COFINA : SGPS, S.A. announces 2016 Annual Report and Accounts approved at the AGM held on April 26, 2017

ANNUAL REPORT December 31, 2016 ANNUAL REPORT 2016

(This is a translation of a document originally issued in Portuguese. In the event of discrepancies, the Portuguese language version prevails.)

INDEX

INTRODUCTION 3 MACROECONOMIC BACKGROUND 4 STOCK EXCHANGE EVOLUTION 5 GROUP'S ACTIVITY 7 FINANCIAL REVIEW 8 ACTIVITY DEVELOPED BY THE NON-EXECUTIVE MEMBERS OF THE BOARD OF DIRECTORS 11 2017 OUTLOOK 12 PROPOSALS OF THE BOARD OF DIRECTORS FOR APPROPRIATION OF THE NON CONSOLIDATED NET PROFIT FOR THE YEAR 13 CORPORATE GOVERNANCE 15 LEGAL MATTERS 51 CLOSING REMARKS 53 STATEMENT UNDER THE TERMOS OF ARTICLE 245, PARAGRAPH 1, C) OF THE SECURITIES CODE ...................................................................................................................................................................... 58 DECLARATION OF RESPONSIBILITY 55 APPENDIX I 56 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 64 DIRECTORS' REPORT December 31, 2016 ANNUAL REPORT 2016

I. Directors' Report

To the Shareholders

Pursuant to the legal requirements, the Board of Directors of Cofina, S.G.P.S., S.A. (Public Company) hereby presents its Director's Report for the year 2016. According to number 6 of article 508 - C of the Commercial Companies Code, the Board of Directors decided to submit a single Board of Directors' Report, fulfilling all legal requirements.

INTRODUCTION

The agencies' advertising market has maintained the trend started in the last quarter of 2013, with another growth in comparison to the previous year.

However, the press segment has been the only segment that has recorded a decrease, corresponding to 18%, when compared to 2015.

For 2017, a moderate growth of the advertising investment is expected, based on the anticipated increase in private consumption. However, it is very difficult to predict the size and consistency of that trend.

In terms of market share, the Group continued to maintain the leadership of its main products.