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IR - Estoril-Sol, SGPS,S.A. - disclose 2019 1st Quarter Consolidated Accounts

Company: Estoril-Sol S.A. Date: 2019-05-30 Language: English Register to download
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## Contents

**08**

Management Report

Holders of qualified shareholdings

Consolidated Financial Statements

Notes to the Consolidated Financial Statements

### Governing Bodies

6

### **BOARD OF THE ANNUAL GENERAL MEETING**

*Chairman* Pedro Canastra de Azevedo Maia

*Deputy-Chairman*

Tiago Antunes da Cunha Ferreira de Lemos

*Secretary* Marta Horta e Costa Leitão Pinto Barbosa

### **BOARD OF DIRECTORS**

*Chairman* Stanley Hung Sun Ho

*Chairman* Mário Alberto Neves Assis Ferreira Patrick Wing Ming Huen

### *Members*

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 Dias Urbano de Magalhães Queiroz

### **ADVISORY BOARD**

*Chaiman* Rui José da Cunha

### **AUDIT BOARD**

*Chairman* Manuel Maria Reis Boto

*Deputy-Chairman* Vitor Pratas Sevilhano Ribeiro Paulo Ferreira Alves

*Alternate* Lisete Sofia Pinto Cardoso

### **REMUNERATION COMMITTEE**

Pansy Catilina Chiu King Ho Jorge Armindo de Carvalho Teixeira Calvin Ka Wing Chann

### **COMPANY SECRETARY**

*Secretary* Carlos Alberto Francisco Farinha

*Alternate* Artur Conde de Magalhães Mateus

### **STATUTORY AUDITORv**

Deloitte & Associados, SROC, S.A. Representada por Pedro Miguel Argente de Freitas e Matos Gomes

## Interim

8

### Management Report

### Interim Management Report

### **1. THE COMPANY**

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

On 18 March 2002, Estoril-Sol, S.A. modified its legal status to "Holding Company, S.G.P.S.", 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.

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

During the first quarter of the year we monitor regularly and in detail the current management of the subsidiaries, giving particular attention and support to streamline processes and control costs.

### **2. SHARE CAPITAL, SHARES AND DIVIDENDS**

At 31st March 2019, the share capital of ESTORIL-SOL, S.G.P.S., S.A. was 59.628.420 Euros, represented by 11.993.684 shares with a nominal unit value of 5 (five).

At the time this report was prepared, Estoril-Sol, S.G.P.S., S.A. held 62.565 treasury shares, with no trading taking place during the financial year.

**<sup>01.</sup>** Estoril-Sol, S.G.P.S., S.A. - Shares price evolution **02.** Date for disclosing Estoril-Sol, S.G.P.S.,

S.A. information

| DISCLOSURE  | 2018 Results                                                  |
|-------------|---------------------------------------------------------------|
| DATE        | 29/04/2019                                                    |
| QTD.        | 2298                                                          |
| PRICE (EUR) | Open<br>9,80<br>Close<br>9,80<br>Min.<br>9,80<br>Máx.<br>9,80 |

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

The Company's shares are listed on the Lisbon Stock Exchange since February 14, 1986.

The price and trading volume of Estoril-Sol, S.G.P.S., SA securities, on the dates of reporting to the market during the first quarter of 2019 were according table **02**.

As at March 31st, 2019 the Company had two reference shareholders, which control 90,46% of the share capital, as infographics to the right.

### **3. ESTORIL-SOL GROUP**

On March 31st, 2019, ESTORIL-SOL, S.G.P.S., S.A. had the following stakes in the following subsidiaries:

Other Shareholders Treasury Shares Finansol, Sociedade de Controlo, S.G.P.S., S.A. Amorim, Entertainment e GamingInternational,S.G.P.S., S.A.

### 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, S.G.P.S., 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. 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, S.G.P.S., 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.).

### 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, S.G.P.S., S.A..

### ESTORIL-SOL (V)

### Investimentos Imobiliários, S.A.

Its share capital of EUR 50,000 is fully paid up by Estoril-Sol, S.G.P.S., 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, S.A.

With a share capital of EUR 2,429,146, is 100% held by Estoril-Sol, S.G.P.S.,

Estoril-Sol Group

Holds 10% of its Share Capital

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

### **4. ESTORIL-SOL FINANCIAL ANALYSIS**

### **1ST QUARTER SUMMARY**

### Game Revenues

During the first quarter of 2019 the total gross game revenues of the Estoril-Sol Group (territorial and online) amounted to 54,8 million Euros, with an overall growth of 1,5%. Game revenues generated by the territorial operation decreased 4,3% and amounted to 46,2 million Euros. Revenues from the territorial operation fell in all casinos of Group Estoril-Sol, with special relevance for Casino Estoril and Casino da Póvoa. Online game revenues grew 50,9% driven by sports betting and amounted to 8,6 million Euros — see **4A** and **4B**.

### Group Consolidated Results

In the first quarter of 2019 the Group's Consolidated EBITDA decreased by 14% and amounted to 9,2 million Euros. As at 31st March 2019 the Group reported positive consolidated net results of 4,5 million Euros, an overall decrease of 18% compared to the same period from last year — see **4C**.

### Performance by Segment/Casino

During the first quarter of 2019 all of the Group land based casinos worsened their results compared to the same period last year. Casino Estoril and Casino Póvoa Casino have negative net results, but the operating results of these casinos are positive.

The online operation significantly improved its results in the first quarter of 2019. This improvement stems essentially from the good performance of gaming revenues, which has occurred both in casino games and in the sports betting segment — see infographic **4D**.

### Capex

The Group's investment remained in line with previous years, although it has slightly decreased. In the first quarter of 2019, the Group made investments totaling 0,2 million Euros — see **4E**.

### 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. By the end of March 2019 the Group bank debt was 3,9 million Euros — see **4F**.

### **5. FINANCIAL ANALYSIS CONSOLIDATED ACCOUNTS**

During the first quarter of 2019, the Group recorded combined gross game revenues, territorial and online, of 54,8 million Euros, with an overall growth

of 1,5%. Net from gaming taxes, the Group's total game revenues amounted to 25,7 million Euros, a decrease of 2,2% over the 26,2 million Euros achieved in the first quarter of the previous year.

The net game revenue decrease is related to the application of the annual gaming tax minimum consideration in the case of Casino da Póvoa and with the sports betting taxes whose tax base is the value of the bets placed by the players and not the gross revenue (total bets placed minus players winnings) as in other casino games, be it territorial or online. Casino da Póvoa gross game revenues decrease and the exponential growth in gaming revenues generated by sports betting are the basis of an higher effective tax rate borne by the Group when compared to the previous year, which leads to the Group net game revenues decrease.

The other operating revenues of Estoril-Sol, restaurant and entertainment, decreased by 2,8% to 2,2 million Euros. The Group's 4,4% increase in operating costs reflects the Group's investment in streamlining and increasing the entertainment, leisure and restaurant offer in the casinos, but mainly reflects the strong investment in marketing and advertising carried out by the Group in the first quarter of 2019 related with the online casino operation. This strong commitment and investment during the first quarter of 2019, in line with the investment policy also adopted during the last year, proved to be essential to the growth and market share increase of this new operation, the online casino.

The increase in gaming revenues in the first quarter of 2019 was not enough to keep up with the strong marketing and advertising investment, combined with the increase in the effective tax rate borne by the Group (from 51% in 2018 to 53% in 2019) led to a deterioration of the Group's operating results by 13,5%, with the Group registering a positive

### **4B** Game Revenue per Casino

Million Euros

**4C** EBITDA/Consolidated Net Result 7,8M 9,9M 10,7M 9,2M 2015 2016 2017 2018 0 €2M €4M €6M €8M €10M €12M 1,6 4,5 5,5 4,5 Million Euros

EBITDA Resultado Líquido Consolidado

**4F** Financial Debt

Million Euros

55,7M 35,2M 13,1M 3,9M 2016 2017 2018 2019 0 €10M €20M €30M €40M €50M €60M

**4D** EBITDA/Net Result

Million Euros

### **5** Consolidated Income Statement

|                                       | Mar 2019    | Mar 2018    | Var. % |
|---------------------------------------|-------------|-------------|--------|
| Gaming Revenue                        | 54 816 275  | 54 018 764  | 1,5%   |
| Special Gaming Tax                    | -29 107 783 | -27 719 531 | a)     |
| Effective Tax Rate                    | 53%         | 51%         |        |
| Game Revenue - Net                    | 25 708 492  | 26 299 233  | -2,2%  |
| Other revenue ( F&B / Entertainment ) | 2 240 990   | 2 305 322   | -2,8%  |
| Operating costs                       | -18 691 836 | -17 904 085 | 4,4%   |
| EBITDA                                | 9 257 646   | 10 700 470  | -13,5% |
| Amortization and Depreciation         | -4 651 149  | -4 893 312  | -4,9%  |
| Financial Costs                       | -82 741     | -213 588    | -61%   |
| Consolidated net result               | 4 523 756   | 5 593 570   | -19%   |
| Equity holders of the Parent Company  | 3 557 350   | 4 957 842   |        |
| Non-controlling interests             | 966 406     | 635 728     |        |
|                                       | 4 523 756   | 5 593 570   |        |
|                                       |             |             |        |

EBITDA of 9,2 million Euros in the first quarter of 2019 compared to the 10,7 million Euros reached in 2018.

The Consolidated Net Profit in the first quarter of 2019 was positive by 4,5 million Euros compared with earnings of 5,5 million Euros in the previous year. Of these 4,5 million Euros, 3,5 million Euros belong to the shareholders of Estoril-Sol, S.G.P.S., S.A, and the remainder held by minority and non-controlling interests.

### **6. RELEVANT FACTS**

During the first quarter of 2013, after a unanimous vote taken at the headquarters of the Portuguese Association of Casinos as well as within the Board of Estoril-Sol, 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 checked 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 that was not to challenge with the competent Administrative and Fiscal Courts the settlements of tax to which they were presented, and for that purpose submit 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, or paid or its payment was legally postponed under Decree-Law 1/2015, and for this reason the Group Estoril-Sol does not have any overdue debt related with game taxes. (note 15 and 16 to the consolidated accounts).

### **7. SUBSEQUENT FACTS**

Between the 31st of March 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, S.G.P.S.,S.A. and the other Companies of the Group.

### **8. DECLARAÇÃO DO CONSELHO DE ADMINISTRAÇÃO**

Within the terms of paragraph c) nº1 of article 246 of Portuguese Securities Code, we hereby inform you that to the best of our knowledge:

• The information contained in the interim management report is a faithful statement of the evolution of the business, of the performance and of the position of Estoril-Sol, S.G.P.S., S.A., and the companies includ-ed within the consolidation perimeter, and contains a description of the main risks and uncertainties which they face;

• The information contained in the consolidated financial statements, as well as their annexes, was pro-duced in compliance with the applicable accounting standards and gives a true and fair view of the as-sets and liabilities, the financial situation and the results of Estoril-Sol, S.G.P.S., S.A. and the companies included in the consolidation perimeter.

### **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

Estoril, 29th May, 2019

### Holders of qualified Shareholdings

### **FINANSOL, SOCIEDADE DE CONTROLO, S.G.P.S., S.A.**

On 31st March 2019, Estoril-Sol, S.G.P.S., S.A. held 62.565 treasury shares, and as Finansol - Sociedade de Controlo, S.G.P.S., S.A., on 31st March 2019, held 6.930.604 shares of Estoril-Sol, S.G.P.S., 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, S.G.P.S., 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 31st March 2019, Estoril-Sol, S.G.P.S., S.A. held 62.565 treasury shares, and, as Amorim – Entertainment e Gaming International, S.G.P.S., 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, S.G.P.S., S.A..

Mr. José Américo Amorim Coelho, held 34,915 shares of Estoril-Sol, S.G.P.S., S.A., corresponding to 0,29% of the share capital and voting rights.

Therefore, in overall terms, the direct and indirect stake of Amorim – Entertainment e Gaming International, S.G.P.S., S.A. in the share capital of Estoril-Sol, S.G.P.S., S.A. was, on 31st March 2019, 32,67% and 33,13% of the voting rights.

## Financial

# Statements

### **CONSOLIDATED STATEMENTS OF THE FINANCIAL POSITION ON MARCH 31ST, 2019 AND DECEMBER 31ST 2018**

Amounts in Euros

|                                                          | Notes | 31-03-2019   | 31-12-2018   |
|----------------------------------------------------------|-------|--------------|--------------|
| ASSETS                                                   |       |              |              |
| NON-CURRENT ASSETS                                       |       |              |              |
| Tangible fixed assets:                                   |       |              |              |
| Reversible to the State                                  |       | 26 989 067   | 29 738 634   |
| Not reversible to the State                              |       | 53 370 593   | 53 741 203   |
| Tax deductions on investments                            |       | (11 045 962) | (12 185 193) |
|                                                          |       | 69 313 698   | 71 294 644   |
| Intangible assets                                        | 10    | 25 697 132   | 28 061 255   |
| Investment properties                                    |       | 186 305      | 187 693      |
| Other non current assets                                 |       | 51 496       | 46 907       |
| TOTAL NON-CURRENT ASSETS                                 |       | 95 248 631   | 99 590 499   |
| CURRENT ASSETS                                           |       |              |              |
| Inventories                                              |       | 6 921 033    | 6 936 186    |
| Accounts receivable - trade                              |       | 422 477      | 507 686      |
| Current tax assets                                       |       | 34 200       | 34 200       |
| Other current assets                                     |       | 2 051 563    | 3 362 737    |
| Cash and cash equivalents                                | 11    | 45 675 496   | 53 470 364   |
| TOTAL CURRENT ASSETS                                     |       | 55 104 769   | 64 311 172   |
| TOTAL ASSETS                                             |       | 150 353 400  | 163 901 670  |
|                                                          |       |              |              |
| EQUITY AND LIABILITIES                                   |       |              |              |
| EQUITY                                                   |       |              |              |
| Capital                                                  |       | 59 968 420   | 59 968 420   |
| Treasury shares                                          |       | (708 306)    | (708 306)    |
| Share issue premiuns                                     |       | 960 009      | 960 009      |
| Legal Reserves                                           |       | 7 688 178    | 7 688 178    |
| Other Reserves and Retained earnings                     | 12    | 24 505 423   | 10 753 303   |
| Consolidated net profit                                  | 17    | 3 557 350    | 13 752 121   |
| Equity attributable to the holders of the Parent Company |       | 95 971 074   | 92 413 725   |
| Equity attributable to non-controlling interests         | 13    | 4 480 380    | 3 513 973    |
| TOTAL EQUITY                                             |       | 100 451 454  | 95 927 699   |
| LIABILITIES                                              |       |              |              |
| Non-current Liabilities:                                 |       |              |              |
| Other non-current liabilities                            | 15    | 2 489 616    | 2 489 616    |
| Provisions                                               |       | 9 156 205    | 9 023 428    |
| Total non-current liabilities                            |       | 11 645 821   | 11 513 044   |
| Current Liabilities:                                     |       |              |              |
| Financial debt                                           | 14    | 3 983 000    | -            |
| Current tax liabilities                                  |       | -            | 114 645      |
| Other current liabilities                                | 15    | 34 273 125   | 56 346 283   |
| Total current liabilities                                |       | 38 256 126   | 56 460 928   |
| TOTAL LIABILITIES                                        |       | 49 901 946   | 67 973 971   |
| TOTAL EQUITY AND LIABILITIES                             |       | 150 353 400  | 163 901 670  |

### **CONSOLIDATED INCOME STATEMENT OF THE PERIODS ENDED ON 31ST MARCH, 2019 AND 2018**

Amounts in Euros

|                                                             | Notes | 31-03-2019   | 31-03-2018   |
|-------------------------------------------------------------|-------|--------------|--------------|
| REVENUE                                                     |       |              |              |
| Gaming revenues                                             | 6     | 54 816 275   | 54 018 764   |
| Gaming taxes                                                | 6     | (29 107 783) | (27 719 531) |
|                                                             |       | 25 708 492   | 26 299 233   |
| Other operating revenue                                     | 6     | 2 240 990    | 2 305 322    |
|                                                             |       | 27 949 482   | 28 604 555   |
|                                                             |       |              |              |
| OPERATING EXPENSES                                          |       |              |              |
| Cost of sales                                               |       | (754 548)    | (696 165)    |
| Supplies and external services                              | 7     | (8 908 428)  | (8 275 368)  |
| Wages and salaries                                          | 8     | (8 456 041)  | (8 296 434)  |
| Depreciation and amortization                               |       | (4 507 149)  | (4 893 312)  |
| Impairments - accounts receivable ( (increases)/reversals ) |       | -            | 300          |
| Provisons ( (increases)/reversals )                         |       | (144 000)    | -            |
| Other operating expenses                                    |       | (572 820)    | (636 417)    |
| Total operating expenses                                    |       | (23 342 986) | (22 797 397) |
| INCOME BEFORE FINANCIAL RESULTS AND TAXES                   |       | 4 606 497    | 5 807 158    |
|                                                             |       |              |              |
| FINANCIAL (LOSSES) AND GAINS                                |       |              |              |
| Financial losses                                            | 9     | (92 384)     | (226 360)    |
| Financial gains                                             | 9     | 9 643        | 12 772       |
|                                                             |       | (82 741)     | (213 588)    |
| Income before taxes                                         |       | 4 523 756    | 5 593 570    |
| Income taxes                                                |       | -            | -            |
| Consolidated Net Income                                     | 17    | 4 523 756    | 5 593 570    |
| Attributable to:                                            |       |              |              |
| Equity holders of the Parent Company                        |       | 3 557 350    | 4 957 842    |
| Non-controlling interests                                   | 13    | 966 406      | 635 728      |
|                                                             |       | 4 523 756    | 5 593 570    |
| Net result per share                                        |       |              |              |
| Basic and diluted                                           | 17    | 0,30         | 0,42         |

### **CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIODS ENDED 31ST MARCH 2019 AND 2018**

Amounts in Euros

|                                                                                       | Share<br>Capital | Treasury<br>Shares | Issue<br>Premiums | Legal<br>Reserve | Other<br>Reserves<br>& Retained<br>Earnings | Consolidated<br>net result of<br>the year | Total      | Non<br>controlling<br>interests<br>(Note 13) | Total<br>Equity |
|---------------------------------------------------------------------------------------|------------------|--------------------|-------------------|------------------|---------------------------------------------|-------------------------------------------|------------|----------------------------------------------|-----------------|
| Balance at 01st 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<br>net profit of the year ended<br>31st December 2017 | -                | -                  | -                 | -                |                                             | 10 675 008 (10 675 008)                   | -          | -                                            | -               |
| Consolidated Other Comprehensive<br>Income (OCI) of the year ended 31st<br>March 2018 | -                | -                  | -                 | -                | -                                           | 4 957 842                                 | 4 957 842  | 635 728                                      | 5 593 570       |
| Balance at 31st March 2018                                                            | 59 968 420       | (708 306)          | 960 009           | 7 154 428        | 15 884 053                                  | 4 957 842                                 | 88 216 446 | 3 904 578                                    | 92 121 024      |
| Balance at 01st 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<br>net profit of the year<br>ended 31st December 2018 | -                | -                  | -                 | -                |                                             | 13 752 121 (13 752 121)                   | -          | -                                            | -               |
| Consolidated Other Comprehensive<br>Income (OCI) of the year ended 31st<br>March 2019 | -                | -                  | -                 | -                | -                                           | 3 557 350                                 | 3 557 350  | 966 406                                      | 4 523 757       |
| Balance at 31st March 2019                                                            | 59 968 420       | (708 306)          | 960 009           | 7 688 178        | 24 505 423                                  | 3 557 350                                 | 95 971 074 | 4 480 380                                    | 100 451 454     |

### **CONSOLIDATED CASH FLOW STATEMENTS FOR PERIODS ENDED 31STMARCH 2019 AND 2018**

Amounts in Euros

|                                                        | Notes | 31-03-2019   | 31-03-2018    |
|--------------------------------------------------------|-------|--------------|---------------|
| OPERATING ACTIVITIES:                                  |       |              |               |
| Receipts from clients                                  |       | 56 784 297   | 56 000 821    |
| Payments to suppliers                                  |       | (14 244 932) | (10 534 032)  |
| Payments to staff                                      |       | (7 312 462)  | (7 280 511)   |
| Cash flow generated by operations                      |       | 35 226 902   | 38 186 278    |
| Payment of income tax                                  |       | 11 918       | (3 577)       |
| Payment of Special Gaming tax                          |       | (46 383 623) | (37 456 794)  |
| Other payments relating to the operating activity      |       | (1 574 441)  | (1 072 790)   |
| Cash flow from operating activities (1)                |       | (12 719 243) | (346 884)     |
| INVESTING ACTIVITIES                                   |       |              |               |
| Receipts from:                                         |       |              |               |
| Loans to related parties                               |       | 1 700 000    | -             |
| Interest and similar income                            |       | 9 643        | 8 666         |
|                                                        |       | 1 709 643    | 8 666         |
| Payments in respect of:                                |       |              |               |
| Tangible fixed assets                                  |       | (656 504)    | (928 670)     |
| Loans to related parties                               |       | -            | (700 000)     |
|                                                        |       | (656 504)    | (1 628 670)   |
| Cash flow from investment activities (2)               |       | 1 053 139    | (1 620 004)   |
| FINANCING ACTIVITIES                                   |       |              |               |
| Receipts from:                                         |       |              |               |
| Bank loans obtained                                    |       | 28 149 032   | 174 592 915   |
|                                                        |       | 28 149 032   | 174 592 915   |
| Payments in respect of:                                |       |              |               |
| Bank loans repaid                                      |       | (24 166 032) | (167 418 715) |
| Interest and similar costs                             |       | (111 764)    | (248 153)     |
|                                                        |       | (24 277 796) | (167 666 868) |
| Cash flow from financing activities (3)                |       | 3 871 236    | 6 926 047     |
|                                                        |       |              |               |
| Variation in cash and cash equivalents (4)=(1)+(2)+(3) |       | (7 794 868)  | 4 959 159     |
| Cash and cash equivalents at the start of the period   | 11    | 53 470 364   | 24 998 841    |
| Cash and cash equivalents at the end of the period     | 11    | 45 675 496   | 29 958 000    |

### Notes to the Financial Statements

### **1. INTRODUCTION**

The Estoril-Sol Group, through its subsidiary and associated companies (Note 4), conducts business in gaming, the restaurant sector, entertainment and also real estate.

Estoril-Sol, S.G.P.S, S.A. is the Holding Company of the Estoril-Sol Group ("Group") and the shares representing its share capital are admitted for trading on a regulated market - the Euronext – as such, on 1 January 2005 it was obliged to prepare Consolidated Accounts pursuant to article 3 of Regulation (EC) no. 1606/2002, of the European Parliament and of the Council, of 19 July, following the Portuguese government's publication of Decree Law no. 35/2005, article 11.

### **2. MAIN ACCOUNTING POLICIES**

### 2.1. Bases of presentation

The attached financial statements were prepared on the assumption of the continuity of operations, based on the books and accounting records of the companies included in the consolidation (Note 4), adjusted to comply with the provisions of the IAS 34 as adopted in the European Union and should be read together with the consolidated financial statements for the year ended 31st December 2018.

The interim financial information now disclose was not subjected to an external audit or limited review.

### **3. JUDGMENTS OF VALUE, CRITICAL ASSUMPTIONS AND MAIN SOURCES OF UNCERTAINTY ASSOCIATED TO ESTIMATES**

During the period ended on 31st March 2019, there were no changes in accounting policies in relation to those used in the preparation and presentation of the financial statements of the year ended on 31st December 2018, nor were any material errors recognised relating to previous periods.

### **4. COMPANIES INCLUDED IN THE CONSOLIDATION AND ASSOCIATE COMPANIES**

### 4.1 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 31st March 2019 and 31st December 2018 are the following:

|                                                                    |                 | Method of     | Effective percentage of the capital held |               |  |
|--------------------------------------------------------------------|-----------------|---------------|------------------------------------------|---------------|--|
| Name                                                               | Head Office     | Consolidation | March 2019                               | December 2018 |  |
| 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            |  |

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, S.G.P.S., 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 capi-tal 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.).

### **5. REPORTING BY SEGMENTS**

The segments reportable by the Group are based on the identification of segments in line with the financial information that is reported internally to the Board of Directors and which supports the Board in its evaluation of the performance of the businesses and in taking decisions with regard to the allocation of the resources to be used. The segments identified by the Group for reporting by segments, are therefore consistent with the way in which the Board of Directors analyses its business, corresponding to:

- the Estoril Gaming Concession the Estoril Casino and Lisbon Casino;
- the Póvoa de Varzim Faming Concession the Póvoa Casino;
- the Online gambling license to Casino Online and Sports Betting;
- and "Others", essentially including the effect of the holding companies and of the other operating activities of the Group.

On 31st March 2019 and 2018, the information by business segment, is as follows:

| 31 March 2019         |                         |                  |             |                          |                           |           |             |  |  |
|-----------------------|-------------------------|------------------|-------------|--------------------------|---------------------------|-----------|-------------|--|--|
|                       | Estoril Game Concession |                  |             | Póvoa Game<br>Concession | License for<br>Online     |           |             |  |  |
|                       | Estoril<br>Casino       | Lisboa<br>Casino | Sub-Total   | Póvoa<br>Casino          | Gambling<br>Online Casino | Other     | Total       |  |  |
| Net assets            | 48 152 845              | 60 160 952       | 108 313 798 | 19 296 096               | 13 907 107                | 8 836 399 | 150 353 400 |  |  |
| Net liabilities       | 6 286 090               | 14 524 981       | 20 811 072  | 18 494 584               | 5 097 913                 | 5 498 377 | 49 901 946  |  |  |
| Result of the segment | (135 390)               | 3 811 881        | 3 676 491   | (848 938)                | 1 932 721                 | (236 518) | 4 523 756   |  |  |
| Investment assets:    |                         |                  |             |                          |                           |           |             |  |  |
| Tangible fixed        | 66 724                  | 100 624          | 167 348     | -                        | -                         | -         | 167 348     |  |  |

| 31 March 2018         |                                                    |                         |                           |                       |            |           |             |  |  |
|-----------------------|----------------------------------------------------|-------------------------|---------------------------|-----------------------|------------|-----------|-------------|--|--|
|                       |                                                    | Estoril Game Concession | Póvoa Game<br>Concession  | License for<br>Online |            |           |             |  |  |
|                       | Sub-Total<br>Estoril<br>Lisboa<br>Casino<br>Casino | Póvoa<br>Casino         | Gambling<br>Online Casino | Other                 | Total      |           |             |  |  |
| Net assets            | 29 844 569                                         | 74 324 977              | 104 169 547               | 25 333 326            | 13 907 107 | 7 539 794 | 150 949 774 |  |  |
| Net liabilities       | 7 761 414                                          | 14 697 336              | 22 458 750                | 26 818 382            | 5 097 913  | 4 453 702 | 58 828 747  |  |  |
| Result of the segment | 131 870                                            | 4 327 717               | 4 459 587                 | 61 919                | 1 271 466  | (199 402) | 5 593 570   |  |  |
| Investment assets:    |                                                    |                         |                           |                       |            |           |             |  |  |
| Tangible fixed        | 243 614                                            | 229 934                 | 473 548                   | 4 443                 | 488        | -         | 478 479     |  |  |

### **6. OPERATING INCOME BY NATURE**

The consolidated operating income, in the periods ended on 31st March 2019 and 2018, is split in the following manner:

|                                                 |                | March 2019              |              |                          |                                   |              |
|-------------------------------------------------|----------------|-------------------------|--------------|--------------------------|-----------------------------------|--------------|
| Nature                                          |                | Estoril Game Concession |              | Póvoa Game<br>Concession | License for<br>Online<br>Gambling | Total        |
|                                                 | Estoril Casino | Lisboa Casino           |              | Póvoa Casino             | Online Casino                     |              |
| Gaming revenues:                                |                |                         |              |                          |                                   |              |
| Slot Machines                                   | 11 650 405     | 16 606 922              | 28 257 327   | 9 146 291                | 5 972 508                         | 43 376 126   |
| Table based gaming                              | 3 132 614      | 3 823 599               | 6 956 213    | 1 875 482                | 806 202                           | 9 637 897    |
| Sports betting                                  | -              | -                       | -            | -                        | 3 397 137                         | 3 397 137    |
| Bonuses and other fair value adjustments        | (47 325)       | (50 893)                | (98 218)     | 2 085                    | (1 498 752)                       | (1 594 885)  |
|                                                 | 14 735 694     | 20 379 628              | 35 115 322   | 11 023 858               | 8 677 095                         | 54 816 275   |
| Gaming taxes:                                   |                |                         |              |                          |                                   |              |
| Special Gaming Tax (current)                    | (7 391 510)    | (10 215 260)            | (17 606 770) | (5 510 887)              | (4 538 513)                       | (27 656 170) |
| Annual Gaming Tax (difference to minimum grant) | -              | -                       | -            | (1 451 614)              | -                                 | (1 451 614)  |
|                                                 | (7 391 510)    | (10 215 260)            | (17 606 770) | (6 962 500)              | (4 538 513)                       | (29 107 783) |
| Other operating revenues:                       |                |                         |              |                          |                                   |              |
| F&B and Entertainment                           | 1 203 619      | 149 916                 | 1 353 535    | 277 777                  | -                                 | 1 631 312    |
| Tax deductions - Entertainment                  | 232 330        | 204 305                 | 436 635      | 110 217                  | -                                 | 546 852      |
| Supplementary income                            | 50 748         | 7 109                   | 57 856       | 4 826                    | -                                 | 62 682       |
| Other                                           | 143            | 0                       | 143          | -                        | -                                 | 143          |
|                                                 | 1 486 840      | 361 330                 | 1 848 170    | 392 820                  | -                                 | 2 240 990    |
|                                                 | 8 831 024      | 10 525 698              | 19 356 722   | 4 454 178                | 4 138 582                         | 27 949 482   |

|                                                 |                         | March 2018    |              |                          |                                   |              |
|-------------------------------------------------|-------------------------|---------------|--------------|--------------------------|-----------------------------------|--------------|
| Nature                                          | Estoril Game Concession |               | Sub-Total    | Póvoa Game<br>Concession | License for<br>Online<br>Gambling | Total        |
|                                                 | Estoril Casino          | Lisboa Casino |              | Póvoa Casino             | Online Casino                     |              |
| Gaming revenues:                                |                         |               |              |                          |                                   |              |
| Slot Machines                                   | 11 843 552              | 16 887 532    | 28 731 084   | 9 523 551                | 4 649 043                         | 42 903 678   |
| Table based gaming                              | 3 906 537               | 4 197 611     | 8 104 148    | 2 038 257                | 882 810                           | 11 025 215   |
| Sports betting                                  | -                       | -             | -            | -                        | 1 730 408                         | 1 730 408    |
| Bonuses and other fair value adjustments        | (70 764)                | (40 171)      | (110 935)    | 27 374                   | (1 556 976)                       | (1 640 537)  |
|                                                 | 15 679 325              | 21 044 972    | 36 724 297   | 11 589 182               | 5 705 285                         | 54 018 764   |
| Gaming taxes:                                   |                         |               |              |                          |                                   |              |
| Special Gaming Tax (current)                    | (7 875 045)             | (10 542 572)  | (18 417 617) | (5 780 904)              | (2 491 924)                       | (26 690 444) |
| Annual Gaming Tax (difference to minimum grant) | -                       | -             | -            | (1 029 086)              | -                                 | (1 029 086)  |
|                                                 | (7 875 045)             | (10 542 572)  | (18 417 617) | (6 809 990)              | (2 491 924)                       | (27 719 531) |
| Other operating revenues:                       |                         |               |              |                          |                                   |              |
| F&B and Entertainment                           | 1 004 968               | 164 296       | 1 169 263    | 262 147                  | -                                 | 1 431 410    |
| Tax deductions - Entertainment                  | 285 001                 | 210 851       | 495 852      | 294 304                  | -                                 | 790 156      |
| Supplementary income                            | 35 559                  | 8 315         | 43 874       | 6 708                    | -                                 | 50 583       |
| Other                                           | 801                     | 32 372        | 33 172       | -                        | -                                 | 33 172       |
|                                                 | 1 326 329               | 415 833       | 1 742 162    | 563 159                  | -                                 | 2 305 322    |
|                                                 | 9 130 610               | 10 918 233    | 20 048 842   | 5 342 351                | 3 213 361                         | 28 604 555   |

Income from the segments comes from transactions with external customers. There are no transactions between segments. The accounting policies of each segment are the same as those of the Group.

### **7. EXTERNAL SUPPLIES AND SERVICES**

In the periods ended on 31st March 2019 and 2018, external supplies and services were as follows:

|                                 | March 2019 | March 2018 |
|---------------------------------|------------|------------|
| Gifts to customers              | 1 144 963  | 1 095 130  |
| Subcontracts                    | 1 089 054  | 962 652    |
| Advertising                     | 996 304    | 1 143 617  |
| Fees                            | 844 159    | 673 959    |
| Energy and other fluids         | 744 589    | 639 646    |
| Conservation and repairs        | 674 851    | 557 361    |
| Cleaning and laundry            | 642 075    | 620 446    |
| Financial services (comissions) | 570 446    | 427 750    |
| Specialized work                | 539 276    | 522 405    |
| Surveillance and security       | 504 290    | 408 990    |
| Royalties                       | 386 866    | 488 300    |
| Rents                           | 348 959    | 339 639    |
| Insurance                       | 104 881    | 102 694    |
| Communication                   | 79 493     | 81 985     |
| Travel and hotels               | 65 468     | 71 308     |
| Other                           | 172 755    | 139 486    |
|                                 | 8 908 428  | 8 275 368  |

### **8. STAFF COSTS**

In the periods ended on 31st March 2019 and 2018, staff costs were as follows:

|                                  | March 2019 | March 2018 |
|----------------------------------|------------|------------|
| Remuneration of governing bodies | 752 705    | 743 372    |
| Remuneration of staff            | 5 796 322  | 5 665 143  |
| Indemnities                      | 1 481      | 2 375      |
| Charges on remuneration          | 1 499 892  | 1 464 757  |
| Insurance                        | 24 424     | 56 292     |
| Social charges                   | 320 943    | 309 114    |
| Other                            | 60 273     | 55 383     |
|                                  | 8 456 041  | 8 296 434  |

### **9. NET FINANCIAL COSTS**

Financial costs and income for the periods ended on 31st March 2019 and 2018 is broken down as follows:

|                               | March 2019 | March 2018 |
|-------------------------------|------------|------------|
| FINANCIAL COSTS               |            |            |
| Interest borne:               |            |            |
| Financing from banks          | (60 288)   | (185 839)  |
| Finance and operating leasing | (32 096)   | (40 521)   |
|                               | (92 384)   | (226 360)  |
| FINANCIAL INCOME              |            |            |
| Interests from bank deposits  | -          | 4 106      |
| Exchange gains                | 2 481      | 2 892      |
| Other                         | 7 162      | 5 774      |
|                               | 9 643      | 12 772     |
| RESULTADOS FINANCEIROS        | (82 741)   | (213 588)  |

### **10. INTANGIBLE ASSETS**

The breakdown of intangible assets on 31st March 2019 and 31st December 2018 is as follows:

|                                           |                            | March 2019                  |            |  |
|-------------------------------------------|----------------------------|-----------------------------|------------|--|
| Gaming Cooncession                        | Gross Assets               | Accumulated<br>Amortization | Net Assets |  |
| Prémio da Concessão Jogo do Estoril       |                            |                             |            |  |
| Estoril Casino                            | 153 576 455                | (143 222 859)               | 10 353 596 |  |
| Lisboa Casino                             | 30 000 000<br>(26 269 950) |                             | 3 730 050  |  |
| Póvoa Gaming Concession - Casino da Póvoa | 77 034 109                 | (65 432 684)                | 11 601 425 |  |
|                                           | 260 610 564                | (234 925 493)               | 25 685 071 |  |
| Intangible assets - Online gaming license | 38 000                     | (32 200)                    | 5 800      |  |
| Intangible assets - Online sports betting | 14 000                     | (7 739)                     | 6 261      |  |
|                                           | 260 662 564                | (234 965 432)               | 25 697 132 |  |

|                                           | December 2018 |                             |            |
|-------------------------------------------|---------------|-----------------------------|------------|
| Gaming Cooncession                        | Gross Assets  | Accumulated<br>Amortization | Net Assets |
| Prémio da Concessão Jogo do Estoril       |               |                             |            |
| Estoril Casino                            | 153 576 455   | (141 676 612)               | 11 899 843 |
| Lisboa Casino                             | 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 | 38 000        | (29 200)                    | 8 800      |
| Intangible assets - Online sports betting | 14 000        | (6 572)                     | 7 428      |
|                                           | 260 662 564   | (232 601 309)               | 28 061 255 |

### **11. CASH AND CASH EQUIVALENTS**

On 31st March 2019 and 31st December 2018, this caption was broken down as follows:

|                                    | March 2019 | December 2018 |
|------------------------------------|------------|---------------|
| CASH                               | 8 071 819  | 7 736 393     |
| Bank Deposits:                     |            |               |
| Immediately avaiable bank deposits | 25 103 677 | 33 233 971    |
| Long term deposits (a)             | 12 500 000 | 12 500 000    |
| CASH AND CASH EQUIVALENTS          | 45 675 496 | 53 470 364    |

(a) Relating to bank deposits that may be immediately mobilized with risk of loss of interest.

### **12. OTHER RESERVES AND RETAINED EARNINGS**

The balance of this caption at 31st March 2019, corresponds to the value of the caption as at 31st December 2018 plus the net profit attributable to the parent company for the year 2018, amounting to 13,752,121 Euros, and as of this date, March 31st, 2019, had not yet been applied in accordance with the Proposal for the Application of Profits for the year 2018.

### **13. NON-CONTROLLING INTERESTS**

On 31st March 2019 and 31st December 2018, this caption was broken down as follows:

|                     | March 2019      |                             |           |                 |
|---------------------|-----------------|-----------------------------|-----------|-----------------|
| Company             | Opening Balance | Profit/(Loss) of the period | Dividends | Closing Balance |
| Estoril-Sol Digital | 3 513 973       | 966 406                     | -         | 4 480 380       |

|                     | December 2018   |                             |            |                 |
|---------------------|-----------------|-----------------------------|------------|-----------------|
| Company             | Opening Balance | Profit/(Loss) of the period | Dividends  | Closing Balance |
| Estoril-Sol Digital | 3 268 850       | 2 315 302                   | -2 070 179 | 3 513 973       |

### **14. FINANCIAL DEBT**

On 31st March 2019 and 31st December 2018, this caption was broken down as follows:

|                         | Mar 2019      |                     | Dec 2018      |                     |
|-------------------------|---------------|---------------------|---------------|---------------------|
| Nature of the financing | Nominal Value | Balance sheet Value | Nominal Value | Balance sheet Value |
| Current financing:      |               |                     |               |                     |
| Current accounts        | 3 983 000     | 3 983 000           | -             | -                   |
|                         | 3 983 000     | 3 983 000           | -             | -                   |
|                         | 3 983 000     | 3 983 000           | -             | -                   |

Some of the financing operations, mainly bank loans, include commitments to maintain certain financial ratios based on contractually negotiated limits (financial covenants).

These ratios are:

• Net Debt / Ebitda;

• Financial autonomy.

On the 31st March 2019 and 31st December 2018, these ratios were according the contractually negotiated limits.

Depending on the operating funds that are freed up, we feel the financial risk to which the associated undertak-ings 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.

The amount included in the column "Nominal value" corresponds to the contracted value that is still owing. The column "Balance sheet value" is added to the nominal value of financial charges already incurred but still not due, less interest and or commissions paid in advance.

### **15. OTHER CURRENT AND NON-CURRENT LIABILITIES**

On 31st March 2019 and 31st December 2018, this caption was broken down as follows:

|                                                       | March 2019 | December 2018 |
|-------------------------------------------------------|------------|---------------|
| OTHER ACCOUNTS PAYABLE - NON-CURRENT                  |            |               |
| Annual payment - Difference to minimum grant          |            |               |
| Installments payment schedule - approved for 2014 (a) | 2 489 616  | 2 489 616     |
|                                                       | 2 489 616  | 2 489 616     |
| OTHER ACCOUNTS PAYABLE - CURRENT                      |            |               |
| Current suppliers                                     | 4 356 392  | 8 796 236     |
| Suppliers of investments                              | 146 173    | 632 306       |
| State and Public Sector                               |            |               |
| Annual gaming payment                                 | 4 641 282  | 20 049 726    |
| Annual payment - Difference to minumum grant          |            |               |
| Related to current year                               | 1 451 614  | 4 098 106     |
| Installments payment schedule - approved for 2014 (a) | 1 244 808  | 1 244 808     |
| Special Gaming Tax (to be paid next month)            | 7 557 722  | 7 628 735     |
| Social Security contribuitons                         | 828 066    | 777 169       |
| Other in favour of the State                          | 731 348    | 1 103 788     |
| Clients advance payments (b)                          | 1 741 636  | 1 396 129     |
| Charges with holidays payable                         | 5 489 380  | 5 280 394     |
| Responsabilities for accumulated gaming premiums      | 2 124 854  | 2 102 089     |
| Other                                                 | 3 959 850  | 3 236 797     |
|                                                       | 34 273 125 | 56 346 283    |

- (a) These amounts are defined in payment plans approved by the Regulation and Inspection Service of Turismo de Portugal (SRIJ), which were being complied with, as follows:
- Instalments payment schedule approved for 2014, that will be paid in three equal annual instalments of 1.244.808 Euros, on December 31st, 2019, 2020 and 2021.
- (b) Clients advance payments: The value of "Clients advance payments" relate entirely to the online casino and refer to the balance of the internet website of the online casino, available for playing or withdraw at 31st March 2018.
- (c) This amount is related with liabilities for accumulated gaming prizes. These liabilities are revised on a monthly basis, according to the accumulated prizes announced in the diverse gaming rooms of the Casinos run by the Group .

### **16. 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 out-come, there will be no material effects that are not yet recognized in the financial statements as of March 31st, 2019 and December 31st, 2018. The most relevant processes are as follows:

### The main situations are the following:

• Differences in understanding between the Group and the Tax Authorities over Corporation Tax (IRC), relating to the years 2007, 2008, 2009 and 2010, with regard to the taxation of undocumented expenses incurred in the course of the gaming activity of subsidiaries that form part of the Group and which operate games of fortune as their main activity. During the year 2013 occurred the 1st instance verdict contrary to the allegations and convictions of the Group relating to the process for the years 2007 to 2009. It is the Company's belief, grounded in fa-vourable opinions from legal advisers, that a final decision should be favourable, which is why the Group appealed to higher courts. On the date of these financial statements there are also previous legal decisions that are in the Group's favour, as well as judicial jurisprudence which is favourable to the Group on this matter. Even so, on this date the Group has bank guarantees provided in favour of the Finance Office of Cascais amounting to 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 de-cision 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 recorded in the accounts to cover its liability, taking into account the legal opinions of its legal counsel, which amounts to approximately €+2,800,000 as of December 31, 2018.

• 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 March 31st, 2019 and December 31st, 2018

• On 31st March 2019 and 31st December 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 en-trance 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 March 31st, 2019 and December 31st, 2018, liabilities estimated at 147,000 Euros.

• 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 amount. The Board of Directors, supported by its legal advisors and the expert ev-idence 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 favourable outcome for the Group, for which a provision of approximately 200,000 Euros was recorded.

### 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 conces-sion. 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 2016, all settled in accordance with De-cree-Law - nº 275/2001, so that, in the opinion of the legal and tax advisors of the Group, in the case of favour-able 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 advi-sors, recognized the corresponding liability, considering the complaint presented on the amount of these court expenses, in the amount of 1,250,000 Euros.

### Guarantees provided

On 31st March 2019 and 31st December 2018 the guarantees provided by the Group were as follows:

|                                                 | Mar 2019   | Dec 2018   |
|-------------------------------------------------|------------|------------|
| Obligations related with the Special Gaming Tax | 7 567 703  | 26 577 964 |
| Tax lawsuits in hand / litigation               | 7 443 083  | 7 443 083  |
| Current suppliers                               | 39 250     | 39 250     |
|                                                 | 15 050 036 | 34 060 297 |

### **17. CONSOLIDATED RESULTS PER SHARE**

The consolidated result per basic share of the years ended on 31st March 2019 and 2018 was determined as follows:

| Rubrica                                                | Mar 2019   | Mar 2018   |
|--------------------------------------------------------|------------|------------|
| Results:                                               |            |            |
| Net profit of the Equity holders of the Parent Company | 3 557 350  | 4 957 842  |
| Number of shares:                                      |            |            |
| Average weighted number of shares in circulation       | 11 931 119 | 11 931 119 |
| Result per basic share, basic and diluted              | 0,30       | 0,42       |

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.

ESTORIL-SOL, S.G.P.S., S.A.

Capital social integralmente realizado 59.968.420 Euros Sociedade Anónima com sede na Av. Dr. Stanley Ho, Edifício do Casino Estoril, 2765-190 Estoril - Cascais