these are not appointed by the General Meeting, it is up to the directors to choose the Chairman of the Board of Directors and the Deputy Chairman/Chairmen from among themselves, and may replace them at any time.

Within the terms of the law, when the number of directors is increased during a mandate, or when a director is appointed by cooptation, the mandate of the new directors ends at the same time as those who are in office.

The mandate of the members of administration is for four years, where an election year is deemed to be a complete calendar year, and there is no restriction to directors' re-election.

The Board of Directors decides by simple majority of its members, and all directors have equal voting rights. Resolutions are taken by simple majority of the votes cast.

Within the terms of Article 23 of the Articles of Association of the Company and as referred to above in point 9 of this report, and although the Entity's Management is carried out by an Executive Committee, the Board of Directors enjoys the broadest management powers, as it can decide on any matter pertaining to company management, namely regarding:

a. The election of its Chairman and Deputy Chairman, if the General Meeting itself has not made such an appointment;
b. The co-opting of replacement directors;
c. The creation, make-up, competence and working of the Executive Committee;
d. The request for convening General Meetings;
e. The annual report and accounts to be submitted to the General Meeting;

f. Proposals to the General Meeting for the provision of warranties and personal or real guarantees by the Company;

g. The proposal to the General Meeting of major extensions or reductions to the activity of the Company;
h. Important modifications in the organization of the company;
i. The establishment or cessation of lasting and important cooperation with other companies;
j. Proposal to the General Meeting for an increase or reduction in the share capital;
k. Proposal to the General Meeting of projects for the merger, division or transformation of the Company;

m. The appointment and dismissal of employees, and setting their salary or compensation, if applicable;

n. The constitution of representatives or attorneys and the revocation of mandates granted;

p. The exercise of company rights corresponding to its holdings in the capital of other companies;

q. The execution and bringing about of compliance with legal and statutory precepts and the decisions of the General Meeting;

r. Any other matter on which any director requests the deliberation of the Board.

17. Composition of the Board of Directors

In addition to the information provided in the previous point of this report (section 16), under this Paragraph 17 should be noted that the composition of the Board of Directors on December 31, 2019 was as follows:

Composition of the Board of Directors:

Dr. Stanley Hung Sun Ho
Dr. Mário Alberto Neves Assis Ferreira Dr. Patrick Wing Ming Huen
Dr. Ambrose Shu Fai So Mrs. Pansy CatIlina Chiu King Ho Sr. Choi Man Hin Eng. António José de Melo Vieira Coelho Dr. Vasco Esteves Fraga Dr. Jorge Armindo de Carvalho Teixeira Dr. Calvin Ka Wing Chann
Dr. Miguel António Dias Urbano de Magalhães Queiroz

The members of the Board of Directors were elected in the General Meeting of 26th May 2017, for the years 2017 to 2020.

The members of the Board of Directors first election occurred in the year:

Dr. Stanley Hung Sun Ho 2002
Dr. Mário Alberto Neves Assis Ferreira 1996
Sr. Huen Wing Ming Patrick 1995
Drª Pansy Catilina Chiu King Ho 2010
Dr. Ambrose So 1978
Sr. Choi Man Hin 1995
Eng.º António José de Melo Vieira Coelho 2000
Dr. Vasco Esteves Fraga 2002
Dr. Jorge Armindo de Carvalho Teixeira 2006
Dr. Calvin Ka Wing Chann 2013
Dr. Miguel António Dias Urbano de Magalhães Queiroz 2013

18. Distinction between executive and nonexecutive members

The Board of Directors, with a collegial structure and jointly responsible for the decisions it adopts, and a supervisory structure composed of a Audit Board and a Statutory Auditor that is not a member of the Audit Board, pursuant to paragraph 1 b). Article 413 of the CSC.

19. Professional qualifications and curricular references of the members of the Board of Directors

STANLEY HUNG SUN HO (Chairman)

Has a long professional career as an entrepreneur linked to the Tourism, Gaming, Shipping and Real Estate sectors.

His main professional activities over the last five years in Portugal, Hong Kong and Macao, include the post of Chairman of the Board of Directors in the following companies: STDM, SA, Seng Heng Bank, Nam Van Development Company, Shun Tak-China ShippingInvestments Ltd., Melco International Development, Ltd., Aberdeen Restaurant Enterprises, Ltd., SJM - Sociedade de Jogos de Macau, SA, STDM - Investimentos Imobiliários, SA, FINANSOL, SGPS, SA, SGAL - Sociedade Gestora da Alta de Lisboa. SA and Estoril Sol, SGPS, SA.

He currently holds the post of Chairman of the Board of Directors of Estoril-Sol, SGPS, to which he was elected for the first time on 2 May 2006.

On 31 December 2019 he held 135,662 shares in the share capital of Estoril-Sol, SGPS, SA.

PATRICK WING MING HUEN (Deputy Chairman)

Has a graduate degree in accounting from the British Banking Institute.

His main professional activities over the last five years in China, Hong Kong, Macau and Portugal, include the post of Voting Member of the Board of Directors in the companies Industrial and Commercial Bank of China Ltd., CAM – Sociedade do Aeroporto Internacional de Macau, SARL, King Power Lojas Francas (Macau) SARL, MACAUPORT - Sociedade de Administração de Portos, SARL, FINANSOL, SGPS, SA, Estoril -Sol, SGPS, SA, Estoril Sol, (III) Turismo, Animação e Jogo, SA and Varzim Sol – Turismo, Jogo e Animação, SA.

He currently holds the post of Deputy Chairman of the Board of Directors of Estoril-Sol, SGPS, to which he was first elected on 31 March 1995.

On 31 December 2019 he held 55,000 shares in the share capital of Estoril-Sol, SGPS, SA.

MÁRIO ALBERTO DAS NEVES ASSIS FERREIRA (Deputy Chairman)

Has a graduate degree in law from Universidade Clássica of Lisbon as well as a degree in business administration from the Gestúlio Vargas Foundation in Rio de Janeiro. He is a Member of the Advisory Board of ISEG - Instituto Superior de Economia e Gestão (Institute of Higher Education in Economics and Management), Member of the Advisory Board of the Faculty of Economics and Business Sciences of Universidade Lusíada in Lisbon, as well as Member of the Advisory Board of the Graduate Degree in Tourism of the Universidade Lusófona de Humanidades e Tecnologias and Member of the Board of the School of the Faculty of Human Mobility.

In the last five years he has developed his professional activity as Chairman of Board of Directors in companies of the Estoril-Sol Group.

He currently holds the post of Deputy Chairman of the Board of Directors of Estoril-Sol, SGPS.

On 31 December 2019 he held 601 shares in the share capital of Estoril-Sol, SGPS, SA.

PANSY CATILINA CHIU KING HO

Has specific training in International Management, Marketing and International Studies from the University of Santa Clara and has a PhD in Business Management from the University of Johnson & Wales.

Her main professional activity in recent years, specifically in Portugal, Hong Kong and Macau, includes the position as Director of MGM Grand Paradise, SA, of Shun Tak Holdings Limited, of STDM – Sociedade de Turismo e Diversões de Macau, SA., of Macau Tower Convention & Entertainment Centre, of Air Macau Company Limites, of Estoril Sol, SGPS, SA, of SGAL – Sociedade gestora da Alta de Lisboa, SA and Posse – SGPS, SA.

She currently holds the position of Member of the Board of Directors of Estoril-Sol, SGPS to which she was appointed on 31 May 2010, by cooptation, in replacement and upon the decease of Sr. António José Pereira.

On 31 December 2019 she held no shares in the share capital of Estoril-Sol, SGPS, SA.

AMBROSE SHU FAI SO

Has a P.H.D. in Management from the University of Hong Kong.

His professional activities over the last five years in China, Hong Kong, Macau and Portugal, most notably include the post of Chairman of the Board of Directors in Tianjin Hexin Development Co., Ltd., MACAUPORT - Sociedade de Administração de Portos, SARL and Voting Member of the Board of Directors in Tonic Industries Holdings Ltd, SJM Holdings Ltd, Shanghai Hongyi Real Estate Development Co. Ltd, Sociedade de Empreendimentos NAM VAN, SARL, Sociedade de Jogos de Macau, SA, STDM - Investimentos Imobiliários, S.A., Finansol, SGPS, SAand Estoril-Sol, SGPS, SA.

He currently serves as a Voting Member of the Board of Directors of Estoril-Sol, SGPS, to which he was first elected on 10 March 1998.

On 31 December 2019 he held 50,000 shares in the share capital of Estoril -Sol, SGPS, SA.

MAN HIN CHOI

Has specific training in Casino management, Las Vegas.

In the last five years he has developed his professional activity as Voting Member of the Board of Directors in companies of the Estoril Sol Group.

He currently serves as a Voting Member of the Board of Directors of Estoril-Sol, SGPS, to which he was first elected on 31 March 1995.

On 31 December 2019 he held 527 shares in the share capital of Estoril-Sol, SGPS, SA.

ANTÓNIO JOSÉ DE MELO VIEIRA COELHO

Has a graduate degree in Radiotechnology from Escola Náutica Infante D. Henrique (Shipping School). In the last five years he has developed his professional activity as Voting Member of the Board of Directors in companies of the Estoril Sol Group.

He currently serves as a Voting Member of the Board of Directors of Estoril-Sol, SGPS, to which he was first elected on 24 April 2000.

On 31 December 2019 he did not hold any shares in the share capital of Estoril-Sol, SGPS, SA.

VASCO ESTEVES FRAGA

Has a graduate degree in Finance from the Instituto Superior de Economia (Higher Institute of Economics). In the last five years he has developed his professional activity as Voting Member of the Board of Directors in companies of the Estoril Sol Group, and as a member of the General Audit Board of the Banco Comercial Português (Millennium BCP). He is currently director of SGAL – Sociedade Gestora da Alta de Lisboa, SA.

He currently serves as a Voting Member of the Board of Directors of Estoril-Sol, SGPS, to which he was first elected on 2 May 2006.

On 31 December 2019 he held 608 shares in the share capital of Estoril- Sol, SGPS, SA.

JORGE ARMINDO DE CARVALHO TEIXEIRA

Has a graduate degree in economics from the Faculty of Economics of the University of Porto, where he lectured from 1976 to 1992.

His professional activities over the last five years include the post of Chairman of the Board of Directors in several companies, among them Amorim – Entertainment e Gaming International, SGPS,SA, Amorim Turismo, Serviços Gestão, SA, Edifer Angola, SA, Iberpartners – Gestão e Reestruturação de Empresas, SA, Troia Peninsula Investimentos, SGPS, SA and Estoril Sol, SGPS, SA.

He has been a Voting Member of the Board of Directors of Estoril-Sol, SGPS, SA since 31 January 2006. At the end of 2017 he did not hold any shares in the share capital of Estoril-Sol, SGPS, SA

CALVIN KA WING CHANN

Born in 1962.

Graduate in Civil Engineering from the University of Westminster in London.

Certified member of Chartered Association of Certified Accountants (ACCA).

Worked in London at Halcrow Fox & Associates and Leigh Philip & Partners, Chartered Accountants.

He has been a Voting Member of the Board of Directors of Estoril-Sol,SGPS,S.A since 04th February 2013. At the end of 2019 he holds 1,000 shares in the share capital of Estoril-Sol, SGPS, SA

MIGUEL ANTÓNIO DIAS URBANO DE MAGALHÃES QUEIROZ

Born in 1962

Law Degre from the Universidade Católica Portuguesa, Lisbon, in 1986.

Lawyer admitted to the Bar Association in Portugal since 1987.

Admitted to the Lawyers Association of Macau (Founder – 1987).

Admitted as Private Notary in Macau (1991).

Legal Advisor at Lisbon City Hall from 1985 until 1987.

Partner and Attorney at Soc. de Advogados RC, Lawyers – Macau 1987 until 1996.

Since 1996 he has been member of the Board of Directors of STDM – Departamento de Investimentos, - Portugal, as well as other companies from STDM Group in Portugal.

He has been a Voting Member of the Board of Directors of Estoril-Sol,SGPS,S.A since 04th February 2013.

At the end of 2019 he did not hold any shares in the share capital of Estoril-Sol, SGPS, SA

20. Significant family, business and commercial relationships between members of the Board of Directors and shareholders with attributed qualified shareholdings

The Company is not aware of any family, professional or commercial, customary and meaningful relationships between members of the Board of Directors of the Company and any qualified shareholder of the Company.

21. Division of powers between the different boards, committees and / or departments within the Company, including the delegation of powers, particularly with regards to the delegation of the Company's daily management

Taking into consideration the reduced size of the Company, there is no division of duties between the members of the corporate offices and departments of the Company, specifically the distribution of areas of responsibility among the members of the Company's Board of Directors.

The competences of the management and Audit Boards, as well as of the committees and/or departments of the Company are those that are defined in the Articles of Association, there being no complex model of internal organization with regard to the day-to-day management of Estoril-Sol, neither is there any distribution of areas of responsibility by the members of the Board of Directors.

Within the scope of its activity of managing of shareholdings, the Board of Directors has a small Administrative Support Service.

Below, we will introduce the organization chart of the governing bodies of Estoril Sol:

b) Operating rules

22. Internal Regulation of the Board of Directors

The Internal Regulation of the Board of Directors and Executive Committee of the Board of Directors are available for consultation at the Company's website www.estoril-solsgps.com

23. Number of meetings held and attendance level of each member of the Board of Directors

The Board of Directors meets on a regular basis, and that regularity is, in principle, once monthly, and always whenever there are issues that justify convening it.

Boards occur in conformity with a previously set schedule and their work agendas are previously given out to all members of the Board, as well as their minutes and supporting documents.

Given the specific composition of the Board of Directors of the Company, meetings of the Board of Directors have been held by telematic means.

The Board of Directors met ten (10) times in 2019, having its member the following attendance level:

Member	Attendance	Attendance percentage (a)
Stanley Hung Sun Ho	0	0%
Mário Alberto Neves Assis Ferreira	9	90%
Patrick Wing Ming Huen	0	0%
Pansy Catilina Chiu King Ho	2	20%
Ambrose Shu Fai So	0	0%
Man Hin Choi	6	60%
António José de Melo Vieira Coelho	10	100%
Vasco Esteves Fraga	10	100%
Jorge Armindo de Carvalho Teixeira	9	90%
Calvin Ka Wing Chann	10	100%
Miguel António Dias Urbano de Magalhães Queiroz	10	100%

(a) Percentage with reference to attendance

Estoril-Sol, SGPS, S.A. is a holding company with operations managed by its subsidiaries, mainly related with gaming concessions operated by "Estoril-Sol (III). Turismo, Animação e Jogo S.A." and "Varzim-Sol – Turismo, Jogo e Animação, S.A.". These subsidiaries have their own management structure, Executive Committees which meet on average every two weeks, and on which the current management of operations has been delegated by the respective Board of Directors. Two members of Estoril-Sol, SGPS, S.A. Executive Committee are also members of the Executive Committee of these subsidiaries.

24. Competent Bodies of the Company to appraise the performance of executive directors

The Remuneration Committee is within the Estoril Sol SGPS, SA, the appropriate body to appraise the performance of the Board of Directors Executive Committee members.

25. Predetermined criteria for evaluating the performance of executive directors

The performance of executive directors is taken in accordance with the following guiding principles:

The duties and responsibilities assumed by the executive directors, taking also in consideration the responsibilities assumed in Estoril-Sol, SGPS, S.A. subsidiaries, and in any rewards earned within these ones.
The economic situation of the Company, as well as the Company's interests in the long term and real company growth and value added for the shareholders.
General market conditions for comparable situations among other companies in the same sector, listed on Euronext Lisbon and equivalent size, taking into account the competitiveness of the remuneration framework proposed.

26. Availability of the members of the Board of Directors

From the point of view of the needs of the Company, ordinary and / or extraordinary, the members of the Board have always shown full dedication and availability.

Notwithstanding, it should be noted that each of them occupied the following positions in other entities during 2019:

STANLEY HUNG SUN HO

Within the Group Estoril-Sol
Chairman of the Board of Directors ESTORIL SOL, SGPS, S.A.
Outside the Group Estoril-Sol

In Portugal

Chairman of the Board of Directors of FINANSOL, SGPS, S.A.
Chairman of the Board of Directors of STDP Soc. Transnacional Desenvolvimento de Participações, SGPS, S.A.
- Chairman of the Board of Directors of Oriente, SGPS, S.A.

In Macau

Chairman of the Board of Directors of Nam Van Development Company, S.A.
Chairman of the Board of Directors of Macau Horse Racing Company Limited.
Chairman of the Board of Directors of Macau (Yat Yuen) Canidrome Company Lda.
Chairman of the Board of Directors of Sociedade de Turismo e Desenvolvimento Insular, S.A.
Chairman of the Board of Directors of Geocapital Investimentos Estratégicos, S.A.
Member of the Board of Directors of STDM, SA.
Member of the Board of Directors of SJM Sociedade de Jogos de Macau, S.A.
Member of the Board of Directors of Teledifusão de Macau, S.A.

In Hong-Kong

Chairman of the Board of Directors of Shun Tak,Holdings, Limited.
Chairman of the Board of Directors of Shun Tak-China Shipping Investments Limited.
Chairman of the Board of Directors of Shun Tak Shipping Company, Limited.
Chairman of the Board of Directors of SJM Holdings Limited
Chairman of the Board of Directors of Aberdeen Restaurant Enterprises, Limited.
Member of the Board of Directors of Sky Shuttle Helicopters Limited.
Member of the Board of Directors of Hong Kong Express Airways, Limited.

PATRICK WING MING HUEN

Within the Group Estoril-Sol
Deputy Chairman of the Board of Directors of ESTORIL SOL, SGPS, SA
Chairman of the Board of Directors Varzim-Sol, Turismo, Jogo e Animação, S.A.
Deputy Chairman of the Board of Directors of Estoril Sol III Turismo, Animação e Jogo, S.A.
Outside the Group Estoril-Sol

In Portugal

Member of the Board of Directors of FINANSOL, SGPS, SA

In Macau

Deputy Chairman of the Board of Directors of Industrial and Commercial Bank of China ( Macau), Ltd
Member of the Board of Directors of CAM Sociedade do Aeroporto Internacional de Macau, SARL
Member of the Board of Directors of King Power Lojas Francas (Macau), SARL
Member of the Board of Directors of MACAUPORT Sociedade de Administração de Portos, SARL
Member of the Board of Directors of Millennium Instituto de Educação, S.A.
Member of the Board of Directors of Dr. Stanley Ho Foundation
Member of the Board of Directors of Tianjin Hexin Development Co. Ltd.

MÁRIO ALBERTO NEVES ASSIS FERREIRA

Within the Group Estoril-Sol
Deputy Chairman of the Board of Directors of Estoril-Sol, SGPS, S.A.
Chairman of the Board of Directors of Estoril Sol III Turismo, Animação e Jogo, S.A.
Deputy Chairman of the Board of Directors of Varzim Sol Turismo, Jogo e Animação, S.A.

AMBROSE SHU FAI SO

Within the Group Estoril-Sol
Member of the Board of Directors of Estoril Sol, SGPS, S.A.
Outside the Group Estoril-Sol

In Portugal

Chairman of the Board of Directors of Brightask Gestão e Investimentos, S.A.
Member of the Board of Directors of Central de Aplicações, SGPS, SA
Member of the Board of Directors of Credicapital SGPS, S.A.
Member of the Board of Directors of Finansol, S.A.
Member of the Board of Directors of Guinor Companhia de Desenvolvimento Imobiliário, SGPS, S.A.
Member of the Board of Directors of Imapex Soc. De Construções e investimento Imobiliário, S.A.
Member of the Board of Directors of POSSE, SGPS, S.A.

Member of the Board of Directors of STDM Investimentos, SGPS, SA
Member of the Board of Directors of STDM Investimentos Imobiliários, S.A.
Member of the Board of Directors of IMO 12 Gestão Mobiliária e Imobiliária Unipessoal, SA
Member of the Board of Directors of IMO-OITO Soc. De Investimentos imobiliários, SA
Manager of Guinchotel Actividades Hoteleiras, Lda.
Manager of STDM Gestão de Investimentos, Unipessoal, Lda.

In Macau

Chairman of the Board of Directors of MACAUPORT Sociedade de Administração de Portos, SARL
Member of the Board of Directors of Macau Horse Racing Co., Ltd.
Member of the Board of Directors of Millennium Instituto de Educação, S.A.
Member of the Board of Directors of Sociedade de Empreendimentos NAM VAN, SARL
Member of the Board of Directors of Sociedade de Jogos de Macau, S.A.
- Member of the Board of Directors of Ponte 16 Desenvolvimento Predial, S.A.

In Hong Kong

Member of the Board of Directors of SJM Holdings Ltd
Member of the Board of Directors of Tonic Industries Holdings Ltd

In China

Chairman of the Board of Directors of Tianjin Hexin Development Co., Ltd.
Member of the Board of Directors of Shanghai Hongyi Real Estate Development Co., Ltd.

PANSY CATILINA CHIU KING HO

Within the Group Estoril-Sol

In Portugal:

Member of the Board of Directors of ESTORIL SOL, SGPS, S.A.
Member of the Board of Directors of DTH Desenvolvimento Turístico e Hoteleiro, S.A.
Outside the Group Estoril-Sol

In Portugal:

Chairman of the Board of Directors of DTH STDM Investimentos, SGPS, S.A.
Chairman of the Board of Directors of STDM Investimentos Imobiliários, S.A
Member of the Board of Directors of Central de Aplicações, SGPS, S.A.
- Member of the Board of Directors of STDM Investimentos, SGPS, S.A.
- Member of the Board of Directors of Guinor, Companhia de Desenvolvimento Imobiliário, SGPS, S.A.
- Member of the Board of Directors of POSSE Sociedade Gestora de participações Sociais, SGPS, S.A.
- Member of the Board of Directors of SGAL Sociedade Gestora da Alta de Lisboa, S.A.
- Member of the Board of Directors of Brightask Gestão e Investimentos, S.A

In Macau:

Member of the Board of Directors of STDM Sociedade de Turismo e Diversões de Macau, S.A.
Member of the Board of Directors of STDM Hotels and Investments Limited
Member of the Board of Directors of AIR MACAU Company Limited
Member of the Board of Directors of King Power Duty Free (Macau) Company Limited
Member of the Board of Directors of JET ASIA Ltd
Member of the Board of Directors of MGM Grand Paradise Limited
Chairman of the Board of Directors of Macau Tower Convention & Entertainment Centre
Chairman of the Board of Directors of Sociedade de Turismo Insular SA
Deputy-Chairman and member of the Board of Directors of Macau International Airport Co Ltd

In Hong Kong:

Chairman of the Board of Directors of SHUN TAK China Travel Shipping Investments Limited
Member of the Board of Directors of SHUN TAK Holdings Limited
Member of the Board of Directors of HONG KONG International Airport Terminal Services Limited

MAN HIN CHOI

Within the Group Estoril-Sol

Member of the Board of Directors of Estoril Sol, SGPS, SA
Member of the Board of Directors of Estoril Sol III Turismo, Animação e Jogo, S.A.
Member of the Board of Directors of Estoril Sol Investimentos Hoteleiros, S.A.
Member of the Board of Directors of Varzim-Sol Turismo, Jogo e Animação, S.A.
Member of the Board of Directors of Estoril Sol Digital Online Gaming Products and Services, S.A.

Outside the Group Estoril-Sol

In Portugal:

Chairman of the Board of Directors of IMAPEX Sociedade Construções e Investimentos Imobiliários, Lda.
Chairman of the Board of Directors of IMO 12 Gestão Mobiliária e Imobiliária Unipessoal, Lda.
Chairman of the Board of Directors of IMO 8 Sociedade de Investimentos Imobiliários, Lda.
Member of the Board of Directors of BRIGHTASK Gestão de Investimentos, S.A.
Member of the Board of Directors of Credicapital, SGPS, S.A.
Member of the Board of Directors of Oriente, SGPS, S.A.
Member of the Board of Directors of STDM, Investimentos SGPS, SA
Member of the Board of Directors of STDM Investimentos Imobiliários, S.A.
Member of the Board of Directors of STDM, SGPS, S.A.
Manager of STDM Gestão de Investimentos, Lda.
Manager of Guinchotel Actividades Hoteleiras, Lda.

VASCO ESTEVES FRAGA

Within the Group Estoril-Sol
Member of the Board of Directors of Estoril Sol, SGPS, SA
Member of the Board of Directors of Estoril Sol III Turismo, Animação e Jogo, S.A.
Member of the Board of Directors of Varzim Sol Turismo, Animação e Jogo, S.A.
Member of the Board of Directors of Estoril Sol Digital Online Gaming Products and Services, S.A.
Member of the Board of Directors of Estoril-Sol Investimentos Hoteleiros, S.A.;
Member of the Board of Directors of Estoril-Sol e Mar Investimentos Imobiliários, S.A.;
Member of the Board of Directors of DTH Desenvolvimento Turístico e Hoteleiro, S.A.;
Member of the Board of Directors of Estoril-Sol Imobiliária, S.A.;
Member of the Board of Directors of Estoril-Sol (V) Investimentos Imobiliários, S.A

Outside the Group Estoril-Sol

In Portugal:

Member of the Board of Directors of SGAL – Sociedade Gestora da Alta de Lisboa, S.A.

ANTÓNIO JOSÉ DE MELO VIEIRA COELHO

Within the Group Estoril-Sol
Member of the Board of Directors of Estoril-Sol, SPGS., S.A.;

Member of the Board of Directors of Estoril-Sol III Turismo, Animação e Jogo, S.A.;
Member of the Board of Directors of Varzim Sol Turismo, Animação e Jogo, S.A.;
Member of the Board of Directors of Estoril-Sol Investimentos Hoteleiros, S.A.;
Member of the Board of Directors of Estoril-Sol e Mar Investimentos Imobiliários, S.A.;
Member of the Board of Directors of DTH Desenvolvimento Turístico e Hoteleiro, S.A.;
Member of the Board of Directors of Estoril-Sol Imobiliária, S.A.;
Member of the Board of Directors of Estoril-Sol (V) Investimentos Imobiliários, S.A.;
Member of the Board of Directors of Estoril-Sol Digital Online Gaming Products and Services, S.A..

Outside the Group Estoril-Sol

In Portugal:

Member of the Board of Directors of STDM - Investimentos Imobiliários, S.A.

JORGE ARMINDO DE CARVALHO TEIXEIRA

Within the Group Estoril-Sol
Member of the Board of Directors of Estoril Sol, SGPS, S.A.
Member of the Board of Directors of DTH Desenvolvimento Turístico e Hoteleiro, S.A.

Outside the Group Estoril-Sol

In Portugal:

Member of the Board of Directors of Amorim Entertainment e Gaming Internacional, SPGS, S.A.;
Member of the Board of Directors of Amorim Turismo, SPGS, S.A.;
Member of the Board of Directors of BL&GR, S.A.;
Member of the Board of Directors of Blue & Green Serviços e Gestão S.A.;
Member of the Board of Directors of Blue & Green II, S.A.;
Member of the Board of Directors of CHT Casino Hotel de Tróia, S.A.;
Eleven Restauração e Catering, S.A.;
Member of the Board of Directors of Fundição do Alto da Lixa, S.A.;
Member of the Board of Directors of Fozpatrimónio, S.A.;
Member of the Board of Directors of Goldtur Hotéis e Turismo, S.A.;
Member of the Board of Directors of Grano Salis Investimentos Turísticos e de Lazer, S.A.;
Member of the Board of Directors of Grano Salis II Investimentos Turísticos e de Lazer, S.A.;
Member of the Board of Directors of Iberpartners Gestão e Reestruturação de Empresas S.A.;
Member of the Board of Directors of Iberpartners SPGS, S.A.;
Member of the Board of Directors of Hotel Turismo, SARL;
Member of the Board of Directors of Imofoz, S.A.;
Member of the Board of Directors of Mobis Hotéis de Moçambique, SARL;
Member of the Board of Directors of Notel Empreendimentos Turísticos, SARL;
Member of the Board of Directors of Prifalésia Construção e Gestão de Hotéis, S.A.;
Member of the Board of Directors of SGGHM Sociedade Geral de Hotéis de Moçambique, S.A.;
Member of the Board of Directors of Sociedade Figueira Praia, S.A.;
Member of the Board of Directors of SPIGH Sociedade Portuguesa de Investimentos e Gestão Hoteleira, S.A.;
Member of the Board of Directors of Troia Península Investimentos, SPGS, S.A.;
Member of the Board of Directors of Turyleader, SPGS, S.A..

CALVIN KA WING CHANN

Within the Group Estoril-Sol
Chairman of the Board of Directors of Estoril Sol Digital Online Gaming Products and Services, S.A.
Member of the Board of Directors of Estoril Sol, SGPS, S.A.
Member of the Board of Directors of Estoril Sol III Turismo, Animação e Jogo, S.A.
Member of the Board of Directors of Varzim Sol Turismo, Animação e Jogo, S.A.
Member of the Board of Directors of Estoril-Sol Investimentos Hoteleiros, S.A.;
Member of the Board of Directors of Estoril-Sol e Mar Investimentos Imobiliários, S.A.;
Member of the Board of Directors of DTH Desenvolvimento Turístico e Hoteleiro, S.A.;
Member of the Board of Directors of Estoril-Sol Imobiliária, S.A.;
Member of the Board of Directors of Estoril-Sol (V) Investimentos Imobiliários, S.A..

Outside the Group Estoril-Sol

In Portugal:

Is Member of the Board of Director or Administrator of the following entities:
BRIGHTASK Gestão de Investimentos, S.A.;
Central e Aplicações, SPGS, S.A.;
CREDICAPITAL Sociedade Gestora de Participações, S.A.;
FINANSOL, Sociedade de Controlo, SGPS, S.A.;
Guinchotel Actividades Hoteleiras, Lda.;
GUINOR Companhia de Desenvolvimento Imobiliário, SPGS, S.A.;
IMAPEX, Sociedade de Construções e Investimentos Imobiliários, S.A.;
IMO 12 Gestão Mobiliária e Imobiliária, S.A.;
IMO 8 Sociedade de Investimentos Imobiliários, S.A.;
MALHA 5 Investimentos Imobiliários, S.A.;
POSSE, SPGS, S.A.;
STDM Investimentos, SPGS., S.A.;
STDM Investimentos Imobiliários, S.A.;
STDM Gestão de Investimentos, Unipessoal, Lda.;
Orientenjoy S.A.

MIGUEL ANTÓNIO DIAS URBANO DE MAGALHÃES QUEIROZ

Within the Group Estoril-Sol
Member of the Board of Directors of Estoril Sol, SGPS, S.A.
Member of the Board of Directors of Estoril Sol III Turismo, Animação e Jogo, S.A.
Member of the Board of Directors of Varzim Sol Turismo, Animação e Jogo, S.A.
Member of the Board of Directors of Estoril Sol Investimentos Hoteleiros, S.A.
Member of the Board of Directors of Estoril Sol e Mar Investimentos Imobiliários, S.A.
Member of the Board of Directors of DTH Desenvolvimento Turístico e Hoteleiro, S.A.
Member of the Board of Directors of Estoril Sol Imobiliária, S.A.
Member of the Board of Directors of Estoril Sol (V) Investimentos Imobiliários, S.A.

Outside the Group Estoril-Sol

In Portugal:

Administrator of the following entities:

BRIGHTASK Gestão de Investimentos, S.A.;
FINANSOL, Sociedade de Controlo, SPGS, S.A.;
Guinchotel Actividades Hoteleiras, Lda.;
IMAPEX, Sociedade de Construções e Investimentos Imobiliários, S.A.
IMO 12 Gestão Mobiliária e Imobiliária, S.A.;
PORTLINE Transportes Marítimos Internacionais, S.A.;
PORTLINE BULK INTERNATIONAL, S.A.;
STDM Investimentos, SPGS, S.A.;
STDM Gestão de Investimentos, Unipessoal, Lda.;
Portline Ocean, S.A..

President of General Meeting Table of the following entities:

Portline-Transportes Marítimos Internacionais, S.A.;
Portline Bulk International, S.A.;
Portline Ocean, S.A..

Em Macau: Member of the Statutory Board of: - SJM – Sociedade de Jogos de Macau, S.A.

c) Committees within the Board of Directors

27. Identification of Committees created within the Board of Directors

No specialized committee has been created within the Board of Directors.

The Board of Directors, with a collegial structure and jointly responsible for the decisions it adopts, and a supervisory structure composed of a Audit Board and a Statutory Auditor that is not a member of the Audit Board , pursuant to paragraph 1 b). Article 413 of the CSC

28. Composition of the Executive Committee

No specialized committee has been created within the Board of Directors.

29. Internal Committees and Advisory Groups of the Board of Directors

Not applicable to the Company since it has no specialized committee within the board of directors.

III. Audit

a) Composition

30. Identification of the Auditing Bodies

The supervision of Estoril-Sol is the responsibility of a Audit Board comprising three to five effective members and one or two alternates, respectively, shareholders or not, and to a Statutory Auditor or Firm of Statutory Auditors which is not a member of the Audit Board.

31. Composition

Composition of the Audit Board:

Chairman:	Dr. Manuel Maria Reis Boto
Members:	Dr. Vitor Pratas Sevilhano Ribeiro
	Dr. Paulo Ferreira Alves
Alternate:	Dr.ª. Lisete Sofia Pinto Cardoso

Statutory Auditor:

Deloitte & Associado, SROC. No. 43 - Represented by Pedro Miguel Argente de Freitas e Matos Gomes, Statutory Auditor no. 1172. The external auditor was elected for four years in the General Meeting of 26th May 2017, upon the proposal of the Audit Board.

The members of the Audit Board, in functions at December 31st , 2019, were elected in the General Meeting of 26th May 2017. The mandate of the members of the Audit Board is for four years, where an election year is deemed to be a complete calendar year, and there is no restriction to their re-election.

The Audit Board decides with a simple majority of its members, who all have equal voting rights, and decisions are taken by a majority of the votes.

As mentioned in the previous point, in accordance with article 25 of the Articles of Association, the Company's supervision is the responsibility of a Statutory Board made up of three or five effective members and one or two alternates, shareholders or not, and a statutory auditor or company of statutory auditors who is not a member of that Board.

32. Independence

The members of the Audit Board of the Estoril-Sol comply with the rules of incompatibility set out in paragraph 1 of Article 414.-A and meet the criteria of independence set out in Article 414.5, both of the CCC.

33. Professional Qualifications

MANUEL MARIA REIS BOTO

Degree in Finance from Instituto Superior de Economia e Gestão (ISEG) 1975.

Statutory Auditor nº523.

It was elected for the first time to be a member of the Audit Board of the company at the General Meeting of 26th May 2017.

As of December 31st, 2019, does not hold shares representing the capital of Estoril-Sol, SGPS, SA.

VITOR PRATAS SEVILHANO RIBEIRO

Degree in Finance from Instituto Superior de Economia, 1974.

Graduated in Hospital Administration from the National School of Public Health of Lisbon, 1976

Certified by INSEAD (Fontainebleau) - Advanced Management Program and Financial Management Program, 1981.

Professional Certified Coach pelo ICF – International Coach Federation, 2009.

Advanced Program for Non-Executive Directors of the IPCG, 2016.

It was elected for the first time to be a member of the Audit Board of the company at the General Meeting of 26th May 2017.

As of December 31st, 2019, does not hold shares representing the capital of Estoril-Sol, SGPS, SA.

PAULO FERREIRA ALVES

Degree in Law from the Law University of Lisbon, 1990.

Degree in European Studies at the Institute of European Studies of Law University of Lisbon, 1992.

Holds an MBA in Management and Taxation from the Institute of Higher Financial and Tax Studies (IESF), 1995

Specialization in Economic and Legal Sciences at the Law University of Lisbon, 2014.

It was elected for the first time to be a member of the Audit Board of the company at the General Meeting of 26th May 2017.

As of December 31st, 2019, does not hold shares representing the capital of Estoril-Sol, SGPS, SA.

LISETE SOFIA PINTO CARDOSO (Alternate)

Degree in Economics from the University of Coimbra, 1993.

It was elected for the first time to be a member of the Audit Board of the company at the General Meeting of 26th May 2017.

As of December 31st, 2019, does not hold shares representing the capital of Estoril-Sol, SGPS, SA.

b) Operating rules

34. Internal Regulation and Annual Activity Report

The operating rules of the Audit Board are defined in the Articles of Association of the Company (Chapter V - Article 25 to 28) and can be found on the Website (www.estoril-solsgps.com).

35. Statutory Audit Board Meetings

The Audit Board meets whenever it is considered that there is an issue that warrants a meeting, with meetings being held at least once per quarter (article 28.1 of the articles of association).

Meetings occur in conformity with the decision of the Chairman with minutes being drawn up of all the meetings.

The Audit Board met 6 times during 2019, with all its members attending all meetings.

36. Availability of the members of the Statutory Board members

All members of the Audit Board of the Company demonstrated, consistently, its willingness to exercise their functions, having appeared regularly at board meetings and participated in its work.

MANUEL MARIA REIS BOTO

Outside Group Estoril-Sol
Saipem Chairman of the Audit Board (Brasil)
Seguradoras Unidas (ex-C.S.Tranquilidade) Member of the Audit Board

VITOR PRATAS SEVILHANO

Outside Group Estoril-Sol
Partner of EEC, European School of Coaching.

PAULO FERREIRA ALVES

Outside Group Estoril-Sol
BDO & Associados, SROC, Lda Senior Tax Partner and Member of the Executive Committee
BDO Consulting, Lda Board member
BDO Outsourcing, Lda Board member
Member of the Audit Board: - Netjets – Transportes Aéreos S.A.; -
Others: - CAAD, Centro de Arbitragem Administrativa - Referee Judge.

LISETE SOFIA PINTO CARDOSO

Outside Group Estoril-Sol
Atena Equity Partners, SCR, S.A Chairman of the Audit Board
Travel Tailors Portugal Owner and Partner

c) Duties and Competencies

37. Intervention by the Statutory Audit Board for the purpose of hiring additional services to the Statutory External Auditor

The Statutory Audit Board is responsible for the approval of additional audit services to the Statutory External Auditor.

38. Other duties carried out by the Statutory Audit Board

The Audit Board has the powers and is subject to the duties established at law and in the Articles of Association of Estoril-Sol, and may perform all the acts of verification and inspection that it considers convenient for the fulfilment of its obligations of supervision, and is particularly responsible for:

supervising the administration of the Company and checking on the observance of the law and the Articles of Association of the Company;
verifying the precision of the accounting documents prepared by the Board of Directors and supervising the respective review;
proposing the appointment of the Statutory Auditor to the General Meeting;
calling the General Meeting whenever the Chairman of the respective Board does not do so when he should;
preparing the annual report on its activity and presenting an opinion on the Board of Directors' Report.

IV. Statutory external auditor

39. Identification

Statutory Auditor:

40. Permanence in Functions

The external auditor was elected for the first time for a period of four years (2017/2020) in the General Meeting of 26th May 2017, upon the proposal of the Audit Board.

41. Other services provided to the Company

The Statutory Auditors provides to the Company, the services of external auditors. Additionally, other services were provided to the company by entities in the External Auditor's network, in the amount of 15,000 Euros.

V External auditor

42. Identification

Deloitte & Associado, SROC. no. 501776311, registered in Ordem dos Revisores Oficiais de Contas, with no. 43 - Represented by Pedro Miguel Argente de Freitas e Matos Gomes, Statutory Auditor no. 1172 was appointed statutory auditor for the purposes set out Article 8 of Código dos Valores Mobiliários.

43. Permanence in Functions

The external auditor was elected for four years (2017/2020) in the General Meeting of 26th May 2017, upon the proposal of the Audit Board.

44. Policy and frequency of rotation of the external auditor

Please see point 43 above from this same report.

45. External Auditor assessment

According to the model of the corporate governance, the election or removal of the Statutory Auditor / External Auditor is decided at the General Assembly upon the proposal of the Audit Board.

The Audit Board undertakes an annual overall assessment of the External Auditor in which includes an assessment of their independence.

46. Additional work, other than audit services, performed by the External Auditor and hiring process

During the year ended December 31st, 2019 other works than audit work were not performed by the external auditor. Additionally, other services were provided to the company by entities in the External Auditor's network, in the amount of 15,000 Euros.

47. Remuneration of the External Auditor

In 2019, the aforementioned Statutory Auditor and other entities in its network earned the sum of 138,000 Euros for the services provided exclusively to Estoril-Sol, SGPS, S.A .. The breakdown of these services is as follows:

Audit: 123,000 Euros;
Other services: 15,000 Euros.

C. INTERNAL REGULATION

I. Articles of Association

48. Rules applicable in the case of amendments to the Company's Articles of Association

The Company's Articles of Association amendment is subject to the mandatory rules of the law and, without prejudice, is still subject to certain Articles of Association specificities, as follows:

Decisions on statutory changes, merger, spin-off, transformation or dissolution of the company, election of the Remuneration Committee and Advisory Board, suppression or limitation of the preemptive right in capital increases and designation of liquidators of the company, must be approved by majority of votes corresponding to share capital (article 13, paragraph 3 of the Articles of Association)
On what concerns to management matters of the company, shareholders can only deliberate by Board of Directors request (Article 12, paragraph 5 of the Articles of Association)
The share capital may be increased by the Board of Directors deliberation, for one or more times, up to the maximum and absolute increase limit of one million six hundred and twenty-one thousand and ninety-three Euros and seventeen cents, for entries in money, as long as the mandatory legal norms are respected, the increase is intended to be subscribed by administrators, company employees or other persons or entities with provision of services relevant to it, to be identified in the terms and conditions resolved at the General Meeting (article 5, 2 of the Statutes)
The resolution of the General Meeting that suppresses or limits the preemptive right of the shareholders in capital increases for cash contributions, resolved by the General Meeting or by the Board of Directors, must be approved by the majority of votes corresponding to the share capital (article 5, No. 3 of the Statutes)
The share capital of the company will be increased annually, up to a maximum limit of 15% of the paid-in capital at any time, through the incorporation of a special incorporation reserve, provided that the reserve amount is equal to or greater than 3% of the capital carried out at each moment (Article 31, paragraph 6 of the Statutes)

II – Reporting Irregularities

49. Policy on reporting Irregularities

Subsidiary companies that are gaming concessionaries are subject to supervision by the Serviço de Inspeção de Jogo do Turismo de Portugal, I.P., to which it is mandatory to notify any irregularities found, as part of their operations. The Company formalized a policy and initiatives for the reporting of irregularities in conformity with 5) nº1 of Article 420 of Código das Sociedades Comerciais.

III – Internal Control and Risk Management

50. Individuals, bodies or committees responsible for internal audit and / or implementation of internal control systems

Estoril-Sol considers to be of great importance and relevance the implementation of internal control systems. This results, essentially, from the relevance of the sector in which operate the major subsidiaries of the Company. The companies of the Group, aiming to prevent and minimize the risk inherent to their economic activities, have specialised technical services of supervision and control, responsible for the strict fulfillment of the standards of physical safety of customers, employees and installations and also compliance with the legislation that regulates the Gaming activity in Portugal, and it should be pointed out that Portuguese Casinos are subject to the permanent supervision by the State through the Gambling Inspection Service of the Instituto de Turismo de Portugal I.P.

The management of economic and financial risk of the Company and its business associates is continuously monitored by the Board of Directors collaboration with the Operational Management, Security and CCTV Directors, and with the Planning and Control Department.

The board of Directors has been promoting the necessary and appropriate conditions to enable effective monitoring of the management of risks inherent in the Company and Subsidiaries Companies of Estoril-Sol Group, as well as the internal control system, and maintains regular monitoring on the work done.

The Audit Board evaluates the effectiveness of internal control and risk management systems.

51. Hierarchy/or functional relationships with other Company's Bodies

Please see answer to the previous point (Point 50) of this Report.

52. Other Functional Areas with Risk Control Competencies

Please see answer to the previous point (Point 50) of this Report.

53. Identification and Classification of Risks

Within the scope of its activity of managing of shareholdings, Estoril-Sol, as the holding company of the Estoril-Sol Group, assumes various kinds of risk that arise namely from the gaming concessions, these being the following: Business risks, Contractual risks, Physical risks, Financial and currency exchange risks.

Business Risk:

The associated companies Estoril Sol (III) – Turismo, Animação e Jogo, S.A. and Varzim Sol – Turismo, Jogo e Animação, S.A. operate gaming concessions in Casinos. In the last few years, this Sector of activity has been experiencing increased technological growth, particularly focused on slot machines, which requires the ongoing renewal of the product range. The Group's concessionaries systematically keep up with this growth, by visiting manufacturers, taking part in international specialty trade shows and regularly investing in new equipment under the close watch of the Board of Directors of Estoril-Sol.

both because they account for a significant increase in illicit supply and because they constitute a flagrant source of tax evasion.

The Estoril-Sol Group, through its subsidiaries, operates under the concession contracts, Póvoa Varzim permanent game concession area (until 2023), which includes the exploration of Casino da Póvoa, and the Estoril concession contract (until 2020), which includes Casino do Estoril and Casino de Lisboa. As of this date, the terms and conditions of the specifications relating to the public tender for the award of the new game concession for Estoril are not yet known. The shareholder structure of Estoril-Sol (III), and the respective Board of Directors, remain expectant as to the launch of the public tender, and their intention is to compete for the new game concession for the permanent game zone of Estoril.

Estoril Sol is also present in the online business regulated by the "Legal Regime for Online Gambling and Betting (RJO)", approved by Decree-Law No. 66/2015, holding the following licenses:

online casino games license (license no. 3) issued by SRIJ (Portuguese Gaming Industry Regulator), valid until July 24th, 2022 after renewal for an additional period of 3 years, and renewable for periods of three years;
online sports betting license (license nº8) issued on August 4th, 2017 and valid until August 3rd, 2020 being renewable for periods of three years. Estoril Sol Digital intends to renew this license during the year 2020.

Physical Risks:

The Group's Companies, which aim to prevent and minimize the risk inherent to its economic activities, have specialized technical surveillance services that are responsible for strict compliance with standards that govern the physical safety of clients, employees and facilities.

With cooperation from an external body, we periodically conduct risk analyses of instituted procedures and of the physical safety of assets, with the implementation of corrective actions for the risks identified.

Cybernetic risk:

Given the characteristics of the online gaming business, there is the risk of cyber attacks on the network and online platforms of the company that impact critical business information. In order to address this risk, a number of periodic audits are carried out, including security audits, intrusion tests and vulnerability assessments.

Financial and Currency Exchange Risks:

The significant investments that the Group companies have made in the last few years as a result of the extension of concession contracts, with an initial payment pertaining to Lisbon Casino as well as investments which are regularly made for reasons pertaining to renewal, modernization and expansion of the Casinos, have involved increased indebtedness which, combined with the changes in market interest rates, resulted in increased financial costs and a potential liquidity risk.

Depending on the operating funds that are freed up, it is felt that the financial risk to which the associated undertakings are exposed is minimal, and the same understanding has prevailed in the examination carried out by financial institutions, as shown by the fact that assets guarantees are dispensed with for operations under contract. By the end of 2018 and 2019, the statement of financial position of the Group does not present any bank liabilities.

Portuguese legislation forbids casino concessionaries from granting credit to gaming activities, and so, in this regard, Group Companies are not exposed to credit risk. Other revenue from restaurant and entertainment activities, which account for only 5.5% of revenue, therefore represents insignificant exposure.

Every medium-term operation is carried out in Euros, and a few imports with 30-day credit are exceptionally conducted in US Dollars, and so the Company has only minimal exchange rate exposure.

54. Description of the risk management processes, identification, assessment, monitoring, control and risk management

Please see answer to the previous point (Point 50) of this Report.

55. Description of the main features of risk management and internal control systems in relation to the preparation and disclosure of financial information

One of the main duties of the Board of Directors of Estoril-Sol together with the respective governing bodies from the major subsidiaries of the Company, is to ensure the right conditions for the preparation and disclosure of the Group Financial Information, while ensuring: reliability, transparency, consistency and accuracy of the financial information prepared and disclosed. Among the key elements of the internal control systems implemented by the Company related with the preparation and disclosure of financial information, we highlight the following:

The individual financial statements and budget control are prepared on a monthly basis and approved in the Council of Directors ;
The heads of operating departments of subsidiaries are required to justify significant deviations from budgeted amounts on a monthly basis ;
The consolidated financial statements are prepared quarterly and approved by the Board of Directors;-
The Statutory Auditor and External Auditor perform an annual audit and half year limited individual and consolidated financial statements ;
The Audit Board meets at least once every quarter, analyzes the individual and consolidated financial statements for the three and six months;
The Audit Board meets at least once every quarter, to examine and approve the annual and consolidated financial statements for the year
The annual report is prepared by the Finance Department, approved by the Board of Directors and the Audit Board , and its content is reviewed by the Statutory Auditors.

IV – Investor relations

56. Investor Relations Department

The support to investors is assured by: Av. Clotilde, n.º 331 2765-237 Estoril Tel. 214667873 Fax. 214667963 Email: [email protected]

This service is responsible for investor support, being responsible, in particular, for communicating to the market all information regarding results, events or any facts regarding Estoril-Sol that are of interest to the financial community, while also ensuring information provision and clarifications required by shareholders, investors and analysts. In this context, it is the service responsible for providing a complete, rigorous, transparent, efficient and available relationship with shareholders, investors and analysts, namely with regard to the disclosure of privileged and mandatory information. It is also the service responsible for monitoring the evolution of the market and the shareholder base, and must collaborate with the commercial areas in the provision of institutional information and dissemination of Estoril-Sol's activity.

57. Legal representative for Capital Market Relations

As at December 31st, 2019 the company representative for market relations was Mr. Luís Pedro Matos Lopes, whose contact details are:

Av. Clotilde, n.º 331 2765-237 Estoril Tel. 214667873 Fax. 214667963 Email: [email protected]

58. Information Requests

Being the information request so rare, the representative for market relations ensures a prompt answer to all requests for information that are formulated.

V – Website

59. Address

The Company has available to investors a place on the Internet (www.estoril-solsgps.com) through which discloses financial information relating to its individual and consolidated operations and commercial "links" to the "sites" of its associated companies, Estoril Sol (III ) and Varzim Sol

60. Location of the information mentioned in Article 171 of the Commercial Companies Code

This information is available on the Internet site (www.estoril-solsgps.com), the following menu: - Company identification.

61. Location where the Articles of Association, Bodies and Committees' Regulations can be found

This information is available on the Internet site (www.estoril-solsgps.com), the following menu: - Company / Articles of Association.

62. Location where is provided information about the identity of the governing bodies,the representative for market relations, the Investor Relations Department, functions and means of access

This information is available on the Internet site (www.estoril-solsgps.com), the following menu: - Company / Governing Bodies.

63. Location where is provided the documents of accounting and calendar of corporate events

This information is available on the Internet site (www.estoril-solsgps.com), the following menu: – Financial Reports and Accounts.

64. Location where is provided the notice to General Meeting and all related information

This information is available on the Internet site (www.estoril-solsgps.com), the following menu: - Disclosures / General Meetings.

65. Location where the historical archives are available with resolutions adopted at the Company's General, the represented share capital and the voting results, with reference to the previous 3 years

This information is available on the Internet site (www.estoril-solsgps.com), the following menu: - Disclosures / General Meetings.

D - Remuneration

I – Competence

66. Competence for determining the remuneration of Governing Bodies, Executive Directors and Company's persons discharging managerial responsibilities ("dirigentes")

The remuneration of the members of the corporate offices will be established by the Remuneration Committee, which shall consist of fixed amounts and/or percentages on profits from the fiscal year not occurring on distributions of reserves or on any non-distributable part of such profits, and, overall, such percentages may not exceed eleven percent for the Board of Directors and two percent for the Audit Board.

Similarly, it is for the Remuneration Committee establishing remuneration in cases where there is due and, members of the General Meeting.

67. Composition of the Remuneration Committee, identification of other individuals and entities hired to provide support and advisors statement of independence

Within the terms of Article 34 of the Articles of Association, the Remuneration Committee of the Estoril-Sol comprises three members (shareholders or not), elected by the General Meeting.

At December 31st, 2019, the Remuneration Committee elected by the Extraordinary General Meeting of 26th May 2017 for the years 2017 to 2020, comprises the following shareholders:

Drª. Pansy Catilina Chiu King Ho;
Dr. Jorge Armindo de Carvalho Teixeira;
Dr. Calvin Ka Wing Chann.

All members of the Remuneration Committee are simultaneously members of the Board of Directors of Estoril Sol. No entities were engaged to assist the Remuneration Committee.

68. Knowledge and Experience of the members of the Shareholders' Remuneration Committee

The experience and qualifications of the members of the Remuneration Committee are mirrored in the curricula, as points 19 and 26 above, of this same report.

69. Description of the remuneration policy of the board of directors and the supervisory board, as provided for in article 2 of Law 28/2009, of 19 June

The remuneration policy of the management and supervisory bodies was subject to approval in the General Meeting of 21 May 2013. The proposal on the policy of remuneration was unanimously approved by those present (shareholders who owned 90,47% of the share capital were present or duly represented).

The text that was subject to shareholder approval in the said General Meeting, which was point 6 on the agenda, is transcribed below.

"The policy of remuneration, general criteria and guiding principles

The policy of remuneration of the members of the management and supervisory bodies of Estoril Sol, SGPS, S.A. seek to promote the long term alignment of the interests of the members of these bodies with the interests of the Company. The principles to be observed in setting the remunerations are the following:

a) Functions performed

The functions actually performed by each of the members and the responsibilities that are associated to them in a substantive and not merely formal sense should be taken into consideration.

The appraisal of the functions effectively performed should be based on a variety of criteria including responsibility, experience required, technical requirements of the functions, availability, institutional representation, time dedicated, value added of certain kinds of intervention.

Within the framework of the assessment and classification of functions to establish remuneration, the functions performed in companies controlled by Estoril Sol SGPS, S.A. and any remuneration received from them are also analysed.

b) Economic situation of the Company

The economic situation of the Company should be taken into consideration, as well as the long-term interests and real growth of the Company and the creation of value for shareholders.

c) General market conditions for comparable situations

The setting of the remuneration of the members of the management and supervisory bodies of the Company should take into consideration the competitiveness of the framework of remuneration proposed. In fact, only within this framework is it possible to attract and retain competent professionals, with a level of performance appropriate to the complexity and responsibility of the duties assumed.

The setting of the remuneration of the members of the management and supervisory bodies should use the remuneration on offer in companies of the gaming sector and companies listed on the EuronextLisboa, of an equivalent size to that of Estoril Sol, SGPS, S.A. as a reference.

1. The concrete options for the remuneration policy that we submitted to the appreciation of the shareholders of the Company are the following:

1.1. Board of Directors

The remuneration of the remunerated members of the Board of Directors of Estoril Sol, SGPS, SA comprises a fixed amount paid 14 times per year.

1.2. Audit Board

The remuneration of the members of the Audit Board of Estoril Sol, SGPS, SA also comprises a fixed amount established in accordance with the normal market practice and prices for this type of service, paid 14 times per year. 1.3. Statutory Auditor

The Statutory Auditor of the Company has an annual remuneration that is also fixed, established in accordance with the normal market level of fees for this type of service.

Estoril, 27 April 2013

The Remuneration Committee"

70. Remuneration of the Board of Directors

The structure of the Board of Directors remuneration and basis for determining it are those contained in the remuneration policy approved at the General Meeting of May 21st, 2013 and transcribed in the previous point (Point 69) of this report.

71. Variable Remuneration of the Board members

The remuneration of the executive directors may include, but this has not been the case, a variable component, within the terms of Article 34 of the Articles of Association of the Company and of the policy approved in the General Assembly of 21 May 2013 and transcribed in point 69 above. It bears to clarify that the variable component depends on the desire manifested in the General Meeting by the shareholders and that no variable remuneration has been attributed.

72. Deferred payment of the remuneration's variable component

Not applicable in the case of the Company, please see answer provided in the previous point.

73. Criteria that underlie the allocation of variable remuneration in shares and their maintenance

74. Criteria that underlie the allocation of variable remuneration in options

Not applicable in the case of the Company, please see answer provided in the previous point (Point 73) of this Report

75. Main parameters and reasoning concerning annual bonuses and any other non-cash benefits

The parameters and reasoning concerning annual bonuses and other non-pecuniary benefits are foreseen in the remuneration policy approved by the General Meeting of 21 May 2013 and transcribed in point 69 above, which is:

a) The functions performed;
b) The Company's economic situation
c) General market conditions for comparable situations

76. Main characteristics of complementary pension or early retirement schemes for the Administrators

By the Articles of Association approved in the General Meeting of 29 May 1998, Estoril Sol, SGPS, SA again confirmed, in article 36, the right to a retirement pension paid by the company to the former directors who had already retired, based on the previous article 25 of the Articles of Association that were then altered, and the same rights and benefits as those of directors, in office at that time, who had or would have then completed ten years of service – after entering retirement - rights and benefits to be regulated in a contract to be agreed between the Company and these directors.

Besides the pensions that arise from commitments assumed with retired directors, with regard to the others, accounting principles require provisions to be set up, notwithstanding the fact that this is not a constituted right, whether this be definitive or provisional. On this basis, Estoril Sol, based on an actuarial study updated each year, has reflected a provision in its accounts which on 31 December 2019 was 801,526 Euros, equal to the liabilities assumed in the case of the directors who had already retired, who receive an annual retirement pension broken down individually as follows: José Teodoro Telles 52,374 Euros. An identical provision is set up for 2,565,000 Euros to cover the future retirement pensions already contracted with Mário Assis Ferreira, Patrick Huen, Ambrose So and Man Hin Choi, who, when they retire, will receive an annual pension amount equivalent to that of the retired directors mentioned above.

Among do companies of the Group, the following pension rights of some Directors were reinforced, resulting from the execution of the retirement insurance policies taken out for the purpose: - Calvin ka Wing Chann 162,745 Euros

IV – Disclosure of remuneration

77. Indication of the annual remuneration earned, in aggregate and individualamount, by the Company's members of the Board of Directors

The members of the Board of Directors only received fixed remuneration in 2019, for the global amount of 105,000 Euros, broken down as follows:

Member	Office	Fixed Remuneration	Variable Remuneration	Total
Pansy Catilina Chiu King Ho	Member of Board of Directors	52.500,00	0,00	52.500,00
Jorge Armindo de Carvalho Teixeira	Member of Board of Directors	52.500,00	0,00	52.500,00
		TOTAL (€)		105.000,00

78. Any amounts paid by other companies in a control or group or that they are subject to the same domain as that of the Company

The members who comprise the boards of various operational companies of the Estoril Sol Group received overall remunerations paid by other companies in a control or group relationship amounting to a total of 2,353,000 Euros, broken down individually as follows:

Member	Office	Fixed Remuneration	Variable Remuneration	Total

Mário Alberto Neves Assis Ferreira	Chaiman of the Board of Directors	400.000,00	0,00	400.000,00
Man Hin Choi	Board of Directors	248.000,00	0,00	248.000,00
Pansy Catilina Chiu King Ho	Board of Directors	52.500,00	0,00	52.500,00
António Jodé de Melo Vieira Coelho	Board of Directors	400.000,00	0,00	400.000,00
Vasco Esteves Fraga	Board of Directors	400.000,00	0,00	400.000,00
Calvin Ka Wing Chann	Board of Directors	400.000,00	0,00	400.000,00
Miguel António Dias Urbano de Magalhães Queiroz Board of Directors		400.000,00	0,00	400.000,00
Jorge Armindo de Carvalho Teixeira	Board of Directors	52.500,00	0,00	52.500,00

TOTAL (€) 2.353.000,00

79. Compensation paid in the form of profit sharing and/or bonus payments

It has not been paid by the Company to members of the Governing Bodies any remuneration on profit sharing or bonuses.

80. Compensation paid or owed to former executive directors following loss of office

It has not been paid by the Company to former executive directors any compensation following loss of office and no such liabilities are due.

81. Remuneration of the Statutory Audit Board

The members of the Audit Board only received fixed remuneration in 2019, for the global 59,708 Euros, broken down as follows:

Manuel Maria Reis Boto 21,000 Euros; Vitor Pratas Sevilhano 14,000 Euros; Paulo Ferreira Alves 14,000 Euros; Lisete Sofia Pinto Cardoso 7,000 Euros.

In 2019, the Statutory Auditor earned 123,000 Euros for the services provided exclusively to Estoril-Sol, SPGS, S.A..

82. Remuneration of the Chairman of the Board of the Shareholders' General Meeting

The annual remuneration of the Chairman of the Board of the Shareholders' General Meeting is 5,000 Euros, was set by the Remuneration Committee as Act No. 24 of June 6, 2007 and remained for the performance in 2019.

V – Agreements with remuneration implications

83. Contractual limitations on compensations to be paid upon to director's dismissal without due cause and its relation with the variable component of the remuneration

There are no agreements in place that establish amounts to be paid in case of dismissal without due cause, without prejudice to the applicable legal provisions.

84. Reference to the existence and description, stating the sums involved, of the agreements between the company and members of the Board of Directors, providing for compensation in case of dismissal without due cause or termination of the employment relationship, following a change of control of the Company

There are no agreements made between the company and members of the Board of Directors, that provide for compensation in cases of dismissal, unfair dismissal or termination of employment following a change in Company control.

VI – Share attribution plans or stock options

85. Identification of the plan and recipients

There are no share attribution plans or stocks options within the Company.

86. Plan Features

Not applicable. See previous point (85)

87. Option rights granted to acquire shares ("stock options") where the beneficiaries are company employees

Not applicable. See previous point (85)

88. Control mechanisms in any system of employee participation in the capital

Until 31st December, 2019 it has not been foreseen any system of employee participation in the Company's Capital

E – Relevant transactions with related parties

I – Mechanisms and control procedures

89. Mechanisms for monitoring transactions with related parties

During 2019, no business was conducted between the company and the members of its administrative and supervisory bodies, holders of qualifying holdings or companies that are controlled by or grouped under the Company.

90. Transactions subjected to control during 2019

Please see answer to previous point (89)

91. Description of the procedures and criteria for intervention of the Statutory Audit Board for the purpose of preliminary assessment of the business carried out between the Company and holders of qualified shareholdings or entities that are in a relation with them, under the terms of article 20 of the Portuguese Securities Code

During 2019 no business was conducted between the company and holders of qualifying holdings or entities that are in any group or control relationship with them, within the terms of Article 20 of the SC.

There have been no material business with holders of qualifying holdings or entities that are in a relationship with them. For that reason there was not the need to obtain a prior opinion of the Audit Board for this purpose. With regard to the procedures and criteria required to define the relevant level of significance of these deals and other conditions for intervention, taking into account the specificities of Estoril-Sol, namely its shareholder structure, there was not until now the formalization of these procedures and conditions, nevertheless all business of the company, regardless of its relevance, take the necessary safeguard of all Estoril-Sol shareholders' interests.

II – Elements related to transactions

92. Information on transactions with related parties

The relevant information about the business with related parties can be found in note 15 of the Notes to the individual accounts of the Company, available on the Company website (www.estoril-solsgps.com) and also on the official website of the Committee on Securities Market (www.cmvm.pt).

PART II – STATEMENT OF COMPLIANCE

This Corporate Governance Report presents the description of the corporate governance structure in force at Estoril-Sol, also presenting the policies and practices whose adoption, under the validity of this model, is necessary and appropriate to ensure governance aligned with the best practices in this field.

1 . Identification of the adopted Corporate Governance Code

Estoril-Sol ensure that the governance report is presented in compliance with the legal requirements of article 245-A of the CVM and discloses, in the light of the principle comply or explain, the degree of compliance with the IPCG Recommendations included in the Code IPCG Corporate Governance Report 2018, model that is adopted here by Estoril-Sol

Estoril-Sol, in addition to adopting the 2018 Corporate Governance model of the IPCG, observed the Notes on the interpretation of the same (Note No. 1 of May 2018) and Note No. 2 of January 2020) elements that are available in different versions at https://cgov.pt, namely at:

https://cgov.pt/images/ficheiros/2018/codigo\_de\_governo\_das\_sociedades\_ipcg\_vf.pdf, https://cam.cgov.pt/images/ficheiros/2018/codigo-pt-2018-ebook.pdf, https://cgov.pt/base-de-dados/codigos-de-governo/1231-codigo-de-governo-das-sociedades-2018-nota-interpretativa-n-1 e https://cgov.pt/noticias/1398-nota-interpretativa-n-2-sobre-a-interpretacao-do-codigo-de governo-das-sociedades-ipcg-2018

The information and disclosure duties required by law and by the various CMVM guidelines and recommendations are also fulfilled. This Corporate Governance Report must be assessed as an integral part of the Estoril-Sol accounts documents reported for the 2019 fiscal year, as well as its Sustainability Report.

2 Analysis of compliance with the adopted Corporate Governance Code

The integrated and effective management of the Estoril-Sol Group is a purpose of the Board of Directors of Estoril-Sol, which, encouraging transparency in the relationship with investors and the market, has guided its performance through the permanent search for value creation, in promotion of the legitimate interests of shareholders, employees and other stakeholders. In this perspective, Estoril-Sol has been encouraging and promoting all actions aimed at adopting the best Corporate Governance practices, basing its policy on high ethical standards of social and environmental responsibility and with decisions increasingly based on criteria of sustainability.

For the purposes of complying with the provisions of paragraph o) of paragraph 1 of article 245-A of the CVM, the following are listed the Recommendations of the IPCG 2018 Corporate Governance Code, which the Company has complied with , with express indication of those that are adopted by Estoril-Sol and those that are not, together with the point in the Report where they are treated.

Without prejudice, it is noted that the consideration of the recommendations and the assessment of the respective compliance, in light of the aforementioned principle of comply or explain, cannot fail to take into account the specificities of the structure and organization of Estoril-Sol and, in that To this extent, it cannot fail to deserve a special reflection on the suitability and relevance of each recommendation to its reality and circumstances.

ChapterI –General Provisonsl

I.1. Company's relationship with investors and disclosure

Recommendation I.1.1: The Company should establish mechanisms to ensure, in a suitable and rigorous form, the production, management and timely disclosure of information to its governing bodies, shareholders, investors and other stakeholders, financial analysts, and to the markets in general.

Recommendation	Comments
Adopted	Report: 49, 56 a 65

I.2. Diversity in the composition and functioning of the company's governing bodies

Recommendation I.2.1. Companies should establish standards and requirements regarding the profile of new members of their governing bodies, which are suitable according to the roles to be carried out. Besides individual attributes (such as competence, independence, integrity, availability, and experience), these profiles should take into consideration general diversity requirements, with particular attention to gender diversity, which may contribute to a better performance of the governing body and to the balance of its composition.

Recommendation	Comments
Adopted	Report: 16 a 19, 24, 25

Recommendation I.2.2. The company's managing and supervisory boards, as well as their committees, should have internal regulations — namely regulating the performance of their duties, their Chairmanship, periodicity of meetings, their functioning and the duties of their members —, and detailed minutes of the meetings of each of these bodies should be carried out.

Recommendation	Comments
Adopted	Report: 15 a 17, 22, 23, 37, 38

Recommendation I.2.3. he internal regulations of the governing bodies — the managing body, the supervisory body and their respective committees — should be disclosed, in full, on the company's website.

Recommendation	Comments
Adopted	Report: 22, 34

Recommendation I.2.4. The composition, the number of annual meetings of the managing and supervisory bodies, as well as of their committees, should be disclosed on the company's website.

Recommendation	Comments
Adopted	Report: 23, 35

Recommendation I.2.5. The company's internal regulations should provide for the existence and ensure the functioning of mechanisms to detect and prevent irregularities, as well as the adoption of a policy for the communication of irregularities (whistleblowing) that guarantees the suitable means of communication and treatment of those irregularities, but safeguarding the confidentiality of the information transmitted and the identity of its provider, whenever such confidentiality requested..

Recommendation	Observações
Adopted	Estoril Sol,	widely		approved
	disseminated	a Code	of	Ethics	and
	Professional	Conduct.,	A	policy	for

communicating irregularities was established and adopted within the scope of the
-------------------------------------------------------------------------------------

I.3. Relationships between the company bodies

Recommendation I.3.1. The bylaws, or other equivalent means adopted by the company, should establish mechanisms that, within the limits of applicable laws, permanently ensure the members of the managing and supervisory boards are provided with access to all the information and company's collaborators, in order to appraise the performance, current situation and perspectives for further developments of the company, namely including minutes, documents supporting decisions that have been taken, calls for meetings, and the archive of the meetings of the managing board, without impairing the access to any other documents or people that may be requested fo

Recommendation	Comments
Adopted	Report: 50 a 55
	Although with preferential access by the
	respective administrative areas, due to their specialization and information specificities, the

	elements indicated are available, or can be made available on request, without any reservations, to

	all members of the governing bodies.

Recommendation I.3.2. Each of the company's boards and committees should ensure the timely and suitable flow of information, especially regarding the respective calls for meetings and minutes, necessary for the exercise of the competences, determined by law and the bylaws, of each of the remaining boards and committees.

Recommendation	Comments
Adopted	Report: 24, 35
	See also recommendation I.3.1.

I.4. Conflicts of interest

Recommendation I.4.1. The duty should be imposed, to the members of the company's boards and committees, of promptly informing the respective board or committee of facts that could constitute or give rise to a conflict between their interests and the company's interest..

Recommendation	Comments
Adopted	Report: 20, 32
	Without prejudice to the legal and regulatory
	duties that. in this regard, the members of the
	corporate bodies are responsible, there is a
	general duty and commitment of transparency
	and good faith that leads the Company to take for
	good the information provided by the said
	members, both in quantity and in quality. .

Recommendation I.4.2. Procedures should be adopted to guarantee that the member in conflict does not interfere in the decision-making process, without prejudice to the duty to provide information and other clarifications that the board, the committee or their respective members may request.

Recommendation	Comments
Adopted	To this date, no conflict situation has arisen that
	could justify the recommended adoption of
	procedures. Non interference in the decision

	making process would, from the outset, be
	ensured by the application of the legal rules
preventing voting.

I.5. Related party transactions

Recomendação I.5.1. The managing body should define, in accordance with a previous favourable and binding opinion of the supervisory body, the type, the scope and the minimum individual or aggregate value of related party transactions that: (i) require the previous authorization of the managing board, and (ii) due to their increased value require an additional favourable report of the supervisory body.

Recommendation	Comments
Adopted	The Company is unaware of the existence of
	significant commercial relations between the
	holders of qualifying holdings and the Company,
	as referred to in Point 10 of this Report Point 10

Recommendation I.5.2. The managing body should report all the transactions contained in Recommendation 1.5.1. to the supervisory body, at least every six months.

Recommendation	Comments
Adopted	The board of directors communicates to the audit
	board the transactions with related parties at the
	same time as the interim financial report, quarter
	and semester, and the annual financial report.

Chapter II – SHAREHOLDERS AND GENERAL MEETINGS

Recommendation II.2. The company should not adopt mechanisms that make decisionmaking by its shareholders (resolutions) more difficult, specifically, by setting a quorum higher than that established by law.

Recommendation	Comments
Not adopted	In matters considered especially relevant - namely
	the election of bodies admittedly very close to the
	Board of Directors - and in view of the strategic
	nature of the economic activity developed by the
	Estoril Sol Group, Article 13, paragraph 3 of the
	Articles of Association impose qualified majority
	shareholders to take decisions, either on the first
	or second call (see point 14 of the Report)

Recommendation II.3. The company should implement adequate means for the exercise of voting rights through postal votes, including by electronic means.

Recommendation	Comments
Parcial Adopted	Report: 12
	Voting by correspondence is permitted, but the
	possibility of voting by electronic means is not
	expressly provided for.

Recommendation II.4. The company should implement adequate means in order for its shareholders to be able to digitally participate in genera lmeetings.

Recommendation	Comments
Not Adopted	No solution has yet been implemented in this
	regard.

Recommendation II.5. The bylaws, which specify the limitation of the number of votes that can be held or exercised by a sole shareholder, individually or in coordination with other shareholders, should equally provide that, at least every 5 years, the amendment or maintenance of this rule will be subject to a shareholder resolution — without increased quorum in comparison to the legally established — and in that resolution, all votes cast will be counted without observation of theimposed limits.

Recommendation	Comments
Adopted	Report: 5
	To this date, no defensive measures have been
	adopted.

Recommendation II.6. The company should not adopt mechanisms that imply payments or assumption of fees in the case of the transfer of control or the change in the composition of the managing body, and which are likely to harm the free transferability of shares and a shareholder assessment of the performance of the members of the managing body.

Recommendation	Comments
Adopted	Report: 2, 4 a 6
	Without prejudice to the statutory restrictions on
	the transferability and ownership of shares, no
	measures were adopted with the nature of those
	described in the Recommendation.

Capter III – NON-EXECUTIVE MANAGEMENT, MONITORING AND SUPERVISION

Recommendation III.1. Without prejudice to question the legal powers of the chair of the managing body, if he or she is not independent, the independent directors should appoint a coordinator (lead independent director), from amongst them, namely, to: (i) act, when necessary, as an interlocutor near the chair of the board of directors and other directors, (ii) make sure there are the necessary condition sand means to carry out their functions; and (iii) coordinate the independent directors in the assessment of the performance of the managing body, as established in recommendation V.1.1.

Recommendation	Comments
Not Adopted	A lead independent director has not been
	appointed.

Recommendation III.2. The number of non-executive members in the managing body, as well as the number of members of the supervisory body and the number of the members of the committee for financial matters should be suitable for the size of the company and the complexity of the risks intrinsic to its activity, but sufficient to ensure, with efficiency, the duties which they have been attributed

Recommendation	Comments
Adopted	Report: 17, 31
	Taking into account the characteristics,
	shareholder structure and dimension of Estoril
	Sol, it considers that the adequacy to the
	mentioned elements is ensured, even though
	there are 7 non-executive directors (in a total of
	11 members of the Board of Directors); the
	number of members of the supervisory body is
	also considered adjusted.

Recommendation III.3. In any case, the number of non-executive directors should be higher than the number of executive directors.

Recommendation	Comments
Adopted	Taking into account the organizational characteristics and the effective shareholder structure of Estoril Sol, the number of non executive directors corresponds to 63.64% of the total members of the Board of Directors (7 out of
	11)

Recommendation III.4. Each company should include a number of non-executive directors that corresponds to no less than one third, but always plural, who satisfy the legal requirements of independence. For the purposes of this recommendation, an independent person is one who is not associated with any specific group of interest of the company, nor under any circumstance likely to affect his/her impartiality of analysis or decision, namely due to:

i. having carried out functions in any of the company's bodies for more than twelve years, either on a consecutive or non-consecutive basis;
ii. having been a prior staff member of the company or of a company which is considered to be in a controlling or group relationship with the company in the last three years;
iii. having, in the last three years, provided services or established a significant business relationship with the company or a company which is considered to be in a controlling or group relationship, either directly or as a shareholder, director, manager or officer of the legal person;
iv. having been a beneficiary of remuneration paid by the company or by a company which is considered to be in a controlling or group relationship other than the remuneration resulting from the exercise of a director's duties;
v. having lived in a non-marital partnership or having been the spouse, relative or any first degree next of kin up to and including the third degree of collateral affinity of company directors or of natural persons who are direct or indirect holders of qualifying holdings, or
vi. having been a qualified holder or representative of a shareholder of qualifying holding.

Recommendation	Comments
Not Adopted	Taking into account, essentially, and on the one
	hand, the shareholding structure of the company
	and, on the other hand, the specificity of the
	economic activity indirectly developed by
	Socieda-de, which has privileged the progression
	of the company's staff and of the Group's

companies to the management of this company, no independent member of the Board is identified
in the management, in the light of the aforementioned criteria.

Recommendation III.5. The provisions of (i) of recommendation III.4 does not inhibit the qualification of a new director as independent if, between the termination of his/her functions in any of the company's bodies and the new appointment, a period of 3 years has elapsed (cooling-off period)..

Recommendation	Comments
Not Applicable	Cfr. See recommendation III.4.

Recommendation III.6. Non-executive directors should participate in the definition, by the managing body, of the strategy, main policies, business structure and decisions that should be deemed strategic for the company due to their amount or risk, as well as in the assessment of the accomplishment of these actions.

Recommendation	Comments
Adopted	Report: 23

Recommendation III.7. The supervisory body should, within its legal and statutory competences, collaborate with the managing body in defining the strategy, main policies, business structure and decisions that should be deemed strategic for the company due to their amount or risk, as well as in the assessment of the accomplishment of these actions.

Recommendation	Comments
Not Adopted	-----

Recommendations III.8. The supervisory body, in observance of the powers conferred to it by law, should, in particular, monitor, evaluate, and pronounce itself on the strategic lines and the risk policy defined by the managing body.

Recommendation	Comments
Adopted	Report: 18, 24, 37, 38

Recommendation III.9. Companies should create specialised internal committees that are adequate to their dimension and complexity, separately or cumulatively covering matters of corporate governance, remuneration, performance assessment, and appointments.

Recommendation	Comments
Adopted	Report: 28, 67, 68
	There is a Remuneration Setting Committee. In
	view of the size and complexity of Estoril Sol, it
	is understood that the creation of other
	specialized internal commissions is not justified.

Recommendation III.10. Risk management systems, internal control and internal audit systems should be structured in terms adequate to the dimension of the company and the complexity of the inherent risks of the company's activity.

Recommendation	Comments
Adopted	Report: 50 a 53
	It is considered that the mechanisms
	implemented at Estoril Sol, for internal control
	and auditing, as well as for risk management,

are adjusted to the size of the Company, the risks of its activity and its level of exposure to the
market.

Recommendation III.11. The supervisory body and the committee for financial affairs should supervise the effectiveness of the systems of risk management, internal control and internal audit, and propose adjustments where they are deemed to be necessary..

Recommendation	Comments
Adopted	Report: 38, 50
	Within the scope of its legal and statutory
	powers, the supervisory body can control the
	effectiveness of the systems implemented and
	propose possible adjustments. The Supervisory
	Board monitors and monitors the observance of
	the law and the statutes, regularly evaluating the
	effectiveness of the internal control systems
	implemented in the Company, proposing the
	improvements that it considers necessary and
	pronouncing on their effectiveness. in its annual
	report and opinion.

Recommendation III.12. The supervisory body should provide its view on the work plans and resources of the internal auditing service, including the control of compliance with the rules applied to the company (compliance services) and of internal audit, and should be the recipient of the reports prepared by these services, at least regarding matters related with approval of accounts, the identification and resolution of conflicts of interest, and the detection of potential irregularities.

Recommendation	Comments
Adopted	Report: 38, 50
	Cfr. See recommendation III.11.

Capter IV – EXECUTIVE MANAGEMENT

Recommendations IV.1. The managing body should approve, by internal regulation or equivalent, the rules regarding the action of the executive directors and how these are to carry out their executive functions in entities outside of the group.

Recommendation	Comments
Not Adopted	----

Recommendation IV.2. The managing body should ensure that the company acts consistently with its objects and does not delegate powers, namely, in what regards:

i. the definition of the strategy and main policies of the company;
ii. the organisation and coordination of the business structure;
iii. matters that should be considered strategic in virtue of the amounts involved, the risk, or special characteristics.

Recommendation	Comments
Adopted	Report: 16
	The Board of Directors ensures that it acts in
	accordance with the objectives and social
	interests, and has not delegated powers in the
	context of the matters indicated. The approval
	and entry into force of a Code of Conduct and a
	Sustainability Code show a transversal concern

with a performance consistent with the principles
defended.

Recommendation IV.3. In matters of risk assumption, the managing body should set objectives and look after their accomplishment.

Recommendation	Comments
Adopted	Report: 50 a 53

Recommendation IV.4. The supervisory board should be internally organised, implementing mechanisms and procedures of periodic control that seek to guarantee that risks which are effectively incurred by the company are consistent with the company's objectives, as set by the managing body.

Recommendation	Comments
Adopted	Report: 23, 50 a 53

Capter V – EVALUATION OF PERFORMANCE, RE-MUNERATION AND APPOINTMENT

V.1.Annual evaluation of performance

V.1.1. The managing body should annually evaluate its performance as well as the performance of its committees and delegated directors, taking into account the accomplishment of the company's strategic plans and budget plans, the risk management, the internal functioning and the contribution of each member of the body to these objectives, as well as the relationship with the company's other bodies and committees.

Recommendation	Comments
Adopted	Report: 24, 25
	The management body makes an annual
	assessment of its performance, namely with
	regard to the discussion and report related to the
	end of each financial year and projection /
	budgeting for the following financial year.

V.1.2. The supervisory body should supervise the company's management, especially, by annually assessing the accomplishment of the company's strategic plans and of the budget, the risk management, the internal functioning and the contribution of each member of the body to these objectives, as well as the relationship with the company's other bodies and committees.

Recommendation	Comments
Adopted	Report: 24, 50 a 53
	The Audit Board supervises and monitors
	compliance with the law and the Company's
	articles of association, ensuring the
	recommended supervision within the scope of its
	powers and presenting the suggestions and
	proposals it deems convenient; as a rule, these
	references are included in the annual report and
	opinion.

V.2.Remuneration

V.2.1. The remuneration should be set by a committee, the composition of which should ensure its independence from management.

Cumprimento	Observações
Parcial Adopted	Report: 66 a 68

Remuneration setting is the responsibility of the
Remuneration Committee.
All members of the Remuneration Committee
are members of the Board of Directors. Without
prejudice, Estoril Sol understands that the rigor
of the members of its Remuneration Committee
is not compromised, since they are elected by
the General Meeting, have recognized know-how
and experience in matters of remuneration policy
and, over the years, successive members have
performed their duties with total impartiality,
transparency and objectivity in accordance with
the applicable remuneration criteria.

V.2.2. The remuneration committee should approve, at the start of each term of office, execute, and annually confirm the company's remuneration policy for the members of its boards and committees, including the respective fixed components. As to executive directors or directors periodically invested with executive duties, in the case of the existence of a variable component of remuneration, the committee should also approve, execute, and confirm the respective criteria of attribution and measurement, the limitation mechanisms, the mechanisms for deferral of payment, and the remuneration mechanisms based on the allocation of options and shares of the company.

Recommendation	Comments
Adopted	Report: 66, 67, 69 a 88
	Since the beginning of its mandate, the
	Remuneration Committee has adhered to the
	Remuneration Policy in force, whether for fixed
	or variable components, or for the policy of
	supplementary pension schemes or early
	retirement.

V.2.3. The statement on the remuneration policy of the managing and supervisory bodies, pursuant to article 2 of Law no. 28/2009, 19th June, should additionally contain the following:

a) the total remuneration amount itemised by each of its components, the relative proportion of fixed and variable remuneration, an explanation of how the total remuneration complies with the company's remuneration policy, including how it contributes to the company's performance in the long run, and information about how the performance requirements were applied;;
b) remunerations from companies that belong to the same group as the company;
c) the number of shares and options on shares granted or offered, and the main conditions for the exercise of those rights, including the price and the exercise date;
d) information on the possibility to request the reimbursement of variable remuneration;
e) information on any deviation from the procedures for the application of the approved remuneration policies, including an explanation of the nature of the exceptional circumstances and the indication of the specific elements subject to derogation;
f) information on the enforceability or non-enforceability of payments claimed in regard to the termination of office by directors.

Recommendation	Comments
Not Adopted	----

V.2.4. For each term of office, the remuneration committee should also approve the directors' pension benefit policies, when provided for in the bylaws, and the maximum amount of all compensations payable to any member of a board or committee of the company due to the respective termination of office.

Recommendation	Comments
Parcial Adopted	Report: 66, 67, 69 a 88

Since the beginning of its mandate, the
Remuneration Committee has adhered to the
Remuneration Policy in force, whether for fixed
or variable components, or for the policy of
supplementary pension schemes or early
retirement.
In the event of termination of employment, the
compensation to be paid is defined in terms of
the law.

V.2.5. In order to provide information or clarifications to shareholders, the chair or, in case of his/her impediment, another member of the remuneration committee should be present at the annual general meeting, as well as at any other, whenever the respective agenda includes a matter linked with the remuneration of the members of the company's boards and committees or, if such presence has been requested by the shareholders..

Recommendation	Comments
Adopted	This presence will be ensured, if and to the
	extent that the topics on the Agenda justify it and
	such presence is required by shareholders.

V.2.6. Within the company's budgetary limitations, the remuneration committee should be able to decide, freely, on the hiring, by the company, of necessary or convenient consulting services to carry out the committee's duties. The remuneration committee should ensure that the services are provided independently and that the respective providers do not provide other services to the company, or to others in controlling or group relationship, without the express authorization of the committee.

Recommendation	Comments
Adopted	Report: 67
	The Remuneration Setting Committee may freely
	decide to hire the necessary or convenient
	consultancy services for the exercise of its
	functions, if it deems it necessary or convenient.
	Without prejudice, the company is not aware
	that these services have been contracted.

V.3.Director remuneration

V.3.1. Taking into account the alignment of interests between the company and the executive directors, a part of their remuneration should be of a variable nature, reflecting the sustained performance of the company, and not stimulating the assumption of excessive risks.

Recommendation	Comments
Not Adopted	Although it is admitted that the General Meeting
	may decide to allocate a variable component of
	remuneration to the members of the Board of
	Directors (cf. Report: 69, 71 - art. 34 of the
	Articles of Association), it has not been verified
	the allocation of variable remuneration.

V.3.2. A significant part of the variable component should be partially deferred in time, for a period of no less than three years, thereby connecting it to the confirmation of the sustainability of . the performance, in the terms defined by a company's internal regulation.

	Recommendation Comments
--	----------------------------	--

Not Applicable	Cfr. See recommendation V.3.1.

V.3.4. When variable remuneration includes the allocation of options or other instruments directly or indirectly dependent on the value of shares, the start of the exercise period should be deferred in time for a period of no less than three years.

Recommendation	Comments
Not Aplicable	Cfr. See recommendation V.3.1.

V.3.5. The remuneration of non-executive directors should not include components dependent on the performance of the company or on its value.

Recommention	Comments
Not Aplicable	Cfr. See recommendation V.3.1.

V.3.6. The company should be provided with suitable legal instruments so that the termination of a director's time in office before its term does not result, directly or indirectly, in the payment to such director of any amounts beyond those foreseen by law, and the company should explain the legal mechanisms adopted for such purpose in its governance report.

Recommendation	Comments
Adopted	Report: 83, 84
	There are no agreements that can legitimately
	originate the payment to the administrator of any
	amounts other than those provided for by law in
	the event of termination of office before the term
	of office.

V.4.Appointments

V.4.1. The company should, in terms that it considers suitable, but in a demonstrable form, promote that proposals for the appointment of the members of the company's governing bodies are accompanied by a justification in regard to the suitability of the profile, the skills and the curriculum vitae to the duties to be carried out.

Recommendation	Comments
Adopted	Report: 19, 26
	As already mentioned, the Company has
	privileged the progression of staff of the company
	and of the Group companies to integrate the
	Board of Directors, duly justified and with
	demonstration of adequacy of profile, knowledge
	and curricular experience. The supervisory body
	is essentially proposed for its demonstrated
	experience, especially considering the
	specificities of the activity indirectly performed by
	the Company. This demonstration is made by the
	personal knowledge of those responsible for the
	proposals and, as well, by the availability of the
	curricula of the members of the corporate bodies.

V.4.2. The overview and support to the appointment of members of senior management should be attributed to a nomination committee, unless this is not justified by the company's size.

Recommendation	Comments
Adoptada	Estoril Sol's size does not justify the attribution of
	specialized skills to a remuneration committee.

V.4.3. This nomination committee includes a majority of non-executive, independent members..

Recommendation	Comments
Not applicable	Cfr. See recommendation V.4.2.

V.4.4. The nomination committee should make its terms of reference available, and should foster, to the extent of its powers, transparent selection processes that include effective mechanisms of identification of potential candidates, and that those chosen for proposal are those who present a higher degree of merit, who are best suited to the demands of the functions to be carried out, and who will best promote, within the organisation, a suitable diversity, including gender diversity.

Recommendation	Comments
Not applicable	Cfr. See recommendation V.4.2.

Capter VI – RISK MANAGEMENT

VI.1. The managing body should debate and approve the company's strategic plan and risk policy, which should include a definition of the levels of risk considered acceptable..

Recommendation	Comments
Adopted	Report: 50 a 55

VI.2. Based on its risk policy, the company should establish a system of risk management, identifying (i) the main risks it is subject to in carrying out its activity; (ii) the probability of occurrence of those risks and their respective impact; (iii) the devices and measures to adopt towards their mitigation; (iv) the monitoring procedures, aiming at their accompaniment; and (v) the procedure for control, periodic evaluation and adjustment of the system.

Recommendation	Comments
Adopted	Report: 50 a 55

VI.3. The company should annually evaluate the level of internal compliance and the performance of the risk management system, as well as future perspectives for amendments of the structures of risk previously defined.

Recommedation	Observações
Adopted	Report: 24, 25
	The management body makes an annual assessment, namely regarding the discussion and report related to the end of each financial year and projection / budgeting of the following
	financial year

Capter VII – FINANCIAL STATEMENTS AND ACCOUNTING

VII.1 Financial Information

VII.1.1. The supervisory body's internal regulation should impose the obligation to supervise the suitability of the preparation process and the disclosure of financial information by the managing body, including suitable accounting policies, estimates, judgments, relevant disclosure and its consistent application between financial years, in a duly documented and communicated form..

Recommendation	Comments
Adopted	Report: 38, 50 a 55
	These attributions are part of the legal and
	statutory powers of the supervisory body, with no
	express provision for them in the regulations of
	that corporate body.l.

VII.2 Statutory audit of accounts and supervision

VII.2.1. Through the use of internal regulations, the supervisory body should define:

i. the criteria and the process of selection of the statutory auditor;
ii. the methodology of communication between the company and the statutory auditor;
iii. the monitoring procedures destined to ensure the independence of the statutory auditor;
iv. the services, besides those of accounting, which may not be provided by the statutory auditor..

Recommendations	Comments
Adopted	Repot: 38, 45
	The Audit Board is responsible for supervising
	the activity and independence of the Statutory
	Auditor and the External Auditor. These are the
	powers of the supervisory body, with no express
	provision for them in internal regulations.

VII.2.2. The supervisory body should be the main interlocutor of the statutory auditor in the company and the first recipient of the respective reports, having the powers, namely, to propose the respective remuneration and to ensure that adequate conditions for the provision of services are ensured within the company.

Recommendation	Comments
Adopted	Report: 38, 45
	The Audit Board is the first recipient of all information produced by the Statutory Auditor and the External Auditor.

VII.2.3. The supervisory body should annually assess the services provided by the statutory auditor, their independence and their suitability in carrying out their functions, and propose their dismissal or the termination of their service contract by the competent body when this is justified for due cause..

Recommendation	Comments
Adopted	Report: 38, 45
	The Audit Board carries out an annual
	assessment of the work performed,
	independence and suitability for exercising the
	functions of the Statutory Auditor and the
	External Auditor.

VII.2.4. The statutory auditor should, within their powers, verify the application of policies and systems of remuneration of governing bodies, the effectiveness and the functioning of the mechanisms of internal control, and report any irregularities to the supervisory body..

Recommendation	Comments
Adopted	The statutory auditor carries out these checks, within the scope of the powers attributed to him by law and by the ethical standards and good practices to which his professional activity is subject.

VII.2.5. The statutory auditor should collaborate with the supervisory body, immediately providing information on the detection of any relevant irregularities as to the accomplishment of the duties of the supervisory body, as well as any difficulties encountered whilst carrying out their duties

Recommendation	Comments
Adopted	The	statutory	auditor	proceeds	as
	recommended, within the scope of the powers
	attributed to him by law and by the deontological
	norms	and good	practices	to which	his
		professional activity is subject.

3 Other information

The Company complies with most of the recommendations of governance of the Code of Governance adopted. Despite the reformulation operated by the CMVM, in particular the entry into force of Regulation No. 4/2013 and all related documentation - the CMVM Code adopted by Estoril-Sol, still contains many aspects that are directed to issuers of shares admitted to trading on a regulated market whose size, social purpose, and especially the degree of dispersion of the capital market does not correspond to concrete and stable characteristics of Estoril-Sol.

In fact, and in particular the circumstance of the free-float (capital dispersed on the market) being around 6.93 % of the share capital, necessarily has consequences in terms of the concrete appropriateness of the Company's model of governance, justifying the inappropriateness of the adoption or application of some recommendations of the Code of Governance divulged by the CMVM and adopted by Estoril-Sol which consider and use as a reference public companies with very different characteristics for those of Estoril-Sol.

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Under the terms of article 30 of the Articles of Association of Estoril-Sol, SGPS,S.A. and article 295 (1) of the Commercial Companies Code, a minimum of 5% of the net profit is intended for the constitution of the "Legal reserve" and, if necessary, its reintegration until this reserve reaches 20% of the share capital.

As the share capital is 59,968,420 Euros, 20% corresponds to 11,993,684 Euros, so that the legal reserve as of December 31st, 2019, in the amount of 8,375,784 Euros, needs to be reinforced, in accordance with the above, by 5% of the positive net profit of the year 2019.

Given the accounting rules in force and under the terms of the article 295 (2) paragraph d), of the Commercial Companies Code, part of the net profit of the year 2019 is not available for distribution. This unavailability is related with the application of the equity method in respect to gains and losses imputed from subsidiaries. At this date, December 31st, 2019, subsidiary companies did not provide Estoril-Sol, SGPS, S.A. results recorded in accordance with the equity method in the amount of 1,484,608 Euros, meaning that they that are not available for distribution to the shareholders of Estoril-Sol, SGPS, S.A.

Under the terms of the article 294 (1), of the Commercial Companies Code, half of the distributable profit must be distributed to the shareholders, unless otherwise established in the Articles of Association, or by a deliberation of a General Meeting called for this purpose, in which case ¾ of shareholder votes are required. The Articles of Association diverge of the requirements foreseen in the Commercial Companies Code, requiring that decisions taken on the above terms obtain approval by a simple majority of the votes corresponding to the share capital at the General Meeting.

Accordingly and in compliance with the provisions applicable under the law and the Articles of Association, the Board of Directors proposes:

a) The net positive profit of the year 2019 in the total amount of 9,910,553 Euros, as per the corporate individual financial statements, be appropriated as follows:

-	To "Legal Reserve"	495,530 Euros;
-	To "Adjustments to Financial Investments – Unassigned Profits"	1,484,608 Euros;
-	To "Retained earnings"	7,930,415 Euros;

Estoril, 27 th of April 2020

The Board of Directors

Chairman Stanley Hung Sun Ho
Vice-Chairmen Mário Alberto Neves Assis Ferreira
- Patrick Wing Ming Huen
Directors Pansy Catilina Chiu King Ho
- Ambrose Shu Fai So
- Man Hin Choi
- António José de Melo Vieira Coelho
- Vasco Esteves Fraga
- Jorge Armindo de Carvalho Teixeira
- Calvin Ka Wing Chann
- Miguel António Dias Urbano de Magalhães Queiroz

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In accordance to nº5 of article 447 of the Commercial Companies Code, the Information regarding the securities issued by ESTORIL-SOL, SGPS, S.A., and by companies with which the Company is in controlling or group relationship, which are owned by the members of the Corporate Offices of the Company on 31st December 2019 is as follows:

	Nr shares		Value	Nr shares	Nr shares	Nr shares
	31.12.18	Date	(€/share)	purchased	sold	31.12.19
Board of Directors
Stanley Hung Sun Ho	135 662	-	-	-	-	135 662
Mário Alberto Neves Assis Ferreira	601	-	-	-	-	601
Patrick Wing Ming Huen	55 000	-	-	-	-	55 000
Pansy Catilina Chiu King Ho	0	-	-	-	-	0
Ambrose Shu Fai So	50 000	-	-	-	-	50 000
Man Hin Choi	527	-	-	-	-	527
António José de Melo Vieira Coelho	0	-	-	-	-	0
Vasco Esteves Fraga	608	-	-	-	-	608
Jorge Armindo de Carvalho Teixeira	0	-	-	-	-	0
Calvin Ka Wing Chann	1 000	-	-	-	-	1 000
Miguel António Dias Urbano de Magalhães Queiroz	0	-	-	-	-	0
Advisory Board
Rui José da Cunha	12 300	-	-	-	-	12 300
Audit Board
Manuel Maria Reis Boto	0	-	-	-	-	0
Vitor Prata Sevilhano Ribeiro	0	-	-	-	-	0
Paulo Ferreira Alves	0	-	-	-	-	0
Lisete Sofia Pinto Cardoso	0	-	-	-	-	0
Statutory Auditor
Pedro Miguel Argente de Freitas e Matos Gomes	0	-	-	-	-	0

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FINANSOL, SOCIEDADE DE CONTROLO, SGPS, S.A.

On 31st December 2019, ESTORIL SOL, SGPS, S.A. held 62.565 treasury shares, and as FINANSOL - SOCIEDADE DE CONTROLO, SGPS, S.A., on 31 December 2019, held 6.930.604 shares of ESTORIL-SOL, SGPS, S.A., it was a direct holder of 57,79% of the share capital and 58,09% of the voting rights.

Therefore, in overall terms, the direct and indirect stake of FINANSOL in the capital of ESTORIL-SOL is 57,79%, and 60,23% to the voting rights.

AMORIM - ENTERTAINMENT E GAMING INTERNATIONAL, S.G.P.S, S.A.

On 31st December 2019, ESTORIL-SOL, SGPS, S.A. held 62.565 treasury shares, and, as AMORIM – ENTERTAINMENT E GAMING INTERNATIONAL, SGPS, S.A. held 3.917.793 shares, this company was a direct holder of 32,67% of the share capital and 32,84% of the voting rights of ESTORIL SOL, SGPS, S.A..

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SEPARATE FINANCIAL STATEMENTS

AND

NOTES TO THE SEPARATE FINANCIAL STATEMENTS

STATEMENTS OF FINANCIAL POSITION ON 31st DECEMBER 2019 AND 2018

(Amounts stated in Euros)

ASSETS	Notes	31-Dec-2019	31-Dec-2018

NON - CURRENT ASSETS:
Right-of-use assets	1 2	57 876	-
Investments in subsidiaries	1 1	109 302 499	113 038 157
Other non-current assets	1 3	984	984
Total non-current assets		109 361 359	113 039 141
CURRENT ASSETS:
Current tax asset	1 6	22 200	34 200
Other current assets	1 4	2 619 817	2 445 172
Cash and cash equivalents	1 7	2 498 105	167 531
Total current assets		5 140 122	2 646 904
Total assets		114 501 481	115 686 044
EQUITY AND LIABILITIES
EQUITY
Capital	1 8	59 968 420	59 968 420
Treasury shares	1 8	(708 306)	(708 306)
Share issue premiums	1 8	960 009	960 009
Legal reserves	1 9	8 375 784	7 688 178
Other reserves and retained earnings	1 9	12 926 904	5 778 174
Other variations in equity	1 9	5 669 914	4 975 129
Net profit of the year	2 0	9 910 553	13 752 121
Total equity		97 103 278	92 413 725

LIABILITIES:
NON-CURRENT LIABILITIES:
Provisions	7	4 643 476	4 342 664
Lease liabilities	2 1	37 805	-
Total non-current liabilities		4 681 281	4 342 664
CURRENT LIABILITIES:
Lease liabilities	2 1	20 813	-
Current tax liability	1 6	45 000	45 426
Other current liabilities	2 2	12 651 109	18 884 229
Total current liabilities		12 716 922	18 929 655
Total liabilities		17 398 203	23 272 320
Total equity and liabilities		114 501 481	115 686 044

The accompanying notes form an integral part of the statement of financial position as of 31 December 2019.

STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEARS ENDED 31 DECEMBER 2019 AND 2018

(Amounts expressed in Euros)

	Notes	2019	2018
OPERATING COSTS
Supplies and services	4	(652 644)	(647 919)
Personnel costs	5	(360 360)	(357 355)
Depreciation and amortization	6	(11 184)	-
Other operating expenses	8	(56 855)	(44 817)
Total operating costs		(1 081 044)	(1 050 090)
Operating results		(1 081 044)	(1 050 090)

NET FINANCIAL ITEMS:
Financial expenses	9	(20 843)	(13 154)
Gains on subsidiaries	7 e 11	11 057 440	14 860 791
Profit before tax		9 955 553	13 797 547
Income tax	1 0	(45 000)	(45 426)
Net profit for the year		9 910 553	13 752 121
Net profit for the year		9 910 553	13 752 121
Items that will not be subsequently reclassified to profit or loss
- Remeasurement of post-employment benefits liabilities	7	(221 000)	(7 000)
Net profit of the year		9 689 553	13 745 121

The accompanying notes form an integral part of the statement of profit and loss and other comprehensive income of the year as of 31 December 2019.

CASH FLOW STATEMENTS

OF THE YEARS ENDED 31 DECEMBER 2019 AND 2018

(Amounts expressed in Euros)

	Notes	2018	2017

OPERATING ACTIVITIES:
Payments to suppliers		(688 032)	(628 350)
Payments to staff		(265 405)	(267 326)
Cash flow generated by operations		(953 438)	(895 676)
Payments of income tax		(33 426)	(50 482)
Other payments related to operating activities		(226 734)	(44 826)
Cash flow generated by operating activities (1)		(1 213 597)	(990 984)
INVESTING ACTIVITIES:
Receipts from:
Dividends	1 1	8 242 521	6 000 000
		8 242 521	6 000 000
Payments in respect of:
Additional capital payments made to subsidiary companies	1 1	(3 600 000)	(6 600 000)
Investments in subsidiaries	1 1	(50 000)
		(3 650 000)	(6 600 000)
Cash flow from investing activities (2)		4 592 521	(600 000)

FINANCING ACTIVITIES:
Payments in respect of:
Amortization of lease liabilities	1 5	(11 404)	-
Interest and similar costs	9	(19 881)	(13 154)
Dividends	2 0	(4 989 101)	(4 584 241)
		(5 020 386)	(4 597 394)
Cash received in respect of:
Loans obtained from related companies	1 5	3 972 036	6 288 282
		3 972 036	6 288 282
Cash flow from related parties (3)		(1 048 350)	1 690 888
Variation in cash and cash equivalents (4) = (1) + (2) + (3)		2 330 574	99 904
Cash and cash equivalents at the begining of the year	1 7	167 531	67 627
Cash and cash equivalents at the end of the year	1 7	2 498 105	167 531
The accompanying notes form an integral part of the cash flow statement for the year ended 31 December 2019.

THE ACCOUNTANT			THE BOARD OF DIRECTORS


107

STATEMENTS OF CHANGES IN EQUITY

OF THE YEARS ENDED ON 31st DECEMBER 2019 AND 2018

(Amounts expressed in Euros)

	Notes	Capital (Note 18)	Treasury shares (Note 18)	Share issue premiums (Note 18)	Legal reserves (Note 19)	Other reserves and retained earnings (Note 19)	Other variations in equity (Note 19)	Net result of the year (Note 20)	Total equity
Balance at 1 January 2018		59.968.420	(708.306)	960.009	7.154.428	1.706.655	3.502.390	10.675.008	83.258.604
Appropriation of net profit for the year ended in 31 December 2017	2 0	-	-	-	533.750	4.078.519	1.472.739	(10.675.008)	(4.590.000)
Comprehensive income for the year ended in 31 December 2018	7	-	-	-	-	(7.000)	-	13.752.121	13.745.121
Balance at 31 December 2018		59.968.420	(708.306)	960.009	7.688.178	5.778.174	4.975.129	13.752.121	92.413.725
Appropriation of net profit for the year ended in 31 December 2018	2 0	-	-	-	687.606	7.369.730	694.785	(13.752.121)	(5.000.000)
Comprehensive income for the year ended in 31 December 2019	7	-	-	-	-	(221.000)	-	9.910.553	9.689.553
Balance at 31 December 2019		59.968.420	(708.306)	960.009	8.375.784	12.926.904	5.669.914	9.910.553	97.103.278

The accompanying notes form an integral part of the statement of changes in equity for the year ended 31 December 2019.

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1. INTRODUCTION

Estoril-Sol, SGPS., S.A., ("Company") is a public limited-liability company, which resulted from a change, on 18 March 2002, of the legal status of Estoril-Sol, S.A. which was constituted on 25 June 1958 and has its registered office in Av. Dr. Stanley Ho, Casino Estoril building. As a result, all operations that had been carried out were transferred to companies incorporated for this purpose, assuming the status of its subsidiaries. In turn, the parent company's main operations involved holdings management with its shares listed on the Euronext Lisbon.

The main business sector in which the subsidiaries operates consists of the operation of physical casinos of games, an activity regulated by Turismo de Portugal through the Gaming Regulation and Inspection Service, under the concession contracts of the Póvoa game concession (until 2023), which includes the exploration of the Póvoa de Varzim Casino, and the Estoril game concession (until 2020), which includes the Estoril Casino and the Lisboa Casino. In addition, in 2016 one of the subsidiaries began its activity of exploring online games through the ESC Online site and started subsequently the activity related to sports betting, under the assigned licenses, valid for 3 years and renewable. During the year ended on December 31, 2019, the license granted for the exploration of online games of chance was renewed for an additional period of 3 years.

Under the aforementioned concession contracts, reversible tangible fixed assets are recognized in the financial statements of the subsidiaries that will be delivered to the State at the end of the concession. These assets correspond essentially to gambling equipment and assets assigned to the buildings of the Póvoa de Varzim and Estoril Casinos. The building related to Casino de Lisboa will continue to be owned by the subsidiary Estoril-Sol (III) – Turismo, Animação e Jogo, S.A. after the end of the concession and as such is not considered as being reversible.

The Company's social object is the management of shareholdings.

The attached financial statements are presented in Euros, given that this is the currency preferentially used in the economic environment in which the Company operates, and refer to the Company in separate terms.

These separate financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"), as adopted by the European Union, and interpretations of the International Financial Reporting Interpretation Committee ( "IFRIC"), for approval and publication in accordance with the legislation in force.

The accompanying financial statements do not include the effect of the consolidation of assets, liabilities, income and expenses, which will be made in the consolidated financial statements. The effect of the consolidation is to increase the assets, liabilities and operating income net of gaming taxes by 56,048,729 Euros, 49,570,666 Euros and 120,321,119 Euros, respectively.

These financial statements were approved by the Board of Directors on April 27, 2020 and are subject to the approval of the Company's shareholders at a General Meeting of Shareholders to be held.

2. MAIN ACCOUNTING POLICIES

2.1 Bases of presentation

The financial statements were prepared on a going concern basis according to which the assets are to be realized and the liabilities settled in the normal course of operations and from the accounting books and records of the Company.

The Board of Directors evaluated the Company's ability to operate on a continuous basis, based on all relevant information, facts and circumstances, of a financial, commercial and other nature, including events subsequent to the reference date of the financial statements, available on the future (Note 27). As a result of the evaluation carried out (Note 25), the Board of Directors concluded that the Company has adequate resources to maintain its activities, with no intention to terminate them in the short term, and considered it appropriate to use the going concern assumption in the preparation of the financial statements from the accounting books and records of the Company. Furthermore, the concession agreements of the Estoril and Póvoa de Varzim Game Zones, held by its subsidiaries, authorize the exploration of the Casinos de Lisboa and Estoril and Casino da Póvoa, accordingly with the respective concession and its applicable legal framework until 31 December 2020 and 2023, respectively. As of this date, the terms and conditions of the public tender's specifications for the award of the new Game concession in Estoril's permanent game zone are not yet known. The shareholder structure of Estoril-Sol (III), and the respective Board of Directors, remains expectant as to the launch of the public tender, and their intention is to compete for the new game concession from the Estoril's permanent Game Zone. It is, therefore, in this spirit, that the Board of Directors declares itself committed to maintaining the new game concession in the game zone of Estoril, believing that the financial strength of the concessionaire, supported, if necessary, by the bank partners with whom it has always had a fruitful relationship, will be enough to continue to lead the sector of physical casino games in Portugal. Considering the expected results obtained from the gambling activity exploitation in the concession areas, and the possible renewal of referred concessions, as well as the respective assets' value of use for a concessionaire of the exclusive gaming exploitation, no losses are expected on those assets that are not registered on December 31, 2019. Therefore, the Board of Directors believes that, regardless of the outcome of a new tender for the new concessions of the Estoril and Póvoa Game Zones, under the terms that may be determined by the State, for the period beginning on January 1, 2021 and January 1, 2024, respectively, the use of the going concern assumption is appropriate, not being expected unrecognized responsibilities related with that result in the financial statements as of December 31, 2019, which will be decisive for the future realization value of assets of the subsidiaries (Note 1).

The Company has prepared, in accordance with current legislation, consolidated financial statements for separate approval.

2.2 Financial investments

Investments in subsidiaries are recognized under the equity method. In accordance with the equity method, financial investments are initially recorded at acquisition cost and subsequently adjusted based on changes in the Company's share of the net assets of the related entities after acquisition. The Company's results include its share in the results of these entities.

The excess of the acquisition cost over the fair value of identifiable assets and liabilities of each entity acquired on the acquisition date is recognized as goodwill and is kept in the financial investment value. If the difference between the acquisition cost and the fair value of the net assets and liabilities acquired is negative, this is recognized as income of the year.

An assessment is made of the financial investments when there is an indication that an asset could be impaired, with any impairment losses being recognized as costs in the income statement.

In addition, dividends received from these companies are recorded as a decrease in the value of investments in subsidiaries.

Unrealized gains in transactions with subsidiaries, jointly controlled companies and associate companies are eliminated proportionally to the Company's interest in them, against the corresponding investment caption. Unrealized losses are similarly eliminated, but only up to the point in which the loss does not arise from a situation in which the asset transferred is impaired.

2.3 Leases

The Entity applied IFRS 16 using the simplified method (Note 3) and, consequently, the comparative information has not been restated and is presented in accordance with IAS 17. Details of the accounting policies under IAS 17 and IFRS 16 are separately presented below.

Policy applicable since January 1, 2019

The Entity assesses whether a contract is or contains a lease, at inception of the contract. The Entity recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Entity uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
The amount expected to be payable by the lessee under residual value guarantees;
The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (recognized in the statement of Profit and Loss) and by reducing the carrying amount to reflect the lease payments made. It's carrying amount is remeasured to reflect a possible reassessment, when a modification or revision of the fixed payments in substance.

The lease liability is remeasured, being the corresponding adjustment made to the related right-of-use asset, whenever:

The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Entity incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.

If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Entity expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the statement of financial position. The Entity applies IAS 36 to determine whether a right-of-use asset is impaired, when necessary.

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs.

For contracts that contain a lease component and one or more additional lease or non-lease components, the Entity allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Entity uses this practical expedient on vehicles lease contracts.

Policy applicable before January 1, 2019

Lease contracts are classified as finance leases if, through these, all the risks and benefits inherent to ownership of the corresponding assets are substantially transferred to the lessee. Other lease contracts are classified as operating leases. Leases are classified according to the substance and not the form of the contract.

Assets acquired under finance lease contracts, as well as the corresponding responsibilities, are recorded at the start of the lease for the lower value of either the fair value of the assets or the present value of the minimum lease payments. The instalments include the financial cost and amortization of the capital, with financial costs being imputed in accordance with a constant periodic interest rate on the outstanding balance of the liability.

In the case of operating leases, the lease instalments due are recognized as costs on a straight-line basis over the period of the lease contract. The incentives received are stated as a liability, with the aggregate amount thereof being recognized as a reduction in the costs with the lease, also on a straight line basis.

Leases where the Company acts as a lessee

Assets acquired under finance lease contracts, as well as the corresponding liabilities, are recognized at the lease beginning by the lower of assets fair value and the minimum lease payments present value. Finance leases payments are divided between financial charges and reduced liability, in order to obtain a constant interest rate on the outstanding liability balance. Operating lease payments are recognized as an expense on a straight-line basis over the lease period. Incentives received are recognized as a liability, the aggregate amount of which is recognized as a reduction in rental expenses, also on a linear basis.

2.4 Accrual accounting

Expenses and income are recognized in the year they relate to, in accordance with the principle of accrual accounting, irrespective of when the transactions are invoiced. Expenses and income for which the real value is not known are estimated.

Costs and revenues imputable to the current year where the expenses and income will only occur in future periods, together with the expenses and income that have already occurred, but which relate to future periods and which will be imputed to the results of each of these periods, for the value corresponding to them, are stated in the accruals and deferrals captions.

2.5 Income tax

Income tax corresponds to the sum of current tax and deferred tax. Current tax and deferred tax are entered in results, except when the deferred tax is related with items recorded directly in equity. In these cases the deferred tax is also stated in equity.

The current tax on income is calculated based on the taxable profit of the year of the various entities included in the consolidation perimeter. The taxable profit differs from the book result as it excludes diverse expenses and income that will only be deductible or taxable in subsequent years, as well as expenses and income that will never be deductible or taxable in accordance with the tax rules in force.

Deferred tax relates to temporary differences between the amounts of the assets and liabilities for the purpose of the reporting of accounts and the respective amounts for the purpose of taxation, as well as the results of tax benefits obtained and of temporary differences between the fiscal result and the book result.

Deferred tax liabilities are generally recognized for all temporary taxable differences.

Deferred tax assets are recognized for deductible temporary differences, although this recognition only occurs when there is a reasonable expectation of sufficient future taxable profits to use these deferred tax assets. On each reporting date these deferred tax assets are re-assessed and are adjusted according to the expectations regarding their future use.

Deferred tax assets and liabilities are measured using the tax rates that are expected to be in force on the date of the reversal of the corresponding temporary differences, based on the tax rates (and fiscal legislation) that are formally issued on the reporting date.

Compensation between deferred tax assets and liabilities is only permitted when: (i) the Company has a legal right to perform compensation between such assets and liabilities for the purpose of settlement; (ii) these assets and liabilities are related with taxation on income raised by the same fiscal authority and (iii) the Company has the intention to perform the compensation for the purpose of settlement.

The Company is covered by the Special Regime for Taxation of Groups of Companies (Regime Especial de Tributação de Grupos de Sociedades "RETGS"), as established in the Portuguese Corporate Income Tax Code (CIRC) and covers all the companies in which it has a direct or indirect holding of at least 75% of the respective capital (collectively referred to as the "Group") and which are, at the same time, resident in Portugal and taxed under Corporation Tax (IRC). As such, are excluded the companies whose main activity is games, namely Estoril-Sol (III) - Turismo Animação e Jogo S.A., Varzim Sol - Turismo Animação e Jogo S.A. and Estoril-Sol Digital, Online Gaming Products and Services, S.A., since there is no incidence of IRC. Additionally, the subsidiary Estoril Sol Internacional, S.A., which was incorporated in 2019, is excluded from RETGS (Note 11).

Under this regime the taxable profit of the group relating to each tax period is calculated by the controlling company (Estoril-Sol, SGPS, SA), through the algebraic sum of taxable profits and tax losses obtained in the individual periodic statements for each of the companies belonging to the group.

The following companies are part of the RETGS:

Estoril-Sol, SGPS, S.A.;
DTH Desenvolvimento Turístico e Hoteleiro, S.A.;
Estoril-Sol Imobiliária, S.A.;
Estoril-Sol (V) Investimentos Imobiliários, S.A.;
Estoril-Sol e Mar Investimentos Imobiliários, S.A.;
Estoril-Sol-Investimentos Hoteleiros, S.A..

2.6 Financial assets and liabilities

2.6.1 Other current assets

Other current assets are recognized at amortized cost, using the effective interest rate, or at its nominal value, which is understood to correspond to the amortized cost, to the extent that it is expected to be received in the short term and that it does not differ significantly from its fair value at the date of the arrangement, less any impairment losses. Impairment losses for these assets based on the respective expected credit losses. The amount of the expected loss is updated at each reporting date to reflect changes in the credit risk since the initial recognition of the respective financial instrument. The impairment loss is recognized in the statement of profit and loss of the period, in which such situation occurs.

The Entity recognizes expected lifetime impairment when there is a significant increase in its credit risk after initial recognition. However, an namely, regarding Accounts receivable from related parties, if there is no increase in the credit risk of the respective financial instrument, the Company measures the impairment loss of that instrument for an amount equivalent to the expected losses in the twelve-month period ("12 months expected credit losses").

The expected lifetime losses represent the impairment losses that result from all possible default events in the expected life of the financial instrument. In contrast, expected 12-month losses represent the portion of lifetime losses that are expected to result from default events in the financial instrument that are considered likely to occur twelve months after the financial reporting date.

Measurement and recognition of expected credit loss

The measurement of expected impairment losses reflects the estimated probability of default, the probability of loss due to that default (i.e. the magnitude of the loss if a default occurs) and the Company's actual exposure to that default.

The valuation of the probability of default and loss due to this default is based on existing historical information, adjusted for future forward information as described above.

As for the exposure to the default, for financial assets, it is represented by the gross book value of the assets at each reporting date. For financial assets, the expected impairment loss is estimated as the difference between all contractual cash flows due to the Company as agreed between the parties and the cash flows that the Company expects to receive, discounted at the original effective interest rate.

Note 25 presents in detail the definitions and policies followed by the Company in determining a significant increase in credit risk, a default event, recognition of impairment losses and write-off policy (derecognition).

2.6.2 Cash and cash equivalents

The caption of cash and cash equivalents includes cash, bank deposits, term bank deposits and other cash applications that can be immediately mobilized with insignificant risk of loss of value.

2.6.3 Other current liabilities

Other current liabilities are initially recorded at fair value and are subsequently measured at amortized cost, discounted from any interest calculated and recognized in accordance with the effective interest rate method.

Derecognition of financial assets and liabilities

The Company only derecognizes financial assets when its contractual rights to the cash flow arising from of these assets expire, or when the financial assets and all the significant risks and benefits associated to their ownership are transferred to another entity. Financial assets transferred in relation to which the Company retained some significant risks and benefits are derecognized, provided that control over them has been transformed.

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

2.7 Provisions, post-employment benefits, contingent liabilities and contingent assets

Provisions

Provisions are acknowledged by the Company when and only when there is a present obligation (legal or implied) resulting from a past event, for the resolution of which it will likely become necessary to spend internal resources, the amount of which may be reasonably estimated.

The recognised amount of the provisions consists in the present value of the best estimate on the reporting date of the resources necessary to settle the obligation. This estimate is determined taking into consideration the risks and uncertainties associated to the obligation.

Provisions are revised on the reporting date and are adjusted so as to reflect the best estimate on this date.

Post-employment benefits

With regard to the defined benefit plans, the corresponding cost is determined using the projected unit credit method, where the respective liabilities are determined based on actuarial studies carried out on each reporting date by independent actuaries.

The costs of past services is recognized in results on a linear basis during the period until the corresponding benefits are acquired. They are recognized immediately as the benefits have been totally acquired.

The liability associated to the benefits guaranteed recognized in the balance sheet represents the present value of the corresponding obligation, adjusted by actuarial gains and losses. The effects resulting from the change in assumptions are considered actuarial gains or losses and are recognized directly in reserves (other comprehensive income).

Contingent liabilities

Contingent liabilities are not recognized in the financial statements, being disclosed whenever the possibility of there being an outflow of resources including economic benefits is not remote nor probable.

Contingent assets

Contingent assets are not recognised in the financial statements, being disclosed when the existence of a future economic influx of resources is probable.

2.8 Classification of the statement of financial position

Assets realizable and liabilities payable, for which the Company does not have the unconditional right to defer payment for more than twelve months as from the date of the statement of financial position, that are expected to be realized in the normal course of operations, or are held with the intention of being traded, are classified as current assets and liabilities. All other assets and liabilities are classified as non-current.

2.9 Events after the balance sheet date

Events which occur after the of balance sheet date and which provide additional information regarding conditions that existed on the of balance sheet date (events after the balance sheet date that give rise to adjustments) are reflected in the financial statements. Events which occur after the balance sheet date which provide information on conditions that may occur after the balance sheet date (that do not give rise to adjustments) are disclosed in the financial statements, if they are considered material.

3 CHANGES IN ACCOUNTING POLICIES, JUDGMENTS, ESTIMATES AND CORRECTION OF FUNDAMENTAL ERRORS

Except for the impact of the adoption of the new standards and interpretations or their amendments that came into effect for the years beginning on January 1, 2019, during the year 2019 there were no changes in accounting policies, compared to those considered in the preparation of the financial information relating to the financial year 2018, in accordance with the provisions of IFRS, nor have material errors relating to prior periods been recognized.

Relevant estimates in the preparation of the financial statements

In the preparation of the financial statements, the Board of Directors was based on the knowledge and experience of past and/or current events and assumptions regarding future events to determine the accounting estimates.

The most significant accounting estimates, reflected in the financial statement for the year ended December 31, 2019 include:

• Analyzes of impairment of non-current assets;

• Registration of provisions.

In the years ended December 31, 2019, as a result of the level of revenues and results verified at the Casino operated in Póvoa de Varzim Game Concession (Note 11), as well as the prospective effect of the consideration to be paid to the State until the end of the concession, Varzim Sol – Tursimo, Jogo e Animação, S.A. reviewed the estimate value of the recovery of its assets, which resulted in the recognition of an impairment loss of approximately, 4,177,000 Euros (Note 11). In the year ended December 31, 2018, as mentioned in Note 11, the Entity reassessed the estimated value of the recovery of the referred assets. This evaluation did not give rise, on 31 December 2018, to any impairment loss recognition.

These estimates were determined based on the best information available at the date of preparation of the financial statements. However, given the number of qualitative factors involved, events may occur in subsequent periods that, due to their timing, were not considered in these estimates. Significant changes to these estimates that occur after the date of the financial statements are recorded in profit or loss prospectively in accordance with IAS 8.

Amendments to IFRS of mandatory application in 2019

At the date of approval of these financial statements, the following accounting standards, interpretations and amendments endorsed by the European Union are of mandatory application for the first time for the year beginning on January 1, 2019:

Standard / Interpretation	Applicable in the European Union in the years starting on or after
IFRS 16 – Leases	1-Jan-19	This standard introduces the principles of recognition and measurement of leases, replacing IAS 17 – Leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance with IFRS 16's approach to lessor accounting substantially unchanged from its predecessor, IAS 17.
Amendments to IFRS 9: Prepayment Features with Negative Compensation	1-Jan-19	This amendment allows financial assets with contractual conditions which, in case of early prepayment, require the payment of a considerable amount by the lender, to be measured at amortized cost or at fair value through other comprehensive income (depending on the business model), as long as two conditions are met: (i) on the date of the initial recognition of the asset, the fair value of the early prepayment feature is insignificant, and (ii) the possibility of negative compensation related to early prepayment is the only reason for the asset not to be considered as a financial instrument that only includes payments of principal and interest.
IFRIC 23 – Uncertainty over Income Tax Treatments	1-Jan-19	This interpretation provides guidance on the determination of taxable income, tax bases, tax losses to be reported, tax credits to be used and tax rates in scenarios of uncertainty regarding the treatment of income tax.

Improvements to international financial reporting standards (2015-2017 cycle)	1-Jan-19	These improvements encompass the clarification of some aspects related to: IFRS 3 – Business combinations: requires the remeasurement of interests previously held when an entity obtains control over a subsidiary over which it previously had joint control; IFRS 11 - Joint Arrangements: clarifies that there should be no remeasurement of interests previously held when an entity obtains joint control over a joint operation; IAS 12 - Income taxes: clarifies that all tax consequences of dividends must be recorded in the income statement, regardless of how tax arises; IAS 23 - Borrowing costs: clarifies that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalization rate on general borrowings.
Amendments to IAS 19: Change in Plan, Restriction of Settlement	1-Jan-19	Whenever a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and net interest of the period after remeasurement are determined using the assumptions used for remeasurement. In addition, amendments were included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling.
Amendments to IAS 28: Long term Interests in Associates and Joint Ventures	1-Jan-19	This amendment clarifies that IFRS 9 should be applied (including related impairment requirements) to investments in associates and joint venture when the equity method is not applied in their measurement.

IFRS 16 – Leases

In year ended on 31 December 2019, the Entity has applied IFRS 16 – Leases and its related amendments, which are effective for annual periods that begin on or after 1 January 2019.

IFRS 16 establishes a global model for the identification of lease agreements and for their treatment in the financial statements of lessors and tenants. IFRS 16 replaced the standards in force until December 31, 2018, including IAS 17 - Leases and respective Interpretations, for periods beginning on or after January 1, 2019.

The Entity opted for the modified retrospective transition model of IFRS 16, provided for in its paragraphs IFRS 16.C3 (b), C7 and C8. Consequently, the Entity did not restate the comparative financial information, recording on the transition date the liability for future income, and an asset of the same amount.

In contrast to the accounting for leases for lessees, IFRS 16 substantially maintains the principles of registering leases for lessors previously provided for in IAS 17.

Impact of the new definition of a lease

The Entity assessed the practical expedient available in the transition to IFRS 16 of not reassessing whether a contract is or contains a lease. Accordingly, the Entity carried out an overall assessment of the new definition and assessed the totality of contracts entered into or modified by it before 1 January 2019.

The change in definition of a lease mainly relates to the concept of control. IFRS 16 determines whether a contract contains a lease on the basis of whether the customer has the right to control the use of an identified asset for a period of time in exchange for consideration. This is in contrast to the focus on 'risks and rewards' in IAS 17. Control is considered to exist if the customer has, cumulatively:

The substantial right to obtain all the economic benefits from the use of a specific identified asset; and - The right to direct the use of that specific asset.

The Entity applied the definition of lease established in IFRS 16 and the respective application guides to all lease agreements entered into by it, either as lessor or as lessee, on or after January 1, 2019.

The Entity's assessment of the application of IFRS 16 revealed that the new definition of lease provided for in IFRS 16 did not significantly change the scope of contracts that comply with the definition of lease for the Entity.

Impact on Lessee Accounting

Operating leases

IFRS 16 changes how the Entity accounts for leases previously classified as operating leases under IAS 17, which were off the statement of financial position, disclosed in the respective notes as obligations assumed not included in the statement of the financial position.

Applying IFRS 16, for all leases (except as noted bellow), the Entity:

a) Recognises right-of-use assets and lease liabilities in the statement of financial position, initially measured at the present value of the future lease payments;
b) Recognises depreciation of right-of-use assets and interest on lease liabilities in profit or loss;
c) Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within financing activities) in the statement of cash flows.

Under IFRS 16, right-of- use assets are tested for impairment in accordance with IAS 36 – Impairment of assets. This treatment replaced the previous requirement to recognize a provision for onerous lease agreements.

For short-term leases (lease term of 12 months or less) and leases of low-value assets, the Entity has opted to recognize a lease expense on a straight-line basis as permitted by IFRS 16. In the year ended December 31, 2019, expenses of 16,099 Euros were recognized relating to short-term leases, under the caption of Supplies Services.

As of December 31, 2018, the Entity had assumed non-cancellable lease responsibilities of, approximately, 30,998 Euros.

The Entity's evaluation indicated that 20,133 Euros of these contracts relate to leases for which the Entity recognized on January 1, 2019, a Right-of-use asset of 19,785 Euros (Notes 3 and 12) and a corresponding lease liability of equal amount. The impact on the income statement for the year ended 31 December 2019 was a reduction in Supplies and Services in the amount of 11,404 Euros (Note 4) and an increase in depreciations by 11,184 Euros (Note 6) and financial expenses in 962 Euros (Note 9).

The Entity presented these amounts independently in the statement of financial position in the item "Rightof-use assets" (Note 12) and the respective liabilities in the item "Lease liabilities" (Note 21).

In the year ended December 31, 2019, variable income expenses related to those contracts were not recognized.

The adoption of IFRS 16 had no impact on the net cash flows of the year.

Based on the analysis of leases previously classified as financial to the Entity on January 1, 2019, and based on the facts and circumstances existing at that date, the Board of Directors considered that the impact of the adoption of this standard does not impact the amounts recognized in the Entity's financial statements.

Impact on lessor accounting

The Entity does not have relevant contractual positions as lessor, so there were no significant impacts from the adoption of IFRS 16 resulting from contracts in which it is lessor.

Other disclosures related with IFRS 16 adoption

The average incremental financing rate applied by the Entity in determining the liabilities for lease recognized in the statement of financial position on January 1, 2019 was 1.625%.

The following table represents the reconciliation between the operating lease responsibilities disclosed in accordance with IAS 17 on December 31, 2018, restated at the incremental financing rate at the date of initial application and the lease liabilities recognized in the statement of financial position at that date:

Operating lease responsibilities as of December 31, 2018	30 998
Short term leases	(4 650)
Effect of financial updating of the above amounts	(6 563)
Lease liabilities recognized on January 1, 2019	19 785

The Entity recognized, with the adoption of IFRS 16, lease liabilities and right-of-use assets in the same amount.

New IFRS or revised IFRS adopted with mandatory application in future years

The following amendments, with mandatory application in the coming years, were, as of the date of approval of these financial statements, endorsed by the European Union:

Standard / Interpretation	Applicable in the European Union in the years starting on or after
Amendments to references to the Framework in IFRS	1-Jan-20	It corresponds to amendments in several standards (IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22 e SIC 32) in relation to references to the Revised Conceptual Framework in March 2018. The revised Conceptual Framework includes revised definitions of an asset and liability and new guidance on measurement, derecognition, presentation and disclosure.
Amendment to IAS 1 and IAS 8 – Definition of material	1-Jan-20	Corresponds to amendments to clarify the definition of material in IAS 1. The definition of material in IAS 8 now refers to IAS 1. The amendment changes the definition of material in other standards to ensure consistency. The information is material if it omission, distortion or concealment is reasonably expected to influence the decisions of the primary users of the financial statements based on the financial statements.

These amendments, although endorsed by the European Union, were not adopted by the Entity in 2019, since their application is not mandatory. It is not expected that the future adoption of the referred amendments have significant impacts on the financial statements.

Other standards

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

Standard / Interpretation	Applicable in the European Union in the years starting on or after
IFRS 17 – Insurance Contracts	1-Jan-21	This standard establishes, for insurance contracts within its scope, the principles for their recognition, measurement, presentation and disclosure. This standard replaces IFRS 4 - Insurance Contracts.
Amendment to IFRS 3 - Business Definition	1-Jan-20	Corresponds to amendments to the definition of business, aiming to clarify the identification of business acquisition or acquisition of a group of assets. The revised definition also clarifies the output definition of a business as a supply of goods or services to customers. The amendments include examples to identifying a business acquisition.
Amendments to IFRS 9, IAS 39 and IFRS 7 - reform of benchmark interest rates (IBOR Reform)	1-Jan-20	Corresponds to amendments to IFRS 9, IAS 39 and IFRS 7 related to the interest rate benchmark reform project (known as "IBOR reform"), in order to reduce the potential impact of the change in reference interest reference rates on financial reporting, namely hedge accounting.

These standards and amendments have not yet been endorsed by the European Union and as such were not applied by the Entity in the year ended 31 December 2019.

For these standards and amendments, issued by the IASB but not yet endorsed by the European Union, the Board of Directors does not consider that significant impacts on the financial statements will arise related to their future adoption.

4 EXTERNAL SUPPLIES AND SERVICES

The caption "External supplies and services" in the years ended 31 December 2019 and 2018 has the following composition:

	2019	2018
Specialised work	423 090	405 550
Insurance	165 698	165 697
Rents (a)	16 099	29 156
Bank / Financial services	12 442	9 193
Representation expenses	22 874	20 050
Energy and other fluids	7 883	7 060
Fees	2 645	7 342
Legal advisory	559	475
Conservation and repairs	325	125
Communication	619	492
Travel and hotels	412	2 780
	652 644	647 919

(a) The decrease in the item "Rents" refers to the adoption of IFRS 16, in the amount of 11,404 Euros (Note 3).

5. STAFF COSTS

The caption "Personnel Costs" in the years ended 31 December 2019 and 2018 has the following composition:

	2019	2018
Remuneration of the Corporate Offices	176 253	172 583
Charges on remuneration	46 518	48 018
Post-employment benefits (Note 7)	131 000	131 000
Insurance	1 942	1 971
Cost of social whelfare	4 648	3 783
	360 360	357 355

In the years ended December 31st, 2019 and 2018, the average number of employees serving the Company amounts to 18 employees.

6. DEPRECIATION AND AMORTIZATION

The caption "Amortization and depreciation", in the year ended December 31st, 2019, has the following composition:

	2019	2018
Right-of-use assets (Note 12)	11 184	-
	11 184	-

In addition, the following expenses related to right-of-use assets were recognized in 2019:

	2019
Financial expenses with lease liabilities (Note 9)	962
Contracts < to 12 months	16 099
	17 061

7. PROVISIONS

The movement in provisions in the years ended on 31st December of 2019 and 31st December of 2018 was as follows:

	2019
	Opening			Closing
	balance	Increases	Write-off	balance
Provisions for pensions	3 066 901	352 000	(52 375)	3 366 526
Provisions for other risks and charges	1 250 357	-	-	1 250 357
Losses in subsidiaries	25 406	1 187	-	26 593
	1 275 763	1 187	-	1 276 950
	4 342 664	353 187	(52 375)	4 643 476

	2018
	Opening			Closing
	balance	Increases	Write-off	balance
Provisions for pensions	2 981 276	138 000	(52 375)	3 066 901
Provisions for other risks and charges	1 250 357	-	-	1 250 357
Losses in subsidiaries	24 219	1 187	-	25 406
	1 274 576	1 187	-	1 275 763
	4 255 851	139 187	(52 375)	4 342 664

Provisions for pensions / Post-employment benefits

By the Articles of Association approved in the General Meeting of 29 May 1998, Estoril-Sol, SGPS, S.A. confirmed, in article 36, the right to a retirement pension paid by the company to the former directors who had already retired, based on the previous article 25 of the Articles of Association that were then altered, and the same rights and benefits as those to the directors, in office at that time, who had or would come to complete ten years of service - after entering retirement - rights and benefits to be regulated in a contract to be agreed between the Company and these directors.

On December 31, 2019 and 2018, the Company obtained actuarial studies prepared by a specialized and accredited independent entity. The present value of the above-mentioned liabilities was estimated at 3,366,526 Euros and 3,066,901 Euros, respectively.

At December 31, 2019 and 2018, these studies were carried out using the "Projected credit unit" method and considered the following key assumptions and technical and actuarial bases at that date:

	2019	2018

Discount rate	0,9%	1,5%
Rate of growth of pensions	0,00% p.a.	0,00% p.a.
Mortality table
- Before retirement	n.a	n.a.
- After retirement	GKF95	GKF95
Invalidity table	n.a	n.a.
Table of departures	n.a	n.a.
Retirement age	01/jan/21	01/jan/21

In the years ended December 31, 2019 and 2018, the movement in the value of the liabilities was as follows:

	Dec - 2019	Dec - 2018

Present value of the defined benefit obligation at beggining of the year:	3.066.900	2.981.276
Benefits paid	(52.375)	(52.375)
Post-employment benefits (Note 5)	131.000	131.000
Actuarial gains and losses	221.000	7.000
Present value of the defined benefit obligation at the end of the year:	3.366.525	3.066.901

The impacts of the actuarial update verified in the year ended December 31st, 2019 result from the changes in assumptions considered, namely, the change in the discount rate used from 1.5% in 2018 to 0.9% in 2019.

At 31 December 2019, the impact of a discount rate reduction of 0,5%, used in the actuarial calculation, would correspond to an increase in the present value of liabilities by approximately 123,000 Euros.

Provisions for other risks and charges

As of December 31, 2019 and 2018, "Provisions for other risks and charges" refers essentially to the estimate to face court expenses in the context of the economic-financial rebalancing process initiated by the Company and its subsidiaries against the Portuguese State, whose estimated timing depends on the later terms of the process. Although the court expenses are being claimed, the Company recognized a provision in the amount of 1,250,357 Euros supported by the opinion of its legal advisors.

8. OTHER OPERATING EXPENSES

The caption "Other operating expenses" in the years ended 31 December of 2019 and 2018 has the following composition:

	2019	2018
Other taxes	12.141	-
Membership fees	2.500	2.500
Others	42.215	42.317
	56.855	44.817

9. FINANCIAL EXPENSES

The financial expenses recognized in the years ended on 31 December of 2019 and 2018 has the following composition:

	2019	2018
Financial expenses
Leasings	20 843	13 154
	20 843	13 154

10. INCOME TAX

The Company is subject to corporation income tax at the rate of 21% plus a Municipal Surcharge of 1.5% of taxable income, resulting in a maximum aggregate tax rate of 22.5%.

In addition, taxable income for the year ended 31 December 2019 in excess of 1,500,000 Euros is subject to a State Surcharge under the terms of article 87-A of the Corporation Income Tax Code at the following rates:

3% for taxable profit between 1,500,000 Euros and 7,500,000 Euros;
5% for taxable profit between 7,500,000 Euros and 35,000,000 Euros;
9% for taxable profit exceeding 35,000,000 Euros;

In addition, net finance costs for 2019 and following years are deductible for determining annual taxable income according with the greater of the following limits:

- 1,000,000 Euros;

30% of the profit before amortization and depreciation, net finance costs and taxes.

Pursuant to article 88º of the CIRC, the Company is also subject to autonomous taxation on a set of charges at the rates provided for in the mentioned article.

In accordance with legislation in force, the tax declarations are subject to revision and correction by the tax authorities during a period of four years (five years for the Social Security), except when there have been tax losses, tax benefits have been granted, or inspections, complaints or objections are under way, in which cases, depending on the circumstances, deadlines for filing such statements are extended or suspended. In this way, the Company's tax declarations of the years from 2016 to 2019 could still be subject to revision.

The Company is covered by the RETGS, headed by the Company (Note 2.5), being in compliance with all the requirements listed in Article 69º of the CIRC.

Income tax expense as of 31 December 2019 and 2018 has the following composition:

	2019	2018
Profit before tax	9 955 553	13 797 547
Permanent differences
Gains in subsidiaries (Note 11)	(11 057 440)	(14 861 978)
Other non-deductible expenses	262 582	284 020
	(839 305)	(14 577 958)

Result for tax purposes	(840 492)	(780 411)
Tax rate	21%	21%
	(176 503)	(163 886)

Assets not recognized (a)	176 503	163 886

Autonomous taxation	45 000	45 426
Income tax of the year	45 000	45 426

Effective tax rate	0,32%	0,33%

(a) Deferred tax assets relating to reportable tax losses were not recognized, since the Company does not expect to report subsequent taxable profits that allow the recovery of those assets.

The deduction of reportable tax losses is limited to 70% of taxable profit.

As of December 31, 2019 and 2018, the reportable tax losses amounted to 5.974,786 Euros and 6,878,656 Euros respectively, and were generated as follows:

	Limit of
Generated in :	utilization	2019	2018
2014	2026	-	1 744 362
2015	2027	1 191 504	1 191 504
2016	2028	2 446 413	2 446 413
2017	2022	715 966	715 966
2018	2023	780 411	780 411
2019	2024	840 492	-
		5 974 786	6 878 656

11. IMVESMENTS IN SUBSIDIARIES

As of December 31, 2019 and December 31, 2018, the Company holds the following financial investments accounted for under the equity method:

					2019
					%		Net	Equity		Provisions Gains/(losses)
Subsidiary	Head office	Assets	Liabilities	Income	held	Equity	profit/loss	parts	(Note 7)	on subsidiaries

Estoril Sol (III) - Turismo, Animação e Jogo, S.A. (a)	Estoril	117 821 939		27 748 215 159 356 626 100% 90 073 725				19 548 593 90 073 725		- 19 548 593
Varzim Sol - Turismo, Jogo e Animação, S.A. (a)	Póvoa de Varzim	24 405 597	21 547 529	46 918 950 100%			2 858 068 (8 304 749)	2 858 068		- (8 304 748)
Estoril Sol V - Investimentos Imobiliários, S.A.	Estoril	50	26 643		- 100%	(26 593)	(1 187)	-	(26 593)	(1 187)
DTH - Desenvolvimento Turistico e Hoteleiro, S.A.	Estoril	3 293 908	2 167 272		- 100%	1 126 636	(136 236)	1 126 636		- (136 236)
Estoril Sol Imobiliária, S.A.	Estoril	5 093 929	2 171		- 100%	5 091 758	(3 970)	5 091 758		- (3 970)
Estoril Sol - Investimentos Hoteleiros, S.A.	Estoril	9 017 166	2 460	-	90%	9 014 706	(2 540)	9 014 706		- (2 540)
Estoril Sol e Mar - Investimentos Imobiliários, S.A.	Estoril	1 387 010	280 230		- 100%	1 106 780	(23 298)	1 106 780		- (23 298)
Estoril Sol Internacional, S.A.	Estoril	45 520	14 694		- 100%	30 826	(19 174)	30 826		- (19 174)
								109 302 499	(26 593)	11 057 440


								2018
					%		Net	Equity		Provisions Gains/(losses)
Subsidiary	Head office	Assets	Liabilities	Income	held	Equity	profit/loss	parts	(Note 7)	on subsidiaries



Estoril Sol (III) - Turismo, Animação e Jogo, S.A. (a)	Estoril	118 809 215		29 839 798 161 325 839 100% 88 969 413 19 374 140 88 969 413					-	19 374 140
Varzim Sol - Turismo, Jogo e Animação, S.A. (a)	Póvoa de Varzim	28 363 976		20 801 156 47 828 265 100%			7 562 820 (4 801 115)	7 562 820	-	(4 801 115)
Estoril Sol V - Investimentos Imobiliários, S.A.	Estoril	5 0	25 456		- 100%	(25 406)	(1 187)	-	(25 406)	(1 187)
DTH - Desenvolvimento Turistico e Hoteleiro, S.A.	Estoril	3 287 740	2 024 868		100%	1 262 872	(131 151)	1 262 872	-	(131 151)
Estoril Sol Imobiliária, S.A.	Estoril	5 096 835	1 107	456 719 100%		5 095 728	446 307	5 095 728	-	446 307
Estoril Sol - Investimentos Hoteleiros, S.A.	Estoril	9 019 706	2 460	-	90%	9 017 246	(2 540)	9 017 246	-	(2 540)
Estoril Sol e Mar - Investimentos Imobiliários, S.A.	Estoril	1 387 010	256 932		- 100%	1 130 078	(23 663)	1 130 078 113 038 157	- (25 406)	(23 663) 14 860 791

(a) The equity of these subsidiaries for the purposes of applying the equity method in the years ended 31 December 2019 and 2018 is adjusted by the effect of the reclassification of the tax deductions to the investment, which are not classified in equity in accordance with IFRS. Additionally, the equity and net results of these subsidiaries are adjusted for the effect of IFRS 16 - Leases in accordance with IFRS (Note 3).

In the year ended on December 31, 2019, the subsidiary Varzim-Sol, which operates the Póvoa de Varzim gambling zone, due to verified signs of impairment, as a result of the level of revenues and results verified in the Casino operated in the Gambling Zone of Póvoa de Varzim and the impacts verified by the implementation of mechanisms to identify players as a result of the application of the Anti-Money Laundering Law (Law No. 83/2017, of 18 August), as well as the expected effect of the consideration payment to the State until the end of the Concession for the referred gambling zone, prepared an impairment analysis on the assets allocated to the Póvoa de Varzim gambling zone.

For this purpose, based on the characteristics and nature of the activity developed, the discounted cash flow method was used, based on the financial cash flow projections until the end of the concession period. As a result of the impairment analysis, an impairment loss of 4,177,014 Euros was determined in the year ended on December 31, 2019. On December 31, 2018, as referred to in Note 3, the Company carried out an assessment of the estimated amount recovery of assets related to the concession of the Póvoa de Varzim Game Zone. The same assessment did not originate, on December 31, 2018, any impairment loss. The projections, on December 31, 2019 and 2018 were discounted with a WACC rate of 7.1%.

The revenue growth rates used were 2.4% in 2020, 2% in 2021 and 1% in 2022 and 2023.

The subsidiary participated with other concessionaires, in a common administrative action against the Portuguese State to restore the economic and financial balance of the concession contracts, alleging, among other grounds, that the method of the determination of the consideration did not take into account significant fluctuations in revenue, which occurred in past years due to changes in consumption. This process was still without evolution at the date of approval of these financial statements, being the payment of the consideration considered in the impairment analysis until the end of the concession of the subsidiary.

The Board of Directors estimates that a positive or negative variation of 0.5% in the discount rate would result in a change of, approximately, 110,000 Euros in the recognized impairment loss. The impairment loss is sensitive, among others, to the level of gambling revenues that will occur until the end of the concession, namely in relation to the eventual effects of that may affect the subsidiary revenues and the eventual modification of the application of the consideration payable to the state.

The changes in "Investments in subsidiaries" were as follows:

	2019	2018
Opening balance	113 038 157	110 904 668
Acquisition / Incorporation of new subsidiaries (a)	50 000	-
Gains / Losses imputed from subsidiaries	11 058 627	14 861 978
Acquisitions / Capital increases / Reimbursements (b)	3 600 000	6 600 000
Dividends Distribution (c)	(18 444 285)	(19 328 489)
Closing balance	109 302 499	113 038 157

(a) During the year ended on December 31, 2019, Estoril Sol, SGPS, SA, constituted a new company, Estoril Sol Internacional, S.A., held in 100%, whose area of activity will be the management of projects / operations in international markets, still under study and analysis as of the date of these consolidated financial statements.

(b) During the years 2019 and 2018, the Company made capital increases in its subsidiaries, as follows:

		2019	2018

Capital increase made in Varzim-Sol		3 600 000	6 600 000
	Total	3 600 000	6 600 000

(c) In the years ended on 31 December 2019 and 2018, Estoril-Sol (III) distributed to the Company dividends amounting to 18,444,285 Euros and 19,328,490 Euros, respectively. The amount of dividends distributed in 2019 was fully settled, of which 10,201,764 Euros by accounts settlement (Note 15).

12. RIGHT-OF-USE ASSETS

During the year ended December 31, 2019, the movement in "Right-of-use-assets", as well as in the respective accumulated depreciation and impairment losses, were as follows:

2019
	Transport Equipment

Gross amount:
IFRS 16 adoption on 1 January 2019 (Note 3)	19.785
New contracts	49.275
Closing balance	69.060
Depreciation and
accumulated impairment losses:
IFRS 16 adoption on 1 January 2019 (Note 3)	-
Depreciation of the year (Note 6)	11.184
Closing balance	11.184
Net amount	57.876

The item "Transport equipment" refers to car leases contracts used by the Company's employees, for periods between 2 to 4 years. These contracts do not foresee the existence of relevant extension or termination clauses or residual value guarantees.

13. OTHER NON-CURRENT ASSETS

At 31 December 2019 and 2018, the caption "Other non-current assets" was composed as follows:

	2019	2018
State and other public entities	984	984
	984	984

14. OTHER CURRENT ASSETS

At 31 December 2019 and 2018, the caption "Other current assets" had the following composition:

	2019			2018
	Gross value	Impairments	Net value	Gross value	Impairments	Net value
Receivables from related parties (Note 15)	2 634 276	(19 521)	2 614 755	2 461 413	(19 521)	2 441 892
Advance payments	5 062	-	5 062	3 280	-	3 280
	2 639 338	(19 521)	2 619 817	2 464 693	(19 521)	2 445 172

15. RELATED PARTIES

As of December 31, 2019 and 2018 the Company had the following balances with related parties:

	2019		2018
	Other	Other	Other	Other
	current	current	current	current
	assets	liabilities	assets	liabilities
Related party	(Note 13)	(Note 21)	(Note 13)	(Note 21)
Holding company - Finansol - Sociedade de Controlo, SGPS, S.A. Subsidiaries - Estoril Sol (III) - Turismo, Animação e Jogo, S.A. - DTH - Desenvolvimento Turistico e Hoteleiro, S.A. - Estoril Sol Imobiliária, S.A. - Estoril Sol - Investimentos Hoteleiros, S.A. - Estoril Sol V - Investimentos Imobiliários, S.A. - Estoril Sol e Mar - Investimentos Imobiliários, S.A.	171.062 - 2.153.842 - - 25.536 275.036	- 239.340 - 3.178.308 9.017.165 - -	169.485 - 2.015.842 - - 24.349 251.737	- 6.462.559 - 3.182.276 9.019.706 - -
- Estoril Sol Internacional, S.A.	8.800	-	-	-
Impairment losses: - Estoril Sol V - Investimentos Imobiliários, S.A.	(19.521)	-	(19.521)	-
	2.614.755	12.434.813	2.441.892	18.664.541

In the years ended on 31 December 2019 and 2018 there were no transactions between related parties.

As at 31 December 2019 and 2018, the caption "Other current liabilities" relates to financing granted by its subsidiaries, which are classified in current liabilities as the unconditional right to defer payment over more than twelve months is not contractually defined.

Reconciliation of liabilities resulting from financing activities:

The changes in the Company's liabilities resulting from financing activities, both cash and non-cash are presented bellow. Liabilities resulting from financing activities are those whose cash flows have been, or will be, classified as financing in the statement of cash flows:

Reconciliation of liabilities arising from financing activities
	Balance at 31 Dez-2018 (Note 22)	Financing cash flows	New lease liabilities (Note 11)	Others (i)	Balance at 31 de Dez-2019 (Note 22)
Other current liabilities from Related Parties Lease Liabilities	18 664 541 - 18 664 541	3 972 036 (11 404) 3 960 632	- 49 275 49 275	(10 201 764) 962 (10 200 802)	12 434 813 58 618 12 493 431

Reconciliation of liabilities arising from financing activities
	Balance at 31 Dez-2017 (Note 22)	Financing cash flows	Others (i)	Balance at 31 de Dez-2018 (Note 22)
Other current liabilities from Related Parties	25 553 715 25 553 715	6 288 282 6 288 282	(13 177 456) (13 177 456)	18 664 541 18 664 541

16. CURRENT TAX ASSETS AND LIABILITIES

As of 31 December 2019 and 2018, the captions "Current tax assets" and "Current tax liabilities" in the statement of financial position are made up as follows:

	2019	2018
Current assets:
Special Payment on Account (IRC)	22 200	34 200
	22 200	34 200
Current Liabilities:
Estimated corporate Income Tax (Note 10)	45 000	45 426
	45 000	45 426

17. CASH AND CASH EQUIVALENTS

On December 31, 2019 and 2018, "Cash and cash equivalents" includes cash, immediately available bank deposits (less than or equal to three months) net of bank overdrafts and other negotiable securities quoted on the secondary market, and has the following composition:

	2019	2018
Cash	2 200	2 200
Immediately avaiable bank deposits	2 495 905	165 331
Cash and cash equivalents	2 498 105	167 531

In the years ended December 31, 2019, the Company recorded the following non-monetary investment and financing transactions in the cash flow statement:

• The Company acquired assets through lease contracts, as disclosed in Notes 12 and 15, in the amount of approximately, 49,275 Euros.

18. CAPITAL

On December 31st, 2019 and 2018, Estoril-Sol, SGPS., S.A., an issuer of securities ("shares") admitted to trading on a regulated market, has a share capital of 59,968,420 Euros (fifty nine million, nine hundred and sixty eight thousand, four hundred and twenty euros), represented by 11,993,684 registered shares (ISIN Code PTESO0AM0000), with a unit par value of five Euros each.

Treasury shares

The treasury shares were acquired by the Company as follows:

Year of Acquisition	No.of shares	Nominal value	Total nominal	Total premiums	Total

2001	34.900	5	174.500	280.945	455.445
2002	43	5	215	184	399
2007	22	5	110	88	198
2008	27.600	5	138.000	114.264	252.264
Total	62.565		312.825	395.481	708.306

As a result of the treasury shares acquired, a reserve of 708,306 Euros was made unavailable, which was included under "Other reserves and retained earnings" (Note 19).

Legal persons with a stake of over 20% in the share capital on 31 December of 2019 and 2018:

Finansol, Sociedade de Controlo, SGPS, S.A., with 57.79% (a);
Amorim Entertainment e Gaming International, SGPS, S.A., with 32.67%;

(a) This entity is controlled by the Macau Tourism and Entertainment Society (STDM, headquartered in Macau).

Share issue premiums

The amount recorded under this caption results from the obtained gains on capital increases, which occurred in previous years. According to the legislation in force, the use of the amount included in this item follows the regime applicable to the legal reserve, that is, it shall not be distributed to shareholders, but may be used to absorb losses after all other reserves have been exhausted or incorporated in the capital. On 31 December of 2019 and 2018 the amount recorded at "Share issue premiums" amounted to 960,009 Euros.

19. RESERVES

Legal reserve

In accordance with current legislation the Company must transfer at least 5% of its annual net profit to a legal reserve until the reserve reaches at least 20% of share capital. The reserve cannot be distributed, except upon liquidation of the company, but may be used to absorb losses after all the other reserves have been used up or to increase capital.

Other reserves and retained earnings

This caption relates to income generated in prior years not attributed to Company shareholders and includes reserves made unavailable as a result of the acquisition of treasury shares amounting to 708,306 Euros. This caption also includes the accumulated impacts of the actuarial update of post-employment benefits (Note 7).

Other variations in equity

As at December 31, 2019 and 2018, the caption "Other variations in equity" refers essentially to unallocated results of subsidiaries, which are appropriated as a result of applying the equity method.

20. APPLICATION OF RESULTS AND DIVIDENDS

In accordance with the resolutions adopted at the General Shareholders' Meeting held on May 29, 2019 and May 26, 2018, the results for the years ended December 31, 2018 and 2017 were applied as follows:

	2019	2018

Legal reserve	687 606	533 750
Other reserves and retained earnings	7 369 730	4 078 519
Other variations in equity	694 785	1 472 739
Dividends (a)	5 000 000	4 590 000
	13 752 121	10 675 008

(a) Of the amount of dividends approved, corresponding to a dividend per share of 0.42 Euros and 0.38 Euros, respectively, 4,989,101 Euros and 4,584,241 Euros were already settled in the years ended 31 December 2019 and 2018.

21. LEASE LIABILITIES

Disclosure required by IFRS 16

As of December 31, 2019, the maturity of amortizations for lease contracts expires as follows:

	2019
2020	20 813
	20 813
2021	21 775
2022 and following	16 030
	37 805 58 618

Disclosure required by IAS 17

The Company is the lessee in operational lease contracts related with motor vehicles, which are denominated in Euros.

As of December 31, 2018 the following future liabilities for the Company resulted from vehicles' operating leases, for which, in the year ended on that date, the minimum lease payments amounted to Euro 30,998 Euros .

	2018
Up to 1 year Between 1 year and 5 years	17 652 13 346
	30 998

22. OTHER CURRENT LIABILITIES

As of 31 December 2019 and 2018, this caption had the following composition:

	2019	2018
Suppliers	21 747	38 834
State and other public entities (a)	12 606	9 632
Other creditors:
Charges with holidays to be paid	32 854	28 026
Specialised work - Fees	87 366	92 273
Others	61 722	50 923
Accounts payable to related parties (Note 15)	12 434 813	18 664 541
	12 651 109	18 884 229

(a) On 31 December 2019 and 2018 this caption is composed as follows:

	2019	2018

Social Security contributions	4 736	5 143
Other taxes	7 870	4 489
	12 606	9 632

23. CONTINGENT LIABILITIES AND ASSETS, GUARANTEES AND COMMITMENTS

On 31st December of 2019 and 2018 the Company had presented the following guarantees:

	2019	2018

For tax demands in hand / litigation	8.000	39.970
	8.000	39.970

24. REMUNERATION OF KEY MEMBERS OF THE COMPANY

The remunerations of Company's management key members in the years ended 31 December 2019 and 2018 fully relate to fixed remunerations, in the amount of, 105,000 Euros in each of these years (Note 5).

25. FINANCIAL INSTRUMENTS

At 31 December 2019 and 2018 the main assets and liabilities financial instruments, recorded at amortized cost, were as follows:

	2019	2018
Financial assets:
Receivables	2 614 755	2 441 892
Cash and cash equivalents	2 498 105	167 531
	5 112 860	2 609 423
Financial liabilities:
Lease liabilities	58 618	-
Payables	12 709 727	18 884 229
	12 768 345	18 884 229

In what concerns to current accounts receivable and account payable and cash and cash equivalents, the Company considers, in the light of specific characteristics of these financial instruments, that the fair value does not differ significantly from their book value, therefore it is not necessary, under the terms of IFRS 13 to present its fair value by measurement levels.

In the normal course of its activity the Company is exposed to a variety of financial risks that can change its asset value. Financial risk is understood to be the probability of obtaining results other than those expected, whether these be positive or negative, materially and unexpectedly changing the asset value of the Company.

In order to minimize the potential impact of these risks, the Company adopts a strict and consistent financial policy based on two vitally important instruments:

• approval of the annual budget and the respective analysis of deviations on a monthly basis, and;

• the elaboration of financial and cash-flow planning, which is also analysed on a monthly basis.

The financial risks which can possibly impact on the activities undertaken by the Company are those presented below:

Liquidity risk:

The management of the liquidity risk is based on maintaining an adequate level of available cash and on the contracting of credit limits that help not only to ensure the normal development of the Company's activities but also to cater for any operations of an extraordinary nature.

According to the monetary resources freed up by the subsidiary companies over which the Company has control, we feel the financial risk to which the Company is exposed is minimal, and the same understanding has prevailed in the examination carried out by financial institutions, as shown by the fact that asset guarantees are dispensed with for operations under contract.

Credit risk

Credit risk is mainly related to the accounts receivable resulting from the operations with related parties. This risk is monitored on a regular basis by each of the Company's businesses with the objective of:

• monitor the evolution of the level of credit granted;

• to analyze the financial capability of related parties on a regular basis.

The Company's financial assets relate primarily to short-term related party accounts receivable for which it adopts the expected 12-month loss model.

(i) Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Company compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument at the date of initial recognition.

In making this assessment, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.

Forward-looking information considered includes the future prospects of the industries in which the Company's debtors operate, obtained from internal and external sources, when available, of actual and forecasted economic information related to the Company's operations.

In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:

• existing or forecast adverse changes in business, financial or economic conditions that are expected to cause a significant decrease in the debtor's ability to meet its debt obligations;

• significant deterioration in the operating results of the debtor;

• an actual or expected significant adverse change in the regulatory, economic, or technological environment of the debtor that results in a significant decrease in the debtor's ability to meet its debt obligations.

Despite the above mentioned, the Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if the financial instrument is determined to have low credit risk at the reporting date.

A financial instrument is determined to have low credit risk if:

(1) The financial instrument has a low risk of default,

(2) The debtor has a strong capacity to meet its contractual cash flow obligations in the near term, and

(3) Adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

(ii) Definition of default

The Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:

when there is recurring a breach of payment terms by the debtor; or
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Company, in full (without taking into account any collateral held by the Company).

(iii) Write-off policy

The Company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, namely with the publication of the foreclosure of the debtor.

Financial assets written off may still be subject to enforcement activities under the Company's recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognized in profit or loss.

Interest rate risk

The Company's exposure to interest rate risk arises from the existence, in the balance sheet of its subsidiaries, of financial assets and liabilities, contracted at a variable rate. The change in market rates has a direct impact on the amount of interest paid, causing consequent cash variations.

If the market interest rates had been 1% higher during the years ended on 31st December 2019 and 2018, the results from its subsidiaries of those years would have decreased by approximately 37,000 Euros and 59,000 Euros, respectively.

26. STATUTORY AUDITOR'S FEES

The statutory auditor's fees in 2019 and 2018 amounted to 123,000 Euros, plus VAT at the current rate, and are exclusively related to legal review and auditing of the Company's Separate and Consolidated financial statements. Additionally, on December 31, 2019, other services were provided by entities of the Statutory Auditor network, in the amount of 15.000 Euros.

27. EVENTS AFTER THE BALANCE SHEET DATE

The sports betting license granted to Estoril Sol Digital will expire in August 2020. The shareholder and management structure of Estoril-Sol Digital intends to renew it for a period identical to the initial one, three years, similarly to what occurred with the license of casino online gaming, renewed during the year 2019. The preparatory work for the sports betting license renewal already started not being foresee any obstacles to its timely conclusion.

The approval of the State Budget for 2020 included measures aimed to change the online gambling taxation. In this context, tax rates will no longer be fixed in an increasing range, which varies accordingly to the revenues / bets placed volume, maintaining the remaining determination principles, that is, the tax basis will remain unchanged, gross revenue in casino games and the amount of placed bets for sports betting. For online casino games the tax rate will be fixed at 25% and for sports betting the tax rate will be fixed at 8%.

It should be noted that, on the date of approval of these financial statements, the World Health Organization declared, on March 11, 2020, the existence of a Pandemic related with the Coronavirus 2019 (Covid-19) disease. As a result, the Portuguese Government has been establishing a set of exceptional and temporary measures related to the epidemiological situation of Covid-19, from which resulted the imposition of restrictions to the economic activity of the country.

Following the events mentioned above, on March 13, 2020, the Company's subsidiaries that operate physical casinos in Portugal submitted to Instituto do Turismo de Portugal IP, the request for the temporary closure of the physical casinos operated by the Group for a minimum period of 14 days starting with the closure of March 13, gambling day, believing that the conditions foreseen in accordance with the article 31 of the Portuguese Gaming Law were gathered. The authorities together with the concessionaire should reassess this period after its end. The Secretary of State for Tourism authorized the respective request on the same date, without prejudice of the extension of the referred period if the situation requires.

The temporary closure of the casinos was determined, after the mentioned closure required by the referred subsidiaries, under the imposition of Decree 2-A / 2020, which was extended by the imposition of Decrees 2-B / 2020 and 2-C / 2020, remaining active, on this date, the online operations. As a result, as the end date of the closure measure is not yet known, the extent of the impact on the Company's future financial position will depend on the evolution of the referred Pandemic, or the measures that may be adopted and on the global evolution of the economy during this period.

In this context, the subsidiaries Estoril-Sol (III) and Varzim-Sol decided to resort, with effect from 10th April 2020, to the "Simplified Lay-off" measure provided by Decree-Law no. 10-G / 2020, of March 26th , resulting in the temporary suspension of work contracts or in the reduction of employees working hours of the referred entities. Additionally, the existing "Contingency Plans" were activated, in order to preserve the health of employees, providers of external services and safeguard assets allocated to the operations. A series of measures were also adopted to adapt the cost structure to the current situation, namely related to surveillance, reception and F&B areas, maintenance and cleaning, fees and commissions directly related to the gambling activity.

In this way, the duration of the referred closure, as well as any additional measures that might be taken by the Portuguese authorities regarding the containment of Covid-19 and those relating to the temporary closure of physical casinos under the respective concession contracts, will be decisive for the future realization value of the assets of the Company's subsidiaries, being however, the future impacts for the Company arising from this situation uncertain. Despite, according to the information available on this date, the Board of Directors, which is currently evaluating the measures taken to mitigate the referred impact, based on the financial capacity of the Group, which presents "Cash and its equivalents", as of 31 December 2019 of approximately, 83 Million Euros, considers that the going concern assumption, used in the preparation of the Group's financial statements as of December 31st, 2019, remains appropriate on the present date.

28. NOTE ADDED FOR TRANSLATION

The accompanying financial statements are a translation of financial statements originally issued in Portuguese, in accordance with IFRS. In the event of discrepancies, the Portuguese version prevails.

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CONSOLIDATED FINANCIAL STATEMENTS

AND NOTES

144

CONSOLIDATED STATEMENTS OF THE FINANCIAL POSITION ON DECEMBER 31st, 2019 AND 2018

(Amounts stated in Euros)

NON-CURRENT ASSETS: Tangible fixed assets Reversible to the State 1 4 20 015 855 29 738 634 Not reversible to the State 1 4 51 723 342 53 741 203 Tax deductions on investments 1 5 (8 219 396) (12 185 193) Total non-current assets 63 519 800 71 294 644 Intangible assets 1 6 13 495 810 28 061 255 Right-of-use assets 1 7 821 183 - Investment properties 1 8 182 141 187 694 Other non current assets 67 905 46 906 78 086 839 99 590 499 CURRENT ASSETS: Inventories 2 0 6 921 651 6 936 186 Clients and other accounts receivables 2 1 399 399 507 684 Current tax assets 1 9 22 200 34 200 Other current assets 2 2 2 073 950 3 362 737 Cash and cash equivalents 2 3 83 046 171 53 470 364 Total current assets 92 463 371 64 311 172 Total assets 170 550 210 163 901 670 EQUITY AND LIABILITIES EQUITY: Capital 2 4 59 968 420 59 968 420 Treasury shares 2 4 (708 306) (708 306) Share issue premiuns 2 4 960 009 960 009 Legal Reserve 2 4 8 375 784 7 688 178 Other reserves and retained earnings 2 4 18 596 818 10 753 303 Net profit of the year 9 910 553 13 752 121 Equity attributable to the holders of the parent company 97 103 278 92 413 725 Non-controlling interests 2 5 6 478 063 3 513 973 Total equity 103 581 341 95 927 698 LIABILITIES: NON-CURRENT LIABITIES: Lease liabilities 2 6 438 030 - Other non-current liabilities 2 8 1 244 808 2 489 616 Provisions 2 7 9 906 608 9 023 428 Total non-current liabilities 11 589 446 11 513 044 CURRENT LIABILITIES: Lease liabilities 2 6 392 077 - Current tax liabilities 1 9 114 814 114 645 Other current liabilities 2 8 54 872 533 56 346 283 Total current liabilities 55 379 424 56 460 928 Total liabilities 66 968 869 67 973 972 Total equity and liabilities 170 550 210 163 901 670	ASSETS	Notes	Dec - 19	Dec - 18

The accompanying notes form an integral part of the consolidated statement of financial position as of 31 December 2019.

CONSOLIDATED PROFIT AND LOSS STATEMENT

OF THE YEARS ENDED ON 31st DECEMBER 2019 AND 2018

(Amounts stated in Euros)
		1st December 3
	Notes	2019	2018
REVENUES:
Gaming revenues	6	231 135 593	225 701 612
Gaming taxes	6	(120 115 643)	(118 740 151)
		111 019 950	106 961 461
Other operating revenue	6	9 301 169	10 446 255
	5	120 321 119	117 407 716
OPERATING EXPENSES:
Cost of sales	7	(3 015 813)	(3 054 613)
Supplies and services	8	(40 580 376)	(37 751 448)
Personnel costs	9	(35 065 219)	(35 848 630)
Amortization and depreciation	1 0	(19 269 908)	(19 401 543)
Impairment of depreciable / amortizable assets ( (expenses) / reversals )	1 6	(4 177 014)	-
Impairments of accounts receivable ( (expenses) / reversals )	2 1	19 855	(32 849)
Provisons ( (expenses) / reversals )	2 7	(583 554)	(1 739 132)
Other operating expenses	1 1	(2 774 747)	(2 787 369)
Total operating expenses		(105 446 777)	(100 615 584)
Income before financial results and taxes		14 874 342	16 792 132
NET FINANCIAL ITEMS:
Financial expense	1 2	(318 803)	(661 093)
Financial income	1 2	54 435	51 029
		(264 368)	(610 064)
Profit before taxes		14 609 975	16 182 068
Income tax	1 3	(114 814)	(114 645)
Net profit of the year		14 495 161	16 067 423

Attributable to: Equity holders of the parent company		9 910 553	13 752 121
Non-controlling interests	2 5	4 584 608	2 315 302
		14 495 161	16 067 423
Result per share
Basic and diluted	3 2	0,83	1,15

The accompanying notes form an integral part of the consolidated profit and loss statement of the year ended

as of 31 December 2019.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED ON 31st DECEMBER 2019 AND 2018

(Amounts in Euros)

	Notes	2019	2018
Net profit of the year	5	14 495 161	16 067 423
Other comprehensive income: Items that will not be reclassified subsequently to profit or loss
- Remensurement of post-employment benefits	2 7	(221 000)	(7 000)
Comprehensive income of the year		14 274 161	16 060 423
Attributable to:
Equity holders of the parent company		9 689 553	13 745 121
Non-controlling interests		4 584 608	2 315 302
		14 274 161	16 060 423
The accompanying notes form an integral part of the consolidated statement of comprehensive income for the year ended as of 31 December 2019.
THE ACCOUNTANT			THE BOARD OF DIRECTORS


















147

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEARS ENDED 31st DECEMBER 2019 AND 2018

(Amounts stated in Euros)

	Notes	Share Capital (Note 24)	Treasury Shares (Note 24)	Issue Premiums (Note 24)	Legal Reserve (Note 24)	Other Reserves and Retained Earnings (Note 24)	Net profit of the year	Total	Non controlling interests (Note 25)	Total Equity
Balance at 1st January 2018		59 968 420	(708 306)	960 009	7 154 428	5 209 045	10 675 008	83 258 604 3 268 850		86 527 454
Application of the consolidated net profit of the year ended 31st December 2017	2 4	-	-	-	533 750	5 551 258	(10 675 008)	(4 590 000)	-	(4 590 000)
Dividends paid to Non-controlling interests	2 5	-	-	-	-	-	-		- (2 070 179)	(2 070 179)
Comprehensive Consolidated Income of the year ended 31st December 2018		-	-	-	-	(7 000)	13 752 121	13 745 121	2 315 302	16 060 423
Balance at 31st December 2018		59 968 420	(708 306)	960 009	7 688 178	10 753 303	13 752 121	92 413 725 3 513 973		95 927 698
Balance at 1st January 2019		59 968 420	(708 306)	960 009	7 688 178	10 753 303	13 752 121		92 413 725 3 513 973	95 927 698
Application of the consolidated net profit of the year ended 31st December 2018	2 4	-	-	-	687 606	8 064 515	(13 752 121)	(5 000 000)	-	(5 000 000)
Dividends paid to Non-controlling interests	2 5	-	-	-	-	-	-		- (1 620 517)	(1 620 517)
Comprehensive Consolidated Income of the year ended 31st December 2019		-	-	-	-	(221 000)	9 910 553	9 689 553	4 584 608	14 274 161
Balance at 31st December 2019		59 968 420	(708 306)	960 009	8 375 784	18 596 818	9 910 553	97 103 278 6 478 063		103 581 341

The accompanying notes form an integral part of the consolidated statement of changes in equity for the year ended as of 31 December 2019.

CONSOLIDATED CASH FLOW STATEMENTS

FOR YEARS ENDED 31st DECEMBER 2019 AND 2018

(Amounts in Euros)

		31st December
	Notes	2019	2018

OPERATING ACTIVITIES:
Receipts from clients		237 603 611	231 873 262
Payments to suppliers		(48 011 872)	(39 757 630)
Payments to staff		(32 785 916)	(32 609 449)
Cash flow generated by operations		156 805 824	159 506 183
Payment of income tax		(101 936)	(122 137)
Payment of Special Gaming tax		(115 952 775)	(107 506 655)
Other payments relating to the operating activity		(2 340 241)	(6 675 694)
Cash flow from operating activities (1)		38 410 872	45 201 697
INVESTING ACTIVITIES:
Receipts from:
Interest and similar income		54 435	40 908
		54 435	40 908
Payments in respect of:
Tangible fixed assets		(2 028 526)	(3 721 515)
Intangible assets		(12 000)	-
		(2 040 526)	(3 721 515)
Cash flow from investment activities (2)		(1 986 090)	(3 680 607)

FINANCING ACTIVITIES:
Receipts from:
Bank loans obtained	2 6	31 894 501	322 423 235
		31 894 501	322 423 235
Payments in respect of:
Bank loans repaid	2 6	(31 894 501)	(328 277 335)
Amortization of lease liabilities		(329 176)	-
Interest and similar costs	2 6	(239 356)	(541 047)
Dividends	24/25	(6 609 618)	(6 654 420)
		(39 072 651)	(335 472 802)
Cash flow from financing activities (3)		(7 178 150)	(13 049 567)

Variation in cash and cash equivalents (4)=(1)+(2)+(3)		29 575 807	28 471 523
Cash and cash equivalents at the start of the period	2 3	53 470 364	24 998 841
Cash and cash equivalents at the end of the period	2 3	83 046 171	53 470 364

The accompanying notes form na integral part of the consolidated cash flow statements for the year ended as of 31 December 2019.

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1. INTRODUCTION

Estoril-Sol, SGPS., S.A., ("Company") is the holding of Estoril-Sol Group ("Group" or "Estoril-Sol Group") a public limited-liability company was constituted on 25 June which develops gaming, F&B, entertainment and real estate activities and has its registered office in Av. Dr. Stanley Ho, Casino Estoril building. The company has its shares listed on a regulated market - the Euronext.

In the context of the concession contracts referred above, tangible fixed assets reversible to the state (Note 14) that will be delivered to the State at the end of the concession are recognized in the financial statements. These assets correspond essentially to gambling equipment and assets assigned to the buildings of the Póvoa de Varzim and Estoril Casinos. The building related to Casino de Lisboa will continue to be owned by the Group after the end of the concession and as such is not considered as reversible. Reversible assets are deducted of investment tax deductions (Note 15), which correspond to the portion subsidized by the State for the investment made by the Group engaged in the gambling activity (Note 2).

In addition, the Group also operates in the real estate sector, currently holding a number of properties in the portfolio (Note 20).

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"), as adopted by the European Union, and interpretations of the International Financial Reporting Interpretation Committee ( "IFRIC"), for approval and publication in accordance with the legislation in force.

These consolidated financial statements were approved by the Board of Directors on April 27, 2020 and are subject to the approval of the Company's shareholders at a General Meeting of Shareholders to be held.

2. MAIN ACCOUNTING POLICIES

2.1. Bases of presentation

The attached financial statements were prepared on a going concern basis, based on the books and accounting records of the companies included in the consolidation (Note 4), considering the standards of IFRS as adopted by the European Union.

The Board of Directors evaluated the Group's ability to operate on a continuous basis, based on all relevant information, facts and circumstances of a financial, commercial and other nature, including events subsequent to the consolidated financial statement reference date available on the future (Note 31). As a result of the evaluation made, the Board of Directors concluded that the Group has adequate resources to maintain its activities and fully comply with its obligations, with no intention to terminate them in the short term, and considered it appropriate to use the going concern assumption in the preparation of the consolidated financial statements. Furthermore, the concession agreements of the Estoril and Póvoa de Varzim Game Zones, held by its subsidiaries, authorize the exploration of the Casino de Lisbon, Casino do Estoril and Casino da Póvoa, accordingly with the respective concession and its applicable legal framework until 31 December 2020 and 2023, respectively.

Considering the expected results obtained from the gambling activity exploitation in the concession areas, and the possible renewal of the referred concessions, as well as the respective assets' value of use for a concessionaire of the exclusive gaming exploitation, no losses are expected on those assets that are not registered on December 31, 2019. Therefore, the Board of Directors believes that, regardless of the outcome of a new tender for the new concessions of the Estoril and Póvoa Game Zones, under the terms that may be determined by the State, for the period beginning on January 1, 2021 and January 1, 2024, respectively, the use of the going concern assumption is appropriate, not being expected unrecognized responsibilities related with that result in the financial statements as of December 31, 2019, which will be decisive for the future realization value of assets of the Group (Note 1).

2.2. Principles of consolidation

The consolidation methods adopted by the Group are the following:

a) Controlled companies

Investments in controlled companies, defined as companies in which the Group (i) directly or indirectly holds more than 50% of the voting rights at Shareholders' General Meetings, or has the power to control their financial and operating policies (control definition adopted by the Group); (ii) is exposed to or has variable return on its involvement in the operations of the subsidiary; or (iii) has the ability to use its voting rights to affect its return, were included in the consolidated financial statements by the full consolidation method. Equity and net profit or loss of these companies corresponding to third party participation in them, if applicable, are reflected separately in the consolidated statements of financial position and consolidated statements of profit and loss in the caption "Non-controlling interests". The companies included in the consolidation are listed in Note 4.

Assets, liabilities and contingent liabilities of controlled companies are recorded at fair value as of the acquisition date. Any excess of cost over the fair value of the net assets acquired is recognized as goodwill. If the difference between cost and the fair value of the net assets acquired is negative, it is recognized in results for the year. Non-controlling interests are recognized in proportion to the fair value of the identified assets and liabilities.

Whenever necessary, adjustments are made to the financial statements of subsidiaries to adapt their accounting policies to those used by the Group in the preparation of the consolidated financial statements (IFRS).

b) Associate companies

An associate company is an entity in which the Group exercises significant influence, but does not have control or joint control, through participation in the decisions relating to its financial and operational policies.

Financial investments in associate companies (Note 4) are recorded using the equity method, except when they are classified as held for sale, with the participations being initially stated at acquisition cost, to which the difference between this cost and the value proportional to the participation in the equity of these companies is added or subtracted.

In accordance with the equity method, shareholdings are adjusted periodically by the value corresponding to the participation in the net results of the associate companies, by other variations in their equity, as well as by the recognition of impairment losses.

Furthermore, dividends received from these companies are stated as a reduction in the value of the financial investments.

The Group suspends the application of the equity method when the investment in the associate company is reduced to zero and a liability is only recognised if there are legal or constructive obligations before associate companies or their creditors. If the associate company subsequently produces profits, the equity method is resumed after its part in the profits is equal to the part of the unrecognised losses.

Each year an assessment is made of the investments in associate companies and, when there are indications that the asset could be impaired, the impairment losses that are demonstrated to exist are stated as a cost. When impairment losses recognised in previous periods cease to exist they are reversed up to the limit of the impairment recorded.

Whenever necessary, adjustments are made to the financial statements of associate companies to adapt their accounting policies to those used by the Group.

2.3. Tangible fixed assets

Tangible fixed assets are initially recorded at acquisition cost, which includes the cost of purchase, any costs directly attributable to the activities necessary to place the assets in the location and condition necessary for them to operate as intended. Arising from the exception allowed for in IFRS 1, revaluations made to tangible assets, in years prior to 1 January 2004, were maintained, with this reassessed value being designated at cost value for the purposes of the IFRS.

Tangible fixed assets are stated at acquisition cost, less accumulated depreciation and any accumulated impairment losses.

Depreciation is calculated, after the time when the asset is ready to be used, in accordance with the straight line method with duodecimal imputation, in conformity with the estimated useful life for each group of assets.

The useful lives and method of depreciation of the various assets are revised annually. The effect of any change in these estimates is recognised prospectively in the income statement.

Tangible fixed assets allocated to the gaming concessions are revertible to the State at the end of the respective concessions ("Tangible fixed assets reversible to the State"), being depreciated in accordance with the straight line method according to their useful lives, always paying attention to the number of years remaining until the end of the respective concessions, as follows:

Concession	End of the concession
Estoril and Lisbon Casinos	2020
Póvoa Casino	2023

Other tangible fixed assets ("Tangible fixed assets non-revertible to the State") are depreciated using the straight-line method with duodecimal imputation during the following estimated useful lives:

Homogenous class	Years
Buildings and other constructions	20 - 50
Basic equipment	3 - 10
Vehicles	3 - 4
Office equipment	3 - 10
Other tangible fixed assets	3 - 10

Regular maintenance and repair costs are recorded as a cost when incurred. Significant expenses incurred with renewals of Improvements of tangible fixed assets are capitalized and depreciated in the corresponding estimated period of recovery of that investment, when future economic benefits associated with the asset are probable and when they can be measured reliably.

The gain (or loss) resulting from the sale or write-off of a tangible fixed asset is determined as the difference between the amount received in the transaction and the net book value of the asset and is recognised in results in the year in which the write-off or sale takes place.

2.4. Leases

The Group applied IFRS 16 using the simplified method (Note 3) and, consequently, the comparative information has not been restated and is presented in accordance with IAS 17. Details of the accounting policies under IAS 17 and IFRS 16 are separately presented below.

Policy applicable since January 1, 2019

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less). For these leases, the Group recognises the lease payments as an operating expense on a straightline basis.

Lease payments included in the measurement of the lease liability comprise:

Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
The amount expected to be payable by the lessee under residual value guarantees;

The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (recognized in the statement of Profit and Loss) and by reducing the carrying amount to reflect the lease payments made. Its carrying amount is remeasured to reflect a possible reassessment when a modification or revision of the fixed payments in substance.

The lease liability is remeasured, being the corresponding adjustment made to the related right-of-use asset whenever:

The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. To the extent that the costs relate to a right-of-use asset, the costs are included in the related right-of-use asset.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.

If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented as a separate line in the consolidated statement of financial position. The Group applies IAS 36 to determine whether a right-of-use asset is impaired, when necessary. Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs.

For contracts that contain a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group uses this practical expedient.

Policy applicable before January 1st, 2019

Lease contracts are classified as finance leases if, through these, all the risks and benefits inherent to ownership of the corresponding assets are substantially transferred to the lessee. Other leases contracts are classified as operating leases. Leases are classified according to their substance and not the form of the contract.

2.5. Intangible assets

Intangible assets essentially correspond to the premiums paid for the operating rights in the gaming zone of Estoril and Póvoa during the period that was negotiated with the Portuguese Government. The Estoril gaming zone includes Estoril Casino and Lisbon Casino, with operations of the latter having begun on 19 April 2006. These premiums are stated at acquisition cost less amortization and any accumulated impairment losses. Intangible assets are recognized only when it is likely that the Group will derive future economic benefits from them, and that they are both controllable and reliably measured.

Amortization is calculated using the straight line method, from the moment that the assets are available for use, according to the estimated useful life, with the end of the respective concessions being considered as follows:

Concession	End date of the concession
Estoril and Lisbon Casinos	2020
Póvoa Casino	2023
Casino Online/Sports Betting	2023/2020 (renewal for periods of three years)

2.6. Impairment of assets

Whenever there is any indicator that the Group's fixed assets could be impaired, an estimate is made of its recoverable value in order to determine the extent of the impairment loss (according to the case). When the recoverable value of an individual asset cannot be determine, the recoverable value of the cash generating unit to which this asset belongs is estimated.

The recoverable value of the asset or of the cash generating unit is the higher between (i) the fair value less sale costs and (ii) the value in use. In the determination of the value in use, the estimated future cash flows are discounted using a discount rate that reflects the expectations of the market concerning the time value of money and regarding the specific risks of the asset or of the cash generating unit in relation to which the estimates of future cash flows have not been adjusted.

Whenever the net book value of the asset or of the cash generating unit is higher than its recoverable value, an impairment loss is recognized. An impairment loss is immediately recognized in the consolidated income statement.

The reversal of impairment losses recognised in previous years is recorded when there is evidence that the impairment losses recognised previously no longer exist are have reduced. The reversal of impairment losses is recognised in the income statement in the respective caption of "Reversals of impairment losses". Impairment losses are reversed up to the limit of the amount that would be recognised (net of amortization) if the loss had not been recorded.

2.7. Tax deductions by investment

Under the Gaming Concession Contracts, the Group has the right to annually deduct the following expenses from the gaming tax:

1. Losses from the operation of the Tamariz Bathing Complex, on the basis set forth by line c) of article 6 of Regulatory Decree 56/84;
1. Expenses pertaining to compliance with the obligations set forth under section 1 of article 5 of Decree Law no. 275/01, of 17 October;
1. Expenses with the purchase, renewal and replacement of gaming equipment, up to 50% of its value, pursuant to paragraph d) of article 6 of Regulatory Decree 56/84;
1. Expenses with projects for the execution of works for the modernizing and expanding of gaming equipment, for up to 50% of its value, pursuant to paragraph d) of article 6 of Regulatory Decree 56/84;
1. Expenses with the automation of the system used for issuing access cards leading to Game Rooms and for controlling revenues and internal television and surveillance circuits, the value of which amounts to 100% of such expenses, pursuant to paragraph e) of article 6 of Regulatory Decree 56/84.

The tax deductions corresponding to the losses referred in 1) and the charges mentioned in 2) are fully recorded in the income statement for the year to which they relate, the remaining amounts being recorded as a deduction from tangible fixed assets and recognized in the income statement over the useful life of the assets correspondents.

2.8. Investment properties

Investment properties essentially consist of buildings held to obtain rents or for appreciation of the capital (or both), and are not intended for use in the production or supply of goods or services or for administrative purposes or for sale in the ordinary course of the business.

Investment properties are initially measured at cost (which includes transaction costs). Subsequently, investment properties are measured in accordance with the cost model.

Costs incurred related with investment properties in use, namely, maintenance, repairs, insurance and taxation on properties are recognised as a cost in the period that they relate to. Improvements in investment properties in relation to which there are expectations that they will generate additional future economic benefits are capitalised in the "Investment properties" caption.

Investment properties are depreciated in accordance with the straight line method with duodecimal imputation during the following estimated useful lives:

Homogenous class	Years
Buildings and other constructions	8 - 50

2.9. Inventories

Inventories are recorded at cost or net realizable value, whichever is lower. The net realizable value represents the estimated sale price less all the costs estimated and necessary to conclude the inventories and to make the sale.

The costing method of inventories adopted by the Group is the average cost.

2.10.Accrual accounting

Expenses and income are recognised in the year they relate to, in accordance with the principle of accrual accounting, irrespective of when the transactions are invoiced. Expenses and income for which the real value is not known are estimated.

Expenses and income imputable to the current year where the expense and income on which will only take place in future periods, together with the expenses and income that have already occurred, but which relate to future periods and which will be imputed to the results of each of these periods, for the value corresponding to them, are stated in the deferrals captions.

Financial interest and income are recognised in accordance with the principle of accrual accounting and in accordance with the effective interest rate applicable.

2.11.Income tax

Income tax corresponds to the sum of current taxation and deferred taxation. Current tax and deferred tax are recorded in the Income Statement except when the deferred tax is related with items entered directly in equity. In these cases the deferred tax is also stated in equity.

Current tax on income is calculated based on the taxable profit of the year of the various entities included in the consolidation perimeter. The taxable profit differs from the accounting result as it excludes diverse expenses and income that will only be deductible or taxable in subsequent years, as well as expenses and income that will never be deductible or taxable in accordance with the tax rules in force.

Deferred tax relates to the temporary differences between the amounts of the assets and liabilities for accounts reporting purposes and the respective amounts for the purposes of taxation, as well as the results of tax benefits obtained and of temporary differences between the fiscal and accounting results.

Deferred tax liabilities are generally recognised for all temporary taxable differences.

Deferred tax assets are recognised for temporary deductible differences, although this recognition only occurs when there are reasonable expectations of future tax profits that are sufficient for these deferred tax assets to be used. These deferred tax assets are revised on each reporting date, these being adjusted according to expectations regarding their future use.

Compensation between assets and deferred tax liabilities is only permitted when: (i) the Company has a legal right to compensate between these assets and liabilities for the purposes of liquidation; (ii) these assets and liabilities are related with income taxation raised by the same tax authority (i) and (iii) the Company intends to perform this compensation for the purposes of liquidation.

The Group estimates income tax in accordance with the Special Regime for the Taxation of Groups of Companies ("RETGS"), in accordance with article 69º of the CIRC. It includes all companies in which the dominating company has a direct or indirect participation of at least 75%, being these companies resident in Portugal and subject to general corporation income tax regime (Imposto sobre o Rendimento das Pessoas Coletivas – "IRC"). In this context, the subsidiaries whose main activity is gaming exploration, namely Estoril-Sol (III) – Turismo, Animação e Jogo, S.A. ("Estoril-Sol (III)"), Varzim Sol – Turismo, Animação e Jogo, S.A. ("Varzim Sol"), Estoril-Sol Digital and Online Gaming Products and Services, S.A. ("Estoril-Sol Digital"), are excluded from RETGS. The activity of the first two companies as concessionaries and licensed, in accordance with clause 7 of the notice from Ministry of Economy, represented by the Gaming Regulation and Inspection Service, dated December 14, 2001, published in the III Series of the Diário da República no. 27 of February 1, 2002, are obliged to payment of a special gaming tax for the exercise of gaming activity, other general or local taxation relating to the exercise of that activity or any other taxation under this agreement, and the respective settlement and recovery under the terms of articles 84º and following of Decree-Law no. 422/89. According to this regime, the Group's taxable profit for each of the tax periods is calculated by the parent company (Estoril-Sol, SGPS, S.A.), by means of the algebraic sum of taxable profits and tax losses recorded in the individual periodic declarations of each of the companies belonging to the group. Regarding Estoril-Sol Digital, the company is obligated to pay a special online gambling tax under the terms of Article 88º of Decree-Law no. 66/2015. Additionally, the subsidiary Estoril Sol Internacional, S.A., which was established during the year ended December 31, 2019, is excluded from RETGS (Note 4).

In accordance with this regime, the Group's taxable profit for each tax period is calculated by the dominant company (Estoril-Sol, SGPS, SA), using the algebraic sum of taxable profits and tax losses determined in the individual periodic tax returns each of the companies belonging to the Group.

The following companies are part of the RETGs:

Estoril Sol, SGPS, S.A.;
DTH Desenvolvimento Turístico e Hoteleiro, S.A.;
Estoril Sol Imobiliária, S.A.;
Estoril Sol V Investimentos Imobiliários, S.A.;
Estoril Sol e Mar Investimentos Imobiliários, S.A.;
Estoril Sol Investimentos Hoteleiros, S.A..

2.12.Financial instruments

Financial instruments (financial assets and financial liabilities) are recognized when the Group becomes a contractual party of the respective instrument that gives the Group the right or obligation to receive or pay a certain amount to a third party.

Clients and other accounts receivable

Clients and other accounts receivable and other current assets are recognized at amortized cost, using the effective interest rate, or at its nominal value, which is understood to correspond to the amortized cost, to the extent that it is expected to be received in the short term and that it does not differ significantly from its fair value at the date of the arrangement, less any impairment losses. impairment losses for there assets are recognized based on the respective expected credit losses. The amount of the expected loss is updated at each reporting data to reflect changes in the credit risk since the initial recognition of the respective financial instrument. The impairment loss is recognized in the statement of profit and loss of the period, in which such situation occurs.

The Group recognizes expected lifetime impairment when there is a significant increase in its credit risk after initial recognition. However, and namely, regarding Accounts receivable from related parties, if there is no increase in the credit risk of the respective financial instrument, the Group measures the impairment loss of that instrument for an amount equivalent to the expected losses in the twelve-month period ("12 months expected credit losses").

Measurement and recognition of expected credit losses

The valuation of the probability of default and loss due to this default is based on existing historical information, adjusted for future forward information as described above.

As for the exposure to the default, for financial assets, it is represented by the gross book value of the assets at each reporting date. For financial assets, the expected impairment loss is estimated as the difference between all contractual cash flows due to the Group as agreed between the parties and the cash flows that the Group expects to receive, discounted at the original effective interest rate.

Note 30 presents in detail the definitions and policies followed by the Group in determining a significant increase in credit risk, a default event, recognition of impairment losses and write-off policy (derecognition).

Cash and cash equivalents

The amounts included in the caption of cash and cash equivalents correspond to the amounts in cash, bank deposits and other cash applications that can be immediately mobilized with insignificant risk of loss of value.

Other accounts payable

Accounts payable are recognized initially at fair value, being subsequently recognized at amortized cost, discounted by any interest calculated and recognized in accordance with the effective interest rate method.

Financing obtained

Loans are recognised initially for the value received, net of issuing expenses. In subsequent periods, loans are carried at amortised cost; any difference between the amounts received (net of issuing costs) and the value payable is recognised in the statement of comprehensive income during the period of the loans using the effective interest rate method.

Loans which fall due in less than twelve months are classified as current liabilities, unless the Group has the unconditional right to defer the settlement of the liabilities for more than twelve months after the date of the statement of the financial position.

2.13.Provisions, post-employment benefits, contingent liabilities and contingent assets

Provisions

Provisions are only recognised when the Company has a present obligation (legal or implied) resulting from a past event, for the resolution of which it will likely become necessary to spend internal resources, the amount of which may be reasonably estimated.

The amount of provisions recognized consists of the present value of the best estimate on the reporting date of the resources necessary to settle the obligation. This estimate is determined taking into consideration the risks and uncertainties associated with the obligation.

Provisions for restructuring costs are only recognized when there is a formal and detailed plan, identifying the main characteristics of the plan and after having communicated these facts to the entities involved.

Provisions are revised on the reporting date and are adjusted in order to reflect the best estimate on that date.

Post-employment benefits

With regard to the defined benefit plans, the corresponding cost is determined using the projected unit credit method, with the respective liabilities being determined based on actuarial studies carried out on each reporting date by independent actuaries.

The cost of the past services is recognised in results on a linear basis during the period until the corresponding benefits are acquired. They are recognised immediately in as the benefits are fully acquired.

The liability associated to the benefits guaranteed recognized in the balance sheet represents the present value of the corresponding obligation, adjusted by actuarial gains and losses.

The effects resulting from the change in assumptions are considered actuarial gains or losses and are recognized directly in reserves (other comprehensive income).

Contingent liabilities

Contingent assets

Contingent assets are not recognised in the financial statements, being disclosed when the existence of a future economic influx of resources is probable.

2.14.Revenue

Revenues are recognized in the income statement when the transfer of control of the good or service provided to the buyer occurs and the amount of the income is reasonably quantified.

The recognized revenue refers essentially to the gaming activity in the Estoril and Póvoa de Varzim Gaming Concessions and to the online activity of Online casino gaming and sports betting. Revenues from slot machines and table gaming resulting from a significant volume of transactions, as well as those resulting from online games, are determined daily under the supervision of Turismo de Portugal through the Gaming Regulation and Inspection Service and are derived from the difference between the amount of bets placed and the prizes awarded and paid, as well as from accumulated prizes. In addition, the Group recognizes the revenue from sales resulting from F&B and entertainment activities.

The Group recognizes revenues from different businesses:

Provision of services associated with the operation of games of chance: With regard to services associated with the operation of games of chance, the Group believes that the obligation to deliver the service, depending on its nature, occurs at the moment where the respective service is provided. It is considered that the timing of the recognition of the obligation of unique performance of each of those services occurs at a specific point in time, when the control of the services provided is transferred to the customer.

Sales associated with the food & beverage and entertainment activities: With regard to sales associated with the F&B and entertainment activities, the Group believes that the performance obligation is fulfilled at the moment when it transfers control of the goods or services, that is, at the time in which it proceeds to its delivery or realization, with no other significant performance obligations to be fulfilled as of that moment. In this way, the recognition of the respective revenue occurs in a moment of time, with the fulfilment of the respective performance obligations.

2.15.Financial charges with financing obtained

The financing expense related to the acquisition, construction or production of qualifying assets that require a substantial period of time to be available for use are capitalized up to the date of transfer from assets under construction to assets subject to depreciation. Other financing expenses are recognized in the income statement when incurred.

2.16.Classification of the statement of the financial position

Assets realizable and liabilities payable, for which the Group does not have the unconditional right to defer payment for more than twelve months as from the date of the statement of financial position, that are expected to be realized in the normal course of operations, or are held with the intention of being traded, are classified as cur-rent assets and liabilities. All other assets and liabilities are classified as non-current.

2.17.Subsequent events

Events which occur after the close date of the year and which provide additional information regarding conditions that existed on the close date of the year are reflected in the consolidated financial statements.

Events which occur after the close date of the year and which provide additional information regarding conditions that occur after the close date of the year are disclosed in the Notes to the consolidated financial statements, if material.

3. CHANGES IN ACCOUTING POLICIES, JUDGMENTS, ESTIMATES AND CORRCTION OF FUNDAMENTAL ERRORS

Except for the impact of the adoption of the new standards and interpretations or their amendments that came into effect for the years beginning on January 1, 2019, during the year 2019 there were no changes in accounting policies, compared to those considered in the preparation of the consolidated financial information relating to the financial year 2018, in accordance with the provisions of IFRS, nor have material errors relating to prior periods been recognized.

Relevant estimates in the preparation of the financial statements

The most significant accounting estimates, reflected in the financial statement for the year ended December 31, 2019 include:

Analyzes of impairment of non-current assets;
Registration of provisions;
Impairment analysis of inventories (real estate portfolio).

In the years ended December 31, 2019, as a result of the level of revenues and results verified at the Casino operated in Póvoa de Varzim Game Concession (Note 5), as well as the impacts verified from the implementation of mechanisms to identiy players as a result of Law no. 83/2017, of 18 August, on Money Laundering and the prospective effect of the consideration to be paid to the State until the end of the concession, the Group reviewed the estimated value of recovery of the assets allocated to the Póvoa de Varzim Game Concession, which resulted in the recognition of an impairment loss of approximately, 4,177,000 Euros (Note 16). In the year ended December 31, 2018, as mentioned in Note 16, the Entity reassessed the estimated value of the recovery of the referred assets. This evaluation did not give rise, on 31 December 2018, to any impairment loss recognition.

The Board of Directors periodically evaluates possible liabilities arising from past events, the likelihood of which implies recognition of a provision and/or disclosure in the consolidated financial statements (Notes 27 and 29).

Amendments to IFRS of mandatory application in 2019

Standard / Interpretation	Applicable in the European Union in the years starting on or after
IFRS 16 – Leases	1-Jan-19	This standard introduces the principles of recognition and measurement of leases, replacing IAS 17 – Leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance with IFRS 16's approach to lessor accounting substantially unchanged from its predecessor, IAS 17.
Amendments to IFRS 9: Prepayment Features with Negative Compensation	1-Jan-19	This amendment allows financial assets with contractual conditions which, in case of early prepayment, require the payment of a considerable amount by the lender, to be measured at amortized cost or at fair value through other comprehensive income (depending on the business model), as long as two conditions are met: (i) on the date of the initial recognition of the asset, the fair value of the early prepayment feature is insignificant, and (ii) the possibility of negative compensation related to early prepayment is the only reason for the asset not to be considered as a financial instrument that only includes payments of principal and interest.
IFRIC 23 – Uncertainty over Income Tax Treatments	1-Jan-19	This interpretation provides guidance on the determination of taxable income, tax bases, tax losses to be reported, tax credits to be used and tax rates in scenarios of uncertainty regarding the treatment of income tax.

Improvements to international financial reporting standards (2015-2017 cycle)	1-Jan-19	These improvements encompass the clarification of some aspects related to: IFRS 3 – Business combinations: requires the remeasurement of interests previously held when an entity obtains control over a subsidiary over which it previously had joint control; IFRS 11 - Joint Arrangements: clarifies that there should be no remeasurement of interests previously held when an entity obtains joint control over a joint operation; IAS 12 - Income taxes: clarifies that all tax consequences of dividends must be recorded in the income statement, regardless of how tax arises; IAS 23 - Borrowing costs: clarifies that if any specific borrowing remains outstanding after the related asset is ready for its intended use or sale, that borrowing becomes part of the funds that an entity borrows generally when calculating the capitalization rate on general borrowings.
Amendments to IAS 19: Change in Plan, Restriction of Settlement	1-Jan-19	Whenever a plan amendment, curtailment or settlement occurs, it is now mandatory that the current service cost and net interest of the period after remeasurement are determined using the assumptions used for remeasurement. In addition, amendments were included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling.
Amendments to IAS 28: Long term Interests in Associates and Joint Ventures	1-Jan-19	This amendment clarifies that IFRS 9 should be applied (including related impairment requirements) to investments in associates and joint venture when the equity method is not applied in their measurement.

IFRS 16 – Leases

In year ended on 31 December 2019, the Group has applied IFRS 16 – Leases and its related amendments, which are effective for annual periods that begin on or after 1 January 2019.

The Group opted for the modified retrospective transition model of IFRS 16, provided for in its paragraphs IFRS 16.C3 (b), C7 and C8. Consequently, the Group did not restate the comparative financial information, recording on the transition date the liability for future income, and an asset of the same amount.

In contrast to the accounting for leases for lessees, IFRS 16 substantially maintains the principles of registering leases for lessors previously provided for in IAS 17.

Impact of the new definition of a lease

The Group assessed the practical expedient available in the transition to IFRS 16 of not reassessing whether a contract is or contains a lease. Accordingly, the Group carried out an overall assessment of the new definition and assessed the totality of contracts entered into or modified by it before 1 January 2019.

The substantial right to obtain all the economic benefits from the use of a specific identified asset; and - The right to direct the use of that specific asset.

The Group applied the definition of lease established in IFRS 16 and the respective application guides to all lease agreements entered into by it, either as lessor or as lessee, on or after January 1, 2019.

The Group's assessment of the application of IFRS 16 revealed that the new definition of lease provided for in IFRS 16 did not significantly change the scope of contracts that comply with the definition of lease for the Group.

Impact on Lessee Accounting

Operating leases

IFRS 16 changes how the Group accounts for leases previously classified as operating leases under IAS 17, which were off the consolidated statement of financial position, disclosed in the respective notes as obligations assumed not included in the consolidated statement of the financial position.

Applying IFRS 16, for all leases (except as noted bellow), the Entity:

a) Recognises right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured at the present value of the future lease payments;
b) Recognises depreciation of right-of-use assets and interest on lease liabilities in profit or loss;
c) Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within financing activities) in the consolidated statement of cash flows.

For short-term leases (lease term of 12 months or less) and leases of low-value assets, the Entity has opted to recognize a lease expense on a straight-line basis as permitted by IFRS 16. In the year ended December 31, 2019, expenses of 1,080,488 Euros were recognized relating to short-term leases, under the caption of Supplies Services (Note 8).

As of December 31, 2018, the Entity had assumed non-cancellable lease responsibilities of 670,599 Euros.

The Group's evaluation indicated that 650,122 Euros of these contracts relate to leases for which the Group recognized on January 1, 2019, a Right-of-use asset of 523,549 Euros (Notes 3 and 17) and a corresponding lease liability of equal amount. The impact on the consolidated income statement for the year ended 31 December 2019 was a reduction in Supplies and Services in the amount of 329,176 Euros (Note 8) and an increase in depreciations by 320,621 Euros (Note 10) and financial expenses in 17,479 Euros (Note 12).

The Group presented these amounts independently in the consolidated statement of financial position in the item "Right-of-use assets" (Note 17) and the respective liabilities in the item "Lease liabilities" (Note 26).

In the year ended December 31, 2019, variable income expenses related to those contracts were not recognized.

Under IAS 17, all payments for operating leases were presented as part of operating cash flows. In the year ended 31 December 2019, the Group classified as financing payments an amount of 329,176 Euros which would, according to IAS 17, be classified as an operational payment.

The adoption of IFRS 16 had no impact on the net cash flows of the year.

Based on the analysis of leases previously classified as financial to the Group on January 1, 2019, and based on the facts and circumstances existing at that date, the Board of Directors considered that the impact of the adoption of this standard does not impact the amounts recognized in the Group's consolidated financial statements.

Impact on lessor accounting

The Group does not have relevant contractual positions as lessor, so there were no significant impacts from the adoption of IFRS 16 resulting from contracts in which it is lessor.

Other disclosures related with IFRS 16 adoption

The average incremental financing rate applied by the Group in determining the liabilities for lease recognized in the consolidated statement of financial position on January 1, 2019 was 1.625% for transport equipment and 2.5% for buildings.

Operating lease responsibilities as of December 31, 2018	670.599
Short term and low value leases	(20.477)
Effect of financial updating of the above amounts	(126.573)
Lease liabilities recognized on January 1, 2019	523.549

The Group recognized, with the adoption of IFRS 16, lease liabilities and right-of-use assets in the same amount.

New IFRS or revised IFRS adopted with mandatory application in future years

The following amendments, with mandatory application in the coming years, were, as of the date of approval of these financial statements, endorsed by the European Union:

Standard / Interpretation	Applicable in the European Union in the years starting on or after
Amendments to references to the Framework in IFRS	1-Jan-20	It corresponds to amendments in several standards (IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38, IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22 e SIC 32) in relation to references to the Revised Conceptual Framework in March 2018. The revised Conceptual Framework includes revised definitions of an asset and liability and new guidance on measurement, derecognition, presentation and disclosure.
Amendment to IAS 1 and IAS 8 – Definition of material	1-Jan-20	Corresponds to amendments to clarify the definition of material in IAS 1. The definition of material in IAS 8 now refers to IAS 1. The amendment changes the definition of material in other standards to ensure consistency. The information is material if it omission, distortion or concealment is reasonably expected to influence the decisions of the primary users of the financial statements based on the financial statements.

These amendments, although endorsed by the European Union, were not adopted by the Group in 2019, since their application is not mandatory. It is not expected that the future adoption of the referred amendments have significant impacts on the consolidated financial statements.

Other standards

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

Standard / Interpretation	Applicable in the European Union in the years starting on or after
IFRS 17 – Insurance Contracts	1-Jan-21	This standard establishes, for insurance contracts within its scope, the principles for their recognition, measurement, presentation and disclosure. This standard replaces IFRS 4 - Insurance Contracts.
Amendment to IFRS 3 - Business Definition	1-Jan-20	Corresponds to amendments to the definition of business, aiming to clarify the identification of business acquisition or acquisition of a group of assets. The revised definition also clarifies the output definition of a business as a supply of goods or services to customers. The amendments include examples to identifying a business acquisition.
Amendments to IFRS 9, IAS 39 and IFRS 7 - reform of benchmark interest rates (IBOR Reform)	1-Jan-20	Corresponds to amendments to IFRS 9, IAS 39 and IFRS 7 related to the interest rate benchmark reform project (known as "IBOR reform"), in order to reduce the potential impact of the change in reference interest reference rates on financial reporting, namely hedge accounting.

These standards and amendments have not yet been endorsed by the European Union and as such were not applied by the Group in the year ended 31 December 2019.

For these standards and amendments, issued by the IASB but not yet endorsed by the European Union, the Board of Directors does not consider that significant impacts on the consolidated financial statements will arise related to their future adoption.

4. COMPANIES INCLUDED IN THE CONSOLIDATION AND ASSOCIATE COMPANIES

Companies included in the consolidation

The companies included in the consolidation, their registered offices, the method of consolidation adopted and the proportion of the capital effectively held on 31 December 2019 and 2018 are the following:

			Effective percentage
		Method of	of the capital held
Name	Head office	Consolidation	Dec-19	Dec-18

Estoril-Sol, S.G.P.S., S.A.	Estoril	Integral	Holding. Co.	Holding. Co.
Estoril-Sol (III) - Turismo, Animação e Jogo, S.A.	Estoril	Integral	100	100
Varzim Sol - Turismo, Jogo e Animação, S.A.	Póvoa de Varzim	Integral	100	100
Estoril-Sol V - Investimentos Imobiliários, S.A.	Estoril	Integral	100	100
DTH - Desenvolvimento Turistico e Hoteleiro, S.A.	Estoril	Integral	100	100
Estoril-Sol Imobiliária, S.A.	Estoril	Integral	100	100
Estoril-Sol - Investimentos Hoteleiros, S.A.	Estoril	Integral	100	100
Estoril Sol e Mar - Investimentos Imobiliários, S.A.	Estoril	Integral	100	100
Estoril-Sol Digital, Online Gaming Products and Services, S.A. (a)	Estoril	Integral	50	50
Estoril-Sol Internacional, S.A. (b)	Estoril	Integral	100	-

(a) The activity of Estoril-Sol Digital began with the attribution of the license to operate games of change online in July 2016. The scope of the activity of exploring online games, which it intends to carry out through its subsidiary Estoril-Sol Digital, Online Gaming Products and Services, S.A., Estoril-Sol (III) Animação e Jogo, S.A., a company held by the issuer, entered into an association agreement in July 2016 with Vision Gaming Holding Limited, based in Malta, whereby it became the holder of a minority interest, corresponding to 49.9998% of the capital stock of Estoril-Sol Digital, while Estoril-Sol (III) S.A. holds a majority of the capital and voting rights in said company. The association agreement foresaw the investment in the capital of Estoril-Sol Digital corresponding to 50% with the renewal of the online casino license, which happened on July 24, 2019. As at December 31, 2019, Estoril Sol (III) and Vision Gaming Holding Limited both hold a share corresponding to 50% of Estoril Sol Digital's equity. Nevertheless, Estoril Sol (III) maintains the right to nominate the Board of Directors Chairman, allowing the Group to have the control of the operations.
(b) During the year ended on December 31, 2019, Estoril Sol, SGPS, SA, constituted a new company, Estoril Sol Internacional, S.A., whose area of activity will be the management of projects / operations in international markets, still under study and analysis as of the date of these consolidated financial statements.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited ("DTTL"), its global network of member firms, and their related entities. DTTL (also referred to as "Deloitte Global") and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.

Porto offices: Bom Sucesso Trade Center, Praça do Bom Sucesso, 61 - 13º, 4150-146 Porto

Type: Corporation | Tax and CRC Registration no.: 501776311 | Share capital: € 500,000

Head offices: Av. Eng. Duarte Pacheco, 7, 1070-100 Lisboa

5. REPORTING BY SEGMENTS

The segments reportable by the Group are based on the identification of the segments according to the financial information that is internally reported to the Board of Directors and which serves as support for the same in the evaluation of business performance and in taking decisions regarding the allocation of resources to be used. The segments identified by the Group for segment reporting are thus consistent with the manner in which the Board of Directors analyzes its business, corresponding to the concession of the operation "Estoril Game Concession" which includes the Estoril and Lisbon Casinos, "Póvoa de Varzim Game Concession", which includes the Póvoa Casino, the license to explore online games by Estoril-Sol Digital, the "Licence for Online Gambling "and the" Other "segment, which essentially includes the effects of Estoril-Sol, SGPS, S.A. and the other operating activities of the Group.

As of December 31 2019 and 2018, the information by business segment, is as follows:

	December 31, 2019
	Estoril Gaming Zone		Póvoa Gaming Zone		License for Online Gambling
	Estoril	Lisboa		Póvoa	Casino
	Casino	Casino	Sub-Total	Casino	Online	Other	Total

Operating revenue	37 356 854	43 673 964	81 030 818	19 228 742	20 061 559	-	120 321 119
Result of the segment	249 375	14 481 244	14 730 618	(8 304 748)	9 167 513	(1 098 222)	14 495 161
Net assets	47 315 918	63 979 616	111 295 534	24 405 597	25 625 865	9 223 214	170 550 210
Net liabilities	9 580 627	18 167 587	27 748 214	21 547 529	12 669 740	5 003 386	66 968 869
Investment assets:
- tangible fixed (Note 14)	325 781	193 001	518 782	1 176 919	9 092	-	1 704 793
- intangible (Note 16)	-	-	-	-	12 000	-	12 000
- right-of-use assets (Note 17)	127 747	20 240	147 987	65 922	200 961	203 385	618 255
- tax deductions on investments (Note 15)	147 228	67 084	214 312	548 213	-	-	762 525
Depreciation and amortization (Note 10)	(7 059 718)	(6 873 936)	(13 933 653)	(5 221 336)	(114 919)	-	(19 269 908)
Impairments (Notes 16 and 20)	19 855	-	19 855	(4 177 014)	-	-	(4 157 159)
Provisions increase (Note 27)	-	-	-	(976 995)	-	-	(976 995)
Provisions reversals (Note 27)	-	-	-	41 440	-	-	41 440
Indemnities - inclueded in "Personnel costs" (Note 9)	186 888	145 773	332 661	61 796	-	-	394 457
Average number of employees (Note 9)	351	318	669	260	2 8	2 5	981

	December 31, 2018
	Estoril Gaming Zone			Póvoa Gaming Zone	License for Online Gambling
	Estoril	Lisboa		Póvoa	Casino
	Casino	Casino	Sub-Total	Casino	Online	Other	Total

Operating revenue	38 048 178	45 529 090	83 577 268	20 741 414	13 089 035	-	117 407 716
Result of the segment	50 060	16 772 410	16 822 470	(4 801 115)	4 631 902	(585 834)	16 067 423
Net assets	41 508 886	70 967 241	112 476 127	28 363 976	19 717 885	3 343 683	163 901 671
Net liabilities	9 423 284	20 203 911	29 627 195	20 801 156	12 688 643	4 856 978	67 973 972
Investment assets:
- tangible fixed (Note 14)	1 143 417	652 137	1 795 554	1 979 490	25 181	-	3 800 225
- intangible (Note 16)	-	-	-	-	-	-	-
- tax deductions on investments (Note 15)	93 987	126 828	220 815	835 248	-	-	1 056 063
Depreciation and amortization (Note 10)	(7 275 783)	(6 911 449)	(14 187 232)	(5 172 536)	(41 775)	-	(19 401 543)
Provisions increase (Note 27)	(23 688)	(23 688)	(47 376)	(2 712 462)	-	(138 000)	(2 897 838)
Provisions reversals (Note 27)	246 833	-	246 833	317 155	-	456 718	1 020 706
Indemnities - inclueded in "Personnel costs" (Note 9)	426 302	155 505	581 807	158 544	-	-	740 351
Average number of employees (Note 9)	356	316	671	255	2 5	1 8	969

Segment revenues arise from transactions with external customers. There are no transactions between segments. The accounting policies used in the preparation of the presented financial information by segment are consistent with those used in the preparation of the Group's consolidated financial statements.

6. OPERATING INCOME BY NATURE

The consolidated operating income, in the years ended on 31st December 2019 and 2018, is detailed as follows:

	December - 2019
	Estoril Game Concession			Póvoa Game	License for Online
				Concession	Gambling
	Estoril	Lisboa		Póvoa	Casino
Nature	Casino	Casino	Sub-Total	Casino	Online	Total

Gaming revenues:
- Slot Machines - Table based gaming	46 323 414 16 477 260	68 308 578 16 373 146	114 631 992 32 850 406	39 190 231 6 125 061	27 258 702 4 278 358	181 080 925 43 253 825
- Sports betting	-	-	-	-	13 274 654	13 274 654
- Bonuses and other
fair value adjustments	(105 740)	(261 641)	(367 381)	(38 910)	(6 067 520)	(6 473 811)
	62 694 934	84 420 083	147 115 017	45 276 382	38 744 194	231 135 593
Gaming taxes:
- Special Gaming Tax (current)	(31 400 337)	(42 340 862)	(73 741 199)	(22 657 646)	(18 684 236)	(115 083 081)
- Annual Gaming Tax	-	-	-	(5 032 562)	-	(5 032 562)
( difference to minimum grant )
	(31 400 337)	(42 340 862)	(73 741 199)	(27 690 208)	(18 684 236)	(120 115 643)
Other operating revenues:
- F&B and Entertainment	4 700 616	717 258	5 417 873	1 154 697	-	6 572 570
- Tax deductions - Entertainment	1 127 358	846 817	1 974 175	453 153	-	2 427 328
- Supplementary income	227 465	28 293	255 758	16 476	-	272 234
- Other	6 818	2 375	9 193	18 242	1 601	29 036
	6 062 257	1 594 743	7 657 000	1 642 568	1 601	9 301 169

	37 356 854	43 673 964	81 030 818	19 228 742	20 061 559	120 321 119

	December - 2018
	Estoril Game Concession			Póvoa Game Concession	License for Online Gambling
	Estoril	Lisboa		Póvoa	Casino
Nature	Casino	Casino	Sub-Total	Casino	Online	Total
Gaming revenues:
- Slot Machines	48 509 725	70 372 908	118 882 633	38 840 947	20 885 602	178 609 182
- Total based gaming	15 577 211	16 404 098	31 981 309	7 136 544	4 187 654	43 305 507
- Sports betting	-	-	-	-	11 355 291	11 355 291
- Bonuses and other fair value adjustments	(117 567)	(239 028)	(356 595)	(93 589)	(7 118 184)	(7 568 368)
	63 969 369	86 537 978	150 507 347	45 883 902	29 310 363	225 701 612
Gaming taxes: - Special Gaming Tax - Annual Gaming Tax (difference to minimum grant)	(32 043 467) - (32 043 467)	(43 388 504) - (43 388 504)	(75 431 971) - (75 431 971)	(22 988 746) (4 098 106) (27 086 852)	(16 221 328) - (16 221 328)	(114 642 045) (4 098 106) (118 740 151)

Other operating revenues:
- F&B and Entertainment	4 415 491	719 107	5 134 598	1 125 508	-	6 260 106
- Tax deductions - Entertainment	1 228 291	1 594 569	2 822 860	799 757	-	3 622 617
- Supplementary income	240 406	32 218	272 624	16 058	-	288 682
- Other	238 088	33 722	271 810	3 040	-	274 850
	6 122 276	2 379 616	8 501 892	1 944 363	-	10 446 255

	38 048 178	45 529 090	83 577 268	20 741 413	13 089 035	117 407 716

Special Gaming Tax:

The Special Gaming Tax is applied to the revenues from the gaming activity carried out by Estoril-Sol (III) - Turismo, Animação e Jogo, S.A which currently runs the Estoril Casino and Lisbon Casino, and by Varzim-Sol - Turismo, Jogo e Animação, S.A. ("Varzim-Sol") which operates the Póvoa de Varzim Casino.

In accordance with clause 7 of the Notice of the Ministry of the Economy, represented by the Inspectorate-General for Gaming, of 14 December 2001, published in the III Series of the Diário da República no. 27 of 01 February 2002, the concessionaire is obliged to pay a special tax for operating gaming activities, with no other general or local tax being payable relating to the exercise of this activity or any other which it is required to under this contract, with the respective collection and payment being performed pursuant to articles 84 and following of Decree Law no. 422/89 (Note 28).

In this regard, the activities undertaken by these companies are not subject to Corporate Income Tax (IRC).

Remnant calculated on the consideration:

The Decree Law nº 29/88 of 3 August, down in paragraph 1 of Article 3, the concessionaire is obliged to pay an annual payment amounting to 50% of the gross gaming revenues. This payment cannot be, under any circumstances, lower than the values in the table attached to that Decree Law.

As of the fifteen-year extension of the Game Concession Agreement, through Decree-Law no. 275/2001 of December 14, 2001, it was published in the table annexed to said Decree-Law, the value of the annual minimum consideration amounts, at 2000 prices.

At the beginning of 2015 Decree-Regulatory No. 1/2015 of January 21 approved the payment in instalments of the amounts of the annual minimum consideration amounts calculated based on Decree-Law No. 275/2001, upon prior approval by the Gaming Regulation and Inspection Service of the Portugal Institute of Tourism of a payment plan proposed by the Game Concessionaires. Decree Regulatory No. 1/2015 of January 21 was applied for the first time to the amounts of the minimum consideration for the year 2014, since they initially had as payment deadline the day of January 31, 2015.

The approval of the payment plans implies the payment by the Concessionaires of the gaming zones of the amount corresponding to the percentage of the gross revenue contractually fixed as an annual counterpart in the case of Varzim-Sol 50%, plus 10% of that percentage, thus setting the effective annual rate of a annual consideration of Varzim-Sol in 55% of gross revenue.

Regarding the amounts calculated as a minimum counterparty according to Decree-Law no. 275/2001, it should be added that at the beginning of 2013, and after unanimous deliberation at the Portuguese Casinos Association, the Group's operating companies attempted against the State's legal actions aimed at restoring the economic and financial balance of concessions. Such a request is based, among other reasons, on the fact that the State, through actions and omissions, gave rise to changes in the circumstances that were the basis of the negotiation of the concessions. Of note is the fact that it was assumed in the basis of calculation of taxes to be paid by the concessionaires a continuous and accentuated increase of revenues throughout the concession period. Although this proposal was not verified, due to the economic situation and also as a consequence of the State's attitude towards online gambling and clandestine gambling, among others, it continued to demand the payment of very high taxes, calculated on revenues that they did not obtained.

Thus, there was no alternative to the concessionaires other than to challenge all tax assessments submitted to them before the competent Administrative and Tax Courts (2013 inclusive), and to that end, presented the necessary judicial guarantees. However, at the date of approval of these financial statements, and despite the fact that the Group has challenged all the tax assessments submitted to it, they are settled, except for the debt relating to the minimum consideration for the year ended December 31, 2014, which is being paid in accordance with the aforementioned payment plan, and the Group or any of its subsidiaries, for this same reason at the date of approval of these financial statements have no outstanding debt to the Portuguese State related to the Game Tax (Note 28).

7. COST OF SALES

In the years ended on 31 December 2019 and 2018, the caption "Cost of sales" is detailed as follows:

	2019
		Finished and	Raw materials
		intermediate	and
	Goods	products	consumables	Total
Opening balance (Note 20)	6 033 642	3 285 982	353 972	9 673 596
Purchases	239	-	3 107 148	3 107 387
Adjustments/transfers	-	-	(106 109)	(106 109)
Closing balance (Note 20)	6 033 636	3 285 982	339 443	9 659 061
Cost of goods sold and materials consumed	245	-	3 015 568	3 015 815
	2018
		Finished and	Raw materials
		intermediate	and
	Goods	products	consumables	Total

Opening balance	6 033 636	3 285 982	339 443	9 659 061
Purchases	-	-	3 192 190	3 192 190
Adjustments/transfers	6	-	(123 048)	(123 042)
Closing balance (Note 20)	6 033 642	3 285 982	353 972	9 673 596
Cost of goods sold and materials consumed	-	-	3 054 613	3 054 613

8. SUPPLIES AND SERVICES

In the years ended on 31st December 2019 and 2018, "Supplies and services" were as follows:

	Dec - 2019	Dec - 2018

Advertising	5 836 616	5 549 440
Gifts to customers	5 206 965	4 751 372
Subcontracts	4 642 117	4 088 999
Fees	4 240 722	2 065 051
Energy and other fluids	3 042 540	3 104 746
Conservation and repairs	2 837 227	2 915 898
Cleaning and laundry	2 631 437	2 854 380
Specialized work	2 504 075	2 885 161
Financial services (comissions)	2 261 814	1 815 311
Surveillance and security	2 093 210	1 817 404
Royalties	2 030 323	2 559 358
Rents	1 080 488	1 370 667
Insurance	577 174	567 936
Communication	379 250	375 826
Travel and hotels	275 283	247 310
Other	941 136	782 589
	40 580 376	37 751 448

The decrease occurred in 2019 in the item "Rents" refers to the adoption of IFRS 16, in the amount of 329,176 Euros (Note 3).

As of December 31, 2019, the variations verified in "Supplies and services", namely, in the items "Advertising", "Fees" and "Financial services (commissions)" are essentially related to the operation of Estoril-Sol Digital, due to the growth of the business, essentially, with regard to sports betting. As at 31 December 2019 and 2018, the item "Supplies and services" includes expenses with related entities ICE Elite, Ltd. and GAMING ONE Limited, in the amount of 3,047,770 Euros and 2,589,442 Euros, respectively (Note 34).

9. PERSONNEL COSTS

In the years ended 31 December 2019 and 2018, the caption "Personnel costs" is detailed as follows:

	Dec - 2019	Dec - 2018
Remuneration of governing bodies (Note 33)	2 981 814	2 978 144
Remuneration of staff	23 641 994	24 058 131
Indemnities	394 457	740 351
Charges on remuneration	6 004 366	5 924 422
Insurance	217 498	230 216
Social charges	1 352 534	1 328 208
Post-employment benefits (Note 27)	131 000	131 000
Other	341 555	458 158
	35 065 219	35 848 630

During the years ended on 31 December 2019 and 2018, the average number of staff in the service of the Group was 981 and 969 employees, respectively.

10. DEPRECIATION AND AMORTIZATION

In the years ended on 31st December 2019 and 2018, the Group recognized the following depreciation and amortizations presented as follows:

	2019	2018

Tangible fixed assets (Note 14)
Reversible to the State	11 154 510	11 528 697
Non-reversible to the State	2 117 116	1 964 867
Tax deductions on investments (Note 15)	(4 728 321)	(4 501 467)
Net	8 543 305	8 992 097

Intangible assets (Note 16)	10 400 431	10 403 895
Rights of Use Assets (Note 17)	320 621	-
Investment properties (Note 18)	5 551	5 551
	19 269 908	19 401 543

Furthermore, in 2019, the following expenses related to right-of-use assets were recognized:

Expenses related to short-term leases (Note 8)	1 080 488
Financial expenses with lease liabilities (Note 12)	147 845
	1 228 333

As of December 31, 2019, the Group is committed to short-term leases in the amount of approximately 312,000 Euros.

11. OTHER OPERATING EXPENSES

In the years ended 31 December 2019 and 2018, the caption "Other operating expenses" is detailed as follows:

	2019	2018

Offer of own goods and services	1 840 849	1 563 536
Other taxation and rates	121 372	150 940
Donations	195 284	126 836
Quotas	146 328	116 083
Sundries expenses	99 734	98 885
write-off of tangible fixed assets	294	10 518
Losses in inventories	5 338	1 582
Other	365 548	718 989
	2 774 747	2 787 369

12. FINANCIAL EXPENSES AND FINANCIAL INCOME

The captions "Financial expenses and Financial income" for the years ended 31 December 2019 and 2018 are as follows:

Financial Expenses	Dec - 2019	Dec - 2018
Interest borne:
Financing from banks (a)	(170 958)	(503 896)
Finance and operating leasing (b)	(147 845)	(157 197)
	(318 803)	(661 093)
Financial Income	Dec - 2019	Dec - 2018

Interests from bank deposits	8 543	10 121
Exchange gains	15 843	15 285
Other	30 049	25 622
	54 435	51 029

Net financial costs	(264 368)	(610 064)

(a) During the years ended December 31, 2019 and 2018, the Group did not bear financial charges with qualifying assets that could be capitalized, so that said charges were recognized in the income statement when incurred. The reduction in financial charges incurred is essentially due to the reduction in bank liabilities in a concentrated effort by the Group to achieve financial balance and less dependence on third parties.
(b) As of December 31, 2019, the respective item includes financial expenses related to lease liabilities taking into account the application of IFRS 16 in 2019 (Note 3).

13. INCOME TAX OF THE YEAR

The Company is subject to corporation income tax at the rate of 21% plus a Municipal Surcharge of 1.5% of taxable income, resulting in a maximum aggregate tax rate of 22.5%. In addition, taxable income for the year ended 31 December 2019 in excess of 1,500,000 Euros is subject to a State Surcharge under the terms of article 87-A of the Corporation Income Tax Code at the following rates:

3% for taxable profit between 1,500,000 Euros and 7,500,000 Euros;
5% for taxable profit between 7,500,000 Euros and 35,000,000 Euros;
9% for taxable profit exceeding 35,000,000 Euros ;

In addition, net finance costs for 2019 and following years are deductible for determining annual taxable income according with the greater of the following limits:

1,000,000 Euros;
30% of the profit before amortization and depreciation, net finance costs and taxes.

Net finance costs considered to be excessive in a given tax period may be deductible over the following five periods, after the net financing costs for that period, provided that they do not exceed the above mentioned limits.

On the other hand, when the financing expenses deducted are less than the 30% limit of profit before depreciation, net financing expenses and taxes, the unused part is added for the purposes of determining the maximum deductible amount, up to the following fifth taxation period.

Pursuant to article 88 of the CIRC, the Company is also subject to autonomous taxation on a set of charges at the rates provided for in the mentioned article.

	2019	2018
Pre-Tax Profit Writte-off of the Result of Companies exempt from IRC and subject to the Special Gaming Tax Pre-Tax Profit of the Companies (REGTS)	14 609 975 (15 823 011)	16 182 068 (17 011 429)
	(1 213 036)	(829 361)
Non-deductible costs Other non-deductible costs	262 582 262 582	284 020 284 020
Other non-taxable income	(235 070) (235 070)	(235 070) (235 070)
Result for tax purposes Nominal tax rate	(1 185 524) 21% (248 960)	(780 411) 21% (163 886)
Non-registered assets (a)	248 960	163 886
Autonomous taxation	114 814	114 645
Income tax of the year	114 814	114 645
Efective tax rate	0,6%	0,7%

The cost of taxation on income on 31st December 2019 and 2018 is broken down as follows:

(a) Deferred tax assets relating to reportable tax losses were not recognized, since the Group does not expect to report subsequent taxable profits that allow the recovery of those assets.

The deduction of reportable tax losses is limited to 70% of taxable profit and this rule applies to deductions made in tax periods beginning on or after 1 January 2012, irrespective of the periods in which they were established.

As of December 31, 2019 and 2018, the reportable tax losses amounted to 6,350,005 Euros and 6,908,843 Euros respectively, and were generated as follows:

Generated in	Limit:	2019	2018
2014	2026	-	1 744 362
2015	2027	1 191 504	1 191 504
2016	2028	2 446 413	2 446 413
2017	2022	746 153	746 153
2018	2023	780 411	780 411
2019	2024	1 185 524	-
		6 350 005	6 908 843

14. TANGIBLE FIXED ASSETS

As a result of the concession contract for the operation of gambling in the Estoril and Póvoa gaming zones, part of the Group's tangible fixed assets are reversible to the Portuguese State, essentially the assets related to gambling equipment and related assets to the Casinos of the Estoril and Póvoa gaming concession.

Tangible fixed assets reversible to the State

During the years ended on 31st December 2019 and 2018, the movement in tangible assets, as well as in the respective depreciation and accumulated impairment losses, was as follows:

Year 2019 - Tangible fixed assets revertible to the State
Buildings and other constructions	Basic equipment	Office equipment	Other tangible fixed assets	Fixed assets in progress	Total


					255 216 666
-	1 468 748	10 701	-	-	1 479 449
					(47 426)
					(4 395 693)
135 852 811	113 506 330	2 833 181	60 674	-	252 252 996


					225 478 032
					11 154 510
					(4 395 401)
					232 237 141
9 200 991	10 725 885	88 979	-	-	20 015 855
	135 900 543 - (47 732) 122 491 281 4 208 271 (47 732) 126 651 820	116 376 792 (19 676) (4 319 534) 100 207 485 6 892 251 (4 319 291) 102 780 445	2 850 907 - (28 427) 2 718 592 53 988 (28 378) 2 744 202	60 674 - - 60 674 - - 60 674	27 750 (27 750) - - - - -

In the years ended 2019 and 2018, the item "Buildings and other constructions" includes, essentially, works and improvements related to the buildings where the casinos explored by the Group operate.

In the years ended 2019 and 2018, the item "Basic Equipment" refers essentially to the gambling equipment used in casinos operated by the Group.

The additions verified in 2019 consist, essentially, on the acquisition of new gaming equipment aiming the partial renovation of the Casino da Póvoa current slot machine park. Thus, 42 new slot machines were acquired for the referred Casino. These acquisitions are part of the policy for the renewal of gaming equipment as the Group slaughter gaming equipment in the same period.

During 2019, several write-off of gaming equipment and support for the animation and food & beverage operations of Casino do Estoril were carried out. These write-offs essentially refer to fully depreciated equipment that was technologically obsolete.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year 2018 - Tangible fixed assets revertible to the State
	Buildings and other constructions	Basic equipment	Office equipment	Other tangible fixed assets	Fixed assets in progress	Total
Gross amount:
Opening balance	135 904 532	118 296 885	2 773 852	60 674	-	257 035 943
Acquisitions	-	2 400 040	81 869	-	43 290	2 525 199
Write-off	(3 989)	(4 335 673)	(4 814)	-	-	(4 344 476)
Closing balance	135 900 543	116 376 792	2 850 907	60 674	27 750	255 216 666
Depreciation and accumulated impairment losses:
Opening balance	117 526 697	98 012 544	2 685 653	60 674	-	218 285 568
Depreciation of the year (Note 10)	4 968 574	6 522 488	37 635	-	-	11 528 697
Write-off	(3 990)	(4 327 547)	(4 696)	-	-	(4 336 233)
Closing balance	122 491 281	100 207 485	2 718 592	60 674	-	225 478 032
Net amount	13 409 262	16 169 307	132 315	-	27 750	29 738 635

The additions verified in the year of 2018 essentially consist of the acquisition of new gaming equipment with a view to the partial renovation of the current slot machine park Casino da Póvoa. Thus, a total of 55 new slot machines were acquired for Casino da Póvoa. These acquisitions are part of the policy for the renewal of gaming equipment and replaced gaming equipment in the same period.

Tangible fixed assets non-revertible to the State

During the years ended December 31, 2019 and 2018, movements in Tangible fixed assets not reversible were as follows:

Year 2019 - Tangible fixed assets non-revertible to the State
	Land	Buildings and other constructions	Basic equipment	Vehicles	Office equipment	Other tangible fixed assets	Fixed assets in progress	Total
Gross amount:
Opening balance	16 513 836	61 578 288	9 596 606	20 744	1 499 669	21 618	579 550	89 810 311
Acquisitions	-	-	177 987	-	5 830	-	41 527	225 344
Adjustments / Transfers	-	-	481 939	-	-	-	(607 971)	(126 032)
Write-off	-	-	(343 433)	-	(79 049)	-	-	(422 482)
Closing balance	16 513 836	61 578 288	9 913 099	20 744	1 426 450	21 618	13 106	89 487 141
Depreciation and accumulated
impairment losses:
Opening balance	-	27 451 157	7 241 547	20 744	1 334 975	20 685	-	36 069 108
Depreciation of the year (Note 10)	-	1 262 812	759 298	-	95 006	-	-	2 117 116
Write-off	-	-	(343 375)	-	(79 049)	-	-	(422 424)
Closing balance	-	28 713 969	7 657 470	20 744	1 350 932	20 685	-	37 763 800
Net amount	16 513 836	32 864 319	2 255 629	-	75 518	933	13 106	51 723 342

The caption "Land and natural resources" and "Buildings and other constructions" consist essentially of the building and land regarding to the Casino de Lisboa, which is not reversible to the State at the end of the concession.

Transfers of tangible fixed assets in progress for firm tangible fixed assets that occurred in 2019, in the amount of 608,000 Euros, relate to the identification of players and control access equipment to the gaming areas, acquired at the end of the 2018 exercise, aiming to the implementation the Anti-Money Laundering Law, as mentioned below.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Year 2018 - Tangible fixed assets non-revertible to the State
	Land	Buildings and other constructions	Basic equipment	Vehicles	Office equipment	Other tangible fixed assets	Fixed assets in progress	Total
Gross amount:
Opening balance	16 513 836	61 578 288	8 767 910	20 744	1 481 403	21 618	197 350	88 581 149
Acquisitions	-	-	721 435	-	18 435	-	535 156	1 275 026
Adjustments / Transfers	-	-	152 956	-	-	-	(152 956)	-
Write-off	-	-	(45 695)	-	(169)	-	-	(45 864)
Closing balance	16 513 836	61 578 288	9 596 606	20 744	1 499 669	21 618	579 550	89 810 311
Depreciation and accumulated impairment losses:
Opening balance	-	26 051 345	6 850 778	20 744	1 204 287	20 685	-	34 147 839
Depreciation of the year (Note 10)	-	1 399 812	434 204	-	130 851	-	-	1 964 867
Write-off	-	-	(43 435)	-	(163)	-	-	(43 598)
Closing balance	-	27 451 157	7 241 547	20 744	1 334 975	20 685	-	36 069 108
Net amount	16 513 836	34 127 131	2 355 059	-	164 694	933	579 550	53 741 203

The additions verified in 2018 consist essentially of the acquisition of new equipment with a view to the implementation of the Anti-Money Laundering Law. Thus, equipment for tourniquets installed at the entrances to the playing areas and software for reading players' identification documents were purchased for the three casinos.

15. TAX DEDUCTIONS ON INVESTMENT

During the year ended on 31st December 2019 and 2018, the Company benefited from the following tax deductions on investments:

	Dec - 2019
	Opening	Investment	Income of the	Closing
Tax deductions on investments	Balance	year	year (Note 10)	Balance
Estoril Casino	3 180 477	147 228	(1 717 970)	1 609 735
Lisboa Casino	2 647 970	67 084	(1 449 054)	1 265 999
Póvoa de Varzim Casino	6 356 746	548 213	(1 561 297)	5 343 662
	12 185 193	762 525	(4 728 321)	8 219 396

	Dec - 2018
	Opening	Investment	Income of the	Closing
Tax deductions on investments	Balance	year	year (Note 10)	Balance
Estoril Casino	4 765 332	93 987	(1 678 843)	3 180 477
Lisboa Casino	3 870 442	126 828	(1 349 300)	2 647 970
Póvoa de Varzim Casino	6 994 822	835 248	(1 473 324)	6 356 746
	15 630 596	1 056 063	(4 501 467)	12 185 193

The attribution of tax deductions against the Special Gaming Tax payable is exclusively related to the acquisition of gaming equipment, being necessary to obtain the prior authorization of the Gaming Regulation and Inspection Service.

16. INTANGIBLE ASSETS

During the years ended on 31st December 2019 and 2018, the movement in intangible assets, as well as in the respective amortization and accumulated impairment losses, was as follows:

	Dec - 2019	Dec - 2018
	Gaming Concession	Gaming Concession
	Rights	Rights
Gross amount
Opening balance	260 662 564	260 662 572
Acquisitions (a)	12 000	-
Disposals (a)	(36 000)	-
Closing balance	260 638 564	260 662 572
Amortization and accumulated impairment losses:
Opening balance	232 601 309	222 197 422
Impairment losses of the year	4 177 014	-
Disposals (a)	(36 000)	-
Amortization of the year (Note 10)	10 400 431	10 403 895
Closing balance	247 142 754	232 601 317

Net assets	13 495 810	28 061 255

The breakdown of intangible assets on 31st December 2019 and 2018 is as follows:

	December - 2019
	Gross	Accumulated	Net
	Assets	Amortization	Assets
Estoril Gaming Concession
- Casino Estoril	153.576.455	(147.626.531)	5.949.924
- Casino Lisboa	30.000.000	(27.812.807)	2.187.193

Póvoa Gaming Concession - Casino da Póvoa	77.034.109	(71.690.444)	5.343.665
	260.610.564	(247.129.782)	13.480.782
Intangible assets - Online gaming license (a) Intangible assets - Online sports betting (a)	14.000 14.000	(1.734) (11.238)	12.266 2.762
	260.638.564	(247.142.754)	13.495.810

	December - 2018
	Gross	Accumulated	Net
	Assets	Amortization and impairments	Assets
Estoril Gaming Concession
- Casino Estoril	153 576 455	(141 676 612)	11 899 843
- Casino Lisboa	30 000 000	(25 755 664)	4 244 336

Póvoa Gaming Concession - Casino da Póvoa	77 034 109	(65 133 261)	11 900 848
	260 610 564	(232 565 537)	28 045 027

Intangible assets - Online gaming license (a)	38 000	(29 200)	8 800
Intangible assets - Online sports betting (a)	14 000	(6 572)	7 428

	260 662 564	(232 601 309)	28 061 255

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(a) The Portuguese Gaming Regulation and Inspection Service, at meetings held on July 25, 2016 and August 4, 2017, respectively, decided under the Legal Regime of Games and Online Betting (RJO), approved by Decree-Law nº 66/2015, on April 29, assign to Estoril-Sol Digital, Online Gaming Products and Services, S.A., a license to Online Gambling exploration and a license to Sports Betting exploration, which are operating under the domain www.estorilsolcasinos.pt, "ESC Online". These licenses shall be valid for an initial period of three years from the date of issue, expiring on July 24, 2019 and August 3, 2020, respectively, if not renewed, under the terms and conditions set forth in the RJO. The Group started to operate the online gaming activity through its website mentioned above on the same day of the license assignment and on August 6, 2017, respectively. During the year ended December 31, 2019, the Group renewed the license to operate online gambling, for an additional period of 3 years (Note 1), for the amount of 12,000 Euros, valid until July 24, 2022, if it is not extended under the terms and conditions set out in the RJO.

The gaming concession premium have a finite useful life, being fully amortized at the end of 2020, with respect to the gaming concession of Estoril, and at the end of 2023 with respect to the gaming concession of Póvoa de Varzim (Note 3).

Estoril Gaming Zone

The concession premium for the Estoril Gaming Zone is amortized until the year in which it expires, that is, intangible assets are being depreciated until 2020 according to the straight-line amortization method with duodecimal imputation. As of this date, the terms and conditions of the public tender's specifications for the award of the new Game concession in Estoril's permanent game zone are not yet known. The shareholder structure of Estoril-Sol (III), and the respective Board of Directors, remains expectant as to the launch of the public tender, and their intention is to compete for the new game concession for the Estoril's permanent Game Zone.

It is, therefore, in this spirit, that the Board of Directors declares itself committed to maintaining the new game concession in the game zone of Estoril, believing that the financial strength of the concessionaire, supported, if necessary, by the bank partners with whom it has always had a fruitful relationship, will be enough to continue to lead the sector of physical casino games in Portugal.

Póvoa de Varzim Gaming Zone

In the year ended on December 31, 2019, due to verified signs of impairment, as a result of the level of revenues and results verified in the Casino operated in the Gaming Zone Póvoa de Varzim, and the impacts verified by the implementation of mechanisms to identify players as a result of the application of the Anti-Money Laundering Law (Law No. 83/2017, of 18 August), as well as the expected effect of the consideration payment to the State until the end of the Concession for the said gaming area, an impairment analysis was carried out on the assets allocated to Póvoa de Varzim gambling zone.

For this purpose, based on the characteristics and nature of the activity developed, the discounted cash flow method was used, based on the financial cash flow projections until the end of the concession period. As a result of the impairment analysis, an impairment loss of 4,177,014 Euros was determined in the year ended on December 31, 2019. On December 31, 2018, as referred to in Note 3, the Group performed an assessment of the estimated recoverable amount of assets related to the concession of the Póvoa de Varzim Game Zone. The same assessment did not originate, on December 31, 2018, any impairment loss. The projections, on December 31, 2019 and 2018 were discounted with a WACC rate of 7.1%.

The revenue growth rates used were 2.4% in 2020, 2% in 2021 and 1% in 2022 and 2023.

Although the concessionary participated with other concessionaires, in a common administrative action against the Portuguese State to restore the economic and financial balance of the concession contracts, alleging, among other grounds, that the method of the determination of the consideration did not take into account significant fluctuations in revenue, which occurred in past years due to changes in consumption, which is still without evolution at the date of approval of these financial statements, the payment of the consideration was considered in the impairment analysis until the end of the concession.

17. RIGHT-OF-USE ASSETS

During the year ended on 31st December 2019, the movement in "Right-of-use assets", as well as in the respective depreciation and accumulated impairment losses, was the following:

2019
	Buildings and other constructions	Transport Equipment	Total
Gross amount:
IFRS 16 adoption on 1 January 2019 (Note 3)	28 173	495 376	523 549
New contracts	200 961	417 294	618 255
Closing balance	229 134	912 670	1 141 804
Depreciation and
accumulated impairment losses:
IFRS 16 adoption on 1 January 2019 (Note 3)	-	-	-
Depreciation of the year (Note 10)	72 622	247 999	320 621
Closing balance	72 622	247 999	320 621
Net amount	156 512	664 670	821 183

The item "Buildings and other constructions" refers to the lease agreement for the Estoril Sol Digital facilities, in Oeiras, ending in 2021 and the car parking space concession agreement, in Póvoa de Varzim, ending in 2023.

The item "Transport equipment" refers to car leases contracts used by the Company's employees, for periods between 2 to 5 years. These contracts do not foresee the existence of relevant extension or termination clauses of residual value guarantees.

18. INVESTMENT PROPERTIES

During the years ended on 31st December 2019 and on 31 December 2018, the movement in investment properties, as well as in the respective depreciation and accumulated impairment losses, was the following:

	Dec - 2019	Dec - 2018
Gross amount:
Opening balance	282.509	282.509
Clising balance	282.509	282.509

Depreciation and impairment losses:
Opening balance	94.815	89.264
Depreciation of the year	5.551	5.551
Closing balance	100.368	94.815
Net value	182.141	187.694

Investment properties is made up principally by an apartment held by Estoril-Sol (III) - Turismo, Animação e Jogo, S.A., in Monte Estoril. As of December 31, 2019 and 2018, the investment properties' book value does not differ significantly from its market value.

19. CURRENT TAX ASSETS AND LIABILITIES

The items "Current tax assets" and "Current tax liabilities" at 31 December 2019 and 2018 were made up as follows:

	Dec- 2019	Dec - 2018
Current assets:
Special Payment on Account (IRC)	22 200	34 200
	22 200	34 200
Current Liabilities:
Corporate Income Tax (IRC)	114 814	114 645
	114 814	114 645

20. INVENTORIES

On 31st December 2019 and 2018, the caption "Inventories" was broken down as follows:

	Dec - 2019			Dec - 2018
	Gross	Impairment	Net	Gross	Impairment	Net
	Amount	Losses	Amount	Amount	Losses	Amount
Goods	6 033 636	(2 737 410)	3 296 226	6 033 642	(2 737 410)	3 296 232
Finished and intermediate products	3 285 982	-	3 285 982	3 285 982	-	3 285 982
Raw materials, secondary materials and consumables	339 443	-	339 443	353 972	-	353 972
	9 659 061	(2 737 410)	6 921 651	9 673 596	(2 737 410)	6 936 186

The caption "Goods" essentially comprises a fraction of offices in Estoril and a land in Alcoitão held by the Group which is intended for resale.

The caption "Finished and intermediate products" relates to a plot of land where the old ruins of the Hotel Miramar stand.

The caption "Raw materials, secondary materials and consumables" is almost totally made up from food and drink products intended for sale in the diverse bars and restaurant areas of Estoril and Póvoa de Varzim Casinos.

21. CLIENTS AND OTHER ACCOUNTS RECEIVABLE

At 31 December 2019 and 2018, the caption "Clients and other accounts receivable" had the following composition:

	Dec - 2019	Dec - 2018

Customers current account	422 360	543 096
Impairment	(22 961)	(35 412)
	399 399	507 684

Customers doubtful debts	2 334 320	2 334 689
Impairment	(2 334 320)	(2 334 689)
	-	-

	399 399	507 684

"Customers current accounts" relate with the activities of entertainment and restaurants. These are subject to evaluation by the Group credit control, being all debts are subject to impairment losses according to the expected credit losses model. On 31 December 2019 and 2018 there were no outstanding balances receivable for periods of 6 months or more that did not have an impairment.

The Group does not grant credit in its gaming activity, although there are situations where amounts might not be received, related with the means of payment used. Whenever an unfunded cheque is detected related with the gaming activity, a provision is immediately set up for the full amount, irrespective of the efforts for its collection that may be made in the future in order to effectively receive the amounts in cash.

Reinforcements/reversals of impairment losses in the years ended December 31, 2019 and 2018 amount to 19,855 Euros (reversal) and 32,849 Euros (reinforcement), respectively.

22. OTHER CURRENT ASSETS

At 31 December 2019 and 2018, the caption "Other current assets" had the following composition:

	Dec- 2019	Dec - 2018
Advance payments to suppliers Accounts Receivable from related parties (Note 34)	163 764 171 061	162 280 1 869 485
Deferrals: Insurance Fees with maintenance, techical assistance and licences Other deferrals	454 605 287 262 78 485	322 502 115 048 79 244
Commercial areas renters Withholding and guarantee deposits Other accounts receivable	221 939 302 066 394 768 2 073 950	348 492 256 427 209 259 3 362 737

23. CASH AND CASH EQUIVALENTS

At 31 December 2019 and 2018, this caption had the following composition:

	Dec- 2019	Dec - 2018
Cash	8 092 016	7 736 393
Bank Deposits: - Immediately avaiable bank deposits - Long term deposits (a)	59 954 191 14 999 964	33 233 971 12 500 000
Cash and cash equivalents	83 046 171	53 470 364

(a) Relating to bank deposits that may be immediately mobilized with risk of loss of interest.

In the years ended 31 December 2019 and 2018, the Group recorded the following non-monetary investment and financing transactions that are not reflected in the consolidated statement of cash flows:

• The Group acquired assets through lease contracts, as disclosed in Notes 17 and 26, in the amount of approximately, 618,000 Euros;

• The Group acquired fixed assets which had not yet been settled at the date of the financial position in the amount of approximately 313,000 Euros (632,000 Euros in 2018).

24. CAPITAL

Estoril-Sol, SGPS., S.A., an issuer of securities ("shares") admitted to trading on a regulated market, as at December 31st, 2019 and 2018, has a share capital of 59,968,420 Euros (fifty nine million, nine hundred and sixty eight thousand, four hundred and twenty euros), represented by 11,993,684 registered shares (ISIN Code PTESO0AM0000), with a unit par value of five Euros each.

Treasury shares

The treasury shares were acquired by the Company as follows:

Year of Acquisition	No.of shares	Nominal value	Total nominal	Total premiums	Total

2001	34.900	5	174.500	280.945	455.445
2002	43	5	215	184	399
2007	22	5	110	88	198
2008	27.600	5	138.000	114.264	252.264

Total	62.565		312.825	395.481	708.306

As a result of the treasury shares acquired, a reserve of 708,306 Euros was made unavailable, which was included under "Other reserves and retained earnings".

Legal persons with a stake of over 20% in the share capital on 31 December of 2019 and 2018:

Finansol, Sociedade de Controlo, SGPS, S.A., with 57.79% (a)
Amorim Entertainment e Gaming International, SGPS, S.A., with 32.67%
(a) This entity is controlled by the Macau Tourism and Entertainment Society (STDM, headquartered in Macau).

Share issue premiums

Other reserves and retained earnings

At the General Shareholders' Meeting held on May 29, 2019 and May 26, 2018, the results for the years ended December 31, 2018 and 2017 were applied as follows:

	2019	2018
Legal reserve	687 606	533 750
Other reserves and retained earnings	7 369 730	4 078 519
Other variations in equity	694 785	1 472 739
Dividends (a)	5 000 000	4 590 000
	13 752 121	10 675 008

25. NON-CONTROLLING INTERESTS

On 31 th December 2019 and 31st December 2018, the caption "Non-controlling interests" was broken down as follows:

		Dec - 2019			Dec - 2018
		Profit /			Profit /
	Opening balance	(Loss) of the period	Dividend distribution	Closing balance	Opening balance	(Loss) of the period	Dividend distribution	Closing balance
Estoril-Sol Digital, Online Gaming
Products and Services, S.A.	3 513 973	4 584 608	(1 620 517)	6 478 063	3 268 850	2 315 302	(2 070 179)	3 513 973

The activity of Estoril-Sol Digital began with the attribution of the license to operate games of change online in July 2016. The scope of the activity of exploring online games, which it intends to carry out through its subsidiary Estoril-Sol Digital, Online Gaming Products and Services, S.A., Estoril-Sol (III) Animação e Jogo, S.A., a company held by the issuer, entered into an association agreement in July 2016 with Vision Gaming Holding Limited, based in Malta, whereby it became the holder of a minority interest, corresponding to 49.9998% of the capital stock of Estoril-Sol Digital, while Estoril-Sol (III) S.A. holds a majority of the capital and voting rights in said company. The association agreement foresaw the investment in the capital of Estoril-Sol Digital corresponding to 50% with the renewal of the online casino license, which happened on July 24, 2019. As at December 31, 2019, Estoril Sol (III) and Vision Gaming Holding Limited both hold a share corresponding to 50% of Estoril Sol Digital's equity. Nevertheless, Estoril Sol (III) maintains the right to nominate the Board of Directors Chairman, allowing the Group to have the control of the operations of Estoril Sol Digital.

26. LEASE LIABILITIES

Disclosure required with IFRS 16

As of December 31, 2019, the maturity of amortizations falling due for lease contracts expires as follows:

	2019
2020	374 598
2021	260 945
2022 and following	194 564
	830 107

As a result of the adoption of IFRS 16 referred to in Note 3, this item increased, on 1 January 2019, by the amount of 830,107 Euros.

Disclosure required by IAS 17

The Group is the lessee in operational lease contracts related with motor vehicles, which are denominated in Euros.

As of December 31, 2018 the following future liabilities for the Group resulted from the operating leases of vehicles, for which, in the year ended on that date, the minimum lease payments amounted to Euro 670,599 Euros.

From these contracts result the following future responsibilities for the Group:

Dec - 2018
	Operational
	Leasing	Total

Up to 1 year	289 473	289 473
Between 1 year and 5 years	381 126	381 126
	670 599	670 599

Reconciliation of liabilities resulting from financing activities:

The changes in the Group's liabilities resulting from financing activities, both cash and non-cash, are presented below. Liabilities resulting from financing activities are those whose cash flows have been, or will be, classified as financing in the consolidated cash flow statement:

Reconciliation of liabilities arising from financing activities
			Financing	New leasing
	Balance at 31	Adoption IFRS 16	Cash	contracts	Others	Balance at 31 de
	Dez-2018	(Note 3)	Flows (i)	(Note 17)	(ii)	Dez-2019

Lease liabilities	-	523 549	(329 176)	618 255	17 479	830 107
		523 549	(329 176)	618 255	17 479	830 107

(i) The cash flows resulting from the lease liabilities make up the payment amounts related to the Amortization of lease liabilities in the consolidated cash flow statement.
(ii) This caption includes the net effect of the financial discount referring to payments made to creditors per lease.

27. PROVISIONS

The movement in the provisions accounts in the years ended on 31st December 2019 and 2018 is as follows:
	Balance				Balance
	Dec - 2018	Increases	Reversals	Utilizations	Dec - 2019
Provisions for pensions	3.066.901	352.000	-	(52.375)	3.366.526
Legal proceedings in hand	5.886.661	624.995	(41.440)	-	6.470.216
Other risks and charges	69.866	-	-	-	69.866
	5.956.527	624.995	(41.440)	-	6.540.082
	9.023.428	976.995	(41.440)	(52.375)	9.906.608


	Balance				Balance
	Dec - 2017	Increases	Reversals	Utilizations	Dec - 2018
Provisions for pensions	2.981.276	138.000	-	(52.375)	3.066.901
Legal proceedings in hand	4.834.919	2.759.838	(563.988)	(1.144.108)	5.886.661
Other risks and charges	547.841	-	(456.718)	(21.257)	69.866
	5.382.761	2.759.838	(1.020.706)	(1.165.365)	5.956.527

Provisions for pensions / Post-employment benefits

The Articles of Association of the Company approved in the General Meeting of 29 May 1998, stipulate in article 36, the right to a retirement pension paid by the company to the former directors who had already retired, based on the previous article 25 of the Articles of Association that were then altered, and the same rights and benefits as those to the directors, in office at that time, who had or would come to complete ten years of service - after entering retirement - rights and benefits to be regulated in a contract to be agreed between the Company and these directors.

At December 31, 2019 and 2018, these studies were carried out using the "Projected credit unit" method and considered the following key assumptions and technical and actuarial bases at that date:

	2019	2018

Discount rate	0,9%	1,5%
Rate of growth of pensions	0,00% p.a.	0,00% p.a.
Mortality table
- Before retirement	n.a	n.a.
- After retirement	GKF95	GKF95
Invalidity table	n.a	n.a.
Table of departures	n.a	n.a.
Retirement age	01/jan/21	01/jan/21

In the years ended December 31, 2019 and 2018, the movement in the value of the liabilities was as follows:

	Dec - 2019	Dec - 2018

Present value of the defined benefit obligation at beggining of the year:	3 066 901	2 981 276
Benefits paid	(52 375)	(52 375)
Post-employment benefits (Note 9)	131 000	131 000
Actuarial gains and losses	221 000	7 000
Present value of the defined benefit obligation at the end of the year:	3 366 526	3 066 901

At 31 December 2019, the impact of a discount rate reduction of 0.5%, used in the actuarial calculation, would correspond to an increase in the present value of liabilities by approximately 123,000 Euros.

The provision for legal proceedings in progress is intended to meet the estimated liabilities based on information from legal advisors arising from legal proceedings brought against the Group, whose information is detailed in Note 29.

Provisions in the year ended on December 31, 2019 correspond, essentially, to liabilities arising from the following processes:

Collective dismissal, 3,337,000 Euros;
Economic and financial rebalancing, 1,250,000 Euros;
Gastronomic Evolution, 907,000 Euros;
Clients forbidden, 380,000 Euros;
Jackpot, 200,000 Euros.

The remaining judicial proceedings are essentially related to the labor process of the 7th day, in Varzim-Sol, associated with the complementary rest allowed to employees, attempted by a group of employees.

At that date, taking into account the uncertainties inherent in this type of proceedings, the current liability resulting from these settlements was estimated based on the opinions of the Group's legal advisors and based on the arguments presented by the Group in the respective claims, considering the estimated timing of payment, which depends on judicial developments of the respective proceedings.

During the year of 2019, the reinforcements and reversals of provisions refer essentially to the collective dismissal processes related to Casino da Póvoa de Varzim.

28. OTHER CURRENT AND NON-CURRENT LIABILITIES

The caption "Other current liabilities" and "Non-current liabilities" in the years ended on 31 December 2019 and 2018 were as follows:

	Dec - 2019	Dec - 2018
Other accounts payable - non-current
Annual payment - Difference to minimum consideration
Installments payment schedule - approved for 2014 (a)	1.244.808	2.489.616
	1.244.808	2.489.616
Other accounts payable - current
Current suppliers	6.712.173	8.796.236
Suppliers of investments	312.522	632.306
State and Public Sector
Annual gaming consideration	21.301.642	20.049.726
Annual payment - Difference to minumum consideration (Note 6)
Related to the year (Note 31)	5.032.562	4.098.106
Related to 2014	1.244.808	1.244.808
Special Gaming Tax (Note 31)	7.709.047	7.628.735
Social Security contribuitons	767.046	777.169
Other in favour of the State	782.061	1.103.788

Clients advance payments (b)	1.531.692	1.396.129

Charges with holidays payable	4.469.487	5.280.394
Responsabilities for accumulated gaming premiums (c)	2.185.508	2.102.089
Other	2.823.985	3.236.797
	54.872.533	56.346.283

(a) These amounts are defined in payment plans approved by the Gaming Regulation and Inspection Service of Tourism of Portugal (SRIJ), which were being complied with, as follows:

• Payment plan approved and in accordance with prior authorization from the Gaming Regulation and Inspection Service of Tourism of Portugal related to the minimum annual counterpart of the year 2014. This plan will be paid in three successive annual instalments of 1,244,808 Euros, with the first being due on 31 December 2019.

(b) Customer advances respect to the online business, and correspond to the balance available for play or withdrawal on December 31, 2019.
(c) This caption relates to liabilities for accrued gambling bonuses, resulting from the accrued bonuses announced in the various casinos explored by the Group.

As of December 31st, 2019, "Other accounts payable" includes accounts payable to related entities, ICE Elite Ltd and GAMING ONE Limited, in the total amount of 278,951 Euros. In addition, on December 31, 2019, "Other" includes expenses related to the operations of Estoril Sol Digital with related entities ICE Elite Ltd. and GAMING ONE Limited, amounting to a lump sum of Euro 569,781 Euros (2,628,293 Euros in 2018).

29. CONTINGENT LIABILITIES AND ASSETS, GUARANTEES AND COMMITMENTS

Contingent liabilities

In the normal course of its business, the Group is involved in several legal proceedings. In result of their nature and provisions and according to the opinion of legal advisors, the expectation is that, from the respective outcome, there will be no material effects that are not yet recognized in the financial statements as of December 31, 2019 and 2018. The most relevant processes are as follows:

Differences of understanding between the Group and the Tax Administration, regarding the taxation of Corporate Income Tax (IRC), relating to 2007, 2008, 2009 and 2010, in light of non-taxation of documented expenses incurred in the course of gambling activity by the subsidiaries that are part of the Group which have gambling activity in the amount of, approximately, 5,629,000 Euros. In the course of the financial year of 2013, a ruling was issued against the allegations and convictions of the Group regarding the proceedings relating to the years 2007 to 2009. The Group is convinced, based on the most diverse opinions and favourable opinions of its legal advisors, that the allegations and claims of the Group are well founded, which is why an appeal was filed against this decision to higher courts.

Additionally, as of the date of these financial statements, there are prior judicial decisions in favour of the Group, as well as favourable judicial jurisprudence on this matter. Nevertheless, bank guarantees were provided in favour of the Cascais Finance Department in the amount of 7,197,635 Euros. The Group's Board of Directors, based on the above, and based on the opinion of its legal and tax advisors, considers only to be possible and unfavourable outcome for the Group although not probable, and therefore no provision was recorded in the financial statements for the year.

The Group carried out a collective dismissal in 2010 and 2013 in the Casinos of Lisbon, Estoril and Póvoa de Varzim in the terms established in the Law, which included 133 employees. Some of these employees brought up an action to the Court for annulment of the dismissal and reinstatement within the Group. On December 31, 2018, the collective dismissal process regarding the Casinos of Lisbon and Estoril culminated in a favorable decision for the Group, with the exception of five employees, who were reinstated in the Group's staff. The remaining employees received compensation corresponding to the legal obligations provided for in labor legislation in case of collective redundancies, in line with the provision recorded in the Group's accounts in the previous years. In addition, during the year ended December 31, 2018, the collective dismissal process regarding Casino da Póvoa presented an unfavourable decision to the Group, having the Group filed an appeal of the decision. The Group increased the provision in 600.000 Euros during 2019 to cover its responsibility, taking into account the legal opinions of its lawyers, which amounts to approximately 3,337,000 Euros as of December 31, 2019 (Note 27). As a result of the appeal referred above, in february 2020, the Court of Relation of Guimarães judged partially favourable the appealing, absolving the Group regarding the request of four of the authors.
In 2011 Gastronomic Evolution - Gestão de Restaurantes, Lda., a former concessionaire of three restaurants in Casino de Lisboa, filed a lawsuit against the Group requiring compensation for loss of customers in relation to expectations that would have been previously generated. The total amount claimed amounts to 906,630 Euros, which is provisioned in the financial statements as of December 31, 2019 and 2018 (Note 27).

On 31 December 2019 and 2018, the Group has been involved in various cases associated with interdicted players, alleging that the concessionaires have not complied with the prohibition order, at the entrance of the various Casinos operated, to which the same customers were subject, demanding a claim for compensation for the alleged non-compliance. The Board of Directors, based on the opinion of its legal advisors and in view of the historic resolution of such cases, recognized in the financial statements as of December 31, 2019 and 2018, liabilities estimated at 380,000 Euros and 373,000 Euros, respectively (Note 27).
In January 2009, a machine from Casino de Lisboa announced a fake Jackpot on a gaming machine of 4,232,774 Euros, and the customer involved, despite being informed about the machine error, filed a lawsuit against the Group to demand the referred amount. The Board of Directors, supported by its legal advisors and the expert evidence prepared by the suppliers of those machines and by the Gaming Regulation and Inspection Service, where it is concluded that there has been a malfunction of the computer system which presented the prize, considers it is probable to obtain a favorable outcome for the Group, for which only a provision of approximately 200,000 Euros was recorded (Note 27).

Contingent assets

In January 2013, the Group, together with other gambling concessionaires with gambling in Portugal, filed a lawsuit against the Portuguese State in order to restore the economic and financial rebalancing of the concession. This process includes the challenges of monthly special income taxes and the annual liquidations of 2012 to 2013, and the liquidations of the annual counterparts from 2014 to 2017, all settled in accordance with Decree-Law - nº 275/2001, so that, in the opinion of the legal and tax advisors of the Group, in the case of favourable decision on the referred objections, the liquidations will be refunded plus interest. In September 2016, the Administrative and Fiscal Court of Sintra ruled in favour of the Group on the unlaw-fulness of the clearance of the income tax payment of October 2013 on automatic machines and charged the Group with its share of responsibility for the value of court expenses, which for the actions involved in this proceeding were estimated as of approximately, 2,501,000 Euros. The Board of Directors, supported by the opinion of its legal and tax advisors, recognized the corresponding liability, considering the complaint presented on the amount of these court expenses, in the amount of 1,250,000 Euros (Note 27).

Guarantees provided

On 31st December 2019 and 2018, the guarantees provided by the Group were as follows:

	Dec - 2019	Dec - 2018
Obligations related with the Special Gaming Tax Tax lawsuits in hand / litigation Current suppliers	26 483 983 8 894 368 39 250	26 577 964 7 443 083 39 250
	35 417 601	34 060 297

30. FINANCIAL INSTRUMENTS

As of 31 December 2019 and 2018, the main financial assets and liabilities, recorded at amortized cost, were as follows:

	2019	2018
Financial assets:
Receivables	1.720.902	3.434.733
Cash and cash equivalents (Note 23)	83.046.171	53.470.364
	84.767.073	56.905.097
Financial liabilities:
Payables	56.117.341	58.835.899
Lease liabilities (Note 26)	830.107	-
	56.947.447	58.835.899

In what concerns to current accounts receivable and account payable and cash and cash equivalents, the Group considers, in the light of specific characteristics of these financial instruments, that the fair value does not differ significantly from their book value, therefore it is not necessary, under the terms of IFRS 13 to present its fair value by measurement levels.

In the normal course of its activity the Estoril-Sol Group is exposed to a variety of financial risks that can change its asset value. Financial risk is understood to be the probability of obtaining results other than those expected, whether these be positive or negative, materially and unexpectedly changing the asset value of the Group.

In order to minimise the potential impact of these risks, the Group adopts a strict and consistent financial policy based on two vitally important instruments:

approval of the annual budget and the respective analysis of deviations on a monthly basis, and;
the elaboration of financial and cash-flow planning, which is also analysed on a monthly basis.

The financial risks which can possibly impact on the activities undertaken by the Group are those presented below:

Liquidity risk:

The management of the liquidity risk is based on maintaining an adequate level of available cash and on the contracting of credit limits that help not only to ensure the normal development of the Group's activities but also to cater for any operations of an extraordinary nature.

According to the monetary resources freed up by the companies that comprise the Group, we feel the financial risk to which the Group is exposed is minimal, and the same understanding has prevailed in the examination carried out by financial institutions, as shown by the fact that asset guarantees are dispensed with for operations under contract, further reinforced by the no less relevant fact that over the years the Group has been successively reducing its financial liabilities, thereby complying with the commitments assumed.

	2019
Financial liabilities	Up to 1 year	1 to 2 years	+ 2 years	Total
Remunerated:
Lease liabilities	392.077	401.301	36.729	830.107
Trade and other payables	1.244.808	1.244.808	-	2.489.616
Not Remunerated:
Trade and other payables	53.627.725	-	-	53.627.725
	55.264.610	1.646.109	36.729	56.947.447

		2018
Financial liabilities	Up to 1 year	1 to 2 years	+ 2 years	Total
Remunerated:
Trade and other payables	1 244 814	1 244 814	1 244 814	3 734 442
Not Remunerated:
Trade and other payables	55 101 457	-	-	55 101 457
	56 346 271	1 244 814	1 244 814	58 835 899

Financial liabilities at 31 December 2019 and 2018 mature as follows:

Interest rate risk

The Group's exposure to the interest rate risk is diminished as a result of the inexistence of bank loans, on December 31, 2019, established at variable rates. A change in the market rates has a direct impact on the value of the interest received and/or paid, causing consequent variations in cash.

If the market interest rates had been 1% higher during the years ended on 31st December 2019 and 2018, the financial costs of those years would have increased by approximately 37,000 Euros and 59,000 Euros, respectively.

Exchange rate risk

All operations are carried out in Euros, with the exception of some current imports, which periods of no more than 45 days, which are conducted in US Dollars, and so the Group has only minimal exchange rate exposure.

Credit risk:

monitor the evolution of the level of credit granted;
to analyze the financial capability of related parties on a regular basis.

The Company's financial assets relate primarily to short-term related party accounts receivable for which it adopts the expected 12-month loss model.

(iv) Significant increase in credit risk

In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:

• existing or forecast adverse changes in business, financial or economic conditions that are expected

to cause a significant decrease in the debtor's ability to meet its debt obligations;

• significant deterioration in the operating results of the debtor;

A financial instrument is determined to have low credit risk if:

(1) The financial instrument has a low risk of default,

(2) The debtor has a strong capacity to meet its contractual cash flow obligations in the near term, and

(3) Adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

(v) Definition of default

when there is recurring a breach of payment terms by the debtor; or
information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full (without taking into account any collateral held by the Group).

(vi) Write-off policy

31. EVENTS AFTER THE BALANCE SHEET DATE

During the first quarter of 2020, the Group paid 26,334,204 Euros related to the annual payment of the Special Gaming Tax, and 7,709,047 Euros related to the Special Gaming Tax relating to the period of December of 2019 (Note 28).

The temporary closure of the referred casinos was determined, after the mentioned closure required by the Group, under the imposition of Decree 2-A / 2020, which was extended by the imposition of Decrees 2-B / 2020 and 2-C / 2020, remaining active, on this date, the online operations. As a result, as the end date of the closure measure is not yet known, the extent of the impact on the Company's future financial position will depend on the evolution of the referred Pandemic, or the measures that may be adopted and on the global evolution of the economy during this period.

In this context, the subsidiaries Estoril-Sol (III) and Varzim-Sol decided to resort, with effect from 10th April 2020, to the "Simplified Lay-off" measure provided by Decree-Law no. 10-G / 2020, of March 26th, resulting in the temporary suspension of work contracts or in the reduction of employees working hours of the referred entities. Additionally, the existing "Contingency Plans" were activated, in order to preserve the health of employees, providers of external services and safeguard assets allocated to the operations. A series of measures were also adopted to adapt the cost structure to the current situation, namely related to surveillance, reception and F&B areas, maintenance and cleaning, fees and commissions directly related to the gambling activity.

In this way, the duration of the referred closure, as well as any additional measures that might be taken by the Portuguese authorities regarding the containment of Covid-19 and those relating to the temporary closure of physical casinos under the respective concession contracts, will be decisive for the future realization value of the assets of the Company's subsidiaries, being however, the future impacts for the Company arising from this situation uncertain. Despite, according to the information available on this date, the Board of Directors, which is currently evaluating the measures taken to mitigate the referred impact, based on the financial capacity of the Group, which presents "Cash and its equivalents", as of 31 December 2019 of approximately, 83 Million Euros, considers that the assumption of continuity, used in the preparation of the Group's financial statements as of December 31st, 2019, remains appropriate on the present date.

32. CONSOLIDATED RESULTS PER SHARE

The consolidated result per basic and diluted share of the years ended on 31st December 2019 and 2018 was determined as follows:

	Dec - 2019	Dec - 2018
Results: Net profit of the Equity holders of the Parent Company	14.087.567	13.752.121
Number of shares: Average weighted number of shares in circulation (Note 24)	11.931.119	11.931.119
Result per basic share, basic and diluted	1,18	1,15

Due to the fact that there are no situations that cause dilution, the net result per diluted share is the same as the net result per basic share.

33. REMUNERATION OF THE KEY MEMBERS OF THE COMPANY

Remuneration of the key members of the Group in the years ended 31 December 2019 and 2018 amounted to 2,353,000 Euros (Note 9) exclusively related to fixed remuneration.

34. RELATED PARTIES

The balances as of December 31, 2019 and 2018 and the transactions carried out with related companies, excluded from consolidation, in the years then ended, are as follows:

	2019			2018
	Other	Other		Other	Other
	current	current		current	current
	assets	liabilities	Suppliers	assets	liabilities
Related party	(Note 22)	(Note 28)	(Note 28)	(Note 22)	(Note 28)
- Finansol - Sociedade de Controlo, SGPS, S.A.	171 061	-	-	169 485	-
- Vision Gaming Holding Limited	-	-	-	1 700 000	-
- ICE Elite Limited	-	214 606	139 204	-	1 715 626
- Gaming One Limited	-	354 175	139 747	-	912 667
	171 061	568 781	278 951	1 869 485	2 628 293

	Supplies and services (Note 8)
Related Parties	2019	2018
- ICE Elite Limited - Gaming One Limited	1 746 582 1 301 188 3 047 770	1 849 533 739 909 2 589 442

As of December 31, 2019 and 2018, the balances and transactions with related entities ICE Elite, Ltd. and GAMING ONE, Limited essentially refer to expenses incurred with the maintenance of the online gaming platform and commissions (Note 8).

35. STATUTORY AUDITOR'S FEES

The statutory auditor's fees in 2019 and 2018 were 123,000 Euros, plus VAT at the current rate, and are exclusively related to legal review and auditing of the Company's separate and consolidated financial statements. Additionally, on December 31, 2019, other services were provided by entities of the Statutory Auditor network, in the amount of 15.000 Euros.

36. NOTE ADDED FOR TRANSLATION

The accompanying consolidated financial statements are a translation of consolidated financial statements originally issued in Portuguese, in accordance with IFRS. In the event of discrepancies, the Portuguese version prevails.

This page is deliberately left blank

STATUTORY AUDITOR'S REPORT AND AUDITOR'S REPORT

STATUTORY AUDITOR'S REPORT

AND

AUDITOR'S REPORT

Deloitte & Associados, SROC S.A. Registo na OROC nº 43 Registo na CMVM nº 20161389 Av. Eng. Duarte Pacheco, 7 1070-100 Lisboa Portugal

Tel: +(351) 210 427 500 www.deloitte.pt

STATUTORY AUDITOR'S REPORT AND AUDITOR'S REPORT

(Free translation of a report originally issued in Portuguese language: In case of doubt the Portuguese version will always prevail)

REPORT ON THE AUDIT OF THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying consolidated and separate financial statements of Estoril-Sol, SGPS, S.A. ("the Entity") and its subsidiaries ("the Group"), which comprise the consolidated and separate statements of the financial position as of December 31, 2019 (showing a total of Euro 170,550,210 and Euro 114,501,481, respectively and total equity attributable to the shareholders of the parent company of Euro 97,103,278, including a net profit of Euro 9,910,553), the consolidated and separate profit and loss and other comprehensive income statements, the consolidated and separate statements of changes in equity and the consolidated and separate cash flow statements for the year then ended, and the accompanying notes to the consolidated and separate financial statements, which include a summary of the significant accounting policies.

In our opinion, the accompanying consolidated and separate financial statements give a true and fair view, in all material respects, of the consolidated and separate financial position of Estoril-Sol, SGPS, S.A. as of December 31, 2019 and of its financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted in the European Union (IFRS).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and further technical and ethical standards and guidelines as issued by Ordem dos Revisores Oficiais de Contas (the Portuguese Institute of Statutory Auditors). Our responsibilities under those standards are described in the "Auditor's responsibilities for the audit of the consolidated and separate financial statements" section below. We are independent from the entities that constitute the Group in accordance with the law and we have fulfilled other ethical requirements in accordance with the Ordem dos Revisores Oficiais de Contas code of ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Deloitte & Associados, SROC S.A. Registo na OROC nº 43 Registo na CMVM nº 20161389

Page 2 of 7

Emphasis

As mentioned in Notes 1 and 2 to the consolidated and separate financial statements, the term of the current concession contracts for the exclusive exploration of Estoril and Póvoa de Varzim gaming zones ceases on December 31, 2020 and 2023, respectively. Furthermore, subsequent to the World Health Organization's declaration of Pandemic, related to Coronavirus 2019 disease (Covid-19), as mentioned in Notes 31 and 27 of the consolidated and separate financial statements, respectively, on March 14, 2020, in the scope of Covid-19's containment efforts, the physical casinos of Estoril and Póvoa de Varzim gaming zones were temporarily closed, with the operations related to online gambling remaining active at this date, being uncertain the future impacts for the Group resulting from this situation. In this context, on April 10, 2020, the Group communicated its decision to resort to the "Simplified Lay-off" measure provided by Decree-Law No. 10-G /2020, of March 26. The result of the concession granting process of the referred exploration beyond those dates, under the terms to be stipulated by the State, the duration of said closure, as well as any additional measures that may be adopted by the Portuguese authorities in relation to the containment of Covid -19 and those relating to the temporary closure of the physical casinos, within the scope of the respective concession contracts, will be decisive for the future realization value of Group assets, with the Entity's Board of Directors having concluded, based on the Group's financial capacity and in the remaining information available, that the going concern assumption used in the preparation of the consolidated and separate financial statements of the Entity as of December 31, 2019, remains appropriate. Our opinion is not modified with respect to these matters.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on those matters.

Page 3 of 7

Description of the most significant risks of material misstatement identified	Summary of the auditor's responses to the most significant assessed risks of material misstatement
Revenue recognition of physical slot machine and	Our procedures to mitigate this risk included:
table gaming and online gambling and sports betting	 Evaluate the adopted gaming revenue recognition policy by reference to the applicable
The Group's recognized physical slot machine and table gaming revenue amounting to Euro 192,391,000 (Note 6 of the consolidated financial statements) results from the daily calculation made in each casino of a significant volume of transactions. Additionally, the Group's recognized online gambling and sports betting revenue amounting to, approximately, Euro 38,744,000 (Note 6 of the consolidated financial statements), results from the manual integration of the calculation performed on the online gambling and sports betting supporting platform, of a significant volume of transactions. Although this calculation is carried out with the daily supervision of the Gaming Regulation and Inspection Service, as a result of the volume of transactions mentioned, the referred manual integration and although the revenue recognition does not require significant judgments in its calculation, we considered the risk that not all transactions being completely captured is a key	accounting standards;  Obtain an understanding of the process of calculating the gaming revenue and its relevant controls;
	 Tests on implemented controls considered relevant related to the recognition of gaming revenue;
	Assessment of the proper integration of the  online gambling and sports betting revenue;
	 Substantive analytical review tests based on the gaming tax/ annual consideration calculated by the Gaming Regulation and Inspection Service;
	 Analyze the daily evolution of gaming revenue and tests of detail of a sample of the computed daily revenue;
	Test the bank reconciliations carried out by the  Group and reported as of December 31, 2019;
audit matter.	 Monitor the annual process of physical inventory of fixed cash funds.
Impairment of assets related to Póvoa de Varzim	Our procedures included:
gaming zone As mentioned in Notes 3 and 16 of the consolidated financial statements (Notes 3 and 11 of the separate	 Testing the controls considered relevant, implemented in the Group related to the impairment analyzes carried out;
financial statements), the Group that operates the Póvoa de Varzim gaming area, as a result of its level of revenues and results verified in 2019, as well as the expected effect of the consideration to be paid to the State until the end of the concession of that gaming area (Note 6 of the consolidated financial	 Measurement of the reliability of the estimates made by management, by reference to historical information and by comparison of the subsequent performance with the estimates made;
statements) performed an impairment analysis of the respective assets. As a result of the referred analysis, the Group recognized impairment losses in	 Analyze the arithmetical reasonableness of the financial projections of discounted cash flows used by management;
the amount of approximately Euro 4,177,000. In view of the subjectivity and complexity of the judgments necessary to define the assumptions	Comparison of relevant information considered in  the financial projections of discounted cash flows with the available budgets;
used in determining the recoverable value of those assets, we conclude that the impairment analysis carried out is a relevant matter for the audit.	 Test the adequacy of the disclosures made.

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Litigation processes

Management periodically evaluates any liabilities arising from past events, the probability of which implies the recognition of a provision and/or disclosure in the financial statements. As mentioned in Note 27 of the consolidated financial statements and in Note 7 of the separate financial statements, on December 31, 2019, the Entity recognized provisions to meet estimated liabilities with existing litigation in the referred financial statements in the amount of, approximately, Euro 6,500,000 and Euro 1,250,000, respectively. In view of the recorded amount of provisions related to the number of litigation processes currently in progress and the high degree of judgment involved in the assessment and determination of the provisions to be recognized, as well as the disclosures to be made, we consider that this is a key audit matter.

Our procedures included:

Evaluate the adopted policy for recognition of provisions with litigation, by reference to the applicable accounting standards;
Test the implemented controls considered relevant;
Obtain confirmations from legal and tax consultants regarding the processes they are monitoring, as well as their evolution and status;
Discuss with management and its legal advisors the assumptions and arguments that support the assessment made by management of the prospective outcome of the referred litigation;
Evaluate the reasonableness and sufficiency of the disclosures included in the financial statements.

Responsibilities of management and supervisory body for the consolidated and separate financial statements

Management is responsible for:

the preparation of consolidated and separate financial statements that give a true and fair view of the Entity and the group of companies included in the consolidation financial position, consolidated and separate financial performance and consolidated and separate cash flows in accordance with International Financial Reporting Standards as adopted in the European Union (IFRS);
the preparation of the management report and the corporate governance report, in accordance with applicable laws and regulations;
designing and maintaining an appropriate internal control system to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error;
the adoption of accounting policies and principles appropriate in the circumstances; and
assessing the Entity and Group's ability to continue as a going concern, disclosing, as applicable, the matters that may cast significant doubt about the ability to continue as a going concern.

The supervisory body is responsible for overseeing the Entity's financial reporting process.

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Auditor's responsibilities for the audit of the consolidated and separate financial statements

Our responsibility is to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, separately or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity and the Group's internal control;
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the Entity to cease to continue as a going concern;
evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether those financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion;
communicate with those charged with governance, including the supervisory body, regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit;
determine, from the matters communicated with those charged with governance, including the supervisory body, those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter;

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provide the supervisory body with a statement that we have complied with relevant ethical requirements regarding independence, and communicate all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Our responsibility also includes the verification that the information contained in the management report is consistent with the consolidated and separate financial statements and the verification of the requirements as provided in numbers 4 and 5 of article 451.º of the Portuguese Companies' Code, as well as the verification that the consolidated non-financial statement was presented.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

On the management report

Pursuant to article 451.º, number 3, al. e) of the Portuguese Companies' Code ("Código das Sociedades Comerciais"), it is our opinion that the management report was prepared in accordance with the applicable legal and regulatory requirements and the information contained therein is consistent with the audited consolidated and separate financial statements and, having regard to our knowledge and assessment over the Group, we have not identified any material misstatements. As referred in article 451º, number 7, of Código das Sociedades Comerciais, this opinion does not apply to the consolidated non-financial statement included in the management report.

On the corporate governance report

Pursuant to article 451.º, number 4, of the Portuguese Company's Code ("Código das Sociedades Comerciais"), we conclude that the corporate governance report includes the elements required to the Entity under the terms of article 245.º-A of the Portuguese Securities Code ("Código dos Valores Mobiliários"), and we have not identified any material misstatements on the information disclosed therein, which, accordingly, complies with the requirements of items c), d), f), h), i) and m) of that article.

On the consolidated non-financial information referred to in article 508.º-G of the Commercial Companies Code

In compliance with article 451.º, number 6, of the Portuguese Company's Code ("Código das Sociedades Comerciais"), we inform that the Entity included in its management report the consolidated non-financial statement, as stated in article 508.º-G of the Código das Sociedades Comerciais.

On the additional matters provided in article 10 of Regulation (UE) 537/2014

Pursuant to article 10 of Regulation (UE) 537/2014 of the European Parliament and of the Council of April 16, 2014, in addition to the key audit matters mentioned above, we also report on the following:

We were appointed auditors of the Entity for the first time at the general meeting of shareholders held in May 26, 2017 for a first mandate from 2017 to 2020.
Management has confirmed to us that they are not aware of any fraud or suspicion of fraud having occurred that has a material effect on the financial statements. In planning and executing our audit in accordance with ISAs, we maintained professional skepticism and we designed audit procedures to respond to the risk of material misstatements in the consolidated and separate financial statements due to fraud. As a result of our work, we have not identified any material misstatement on the consolidated and separate financial statements due to fraud.

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We confirm that the audit opinion issued is consistent with the additional report that we prepared and delivered to the Entity's supervisory body as of April 30, 2020.
We declare that we have not provided any prohibited services as described in article 77, number 8, of the Ordem dos Revisores Oficiais de Contas statutes (Legal Regime of the Portuguese Statutory Auditors) and we have remained independent from the Group in conducting the audit.

Lisbon, April 30, 2020

________________________________________________________ Deloitte & Associados, SROC S.A. Represented by Pedro Miguel Argente de Freitas e Matos Gomes, ROC

REPORT AND OPINION OF THE STATUTORY AUDIT BOARD

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REPORT AND OPINION OF THE STATUTORY AUDIT BOARD

REPORT AND OPINION

OF

THE STATUTORY AUDIT BOARD

REPORT AND OPINION OF THE STATUTORY AUDIT BOARD (TRANSLATION FROM THE PORTUGUESE ORIGINAL – IN ANY DISCREPANCY THE PORTUGUESE VERSION PREVAILS)

To the Shareholders of Estoril Sol SGPS, SA

In accordance with the legislation in force and the mandate entrusted to us, we hereby submit to your analysis our Report and Opinion that embraces both the activity we performed and the financial statements, separate and consolidated, of Estoril Sol SGPS, SA ("SGPS") and subsidiaries ("Group Estoril Sol") during the financial year ended 31 December 2019, which are the responsibility of the Board of Directors.

Report

During the year 2019, this Statutory Audit Board monitored regularly the activity of the SGPS and of the Group Estoril Sol, with the frequency and extension we deemed appropriate, as well as the regularity of its accounting records and compliance with the law and articles of association.

Within the scope of our functions:

(i) We examined the financial statements, separate and consolidated, that comprise the financial position as of 31 December 2019, the statements, separate and consolidated, of the profit and loss and comprehensive income, of the changes in equity, and the cash flows for the year ended on that date and the notes attached to the financial statements;
(ii) we performed the verifications that we deemed necessary to the process and operations of consolidation of the accounts;
(iii) we observed the appropriateness of the accounting principles adopted, namely the preparation of these financial statements, separate and consolidated, in accordance with the International Financial Reporting Standards (IAS / IFRS), as adopted by the European Union;
(iv) We analyzed the Annual Management Report prepared by the Board of Directors and the proposal for profit distribution included herein.

Having present our legal and statutory obligations, we had regular meetings both with the Board of Directors and the several services of Group Estoril Sol, namely in the accounting and financial areas, legal and "Compliance", from whom we obtained all the information and clarifications we requested.

Additionally and in compliance with nº 1 of article 452 of the Portuguese Companies Code, we held meetings with the external auditors Deloitte & Associados, SROC ("Deloitte") who, in the fulfillment of their functions, had audited these financial statements, separate and consolidated, of the year 2019, issuing their Statutory Auditor's Report and Auditor's Report on 30 April 2020, without qualifications but with one emphasis of a matter that covers the following issues: (i) the current game concession contracts for exclusive exploration of Estoril and Póvoa de Varzim gaming zones ends on 31 December 2020 and 2023, respectively; (ii) the existence of a subsequent event of a pandemic nature, commonly recognized as Covid 19, which immediate financial and economic consequences have already caused the closure of the physical casinos as from 14 March 2020 without perspectives of reopening; (iii) following the closure of the activities of the physical casinos as above, on 10 April 2020, the Group Estoril Sol decided to enter in "lay-off" legally allowed by Decree-Law nº 10-G/2020. In brief, not being questioned the going concern principle, as adopted by the Board of Directors in the preparation of these financial statements, separate and consolidated, Deloitte emphasizes that both the outcome of the concession files beyond the ending dates as may be stipulated by the Portuguese State and the measures for containing Covid 19 combined with the decisions to be taken regarding the temporary closing of the physical casinos, within the scope of the concession contracts to be taken by Portuguese Authorities, will be fundamental to determine the recoverable value of the assets of the Group Estoril Sol.

Due to the relevance of the document, this Statutory Audit Board also refers that received from Deloitte an "Additional Report to the Statutory Audit Board" which included, in a very detailed manner, the audit conclusions, the analysis on the key audit matters and for all the other relevant areas for the audit of the financial statements, separate and consolidated, of 2019, as well several internal control recommendations. Furthermore, in accordance with nº 8 of article 77 of the Statutes of the Statutory Auditors (Ordem dos Revisores Oficiais de Contas), we obtained from Deloitte the confirmation of independence and that during 2019 no prohibited services were performed by them to Group Estoril Sol.

As such, following the meetings held with Deloitte and based on the above-mentioned document and all clarifications we were provided, we hereby express our agreement to their Statutory Auditor's Report and Auditor's Report, which is considered fully reproduced in this Report and Opinion.

During this year, that presents a net profit allocated to the shareholders of SGPS of Eur 9,911 thousand and a total consolidated net profit for the year of Eur 14,495 thousand, from the analysis we performed to these financial statements of 2019, the following is considered of particular relevance:

The gross income of the land base casinos of the SGPS in Portugal decreased from last year by 2,05% following the general trend in Portugal, that globally reduced by 1,13%; reasons behind this decrease are several, namely, among them are believed to be the identification of the individuals entering in the land base casinos; however, the quota of the Group Estoril Sol is similar with previous year – 61,16% as compared with 62% in 2018;
Regarding the Online gaming activity there was a significant growth, being the quota of ES Digital of 29% in the casino games and 12% in sport betting;
As a consequence of these activities, gross revenues of gaming activities reached the amount of Eur 231.135 thousand and the amount of the game taxes was Eur 120.115 thousand which included the minimum game tax consideration of Varzim Sol (Eur 5.032 thousand); in fact, this minimum tax that impends for several years on the activity of Varzim Sol is solely responsible for the accounting of an impairment in 2019 of Eur 4.177 thousand that refers to the recoverable amount of the assets allocated to the gaming zone;
This financial year closes without any financial loans, fully liquidated in 2018.

In addition to these issues, special attention was given by this Statutory Audit Board to the following:

Fulfillment of the "Compliance" program, based on a duly approved Code of Conduct, including among other activities the importance of detecting all practices under money laundering and terrorist financing and preventing other undue practices as well as a newly implemented Code of Ethics and Professional Conduct that covers excellence standards of professional behavior both internal and with eternal entities, mechanisms for preventing prohibited practices and introduces also controls to monitor all these matters;
The detailed monitoring of the relevant legal claims in which Group Estoril Sol and its subsidiaries are involved, through regular meetings with the Legal Department, which are duly described in the notes to the accounts, separate and consolidated;
The consolidated non-financial statement provided for in article 508 / G of the Portuguese Commercial Companies Code is included in the Annual Management Report.

Finally, this Statutory Audit Board reinforces your attention to the following:

As mentioned in the Annual Management Report, in the notes 1 and 2 to the financial statements, separate and consolidated, the current game concession contracts for exclusive exploration of Casino Estoril (and Lisbon) and Póvoa de Varzim gaming zones ends on 31 December 2020 and 2023, respectively, being at present unknown how and when the tender for the new concession;
The subsequent event mentioned in the notes 27 and 31 of the financial statements, separate and consolidated, respectively, regarding the worldwide pandemic that is in Portugal since the 1st quarter of 2020 (Covid 19) that implied for reasons of public health, the closing of the activities of all land base casinos in Portugal for an unlimited period as from 14 March 2020 as well the adherence to a simified lay-off since 10 April 2020; all consequences from this reality are really unknown at present at Group Estoril Sol.

Opinion

Considering the above, we are of the opinion that, taking into account the content of the Statutory Auditor's Report and Auditor's Opinion issued by Deloitte, the financial statements, separate and consolidated, referred to above and the Annual Management Report that includes the proposal for annual distribution of the results, as of 31 December 2019, are in accordance with the accounting principles and applicable statutes, and may be approved at the General Meeting of Estoril Sol SGPS, SA.

Declaration

The Statutory Audit Board, pursuant to and for the purposes of the provisions under c) of no.1 of article 245 of the Portuguese Securities Code, declares that, to the best of our knowledge, the information contained in the financial statements, separate and consolidated, relating to the year 2019 was prepared in conformity with the International Financial Reporting Standards (IFRS) as adopted in the European Union, presenting a true and fair view of the financial position, the profit and loss, the changes in equity and the cash flows of Estoril Sol and Group Estoril Sol, and that the management and corporate governance reports faithfully demonstrates the progress of the business, the performance and financial position of the company, and contains a description of the main risks and uncertainties they are faced with.

We also wish to express our appreciation to the Board of Directors and to the internal departments of Group Estoril Sol for their cooperation.

Estoril, 30 April 2020

Manuel Maria Reis Boto

___________________________________

____________________________________

___________________________________

Vitor Pratas Sevilhano

Paulo Ferreira Alves

AI Terminal

Estoril-Sol S.A.

1927_10-k_2020-04-30_21a0ed27-d96a-4267-b098-bacec5e91f19.pdf

MANAGEMENT REPORT AND ACCOUNTS 2019

BOARD OF THE ANNUAL GENERAL MEETING

1. THE COMPANY

2. SHARE CAPITAL, SHARES AND DIVIDENDS

3. ESTORIL-SOL GROUP

ESTORIL SOL – GROUP OF COMPANIES

4. FINANCIAL ANALYSIS – SUMMARY

Game Revenues

Group Consolidated Results

Performance by Segment/Casino

Capex

Financial Debt

5. FINANCIAL ANALYSIS – MACROCROECONOMIC ENVIROMENT

6. FINANCIAL ANALYSIS – CONTEXT OF THE INDUSTRY AND THE GROUP ESTORIL-SOL

- Territorial

- Online

- Total Game Revenues (Teritorial + Online)

7. FINANCIAL ANALYSIS - SEPARATE ACCOUNTS

8. FINANCIAL ANALYSIS - CONSOLIDATED ACCOUNTS

9. FINANCIAL ANALYSIS – REPORTING BY SEGMENTS

10. HUMAN RESOURCES

11. SUSTAINABILITY

A. BUSINESS MODEL OF THE ESTORIL SOL GROUP

B - ENVIRONMENTAL ISSUES

C - SOCIAL ISSUES

D - Employment-related issues

E - EQUALITY BETWEEN MEN AND WOMEN AND NON-DISCRIMINATION

F - HUMAN RIGHTS

G – RIGHT TO DATA PROTECTION

H - FIGHT AGAINST CORRUPTION, MONEY LAUNDERING AND TERRORIST FINANCING CRIMES

F - ATTEMPTED BRIBERY

12. FINANCIAL POLICY OF THE GROUP

13. RISK MANAGEMENT

Physical and Contractual Risk:

Business Risk:

Cyber Risk:

Financial Risk:

Credit Risk:

Exchange rate Risk:

14. RELEVANT FACTS

15. SUBSEQUENT FACTS

16. DECLARATIONS

17. ACKNOWLEDGMENTS

The Board of Directors

PART I – SHAREHOLDINGS STRUCTURES, ORGANISATION AND CORPORATE GOVERNANCE

A. SHAREHOLDING STRUCTURE I. Share capital structure

1. Share capital structure

2. Restrictions on the transfer and ownership of shares

3. Own shares

4. Significant agreements with ownership clauses

5. Defensive measures in case of change of shareholding control

6. Shareholders' agreements

II. Shareholdings and holding of bonds

7. Qualified shareholdings

FINANSOL, SOCIEDADE DE CONTROLO, SGPS, S.A.

AMORIM - ENTERTAINMENT E GAMING INTERNATIONAL, S.G.P.S, S.A.

8. Number of shares and bonds held by the members of governing bodies, submitted under paragraph 5 of article 447 of the Portuguese Companies Act

10. Business relationship between holders of qualified shareholdings and the Company

B. GOVERNING BODIES AND COMITTEES

I. Shareholders' general meeting

a) Composition of the Board of the Shareholders' General Meeting

11. Board of the Shareholders' General Meeting identification of members and mandate

b) Exercising voting rights

12. Possible restrictions on voting rights

13. Maximum percentage of voting rights that may be exercised by a single or group of shareholders, under paragraph 1 of Article 20 of the Portuguese Securities Code

14. Deliberative Quorum

II. Management and Supervision

a) Composition (during 2019)

15. Identification of the adopted governance model

16. Rules for nominating and replacing Board Members

17. Composition of the Board of Directors

18. Distinction between executive and nonexecutive members

19. Professional qualifications and curricular references of the members of the Board of Directors

STANLEY HUNG SUN HO (Chairman)

PATRICK WING MING HUEN (Deputy Chairman)

MÁRIO ALBERTO DAS NEVES ASSIS FERREIRA (Deputy Chairman)

PANSY CATILINA CHIU KING HO