Annual Report 2010 - CMVM

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