Annual report 2012 dst sgps & dst sa by dst group

2012 Annual Report consolidated

Consolidated Annual report

dst, sgps, s.a. december 31 , 2012

2012 Annual Report consolidated

Message from the Chairmain

I have looked back and I have looked around. And, I see white just like the characters in Blindness. I see white in a huge white expanse! We will work to see ahead, to see the direction that fate will honour us with and to get out of this deep, white hole. Meanwhile, let's look at the present. So many years, so many angles, such peripheral vision in which the causes of things coincide! Every year we get messages, not to leave the confessional analysis of the economy, the context and other pieces of knowledge in the hands of others. Confirmed truth; There is no annual report message that does not take the verification of the crisis, its limitations and the intensity of its pitch (white) as a starting point for concluding that what went wrong was due to external factors and what went well is due to the high performance of managements and the understanding between managers and shareholders. It is convenient to talk about crisis in these statements. There have never been any no-crisis reports. There have never been any messages lacking the choreography of crisis. Crisis should never be invoked in vain. Crisis as a logical argument must be invoked with just cause and in reasonable doses. Yes indeed! And what now, José? Years and years of talking about crisis! External crisis explains everything, year after year. Now that the crisis can be called upon to help justify what is going on to both deprive the Portuguese people and limit the action of companies I have a kind of shame, a sort of self-censorship to police the thinking, creating a barrier that prevents me from bringing it into the argument. Now I have had reason to invoke the crisis, but just as in the story of the boy who cried wolf, I run the risk of not being believed. I have forced a way out to better explain our performance: I opt for the analysis not of the autopsy of the crisis but for the meta-autopsy of the worm – for the autopsy of the autopsy of the crisis. It seems to be a worthy exit and as the readers of these messages, as the target audience of the messages in annual reports, are not social scientists the opening found is plausible. The responsibility for what went wrong, for there being no public investment plan, for private investors withdrawing, for foreign investment having given up, for the courts siding with defaulters, giving them time, more time and resources and more resources, for the price of consumables going up, for energy going up, too, for banks not managing to go any further, but finances yes (they leap ever higher and go ever further), for stratospheric VAT and corporation tax – corporation tax (IRC) is impossible to square, more than round, and it rises if you pay and falls if you receive, for everything, everything is responsible for the crisis of the crisis. This is the meta-crisis! The crisis entered into crisis brokered by incompetence, selfishness and much more evil and, having entered, it was schizophrenic and as it cannot tolerate the medication of the markets operated by hand not as invisible as at the beginning, it is uncontrolled, quite wild. They stole bits from the economy, used up the spares and did away with the mechanics. Algorithms were invented for derivatives, real nuclear bombs that no-one knew how to dismantle. This is the meta-crisis. They cleared the knowledge of thinkers – the repair mechanics – from the shelves of time.

2012 Annual Report consolidated

Management of knowledge has been lost. And now? There is only one way out. We must work towards the breakdown of the crisis! This is what we are doing in the group's companies. Lethal poisons for the crisis, we choose the right people for the right posts. We look at mistakes with a view to learning from them, countering the curse of our Jewish / Christian nature which formatted us to have our mistakes erased in confession. We do not employ priests nor do we have confessionals in our managerial staff, in our repair shops. We take risks because the greatest risk is not taking risks. We err but we do not atone for our errors with penances. We learn from errors. We cut costs by using resources efficiently and we increase value for customers by innovating. We have found that the world is bigger than we thought and we know enough about our business to be appreciated and regarded in emerging markets. And, we know that what we know and makes us leaders at a particular point in time will make us obsolete three years down the line. Just like Umberto Eco (quoted by Taleb in The Black Swan) we are aware that our antilibrary is more important than our library, that our salvation is more in the books we don't read than in those we read – and so, what we do not know is more important than what we know. We live in constant unease. We try to keep ahead of our rivals and we anticipate the wishes of our customers. As the best literature recommends; We get rid of (we get out of) what we are not good at, in time. We cut down (on what our competitors are better at), in time. We increase exposure in the areas where we are winning, in time. We create (with innovation) again, in time. We know that tomorrow's world will be even bigger and it is our duty to match up to those who preceded us. We know that Portugal will be bigger tomorrow, too. EGA will be privatized and AdP will make the activity a subconcession. By fighting hard, in a turbulent environment, we made 2012 the best year of our existence. For Portugal, we'll keep on winning. We will match Portugal We offer special thanks to our business partners, banks and suppliers, and to our customers and grantors. For our workers, everything.

José Teixeira PS: The format of our Annual Report this year is a tribute to our mother who started her business career

as a child, selling vegetables in Braga's municipal market, and at the same time she made the trip from Braga to Guimarães in a wagon drawn by a pair of oxen. Later she ran a 'sale' in the Monte Castro quarry and afterwards there was a grocery in Fraião, followed by a mini-market, also in Fraião. The accounts were small-shopkeeper level, and even today, at 82, the acid test is enough confirmation that makes the management of a well-cultivated 15-hectare farm, with ten head of cattle among the animals, evidence of the management that should never be forgotten.

2012 Annual Report consolidated

Index

Page Consolidated Management Report

Macroeconomics framework

Business activity

Financial risk management objectives and policies

Material events occurring after the end of the period

Final note

Corporate Social Responsability

Human resources

Safety, hygiene and health

R&D and innovation

Society

Environment

Quality and certifications

Conlolidated Financial Information

Consolidated balance sheet

Consolidated income statement

Consolidated statement of equity changes in 2011

Consolidated statement of equity changes in 2012

Consolidated cash flows statement

Annex

Legal Certification of Consolidated Accounts

Report and Opinion of the Sole Fiscal Auditor

Annex to the Board of Directors Report

Portfolio - 2012 main works

2012 Annual Report consolidated

Consolidated Management Report

Dear Shareholders, In compliance with the legal and statutory regulations, the Board of Directors presents the management report for 2012 fiscal year. As the environment where we operate is directly related to the positive evolution or downturn of the global economy, before presenting the company's financial information and its business centers we will do a slight approach to the most important national and international macroeconomic data.

Macroeconomics Framework International Macroeconomics Framework

The world economic activity recorded again a slowdown in 2012, reflecting, however, quite differentiated growth rates in different regions of the globe. In 2011, the Gross Domestic Product (GDP) grew by 3.8%, while in 2012 will be increasing about 3.3%, according to sources from the International Monetary Fund (IMF) and European Commission (EC). According to IMF forecasts, GDP growth in advanced economies remained weak, standing at 1.3% in 2012, 0.3 pp less than in 2011. In a context of lower demand from advanced economies, emerging market economies and developing countries also registered a lower dynamism, growth of 5.3% in 2012 compared to a growth of 6.2% in 2011. The framework of the world economy in 2012 remained marked by a high level of uncertainty, which was manifested in the persistent volatility of the financial markets, in reducing the confidence of economic agents and increasing the uncertainty for the euro area and the United States. In the euro area remain doubts about the availability of national authorities in the implementation of policies needed to resolve the sovereign debt crisis and for their ability to comply with the budgetary targets in some countries, in a context of weak economic growth. In the United States, the main source of uncertainty is related to doubts as to the future direction of fiscal policy, given the cessation of a series of measures to stimulate the economy in late 2012 and the automatic cuts in spending planned for early 2013. The possible absence of a credible response from European and American authorities in these matters will contribute to maintaining the high degree of uncertainty and a downward revision of economic growth perspective, even in the short term, making it even more complex the adjustment process of the Portuguese economy. 2010

2011

2012(e)

USA

2,4

1,8

2,5

EUROPEAN UNION

2,1

1,5

-0,4

EURO AREA

2,0

1,4

-0,6

Macroeconomic indicators GDP:

JAPAN

4,7

-0,6

0,5

The expected slowdown in economic activity in 2012 is common to most countries in the euro area. For this downturn have contributed the maintenance of unfavorable financial conditions and fiscal consolidation underway in several European countries. The weakness of economic activity in the euro area countries that record tensions in sovereign debt markets, together with the persistence of a high

Source: GPEARI Finance Percentage variation (e) - estimated

2012 Annual Report consolidated

level of uncertainty, have been transmitted to other euro area economies, notably by reducing the confidence of households and companies. In 2012, the IMF estimates a GDP contraction of 0.6% in the euro area. In the case of the two largest trading partners of the Portuguese economy, it is estimated a contraction in GDP of 1.5% in Spain and a significant slowdown in Germany, from 3.1% in 2011 to 0.9% in 2012. In the remaining area economies, the activity shall contract in the United Kingdom, in Portugal, in Italy and in the Netherlands and remain stagnant in France. After significant growth in prices of raw materials in 2010 and 2011, in 2012 there should be a downturn in prices. Given the slowdown in demand from advanced and emerging economies, prices of most non-energy raw materials decreased in the year 2012. This trend was mitigated by an upward trajectory of international prices of cereals. With regard to international oil prices, developments in 2012 diverged from the trend of falling international prices of other raw materials. Oil prices exhibited some volatility throughout the year, reaching, on average, worth 109 USD/bbl (83 € / bbl), a result of a reduction in expected demand for oil and an increase in supply from countries non-OPEC. In this context, and given the lower rate of utilization of productive factors in advanced economies, the IMF forecasts point to a reduction in the average annual increase in consumer prices in advanced economies, from 2.7% in 2011 to 1.9% in 2012. In emerging market economies and developing countries, inflation is expected to remain high in 2012, despite a reduction of 1.1 percentage points compared to 2011 (6.1% in 2012). In line with the contraction in activity, market conditions in the euro area worsened considerably, predicting a significant increase in unemployment, particularly in economies undergoing adjustment. According to the EC, the unemployment rate rose to 10.7% in the EU and 11.7% in the euro area. Macroeconomic indicators

2010

2011

2012(e)

USA

1,6

3,2

1,8

EUROPEAN UNION – 27

2,1

3,1

2,4

EURO AREA

1,6

2,7

2,2

JAPAN

-0,7

-0,3

-0,4

USA

9,6

9,0

7,7

EUROPEAN UNION – 27

9,6

9,7

10,7

EURO AREA

10,1

10,2

11,7

JAPAN

5,1

4,6

4,2

USA

5,4

4,1

2,5

EUROPEAN UNION – 27

6,7

3,2

-3,2

EURO AREA

7,3

3,4

-3,9

JAPAN

16,6

-2,3

-6,8

Inflation:

Unemployment rate:

Industrial production index:

Source: IMFI/ European Commission/ Eurostat/ GPEARI Finance Percentage variation (e) - estimated

2012 Annual Report consolidated

financial markets reacted favorably to this announcement, attending to a reduction in yields of government debt in countries under pressure. Within a framework of relaxation and contraction of economic activity, monetary policy has become more expansionary on global scale, watching to a reduction of interest rates by central banks. The short-term interest rates decreased significantly in the euro area and the U.S., as well as the longterm interest rates. Despite the fragility of the economic situation of the euro area, have seen in the end of 2012, a decrease of uncertainty and financial risks associated with sovereign debt, due to progress in European banking union, the restructuring of the Spanish banking sector and the agreement reached with the IMF on Greek debt. In late December 2012, the interest rate Euribor 3, 6 and 12 months stood at 0.187%, 0.320% and 0.542%, respectively. Reference interest rates

2010

2011

2012

Eurozone

1,00

0,75

USA

0,25

Japan

0,30

0,10

United Kingdom

0,50

Monetary market interest rates

2010

2011

2012

Eonia

0,44

0,46

0,08

Euribor 1 month

0,57

1,18

0,11

Euribor 3 months

0,81

1,39

0,19

Euribor 6 months

1,08

1,64

0,36

Euribor 12 months

1,35

2,01

0,59

0,34

0,35

0,31

Source: Ministry of Finance / Bank of Portugal Percentage at the end of the period

Eurozone

USA Libor 3 months Japan Libor 3 months

0,23

0,22

0,19

Source: Ministry of Finance / Bank of Portugal Percentage, annual average

In December 2012 there was an appreciation of the euro against the US dollar, standing at 1.319 dollars in the end of the year, the highest since the end of March 2012. This development reflects, in part, the progress made in the construction of European banking union, with impact on the improvement of financing conditions in the countries hardest hit by the sovereign debt crisis. Foreign currencies

2010

2011

2012

EUR/USD

1,336

1,318

1,319

EUR/JPY

108,65

102,55

113,61

EUR/GBP

0,861

0,844

0,816

EUR/CHF

1,250

1,228

1,207

Source: Ministry of Finance / Bank of Portugal Foreign currencies parity at the end of the period

In addition, there was an appreciation of the main stock market index in the U.S. and a devaluation of the main stock market indices in the euro zone and Japan. Stock markets

2010

2011

2012

Dow Jones EURO STOXX

13,4

-3,4

-6,5

Nikkei 225

7,3

-5,7

-3,5

Standard & Poors 500

20,3

11,4

8,7

In 2012, the price of non-energy raw materials, metals and agricultural goods, showed a significant slowdown, mainly due to fall in price of metals, industrial and agricultural products. The price of a barrel of oil has decreased compared to 2011, due to the fall in global demand. The Brent oil price in 2012 was around, on average, 109 dollars per barrel.

Source: Ministry of Finance / Bank of Portugal Percentage variation

2012 Annual Report consolidated

Raw materials

2010

2011

2012(e)

Brent Oil USD/Barrel (1)

80,22

110,82

109,2

Agricultural goods (2)

33,8

22,7

-12,6

Metals (2)

48,2

13,5

-16,8

The IMF also provides that the volume of trade in goods and services to grow 3.2% in 2012, compared with 5.8% in 2011. The growth rate of imports of advanced economies should reduce substantially from 4.4% in 2011 to 1.7% in 2012. The forecasts also point to a lower import dynamism of emerging market economies, which are expected to grow 7% in 2012 (8.8% in 2011). A common feature of the evolution of Portugal's main trading partners, belonging to the euro area, is the significant reduction in the contribution of domestic demand to GDP growth in the period after the financial crisis, especially in the countries under pressure. It is expected a sharp contraction of domestic demand in Spain and Italy. The slowdown in domestic demand in key trading partners of Portugal, couple with the deceleration in exports, should result in a decrease in imports of goods and services of these economies. In this context, the growth of external demand for Portuguese economy was declined significantly from 3.4% in 2011 to 0.3% in 2012. The slowdown in external demand is particularly adverse in the current context in which, due to the adjustment process, the Portuguese economy depends more than usual on exports as an engine of global demand growth.

Source: Ministry of Finance / Bank of Portugal (1) Barrel average price/USD / (2) Percentage variation (e) - estimated

2012 Annual Report consolidated

National Macroeconomics Framework

The Portuguese economy 2012 intensified the adjustment process of macroeconomic imbalances accumulated over the past few years, in a context of restricted monetary and financial conditions and maintenance of a contractionary fiscal policy. In this context, there was a deterioration of the cyclical position of the Portuguese economy, characterized by a sharp drop of the product and a significant rise in unemployment. The correction of the imbalances accumulated in the past takes place in a context of great uncertainty. Indeed, the difficulties and risks arising from the adjustment process have been exacerbated by high uncertainty about the evolution of the international economy and the resolution of the sovereign debt crisis in the euro area. According to current projections, the economic activity will show a contraction of 3% in 2012 and 1.6% in 2013 and the budget deficit will be at 5.25% of GDP, 0.25 percentage points above the target set by the IMF to 2012. The contractionary fiscal policy orientation and the restrictive financing conditions, combined with unfavorable expectations regarding the evolution of the activity and the labour market, with the perception of a reduction of disposable income and saving schemes for precautionary reasons, justified a strong reduction of household consumption. Additionally, the expectations of a reduction in domestic demand, the high level of uncertainty and monetary and financial constraints, have contributed to the maintenance of a negative investment performance, which will continue in 2013. In the opposite direction, exports of goods and services should continue to register a remarkable growth in 2013. The evolution of exports arises in a context of high uncertainty and deterioration of economic activity in the main trading partners of Portugal, being remarkable the existence of strong gains in market share. 2010

2011

2012(e)

- Private Consumption

2,5

-3,8

-5,8

- Public Consumption

0,1

-4,3

-3,9

- GFCF

-3,1

-10,7

-14,9

- Exports

10,2

7,2

6,3

- Imports

8,0

-5,9

-4,7

- GDP at market prices

1,4

-1,7

-3,0

Inflation

1,4

3,5

2,8

â&#x20AC;&#x201C; Industrial Production Index

2,0

-0,9

-3,0

â&#x20AC;&#x201C; Industrial Turnover Index

9,3

5,7

-5,3

PSI 20 Index

-10,34

-27,6

2,9

Unemployment rate

10,8

12,7

15,7

Macroeconomics indicators Expenditure and GDP

The deterioration of the cyclical position of the Portuguese economy is also expressed in the underutilization of productive factors, introducing downward pressures in the prices of goods and labor costs. The average rate of change of the Harmonized Index of Consumer Prices (HICP) slowed to 1.9% in 2012 (3.5% in 2011), despite the increase in indirect taxation. The unit labor costs showed a further reduction in 2012, a result of increased productivity and a significant reduction in remuneration. There has been a continued deterioration of labour market conditions, net employment reduction and increase of unemployment rate to historically high levels, 16.9% in the 4th quarter of 2012, reaching an annual rate of unemployment in 15.7%, compared to 12.7% in 2011. The dynamic management of the adjustment process of the Portuguese economy poses significant policy changes. The strengthening of social consensus around the guidelines of the adjustment process is a fundamental condition for the maintenance of the credibility in the eyes of international financial markets and international authorities and, consequently, to the success of the

Source: Ministry of Finance / Bank of Portugal Percentage variation, excepting unemployment rate (e)- estimated

2012 Annual Report consolidated

adjustment program. The promotion of economic growth based on the dynamics of exports, led by the private sector and benefiting from the catalytic role of the public sector, may constitute an important factor aggregator.

The Construction Sector

The construction sector in Portugal suffered, during the year of 2012, a significant decline in its activity, influenced by a deeply unfavorable economic environment. The most indicators point to a contraction in the volume of production in the sector, the construction's gross value added (GVA) declined 18.0% compared with the same period of 2011 and investment under construction revealed a fall of 16.1%. In the 4th quarter of 2012 notes a decrease of 32.6% in the level of industry activity, 25.7% in confidence index, 25.6% employment and 44.4% in the portfolio of orders. The sharp fall in all indicators of the construction sector clearly shows the deep crisis that the sector goes through in Portugal, which becomes even more evident when compared with the situation of the European Union. In 2012, there has been a reduction of 7.1% in confidence indicator in the EU average and a 10.3% reduction in the order books. Both the public and the private demand addressed to the construction sector remain in sharp decline, reducing the level of continuous production to historic lows. The number of companies and businessmen enabled with construction permit was reduced to 56,499, representing a fall of 8.2% compared with the previous year. The housing market has been the most penalized by the current economic climate, as testified by the data provided by the Bank of Portugal, which reveal a decline of 50.2% in the new loans for house purchase. This is a consequence of the impact of fiscal consolidation measures in the family income and of the restrictions imposed on access to finance for house purchase. These factors, combined with the growing economic difficulties resulting from the rising of unemployment and the serious crisis of confidence that has installed a general level, has led to a drastic reduction in demand for housing. Confirming the contraction in the construction segment of residential buildings, the licensing of new dwellings notes a fall of 34.7%. The housing segment was again the one that registered the largest drop in production, which should have been like the 17.8%. Highlights also include a reduction in 8.8% of jobs in the rehabilitation and demolition sector, single thread with the potential to boost the sector. In 2012, the breakdown in production was also quite strong in segments of non-residential construction and civil engineering works. The licensing of non-residential buildings registered a decrease of 23.5% in total area licensed. In the public works segment there is a strong reduction in investment, with the number of contests promoted by the Central Government to contract to 43.9% in 2012 compared with 2011. Judging by the values of the public tenders in the first 10 months of 2012, it was found a reduction of 657 million euros in the value of sponsored contests and 534 million euros in the contracts awarded. For the unfavorable development of the activity in this segment, and according to the entrepreneurs operating in this market, contribute not only the reducing of public investment, but also the worsening of some financial aspects, namely, the high financial costs, the high tax burden and delays in payments from the State. The employment provided by the construction sector recorded on the 4th quarter of 2012 a reduction of 25.6% over the same quarter of the previous year, which resulted in a decrease of 85 thousand jobs. The decrease in employment in the construction sector has already reached about 311 thousand jobs, a figure which fell for the 6th consecutive quarter.

2012 Annual Report consolidated

According to EC sources, plus the difference in qualitative indicators of construction sector activity between Portugal and the average of European Union countries. The confidence indicator of European entrepreneurs operating in the construction sector presents a decrease of 7.1%, while in Portugal this reduction is 25.7%. Regarding the evolution of the booking order, which for Portuguese companies is more unfavorable (-44.4%) and longstanding, compared to that found in the EU (-10.3%), falling just 5 months, worsening the gap between Portugal and the other Member States of the European Union in this matter Sector indicators

2010

2011

2012(e)

Concrete sales

-7,0

-15,6

-26,1

Steel sales

-23,0

-19,1

-25,3

Building licenses

-9,6

-10,5

-16,2

- Buildings - Total

-12,3

-2,8

-29,3

- Buildings - Family Housing

-14,0

-5,0

-30,7

- Dwellings - Family Housing

-20,0

-18,5

-43,6

GFCF (Construction)

-5,8

-11,4

Construction – Works completed

The Water and Environment Sector

-16,1

The water and waste sector in Portugal has been experiencing very significant developments over the last few decades and especially in the last decade and a half, in particular with regard to the institutional framework. In fact, the publication of Law Decree No. 372/93, of 29 October and No. 379/93, of 5 November promoted the entrepreneurship of the inter-municipalities and municipalities for the collection, treatment and distribution of water for public consumption, as well as the collection, treatment and rejection of effluents and municipal waste collection, furthermore it opened its management to the private sector. The strategy outlined in the PEAASAR II defines that management entities along with the necessary implementation of infrastructure for achieving the desired service levels, with the required quality standards, should ensure that the price of services reflects the cost of water and sanitation, thus ensuring the sustainability of services, and promoting the efficient use of resources through appropriate environmental practices. Furthermore, it should guarantee the complete compliance with legal obligations, without losing sight of the recommendations for the establishment of socially acceptable fares, in particular those related to the increase of territorial interventions and to the full exploitation of the project funds. In Portugal, the water supply and wastewater sanitation sector is subdivided in two strands in their value chain: the "high" and "low": - “High” systems of wholesale activity: systems for capture, treatment and supply of water, and also systems for collection, treatment and rejection of waste water. - “Low” systems of retail activity: water distribution systems and domestic waste-water collection. There is a large number of management entities operating in Portugal and its small size does not allow a desirable – and long-awaited – efficiency, optimization and scale in the water sector. The situation becomes more alarming when adding the dispersion and the small scale of those entities to the short cycle of water that they manage. Currently the imbalances in water sector are an unquestionable fact and recognized by all players in the industry, imposing the need to act urgently to achieve greater rationality, efficiency and optimization.

Source: Ministry of Finance Percentage variation (e) - estimated

2012 Annual Report consolidated

In order to address this problem the Government set out a restructuring strategy to the sector that is characterized essentially by: - Sustain AdP - Águas de Portugal in the public sphere, assuming the role of asset manager; - Privatize EGF – Empresa Geral do Fomento, SARL; - Expand the territorial and activity scope of Multimunicipal Systems promoting the merger of neighbouring systems and also water and sanitary systems; - The extension of Multimunicipal Systems' scope to municipal water distribution and to sanitation collection leading to the vertical integration of the sector. - The concession of the new expanded systems to private operators. This strategy appears to be appropriated for promoting efficiency and optimization in the water sector and for mitigating sector imbalances. Accordingly, it is important to notice that the private sector has shown substancial investment capacity and high levels of service quality in the concessions assigned: the cumulative investment of private operators in municipal concessions reached 936 million euros in 30 municipalities, representing more than 30 million euros per municipality. The tariffs charged by the private sector are within the national average, showing the competitiveness of the private sector, without harming the full cost recovery logic and sustaining high levels of service. Average Prices by Management Entity Type Average price (€/m3)

Value for 120m3 (€)

Municipality

1,147

137,65

SMAS

1,834

220,06

EP or EM

1,717

206,03

Concession

1,720

206,42

Source: APDA, The Market and the Prices, 2012 Weighted prices of 2011 - water and sanitation for a annual consumption of 120m3

Note that Aquapor contributes positively to the average price of concessions, with an average price lower than the EP, EM and SMAS for its seven concessions (water and sanitation): AQUAPOR

The renewable Energy Sector

Average price (€/m3)

Value for 120m3 (€)

1,714

205,62

The renewable energy sector has currently a relevant position in Portugal, due to the expression that their players have assumed in the national energy market. At the end of 2012, the total renewable installed power reached 10,778 MW. Committed to reduce dependency on foreign energy, to increase energy efficiency and to reduce CO2 emissions, the Government has defined strategic lines for the energy sector, approving the National Strategy for Energy (ENE 2020), which estimates that by 2020 dependency on external energy will be reduced in 74%. In 2012, the total production of electricity from renewable sources dropped 18% compared to 2011. Therefore, renewable energies accounted for 38% of total electricity production in Portugal's mainland in 2012, while in 2011 this figure was 46%, being a consequence of the lower production of hydropower. However, applying the correction factor for hydropower, which removes the effect of the variability between wet and dry years, the share of renewables in total electricity production amounts to 52% in 2012 , which represents an increase when compared to the 47% registered in 2011.

Source: APDA, The Market and the Prices, 2012 Weighted prices of 2011 - water and sanitation for a annual consumption of 120m3

2012 Annual Report consolidated

Wind Energy

The worldwide total installed capacity of wind power reached about 281 GW in late 2012, when at the end of 2011 was about 239 GW, which is a new record increase of 42 GW. Europe is the region that has the highest wind capacity with 11.840 MW installed in 2012, representing 38.9% of the total, followed by Asia with 34.8% (77% in China), North America with 23.6% (USA 90%), Latin America with 1.2% (53% in Brazil), Pacific Region (1.1%), Africa and Middle East (0.4%). In the European Union, the total installed capacity reached approximately 105.7 GW1, with an increase of installed capacity of 11.6 GW corresponding to 11% more than values of 2011. Eolic Energy - World’s installed capacity (MW) 80 000 60 000 40 000 20 000 0

In Portugal, the North and Centre regions are the ones that have the higher concentration of national wind farms, due to the greater availability of resources. The installed capacity of wind power in Portugal at the end of 2012 accounts for 4.46 GW, being enough to produce 20% of the consumed electricity. In 2012, four new wind farms started producing electricity: North Beach (2 MW) in Viana do Castelo, Tocha (8.49 MW), Enerfer I (8 MW) in the central region and Malhanito (48 MW) in Tavira. There were also increases in power in the wind farms of Açor, Alto da Coutada, Alto Douro, Salgueiros-Guilhado and Terra Fria, totaling 47.5 MW of power connected to the network. At the end of 2012, Portugal preserves its position, already held in 2010, as the sixth European country with largest installed wind power. Eolic Energy - Evolution of Portugal’s installed capacity (MW) 5 000 4450 4301

4 000

3863 3519 3012

3 000 2446

2 000

1681 1047

1 000 537

The Solar Energy

The photovoltaic solar energy is one of the most promising energy resources. In 2012, despite the global financial and economic crisis, the photovoltaic sector has consolidated its position in terms of worldwide installed capacity as the third most important source of renewable energy. In this manner, at the end of 2012 the world's total installed capacity reached 98.4GW (an increment of 31GW during 2012), when at the end of 2011 was about 40 GW, in 2009 around 23 GW, and in 2008 less than 16 GW. Europe is leading the market with about 59% of the total production, although Pacific Asia and Latin America are having a substantial growth in this sector, increasing rapidly their proximity to European countries' production. The countries of the Middle East and Africa are still developing their markets, but have great potential for the sector.

2012 Annual Report consolidated

Regarding the installed capacity during the year 2012, Germany was leading with 7.6 GW, followed by China with 5 GW, Italy with 3.4 GW, and the United States and Japan with 3.3 GW with 2GW. In Portugal, the installed capacity at the end of the year 2012 reached approximately 227 MW, compared to 150 MW in 2011 and to 130 MW in 2010. Photovoltaic Energy - Portugal’s installed capacity (MW) 250 225,5

200 157,7

150 122,9 104,1

100 58,5

50 0

2,7

2,9

3,4

14,5

In Portugal, at the microgeneration level, a change in the legal system brought more transparency into the activity access through a simplified system of interconnection licenses obtention with the PSEN (public service electric network), leading to a clear increase of installed power. At the end of 2011, and as a result of a memorandum of understanding between the Portuguese State and the Troika, the Ordinance Law No. 284/2011, of October 28, was published amending the Law Decree No. 118/2010, of October 25, establishing a rate of 0,32 €/kWh and 10 MW of power's annual quota to be assigned. Thus, the reference fare for 2012 was significantly reduced, which under the Law Decree No. 118/2010, of October 25, amounted to 0.36 €/kWh, as well as the annual quota, which drags the power originally planned of 25 MW/year to 10 MW/year, equivalent to slightly more than 2800 installations. For 2013, the share of power stands at 11 MW, however, the reference price is reduced by about 40%, decreasing to € 0.19 / kWh. The microgeneration activity, which began with the publication of Law Decree No. 34/2011, of March 8, allowed the connection to the PSEN of photovoltaic power plants up to 250kW, as long as they were installed in buildings with significant consumption with an installed power less than or equal to 50% of the contracted power, fixing the fare in 0.25 kWh and the annual quota to be allocated at 50 MW power. The Ordinance Law No. 285/ 2011 of October 28, lined up with the abovementioned MoU, reduced the reference fare for 2012 not in 7%, as was originally planned, but in 14%, which means 0.215 €/kWh for 2012, as well as decreased the share of annual power to 30MW. For 2013, the allocated power share was 30 MW and the reference tariff attributed was also heavily revised downwards to € 0.15 / kWh

The Hydropower

The hydropower is the worldwide leading source of renewable energy, being one of the most attractive for its maturity and predictability, as well as for its ability to compete economically with other non-renewable energy sources. China is by far the largest producer of hydroelectric power in the world, followed by Canada, USA and Brazil. In Portugal, 30% of electricity consumption comes from hydro source since the production of electricity reached an installed capacity of 5500 MW.

2012 Annual Report consolidated

In 2007, the hydroelectric sector in Portugal was marked by the launch of the national programme for high-potential Hydroelectric Dams, which are currently running. This programme foresees the Hydroelectric Exploitations implementation of Padrozelos, Daiv探es, Vidago, Gouv達es, Foz Tua, Pinhos達o, Frid達o, Girabolhos, Alvito and Almourol. The completion of these projects will result in an increase of installed capacity of 1100 MW. Besides the Dams National Plan, there is no development perspective for this sector throughout 2013. The Law decree No. 25/2012, of February 6, suspended the assignment of new injection points into the Public Service Electrical Network, and the Order 3316/2012 from the Ministry of the Economy and the Environment suspended all new hydro-electric licensing and extinguished the ongoing administrative licensing processes.

18 The Telecommunications Sector

2012 Annual Report consolidated

The year of 2012 was conditioned by the deepening economic recession in Portugal and the telecommunications market was not indifferent to this context. As a consequence of the fiscal consolidation measures and the deteriorating credit of the banking companies and individuals, domestic demand decreased 7% in revenues for a total of 6,800 million euros. Despite the decrease of revenues, the number of active operators remained 85. With regard to regulation, the year started with the transposition to the National Legislation of the New Regulatory Framework for Electronic Communications, which was released by the end of 2011, and the adoption of a new Law on Electronic Communications (Law No. 5 / 2004 of 10 February). With this transposition, there is a new focus on responsibility and independence of the National Regulatory Authority (ARN), aligning its ruling to the European Commission ("Commission") and European Regulators for Electronic Communications (BEREC), and also strengthening collaboration with the Portuguese Competition Authority (AdC). These adaptions will be reflected in a more flexible management, access, use of frequencies and the protection of customers, particularly by strengthening the powers of ANACOM. The most important measures are related to the access to services for users with disabilities, obligations related to contractual information provided by the operators, the limitation of the fidelization period to 24 months, the handling of complaints and the extension of Audiotext services to SMS and MMS. Network and Services security has been adapted to the new obligations and the National Regulatory Authorities (ARN) have new competencies. With this new obligation, operators must adopt technical and organizational measures to prevent or reduce the impact of security incidents in networks and services, and they have to notify the Regulator for all significant events. In addition, the Regulators may impose technical measures and define the procedures for incident notifications. In this period under analysis, there was a big change in terrestrial analogue television broadcasting. From 26 April 2012 on, the terrestrial analogue television service has been switched off and is only available in a digital format (TDT). The focus of the dst group is the wholesale segment of the telecommunications market, but the procurement of services depends upon the evolution of demand of retail services from our client operators. On that basis, and according to the quarterly indicators published by the Portuguese National Regulatory Authority (ICP-Anacom), pay-TV subscribers reached 3.12 million subscribers, which represents an increase of 6.3% or 186,000 subscribers. These numbers include not only wireline clients but also DTH (Direct to the Home satellite services), which grew 14,000 clients

Table A - Trend in the total number of subscription television service subscribers by region 4thQ11

4thQ12

YoY (year)

North

863

930

7,76%

Centre

555

593

6,80%

Lisbon

1.028

1.075

4,64%

Alentejo

190

210

10,62%

Algarve

130

141

8,52%

Azores

0,97%

Madeira

1,71%

Total

2.936

3.122

6,33%

Source: ICP - ANACOM Unit: Thousand of subscribers

2012 Annual Report consolidated

The services supported on optical fiber (FTTH/FTTB) accounted for most of the service growth, with an additional 23,000 subscribers or 6.2% growth at the end of the 3rd quarter. Services supported on xDSL grew 5,000 subscribers on that quarter, while the number of Cable TV and DTH subscribers fell 0.2% and 1.6% respectively. At the end of the fourth quarter of 2012, cable TV services represented 46.6% of total subscribers, while DTH were 21.1% and xDSL represented 19.6%. Optical fiber (FTTH/FTTB) continued to grow, and accounted for 12.6% of all the subscribers. Trend in the number of subscription television service subscribers by technology 3.500 3.000

Thousands of subscribers

2.500 2.000 1.500

xDSL + FWA FTTH

1.000

DTH

500

Cable Source: ICP - ANACOM

In 2012, ZON/TV Cabo Group managed to retain the largest share of TV subscribers (50.2%). PT Comunicações (PTC) was the second largest TV operator with a 39.2% share. The third largest operator was Cabovisão (7.8%). About half of all the homes with paid TV services had over 80 channels available at the end of 4Q2012.

Source: ICP - Anacom

The number of customers of fixed Internet access services grew. According to ANACOM, in 4Q2012 it increased 6.2% yearly and reached 2.3 million customers. Table B - Customers of the internet access service at a fixed location YoY 4thQ12 vs 4thQ11 4thQ11

1thQ12

2thQ12

3thQ12

4thQ12

unit.

Broadband customers (fixed)

2.149

2.188

2.211

2.247

2.286

137

6,4

Dial-up access customers

-1

-4,2

Total number of customers

2.175

2.214

2.236

2.272

2.311

136

6,2

Source: ICP - Anacom Unit: Thousand of customers

In 2012, ADSL remained the main technology for fixed broadband internet access with a 45.1% share, but decreased 2.2% when comparing to the same period of 2011. The number of cable modem access services was 948,000, which represents 39.7% of the total services and increased 5% when compared to the same period of 2011. The internet access services supported on optical fiber (FTTH/B) increased 53.2% comparing to the same period of 2011, and it was the technology with highest growth, reaching 362,000 services by the end of 4Q2012, and 15.2% of the total broadband services. Table C - Trend in number of broadband accesses (fixed access) YoY % 4thQ11

3thQ12

4thQ12 4thQ12/3thQ12

Total accesses, of wich:

2.243

2.350

2.391

1,73%

6,58%

ADSL accesses

1.102

1.083

1.078

-0,48%

-2,17%

% of total fixed broadband

49,14%

46,11%

45,10%

Cable modem accesses

903

928

948

2,25%

5,07%

% of total fixed broadband

40,24%

39,47%

39,67%

FTTH/B accesses

237

337

362

7,51%

53,17%

% of total fixed braodband

10,55%

14,34%

15,16%

Others

1,59

1,96

1,68

-14,51%

5,46%

% of total fixed broadband

0,07%

0,08%

0,07%

4thQ12/4thQ11

Source: ICP - ANACOM Unit: Thousand of accesses

2012 Annual Report consolidated

Regarding the market shares for fixed broadband access, the PT Group increased its market share 0.2 percentage points up to 51.3% of the market. Table D - Trend in shares of broadband accesses (fixed accesses) 2011

2012

YoY

Operator

4thQ11

1thQ12

2thQ12

3thQ12

4thQ12

4thQ12 vs 4thQ11

PT group

49,30%

50,00%

50,70%

51,10%

51,30%

2pp

PT Comunicações

47,90%

49,90%

50,60%

51,10%

51,20%

3,3pp

PT Prime

1,40%

TMN

0,10%

0,00%

-0,1pp

ZON Multimédia / TV Cabo Group

33,00%

32,80%

32,50%

32,60%

33,00%

0pp

ZON TV Cabo Portugal

30,50%

30,30%

30,10%

30,20%

30,60%

0,1pp

ZON TV Cabo Madeirense

1,60%

1,50%

-0,1pp

ZON TV Cabo Açoreana

0,90%

0pp

Cabovisão

7,20%

7,10%

7,00%

6,90%

6,70%

-0,5pp

Optimus

5,40%

5,10%

4,80%

4,60%

4,30%

-1,1pp

Vodafone

4,20%

4,10%

4,00%

3,90%

-0,3pp

ONITELECON

0,30%

0pp

AR TELECOM

0,10%

0pp

Other services providers

0,60%

0,50%

0,40%

-0,2pp

-1,4pp

Source: ICP - Anacom Unit: %

In year-on-year terms, main telephone access services increased 0.3%. VoIP had a significant growth (+21%), including services on optical fiber (FTTH/B), which increased by 54% and cable TV services (+9%). Most of the clients were serviced by PT Group's affiliate companies. At the end of 2012, PT Group held about 57.2% of the market, 1.2 percentage points less than a year earlier. The second largest operator was the ZON Group, with a share of 19.7%, 2.3 percentage points more than in 4Q2011. Quadro E - Number of fixed telephone services (FTS) accesses 4thQ11

2thQ12

4thQ12

Variation 4thQ12 vs 4thQ11

Total main accesses

4.542.561

4.541.065

4.557.974

0,34%

Analogue accesses

2.333.777

2.229.734

2.182.970

-6,46%

(of wich) Public payphones

26.645

24.605

23.634

-11,30%

ISDN and diginet accesses

647.095

615.878

583.473

-9,83%

Basic

351.864

329.170

308.068

-12,45%

Primary

288.030

280.080

269.190

-6,54%

Fractioned

3.079

2.993

2.912

-5,42%

Other digital accesses

4.122

3.635

3.303

-19,87%

GSM / UMTS

457.902

447.476

456.168

-0,38%

VoIP / VoB

1.103.788

1.247.978

1.335.363

20,98%

By the end of 2012, the market was still expecting a final decision from ANACOM regarding wholesale access to network infrastructure at a fixed local (Market 4) and the access to broadband services (Market 5), which are critical for dst group's activity. In February 2012, ICP-ANACOM launched a public consultation on the analysis of markets 4 and 5. This analysis is very relevant to the industry because it addresses critical issues with regard to the implementation of next generation fiber optic access networks. During 2012, no final decision was taken, so PTC continued to be obliged to have a public offer for virtual access to its optical fiber network as a temporary measure, until the physical desegregation of the fiber optical loops were enforced. However, this offer will not have nationwide coverage, because 17 counties have been excluded as the Regulator considers that there already exist or will exist in the future alternative optical fiber networks to the Incumbent's.

Source: ICP - Anacom Unit: 1 access

2012 Annual Report consolidated

Regarding service prices, in April of 2012, the Regulator imposed a gradual reduction of prices as a result of a public consultation about price in the wholesale market for mobile termination services. In conclusion, the year 2012 was marked by the transposition of European Regulation, the uncertainty in markets 4 and 5, and the operational growth of internet and TV and the slow decline in voice. Despite this global growth, the economic crisis provoked a lower consumption of the more expensive services and some decrease in the unit value of other services. As a consequence of that, the market contracted as a whole.

2012 Annual Report consolidated

Business Activity

Mio € EBITDA 37,0 36,0 Mio € Turnover

35,0

240,0

34,0

180,0

207,0

198,6

192,4

36,2 35,8

33,0

120,0

32,0

60,0

31,0

32,1

0,0

30,0 2010

2011

2012

2010

2011

2012

During 2012, dst group strengthened its remarkable resilience to a deeply depressed macroeconomic framework as well as reinforced the positive impacts of its innovative creativity in that context. In fact, dst group turnover amounted to 198.6 million euros, which represents an increase of 3.2% compared to 2011. It is important to highlight that the proportional turnover of dst group companies, regardless the consolidation method, overpassed 276.7 million euros. Similarly, dst group's EBITDA in 2012 reinforced the recent periods' trend of consistent growth, reaching more than 36 million euros in the year under review, representing an EBITDA margin of 18.2%, in line with the previous year. The positive levels of the group's operating profitability in 2012 result from the stabilization of EBITDA margin of the Engineering & Construction sector and from the increases of 35.6 and 2.7 percentage points in the areas of Renewable Energy and Environment & Water, respectively. TURNOVER

EBITDA 61,4%

80,0%

0,2%

11,4%

8,4%

-2,9%

21,0%

14,7%

Eng & Const

Ren Ener

Eng & Const

Ren Ener

Environment

Telecommunications

Environment

Telecommunications

The favourable development of dst group's activity in 2012 reflects the growth of its core business area, Engineering & Construction, which recorded a turnover increase in the year of approximately 6.5 million euros, overpassing a 175 million euros total amount. Moreover, the Renewable Energies' business area recorded a significant growth in the year, by approximately 19%, as a result of the high availability of wind resource, measured by average wind speed. The positive development in this area is also verified at the level of operational profitability, with positive impacts in dst group's 2012 EBITDA (15.6% of the year under review). In its turn, the consolidated turnover of Environment & Water business area remained stable in 2012, higher than 18 million euros, while its operating profit recorded an increase that represents the highest contribution to dst group's EBITDA in the period (22.3% of the total, compared with 21.9% in 2011). In 2012, the Telecommunications business area remained in a pronounced investment stage, standing out the fact that the negative EBITDA of the year – about 1.1 million euros - had a low impact in dst group's consolidated EBITDA, being a synonymous of improvement in operating profitability of the remaining business areas of the group.

2012 Annual Report consolidated

The latest dst group's investments in new business areas - highlighting innovation and venture capital – had insignificant impacts in dst group's operating profit, which is a positive outcome given their early stage of growth and investment. The group's consolidated net profit in 2012 was over 10 million euros, which represents a 92.6% increase over the previous year, reaching similar results as in 2010, showing the resilience of dst group in the current adverse macroeconomic context. This result is mainly driven out from the maintenance of the operating profitability, as well as the reduction of the fair value losses on financial investments and the adoption of a strict prudential criteria policy with respect to impairments receivables, as has been done in previous years. Análise Económica

2010

2011

2012

Revenues

207.026,2

192.432,4

198.628,2

6.195,7

3,2%

EBITDA

32.103,2

35.761,7

36.168,3

406.7

1,1%

EBIT

20.800,8

17.666,6

25.467,5

7.800,9

44,2%

Financial Income

-6.769,2

-9.270,7

-11.759,6

-2.488,9

26,8%

Net income before taxes

14.031,6

8.395,9

13.707,9

5.312,0

63,3%

Taxes

-3.093,8

-2.438,8

-2.957,2

-518,3

21,3%

Net consolidated net income

10.937,8

5.957,1

10.750,7

4.793,6

80,5%

Minority interest

659,0

707,8

641,5

-66,3

-9,4%

dst group

10.278,9

5.249,3

10.109,2

4.860,0

92,6%

To:

Values in €m

14 000 12 000

7.801

2.489

10 000

518

66 10.109

8 000 6 000 5.249

4 000 2 000 0 Net profit 2011

EBIT

Financial Income

Income tax

Minority Net Profit 2012 interests

Despite of being known the current difficulties that the national construction sector is undergoing, the Engineering & Construction sector in dst group had a substancial positive evolution in 2012, having corresponded to more than 42% of the consolidated net profit of the year. Nevertheless, in 2012, the Renewable Energies' area had the greatest preponderance in dst group net profit (48.2% of total), while the Environment & Water represented 22% of total consolidated net income, registering an increase when compared to 2011.

Eng. & Const

Ren Ener

Holding and Others

Telecomunications

22,0%

48,2%

42,5%

-6,6%

-6,1%

Net profit

Environment

Values in €m

2012 Annual Report consolidated

Within the promotion of dst group's international business development, 2012 witnessed the entry into several new markets, namely France, Morocco and Venezuela. The group's international operation represented in 2012 approximately 10% of the consolidated turnover, a very sharp upward trend when compared to previous periods. International turnover Mil â&#x201A;Ź

20.000 16.000 12.000 8.000 4.000 0

Values in â&#x201A;Źm

2010

2011

2012

Meanwhile, in 2012, total net debt amounted to 166.8 million euros, reflecting a decrease of about 9% as from 2011. This positive effect, combined with the increase of dst group's profitability in 2012, led to an improvement of the net debt / EBITDA ratio, which stood at 4.61 at the end of 2012 (2011: 5.11). dst group's financial capacity registered a relevant increase, with financial autonomy ratio settling at 27.06% in the year 2012, which is an increase of 5.62 percentage points compared to 2011.

2012 Annual Report consolidated

Bussiness Areas

Engineering & Construction

The next chapter of this report details the analysis of the results and the activity of each of the business areas of dst group in 2012 Mio € Net profit Mio € Proportional turnover

6,0

250,0

5,0

200,0

215,2

221,3

5,4

4,0 4,3

210,6

150,0

3,0

100,0

2,0

50,0

1,0

1,2

0,0

0,0 2010

2011

2012

2010

2011

2012

Construction & Engineering is the core business area of dst group inasmuch that in the 40s was its start up activity with the stone dismount and processing to supply civil works in the region of Braga. This business remains nuclear to the group's activity corresponding to its higher turnover volume, amounting to about 221.3 million euros in 2012. This register represents an increase of 5.1% compared to 2011 and is a sign of dst group's excellent capacity to respond to the current profoundly adverse framework. It is also important to refer the positive impact in turnover of the continuous process of internationalization that the group has been developing. In 2012, the Engineering & Construction area registered a 4.3 million euros net profit, contributing to approximately 42.5% of the total result with an increase of 3.1 million euros when compared to 2011 and reflecting the stabilization of its operating profitability. dst group has an extensive cast of strong technical skills that allow it to be perceived by the market as a landmark of rigor and quality of service in the Engineering & Construction field. It was, in part, as a result of this technical knowledge capital and its perception by the customers, that dst group carried out in 2012 many emblematic works, that protrude, inter alia, the construction of the Decathlon of Setúbal, Elevatory System of Pedrógão, the Shopping Evora Forum, the wind farms of Tavira and Sabrosa, the WWTP of Cávado-Homem, the System of Ruães and Rio Tinto, the Almeida Garrett school and the rehabilitation of the former building of GNR in Braga. It should also be emphasized the unique know-how that dst group has at the level of building broadband of new generation networks, which was consolidated in 2012 with the implementation of these networks in Rural areas of North and Alentejo and Algarve. In 2012, Cari - construtores, s.a. – a group's company dedicated to building, rehabilitation, restoration and conservation – participated in some relevant projects of these areas such as Hotel Mercure in Braga, Hotel Santa Justa and the rehabilitation of Oporto's French school and health centers of Ramada and Póvoa de Santo Adrião. Cari's bet in this very specific niche of market proved to be assertive given the current economic situation, registering in 2012 a 47.8% increase of its turnover and an operating profitability higher than 10.2 %. Through domingos da silva teixeira – empreitadas eléctricas, s.a. (“dte”), dst group has strong competencies in electrical installations, hydraulic, heating, ventilation and air conditioning. This group's company has been showing a remarkable and steady performance, reaching a turnover of more than 32.8 million euros in 2012, which represents a 7.1% increase from the previous year. This year, dte participated in important projects of its business activities, namely Gaiart's Centrum Plaza, Leroy Merlin of Coimbra, Coaches Museum of Lisboa, the 2nd phase of the subway of Vila do Conde, among others.

2012 Annual Report consolidated

dst group is also present in the construction and assembly of metal structures and roofs and facades coating with its company bysteel, s.a. With its installed capacity and the technical excellence of its resources this company has consolidated its position as a reference player in its area of activity. Within a deeply recessive domestic environment, bysteel participated in projects with high dimension and complexity, as are examples the Organic Valorization Center of Braga, the riverfront renovation and rehabilitation of Ave River in Santo Tirso and Embraer Aviation Park in Évora. On the other hand, the path of bysteel's internationalization met three important milestones during 2012: the first supply to the communitary market (in France), the consolidation of its position in Angolan market (which resulted in the award of several contracts amounting more than 11 million euros) and the entrance in the Brazilian market.

Renewables Energy

Mio € Mio €

6,0

Proportional turnover

5,0

25,0 20,0

23,2 21,4

4,9 4,0

19,4

3,0

10,0

2,0

5,0

1,0

0,0

0,0 2011

5,4

4,0

15,0

2010

Net profit

2012

2010

2011

2012

dst group's action in the renewable energies sector is developed through a set of businesses diversified in technological terms – wind, solar photovoltaic, solar thermal, hydro, oceans, but also in energy efficiency. The activities carried out, as would be expected, are in different stages of development and maturity, from steady commercialization to exploratory studies. In this way, and after several years of investment, part of the undertook investments reached the maturity level in 2009 and currently already are net contributors to the results of dst group, which is consolidating as long as its subsidiaries and associated companies progress along their investment cycles. The proportional turnover of this business area amounted to 23.2 million euros, representing an increase of 19.8% compared to 2011, mainly due to the larger wind availability that characterized the year 2012, leading to an increase in wind production this year. The net profit contribution in 2012 was 4.9 million euros, which corresponds to approximately 48.2% of the group's consolidated net result. In wind energy, the activity started in the mid 90s, making dst group one of the pioneers betting in this technology in Portugal. In 2008, came into operation the Wind Farm of Alto Minho I, with an installed capacity of 240 MW, thus expanding the group associated companies' capacity up to 294.40 MW. With further investment, dst group installed power overpassed 68.41 MW. Since March 25th, 2009, with the conclusion of the last wind sub-farm (Alto do Corisco) of the Wind Farm of Alto Minho I, all rights assigned to Ventominho started being operational, materialized in harnessing the winds of Melgaço, Monção, Paredes de Coura and Valença counties, being completed dst group's investments as shown on the next page.

2012 Annual Report consolidated

Alto Minho I

Arga

Espiga

S. Paio

Alto da Vaca

Total

Installed capacity (MW)

240

2,4

294,40

dst group participation(%)

25,63%

12,50%

12,50

10,63%

25,00%

Capacidade. inst. grupo dst (MW)

61,50

4,50

0,75

1,06

0,60

Beginning of operations

2008

2006

2005

2001

Location (municipality)

Melgaço, Monção,

Caminha

Cerveira

V. do Minho

Emp. Eól.

Pq. Eólico

Espiga, s.a.

Cerveirenses, s.a.

Alt. da Vaca, Lda.

68,41

Valença, P. de Coura Promoter

Ventominho

dst group also intends to extend its investments and to strengthen its position in the wind energy sector, both nationally and internationally, and it currently has ongoing wind projects evaluation processes. In 2012 the brand dst solar, s.a. tagged itself once more in the photovoltaic and thermal solar markets, simultaneously in terms of quality and of customer support. In terms of disclosing activities' development, and together with the campaign promotion "I own a sunshine ray" framed within microgeneration, dst solar was present in the main fairs of the sector, namely in Tektónica (Lisbon – May 2012). dst solar operates in an extremely regulated market, reason why legislative changes that occurred in 2011 led to some stagnation of the photovoltaic production market. Nevertheless, dst solar has sought to diversify its business in order to bridge the demand reduction for microgeneration. Accordingly, it directed its trade to off-grid installations (self-consumption oriented) and developed several projects for solar thermal installation of medium/large scale projects in institutions such as schools and homes for the elderly, as well as went through the IPSS's project implementation. Under the Efficiency / Energy Certification, in 2012, dst solar activity continued to focus on energy audits and the respective certifications, whose conclusions enabled its customers to introduce energy rationalization measures, either by changing behaviors or by conducting targeted investments that will induce significant savings in energy consumption. The beginning of Global Sun's photovoltaic panels unit production took place in 2011, during which Global Sun proceeded to the assembly and installation of production line testing phase and ramp up of the line. It was also in that year that the production started, with levels of productivity and waste extremely positive. It is also important to refer the management systems (ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007 / NP 4397:2008) and product (IEC 61215/61730) certifications obtained. The year of 2012 – the first complete year of activity for Global Sun - was marked by a strong focus on the disclosure to the market of the company and of its products, in Portugal and abroad, as well as by the commercial approach to target customers considered within Global Sun's commercial strategy. These actions had a strong impact on the turnover of Global Sun in this year. In the hydropower area, dst hydro continues to carry out a constant activity of developing "greenfield" project as well as analyzing partnership proposals for building and managing hydroelectric exploitations.

2012 Annual Report consolidated

Environment and Water

Mio €

Proportional turnover

35,0 30,0 30,3

32,1

31,5

Mio €

25,0

2,3

20,0

2,2

15,0

2,1

10,0

2,0

5,0

1,9

Net profit

2,2

0,0

2,0

1,9

2010

2011

1,8 2010

2011

2012

With the acquisition of the share capital of Aquapor – Serviços, s.a. at the end of 2008 by Criar Vantagens, Lda., a dst group's associated company, dst group extended its activity into the Environment & Water market. Thus, placed itself as an important national player by adding new concessions to those previously held through Agere – Empresa de Águas, Efluentes e Resíduos in Braga. The proportional turnover of this business area amounted to 31.5 million euros in 2012, remaining relatively steady compared to 2011, having a slight decrease in the order of 2.5%. The contribution of this business area for dst group's net income in 2012 amounted to 2.2 million euros, corresponding to about 22% of the total of the period. The group's objectives for Environment & Water business area, through Aquapor, are the diversification of the businesses' portfolio and the focus on internationalization. In the international area, the outlined strategy includes the Maghreb countries, the PALOP (Portuguese-speaking African countries) and Brazil, seeking for local partners for the development of water business operations, similar to the procedures outlined for Portugal. The broad range of skills enables the approach of any management model, either through concessions, or through project design / construction / operation or services. Accordingly, in 2011 was created Visaqua – Gestão de Infraestruturas e Serviços Ambientais, s.a., held by Aquapor – Serviços, S.A. and by Intelvisa, Gestão de Participações, s.a. (owned by Intelec Holdings, Lda. and Visabeira) with the objective of positioning itself as the reference operator in Mozambique in the areas of water supply, sanitation and solid waste. In 2012, it is important to highlight the setting-up, by Aquapor and Luságua - Serviços Ambientais, S.A. of a company named Luságua Lisboa – Gestão de Águas, S.A., who won through public tender the concession for operating the services of water supply and of wastewater collection in the jurisdictional area of APL - Port Authority of Lisbon, for a period of eight years

Telecommunications

Mio € Mio €

0,0

Proportional turnover

Net profit 2010

2012

-0,2

1,2 1,0

-0,4

1,1

-0,6

0,8

-0,7

-0,8

0,6

-0,9

0,6 -1,0

0,4 0,2

2011

-1,2

0,3

-1,4

0,0 2010

2011

2012

-1,2

2012 Annual Report consolidated

In accordance with the strategy for the development and management of a new generation network, in 2008, dst group incorporated dstelecom, a company based for the integration of broadband telecommunications services of voice, data and image. This business area is in a substantial investment stage and therefore operating results are insignificant. Thus, the 2012 period was characterized by the continuity of the works on the Project for the Installation, Management, Operation and Maintenance of an Electronic Communication Network High Speed ("Network") in the North and in Alentejo and Algarve areas, which are being developed by dstelecom's affiliates - dstelecom Norte and dstelecom Alentejo and Algarve - within an investment that amounts to 80 million euros. This project's scope and its high national impact begun in 2011 and remain ongoing in 2013. In 2012 dst group's telecommunication business activity was focused on the projects mentioned above due to their early stage of development. In the figure herewith is shown the configuration of the network projected and already being built and in operation as well as to the North and Alentejo and Algarve networks' backbones. To be noticed that, in 2012, the subsidiaries Minhocom - Gestão de Infraestruturas de Telecomunicações, E.I.M. and Valicom - Gestão de Infraestruturas de Telecomunicações, E.I.M. had an overall increase of their activity resulting from a more aggressive commercial strategy and from the expansion of services' portfolio being expected the incoming of new customers.

Through dstelecom s.a., dst group has been focusing on increasing the skills for the installation, implementation, management and operation of next generation networks and currently holds strong differentiating know-how and expertise in the telecommunications sector. Due to the high growth of activity in this business area in 2012 the number of qualified personnel was strengthened in order to ensure the creation of a skilled and experienced team that is able to safeguard the proper maintenance of the technical and commercial capacity as well as the quality and consistency of the services and, simultaneously, maintaining the necessary resources for the development of new projects. The combination of dst group technical expertise in this area with a truly differentiating product from those currently available on the market (i.e. "operator of operators", segment which is based on the concept of open networks to all operators), exponentially increases the group's potential for success, both in the domestic market and in foreign markets, through exporting the model developed in Portugal. The confidence of dst group on this business area is further enhanced by the fact that in order to support the growing need for higher bandwidth, fiber-optic technology has been the fastest growing in Portugal, replacing copper as preferred resource within corporate clients.

2012 Annual Report consolidated

Financial Risk Management Objectives and Policies

Beyond the risks that may result from the economy downturn, at this time, other foreseeable risks that may call into question the activity or materialization of the goals expected for the Entity are not predictable.

Material Events occuring after the End of the Period

No events subsequent to the balance sheet date exist that may have a material impact on the financial statements.

Final Note

The Board of Directors expresses a word of recognition to all employees and of gratitude to everyone who in one way or another cooperated with the company. Special gratitude is hereby expressed to the Sole Fiscal Auditor, trade creditors and banking entities that very much honor us with valuable relationship. Braga, April 15, 2013 The Board of Directors, José Gonçalves Teixeira; Chairman Avelino Gonçalves Teixeira; Vice Chairman Joaquim Gonçalves Teixeira; member of the Board of Directors Hernâni José Gonçalves Teixeira; member of the Board of Directors Teresa Gonçalves Gomes; member of the Board of Directors

2012 Annual Report consolidated

Corporate Social Responsability

dst group pursues a policy of social responsibility based on sustainability strategies that include the concern for the collective welfare and the social and environmental effects of its activities. dst group's programme for social responsibility covers areas as culture, education, health, safety, environment and knowledge. This program's curriculum is transversal to the group and is developed in internal and external context involving all employees, aligned with dst group's values: Ambition, Passion, Loyalty, Solidarity, Good taste, Courage, Respect and Rigor. The concern of dst group for social responsibility matters not only increases the personal wealth of each employee as well as contributes to the environment in which it operates transmitting to the market the position of a "cultured, cosmopolitan and cool" group, projecting a image of modernity and of social, cultural and economic dynamism

Human Resources

The continuity of Human Resources' good practices in 2012 within dst group allowed a new opportunity to be among the "Best Places to Work" according to the study conducted by Exame magazine in partnership with Accenture. The study ranks the 100 companies chosen as examples of excellence in human resources. dst group presented a degree of commitment of 68.27%, stressing that in 2012 the percentage of participants in the study, measured by the average response rate, increased to 84%. In 2012 the organization of events directed to employees was part of dst group's agenda, highlighted by the annual employees' meeting, this time entitled "Encontros com Soluções" (“Meetings with Solutions”) which attracted more than 220 participants. The event was attended by Professor Manuel Caldeira Cabral, an economist and professor at Minho University, and Professor José Cândido de Oliveira Martins, professor at the Catholic University of Portugal. In addition, the animation was handled by Braga Theatre Company with extracts from the play "Num ritmo de comédia com… Falar Verdade a Mentir.” dst group promoted the third futsal tournament with teams from various departments and companies including members of dst group' Board of Directors. The grand final will be held on May 19, the date on which the group inaugurates its sport facilities, created for the well-being of its employees, reinforcing the benefits available within its industrial complex. The campus is comprised of two football fields for five players and a tennis court, all of them with artificial turf and a space for aerobic maintenance. This space enables the development of physical activity outdoors as well as provides a pleasant social location. Still in 2012, dst group started its social gardens' initiative by preparing and providing land for its employees aiming the development of the practice of organic farming by planting their own foodstuffs. This initiative was joined by dozens of participants. In the context of culture, dst group also opened an art gallery entirely dedicated to its International Photography Award "Emergentes dst", bringing together the photographic portfolio of several editions of this initiative, which was visited by gallerists and artists from throughout Europe and South America. In order to complement these cultural activities, tickets to shows are regularly available, including music concerts and theatre. Moreover, employees' birthdays are celebrated in the offices' bar and the group offers a book to each employee with the anniversary celebration.

2012 Annual Report consolidated

Furthermore, dst group has a cabin in Theatro Circo of Braga and another at the EstĂĄdio Municipal de Braga (Braga's Municipal Stadium), giving employees free access to those two facilities. This year dst group reinforced protocols with various entities, ranging from financial to telecommunications, with the goal of providing special conditions to its employees. At the end of 2012, and in the universe of companies held in more than 50%, the group had 944 employees, of whom 19% are women and 81% men, and about 32% are senior management.

Safety, Hygiene and Health

Throughout the year of 2012, 884 training/awareness actions were held for the group's employees and 2.500 actions for sub-contractors' employees. Additionally, throughout the year were carried out multiple awareness-raising campaigns by the Health and Security Department in order to draw attention, in a different way, for some subjects that are essential to safety and health of workers, such as falls from height, burial and hygiene at workplaces. Moreover, were performed noise controls and testings of exposure to chemical agents in the required facilities, as well as corrective and prudential measures were implemented in places where the limits were reached, according to specific legislation. As in previous years, the examinations and consultations of occupational medicine ware carried out at dst group's medical facilities. The services are assured by four nurses, one occupational doctor and two doctors of curative medicine, being one nurse permanently present in the group's premises. In addition, dst group has dental services and gives free access to its employees. During the year 2012 about 610 tests were executed, of which 105 were entrance exams, 6 were due to return to work after sickness leave of employees exceeding 30 days and 3 tests were conducted for employees who have suffered work-related injuries and who received care at dst group's premises. Other screening tests were also performed, such as spirometry and audiometry exams. Furthermore, in the course of 2012, a general simulation in all facilities of dst group was carried out, with the aim of preparing intervention teams for a possible emergency situation.

R&D and Innovation

Since very early dst group embraced Research & Development as a key activity for its diversification strategy, which implies a clear commitment to new technologies. Accordingly, the group acquired innovation point, a company dedicated to enhance, evaluate, produce and commercialize innovative ideas. This company is focused on the creation of new product categories, services or business models that challenge established paradigms and generate significant value increases for consumers, for customers and for dst group itself. The dynamism of innovation point is the basis of many innovative projects, examples of which are the following projects: - Bologna 4 students â&#x20AC;&#x201C; application that supports the study organization for college students; - Lappiz.com - social network for college students sharing knowledge; - Gasmappers.com - community network for sharing information on fuel prices; - Where-to-invest-in-Portugal.com - territorial marketing platform for municipalities; - SmarBraga.com - platform for Braga's environmental monitoring; - dst Mobility - development and implementation of sustainable electric mobility solutions;

2012 Annual Report consolidated

- PowerTracker â&#x20AC;&#x201C; software for monitoring energy production with the possibility of expansion to mobile platforms, capacity of reporting and alarm system; - Rayleague.com - social network for football scouting that aims to democratize the process of players' selection worldwide, assisting their promotion and opportunity to live their dream. This project has over 1 million views worldwide and has athletes from more than 40 countries, clearly revealing itself as an international product; - Vocation - software for mobile devices developed in partnership with the multinational human resources SHL that enables the user to perform a battery of tests in order to determine one's real vocation in a simple and fairly accurate way. Vocation is available in the three major domestic operators and worldwide, in the Apple store and in the Android Market. Nevertheless, the research and development activity is not limited to innovation point. dst group has partnerships with research centres, universities and national and international companies. The R&D component across the entire dst group remained particularly active in 2012, notably with the certification of its management RDI system under NP 4457, for which contributed electronic tools developed by innovation point in partnership with external consultants. The profound success of this project results from the deep commitment between dst group's Board of Directors and all the members engaged in it. Global Sun and Cari are already certified in RDI while innovation point, dte, dst, dstelecom and bysteel are finalizing the respective certification procedures. Still in 2012, it is worthwhile highlighting the visit of the Secretary of State for Entrepreneurship and Innovation (at that date, Mr. Carlos Nuno Oliveira) to dst group's headquarters, in order to know more about its activities, with special focus on telecommunications, technology and innovation. Mr. Carlos Nuno Oliveira remarked himself to be surprised by dst group's ability to counteract the tendency of the current economic situation and to take the challenge to explore new markets and innovative opportunities.

Society

dst group's extensive program for social responsibility also kept the emphasis on patronage, focusing on promotion and on the dissemination of culture and education. As a group based under the triple C - cultured, cosmopolitan and cool concepts, it prioritizes cultural activities since its inception, raising its positioning and differentiating itself in the way of doing business. Among various activities and initiatives undertaken in 2012, the following deserve recognition: - Main Maecenas of the Theatre Company of Braga; - Main Maecenas of the Book Fair of Braga; - Assignment of the Grand Prize of Literature in the cash value of 15,000 euros, being the 2012 edition for works of poetry published in 2009 or 2010; - For the third consecutive time, dst group promoted the International Photography Award "Emergentes dst ", which rewards every year the best international photographic work. The award is supported by "Encontros da Imagem", one of the largest initiatives in the field of visual arts in Portugal, which is also an original event born in Braga. The portfolio from the Spanish author Sebastian Liste was elected as the best contemporary photographic project submitted in 2012. In this third edition, dst group received over 400 national and international portfolios, 70 of which were analyzed by commissioners, gallery and expert editors from around the world who were present in Braga evaluating those

2012 Annual Report consolidated

portfolios. The finalists were on display in the Gallery "Emergentes dst " in Braga created by dst group for this purpose; - The group continuously develops its support to literature and books, offering a book to each employee on their anniversary. Moreover, dst group's newsletter is issued relying on the active contribution of employees who participate by submitting articles, with unrestricted subjects. Additionally, the group also promotes reading by offering books to school libraries, as well as by having in the group's library all kinds of literature for the enjoyment of employees; - dst group strongly encourages the participation of its employees in voluntary work. Therefore, the group continues to actively collaborate with Habitat and Banco Alimentar Contra a Fome. Once again, during the Christmas season, children, elderly and disadvantaged ones have benefited from the support of dst group's employees who have undertaken a solidary action to social support contributing with the supply of foodstuffs, clothing, footwear and hygiene products. Furthermore, the group also supported the realization of an additional session of "Aladdin on Ice" show, on display on December at the Rivoli, which gathered more than 750 children from welfare institutions of the Porto area.

Environment

dst group kept the environmental management system certification NP EN ISO 14001: 2004 in the areas of construction and public works, maintenance of vehicles and equipment, manufacture of wood products and furniture, production and assembly of metal structures (bysteel, s.a.). Additionally, dst group maintained the certification in solar panels' production (Global Sun) and started the implementation of the Environmental Management System in dstelecom. Likewise, dst group has maintained EMAS registration, in the areas of maintenance of vehicles and equipment, and manufacture of wood products and furniture. Moreover, it has also renewed EMAS registration in the production and assembly of metal structures (bysteel). The certification and EMAS registration are sustained and improved through systematic audits from APCER (Portuguese Certification Association). Taking on its responsibility for protecting the environment during the execution of various works, dst group systematically implemented Environmental Management Plans in order to minimize the negative impacts of its activity. The Environmental Management System implemented in the group's companies reflects its concerns with environment preservation, denoting a particular care in the construction industry and public works. In 2012, dst group renewed dst, s.a.'s authorization for waste reception. Thus, on December 2012, CCDR-N conducted an inspection to its facilities and a new license was issued. Regarding the concrete central, which is covered by 3rd Stage CELE regime (2013-2020), dst group requested the emissions' license to the Portuguese Environment Agency. At the end of 2012, the group communicated the need for new data collection, since one of the concrete centrals which contribute with more than 30% for the total emissions has seen its activity reduced by more than 50%. In 2012, dst group also installed 297 photovoltaic panels in 4 group companies (bysteel, dte, steelgreen and global sun), which produced 68 MWh of energy by the end of the year under review. After conducting a feasibility study for installing flow reducers at the central facilities of dst group, 56 filters were installed and the flow rate was reduced permanently in all faucets of the industrial complex.

2012 Annual Report consolidated

It is important to be noticed that in dst group's construction contracts the percentage of mixed construction waste and demolition waste (waste that is not suitable for recycling or unsorted) has been declining over the years, reaching 5.3% in 2012 (vide illustration). 14.000

350

12.000

300

10.000

250

8.000

200

6.000

150

4.000

100

ton/Mio and % RCD mix

ton

Construction and Demolition waste

Total 2008-2012 (t) Total 2012 (t) ton/Mio 2008-2012

2.000

0,3

50 0

0 Commercial areas

Industrial areas

School works

Urban rehabilitation

Hydraulic works

Wind farms

Optic fiber

dst group has an Environmental Committee, which met on June 5, 2012 (World Environment Day). The subject of the event was “dst environmental performance” and a professor of the School of Architecture of Minho University made a presentation about sustainable construction. Additionally in 2012, dst group launched a campaign to reduce the consumption of diesel "Eu reduzo 20%" (“I reduce 20%”) – and had a substancial success, provided that during the year about 10% of dst group's vehicles decreased more than 20% their diesel average consumption. As happened in previous years, in 2012 dst group continued the distribution of lamps to employees in exchange of bottles filled up with corks within the GreenCork Quercus campaign. The environmental concerns of dst group are not limited to their domestic influence, consequently, in 2012 the participation in the Eco-School Council School of Vila Verde was maintained and, moreover, dst group participated in the 4th Edition of the European Week Waste Prevention in the category of Business / Industries. The chosen subject "More than recycle avoid spending" was incorporated in a number of awareness actions throughout the week in which that event took place.

Quality and Certifications

To succeed in an industry whose macroeconomic environment is highly turbulent requires careful attention and responsiveness that allows for continuous adaptation in order to face the growing market competitiveness. dst group continues to direct its activity to the permanent improvement of customers satisfaction, through an appropriate and efficient Management System, in which all the employees are involved. dst group invests in the employees education since it considers vital the mobilization and commitment towards Quality. In this field, dst group has well-defined objectives, that are quantifiable and consistent with the current management policy. To ensure dst group's continuous pursuit for improvement, the results are evaluated continuously through cyclic analysis of the activities and the respective performance as well as the detection of opportunities for improvement. Furthermore, dst group is commited with the continuous enhancement of its products and services in order to satisfy customer needs, giving always priority to quality and striving for the

% RCD mix 2012

2012 Annual Report consolidated

implementation of practices and procedures conducive to proper management of its activities, products and services. The further development of the core business area remains a objective for dst group, in particular with the consubstantiation with technological means, qualified human resources and with adopting effective management policies, in order to increase competitiveness, productivity and to be able to conquer the most demanding customers. Additionally, strengthening the culture of innovation supported by an enhanced creativity, surveillance, production and knowledge are also fundamental purposes for the sustainability of dst group. dst group is certified by APCER in quality according to NP EN ISO 9001:2008 in the following areas: - Design, development, production and application of bituminous concrete; - Construction and public works, laboratory testing, maintenance of equipment and vehicles, design, development and manufacture of wood and products of wood, furniture and assembly work: dst, s.a.; - Conception, development and production of concrete: tconcrete, s.a.; - Conception, development, production and assembly of metal structures and design of engineering projects: bysteel, sa; - Processing stations installations and public lighting. Extension installation medium-voltage and low-voltage, electrical installations using electrical energy and heating installations, ventilation, air conditioning and refrigeration. Design and optical fiber installations: dte â&#x20AC;&#x201C; empreitadas elĂŠctricas, s.a.; - Production of photovoltaic panels: global sun, s.a.; - Restoration and refurbishment of the heritage building and public works: Cari Construtores, S.A. dst, s.a. holds the CE label in the context of bituminous mixtures for products produced in our central complying the norm EN 13108-1: 2006.

2012 Annual Report consolidated

Consolidated Financial Information

Consolidated Balance sheet Description

Notes

31-12-2012

31-12-2011

Amounts expressed in Euros

ASSETS For the years ended December 31, 2012 and 2011.

Non-current assets Tangible fixed assets

7, 8

73.607.225,93

49.260.289,50

Translation of financial statements originally issued in Portuguese.

Investment properties

73.417.205,06

68.631.223,79

In case of discrepancy the Portuguese version prevails

Goodwill

120.572.198,48

Intangible fixed assets

30.021.695,07

31.681.181,52

Financial investments - equity method valuation

39.313.977,39

38.498.340,94

Financial investments - other method valuation

11.142.212,47

7.195.774,45

Deferred tax assets

3.955.844,89

5.869.053,24

352.030.359,29

321.708.061,91

Current assets Stocks

35.296.206,08

34.821.900,12

Trade Debtors

102.199.035,71

113.411.186,77

Prepayments

548.289,15

1.481.047,47

Taxation receivable

5.921.506,51

4.542.718,93

Shareholders

2.752.000,00

2.759.042,15

Other receivables

14.008.773,63

12.567.377,17

Deferrals

864.880,81

1.093.309,72

Other financial assets

40.974,83

39.486,14

Cash in hand, at bank and bank term deposits

20.542.875,18

13.374.460,18

182.174.541,89

184.090.528,62

534.204.901,18

505.798.590,53

25.000.000,00

Share premiuns

50.000.000,00

Legal reserve

3.814.736,61

3.063.691,11

Other reserves

165.440,00

16.426.576,14

14.241.113,00

Financial assets adjustments

8.829.010,62

9.437.168,07

Other changes in equity

28.890.862,17

6.033,34

Net profit/(loss) for the period

10.109.216,05

5.249.262,04

Minority interests

1.339.242,28

1.302.445,04

Total equity

144.575.083,88

108.465.152,59

Total assets EQUITY AND LIABILITIES Equity Ordinary share capital

Retained profit

Liabilities Non-current liabilities Provisions

8.659.700,26

7.103.527,45

Loans

23, 8

147.000.930,71

165.571.343,23

Deferred tax liabilities

12.257.558,95

4.049.157,55

Financial instruments

1.009.954,99

812.096,19

Other payables

20.861.873,73

30.090.512,75

189.790.018,63

207.626.637,17

Current liabilities Trade creditors

75.751.489,14

81.044.076,05

Prepayments

1.255.892,18

59.193,52

Taxation payable

2.745.529,00

1.839.639,87

Shareholders

271.209,15

Loans due within 1 year

23, 8

51.309.264,18

36.540.340,17

Other payables

26.121.620,22

47.958.798,58

Deferrals

42.656.003,94

21.993.543,44

199.839.798,67

189.706.800,77

Total liabilities

389.629.817,31

397.333.437,94

Total equity and liabilities

534.204.901,18

505.798.590,53

2012 Annual Report consolidated

Consolidated Income Statement Notes

2012

2011

Turnover

198.625.191,85

192.370.231,75

Subsidies

132.836,94

30.164,53

Gains/(losses) on subsidiary, associates companies and joint ventures

6.159.651,65

4.293,378,59

Changes in production stocks and work in progress

792.584,20

(1.018.819,17)

Capitalization of own costs

2.960,00

62.182,46

Cost of sales

(55.434.895,72)

(48.903.866,45)

Other external charges

(94.110.101,05)

(84.235.818,13)

Staff costs

(25.151.252,95)

(24.772.793,43)

Trade debtors impairment (losses/written off)

(1.820.454,89)

(8.131.884,44)

Provisions (increase/decrease)

46.089,91

77.851,52

Increase /decrease in fairvalue

207.996,34

(3.009.534,04)

Other operating income

10.815.648,47

6.482.814,16

Other operating charges

(5.664.307,02)

(4.025.854,14)

34.601.947,74

29.218.053,21

(9.134.454,58)

(10.041.052,34)

25.467.493,16

19.177.000,88

Net operating profit/(loss) before depreciation and amortization, interets and taxes Depreciation, amortization and other amounts written off tangible and intangible fixed

Net operating profit/(loss) before interets and taxes Income from interests

3.230.941,59

4.412.254,53

Interest payable and similar charges

(14.990.565,68)

(15.193.362,60)

13.707.869,08

8.395.892,81

(2.957.168,02)

(2.438.820,27)

10.750.701,06

5.957.072,55

Shareholders

10.109.216,05

5.249.262,04

Minority interests

641.485,01

707.810.51

10.750.701,06

5.957.072,55

2,15

1,19

Net profit/(loss) before taxes Corporation tax Net profit/(loss) for the period

Net profit/(loss) for the period atributable to:

Earnings per share

Amounts expressed in Euros

For the years ended December 31, 2012 and 2011. Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails

2012 Annual Report consolidated

Consolidated Statement of Equity Changes in 2011 Description

On january 1, 2011

Amounts expressed in Euros

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Legal

Other

Retained

Financial assets

Other changes

Net profit/

Minotiry

capital

premiuns

reserve

reserves

earnings

Adjustments

in equity

loss of the period

interests

25.000.000,00

50.000.000,00

1.477.851,20

165.440,00

6.569.941,52

9.098.356,76

10.278.855,38

1.399.319,99

103.989.764,85

1.585.839,91

8.693.015,48

(10.278.855,38)

Total

Changes during the year Application of 2010 result Changes in ither equity variations: Equity method

(221.489,80)

(707.581,77)

(929.071,57)

Investment subsidy

Differences from financial statements convertion

6.033,34

Adjustments for deferred taxes

542.010,79

6.527,66

548.538,45

Other variations recognized in equity

(10.664,32)

(285.307,59)

(18.577,91)

(314.549,82)

1.585.839,91

8.460.861,36

(450.878,57)

6.033,34

(10.278.855,38)

(12.050,25)

(689.049,60)

Net profit / loss for the period

5.249.262,04

707.810,51

5.957.072,55

Comprehensive income for the year

5.249.262,04

2.095.080,25

7.344.342,29

Operations with shareholders Share capital realizations

Share premium realizations

Retained profits from subsidiaries

(789.689,88)

789.689,88

Distributions

(287.973,71)

Others operations

(504.661,50)

(789.689,88)

789.689,88

(792.635,21)

14.241.113,00

9.437.168,07

1.302.445,04

108.465.152,59

On december 31, 2011

25.000.000,00

50.000.000,00

3.063.691,11

165.440,00

Consolidated Statement of Equity Changes in 2012 Description

On january 1, 2012

5.249.262,04

6.033,34

Amounts expressed in Euros

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Net profit/

Minotiry

Adjustments

in equity loss of the period

interests

Total

14.241.113,00

9.437.168,07

6.033,34

5.249.262,04

1.302.445,04

108.465.152,59

4.498.216,53

(5.249.262,04)

Legal

Other

Retained

Financial assets

capital

premiuns

reserve

reserves

earnings

25.000.000,00

50.000.000,00

3.063.691,11

165.440,00

751.045,51

Other changes

Changes during the year Application of 2011 result

Changes in ither equity variations:

Equity method

(878.774,56)

(1.164.441,56)

(2.043.216,12)

Investment subsidy

(4.301,78)

38.544.121,50

38.539.819,72

Differences from financial statements convertion

(26.063,19)

Adjustments for deferred taxes

(9.633.229,48)

Other variations recognized in equity

(729.838,42)

(143.554,52)

3.559,96

(869.832,98)

751.045,51

2.885.301,77

(1.307.996,08)

28.884.828,83

(5.249.262,04)

3.559,96

25.967.477,95

Net profit / loss for the period

10.109.216,05

641.485,01

10.750.701,06

Comprehensive income for the year

10.109.216,05

1.947.490,01

12.056.706,06

Operations with shareholders Share capital realizations

3,33

Share premium realizations

Retained profits from subsidiaries

(699.838,63)

699.838,63

Distributions

(646.615,02)

Amounts received to cover losses

Others operations

38.363,96

(699.838,63)

699.838,63

(608.247,73)

16.426.576,14

8.829.010,62

1.339.242,28

144.575.083,87

On december 31, 2012

25.000.000,00

50.000.000,00

3.814.736,61

165.440,00

28.890.862,17

10.109.216,05

2012 Annual Report consolidated

Consolidated Cash Flows Statement Description

Notes

2012

2011

For the years ended December 31, 2012 and 2011.

Operating activities - direct method Received from trade debtors

239.763.503,97

183.187.808,49

Payments to trade creditors

(152.387.389,32)

(133.002.406,04)

Payments to and on behalf of employes

(22.879.104,78)

(24.603.749,88)

Cash flow from operations

64.497.009,87

25.581.652,57

Corporate tax payments/receivables

(3.310.727,03)

(2.980.228,91)

Others receivables/payments

Operating cash flow(1)

61.186.282,84

22.601.423,66

Financial investments

(5.783.938,31)

(4.937.601,66)

Tangible fixed assets

(35.667.703,10)

(23.561.838,58)

Intangible assets

(866.348,15)

(987.439,74)

Loans

(5.782.441,43)

Other assets

(6.862.909,21)

(3.205.703,18)

(54.963.340,21)

(32.692.583,15)

Financial investments

333.333,33

TangibleFixed assets

1.387.938,62

Investment subsidies

32.574.073,28

4.451.020,52

Interests

4.199.132,05

2.669.140,78

36.773.205,33

13.041.687,68

(18.190.134,88)

(19.650.895,47)

5.584.868,51

Loans garanted

(22.325.472,82)

Interests

(13.502.260,14)

(10.388.662,18)

(35.827.732,96)

(10.388.622,18)

(35.827.732,96)

(4.803.793,67)

(7.168.415,00)

(1.853.265,48)

13.374.460,18

15.227.725,66

20.542.875,18

13.374.460,18

Investments activities Payments for:

Revenues from:

Investement cash flow (2)

Financing activities Revenues from: Loans obtained

Payments for:

Financing cash flow (3)

(Decrease)/Increase in cash in the year (1) + (2) + (3) Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period

Amounts expressed in Euros

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails

2012 Annual Report consolidated

Annex for the year ended December 31, 2012

Entity identification The dst group was constituted in 1999, its registered office is in Palmeira – Braga, being the shareholder company DST, SGPS, SA, which object is the management of shareholdings from other entities as an indirect form of exercises the economic activities in engineering and construction sector, water and sanitation, renewable energy, telecommunications and other services. These financial statements are the Entity's individual financial statements. All the amounts presented in these notes are expressed in Euros, unless otherwise stated. 2.

Accounting referential for the financial statements preparation

2.1.

Accounting Normalization System (“SNC – Sistema de Normalização Contabilística”)

The financial statements herewith were prepared in accordance with all standards comprised in the SNC. It should be considered that as part of SNC are the Basis for the presentation of financial statements, the Financial Statements Models, the Accounting Code, the Financial Reporting and Accounting Standards (“NCRF”) and the Interpretive Guidelines. These standards of SNC are regulated by the following legislation: - Law-decree number 158/2009 of July 13 (Accounting Normalization System), with amendments introduced by law number 20/2010 of August 23; - Ordinance number 986/2009 of September 7 (Financial Statements Models); - Notice number 15652/2009 of September 7 (Conceptual Framework); - Notice number 15655/2009 of September 7 (Financial Reporting and Accounting Standards); - Ordinance number 1011/2009 of September 9 (Accounting Code). In order to ensure the proper and true expression of the financial position and the entity's performance, were used the standards that integrate the SNC, referred to above, in all aspects pertaining to the recognition, measurement and disclosure. However where the SNC do not respond to particular aspects of transactions or situations are complementarily applied in the following order, the International Accounting Standards, as adopted pursuant to Regulation (EC) number 1606/2002 of the European Parliament and Council of July 19, the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the IASB, and respective SIC-IFRIC interpretations. 3.

Main accounting policies The main accounting policies used for the preparation of the financial statements are stated below.

3.1.

Presentation basis The accompanying financial statements have been prepared assuming the business continuity, based on the historical cost convention and prepared from the entity's accounting records, kept in accordance with IFRS in force at the date of the financial statements preparation. The Group adopted the provisions of IFRIC 12 - Service Concession Arrangements and SIC 29 - Disclosure - Service Concession Arrangements. The IFRIC 12 defines the rules to be followed in the concession arrangements, given the services provided and its control power over the concession assets.

2012 Annual Report consolidated

Under the concession activity, the Group recognized an intangible asset that represents the right to the infrastructure use and exploitation provided by the Grantor. Although it is the Group responsibility to finance the infrastructure construction, since all goods are to integrate the concession and automatically will be subject to the non-transferability terms and assets reversal, are not considered as assets controlled by the Group, and therefore not recognized as tangible fixed assets. Through the analysis performed to the economic and financial rebalancing conditions provided on the concession agreement, it is founded that certain rebalancing conditions are directly associated with the demand risk, while others are on the Grantor's dependence or other associated entities, and from the interest rates fluctuations in financial markets. And based on this analysis it was concluded that the rebalancing conditions act as a Grantor's guarantee, limiting the margin earned by the Group and by placing a ceiling on the grant return. But that does not constitute a right to receive from the Grantor or his behalf, whereby the values invested in the concession were recognized as an intangible asset. Based on the IFRS provisions and complementarily on the IFRIC 12, the accounting policies adopted by the Company were as follows. 3.1.1. Continuity assumption Under the continuity assumption, the entity has evaluated the information available and its future expectations, taking into account the entity's ability to continue with your business. Of the evaluation resulted that the business is able to proceed assuming its continuity.. 3.1.2. Accruals assumption (or economic periodization) The Entity records its income and expenses in accordance with the rules of the increase, by which income and expenses are recognized as they are generated, regardless of when they are received or paid. The differences between the amounts received and paid and the corresponding income and expenses are recognized under "Deferrals" or "Other payables or Other receivables." 3.1.3. Consistency of presentation The items presentation and classification in the financial statements are consistent from one period to another. 3.1.4. Materiality and aggregation The materiality depends on the size and nature of the error or omission, sober in the circumstances that surround it. It is considered that the omissions or incorrect statements are materially relevant items if they can, individually or collectively, influence the economic decisions taken by users of financial statements. An item that is not materially relevant to justify its separate presentation on the face of the financial statements can however be relevant material to be presented separately in the notes to this annex. 3.1.5. Compensation The assets and liabilities, income and costs are reported separately in the respective items of the balance sheet and the income statement, so that no assets were compensated for any liability or any expense for any income, both vice-versa. Gains and losses arising from a group of similar transactions are reported on a net basis, i.e., gains and losses from exchange rate differences and gains or losses arising on financial instruments held for trading. These gains and losses are reported separately if they are materially relevant.

2012 Annual Report consolidated

3.1.6. Comparative Information The accounting policies and measurement bases adopted at December 31, 2012 are comparable with those used in preparing the financial statements for December 31, 2011. The comparability of the information between periods is continuously improvement object in order to be increasingly an instrument of help to users allowing them to take economic decisions and assessing the trends in financial information for forecasting purposes. 3.2.

Recognition and measurement policies used in the preparation of financial statements

3.2.1. Transactions in foreign currency The Entity's financial statements are presented in Euros; the euro is the functional and presentation currency. The transactions in foreign currency (currency other than the functional currency of the entity) are recognized at exchange rates of the dates of the transactions. At each reporting date, the carrying amounts of monetary items denominated in foreign currency are updated at the exchange rates that date. The carrying amounts of non-monetary items are recognized at fair value denominated in a foreign currency are updated to the exchange rates of the dates on which the respective fair values were determined. The carrying amounts of non-monetary items are recognized at historical cost, denominated in a foreign currency are not upgraded. Positive or negative exchange differences driven out from differences between the exchange rates in force at the transaction dates and at the dates of collection, payment or of balance sheet are recognized as income and/or expenses in the period's income statement as foreign exchange gains and/or losses. 3.2.2. Tangible fixed assets Tangible fixed assets are recognized at acquisition cost, net of related depreciation and any impairment losses. The acquisition cost includes all expenditure directly attributable to the acquisition of such assets and to their availability in local and operational conditions required. Subsequent charges are included in the acquisition cost of the asset or recognized as separate assets, as appropriate, when it is probable that future economic benefits will flow to the entity through its use and its cost can be reliably measured. Tangible assets in progress, fixed assets still under construction or completion, are accounted for at acquisition cost deducted of eventual impairment losses. The depreciation of these assets starts at the moment that they are available for use. Depreciation is calculated from the straight-line method, applied annually under duodecimal attribution since the date the assets are ready for use and in the required conditions in terms of quality and technical, to operate according to intended by the entity, , considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. The estimated useful lives is determined taking into account the expected use of the asset by the entity, the natural wear expected, the subjection to technical obsolescence and salvage value attributable. Provided that the entity does not have a reliable estimate of the residual value of its assets it was considered null value for depreciation of tangible fixed assets purposes. Whenever there is evidence that a significant change occurred in the useful life or in the residual amount of an asset, its depreciation is

2012 Annual Report consolidated

reviewed on a prospective basis in order to reflect such new expectations. The average annual depreciation rates and the useful lives were considered as follows: Useful life Annual Rate (%) Buildings and other structures 5 to 100 1 to 20 Basic equipment 2 to 20 5 to 50 Transport equipment 2 to 8 12,5 to 50 Office equipment 3 to 16 6,25 to 33,33 Artistic patrimony 8 12,5 Other tangible fixed assets 3 to 10 10 to 33,33 The depreciation method and useful lives of the various assets are reviewed annually. The effect of any changes to these estimates will be recognized prospectively in the income statement. Repairs and maintenance expenses that do not increase the useful life of the assets and do not results in significant improvements in the elements of tangible fixed assets are recognized as an expense in the period in which they are incurred. The major repairs relating to the replacement of equipment are recorded in tangible fixed assets and depreciated at rates corresponding to the residual life of the respective assets. The gains or losses resulting from the write-off or sale of tangible fixed assets are determined by the difference between the amount received from the sale and the assets' carrying amount and are recognized in the income statement as "Other revenues and income" or "Other losses and expenses", respectively. 3.2.3. Intangible assets Intangible assets are accounted for at acquisition cost deducted from amortizations and any accumulated impairment losses. Intangible assets only are recognized if it is probable that they will produce future economic benefits to the entity and if they are controllable and can be reliably measured. Most intangible assets consist of software and are amortized in accordance with the straight-line method with duodecimal attribution since the date the assets are ready for use, considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. No residual value is considered. The average annual depreciation rates and the useful lives were considered as follows: Useful live Annual Rate (%) Granting rights 5 to 67 1,48 to 19,96 Software 3 33,33 Industrial property 3 to 48 2,08 to 33,33 Other intangible fixed assets 3 to 44 2,26 to 33,33 The gains or losses resulting from the write-off or sale of intangible fixed assets are determined by the difference between the sale price and the assets' carrying amount and are recognized in the income statement as "Other revenues and income" or "Other losses and expenses", respectively. The amortization cost of intangible assets with finite useful lives is recognised in the income statement under the heading "Depreciation and amortization net of reversals".

2012 Annual Report consolidated

Any resulting gain or loss from derecognition of an intangible asset (calculated as the difference between the sales value less the cost of the sale and the carrying amount) is included in income for the period in the year in which the asset is derecognised. There are some details below regarding the concession rights: Concession rights related to the concession activity For the goods (which arise in infrastructure usage rights â&#x20AC;&#x201C; IFRIC 12) with useful lives above the concession period, the amortization of initial investment or which may be subsequently adopted or imposed by the Grantor and that materialize in expansion or modernization of initial obligations, should normally be for a period of the concession. However, additional investments, modernization or expansion whose lifetime extends beyond the term of the concession, and that present residual value shall give rise to compensation equivalent to the amount not yet amortized at the date of the end of the concession. Depreciation is calculated by the sum of units, i.e. by depreciation of contractual investment in economic and financial feasibility study used, based on effluent flow rates charged during this period and the effluent to invoice until the end of the concession provided for in the feasibility study. 3.2.4. Investment properties Investment properties consist of properties whose purposes are to obtain rents and equity valorization and not for administrative purposes nor for sale in the course of the entity's current activity. Investment properties are measured at cost less any accumulated impairment losses. The costs incurred with investment properties in use, such as maintenance, repairs, insurance and property taxes are recognized in the income statement of the period to which they relate. The improvements in respect of which it is estimated that generate future additional economic benefits are capitalized under investment properties The average annual depreciation rates and the useful lives were considered as follows: Useful life Annual Rate (%) Buildings and other constructions 10 to 100 1 to 10 3.2.5. Goodwill The Goodwill corresponds to future economic benefits arising from assets which are not able to be individually identified and separately recognized. The Goodwill on Subsidiaries encompassed in the consolidation is reflected in their individualized heading in the balance sheet. The Goodwill on Subsidiaries not encompassed in the consolidation, the Associates and joint ventures is reflected in the value of the corresponding financial participation are presented in the balance sheet under the heading Financial investments â&#x20AC;&#x201C; the equity method or Financial investments â&#x20AC;&#x201C; other methods, as the case may be. In January 1, 2009 (date of transition to the NCRF) the company has adopted the exemption of the NCRF 3 - first-time adoption of the NCRF, concerning Business Combinations and adopted as deemed cost at that date, the value of Goodwill in its accounts prepared in accordance with the POC (acquisition cost less accumulated depreciation until December 31, 2008 and less any impairment loss recorded on that date),rather than calculating goodwill retrospectively to the date of the combination on the basis of information available at that date.

2012 Annual Report consolidated

Full implementation of this exemption to specific cases did not result from: Any adjustment to Goodwill arising: - From the recognition of intangible assets that were not recognized separately from Goodwill; - From the derecognition of intangible assets recognised separately from Goodwill incorrectly; - From the contingencies that might affect the price of the transaction and whose outcome could already be known at the date of transition. Any adjustment in shareholders equity due to: - The derecognition of assets and liabilities that wouldn't qualify for recognition in the balance sheet of the acquiree; - The derecognition of assets and liabilities that do not qualify for recognition under the NCRF In the subsequent acquisitions January 1, 2009, Goodwill is measured at cost, which is the excess of the cost of business combinations which it concerns over the Group's interest in the fair value of the assets, liabilities and contingent liabilities identifiable at the time of concentration. Where the acquirer's interest in the fair value of the assets, liabilities and contingent liabilities identifiable exceeds the cost of the business combination, the difference is immediately recognized in the results of the period after re-evaluation of the identification and measurement of assets, liabilities and contingent liabilities identifiable from the acquiree and the measurement of the cost of the concentration. When Goodwill is part of a cash-generating unit and part of an operation within that unit is disposed, the Goodwill associated with the alienated operation is included in the book value of the transaction to determine the gain or loss of operation. Goodwill derecognised under these circumstances is measured on the basis of relative values between the alienated operation and portion of the cash-generating unit maintained. Goodwill presented in the balance sheet is measured: -At the deemed cost less impairment, for business combinations that occurred before December 31, 2008; - At cost less impairment for Goodwill from business combinations occurring on or after January 1, 2009. Impairment Impairment of Goodwill is tested at least annually. If events or changes in circumstances indicate that it might be impaired according to the NCRF 12 â&#x20AC;&#x201D; impairment of assets, impairment of Goodwill is tested more frequently, i.e., whenever conditions so determine. Impairment losses of Goodwill cannot be reversed. 3.2.6. Financial investments a)

Financial investments - equity method Investments in subsidiaries and associates are valued according to the equity method, defining themselves as such entities over which the Group exercises control or significant influence, generally investments representing more than 20% of the capital of a company, and they are not Joint Ventures.

2012 Annual Report consolidated

For the determination of control or significant influence are taken into consideration the interests existing at the present date in accordance with potential voting rights. According to the equity method, the financial investments are recognized at their acquisition cost, adjusted by the amount corresponding to the company participation in the net results of associates and subsidiaries, against profit or loss for the period, and by the dividends received, net of accumulated impairment losses. Any excess of the acquisition cost over the value of the equity percentage held is considered "Goodwill", being added to the value of the financial asset and its recovery analyzed annually as part of the investment, and if the difference is negative ("Badwill"), after reassessment of the valuation process and if it remains in the income statement. Is performed an assessment of investments in subsidiaries and associated companies or other when there are indications that the asset may be impaired, and recognized a loss in the income statement whenever it is confirmed. When the proportion of the Company in accumulated losses of associated company or subsidiary exceeds the value of the investment is recognized, the investment is reported at nil value while the equity of the associated company is not positive, except when the entity has made commitments to the associated our subsidiary company, registering such cases a provision under the liability item 'Provisions' to meet these obligations. The unrealized gains on transactions with associated companies are eliminated in proportion to the interest of the company in the associated company against the investment in these companies. The unrealized losses are similarly disposed, but only to the extent that the loss does not evidence that the asset transferred is in impaired. At the date of acquisition of the investment, the difference between the cost of the investment and the group's share in the fair value of the assets, liabilities and contingent liabilities identifiable of the acquired company was accounted in accordance with the NCRF 14 â&#x20AC;&#x201D; business combinations. In this way: - The related Goodwill is included in the carrying amount of the investment. However, the amortisation of Goodwill is not permitted and is therefore not included in the determination of results resulting from reported; - The excess of the group's share in the fair value of the assets, liabilities and contingent liabilities identifiable from reported above the cost of the investment were excluded from the carrying amount of the investment and were included as income in the period in which the investment was acquired. - Was increased or decreased to recognize the part on the results of the investee after the date of the acquisition; - Was reduced by distributions of received results; - Was increased or decreased to reflect, by contrast, changes in the equity of the group in the reported interest in proportion resulting from these changes in equity that are not recognised in their results. In the measurement of these investments it was still respected the following provisions concerning the application of this method: - The financial statements of joint ventures were already prepared, or were adjusted extra

2012 Annual Report consolidated

accounting, in order to match the Group's accounting policies before they can be used in the determination of equity effects; - The financial statements of joint ventures used in determining the equity effects consist of the same date of the Group; - The results arising from transactions ' ascendants ' and ' descendants ' are recognised only insofar as they correspond to the interests of other investors in associated, not related to the investor. - When the value of the investment is reduced to zero, additional losses are taken into account by the recognition of a liability when the company incurs legal obligations or constructive. When later the joint ventures report profits, the Group invested resumes its recognition only after its share of the profits equals the share of losses not recognised. Impairment Impairment of these assets was determined on the basis of the criteria described in note 3.2.2 Tangible fixed assets. b)

Financial investments - other methods The company uses the cost model in relation to investments in other entities in which the equity or proportional consolidation methods are not mandatory and in which it is unable to reliably determine their fair value, namely investments in companies with securities out of a regulated market. According to the cost model investments are initially recognized at acquisition cost, which includes transaction costs, and subsequently its value is decreased by eventual impairment losses. The group uses the cost model for financial investments in: - Other entities in which are not mandatory the equity or proportional consolidation methods and in which it is unable to reliably determine their fair value, namely investments in companies with securities out of a regulated market. According to the cost model investments are initially recognized at acquisition cost, which includes transaction costs, and subsequently its value is decreased by eventual impairment losses. Impairment The company evaluated the impairment of these assets at the end of the year. Whenever there was an objective evidence of impairment, the company recognized an impairment loss in the income statement. Objective evidence of impairment took into account observable data that called the attention about the following loss events: - Significant financial difficulty of the issuer; - The disappearance of an active market for financial asset due to financial difficulties of the debtor; - Observable data indicating that there is a decrease in the measurement of the estimated future cash flows of a financial group assets since its initial recognition; - Significant changes with an adverse effect occurring in the technological environment, market, economic or legal under which the issuer operates. All equity instruments were individually assessed for impairment.

2012 Annual Report consolidated

The company uses the fair value model in financial investments in companies listed on a regulated market and whose fair value can be obtained and reliably determined 3.2.7. Inventories Goods, raw materials, subsidiary and consumable materials are valued at the lower of their average acquisition cost and net realizable value (estimated sales price net of costs to be incurred for their disposal), using the FIFO as cost formula. The finished and semi-finished products, by-products and products and work in progress are valued at production cost or net realizable value (if this is lower). The production costs include the cost of raw materials, direct labor and manufacturing overheads. If the net realizable value is lower, in particular due to the decrease in the market price, deterioration or obsolescence, rising of finishing or necessary costs to perform the sale, or of the recoverable value by using the conversion into finished products whose market price has been reduced, it is justified the recognition of impairments in the periods that the adjustment needs are found, using replacement cost as a reference. The reversal of impairment losses recognized in prior periods is recorded when there is evidence that impairment losses are no longer justified or decreased, being expressed in the income statement as "Impairment of inventory net of reversals". However, the reversal is only done up to the amount of the accumulated impairment losses. The expenses related to inventory sold are recorded in the same reporting period in which revenue is recognized. 3.2.8. Leases The classification as operating or financial leases depends on the respective contract's substance and not on its form. Lease contracts are classified as finance leases, if through tem are substantially transferred all the risks and rewards of ownership of the asset leased or otherwise as operating leases. Financial leases Tangible fixed assets acquired through financial lease contracts and their correspondent liabilities are recognized in accordance with the provisions of NCRF 9 - Leases. According to this method the cost of the asset is recorded as tangible fixed asset, the correspondent responsibility is accounted for as a liability and the financial charges included in the rent and the depreciations of the leased assets are recognized as expenses in the income statement in the period to which they relate. Operating leases In leases considered operational, the rents payable are recognized as expense in the income statement over the period of the lease and in accordance with the obligations inherent to these Tangible fixed assets acquired through financial lease contracts and their correspondent liabilities are accounted for in accordance with the financial method. According to this method the cost of the asset is recorded as tangible fixed asset, the correspondent responsibility is accounted for as a liability and the financial charges included in the rent and the depreciations of the leased assets are recognized as expenses in the income statement in the period to which they relate. 3.2.9. Contingent assets and liabilities Contingent assets are possible assets arising from past events and whose existence will only be

2012 Annual Report consolidated

confirmed if occurs, or not, one or more uncertain future events not wholly within the entity's control. If it is probable the existence of future economic benefits, the entity does not recognize this contingent asset in its financial statements but promotes its disclosure. Contingent liabilities are defined as: (i) possible obligations arising from past events and whose existence will only be confirmed if occurs, or not, one or more uncertain future events not wholly within the entity's control; or (ii) current obligations arising from past events that are not recognized because it is unlikely that resources flows affecting economic benefits are required to offset the obligation or because the amount of the obligation cannot be measured with enough reliability. Contingent liabilities are not recognized in the entity's financial statements but are disclosed unless the possibility of a funds outflow affecting future economic benefits is remote, in which case they are not even disclosed. 3.2.10. Provisions Provisions are recognized in accordance with the effectively required amounts to cover estimated losses, are revised at each balance sheet date and are adjusted to reflect the best estimate at that date. Provisions are recognized if and only if the entity has a present liability (legal or constructive) resulting from a past event and if it is probable that for the resolution of such obligation a resources outflow occurs and that the amount of the obligation can be reasonably estimated. Provisions for future operating losses are not recognized. 3.2.11. Employee benefits Short-term benefits The employees' short-term benefits include wages, salaries, Social Security contributions, food allowances, holidays and Christmas subsidies and any other retribution eventually decided by the Board of Directors. Obligations resulting from short-term benefits are accounted for as expenses in the period in which the employee has provided services on an undiscounted basis against a liability that is extinguished with the payment. According to applicable labor legislation, the right to vacation and holiday allowance for the period, for this match the calendar year expires on 31 December of each year, being paid only during the following period, the corresponding expenses are recognized as short-term benefits and treated in accordance with the mentioned above. The benefits resulting from the employment's cessation, either by unilateral decision of the entity, or by mutual agreement, are recognized as an expense in the period in which they occurred. Long-term benefits The long-term benefits include a health insurance that covers all employees. 3.2.12. Financial assets and liabilities The financial assets and liabilities are accounted for in accordance with the following criterions:

2012 Annual Report consolidated

Trade debtors and other receivables Trade debtors and other receivables balances are accounted for at their nominal value and disclosed in the balance sheet, deducted from any accumulated impairment losses, recognized under â&#x20AC;&#x153;Impairment on trade receivables net of reversalsâ&#x20AC;?, so as to reflect their net realizable value. These items when current do not include interest because they would be immaterial for the impact of discounting. At the end of each reporting period trade debtors balances are analyzed in order to assess whether there is any objective evidence that they are not recoverable. Impairment losses are recognized after events that indicate, objectively and in a quantifiable manner, that all or part of the balance will not be received. For this purpose, the entity takes into consideration market information that demonstrates that the trade debtor is in breach of its responsibilities, as well as historical information of overdue and not received balances. Objective evidence of impairment for a portfolio of receivables could include past experience of collecting payments, an increase in the number of delayed payments in, as well as changes in national or local economic conditions that correlate with default on receivables. The impairment loss is recognized as an expense in the income statement. Advances to trade creditors These balances are stated at their cost less impairment losses, whenever applicable. Trade creditors and other payables Debts to suppliers or other third parties are accounted for at nominal value as they do not bear interest and the effect of discounting is immaterial. Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration. Advances from customers The Advances from customers are stated at nominal value. Discounted bills The entity writes-off financial assets from its financial statements only when it substantially transfers all the risks and benefits inherent to the ownership of such assets to a third party. If the entity substantially retains the risks and benefits inherent to the ownership of those assets, it continues recognizing them in its financial statements as liabilities related to obtained loans correspondent to the monetary counter-entry for the transferred assets. State and others public entities The balance assets and liabilities under this heading are established on the basis of existing legislation. With regard to assets was not recognized any impairment by if it considers that this is not applicable given the specific nature of the relationship. Loans and other non-current payables Loans and other non-current payables are accounted for at cost as liabilities, net of transaction

2012 Annual Report consolidated

costs that are directly attributable to the issuance of these liabilities, being expressed in the balance in current or non-current liabilities depending on their maturity occurs within or more than one year, respectively. Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration. The interest and other costs incurred in financings are calculated according to the effective interest rate and recognized in the income statement for the period in accordance with the increase presupposition. Financial assets The company uses the fair value model in the valuation of shares held in companies listed on a regulated market, whose fair value can be obtained and determined viably. Cash and cash equivalents The cash and cash equivalents balance includes cash, bank deposits and other short-term investments that can be immediately mobilized without significant risk of value fluctuations. Financial liabilities and equity instruments Financial liabilities and equity instruments are classified according to the substance of the contractual transaction, regardless of their legal form. A financial instrument is classified as a financial liability when there is a contractual obligation to their settlement to be effected by delivering cash or another financial asset. Financial liabilities are initially recorded at cost, net of transaction costs incurred. An equity instrument is classified as such when there is not a contractual obligation to their settlement to be effected by delivering cash or another financial asset, evidences a residual interest in the assets of an entity after deducting all of its liabilities. Costs directly attributable to issue of equity instruments are recognized in equity as a deduction of issue. Amounts paid or received for purchases and sales of equity instruments are recognized in equity, net of transaction costs. Other financial liabilities This heading includes derivative financial instruments for which there is actual coverage under the NCRF 27. Are only considered financial instruments to hedge the effective portion of derivatives that are designated as such and that the entity expects that the changes in fair value or cash flows attributable to the hedged item, that risk is being covered, will compensate for virtually any changes in fair value or cash flows of the hedging instrument. Changes in the fair value of derivative instruments risk coverage of interest rate variability are recognized in equity in the rubric "Financial assets adjustments " in its effective component and in results, under the heading "Increase/decrease in fair value", in its actual not component. The values recorded under the heading "Financial assets adjustments" are transferred to results for the heading "Increase/decrease in fair value" in the period in which the hedged item has no effect on results.

2012 Annual Report consolidated

Hedge accounting is discontinued when the hedging instrument reaches maturity, when it is sold or exercised or when the relationship ceases to meet the coverage requirements on NCRF 27 Financial Instruments. The effective portion of the hedge derivative instruments are presented in the balance sheet under "Other financial assets" or "Other financial liabilities" depending on their nature is, respectively, a debtor or creditor and as non-current or current depending on the heading where as their instruments covered are presented in the balance sheet. 3.2.13. Equity items Financial assets adjustments This account includes the adjustments related to the application of the equity method, namely the ownership of changes in equity of the subsidiaries and unassigned profits. Minority interests Minority interests are part of the results and of the net assets of subsidiaries attributable to equity interests which are not owned, directly or indirectly through subsidiaries, by the shareholder company. This heading includes: - Capital; - Results for the period; - Other items of capital whose variations of the year, together with the results of the period, make up the full result. 3.2.14. Revenue Revenue comprehends income associated with sales and services rendered. Revenue is recognized on sales when the buyer takes the risks and benefits inherent to the ownership of the goods sold and as what concerns to services revenue is recognized in the income statement when such services are rendered, taking into consideration the proportion of services rendered in the period and the total services agreed. Revenue is not recognized when it is related to situations of uncertainty of acceptance or payment of those services. Whereas invoiced services are higher than the services rendered, the difference is recorded as income to be recognized and is accounted for in the income statement at the time such services are rendered and the correspondent expenses are incurred. 3.1.15. Construction contracts The entity recognizes the construction works' results contract per contract in accordance with the completion percentage method, which is understood to be as the relationship between the expenses incurred on each work at a determined date and the sum of those expenses with the expenses estimated to be incurred for its completion. The differences between the amounts resulting from the application of the completion percentage method with the estimated income and invoiced amounts are accounted for as non-invoiced production or advanced invoicing, which are included within as "Other receivables Receivables from accrued income " (Asset) or "Deferred - Income to recognize" (Liability). Changes in work from the amount of revenue settled in the correspondent contract are recognized in the period's results when it is probable that the customer accepts the revenue amount arising from the variation and that this can be reliably measured.

2012 Annual Report consolidated

Claims for costs reimbursement not included in the contract price are included in the contract's revenue when negotiations are at such an advanced stage that it is probable that the customer accepts the complaint and that it is possible to measure it reliably. When it is probable that the construction contract's total expenses exceed the income defined therein, the expected loss is immediately recognized in the period's income statement. 3.2.16. Subsidies and Government assistance Government subsidies are recognized at their fair value when there is sure to be received and that the entity will comply with the conditions of the grant. Operational subsidies are intended to cover expenses incurred and recorded, particularly with the development of vocational training actions, and they are recognized as income as the expenses are incurred, regardless of the time of receipt of the grant. The outright grants, to finance tangible and intangible assets are recognized in equity and recognized in the income statement in proportion to the respective depreciation and amortization of subsidized assets 3.2.17. Impairment of assets At each reporting date, and whenever are disclosed an event or changes in circumstances indicating that the asset's recorded amount may not be recoverable an impairment of assets evaluation is assessed. Whenever the amount by which the asset is recorded is higher than its recoverable amount, is recognized as an impairment loss recorded in the income statement as "'Impairment of investments depreciables/amortizables net of reversalsâ&#x20AC;? or as "Impairment on trade receivables net of reversals", if it respects the non-depreciable assets. The recoverable amount is the higher of the net selling price and value in use. The net selling price is the amount obtainable from the sale of the asset in a transaction between independent entities, less the costs directly attributable to the sale. The value in use is the present value of estimated future cash flows that are expected to arise from the continued use of the asset and from its sale at the end of its useful life. The recoverable amount is estimated for each asset individually or, if not possible, to the unit generating cash flows to which the asset belongs. After the recognition of an impairment loss, the expense related to the amortization/depreciation of the asset is adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if any) on a systematic basis over the useful life remaining. Whenever events or changes in circumstances indicate that the carrying amount of an asset is recorded can not be retrieved, it made a new assessment of impairment. Reversal of impairment losses recognized in previous years is registered when it is concluded that previously recognized impairment losses no longer exist or have decreased. A reversal of an impairment loss is recognized in the income statement under aforementioned. The reversal of the impairment loss is made up to the amount that would be recognized (net of amortization or depreciation) if the impairment loss had not been recorded in previous periods.

2012 Annual Report consolidated

3.2.18. Income tax The expense relating to period's income tax corresponds to the sum of current and deferred taxes. Current income tax is based on the entity's taxable profits in accordance with the enforceable tax regulations, whilst deferred taxes result from temporary differences between accounting and tax assets and liabilities. The taxable profit is different from the accounting result, provided that it excludes expenses and revenues that are taxable or deductible in other periods. The taxable profit also excludes expenses and revenues that will never be taxed or deducted. The Entity shall record deferred taxes related to temporary differences between the carrying amount of assets and liabilities and the corresponding tax base as provided in NCRF 25 - Deferred income taxes, whenever it is probable that future taxable profits will be generated against which the differences temporary and can be used based on the standard rate of corporation tax to the balance sheet date. Deferred taxes assets and liabilities are calculated and annually evaluated based under the tax rates in force or announced to be in force at the time of the expected reversal of temporary differences. The deferred tax assets are recognized only when there is a reasonable expectation of future taxable profits to be deducted from such assets, or in situations where there are taxable temporary differences to offset the deductible temporary differences in the period of its reversal. At each reporting date a review of those deferred tax assets is carried out and such are adjusted in accordance with the expectations concerning their future use. Current and deferred taxes are accounted for in the income statement except when are related to items directly recognized as equity. In these cases, the correspondent deferred taxes are also recognized as equity. Tax returns may be subject to review and possible corrections by the tax authorities for a period of four years (ten years for Social Security). So corrections may be made for the years 2009 and following, not being expected, however, that the possible course corrections will significantly affect the financial statements. The above time limit may be extended or suspended if they have been obtained tax benefits, which are ongoing inspections, claims or contestations, or if they have been tax losses, in which, over a period of six years after its occurrence, relatively to previous periods to 2012 and four years for subsequent periods, they are susceptible of deduction to taxable income that may be generated. The taxes are not paid, relating to the current period or the previous are recognized as a liability at the amount that is estimated to be paid based on the rates and tax laws applicable to the balance sheet date. However, if the amounts already paid in respect of such periods exceed the amounts due, are recognized as assets to the extent of the excess. Current tax is also conditioned by the adjustments, positive or negative, which are to be recognized in the period for current tax of previous periods. The tax effects of the transition adjustments resulting from the succession of accounting standards are regulated by article 5 of the Law-decree number 159/2009 of July 13, which provides that such adjustments contribute to the formation of profit taxable in a 5 year period, in equal parts, beginning in 2010 and ending in 2014. 3.3.

Other significant accounting policies Basis of consolidation The consolidated financial statements include, as at December 31, 2012 and 2011, the assets,

2012 Annual Report consolidated

liabilities and results of group companies, understood as a set of dst group and its subsidiaries, which are presented in note 6. As described in no. 6 of Law-Decree no. 158/July 13, 2009, approving the SNC, the entity presents the consolidated accounts of the group constituted by itself and by all subsidiaries on which: a)

Regardless of the ownership of capital, it is found that, in alternative: - Is able to exercise, or actually exercises, dominant influence or control; - Pursuing the management as if the two constitute a single entity;

Being holder of capital, when one of the following situations occurs: - Has a majority of the voting rights, unless it is demonstrated that such rights do not confer the respective control; - Has the right to appoint or remove a majority of the members of the management board of an entity with the power to govern the financial and operating policies of that entity; - Exercises a dominant influence over an entity, pursuant to a contract celebrated with this entity or from another clause of this social contract; - Holds at least 20% of the voting rights and the majority of the holders of the management board of an entity empowered to govern the financial and operating policies of that entity, reports during the financial year to which the consolidated financial statements, as well as, in the preceding financial year and up to the moment they are prepared, have been appointed solely as a result of the exercise of its voting rights; - Available, by itself or by virtue of an agreement with other holders of the capital of this entity, a majority of its voting rights of capital holders.

Subsidiaries are companies controlled by the dst group and are consolidated by the full consolidation method since the date of acquisition, which is the date on which the group gets control, and continue to be consolidated until the date that control ceases to exist. In the consolidation process, transactions, balances and unrealised profits on intragroup transactions and dividends between group companies are eliminated. Unrealised losses are also eliminated, unless the transaction reveals evidence of the existence of impairment in assets transferred and not alienated. The jointly controlled financial investments are included in the consolidation by the proportional consolidation method, from the date that joint control is acquired until the date on which it actually ends. Under this method, assets, liabilities, income and expenses of these businesses were incorporated in consolidated financial statements, line by line, in proportion to the assigned control of dst group. Associated companies are entities over which the investor has significant influence and which are not considered subsidiaries or joint ventures. The financial participations in associated companies are consolidated by the equity method, that is, the financial statements include the Group's interest in the total of income and expense recognized of the associate, from the date that significant influence begins until the date on which it actually ends. The dividends received from these companies are recorded as a reduction in the value of financial holdings. The shares, in relation to which the group does not carry significant influence over their activity, are recognized at the lower value between the purchase cost and the value of achievement.

2012 Annual Report consolidated

The amounts of equity of consolidated subsidiaries by integral method, attributable to the shares held by third parties unrelated to the companies included in the consolidation are included in the consolidated balance sheet under the heading of minority interests. Minority interests on the net income of consolidated subsidiaries are identified and adjusted against the results of the Group and included in the consolidated income statement under the heading of minority interests. 3.4.

Judgments and estimates (assumptions and uncertainties) The preparation of financial statements in conformity with NCRF standards requires the consideration of certain accounting estimates and assumptions that affect the reported assets and liabilities or revenues and expenses amounts. When necessary, all estimates and assumptions considered by the Board of Directors were made based under its best knowledge of events and transactions in progress at the date of the approval of the financial statements. Changes to these estimates, which occur after the date of the financial statements, will be recognized in the income statement prospectively. 3.5.

Main assumptions concerning the future The financial statements were prepared on a going concern basis from the books and accounting records of the entity 4.

Cash flow The cash flow statement is prepared in accordance with the direct method, disclosing receipts and cash payments by operating, investing and financing activities The cash and bank deposits present the following composition:: Description

2012

2011

Cash in hand

244.091,91

235.042,26

Cash at bank

11.518.363,52

9.547.147,79

Term deposits

8.780.419,75

3.592.270,13

Total cash in hand, at bank and term deposits

20.542.875,18

13.374.460,18

There are no amounts of cash and cash equivalents unavailable for use. 5.

Accounting policies, changes in accounting policies and errors During the period there were no changes in accounting policies and estimates or material errors related to prior periods 6. Related parties a) Group companies include in consolidation by the full consolidation method The companies included in consolidation in December 31, 2012 and 2011, their registered offices and proportion of capital held directly and indirectly are as follows: % Participation Companies

Headquarters

2012

2011

bysteel, s.a.

Braga

100%

Cari - Construtores, s.a.

GuimarĂŁes

100%

Domingos da Silva Teixeira - Empreitadas ElĂŠctricas, s.a.

Braga

100%

Domingos da Silva Teixeira - ImobiliĂĄria, s.a.

Braga

100%

2012 Annual Report consolidated % Participation Companies

Headquarters

2012

2011

Domingos da Silva Teixeira, s.a.

Braga

100%

dst wind, s.a.

Braga

100%

dst energias renováveis, sgps, s.a.

Braga

100%

dst hydro, s.a.

Braga

100%

dst solar, s.a.

Braga

100%

dst pedreiras - extracção de inertes, s.a.

Luanda, Angola

100%

dst Moçambique, s.a. Maputo, Moçambique

100%

dstelecom, s.a.

Braga

100%

dstelecom, Alentejo e Algarve, s.a

Braga

100%

dstelecom, Norte, s.a.

Braga

100%

EOL Minho - Energias renováveis, s.a.

Vieira do Minho

85%

Global Sun, s.a.

Braga

100%

PIP Solar, s.a.

Braga

100%

Fundo de Investimento e Imobiliário HomeInvest

Lisboa

100%

Innovation Point - Investigação e Desenvolvimento, s.a.

Braga

100%

Investhome - Construção e Imobiliária, s.a.

Braga

100%

Investhome - sgps, s.a.

Braga

100%

Ipplus, s.a.

Braga

100%

Monte Dourado - Hipermercados e Imobiliária., s.a.

Braga

100%

Perfil Dinâmico, lda.

Braga

100%

Despertavantagem, s.a.

Braga

100%

tagregados, s.a.

Braga

100%

tconcrete, s.a.

Braga

100%

tgeotecnia, s.a.

Braga

100%

tmodular, s.a.

Braga

100%

tstone, s.a.

braga

100%

* Liquidated in 2012

Associated companies The associated companies valued by the equity method, their registered offices and proportion of capital held directly, less than 50%, are as follows: % Participation Companies

Headquarters

2012

2011

Aquara - Produção, Comercialização e Distrib. de Água, lda.

Braga

33,33%

Barcelos Futuro, s.a.

Barcelos

25,50%

CAM - Centro de Atracções Mineiras, s.a.

Fundão

20,50%

Caminhaequi, s.a.

Caminha

25,50%

EOL Verde - Energia Eólica, s.a.

Esposende

25,00%

Geswater - Águas e Resíduos, s.a.

Braga

33,33%

Inovaguiar, s.a.

V. Pouca de Aguiar

25,50%

MinhoCom - Gestão de Infra. de Telecomunicações, EIM

Valença

48,49%

Parque Eólico Alto da Vaca, lda.

Porto

25,00%

Porto Digital, Operador Neutro de Telec., s.a.

Porto

49,00%

Steelgreen, s.a

Vila Verde

50,00%

ValiCom - Gestão de Infra. de Telecomunicações, EIM

Arcos de Valdevez

48,49%

VentoMinho - Energias Renováveis, s.a.**

Esposende

25,63%

Way2b, sgps, s.a.

Braga

20,00%

* Liquidated in 2012 ** Company is owned 15% with special voting rights and 10,63% with nominal voting rights

2012 Annual Report consolidated

Companies consolidated by proportional method: % Participation Companies

Headquarters

2012

2011

Criar Vantagens - Águas e Resíduos, lda.

Braga

33%

Steelgreen, s.a.

Braga

50%

Way2b, ACE

Braga

20%

Assoc / Soares da Costa, ACE

Braga

14%

n.d.

Assoc - Obras Públicas, ACE

Braga

14%

Teatro Circo, ACE

Braga

25%

Parque Emp. de Tavira, ACE

Tavira

50%

Viana do Castelo

33%

Unifacere, ACE

Braga

33%

Construtores Águas da Linha, ACE

Braga

13%

dst visabeira, ACE

Lisboa

50%

New Castle, EUA

51%

85,80%

63,36%

Agonia Parque Construção, ACE

SURE, Sustainable Renewable Energies, Corp. 2bpartner - sociedade de capital de risco, s.a.

Braga

d) Other indirectly subsidiaries, which percentage of participation is less than 20%, and the investment is registered by the cost method are as follows: % Participation Companies

Headquarters

2012

2011

Agere -Empr. de Águas, Efl. e Res. de Braga - EM

Braga

16,33%

Aquapor Serviços, s.a.

Lisboa

33,30%

Braval - Valorização e Trat. de Resíduos Sólidos, s.a.

Braga

12,90%

Conceito Original, s.a.

Braga

20,00%

EEVM - Empreend. Eólicos do Vale do Minho, s.a.

Anhões

12,50%

Empreendimentos Eólicos Cerveirenses, s.a.

Esposende

10,63%

Empreendimentos Eólicos da Espiga, s.a.

Esposende

12,50%

SP Renovado, s.a.

Lisboa

13,00%

10,00%

way2b North Africa, s.a.r.l.

Remuneration of the Corporate Bodies The Corporate Bodies' remuneration in the exercise of their duties during 2012 was as follows: 2012 Board of directors

1.626.975,88

Auditors

72.648,72 1.699.624,60

Tangible fixed assets Information relating to the carrying amounts of tangible fixed assets with reference to 2012 and 2011 periods may be analyzed as follows. Tangible fixed assets are recognized in accordance with the accounting policy described in Note 3. The net tangible fixed assets are in their entirety affects to the only activity of the entity and there are no assets held by third parties. In the period were not recorded any impairment losses, due to be convinced of the Administration that the recoverable amount of the asset exceeds its carrying amount.

2012 Annual Report consolidated

Land and other

Building and

Basic

Transport

Administrative

Artistic

resources

other structures

equipment

patrimony

1 Initial gross book value

1.354.256,85

17.698.061,25

38.818.136,44

12.589.491,22

6.225.928,04

7.500,00

2 Initial accumulated depreciations

2.844.113,49

28.212.865,29

10.039.578,37

4.867.539,83

4 Initial net carrying amount (4=1-2-3)

1.354.256,85

14.853.947,76

10.605.271,15

2.549.912,85

5 Movements of the period (5= 5.1-5.2+5.3+5.4)

158.700,00

(621.991,82)

(2.832.698,19)

5.1 Total additions

158.700,00

5.484,66

New acquisitions

158.700,00

Other acquisitions

Description

Others

TFA under construction

Total

1.486.212,87

17.993.257,93

96.172.844,60

2.031,25

946.426,87

46.912.555,10

1.358.388,21

5.468,75

539.786,00

17.993.257,93

49.260.289,50

(882.821,55)

(258.497,94)

(937,50)

(105.074,40)

28.890.257,82

24.346.936,43

742.358,03

181.095,44

204.620,64

23.931,09

28.985.017,76

30.301.207,61

5.484,66

628.091,87

158.870,44

201.058,51

23.931,09

28.985.017,76

30.161.154,33

114.266,16

22.225,00

3.562,13

140.053,29

5.2 Total disposals

615.673,48

2.531.966,54

1.063.916,99

461.568,58

937,50

170.727,49

50.026,95

4.894.817,52

Depreciations

600.725,16

2.252.365,69

1.044.220,97

462.715,24

937,50

170.727,49

4.531.692,04

Sales

277.623,19

32.490,34

348,67

25.026,97

335.489,17

Reductions

14.948,32

1.977,66

(12.794,32)

(1.495,33)

24.999,98

27.636,31

5.3 Reversals of impairment losses

5.4 Transferences of TFA under construction

(11.803,00)

3.800,00

(1.550,00)

18.472,00

(44.732,99)

(35.813,99)

5.5 Others transferences

(1.046.889,67)

23.250,00

(1.023.639,67)

6 Final net book value (6= 4+5)

1.512.956,85

14.231.955,94

7.772.572,97

1.667.091,31

1.099.890,27

4.531,25

434.711,60

46.883.515,75

73.607.225,93

Leases The information concerning leases as of December 31, 2012 and 2011 is as follows Financial Leases Description

Tangible fixed

Investment

assets

properties

Total

1 Initial gross book value

6.285.325,02

526.920,36

6.812.245,38

2 Accumulated amortizations / depreciations

3.464.748,25

16.666,67

3.481.414,92

4 Final net book value (4=1-2-3)

2.820.576,78

510.253,69

3.330.830,47

5 Total future minimum lease payments at:

2.228.149,19

992.187,77

3.220.336,96

5.1 Up to one year

1.276.244,73

174.841,07

1.451.085,80

5.2 From one to five years

951.904,45

817.346,70

1.769.251,15

Investment properties Information relating to the carrying amounts of investment properties with reference to 2012 and 2011 periods may be analyzed as follows: Cost model Total

Land and other

Buildings and

Investment properties

resources

other structures

under construction

1 Initial gross book value

15.618.359,19

53.673.436,17

2.097.715,85

71.389.511,21

2 Initial accumulated depreciations

2.758.287,42

4 Initial gross carrying amount (4=1 - 2 - 3)

15.618.359,19

50.915.148,75

2.097.715,85

68.631.223,79

5 Movements of the period (5=5.1 - 5.2 +5 .3 +... + 5.9)

4.785.981,27

5.1 Total additions

6.862.909,21

Acquisitions

6.862.909,21

5.2 Total disposals

2.076.927,94

Depreciations

2.076.927,94

6 Final net book value (6=4+5)

15.618.359,19

55.701.130,02

2.097.715,85

73.417.205,06

Description

10. Goodwill The consolidation differences ("Goodwill") are the result of positive differences between the acquisition cost of the shares and the proportion of their capital at the time of purchase.

2012 Annual Report consolidated

In December 31, 2012 and 2011 this item displays the following composition: Consolidation differences Companies

2012

2011

Investhome - Construção e Imobiliária, s.a.

12.897.316

Domingos da Silva Teixeira, s.a.

61.436.723

Domingos da Silva Teixeira - Imobiliária, s.a.

9.646.183

Cari - Contrutores, s.a.

556.382

VentoMinho - EnergiasRenováveis, s.a.

19.992.500

Criar Vantagens - Águas e Resíduos, lda. - consolidado

16.043.095

Total

120.572.199

The movement occurred in Goodwill in the period is indicated in the following table: Companies

Opening

Acquisitions

Other

balance

Impairment

Final

variations

balance

Investhome - Construção e Imobiliária, s.a.

12.897.316

Domingos da Silva Teixeira, s.a.

61.436.723

Domingos da Silva Teixeira - Imobiliária, s.a.

9.646.183

Cari - Construtores, s.a.

556.382

VentoMinho - Energias Renováveis, s.a.

19.992.500

Criar Vantagens - Águas e Resíduos, lda - consol.

16.043.095

Total

120.572.199

11.

Intangible assets Information related to the carrying amount of intangible assets with reference to 2012 and 2011 periods may be analyzed as follows: Description

Concession

Software

rights

Industrial

Others

property

Intangible assets

Total

under construction

With finite useful economic life: 4 Initial gross book value

43.770.422,55

1.181.420,74

203.822,00

596.786,38

946.877,81

46.699.329,48

5 Initial accumulated depreciations

13.742.581,91

957.308,18

83.453,65

234.804,22

15.018.147,97

7 Initial net carrying amount (7= 4-5-6)

30.027.840,63

224.112,56

120.368,35

361.982,16

946.877,81

31.681.181,51

8 Movements of the period (8=8.1-8.2+8.3+...+8.6)

(898.978,11)

(66.043,24)

(62.906,07)

125.536,21

(757.095,24)

(1.659.486,45)

8.1 Total additions

284.835,72

22.013,42

5.640,32

152.807,45

463.117,87

928.414,78

New acquisitions

284.835,72

22.013,42

5.640,32

152.807,45

463.117,87

928.414,78

8.2 Total disposals

2.401.776,94

88.056,66

47.546,39

37.382,56

2.574.762,55

Depreciations

2.357.242,98

88.056,66

47.546,39

32.988,57

2.525.834,60

Reductions

44.533,96

4.393,99

48.927,95

8.3 Reversals of impairment losses

8.4 Transferences of intangible assets under construction

1.217.963,11

2.250,00

10.111,32

(1.220.213,11)

10.111,32

8.6 Other transferences

(23.250,00)

9 Final net book value (9=7+8)

29.128.862,52

158.069,32

57.462,28

487.518,37

189.782,57

30.021.695,07

12.

Financial investments - equity method Variations in financial investments valued in accordance with the equity method are as follows.

2012 Annual Report consolidated

Description

Investments in

Equity method:

associated companies

Total

Initial gross book value

38.498.340,94

Initial net carrying amount

38.498.340,94

Movements of the period

815.636,45

Other acquisitions

2.368,32

Share os associates profits

6.368.426,08

Dividens received from associates

4.240.889,33

Changes of investeeâ&#x20AC;&#x2122;s equity not recognised in the income statement

(882.903,74)

Other movements of the period

(431.364,88)

Final net book value

39.313.977,39

The company has carried out impairment tests on goodwill, not identified any situation that could generate an impairment loss. 13.

Financial investments - other methods Variations in financial investments valued in accordance with other methods are as follows: Investments in others

Other financial

Companies

investments

Total

Initial gross book value

1.265.653,71

5.930.120,74

7.195.774,45

Initial net carrying amount

1.265.653,71

5.930.120,74

7.195.774,45

Movements of the period:

595.448,45

3.350.989,57

3.946.438,02

Other acquisitions

8.671,66

5.960.733,57

5.969.405,23

Sales

2.735.618,48

Other movements of the period

586.776,79

125.874,48

712.651,27

Final net book value

1.861.102,16

9.281.110,31

11.142.212,47

Description Other methodss:

14.

15.

Inventories As of December 31, 2012 and 2011, inventories' balance was as follows Description

2012

2011

Goods

24.251.302,15

24.628.011,04

Raw, subsidiary and consumable materials

4.479.336,17

4.113.598,83

Finished goods

1.038.523,72

394.608,08

Products and work in progress

4.039.292,15

4.074.930,27

Prepayments

1.487.751,90

1.610.751,90

35.296.206,08

34.821.900,12

Trade debtors As of December 31, 2012 and 2011, the balance of trade debtors was as follows: Description

2012

2011

Trade debtors - current accounts

98.505.174,88

109.697.534,89

Trade debtors - bills of exchange

1.182.343,54

2.041.243,93

Trade debtors - with guarantee

2.511.517,29

1.672.407,81

Trade debtors - doubtful accounts

19.574.912,22

18.003.828,13

121.773.947,92

131.415.014,76

(19.574.912,22)

(18.003.827,99)

102.199.035,71

113.411.186,77

Accumulated impairment losses

2012 Annual Report consolidated

Em 31 de dezembro de 2012, as dívidas de cobrança duvidosa apresentavam a seguinte composição: Description

2012

2011

Relating to insolvency and business recovery or enforcemente proceedings

1.561.572,58

1.330.401,01

Litigation claims

14.888.708,29

14.195.069,64

Delayed receivables

3.124.631,35

2.478.357,49

For more than six months and less than twelve months

807.807,25

958.896,47

For more than twelve months and less than eighteen months

292.244,76

126.760,92

For more than eighteen months and less than twenty-four months

132.765,80

979.065,68

For more than twenty-four months

1.891.813,54

413.634,42

19.574.912,22

18.003.828,13

As of December 31, 2012 and 2011, the balance of prepayments was as follows:

16.

Description

2012

2011

Trade debtors - current accounts

1.255.892,18

59.193,52

1.255.892,18

59.193,52

Other financial assets As of December 31, 2012 and 2011, the other financial assets balance was as follows: Description

2012

2011

40.974,83

39.486,14

40.974,83

39.486,14

Derivatives with effective coverage

Variable interest rate swaps

1.009.954,99

812.096,19

1.009.954,99

812.096,19

Current assets Financial instruments held for trading

Non-current liabilities

17.

Other receivables As of December 31, 2012 and 2011, the balance of other receivables was as follows: 2012

2011

Interests

1.898.670,56

1.622.569,14

Works in progress

3.249.360,24

704.047,16

Services

25.813,18

404.186,99

Water sales

367.772,97

445.805,22

Others

824.951,45

768.552,02

6.366.568,39

3.945.160,53

Other investment debtors

531.938,12

254.717,00

Other debtors

6.995.949,45

8.253.428,74

13.894.455,96

12.453.307,27

Deferred tax assets

369.034,67

368.787,90

Accumulated impairment losses

(254.717,00)

14.008.773,63

12.567.377,17

Description Debtors for income accruals

18.

Shareholders As of December 31, 2012 and 2011, the Shareholders' balance was as follows: Description

2012

2011

2.752.000,00

2.759.042,15

2.752.000,00

2.759.042,15

Liabilities

271.209,15

Others

271.209,15

Current assets Loans granted

Current

2012 Annual Report consolidated

19.

State and other entities As of December 31, 2012 and 2011, the State and other entities' balance were as follows: Description

2012

2011

Corporate tax

1.827.367,33

624.567,12

Value added tax

3.720.838,12

3.617.422,16

Others

373.301,06

300.729,64

5.921.506,51

4.542.718,93

Income tax withholding

935.927,35

903.394,91

Value added tax

887.997,41

55.999,28

Social security contributions

646.660,99

660.097,29

Others

274.943,26

220.148,39

2.745.529,00

1.839.639,87

Assets

Liabilities

20.

Deferrals As of December 31, 2012 and 2011, the balance of cost and income to recognize was as follows: Description

2012

2011

Future services already invoiced

226.528,24

28.636,63

Insurance

154.585,56

191.742,21

Rents

10.436,36

7.959,10

Interest payable

30.171,71

352.088,64

Bank charges

180.238,53

52.598,28

Other costs

262.920,41

460.284,86

864.880,81

1.093.309,72

Future services already invoiced

31.250,00

Construction contracts

40.884.050,09

20.336.416,81

Rents

1.561.581,20

Other income

179.122,65

1.657.126,63

42.656.003,94

21.993.543,44

Deferred costs

Deferred income

21.

Share Capital The entity's share capital remained unchanged in the period, consisting of 5,000,000 shares, registered and nominative, with a nominal value of five Euros. 22.

Provisions As of December 31, 2012 and 2011, the provisions' balance was as follows: Description

2012

2011

Provisions for investments replacement

907.294,43

880.725,79

Provisions for investment obligation

5.061.910,27

Sludges provisions

333.333,00

Taxes provisions

49.596,62

Current litigation

2.307.565,94

777.961,78

8.659.700,26

7.103.527,45

2012 Annual Report consolidated

23.

Loans obtained As of December 31, 2012 and 2011, the balance of loans obtained was as follows: 2012

2011

Long term loans

125.757.605,93

135.062.633,37

Financial leases

1.769.251,15

3.508.709,86

Commercial paper

16.950.000,00

27.000.000,00

Investment projects

2.524.073,63

147.000.930,71

165.571.343,23

Short-term loans

20.555.881,79

14.486.574,03

Revolving credit

24.679.242,06

15.509.817,28

Overdrafts

3.931.617,72

4.629.735,17

Financial leases

1.451.085,80

1.857.622,76

Investment projects

516.512,66

Others

174.924,16

56.590,94

51.309.264,18

36.540.340,17

Description Non-current liabilities

Current liabilities

24.

Trade creditors As of December 31, 2012 and 2011, the balance of trade creditors was as follow: Description

2012

2011

Trade creditors

58.401.658,93

64.347.873,83

Trade creditors - bills of exchange

8.578.125,04

9.100.973,66

Trade creditors - invoices in conference

2.519.799,61

2.162.299,64

Trade creditors - with guarantee

5.935.713,54

5.358.759,33

Others

316.192,02

74.169,59

75.751.489,14

81.044.076,05

As of December 31, 2012 and 2011, the balance of trade creditors' advanced payments was as follows.

25.

Description

2012

2011

Trade creditors

496.540,35

266.472,25

Trade creditors - other markets

25.655,63

4.043,52

Trade creditors - infra-community

26.093,17

531,70

Trade creditors - general directorate for energy geology

1.210.000,00

548.289,15

1.481.047,47

Other payables As of December 31, 2012 and 2011, the balance of other payables was as follows Description

2012

2011

Concession revenue

14.430.188,24

15.109.870,22

Investment projects

8.531.450,59

Other creditors

6.431.685,49

6.449.191,94

20.861.873,73

30.090.512,75

Staff costs

480.437,41

1.090.334,70

Investment trade creditors

1.681.863,99

1.593.304,48

Prepayments

592.013,46

619.838,29

Insurances

8.717,47

70.341,35

Staff costs

3.117.910,29

2.989.471,93

Non-current liabilities

Current liabilities

Creditors for costs acruals

(continua na pรกgina seguinte)

2012 Annual Report consolidated

26.

Interests

587.663,14

1.518.203,00

General and administrative expenses

906.856,95

949.514,90

Other costs accruals

993.540,00

571.787,49

5.614.687,85

6.099.318,67

Deferred tax liabilities

155.347,96

108.577,67

Factoring

10.375.113,65

23.808.005,81

Investments projects

1.074.299,64

Concession revenue

1.614.447,05

1.559.364,44

Loans obtained

4.199.132,05

5.366.519,19

Others

1.408.576,81

6.639.235,97

26.121.620,22

47.959.798,58

Deferred tax assets and liabilities As of December 31, 2012 and 2011, the balance of deferred tax assets and liabilities was as follows: Variation

01-01-2012

31-12-2012

Balance

Tax

Balance

Tax

Balance

Tax

Trade debtors impairments

2.002.049,89

529.229,80

(25.911,14)

(94.704,81)

1.976.138,75

434.524,99

Reportable tax losses

2.363.814,57

657.422,29

(1.662.489,89)

(402.679,04)

701.324,68

254.743,25

Cancellation of intangible assets

(931,21)

(246,77)

(931,21)

(246,77)

(1.862,42)

(493,54)

Written-off assets

685.970,37

181.761,61

37,67

(6,22)

686.008,04

181.755,40

Change of useful economic life

1.908,68

0,00

1.908,68

0,00

Provisions for other risks and charges

613.186,84

162.494,51

613.186,84

162.494,51

Shares fair value adjustement

10.669.852,20

1.120.614,55

(1.386.565,50)

(369.611,13)

9.283.286,70

751.003,42

Written-off integrated assets and assets acquisitions and their depreciation by Dc4

6.839.402,11

1.812.441,56

(2.663.423,74)

(705.807,29)

4.175.978,37

1.106.634,27

Concessions recognition

2.693.816,44

713.861,36

(897.937,47)

(237.953,43)

1.795.878,96

475.907,93

public goods obtained from conceding

2.662.016,31

705.434,32

(432.231,02)

(114.541,22)

2.229.785,29

590.893,10

Swapâ&#x20AC;&#x2122;s fair value recognition

713.643,32

189.115,48

197.858,91

52.432,61

911.502,23

241.548,09

Others

625.329,87

165.712,41

(150.355,81)

(39.844,29)

474.974,06

125.868,12

29.870.059,39

6.237.841,13

(7.021.949,21)

(1.912.961,58)

22.848.110,18

4.324.879,55

Deferred tax assets

Non-current

5.869.053,24

3.955.844,88

Current

368.787,90

369.034,67

Deferred tax liabilities NCRF 19 - construction contracts

1.943.030,60

514.903,12

(647.676,83)

(171.634,36)

1.295.353,77

343.268,76

Investment subsidy

9.333.225,92

2.473.304,87

35.433.050,41

8.808.795,65

44.766.276,33

11.282.100,51

Sharesâ&#x20AC;&#x2122; fair value adjustment

145.793,42

38.635,25

(18.959,61)

(5.024,30)

126.833,81

33.610,95

Effect os concession revenue by Dc4

1.306.964,17

346.345,50

(435.653,66)

(115.448,22)

871.310,51

230.897,28

Concessions recognition

842.235,65

223.192,45

(280.745,62)

(74.397,59)

561.490,03

148.794,86

Depreciated cost

68.759,65

(18.593,17)

(24.790,92)

(6.197,86)

43.968,73

12.395,44

Written-off revenue already delivered to the conceding

1.577.097,65

557.960,74

(532.614,57)

(141.142,86)

1.044.483,08

416.817,88

Others

(57.359,10)

(15.200,16)

(150.108,00)

(39.778,62)

(207.467,10)

(54.978,78)

15.159.747,95

4.120.548,60

33.342.501,20

8.255.171,96

48.502.249,15

12.412.906,90

Non-current

4.049.157,55

12.257.558,95

Current

108.577,39

155.347,96

2012 Annual Report consolidated

27.

Sales and services rendered As of December 31, 2012 and 2011, the balance of sales and services rendered was as follows: 2011

2012 Description

National

Foreign

market

299.168,05

1.270.603,05

1.833.549,67

2.459.786,98

440.401,49

70.831,24

511.232,73

13.265.376,63

3.556.257,54

16.821.634,17

16.865.846,66

4.980.003,04

21.845.849,70

179.041.245,91

3.356,74

179.044.602,65

168.542.661,26

199.885,00

168.742.546,26

193.232.027,90

5.393.163,95

198.625.191,85

187.119.512,47

5.250.719,28

192.370.231,75

National

Foreign

market

Real estate sales

299.168,05

Goods sales

626.237,31

Products sales Services

Total

28.

Government Subsidies and Government supports The dst group was granted a subsidy from the Human Potential Operational Programme (â&#x20AC;&#x153;POPHâ&#x20AC;?), an organization at the guardianship of the Labour and Social Solidarity Ministry which is co-financed by the European Social Fund and by the Social Security Budget - National Public Contribution, in the amount of 132,836.94 Euros. The total amount of the subsidy is accounted for in the operational subsidies' balance.

29.

Description

2012

2011

State and other public entities subsidies - POPH

132.836,94

30.164,53

132.836,94

30.164,53

Gains and losses attributable to subsidiaries, associated and joint ventures As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Losses and expenses

(413.706,39)

(411.843,44)

Revenues and income

6.573.358,04

4.705.222,03

6.159.651,65

4.293.378,59

30.

Changes in production stocks and work in progress As of December 31, 2012, the balance of changes in production stocks and work in progress was as follows Finished

Products and work

goods

in progress

1 Closing stocks

1.038.523,72

4.039.292,15

5.077.815,87

2 Stocks reclassification and regularization

184.306,68

3 Opening stock

394.608,08

4.074.930,27

4.469.538,35

4 Changes in stocks (4=1+2-3)

643.915,64

148.668,56

792.584,20

Description

Total

As of December 31, 2011, the balance of changes in production stocks and work in progress was as follows: Description

31.

Finished

Products and work

goods

in progress

1 Closing stocks

394.608,08

4.074.930,27

4.469.538,35

2 Stocks reclassification and regularization

(726.172,30)

3 Opening stock

181.993,36

4.580.191,85

4.762.185,21

4 Changes in stocks (4=1+2-3)

212.614,72

(1.231.433,88)

(1.018.819,17)

Own work As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Tangible fixed

2.960,00

62.182,46

2.960,00

62.182,46

Total

2012 Annual Report consolidated

32.

Cost of goods sold The movements occurred in the cost of goods sold balance in 2012 was as follows: Description

Goods

Total

Raw, subsidiary and consumable materials

1 Opening stocks

24.618.917,04

4.122.692,83

28.741.609,87

2 Purchases

798,23

55.423.125,93

55.423.924,17

3 Stocks reclassification and regularization

4 Closing stocks

24.244.491,49

4.486.146,84

28.730.638,32

5 Cost of goods sold (5= 1+2+3-4)

375.223,79

55.059.671,93

55.434.895,72

The movements occurred in the cost of goods sold balance in 2011 was as follows: Description

Goods

Total

Raw, subsidiary and consumable materials

33.

1 Opening stocks

24.381.268,90

3.726.453,55

28.107.722,45

2 Purchases

689.933,65

48.847.820,22

49.537.753,87

3 Stocks reclassification and regularization

4 Closing stocks

24.618.917,04

4.122.692,83

28.741.609,87

5 Cost of goods sold (5= 1+2+3-4)

452.285,51

48.451.580,94

48.903.866,45

General and administrative expenses As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Subcontracts

63.176.552,07

58.122.354,62

Electricity

2.169.874,26

2.127.170,99

Fuels

4.128.171,30

4.831.408,61

Water and other fluids

541.689,81

662.208,64

Tools

405.466,07

326.110,68

Office stationeries

81.957,46

131.902,71

Rents and rentals

6.575.956,51

6.618.644,93

Representation expenses

65.903,10

37.496,04

Communication

528.953,53

515.338,64

Insurance

988.477,76

971.636,12

Transport of goods

3.135.718,04

419.940,38

Travel and accomodation

1.819.005,48

941.838,83

Comissions

5.392,66

5.721,99

Fees

167.269,23

107.550,11

Legal expenses

336.901,99

171.318,81

Maintenance repairs

3.026.411,26

2.975.387,66

Advertising and promotion

181.284,11

221.201,90

Cleaning and hygiene

107.638,02

115.334,25

Security

535.156,76

490.187,28

Specialised labour

3.856.815,28

3.075.200,96

Others

2.275.506,37

1.367.864,00

94.110.101,05

84.235.818,13

34. Employees benefits, number of employees and staff costs 34.1. Number of employees Companies

2012

2011

dst, sgps, s.a.

Investhome - Construção e Imobiliária, s.a.

Domingos da Silva Teixeira, s.a.

494

502

Domingos da Silva Teixeira - Imobiliária, s.a.

2012 Annual Report consolidated

Companies

2012

2011

Domingos da Silva Teixeira - Empreitadas Eléctricas, s.a.

101

Investhome, sgps, s.a.

bysteel, s.a.

151

164

tmodular, s.a.

tstone, s.a.

tgeotecnia, s.a.

tconcrete, s.a.

tagregados, s.a.

Cari - Construtores, s.a.

steelgreen, s.a.

Fundo de Investimento e Imobiliário HomeInvest

Monte Dourado - Hipermercados e Imobiliária, s.a.

dst, s.a. - sucursal Espanha

IPPLUS, s.a.

Perfil Dinâmico, lda.

dst Energias Renováveis, sgps, s.a.

dst wind, s.a.

Global Sun, s.a.

dst solar, s.a.

EOL Minho - Energias renováveis, s.a.

PIP solar, s.a.

dst hydro, s.a.

dstelecom, s.a.

Innovation Point - Investigação e Desenvolvimento, s.a.

2bpartner, SCR, s.a.

dstelecom norte, lda.

dstelecom alentejo e algarve, lda.

Criar Vantagens - Águas e Resíduos

606

542

way2b, ACE

dstpedreiras - extracção de inertes, s.a.

dst Moçambique, s.a.

Total

1.523

1.483

34.2. Staff costs As of December 31, 2012 and 2011, this balance was as follows:

35.

Description

2012

2011

Board of directors remmunerations

1.626.975,88

1.849.116,27

Salaries

18.647.961,52

18.143.496,34

Compensations

138.847,82

113.089,61

Social charges

3.651.212,82

3.578.155,22

Working and professional illness insurance

503.830,72

574.925,19

Social action costs

306.919,30

195.834,32

Other staff costs

275.504,90

318.176,50

25.151.252,95

24.772.793,43

Impairment losses in receivable accounts As of December 31, 2012 and 2011, this balance was as follows:

2012 Annual Report consolidated

2012

36.

2011

Impairment

Reversals of

Description

losses

impairment losses

Trade debtors

(3.910.902,17)

2.090.447,28

(3.910.902,17)

2.090.447,28

Total

Impairment

Reversals of

losses

impairment losses

(1.820.454,89)

(8.811.821,89)

679.937,45

(8.131.884,44)

(1.820.454,89)

(8.811.821,89)

679.937,45

(8.131.884,44)

Total

Provisions As of December 31, 2012 and 2011, this balance was as follows: 2012

2011

Description Reinforcement

Reversal

Final balance

Reinforcement

Reversal

Final balance

Currente litigation

10.036,25

Provisions for investments replacement

46.779,29

(38.543,63)

106.358,89

67.815,27

Other provisions

(9.163,03)

8.473,65

(689,38)

(9.163,03)

55.252,94

46.089,91

(38.543,63)

116.395,15

77.851,52

37.

Increase/decrease in fair value As of December 31, 2012 and 2011, this balance was as follows: 2011

2012 Description

Reductions

Increases

Total

Reductions

Increases

Total

Financial investments

(722.828,94)

930.825,28

207.996,34

(3.269.877,26)

260.343,22

(3.009.534,04)

(722.828,94)

930.825,28

207.996,34

(3.269.877,26)

260.343,22

(3.009.534,04)

38.

39.

Other revenues and income As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Other operating income

6.221.598,71

3.024.200,00

Financial investments

3.642,50

291.666,66

Sale of non-financial investments

1.326.308,67

1.195.625,37

Exchange gains

944.942,78

544.639,20

Cash discounts

239.023,88

211.935,99

Prior years adjustments

138.184,91

147.174,92

Overestimated tax provision

27.343,00

97.029,68

Other subsidies

3.255,33

5.497,66

Investment subsidies

900.556,24

192.796,67

Tax refunds

2,31

4.049,45

Contractual penalities

363.393,48

560.201,31

Insurance claims

19.604,95

5.147,59

Compensations received from employees

1.490,67

2.576,72

Gains in stock

12.222,32

4.680,66

Other extyraordinary income

614.078,73

195.592,30

10.815.648,47

6.482.814,16

Other losses and expenses As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Taxes and charges

820.535,80

563.630,94

Cash deiscounts

13.205,46

9.681,36

Bad debts

79.629,62

86.091,34

Financial investments

59.616,52

Sale of non-financial investments

589.070,23

130.861,54

Prior years adjustments

707.706,59

265.702,76

2012 Annual Report consolidated

40.

Donations

68.815,21

191.251,93

Contributions

28.905,63

33.837,40

Underestimated tax provision

45.100,26

37.303,87

Losses in financial instruments

1.922,00

Exchange losses

580.510,97

377.857,26

Bank guarantees costs

1.163.455,04

43.912,16

Bill of exchange costs

4.220,15

6.181,06

Factoring costs

160.201,06

273.917,90

Confirming costs

20.543,05

43.912,16

Self-confirming costs

4.989,38

9.602,42

Fines and penalties

67.730,56

479.444,65

Damages on third parties

31.300,08

6.964,04

Compensations

8.361,99

5.442,66

Losses in stocks

1.905,00

2.361,33

Banking sefvices

1.190.071,13

739.053,43

Other losses and expenses

78.049,82

657.305,43

5.664.307,02

4.025.854,14

Costs and reversals of depreciations and amortization As of December 31, 2012 and 2011, this balance was as follows: 2012 Description

2011

Depreciation and Reversals of depreciation amortization costs

Total

and amortiozation

Depreciation and Reversals of depreciation amortization costs

and amortiozation

Total

Tangible fixed assets

(4.531.692,04)

(5.539.090,07)

Investment properties

(2.076.927,94)

-(2.076.927,94)

(1.999.427,94)

Intangible assets

(2.525.834,60)

-(2.525.834,60)

(2.502.534,32)

(9.134.454,58)

-(9.134.454,58)

(10.041.052,34)

41.

42.

(10.041.052,34)

Interest and other similar revenues As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Contractual interests and interests for delayed

2.131.414,78

2.880.156,84

Currente loans interest

224.745,48

239.528,93

Bank deposits interest

378.988,34

123.765,94

Other short-term investments interest

144.369,11

8.648,79

Swaps interest

324.831,98

Bonds interest

262.463,89

500.421,14

Other financial income

88.959,99

334.900,91

3.230.941,59

4.412.254,53

Interest and other similar expenses As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Bank loans interest

9.644.144,73

10.387.717,14

Factoring interest

1.015.965,75

1.310.522,28

Lease interest

112.460,96

155.797,99

Confirming interest

24.780,44

23.435,32

Self-confirming interest

38.099,17

39.738,75

Penalty interests and interests

123.763,47

72.693,79

Other loans interest

98.759,94

945,04

Bill of exchage interest

60.402,81

71.726,10

Other interest

3.439.410,18

2.721.012,27

2012 Annual Report consolidated

Other financial costs

43.

Banking services

86.082,58

59.904,94

Guarantees commissions

193.398,14

81.969,25

Others

153.297,51

267.899,73

14.990.565,68

15.193.362,60

Income tax The current tax expense (income) is indicated in the following table: 2012

2011

Corporation tax

2.283.687,45

2.804.737,68

Deferred taxes

673.480,57

(365.917,42)

2.957.168,02

2.438.820,27

Description Tax

44.

Commitments related to obtained guarantees In December 31, 2012, the group responsibilities provided to third parties was as follows: Bank

National Euros

International USD

International AKZ

BCI/CGD

150.000

BAI ANGOLA

10.000.000

SANTANDER

11.330.803

997.500

BCP

5.860.178

BPI

10.371.739

BBVA

2.904.359

BARCLAYS

1.256.794

BES

17.156.972

CGD

5.993.487

2.065.978

BPN

2.576.756

BANIF

682.079

BANCO POPULAR

669.367

BANCO BIC

2.759.487

987.675

Grantors entities

11.220.155

Others

3.807.269

Total

76.739.442

4.051.153

10.000.000

45.

Events After the Balance Sheet Date After the close of the period, and up to this report, there were no material facts warranting disclosures or changes to the Financial Statements for the period, for the purposes of subparagraph b) of number 5 of Article 66 of the Code of Commercial Companies. 46.

Disclosures Required by Law The Board of Directors reports that the entity has no debts to the State in arrears in accordance with Law-decree number 534/80 of November 7. Pursuant to the requirements of the Law-decree number 411/91 the Administration informs that the company has its Social Security contributory situation regularized

2012 Annual Report consolidated

47.

Braga, April 15, 2013 The Board of Directors,

The Chartered Accountant,

José Gonçalves Teixeira; Chairman Susana Maria Macedo Queirós Avelino Gonçalves Teixeira; Vice- Chairman Joaquim Gonçalves Teixeira; Member of the Board of Directors Hernâni José Gonçalves Teixeira; Member of the Board of Directors Teresa Gonçalves Gomes; Member of the Board of Directors

2012 Annual Report consolidated

Legal Certification of Consolidated Accounts

82 Report and Opinion of the Sole Fiscal Auditor

2012 Annual Report consolidated

Anex to the Board of Directors Report

In compliance with the terms and for the effects of the number 5 of article 447th and number 4 of article 448th of the Trading Companies Code (“CSC – Código das Sociedades Comerciais”), approved by Law-decree number 262/86 of September 2, hereby is presented the list of shares regulated by such diplomas: 1. The members of the Board of Directors covered by paragraph 5 of article 447th of CSC were holders on December 31, 2011 of the following shares: José Gonçalves Teixeira held: 1.150.000 shares with a nominal value of five Euros each; Joaquim Gonçalves Teixeira held: 1.150.000 shares with a nominal value of five Euros each; Avelino Gonçalves Teixeira held: 1.150.000 shares with a nominal value of five Euros each; Hernâni José Gonçalves Teixeira held: 1.150.000 shares with a nominal value of five Euros each. 2. The following shareholders covered by paragraph 4 of article 448th of the CSC, were the holders, at the close of financial year, at least one-tenth of the capital: José Gonçalves Teixeira, with 23,00% of the capital; Joaquim Gonçalves Teixeira, with 23,00% of the capital; Avelino Gonçalves Teixeira, with 23,00% of the capital; Hernâni José Gonçalves Teixeira, with 23,00% of the capital.

Braga, April 15, 2013 The Board of Directors, José Gonçalves Teixeira Avelino Gonçalves Teixeira Joaquim Gonçalves Teixeira Hernâni José Gonçalves Teixeira Teresa Gonçalves Gomes

2012 Annual Report consolidated

Portfolio main works of 2012

Sistema elevatório de Pedrogão - Beja

GNRation - Braga

Hotel Carris Porto

Parque Eólico da Falperra - Rechãnzinha Vila Pouca de Aguiar

Parque Eólico de Malhanito Tavira

ETAR Cávado-Homem

Vila Verde

2012 Annual Report consolidated

Annual Report 2012

Portfolio main works of 2012

ESAG

ETAR de Rio Tinto

Braga

Gondomar

Decathlon - Setúbal

ETAR do Sistema de Ruães

Braga

Unidade Produtiva da Converde - Cantanhede

Continente - Évora er - Évora

Parque Aeronaútico da Embra

Annual Report 2012

Annual report

domingos da silva teixeira, s.a. december 31 , 2012

Annual Report 2012

Index

Page Management Report

Macroeconomics framework

Business activity

Material events occurring after the end of the period

Future perspectives

Own shares

Authorization for transactions between the company and is directors

Branches of the company

Proposed results application

Financial risk management objectives and policies

Information required by legislation

Final note

Individual Financial Information

Individual balance sheet

Individual income statement

Individual statement of equity changes in 2011

Individual statement of equity changes in 2012

Individual cash flows statement

Annex

Legal Certification of Accounts

Report and Opinion of the Sole Fiscal Auditor

Corporate Bodies

Annex to the Board of Directors Report

Annual Report 2012

Management Report

Macroeconomics Framework International Macroeconomics framework

2011

2012(e)

USA

2,4

1,8

2,5

EUROPEAN UNION

2,1

1,5

-0,4

EURO AREA

2,0

1,4

-0,6

JAPAN

4,7

-0,6

0,5

Macroeconomic indicators GDP:

Source: GPEARI Finance Percentage variation (e) - estimated

Annual Report 2012

In 2012, the IMF estimates a GDP contraction of 0.6% in the euro area. In the case of the two largest trading partners of the Portuguese economy, it is estimated a contraction in GDP of 1.5% in Spain and a significant slowdown in Germany, from 3.1% in 2011 to 0.9% in 2012. In the remaining area economies, the activity shall contract in the United Kingdom, in Portugal, in Italy and in the Netherlands and remain stagnant in France. After significant growth in prices of raw materials in 2010 and 2011, in 2012 there should be a downturn in prices. Given the slowdown in demand from advanced and emerging economies, prices of most non-energy raw materials decreased in the year 2012. This trend was mitigated by an upward trajectory of international prices of cereals. With regard to international oil prices, developments in 2012 diverged from the trend of falling international prices of other raw materials. Oil prices exhibited some volatility throughout the year, reaching, on average, worth 109USD/bbl (83 € / bbl), a result of a reduction in expected demand for oil and an increase in supply from countries non-OPEC. In this context, and given the lower rate of utilization of productive factors in advanced economies, the IMF forecasts point to a reduction in the average annual increase in consumer prices in advanced economies, from 2.7% in 2011 to 1.9% in 2012. In emerging market economies and developing countries, inflation is expected to remain high in 2012, despite a reduction of 1.1 percentage points compared to 2011 (6.1% in 2012). In line with the contraction in activity, market conditions in the euro area worsened considerably, predicting a significant increase in unemployment, particularly in economies undergoing adjustment. According to the EC, the unemployment rate rose to 10.7% in the EU and 11.7% in the euro area. Macroeconomic indicators

2010

2011

2012(e)

USA

1,6

3,2

1,8

EUROPEAN UNION – 27

2,1

3,1

2,4

EURO AREA

1,6

2,7

2,2

JAPAN

-0,7

-0,3

-0,4

USA

9,6

9,0

7,7

EUROPEAN UNION – 27

9,6

9,7

10,7

EURO AREA

10,1

10,2

11,7

JAPAN

5,1

4,6

4,2

USA

5,4

4,1

2,5

EUROPEAN UNION – 27

6,7

3,2

-3,2

EURO AREA

7,3

3,4

-3,9

JAPAN

16,6

-2,3

-6,8

Inflation:

Unemployment rate:

Industrial production index:

The international financial markets were characterized by high volatility resulting from considerable fluctuations in risk aversion arising that stems from the sovereign debt crisis in the euro area and the uncertainty regarding the ability of authorities' response. In this context, the ECB sought to intensify and accelerate the process of European integration, announcing the creation of a European banking union, in order to safeguard the uniqueness of monetary policy and preserve the euro. The financial markets reacted favorably to this announcement, attending to a reduction in yields of government debt in countries under pressure. Within a framework of relaxation and contraction of economic activity, monetary policy has become more expansionary on global scale, watching to a reduction of interest rates by central banks.

Source: IMFI/ European Commission/ Eurostat/ GPEARI Finance Percentage variation (e) - estimated

Annual Report 2012

The short-term interest rates decreased significantly in the euro area and the U.S., as well as the long-term interest rates. Despite the fragility of the economic situation of the euro area, have seen in the end of 2012, a decrease of uncertainty and financial risks associated with sovereign debt, due to progress in European banking union, the restructuring of the Spanish banking sector and the agreement reached with the IMF on Greek debt. In late December 2012, the interest rate Euribor 3, 6 and 12 months stood at 0.187%, 0.320% and 0.542%, respectively. Reference interest rates

2010

2011

2012

Eurozone

1,00

0,75

USA

0,25

Japan

0,30

0,10

United Kingdom

0,50

Monetary market interest rates

2010

2011

2012

Eonia

0,44

0,46

0,08

Euribor 1 month

0,57

1,18

0,11

Euribor 3 months

0,81

1,39

0,19

Euribor 6 months

1,08

1,64

0,36

Euribor 12 months

1,35

2,01

0,59

0,34

0,35

0,31

Source: Ministry of Finance / Bank of Portugal Percentage at the end of the period

Eurozone

USA Libor 3 months Japan Libor 3 months

0,23

0,22

0,19

Source: Ministry of Finance / Bank of Portugal Percentage, annual average

2010

2011

2012

EUR/USD

1,336

1,318

1,319

EUR/JPY

108,65

102,55

113,61

EUR/GBP

0,861

0,844

0,816

EUR/CHF

1,250

1,228

1,207

Source: Ministry of Finance / Bank of Portugal Foreign currencies parity at the end of the period

In addition, there was an appreciation of the main stock market index in the U.S. and a devaluation of the main stock market indices in the euro zone and Japan. Stock markets

2010

2011

2012

Dow Jones EURO STOXX

13,4

-3,4

-6,5

Nikkei 225

7,3

-5,7

-3,5

Standard & Poors 500

20,3

11,4

8,7

Source: Ministry of Finance / Bank of Portugal Percentage variation

2010

2011

2012(e)

Brent Oil USD/Barrel (1)

80,22

110,82

109,2

Agricultural goods (2)

33,8

22,7

-12,6

Metals (2)

48,2

13,5

-16,8

Source: Ministry of Finance / Bank of Portugal (1) Barrel average price/USD / (2) Percentage variation (e) - estimated

Annual Report 2012

Nacional Macroeconomics Framework

2011

2012(e)

- Private Consumption

2,5

-3,8

-5,8

- Public Consumption

0,1

-4,3

-3,9

- GFCF

-3,1

-10,7

-14,9

- Exports

10,2

7,2

6,3

- Imports

8,0

-5,9

-4,7

- GDP at market prices

1,4

-1,7

-3,0

Inflation

1,4

3,5

2,8

â&#x20AC;&#x201C; Industrial Production Index

2,0

-0,9

-3,0

â&#x20AC;&#x201C; Industrial Turnover Index

9,3

5,7

-5,3

PSI 20 Index

-10,34

-27,6

2,9

Unemployment rate

10,8

12,7

15,7

Macroeconomics indicators Expenditure and GDP

Source: Ministry of Finance / Bank of Portugal Percentage variation, excepting unemployment rate (e)- estimated

Annual Report 2012

adjustment program. The promotion of economic growth based on the dynamics of exports, led by the private sector and benefiting from the catalytic role of the public sector may constitute an important factor aggregator.

The Construction Sector

The construction sector in Portugal suffered, during the year of 2012, a significant decline in its activity, influenced by a deeply unfavorable economic environment. The most indicators point to a contraction in the volume of production in the sector, the construction's gross value added (GVA) declined 18.0% compared with the same period of 2011 and investment under construction revealed a fall of 16.1%. In the 4th quarter of 2012 notes a decrease of 32.6% in the level of industry activity, 25.7% in confidence index, 25.6% employment and 44.4% in the portfolio of orders. The sharp fall in all indicators of the construction sector clearly shows the deep crisis that the sector goes through in Portugal, which becomes even more evident when compared with the situation of the European Union. In 2012, there has been a reduction of 7.1% in confidence indicator in the EU average and a 10.3% reduction in the order books. Both the public and the private demand addressed to the construction sector remain in sharp decline, reducing the level of continuous production to historic lows. The number of companies and businessmen enabled with construction permit was reduced to 56,499, representing a fall of 8.2% compared with the previous year. The housing market has been the most penalized by the current economic climate, as testified by the data provided by the Bank of Portugal, which reveal a decline of 50.2% in the new loans for house purchase. This is a consequence of the impact of fiscal consolidation measures in the family income and of the restrictions imposed on access to finance for house purchase. These factors, combined with the growing economic difficulties resulting from the rising of unemployment and the serious crisis of confidence that has installed a general level, has led to a drastic reduction in demand for housing. Confirming the contraction in the construction segment of residential buildings, the licensing of new dwellings notes a fall of 34.7%. The housing segment was again the one that registered the largest drop in production, which should have been like the 17.8%. Highlights also include a reduction in 8.8% of jobs in the rehabilitation and demolition sector, single thread with the potential to boost the sector. In 2012, the breakdown in production was also quite strong in segments of non-residential construction and civil engineering works. The licensing of non-residential buildings registered a decrease of 23.5% in total area licensed. In the public works segment there is a strong reduction in investment, with the number of contests promoted by the Central Government to contract to 43.9% in 2012 compared with 2011. Judging by the values of the public tenders in the first 10 months of 2012, it was found a reduction of 657 million Euros in the value of sponsored contests and 534 million Euros in the contracts awarded. For the unfavorable development of the activity in this segment, and according to the entrepreneurs operating in this market, contribute not only the reducing of public investment, but also the worsening of some financial aspects, namely, the high financial costs, the high tax burden and delays in payments from the State. The employment provided by the construction sector recorded on the 4th quarter of 2012 a reduction of 25.6% over the same quarter of the previous year, which resulted in a decrease of 85 thousand jobs. The decrease in employment in the construction sector has already reached about 311 thousand jobs, a figure which fell for the 6th consecutive quarter.

Annual Report 2012

According to EC sources, plus the difference in qualitative indicators of construction sector activity between Portugal and the average of European Union countries. The confidence indicator of European entrepreneurs operating in the construction sector presents a decrease of 7.1%, while in Portugal this reduction is 25.7%. Regarding the evolution of the booking order, which for Portuguese companies is more unfavorable (-44.4%) and longstanding, compared to that found in the EU (10.3%), falling just 5 months, worsening the gap between Portugal and the other Member States of the European Union in this matter. Sector indicators

2010

2011

2012(e)

Concrete sales

-7,0

-15,6

-26,1

Steel sales

-23,0

-19,1

-25,3

Building licenses

-9,6

-10,5

-16,2

- Buildings - Total

-12,3

-2,8

-29,3

- Buildings - Family Housing

-14,0

-5,0

-30,7

- Dwellings - Family Housing

-20,0

-18,5

-43,6

GFCF (Construction)

-5,8

-11,4

-16,1

Construction â&#x20AC;&#x201C; Works completed

Source: Ministry of Finance Percentage variation (e) - estimated

12 Business Activity

Annual Report 2012

The company's main activity rolls out in the construction and infrastructure areas, which is supported by complementary production centers for construction, such as the departments for the application and production of bituminous mixtures and of logistics and maintenance (which is responsible for the management, conservation and maintenance of the company's equipments). The year 2012 was characterized by the continuity of work related to contracts entered into in previous years and by the commencement of emblematic works in the non-residential buildings' infrastructure and construction areas. Despite the crisis scenario affecting the industry, the business managed to maintain very positive economic and financial results. The turnover amounted to 123 million Euros, showing a slight 10% decrease related to the previous year. Flowing against the previous years' trend, the proportion of the infrastructure works in total services rose to 62%, while the civil construction works decreased to 38%. Turnover

2010

2011

2012

VAR

Sales

2.494

1.792

1.898

5,92%

Services rendered

130.385

109.738

121.114

10,37%

Total

132.879

111.530

123.013

10,30%

Service rendered

2010

2011

2012

Infraestructure

62.608 48%

67.031 61%

45.722

38%

Buildings

67.777 52%

42.707 39%

75.393

62%

Total

130.385

109.738

121.114

The balance of services increased by 10.37%, reaching in 2012 a quite sustainable surplus, supported by a good portfolio of contract works. In the table below we highlight the major works that were carried out in 2012 and whose turnover represents 86% of the company's global turnover in the year: Main works

Localization

Implant. Redes de Banda Larga de Nova Geração - Zonas Rurais Norte

Zonas Rurais do Norte

Decathlon Setúbal

Setúbal

Sistema Elevatório de Pedrogão

Beja

Inst. Redes Comun. Electrón. Alta Velocidade - Zonas Rurais Sul

Alentejo e Algrave

Unidade Produtiva da Converde

Cantanhede

Shopping Évora Fórum

Évora

Escola Secundária Almeida Garrett

Vila Nova de Gaia

Execução da ETAR do Cávado-Homem

Vila Verde

Parque Eólico de Malhanito

Tavira

Parque Eólico da Falperra - Rechãzinha

Vila Pouca de Aguiar

Abast. de Água no Concelho de Faro

Faro

TMB Évora

Évora

Fundição Dois Portos

Torres Vedras

Vale de Santarém - Saneamento de Pernes

Santarém

Reabilitação do Antigo Edifício da G.N.R.

Braga

ETAR do Sistema de Ruães

Braga

Parque Aeronaútico da Embraer em Évora

Évora

Continente de Évora

Évora

Adutor da Mata do Urso

Leiria

ETAR de Rio Tinto

Gondomar

Unit: Thousand Euros

Annual Report 2012

Investment Financial Participations

In 2012, the balance of investments increased by about 1.7 million, justified on the one hand, the equity method application on investments in associates and subsidiaries, which contributed with 1.4 million Euros, and for another, the purchase of bonds in the amount of 260 thousand Euros

Tangible Fixed Assets

In line with previous years, the company's fixed assets' structure continues to show an incremental increase in productive net assets. Thus, the investment in the period under review amounted to 551 thousand Euros, comprising an increase in the purchase of equipment and vehicles for civil construction works.

Human Resources

The company's strategy consists of strengthening its senior and middle staff in order to build a structure under which all the company's growth is based. Nevertheless in 2012 there was a slight decrease in the number of human capital over the previous year.

Economic and Financial Analysis

2010

2011

2012

Board members

Employees

524

502

494

Total

529

507

499

As in previous years, the company's performance in 2012 was very positive, which is contrary to the trend in the construction sector. Net assets stood at 156.8 million Euros, representing an increase of 1.8 million Euros in comparison with the previous year. This growth was due both to the increase in non-current assets, in particular to the increase in financial investments, as well as in current active, indicating an increase in other receivables. On the liabilities side stand out the suppliers, revenue deferrals to be recognized next year, mainly related with construction contracts, and loans. Balance sheet Thousand â&#x201A;Ź

180 000 160 000 140 000 120 000 100 000 80 000 60 000 40 000

Assets

20 000

Liabilities

Equity 2011

2012

Turnover increased by 10% over the previous year, standing at 123 million Euros, due to works retained from 2011 and several important works raised that began in the current year. Accompanying this increase, expenditure on supplies and services increased by about 17%, while the cost of goods sold and materials consumed and personnel expenses decreased slightly by 2% and 4%, respectively. Impairment losses of receivables increased significantly, reaching the current financial year at 2.3 million Euros.

Annual Report 2012

It should also be noted the value of imputed earnings of subsidiaries, which in 2012 stood at 1.4 million Euros. Income statment Thousand â&#x201A;Ź

12 000 10 000 8 000 6 000

EBITDA

4 000

Operating results

2 000

Financial results

Net profit / Loss 2011

2012

Consequently, EBITDA increased by EUR 1.1 million, 12% over the previous year, reflecting an increase in gross margin. The year 2012 was marked by a good operating performance of the company, the result of a continuous improvement of efficiency and rational management of all resources, standing the operating result at 6.2 million Euros. The financial results also showed very positive values, increasing 58% over the previous year. There has been an increase in interests and similar income, sufficient to offset the increase in interest and incurred expenses, thus leading to a 24% net income increase. The company's net income reached a significant 5.6 million Euros amount, which allows the continuous equity strengthening and remuneration in order to pursue an ambitious and sustained growth strategy. The 2012 company's growth is reflected in some economical, financial and profitability ratios, namely: 2010

2011

2012

Gross added valued *

22.817.164

24.432.453

24.541.217

EBITDA*

8.801.134

9.135.812

10.214.048

EBITDA %

6,62%

8,19%

8,30%

Net Debt / EBITDA

3,33

2,51

2,13

Cash-flow*

7.833.369

7.461.802

9.566.960

Rotation of fixed assets

475,56%

383,31%

416,56%

Rotation of working capital

106,95%

77,22%

84,60%

Rotation of stocks

1 379,22%

1 002,54%

1 332,60%

Financial autonomy

25,48%

25,36%

28,65%

General liquidity

158,09%

147,25%

138,19%

General solvency

34,19%

33,97%

40,14%

Gross margin of sales

81,66%

82,80%

84,76%

Return on sales

4,33%

4,04%

4,55%

Return on total assets

4,22%

2,91%

3,57%

return on equity

16,55%

11,47%

12,46%

Description Economic indicators

Financial indicators

Profitability indicators

In the course of 2012 activity, the company generated over 24.5 million Euros of gross value added and the earnings before interest, taxes, depreciation, impairments and provisions ("EBITDA") exceeded 10.2 million Euros, representing an improvement of 12 percentage points.

* amounts in Euros

Annual Report 2012

Regarding the company's capacity to pay up its net debt, it may be observed that the number of years required by the company to pay its banking net debt from its cash balances decreased by nearly 3,3 years in 2010 to 2.3 years in 2012, considering constant EBITDA and banking net debt. The ability to generate cash flow was also positive, with 2012 free cash flows of 9.6 million Euros, which highlight the company's management capacity to cope with the difficulties experienced in the sector and in the country. The rotation of fixed assets demonstrates the rather high efficiency level of using assets, which exceeds 100% and therefore reflects the strong investment in productive capacity that the company has been doing in recent years. The stocks rotation ratio evaluates the stocks "weight" in a given period, which allows the evaluation of the company's efficiency. This ratio showed a positive evolution which is directly related to the decrease of stock level, mainly due to their use in construction works (which is related to the type of construction work) and a concerted effort of reducing the stocks permanency period by purchasing only the stocks required for each stage of the work. The financial autonomy ratio of the company stood at 28.7%, measuring its solvency by determining the proportion of assets that are equity financed. The general solvency indicator, which measures the company's ability to offset its debts to third parties with own means, stood at 40.2% in 2012, which shows a decrease of dependence from its creditors in relation to the previous year. The general liquidity indicator reflects the company's ability to ensure its short-term commitments, which 138.3%, greater than 100%, means that the company is fully endowed with the financial means required to meet its short-term liabilities. As shown in the table above, the company presented profitability ratios with values higher than those of 2011, which denotes the company's high operational efficiency. The return on equity is a reference indicator that stands at 12.5%, which is higher than any short or medium term financial assets.

Material events Occurring after the End of the Period

No events subsequent to the balance sheet date exist that may have a material impact on the financial statements.

Future Perspectives

Notwithstanding the current national and international macroeconomic environment, characterized by numerous uncertainties, the company remains investing in its sustained and multifaceted growth. At the economic level, domingos da silva teixeira, s.a. intends to consolidate its turnover and to improve its profitability, reducing debt levels and seeking to increase customer satisfaction through its products and services rendered. From a human resources point of view, the company will continue with the training plan

Annual Report 2012

outlined, as well as promoting the awareness and safety controls in the workplaces. In terms of quality, we will start the certification process for Research, Development and Innovation (RDI) management system according to standard NP 4457: 2007 - IDI Management, IDI Requirements Management System.

Own Shares

The company does not buy or sell its own shares. On December 31, 2012, the Company did not hold treasury shares.

Authorizations for Transactions between the Company and its Directors

The company has not granted loans or credits to directors did not make payments on their behalf, did not provide guarantees for liabilities incurred by them, nor any advances has provided the same pay, nor entered into any contracts with them, directly or intermediary.

Branches of the Company

On 31 December 2012 the company had only one branch in Pontevedra, Spain, designated “Domingos da Silva Teixeira, S.A. Sucursal en España”)..

Proposed Results Application

The Board of Directors proposed to General Shareholders' Meeting that the 2012 net positive result of 5,594,800.97 Euros (five million, five hundred and ninety-four thousand, eight hundred and ninety-seven cents) is transferred as follows: Legal Reserves...........................................................................279,740.05€ Retained Earnings...................................................................5,315,060.92€

Financial Risk Management Objectives and Policies

Information required by Legislation

The Board of Directors advises that the company does not have debts in arrears to the State, in compliance with the terms of Law-decree number 534/80 of November 7. In compliance with the provisions of Law-decree number 411/91 of October 17, the Board advises that the situation of the entity before the Social Security is regularized.

Final Note

The Board of Directors expresses a word of recognition to all employees and of gratitude to everyone who in one way or another cooperated with the company. Special gratitude is hereby expressed to the Sole Fiscal Auditor, trade creditors and banking entities that very much honor us with valuable relationship. Braga, April 8, 2013 The Board of Directors, José Gonçalves Teixeira; Chairman Avelino Gonçalves Teixeira; Vice Chairman Joaquim Gonçalves Teixeira; member of the Board of Directors Hernâni José Gonçalves Teixeira; member of the Board of Directors Teresa Gonçalves Gomes; member of the Board of Directors

Annual Report 2012

Individual Financial Information

Individual Balance Sheet Notes

31/12/2012

31/12/2011

Amounts expressed in Euros

ASSETS For the years ended December 31, 2012 and 2011.

Non-current assets Tangible fixed assets

7e8

3.525.423,22

4.638.718,72

Investment properties

150.000,00

Intangible fixed assets

8.096,22

7.022,74

Financial investments - equity method valuation

5.433.454,53

3.974.286,84

Financial investements - other method valuation

2.193.435,78

1.911.061,00

Deferred tax assets

261.408,08

99.407,53

11.571.817,83

10.780.496,83

Current assets Stocks

13 e 30

1.406.390,17

1.913.432,63

Trade debtors

66.166.233,60

80.795.741,38

Prepayments

183.927,11

14.995,17

Taxation receivable

1.482.683,87

2.096.500,33

Other receivables

73.646.656,33

57.641.952,85

Deferrals

380.844,19

417.142,04

Cash in hand, at bank and bank term deposits

1.982.670,26

1.394.029,35

145.249.405,53

144.273.793,75

156.821.223,36

155.054.290,58

Total assets

EQUITY AND LIABILITIES Equity Ordinary share capital

12.500.000,00

Other equity instruments

1.010.000,00

Legal reserve

1.428.204,51

1.202.645,14

Other reserves

8.122.976,43

retained profit

16.954.906,07

12.539.928,23

Financial assets adjustements

(691.821,85)

(568.185,27)

Other changes in equity

17,67

Net profit / (loss) for the period

5.594.800,97

4.511.187,49

Total equity

44.919.083,80

39.318.552,02

Liabilities Non-current liabilities Provisions

25.491,69

Loans

8 e 22

6.657.260,01

17.526.035,41

Deferred tax liabilities

103.553,11

207.106,20

6.786.304,81

17.758.633,30

Current liabilities Trade creditors

44.064.719,41

49.081.633,01

Prepayments

135.031,49

Taxation payable

414.162,28

405.351,68

Sharehorders

2.311.945,21

2.592.482,91

Loans due within 1 year

8 e 22

17.047.854,77

6.794.519,22

Other payables

11.337.841,84

25.373.438,03

Deferrals

29.804.279,75

13.729.680,41

105.115.834,75

97.977.105,26

Total liabilities

111.902.139,56

115.735.738,56

Total equity and liabilities

156.821.223,36

155.054.290,58

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails

Annual Report 2012

Individual Income Statement Notes

31/12/2012

31/12/2011

Turnover

123.012.850,20

111.530.153,56

Subsidies

44.479,60

26.926,62

Gains / (losses) on subsidiary, associates companies and joint ventures

1.433.050,38

(1.472.396,16)

Capitalization of own costs

2.960,00

13.411,46

Cost of sales

13 e 30

(18.741.548,48)

(19.182.906,70)

Other external charges

(87.552.874,48)

(74.532.931,11)

Staff costs

(10.075.145,84)

(10.536.805,52)

Trade debtors impairment (losses/written off)

(2.330.354,47)

(987.026,69)

Provisions (increase / decrease)

2.059,25

Increase / decrease in fair value

12.560,78

Other operating income

3.718.966,05

4.570.456,72

Other operating charges

(1.641.250,34)

(1.280.097,32)

7.883.693,40

8.150.844,11

(1.641.804,90)

(1.965.647,47)

6.241.888,50

6.185.196,64

Net operating profit / (losses) before depreciation and amortization, interests ant taxes Depreciation, amorization and other amounts written off tangible and intangible fixed

8 e 38

Net operating profit / (loss) before interets and taxes Income from interests

4.252.023,30

4.757.776,93

Intersts payable and similar charges

(3.067.240,42)

(4.008.928,66)

Net profit / (loss) before taxes

7.426.671,38

6.934.044,91

Corpooration tax

(1.831.870,41)

(2.422.857,42)

Net profit / (loss) for the period

5.594.800,97

4.511.187,49

Earning per share

0,45

0,36

Amounts expressed in Euros

For the years ended December 31, 2012 and 2011. Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails

Annual Report 2012

Individual Statement of Equity Changes in 2011

Amounts expressed in Euros

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Other equity

Legal

Other

Retained

Financial Assets

Other changes

Net profit / Loss

capital

instruments

reserves

Earnings

Adjustments

equity

of the period

12.500.000,00

1.010.000,00

914.678,22

8.122.976,43

7.068.556,78

(568.018,67)

5.759.338,37

34.807.531,13

First adoption of new accounting system

Application of 2010 result

287.966,92

5.471.371,45

(5.759.338,37)

Changes in other equity variations:

Equity method

(166,60)

Adjustments for deferred taxes

Other variations recognized in equity

287.966,92

5.471.371,45

(166,60)

(5.759.338,37)

(166,60)

Net profit / Loss for the period

4.511.187,49

Comprehensive income for the year

4.511.187,49

Descriptionn

On January 1, 2011

Total

Changes during the year

Operations with shareholders Share capital realizations

Share premium realizations

Distributions

Amounts received to cover losses

Others operations

12.500.000,00

1.010.000,00

1.202.645,14

8.122.976,43

12.539.928,23

(568.185,27)

4.511.187,49

39.318.552,02

On December 31, 2011

Individual Statement of Equity Changes in 2012

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails.

Amounts expressed in Euros

Other equity

Legal

Other

Retained

Financial Assets

Other changes

Net profit / Loss

capital

instruments

reserves

Earnings

Adjustments

equity

of the period

12.500.000,00

1.010.000,00

1.202.645,14

8.122.976,43

12.539.928,23

(568.185,27)

4.511.187,49

39.318.552,02

First adoption of new accounting system

Application of 2010 result

225.559,37

4.285.628,12

(4.511.187,49)

Changes in other equity variations:

Equity method

147.515,38

(124.302,47)

17,67

23.230,58

Adjustments for deferred taxes

Other variations recognized in equity

(18.165,66)

665,89

(17.499,77)

225.559,37

4.414.977,84

(123.636,58)

17,67

(4.511.187,49)

5.730,81

Net profit / Loss for the period

5.594.800,97

Comprehensive income for the year

5.594.800,97

Description

On January 1, 2012

Total

Changes during the year

Operations with shareholders Share capital realizations

Share premium realizations

Distributions

Amounts received to cover losses

Others operations

12.500.000,00

1.010.000,00

1.428.204,51

8.122.976,43

16.954.906,07

(691.821,85)

17,67

5.594.800,97

44.919.083,80

On December 31, 2012

Annual Report 2012

Individual Cash Flows Statement 2012

2011

Amounts expressed in Euros

Received frrom trade debtors

155.081.717,59

111.228.576,32

For the years ended December 31, 2012 and 2011.

Payments to trade creditors

(112.010.957,20)

(88.021.884,16)

payments to and on behand of employes

(10.546.834,98)

(11.781.180,53)

cash flow from operations

32.523.925,41

11.425.511,63

Corporate tax payments / receivables

(2.141.258,26)

(2.230.509,03)

30.382.667,15

9.195.002,60

Financial investments

(272.900,73)

(665.850,00)

tangible fixed assets

(2.037.331,83)

(3.09.740,31)

Intangible assets

(12.097,33)

Loans

(16.030.311,33)

(5.733.942,42)

Other assets

(150.000,00)

(18.352.641,22)

(9.642.532,73)

Financial investments

200,00

Tangible fixed assets

78.239,84

923.400,45

Interest

4.142.834,06

5.223.121,61

Dividens

109.189,24

4.330.463,14

6.146.522,06

(14.022.178,08)

(3.496.010,67)

893.238,13

547.148,57

893.238,13

547.148,57

Loans granted

(13.160.624,31)

(2.607.090,39)

Intersts

(3.504.461,98)

(4.008.928,66)

(16.665.086,29)

(6.616.019,05)

Financing cash flow (3)

(15.771.848,16)

(6.068.870,48)

(Decrease) / Increase in cash in the year (1) + (2) + (3)

588.640,91

(369.878,55)

Cash and cash equivalents at the begining of the period

1.394.029,35

1.763.907,90

1.982.670,26

1.394.029,35

Description

Notas

Operating activities - direct method

Operating cash flow (1)

Investments activities Payments for:

Revenues from:

Investment cash flow(2)

Financing activities Revenues from: Loans obtained

Payments for:

Cash and cash equivalents at the end of the period

Translation of financial statements originally issued in Portuguese. In case of discrepancy the Portuguese version prevails

Annual Report 2012

Annex for the year ended December 31, 2012

Entity Identification Company designation: Domingos da Silva Teixeira, S.A. Headquarters: Rua de Pitancinhos - Palmeira - Braga Incorporation date: February 13, 1984 Tax identification number: 501489126 C.A.E.: 42990 - Construction of civil engineering works Activity: Construction and Engineering Ultimate parent company: DST-SGPS, S.A. Ultimate parent company headquarters: Rua de Pitancinhos – Palmeira - Braga These financial statements are the Entity's individual financial statements. All the amounts presented in these notes are expressed in Euros, unless otherwise stated.

2. Accounting referential for the financial statements preparation 2.1. Accounting Normalization System (“SNC – Sistema de Normalização Contabilística”) The financial statements herewith were prepared in accordance with all standards comprised in the SNC. It should be considered that as part of SNC are the Basis for the presentation of financial statements, the Financial Statements Models, the Accounting Code, the Financial Reporting and Accounting Standards (“NCRF”) and the Interpretive Guidelines. These standards of SNC are regulated by the following legislation: - Law-decree number 158/2009 of July 13 (Accounting Normalization System), with amendments introduced by law number 20/2010 of August 23; - Ordinance number 986/2009 of September 7 (Financial Statements Models); - Notice number 15652/2009 of September 7 (Conceptual Framework); - Notice number 15655/2009 of September 7 (Financial Reporting and Accounting Standards); - Ordinance number 1011/2009 of September 9 (Accounting Code). In order to ensure the proper and true expression of the financial position and the entity's performance, were used the standards that integrate the SNC, referred to above, in all aspects pertaining to the recognition, measurement and disclosure. However where the SNC do not respond to particular aspects of transactions or situations are complementarily applied in the following order, the International Accounting Standards, as adopted pursuant to Regulation (EC) number 1606/2002 of the European Parliament and Council of July 19, the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the IASB, and respective SIC-IFRIC interpretations. 3.

Main accounting policies The main accounting policies used for the preparation of the financial statements are stated

below. 3.1.

Presentation basis In preparing the financial statements taken as based on the following assumptio:

Annual Report 2012

3.1.1. Continuity assumption Under the continuity assumption, the entity has evaluated the information available and its future expectations, taking into account the entity's ability to continue with your business. Of the evaluation resulted that the business is able to proceed assuming its continuity. 3.1.2. Accruals assumption (or economic periodization) The Entity records its income and expenses in accordance with the rules of the increase, by which income and expenses are recognized as they are generated, regardless of when they are received or paid. The differences between the amounts received and paid and the corresponding income and expenses are recognized under "Deferrals" or "Other payables or Other receivables." 3.1.3. Consistency of presentation The items presentation and classification in the financial statements are consistent from one period to another.. 3.1.4. Materiality and aggregation The materiality depends on the size and nature of the error or omission, sober in the circumstances that surround it. It is considered that the omissions or incorrect statements are materially relevant items if they can, individually or collectively, influence the economic decisions taken by users of financial statements. An item that is not materially relevant to justify its separate presentation on the face of the financial statements can however be relevant material to be presented separately in the notes to this annex. 3.1.5. Materiality and aggregation The assets and liabilities, income and costs are reported separately in the respective items of the balance sheet and the income statement, so that no assets were compensated for any liability or any expense for any income, both vice-versa. Gains and losses arising from a group of similar transactions are reported on a net basis, i.e., gains and losses from exchange rate differences and gains or losses arising on financial instruments held for trading. These gains and losses are reported separately if they are materially relevant. 3.1.6. Comparative Information The accounting policies and measurement bases adopted at December 31, 2012 are comparable with those used in preparing the financial statements for December 31, 2011. The comparability of the information between periods is continuously improvement object in order to be increasingly an instrument of help to users allowing them to take economic decisions and assessing the trends in financial information for forecasting purposes. 3.2.

Recognition and measurement policies used in the preparation of financial statements

Annual Report 2012

rates that date. The carrying amounts of non-monetary items are recognized at fair value denominated in a foreign currency are updated to the exchange rates of the dates on which the respective fair values were determined. The carrying amounts of non-monetary items are recognized at historical cost, denominated in a foreign currency are not upgraded. Positive or negative exchange differences driven out from differences between the exchange rates in force at the transaction dates and at the dates of collection, payment or of balance sheet are recognized as income and/or expenses in the period's income statement as foreign exchange gains and/or losses 3.2.2. Tangible fixed assets Tangible fixed assets are recognized at acquisition cost, net of related depreciation and any impairment losses. The acquisition cost includes all expenditure directly attributable to the acquisition of such assets and to their availability in local and operational conditions required. Subsequent charges are included in the acquisition cost of the asset or recognized as separate assets, as appropriate, when it is probable that future economic benefits will flow to the entity through its use and its cost can be reliably measured. Tangible assets in progress, fixed assets still under construction or completion, are accounted for at acquisition cost deducted of eventual impairment losses. The depreciation of these assets starts at the moment that they are available for use. Depreciation are calculated from the straight-line method, applied annually under duodecimal attribution since the date the assets are ready for use and in the required conditions in terms of quality and technical, to operate according to intended by the entity, considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. The estimated useful lives is determined taking into account the expected use of the asset by the entity, the natural wear expected, the subjection to technical obsolescence and salvage value attributable. Provided that the entity does not have a reliable estimate of the residual value of its assets it was considered null value for depreciation of tangible fixed assets purposes. Whenever there is evidence that a significant change occurred in the useful life or in the residual amount of an asset, its depreciation is reviewed on a prospective basis in order to reflect such new expectations. The average annual depreciation rates and the useful lives were considered as follows: Useful life Annual Rate (%) Buildings and other structures 10 to 50 2 to 10 Basic equipment 2 to 20 5 to 50 Transport equipment 2 to 8 12,5 to 50 Office equipment 3 to 10 10 to 33,33 Artistic patrimony 8 12,5 Other tangible fixed assets 3 to 10 10 to 33,33 The depreciation method and useful lives of the various assets are reviewed annually. The effect of any changes to these estimates will be recognized prospectively in the income statement. Repairs and maintenance expenses that do not increase the useful life of the assets and do not results in significant improvements in the elements of tangible fixed assets are recognized as an expense in the period in which they are incurred.

Annual Report 2012

The major repairs relating to the replacement of equipment are recorded in tangible fixed assets and depreciated at rates corresponding to the residual life of the respective assets. The gains or losses resulting from the write-off or sale of tangible fixed assets are determined by the difference between the amount received from the sale and the assets' carrying amount and are recognized in the income statement as "Other revenues and income" or "Other losses and expenses", respectively. 3.2.3. Intangible assets Intangible assets are accounted for at acquisition cost deducted from amortizations and any accumulated impairment losses. Intangible assets only are recognized if it is probable that they will produce future economic benefits to the entity and if they are controllable and can be reliably measured. Most intangible assets consist of software and are amortized in accordance with the straight-line method with duodecimal attribution since the date the assets are ready for use, considering the most appropriate economic rates to allow the full reintegration of the assets during their estimated useful lives. No residual value is considered. The average annual depreciation rates and the useful lives were considered as follows: Useful life Annual Rate (%) Software 3 33,33 Industrial property 10 10 The gains or losses resulting from the write-off or sale of intangible fixed assets are determined by the difference between the sale price and the assets' carrying amount and are recognized in the income statement as "Other revenues and income" or "Other losses and expenses", respectively. 3.2.4. Investment properties Investment properties consist of properties whose purposes are to obtain rents and equity valorization and not for administrative purposes nor for sale in the course of the entity's current activity. Investment properties are measured at cost less any accumulated impairment losses. The costs incurred with investment properties in use, such as maintenance, repairs, insurance and property taxes are recognized in the income statement of the period to which they relate. The improvements in respect of which it is estimated that generate future additional economic benefits are capitalized under investment properties.. 3.2.5. Financial investments a) Financial investments - equity method Investments in subsidiaries and associates are valued according to the equity method, defining themselves as such entities over which the Group exercises control or significant influence, generally investments representing more than 20% of the capital of a company, and they are not Joint Ventures. For the determination of control or significant influence are taken into consideration the interests existing at the present date in accordance with potential voting rights. According to the equity method, the financial investments are recognized at their acquisition cost, adjusted by the amount corresponding to the company participation in the net results of associates

Annual Report 2012

and subsidiaries, against profit or loss for the period, and by the dividends received, net of accumulated impairment losses. Any excess of the acquisition cost over the value of the equity percentage held is considered "Goodwill", being added to the value of the financial asset and its recovery analyzed annually as part of the investment, and if the difference is negative ("Badwill"), after reassessment of the valuation process and if it remains in the income statement. Is performed an assessment of investments in subsidiaries and associated companies or other when there are indications that the asset may be impaired, and recognized a loss in the income statement whenever it is confirmed. When the proportion of the Company in accumulated losses of associated company or subsidiary exceeds the value of the investment is recognized, the investment is reported at nil value while the equity of the associated company is not positive, except when the entity has made commitments to the associated our subsidiary company, registering such cases a provision under the liability item 'Provisions' to meet these obligations. The unrealized gains on transactions with associated companies are eliminated in proportion to the interest of the company in the associated company against the investment in these companies. The unrealized losses are similarly disposed, but only to the extent that the loss does not evidence that the asset transferred is in impaired. b)

Financial investments - other methods The company uses the cost model in relation to investments in other entities in which the equity or proportional consolidation methods are not mandatory and in which it is unable to reliably determine their fair value, namely investments in companies with securities out of a regulated market. According to the cost model investments are initially recognized at acquisition cost, which includes transaction costs, and subsequently its value is decreased by eventual impairment losses. The company uses the fair value model in financial investments in companies listed on a regulated market, whose fair value can be obtained and reliably determined. 3.2.6. Inventories Goods, raw materials, subsidiary and consumable materials are valued at the lower of their average acquisition cost and net realizable value (estimated sales price net of costs to be incurred for their disposal), using the FIFO as cost formula. The finished and semi-finished products, by-products and products and work in progress are valued at production cost or net realizable value (if this is lower). The production costs include the cost of raw materials, direct labor and manufacturing overheads. If the net realizable value is lower, in particular due to the decrease in the market price, deterioration or obsolescence, rising of finishing or necessary costs to perform the sale, or of the recoverable value by using the conversion into finished products whose market price has been reduced, it is justified the recognition of impairments in the periods that the adjustment needs are found, using replacement cost as a reference.

Annual Report 2012

The reversal of impairment losses recognized in prior periods is recorded when there is evidence that impairment losses are no longer justified or decreased, being expressed in the income statement as "Impairment of inventory net of reversals". However, the reversal is only done up to the amount of the accumulated impairment losses. The expenses related to inventory sold are recorded in the same reporting period in which revenue is recognized. 3.2.7. Leases The classification as operating or financial leases depends on the respective contract's substance and not on its form. Lease contracts are classified as finance leases, if through tem are substantially transferred all the risks and rewards of ownership of the asset leased or otherwise as operating leases. Financial leases Tangible fixed assets acquired through financial lease contracts and their correspondent liabilities are recognized in accordance with the provisions of NCRF 9 - Leases. According to this method the cost of the asset is recorded as tangible fixed asset, the correspondent responsibility is accounted for as a liability and the financial charges included in the rent and the depreciations of the leased assets are recognized as expenses in the income statement in the period to which they relate. Operating leases In leases considered operational, the rents payable are recognized as expense in the income statement over the period of the lease and in accordance with the obligations inherent to these 3.2.8. Contingent assets and liabilities Contingent assets are possible assets arising from past events and whose existence will only be confirmed if occurs, or not, one or more uncertain future events not wholly within the entity's control. If it is probable the existence of future economic benefits, the entity does not recognize this contingent asset in its financial statements but promotes its disclosure. Contingent liabilities are defined as: (i) possible obligations arising from past events and whose existence will only be confirmed if occurs, or not, one or more uncertain future events not wholly within the entity's control; or (ii) current obligations arising from past events that are not recognized because it is unlikely that resources flows affecting economic benefits are required to offset the obligation or because the amount of the obligation cannot be measured with enough reliability. Contingent liabilities are not recognized in the entity's financial statements but are disclosed unless the possibility of a funds outflow affecting future economic benefits is remote, in which case they are not even disclosed 3.2.9. Provisions Provisions are recognized in accordance with the effectively required amounts to cover estimated losses, are revised at each balance sheet date and are adjusted to reflect the best estimate at that date. Provisions are recognized if and only if the entity has a present liability (legal or constructive) resulting from a past event and if it is probable that for the resolution of such obligation a resources outflow occurs and that the amount of the obligation can be reasonably estimated. Provisions for future operating losses are not recognized.

Annual Report 2012

3.2.10. Employee benefits Short-term benefits The employees' short-term benefits include wages, salaries, Social Security contributions, food allowances, holidays and Christmas subsidies and any other retribution eventually decided by the Board of Directors. Obligations resulting from short-term benefits are accounted for as expenses in the period in which the employee has provided services on an undiscounted basis against a liability that is extinguished with the payment. According to applicable labor legislation, the right to vacation and holiday allowance for the period, for this match the calendar year expires on 31 December of each year, being paid only during the following period, the corresponding expenses are recognized as short-term benefits and treated in accordance with the mentioned above. The benefits resulting from the employment's cessation, either by unilateral decision of the entity, or by mutual agreement, are recognized as an expense in the period in which they occurred. Long-term benefits The long-term benefits include a health insurance that covers all employees. 3.2.11. Financial assets and liabilities The financial assets and liabilities are accounted for in accordance with the following criterions: Trade debtors and other receivables Trade debtors and other receivables balances are accounted for at their nominal value and disclosed in the balance sheet, deducted from any accumulated impairment losses, recognized under â&#x20AC;&#x153;Impairment on trade receivables net of reversalsâ&#x20AC;?, so as to reflect their net realizable value. These items when current do not include interest because they would be immaterial for the impact of discounting. At the end of each reporting period trade debtors balances are analyzed in order to assess whether there is any objective evidence that they are not recoverable. Impairment losses are recognized after events that indicate, objectively and in a quantifiable manner, that all or part of the balance will not be received. For this purpose, the entity takes into consideration market information that demonstrates that the trade debtor is in breach of its responsibilities, as well as historical information of overdue and not received balances. Objective evidence of impairment for a portfolio of receivables could include past experience of collecting payments, an increase in the number of delayed payments in, as well as changes in national or local economic conditions that correlate with default on receivables. The impairment loss is recognized as an expense in the income statement. Trade creditors and other payables Debts to suppliers or other third parties are accounted for at nominal value as they do not bear interest and the effect of discounting is immaterial.

Annual Report 2012

Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration. Discounted bills The entity writes-off financial assets from its financial statements only when it substantially transfers all the risks and benefits inherent to the ownership of such assets to a third party. If the entity substantially retains the risks and benefits inherent to the ownership of those assets, it continues recognizing them in its financial statements as liabilities related to obtained loans correspondent to the monetary counterentry for the transferred assets. Loans and other non-current payables Loans and other non-current payables are accounted for at cost as liabilities, net of transaction costs that are directly attributable to the issuance of these liabilities, being expressed in the balance in current or noncurrent liabilities depending on their maturity occurs within or more than one year, respectively. Its non- recognition only occurs when they cease their obligations under the contracts, particularly when there has been a liquidation, cancellation or expiration. The interest and other costs incurred in financings are calculated according to the effective interest rate and recognized in the income statement for the period in accordance with the increase presupposition. Cash and cash equivalents The cash and cash equivalents balance includes cash, bank deposits and other short-term investments that can be immediately mobilized without significant risk of value fluctuations. Financial liabilities and equity instruments Financial liabilities and equity instruments are classified according to the substance of the contractual transaction, regardless of their legal form. A financial instrument is classified as a financial liability when there is a contractual obligation to their settlement to be effected by delivering cash or another financial asset. Financial liabilities are initially recorded at cost, net of transaction costs incurred. An equity instrument is classified as such when there is not a contractual obligation to their settlement to be effected by delivering cash or another financial asset, evidences a residual interest in the assets of an entity after deducting all of its liabilities. Costs directly attributable to issue of equity instruments are recognized in equity as a deduction of issue. Amounts paid or received for purchases and sales of equity instruments are recognized in equity, net of transaction costs. 3.2.12. Revenue Revenue comprehends income associated with sales and services rendered. Revenue is recognized on sales when the buyer takes the risks and benefits inherent to the ownership of the goods sold and as what concerns to services revenue is recognized in the income statement when such services are rendered, taking into consideration the proportion of services rendered in the period and the total services agreed. Revenue is not recognized when it is related to situations of uncertainty of acceptance or payment of those services.

Annual Report 2012

Whereas invoiced services are higher than the services rendered, the difference is recorded as income to be recognized and is accounted for in the income statement at the time such services are rendered and the correspondent expenses are incurred. 3.2.13. Construction contracts The entity recognizes the construction works' results contract per contract in accordance with the completion percentage method, which is understood to be as the relationship between the expenses incurred on each work at a determined date and the sum of those expenses with the expenses estimated to be incurred for its completion. The differences between the amounts resulting from the application of the completion percentage method with the estimated income and invoiced amounts are accounted for as non-invoiced production or advanced invoicing, which are included within as "Other receivables - Receivables from accrued income " (Asset) or "Deferred - Income to recognize" (Liability). Changes in work from the amount of revenue settled in the correspondent contract are recognized in the period's results when it is probable that the customer accepts the revenue amount arising from the variation and that this can be reliably measured. Claims for costs reimbursement not included in the contract price are included in the contract's revenue when negotiations are at such an advanced stage that it is probable that the customer accepts the complaint and that it is possible to measure it reliably. When it is probable that the construction contract's total expenses exceed the income defined therein, the expected loss is immediately recognized in the period's income statement.. 3.2.14. Subsidies and Government assistance Government subsidies are recognized at their fair value when there is sure to be received and that the entity will comply with the conditions of the grant. Operational subsidies are intended to cover expenses incurred and recorded, particularly with the development of vocational training actions, and they are recognized as income as the expenses are incurred, regardless of the time of receipt of the grant. The outright grants, to finance tangible and intangible assets are recognized in equity and recognized in the income statement in proportion to the respective depreciation and amortization of subsidized assets. 3.2.15. Impairment of assets At each reporting date, and whenever are disclosed an event or changes in circumstances indicating that the asset's recorded amount may not be recoverable an impairment of assets evaluation is assessed. Whenever the amount by which the asset is recorded is higher than its recoverable amount, is recognized as an impairment loss recorded in the income statement as "'Impairment of investments depreciables/amortizables net of reversalsâ&#x20AC;? or as "Impairment on trade receivables net of reversals", if it respects the non-depreciable assets. The recoverable amount is the higher of the net selling price and value in use. The net selling price is the amount obtainable from the sale of the asset in a transaction between independent entities, less the costs directly attributable to the sale. The value in use is the present value of estimated future cash flows

Annual Report 2012

that are expected to arise from the continued use of the asset and from its sale at the end of its useful life. The recoverable amount is estimated for each asset individually or, if not possible, to the unit generating cash flows to which the asset belongs. After the recognition of an impairment loss, the expense related to the amortization/depreciation of the asset is adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if any) on a systematic basis over the useful life remaining. Whenever events or changes in circumstances indicate that the carrying amount of an asset is recorded can not be retrieved, it made a new assessment of impairment. Reversal of impairment losses recognized in previous years is registered when it is concluded that previously recognized impairment losses no longer exist or have decreased. A reversal of an impairment loss is recognized in the income statement under aforementioned. The reversal of the impairment loss is made up to the amount that would be recognized (net of amortization or depreciation) if the impairment loss had not been recorded in previous periods. 3.2.16. Income tax The entity is included in the special group taxation regime (RETGS), reason why the period's income tax is accounted for as an offset to “Shareholders” and not to “State and other public entities”. In RETGS taxable profit of the group is calculated by the dominant society, through the sum of the taxable income and tax losses in periodic statements of each individual companies within the group, correcting the profits distributed among the members of the group who is included in taxable income individual. The expense relating to period's income tax corresponds to the sum of current and deferred taxes. Current income tax is based on the entity's taxable profits in accordance with the enforceable tax regulations, whilst deferred taxes result from temporary differences between accounting and tax assets and liabilities. The taxable profit is different from the accounting result, provided that it excludes expenses and revenues that are taxable or deductible in other periods. The taxable profit also excludes expenses and revenues that will never be taxed or deducted. The Entity shall record deferred taxes related to temporary differences between the carrying amount of assets and liabilities and the corresponding tax base as provided in NCRF 25 - Deferred income taxes, whenever it is probable that future taxable profits will be generated against which the differences temporary and can be used based on the standard rate of corporation tax to the balance sheet date. Deferred taxes assets and liabilities are calculated and annually evaluated based under the tax rates in force or announced to be in force at the time of the expected reversal of temporary differences. The deferred tax assets are recognized only when there is a reasonable expectation of future taxable profits to be deducted from such assets, or in situations where there are taxable temporary differences to offset the deductible temporary differences in the period of its reversal. At each reporting date a review of those deferred tax assets is carried out and such are adjusted in accordance with the expectations concerning their future use. Current and deferred taxes are accounted for in the income statement except when are related to items directly recognized as equity. In these cases, the correspondent deferred taxes are also recognized as equity.

Annual Report 2012

Tax returns may be subject to review and possible corrections by the tax authorities for a period of four years (ten years for Social Security). So corrections may be made for the years 2009 and following, not being expected, however, that the possible course corrections will significantly affect the financial statements. The above time limit may be extended or suspended if they have been obtained tax benefits, which are ongoing inspections, claims or contestations, or if they have been tax losses, in which, over a period of six years after its occurrence, relatively to previous periods to 2012 and four years for subsequent periods, they are susceptible of deduction to taxable income that may be generated. The taxes are not paid, relating to the current period or the previous are recognized as a liability at the amount that is estimated to be paid based on the rates and tax laws applicable to the balance sheet date. However, if the amounts already paid in respect of such periods exceed the amounts due, are recognized as assets to the extent of the excess. Current tax is also conditioned by the adjustments, positive or negative, which are to be recognized in the period for current tax of previous periods. The tax effects of the transition adjustments resulting from the succession of accounting standards are regulated by article 5 of the Law-decree number 159/2009 of July 13, which provides that such adjustments contribute to the formation of profit taxable in a 5 year period, in equal parts, beginning in 2010 and ending in 2014. 3.3.

Main assumptions concerning the future The financial statements were prepared on a going concern basis from the books and accounting records of the entity. 4.

Cash flow The cash flow statement is prepared in accordance with the direct method, disclosing receipts and cash payments by operating, investing and financing activities. The cash and bank deposits present the following composition: Description

2012

2011

Cash in hand

113.748,93

64.642,13

Cash in bank

1.860.671,33

1.301.137,22

Term deposits

8.250,00

28.250,00

Tota cash in hand, at bank and term deposits

1.982.670,26

1.394.029,35

There are no amounts of cash and cash equivalents unavailable for use. 5.

Accounting policies, changes in accounting policies and errors During the period there were no changes in accounting policies and estimates or material errors related to prior periods.

Annual Report 2012

Related parties a) Information concerning the parent company The following legal entity is the owner of more than 20% of the entity's share capital: Participation Investhome - Construção e Imobiliária, s.a.

100%

The main balances at the end of the current period between the entity, its shareholders and other group companies are the following: Companies

Balance

dst-sgps, s.a.

67.850.162,81

Investhome - Construção e Imobiliária, s.a.

(1.080.634,42)

Domingos da Silva Teixeira - Imobiliária, s.a.

1.781,78

Domingos da Silva Teixeira - Empreitadas Eléctricas, s.a.

(6.811.429,38)

Investhome - sgps, s.a.

9.327,00

bysteel, s.a.

(1.048.304,17)

tmodular, s.a.

324.165,30

tstone, s.a.

547.821,08

tgeotecnia, s.a.

610.248,92

tconcrete, s.a.

95.418,78

tagregados, s.a.

45.869,57

Cari - Construtores, s.a.

(779.496,28)

Monte Dourado - Hipermercados e Imobiliária, s.a.

7.719,24

IPPLUS, s.a.

830,25

Perfil Dinâmico, s.a.

5.032.134,86

Despertavantagem, s.a.

671.776,00

dst Energias Renováveis, s.a.

1.068,62

dst wind, s.a.

5.304,50

Global Sun, s.a.

1.894,24

dst solar, s.a.

7.755,26

EOL Minho - Energias Renováveis, s.a.

43,54

dst hydro, s.a.

25.814,71

dstelecom, s.a.

1.730.232,82

Innovation Point - Investigação e Desenvolvimento, s.a.

(710,45)

dstelecom, Norte, s.a.

1.870.743,96

dstelecom, Alentejo e Algarve, s.a.

2.182,61 69.121.721,15

Annual Report 2012

The main transactions at the end of the current period between the entity, its shareholders and other group companies are the following: Companies

Turnover

Purchases and acquisitions

Other external charges

Income from interests

Others operating income

dst-sgps, s.a.

1.298,37

(61.978,00)

2.229.695,70

13.879,46

Investhome - Construção e Imobiliária, s.a.

21.920,10

(2.144.500,91)

47.292,89

Domingos da Silva Teixeira - Imobiliária, s.a.

7.800,00

Domingos da Silva Teixeira - Empreitadas Eléctricas, s.a.

201.739,76

(22.476,74)

(20.577.862,03)

232.289,83

Investhome - sgps, s.a.

1.200,00

bysteel, s.a.

83.970,37

(17.257,86)

(4.811.366,12)

195.095,97

tmodular, s.a.

740,98

(16.567,33)

1.800,00

tstone, s.a.

1.800,00

tgeotecnia, s.a.

97.811,82

(275.567,61)

56.878,43

tconcrete, s.a.

87.361,18

(592.251,21)

(13.922,24)

591.591,79

tagregados, s.a.

185.942,49

(92.396,27)

(227.187,05)

128.571,27

Cari - Construtores, s.a.

863.324,00

(882,79)

(8.290.332,60)

245.854,27

Monte Dourado - Hipermercados e Imobiliária, s.a.

900,00

IPPLUS, s.a.

2.700,00

Perfil Dinâmico, lda.

2.400,00

dst Energias Renováveis, sgps, s.a.

5.261,55

dst wind, s.a.

5.666,14

6.582,16

Global Sun, s.a.

2.757,12

(2.060,62)

9.247,28

dst solar, s.a.

15.061,31

(924,00)

(12.650,65)

31.673,46

dst hydro, s.a.

745,92

7.089,03

dstelecom, s.a.

11.111,78

(1.866,67)

206.114,40

39.126,61

Innovation Point - Investigação e Desenvolvimento, s.a.

1.546,91

(2.269,44)

938,34

dstelecom, Norte, s.a.

4.800,00

dstelecom, Alentejo e Algarve, s.a.

4.800,00

1.580.998,25

(726.188,87)

(36.438.131,27)

2.435.810,10

1.639.572,34

Information related to other group companies and joint ventures The entity has share capital participations in the following companies: Companies

Participation

Equity 31-12-2012

Net result 31-12-2012

Cari - Construtores, s.a.

100%

3.992.405,98

1.474.759,69

Steelgreen, s.a.

50%

1.389.089,69

96.060,59

way2b, sgps, s.a.

20%

8.723,31

(341,10)

Caminhaequi, s.a.

20%

187.785,76

61.710,85

Barcelos Futuro, s.a.

20%

(913.368,36)

(762.319,65)

Inovaguiar

20%

(99.856,52)

(59.681,45)

way2b Peru s.a.c.

20%

1.205,31

(1.749,65)

The entity takes part in the following joint ventures: Companies

Headquarters

Participation

Equity 31-12-2012

Net result 31-12-2012

Assets 31-12-2012

Assoc/Soares da Costa, ACE

Braga

14,29%

736,11

Assoc - Obras Públicas, ACE

Braga

14,29%

28.773,72

(8.159,86)

33.526,46

Theatro Circo, ACE

Braga

25,00%

548.077,92

Parque Emp. de Tavira, ACE

Tavira

50,00%

229.806,33

way2b, ACE

Braga

20,00%

(5.129.128,64)

254.111,33

8.147.687,82

Agonia Parque Construção, ACE Viana do Castelo

33,33%

124.842,51

(5.711,00)

623.527,11

Unifacere, ACE

Braga

33,33%

(1.451,93)

(114,18)

13.571,22

dst visabeira, ACE

Lisboa

50,00%

145.014,29

202.175,57

383.825,34

Águas da Linha, ACE

Braga

12,50%

93.232,35

9.912,55

3.568.373.,37

Annual Report 2012

Remuneration of Corporate Bodies Provided that Board members are not remunerated, the Corporate Bodies' remuneration in the exercise of their duties in 2012 was 16,560.72 Euros and corresponds to the Statutory Auditor's fees for Legal Certification of Accounts. 7.

Tangible fixed assets Information relating to the carrying amounts of tangible fixed assets with reference to 2012 and 2011 periods may be analyzed as follows: Description

Building and

Basic

Transport

Administrative

Artistic

other resources

other structures

equipment

patrimony

1 Initial gross book value

5.161,48

939.928,17

14.033.999,26

9.296.346,21

3.573.883,08

7.500,00

313.802,40

34.263,99

28.204.884,59

2 Initial accumulated depreciations

286.318,81

12.189.579,65

7.576.513,95

3.237.531,87

2.031,25

274.190,34

23.566.165,87

4 Initial net carrying amount (4=1-2-3)

5.161,48

653.609,36

1.844.419,61

1.719.832,26

336.351,21

5.468,75

39.612,06

34.263,99

4.638.718,72

5 Movements of the period (5= 5.1-5.2+5.3+5.4)

(49.402,36)

(351.256,32)

(614.617,94)

(70.719,62)

(937,50)

4.123,23

(30.484,99)

(1.113.295,50)

5.1 Total additions

381.606,38

3.000,00

158.561,33

4.429,11

3.779,00

551.375,82

New acquisitions

270.040,22

156.797,33

4.429,11

3.779,00

435.045,66

Other acquisitions

111.566,16

3.000,00

1.764,00

116.330,16

5.2 Total disposals

49.402,36

732.862,70

617.617,94

229.280,95

937,50

305,88

1.630.407,33

Depreciations

49.402,36

732.851,42

617.917,94

229.280,95

937,50

305,88

1.630.396,05

Sales

11,28

(34.263,99)

604.207,00

1.493.163,29

1.105.214,32

265.631,59

4.531,25

43.735,29

3.779,00

3.525.423,22

5.3 Transferences of TFA under construction 5.161,48

6 Final net book value (6= 4+5)

Others

TFA under

Total

Land and

construction

Tangible fixed assets are recognized in accordance with the accounting policy described in Note 3 above. The net tangible fixed assets are in their entirety affects to the only activity of the entity and there are no assets held by third parties. In the period were not recorded any impairment losses, due to be convinced of the Administration that the recoverable amount of the asset exceeds its carrying amount. 8.

Leases The information concerning leases as of December 31, 2012 and 2011 is as follows: Financial leases Description

Tangible fixed assets

Total

1 Initial gross book value

4.504.901,42

2 Accumulated amortizations / depreciations

2.539.399,83

4 Final net book value (4=1-2-3)

1.965.501,59

5 Total future minimum lease payments at:

1.539.778,70

5.1 Up to one year

835.240,23

5.2 From one to five years

704.538,47

Investment properties The entity has chosen to account for its investment properties in accordance with the cost model. The fair value of investment properties was estimated at â&#x201A;Ź 150,000. Cost model Description

Land and other resources

Total

1 Initial gross book value

150.000,00

4 Initial gross carrying amount (4=1-2-3)

150.000,00

5 Movements of the period ( 5 = 5.1-5.2+5.3+...+5.9)

5.1 Total additions

5.2 Total disposals

6 Final net book value (6= 4+5)

150.000,00

Acquisitions

Annual Report 2012

10.

Intangible assets Information related to the carrying amount of intangible assets with reference to 2012 and 2011 periods may be analyzed as follows: Software

Industrial Property

Total

4 Initial gross book value

772.541,09

11.156,97

783.698,06

5 Initial accumulated depreciations

772.541,09

4.134,23

776.675,32

7 Initial net carrying amount (7=4-5-6)

7.022,74

8 Movements of the period (8=8.1-8.2)

1.989,18

(915,70)

1.073,48

8.1 Total additions

12.395,00

87,33

12.482,33

New acquisitions

12.395,00

87,33

12.482,33

8.2 Total disposals

10.405,82

1.003,03

11.408,85

Depreciations

10.405,82

1.003,03

11.408,85

9 Final net book value (9=7+8)

1.989,18

6.107,04

8.096,22

Description With finite useful economic life:

11.

Financial investments - equity method Variations in financial investments valued in accordance with the equity method are as follows: Description

Investiments in subsidiaries

Investments in

Total

associated companies

Equity method: Initial gross book value

3.074.028,38

900.258,46

3.974.286,84

Initial net carrying amount

3.074.028,38

900.258,46

3.974.286,84

Movements of the period

1.476.559,69

(17.392,00)

1.459.167,69

Other

2.000,00

1.086,73

3.086,73

Share of associatesâ&#x20AC;&#x2122; profits

1.474.759,69

(41.709,31)

1.433.050,38

Changes of investeeâ&#x20AC;&#x2122;s equity not recognised in the income statement

23.230,58

Sales

200,00

Final net book value

4.550.588,07

882.866,46

5.433.454,53

The company has carried out impairment tests on goodwill, not identified any situation that could generate an impairment loss. 12.

Financial investments - other methods Variations in financial investments valued in accordance with other methods are as follows: Description

Investments in

Total

others companies Other methods:

13.

Initial gross book value

1.911.061,00

Initial net carrying amount

1.911.061,00

Movements of the period:

282.374,78

Other acquisitions

269.814,00

Other movements of the period

12.560,78

Final net book value

2.193.435,78

Inventories As of December 31, 2012 and 2011, inventories' balance was as followss: Description

2012

2011

Goods

12.651,61

13.239,22

Raw, subsidiary and consumable materials

1.393.738,56

1.900.193,41

1.406.390,17

1.913.432,63

Annual Report 2012

14.

Trade debtors As of December 31, 2012 and 2011, the balance of trade debtors was as follows: Description

2012

2011

Trade debtors - currente accounts

64.187.419,12

79.432.589,51

Trade debtors - bills of exchange

281.492,33

210.910,39

Trade debtors - with guarantee

1.697.322,15

1.152.241,48

Trade debtors- doubtful accounts

7.608.254,86

5.377899,67

73.774.488,46

86.173.641,05

(7.608.254,86)

(5.377.899,67)

66.166.233,60

80.795.741,38

Accumulated impairment losses

As of December 31, 2012 and 2011, the balance of trade debtors' doubtful debts was as follows: Description

Valor

Litigation claims

6.105.556,45

Delayed receivables

1.502.698,41 7.608.254,86

As of December 31, 2012 and 2011, the balance of prepayments was as follows:

15.

Description

2012

2011

Trade debtors - currente accounts

135.031,49

Other receivables As of December 31, 2012 and 2011, the balance of other receivables was as follows: 2012

2011

Interests

2.284.394,65

1.866.593,00

Works in progress

500.598,28

21.873,26

Services

9.111,80

312.490,54

Others

88.173,48

23.863,33

2.882.278,21

2.224.820,13

Other investement debtors

68.427.745,14

43.017.015,21

Other debtors

2.336.632,98

12.400.117,51

73.646.656,33

57.641.952,85

Description Debtors for income accruals

16.

Shareholders As of December 31, 2012 and 2011, the Shareholders' balance was as follows: Description

2012

2011

2.311.945,21

2.592.482,91

2.311.945,21

2.592.482,91

Current liabilities Others

In the shareholders' balance is accounted for a liability correspondent to the income tax amount payable to the shareholder in accordance with the special group taxation regime in which dst, s.a. is included.

Annual Report 2012

17.

State and other entities As of December 31, 2012 and 2011, the State and other entities' balance were as follows: 2012

2011

Corporate tax

18.360,01

10.124,54

Value added tax

1.099.096,37

1.786.242,58

Others

365.227,49

300.133,21

1.482.683,87

2.096.500,33

Income tax withholding

93.718,93

82.897,67

value added tax

3.117,75

Social security contributions

309.865,76

315.620,30

Others

7.459,84

6.833,71

414.162,28

405.351,68

Description Assets

Liabilities

18.

Deferrals As of December 31, 2012 and 2011, the deferrals' balance was as follows: 2012

2011

Future services already invoiced

113.820,72

291,84

Insurance

100.367,72

124.245,17

Rents

58.837,05

56.838,56

Interests payable

30.171,71

230.203,30

Other costs

77.646,99

5.563,17

380.844,19

417.142,04

Construction contracts

29.804.279,75

13.540.140,47

Other income

189.539,94

29.804.279,75

13.729.680,41

Description Deferred costs

Deferred income

19.

Share Capital The entity's share capital remained unchanged in the period, consisting of 12,500,000 shares, registered and nominative, with a nominal value of one euro. The share capital is totally realized. 20.

Other equity instruments As other equity instruments is accounted for additional paid-in capital transferred by Investhome – Construção e Imobiliária, S.A., worth 1.010.000 Euros, do not bear interest ,which the Board of Directors considers not qualifying as a liability. The return of additional paid-in capital depends on the resolution of the shareholders and can not be performed if the equity drops below the sum of the capital and legal reservess. 21.

Provisions As of December 31, 2012 and 2011, the provisions' balance was as follows: Description

2012

2011

Current litigation

25.491,69

Annual Report 2012

22.

Loans obtained As of December 31, 2012 and 2011, the balance of loans obtained was as follows: 2012

2011

Long term loans

4.102.721,54

5.563.525,73

Financial leases

704.538,47

1.962.509,68

Commercial paper

1.850.000,00

10.000.000,00

6.657.260,01

17.526.035,41

Short-term loans

4.141.159,41

4.504.177,92

Revolving credit

12.071.455,13

1.230.002,15

Financial leases

835.240,23

1.060.339,15

17.047.854,77

6.794.519,22

Description Non-current liabilities

Current liabilities

23.

Trade creditors As of December 31, 2012 and 2011, the balance of trade creditors was as follows: Description

2012

2011

Trade creditors

34.681.521,39

38.041.305,82

Trade creditors - bills of exchange

3.641.579,02

5.120.521,95

Trade creditors - invoices in conference

1.615.039,40

1.623.315,96

Trade creditors - with guarantee

4.126.579,60

4.296.489,28

44.064.719,41

49.081.633,01

As of December 31, 2012 and 2011, the balance of trade creditors' advanced payments was as follows:

24.

Description

2012

2011

Trade creditors

149.632,70

14.995,17

Trade creditors - intra-community

34.294,41

183.927,11

14.995,17

Other payables As of December 31, 2012 and 2011, the balance of other payables was as follows: 2012

2011

Staff costs

497.262,54

563.224,55

Investment trade creditions

56.003,46

44.741,75

Insurance

5.207,49

57.720,57

Staff costs

846.987,65

1.258.407,63

Interest

28.123,12

465.344,68

general and administrative expenses

498.624,73

613.158,08

other costs accruals

165.257,13

14.582,49

1.544.200,12

2.409.213,45

Deferred tax liabilities

103.553,09

Factoring

8.641.936,32

19.743.894,79

Others

494.886,31

2.508.810,40

11.337.841,84

25.373.438,03

Description Current liabilities

Creditors for costs acrruals

25.

Deferred tax assets and liabilities As of December 31, 2012 and 2011, the balance of deferred tax assets and liabilities was as follows:

Annual Report 2012

01.01.2012

Variation

31.12.2012

Balance

Tax

Balance

Tax

Balance

Tax

Trade debtors impairments

349.631,08

92.652,23

611.322,81

162.000,55

960.953,89

254.652,78

Provisions for other risks and charges

25.491,69

6.755,30

25.491,69

6.755,30

375.122,78

99.407,53

611.322,81

162.000,55

986.445,59

261.408,08

Description Deferred tax assets

Non-current

99.407,53

261.408,08

Current

Deferred tax liabilities NCRF 19 - Cosntruction contracts

26.

1.172.299,20

310.659,29

(390.766,38)

(103.553,09)

781.532,83

207.106,20

1.172.299,20

310.659,29

(390.766,38)

(103.553,09)

781.532,83

207.106,20

Non-current

207.106,20

103.553,11

Current

103.553,09

Sales and services rendered As of December 31, 2012 and 2011, the balance of sales and services rendered was as follows: 2012 National

Foreign

market

Good sales

577.469,01

Product sales

1.320.940,41

Services

Description

2011 Total

National

Foreign

market

577.469,01

572.005,08

1.320.940,41

1.220.337,09

121.114.440,78

109.537.926,39

199.885,00

109.737.811,39

123.012.850,20

111.330.268,56

199.885,00

111.530.153,56

27.

Total

Operational subsidies The entity was granted a subsidy from the Human Potential Operational Programme (â&#x20AC;&#x153;POPHâ&#x20AC;?), an organization at the guardianship of the Labour and Social Solidarity Ministry which is co-financed by the European Social Fund and by the Social Security Budget National Public Contribution, in the amount of 44,479.60 Euros. The total amount of the subsidy is accounted for in the operational subsidies' balance.

28.

29.

Description

2012

2011

State and other public entities subsidies - POPH

44.479,60

26.926,62

44.479,60

26.926,62

Gains and losses attributable to subsidiaries, associated and joint ventures As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Losses and expenses

(41.709,31)

(1.515.962,29)

Revenues and income

1.474.759,69

43.566,13

1.433.050,38

(1.472.396,16)

Own work As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Tangible fixed

2.960,00

13.411,46

2.960,00

13.411,46

Annual Report 2012

30.

Cost of goods sold The movements occurred in the cost of goods sold balance in 2012 was as follows: Goods

Description

Raw, subsidiary and

Total

consumable materials 1 Opening stocks

13.239,22

1.900.193,41

1.913.432,63

2 Purchases

89.251,05

18.145.254,97

18.234.506,02

3 Stock reclassification and regularization

4 Closing stocks

12.651,61

1.393.738,56

1.406.390,17

5 Cost of goods sold (5=1+2+3-4)

89.838,66

18.651.709,82

18.741.548,48

The movements occurred in the cost of goods sold balance in 2011 was as follows: Goods

Description

Raw, subsidiary and

Total

consumable materials

31.

1 Opening stocks

9.908,91

1.757.126,53

1.767.035,44

2 Purchases

101.194,15

19.228.109,74

19.329.303,89

3 Stocks reclassification and regularization

4 Closing stocks

13.239,22

1.900.193,41

1.913.432,63

5 Cost of goods sold (5=1+2+3-4)

97.863,84

19.085.042,86

19.182.906,70

General and administrative expenses As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Subcontractors

72.097.134,80

57.757.945,04

Electricity

224.475,67

209.592,33

Fuels

3.576.374,57

4.374.164,21

Water and other fluids

371.824,06

487.100,45

Tools

275.119,24

196.253,53

Office stationeries

30.094,27

40.152,07

Rents and rentals

3.916.841,12

4.906.357,26

Representation expenses

16.447,78

14.550,00

Communication

132.762,38

149.907,94

Insurance

632.476,90

619.381,30

Transport of goods

62.346,89

15.516,08

Travel and accomodation

631.810,92

617.905,30

Fees

102.610,15

67.191,82

Legal expenses

97.881,69

44.220,22

Maintenance and repairs

1.646.168,33

1.889.602,34

Advertising and promotion

127.687,67

171.214,61

Cleaning and hygiene

20.941,65

17.752,01

Security

283.007,95

296.562,84

Specialised labour

2.675.391,59

2.003.956,97

Others

631.476,85

653.604,79

87.552.874,48

74.532.931,11

32. Employees benefits, number of employees and staff costs 32.1. Number of employees Description

2012

2011

Board members

Employees

494

502

499

507

Annual Report 2012

32.2. Staff costs As of December 31, 2012 and 2011, this balance was as follows:

33.

Description

2012

2011

Salaries

8.017.917,98

8.313.962,99

Compensations

57.395,02

58.575,13

Social charges

1.569.133,80

1.558.747,61

Working and professional illness insurance

260.379,70

351.301,09

Social action costs

70.162,44

123.560,43

Other staff costs

100.156,90

130.658,27

10.075.145,84

10.536.805,52

Impairment losses in receivable accounts As of December 31, 2012 and 2011, this balance was as follows: 2012 Description

Trade debtors

34.

2011

Impairment

Reversals of

Total

Impairment

Reversals of

losses

impairment losses

losses

impairment losses

(2.535.573,16)

205.218,69

(2.330.354,47)

(1.615.556,72)

628.530,03 (987.026,69)

(2.535.573,16)

205.218,69

(2.330.354,47)

(1.615.556,72)

628.530,03 (987.026,69)

Provisions As of December 31, 2012 and 2011, this balance was as follows: 2012

35.

Total

2011

Description

Reinforcement

Reversal

Final balance

Reinforcement

Reversal

Final balance

Other provisions

2.059,25

Increase/decrease in fair value As of December 31, 2012 and 2011, this balance was as follows: 2012

2011

Description

Reductions

Increases

Total

Reductions

Increases

Total

Financial investments

(350,00)

12.910,78

12.560,78

(350,00)

12.910,78

12.560,78

36.

Other revenues and income As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Other operating income

2.200.519,22

3.547.045,04

Financial investments

3.642,50

Sale of non-financial investments

78.228,56

64.965,84

Exchange gains

2.595,07

10.276,61

Cash discounts

190.985,41

106.186,21

Prior years adjustments

85.029,55

134.048,65

Over estimated tax proovision

5.125,07

0,67

Investment subsidies

874.522,51

192.796,67

Tax refunds

2,31

5,41

Contractual penalities

251.577,26

429.418,02

Insurance claims

2.654,73

Compensation received from employees

1.200,46

Other extraordinary income

26.648,59

81.858,41

3.718.966,05

4.570.456,72

The balance of other operating income mainly includes logistics services, engineering, and provision of personal and shared services within the group. This item includes, also, an investment project achievement bonus (a QREN project of â&#x201A;Ź 874,522).

Annual Report 2012

37.

38.

Other losses and expenses As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Taxes and charges

92.406,11

136.533,41

Cash discounts

12.511,92

5.326,49

Sale of non-finacial investments

102.212,50

Prior years adjustments

561.149,20

62.713,61

Donations

52.261,89

170.902,62

Contributions

17.860,00

18.022,00

Underestimated tax provision

468,12

Excchange losses

5.676,72

877,06

Bank guarantee costs

479.212,66

274.795,71

Bill of exchange costs

1.119,32

1.937,79

Factoring costs

146.122,14

242.245,89

Confirming costs

8.312,91

41.141,77

Self-confirming costs

4.989,38

2.722,07

Fines and penalties

10.238,57

33.268,83

Damages on third parties

31.070,83

6.964,04

Banking services

188.584,73

143.023,28

Other losses and expenses

29.733,96

36.942,13

1.641.250,34

1.280.097,32

Costs and reversals of depreciations and amortization As of December 31, 2012 and 2011, this balance was as follows: 2012 Depreciation

Reversals of

depreciation and

and amortization

depreciation and

costs

amortization

costs

amortization

Tangible fixed assets

(1.630.396,05)

(1.960.933,44)

Intangible assets

(11.408,85)

(4.714,03)

(1.641.804,90)

(1.965.647,47)

Desription

39.

40.

2011

Depreciation

Reversals of

and amortization

Total

Interest and other similar revenues As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Contractual interests and intersts for delayed

1.831.415,82

1.164.402,15

Current loans interest

2.231.454,84

1.745.565,72

Bank deposits interest

9.937,89

86.499,02

Other short-term investments interest

66.815,05

56.562,27

Bonds interest

1.699,37

Other financial income

110.700,33

1.704.747,77

4.252.023,30

4.757.776,93

Interest and other similar expenses As of December 31, 2012 and 2011, this balance was as follows: Description

2012

2011

Bank loans interest

1.354.258,46

2.390.910,84

Factoring interest

816.588,53

897.140,49

Lease interest

61.956,00

84.472,75

Confirming interest

3.304,10

Self-confirming interest

38.099,17

33.874,66

Penalty interests and interests

92.762,88

24.973,15

Total

- (1.960.933,44) -

(4.714,03)

- (1.965.647,47)

Annual Report 2012

Other loans interest

443,91

Bill of exchange interest

1.089,41

233,50

Other interest

699.181,87

576.879,36

3.067.240,42

4.008.928,66

41.

Commitments related to obtained guarantees As of December 31, 2012 the entity had bank guarantees to replace bidders' bails amounting to 39,016,189 Euros, 4,051,153 USD and to 10,000,000 AKZ, as follows: National

International

euros

USD

AKZ

BCI/CGD

150.000

10.000.000

BAI ANGOLA

SANTANDER

10.281.835

997.500

BCP

3.721.895

BPI

6.721.852

BBVA

2.904.359

BARCLAYS

1.256.794

BES

2.705.192

CGD

3.384.312

2.065.978

BPN

1.765.887

BANIF

624.836

BANCO POPULAR

669.367

BANCO BIC

2.630.698

987.675

Others

2.199.163

Total

39.016.189

4.051.153

10.000.000

42.

Clearance date to financial statements disclosure The financial statements for the period ended December 31, 2012 were approved by the Board of Directors and authorized to disclosure on April 8, 2013. The annual report and financial statements presented herewith are translations of the annual report and financial statements originally issued in Portuguese in accordance with NCRF standards adopted by the Portuguese authorities and regulations. In the event of any discrepancies, the Portuguese version prevails. Braga, April 8, 2013 The Board of Directors, The Chartered Accountant, José Gonçalves Teixeira; Chairman Susana Maria Macedo Queirós Avelino Gonçalves Teixeira; Vice-Chairman Joaquim Gonçalves Teixeira; Member of the Board of Directors Hernâni José Gonçalves Teixeira; Member of the Board of Directors Teresa Gonçalves Gomes; Member of the Board of Directors

48 Legal Certification of Accounts

Annual Report 2012

Report and Opinion of the Sole Fiscal Auditor

50 Corporate Bodies

Annual Report 2012

Board of Directors Chairman: José Gonçalves Teixeira Vice-Chairman: Avelino Gonçalves Teixeira Member of the Board of Directors: Joaquim Gonçalves Teixeira Member of the Board of Directors: Hernâni José Gonçalves Teixeira Member of the Board of Directors: Teresa Gonçalves Gomes general Shareholders’ Meeting President: Teresa Gonçalves Gomes Secretary: Sara Cristina Styliano Supervisory Board (Sole Fiscal Auditor) Effective: Joaquim Guimarães, Manuela Malheiro and Mário Guimarães, SROC, represented by Dr. Mário da Cunha Guimarães (ROC n.º 1159). Substitutive: Dr.ª Maria Manuela Alves Malheiro (ROC n.º 916).

Annex to the Board of Directors Report

In compliance with the terms and for the effects of the number 5 of article 447th and number 4 of article 448th of the Trading Companies Code (“CSC – Código das Sociedades Comerciais”), approved by Law-decree number 262/86 of September 2, hereby is presented the list of shares regulated by such diplomas: 1. In light of the number 5 of the article 447th of the Trading Companies Code, as of December 31, 2012 the members of the Board of Directors were not owners of any of the company's shares. 2. The following shareholders to which is applicable the number 4 of the article 448th of the Trading Companies Code held as of December 31, 2012 at least one tenth of the company's share capital: i. - Investhome – Construção e Imobiliária, S.A. with 100% of the company’s share capital. Braga, April 8, 2013 The Board of Directors, José Gonçalves Teixeira; Chairman Avelino Gonçalves Teixeira; Vice-Chairman Joaquim Gonçalves Teixeira; Member of the Board of Directors Hernâni José Gonçalves Teixeira; Member of the Board of Directors Teresa Gonçalves Gomes; Member of the Board of Directors

Annual Report 2012

domingos da silva teixeira, s.a. rua de Pitancinhos, apartado 208 - Palmeira

travessa do Alecrim, n.ยบ 3, 2.ยบ andar

4710-911 Braga Portugal

1200-019 Lisboa Portugal

t. +351 253 307 200/1

t. +351 213 429 131

f. +351 253 307 210

f. +351 213 427 024