Annual Report 2010 - CMVM

ANNUALREPORT2010

Cover: Douro Litoral Motorway

Annual Report 2010

Table of ContentsCOMPANY IDENTIFICATIONGOVERNING BODIESORGANOGRAM - 2010TEIXEIRA DUARTE GROUP - 2010SUMMARY OF INDICATORSMANAGEMENT REPORT OF THE BOARD OF DIRECTORSI. INTRODUCTIONII. ECONOMIC ENVIRONMENTIII. GENERAL OVERVIEWIV. SECTOR ANALYSISIV.1. CONSTRUCTIONIV.2. CEMENT, CONCRETE AND AGGREGATESIV.3. CONCESSIONS AND SERVICESIV.4. REAL ESTATEIV.5. HOTEL SERVICESIV.6. DISTRIBUTIONIV.7. ENERGYIV.8. AUTOMOBILEV. HOLDINGS IN LISTED COMPANIESVI. EVENTS AFTER THE END OF THE REPORTING PERIODVII. OUTLOOK FOR THE FINANTIAL YEAR 2011VIII. DISTRIBUTION TO MEMBERS OF THE BOARD OF DIRECTORSIX. PROPOSAL FOR THE APPROPRIATION OF PROFITNOTES TO THE MANAGEMENT REPORT OF THE BOARD OF DIRECTORSCORPORATE GOVERNANCE REPORT - 2010FINANCIAL STATEMENTSCONSOLIDATED FINANCIAL STATEMENTSREPORTS, OPINIONS AND CERTIFICATIONS OF THE AUDIT BODIES45681011121313222331333944474952545555555657591291432053

Teixeira Duarte, S.A.Head Office: Lagoas Park, Edifício 2 - 2740-265 Porto SalvoShare Capital: € 420,000,000Single Legal Person and Registration number 509.234.526 at the Commercial Registry of Cascais (Oeiras)4

Governing BodiesBoard of the General Meeting of ShareholdersChairmanDeputy ChairmanSecretaryMr. Rogério Paulo Castanho AlvesMr. José Gonçalo Pereira de Sousa Guerra ConstenlaMr. José Pedro Poiares Cobra FerreiraBoard of DirectorsChairmanDirectorsMr. Pedro Maria Calainho Teixeira DuarteMr. Manuel Maria Calainho de Azevedo Teixeira DuarteMr. Joel Vaz Viana de LemosMr. Jorge Ricardo de Figueiredo CatarinoMr. Carlos Gomes BaptistaMr. João José de Gouveia CapelãoMr. João José do Carmo DelgadoSupervisory BoardChairmanMemberMemberAlternateMr. António Gonçalves MonteiroMr. Mateus MoreiraMr. Miguel Carmo Pereira CoutinhoMr. Horácio Lisboa AfonsoChartered ACCOUNTANTMariquito, Correia & AssociadosChartered Accountants Company, represented byMr. António Franciso Escarameia Mariquito - ROCCOMPANY SecretaryPermanentAlternateMr. José Pedro Poiares Cobra FerreiraMrs. Maria António Monteiro AmbrósioRepresentative for Market RelationsMr. José Pedro Poiares Cobra Ferreira5

TEIXEIRA DUARTE ORGANOGRAM2010BOARD OF DIRECTORSAdviser to the Board of DirectorsAntónio Costeira FaustinoMarketsCorporate CentreActivity SectorPortugalSpainConstructionCement, Concrete and AggregatesAngolaDelegationMr. Valdemar MarquesMr. Luís SantosMr. Pedro CostaAlgeriaDelegationMr. Pedro PlácidoMr. Ricardo AcabadoMr. Guedes DuarteBrazilMr. João DelgadoMr. Moreira da SilvaMr. Fernando MartinsMr. Alfredo SilvaCape VerdeChinaDelegationMr. António Carlos Teixeira DuarteMoroccoMozambiqueDelegationMr. Carlos TimóteoNamibiaRussiaSao Tome and PrincipeTunisiaUkraineVenezuelaMr. Moreira da SilvaMr. Luís AlvesCentral DepartmentsContracts and LogisticsMrs. Maria António AmbrósioSafety, Quality andEnvironmentMr. Agripino FonsecaHuman Resourcesand Administrative ServicesMr. Ginja SebastiãoInformation technologyservicesMr. José GasparFinance and AccountsMr. Martins RoviscoProcurementMr. Leal da SilvaMr. Freitas CostaCorporate ServicesCorporate SecretariatConsolidation of AccountsInternal AuditCentral DepartmentsPlanning and StudiesMr. Garcia FernandesMr. Luís MenezesElectromechanical InstallationsMr. Helena GalhardasSpecial StudiesMr. Rocha LoboInfrastructure StudiesMr. João TorradoProjectsMr. Baldomiro XavierEquipmentMr. Rodrigo OuroOperating CentresGeotechnology andRehabilitationMr. Magalhães GonçalvesMr. Ivo RosaMr. Helder MatosBuildingsMr. Paulo AraújoMr. Luís MendonçaInfrastructuresMr. Sampayo RamosMr. Sousa BarrosMr. José PalmaMr. Oliveira RochaMr. Joaquim TavaresMr. Rosa SaraivaMr. Fernando FriasMechanical EngineeringMr. Paiva NunesMr. Henrique NicolauOperating Centrefor Shuttering andPrestressingMr. Marques dos SantosParticipated CompaniesE.P.O.S., S.A.Mr. Costa SimõesMr. Dias de CarvalhoSOMAFEL, S.A.OFM, S.A.Mr. Viana de LemosMr. Paiva NunesMrs. Isabel AmadorConcessions and ServicesGSC, S.A.Mr. Magalhães GonçalvesRECOLTE, S.A.Mr. Magalhães GonçalvesMr. Luís CarreiraSATU-OEIRAS, E.M., S.A.Mrs. Helena GalhardasTDGI, S.A.Mr. Rogério FonsecaTDHOSP, S.A.Mr. Matos ViegasReal EstateMr. Manuel Maria Teixeira DuarteMr. Diogo RebeloHotel ServicesMr. Manuel Maria Teixeira DuarteMr. Luís VicenteDistributionMr. Diogo RebeloMr. Manuel LopesEnergyMr. Artur CaracolAutomobileMr. Diogo RebeloMr. Silva Pereira67

Summary of IndicatorsTeixeira Duarte, S.A.Notes:The book values are expressed inmillion Euros.The figures in the "Change 2010/2009%" column were calculated based onamounts that were not rounded off.Total Equity includes non-controllinginterests.(*) Restated Values2006 2007 2008 2009 (*) 2010 Change2010/2009 %Employees 7,774 10,717 13,157 13,530 13,036 (3.7%)Sales/Services Rendered 756 1,012 1,291 1,320 1,380 4.5%Operating Income 833 1,067 1,377 1,423 1,445 1.5%EBITDA 118 113 188 213 150 (29.3%)EBITDA / Turnover Margin 16% 11% 15% 16% 11% (32.3%)EBIT 87 70 131 157 84 (46.4%)Tangible Fixed Assets + Investment Property 724 781 925 983 1,042 6.1%Investments in Associates + Assets Available for Sale + Other Investments 1,225 1,551 1,168 1,276 317 (75.2%)Total Equity 783 834 339 515 562 9.2%Net Income 114 122 (347) 116 46 (60.1%)10

Management Reportof the Board of Directors 2010

Management Report of the Board of Directors 2010I. INTRODUCTIONThe Board of Directors of Teixeira Duarte, S.A. (TD,SA), in compliance with the regulatory and legal framework for publicly traded companies,has the pleasure to present its management report for the financial year 2010.During 2010, TD,SA became the leading listed company of the TEIXEIRA DUARTE Group, and before the closing of the financial year hadacquired the ownership of 100% of the share capital of Teixeira Duarte – Engenharia e Construções, S.A. (TD-EC), which, in turn, thereafterno longer trades its shares on regulated markets.In this context, the present report will address the consolidated activity of TD,SA as leader of the Business Group comprising the universe ofholdings identified in the "Table of the Teixeira Duarte Group - 2010" presented on the preliminary pages, and will disclose only brief notes onthe Company in its individual capacity, namely with respect to the proposal for the appropriation of profit.Since each of these units has its own management bodies, which report on their individual activities, this document will provide only someobservations for the purpose of allowing for a better perspective of the Group as a whole.In this context and in order to assess the development of the activity of these companies more appropriately, note will also be made, wherejustified, of some of their individual economic and financial indicators.The most appropriate way of presenting the topics object of the present Report will be to start with a brief description of the economicbackground, followed by an overall assessment of the action of the Teixeira Duarte Group, focusing on the most significant aspects of theCorporate Centre and in a consolidated perspective.The subsequent chapters will address the Group's different activity sectors, with an analysis of the respective performance over 2010,distinguishing for each the main markets of action, in particular the Construction area which is the core business of the Group.Reference will also be made to the strategic stakes held in listed companies during 2010, that is CIMPOR – Cimentos de Portugal – SGPS, S.A.,Banco Comercial Português, S.A. and Banco Bilbao Vizcaya Argentaria, S.A..The significant events that took place between the end of the financial year and the date on which this Report was prepared will then bedescribed, followed by the outlook for 2011, currently in progress, ending with the proposal for the appropriation of profit.Attached to this document are, under the applicable legislation, the detailed report on the Company’s structure and corporate governancepractices (prepared in compliance with article 245-A of the Securities Market Code and with CMVM Regulation number 1/2007), as well asinformation relative to the stake in the share capital of TD,SA (namely in accordance with articles 447 and 448 of the Portuguese CommercialCompanies Code and CMVM Regulation number 5/2008).Moreover, this report also includes the individual and consolidated financial statements and accompanying notes, which were prepared inaccordance with the International Financial Reporting Standards as adopted by the European Union, as well as the corresponding Reportsand Opinions by the Audit Bodies, the Legal Certification of Accounts and the Audit Report prepared by an auditor registered at the CMVM.Pursuant to sub-paragraph c) of number 1 of article 245 of the Securities Market Code, the undersigned state that, to the best of theirknowledge, the Management Report, annual accounts, legal certification of accounts and other documents presenting the accounts wereprepared in accordance with applicable accounting standards, giving a true and fair view of the assets and liabilities, financial situation and12

Management Report of the Board of Directors 2010results of TD,SA and the companies included in the consolidation perimeter, as well as faithfully presenting the evolution of the businesses,performance and position of each of these entities, containing a description of the main risks and uncertainties facing them.NOTE: on the attached financial statements and indicators provided in the text of the actual management report:The financial statements of TD,SA as at 31 December 2009 include the consolidation through the full method of the assets and liabilities of theentities and holdings owned directly and indirectly by TD-EC, which are now consolidated by TD,SA.However, and since TD,SA was constituted on 30 November 2009, the consolidated income statement for that year include only the net incomeobserved during the period between the above date of constitution and 31 December of the same year.Therefore, while the consolidated statement of the financial position of TD,SA reported as at 31 December 2009 are comparable with that of2010, the consolidated statements of income, full income, changes in equity and cash flows do not include comparable data. Nevertheless,the consolidated financial statements of the Teixeira Duarte Group for the year ended on 31 December 2009 are available on the Company'swebsite (www.teixeiraduarte.pt).However, and only in the Management Report, the indicators of the consolidated financial statements of TD-EC are presented for 2009, restatedin accordance with IFRIC 12, solely for the purpose of comparison with the consolidated financial statements of TD,SA for 2010, thusallowing for an assessment of the evolution and performance of the Teixeira Duarte Group.II. ECONOMIC ENVIRONMENTDuring the year, the national economy lived under the threat of a sharp reduction in GDP, with most economic indicators confirming thecontinuation of the recession.By contrast, and in spite of the international crisis, the truth is that good performance has been recorded in the foreign markets where theTeixeira Duarte Group companies operate, as was the case in Angola, Algeria, Brazil and Mozambique, which are considered strategic marketsfor development abroad.III. GENERAL OVERVIEW- FINANCIAL OVERVIEW:In compliance with the legal provisions, the consolidated financial statements are prepared in accordance with the International ReportingStandards (IAS/IFRS).TD,SA was constituted on 30 November 2009, but was only listed on the stock market in August 2010 and it was only in December 2010 thatTD,SA acquired 100% of the share capital social of TD-EC, replacing this entity as the leading listed company of the TEIXEIRA DUARTE Group.13

Management Report of the Board of Directors 2010Consolidated Income Statementfor the years ended on 31December 2010 and 2009(Values in thousand Euros)2010 2009 Var (%)(TD, SA) (TD-EC)Operation income 1,445,418 1,423,385 1.5%Operating costs 1,295,169 1,210,829 7.0%EBITDA 150,249 212,556 (29.3%)Amortisation and depreciation 59,025 55,369 6.6%Provisions 7,346 628 1069.7%EBIT 83,878 156,559 (46.4%)Financial profit or loss (17,680) (5,368) -Pre-tax profit 66,198 151,191 (56.2%)Income tax 26,820 36,562 (26.6%)Net profit 39,378 114,629 (65.6%)Attributable to:Shareholders 46,392 116,284 (60.1%)Non-controlling interests (7,014) (1,655) -The Consolidated Net Income Attributable to theShareholders was positive by EUR 46,392 thousand.This indicator was influenced by the incorporation ofthe capital gains resulting from the sale of the stakein CIMPOR – Cimentos de Portugal, SGPS, S.A. to theamount of EUR 71,183 thousand, and the appropriationof the net income of this subsidiary up to the date of itsdisposal, to the amount of EUR 9,237 thousand, as wellas by the recording of an impairment loss in the stakeheld by Banco Comercial Português, S.A., with an impacton net income of EUR 64,146 thousand.1,291,073 1,320,4741,379,628755,8591,011,513Turnover grew by 4.5% compared with 2009, havingreached EUR 1,379,628 thousand.Evolution of ConsolidatedTurnover(Values in thousand Euros)2006 2007 2008 2009 2010Evolution of Turnover by Markets(Values in thousand Euros)785,312786,995The positive variation was essentially due to the increasesrecorded in some sectors of Portugal and the maintenanceof values similar to 2009 in the external market, whichnow represents 57% of the total of the Teixeira DuarteGroup.535,162592,6332009 2010External MarketInternal Market14

Management Report of the Board of Directors 2010The table below reflects the penalisation in most of the markets in which the Group operates, arising from the current scenario of crisis, withthe exception of the growth observed in the markets of Portugal, Brazil and Venezuela.Countries TD Group Contribution T D G r o u pContribution2010 (%) 2009 (%)Portugal 592,633 43,0% 535,162 40.5%Angola 449,239 32,6% 495,759 37.5%Algeria 73,031 5,3% 101,655 7.7%Brazil 162,706 11,8% 78,212 5.9%Spain 25,089 1,8% 29,092 2.2%Morocco 3,328 0,2% 6,822 0.5%Mozambique 53,380 3,9% 53,424 4.0%Ukraine 10,556 0,8% 11,326 0.9%Venezuela 6,720 0,5% 5,254 0.4%Other 2,946 0,2% 3,768 0.3%1,379,628 100,0% 1,320,474 100.0%Evolution of Turnoverby Country(Values in thousand Euros)Consolidated operating income increased by 1.5%compared with 2009, reaching the value of EUR 1,445,418thousand for the year ended on 31 December 2010.1,066,7271,377,1811,423,385 1,445,418Evolution of ConsolidatedOperating IncomeCements, Concrete and Aggregates were negatively affectedby the overall economic circumstances in some geographicalmarkets where C+P.A., S.A. operates, namely Ukraine.832,858(Values in thousand Euros)The Automobile sector of Teixeira Duarte recorded a decreasein turnover as a result of the market conditions.Even so, these more significant reductions were compensatedby the good performance achieved in Concessions and Servicesand in Energy, as well as by the increase of this indicator in theDistribution sector.2006 2007 2008 2009 2010Activity Sector Internal Market External Market Total2010 2009 Var (%) 2010 2009 Var (%) 2010 2009 Var (%)Construction 381,664 373,892 2.1% 409,115 412,758 (0.9%) 790,779 786,650 0.5%Cement. Concrete and Aggregates - - - 13,577 17,706 (23.3%) 13,577 17,706 (23.3%)Concessions and Services 24,122 18,390 31.2% 32,154 26,109 23.2% 56,276 44,499 26.5%Real Estate 65,506 94,889 (31.0%) 75,937 48,419 56.8% 141,443 143,308 (1.3%)Hotel Services 16,253 15,061 7.9% 65,383 70,016 (6.6%) 81,636 85,077 (4.0%)Distribution 1,166 654 78.3% 120,959 115,513 4.7% 122,125 116,167 5.1%Energy 128,906 103,031 25.1% 19 18 5.6% 128,925 103,049 25.1%Automobile 81 1,477 (94.5%) 110,576 125,452 (11.9%) 110,657 126,929 (12.8%)Total 617,698 607,394 1.7% 827,720 815,991 1.4% 1,445,418 1,423,385 1.5%Operating Income by ActivitySector and Geographical Market(Values in thousand Euros)15

Management Report of the Board of Directors 2010Energy9%Automobile8%In this way, the contribution of each activity sector to the totalvalue of consolidated operating income was as follows:Distribution8%Construction55%Contribution of each ActivitySector(Values in thousand Euros)Hotel services5%Real estate10%Concessions and Services4%Cement, Concreteand Aggregates1%187,842212,556117,867 113,051150,249EBITDA fell by 29.3% in relation to the previous year to standat EUR 150,249 thousand.Evolution of Consolidated EBITDA(Values in thousand Euros)2006 2007 2008 2009 2010Evolution of EBITDA by Activity(Values in thousand Euros)Activity Sector 2010 2009 Var (%)(TD. SA) (TD-EC)Construction 65,918 67,559 (2.4%)Cement. Concrete and Aggregates (7,416) 1,312 -Concessions and Services 11,753 7,978 47.3%Real Estate 62,453 80,498 (22.4%)Hotel Services 23,414 38,287 (38.8%)Distribution 7,814 7,737 1.0%Energy 7,943 7,846 1.2%Automobile (2,317) 14,333 -Not allocated to segments (17,745) (13,895) -Eliminations (1,568) 901 -150,249 212,556 (29.3%)Analysing this indicator by sector of activity, the table belowshows very divergent performance amongst the thesebusiness areas according to the specific characteristics of eachand the respective markets in which they operate.16

Management Report of the Board of Directors 2010The EBITDA / Turnover Margin decreased by 32.2% inrelation to December 2009, moving from 16.1% to 10.9%as at December 2010.15.6%14.5%16.1%11.2%10.9%2006 2007 2008 2009 2010Evolution of the EBITDA /Consolidated Turnover Margin(Values in thousand Euros)The financial results were negative by EUR 17,680 thousand, compared with the negative results of EUR 5,368 thousand in the previousyear.It is particularly significant that the reduction of the total debt and average interest rate level led to a decrease in financial charges of 21.3%compared with the same period of the previous year.In this regard, it should also be noted that the appropriation of the net income of the holding in CIMPOR – Cimentos de Portugal, SGPS, S.A.(estimated up to the date of its disposal) and the respective sale contributed positively to the financial results (Net income relative to associatedcompanies) by EUR 80,420 thousand. This indicator was also influenced, to the value of EUR 14,994 thousand, by the positive exchange rateeffect of the appreciation of the Currencies with which the Group operates relative to the Euro, as well as by the recording of an impairmentloss (Gains/losses in the measurement of assets available for sale) in the stake held in Banco Comercial Português, S.A., to the value ofEUR 73,599 thousand.Income Tax for the year ended on 31 December 2010, reached the value of EUR 26,820 thousand, compared with the EUR 36,562 thousandreached in 2009.3,222,510 3,177,7303,512,471Total Net Assets decreased by 22.5% in relation to 31December 2009, having reached EUR 2,721,252 thousand.This reduction was essentially due to the disposal of thestake held in CIMPOR - Cimentos de Portugal, SGPS, S.A.2,733,9862,721,252Evolution of Net Assets(Values in thousand Euros)2006 2007 2008 2009 201017

Management Report of the Board of Directors 2010Evolution of Consolidated Net Debt(Values in thousand Euros)1,316,8921,677,8181,851,9021,992,7411,066,789The total net Debt of the Group decreased by 46.5% inrelation to the end of 2009, corresponding to a reduction ofEUR 925,952 thousand, to stand at EUR 1,066,789 thousand,with this amount being particularly adjusted to the currenteconomic environment.2006 2007 2008 2009 2010Evolution of Total Equity(Values in thousand Euros)782,806834,385514,637562,006Total Equity decreased by 9.2% in relation to 31 December2009, having reached EUR 562,006 thousand.338,7622006 2007 2008 2009 2010Evolution of Financial Autonomy(Values in thousand Euros)28.6%25.9%10.7%14.7%20.7%Financial Autonomy increased from 14.7% as at 31December 2009 to 20.7% by the end of 2010, havingincreased by 41%.2006 2007 2008 2009 2010The Company's objectives and policies with respect to financial risks are described in Note 42 of the Notes to the ConsolidatedFinancial Statements.Although there were no alterations to the consolidation perimeter during 2010, the following operations took place with entitiesof the Teixeira Duarte group during the year:- Extinction of TDCIM-SGPS, S.A. through its incorporation into another sub-holding of the Teixeira Duarte Group, TEDAL-Sociedade Gestorade Participações Sociais, S.A.;18

Management Report of the Board of Directors 2010- Extinction of the Macau Delegation of Teixeira Duarte – Engenharia e Construções, S.A.;- Extinction of PETROSÓRIO – Combustíveis e Lubrificantes, S.A., through dissolution;- Extinction of TCM – Transportes Centrais de Matosinhos, Lda., through dissolution;- Disposal of the holding in CONSTRULINK – Tecnologias de Informação, S.A..- ORGANISATIONAL OVERVIEW:Notwithstanding a more detailed description of this matter in the attached "Corporate Governance Report", it is important to note at this point,with respect to the performance of the Teixeira Duarte Group in the different business sectors and markets, the close collaboration betweenall the structures, identified in the beginning of this Report, as well as the added value arising from these synergies, which are reflected in theprivileged and efficient means of achieving collectively undertaken objectives.Particular note should be made, on the one hand, of the existence, in the context of the Group, of Central Departments with specialresponsibilities of transversal support to the actions developed in the different activity sectors, integrated in the Corporate Centre, entrustedwith promoting a standardisation of procedures and providing support to the structures operating abroad in these areas common to variousbusinesses.The Group's Operating Structures are organised by Activity Sector and tend to cover responsibility for all the teams and operations of thesebusiness areas, independently of the geographical market in which they operate, thus also acting to draw the technical and human centralresources of the Group closer to those operating in the different markets of the Teixeira Duarte Group.Even so, it should be noted that occasionally some companies integrated in the Group, in view of the particularity of their business, maintaintheir respective specificity, especially in the Construction and, Concessions and Services sectors.Teixeira Duarte – Engenharia e Construções, S.A., as the leading company of the Group in the Construction sector, develops its activitythrough Operating Centres, which divide up the production areas and are essential in the training of the senior management and in thefollow-up of their career, as well as through a series of Central Departments with specific scope of action in terms of specialised support tothe Operating Centres, in particular in the areas of Studies, Projects and Equipment.Regarding its human resources policy, Teixeira Duartefollows strict action in relation to the adequacy of thenumber of employees to the activity developed in thedifferent sectors and markets. At the end of this year therewas a reduction of 5.6% in the total number of employeescompared with 31 December 2009, which decreased from13,092 to 12,360.7,77410,71713,157 13,53013,036Evolution of the AverageNumber of EmployeesThis reduction results, essentially, from the decreaseobserved in the Construction sector in Angola and Algeria.The average number of employees of the Teixeira DuarteGroup maintained the trend of contention recorded since2008, having fallen to 13,036.2006 2007 2008 2009 201019

Management Report of the Board of Directors 2010During the year under analysis, the processes were continued for obtaining, monitoring or renewing Management System certificationsof the different companies of the Group, in the fields of Safety, Quality, Environment, Social Responsibility and Research, Development andInnovation.In this context, it is appropriate to mention the objective of the Teixeira Duarte Group in pursuing the development of the concept of Sustainability,which, on the one hand, implies the 32.99 of the different aspects of procedures and their systematisation throughout the various structurescomprising the entities of the Group and, on the other hand, will enable the Teixeira Duarte Group to have its own sustainability report, constitutingan instrument recognised in the market and certifying respect for the sustainability criteria as well as the future commitments undertaken in thisarea.The Central IT Department has optimised the Information Systems, achieving notable improvements in the more efficient use of thepotential of the SAP platform, extending its use to new companies, some of which are situated in new geographical areas and different marketsegments, with the objective of achieving the overall coverage of the Group's businesses.Technical conditions were created for the remote use of the existing platforms, enabling further adaptability of the resource use and improvedproductivity through the use of the synergies of operation.Focus was maintained on the security of the systems and the monitoring effort was intensified, with the objective of minimising operatingrisks and ensuring a high level of availability.Particular attention was given to the resizing and renewal of the existing communication networks, with the final decision having beenmade to implement a unified voice and data network, capable of ensuring greater flexibility, security and maintenance simplicity. Theimplementation process will take place next year.The Corporate Portal showed an notable evolution with the addition of new functionalities and applications, contributing to greater fluidity inthe circulation of information, and progressively becoming a collaborative work platform, able to contribute effectively, amongst others, to theminimisation of the impact of geographical barriers.- CORPORATE OVERVIEW:In the area of compliance with all the corporate obligations, namely as an entity issuing tradable securities on regulated markets, note shouldbe made of the public disclosure of a great variety of information by TD,SA in 2010.- Alterations to the Board of Directors:The Board of Directors of TD,SA, initially composed of 8 members, is currently composed of only seven members, following the resignationfrom the position of Director presented by Mr. João Salvador dos Santos Matias, on 23 February 2010, due to completing the age of 65, andwho is now a member of the group of Coordinators/Consultants, formed by employees who have provided many years of good serviceto the Group.- Corporate Restructuring:Note should be made of the development of the Group's corporate restructuring process, started on 17 December 2009, the main objectives ofwhich are the essential concentration of TD-EC in its core business activity, that is, the exercise of the civil construction and public works industry,in all its areas and related activities, and its replacement by TD,SA as the leading listed company of the Group.20

Management Report of the Board of Directors 2010Hence, and after the first prior concentration - at the end of 2009 - of 68.54% of the share capital of TD-EC in TD,SA, there was an publictakeover bid, in the form of a public exchange offer for the entirety of the remaining share capital of TD-EC, which was held between 19 Julyand 6 August 2010.Following this acquisition, TD,SA increased the share capital to EUR 406,360,199, becoming the owner of 96.75% of the share capital of TD-EC.After the conclusion of the above operation, the shares of TD,SA were listed for trading on the regulated market of Euronext Lisbon as of 16August, and on 21 September 2010 the shares of TD-EC were excluded from trading on that market, following the application for the loss ofits status as a public company and their respective granting by the CMVM and Euronext Lisbon on this matter.From then on, TD,SA replaced TD-EC as the leading listed company of the Teixeira Duarte Group.Subsequently and with a view to the acquisition of the remaining shares of TD-EC that had not been acquired under the prior concentrationand/or public exchange offer, on 26 November 2011 TD,SA presented an acquisition offer aimed at the total control of TD-EC, under the termsestablished in article 490 of the Commercial Companies Code, composed of the exchange of one TD,SA share for every TD-EC share delivered.Once this phase of the use of the potestative acquisition mechanism had finalised, TD,SA thus became the owner of 100% of the share capitalof TD-EC, that is, of all the 420,000,000 shares representing its share capital.Subsequently, on 23 December 2010, TD,SA deliberated the increase of its share capital of EUR 406,360,199 to EUR 420,000,000.Therefore, and to summarise:a) TD,SA acquired 100% of the share capital of TD-EC and replaced this entity as the leading listed Company of the Teixeira Duarte Group;b) TD,SA currently has a share capital of EUR 420,000,000 represented by 420,000,000 shares with the nominal value of EUR 1.00 each, allof which are tradable on the regulated market of Euronext Lisbon.- General Meetings of Shareholders:The General Meeting was held four times during 2010.The Annual General Meeting of 27 May was suspended regarding the second point on the agenda - deliberation on the proposal for theappropriation of profit -, due to the commitment to the objective of distributing dividends also to the shareholders of TD-EC which, under thePublic Exchange Offer, would participate in the operation, by exchanging their shares for TD,SA shares and at that time this process for the PublicExchange Offer was still in progress.Therefore, the General Meeting was resumed on 26 July, when the work relative to this point on the agenda were once again suspended,because the said process for the Public Exchange Offer had not yet been concluded. The work on this matter was then resumed on 6 September,on which date the above proposal was approved by all the shareholders.The General Meeting was held again on 23 December 2010, when the deliberations approved the proposals related to the increase of the sharecapital of TD,SA of EUR 406,360,199 to EUR 420,000,000, altered the Articles of Association to ensure their conformity with the new legislativeframework relative to companies listed for trading on regulated markets, and maintained the total control of TD-EC.- Payment of Dividends:As a consequence of the abovementioned deliberations taken at the General Meeting regarding the appropriation of the profit relative to the financialyear 2009, as of 23 September 2010 the dividend was paid corresponding to one Euro cent for each share representing the share capital of TD,SA.21

Management Report of the Board of Directors 2010- The shares of Teixeira Duarte, S.A.:As explained above, the shares of TD,SA were listed for trading on 16 August 2010.From their entry into trading until 31 December 2010, the shares devalued by 30.47%, falling from EUR 1.05 on 16 August 2010 to EUR 0.73as at 31 December 2010.Regarding liquidity and turnover, during this period, 13,162,403 shares were traded on the stock market, with a total turnover of EUR10,935,589.The graph below shows the evolution of the share prices since their listing for trading on the regulated market of Euronext Lisbon.1.05€Teixeira Duarte, S.A. Share Prices0.99€0.91€0.92€0.91€0.87€10.84€0.79€20.73€0.67€16-8-201031-8-201015-9-201030-9-201015-10-201029-10-201115-11-201030-11-201015-12-201031-12-20101 – Announcement of payment of dividends relative to 2009 - 23 September 20102 – Information on the activity, results and economic and financial situation in the 3rd Quarter 2010 - 25 November 2010As at 31 December 2010, the share price was EUR 0.73 and, today, 28 April 2011 it is EUR 0.53.IV. SECTOR ANALYSISThe first part of each sector will provide a brief overview of how and where the Group operates in that specific business area, followed byan overview of the sectors in 2010, based on a set of indicators on the respective contributions to the overall indicators of the Group, andreference is made to the operating income on a non-consolidated basis to allow for a better understanding of the levels achieved by eachsector individually.Then, for the actual reporting of the activity, brief notes are presented on the operation in the main geographical markets of each sector of theTEIXEIRA DUARTE Group.22

Management Report of the Board of Directors 2010City Hall of Serpa - Works forthe rehabilitation of facilities for"Musibéria - Centro de Música"ESCOM - Works for the retainingwalls, general excavation and soilconsolidation inEdifícios GES 2, 3 and 4 - Luandato develop its strong and traditional technical areas of expertise, namely through the Inspection and Diagnosis of Structures and throughResearch, Development and Innovation.Particular note should be made, in this area of rehabilitation, of the conclusion of the works of "Musibéria - Centro de Música" for the City Hallof Serpa, as well as the conservation and structural rehabilitation works of "Convento de São Francisco" for the City Hall of Coimbra.For EP-Estradas de Portugal, S.A., note should be made of the rehabilitation works and reinforcement of Foz Bridge over the River Sousa, inthe municipality of Gondomar, as well as the beginning of various contracts for the rehabilitation of engineering structures, namely a series ofbridges on the IP3 over the reservoir of Aguieira Dam.In Angola the geotechnical and foundation production, especially as a result of the conclusion of the participation of this area in the works ofthe Bridge over the River Kwanza. However, it is important to mention the execution of the foundations, through piling, in the contract workfor the National Assembly of Angola, as well as the conclusion of the works for the retaining walls, general excavation and soil consolidation in"Edifícios GES 2,3 and 4" for ESCOM and the beginning of the execution of speciality works in the Rehabilitation of the "Pier of the CommercialPort of Luanda".Brazil is a market undergoing expansion, where Teixeira Duarte believes that it can make the best of the synergies of its local structurescombined with the knowledge and experience of the Group in this specific area of Construction.In Spain, in the geotechnical and foundation area, note should be made of the conclusion of the foundation work through piling of "Metrode Granada" for Ferrovial-Agroman, as well as the execution of the retaining walls, of great thickness, in the work "Tuneles Norte SE40" inSeville, for the UTE formed by the companies Sando-OHL-Azvi. The construction of the retaining walls was also started, through a diaphragmwall of great thickness, in the contract work for the Spanish high speed (AVE) line of Barcelona-Frontera Francesa, in Montmeló, for Ferrovial-Agroman, S.A..25

Management Report of the Board of Directors 2010São João Hospital - Construction offloors 3, 4 and 5 eastwardsPortoIMOFARMA - Porto Business andTechnological ComplexIn Mozambique, the recognition by the local market of the implementation capacity of Teixeira Duarte has led to the award and beginning ofimportant construction works, which has been reflected immediately in the action of this geotechnical and foundations area, as well as in therehabilitation area, with this latter involved in major works concerning the bridges of Tete and the Island of Mozambique.In the Buildings area, the Group operates through the operating centre of TD-EC, as well as through other companies which also operatein markets abroad.In spite of the extremely strong decline of this activity area in Portugal, Teixeira Duarte maintains similar levels of production, essentially as aresult of its exposure to markets undergoing growth such as the Angola, Brazilian and Mozambican.Therefore, in Portugal special note should be made of the school and hospital construction work, as well as the conclusion of buildingsintegrated in real estate projects of the actual Teixeira Duarte Group.This applies to the rehabilitation and expansion work of the Alberto Sampaio Secondary School in Braga, the Camilo Castelo Branco SecondarySchool in Famalicão and the Águas Santas Secondary School in Maia, as well as the finishing and special facilities for the future Lisbon Hotel Schooland the Restoration and Rehabilitation works, phase I, in Palácio Valadares in Lisbon, all regarding education establishments.In the hospital area, mention should be made of the conclusion of various contract works for São João Hospital in Porto, as well as the conclusionof Cascais Hospital.For IMOFARMA, the construction of the Business and Technological Complex of Porto, representing major construction work, of greatcomplexity and with a short implementation period.26

Management Report of the Board of Directors 2010National Reconstruction BureauHead office building of the NationalAssembly of Angola - LuandaFamily Santana undertaking, SãoPaulo - BrazilIn Angola, the activity increased slightly, where note should be made of the construction of various bank branches, the head office buildingof CABGOC, corresponding to major and demanding construction work, the conclusion of the 1st phase of the São Francisco de Assis Collegein Talatona for a company of the Teixeira Duarte Group, as well as the conclusion of the premises for the National Road and Traffic Departmentin Luanda for the National Reconstruction Bureau and the Secure Information Technology Centre of EMIS (Empresa Interbancária de Serviços).For ESCOM, Teixeira Duarte continued the contract work in progress and started the structure and finishing of three very large buildings,namely in terms of height, and started the construction of the head office building of the National Assembly of Angola, for the NationalReconstruction Bureau, a construction work of great impact and which is progressing at a good rate.In Brazil, in this area, the Group operated through the local subsidiary EMPA, S/A in the management of important construction works for realestate developers integrated in the Teixeira Duarte Group in São Paulo, in particular Family Santana, composed of four hundred apartments infour tower blocks of twenty-five floors, as well as Quartier, composed of two tower blocks with two hundred apartments.Since this is a market with so many opportunities, the Group believes there is potential for its major growth in this area, which stimulatesTeixeira Duarte to pursue increasing its size so as to be able to meet new challenges.In Spain, the Group accompanies the strong fall in activity which has been experienced in this market, however, even so, particular note shouldbe made, amongst other contract works, of the beginning of the construction of a building in Calle Amália, in Madrid, for the Group's realestate sector.In Mozambique, Teixeira Duarte maintains a very active profile on the market, which has enabled its income to have increased, pursuing itsaction amongst multiple public and private entities, in particular the conclusion of the head office of the Ministries of Labour, Civil Service,Tourism and Youth and sports for BCI, as well as the continued execution of the Polytechnic Institute for Agricultural Science of Lionde, for theMinistry of Education and Culture.27

Management Report of the Board of Directors 2010BCI - Head office buildings of theMinistries of labour, Civil Service,Tourism and Youth and SportsMozambiqueDouro Litoral MotorwayIn 2010 various education establishments were also concluded, not only in the city of Tete, but also in other locations of this province, for theMinistry of Education and Culture.The reconstruction of the premises in the Fishing Port of Beira were continued for the Ministry of Fisheries, as well as the 2nd phases of theFaculty of Science and the central office building of Eduardo Mondlane University, and the transformation of the Health Centre into the DistrictHospital of Manhiça for the Ministry of Health.Teixeira Duarte also worked on the construction of security infrastructures for KUDUMBA Investimentos in Nacala, Matola and Beira, theconstruction of Catedral de Fé for the IURD, the execution of the structure of two buildings for commercial, office and residential purposes forIMOINVESTE, Lda.In 2010 work was also started on the expansion of Armazéns do Ferromoçambique in Maputo, as well as the rehabilitation of the Maxaquemepavilion in Maputo for the Organising Committee of the X All-Africa Games.In the area of Infrastructures, the Group operates through the operating centre of TD-EC, as well as through other companies which alsooperate in markets abroad.In 2010, the income obtained by the Group in this area increased strongly, reflecting the higher level of activity in Portugal and Brazil.On the national market, this growth was essentially the result of the construction of the Douro Litoral motorway, in particular the executionworks of the metropolitan railway station of Reboleira, the Baixo Tejo motorway, the flood spillway of Paradela Dam, the Cais do Sodré/Alcântara28

Management Report of the Board of Directors 2010REFER - Railway Bridge over RiverSado - Alcácer do SalEPOS - Marão Tunneltidal lock system and the conclusion of the railway bridge over the River Sado at Alcácer do Sal.In Angola, mention should be made of the conclusion of the New Bridge over the River Kwanza.In Algeria, in spite of the continuation of works in various fronts, the income of Teixeira Duarte decreased although it is important to notethe continuation of the 2ème Rocade Autoroutière d’Alger Sud, a stretch of the line and stations of the Algiers metropolitan railway and themodernisation of the Thenia/Tizi-Ouzou railway line and its electrification until Oued Aissi (50+14 km).In Brazil, there was an increase of the activity in this area of infrastructures, in particular regarding the construction of three PCH (smallhydroelectric plants) in the State of Rio de Janeiro, as well as various road works.In Mozambique, Teixeira Duarte achieved a good level of activity, essentially with the execution of the contract work for the Rehabilitation ofSamora Machel Bridge over the River Zambeze in Tete and the Bridge and Jetty of the Island of Mozambique.In Venezuela, efforts were pursued with a view to the execution of major contract works which will enable the direct action of TD-EC in thiscountry, where the Group has also operated through the local subsidiary TEGAVEN, CA for over 30 years.In the area of underground works in Portugal, the subsidiary E.P.O.S. – Empresa Portuguesa de Obras Subterrâneas, S.A., 100% ownedby the Teixeira Duarte Group increased its activity, in particular regarding the development works for the mining infrastructure of Neves Corvo,participation in underground works for the Douro Litoral concession and for Reboleira metropolitan railway station in Lisbon, various contractworks in Madeira and an important subcontract work for the construction of part of Marão Tunnel.29

Management Report of the Board of Directors 2010Somafel - Maintenance ofthe Western railway lineOFM - Jardim do Tabaco Cruiser Pierin Lisbon PortFor the Railway Works, the 60% owned subsidiary SOMAFEL - Engenharia e Obras Ferroviárias, S.A. recorded strong growth in two of themain markets in which it operates, the Portuguese and Algerian, continued the works in Morocco and, through a subsidiary in Brazil, beganits commercial operation in this growing market.In Portugal, note should be made of its participation in the execution of the railway link to Aveiro Port and the railway bridge over theRiver Sado in Alcácer do Sal, as well as the execution of the renewal of the track on the Northern Line and maintenance of the railwaytrack on the Beira Alta, Western and Northern lines.In Algeria, work was pursued in the renewal and modernisation of the Biskra/Tougourt and Thenia/Tizi Ouzou lines, while in Morocco theexecution of the works continued for the renewal and improvement of the line serving the cities of Rabat and Casablanca.Regarding maritime works, OFM - Obras Públicas, Ferroviárias e Marítimas, S.A., 60% owned indirectly by the Teixeira Duarte Grouprecorded a strong reduction in the activity levels of its markets of operation, the Portuguese and Algerian, but began its operation in Cape Verdewith the expansion work of the New Port in the Island of Santo Antão.In Portugal, this year, note should be made of the works carried out in the breakwater pier of Ericeira Port and in Jardim do Tabaco cruiserpier in Lisbon Port and, in Algeria, the execution of various public and private works, namely those carried out in Bejaia Commercial Port andMers-el-kibir Naval Base.30

Management Report of the Board of Directors 2010ANGOCIMEÚcua Quarry - AngolaCement FactoryOdessa - UkraineIV.2. CEMENT, CONCRETE AND AGGREGATESThis sector has been individualised in the Teixeira Duarte Group since 2004, and is currently being developed through a group of companiesoperating abroad, two of which operate in Angola and the rest are integrated in C+P.A. – Cimento e Produtos Associados, S.A., a company52% owned by the Teixeira Duarte Group, with the remaining 48% belonging to the CIMPOR Group.In Angola the 00% controlled companies ANGOCIME and BETANGOLA operate in the area of the commercial exploitation of aggregates and the manufactureand marketing of ready-mix concrete, as well as the operation of a crushing plant, essentially to support the Group's construction activity in this country.In Ukraine, the locally registered company CEMENT, Ltd., 100% owned by C+P.A., S.A., operates the cement factory owned by it at Odessa.In Namibia, the subsidiary of C+PA, S.A., through the local company Karibib Portland Cement, Limited, has a project for the installation ofa clinker production plant in the city of Karibib, for the purpose of producing cement, the reason for which it holds a mining license and anenvironmental license.C+P.A, S.A. also owns non-controlling holdings in companies in Spain and China, namely:a) A stake of 48.57% of the share capital of ARENOR, S.L., based in Seville, which operates in the concrete and aggregates sector inSpain and which in turn also has stakes in several local and overseas companies;b) 25% of the company based in Macau, under the corporate name of Sociedade de Investimento CIMPOR MACAU, S.A. continues associatedto its shareholder CIMPOR, S.A. and to the local partners of Teixeira Duarte, for the development of activities in the strategic market of thePopular Republic of China, where this company of Macau is the indirect owner of holdings in various other companies operating in thiscement sector in China.31

Management Report of the Board of Directors 2010- OVERVIEW OF THIS SECTOR DURING 2010:33,080Evolution of Turnover of Cement,Concrete and Aggregates(Values in thousand Euros)16,84513,176Consolidated Turnover in the Cement, Concrete and Aggregatessector was EUR 13,176 thousand, reflecting a reduction of21.8%, as a result of the renewed fall in demand in Ukraine,where Teixeira Duarte has its most important productionunit, and as a consequence of the alteration of the activitiesof the subsidiaries in Angola, which, in spite of the increaseof activity, reduced their contribution to the consolidatedturnover by working essentially for TD-EC.2008 2009 20107,279Evolution of EBITDA of Cement,Concrete and Aggregates(Values in thousand Euros)1,312As a result of the considerable reduction in turnover, theassociated fixed cost structure and the revaluation of variousassets in view of the discontinuation of investment projects,EBITDA were greatly penalised.(7,416)2008 2009 2010In non-consolidated terms and in order to provide an overall view of the total activity during 2010, we disclose that the operating income ofthe companies of the Group which operate in the Cement, Concrete and Aggregates sector reached the total value of EUR 45,334 thousand,reported exclusively relative to activities developed abroad, representing an increase of 24% compared with 2009.Regarding the development of the activity, below are brief notes on the production units operating in the markets of China and Ukraine.- CHINAIn China, the local companies developed various projects to expand their installed capacity, which is currently at 5,270 tons/year, with theirown clinker, corresponding to an increase of 93.4% in relation to 2009.In this context, note should be made of the following facts relative to 2010:- Finalisation of the construction of the Zaozhuang factory and Huaian mill;32

Management Report of the Board of Directors 2010- Total sale of cement and clinker increased by 13.7% in relation to 2009, having reached 4.105 million tons;- Turnover, grew by 30.8%, to stand at EUR 106.1 thousand;- EBITDA reached the value of EUR 8,900 thousand, corresponding to an increase of 87.7%.- UKRAINEThe crisis continued to be felt in the cement market of Ukraine where there were still no signs of recovery, but to the contrary an additional fallof 0.7% of volume, with a decrease in average sales prices of 8.3%.In this context, the turnover of this subsidiary decreased by 6.8% during the year under review, to stand at EUR 10,556 thousand.During 2010 the new premises of the coal mill were started which implied the replacement of the use of gas as the main fuel, enabling areduction in the fuel cost in clinker of 28.9% and consequently in the cost of the cement.Also noteworthy was the continued improvement in the efficiency of this unit in the Ukrainian cement industry in terms of labour productivity(tons of cement/worker), the use of electricity (kwh/tons of cement) and heat energy (kcal/kg of clinker).IV.3. CONCESSIONS AND SERVICESThe Teixeira Duarte Group began to operate in this area in 1984, in Macau, through a holding in CPM - Companhia de Parques de Macau, S.A. whichit still owns and to which it has added, over these twenty five years, others in Portugal, Angola, Brazil, Spain and Mozambique.Currently, the companies of the Group focus on business areas of different nature, in particular in technology, real estate management, theenvironment, transport and concessions, namely road.In this sector, Teixeira Duarte also holds several non-controlling interests in other companies whose management is not conducted by theGroup’s structures and which, in almost all cases, are not included in its consolidation perimeter. Some notes are also presented at the end ofthis chapter on the most important ones.- OVERVIEW OF THIS SECTOR DURING 2010:55,93442,139Evolution of Turnover ofConcessions and ServicesConsolidated Turnover in the Concessions and Services sectorcontinued to increase at a good rate in Portugal, Angola andSpain, having reached EUR 55,934 thousand, reflecting anincrease of 32.7% compared to the total figures recorded asat 31 December 2009.33,664(Values in thousand Euros)2008 2009 201033

Management Report of the Board of Directors 2010TDGI - Service Contract for CascaisHospitalTDGI - Service Contract - PhillipsShowroomLagoas Park11,753Evolution of EBITDA ofConcessions and Services6,2527,978EBITDA increased by 47.3%, which is considered verysignificant in view of the evolution in Turnover, with thisresult essentially being due to the good performance of thesubsidiaries TDGI, S.A., RECOLTE, S.A. and TDHOSP, S.A. inPortugal.(Values in thousand Euros)2008 2009 2010In non-consolidated terms and in order to provide a perspective over the total activity, in the first semester of 2010 the operating income ofthe companies of the Group which operate in the Concessions and Services sector increased strongly by 31% and reached the total value ofEUR 79,150 thousand, with 51% being the outcome of activity developed in the external market and 49% in Portugal.In view of the diversity of the Group's business in this sector, the review of the activity will be presented by company.TDGI - Tecnologia de Gestão de Imóveis, S.A. is a company 100% owned by the Teixeira Duarte Group which focuses on the managementand technical maintenance of facilities and undertakings, operating in the areas of (i) Analysis and Diagnosis; (ii) Studies and Special Projects;(iii) Facilities Management (iv) Maintenance; and (v) Remodeling Works.34

Management Report of the Board of Directors 2010GSC - Go-Fit Gym MaintenanceContract - CórdobaSpainGSC - Urban Solid Waste Collectionof Mancomunidad de Concellos doMorrazo - SpainIn spite of the unfavourable economic environment experienced in 2010, TDGI showed a very positive performance, with its operating incomehaving reached EUR 17,398 thousand, corresponding to an increase of 50%, which is even more impressive considering that the previous yearthis subsidiary had already increased its value by 22%.Particular note should also be made of the excellent performance of the provision of services under the contract relative to Cascais Hospital,for which the group of entities involved have been distinguished and has also deserved their recognition by the users of this infrastructure.TDGI - Tecnologia de Gestão de Imóveis, Lda (Angola) is a company 100% owned by the Teixeira Duarte Group and, just like TDGI inPortugal, is dedicated to the management and technical maintenance of buildings and undertakings.In spite of the complexity and strong competitiveness of the market in Angola, TDGI’s knowledge of this market and its increasing implantationhas enabled reaching an operating income of EUR 9,711 thousand, corresponding to an increase of 36% of this indicator.TDGI - Tecnologia e Gestão de Imóveis, Lda. (Mozambique) is 100% controlled by the Teixeira Duarte Group and is a replica in thiscountry of similar companies referred to above in Portugal and Angola, which recorded an operating income of EUR 575 thousand in 2010,reflecting a decrease of 19% in relation to 2009.This company continues to carry out the maintenance of the "Polana Shopping Centre" in the city of Maputo and has collaborated with severalother entities, in particular, outside of the Group, Companhia Vale Rio Doce Moçambique.GSC - Compañia General de Servicios y Construcciones, S.A. is a company based in Madrid, 100% owned by Teixeira Duarte andwhich provides services in Portugal and Spain related to the Environment, namely in the market of waste, street cleaning, gardens, beachcleaning, coastal rescue and relief, as well as various activities in the context of Management and Maintenance of Buildings and Urban Spaces.35

Management Report of the Board of Directors 2010RECOLTE - Contract for theMaintenance of Gardens and GreenAreas - TagusparkINVICTAAMBIENTE - ConcessionContract with the City Hall of PortoThrough its Branch in Portugal, this company specialises in the provision of services, particularly in the environmental area, in association withanother subsidiary of the Group RECOLTE, S.A..In Spain, GSC's Management and Maintenance department increased its turnover by 7% through the increase of contracts with private customers,amongst which in particular are those related to the full maintenance of the Go-Fit Madrid Gym, with a total surface area of 8,000 m2 and thecentral offices of Unisys in Madrid.In the area of the Environment in Spain, the operating income was slightly lower than that recorded in 2009, having reached the value of EUR24,270 thousand, where special mention should be made of the increased average period of time of receipts with impacts in terms of theliquidity of this subsidiary, which implied a reinforcement of its equity by Teixeira Duarte.RECOLTE - Recolha, Tratamento e Eliminação de Resíduos, S.A. is a company 100% owned by the Teixeira Duarte Group, operating in theareas of (i) design and operation of cleaning and urban hygiene systems; (ii) urban and industrial solid waste management systems; as well as (iii)execution and maintenance of gardens and green areas, providing a vast series of services in the area of the environment.In 2009, RECOLTE, S.A. recorded an operating income of EUR 11,017 thousand, representing growth of 17.2% in relation to the previous year,especially significant if we consider the particularly difficult cycle in the environment market.INVICTAAMBIENTE - Recolha de Resíduos e Limpeza Pública, S.A. is a Portuguese company owned 100% by GSC – CompañiaGeneral de Servicios y Construccíones, S.A., established in compliance with an obligation under the concession contract signed between thelatter, its sole shareholder, and the Municipality of Porto.The only and exclusive objective of this company is the development, management and operation, under concession contracts, of municipal36

Management Report of the Board of Directors 2010Oeiras AutomaticTransport System - SATUSão Francisco de AssisCollege - Luanda Sulsolid urban waste collection and street cleaning services in a very large urban area of this Municipality.During the year under review, INVICTAAMBIENTE increased its operating income by 3.7%, which reached EUR 4,364 thousand, and an operatingincome of a similar value is expected to be achieved in 2011.TDHOSP - Gestão de Edifício Hospitalar, S.A. is a company 100% owned by TD-EC, the object of which is the management of the NewCascais Hospital for a period of 30 years, which includes the design, project, construction, financing, conservation and maintenance activities.The hospital was inaugurated on 23 February 2010, with TDHOSP, S.A. having developed its activity with a view to ensuring that the workprogressed as planned, coordinating the different entities involved so as to create the conditions for excellent performance during the operatingphase of the building.SATU-OEIRAS - Sistema Automático de Transporte Urbano, E.M., S.A. is a municipal company 49% owned by the Group, which fullyoperates the Oeiras SATU Transport System, having recorded an operating income of EUR 291 thousand in 2010.EDUCARE - Actividades Educativas e Culturais, Lda. is a company 100% owned by the Teixeira Duarte Group, constituted for thedevelopment of the "São Francisco de Assis College" project in Luanda, which aims to provide a solution to meet the needs of demanding andculturally diverse customers, ensuring the education of children and young people from the age of 3 years.This company started its activity in September 2007 with the opening of the provisional premises of the College in Talatona, Luanda-Sul, andhas since this date confirmed its position in the country's educational scene as a multicultural school of excellence, which has been reflectedin an impressive increase of 118% of its operating income, which reached EUR 6,537 thousand.37

Management Report of the Board of Directors 2010In 2010, the construction works of blocks 6 and 7 of the new premises of the College were concluded, comprising an area of 3,700 m2 plus7,600 m2 of recreational areas and sports fields, enabling the start-up of its operation at the beginning of the academic year in September.The following entities are part of the abovementioned subsidiaries whose direct management is not carried out by the structures of the TeixeiraDuarte Group:AEDL - Auto-Estradas do Douro Litoral, S.A. is a company in which TD-EC owns a holding of 19.67% of the respective share capital andwhich signed the Douro Litoral concession contract with the Portuguese State at the end of December 2007.This agreement will last for a period of 27 years, with the object being the design, project, construction, increase in the number of lanes,financing, conservation and operation of the associated motorway stretches and roadways, under the name of Douro Litoral Concession,covering a total of 129 Km, where users are subject to the payment of a toll on 78 Km. This infrastructure was inaugurated on 1 April 2011.AEBT - Auto-Estradas do Baixo Tejo, S.A. is a company in which TD-EC holds 9% of its share capital and which signed the Baixo TejoSub-Concession Contract with EP – Estradas de Portugal, S.A. on 24 January 2009.This sub-concession contract will last for a period of 30 years and envisages the design, planning, construction, increase in the number oflanes, financing, operation and conservation of the motorway stretches, associated roadways road links in the district of Setúbal, called theBaixo Tejo sub-concession, along a total of 68 Km, of which 17Km include toll-gates and involving an estimated investment of approximatelyEUR 278 million.LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. is a company dedicated exclusively to the management, under a concessionregime, of the two road crossings over the River Tejo, in the region of Lisbon, in which TD-EC owns 7.5% of the share capital.During 2010, the performance of this subsidiary was similar to that of the previous year, with its Profit Before Taxation having increased slightlyby 0.56%, amounting to EUR 19,703 thousand compared with the restated value of EUR 19,595 thousand for 2009.In spite of the small decrease in revenue of 1.9% and a slight increase in costs, the company achieved a net profit after taxation of EUR 14,372thousand, 0.02% above its Budget and 2.1% higher than in 2009.This decrease is essentially explained by the impact of the new accounting rules and by the increased income tax which occurred in 2010.CPM - Companhia de Parques de Macau, S.A., in which the Teixeira Duarte Group has maintained a stake of 15% of the share capitalsocial since its foundation in the mid-1980's, after the international public tender carried out abroad, was a pioneer and continues to be areference company in the construction and operation of car parks and related activities, in the Special Administrative Region of Macau, havingsuccessfully pursued its operations within the specific parameters of the market.2010 was marked by operating alterations which were reflected in the loss of the concession of one of the largest parks, the "Nam Van LakeCar Park", compensated slightly in terms of income by the beginning of the Vasco Park concession and by the expansion of the street parkingconcession. Overall and adding the significant increase in the counterpart payable to the concession grantor, the new circumstances arepenalising for the net operating income.Even so, this subsidiary recorded a positive net income, and continued its regular contribution to the Teixeira Duarte Group with the distributionof dividends of the value of EUR 271 thousand, compared with the EUR 277 thousand received in the previous year.38

Management Report of the Board of Directors 2010During the last quarter of 2010, Teixeira Duarte sold its 33.33% holding in the share capital of TEBE, S.A., a company registered underBrazilian law, based in Bebedouro, State of São Paulo, which operates the concession of a 156 Km state road, located in the interior of the Stateof São Paulo.IV.4. REAL ESTATEThe operations of the Teixeira Duarte group in this sector go back to the beginning of the 1970's and currently include a vast group ofcompanies, mainly operating in Portugal, Angola, Brazil, Spain and Mozambique.Over the years, this sector has intervened from the design of masterplans to the rehabilitation of constructed heritage in historic centres.The know-how acquired by these multidisciplinary teams has endowed the sector with tremendous experience in the residential, office,shopping area, hotel, health and leisure, industrial/logistics and public car park segments.Apart from the promotion of real estate projects, part of the resources of this sector are currently dedicated to the management and expansionof areas allocated to other activities of the Group, in particular in the Construction, Hotel Services, Distribution and Automobile sectors.- OVERVIEW OF THIS SECTOR DURING 2010:118,754Consolidated Turnover in the Real Estate sector was EUR118,754 thousand, reflecting a growth of 43.8% comparedwith 31 December 2009 and revealing a very positiveperformance in the current economic situation in Portugal andthe correct targeting of the market of São Paulo in Brazil.52,18382,568Evolution ofReal Estate Turnover(Values in thousand Euros)2008 2009 201079,820 80,498EBITDA stood at EUR 62,453 thousand, reflecting a reductionof 22.4% in relation to the previous year, essentially as aresult of the effect of the adjustment of the value of theinvestment properties (which had been higher in 2009)and the implementation, in Portugal, of a consistent policyof disposal of properties in the portfolio, with reductions inthe expected sales values to prices in accordance with currentmarket conditions.62,4532008 2009 2010Evolution of Real Estate EBITDA(Values in thousand Euros)39

Management Report of the Board of Directors 2010"Lagoas Park" undertakingPorto Salvo"Villa Park" undertakingAmadoraIn non-consolidated terms and in order to provide an overall view of the total activity during 2010, we disclose that the operating income ofthe companies of the Group in the Real Estate sector reached the total value of EUR 138,825 thousand, corresponding to an increase of 14%.While in 2009 the market abroad represented 42%, this year it now represents 53%.- PORTUGALIn Portugal, 2010 proved to be a very difficult year for the real estate sector. As a result of the extremely unfavourable economic environmentand an aggravation in the conditions of access to credit, most of the sector experienced difficulties in selling the marketed products. Thiscontext is expected to continue throughout 2011, and marked improvements are not expected in the short term.In 2010, the office segment of Greater Lisbon placed a little over 100,000 m2, the lowest absorption level of the last 8 years.In the residential segment, the economic and financial circumstances of 2010 combined with the saturation of offer in certain locations hashindered actual sales. In this context, families delay purchase decisions and choose to rent; the rental market continues with low rates of returnand is, therefore, unattractive to the promoters of new real estate development projects.Likewise, in the industrial and logistics segment and more particularly in the logistics segment, the demand in 2010 stood at one of its lowestlevels of the last decade, with a very low number of transactions having been recorded, even in the main locations.In view of the current constraints, the maintenance of good sales levels of the assets developed by the Group has been achieved through thezealous work performed by its technical and commercial teams in the definition and implementation of high quality products and in theirpublicising and marketing.40

Management Report of the Board of Directors 2010Buildingsof the "Quinta de Cravel"undertakingVila Nova de GaiaBuildings of the"Santa Marinha Design District"undertakingVila Nova de GaiaIn this context, special note should be made of the performance of "Lagoas Park", where 10,095 m2 were placed, corresponding to 10% of the totalmarket of Greater Lisbon, allowing for the maintenance of this undertaking as the main reference in terms of Office Parks in Portugal.The development of "Lagoas Park" continued with the conclusion of two new buildings with 20,000 m2 of new office areas, some of whichare already occupied by companies such as Brisa, Colgate and Philips.2010 was the year of the conclusion of the construction of "Villa Park" in Amadora, where the marketing of the residential, office and servicecomponents continued and where two structural facilities of the undertaking were inaugurated: a public car park with 228 places and a healthclub "Club L".In "Santa Marinha Design District" in Vila Nova de Gaia, various alterations were approved for the development and sales continued both inthe residential segment and service segment, in particular with the inauguration of a health club of the British chain Virgin Active in plot V15.In "Quinta de Cravel", also in Vila Nova de Gaia, a good commercial performance was achieved, with the sale of 85% of the built units whichhave been marketed, as well as the sale of a plot destined for the installation of a haemodialysis clinic under the brand "Fresenius Medial Care".In order to improve the operating conditions of various sectors of the Group dedicated to construction, the construction of the new "TeixeiraDuarte Operating Centre" started during 2010. Built on a plot of land of 127,000 m2, this facility, with conclusion forecast for April 2011, willenable the integration in a single space of the equipment operations, logistics and various supports to engineering of the Teixeira DuarteGroup.41

Management Report of the Board of Directors 2010"Coqueiros Luanda Living"Luanda - Angola"Crystal Campo Belo"undertaking(3D Model image)São Paulo - Brazil- ANGOLAThe appearance of new centres in Luanda has reduced the real estate pressure in the traditional city centre, with the corresponding adjustmentin the market values for sale or rental.The portfolio of real estate assets of the Teixeira Duarte Group in Angola remained unaltered during 2010, composed of over 30 undertakingswith an associated building potential of an area of about 500,000 m2 above the ground.During this year, the management of the assets in the portfolio continued, with licenses having been applied for concerning five newresidential and service projects, covering a total of 200,000 m2 of construction area above the ground.The marketing and construction of the building "Coqueiros Luanda Living" was continued, a residential and commercial building with 43fractions and completion forecast for the second half of 2011, where the sale of 84% of the units has been promised.- BRAZILSãao PauloThe Teixeira Duarte Group has operated in the residential and commercial markets in São Paulo since 2006.The economic buoyancy has led to an increase in the rate of launches on the real estate market of this city, especially in terms of the numberof units, with the prices having increased gradually over the year.42

Management Report of the Board of Directors 2010"Verdi" undertakingAlto dos PinheirosSão Paulo - BrazilGSC - Entrance of Parking Europa andShopping AreasSan Sebastián de los Reyes - SpainDuring 2010, Teixeira Duarte placed 243 of the 704 units launched over the last three years of activity, achieving an accumulated total salesof 703 units, with only one left in the "Crystal Campo Belo" undertaking, which is considered an excellent performance, attributed to thetechnical rigour in the design of the projects.The construction of two undertakings was continued: "Family Santana", in the Santana region, and "Verdi", in the Alto de Pinheiros region.These undertakings covers a total of approximately 90,000 m2 of construction area. Also in 2010, the construction of the undertaking "CrystalCampo Belo" was completed and almost all of its units were sold.PernambucoIn this state of Northeast Brazil, the "Casa do Governador” undertaking continued to be promoted in Porto de Galinhas, a project of a major sizeand high quality which is expected to be structural for the entire region, with the development of its various projects and procedures for theirlicensing, especially the approval of the environmental licenses.In view of the expectations of growth of the Brazilian economy, combined with the beautiful natural conditions and great openness andfriendliness of its people, there are good prospects for the sustained development of tourism. The project that Teixeira Duarte intends todevelop in Porto de Galinhas aims to strengthen the capacity and quality of this recognised tourist centre.- SPAINThe Spanish real estate sector continues immersed in a deep crisis, where, for this activity sector, access to bank credit is very restricted. In thiseconomic context good investment opportunities are sometimes detected, therefore we remain attentive to the market.43

Management Report of the Board of Directors 2010The construction was started of a residential building with twelve apartments, situated on "Calle Amalia", close to "Paseo de la Castellana" and"Plaza Castilla".Also in Madrid and under an administrative concession contract, continuity was given to the marketing of the transfer of the use of parkingplaces for residents and the operation of parking areas for rotation, as well as the leasing of the commercial areas available in "Parking Europa",located in "Avenida da Europa", in "San Sebastian de los Reyes".- MOZAMBIQUEThe Polana Shopping Centre continues to be one of the main shopping centres in the city of Maputo and, with all its retail units leased andthe favourable market conditions, it has been possible to exercise strong pressure on rental collections and to select the customers carefully.IV.5. HOTEL SERVICESAfter a first experience in 1974 in the Algarve, the Teixeira Duarte Duarte resumed its activity in this sector in Sines in the 1980's, and currentlyoperates ten hotels, five of which are located in Portugal, two in Angola and three in Mozambique.Teixeira Duarte also develops business in the Fitness area, namely through three health clubs (one in "Lagoas Park", another in Torres Vedrasand a third in "Villa Park" in Amadora) and some restaurants in Portugal and Angola, where in this last country the “Nilo” pastry-shops andare particularly important.- OVERVIEW OF THIS SECTOR DURING 2010:Evolution ofHotel Services Turnover(Values in thousand Euros)68,13582,60178,943Consolidated Turnover in Hotel Services amounted to EUR78,943 thousand, representing a reduction of 4.4% comparedto the total recorded as at 31 December 2009, which isattributed to the reduction of the occupancy rates of theGroup's hotels in Luanda.2008 2009 201044

Management Report of the Board of Directors 2010EBITDA stood at EUR 23,414 thousand, representing a decreaseof 38.8%, although recording figures similar to those of 2008,which shows the excellent performance of the sector in 2009.26,46138,28723,414Evolution of Hotel Services EBITDA(Values in thousand Euros)2008 2009 2010In non-consolidated terms and in order to provide a perspective of the total activity in 2010, we disclose that the operating income of thecompanies of the Group operating in this sector reached the total value of EUR 101,908 thousand, corresponding to an increase of 2.4%,where 83% of this figure was the outcome of activity developed in the market abroad and 17% in Portugal.- PORTUGALThe various companies of the Group operating in this sector in Portugal offer a total of 1,515 beds and 651 rooms, distributed over five hotels,as detailed below:- LAGOAS PARK HOTEL Oeiras 182 rooms- SINERAMA Sines 105 rooms- HOTEL ORIENTAL Praia da Rocha 90 quartos- STELLA MARIS Albufeira 140 rooms- HOTEL EVA Faro 134 roomsIn spite of the negative economic circumstances in 2010, the main operating indicators of the tourism activity in Portugal showed a positiveevolution. However, the significant decrease of the British market, caused mainly by the devaluation of the pound in relation to the Euro, hada negative impact on the hotel sector of the Algarve.The hotels of the Teixeira Duarte Group in Portugal maintained their occupation rates in spite of the increase of approximately 2.5% of theaverage price as a result of the increased demand of the corporate segment in some of the Group's hotels.In the Fitness area, it was possible to maintain the trend of growth in the number of members of both "Club L – Lagoas Park" and “Club L -Arena Health Club" in Torres Vedras, as a result of the quality of the facilities and services.The new unit "Club L – Villa Park" in Amadora, inaugurated in October 2010 recorded a very positive start-up of activity.The good performance of these two segments of Hotel Services and Fitness also led to an increase of the operating income from EUR 15,061thousand to EUR 16,253 thousand, corresponding to an increase of 7.9%.45

Management Report of the Board of Directors 2010Hotel Sinerama - SinesClub L - Amadora- ANGOLAThe two hotels of the Teixeira Duarte Group in Luanda, the "TRÓPICO" and "ALVALADE", respectively with 280 and 202 rooms, showed goodoccupation rates, with the professional training actions of the employees having been strengthened, namely relative to foreign languages,public attendance and food hygiene and safety.In order to strengthen its already strong presence in the hotel market in Angola, the Group continued the construction of a new four star hotelwith 144 rooms located in Luanda Sul, which is expected to be inaugurated in the second quarter of 2011.Concerning other related activities, note should be made of the "Nilo" pastry-shops which continued to show the good performance that hascharacterised its activity over the last few years, and which was strengthened with the opening of another "Nilo" pastry-shop in Luanda Sul.- MOZAMBIQUEIn Mozambique, the hotels of the Teixeira Duarte Group provide a total of 304 rooms, with 159 being in "Hotel Avenida", 73 in "Hotel TivoliBeira" and 72 in "Hotel Tivoli Maputo".Although tourism in Mozambique fell sharply in 2010, Teixeira Duarte's hotels showed a higher performance than in 2009, with theachievement of an increase in operating income of approximately 23% and growth in the occupancy rate of 5%.46

Management Report of the Board of Directors 2010IV.6 DISTRIBUTIONThe action of the Teixeira Duarte Group in this area began in 1996 and is currently implemented by several international operations, where itis important to note the activities developed by the subsidiaries "MAXI - Comércio Geral, Importação e Exportação, Lda." and "MAXI RETAIL –Comércio Geral, Lda.", which operate in the Angolan market.With its core business being the distribution of foodstuffs, this operation is supported by a strong logistic capacity established in Luanda,where, in 2010, particular note should be made of the implantation of two new insignias in this Distribution sector: "Casa de Coração"dedicated to the sale of articles for the home and "Maxilectro" which markets consumer electronics.- OVERVIEW OF THIS SECTOR DURING 2010:Consolidated Turnover in Distribution increased by 4.3%compared with 2009, and stood at EUR 115,741 thousand,essentially as a result of the appreciation of the US Dollar inrelation to the Euro.102,462110,930115,741Evolution ofDistribution Turnover(Values in thousand Euros)2008 2009 2010EBITDA maintained the level recorded in 2009, having reachedEUR 7,814 thousand.8,4567,737 7,814Evolution of Distribution EBITDA(Values in thousand Euros)2008 2009 2010In non-consolidated terms and in order to provide an overall view of the total activity during 2010, we disclose that the operating income inDistribution reached the total value of EUR 180,241 thousand, reflecting an increase of 9.3% in relation to 2009.During 2010 in Angola there was a growing increase in the competition in this business area, with the opening of new units and theappearance of new insignias in the market.47

Management Report of the Board of Directors 2010"Casa de Coração"Luanda - Angola"Maxilectro"Luanda - AngolaIn the logistics area, special focus was given to the fine-tuning of the storage and delivery mechanisms, enabling an improvement of thetimes of arrival of the products to the shops, both through a strict control of stocks and the optimisation of the respective fleet management.Regarding the actual sales areas, two shops were remodeled in the metropolitan region of Luanda, providing them with better cold storagecapacity and ensuring adequate space for new families of products. In December 2010, a new shop was inaugurated in Hoji Ya Henda, Luanda.In the commercial area, the channel dedicated to "Horeca" (Hotel/Restaurant/Café) was created, and the means strengthened so as to providebetter service to customers.Maxi's specialised delivery channel maintained its trend of growth of the last few years, and currently provides services to an increasinglywider number of small retailers.The trend of increasing sales of products of Angolan origin was maintained, in particular concerning fresh products, thus increasing the range ofthe offer.The insignia "Casa de Coração" was created, dedicated to the marketing of articles for the home, with the objective of concentrating in a singlespace a great diversity of quality products.For 2011, it is expected that the renewal of shops will be continued, focusing on those in located in Lobito and Sumbe, and that at least twonew shops will be opened, one in Luanda and another in Porto Amboím, with a further three more shops being at the project and/or licensingphase.In the logistics area, we maintained the objective of the consolidation of our storage and distribution operation, both through the increasedinstalled capacity and through the renewal and reinforcement of the existing fleet.48

Management Report of the Board of Directors 2010In the beginning of 2010, the "Maxilectro" shop was inaugurated in MaxiPark in Luanda Sul, dedicated to the marketing of consumerelectronics. Based on the assumptions of quality offer, service level, product diversity, competitive prices and staff specialised in technology,this insignia represents yet another front in the distribution sector.IV.7 ENERGYThe Teixeira Duarte Group began to operate in this sector in Portugal in 1996, with its current operations in the national market being throughTDARCOL – SGPS, S.A. in the areas of Liquid Fuel and Lubricants, Gas and Solar Energy, and in Brazil through the subsidiary ALVORADAPETRÓLEO S/A, involved in the extraction and marketing of oil.In fuel, Teixeira Duarte operates, directly or through concessions, 60 fuel stations, under the brand AVIA.In Gas, the Group operates under the brand DIGAL and has 500 reservoirs for local supplies and a distribution network of piped gas of over350Km, supply about 65,000 housing units, in addition to a structure for the filling and distribution of bottled gas, and has the exclusivenational representation of the brand Campingaz.In the area of solar thermal energy, the companies of the Group represent, in Portugal, the international brands SOLAHART and SONNENKRAFT,where its subsidiaries are market leaders.in Brazil, Teixeira Duarte indirectly owns 76% of EMPA,S/A – Serviços de Engenharia, which, in turn, owns 47.2% of the share capital of thecompany ALVORADA PETRÓLEO S/A, based in Belo Horizonte.ALVORADA, S/A holds the concession of three mature fields, located in Aracaju, in the State of Sergipe, Bom Lugar, in Reconcâvo Baianoand Jiribatuba, on the island of Itaparica in front of the city of Salvador, as well as eleven blocks also situated in Reconcâvo Baiano andwhich were the object of the Concession Contract of the 9th Round of Bids promoted by ANP – Agência Nacional do Petróleo, Gás Natural eBiocombustíveis (ANP).- OVERVIEW OF THIS SECTOR DURING 2010:148,574102,172 127,821Consolidated Turnover in the Energy sector was EUR 127,821thousand, corresponding to an increase of 25.1%, which, whilesignificant, did not allow reaching the levels recorded in 2008.Evolution ofEnergy Turnover(Values in thousand Euros)2008 2009 201049

Management Report of the Board of Directors 2010Evolution of Energy EBITDA(Values in thousand Euros)6,2977,846 7,943EBITDA increased slightly by 1.2% in relation to 2009, to standat EUR 7,943 thousand.2008 2009 2010In non-consolidated terms and in order to provide an overall view of the total activity during 2010, we disclose that the operating income inthe Energy sector reached the total value of EUR 138,286 thousand, reflecting an increase of 24.1% in relation to 2009.- PORTUGALA strict controlled management of resources, suppliers and the readjustment of the logistics integrated in the Group, has enabled achievinggreater balance in the operations, partially explaining the improved performance of the more significant segments of gas and road fuels.In spite of the negative impact that the holding in ISA, S.A. had on the financial results, the strict policies of credit control and cash investmentspermitted an improvement in this indicator.- Liquid Fuel and Lubricants:Although the company pursued its policy of strictness applied to the management of credit risk exposure, liquid fuel sales increased by 4%,essentially as a result of the development of campaigns aimed at the commercial stimulation of the network.The lubricants sector maintained a good performance, having consolidated its sales and consequently its market position.- Gas:In the gas sector, the Group maintained the normal development of its business, with operating income having increased slightly in relationto 2009.- Solar Energy:In the solar energy sector, as a result of the incentives introduced in the National Action Plan for Energy Efficiency, promoted by the Ministry ofEconomy and Innovation, growth of 17.8% was recorded.Added to the abovementioned three areas, note should also be made of the development of the Tancagem Project in Aveiro.- BRAZILIn 2010, the implementation continued of a prospecting programme named "Minimum Exploratory Programme (Programa ExploratórioMínimo - PEM)".50

Management Report of the Board of Directors 2010Gas Bottle FillingPlant - DIGALPalmelaALVORADABlocks of the 9th RoundField 129BrazilAfter the drilling of two operating wells in 2009, one in block 129 and the other in block 155, both integrated in the concession relative to thissame 9th Round of Bids promoted by ANP, in 2010 the field tests were concluded and the respective processes of completion and constructionof the surface plant were initiated, with a view to the start-up of production of these two wells. During the year, Seismic services were alsoexecuted in Blocks 129, 142 and 155, over a total of 92 Km2.Also of great importance in this area of action was the signing of an Agreement between ALVORADA and an entity of the Group GranTierra Energy Inc. (Gran Tierra Energy), through which the latter will pay USD 22.6 million and undertakes to comply with certain futurecommitments, including the drilling of two wells in 2011, receiving in exchange 70% of Blocks REC-T-129, 142, 155 and 224, included in theconcession relative to the said 9th Round of Bids.Under the terms of the abovementioned Agreement, Gran Tierra Energy will become the operating entity and will pay 100% of the drillingcosts of two wells in Blocks REC-T-129 and 142.ALVORADA ended 2010 as the 6th oil and gas operator of Brazil, according to the information calculated and disclosed by ANP – AgênciaNacional do Petróleo, Gás Natural e Biocombustíveis (ANP), with a total production of 73,523 barrels (where the ALVORADA portion represents45,390 barrels).The estimates of the potential reserves and traced reserves were updated, respectively, to 76 million barrels and 14 million barrels, althoughthese values have not been audited and result from preliminary studies produced by ALVORADA.51

Management Report of the Board of Directors 2010IV.8 AUTOMOBILETeixeira Duarte began its vehicle marketing activity in Angola in 1991, and currently owns a group of companies which represent variousinternational brands in the following market segments:- Automobiles: Chevrolet, Honda, Nissan, Mahindra, Peugeot and Renault;- Heavy Vehicles: Renault Trucks and UD Trucks;- Motorcycles: Honda, Piaggio, Vespa and Gilera- Trailers: Randon;- Forklifts: Nissan Diesel;- Generators: Denyo, Pramac and Honda Power Products.- OVERVIEW OF THIS SECTOR DURING 2010:158,653Evolution ofAutomobile Turnover123,281108,784Consolidated Turnover in the Automobile sector fell once againin 2010 to stand at EUR 108,784 thousand;(Values in thousand Euros)2008 2009 2010Indeed, the automobile sector in Angola was not immune to the circumstances of the international crisis, where, during the last two yearsthere has been a strong retraction in the sale of automobiles and in particular heavy vehicles, due to the general reduction of investment.29,222Evolution of Automobile EBITDA(Values in thousand Euros)14,333EBITDA decreased sharply in relation to 2009, recording anegative value of EUR 2,317 thousand, reflecting the reductionin income and stock selling effort.(2,317)2008 2009 201052

Management Report of the Board of Directors 2010Automobile CentreLuanda - AngolaOutside viewAutomobile CentreLuanda - AngolaWorkshop viewIn non-consolidated terms and in order to provide an overall view of the total activity during 2010, we disclose that the operating income inthe Automobile sector reached the total value of EUR 182,748 thousand, reflecting a reduction of 16.2% in relation to 2009.In the automobile segment, the two brands represented by the Group which achieved the highest turnover were Nissan, through theperformance of the Hardbody and Navara models, and Chevrolet, with the Spark and Captiva models.During this year, the implementation of a rigorous stock reduction policy continued, which enabled reaching the end of 2010 with values moresuited to the current level of the operation.During 2010, the Group initiated the marketing of the models of the automobile brand Mahindra, of Italian origin, which are characterised bytheir simplicity and mechanical robustness, offering the markets products with an excellent quality/price relationship.Also noteworthy in 2010 was the strengthening of the means dedicated to the sale and after-sales service of generators, providing teams withimproved technical capacity and response speed.Under the objective of expanding the marketing and after-sales service of the represented brands, plans have been made for the opening of afurther two units with showrooms, workshops and spare parts in the metropolitan region of Luanda.53

Management Report of the Board of Directors 2010V. HOLDINGS IN LISTED COMPANIESIn 2001 and in the context of the reprivatisation process of CIMPOR – Cimentos de Portugal – SGPS, S.A., Teixeira Duarte became the ownerof an important holding in this company, which as at 1 January 2010 came to a total of 22.17% of the respective share capital and which wasdisposed of during the first quarter of this year.Teixeira Duarte was a founding shareholder of Banco Comercial Português, S.A. in 1985, having progressively followed the successive increasesin share capital and strengthened its strategic stake, and is currently the largest national shareholder of the Bank and second largest in overallterms, with 6.9% of the respective share capital.The stake owned in Banco Bilbao Vizcaya Argentaria, S.A. since 2007, is considered a strategic investment to accompany the development ofthe Group's activity in Spain.A. CIMPOR - Cimentos de Portugal - SGPS, S.A.The year of 2010 began marked by the launch of a Public Takeover Bid for the shares of Cimpor by the Brazilian company CSN, at a time whenit was already public knowledge that Teixeira Duarte was no longer the reference shareholder in this subsidiary.At that time, apart from the different perspectives of the then shareholders of Cimpor, other interests emerged on the part of a further twoBrazilian Groups - Camargo Corrêa and Votorantim.As a result of these positions, on 3 February, Votorantim acquired 17% of the share capital of Cimpor and signed a shareholders' agreementwith Caixa Geral de Depósitos, after which, on 10 February, Teixeira Duarte signed a contract with Camargo Corrêa for the sale of all the148,974,230 shares it owned in Cimpor, at the price of EUR 6.50 per share, amounting to a total of EUR 968,332 thousand.Therefore, during 2010, Teixeira Duarte appropriated net income of Cimpor, until the date of its sale, of the value of EUR 9,237 thousand andincorporated the resulting capital gains from the sale of this holding, to the value of EUR 71,183 thousand.This operation enabled Teixeira Duarte to significantly reduce its total debt and strengthen its capacity to invest in other fronts of its activity.B. Banco Comercial Português, S.A.Regarding Banco Comercial Português, S.A., it should be noted that at the end of the year, the total number of shares owned by companies inthe Teixeira Duarte Group corresponded to 6.9% of the share capital and voting rights of Banco Comercial Português, S.A..In view of the market value of the shares held as at 31 December 2009 and 31 December 2010, respectively, of EUR 257,716 thousand andEUR 188,859 thousand, it is evident that they devalued by EUR 68,857 thousand.C. Banco Bilbao Vizcaya Argentaria, S.A.In 2010, the Teixeira Duarte Group maintained its stake in Banco Bilbao Vizcaya Argentaria, S.A., which is a strategic investment in Spain andwhose book value, expressed in IFRS, recorded a decrease of 28.7%, standing at EUR 19,361 thousand.54

Management Report of the Board of Directors 2010VI. EVENTS AFTER THE END OF THE REPORTING PERIODTeixeira Duarte pursued its activity in the different sectors and markets in which it operates, with there not having been, from the closing ofthe financial year to the present date, any fact which should be disclosed in this chapter.VII. OUTLOOK FOR THE FINANCIAL YEAR 2011For 2011, besides strengthening the position of special caution and vigilance regarding cost containment and the undertaking of investments,Teixeira Duarte will focus its efforts on prudent participation in the main national construction tenders and will continue to pursue the growthof this sector abroad.The Portfolio of Orders of the Teixeira Duarte Group for the construction sector, which reached the impressive total value of EUR 2,100 millionas at 31 December 2010, ensures good levels of activity, especially in the current context of such unfavourable economic circumstances.The development of action in other activity sectors will also be pursued, whenever possible also giving priority to ventures in external markets,which, due to their dynamics, are becoming increasingly important in the Teixeira Duarte Group.For 2011, Teixeira Duarte expects to achieve a consolidated operating income of EUR 1,500 million.VIII. DISTRIBUTION TO MEMBERS OF THE BOARD OF DIRECTORSFollowing the contacts established with the Remuneration Committee and in view of the commitment made regarding the distribution to themembers of the Board of Directors of part of the profit for the year, and pursuant to the rules currently in force, this amount of EUR 1,500,000(one million and five hundred thousand Euros) was recorded as a cost for the financial year of 2010, with the consequent reduction of the netprofit heading presented in the financial statements attached to this Report and also subject to approval at the General Meeting.Therefore, with the approval of this Annual Report, the Shareholders will also approve the abovementioned distribution of profit to themembers of the Board of Directors, to be deliberated by the Remuneration Committee up to that amount.55

Management Report of the Board of Directors 2010IX. PROPOSAL FOR THE APPROPRIATION OF PROFITThe net profit whose proposed appropriation is presented herein corresponds to the amounts calculated as at 31 December 2010 plus the costof EUR 1,500,000 (one million and five hundred thousand Euros) which, being planned to be distributed to the directors, were, pursuant tothe applicable new rules, recorded as a cost of the actual financial year of 2010 in the financial statements which are an integral part of thisManagement Report and which, should they be approved, confirm, on the one hand this willingness of the Shareholders to distribute profitto the members of the Board of Directors and, on the other hand, that the Net Profit object of the proposal for the appropriation of Profit isEUR 99,674,821.36.It is the policy of Teixeira Duarte to privilege the reinforcement of the company's equity and ensure a continued and balanced distribution ofdividends to the shareholders.Considering these assumptions, the Board of Directors proposes that the individual net profit of TEIXEIRA DUARTE, S.A. for the financial yearof 2010, amounting to EUR 99,674,821.36 (ninety-nine million six hundred and seventy-four thousand eight hundred and twenty-one Eurosand thirty-six cents), be appropriated as follows:Reinforcement of the legal reserve 5.000.000,00 €Reinforcement of the free reserves 88.374.821,36 €Dividends to shareholders 6.300.000,00 €Lagoas Park, 28th April 2011The Board of Directors,Pedro Maria Calainho Teixeira DuarteManuel Maria Calainho de Azevedo Teixeira DuarteJoel Vaz Viana de LemosJorge Ricardo de Figueiredo CatarinoCarlos Gomes BaptistaJoão José de Gouveia CapelãoJoão José do Carmo Delgado56

Notes to the Management Report of the Board of Directors 2010I. Number of securities of the Members of the Governing Bodies:In compliance with the duties of information to which the Company is bound under various rules in force, in particular article 447 of the Commercial CompaniesCode and article 14, number 7 of CMVM Regulation number 5/2008, TEIXEIRA DUARTE, S.A. presents, below, the list of securities issued by the Company andby companies with which it is in a controlling or group relationship, owned by members of the Governing Bodies, as well as all the acquisitions, encumbrancesor transfers during 2010, specifying the amount, date of the fact and consideration paid or received.Name Capacity No. of SharesPedro Maria Calainho Teixeira Duarte Chairman of the Board of Directors (a) 7,942,000Manuel Maria Calainho de Azevedo Teixeira Duarte Director 5,149,575Joel Vaz Viana de Lemos Director -Jorge Ricardo de Figueiredo Catarino Director -Carlos Gomes Baptista Director -João José Gouveia Capelão Director -João José do Carmo Delgado Director -António Gonçalves Monteiro Chairman of the Supervisory Board -Mateus Moreira Member of the Supervisory Board -Miguel Carmo Pereira Coutinho Member of the Supervisory Board -Mariquito, Correia & Associados, SROC Chartered Accountant -Rogério Paulo Castanho Alves Chairman of the Board of the General Meeting of Shareholders -José Gonçalo Pereira de Sousa Guerra Costenla Deputy Chairman of the Board of the General Meeting of Shareholders -José Pedro Poiares Cobra Ferreira Secretary of the Board of the General Meeting of Shareholders -(a) 700,000 shares were held,indirectly, through the companycontrolled by him, PASIM – SociedadeImobiliária, S.A. and 7,200,000shares were held, indirectly, throughthe company also controlled byhim, PACIM – Sociedade Gestora deParticipações Sociais, S.A..II. Transactions with shares held, directly and indirectly, by Members of the Governing Bodies during the period between 1 Januaryand 31 December 2010:Name Transaction Company Date No. of Shares Price per ShareJoel Vaz Viana de Lemos Acquisition TEIXEIRA DUARTE, S.A. 9-Aug-10 433,862 1 share of TEIXEIRA DUARTE - Engenharia e Construções, S.A.Jorge Ricardo de Figueiredo Catarino Acquisition TEIXEIRA DUARTE, S.A. 9-Aug-10 180,000 1 share of TEIXEIRA DUARTE - Engenharia e Construções, S.A.Carlos Gomes Baptista Acquisition TEIXEIRA DUARTE, S.A. 9-Aug-10 25,634 1 share of TEIXEIRA DUARTE - Engenharia e Construções, S.A.João José de Gouveia Capelão Acquisition TEIXEIRA DUARTE, S.A. 9-Aug-10 10,387 1 share of TEIXEIRA DUARTE - Engenharia e Construções, S.A.João José do Carmo Delgado Acquisition TEIXEIRA DUARTE, S.A. 9-Aug-10 28,660 1 share of TEIXEIRA DUARTE - Engenharia e Construções, S.A.Miguel Carmo Pereira Coutinho Acquisition TEIXEIRA DUARTE, S.A. 9-Aug-10 10,000 1 share of TEIXEIRA DUARTE - Engenharia e Construções, S.A.III. Number of shares held by Members of the Governing Bodies as at 31 December 2010:Name Capacity No. of SharesPedro Maria Calainho Teixeira Duarte Chairman of the Board of Directors (a) 7,942,000Manuel Maria Calainho de Azevedo Teixeira Duarte Director 5,149,575Joel Vaz Viana de Lemos Director 433,862Jorge Ricardo de Figueiredo Catarino Director 180,000Carlos Gomes Baptista Director 25,634João José Gouveia Capelão Director 10,387João José do Carmo Delgado Director 28,660António Gonçalves Monteiro Chairman of the Supervisory Board -Mateus Moreira Member of the Supervisory Board -Miguel Carmo Pereira Coutinho Member of the Supervisory Board (b) 10,000Rogério Paulo Castanho Alves Chairman of the Board of the General Meeting of Shareholders -José Gonçalo Pereira de Sousa Guerra Costenla Deputy Chairman of the Board of the General Meeting of Shareholders -José Pedro Poiares Cobra Ferreira Secretary of the Board of the General Meeting of Shareholders -Mariquito, Correia & Associados, SROC Chartered Accountant -(a) 700,000 shares were held,indirectly, through the companycontrolled by him, PASIM – SociedadeImobiliária, S.A. and 7,200,000shares were held, indirectly, throughthe company also controlled byhim, PACIM – Sociedade Gestora deParticipações Sociais, S.A..(b) shares held under joint ownershipwith his wife.57

Notes to the Management Report of the Board of Directors 2010TEIXEIRA DUARTE, S.A. presents, below and under the terms of number 4 of article 448 of the Commercial Companies Code, the list of shareholders which,as at 31 December 2010 and according to the records of the Company and information provided, own at least one tenth of the share capital.Company No. of Shares as at 31.12.2010 % Share CapitalTEIXEIRA DUARTE – Sociedade Gestora de Participações Sociais, S.A. 42.250.000 10,06%TDG – Sociedade Gestora de Participações Sociais, S.A. 154.640.240 36,82%LIST OF OWNERS OF QUALIFYING HOLDINGS AS AT 31 DECEMBER 2010In compliance with the applicable legal and regulatory provisions, namely those established in sub-paragraph c) of number 1 of article 9 of CMVMRegulation number 5/2008, and based on the Company's records and the information which has been received, TEIXEIRA DUARTE, S.A. discloses the list ofowners of qualifying holdings in its share capital as at 31 December 2010, indicating the number of shares owned and corresponding percentage votingrights, calculated under the terms of article 20 of the Securities Market Code.1. A TEIXEIRA DUARTE - Sociedade Gestora de Participações Sociais, S.A. is imputed, under the terms of the provisions in article 20 of the SecuritiesMarket Code and in conformity with the interpretation of the CMVM – with which it disagrees in relation to the matter presented in sub-paragraphs f)below –, a qualifying holding in the share capital and voting rights of the company TEIXEIRA DUARTE, S.A. of 227,723,249 (two hundred and and twentysevenmillion, seven hundred and twenty-three thousand and two hundred and forty-nine) shares, corresponding to 54.22% of the share capital andrespective voting rights, as a result of:a) 42,250,000 shares owned directly by it, corresponding to 10% of the share capital and voting rights;b) 154,640,240 shared owned by its subsidiary TDG – Sociedade Gestora de Participações Sociais, S.A., corresponding to 36.82% of theshare capital and voting rights;c) 5,899,800 shares owned by its subsidiary NGDI – Gestão e Investimento Imobiliário, S.A., corresponding to 1.40% of the share capital and votingrights;d) 10,300,000 shared owned by the Chairman of the Board of Directors of the company TEIXEIRA DUARTE – Sociedade Gestora de ParticipaçõesSociais, S.A., Mr. Pedro Pereira Coutinho Teixeira Duarte, corresponding to 2.45% of the share capital and voting rights;e) 5,153,575 shares owned by the other members of the Board of Directors of TEIXEIRA DUARTE – Sociedade Gestora de Participações Sociais, S.A.,corresponding to 1.23% of the share capital and voting rights (none of whom, individually, reach any qualifying holding);f) 9,479,634 shares owned by members of the Board of Directors of TDG – Sociedade Gestora de Participações Sociais, S.A. who are not members ofthe Board of Directors of the company indicated in sub-paragraph a) above, corresponding to 2.26% of the share capital and voting rights (noneof whom, individually, reach any qualifying holding), with this imputation having been made in conformity with the interpretation of the CMVM,where there is disagreement.2. Banco Comercial Português, S.A. is imputed, under the terms of the provisions in article 20 of the Securities Market Code and in conformity with theinterpretation of the CMVM, the qualifying holding of 42,049,716 shares, corresponding to 10.00% of the share capital and voting rights as a result of:a) 500 shares owned by Banco Millennium BCP Investimento, S.A., corresponding to 0.0001% of the share capital and voting rights;b) 41,999,716 shares owned by the Pensions Fund of the Banco Comercial Português Group corresponding to 9.9999% of the share capitaland voting rights*.3. Mr. Miguel Calainho de Azevedo Teixeira Duarte is imputed, under the terms of article 20 of the Securities Market Code, the qualifying holdingof 29,568,701 shares, corresponding to 7.04% of the share capital and voting rights, as a result of:a) 69,897 shares owned directly by him, corresponding to 0.02% of the share capital and voting rights;b) 29,404,164 shared owned by the company controlled indirectly by him CIMILE – Sociedade Gestora de Participações Sociais, S.A.,corresponding to 7.00% of the share capital and voting rights;c) 94,640 shared owned directly and indirectly by other members of the Board of Directors of the company CIMILE – Sociedade Gestora de ParticipaçõesSociais, S.A., other than Mr. Miguel Calainho de Azevedo Teixeira Duarte, corresponding to 0.02% of the share capital and voting rights;* Through communication received from Banco Comercial Português, S.A. on 8 February 2007, it was indicated that the holding company of the Pensions Fund of the BCP Group exercises itsvoting rights in an independent manner.58

CorporateGovernance Report 2010

Corporate Governance Report 2010CORPORATE GOVERNANCE REPORTPursuant to the applicable provisions, namely article 245-A of the Securities Market Code and Regulation number 1/2010 of the SecuritiesMarket Commission (CMVM), TEIXEIRA DUARTE, S.A. (TD,SA) presents its Corporate Governance Report relative to the financial year of 2010,complying with all the requirements of the model attached to the abovementioned Regulation. Whenever deemed necessary and applicable,comments and considerations will be made on the procedures followed by the Company.The TEIXEIRA DUARTE Group has, for many years, been concerned with the subject known as Corporate Governance and has adopted practicesreflecting values that are currently safeguarded by the regulations on this matter, always being attentive to the development of national andinternational rules and recommendations.The Company complies with all its corporate obligations, namely as an issuer of shares listed for trading on regulated markets, and takeson due responsibility to find a balance between the different recommendations issued by the various entities and the Company's reality, itsstructure, history, markets and operating sectors.CONTEXT OF THIS 1ST REPORT OF TEIXEIRA DUARTE, S.A.:In order to contextualise this first Corporate Governance Report issued by TD,SA, it is necessary to recall the development of the Group's corporaterestructuring process, started on 17 December 2009, the main objectives of which were the essential concentration of TEIXEIRA DUARTE- Engenharia e Construções, S.A. (TD-EC) in its core business activity, that is, the exercise of the civil construction and public works industry, inall its areas and related activities, and its replacement by TD,SA as the leading listed company of the Group.Hence, and after the first prior concentration - at the end of 2009 - of 68.54% of the share capital of TD-EC in TD,SA, there was an publictakeover bid, in the form of a public exchange offer for the entirety of the remaining share capital of TD-EC, which was held between 19 Julyand 6 August 2010.Following this acquisition, TD,SA increased the share capital to EUR 406,360,199, becoming the owner of 96.75% of the share capital ofTD-EC.After the conclusion of the above operation, the shares of TD,SA were listed for trading on the regulated market of Euronext Lisbon as of 16August, and on 21 September 2010 the shares of TD-EC were excluded from trading on that market, following the application for the loss ofits status as a public company and the respective decisions by the CMVM and Euronext Lisbon on this matter.From then on, TD,SA replaced TD-EC as the leading listed company of the TEIXEIRA DUARTE Group.Subsequently and with a view to the acquisition of the remaining shares of TD-EC that had not been acquired under the prior concentrationand/or public exchange offer, on 26 November 2011 TD,SA presented an acquisition offer aimed at the total control of TD-EC, under the termsestablished in article 490 of the Commercial Companies Code, composed of the exchange of one TD,SA share for every TD-EC share delivered.Once this phase of the use of the potestative acquisition mechanism had finalised, TD,SA became the owner of 100% of the share capital of60

Corporate Governance Report 2010TD-EC, that is, of all the 420,000,000 shares representing its share capital.Subsequently, on 23 December 2010, TD,SA deliberated the increase of its share capital of EUR 406,360,199 to EUR 420,000,000.To summarise:a. TD,SA acquired 100% of the share capital of TD-EC and replaced this entity as the leading listed Company of the TEIXEIRA DUARTE Group;b. TD,SA currently has a share capital of EUR 420,000,000 represented by 420,000,000 shares with the nominal value of EUR 1.00 each, allof which are tradable on the regulated market of Euronext Lisbon.In view of the above and taking into account that TD,SA is bound only by the duties arising from the fact that its shares have been listed fortrading on regulated markets since August of last year, - namely compliance with various recommendations on good practices of corporategovernance such as the disclosure of a report on this matter -, there is as yet little reportable information and, therefore, for certain situationsit was deemed more appropriate to report facts and data relative to the company which had previously been the leading listed entity of theTEIXEIRA DUARTE Group, TD-EC.STRUCTURE AND ORGANISATION OF THE REPORT:TD,SA has organised this Report in accordance with the model presented in the Annex to CMVM Regulation number 1/2010, and, throughsuggestion of the CMVM, has included in Chapter 0 a table describing all of the 54 Recommendations in the Corporate Governance Code issuedby this regulating entity, indicating therein which ones have been adopted or not by the Company and also including reference to the pointsof this text where such matters are addressed or the reason for their non-adoption are explained.The objectives of these options concerning the structure and inclusion of this table right at the beginning of the text are not only the rigorouscompliance with the new rules applicable as of this year, but also our interest in following-up the intention expressed by the CMVM of thestandardisation of these Reports and their easier analysis and consultation by the Market.CHAPTER 0Compliance Statement0.1. Indication of the location where the texts on corporate governance codes to which the issuer is subject and, if applicable,those which it has voluntarily chosen to subject itself, are available to the public.Apart from the applicable rules and regulations, namely the Commercial Companies Code, the Securities Market Code and Regulations ofthe CMVM, especially Regulation number 1/2010, TD,SA has chosen not adopt any Corporate Governance Code other than that issued by theCMVM on January 2010, which is available for consultation at www.cmvm.pt.0.2. List of the recommendations, adopted and not adopted, presented in the Corporate Governance Code of the CMVM61

Corporate Governance Report 2010or other that the company has decided to adopt, under the terms of the CMVM Regulation number 1/2010. For the effect,recommendations that are not followed entirely are considered as not adopted.0.3. Without prejudice to the provisions in the previous number, the company may also make an overall assessment,provided that reasonable grounds are presented, of the degree of adoption of groups of recommendations of interrelatedsubjects0.4. When the corporate governance structure or practices differ from the recommendations of the CMVM or other codesto which the company subscribes or has voluntarily adhered, the parts of each code which are not complied with or whichthe company considers are not applicable should be explained, as well as the respective grounds and other relevantobservations, in addition to clear indication of the part of the Report where the description of this situation can be foundPoints 0.2, 0.3 and 0.4 are developed simultaneously, since they are interrelated.Among the 54 Recommendations comprising the abovementioned Corporate Governance Code of the CMVM, the Company does not adopt16 and some of these only partially.The table below provides the integral reproduction of the text of these Recommendations with the same numbering of the aforementionedCorporate Governance Code, followed by an indication of their adoption or not and reference to the point in this Report where such matter isdescribed or where, observing the principle of "comply or explain", any non-adoption is justified.Recommendation Adoption ReferenceI.1.1The Chairman of the Board of the General Meeting must be provided with the supporting humanand logistic resources appropriate to his/her needs, considering the economic situation Yes CHAPTER Iof the company.I.1.2The remuneration of the Chairman of the Board of the General Meeting must be disclosed inthe Annual Corporate Governance Report.Yes I.3I.2 PARTICIPATION IN THE GENERAL MEETINGI.2.1The period of time in given in advance for the receipt, by the Board, of the statements ofdeposit or blocking of shares for participation in the General Meeting must not exceed five Yes I.4business days.I.2.2In the case of the suspension of the General Meeting, the company should not impose theblocking to remain during the entire period until the session is resumed, with the ordinary Yes I.5period of time in advance required in the first session being sufficient.I.3 VOTING AND THE EXERCISE OF VOTING RIGHTSI.3.1The companies must not establish any statutory restriction to voting by correspondence and,when adopted and permissible, to voting through electronic correspondence.Yes I.9I.3.2The statutory period of time in advance for the receipt of votes issued by correspondence mustnot exceed three business days.Yes I.11I.3.3Companies should ensure proportionality between voting rights and shareholder participation,preferably through a statutory provision according to which one share corresponds to onevote. Proportionality is not to be followed by companies which, namely: i) have shares whichdo not confer the right to vote; ii) establish that rights to vote above a certain number are notto be counted, when issued by a single shareholder or by shareholders related to the former.YesI.6I.762

Corporate Governance Report 2010I.4 DELIBERATIVE QUORUMCompanies must not establish a constitutive or deliberative quorum greater than that establishedby Law.I.4I.5 MINUTES AND INFORMATION ON ADOPTED DELIBERATIONSExcerpts from the minutes of the General Meetings or documents of similar content shouldbe available to the shareholders on the company's website within five days after the GeneralMeeting, even if they do not constitute privileged information. The disclosed informationshould cover the deliberations taken, share capital represented and voting results. This informationmust be kept on the company's website for at least three months.I.6 MEASURES RELATIVE TO CORPORATE CONTROLAny measures adopted with a view to preventing the success of public takeover bids shouldrespect the interests of the company and its shareholders. Any articles of association of companieswhich, respecting this principle, set a limit on the number of votes which may be heldor exercised by a single shareholder, individually or jointly with other shareholders, must alsoI.6.1establish the commitment that at least every five years the maintenance or not of this statutoryprovision will be subject to deliberation at the General Meeting – with no requirement ofa quorum larger than that legally established – and that in this deliberation all the votes castwill be counted, without the application of the above limit.Defensive measures must not be adopted if they cause an automatic erosion of company assetsin the event of the transfer of control or change of the composition of the managementI.6.2board, thereby jeopardising the free transferability of shares and the free assessment by theshareholders of the performance of members of the management board.II. MANAGEMENT AND SUPERVISORY BODIESII.1 GENERAL SUBJECTSII.1.1 STRUCTURE AND COMPETENCEThe management board should assess the adopted model in its annual Governance Report,II.1.1.1 identifying any constraints to its functioning and proposing measures of action that, in itsopinion, are suitable to overcome them.Companies should create internal risk control and management systems to safeguard theirvalue and enhance the transparency of their corporate governance, permitting the identificationand management of risks. These systems should include at least the following components:i) establishment of strategic corporate objectives on matters of risk-taking; ii) identificationof the main risks related to the specific activity exercised and any events which mightimply risks; iii) analysis and measurement of the impact and probability of the occurrence ofII.1.1.2each potential risk; iv) risk management with a view to the alignment of the risks effectivelyincurred with the company's strategic risk-taking; v) mechanisms for the control of the executionof the adopted risk management measures and their effectiveness; vi) adoption ofinternal mechanisms of information and communication on the different components of thesystem and risk warnings; vii) periodic assessment of the implemented system and adoptionof any necessary changes.No I.8NoYesYesYesNoI.13I.14I.7I.20I.21I.22II.1II.563

Corporate Governance Report 2010II.1.1.3II.1.1.4II.1.1.5II.1.2II.1.2.1II.1.2.2II.1.2.3II.1.3.1II.1.3.1II.1.3.2II.1.4II.1.4.1The management board should ensure the creation and functioning of the internal controland risk management systems, with the supervisory board being responsible for assessingthe functioning of these systems and proposing any necessary adjustment to the company'sneedsNoII.6Companies should, in their annual Corporate Governance Report: i) identify the main economic,financial and legal risks to which the company is exposed during the exercise of its YesII.5II.9activity; ii) describe the action and effectiveness of the risk management system.The management and supervisory bodies must have functioning regulations, which must bedisclosed on the company's website.NoII.7INCOMPATIBILITIES AND INDEPENDENCEThe Board of Directors must include a sufficient number of non-executive members so asguarantee effective capacity to manage, supervise and assess the activities of the executivemembers.NoII.1II.8Amongst the non-executive Directors, there should be an adequate number of independentDirectors, taking into consideration the size of the company and its shareholder structure,II.1Nowhich cannot under any circumstances, be less than one quarter of the total number of Directors.II.8The assessment of the independence of the non-executive members made by the managementboard must take into account the legal and regulatory rules in force on the independencerequirements and incompatibility system applicable to members of the other governingNot Applicablebodies, ensuring systematic and temporal coherence in the application of independence criteriato the entire company. A Director should not be considered independent if she/he cannothold this capacity in another governing body through force of the applicable rules.ELIGIBILITY AND APPOINTMENTAccording to the applicable model, the Chairman of the Supervisory Board, Audit Committeeor Financial Matters Committee must be independent and possess adequate competences to Yesperform the respective duties.The process of selection of candidates to non-executive Directors must be designed in such aNot Applicableway as to prevent interference by the executive Directors.POLICY ON THE COMMUNICATION OF IRREGULARITIESThe company must adopt a policy of communication of any internal irregularities which haveallegedly occurred within the organisation, with the following elements:i) indication of the means which may be used for the internal communication of irregularYespractices, including the persons with legitimacy to receive the communications;ii) indication of the treatment to be made of the communications, including confidential treatment,if this is wished by the declarant.II.1.4.2 The general guidelines of this policy must be disclosed in the Corporate Governance Report. Yes II.35II.1II.8II.12II.13II.16II.3564

Corporate Governance Report 2010II.1.5REMUNERATIONThe remuneration of the members of the management board should be structured in order toallow the alignment of their interests with those of the company's long term interests, basedon the assessment of performance and discouraging excessive risk-taking. For this effect, theremunerations should be structured as follows:i) The remuneration of the Directors which perform executive duties should include a variablecomponent based on an assessment of performance, carried out by thecompetent bodies of the company, in accordance with predetermined measurable criteria,which consider the company's real growth and wealth effectively created for the shareholders,its long term sustainability and risks taken, as well as compliance with the rules applicable tothe company's activity.(ii) The variable component of the remuneration should be reasonable in relation to the fixedcomponent of the remuneration, and maximum limits should be established for all the components.(iii) A significant part of the variable remuneration should be deferred for a period not lessII.1.5.1than three years, and its payment should be subject to the continued positive performance ofthe company over this period.NoII.32II.33(iv) The remuneration of the members of the management board should not sign contracts,either with the company or third parties, which have the effect of mitigating the risk inherentto the variability of their remuneration established by the company.(v) Until the end of their term of office, the executive Directors should keep the companyshares that they have obtained through variable remuneration schemes, up to the limit oftwice the value of the annual total remuneration, with the exception of any which might needto be disposed of in order to pay taxes arising from the benefit of these same shares.(vi) When the variable remuneration includes the attribution of options, the beginning of theperiod of exercise should be deferred for a period not less than three years.(vii) Appropriate legal instruments should be established so that the compensation set for anyform of unfair dismissal of a Director is not paid if the dismissal or termination by agreementis due to the inadequate performance of the Director.(viii) The remuneration of the non-executive members of the management board should notinclude any component whose value depends on the company's performance or value.The statement on the policy of remuneration of the management and supervisory bodies referredto in article 2 of Law number 28/2009, of 19 June, should, in addition to the contentII.1.5.2referred to therein, present sufficient information: i) on which groups of companies whoseremunerative policy and practices were taken as comparative elements for the establishmentNot ApplicableII.30of remuneration; ii) on payments relative to dismissal or termination by agreement of theduties of Director.65

Corporate Governance Report 2010II.1.5.3II.1.5.4II.1.5.6II.1.5.7II. 2II.2.1II.2.2II.2.3II.2.4The remuneration policy statement referred to in article 2 of Law number 28/2009 shouldalso include the remunerations of the senior managers in observance of number 3 of article248-B of the Securities Market Code and whose remuneration contains an important variablecomponent. The statement should be detailed and the presented policy should take intoaccount the company's long term performance, compliance with the rules applicable to thecompany's activity and restraint on excessive risk-taking.The proposal regarding the approval of plans to attribute shares and/or share purchase options,or based on variations in the price of the shares, to members of the management andsupervisory bodies and other senior managers should be submitted to the General Meeting ofShareholders, in observance of number 3 of article 248-B of the Securities Market Code. Theproposal should contain all the elements necessary for an appropriate assessment of the plan.The proposal should be accompanied by the regulations of the plan or, if it has not yet beenprepared, the general conditions that it must follow. Likewise, the main characteristics of theretirement benefits scheme established in favour of the members of the administrative andsupervisory bodies and other senior managers, should be approved at the General Meetingof Shareholders, in observance of number 3 of article 248-B of the Securities Market Code.At least one representative of the remuneration committee must be present in the GeneralMeeting of Shareholders.The value of the remunerations received, as a whole and individually, from other companiesof the group and the pension rights acquired during the year in question must be disclosed inthe annual Corporate Governance Report.BOARD OF DIRECTORSWithin the limits established by the Law for each management and supervisory structure, andunless as a result of the small size of the company, the Board of Directors must delegate thedaily management of the company, with the delegated competences being identified in theannual Corporate Governance Report.The Board of Directors must ensure that the company acts in accordance with its objectives,and must not delegate its competence, namely, with respect to:i) defining the general strategy and policy of the company;ii) defining the corporate structure of the group;iii) decisions which should be considered strategic due to their value, risk or special characteristics.Should the Chairman of the Board of Directors perform executive functions, the Board of Directorsmust find efficient mechanisms to coordinate the work of the non-executive members,which ensure, in particular, that they can make decisions in an independent and informedmanner. These mechanisms should be duly explained to the shareholders in the CorporateGovernance Report.The Annual Management Report should include a description of the activity developed by thenon-executive Directors, in particular referring to any constraints faced.Not Applicable II.30Not ApplicableI.17III.10Yes I.15II.30YesII.31II.33NoII.3YesII.3Not Applicable II.8Not Applicable II.866

Corporate Governance Report 2010II.2.5The company should explain its policy of rotation of the areas of responsibility within theBoard of Directors, namely of the person responsible for financial matters, and provide informationon this in the annual Corporate Governance Report.CHIEF EXECUTIVE OFFICER, EXECUTIVE COMMITTEE AND EXECUTIVE BOARD OF DI-RECTORSWhen requested by other members of the governing bodies, the Directors who performexecutive duties should provide, in due time and in a form appropriate to the request, anyinformation requested by them.The Chairman of the Executive Committee should send, respectively, to the Chairman of theBoard of Directors and, when applicable, the Chairman of the Supervisory Board or AuditCommittee, the call notices and minutes of the respective meetings.The Chairman of the Executive Board of Directors should send to the Chairman of the SupervisoryBoard and to the Chairman of the Financial Matters Committee the call notices andminutes of the respective meetings.GENERAL AND SUPERVISORY BOARD, FINANCIAL MATTERS COMMITTEE, AUDITCOMMITTEE AND SUPERVISORY BOARDThe General and Supervisory Board, in addition to performing the supervisory duties to whichit is committed, should also carry out an advisory role and ensure the follow-up and continuousassessment of the company's management by the Executive Board of Directors. Amongstthe matters on which the General and Supervisory Board should issue opinions, are the following:i) the definition of the general strategy and policy of the company;ii) the corporate structure of the group;iii) decisions which should be considered strategic due to their value, risk or special characteristics.The Annual Reports on the activity developed by the General and Supervisory Board, FinancialMatters Committee, Audit Committee and Supervisory Board should be disclosed on thecompany's website, together with the presentation of accounts.The Annual Reports on the activity developed by the General and Supervisory Board, FinancialMatters Committee, Audit Committee and Supervisory Board should include the descriptionof the supervisory activities developed referring to any constraints which have been encountered.The Financial Matters Committee, Audit Committee and Supervisory Board, according to theapplicable model, should represent the company, for all effects, before the external auditor,being responsible, namely, for proposing the provider of this service and its remuneration,ensuring the existence of the appropriate conditions for the provision of the services within thecompany, as well as being the spokesperson of the company and first receiver of the respectivereports.The Financial Matters Committee, Audit Committee and Supervisory Board, according to theapplicable model, should assess the external auditor on an annual basis and propose his/herdismissal to the General Meeting whenever there are fair grounds for the effect.NoII.11II.3II.3.1YesII.1II.3.2Not ApplicableII.13II.3.3Not ApplicableII.13II.4II.4.1Not ApplicableII.1II.4.2YesII.4II.4.3YesII.4II.4.4NoII.24II.4.5NoII.2467

Corporate Governance Report 2010II.4.6II.5II.5.1II.5.2II.5.3The internal audit services and the services ensuring compliance with the rules applied to thecompany (compliance services) should report functionally to the Audit Committee, Generaland Supervisory Committee or, in the case of companies adopting the Latin model, to anindependent Director or the Supervisory Board, independently of the hierarchical relation ofthese services with the company's executive management.SPECIALISED COMMITTEESUnless as a result of the small size of the company, the Board of Directors and General and SupervisoryBoard, according to the adopted model, should create the committees which provenecessary to:i) ensure a competent and independent assessment of the performance of the executive Directorsand for the assessment of their own overall performance, as well as that of the variousexisting committees;ii) reflect on the adopted governance system, verify its effectiveness and propose to the competentbodies the measures to take with a view to its improvement;iii) identify, in due time, potential candidates with the high profile necessary for the performanceof the duties of Director.The members of the Remuneration Committee or equivalent should be independent from themembers of the management board and include at least one member with knowledge andexperience on matters of remuneration policy.No legal or natural person who has provided, during the last three years, services to the anystructure directly under the Board of Directors, to the company's Board of Directors or which/who has an current relationship with any consultant of the company should be contracted tosupport the Remuneration Committee. This recommendation is also applicable to any naturalor legal person is related to such persons through a work or service contract.NoNoNoNot ApplicableII.5.4 All the committees should prepare minutes of the meetings they hold. Yes II.38III. INFORMATION AND AUDITSIII.1 GENERAL INFORMATION DUTIESIII.1.1Companies should ensure the existence of a permanent contact with the market, respectingthe principle of shareholder equality and taking precautions against asymmetries in access toinformation on the part of investors. For this purpose, the company should have an investorYes CHAPTER IIIsupport office.III.1.2The following information available on the company's website should be disclosed in English:a) The corporate name, capacity as a public company, head office and other elements mentionedin article 171 of the Commercial Companies Code;b) Articles of Association;c) Identity of the members of the governing bodies and representative for market relations;d) Investor Support Office, respective functions and contacts;e) Documents presenting the accounts;f) Six-monthly calendar on corporate events;g) Proposals presented for discussion and voting at the General Meeting;h) Notice of meetings relative to the General Meeting.Yes CHAPTER IIIII.5II.2II.36II.38II.3968

Corporate Governance Report 2010III.1.3Companies should promote the rotation of the auditor at the end of every two or three mandates,according to whether they last four or three years. Their maintenance beyond this periodshould be justified by a specific opinion of the supervisory board which explicitly reflects onthe conditions of independence of the auditor and advantages and costs of the auditor's replacement.The external auditor should, under its competences, verify the application of the remunerationpolicies and systems, the effectiveness and functioning of the internal control mechanismsand report any flaws to the company's supervisory board.The company must not contract from the external auditor, or from any entities in a holdingrelationship or which are part of the same network, any services other than audit services.If there are reasons to contract such services, which should be approved by the supervisoryboard and explained in its annual Corporate Governance Report, they should not amount tomore than 30% of the total value of the services provided to the company.CONFLICT OF INTERESTSRELATIONS WITH SHAREHOLDERSThe company's business with qualifying shareholders or with entities in any relation withthem, under the terms of article 20 of the Securities Market Code, should be carried out undernormal market conditions.Any business of significant relevance with qualifying shareholders or with entities in any relationwith them, under the terms of article 20 of the Securities Market Code, should be submittedto the prior opinion of the supervisory board. This board should establish the necessaryprocedures and criteria for the definition of the relevant level of significance of this businessand the other terms of its intervention.Not Applicable.III.18III.1.4YesIII.17III.1.5YesIII.17IV.IV.1IV.1.1YesIII.12IV.1.2NoIII.13CHAPTER IGeneral MeetingThe General Meeting of the Company represents all its shareholders, and its deliberations, when taken under the terms of the Articles of Associationand Law, are binding to all shareholders, even those absent, in disagreement or incapable of action.The General Meeting is composed of shareholders with voting rights as well as persons who, entitled or not to such rights, hold positions aspermanent members of the Governing Bodies and the Company Secretary.The Board of the General Meeting is composed by a Chairman, a Deputy Chairman and a Secretary.The Chairman of the Board of the General Meeting is responsible for calling the General Meetings and directing their agenda, as well asperforming any other duties entrusted by the Law, the Articles of Association or through delegation of the actual General Meeting. The DeputyChairman shall replace the Chairman in the latter's absence or impediment, as well as whenever requested by the latter, and is responsible foradvising the Chairman in the performance of the latter's duties. The Secretary is responsible for assisting the Chairman in the performance ofthe latter's duties and ensuring the completion of all the administrative work relative to the General Meeting.69

Corporate Governance Report 2010Furthermore, and with the support of the Company Secretary and other services of the Company, the Chairman of the Board of the GeneralMeeting is provided with the appropriate human and logistic resources for the proper performance of the Chairman's duties, namely for thepreparation and dissemination of the call notices and other preparatory information, as well as for the receipt, processing and filing of sharecertifications, letters of intention to participate, letters of representation, proposals for submission to the assessment and voting of the shareholders,attendance list and, for the organisation of the General Meetings.I.1. Identification of the members of the Board of the General Meeting.Currently, the Board of the General Meeting is composed of the following members:Chairman:Mr. Rogério Paulo Castanho Alves, lawyer, with professional domicile at Largo de S. Carlos, n.º 3, 1200-410 Lisbon,PortugalDeputy Chairman: Mr. José Gonçalo Pereira de Sousa Guerra Costenla, lawyer, with professional domicile at Largo de S. Carlos, n.º 3,1200-410 Lisbon, PortugalSecretary:Mr. José Pedro Poiares Cobra Ferreira, lawyer, with professional domicile at Lagoas Park, Edifício 2, 2740-265 PortoSalvo, Oeiras, Portugal.The members of the Board of the General Meeting fully comply with the requirements of independence, and there is no situation of incompatibilityfor the performance of these duties by any of them, in strict observance of the applicable regulations (article 414 and 414-A, ex vi ofarticle 374-A, all of the Commercial Companies Code).I.2. Indication of the date of commencement and termination of office.all the identified members of the Board of the General Meeting were appointed through the Memorandum of Association, on 30 November2009, to perform duties in that body during the two-year period 2009/2010.I.3. Indication of the remuneration of the chairman of the Board of the General Meeting.The members of the Board of the General Meeting, under the current system established in the Commercial Companies Code, namely theprovisions in 422-A, ex vi of article 374-A, receive a fixed remuneration for the performance of the duties inherent to the respective positions,determined by the Remuneration Committee established in article 11 of the Articles of Association.Under the terms and for the effect of the applicable regulatory and recommended provisions, it is disclosed that the remuneration of theChairman of the Board of the General Meeting, during 2010, was EUR 20,000.00 (twenty thousand Euros).70

Corporate Governance Report 20101.4. Indication of the time in advance required for the deposit or blocking of shares for participation in the General Meeting.As established in the actual Articles of Association (article 13), only shareholders with at least one voting right, on the registration date, correspondingto 0 hours (GMT) of the 5th business day prior to the date of the General Meeting, may participate in the General Meeting and discussand vote therein. The exercise of these rights is not jeopardised by the transfer of the shares after the registration date, nor does it dependon their blocking between this date and the date of the General Meeting. Anyone wishing to participate in the General Meeting should statethis intention, in writing, addressed to the Chairman of the Board of the General Meeting and to the financial broker where the individualisedregistration has been opened up to the day prior to the date mentioned above, and may, for the effect, use electronic mail. Anyone who hasstated the intention to participate in the General Meeting and transfers the ownership of the shares between the registration date and the endof the General Meeting, should immediately communicate this fact to the Chairman of the Board of the General Meeting and to the CMVM.The Chairman of the Board of the General Meeting does not establish any restrictions on the acceptance of statements received after thestatutorily established dates.I.5. Indication of the rules applicable to the blocking of shares in the case of the suspension of the General Meeting.In the case of the suspension of the General Meeting, the company should not impose the blocking of shares to remain during the entireperiod until the session is resumed, although it is necessary that the shareholders confirm their capacity, under the terms described in point1.4 above.I.6. Number of shares corresponding to one vote.Under the terms of article 13 of the Articles of Association, each share corresponds to one vote.I.7 Indication of the statutory rules establishing the existence of shares which do not confer the right to vote or whichestablish that rights to vote above a certain number should not be counted, when issued by a single shareholder or byshareholders related to the former.Although the Articles of Association foresee this possibility, as results from the content of its article 7, the truth is that there are no - and havenever been any – shares without voting rights.There are no statutory provisions which limit the number of votes, when issued by a single shareholder or by shareholders related to theformer, or that establish that rights to vote above a certain number should not be counted, when issued by a single shareholder or by shareholdersrelated to the former.I.8. Existence of statutory rights on the exercise of voting rights, including constitutive and deliberative quorums or systemsprivileging rights related to assets.As established in article 13 of the Articles of Association, and as described in 1.4, only shareholders with at least one voting right, on the71

Corporate Governance Report 2010registration date, corresponding to 0 hours (GMT) of the 5th business day prior to the date of the General Meeting, may participate in theGeneral Meeting and discuss and vote therein. The exercise of these rights is not jeopardised by the transfer of the shares after the registrationdate, nor does it depend on their blocking between this date and the date of the General Meeting. Anyone wishing to participate in the GeneralMeeting should state this intention, in writing, addressed to the Chairman of the Board of the General Meeting and to the financial brokerwhere the individualised registration has been opened up to the day prior to the date mentioned in number 1 of the present article, and may,for the effect, use electronic mail. Anyone who has stated the intention to participate in the General Meeting and transfers the ownership ofthe shares between the registration date and the end of the General Meeting, should immediately communicate this fact to the Chairman ofthe Board of the General Meeting and to the CMVM.In the case of the joint ownership of shares, only one of the owners, empowered to represent the others, may participate in the General Meetings.Shareholders who are natural persons, with voting rights, may be represented at the General Meetings by means of a document issued underthe terms of the Law.Shareholders who are incapable of acting and legal persons, with voting rights, may be represented by persons legally empowered for such.For this purpose, the Company provides, on its website and at its head office, a power of attorney form, in compliance with the provisions inarticle 23 of the Securities Market Code, which may be used by shareholders wishing to be represented at the General Meeting.All the representations indicated above must be communicated to the Chairman of the Board of the General Meeting through letter, dulysigned and received at the head office up to three calendar days before the date scheduled for the respective General Meeting.In the case of General Meetings attended by all the shareholders or unanimous deliberations in writing, the period of time in advance describedabove will not be applicable in relation to the availability of the shares and receipt of the respective certifications, as well as the lettersof representation.The deliberations of the General Meeting are taken by the majority of the votes cast, without prejudice to the legal provisions which, in certaincases, might require qualifying majorities or establish other forms of acceptance of the proposals.There are no restrictions on voting rights, namely limits on the exercise of voting rights subject to the ownership of a number or percentage ofshares, periods of time imposed for the exercise of voting rights - other than those described below for voting by correspondence - or systemsprivileging rights relative to assets.Regarding the existence of provisions on constitutive quorums, article 15 of the Articles of Association establishes that the General Meetingmay deliberate validly, on first call, whenever shareholders are present or represented owning shares corresponding to more than half of theshare capital and, on second call, independently of the number of shareholders present or represented and the percentage of their sharecapital, subject to the exceptions determined by compulsory Law.The shareholders consider the requirement of the constitutive quorum for the General Meeting to deliberate on first call as a supplementaryguarantee of their representativeness in this governing body, in addition to which this rule has neither ever prevented the holding of thesemeetings of shareholders on first call, nor that the General Meetings of TD,SA record a participation higher, as a rule, than 75% of the sharecapital.Also in line with this choice is the fact that TEIXEIRA DUARTE – Sociedade Gestora de Participações Sociais, S.A. (a company owned by theTeixeira Duarte family) is imputed over half of the voting rights, ensuring, with the presence of this group of entities, the minimum quorumfor the General Meeting to be held on first call.72

Corporate Governance Report 2010There are no measures with a view to preventing any public takeover bids, and, furthermore, the Article of Association do not establish anylimit to the number of votes which can be held or exercised by a single shareholder, individually or in a concerted manner with other shareholdersI.9. Existence of statutory rules on the exercise of the right to vote by correspondence.The Articles of Association establish that shareholders with voting rights who intend to exercise them by correspondence, apart from complyingwith all the conditions and periods of time referred to above in order to demonstrate this capacity, should send a letter addressed to theChairman of the Board of the General Meeting and which must be received at the head office within the period of time stipulated in the callnotice, expressing therein their intention to exercise this right and indicating their identification, domicile and number of shares owned, whichwill be confirmed through the information certified by the financial institution where these shares are registered, where the latter will prevail.This letter should also contain the authenticated signature of the shareholder or person binding the former, or in the case of natural persons,accompanied by a legible photocopy of the shareholder's Identity Card or equivalent document.Together with the abovementioned letter, the shareholders should include, in closed envelopes, their voting statements regarding each of thepoints of the Agenda, in a clear and unambiguous manner, followed by the their signature, in a manner identical to that in the cover letter.The envelopes should be marked with the following: "Contains voting statement on point number (indication of the respective number) ofthe Agenda".For the execution of the procedures indicated above, the Company provides drafts of the letter and voting ballot on its website and at its headoffice.The envelopes containing the voting statements cast under the terms described above will be opened and considered by the Chairman of theBoard of the General Meeting at the time of the voting on each point of the Agenda, where any votes included in statements which are notaccepted will be counted as not cast.Votes by correspondence are counted as negative in relation to proposals for deliberation presented after they have been cast.The presence or representation at the General Meeting of any shareholder who has exercised the right to vote by correspondence determinesthe revocation of votes expressed in this manner previously.The authenticity of voting by correspondence, its confidentiality up to the time of voting and respective processing will be ensured by theChairman of the Board of the General Meeting.Independently of the means chosen for this effect, whether in the text of the call notices for the General Meetings, or in the prior informationprovided for this purpose, the terms and conditions for the exercise of voting rights are always clearly and completely explained, includingvoting by correspondence.I.10. Provision of a model for the exercise of the right to vote by correspondence.For the exercise of the right to vote by correspondence and for the good execution of the procedures indicated above, the Company provides73

Corporate Governance Report 2010drafts of the letter and voting ballot, as well as instructions for their respective completion, on its website and at its head office.I.11. Requirement of a period of time between the receipt of votes cast by correspondence and the date of the GeneralMeeting.The Articles of Association establish that shareholders with the right to vote who intend to exercise it by correspondence, should send a letteraddressed to the Chairman of the Board of the General Meeting and that it should be received at the head office within the period of timestipulated in the call notice. The established period of time between the receipt of votes cast by correspondence and the date of all the GeneralMeetings of 2011 was one day.I.12. Exercise of the right to vote through electronic means.TD,SA believes that the specific security requirements inherent to the voting process are very significant, namely with respect, on the one hand,to the technical means necessary to verify the authenticity of the corresponding voting statements, as well as to guarantee the integrity andconfidentiality of the respective contents, and, likewise, recognises the high level of security and operational reliability required in the receiptof these statements.Due to the considerations referred to above and the fact that the General Meetings of the leading listed company of the TEIXEIRA DUARTEGroup traditionally has a very high representation of share capital, the Company has not implemented the possibility of the exercise of votingrights through electronic means.I.13. Possibility of the shareholders accessing excerpts of the minutes of the General Meetings on the company's websiteduring the five days after the General Meeting.The minutes relative to the General Meetings held during 2010 were provided on the Company's website, in accordance with the applicablerecommendations and regulatory provisions, although it was not possible to make them available during the subsequent five days due to thelack of availability of the teams and persons involved in the execution of this task in such a short period of time, namely because, in view ofthe results of the voting, it was not considered a priority to do so.Furthermore, on the actual day of the General Meetings, or on the day immediately subsequent, various informative elements were disclosedon those meetings, including not only the deliberations taken, but also the share capital represented and results of the voting.I.14. Existence of an historical record on the company's website, with the deliberations taken in the company's GeneralMeetings, the share capital represented and results of the voting, relative to the previous 3 years.74

Corporate Governance Report 2010The Company's website provides the historical record of the attendance lists, agendas and deliberations taken relative to all the General Meetingsof TD,SA.Since the company was constituted on 30 November 2009, the elements mentioned above refer only to these last 2 years, that is 2009 and2010.However, it should be noted that the same website provides identical information on the General Meetings of the company which was previouslythe leading listed company of the Group, TD-EC.I.15. Indication of the representative(s) of the remuneration committee present at the General Meetings.The following members of the Remuneration Committee were present at the General Meetings:a) Annual General Meeting:a. Session of 27 May 2010:--Mr. Pedro Pereira Coutinho Teixeira Duarte--Mr. Manuel Pereira Coutinho Teixeira Duarte--Mr. António Carlos Calainho de Azevedo Teixeira Duarteb. Session of 26 July 2010:--None of the members of the Remunerations Committee were present.c. Session of 6 September 2010:--Mr. Pedro Pereira Coutinho Teixeira Duarte--Mr. Manuel Pereira Coutinho Teixeira Duarteb) General Meeting of 23 December 2010:--Mr. Pedro Pereira Coutinho Teixeira Duarte--Mr. Manuel Pereira Coutinho Teixeira Duarte--Mr. António Carlos Calainho de Azevedo Teixeira DuarteOn this issue, it should be recalled that the work of the Annual General Meeting of the Company was suspended in order to allow for the distribution ofnet income to be carried out within a period to enable the distribution of these amounts to shareholders who had adhered to the public takeover bid.75

Corporate Governance Report 2010It was purely in this context that, during the meeting of 26 July, the work of the Annual General Meeting was suspended, where the onlyoutstanding subject of the Agenda was not even assessed.In this way, in both sessions of the Annual General Meeting where deliberations were taken, at least two members of the Remuneration Committeewere present, and in the General Meeting of 23 December all three members of this Committee were once again present.I.16. Information on the intervention of the General Meeting relative to the company's remuneration policy and assessmentof the performance of the management board members and other senior managers.The intervention of the General Meeting relative to the company's remuneration policy and assessment of the performance of the membersof the governing bodies and other senior managers (when applicable) is conducted, in the first place, through the analysis and approval ofthe documents presenting the accounts at the Annual General Meeting and through the general assessment of the management, under theterms and with the effect established in the combined provisions of articles 376 and 455 of the Commercial Companies Code, carried outevery year at the meeting of shareholders, as well as through the election of its members and selection and appointment of the members ofthe Remuneration Committee which, in accordance with its assessment of performance and other criteria described below, establishes theremuneration of each member of the Governing Bodies, including the Board of Directors.Furthermore, the General Meeting also performs the key role of being responsible for the approval of the remuneration policy statement whichshould be followed and disclosed annually in the Corporate Governance Report, submitted for the assessment of the shareholders.In 2010, the Remuneration Committee did not submit the remuneration policy statement for the assessment of the shareholders, relative tothe Company's senior managers, in observance of number 3 of article 248-B of the Securities Market Code, because, on that date, the Companywas not yet bound to such duties and since the members of the Board of Directors did not receive any remuneration for the performanceof their duties.However, it should be noted that the statement, issued by the Remuneration Committee of TD-EC, at that time the leading listed companyof the Group, on the policy of the remuneration of the Management and Supervisory Bodies was approved at the General Meeting of thatcompany, on 27 May 2010, with 99.71% of the votes in favour, 0.01% of abstentions and 0.29% of the votes against.I.17. Information on the intervention of the General Meeting regarding the proposal of plans to attribute shares and/orshare purchase options, or based on variations in the price of the shares, to members of the management and supervisorybodies and other senior managers, in observance of number 3 of article 248-B of the Securities Market Code, as well as onthe elements presented at the General Meeting with a view to the proper assessment of these plans.There are no plans to attribute shares, and/or share purchase options or based on variations in the price of the shares.Consequently, there is no intervention of the General Meeting on this matter.76

Corporate Governance Report 2010I.18. Information on the intervention of the General Meeting regarding the approval of the main characteristics of theretirement benefits system extended to the members of the management and supervisory bodies and other senior managers,in observance of number 3 of article 248-B of the Securities Market Code.The Remuneration Committee is responsible for establishing all the amounts paid in this context to any retired former Directors, under allcircumstances.The Remunerations Committee is also responsible for establishing the supplementary pension schemes, under the terms of the provisions inarticle 22 of the Articles of Association.The General Meeting reserves the right to appoint the members of the Remuneration Committee which is exclusively competent to decideon these matters.I.19. Existence of a statutory rule establishing the duty to subject, at least every five years, to the General Meeting, themaintenance or elimination of the statutory rule establishing the limitation of the number of votes which can be held orexercised by a single shareholder individually or in a concerted manner with other shareholders.There is no statutory rule with these characteristics (cf. I.7).I.20. Indication of defensive measures which have the effect of automatically leading to a serious erosion of companyassets in the event of the transfer of control or change of the composition of the management board.There are no measures with these characteristics.I.21. Significant agreements of which the company is a party and which enter into force, are altered or cease in the eventof a change of control of the company, as well as the respective effects, unless, due to their nature, their disclosure wouldbe seriously harm the company, except if the company is specifically obliged to disclose this information due to otherlegal requirements.There are no agreements with these characteristics.I.22. Agreements between the company and members of the management board and senior managers, in observance ofnumber 3 of article 248-B of the Securities Market Code, which establish compensation in the case of resignation, unfairdismissal or termination of the work relation following a change in the control of the company.There are no agreements with these characteristics. The company follows the policy of not undertaking any payments related to the earlytermination of the exercise of duties by the Directors or other senior managers, as well as not signing any agreements relative to these matters.77

Corporate Governance Report 2010CHAPTER IIManagement and Supervisory BodiesSection I – General IssuesII.1. Identification and composition of the governing bodies.Since its constitution in 2009, the Company adopted a Corporate Governance model known as the "monista latino" (Latin unitary boardstructure), whose governing bodies comprise, in addition to the General Meeting and its respective Board, a Board of Directors and twoautonomous Supervisory Bodies: the Supervisory Board and the Chartered Accountants Company, taking into account their competences andrequirements of compatibility and independence.On this issue, it is important to note the collaboration between all these structures of the Group, as well as the advantages arising from thesesynergies, reflected in the privileged and effective manner of the achievement of objectives undertaken by all as collection action.In this context and in compliance with recommendation number II.1.1.1 of the Corporate Governance Code of the CMVM, the Board of Directorsdiscloses that the adopted corporate governance model fully complies with its base objectives, that is, of ensuring that the Companymaintains good levels of operation and efficiency in the performance of duties by each governing body, both independently and jointly.Indeed, the Board of Directors is composed exclusively by executive members, which is reflected in the effectiveness, operationality andproximity of the matters entrusted to them, while the total independence of the members of the Supervisory Board allows for impartial anduseful intervention in the supervision of the Company's activity, not only from an accounting point of view - where it benefits from the regularintervention of the Chartered Accountants Company - but also from a policy perspective, in this case with the appropriate limits and scopeessential to safeguard compliance with the legal and regulatory rules in force, all with a view to achieving constant transparency and properlevels of disclosure of information to the market in general and to the shareholders, especially at the General Meeting.The TEIXEIRA DUARTE Group has chosen to keep all the Directors of the leading listed company in executive duties since the duties whichwould have been entrusted to any non-executive Directors – namely regarding supervision, monitoring and assessment of the activity ofthe executive members - are carried out, with full effectiveness, by the Supervisory Board, Remuneration Committee and General Meeting.Particular note should also be made of the good interrelations between all the governing bodies, not only between the Chartered AccountantsCompany and the Supervisory Board, which hold periodic meetings, but also between these bodies and the Board of Directors, whereby allthe Directors have provided the information requested by other members of the governing bodies in due time and in an appropriate manner.This model has also proved to be suitable to the modus operandi of the Company, its structures and members comprising the governingbodies, particularly those of the Board of Directors.Under the terms of number 1 of article 17 of the Articles of Association, the Board of Directors is composed on a minimum of five andmaximum of eleven members elected at the General Meeting, which must appoint, from amongst them, the member who will perform theduties of Chairman.In the beginning of 2010, the Board of Directors was composed of eight members, counting with a Chairman and seven Directors, all withexecutive duties, but on 23 February 2010, Mr. João Salvador dos Santos Matias resigned from the position he had been holding, due to78

Corporate Governance Report 2010completing the age of 65, and no new member of this governing body has been co-opted or elected at the General Meeting.Consequently, the composition of the Board of Directors, at the end of 2010, was as follows:Chairman:Mr. Pedro Maria Calainho Teixeira DuarteDirectors:Mr. Manuel Maria Calainho de Azevedo Teixeira DuarteMr. Joel Vaz Viana de LemosMr. Jorge Ricardo de Figueiredo CatarinoMr. Carlos Gomes BaptistaMr. João José de Gouveia CapelãoMr. João José do Carmo DelgadoThe Supervisory Board is composed of three permanent members - a Chairman and two members - and an alternate member, who fullycomply with all the requirements of independence in relation to whom there is no incompatibility for the performance of their duties, underthe terms established in the Commercial Companies Code.The composition of the Supervisory Board, since its constitution on 30 November 2009 and until the end of 2010, was as follows:Chairman:Members:Mr. António Gonçalves MonteiroMr. Mateus MoreiraMr. Miguel Carmo Pereira CoutinhoAlternate:Mr. Horácio Lisboa AfonsoThe Chartered Accountants Company, also appointed at the time of the constitution of the Company, on 30 November 2009, to performduties during the two-year period 2009/2010, "MARIQUITO, CORREIA & ASSOCIADOS, SROC", is represented by Mr. António Francisco EscarameiaMariquito, entrusted with ensuring all the examinations and verifications necessary for the review and legal certification of the accountsof the Company, and who also in the capacity of External Auditor registered at the CMVM under number 2.235, fully complying with all therequirements of independence and in relation to whom there is no incompatibility to hold the respective position, under the applicable legalprovisions.79

Corporate Governance Report 2010II.2. Identification and composition of other specialised committees constituted with competences in the company'smanagement or supervision matters.Currently, there are no specialised Committees on management or supervisory matters, namely the Executive Committee, under the specificterms in which it is defined by the Company's Articles of Association, in particular article 20, notwithstanding the members of the Board ofDirectors, all with executive duties, maintaining contacts, ensuring frequent sector meetings and holding weekly meetings, accompanied bythe advisor to the Board.Indeed, and in view of the adopted model, it is not considered necessary to create specific committees, namely for the effect of a competentand independent assessment of the performance of the executive Directors and for the assessment of the overall performance of the actualperformance of the Board of Directors, since such duties are explicitly entrusted to the General Meeting, Supervisory Board and RemunerationCommittee.Likewise, the creation of a specific committee to reflect on the adopted governance system, verify its effectiveness and propose to the competentbodies the measures to take with a view to its improvement, has been concluded as irrelevant. These duties are performed and developedby each of the Governing Bodies which, better than any other body created only for this effect, are successful in identifying any constraintsand difficulties which might have been encountered, and in the same way, collaborate together in the assessment of the adopted corporategovernance model, reporting and overcoming any operational and interconnection difficulties.Moreover, it was also not considered necessary to entrust any type of committee with the duty to identify, in due time, potential candidateswith the high profile required for the performance of duties of Director, considering that the reference shareholders possess the necessary andrelevant knowledge on the market and senior staff who collaborate with the Company, which allows them to identify, whenever necessary,the candidates they deem suitable for the corporate positions in question.II.3. Organisational charts or flowcharts relative to the distribution of competences between the different governingbodies, committees, and/or departments of the company, including information on the scope of the delegation of competences,in particular with respect to the delegation of the daily management of the company, or distribution of areasof responsibility amongst the members of the management or supervisory bodies, and list of matters which are not ableof being delegated and of competences actually delegated.It is important to note at this point and with respect to the performance of TD,SA in its different business sectors and markets, the close collaborationbetween all the structures of the Group, identified in the organogram at the beginning of this Report, as well as the added valuearising from these synergies, which are reflected in the privileged and efficient means of achieving collectively undertaken objectives.Particular note should be made, on the one hand, of the existence, in the context of the Group, of Central Departments with special responsibilitiesof transversal support to the action developed in the different business sectors integrated in the Corporate Centre, entrusted with promotinga standardisation of procedures and providing support to the structures operating abroad in these areas common to various businesses.The Group's Operating Structures are organised by Activity Sector and tend to cover responsibility for all the teams and operations of thesebusiness areas, independently of the geographical market in which they operate, thus also acting to draw the technical and human centralresources of the Group closer to those operating in the different markets of TD,SA.Even so, it should be noted that occasionally some companies integrated in the Group, in view of the particularity of their business, maintaintheir respective specificity.80

Corporate Governance Report 2010TD-EC, as the leading company of the Group in the Construction sector, develops its activity through Operating Centres, which divide up theproduction areas and are essential in the training of the senior management and in the follow-up of their career, as well as through a series ofCentral Departments with specific scope of action in terms of specialised support to the Operating Centres, in particular in the areas of Studies,Projects and Equipment.Notwithstanding the above, there is no delegation of competences by any of the governing bodies, namely by the Board of Directors, in anyspecific committees, in particular in an Executive Committee.This circumstance results essentially from the fact that the Board of Directors is composed exclusively of executive members, which, as notedabove in the assessment of the corporate model (cf. II.1 above) is reflected in effectiveness of operationality and proximity to the matters oftheir competence, whereby any delegation in this regard would be redundant and counterproductive.The distribution of areas of responsibility during 2010 was carried out only in the context of TD-EC and its members of the Board of Directorswere exactly the same as those of TD,SA.In this way, it was considered appropriate to disclose in this document the distribution of areas of responsibility in this other entity:Notwithstanding the legal and statutory provisions which determine the collective functionality and collegial character of the Board of Directorsand without reducing the operationality practised in an ongoing manner of permanent contact and consultation between all its members,with the areas of responsibility having been distributed to the Directors under the terms indicated below, after the termination of officeof Mr. João Salvador dos Santos Matias.The Chairman of the Board of Directors, Mr. Pedro Maria Calainho Teixeira Duarte, performed the duties inherent to this position, under theterms and with the attributions defined in the Law and Articles of Association, monitoring the Company's current business and ensuring thedaily management and execution of the resolutions of the Board of Directors, and was also responsible for monitoring the financial holdingsin Banco Comercial Português, S.A. and Banco Bilbao Vizcaya Argentaria, S.A..Regarding the Corporate Centre:Mr. Manuel Maria Calainho de Azevedo Teixeira Duarte was responsible for supervising the activities developed by the Central Finance andAccounting Department, as well as the Corporate Secretariat, Consolidation of Accounts and Internal Audit Services.Mr. Joel Vaz Viana de Lemos was responsible for supervising the activities developed by the Central Services for Safety, Quality and the Environment,Human Resources and Administrative, Information Technology and Procurement Services, as well as the representation of the companyat ANEOP and AECOPS.Mr. João José de Gouveia Capelão, accompanied by the Advisor to the Board of Directors Mr. António Manuel Costeira Faustino, was responsiblefor supervising the action of the Central Contracts and Logistics Department.Regarding the Group's activities:Mr. Manuel Maria Calainho de Azevedo Teixeira Duarte was responsible for:- coordinating the action of the Cement, Concrete and Aggregates sector;81

Corporate Governance Report 2010- supervising the action of the Real Estate and Hotel Services sectors, and the formerly named Food Trade and Sale of Vehicles sectors;- monitoring the action developed by then formerly named Fuel Marketing sector;- supervising the activity of TDHOSP – Gestão de Edifício Hospitalar, S.A.;- monitoring the management of the financial holdings owned in the companies E.I.A. – Ensino, Investigação e Administração, S.A.,IMOCIPAR - Imobiliária, S.A., JÚPITER – Industria Hoteleira, S.A. and LONGAPAR, SGPS, S.A..Mr. Joel Vaz Viana de Lemos was responsible for:- supervising the activities developed by TEIXEIRA DUARTE - Engenharia e Construções, S.A. relative to the Geotechnical, Foundations andRehabilitation, Mechanical Engineering Operation Centres and the Shuttering and Prestressing Operation Centre (COC), as well as theEquipment Department;- supervising the activities of the subsidiary companies: BEL – ere – Engenharia e Reabilitação de Estruturas, S.A., E.P.O.S. – Empresa Portuguesade Obras Subterrâneas, S.A., SOMAFEL – Engenharia e Obras Ferroviárias, S.A., OFM – Obras Públicas, Ferroviárias e Marítimas,S.A., RECOLTE – Recolha, Tratamento e Eliminação de Resíduos, S.A., INVICTAAMBIENTE – Recolha de Resíduos e Limpeza Pública, S.A.and GSC – Compañia General de Servicios y Construcciones, S.A. Sociedad Unipersonal;Mr. Jorge Ricardo de Figueiredo Catarino was responsible for:- supervising the activity developed by TEIXEIRA DUARTE – Engenharia e Construções, S.A. relative to the Infrastructures Operating Centres;- monitoring the activity of the subsidiaries MTS – Metro, Transportes do Sul, S.A., AEDL – Auto-estradas do Douro Litoral, S.A. and AEBT– Auto-estradas do Baixo Tejo, S.A.;- monitoring the activity developed by the Central Department for Studies of Public Works;Mr. Carlos Gomes Baptista was responsible for:- supervising the activity developed by TEIXEIRA DUARTE – Engenharia e Construções, S.A. relative to the Buildings Operating Centres;- supervising the activity of the subsidiary TDGI – Tecnologia de Gestão de Imóveis, S.A.;Mr. João José de Gouveia Capelão was responsible for:- coordinating the activities developed by TEIXEIRA DUARTE – Engenharia e Construções, S.A. in the commercial area, being in charge ofensuring the coordination of the representation of the company in this area of action;- supervising the activities developed by the Central Departments for Planning and Studies, Electromechanical Installations, Special Studiesand Projects;82

Corporate Governance Report 2010Consolidation of Accounts of the Group in the process of disclosure of financial information.As at 31 December 2010, these services were under the hierarchical and operational dependence of Director Mr. Manuel Maria Calainho deAzevedo Teixeira Duarte, who was not considered independent under the applicable rules and regulations, thus constituting non-compliancewith CMVM Regulation number II.4.6.Nevertheless, it is considered that this Director is not under any circumstances capable of affecting his impartiality in analysis and decisionmaking.II.6. Responsibility of the management board and supervisory board in the creation and functioning of the company'sinternal control and risk management systems, as well as in the evaluation of their operation and adjustment to thecompany's needsRegarding the Company's internal control and risk management systems, the Board of Directors is responsible, in the first place, for knowingand assessing the most important risks faced by the Company, as well as for the promotion of the necessary initiatives for their respectiveprevention.In this context, the Board of Directors is responsible for designing and planning the internal control and risk management systems which provenecessary and appropriate for the different situations which are identified, as well as monitoring their respective implementation, supervisingand assessing their operation, all under the terms described above in II.5.Furthermore, the Board of Directors is also responsible - rather than the supervisory bodies - for the assessment of the operation of thesesystems and for proposing their respective adjustment to the needs of TD,SA, since this matter which, due both to its nature and specificitiesdescribed above, falls under the specific scope of action of the Board of Directors and under the control and supervision of this board of thedifferent Departments of the Company, a system that has proved suitable for its respective purposes.II.7. Indication of the existence of regulations on the operation of the governing bodies, or other rules relative to incompatibilitiesdefined internally and the maximum number of positions which can be accumulated, and place where theymay be consulted.Formally speaking, there are no regulations on the operation of the governing bodies, code of conduct or any other rules relative to incompatibilitiesdefined internally, nor a maximum number of positions which can be accumulated.In view of the chosen corporate model, the composition of the management (all executive members) and supervisory bodies of the Company(all independent and relative to whom none are in any situation of incompatibility, in accordance with the legal rules) and the fact that thecompetences and responsibilities of each are very well defined and cannot be delegated to any other bodies, specialised committees or departments,the mode of operation of the Board of Directors, Supervisory Board and Chartered Accountant is rather simplified.In this regard, it should be noted that the fact that the number of members in these bodies is not large enough to justify the stipulation, inregulations, of additional rules on operations, and likewise, the interaction between these entities is maintained in a regular manner underthe legally established terms, considered sufficient for the effect.84

Corporate Governance Report 2010Section II – Board of DirectorsII.8. Should the chairman of the management board perform executive duties, indication of the mechanisms for thecoordination of the work of the non-executive members which ensure the independent and informed character of theirdecisions.Considering that all the members of the Board of Directors perform executive duties, the present rule is not applicable to TD,SA.II.9. Identification of the main economic, financial and legal risks to which the company is exposed during the exerciseof its activityThe main economic, financial and legal risks to which the company is exposed during the exercise of its activity are as follows:- alterations in the economic and business conditions in Portugal, as well as in the economic and business conditions of the Group's operationsabroad, namely in Angola, Algeria and Brazil;- fluctuations and volatility of interest rates, credit spreads and exchange rates;- changes in government policies and in the regulatory framework of banking activity;- alterations in the competitive environment of the TEIXEIRA DUARTE Group;- fluctuations in stock markets in general and in particular the stock market price of BCP shares.Furthermore, the activity of the TEIXEIRA DUARTE Group is dependent on the economic environment and on the consequences which certainmacroeconomic situations might have on the levels of confidence of the different economic agents, on investment volumes, exports andglobal trade, as well as well as on employment levels and consumption patterns.The evolution of the activity areas in which the Group operates, namely the construction area, but also, for example, the real estate, hotel andenergy areas, is historically correlated, more or less directly, with the macroeconomic performance of the countries or markets where theTEIXEIRA DUARTE Group operates, in particular, with the evolution of Gross Domestic Product (GDP). Therefore, the Group's activity and itsresults may be significantly affected by the performance of the economies where the TEIXEIRA DUARTE Group operates, mainly through theeffect of the growth or retraction of the construction market, the most representative business area in the Group's operating income (55% in2010).Considering that the construction business is the core activity of the TEIXEIRA DUARTE Group, in particular in the sub-branches of Geotechnologyand Rehabilitation, Buildings, Infrastructures and Mechanical Engineering, below is a description of the main risks inherent to the saidbusiness:The large-scale construction business involves a major allocation of human and material resources, which implies a high fixed cost structurenot only due to the necessary need to invest in the teams and their training, but also the significant investment required in the acquisition andmaintenance of equipment.85

Corporate Governance Report 2010The costs associated to many of the tenders, both in the preparation of proposals and in the guarantees and bonds which are sometimesnecessary to provide, also constitute another risk factor and penalisation inherent to the activity, especially taking into account the penaltiesvery often associated to the large public contract works in which the Teixeira Duarte Group participates.Moreover, the retraction of public investment, as well as the private of a lesser volume, has affected revenue, which is also sometimes penalisedby the deadlines and delays in payments.On the other hand, the nature of the service provided often implies alterations in the circumstances that were initially negotiated, as a resultof the vicissitudes of the contract work in question (climate change; discovery of adverse and unexpected characteristics; natural, social andeconomic phenomena as a consequence of the impact of the work) and alterations of projects, very often due to new choices by the owner ofthe work which calls for great flexibility in the efficiency of their execution.Yet another important aspect results from the significant number of suppliers of goods and equipment and service providers with which theCompany deals in this area of action and which might imply risks due to actions or omissions imputable to them, including interruptions ordelays in the service or supply of goods.From a commercial point of view, globalisation has enabled the entry of other major Construction Groups in the main and oldest markets ofaction of the Teixeira Duarte Group – especially Portugal and Angola – forcing greater effort in the presentation of solutions and proposals, aswell as the optimisation of costs to enable meeting the competitive strength of these entities.In the regions and areas of operation of the Cement, Concrete and Aggregates sector, TD,SA and its subsidiaries have been strongly penalised bythe reflection of the political and economic situations of some countries in which the Company operates, namely as a result of the internationalcrisis which has greatly affected countries such as Ukraine.Concessions are normally long term projects which involve increasingly more areas, such as those linked to planning, design, construction,financing and operation and, therefore, due to such complexity, the need of partners and the longevity of the processes imply a heavy risk inthe evaluation of assets and projects in the long term, in an increasingly more dynamic world characterised by unexpected changes.The real estate sector was at the origin and core of the sub-prime crisis and the reflections of this international situation are still experienced in Portugal,where the requirements for new projects have increased at all levels (administrative, economic, social, environmental, amongst others), andthe increasingly greater evidence of excess supply has led to price decreases and demand is greatly affected by the increasing restrictions to credit.The Hotel sector in the Algarve has been heavily hit by the new destinations which are now accessible and changes of routes of the majorinternational agencies, where the hotels in Africa are naturally exposed to the idiosyncrasies of the respective countries and the increasingcompetition, at an unprecedented scale. Moreover, and in view of the levels of indebtedness of some of the subsidiary companies operatingin this sector, the net income and, consequently, the net worth of these companies may suffer adverse impacts as a result of unfavourableevolutions in interest rates.Distribution in Angola is very exposed due to the specific circumstances of the country and logistic difficulties related to supply, transport andtravel, as well as the difficult international environment which has affected many of the suppliers essential to the development of the project.The Automobile sector operates in a very saturated market, where at an international level major players have entered bankruptcy and werestrongly affected, with inevitable consequences at a global level and which had already led the Teixeira Duarte Group to dispose of the activitydeveloped in this area in Portugal.In Angola, competitiveness increasingly higher and the investment made by the Group implies strong optimisation of processes and costs, ina market which is increasingly more expensive and difficult.86

Corporate Governance Report 2010The Energy sector of the TEIXEIRA DUARTE Group is exposed to two risks of different nature, according to whether we address the activity inPortugal (where the operation concerns the area of distribution and marketing of liquid fuel and gas) or Brazil (where an indirect subsidiaryis engaged in oil prospecting).Indeed, in the national market the risks are concentrated around three aspects: (i) the minor market share in the area of liquid fuel; (ii) the factthat the main suppliers are simultaneously the main competition, with major market shares; and (iii) the delicate management of the creditgranted to re-distributors, namely through the consignment of delivered products.Abroad, the risk is concentrated in the strong investment inherent to the prospecting obligations arising from the awarded concessions,namely compliance with the "Minimum Exploration Programmes (PEM)", compared with the expectation of obtaining a product that is notonly uncertain but also unknown when it might occur, and should it occur, will then depend the quantity, quality, market conditions for thesale of the product and fluctuations of the international markets.Common to these two realities - national and international - has been the strong impact on the fuel market, especially as a consequence ofthe speculation around the price of oil.Regarding the financial holdings, in particular the qualifying holding owned in Banco Comercial Português, S.A., the risk results from thecurrent fragility of the financial markets and the possible impact of the volatility of the respective stock market prices in the accounts of theTEIXEIRA DUARTE Group, which might even, under certain circumstances, affect the net income.The risks described above, should they occur, could have a negative impact on the net income of the TEIXEIRA DUARTE Group and its financialsituation.TD,SA is exposed to strategy risks, through the possibility of taking inadequate strategic decisions, failures in the implementation of decisionsor lack of response capacity regarding changing market conditions.The international business of the TEIXEIRA DUARTE Group represents a significant portion of the Group's total turnover (57% in 2010). Itis impossible to guarantee the full success of operations on the foreign markets in which the Group operates. Moreover, these operationsare exposed to risks arising from possibly adverse economic developments in the countries where they are established. These factors couldadversely affect the activity, financial situation and net income of the TEIXEIRA DUARTE Group. Some of the Group's international operationsare also exposed to exchange rate risks.The TEIXEIRA DUARTE Group operates in various activity sectors, in particular, due to its importance in terms of contribution to operatingincome, the construction sector, but also in others such as energy, automobile and the real estate business. The sectors referred to aboverepresent 82% of the Group's operating income and are highly competitive sectors. This competition environment, when associated to negativecycles in the activity areas in which the Group operates, may have a negative impact on the Company's marketing margins and on its netincome and, consequently, on its financial situation.The capacity of the TEIXEIRA DUARTE Group to successfully implement its strategy depends on its ability to recruit the most qualified and competentemployees for each position. Although the human resources policy of the TEIXEIRA DUARTE Group is directed towards the achievementof these objectives, it is impossible to guarantee that, in the future, there will be no limitations in this area. Such circumstances could obstructor delay the execution of the defined strategy, which could have a negative effect on the Group's activity, financial situation and net income.The deterioration of global economic conditions or adversities that affect the economies at a local scale could result in the inability of theGroup's customers to meet their obligations or significantly delay their payment, leading to the existing credit lines entering into a situation ofdefault. This scenario would result in losses affecting the activity, financial situation and net income of the TEIXEIRA DUARTE Group.87

Corporate Governance Report 2010The TEIXEIRA DUARTE Group might, in the future, be part of a number of disputes related to its activity, including those where the sentencehas been favourable, totally or partially, and which might be subject to appeal or action for annulment by the counterparties under the termsof the applicable procedural rules and until the reading of the final judgement of these same sentences. The TEIXEIRA DUARTE Group cannotguarantee that it will win any lawsuits relative to its activities and a negative decision in this area might have an adverse effect of significanceto the activity, financial situation and net income of the TEIXEIRA DUARTE Group.The activities of TD,SA require investments. The Group finances part of these investments through the cash flow generated by its operatingactivities. However, TD,SA and its subsidiaries finance most of their investments through external sources, including bank loans and offers incapital markets.The TEIXEIRA DUARTE Group is exposed to a series of risks, such as liquidity risks, interest rate risks and exchange rate risks, amongst others,and in the event of exceptionally adverse scenarios, the policies and procedures used by TD,SA to identify, monitor and manage risks mightnot prove to be totally effective.As is the case of any other economic group integrated in a competitive environment, the TEIXEIRA DUARTE Group is also subject to risksrelated to liquidity. The Group believes that it is suitably equipped to exercise effective control of the risks of its activity, that the actiondeveloped by the management is effective, based on information provided by the Consolidation of Accounts and Internal Audit Services andby the Central Department for Finance and Accounts which, under the direct supervision of a Director responsible for this area, is speciallycommitted to controlling the liquidity of the TEIXEIRA DUARTE Group.TD,SA manages the Group's liquidity risks in two ways: ensuring that the Group's financial debt has a high component of medium and longterm maturities suitable to the expected capacity of generation of funds and the use of credit facilities, available in various cases in the formof current account credit lines.During its normal business, the Group is subject to certain operating risks, including interruption or delays in the provision of services,frauds, omissions, errors and delays in the implementation of requirements for risk management. These risks are monitored by the Group inan ongoing manner through administrative and information systems, amongst others, with some of the operating risks being covered byinsurance policies.The operations developed by the TEIXEIRA DUARTE Group are dependent on computer processing. The computer processing involves the maintenanceof records, financial reporting and other systems, including systems for the monitoring and control of the different operations of theGroup, in particular in human resources management, accounts, logistics, administration and storage. Notwithstanding the assessment whichhas been made of the computer systems and the belief that their capacities are appropriate, it is impossible to guarantee potential investorsthat all the problems related to the information technology systems will be fully identified and corrected in due time, nor systematic successin the implementation of technological improvements.The cost of the vast majority of the financial debt incurred by the TEIXEIRA DUARTE Group is indexed to variable reference rates, whereby TD,SAis, through this means, exposed to interest rate risk.However, in order to manage these variations, the financial area of the TEIXEIRA DUARTE Group permanently follows market development,and is able to use financial instruments to mitigate the effects of interest rate volatility. Such instruments are contracted by considering therisks affecting the assets and liabilities and after checking which of the instruments available on the market are the most appropriate to coverthose risks. These operations are permanently monitored, particularly through the analysis of various indicators regarding these instruments,in particular the evolution of their market value and sensitivity of forecast cash flows and of the actual market value to changes in key variables88

Corporate Governance Report 2010that condition the structures, for the purpose of evaluating their financial effects. Derivative financial instruments are recorded in accordancewith the provisions of IAS 39 and measured at fair value, which is based on assessments made by financial institutions. These are qualified ashedging instruments or instruments held for trading, in compliance with the provisions of IAS 39.The variation of the exchange rate of the Euro relative to other currencies, in particular the US Dollar, Angolan Kwanza, Algerian Dinar,Brazilian Real, Mozambican Metical and Ukrainian Hryvnia might have an impact on the financial situation of TD,SA. The TEIXEIRA DUARTEGroup operates in various markets, records revenue in foreign currency and has monetary assets and liabilities denominated in currencies otherthan the Euro and, therefore, in this way, is exposed to variations in the respective currencies.In indirect terms, note should also be made of the fact that the TEIXEIRA DUARTE Group acquires a variety of materials, of special importancein the construction, distribution and automobile areas in currencies other than those in which the final products are subsequently sold, namelyin Angola, which could partially influence the net income achieved by the Group in the activity developed in these sectors.Particular note should be made of the import and export of materials for construction, of products which are essentially consumables, forthe company established under Angolan law MAXI, and of automobile vehicles, spare parts and equipment for the different local subsidiariesoperating in the automobile sector in Angola, involving, amongst others, the brands Nissan, Honda, Chevrolet, Renault and Peugeot.Adverse variations in the price of oil and other commodities might also significantly affect the net income and financial situation ofthe TEIXEIRA DUARTE Group.The volatility of the price of commodities constitutes a risk for the TEIXEIRA DUARTE Group, affecting the operating activity of the constructionbusiness area, although this is on occasions mitigated through supplier contracts with fixed prices and customer contrasts which enablereflecting these alterations in the prices paid by these customers.In particular, the TEIXEIRA DUARTE Group is indirectly exposed to the price of oil. The Group's capacity to reflect increases in the price of oil inthe prices of its final products and services is minor, therefore, negative consequences might arise in the direct margins of the final productssold and in the net contribution of the services rendered. Furthermore, an increase in the price of oil has a direct impact on the transport costsassociated to the development of the Group’s activity, therefore, adverse variations in the price of oil could have a negative material impact onthe Group’s activity, financial situation and net income.More specifically, the evolution in the price of oil could significantly affect the net income of the TEIXEIRA DUARTE Group for three reasons:- directly, through the margin generated in energy, a business area which represented 8.9% of the operating income of the TEIXEIRADUARTE Group in 2010;- the cost of transport is one of the most important cost items in the Group's operating accounts;- energy costs are of some significance in the price of external supplies and services.Any increase in taxes or reduction in tax benefits could have an adverse effect on the activity of the TEIXEIRA DUARTE Group.The TEIXEIRA DUARTE Group could be affected negatively by changes in the legislation and other tax regulations applicable in Portugal, in theEuropean Union and in the different countries in which the Group operates.89

Corporate Governance Report 2010The financial statements of the TEIXEIRA DUARTE Group might be influenced by the change in value of the financial stakes owned.The net worth, equity and even, in certain situations the impairment, net income of the TEIXEIRA DUARTE Group might be influenced by thechange in value of the financial stakes owned, which, in the case of the holdings in companies listed for trading on regulated markets, dependsdirectly on the stock market prices of the respective shares.The entities of the TEIXEIRA DUARTE Group are subject to the risks inherent to any economic activity, which is the case of accidents,breakdowns or natural catastrophes that might lead to losses in the Group's assets or temporary interruptions in the respective activity.Likewise, these risks might affect the main customers and suppliers of the TEIXEIRA DUARTE Group, which would have a significant impact onprofitability where it is not possible to find replacement customers in order to guarantee the turnover level or suppliers to enable maintainingthe same cost structure.II.10. Powers of the management board, namely with respect to deliberations to increase share capital.In addition to all the other duties and competences entrusted by the Law, Articles of Association or through delegation of the General Meetings,the Board of Directors is responsible for:a) exercising the full powers of management of the Company and carrying out all the acts and operations pertinent to the achievement ofits corporate object;b) negotiating and granting all contracts, independently of their scope, form and nature, where the Company is a party;c) representing the Company in and out of court, actively and passively, promoting, contesting, transacting or waiving in any proceedingsand engaging in all types of arbitration;d) preparing, if deemed appropriate, its internal regulations, defining the rule and procedures relative to its operation;e) proceeding with the distribution of areas of responsibility amongst its members and entrusting any of the members with specific mattersof the competence of the Board of Directors;f) empowering any of its members sufficiently to, jointly or individually, perform certain tasks or specific actions;g) appointing attorneys or mandataries of the Company to carry out certain acts or categories of acts, with the powers and duties defined inthe respective powers of attorney which it has granted for the effect;h) appointing the Company Secretary and its Alternate.i) moving the head office to another location, within national territory, as well as creating, transferring or extinguishing delegations, agencies,branches or any other forms of corporate representation, in the country or abroad, under the terms, where and when deemedconvenient;j) deliberating that the Company acquire, dispose and encumber any fixed assets and industrial property rights, licenses and permits, as90

Corporate Governance Report 2010Apart from the circumstances referred to above, the Articles of Association do not foresee any specific rule for the replacement of the membersof the Board of Directors, so the general system established in the Commercial Companies Code on this matter is applicable, that is, the Boardof Directors may replace any Director who fails to perform duties for any of the reasons laid down in the Law, namely due to resignation or theaccumulation of absences, and hence, should this be deemed appropriate and under the applicable terms and conditions, proceed with thecorresponding co-optation, which must be ratified at the first following General Meeting.As is the case with the other governing bodies, the members of the Supervisory Board are elected at the General Meeting, through the listsystem, for four years, coinciding with the financial years, and may be reappointed once or twice, under the terms and with the legally establishedlimits, and take up office as soon as they are elected, without further formalities. When electing the members of the Supervisory Board,the General Meeting must, mandatorily, elect one of them to perform the duties of Chairman.Without prejudice to the provisions in number 2 of article 10 of the Articles of Association, as with the other governing bodies, the membersof the Supervisory Board were also appointed to perform duties during the two-year period 2009/2010.Although in this case, an alternate member of the Supervisory Board was appointed at the time of the constitution of the Company on 30November 2009, the Articles of Association do not foresee any specific rule for the replacement of the members of this board, so the generalsystem established in the Commercial Companies Code will be applicable on this matter, that is, any permanent members of the SupervisoryBoard who are temporarily prevented from holding office or whose duties have terminated will be replaced by alternates under the terms andconditions established therein.II.12. Number of meetings of the management and supervisory bodies and other committees constituted with competenceon matters of management and supervision during the year in question.During 2010, the leadership of the TEIXEIRA DUARTE Group was assured by the company TD-EC, which carried out the monthly monitoring ofthe evolution of the Group's activity and economic-financial situation, both in individual and consolidated terms, with its Board of Directorshaving held 43 meetings and its Supervisory Board having held 7 meetings in 2010.In addition to the meetings noted above, in 2010 the Board of Directors of TD,SA held 7 meetings, in which the Chairman of the SupervisoryBoard participated in the meeting of approval of the Company's accounts, both in individual and consolidated terms, and the SupervisoryBoard of TD,SA held 4 meetings.II.13. Indication of the number of meetings of the Executive Committee or Executive Board of Directors, and reference tothe drawing up of the minutes of these meetings and their remittance, accompanied by the call notices, as applicable,to the Chairman of the Board of Directors, to the Chairman of the Supervisory Board or of the Audit Committee, to theChairman of the General and Supervisory Board and to the Chairman of the Financial Matters Committee.The present rule is not applicable to TD,SA, because, as described above, there is no Executive Committee, Audit Committee, General andSupervisory Board or Financial Matters Committee, and all the members of the Board of Directors currently perform executive duties, includingthe respective Chairman.However, it should be noted that the Directors provide all the information requested by other members of the governing bodies, in due time and in amanner suitable to the request. Moreover, all the minutes of the meetings of the Board of Directors are sent to the Chairman of the Supervisory Board.92

Corporate Governance Report 2010II.14. Distinction between the executive and non-executive members and, amongst them, discrimination between themembers which would comply, if the rules of incompatibilities established in number 1 of article 414-A of the CommercialCompanies Code were applicable to them, with the exception laid out in sub-paragraph b), and the criteria of independenceestablished in number 5 of article 414, both in the Commercial Companies Code.Considering that all the members of the Board of Directors perform executive duties, the present rule is not applicable to TD,SA.Nevertheless and on this issue, it is important to disclose, with respect to the independence of its members, that the Board of Directors considersthat none are under any circumstances capable of affecting their impartiality in analysis and decision-making.In view of the adopted corporate model, the composition and mode of operation of its governing bodies, namely the executive character of theBoard of Directors and the independence of the Supervisory Board and Chartered Accountants Company, without their being any delegationof competences, either amongst them or to other Committees, TD,SA considers that the appointment of non-executive members to performduties within the Board of Directors would not result in any significant benefits to the good operation of the adopted model which has provedto be suitable and efficient.II.15. Indication of the legal and regulatory rules and other criteria underlying the assessment of the independence of itsmembers made by the management board.Not applicable, as described in the previous number.II.16. Indication of the rules of the process of selection of candidates to non-executive Directors and way they ensure thenon-interference of the executive Directors in this process.Not applicable, as described in the previous two numbers.II.17. Reference to the fact that the company's annual management report should include a description of the activitydeveloped by the non-executive Directors and any constraints which have been detected.Not applicable, considering that all the members of the Board of Directors perform executive duties.II.18. Professional qualifications of the members of the Board of Directors, indication of the professional activities carriedout by them, at least, over the past five years, number of company shares they own, date of their first appointment andend of the term of office.Chairman of the Board of Directors: Mr. Pedro Maria Calainho Teixeira DuarteLicentiate degree in Business Administration from Universidade Católica Portuguesa in 1977.93

Corporate Governance Report 2010Appointed for the first time for the position in 2009, at the time of the constitution of the company.Over the last five years, his professional activity has also included the holding of the following positions:Chief Executive Officer of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Chairman of the Board of Directors of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Chairman of the Board of Directors of PASIM - Sociedade Imobiliária, S.A..Chairman of the Board of Directors of PACIM – Sociedade Gestora de Participações Sociais, S.A..Director of CIMPOR - Cimentos de Portugal, SGPS, S.A.Director of TEIXEIRA DUARTE - Engenharia e Construções (Macau), Lda..Manager of F+P – Imobiliária, Lda..Member of the Advisory and Strategy Board of E.I.A. – Ensino, Investigação e Administração, S.A..Deputy Chairman of the General and Supervisory Board of BANCO COMERCIAL PORTUGUÊS, S.A..Deputy Chairman of the Board of Governors of BANCO COMERCIAL PORTUGUÊS, S.A..Member of the General and Supervisory Board of BANCO COMERCIAL PORTUGUÊS, S.A..Member of the Remunerations and Welfare Board of BANCO COMERCIAL PORTUGUÊS, S.A..Member of the Supervisory Board of MILLENNIUM BANK, S.A. (Poland).As at 31 December 2010, he owned, directly and indirectly, 7,942,000 shares representing the share capital of TD,SA.Director: Mr. Manuel Maria Calainho de Azevedo Teixeira DuarteLicentiate degree in Law from the Faculty of Law of Lisbon University, in 1989.Appointed for the first time for the position in 2009, at the time of the constitution of the company, with the current term of office ending in2010.Over the last five years, his professional activity has also included the holding of the following positions:Chairman of the Board of Directors of ALTO DA PEÇA – Imobiliária, S.A..Chairman of the Board of Directors of BONAPARTE – Imóveis Comerciais e Participações, S.A..94

Corporate Governance Report 2010Chairman of the Board of Directors of CERRADO DOS OUTEIROS – Sociedade Imobiliária, S.A..Chairman of the Board of Directors of C+P.A. – Cimento e Produtos Associados, S.A.;Chairman of the Board of Directors of ESTA – Gestão de Hotéis, S.A.;Chairman of the Board of Directors of EVA – Sociedade Hoteleira, S.A..Chairman of the Board of Directors of IMOPEDROUÇOS – Sociedade Imobiliária, S.A..Chairman of the Board of Directors of IMOTD – Sociedade Gestora de Participações Sociais, S.A..Chairman of the Board of Directors of LAGOAS HOTEL, S.A..Chairman of the Board of Directors of LAGOASFUT – Equipamento Recreativo e Desportivo, S.A..Chairman of the Board of Directors of MARTINS & ESTEVES, S.A..Chairman of the Board of Directors of NGDI – Gestão e Investimentos Imobiliários, S.A..Chairman of the Board of Directors of PARCAUTO – Sociedade Imobiliária, S.A..Chairman of the Board of Directors of QUINTA DE CRAVEL – Imobiliária, S.A..Chairman of the Board of Directors of ROCHORIENTAL – Sociedade Hoteleira, S.A..Chairman of the Board of Directors of SEIUR – Sociedade de Empreendimentos Imobiliários e Urbanísticos, S.A..Chairman of the Board of Directors of SINERAMA – Organizações Turísticas e Hoteleiras, S.A..Chairman of the Board of Directors of STELGEST – Gestão Hoteleira, S.A..Chairman of the Board of Directors of TDVIA – Sociedade Imobiliária, S.A..Chairman of the Board of Directors of TDCM - SGPS, S.A.Chairman of the Board of Directors of TDE – Empreendimentos Imobiliários, S.A..Chairman of the Board of Directors of TDEMPA – Gestão de Participações e Investimentos, S.A..Chairman of the Board of Directors of TDH – Sociedade Gestora de Participações, S.A..Chairman of the Board of Directors of TDHC – Instalações para Desporto e Saúde, S.A..95

Corporate Governance Report 2010Chairman of the Board of Directors of TDO – Sociedade Gestora de Participações Sociais, S.A..Chairman of the Board of Directors of TDPG - Empreendimentos Imobiliários e Hoteleiros, S.A..Chairman of the Board of Directors of TEDAL – Sociedade Gestora de Participações Sociais, S.A..Chairman of the Board of Directors of TEIXEIRA DUARTE – Gestão de Participações e Investimentos Imobiliários, S.A..Chairman of the Board of Directors of TEJO VILLAGE – Promoção Imobiliária, S.A..Chairman of the Board of Directors of TRANSBRITAL – Britas e Empreendimentos Imobiliários, S.A..Chairman of the Board of Directors of V-8 – Gestão Imobiliária, S.A..Director of ALPINUS – Sociedade Hoteleira, S.A..Director of BONAPARTE – Imóveis Comerciais e Participações, S.A..Member of the Board of Directors of EMPA, S.A. Serviços de Engenharia.Director of EUROGTD – Sistemas de Informação, S.A..Director of GRATAC – Sociedade Gestora de Participações, S.A..Director of ILTA – Urbanizadora da Ilha de Tavira, S.A..Director of MARINERTES, S.A..Director of PTG – Sociedade Gestora de Participações Sociais, S.A..Director of Sociedade de Investimento Cimpor Macau, SGPS, S.A.Director of TDARCOL – Sociedade Gestora de Participações Sociais, S.A..Director of TDF - Sociedade Gestora de Fundos de Investimento Imobiliário, S.A..Director of TDG – Sociedade Gestora de Participações Sociais, S.A..Director of TDHOSP - Gestão de Edifício Hospitalar, S.A..Director of TEIXEIRA DUARTE – Sociedade Gestora de Participações Sociais, S.A..Director of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Manager of BONAPAPEL – Artigos de Papelaria e Equipamentos Informáticos Unipessoal, Lda..96

Corporate Governance Report 2010Manager of CRAVELGEST – Gestão Imobiliária, S.A..Manager of GFF – Empreendimentos Imobiliários, Lda..Manager of TEIXEIRA DUARTE – Engenharia e Construções (Macau), Limitada.Member of the Remuneration Committee of BONAPARTE – Imóveis Comerciais e Participações, S.A..Member of the Remuneration Committee of E.P.O.S. – Empresa Portuguesa de Obras Subterrâneas, S.A..Member of the General and Supervisory Board of E.I.A. – Ensino, Investigação e Administração, S.A..Member of the Remuneration Committee of RECOLTE – Recolha, Tratamento e Eliminação de Resíduos, S.A..Member of the Remuneration Committee of TDF - Sociedade Gestora de Fundos de Investimento Imobiliário, S.A..Member of the Remuneration Committee of TDGI – Tecnologia de Gestão de Imóveis, S.A..Member of the Remuneration Committee of TDO – Investimento e Gestão, S.A..Secretary of the Board of the General Meeting of HAB – Cooperativa de Construção e Habitação C.R.L..As at 31 December 2010, he owned 5,149,575 shares representing the share capital of TD,SA.Director: Mr. Joel Vaz Viana de LemosLicentiate degree in Civil Engineering from the Faculty of Engineering of Porto University, in 1977.Appointed for the first time for the position in 2009, at the time of the constitution of the company, with the current term of office ending in2010.Over the last five years, his professional activity has focused on the performance of the duties of Director of Operation Centre and subsequentlyDirector of TEIXEIRA DUARTE – Engenharia e Construções, S.A., having also performed various other corporate positions, listed below:Chairman of the Board of Directors of G.E.TRA.BE – Groupement d’Entreprises de Travaux de Bejaia.Chairman of the Board of Directors of G.E.TRA.M – Groupement d’Entreprises de Travaux Maritimes de Bejaia.Chairman of the Board of Directors of GMP - Grupo Marítimo Português, ACE.Chairman of the Board of Directors of GMP MEK - Grupo Marítimo Português Mers El Kebir, ACE.97

Corporate Governance Report 2010Chairman of the Board of Directors of GMP MKD – Grupo Marítimo Mers El Kebir Dragagens, ACE.Chairman of the Board of Directors of MARINERTES, S.A..Chairman of the Board of Directors of NOVA TEIXEIRA DUARTE - Engenharia e Construções, S.A..Chairman of the Board of Directors of OFM – Obras Públicas, Ferroviárias e Marítimas, S.A..Chairman of the Board of Directors of RECOLTE – Recolha, Tratamento e Eliminação de Resíduos, S.A..Chairman of the Board of Directors of SOMAFEL – Engenharia e Obras Ferroviárias, S.A..Deputy Chairman of the Board of Directors of Novaponte – Agrupamento para a Construção da Segunda Travessia do Tejo, ACE.Director of E.P.O.S. - Empresa Portuguesa de Obras Subterrâneas, S.A..Director of BEL – ERE – Engenharia e Reabilitação de Estruturas, S.A..Director of FERDOURO – Construções de Pontes e Ferrovias, ACE.Director of FERPONTE - Agrupamento para Execução de Obras na Ponte sobre o Tejo em Lisboa, ACE.Director of GMP – Groupement Maritime Portugais - Oran.Director of OFM – Obras Públicas, Ferroviárias e Marítimas, S.A. – Branch in Cape Verde.Director of SOMAFEL e FERROVIAS, ACE.Director of TDARCOL – Sociedade Gestora de Participações Sociais, S.A..Director of TDEMPA - Gestão de Participações e Investimentos, S.A..Director of Tecnoceano – Grupo de Empresas de Construção Civil, ACE.Director of TEISOMAR - Obras Marítimas, ACE.Director of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Director of TEIXEIRA DUARTE – Gestão de Participações e Investimentos Imobiliários S.A..Member of the Remuneration Committee of BONAPARTE – Imóveis Comerciais e Participações, S.A..Member of the Remuneration Committee of E.P.O.S. – Empresa Portuguesa de Obras Subterrâneas, S.A..Member of the Remuneration Committee of RECOLTE – Recolha, Tratamento e Eliminação de Resíduos, S.A..98

Corporate Governance Report 2010Member of the Remuneration Committee of TDF - Sociedade Gestora de Fundos de Investimento Imobiliário, S.A..Member of the Remuneration Committee of TDGI – Tecnologia de Gestão de Imóveis, S.A..Member of the Remuneration Committee of TDO – Investimento e Gestão, S.A..As at 31 December 2010, he owned 433,862 shares representing the share capital of TD,SA.Director: Mr. Jorge Ricardo Figueiredo CatarinoLicentiate degree in Civil Engineering from the Faculty of Engineering of Porto University, in 1974.Appointed for the first time for the position in 2009, at the time of the constitution of the company, with the current term of office ending in2010.Over the last five years, his professional activity has focused on the performance of the duties of Director of Operation Centre and subsequentlyDirector of TEIXEIRA DUARTE – Engenharia e Construções, S.A., having also performed various other corporate positions:Chairman of the Board of Directors of CONBATE, ACE.Director of DOURO LITORAL, ACE.Director of GCF - Grupo Construtor da Feira, ACE.Director of GPCC - Grupo Português de Construção de Infra-Estruturas de Gás Natural, ACE.Director of Groupement ETRHB Haddad/Teixeira Duarte Harrach Douera.Director of Groupement TEIXEIRA DUARTE, S.A./Kanaghaz, SPA - Lagunes de Souf.Director of Lote Seis Infra-Estruturas de Gás Natural, ACE.Director of MOLINORTE - Linha do Norte - Construção Civil, ACE.Director of MTS – Metro Transportes do Sul, S.A..Director of NOVA TEIXEIRA DUARTE - Engenharia e Construções, S.A..Director of TDEMPA - Gestão de Participações e Investimentos, S.A..Director of TEIX.CO, SPA.Director of TEIXEIRA DUARTE ALGÉRIE, SPA.99

Corporate Governance Report 2010of TEIXEIRA DUARTE – Engenharia e Construções, S.A. and TEIXEIRA DUARTE, S.A..As at 31 December 2010, he owned 10,387 shares representing the share capital of TD,SA.Director: Mr. João José do Carmo DelgadoLicentiate degree in Civil Engineering from Instituto Superior Técnico, in 1978.Appointed for the first time for the position in 2009, at the time of the constitution of the company, with the current term of office ending in 2010.Over the last five years, his professional activity has focused on the performance of the duties of Director of Services and subsequently Directorof TEIXEIRA DUARTE – Engenharia e Construções, S.A. and TEIXEIRA DUARTE, S.A..As at 31 December 2010, he owned 28,660 shares representing the share capital of TD,SA.II.19. Positions that members of the management board hold in other companies, detailing those held in other companiesof the same group.Chairman of the Board of Directors: Mr. Pedro Maria Calainho Teixeira DuarteAs at 31 December 2010, he held the following positions in other companies, all outside the TEIXEIRA DUARTE Group:Deputy Chairman of the General and Supervisory Board of BANCO COMERCIAL PORTUGUÊS, S.A..Chairman of the Board of Directors of PASIM - Sociedade Imobiliária, S.A..Chairman of the Board of Directors of PACIM – Sociedade Gestora de Participações Sociais, S.A..Member of the Advisory and Strategy Board of E.I.A. – Ensino, Investigação e Administração, S.A..In companies of the TEIXEIRA DUARTE Group:Chairman of the Board of Directors of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Director: Mr. Manuel Maria Calainho de Azevedo Teixeira DuarteAs at 31 December 2010, he held the following positions in other companies, all outside the TEIXEIRA DUARTE Group:101

Corporate Governance Report 2010Chairman of the Board of Directors of NGDI – Gestão e Investimentos Imobiliários, S.A..Chairman of the Board of Directors of SEIUR – Sociedade de Empreendimentos Imobiliários e Urbanísticos, S.A..Director of GRATAC – Sociedade Gestora de Participações, S.A..Director of ILTA – Urbanizadora da Ilha de Tavira, S.A..Director of TDG – Sociedade Gestora de Participações, S.A..Director of TEIXEIRA DUARTE – Sociedade Gestora de Participações Sociais, S.A..Secretary of the Board of the General Meeting of HAB – Cooperativa de Construção e Habitação C.R.L..Member of the General and Supervisory Board of E.I.A. – Ensino, Investigação e Administração, S.A..In companies of the TEIXEIRA DUARTE Group:Director of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Chairman of the Board of Directors of BONAPARTE – Imóveis Comerciais e Participações, S.A..Chairman of the Board of Directors of C+P.A. – Cimento e Produtos Associados, S.A.;Chairman of the Board of Directors of ESTA – Gestão de Hotéis, S.A.;Chairman of the Board of Directors of EVA – Sociedade Hoteleira, S.A..Chairman of the Board of Directors of IMOPEDROUÇOS – Sociedade Imobiliária, S.A..Chairman of the Board of Directors of IMOTD – Sociedade Gestora de Participações Sociais, S.A..Chairman of the Board of Directors of LAGOAS HOTEL, S.A..Chairman of the Board of Directors of LAGOASFUT – Equipamento Recreativo e Desportivo, S.A..Chairman of the Board of Directors of PARCAUTO – Sociedade Imobiliária, S.A..Chairman of the Board of Directors of QUINTA DE CRAVEL – Imobiliária, S.A..Chairman of the Board of Directors of ROCHORIENTAL – Sociedade Hoteleira, S.A..Chairman of the Board of Directors of SINERAMA – Organizações Turísticas e Hoteleiras, S.A..102

Corporate Governance Report 2010Member of the Remuneration Committee of RECOLTE – Recolha, Tratamento e Eliminação de Resíduos, S.A.".Member of the Remuneration Committee of TDO – Investimento e Gestão, S.A..Director: Mr. Joel Vaz Viana de LemosAs at 31 December 2010, he held the following positions in other companies, all outside the TEIXEIRA DUARTE Group:Director of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Chairman of the Board of Directors of G.E.TRA.BE – Groupement d’Entreprises de Travaux de Bejaia.Chairman of the Board of Directors of G.E.TRA.M – Groupement d’Entreprises de Travaux Maritimes de Bejaia.Chairman of the Board of Directors of GMP - Grupo Marítimo Português, ACE.Chairman of the Board of Directors of GMP MEK - Grupo Marítimo Português Mers El Kebir, ACE.Chairman of the Board of Directors of MARINERTES, S.A..Chairman of the Board of Directors of OFM – Obras Públicas, Ferroviárias e Marítimas, S.A..Chairman of the Board of Directors of RECOLTE – Recolha, Tratamento e Eliminação de Resíduos, S.A..Chairman of the Board of Directors of SOMAFEL – Engenharia e Obras Ferroviárias, S.A..Deputy Chairman of the Board of Directors of Novaponte – Agrupamento para a Construção da Segunda Travessia do Tejo, ACE.Director of BEL – ERE – Engenharia e Reabilitação de Estruturas, S.A..Director of E.P.O.S. - Empresa Portuguesa de Obras Subterrâneas, S.A..Director of GMP – Groupement Maritime Portugais - Oran.Director of OFM – Obras Públicas, Ferroviárias e Marítimas, S.A. – Branch in Cape Verde.Director of SOMAFEL e FERROVIAS, ACE.Director of TDARCOL – Sociedade Gestora de Participações Sociais, S.A..Director of TDEMPA - Gestão de Participações e Investimentos, S.A..104

Corporate Governance Report 2010Director of TEIXEIRA DUARTE – Gestão de Participações e Investimentos Imobiliários S.A..Member of the Remuneration Committee of BONAPARTE – Imóveis Comerciais e Participações, S.A..Member of the Remuneration Committee of E.P.O.S. – Empresa Portuguesa de Obras Subterrâneas, S.A..Member of the Remuneration Committee of RECOLTE – Recolha, Tratamento e Eliminação de Resíduos, S.A..Member of the Remuneration Committee of TDF - Sociedade Gestora de Fundos de Investimento Imobiliário, S.A..Member of the Remuneration Committee of TDGI – Tecnologia de Gestão de Imóveis, S.A..Member of the Remuneration Committee of TDO – Investimento e Gestão, S.A..Director: Mr. Jorge Ricardo de Figueiredo CatarinoAs at 31 December 2010, he held the following positions in other companies:In companies of the TEIXEIRA DUARTE Group:Director of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Chairman of the Board of Directors of CONBATE, ACE.Director of DOURO LITORAL, ACE.Director of Groupement ETRHB Haddad/Teixeira Duarte Harrach Douera.Director of Groupement Teixeira Duarte / Groupe Etrhb Haddad.Director of Groupement TEIXEIRA DUARTE, S.A./Kanaghaz, SPA - Lagunes de Souf.Director of TDEMPA - Gestão de Participações e Investimentos, S.A..Director of TEIX.CO, SPA.Director of TEIXEIRA DUARTE ALGÉRIE, SPA.Director of GPCC - Grupo Português de Construção de Infra-Estruturas de Gás Natural, ACE.105

Corporate Governance Report 2010Director: Mr. Carlos Gomes BaptistaAs at 31 December 2010, he held the following positions in other companies, all outside the TEIXEIRA DUARTE Group:Director of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Chairman of the Board of Directors of BEL – ERE – Engenharia e Reabilitação de Estruturas, S.A..Chairman of the Board of Directors of INVICTAAMBIENTE – Recolha de Resíduos e Limpeza Pública, S.A..Chairman of the Board of Directors of TDGI – Tecnologia de Gestão de Imóveis, S.A..Director of GSC – Compañia General de Servicios y Construcción, S.A. – Branch in Portugal.Director of TEIXEIRA DUARTE/OPCA – Fungere – Parcela 1.18 do Parque da Nações em Lisboa 3.ª Fase – Empreitada de Acabamentos eInstalações Especiais dos Edifícios para o Hotel e Escritórios, ACE.Director: Mr. João José de Gouveia CapelãoAs at 31 December 2010 he performed the duties of Director of TEIXEIRA DUARTE – Engenharia e Construções, S.A., in the TEIXEIRA DUARTEGroup.Director: Mr. João José do Carmo DelgadoAs at 31 December 2010 he performed the duties of Director of TEIXEIRA DUARTE – Engenharia e Construções, S.A., in the TEIXEIRA DUARTEGroup.Section III – General and Supervisory Board, Financial Matters Committee and Supervisory BoardII.21. Identification of the members of the Supervisory Board, stating compliance with the incompatibility rules establishedin number 1 of article 414-A and comply with the independence criteria established in number 5 of article 414,both of the Commercial Companies Code. The Supervisory Board carries out the respective self-assessment for the effect.The Supervisory Board is composed of three permanent members - a Chairman and two members - and an alternate member, who fullycomply with all the requirements of independence in relation to whom there is no incompatibility for the performance of their duties, underthe terms established in the Commercial Companies Code.106

Corporate Governance Report 2010The facts referred to in the previous paragraph are assessed in relation to each member of the Supervisory Board.The abovementioned members, appointed at the time of the constitution of the Company on 30 November 2009, are the following:Chairman:Mr. António Gonçalves MonteiroMembers:Mr. Mateus MoreiraMr. Miguel Carmo Pereira CoutinhoAlternate:Mr. Horácio Lisboa AfonsoII.22. Professional qualifications of the members of the Supervisory Board, indication of the professional activities carriedout by them, at least, over the past five years, number of company shares they own, date of their first appointmentand date of the end of the term of office.Mr. António Gonçalves Monteiro (Chairman of the Supervisory Board)Professional Qualifications:Licentiate degree in Finance from Instituto Superior de Economia and diploma in Accounting and Administration from ISCAL.Professional Activities carried out over the last five years:His professional activity has focused on the areas of auditing, legal review of accounts, management consultancy and tax consultancy services.He is Chairman of the Board of Directors of Moore Stephens & Associados, SROC, S.A..As Partner and Director of a chartered accountants company he has performed the duties of statutory auditor, or been part of the supervisoryboards of dozens of commercial and industrial companies of a great variety of sizes and of different activity sectors.Currently he is President of the Association of Chartered Accountants (Bastonário da Ordem dos Revisores Oficiais de Contas) and Chairmanof the Steering Committee, having previously also performed the duties of member of the Steering Committee and Chairman of the QualityControl Committee.Member of the National Supervisory and Audit Board.Member of the International Fiscal Association, of the Portuguese Fiscal Association, Portuguese Association of Tax Consultants and EconomistsAssociation.107

Corporate Governance Report 2010Chairman of the Supervisory Board of the Luso-French Chamber of Commerce and Industry and Member of the Supervisory Board of theLuso-Spanish Chamber of Commerce and Industry, the Luso-South African Chamber of Commerce and Industry, the Luso-Mexican Chamberof Commerce and Industry and the Portugal-Namibia Chamber of Commerce and Industry.Formerly, Chairman of the Portuguese Association of Tax Consultants.He has never carried out any professional activities at TD,SA, although he has represented the Company at the Chartered Accountants Companywhich performed the supervisory duties at the companies SOMAFEL – Engenharia e Obras Ferroviárias, S.A. and OFM – Obras Públicas, Ferroviáriase Marítimas, S.A., as well as at the TDF Closed Real Estate Investment Fund, integrated in the TEIXEIRA DUARTE Group.Number of Company shares owned:He does not own any shares of TD,SA.Date of first appointment and date of end of term of office:He was appointed on 30 November 2009 to perform duties during the two-year period 2009/2010.Mr. Mateus Moreia (Member of the Supervisory Board)Professional Qualifications:Licentiate degree in Finance from ISCEF (1972).Professional Activities carried out over the last five years:Retired from Millennium BCP on 30.09.2003, where he held the position of Central Deputy Director.Number of Company shares owned:He does not own any shares of TD,SA.Date of first appointment and date of end of term of office:He was appointed on 30 November 2009 to perform duties during the two-year period 2009/2010.Mr. Miguel Pereira Coutinho (Member of the Supervisory Board)Professional Qualifications:108

Corporate Governance Report 2010Attendance of the 2nd year of Instituto Superior de Agronomia (1952).Entrepreneur.Professional Activities carried out over the last five years:Retired.Number of Company shares owned:He is the co-owner of 10,000 shares of TD,SA.Date of first appointment and date of end of term of office:He was appointed on 30 November 2009 to perform duties during the two-year period 2009/2010.Mr. Horácio Lisboa Afonso (Alternate of the Supervisory Board)Professional Qualifications:Licentiate Degree in Finance from Instituto Superior de Ciências Económicas e Financeiras.Attendance of various professional specialisation courses organised by Price Waterhouse, Spicer & Oppenheim International and other entities,in Portugal and abroad (Germany, Belgium, Spain, USA, France, Holland, United Kingdom), covering: - accounting, financial management,financial auditing, IT auditing, time management, personal skills and other specific matters of relevance to business organisation, administrationand management.Seven month internship at the Audit Department of Price Waterhouse, in London during the period of October 1978 to April 1979.Chartered Accountant.Certified Accountant.Member of the Chartered Accountants Association.Member of the Economists Association.Member of the Certified Accountants Association.109

Corporate Governance Report 2010Professional Activities carried out over the last five years:Founding member of Camacho Palma & Lisboa Afonso – SROC, representative in Portugal of Nexia International, he performs the duties ofChartered Accountant in various companies, being responsible for the Review and Legal Certification of the respective accounts.As a Partner of Nexia, he is responsible for the auditing of international companies established in Portugal, being the International ContactPartner.Number of Company shares owned:He owns 1,000 shares of TD,SA.Date of first appointment and date of end of term of office:He was appointed on 30 November 2009 to perform duties during the two-year period 2009/2010.II.23. Positions that the members of the Supervisory Board hold in other companies, detailing those held in other companiesof the same group.Mr. António Gonçalves Monteiro (Chairman of the Supervisory Board)As at 31 December 2010, he held the following positions in other companies, inside the TEIXEIRA DUARTE Group:Chairman of the Supervisory Board of TEIXEIRA DUARTE - Engenharia e Construções, S.A..In companies outside the TEIXEIRA DUARTE Group, he is Chairman of the Board of Directors of Moore Stephens & Associados, SROC, S.A..Mr. Mateus Moreia (Member of the Supervisory Board)As at 31 December 2010, he held the following positions in other companies, inside the TEIXEIRA DUARTE Group:Member of the Supervisory Board of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Does not hold a corporate position in any other company outside the TEIXEIRA DUARTE Group.Mr. Miguel Pereira Coutinho (Member of the Supervisory Board)110

Corporate Governance Report 2010As at 31 December 2010, he held the following positions in other companies, inside the TEIXEIRA DUARTE Group:Member of the Supervisory Board of TEIXEIRA DUARTE - Engenharia e Construções, S.A..Mr. Horácio Lisboa Afonso (Alternate of the Supervisory Board)As at 31 December 2010, he held the following positions in other companies, inside the TEIXEIRA DUARTE Group:Alternate of the Supervisory Board of TEIXEIRA DUARTE - Engenharia e Construções, S.A..In companies outside the TEIXEIRA DUARTE Group, he is:Managing partner of Camacho Palma & Lisboa Afonso – SROC.Manager of NEXIA, CPLA & Associados – SROC, Lda..Member of the Audit Committee of Espírito Santo Financial Group, S.A..Chairman of the Supervisory Board of Espírito Santo Financial (Portugal), S.A..Member of the Supervisory Board of SOMINCOR – Sociedade Mineira de Neves-Corvo, S.A..II.24. Reference to the fact that the Supervisory Board assesses the external auditor on an annual basis and regarding thepossibility of proposing, to the General Meeting, the dismissal of the auditor on fair grounds.The action of the External Auditor has been assessed by all the Governing Bodies of TD,SA, and there have been any circumstances that couldjustify his dismissal on fair grounds.The Board of Directors of TD,SA has always been committed to ensuring the existence of appropriate conditions for the provision of the servicesof the external auditor, and has also acted as an intermediary between the external auditor and the Company and is the first receiver of therespective reports, without the corresponding independence ever having been impaired.The remuneration of the external auditor is established by the Company's Remuneration Committee.The Company discloses that it will keep the same model since it has proved to be appropriate and sufficient in the relations between the differentcorporate bodies.Points II.25, II.26, II.27, II.28 and II.29 are not applicable to TD,SA because they refer to specific matters of the General andSupervisory Board, a body that does not exist in the corporate model adopted by the Company.111

Corporate Governance Report 2010Section IV – RemunerationII.30. Description of the policy of the remuneration of the management and supervisory bodies referred to in article 2 ofLaw number 28/2009, of 19 June.As noted in I.16, in 2010, the Remuneration Committee did not submit the remuneration policy statement for the assessment of the shareholders,relative to the Company's senior managers, in observance of number 3 of article 248-B of the Securities Market Code, because, onthat date, the Company was not yet bound to such duties and since the members of the Board of Directors did not receive any remunerationfor the performance of their duties.However, it should be noted that the Remuneration Committee of TD-EC issued the respective remuneration policy statement relative to theManagement and Supervisory Bodies, which was approved at the General Meeting of that company with 99.71% of the votes in favour,0.01% of abstentions and 0.29% of the votes against.Since the members of the Board of Directors of TD,SA were, during the year under analysis, the same in both companies, we consider that it isappropriate, herein, to reproduce the content of the abovementioned statement:With the entry into force of the reform of the Commercial Companies Code of 2006, Teixeira Duarte adapted its corporate model toinclude a Board of Directors and two autonomous supervisory bodies, the Supervisory Board and the Chartered Accountants Company.The Board of Directors issued a statement clarifying that there are no other senior managers in the Company, in observance of number3 of article 248-B of the Securities Market Code, that is, employees who, not being members of the management and supervisory bodies,have regular access to privileged information and participate in the decisions on business management and strategy.Hence, the present statement covers only the identified Management and Supervisory Bodies.The remuneration policy presented herein and its implementation under the terms described below should take into account the company'slong term performance, compliance with the rules applicable to the company's activity and restraint on excessive risk-taking.For all due effects, it is clarified that TEIXEIRA DUARTE did not take any remunerative policy or practice of other groups of companies asa comparative element for the establishment of remunerations.Regarding the Board of Directors, the Remuneration Committee determines the values of the fixed and variable component of theirremunerations in accordance with guidelines linking the performance and results of the Company as a whole, as well as the overallactivity of the management board, compared with the defined objectives, taking into account the conditions and values of the remunerationsof the other employees of the Company.In this regard, it is important to remember that the Directors of Teixeira Duarte are "in-house people" and have been an integral part ofthe business for dozens of years, and that their remunerations are established in continuity and harmony with a general plan coveringall employees.112

Corporate Governance Report 2010The variable sum is paid to each member of the Board of Directors as a supplementary remuneration and performance bonus, inthe spirit of distribution of profit, whereby this component is not related to the evolution of the stock market prices of the Company'sshares, but rather depends on the net income for the year, the development of corporate business and the performance of the respectiveduties by each member.No Director is entitled to receive any variable component to his remuneration unless it is specifically attributed by the RemunerationCommittee.There is no plan of the possibility of the payment of the variable component taking place, totally or partially, after the calculation ofthe accounts for the years corresponding to the entire term of office.There are no mechanisms limiting the variable remuneration, in the event of the net income showing an important deterioration in thecompany's performance in the last calculated year or when such is expected for the year in progress.There is no system for the attribution of shares or rights to acquire options on shares or any other share incentive scheme.In the overall remuneration of the members of the Board of Directors, no sum is paid in the form of profit-sharing.The Directors of Teixeira Duarte receive no remuneration, of any nature, paid by companies that are in a controlling or group relationshipwith it.There are no other relevant non-cash benefits, apart from those established by this Committee.No sums have been paid, and nor are any payments foreseen, relative to the dismissal or termination of office through agreement ofDirectors.All the members of the Supervisory Board, under the current system established by the Commercial Companies Code, receive a fixedremuneration for the performance of the duties inherent to the respective positions, determined by this Remuneration Committee, andnone received any other retribution from Teixeira Duarte or other company with which it was in a controlling or group relationship, inparticular for any other services provided to these entities.Likewise, and as referred to above on the Management Board, there is no scheme for the attribution of shares and/or rights to acquireoptions on shares and/or any other share incentive scheme, nor any sum paid under the form of profit-sharing, nor any other relevantnon-cash benefits.The remuneration of the Chartered Accountants Company is determined in accordance with the volume and quality of the servicesprovided in the context of the duties entrusted under the terms of the Law and Articles of Association.In the case of Teixeira Duarte, this supervisory body is responsible for conducting all the examinations and verifications required for thereview and legal certification of the Company's accounts, for which an amount was established in the form of an annual overall value113

Corporate Governance Report 2010to be paid under the terms and within the periods of time defined with the Board of Directors in accordance with the sensitivity andmonitoring of the business and activity of this Supervisory Body.The same Chartered Accountants Company also provides services, exclusively of the same nature, of legal review of accounts and auditing,to other entities integrated in the TEIXEIRA DUARTE Group, receiving from them the corresponding retributions, the overall value ofwhich is disclosed in the Corporate Governance Report.Gradually and since the alteration of the corporate model of Teixeira Duarte in 2007, following the reform of the Commercial CompaniesCode, the Supervisory Board has played an increasingly more active role in the monitoring of the work of the Chartered AccountantsCompany, and so this Board should be consulted to issue an opinion on the establishment of the remunerations of this CharteredAccountants Company.It is based on the remuneration policy presented above that this Committee specifically establishes the exact values of the remunerationsof the members of the indicated management and supervisory bodies of the company, in accordance with the personal opinionof their members, expressed in a deliberation drawn up in minutes and whose content is then communicated to the Board of Directorsfor implementation, under the strict terms defined therein.These values have been disclosed on an annual basis in the Corporate Governance Report to which reference is made for an assessmentof the implementation of the Remuneration Policy relative to the governing bodies of Teixeira Duarte.The Remuneration Committee of TD,SA plans to submit, for the assessment of the General Meeting, a statement on the policy of remunerationof the senior managers of the Company.II.31. Indication of the annual value of the remuneration received individually by the members of the management andsupervisory bodies of the company, including fixed and variable remuneration and, relative to the latter, mention of itsdifferent components, the portion deferred and portion already paid.In accordance with the above, the members of the management board of TD,SA did not receive any remuneration for the performance of theseduties during 2010.However, the abovementioned members of the Board of Directors received the respective remuneration for the performance of the same dutiesin TD-EC, former holding of the Group, that TD,SA later replaced as the leading listed company.Under these assumptions and taking into consideration that the members of the governing bodies will begin to receive the respective remunerationfor the performance of their duties at TD,SA and not at TD-EC, it is important to specify the remuneration received by each while stillin their capacity of members of the governing bodies of TD-EC, during the financial year of 2010.During 2010, the total value of the remunerations received collectively by the members of the Board of Directors was EUR 1,611,936.28, andthe remunerations received individually by the members of this body was as follows:114

Corporate Governance Report 2010All the values listed above were paid during 2010, therefore there are no portions whose payment is deferred over time.II.32. Information on how the remuneration is structured so as to permit the alignment of the interests of the membersof the management board with the long-term interests of the company, as well as on how it it is based on the assessmentof performance and discourages excessive risk taking.In addition to the obligations inherent to the performance of the actual duties, the remuneration of the Directors also, complimentarily, actsto meet the alignment of their interests with those of the Company. Indeed, the remuneration is determined by this Committee elected atthe General Meeting, which establishes these values in accordance with guidelines linking the performance and results of the Company as awhole, as well as the overall activity of the management board, compared with the defined objectives, taking into account the conditions andvalues of the remunerations of the other employees of the Company.II.33. Regarding the remuneration of the executive Directors:a) Reference to the fact that the remuneration of the executive Directors includes a variable component and informationon how this component depends on the assessment of performance;The remuneration of the Directors includes a variable component - which is not related to the evolution of the stock market prices of theCompany's shares, but rather depends on the net income for the year, the development of corporate business –, and, furthermore, no Directoris entitled to any variable component of his remuneration unless it is specifically attributed by the Remuneration Committee, under the termsand on the grounds established by the Remuneration Committee.b) Indication of the governing bodies which are competent to carry out the assessment of the performance of the executiveDirectors;The competent body for the assessment of the performance of the Company's Directors, all of whom are executive, is the General Meeting,which, under the terms of number 1 of article 376 of the Commercial Companies Code, carries out an annual general assessment of themanagement and supervision of the Company.Moreover, the Remuneration Committee assesses the activity developed by each Director for the purpose of establishing the respective remuneration.c) Indication of the predetermined criteria for the assessment of the performance of the executive Directors;There are no predetermined criteria for the assessment of the performance of the Executive Directors. Indeed, all the Directors are assessedin accordance with their respective performance during the year, based on fixed and achievable objectives, the Company's net income andvarious other parameters which, due to their diversity and variation over the years, are not to be considered exhaustive but rather adaptableto the circumstances of each period and each specific situation.d) Detailed explanation of the relative importance of the variable and fixed components of the remuneration of the116

Corporate Governance Report 2010Directors and indication of the ceilings for each component;In 2010, the total value of the variable remunerations represented 62.4% of the total value received.As noted in a), the variable component of the remuneration of Director depends on the net income for the year and the development ofcorporate business. Therefore, there is no ceiling for each component, but rather an attribution in conformity with the parameters identifiedabove and the assessment of the performance and execution of the respective duties by each Director.e) Indication of the deferral of the payment of the variable component of the remuneration, mentioning the period ofdeferral;The payment of the variable component earned in 2010 was not deferred.f) Explanation on how the payment of the variable remuneration is subject to the continuation of the positive performanceof the company over the period of deferral;Not applicable. The payment of the variable component of the remuneration was no deferred, although it is intrinsically dependent on thenet income for the year and development of corporate business. In this regard, it is important to remember that the Directors of TD,SA are"in-house people" and have been an integral part of the business for dozens of years, and that their remunerations are placed in the contextof a general plan covering all employees. They are not managers by trade who are there for merely circumstantial reasons or personal interestsof the shareholders.g) Sufficient information on the criteria underlying the attribution of variable remuneration in shares as well as on theholding, by the executive Directors, of company shares to which they might have accessed, on any signing of contractsrelative to these shares, namely, hedging or risk transfer contracts, the respective limit, and their relation to the value ofthe annual total remuneration;Not applicable. The variable retribution is not attributed in shares and no contracts have been signed with the characteristics described above.h) Sufficient information on the criteria underlying the attribution of variable remuneration in options and indication ofthe deferral period and price for exercise of the option;Not applicable. The variable retribution is not attributed through options.i) Identification of the main parameters and grounds of any system of annual bonuses and any other non-cash benefits;As noted above, the Remuneration Committee takes into consideration, apart from the performance of the Directors, the net income of theCompany as a whole, as well as the overall activity of the management board, compared with the defined objectives, taking into account theconditions and values of the remunerations of the other employees of the Company.Furthermore, no relevant non-cash benefits were attributed to the Directors of the Company.j) Remuneration paid in the form of profit-sharing and/or payment of bonuses and the reasons for the award of such117

Corporate Governance Report 2010bonuses and/or profit-sharing;In the overall remuneration of the members of the Board of Directors, no sum is paid in the form of profit-sharing.The members of the Board of Directors are paid a sum as a performance bonus and the distribution of profit.l) Compensation paid or owed to former executive Directors relative to their termination of office during the financialyear;No compensation has been paid, or is owed, to any former executive Directors relative to their termination of office during the financial year.Furthermore, it should be noted that the only Director who terminated office, and during 2011, was not paid any compensation, nor is anythingowed in that regard.m) Reference to the contractual limit established for the compensation payable for the unfair dismissal of a Director andits relationship with the variable component of the remuneration;There is no contractual limit established for the compensation payable for the unfair dismissal of a member of the Board of Directors, considering,firstly, that no contract us signed for the performance of the duties of the position of Director, nor is any agreement signed on any possiblecompensation payable for fair or unfair dismissal. The existence of a contractual limit under the terms referred to above would be incoherent,in view of the characteristics of the existing relationship between the Company and the members of its Management board.The same applies to the existence of appropriate legal instruments so that the compensation established for any form of unfair dismissal is notpaid if the dismissal or termination by agreement is due to the inadequate performance of the Director.n) Amounts paid, for any reason, by other companies in a controlling or group relationship;As explained above, the Directors of TD,SA earn their remuneration through TD-EC. However, they receive no remuneration, of any nature, paidby companies that are in a controlling or group relationship with either TD,SA or TD-EC.o) Description of the main characteristics of supplementary pension or early retirement schemes for Directors, indicatingif they were, or not, subject to the assessment of the General Meeting;Regarding any retired former Directors, it should be mentioned that the Remuneration Committee is responsible for establishing all theamounts paid in this context, under all circumstances.As to the attribution of supplementary pension schemes, the actual Articles of Association establish, in article 22, transcribed below, theterms and criteria on which the Remuneration Committee should base the establishment of such amounts:ARTICLE TWENTY-TWOONE - When people who have performed duties as Directors cease to hold office, the Company may grant them a retirement pensionfor life, whenever they meet one of the following requirements:118

Corporate Governance Report 2010a) Have held that position in this Company for over ten years, counting, for the effect, the years of service under the same position atTEIXEIRA DUARTE - Engenharia e Construções, S.A.;b) Have provided, even with a shorter period of holding this position, a total of over twenty-five years of service to this Company,counting, for the effect, the years of service at TEIXEIRA DUARTE - Engenharia e Construções, S.A.;TWO - The value of this pension will be determined taking into consideration the time or relevance of the services provided and the situationof the beneficiary, and should be reviewed on an annual basis but can never be greater than the highest remuneration receivedany given time by the permanent Directors.THREE - Through delegation of the General Meeting, hereby established, the Remuneration Committee referred to in Article Elevenwill be responsible for the assessment of the cases submitted to it and establishing the values and other procedures for the award ofpensions.p) Estimate of the value of any relevant non-cash benefits considered as remuneration not covered in the previoussituations;There are no other relevant non-cash benefits, apart from those established by this Committee and listed above.q) Existence of mechanisms preventing Directors from signing contracts which place in question the underlying rationaleof the variable remuneration.There are no mechanisms of this type, in view of the relationship between the Company and its Directors and the absence of any contractualbinding that might place in question the underlying rationale of the variable remuneration, beyond the fact that this component of the remunerationis not attributed based on predetermined criteria, as described above.II.34. Reference to the fact that the remuneration of the non-executive Directors of the management board does notinclude variable components.Not applicable, considering that there are no non-executive Directors.II.35. Information on the policy on the communication of irregular practices adopted by the company (means of communication,persons with legitimacy to receive the communications, treatment to be made of the communications andindication of the persons and bodies with access to the information and respective intervention in the procedure).Regarding the policy of communication of irregularities which have allegedly occurred, the Company encourages its employees to provideinformation, through the means they deem convenient – direct contact, written document, e-mail or telephone – to the respective hierarchiesof any detected irregularities. The persons with legitimacy to receive these communications are their superiors (directors and personsresponsible for operating centres and central departments).Whenever deemed appropriate to the correct establishment of the facts and responsibilities inherent to their practice, the corresponding119

Corporate Governance Report 2010proceedings or enquiries are initiated, also safeguarding the necessary confidentiality of the communication when requested by the declarantor deemed convenient by the receiver, without prejudice to this not being followed if the persecution is revealed to be of no value to theorganisation.The proceedings are monitored by the person responsible for the department where the alleged irregularity has occurred, using people whoare not involving in these situations and, if appropriate, the legal services and central department for human resources and administrativeservices.The proceedings are subject to the decision of the hierarchies involved, which shall be reported to the Board of Directors and any other entitiesto which it is mandatory that this communication must be provided.In addition to the abovementioned rules and especially from the point of view of the other stakeholders, an Investor Support Office is alsoavailable for the reporting of any possible irregularities, and likewise the Company's supervisory bodies, that is, the Supervisory Board and theChartered Accountants Company.SECTION V – SPECIALISED COMMITTEESII.36. Identification of the members of the committees constituted for the effects of the assessment of the individualand overall performance of the executive Directors, reflection on the system of governance adopted by the company andidentification of potential candidates with the profile for the position of Director.As described in II.2, as a result of the organisational model and the different governing bodies, it was not considered appropriate to create anycommittees for the effect of the assessment of the individual and overall performance of the executive Directors, reflection on the system ofgovernance adopted by the company and identification of potential candidates with the profile for the position of Director.II.37 Number of meetings of the committees constituted with competence in management and supervisory matters duringthe financial year in question, and reference to the drawing up of the minutes of these meetings.Not applicable (cf. II.2 and II.36).II.38 Reference to the fact of a member of the remuneration committee having knowledge and experience on matters ofremuneration policy.Currently, the Remuneration Committee is composed of the following persons, appointed at the time of the constitution of the company on30 November 2009, to perform duties during the term of office 2009/2010:Mr. Pedro Pereira Coutinho Teixeira Duarte120

Corporate Governance Report 2010Mr. Manuel Pereira Coutinho Teixeira DuarteMr. António Carlos Calainho de Azevedo Teixeira DuarteMr. Pedro Pereira Coutinho Teixeira Duarte is not considered independent in relation to the members of the Board of Directors, because hisfather is Mr. Pedro Maria Calainho Teixeira Duarte, Chairman of the Board of Directors of the Company. Since TD,SA is controlled by companiesowned by members of the Teixeira Duarte family, it is naturally not recommended that any of them should be part of the Remuneration Committee.Traditionally and during decades, this has been the practice and always in conformity with the current rules and recommendationson the remuneration of the members of the Management Board established by the CMVM, therefore there is no reason to change this. It isimportant to stress that this is a Company which, following the example of TD-EC, which it replaced as a holding of the Group, with its ownspecific way of acting, its distinctive business image, which has adopted a very particular way of being, a healthy management policy, that,before the public and market has been recognised as such.However, it should be noted that, as at 31 December 2010, all the members of the Remuneration Committee have the status of independentunder the terms legally defined in article 414 of the Commercial Companies Code.All the members of the Remuneration Committee have knowledge and experience on matters of remuneration policy, taking into account thatthey have been performing these duties for several years.Whenever a meeting of the Remuneration Committee is held, minutes are drawn up which are then transcribed to the corresponding Bookand filed in the Company's vaults.At least two members of the Remuneration Committee were present at the sessions of the General Meeting of TD,SA during 2010.II.39. Reference to the independence of the natural or legal persons contracted by the Remuneration Committee througha work or service contract relative to the board of directors as well as, when applicable, to the fact that these persons arecurrently connected to a consultant of the company.No natural or legal persons were contracted for the Remuneration Committee.CHAPTER IIIInformation and AuditsAlways guided by a philosophy of sobriety, accuracy and honesty, the Company discloses to the public, in a complete, true, current, clear,objective and licit manner, within the periods of time and through the established means of disclosure, not only all the facts defined legally121

Corporate Governance Report 2010as capable of being disclosed, namely those falling under the scope of "privileged information", in accordance with the definition presentedin article 248 of the Securities Market Code, as well as all the financial information and relative to the activity under the terms determined bythe rules in force, both at an individual and consolidated level.In addition to the Investor Support Office referred to below, all the shareholders have access, under the terms and within the legal periods oftime, the accounts and other preparatory information enabling them to participate, duly qualified, in the work of the General Meetings of theCompany.Pursuant to the provisions in article 4 of CMVM Regulation number 1/2010, TD,SA has its own website, with the domain www.teixeiraduarte.pt, presenting the information defined in this Regulation, that is:--The corporate name, capacity of public company, head office, Commercial Register where the Company is registered and its collectiveperson identification number;--Articles of Association;--Identity of the members of the Governing Bodies and Representative for Market Relations;--Investor Support Office, respective functions and contacts;--Documents presenting the accounts;--Six-monthly calendar of corporate events, disclosed in the beginning of each semester, including, amongst others, General Meetings,disclosure of the annual, six-monthly and quarterly accounts;--Proposals presented for discussion and voting at the General Meeting, during the 15 prior to the date of the General Meeting;--Call notices for the General Meeting, during, at least, the 21 prior to the date of the General Meeting.For the effect of the applicable recommendations, the elements described above are also provided in English.III.1. Structure of the share capital, including indication of non-tradable shares, different categories of shares, their inherentrights and duties and percentage of share capital that each category represents.The share representing the share capital have the nominal value of 1.00 Euro, all in book entry form, nominative and listed for trading onregulated markets. The shares belong to a single category and there are nos shares with special rights or duties.III.2. Qualifying holdings in the share capital of the issuer, calculated under the terms of article 20 of the Securities MarketCode.122

Corporate Governance Report 2010As at 31 December 2010, the qualifying holdings, calculated under the terms of article 20 of the Securities Market Code, were as follows:- TEIXEIRA DUARTE – Sociedade Gestora de Participações Sociais, S.A. was imputed a total holding of 227,723,249 shares, correspondingto 54.22% of the share capital and voting rights, which includes other qualifying holdings: Teixeira Duarte – Sociedade Gestora de ParticipaçõesSociais, S.A. (10.06%) itself, of the company controlled by it TDG – Sociedade Gestora de Participações Sociais, S.A. (36.82%)and of its Chairman of the Board of Directors, Mr. Pedro Pereira Coutinho Teixeira Duarte (2.45%).- Banco Comercial Português, S.A. was imputed a total holding of 42,049,716 shares, corresponding to 10.0118% of the share capital and votingrights, including the qualifying holding owned by the Pensions Fund of the Banco Comercial Português Group (9.99%);III.3. Identification of shareholders with special rights and the description of these rights.There are no shareholders with special rights.III.4. Any restrictions to the transferability of shares, such as clauses of consent for disposal or limits to the ownership ofshares.There are no restrictions to the transferability of shares, namely clauses of consent for disposal or limits to the ownership of shares.III.5. Shareholders' agreements that are known to the company and might lead to restrictions on matters of the transferof securities or voting rights.As far as the Company knows, there are no agreements between shareholders, namely those which might lead to restrictions on mattersrelative to the transfer of securities or voting rights.III.6. Rules applicable to the alteration of the articles of association.There are no specific rules for any alterations to the Articles of Association, with the general rules established in the Commercial CompaniesCode being applicable, in particular the provisions in articles 85, 383, number 2 and 386.III.7. Control mechanisms established for any system of participation of the workers in the share capital to the extent thatvoting rights are not exercised directly by them.123

Corporate Governance Report 2010There is no system of participation of the workers in the share capital, therefore there is no justification for the existence of control mechanismsto the extent that the voting rights are not exercised directly by them.III.8. Description of the evolution of the stock market prices of the shares of the issuer, taking into account, namely:a) The issuance of shares or other securities extending entitlement to the subscription or acquisition of shares;b) The announcement of results;c) The payment of dividends made by category of shares, indicating the net value per share.As explained above, the shares of TD,SA were listed for trading on 16 August 2010.From their entry into trading until 31 December 2010, the shares devalued by 30.47%, falling from EUR 1.05 on 16 August 2010 to EUR 0.73as at 31 December 2010.Regarding liquidity and turnover during this year, 13,162,403 shares were traded on the stock market, with a total turnover of EUR 10,935,589.The graph below shows the evolution of the stock market share prices since their listing for trading on the regulated market of EuronextLisbon.1,05€Teixeira Duarte, S.A. Share Prices0,99€0,91€0,92€0,91€0,87€10,84€0,79€20,73€0,67€16-8-201031-8-201015-9-201030-9-201015-10-201029-10-201115-11-201030-11-201015-12-201031-12-20101 – Announcement of payment of dividends relative to 2009 - 23 September 20102 – Information on the activity, results and economic and financial situation in the 3rd Quarter 2010 - 25 November 2010As at 31 December 2010, the share price was EUR 0.73 and, today, 28 April 2011 it is EUR 0.53.124

Corporate Governance Report 2010III.9. Description of the policy on the distribution of dividends adopted by the company, identifying, namely, the value ofthe dividend per share distributed over the last three financial years.The Company´s policy is to prioritise the reinforcement of the company's equity, while at the same time ensuring a continued and balanceddistribution of dividends.During 2009, the net value of the dividend distributed was EUR 0.01 per share.For 2010, the Board of Directors proposed the distribution of dividends of EUR 0.015 per share.III.10. Description of the main characteristics of the plans to attribute shares and of the plans to attribute share purchaseoptions which have been adopted or were in force during the financial year in question, namely, justification for theadoption of the plan, category and number of beneficiaries of the plan, conditions of attribution, clauses on the inabilityto dispose of shares, criteria relative to the price of the shares and price for the exercise of options, period during whichthe options can be exercised, characteristics of the shares to be attributed, existence of incentives for the acquisition ofshares and/or exercise of options and competence of the management board to implement or modify the plan.Indication of:a) The number of shares required for the exercise of the attributed options and of the number of shares required for theexercise of options which can be exercised, with reference to the beginning and end of the year;b) The number of options attributed, able to be exercised and extinguished during the year;c) The assessment at the general meeting of the characteristics of the plans which were adopted or were in force duringthe financial year in question.As described in I.17, there are no plans relative to the attribution of shares or attribution of options for the acquisition of shares. Some yearsago, and in relation to TD-EC, depending on the circumstances and economic environment, there were reference shareholders who provided acertain number of shares to be assigned to the staff members of this Company with defined periods of time and at specified prices. However,regarding TD,SA and relative to the year under consideration, there were no such operations.III.11. Description of the main elements of the businesses and operations carried out between, on the one hand, thecompany and, on the other hand, members of its management and supervisory bodies or companies in a controlling orgroup relationship with it, provided that they are significant in economic terms for any of the parties involved, exceptwith respect to businesses or operations which, cumulatively, are carried out under normal market conditions for similaroperations and are part of the current activity of the company.No businesses or operations with the characteristics described above were undertaken.125

Corporate Governance Report 2010III.12. Description of the fundamental elements of the businesses and operations carried out between the company andowners of qualifying holdings or entities that are in any relationship with it, under the terms of article 20 of the SecuritiesMarket Code, outside of normal market conditions.No businesses or operations with the characteristics described above were undertaken.III.13. Description of the procedures and criteria applicable to the intervention of the supervisory body for the effects ofthe prior assessment of transactions to be carried out between the company and owners of the qualifying holdings orentities which are in any relationship with it, under the terms of article 20 of the Securities Market Code.There are no procedures and criteria under the terms mentioned above since the type of operations carried out between the Company andowners of qualifying holdings are financed by Banco Comercial Português, S.A., which is considered to be a matter of the exclusive responsibilityand competence of the Board of Directors and which, naturally, concerns operations carried out under normal market conditions, wherebyit is deemed inappropriate to subject these transactions to the prior opinion of the supervisory bodies.III.14. Description of the statistics (number, average value and maximum value) relative to the transactions subject to theprior intervention of the supervisory body.As described in the previous point, there are no transactions subject to the prior intervention of the supervisory body.III.15. Indication of the provision, on the company's website, of the annual reports on the activity developed by the generaland supervisory board, financial matters committee, audit committee and supervisory board, including indication ofany constraints encountered, together with the documents presenting the accounts.Under the terms and for the effect of the CMVM Recommendations on this matter, and as described above in II.4, the Annual Reports on theactivity developed by the Supervisory Board, including the description of the supervisory activity developed and referring to any constraintsencountered, have been disclosed every year on the Company's website, together with the documents presenting the accounts, always inobservance of the rules and periods of time established in the Law and other applicable regulations.III.16. Reference to the existence of an Investor Support Office or other similar service, indicating:a) Duties of the Office;126

Corporate Governance Report 2010b) Type of information provided by the Office;c) Means of access to the Office;d) The company's website;e) Identification of the representative for market relations.In order to reinforce the policy of disclosure of information referred to above, with a view to ensuring strict compliance with the principleof equality among shareholders and for the purpose of preventing any asymmetries in access to information on the part of investors, theCompany has an Investor Support Office, which operates directly under Mr. Manuel Maria Calainho de Azevedo Teixeira Duarte, Director withthis area of responsibility, also integrating Mr. José Pedro Cobra Ferreira, Representative for Market Relations, duly registered at the CMVM.All the information required by investors and available under the rules, regulations and other applicable directives is provided by this Officeand may be accessed through the following means of communication:Address: Lagoas Park, Edifício Dois, 2740-265, Porto Salvo, OeirasTel: + 351 217 912 415Fax: + 351 217 912 421e-mail: representantemercado@teixeiraduarte.ptIII.17. Indication of the value of the annual remuneration paid to the auditor and to other natural or legal persons belongingto the same network supported by the company or by legal persons in a controlling or group, as well as details ofthe percentage relative to the following services:a) Legal review of accounts services;b) Other guarantee and reliability services;c) Tax consultancy services;d) Services other than the legal review of accounts.If the auditor provides any of the services described in sub-paragraphs c) and d), a description should be made of themeans to safeguard the independence of the auditor.(For the effect of this information, the concept of network is as defined in European Commission Recommendation numberC (2002) 1873, of 16 May.)127

Corporate Governance Report 2010The External Auditor should, under its competences, verify the application of the remuneration policies and systems, the effectiveness andoperation of the internal control mechanisms and report any flaws to the company's supervisory board, pursuant to the provisions in CMVMRecommendation number III.1.4.It should also be noted that neither the External Auditor, nor any other entities in a holding relationship or which are part of the same network,provide TD,SA any services other than audit services.The retribution of the Chartered Accountants Company is determined in accordance with the volume and quality of the services provided inthe context of the duties entrusted under the terms of the Law and Articles of Association.For the specific purposes of the applicable rules, we disclose that, during the year ended 31 December 2010, the auditor MARIQUITO, CORREIA& ASSOCIADOS, SROC and other natural and legal persons belonging to the same network supported by the Company and/or by legal personsin a controlling or group relationship, were paid the total value of EUR 272,500.00, relative to the only services provided, that is, Legal Reviewof Accounts and Audit services.III.18 Reference to the rotation period of the External Auditor.The External Auditor was only appointed for the position in November 2009 to perform duties during the two-year period 2009/2010.Although the Chartered Accountants Company MARIQUITO, CORREIA & ASSOCIADOS, SROC had previously performed the duties inherent toPermanent Statutory Auditor of various companies of the TEIXEIRA DUARTE Group, namely at TD-EC, the truth is that such circumstances donot affect its independence in the performance of the respective functions.The issue of the rotation of the external auditor is irrelevant since the external auditor is currently performing its first term of office.128

Financial Statements 2010

Balance Sheet as at 31 December 2010 and 2009(Values expressedin thousand Euros)The notes are an integral part of thebalance sheet for the period ended on31 December 2010HEADINGSNOTESDATES31-12-2010 31-12-2009ASSETSNon-current assetsFinancial holdings - equity method 6.2 577,370 288,680Deferred tax assets 7.2 439 2577,809 288,682Current assetsState and other public bodies 8.1 59 -Cash and bank deposits 4 36 -95 -TOTAL ASSETS 577,904 288,682EQUITY AND LIABILITIESEquityPaid-up share capital 15 420,000 287,881Legal reserves 11 500 -Other reserves 11 2,391 -Retained earnings 2.4 (6,167) -Adjustments in financial assets 6.2 55,154 -471,878 287,881Net income for the period 99,675 788TOTAL equity 571,553 288,669LiabilitiesCurrent liabilitiesSuppliers 8.2 23 -State and other public bodies 8.4 21 -Loans obtained 8.3 4,757 -Other accounts payable 8.4 1,550 13TOTAL LIABILITIES 6,351 13TOTAL EQUITY AND LIABILITIES 577,904 288,682130

Income Statement by Nature for the periods ended on 31 December 2010 and 2009INCOME AND COSTSNOTESDATES31-12-2010 31-12-2009Gains/(losses) imputed to subsidiaries 6.2 101,417 799External supplies and services 12 (562) (7)Staff costs 14 (1,544) -Other costs and losses (28) (6)(Values expressedin thousand Euros)The notes are an integral part of theincome statement by nature for theperiod ended on 31 December 2010Net operating income (before interest and taxes) 99,283 786Interest and similar costs paid 8.5 (45) -Pre-tax profit 99,238 786Income tax for the period 7.1 437 2Net income for the period 99,675 788131

Statement of Changes in Equity for the periods ended on 31 December 2010 and 2009(Values expressedin thousand Euros)The notes are an integral part of theconsolidated statement of changesin equity for the period ended on 31December 2010.DESCRIPTIONNotesShareCapitalEquity attributed to the shareholders of the CompanyLegalReservesOtherReservesRetainedEarningsAdjustmentsin FinancialAssetsNetincome forthe yearPOSITION AT THE BEGINNING OF THE PERIOD 2009 1 - - - - - - -CHANGES IN THE PERIODFirst adoption of the new accounting standard 2.1 - - - - - (6,167) (6,167)2 - - - - - (6,167) (6,167)NET INCOME FOR THE PERIOD 3 6,955 6,955FULL NET INCOME 4=2+3 2.1 788 788TotalEquityOPERATIONS WITH SHAREHOLDERS IN THE PERIODPayments of share capital 2.1 287,881 - - - - - 287,8815 287,881 - - - - - 287,881POSITION AT THE END OF THE PERIOD 2009 6=1+2+3+5 287,881 - - - - 788 288,669POSITION AT THE BEGINNING OF THE PERIOD 2010 6 287,881 - - - - 788 288,669CHANGES IN THE PERIODApplication of net income 11 - 500 2,391 (6,167) - 3,276 -Other changes recorded under equity 6.2 - - - - 55,154 - 55,1547 - 500 2,391 (6,167) 55,154 3,276 55,154NET INCOME FOR THE PERIOD 8 99,675 99,675FULL NET INCOME 9=7+8 - - - - - 102,951 154,829OPERATIONS WITH SHAREHOLDERS IN THE PERIODPayments of share capital 15 132,119 - - - - - 132,119Distributions 11 - - - - - (4,064) (4,064)10 132,119 - - - - (4,064) 128,055POSITION AT THE END OF THE PERIOD 2010 6+7+8+10 420,000 500 2,391 (6,167) 55,154 99,675 571,553132

Cash Flow Statement for the periods ended on 31 December 2010 and 2009INCOME AND COSTSNOTESPERIODS2010 2009CASH FLOW FROM OPERATING ACTIVITIES - DIRECT METHODPayments to suppliers (619) -Cash flow generated by operations (619) -Other receipts/payments (8) -Cash flow from operating activities (1) (627) -(Values expressedin thousand Euros)The notes are an integral part of thecash flow statement for the yearended on 31 December 2010CASH FLOW FROM INVESTMENT ACTIVITIESPayments relative to:Financial investments - (1,000)Cash flow from investment activities (2) - (1,000)CASH FLOW FROM FINANCING ACTIVITIESReceipts derived from:Loans obtained 4,757 -Payments relative to:Interest and similar costs (30) -Dividends (4,064) -Payment of Share Capital - 1,000Cash flow from financing activities (3) 663 1,000Variation in cash and cash equivalents (1+2+3) 36 -Effect of exchange rate differences - -Cash and cash equivalents at the beginning of the year 4 - -Cash and cash equivalents at the end of the year 4 36 -133

Financial Statements 2010NOTESAs at 31 December 20101. Introductory Note:Corporate Name: Teixeira Duarte, S.A. ("Company")Head Office: “Lagoas Park”, Edifício 2, Porto Salvo, OeirasNIPC: 509234526Date of Constitution: 30 November 2009Core activity and other relevant activities: implementation and management of investments, the coordination and supervision of other companies integrated in or related to its corporategroup, operating essentially in the areas of strategic and organisational planning, as well as the provision of administrative, management, consultancy, operational assistance orsupport in terms of human resources, technical and financial services to participated companies or entities with which contracts have been signed for that effect.The attached financial statements refer to the Company on an individual basis, with financial investments having been recorded through the equity method, as mentioned in note 3.1a) below.The Company will prepare and present the consolidated financial statements separately, comprising the financial statements of the companies where the former controls the management.All the values of these notes are expressed in thousand Euros2. Accounting Standard for the Preparation of the Financial Statements2.1. The attached financial statements were prepared in conformity with the Accounting and Financial Reporting Standards (NCRF), established in the new accounting standarddesignated the Accounting Standardisation System (SNC), approved by Decree-Law number 158/2009, of 13 July.2.2. None of the provisions of the Accounting Standardisation System (SNC) were derogated since it is necessary for the financial statements to give a real and appropriate image of theassets, liabilities and net income of the entity.2.3. The financial information relative to the year ended on 31 December 2009, the last year of adoption of the Portuguese Official Audit Plan (POC), and transition period for the effectof the first adoption of the Accounting and Financial Reporting Standards (NCRF), was constructed in compliance with NCRF 3 – First-time adoption of the NCRF, having involved,before the adjustments disclosed in the present notes, reclassifications of all the headings of the balance sheet, income statement by nature and cash flow statement, redistributingthe respective monetary sums from the previous classifications in accordance with the encoding of the POC accounts, to the encoding of the accounts established in the SNC and in therespective financial statement models.2.4. First-time adoption of the NCRFThe effect of the transition to the SNC in the period ended on 31 December 2009 was as follows:a) Reconciliation of the equity reported in accordance with the previous Generally Accepted Accounting Principles (PCGA) with the equity following the NCRF, between the date oftransition to the NCRF and the end of the last period presented in the most recent annual financial statements, prepared according to the previous PCGA:Equity as at 31/12/2009 (POC) 299,114Adjustment in the equity method (11,233)Equity as at 31/12/2009 (SNC) 287,881b) Reconciliation of the net income reported in accordance with the previous Generally Accepted Accounting Principles (PCGA), relative to the last period of the most recent annualfinancial statements, with the net income following the NCRF relative to the same period:Net Income as at 31/12/2009 (POC) 6,955Adjustment in the equity method (6,167)Net Income as at 31/12/2009 (SNC) 788134

Financial Statements 2010c) The first financial statements in accordance with the NCRF are not the first financial statements presented.2.5. Teixeira Duarte, S.A. (TD,SA) was constituted on 30 November 2009, which is why the accounts for 2009 and 2010 are not comparable.3. Main Accounting Policies3.1. Basis of MeasurementThese financial statements were prepared under the assumption of the continuity of operations and in accordance with the accounting principles generally accepted in Portugal.a) Financial InvestmentsFinancial investments in subsidiary companies are recorded using the equity method, whereby the holdings are initially recorded at their acquisition cost, then increased or reducedby the difference between that acquisition cost and the value proportional to the holding owned in the equity of those companies, reported on the acquisition date or on the firstapplication of the abovementioned method.In accordance with the equity method, financial investments are adjusted periodically by the value corresponding to the participation in the net results of the subsidiary companiesagainst income and gains or costs and losses in subsidiaries, and by any other variations which might have occurred in their equity against the heading "Adjustments in financial assets",as well as by the recognition of impairment losses. Furthermore, the dividends received from these companies are recorded as a reduction in the value of financial investments.Losses in subsidiaries which exceed the investment made in those entities are not recognised unless the Company has undertaken commitments in relation to them.b) Impairment of assetsOn each reporting date, and whenever an event or alteration in circumstances is identified which indicates that the amount for which the asset is recorded may not be recoverable, anassessment is made of the assets' impairment.Whenever the amount for which the asset is recorded is greater than its recoverable value, an impairment loss is recognised and recorded in the income statement under the respectiveheadings, according to their nature.The recoverable amount is the highest value between the net sales price and the usage value. The net sales price is the amount that would be obtained from the sale of the asset in atransaction between independent and knowledgeable parties, minus the costs directly attributable to the sale. The usage value is the net present value of the estimated future cashflow which would be expected to arise from the continued use of the asset and its disposal at the end of its working life. The recoverable value is estimated for each asset, individuallyor, when this is not possible, for the unit generating the cash flow to which the asset belongs.A reversal of impairment losses recognised in previous years is recorded when it is concluded that the previously recognised impairment losses no longer exist or have decreased. Thereversal of impairment losses is immediately recognised in the income statement under the respective headings. The reversal of the impairment loss is made up to the amount thatwould have been recognised (net of amortisation or depreciation) if the impairment loss had not been recorded in prior years.c) Accruals and DeferralsIncome and costs are recorded on an accrual basis, through which they are recognised as they are generated. When the real value of the costs and income is unknown they are estimated.The differences between the amounts received and paid and the corresponding income and costs are recorded under Other accounts receivable and Deferrals (current and non-current)in the Assets and under Other accounts payable and Deferrals (current and non-current) in the Liabilities.d) Costs of Loans ObtainedCosts related to loans are recorded in the income statement of the period to which they refer.e) Financial instrumentsFinancial assets and financial liabilities are recognised when the Company becomes a party in the contractual relationship.135

Financial Statements 2010f) Cash and cash equivalentsThe amounts included in Cash and cash equivalents correspond to cash, bank deposits, term deposits and other cash investments, with a maturity of less than three months and whichcan be immediately mobilised with no significant risk of change in value.g) Financial liabilities and equity instrumentsFinancial liabilities and equity instruments are classified according to the nature of the contract regardless of their legal form. The equity instruments present a residual interest in theCompany's assets after deduction of the liabilities.Equity instruments issued by the Company are recorded at the amount received net of costs incurred with their issuance.h) Balances payableThe accounts payable are recognised initially at their respective fair value which is equivalent to the fair value of their payment.i) Bank loansLoans are recorded initially and recognised under liabilities at the nominal value received. Financial costs are recognised as costs for the period in which they are incurred.j) Corporate income tax"Income tax for the period" corresponds to the sum of current tax and deferred tax.Current income tax is calculated based on the taxable profit of the entity in accordance with the tax rules in force, while deferred tax results from the temporary differences between theamount of the assets and liabilities for the effect of accounts reporting (book value) and the respective amounts for tax purposes (tax base).Deferred tax assets are calculated and assessed annually using the taxation rates which are in force or announced to be in force on the expected date of the reversal of the temporarydifferences.Deferred taxes assets are recognised only when there are reasonable expectations of sufficient future taxable profits for their use, or in situations where there are temporary differencesfor taxation purposes which compensate the deductible temporary differences in the period of their reversal.At the end of each period these deferred taxes are reviewed and reduced whenever their future use is not longer probable.Deferred taxes are recorded as a cost or income for the year, unless they result from values recorded directly under equity, in which case the deferred tax is also recorded under thesame heading.3.2. Value Judgements of the Board of DirectorsWhen preparing the financial statements, the entity adopted certain assumptions and estimates which affect the related assets, liabilities, income and costs. All the estimates and assumptionsmade by the Board of Directors were based on the best existing knowledge, at the date of the approval of the financial statements, of the events and transactions in progress.The most significant accounting estimates reflected in the financial statements include accrued costs relative to the participation of profit.4. Cash FlowThe breakdown of cash and cash equivalents as at 31 de December de 2010 and 2009 is as follows:2010 2009Demand bank deposits 36 -136

Financial Statements 20105. Related Parties5.1. Remunerations of the Governing Bodies2010 2009Governing BodiesSupervisory Board 33 -Chartered Account 40 873 85.2. Transactions between related partiesThe main balances with related parties as at 31 December 2010 and 2009 can be broken down as follows:Balances payable2010 2009Lagoas Hotel, S.A. 4 -Teixeira Duarte – SGPS, S.A. - 54 5The main transactions with related parties as at 31 December 2010 and 2009 can be broken down as follows:Purchases and services obtained2010 2009Teixeira Duarte – Engenharia e Construções, S.A. 3 -Lagoas Hotel, S.A. 4 -Teixeira Duarte – SGPS, S.A. - 57 56. Investments in subsidiaries6.1. As at 31 December 2010, the Company owned the following holdings in subsidiaries:Corporate Name Head office Shareholding PercentageTeixeira Duarte – Engenharia e Construções, S.A. Edifício 2, Lagoas Park, Porto Salvo 100%137

Financial Statements 20106.2. Investments in subsidiariesThe following movements occurred in the equity interests held in subsidiaries for the years ended on 31 December 2010 and 2009:HoldingsBalance as at 1 January 2009 -Effects of the application of the equity method:- Effect on net income for the year 799Increases 287,881Balance as at 31 December 2009 288,680Balance as at 1 January 2010 288,680Effects of the application of the equity method:- Effect on net income for the year 101,417- Effect on equity 55,154Increases 132,119Balance as at 31 December 2010 577,370The increase in the holding of Teixeira Duarte - Engenharia e Construções, S.A. (TD-EC) which occurred in the year ended on 31 December 2010 resulted from the increase in share capitalcarried out by the Company and paid through new entries in kind. Therefore, the Company became the owner of a further 132,119,201 TD-EC shares, through the exchange of the samenumber of shares which constituted the abovementioned increase in share capital.Thus fulfilling the proposal assumed during 2009 by the Company of the acquisition of the entirety of the 420,000,000 shares constituting the share capital of TD-EC.The main financial information relative to the subsidiary companies is as follows:Total Assets Total Liabilities Income Net Income2010 2009 2010 2009 2010 2009 2010 2009Teixeira Duarte - Engenharia e Construções, S.A. 1,494,463 1,388,856 917,092 933,782 913,932 821,060 101,417 85,5327. Corporate income taxThe Company is subject to Corporate Income Tax (IRC) at the rate of 12.5% on the taxable amount of up to EUR 12,500, and at the rate of 25% on the remaining taxable amount. Inaddition to Corporate Income Tax, the Municipal Tax (Derrama Municipal) is also applied, incident on taxable profit and whose rate may vary to a maximum of 1.5%. Furthermore, asof 1 January 2010 taxable profit in excess of EUR 2,000 thousand will be subject to the State Tax (Derrama Estadual) of 2.5%. In the calculation of the taxable amount, to which theabovementioned tax rates are applied, the non-acceptable amounts for tax purposes are added and subtracted from the book value results. This difference between the book valueresults and the results for tax purposes may be of a temporary or permanent nature.In accordance with the legislation in force, tax statements are subject to review and correction by the tax authorities for a period of four years (five years for Social Security), exceptwhen tax losses have been reported, or inspections, complaints or impugnations are in progress, in which case, depending on the circumstances, the periods of time are prolonged orsuspended. Hence, the Company's tax statements for the years of 2009 to 2010 may still be subject to review.The tax losses generated in Portugal up to the year ended on 31 December 2009 are reportable during a period of six years after their occurrence and may be deducted from tax profitsgenerated during that period. Tax losses generated as of 1 January 2010 may be reported over a period of four years after their occurrence.The Company records deferred taxes corresponding to the temporary differences between the book value of the assets and liabilities and the corresponding tax base, as laid down inNCRF 25 – Income Tax, whenever it is probable that future tax profits will be generated against which the temporary differences may be used. It should be noted that this assessmentis based on the Company's business plan, which is periodically reviewed and updated.Under the terms of article 88 of the Corporate Income Tax Code, the Company is also subject to autonomous taxation on a number of expenses at rates set forth in the abovementionedarticle.138

Financial Statements 20107.1. Relationship between income tax and book value profit:2010 2009Net Income for the period 1 99,675 788Adjustments to taxable profit:Definitive differences:To be added 2 432 -To be deducted 3 (101,857) (800)Tax loss 4=1+2+3 (1,750) (12)Deferred tax (437) (2)Tax costs (437) (2)7.2. As at 31 December 2010 and 2009, the values of deferred tax assets and liabilities recognised on the balance sheet and their corresponding movements are as follows:Opening balance for the period Statement through profit or loss Closing balance for the period2009Tax losses carried forward - 2 22010Tax losses carried forward 2 437 4398. Financial instruments8.1. As at 31 December 2010 and 2009, the asset heading "State and other public entities" was broken down as follows:2010 2009Value-added tax (VAT) payable 59 -8.2. As at 31 December 2010, the "heading "Suppliers" was broken down as follows:General Related Parties TotalSuppliers current account 19 4 238.3. As at 31 December 2010 the balances of the heading "Financing obtained" were presented as follows:CurrentPledged Account 4,757The values of the financing obtained referred to above results from a current account loan originally granted on 10 December 2008 by Caixa Geral de Depósitos, S.A. (CGD) to thecompanies TD-EC., Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A., EVA - Sociedade Hoteleira, S.A., PTG - Sociedade Gestora de Participações Sociais andEPOS - Empresa Portuguesa de Obras Subterrâneas, S.A..TD,SA adhered to this financing line following the deliberation of the Board of Directors on 4 June 2010, assuming jointly with the abovementioned companies all the statements andguarantees provided to CGD contained in the original loan contract, through the specific addendum it undersigned.139

Financial Statements 20108.4. As at 31 December 2010 and 2009, the other current liabilities were broken down as follows:2010 2009State and other public bodies - Withholdings at Source: 21 -Remunerations payable - Governing Bodies 19 -Participation in profit or loss 1,500 -Accrued costs 31 7Miscellaneous creditors - 61,571 138.5. The interest and similar costs paid, in the periods of 2010 and 2009, were broken down as follows:2010 2009Interest Paid 45 -9. Disclosures required by legal diplomasThe Board of Directors informs that the Company does not have any debts to the State in a situation of late payment, under the terms of Decree-Law 534/80, of 7 November.Pursuant to Decree-Law number 411/91, of 17 October, the Board of Directors informs that the situation of the Company before Social Security is settled, within the legally stipulatedperiods of time.10. Legal reserveThe Portuguese commercial legislation establishes that at least 5% of annual net income should be used to reinforce the legal reserve until it represents at least 20% of the share capital.This reserve is not distributable, except in the case of the Company's liquidation, but may be used to absorb losses, after all the other reserves have been exhausted, and incorporatedin the share capital.11. Application of Net IncomeThrough decision of the General Meeting held on 6 September 2010, the accounts for the year ended on 31 December 2009 were approved and it was decided that the net incomeshould be applied as follows:2009Legal Reserve 500Free Reserves 2,391Dividends 4,0646,95512. External Supplies and ServicesThe external supplies and services for the years ended on 31 December 2010 and 2009 were broken down as follows:2010 2009Specialised work 458 7Fees 17 -Banking services 72 -Other 15 -562 7140

Financial Statements 2010The expenditure on external supplies and services incurred in the year ended on 31 December 2010 were almost entirely the result of the public takeover bid, in the form of a public exchangeoffer on all the remaining share capital of TD-EC, the share capital increase carried out through new entries in kind and through the listing of these shares on the Stock Exchange.13. Contingent Liabilities13.1. It is disclosed that during 2010, the Tax Inspection Authorities (DSIT) carried out external inspections to the company Teixeira Duarte - Gestão de Participações InvestimentosImobiliários, S.A. (hereinafter designated TDGPII, S.A.), which is 100% owned by the subsidiary company TD-EC.As a result of these external inspections, of a general scope, to the accounting documentation of TDGPII, S.A. and relative to 2006, 2007 and 2008, the following corrections were madeto the initially calculated tax losses:Year Calculated Tax Loss DGCI Correction2006 24,950 18,8372007 51,176 29,3312008 64,606 45,327These corrections result entirely from the non-acceptance, as a tax cost, of the financial costs incurred with the investment in subsidiary companies under the form of additional paid-incapital.Since TDGPII S.A. is subject to Corporate Income Tax (IRC) in accordance with the Special Taxation Scheme for Groups of Companies (article 69 and following of the IRC Code), the correctionsto the tax losses of 2006 and 2007 were the object of IRC Settlement Statements issued to the controlling company – TD-EC, which filed a judicial review at the Administrativeand Fiscal Court of Sintra.Therefore, the taking of effect of the IRC Settlement Statement is suspended until the definitive decision is read on the judicial reviews which have been filed, regarding which the Boardof Directors believes that its outcome will be favourable to TDGPII, S.A. and, consequently, to the controlling company.On the date of the closing of the Financial Statements for 2010, the corrections relative to 2008 had not yet been the object of any settlement of IRC.13.2. In the context of the financing line referred to in Note 8.3) and as its term of guarantee, TD,SA subscribed and delivered to Caixa Geral de Depósitos S.A. (CGD) during the yearended on 31 December 2010 a promissory note with a blank amount and due date, duly dated, authorising this same entity to fill in the abovementioned promissory note, when suchshould prove necessary, in accordance with the conditions established in the addendum to the loan contract that it signed.14. Staff CostsStaff costs for the years ended on 31 December 2010 and 2009 are broken down as follows:2010 2009Remunerations 33 -Participation in profit or loss 1,500 -Payroll costs 7 -Insurance 4 -1,544 -15. Share CapitalNominal share capitalAs at 31 December 2010, the Company's share capital, totally underwritten and paid-up, was composed of 420,000,000 shares with the nominal value of EUR 1.00 each.During 2010, the share capital was increased by EUR 287,881 thousand to EUR 420,000 thousand, through new entries in kind, via the issue of 132,119,201 new shares of the nominalvalue of EUR 1.00, at the issue price of EUR 1.00 per share, integrating the public takeover bid launched on the shares of TD-EC. This process was concluded with the acquisition of theentirety of the shares of the abovementioned Company.141

Financial Statements 2010Identification of legal persons owning more than 20% of the share capitalThe following legal persons owned more than 20% of the share capital, underwritten and paid-up, as a 31 December 2010:% Share Capital No. SharesTDG - Sociedade Gestora de Partipações Sociais, S.A. 36.82% 154,640,24016. Approval of the Financial StatementsThe financial statements for the year ended 31 December 2010 were approved by the Board of Directors on 28 April 2011, but they are still subject to approval, under the terms of thecommercial legislation in force in Portugal, by the General Meeting of Shareholders, which is scheduled for 20 May 2011.142

ConsolidatedFinancial Statements 2010

Consolidated Statement of the Financial Position as at 31 December 2010 and 2009(Values expressedin thousand Euros)The notes are an integral part ofthe consolidated statement of thefinancial position as at 31 December2010Notes 2010 2009Non-current assets:Goodwill 18 57,907 58,084Intangible assets 19 9,392 10,183Tangible fixed assets 20 532,900 490,585Investment property 21 509,516 492,066Investments in associates 22 88,113 977,196Financial assets available for sale 24 208,220 284,880Other investments 25 13,244 13,549Deferred tax assets 26 112,050 98,863Customers 27 79,033 61,051Other receivables 27 78 410Other non-financial assets 30 13,475 10,967Total non-current assets 1,623,928 2,497,834Current assets:Stocks 9 and 10 298,543 391,778Customers 27 437,608 331,737Other receivables 27 56,583 43,821Cash and cash equivalents 29 137,837 132,051Other investments 25 7,053 -Other current assets 30 158,710 115,2501,096,334 1,014,637Non-current assets held for sale 990 -Total current assets 1,097,324 1,014,637TOTAL ASSETS 7 2,721,252 3,512,471Equity:Share Capital 32 420,000 287,881Adjustments - investments in associates 2,830 -Currency conversion adjustments 40,893 -Reserves and retained earnings 33 (36,593) -Consolidated net income 46,392 (11)Equity attributable to shareholders 473,522 287,870Non-controlling interests 34 88,484 226,767TOTAL EQUITY 562,006 514,637Non-current liabilities:Loans 35 697,661 1,492,360Provisions 36 33,357 15,083Financial leases 38 228,731 233,752Deferred tax liabilities 26 68,551 66,831Other creditors 37 26,150 25,423Other non-current liabilities 39 45,267 24,963Total non-current liabilities 1,099,717 1,858,412Current liabilities:Loans 35 506,965 632,432Provisions 36 8,455 5,292Suppliers 37 227,674 234,512Financial leases 38 23,873 18,920Other creditors 37 44,480 44,574Other current liabilities 39 248,082 203,692Total current liabilities 1,059,529 1,139,422TOTAL LIABILITIES 7 2,159,246 2,997,834TOTAL LIABILITIES AND EQUITY 2,721,252 3,512,471144

Consolidated Income Statements for the Year Ended on 31 December 2010 and for the Period from 30 November2009 (Date of Constitution) to 31 December 2009Notes 2010 2009Operating income:Sales and services rendered 7 and 8 1,379,628 -Other net operating income 8 65,790 -Total operating income 8 1,445,418 -Operating costs:Cost of sales 9 (464,271) -Variation in production 10 (1,246) -External supplies and services (495,672) (7)Staff costs 11 (253,299) -Amortisation and depreciation 7, 19 and 20 (59,025) -Provisions and impairment losses in assets subject to depreciation and amortisation and Goodwill 7 and 36 (7,346) -Other operating costs 13 (80,681) (5)Total operating costs (1,361,540) (12)(Values expressedin thousand Euros)The notes are an integral part of theconsolidated income statement forthe year ended on 31 December 2010Operating profits 7 83,878 (12)Financial costs and losses 7 and 14 (156,704) -Financial income and gains 7 and 14 118,892 -Earnings from investment activities:Earnings from associates 7 and 14 88,198 -Other 7 and 14 (68,066) -Financial results (17,680) -Pre-tax profit 7 66,198 (12)Income tax 15 (26,820) 1Consolidated net income for the period 39,378 (11)Net income attributable to:Shareholders 16 46,392 (11)Non-controlling interests 34 (7,014) -Earnings per share:Basic 16 0.13 (0.00)Diluted 16 0.13 (0.00)145

Consolidated Full Income Statement for the Year ended on 31 December 2010and for the Period from 30 November 2009 (Date of Constitution) to 31 December 2009.(Values expressedin thousand Euros)The notes are an integral part of theconsolidated full income statementfor the year ended on 31 December2010.2010 2009Consolidated net income for the period 39,378 (11)Variation in currency conversion adjustments 44,331 -Variation in fair value and disposal of financial assets available for sale (13,980) -Effect of hedging operations (1,868)Effect of the application of the equity method 2,830 -Other (19,258) -12,055 -Full income for the period 51,433 (11)Full income attributable to:Shareholders 57,597 (11)Non-controlling interests (6,164) -146

Consolidated Statement of Changes in Equity for the Year ended on 31 December 2010 and 2009Reserves and Retained EarningsNotesShareCapitalAdjustments ofshareholdingsin associatesCurrencyconversionadjustmentsLegalReserveFree Fair ValueReserves ReservesOperationsof hedging Net Income ConsolidatedReserves Retained net IncomeTotal of the Equityattributable toShareholdersNon-controllingInterestsTotalBalance as at 1 de January de 2010 1 and 32 287,881 - - - - - - - (11) 287,870 226,767 514,637Full income for the period:Consolidated net income for the year - - - - - - - - 46,392 46,392 (7,014) 39,378Variation in currency conversion adjustments - - 40,893 - - - - - - 40,893 3,438 44,331Variation in fair value and disposal of financial assetsavailable for sale 24 - - - - - (13,980) - - - (13,980) - (13,980)Effect of hedging operations 40 - - - - - - (1,868) - - (1,868) - (1,868)Effect of the application of the equity method 22 - 2,830 - - - - - - - 2,830 - 2,830Other - - - - - - - (16,670) - (16,670) (2,588) (19,258)Operations with shareholders in the period:Application of the consolidated net income of 2009:Transfer to the legal and free reserve - - - 500 2,391 - - (2,891) - - - -Dividends distributed 17 - - - - - - - (4,064) - (4,064) - (4,064)Transfer to retained earnings - - - - - - - (11) 11 - - -Share capital increase 1 and 32 132,119 - - - - - - - - 132,119 (132,119) -Balance as at 31 December 2010 420,000 2,830 40,893 500 2,391 (13,980) (1,868) (23,636) 46,392 473,522 88,484 562,006The notes are an integral part of the consolidated statement of changes in equity for the year ended on 31 December 2010.Reserves and Retained EarningsNotesShareCapitalAdjustments ofshareholdingsin associatesCurrencyconversionadjustmentsLegalReserveFree Fair ValueReserves ReservesOperationsof hedging Net Income ConsolidatedReserves Retained net IncomeTotal of the Equityattributable toShareholdersNon-controllingInterestsTotalBalance as at 1 de January de 2009 1 and 32 - - - - - - - - - - - -Full income for the period:Consolidated net income for the year - - - - - - - - - - - -Variation in currency conversion adjustments - - - - - - - - - - - -Variation in fair value and disposal of financial assetsavailable for sale - - - - - - - - - - - -Effect of hedging operations - - - - - - - - - - - -Effect of the application of the equity method - - - - - - - - - - - -Other - - - - - - - - - - 94,648 94,648Operations with shareholders in the period:Application of the consolidated net income of 2009:Transfer to the legal and free reserve - - - - - - - - - - - -Dividends distributed - - - - - - - - - - - -Transfer to retained earnings - - - - - - - - (11) (11) - (11)Share capital increase 1 and 32 287,881 - - - - - - - - 287,881 132,119 420,000Balance as at 31 December 2009 287,881 - - - - - - - (11) 287,870 226,767 514,637147

Consolidated Cash Flow Statement for the Year ended on 31 December 2010(Values expressedin thousand Euros)The notes are an integral part of thecash flow statement for the yearended on 31 December 2010Notes 2010OPERATING ACTIVITIES: 39,378Receipts from customers 1,330,658Payments to suppliers (909,523)Staff payments (255,594)Cash flow generated by operations 165,541Payment/receipt of income tax (23,830)Other receipts/payments relative to operating activity (39,283)Cash flow from operating activities (1) 102,428INVESTMENT ACTIVITIES:Receipts derived from:Financial investments 29 1,015,703Tangible fixed assets and Investment property 5,801Interest and similar income 6,641Dividends 29 10,3721,038,517Payments relative to:Financial investments 29 (59,294)Tangible fixed assets and Investment property (99,790)Intangible assets (1,329)(160,413)Cash flow from investment activities (2) 878,104FINANCING ACTIVITIES:Receipts derived from:Loans raised 4,830,785Payments relative to:Loans raised (5,750,951)Interest and similar costs (55,727)Dividends (4,064)(5,810,742)Cash flow from financing activities (3) (979,957)Variation in cash and cash equivalents (4)=(1)+(2)+(3) 575Effect of exchange rate differences 5,211Cash and cash equivalents at the beginning of the period 29 132,051Cash and cash equivalents at the end of the period 29 137,837148

Notes to the Consolidated Financial Statements as at 31 December 20101 - INTRODUCTORY NOTETEIXEIRA DUARTE, S.A. (TD,SA) with its headquarters in Porto Salvo, was constituted on 30 November 2009, with share capital of 1,000,000 shares at 1 Euro each, and itscore business is the implementation and management of investments, the coordination and supervision of other companies integrated in or related to its corporate Group.On 14 December 2009, the share capital of TD,SA was increased through entries in kind of 286,880,799 shares of Teixeira Duarte - Engenharia e Construções, S.A. ("TD-EC"),representing 68.54% of the share capital in that company.TD-EC was a public company, with head office in Lagoas Park, Edifício 2, Porto Salvo, Oeiras, with share capital of EUR 210,000,000, registered at Cascais Commercial Registryunder taxpayer number 500.097.488.In the context of the restructuring process presented opportunely, on 16 July 2010 TD,SA launched a general and voluntary public offer of the acquisition of the remainingshares of TD,EC through a Public Offer of Exchange of TD,SA shares. This offer was carried out in the proportion of one TD,SA share, at the nominal value of 1 Euro each foreach TD-EC share.Following this offer, a third share capital increase was carried out through the incorporation of 118,479,400 TD-EC shares, with TD,SA thus becoming the owner of 406,360,199shares of that subsidiary, representing approximately 96.75% of the share capital of TD-EC.On 15 November 2010, TD,SA made the shareholders of TD-EC an offer of the acquisition of the shares representing the share capital of TD-EC which did not yet belong toTD,SA, involving a total of 13,639,801 shares, under the terms of article 490 of the Portuguese Commercial Companies Code, compensated by 13,639,801 TD,SA shares, thusmaking the unit value of one TD,SA share for every TD-EC share presented and delivered. Once the period of time of the abovementioned offer had ended, TD,SA promotedthe registration of the acquisition of its total control on 26 November 2010, in conformity with number 3 of article 490 of the Portuguese Commercial Companies Code, thusgaining the ownership of 100% of the shares representing the share capital of TD-EC, through the compensation of one TD,SA share for every TD-EC share acquired.Therefore, the financial statements of TD,SA as at 31 December 2009 include the consolidation through the full method of the assets and liabilities of the Group up to thenled by TD-EC, which became consolidated by TD,SA as of that date. The consolidated statements of income, full income, changes in equity and cash flows are, therefore, notcomparable as a consequence of the process of takeover of control described above. Nevertheless, the consolidated financial statements of the Group led by TD-EC for the yearended on 31 December 2009 are available on the Company's website.The corporate universe of Teixeira Duarte ("Group") is composed of the subsidiaries indicated in Notes 4, 22 and 23. The Group’s core activities are: Construction; Cement,Concrete and Aggregates; Concessions and Services; Real Estate; Hotel Services; Distribution; Energy and Automobile (Note 7).The values indicated are expressed in thousand Euros.2 - MAIN ACCOUNTING PRINCIPLES2.1 - Basis of presentationThe consolidated financial statements have been prepared under the assumption of the continuity of operations, based on the accounting books and records of the companiesincluded in the consolidations, adjusted in accordance with the consolidation process, in order to conform with the provisions of the International Financial Reporting Standardsadopted by the European Union, effective for financial years beginning on 1 January 2010.The International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board ("IASB"), the International Accounting Standards ("IAS")issued by the International Accounting Standards Committee ("IASC") and respective interpretations, issued by the IFRS Interpretation Committee ("IFRIC") and StandingInterpretation Committee ("SIC"), respectively, whose adoption was approved by the European Union, shall be construed as part of these standards. hereinafter, all thesestandards and interpretations will be referred to generically as "IAS / IFRS".The financial statements were prepared under the historical cost convention, except with respect to investment properties, financial assets available for sale and derivativefinancial instruments.New standards and interpretations, reviews and amendments adopted by the European Union149

Notes to the Consolidated Financial Statements as at 31 December 2010The following standards, interpretations, amendments and reviews approved by the European Union and of mandatory application in financial years beginning on or after1 January 2010, which are applicable to the financial statements, and were adopted or applied by the Group for the first time for the year ended on 31 December 2010:Standard / interpretationNew standards and interpretations:IFRIC 12 – Service concession arrangementsDate of entry into force(financial years beginning onor after)01-Jan-10Brief descriptionThis interpretation introduces recognition and measurement rules for privatesector operators involved in the provision of infrastructure construction andoperation services in the context of public-to-private type concessions.IFRIC 15 – Agreements for the construction of realestate01-Jan-10This interpretation addresses the manner to assess whether a real estate constructionagreement is under IAS 11 - Construction contracts or IAS 18 - Revenue,and how the corresponding revenue should be recognised.IFRIC 16 – Hedges of a net investment in a foreignoperation01-Jul-09This interpretation provides guidance on the accounting of hedges of net investmentsin a foreign operations.IFRIC 17 – Distributions of non-cash assets to owners01-Jul-09This interpretation provides guidance on the correct recording of non-cash assetsdistributed to shareholders as dividends.IFRIC 18 – Transfers of assets from customersReviews and alterations:IFRS 3 – Business combinations and IAS 27 -Consolidated and separate financial statements(Revised 2008)01-Jul-0901-Jul-09This interpretation provides guidance on the accounting by operators of tangiblefixed assets "from customers".This review introduced some alterations in terms of the registration of businesscombinations, namely with respect to: (a) the measurement of non-controllinginterests (formerly called minority interests); (b) the recognition and subsequentmeasurement of contingent payments; (c) the treatment of direct costsrelated to the combination; and (d) the registration of transactions for the acquisitionof interests in entities which are already controlled and transactionsof sale of interests where this does not result in the loss of control; and e) thecalculation of the result on the sale of a holding with loss of control and theneed to remeasure the interests retained in the sold holding.IAS 28 - Investments in associates (Revised 2008)01-Jul-09The principles described above and adopted for IAS 27 (2008) relative to thecalculation of the result of the sale is applicable also to IAS 28.Reviews of IFRS 1 – First-time adoption of theinternational financial reporting standards01-Jul-09This standard was reviewed so as to group the different amendments whichhave occurred since its first version.Improvements to the international financial reportingstandards - 2009Various (usually 1-Jan-10)This process involved the review of 12 accounting standards.Alterations to IAS 39 - Financial instruments:Recognition and Measurement - Instruments: eligiblehedged items01-Jul-09Clarifies the application of the accounting of hedging to the inflation componentof the financial instruments and to options contracts, when used as hedginginstruments.150

Notes to the Consolidated Financial Statements as at 31 December 2010Standard / interpretationAmendments:IFRS 1 – Amendments (Additional exemptions)Date of entry into force(financial years beginning onor after)01-Jan-10Brief descriptionThis amendment covers an additional group of exemptions in the retrospectiveapplication, namely in terms of assets resulting from the exploitation ofmineral resources, of decommissioning liabilities and the application of therequirements of IFRIC 4.IFRS 2 – Amendment (Transactions of share-basedpayments amongst entities of the same group)01-Jan-10This amendment clarifies some aspects related to payments based on sharessettled financially within corporate groups.Some of the standards indicated above were not applicable to the present financial statements and the effect on the Group’s financial statements for the year ended on 31December 2010, due to the adoption and application of the abovementioned standards and interpretations, reviews and amendments, was not significant, with impactshaving been observed only in terms of the presentation and disclosure of financial information.Furthermore, on the date of approval of these financial statements, the European Union had approved the following standards, interpretations, amendments and reviews,which are of mandatory application in future financial years:Standard / interpretationNew standards and interpretations:IFRIC 19 - Extinction of financial liabilities throughequity instrumentsReviews and alterations:IAS 24 - Disclosures of related parties (review)Amendments:IFRS 1 – Amendment (limited exemption from theobligation to present comparative disclosures inaccordance with IFRS 7 for first-time adopters)Date of entry into force(financial years beginning onor after)01-Jul-1001-Jan-1101-Jul-10Brief descriptionThis interpretation provides guidelines on the accounting of transactions whenthe terms of a financial liability are renegotiated and result in an issue by theequity instrument entity in favour of one of its creditors with the resulting extinctionof the entirety or part of that financial liability.This review incorporates some clarifications related to the disclosures to bemade on related parties, in particular concerning entities linked to publicadministration.This amendment simplifies the obligations of comparative disclosures in relationto financial instruments in the first-time adoption of the IFRS.IAS 32 – Amendment (Classification of issues ofrights)01-Feb-10This amendment clarifies the conditions under which the issued rights may beclassified as equity instruments.IFRIC 14 – Amendment (Pre-payment of a minimumfunding requirement)01-Jan-11This amendment suppresses a unintentional consequence arising from thetreatment of pre-payments of future contributions in circumstances when aminimum funding requirement is applicable.Although these standards were approved by the European Union, they were not adopted by the Group for the year ended on 31 December 2010 because their application is not yetbinding. No significant retrospective impacts are expected on the consolidated financial statements resulting from the adoption of said standards.151

Notes to the Consolidated Financial Statements as at 31 December 20102.2 - Judgments and estimatesThe preparation of the financial statements in conformity with the recognition and measurement principles of the IFRS requires the Board of Directors of the Company to makejudgements, estimates and assumptions that can affect the reported amounts of assets and liabilities, in particular depreciation and provisions, disclosures of contingentassets and liabilities at the date of the financial statements, as well as income and costs.Those estimates are based on the best knowledge existing at all times and in planned actions, being periodically reviewed based on the available information. Changes infacts and circumstances may lead to the need to review the estimates, so the actual future results may differ from those estimates.The significant estimates and assumptions made by the Board of Directors in preparing these financial statements include, namely, the assumptions used to estimate thefollowing aspects:Impairment of non-current assets (except Goodwill)The determination of a possible impairment loss can be triggered by the occurrence of different events, many of which are outside the sphere of influence of the Group, suchas the availability of future financing, the cost of capital or any other changes, both inside and outside the Group.The identification of impairment indicators, the estimate of future cash flows and the determination of the recoverable amount of assets imply a high degree of judgementby the Board of Directors regarding the identification and evaluation of various impairment indicators, expected cash flows, applicable discount rates, useful lives and residualvalues.Goodwill impairmentGoodwill is subject to annual impairment tests or whenever there are indications of a possible loss in value. The recoverable values of the cash flow generating units towhich goodwill has been allocated, are determined based on expected cash flows. These calculations require the use of estimates by the management regarding the futureperformance of the business and discount rates considered.Useful lives of tangible and intangible assetsThe useful life of an asset is the year during which an entity expects an asset to be available for use and it must be reviewed at least at the end of each financial year.The determination of the useful lives of assets, the amortisation / depreciation method to be applied and estimated losses resulting from the replacement of equipment beforethe end of its useful life, for reasons of technological obsolescence, is essential to determine the amount of amortisation / depreciation to be recognised in the consolidatedincome statement for each financial year.These three parameters are defined according to the management’s best estimate for the assets and business in question, also considering the practices adopted by companiesin the business segments in which the Group operates.ProvisionsThe Group periodically reviews any obligations arising from past events and which are subject to recognition or disclosure. The subjectivity inherent in determining thelikelihood of the existence of a present liability and amount of internal resources necessary for the payment of the obligations could lead to significant adjustments, either bychanging the assumptions made, or by the future recognition of provisions previously disclosed as contingent liabilities.Recognition of deferred tax assetsDeferred tax assets are only recognised when there is a reasonable expectation that there will be sufficient future taxable profits to use them or when there are deferredtax liabilities whose reversal is expected to occur in the same period of the reversal of the deferred tax assets. The carrying amount of deferred tax assets is reviewed by themanagement at the end of each year and takes into consideration the expectation of future tax performance.Impairment losses of accounts receivableThe credit risk associated to accounts receivable is evaluated at the end of each reporting date, taking into account the debtor's historical information and risk profile. Theaccounts receivable are adjusted by the management’s assessment of the estimated risks of recovery existing on the balance sheet date, which may differ from the real riskto be incurred.Recognition of revenue from building contractsThe Group recognises the results of construction contracts in accordance with the method of percentage completion, which is defined as the relationship between the incurredcosts in each contract until the balance sheet date and the sum of these costs with the estimated costs to complete the contract. The assessment of the degree of completionof each contract is periodically reviewed, taking into account the latest production indicators.152

Notes to the Consolidated Financial Statements as at 31 December 20102.3 - Principles of consolidationa) SubsidiariesThe subsidiaries have been consolidated in each financial year through the full consolidation method. Control exists when the Group directly or indirectly holds a majority ofthe voting rights in the General Meeting, or has the power to determine the financial and operating policies.Third party participation in the equity and net profit of these companies is presented separately in the consolidated statement of the financial position and consolidatedincome statement, under the respective headings of "Non-controlling interests"When the losses attributable to the non-controlling interests exceed the non-controlling interest in the equity of the subsidiary, the Group will absorb this excess and anyadditional losses, except when the non-controlling interests are obliged and able to cover these losses. If the subsidiary subsequently reports a profit, the Group appropriatesthe profit up to the amount of the losses which have been absorbed by the Group.The subsidiaries at 31 December 2010 are presented in Note 4. The significant transactions and balances between these companies were eliminated during the consolidationprocess. Capital gains arising from the sale of subsidiaries, within the Group, were also eliminated.Whenever necessary, adjustments are made to the financial statements of the subsidiaries with a view to achieving the uniformity of their accounting policies with thoseapplied by the Group.b) Jointly controlled companiesInvestments in jointly controlled companies (Note 23) were consolidated through the proportional consolidation method, from the date on which joint control is acquired.According to this method, the assets, liabilities, income and expenditure of these companies were integrated into the consolidated financial statements on a line-by-linebasis, in proportion to the Group’s control over them.Transactions, balances and dividends distributed between companies are eliminated in the proportion of the Group's control over them.The classification of financial investments in jointly controlled companies is determined based on agreements that regulate the joint control.c) Business combinationsBusiness combinations, namely the the acquisition of subsidiaries, are recorded through the acquisition method.The acquisition cost corresponds to the sum of the fair values of the assets acquired, liabilities incurred or assumed and the equity instruments issued by the Group in exchangefor the control acquired. Costs related to the acquisition are recognised as a cost when incurred. When applicable, the acquisition cost also includes the fair value of contingentpayments measured on the acquisition date. Subsequent alterations in the value of contingent payments are recorded in accordance with the accounting rules which regulatethe recording of the assets or liabilities in question, unless they qualify as an adjustment in the provisional measurement period (with a maximum of 12 months).The identifiable assets, liabilities and contingent liabilities of a subsidiary that meet the criteria to be recognised in accordance with IFRS 3 - Business Combinations (‘‘IFRS3’’), are measured by their fair value on the acquisition date, except for non-current assets (or groups of assets) which are classified as held for sale, in accordance with IFRS5 - Non-current assets held for sale and discontinued operations (“IFRS 5”), which are recognised and measured at the respective fair value minus the costs to be incurredin the future sale.Any excess of the acquisition cost increased by the value of the non-controlled interests relative to the fair value of the acquired assets and liabilities is recognised as Goodwill.If the cost of acquisition is less than the fair value of the identified net assets, the difference is recorded as net income gain for the period when the acquisition occurs, afterre-confirmation of the attributed fair value.If the process of recording of the business combinations is incomplete by the end of the year when the combination occurs, the Group discloses this same situation, and theprovisioned values may be adjusted during the measurement period (the period between the acquisition date and the date when the Group obtains the complete informationon the facts and circumstances that existed on the acquisition date and within the maximum of 12 months), or new assets and liabilities may be recognised so as to reflectfacts and circumstances that existed on the balance sheet date and which, in known cases, would have affected the amounts recognised on the acquisition date.Non-controlling interests are identified separately in equity by the equity attributable to the shareholders of the parent Company. Non-controlling interests may be measuredinitially either at their fair value or by the proportion of the fair value of the assets and liabilities of the acquired subsidiary. This option is made separately for each transaction.153

Notes to the Consolidated Financial Statements as at 31 December 2010After the initial recognition the book value of the minority interests is determined as the value recognised initially plus the proportion of alterations of equity of the subsidiary.The full income of a subsidiary is attributed to the non-controlling interests even if they are negative.Percentage changes of control of subsidiaries that do not result in a loss in control are recorded as equity transactions. The value of the Group's interests and the non-controlledinterests is adjusted to reflect the percentage changes. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of thetransaction price is recognised directly under equity and attributed to the shareholders of the parent Company.When the Group loses control over a subsidiary, the gain or loss in the sale is calculated as the difference between (i) the aggregate amount of the fair value of the priceand the fair value of the retained interests and (ii) the book value of the assets (including goodwill) and the liabilities of the subsidiary and of the non-controlling interests.Amounts recognised previously as other full income are transferred to the profit or loss for the year or transferred to retained earnings in the same way as would be the caseif the related assets or liabilities were sold. The fair value of the retained interests corresponds to the fair value in the initial recognition for the effect of subsequent recordingunder IAS 39 – Financial instruments or, as and when applicable, the cost for the effect of the initial recognition of an investment in an associate or joint venture.d) Investments in associated companiesAn associate is a company in which the Group exercises significant influence, but not control or joint control, through participation in decisions relative to its financial andoperating policies.Financial investments in most of the associated companies (Note 22) are recorded through the equity method, except when they are classified as held for sale, with the sharesinitially stated at acquisition cost, which is increased or decreased according to the difference between this cost and the proportional value of the holding in the equity of thesecompanies reported on the date of acquisition or first application of the said method.In accordance with the equity method, financial holdings are adjusted periodically by the amount corresponding to the participation in the net income of the associatedcompanies against ‘‘Earnings from associate companies’’, and by other changes in their equity against ‘‘Adjustments of holdings in associated companies’’, as well as by therecognition of impairment losses. Furthermore, the dividends received from these companies are recorded as a reduction in the value of the financial investments.Losses in associates which exceed the investment made in these entities are not recognised unless the Group has undertaken commitments in relation to them.Any excess of the acquisition cost over the fair value of the identifiable net assets is recorded as ‘‘Investments in associate companies - goodwill”. In cases where the acquisitioncost is lower than the fair value of the identified net assets, the difference is recorded as a gain in the profit or loss for the period in which the acquisition occurs.Unrealised gains on transactions with associates are eliminated in proportion to the Group's interest in the associate, against the investment made in that associate. Unrealisedlosses are eliminated in a similar manner, but only to the extent that the loss does not show that the transferred asset is impaired.e) GoodwillThe differences between the acquisition cost of the investments in subsidiaries, jointly controlled and associated companies, plus, in the case of the subsidiaries, the valueof the non-controlled interests and fair value of the identifiable assets and liabilities of these companies on their acquisition date, if positive, are recorded as goodwill (in thecase of subsidiaries and jointly controlled companies) or maintained under the heading of investments in associated companies.Goodwill is recognised as an asset and is not subject to depreciation, being presented separately in the consolidation of the financial position or under the heading "Investmentsin associates" (Notes 18 and 22). Regarding the goodwil of subsidiaries and jointly controlled companies, annually, or whenever there are indications of a possible lossin value, the goodwill values are subject to impairment tests. Any impairment loss is immediately recorded as a cost in the consolidated full income statement for the periodand is cannot be subject to subsequent reversal.On the disposal of a subsidiary, associate or jointly controlled company, the corresponding goodwill is included in the determination of the capital gain or loss.Where the acquisition cost is less than the fair value of the identified net assets, the difference is recognised as a gain for the period in which the acquisition occurs.154

Notes to the Consolidated Financial Statements as at 31 December 20102.4 – Intangible assetsIntangible assets essentially comprise contractual rights and costs incurred in specific projects with future economic value, and are stated at cost, minus accumulated depreciationand impairment losses. Intangible assets are recognised only if it is probable that they will produce future economic benefits for the Group, are controllable by theGroup and their value can be measured reliably.Internally generated intangible assets, including expenditure on current research and development, are recognised as a cost for the period when they are incurred.Internal costs associated to software maintenance and development are recorded as costs in the income statement when incurred, except in cases where these costs aredirectly related to projects which are likely to generate future economic benefits for the Group. In such cases, these costs are capitalised as intangible assets.Depreciation is calculated, after the beginning of use of the assets, through the straight-line method, in accordance with the year of utility that the Group expects of theassets concerned.2.5 – Tangible fixed assetsTangible assets used in production, services rendered or for administrative use are recorded at acquisition or construction cost, including the expenses incurred with theiracquisition, minus accumulated depreciation and impairment losses, when applicable.Tangible assets are depreciated through the straight-line method, according to their estimated useful life, from the date on which they are available to be used for the intendedpurpose and cease when the assets become classified as non-current assets held for sale. Depreciation is calculated in accordance with the following estimated useful lives:Years ofuseful lifeBuildings 5 - 20Basic equipment 4 - 8Transport equipment 3 - 7Tools and utensils 3 - 7Administrative equipment 2 - 10Other tangible fixed assets 1 - 4Improvements and ameliorations are only recognised as assets when they correspond to the replacement of goods, which are written-off, or lead to an increase in futureeconomic benefits.Tangible fixed assets in progress correspond to tangible assets under construction and are recorded at acquisition cost minus any impairment losses. These tangible fixedassets are depreciated as from the time when the underlying assets are able to be used for the intended purposes.Capital gains or losses arising from the sale or write-off of tangible fixed assets are determined by the difference between the sales price and the net book value on the dateof sale/write-off and stated at their net worth in the income statement under "Other operating income” or "Other operating costs", as applicable.2.6 - LeasesLease contracts are classified as: (i) finance leases, if all the risks and benefits of their ownership are transferred substantially; or (ii) operating leases, if all the risks and benefitsof ownership are not transferred substantially.Leases are classified as finance or operating leases according to the nature of the contract and not its form.Assets acquired under finance lease contracts, as well as the corresponding liabilities, are recorded through the financial method, recognising the asset, the corresponding accumulateddepreciation and the outstanding debts payable pursuant to the contractual financial plan. Furthermore, the interest included in the lease instalments and depreciation /amortisation of the assets are recognised as costs in the income statement of the period to which they refer.155

Notes to the Consolidated Financial Statements as at 31 December 2010For operating leases, the instalments payable are recognised as a cost in the income statement on a straight line basis during the year of the lease contract.2.7 - Impairment of non-current assets, excluding goodwillAn impairment assessment is performed whenever events or changes in circumstances indicate that the amount at which an asset is recognised might not be recovered. Inthe presence of such indications, the Group determines the recoverable amount of the asset in order to ascertain the extent of the possible impairment loss.In situations where an individual asset does not generate cash flows independently of other assets, the recoverable amount is estimated for the cash-generating unit to whichthe asset belongs.Whenever the amount for which the asset is recorded is greater than its recoverable value, an impairment loss of the difference is recognised, which is recorded in the incomestatement under the heading "Provisions and impairment losses".The recoverable amount is the highest value between an asset’s net sales price (sales price minus the costs of its sale) and its value in use. The net sales price is the amountthat would be obtained from the sale of the asset in a transaction between independent knowledgeable parties, less the costs directly attributable to the sale. The use valueis the present value of estimated future cash flows that are expected from continued use of the asset and from its disposal at the end of its useful life. The recoverable amountis estimated for each individual asset or, when this is not possible, for the cash-generating unit to which the asset belongs.The reversal of impairment losses recognised in prior years is recorded when there are indications that the recognised impairment losses no longer exist or have decreased. Thereversal of impairment losses is recognised in the income statement under "Impairment losses and provisions" for the year when the reversal occurs. However, the reversalof the impairment loss is made up to the amount that would have been recognised (net of amortisation or depreciation) if the impairment loss had not been recorded inprior years.2.8 - Investment propertiesInvestment properties, which include land and buildings held for leasing, capital appreciation, or both, are recorded initially at their acquisition price or at construction cost(in the case of own construction investment), including any directly attributable expenditure.After their initial recognition, all the investment properties, including those that are under construction, are measured at their fair value reflecting market conditions on thebalance sheet date. All gains or losses arising from changes in the fair value of investment properties are recognised through profit or loss for the year when they occur andrecorded under the heading "Variation in the fair value of investment properties", included in "Other operating income" or "Other operating costs", depending on whetherthey refer to gains or losses.The fair value of each investment property is determined through valuations, in some cases made by an independent specialised entities and in accordance with generallyaccepted valuation criteria for the real estate market. In all other cases, the market value is determined internally, based on criteria similar to those considered by externalevaluators.The costs incurred for investment properties in use, namely maintenance, repairs, insurance and taxes, are recognised in the income statement for the year to which theyrefer. Improvements or ameliorations are only recorded as assets when they correspond to the replacement of goods, which are written-off, or lead to an increase in futureeconomic benefits.2.9 - Foreign currency assets, liabilities and transactionsThe financial statements are presented in Euros, since this is the preferably used currency in the economic environment in which the Group operates.Transactions carried out in currencies other than the Euro are recorded at the rates prevailing on the transaction date. On each balance sheet date, the monetary assets andliabilities expressed in foreign currencies are converted into Euros using the exchange rates in force on that date. Non-monetary assets and liabilities recorded at fair valuedenominated in foreign currencies are converted into Euros using the exchange rate in force on the date when the fair value was determined.Favourable and unfavourable exchange rate differences arising from differences between the exchange rates on the date of the transactions and those in force on the dateof the collection, payment, or the balance sheet date of such transactions are recorded as gains and costs in the income statement for the year, except those related to nonmonetaryitems whose change in fair value is directly recorded in equity under the heading "Currency conversion adjustments."The financial statements of subsidiaries and associated companies expressed in foreign currencies are converted considering the exchange rate in force on the balance sheet156

Notes to the Consolidated Financial Statements as at 31 December 2010date for the conversion of assets and liabilities, the historical exchange rate for the conversion of the balances of the equity headings and the average exchange rate for theyear for the conversion of the headings in the income and cash flow statements.In accordance with IAS 21 - Effects of changes in foreign exchange rates ("IAS 21"), the goodwill and fair value corrections determined on the acquisition of foreign entitiesare considered in the reporting currency of these entities, and are converted into Euros at the exchange rate in force on the balance sheet date. Exchange rate differencesgenerated in this way are recorded under the heading "Currency conversion adjustments."2.10 - Financing costsLoan costs are recognised in the income statement for the year to which they refer, except to the extent that the financial costs of the loans obtained directly related to theacquisition, construction and production of assets that take a substantial period of time to become ready for their intended use are capitalised as part of the costs of the assets.The capitalisation of these costs begins after the commencement of the preparation for the construction or development of the asset and is interrupted after the commencementof use or end of production or construction of the asset or when the project concerned is suspended. Any financial gain arising from loans obtained in advance andallocable to a specific investment is deducted from finance costs eligible for capitalisation.2.11 - GrantsGovernment grants are recognised at their fair value when there is reasonable assurance that they will be received and that the Group will comply with the grant conditions.Operating grants, particularly for employee training, are recognised in the income statement in accordance with costs incurred.Investment grants relating to the acquisition of tangible fixed assets are included under "Other current liabilities" and "Other non-current liabilities" (as applicable) and arecredited to the income statement according to the straight-line depreciation of the assets financed with the grants.2.12 - InventoriesGoods and raw materials are stated at acquisition cost, using the average cost as the costing method.Intermediate and finished products and work in progress are stated at the weighted average cost of production, which includes the cost of the incorporated raw materials,labour and manufacturing overheads (considering the depreciation of production equipment calculated on the basis of normal usage levels), which is below the net realisablevalue. Net realisable value corresponds to the normal sales price minus the production completion costs and marketing costs.The difference between the cost value and the respective realisation value of the inventories, when the latter is lower than the book value, is recorded as impairment lossesin inventories.2.13 - ProvisionsProvisions are recognised only when: i) the Group has a present obligation (legal or constructive) as a result of a past event, ii) it is probable that a transfer of economic benefitswill be required to settle the obligation, and iii) a reliable estimate can be made of the amount of the obligation. Provisions are reviewed on each balance sheet date andadjusted to reflect the best estimate on that reporting date.Provisions for restructuring costs are recorded by the Group when there is a formal and detailed restructuring plan that has been communicated to all parties concerned.2.14 - Segment reportingA business segment is a group of assets and operations engaged in providing products or services subject to risks and returns that are different from those of other businesssegments. A geographic segment is a group of assets and operations involved in the provision of products and services in a specific economic environment, which is subjectto risks and benefits different from those that affect segments that operate in other economic environments.The Group presents business segments as operating segments, in a manner consistent with the way management conducts business.157

Notes to the Consolidated Financial Statements as at 31 December 20102.15 - Operating profit or lossOperating profit or loss includes all the costs and revenues of operating activities, both recurring and non-recurring, including restructuring costs and the costs and revenuesassociated with operating assets (tangible fixed assets and other intangible assets). It also includes the capital gains or losses calculated on the sale of companies included inthe consolidation using the full or proportional consolidation method. In this way, net financing costs, the net income of associates, other financial investments and incometax are excluded from net operating income.2.16 - Financial instrumentsFinancial assets and financial liabilities are recognised when the Group becomes a party in the respective contractual relationship.a) Cash and cash equivalentsThe amounts included in Cash and cash equivalents heading correspond to cash, bank deposits, term deposits and other cash investments with a maturity of less than threemonths and which are immediately repayable on demand with no significant risk of change in value.b) Accounts receivableAccounts receivable are measured, when recognised initially, at fair value and subsequently at amortised cost in accordance with the effective interest rate method. Whenthere is evidence that they are impaired, the corresponding adjustment is recorded through profit or loss under the heading "Other Operating Costs". The recognised adjustmentis measured by the difference between the value at which the receivables are recognised and the present value of the cash flows discounted at the effective interest ratedetermined at the initial recognition.c) InvestmentsInvestments are recognised on the date when the inherent risks and rewards are transferred substantially. They are initially recorded at their acquisition value, which is thefair value of the price paid, including transaction costs.Investments are classified as follows:Financial assets available for saleFinancial assets available for sale are financial investments which are available for sale and are classified as non-current assets.After their initial recognition, the financial assets available for sale are measured through reference to their market value on the balance sheet date, without any deductionfor transaction costs that may be incurred until their sale. Gains or losses due to changes in the fair value are recorded in equity, under the heading ‘‘Fair value reserve’’ untilthe investment is sold, received or disposed in any other way, or when impairment losses are believed to exist, in which case the accumulated gain or loss is recorded in theincome statement.Other investmentsFinancial assets available for sale in equity instruments that do not have a market price listed in an active market and whose fair value cannot be measured reliably aremeasured at their acquisition cost minus any accumulated impairment losses and are recorded under the heading "Other investments".Furthermore, assets measured at fair value through profit or loss are revalued at their fair value with reference to their market value on the balance sheet date, without anydeduction for transaction costs that may be incurred until their sale. These assets are recognised in the heading "Other investments" and any variation in their fair value isrecorded under the heading "Earnings relative to investment activities".d) Financial liabilities and equity instrumentsFinancial liabilities and equity instruments are classified according to the nature of the contract regardless of their legal form. Equity instruments are contracts that have aresidual interest in the Group's assets after deducting its liabilities.Equity instruments issued by the Group are recorded at the amount received net of the costs incurred to issue them.158

Notes to the Consolidated Financial Statements as at 31 December 2010e) Accounts payableAccounts payable are measured initially at fair value and subsequently at amortised cost in accordance with the effective interest rate method.f) LoansLoans are initially recorded and recognised as liabilities at their nominal value, net of the costs incurred to issue them and subsequently measured at amortised cost. Financecharges, calculated in accordance with the effective interest rate and including premiums payable, are accounted for in accordance with the accrual principle and added to thebook value of the loan if they are not paid during the year.g) Derivative financial instruments and hedge accountingDerivative financial instruments are used to hedge the financial risks to which the Group is exposed due to changes in interest rates. Thus, the Group does not use derivativefinancial instruments for speculative purposes.Financial instruments are used in accordance with internal policies adopted by the Board of Directors.Derivative financial instruments are measured at their respective fair value and recognised in the heading "Other liabilities/current assets" or "Other non-current liabilities/assets", as applicable. The recognition method depends on the nature and purpose of their contracting.The fair value of the derivative financial instruments is determined with reference to stock market values. If the stock market values are not available, the fair value is determinedbased on the analysis of discounted cash flows, which include assumptions supported on observable market prices or rates.Hedge accountingThe possibility of classifying a derivative financial instrument as a hedging instrument follows the provisions of IAS 39 - Financial Instruments: Recognition and Measurement("IAS 39"), particularly regarding their documentation and effectiveness.Changes in the fair value of derivative financial instruments classified as fair value hedges are recognised as a financial profit or loss for the year, as well as changes in the fairvalue of the asset or liability subject to that risk.Changes in the fair value of derivative financial instruments classified as cash flow hedges are recorded in "Hedge operation reserves" for their effective component and infinancial profit or loss for their non-effective component. The values recorded under “Hedge operation reserves” are transferred to the financial profit or loss for the year whenthe hedged item also has an effect on profit or loss.Changes in derivative financial instruments classified as hedges of a net investment in a foreign operation are recorded as "Currency conversion adjustments" for their effectivecomponent. The non-effective component of these changes is recognised immediately as financial profit or loss for the year. If the hedging instrument is not a derivative, thechanges arising from changes in exchange rates are recorded under "Currency conversion adjustments."Hedge accounting is discontinued when the hedging instrument reaches maturity, is sold or exercised, or when the hedge relationship no longer meets the requirementsset out in IAS 39.Trading instrumentsFor derivative financial instruments which, despite being used for economic hedging purposes, in accordance with the Group’s risk management policies do not comply withall provisions of IAS 39 regarding the possibility of qualification in hedge accounting, changes in their fair value are recorded in the income statement for the year when theyoccur in the heading "Financial profit or loss".2.17 - Pension liabilitiesThe Group offers a retirement plan to its employees.This insurance plan was established in the context of a social and incentive policy for workers and is of the exclusive initiative of the subsidiary companies where these benefits areattributed. Characterised by their voluntary nature, contributions that are deemed appropriate at any given time are subject to the sole discretion of their board of directors, taking intoaccount the performance and economic and financial situation. Thus, the contributions made by the Group are recorded as a cost on the date they are due.159

Notes to the Consolidated Financial Statements as at 31 December 2010While their creation is optional, the contributions made by the Group are exclusively those provided for in applicable tax legislation.2.18 – Income taxIncome tax for the year is calculated based on taxable income of the companies included in consolidation and considers deferred taxation.The current income tax rate is calculated based on the taxable income (which differs from accounting income) of the companies included in the consolidation in accordancewith the tax rules in force at the head office of each company of the Group.Deferred taxes refer to temporary differences between the amounts of assets and liabilities for accounting purposes and their amounts for taxation purposes, as well as theresulting tax benefits obtained.Deferred tax assets and liabilities are calculated and periodically evaluated using tax rates that are expected to be in force at the date of reversal of the temporary differences,are not discounted and are recognised as non-current assets or liabilities.Deferred tax assets are only recorded when there are reasonable expectations of sufficient future tax profits to use them. On each balance sheet date, the temporary differencesunderlying deferred tax assets are reviewed to recognise or adjust them according to the current expectation of future recovery.2.19 - Contingent assets and liabilitiesA contingent asset is a possible asset derived from past events and whose existence will only be confirmed by the occurrence or not of uncertain future events.Contingent assets are not recognised in the consolidated financial statements but are disclosed when an inflow of future economic benefits is probable.A contingent liability is (i) a possible liability arising from past events and whose existence will be confirmed by the occurrence or not of uncertain future events or (ii)a present liability which arises from past events but is not recognised because the existence of an outflow of funds is unlikely or the guarantee of the liability cannot bemeasured reliably.Contingent liabilities are not recognised in the consolidated financial statements but are disclosed in the notes to the financial statements, unless the possibility of an outflowof funds affecting future economic benefits is remote, in which case they are not subject to disclosure.2.20 - Revenue and accrualsSalesRevenue arising from the sale of goods is recognised in the income statement when all the following conditions have been fulfilled:- The Group has transferred to the buyer the significant risks and rewards of the ownership of the assets;- The Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the assets sold;- The amount of revenue can be measured reliably;- It is probable that the economic benefits associated with the transaction will flow to the Group; and- The costs incurred or to be incurred with respect to the transaction can be measured reliably.Sales are recognised net of taxes, discounts and other costs incurred to realise the fair value of the amount received or receivable.Services renderedRevenue arising from services rendered is recognised in the income statement with reference to the stage of completion of services on the balance sheet date.If the result of a construction contract can be estimated reasonably, the revenue and the related costs are recognised using the percentage of completion method as requiredby IAS 11 - Construction Contracts ("IAS 11"). According to this method, the income directly related to work in progress is recognised in the income statement according to itspercentage of completion, which is determined by the ratio of costs incurred and the total estimated costs of works (costs incurred plus costs to be incurred). The differencesbetween the income calculated through the application of this method and the turnover issued are recorded for under the headings "Other current assets" or "Other currentliabilities", according to the nature of the differences.160

Notes to the Consolidated Financial Statements as at 31 December 2010Changes in the works under a construction contract, claims and premiums are considered as they are agreed and when they can be quantified in a sufficiently reliable manner.To make a reasonable estimate of the result of a contract, the following conditions must be fulfilled:- It is probable that the Group will obtain the economic benefits set out in the contract;- The costs of the contract are identifiable and can be quantified reliably;- On the balance sheet date, it must be possible to reliably measure the necessary costs to complete the construction and the degree of completion thereof, so that theactual costs incurred can be compared with the initial estimates.In order to meet with the costs to be incurred during the warranty year of the works, the Group recognises a provision to hedge this risk, which is calculated taking into accountannual production and the record of past costs incurred in works during the warranty year.If it becomes probable that the costs exceed the income of the contract, the expected loss is recognised in the income statement for the year to which it refers.The activities developed under public service concession contracts are accounted for in accordance with IFRIC 12 - Service concession arrangements ("IFRIC 12"), whichestablishes the provisions to be applied in the measurement, recognition, presentation and dissemination of activities developed under public service concession contracts.Accruals and DeferralsIncome and expenditure are recorded on an accrual basis, through which they are recognised as they are generated. Income and expenditure whose actual value is unknownare estimated.Differences between the amounts invoiced and the corresponding income and costs generated are recorded under "Other current assets" and "Other current liabilities".2.21 - Classification of the Financial PositionAssets which are realisable and liabilities payable less than one year from the balance sheet date are classified, respectively, as current assets and liabilities.Liabilities relative to which there is no unconditional right to defer their payment for a period of at least twelve months after the balance sheet date are also classified ascurrent.2.22 - Impairment of financial assetsThe Group assesses on each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired.Financial assets available for saleIn the case of financial assets classified as available for sale, a significant or prolonged decline in the fair value of the instrument below its cost is considered as an indicatorthat the instruments are impaired. If such evidence exists for financial assets classified as available for sale, the accumulated loss - measured as the difference between itsacquisition cost and present fair value, minus any impairment loss already recognised through profit and loss - is removed from equity and recognised in the income statement.Impairment losses of equity instruments recognised through profit or loss are not reversed through the income statement.Customers, receivables and other financial assetsImpairment losses are recorded whenever there are clear indicators that the Group will not be able to collect all the amounts to which it is entitled, in accordance with theoriginal terms of the established contracts. Various indicators are used to identify them, such as:- seniority of the loan;- financial difficulties of the debtor;- probability of insolvency of the debtor.Impairment losses are measured by the difference between the recoverable amount and the book value of the financial asset and recognised through profit or loss. Whenevera certain amount is considered as uncollectible it is written-off through the respective accumulated impairment loss. Subsequent recoveries of amounts that have beenwritten-off are recognised in profit or loss.161

Notes to the Consolidated Financial Statements as at 31 December 20102.23 - Non-current assets held for saleNon-current assets (or discontinued operations) are classified as held for sale whenever it is determined that their value will be recovered through their sale and not throughtheir continued use. This situation is considered to occur only when: (i) the sale is highly probable; (ii) the asset is available for sale immediately in its current conditions; (iii)the management is committed to a sales plan and, (iv) it is expected that the sale will take place within the period of twelve months.Non-current assets (or discontinued operations) classified as held for sale are measured at the lowest value of their book value and respective fair value minus the costs oftheir sale.2.24 - Earnings per shareEarnings per share are calculated by dividing the earnings attributable to the ordinary shareholders of TD,SA by the weighted average number of shares in circulation duringthe year.The diluted earnings per share are calculated by dividing the earnings attributable to the ordinary shareholders of TD,SA by the weighted average number of shares in circulationduring the year, adjusted by potential ordinary diluting shares.The potential ordinary diluting shares can result from options over shares and other financial instruments issued by the Group, convertible into TD,SA shares.2.25 - Subsequent eventsEvents occurring after the balance sheet date that provide additional information about conditions that existed on the balance sheet date are duly reflected in the consolidatedfinancial statements.Events occurring after the balance sheet date that provide additional information on conditions that occurred after the balance sheet date are disclosed in the notes to theconsolidated financial statements.3 - ALTERATIONS OF POLICIES, ESTIMATES AND ERRORSDuring the year ended on 31 December 2010, there were no alterations to the accounting policies considered in the preparation of the financial information of TD-EC relativeto the year ended on 31 December 2009 (see Introductory Note) and referred to in the respective notes, and no significant material errors were recorded or alterations madeto the accounting estimates relative to previous years.4 - COMPANIES INCLUDED IN THE CONSOLIDATION PERIMETERAs at 31 December 2010, Teixeira Duarte, S.A. and the following controlled companies were included in the consolidation, by the full method:Company name Head office Effective percentageholdingINTERNAL MARKETCONSTRUCTIONBEL-ere - Engenharia e Reabilitação de Estruturas, S.A. Edifício 1, Lagoas Park 100.00%Porto SalvoCONSTRUSALAMONDE, ACE Edifício 2, Lagoas Park 92.50%Porto SalvoEPOS - Empresa Portuguesa de Obras Subterrâneas, S.A. Edifício 1, Lagoas Park 100.00%Porto SalvoOFM - Obras Públicas, Ferroviárias e Marítimas, S.A. Edifício 1, Lagoas Park 60.00%Porto SalvoSOMAFEL - Engenharia e Obras Ferroviárias, S.A. Edifício 1, Lagoas Park 60.00%Porto SalvoTeixeira Duarte – Engenharia e Construções, S.A. Edifício 2, Lagoas Park 100.00%Porto Salvo162

Notes to the Consolidated Financial Statements as at 31 December 2010Company name Head office Effective percentageholdingCEMENT, CONCRETE AND AGGREGATESC + P.A. - Cimento e Produtos Associados, S.A. Edifício 1, Lagoas Park 52.00%Porto SalvoMARINERTES, S.A. Edifício 1, Lagoas Park 51.00%Porto SalvoCONCESSIONS AND SERVICESINVICTAAMBIENTE - Recolha de Resíduos e Limpeza Pública, S.A. Praça do Bom Sucesso, nº 61 - Escritórios 501 e 502 100.00%PortoRECOLTE - Recolha, Tratamento e Eliminação de Resíduos, S.A. Edifício 1, Lagoas Park 100.00%Porto SalvoSATU-Oeiras - Sistema Automático de Transporte Urbano, S.A. (a) Edifício Paço de Arcos, E.N. 249/3 49.00%Paço de ArcosTDGI - Tecnologia de Gestão de Imóveis, S.A. Edifício 1, Lagoas Park 100.00%Porto SalvoTDHOSP - Gestão de Edifício Hospitalar, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoREAL ESTATEBONAPARTE - Imóveis Comerciais e Participações, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoFundo de Investimento Imobiliário Fechado TDF Edifício 2, Lagoas Park 100.00%Porto SalvoIMOPEDROUÇOS - Sociedade Imobiliária, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoIMOTD - SGPS, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoPARCAUTO - Sociedade Imobiliária, S.A. Edifício 2, Lagoas Park 99.80%Porto SalvoQUINTA DE CRAVEL - Imobiliária, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoTDE - Empreendimentos Imobiliários, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoTD VIA - Sociedade Imobiliária, S.A. Edifício 2, Lagoas Park 93.75%Porto SalvoTDF - Sociedade Gestora de Fundos de Investimento Imobiliário, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoTeixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoTRANSBRITAL - Transportes e Britas Pio Monteiro & Filhos, S.A. Pedreira das Perdigueiras - Laveiras 100.00%Paço de ArcosV8 - Gestão Imobiliária, S.A. Edifício 2, Lagoas Park 99.90%Porto SalvoHOTEL SERVICESESTA - Gestão de Hotéis, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoEVA - Sociedade Hoteleira, S.A. Av. República, nº 1 100.00%FaroLAGOASFUT - Equipamento Recreativo e Desportivo, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoLAGOAS HOTEL, S.A. Edifício 2, Lagoas Park 100.00%Porto Salvo163

Notes to the Consolidated Financial Statements as at 31 December 2010Company name Head office Effective percentageholdingROCHORIENTAL - Sociedade Hoteleira, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoSINERAMA - Organizações Turísticas e Hoteleiras, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoTDH - SGPS, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoTDHC - Instalações para Desporto e Saúde, S.A. Edifício 2, Lagoas Park 100.00%Porto SalvoDISTRIBUTIONBONAPAPEL - Artigos de Papelaria e Equipamentos Edifício 2, Lagoas Park 100.00%Informáticos - Unipessoal, Lda.Porto SalvoTEIXEIRA DUARTE - TRADING, S.A. Edifício 1, Lagoas Park 100.00%Porto SalvoENERGYACG - Distribuição e Comércio de Gás, S.A. (b) Rua das Lagoas - Campo Raso 34.72%SintraAP GÁS - Distribuição e Comércio de Gás, S.A. (b) Rua das Lagoas - Campo Raso 34.72%SintraDIGAL - Distribuição e Comércio, S.A. (b) Rua das Lagoas - Campo Raso 34.72%SintraDNGÁS - Distribuição e Comércio de Gás, S.A. (b) Rua das Lagoas - Campo Raso 49.60%SintraGOMES & OLIVEIRA, S.A. (b) Rua das Lagoas - Campo Raso 34.72%SintraLUBRILAMEIRÃO, Lda. (b) Av. da Liberdade, nº 666 48.26%FafeMERCAPETRO - Produtos Petrolíferos, S.A. (b) Rua Óscar da Silva, 2243 28.14%Leça da PalmeiraMULTIGÁS - Sociedade Comercial e Distribuidora de Gás, S.A. (b) Rua das Lagoas - Campo Raso 34.72%SintraPETRIN - Petróleos e Investimentos, S.A. (b) Edifício 1, Lagoas Park 47.50%Porto SalvoPPS - Produtos Petrolíferos, S.A. (b) Edifício 1, Lagoas Park 49.60%Porto SalvoPTG - SGPS, S.A. Edifício 1, Lagoas Park 99.20%Porto SalvoTANQUIGÁS - Distribuição e Comércio de Gás, S.A. (b) Rua das Lagoas - Campo Raso 34.72%SintraTDARCOL - SGPS, S.A. (c) Edifício 1, Lagoas Park 49.60%Porto SalvoAUTOMOBILETDO - Investimento e Gestão, S.A. Rua das Pretas, 4 - Fracção 4 D 100.00%FunchalVTD - Veículos Automóveis, S.A. Edifício 1, Lagoas Park 100.00%Porto SalvoOTHERTDEMPA - Gestão de Participações e Investimentos, S.A. Rua das Pretas, 4 - Fracção 4 D 76.00%FunchalTDO - SGPS, S.A. Rua das Pretas, 4 - Fracção 4 D 100.00%FunchalTEDAL - SGPS, S.A. Edifício 2, Lagoas Park 100.00%Porto Salvo164

Notes to the Consolidated Financial Statements as at 31 December 2010Company name Head office Effective percentageholdingEXTERNAL MARKETANGOLACONSTRUCTIONBEL-ere – Engenharia e Reabilitação de Estruturas Angola, Lda. Alameda Manuel Van-Dúnem, 318 100.00%LuandaCEMENT, CONCRETE AND AGGREGATESANGOCIME - Cimentos de Angola, Lda. Rua Comandante Che Guevara, 67 - 1º D 100.00%LuandaBETANGOLA - Betões e Pré-Fabricados de Angola, Lda. Rua Comandante Che Guevara, 67 - 1º D 100.00%LuandaCONCESSIONS AND SERVICESEDUCARE - Actividades Educativas e Culturais, Lda. Rua Amílcar Cabral, 27 - R/C C 100.00%LuandaTDGI - Tecnologia de Gestão de Imóveis, Lda. Rua Comandante Che Guevara, 67 - 1º D 100.00%LuandaREAL ESTATEAFRIMO - Empreendimentos Imobiliários, Lda. Rua Amílcar Cabral, 51 - 1º C 51.00%LuandaANGOPREDIAL - Empreendimentos Imobiliários, Lda. Rua Amílcar Cabral, 27 - R/C D 100.00%LuandaCASANGOL - Gestão Imobiliária, Lda. Rua Amílcar Cabral, 27 - R/C D 100.00%LuandaIMOAFRO - Empreendimentos Imobiliários, Lda. Rua Amílcar Cabral, 27 - R/C D 100.00%LuandaTeixeira Duarte - Engenharia e Construções (Angola), Lda. Rua Amílcar Cabral, 27 - R/C D 100.00%LuandaURBÁFRICA - Sociedade Imobiliária, Lda. Rua Amílcar Cabral, 35 - 5º C 90.00%LuandaHOTEL SERVICESALVALADE - Empreendimentos Turísticos e Hoteleiros, Lda. Rua Comandante Gika – Bairro Maiango 100.00%LuandaANGOIMO - Empreendimentos e Construções, Lda. Rua Amílcar Cabral, 35 – 5º C 100.00%LuandaSerafim L. Andrade, S.A.R.L. Rua da Missão, 103 80.00%LuandaURBANGO - Gestão Imobiliária, Lda. Rua Amílcar Cabral, 27 - R/C D 100.00%LuandaDISTRIBUTIONMAXI - Comércio Geral, Importação e Exportação, Lda. Rua Amílcar Cabral, 51 - 1º C 100.00%LuandaMAXI RETAIL - Comércio Geral, Lda. Avenida Pedro de Castro Van - Dúnem 100.00%LuandaAUTOMOBILEAUTO COMPETIÇÃO Angola, Lda. Rua Eugénio de Castro, Instalações do 100.00%Cine Atlântico - Luanda165

Notes to the Consolidated Financial Statements as at 31 December 2010Company name Head office Effective percentageholdingCOMÉRCIO DE AUTOMÓVEIS, Lda. Rua Frederich Engels, 9 100.00%LuandaTDA - Comércio e Indústria, Lda. Rua Amilcar Cabral, nº 27 R/C, Letra C 100.00%LuandaTOPCAR - Aluguer de Viaturas, Lda. Rua Amilcar Cabral, nº 27 R/C, Letra C 100.00%LuandaVAUCO - Automóveis e Equipamentos, Lda. Rua Ho Chi Min (Largo 1º de Maio) 51.00%LuandaVTD - Veículos Automóveis Angola, Lda. Via A-1, Lote CCB-5 - Pólo Automóvel 100.00%LuandaALGERIACONSTRUCTIONTEIX.CO, SPA (a) BP 62B Zone D'Active Dar El Beida 50.00%AlgiersTEIXEIRA DUARTE ALGERIE, SPA Parc Miremont, Rue A, nº 136 Bouzareah 99.94%AlgiersBRAZILCONSTRUCTIONEMPA - Serviços de Engenharia, S.A. Rua Major Lopes, 800 76.00%Bairro São Pedro - Belo HorizonteSOMAFEL Brasil – Obras Ferroviárias, Ltda. Rua Major Lopes, 800 – sala 306 60.00%Bairro São Pedro – Belo HorizonteCONCESSIONS AND SERVICESEMPA Logística, Ltda. Rua Major Lopes, 800 - sala 410 75.75%Bairro São Pedro - Belo HorizonteGONGOJI Montante Energia, S.A. Rua Major Lopes, 800 - sala 310 75.99%Bairro São Pedro - Belo HorizontePAREDÃO de Minas Energia, S.A. Rua Major Lopes, 800 - sala 306 75.99%Bairro São Pedro - Belo HorizonteTABOQUINHA Energia, S.A. Rua Major Lopes, 800 - sala 308 75.99%Bairro São Pedro - Belo HorizonteREAL ESTATETDPG - Empreendimentos Imobiliários e Hoteleiros, Ltda. Avenida Domingos Ferreira nº 4060, sala 301 100.00%Boa Viagem - Cidade de RecifeTDSP - Participações, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 100.00%Itaim Bibi - São PauloTDSP - Elisa de Moraes Empreendimentos Imobiliários, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 90.00%Itaim Bibi - São PauloTDSP - Bela Vista Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 92.65%Itaim Bibi - São PauloTDSP - Galeno de Castro, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 92.65%Itaim Bibi - São PauloTDSP - Maratona, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 92.65%Itaim Bibi - São PauloTDSP - Direitos Humanos, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 92.65%Itaim Bibi - São PauloTDSP - 03, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 92.65%Itaim Bibi - São Paulo166

Notes to the Consolidated Financial Statements as at 31 December 2010Company name Head office Effective percentageholdingTDSP - 04, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 99.95%Itaim Bibi - São PauloTDSP - 05, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 95.00%Itaim Bibi - São PauloTDSP - 06, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 99.95%Itaim Bibi - São PauloTDSP - 07, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 99.95%Itaim Bibi - São PauloTDSP - 08, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 99.95%Itaim Bibi - São PauloTDSP - 09, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 99.95%Itaim Bibi - São PauloTDSP - 10, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 99.95%Itaim Bibi - São PauloTDSP - 11, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 99.95%Itaim Bibi - São PauloSPAINCONCESSIONS AND SERVICESG.S.C. - Compañia General de Servicios Av. Alberto Alcocer, 24 - 7º 100.00%y Construcción, S.A. Sociedad UnipersonalMadridGIBRALTARCONSTRUCTIONTeixeira Duarte International, LTD. 23, Portland House - Glacis Road 100.00%GibraltarMACAUCONSTRUCTIONTeixeira Duarte - Engenharia e Construções (Macau), Lda. Rua de Xangai, 175 100.00%Edifício Assoc. Comercial de Macau, 10 AMacauMOZAMBIQUECONSTRUCTIONTeixeira Duarte - Engenharia e Construções (Moçambique), Lda. Av. 24 de Julho, 141 72.66%MaputoCONCESSIONS AND SERVICESTDGI - Tecnologia de Gestão de Imóveis, Lda. Av. 24 de Julho, 141 67.41%MaputoREAL ESTATEIMOPAR - Centro Comercial de Maputo, S.A.R.L. Av. 24 de Julho, 135 100.00%MaputoHOTEL SERVICESAVENIDA - Empreendimentos Turísticos e Hoteleiros, Lda. Av. 24 de Julho, 135 100.00%Maputo167

Notes to the Consolidated Financial Statements as at 31 December 2010Company name Head office Effective percentageholdingSociedade Hotel Tivoli, Lda. Av. 25 de Setembro, 1321 65.00%MaputoTIVOLI BEIRA - Hotelaria e Serviços, Lda. Av. 24 de Julho, 141 98.63%MaputoNAMIBIACEMENT, CONCRETE AND AGGREGATESKARIBIB Portland Cement (PTY) (d) P O Box 9574 Windhoek 49.40%NamibiaKPC Trading and Services (d) P O Box 2143 Windhoek 29.64%NamibiaSQUIRREL Investments 115 PTY, Ltd (d) P O Box 2143 Windhoek 49.40%NamibiaRUSSIACONCESSIONS AND SERVICESMMK Cement, Limited Liability Company (d) Murmansk 36.40%RussiaUKRAINECEMENT, CONCRETE AND AGGREGATESLimited Liability Company Cement Khutorskya Str., 70 52.00%OdessaVENEZUELACONSTRUCTIONTEGAVEN - Teixeira Duarte y Asociados, C.A. (a) Av. Este, 6 - Edif. Centro Parque 31.71%Carabobo, Piso 6, Of. 601 - CaracasVenezuela(a) The Group controls these subsidiaries through the subsidiary Teixeira Duarte - Engenharia e Construções, S.A.(b) The Group controls these subsidiaries through the subsidiary TDARCOL - SGPS, S.A.(c) The Group controls these subsidiaries through the subsidiary PTG - SGPS, S.A.(d) The Group controls these subsidiaries through the subsidiary C + P.A. - Cimento e Produtos Associados, S.A.5 - CHANGES IN THE CONSOLIDATION PERIMETERDuring the year ended on 31 December 2010, no companies entered or left the consolidation perimeter, relative to the consolidation perimeter as at 31 December 2009.168

Notes to the Consolidated Financial Statements as at 31 December 20106 - EXCHANGE RATESThe following exchange rates were used to convert the assets and liabilities expressed in foreign currency into Euros as at 31 December 2010 and 2009, as well as the resultsof the operations developed in countries where the functional currency is different from the Euro, for the year ended on 31 December 2010:Closing rateAverage rateCurrency 2010 2009 Var 2010US Dollar 1.3362 1.4406 (0.1044) 1.3299Macaense Pataca 10.6972 11.5060 (0.8088) 10.6410Mozambican Metical 43.6500 44.1500 (0.5000) 45.3431Venezuelan Bolivar 5.7385 3.0934 2.6451 5.4735Angolan Kwanza 121.8310 128.5360 (6.7050) 121.8132Algerian Dinar 99.2829 103.5086 (4.2257) 98.0720Moroccan Dirham 11.2213 11.3480 (0.1267) 11.1624Brazilian Real 2.2177 2.5113 (0.2936) 2.3379Ukrainian Hryvnia 10.6462 11.5968 (0.9506) 10.5987Namibian Dollar 8.8625 10.6660 (1.8035) 9.7353Cape Verdean Escudo 110.2650 n/a - 110.2650Russian Rouble 40.8200 43.1540 (2.3340) 40.4473Tunisian Dinar 1.9284 1.9009 0.0275 1.89957 – INFORMATION BY OPERATING SEGMENTSThe main activities developed by the Group are classified into the following operating segments:• Construction;• Cement, concrete and aggregates;• Concessions and services;• Real estate;• Hotel services;• Distribution;• Energy;• Automobile.The sales and services rendered and the profit or loss of each of the abovementioned operating segments for the year ended on 31 December 2010, were as follows:Sales and services rendered20102010 2009SegmentCustomersInter -Operating OperatingTotalexternal segmentalprofit or loss profit or lossConstruction 760,475 126,563 887,038 25,124 -Cement, concrete and aggregates 13,176 29,931 43,107 (11,382) -Concessions and services 55,934 15,411 71,345 6,634 -Real estate 118,754 13,627 132,381 60,316 -Hotel services 78,943 10,044 88,987 16,153 -Distribution 115,741 6,514 122,255 4,902 -Energy 127,821 2,422 130,243 5,604 -Automobile 108,784 17,005 125,789 (4,156) -Not allocated to segments - - - (17,749) (12)Eliminations - (221,517) (221,517) (1,568) -1,379,628 - 1,379,628 83,878 (12)Financial costs and losses (156,704) -Financial income and gains 118,892 -Earnings from investment activities 20,132 -Pre-tax profit 66,198 (12)Inter-segment transactions are carried out at market prices.169

Notes to the Consolidated Financial Statements as at 31 December 2010Other information:SegmentFixed capitalexpendituresAmortisation anddepreciationProvisions andimpairment lossesConstruction 44,650 33,496 7,298Cement, concrete and aggregates 4,798 3,918 48Concessions and services 5,240 5,119 -Real estate 14,233 2,137 -Hotel services 26,799 7,261 -Distribution 6,037 2,912 -Energy 1,971 2,339 -Automobile 1,811 1,839 -Not allocated to segments - 4 -105,539 59,025 7,346The asset and liability items by segment, as at 31 December 2010 and 2009 and their respective reconciliation with the consolidated total are as follows:SegmentInvestmentsin associatesFinancialassetsavailablefor saleAssets2010 2009OtherassetsTotalInvestments inassociatesFinancialassetsavailable forsaleOtherassetsTotalLiabilities2010 2009Construction 29,170 - 1,602,338 1,631,508 25,008 - 1,490,285 1,515,293 1,073,981 1,102,859Cement, concrete andaggregates52,605 - 93,154 145,759 46,952 - 99,631 146,583 73,525 44,522Concessions and services - 19,361 228,562 247,923 - 27,164 210,517 237,681 185,607 200,345Real estate 453 177,510 1,634,689 1,812,652 1,490 257,716 2,186,729 2,445,935 1,321,989 2,120,750Hotel services 8 - 329,023 329,031 292 - 232,578 232,870 289,665 164,680Distribution - - 148,791 148,791 - - 120,377 120,377 92,200 100,974Energy 23 - 77,966 77,989 1,190 - 67,950 69,140 52,937 47,076Automobile - - 177,978 177,978 - - 193,878 193,878 119,685 138,911Not allocated to segments 5,854 11,349 586,781 603,984 902,264 - 317,552 1,219,816 82,272 20,527Eliminations - - (2,454,363) (2,454,363) - - (2,669,102) (2,669,102) (1,132,615) (942,810)88,113 208,220 2,424,919 2,721,252 977,196 284,880 2,250,395 3,512,471 2,159,246 2,997,834The sales, services rendered and information on non-current non-monetary assets by geographical segment were composed as follows for the year ended on 31 December2010 and 31 December 2009, respectively:Sales andservices renderedNon-monetary non-currentassetsGeographical segment 2010 2010 2009Portugal 592,633 663,697 668,162Angola 449,239 324,332 285,115Algeria 73,031 12,874 16,676Brazil 162,706 45,554 19,868Spain 25,089 16,416 16,497Morocco 3,328 1,717 2,802Mozambique 53,380 14,904 14,081Ukraine 10,556 27,484 25,066Venezuela 6,720 85 171Other 2,946 2,652 2,4801.379.628 1.109.715 1.050.918170

Notes to the Consolidated Financial Statements as at 31 December 20108 - OPERATING INCOMEOperating income for the year ended on 31 December 2010 and 2009 was as follows:2010Sales and services rendered:Sales 1,027,316Services rendered 352,3121,379,628Other operating income:Change in the fair value of investment property (Note 21) 16,876Supplementary income 7,192Inventory gains 7,122Own work capitalised (a) 4,251Reversal of impairment losses of accounts receivable (Note 27) 2,595Disposal of assets (b) 2,569Correction of previous financial years 2,467Tax refunds 1,036Operating grants 564Benefits from contractual penalties 133Investment grants 84Reversal of impairment losses of inventories (Note 10) 71Other operating profits and gains 20,83065,7901,445,418(a) Own work capitalised essentially corresponds to costs associated to the construction of property.(b) The gains indicated were mainly obtained through the sale of tangible fixed assets of the amount of EUR 2,562 thousand.9 - COST OF SALESDuring the year ended 31 December 2010 the cost of sales was calculated as follows:Raw materialsand consumablesGoodsTotalGross assets:Balance as at 1 January 2010 31,432 143,887 175,319Currency conversion adjustments 2,086 9,438 11,524Adjustments (11) - (11)Purchases 120,132 304,071 424,203Cost of the year (133,523) (330,748) (464,271)Balance as at 31 December 2010 20,116 126,648 146,764Accumulated impairment losses of inventories:Balance as at 1 January 2010 655 2,112 2,767Currency conversion adjustments 54 147 201Reinforcements (Note 13) - 2,581 2,581Adjustments - (75) (75)Balance as at 31 December 2010 709 4,765 5,474Net value as at 31 December 2010 19,407 121,883 141,290171

Notes to the Consolidated Financial Statements as at 31 December 201010 - CHANGE IN PRODUCTIONThe statement of the change in production reported for the year ended on 31 December 2010 was as follows:Products andworks inprogressIntermediateand finishedproductsTotalGross assets:Balance as at 1 January 2010 193,478 25,825 219,303Currency conversion adjustments 28 6,924 6,952Adjustments (64,203) (3,553) (67,756)Change in production 6,420 (7,666) (1,246)Balance as at 31 December 2010 135,723 21,530 157,253Accumulated impairment losses of inventories:Balance as at 1 January 2010 77 - 77Reductions (Note 8) (71) - (71)Transfers (6) - (6)Balance as at 31 December 2010 - - -Net value as at 31 December 2010 135,723 21,530 157,253As at 31 December 2010 and 2009, the products and work in progress related to the following:2010 2009Construction contracts - 64,648Real estate projects 135,723 128,830135,723 193,478As at 31 December 2010 and 2009, the real estate projects were being developed by the following entities:2010 2009Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. 27,679 17,173TD VIA - Sociedade Imobiliária, S.A. 27,188 26,335QUINTA DE CRAVEL - Imobiliária, S.A. 16,765 17,714V8 - Gestão Imobiliária, S.A. 16,293 25,093TDSP - Bela Vista, Empreendimentos Imobiliários, SPE, Ltda. 11,985 9,142TDSP - Galeano de Castro, Empreendimentos Imobiliários, SPE, Ltda. 10,234 8,818PARCAUTO - Sociedade Imobiliária, S.A. 6,380 6,060TDSP 07 - Empreendimentos Imobiliários, SPE, Ltda. 5,456 -TDSP 09 - Empreendimentos Imobiliários, SPE, Ltda. 3,283 -TDSP 05 - Empreendimentos Imobiliários, SPE, Ltda. 2,877 -IMOPREDOUÇOS - Sociedade Imobiliária, S.A. 1,833 1,710ANGOIMO - Empreendimentos e Construções, Lda. 362 336TDPG - Empreendimentos Imobiliários e Hoteleiros, Ltda. 331 -TDSP - Direitos Humanos, Empreendimentos Imobiliários, SPE, Ltda. 274 2,869TDSP - Maratona, Empreendimentos Imobiliários, SPE, Ltda. 258 9,084TDSP -Elisa de Moraes - Empreendimentos Imobiliários, Ltda. - 1,138Other 4,525 3,358135,723 128,830As at 31 December 2010 and 2009, there were no inventories pledged as security for liabilities.172

Notes to the Consolidated Financial Statements as at 31 December 201011 - STAFF COSTSThe average number of employees in the year ended 31 December 2010, by operating segment, was as follows:2010Construction 8,464Cement, concrete and aggregates 460Concessions and services 1,257Real estate 94Hotel services 1,324Distribution 550Energy 250Automobile 636Other 113,036Staff costs for the years for the year ended on that data were as follows:2010Wages and salaries 139,416Other remunerations 59,706Payroll costs 34,959Insurance 4,534Retirement benefits (a) 2,443Other staff costs 12,241253,299(a) The costs of retirement benefits correspond to contributions made to the pension plan (Note 2.17).12 - OPERATING LEASESCosts of EUR 1,032 thousand were recorded relative to operating lease instalments for the year ended on 31 December 2010, which were recognised under the heading"External supplies and services".The instalments of operating leases held by the Group as at 31 December 2010 have the following maturities:20102011 9932012 6192013 1982014 132015 and following -1,823173

Notes to the Consolidated Financial Statements as at 31 December 201013 - OTHER OPERATING COSTSThe other operating costs for the year ended on 31 December 2010 and for the period between 30 November 2009 (date of constitution) and 31 December 2009 were asfollows:2010 2009Taxes 24,334 5Inventory losses 10,475 -Impairment losses of debts receivable (Note 27) 14,606 -Change in the fair value of investment property (Note 21) 6,448 -Losses incurred in the disposal of assets (a) 1,760 -Impairment losses of inventories (Note 9) 2,581 -Correction of previous financial years 636 -Fines and penalties 423 -Donations 447 -Inventory offers and samples 369 -Levies 653 -Bad debts 323 -Expenditure on industrial property 20 -Other operating costs 17,606 -80,681 5(a) The losses shown above were essentially incurred through the disposal of tangible fixed assets of the amount of EUR 2,571 thousand.14 - FINANCIAL PROFIT OR LOSSThe financial profit or loss for the year ended 31 December 2010 was as follows:2010Financial costs and losses:Interest paid 57,817Unfavourable currency conversion differences 80,209Other financial costs and losses 18,678156,704Financial income and gains:Interest received 16,554Favourable currency conversion rate differences 95,203Cash discounts 847Other financial income and gains 6,288118,892Earnings from investment activities:Earnings from associated companies (a) 88,198Dividends (b) 8,272Other investments (1,031)Gains / losses in the measurement of assets available for sale (Note 24) (75,307)20,132Financial profit or loss (17,680)174

Notes to the Consolidated Financial Statements as at 31 December 2010(a) The earnings from associated companies for the year ended on 31 December 2010 include the effect of the application of the equity method to the investments in associated companies of EUR9,460 thousand (Note 22).During the year ended on 31 December 2010, the Group sold their entire stake in CIMPOR - Cimentos de Portugal, SGPS, S.A., recording capital gains of EUR 71,183 thousand (Note 22).The Group also sold its stakes in Concessionária de Rodovias TEBE, S.A. and INFRAENGE Construções, Ltda., having recorded capital gains of EUR 7,647 thousand and a capital loss of EUR 56thousand, respectively.(b) As at 31 December 2010 the values presented correspond to dividends received from "Financial assets available for sale" of EUR 6,499 thousand and the rest refers to "Other investments" (Note 25).Pursuant to the policy described in Note 2.10, during the year ended on 31 December 2010, interest was capitalised in the acquisition of qualifiable assets to the amount of EUR 3,507 thousand.For the purposes of the capitalisation of financial costs associated to the acquisition cost of the qualifiable assets, an average rate of 2.99% was used.15 - INCOME TAXTeixeira Duarte - Engenharia e Construções, S.A. and most of its subsidiaries in Portugal are subject to Corporate Income Tax ("IRC") at the rate of 12.5% on the taxable amountof up to EUR 12,500, with the rate of 25% being applicable for the remaining taxable amount. Entities with reportable profit are also subject to the Municipal Surcharge(Derrama Municipal), the rate of which may vary to the maximum of 1.5%, as the State Surcharge (Derrama Estadual), incident on taxable profit in excess of EUR 2,000,000,at the rate of 2.5%. Independently of the profit for tax purposes recorded for the year, the abovementioned entities are also subject to autonomous taxation on charges at therates established in article 88 of the Corporate Income Tax Code. In the calculation of the taxable amount, to which the abovementioned tax rates are applied, non-acceptableamounts for tax purposes are added and subtracted from the book value amounts. These differences between the book value profit or loss and the profit or loss for taxpurposes may be of a temporary or permanent nature.TD-EC and the subsidiaries which are at least 90% owned, located in Portugal, are subject to the special taxation scheme for groups of companies (since the financial year of2003). This scheme consists in the aggregation of the taxable profits of all the companies included in the consolidation perimeter, as established in article 69 of the CorporateIncome Tax Code, minus the dividends distributed among them and included in the respective taxable amounts, with the IRC rates, increased by the individually determinedMunicipal and State Surcharges, then being applied to the overall result thus obtained, after deduction of the tax losses, in accordance with articles 52 and 71 of the IRC Code.In accordance with the legislation in force, tax returns are subject to review and correction by the tax authorities for a period of four years (five years for Social Security),except when there have been tax losses, tax benefits have been granted, or inspections, claims or disputes are underway, in which cases, depending on the circumstances,the periods of time are extended or suspended.The Board of Directors believes that any corrections which might arise from any tax reviews/inspections to these tax returns will not significantly affect the consolidatedfinancial statements as at 31 December 2010.The Group records deferred taxes corresponding to the temporary differences between the book value of the assets and liabilities and the corresponding tax base, as laiddown in IAS 12 - Income Tax (Note 26).The tax charge recorded for the year ended on 31 December 2010 and for the period between 30 November 2009 (date of constitution) and 31 December 2009 can bepresented as follows:2010 2009Current tax:Income tax in Portugal 17,748 -Income tax in other jurisdictions 20,817 -38,565 -Deferred tax (Note 26): (11,745) (1)26,820 (1)In addition to the amounts of deferred taxes recorded directly in the income statement, deferred taxes amounting to EUR 5,380 thousand were recorded directly in equity, as at 31 December 2010(Note 26).175

Notes to the Consolidated Financial Statements as at 31 December 201016 - EARNINGS PER SHAREThe earnings per share for the year ended on 31 December 2010 and for the period between 30 November 2009 (date of constitution) and 31 December 2009 werecalculated in consideration of the following amounts:2010 2009Profit or loss for the effect of calculating net earnings per basic share (profit or loss for the year) 46,392 (11)The weighted average number of shares for the effect of calculating net earnings per basic share (thousand) 350,394 144,940Net earnings per basic share 0.13 (0.00)Since for the financial year ended on 31 December 2010 and for the period between 30 November 2009 (date of constitution) and 31 December 2009 there were no dilution effects of the earningsper share, the diluted earnings per share are the same as the basic earnings per share.17 - DIVIDENDSThe General Meeting of Shareholders, held on 27 May 2010, deliberated the distribution of dividends in the amount of 1 Euro cent per share. These dividends were deliberatedand distributed considering the individual financial statements of the Company as at 31 December 2009 and amounted to EUR 4,064 thousand.Regarding the year ended on 31 December 2010, the Board of Directors proposes a dividend of EUR 0.015 per share, subject to approval at the General Meeting of Shareholdersto be held on 20 May 2011.18 - GOODWILLDuring the year ended 31 December 2010, the changes in the values of goodwill determined on the acquisition of subsidiaries and jointly controlled companies, as well asin the related impairment losses were as follows:2010Gross assets:Opening balance 59,654Currency conversion adjustments 20Acquisitions 177Transfers (374)Closing balance 59,477Accumulated impairment losses (1,570)Net assets: 57,907The values of goodwill as at 31 de December de 2010 and 2009 refer to the following entities:Subsidiary Operating segment 2010 2009EPOS - Empresa Portuguesa de Obras Subterrâneas, S.A. Construction 12,107 12,107CEMENT Limited Liability Company Cement, concrete and aggregates 23,761 23,761C+PA - Cimento e Produtos Associados, S.A. Cement, concrete and aggregates 7,806 7,806Karibib Portland Cement (PTY) Cement, concrete and aggregates 5,833 5,833Bonaparte - Imóveis Comerciais e Participações, S.A. Real estate 1,979 1,979TDSP - Bela Vista Emprrendimentos Imobiliários, SPE, Ltda. Real estate 46 41Digal - Distribuição e Comércio, S.A. Energy 6,163 5,986PETROSÓRIO - Combustiveis e Lubrificantes, Lda. Energy - 374Auto Competição Angola, Lda. Automobile 212 19757,907 58,084176

Notes to the Consolidated Financial Statements as at 31 December 2010The goodwill relative to the associated companies is an integral part of the values of the corresponding investments and is disclosed in Note 22.The values of goodwill are tested annually for impairment or whenever there are indications that they may be impaired.The recoverable amount of the cash-generating units to which goodwill is allocated is determined based on the calculation of its use value, which uses cash flow forecastsbased on the latest financial forecasts approved by the respective Boards of Directors over a period of five years, discounted by the discount rates shown in the table below,which were calculated based on the weighted average cost of capital (WACC), adjusted for risks, specific to the market into which each unit falls. Cash flows beyond this fiveyearperiod were forecast using the rates specified in the same table. These rates do not exceed the average long-term growth for the markets in which those cash-generatingunits are allocated.The Boards of Directors believe that any reasonably possible change in the key assumptions on which the recoverable amount is based would not cause the book value ofthese cash-generating units to exceed its recoverable amount.The main assumptions considered in determining the value in use of goodwill are as follows:2010 2009SubsidiaryBook valueof the goodwillDiscount ratePerpetuitygrowth rateBook valueof the goodwillDiscount ratePerpetuitygrowth rateLimited Liability Company Cement 23,761 15.0% 1.5% 23,761 15.0% 1.5%EPOS - Empresa Portuguesa de Obras Subterrâneas, S.A. 12,107 9.5% 3.0% 12,107 9.5% 3.0%C+P.A. - Cimento e Produtos Associados, S.A. 7,806 5.0% 1.5% 7,806 5.0% 1.5%Digal - Distribuição e Comércio, S.A. 6,163 8.1% 1.5% 5,986 6.8% 1.5%Karibib Portland Cement (PTY) 5,833 11.5% 1.5% 5,833 11.5% 1.5%Bonaparte - Imóveis Comerciais e Participações, S.A. 1,979 5.5% 1.5% 1,979 5.4% 1.5%Auto Competição Angola, Lda. 212 15.0% 1.5% 197 15.0% 1.5%TDSP - Bela Vista Empreendimentos Imobiliários, SPE, Ltda. 46 10.0% 1.5% 41 10.0% 1.5%Petrosório - Combustíveis e Lubrificantes, Lda. - - - 374 6.0% 1.5%57,907 58,08419 - OTHER INTANGIBLE ASSETSDuring the year ended on 31 December 2010, the movements in intangible assets and in their depreciation and accumulated impairment losses were as follows:IndustrialpropertyOtherAdvance payments forintangible assetsTotalGross assets:Balance as at 1 January 2010 14,143 434 6,229 20,806Currency conversion adjustments 255 55 480 790Additions 253 70 1,006 1,329Transfers and write-offs (2,384) 71 (5,728) (8,041)Disposals (1,811) - - (1,811)Balance as at 31 December 2010 10,456 630 1,987 13,073Accumulated depreciation and impairment losses:Balance as at 1 January 2010 10,396 227 - 10,623Currency conversion adjustments 46 50 - 96Transfers and write-offs (7,924) 209 - (7,715)Reinforcements 535 144 - 679Uses (2) - - (2)Balance as at 31 December 2010 3,051 630 - 3,681Net value:As at 31 December 2010 7 405 - 1 987 9 392177

Notes to the Consolidated Financial Statements as at 31 December 201020 - TANGIBLE FIXED ASSETSDuring the year ended on 31 December 2010, the movements occurred in the tangible fixed assets, as well as in the respective accumulated depreciation and impairmentlosses, were as follows:Land andnaturalresourcesBuilding andotherconstructionsBasicequipmentTransportequipmentTools andutensilsAdministrativeequipmentOther tangiblefixed assetsTangiblefixed assetsin progressAdvancepayments fortangible fixedassetsGross assets:Balance as at 1 January 2010 52,627 276,358 335,826 61,502 35,447 33,946 20,858 69,657 320 886,541Currency conversion effect 378 12,557 6,158 3,165 332 1,406 1,588 4,512 29 30,125Additions 393 3,843 44,518 5,048 892 1,158 10,088 38,082 10 104,032Transfers and write-offs (15,002) 52,884 4,036 3,057 (632) 1 (22,681) (39,113) (349) (17,799)Disposals (126) (1,092) (6,358) (2,471) (39) (202) (306) (469) - (11,063)Balance as at 31 December 2010 38,270 344,550 384,180 70,301 36,000 36,309 9,547 72,669 10 991,836TotalAccumulated depreciationand impairment losses:Balance as at 1 January 2010 164 73,103 231,311 34,370 28,175 25,288 3,545 - - 395,956Currency conversion effect - 2,617 5,681 977 132 998 65 - - 10,470Reinforcements - 10,975 31,538 10,572 1,626 2,363 1,272 - - 58,346Transfers and write-offs - (26) 1,779 42 154 125 (734) - - 1,340Disposals - (345) (5,011) (1,623) (33) (162) (2) - - (7,176)Balance as at 31 December 2010 164 86,324 265,298 44,338 30,054 28,612 4,146 - - 458,936Net value:As at 31 December 2010 38,106 258,226 118,882 25,963 5,946 7,697 5,401 72,669 10 532,900The additions to tangible fixed assets held for the year ended on 31 December 2010 refer mainly to investments in facilities and equipment.As at 31 December 2010 the tangible assets in progress include EUR 67,974 thousand relative to buildings and other constructions in progress, in particular the following:- Development of the Tancagem project in Aveiro;- Expansion of the network of “Cash & Carry” shops in Angola;- Construction of Hotel Baía, a four star Hotel in Luanda Sul – Angola;- Construction of two buildings integrated in Empreendimento Lagoas Park;21 - INVESTMENT PROPERTIESDuring the year ended on 31 December 2010, the movement which occurred in investment property was as follows:2010Balance as at 1 January 492,066Currency conversion adjustments 5,164Increases / disposals 2,968Change in fair value (Notes 8 and 13) 10,428Transfer of tangible assets (1,110)Balance as at 31 December 509,516178

Notes to the Consolidated Financial Statements as at 31 December 2010The income gained from investment properties arising from operating leasing contracts amounted to EUR 25,834 thousand in the year ended on 31 December 2010. Operatingcosts directly related to investment properties reached EUR 6,569 thousand in the year ended on 31 December 2010.The fair value of each investment property in operation is periodically determined through valuation, in some cases by an independent appraiser and in accordance withgenerally accepted valuation criteria for the real estate market, including income, comparative market value or replacement cost methods, depending on the specific situationof each property.In the remaining cases, the determination of the market value is carried out internally, based on criteria similar to those considered by external evaluators, taking into accountthe expected discounted cash flows.The main assumptions and methods inherent to the evaluations supporting the market value of the investment properties are as follows:- Yield between 7% and 10%;- Average of the comparative method and income multiples;- Average of the comparative method and cost.IAS 40 - Investment property ("IAS 40") does not require the determination fair value of investment properties on the basis of a valuation made by an independent evaluator.However, approximately 85% of the fair value of the Group's investment properties is determined through independent evaluators with significant and recognisedprofessional qualification (registered at the CMVM) and with recent experience in the location and category of the valued investment property. These evaluators have appliedmethods currently used in this market, based on the use of the income method, replacement cost method or market price comparisons, according to the specific situations ofeach property. In this case, considering that the assets are leased, the income method was used, but also taking into account the other methods used to assess the reasonablenessof the results achieved through this method. According to this method, the income of the current leasing contracts under the current conditions was used and, once theyear of these contracts had ended, a yield adapted to each property was used. For the rest of the evaluations carried out internally, yields adapted according to the indicationsgiven by independent professionals were used.22 - INVESTMENTS IN ASSOCIATED COMPANIESThe following associated companies were recorded through the equity method as at 31 December 2010:Corporate nameHead officePercentageshareholdingALVORADA PETRÓLEO, S.A. Rua Major Lopes, 800, 3º andar 35.87%Belo Horizonte - Minas Gerais - BrasilALSOMA, GEIE. 3 Av André Malraux 27.00%Levallois PeretARENOR, S.L. Calle Monte Carmelo, nº 1, 5ºC 25.26%SevilleAVIA PORTUGAL - Produtos Petrolíferos, S.A. Edifício 1, Lagoas Park 21.14%Porto SalvoCIMPOR MACAU Investment Company, S.A. (a) Av. da Praia Grande, nº 693, Edifício Tai Wah, 15º andar 13.00%MacauIMOC - Empreendimentos Imobiliários, S.A.R.L. Av. 24 de Julho, 135 46.40%MaputoRPK Gulfstream, Ltd. (a) Tri Ruchja str. 8.74%183003, MurmanskSCP AK10 - Empreendimentos e Participações SPE Ltda. Avenida Alameda Santos, nº 960 - 19º, 25.00%Edifício CYK, Cerqueira César, São PauloSTELGEST - Gestão Hoteleira, S.A. Edifício 2, Lagoas Park 45.00%Porto SalvoTRAVERSOFER - Industrie et Service 27, Cheminndu Réservoir, Hydra, Algiers, 30.00%Ferroviaire, S.A.R.L.Algeria(a) Through its subsidiary C +P.A. - Cimento e Produtos Associados, S.A.179

Notes to the Consolidated Financial Statements as at 31 December 2010The investments in associated companies showed the following movements in the year ended on 31 December 2010:Holdings Goodwill TotalBalance as at 1 January 2010 470,746 506,450 977,196Effects of the application of the equity method:- Effect on net income for the year (Note 14) 9,460 - 9,460- Effect on equity 2,830 - 2,830- Dividends received (2,101) - (2,101)Increases 980 - 980Disposals (421,052) (482,108) (903,160)Currency conversion adjustments 2,557 1,034 3,591Transfers (551) (493) (1,044)Other 361 - 361Balance as at 31 December 2010 63,230 24,883 88,113As indicated in Note 14, in the year ended on 31 de December 2010, the Group sold its entire state in Cimpor - Cimentos de Portugal, SGPS, S.A. for the amount of EUR 968,32thousand (Note 29), having recorded capital gains of EUR 71,183 thousand (Note 14).Investments in associated companies as at 31 December 2010 and 2009 are broken down as follows:2010 2009Associated companies Holdings Goodwill Book value Holdings Goodwill Book valueArenor, S.L. 26,718 16,033 42,751 30,187 16,033 46,220Alvorada Petróleos, S.A. 20,113 8,777 28,890 12,237 7,751 19,988Cimpor Macau Investment Company, S.A. 9,424 - 9,424 10,332 - 10,332IMOC - Empreendimentos Imobiliários, S.A.R.L. 5,854 - 5,854 4,719 - 4,719SCP AK-10 Empreendimentos e Participações SPE LTDA. 380 73 453 1,425 65 1,490RPK Gulfstream Ltd. 430 - 430 - - -Concessionária de Rodovias TEBE, S.A. - - - 4,399 - 4,399ISA - Intelligent Sensing Anywhere, S.A. - - - 675 493 1,168Infraenge Construções, Ltda. - - - 312 - 312Cimpor - Cimentos de Portugal, SGPS, S.A. - - - 405,804 482,108 887,912Other 311 - 311 656 - 65663,230 24,883 88,113 470,746 506,450 977,196180

Notes to the Consolidated Financial Statements as at 31 December 2010These holdings are recorded through the equity method which, in the year ended on 31 December 2010, had the following impacts:Associated companiesGains and losses inassociate companies(Note 14)Adjustments ofholdingsDividendsTotalCimpor - Cimentos de Portugal, SGPS, S.A. 9,237 - - 9,237Arenor, S.L. (704) (2,765) - (3,469)Alvorada Petróleos, S.A. 666 4,574 (4) 5,236Cimpor Macau Investment Company, S.A. (2,049) 1,141 - (908)Concessionária de Rodovias TEBE, S.A. 724 (233) - 491Infraenge Construções, Ltda. 109 (3) - 106IMOC - Empreendimentos Imobiliários, S.A.R.L. 771 364 - 1,135SCP AK-10 Empreendimentos e Participações SPE LTDA. 742 81 (2,097) (1,274)ISA - Intelligent Sensing Anywhere, S.A. 47 (168) - (121)Other (83) (161) - (244)9,460 2,830 (2,101) 10,189The main financial information relative to the associated companies as at 31 December 2010 and 2009 is as follows:Total assets Total liabilities Total net assetsShare of the Group innet assets2010 2009 2010 2009 2010 2009 2010 2009Alvorada Petróleos, S.A. 50,768 26,867 7,346 6,576 43,422 20,291 20,113 12,237ARENOR, S.L. 59,699 70,732 24,455 28,346 35,244 42,386 26,718 30,187CIMPOR - Cimentos de Portugal, SGPS, S.A. - 4,927,362 - 3,096,859 - 1,830,503 - 405,804Cimpor Macau Investment Company, S.A. 185,060 140,057 181,507 132,873 3,553 7,184 9,424 10,332Concessionária de Rodovias TEBE, S.A. - 30,608 - 17,409 - 13,199 - 4,399IMOC - Empreendimentos Imobiliários, S.A.R.L. 15,132 10,553 2,515 382 12,617 10,171 5,854 4,719INFRAENGE Construções, Ltda. - 1,612 - 675 - 936 - 312ISA - Intelligent Sensing Anywhere, S.A. - 5,502 - 4,113 - 1,389 - 675SCP AK-10 Empreendimentos e Participações SPE LTDA. 4,861 7,612 3,342 1,911 1,519 5,701 380 1,425Outros 2,268 4,119 2,165 3,602 103 517 741 656317,788 5,225,024 221,330 3,292,746 96,458 1,932,277 63,230 470,746Sales andservices renderedNet incomefor the yearShare of the Group in netincome for the yearAlvorada Petróleos, S.A. 3,344 1,411 666ARENOR, S.L. - (1,449) (704)CIMPOR - Cimentos de Portugal, SGPS, S.A. a) a) 9,237Cimpor Macau Investment Company, S.A. - (8,196) (2,049)Concessionária de Rodovias TEBE, S.A. a) a) 724IMOC - Empreendimentos Imobiliários, S.A.R.L. - 1,660 771INFRAENGE Construções, Ltda. a) a) 109ISA - Intelligent Sensing Anywhere, S.A. b) b) 47SCP AK-10 Empreendimentos e Participações SPE LTDA. 8,934 2,968 742Other 1,622 (201) (83)13,900 (3,807) 9,460181

Notes to the Consolidated Financial Statements as at 31 December 2010a) During the year ended on 31 December 2010, this holding was sold.b) As a result of the classification of this investment as a non-current asset held for sale, the application of the equity method was interrupted and the asset was re-classified to this heading of theconsolidated statement of the Financial Position, being measured by the lowest value between the estimated net value of sale and its book value on that date.23 - JOINT VENTURESAs at 31 December 2010, the following subsidiaries were consolidated through the proportional method, since their management and control are exercised jointly with theother partners/shareholders:Corporate nameHead officePercentageshareholdingAVIAS - Grupo Ferroviário para a Alta Velocidade, ACE Edifício 1, Lagoas Park 14.10%Porto SalvoCAIS DE CRUZEIROS 2ª FASE, ACE Rua da Tapada da Quinta de Cima 15.00%Linhó – SintraCONBATE, ACE Edifício 2, Lagoas Park 20.00%Porto SalvoDOURO LITORAL, ACE Edifício 8, Lagoas Park 40.00%Porto SalvoD.L.O.E.A.C.E. – Douro Litoral Obras Especiais, ACE Edifício 2, Lagoas Park 40.00%Porto SalvoENGIL/MOTA/TEIXEIRA DUARTE – Requalificações Urbanas, ACE Av. Fabril do Norte, 1601 33.33%MatosinhosFERROVIAL/TEIXEIRA DUARTE - Obras Hidráulicas do Alqueva, ACE Edifício Central Park 50.00%Rua Alexandre Herculano, Nº 3, 2º - Linda-a-VelhaGMP – Grupo Marítimo Português, ACE Edifício 1, Lagoas Park 20.04%Porto SalvoGMP – Grupo Marítimo Português MEK, ACE Edifício 1, Lagoas Park 20.04%Porto SalvoGPCC - Grupo Português de Construção de Rua Senhora do Porto, 930 25.00%Infraestruturas de Gás Natural, ACEPortoGPCIE - Grupo Português de Construção de Edifício Sagres 25.00%Infraestruturas da Expo, ACERua Professor Henrique de Barros, nº 4, 2 A - Prior VelhoMETROLIGEIRO - Construção de Infraestruturas, ACE Estrada da Luz, 90 - 6º E 26.80%LisbonMETROPAÇO - Trabalhos de Construção da Estação do Av. das Forças Armadas, 125 - 2º D 33.33%Metropolitano do Terreiro do Paço, ACELisboaNOVA ESTAÇÃO, ACE Av. Frei Miguel Contreiras, nº 54, 7º 25.00%LisbonSOMAFEL E OFM - Obras do Metro, ACE Edifício 1, Lagoas Park 60.00%Porto SalvoSOMAFEL/FERROVIAS, ACE Av. Columbano Bordalo Pinheiro, 93 - 7º 36.00%LisbonTEIXEIRA DUARTE - SOPOL - Metro Superfície, ACE Edifício 2, Lagoas Park 57.30%Porto SalvoTEIXEIRA DUARTE/OPCA - Fungere - Parcela 1.18 do Edifício 2, Lagoas Park 60.00%Parque das Nações em Lisboa - 3ª Fase – EmpreitadaPorto Salvode Acabamentos e Instalações Especiais dos Edifíciospara o Hotel e Escritórios, ACETRÊS PONTO DOIS - Trabalhos Gerais de Construção Av. das Forças Armadas, 125 - 2º C 50.00%Civil, Via e Catenária de Modernização da Linha do Norte, ACELisbon182

Notes to the Consolidated Financial Statements as at 31 December 2010As a result of the consolidation of these subsidiaries through the proportional consolidation method, as at 31 December 2010 and 2009, the following amounts were includedin the consolidated financial statements of the Group:Current assets Non-current assets Current liabilities Non-current liabilities2010 2009 2010 2009 2010 2009 2010 2009ACESTRADA - Construção de Estradas, ACE - 113 - - - 2 - -CAIS DOS CRUZEIROS - 2ª Fase, ACE 1,361 1,679 - - 620 1,064 27 -CONBATE, ACE 2,613 1,736 4 5 2,319 889 28 813DOURO LITORAL, ACE 40,419 30,571 343 27 39,067 27,953 - 1,934DOURO LITORAL OBRAS ESPECIAIS, ACE 6,782 3,576 106 130 4,391 3,493 - -ENGIL/MOTA/TEIXEIRA DUARTE - Requalificações Urbanas, ACE 34 22 - - 34 22 - -FERROVIAL / TEIXEIRA DUARTE - Obras Hidráulicas do Alqueva, ACE 114 191 - 5 208 420 - -GMP - Grupo Maritimo Português, ACE 2,120 1,933 37 70 2,590 1,957 - -GMP – Grupo Marítimo Português MEK, ACE 802 65 23 8 819 68 - -GPCC - Grupo Português de Construção de Infraestruturas deGás Natural, ACE 75 71 - - 75 71 - -GPCIE - Grupo Português de Construção de Infraestruturas da Expo, ACE 37 30 - - 37 30 - -METROLIGEIRO - Construção de Infraestruturas, ACE 538 4,059 - 4 538 4,063 - -METROPAÇO - Trabalhos de Construção da Estação doMetropolitano do Terreiro do Paço, ACE 185 186 - - 185 186 - -NOVA ESTAÇÃO, ACE 2,399 1,966 26 8 2,426 1,305 - -SOMAFEL E OFM - Obras do Metro, ACE 46 46 - - 46 46 - -Somafel/Ferrovias, ACE 192 71 - 16 60 23 - -TEIXEIRA DUARTE/OPCA - Fungere - Parcela 1.18 do Parque dasNações em Lisboa - 3ª Fase - Empreitada de Acabamentose Instalações Especiais dos Edifícios para o Hotel e Escritórios, ACE 61 102 - - 58 102 3 -TEIXEIRA DUARTE - SOPOL - Metro Superfície, ACE 210 348 - 4 210 352 - -TEISOMAR - Obras Marítimas, ACE - 1 - - - - - -TRÊS PONTO DOIS - Trabalhos Gerais de Construção Civil, Via eCatenária de Modernização da Linha do Norte, ACE 604 529 - - 276 378 - -58,592 47,295 539 277 53,959 42,424 58 2,747183

Notes to the Consolidated Financial Statements as at 31 December 2010As a result of the consolidation of these subsidiaries through the proportional consolidation method, in the year ended on 31 December 2010, the following amounts wereincluded in the consolidated financial statements of the Group:IncomeCostsCAIS DOS CRUZEIROS - 2ª Fase, ACE 2,696 1,982CONBATE, ACE 6,662 6,392DOURO LITORAL, ACE 144,824 144,376DOURO LITORAL OBRAS ESPECIAIS, ACE 14,977 12,503ENGIL/MOTA/TEIXEIRA DUARTE - Requalificações Urbanas, ACE 11 11FERROVIAL / TEIXEIRA DUARTE - Obras Hidráulicas do Alqueva, ACE 116 34GMP - Grupo Maritimo Português, ACE 1,167 1,655GMP – Grupo Marítimo Português MEK, ACE 718 711GPCC - Grupo Português de Construção de Infraestruturas de Gás Natural, ACE 4 4GPCIE - Grupo Português de Construção de Infraestruturas da Expo, ACE 11 11METROPAÇO - Trabalhos de Construção da Estação do Metropolitano do Terreiro do Paço, ACE 9 9NOVA ESTAÇÃO, ACE 9,895 9,895Somafel/Ferrovias, ACE 166 75TEIXEIRA DUARTE/OPCA - Fungere - Parcela 1.18 do Parque dasNações em Lisboa - 3ª Fase - Empreitada de Acabamentose Instalações Especiais dos Edifícios para o Hotel e Escritórios, ACE 52 52TEIXEIRA DUARTE - SOPOL - Metro Superfície, ACE 36 36TRÊS PONTO DOIS - Trabalhos Gerais de Construção Civil, Via eCatenária de Modernização da Linha do Norte, ACE 344 167181,688 177,913Included in the information indicated in Note 41, the Group had provided bank guarantees, fidelity guarantee insurance and letters of comfort as an entrepreneur in these joint venturesto the total value of EUR 37,688 thousand as at 31 December 2010 (EUR 38,557 thousand as at 31 December 2009).24 - FINANCIAL ASSETS AVAILABLE FOR SALEDuring the year ended on 31 December 2010, the movements which occurred in the valuation of the financial assets available for sale, recorded at their respective fair value,were as follows:2010Fair value as at 1 January 284,880Acquisitions during the period 16,495Decrease in fair value (93,155)Fair value as at 31 December 208,220The acquisitions made during the year refer to the purchase of 19,510,136 shares of Banco Comercial Português, S.A. for the value of EUR 13,612 thousand and the purchase of 427,130shares of Banco Bilbao Vizcaya Argentaria, S.A. for the value of EUR 2,883 thousand (Note 29).The decrease in the fair value of the financial assets available for sale in the year ended on 31 December 2010 includes the reversal of previously recognised fair value reserves, whichwere directly recorded in equity, and the recognition of a loss in the net income for the year of EUR 75,307 thousand (Note 14).As at 31 December 2010 and 2009, the Group owned 324,500,000 and 304,989,864 shares in Banco Comercial Português, S.A., respectively.184

Notes to the Consolidated Financial Statements as at 31 December 2010The financial assets available for sale and their respective cost and market values, as at 31 December 2010 and 2009, were as follows:2010 2009Cost value Market value Cost value Market valueBanco Comercial Português, S.A. 738,282 188,859 724,670 257,716Banco Bilbao Vizcaya Argentaria, S.A. 35,958 19,361 33,075 27,164774,240 208,220 757,745 284,880Furthermore, during the year ended on 31 December 2010 dividends were received from these investments amounting to EUR 6,499 thousand which were recognised in the incomestatement for the year ended on that date (Note 14).25 - OTHER INVESTMENTSAs at 31 December 2010 and 2009, this item includes investments in the following entities:Non-currentCurrent2010 2009 2010 2009Financial assets available for sale at cost a)LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. 5,456 5,456 - -AUREON LABORATORIES 1,571 1,524 - -AEDL - Auto Estradas do Douro Litoral, S.A. 1,198 381 - -LONGAPAR - Sociedade Gestora de Participações Sociais, S.A. 1,006 1,006 - -JÚPITER - Indústria Hoteleira, S.A. 784 784 - -LONGAVIA, S.A. 670 670 - -MTS - Metro Transporte do Sul, S.A. 589 589 - -ISQ - Centro Incubação Empresas, S.A. 440 440 - -MATADOURO DE MACAU, S.A.R.L. 317 317 - -EIA - Ensino, Investigação e Administração, S.A. 300 300 - -VSL Sistemas Portugal - Pré-Esforço, Equipamento e Montagens, S.A. 258 258 - -ILTA - Urbanizadora da Ilha de Tavira, S.A. 256 256 - -CPM - Companhia de Parques de Macau, S.A.R.L. 205 205 - -SQUIRREL INVESTMENTS - 612 - -Other 194 751 - -13,244 13,549 - -Financial assets available for sale at fair valueBanco Bilbao Vizcaya Argentaria, S.A. - - 7,053 -13,244 13,549 7,053 -a) This heading essentially includes investments in equity instruments that do not have a market price listed in an active market and whose fair value cannot be measured reliably. These investmentsare measured at their acquisition cost minus any accumulated impairment losses.Furthermore, during the year ended on 31 December 2010 dividends were received from these investments amounting to EUR 1,773 thousand which were recognised in theincome statement for the year ended on that date (Note 14).185

Notes to the Consolidated Financial Statements as at 31 December 201026 - DEFERRED TAXESAll situations which could significantly affect future taxes are recorded by applying the rules on deferred taxes.During the year ended on 31 December 2010, the movements which occurred in deferred tax assets and liabilities, in accordance with the temporary differences whichgenerated them, are as follows:ConstitutionReversalOpeningbalanceNet income(Note 15)Equity(Note 15)Net income(Note 15)Equity(Note 15)Currencyconversioneffect andadjustmentsClosingbalanceDeferred tax assets:Inventory impairment 20 32 - (18) - - 34Doubtful debt impairment 422 794 - (447) (679) - 90Financial assets available for sale 48,724 9,966 3,868 - - - 62,558Tax losses carried forward 31,624 15,425 - (3,779) - (8,817) 34,453Investment properties 3,673 3 - (8) - (3,581) 87Provision for losses in works 1,180 - 311 (1,128) - - 363Other 13,220 255 3,958 (5,706) - 2,738 14,46598,863 26,475 8,137 (11,086) (679) (9,660) 112,050Deferred tax liabilities:Future taxable earnings 1,481 2,684 2,070 - - - 6,235Suspended taxation on capital gains 4,918 - 2 (4,920) - - -Investment properties 49,162 9,032 - (2,268) - (2,393) 53,533Revaluation of tangible fixed assets 8,205 - 36 (647) - (1,057) 6,537Other 3,065 363 - (600) (30) (552) 2,24666,831 12,079 2,108 (8,435) (30) (4,002) 68,551According to the tax returns of the companies that recorded deferred tax assets due to tax losses as at 31 December 2010 and 2009, they were carried forward as follows:Tax loss2010 2009Deferred taxassetsDeadline foruseTax lossDeferred taxassetsDeadline foruseGenerated in 2004 - - 2010 737 178 2010Generated in 2005 457 112 2011 23 6 2011Generated in 2006 27,843 6,947 2012 28,136 7,029 2012Generated in 2007 42,676 10,665 2013 45,794 11,645 2013Generated in 2008 3,022 421 2014 11,611 2,391 2014Generated in 2009 32,155 7,556 2015 46,640 10,375 2015Generated in 2010 25,671 8,752 2014 - - 2014131,824 34,453 132,941 31,624186

Notes to the Consolidated Financial Statements as at 31 December 2010Furthermore, as at 31 December 2010 and 2009, the tax losses and credits for which no deferred tax assets were recorded as a precaution, can be broken down as follows:Tax loss2010 2009Tax creditDeadline foruseTax lossTax creditDeadline foruseGenerated in 2004 - - 2010 754 184 2010Generated in 2005 3,416 854 2011 2,884 717 2011Generated in 2006 2,839 710 2012 2,848 709 2012Generated in 2007 3,219 805 2013 3,214 801 2013Generated in 2008 3,447 862 2014 3,451 857 2014Generated in 2009 3,374 843 2015 3,373 840 2015Generated in 2010 3,052 763 2014 - - 201419,347 4,837 16,524 4,108Deferred tax assets were only recorded insofar as it is considered that taxable profits are likely to occur in the future which may be used to recover tax losses or deductible tax differences.This assessment was based on the periodically reviewed and updated business plans of the Group companies, and on available and identified tax planning opportunities.27 - CUSTOMERS AND OTHER RECEIVABLESAs at 31 December 2010 and 2009, this heading had the following composition:CurrentNon-current2010 2009 2010 2009Customers:Customers current account 441,277 317,632 79,033 61,051Customers - receivables on trading activity 13,432 14,298 - -Customers - doubtful debts 36,210 39,112 - -490,919 371,042 79,033 61,051Impairment losses (53,311) (39,305) - -437,608 331,737 79,033 61,051Other receivables:Employees 531 734 - -Other receivables 59,795 46,794 78 43060,326 47,528 78 430Impairment losses (3,743) (3,707) - (20)56,583 43,821 78 410During the year ended on 31 December 2010 and 2009, the movements which occurred in the impairment of receivables were as follows:Accumulated impairment losses on customers and other receivables:Balance as at 1 January 2010 43,032Currency conversion adjustments 923Reinforcements (Note 13) 14,606Reversals (Note 8) (2,595)Adjustments 1,088Balance as at 31 December 2010 57,054The Group's exposure to credit risk (Note 42) is attributable to the accounts receivable from its operating activity. The balances shown in the statement of the financial187

Notes to the Consolidated Financial Statements as at 31 December 2010position are net of impairment losses arising from bad debt which were estimated by the Group in accordance with its experience and based on its assessment of the economicsituation and environment.The Board of Directors believes that the book value of the accounts receivable is close to their fair value.The Group has no significant concentration of credit risks, since it is diluted over a wide range of customers and other debtors.28 - RELATED PARTIESThe transactions and balances between the companies of the Group included in the consolidation perimeter, which are related parties, are eliminated in the consolidationprocess and are not disclosed in the present note. The balances and transactions between the Group and the associated, related and individual companies with significantvoting power which have their own companies, are detailed below.The terms or conditions practiced between the Group and the related parties are, in substance, identical to those which would normally be contracted, accepted and practicedbetween independent entities in comparable operations.The main balances with related parties as at 31 December 2010 and 2009 can be broken down as follows:Balances receivable Balances payableLoansgrantedOther debts2010 2009 2010 2009 2010 2009 2010 2009Agrepor Agregados - Extracção Inertes, S.A. - 32 - - - - - -ALSOMA, GEIE - - 24 - - - - -ALVORADA PETRÓLEO, S.A. - - - - - 2,838 - -AVIA PORTUGAL, S.A. - - 31 - - - - -Promociones Inmobiliárias 3003, C.A. - - - - - - (55) -EIA - Ensino de Investigação e Administração, S.A. - - - - - - (324) -Cimpor - Industria de Cimentos, S.A. - 136 - 16 - - - -Cimpor Betão - Industria de Betão, S.A. - - - 23 - - - -CINTEL - Construção Interceptor Esgotos, S.A. 46 - - 3 - -IMOC - Empreendimentos Imobiliários, S.A.R.L. 2,349 - - - - - (247) (247)ISA - Intelligent Sensing Anywhere, S.A. - - 15 53 65 65 - -Cimpor Macau Investment Company, S.A. - - - - 8,536 8,536 - -STELGEST - Gestão Hoteleira, S.A. 27 32 - - 8 237 (716) (381)TRAVERSOFER - Industrie et Service Ferroviaire, SARL 6 5 - - - - - -2,428 205 70 92 8,612 11,676 (1,342) (628)The main transactions carried out in the year ended on 31 December 2010 with related entities were as follows:Sales and Purchases andservices rendered services obtainedInterestdebitedAlsoma, GEIE. - 24 -AVIA PORTUGAL, S.A. - 30 -ISA - Intelligent Sensing Anywhere, S.A. - 48 -STELGEST - Gestão Hoteleira, S.A. 121 1 21TRAVERSOFER - Industrie et Service Ferroviaire, SARL 1 - 1VSL Sistema de Pré-Esforço - Equipamento de Montagem, S.A. 110 74 -232 177 22188

Notes to the Consolidated Financial Statements as at 31 December 2010The remunerations attributed to the members of the governing bodies of Teixeira Duarte, S.A., in the year ended on 31 December 2010 were as follows:2010Executive Directors: (a)Short term benefits 1,695Long term benefits -Supervisory Board:Short term benefits 33Chartered Accountant:Short term benefits 401,768(a) Values paid by TD-ECThe remunerations attributed to the senior management members of TD-EC in the year ended on 31 December 2010 were as follows:2010Senior Management:Short term benefits 7,004Long term benefits -7,00429 - NOTES TO THE CONSOLIDATED CASH FLOW STATEMENTCash and cash equivalentsAs at 31 December 2010 and 2009, this heading had the following composition:2010 2009Demand deposits 92,794 110,888Term deposits 42,339 15,236Other cash investments - 1Cash 2,704 5,926137,837 132,051The cash and cash equivalents heading comprises cash, deposits repayable on demand, cash investments and term deposits with a maturity of less than three months, andfor which the risk of change in value is insignificant.Cash flow from investment activitiesThe receipts derived from financial investments in the year ended on 31 December 2010 refer to the disposal of holdings in the following entities:2010CIMPOR - Cimentos de Portugal, SGPS, S.A. 968,332Banco Bilbao Vizcaya Argentaria, S.A. 33,394Concessionária de Rodovias TEBE, S.A. 13,572INFRAENGE Construções, Ltda. 4051,015,703189

Notes to the Consolidated Financial Statements as at 31 December 2010The payments relative to the financial investments in the year ended on 31 December 2010 refer to the acquisition of holdings in the following entities:2010Banco Bilbao Vizcaya Argentaria, S.A. 40.440Banco Comercial Português, S.A. 13.612IMOPEDROUÇOS - Sociedade Imobiliária, S.A. 3.500Alvorada Petróleos, S.A. 979DIGAL - Distribuição e Comércio, S.A. 665Other 9859.294Dividends received in the year ended on 31 December 2010 were as follows:2010Banco Comercial Português, S.A. 5.794SCP AK-10 Empreendimentos e Participações SPE, Ltda. 2.097LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. 1.029Banco Bilbao Vizcaya Argentaria, S.A. 879Other 57310.37230 - OTHER CURRENT AND NON-CURRENT ASSETSAs at 31 December 2010 and 2009, the other current and non-current assets had the following composition:CurrentNon-current2010 2009 2010 2009State and other public bodies:Value Added Tax 12.470 11.003 - -Associated companies, subsidiaries and other shareholders:Associated companies 1.741 873 4 4Subsidiaries 2.198 40 932 932Other shareholders 390 39 47 1014.329 952 983 1.037Accrued income:Interest receivable 15.284 7.270 - -Values to be invoiced 96.721 37.321 - -Other accrued income 6.310 12.565 12.139 9.140118.315 57.156 12.139 9.140Deferred costs:Insurance paid in advance 2.117 2.505 - -Interest payable 17 107 - -Other deferred costs 8.607 14.235 353 79010.741 16.847 353 790Other assets:Advances to suppliers 12.855 29.292 - -158.710 115.250 13.475 10.967190

Notes to the Consolidated Financial Statements as at 31 December 201031 - BUILDING CONTRACTSIn the year ended on 31 December 2010, the costs and income recognised for building contracts in progress are as follows:2010Net income:Issued invoices 768,839Change in:- Deferred income - works (Note 39) (27,825)- Accrued income - works 19,461760,475Net costs:Invoiced costs 731,158Change in:- Provisions for guarantees (Note 36) (1,446)- Provisions for future losses (Note 36) 5,639735,351Calculated earnings (Note 7) 25,124Furthermore, as at 31 December 2010, the deductions made by customers on building contracts amounted to EUR 170 thousand.32 - SHARE CAPITALAs at 31 December 2010, the underwritten and paid-up share capital was represented by 420,000,000 shares with the nominal value of 1 Euro each (287,880,799 shares at1 Euro each as at 31 December 2009).As mentioned in the Introductory Note, in the year ended on 31 December 2010, TD,SA increased its share capital by EUR 132,119,201, corresponding to 132,119,201 shares.The increase was carried out by the integration of 132,119,201 shares of TD-EC, under the Public Exchange Offer conducted.As at 31 December 2010, TDG - Sociedade Gestora de Participações Sociais, S.A. directly owned 154,640,240 shares representing the share capital of Teixeira Duarte, S.A.,corresponding to 36.82% of the respective share capital (53.42% as at 31 December 2009).33 - RESERVES AND RETAINED EARNINGSLegal reserve: In accordance with current legislation, the Company is obliged to transfer at least 5% of its annual net profit to the legal reserve, until it reaches a minimum of20% of the capital. This reserve is not distributable to shareholders, but may be used to absorb losses, after all other reserves have been exhausted, or to increase the capital.Fair value reserve: The fair value reserve represents the difference between the cost value and market value of the financial assets available for sale, not yet recognised in theincome statement.Free reserves: Free reserves are available for distribution.Reserve of hedging operations: As described in Note 2.16 g), the reserve of hedging operations reflects the effective component (net of the tax effect) of the changes in thefair value of the derivative financial instruments classified as cash flow hedges.191

Notes to the Consolidated Financial Statements as at 31 December 201034 - NON-CONTROLLED INTERESTSThe movements of this heading during the year ended on 31 December 2010 were as follows:2010Opening balance 226,767Change arising from currency conversion 3,438Dividends (1,319)Share capital increase (132,119)Other changes in the equity of the subsidiaries (1,269)Net income for the year attributable to non-controlled interests (7,014)Closing balance 88,48435 - LOANSAs at 31 December 2010 and 2009, the loans obtained were as follows:2010 2009Non-current liabilities:Bank loans a) 207,258 707,447Commercial paper b) 490,403 784,913697,661 1,492,360Current liabilities:Bank loans a) 401,318 532,018Commercial paper b) 105,647 100,414506,965 632,4321,204,626 2,124,792a) Bank loansAs at 31 December 2010 and 2009, the internal bank loans, bank overdrafts and secured current accounts earned interest at the weighted annual average rate of 2.22%(3.08% as at 31 December 2009).As at 31 December 2010, the most significant bank loans contracted by the Group essentially correspond to:- Loan raised from Banco Bilbao Vizcaya Argentaria, contracted on 16 April 2007 of the value of EUR 63,300 thousand, which will be repaid on 16 March 2012.- Loan raised from Caixa Banco de Investimento, S.A. and Caixa Geral de Depósitos, S.A., contracted on 21 February 2008 of the current value of EUR 50,951 thousand, which willbe repaid in 46 equal and successive instalments, ending on 10 December 2033.- Loan raised from Banco Caixa Geral, contracted on 11 February 2008 the value of EUR 19,820 thousand, which will fall due on 11 February 2013.- Loan raised from Banco Espírito Santo (London), contracted on 28 March 2008 of the value of EUR 14,967 thousand, which will fall due on 28 March 2011.- Loan raised from Banco Popular Portugal, contracted on 31 October 2008 of the value of EUR 5,195 thousand, which will fall due on 31 October 2011.- Loan raised from Banco Popular Portugal, contracted on 18 December 2008, of the value of EUR 25,000 thousand, which will fall due on 18 December 2011.192

Notes to the Consolidated Financial Statements as at 31 December 2010- Loan contracted by the Group on 30 December 2008 from Caixa Geral de Depósitos, of the current value of EUR 44,335 thousand, which will be repaid in 156 equal and successiveinstalments, ending on 30 December 2023.- Loan raised from Banco Fomento de Angola, contracted on 6 February 2009 of the value of EUR 4,584 thousand, which will fall due on 30 March 2014.- Loan raised from Banco Fomento de Angola, contracted on 6 February 2009 of the value of EUR 2,245 thousand, which will fall due on 30 September 2014.- Loan raised from Banco Fomento de Angola, contracted on 4 March 2009 of the value of EUR 9,121 thousand, which will fall due on 4 January 2014.- Loan raised from Banco BIC, contracted on 27 April 2009 of the value of EUR 8,000 thousand, which will fall due on 27 November 2014.- Loan raised from Banco Fomento de Angola, contracted on 15 May 2009 of the value of EUR 9,121 thousand, which will fall due on 20 April 2013.- Loan raised from Banco Itaú, contracted on 8 June 2009 of the value of EUR 15,368 thousand, which will fall due on 30 March 2014.- Loan raised from Banco BICBANCO, contracted on 15 March 2010 of the value of EUR 4,464 thousand, which will fall due on 18 July 2011.- Loan raised from Banco BICBANCO, contracted on 14 April 2010 of the value of EUR 3,607 thousand, which will fall due on 11 October 2011.- Loan raised from Banco BMG, contracted on 4 November 2010 of the value of EUR 2,931 thousand, which will fall due on 31 August 2011.- Loan raised from Banco Espírito Santo, contracted on 7 November 2010, of the value of EUR 10,000 thousand, which will fall due on 31 May 2011.- Loan raised from BES Investimento, contracted on 14 December 2010 of the value of EUR 4,509 thousand, which will fall due on 1 June 2011.- Loan raised from Banco BMG, contracted on 16 December 2010 of the value of EUR 1,587 thousand, which will fall due on 16 March 2011.As at 31 December 2010 and 2009, bank loans also included secured accounts amounting to EUR 301,518 thousand and EUR 365,589 thousand, respectively.b) Commercial paperAs at 31 December 2010, the Group had negotiated the following commercial paper programmes:- Grouped programme, for the placing and underwriting of private commercial paper contracted with Banco Comercial Português on 14 October 2005, of the total amount ofEUR 150,000 thousand, in which Teixeira Duarte - Engenharia e Construções, S.A. and Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. participate,to the amounts of EUR 15,000 thousand and EUR 135,000 thousand, respectively. The participation of each company in the programme may vary each time the programmeis used, with Teixeira Duarte - Engenharia e Construções, S.A. being required to participate with at least 10% of the total value. Sixteen successive semi-annual issues aretaken out for the total nominal value of the programme and interest is payable semi-annually in arrears at a rate indexed to six-month Euribor plus a spread of 0.875%,with the repayment of the last issue taking place on 14 October 2013.- Grouped programme for the placing and underwriting of private commercial paper contracted on 6 January 2006 with Banco Comercial Português, with the total amountused being EUR 20,750 thousand, in which Teixeira Duarte - Engenharia e Construções, S.A. and Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A.participate, to the amounts of EUR 18,650 thousand and EUR 2,100 thousand, respectively. The participation of each company in the programme may vary each time theprogramme is used, with Teixeira Duarte - Engenharia e Construções, S.A. being required to participate with at least 10% of the total value. The programme has a durationof five years from the contract signing date. Interest is payable semi-annually in arrears and the intervention rate is indexed to one- to six-month Euribor by competitiveauction of 7 to 180 days by direct placement plus 2.25% and determined in accordance with the date of each auction, with the repayment of the last issue taking placeon 6 January 2011.- Grouped programme for the placing and underwriting of commercial paper contracted on 14 February 2006 with Banco Comercial Português, of the total amount of EUR50,000 thousand, in which Teixeira Duarte - Engenharia e Construções, S.A. and Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. participate, tothe amounts of EUR 5,000 thousand and EUR 45,000 thousand, respectively. The participation of each company in each programme may vary each time it is used, withTeixeira Duarte - Engenharia e Construções, S.A. being required to participate with at least 10% of the total value. Sixteen six-monthly and successive issues have beencontracted for the total nominal value of the programme, earning interest on a six-monthly basis in arrears at a rate indexed to the six-month Euribor increased by 0.875%and determined according to the date of the auction, with the repayment of the last issue being on 14 February 2014.193

Notes to the Consolidated Financial Statements as at 31 December 2010- Grouped programme for the placing and underwriting of commercial paper contracted with Banco Espírito Santo de Investimento and Banco Espírito Santo on 21 August2006, of the amount of EUR 100,000 thousand, in which Teixeira Duarte - Engenharia e Construções, S.A. and Teixeira Duarte - Gestão de Participações e InvestimentosImobiliários, S.A. participate, with the entire amount being used by Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A.. The participation of eachcompany in the programme may vary each time it is used. The programme has a duration of five years minus one day from the contract signing date. Interest is payablesemi-annually in advance and the intervention rate is indexed to Euribor for the period of its issuance plus 0.65% and determined in accordance with the date of eachauction.- Grouped programme for the placing and underwriting of commercial paper contracted with Banco Espírito Santo Investimento on 21 April 2008, of the amount of EUR120,000 thousand, in which Teixeira Duarte - Engenharia e Construções, S.A. and Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. participate,with the entire amount being used by Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A.. The participation of each company in each programmemay vary each time it is used. The programme has a duration of five years minus one day from the contract signing date. Interest is payable on the date of repayment ofeach issue and the intervention rate is indexed to Euribor for the period of issue thereof, in force on the second business day preceding each subscription date, plus 0.65%and determined in accordance with the date of each auction.- Grouped programme for the placing and underwriting of commercial paper contracted with Banco Espírito Santo Investimento on 23 December 2008, of the amount of EUR100,000 thousand, currently EUR 60,000 thousand, in which Teixeira Duarte - Engenharia e Construções, S.A. and Teixeira Duarte - Gestão de Participações e InvestimentosImobiliários, S.A. participate, with the entire amount being used by Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A.. The participation of eachcompany in each programme may vary each time it is used. The programme has a duration of five years minus one day from the contract signing date. Interest is payableon the date of repayment of each issue and the intervention rate is indexed to Euribor for the period of issue thereof, in force on the second business day preceding eachsubscription date, plus 0.85% and determined in accordance with the date of each auction.- Commercial paper programme contracted with Banco Comercial Português, S.A. on 18 August 2010, of the amount of EUR 20,000 thousand. The commercial paper is issuedwith maturities of 1, 3 and 6 months and the programme has a duration of 1 year with the possibility of renewal. Interest is payable at a rate indexed to Euribor for the periodof issue thereof, plus 3.45%.- Commercial paper programme contracted with Banco Comercial Português, S.A. on 18 August 2010, of the amount of EUR 25,000 thousand. The commercial paper isissued with maturities of 1, 3 and 6 months and the programme has a duration of 1 year with the possibility of renewal. Interest is payable at a rate indexed to Euribor forthe period of issue thereof, plus 3.45%.- Grouped programme for the placing and underwriting of commercial paper contracted with Caixa Geral de Depósitos on 7 July 2010, of the amount of EUR 70,000 thousand,in which Teixeira Duarte - Engenharia e Construções, S.A and Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. participate, with the entireamount being used by Teixeira Duarte - Engenharia e Construções, S.A. The programme will be reduced to EUR 60,000 thousand on 28 April 2011. The contract falls due 14April 2012. The interest falls due in advance on each subscription date, with the reference rate being indexed to the Euribor for the respective maturity period, in force onthe second business day prior to each subscription date, plus 1,35% and determined in accordance with the date of each auction.- Programme for the placing and underwriting of commercial paper contracted with Banco Espírito Santo on 28 December 2010, of the amount of EUR 34,000 thousand, inwhich Teixeira Duarte - Engenharia e Construções, S.A. participates. The programme may be used during three years, counting as of the contract signing date. The interestis earned in advance on each subscription date, with the intervention rate being indexed to the Euribor for the respective period, in force on the second business day priorto each subscription date, plus 0.85% and determined in accordance with the date of each auction.As a result of the commitment of successive renewal during the financial year of the programme contracts, some existing issues as at 31 December 2010 are classified asnon-current liabilities.The non-current bank loans are repayable in the following years:2010 20092011 - 115,1412012 145,483 726,4112013 397,372 520,6222014 57,887 56,8622015 23,245 4,5262016 and following 73,674 68,798697,661 1,492,360194

Notes to the Consolidated Financial Statements as at 31 December 2010As at 31 December 2010 and 2009, foreign currency financing agreements were expressed in the following currencies:Currency2010 2009Currency Euros Currency EurosAON 2,318,720 18,076 - -BRL 79,638 35,910 31,252 12,444MAD 2,448 217 3,859 340USD 126,081 94,358 176,139 122,258The loans denominated in foreign currency earn interest at market rates and were converted into Euros based on the exchange rate on the balance sheet date.36 - PROVISIONSThe movement in the accumulated reserves during the year ended on 31 December 2010 was as follows:Provision forlegal and taxrisksOther staff costsGuaranteesto customers LawsuitsLosses inworksOther provisionsfor risks andchargesTotalBalance as at 1 January 2010 9,482 4,411 - 107 4,451 1,924 20,375Currency conversion adjustments 1,265 - - - 449 208 1,922Reinforcement - 7,371 2,200 - 8,710 381 18,662Reductions (606) - (77) (43) (3,454) (490) (4,670)Uses - (4,325) - - - (69) (4,394)Transfers 113 8 9,906 (9) 11 (112) 9,917Balance as at 31 December 2010 10,254 7,465 12,029 55 10,167 1,842 41,812Regarding non-current provisions, amounting to EUR 33,357 thousand (EUR 15,083 thousand as at 31 December 2009), the quantity and timing of their outflows will depend on thespecific situations that gave rise to them, some of which are beyond the Group's control, namely the outcome of lawsuits and tax issues.The reinforcements and reductions were made in consideration of:Reinforcements Reductions TotalNet income for the year:Provisions 11,092 (3,746) 7,346Staff costs 7,371 - 7,371External supplies and services - (90) (90)Earnings from associated companies 96 - 96Other operating profits and gains - (606) (606)Equity 103 (228) (125)18,662 (4,670) 13,992195

Notes to the Consolidated Financial Statements as at 31 December 201037 - SUPPLIERS AND OTHER PAYABLESAs at 31 December 2010 and 2009, these headings had the following composition:CurrentNon-current2010 2009 2010 2009Other creditors 44,480 44,574 26,150 25,423SuppliersSuppliers current account 227,519 233,405 - -Fixed assets suppliers 155 1,107 - -227,674 234,512 - -38 - ACCOUNTS PAYABLE UNDER FINANCIAL LEASESAs at 31 December 2010 and 2009, the total net value of assets acquired under finance leases amounted to:2010 2009Land and natural resources 3,324 3,584Buildings and other constructions 230,379 230,029Basic equipment 34,166 16,199Transport equipment 2,861 2,924Tools and utensils 451 52Administrative equipment 220 72Other tangible fixed assets 259 108Fixed assets in progress - 4,305Industrial property 55 -271,715 257,273As at 31 December 2010 and 2009, the present value of the minimum lease payments was due as follows:2010 20092010 - 18,9202011 23,873 17,2212012 20,502 16,5172013 17,802 14,5712014 16,603 13,881After 2014 173,824 171,562252,604 252,672During the year ended on 31 December 2010, the Group contracted a sale and leaseback operation involving the Lagoas Park undertaking, which is essentially recorded as an investmentproperty (Note 21). In order to secure the above operation, the ownership of lots 7, 8, 9, 10, 11, 12, 15, 16 and 23 of that undertaking was transferred (Note 41).The finance lease contracts earn interest at market rates and have defined durations.The financial commitments under lease contracts are secured by the reserve of ownership of the leased assets.196

Notes to the Consolidated Financial Statements as at 31 December 201039 - OTHER CURRENT AND NON-CURRENT LIABILITIESAs at 31 December 2010 and 2009, these headings had the following composition:CurrentNon-current2010 2009 2010 2009State and other public bodies:Corporate Income Tax - IRC 16,830 (1,777) - -Withholding Tax on Income 3,284 2,776 - -Value Added Tax 14,193 11,784 - -Social Security Contributions 4,507 3,210 - -Other 2,741 2,271 - -41,555 18,264 - -Associated companies, subsidiaries and other shareholders:Associated companies 2,245 77 - -Subsidiaries 981 1,264 - -Other shareholders 121 124 25 473,347 1,465 25 47Cost accruals:Insurance payable 110 160 - -Remunerations payable 17,553 19,848 - -Interest payable 2,063 2,521 - -Other costs payable 23,274 18,579 - 1,52943,000 41,108 - 1,529Deferred income:Work invoiced and not executed (Note 31) 52,318 24,493 - -Deferred income from works - warranty period - 5,595 - 7,880Other deferred income 6,447 9,784 1,873 4,54558,765 39,872 1,873 12,425Other:Advances from customers 100,666 101,596 35,819 5,677Advances on account of sales 749 1,387 26 397Derivative financial instruments (Note 40) - - 7,524 4,888101,415 102,983 43,369 10,962248,082 203,692 45,267 24,96340 - DERIVATIVE FINANCIAL INSTRUMENTSAs at 31 December 2010, the Group had contracted a derivative financial instrument to minimise the risks of exposure to changes in interest rate, consisting of an interestrate swap contract.Such instruments are contracted by considering the risks affecting the assets and liabilities and after checking which of the instruments available on the market are the mostappropriate to cover those risks.These operations, the contracting of which is subject to prior approval by the Board of Directors, are permanently monitored, particularly through the analysis of variousindicators regarding these instruments, mainly the trend of their market value and sensitivity of the forecast cash flows and of the actual market value to changes in keyvariables that condition the structures, for the purpose of evaluating their financial effects.Derivative financial instruments are recorded in accordance with the provisions of IAS 39 and measured at fair value, which is based on assessments made by financial institutions.The derivative financial instrument existing as at 31 December 2010 was assessed by an independent company external to the Group through appropriate methodologiesand techniques and commonly used by the experts for each type of instrument contracted by the Group.197

Notes to the Consolidated Financial Statements as at 31 December 2010These are qualified as hedging instruments or instruments held for trading, in compliance with the provisions of IAS 39.Derivative financial instruments qualified as hedgesAs at 31 December 2010, an interest rate swap had been contracted at a fixed rate, which will fall due on 1 July 2033, for the purpose of hedging against the risk of interestrate volatility of the loan contracted with Caixa Banco de Investimento, S.A. and Caixa Geral de Depósitos, S.A. indicated in Note 35.The fair value of this instrument as at 31 December 2010 and 2009 reached EUR 7,524 thousand and EUR 4,888 thousand, respectively, unfavourable to the Group, which isrecognised in the heading of Other non-current liabilities (Note 39).In view of the provisions of IAS 39, this instrument was recorded as a trading derivative financial instrument since it does not fulfil all of the requirements for the application ofhedge accounting. The changes in the fair value of this trading instruments were, until that date, recorded directly in the income statements of the periods when they occurred.As of 1 January 2010, these requirements were fulfilled and, therefore, the derivative was then recorded as a cash flow hedge. Hence, during the year ended on 31 December2010, the effective component of the change of the hedging instrument was recognised in the Hedge operation reserve, at the value of EUR 1,868 thousand, net of the taxeffect.The main information underlying the determination of the fair value of this instrument as at 31 December 2010 was as follows:Days Rate EUR Source: EUR Fact1 EONIA 0.8170% ECB 0.9999774031 Euribor 1 M 0.7820% ECB 0.9993294690 Euribor 3 M 1.0060% ECB 0.99750070181 Euribor 6 M 1.2270% ECB 0.99388722365 Euribor 12 M 1.5070% ECB 0.98494910731 EUR SWAP 2Y 1.6010% ISDAFIX 0.968262841098 EUR SWAP 3Y 1.9340% ISDAFIX 0.943250071462 EUR SWAP 4Y 2.2450% ISDAFIX 0.913781681826 EUR SWAP 5Y 2.5170% ISDAFIX 0.881537632557 EUR SWAP 7Y 2.9340% ISDAFIX 0.814324093653 EUR SWAP 10Y 3.3310% ISDAFIX 0.717131195480 EUR SWAP 15Y 3.6830% ISDAFIX 0.576628517307 EUR SWAP 20Y 3.7440% ISDAFIX 0.4742372610958 EUR SWAP 30Y 3.5470% ISDAFIX 0.3461231841 - CONTINGENT LIABILITIES, GUARANTEES AND COMMITMENTSContingent liabilities:It is disclosed that during 2010, the Tax Inspection Authorities (DSIT) carried out external inspections to the company Teixeira Duarte - Gestão de Participações InvestimentosImobiliários, S.A. ("TDGPII, S.A."), which is 100% indirectly owned by Teixeira Duarte, S.A..As a result of these external inspections, of a general scope, to the accounting documentation of TDGPII, S.A. and relative to 2006, 2007 and 2008, the following correctionswere made to the initially calculated tax losses:Year Calculated Tax Loss DGCI Correction2006 24,950 18,8372007 51,176 29,3312008 64,606 45,327198

Notes to the Consolidated Financial Statements as at 31 December 2010These corrections result entirely from the non-acceptance, as a tax cost, of the financial costs incurred with the investment in subsidiary companies in the form of additionalpaid-in capital.Since TDGPII S.A. is subject to Corporate Income Tax (IRC) in accordance with the Special Taxation Scheme for Groups of Companies (article 69 and following of the IRC Code),the corrections to the tax losses of 2006 and 2007 were the object of IRC Settlement Statements issued to the controlling company – TD-EC, which filed a judicial review atthe Administrative and Fiscal Court of Sintra.Therefore, the taking of effect of the IRC Settlement Statement is suspended until the definitive decision is read on the judicial reviews which have been filed, regarding whichthe Board of Directors believes that its outcome will be favourable to TDGPII, S.A. and, consequently, to the controlling company.On the date of the closing of the Financial Statements for 2010, the corrections relative to 2008 had not yet been the object of any settlement of IRC.Guarantees:As at 31 December 2010 and 2009, the companies included in the consolidation perimeter had provided the following third-party guarantees:2010Bank guarantees provided 590,756Fidelity insurance 132,625The bank guarantees were essentially provided for the effect of tenders, advances received and as a completion bonds for works.EMPA – Serviços de Engenharia, S.A. provided a real guarantee, corresponding to the mortgage of land to third parties for its construction activity.To secure the loan contract signed with Banco Caixa Geral, of EUR 19,820 thousand, granted by GSC – Compañia General de Servicios y Construccion, S.A., GSC – CompañiaGeneral de Servicios y Construccion, S.A. pledged 2,133,870 shares in Banco Bilbao Vizcaya Argentaria, S.A. and mortgaged land situated in Madrid, at C/ Amália, 4 and 6.Also constituted in favour of Caixa Geral de Depósitos, was a mortgage on lot 3, situated in Lagoas Park, owned by Teixeira Duarte - Gestão de Participações e InvestimentosImobiliários, S.A., to secure a loan contract granted by Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. of the sum of EUR 44,335 thousand.Teixeira Duarte - Engenharia e Construções, S.A., BEL-ere - Engenharia e Reabilitação de Estruturas, S.A., EPOS – Empresa Portuguesa de Obras Subterrâneas, S.A., SOMAFEL- Engenharia e Obras Ferroviárias, S.A., OFM - Obras Públicas, Ferroviárias e Marítimas, S.A., RECOLTE - Recolha, Tratamento e Eliminação de Resíduos, S.A., GSC – CompañiaGeneral de Servicios y Construccion, S.A. and EMPA – Serviços de Engenharia, S.A. have provided surety bonds to guarantee the good completion of works and services.Apart from the guarantees indicated above, the following pledges were also provided:To secure a loan contract signed with Banco Bilbao Vizcaya Argentaria, of the value of EUR 63,300 thousand, granted by Teixeira Duarte - Gestão de Participações e InvestimentosImobiliários, S.A., Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. and TEDAL - Sociedade Gestora de Participações Sociais, S.A. pledged114,505.992 and 10,029,008 shares in Banco Comercial Português, S.A., respectively.To secure the commercial paper contract signed with Banco Espírito Santo, of EUR 50,000 thousand, granted by Teixeira Duarte – Engenharia e Construções, S.A. and TeixeiraDuarte - Gestão de Participações e Investimentos Imobiliários, S.A., Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. and TEDAL - Sociedade Gestorade Participações Sociais, S.A. pledged 41,800,000 and 520,992 shares in Banco Comercial Português, S.A., respectively, and TEDAL - Sociedade Gestora de ParticipaçõesSociais, S.A. pledged 2,205,882 shares in EPOS – Empresa Portuguesa de Obras Subterrâneas, S.A..To secure the commercial paper contract signed with Banco Espírito Santo, of EUR 120,000 thousand, granted by Teixeira Duarte – Engenharia e Construções, S.A. and TeixeiraDuarte - Gestão de Participações e Investimentos Imobiliários, S.A., Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. and TEDAL - Sociedade Gestorade Participações Sociais, S.A. pledged 98,200,000 and 3,370,000 shares in Banco Comercial Português, S.A., respectively, and TEDAL - Sociedade Gestora de ParticipaçõesSociais, S.A. pledged 5,294,118 shares in EPOS – Empresa Portuguesa de Obras Subterrâneas, S.A..To secure the commercial paper contract signed with Banco Espírito Santo, of EUR 60,000 thousand, granted by Teixeira Duarte – Engenharia e Construções, S.A. and TeixeiraDuarte - Gestão de Participações e Investimentos Imobiliários, S.A., Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. and TEDAL - Sociedade Gestora199

Notes to the Consolidated Financial Statements as at 31 December 2010de Participações Sociais, S.A. pledged 50,000,000 and 5,580,000 shares in Banco Comercial Português, S.A., respectively, and TEDAL - Sociedade Gestora de ParticipaçõesSociais, S.A. pledged 104,000,000 shares in C+P.A. – Cimentos e Produtos Associados, S.A..To secure the commercial paper contract signed with Caixa Geral de Depósitos, of EUR 70,000 thousand, granted by Teixeira Duarte – Engenharia e Construções, S.A. andTeixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A., Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. pledged 6,000,000participation units in the TDF Closed Real Estate Investment Fund.To secure the commercial paper contract signed with Banco Espírito Santo de Investimento, S.A., of EUR 34,000 thousand, granted by Teixeira Duarte – Engenharia e Construções,S.A., TEDAL - Sociedade Gestora de Participações Sociais, S.A. pledged 500,000 shares in TDGI – Tecnologia de Gestão de Imóveis, S.A.To secure debts to third parties, of the value of EUR 14,756 thousand, IMOTD - SGPS, S.A. pledged 47,870 shares in V8, S.A. and 47,780 shares in Parcauto, S.A..To secure the loan contract granted by TDHOSP – Gestão de Edifício Hospitalar, S.A. of the current value of EUR 50,951 thousand, Teixeira Duarte - Engenharia e Construções,S.A. pledged to Caixa Geral de Depósitos and Caixa Banco de Investimentos, 1,540,000 shares in TDHOSP – Gestão de Edifício Hospitalar, S.A.. Under the same financingcontract Teixeira Duarte - Engenharia e Construções, S.A., as shareholder, pledged the credit rights over TDHOSP – Gestão de Edifício Hospitalar, S.A..Financial commitments:As at 31 December 2010 and 2009, the letters of comfort provided by the subsidiaries reached EUR 492,723 thousand and EUR 416,400 thousand, respectively.As at 31 December 2010 and 2009, factoring contracts without recourse were in force, which were recorded as a reduction in accounts receivable, amounting to EUR 119,895thousand and EUR 130,058 thousand, respectively. According to the contractual terms, the Group's liability is primarily limited to guaranteeing the acceptance of the factoringinvoices by the customers.Other:As at 31 December 2010 and 2009, there were no inventories pledged as security for liabilities.42 - FINANCIAL RISK MANAGEMENTGeneral Principles:The Group is exposed to a number of financial risks arising from its activities, among which the following deserve special mention:- interest rate risks arising from financial liabilities;- exchange rate risk arising mainly from the existence of operations and assets located outside the Euro zone, namely in Angola, Algeria, Brazil, Macao, Morocco, Mozambique,Namibia, Russia, Ukraine and Venezuela;- credit risk, particularly from credit to its customers relative to the Group’s operating activities;- liquidity risk, as regards the maintenance of cash stability.The Group’s Financial Department ensures the centralised management of the financing operations, applications of cash surplus, currency conversion transactions, as wellas the counterpart risk of the Group. In addition to the above, it is responsible for identifying, measuring, proposing and implementing measures to manage/mitigate thefinancial risks to which the Group is exposed.The main financial risks to which the Group is exposed and the main measures implemented to manage them are analysed in greater detail below.Interest rate riskThe objective of the interest rate risk management policy is the minimisation of the cost of debt subject to the maintenance of a low level of volatility of the financial charges.As at 31 December 2010, 91% of the financial liabilities had a variable interest rate (98% as at 31 December 2009) and 9% a fixed interest rate (2% as at 31 December 2009).Had the market interest rates been higher (lower) by 1% during the year ended on 31 December 2010 and 2009, the financial profit (or loss) of those years would have(decreased) increased by EUR (10,997) / 10,997 thousand and EUR (15,910) / 15,910 thousand, respectively.200

Notes to the Consolidated Financial Statements as at 31 December 2010Exchange rate riskThe Group’s operating activities are exposed to variations in the Euro exchange rate against other currencies.Moreover, taking into account the different countries in which the Group operates, its exposure to exchange rate risk arises from the fact of its subsidiaries report their assetsand liabilities in currencies other than the reporting currency, namely in Angola, Algeria, Brazil, Macao, Morocco, Mozambique, Namibia, Russia, Ukraine and Venezuela.The exchange rate risk management policy followed by the Group is ultimately aimed at reducing the sensitivity of the Group’s net income to currency fluctuations.The monetary assets and liabilities denominated in foreign currency, converted into Euros as at 31 December 2010 and 2009, were as follows:AssetsLiabilities2010 2009 2010 2009Venezuelan Bolivar - 24 257 1,160Algerian Dinar 16,018 8,472 46,794 45,554Moroccan Dirham 664 205 2,198 4,898Tunisian Dinar - - 140 788US Dollar 347,498 146,274 234,956 112,370Namibian Dollar - - 1,065 100Ukrainian Hryvnia - - 32,800 29,500Japanese Yen 12,925 17,703 2,047 17,880Pound Sterling - - 34 22Mozambican Metical 688 254 30 -Macaense Pataca - - 208 199South African Rand 51 2 - 12Brazilian Real - - 14,297 10,418Russian Rouble - - 3,427 2,850377,844 172,934 338,253 225,751Exchange rate risk management is based on a continuous measurement and monitoring of relevant financial and accounting exposures.The possible impacts generated in the heading Currency conversion adjustments as at 31 December 2010 and in the net income for the year ended on that date, if there wasa 5% appreciation of the abovementioned currencies, can be summarised as follows:2010CurrencyNet Income EquityVenezuelan Bolivar (13) -Algerian Dinar (1,539) -Moroccan Dirham (77) -Tunisian Dinar (7) -US Dollar 5,627 -Namibian Dollar (53) -Ukrainian Hryvnia (1,640) -Japanese Yen 544 -Pound Sterling (2) -Mozambican Metical 33 -Macaense Pataca (10) -South African Rand 3 -Brazilian Real (715) -Russian Rouble (171)1,979 -201

Notes to the Consolidated Financial Statements as at 31 December 2010According to the Board of Directors, the sensitivity analysis presented above, based on the position on the stated dates, may not be representative of the exchange rate riskexposure to which the Group is subject throughout the year.Credit riskCredit risk is primarily related to the balances receivable from customers and other receivables related to the Group’s operating activities. The deterioration of global economicconditions or adversities that affect the economies on a local, national or international scale may result in the inability of the Group's customers to meet their obligations,with possible negative effects on the Group.This risk is monitored on a regular basis by each of the Group's businesses for the purpose of:- limiting credit granted to customers, considering their profile and age of the account receivable;- monitoring the evolution of the level of credit granted;- analysing the recoverability of receivables on a regular basis.- the impairment losses of the accounts receivable are calculated considering:- the analysis of the age of the accounts receivable;- the customer’s risk profile;- the customers’ financial situation.As at 31 December 2010, the Board of Directors believes that the estimated impairment losses of the accounts receivable are adequately disclosed in the financial statements.As at 31 December 2010 and 2009, the accounts receivable from customers (Note 27) for which no impairment losses were recorded, because the Board of Directors consideredthat they are achievable, are as follows:2010 2009BalancesNot due 309.200 234.953Up to 180 days 99.234 83.176180 to 360 days 42.036 40.190More than 360 days 66.171 34.469516.641 392.788The credit quality of the accounts receivable which are not yet due included in the table above is monitored on a regular basis, based on the aforementioned objectives.Liquidity riskThis risk can occur if the sources of financing, such as the cash flows from operating activities, disinvestment, credit lines and from financing operations, do not meet thefinancing needs, such as the cash outflows for operating activities and financing, investments, remuneration of shareholders and debt repayment.In order to mitigate this risk, the Group seeks to maintain a liquidity position and an average maturity of debt that allows it to redeem its debt within reasonable periods oftime.Financial liabilities maturing within one year are replaced with medium and long term maturities as deemed appropriate.202

Notes to the Consolidated Financial Statements as at 31 December 2010The maturity of the financial liabilities as at 31 December 2010 and 2009 is as follows:2010Up to 1 year 1 to 2 years 2 to 3 years More than 3 years TotalLoans 506,965 145,483 397,372 154,806 1,204,626Suppliers 227,519 - - - 227,519Fixed assets suppliers 155 - - - 155Financial leases 23,873 20,502 17,802 190,427 252,604Other creditors 44,480 10,854 6,071 9,225 70,630Other liabilities 248,082 31,486 4,333 9,448 293,3491,051,074 208,325 425,578 363,906 2,048,8832009Up to 1 year 1 to 2 years 2 to 3 years More than 3 years TotalLoans 632,432 115,141 726,411 650,808 2,124,792Suppliers 233,405 - - - 233,405Fixed assets suppliers 1,107 - - - 1,107Financial leases 18,920 17,221 16,517 200,014 252,672Other creditors 44,574 19,631 1,071 4,721 69,997Other liabilities 203,692 8,552 3,235 13,176 228,6551,134,130 160,545 747,234 868,719 2,910,628As at 31 December 2010 and 2009, the amount of available cash and the unused amount of the commercial paper programme and credit lines reached EUR 303,528 thousand andEUR 242,546 thousand, respectively.43 - FINANCIAL ASSETS AND LIABILITIES UNDER IAS 39The accounting policies established in IAS 39 for financial instruments were applied as follows:2010Loans andaccountsreceivableFinancial assetsavailable for saleOther financialliabilities andloansFinancial assets /liabilities at fair valuethrough profit or lossDerivativehedginginstrumentsTotalAssets:Cash and cash equivalents 137,837 - - - - 137,837Customers 516,641 - - - - 516,641Financial assets available for sale - 208,220 - - - 208,220Other investments - 13,244 - 7,053 - 20,297Other receivables 56,661 - - - - 56,661Other assets 148,621 - - - - 148,621Total financial assets 859,760 221,464 - 7,053 - 1,088,277Liabilities:Loans - - 1,204,626 - - 1,204,626Suppliers - - 227,674 - - 227,674Other payables - - 70,630 - - 70,630Other liabilities - - 183,632 - 7,524 191,156Financial leases - - 252,604 - - 252,604Total financial liabilities - - 1,939,166 - 7,524 1,946,690203

Notes to the Consolidated Financial Statements as at 31 December 20102009Loans andaccountsreceivableFinancial assetsavailable for saleOther financialliabilities andloansFinancial assets /liabilities at fair valuethrough profit or lossDerivativehedginginstrumentsTotalAssets:Cash and cash equivalents 132,051 - - - - 132,051Customers 392,788 - - - - 392,788Financial assets available for sale - 284,880 - - - 284,880Other investments - 13,549 - - - 13,549Other receivables 44,231 - - - - 44,231Other assets 97,577 - - - - 97,577Total financial assets 666,647 298,429 - - - 965,076Liabilities:Loans - - 2,124,792 - - 2,124,792Suppliers - - 234,512 - - 234,512Other payables - - 69,997 - - 69,997Other liabilities - - 153,206 4,888 - 158,094Financial leases - - 252,672 - - 252,672Total financial liabilities - - 2,835,179 4,888 - 2,840,06744 - APPROVAL OF THE FINANCIAL STATEMENTSThe financial statements for the year ended 31 December 2010 were approved by the Board of Directors on 28 April 2011, although they are still subject to approval, underthe commercial legislation in force in Portugal, by the General Meeting of Shareholders, which is scheduled for 20 May 2011.45 – FEES AND SERVICE OF THE AUDITORSDuring the year ended on 31 December 2010, the fees for services provided by the Group's auditors were as follows:Legal accounts review services 502Other guarantee and reliability services -Tax consultancy services 3Other services -50546 - SUBSEQUENT EVENTSTeixeira Duarte pursued its activity in the different sectors and markets in which it operates, with there not having been, from the closing of the financial year to the presentdate, any fact which should be disclosed at this point.204

Reports, Opinions andCertifications of the Audit Bodies 2010

Report and Opinion of the Supervisory Board 2010Dear Shareholders,Report and Opinion of the Supervisory Board(Relative to the year ended on 31 December 2010)In accordance with subparagraph g) of article 420 of the Portuguese Commercial Companies Code, we present our audit report, our opinionon the individual and consolidated report and accounts of Teixeira Duarte, S.A. relative to the year ended 31 December 2010, as well as onthe proposals submitted by the Board of Directors. This document also includes the statement of responsibility referred to in subparagraph c)of number 1 of article 245 of the Portuguese Securities Market Code.This Committee met regularly throughout the year, having:a) audited the Company’s management and ascertained compliance with the Law and with its memorandum of association;b) monitored the management through regular contact with the members of the Board of Directors;c) verified the accuracy of the documents presenting the accounts, accounting policies and valuation criteria adopted by the Company,in order to ensure that they led to a correct valuation of its financial position and results;Within the limits of the competences legally entrusted to us, we found that:a) the management report provides a clear overview of the key aspects of the business evolution, performance and financial positionof both the Company and the Group;b) the individual and consolidated financial statements and the corresponding notes present a true and fair view of the financial situationof the Company and of the TEIXEIRA DUARTE Group, respectively.Under these terms, taking into account the information provided to us by the Board of Directors and by the Company’s Services, as well as theconclusions presented in the Legal Certification of Accounts and Audit Report, we are of the opinion that:a) The Management Report should be approved;b) The individual and consolidated financial statements relative to 2010 should be approved;c) The proposal for the allocation of profits and losses submitted by the Board of Directors should be approved.Pursuant to subparagraph c) of number 1 of article 245 of the Portuguese Securities Market Code, the members of the Supervisory Boarddeclare that, to the best of their knowledge, the annual accounts and other documents presenting the accounts were prepared in accordancewith the applicable accounting standards, giving a true and fair view of the assets and liabilities, financial situation and results of TEIXEIRADUARTE, S.A. and the companies included in the consolidation perimeter. They further declare that the management report faithfully reflectsthe business evolution, performance and position of TEIXEIRA DUARTE, S.A. and the companies included in the consolidation perimeter,presenting a description of the main risks and uncertainties of the business.Lagoas Park, 29th April 2011António Gonçalves Monteiro - ChairmanMateus Moreira - Board MemberMiguel Carmo Pereira Coutinho – Board Member206

Head OfficeLagoas Park, Edifício 22740-265 Porto Salvo - PORTUGALTel.: (+351) 217 912 300Fax: (+351) 217 941 120/21/26Teixeira Duarte Operating CentreAv. da Indústria, 5402870-635 Alto do Estanqueiro-Jardia - PORTUGALTel.: (+351) 219 948 000 / 210 096 800Fax: (+351) 219 554 536 / 210 096 888Offices• AzoresRua de São Gonçalo, 203-2º Esq.9500-343 Ponta DelgadaTel.: (+351) 296 288 095Fax: (+351) 296 288 098• CoimbraAv. Fernão de Magalhães, 584-2º E3000-174 CoimbraTel.: (+351) 239 855 320Fax: (+351) 239 855 329• Madeira IslandRua das Pretas, 4 - 2º Dto.9000-049 FunchalTel.: (+351) 291 206 930Fax: (+351) 291 225 331• Vila Nova de GaiaEdifício Tower PlazaRotunda Engº Edgar Cardoso, nº 23-Piso 84400-676 Vila Nova de GaiaTel.: (+351) 226 166 180Fax: (+351) 226 104 297• AngolaAlameda Manuel Van Dunen 316 / 320 - ACaixa Postal 2857 - LuandaTel.: (+244) 222 641 500 / 222 641 501Fax: (+244) 222 641 560• AlgeriaParc Miremont - Rue A, Nº 136 Bouzareah16000 AlgerTel.: (+213) 219 362 83Fax: (+213) 219 365 66• BrazilRua Iguatemi, 448 - 14º Andar, Conj. 1401CEP 01451 - 010 - Itaim BibiSão PauloTel.: (+55) 112 144 57 00Fax: (+55) 112 144 57 04EMPA, S/ARua Major Lopes, 800Bairro de S. PedroCEP 30330-050Belo Horizonte - MGTel.: (+55) 313 311 4788Fax: (+55) 313 221 4256• Cape VerdeCaixa Postal 981310 Porto Novo-Santo AntãoTel.: (+238) 222 2943• China (Macao)Rua de Xangai, nº 175Edifício Assoc. Com. de Macau, 10º A/EMacauTel.: (+853) 28 780 288Fax: (+853) 28 780 188• SpainAvenida Alberto Alcocer, nº 24 - 7º C28036 MadridTel.: (+34) 915 550 903Fax: (+34) 915 972 834• MoroccoEspace Porte d’Anfa, 2 ème Étage,Batiment B, 218+C19Angle Boulevard Moulay Rachidet Rue El Mansour20050 CasablancaTel.: (+212) 223 62 890Fax: (+212) 223 62 647• MozambiqueAv. Julyus Nyerere, 130 - R/CMaputoTel.: (+258) 214 914 01Fax: (+258) 214 914 00• NamibiaKARIBIB Portland Cement, PTYC12 th Floor, Sanlam Center145 - 157 Independence AvenuePO Box 2558 - WindhoekTel.: (+264) 612 202 85Fax: (+264) 612 204 28• RussiaMMK “Cement”183003 MurmanskTri Rutchia StreetTel.: (+7) 815 248 8240Fax: (+7) 815 248 8509• UkraineCEMENT, Ltd.Khutorskaya str. 7065055 OdessaTel.: (+380) 487 380 972Fax: (+380) 487 380 964• VenezuelaTegaven - Teixeira Duarte y Asociados, CAAv. Este 6 - Entre Nõ Pastory Puente VitoriaEdifício Centro Parque CaraboboTorre A, Piso 6 - Of. 601/602La Candelaria - CaracasTel.: (+58) 212 574 2491Fax: (+58) 212 576 39 06