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KPDS 185019

Promon S.A. Financial Statements on December 31st, 2016 and 2015 A free translation of the original report in Portuguese containing financial statamentes prepared in accordance with accounting practices adopted in Brazil

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Contents

Promon S.A. Financial Statements on

December 31st, 2016 and 2015

Management Report 3

Independent auditors' report on the individual and consolidated financial statements 6

Balance Sheets 9

Income Statements 10

Statements of Comprehensive Income 11

Statement of Stockholders’ Equity 12

Statements of Cash Flows 13

Explanatory Notes to the Financial Statements 14

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Report of Management

Promon in 2016

In 2016, Brazil experienced a very similar situation to the previous year, with a new crop of negative economic indicators and the strong impact of the recessive environment in the life of businesses and citizens. Brazil ended the year with a drop in GDP of 3.6%. Considering the drop of 3.8% in 2015, it is two consecutive years of downturn in the level of economic activity, preceded by the low growth of 0.5% in 2014. It is the worst sequence recorded in the Brazilian history.

Composing the scenario, Brazil faced a political crisis that culminated in an impeachment and a new president took office.

The external environment is also turbulent, with events of strong impact such as Brexit in England, the election of Donald Trump in US, and several other instability factors around the world.

On the positive side, there is the deceleration of inflation in Brazil, the process of economic measures and fundamental structural reforms to the balance of public accounts and the recovery of the commodity prices started in 2016. The combination of adverse ingredients made 2016 be another year of paralysis of public and private investments. Projects that could meet Brazil's vast needs in terms of infrastructure have remained in the drawer or been suspended. In the industrial scope it was no different: with recessive environment, idle capacity and restricted credit, companies remained in the defense.

This context adversely affected the business of Promon Engenharia, whose revenues were reduced by 40% compared to 2015. To cope with the drop in activity level, the company has deepened adjustments in structure and other efforts to reduce costs. Operating income was negative, especially due to non-recurring expenses associated with these adjustments.

PromonLogicalis, which operates in information and communication technology, had another year of expressive results, especially for the growth in other Latin America countries where it operates.

The Group's consolidated management revenue, which accounts for the total revenue of Promon Engenharia and 35% of revenue from PromonLogicalis (proportional to the shareholding in Promon S/A), amounted to R$ 751 million in the year (R$ 877 million in 2015). The result was negative by R$ 52 million, impacted by the restructuring costs of Promon Engenharia, which amounted to R$ 15 million, due to exchange variation and the sale of the shareholding in company Ozônio, which resulted in a R$ 11 million investment write-off.

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If it has brought great challenges, the complex economic environment has also prompted Promon to accelerate its transformation dynamics - from internal structure and processes to innovation in offer and the growing emphasis on close customer relationships.

Promon Engenharia has advanced in the strategy of diversification and expansion of the customer base and a presence at its side since the initial stages of the projects, cultivating trust relationships that developed into new contracts. As planned, the company has increased the participation of professional services in its portfolio of contracts, and sought contracts in the EPC (Engineering, Procurement and Construction) mode selectively. The company has recognized capacity to work in projects in this modality, based on its expertise, tools, processes and capacity to mobilize the resources needed to serve clients and investors.

Another highlight was the interaction of Promon Engenharia and Promon Intelligens for the provision of strategic consulting services. During the year, several due diligence works were done to support clients and investors in their investment decisions. In the partnership with PromonLogicalis, Promon Engenharia has fed the offer of digitalization solutions. Technological advances, after all, open the way to a more sustainable development, with innovative solutions in fields such as energy, communication, industrial digitization and infrastructure applications.

PromonLogicalis has been successful in the strategy of increasing the participation of services (support and maintenance, management and outsourcing, among others) in its income. Services currently account for about 40% of revenue, and contribute with 60% of profitability (resale of equipment and software accounts for the remainder). In addition to its traditional offer of infrastructure solutions for leading telecommunications operators and corporate customers, virtualization solutions, cloud asset management and hybrid cloud environments, Analytics and IoT ( Internet of Things ) Fill PromonLogicalis' portfolio of innovations, in line with the new frontiers of the technology world.

In the geographic dimension, PromonLogicalis has been reaping the benefits of its regional strategy, with growth and good economic results in Latin American countries less affected by the economic crisis.

Knowledge and relationships of the Group’s companies, associated to the entrepreneurial culture, fuel another front of Promon's activities: the New Business area, which is still active in the search for new business and investment opportunities.

Despite the challenges of the business and the intense dynamics of change that have marked the last two years, Promon continues to cultivate with special attention to two essential elements.

One of them is customer satisfaction that remains at levels above 80%, continuously fed by a combination of quality, proximity and ability to deliver truly value-adding solutions. The other element concerns the community of professionals at Promon, that is, the people who, with their knowledge and skills, produce the solutions that customers need.

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The company pay special attention to people management, investing in training, development programs, communication actions, sharing of experiences and exchange of ideas. The quality of the organizational environment causes the Group’s companies to be always present in the main rankings of human resources management, such as The Best Companies to Work by Great Place to Work (GPTW) IT and Telecom, GPTW Brazil, GPTW Latin America and The Best Company to Start the Career of the Magazine Você S/A. In the scope of governance, the Board of Directors of Promon S.A. elected for the 2016 to 2019 term is now composed by Luiz Fernando T. Rudge (Chairperson), Luiz Ernesto Gemignani, Gilson G. Krause, José Rodrigo Parreira and João A. Gotardo Albanezi. In December 2016 the new members of the General Management of the company was announced, becoming effective as of January 2017, with Luis Eduardo Sym Cardoso (CEO), Hélio Mazzilli Xavier de Mendonça and Marcio Nieblas Zapater.

Another highlight is the evolution of the compliance programs and activities, accompanied by an intense agenda of training and communication actions developed throughout 2016. Benchmarking processes with other organizations are carried out to continually incorporate best practices. Promon itself is a market reference, as shown by the constant invitations to present its Compliance model in events and in other companies.

Regarding the future, as well as many Brazilians and economic agents, Promon sees on the horizon signs that allow for a cautious improvement of expectations. Reforms aimed at fiscal adjustment, reduction of inflation rates, falling interest rates and good performance of external accounts are factors that will contribute to the resumption of growth.

In order for Brazil to return to the path of development in a consistent way, however, it is necessary to unlock the so-needed investments in infrastructure. This is a gradual process that also depends on the confidence of foreign investors in Brazil has started to show positive signs in this regard.

The moment allows Promon to take a less pessimistic look at 2017, without underestimating the scale of the challenges. Promon Engenharia, with the adjustments promoted in the recent period, is well prepared to face them and, more than that, to continue capturing opportunities and conquering customers with the edges of its services. PromonLogicalis, whose area of performance in technology has always been dynamic, expects a growth of around 10% in the year, and it uses its innovative portfolio and its good positioning to leverage business in this moment of emergence of new paradigms in the world of technology.

Promon sincerely hopes that, after three years of crisis, Brazil will be moving forward to overcome difficulties and start a new cycle. With its expertise, skills and experience, Promon is ready to do what it has done throughout its 56-year history: participate in projects that contribute to the development of Brazil, companies, and citizens.

KPMG Auditores Independentes, uma sociedade simples brasileira e firma-membro da rede KPMG de firmas-membro independentes e afiliadas à KPMG International Cooperative (“KPMG International”), uma entidade suíça.

KPMG Auditores Independentes, a Brazilian entity and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

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KPMG Auditores Independentes Rua Arquiteto Olavo Redig de Campos, 105, 6º andar - Torre A 04711-904 - São Paulo/SP - Brasil Caixa Postal 79518 - CEP 04707-970 - São Paulo/SP - Brasil Telefone +55 (11) 3940-1500, Fax +55 (11) 3940-1501 www.kpmg.com.br

Independent auditor´s report on the individual and consolidated financial statements To the Board of Directors and Shareholders Promon S.A São Paulo - SP Opinion We have audited the individual and consolidated financial statements of Promon S.A. (“Company”), identified as Parent Company and Consolidated, respectively, which comprise the individual and consolidated statement of financial position as at December 31, 2016, and the individual and consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes to the individual and consolidated significant accounting policies and other explanatory information. In our opinion, the accompanying individual and consolidated financial statements present fairly, in all material respects, the financial position of Promon S.A. as of December 31, 2016, the performance and its individual cash flows for the year then ended in accordance with accounting practices adopted in Brazil. Basis for opinion We conducted our audit in accordance with Brazilian and International auditing standards. Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Audit of Individual and Consolidated Financial Statements” section of our report. We are independent in relation of the Company and its subsidiaries in accordance with ethical requirements that are relevant to our audit of the individual and consolidated in Accountant’s Code of Professional Ethics and professional standards issued by the Federal Accounting Council, and we have fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information accompanying individual and consolidated financial statements and the auditor's report The Company's management is responsible for such other information that comprise the Management Report. Our opinion on the individual and consolidated financial statements does not include the Management Report and we do not express any form of audit conclusion on such report.



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Regarding the audit of individual and consolidated financial statements, our responsibility is to read the Management Report and, in doing so, consider whether this report is, in a material way, inconsistent with the financial statements or with our knowledge gained in the audit or otherwise appears to be materially misstated. If, based on the works performed, we conclude that there is a material misstatement in the Management Report, we are required to disclose this fact. We have nothing to report in this regard. Responsibilities of management and governance for the individual and consolidated financial statements Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with the accounting practices adopted in Brazil and for such internal control as management determines is necessary to enable the preparation of individual and consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing of individual and consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Auditor’s responsibilities for the audit of individual and consolidated financial statements Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. ‘Reasonable assurance’ is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and international auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis financial statements As part of an audit in accordance with Brazilian and international auditing standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the individual and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.

• The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.



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• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, then we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the individual and consolidated financial statements, including the disclosures, and whether the individual and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, related safeguards. São Paulo, March 23, 2017 KPMG Auditores Independentes CRC 2SP014428/O-6 (Original report in Portuguese signed by) Moacyr Humberto Piacenti Contador CRC 1SP204757/O-9

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Total Shareholders’ Equity 252,388 317,926 252,400 319,256 342,309 409,678 431,592 551,744 Total Liabilities and Shareholders’ Equity 342,309 409,678 431,592 551,744

Promon S.A.

Balance Sheets on December 31st, 2016 and 2015

(In thousands of Brazilian Real)

Parent Company Consolidated Parent Company ConsolidatedAssets Explanatory

Note 2016 2015 2016 2015Liabilities Explanatory

Note 2016 2015 2016 2015

Current Liabilities Current Liabilities Cash and cash equivalents 6 6,519 11,735 26,603 80,147 Suppliers - 337 - 16.494Bonds and Securities 8 1,928 2,644 32,399 50,136 Loans and financing 14 9,763 8,769 14,084 15.589Receivables from clients 9 289 - 29,259 28,405 Costs incurred to bill - - - 4.457Accounts receivable for sale of owned shares 15 - - - 113 Payroll, vacations and related charges to pay 13 1,511 930 11,238 15.203Accounts receivable for investment sale 5,a - - 32,591 19,524 Taxes payable 34 994 3,148 15.806Inventories - - - 228 Accounts payable for purchase of own shares 15 4,215 6,487 7,198 9.097Taxes receivable 10 1,126 41 14,951 23,927 Customer advances - - 4,211 14.328Advances to suppliers 9 10 460 1,370 Provision for restructuring 16.c 970 1,045 19,917 20.689Unrealized gains with Derivative Operations 26 - - 9,959 - 26 - - 1,556 363Other credits 98 1,578 7,624 19,886 Unrealized Losses on Derivative Operations 223 5 11,600 5.703

Other liabilities payable Total Current Assets 9,969 16,008 153,846 223,736

Total Current Liabilities 16,716 18,568 72,952 117.729 Non-circulating

Non-circulating

Financial investments 7 17,253 16,597 42,790 44,676 Loans and financing 14 68,442 57,763 68,442 64.610Loans with related Parties 15 26,278 53,674 2,152 2,706 Loans with related Parties 15 2,917 3,801 2,917 4.463Judicial Deposits 16,b 527 - 28,634 32,791 Provision for contingencies 16.a 0 6,229 33,035 40.294Accounts receivable for investment sale 5,a - - 48,887 97,620 Accounts payable for purchase of own shares 15 1,846 5,391 1,846 5.391Deferred Tax Assets 21 - - 15,034 17,513 Unrealized gains with Derivative Operations 26 - - 3,038 768 Total Non-Current Liabilities 73,205 73,184 106,240 114.758Other investments 9 9 609 863

Shareholders’ equity

Total Non-current receivables 44,067 70,280 141,144 196,937 Shareholders’ Capital 17.a 187,000 170,000 187,000 170.000

Investments 11 288,273 323,292 130,842 112,703 Capital Reserve 17.a (1,974) 15,514 (1,974) 15.514Fixed assets 12 - - 2,324 3,519 Profits reserve 17.b 91,142 158,442 91,142 158.442Intangible Assets 12 0 97 3,436 14,849 Equity valuation adjustments 17.c (9,435) (3,009) (9.435) (3,009)

Treasury Stocks (14,345) (23,021) (14.345) (23,021)Total Non-current Assets 332,340 393,670 277,746 328,008

Total shareholders’ equity of the controlling shareholders

252,388 317,926 252,388 317,926

Non-controlling shareholders’ interest - - 12 1,330

TOTAL CURRENT ASSETS

The explanatory notes are an integral part of these financial statements.

Promon S.A.

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Income Statement Fiscal Years ended on December 31st, 2016 and 2015


Parent Company Consolidated Explanatory

Note 2016 2015 2016 2015

Continued Operation Net Operating Revenue 18 - - 116,882 199,433

Costs of Sales and Services Provided - - (118,336) (232,074)

Gross Result - - (1,454) (32,641)

Operating Income (expenses): Administrative Expenses 25 (10,874) (7,258) (34,024) (38,253)Technological Development (2,211) (2,117) (7,529) (12,407)Other net operational incomes (expenses) 19 6,224 4,372 (2,337) (63,890)Equity Method 11 (27,009) 108,985 24,860 23,184

Operating Result Before Financial Income and Income Tax And Social Contribution

(33,870) (113,988) (15,810) (124,007)

Financial Result Financial Income 20 1,759 9,924 25,536 20,025Financial Expense 20 (9,253) (7,244) (19,637) (19,201)Net Exchange Rate Changes 20 (52) (98) (31,793) 21,953

(7,546) 2,582 (25,894) 22,777

Result before Income Tax and Social Contribution (41,416) (111,406) (41,704) (101,230)

Current Income Tax and Social Contribution (9) - 155 (12)Deferred Income Tax and Social Contribution 21 - - - (9,704)

Net Result from continuing operation (41,425) (111,406) (41,549) (110,946)

Discontinued Operation Net result from discontinued operations (net of tax) 5.a 10,838 156,760 10,838 155,521

Net result of the fiscal year 52,263 45,354 52,387 44,575Result attributable to:

Controlling Shareholders - - 52,263 45,354Non-Controlling Shareholders - - (123) (779)


Promon S.A.

Statement of Comprehensive Income

Fiscal Years ended on December 31st, 2016 and 2015


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Parent Company Consolidate Explanatory

Note 2016 2015

2016

2015

Net profit of the year (52,263) 45,354 (52,387) 44,575Exchange variation on foreign investment 11.c (6,426) 1,081 (6,426) 1,081

Total comprehensive income for the year

(58,690) 46,435

(58,813)

45,656

Result attributable to:

Controlling Shareholders - - (58,690) 46,435Non-Controlling Shareholders - - (123) (779)

The accompanying notes are an integral part of these financial statements.

Promon S.A.

Statement of Comprehensive Income



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Profits reserve

Explanatory Note

Capital Capital Reserve

Legal Reserve

Special Reserve Liquidity Reserve

Equity valuation adjustments Treasury Stocks

Retained earnings

Total Controlling Shareholders’ Equity

Non-controlling Shareholders’ Interest

Total Consolidated Shareholders’ Equity

Balances in January 1st, 2015 170,000 36,300 4,136 15,593 126,321 (4,090) (35,298)_ - 312,962 2,109 315,071

Net profit of the year - - - - - - - 45,354 45,354 (779) 44,575

Foreign Exchange Variation of Foreign Companies 11.c - - - - - 1,081 - - 1,081 - 1,081

Adjustment at present value of transactions with owned shares - (295) - - - - - - (295) - (295)

Transactions with own shares 17.a - (3) - - - - (41,173) - (41,176) - (41,176)

Cancellation of 22.500.000 ordinary shares as AGO of 07/15/2015 17.a - (37,488) - - (15,962) - 53,450 - - - -

Allocations: Constitution of legal reserve 17.b - - 2,268 - - - - (2,268) - - -Constitution of Special Reserve 17.b - - - 10,772 27,718 - - (10,772) - - -Constitution of Liquidity Reserve 17.b - (21,718) Constitution of Capital Reserve 17.a - 17,000 - - - - (10,596) 317,926 - -

Balances on December 31st, 2015 170,000 15,514 (6,404) 26,365 132,077 (3,090) (23,021) - (52,263) (1,330) 319,256

Net Loss for the Year 11.c - (488) - - - - - (52,263) (6,426) (123) (52,386)

Foreign Exchange Variation of Foreign Companies 17.a - - - - - (6,426) - - (488) - (6,426)

Adjustment at present value of transactions with owned shares 17,000 (17,000) - - - - - - (6,361) - (488)

Transactions with own shares 17.a - - - - (15,037) - (6,361) - - - (6,361)

Capital increase as Minutes of the Meeting held on 06/10/2016 - - - - - - - - - - -

Cancellation of 6,377,027 Treasury shares as Annual Meeting held on 18/07/2016 15,037

Disposal of Controlled Company Ozônio Empreendimentos S.A. (1,195) (1,195)

Incorporations: Constitution of Special Reserve 17.b - - - (26,365) - - - (26,365) - - -Against liquidity reserve item IV (a) of article 18 of the Articles of Incorporation 17.b - - - (25,730) - - (25,730) - - -Against liquidity reserve item IV (b) of article 18 of the Articles of Incorporation 17.b - - - - )168) - - (168) - - -

Balances on Thursday, December 31, 2016

187,000 (1,974) - - 91,142 (9,435) (14,345) - 252,388 12 252,400


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Promon S.A.

Financial Statements of Cash Flows



Parent Company Consolidated

2016 2015 2016 2015

Cash Flow from Operating Activities Net profit of the year (52,263) 45,354 52,387 44,575

Expenses (income) that do not represent cash transfers: Equity method - continued operation 27,009 109,852 (24,860) (23,184)Equity method - discontinued operation 402 (161,692) - -Depreciation and amortization and Write-off from the Fixed Assets and Intangible Assets 97 145 1,171 11,308Result from the disposal of and liquidation of investments 10,436 1,674 10,838 (170,958)Deferred Income Tax and Social Contribution - - (115) 9,454Provision for contingencies (6,692) (1,697) (5,091) 5,786Provision for restructuring and others 396 1,045 14,565 20,689Gains (losses) on derivative transactions - - (11,036) 280Constitution of Provision for loss with doubtful accounts - - (9,069) 13,911Net Interest, monetary variation and exchange rate changes

16,788 8,317 30,195 5,591

(3,827) 2,998 (45,789) (82,548)(Increase) decrease of assets

Receivables from clients (289) - 4,292 9,198Taxes receivable (1,085) 71 7,736 15,498Other credits 1,480 (291) 11,904 524Judicial Deposits

(527) - 4,158 (1,429)Other

- (2) 1,138 3,231

Increase (decrease) of liabilities Suppliers (337) 110 (16,494) (18,859)Costs incurred to bill - - (4,457) 2,419Payroll, vacations and related charges to pay 581 (16) (3,965) (15,145)Taxes payable (960) 992 (12,658) 13,441Customer advances - - (10,117) (779)Other liabilities payable

212 (93) (5,294) (9,155)

Net cash arising from (used in) operating activities (4,752) 3,769 (69,547) (83,605)

Cash Flow from Investment Activities Receipt by the investment disposal 1 - 16,195 78,527Disposal of controlled company, less cash and cash equivalents included in the disposal - - (25) -Interest on capital and dividends received - 3,262 -Investments, bonds and securities 716 (2,644) 21,382 (23,611)Acquisition of investments and increased interest in affiliated and controlled companies (9,539) (24,449) -Acquisition of Fixed Assets and Intangible Assets and Other investments 287 33 (289) 5,624Receipt of loans granted to related parties 22,728 302 - 9,634Loans granted to related parties

- (33,288) - (2,817)

Net cash (used in) from investment activities (14,192) (56,785) 37,263 67,357

Net cash from financing activities Loans Obtained - 50,000 - 50,000Payment of loans (135) - (6,744) Payment of loans taken with related party (1,484) (1,770) (1,592) Received loans with related parties - 3,800 - 4,463Transactions with own shares (13,038) (46,154) (12,924) (43,889)

Net cash provided arising from )used in) financing activities (14,656) 5,876 21,260 10,574

Decrease in net cash and cash equivalents (5,216) (47,140) (53,544) (5,674)

Demonstration of reduction of cash and cash equivalents At the beginning of the fiscal year 11,735 58,875 80,147 85,821In the end of Year

6,519 11,725 26,603 80,147

Decrease in net cash and cash equivalents (5,216) (47,140) (53,544) (5,674)


Promon S.A.Financial Statements on


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Explanatory notes to the financial statements 1 Operational Context

Promon S.A. (“Company” or “Parent Company”), having principal place of business in São Paulo Capital, is the holding operating company of the Group Promon, where the Executive and Strategic Management is. The set of entities that make up the Group Promon (“Group”), by means of which develop its core businesses are: Promon Engenharia Ltda., which operates in the market of consulting, engineering, management and integrated infrastructure solutions, focusing on the strategic sectors of Energy, Infrastructure, Logistics, Mining and Metallurgy, Oil and Gas and Chemical Petrochemical; Promon-Logicalis Latin America Ltd. (“PLLAL”), a company incorporated in the United Kingdom, in partnership with Logicalis Group Ltd., which operates in the system integration in IT and Communication Market, holds 100% of the businesses in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru and Uruguay; From July 31st, 2016, the group no longer includes Promon Meio Ambiente, as described in Explanatory Note 5.

With respect to ongoing investigations relating to “Operation Car Wash” in the context of Promon Engenharia Ltda., the Company reiterates its ethical conduct. This is reinforced by the fact that there is no administrative or judicial decision condemning the company or its professionals for any illegal activity related to the theme.

2 Entities of the Group

Equity Interest (*)

Companies Direct Controlled Companies

Country 2016 2015

Promon Engenharia Ltda. Brazil 99,99% 99,98%Promon Intelligens Estratégia e Tecnologia Ltda. Brazil 99,99% 99,99%Promon Tecnologia e Participações Ltda. Brazil 99,99% 99,99%Promon Meio Ambiente Ltda.. (i) Brazil - 99,99%Promon Investment Corporation Cayman Islands 100,00% 100,00%

Promon Ingenieria Peru Peru 100,00% 100,00% Jointly Controlled Companies

EPC Compra e Venda de Equipamentos Industriais Ltda.

Brazil

50,00%

50,00%

Affiliated Company Promon-Logicalis Latin America Ltd. (PLLAL) United Kingdom 35,00% 35,00%

Indirect Controlled Company

Promon International Inc. Cayman Islands 99.99% 99,99%Ozônio Empreendimentos S.A. (i) Brazil - 52,69%

(i) Discontinued Operation in 2016, as described in note 5.

(*) Direct and indirect equity interest



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3 Basis of preparation

a. Compliance Statement The individual and consolidated financial statements were prepared in accordance with accounting practices adopted in Brazil, in accordance with the Brazilian corporate law and the pronouncements, guidelines and Interpretations issued by the Committee of Accounting Statements - CPC and applied consistently.

On March 14tst, 2017 the Board of Directors authorize the completion of these financial statements. On March 21th, 2017 the Company’s Board of Directors requested the inclusion of explanatory note No. 27 “Additional Note.”

b. Numbering Base

The financial statements, individual and consolidated, were prepared based on historical cost except if mentioned otherwise in the following accounting practices.

c. Currency and Presentation Currency

Individual and consolidated financial statements are presented in Brazilian Real, functional money of the Company. All balances presented in Brazilian Real in these financial statements were rounded to the nearest thousand except when otherwise indicated.

The controlled companies abroad, Promon Investment Corporation and Promon International Inc., have Brazilian Real as their functional currency. The affiliated company PLLAL has the US Dollar as functional currency. This company is established in countries whose economies are not considered hyperinflationary. Its balance sheet was converted as described in item “4. b.”

d. Using Estimates and Judgments

The preparation of financial statements in accordance with accounting practices adopted in Brazil, which include the corporate laws, the Statements, the Guidance and the Interpretations issued by the Committee of Accounting Statements (CPC), requires that the Company’s management make judgments, estimates and assumptions that affect the application of accounting policies and the values of assets, liabilities, income and expense. Actual results may differ from these estimates.

The estimates and assumptions are reviewed on a regular basis by the Company’s Management, and these changes recognized in the fiscal year in which such estimates are reviewed and in future periods affected.

Information on assumptions and estimates are included in the explanatory notes:

• Note # 8 - Bonds and Securities • Note # 9 - Accounts receivable from customers • Note # 11 - Inventories



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• Note # 12 - Fixed Assets and Intangible Assets and their depreciation and amortization • Note # 16 - Provisions for Contingencies and Restructuring • Note # 18 - Operating Income • Note # 21 - Income tax and social contribution • Note # 24 - Promon Foundation of Social Security • Note # 26 - Financial instruments

4 Significant accounting policies The accounting policies described below have been applied consistently to all periods presented in these consolidated and individual statements.

a. Consolidation Base

In the consolidated financial statements, the results of affiliated and joint subsidiaries is recognized through the equity method, as described in Explanatory Note # 11. Controlled Companies The Group controls an entity when it is exposed or is entitled to the variable returns from its involvement with the entity and has the ability to affect those returns exercising its power over the entity.

The financial statements of the controlled companies are included in the consolidated financial statements beginning from the starting date of the control until the date in which the control ceases to exist. The accounting policies of the controlled companies are aligned with those adopted by the Group.

Jointly Controlled Operations Jointly controlled operations refer to enterprises whose activities are directly or indirectly controlled by the company in conjunction with other investor(s), by means of agreements or contracts that require unanimous consent for the financial and operational decisions.

Investments in Affiliated Companies: The affiliated companies are those entities in which the Company, directly or indirectly, has significant influence, but it does not control (holds about 20% and 50% of the voting capital) the financial and operating policies.



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Transactions eliminated on the consolidation In the consolidation balances and any revenues or expenses not realized are eliminated derived from intra-group transactions. Unrealized gains from transactions with investees registered by equity method are eliminated against the investment in proportion to the interest of the group in the investee. Unrealized losses are eliminated in the same way as are eliminated the gains, but only to the extent to which there is no evidence of loss by decrease in recoverable value.

b. Foreign currency

Foreign Controlled Companies The assets, liabilities and results of controlled companies are converted to the Brazilian Real at the exchange rate on the date of its transactions.

Foreign Affiliated Companies The shareholders’ equity of the foreign affiliated company (PLLAL) is translated monthly to the Brazilian Real at exchange rate of the month of its financial statement. Foreign currency differences are recognized in other comprehensive results and presented in shareholders’ equity. The results from foreign operations are translated into Brazilian Real at exchange rates established for the dates of the transactions.

c. Determination of fair value of assets and liabilities

Several accounting policies and disseminations of the Group require the determination of fair value for financial assets and liabilities as well as nonfinancial ones. The fair values have been determined for purposes of measurement and/or dissemination. Where applicable, the additional information about the assumptions used in the determination of the fair values are disseminated in specific notes to that assets or liabilities.

d. Decrease in recoverable value of assets The Management reviews annually the book value net of financial and non-financial assets in order to evaluate events or changes in economic, technological, operational circumstances or that may indicate deterioration or loss of their recoverable value. Such evidence identified is constituted the provision for devaluation by adjusting the net book value at the recoverable amount.

The recoverable amount of a non-financial asset in particular cash-generating unit is defined to be the largest of the value in use and the net selling value.

e. Financial instruments

Derivative and not-derivative financial assets and liabilities The category of financial instruments depends on the purpose for which the financial assets and liabilities were acquired and/or contracted and their classification is determined at initial recognition of financial instruments. The classification of financial assets and liabilities of the group is presented in note # 26.



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The Group fails to recognize financial assets when the contractual rights to the cash flows from the assets mature or when transferring the rights to receive the contractual cash flows on financial assets in a transaction in which essentially all the risks and benefits of ownership of the financial assets are transferred. Any interest that is created or retained by the Group in financial assets is recognized as an asset or liability.

The Group write off financial liabilities when it has its contractual obligations removed, canceled or matured.

The assets or financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Group is legally entitled to offset the amounts and intends to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

The financial assets and liabilities held by the Group are classified and measured under the following categories:

Financial assets measured at fair value through the result A financial asset is classified in this category if it is held for trading or assigned as such at the time. The financial instruments are so designated if the Group manages such investments and make buying and selling decisions based on their fair values, in accordance with the risk management documented and aligned with the Company’s investment strategy. The transaction costs, after initial recognition, are recognized in the result when incurred. Changes in the fair value of these assets are recognized in profit or loss for the fiscal year. Loans and Receivables They are financial assets with cash flow defined or calculable, that are not listed in an active market. These assets are initially recognized at fair value plus any directly attributable transaction costs. After initial recognition, they are measured at amortized cost using the effective interest method and decreased of any loss by decrease in relation to the recoverable value.

Assets maintained until Maturity They are financial assets with fixed or determinable receipts and fixed receipt dates and that the Group has the intention and financial capacity to maintain until their maturities. They are valued at acquisition cost, plus income earned, based on contractual terms and conditions in consideration of the result of the year.

Financial Liabilities measured at amortized cost In this category it is included financial liabilities with fixed or calculable payments that are not traded in an active market. They are measured at amortized cost using the effective interest method.



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Derivative financial instruments Derivatives are initially recognized at fair value; any attributable transaction costs are recognized in the result when incurred. Changes in fair value are recorded in the heading “Unrealized Gains and Losses with derivative operations” classified in the current assets and liabilities, respectively.

f. Cash and cash equivalents

Cash and cash equivalents include cash, cash bank deposits and financial investments realizable within 90 days from the date of application or regarded as immediate liquidity, convertible into a known amount of cash and subject to a low risk of change in value.

g. Receivables from clients

Recorded by actual values invoiced (services, equipment and materials) and by measurements of the services provided until the balance sheet dates, deducted from the provision for decrease at recoverable value, when necessary, in an amount considered sufficient by the Management to cover probable losses on its realization.

h. Taxes receivable

They are represented mainly by taxes and federal contributions, adjusted from the year following their determination, when there is a legal provision, and less of a provision for decrease in recoverable value, when necessary, in an amount considered sufficient by the Management to cover probable losses on its realization as shown in Explanatory Note # 10.

i. Fixed Assets The Fixed Assets are stated at the historical cost of acquisition, less the accumulated depreciation and decrease at the recoverable value losses (impairment), when necessary.

Depreciation is calculated by the straight-line method at rates deemed compatible with useful life, as shown in the Explanatory Note # 12.

j. Intangible asset

The Intangible Assets of the Group are classified as follows:

Intangible assets acquired separately They include the right to use software and contractual rights intended for the maintenance of the activities of the Group. They are measured at the acquisition cost, less accumulated amortization and loss by decrease at the recoverable value. Depreciation is calculated by the straight-line method based on their estimated useful life, which is reviewed annually or for the duration of the contracts.

Intangible Assets generated internally They include expenses made by the controlled company of the Company in developing projects related to electric power generation in projects that shall be implemented or sold to third parties and are measured by the sum of the expenses incurred less of the loss by decrease at the recoverable value, where necessary.



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Goodwill The goodwill is measured at cost, is not amortized, and is deducted from the retained losses for decrease at the recoverable value. The goodwill and surplus value related to the affiliated companies, controlled companies and joint subsidiaries are included in the book value of the investment and in the financial statements of the parent company and the consolidated.

As the goodwill is based on future profitability (goodwill) and integrate the book value of the investment in the controlled company or joint subsidiary, it is not tested separately in relation to its recoverable amount (impairment).

k. Provisions

A provision is recognized in the balance sheet when the Group has a legal obligation already established or not yet formalized, presented as a result of a past event, and it is probable that an economic resource is required to settle the obligation. The provisions are recorded having the best estimates of the risk involved as basis.

l. Employee Benefits

Retirement Plans The costs associated with the contributions made by the Group to the defined contribution retirement plans and defined benefit are recognized on the accrual basis. The reserves required to cover the benefits of defined benefit plan are calculated using the projected unit credit method prepared by an independent actuary and the defined contribution plan by the financial regime of capitalization, according to details shown in the Explanatory Note # 24.

Short-Term Employee Benefits Short-term benefit obligations to employees are measured on an undiscounted basis and are recorded as expenses, as the related service is provided.

The articles of Incorporation of the Company and the articles of Incorporation of the Group’s companies provide the allocation of part of the profits to their employees. This liability is recognized by the expected value to be paid.

m. Revenues and costs incurred to bill in turnkey contracts

Revenue includes the initial amount agreed in the contract plus variations arising from additional requests (amendments to the contracts), price adjustments, claims and payments of contractual incentives, provided that it is probable that result in revenue and can be measured reliably.

Revenues and costs of long-term contracts in the turnkey contract are appropriated by the proportion of the work done in the project until the balance sheet dates and are made a provision to the corresponding costs to bill, which will be invoiced by suppliers in subsequent period.



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n. Sales of Goods and Services Operating income from the sale of goods is recognized when there is convincing evidence that the most significant risks and benefits inherent in the ownership of the goods have been transferred to the buyer, and that it is probable that the economic financial benefits will flow to the entity.

Operating income from the sale of services in the normal course of activities is measured at the fair value of the consideration received or receivable.

o. Financial revenues and expenses

Financial revenues include basically the active investment interest, monetary variation on financial assets and changes in the fair value of financial assets, recorded through profit or loss for the fiscal year. Interest revenues are recognized in the result for the fiscal year using the method of effective interest rate.

Financial expenses comprise basically the interest and monetary variations on financial liabilities that are recognized in profit or loss for the fiscal year based on the method of effective interest rate.

p. Income tax and social contribution Income tax and social contribution for the current and deferred fiscal year are calculated on the basis of the tax rates of 15%, plus the additional rate of 10% of the taxable income surplus of R$ 240 (annual basis) for income tax and 9% on taxable income to social contribution. They consider the loss compensation limited to 30% of taxable income for income tax and social contribution of the current fiscal year.

An asset subject to income tax and social contribution is recognized as loss, tax losses, tax liability and temporary deductible differences when it is likely that the future profits subject to taxation are available and against which they will be used.

q. New Standards and Amendments to Standard Interpretations

The Group has not completed its analysis of the effects of the standard below on its financial statements.

IFRS 9 Financial Instruments IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement (Financial Instruments: Recognition and Measurement). IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new model of expected credit loss for the calculation of the reduction at recoverable value of financial assets and new requirements on hedge accounting. The standard maintains the existing guidance on the recognition and derecognition of financial instruments to IAS 39.



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IFRS 15 - Contract Revenue with Client It establishes new requirements for the recognition of revenue from goods and services and extensive disclosures, a five-step model applicable to the revenue from a contract with the client, regardless of the type of transaction of revenue or industry. It applies to all revenue contracts and provides a model for the recognition and measurement of gains or losses on the sale of some non-financial assets that are not connected to the ordinary activities of the company. Extensive disclosures are also required by this standard.

5 Discontinued Operations - Ozônio Empreendimentos S.A. and P2

On October 17th, 2016, the sale operation of 52.69% of the common shares held by Promon of the capital Ozônio Empreendimentos S.A to the other holders, which together held 47.31%, was made. On September 25th, 2015, the sale operation was made to Patria Finance Ltd. (“Patria”), of the entire equity interest held by Group Promon in P2 Brasil Holding Ltd. e P2 Brasil Private Infrastructure General Partner II Ltd., equivalent to 40% of the total shareholders’ equity and voting capital of such companies of which Patria already held 60%. The operation was adopted by the Brazilian Antitrust Authority (CADE) on September 8th, 2015. On December 31st, 2016, the Company had the amount to be received in foreign currency of R$ 81,477 (117,144 in 2015), and R$ 32,591 (19,524 in 2015) to receive in the long term and R$ 48,887 (97.620 em 2015) to receive in the long term between 2018 and 2019..

As a result, the results generated by the investments in these companies were treated as a discontinued operation in 2016 and 2015.

a. Net Result from Discontinued Operations

Controlled company Consolidated

Ozônio

2016 2015

2016 2015

Net Revenue - - 12,117 17,710Costs and expenses - - (12,519) (19,355)Equity Method (402) (867) - -Loss on disposal of discontinued operation

(10,436) - (10,436) -Result from discontinued operation

(10,838) (867) (10,838) (1,645)

P2

Equity Method - 161,692 - 27,372Profit on sale of investment - - - 151,563Selling expenses

- - - (5,702)Result from discontinued operation

- 161,692 - 173,233Income tax and social contribution

- (4,065) - (16,067)

Result from discontinued operation - 157,627 - 157,166

Net Result from Discontinued Operations (10,838) 156,760 (10,838) 155,521



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b. Disposal effect of Ozônio on the financial position of the Group

Assets

October 2016 Liabilities

October2016

Cash and Cash Equivalents 25 Loan and Financing 2,067Receivables from customers 3,923 Other accounts payable 4,765Taxes to recover 3,834 Allowance for Contingencies 2,246Other Credits 358 Shareholders’ Equity 10,838Fixed Asset 700

Shareholders’ Interest Intangible 12,271 Controlling Companies 1,195Total Assets 21,111 Total Liabilities 21,111

6 Cash and cash equivalents


2016 2015 2016 2015

Cash and cash equivalents 148 833 11,728 3,193CDBS and committed operations (i) 6,371 10,902 14,839 31,597Money Market - - 36 45,357

Total 6,519 11,735 26,603 80,147

(i) They correspond to short-term financial investments allocated in bonds issued by the reputable financial institutions,

with average yield between 75% and 101.5% of the variation of interbank deposit certificate - CDI. (ii) They correspond to short-term financial investments in overseas funds.

7 Financial investments


2016 2015 2016 2015

Non-current assets Private Equity Funds - P2 Brazil - National 17,253 16,597 17,253 16,597 Private Equity Funds - P2 Brazil – Foreign - - 25,537 28,079 17,253 16,597 42,790 44,676

The amount of the Parent Company is an investment in Brazil and Controlled Company is abroad, the weighted income in Brazilian Real was -6% in year (46% in 2015), already considered the impact of the exchange rate for the portion abroad.



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8 Bonds and Securities

Parent Company Consolidated 2016 2015 2016 2015

Fixed income - - 24,649 36,912Shares (Datatec Limited) 1,928 2,644 1,929 2,642Long/Short Share funds and others - - 5,821 10,582 1,928 2,644 32,399 50,136

The bonds and securities include the short-term financial investments abroad for which the Management contracts instruments that mitigate its currency exposure, when, at the discretion of the Administration, such exposure represents the risks to income of such investments. The profitability during the year was -2% (-1% in 2015) when determined in US Dollar, and 15% (45% in 2015) when determined in Brazilian Real.

9 Receivables from clients

Consolidated

2016 2015

Receivables from clients 24,711 14,097Services and supplies to bill 9,277 28,664Allowance for doubtful debts (4,729) (14,356)

Total 29,259 28,405

The Group individually analyzes the balance of accounts receivable from customers and constitutes, when necessary, allowance for bad debts at an amount considered sufficient to cover probable losses in its realization. The provision for bad debts relates substantially to the services to bill without the customer accepting it over 1 year.

10 Taxes receivable


Taxes:

2016 2015 2016 2015

Federal 1,081 41 10,050 21,230State / Municipal 45 - 4,901 1,173Social security contributions - - - 1,524

Total 1,126 41 14,951 23,927

Tax liabilities and federal contributions may be used for offsetting debts, matured or unmatured. The realization of credits from state taxes occurs through market transactions of the companies of the Group.

25

Promon S.A. Financial statements on


11 Investments

a. Main data of the investments of the parent company on December 31stm 2016 and 2015

InvestmentsBalances on

December 31st, 2016 Year ended December 31st,

2016 Interest - %

2016 2015Shareholders’

Equity Capital Profit/

(loss) in the year

Equity method -

continuous operation Direct Consolidated

Controlled and Affiliated Companies:

Promon Engenharia Ltda. 18,209 43,478 18,211 68,500 (50,279) (50,269) 99,99 99,97 Promon Tecnologia e Participações Ltda. 38,903 60,052 38,904 4,911 (1,151) (1,149) 99,99 99,99 Promon Intelligens Estratégia e Tecnologia Ltda. 234 1,558 234 7,206 (1,134) (1,323) 99,99 99,99 Promon Meio Ambiente Ltda. - 6,298 - - - - 00,00 00,00 Promon International, Inc. 8,766 10,562 61,723 1,719 (18,606) (1,796) 14,20 99,99 Promon Investment Corporation 92,921 90,217 92,921 72,524 2,703 2,703

100,00 100,00

Promon-Logicalis Latin America Ltd. (PLLAL) :

Investment 123,771 105,372 353,633 700 70,929 24,825 35,00 35,00 Goodwill 4,898 4,879 -

Surplus Value of Net Assets 571 858 -

Total 288,273 323,292

(27,009)


December 31st,2016 and 2015

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b. Make-up of investments presented in the consolidated balance sheets on December 31st, 2016 and 2015

Investments Equity Method

2016 2015 2016 2015

Promon-Logicalis Latin America Ltd. (PLLAL) 129,240 111,127 24,825 23,294Export Policy Committee 1,602 1,576 35 (110)

130,842 112,703 24,860 23,184

c.

Transfer of Investment Balances

Parent Company

Consolidated Balances on December 31st, 2015 323,292 112,703 Capital Increase of Ozone Empreendimentos S.A. 4,541 - Capital Increase of Promon Engenharia Ltda 25,000 - Amortization of intangible assets of PLLAL (287) (287) Discontinued Operation (note 5.b) (10,436) - Others - (8) Subtotal 342,110 112,408 Equity accounting (27,009) 24,860 Equity method - Discontinued Operation (note 5.b) (402) - Dividends received (20,000) - Foreign exchange rate abroad - PLLAL - (Entry in shareholders’ Equity-

Comprehensive income) (6,426)

(6,426)

Balance on December 31st, 2016 288,273 130,842

d. Summarized Statement of the balances of direct and controlled affiliated companies

2016

Assets Liabilities

Estatenet

Direct and indirect controlled companies Promon Engenharia Ltda. 145,317 127,096 18,221Promon Tecnologia e Participações Ltda. 66,577 27,673 38,904Promon Intelligens Estratégia e Tecnologia Ltda. 2,013 1,779 234Promon International, Inc. 82,045 20,322 61,723Promon Meio Ambiente Ltda 92,935 14 92,921Promon Investment Corporation

Affiliated Company PLLAL 1,051,024 697,391 353,633



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2015

Assets Liabilities

Estatenet

Direct and indirect controlled companies Promon Engenharia Ltda. 231,452 187,952 43,500Promon Tecnologia e Participações Ltda. 90,497 30,422 60,055Promon Intelligens Estratégia e Tecnologia Ltda. 3,596 2,038 1,558Promon International, Inc. 166,048 16,804 149,244Promon Meio Ambiente Ltda. 6,402

90,21798 6,304

90,217

Affiliated Company PLLAL 987,545 686,853 300,692

e. Impairment Test of Goodwill On December 31st, 2016 and 2015, the impairment test was carried out, considering the discounted cash flows of the of the affiliated company PLLAL and the controlled company called Ozônio, resulting in proof of the economic return on operating assets, including goodwill.

12 Fixed Assets and Intangible Assets (consolidated)

Useful Live Depreciation and Amortization (in years) 2016 2015

Fixed assets Machinery and equipment 4 to 30 196 9,900Furniture, Utensils and Facilities 10 237 5,441Others 4 and 5 2,091 2,909

Total 2,524 18,250

Depreciation (300) (14,731) Book value 2,324 3,519

Intangible assets Rights of use of software 5 1,329 21,270Goodwill - 10,200Project Development 2,500 3,626

Total 3,829 35,096

Amortization (393) (20,247) Book value 3,436 14,849

13 Wages, vacation and social charges to be collected (Consolidated)

2016 2015 Provision for vacation 7,667 12,488 Income tax on wages 1,404 2,077 INSS [National Institute of Social Security] 1,450 324 FGTS [Government Severance Indemnity Fund], 559 29 Wages 121 238 Others 37 47

11,238 15,203



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14 Loans and financing

Parent Company

Current Assets Non-Current Assets

Domestic Currency 2016 2015 2016 2015

Working Capital 9,763 8,769 68,442 57,763

Total 9,763 8,769 68,442 57,763

Consolidated

Current Assets Non-current assets

Domestic Currency

2016 2015 2016 2015

Working Capital 9,763 15,589 68,442 59,595

Foreign currency Working Capital 4,321 - - 5,015

Total 14,084 15,589 68,442 64,610

Non-current Maturities 2018 2019 Total

Working Capital 37,192 31,250 68,442

The loans were contracted in national currency and foreign currency, in this case along with swap exchange rate operation. They have equivalent average cost ranging between 79% and 147% of the variation of Interbank Deposit Certificate (CDI). The only the loans for controlled companies have endorsement of the holding company as security and have no restrictive clauses for failure to comply with the targets (“covenants”).

15 Transactions with related parties The main balances of assets and liabilities on December 31st, 2016 and 2015 arising from transactions of the Company with its controlled, jointly controlled and affiliated companies, as follows: Parent Company Consolidated

2016 2015 2016 2015Non-current assets Loans with related Parties

Promon Engenharia Ltda. (c) 26,278 53,674 - -EPC Compra e Venda de Equipamentos Industriais Ltda. (a)

2,152 2,101Brandt Meio Ambiente Serviços Ltda - - - 605

Total 26,278 53,674 2,152 2,706

Non-current liabilities

Loans with related Parties Promon Empreendimentos e Participações S.A. (b) 2,917 3,801 2,917 3,801Brandt Meio Ambiente Serviços Ltda - - - 662

Total 2,917 3,801 2,917 4,463



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2016 2015 2016 2015

4,118 3,604 7,284 6,743

(a) Portion from the consortium Camargo Correa-Promon-EPC concerning the contract made between the Company EPC and the Consortium, with no maturity date and subject to interest of 6% p.a.

(b) Promon Empreendimentos e Participações S.A. is the parent company of the Company with 60,55% of shares. Upon the loan,

it is levied interest 135% of CDI calculated and recognized on a pro-rata basis. In 2016 it was generated the net financial expense of R$ 600 (R$ 111 in 2015).

(c) Loan paid at 12% p.a (without remuneration in 2015). In 2015 it was generated a financial revenue R$ 4,668 (R$ 39 in 2015),

which was eliminated in the consolidated statements.

Accounts receivable for sale of own shares and accounts payable for purchase of own shares They represent balances receivable and payable of transactions with own shares carried out between the company and its shareholders, whose determined result is classified under “Capital Reserves.”

These operations are carried out in periods of up to 36 months and were brought back to present value at the balance sheet date by applying the rate of 6% p.a. The adjustment at the present value is presented under the heading “Capital Reserves.”

Parent C

Consolidated

2016 2015 2016 2015Current assets

Accounts receivable for sale of owned shares - - - 113

Total

113

Current liabilities

Accounts payable for purchase of owned shares 4,426 6,920 7,409 9,530Adjustment at the present value (211) (433) (211) (433)

Total 4,215 6,487 7,198 9,097

Non-current liabilities

Accounts payable for purchase of owned shares 1,939 5,750 1,939 5,750Adjustment at the present value (93) (359) (93) (359)

Total 1,846 5,391 1,846 5,391

Management’s Compensation The amounts for the costs with group of managers of the company and companies of the Group are presented below:

Fixed Compensation

In the Special Shareholders’ Meeting held on June 10th, 2016, the annual overall amount of the compensation for the members of the Board of Directors and Board of Executive Officers of the Company of up to R$ 6.00, not considering interest in the profit sharing and results.



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16 Provisions

a. Provision for contingencies


2016 2015 2016 2015

Tax Provisions - 6,229 23,967 34,032Labor provisions - - 7,871 3,275Civil Provisions - - 1,197 2,987

Total - 6,229 33,035 40,294

In conjunction with its external legal advisors, the Management understands that the provisions formed are sufficient to cover probable losses in cases of civil, labor and tax nature under discussion by the Group.

Based on the evaluation of external legal advisors, at risk of “possible” losses it is processes amounting R$ 210,279 (R$ 233,984 in 2015), corresponding to 83 (71 in 2015) processes of individual values less than R$ 45,755 (R$ 43,000 in 2015). Such an amount is divided in R$ 199,598 (R$ 224,473 in 2015) for administrative and judicial actions of tax nature, referring to 43 (52 in 2015) processes; R$ 9,644 (R$ 8,700 in 2015) for civil actions referring to 05 (04 in 2015) processes and R$ 1,037 (R$ 811 in 2015) to labor issues, referring to 26 (14 in 2015) processes. For these issues no provision was established, with a view that the accounting practices adopted in Brazil do not require recording.

Brazilian Antitrust Authority (CADE) In December 2015, the Brazilian Antitrust Authority (CADE) initiated administrative proceedings against 80 individuals and legal entities, among which it was the controlled company Promon Engenharia Ltda., in order to investigate any conduct that may constitute infringement to the economic order. According to the Law no. 12529/11, which regulates this process, any penalties arising therefrom may range from 0.1% to 20% of the gross sales in the previous year to that institution of the proceedings, equivalent, in the case of Promon Engenharia Ltda., to R$ 220,000 and R$ 45,000,000. For this process no provision was established, considering that, according to the assessment of the legal advisors of the Company, at this stage, there is no way of knowing whether there will be judgment against and, if so, what percentage of the fine. Public Civil Action. Regarding the Public Civil Action by Act of Administrative Misconduct filed against Engevix Engenharia S.A., several individuals related to the company, public agents, as well as companies that entered into contracts in consortium with Engevix, among which Promon Engenharia Ltda., subject matter of Supplementary Note contained in the Financial Statements ended on December 31st, 2015, the preliminary defense filed by Promon Engenharia Ltda. was accepted by the trial judge which did not receive the action in relation to Promon. The decision was the subject matter of an appeal by the Office of theGeneral Counsel for the Federal Government, which is pending trial.



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b. Judicial Deposits - Maintained in Non-Current Assets

The balance of judicial deposits consists of:

Consolidated

2016 2015

SAT/RAT (i) 17,030 21,341Labor 846 2,980FAP (ii) 3,550 3,550No. 5,985 3,357Others 1,223 1,563

Total 28,634 32,791

(i) Deposits to guarantee actions that aim to declare the illegality and unconstitutionality of the amendment of the classification

of the company's activity.

(ii) Deposits to ensure actions that aim to recognize the invalidity of FAP for illegality and unconstitutionality and alternatively require the new calculation due to an error in its determination.

As evaluation of legal advisors, the SAT/RAT proceedings are considered possible risk and the FAP is considered risk of probable success.

c. Provision for restructuring

Promon Group started in 2015 the process of adapting its structure, consistent with a more focused strategy on professional services and recognizing a business environment with lower level of activity in the segments in which it operates. Cost-cutting measures have been adopted, implemented throughout the year 2016 and will continue in 2017. Parent Company Consolidated Balance on December 31st, 2015. 1,045 20,689

Consumption of the restructuring provision (470) (15,337) Reversal of restructuring provision constituted in 2015 (575) (5,352)Constitution of provision for restructuring 970 19,917

Effect on the result for the year (note 19) 396 14,565 Balance on December 31st, 2016 970 19,917

17 Shareholders’ Equity

a. Shareholders’ Capital and Capital Reserve On December 31st, 2016, the shareholders’ capital consists of 130,000,000 (125,000,000 in 2015) common shares, with no par value, and 74,921,000 (68,110,000 in 2015) shares belonging to Promon Empreendimentos e Participações S.A., 48,812,028 (47,103,026 in 2015) shares belonging to the shareholders domiciled in Brazil and 6,266,972 (9,786,974 in 2015) actions temporarily in possession of the Company itself. Capital Reserve It refers to net income (loss) on disposal of its own shares (R$ 2,278 ) and at the adjustment to present value of the accounts receivable and payable of transactions with its own shares R$ 304.



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b. Profit reserves

Legal Reserve It was constituted at the rate of 5% of the net income determined in each fiscal year in accordance with article 193 of Law no. 6404/76.

Special reserve The special reserve constituted in previous years, in accordance with article 202 § 4 of Law no. 6,404/76, was used in the absorption of part of the loss for the period in the amount of R$ 26,365 .

Liquidity Reserve Statutory reserve intended to give flexibility to the Company's Treasury in managing the stock model and other short-term obligations that require cash availability, including for the acquisition by the Company of its own shares, if necessary. This reserve is composed of a portion for the positive result of the adjustment of the equity method of investments in affiliated companies that exceed the value of their dividend received from them and another portion corresponding to the amount of up to 55% of the remaining profits. The balances on December 31st, 2016 were R$ 0 and R$ 91,142 respectively amounting to the total of R$ 91,142. The Board of Directors, ad referendum of the Annual Shareholders’ Meeting may use the balance of the liquidity reserve for distribution of dividends and interest on its own capital or increase the shareholders’ capital.

c. Equity valuation adjustments The value reported in the financial statements of December 31st, 2016 and 2015 refers to the foreign exchange rate from the conversion of financial statements of the affiliated company PLLAL.

18 Net Operating Revenue (consolidated)

2016 2015

Selling Products - 1,971Rendering Services 117,617 139,642

Revenues from construction contracts 14,417 77,530 Gross Operating Revenue 132,034 219,143

Below we present the reconciliation of gross operating revenue and the income reported in the statement of income for the fiscal year:

2016 2015 Gross Operating Revenue 132,034 219,143

Less Sales Taxes (15,152) (19,710)

Total net operating income 116,882 199,433



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19 Other net operational incomes (expenses) Parent Company

Consolidated

2016 2015 2016 2015

Restructuring costs - note 16.c (395) (1,045) (14,565) (36,190)Reversal (increase) of provision for contingencies 6,692 1,607 5,091 (6,567)Reversal - - 9,069 (9,400)Reversal (increase) of other provisions - - 3,227 (13,429)Gain on sale of investment - 3,770 770 3,770INSS Credit on Notice of Termination 47 3,934Write off of non-recoverable taxes (123) (5) (1,195) (3,229)Write-offs of Labor Deposits (5,175)Others 3 45 (1,181 (1,155)

Total 6,224 4,372 2,337 (63,890)

20 Financial Income


2016 2015 2016 2015

Financial incomes Income from financial investments 1,759 10,035 10,531 14,070Adjustment of derivative transactions - - 14,50 2,444Financial Income from consortia - - - 2,462Others - (111) 496 1,049

1,759 9,924 25,536 20,025

Financial expenses

Interest on loans (7,741) (3,057)

(12,726)

(9,072)Adjustment of derivative transactions (1,163)Commissions and bank charges - (787) (1,738) (3,084)Financial expenses from consortia - - (1,092) -PIS and COFINS on financial income (377) (521) (669 (731)IOF on operations abroad and loan (230) (1,052) (1,146) (3,034)Restatement (786) (1,742) (842) (1,742)Others (119) (85) (261) (1,538)

(9,253) (7,244) (19,637) (19,201) Exchange Rate Change

Exchange rate changes of financial investments - -

(11,369

23,042Exchange rate changes from loans and accounts receivable (52) - (19,472 (2,793)Others - (98) (952) 1,704

(52) (98) (31,793 21,953



34

21 Income tax and social contribution The amounts relating to the deferred income tax and social contribution on December 31st, 2016 and 2015 of the consolidated are as follows:

Consolidated

2016 2015

Tax loss 27,938 16,260Provision for devaluation of assets 11,474 9,184Tax Provisions 6,588 3,826Labor provisions 2,586 1,394Provision for restructuring 6,442 6,642Other provisions 372 4,664Unrealizable portion (40,366) (24,457)

Total Deferred Tax Assets 17,034 17,513

Income tax and social contribution were constituted for credits of direct controlled company Promon Engenharia Ltda., (in 2015 included the Parent Company Ozônio Empreendimentos S.A.,), because these have expectation of future taxable profit that will enable their partial realization and for this reason the amount of R$ 40,366 (R$ 24,457 in 2015) of deferred tax assets was not recognized in the financial statements dated December 31st, 2016.

22 Insurance Coverage

The company and its controlled company adopt contracting policy of insurance coverage for goods subject to risks, as amounts considered sufficient to cover possible claims, considering the characteristics of their business.

23 Securities posted

The Company and its controlled companies gave securities to ensure the compliance of performance of contracts, proposals and tax processes in phase of litigation, among others, in the form of letters of bank guarantee and insurance policies, as follows:

Consolidated

2016 2015

Compliance with contract obligations 7,690 119,000Legal proceedings 141,230 210,913Advance of payment 636 14,890

Total 149,556 344,803

24 Promon Foundation of Social Security The Company is one of the sponsors of Promon Foundation of Social Security (Promon Foundation), a private entity of complementary social security, non-profit, with administrative and financial autonomy. Fundação Promon aims to establish private plans for the granting of additional benefits or related to those of the official Social Security to all its participants.



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By the end of 2016, Promon Foundation had two benefit plans, as follows:

• Defined Benefit - Promon BásicoPlus. • Defined Contribution - Promon MultiFlex.

The value of the Equity of the Foundation was R$ 471,426 and their mathematical provisions were R$ 275,055 at the end of 2016 (respectively in 2015, Equity of R$ 355,521 and Mathematical Provisions of R$ 172,372).

The BásicoPlus plan is closed to new members since March 28th, 2005. On December 31st, 2016 it had 546 participants, and 512 assisted persons, 29 self-sponsored/linked and 5 employees.

The demonstration of the actuarial liabilities of the BásicoPlus plan is as follows:

2016 2015

Coverage Equity of the Plan 743,651 749,424Mathematical Provisions 625,490 601,814Benefits granted 555,239 507,289Benefits to grant 70,251 94,525Technical balance 118,161 147,610Technical accumulated surplus 118,161 147,610Social Security Fund for plan review 65,989 0

The year 2016 had a surplus of R$ 36,540 (R$ 24,390 deficit in 2015). Its investments were allocated 75% at the fixed income, 5% in variable income, 7% in structured investments, 2% in overseas investments and 8% in real estate. The technical surplus accumulated of R$ 118,161 at the end of year (R$ 147,610 in 2015), corresponding to 19.06% of the Mathematical Provisions related to reserve portions defined in the benefit mode, was intended to form the contingency reserve, in accordance with CGPC resolution No. 26 of September 29th, 2008, as amended by CNPC Resolution No. 22 of November 2th, 2015, which is why there is no actuarial asset to be recognized by the sponsors. The excess of the surplus on the contingency reserve, in the amount of R$ 65,989 was for the constitution of an insurance fund for Plan Review.

For the calculation of the Mathematical Provisions, the following main assumptions were used:

(*) Annual Interest Rate: 5,35% per annum. • Actual wage growth projection: 3% per annum. • General Mortality Table: At - 2000 smoothed at 20% by sex.

The MultiFlex plan, in turn, offered to all employees, is free of actuarial risks with regard to their social security benefits, calculated by the cumulative amount of the contributions made by the sponsors and, optionally, by the participants during the constitution of reserves, plus net financial income, and is paid in the form of income by a certain period on quotas.



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At the end of the 2016, Plan Coverage Equity was of R$ 650,905 (R$ 570,760 in 2015). Their investments were allocated 77% at fixed income, at 6% at variable income, 2% in the portfolio of loans to participants and 12% in structured investments and 3% in overseas investments. The plan had 035 participants, 233 were assisted persons, 561 self-sponsored/bound and 1,241 employees. The demonstration of the actuarial liabilities of the MultiFlex is as follows:

2016 2015

Coverage Equity of the Plan 650,905 570,760Mathematical Provisions 649,565 570,558Benefits granted 310,204 243,792Benefits to grant 339,361 326,766

Technical Surplus 1,340 202

During the fiscal year of 2016, the consolidated contribution of the plan Promon BásicoPlus and Promon MultiFlex, made by the sponsors Promon S.A. and its controlled company was R$ 2,170 (R$ 4,917 in 2015).

25 Administrative Expenses


2016 2015 2016 2015

Wage and charges 9,177 5,479

21,431 22,694Services from Third Parties 1,697 1,779 12,593 15,559

Total 10,874 7,258 34,024 38,253

26 Financial instruments

Risk management structure The Risk Committee of the Board of Directors, which is responsible for the development and monitoring of the risk management policies of the group, maintained its operations in 2016. The Committee reports its activities regularly to the Board of Directors.

The risk management policies of the Group were established to identify and analyze the risks to which the Group is exposed, to set limits on risks and appropriate controls and to monitor risks and adherence to the limits set.



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The financial assets and liabilities held by the Group are classified under the following categories:

Assets

Recorded at Fair Value through the

Result Loans and

Receivables Held until

maturity Consolidated

2016

Unrealized gain with derivative operations 12,997

12,997Cash and cash equivalents 26,603 - - 26,603Financial investments - - 42,790 42,790Bonds and Securities 32,399 - - 32,399Loans with related Parties - 2,152 - 2,152Receivables from clients - 29,259 - 29,259Accounts receivable for investment sale - 81,478 - 81,478Other credits - 7,624 - 7,624

Total 71,999 120,513 42,790 235,302

Assets

Recorded at Fair Value through the

ResultLoans and

Receivables Held-to-maturity Consolidated

2015

Unrealized gain with derivative operations 768 - - 768Cash and cash equivalents 46,158 33,989 - 80,147Financial investments - - 44,676 44,676Bonds and Securities 50,136 - - 50,136Accounts receivable for sale of owned shares - 113 - 113Loans with related Parties - 2,706 - 2,706Receivables from clients - 32,725 - 32,725Accounts receivable for investment sale - 117,144 - 117,144Other credits - 19,886 - 19,886

Total 97,062 206,563 44,676 348,301

Liabilities

Measured at amortized cost

Consolidated 2016

Suppliers 82,526 82,526Loans and financing 9,044 9,044Accounts payable for purchase of owned shares 1,556 1,556Unrealized Losses on Derivative Operations 11,600 11,600Other liabilities payable

Total 104,726 104726

Liabilities

Measured at amortized

costConsolidated

2015 Suppliers 16,494 16,494Loans and financing 80,199 80,199Accounts payable for purchase of owned shares 14,488 14,488Unrealized losses with derivative operations 363 363Other liabilities payable 5,703 5,703

Total 116,884 116,884



38

a. Credit risk The Group’s Management monitors the credit risk through careful selection of portfolio of customers, which considers the ability to pay (credit analysis).

The Group is also subject to credit risk related to financial instruments contracted in managing its businesses, mainly represented by cash and cash equivalents, financial investments and derivative instruments. Because of this, it develops relationships with top-tier banks in the financial market, based on criteria defined in its policy. The bank policy establishes allocation limits in the banks, avoiding the concentration, as well as defines the banking products that can be used both in allocation operations and in raising funds. There are monthly reporting to the Group’s Management of the outstanding positions in the financial market. The Group seeks to maintain available credit lines with financial institutions.

The risk is primarily from the financial instruments, as shown below.

Consolidated

2016 2015

Cash and cash equivalents 26,603 80,147Unrealized gains with derivatives 12,997 768Financial investments 42,790 44,676Bonds and Securities 32,399 50,136Receivables from clients 29,259 32,725Loans with related Parties 2,152 2,706Accounts receivable for investment sale 81,478 117,144Other credits 7,624 19,886

Total 235,302 348,188

The make-up of loans and receivables at the date of the financial statements is presented net of provisions for realizations and it was to mature. The Management recognizes losses due to reduction in recoverable value.

b. Capital Management

The Capital Management aims to safeguard the Group’s capacity to continue at the lowest possible cost, while providing adequate return for shareholders and benefits for other stakeholders.

c. Liquidity risk

The prudent management of liquidity risk implies seeking the maintenance of de cash, bonds and securities sufficient, funds available through committed credit facilities and capacity to settle market positions.

The Management monitors the Group’s consolidated liquidity level considering the cash flow expected in contrast to unused credit facilities.



39

The values shown below represent the future cash flow.

2016

Less than a year

Between one and two

years

Between two and three

years

More than three years Total

Current Asset: Loans and financing - Working Capital

16,597 - - - 16,597Non-Current:

Loans and financing - Working Capital - 52,088 27,529 6,436 86,053

d. Risk of Fluctuation in Prices The Group aims to neutralize the risk of price fluctuation by adopting in its contracts with customers adjustments formulas which capture the variation in costs of their major inputs by transferring to the suppliers the same conditions agreed with customers.

e. Market risk

(i) Interest Rate

The Group is exposed to market risks due to changes in interest rates on its financial investments and loans and financing.

Part of the investments of the Group is maintained in operations linked to the variation of the CDI. On December 31st, 2016, the investments subject to this risk accounted for 15% (19% in 2015) of the total cash and cash equivalents, short-term investments and securities, timely monitored by the Management. In turn, the loans and financing subject to the variation of the CDI accounted for 93% (93% in 2015) of the total incurred debts.

Sensitivity analysis

Consolidated

2016 2015

Interest Rate R$ R$

Cash and cash equivalents CDI 14,839 32,234Loans and financing CDI (78,034) (75,870)

Next Exposure of Balance Sheet

(63,465) (43,636)



40

Consolidated

Description

Effect for the company

Scenario I

ScenarioII

High Interest Rate Loss (1,269) (2,539)

Loss (1,269) (2,539)

Low Interest Rate Gain 1,269 2,539

Gain 1,269 2,539

Situation on 4/7/2016 - maintenance of CDI rate on 4/7/2016 (14.09%) Scenario I - 2% variation in interest rate. Scenario II - 4% variation in interest rate.

(ii) Foreign currency

With the purpose of risk diversification, the Management holds securities in different currencies than Brazilian Real in Brazil and abroad. It continuou

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