MOTA-ENGIL, SGPS, SA
2009 CONSOLIDATED REPORT & ACCOUNTS
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2 22 2 Highlights
Order book grows to €3.6 billion
14% growth of Sales and services rendered
EBITDA and EBIT margins of 14.3% and 8.1%
Net profit attributable to the GROUP in the sum of €71.7 million
Net debt amounts to €2,288 million, of which €1,107 million relate to debt without recourse
Turnover by Business Areas Ebitda by Business Areas
22% 79% 16% 34% 5% 44%
Engineering & Construction 37% Environment & Services Transport concessions 42%21%
thousand euros thousand euros 2009 % T 2008 % T 4Q09 % T 4Q08 % T
Turnover 2,131,245 14.0% 1,868,731 563,283 10.9% 507,820 EBITDA 304,355 14.3% (2.2%) 311,336 16.7% 82,909 14.7% (19.6%) 103,088 20.3% EBIT 172,358 8.1% (10.6%) 192,740 10.3% 43,084 7.6% (32.2%) 63,512 12.5%
Net financial income (115,455) (5.4%) 11.0% (129,759) (6.9%) (30,342) (5.4%) 24.9% (40,387) (8.0%) Net income/losses from equity method 50,568 2.4% 593.8% 7,289 0.4% (51) (0.0%) (100.5%) 10,641 2.1%
Income before taxes 107,472 5.0% 52.9% 70,270 3.8% 12,690 2.3% (62.4%) 33,766 6.6%
Net income 79,912 3.7% 100.9% 39,770 2.1% 4,748 0.8% (73.1%) 17,640 3.5% Attributable to: minority interests 8,174 0.4% (11.2%) 9,204 0.5% 950 0.2% (27.5%) 1,311 0.3% Group 71,738 3.4% 134.7% 30,566 1.6% 3,798 0.7% (76.7%) 16,329 3.2%
Martifer gains/losses 40,389 2,790 (2,471) 10,081 Group Net Income (ex Martifer) 31,349 1.5% 12.9% 27,776 1.5% 6,268 1.1% 0.3% 6,248 1.2%
EBITDA = Operating profit + depreciation + provisions and impairment losses Net debt = Debt – cash & cash equivalents
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Contents
Highlights 2
Main events in 2009 4
Message from the Chairman of the Board of Directors 7
Message from the Chief Executive Officer 8
Consolidated Management Report 10 Macroeconomic framework 10 Economic and financial review 13 Business areas 18 Engineering & Construction 18 Environment & Services 27 Transport Concessions 30 MOTA-ENGIL on the stock market 34 Risk management 37 Creation of value with and through People 41 Proposal for the appropriation of profits 44 The Outlook for 2010 45 Subsequent events 46 Closing remarks 47
Consolidated Financial Information 50
Consolidated Income Statement 51 Consolidated Statement of Comprehensive Income 52 Consolidated Statement of Financial Position 53 Consolidated Statement of Changes in Equity 54 Consolidated Statement of Cash-flows 55 Notes to the Consolidated Financial Statements 56
Report on Corporate Governance Practices 121
Annexes 162 Declaration under Article 245 of the Securities Code 162 Article 324 of the Companies Code 163 Article 447 of the Companies Code 164 Article 448 of the Companies Code 165 Decree-Law 411/91 165 Qualified Holdings 166
Supervision Reports 167 Statutory Auditors’ Report 168 Report and Opinion of the Statutory Audit Board 170 Auditors’ Report 172
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Main events in 2009
Conclusion of the acquisition of 24.19% of LUSOPONTE, when MOTA-ENGIL came to be the company's biggest equityholder, with 38.02% of its issued capital. LUSOPONTE holds the concession for two of the crossings over the river Tagus until March 2030.
Adjudication to a consortium including MOTA-ENGIL CENTRAL EUROPE (formerly MOTA-ENGIL POLSKA) of the construction contract for an expressway, with a motorway cross-section, in the city of Skarzyko, 180 kilometres from Warsaw. The contract is valued at €160 million, of which €140 million will be in the hands of MOTA-ENGIL POLSKA. The job is scheduled for completion in December 2010.
Adjudication of the Port of Paita Concession, located in northern Peru, in the Piura Province, to a consortium in which MOTA-ENGIL has a 50% stake (through its affiliates TERTIR, in Portugal, and TRANSLEI, in Peru). The initial investment required by the project amounts to about US$ 130 million, with a planned additional investment of about US$ 120 million for replacements.
Through a consortium in which it has a 19% stake (which will be reduced to 12% immediately after the close of the financing agreements and the actual start of the life of the concession), ASCENDI, the transport infrastructure manager held by the MOTA-ENGIL GROUP (60%) and the Espírito Santo Group (40%), signed a 30-year concession contract with the Slovakian State, which includes the design, construction, financing, operation and maintenance of 5 sections of the D1 Motorway in Slovakia. The total value of the project amounts to around €3.3 billion, which includes an investment of about €2.5 billion during the construction period. It is a motorway about 75 kilometres in length, including 168 bridges of a total length of 33.5 km and 4 tunnels of a total length of 7,300 m. MOTA-ENGIL ENGENHARIA is part of the construction consortium, with a holding of 20%.
ASCENDI signed a concession contract for the Marechal Rondon Leste highway in the State of São Paulo. This is ASCENDI's first operation on the Brazilian market, involving a total investment of about €780 million and a fixed payment of around €184 million to be made to the State of São Paulo during the first 18 months of the life of the contract.
Adjudication of the Rehabilitation of the Bay of Luanda to a partnership between MOTA-ENGIL ENGENHARIA and Soares da Costa (50/50). The job, at a total expected price of US$ 130 million, will last around 24 months.
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Signature of a Memorandum of Understanding on the incorporation of a company under Angolan law called MOTA-ENGIL ANGOLA, of which 51% will be held by MOTA-ENGIL ENGENHARIA and 49% by an Angola consortium headed by Sonangol.
Close of a contract for the design and construction of an expressway in Poland, between the Polish State and a consortium formed by MOTA-ENGIL CENTRAL EUROPE (formerly MOTA-ENGIL POLSKA) (which heads the group with 51%) and Strabag. The project consists of the design and construction of a section of the S8 Expressway to the northeast of Warsaw, between the cities of Jezewo and Bialystok over a distance of 160 km. The completion deadline is 36 months and the value of the project, net of VAT, amounts to approximately €123 million.
Close of a concession contract between a consortium in which MOTA-ENGIL has a 40% stake (through ASCENDI) and the Mozambican State, for the design, construction, financing, operation and routine maintenance of the New Bridge over the Tete River in Mozambique. It also involves the rehabilitation and maintenance of several highway infrastructures in the region, besides the operation and routine maintenance of the present Samora Machel Bridge in Tete. The life of the concession is 30 years and the investment planned for the construction period is €106 million. The construction will be undertaken by a group in which MOTA-ENGIL (though MOTA-ENGIL ENGENHARIA E CONSTRUÇÃO) has a 43.5% stake.
Adjudication of jobs in Poland totalling €111 million: Design and construction of a section of Expressway S8 between the cities of Wroclaw and Olesnica, with a length of 22 km (construction deadline of 31 months and a value net of VAT of approximately €87 million); Reconstruction of a roundabout at the intersection of two expressways in Krakow (project value net of VAT of approximately €24 million).
Award of the Pinhal Interior Sub-concession to a consortium headed by MOTA-ENGIL (42.08%). Located in the centre of Portugal with a length of approximately 520 km, the sub-concession includes two main highways – IC3 and IC8. The IC3 runs north-south linking the future Centre Motorway Sub-concession from the Coimbra interchange (IP3/IC2) to the A23 in the region of Torres Novas, and the IC8 is an east-west highway linking the A17 in the Pombal/Ansião zone back to the A23 near Vila Velha de Rodão. The concession has a life of 30 years involving an initial investment in the order of €1,429 million. Its remuneration is based on its availability for traffic. Of this investment about €210 million will be financed by own funds and the remainder by loans to be taken out from the EIB and commercial banks totalling some €1,200 million. The value of the construction contract is €958 million and MOTA-ENGIL has a 52.88% stake in the construction consortium.
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6 66 6 Formalisation of a partnership with a local company, that is the country's leader in the wire-drawing industry to set up, through MOTA-ENGIL ANGOLA, a wire-drawing factory in the province of Benguela. This project involves, for the first stage (to be concluded during 2010), an investment of more than US$15 million, and it will lead to the production of welded mesh and nails, which are in short supply in the region and have to be imported by the market on a recurrent basis. Further investments are planned for a later stage, designed to extend the product range.
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Message from the Chairman of the Board of Directors
To the Members of Mota-Engil, SGPS, SA,
When, a year ago, I addressed you in the 2008 Annual Report and Accounts, the global crisis was already affecting the greater part of the countries in which the GROUP operates, further hampering compliance with the objectives we had established for 2009. If to this we add the instability that continues to reign in Portugal, we have to conclude that 2009 had all the right ingredients to generate a crisis for most companies.
At the same time, I am convinced that the upturn of the economy is up to everyone, and it will be achieved only with dynamic, bold companies that set up daring goals. And that is exactly our profile.
And for this reason MOTA-ENGIL grew in 2009. In this world in recession it was able to generate profitability identical to that of previous years and to continue its policy of international expansion and diversification, thus meeting, in general, the targets it had set out in the 2013 AMBITION PLAN, both from the economic and financial standpoint and at the level of the organisation that prepares us for new challenges.
In 2010 we shall conclude the partnership in Angola through the incorporation of MOTA-ENGIL ANGOLA, our main partner being the Sonangol Group, and we expect to conclude the acquisition of a company in the Environment area in Brazil and a major construction concern in Mexico. We shall finalise the shut-down of some activities in non-strategic countries.
If to these goals we add, among others, the growth of the business in the Environment area in Angola, the financial close of the D1 Concession in Slovakia, the start-up of the 1st highway concession in Africa – the Zambeze Highway in Mozambique – and the conclusion of the process of transferring to ASCENDI our holdings in concessions both in Portugal and abroad, it is clear that, just as in 2009 we were able to return to growth on the path to our medium-term goals, so too shall we draw closer to these goals in 2010.
As I said last year, it is in times of crisis that one can make a difference, and it is this confidence of ours that provides us with a guarantee of a promising future. It is through belief in ourselves, in our programme and in the quality of our Staff that we shall continue to be successful.
António Mota
Chairman of the Board of Directors
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Message from the Chief Executive Officer
To the Members of Mota-Engil SGPS, SA,
In the wake of the financial crisis that began in 2008, the year under review was marked by the difficulty encountered in promoting the desired dynamics of economic recovery, to which must be added the uncertainty generated in what has been called the Real Economy.
For the MOTA-ENGIL GROUP the macroeconomic signs that influence us all have given rise to a pragmatic Vision, reflected in a spirit of Resisting in the Present to Gain the Future.
In this first year of implementation of the 2013 STRATEGIC AMBITION PLAN, and knowing how to interpret the economic and social surroundings, it was with firmness as to the course and strategy that we have defined for the future that we achieved yet another year of growth and creation of value for MOTA-ENGIL.
Along a path marked by the Vision, Rigour and Ambition that characterise us, it proved possible not only to maintain the profitability of the operations but also to consolidate the strategy of growth and business diversification at international level.
The introduction of a new organisational model based on the definition of three strategic geographic areas (Africa, Latin America and Central Europe) brought about for MOTA-ENGIL GROUP, in the first year of its implementation, results that allow us to be sure and confident as to the future of the organisation and its sustainability.
By way of example, the partnership agreement in Angola with the consortium of Angolan companies headed by Sonangol and the BPA Group, involving the setting up of MOTA-ENGIL ANGOLA, represents, in the history of the GROUP going back more than 60 years, an unprecendented deepening or the relationship with this country and of our focus on the future, to which must be added the consolidation of our role in other African markets, with emphasis on Mozambique and Malawi.
In Central Europe the constitution of MOTA-ENGIL CENTRAL EUROPE, based on an organisation different from the previous one, lends greater capacity to intervene, through the creation of synergies which, I am certain, will allow a the development of new business areas and our greater consolidation and implementation in these markets.
In Latin America I would underscore the constitution of MOTA-ENGIL BRAZIL in a country in which we have a great deal of belief, which will unquestionably allow us to increase our focus on a geographic area that we feel will contribute to the development of the economies of the region and to the very affirmation and growth of the MOTA-ENGIL GROUP.
In Portugal, in the various business areas in which we are engaged, we can state that 2009 contributed to the consolidation of our leadership and, in this way, strengthened the national base that underpins and drives the internationalisation process.
I would also take this opportunity to point out that in any MOTA-ENGIL GROUP company or business area the rationale is always directed at the profitability of the operations. For this reason, too, 2009 was marked by divestment in some operations as a result of their lesser profitability or non-strategic nature, a guideline that will continue to be firmly implemented in 2010.
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In a year of difficulties and uncertainties, I cannot but say a very special word about the team with which I co-operate on a daily basis and about the 19,302 employees that make up the MOTA-ENGIL GROUP. It is their daily commitment, their capability and their involvement with the GROUP and its objectives that allowed a continuation of the growth with which we close yet another year in the life of the MOTA-ENGIL GROUP.
In an endeavour to apply best practices in order to achieve excellence, we have again shown that in the Knowledge Era we rely on the best and it is only in this way that we can continue to be bold and to take up new challenges in the future.
Lastly, a word of thanks to the equityholders who, in a year of strong financial instability, strengthened their presence and their solidarity and, in this way, ensured stability through their expression of confidence in a GROUP that is increasingly strong and solidary, aggrandised both by its history and by its capacity to win the future.
Jorge Coelho
Chief Executive Officer
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10 1010 10 1. Macroeconomic framework
The international economy
During 2009 the spread of the 2008 financial crisis to the real economy, the increase of widespread uncertainty, the deterioration of prospects of growth and of global demand and the more restrictive conditions in extending credit contributed to the economic recession in most countries, especially during the first half of the year. As a result, on the one hand, of the quantitative easing and liquidity management measures and, on the other, of budget policies in support of the banking systems and of the relaunch of the economies implemented by the majority of countries towards the end of 2008 and early 2009, the tension felt during the second half by the international financial markets declined and the global economy began to show signs of recovery. This trend extended to most of the advanced economies and, particularly so, to the emerging economies of Asia.
Indeed, during the second half of 2009 the co-ordinated efforts of global ambit involving financial and budgetary stabilisation policies helped economic activity to show signs of recovery, following a first half that was very negative for most economies. These efforts prevented the collapse of the international financial system, minimised the negative impact of the crisis on the confidence of the economic agents and mitigated the consequences as far as the employment market were concerned. The response to the crisis took place on several fronts. In the financial field, measures were directed at stabilisation of the sector. Countries such as the United States, the United Kingdom, Ireland, Germany, Austria, Belgium and the Low Countries implemented operations to inject significant amounts of public capital into the banks and other relevant financial institutions. In the case of the European Union, the measures to support the financial sector involved the provision of guarantees by the States for operations involving the financing and refinancing of credit institutions, greater protection of deposits and treatment of impaired assets in the balance sheets of the banks.
The propagation of the financial crisis to the real economy and the nature and dimension of the consequent economic recession, gave rise, in the various countries, to a need to implement budgetary measures to stimulate economic activity. In the case of the European Union, these measures were defined within the framework of concerted action within the scope of the Plan to Relaunch the European Economy, agreed by the Council of Europe in December 2008. In this context, the recession was mirrored in every one of the European and OECD economies in a deterioration of the respective public accounts, not only as a result of the impact of the measures in response to the financial and economic crisis on the budget balance and on public debt, but also for effect of the working of the automatic stabilisers, through the reduction of tax revenue and social security contributions, and through greater spending on welfare, particularly the unemployment benefit costs. There was therefore a fast and significant deterioration of public accounts at global level. In 2009, the public accounts deficit is set to triple the 2008 figure for the European Union countries taken together, to stand at 6.9% of the GDP, according to the autumn forecasts of the European Commission, which compares with about 5% for the United States.
According to the IMF, the world's GDP will have declined 0.8% in 2009, though it returned a 1.3% growth in the fourth quarter of the year. The projections put forward for 2010 suggest a growth of the global GDP of about 3.9%. Indeed, global growth is slower than initially predicted, though it is advancing at different rates in the various regions as a result of the differing initial conditions and of the differing political responses. For example, the leading emerging economies of Asia are heading the process of global recovery and, in contrast, some of the advanced European economies and a number of economies of Central and Eastern Europe and of the Community of Independent States are more backward. Many of the developing countries of Sub-Saharan Africa slowed only slightly in 2009 and are in good shape to recover in 2010. In
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short, in most of the advanced economies the recovery is set to continue slow by comparison with past standards, while in many emerging countries and developing economies activity is set to be relatively vigorous, driven strongly by floating domestic demand.
Helped by the strengthening of economic activity, the financial markets recovered faster than expected. The equity markets recovered and bond issues reached record levels. However, the increase of bond issues did not compensate for the decline of the growth of bank credit extended to the private sector. Those sectors having limited access to the capital markets, that is, consumers and small and medium enterprises, could well continue to face credit restrictions. Till now, public loan programmes and guarantees have been fundamental to channelling credit to these sectors. Sovereign debt has been under pressure for several small countries that are fighting major budget deficits and huge public debt.
Commodity prices rose sharply during the start of the recovery, helping the growth of commodity producers in every region. To a large extent, this was due to the recovery of the emerging countries of Asia and to the improvement of financial conditions in global terms. The expectation is that commodity prices will rise even further owing to the strength of global demand, especially in the emerging economies. Nevertheless, this upward pressure is likely to be moderate. According to IMF projections oil prices are set to remain unchanged in 2010, with a slight upward revision in 2011 (to $82 a barrel).
As for inflation, though greater demand for raw materials will have contributed to the return of inflation rates to positive figures at the year-end, the still low degree of use of installed capacity will allow possible inflationary pressures to be contained. According to the IMF, in the advanced economies and in general, inflation rates are set to stand at zero in 2009, rising to 1.25% in 2010, with the effect of higher energy prices more than offsetting the decline of wage costs. In the emerging and developing economies the inflation rate expected for 2010 could amount to as much as 6.25%.
The immediate impacts of the crisis (including the credit-market squeeze, the sharp reversal of capital flows and the abrupt drop of the capital and currency markets that followed) are largely a thing of the past. Since March 2009 the equity markets in general recovered about half their losses, although the sustainability of the upturn still leaves much room for mistrust and there is still very considerable uncertainty as to the evolution of the international economy. To this factor of uncertainty one must add the possibility of an unco-ordinated and sudden withdrawal of the budgetary and financial stimuli, with no confirmation of any sustained economic recovery.
Nevertheless, the economic crisis that seemed to have slowed at the end of 2009 now seems to be fully active once again early in 2010, to the extent that threats are appearing of failure to fulfil sovereign debt obligations. In 2009 it was the banks, in 2010 the countries.
The Portuguese economy
The global economic crisis seriously affected the Portuguese economy, taking into account its strong economic and financial integration and its structural weaknesses and persisting frailties that condition productivity. The macroeconomic context was strongly marked by the propagation and evolution of the crisis, felt particularly in Portugal's major trading partners (Spain, Germany, France, Italy and the United Kingdom) which play an important role in the performance of our economy, especially because of the considerable reduction of foreign demand and the worsening expectations of the economic agents, with their impact, for example, on the performance of investment. In intra-annual terms and following the negative figure for the first half of 2009 (down 3.8% in real year-on-year terms), the Portuguese economy began to show signs of recovery, as a result of investment and, above all, of exports, in line with the recovery of foreign demand from countries of the Euro Area and of the USA. The GDP will have fallen by nearly 3 per cent in 2009 owing to the sharp drop of exports and investment. Despite a
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12 1212 12 substantial increase of the jobless rate to about 10 per cent, wage growth remained vigorous and, with the decline of productivity, unit labour costs rose once more. Some encouraging signs of adjustment are beginning to appear in that prices have fallen faster than in the Euro Area (although, in conjunction with the sharp real growth of wages, this has reduced company profits), households are saving more and the current account deficit has fallen slightly (to less than 10 per cent of the GDP). Meanwhile, since it can be expected that the weak growth potential of the economy will be compromised by the global crisis and by the high level of debt, and given the probability that monetary conditions will become more restrictive, it would seem that growth will be weak at about 0.5 per cent in 2010.
Following the notable budget consolidation achieved between 2005 and 2007, the global financial crisis led to stimulus measures totalling about 1.25 per cent of the GDP throughout 2008-09, generally in keeping with other countries of the Euro Area. Associated with the impact of the recession, the budget deficit will have increased to around 9% of the GDP in 2009, with debt standing close to 80 per cent of the GDP. Though no substantial alteration of budget guidelines is to be expected for 2010, the government intends to meet the goal of a deficit of 3 per cent of the GDP by 2013. This will require a structural consolidation of little more than 1 per cent of the GDP per year. As with most economies in 2009 Portugal's budgetary situation was clearly affected by the impact of the economic and financial crisis on the public accounts. The evolution of tax revenue and social security contributions very explicitly reflected the fast deterioration of the economy, particularly during the first half of the year, as a result both of the working of the automatic stabiliser mechanisms and also of the impact of the extraordinary measures adopted by the government in response to the economic crisis, involving support for households and economic agents.
The banking system came through the global financial crisis relatively unscathed, reflecting the existing strong points, such as limited exposure to toxic assets, the absence of a property bubble, retail-based business models and a solid regulatory and supervisory framework. Nevertheless, several vulnerabilities increased as the investment portfolios came to be affected and credit quality diminished, making it harder to respond to the considerable wholesale financing requirements, while the already high concentration of loan exposure increased further. The authorities took decisive measures to overcome these vulnerabilities, increasing the deposit guarantees, establishing facilities to recapitalise the banks and ensure their working, and recommended that all banks increase their Tie I capital ratios to 8 per cent. The agenda of the authorities already includes new proactive measures - including the introduction of minimum liquidity ratios - to be implemented within the context of development of the European and international financial architecture.
For 2010 one can expect a continuation of the gradual, moderate recovery of the Portuguese economy, mainly on the basis of more dynamic exports and of a stabilisation of domestic demand.
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2. Economic and financial review
Turnover Turnover GROUP Business areas 2,400
2,000
1,600 79% 1,200 16% 5% 800
400 1,402 1,869 2,131 Engineering & Construction Environment & Services
Million Euros Million 0 Transport concessions 2007 2008 2009
In line with previous years and with our expectations, and ahead even of the goals established by the internal reflection that led to the “AMBITION 2013” programme, the turnover of the MOTA- ENGIL GROUP grew 14.0% in 2009, surpassing €2.1 billion (2008: €1.9 billion).
This performance was possible thanks to the growth seen in the Engineering & Construction and the Environment & Services business areas, with growths of around 15% and 17% respectively, and to the unchanged turnover of the Transport Concessions area. It should be said, however, that the turnover of the Environment & Services area was positively affected by the alteration to the consolidation method used for the INDAQUA SUB-GROUP (in 2008 consolidated using the proportionate consolidation method and, following the acquisition at the end of 2008 of another 7.2% of the issued capital of INDAQUA – INDÚSTRIA E GESTÃO DE ÁGUAS, SA, providing control over this sub-group, the full consolidation method came to be used).
The GROUP's turnover is broken down as follows: Engineering & Construction €1,693.9 million (2008: €1,466.7 million), Environment & Services €333.5 million (2008: €285.8 million) and Transport Concessions €117.5 million (2008: €117.0 million).
The mix of turnover was unchanged compared to 2008 and the relative weights were similar in both years.
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Ebitda Ebitda GROUP Business areas 350
300 22% 250 34% 200 44% 150
100
50 248 311 304 Engineering & Construction Environment & Services
Million Euros Million 0 2007 2008 2009 Transport concessions
Despite this quite good performance of turnover, the EBITDA generated in 2009 (€304 million) was 2% lower than in 2008 (€311 million), despite the good performance seen during the first three quarters of the year. At the root of this phenomenon was the exceptional performance of EBITDA during the final quarter of the previous year, with emphasis on the Engineering & Construction and Transport Concessions areas, which was not replicated in 2009.
With regard to the evolution of the EBITDA mix, the performance of the Engineering & Construction area led to a slight increase of its relative weight, now accounting for 44% of the operating profit before depreciation and impairment (2008: 42%). The contribution of the Environment & Services area amounted to 22% of the EBITDA (2008: 21%), with the Transport Concessions area accounting for 34% (2008: 37%).
Chapter 3 of this report provides a detailed review of the results and business undertaken by each GROUP area in 2009.
Capex 2007 Net debt excluding non-recourse 2008 2009 1,400 E&C 1,200 22% 1,000
800
600 Tc E&S 61% 17% 400
200
MillionEuros 0 1Q 2Q 3Q 4Q
The consolidated net investment in 2009 amounted to €516 million (2008: €274 million), with special emphasis on the increase of the holding in LUSOPONTE (€86 million), while the remainder of the Transport Concessions area's investment (€234 million) is connected with the investments in the highway concessions (with a focus on the Perote-Xalapa Motorway in Mexico, at €75 million, the Douro Interior Concession, at €64 million, the Greater Lisbon Concession, at €41 million, and the Rondon Leste Concession in Brazil, at about €28 million).
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Of the remainder of net investment the Engineering & Construction area accounted for 58% (€114 million), of which €43 million involved replacement investment. Investment in the Environment & Services area focused on TAKARGO's re-equipment plan, involving a sum of approximately €16 million, and on the water-supply and sanitation concessionaires, with emphasis on Matosinhos and Vila do Conde, accounting for approximately €32 million.
The growth mentioned in the preceding paragraphs is clearly the result of an investment policy directed at sustainable growth which, despite the natural emphasis given to the Transport Concessions area, retained the balance between the other business areas throughout 2009. Thus, investment in maintenance was up 14% at €77 million (2008: €68 million), while investment in expansion rose by over 110%, with the business areas contributing the following amounts: Engineering & Construction €71 million (2008: €80 million), Environment & Services €69 million (2008: €54 million) and Transport Concessions €305 million (2008: €74 million).
Total net debt in 2009 amounted to €2,288 million, reflecting an upward trend compared to the previous year (2008: total debt of €1,852 million), in step with the growth seen in investment and driven, insofar as working capital requirements are concerned, by the very poor situation of the economy.
Corporate debt (with recourse) amounted to €1,181 million (2008: €903 million). Of this sum about €713 million were allocated to the GROUP's operating activity (2008: €586 million), the remainder (€382 million) being in respect of investment in associates, which does not contribute to the EBITDA, and non-core assets (2008: €317 million).
Additionally, GROUP debt also includes debt without recourse (contracted within the scope of project finance business, not therefore enforceable on the equityholder), originated by the consolidation of the motorway, water and basic sanitation, and port concessionaire companies. In December 2009, the amount of debt without recourse stood at about €1,107 million (2008: €949 million). The debt without recourse of the Transport Concessions area amounted to €1,026 million (2008: €917 million) and that of the Environment & Services area to €81 million (2008: €88 million).
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Net Financial Income Net Income
-140 35.0 -120 30.0 -100 25.0 -80 20.0 -60 15.0 -40 10.0 -20 5.0
107 130 115 30.1 27.8 31.3 MillionEuros Million Euros Million -0 0.0 2007 2008 2009 2007 2008 2009
2007: excluding the non-recurrent capital gain on the Public Offering of shares in MARTIFER. 2008 & 2009: excluding MARTIFER's gains/losses.
Financial charges made a negative contribution to GROUP net profit in the sum of €115 million (2008: a negative sum of €130 million), an improvement of 11% compared to 2008, which includes a 12% reduction of net interest charges. Though debt rose when compared to 2008, market interest rates fell significantly, leading to the said improvement of financial charges.
As a result of this operating and financial performance, the 2009 consolidated net profit amounted to €79.9 million, compared to €39.8 million in 2008. Of this sum the part attributable to the equityholders of the MOTA-ENGIL GROUP totals €71.7 million (2008: €30.6 million), while the part attributable to non-controlling interests is €8.2 million (2008: €9.2 million). Excluding MARTIFER's results, the consolidated net profit attributable to the GROUP amounted 2009 to €31.3 million, compared to €27.8 million in 2008.
200 180 160 140 120
100
MI
Financial IRC
80 EBIT EM 60
40 Euros
20 Net Income Net
Million 0
Gains & losses on associate companies (EM in the chart) made a positive contribution to net profit in the sum of €50.6 million (2008: €7.3 million). This figure essentially comprises the GROUP's share of the profits of the MARTIFER GROUP (€40.4 million) and the gains achieved by some subsidiaries operating in Angola, which again generated quite good profits (€10.2 million).
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Backlog E&C 3,600 E&C Angola Central 12% 3,200 E&C Europe Other 2,800 25% 12% 2,400 2,000 E&S 1,600 10% 1,200 E&C 800 Portugal & Spain 400 41% 1,502 1,900 2,639 3,556
MillionEuros 0 2006 2007 2008 2009
The sustainability of the growth seen in 2009, in line, as said, with the GROUP's strategic horizons, is clear to see in the strong growth of the order book in recent years. As of December 2009 the order book stood at €3.6 billion, and our expectation is that during 2010 this sum may well continue to increase, thus contributing to the growth of the GROUP's turnover. In 2009 emphasis is given to the contribution made by the contracts secured within the scope of highway concessions in Portugal (Douro Interior and Pinhal Interior Concessions) and also in Slovakia (the D-1 Motorway Concession D1).
The internationalisation strategy, the public investment plans to stimulate the recovery of the economies of the various countries in which the GROUP operates, as well as the extension of the diversification and of the cross-selling to some of these countries, will constitute the bases for the growth of the order book, underpinning the growth announced for 2010, while also opening open up the way to meeting the medium-term forecasts that were announced.
As usual, the portfolio figures presented do not include any contribution by the highway concessions business, the water and sewage concessions (which now have greater weight in the consolidated turnover) and the port terminal operation concessions. Thus the order book for Environment & Services has to do solely with contracts secured in the Waste and Multi-services segments.
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3. Business areas
Engineering & Construction
Turnover Ebitda 140 1,800 1,600 120 1,400 100 1,200 80 1,000 800 60 600 40 400 Euros 20
200 1,049 1,467 1,694 92 130 134 Million Euros Million
0 Million 0 2007 2008 2009 2007 2008 2009
The MOTA-ENGIL GROUP turnover in Engineering & Construction amounted to €1,694 million in 2009 (2008: €1,467 million), an increase of 15% compared to 2008.
The growth was essentially the result of the good performance of the segments in Portugal (14% growth) and in Angola (40% growth) compared to 2008. The Angolan market continues to grow at a good rate and, in 2009, this market generated turnover in the sum of €421 million, compared to €301 million in 2008.
On the other hand, the conditions ill-suited to the development of the business in Central Europe seen at the end of 2008 as a result of the global economic crisis and of the currency crisis in this region lasted into 2009. The GROUP's turnover in this region fell by 11% to €292 million (2008: €330 million), largely owing to the negative performance of the currencies of Eastern Europe against the euro.
Under operating profitability there was a slight reduction of the EBITDA margin (7.9% in 2009, compared to 8.8% in 2008). Nevertheless, and partly due to the good performance of turnover, the EBITDA did not decline and, rather the contrary, its value increased by about 3.4% over the 2008 figure (€129.7 million).
Portugal
The year under review was one of intensification of the effects of the international financial crisis, and the construction industry in Portugal continued to see a reduction of output in 2009, as had already been seen in 2008.
In Portugal, Engineering & Construction business has undergone a severe crisis for several years, with weak demand, excessive installed capacity and shrinking margins. Influenced by a profoundly negative economic background, the industry again recorded a downturn of its business in 2009, and the negative trend experienced over the past 8 years deteriorated further, leading to the worst crisis it has seen in recent decades. Most of the indicators show a decline of construction output volumes of around 9%, the worst result seen in the recent past.
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Nevertheless, the production indices for civil engineering and public buildings other than residential performed better than those for the private buildings segment in which the downturn of activity was very sharp. The private residential buildings construction segment in Portugal was the hardest hit and the one that fell most in terms of production, given the characteristics of the economic and financial crisis that struck the world in 2008 and had serious consequences in the country. During 2009 this segment suffered a decline of nearly 38% of new construction area licensed, a magnitude that clearly reflects the lack of demand for new homes. This has led to successive reductions of activity in this area, which, since it is labour intensive, has given rise to an increase of the jobless numbers in the industry. Indeed, ever since 2002 production of residential buildings has decreased, and in 2009 the decrease was even greater (down 22%), to an extent such that the accumulated decrease stands around 50%.
The budget stimulus measures announced by the government at the end of 2008, based on the relaunch of construction activity, were insufficient, in general terms, to overcome the effects of the crisis of the construction in Portugal. However, in the matter of the production indices for non-residential public buildings, which include hospitals, schools and multipurpose buildings, public investment increased substantially throughout 2009, particularly in the volume of work undertaken in the modernisation of schools, involving a sum of more than €600 million. During 2009, the evolution of this segment was nearly always upwards, falling only during the closing months and in January 2010, when, despite the very reasonable increase, it was not as great as that seen up to mid 2009. This reversal of the trend of production of non-residential public buildings will be temporary in that, in January alone, Parque Escolar EPE (responsible for school building and maintenance) issued public calls for tenders in respect of stage 3 of the schools modernisation programme in the sum of more than €300 million for jobs to be concluded by the year-end.
In the civil engineering works segment (urbanisation and transport links works), production volumes increased very reasonably, especially during the first half owing to the two elections held up to October. From then on, the trend of the production index reversed, and the variation recorded for the three months to January 2010 was lower than the figure for the three-months to January 2009. This evolution is not surprising in that 2009 was an exceptional year in terms of use of public investment, both as an instrument to attenuate the effects of the global financial crisis and because of the two elections that were held. This reversal of the production trend of civil engineering works is set to continue in the short term, taking into account the target set up for 2010 of containment of the budget deficit through a reduction of public investment (the PIDDAC programme) at every ministry, as provided for in the 2010 State Budget.
Even so, the 2010 State Budget includes several measures, though they will have little repercussion on the construction industry. Perhaps the biggest impact will be in respect of the start-up in 2010 of an Urban Rehabilitation Support Programme, under which the State will provide financial support for rehabilitation works involving residential buildings. The goal of the programme is to multiply by five the average number of homes refurbished with State support, providing an important stimulus to the economy and to employment. The government also announced the implementation of the Urban Development Funds, in the wake of the constitution of a Participation Fund in the sum of €130 million, the management contract of which has already been signed with the European Investment Bank. These funds will be an essential instrument in financing the urban rehabilitation operations called for in the Urban Rehabilitation Legislation. The intention is also to approve the Strategic Housing Plan, to foster the refurbishment of deteriorated residential buildings and the rental market, centring in 2010 on two strategic axes: (i) rehabilitation of run-down residential buildings; and (ii) development of the urban rental market. The goals include support for owners to refurbish vacant properties to be rented, rehabilitation works involving public residential buildings, and the creation of mechanisms to increase confidence in the rental market, especially though the creation of a housing mart and an assessment of the conditions required to create rent insurance.
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20 2020 20
In this connection, the South Bank Arc Project will be developed. It will be the most important integrated spatial planning, urban and environmental conversion and refurbishment and regional development measure to be undertaken in Portugal. It involves an ample number of investments, with a special focus on the land of the municipalities where the Chemical Industry Park, the National Steelworks and the Margueira Shipyards used to operate, though also embracing the whole of the territory of the Arc, between Almada and Alcochete. The strategy inherent in the Project is based on the urban conversion of the three areas, through a process of environmental rehabilitation and urban revitalisation, anticipating and adapted to the planned major public investments and to their impact on the territory (with particular emphasis on the New Lisbon Airport and the Third Crossing of the Tagus).
With regard to transport infrastructure, the 2010 State Budget proposes, in the highway plan, to go ahead with the national Highway Plan and, consequently, with the concessions plan entrusted to Estradas de Portugal. In this connection, and in keeping with the Budget, the Centre Motorway (IP3, IC2 and IC12) will be adjudicated and a start is to be made to the process of preparation for the issue of calls for tenders for the new highway concessions: West Route, Ribatejo, Vouga, Serra da Estrela, and International Tagus, in respect of which about 60% of the investments will involve rehabilitation and modernisation of existing highway networks interconnecting district capitals in the interior of the country, though not with a motorway cross-section. The annual maintenance and repair plan will also be approved for the existing highway network and the inspections will be performed associated with the Engineering Works Management System.
In the airport sector the aim is to go ahead with the maintenance and enlargement works involving the existing structures and to make a start to the process of contracting, designing, building, financing and operating the New Lisbon Airport.
In railways, the construction will continue of the county's structural corridors and junctions within the trans-European transport network, including a series of contracts related with the high- speed train (track and stations).
This notwithstanding, it is with optimism that the GROUP views 2010, and it expects that it will come to be a year of improvement of this cycle of recession in the construction industry in Portugal.
The turnover of the business area in Portugal amounted to more than €791.5 million. Despite the negative evolution compared to the previous year, operating profitability returned a fairly good performance, partly the result of the pricing policy of several industry operators. Taking these difficulties of the domestic market into account, allied to the dynamism of the process of internationalisation of the construction business, the weight of the domestic market again fell as a proportion of the total turnover of this business area: in 2009 the Portuguese market accounted for just 47% of the GROUP's construction business (2008: 49%).
In the Engineering & Construction area the GROUP was involved in the following outstanding jobs in Portugal:
Highway Infrastructures - EN205 Bypass at Arco de Baúlhe; - IC30 - Greater Lisbon; - Vitorino Nemésio Highway - Terceira Island; - Douro Interior Concession (start of Section 1- IP2 Vale Benfeito/Junqueira; Section 6- IC5 Murça/Pombal; and Section 7 – IC5 Pombal/Nozelos).
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Railway Infrastructures - Red Line of the Lisbon Underground (tunnel and Saldanha and São Sebastião stations); - Porto Light Railway - Gondomar Line, Dragão Stadium/Venda Nova Section; - South Tagus Light Railway infrastructures.
Airport Infrastructures - Lisbon Airport - ALS Operational Fuel Group; - João Paulo II Airport - Enlargement of Platform W.
Sanitation and Urban Waste Infrastructures - Lordelo and Chaves Wastewater Treatment Plants; - Mafra Anaerobic Digester Plant.
Port Infrastructures - Cruise Liner Terminal at Ponta Delgada; - Design & Construction of the Port of Aveiro Cereal Terminal.
Hydraulic, Hydroelectric and Other Infrastructures - 3rd Section of the Cova da Beira Canal – DGADR; - Odivelas Hydraulic Circuit, - Pedrógão Intake Pipe, Faro Block - Alvito/Pisão Irrigation Scheme, - Serpa Block for EDIA - Covilhã Irrigation Network for DGADR; - Design/ construction of the wastewater, storm-water and water-supply networks in the municipality of Matosinhos, for INDÁQUA MATOSINHOS; - Design/ construction of the wastewater, storm-water and water-supply networks in the municipality of Matosinhos, for INDÁQUA VILA DO CONDE;
Engineering Works and Tunnels Infrastructures - In Madeira, the Vasco Gil/Fundoa Connection at Altitude 500 and the Câmara de Lobos Expressway.
Buildings for Commerce and Tourism - Dolce Vita at Amadora, Espaço Guimarães, Fórum Sintra and Fórum do Barreiro.
Public Buildings - Construction of the INL - International Nanotechnology Laboratory and of the Champalimaud Foundation's Centre for the Unknown.
Buildings for Offices and Housing - Construction of the East Tower and of the Planinova Building in Lisbon and of the Ancoradouro undertaking in Porto.
Hospital Buildings - Construction of the CUF Hospital in Porto.
Sports and School Infrastructures - Rehabilitation of 11 Secondary Schools under the Parque Escolar renovation programme.
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The Engineering & Construction area is currently involved in the following countries of Central Europe: Poland, Czech Republic, Slovakia, Hungary and Romania.
The effects of the global crisis were felt later in the countries of Central Europe, that is, in 2009. The emerging countries of Central Europe, whose GDP growth in 2008 stood between 3% and 7% (even so, rates lower than in 2007) and had lent a certain dynamism to the European economy, returned a sharper decrease of their domestic product in 2009 than the other European countries. The exception was Poland, which managed to return a growth of 1.2% in 2009. The GDP of the other countries decreased to rates of between -8% (Romania) and -4.8% (Czech Republic).
Poland was the only economy of Central Europe (and of the European Union) not to undergo recession in 2009. Its balanced macroeconomic structure, less dependent on the outside world than other Eastern European countries, and the remarkable resilience of its internal activity, combined with currency flexibility, allowed the Polish economy to return a growth of 1.2% in 2009 (5% in 2008). Consumption and investment continue to be the main engines of the economy, which also benefited from a solid banking system, not significantly exposed to “toxic” financial products. On the other hand, no overheating was noted in the residential market nor was there excessive leverage in the private sector. In terms of the future, Poland is expected to continue to grow above the average of the neighbouring economies of Eastern Europe (about 1.8% in 2010 and 3.2% in 2011), essentially due, on the one hand, to the effects of the expansionist economic policies – monetary and budgetary – that continue this year and, on the other, to the recovery of exports and to a greater inflow of capital into the country against a background of a gradual strengthening of the global economy. In domestic demand terms, private investment is expected to continue robust, benefiting from the structural funds provided by the European Union and by the European football championship in 2012 (organised jointly by Poland and the Ukraine), which have driven investment in infrastructure.
To this end, and despite the difficulties in the other countries of Central Europe, the GROUP will continue to focus on this geographic area, with a natural emphasis on Poland, and will continue to be on the watch for any new business opportunities to be exploited in these countries, particularly if they provide opportunities to generate synergies with our traditional construction activities. Though against the background of crisis, the growth of real-estate related business continues to be one of MOTA-ENGIL's objectives. The list of countries that have most housing needs is undoubtedly headed by Poland, but it also includes Romania, Hungary, the Czech Republic and Slovakia. In all these countries the GROUP is present and in all it has interests in real-estate projects under way.
The year under review marked the coming into operation of the MOTA-ENGIL CENTRAL EUROPE project, reflecting the transition of a multi-pole mode (based on autonomy by company and country) to a Corporate Management model, with an integrated strategy of transnational ambit, materialised through the incorporation of a company called MOTA-ENGIL CENTRAL EUROPE, SGPS, SA. The company now set up brings together all the holdings in the Engineering & Construction area in Central Europe and it operates in two distinct business segments through separate companies.
Construction This business is carried on through MOTA-ENGIL CENTRAL EUROPE, SA, a company incorporated under Polish law resulting from the change of name of MOTA-ENGIL POLSKA SA. This sub-holding company now owns all the holdings in the construction companies in Central Europe, namely : MOTA-ENGIL CENTRAL EUROPE ČESKÁ REPUBLIKA (formerly SEFIMOTA), in the Czech Republic; MOTA-ENGIL CENTRAL EUROPE SLOVENSKÁ REPUBLIKA (formerly MOTA-ENGIL SLOVAKIA), in Slovakia; and MOTA-ENGIL KRUSZYWA, which operates in the Aggregates sector in Poland.
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Real Estate Management is in the hands of MOTA-ENGIL REAL ESTATE MANAGEMENT (formerly MINVEST POLSKA). All holdings in real-estate companies are now in the hands of MOTA-ENGIL CENTRAL EUROPE SGPS.
The corporate restructuring has consolidated the strategic objectives established for Central Europe:
harmonisation of management processes and platforms, providing MOTA-ENGIL's best practices able to drive the use of the best resources for the best opportunities, through the multinational, multidisciplinary management teams;
establishment of an organisation based on two main pillars: support/ staff areas geographically connected in the form of a matrix; and customer-oriented local business units;
promotion of a single MOTA-ENGIL brand and image in Central Europe;
creation of a MOTA-ENGIL Culture in Central Europe fostering meritocracy, performance assessment, alignment of the vision of the management staff, career management and talent development.
The year under review was marked by the following awards of major contracts:
Poland: Design and construction of a section of the S8 Expressway between Wroclaw and Olesnica in the sum of €87 million;
Poland: Design and construction of a section of the S8 Expressway between Jezewo and Bialystok in the sum of €123 million (leader of a consortium with Strabag, with a 51% stake);
Slovakia: Design, construction, financing, maintenance and operation of 5 sections of the D1 Motorway between Dubna Skala and Turany-Hubovae Ivachnova, between Janovce and Jablonov, and between Fricovce and Svinic, a contract signed between the Slovenske Dial’nice consortium and the Slovakian states, awaiting the financial close. The volume of construction of this project involves a cost of €2,500 million, and MOTA-ENGIL has a 20% holding in the construction consortium.
In terms of projects under way and jobs inaugurated during 2009, the following warrant particular emphasis:
Poland: In progress, the construction of the S7 Skarzysko-Kamienna –Wystepa Expressway over a distance of 13.7 km, including the construction of two Interchanges and 29 Engineering Works. The value of the contract is €160 million. This job is advancing at a good rate and is scheduled for conclusion in October 2010, by the contractual deadline of 21 months
Poland: Opening to traffic in August 2009 of a section of the A4 Motorway between Wykroty and Krzyzowa, over a distance of 29.4 km, in which MOTA-ENGIL carried out 24.5% of the works in consortium with Strabag and Heilit Woerner. The value of the contract is more than €158.5 million.
Poland: Inauguration, also in August 2009, of the project for the reconstruction of National Highway 7 between Zabornia and Chyżne, in the sum of €45 million. This
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24 2424 24 section constitutes the final part of the connection between Poland and the border with Slovakia.
Turnover achieved in 2009 in Central Europe amounted to €292 million, whereas in 2008 the figure had been €330 million (an 11% reduction). In EBITDA terms, the decrease of turnover was not offset by the slight increase of the margin (1.6% in 2009, compared to the figure of 1.5% for 2008), and for this reason it fell slightly in 2009 (€4.6 million in 2009 compared to €4.9 million in 2008). It should be mentioned that the businesses that are currently undergoing reduction of activity in Central Europe (the construction segment in Hungary and Romania) generated a negative EBITDA in 2009 in the sum of €7.2 million, essentially the result of the shutdown of operating activity and of the costs of demobilisation and of jobs under warranty.
Despite the economic crisis that is expected to continue throughout 2010, the markets of Central Europe (with the exception of Hungary and Romania) continue to be among the GROUP's major targets since they still provide prospects of major growth. Moreover, the MOTA- ENGIL GROUP has been in business in Central Europe since 1997 and therefore, over more than ten years, it has acquired valuable experience and knowledge of the markets, which, while becoming more and more attractive, are also seen to be demanding and competitive. It is therefore with optimism, though moderated by the international crisis, that the GROUP views the activity planned for 2010 in these markets: sharp growth of turnover ensuring at all times a sustained improvement of operating margins.
Africa
The Engineering & Construction area also operates in the following countries: Angola, Mozambique, Malawi, São Tomé e Príncipe and Cape Verde.
In Africa the impact of the global recession was initially felt by the economies more integrated into the international financial markets (such as South Africa) and then by the oil-exporting countries (including Angola), as well as by those courtiers that export industrial goods (such as Morocco and Tunisia). However, the strong recovery of international trade flows and the stabilisation of financial conditions during the second half of the year led to a very visible recuperation of activity within the main African economies, and to an improvement of growth prospects for 2010 and 2011. The main Portuguese-speaking countries in which MOTA-ENGIL does business, such as Angola, Mozambique and Cape Verde, are set to return growths of around 10%, 5% and 4% respectively, in 2010. Above all, the economic dynamism expected of Africa in 2010 is likely to be the result of an improvement of the commodities markets, partly underpinned by the emerging countries of Asia. Besides the contribution of raw materials, emphasis is given to the continuation of high rates of investment, to the recovery of inflows of capital from abroad and to the increase of public investment efforts directed at infrastructure, in many cases in a situation of financial stability. In the specific case of Angola, the acceleration of economic activity in 2010 is likely to be based on an increase of oil revenues and on more dynamic non-energy sectors (construction, services, agriculture, etc.), associated with a recovery of capital inflows from abroad, as well as a recuperation of investment.
Indeed, despite the very considerable rates of economic growth in recent years (31.2% in 2008), Angola was not immune to the effects of the global economic crisis that began to be felt more significantly toward the end of 2008, with the sharp fall of oil prices in the international markets. Indeed, this commodity fell to a low of US$ 28.9 toward the end of December, compared to a peak of US$ 145 in July 2008. Oil makes the most significant contribution to the Angolan GDP and, in 2008, it accounted for over 50% of the total, falling to 40% in 2009. The sharp slowdown of the Angolan economy was confirmed throughout 2009, interrupting a cycle of two-digit GDP growth since 2004. In 2009 it is believed that the growth of the economy will have been around zero, though nevertheless better than initial expectations. This good surprise may be the result of several factors, among which the sharper recovery of oil prices over the
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past year, oil output slightly higher than predicted (more than the quota defined by OPEC) and the relatively good performance of the non-oil sector which, in recent years, has gradually made its mark as a result of the efforts directed at diversification of the economy.
For 2010 it can be expected that the Angolan economy will return to better growth rates, at around 7%. This will reflect the expected recovery of oil prices on the international market, possibly to levels above US$ 65/barrel, although no remarkable improvement is expected in terms of production volumes (not only because of OPEC constraints but also because Angola is already producing close to its maximum potential). The non-oil sector is also set to be more dynamic in 2010, especially in a year favourable to investment by private domestic and foreign investors. The agreement recently reached with the IMF, involving the grant of a loan in the sum of US$ 1.4 billion is important to the rebalancing of external accounts and also an important means of financing the investments required in the non-oil sector, leading to a reduction of the country's dependence on oil and making it less vulnerable to international shocks. In terms of the monetary policy for 2010, it can be expected that the National Bank of Angola will maintain the guidelines of recent years, particularly with regard to price stability. Inflation is expected to stand around 13% (2009: 12%), though considering the pattern of the recent evolution, the acceleration of the monetary aggregates and the devaluation of the currency, this figure seems hard to achieve.
The MOTA-ENGIL GROUP has been present in Angola since it was set up, and it is one of its natural markets. The fact is that the country's economic evolution has brought about market alterations and new competitors, though the GROUP, taking advantage of its historic position and its excellent resources, has shown that it cannot only adapt to this evolution but, and above all, glean advantages from it. The Angolan branch of MOTA-ENGIL ENGENHARIA is equipped with modern technical means and human resources of recognised skills, and it sees in the stability of the public institutions and in the modernisation of the apparatus of the Angolan State opportunities to continue to carry on its business in a professional, efficient manner. Emphasis is also given to the good relations that the GROUP has and promotes with the Angolan public sector both as a contractor and as a partner in local associate companies. In 2009 a memorandum of understanding was signed with an Angolan consortium headed by Sonangol involving setting up MOTA-ENGIL ANGOLA, of which 51% will be held by MOTA-ENGIL ENGENHARIA, which will take over the assets of the branch and its other holdings on the Angolan market. In 2009 attention is also called to the award to a consortium in which MOTA-ENGIL has a 50% stake, to the rehabilitation of the Bay of Luanda, involving a predicted sum of US$ 130 million.
Despite the global crisis, the start of 2010 in the Angolan market is viewed with some optimism and the expectation of the GROUP is that it will be able to secure greater growth, underpinned by a robust order book (now standing at €426 million) that is being further consolidated. On the other hand, MOTA-ENGIL intends to diversify its business in Angola and, for the purpose, is analysing projects in the energy, environment and logistics areas. Additionally, two industrial businesses are being developed in the construction area, NOVICER engaged in ceramics and FATRA in wire-drawing. Engineering & Construction business in Angola had an excellent year in 2009, with turnover amounting to €421 million, a growth of 40% compared to last year (2008: €301 million). In operating profit, too, 2009 was a very good year, with the EBITDA margin standing at 14.4%.
In the other African markets in which the MOTA-ENGIL GROUP does business, the year under review was also quite good, in Malawi in particular, where the GROUP has strengthened its presence, especially in the area of highway construction and maintenance, having an order book worth more than €180 million at this time. This was possible thanks only to the recognised prestige that has been built up by its position in the marketplace, governed by correctness and competence in execution.
In 2009, in Mozambique, the consortium headed by MOTA-ENGIL concluded the biggest engineering job in the history of the country since its independence, the bridge over the
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26 2626 26 Zambezi River. The outlook for the future is encouraging in this market, and MOTA-ENGIL expects to invest in 2010 double the 2009 figure and to consolidate its weight in the country. Also in 2009, the concession contract was closed for the design, construction, financing and routine maintenance of the new bridge, a concession that calls for the construction of the new Tete Bridge and the recuperation and operation of the entire highway network linking Mozambique with Zambia, Malawi and Zimbabwe during a period of 30 years.. The construction of the new bridge will cost approximately US$ 100 million. At this time MOTA-ENGIL has an order book in this country in the sum of €100 million and is in a good position to win the call for tenders for the construction of the bridge between Maputo and Catembe, on the south bank of the city, a job valued at €200 million. Despite the slowdown in 2009 (7.5% growth), this country has returned fairly interesting growth rates and the GDP increased by an average of 7.5% from 2004 to 2008. The IMF expects a gradual recovery over the coming years until the growth potential of 6.5% is reached.
Though limited by the size of the respective markets, business in São Tomé e Príncipe and in Cape Verde demonstrates the GROUP's ability to take advantage of opportunities that arise in the Portuguese-speaking countries of Africa.
The African business segment increased its turnover in 2009 by 38% to €515 million (2008: €372 million). The performance of operating profit was very good, with EBITDA standing at €75 million, compared to €51 million in 2008.
America
The Engineering & Construction area does business in the following countries of the Americas: USA, Mexico, Peru and Venezuela.
In Peru the Group continues to make its mark, particularly in earthmoving business. The year under review was yet another good one for the business in this country. The stability of the market allowed us to continue to develop the growth strategy and to enhance our local associate. It is to this end that we are continuing to take steps to diversify the business through a move into the property development market.
In Mexico, a start was made to the construction of the “Perote-Banderilla y Libramiento de Xalapa" motorway, calling for an investment in the construction area of about €179 million.
The American business segment decreased its turnover in 2009 by 13% to €42 million (2008: €49 million). The performance of operating profit was also negative, with EBITDA standing at €1.1 million, compared to €4.0 million in 2008.
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Environment & Services
Turnover Ebitda 360 320 70
280 60
240 50 200 40 160 30 120 20 80 40 10
249 286 333 59 66 66
MillionMillionEurosEuros Million Euros Million 0 0 2007 2008 2009 2007 2008 2009
It should be said, however, that the turnover of the Environment & Services area was positively affected by the alteration to the consolidation method used for the INDÁQUA SUB-GROUP (in 2008 consolidated using the proportionate consolidation method and, following the acquisition at the end of 2008 of another 7.2% of the issued capital of INDÁQUA – INDÚSTRIA E GESTÃO DE ÁGUAS, SA, providing control over this sub-group, the full consolidation method came to be used). The business grew by some 17%, with turnover standing at €333 million (2008: €286 million).
In operating profit, this business area did not perform as well. The EBITDA remained at €66 million, but the EBITDA margin slipped from 23% in 2008 to 20% in 2009.
The waste business segment includes the companies engaged in the collection and processing of solid urban waste and used oils, concentrated in SUMA. In 2009 the waste business returned a growth of 11%, its turnover up from €101.4 million in 2008 to €112.1 million.In EBITDA terms the margins deteriorated (23.2% in 2009, compared to 27.2% in 2008). For this reason, despite the increase of turnover, the EBITDA fell by about 6% compared to last time, to stand in 2009 at €26.0 million.
SUMA, with a share of about 49% of the privatised market, currently serves 50 municipalities and a population of over 2.1 million in the field of solid urban waste collection and urban cleaning. With regard to waste management and treatment SUMA operates in 43 municipalities, serving a population of 1.3 million. Given the market share achieved, we are aware that we shall only be able to continue to grow at this rate if the rate of privatisation of this market, mostly operated by public entities, accelerates. So, aware of this limitation in national terms, the growth option will inevitably involve internationalisation of the business. The GROUP has already defined at its strategic markets Angola, Central Europe and Brazil, where it is already involved through other business areas. It should be mentioned that, through related company VISTA WASTE, several contracts have already been awarded in Angola and that the prospects are encouraging. The operation in Poland is not yet developing as desired, but the GROUP is still on the lookout for growth opportunities through acquisitions. In 2010, the GROUP expects to finalise the acquisition of a company in the waste segment in Brazil.
Despite the present state of the economy, we are of the conviction that 2010 will allow us to keep up the growth of this segment, though at a lesser rate and with considerable pressure on operating margins.
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28 2828 28 Water
The Water business segment includes the water supply and sewage concessions of the municipalities of Fafe, Santo Tirso, Trofa, Santa Maria da Feira, Matosinhos and Vila do Conde, controlled by subsidiaries of the INDÁQUA SUB-GROUP. It also includes a public-private partnership with the municipality of São João da Madeira, for the management of the public municipal water supply and wastewater and storm-water collection service in the municipality. INDÁQUA serves more than 190,000 customers out of a total population of 560,000. It is the biggest private Portuguese operator in the field of municipal water concessions.
The water segment made the biggest contribution to the increase seen in the Environment & Services area (turnover of €48.0 million, compared to €13.9 million in 2008), largely the result of the start-up of the Vila do Conde concession and of the public-private partnership with the municipality of São João da Madeira, as well as of the alteration of the method consolidating the INDÁQUA SUB-GROUP, now consolidated using the full consolidation method following the acquisition early in 2009 of a holding providing the control of this group. In terms of EBITDA, the margin increased (33.6% in 2009, compared to 32.2% in 2008), generating a sum of €16.1 million in 2009.
Logistics
The Logistics segment embraces all the GROUP's activities in the logistics sector (operation of road-rail terminals, integrated logistics and carriage of goods by rail) and ports sector (operation of marine terminals). The GROUP's move into the Logistics and Ports sectors has put it in a leading position in the Portuguese port operations market, while the company also provides wide-ranging logistics integration services and is outstanding as the first private Portuguese operator to enter the carriage of goods by railway sector.
The Logistics segment continued to account for majority of this business area With a growth of 2% over 2008, the segment generated turnover in the sum of €145.8 million (2008: €143 million). In EBITDA terms the margins deteriorated significantly (16.5% in 2009, compared to 23.9% in 2008). For this reason, despite the increase of turnover, the EBITDA fell by about 30% compared to last time, to stand in 2009 at €24.0 million (2008: €34.2 million). This performance was in line with expectations for 2009, mainly in terms of port activities and rail transport, owing to the present crisis, which naturally causes a downturn of international trade and a reduction of consumption by people and companies. The move into this business segment has been frankly successful, opening up excellent prospects for the strengthening of the focus of the MOTA-ENGIL GROUP on the various businesses linked to the logistics value chain.
In 2009, we would underscore the adjudication, for a 30-year period, of the Port of Paita concession located in northern Peru to the Terminales Portuarios Euroandinos concession in which the MOTA-ENGIL GROUP has a 50% stake through its subsidiaries TERTIR in Portugal and TRANSLEI in Peru. The port of Paita, which currently handles 140,000 TEUs per annum and has a handling capacity of 200,000 tonnes of general and bulk cargoes, includes a 300-metre wharf. Besides the operation of the port's facilities, the concession also calls for the construction and operation of a container terminal of the following characteristics: 300 m of quays, a depth of 13 m and an open-air storage are of 12 hectares. The initial investment required by the project amounts to about US$ 130 million, with a planned additional investment of about US$ 120 million for replacements. The future capacity of the terminal will be 500,000 TEUs/year.
With regard to rail transport, TAKARGO RAIL, following its award of a carriage of goods by rail operator licence in 2006, made a start to its business in 2009. In less than two years the first private carriage of goods by rail operator surpassed CP (the state railway operator) in the international service and it currently operates along three corridors that link Lisbon with Saragossa, Tarragona/Barcelona and Madrid. Its position as an Iberian operator led the
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company to acquire and have approved all its rolling stock operating in Portugal and Spain. In order to implement the established strategy a new company was set up, IBERCARGO RAIL, in which the COMSA Group headquartered in Madrid has a 50% stake. The new company handles all the business between the two countries. It has undertaken its first direct rail transport between the two countries and this has put IBERCARGO at the forefront of Iberian intermodal transport. Today TAKARGO has its own locomotives, wagons and engine drivers, involving a total investment of more than €40 million. The locomotives are among Europe's most powerful, able to pull trains of more than 1,200 tonnes.
Multi-Services
In the vast area of Services, the MOTA-ENGIL GROUP has a number of companies involved in the provision of services in fields in which their subcontracting is seen to be a flexible and effective alternative. Of the companies that make up this area, mention is made of MANVIA and ALMAQUE, subsidiaries that operate in the of industrial and building maintenance segments.
Another area of operation is landscape architecture and the design, construction and maintenance of green spaces and golf courses through VIBEIRAS and ÁREAGOLFE and, more recently VBT in Angola, the latter marking a move into the Angolan market through an operation involving a local partner. Mention is also made of the involvement in the car-park concessions market through two companies, EMSA and PARQUEGIL, which have parking facilities under concessions in various Portuguese cities.
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30 3030 30 Transport Concessions
Turnover Ebitda
140 140
120 120
100 100
80 80
60 60
40 40
20 20
106 117 117 95 117 105 MilionsEuros of
MilionsofEuros 0 0 2007 2008 2009 2007 2008 2009
The turnover of the Transport Concessions area amounted to €117 million (2008: €117 million), EBITDA standing at about €105 million (2008: €117 million).
With the exception of the BEIRAS LITORAL E ALTA concession, all the others returned a growth of turnover when compared to the same period of 2008. Though it continued to be of the greatest importance to the business in this area, this concession, generating an individual turnover of €132.1 million in 2009, underperformed last year's figure (2008: €144.1 million) owing to the reduction of the tariffs under the "SCUT" scheme (tolls not charged to users), which more than offset the 1.4% increase of traffic.
In profitability terms, the consolidated EBITDA margins remain very high when compared with those of competing national and international groups, though they were lower than in the previous year. The EBITDA margin stood at 89% in 2009, compared to 100% in 2008, although the 2008 figures include non-recurrent items. The EBITDA margin adjusted for this effect would have been 86%.
The total value of the assets managed by MOTA-ENGIL TRANSPORT CONCESSIONS amounts to around €5 billion, although only €1.8 billion are reflected in MOTA-ENGIL's consolidated balance sheet as a result of the use of the proportionate consolidation method. The Transport Concessions area contributed a loss to the GROUP results in the sum of €6.8 million in 2009, contrasting with the profit in 2008 in the sum of €1.6 million.
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At present, the MOTA-ENGIL TRANSPORT CONCESSIONS portfolio is as follows:
Year Project Type Holding km Written State back
In Portugal North Concession Real tolls 35.11% 175.0 2029 In operation Costa de Prata Concession Virtual tolls 36.09% 109.6 2030 In operation Beiras Litoral e Alta Concession Virtual tolls 36.09% 172.5 2031 In operation Greater Porto Concession Virtual tolls 36.09% 55.5 2032 In operation Greater Lisbon Concession Real tolls 36.09% 23.0 2036 In operation Douro Interior Concession Availability 45.93% 242.3 2039 Construction Lusoponte Real tolls 38.02% 19.5 2030 In operation South Tagus Light Railway n.a. 18.09% 20.0 2032 In operation
In Mexico Perote-Banderilla Motorway Real tolls 30.00% 59.6 2038 Construction
In Brazil Marechal Rondon Leste Real tolls 40.00% 415.0 2039 In operation
ASCENDI
In the wake of the strategic understanding between the MOTA-ENGIL GROUP and the Banco Espírito Santo Group, formalised in 2006 through the Business Co-operation Agreement directed at jointly pursuing their businesses in the field of transport concessions infrastructure, a corporate vehicle – ASCENDI – was set up at the end of 2007, with a view to bringing together all their equityholdings in the concessionaire companies owned by both operating in transport infrastructures. The process of transferring the portfolio of highway and railway concessions to this company is expected to be concluded in 2010, for the purpose of which the necessary authorisations are being obtained from the proper authorities.
LUSOPONTE
At the start of 2009 the process of acquisition of 24.19% of the issued capital of LUSOPONTE – CONCESSIONÁRIA PARA A TRAVESSIA DO TEJO, SA, was finalised. With this acquisition MOTA-ENGIL has become the biggest equityholder of this concessionaire, with a holding of 38.02%. LUSOPONTE holds the concession for the two River Tagus Crossings up to March 31, 2030.
D1 Motorway - Slovakia
Through a consortium in which it has a 19% stake (which will be reduced to 12% immediately after the close of the financing agreements and the actual start of the life of the concession), ASCENDI signed a 30-year concession contract with the Slovakian State, which includes the design, construction, financing, operation and maintenance of 5 sections of the D1 Motorway in Slovakia. The total value of the project amounts to around €3.3 billion, which includes an investment of about €2.5 billion during the construction period. It is a motorway about 75 kilometres in length, including 168 bridges of a total length of 33.5 km and 4 tunnels of a total length of 7,300 m. The financial close of this project is expected to take place by the end of the first half of 2010.
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32 3232 32 Ov erall Agreement with the State
Accompanying the Portuguese State in its strategic goal of altering the model of financing the Highway Sector, negotiations were held in 2009 with a view to adapting various Concession contracts of the concessionaire companies owned by AENOR to the new reality, directed at making EP - Estradas de Portugal independent of the State Budget and at general implementation of the user-payer principle.
In general, the agreement calls for the following:
The concessionaires involved would essentially be remunerated on the basis of the availability of the service, introducing the corresponding carriageway- availability, with the toll income paid by the users reverting to Estradas de Portugal, EP.
The concessionaires' availability-remuneration would be generic, fixed within a framework that does not take into account the set of economic and financial assumptions of the concession contracts in force
The requests for financial rebalancing made by the concessionaires pending at the time would be definitively settled for a sum fixed at about €155 million.
To acquire legal and economic efficacy, the overall agreement materialising the aspects set out above will also have to secure the prior consent of the banks that form the syndicates that finance the concessionaires and of the European Investment Bank, and would be subject to legislative and contractual measures, particularly in respect of the alteration of the “Bases of the Concession” and of the respective concession contracts, the conclusion date of which cannot be established at this time.
Marechal Rondon Leste Concession (Brazil)
During 2009, ASCENDI signed a concession contract for the Marechal Rondon Leste highway in the State of São Paulo This concession, ASCENDI's first operation on the Brazilian market, is for a highway of about 415 km in length, involving a total investment of about €780 million and a fixed payment of around €184 million to be made to the State of São Paulo during the first 18 months of the life of the contract. Through OPWAY, ASCENDI bid as part of a joint venture with the CIBE Group, an investment company of the Bertin Group, and with the Equipave Group, which manages 1,700 km of motorways in Brazil.Of the consortium that has been set up (Concessionária Rodovias do Tiete) 50% is held by the CIBE Group, 40% by ASCENDI and 10% by the Leão & Leão Group. ASCENDI's investment in the concessionaire's equity capital amounts to €37 million.
Douro Interior Concession
The contract for the Douro Interior Sub-concession was signed on November 24, 2008. In November 2009, Estradas de Portugal SA (“EP”), in the capacity of Concessor, was notified by the Court of Auditors of the decision to refuse its approval of this contract. Both the Sub- concessionaire and EP appealed against the decision proffered for the plenary of the Court of Auditors, an appeal that has suspensive effect until the final decision is proffered. The decision to refuse approval, notice of which was given in November 2009, is not definitive and the Sub- concessionaire has been instructed by EP to continued with the work.
At the start of 2010 negotiations began between EP and the Sub-concessionaire with a view to putting right the alleged flaws pointed out by the Court of Auditors, an agreement having been
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closed to amend the sub-concession contract, which has recently been submitted to the Court of Auditors. The final decision of the Court of Auditors is now awaited. Under the law, the decision must be proffered within 30 days, though the deadline is suspended in the event of the Court of Auditors requesting additional clarification or information of EP..
Pinhal Interior Concession
The Pinhal Interior sub-concession was adjudicated in 2009 to the consortium headed by MOTA- ENGIL (42.08%). Located in the centre of Portugal with a length of approximately 520 km, the sub-concession includes two main highways – IC3 and IC8. The IC3 runs north-south linking the future Centre Motorway Sub-concession from the Coimbra interchange (IP3/IC2) to the A23 in the region of Torres Novas, and the IC8 is an east-west highway linking the A17 in the Pombal/Ansião zone back to the A23 near Vila Velha de Rodão. The concession has a life of 30 years involving an initial investment in the order of €1,429 million. Its remuneration is based on its availability for traffic. Of this investment about €210 million will be financed by own funds and the remainder by loans to be taken out from the EIB and commercial banks totalling some €1,200 million. The value of the construction contract is €958 million and the construction consortium is headed by MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO (52.88%).
National Highway Plan
With regard to expectations for 2010 in the matter of the National Highway Plant (PRN) and, consequently, of the realisation of the concessions plan in the hands of Estradas de Portugal, we should point out that the 2010 State Budget calls for the conclusion of the call for tenders of the Auto-Estradas do Centro Sub-concession. The call for tenders for this highway concession had already been issued, but the fact that the appraisal of the bids by the appraisal committee had been negative gave rise to the issue of a new call for tenders towards the end of 2009. This sub-concession comprises a total of 379 kilometres, covering the districts of Aveiro, Coimbra and Viseu. Of these 379 kilometres, 192 are already built and will be rehabilitated and/or improved by the winning consortium, while the remaining 187 kilometres will be a green-field operation having a motorway cross-section and tolls. The consortium called Estradas do Mondego, headed by ASCENDI with a 36.91% holding, submitted a new bid on February 4, 2010, having presented the lowest net present value (NPV) for the carriageway availability of all the bidders in the call for tenders. The negotiations for the presentation of the BAFO (best and final offer) are expected to take place during the first half.
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34 3434 34
4. MOTA-ENGIL on the stock market
The downward trend of the leading European stock markets that began in 2008 in the wake of the widespread crisis of the financial markets started to be reversed towards the end of the 2nd quarter of 2009, proving clear signs of an upturn. This upturn allowed the major European stock exchanges to return a positive performance for the year, with the EURONEXT100 index up 25% in 2009. The PSI20 index returned an even more expressive gain of about 33% (the loss had been even greater in 2008). The performance of the MOTA-ENGIL shares continued to outperform the main market indices, closing 2009 sharply higher (a gain of 68%), compared to the sharp decline in 2008 (down 54%). Following the year's minimum market capitalisation of €432 million in March, the shares appreciated sharply up to October, when the market capitalisation peaked at €899 million.
The performance of the shares throughout the year is as follows:
Performance Performance 1st Half 2009 2nd Half 2009 1st Half 2008 2nd Half 2008 total 2009 total 2008
Mota-Engil shares 37% 30% 68% -28% -26% -54%
PSI-20 12% 21% 33% -35% -16% -51%
EURONEXT 100 0% 26% 25% -23% -22% -45%
The evolution of the share price is shown in the following chart:
Evolution of share price 2009
195%
175%
155%
135%
115%
95%
75%
09 09 09 09 09 09 08 09
09 09 09 09 09
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Jul
Oct
Apr
Jan Jun
Feb Mar
Aug Sep Dec Dec Nov May
ME PSI20 EURONEXT 100
According to the valuation performed by the financial analysts, the intrinsic value of the shares still has ample room to increase, with the MOTA-ENGIL price targets standing between €4.1 and €5.4 (the share price as at December 31, 2009 stood at €3.938).
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The variation of the price was in step with the performance of the European companies operating in the sector, as can be seen in the following chart:
190%
170%
150%
130%
110%
90%
70%
50%
09 09
09
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08 09 09 09 09
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ME VINCI HOCHTIEF FERROVIAL EIFFAGE FCC
The liquidity of the shares fell by 14% compared to 2008, about 124 million shares having been traded. This decrease was mainly felt during the third quarter of the year, in line with the evolution of market liquidity, particularly in respect of companies having lower market capitalisation.
The evolution of liquidity is shown in the following charts:
Evolution of liquidity of shares Evolution of liquidity of shares
180 45 160 40 140 35 120 30 100 25 80 20 60 15 40 10 20
Millionsharesof 5 Millionsharesof 0 0 2006 2007 2008 2009 1Q 2Q 3Q 4Q
2007 2008 2009
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36 3636 36 In 2009 the main events impacting on the share price were as follows:
Event Date
Announcement of the conclusion of the acquisition of the shareholding in Lusoponte 5-Jan-09
Presentation of 2008 results 31-Mar-09 Announcement of the outlook for 2009
Announcement of the adjudication of the Porto of Paita concession in Peru 1-Apr-09
Announcement of the signature of the concession agreement for the D1 Motorway (Slovakia) 15-Apr-09 Announcement of the signature of the concession contract for the Marechal Rondon Leste (Brasil) 23-Apr-09 highway Dividend payment 15-May-09 Presentation of results for the 1st quarter of 2009
Announcement of the adjudication of the Bay of Luanda Rehabilitation contract 16-May-09
Announcement of the signature of a Memorandum of Understanding on a partnership in Angola 16-Jun-09 Announcement of the signature of a contract for the design and construction of the S8 13-Jul-09 Expressway (Poland) Presentation of results for the 1st half of 2009 31-Aug-09 Announcement of the signature of the concession contract for the New Tete Bridge in 22-Oct-09 Mozambique Announcement of the intention to adjudicate the Pinhal Interior Sub-concession 2-Nov-09
Presentation of results for the first nine months of 2009 20-Nov-09
Announcement of an investment in Angola in the wire-drawing industry 30-Dec-09
In 2010, the following subsequent events occurred that impacted on the share price.
Event Date
Announcement of the notification of the Provisional Adjudication of Pinhal Interior Sub-concession 10-Jan-10
Announcement of the signature of a partnership agreement in Angola 24-Feb-10
The company paid out a dividend of 11 cents per share during the first half, providing a dividend yield of 3.4% on the average share price during the year.
The Company's Board of Directors is pleased to present in this report its proposal for the appropriation of profits calling for the payment of a dividend of 11 cents per share.
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5. Risk management
The central aim of risk management is to create value through processes involving management and control of uncertainties and threats that could affect the Group's subsidiaries, based on a perspective of long-term continuity of operations.
Exposure to risk by any subsidiary of the MOTA-ENGIL GROUP must at all times be subordinated to its strategy and be limited to and accessory to the business of each company, to allow them to pursue and meet the goals established for the various business areas.
The boards of each of the GROUP's business areas are responsible for the Risk Management process, which generally involves a number of sequential stages or phases that are repeated cyclically, detailed as follows:
Risk identification: determination of the risks to which the organisation is exposed and of the level of tolerance of exposure to such risks; Risk measurement: quantification of risk exposures, and preparation of basic reports to support decision-taking; Risk control and management: definition of the measures to be taken in facing risks; Implementation of the established risk-management measures; Evaluation of the risk-management process and, if necessary, realignment and redefinition of strategies.
The MOTA-ENGIL GROUP has several committees of a consultative nature whose mission is to monitor matters of great importance to its sustained development, bringing to bear an independent, objective vision in support of the decision-taking process of the MOTA-ENGIL, SGPS, SA Board of Directors.
The main duties and responsibilities of the Audit and Risk Committee are to appraise the GROUP's investment and business-risk policies and its projects, to examine and issue opinions on investment or divestment plans, to issue opinions on moves into and out of business areas, and to monitor major financial and corporate transactions.
Therefore the main risks to which the GROUP is subject, which are now addressed, are covered by the in-house reports of this committee, in conjunction with the reports or communications issued by staff having corporate functions, with emphasis on Legal Services, Management Control, Corporate Finance and Human Resources Development.
The mission of the Audit and Risk Committee is to support the management of the MOTA-ENGIL GROUP in strengthening the means and methods of action employed in internal control and in anticipation of the business risks. The Committee lent continuity to the new cycle of activity begum in 2008, through the Audit and Risk Office, whose resource structure is specifically directed at the following functions:
risk identification and appraisal, suggesting the establishment of acceptable risk levels in the light of the established management goals; issue of opinions as to alterations of the degree of risk inherent in the business of the MOTA-ENGIL GROUP; minimisation of operational deficiencies and losses, strengthening the capabilities of the MOTA-ENGIL GROUP in the identification of potentially damaging effects, in risk appraisal and in putting forward responses, thus reducing unforeseen costs or losses; identification of transverse risks within the GROUP, auditing implementation of the corporate policies and good practices of the MOTA-ENGIL GROUP;
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38 3838 38 issue of prior opinions on risks inherent in the acquisitions and/or disposals defined by the MOTA-ENGIL GROUP; conformity audits in the development of processes and activities in every materially relevant area and/or company of the MOTA-ENGIL GROUP.
After the table of risks of the materially relevant companies of the MOTA-ENGIL GROUP had been drawn up, internal audits were performed at several Group companies, the aim being to instil efficiency in the use of the means of internal control and to improve business processes at each one of the companies. This methodology will ensure a dynamic process in risk monitoring at each operation of the MOTA-ENGIL GROUP, promoting adequate measures in the light of the perceived risk, keeping in step with its evolution.
Financial risk management
The MOTA-ENGIL GROUP, like other companies and businesses, is exposed to a variety of financial risks, and special attention is warranted in respect of the interest-rate risk, the exchange-rate risk, the liquidity risk and the credit risk.
This set of financial risks is the result of its business and induces uncertainties as to its ability to generate cash flows and returns adequate to the remuneration of equity.
The GROUP's financial-risk management policy endeavours to minimise possible adverse effects arising from the characteristic uncertainty of the financial markets. This uncertainty, which is reflected in various aspects, requires special attention and concrete, effective measures in the management of the financial risks.
Financial risk management activity is co-ordinated by the Corporate Finance Division with the support of the Group's Management Control and it is undertaken in accordance and in compliance with the guidelines approved by the Board of Directors, with the Investment and Risk Audit Committee providing a consultative role, delegated on it by the former, though the Boards of each business unit of the MOTA-ENGIL GROUP retain full responsibility.
The GROUP's stance in respect of financial-risk management is a cautious, conservative one that uses derivatives instruments to hedge risks as and where advisable, always from the standpoint that they are related to the company's normal, routine business. No positions are ever taken in derivatives or other financial instruments of a speculative nature.
The various types of financial risks are interrelated and the various management measures, even though specific to each, are largely related. This interrelation contributes to the pursuit of the same common goal, that is, reduction of the volatility of cash flows and of expected returns.
Interest-rate risk
The aim of the interest-rate management policy is to optimise the cost of borrowings and to ensure that financial charges are not excessively volatile, that is, to control and mitigate the risk of incurring losses as a result of variations of the interest rates to which the GROUP's debt its indexed, most of which is denominated in euros.
In recent years several business areas have realised various interest-rate hedging operations to fix or limit interest rates on loans, particularly those indexed to the Euribor, involving contracting swaps or other structured derivatives instruments at zero cost, which contribute, and will continue to do so, to the reduction of the sensitivity of financial charges to possible interest-rate increases.
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The rationale underlying these operations is the pursuit of the goal of realising and/or maintaining hedging for about 30% of the GROUP's corporate debt, usually issued at an indexed or variable rate.
Exchange-rate risk
The aim of the exchange-rate risk management policy is to reduce the volatility of investments and transactions expressed in foreign currency (currencies other than the euro), contributing to lesser sensitivity of the Group's profits to currency fluctuations.
The exposure of the MOTA-ENGIL GROUP to exchange-rate risks is largely the result of the fact that several of its subsidiaries do business in various markets, particularly in Angola and Central Europe, where the business accounts for an increasingly important part of the GROUP's turnover.
In exchange-rate risk management terms the aim is, as and where considered possible or advisable, to carry out natural hedging of the value of the exposure by means of financial debt expressed in the foreign currency associated with the values at risk. Where this is not possible or advisable, other operations are contracted or realised on the basis of structured derivatives instruments in a reasoning of cost minimisation.
Liquidity risk
The aim of liquidity-risk management is to ensure that the funds available from time to time within the GROUP and its subsidiaries are sufficient to cover in a timely manner all the financial commitments entered into. It is therefore a matter of ensuring that the GROUP has the financial means (balances and financial inflows) required to meet its commitments (financial outflows), as and when they fall due.
Ensuring very considerable financial flexibility, essential to the management of this risk, has been provided by the following management measures:
establishing a partnership relationship with the financing entities, ensuring their financial support for the GROUP from a long-term viewpoint during the good and the bad times that cyclically mark every business; contracting and taking out surplus short-term credit lines, to act as a liquidity reserve, available for use at any moment; carrying out thorough financial planning per company, involving the preparation and periodic review of cash budgets, allowing a prediction of future cash surpluses and shortfalls, and optimisation and integrated management of the cash flows between GROUP subsidiaries; financing medium- and long-term investments, matching the debt maturities and the repayment plan of the liabilities arising from the loans, with the capacity of the project or company to generate cash flows; keeping up a debt structure for the companies, with medium- and long-term loans standing between 60% and 70%, thus reducing their dependence on more volatile short-term funds, creating a certain immunity to episodic factors affecting the financial markets; ensuring staggered maturity of the debt over time and continuing to extend the average maturity of the debt to make it more consistent with some of the long-term assets held by the GROUP; and searching for diversification of financing sources and instruments.
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40 4040 40 Efficient liquidity-risk management is intimately related with the adequate management of the other financial risks, complementing the pursuit of this goal, while ensuring that cash flows are realised on schedule and in the planned amounts.
Credit risk
The aim of the credit-risk management policy is to ensure that the GROUP's subsidiaries effectively collect amounts owed by third parties by the deadlines established and/or negotiated for the purpose.
The GROUP's exposure to credit risk has to do, in particular, with receivables arising in the normal course of its various businesses, in which special attention is warranted by activities involving provision of services and/or retail sales.
Mitigation of this risk is preventively achieved prior to exposure to the risk, making use of entities that provide credit-risk information and profiles, providing the grounds for decisions to extend credit. Subsequently, after credit is extended, mitigation of this risk involves the organisation and upkeep of credit-control structures and, in some special cases, recourse to credit insurance provided by credible insurers in the marketplace.
These measures contribute to keeping customers' debt at a level that will not affect the financial health of the GROUP's subsidiaries.
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6. Creation of value with and through People
In line with the strategic 2013 Ambition plan, the MOTA-ENGIL GROUP put into motion in 2009 a number of projects and initiatives that contributed to meeting the seven strategic priorities defined for Human Resources: • to identify and manage Talent within the Group; • to develop the Profile of Group Manager; • to develop skills that add value to the business; • to promote staff mobility and rotation; • to foster the recruiting and development of international staff; • to align remuneration policy with performance management; • to strengthen the Group’s Culture and Knowledge.
Of the various projects undertaken, emphasis is given to the consolidation of the activity of the MOTA-ENGIL ACTIVE SCHOOL through the enlargement of the skill-development programmes to those markets in which the Group is involved. A year after beginning its activity the MOTA-ENGIL corporate university organised two editions of the International Management Programme through the ACTIVE SCHOOL MANAGEMENT AND LEADERSHIP, one in Angola and one in Poland. Through these initiatives the MOTA-ENGIL ACTIVE SCHOOL instils a global perspective in the management of the development of the GROUP Staff, ensuring transverse response irrespective of the business unit or country to which they belong.
Also within the ambit of the MOTA-ENGIL ACTIVE SCHOOL a corporate induction seminar was organised, known as WELCOME. WELCOME is specifically directed at all management staff who have recently joined the MOTA-ENGIL GROUP, regardless of their business unit, market or country. This seminar encourages the dissemination and strengthening of the MOTA-ENGIL Culture and Values, as well as the diffusion and extension of knowledge of the GROUP's areas of activity and fields of competence. This measure, undertaken through the ACTIVE SCHOOL CULTURE AND VALUES, increases the need to foster the construction of a Culture and Values of corporate ambit so as to ensure the consolidation of a strong organisational identity, able to encourage the generation of synergies and stimulate the involvement of our employees.
During 2009 the first edition of the Trainee Welcome Programme – START@ME – was held. Its aim is to attract, train, motivate and retain youths of high potential. The START@ME programme is designed to take in, each year, a number of trainees of differing basic academic backgrounds, encouraging their alignment with the MOTA-ENGIL Culture and Values, and their integration into the GROUP's various business units. The selected candidates have the opportunity to begin their professional career through a structured programme that allows them, at one and the same time, to acquire a transverse overview of the GROUP and to increase their technical know-how and experience.
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42 4242 42 The programme involves several sequential stages, each reflecting the growing interaction with the trainees and the enhancement of their knowledge of the MOTA-ENGIL GROUP:
Over the first weeks the group of selected trainees undergoes a number of corporate induction measures directed at enhancing their acquaintance with and familiarising them with the GROUP, through information and training courses directed at increasing their knowledge of MOTA-ENGIL.
During this second stage of the programme the trainees join a Group business unit where they attend an induction course in one or more functional areas to develop their technical knowledge specific to the business.
In the final stage of START@ME trainees who have performed very well throughout the Induction Course and who remain with the MOTA-ENGIL GROUP will undergo training at the MOTA-ENGIL ACTIVE SCHOOL. The aim is to further increase their knowledge of the GROUP and to strengthen the relations and synergies created, and also to encourage sharing of the know-how acquired and to develop skills and knowledge in transverse areas.
Through the START@ME Programme MOTA-ENGIL is convinced that it is contributing to meeting the ambitious goals that it has set up and to the development and management of the GROUP's Talent, strengthening its permanent ability to rejuvenate and so to prepare for the future.
At the same time, the ONE - MOTA-ENGIL HR CORPORATE STANDARDS Project was developed. The mission of this project is to define and implement a number of Corporate Management Policies and Models that will instil a common philosophy and architecture within the diversity of businesses and geographic areas where the GROUP is active and, at the same time, ensure the practical adequacy of the different realities/ needs that characterise the GROUP companies.
In this first stage of the project, which took place during 2009, the following Models and Policies were designed and approved for the GROUP:
a Corporate Performance Management Model to stimulate greater differentiation of talent within the Group, contributing to a culture of meritocracy;
an integrated, sustained Remuneration Policy that will foster in-house equity and external competitiveness;
a consistent International Mobility Policy based on a set of processes and instruments that will promote adequate management of staff mobility within the Group.
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For their structural nature, implementation of the Models and Policies at the various GROUP companies will of necessity be gradual, and it can be expected that the results will come to be consolidated progressively up to 2013.
The year under review was focused on the continuity and consolidation of measures that had begun in 2008 and, at the same time, on the launch of new projects and initiatives contributing to an effective model in bringing about the strategic Human Resources priorities defined by the Group.
The coming year, 2010, will be one of continuity and, as such, of continuity of the challenging path along which MOTA-ENGIL has set out to capitalise on its Human Capital.
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44 4444 44 7. Proposal for the appropriation of profits
The Individual Management Report contains the following proposal: the Board of Directors of MOTA-ENGIL, SGPS, SA, proposes to the Annual General Meeting the following appropriation of the Net Profit for the year in the sum of €56,078,279; a) to legal reserve 5% or €2,803,913.95; b) for distribution to the Board of Directors under the terms of article 27.3 of the articles of association, the sum of €700,000, or about 1.2%; c) for distribution to equityholders, a total of €22,509,926.45, or 11 cents per share, subject to tax; and d) to free reserves, the remainder, or €30,064,438.60.
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8. The Outlook for 2010
In addition to what has been mentioned in previous chapters about the prospects for 2010 in terms of the global and national economic situation (in macroeconomic terms and in those areas in which the MOTA-ENGIL GROUP carries on its business), and notwithstanding the present constraints, the GROUP believes that the businesses that it does carry on, with their unique service of excellence, focused on growth and on the efficiency of the operations, are in a good position to continue to resist well to and even to benefit from the adverse economic surroundings.
Under these circumstances, and in line with the objectives set up within the scope of the 2013 AMBITION PLAN, MOTA-ENGIL predicts the following for 2010:
• growth of Consolidated Turnover, underpinned by a strong order book in construction;
• Engineering & Construction area with Turnover up more than 5% and a trend of stabilising margins;
• growth of Turnover in the Environment & Services area by under 10%, with a trend of slight recovery of the margins;
• the Transport Concessions area with a recovery of traffic and stable margins;
• an order book of more than €3 billion, underpinned by international business.
Attention is called to the fact that these prospects do not constitute a commitment as to the future performance of the GROUP, but simply a best forecast, as of this date, of the business of its companies in 2010. Therefore, the actual performance achieved in 2010 may differ substantially from these predictions. Additionally MOTA-ENGIL, SGPS does not undertake to update or correct this information because of any alteration of endogenous or exogenous factors that may come to alter the performance of the GROUP.
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46 4646 46 9. Subsequent events
The following relevant facts occurred in 2010 by the date of issue of this report, details of which have been adequately divulged as privileged information, via the MOTA-ENGIL and CMVM sites:
- notification of the Provisional Adjudication of the Pinhal Interior Sub-concession (Janeiro 10, 2010)
“MOTA-ENGIL, SGPS, SA, is pleased to inform its Equityholders and the public in general that Estradas de Portugal, EP, has provisionally adjudicated the Pinhal Interior Sub-concession to the consortium headed by the MOTA-ENGIL GROUP (42.08%), through its subsidiaries MOTA- ENGIL, ENGENHARIA E CONSTRUÇÃO, SA (37.08%) and MOTA-ENGIL TRANSPORT CONCESSIONS, SGPS, SA (5.00%).”
- signature of the partnership agreement in Angola (March 24, 2010)
“MOTA-ENGIL, SGPS, SA, is pleased to inform that, in the wake of the Memorandum of Understanding previously signed and divulged to the market in due course, a Partnership Agreement was signed in Luanda today, February 24, 2010, the purpose of which is the incorporation of the company under Angolan law called MOTA-ENGIL ANGOLA, SA.
This company will come to carry out, in Angola, the greater part of the business now carried on by MOTA-ENGIL ENGENHARIA E CONSTRUÇÃO, SA, through its Branch, which will be maintained.
Of the new company 51% will be held by MOTA-ENGIL ENGENHARIA E CONSTRUÇÃO, SA, and 49% by an Angolan consortium comprising the following entities: Sonangol Holdings; BPA – Banco Privado do Atlântico, SA; Finicapital, Investimentos e Gestão, SA; and Globalpactum, Gestão de Activos, SA.
The operations to implement the transaction will take place during the current year. The process of valuation of the MOTA-ENGIL GROUP's assets and holdings that will be included in this operation is currently under way, the reference value of which, based on an initial valuation to which the Parties have agreed, amounts to US$ 325,000,000 (three hundred and twenty-five million US dollars).
The purpose of MOTA-ENGIL ANGOLA will be public and private civil construction and public works business, as well as any other industrial and related activities.”
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10. Closing Remarks
We would like to thank all the GROUP'S employees, for their personal and professional commitment, the Corporate Officers, the customers and all those in any way related with its various companies.
Porto, March 8, 2010
António Manuel Queirós Vasconcelos da Mota Chairman of the Board of Directors
Jorge Paulo Sacadura de Almeida Coelho Deputy-chairman of the Board of Directors and Chief Executive Officer
Arnaldo José Nunes da Costa Figueiredo Deputy-chairman of the Board of Directors and Member of the Executive Committee
Maria Manuela Queirós Vasconcelos Mota dos Santos Member of the Board of Directors
Maria Teresa Queirós Vasconcelos Mota Neves da Costa Member of the Board of Directors
Maria Paula Queirós Vasconcelos Mota de Meireles Member of the Board of Directors and Member of the Executive Committee
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Eduardo Jorge de Almeida Rocha Member of the Board of Directors and Member of the Executive Committee (Chief Executive Officer
Ismael Antunes Hernandez Gaspar Member of the Board of Directors and Member of the Executive Committee
Gonçalo Nuno Gomes de Andrade Moura Martins Member of the Board of Directors and Member of the Executive Committee
Luís Manuel Ferreira Parreirão Gonçalves Member of the Board of Directors
José Luís Catela Rangel de Lima Member of the Board of Directors
Professor Luís Valente de Oliveira Non-executive and independent member of the Board of Directors
António Bernardo Aranha da Gama Lobo Xavier Non-executive and independent member of the Board of Directors
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António Manuel da Silva Vila Cova Non-executive and independent member of the Board of Directors
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50 5050 50
Consolidated Financial Information
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Consolidated Income Statement for the years ended December 31, 2009 & 2008
Year 4th Quarter 2009 2008 2009 2008 Notes Euro Euro Euro Euro (unaudited) (unaudited)
Sales & services rendered 3 and 4 2,131,244,582 1,868,731,191 563,282,738 507,820,268 Other revenues 163,342,427 115,756,552 61,579,593 19,581,359 Cost of goods sold, mat. cons. & Subcontractors 5 (1,280,421,840) (1,011,232,579) (338,885,690) (262,870,296)
Gross profit 1,014,165,169 973,255,164 285,976,641 264,531,331
Third-party supplies & services 6 (382,780,384) (344,597,864) (116,116,612) (78,405,065) Wages and salaries 7 (326,166,059) (309,580,665) (86,316,560) (80,110,399) Other operating income / (expenses) 8 (864,035) (7,740,496) (634,847) (2,927,726)
4 304,354,691 311,336,139 82,908,622 103,088,141
Depreciation & Amortization 4, 9, 17, 18 and 19 (125,785,864) (103,570,894) (34,112,453) (27,218,039) Provisons and impairment losses 10 (6,210,612) (15,024,903) (5,712,395) (12,357,907)
Operating profit 4 172,358,215 192,740,342 43,083,774 63,512,195
Financial income & gains 4 and 11 65,721,450 52,957,949 24,466,762 63,512,736 Financial costs & losses 4 and 11 (181,176,312) (182,717,207) (54,808,910) (93,345,166) Gains / (losses) on associated companies 4 and 12 50,568,297 7,289,262 (51,276) 86,457 Income Tax 4 and 13 (27,559,489) (30,500,663) (7,942,649) (16,126,733)
Consolidated net profit of the year 79,912,161 39,769,683 4,747,701 17,639,489
Attributable: to minority interests 4 8,174,069 9,204,245 949,878 1,311,320 to the Group 4 71,738,092 30,565,438 3,797,823 16,328,169
Earnings per share: basic 15 0.3704 0.1569 0.0183 0.0844 diluted 15 0.3704 0.1569 0.0183 0.0844
To be read with the Notes to the Consolidated Financial Statements
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Consolidated Statement of Comprehensive Income for the years ended December 31, 2009 & 2008
Year 4th Quarter 2009 2008 2009 2008 Euro Euro Euro Euro (unaudited) (unaudited)
Consolidated net profit for the period 79,912,161 39,769,683 4,747,701 17,639,489 Other comprehensive income
Exchange differences stemming from transposition of financial statements expressed in foreign currencies (8,144,211) (309,525) (11,323,936) (1,787,389) Variation, net of tax, of the fair value of financial investments available for sale - (11,579,250) - -
Variation, net of tax, of the fair value of financial derivatives (6,911,784) (8,817,625) 6,662,867 (7,045,371)
Variation, net of tax, of the fair value of mineral resources 386,516 (2,227,574) 386,516 (2,227,574)
Other corrections to the own funds of associates 2,166,210 (4,984,017) 2,543,716 (4,258,479)
67,408,892 11,851,692 3,016,863 2,320,677 Total comprehensive income for the period
Attributable: to minority interests 5,238,457 9,246,307 2,152,475 1,908,412 to the Group 62,170,435 2,605,385 864,389 412,265
To be read w ith the Notes to the Consolidated Financial Statements
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Consolidated Statement of Financial Position as at December 31, 2009 & 2008
2009 2008 Notes Euro Euro
Assets Non-current Goodwill 16 166,173,280 160,075,797 Intangible fixed assets 17 103,515,556 46,100,726 Fixed assets under concession 18 1,359,426,080 1,163,128,870 Tangible fixed assets 19 558,985,747 476,272,287 Financial investments under the equity method 20 330,232,487 173,854,668 Available for sale financial assets 21 52,709,067 75,148,566 Investment properties 22 30,837,291 41,344,627 Customers & other debtors 24 89,938,103 83,800,030 Deferred tax assets 13 50,338,968 33,375,415
2,742,156,579 2,253,100,986
Non-current Assets Held for Sale 39 29,043,672 29,043,672
Current Inventories 23 249,924,349 232,024,181 Customers 24 838,114,736 533,445,853 Other debtors 24 195,850,259 220,605,155 Other current assets 24 313,725,464 261,961,864 Cash & cash equivalents without recourse 24 120,440,729 105,814,414 Cash & cash equivalents with recourse 24 124,875,090 73,655,129
1,842,930,627 1,427,506,596
Total Assets 4 4,614,130,878 3,709,651,254
Liabilities Non-current Debt without recourse 26 1,091,580,057 922,411,285 Debt with recourse 26 742,741,654 667,688,793 Sundry Creditors 28 299,466,970 229,011,122 Provisions 29 29,567,835 30,557,261 Other non-current liabilities 30 55,181,435 57,978,831 Deferred tax liabilities 13 33,552,856 26,731,742
2,252,090,807 1,934,379,034 Current Debt without recourse 26 135,773,353 132,773,431 Debt with recourse 26 563,291,966 308,572,226 Suppliers 28 464,271,291 428,735,817 Derivative financial instruments 27 16,434,046 15,291,042 Sundry Creditors 28 409,778,150 305,136,084 Other current liabilities 30 396,399,973 243,446,537
1,985,948,779 1,433,955,137
Total Liabilities 4 4,238,039,586 3,368,334,171
Shareholders' equity Equity capital 25 204,635,695 204,635,695 Reserves 25 51,955,904 53,820,780 Consolidated net profit for the year 71,738,092 30,565,438
Own funds attributable to the Group 328,329,691 289,021,913
Minority interests 47,761,601 52,295,170
Total shareholders' equity 376,091,292 341,317,083
4,614,130,878 3,709,651,254
To be read w ith the Notes to the Consolidated Financial Statements
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Consolidated Statement of Changes in Equity for the yers ended December 31, 2009 & 2008
Fair value reserves Own funds Available-for- Lands assigned Currency Own funds attributable to Issue sale to quarrying translation Other reserves attributable to minority Shareholders' Equity capital Own Shares premiums investments operations Derivatives reserve and results Net Profit shareholders interests equity
Balance as at January 1, 2008 204,635,695 (16,679,167) 87,256,034 57,165,578 - 2,216,804 (22,818,336) (68,768,919) 97,538,375 340,546,064 46,380,143 386,926,207 - Impact of the investigation in Hungary ------(25,198,695) - (25,198,695) - (25,198,695) - Balance as at January 1, 2008 (as restated) 204,635,695 (16,679,167) 87,256,034 57,165,578 - 2,216,804 (22,818,336) (93,967,614) 97,538,375 315,347,369 46,380,143 361,727,512
Total comprehensive income for the period - - - (11,579,250) (2,227,574) (8,817,625) (351,587) (4,984,017) 30,565,438 2,605,385 9,246,307 11,851,692
Dividend distribution ------(22,509,926) - (22,509,926) (4,364,109) (26,874,035)
Other distributions of results ------(1,401,000) - (1,401,000) (106,260) (1,507,260) - Acquisition of own shares - (5,019,915) ------(5,019,915) - (5,019,915)
Transfers for other reserves ------97,538,375 (97,538,375) - - -
Alterations to the consolidation perimeter ------1,139,089 1,139,089
- Balance as at December 31, 2008 204,635,695 (21,699,082) 87,256,034 45,586,328 (2,227,574) (6,600,821) (23,169,923) (25,324,182) 30,565,438 289,021,913 52,295,170 341,317,083
Balance as at January 1, 2009 204,635,695 (21,699,082) 87,256,034 45,586,328 (2,227,574) (6,600,821) (23,169,923) (25,324,182) 30,565,438 289,021,913 52,295,170 341,317,083
Total comprehensive income for the period - - - - 386,516 (4,026,840) (8,093,543) 2,166,210 71,738,092 62,170,435 5,238,457 67,408,892
Dividend distribution ------(21,302,947) - (21,302,947) (7,437,879) (28,740,826)
Other distributions of results ------(700,000) - (700,000) - (700,000)
Acquisition of own shares - (859,710) ------(859,710) - (859,710)
Transfers for other reserves ------30,565,438 (30,565,438) - - -
Alterations to the consolidation perimeter ------(2,334,147) (2,334,147)
Balance as at December 31, 2009 204,635,695 (22,558,792) 87,256,034 45,586,328 (1,841,058) (10,627,661) (31,263,466) (14,595,481) 71,738,092 328,329,691 47,761,601 376,091,292
To be read with the Notes to the Consolidated Financial Statements
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Consolidated Statement of Cash Flows for the years ended December 31, 2009 & 2008
2009 2008 Notes Euro Euro OPERATING ACTIVITY
Cash receipts from customers 1,974,367,308 1,924,284,048 Cash paid to suppliers (1,216,799,169) (1,278,384,123) Cash paid to employees (297,201,082) (259,261,241) Cash generated from operating activities 460,367,057 386,638,684
Income tax paid/received (33,947,672) (20,598,322) Other receipts/payments generated by operating activities (75,335,659) (25,697,798) Net cash from operating activities (1) 351,083,726 340,342,564
INVESTING ACTIVITY
Cash receipts from: Financial assets 38 11,319,695 5,451,740 Tangible fixed assets 11,668,266 7,090,618 Dividends paid by companies not consolidated 4,860,675 3,790,274 27,848,636 16,332,632 Cash paid in respect of: Financial assets 38 (142,445,447) (57,925,196) Tangible fixed assets (408,648,239) (226,351,992) Intangible fixed assets (963,653) (2,329,886) (552,057,339) (286,607,074) Net cash from investing activities (2) (524,208,703) (270,274,442)
FINANCING ACTIVITY
Cash receipts from: Loans obtained 2,165,200,779 1,730,552,350 2,165,200,779 1,730,552,350
Cash paid in respect of: Loans obtained (1,775,497,031) (1,620,526,969) Amortization of finance lease contracts (18,131,869) (18,315,109) Interest & similar expense (117,778,038) (131,251,340) Dividends (21,302,947) (21,433,066) Acquisition of treasury shares (859,709) (5,019,915) (1,933,569,594) (1,796,546,399) Net cash from financing activities (3) 231,631,185 (65,994,049)
Variation of cash & cash equivalents (4)=(1)+(2)+(3) 58,506,208 4,074,073 Variations caused by changes to the perimeter 6,278,254 2,121,186 Exchange rate effect 1,061,814 - Cash & cash equivalents at the beginning of the year 24 179,469,543 173,274,284 Cash & cash equivalents at the end of the year 24 245,315,819 179,469,543
To be read with the Notes to the Consolidated Financial Statements
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Introduction
The principal business of MOTA-ENGIL, SGPS, SA, having its registered office at Edifício Mota, Rua do Rego Lameiro, 38 4300-454 Porto (MOTA-ENGIL SGPS, or COMPANY) and of its subsidiaries (GROUP) is public and private construction work and related activities.
A more detailed description of the GROUP's business is provided in Note 4 Business segments of this Annex
All sums shown in these notes are presented in euros unless otherwise stated.
1. Accounting Policies
Bases of presentation
The consolidated financial statements of the MOTA-ENGIL GROUP have been prepared on a going concern basis from the books and accounting records of the companies that form the GROUP, in a manner such that the consolidated financial statements are in accordance with the International Financial Reporting Standards ("IAS/IFRS") issued by the International Accounting Standards Board ("IASB") and with the interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”) or by the former Standards Interpretation Committee (SIC), as adopted by the European Union
Interim consolidated financial statements were presented quarterly in Accordance with IAS 34 - Interim Financial Reporting.
For the GROUP, there are no differences between the IFRS adopted by the European Union and those published by the International Accounting Standards Board.
January 1, 2005, marked the start to the period of first application of the IAS/IFRS by the GROUP in keeping with IFRS 1 – First-time Adoption of International Financial Reporting Standards.
As of the date of approval of these financial statements by the Board of Directors the International Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”) have issued the following standards and interpretations, of mandatory application only in subsequent years, some of which have not yet been adopted by the European Union.
Date Date of Adopted by Standard of Issue Application the EU (1) Amendments
IAS 32 – Financial instruments: Presentation 08/10/2009 01/02/2010 Yes
IAS 39 – Financial instruments: Recognition and measurement 31/12/2008 01/07/2009 Yes
IFRS 1 – First-time adoption of international financial reporting standards 23/07/2009 01/01/2010 No
IFRS 2 – Share-based payments 18/06/2009 01/01/2010 No IFRIC 14 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their 26/11/2009 01/01/2011 No Interaction (IAS 19)
New Standards/Interpretations
IFRS 9 – Financial Instruments - Classification and measurement 12/11/2009 01/01/2013 No
IFRIC 12 – Service Concession Arrangements 30/11/2006 29/03/2009 Yes
IFRIC 15 – Agreements for the construction of real estate 03/07/2008 01/01/2010 Yes
IFRIC 16 – Hedges of investments in foreign currency 03/07/2008 01/07/2009 Yes
IFRIC 17 – Distributions of non-cash assets to owners 27/11/2008 01/11/2009 Yes
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Date Date of Adopted by Standard of Issue Application the EU (1) IFRIC 18 – Transfers of assets from customers 29/01/2009 01/11/2009 Yes
IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments 25/11/2009 01/07/2010 No
Revisions
IAS 24 – Related Party Disclosures 04/11/2009 01/01/2011 No
IAS 27 – Consolidated and individual financial statements 10/01/2008 01/07/2009 Yes
IFRS 1 – First-time adoption of international financial reporting standards 27/11/2008 01/01/2010 Yes
IFRS 3 – Business combinations 10/01/2008 01/07/2009 Yes (1) Years started on or after the stated date
On December 31, 2009, the GROUP was not applying any of the above rules and interpretations. According to the board of directors of the GROUP they will not have a material effect on the consolidated financial statements during the period of their first application, except for possible impacts stemming from the comments set out in the following table.
Standard Comments
First time adoption of the international financial reporting standards. This IFRS 1 – First-time adoption of international financial reporting standard was revised with a view to bringing together the various standards (Revision) amendments that had been introduced since its first version. 2008 Revision. This revision is of mandatory application for years beginning on or after July 1, 2009, and brings about alterations to the accounting of business combinations, particularly with regard to: (a) measurement of non- IFRS 3 – Business combinations and controlling interests (previously known as minority interests); (b) subsequent IAS 27 – Consolidated and separate financial statements recognition and measurements of contingent payments; (c) treatment of (Revision) direct costs related with the combination; and (d) recording transactions involving the purchase of interests in entities already controlled and of the sale of interests not incurring loss of control. IFRIC 12, which establishes the provisions to be used in the measurement, recognition, presentation and disclosure of activities carried on under public- service concession agreements, was approved by the European Union on March 25, 2009, and is of mandatory application for years starting on or after March 29, 2009. Future application of this rule may introduce several alterations compared to the provisions and interpretations of the rules currently in force. In the expectation that they mainly involve reclassification to tangible fixed assets of the fixed assets under concession and an IFRIC 12 – Service Concession Arrangements alteration of the method of depreciation of the assets associated with the highway concessions, the impacts have not yet been fully determined as of this date Application of this interpretation is mandatory for years starting on or after January 1, 2010, and it introduces recognition and measurement rules for private operators involved in the provision of infrastructure construction and operation services within the scope of concessions of the public-private type. This interpretation addresses the way of assessing whether an agreement for the construction of an immovable lies within the scope of IAS 11 – IFRIC 15 – Agreements for the construction of real estate Construction contracts or within that of IAS 18 – Revenue, and how the respective revenue should be recognised. This interpretation provides guidelines on hedge accounting of net IFRIC 16 – Hedges of a net Investment in a foreign operation investments in foreign operations. This interpretation provides guidelines on the correct accounting of non-cash IFRIC 17 – Distributions of non-cash assets to owners assets distributed to equityholders as dividends. This interpretation provides guidelines on the accounting by the operators of IFRIC 18 – Transfers of assets from customers the customers' tangible fixed assets.
During 2009 the following standards came into force, the practical impacts of which on the MOTA- ENGIL GROUP were as follows:
Standard Impact
The 2007 revision of IAS 1 introduced terminology including new names for the items of the financial statements, as well as alterations to the IAS 1 (Revised) – Financial Instruments: Presentation format and content of these items. MOTA-ENGIL presents all changes in equity caused by transactions with equityholders in the Consolidated
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Standard Impact
statement of changes in equity. All changes in equity resulting from transactions with entities that are not equityholders are presented in two separate statements (a consolidated income statements and a consolidated statement of comprehensive income). This revision introduced the obligation of capitalising the costs of borrowings related with assets that are qualified, and the option of recording them in the income statement for the period in which they are IAS 23 (Amendments) – Borrowing costs incurred is therefore eliminated. The adoption of this alteration had no material impact on MOTA-ENGIL's consolidated financial statements because, in respect of most of its assets, it already implemented this accounting policy in preceding years. These amendments altered the criterion of classification of a financial Amendments to IAS 32 and IAS 1– Puttable financial instrument between equity and financial liability, allowing some financial instruments and obligations stemming from a liquidation instruments that can be repurchased to be classified as equity instruments. Amendments that: - under limited conditions, allow reclassification of non-derivative financial instruments from the fair-value through profit & loss and available-for-sale Amendments to IAS 39 – Financial instruments: Recognition and categories to other categories; measurement - clarify the following aspects of hedge accounting: (i) identification of inflation as a hedged risk; and (ii) hedging with options. These amendments did not impact on MOTA-ENGIL's consolidated financial statements. Consists of clarification of the definition of vesting conditions, the introduction of the non-vesting concept and the clarification of the Amendments to IFRS 2 – Share-based payments treatment of cancellations. This alteration did not impact on Mota-Engil's consolidated financial statements. Amendments to IFRS 4 – Insurance contracts No impact on MOTA-ENGIL's consolidated financial statements. Amendments to disclosures about measurements at fair value and about Amendments to IFRS 7 – Financial instruments: Disclosures the liquidity of financial instruments, which extended the disclosures required. The GROUP adopted IFRS 8 in the place of IAS 14, which requires segment identification consistent with that considered internally for analysis of the performance of operations. Adoption of this standard had IFRS 8 – Operating segments no impact on the report by segments undertaken by the GROUP, since the segments previously considered in terms of reporting by segments were already those used internally for the analysis of the performance of the operations. These amendments clarified under what circumstances a subsequent Amendments to IFRIC 9 – Revaluation of Embedded reassessment of the obligation of separation of an embedded derivative is Derivatives allowed This amendment of the interpretation did not impact on MOTA- ENGIL's consolidated financial statements. This interpretation determines that bonuses awarded to customers as part of a sales transaction be recorded as a separate component of the IFRIC 13 – Customer loyalty programmes transaction. This interpretation did not impact on MOTA-ENGIL's consolidated financial statements. The process involved revision of 32 accounting standards, which, Improvements of the international financial reporting standards – however, had no significant impact on the MOTA-ENGIL consolidated 2007 financial statements.
During 2009, there were no alterations to the accounting policies compared to those presented in the consolidated financial statements as at December 31, 2008.
The consolidated financial statements are presented in euros since this is the main currency of the GROUP's operations. The financial statements of subsidiaries that use foreign currency have been translated into euros in accordance with the accounting policies described in indent xvi) of the Main Valuation Criteria of this Note. All estimates and assumptions made by the board of directors have been made on the basis of their knowledge as of the date of approval of the financial statements and of the events and transactions in progress.
In preparing the consolidated financial statements in accordance with the IAS/IFRS, the GROUP's board of directors adopted certain assumptions and estimates that affect the assets and liabilities reported, as well as the income and costs incurred in respect of the accounting periods in question, as described in indent xxvi) of the Main accounting criteria of this Note.
The attached consolidated financial statements have been prepared for appraisal and approval at the annual general meeting. The GROUP' board of directors believes that they will be approved without alteration.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Bases of consolidation
The consolidation methods employed by the GROUP are as follows: a) GROUP companies
Financial holdings in companies in which the GROUP directly or indirectly holds more than 50% of the voting rights at General Meetings of Equityholders and/or has the power to control its financial and operating policies (the definition of control used by the GROUP), have been included in the attached consolidated financial statements. The equity and net profit/(loss) of these companies corresponding to the holdings of third parties in these companies are carried in the consolidated balance sheet (under equity) and in the consolidated financial situation statement (included under consolidated net profits) respectively, under the Non-controlling interests sub-heading..
If losses attributable to the minorities exceed the minority interest in the equity of the subsidiary, the GROUP absorbs this excess and any other additional losses, unless the minorities have the obligation and the capacity to cover such losses. If the subsidiary subsequently returns a profit, the Group appropriates the whole of the profit until such time as the minority's share of the losses absorbed has been recouped.
In business combinations undertaken since January 2004, the assets and liabilities of each subsidiary (including contingent liabilities) are identified at their fair value on the date of acquisition as determined by IFRS 3 - Business Combinations.. Any excess/(shortfall) of the acquisition cost compared to the fair value of the net assets and liabilities acquired is recognised as goodwill or as badwill respectively, in the income statement for the period, following reconfirmation of the fair value valuation process, provided the fair value is maintained. The interests of minority equityholders are carried in the proportion of the fair value of the assets and liabilities.
The results of subsidiaries acquired or sold during the year are included in the income statements as from the date of the acquisition or up to the date of their sale (assignment of control).
Transactions, balances and dividends distributed between GROUP companies are eliminated in the consolidation process.
In those cases in which the GROUP has substantial control of special purpose entities (SPEs), even though it has no direct equityholdings in such entities, the SPEs are consolidated using the full consolidation method. As at December 31, 2009 & 2008, there were no entities in such a situation. b) Associate companies
Financial holdings in associate companies (companies in which the GROUP exercises significant influence, but does not have control, through participation in the financial and operational decisions of the company – generally investments representing between 20% and 50% of the issued capital of a company – are recorded using the equity method, under financial investments using the equity method..
In accordance with the equity method, equityholdings are recorded at acquisition cost adjusted for the value corresponding to the GROUP's holding in the changes in equity (including net profit) of the associates, with a contra entry under gains or losses for the year and for dividends received, net of accumulated impairment losses.
The assets and liabilities of each associate (including contingent liabilities) are carried at their fair value on the date of acquisition. Any excess/(shortfall) of the cost compared to the fair value of the net assets and liabilities acquired is recognised respectively as goodwill and is added to the value of the financial investment, or, in the case of shortfall and provided it is maintained following reconfirmation of the fair value valuation process, in the income statement for the period.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
A valuation is performed of the investments in associates where there are signs that the asset could be impaired, any loss being recorded in the income statement on confirmation of the impairment. Where impairment losses recognised in previous years no longer exist they are written back..
Where the GROUP's proportion of the accumulated losses of the associate exceeds the book value of investment, the investment is carried at zero value until such time as the equity of the associate becomes positive, unless the GROUP has entered into commitments with the associate and, in this case, has set aside a provision meet such obligations.
Unrealised gains on transactions with associates are eliminated in the proportion of the GROUP's interest in the associate, with a contra entry under the investment in the associate in question. Unrealised gains are similarly eliminated, but only up to the point at which the loss does not show that the transferred asset is impaired.
As and when necessary adjustments are made to the subsidiaries' financial statements subsidiaries to bring their accounting policies into line with those used by the GROUP. c) Jointly-controlled companies
Financial interests in jointly-controlled companies/ entities have been consolidated in the financial statements using the proportionate consolidation method, as from the date on which control is shared. In accordance with this method, the assets, liabilities, income and costs of these companies have been included in the consolidated financial statements, heading by heading, in the proportion of the control attributable to the GROUP.
Classification of financial interests in jointly-controlled companies/ entities is determined on the basis of:
- equityholders' agreements governing joint control; - the actual percentage of the holding; - the voting rights held.
Any goodwill generated on the acquisition of a jointly-controlled company/ entity is recorded in accordance with the accounting policies defined for the subsidiaries (Note 1a).
Transactions, balances and dividends distributed between companies are eliminated, in the proportion of the control attributable to the GROUP.
Main valuation criteria
The main valuation criteria, judgements and estimates used in the preparation of the GROUP's consolidated financial statements during the periods under review are as follows:
i) Goodwill
In business combinations after January 1, 2004, the goodwill arising from the positive differences between the cost of the investments in GROUP and associate companies and the fair value of the identifiable assets and liabilities (including contingent liabilities) of such companies as of the date of acquisition are recorded under Goodwill. Additionally, differences between the cost of investments in subsidiaries headquartered abroad and the fair value of the identifiable assets and liabilities of such subsidiaries are recorded in the reporting currencies of the subsidiaries and are translated into the GROUP'S reporting currency (euros) at the exchange rates ruling on the balance sheet date. Currency translation differences generated are recorded under the Currency translation reserve.
Goodwill generated prior to the date of transition to the IFRS continues to be carried at the net book value, calculated in accordance with the Official Accounting Plan, and was subject to impairment tests
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
on that date Additionally, and in accordance with the alternative provided for in IFRS 1- Adoption of the International Financial Reporting Standards for the First Time, MOTA – ENGIL, SGPS, SA, has not retroactively applied the provisions of IAS 21 - Effects of alterations of exchange rates on goodwill generated prior to January 1, 2004, and therefore, from then on, it has measured such differences of goodwill in the reporting currency of the subsidiaries, translated into euros at the rate then ruling.
The value of goodwill is not written down and, each year with reference to the date the accounts are closed, MOTA-ENGIL SGPS performs formal impairment tests thereon. If the value at which the goodwill is carried in the books is greater than the recoverable value an impairment loss is recognised and recorded in the income statement under Other operating costs. The amount recoverable is the higher of net selling price and of the value-in-use. The net selling price is the amount that could be obtained on the sale of the asset in an arm's length transaction, less costs directly attributable the sale. The value-in-use is the present value of future estimated cash flows arising from the ongoing use of the asset and from its sale at the end of its useful life. The amount recoverable is estimated for the asset, individually, or, should this not be possible, for the cash-generating unit to which the asset belongs.
Impairment losses in respect of goodwill are not revertible.
Differences between the acquisition cost of the investment in GROUP companies and associates and the fair value of the identifiable assets and liabilities of these companies as of the date of their acquisition, where negative, are recognised as income on the date of acquisition, following reconfirmation of the fair value of the identifiable assets and liabilities.
ii) Intangible fixed assets
Intangible fixed assets are carried at acquisition or production cost less accumulated amortisation and any impairment losses, and they are recognised only if it is probable that they will generate future benefits for the GROUP, if their value can be reasonably measured and if the GROUP has control over them.
Intangible fixed assets basically consist of concession operating licences (stemming from the processes of imputing fair value to assets acquired in business combination procedures), which are written down using the straight-line method over their useful life, and of software, which is written down using the straight-line method over a period of three to six years.
Research costs are recognised as costs for the year in which they are incurred, whereas formation costs and issued capital increase costs are deducted from equity.
iii) Premises
Immovables (land & buildings) for own use are recorded at their revalued value, which is their fair value as of the revaluation date less any subsequent accumulated depreciation and/or accumulated impairment losses. Revaluation is undertaken periodically by independent property valuers in a manner such that the revalued amount does not materially differ from the fair value of the respective property. In those situations in which the fair value determined by the valuations is slightly greater than the amount carried in the financial situation statement, the GROUP, for a question of prudence, does not update the assets subject to the valuation to their fair value. For reasons to do with the working of the respective markets, the GROUP has opted not to apply this policy to properties held in African countries, in some Central European countries and in Peru, which it carries at acquisition cost less any subsequent accumulated depreciation and/or accumulated impairment losses.
Adjustments caused by revaluations of own-use immovables are taken to equity. If a tangible fixed asset that was positively revalued in subsequent years and is then negatively revalued, the adjustment is taken to equity up to an amount equal to the increase of equity caused by the previous revaluations, less the amount realised through depreciation, any surplus being recorded as cost for the year with a contra-entry under net profit for the period.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Depreciation is charged on a systematic basis over the estimated useful life of the buildings, which currently varies between 20 and 50 years, while land is not depreciated.
Buildings under construction by the GROUP, particularly in Angola, are carried at production cost, including the cost of materials consumed, staff costs incurred and other costs, which is less than the realisable value.
iv) Land assigned to quarrying operations
Land assigned to quarrying operations, as well as several related costs (costs incurred with the licensing and start-up of the quarries, and costs to be incurred with their dismantling) are carried at a revalued amount, which is their fair value as of the date of the revaluation, less any subsequent accumulated depreciation and/or accumulated impairment losses. In those situations in which the fair value determined by the valuations is slightly greater than the amount carried in the financial situation statement, the GROUP, for a question of prudence, does not update the assets subject to the valuation to their fair value. The revaluations are performed periodically by the GROUP's internal departments in a manner such that the revalued amount does not materially differ from the fair value of the quarry in question. Depreciation of these assets is undertaken in accordance with the quantity of stone quarried each year taking into account the residual value of the quarry on conclusion of quarrying.
Adjustments caused by revaluations of land assigned to quarrying operations are taken to equity. If the quarry that was positively revalued in subsequent years is then negatively revalued, the adjustment is taken to equity up to an amount equal to the increase of equity caused by the previous revaluations, less the amount realised through depreciation, any surplus being recorded as cost for the year with a contra-entry under net profit for the period.
v) Other tangible fixed assets
Other tangible fixed assets acquired up to December 31, 2003, are carried at their deemed cost, which corresponds to the acquisition cost or acquisition cost revalued in accordance with accounting practices generally accepted in Portugal up to the said date, less accumulated depreciation and impairment losses.
Other tangible fixed assets acquired after that date are carried at acquisition cost less accumulated depreciation and impairment losses.
Tangible fixed assets in progress comprise fixed assets still under construction/ development, and are carried at cost less any accumulated impairment losses.
Depreciation is calculated after the assets are in a position to be used, that is, when the underlying assets are ready for use in the required conditions, in terms of quality and technical reliability, to operate in accordance with the requirements of the GROUP's board of directors, and it is systematically charged over the useful life determined taking into account the expected use of the asset by the GROUP, on the basis of the expected natural wear, of subjection to predictable technical obsolescence and of the residual value attributable to the asset. The residual value attributable to the asset is estimated on the basis of the residual value prevailing on the date of the estimate of similar assets that have reached the end of their useful lives and have operated under conditions similar to those under which the asset is to be used.
The depreciation rates used correspond to the following estimated useful lives:
Equipment: Plant & machinery (except that assigned to the concessions) 3 to 10 Office equipment 4 to 10 Transport equipment 3 to 10 Tools & utensils 3 to 6
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Other tangible fixed assets 3 to 10
Tangible fixed assets (particularly plant & machinery) assigned to the motorway concessions under the SCUT (virtual toll) scheme and to the port concessions are being written down using the straight- line method over the lives of the concessions in question. In those cases where the period of useful life of the assets is less than the life of the concession, they are written down using the respective useful life.
Tangible fixed assets assigned to the real-toll motorways are being written down in accordance with the traffic levels expected over the remaining lives of the concessions.
Subsequent spending on the replacement of components of fixed assets by the GROUP is added to the respective tangible fixed assets, the net value of the replaced components of such assets being written off and recorded as a cost under Other operating costs.
Maintenance and repair costs that neither increase the useful life nor provide significant amelioration or improvement of the items of tangible fixed assets are recorded as a cost for the year in which they are incurred.
Depreciation and amortisation of tangible and intangible fixed assets are recorded on a monthly basis under Depreciation in the income statement. Any alteration of the estimated useful life of the fixed assets is undertaken on a prospective basis.
vi) Leasing
Lease contracts are classified as (i) finance leases if, through them, all the risks and advantages inherent in possession of the leased assets are substantially transferred, and as (ii) operating leases if, through them, all the risks and advantages inherent in the possession of the leased asset are not substantially transferred.
Classification of leases as finance or operating is undertaken in the light of the substance and not of the form of the contract.
Fixed assets acquired under finance lease contracts, as well as the corresponding liabilities, are recorded using the financial method, with recognition of the tangible fixed assets, the corresponding accumulated depreciation, as defined in Indents iii) and v) hereabove and debts pending settlement in keeping with the contractual financial plan. Additionally, the interest included in the value of the lease payments and the depreciation of the tangible fixed asset are recognised as costs in the income statement of the year to which they refer.
In operating leases payments owed are recognised as a cost in the income statement on a linear basis over the life of the lease contract.
vii) Investment properties
Investment properties consist of land and buildings the purpose of which is to generate rents and/or secure the appreciation of capital invested (particularly land held in Central Europe for a future undetermined current use) and not for use in the production or supply of goods or services, for administrative purposes or for sale during the course of day-to-day business.
Investment properties, including those at the construction stage, are recorded at their fair value determined by an annual valuation performed by independent, specialised entities or in accordance with current prices realisable on the market in question.
Variations of the fair value of investment properties are recognised directly in the income statement for the period under Variation of the value of investment properties. For reasons to do with the working of the Angolan market, the GROUP has opted not to apply this policy to investment properties held in that
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
country, and it carries them at acquisition cost less any subsequent accumulated depreciation and/or impairment losses. At the end of 2009, the GROUP held no investment properties in Angola.
Costs incurred with investment properties in use, namely maintenance, repairs, insurance and property taxes (municipal rates), are recognised in the consolidated income statement for the period to which they refer.
viii) Non-current assets held for sale
Non-current assets are classified as held for sale if their book value can be recovered only through a sale and not through their ongoing use. For such assets to be so classified they have to be available for immediate sale as found, the sale has to be highly probable, the board of directors must be committed to execute such a sale and the sale must occur within 12 months, as determined in IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations.
Non-current assets classified as held for sale are carried at the lesser of book value and fair value, after deduction of expected selling costs.
ix) Financial assets & liabilities
Financial assets and liabilities are recognised in the financial position statement when the GROUP becomes a contracting party to the respective financial instrument.
a) Financial instruments:
The GROUP classifies financial investments under the following categories: “Investments carried at fair value through profit & loss”, “Loans and receivables”, “Investments held to maturity” and “Investments held for sale”. The classification depends of the intention underlying the investment.
The classification is determined at the time of the initial recognition and is reappraised half-yearly.
- Investments carried at fair value through profit & loss: this category is divided into two sub- categories: “financial assets held for trading” and “investments carried at fair value through profit & loss”. A financial asset is classified in this category, particularly if acquired to be sold in the short term or if the adoption of valuation using this method eliminates or significantly reduces an accounting lag. Derivatives instruments are also classified as held for trading unless assigned to hedging operations. Assets of this category are classified as current assets if they are held for trading or if they are expected to be realised within 12 months of the balance sheet date;
- Loans and accounts receivable are non-derivative financial assets having fixed or variable reimbursements that are not quoted in active, liquid markets. These financial investments arise when the GROUP provides cash, goods or services directly to a debtor with no intention of negotiating the debt. “Loans and accounts receivable” are classified as current assets, except in those cases in which the maturity is greater than 12 months of the balance sheet date, these being classified as non-current assets. In both cases, this category appears in the financial position statement under Customers and Other debtors;
- Investments held for sale: These include financial assets, other than derivatives, that are designated as held for sale or those that do not fall within the previous categories. This category is included under non-current assets unless the board of directors intends to sell the investment within 12 months of the balance sheet date.
Investments held to maturity are classified as non-current assets unless they fall due within 12 months of the balance sheet date. “Investments carried at fair value through profit & loss" are classified as current investments. “Investments held for sale" are classified as non-current.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
All purchases and sales of these investments are recognised on the date of signature of the respective contracts, regardless of the financial settlement date.
The investments are initially recorded at acquisition cost, which is the sum paid on acquisition date and corresponds to their fair value as of that day, including transaction costs.
After initial recognition, investments recorded at fair value through profit & loss and held-for sale investments are revalued at their fair value as marked to market as of the balance sheet date, with no deduction in respect of transaction costs that might be incurred up to their sale.
Gains or losses arising from alteration of the fair value of held-for sale are investments are recorded in the consolidated statement of comprehensive income under "Fair Value Reserve - Held-for-sale investments" until such time as the investment is sold, received or in any other way disposed of, or in those cases in which the fair value of the investment is lower than cost and provided it is considered a significant or permanent impairment loss, when the accumulated gain or loss is recorded in the income statement.
Gains or losses caused by alteration to the fair value of trading investments are recorded in income statement for the period.
Gains and losses, realised or otherwise, caused by an alteration to the fair value of "Investments held at fair value through profit & loss" are recorded in the income statement for the period.
The fair value of the investments is based on current market prices. If the market of which the investment is a part is not an active or liquid one (unquoted investments), the Group establishes its fair value using other valuation techniques, such as transactions in substantially similar financial instruments, financial-flow analyses and price option models adjusted to reflect the specific circumstances. The fair value of listed investments is calculated on the basis of the Euronext close on the balance sheet date.
The Group performs valuations on each balance sheet date if there is objective evidence that a financial asset could be impaired. In the case of capital instruments classified as held for sale, a significant or prolonged decline of their fair value to less than cost indicates that the asset is in a situation of impairment. For other assets, objective signs of impairment may include:
- financial difficulties of the counterparty in settling its debts; - failure by the counterparty to repay in a timely manner credit extended by the Group; - high probability that the counterparty may be involved in bankruptcy or debt-restructuring proceedings.
For financial assets carried at amortised cost, the amount of the impairment results from the difference between their book value and the present value of future cash flows discounted at the initial real interest rate.
The book value of financial assets is reduced directly by any impairment losses encountered, with the exception of trade accounts receivable and other debtors for which the Group sets aside a specific "Accumulated impairment loss" account. When an account receivable from customers or other debtors is considered a bad debt, it is written off against "Accumulated impairment losses". Amounts subsequently received in respect of accounts receivable from customers or other debtors written off in the financial statements are credited to the income statement for the period. Alterations to "Accumulated impairment losses" are recorded in the income statement for the period.
With the exception of Available-for-sale investments, if, in a subsequent year, there is a reduction of accumulated impairment losses and if this decrease is objectively the result of an event after the date of recognition of the impairment, the decrease is recorded through the income statement for the period up to the limit of the existing Accumulated impairment loss.
Investments held to maturity are recorded at amortised cost using the real interest rate, net of amortisation of principal and interest received.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
All available-for-sale financial investments involving shares in unlisted companies are carried at their acquisition cost, taking into account always any impairment losses in the event of objective proof of impairment. The GROUP's board of directors is of the conviction that the fair value of these investments does not differ significantly from their acquisition cost.
Dividends received in respect of equity instruments classified as Available-for-dale investments are recognised in the income statement for the period in which the right to receive them was established.
b) Customers & other debtors
The debts of "Customers" and of "Other debtors" are carried at their nominal value less any accumulated impairment losses, so as to reflect their net realisable value.
c) Borrowings
Borrowing are carried in liabilities at amortised cost. Any costs incurred with the issue of these loans are carried as a deduction from the debt and are recognised over the life of the loans in question, in keeping with the actual interest-rate method.
d) Accounts payable
Accounts payable that do not bear interest are recorded at their nominal value, which is substantially the same as their fair value, in that the effect of the discount is considered immaterial.
e) Financial liabilities and own funds instruments
Financial liabilities and own funds instruments are classified in accordance with the contractual substance of the transaction. The GROUP considers own funds instruments to be those in which the contractual support of the transaction shows that the GROUP has a residual interest in a set of assets after deduction of a set of liabilities.
f) Derivatives instruments
The GROUP uses derivatives instruments in the management of its financial risks solely to hedge these risks, and derivatives instruments are not used for speculative purposes. Use of financial derivatives instruments is duly authorised by the board of directors of the GROUP.
The derivatives instruments used by the GROUP defined as cash-flow hedging instruments involve solely interest-rate hedging instruments in respect of loans obtained. The amount of the loans, the interest payment dates and the repayment plans of the loans underlying the interest-rate hedging instruments are similar to the conditions established for the loans taken out.
The criteria employed by the GROUP in classifying derivatives instruments as cash-flow hedging instruments are as follows:
- the hedge is expected to be highly effective in offsetting alterations to cash flows attributed to the hedged risk; - effectiveness of the hedge can be reliably measured; - there is adequate documentation as to the transaction to be hedged at the beginning of the operation; and - the transaction covered by the hedge is highly probable.
Interest-rate hedging instruments are initially recorded at cost, if any, and are subsequently revalued at their fair value. Alterations to the fair value of these instruments, associated with that part that is actually hedged, are recognised in the consolidated statement of comprehensive income under "Fair value reserves – derivatives", and are transferred to the income statement for the period that the instrument that is hedged affects the results.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Accounting of derivatives instruments is discontinued when the instrument falls due or is sold. In those cases in which the derivative instrument is no longer qualified as a hedging instrument, accumulated differences of fair value deferred in the consolidated statement of comprehensive income under "Fair value reserves - Derivatives" are transferred to the income statement for the period or added to the value of the asset to which the transactions subject to hedging gave rise, and subsequent revaluations are recorded directly under the headings of the income statement.
With regard to derivatives instruments which, though contracted for economic hedging purposes, do not meet all the requirements of IAS 39 – Financial Instrument: Recognition and Measurement insofar as the possibility of accounting qualification as hedges is concerned, the respective variations of fair value are recorded in the income statement for the period in which they occur.
g) Treasury shares
Treasury shares are carried at acquisition cost as a deduction from equity. Gains or losses inherent in the sale of treasury shares are recorded under Other reserves.
h) Bills discounted and accounts receivable assigned under factoring arrangements
The GROUP derecognises the financial assets of its financial statements solely when contractual entitlement to the financial flows inherent in such assets expires or when the GROUP substantially transfers all the risks and benefits inherent in the possession of such assets to a third party.
Consequently, customer balances secured by bills discounted not yet fallen due and accounts receivable assigned under factoring arrangements as of the date of each balance sheet, with the exception of factoring operations without recourse, are recognised in the GROUP's financial statements up to such time as they are received, with a contra entry under "Sundry creditors".
x) Cash & cash equivalents
The amounts carried under "Cash & cash equivalents" correspond to cash-in-hand, bank deposits at sight and with agreed maturity dates and other cash placements falling due within less than three months that can be mobilised immediately and have an insignificant risk of alteration of value.
xi) Inventories
Merchandise, raw and subsidiary materials, and consumables are carried at the lesser of average acquisition cost or of market value (estimated selling price less costs to be incurred with their sale). Finished and semi-finished products, sub-products and products and work in progress are carried at production cost, which is less than market value. Production costs include the raw materials incorporated, direct labour and manufacturing overheads.
xii) Accrual accounting
Income and expenditure are recorded in accordance with the accrual accounting principles whereby they are recognised as and when generated regardless of the moment when they are received or paid. Differences between the amounts received and paid and the corresponding revenues and expenses are recorded under "Other current assets", "Other current liabilities" and "Other non-current liabilities".
xiii) Revenue
Revenue is recorded at the fair value of assets received or receivable, net of expectable discounts and returns.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
a) Recognition of costs and income generated by works
The GROUP recognises the results of works, contract by contract, in accordance with the percentage of finishing method, understood to be the ratio between costs incurred by each job up to a given date and the sum of those costs with those estimated to complete the job. Differences between the figures obtained by the application of the degree of finishing to the estimated income and the sums invoiced, are recorded under "Production not invoiced" or "Advance billing", included under "Other current assets" and "Other current liabilities".
With regard to provision of services contracts of subsidiaries abroad, income is recorded on the basis of the bills of quantities of work realised, positive or negative differences between that and the invoicing, calculated contract by contract, being recorded under "Production not invoiced" or "Advance billing", included under "Other current assets" and "Other current liabilities". The impact of the adoption of this policy, compared with that described in the preceding paragraph, does not have a materially relevant effect on the attached financial statements.
Variations of the works affecting the income agreed for the contract are recognised in the income statement for the period, provided it is likely that the customer will approve the revenue caused by the variation and that it can be reliably measured.
Claims for reimbursement of costs not included in the contract price are included in the contract value when the negotiations reach an advanced state at which it is likely that the customer will accept same and they can be reliably measured.
To meet costs to be incurred during the works' warranty period, the GROUP recognises each year a liability to cover this legal obligation, which is determined taking into account the year's production volume and the history of costs incurred in the past with works during the warranty period.
When it is probable that the total costs provided for in the construction contract will exceed the income defined therein, the expected loss is immediately recognised in the income statement for the period.
b) Short-duration civil construction works and public works
In these provision of services contracts the GROUP recognises income and costs as they are invoiced or incurred, respectively.
c) Recognition of costs and income in real-estate business
Relevant costs incurred with real-estate undertakings are calculated taking account the direct cost of construction as well as all costs associated with the preparation of plans and with the licensing of the works. Costs attributable to financing, supervision and inspection of the undertaking are also added to the cost of real-estate undertakings, provided they are under way.
For the purpose of capitalisation of financial charges and costs incurred with the supervision and inspection of the undertaking, it is considered that the undertaking is under way if a decision of the authorities involved is awaited, or if the undertaking is under construction. Should the undertaking not be in one of the foregoing circumstances, it is considered stopped and capitalisation referred to above is suspended.
Sales generated by the real-estate business and the respective costs of the units sold are recorded at the moment the contractual conditions create expectations that the customer will complete the acquisition or when there is a purchase agreement with public entities in respect of rehousing plans. The sales margin is weighted by the percentage of finishing of the building, determined by the ratio between costs incurred and total estimated costs.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
xiv) Cost of preparation of bids
Costs incurred with the preparation of bids for sundry calls for tender are recognised in the income statement for the period in which they are incurred, in view of the fact that the outcome of the bid cannot be controlled.
xv) Own work capitalised
Own work capitalised consists basically of construction and repair work carried out by the companies themselves, as well as major repairs of equipment, and it includes materials, direct labour and overheads.
These costs are capitalised only where the following requirements are met:
- the assets developed are identifiable; - there is strong probability that the assets will come to generate future economic benefits; and - the development costs are reliably measurable.
xvi) Assets and liabilities expressed in foreign currency
All assets and liabilities expressed in foreign currency are translated into the presentation currency using the exchange rates ruling on the reporting date. Currency translation differences, both favourable and unfavourable, stemming from differences between exchange rates ruling on the date of the transactions and those ruling on the date of the collections or payments or balance sheet dates, are recorded as income and costs in the income statement for the period.
In preparing the consolidated financial statements, the assets and liabilities of the financial statements of the GROUP's foreign entities are translated into euros using the exchange rates ruling on the balance sheet date. Costs and income, as well as the cash flows are also translated into euros at the average annual rate. The resultant currency translation difference is recorded under equity under Currency translation reserves. At the time of sale of such foreign entities, the accumulated currency translation differences are recorded in the income statement for the period.
Currency translation differences associated with receivables/ payables whose maturity is not defined but is expected to occur (net investment in foreign operational units) are recorded in the consolidated statement of comprehensive income and are transferred to the income statement for the period when the receivables/ payables are amortised/ disposed of/ settled.
Goodwill and the fair-value adjustments of assets and liabilities acquired as a result of the acquisition of foreign entities are dealt with as assets and liabilities in foreign currency and are translated into euros at the exchange rates ruling on the balance sheet date.
The financial statements of subsidiaries and branches expressed in foreign currencies are translated into euros.
xvii) Income tax
Income tax for the year is calculated on the basis of the taxable income of the companies included in the consolidation, and considers deferred taxation.
Deferred taxes are calculated on the basis of the balance sheet liability method and refer to temporary differences between the values of assets and liabilities for accounting purposes and their respective values for taxation purposes.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Deferred tax assets and liabilities are calculated and valued each year using the tax rates in force on or announced for, the date of reversion of the temporary differences
Deferred tax assets are recorded only when there are reasonable expectations of future tax profits sufficient to use them. On each balance sheet date a reappraisal is performed of the differences underlying deferred tax assets with a view to recognising deferred tax assets not previously recorded because the conditions to do so were not then extant and/or to reduce the amount of deferred tax assets recorded in the light of present expectations of their future recovery.
The amount of tax to be included both under current tax and under deferred tax resulting from transactions or events recognised under reserves is recorded directly under those headings and does not affect the year's result.
xviii) Financial charges on borrowings
Financial charges related with borrowings are generally recognised as a cost in accordance with accrual accounting principles.
Financial charges on borrowings directly related with the acquisition, construction or production of fixed assets or associated with motorway concessions or real-estate projects classified under inventories, are capitalised and come to form part of the cost of the asset. Capitalisation of these charges begins following the start of preparation of the activities involving construction or development of the asset and is interrupted following the start of the use or the end of production or construction of the asset, or in the event that the product in question is suspended.
xix) Provisions
Provisions are recognised when and only when the GROUP has a present obligation (legal or implicit) resulting from a past event and it is probable that, to fulfil such an obligation, there will be an outflow of funds, provided that the amount of the obligation can be reasonably estimated. The provisions are reviewed on each balance sheet date and are adjusted to reflect the best estimate on that date, taking into account the risks and uncertainties inherent in such estimates.. Where a provision is determined taking into account the future cash flows required to settle the obligation it is recorded for their actual value.
Provisions for restructuring costs are recognised by the GROUP whenever there is a formal, detailed restructuring plan that has been communicated to the parties involved.
xx) Pensions
Liabilities for defined-benefit pension plans attributed to some former and present employees of the GROUP are calculated in accordance with the “Projected Unit Credit Method” using the actuarial and financial assumptions best suited to the plan in question.
xxi) Subsidies granted by the State
Subsidies granted to finance personnel training courses are recognised as income during the period of time in which the GROUP incurs the respective costs and are presented in the income statement as a deduction from these costs.
Subsidies granted to finance investment in fixed assets are recorded as deferred income and are recognised in the income statement over the estimated useful life of the assets in question.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
xxii) Impairment of assets other than goodwill
An impairment valuation is undertaken on each balance sheet date and whenever an event or alteration to circumstances is identified, suggesting that the amount at which an asset is carried may not be recovered. In the event that the sum at which an asset is carried is greater than its recoverable value an impairment loss is recognised and is recorded in the income statement under Other operating costs. The amount recoverable is the higher of net selling price and of the value-in-use. The net selling price is the amount that can be obtained on the sale of the asset in an arm's length transaction, less costs directly attributable the sale. The value-in-use is the present value of future estimated cash flows arising from the ongoing use of the asset and from its sale at the end of its useful life. The amount recoverable is estimated for the asset, individually, or, should this not be possible, for the cash- generating unit to which the asset belongs.
Reversal of impairment losses recognised in previous years is recorded when the reasons that caused the recording no longer exist and, consequently, the asset is no longer impaired. Reversal of impairment losses is recognised in the income statement as an operating profit. However, reversal of an impairment loss is undertaken up to the limit of the sum that would be recognised (either through the historic costs or through its revalued value, net of amortisation of depreciation) had the impairment loss not been recorded in previous years.
Evidence that impairment exists in accounts receivable appears where: - the counterparty is in significant financial difficulty; - there are significant delays in payment by the counterparty of interest and principal; and - it become probable that it will be wound up or go into financial restructuring.
In the case of inventories, any reduction of their net realisable value is calculated on the basis of market values and of various inventory-rotation indicators.
For Goodwill and for Financial investments, the recoverable amount is essentially determined on the basis of the latest financial projections in respect of such assets.
xxiii) Balance sheet classification
Assets realisable and liabilities enforceable more than one year after the balance sheet date are classified as non-current assets and liabilities respectively. Additionally, for their nature, deferred tax assets and liabilities and "Provisions" are classified as non-current assets and liabilities (Note 13 Income Tax and Note 29 Provisions, respectively).
xxiv) Contingencies
Contingent liabilities are not recognised in the consolidated financial statements and are disclosed in the notes to the financial statements unless the possibility of an outflow of funds affecting future economic benefits is remote.
A contingent asset is not recognised in the financial statements, but is disclosed in the notes to the financial statements when it is likely that there will be a future economic benefit
xxv) Subsequent events
Events occurring after the balance sheet date that provide additional information on conditions that existed as of the balance sheet date (“adjusting events”) are reflected in the consolidated financial statements. Events following the balance sheet date that provide information on conditions occurring after the balance sheet date (“non-adjusting events”), if material, are disclosed in the notes to the consolidated financial statements.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
xxvi) Judgements and estimates
In preparing the financial statements the GROUP's board of directors based itself on its best knowledge and experience of past and/or current events while taking into account certain assumptions in respect of future events.
The more significant accounting estimates reflected in the consolidated financial statements for the years ended December 31, 2009 & 2008, include:
- fair value and useful lives of the tangible assets, land and buildings in particular; - impairment tests performed on goodwill and on tangible assets; - recording provisions and impairment losses; - recognition of costs and income generated by works in progress; - determination of the fair value of the derivative financial instruments.
The estimates were made on the basis of the best information available on the date of preparation of the consolidated financial statements. However, situations could occur during subsequent periods that, not being predictable at this time, were not taken into account in these estimates. Alterations to these estimates taking place after the date of the consolidated financial statements will be revised in results in a prospective manner, in accordance with the provisions of IAS 8.
xxvii) Consolidated cash-flow statement
The consolidated cash-flow statement is prepared in accordance with IAS 7, using the direct method. The GROUP classifies under “Cash & cash equivalents" investments falling due within three months in respect of which the risk of alteration of value is insignificant, including the blocked sums of term deposits of the concessionaire companies assigned to debt servicing.
The cash-flow statement is divided into operating, financing and investing activities. Operating activities include cash received from customers, payments to suppliers, payments to staff and others related with operating activities. Cash flows involved in investing activities include, in particular, acquisitions and disposals of investments in associates and subsidiaries and cash paid and received stemming form the purchase and sale of fixed assets.
The cash flows related to financing activities include, in particular, cash paid and received in respect of borrowings, finance lease contracts and dividend payments. xxviii) Management of capital invested
The fundamental aim of capital management at the MOTA-ENGIL GROUP is to ensure the continuity of the GROUP's operations in an endeavour to maximise the creation of value for its equityholders, especially through the adoption of an efficient structure of capital employed through optimisation in the balance sheet of the ratio between own and borrowed funds.
The GROUP's capital structure therefore comprises its equity, debt with recourse, debt without recourse and also amounts available as cash & cash equivalents.
Equity includes the fully subscribed and paid up issued capital of MOTA-ENGIL SGPS in the sum of €204,635,695, represented by 204,635,695 ordinary shares each of a par value of €1, admitted to listing in the Euronext Lisbon regulated securities market. It also includes all the reserves of capital accumulated by the GROUP, namely those imposed by law, the free reserves, the asset-revaluation reserves, the currency-translation reserves and the goodwill reserves created on the consolidation of the GROUP companies. Lastly, it also includes previous years' results not paid out to equityholders.
Generally speaking, GROUP debt has two different sources: debt with recourse and debt without recourse. These two categories differ in the type of liability assumed by the GROUP in respect of fulfilment of the payment obligation. On the one hand, while debt with recourse assumed by any GROUP company can be demanded of its equityholders, debt without recourse, assumed solely within
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
the scope of the concession businesses financed under project finance arrangements, is enforceable only as far as the company that took out the loan is concerned and, therefore, only the assets of that company answer for its payment.
The maturity structure of the debt is suited to the characteristics of the assets it finances, with a focus on long-term maturities so as to meet, above all, the GROUP's investments of a permanent nature.
The origin of the capital requirements imposed on the GROUP externally may be legal or contractual or may be required for access to markets.
The main legal requirement is respect of capital is imposed by Article 35 of the Companies Code, which stipulates that the equity of a Company must be more than half the issued capital. At MOTA- ENGIL GROUP there has been no ongoing failure to comply with this rule in that, in those cases where compliance might be temporarily called into question, those measures seen to be most adequate are immediately applied.
Capital requirements imposed contractually mainly involve financing contracts with banks. In more relevant financing transactions, covenants are sometimes established that are linked with ratios that relate the capital structure with the Group's operating profitability. These contractual clauses are defined in the light of negotiations with the financing entities and, throughout the history of the GROUP, there has been no case of breach of such contracts.
A large part of the business carried on by the MOTA-ENGIL GROUP is undertaken in close co-operation with the public sectors of those countries in which it is involved. Both in the construction of public works and in obtaining construction, operating and maintenance licences for public infrastructures, the GROUP faces conditions of access to these markets that are subject to strict regulations and supervision. Some of the conditions of access to these markets require that the bidder has proven financial capacity and robustness, without which it will be excluded. The MOTA-ENGIL GROUP is particularly concerned as to compliance with the requirements usually imposed in this field and, indeed, it has been able to turn this aspect into one of its strong points when compared to its main competitors. This is a competitive advantage compared to its rival bidders in major national and international projects.
xxix) Financial risk management
The GROUP's management of the financial risks that it incurs is set out in Chapter 5 of the management report included in this Report and Accounts.
2. Companies included in the consolidation
As at December 31, 2009, the companies included in the consolidation and the respective consolidation methods, registered offices, business, proportion of issued capital held, date of incorporation and date of acquisition of the equityholdings are as listed in Appendix A.
The main alterations to the consolidation perimeter during 2009 are detailed in Note 36. Variation of perimeter
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
3. Sales & services rendered
The breakdown of sales and services rendered during the years ended December 31, 2009 & 2008, is as follows:
2009 2008
Sales of merchandise 70,199,023 54,204,065 Sales of products 96,014,279 75,093,865 Services Rendered: Public works 1,029,348,723 800,284,246 Civil construction 486,825,526 506,871,169 Public services concessions 322,557,597 323,014,477 Other 126,299,434 109,263,369 2,131,244,582 1,868,731,191
During 2009 and 2008 there was no discontinuation of the businesses of the GROUP.
4. Business segments
The GROUP makes use of its in-house organisation for management purposes as the basis for reporting information by primary segments.
The GROUP is organised as three main business areas – Engineering & Construction, Environment & Services and Transport Concessions – which are co-ordinated and supported by MOTA-ENGIL SGPS and by MOTA-ENGIL SERVIÇOS PARTILHADOS.
The Engineering & Construction segment includes construction activities, public works and property development.
The Environment & Services segment basically covers the companies engaged in solid urban waste collection and treatment, the water and basic sanitation companies, and the port operations companies.
The Transport Concessions segment includes the companies that hold the highway infrastructure concessions.
The figures in respect of MOTA-ENGIL SGPS, MOTA-ENGIL SERVIÇOS PARTILHADOS and the GROUP companies in the Tourism area are included under "Other, eliminations & intra-group" which also includes sums in respect of inter-business segment flows and balances.
As mentioned earlier the MOTA-ENGIL GROUP's reporting by segments has not been altered by the adoption of the IFRS 8 – Operating segments.. Additionally, the valuation criteria and the accounting policies used in the preparation of the report by segments are identical to those used in the attached financial statements.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The financial information by operating segment is broken down as follows:
Others, Engineering & Environment & Transport eliminations & Mota-Engil Construction Services concessions intra-Group Group 2008
Sales & services rendered 1,466,674,093 285,772,683 117,002,109 (717,694) 1,868,731,191 EBITDA 129,693,945 66,367,537 116,741,694 (1,467,037) 311,336,139 Amortizations (43,327,649) (18,941,001) (40,026,649) (1,275,595) (103,570,894) Operating profit 73,651,552 46,747,355 76,671,580 (4,330,145) 192,740,342 Net financial income (31,073,310) (20,933,846) (69,303,695) (8,448,407) (129,759,258)
Gains / (losses) on associated companies 3,386,893 978,190 - 2,924,179 7,289,262 Income tax (10,491,495) (11,339,482) (6,694,537) (1,975,149) (30,500,663) Consolidated net profit of the year attributable: to minority interests (482,503) 10,368,257 (948,570) 267,061 9,204,245 to the Group 35,956,144 5,083,960 1,621,918 (12,096,584) 30,565,438
2009
Sales & services rendered 1,693,864,575 333,482,305 117,488,400 (13,590,698) 2,131,244,582 EBITDA 134,152,064 66,308,914 104,961,816 (1,068,103) 304,354,691 Depreciation & Amortization (52,465,085) (27,594,361) (43,651,934) (2,074,484) (125,785,864) Operating profit 77,627,200 36,597,105 61,276,496 (3,142,586) 172,358,215 Net financial income (22,152,456) (18,145,345) (67,189,468) (7,967,593) (115,454,862) Gains / (losses) on associated companies 7,343,241 492,660 2,209,195 40,523,200 50,568,297 Income tax (16,294,735) (8,510,051) (4,237,732) 1,483,029 (27,559,489) Consolidated net profit of the year attributable: to minority interests 367,786 8,315,909 (1,135,218) 625,592 8,174,069 to the Group 46,155,463 2,118,462 (6,806,291) 30,270,458 71,738,092
As at December 31, 2009, sales and services rendered between business segments are carried under "Other, eliminations and intra-group", and are immaterial.
Gains/(losses) on associate companies during 2009 are essentially caused by the effect of the application of the equity method to the financial investment in MARTIFER, SGPS, SA.
During the years ended December 31, 2009 & 2008, intra-group sales were undertaken at arm's length.
Gains on associate companies are as follows:
Gains / (losses) on associated companies 2009 2008
Engineering & Construction 7,343,241 3,386,893 Environment & Services 492,660 978,190 Transport concessions 2,209,195 -
Holding, others and adjustments 40,523,200 2,924,179 50,568,297 7,289,262
The breakdown of the GROUP's total net assets and liabilities of by primary segments is as follows:
Assets Liabilities 2009 2008 2009 2008
Engineering & Construction 1,875,362,462 1,507,613,672 1,589,789,400 1,265,938,819 Environment & Services 794,814,636 640,908,432 719,619,845 557,379,459 Transport concessions 1,799,250,437 1,469,142,739 1,738,154,900 1,393,988,418
Others, eliminations & intra-Group 144,703,343 91,986,411 190,475,441 151,027,475 4,614,130,878 3,709,651,254 4,238,039,586 3,368,334,171
The GROUP's investments and amortisation by primary segments are as follows:
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Net investment Depreciation & Amortization 2009 2008 2009 2008
Engineering & Construction 114,205,076 119,103,142 52,465,085 43,327,649 Environment & Services 86,973,011 66,440,442 27,594,361 18,941,001 Transport concessions 320,052,879 90,498,000 43,651,934 40,026,649
Others, eliminations & intra-Group (4,773,935) (2,503,687) 2,074,484 1,275,595 516,457,031 273,537,897 125,785,864 103,570,894
The GROUP's business is international in scope and it operates on the Iberian Peninsula, in Central Europe (namely Poland, Hungary, Czech Republic, Romania, Slovakia), in Africa (namely Angola, Mozambique, Malawi, Benin, Algeria, Cape Verde and Chad), in North America (USA) and in South America (Peru, Mexico and Venezuela). There are therefore three major geographic business segments: Iberian Peninsula, Central Europe, and Africa & America.
The variation in 2009 in the Environment & Services segment in respect of the value of depreciation was essentially the result of the alteration of the consolidation method of the INDAQUA SUB-GROUP, which changed from the proportional to the global integration method.
The breakdown of Sales & services rendered by geographic segment is as follows:
Sales & services rendered 2009 2008
Iberian Peninsula 1,522,004,078 1,311,866,818 Central Europe 294,281,626 332,407,757 Africa & America 569,495,408 424,205,608
Others, eliminations & intra-Group (254,536,530) (199,748,992) 2,131,244,582 1,868,731,191
As at December 31, 2009 & 2008, the GROUP's sales and provision of services involved a wide range of customers, none of which accounted for over 5% of the GROUP'S TOTAL TURNOVER.
The breakdown of assets held and investments made by geographic segment is as follows:
Assets Net investment 2009 2008 2009 2008
Iberian Peninsula 4,428,208,861 3,567,659,678 399,879,602 220,881,913 Central Europe 323,068,657 294,675,988 47,078,504 25,480,879 Africa & America 733,399,327 479,786,932 95,454,289 29,678,792
Others, eliminations & intra-Group (870,545,967) (632,471,344) (25,955,364) (2,503,687) 4,614,130,878 3,709,651,254 516,457,031 273,537,897
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
5. Cost of merchandise and of subcontracts
The breakdown of the cost of merchandise, materials consumed and of subcontracts during the years ended December 31, 2009 & 2008, is as follows:
Raw & subsidiary materials & Merchandise consumables Total
2008
Opening stocks 49,433,799 42,153,300 91,587,099 Restatement - (932,249) (932,249) Opening stocks as restated 49,433,799 41,221,051 90,654,850 Variation of perimeter (12,362,801) 124,821 (12,237,980) Purchases 61,385,154 329,395,849 390,781,003 Closing stocks (56,640,111) (64,240,582) (120,880,693)
41,816,041 306,501,139 348,317,180
Subcontracts 662,915,399 Cost of Goods Sold, Materials Consumed & Subcontracts 1,011,232,579
2009 Opening stocks 56,640,111 64,240,582 120,880,693 Variation of perimeter (146,548) (3,750) (150,298) Purchases 38,452,341 336,031,080 374,483,421 Closing stocks (54,081,697) (52,524,857) (106,606,554) 40,864,207 347,743,055 388,607,262
Subcontracts 891,814,578 Cost of Goods Sold, Materials Consumed & Subcontracts 1,280,421,840
6. Third-party Supplies & Services
The breakdown of third-party supplies & services during the years ended December 31, 2009 & 2008, is as follows:
2009 2008
Leases & rents 123,540,738 106,448,843 Specialised works 69,160,849 59,887,164 Transport, travel and board & lodging 48,811,225 36,979,537 Maintenance & repairs 31,793,157 25,302,881 Fuel 16,338,260 17,110,128 Insurance 12,973,514 9,236,804 Commissions & fees 11,497,525 9,891,553 Water & electricity 9,376,614 8,745,933 Utensils & office equipment 8,016,145 6,991,794 Vigilance & security 7,425,955 6,389,036 Communications 5,467,707 7,715,349 Advertising & publicity 2,146,497 2,265,320 Other supplies & services 36,232,198 47,633,522 382,780,384 344,597,864
“Rents & leases” as at December 31, 2009 & 2008, includes the sums of €7,153,210 and €7,068,990 respectively, in respect of the rents of operating lease transactions.
Operating lease payments falling due are as follows:
Maturity 2009 2008
1 year 7,174,670 7,090,197 Between 2 and 5 years 8,983,687 11,870,243 more than 5 years 3,108,634 3,543,350 19,266,991 22,503,790
The GROUP's main operating lease contracts are in respect of premises' leases and vehicle rental and hardware leases.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
7. Staff costs
The breakdown of staff costs during the years ended December 31, 2009 & 2008, is as follows:
2009 2008
Remuneration 252,937,725 241,650,928 Social security charges: Pensions & other benefits granted 1,656,828 1,293,217 Other 71,571,506 66,636,520 326,166,059 309,580,665
Liabilities for Pension and Retirement Plans are detailed in Note 32.
As December 31, 2009 & 2008, “Other” essentially includes costs borne in respect of Social Security, meal & sickness subsidies, and workmen's compensation insurance.
Average staff numbers
The average number of personnel in the service of the GROUP during 2009 & 2008 is broken down as follows:
2009 2008
Management 170 154 Employees 8,240 6,745 Workers 10,892 10,867 19,302 17,766
Companies in Portugal 9,063 8,258 Companies abroad 3,996 3,917 Branch offices 6,243 5,591 19,302 17,766
8. Other operating income /(costs)
Other operating income and costs during the years ended December 31, 2009 & 2008, are as follows:
2009 2008
Donations (2,213,192) (706,205) Gains/(losses) on the sale of fixed assets 1,557,066 6,029,560 Taxes (15,582,925) (17,362,053) Operating subsidies 964,849 733,315 Own work capitalised 32,434,796 15,632,307 Other income/(costs) (18,024,629) (12,067,420) (864,035) (7,740,496)
The variation under “Taxes” essentially refers to value added tax (VAT) not-deductible on property developments.
“Own work capitalised” essentially includes amounts in respect of the construction of property developments undertaken by the GROUP, as well as those in respect of the development of the Multi- Lane Free-Flow (MLFF) electronic toll systems along the COSTA DA PRATA and GREATER PORTO concessions.
78 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
9. Depreciation
Depreciation charges for the years ended December 31, 2009 & 2008, are as follows:
2009 2008
Amortization of intangible fixed assets for the year:
Development costs 1,651,014 739,790 Software & other rights 2,193,541 1,427,711 Concession Operation Licenses 1,731,557 1,591,000 5,576,112 3,758,501
Depreciation of tangible fixed assets for the year:
Land & buildings 10,792,685 7,199,526 Equipment Engineering & Construction 46,368,348 37,672,327 Environment & Services 15,562,523 10,994,708 Transport concessions 43,376,774 39,678,643 Other & eliminations 290,525 148,060 105,598,170 88,493,738
Other tangible fixed assets 3,818,897 4,119,129
120,209,752 99,812,393 125,785,864 103,570,894
The increase of depreciation during 2009, when compared to 2008, is essentially the result of the investments made by the GROUP during the current year, and also of the alteration of the consolidation method used for the INDAQUA SUB-GROUP and by the revision of the useful lives of some of the equipment of this sub-group.
10. Provisions and impairment losses
Provisions and impairment losses for the years ended December 31, 2009 & 2008, are as follows:
2009 2008
Provisions (Note 29. Provisions) Engineering & Construction 3,239,093 5,163,117 Environment & Services 1,452,032 1,654,672 4,691,125 6,817,789
Impairment losses stocks (Note 23. Stocks) Engineering & Construction 1,295,736 1,633,660 Environment & Services 56,941 284 1,352,677 1,633,944
trade receivables and other debtors (Note 24. Other financial assets) Engineering & Construction 3,361,658 9,204,123 Environment & Services 1,373,424 633,913 Transport concessions 33,385 43,465 Others & eliminations - 2,412 4,768,467 9,883,913
Reversal of provisions and impairment losses Engineering & Construction (3,836,709) (3,286,155) Environment & Services (764,948) (24,188) Others & eliminations - (400) (4,601,657) (3,310,743)
Total of provisions and impairment losses 6,210,612 15,024,903
79 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
11. Financial results
The breakdown of financial costs during the years ended December 31, 2009 & 2008, is as follows:
2009 2008 Financial income & gains
Loans and accounts receivable: Interest income 25,406,994 25,776,249 Payments discounts received 767,610 427,299 Exchange gains 31,952,758 22,676,281
Gains on sales of financial investments 4,279,578 1,654,369
Other financial assets & liabilities Other financial income & gains 3,314,510 2,423,751 65,721,450 52,957,949
Financial costs & losses
Loans and accounts payable: Interest income 117,102,324 129,559,940 Payments discounts received 44,876 38,710 Exchange gains 34,090,104 26,881,940
Impairment losses in Available-for-sale financial assets (Note 21) 1,087,535 1,376,010
Losses on investment properties Depreciation of investment in real-estate in Angola (Note 1-vii)) 408,707 412,003
Other financial assets & liabilities Other financial costs & losses 28,442,766 24,448,604 181,176,312 182,717,207 (115,454,862) (129,759,258)
"Other financial costs & losses" essentially includes costs of bank guarantees, setting up borrowings and sundry commissions and costs debited by financial institutions.
The breakdown of “Interest expense” as at December 31, 2009 & 2008, is as follows:
2008 With recourse Without recourse Total
Non-convertible bond loans 6,864,577 - 6,864,577 Amounts owe to credit institutions: Bank loans 19,545,540 58,945,402 78,490,942 Overdraft facilities 6,802,117 71,479 6,873,596 Guaranteed accounts 3,259,969 169,486 3,429,455 Other loans obtained: Commercial paper issues 14,307,212 - 14,307,212 Other 961,219 - 961,219 51,740,634 59,186,367 110,927,001
Other interest expense(factoring, leasing and others) 18,422,064 210,875 18,632,939 70,162,698 59,397,242 129,559,940
2009 With recourse Without recourse Total
Non-convertible bond loans 6,901,828 - 6,901,828 Amounts owe to credit institutions: Bank loans 23,904,100 54,761,368 78,665,468 Overdraft facilities 8,057,895 116,342 8,174,237 Guaranteed accounts 2,594,892 232,582 2,827,474 Other loans obtained: Commercial paper issues 7,215,890 - 7,215,890 Other 1,523,107 - 1,523,107 50,197,712 55,110,292 105,308,004
Other interest expense (factoring, leasing and others) 11,361,213 433,107 11,794,320 61,558,925 55,543,399 117,102,324
80 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The breakdown of financial charges capitalised as at December 31, 2009 & 2008, is as follows:
2009 2008
Fixed assets 16,221,815 2,565,079 Inventories 3,569,034 2,536,733 19,790,849 5,101,812
The increase of financial charges capitalised under fixed assets is essentially the result of the capitalisations undertaken by the Douro Interior and Mexico concessionaires..
For the purpose of capitalising financial charges in the acquisition cost of the assets under construction referred to above, as at December 31, 2009 & 2008, average rates of 4.19% and 6.15% respectively were used.
As at December 31, 2009 & 2008, the GROUP's sensitivity to alterations to the interest rates index is as follows:
Estimated impact 2009 2008
Variation of financial profit & loss on a 1 p.p. alteration of the interest rate applied to the entire debt 22,880,712 20,314,457
Fixed-rate hedging (7,498,693) (7,202,538) Interest-rate derivates instruments hedging (6,183,618) (4,783,965)
Sensitivity of financial profit & loss to interest-rate variations: 9,198,401 8,327,954
12. Gains & losses on associate companies
The breakdown of gains on associate companies for the years ended December 31, 2009 & 2008, is as follows:
2009 2008
Ambilital 184,821 188,906 Asinter 224,243 241,289 Auto Sueco Angola 7,217,841 3,788,211 Citrup 95,174 113,179 Civibral - 784 Cosamo 49,559 - Jardimaia - 50,126 Somafel e Ferrovias, ACE - 13,814 Ecolezíria 34,512 27,762 Lusoponte 2,210,093 - Mamaia 354,003 - Group Martifer 40,389,467 2,789,983 Nadorobol 15,109 - Soltysowska 284,751 87,472 Tersado - 342,480 Vortal 424,388 422,078 51,483,961 8,066,084
81 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The breakdown of losses on associate companies for the years ended December 31, 2009 & 2008, is as follows:
2009 2008
Bay 6.3 6,730 - Bay office 4,860 - Bay park 73,882 - Bay tower 1,166 - Bay well 1,833 - Berd 68,558 112,622 Cimertex Angola - 41,346 Engber 445 - Gestiponte 898 - Haçor 2,392 - Hidrocontrato - 5,901 Inovia 653 1,085 Logz 78,732 24,881 Nova Ponte, ACE 6,631 32,386 Obolinvest 35,222 551,145 Obol XI 582,851 - Sampaio 16,416 - Tersado 31,377 - Turalgo 3,018 6,092 Vibeiras, ACE - 1,364 915,664 776,822
Gains / (losses) on associate companies 50,568,297 7,289,262
13. Income tax
The detail of and movements under Deferred tax assets and liabilities as at December 31, 2009 & 2008, in accordance with the temporary differences that gave rise thereto are as follows
Deferred Tax Assets 2008 Efect in results Efect in reserves 2009
Provisions not accepted for tax purposes 11,845,412 2,358,869 - 14,204,281 Accrued costs not accepted for tax purposes 1,453,868 5,083,403 - 6,537,271 Tax losses 17,158,560 2,765,576 - 19,924,136 Reduction of depreciation not accepted for tax purposes 1,082,906 1,324,287 - 2,407,193 Fair value of derivates (Note 27) 650,398 - 2,921,441 2,921,441 Others 1,184,271 2,206,004 303,973 4,344,646 33,375,415 13,738,139 3,225,414 50,338,968
Deferred Tax Liabilities 2008 Efect in results Efect in reserves 2009
Revaluation of fixed assets 7,999,414 (65,387) - 7,934,027 Losses on incorporated joint ventures 1,910,248 18,999 - 1,929,247 Deferred capital gains tax 559,641 (195,676) - 363,965 Depreciation not accepted for tax purposes 391,710 1,582,396 - 1,974,106 Fair value on incorporated joint ventures 9,403,164 (422,896) - 8,980,268 Untaxed accrued income 2,308,372 3,400,340 - 5,708,712 Other 4,159,193 2,503,338 - 6,662,531
26,731,742 6,821,114 - 33,552,856
As at December 31, 2009, the effect on the income statement of the entry of deferred tax assets and liabilities was positive in the sum of €6,917,025, the effect on equity amounting to €3,225,414.
82 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
As at December 31, 2009, the deferred tax assets recorded by companies in respect of tax losses carried forward were as follows, using the exchange rates ruling on that date:
Deferred tax Tax losses assets Year of expiry Year booked:
up to & including 2005 3,852,297 963,666 2011 2006 2,160,113 568,758 2012 2007 11,480,890 2,857,362 2013 2008 44,871,299 9,049,439 2014 2009 25,574,346 6,484,911 2015 87,938,945 19,924,136
As at December 31, 2009, deferred tax assets to be recognised as a result of tax losses were evaluated. In those cases that gave rise to deferred tax assets, the assets were recorded only to the extent that it was probable that there would be taxable profits in the future that could be used to recoup the tax losses of deductible taxable differences.. This valuation was based on the business plans of the GROUP companies, periodically reviewed and updated, and on the tax planning opportunities available and identified.
As at December 31, 2009, there were tax losses carried forward in the sum of €151,844,381, the deferred tax assets of which have not been recorded from reasons of prudence.
Deferred tax Tax losses assets Year of expiry Year booked:
up to & including 2005 39,274,295 8,009,069 2011 2006 32,764,337 6,497,993 2012 2007 17,887,938 4,784,584 2013 2008 43,691,974 7,909,999 2014 2009 18,225,837 3,637,409 2015 151,844,381 30,839,054
Differences to be deducted from taxable income, giving rise to deferred tax assets, are as follows:
2009 2008
Provisions not accepted for tax purposes (55,470,675) (44,336,812) Accrued costs not accepted for tax purposes (29,389,316) (6,244,496) Tax losses (87,938,945) (63,223,513) Reduction of depreciation not accepted for tax purposes (11,118,331) (4,164,567) Fair value of derivates (Note 27) (11,685,764) (2,601,593) Others (16,164,981) (2,618,496) (211,768,012) (123,189,477)
Differences to be added to taxable profits, giving rise to deferred tax liabilities, are as follows:
2009 2008
Revaluation of fixed assets 30,267,708 29,240,893 Losses on incorporated joint ventures 7,420,181 7,418,524 Deferred capital gains tax 1,374,901 1,529,897 Depreciation not accepted for tax purposes 8,536,212 5,005,889 Fair value on incorporated joint ventures 34,526,635 36,154,310 Untaxed accrued income 25,873,013 891,271 Other 25,855,850 11,307,531 133,854,500 91,548,315
83 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Details of Income tax recognised for the years ended December 31, 2009 & 2008, are as follows:
2009 2008
Current tax 34,476,514 38,466,932 Deferred tax (6,917,025) (7,966,269) 27,559,489 30,500,663
Reconciliation of the tax for the year and current tax is as follows:
2009 2008
Current tax 34,476,514 38,466,932
Net reversion of taxes brought forward (2,792,395) (5,468,999) Deferred taxes related to amortising the fixed-asset revaluation reserves (627,185) (576,091) Reversion of deferred taxes generated by temporary differences (1,753,626) (1,671,544) Deferred taxes in respect of changes to the tax rates or of the introduction or abolition of taxes 184,853 572,126 Other differences not previously recognised as deferred taxes (1,928,672) (821,761) Deferred tax (6,917,025) (7,966,269) Tax of the year 27,559,489 30,500,663 Real tax rate 25.6% 43.4%
MOTA-ENGIL SGPS and its domestic subsidiaries are taxed individually and are subject to corporate income tax (IRC) at the normal rate of 25%. In accordance with the location of the registered offices of the subsidiaries, the income tax is increased by a municipal surcharge of up to 1.5% leading to an aggregate tax rate of 26.5%.
As at December 31, 2009 & 2008, reconciliation between the nominal and real income tax rates was as follows:
Rate Tax base tax
Nominal rate & tax on income 26.5% 107,471,650 28,479,987
Results of associates using the equity method -12.5% (50,568,297) (13,400,599) Difference between tax and book gains and losses -0.3% (1,174,122) (311,142) Tax losses for which no deferred tax assets were recognised 10.4% 42,332,980 11,218,240 Reversal of losses carried forward 0.6% 2,427,352 606,838 Differentiated tax rates -0.5% (2,200,775) (583,205) Autonomous taxation & other costs (other than provisions), non fiscal & non revertible 2.6% 10,380,481 2,750,827 Other adjustments -1.1% (4,533,800) (1,201,457)
Real rate & tax on income 25.6% 27,559,489
In accordance with prevailing legislation, tax returns are subject to revision and correction by the tax authorities during a period of four years (ten years for Social Security up to and including 2000, and five years as from 2001), except in the event of tax losses or tax benefits, or if inspections, claims or contestation are in progress, in which case, depending on the circumstances, the deadlines are increased or suspended. Therefore, the tax returns for 2006 to 2009 may still be subject to review.. The GROUP's board of directors is of the opinion that any corrections arising from different interpretations of prevailing legislation by the tax authorities will not have a significant effect on the attached consolidated financial statements.
As corroborated by our lawyers and tax consultants, there are no material assets or liabilities associated with probable or possible tax contingencies that ought to be disclosed in the Notes to the consolidated financial statements as at December 31, 2009.
84 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
14. Dividends
The Individual Management Report contains the following proposal: the Board of Directors of MOTA- ENGIL, SGPS, SA, proposes to the Annual General Meeting the following appropriation of the Net Profit for the year in the sum of €56,078,279;
a) to legal reserve 5% or €2,803,913.95;
b) for distribution to the Board of Directors under the terms of article 27.3 of the articles of association, the sum of €700,000, or about 1.2%;
c) for distribution to equityholders, a total of €22,509,926.45, or 11 cents per share, subject to tax; and
d) to free reserves, the remainder, or €30,064,438.60.
On May 15, 2009, a start was made to payment of the dividend of €0.11 per share in respect of fiscal 2008, a total of €22,509,926.45 having been paid.
On April 28, 2008, a start was made to payment of the dividend of €0.11 per share in respect of fiscal 2007, a total of €22,509,926.45 having been paid.
15. Earnings per share
The COMPANY has issued only ordinary shares, and there are therefore no special dividend or voting rights.
There is no situation within the GROUP that could constitute a reduction of earnings per share caused by options, warrants, convertible bonds or other rights linked to ordinary shares.
There is therefore no dissimilarity between the calculation of basic earnings per share and of diluted earnings per share.
No ordinary shares were issued during 2009 and 2008 The average number of ordinary shares during these years was affected only by the number of treasury shares as detailed in Note 25. Issued capital and reserves
Determination of earnings per share in 2009 and 2008 was as follows:
2009 2008
Consolidated net profit/(loss) attributable to the Group (I) 71,738,092 30,565,438
Total number of ordinary shares (II) 204,635,695 204,635,695 Number of own shares at the year-end (III) 10,972,328 10,636,328 Weighted average number of own shares (IV) 10,963,574 9,846,950 Number of shares outstanding (II - IV) 193,672,121 194,788,745
Earnings per share: basic (I) / (II - IV) 0.3704 0.1569 diluted (I) / (II - IV) 0.3704 0.1569
85 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
16. Goodwill
The breakdown of goodwill in respect of the years to December 31, 2009 & 2008, is as follows:
2009 2008
Alterations to the Impairments of consolidation Accumulated Gross goodwill the year perimeter impairments Net goodwill Net goodwill
Aenor 8,636,270 - - - 8,636,270 8,636,270 Aurimove 83,242 - - (33,297) 49,945 49,945 Bouncer 1,817,149 - - - 1,817,149 1,789,729 Corgimobil 635,615 - - - 635,615 635,615 Correia & Correia 969,823 - - (51,653) 918,170 918,170 Crespo 1,343,052 - - - 1,343,052 1,343,052 Ekosrodowisko 279,204 (75,109) - - 204,095 328,055 Grossiman 2,146,157 - - - 2,146,157 2,146,157 Indaqua 5,436,086 - - - 5,436,086 2,351,508 Indaqua Feira 182,101 - - - 182,101 78,048 Lokemark 521,418 - - - 521,418 401,861 Lusoscut BLA 8,536,592 - - - 8,536,592 8,536,592 Lusoscut CP 4,998,543 - - - 4,998,543 4,998,543 Lusoscut GP 5,387,300 - - - 5,387,300 5,387,300 Manvia 1,072,318 - - (74,662) 997,656 997,656 MKC 271,708 - - - 271,708 271,708 Mota-Engil Central Europe Slovakia 818,242 - - - 818,242 100,262 Mota-Engil Central Europe Poland 4,201,338 - - (928,847) 3,272,491 3,233,884 Mota-Engil S. Tomé 142,752 - - - 142,752 142,752 Mota-Viso 19,900 - - (7,960) 11,940 11,940 Multiterminal 26,455,556 - - - 26,455,556 26,455,556 Novaflex 422,888 - - - 422,888 422,888 Probigalp 1,343,312 - - - 1,343,312 1,343,312 Mota-Engil Pavimentaçãoes 11,375 - - - 11,375 11,375 Mota-Engil Betões e Pré-fabricados 1,053,337 - - (421,335) 632,002 632,002 Mota-Engil Central Europe Czech Rep. 1,153,611 - - - 1,153,611 1,148,630 Sadoport 2,303,244 - (176,166) (1,585,500) 541,578 - Suma 8,719,508 - - (841,456) 7,878,052 7,878,052 Tersado 229,497 - - - 229,497 229,497 Tertir 74,225,866 - - - 74,225,866 73,395,103 Tracevia 1,908,225 - - - 1,908,225 1,908,225 Transporlixos 751,927 - - - 751,927 - Tratofoz 174,405 - - - 174,405 174,405 Triu 3,928,391 - - - 3,928,391 3,928,391 Vibeiras 189,314 - - - 189,314 189,314 170,369,266 (75,109) (176,166) (3,944,710) 166,173,280 160,075,797
Movements under Goodwill during the years ended December 31, 2009 & 2008, were as follows:
% of acquisition 2009 2008
Goodwill at the beginning of the year 160,075,797 157,753,345
Increases of goodwill Ekosrodowisko 20% 15,540 - Indaqua 7% 3,084,578 - Lokemark 21% 119,557 - Mota-Engil Central Europe Slovakia 40% 717,980 - Sadoport 10% 541,578 - Mota-Engil Central Europe Czech Rep. 10% - 325,145 Tertir 2% 830,763 - Tracevia 25% - 1,908,225 Transporlixos 100% 751,927 - Tratofoz 100% - 174,405 Triu 100% - 3,928,391 Outros - 2,681 6,061,923 6,338,847
86 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
2009 2008 Impairment losses Ekosrodowisko (75,109) - Sadoport (variation of perimeter) (176,166) (1,585,500) (251,275) (1,585,500)
Alterations of goodwill for perimeter variations Martifer Group (Note 20. Investments in associate companies) - (870,612) Indaqua Feira 104,053 - Jardimaia - (79,737) Sadoport 176,166 - Vortal (Note 20. Investments in associate companies) - (986,650) 280,219 (1,936,999)
Alterations to goodwill for currency updates Bouncer 27,420 (16,837) Ekosrodowisko (64,391) 26,899 Mota-Engil Central Europe Poland 38,607 (503,958) Mota-Engil Central Europe Czech Rep. 4,980 - 6,616 (493,896)
Goodwill at the end of the year 166,173,280 160,075,797
The acquisitions referred to above were recorded using the full consolidation method and cash was paid in consideration of their acquisition. The GROUP did not sell, as a result of these acquisitions, any of the operations undertaken by the companies that were bought.
The GROUP performs yearly impairment tests on goodwill as determined by Indent i) of the Main valuation criteria in Note 1. Accounting Policies As at December 31, 2009, the methods and assumptions used to assess the existence or otherwise of impairment in respect of the main figures for goodwill carried in the attached financial statements were as follows:
Mota-Engil Central Aenor Group Suma Group Europe Poland Tertir Group
Net value of goodwill 27,558,705 12,981,258 3,272,491 100,681,422
Method used Value in use Value in use Value in use Value in use
Basis used Business plans Forecasts Forecasts Business plans
Period used Useful life 5 years 5 years Useful life
Growth rate of cash-flows Year n+1 n.a 2% 5% n.a Year n+3 n.a 2% 10% n.a Growth rate of cash-flows in perpetuity n.a 1% 3% n.a
Discount rate used 6,5 % to 10% 8% 9% 8%
87 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Value-in-use corresponds to the estimated present value of future cash flows, as determined on the basis of budgets and business plans duly approved by the Group's board of directors which cover a period of five years, on average, with the exception of the concessions projects.. Cash-flow projections beyond five years have been extrapolated using a fixed growth rate in perpetuity, which does not exceed the future average growth rate of the revenues of the sector in which the company operates.
The main assumptions used to determine the value-in-use essentially include: (i) the subsidiary's market share; (ii) the growth prospects for the market in which it operates; (iii) the regulatory changes that could come to influence the subsidiary's business; and (iv) the required level of investments, etc. Quantification of the said assumptions was undertaken on the basis of historic data and of the experience of the Group's board of directors. Nevertheless, these assumptions could be affected by phenomena of a political, economic or legal nature that are unpredictable at this time.
As at December 31, 2009, as a result of impairment tests performed, an impairment loss was recorded corresponding to the total value of the goodwill in EKOSRODOWISKO. As at December 31, 2009, there was a variation of the value of the impairment recorded at SADOPORT owing to the alteration of the perimeter, which had no impact on the year's results.
As at December 31, 2008, as a result of impairment tests performed, an impairment loss was recorded corresponding to the total value of the goodwill in SADOPORT.
Acquisitions of financial holdings during 2009 did not have a material impact on the GROUP's Assets, Liabilities, Costs and Income and were not therefore disclosed.
The process of assigning fair value to the assets and liabilities acquired as a result of business combinations occurring in 2009 has not yet been concluded. Therefore, the resultant acquisition differences have been recognised under Goodwill. The Group will conclude this process in 2010.
The MOTA-ENGIL GROUP acquired no materially significant financial holding between December 31, 2009, and the date of approval of these financial statements.
17. Intangible fixed assets
The breakdown of the net values of fixed assets under concession per business area in respect of fiscal 2009 and 2008 is as follows:
Engineering & Environment & Transport Other & Mota-Engil Construction Services concessions eliminations Group
2008
Development costs 555,149 1,280,222 656,945 25,581 2,517,897 Software & other rights 1,198,054 1,048,946 39,809 456,473 2,743,282 Concession Operation Licenses - 38,849,000 - - 38,849,000 Fixed assets in progress 23,120 1,420,966 6,727 446,814 1,897,627 Other intangible fixed assets - - 92,920 - 92,920 1,776,323 42,599,134 796,401 928,868 46,100,726
2009
Development costs 613,569 3,414,892 453,984 (13,281) 4,469,164 Software & other rights 1,602,946 1,500,710 33,063 603,500 3,740,219 Concession Operation Licenses - 40,505,917 53,189,966 - 93,695,883 Fixed assets in progress 237,500 187,983 - 1,119,747 1,545,230 Other intangible fixed assets - - 65,061 (1) 65,060 2,454,015 45,609,502 53,742,074 1,709,965 103,515,556
88 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The breakdown of the gross values of intangible fixed assets in respect of the years ended December 31, 2009 & 2008 is as follows:
Concession Software & Operation Fixed assets in Other intangible Development costs other rights Licenses progress fixed assets Total
2008
Opening balance 11,019,851 10,390,224 42,031,000 800,327 104,140 64,345,542 Increases 669,263 1,064,241 - 1,813,436 96,915 3,643,855 Disposals - (117,627) - - - (117,627) Write-offs (13,265) (7,822) - - - (21,087) Exchange Diferences (23,103) (154,204) - (3,966) - (181,273) Variation of perimeter 646,060 (97,312) - (206,897) (76,161) 265,690 Transfers & other movements 174,635 45,638 - (505,273) (31,974) (316,974) 12,473,441 11,123,138 42,031,000 1,897,627 92,920 67,618,126
2009 30,907,862 (40,133,373) (1,804,707) 67,525,206
Opening balance 12,473,441 11,123,138 42,031,000 1,897,627 92,920 67,618,126 Increases 1,400,606 1,491,926 56,578,440 2,328,380 61,878 61,861,230 Disposals (385,259) (27,714) - - - (412,973) Write-offs (261,719) (112,871) - - - (374,590) Exchange Diferences (5,317) 1,874 - 265 - (3,178) Variation of perimeter 3,755,383 (57,078) - 21,189 - 3,719,494 Transfers & other movements 680,428 2,039,811 - (2,702,231) (89,738) (71,730) 17,657,563 14,459,086 98,609,440 1,545,230 65,060 132,336,379
The increase during 2009 under “Concessions operating licences” is essentially the result of the payment to the Mexican state of an operating licence for a Motorway concession in Mexico.
The amount carried under “Concessions operating licences” in 2008 corresponds to the value assigned to the port concessions as a result of the determination of the fair value of the assets and liabilities acquired from the TERTIR GROUP and from MULTITERMINAL at the time of imputation of the cost of the business combination undertaken in 2007 in the light of IFRS 3 – Business combinations
Information on amortisation of and impairment losses on intangible fixed assets in respect of the years ended December 31, 2009 & 2008, is as follows:
Concession Software & Operation Fixed assets in Other intangible Development costs other rights Licenses progress fixed assets Total
2008
Opening balance (8,744,002) (7,038,629) (1,591,000) - - (17,373,631) Increases (739,790) (1,427,711) (1,591,000) - - (3,758,501) Disposals - 117,627 - - - 117,627 Write-offs 13,265 7,125 - - - 20,390 Exchange Diferences 20,023 73,828 - - - 93,851 Variation of perimeter (507,794) 26,473 - - - (481,321) Transfers & other movements 2,754 (138,569) - - - (135,815) (9,955,544) (8,379,856) (3,182,000) - - (21,517,400)
- - - - 2009
Opening balance (9,955,544) (8,379,856) (3,182,000) - - (21,517,400) Increases (1,651,014) (2,193,541) (1,731,557) - - (5,576,112) Disposals 385,259 27,714 - - - 412,973 Write-offs 261,719 96,303 - - - 358,022 Exchange Diferences 5,317 (1,874) - - - 3,443 Variation of perimeter (2,163,549) (14,565) - - - (2,178,114) Transfers & other movements (70,587) (253,048) - - - (323,635) (13,188,399) (10,718,867) (4,913,557) - - (28,820,823)
Net Value
2008 2,517,897 2,743,282 38,849,000 1,897,627 92,920 46,100,726
2009 4,469,164 3,740,219 93,695,883 1,545,230 65,060 103,515,556
The operating licences in respect of the concessions associated with the TERTIR GROUP are being written down over a period of 26 years.
The sums in respect of the LUSOPONTE operating licence are carried under investments using the equity method.
89 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Gauging the existence or otherwise of impairment in respect of the main amounts of assets under concession is performed using the Business Plans of the companies in question, as mentioned in Note 16 Goodwill in respect of impairment tests on goodwill.
The valuation criteria established by the GROUP for valuation of these intangible fixed assets are detailed in Indent ii) of the Main valuation criteria in Note 1. Accounting Policies
18. Fixed assets under concession
The breakdown of the net values of fixed assets under concession per business area in respect of fiscal 2009 and 2008 is as follows:
Engineering & Environment & Transport Other & Mota-Engil Construction Services concessions eliminations Group
2008
Land & buildings - 55,230,554 18,675 1 55,249,230 Equipment - 42,193,430 962,108,997 (1) 1,004,302,426 Tangible fixed assets in progress - 5,803,102 89,964,372 - 95,767,474 Other tangible fixed assets - 7,353,962 455,778 - 7,809,740 - 110,581,048 1,052,547,822 - 1,163,128,870
2009
Land & buildings - 124,927,306 27,041 1 124,954,348 Equipment - 41,177,630 1,043,084,028 (2) 1,084,261,656 Tangible fixed assets in progress - 24,244,803 104,695,341 (1) 128,940,143 Other tangible fixed assets - 6,534,997 14,734,933 3 21,269,933 - 196,884,736 1,162,541,343 1 1,359,426,080
The information on gross tangible fixed assets under concession in respect of the years ended December 31, 2009 & 2008, is as follows:
Tangible fixed assets in Land & buildings Equipment progress Other fixed assets Total
2008
Opening balance 37,817,379 1,129,101,959 53,200,355 39,753,954 1,259,873,647 Increases 5,154,499 8,057,526 70,378,800 1,524,722 85,115,547 Disposals (173,237) (593,411) (303,817) (1,151,045) (2,221,510) Write-offs (83,941) (124,680) (0) (1,913) (210,534) Variation of perimeter (357,108) 6,386 398,630 1,708 49,616 Transfers & other movements 23,097,423 8,743,270 (27,906,494) (1,678,426) 2,255,773 65,455,015 1,145,191,050 95,767,474 38,449,000 1,344,862,539
2009 1,079,736,035
Opening balance 65,455,015 1,145,191,050 95,767,474 38,449,000 1,344,862,539 Increases 18,874,366 7,594,025 158,422,677 16,901,219 201,792,287 Disposals - (286,583) (2,198,008) (4,963) (2,489,554) Write-offs - (51,979) (63,946) (31) (115,956) Exchange Diferences - 168 - 47 215 Variation of perimeter 51,127,498 3,056,068 7,338,152 21,797 61,543,515 Transfers & other movements 10,804,221 120,802,143 (130,326,206) (1,583,546) (303,388) 146,261,100 1,276,304,892 128,940,143 53,783,523 1,605,289,658
The sums recorded under the variation of the perimeter are mostly the result of the alteration of the method of consolidation of the INDAQUA SUB-GROUP from proportional to global integration.
90 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Information on the amounts of accumulated depreciation and impairment losses in respect of fixed assets under concession in respect of the years ended December 31, 2009 & 2008, is as follows:
Tangible fixed assets in Land & buildings Equipment progress Other fixed assets Total
2008
Opening balance (8,206,265) (96,173,248) - (29,818,104) (134,197,617) Increases (2,113,000) (45,305,610) - (2,527,475) (49,946,085) Disposals - 505,456 - 1,108,771 1,614,227 Write-offs 59,775 75,246 - 1,638 136,659 Variation of perimeter 53,705 13,566 - 30 67,301 Transfers & other movements - (4,034) - 595,880 591,846 (10,205,785) (140,888,624) - (30,639,260) (181,733,669)
2009 -
Opening balance (10,205,785) (140,888,624) - (30,639,260) (181,733,669) Increases (5,056,854) (50,378,692) - (2,757,308) (58,192,854) Disposals - 203,419 - - 203,419 Write-offs - 50,462 - 31 50,493 Exchange Diferences - (45) - (4) (49) Variation of perimeter (6,044,114) (1,111,526) - (4,422) (7,160,062) Transfers & other movements - 81,770 - 887,373 969,143 (21,306,753) (192,043,236) - (32,513,590) (245,863,579)
Net Value 2008 55,249,230 1,004,302,426 95,767,474 7,809,740 1,163,128,870
2009 124,954,348 1,084,261,656 128,940,143 21,269,933 1,359,426,080
The valuation criteria adopted and the depreciation rates used are detailed in indent v) of the Main valuation criteria in Note 1. Accounting Policies
The amount that would have been recognised had the assets been booked in accordance with the cost model is as follows:
Cost Reevaluations Fixed Assets
2008
Land & buildings 55,245,228 4,002 55,249,230 Equipment 1,004,302,426 - 1,004,302,426 Tangible fixed assets in progress 95,767,474 - 95,767,474 Other tangible fixed assets 7,809,740 - 7,809,740
1,163,124,868 4,002 1,163,128,870
2009
Land & buildings 124,954,348 - 124,954,348 Equipment 1,084,261,656 - 1,084,261,656 Tangible fixed assets in progress 128,940,143 - 128,940,143 Other tangible fixed assets 21,269,933 - 21,269,933
1,359,426,080 - 1,359,426,080
91 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The GROUP's main motorway and port concessions in operation, their principal characteristics and duration are detailed hereunder:
Duration without Reversible Type prorogation assets
Ascendi Group Aenor Motorway 2029 yes Aenor Douro Interior Motorway 2038 yes Mexico Concession Motorway 2038 yes Luso GL Motorway 2036 yes Lusoponte Bridge 2030 yes Lusoscut BLA Motorway 2031 yes Lusoscut CP Motorway 2030 yes Lusoscut GP Motorway 2032 yes
Indaqua Group Indaqua Fafe Water 2020 no Indaqua Feira Water and sewage 2049 yes Indaqua Matosinhos Water and sewage 2032 yes Indaqua Tirso Water 2034 yes Indaqua Vila do Conde Water 2047 yes
Tertir Group Liscont Port 2042 yes Socarpor Aveiro Port 2026 yes Sotagus Port 2020 yes TCL Port 2025 yes TMB Port 2020 yes
Other Sadoport Port 2025 yes Tersado Port 2024 yes
Gauging the existence or otherwise of impairment in respect of the main amounts of assets under concession is performed using the Business Plans of the companies in question, as mentioned in Note 16 Goodwill in respect of impairment tests on goodwill.
19. Tangible fixed assets
The breakdown of the net values of tangible fixed assets not under concession per business area in respect of fiscal 2009 and 2008 is as follows:
Engineering & Environment & Transport Other & Mota-Engil Construction Services concessions eliminations Group
2008
Land & buildings 141,798,729 50,227,932 - 19,827,781 211,854,442 Equipment 168,732,185 23,467,557 40,347 1,405,735 193,645,824 Tangible fixed assets in progress 34,901,887 29,804,494 - 380,134 65,086,515 Other tangible fixed assets 5,067,552 616,831 - 1,123 5,685,506 350,500,353 104,116,814 40,347 21,614,773 476,272,287
2009
Land & buildings 163,417,200 54,701,937 1 18,876,845 236,995,983 Equipment 201,819,024 73,816,139 27,116 1,903,372 277,565,651 Tangible fixed assets in progress 24,697,860 10,865,362 - 632,819 36,196,041 Other tangible fixed assets 7,502,524 724,637 - 911 8,228,072 397,436,608 140,108,075 27,117 21,413,947 558,985,747
92 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Information on gross tangible fixed assets not under concession in respect of the years ended December 31, 2009 & 2008, is as follows:
Tangible fixed assets in Land & buildings Equipment progress Other fixed assets Total
2008
Opening balance 258,877,900 496,983,619 39,328,014 8,304,740 803,494,273 Increases 22,387,293 79,278,915 60,455,202 1,370,034 163,491,444 Disposals (1,124,813) (16,300,047) (2,260,445) (89,665) (19,774,970) Write-offs (180,069) (4,025,879) (5,547,311) (188,423) (9,941,682) Exchange Diferences 380,928 (1,761,783) 955,293 (684,001) (1,109,563) Variation of perimeter 2,172,398 7,199,331 1,968,520 202,395 11,542,644 Transfers & other movements (23,453,616) 8,628,953 (29,812,758) 738,542 (43,898,879) 259,060,021 570,003,109 65,086,515 9,653,622 903,803,267
2009 310,943,088
Opening balance 259,060,021 570,003,109 65,086,515 9,653,622 903,803,267 Increases 4,967,487 91,011,111 54,438,814 (238,737) 150,178,675 Disposals (543,352) (21,741,606) (5,583,206) (23,698) (27,891,862) Write-offs (421,436) (2,884,868) - (8,104) (3,314,408) Reevaluations 333,017 53,499 - - 386,516 Exchange Diferences (1,383,460) (2,750,117) 31,005 (57,483) (4,160,055) Variation of perimeter 10,015,385 4,027,028 2,088,023 27,697 16,158,133 Transfers & other movements 20,067,427 54,142,603 (79,865,110) 3,759,294 (1,895,786) 292,095,089 691,860,759 36,196,041 13,112,591 1,033,264,480
Information on the amounts of accumulated depreciation and impairment losses in respect of fixed assets not under concession in respect of the years ended December 31, 2009 & 2008, is as follows:
Tangible fixed assets in Land & buildings Equipment progress Other fixed assets Total 2008
Opening balance (43,513,095) (348,041,393) - (3,251,452) (394,805,940) Increases (5,086,526) (43,188,128) - (1,591,654) (49,866,308) Disposals 617,617 13,675,668 - 3,157 14,296,442 Write-offs 85,755 2,287,872 - 113,427 2,487,054 Exchange Diferences (53,339) 1,081,577 - 253,824 1,282,062 Variation of perimeter 1,478,393 2,664,335 - (128,419) 4,014,309 Transfers & other movements (734,384) (4,837,216) - 633,001 (4,938,599) (47,205,579) (376,357,285) - (3,968,116) (427,530,980)
2009 -
Opening balance (47,205,579) (376,357,285) - (3,968,116) (427,530,980) Increases (5,735,831) (55,219,478) - (1,061,589) (62,016,898) Disposals 361,158 17,386,922 - 1,632 17,749,712 Write-offs 72,507 1,332,555 - 8,073 1,413,135 Exchange Diferences 256,118 1,683,348 - 69,420 2,008,886 Variation of perimeter (741,526) (3,743,411) - (2,452) (4,487,389) Transfers & other movements (2,105,953) 622,241 - 68,513 (1,415,199) (55,099,106) (414,295,108) - (4,884,519) (474,278,733)
Net Value 2008 211,854,442 193,645,824 65,086,515 5,685,506 476,272,287
2009 236,995,983 277,565,651 36,196,041 8,228,072 558,985,747
The valuation criteria adopted, the depreciation rates used and the residual values determined are detailed in Indents iii), iv) and v) of the Main valuation criteria in Note 1. Accounting Policies
As at December 31, 2009, the sum of €34,218,936, net of depreciation, carried under "Land & buildings" is in respect of quarry operations. To obtain the fair value of the quarries several factors are taken into account, such as the area under licence, the operating capacity, the costs of landscape recovery and the residual value of the land after the quarry is shut down. Additional information on the exploitation of the GROUP's mineral resources can be found in Note 34 Exploitation of mineral resources
93 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
As at December 31, 2009 & 2008, the following tangible fixed assets, net of depreciation and of accumulated impairment losses, owned by MOTA-ENGIL ENGENHARIA, were located at branches abroad:
31.12.09 31.12.08
Angola 89,139,795 78,722,875 Benim 5 205 Cape Verde 76,885 1,073,900 Chad 3,604 21,189 Irland 5,738,982 1,326 Malawi 19,145,040 13,715,998 Mozambique 6,205,519 1,091,020 Poland 620,516 638,216 Romenia 270,088 295,235 S. Tomé and Principe 198,080 109,556 121,398,514 95,669,520
Land and buildings are carried at their market value.. The valuation method used by the real-estate valuers (Luso-Roux) to determine the fair value of the GROUP's properties is the depreciated replacement cost method, the valuations having been performed in keeping with international valuation standards.
The fair value of the properties does not include any tax or costs that must be incurred by the buyer with the purchaser of the property and it was determined, as far as land is concerned, taking into account the market price for similar assets and, in the case of buildings, their actual construction cost. The location, accesses, size and form of the properties were also taken into account in the determination of their fair value.
The amount that would have been recognised had the assets been booked in accordance with the cost model is as follows:
Cost Reevaluations Fixed Assets
2008
Land & buildings 189,670,413 22,184,029 211,854,442 Equipment 189,954,655 3,691,169 193,645,824 Tangible fixed assets in progress 65,086,515 - 65,086,515 Other tangible fixed assets 5,408,495 277,011 5,685,506
450,120,078 26,152,209 476,272,287
2009
Land & buildings 219,057,766 17,938,217 236,995,983 Equipment 269,050,078 8,515,573 277,565,651 Tangible fixed assets in progress 36,196,041 - 36,196,041 Other tangible fixed assets 8,143,137 84,935 8,228,072
532,447,022 26,538,725 558,985,747
During 2009 the GROUP updated the valuations of some of its properties, though there were no significant alterations to their fair value.
As at December 31, 2009 & 2008, with the exception of assets acquired under finance leases for fixed assets assigned to the transport concessions and for the pledged assets referred to in Note 31 Commitments, there are no other tangible assets pledged or mortgaged to financial institutions to secure borrowings.
Gauging the existence or otherwise of impairment in respect of the main amounts of assets under concession is performed using the Business Plans of the companies in question, as mentioned in Note 16 Goodwill in respect of impairment tests on goodwill
94 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
20. Financial investments under the equity method
As at December 31, 2009 & 2008, the breakdown of the figures for financial investments under the equity method is as follows:
31.12.09 31.12.08
Engineering & Construction Asinter 345,914 302,637 Auto Sueco Angola 12,102,738 6,539,757 Bay 6.3 61,346 - Bay office 175,012 - Bay park 2,760,010 - Bay tower 24,022 - Bay well 67,539 - Bergamon - 9,350,003 Berd 1,198,623 1,267,182 Engber 66 - Mamaia 2,413,358 2,979,725 Nadorobol 612,570 - Obolinvest 27,533,235 21,550,744 Obol XI 1,229,383 - Sampaio 159,035 - Soltysowska 284,835 106,453 Turalgo 231,648 234,666 Environment & Services Ambilital 1,493,316 1,004,799 Citrup 125,881 143,886 Ecoleziria 60,342 47,436 Haçor 397,608 - Tersado 856,835 898,653 Vortal 2,867,587 2,164,413 Transport concessions AE Perote Xalapa - 23,906,202 Lusoponte 129,090,747 - Gestiponte 111,535 - Martifer Group 146,029,302 103,358,112 330,232,487 173,854,668
During 2009, movement under the value of financial investments under the equity method was as follows:
Transfers and Efect on profit & Efect on Acquisitions/ Opening balance variation of Closing balance loss reserves Disposals perimeter
Engineering & Construction Asinter 302,637 224,243 (180,966) - - 345,914 Auto Sueco Angola 6,539,757 7,217,841 (1,654,860) - - 12,102,738 Bay 6.3 - (6,730) - - 68,076 61,346 Bay office - (4,860) - - 179,872 175,012 Bay park - (73,882) - - 2,833,892 2,760,010 Bay tower - (1,166) - - 25,188 24,022 Bay well - (1,833) - - 69,372 67,539 Bergamon 9,350,003 - - (9,350,003) - - Berd 1,267,182 (68,558) (1) - - 1,198,623 Engber - (445) - - 511 66 Mamaia 2,979,725 354,003 (920,370) - - 2,413,358 Nadorobol - 15,109 - - 597,461 612,570 Obolinvest 21,550,744 (35,222) - 6,017,713 - 27,533,235 Obol XI - (582,851) - - 1,812,234 1,229,383 Sampaio - (16,416) - - 175,451 159,035 Soltysowska 106,453 284,751 (106,369) - - 284,835 Turalgo 234,666 (3,018) - - - 231,648 Environment & Services Ambilital 1,004,799 184,821 303,696 - - 1,493,316 Citrup 143,886 95,174 (113,179) - - 125,881 Ecoleziria 47,436 34,512 (21,606) - - 60,342 Haçor - (2,392) - - 400,000 397,608 Logz - (78,732) 78,732 - - - Tersado 898,653 (31,377) (10,441) - - 856,835 Vortal 2,164,413 424,388 278,786 - - 2,867,587 Transport concessions AE Perote Xalapa 23,906,202 - - (23,906,202) - - Lusoponte - 2,210,093 - - 126,880,654 129,090,747 Gestiponte - (898) - - 112,433 111,535 Martifer Group 103,358,112 40,389,467 2,281,723 - - 146,029,302 Other - 42,275 (42,275) - - - 173,854,668 50,568,297 (107,130) (27,238,492) 133,155,144 330,232,487
95 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
As at December 31, 2009, the market value of MARTIFER in accordance with its quoted market price on that date (€3.34 per share) was approximately €125,250,000. However, the GROUP's board of directors is of the conviction that, on the basis of the subsequent evolution of the price in the Research reports produced financial institutions and of existing business plans the investment is not impaired..
As at December 31, 2009, the main financial information on the financial investments under the equity method is as follows:
Sales and Assets Equity services rendered Net profit
Engineering & Construction Asinter 1,901,402 1,153,046 4,139,239 747,476 Auto Sueco Angola 134,466,615 32,945,808 99,804,365 19,044,159 Bay 6.3 1,667,676 145,415 2,877 (83,799) Bay office 978,511 589,265 - (16,363) Bay park 15,313,161 9,292,963 41,421 (248,761) Bay tower 145,599 80,882 - (3,927) Bay well 347,515 227,405 - (6,172) Bergamon 10,862,397 (2,328,801) 188,842 (123,798) Berd 9,752,147 4,838,692 778,812 (276,555) Engber 26,200 222 - (1,498) Mamaia 45,193,399 2,997,393 - 1,475,012 Nadorobol 3,882,786 1,530,893 222,983 50,873 Obolinvest 24,683,478 16,501,091 - (117,406) Obol XI 36,804,330 3,911,671 237,900 (1,962,462) Sampaio 4,020,483 358,003 122,003 (55,273) Soltysowska 26,795,744 1,154,336 7,225,518 837,503 Turalgo 649,574 454,211 - (5,918) Environment & Services Ambilital 15,626,857 4,955,419 3,298,118 613,309 Citrup 893,294 682,280 1,497,826 515,848 Ecoleziria 3,510,672 400,477 2,295,369 229,051 Haçor 19,467,071 994,019 109,005 (5,981) Logz 31,278,651 (202,421) - (227,483) Tersado 10,018,155 3,165,662 5,222,233 (387,185) Vortal 11,330,675 6,294,971 8,850,363 1,420,309 Transport concessions Lusoponte 774,287,774 35,508,931 65,184,069 14,483,660 Gestiponte 1,880,148 293,360 5,342,379 (2,361) Martifer Group 1,425,278,593 387,089,841 606,093,238 107,705,244
Gauging the existence or otherwise of impairment in respect of the main amounts of Financial investments under the equity method is performed using the Business Plans of the companies in question.
21. Financial investments available for sale
As at December 31, 2009 & 2008, the breakdown of available-for-sale financial investments is as follows:
31.12.09 31.12.08 Investments in equity instruments
Águas de S. João 3,940,100 - Ecodetra 1,153,202 1,153,202 Ersuc 554,381 554,381 Hidrocontrato - 547,283 Lusoponte - 49,041,180 MTS 904,400 904,400 Glintt 369,660 1,024,009 Tirtife 900,600 900,600 TMB 939,360 939,360 Others 142,441 866,497 8,904,144 55,930,912
31.12.09 31.12.08 Securities & Other placements
Other 939,398 926,333
939,398 926,333
96 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
31.12.09 31.12.08 Advances & other investment
Autostrada Pólska - 426,035 Crespo - 225,000 Ascendi Group 42,311,909 10,000,000 Águas de S. João - 428,600 Obol - 6,000,000 Parque Ambiental Nortenho 545,186 1,206,686 Plataforma Logística Guarda 5,000 5,000 Transitex Brasil 3,430 - 42,865,525 18,291,321
Financial investments available for sale 52,709,067 75,148,566
During the years ended December 31, 2009 & 2008, movement under Available-for-sale financial investments was as follows:
31.12.09 31.12.08
Opening balance 75,148,566 71,161,541 Acquisitions 36,255,439 17,379,844 Disposals (1,201,632) - Increase / (decrease) of fair value - (11,582,250) Transfers (56,405,771) (434,559) Impairment losses (Note 11) (1,087,535) (1,376,010) 52,709,067 75,148,566
The amount carried under “Increase/(reduction) of fair value” in December 2008 refers to the update of the value of the holding in LUSOPONTE. This update was performed on the basis of a transaction involving shares in this company undertaken at arm's length early in 2009. The respective devaluation was recorded directly under equity under “Fair value reserve – Available-for-sale investments”. Following this adjustment, the value of the financial investment carried under "Available-for-sale investments" continues to be higher than its acquisition cost.
Given the nature of the greater part of the financial investments referred to above (advances) and given the difficulties in determining their fair value reliably, the GROUP recorded these investments at their acquisition cost, less, where necessary, the respective impairment losses that were identified.
“Acquisitions during the period” essentially refers to the investment in the São Paulo concession.
22. Investment properties
Information on the GROUP's investment properties as at December 31, 2009 & 2008, is as follows:
31.12.09 31.12.08
Opening balance 41,344,627 31,338,255 Increases 4,922,064 145,887 Variation of fair value 3,066,672 - Disposals (726,973) (4,267,693) Write-offs - (530,788) Exchange differences(properties located in Angola & Central Europe) (526,022) 1,185,502 Variation of perimeter - 13,241,844 Transfers (17,243,077) 231,620 Closing balance 30,837,291 41,344,627
The valuation criteria established by the GROUP for valuation of its investment properties are detailed in Indent vii) of the Main valuation criteria in Note 1. Accounting Policies
Investment properties located in Portugal, Poland and the Czech Republic are carried at their market value in keeping with independent valuations, on the basis of recent market transactions involving similar properties.
Investment properties located in Portugal are for rent, while those located in Poland are intended to obtain capital gains in the medium to long term.
97 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
In 2009 the properties located in Angola that had been rented out and were therefore carried under Investment properties came to be used for the business of the Branch and, for this reason, were transferred to Tangible fixed assets.
The variations to the perimeter in 2008 were justified by the acquisition of subsidiary KILINSKIEGO and by the assignment of the fair value of the identifiable assets and liabilities to this heading.
As at December 31, 2009, the investment properties held by the GROUP were as follows: i) the JEREMIASOVA Land/property (Czech Republic); ii) the KILINSKIEGO Land/property (Poland); and iii) the MODADOMUS commercial condominium (Portugal).
The gains obtained by the GROUP in respect of the rents on its investment properties amounted, in 2009, to €326,600 (2008: €672,000).
The valuations performed took into account the following valuation methods: (i) Comparative market method (land/ properties in the Czech Republic and Poland), in which the market values of the land/ properties were determined by comparison with other similar ones the market prices of which are known; and (ii) the Income method (MODADOMUS commercial condominium), using for the purpose the method of capitalisation of expected future rents. In the valuations the following international and European standards were followed, issued by the IVSC (International Valuation Standards Committee) and by TEGoVA in the Approved European Property Valuation Standards.
23. Inventories
The breakdown of inventories in respect of the years ended December 31, 2009 & 2008, is as follows:
31.12.09 31.12.08 Book value:
Raw & subsidiary materials and consumables 52,524,857 64,240,582 Products & work in progress 105,793,544 93,670,981 Sub-products, waste, residues & scrap 12,181 12,283 Finished products 38,313,219 19,706,806 Goods 54,081,697 56,640,111 Advances on account of purchases 9,775,077 7,130,137 260,500,575 241,400,900
Accumulated impairment losses
Raw & subsidiary materials and consumables (2,998,429) (3,207,019) Finished products (4,520,210) (3,723,163) Goods (3,057,587) (2,446,537)
(10,576,226) (9,376,719) 249,924,349 232,024,181
Movement under accumulated impairment losses on inventories for the years ended December 31, 2009 & 2008 is as follows:
31.12.09 31.12.08
Opening balance 9,376,719 6,017,651 Increase (Note 10) 1,352,677 1,633,944 Reduction (159,266) (42,433) Transfers & variation of perimeter 6,096 1,767,557 Closing balance 10,576,226 9,376,719
98 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
24. Other assets
a) Loans and accounts receivable:
The breakdown of loans and accounts receivable from customers in respect of the years ended December 31, 2009 & 2008, is as follows:
Non-current Current 31.12.09 31.12.08 31.12.09 31.12.08
Customers: Trade accounts receivable Gross value: Engineering & Construction 11,039,640 2,059,130 717,147,240 434,439,167 Environment & Services 372,514 305,082 143,561,649 122,363,029 Transport concessions - - 3,532,382 113,790 Others, eliminations & intra-Group - - (8,660,720) (4,650,530)
11,412,154 2,364,212 855,580,551 552,265,456
Accumulated impairment losses (201,529) (400,000) (22,374,960) (22,803,060)
11,210,625 1,964,212 833,205,591 529,462,396
Trade accounts – Bills receivable 475,655 698 4,715,068 3,241,570
Doubtful debt Gross value 46,058 93,768 18,883,816 15,901,985 Accumulated impairment losses (46,058) (75,451) (18,689,739) (15,160,098) - 18,317 194,077 741,887 11,686,280 1,983,227 838,114,736 533,445,853
The breakdown of loans and accounts receivable from other debtors in respect of the years ended December 31, 2009 & 2008, is as follows:
Non-current Current 31.12.09 31.12.08 31.12.09 31.12.08
Other debtors: Associate and related companies Gross value 81,071,624 93,888,315 31,050,999 12,054,497 Accumulated impairment losses (16,511,445) (16,696,579) - -
64,560,179 77,191,736 31,050,999 12,054,497
Advances to suppliers - - 13,266,292 20,450,868 State & other public entities - - 34,138,791 45,889,078 Other Gross value 13,691,644 4,625,067 135,553,119 160,403,263 Accumulated impairment losses - - (18,158,942) (18,192,551)
13,691,644 4,625,067 117,394,177 142,210,712 78,251,823 81,816,803 195,850,259 220,605,155
The GROUP's exposure to credit risk is mainly the result of trade accounts receivable in respect of its operating activity. Accumulated impairment losses have been estimated by the GROUP in keeping with its own experience and on the basis of its evaluation of the economy and of the economic surroundings.
The board of directors is of the conviction that the value at which these assets are carried in the balance sheet approaches their fair value.
The GROUP charges no interest as long as the established payment periods are being met. Following the payment deadlines, interest is charged as defined in the contracts and in accordance with the law, as applicable to each particular case.
99 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
As at December 31, 2009 & 2008, the age of commercial balances relating to financial assets that were not impaired is as follows:
Trade accounts trade accounts Age in the balance sheet 2008 doubtful debt Other debtors received bills receivable
Overdue amounts ] 0 ; 1 ] month 91,243,032 815,994 - 18,842,201 ] 1 ; 3 ] month 105,968,922 361,865 - 7,224,107 ] 3 ; 12 ] month 84,418,964 20,540 - 12,777,910 ] 1 ; 3 ] years 60,856,190 - 760,204 30,398,786 Over 3 years 12,287,411 4,927 - 6,842,797 354,774,519 1,203,326 760,204 76,085,801
Not overdue amounts 176,652,089 2,038,942 - 13,160,432
Total 531,426,608 3,242,268 760,204 89,246,233
Trade accounts trade accounts Age in the balance sheet 2009 doubtful debt Other debtors received bills receivable
Overdue amounts ] 0 ; 1 ] month 253,306,457 493,836 - 25,677,862 ] 1 ; 3 ] month 170,682,476 793,440 - 13,515,951 ] 3 ; 12 ] month 122,735,135 127,143 - 23,084,444 ] 1 ; 3 ] years 63,375,448 146,504 194,077 14,035,602 Over 3 years 26,004,237 4,927 - 7,263,762 636,103,753 1,565,850 194,077 83,577,621
Not overdue amounts 208,312,463 3,624,873 - 12,033,557
Total 844,416,216 5,190,723 194,077 95,611,178
As at December 31, 2009, the GROUP's net exposure to accumulated impairment losses to balances having an age of more than 1 year is essentially the result of confirmed debts of public entities (local government, regional government, etc.), of amounts withheld by customers by way of warranty and of customer balances covered by debt-settlement agreements, the understanding of the GROUP's board of directors being that these accounts receivable are not impaired.
Impairment loss adjustments to accounts receivable are recorded where there are objective indicators that the GROUP will not receive all the sums to which it was entitled in keeping with the original terms of the contracts entered into. The adjustments are calculated considering the analysis of the age of the accounts receivable, the debtor's risk profile and their financial conditions.
As at December 31, 2009 & 2008, the breakdown of the balances of the State & other public entities is as follows:
31.12.09 31.12.08
Corporate Income tax 3,877,459 2,062,104 Value added tax 14,921,280 27,699,110 Social Security 2,431 - Personal income tax 97,044 2,027 Other taxes 25,437 17,809 Taxes in other countries 15,215,140 16,108,028 34,138,791 45,889,078
100 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Movement under impairment losses on loans and accounts receivable is as follows:
2009 2008 Trade accounts receivable:
Opening balance 23,203,060 17,902,917 Increase 698,648 8,381,928 Reduction (713,367) (30,861) Usage - (3,890) Transfers & perimeter variation (611,852) (3,047,034) Closing balance 22,576,489 23,203,060
Doubtful debt:
Opening balance 15,235,549 16,022,668 Increase 3,364,282 1,162,044 Reduction (1,345,472) (1,708,015) Usage (521,600) (17,500) Transfers & perimeter variation 2,003,038 (223,648) Closing balance 18,735,797 15,235,549
Other debtors
Opening balance 34,889,130 56,863,215 Increase 705,537 339,941 Reduction (295,946) (592,759) Usage (372,384) - Transfers & perimeter variation (255,950) (21,721,267) Closing balance 34,670,387 34,889,130
As at December 31, 2008, the variation under "Reduction, transfers and variation of perimeter" essentially has to do with the use of provisions by subsidiary TERTIR.
There were no materially relevant renegotiations in respect of loans and receivables that, for this reason, could be past-due or impaired.
b) Other current assets
The breakdown of "Other current assets" is as follows:
31.12.09 31.12.08 Accrued income
Production not invoiced 100,986,971 89,635,244 Indemnities receivable 126,488,111 123,008,028 Interest receivable 13,689,923 11,276,222 Other accrued income 17,167,128 17,145,665 258,332,132 241,065,159 Deferred costs
Insurance 3,237,503 1,831,622 MLFF 24,950,855 - Other deferred costs 27,204,974 19,065,083 55,393,332 20,896,705 313,725,464 261,961,864
“Indemnities receivable” has to do with the amounts receivable by way of financial rebalancing as established with the Portuguese State, in respect of net losses of income, delays to the construction of motorways and overlaps of motorway layouts with other operators in respect of companies of the AENOR GROUP.
“Other accrued costs” fundamentally includes maintenance contract costs concluded and other advance payments.
The MLFF heading refers to capitalised expenses incurred within the scope of the implementation of the electronic tool system known as Multi-Lane Free-Flow (MLFF).
101 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Information on construction contracts in progress is as follows:
2009 2008
Construction costs incurred to date 3,284,621,949 2,913,049,805 Construction costs incurred during the year 719,142,200 655,442,753
Income recognized to date 3,578,312,596 3,083,810,842 Income recognized during the year 840,510,718 671,331,199
Customers prepayments 25,693,222 17,110,432 Sums withheld by customers 5,504,666 6,127,511 Guarantees given by customers 252,790,500 264,744,328
Accrued income - excess of produxtion over billing 23,180,399 55,045,690 Deferred income - shortfall of production over billing 43,556,169 33,971,078
There were no materially relevant renegotiations in respect of other current receivables that, for this reason, could be past-due or impaired.
c) Cash & cash equivalents
The breakdown of cash & cash equivalents is as follows:
Non recourse With recourse 31.12.09 31.12.08 31.12.09 31.12.08
Term deposits & others 15,992,865 15,260,591 2,699,608 6,818,692 Bank deposits & cash in hand Sight deposits 104,359,441 90,250,716 118,020,423 63,133,919 Cash in hand 88,423 303,107 4,155,059 3,702,518 120,440,729 105,814,414 124,875,090 73,655,129
Cash & cash equivalents includes cash held by the GROUP and short-term bank deposits having initial maturities equal to or less than 3 months, for which the risk of alteration of value is not significant. The value at which this set of assets is carried is close to their fair value.
As at December 31, 2009 & 2008, there were no restrictions to the use of the balances recorded under "Cash & cash equivalents with recourse". The figures under “Cash & cash equivalents without recourse” have to do with the whole of the amounts recorded under “Cash & cash equivalents” by the motorway and port concession companies, most of which is allocated to debt-servicing in 2010.
102 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
25. Issued capital and reserves
The MOTA-ENGIL SGPS issued capital as at December 31, 2009 & 2008, amounts to €204,635,695, fully paid up and represented by 204,635,695 bearer shares each of a par value of €1.
As at December 31, 2009, the GROUP holds 10,972,328 treasury shares.
During 2009, alterations to the number of treasury shares were as follows:
Quantity Average cost Amount
Opening balance 21,699,082 10,636,328 2.04 21,699,082
Increase January 336,000 2.56 859,710
336,000 2.56 859,710
Closing balance 22,558,792 10,972,328 2.06 22,558,792
Acquisitions of treasury shares during 2009 were carried out by the GROUP's board of directors which, in the belief that the capital market was undervaluing the MOTA-ENGIL SGPS shares on those dates, decided to increase the Company's existing treasury share portfolio, thus signalling to the capital market the board of directors' confidence in the future of the GROUP.
These acquisitions had due regard at all times for the legal limits and they were also communicated to the market to the extent required by the regulations and in keeping with the deadlines established by the capital market regulator (CMVM).
Reserves:
Issue premiums
Issue premiums correspond to premiums obtained on the issue or increase of equity capital. In accordance with the Portuguese Companies Code, the amounts included under this heading must meet the requirements established for the "Legal reserve", that is, the amounts cannot be distributed, except in winding-up procedures, though they may be used to absorb losses, after all other reserves have been exhausted, and may be incorporated into the issued capital.
Legal reserve
Company Law determines that at least 5% of the net profit for the year has to be assigned to increasing the legal reserve until such time as it equals at least 20% of the issued capital. This reserve cannot be distributed, except in the event of winding up, though it may be used to cover losses, after all other reserves have been exhausted, and to be included in the issued capital.
Fair value reserve - derivatives
The Fair value reserve – derivatives reflects the variations to the fair value of the cash-flow hedging derivatives that are considered effective (Note 27 Derivative financial instruments), and it cannot be distributed or used to absorb losses.
Fair value reserve – held-for-sale investments
The Fair value reserve – held-for-sale investments reflects variations to the fair value of held-for-sale financial instruments and cannot be distributed or used to absorb losses.
103 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Currency translation reserve
The currency-translation reserves reflect currency fluctuations in transposing the financial statements of affiliates expressed un currencies other than the euro and cannot be distributed or used to absorb losses.
Revaluation reserves
Revaluation reserves cannot be distributed to equityholders, unless the revalued assets have been fully written down or sold.
Under Portuguese legislation, the amount of reserves that can be distributed is determined in accordance with the individual financial statements of the Company, presented in accordance with the Official Accounting Plant (POC). There were no reserves that could be distributed as at December 31, 2009
104 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
26. Debt
The amounts for debt with recourse with reference to the years ended December 31, 2009 & 2008, are as follows:
1 year 2 years 3 to 5 years over 5 years Total
2008
Non-convertible bond loans 18,500,000 38,500,000 25,000,000 - 82,000,000 Amounts owed to credit institutions Bank loans 99,842,982 80,756,665 111,122,031 72,052,556 363,774,234 Overdraft facilities 132,244,992 - - - 132,244,992 Guaranteed accounts 52,004,193 1,466,600 - - 53,470,793 Other loans obtained Commercial paper issues - 91,382,221 137,123,052 100,650,000 329,155,273 Other loans 5,980,059 9,151,312 484,356 - 15,615,727 308,572,226 221,256,798 273,729,439 172,702,556 976,261,019
2009
Non-convertible bond loans 31,000,000 57,500,000 25,000,000 - 113,500,000 Amounts owed to credit institutions Bank loans 122,136,557 133,488,006 198,541,495 84,390,096 538,556,154 Overdraft facilities 168,868,069 - - - 168,868,069 Guaranteed accounts 86,515,547 177,102 - - 86,692,649 Other loans obtained Commercial paper issues 120,785,710 51,143,924 113,038,520 61,350,000 346,318,154 Other loans 33,986,083 4,901,389 8,377,564 4,833,558 52,098,594 563,291,966 247,210,421 344,957,579 150,573,654 1,306,033,620
Although commercial paper issues fall due at one year, because they are covered by medium- and long-term programmes that allow their renovation the GROUP's board of directors has recorded these debts as medium & long term in that it intends to continue to use them.
The amounts for debt without recourse with reference to the years ended December 31, 2009 & 2008, are as follows:
1 year 2 years 3 to 5 years over 5 years Total
2008
Amounts owed to credit institutions Bank loans 129,342,603 69,042,102 69,743,313 783,625,870 1,051,753,888 Overdraft facilities 168,328 - - - 168,328 Guaranteed accounts 3,262,500 - - - 3,262,500 132,773,431 69,042,102 69,743,313 783,625,870 1,055,184,716
2009
Amounts owed to credit institutions Bank loans 132,073,353 71,271,143 82,301,578 938,007,336 1,223,653,410 Guaranteed accounts 3,700,000 - - - 3,700,000 135,773,353 71,271,143 82,301,578 938,007,336 1,227,353,410
105 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
As at December 31, 2009 & 2008, the sums in respect of debt are expressed in the following currencies:
Credit Commercial Bonds institutions paper Other loans Total
2008
Czech Crowns - 8,419,642 - - 8,419,642 Slovakian crowns - 2,840,217 - - 2,840,217 US Dollars - 6,610,830 - - 6,610,830 Algerian Dinar - 152,219 152,219 Euros 82,000,000 1,539,491,525 329,155,273 15,615,082 1,966,261,880 Hungarian Forints - 32,504,456 - - 32,504,456 New Family Meticais (Mozambique) - 115,688 - - 115,688 Polish Zlotys - 14,540,159 - 645 14,540,804 82,000,000 1,604,674,735 329,155,273 15,615,727 2,031,445,735
2009
Czech Crowns - 9,800,742 - - 9,800,742 US Dollars - 12,995,946 - 1,353,491 14,349,438 Algerian Dinar - 268,772 - - 268,772 Euros 113,500,000 1,936,353,027 346,318,154 50,745,000 2,446,916,181 Hungarian Forints - 1,743,547 - - 1,743,547 New Family Meticais (Mozambique) - 68,680 - 103 68,783 Peruvian New Soles - - - - - Mexican Pesos - 50,821,808 - - 50,821,808 Polish Zlotys - 9,417,759 - - 9,417,759 113,500,000 2,021,470,282 346,318,154 52,098,594 2,533,387,030
The GROUP's board of directors is of the conviction that the fair value of the GROUP's borrowings is very close to their book value.
The average interest rates in respect of the main headings of debt during 2009 and 2008 are as follows:
2009 2008
Average rates (%) Rates interval (%) Average rates (%) Rates interval (%)
Non-convertible bond loans 3.71 [ 3.30 ; 4.36 ] 6.06 [ 5.76 ; 6.51 ] Amounts owed to credit institutions Bank loans 4.64 [ 1.67 ; 6.00 ] 6.15 [ 3.84 ; 6.98 ] Overdraft facilities 3.92 [ 1.72 ; 4.29 ] 6.11 [ 4.75 ; 7.19] Guaranteed accounts 2.88 [ 0.70 ; 7.00 ] 5.74 [ 4.86 ; 8.04 ] Other loans obtained Commercial paper issues 1.87 [ 1.26 ; 3.50 ] 4.66 [ 4.48 ; 4.99 ]
106 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The main bond loans and commercial paper programmes obtained by the GROUP are as follows:
Reimbursement Type of issue / Issuer Date of emission Indexation condition Amount
Bond loans: Mota-Engil SGPS 9-Dec-03 Euribor 6 months + 1.75% i) 3,500,000 Mota-Engil SGPS 29-Dec-04 Euribor 6 months + 1.5% ii) 15,000,000 Mota-Engil SGPS 21-Jun-05 Euribor 6 months + 0.95% iii) 20,000,000 Mota-Engil SGPS 23-Apr-08 Euribor 6 months + 1.0% iv) 25,000,000 Mota-Engil SGPS 18-Nov-09 Mid Swap 3Y + 3.35% v) 50,000,000
Commercial paper programmes:
Mota-Engil SGPS 17-Nov-08 Euribor 3 months + 0.5% 6,600,000 Mota-Engil SGPS 21-Nov-08 Euribor 4 months + 0.6% 25,000,000 Mota-Engil SGPS 21-Nov-08 Auctioning (Euribor 1 month + 0.625%) 25,000,000 Mota-Engil SGPS 28-Dec-09 Euribor 1 month + 1.175% 15,000,000 Mota-Engil SGPS and Mota-Engil Engenharia 3-Dec-08 Euribor 1 month + 0.75% 25,000,000 Mota-Engil SGPS and Mota-Engil Engenharia 13-Nov-06 Euribor 1 month + 1.875% 15,000,000 Mota-Engil SGPS and Mota-Engil Engenharia 27-Aug-07 Euribor 1 month + 1.36% 15,000,000 Mota-Engil SGPS and Mota-Engil Ambiente e Serviços 15-Jan-07 Euribor 1 month + 0.25% 77,000,000 Mota-Engil Engenharia 15-Dec-05 Euribor 1 month + 1.0% 25,000,000 Mota-Engil Engenharia 19-Dec-05 Euribor 1 month+ 1.175% 25,000,000 Mota-Engil Engenharia 30-Mar-06 Euribor 1 month + 0.5% 7,500,000 Mota-Engil Engenharia 26-Jun-07 Euribor 12 months + 0.4% 30,000,000 Mota-Engil Engenharia 23-Nov-07 Euribor 1 month + 0.4% 25,000,000 Mota-Engil Engenharia 24-Nov-08 Euribor 1 month + 0.25% 3,000,000 Tertir 3-Jul-07 Euribor 1 month + 0.225% 25,000,000 Suma 21-Dec-07 Euribor 6 months + 0.35% 2,500,000 i) Interest paid in 14 half-yearly instalments as from June 9, 2004. Repayment in 10 half-yearly instalments as from the 5th coupon. Possibility of a total or partial call or put option on the 10th and 12th interest payment dates, by the COMPANY or by each of the bondholders. ii) Interest paid in 14 half-yearly instalments as from June 29, 2005. Repayment in 4 half-yearly instalments as from the 11th coupon. Possibility of a total or partial call or put option on the 10th interest payment date, by the COMPANY or by each of the bondholders. iii) Interest paid in 10 half-yearly instalments as from December 21, 2005. Single repayment on maturity of the contract. iv) Interest paid in 10 half-yearly instalments as from October 23, 2008. Single repayment on maturity of the contract. v) Interest paid in 6 half-yearly instalments as from May 18, 2010, with single repayment on maturity of the contract.
107 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The breakdown of total debt contracted through loan contracts of over €5,000,000 is as follows:
Issuer Type of issue Amount of the loan Amount in debt Other transactions: Holding
Mota-Engil, SGPS Medium & long term loan 70,000,000 55,714,286 Mota-Engil, SGPS Overdraft facilities 10,000,000 3,485,547 Mota-Engil, SGPS Guarantee accounts 10,000,000 2,767,000
Engineering & Construction Mota-Engil Engenharia Overdraft facilities 116,925,000 14,881,133 Mota-Engil Engenharia Guarantee accounts 35,697,114 31,585,000 Mota-Engil Engenharia Medium & long term loan 70,486,004 57,163,415
Mota-Engil Real Estate Portugal Medium & long term loan 10,000,000 833,333
M-Invest Mierova Medium & long term loan 18,986,921 4,498,989
M-Invest Overdraft facilities 5,666,150 5,651,747 M-Invest Medium & long term loan 1,888,717 1,888,717
Planinova Medium & long term loan 26,000,000 12,000,000 Rentaco Angola Medium & long term loan 5,553,242 4,473,445
Tracevia Angola Medium & long term loan 2,429,543 1,957,132
Envirorment & Services Indaqua Medium & long term loan 17,500,000 8,950,000 Indaqua Guarantee accounts 5,000,000 3,100,000 Indaqua Feira Medium & long term loan 80,000,000 48,092,463 Indaqua Santo Tirso Medium & long term loan 18,000,000 15,752,786 Indaqua Vila do Conde Medium & long term loan 76,500,000 10,150,000 Indaqua Matosinhos Medium & long term loan 48,500,000 14,100,000 Mota-Engil Ambiente e Serviços Medium & long term loan 17,500,000 14,333,333 Mota-Engil Ambiente e Serviços Guarantee accounts 5,000,000 2,037,000 Sadomar Medium & long term loan 5,500,000 1,833,333
Sotagus Medium & long term loan 11,222,953 5,275,747 Suma Medium & long term loan 15,150,000 14,981,487 Tertir Medium & long term loan 60,000,000 52,500,000 Tertir Overdraft facilities 20,000,000 20,683,816 Transport concessions Ascendi Medium & long term loan 47,500,000 29,203,249 Aenor Douro Medium & long term loan 752,500,000 119,000,000 Aenor Medium & long term loan 1,090,000,000 1,081,303,149 AE Perote Xalapa Medium & long term loan 258,953,721 169,405,059 LusoBLA Medium & long term loan 855,000,000 759,674,019
LusoCP Medium & long term loan 351,500,000 331,043,400 LusoGP Medium & long term loan 580,000,000 550,141,824
LusoLisboa Medium & long term loan 172,700,000 172,700,000
Mota-Engil Concessões de Transportes Medium & long term loan 153,211,178 153,211,178
The amounts considered under "Other loans" mainly have to do with Inventories from the Portuguese Agency for Investment (API) and from the Small and Medium Enterprise and Investment Institute (IAPMEI) by way of support to investment. These loans earn no interest.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
27. Derivative financial instruments
The GROUP makes use of interest-rate derivatives instruments to manage its exposure the movements of current interest rates in its financing contracts, fixing variable interest rates.
As at December 31, 2009 & 2008, the GROUP had contracted the following derivatives instruments:
Fair Value Subsidiary Type Counterpart Start Notional Contracted rates Maturity 2009 2008
Interest Rate Receives Euribor 6M and Indaqua Tirso Caixa BI Mar-08 17,500,000 Mar-14 (1,525,482) - Swap pays fixed rate (4.85%)
Interest Rate Receives Euribor 6M and Indaqua Feira Millennium BCP Sep-07 17,043,740 Sep-29 (1,628,016) - Swap pays fixed rate (4.526%)
Interest Rate Receives Euribor 6M and Indaqua Feira Santander Sep-07 11,318,300 Sep-29 (1,628,016) - Swap pays fixed rate (4.526%)
Interest Rate Receives Euribor 6M and Indaqua Matosinhos CGD Jun-08 7,089,053 Jun-28 (2,780,020) - Swap pays fixed rate (4.485%)
Interest Rate Espírito Santo Receives Euribor 6M and Luso Lisboa Jan-07 159,869,501 Jun-33 382,574 (2,882,685) Swap Investment pays fixed rate (4.27%)
Banco Espírito Receives Euribor 6M and Lusoscut BLA Interest Rate Swap Apr-01 180,267,201 Jun-11 (200,604) (3,538,981) Santo pays fixed rate (5.62%)
Receives Euribor 6M and Lusoscut CP Collar Millennium BCP Aug-00 89,197,000 Jun-10 93,457 (640,016) pays fixed rate (4.5%)
Interest Rate Espírito Santo Receives Euribor 6M and Lusoscut GP Sep-02 120,760,018 Jun-12 (1,326,580) (1,628,539) Swap Investment pays fixed rate (5.0%)
Variable rate Euribor 6M Mota-Engil SGPS Collar Millennium BCP Dec-05 35,000,000 with Cap at 4.73% and Floor Dec-08 - - at 2.4% Receives Euribor 6M and Mota-Engil SGPS Semi Knock-out Swap Millennium BCP Nov-05 20,000,000 pays fixed rate with Knock- Nov-10 (409,443) (230,647) out
Interest Rate Receives Euribor 6M and Mota-Engil SGPS Millennium BCP Nov-05 30,000,000 Nov-10 (624,834) (198,491) Swap pays fixed rate(3.24%)
Interest Rate Receives Euribor 6M and Mota-Engil SGPS Millennium BCP Dec-05 20,000,000 Jun-10 (229,330) (212,910) Swap pays fixed rate(3.23%)
Interest Rate Receives Euribor 6M and Mota-Engil SGPS Millennium BCP Jan-08 37,000,000 Jan-11 (1,644,049) (1,106,490) Swap pays fixed rate (4.18%)
Receives variable Interest Rate Mota-Engil SGPS Santander Nov-09 25,000,000 rate(2.139%) and pays Nov-12 - - Swap Euribor 6M Receives fixed rate Interest Rate Mota-Engil SGPS Santander Nov-09 25,000,000 (2.139%) and pays Euribor Nov-12 - - Swap 12M
Interest Rate Receives Euribor 6M and Mota-Engil Ambiente e Serviços Millennium BCP Jan-08 40,000,000 Jan-11 (1,789,715) (1,216,420) Swap pays fixed rate(4.2%)
Mota-Engil Concessões de Interest Rate Receives Euribor 6M and Millennium BCP Dec-07 50,000,000 Dec-10 (1,493,930) (1,580,230) Transportes Swap pays fixed rate(4.2%)
Mota-Engil Concessões de Exchange rate Eur/Mxn SwaP Option Barclays capital Jan-09 14,693,652 Sep-10 - - transportes 17.259
Mota-Engil Engenharia e Receives Euribor 6M and Cap BNP Paribas Fortis Jun-07 30,000,000 Jun-26 7,885 17,685 Construção pays fixed rate(4.6%)
Mota-Engil Engenharia e Receives Euribor 6M and Collar BNP Paribas Fortis Jun-07 30,000,000 Jun-26 (2,394,000) (2,073,318) Construção pays fixed rate(4.6%)
Mota-Engil Engenharia e Receives Euribor 6M and Interest Rate Swap BNP Paribas Fortis Dec-05 5,000,000 Dec-10 (25,503) - Construção pays fixed rate(4.6%)
Various Other Various 781,560 - (16,434,046) (15,291,042)
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The criteria governing the classification and valuation of these instruments are set out in indent ix) (f) of the Main valuation criteria in Note 1. Accounting Policies
Determination of the fair value of the derivatives contracted by the GROUP was undertaken by the respective counterparties considered to be upstanding, independent financial entities of recognised merit. The valuation models used are based on the discounted cash-flow method: using the Swaps par Rates quoted on the interbank market, available on the Reuters and Bloomberg pages, for the relevant maturities. The respective forward rates and discount factors are calculated that are used to discount the fixed-leg and floating-leg cash flows. The sum of the two legs determines the NPV (Net Present Value).
28. Trade liabilities & other payables
Information on trade liabilities and other payables in respect of the years ended December 31, 2009 & 2008, is as follows:
Non-current Current 31.12.09 31.12.08 31.12.09 31.12.08
Suppliers Engineering & Construction 7,143,131 2,911,279 414,552,031 391,114,907 Environment & Services - - 78,119,650 56,367,518 Transport Concessions - - 6,363,649 4,186,722 Others, eliminations & intra-Group - - (34,764,039) (22,933,330)
7,143,131 2,911,279 464,271,291 428,735,817
Suppliers of fixed assets 125,658,661 87,393,538 81,921,592 56,486,231 Group companies, associates & other shareholders 559,051 9,349 198,587 2,388,049 Customer prepayments on account of sales 69,699,344 71,267,298 80,515,411 88,299,193 State & other public entities - - 28,253,519 36,206,580 Other creditors 96,406,783 67,429,658 218,889,041 121,756,031 292,323,839 226,099,843 409,778,150 305,136,084 299,466,970 229,011,122 874,049,441 733,871,901
These sums mainly concern debts originating in subcontracting in respect of works in progress adjudicated to the GROUP.
The board of directors is of the conviction that the value at which these liabilities are carried in the balance sheet approaches their fair value.
As at December 31, 2009 & 2008, the remaining contractual maturity of the balances carried under "Suppliers" is as follows:
31.12.09 31.12.08 Outstading contractual maturity:
] 0 ; 1 ] month 231,265,487 222,466,553 ] 1 ; 3 ] months 136,067,555 135,267,540 ] 3 ; 12 ] months 87,197,851 53,699,078 ] 1 ; 3 ] years 12,262,105 16,573,146 Over 3 years 4,621,424 3,640,779 471,414,422 431,647,096
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
As at December 31, 2009 & 2008, the GROUP had liabilities towards lessors, carried under "Suppliers of fixed assets" in respect of outstanding payments under finance lease contracts in the sum of €252,582,617 and €127,992,699 respectively, with the following maturities:
Outstading rents on lease contracts Current value of lease contracts
31.12.09 31.12.08 31.12.09 31.12.08
1 year 73,078,365 30,437,146 46,103,001 26,757,193 2 years 37,152,907 25,025,834 33,720,630 22,283,929 3 years 30,020,843 20,706,431 27,337,130 18,793,551 4 or more years 112,330,502 51,823,288 90,172,025 46,207,929 252,582,617 127,992,699 197,332,786 114,042,602
Interest included in the rents (55,249,831) (13,950,097) - - Current value of lease contract rents 197,332,786 114,042,602 197,332,786 114,042,602
The Group's board of directors is of the conviction that the fair value of the finance lease contracts closed by the GROUP is very close to their book value.
As at December 31, 2009, the more significant finance lease contracts are as follows:
Contracting party Amount Asset Lease life Purchase option
CPTP 4,897,960 Port Equipment 8 years 1 Hifer 3,772,992 Sundry Equipment 5 years 1
Indaqua Matosinhos 1,970,250 Building 20 years 1 Liscont 7,200,000 Port Equipment 5 years 235,800 Mota-Engil Engenharia 29,548,551 Sundry Equipment 4 years 50,889 Mota-Engil Krusziwa 1,247,864 Sundry Equipment 5 years 1
Mota-Engil Central Europe Poland 6,478,502 Sundry Equipment 6 years 323,925 Mota-Engil Central Europe Poland 10,932,244 Sundry Equipment 5 years 878,587 Mota-Engil Central Europe Poland 4,593,718 Sundry Equipment 10 years 2,894,043
PTT 2,647,989 Land & Construction 12 yearss 1 Rentaco 1,831,067 Sundry Equipment 4 years 1 Socarpor Aveiro 13,057,915 Sograin Terminal 12 years 261,158 Socarpor Aveiro 3,300,000 Crane 12 years 66,000 Socarpor Aveiro 1,976,000 Crane 8 years 39,520 Sotagus 4,000,000 Port Gantry 7 years 80,000
Suma 3,835,050 Sundry Equipment 5 years 1 Takargo 24,140,200 Railway Locomotives 25 years 3,017,525 Takargo 11,943,750 Railway Wagons 25 years 1,492,969
As at December 31, 2009 & 2008, the breakdown of the balances of “State & other public entities” is as follows:
31.12.09 31.12.08
Corporate Income tax 5,990,990 15,102,587 Value added tax 3,602,309 2,367,389 Social security 3,415,170 2,870,722 Personal income tax 1,681,676 1,473,740 Other taxes 427,746 347,334 Taxes in other countries 13,135,628 14,044,808 28,253,519 36,206,580
As at December 31, 2009 & 2008, "Other creditors" includes sums in respect of factoring with recourse and of bills discounted in the sums of €167,550,237 and €68,156,036 respectively, which have no contractually-defined maturity.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
29. Provisions
The breakdown of provisions in respect of the years ended December 31, 2009 & 2008, is as follows:
31.12.09 31.12.08
Pensions (Note 32. Retirement plan benefits) 10,674,497 12,017,383 Indemnities for termination of fixed-term employment contracts 1,188,714 3,142,499 Sealing & monitoring a landfill 4,722,111 4,308,382 Provisions for investments valued using the equity method 2,058,770 2,026,439 Legal proceedings 6,772,769 4,879,608 Quality warranties 12,943 6,099 Other 4,138,031 4,176,851 29,567,835 30,557,261
Indemnities for rescission of employment contracts and for landfill sealing and monitoring essentially refer to the SUMA SUB GROUP.
Provisions for legal proceedings and other contingencies essentially refer to the TERTIR SUB GROUP.
Information on the movement of provisions during these years is as follows:
Transfers & perimeter Closing balance Opening balance Increase Reduction Usage variation
Pensions (Note 32. Retirement plan benefits) 12,017,383 29,379 (1,369,237) (3,028) - 10,674,497 Indemnities for termination of fixed-term employment contracts 3,142,499 122,629 (221,094) - (1,855,320) 1,188,714 Sealing & monitoring a landfill 4,308,382 413,729 - - - 4,722,111 Provisions for investments valued using equity method 2,026,439 653 - (68,752) 100,430 2,058,770 Legal proceedings 4,879,608 414,477 (405,697) (2,458) 1,886,839 6,772,769 Quality warranties 6,099 - - - 6,844 12,943 Other 4,176,851 3,710,258 (91,878) (3,340,847) (316,353) 4,138,031
30,557,261 4,691,125 (2,087,906) (3,415,085) (177,560) 29,567,835
With the exception of the provisions set aside for the sealing and monitoring of landfills, which will be used on the date they are sealed, the date of use of the others cannot be estimated, and for this reason these provisions have not been subject to financial updating
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
30. Other current and non-current liabilities
As at December 31, 2009 & 2008, "Other non-current liabilities" has to do with investment subsidies granted to the GROUP as shown hereunder:
2008 Recognition of income Amount of the Amount of the Recognition of Recognition of Beneficiary company asset subsidy Deferred income income in 2008 income in 2007
Aenor 360,183,124 59,543,500 54,906,912 1,593,161 775,831
Ferrovias 7,178,819 1,134,671 501,026 58,654 58,654
Mota-Engil Engenharia 11,587,677 3,956,078 2,192,992 444,541 520,506
RTA 7,619,971 3,108,194 1,887,212 107,941 107,941
SGA 3,956,914 1,377,415 386,886 82,302 82,302
59,875,028 2,286,599 1,545,234
2009 Recognition of income
Amount of the Amount of the Recognition of Recognition of Beneficiary company asset subsidy Deferred income income in 2009 income in 2008
Aenor 348,752,476 59,543,500 53,282,790 2,010,909 1,593,161
Ferrovias 15,318,483 1,207,736 1,082,074 660,721 58,654
Mota-Engil Engenharia 11,587,677 3,956,078 1,562,301 632,618 444,541
RTA 7,619,971 3,108,194 1,779,271 107,941 107,941
SGA 3,956,914 1,377,415 304,585 82,302 82,302
58,011,021 3,494,491 2,286,599
Of total deferred income within the scope of investment subsidies received, the sums of €2,829,586 and €1,896,197 for 2009 & 2008 respectively are recorded under "Other current liabilities", as detailed hereunder.
Information on other current liabilities in respect of the years to December 31, 2009 & 2008, is as follows:
31.12.09 31.12.08 Accrued costs
Cost of holiday pay & bonus 28,109,001 25,843,273 Interest payable 27,189,547 16,727,201 Work in progress by suppliers not billed 41,921,930 30,196,146 Indemnities payable under the motorway concessions 40,442,588 38,142,130 Other costs to be invoiced in motorway concessions 8,593,885 8,136,218 Other accrued costs 33,684,230 41,113,978 179,941,181 160,158,946 Deferred income
Invoicing in advance 146,099,573 34,959,417 Investment subsidies 2,829,586 1,896,197 Rents on own properties 317,770 - Income to be recognised in the motorway concessions 49,327,013 29,348,142 Other deferred income 17,884,850 17,083,835 216,458,792 83,287,591 396,399,973 243,446,537
As at December 31, 2009 & 2008, “Indemnities payable under the motorway concessions” are in respect of the amounts payable to the incorporated joint ventures responsible for the construction of the said motorways, in the wake of the financial rebalancing agreement established between the Ascendi Group and the Portuguese State.
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
31. Commitments
Guarantees Provided
As at December 31, 2009 & 2008, the guarantees provided by the GROUP to third parties in respect of bank guarantees and fidelity insurance provided to employers that have contracted work to the various GROUP companies are broken down by currency as follows:
31.12.09 31.12.08
Czech Crowns 3,738,316 6,478,315 New Romanian Leu 1,098,700 11,244,011 Algerians dinars 1,088,539 1,135,980 US Dollars 165,819,538 56,845,259 Cape Verde Escudos 1,428,470 2,251,643 Euros 716,041,353 730,680,015 Hungarian Forints 31,678,720 32,220,101 Malawi Kwashas 35,359,589 16,767,035 Mozambican Meticais 10,425,318 589,139 Peruvian New Soles 2,393,072 6,573,764 Mexican Pesos 16,075,571 23,296,670 South African Rands 825,624 4,325,703 Polish Zlotys 47,636,294 35,289,502 1,033,609,104 927,697,137
The breakdown by GROUP companies is as follows:
31.12.09 31.12.08
Áreagolf 963,680 - Constructora Perote Xalapa 8,083,908 - CPTP 16,106,352 14,996,092 EMSA 98,444 3,151 Ferrovias 21,045,069 16,165,439 Grossiman 48,865 43,403 Ascendi Group 63,243,033 79,806,061 Indaqua Group 76,726,696 31,200,344 Suma Group 29,005,264 29,215,731 Tertir Group 82,845,817 9,682,226 Hifer 52,812 63,791 Manvia 964,410 880,617 Mota-Engil Serviços Partilhados 504,933 178,757 MKC 203,982 1,284,239 Mota-Engil Ambiente e Serviços 17,123,295 8,395,795 Mota-Engil Central Europe Poland 46,996,031 26,331,633 Mota-Engil Engenharia 631,047,170 633,041,440 Mota-Engil Central Europe Hungary 7,425,653 31,907,957 Mota-Engil Pavimentaçãoes 4,657,494 3,117,536 Mota-Engil SGPS - 12,270,800 Parquegil 3,281 3,281 Planinova 275,178 - Mota-Engil Betão e Pré-Fabricados 5,380,438 4,897,586 RTA 423,173 - Sadoport 1,425,078 1,282,570 Sedengil 54,857 54,857 Tecnocarril 15,000 17,639 Tracevia 6,355,615 4,947,054 Translei 4,821,988 10,115,505 Vibeiras 7,711,588 7,793,633 1,033,609,104 927,697,137
As at December 31, 2009 & 2008, the shares held in and the ancillary capital contributions paid to subsidiaries LUSOSCUT CP, LUSOSCUT GP, LUSOSCUT BLA, LUSOPONTE and AENOR had been given as collateral by the GROUP to secure the loans made by financial entities to these subsidiaries, a mechanism that is included in the legal and financial framework typical of a Project Finance structure.
32. Retirement plan benefits
THE GROUP has assumed defined-benefit retirement plan liabilities for several former and some present employees.
The accounting policies in respect of these plans adopted by the GROUP are described in Indent xx) of the Main valuation criteria in Note 1. Accounting Policies
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
As at December 31, 2009 & 2008, the liabilities for pensioners and those for personnel in service are almost all related with MOTA-ENGIL ENGENHARIA E CONSTRUÇÃO, SA, (€10,256,214 and €11,619,008 respectively), the sums of €418,283 and €398,375 respectively being in respect of other companies.
As at December 31, 2009 & 2008, liabilities towards pensioners and towards staff in service at MOTA- ENGIL ENGENHARIA, and their respective cover, are as follows:
31.12.09 31.12.08
Liabilities to pensioners 1,698,852 3,499,149 Liabilities to personnel in service 8,557,363 8,119,859 Provisions set aside (Note 29. Provisions) 10,256,214 11,619,008 % of cover 100.0% 100.0%
The variation during the year was essentially the result of updating the wages of eligible employees currently in service and to the decease of some pensioner beneficiaries. These liabilities stem from the latest actuarial study available, referred to December 31, 2009, based on the following assumptions:
Retirement age 65 Expected wage increase rate 3% Discount rate 3% Mortality tables TV 88/99 Return on the Fund 3% Pension growth rate 3% Number of payments of the benefit 14
33. Transactions with related parties
a) Commercial transactions
There are relations between the GROUP's subsidiaries that are qualified as transactions with related parties. All these transactions are carried out at arm's length.
These transactions are eliminated in the consolidation procedures since the consolidated financial statements present information on the parent company and its subsidiaries as through they concerned just a single company.
Transactions with associated companies booked using the equity method are not eliminated, and their amounts are as follows:
2009 2008
Sales & services rendered 12,615,358 20,892,259 Cost of merchandise sold 16,994,697 40,352,761
Debtor balances 15,432,657 18,536,838 Creditor balances 30,738,865 18,786,416
These sums do not include any significant balances or transactions with equityholders either of the COMPANY or of any of the other GROUP companies.
The list of GROUP equityholders having qualified holdings is as follows:
Shareholders with qualified holdings
António Manuel Queirós Vasconcelos da Mota Maria Manuela Vasconcelos Mota Maria Teresa Vasconcelos Mota Maria Paula Vasconcelos Mota F.M. - Sociedade de Controlo, SGPS, SA Mota Gestão e Participações, SGPS, SA QMC Development Capital Fund, Plc Privado Holding, SGPS, SA
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
The list of companies having equityholders in common with the Group is as follows:
Companies having commom shareholders
Algosi - Gestão de Participações Sociais, SGPS, SA António de Largo Cerqueira, SA Caves da Cerca, SA Cerâmica de Boialvo, Lda Cogera - Sociedade de Produção de Energia por Cogeração, Lda Covelas - Energia, Lda F.M. - Sociedade de Controlo, SGPS, SA Mota Gestão e Participações, SGPS, SA Sunviauto - Indústria de Componentes de Automóveis, SA Vallis - SGPS, SA
Due to impossibility of determination, this list does not include other companies in which QMC Development Capital Fund, Plc, and Privado Holding, SGPS, SA, are also equityholders.
The directors of the GROUP holding company and of each of its sub-holding companies are as follows:
Mota-Engil, SGPS, SA
António Manuel Queirós Vasconcelos da Mota Jorge Paulo Sacadura Almeida Coelho Arnaldo José Nunes da Costa Figueiredo Maria Manuela Queirós Vasconcelos Mota Maria Teresa Queirós Vasconcelos Mota Maria Paula Queirós Vasconcelos Mota Eduardo Jorge de Almeida Rocha Ismael Antunes Hernandez Gaspar Gonçalo Nuno Gomes de Andrade Moura Martins Luís Manuel Ferreira Parreirão Gonçalves PhD. Luís Valente de Oliveira António Bernardo Aranha da Gama Lobo Xavier José Luís Catela Rangel de Lima António Manuel da Silva Vila Cova
Mota-Engil, Engenharia e Construção, SA
Ismael Antunes Hernandez Gaspar Maria Paula Queirós Vasconcelos Mota António Martinho Ferreira de Oliveira Pedro Manuel Teixeira Rocha Antelo Fernando Alberto Fiel e Barbosa Carlos António Vasconcelos Mota dos Santos Mário Jorge de Melo Faria de Barros Gilberto Silveira Rodrigues Pedro Rodrigues Martins da Costa
Mota-Engil, Ambiente e Serviços, SGPS, SA
Gonçalo Nuno Gomes de Andrade Moura Martins Jorge Agostinho Fernandes Rodrigues Paulo Jorge Silva da Costa Nunes Eduardo João Frade Sobral Pimentel Pedro José Avelar Montalvão de Santos e Silva
Mota-Engil, Concessões de Transportes, SGPS, SA
Gonçalo Nuno Gomes de Andrade Moura Martins Rafael Negrão Rossi Augusto José de Melo Faria de Barros Augusto Manuel Fontes de Carvalho
The GROUP's subsidiaries and associate companies are listed in Appendix A of these Notes to the consolidated financial statements. b) Remuneration of the board and of the Statutory Auditor
The remuneration of the members of the board during the years ended December 31, 2009 & 2008, amount to €4,906,152 (of which €3,555,000 by way of fixed remuneration and €1,257,652 by way of attendance fee for the non-executive directors) and €3,335,492 (of which €2,507,492 by way of fixed
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
remuneration and €128,000 by way of attendance fee for non-executive directors) respectively. In these years the remuneration of the statutory auditor amounted to €45,848 and €22,847 respectively.
This remuneration is determined by the remuneration committee, taking into account the individual performance and the evolution if this type of employment market.
Some directors have defined-benefit pensions. Information on these plans is provided in Note 32 Retirement Plan Benefits.
34. Exploitation of mineral resources
As at December 31, 2009 & 2008, the main assets and liabilities assigned to exploitation of the GROUP's mineral resources are as follows:
31.12.09 31.12.08
Fixed: Land under exploration 28,347,907 28,580,096 Buildings assigned to operations 491,091 577,837 Equipment assigned to operations 8,359,574 9,903,735
Inventories: Mineral stock 5,698,236 4,769,711
Balances receivable: 12,261,634 11,651,156
Balances payable: 19,696,111 11,227,479
The accounting of the land assigned to the exploration of mineral resources is undertaken in accordance with the criteria described in indent iv) of the Main valuation criteria set out in Note 1. Accounting Policies
During 2009 & 2008 the GROUP's operating income and costs related with the exploitation of mineral resources are as described hereunder:
2009 2008
Operating income 27,466,703 25,662,466
Operating costs 25,225,574 22,317,499
EBITDA 2,241,129 3,344,967 EBITDA margin 8.2% 13.0%
During 2009 & 2008 the cash flows generated by the exploitation of mineral resources are as follows:
2009 2008
Cash receipts from customers 26,856,225 24,333,722 Cash paid to suppliers (16,756,942) (19,111,537) Operating cash-flow 10,099,283 5,222,185
Acquisition of fixed assets (2,290,649) (4,783,513) Sale of fixed assets 144,559 186,205 Acquisition of quarry in Central Europe - - Investment cash-flow (2,146,090) (4,597,308)
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Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
35. Contribution of the companies consolidated using the proportionate consolidation method
The contribution of the companies consolidated using the proportionate consolidation method during the years ended December 31, 2009 & 2008, is as follows:
2009 2008
Income 186,755,858 222,117,672 Costs (183,564,520) (209,371,130)
31.12.09 31.12.08
Assets Non-current 1,259,179,907 1,132,438,476 Current 343,232,499 324,675,379 1,602,412,406 1,457,113,855
Liabilities Non-current 1,161,577,570 1,085,651,913 Current 351,851,590 299,545,440 1,513,429,160 1,385,197,353
36. Variations of perimeter
During the year ended December 31, 2009, there were no materially relevant alterations to the perimeter, and for this reason no effects on the main headings of the financial situation statement and income statement are presented.
During 2009 the alterations to the consolidation perimeter, in terms of arrivals and departures of companies were as follows:
Acquisition of companies
Aquisition of 24.19 % of Lusoponte - Concessionária para a Travessia do Tejo, S.A., holding 38.02% of the company share capital Aquisition of 24.19% of Gestiponte - Operação e Manutenção das Travessias do Tejo, S.A., holding 38.02 % of the company share capital Aquisition of 2.32% of Tertir- Terminais de Portugal, S.A., holding 98.88% of the company share capital Aquisition of 49.5% of MK Contractors, LLC, holding 100% of the company share capital Aquisition of 40% of Mota-Engil Central Europe Eslováquia, a.s., holding 100% of the company share capital Aquisition of 100% of the share capital of Transporlixos - Transportes de Lixos, S.A. Aquisition of 100% of the share capital of Carlos Augusto Pinto dos Santos & Filhos S.A.
Companies consolidated for the first time
Bergamon, a.s. Concesionaria Autopista Perote Xalapa S.A. Mamaia Investments SRL Mota-Engil Property Investments Sp. z o.o. Mota-Engil Brasil Participações, Ltda. Transitos de Extremadura S.L. Transitex Lietuvos filiales VBT - Projectos e Obras de Arquitectura Paisagística, Lda
118 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Constitution of companies
Aqualevel - Gestão de Sistemas de informação, Soc. Unipessoal, Lda. Bay 6.3 Kft. Bay Office Kft. Bay Park Kft. Bay Tower Kft. Bay Wellness Kft. Bicske Plaza Kft. Citrave - Centro Integrado de Resíduos de Aveiro, S.A. Chinalog - Serviços Logísticos e Consultadoria, Lda. Engber Kft. Haçor, Concessão Edifício do Hospital da Ilha Terceira, S.A. Hungária Hotel Kft. Achat Iberocargo Rail, S.A. Jeremiasova Project Development, s.r.o. Nádor Öböl Kft. Öböl Invest Kft. Sampaio Kft. Transitos de Extremadura S.L. Transitex Lietuvos filialas (Transitex Lituânia) Transitex Moçambique, Lda Terminais Portuários Euroandinos Sociedade de Terminais de Moçambique, Lda Vista Energy Environment & Services Vista Waste Management, Lda Zsombor utcai Kft Zöld Project 2 Kft
Merger of companies
Almaque - Serviços Técnicos, S.A. merged in Manvia Geogranitos - Pedreiras de Amarante, Lda. merged in Mota-Engil Engenharia Soprocil - Sociedade de Projectos e Construções Civis, S.A. merged in Mota-Engil Engenharia Timoz- Transformadora Industrial de Mármores de Estremoz, Lda. merged in Mota-Engil Engenharia Maprel Nelas, S.A. merged in Mota-Engil Betão e Pré-Fabricados
37. Financial statements for the past 5 years
The main headings of the GROUP's consolidated financial statements for the past 5 years are as follows:
2009 2008 2007 2006 2005
Sales and services rendered 2,131,244,582 1,868,731,191 1,401,899,756 1,308,233,076 1,381,000,637 EBITDA 304,354,691 311,336,139 248,495,314 141,738,046 153,010,732 EBIT 172,358,215 192,740,342 148,186,387 84,193,679 92,691,258 Financial profit / (loss) (115,454,862) (129,759,258) (107,453,070) (36,156,993) (29,787,743) Consolidated net profit / (loss) attributable to the group to minority interests 8,174,069 9,204,245 10,206,823 5,429,156 7,128,562 to the Group 71,738,092 30,565,438 97,538,375 32,205,403 30,407,389
31.12.07 31.12.09 31.12.08 restated 31.12.06 31.12.05
Assets Non-current 2,742,156,579 2,253,100,986 2,114,522,603 758,741,749 725,005,156 Non-current available for sale 29,043,672 29,043,672 - - - Current 1,842,930,627 1,427,506,596 1,249,847,829 976,249,835 920,290,816 4,614,130,878 3,709,651,254 3,364,370,432 1,734,991,584 1,645,295,972
Liabilities Non-current 2,252,090,807 1,934,379,034 1,906,922,121 609,415,337 578,657,643 Current 1,985,948,779 1,433,955,137 1,095,720,799 821,781,450 748,484,644 4,238,039,586 3,368,334,171 3,002,642,920 1,431,196,787 1,327,142,287 Capital próprio atribuível ao Grupo 328,329,691 289,021,913 315,347,369 282,946,007 273,480,095 atribuível a interesses minoritários 47,761,601 52,295,170 46,380,143 20,848,790 44,673,590 376,091,292 341,317,083 361,727,512 303,794,797 318,153,685 4,614,130,878 3,709,651,254 3,364,370,432 1,734,991,584 1,645,295,972
119 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, SGPS, SA
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
38. Notes to the Consolidated Cash-flow Statement
During the years ended December 31, 2009 & 2008, the breakdown of amounts paid in respect of the acquisition of financial investments is as follows:
2009 2008
AE- Perote-Banderilla - 26,731,000 Aqualevel - 212,000 Águas de S. João 2,940,100 - Berd - 297,000 Bergamon - 5,266,000 Cerâmica de Boialvo - 974,000 Granting of supplementary capital 8,093,501 - CAPSFIL 8,267,000 Ascendi Group 32,311,909 10,000,000 Indaqua Group - 428,000 LusoLisboa - 4,428,000 Lusoponte 85,793,160 - Mamaia - 2,980,000 MK Contractors, LLC 294,920 - Mota-Engil Central Europe Eslováquia 383,958 - Obol - 6,000,000 Tertir 1,902,817 34,000 Transporlixos 800,000 Other 1,658,082 575,196 142,445,447 57,925,196
During the years ended December 31, 2009 & 2008, the breakdown of amounts received in respect of the sale of financial investments is as follows:
2009 2008
Return of supplementary capital 5,474,841 - Glintt 3,310,370 - Hidrocontrato 1,402,652 - Land & buildings 1,123,133 1,030,000 Jardimaia - 1 Paviterra - 4,409,067 Other 8,700 12,672 11,319,695 5,451,740
39. Non-current assets held for sale
On December 31, 2008, the GROUP decided to classify under this heading a non-operational plot of land (belonging to the Environment & Services segment) the value of which will be recouped through its sale and not through ongoing use thereof.
Although it did not prove possible in 2009 to implement the sale, the will of the parties (buyer and seller) is still to carry out the deal, which is merely awaiting some legal and administrative procedures.
Additionally, given the fact that the fair value of the land less the expected costs to be incurred with the sale is greater than its acquisition cost, the property is carried at cost.
40. Subsequent events
The main subsequent events occurring in 2010 up to the date of approval of the consolidated financial statements are summarised in Chapter 9 of the Management report (“Relevant facts after the end of the fiscal year”), which had no effect on the attached financial statements.
41. Approval of the financial statements
These financial statements were approved by the board of directors of the GROUP on March 8, 2010. However, they are still pending approval by the Annual General Meeting, although the GROUP's board of directors is of the conviction that they will be approved without alteration.
120 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d
APPENDIX A – CONSOLIDATED COMPANIES
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Investments in subsidiaries included in consolidated financial statements
Investments in subsidiaries included in consolidated financial statements using the full consolidation method, their registered offices, the percentage of share capital held, their business, their constitution date, are as follows:
Registered Establishment Acquisition Company % owned Activity office date date
Company Mother of the Group and Connected Activities
Mota Engil, SGPS, S.A., public company (" Mota Engil SGPS") Portugal - Holding Company Aug-90 - (Amarante)
Largo do Paço – Investimentos Turísticos e Imobiliários, Lda. (“Largo do Paço”) Portugal 100.00 Real-Estate - Oct-01 Through Mota-Engil SGPS (Amarante) 100.00
Mota-Engil Brasil Participações, Ltda. (“Mota-Engil Brasil”) Brazil 100 Holding Company Feb-09 - Through Mota-Engil SGPS (São Paulo) 99.9 Through Mota-Engil Concessões de Transportes 0.10
MESP-Mota Engil , Serviços Partilhados, Administrativos e de Gestão, S.A. (“Mota-Engil Portugal 100.00 Administrative services Dec-02 - Serviços Partilhados”) (Amarante) Through Mota-Engil SGPS 100.00
RTA - Rio Tâmega, Turismo e Recreio, S.A. (“RTA”) Portugal 100.00 Real-Estate and tourism - May-00 Through Mota-Engil SGPS (Amarante) 100.00
SGA – Sociedade de Golfe de Amarante, S.A. (“SGA”) Portugal 97.17 Golf and related Dec-00 - Through RTA (Amarante) 96.89 Through Mota-Engil Engenharia 0.28
Business Area - Engineering & Construction
Mota-Engil Engenharia e Construção, S.A. (“Mota-Engil Engenharia”) Portugal 100.00 Civil construction and purchase - Dec-00 Through Mota-Engil SGPS (Amarante) 100.00 and sale of properties
Aurimove – Sociedade Imobiliária, S.A. (“Aurimove”) Portugal 100.00 Real-Estate Dec-93 - Through Mota-Engil Real Estate Portugal (Porto) 100.00
Bicske Plaza Kft. (“Bicske Plaza”) Hungary 100.00 Real-Estate Jan-08 - Through Mota-Engil Central Europe, SGPS (Budapest) 100.00
Calçadas do Douro - Sociedade Imobiliária, Lda. (“Calçadas do Douro”) Portugal 100.00 Real-Estate - Sep-00 Through Mota-Engil Real Estate Portugal (Porto) 100.00
Carlos Augusto Pinto dos Santos & Filhos S.A. ("CAPSFIL") Portugal 100.00 Quarrying Mar-77 Oct-09 Through Mota-Engil Engenharia (Vila Flor) 100.00
Companhia Portuguesa de Trabalhos Portuários e Construções, S.A. (“CPTP”) Portugal 100.00 Port construction & works - Jul-02 Through Mota-Engil Engenharia (Lisboa) 100.00
Corgimobil - Empresa Imobiliária das Corgas, Lda. ("Corgimobil") Portugal 95.47 Construction, studies and real- - Nov-00 Through Mota-Engil Engenharia (Cascais) 70.17 estates Through Mota-Engil Real Estate Portugal 25.30
Dmowskiego Project Development ("Dmowskiego") Poland 100.00 Real-Estate Aug-07 - Through Mota–Engil Central Europe, SGPS (Krakow) 100.00
Edifício Mota Viso – Soc. Imobiliária, Lda. (“Mota Viso”) Portugal 100.00 Real-Estate Jun-94 - Through Mota-Engil Real Estate Portugal (Porto) 100.00
Edipainel – Utilidades, Equipamentos e Investimentos Imobiliários, Lda. (“Edipainel”) Portugal 100.00 Real-Estate Mar-02 - (Porto) Through Mota-Engil Real Estate Portugal 70.00 Through Mota–Engil Engenharia 30.00
Emocil – Empresa Moçambicana de Construção Imobiliária (“Emocil”) Mozambique 75.00 Real-Estate Jul-94 - Through Mota-Engil Engenharia (Maputo) 50.00 Through Indimo 25.00
Ferrovias e Construções, S.A. (“Ferrovias”) Portugal 100.00 Railway construction and Apr-88 Sep-94 Through Mota–Engil Engenharia (Linda-a-Velha) 100.00 maintenance
Hungária Hotel Kft. Achat (" Hotel Achat Hungria") Hungary 100.00 Real-Estate Jun-08 - Through Mota-Engil Central Europe, SGPS (Budapest) 100.00
Jeremiasova Project Development, s.r.o. ("Jeremiasova") Czech Republic 100.00 Real-Estate Jun-08 Oct-09 Through Mota-Engil Central Europe, SGPS (Prague) 90.00 Through Mota-Engil Central Europe República Checa 10.00
Kilińskiego Project Development Sp. z o.o. (“Kilin”) Poland 100.00 Real-Estate Aug-07 - Through Mota-Engil Central Europe, SGPS (Krakow) 100.00
Kordylewskiego Project Development Sp. z o.o. ("Kord") Poland 100.00 Real-Estate Feb-05 - Through Mota-Engil Central Europe, SGPS (Krakow) 100.00
Kozielska Sp. z o.o. ("Kozielska") Poland 60.00 Real-Estate Aug-07 - (Krakow) Through Mota-Engil Central Europe, SGPS 60.00 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Registered Establishment Acquisition Company % owned Activity office date date
Metroepszolg, Zrt (“Metroepszolg”) Hungary 99.99 Civil constructions Dec-00 - Through Mota-Engil Central Europe Hungria (Budapest) 99.99
Mil e Sessenta – Sociedade Imobiliária, Lda. (“Mil e Sessenta") Portugal 100.00 Real-Estate - Jul-01 Through Mota-Engil Real Estate Portugal (Porto) 100.00
M-Invest Barrandov, a.s. (“Barrandov”) Czech Republic 90.00 Real-Estate Dec-06 - Through M-Invest (Prague) 90.00
M-Invest Bohdalec, A.S. (“Bohdalec”) Czech Republic 90.00 Real-Estate Sep-03 - Through M-Invest (Prague) 90.00
M-Invest Devonska, s.r.o. ("M-Invest Devonska") Czech Republic 90.00 Real-Estate Nov-06 - Through M-Invest (Prague) 90.00
M-Invest Jihlavska, A.S. (“Jihlavska”) Czech Republic 90.00 Real-Estate Feb-04 - Through M-Invest (Prague) 90.00
M-Invest Portugalia, s.r.o. ("M-Invest Portugalia") Czech Republic 90.00 Real-Estate - Sep-07 Through M-Invest (Prague) 90.00
M-Invest Slovakia, s.r.o. ("M-Invest Slovakia") Slovakia 100.00 Real-Estate Jun-06 - Through Mota-Engil Central Europe, SGPS (Bratislava) 100.00
M-Invest, sro (“M-Invest”) Czech Republic 100.00 Real-Estate Mar-98 Dec-00 Through Mota-Engil Central Europe, SGPS (Prague) 100.00
MK Contractors, LLC (“MKC”) USA 100.00 Real-Estate Mar-02 - Through Mota-Engil Engenharia (Miami) 100.00
Moravské Pozemní Stavby, s.r.o. ("Moravské") Czech Republic 96.67 Civil constructions Nov-00 Dec-00 Through Mota-Engil Central Europe República Checa (Jihlava) 96.67
Mota Internacional – Comércio e Consultadoria Económica, Lda. (“Mota Internacional”) Portugal 100.00 Comércio e gestão de Sep-97 Dec-98 (Funchal) participações internacionais Through Mota–Engil Engenharia 100.00
Motadómus - Sociedade Imobiliária, Lda. ("Motadómus") Portugal 100.00 Civil constructions Jan-97 Jan-01 Through Aurimove (Porto) 95.00 Through Mota-Engil Real Estate Portugal 5.00
Mota-Engil Betão e Pré-Fabricados, Sociedade Unipessoal, Lda. (“Mota-Engil Betão e Pré- Portugal 100.00 Manufacture and marketing of Jul-96 - Fabricados”) (Porto Alto) concrete, cement and bituminous Through Mota–Engil Engenharia 100.00
Mota-Engil Central Europe, SGPS, S.A. ("Mota-Engil Central Europe SGPS") Portugal 100.00 Holding Company Dec-02 - Through Mota-Engil Engenharia (Porto) 100.00
Mota-Engil Central Europe, S.A. ("Mota-Engil Central Europe Polónia) Poland 100.00 Civil constructions Feb-53 Mar-99 Through Tabella Holding (Krakow) 37.50 Through Mota-Engil Central Europe, SGPS 46.25 Through Mota-Engil Real Estate Management 16.25
Mota-Engil Central Europe Česka Republika ("Mota-Engil Central Europe República Czech Republic 100.00 Civil constructions Jan-97 - Checa") (Prague) Through Mota-Engil Central Europe Polónia 100.00
Mota-Engil Central Europe Slovenská Republika ("Mota-Engil Central Europe Eslováquia") Slovakia 100.00 Civil constructions Aug-04 - (Bratislava) Through Mota-Engil Central Europe Plónia 100.00
Mota-Engil Central Europe Magyarország (“Mota-Engil Central Europe Hungria”) Hungary 100.00 Civil constructions Jan-96 - Through Mota–Engil Central Europe Polónia (Budapest) 100.00
Mota-Engil Investitii AV s.r.l. (“Mota-Engil Investitii”) Roménia 100.00 Real-Estate - Sep-07 Through Mota-Engil Central Europe, SGPS (Bucareste) 100.00
Mota-Engil Ireland Construction Limited (“Mota-Engil Contruction”) Ireland 60.00 Civil constructions Oct-07 - Through Mota-Engil Engenharia (Ballinasloe) 60.00
Mota-Engil Krusziwa S.A. ("Mota-Engil Krusziwa") Poland 100.00 Real-Estate Apr-08 - Through Mota-Engil Central Europe Polónia (Krakow) 100.00
Mota-Engil Pavimentações, S.A. (“Mota-Engil Pavimentações”) Portugal 100.00 Civil constructions Jan-86 - Through Mota-Engil Engenharia (Amarante) 100.00
Mota-Engil Project 1 Kft. ("GOD") Hungary 100.00 Civil constructions Oct-05 - Through Mota-Engil Central Europe Hungria (Budapest) 100.00
Mota-Engil Property Investments Sp. z o.o. ("Mota-Engil Property") Poland 100.00 Real-Estate - Sep-07 Through Mota-Engil Central Europe, SGPS (Krakow) 100.00
Mota-Engil Real Estate Hungary Kft ("Merehun") Hungary 100.00 Real-Estate Jul-05 - Through Mota-Engil Central Europe, SGPS (Budapest) 100.00
Mota-Engil Real Estate Management ("Mota-Engil Real Estate Management") Poland 100.00 Real-Estate Jun-05 - Through Mota–Engil Central Europe, SGPS (Krakow) 100.00
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Registered Establishment Acquisition Company % owned Activity office date date
Business Area - Environment & Services
Mota-Engil, Ambiente e Serviços, SGPS, S.A. (“Mota-Engil Ambiente e Serviços”) Portugal 100.00 Holding Company Jun-97 - (Porto) Through Mota-Engil SGPS 100.00
Áreagolfe - Gestão, Construção e Manutenção de Campos de Golf, S.A. ("Áreagolfe") Portugal 46.60 Golf courses - Jul-07 (Torres Novas) Through Vibeiras 46.60
Aqualevel - Gestão de Sistemas de informação, Soc. Unipessoal, Lda.(“Aqualevel”) Portugal 50.06 Operation and management of - May-09 Through Indaqua (Covilhã) 50.06 water systems and sanitation
Beiratir - Terminais da Covilhã, Lda. ("Beiratir") Portugal 98.88 Terminal exploitation Dec-87 Oct-06 Through Tertir (Covilhã) 98.88
Citrave - Centro Integrado de Resíduos de Aveiro, S.A. ("Citrave") Portugal 46.13 Collection of non-hazardous Dec-87 Oct-06 Through Suma (Lisboa) 44.90 waste Through Novaflex 0.62 Through Suma Esposende 0.62
Correia & Correia, Lda. (“Correia & Correia”) Portugal 45.46 Marketing and collection of used Sep-88 Feb-00 Through Enviroil (Sertã) 36.37 oil Through Quotas Próprias 9.09
E.A.Moreira - Agentes de Navegação, S.A. ("E.A. Moreira") Portugal 98.88 Navigation agents Oct-45 Oct-06 Through Tertir (Matosinhos) 98.88
Ekosrodowisko Spółka z.o.o. ("Ekosrodowisko") Poland 61.50 Refuse treatment Feb-05 Dec-05 Through Mota-Engil Srodowisko (Bytom) 61.50
EMSA – Empreendimentos e Exploração de Estacionamentos, S.A. (“EMSA”) Portugal 100.00 Car parking exploration Dec-00 - Through Mota-Engil Ambiente e Serviços (Cascais) 100.00
Enviroil – Resíduos e Energia, Lda. (“Enviroil”) Portugal 45.46 Marketing and collection of used Nov-97 - Through Suma (Torres Novas) 45.46 oil
Glan Agua, Ltd (“Glanagua”) Ireland 70.00 Refuse treatment Jan-08 - Through Mota-Engil Irish Services Ltd (Ballinasloe) 70.00
GT - Investimentos Internacionais SGPS, SA ("GT SGPS") Portugal 98.99 Holding Company Oct-06 - Through Tertir (Porto) 46.97 Through Tertir SGPS 42.02 Through Mota-Engil Ambiente e Serviços 10.00
Indaqua – Indústria e Gestão de Águas, S.A. (“Indaqua”) Portugal 50.06 Management and exploration of Jun-94 - Through Mota-Engil Ambiente e Serviços (Matosinhos) 50.05 water and sanitation systems Through MEAS II 0.01
Indaqua Fafe – Gestão de Águas de Fafe, S.A. (“Indaqua Fafe”) Portugal 49.99 Management and exploration of Dec-95 - Through Indaqua (Fafe) 49.99 water and sanitation systems
Indaqua Feira - Indústria de Águas de Santa Maria da Feira, S.A. (“Indaqua Feira”) Portugal (Sta. 47.56 Management and exploration of Mar-99 - Through Indaqua Maria da Feira) 46.56 water and sanitation systems Through Mota-Engil Engenharia 1.00
Indaqua Matosinhos - Gestão Águas de Matosinhos, S.A. (“Indaqua Matosinhos”) Portugal 49.81 Management and exploration of Jun-07 - Through Indaqua (Matosinhos) 48.81 water and sanitation systems Through Mota-Engil Engenharia 1.00
Indaqua Santo Tirso – Gestão de Águas de Santo Tirso, S.A. (“Indaqua St. Tirso”) Portugal 50.05 Management and exploration of Dec-98 - Through Indaqua (Santo Tirso) 50.05 water and sanitation systems
Indaqua Vila do Conde - Gestão de Águas de Vila do Conde, S.A. (“Indaqua Conde”) Portugal 49.92 Water distribution Dec-07 - (Vila do Conde) Through Indaqua 49.06 Through Mota-Engil Engenharia 0.86
InvestAmbiente - Recolha de Resíduos e Gestão de Sistemas de Saneamento Básico, S.A. Portugal 31.98 Collection of non-dangerous Feb-00 Dec-07 ("Investambiente") (Lisboa) waste Through Novaflex 31.98
Liscont - Operadores de Contentores, S.A. ("Liscont") Portugal 82.01 Container operators Nov-83 Oct-06 Through Sadomar (Lisboa) 51.11 Through Multiterminal 30.90
Lisprojecto - Consultoria e Soluções Informáticas, S.A. ("Lisprojecto") Portugal 69.71 Port consultants Jul-92 Oct-06 Through Liscont (Lisboa) 69.71
Lokemark - Soluções de Marketing ("Lokemark") Portugal 70.00 Other Activities in Support and Jun-03 Sep-07 Through Mota-Engil Ambiente e Serviços (Setúbal)(Lisboa) 70.00 Services
Manvia - Manutenção e Exploração de Instalações e Construção, S.A. ("Manvia") Portugal 90.00 Installation maintenance and Jul-94 Jun-98 Through Mota–Engil Ambiente e Serviços (Lisboa) 90.00 operations
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Registered Establishment Acquisition Company % owned Activity office date date
Mota-Engil II, Gestão, Ambiente, Energia e Concessões de Serviços, S.A. ("MEASII") Portugal 100.00 Management of projects Dec-03 - (Porto) Through Mota-Engil Ambiente e Serviços 100.00
Mota-Engil Irish Services Ltd (“MEIS”) Ireland 70.00 Refuse treatment Jan-08 - Through Mota-Engil Ambiente e Serviços (Ballisnasloe) 70.00
Mota-Engil Srodowisko, Sp. z.o.o. ("MES") Poland 61.50 Refuse treatment Dec-05 - Through Suma (Cracóvia) 61.50
Multiterminal - Soc. De Estiva e tráfego, S.A. ("Multiterminal") Portugal 98.88 Terminal exploitation May-79 Oct-06 Through Tertir (Lisboa) 98.88
Norcargas - Cargas e Descargas, Lda. ("Norcargas") Portugal 98.88 Shipments and discharges Sep-83 Oct-06 Through E.A. Moreira (Matosinhos) 98.88
Nova Beira - Gestão de Resíduos, S.A. ("Nova Beira") Portugal 30.85 Industrial refuse treatment and - Dec-07 Through Novaflex (Lisboa) 20.30 disposal Through InvestAmbiente 10.55
Novaflex - Técnicas do Ambiente, S.A. ("Novaflex") Portugal 61.50 Collection of other non-dangerous - Dec-07 Through Suma (Lisboa) 61.50 waste
Operport - Sociedade Portuguesa de Operadores Portuários, Lda. ("Operport") Portugal (Lisboa) 98.88 Port operations Jan-83 Oct-06 Through Tertir 98.88
Proempar - Promoção e Gestão de Parques Empresariais e Tecnológicos, S.A. Portugal 52.00 Management of technological Oct-06 - ("Proempar") (Porto) parks Through Mota-Engil Ambiente e Serviços 26.00 Through Mota–Engil Engenharia 26.00
PTT - Parque Tecnológico do Tâmega ("PTT") Portugal 51.20 Management of technological Dec-06 - Through Proempar (Felgueiras) 31.20 parks Through Mota-Engil Ambiente e Serviços 10.00 Through Mota-Engil Engenharia 10.00
Real Verde - Técnicas de Ambiente, S.A. ("Real Verde") Portugal 58.43 Industrial refuse treatment and Dec-07 - Through Novaflex (Vila Real) 58.43 disposal
Resiges - Gestão de Resíduos Hospitalares, Lda. ("Resiges") Portugal 30.75 Collection of dangerous waste May-98 Dec-07 Through Novaflex (Setúbal) 30.75
Resilei – Tratamento de Resíduos Industriais, Lda ("Resilei") Portugal 30.75 Industrial refuse treatment - Jun-03 Through Suma (Leiria) 30.75
Rima – Resíduos Industriais e Meio Ambiente, S.A. (“Rima”) Portugal 59.32 Industrial refuse treatment Aug-01 - Through Suma (Silvares) 59.32
Sadomar - Ag. de Naveg. e Trânsitos, S.A. ("Sadomar") Portugal 98.88 Navigation agents - Oct-06 Through Tertir (Lisboa) 98.88
Sealine - Navegação e Afretamentos ("Sealine") Portugal 59.90 Navigation agents - Oct-06 Through Socarpor Aveiro (Aveiro) 9.38 Through Socarpor SGPS 50.51
SIGA - Serviço Integrado Gestão Ambiental ("Siga") Portugal 43.05 Industrial refuse treatment and Oct-08 - Through SUMA (S. Roque) 43.05 disposal
Socarpor - Soc. Cargas Port. (Aveiro), S.A. ("Socarpor Aveiro") Portugal 62.55 Port services - Oct-06 Through Socarpor SGPS (Aveiro) 51.19 Through Operport 11.36
Socarpor - Soc. Gestora de Participações Sociais (Douro e Leixões), S.A. ("Socarpor Portugal 59.43 Holding Company - Oct-06 SGPSD/L") (Matosinhos) Through Tertir 59.43
Sotagus - Terminal de Contentores de Santa Apolónia, S.A. ("Sotagus") Portugal 98.88 Containers terminal - Oct-06 Through Tertir (Lisboa) 49.44 Through Multiterminal 49.44
SRI - Gestão de Resíduos, Lda (“SRI”) Portugal 45.46 Collection of dangerous waste Jul-08 - Through Correia e Correia (Sertã) 45.42 Through Enviroil 0.04
Suma – Serviços Urbanos Meio Ambiente, S.A. (“SUMA”) Portugal 61.50 Collection of Municipal Solid Jun-94 - Through Mota-Engil Ambiente e Serviços (Lisboa) 61.50 Waste
Suma (Douro) Serviços Urbanos e Meio Ambiente, Lda. (“SUMA Douro”) Portugal 61.50 Collection of Municipal Solid Jul-00 - Through Suma (Murça) 61.50 Waste
Suma (Esposende) Serviços Urbanos, Lda. (“SUMA Esposende”) Portugal 61.50 Collection of Municipal Solid Dec-99 - Through Suma Esposende 61.50 Waste
Suma (Matosinhos) Serviços Urbanos, S.A. ("SUMA Matosinhos") Portugal 61.50 Collection of Municipal Solid Dec-00 - Through Suma (Matosinhos) 61.50 Waste
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Registered Establishment Acquisition Company % owned Activity office date date
Suma (Porto) - Serviços Urbanos e Meio Ambiente, S.A. (“SUMA Porto”) Portugal 61.50 Collection of Municipal Solid Nov-08 - Through Suma (Porto) 61.50 Waste
Takargo-Trasporte de Mercadorias, S.A. (“Takargo”) Portugal 100.00 Rail transport of goods Sep-06 - Through Mota-Engil Ambiente e Serviços (Oeiras) 70.00 Through Ferrovias 30.00
TCL - Terminal de Contentores de Leixões, S.A. ("TCL") Portugal 51.71 Port services Jan-96 - Through Socarpor SGPS D/L (Matosinhos) 22.44 Through Norcargas 9.09 Through TEN 20.18
TEN - Tráfego e Estiva do Norte, SA ("TEN") Portugal 98.88 Port services Jan-83 Oct-06 Through Tertir (Perafita) 98.88
Terminais Portuários Euroandinos ( Terminais Portuários México") Peru 39.55 Port services - - Through Tertir (Paita) 39.55
Ternor - Sociedade de Exploração de Terminais, S.A. ("Ternor") Portugal 98.0 Terminal exploitation Feb-74 Oct-06 Through Mota-Engil Ambiente e Serviços (Matosinhos) 94.1 Through E.A. Moreira 3.6 Through Tertir 0.3
Tertir - Concessões Portuárias, SGPS, S.A. ("Tertir SGPS") Portugal 98.88 Holding Company Oct-07 - Through Tertir (Lisboa) 98.88
Tertir - Terminais de Portugal, S.A. ("Tertir") Portugal 98.88 Terminal exploitation - Oct-06 Through Ternor (Lisboa) 32.07 Through Liscont 2.14 Through Mota-Engil Ambiente e Serviços 64.67
Transitex - Trânsitos Extremadura, SL ("Transitex Espanha") Spain 69.71 Container operators Nov-02 - Through Liscont (Badajoz) 69.71
Transitex Moçambique, Lda (" Transitex Moçambique") Mozambique 71.18 Container operators Nov-08 - Through Transitiber (Maputo) 66.23 Through GTSGPS 4.95
Transitiber - Logística e Transporte Internacional, S.A. ("Transitiber") Portugal 69.71 Transport organization May-08 - Through Transitex (Lisboa) 69.71
Transitos de Extremadura S.L. Transitex Lietuvos filialas("Transitex Lituânia") Spain 69.71 Transport organization Apr-08 - Through Transitex (Badajoz) 69.71
Transporlixos - Transportes de Lixos, S.A..("Transporlixos") Portugal 61.50 Collection of non-hazardous - Sep-09 Through Triu 61.50 waste
Tratofoz - Sociedade de Tratamento de Resíduos, S.A.("Tratofoz") Portugal 99.61 Collection of Municipal Solid Oct-02 - Through Mota-Engil Ambiente e Serviços (Maiorca) 98.99 Waste Through Suma 0.62
Triu - Técnicas de Resíduos Industriais e Urbanos, S.A. ("Triu") Portugal 61.50 Collection of non-hazardous Apr-91 Sep-08 Through Suma (Prior Velho) 61.50 waste
VBT - Projectos e Obras de Arquitectura Paisagística, Lda (“VBT”) Angola 43.35 Activities Planting and Garden Sep-08 - Through Mota-Engil Ambiente e Serviços (Luanda) 10.00 Maintenance Through Vibeiras 33.35
Vibeiras – Sociedade Comercial de Plantas, S.A. (“Vibeiras”) Portugal 66.67 Activities Planting and Garden Jul-88 Oct-98 Through Mota-Engil Ambiente e Serviços (Torres Novas) 66.67 Maintenance
Vista Waste Management, Lda ("VistaWwaste") Angola 50.64 Collection of Solid Waste Dec-09 - Through Suma (Luanda) 30.14 Through Vista SA 20.50
Business Area - Transport Concessions
Mota-Engil Concessões de Transportes, SGPS, S.A. (“Mota-Engil Concessões de Portugal 100.00 Holding Company Jan-03 - ThroughTransportes”) Mota-Engil SGPS (Lisboa) 100.00
Ascendi - Concessões de Transportes, SGPS, S.A. ("Ascendi SGPS") Portugal 60.00 Holding Company Feb-08 - Through Mota-Engil Concessões de Transportes (Lisboa) 60.00
Ascendi-Serv. Assessoria Gestão Operação, S.A. ("Ascendi SA") Portugal 60.00 Transport concessions Feb-08 - Through Ascendi SGPS (Lisboa) 60.00
Equimetragem - Operação e manutenção de infra. de transportes, Lda. (“Equimetragem”) Portugal 60.00 Transport concessions Jul-08 - Through Ascendi SA (Lisboa) 60.00
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Jointly controlled companies consolidated using the Proportional Method
Jointly controlled companies consolidated using the Proportional Method The companies sonsolidated using, their registered offices, the percentage of share capital held, their business, their constitution date, are as follows:
Establishment Acquisition Company Registered office % owned Activity date date
Business Area - Engineering & Construction
Bergamon, A.S. ("Bergamon") Slovakia 50.00 Real-Estate May-04 Dec-07 Through Mota-Engil Central Europe, SGPS (Bratislava) 50.00
Cimertex & Companhia- Comércio Equip. e Ser. Técnicos, Lda. (“Cimertex & Portugal 50.00 Construction - Jan-96 Companhia”) (Matosinhos) Through Mota-Internacional 50.00 Cimertex Angola – Sociedade de Máquinas e Equipamentos, Lda. (“Cimertex Angola”) Angola 50.00 Construction Feb-95 - (Luanda) Through Mota-Engil Engenharia 50.00 Construcciones Crespo, SA ("Crespo") Spain 50.00 Construction - Sep-07 Through Mota-Engil Engenharia (Pontevedra) 50.00
Constructora Autopista Perote Xalapa, S.A. de C.V. (“Constructora Perote Xapala”) Mexico 50.00 Construction Mar-08 -
Through Mota-Engil Engenharia (Xalapa) 50.00
Grossiman, S.L. (“Grossiman”) Spain 50.00 Railway construction and - - Through Mota-Engil Engenharia (Madrid) 50.00 maintenance
Hifer Construcción Conservación y Servicios, S.A. (“Hifer”) Spain 50.00 Railway construction and Nov-03 Oct-05 Through Ferrovias (Madrid) 50.00 maintenance
Icer – Indústria de Cerâmica, Lda. (“Icer”) Angola 50.00 Ceramic industry Nov-91 - Through Mota-Internacional (Luanda) 50.00
M-Invest Slovakia Mierova , s.r.o. ("Mierova") Slovakia 50.00 Real-Estate Jun-06 - Through M-Invest Slovakia (Bratislava) 50.00
M-Invest Slovakia Trnavska, s.r.o. ("Trnavska") Slovakia 50.00 Real-Estate Jun-06 - Through M-Invest Slovakia (Bratislava) 50.00
Probigalp Ligantes Betuminosos, S.A. (“Progalp”) Portugal 40.00 Bituminous product manufacture Apr-98 - Through Mota-Engil Engenharia (Matosinhos) 40.00
Business Area - Environment & Services
Ambigere, S.A. ("Ambigere") Portugal 30.75 Collection of Municipal Solid Jun-06 Jul-07 Through Suma (Funchal) 30.75 Waste
Chinalog - Serviços Logísticos e Consultadoria, Lda. ("Chinalog") Portugal 49.44 Organization of Transportation Jan-09 Through Tertir (Oeiras) 49.44
Ibercargo Rail, S.A. ("Ibercargo") Spain 50.00 Transportation by Railroad Apr-09 - Through Takargo (Madrid) 50.00
Parquegil - Planeamento e Gestão de Estacionamento, S.A. (“Parquegil”) Portugal 50.00 Car parking management Jan-00 -
Through EMSA (Lisboa) 50.00
Relevante Função - Gestão e Valorização Resíduos, Lda (“Relevante Função”) Portugal 30.75 Collection of non-dangerous Oct-07 - (S. Mamede de Infesta) waste Through Triu 30.75
Sadoport - Terminal Marítimo do Sado, S.A. ("Sadoport") Portugal 50.00 Port Activities Jun-04 - Through SLPP (Setúbal) 50.00
SLPP - Serviços Logísticos de Portos Portugueses, S.A. ("SLPP") Portugal 50.00 Port Activities Oct-05 - Through Mota-Engil Ambiente e Serviços (Linda-a-Velha) 50.00
Sociedade de Terminais de Moçambique, Lda ("STM") Moçambique 49.44 Port operator terminal Nov-08 - Through Tertir (Maputo) 49.44
TTRM, Transferência e Triagem de Resíduos da Madeira ACE ("TTRM") Portugal 15.38 Collection of Municipal Solid - Jul-07 Waste Through Ambigere (Funchal) 15.38
Vista Energy Environment & Services ("Vista SA") Angola 50.00 Holding Company Dec-09 - Through Mota-Engil Ambiente e Serviços (Luanda) 50.00
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Establishment Company Registered office % owned Activity date
Business Area - Transport Concessions
Aenor – Auto-Estradas do Norte, S.A. (“Aenor”) Portugal 35.11 Transport concession Jun-99 Through Mota-Engil Concessões de Transportes (Matosinhos) 35.11
Aenor Douro - Estradas do Douro Interior, S.A. (“ADI”) Portugal 45.93 Transport concession Nov-08 Through Mota-Engil Concessões de Transportes (Matosinhos) 8.85 Through Mota-Engil Engenharia 37.08
Concesionaria Autopista Perote Xalapa SA DE CV ("Concesionaria Perote Xalapa") Mexico 30.00 Transport concession Nov-08
Through Mota-Engil Concessões de Transportes (Mexico) 30.00
LusoLisboa - Auto-Estradas da Grande Lisboa, S.A. ("LusoLisboa") Portugal 36.09 Transport concession Dec-06 Through Mota-Engil Engenharia (Lisboa) 36.09
Lusoscut – Auto-Estradas do Grande Porto, S.A. (“Lusoscut GP”) Portugal 36.09 Transport concession Jul-02 Through Mota-Engil Concessões de Transportes (Matosinhos) 36.09
Lusoscut – Auto-Estradas da Costa de Prata, S.A. (“Lusoscut CP”) Portugal 36.09 Transport concession Mar-00 Through Mota-Engil Concessões de Transportes (Aveiro) 36.09
Lusoscut – Auto-Estradas das Beiras Litoral e Alta, S.A. (“Lusoscut BLA”) Portugal 36.09 Transport concession Mar-01
Through Mota-Engil Concessões de Transportes (Viseu) 36.09
Operadora Douro Interior - Operação e Manutenção Rodoviária, S.A. (“ODI”) Portugal 45.93 Operation and maintenance of Nov-08 motorways Through Aenor Douro (Matosinhos) 36.74 Through Mota-Engil Concessões de Transportes 1.77 Through Mota-Engil Engenharia 7.42
Operadora GL - Operação e Manutenção de Auto-Estradas, S.A. ("Operadora Portugal 36.09 Operation and maintenance of Dec-06 LusoLisboa") motorways Through Mota-Engil Engenharia (Lisboa) 7.22 Through LusoLisboa 28.87
Operadora Lusoscut CP – Operação e Manutenção de Auto-Estradas, S.A. (“Operadora Portugal 36.09 Operation and maintenance of Mar-00 Lusoscut CP”) (Aveiro) motorways Through Mota-Engil Concessões de Transportes 7.22 Through Lusoscut CP 28.87
Operadora Lusoscut BLA – Operação e Manutenção de Auto-Estradas, S.A. Portugal 36.09 Operation and maintenance of Mar-01 (“Operadora Lusoscut BLA”) (Viseu) motorways Through Mota-Engil Concessões de Transportes 7.22 Through Lusoscut BLA 28.87
Operadora Lusoscut GP – Operação e Manutenção de Auto-Estradas, S.A. (“Operadora Portugal 36.09 Operation and maintenance of Jul-02 Lusoscut GP”) (Matosinhos) motorways Through Mota-Engil Concessões de Transportes 7.22 Through Lusoscut GP 28.87
Operanor – Operação e Manutenção de Auto-Estradas, S.A. (“Operanor”) Portugal 35.11 Operation and maintenance of Jun-99 motorways Through Aenor (Matosinhos) 28.09 Through Mota-Engil Concessões de Transportes 7.02
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d MOTA-ENGIL, S.G.P.S., S.A.
Notes to the Consolidated Financial Statements as at December 31, 2009 & 2008
Investments in associates using equity method
Group and associate companies included in the consolidation using the equity method, their registered offices and proportion of share capital held as at December 31, 2009, are as follows:
Company Registered office % owned
Ambilital – Investimentos Ambientais no Alentejo, EIM. (“Ambilital”) Portugal 30.14
Asinter – Comércio Internacional, Lda. (“Asinter”) Portugal 30.00
Auto Sueco Angola, S.A. (“Auto Sueco Angola”) Angola 25.50
Bay 6.3 Kft. ("Bay 6.3") Hungary 29.70 Bay Office Kft. ("Bay Office") Hungary 29.70 Bay Park Kft. ("Bay Park") Hungary 29.70
Bay Tower Kft. ("Bay Tower") Hungary 29.70 Bay Wellness Kft. ("Bay Wellness2) Hungary 29.70
Berd - Projecto Investigação e Engenharia de Pontes, SA ("Berd") Portugal 24.79 Citrup – Centro Integrado de Resíduos, Lda. (“Citrup”) Portugal 18.45
Ecolezíria - Empresa Intermunicipal para o Tratamento de Resíduos Sólidos, E. I. M. ("Ecolezíria") Portugal 15.07 Engber Kft. ("Engber") Hungary 29.70
Gestiponte - Operação e Manutenção das Travessias do Tejo, S.A. ("Gestiponte") Portugal 38.02 Haçor, Conc. Edifício do hospital da ilha terceira, SA ("Haçor") Portugal 40.00
Logz - Atlantic Hub, S.A. ("Logz") Portugal 34.61 Lusoponte - Concessionária para a Travessia do Tejo, S.A. ("Lusoponte") Portugal 38.02 Mamaia Investments, SRL ("Mamaia") Romania 24.00
Nádor Öböl Kft. ("Nádor Obol") Hungary 29.70 Öböl Invest Kft. ("Obol Invest") Hungary 30.00
Öböl XI Kft. ("Obol XI") Hungary 29.70 Sampaio Kft. ("Sampaio") Hungary 29.70
Sołtysowska Project Development Sp. z o.o. ("Soltysowska") Poland 34.00 Tersado - Terminais Portuários do Sado, S.A. ("Tersado") Portugal 25.00
Turalgo-Sociedade de Promoção Imobiliária e Turística do Algarve, S.A. (“Turalgo”) Portugal 51.00 Vortal – Comércio Electrónico, Consultadoria e Multimédia, S.A. (“Vortal”) Portugal 29.88
Martifer Group Portugal 37.50 WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d 2009 CONSOLIDATED REPORT & ACCOUNTS
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2009 Report on Corporate Governance Practices
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0. Statement of Compliance
0.1 This report has been drawn up in accordance with the draft set out in the appendix to CMVM Regulation 1/2007 and its reference is the 2007 “Code of Corporate Governance” published by the CMVM at its site www.cmvm.pt.
0.2 Detailed indication of the recommendations included in the CMVM Code of Corporate Governance adopted and not adopted by MOTA-ENGIL, SGPS, SA:
Degree of Description in Recommendation/ Chapter Compliance this report
I. GENERAL MEETING
I.1 BOARD OF THE GENERAL MEETING I.1.1 The board of the general meeting shall be provided with the human and logistic support resources appropriate to its needs, taking the company's Complied I.1 economic situation into account. I.1.2 The remuneration of the chairman of the board of the general meeting Complied I.3 shall be disclosed in the company's annual management report
I.2 PARTICIPATION IN THE MEETING I.2.1 The period during which shares are deposited or blocked in order to take part in a general meeting as imposed by the articles of association shall be Complied I.4 no more than 5 days. I.2.2 In the event of suspension of the general meeting the company shall not impose blockage during the whole period until the meeting is resumed, the Complied I.5 ordinary period required ahead of the first session being sufficient.
I.3 VOTE AND EXERCISE OF VOTING RIGHTS I.3.1 Companies should not impose any statutory restriction on postal Complied I.8 balloting. I.3.2 The statutory period in advance of the meeting for the reception of Complied I.10 postal ballots shall be no more than 3 working days. I.3.3 In their articles of association companies shall stipulate that each share Complied I.6 shall correspond to one vote.
I.4 QUORUM AND DELIBERATIONS I.4.1 Companies shall not fix a quorum for meetings or for deliberations Not complied 0.3 & I.7 greater than provided for by law.
I.5 MINUTES OF MEETINGS AND INFORMATION OF RESOLUTIONS ADOPTED I.5.1 Minutes of General Meetings shall be provided to equityholders via the company's Internet site within 5 days, even if they do not constitute privileged information under the terms of the law, and an historic record of attendance Complied I.1 lists, of the agendas and of the resolutions adopted relating to meetings held shall be kept on the site in respect of at least the three preceding years.
I.6 MEASURES RELATING TO COMPANY CONTROL I.6.1 Measures adopted with a view to preventing the success of take-over bids shall have regard for the interests of the company and of its Complied I.13 equityholders.
I.6.2 The articles of association of companies that, having due regard for the principle set out in the preceding indent, stipulate a limitation of the number of Not applicable - votes that may be held or exercised by a single equityholder, severally or in
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concert with other equityholders, shall also stipulate that, at least every five years, the continuation or otherwise of such a statutory provision shall be submitted to deliberation by the General Meeting – with no requirement for a quorum greater than that stipulated by law – and that in such a deliberation all votes cast shall be counted without subjection to such limitation. I.6.3 Defensive measures shall not be adopted the effect of which is to provoke automatically a serious erosion of the company's assets in the event of transition of control or alterations to the composition of the management Complied I.13 body, therefore hindering the free transmissibility of shares and the free appraisal by equityholders of the performance of the members of the management body
II. MANAGEMENT AND SUPERVISION BODIES
II.1.1 GENERAL MATTERS – STRUCTURE AND COMPETENCE II.1.1.1 In its governance report the management body shall assess the model adopted, identifying any constraints to its working and proposing Complied II.3. measures that, in its judgement, will be appropriate in overcoming them. II.1.1.2 Companies shall create internal control systems for the effective detection of risks linked with the company's business, to safeguard its assets Complied II.4. and for the benefit of the transparency of its corporate governance.
II.1.1.3 Management and supervisory bodies shall have working regulations Not complied 0.3 & II.6 that shall be divulged via the company's Internet site.
II.1.2 GENERAL MATTERS – INCOMPATIBILITIES AND INDEPENDENCE II.1.2.1 The board of directors shall include a number of non.-executive members to ensure effective powers of supervision, inspection and appraisal Complied II.9. of the activity of the executive members. II.1.2.2 The non-executive directors shall include an adequate number of independent directors, taking into account the size of the company and its Not complied 0.3 & II.9 equityholder structure, though not less than one quarter of the total number of directors.
II.1.3 GENERAL MATTERS – ELIGIBILITY AND APPOINTMENT II.1.3.1 Depending on the applicable mode, the chairman of the board of auditors, of the audit committee or of the financial affairs committee shall be Complied II.12. independent and shall have the competences required for the exercise of the respective duties.
II.1.4 GENERAL MATTERS – IRREGULARITY COMMUNICATION POLICY II.1.4.1 The company shall adopt a policy of communication of irregularities allegedly occurring within the company, with the following elements: i) indication of the means whereby communication of irregular practices may be undertaken internally, including the persons entitled to receive such Complied II.22. communications; ii) indication of the treatment to be given to the communications, including confidential treatment if so required by the declarer. II.1.4.2 The general guidelines of this policy shall be divulged in the report on Complied II.22. corporate governance.
II.1.5 GENERAL MATTERS – REMUNERATION II.1.5.1 The remuneration of the members of the management body shall be so structured as to allow the alignment of their interests with those of the Not complied 0.3 & II.18 company. In this connection; i) the remuneration of directors performing executive duties shall include a performance-based component, therefore
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Degree of Description in Recommendation/ Chapter Compliance this report
taking into consideration a performance assessment performed periodically by the proper body or committee; ii) the variable component shall be consistent with maximisation of the long-term performance of the company and shall be dependent on the sustainability of the performance variables adopted; and iii) where this does not stem directly from legal impositions, the remuneration of the non-executive members of the management body shall consist solely of a fixed sum. II.1.5.2 The remuneration committee and the management body shall submit to the appraisal of the annual general meeting a declaration on the remuneration policy of the management and supervisory bodies and of other managers, in the sense of Article 248-B.3 of the Securities Code. In this Not complied 0.3 & II.18 connection, an explanation shall be provided to equityholders of the criteria and main parameters proposed for the assessment of performance in determining the variable component, whether this consists of bonuses in shares, stock options, annual bonuses or other components. II.1.5.3 At least one member of the remuneration committee shall be present Complied I.12 at annual general meetings. II.1.5.4 A proposal shall be submitted to the general meeting in respect of the approval of plans to attribute shares and/or share acquisition options or those based on the variation of the price of the shares to members of the management and supervisory bodies or other managers in the acception of Article 248-B.3 of the Securities Code. The proposal shall contain all elements required for a correct evaluation of the plan. The proposal shall be Not applicable - accompanied by the plan's regulations or, if not yet drawn up, by the general conditions to apply. Likewise, the general meeting shall approve the main characteristics of the retirement benefits programme for the members of the management and supervisory bodies or other managers in the acception of Article 248-B.3 of the Securities Code. II.1.5.5 The remuneration of the members of the management and supervisory bodies shall be divulged annually on an individual basis, making a distinction, where applicable, between the various components received in Complied II.20. terms of fixed and variable remuneration, as well as the remuneration received from other group companies or from companies controlled by equityholders having qualified holdings.
II.2 BOARD OF DIRECTORS II.2.1 Within the limits of the law established for each management and supervisory body, and except as a result of the small size of the company, the board of directors shall delegate the day-to-day management of the Complied II.3. company, the competences to be delegated to be detailed in the annual report on Corporate Governance. Society II.2.2 The board of directors shall ensure that the company acts in a manner consentaneous with its objectives, and shall not delegate its competence with regard in particular to: i) defining the company's strategy and general policies; Complied II.3. ii) defining the corporate structure of the group; iii) decisions that must be considered strategic owing to the sum involved, the risk or their special characteristics. II.2.3 Should the chairman of the board of directors perform executive duties, the board of directors shall find efficient mechanisms to co-ordinate the work of the non-executive members, ensuring in particular that the latter may Not applicable - decide independently and in an informed manner, and these mechanisms shall be explained to the equityholders within the scope of the report on the governance of the company. II.2.4 The annual management report shall include a description of the activity of the non-executive directors, stating in particular any constraints with which Complied II.3. they may have been faced. II.2.5 The management body shall promote the rotation of the member Not complied 0.3 & II.3
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Degree of Description in Recommendation/ Chapter Compliance this report
charged with financial matters at least at the end of each two terms of office.
II.3 MANAGING DIRECTOR, EXECUTIVE COMMITTEE AND EXECUTIVE BOARD OF DIRECTORS II.3.1 When so requested by other corporate officers, directors performing executive duties shall provide, adequately and in a timely manner, such Complied II.3. information as may be requested of them. II.3.2 The chairman of the executive committee shall send to the chairman of the board of directors and, as applicable, to the chairman of the audit Complied II.3. committee or of the board of auditors, respectively, notice of meetings and the respective minutes. II.3.3 The chairman of the executive board of directors shall send to the chairman of the general and supervisory board and to the chairman of the Not applicable - financial affairs committee, notice of meetings and the respective minutes.
II.4 GENERAL AND SUPERVISORY BOARD, FINANCIAL MATTERS COMMITTEE, AUDIT COMMITTEE AND BOARD OF AUDITORS II.4.1 Besides complying with the supervisory duties entrusted to it, the general and supervisory board shall counselling, monitoring and ongoing assessment of the management of the company by the executive board of directors. The matters on which the general and supervisory board must Not applicable - express its opinion include: i) definition of the company's strategy and general policies; ii) the corporate structure of the group; and iii) decisions considered strategic owing to the sum involved, the risks or their special characteristics. II.4.2 The annual reports on the activity of the general and supervisory board, the financial matters committee, the board of auditors and the audit Complied II.14. committee shall be divulged via the company's Internet site in conjunction with the financial statements. II.4.3 The annual reports on the activity of the general and supervisory board, the financial matters committee, the board of auditors and the audit Complied II.14. committee shall include a description of the supervisory activity carried on, stating in particular any constraints encountered. II.4.4 The financial matters committee, the board of auditors and the audit committee, as applicable, shall represent the company, for all purposes, before the external auditor and they are charged in particular with proposing the provider of these services and the respective remuneration, with ensuring Complied II.14. that, within the company, there are adequate conditions for the provision of the services, and with being the company's interlocutor and first addressee of the respective reports. II.4.5 The financial matters committee, the board of auditors and the audit committee, as applicable shall each year assess the external auditor and Complied II.14. propose the dismissal thereof to the general meeting in the event of due cause.
II.5 SPECIALISED COMMITTEES II.5.1 Save for reasons to do with the small size of the company, the board of directors and the general and supervisory board, depending on the model adopted, shall create such committees as may be seen to be necessary to: i) ensure competent, independent assessment of the performance of the Not complied 0.3, I.12 & II.3 executive directors and to assess its own overall performance as well as that of the various existing committees; and ii) reflect on the governance system adopted, verifying its efficacy and proposing to the proper bodies those measures to be implemented with a view to their improvement II.5.2 The members of the remuneration committee or similar body shall be Not complied 0.3 & II.3 independent with regard to the members of the management body. II.5.3 All committees shall write up minutes of meetings held. Complied II.3.
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III. INFORMATION AND AUDITS
III.1 GENERAL DUTIES OF INFORMATION III.1.2 Companies shall ensure the existence of permanent contact with the market, having regard for the principle of equityholder equality and preventing Complied III.12 asymmetries in investor access to information To this end the company shall have an investor support office. III.1.3 The following information available on the company's Internet site shall be divulged in English: a) the name, the standing as a public limited company, the registered office and the other elements listed in Article 171 of the Companies Code; b) the memorandum and articles of association; c) the identity of the corporate officers and of the market relations representative; d) Complied - the Investor Support Office, its duties and means of access; e) the financial statements; f) half-yearly calendar of corporate events; g) proposals submitted for discussion and voting at general meetings; and h) notices of general meetings.
0.3 Explanation of discrepancies between the company's governance practices and the CMVM recommendations:
I.4.1 Companies shall not fix a quorum for meetings or for deliberations greater than provided for by law
The MOTA-ENGIL articles of association stipulate that for the general meeting to meet and deliberate on first call equityholders must be present or represented who hold at least half of the issued capital. Since Article 383 of the Companies Code is less restrictive, this recommendation is not complied with. The understanding of MOTA-ENGIL is that this model is the one that best defends corporate interests.
II.1.1.3 Management and supervisory bodies shall have working regulations that shall be divulged via the company's Internet site.
The MOTA-ENGIL, SGPS, SA, management and supervisory bodies have in-house working regulations, though they are not published on the company's Internet site and are not available for consultation. The understanding of MOTA-ENGIL is that the regulations go beyond aspects of the mere working of the bodies and contain confidential information, for which reason they are not available to the public.
II.1.2.2 Non-executive directors shall include an adequate number of independent directors, taking the company's size and its equityholder structure into account, in no case less than one quarter of the total number of directors.
Of the six non-executive members of the MOTA-ENGIL, SGPS, SA, Board do Directors only three are qualified as independent directors, and these account for 21% of the total number of members of the management body. Although this recommendation is not complied with, MOTA- ENGIL, taking into account the size of the company and its equityholder structure, considers that the number of independent directors is adequate.
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II.1.5.1 The remuneration of the members of the management body shall be so structured as to allow the alignment of their interests with those of the company. In this connection; i) the remuneration of directors performing executive duties shall include a performance- based component, therefore taking into consideration a performance assessment performed periodically by the proper body or committee; ii) the variable component shall be consistent with maximisation of the long-term performance of the company and shall be dependent on the sustainability of the performance variables adopted; and iii) where this does not stem directly from legal impositions, the remuneration of the non-executive members of the management body shall consist solely of a fixed sum.
The recommendation is not complied with insofar as its indents ii) and iii) are concerned. Indeed, the variable component is allocated yearly, and there is no mechanism to defer it that would allow a long-term alignment. The remuneration of the non-executive members of the management body (excluding the independent members) comprises a fixed and a variable component, the latter in proportion to performance. Notwithstanding this non-compliance, MOTA- ENGIL considers that the objective of alignment of the interests of the members of the management body with those of the company have not been called into question.
II.1.5.2 The remuneration committee and the management body shall submit to the appraisal of the annual general meeting a declaration on the remuneration policy of the management and supervisory bodies and of other managers, in the sense of Article 248- B.3 of the Securities Code. In this connection, an explanation shall be provided to equityholders of the criteria and main parameters proposed for the assessment of performance in determining the variable component, whether this consists of bonuses in shares, stock options, annual bonuses or other components.
The General Meeting is charged with appointing a Remuneration Committee, which will define a remuneration policy for corporate officers, promoting, from a medium- and long-term viewpoint, the alignment of their interests with those of the company. The declaration on the policy of remuneration of the management and supervisory bodies will be submitted to the General Meeting as required under Act 28/2009, of June 19.
II.2.5 The management body shall promote the rotation of the member charged with financial matters at least at the end of each two terms of office.
The understanding of MOTA-ENGIL is that responsibility for financial matters should be exercised by the most appropriate person and in the manner best suited to the company's interests. The present Chief Financial Officer (CFO), responsible for financial matters during more than two consecutive terms of office, is the person who best meets these requirements. Therefore, MOTA- ENGIL understands that this recommendation, made independently of any other circumstance, would not serve its interests properly. It should be noted that there are several mechanisms to control the company's business, primarily the Audit Committee, which provides effective supervision in this and other areas of the company's activities.
II.5.1 Save for reasons to do with the small size of the company, the board of directors and the general and supervisory board, depending on the model adopted, shall create such committees as may be seen to be necessary to: i) ensure competent, independent assessment of the performance of the executive directors and to assess its own overall performance as well as that of the various existing committees; and ii) reflect on the governance system adopted, verifying its efficacy and proposing to the proper bodies those measures to be implemented with a view to their improvement
The recommended committees were not set up in that they were not seen to be necessary.
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II.5.2 The members of the remuneration committee or similar body shall be independent with regard to the members of the management body.
António Manuel Queirós Vasconcelos da Mota (chairman and non-executive member of the Board of Directors) and Maria Teresa Queirós Vasconcelos Mota Neves da Costa (non- executive member of the board of directors ) are members of the Remuneration Committee, having been elected to the position by the General meeting at the proposal of the majority equityholder Mota Gestão e Participações, SGPS, SA. Their participation in the Remuneration Committee corresponds solely to representation of the equityholder's interest, and they intervene in this capacity and not in that of members of the management body. To ensure their independence in the performance of these duties, these members do not take party in any discussion of adoption of resolutions in which there is or could be a conflict of interests, particularly with regard to fixing their own remuneration as members of the management body.
0.4 Independence of corporate officers:
During 2009 there was no circumstance determining the loss of independence of the three members of the Board of Directors considered independent and of all the members of the Audit Committee.
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I. General Meeting
I.1. Identification of the members of the board of the general meeting
Chairman: Luís Neiva Santos Secretary: Rodrigo Neiva Santos
The human and logistic resources appropriate to the needs of the chairman of the board of the General Meeting are provided, particularly through the support given by the services of the MOTA-ENGIL, SGPS, SA, Legal Office. This support is deemed adequate to the company's size and economic situation.
Minutes of General Meetings are available on the company's Internet site, as are the attendance lists, the agendas and the resolutions adopted in respect of the meetings held during the past three years.
I.2. Indication of the beginning and end of the respective terms of office
The start and end dates of the members of the board of the General Meeting are 2006 and 2009 respectively.
I.3. Indication of the remuneration of the chairman of the board of the general meeting
During 2009 the chairman of the Board of the General Meeting earned €4,000, a sum attributed in the light of the General Meetings he chairs. In 2009 he chaired one General Meeting.
I.4. Indication of the period during which shares are deposited or blocked in order to take part in a general meeting
The company's articles of association require that equityholders submit to the company a document evidencing ownership of the shares no later than four days prior to the meeting.
I.5. Indication of the rules applicable to the blockage of shares in the event of suspension of the general meeting
The understanding of the chairman of the board of the General Meeting, in the event of suspension of the meeting, is that the company should not impose blockage of the shares during the entire period until the meeting is resumed, the normal period required on first call sufficing.
I.6. Number of shares corresponding to one vote
In accordance with the MOTA-ENGIL articles of association, each share corresponds to one vote, thus ensuring the necessary proportionality between holding equity capital and voting right.
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I.7. Existence of statutory rules on the exercise of voting rights, including those on the quorum required to hold meetings or adopt resolutions or systems or systems to detach property rights
In accordance with Article 23 of the company's articles of association, for the General Meeting to be held and to adopt resolutions on first call equityholders must be present or represented holding shares corresponding to more than fifty per cent of the issued capital.
I.8. Existence of statutory rules on the exercise of voting rights by correspondence
The statutory rules on the exercise of voting rights by correspondence are stipulated in Article 22 of the company's articles of association. In accordance with this article, equityholders may vote by correspondence in respect of each and every matter, there being not restriction in this connection.
I.9. Provision of a form for the exercise of voting rights by correspondence
The company provides a form for the exercise of voting rights by correspondence This form may be obtained from the Capital Market Relations Division (João Vermelho – e-mail: [email protected]).
I.10. Requirement as to the period between reception of the postal ballot and the date on which the general meeting is held
Postal ballots shall be considered only if received at the company's registered office at least three days before the date of the General Meeting.
I.11. Exercise of voting rights using electronic means
The exercise of voting rights by electronic means is not yet possible. To date the company has received no request for or expression of interest in the provision of these means from equityholders or investors.
I.12. Information on the intervention of the general meeting in respect of the company's remuneration policy and of the assessment of the performance of the members of the management body
The General Meeting is charged with appointing a Remuneration Committee, which will define a remuneration policy for corporate officers, promoting, from a medium- and long-term viewpoint, the alignment of their interests with those of the company. The declaration on the policy of remuneration of the management and supervisory bodies will be submitted to the General Meeting as required under Act 28/2009, of June 19.
I.13. Indication of defensive measures designed to cause serious erosion of the company's assets in the event of transition of control or change of the composition of the management body
There are no defensive measures designed to cause serious erosion of the company's assets in the event of transition of control or change of the composition of the management body.
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I.14. Significant agreements to which the company is a party that come into force, are altered or cease in the event of change of control of the company, as well as the respective effects, unless, by their nature, the disclosure thereof would be seriously prejudicial to the company, provided always that the company is not bound to divulge such information by virtue of other legal imperatives
There are no significant agreements to which the company is a party that come into force, are altered or cease in the event of change of control of the company.
I.15. Agreements between the company and members of the management body and managers, in the sense of Article 248-B.3 of the Companies Code, stipulating indemnities in the event of dismissal without due cause or termination of the employment tie in the wake of a change of control of the company
There are no agreements between the company and members of the management body and managers, in the sense of Article 248-B.3 of the Companies Code, stipulating indemnities in the event of dismissal without due cause or termination of the employment tie in the wake of a change of control of the company.
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II. Management and Supervisory Bodies
II.1. Identification and composition of the corporate offices
Board of Directors (2006-09 term of office) António Manuel Queirós Vasconcelos da Mota (Chairman) Jorge Paulo Sacadura Almeida Coelho (Deputy-chairman) Arnaldo José Nunes da Costa Figueiredo (Deputy-chairman) Maria Manuela Queirós Vasconcelos Mota dos Santos (Member) Maria Teresa Queirós Vasconcelos Mota Neves da Costa (Member) Maria Paula Queirós Vasconcelos Mota de Meireles (Member) Eduardo Jorge de Almeida Rocha (Member) Ismael Antunes Hernandez Gaspar (Member) Gonçalo Nuno Gomes de Andrade Moura Martins (Member) Luís Manuel Ferreira Parreirão Gonçalves (Member) José Luís Catela Rangel de Lima (Member) Professor Luís Valente de Oliveira (Independent Member) António Bernardo Aranha da Gama Lobo Xavier (Independent Member) António Manuel da Silva Vila Cova (Independent Member)
Executive Committee (2008-09) Jorge Paulo Sacadura de Almeida Coelho (Chairman) Arnaldo José Nunes da Costa Figueiredo Maria Paula Queirós Vasconcelos Mota de Meireles Eduardo Jorge de Almeida Rocha Ismael Antunes Hernandez Gaspar Gonçalo Nuno Gomes de Andrade Moura Martins
Statutory Audit Board (2007-10) Prof Alberto João Coraceiro de Castro (Chairman) José Rodrigues de Jesus (Full Member) Manuel Teixeira Mendes (Full Member) Pedro Manuel Seara Cardoso Perez (Alternate Member)
Official Auditor (2007-10) António Magalhães e Carlos Santos, SROC, represented by Carlos Alberto Freitas dos Santos, ROC
External Auditor registered with the CMVM Deloitte & Associados, SROC, SA, represented by Jorge Manuel Araújo de Beja Neves
II.2. Identification and composition of other committees set up, having responsibilities in the matter of the management or supervision of the company
In addition to those referred to in the next point, no other committees have been set up having responsibilities in the matter of the management or supervision of the company.
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II.3. Organisational charts or tables of duties in respect of the division of responsibilities among the various corporate offices, committees and/or departments of the company, including information on the scope of delegations of responsibilities or distribution of posts among the members of the management or supervisory bodies, and list or matters that cannot be delegated
MotaMota-Engil -Engil
Board of the Remuneration StatutoryROC Audit Assembleia Geral Shareholders' Committee Board General Meeting
StatutoryConselho Auditor Fiscal Company Secretary
Investment, Audit and BoardConselho of Directors de Development of Human Risk Committee Administração Resources Committee
Office of Audit Executive Committee Legal Office and Risk
Division of Division of Social and Office for Coordination of Division of Corporate Division of International Communication and Coporate Responsability the Executive CEO Human Resources Coordination Image and Sustainability Committee
Division of Control Division of Corporate Division of Relations with Shared Services CFO Management Group Finance the Capital Market
Corporate Offices
MOTA-ENGIL, SGPS, SA, has a Board of Directors comprising 14 members, one chairman, two deputy-chairmen and eleven directors. Six of its members perform executive duties and form an Executive Committee, which was elected and whose powers were delegated on it by the Board of Directors, the other eight directors performing non-executive duties.
The Board of Directors delegated on the Executive Committee all powers related with the management of the businesses of MOTA-ENGIL, SGPS, SA, and of all the subsidiaries, in the most restricted sense of taking tactical options and control of the various lines of development of the various businesses, assuming responsibility for the executive management of the GROUP's business in line with the orientations and policies defined by the Board of Directors. The Executive Committee may discuss all matters that are the responsibility of the Board of Directors, without prejudice to only being able to adopt resolutions on those matters delegated on it. All matters dealt with by the Executive Committee, even those included within the sphere of the powers delegated on it, are reported to the non-executive directors, who have access to the respective minutes of the meetings and supporting documents.
The Executive Committee meetings are held fortnightly and, at the start of each fiscal year, the meetings to be held during that year are scheduled. The chairman of the Executive Committee sends to the chairmen of the Board of Directors and of the Statutory Audit Board notices of meetings and the respective minutes in good time.
All decisions in respect of the definition of the company's strategy as well as the company's general policies and the corporate structure of the Group are the sole responsibility of the Board of Directors, and no responsibilities are delegated on the Executive Committee in this connection.
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The chairman of the Board of Directors has the responsibilities entrusted to him by law and by the articles of association.
With regard to the assignment of posts to the members of the Board of Directors, particularly within the scope of the Executive Committee, the following are underscored:
- Jorge Paulo Sacadura de Almeida Coelho (Chairman)
- Human Resources Corporate Division; - Communication and Image Division; - International Co-ordination Office; - Social Responsibility, Corporate and Sustainability Division; - Executive Committee Co-ordination Office;
- Eduardo Jorge de Almeida Rocha
- Group Management Control Division; - Corporate Finances Division; - Capital Market Relations Division; - Shared Services;
Arnaldo José Nunes da Costa Figueiredo
- High Speed Project; - New Geographic Markets;
- Maria Paula Queirós Vasconcelos Mota de Meireles
- Development and Co-ordination of Property Developments in the Domestic and Foreign markets.
- Ismael Antunes Hernandez Gaspar
- Engineering & Construction Business;
- Gonçalo Nuno Gomes de A. Moura Martins
- Environment & Services and Transport Concessions Businesses.
Jorge Paulo Sacadura Almeida Coelho, in the capacity of chairman of the Executive Committee, is considered the Chief Executive Officer (CEO) of MOTA-ENGIL, SGPS, SA. Eduardo Jorge de Almeida Rocha, as the person responsible for the financial areas of MOTA-ENGIL, SGPS, SA, is considered the Chief Financial Officer (CFO).
There is no rotation policy for the responsibilities of the members of the Board of Directors, in particular for the director responsible for financial matters. The understanding of MOTA-ENGIL is that responsibility for financial matters should be exercised by the most appropriate person and in the manner best suited to the company's interests. The present Chief Financial Officer (CFO), responsible for financial matters during more than two consecutive terms of office, is the person who best meets these requirements. Therefore, MOTA-ENGIL understands that the rotation recommendation, made independently of any other circumstance, would not serve its interests properly. It should be noted that there are several mechanisms to control the company's business, primarily the Statutory Audit Board, which provides effective supervision in this and other areas of the company's activities.
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The non-executive directors monitor the business carried on by the Company, and their real powers of supervision, inspection and assessment of the business is ensured through the monthly meetings of the Board of Directors, without prejudice to access to such information or documentation as may be requested from time to time. In exercising their non-executive duties the directors were not faced with any constraints in 2009.
Supervisory Bodies
Supervision of the company is performed by a Statutory Audit Board and by a Statutory Auditor (auditing firm), performing the duties called for by law and by the articles of association.
The General Meeting shall elect the Statutory Audit Board and designate, at the proposal of the Statutory Audit Board, the Statutory Auditor.
The MOTA-ENGIL, SGPS, SA Statutory Audit Board comprises 4 members, a chairman, two full members and an alternate member.
Specialised Committees
Remuneration Committee In accordance with the articles of association the duties of the Remuneration Committee, elected by the equityholders at a General Meeting, are to define the corporate officers' remuneration policy, fixing the applicable remuneration taking into account the duties performed, their performance and the company's economic situation. In this connection, the Remuneration Committee monitors and assesses the performance of the directors, on a constant basis, verifying the extent to which the proposed objectives have been met. The Committee meets as and when necessary. The directors' remuneration includes a performance- based component.
The committee elected for the 2006-09 term of office comprises the following members: António Manuel Queirós Vasconcelos da Mota, Maria Teresa Queirós Vasconcelos Mota Neves da Costa, both members of the management body, and Manuel Teixeira Mendes, member of the Statutory Audit Board. Minutes are written up of all meetings held.
Investment, Audit and Risk Committee The Investment, Audit and Risk Committee normally comprises three permanent members (one non-executive director, who chairs the committee, an independent non-executive director and the CFO), and it may invite other senior Group staff connected with the projects under evaluation. The main duties and responsibilities of this committee are to appraise and suggest investment and business-risk policies and projects to the Board of Directors, to examine and issue opinions on investment or divestment plans, to issue opinions on moves into and out of business areas, and to monitor major financial and corporate transactions. Minutes are written up of all meetings held. At present the members of this committee are Maria Teresa Queirós Vasconcelos Mota Neves da Costa (non-executive director), Eduardo Jorge de Almeida Rocha (CFO) and António Manuel da Silva Vila Cova (independent, non-executive director).
Human Resources Development Committee The main duties of the Human Resources Development Committee are: monitoring productivity levels, remuneration and equality of opportunities; assessment of programmes to attract and develop high-quality management staff; definition of guidelines for the evaluation and incentives system, career plans, training plan and recruiting and selection plan; regular appraisal of employee motivation; and definition of the culture and key values, co-ordinating efforts to implement them within the GROUP. Minutes are written up of all meetings held. At present the members of this committee are Maria Manuela Queirós Vasconcelos Mota dos Santos (Chair),
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Jorge Paulo Sacadura de Almeida Coelho, Arnaldo José Nunes da Costa Figueiredo, Ismael Antunes Hernandez Gaspar, Gonçalo Nuno Gomes de Andrade Moura Martins, Carlos Manuel Marques Martins and Isabel Peres.
Assessment by the management body of the governance model adopted
The Board of Directors declares that the Corporate Governance model adopted has been appropriate to the proper internal and external working of the company. In the assessment of the governance model performed in 2009, no relevant constraints were found in the model use, which is based on the "Latin" / Reinforced Classic governance model. It comprises a Board of Directors, a Statutory Audit Board and a Statutory Auditor not a member of the Statutory Audit Board.
II.4. Description of the internal control and risk management systems implemented by the company, particularly with regard to the process of disclosure of financial information.
The MOTA-ENGIL GROUP is subject to a number of diverse risks that could have a negative impact on its business. All these risks are duly identified, assessed and monitored. The various structures within the company are charged with their management and/or mitigation, with special emphasis in this field on the Investment, Audit and Risk Committee.
During 2009, and moving into a new cycle of activity with a mission to support the management of the MOTA-ENGIL GROUP by means of strengthening the operating means and methods employed in internal control and in anticipating business risks, the Audit and Risk Committee created the Audit and Risk Office. It is provided with a structure of resources specifically allocated to the following duties:
• risk identification and appraisal, suggesting the establishment of acceptable risk levels in the light of the established management goals;
• issue of opinions as to alterations of the degree of risk inherent in the business of the MOTA-ENGIL GROUP;
• minimisation of operational deficiencies and losses, strengthening the capabilities of the MOTA-ENGIL GROUP in the identification of potentially damaging effects, in risk appraisal and in putting forward responses, thus reducing unforeseen costs or losses;
• identification of transverse risks within the GROUP, auditing implementation of the corporate policies and good practices of the MOTA-ENGIL GROUP;
• issue of prior opinions on risks inherent in the acquisitions and/or disposals defined by the MOTA-ENGIL GROUP;
• conformity audits in the development of processes and activities in every materially relevant area and/or company of the MOTA-ENGIL GROUP.
In general terms and besides what has been stated, the internal control and risk management system implemented by the company can be summarised as follows:
• Scope of the process: The main risks to which the GROUP is subject, particularly the market risks of its business segments, financial risks (exchange-rate and interest- rate) and other business risks (operating risks, empowerment and integrity risks, and information and communications risks), through the internal reports of the
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Investment, Audit and Risk Committee in conjunction with the reports or communications issued by the heads of the various corporate departments (with a focus on the Legal Department, Management Control, Corporate Finance and Human Resources Development).
Characterisation of the Operational Process: Risk Management is the responsibility of each of the Boards of the Group's business areas, generally speaking involving the following sequential cyclic set of stages:
- risk identification: determination of the risks to which the organisation is exposed and of the level of tolerance of exposure to such risks;
- risk measurement: quantification of risk exposures, and preparation of basic reports to support decision-taking;
- risk control and management: definition of the measures to be taken in facing risks;
- implementation of the established risk-management measures;
- monitoring: evaluation of the risk-management process and, if necessary, realignment and redefinition of strategies.
Additionally, all investments or new businesses are analysed for risks by the various corporate areas. They are subject to the prior opinion of the Investment, Audit and Risk Committee before being submitted to the Board of Directors for approval.
Risk-control in the process of divulging financial information
Only a very restricted number of MOTA-ENGIL, SGPS, SA, employees is involved in the process of disclosing financial information. In this connection, and by legal imposition (Article 248.6 of the Securities Code), MOTA-ENGIL, SGPS, SA, has drawn up a list of its employees with or without employment ties, who have regular or occasional access to privileged information. This list has been made known to each of the employees included, and they were given an explanation of: (i) the reasons for their inclusion in the list; (ii) the duties and obligations imposed on them by law; and (iii) the consequences arising from abusive disclosure or use of privileged information.
II.5. Powers of the management body, especially with regard to deliberations on the increase of issued capital
The powers of the management body are those granted under the Companies Code and under Articles 13 and 14 of the articles of association. The articles of association do not grant the management body powers in respect of resolutions to increase the issued capital.
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II.6. Indication as to the existence of working regulations for the company's bodies, or other rules relating to incompatibility defined internally and to the maximum number of posts that can be accumulated, and the place where they may be consulted.
As stated in Chapter 0 in respect of non-compliance with recommendation II.1.1.3, the company's Management and Supervision bodies have internal working regulations. These are not published on the company's Internet site and are not available for consultation. The understanding of MOTA-ENGIL is that the regulations go beyond aspects of the mere working of the bodies and contain confidential information, for which reason they are not available to the public.
II.7. Rules applicable to the appointment and substitution of the members of the management and supervision bodies
The rules applicable to the appointment and substitution of the members of the management and supervision are those provided for in the Companies Code and in the company's articles of association:
- Statutory Audit Board – The General Meeting is charged with electing the Audit Committee and its alternate member or members (Article 16.2 of the articles of association)
- Statutory Auditor - At the proposal of the Statutory Audit Board, the General Meeting is charged with designating the Statutory Auditor (Article 16.3 of the articles of association).
II.8. Number of meetings of the management and supervision bodies that are constituted, having responsibility in the matter of management and supervision during the year in question
N. of meetings Body 2009
Board of Directors 14 Executive Committee 24 Statutory Audit Board 6 Remuneration Committee 3 Investment, Audit and Risk Committee 10 Human Resources Development Committee 2.
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II.9. Identification of the members of the board of directors and of other committees set up under it, making a distinction between the executive and the non-executive directors, detailing the members that comply with the incompatibility rules stipulated in Article 414- A.1 of the Companies Code, with the exception of that provided for in indent b), and with the independence criterion established in Article 414.5 of the said Code.
Executive / Independent / Director Non-executive Not independent (1)
António Manuel Queirós Vasconcelos da Mota Non-executive Not independent Jorge Paulo Sacadura Almeida Coelho Executive Not independent Arnaldo José Nunes da Costa Figueiredo Executive Not independent Maria Manuela Queirós V. Mota dos Santos Non-executive Not independent Maria Teresa Queirós V. Mota Neves da Costa Non-executive Not independent Maria Paula Queirós V. Mota de Meireles Executive Not independent Eduardo Jorge de Almeida Rocha Executive Not independent Ismael Antunes Hernandez Gaspar Executive Not independent Gonçalo Nuno Gomes de A. Moura Martins Executive Not independent Luís Manuel Ferreira Parreirão Gonçalves Non-executive Not independent José Luís Catela Rangel de Lima Non-executive Not independent Luís Valente de Oliveira Non-executive Independent António Bernardo A. da Gama Lobo Xavier Non-executive Independent António Manuel da Silva Vila Cova Non-executive Independent (1) Criterion of independence assessed: (i) in accordance with the independence standard stipulated in the preamble of CMVM Regulation 1/2007, which refers back to Articles 414-A and 4.4.5 of the Companies Code; as well as (ii) in accordance with recommendation II.1.2.3 of the CMVM Code of Corporate Governance of 2010.
The three non-executive independent directors referred to above are not covered by any of the incompatibilities referred to in Article 414-A.1 of the Companies Code.
On December 31, 2009, the Board of Directors comprised 14 members, of whom six were executive and eight non-executive, a composition that MOTA-ENGIL considers appropriate to ensuring effective ability to supervise, monitor and appraise the activity of the members of the Executive Committee.
Of the eight non-executive directors only three are qualified as independent directors, accounting for 21% of the total number of members of the management body. Although the recommendation of the Companies Code is not complied with in the matter of the minimum number of independent directors, MOTA-ENGIL, taking into account the size of the company and its equityholder structure, considers that the number of independent directors is adequate.
The independent directors take part in every meeting of the Board of Directors, thus monitoring the business of MOTA-ENGIL, and they may question any other corporate office or internal structure of the MOTA-ENGIL GROUP.
The Investment, Audit and Risk Committee comprises two executive directors and one independent non-executive director.
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II.10. Professional qualifications of the members of the board of directors, indication of their professional activities during at least the past five years, number of shares they hold in the company, date of their first appointment and date of conclusion of their term of office
António Manuel Queirós Vasconcelos da Mota (Chairman)
Professional Qualifications - Degree in Civil Engineering (Communications) University of Porto Faculty of Civil Engineering
Professional career during the past five years - At present and during the past five years, and in addition to being the chairman of the Board of Directors and chairman of the Remuneration Committee of MOTA-ENGIL, SGPS, SA, he is a corporate officer of various GROUP and other companies. .
Nº of shares as at 31/12/2009 4,624,617 shares (corresponding to 2.26% of the issued capital)
1st Appointment March 31, 2000
End of Term of Office December 31, 2009
Jorge Paulo Sacadura Almeida Coelho (Deputy-chairman)
Professional Qualifications - Degree in Company Organisation and Management, ISEG (Universidade Técnica de Lisboa).
Professional career during the past five years - From 2001 to 2006, part-time deputy and president of the Local Government and Spatial Planning Commission of the Assembly of the Republic; - From 2004 to 2008, member of the Council of State; - from 2001 to 2008, Director of Congetmark – Consultoria, Estudos e Management, Lda; - From 2001 to 2008, guest lecturer and member of the scientific board of Instituto Superior de Comunicação Empresarial (ISCEM) and chairman of the consultative board of the Beiras College of Advanced Studies; - At present, besides being deputy-chairman of the Board of Directors and chief executive officer of MOTA-ENGIL, SGPS, SA, he is non-executive director of Martifer, SGPS, SA.
Nº of shares as at 31/12/2009 Held no shares in MOTA-ENGIL, SGPS, SA
1st Appointment May 26, 2008
End of Term of Office December 31, 2009
Arnaldo José Nunes da Costa Figueiredo (Deputy-chairman)
Professional Qualifications - Degree in Civil Engineering, University of Porto Faculty of Engineering
Professional career during the past five years - Chairman of the Board of Directors of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Chairman of the Board of Directors of MEITS - MOTA-ENGIL, IMOBILIÁRIA E TURISMO, SA; - Director of MOTA INTERNACIONAL, LDA; - Chairman of the board of the General Meeting of MAPREL NELAS – INDÚSTRIA DE PRÉ-FABRICADOS EM BETÃO, SA; - Member of the board of the General Meeting of Paviterra, SARL. - Chairman of the Remuneration Committee of (representing Mota-Engil, Engenharia e Construção, SA) of FERROVIAS E CONSTRUÇÕES, SA; - Member of the Remuneration Committee of AURIMOVE – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of NORTEDOMUS – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of PLANINOVA – SOCIEDADE IMOBILIÁRIA, SA; - At present in addition to being the deputy-chairman of the Board of Directors and member of the Executive Committee of Mota-Engil, SGPS, SA, he is a corporate officer of various Group companies.
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Arnaldo José Nunes da Costa Figueiredo (Deputy-chairman) Nº of shares as at 31/12/2009 Held no shares in Mota-Engil, SGPS, SA
1st Appointment March 28, 2008
End of Term of Office December 31, 2009
Maria Manuela Queirós Vasconcelos Mota dos Santos (Director)
Professional Qualifications - Degree in Economics, University of Porto Faculty of Economics
Professional career during the past five years - At present and during the past five years, and in addition to being the member of the Board of Directors of MOTA-ENGIL, SGPS, SA, she is a corporate officer of various GROUP and other companies.
Nº of shares as at 31/12/2009 3,665,066 shares (corresponding to 1.79% of the issued capital)
1st Appointment March 31, 2000
End of Term of Office December 31, 2009
Maria Teresa Queirós Vasconcelos Mota Neves da Costa (Director)
Professional Qualifications - Degree in Economics, University of Porto Faculty of Economics
Professional career during the past five years - At present and during the past five years, and in addition to being the member of the Board of Directors and chairman of the Remuneration Committee of MOTA-ENGIL, SGPS, SA, she is a corporate officer of various GROUP and other companies.
Nº of shares as at 31/12/2009 3,736,836 shares (corresponding to 1.83% of the issued capital)
1st Appointment March 31, 2000
End of Term of Office December 31, 2009
Maria Paula Queirós Vasconcelos Mota de Meireles (Director)
Professional Qualifications - Degree in Civil Engineering, University of Porto Faculty of Engineering (FEUP)
Professional career during the past five years - At present and during the past five years, and in addition to being the member of the Board of Directors of MOTA-ENGIL, SGPS, SA, she is a corporate officer of various GROUP and other companies.
Nº of shares as at 31/12/2009 3,913,051 shares (corresponding to 1.91% of the issued capital)
1st Appointment March 31, 2000
End of Term of Office December 31, 2009
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Eduardo Jorge de Almeida Rocha (Director)
Professional Qualifications - Degree in Economics, University of Porto Faculty of Economics - Post-graduate course in International Financial Management, Porto Faculty of Economics
Professional career during the past five years - Chairman of the Statutory Audit Board of LUSOPONTE – CONCESSIONÁRIA PARA A TRAVESSIA DO TEJO SA; - Member of the board of the General Meeting of Enervia, SGPS, SA;. - Member of the Supervisory Board of KPRD, SA, a company incorporated under Polish law; - Director of MOTA-ENGIL CONCESSÕES E TRANSPORTES, SGPS, SA; - Director of MOTA-ENGIL SERVIÇOS PARTILHADOS SA; - Director of Sol-S Sol Suni – Tecnologias de Informação SA; - Director of MARTIFER, CONSTRUÇÕES METALOMECÂNICAS SA; - Director of MARTIFER, SGPS, SA; - Member of the Board of Directors of APAF – Portuguese Financial Analysts Association. - At present, in addition to being member of the Board of Directors and of the Executive Committee of MOTA- ENGIL, SGPS, SA, he is a corporate officer of various MOTA-ENGIL GROUP COMPANIES.
Nº of shares as at 31/12/2009 30,000 shares
1st Appointment March 31, 2000
End of Term of Office December 31, 2009
Ismael Antunes Hernandez Gaspar (Director)
Professional Qualifications - Degree in Civil Engineering (ISEL)
Professional career during the past five years - Deputy-chairman of the Board of Directors of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA (responsible for Central Europe) - At present, in addition to being member of the Board of Directors and of the Executive Committee of MOTA- ENGIL, SGPS, SA, he is a corporate officer of various MOTA-ENGIL GROUP COMPANIES.
Nº of shares as at 31/12/2009 1,000 shares
1st Appointment March 28, 2008
End of Term of Office December 31, 2009
Gonçalo Nuno Gomes de Andrade Moura Martins (Director)
Professional Qualifications - Degree in Law, University of Lisbon Faculty of Law
Professional career during the past five years - As from March 2006 he has been chairman of the Board of Directors of MOTA-ENGIL, AMBIENTE E SERVIÇOS, SGPS, SA; - As from March 2009 he has been chairman of the Board of Directors of MOTA-ENGIL, AMBIENTE E SERVIÇOS, SGPS, SA; - At present, in addition to being member of the Board of Directors and of the Executive Committee of MOTA- ENGIL, SGPS, SA, he is a corporate officer of various MOTA-ENGIL GROUP companies.
Nº of shares as at 31/12/2009 12,435 shares
1st Appointment March 28, 2008
End of Term of Office December 31, 2009
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Luís Manuel Ferreira Parreirão Gonçalves (Director)
Professional Qualifications - Degree in Law, University of Coimbra Faculty of Law
Professional career during the past five years - From June 2003 to January 5, 2009, he was chairman of the Board of Directors of MOTA-ENGIL - CONCESSÕES DE TRANSPORTES, SGPS, SA, and subsidiaries; - Currently a member of the Board of Directors of MOTA-ENGIL, SGPS, SA, responsible for the co-ordination of the International Development Committee for the African market.
Nº of shares as at 31/12/2009 Held no shares in MOTA-ENGIL, SGPS, SA
1st Appointment March 28, 2008
End of Term of Office December 31, 2009
José Luís Catela Rangel de Lima (Director)
Professional Qualifications - Degree in Civil Engineering (IST)
Professional career during the past five years - Director and chief executive officer of AENOR – Auto-Estradas do Norte, SA; - Director and chief executive officer of Lusoscut – Auto-Estradas da Costa da Prata, SA; - Director and chief executive officers of Lusoscut – Auto-Estradas das Beiras Litoral e Alta, SA; - Director and chief executive officer of Lusoscut – Auto-Estradas do Grande Porto, SA; - Director and chief executive officer of Lusolisboa – Auto – Estradas da Grande Lisboa, SA; - Director and chief executive officer of Aenor Douro – Estradas do Douro Interior, SA.
Nº of shares as at 31/12/2009 1,000
1st Appointment February 2, 2009
End of Term of Office December 31, 2009
Luís Valente de Oliveira (Independent Director)
Professional Qualifications - Degree in Civil Engineering (U.O); - Doctorate in Civil Engineering; - Retired Full Professor of the University of Porto Faculty of Engineering
Professional career during the past five years - Director of the Business Association of Portugal; - European co-ordinator of Auto-Estradas do Mar; - Director of the Luso-American Development Foundation (FLAD); - Member and chairman of the Audit and Risk Committee of Millennium bcp; - Chairman of the Statutory Audit Board of EFACEC; - Since 2006, independent member of the Board of Directors of Mota-Engil, SGPS, SA.
Nº of shares as at 31/12/2009 Held no shares in MOTA-ENGIL, SGPS, SA
1st Appointment March 31, 2006
End of Term of Office December 31, 2009
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António Bernardo Aranha da Gama Lobo Xavier (Independent Director)
Professional Qualifications - Degree in Law, University of Coimbra Faculty of Law - Master of Legal-Economic Sciences, University of Coimbra Faculty of Law.
Professional career during the past five years - From 1999 to date he is consultant for the executive committee of SonaeCom, heading the legal department, the tax department, the public relations department and the regulation department; - From 1985, he has been an independent legal consultant in the Areas of Financial Law and Tax Law. - Since 2006, independent member of the Board of Directors of MOTA-ENGIL, SGPS, SA.
Nº of shares as at 31/12/2009 Held no shares in MOTA-ENGIL, SGPS, SA
1st Appointment March 31, 2006
End of Term of Office December 31, 2009
António Manuel da Silva Vila Cova (Independent Director)
Professional Qualifications - Degree in Economics, University of Porto Faculty of Economics
Professional career during the past five years Up to 2005: - North Co-ordinator Manager of Banco Nacional Ultramarino (BNU); - North General Manager of Caixa Geral de Depósitos (CGD); - Director of Locapor-Soc. de Leasing Mobiliário; - Director of Banco Simeon; - Director of PME.Capital- Soc. de Capital de Risco; - Director of CGD, in charge of Credit Recovery (at national level) and of North Commercial, the latter substituted, after the segmentation, by the responsibility for Retail Banking at national level. In 2006 and 2007 member of the Board of Directors of MOTA-ENGIL, SGPS, SA, as non-executive, independent director. In 2007 and up to June 2008, member of the Board of Directors of Banco Finantia, also as a non-executive, independent director. From June to December 2008, Member of the Board of Directors of Banco Português de Negócios. From June 2008 to August 2009, member of the Board of Directors of Sociedade Lusa de Negócios, occupying the post of chairman of the Board of Directors and director of companies of the said group. At present, non-executive independent director of MOTA-ENGIL, SGPS, SA, and member of the Statutory Audit Board of Banco Finantia.
Nº of shares as at 31/12/2009 Held no shares in MOTA-ENGIL, SGPS, SA
1st Appointment 15 April 2009
End of Term of Office December 31, 2009
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II.11. Duties performed by members of the management body in other companies, detailing those performed at other companies of the same group
António Manuel Queirós Vasconcelos da Mota (Chairman)
Duties in other MOTA-ENGIL GROUP COMPANIES - Chairman of the board of the General Meeting of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Chairman of the Board of the General Meeting of CPTP – COMPANHIA PORTUGUESA DE TRABALHOS PORTUÁRIOS E CONSTRUÇÕES, SA; - Chairman of the board of the General Meeting of MOTA-ENGIL, AMBIENTE E SERVIÇOS, SGPS; - Chairman of the Board of the General Meeting of TRATOFOZ – SOCIEDADE DE TRATAMENTO DE RESÍDUOS, SA; - Member of the Remuneration Committee of ÁREAGOLFE – GESTÃO, CONSTRUÇÃO E MANUTENÇÃO DE CAMPOS DE GOLFE, SA; - Member of the Remuneration Committee of AURIMOVE – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of CPTP – COMPANHIA PORTUGUESA DE TRABALHOS PORTUÁRIOS E CONSTRUÇÃO, SA; - Member of the Remuneration Committee of EMSA – EMPREENDIMENTOS E EXPLORAÇÃO DE ESTACIONAMENTOS, SA; - Member of the Remuneration Committee of FERROVIAS E CONSTRUÇÕES, SA; - Member of the Remuneration Committee of MANVIA – MANUTENÇÃO E EXPLORAÇÃO DE INSTALAÇÕES E CONSTRUÇÕES, SA; - Member of the Remuneration Committee of MARTIFER, SGPS, SA; - Member of the Remuneration Committee of MEITS – MOTA-ENGIL, IMOBILIÁRIO E TURISMO, SA; - Member of the Remuneration Committee of MESP – MOTA-ENGIL, SERVIÇOS PARTILHADOS, ADMINISTRATIVOS E DE GESTÃO, SA; - Member of the Remuneration Committee of MOTA-ENGIL, AMBIENTE E SERVIÇOS, SGPS, SA; - Member of the Remuneration Committee of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Member of the Remuneration Committee of MOTA-ENGIL II, GESTÃO, AMBIENTE, ENERGIA E CONCESSÕES DE SERVIÇOS, SA; - Member of the Remuneration Committee of NORTEDOMUS – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of PLANINOVA – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of SEDENGIL – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of SOL–S INTERNATIONAL, TECNOLOGIAS DE INFORMAÇÃO, SA; - Member of the Remuneration Committee of SUMA – SERVIÇOS URBANOS E MEIO AMBIENTE, SA; - Member of the Remuneration Committee of TAKARGO – TRANSPORTE DE MERCADORIAS, SA; - Member of the Remuneration Committee of TERTIR – CONCESSÕES PORTUÁRIAS, SGPS, SA; - Member of the Remuneration Committee of TERTIR – TERMINAIS DE PORTUGAL, SA; - Member of the Remuneration Committee of TRATOFOZ – SOCIEDADE DE TRATAMENTO DE RESÍDUOS, SA; - Member of the Remuneration Committee of VIBEIRAS – SOCIEDADE COMERCIAL DE PLANTAS, SA; - Chairman of the Senior Board of ASCENDI – CONCESSÕES DE TRANSPORTES, SGPS, SA; - Chairman of the Senior Board of TERTIR – TERMINAIS DE PORTUGAL, SA
Positions held at other companies outside the MOTA-ENGIL GROUP - Chairman of the Board of Directors of FM - SGPS, Imobiliária e Turismo, SA; - Chairman of the Board of Directors of Mota Gestão e Participações, Sociedade Gestora de Participações Sociais, SA; - Chairman of the Board of Directors of Vallis, SGPS, SA; - Director of Sociedade Agrícola Moura Basto, Lda; - Member of the Board of Directors of António de Lago Cerqueira, SA; - Member of the Board of Directors of Auto Sueco (Angola) SARL; - Chairman of the Board of the General Meeting of Sunviauto – Indústria de Componentes de Automóveis, SA; - Member of the Remuneration Committee of António de Lago Cerqueira, SA; - Chairman of the Board of Founders of the Portuguese Highways Centre, representing Mota-Engil, Engenharia e Construção, SA; - Director of ELO – Associação Portuguesa para o Desenvolvimento Económico e a Cooperação, representing Mota-Engil, Engenharia e Construção, SA.
Jorge Paulo Sacadura Almeida Coelho (Deputy-chairman)
Duties in other MOTA-ENGIL GROUP COMPANIES - Non-executive Director of MARTIFER, SGPS, SA;
Positions held at other companies outside the MOTA-ENGIL GROUP - Member of the Consultative Committee of Banco de Investimento Global (BIG); -Chairman of the board of the general Meeting of Sociedade das Águas da Cúria.
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Arnaldo José Nunes da Costa Figueiredo (Deputy-chairman)
Duties in other MOTA-ENGIL GROUP COMPANIES - Director of Asinter – Comércio Internacional, Lda.; - Member of the board of the General Meeting of Enervia, Auto-Sueco, SA;.
Positions held at other companies outside the MOTA-ENGIL GROUP - Member of the Board of Directors of Mota Gestão e Participações, Sociedade Gestora de Participações Sociais, SA.
Maria Manuela Queirós Vasconcelos Mota dos Santos (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES - Director of EDIFÍCIOS GALIZA – SOCIEDADE IMOBILIÁRIA, LDA; - Director of LARGO DO PAÇO – INVESTIMENTOS TURÍSTICOS E HOTELEIROS, LDA.; - Director of MATIPREL – MATERIAIS PRÉ FABRICADOS, LDA. - Member of the Board of Directors of EMPRESA AGRÍCOLA FLORESTAL PORTUGUESA, SA; - Member of the Remuneration Committee of E.A. MOREIRA – AGENTES DE NAVEGAÇÃO, SA; - Member of the Remuneration Committee of INDAQUA – INDÚSTRIA E GESTÃO DE ÁGUAS, SA; - Member of the Remuneration Committee LISCONT – OPERADORES DE CONTENTORES, SA; - Member of the Remuneration Committee of LOKEMARK – SOLUÇÕES DE MARKETING, SA; - Member of the Remuneration Committee of MARTIFER, SGPS, SA; - Member of the Remuneration Committee of MESP – MOTA-ENGIL, SERVIÇOS PARTILHADOS, ADMINISTRATIVOS E DE GESTÃO, SA; - Member of the Remuneration Committee of MOTA-ENGIL II, GESTÃO, AMBIENTE, ENERGIA E CONCESSÕES DE SERVIÇOS, SA; - Member of the Remuneration Committee of NORTEDOMUS – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of TAKARGO – TRANSPORTE DE MERCADORIAS, SA; - Member of the Remuneration Committee of TERTIR – CONCESSÕES PORTUÁRIAS, SGPS, SA; - Member of the Remuneration Committee of TERTIR – TERMINAIS DE PORTUGAL, SA; - Member of the Remuneration Committee of TRATOFOZ – SOCIEDADE DE SOCIEDADE DE TRATAMENTO DE RESÍDUOS, SA; - Member of the Remuneration Committee of TRANSITIBER – LOGÍSTICA E TRANSPORTE INTERNACIONAL, SA.
Positions held at other companies outside the MOTA-ENGIL GROUP - Chairman of the Board of Directors of Algosi – Gestão de Participações Sociais SGPS, SA; - Chairman of the Board of Directors of António de Lago Cerqueira, SA; - Director of Casal Agrícola de Parada, Lda.; - Director of Ladário - Sociedade de Construção, Lda.; - Director of Serra Lisa – Sociedade de Empreendimentos Imobiliários, Lda.; - Director of Sociedade Agrícola Moura Basto, Lda; - Director of Cerâmica de Boialvo, Lda.; - Director of Mineira do Jarmelo, Lda; - Director of Mineira de Pensalvos, Lda; - Member of the Board of Directors of FM - SGPS, Imobiliária e Turismo, SA; - Member of the Board of Directors of Mota Gestão e Participações – Sociedade Gestora de Participações Sociais, SA - Member of the Board of Directors of Agrimota – Sociedade Agrícola e Florestal, SA - Member of the Remuneration Committee of António de Lago Cerqueira, SA;
Maria Teresa Queirós Vasconcelos Mota Neves da Costa (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES - Member of the Remuneration Committee of AURIMOVE – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of ÁREAGOLFE – GESTÃO, CONSTRUÇÃO E MANUTENÇÃO DE CAMPOS DE GOLFE, SA; - Member of the Remuneration Committee of EMSA – EMPREENDIMENTOS E EXPLORAÇÃO DE ESTACIONAMENTOS, SA; - Member of the Remuneration Committee of FERROVIAS E CONSTRUÇÃO, SA; - Member of the Remuneration Committee LISCONT – OPERADORES DE CONTENTORES, SA; - Member of the Remuneration Committee of MANVIA – MANUTENÇÃO E EXPLORAÇÃO DE INSTALAÇÕES E CONSTRUÇÕES, SA; - Member of the Remuneration Committee of MEITS – MOTA-ENGIL, IMOBILIÁRIO E TURISMO, SA; - Member of the Remuneration Committee of MESP – MOTA-ENGIL, SERVIÇOS PARTILHADOS, ADMINISTRATIVOS E DE GESTÃO, SA; - Member of the Remuneration Committee of MOTA-ENGIL, AMBIENTE E SERVIÇOS, SGPS, SA; - Member of the Remuneration Committee of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Member of the Remuneration Committee of MOTA-ENGIL, SGPS, SA;
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Maria Teresa Queirós Vasconcelos Mota Neves da Costa (Director) - Member of the Remuneration Committee of PLANINOVA – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee of SEDENGIL – SOCIEDADE IMOBILIÁRIA, SA; - Member of the Remuneration Committee TRANSITIBER – LOGÍSTICA E TRANSPORTE INTERNACIONAL, SA; - Member of the Remuneration Committee of TRATOFOZ – SOCIEDADE DE TRATAMENTO DE RESÍDUOS, SA; - Member of the Remuneration Committee of VIBEIRAS – SOCIEDADE COMERCIAL DE PLANTAS, SA.
Positions held at other companies outside the MOTA-ENGIL GROUP - Deputy-chairman of the Board of Directors of FM - SGPS, Imobiliária e Turismo, SA; - Deputy-chairman of the Board of Directors of Vallis, SGPS, SA; - Member of the Board of Directors of António de Lago Cerqueira, SA; - Member of the Board of Directors of Mota Gestão e Participações, Sociedade Gestora de Participações Sociais, SA; - Member of the Board of Directors of SDCI – Sociedade de Distribuição e Comércio Internacional, SA; - Member of the Board of Directors of Supermercados Navarras, SA. - Director of Edifícios Galiza – Sociedade Imobiliária, Lda.; - Director of Imobiliária Toca do Lobo, Lda.; - Director of Matiprel – Materiais Pré Fabricados, Lda. - Director of Sociedade Agrícola Moura Basto, Lda; - Director of Casal Agrícola de Parada, Lda; - Director of Mineira de Pensalvos, Lda; - Director of Mineira do Jarmelo, Lda.
Maria Paula Queirós Vasconcelos Mota de Meireles (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES - Chairman of the Board of Directors of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Chairman of the Board of Directors of AURIMOVE – SOCIEDADE IMOBILIÁRIA, SA; - Chairman of the Board of Directors of MEITS - MOTA-ENGIL, IMOBILIÁRIA E TURISMO, SA; - Chairman of the Board of Directors of NORTEDOMUS, SOCIEDADE IMOBILIÁRIA, SA; - Chairman of the Board of Directors of PLANINOVA, SOCIEDADE IMOBILIÁRIA, SA; - Chairman of the Board of Directors of RTA, ENGENHARIA E CONSTRUÇÃO, SA; - Chairman of the Board of Directors of SGA - SA, IMOBILIÁRIA E TURISMO, SA; - Chairman of the Board of Directors of TURALGO – SOCIEDADE DE PROMOÇÃO IMOBILIÁRIA E TURÍSTICA DO ALGARVE, SA; - Director of CALÇADAS DO DOURO – SOCIEDADE IMOBILIÁRIA, LDA; - Director of CORGIMOBIL – EMPRESA IMOBILIÁRIA DAS CORGAS, LDA; - Director of EDIFÍCIOS GALIZA – SOCIEDADE IMOBILIÁRIA, LDA; - Director of MOTA-VISO, SOCIEDADE IMOBILIÁRIA, LDA; - Director of EDIPAINEL – SOCIEDADE IMOBILIÁRIA, LDA.; - Director of LARGO DO PAÇO – INVESTIMENTOS TURÍSTICOS E IMOBILIÁRIOS, LDA; - Director of MATIPREL – MATERIAIS PRÉ FABRICADOS, LDA. - Director of MIL E SESSENTA, SOCIEDADE IMOBILIÁRIA, LDA.; - Director of MOTADOMUS, SOCIEDADE IMOBILIÁRIA, LDA.; - Chairman of the Board of the General Meeting of EMSA – EMPREENDIMENTOS E EXPLORAÇÃO DE ESTACIONAMENTOS, SA; - Member of the Remuneration Committee of MOTA-ENGIL II, GESTÃO, AMBIENTE, ENERGIA E CONCESSÕES DE SERVIÇOS, SA; - Member of the Remuneration Committee of RTA – RIO TÂMEGA, TURISMO E RECREIO, SA; - Member of the Remuneration Committee of SGA – SOCIEDADE DO GOLFE DE AMARANTE, SA.
Positions held at other companies outside the MOTA-ENGIL GROUP - Deputy-chairman of the Board of Directors of Algosi – Gestão de Participações Sociais, SGPS, SA; - Member of the Board of Directors of António de Lago Cerqueira, SA; - Member of the Board of Directors of FM – Sociedade de Controlo, SGPS, SA; - Member of the Board of Directors of Mota Gestão e Participações, Sociedade Gestora de Participações Sociais, SA; - Director of Casal Agrícola de Parada, Lda; - Director of Mineira de Pensalvos, Lda; - Director of Mineira do Jarmelo, Lda; - Director of Predimarão – Sociedade de Construções, Lda; - Director of Sociedade Agrícola Moura Basto, Lda; - Director of Verotâmega – Sociedade Imobiliárias, Lda.; - Member of the Remuneration Committee of António de Lago Cerqueira, SA.
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Eduardo Jorge de Almeida Rocha (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES - Member of the Board of Directors of MARTIFER – SGPS, SA; - Chairman of the General Board of VORTAL – COMÉRCIO ELECTRÓNICO, CONSULTADORIA E MULTIMÉDIA, SA, REPRESENTING MOTA-ENGIL, SGPS, SA; - Chairman of the Board of Directors of INTERCON ACE; - Member of the Audit and Risk Committee of MOTA-ENGIL – SGPS, SA.
Positions held at other companies outside the MOTA-ENGIL GROUP - Member of the Board of Directors of Algosi – Gestão de Participações Sociais, SGPS, SA; - Member of the Board of Directors of Vallis, SGPS, SA; - Member of the Board of Founders of the Serralves Foundation, representing Mota-Engil, SGPS, SA; - Member of the Board of Founders of the Casa da Música Foundation, representing Mota-Engil, SGPS, SA.
Ismael Antunes Hernandez Gaspar (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES - Chairman of the Board of Directors of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Chairman of the Board of Directors of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Chairman of the Board of Directors of EMSA–EMPREENDIMENTOS E EXPLORAÇÃO DE ESTACIONAMENTOS, SA; - Chairman of the board of the General Meeting of SEDENGIL – SOCIEDADE IMOBILIÁRIA, SA.
Positions held at other companies outside the MOTA-ENGIL GROUP - Member of the Audit Committee of FUNDCIC – Fund for the Development of Construction Sciences; - Participation member of the Incorporating Committee of the OFP – Portuguese Railway Organisation; - MOTA–ENGIL, ENGENHARIA E CONSTRUÇÃO, SA, representative at AECOPS - Civil Construction & Public Works Companies Association, involved in the preparation of industry polls on the Sector; - MOTA–ENGIL, ENGENHARIA E CONSTRUÇÃO, SA, representative at CCAP – American Chamber of Commerce in Portugal; - MOTA–ENGIL, ENGENHARIA E CONSTRUÇÃO, SA, representative at CCLH – Luso-Hungarian Chamber of Commerce;
Gonçalo Nuno Gomes de Andrade Moura Martins (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES - Chairman of the Board of Directors of MOTA-ENGIL, AMBIENTE E SERVIÇOS, SGPS, SA; - Chairman of the Board of Directors of MOTA-ENGIL II, GESTÃO, AMBIENTE, ENERGIA E CONCESSÕES DE SERVIÇOS, SA; - Chairman of the Board of Directors of TERNOR – SOCIEDADE DE EXPLORAÇÃO DE TERMINAIS, SA; - Chairman of the Board of Directors of TERTIR – TERMINAIS DE PORTUGAL, SA; - Chairman of the Board of Directors of TCL – TERMINAL DE CONTENTORES DE LEIXÕES, SA; - Chairman of the Board of Directors of TERTIR – CONCESSÕES PORTUÁRIAS, SGPS, SA; - Chairman of the Board of Directors of MOTA-ENGIL – CONCESSÕES DE TRANSPORTES, SGPS, SA; - Chairman of the Board of Directors of AENOR – AUTO-ESTRADAS DO NORTE, SA; - Chairman of the Board of Directors of LUSOSCUT – AUTO-ESTRADAS DAS BEIRAS LITORAL E ALTA, SA; - Chairman of the Board of Directors of LUSOSCUT – AUTO-ESTRADAS DA COSTA DA PRATA, SA; - Chairman of the Board of Directors of LUSOSCUT – AUTO-ESTRADAS DO GRANDE PORTO, SA; - Chairman of the Board of Directors of LUSOLISBOA – AUTO – ESTRADAS DA GRANDE LISBOA, SA; - Chairman of the Board of Directors of AENOR DOURO – ESTRADAS DO DOURO INTERIOR, SA; - Chairman of the Board of Directors of OPERANOR – OPERAÇÃO E MANUTENÇÃO DE AUTO-ESTRADAS, SA; - Chairman of the Board of Directors of OPERADORA LUSOSCUT BLA – OPERAÇÃO E MANUTENÇÃO DE AUTO- ESTRADAS, SA; - Chairman of the Board of Directors of OPERADORA LUSOSCUT – OPERAÇÃO E MANUTENÇÃO DE AUTO-ESTRADAS, SA; - Chairman of the Board of Directors of OPERADORA LUSOSCUT GP – OPERAÇÃO E MANUTENÇÃO DE AUTO- ESTRADAS, SA; - Chairman of the Board of Directors of OPERADORA GL – OPERAÇÃO E MANUTENÇÃO DE AUTO-ESTRADAS, SA; - Chairman of the Board of Directors of OPERANOR DOURO INTERIOR – OPERAÇÃO E MANUTENÇÃO RODOVIÁRIA, SA; - Chairman of the Board of Directors of ASCENDI, CONCESSÕES DE TRANSPORTES, SGPS, SA; - Chairman of the Board of Directors of ASCENDI, SERVIÇOS DE ASSESSORIA, GESTÃO E OPERAÇÃO, SA; - Member of the Board of Directors of EMSA - EMPREENDIMENTOS E EXPLORAÇÃO DE ESTACIONAMENTOS, SA; - Member of the Board of Directors of SUMA - SERVIÇOS URBANOS E MEIO AMBIENTE, SA; - Member of the Board of Directors of SADOMAR – AGÊNCIA DE NAVEGAÇÃO E TRÂNSITOS, SA; - Member of the Board of Directors of MTS - METRO TRANSPORTES DO SUL, SA; - Member of the Board of Directors of COPEXA - CONCESIONARIA AUTOPISTA PEROTE-XALAPA, SA DE C.V. (Mexico);
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Gonçalo Nuno Gomes de Andrade Moura Martins (Director) - Member of the Board of Directors of LUSOPONTE – CONCESSIONÁRIA PARA A TRAVESSIA DO TEJO SA; - Member of the Board of Directors of GESTIPONTE – OPERAÇÃO E MANUTENÇÃO DAS TRAVESSIAS DO TEJO, SA; - Member of the Board of Directors of LOGZ – ATLANTIC HUB, SA; - Chairman of the Board of the General Meeting of MULTITERMINAL – SOCIEDADE DE ESTIVA E TRÁFEGO, SA; - Chairman of the Board of the General Meeting of LOKEMARK - SOLUÇÕES DE MARKETING, SA; - Director of OPERPORT – SOCIEDADE PORTUGUESA DE OPERADORES PORTUÁRIOS, LDA.; - Director of EQUIMETRAGEM – OPERAÇÃO E MANUTENÇÃO DE INFRA-ESTRUTURAS DE TRANSPORTES, SA; - Member of the Remuneration Committee TAKARGO – TRANSPORTE DE MERCADORIAS, SA; - Member of the Remuneration Committee E.A.MOREIRA – AGENTES DE NAVEGAÇÃO, SA; - Member of the Remuneration Committee LISCONT – OPERADORES DE CONTENTORES, SA; - Member of the Remuneration Committee TRANSITIBER – LOGÍSTICA E TRANSPORTE INTERNACIONAL, SA; - Member of the General Board of ASTERIUM, ACE; - Member of the Senior Board of ALTAVIA Consortium; - Member of the Senior Board of TERTIR – TERMINAIS DE PORTUGAL, SA; - Member of the Supervisory Board of INDAQUA – INDÚSTRIA DE GESTÃO DE ÁGUAS, SA.
Positions held at other companies outside the MOTA-ENGIL GROUP - Director of COGERA - Sociedade de Produção de Energia por Cogeração, Lda; - Director of COVELAS – Energia, Lda
Luís Manuel Ferreira Parreirão Gonçalves (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES Since January 5, 2009, he has not held positions at other companies of the MOTA-ENGIL GROUP.
Positions held at other companies outside the MOTA-ENGIL GROUP Does not perform duties at other companies outside the MOTA-ENGIL GROUP.
José Luís Catela Rangel de Lima (Director)
Duties in other MOTA-ENGIL GROUP COMPANIES
- Chairman of the Audit Committee of LUSOPONTE – CONCESSIONÁRIA PARA A TRAVESSIA DO TEJO SA;
Positions held at other companies outside the MOTA-ENGIL GROUP Does not perform duties at other companies outside the MOTA-ENGIL GROUP.
Luís Valente de Oliveira (Independent Director)
Duties in other MOTA-ENGIL GROUP COMPANIES Does not perform duties at other companies of the MOTA-ENGIL GROUP.
Positions held at other companies outside the MOTA-ENGIL GROUP - Director of the Business Association of Portugal; - European co-ordinator of Auto-Estradas do Mar; - Director of the Luso-American Development Foundation (FLAD); - Member and chairman of the Audit and Risk Committee of Millennium bcp; - Chairman of the Audit Committee of EFACEC;
António Bernardo Aranha da Gama Lobo Xavier (Independent Director)
Duties in other MOTA-ENGIL GROUP COMPANIES Does not perform duties at other companies of the MOTA-ENGIL GROUP.
Positions held at other companies outside the MOTA-ENGIL GROUP - Non-executive director of SonaeCom, SGPS, SA, plc; - Non-executive director of Banco BPI, SA, plc; - Member of the Board of Directors of EPM, SGPS, SA; - Member of the Board of Directors of the Serralves Foundation; - Member of the General Board of PÚBLICO, SA; - Chairman of the board of the General Meeting of Banco Santander Consumer, SA; - Member of the Audit Committee of the Belmiro de Azevedo Foundation; - Member of the Board of Directors of Dot One SGPS, SA; - Chairman of the board of the General Meeting of Têxtil Manuel Gonçalves, SA.
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António Manuel da Silva Vila Cova (Independent Director)
Duties in other MOTA-ENGIL GROUP COMPANIES Does not perform duties at other companies of the MOTA-ENGIL GROUP.
Positions held at other companies outside the MOTA-ENGIL GROUP Member of the Audit Committee of Banco Finantia.
II.12. Identification of the members of the Statutory Audit Board, detailing whether the members comply with the incompatibility rules provided for in Article 414-A.1 and with the criterion of independence provided for in Article 414.5, both of the Companies Code.
Incompatibility Independence Member criterion criterion
Alberto João Coraceiro de Castro Complied Complied José Rodrigues de Jesus, ROC Complied Complied Manuel Teixeira Mendes Complied Complied Pedro Manuel Seara Cardoso Perez Complied Complied
The Statutory Audit Board meets with the official auditor and with the external auditor the frequency considered adequate, monitoring the audit performed and checking its independence. Decisions regarding the choice of these service providers and their remuneration are the responsibility of the Board of Directors, at the prior proposal of the Statutory Audit Board.
The annual activity report issued by the Statutory Audit Board is published together with the Annual Report and Accounts, available on the MOTA-ENGIL Internet site. Any constraints encountered by the Statutory Audit Board within the scope of its activity during the year are communicated in its report.
Although the Audit Committee is the prime interlocutor in the relations with the official auditor and with the external auditor and is the first addressee of the reports they draw up, the Board of Directors takes cognisance of these tasks through several joint meetings between the Statutory Audit Board and a member of the Board of Directors with the official and external auditors.
The Statutory Audit Board assesses the External Auditor on an ongoing basis.
The members of the Statutory Audit Board, particularly its chairman, are informed of the meetings of the Board of Directors, which they regularly attend, allowing them to monitor the overall business of the GROUP.
During 2009 the remuneration of the supervisory bodies amounted to €111,848:
Expressed in Euros
Supervisory Bodies Total
Statutory Audit Board Alberto João Coraceiro de Castro 30,000 José Rodrigues de Jesus 30,000 Manuel Teixeira Mendes 6,000 Statutory Auditor António Magalhães e Carlos Santos, SROC 45,848 111,848
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II.13. Professional qualifications of the members of the Statutory Audit Board, indication of their professional activities at least during the past five years, number of shares they hold in the company, date of their first appointment and date of conclusion of their term of office
Alberto João Coraceiro de Castro (Chairman)
Professional Qualifications - Degree in Economics, University of Porto Faculty of Economics - Doctorate in Economics, University of South Carolina.
Professional career during the past five years - Lecturer at Universidade Católica Portuguesa (Porto); - Deputy-chairman of the General and Supervisory Board of EDP (since 2006); - Chairman of the Audit Committee of Unicer (since 2007); - Customer Ombudsman of the Port of Leixões; - Chairman of the Board of Directors of Ciencinvest – Valorização Económica da Ciência, SA (2005-2008); - Non-executive director of Douro Azul, SA (up to 2008).
Nº of shares as at 31/12/2009 2,200 shares
1st Appointment March 30, 2007
End of Term of Office December 31, 2010
José Rodrigues de Jesus (Full Member)
Professional Qualifications - Degree in Economics, University of Porto Faculty of Economics - Official Auditor
Professional career during the past five years - University lecturer; - Official Auditor
Nº of shares as at 31/12/2009 Held no shares in MOTA-Engil, SGPS, SA
1st Appointment March 30, 2007
End of Term of Office December 31, 2010
Manuel Teixeira Mendes (Full Member)
Professional Qualifications Baccalaureate in Civil Engineering, Mining, Metallurgy and Company Management
Professional career during the past five years - Chairman of the Audit Committee of Pescas Tavares Mascarenhas, SA; - At present, besides being member of the Statutory Audit Board and of the Remuneration Committee of Mota- Engil, SGPS, SA, he is chairman of the Audit Committee of SUNVIAUTO – Indústria de Comp. de Automóveis, SA.
Nº of shares as at 31/12/2009 26,500 shares
1st Appointment March 30, 2007
End of Term of Office December 31, 2010
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II.14. Positions held at other companies by members of the audit committee, detailing those held in other companies of the same group
Alberto João Coraceiro de Castro (Chairman)
Duties in other MOTA-ENGIL GROUP COMPANIES Does not perform duties at other companies of the MOTA-ENGIL GROUP.
Positions held at other companies outside the MOTA-ENGIL GROUP - Deputy-chairman of the General and Supervisory Board of EDP (since 2006); - Chairman of the Audit Committee of Unicer (since 2007); - Customer Ombudsman of the Port of Leixões; - Chairman of the Board of Directors of Ciencinvest – Valorização Económica da Ciência, SA (2005-2008); - Non-executive director of Douro Azul, SA (up to 2008).
José Rodrigues de Jesus (Full Member)
Duties in other MOTA-ENGIL GROUP COMPANIES Does not perform duties at other companies of the MOTA-ENGIL GROUP.
Positions held at other companies outside the MOTA-ENGIL GROUP - Statutory auditor of the following companies: Ambar – Ideias no Papel, SA, Calfor - Indústrias Metálicas, SA, Quinta de Roriz – Vinhos, SA, Porto Vivo, SRU – Sociedade de Reabilitação Urbana da Baixa Portuense, SA, Edemi Gardens – Promoção Imobiliária, SA, Quintas & Quintas – Offshore, Sistemas de Amarração, SA, Farmácia Ribeiro, SA, Camilo dos Santos Mota, SA, Imoagueda, SGPS, SA; member of the audit committees, without the standing of official auditor, of Finibanco Holding, SGPS, SA, Finibanco, SA, Millenniumbcp Fortis Grupo Segurador, SAGPS, SA, and Gérmen – Moagem de Cereais, SA, secretary of the board of the General meeting of MILLENNIUM bcp – Gestão Fundos Investimento, SA.
Manuel Teixeira Mendes (Full Member)
Duties in other MOTA-ENGIL GROUP COMPANIES - Member of the Remuneration Committee of MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA; - Member of the Remuneration Committee of Mota-ENGIL - AMBIENTE E SERVIÇOS, SGPS, SA; - Member of the Remuneration Committee of VIBEIRAS - SOC. COMERCIAL DE PLANTAS, SA; - Member of the Remuneration Committee of MANVIA – MANUT. E EXPLORAÇÃO DE INST. E CONST., SA; - Member of the Remuneration Committee of EMSA – EMPREEND. E EXPLORAÇÃO DE ESTACIONAMENTOS,SA; - Member of the Remuneration Committee of AEROGOLFE – GESTÃO, CONST. E MANUT. DE CAMPOS DE GOLFE,
SA.
Positions held at other companies outside the MOTA-ENGIL GROUP Chairman of the Audit Committee of SUNVIAUTO – Indústria de Comp. de Automóveis, SA
II.15. Identification of the members of the general and supervisory board and of other committees set up thereunder, detailing the members that meet the incompatibility rules provided for in Article 414-A.1, including indent f) and the independence criterion provided for in Article 414.5, both of the Companies Code
Not applicable
II.16. Professional qualifications of the members of the general and supervisory board and of other committees set up thereunder, indication of their professional activities during at least the past five years, number of shares they hold in the company, date of their first appointment and date of conclusion of their term of office
Not applicable
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II.17. Duties performed in other companies by members of the general and supervisory board and of other committees set up thereunder, detailing those performed at other companies of the same group
Not applicable
II.18. Description of the remuneration policy, including, in particular, the means of aligning the interests of the directors with those of the company, and the assessment of performance, making a distinction between the executive and non-executive directors, and a summary and explanation of the company's policy in respect of the terms of compensation negotiated contractually or though negotiation in the event of dismissal, and other payments linked to early termination of contracts.
The present remuneration policy at MOTA-ENGIL, SGPS, SA, seeks to promote the alignment of the interests of the directors with those of the company. It is primarily based on a fixed remuneration, with a variable component in the light of the results of the business and of the company's economic and financial situation.
The General Meeting is charged with appointing a Remuneration Committee, weighing the possibility and actual ability of the respective members to perform, in a sovereign manner during the whole of their term of office, the duties assigned to them, that is, in the definition of policies for the remuneration of corporate officers ensuring, from a medium- and long-term standpoint, the alignment of their interests with those of the company. This Remuneration Committee, whose mandate, as said, stems from the General Meeting, is not obliged to provide information to the General Meeting on this matter, appraisal of which was delegated on it by the General Meeting itself.
Executive Directors The remuneration policy for the executive members of the company's Board of Directors involves a plan consisting of:
(i) a fixed component defined in the light of the level of responsibility of each executive director, revised annually, which involves the gross basic remuneration payable over the period of one year;
(ii) a variable component paid the following year, by way of performance bonus, taking into account the evolution of their performance based on criteria defined and reviewed annually by the Remuneration Committee.
Non-executive directors The non-executive directors (excluding the independent directors) earn a regular fixed remuneration and a variable component.
Top Managers Each year the Remuneration Committee reviews the policy in respect of senior managers, their remuneration comprising a fixed component and a performance-based variable component.
The General Meeting is charged with appointing a Remuneration Committee, weighing the possibility and the actual ability of the respective members to perform at all times their duties with which they are charged during their entire term of office. The committee shall define the remuneration policies of corporate officers who, from a medium- to long-term standpoint, promote alignment of the respective interests with those of the company. Considering the obligation imposed by the recent Act 28/2009, of June 19, the Remuneration Committee will submit to the appraisal of the General Meeting on March 31, 2010, a declaration on the management and supervisory bodies' remuneration policy.
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II.19. Indication of the composition of the remuneration committee or similar body, if any, identifying the respective members who are also members of the management body, as well as their spouses and their relatives in a direct line, to the third degree
The MOTA-ENGIL, SGPS, SA, Remuneration Committee comprises the following members:
António Manuel Queirós Vasconcelos da Mota
Chairman of the Board of Directors and brother of three members of the Board of Directors.
Maria Teresa Queirós Vasconcelos Mota Neves da Costa
Member of the Board of Directors and sister of three members of the Board of Directors.
Manuel Teixeira Mendes
Not a member of the Board of Director nor has he any family tie with any of its members.
II.20. Indication of the several or joint remuneration, understood in the widest sense of the term, including performance bonuses, earned in the year in question by the members of the management body. Expressed in Euros Fixed Variable Attendance Board of Directors Total component component Fees António Manuel Queirós Vasconcelos da Mota 500,000 137,501 - 637,501 Jorge Paulo Sacadura Almeida Coelho 500,000 202,758 - 702,758 Arnaldo José Nunes da Costa Figueiredo 310,000 136,905 - 446,905 Maria Manuela Queirós V. Mota dos Santos 275,000 106,534 - 381,534 Maria Teresa Queirós V. Mota Neves da Costa 275,000 106,534 - 381,534 Maria Paula Queirós V. Mota de Meireles 275,000 64,495 - 339,495 Eduardo Jorge de Almeida Rocha 300,000 133,341 - 433,341 Ismael Antunes Hernandez Gaspar 310,000 136,151 - 446,151 Gonçalo Nuno Gomes de Andrade Moura Martins 300,000 130,000 - 430,000 Luís Manuel Ferreira Parreirão Gonçalves 360,000 103,434 - 463,434 José Luís Catela Rangel de Lima 150,000 - - 150,000 Luis Valente de Oliveira - - 35,000 35,000 António Bernardo Aranha da Gama Lobo Xavier - - 35,000 35,000 António Manuel da Silva Vila Cova - - 23,500 23,500 3,555,000. 1,257,652. 93,500 4,906,152.
There are no stock-option plans or rights to acquire options on shares or any other incentives system involving shares. The criteria relating to the variable component of the remuneration of the management bodies are those set out in the remuneration policy described in point II.18.
Information on the link between the remuneration and the performance of the management bodies is set out in the remuneration policy described in point II.18.
Information on the main parameters and bases of any annual bonus system is that set out in the remuneration policy described in point II.18. There are no other non-pecuniary benefits.
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No indemnities were paid nor are any owed to former executive directors, in respect of termination of duties during the year.
No other amounts were paid for any reason whatsoever to other companies in a controlling of group relationship.
Some of the directors (founder equityholders) benefit from a defined-benefit pension plan, which allows the beneficiaries to obtain a pension of 80% of the salary earned on retirement. It should be mentioned that this plan was in force prior to the admission to listing of MOTA-ENGIL, SGPS, SA, on the stock market.
In accordance with Note 32 of the Notes to the consolidated accounts as at December 31, 2009 & 2008, liabilities for pensioners and liabilities for personnel in service, as well as the respective cover, are as follows:
31.12.09 31.12.08
Liabilities to pensioners 1,698,852 3,499,149 Liabilities to personnel in service 8,557,363 8,119,859 Provisions set aside (Note 29. Provisions) 10,256,214 11,619,008 % of cover 100.0% 100.0%
The variation during the year was essentially the result of updating the wages of eligible employees currently in service and to the decease of some pensioner beneficiaries. These liabilities stem from the latest actuarial study available, referred to December 31, 2009, based on the following assumptions:
Retirement age 65 Expected wage increase rate 3% Discount rate 3% Mortality tables TV 88/99 Return on the Fund 3% Pension growth rate 3% Number of payments of the benefit 14
Liabilities for defined-benefit pension plans are calculated in accordance with the “Projected Unit Credit Method” using the actuarial and financial assumptions best suited to the plan in question.
II.21. Indication, in individual terms, of the amounts payable, regardless of their nature, in the event of termination of duties of the present members of the management or supervisory bodies, in the event they exceed twice the fixed monthly remuneration.
No indemnities have been established or fixed in the event that the present members of the management or supervisory bodies terminate their duties during their term of office.
II.22. Information on the policy of communication of irregularities adopted at the company
At the end of 2008, the “Audit Committee Regulations on procedures to be adopted in the matter of communication of irregularities” was approved, which was divulged to the entire GROUP though an internal service order.
Through approval of these regulations, the Board of Directors of MOTA-ENGIL, SGPS, SA, wished to encourage internal communication of irregular practices so as to prevent or repress irregularities, avoiding damages aggravated by ongoing irregular practices, while complying with the Securities Market Commission recommendations in this matter.
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The regulations consider that irregular practices are all acts and omissions, fraudulent or negligent, performed within the scope of the business of the companies of the MOTA-ENGIL GROUP that could impact on the financial statements or on other areas, damaging the assets and the good name of the GROUP, namely violation of any law, rule or regulation, practice of fraud, abuse of authority, bad management, waste of funds, damage to the health and safety of the workers and damage to the environment.
The Audit Committee guarantees the confidentiality of the accusations and the anonymity of the author of communications of signs that irregularities have been committed, though the MOTA- ENGIL, SGPS, SA, Board of Directors is kept informed. Where the signs of irregularities are communicated by workers of MOTA-ENGIL GROUP companies the worker's rights cannot be affected by the fact. Persons falsely communicating irregular practices or communicating them in bad faith, as well as those infringing the duty of confidentiality may be subject to criminal proceedings and to disciplinary proceedings if they are MOTA-ENGIL GROUP company employees. The procedural stages of the irregularities communications system, the responsibility of the Audit Committee, are as follows: a) reception and registration; b) preliminary appraisal and assessment of the consistency of the communication received; c) investigation; d) final report. with communication to the chairman of the Board of Directors.
The investigation process is undertaken by the Audit Committee, assisted by the Investment, Audit and Risk Committee, which is competent to deal with matters not involving decisions. The Investment Audit and risk Committee may propose that external auditors or other specialists be hired to help in the investigation where the special nature of the matters in question so warrant.
By January 31 each year the Audit Committee evaluates the activity undertaken the previous year and proposes such alterations as it may deem necessary to the improvement and perfecting of the irregular-practice communication system.
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III. Information
III.1. Issued capital structure, including indication of shares not admitted to trading, different categories of shares, rights and duties inherent therein and percentage of the issued capital represented by each category
The MOTA-ENGIL, SGPS, SA, issued capital as at December 31, 2008, amounted to €204,635,695, fully paid up and represented by 204,635,695 ordinary bearer shares each of a par value of €1, which, with the exception of treasury shares, give entitlement to dividends. The whole of the shares that make up the issued capital are admitted to trading on Euronext Lisbon.
III.2. Qualified holdings in the issuer's issued capital, calculated under Article 20 of the Securities Code
% Issued Equityholders N. of shares capital
Mota Gestão e Participações, SGPS, SA 75,695,252 36.99% ALGOSI - Gestão de Participações Sociais, SGPS, SA 30 538 198 14.92% António Manuel Queirós Vasconcelos da Mota 4,624,617 2.26% Maria Manuela Queirós Vasconcelos Mota dos Santos 3,665,066 1.79% Maria Teresa Queirós Vasconcelos Mota Neves da Costa 3,736,836 1.83% Maria Paula Queirós Vasconcelos Mota de Meireles 3,913,051 1.91% Attributable to FM – Sociedade de Controlo, SGPS, SA (1) 122,173,020 59.70%
Kendall II, SA 9,472,764 4.63% Investment Opportunities, SA 620,510 0.30% Banco Privado Português, SA 271,243 0.13% Attributable to Privado Holding SGPS, SA 10,364,517 5.06%
QMC Development Capital Fund Plc 4,190,954 2.05% Attributable to Nmás 1 Agencia de Valores SA 4,190,954 2.05% (1) FM – Sociedade de Controlo, SGPS, SA, is wholly-owned by: António Manuel Queirós Vasconcelos da Mota (38.23%); Maria Manuela Queirós Vasconcelos Mota dos Santos (20.59%); Maria Teresa Queirós Vasconcelos Mota Neves da Costa (20.59%) and; Maria Paula Queirós Vasconcelos Mota de Meireles (20.59%).
III.3. Identification of equityholders having special rights and description of such rights
There are no equityholders or categories of equityholders having special rights.
III.4. Possible restrictions to the transferability of the shares, such as clauses requiring consent for their disposal or limitations to the ownership of shares
There are no restrictions whatsoever to the transfer of shares in MOTA-ENGIL, SGPS, SA, such as clauses requiring consent for their disposal or as to limitations to share ownership.
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III.5. Equityholders' agreements known to the company that could lead to restrictions in the matter of transfer of securities or voting rights
The company has no knowledge of equityholders' agreements that could lead to restrictions in the matter of transfer of securities or voting rights
III.6. Rules applicable to the alteration of the company's articles of association
There are no special rules governing the alteration of the articles of association other than those resulting from the general legislation provided for in the Companies Code.
III.7. Control mechanisms provided for in any system of worker participation in the issued capital to the extent that they do not directly exercise the voting rights
There are no mechanisms for worker participation in the MOTA-ENGIL, SGPS, SA, issued capital.
III.8. Description of the evolution of the issuer's share prices, taking into account, in particular: a) the issue of shares or other securities that give entitlement to subscribe or acquire shares; b) the announcement of results; c) payment of dividends by category of shares, with indication of the net amount per share
The downward trend of the leading European stock markets, which began in 2008 in the wake of the widespread crisis of the financial markets, began to be reversed towards the end of the 2nd quarter of 2009, providing clear signs of an upturn. This upturn allowed the leading European stock markets to close the year with a positive performance, especially the Euronext 100, which appreciated 25% in 2009. The PSI20 returned an even more expressive gain of about 33% (though the fall had also bee greater in 2008. The Mota-Engil shares continued to outperform the main market indices, closing the year sharply higher (up 68%), compared with the sharp drop seen in 2008 (down 54%). Following the minimum market capitalisation of the year in March, at €432 million, the market capitalisation rose sharply to peak at €899 million.
Total Total 1st Half 2009 2nd Half 2009 Performance 1st Half 2008 2nd Half 2008 Performance 2009 2008 Mota-Engil shares 37% 30% 68% -28% -26% -54%
PSI-20 12% 21% 33% -35% -16% -51%
EURONEXT 100 0% 26% 25% -23% -22% -45%
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The evolution of the share price is shown in the following chart:
Evolution of shares
5,500 Publication of Dividend Publication of Publication of Publication of Annual Results Payment 1Q09 1F09 Results 3Q09 2008 2008 Results Results 4,500
3,500
2,500
1,500
09 09 09 09
09 09
09
09
09 09
09 09
- - - -
- -
-
-
- - -
-
Jul
Oct
Apr Jun
Jan
Feb Mar
Aug Nov Dec Sep May
With the exception of treasury shares, all the shares that make up the MOTA-ENGIL, SGPS, SA, issued capital give entitlement to dividends. On May 15, 2009, the 2008 dividend was placed at the disposal of equityholders in the net sum of €0.088 per share.
No shares or other securities were issued during 2009 giving entitlement to subscription or acquisition of shares.
III.9. Description of the dividend distribution policy adopted by the company, identifying in particular the amount of the dividend per share paid during the past three years
The dividend policy adopted by the company consists of granting a dividend providing, in each fiscal year, a minimum payout ratio of 50% and a maximum of 75%, depending on the evaluation made by the Board of Directors of a number of factors over time, with the prime objective of providing an adequate remuneration of equityholder capital by this means. The net dividend per share over the past three years amounted to 11 cents.
III.10. Description of the main characteristics of the stock option plans and of plans to grant options to acquire shares adopted or in force during the year in question, particularly justification for the adoption of the plan, category and number of addresses of the plan, conditions of attribution, non-saleability of shares clauses, criteria governing the price of the shares and the option exercise price, period during which the options may be exercised, characteristics of the shares to be attributed, existence of incentives for the acquisition of shares and/or for the exercise of options, and competence of the management body to execute of modify the plan
At this time the company has no plans to attribute shares or stock option plans.
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III.11. Description of the main elements of deals and operations carried out between, on the one hand, the company and, on the other, the members of its management and supervision bodies, holders of qualified holdings or companies in a controlling or group relationship, provided they are significant in economic terms for any party involved, except those deals or operations that, cumulatively, are undertaken under normal market conditions for similar operations and are part of the company's normal business.
No deals or other transactions were undertaken between the Company and the members of the Board of Directors and of the audit committee, qualified equityholders or companies in a controlling or group relationship, except those deals carried out as a part of the day-to-day business, which were also carried out at arm’s length.
III.12. Reference to the existence of an Investor Support Office or other similar service, with mention of: a) the duties of the Office; b) the type of information provided by the office; c) the means of access to the Office; d) the company's Internet site; and e) the identity of the market relations representative.
MOTA-ENGIL, SGPS, SA, is in permanent contact with investors and analysts through the Market Relations Division, which provides up-to-date information that is both relevant and reliable, besides providing clarification regarding the business of the GROUP, with a view to improving their knowledge and understanding of the GROUP.
The Market Relations Division, in articulation with the Group's Management Control, regularly organises presentations for the financial community, communications on quarterly, half-yearly and annual results, as well as communications of importance to the market as and where seen to be necessary to disclose or clarify any event that could influence the evolution of the price of the shares in MOTA-ENGIL, SGPS, SA . Furthermore, when so requested, it provides clarification on the GROUP's activities, replying to questions placed by e-mail or by telephone.
All the information divulged is available on the CMVM Internet page (www.cmvm.pt) and on the MOTA-ENGIL (www.mota-engil.pt) Internet page.
The Market Relations representative is Eduardo Jorge de Almeida Rocha, whose contacts are:
Eduardo Rocha Edifício Mota Rua do Rego Lameiro, 38 4300-454 Porto Telephone: +351 225 190 300 Fax: +351 225 190 303 e-mail: [email protected]
The person responsible for the Market Relations Division is J. Vermelho
João Vermelho Rua Mário Dionísio, 2 2796-957 Linda-a-Velha Telephone: +351 214 158 200 Fax: +351 214 158 688 e-mail: [email protected]
Any investor or analyst may also contact the company through its Market Relations Representative, Eduardo Rocha, by electronic mail addressed to [email protected].
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III.13. Indication of the amount of annual remuneration paid to the auditor and to other natural or corporate persons belonging to the same network supported by the company and/or by corporate persons in a controlling or group relationship, and also details of the percentage in respect of the following services: a) legal audit of the accounts; b) other reliability assurance services; c) tax consultancy services; d) other services other than legal audit of the accounts
During 2009, the annual remuneration paid by MOTA-ENGIL, SGPS, SA, and by other companies in a controlling or group relationship to the company's External Auditor (Deloitte & Associados, SROC, SA), including other entities belonging to the same network, amounted to €2,020,755, this payment having been broken down in respect of the provision of the following services:
Nature of the Service Amount %
Audit and legal review of the accounts 846,666 42% Other reliability assurance services 255,264 13% Tax consultancy 359,052 18% Other services 559,773 28% TOTAL 2,020,755 100%
“Other services” in the above table essentially refer to organisational consultancy services (€344,000) and to services rendered in the field of information systems (€183,000).
The tax consultancy services and other services are provided by specialists other than those involved in the audit process, and it is therefore considered that the auditor's independence is further heightened. In 2009 the fees paid by MOTA-ENGIL, in Portugal, to firms of the Deloitte network amounted to less than 2% of Deloitte's annual billing in Portugal. The External Auditor's quality system controls and monitors potential risks of loss of independence or of possible conflicts of interest existing with MOTA-ENGIL. Additionally, a "Letter of Independence" is obtained from Deloitte in which it warrants compliance with the IFAC (International Federation of Accountants) international guidelines in the matter of auditor independence.
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Annexes
Declaration under Article 245.1(c) of the Securities Code
Under Article 245.1 (c) of the Securities Code, the members of the Board of Directors declare that, to the full extent of their knowledge, the information contained in this report and accounts has been drawn up in accordance with international financial reporting standards (“IFRS”) as adopted by the European Union, providing a true and fair image of the assets and liabilities, of the financial situation and of the results of MOTA-ENGIL, SGPS, SA, and of the companies included in the consolidation perimeter, and that this management report faithfully sets out the evolution of the business, of the performance and of the position of MOTA-ENGIL, SGPS, SA, and of the companies included in the consolidation perimeter, and that it contains a description of the main risks and uncertainties with which they are confronted.
Porto, March 8, 2010
António Manuel Queirós Vasconcelos da Mota Chairman of the Board of Directors
Jorge Paulo Sacadura de Almeida Coelho Deputy-chairman of the Board of Directors and Chief Executive Officer
Arnaldo José Nunes da Costa Figueiredo Deputy-chairman of the Board of Directors and Member of the Executive Committee
Maria Manuela Queirós Vasconcelos Mota dos Santos Member of the Board of Directors
Maria Teresa Queirós Vasconcelos Mota Neves da Costa Member of the Board of Directors
Maria Paula Queirós Vasconcelos Mota de Meireles Member of the Board of Directors and Member of the Executive Committee
Eduardo Jorge de Almeida Rocha Member of the Board of Directors and Chief Financial Officer
Ismael Antunes Hernandez Gaspar Member of the Board of Directors and Member of the Executive Committee
Gonçalo Nuno Gomes de Andrade Moura Martins Member of the Board of Directors and Member of the Executive Committee
Luís Manuel Ferreira Parreirão Gonçalves Member of the Board of Directors
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José Luís Catela Rangel de Lima Member of the Board of Directors
Professor Luís Valente de Oliveira Non-executive and independent member of the Board of Directors
António Bernardo Aranha da Gama Lobo Xavier Non-executive and independent member of the Board of Directors
António Manuel da Silva Vila Cova Non-executive and independent member of the Board of Directors
Article 324.2 of the Companies Code
Within the scope of the resolution adopted by the General Meeting in March 28, 2008, MOTA- ENGIL SGPS, SA, acquired on the stock market 336,000 treasury shares during 2009, details of which are as follows:
Average date N. shares Prive Value (€) (€/share) 6-Jan-09 30,000 2.50 74,863 7-Jan-09 55,000 2.50 137,706 8-Jan-09 55,000 2.55 140,131 9-Jan-09 30,000 2.63 78,765 12-Jan-09 32,899 2.61 85,994 13-Jan-09 52,000 2.56 133,341 14-Jan-09 75,000 2.58 193,245 15-Jan-09 6,101 2.50 15,234
As at December 31, 2009, MOTA-ENGIL SGPS, SA held 10,972,328 treasury shares representing 5.36% of its issued capital.
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Article 447 of the Companies Code and Article 14.7 of CMVM Regulation 5/2008
Disclosure of shares and other securities held by members of the Board of Directors and by managers, as well as by persons closely related to them under Article 248-B of the Securities Code, and of transactions thereon during the year.
Annex to which Article 447 of the Companies Code and Article 14.7 of CMVM Regulation 5/2008 refers:
Holding shares in MOTA-ENGIL,SGPS, SA ALGOSI, SGPS, SA MGP, SGPS, SA FM, SGPS, SA Managers / Persons closely related Day Market / Qt. Price Buy / Sell % Qt. % Qt. % Qt. % Off Market ANTÓNIO MANUEL QUEIRÓS VASCONCELOS DA MOTA AND SPOUSE Closing Balance 4,624,617 2.26% 1,166 16.7% 517,500 8.6% 19,115 38.2% MARIA MANUELA QUEIRÓS VASCONCELOS MOTA AND SPOUSE Closing Balance 3,665,066 1.79% 1,078 10.8% 427,500 7.1% 10,295 20.6% MARIA TERESA QUEIRÓS VASCONCELOS MOTA AND SPOUSE Closing Balance 3,736,836 1.83% 1,078 10.8% 427,500 7.1% 10,295 20.6% MARIA PAULA QUEIRÓS VASCONCELOS MOTA AND SPOUSE Closing Balance 3,913,051 1.91% 1,078 10.8% 427,500 7.1% 10,295 20.6% EDUARDO JORGE DE ALMEIDA ROCHA Closing Balance 30,000 0.01% ------MANUEL TEIXEIRA MENDES AND SPOUSE Closing Balance 26,500 0.01% ------GONÇALO NUNO GOMES DE ANDRADE MOURA MARTINS Closing Balance 12,435 0.01% ------ISMAEL ANTUNES HERNANDEZ GASPAR Closing Balance 1,000 0.00% ------JOSE LUIS CATELA RANGEL DE LIMA Closing Balance 1,000 0.00% ALBERTO JOÃO CORACEIRO DE CASTRO Closing Balance 2,200 0.00% ------ALGOSI - GESTÃO DE PARTICIPAÇÕES SOCIAIS, SGPS, SA Closing Balance 30,538,198 14.92% ------FM - SOC. DE CONTROLO, SGPS, SA Closing Balance - - - 4,200,000 70.0% -
MOTA GESTÃO E PARTICIPAÇÕES, SGPS, SA Opening Balance 75,436,644 36.86% 5,100 51.0% - - - - 15-01-2009 4,020 2.450 Buy Market - - - 17-02-2009 90,388 2.202 Buy Market - - - 18-02-2009 36,567 2.202 Buy Market - - - 20-02-2009 32,432 2.202 Buy Market - - - 23-02-2009 35,201 2.202 Buy Market - - - 24-02-2009 50,000 2.196 Buy Market - - - 13-03-2009 10,000 2.100 Buy Market - - - Closing Balance 75,695,252 36.99% 5,100 51.0% - - - -
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Article 448 of the Companies Code
In compliance with Article 448.4 of the Companies Code, there follows a list of equityholders who, as of December 31, 2009, held at least 10%, 33% or 50% of the issued capital of MOTA- ENGIL, SGPS, SA:
Equityholder N. of shares % Issued capital
Mota Gestão e Participações, SGPS, SA 75,695,252 36.99%
ALGOSI - Gestão de Participações Sociais, SGPS, SA (1) 30,538,198 14.92% (1) Mota Gestão e Participações, SGPS, SA holds 51% of the issued capital of ALGOSI - Gestão de Participações Sociais, SGPS, , SGPS, SA
During 2009 no shareholder relinquished its equityholdings as stated above.
Decree-Law 411/91, of October 17
Under the terms and for the purposes of Article 21 of Decree-Law 411/91 of October 17, it is hereby declared that the MOTA-ENGIL GROUP has now past-due debt to Social Security.
Article 66.5(g) of the Companies Code
The MOTA-ENGIL GROUP has branches in the following countries:
Company Country
Angola Benin
Cape Verde
Chad
Slovakia
Spain
MOTA-ENGIL, ENGENHARIA E CONSTRUÇÃO, SA USA
Hungary
Ireland
Malawi
Mozambique
Poland
Czech Republic
Algeria FERROVIAS E CONSTRUÇÕES, SA Hungary
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Qualified holdings
In compliance with Article 2.4 of CMVM Regulation 5/2008, there follows a list of holders of qualified holdings, stating the number of shares held and the corresponding percentage of voting rights, calculated in accordance with Article 20 of the Security Code, as at December 31, 2009:
Equityholder N. of shares % Issued capital
Mota Gestão e Participações, SGPS, SA 75,695,252 36.99%
ALGOSI - Gestão de Participações Sociais, SGPS, SA 30 538 198 14.92%
António Manuel Queirós Vasconcelos da Mota 4,624,617 2.26%
Maria Manuela Queirós Vasconcelos Mota dos Santos 3,665,066 1.79%
Maria Teresa Queirós Vasconcelos Mota Neves da Costa 3,736,836 1.83%
Maria Paula Queirós Vasconcelos Mota de Meireles 3,913,051 1.91%
Attributable to FM – Sociedade de Controlo, SGPS, SA (1) 122,173,020 59.70%
Kendall II, SA 9,472,764 4.63%
Investment Opportunities, SA 620,510 0.30%
Banco Privado Português, SA 271,243 0.13%
Attributable to Privado Holding SGPS, SA 10 364 517 5.06%
QMC Development Capital Fund Plc 4,190,954 2.05%
Attributable to Nmás 1 Agencia de Valores SA 4,190,954 2.05% (1) FM – Sociedade de Controlo, SGPS, SA, is wholly-owned by: António Manuel Queirós Vasconcelos da Mota (38.23%); Maria Manuela Queirós Vasconcelos Mota dos Santos (20.59%); Maria Teresa Queirós Vasconcelos Mota Neves da Costa (20.59%) and; Maria Paula Queirós Vasconcelos Mota de Meireles (20.59%).
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Supervision Reports
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d ANTÓNIO MAGALHÃES & CARLOS SANTOS Sociedade de Revisores Oficiais de Contas Inscrita na Lista dos Revisores Oficiais de Contas sob o nº53 Registada na CMVM com o nº.1975 Contribuinte nº.502 138 394
STATUTORY AUDITORS’ REPORT (TRANSLATION OF A REPORT ORIGINALLY ISSUED IN PORTUGUESE)
INTRODUCTION
1. We have audited the consolidated financial statements of “MOTA – ENGIL, SGPS, S.A.” (Company), which include the Consolidated Statement of Financial Position at the 31st December 2009, (which evidences a total of Euro 4 614 130 878 and a total equity of Euro 376 091 292, including a consolidated net profit of Euro 71 738 092), the Consolidated Statements of Profit and Loss and of Comprehensive Income, of Changes in Equity and of Cash Flow for the financial year finished at that date, and the corresponding Notes.
RESPONSABILITIES
2. The Company’s Board of Directors is responsible for the preparation of consolidated financial statements which disclose a true and suitable view of the group of companies included in the consolidation financial position, the consolidated results and the consolidated comprehensive income of its operations, the consolidated changes in equity and the consolidated cash flows, as well as the utilization of adequate methods and polices of accounting for that purpose, and the maintenance of an appropriate internal control system.
3. Our responsibility consists of expressing a professional and independent opinion based in our examination of those consolidated financial statements.
SCOPE
4. Our examination was performed in accordance with the Technical Standards and Guidelines issued by the Ordem dos Revisores Oficiais de Contas (Portuguese Institute of Statutory Auditors), which require a planned and executed examination in order to obtain an acceptable reliance degree on if the consolidated financial statements are exempt from significant deviations. So, the aforesaid examination included:
- the verification if the financial statements of the group of companies included in the consolidation were properly examined and if not, on the relevant cases, the verification, in a sampling basis, of the support of the amounts and the disclosure, in them contained, and the evaluation of the estimates, based on judgments and methods defined by the Company’s Board of Directors, used in their preparation; - the verification of the consolidation operations and the application of the equity method; - the appreciation of the adequacy of the adopted accounting policies, their uniform application and their disclosure, taking into account the circumstances. - the verification of the applicability of the going concern concept; and - the appreciation of being adequate, on the whole, the consolidated financial statements presentation.
5. Our examination also includes verifying that the financial information included in the consolidated Management Report is consistent with the financial statements mentioned above.
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Rua do Campo Alegre, 606 – 2º-Salas 201/203 – 4150-171 Porto • Telefones: +351 226 002 842 (08) • Fax: +351 226 092 747 • [email protected] www.amcs-sroc.pt WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d ANTÓNIO MAGALHÃES & CARLOS SANTOS Sociedade de Revisores Oficiais de Contas Inscrita na Lista dos Revisores Oficiais de Contas sob o nº53 Registada na CMVM com o nº.1975 Contribuinte nº.502 138 394
6. We understand that the performed examination allows an acceptable basis for the expression of our opinion.
OPINION
7. In our opinion, the mentioned consolidated financial statements present in a true and appropriate manner, in all relevant aspects, the consolidated financial position of “MOTA-ENGIL, SGPS, S.A.” on the 31st of December 2009, the consolidated results and the comprehensive income of its operations, the consolidated changes in equity and the consolidated cash flows for the year then ended, in conformity with International Financial Reporting Standards as adopted by the European Union.
Porto, 12th March 2010
______António Magalhães & Carlos Santos - SROC, Statutory Auditors Company, represented by Carlos Alberto Freitas dos Santos – Statutory Auditor nº 177
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Rua do Campo Alegre, 606 – 2º-Salas 201/203 – 4150-171 Porto • Telefones: +351 226 002 842 (08) • Fax: +351 226 092 747 • [email protected] www.amcs-sroc.pt WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d REPORT AND OPINION OF THE STATUTORY AUDIT BOARD (Translation of a report originally issued in Portuguese)
To the shareholders of
MOTA-ENGIL, SGPS, S.A.,
In compliance with legal and statutory obligations, the Statutory Audit Board of MOTA-ENGIL, SGPS, S.A., presents the report of its activities during 2009, as well as the opinion on the consolidated financial information file, which includes the management report and consolidated financial statements presented by the Company’s Board of Directors.
The Statutory Audit Board met regularly, accompanying the evolution of the GROUP, namely through meetings with the Board of Directors and its members and with the technical staff. All the required information was promptly made available to us.
Additionally, the Statutory Audit Board followed the activity of the Statutory Auditors Company. This allowed the collection of some additional elements that were useful to the accomplishment of the audit task.
The Statutory Audit Board studied the above-mentioned documents, the Statutory Auditors’ Report of Consolidated Accounts issued by the Statutory Auditors Company, and the Auditors’ Report issued by the external Auditors Company registered in the Securities Market Commission.
WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d For the purposes of Article 245.1 c) of the Securities Code, members of the Statutory Audit Board declare that, as far as they are aware, the 2009 Consolidated Report & Accounts was drawn up in accordance with the relevant accounting rules, and provide a true and fair view of the assets and liabilities, financial affairs and profit or loss of MOTA-ENGIL, SGPS, SA and other companies included in the consolidated accounts, and that the management report contains a faithful account of the business, performance and position of the said company and other companies included in the consolidated accounts, describing the main risks and uncertainties which they face.
Consequently, the Statutory Auditor Board considers the consolidated financial information file presented by the Company’s Board of Directors worth of approval.
Porto, 12th March of 2010
The Statutory Audit Board
Alberto João Coraceiro de Castro
José Rodrigues de Jesus
Manuel Teixeira Mendes WorldReginfo - 6bf74c7f-39e5-4a1f-b232-e3c9e0ba899d
AUDITORS’ REPORT
CONSOLIDATED FINANCIAL STATEMENTS
Introduction
1. In compliance with article nº245 of the Securities Market Code, we hereby present our Auditors’ Report on the consolidated financial information contained in the Board of Directors Report and on the accompanying consolidated financial statements for the year ended 31 December 2009 of Mota-Engil, S.G.P.S., S.A. and subsidiaries (“the Company”), which comprise the consolidated statement of the Financial Position as of 31 December 2009, that presents a total of 4,614,130,878 Euros and shareholders’ equity of 376,091,292 Euros, including a net consolidated profit of 71,738,092 Euros, the consolidated statements of results and comprehensive income, of changes in equity and of cash flows for the year then ended and the corresponding notes.
Responsibilities
2. The Company’s Board of Directors is responsible for: (i) the preparation of consolidated financial statements that present a true and fair view of the financial position of the Company and of the group of companies included in the consolidation, the consolidated results and comprehensive income of their operations, the consolidated changes in its equity and their consolidated cash flows; (ii) the preparation of historical financial information in accordance with the International Financial Reporting Standards as adopted by the European Union, and that is complete, true, up- to-date, clear, objective and licit, as required by the Securities Market Code; (iii) adopting adequate accounting principles and criteria and the maintenance of appropriate internal control systems; and (iv) informing on any significant facts that have influenced their operations, financial position, results or comprehensive income of the group of companies included in the consolidation.
3. Our responsibility is to verify the financial information included in the documents of account referred to above, namely if, in all material respects, the information is complete, true, up-to-date, clear, objective and licit, as required by the Securities Market Code, and issuing a professional and independent report on that financial information based on our examination.
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Scope
4. Our examination was performed in accordance with the Technical Review/Audit Standards (“Normas Técnicas e as Directrizes de Revisão/Auditoria”) issued by the Portuguese Institute of Statutory Auditors (“Ordem dos Revisores Oficiais de Contas”), which require that the examination be planned and performed with the objective of obtaining reasonable assurance about whether the consolidated financial statements are free of material misstatement. An examination includes verifying, on a sample basis, evidence supporting the amounts and disclosures in the financial statements and assessing the estimates, based on judgements and criteria defined by the Company’s Board of Directors, used in their preparation. An examination also includes: the verification of the consolidation procedures used, the application of the equity method, as well as verifying that the financial statements of the companies included in the consolidation have been appropriately examined; assessing the adequacy of the accounting principles used and their uniform application and disclosure, taking into consideration the circumstances; the verification of the applicability of the going concern concept; the adequacy of the overall presentation of the consolidated financial statements; and assessment that, in all material respects, the information is complete, true, up-to-date, clear, objective and licit. Our examination also comprises verifying that the financial information contained in the Board of Directors’ Report is in accordance with the other documents of account. We believe that our examination provides a reasonable basis for expressing our opinion.
Opinion
5. In our opinion, the consolidated financial statements referred to in paragraph 1 above, present fairly, in all material respects, the consolidated financial position of Mota-Engil, S.G.P.S., S.A. and subsidiaries as of 31 December 2009, the consolidated results and comprehensive income of its operations, the consolidated changes in its equity and their consolidated cash flows for the year then ended, in accordance with the International Financial Reporting Standards as adopted by the European Union, and the information contained therein is, in terms of the definitions included in the technical standards and review recommendations referred to in paragraph 4 above, complete, true, up-to-date, clear, objective and licit.
Porto, 12 March 2010
______Deloitte & Associados, SROC S.A. Represented by Jorge Manuel Araújo de Beja Neves
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MOTA-ENGIL, SGPS, SA EDIFÍCIO MOTA TEL: 351 22 5190300 PUBLIC LIMITED COMPANY RUA DO REGO LAMEIRO, Nº 38 FAX: 351 22 5190303 SHARE CAPITAL: €204,635,695 4300-454 PORTO WWW.MOTA-ENGIL.PT REGISTERED AT THE PORTO REGISTRY OF COMPANIES UNDER Nº 56,514 RUA MÁRIO DIONÍSIO, 2TEL: 351 21 4158200 VAT Nº: 502 399 694 2796-957 LINDA-A-VELHA FAX: 351 21 4158688
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