Novabase SGPS

Interim / Quarterly Report • Sep 19, 2017

accounts

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REPORT AND ACCOUNTS - 1ST HALF 2017

I - Management Report

• 1. Key Indicators Evolution
• 2. Short Summary of the Activity
• 3. Stock Performance
• 4. Outlook 2017

II - Consolidated Financial Statements

III - Annexes to the Management Report

• I Qualifying Holdings and Shareholding Structure
• II Management Transactions
• III Own Shares Transactions

IV - Condensed Consolidated Accounts

V - Statement of Compliance

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Consolidated Results 6M17

Privileged Information July 27, 2017

Highlights:

Turnover: 72.4 M€ (64.1 M€ in 6M16)

EBITDA: 5.4 M€ (4.1 M€ in 6M16)

Net Profit: 3.9 M€ (2.8 M€ in 6M16)

Net Cash: 59.2 M€ (25.7 M€ in 12M16)

Message from the Chairman and CEO Luís Salvado

"The results from the first half of the year bear out the success of our internationalization strategy, and are in line with the goals laid out for the year.

60% of our business is now done outside of Portugal. International Turnover was up 15%, with Europe accounting for around two thirds of non-domestic business.

EBITDA and Net Profit were up 33% and 41%, respectively.

Cash also saw extremely positive progress, generating 33 M€ in the past six months, benefiting from proceeds from the sale of the Infrastructures & Managed Services business. In the past 12 months, 51 M€ of Cash was generated.

The first half of the year was also marked by Novabase's return to the PSI20, the Euronext Lisbon's main index. This re-entry strengthens our stock's visibility and liquidity. During the same time period, Novabase almost quadrupled its transaction volume over the previous year, with its stock price up 29%.

Through the end of the year, we will keep our strategic focuses, namely reinforced investments in R&D and more selectivity in the offerings with which we work. Despite ongoing uncertainties in the markets where we do business, we remain confident in the targets laid out for 2017."

INVESTOR RELATIONS OFFICE: María Gil Marín Tel. +351 213 836 300 Fax: +351 213 836 301 investor.relations@novabase.pt

Report available on website : www.novabase.pt

Novabase SGPS, S.A. Public Company . Euronext code: NBA.AM . Registered in TRO of Lisbon and Corporate Tax Payer nº 502.280.182 . Share Capital: 15,700,697.00 € . Head Office: Av. D. João II, 34, 1998-031 Lisbon - PORTUGAL

Turnover shows a 13% rise YoY, and is above the annual Guidance (+3%). Highlights include the international growth (15%), in line with the strategic focus.

1. Key Indicators Evolution

Turnover and EBITDA comparatives were restated, and do not include the Infrastructures & Managed Services business, discontinued in 4Q16.

Turnover (M€)

EBITDA (M€)

EBITDA above the annual Guidance (+7%), and registering a 33% growth, YoY.

Earnings per share (EPS) in 6M17 reached 0.13 euros per share, registering an increase of 43% towards the EPS from the previous year of 0.09 euros per share.

From EBITDA to Net Profit 6M17 Vs 6M16 (M€)

The Financial Results were negative in 0.2 M€, an increase of 0.6 M€, fundamentally due to the increase in the short term bank deposits and held-tomaturity gains compared to the same period of last year.

Results from discontinued operations in 6M17 reached a 2.7 M€ profit (3.0 M€ in 6M16) and correspond to the results attributable to IMS segment. In 6M17, this figure corresponds fully to the adjustment on the gain generated by the sale of the business, resulting from the final calculation of working capital and net debt, as established in the purchase and sale agreement.

Net Cash (M€)

Net cash

In the 6M17, Novabase shows a positive evolution in cash generation. Novabase ended the 6M17 with 59.2 M€ in net cash, which compares to 25.7 M€ in the 12M16.

This evolution mainly reflects the cash inflow from IMS Business disposal, in the amount of 41.1 M€. Additionally, on May 29, 2017, Novabase paid its shareholders a total amount of 4.7 M€ (0.15 €/share).

Increase of 33.5 M€ in the cash position, in the first

half of 2017.

The first half results are aligned with the expectations laid out for the year, and confirm the sale of the Infrastructures & Managed Services (IMS) business as a crucial step in the repositioning that Novabase has been doing to focus and strengthen its internationalization strategy.

International business shows a 15% rise. Europe maintains its leadership as the major market.

In the new perimeter, Turnover increased by 13%, and the weight of international business grew to 60% of the total. Operations in Europe expanded 13% YoY, and accounts for approximately 2/3 of non-domestic activity. Likewise, an improvement of operating competitiveness was verified, with EBITDA margin rising 33% up to 5.4 M€ and Net Profit reaching 3.9 M€.

Towards the Guidance, the six months of 2017 results stood above both in Turnover (+3%) and EBITDA (+7% in absolute terms and +0.3% in percentage points).

The table below contains the Infrastructures & Managed Services area Turnover and EBITDA in 6M15 and 6M16, which were disregarded from the comparatives to show continuing operations separately from discontinued operations, following the IMS Business sale:

IMS	6M15	6M16
Turnover (M€)	51.270	41.566
International Turnover (M€)	16.668	10.876
EBITDA (M€)	2.761	3.100

In the first year-half, highlights include that Novabase was once again the platinum sponsor of the Receivables Finance International 2017 (RFIx) conference, held in London. The RFIx conferences are the main event in the area of factoring, gathering banks, financial institutions, companies and specialists for an in-depth discussion on the financial industry's future.

Also, Celfocus was in attendance at the Mobile World Congress, considered the telecommunications sector's most important trade show on a worldwide scale, with its Celfocus Omnichannel solution.

In the Venture Capital area, Collab has been awarded the Gold Award in Global Technology by Associação Portuguesa de Contact Centers (Portuguese Association of Contract Centres). The award was announced at the 13th International Conference of the association, an event that brings together the Portuguese contact centre industry.

With regard to new partnerships, Novabase has signed a protocol with Instituto Superior Técnico (IST) to join its network of strategic partners. This agreement will allow Novabase to support the transfer of knowledge and innovation, resulting from the research activity of the University to the Industry and vice versa, and fall under Novabase's strategy to specialise its offerings and make them more suitable for the most sophisticated markets.

Highlights also include the re-entry of Novabase to the main index of the Lisbon stock exchange. The return to PSI20 increases the visibility of Novabase and may lead to an increase of the liquidity of its stock, which recorded a 29% appreciation during the first six months.

World reference events reflect Novabase's focus on innovation and provide excellent showcases for the dissemination of its offerings.

The percentage breakdown of Turnover and EBITDA by the different businesses, in the 6M17, is as follows:

From the total Turnover, 43.4 M€ were generated outside Portugal, which compares to 37.6 M€ registered in 6M16.

This growth confirms the repositioning that Novabase has been operating in recent years to consolidate its internationalization, evolving from a geographic leadership with a broad offer to a strategy of specialised offers to the global market.

Business outside Portugal generated in the Business Solutions area remained in 60% of the respective Turnover (60% in 6M16) and in the Venture Capital area increased to 62% (34% in 6M16).

Novabase had 2074 employees on average in the 6M17, a decrease of 15% compared to the 6M16 (2447), reflecting the exit of the IMS Business companies employees, sold at the end of 2016.

Average number of employee's breakdown by business area, during 6M17, was as follows:

Europe was the continent with greater expression in 6M17, accounting for 64% of international business.

Average Number of Employees

Worthy of note is that international employees represent 10% of the total number in 6M17 (216), and the recruitment of 95 new university graduates through Novabase Academy program.

2.1. Business Solutions (BS)

BS evolution reflects topline growth, both internationally (+14%) and in the domestic market (+12%), and a positive performance of the businesses.

EBITDA Business Solutions (M€)

2.2. Infrastructures & Managed Services (IMS)

As at October 12, 2016, Novabase has entered into a purchase and sale agreement with VINCI Energies Portugal, SGPS, S.A., to sell its Infrastructures & Managed Services business ("IMS Business"), by the agreed price of 38.365 million euros, which was substantially completed by the end of the year, therefore a gain amounting to 17.6 M€ was recorded in 2016 accounts.

Final price calculation generated an additional gain of 2.7 M€.

In the first half of 2017, the final calculation of working capital and net debt as established in the purchase and sale agreement took place, and the final price was revised to 41.061 million euros, resulting in an adjustment to the gain generated by the sale of the IMS business in the amount of 2.7 M€.

2.3. Venture Capital (VC)

Turnover Venture Capital (M€)

VC area with limited significance, typical of the development stage of its investments.

EBITDA Venture Capital (M€)

6M15		6M16		6M17
0.0
	-83%	-0.1	-127%	-0.2
-2.3%		-4.2%		-9.1%	EBITDA %

Excluding the shareholder remuneration, the appreciation of Novabase share price would have been 34%.

3. Stock Performance

Novabase share price in 6M17 gained 29%, comparing to a 10% gain in the PSI20 Index and a 12% gain in the EuroStoxx Technology Index.

In this period, a dividend of 0.15 €/share was distributed.

Also to be noted the re-entry of Novabase to the main index of the Lisbon stock exchange, the PSI20, as of March, 20.

Novabase and the Market

The evolution of Novabase share prices compared to other companies in the IT sector in Europe, in 6M17, was as follows:

In the end of the first half of 2017, Novabase presented a Price to Sales multiple of 0.74x, which represents a discount of 33% compared to the average of other companies in the sector in Europe (source: Reuters, ttm values at 30/06).

9% is the average upside according to the analysts who cover Novabase.

The average price target disclosed by the analysts who cover Novabase is 3.48 euros.

Rotation in 6M17 represented 14% of the capital and 4.3 million shares were traded, about four times higher than the values recorded in 6M16 (rotation of 3% of the capital and 1.1 million shares traded).

Summary	1H15	2H15	1H16	2H16	1H17
Minimum price (€)	2.170	2.070	1.879	1.910	2.480
Maximum price (€)	2.619	2.535	2.150	2.490	3.397
Volume weighted average price (€)	2.389	2.242	2.026	2.220	2.962
Closing price at the end of the period (€)	2.500	2.114	1.980	2.490	3.200
Nr. of shares traded			4,192,659 1,531,699 1,092,537 1,736,117 4,287,838
Market cap in the last day (M€)	78.5	66.4	62.2	78.2	100.5

4. Outlook 2017

These half-year results are in line with the strategic objectives set for the year.

The international activity accounts for 60% of the total business, and Europe consolidates its position as the major market, representing 64% of total. In this period, EBITDA margin was 7.4% and Net Profit reached 5.4%.

Novabase maintains confidence in the goals set for 2017:

• Turnover of 140 M€, more than 60% of which generated abroad
• EBITDA exceeding 10 M€

We reaffirm the priority of sustainable international growth, with focus on the differentiation of our offerings for the most sophisticated markets.

In compliance with ESMA/2015/141en issued by European Securities and Markets Authority.

Alternative Performance Measures (APMs)

APMs used by Novabase are intended to provide additional information, more comprehensive and relevant to users, regarding the position and financial performance of the company. These APMs are applied consistently in all periods reflected in this release.

Net Cash

Net Cash provides information on the level of cash and other bank deposits and marketable securities, after discounting the debts to financial institutions, assisting in the analysis of the company's liquidity and ability to meet its non-bank commitments.

The caption "Cash and cash equivalents" is simultaneously the item of the consolidated statement of financial position more directly reconcilable and more relevant to this APM.

The detail and breakdown of Net Cash, as well as the reconciliation in 6M17 and prior periods, is analysed as follows:

	6M15	6M16	6M17
Cash and cash equivalents	19,588	18,572	67,109
Held-to-maturity investments - Non-current	4,409	6,337	866
Held-to-maturity investments - Current	-	4,492	6,298
Treasury shares held by the Company (*)	30	17	1,205
Bank borrowings - Non-current		(12,790) (16,277) (11,532)
Bank borrowings - Current	(4,883)	(4,915)	(4,745)
Net Cash	6,354	8,226	59,201

(*) Is determined by multiplying the number of treasury shares held by the Company at the end of the period by the share price on the last tradable day:

	6M15	6M16	6M17
Treasury shares held by the Company (thousands)	11.957	8.615	376.611
Closing price on the last tradable day (€)	2.500	1.980	3.200
Treasury shares held by the Company (EUR thousand)	30	17	1,205

This APM and all its components contain no estimates or judgments made by Management.

EBITDA

EBITDA provides information on the company's ability to generate resources through its operations, without taking into account the financial effects, taxes and other non-operational items, assisting in the analysis of the business performance.

Operating profit (EBIT) is simultaneously the item of the consolidated income statement more directly reconcilable and more relevant to this APM. Given that EBITDA is directly identifiable from the referred financial statement, no reconciliation is presented here.

The detail and breakdown of EBITDA is analysed as follows:

EBIT - Depreciation and amortization - Restructuring costs

This APM includes a component that may require the use of estimates and judgments made by Management on future results ("Restructuring costs": costs related to specific processes implemented with the aim to improve the competitiveness of the operations). For the periods presented in this release, this item is null.

APMs used by Novabase are Net Cash and EBITDA.

Consolidated Statement of Financial Position Consolidated Income Statement as at 30 June 2017 for the period of 6 months ended 30 June 2017

	30.06.17 (Thousands of Euros)	31.12.16		30.06.17	30.06.16 * (Thousands of Euros)	Var. %
ASSETS			CONTINUING OPERATIONS
Tangible assets	8,914	8,899	Sale of goods	1,295	104
Intangible assets	17,613	18,104	Cost of goods sold	(661)	(69)
Financial investments	4,800	4,928
Held-to-maturity investments	866	4,859	Gross margin	634	35	1711.4 %
Deferred income tax assets	9,256	9,545
Other non-current assets	5,132	5,132	Other income
Total Non-Current Assets	46,581	51,467	Services rendered	71,073	63,992
			Supplementary income and subsidies	913	182
Inventories	65	486	Other operating income	354	378
Trade debtors and accrued income	53,680	64,120
Other debtors and prepaid expenses	10,338	48,953		72,340	64,552
Derivative financial instruments	68	19
Held-to-maturity investments	6,298	4,441		72,974	64,587
Cash and cash equivalents	67,109	35,703
Total Current Assets	137,558	153,722	Other expenses
			External supplies and services	(30,472)	(21,723)
Assets for continuing operations	184,139	205,189	Employee benefit expense	(43,453)	(38,674)
			Provisions reversal	6,794	201
Assets for discontinued operations	-	-	Other operating expenses	(470)	(336)
Total Assets	184,139	205,189		(67,601)	(60,532)
EQUITY			Gross Net Profit (EBITDA)	5,373	4,055	32.5 %
Share capital	15,701	15,701	Restructuring costs	-	-
Treasury shares	(188)	(4)	Operating Gross Net Profit	5,373	4,055	32.5 %
Share premium	43,560	43,560	Depreciation and amortization	(1,533)	(1,786)
Reserves and retained earnings	19,546	16,071
Net profit	3,924	9,577	Operating Profit (EBIT)	3,840	2,269	69.2 %
Total Shareholders' Equity	82,543	84,905	Financial results	(246)	(770)
Non-controlling interests	8,868	8,151
Total Equity	91,411	93,056	Net Profit before taxes (EBT)	3,594	1,499	139.8 %
			Income tax expense	(938)	(92)
LIABILITIES			Net Profit from continuing operations	2,656	1,407	88.8 %
Bank borrowings	11,532	13,907
Finance lease liabilities	5,385	4,990	DISCONTINUED OPERATIONS
Provisions	6,876	9,109	Net Profit from discont. operations	2,696	2,992	-9.9 %
Other non-current liabilities	-	-
Total Non-Current Liabilities	23,793	28,006	Non-controlling interests	(1,428)	(1,623)
Bank borrowings	4,745	5,376	Attributable Net Profit	3,924	2,776	41.4 %
Finance lease liabilities	1,531	1,540
Trade payables	5,366	7,242

Other creditors and accruals 32,875 40,178 Derivative financial instruments 1 82 Deferred income 22,417 27,709

Other information:

Total Current Liabilities	66,935	82,127
Total Liabilities for cont. operations	90,728	110,133
Total Liabilities for discont. operations	2,000	2,000
			Other information:
Total Liabilities	92,728	112,133	Turnover	72,368	64,096
			Gross margin from sales %	49.0 %	33.7 %
Total Equity and Liabilities	184,139	205,189	EBITDA margin	7.4 %	6.3 %
			EBT % on Turnover	5.0 %	2.3 %
Net Cash	59,201	25,741	Net profit % on Turnover	5.4 %	4.3 %

Total Liabilities	92,728	112,133	Turnover	72,368	64,096	12.9 %
			Gross margin from sales %	49.0 %	33.7 %
Total Equity and Liabilities	184,139	205,189	EBITDA margin	7.4 %	6.3 %
			EBT % on Turnover	5.0 %	2.3 %
Net Cash	59,201	25,741	Net profit % on Turnover	5.4 %	4.3 %

* Comparatives were restated to show continuing operations separately from discontinued operations (IMS Business).

Novabase S.G.P.S., S.A. Public Company - Stock Code BVL: NBA.IN Share Capital 15,700,697.00 Euros - Corporate Registration CRCL N.º 1495 Head-office: Av. D. João II, 34, Parque das Nações, 1998-031 Lisbon, Portugal Corporate Tax Payer N.º 502 280 182

Consolidated Income Statement by SEGMENTS for the period of 6 months ended 30 June 2017

(Thousands of Euros)

	Business		Venture
	Solutions	IMS	Capital	NOVABASE
CONTINUING OPERATIONS Sale of goods	1,295	-	-	1,295
Cost of goods sold	(661)	-	-	(661)
Gross margin	634	-	-	634
	-	-	-	-
Other income
Services rendered	68,880	-	2,193	71,073
Supplementary income and subsidies	903	-	10	913
Other operating income	293	-	61	354
	70,076	-	2,264	72,340
	- 70,710	- -	- 2,264	- 72,974
Other expenses	-	-	-	-
External supplies and services	(29,301)	-	(1,171)	(30,472)
Employee benefit expense	(42,171)	-	(1,282)	(43,453)
(Provisions) / Provisions reversal	6,788	-	6	6,794
Other operating expenses	(453)	-	(17)	(470)
	- (65,137)	- -	- (2,464)	- (67,601)
Gross Net Profit (EBITDA)	- 5,573	- -	- (200)	- 5,373
Depreciation and amortization	- (1,352)	- -	- (181)	- (1,533)
Operating Profit (EBIT)	4,221	-	(381)	3,840
Financial results	- (126)	- -	- (120)	- (246)
Net Profit / (Loss) before Taxes (EBT)	4,095	-	(501)	3,594
Income tax expense	- (676)	- -	- (262)	- (938)
Net Profit / (Loss) from cont. operations	3,419	-	(763)	2,656

DISCONTINUED OPERATIONS

Net Profit from discontinued operations	-	2,696	-	2,696
Non-controlling interests	(1,615)	-	187	(1,428)
Attributable Net Profit / (Loss)	1,804 -	2,696 -	(576) -	3,924 -
Other information :
Turnover	70,175	-	2,193	72,368
EBITDA	5,573	-	(200)	5,373
EBITDA % on Turnover	7.9%		-9.1%	7.4%
EBT % on Turnover	5.8%		-22.8%	5.0%

30 June 2017 Annex I - Management Report

Qualifying Holdings and Shareholding Structure

List of Shareholders with Qualifying Stakes (under the terms of paragraph 4 of Article 448º of the Portuguese Commercial Companies Code and Article 16º of the Portuguese Securities Code - 'CVM')

Shareholder	Number of Shares	% Share capital with voting rights
HNB - SGPS, SA 1	8,461,637	26.95%
R.S.C. Invest, SGPS, SA 2	235,000	0.75%
Pedro Miguel Quinteiro Marques de Carvalho	2,289,068	7.29%
Rogério dos Santos Carapuça	1,079,122	3.44%
João Nuno da Silva Bento 1	485,637	1.55%
Álvaro José da Silva Ferreira 1	1	0.00%
Luís Paulo Cardoso Salvado 1	1	0.00%
José Afonso Oom Ferreira de Sousa 1	1	0.00%
Number of shares attributable to signatories of the Novabase Shareholders' Agreement (under the terms of article 20, paragraph 1 of the Securities Code)	12,550,467	39.97%
Partbleu, Sociedade Gestora de Participações Sociais, SA	3,180,444	10.13%
Maria Manuela de Oliveira Marques	1,043,924	3.32%
Fernando Fonseca Santos	1,575,020	5.02%
Fundo de Investimento Mobiliário Aberto Santander Ações Portugal	1,476,905	4.70%
Fundo de Investimento Mobiliário Aberto Poupança Ações Santander PPA	34,537	0.11%
Santander Asset Management - Soc. Gestora de Fundos de Investimento Mobiliário, SA (under the terms of article 20, paragraph 1 of the Securities Code)	1,511,442	4.81%
IBIM2 Limited	1,610,145	5.13%
Lazard Frères Gestion SAS	669,122	2.13%
Total	22,140,564	70.51%

1 José Afonso Oom Ferreira de Sousa, Luís Paulo Cardoso Salvado, Álvaro José da Silva Ferreira and João Nuno da Silva Bento are the only shareholders of HNB - SGPS, S.A., having signed a shareholder's agreement for all of this company's share capital.

2 R.S.C. INVEST, SGPS, S.A. is controlled by Rogério dos Santos Carapuça.

The holdings identified above correspond to the last positions notified to the Company with reference to 30 June 2017 or before.

Information concerning stakes held in the company by members of the board of directors and supervisory boards (under the terms of paragraph 5 of Article 447º of the Portuguese Commercial Companies Code)

Holders 1	Number of Shares	% Share capital with voting rights
José Afonso Oom Ferreira de Sousa 2	1	0.00%
Pedro Miguel Quinteiro Marques de Carvalho	2,289,068	7.29%
Luís Paulo Cardoso Salvado 2	1	0.00%
Francisco Paulo Figueiredo Morais Antunes	30,335	0.10%
Paulo Soares de Pinho (member of the Supervisory Board)	0	0.00%
Maria de Fátima Piteira Patinha Farinha (member of the Supervisory Board)	0	0.00%
Nuno Miguel Dias Pires (member of the Supervisory Board)	0	0.00%
KPMG & Associados – SROC, represented by
Paulo Alexandre Martins Quintas Paixão (effective Statutory Auditor)	0	0.00%
Maria Cristina Santos Ferreira (surrogate Statutory Auditor)	0	0.00%
	2,319,405	7.39%

1 The shareholding of each of these members of the corporate and supervisory board corresponds to the last position notified to the Company in reference to 30 June 2017 or before.

2 José Afonso Oom Ferreira de Sousa and Luís Paulo Cardoso Salvado (along with Álvaro José da Silva Ferreira and João Nuno da Silva Bento) are shareholders of HNB - SGPS, S.A., where they hold management positions. HNB - SGPS, S.A. holds 8,461,637 shares representing 26.95% of Novabase's share capital and respective voting rights.

30 June 2017 Annex II - Management Report

Management Transactions

(Summary of the transactions on Novabase shares reported in the 1st half of 2017, pursuant to the terms and for the purposes of articles 248-B of the Portuguese Securities Code and 14 of the Portuguese Securities Commission Regulation no. 5/2010, and of the Commission Implementing Regulation (EU) 2016/523 of 10 March 2016)

Director /	Transaction Date			#	€
Closely associated person			Location	Shares Share price
Francisco Antunes	Acquisition	19-04-2017	Euronext Lisbon	1,500	3.100
Francisco Antunes	Acquisition	19-04-2017	Euronext Lisbon	1,300	3.100
Francisco Antunes	Acquisition	20-04-2017	Euronext Lisbon	10,000	3.100
Francisco Antunes	Acquisition	21-04-2017	Euronext Lisbon	2,200	3.100
Francisco Antunes	Disposal	19-04-2017	Euronext Lisbon	1,100	3.100
Francisco Antunes	Disposal	20-04-2017	Euronext Lisbon	13,900	3.100
Luís Paulo Salvado	Disposal	21-04-2017	Over-the-Counter	14,999	3.100
José Afonso de Sousa	Disposal	24-04-2017	Over-the-Counter	10,056	3.100
HNB - SGPS, SA (a)	Acquisition	21-04-2017	Over-the-Counter	14,999	3.100
HNB - SGPS, SA (a)	Acquisition	24-04-2017	Over-the-Counter	10,056	3.100
Luís Paulo Salvado	Disposal	02-05-2017	Over-the-Counter	50,282	3.100
HNB - SGPS, SA (a)	Acquisition	02-05-2017	Over-the-Counter	50,282	3.100
HNB - SGPS, SA (a)	Acquisition	04-05-2017	Over-the-Counter	65,281	3.100

(a) The company HNB - SGPS, SA, have José Afonso Oom Ferreira de Sousa and Luís Paulo Cardoso Salvado (along with Álvaro José da Silva Ferreira and João Nuno da Silva Bento) as shareholders, therefore, it is considered as a closely associated person to a director of Novabase, under article 248-B, no. 3 and 4, of the Portuguese Securities Code.

At 30 June 2017, as a result of such transactions, the referred directors and closely associated person hold the following shareholdings in the Company's share capital:

	#	%
Director / Closely associated person	Shares (held directly and indirectly)	Share capital and voting rights
Luís Paulo Salvado	1	0.00%
José Afonso de Sousa	1	0.00%
Pedro Marques de Carvalho	2,289,068	7.29%
HNB - SGPS, SA	8,461,637	26.95%
Francisco Antunes	30,335	0.10%

Novabase SGPS, S.A. Public Company - Euronext Code: NBA.AM Head Office: Av. D. João II, Lote 1.03.2.3 Parque das Nações 1998-031 Lisboa Share Capital: 15,700,697.00 Euros Corporate Tax Payer nº 502.280.182

30 June 2017 Annex III - Management Report

Own Shares Transactions

(Under the terms of section d) of paragraph 5 of Article 66º of the Portuguese Commercial Companies Code)

Shares	Share price
1,379	2.744
108,621	2.745
207,000	2.660
1,000	2.660
49,996	3.100

At 31 December 2016, Novabase S.G.P.S. held 8,615 own shares, representing 0.03% of its share capital.

During the first half of 2017, the company acquired on the market 367,996 own shares at the average price of 2.745 euros.

Own shares acquisitions were performed because they were considered as best interest to society.

At 30 June 2017, Novabase S.G.P.S. held 376,611 own shares, representing 1.20% of its share capital.

During the period, Novabase S.G.P.S. shares always had a nominal value of € 0.5.

Condensed Consolidated Accounts 1st half 2017

(Unaudited)

NOVABASE S.G.P.S., S.A.

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INDEX

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the period of 6 months ended 30 June 2017	5
● Condensed Consolidated Interim Statement of Financial Position as at 30 June 2017	6
● Condensed Consolidated Interim Statement of Profit and Loss for the period of 6 months ended 30 June 2017	7
● Condensed Consolidated Interim Statement of Comprehensive Income for the period of 6 months ended 30 June 2017	8
● Condensed Consolidated Interim Statement of Changes in Equity for the period of 6 months ended 30 June 2017	9
● Condensed Consolidated Interim Statement of Cash Flows for the period of 6 months ended 30 June 2017	10
● Selected Notes to the Condensed Consolidated Interim Financial Statements for the period of 6 months ended 30 June 2017	11
Note 1. General information	11
Note 2. Significant accounting policies	11
Note 3. Critical accounting estimates and judgements	11
Note 4. Seasonality	11
Note 5. Segment information	12
Note 6. Property, plant and equipment and intangible assets	12
Note 7. Deferred tax assets and liabilities	13
Note 8. Trade and other receivables	13
Note 9. Cash and cash equivalents	14
Note 10. Reserves and retained earnings	14
Note 11. Non-controlling interests	14
Note 12. Borrowings	14
Note 13. Provisions	15
Note 14. Trade and other payables	16
Note 15. Other gains/(losses) - net	16
Note 16. Finance income	16
Note 17. Finance costs	16
Note 18. Income tax expense	17
Note 19. Earnings per share	17
Note 20. Related parties	17
Note 21. Discontinued operations	18
Note 22. Contingencies	19
Note 23. Events after the reporting period	19
Note 24. Note added for translation	19
SECURITIES ISSUED BY THE COMPANY AND OTHER GROUP COMPANIES, HELD BY BOARD MEMBERS	21
● Detail of securities issued by the Company and other group companies, held by board members of Novabase S.G.P.S.	23

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I. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS for the period of 6 months ended 30 June 2017

Condensed Consolidated Interim Statement of Financial Position as at 30 June 2017

		(Amounts expressed in thousands of Euros)
	Note	30.06.17	31.12.16
Assets
Non-Current Assets
Property, plant and equipment	6	8,914	8,899
Intangible assets	6	17,613	18,104
Investments in associates		541	575
Financial assets at fair value through profit or loss		4,259	4,353
Held-to-maturity investments Deferred tax assets	7	866 9,256	4,859 9,545
Other non-current assets	20	5,132	5,132
Total Non-Current Assets		46,581	51,467
Current Assets
Inventories		65	486
Trade and other receivables	8	38,186	92,712
Accrued income		20,224	15,081
Income tax receivable		3,568	3,394
Derivative financial instruments		68	19
Other current assets		2,040	1,886
Held-to-maturity investments		6,298	4,441
Cash and cash equivalents	9	67,109	35,703
Total Current Assets		137,558	153,722
Assets from discontinued operations	21	-	-
Total Assets		184,139	205,189
Equity
Share capital		15,701	15,701
Treasury shares		(188)	(4)
Share premium		43,560	43,560
Reserves and retained earnings		19,546	16,071
Profit for the period		3,924	9,577
Total Equity attributable to owners of the parent		82,543	84,905
Non-controlling interests	11	8,868	8,151
Total Equity		91,411	93,056
Liabilities
Non-Current Liabilities
Borrowings	12	16,917	18,897
Provisions	13	6,876	9,109
Total Non-Current Liabilities		23,793	28,006
Current Liabilities
Borrowings	12	6,276	6,916
Trade and other payables	14	38,235	47,414
Income tax payable		6	6
Derivative financial instruments		1	82
Deferred income and other current liabilities		22,417	27,709
Total Current Liabilities		66,935	82,127
Liabilities from discontinued operations	21	2,000	2,000
Total Liabilities		92,728	112,133
Total Equity and Liabilities		184,139	205,189

THE CERTIFIED ACOUNTANT THE BOARD OF DIRECTORS

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Condensed Consolidated Interim Statement of Profit and Loss

for the period of 6 months ended 30 June 2017

		(Amounts expressed in thousands of Euros) 6 M *
	Note	30.06.17	30.06.16 (*)
Continuing Operations
Sales	5	1,295	104
Services rendered	5	71,073	63,992
Cost of sales		(661)	(69)
External supplies and services		(30,472)	(21,723)
Employee benefit expense		(43,453)	(38,674)
Other gains/(losses) - net	15	7,591	425
Depreciation and amortisation		(1,533)	(1,786)
Operating Profit		3,840	2,269
Finance income	16	1,568	411
Finance costs	17	(1,780)	(1,143)
Share of (loss)/profit of associates		(34)	(38)
Profit Before Income Tax		3,594	1,499
Income tax expense	18	(938)	(92)
Profit from continuing operations		2,656	1,407
Discontinued operations
Profit from discontinued operations	21	2,696	2,992
Profit for the period		5,352	4,399
Profit attributable to:
Owners of the parent		3,924	2,776
Non-controlling interests	11	1,428	1,623
		5,352	4,399
Earnings per share from continuing and discontinued operations
attributable to owners of the parent (Euros per share)
Basic earnings per share
From continuing operations	19	0.04 Euros	(0.01) Euros
From discontinued operations	19	0.09 Euros	0.10 Euros
From profit for the period	19	0.13 Euros	0.09 Euros
Diluted earnings per share
From continuing operations	19	0.04 Euros	(0.01) Euros
From discontinued operations	19	0.09 Euros	0.10 Euros
From profit for the period	19	0.13 Euros	0.09 Euros

(*) Restated to show continuing operations separately from discontinued operations (IMS Business) - see note 21.

6 M * - period of 6 months ended

THE CERTIFIED ACOUNTANT THE BOARD OF DIRECTORS

Condensed Consolidated Interim Statement of Comprehensive Income

for the period of 6 months ended 30 June 2017

		(Amounts expressed in thousands of Euros)
		6 M *
	Note	30.06.17	30.06.16
Profit for the period		5,352	4,399
Other comprehensive income for the period
Exchange differences on foreign operations		(1,333)	(3,754)
Other comprehensive income for the period		(1,333)	(3,754)
Total comprehensive income for the period		4,019	645
Total comprehensive income attributable to:
Owners of the parent		3,302	386
Non-controlling interests		717	259
		4,019	645

6 M * - period of 6 months ended

THE CERTIFIED ACOUNTANT THE BOARD OF DIRECTORS

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Condensed Consolidated Interim Statement of Changes in Equity for the period of 6 months ended 30 June 2017

(Amounts expressed in thousands of Euros)

		Attributable to owners of the parent
	Note	Share capital	Treasury shares	Share premium	Legal reserves	Stock reserves	Reserves options and retained -controlling earnings	Non interests	Total Equity
Balance at 1 January, 2016		15,701	(6)	43,560	3,140	-	19,077	8,194	89,666
Profit for the period		-	-	-	-	-	2,776	1,623	4,399
Other comprehensive income for the period		-	-	-	-	-	(2,390)	(1,364)	(3,754)
Total comprehensive income for the period		-	-	-	-	-	386	259	645
Transactions with owners
Dividends	10, 11	-	-	-	-	-	(3,767)	(585)	(4,352)
Treasury shares movements		-	2	-	-	-	9	-	11
Transactions with owners		-	2	-	-	-	(3,758)	(585)	(4,341)
Changes in ownership interests in subsidiaries that do not result in a loss of control
Transactions with non-controlling interests		-	-	-	-	-	-	-	-
Balance at 30 June, 2016		15,701	(4)	43,560	3,140	-	15,705	7,868	85,970
Balance at 1 January, 2017		15,701	(4)	43,560	3,140	-	22,508	8,151	93,056
Profit for the period		-	-	-	-	-	3,924	1,428	5,352
Other comprehensive income for the period		-	-	-	-	-	(622)	(711)	(1,333)
Total comprehensive income for the period		-	-	-	-	-	3,302	717	4,019
Transactions with owners
Dividends	10, 11	-	-	-	-	-	(4,654)	-	(4,654)
Treasury shares movements		-	(184)	-	-	-	(826)	-	(1,010)
Transactions with owners		-	(184)	-	-	-	(5,480)	-	(5,664)
Changes in ownership interests in subsidiaries that do not result in a loss of control
Transactions with non-controlling interests		-	-	-	-	-	-	-	-
Balance at 30 June, 2017		15,701	(188)	43,560	3,140	-	20,330	8,868	91,411

THE CERTIFIED ACOUNTANT THE BOARD OF DIRECTORS

Condensed Consolidated Interim Statement of Cash Flows for the period of 6 months ended 30 June 2017

	(Amounts expressed in thousands of Euros)
	6 M *
Note	30.06.17	30.06.16
Cash flows from operating activities
Net Cash from / (used in) operating activities	(1,962)	4,390
Cash flows from investing activities
Receipts:
Proceeds from sale of subsidiaries, associates and other partic. companies Proceeds from loans granted to associates and participated companies	41,063 750	73 -
Disposal of financial assets held-to-maturity	1,426	-
Proceeds from sale of property, plant and equipment	96	10
Interest received	526	442
	43,861	525
Payments:
Purchases of financial assets held-to-maturity Purchases of property, plant and equipment	- (231)	(4,717) (795)
Purchases of intangible assets	(156)	(174)
	(387)	(5,686)
Net Cash from / (used in) investing activities	43,474	(5,161)
Cash flows from financing activities
Receipts:
Proceeds from borrowings	-	4,989
	-	4,989
Payments:
Repayments of borrowings	(2,927)	(2,117)
Dividends paid 10, 11	(4,654)	(4,976)
Payment of finance lease liabilities Interest paid	(502) (409)	(520) (553)
Purchase of treasury shares	(1,010)	(40)
	(9,502)	(8,206)
Net Cash from / (used in) financing activities	(9,502)	(3,217)
Cash, cash equivalents and bank overdrafts at beg. of period 9	35,703	24,293
Net increase / (decrease) of cash, cash equivalents and bank overdrafts	32,010	(3,988)
Effect from exchange rate fluctuations on cash held	(604)	(1,733)
Cash, cash equivalents and bank overdrafts at end of period 9	67,109	18,572
6 M * - period of 6 months ended

THE CERTIFIED ACOUNTANT THE BOARD OF DIRECTORS

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Selected Notes to the Condensed Consolidated Interim Financial Statements

for the period of 6 months ended 30 June 2017

1. General information

Novabase, Sociedade Gestora de Participações Sociais, SA (hereinafter referred to as Novabase or Group), with its head office in Av. D. João II, 34, Parque das Nações, 1998-031 Lisbon, Portugal, holds and manages financial holdings in other companies as an indirect way of doing business, being the Holding Company of Novabase Group.

Novabase is listed on the Euronext Lisbon.

These condensed consolidated interim financial statements were approved for issue by the Board of Directors on July 27, 2017. In the opinion of the Board of Directors these financial statements fairly present the Group operations, as well as its financial position, financial performance and cash flows.

2. Significant accounting policies

These condensed consolidated interim financial statements for the period of six months ended 30 June 2017 have been prepared in accordance with IAS 34, 'Interim financial reporting'. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with IFRSs, as adopted by the European Union (EU).

These financial statements are presented in thousands of euros (EUR thousand).

These financial statements have not been audited.

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2016, as described in those financial statements. No standard or interpretation that became effective in this period is material for the Group.

Taxes on income in this interim period were accrued using the tax rate that would be applicable to expected total annual earnings for the year 2017.

3. Critical accounting estimates and judgements

The preparation of interim financial statements requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant estimates and judgments made are the same as those that applied to the consolidated financial statements for the year ended 31 December 2016.

4. Seasonality

The activity of Business Solutions is usually lower in 3rd quarter due to holiday period.

5. Segment information

At the end of 2016, as the result of the sale agreement of Infrastructures & Managed Services business entered into with VINCI Energies Portugal SGPS, S.A. (see note 21), the IMS Business was discontinued. This situation led to the restatement of the figures presented in June 2016.

	Business	Venture		Disc. operations
	Solutions	Capital	NOVABASE	IMS
At 30 June 2016
Total segment Sales and services rendered	87,423	2,492	89,915	45,886
Inter-segment Sales and services rendered	25,431	388	25,819	4,320
Sales and services rendered	61,992	2,104	64,096	41,566
Depreciation and amortisation	(1,483)	(303)	(1,786)	(465)
Operating profit/(loss)	2,660	(391)	2,269	2,635
Finance costs – net	(824)	92	(732)	1,175
Share of (loss)/profit of associates	-	(38)	(38)	-
Income tax expense	(193)	101	(92)	(818)
Profit/(Loss) from operations	1,643	(236)	1,407	2,992
Other information:
(Provisions) / Provisions reversal	305	(104)	201	712
	Business	Venture		Disc. operations
	Solutions	Capital	NOVABASE	IMS
At 30 June 2017
Total segment Sales and services rendered	90,561	2,595	93,156	-
Inter-segment Sales and services rendered
	20,386	402	20,788	-
Sales and services rendered	70,175	2,193	72,368	-
Depreciation and amortisation	(1,352)	(181)	(1,533)	-
Operating profit/(loss)	4,221	(381)	3,840	2,696
Finance costs – net	(126)	(86)	(212)	-
Share of (loss)/profit of associates	-	(34)	(34)	-
Income tax expense	(676)	(262)	(938)	-
Profit/(Loss) from operations	3,419	(763)	2,656	2,696
Other information:

6. Property, plant and equipment and intangible assets

During the periods ended at 30 June 2017 and 30 June 2016, the movements in the net book value of property, plant and equipment and intangible assets, were as follows:

	Property, plant	Intangible
	and equipment	assets
Net book value at 1 January 2016	9,704	29,304
Acquisitions / increases	1,229	174
Write-offs / disposals	(228)	-
Exchange differences	(23)	-
Depreciation and amortisation	(1,075)	(1,176)
Net book value at 30 June 2016	9,607	28,302
Net book value at 1 January 2017	8,899	18,104
Acquisitions / increases	1,573	156
Write-offs / disposals	(680)	-
Exchange differences	8	-
Depreciation and amortisation	(886)	(647)
Net book value at 30 June 2017	8,914	17,613

7. Deferred tax assets and liabilities

The movement in the deferred tax assets was as follows:

	30.06.17	31.12.16
Balance at 1 January	9,545	16,352
Change in consolidation perimeter	-	(542)
Exchange differences	35	(478)
Profit or loss charge	(324)	(5,787)
Balance at the end of the period	9,256	9,545

The movement in deferred tax assets during the period, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

	Tax	Tax	Provisions /
	Losses	Incentives	Adjustments	Total
Balance at 1 January 2016	3,993	9,867	2,492	16,352
Profit or loss charge Change in consolidation perimeter	(2,845) (542)	(3,467) -	525 -	(5,787) (542)
Exchange differences	(478)	-	-	(478)
Balance at 31 December 2016	128	6,400	3,017	9,545
Profit or loss charge Exchange differences	1,508 35	(95) -	(1,737) -	(324) 35
Balance at 30 June 2017	1,671	6,305	1,280	9,256

8. Trade and other receivables

	30.06.17	31.12.16
Trade receivables	39,762	60,199
Allowance for impairment of trade receivables	(6,306)	(11,160)
	33,456	49,039
Prepayments to suppliers	539	562
Employees	115	95
Value added tax	2,316	2,297
Receivables from related parties	465	1,215
Financial holdings disposal	-	38,365
Receivables from financed projects	1,427	1,449
Other receivables	988	821
Allowance for impairment of other receivables	(1,120)	(1,131)
	4,730	43,673
	38,186	92,712

Movements in allowances for impairment of trade and other receivables are analysed as follows:

	Trade receivables		Other receivables		Total
	30.06.17	31.12.16	30.06.17	31.12.16	30.06.17	31.12.16
Balance at 1 January	11,160	5,763	1,131	3,356	12,291	9,119
Change in consolidation perimeter	-	(1,835)	-	(5)	-	(1,840)
Impairment	1,249	10,306	-	992	1,249	11,298
Impairment reversal	(5,768)	(2,088)	-	-	(5,768)	(2,088)
Exchange differences	(246)	(2)	(11)	(6)	(257)	(8)
Write-offs	(89)	(984)	-	(3,206)	(89)	(4,190)
Balance at the end of the period	6,306	11,160	1,120	1,131	7,426	12,291

9. Cash and cash equivalents

With reference to the consolidated statement of cash flows, the detail and description of Cash, cash equivalents and bank overdrafts is analysed as follows:

	30.06.17	31.12.16
- Cash	29	8
- Short term bank deposits	67,080	35,695
Cash and cash equivalents Caixa e equivalentes a caixa	67,109	35,703
- Overdrafts	-	-
	67,109	35,703

A short-term bank deposit in the amount of USD 613 thousand is captive and was given as collateral until July 31, 2017.

10. Reserves and retained earnings

In the General Meeting of Shareholders held on May 2017, it was approved the distribution to the shareholders of EUR 4,710 thousand, corresponding to 0.15 Euros per share. The payment occurred in May 2017.

		30.06.17	30.06.16
	Payment to shareholders	4,654	3,767
	Remuneration of the treasury shares held by the Company	56	1
		4,710	3,768
	11. Non-controlling interests	30.06.17	31.12.16
	Balance at 1 January	8,151	8,194
(*)	Distribution of dividends to non-controlling interests	-	(585)
	Exchange differences on foreign operations	(711)	(929)
	Profit attributable to non-controlling interests	1,428	1,471
	Balance at the end of the period	8,868	8,151

(*) In 2016, Celfocus distributed dividends to its shareholders.

12. Borrowings

	30.06.17	31.12.16
Non-current
Bank borrowings	11,532	13,907
Finance lease liabilities	5,385	4,990
	16,917	18,897
Current
Bank borrowings	4,745	5,376
Finance lease liabilities	1,531	1,540
	6,276	6,916
Total borrowings	23,193	25,813

The periods in which the current bank borrowings will be paid are as follows:

	30.06.17	31.12.16
6 months or less 6 to 12 months	2,370 2,375	3,006 2,370
	4,745	5,376
The maturity of non-current bank borrowings is as follows:
	30.06.17	31.12.16
Between 1 and 2 years Between 2 and 5 years Over 5 years	3,832 7,700 -	4,407 9,100 400
	11,532	13,907
The effective interest rates at the reporting date were as follows:
	30.06.17	31.12.16
Bank borrowings	2.347%	3.124%
Gross finance lease liabilities – minimum lease payments:
	30.06.17	31.12.16
No later than 1 year Between 1 and 5 years	1,745 5,760	1,770 5,224
	7,505	6,994
Future finance charges on finance leases	(589)	(464)
Present value of finance lease liabilities	6,916	6,530
The present value of finance lease liabilities is analysed as follows:
	30.06.17	31.12.16
No later than 1 year Between 1 and 5 years	1,531 5,385	1,540 4,990
	6,916	6,530

13. Provisions

Movements in provisions are analysed as follows:

		Legal		Other Risks
	Warranties	Claims	Restructuring and Charges		Total
Balance at 1 January 2016	199	50	60	11,188	11,497
Additional provisions	4	130	-	2,475	2,609
Reversals / utilisations	(148)	(50)	(60)	(4,373)	(4,631)
Change in consolidation perimeter	(55)	-	-	(312)	(367)
Exchange differences	-	-	-	1	1
Balance at 31 December 2016	-	130	-	8,979	9,109
Additional provisions	-	-	-	2	2
Reversals / utilisations	-	(130)	-	(2,105)	(2,235)
Exchange differences	-	-	-	-	-
Balance at 30 June 2017	-	-	-	6,876	6,876

14. Trade and other payables

	30.06.17	31.12.16
Trade payables	5,366	7,242
Remunerations, holiday and holiday and Christmas allowances	11,137	8,567
Bonus	6,421	8,583
Ongoing projects	3,856	3,335
Value added tax	1,114	3,334
Social security contributions	1,231	2,051
Income tax withholding	1,166	1,579
Amount to be paid to non-controlling interests	5	5
Employees	615	528
Prepayments from trade receivables	37	5
Other accrued expenses	6,649	6,835
Other payables	638	5,350
	38,235	47,414

15. Other gains/(losses) - net

	30.06.17	30.06.16
Impairment and impairment reversal of trade and other receivables	4,519	(74)
Impairment and impairment reversal of inventories	42	(1)
Warranties provision	-	-
Legal claims provision	130	-
Provisions for other risks and charges	2,103	276
Other operating income and expense	797	224
	7,591	425

16. Finance income

	30.06.17	30.06.16
Interest received	753	225
Positive exchange differences	815	102
Fair value of financial assets adjustment	-	84
	1,568	411

17. Finance costs

	30.06.17	30.06.16
Interest expenses
- Borrowings	(249)	(250)
- Finance lease liabilities	(130)	(82)
- Other interest	-	(6)
Bank guarantees charges	(93)	(41)
Bank services	(59)	(72)
Negative exchange differences	(1,157)	(692)
Fair value of financial assets adjustment	(84)	-
Loss on disposal of financial assets	(8)	-
	(1,780)	(1,143)

18. Income tax expense

The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average rate applicable to profits of the consolidated entities as follows:

	30.06.17	30.06.16
Profit before income tax	3,594	1,499
Income tax expense at nominal rate (21% in 2017 and 2016)	755	315
Tax benefit on the net creation of employment for young and long term unemployed people	(156)	(139)
Provisions and amortisations not considered for tax purposes	210	-
Recognition of tax on the events of previous years	51	(12)
Associates' results reported net of tax	7	8
Autonomous taxation	296	313
Losses in companies where no deferred tax is recognised	(324)	-
Expenses not deductible for tax purposes	(90)	98
Differential tax rate on companies located abroad	221	(113)
Research & Development tax benefit	(120)	(429)
Municipal surcharge and State surcharge	54	46
Impairment of Special Payment on Account, tax losses and withholding taxes	34	5
Income tax expense	938	92
Effective tax rate	26.1%	6.1%
19. Earnings per share
	30.06.17	30.06.16

Weighted average number of ordinary shares in issue	31,049,781	31,387,775
Stock options adjustment	-	-
Adjusted weighted average number of ordinary shares in issue	31,049,781	31,387,775
Profit attributable to owners of the parent	3,924	2,776
Basic earnings per share (Euros per share)	0.13 Euros	0.09 Euros
Diluted earnings per share (Euros per share)	0.13 Euros	0.09 Euros
Profit from continuing operations attributable to owners of the parent	1,228	(216)
Basic earnings per share (Euros per share)	0.04 Euros	(0.01) Euros
Diluted earnings per share (Euros per share)	0.04 Euros	(0.01) Euros
Profit from discontinued operations attributable to owners of the parent	2,696	2,992
Basic earnings per share (Euros per share)	0.09 Euros	0.10 Euros
Diluted earnings per share (Euros per share)	0.09 Euros	0.10 Euros

20. Related parties

For reporting purposes, related parties include subsidiaries, associates, shareholders with management influence, key elements in the Group management and entities that provide management services to the Group (Autonomy Mastery and Purpose, S.A. and Groovesnore Investimentos Imobiliários, Lda).

i)	Key management compensation
		30.06.17	30.06.16
(*)	Wages and other short-term employee benefits Stock options granted	2,920 -	2,069 -
		2,920	2,069

(*) Regarding the balance presented in June 2016, EUR 159 thousand were considered as part of discontinued operations, therefore were not included in this note.

ii) Other balances with related parties

		Non-current		Current (note 8)
	30.06.17	31.12.16	30.06.17	31.12.16
Loan to Powergrid, Lda	2,050	2,050	-	-
Loan to Bright Innovation, Lda	1,477	1,477	-	-
Loan to SmartGeo Solutions, Lda	99	99	-	-
Loan to Radical Innovation, Lda	994	994	-	-
Loan to Power Data, Lda	248	248	-	-
Loan to City Pulse, Lda	2,410	2,410	-	-
Loan to Livian Technologies, Lda	1,292	1,292	450	1,200
Loans to other shareholders	-	-	15	15
	8,570	8,570	465	1,215
Provisions for loans granted to related parties	(3,438)	(3,438)	-	-
	5,132	5,132	465	1,215

21. Discontinued operations

At October 12, 2016, Novabase has entered into a sale and purchase agreement with VINCI Energies Portugal, SGPS, S.A. ("VINCI Energies"), to sell its Infrastructures & Managed Services business ("IMS Business"), through the sale of the shares representing the whole share capital of Novabase IMS (further to the carve-out of the assets which were not part of the IMS Business), and two other companies to which the IMS Business developed by Novabase Digital TV and by Novabase Serviços would be transferred. The price agreed was EUR 38,365 thousand, to be paid on the date of completion of the transaction, subject to certain adjustments, as established in the sale and purchase agreement.

The sale was substantially completed, namely through the approval of the Competition Authority, at the end of 2016. As a result, Novabase recorded, with reference to December 31, 2016, the gain generated by the sale of the IMS Business to VEP, in the amount of EUR 17,567 thousand.

In the first half of 2017, the final calculation of working capital and net debt as established in the purchase and sale agreement took place, and the final price was revised to EUR 41,061 thousand, resulting in an adjustment to the gain generated by the sale of the IMS business in the amount of EUR 2,696 thousand.

In the statement of profit and loss, comparatives were restated to show continuing operations separately from discontinued operations.

A. Results of discontinued operations

	30.06.17	30.06.16
Revenue	-	41,808
Expenses	-	(37,998)
Results from operating activities	-	3,810
Income tax	-	(818)
Results from operating activities, net of tax	-	2,992
Gain on sale of IMS Business	2,696	-
Income tax on gain on sale of IMS Business	-	-
Profit from discontinued operations, net of tax	2,696	2,992
B. Cash flows from (used in) discontinued operations

30.06.17 30.06.16 Cash flows from operating activities - 5,570 Cash flows used in investing activities - (4,565) Cash flows from financing activities - 20 Net cash flows for the period from discontinued operations - 1,025

Also, there is a provision of EUR 2 Million recorded for responsibilities associated to the disposal of IMS Business, under the 'Liabilities from discontinued operations' caption in the consolidated statement of financial position. During the first half of 2017, the provision was not used.

22. Contingencies

Given the disclosed in the annual financial statements for the year 2016, the significant changes in the judicial processes are the following:

• Novabase Neotalent is defendant in a claim by a former services provider who is arguing that he had an employment contract since October 2002, and claims the payment of holiday and Christmas allowances and training credits since the starting date in the total amount of 185,999 Euros. The defendant argued against the plaintiff's claims maintaining that the relation was that of a provision of services and that plaintiff signed a termination agreement on December 15, 2015 and stated that there was nothing more was due in light of the contract therein ending. The Parties reached an agreement, putting an end to the procedure, whereby Novabase Neotalent paid the claimant a compensation in the amount of EUR 30 thousand.
• Celfocus has been served with two procedures from the Instituto de Gestão Financeira da Segurança Social regarding the alleged absence of payment of social security contributions of some months of the years 2011 to 2015, and 2015 / 2016 in the total amount of 93,000 Euros. The company has filed opposition regarding the allegations demonstrating compliance with applicable laws, payment of all amounts due and providing documents to that respect. In one of the procedures, the IGFSS has accepted Celfocus' s claim and has terminated the procedure in the amount of EUR 27 thousand. The second procedure is pending analysis and decision from the IGFSS.

23. Events after the reporting period

No events worthy of note happened until the date of conclusion of this report.

24. Note added for translation

These financial statements are a translation of financial statements originally issued in Portuguese. In the event of discrepancies, the Portuguese language version will prevail.

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II. SECURITIES ISSUED BY THE COMPANY AND OTHER GROUP COMPANIES, HELD BY BOARD MEMBERS

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	Share Capital	Total Number of Shares / Quotas	Number of Shares / Quotas held by Board Members at 31.12.16	Transactions	Number of Shares / Quotas held by Board Members at 30.06.17	% held by Board Members at 30.06.17
Novabase SGPS, S.A.	15,700,697 €	31,401,394	10,715,761	65,281	10,781,042	34.3%
José Afonso Oom Ferreira de Sousa			10,057	(10,056)	1	0.0%
Pedro Miguel Quinteiro Marques de Carvalho			2,289,068	0	2,289,068	7.3%
Luís Paulo Cardoso Salvado			65,282	(65,281)	1	0.0%
Francisco Antunes			30,335	0	30,335	0.1%
HNB - SGPS, SA (a)			8,321,019	140,618	8,461,637	26.9%
NBASIT - Sist. Inf e Telecomunicações, S.A. 47,500,000 AOA		100,000	400	0	400	0.4%
Francisco Paulo Figueiredo Morais Antunes			200	0	200	0.2%
Luís Paulo Cardoso Salvado			200	0	200	0.2%
CelFocus, S.A.	100,000 €	100,000	1	0	1	0.0%
José Afonso Oom Ferreira de Sousa			1	0	1	0.0%
FeedZai, S.A.	154,377 €	20,316,971	225,001	0	225,001	1.1%
Pedro Miguel Quinteiro Marques de Carvalho			225,001	0	225,001	1.1%

(a) José Afonso Oom Ferreira de Sousa and Luís Paulo Cardoso Salvado are shareholders of this company.

Novabase reports as directors the company HNB - S.G.P.S., S.A. and the board members of the Company.

DETAIL ON SECURITIES ISSUED BY THE COMPANY AND OTHER GROUP COMPANIES, HELD BY BOARD MEMBERS OF NOVABASE S.G.P.S.

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STATEMENT OF COMPLIANCE

(Unaudited)

NOVABASE S.G.P.S., S.A.

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Statement of the Board of Directors (Free translation from the original version in Portuguese)

Under the terms of sub-paragraph c) paragraph 1 of article 246 of the Portuguese Securities Code, the members of the Board of Directors of Novabase S.G.P.S., S.A., below identified declare that to the extent of their knowledge:

(i) the information contained in the condensed consolidated interim financial statements and all other accounting documentation required by law or regulation, regarding the period of six months ended 30 June 2017, was prepared in compliance with the applicable accounting standards and gives a true and fair view of the assets and liabilities, financial position and results of Novabase S.G.P.S., S.A. and the companies included in the consolidation perimeter; and

(ii) the interim management report faithfully states the evolution of the businesses, of the performance and of the position of Novabase S.G.P.S., S.A. and the companies included in the consolidation perimeter, containing namely an accurate description of the main risks and uncertainties which they face.

Lisbon, July 27, 2017

Luís Paulo Cardoso Salvado Chairman and CEO

Francisco Paulo Figueiredo Morais Antunes CFO

José Afonso Oom Ferreira de Sousa Non-Executive member of the Board

Pedro Miguel Quinteiro Marques de Carvalho Non-Executive member of the Board

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