	I – MANAGEMENT REPORT	3
	HIGHLIGHTS	3
	INTRODUCTION	4
1.	GRUPO SOARES DA COSTA	5
	1.1 Profile	5
	1.2 Strategy	11
2.	OVERVIEW OF THE ACTIVITY	12
3.	RELEVANT FACTS OF THE YEAR	15
4.	ANALYSIS OF THE ACTIVITIES – CONSOLIDATED ACCOUNTS	16
5.	PERFORMANCE BY BUSINESS AREA	22
	5.1 Construction	22
	5.2 Concessions	33
	5.3 Real Estate	40
	5.4 Energia Própria	41
6.	INDIVIDUAL ACCOUNTS	43
7.	HUMAN RESOURCES	43
8.	SUSTAINABLE DEVELOPMENT	47
9.	PRINCIPAL RISKS AND UNCERTAINTIES	48
	10. SOARES DA COSTA ON THE STOCK EXCHANGE	50
	11. ORDER BOOK AND PROSPECTS	52
	12. SUBSEQUENT EVENTS	55
	13. PROPOSAL FOR THE APPROPRIATION OF RESULTS	56
	14. STATEMENT OF CONFORMITY	56
	15. ACKNOWLEDGEMENTS	56
	II – ANNEXES TO THE MANAGEMENT REPORT	58
	1. Participations and Transaction of Members of the Corporate Bodies	58
	2. Qualified Shareholdings	58
	3. Other Legal Information	59
	4. Corporate Governance Report	59
	III – CONSOLIDATED FINANCIAL STATEMENTS	95
	IV – INDIVIDUAL FINANCIAL STATEMENTS	159
	V –CERTIFICATIONS	188

THIS REPORT IS A TRANSLATION OF THE ORIGINAL, ISSUED IN PORTUGUESE. IN THE EVENT OF DISCREPANCIES, THE PORTUGUESE VERSIONS PREVAIL.

I – MANAGEMENT REPORT

HIGHLIGHTS

Consolidated turnover amounted to 873.5 million Euros in 2011, slightly below (-2.2%) the 2010 amount;
Operating indicators improved, evolving favourably, but financial results deteriorated:
EBITDA of 94.1 million Euros exceeded in 6.6% the amount of the previous year, and the margin increased to 10.8% (+0.9 percentage points);
EBIT of 58.9 million Euros, increasing 18.0%;
Net financial results totalled -51.8 million Euros, deteriorating in relation to 2010 (-33.5 million);
Income before taxes amounted to 7.1 million Euros, 56.7% below that of 2010;
Consolidated net income for the period attributable to the Group decreased to 2.4 million Euros (-84.8%);
Individual net income of 0.9 million Euros (27.7 million Euros in 2010).

Consolidated Financial Indicators

(Million Euros)	2011	2010	Var.
Turnover	873.5	893.5	-2.2%
Portugal	328.9	380.2	-13.5%
International Markets	544.7	513.3	+6.1%
EBITDA	94.1	88.2	6.6%
EBITDA Margin	10.8%	9.9%	+0.9 p.p.
EBIT	58.9	49.9	+18.0%
EBIT Margin	6.7%	5.6%	+1.1 p.p.
Net Financial Results	-51.8	-33.5	54.4%
Income before Taxes	7.1	16.4	-56.7%
Net Income Attributable to Group	2.4	15.6	-84.8%

INTRODUCTION

The Board of Directors of the company Grupo Soares da Costa, S.G.P.S., S.A., in compliance with the applicable legal dispositions, namely articles 65 and 66 of the Commercial Companies Code, and the By-laws, presents and submits for approval at the Shareholders General Meeting, the Management Report and the Proposal for the Appropriation of Results, the financial statements and the other reporting documents, for the period ended on 31 December 2011.

It is the Board of Directors' conviction that these documents present fairly the evolution of the business, the performance and the financial position of the company Grupo Soares da Costa, S.G.P.S., S.A. and of the respective group of companies it leads, as well as the principal risks and uncertainties they face.

The financial statements, individual and consolidated, were prepared in accordance with the International Financial Reporting Standards (IAS/IFRS) as adopted by the European Union.

The annual corporate governance and Investor support report (Corporate Governance), prepared in accordance with CMVM Regulation no. 1/2010, the list of shareholders with qualified holdings as well as the shareholdings in the company held by members of the corporate bodies, are presented as appendices to this management report, forming an integral part of it.

In this Report, for simplicity, the following abbreviations and expressions are used:

AP&EN: "Accounting Policies and Explanatory Notes" which form part of the individual and/or consolidated Financial Statements

EBIT: Earnings before Interest and Tax (Operating Results)

EBITDA: Earnings before Interest, Tax, Depreciation and Amortization (Operating Cash Flows = Operating Results + Depreciation and Amortization for the Period + Provisions and fair value adjustments, net of reversals)

Net-Debt: Remunerated Net-Debt = Debentures + Bank Borrowings + Other Borrowings + Finance Lease Creditors + Discounted Bills – Cash and Cash Equivalents

1. GRUPO SOARES DA COSTA

1.1 PROFILE

Who we are

The Soares da Costa Group is one of the largest economic groups in the construction and public works sector in Portugal. In addition to the activity carried out in the domestic market, which covers continental Portugal and extends into the autonomous regions, Soares da Costa has a strong international component, with a permanent presence in the USA, Angola and Mozambique and sporadically in other counties. Currently, Romania, Brazil, S. Tomé e Príncipe, Costa Rica and the Maghreb Central countries constitute markets worked by the Company's subsidiaries, joint ventures and associated companies. Globally, Soares da Costa is 104th in the International Contractors ranking (in foreign turnover), prepared by the North-American magazine Engineering News Record's (2011).

Grupo Soares da Costa, S.G.P.S., S.A. is the holding company of the Soares da Costa economic group, which organizational structure, as from the end of 2002, was built on four sub-holding companies, each heading one of the four business areas into which the Group's activity was organized: Construction, Concessions, Industry and Real Estate. The Industry business area lost its autonomy as a specific segment when, in 2011, it was merged into the holding company of the Construction Business Area.

Historical References

The origins of the Group date back to 1918, to the incorporation in Oporto of a small company, dedicated to the execution of top quality finishings and to painting with fine gold. The following decades saw this company's skills expand significantly, coming to lead the sector in the northern regions of Portugal whilst expanding its activity to the rest of the country. The 80's were crucial to the development of the Group, with the start of its internationalization: first into Venezuela and later to Egypt, Guinea-Bissau, Angola, Nigeria, Mozambique, Iraq, Algeria, Guiana, Cape Verde, Macau, Spain, Germany and the United States. At the end of 1986 its shares were admitted to the Lisbon Stock Exchange (currently Euronext Lisbon).

The following decade was marked by the company's growing specialization in large-scale engineering and public works and by the consolidation of a strong internationalization and diversification strategy, still characteristic of the Group today. The growth in activity lead to the restructuring and reorganization of the company in 2002, with the incorporation of a holding company, Grupo Soares da Costa, S.G.P.S., S.A., with a share capital of 160 million Euros, branching into the various activity areas through four sub-holding companies: construction, concessions, industry and real estate.

The company's shareholding structure altered as from mid-2006, with the exit of the founding family and the entrance of a new majority shareholder, Investifino – Investimentos e Participações, S.G.P.S., S.A., formalized with the execution of the takeover bid in January 2007.

Following the shareholder change, in its strategic plan "Sustainable Ambition 2007-2012", presented in October 2007, the Group defined Construction and Concessions/Services as the strategic areas for the future; with one of the six lines of development defined being the consequent adaptation of its business portfolio. The transactions conducted in 2008, namely the acquisition of the construction companies - Contacto (Portugal) and Prince (United States of America) – and the reinforcement of the shareholding in the motorway concessionaire Scutvias, fall within the scope of this adaptation.

The Strategic Plan "Renewed Ambitions 2014", realigned the strategic guidelines of the Group, refocusing on the business diversification component, under which strategy roll-out the Group acquired, at the end of 2010, a control position in the share capital of Energia Própria.

In 2011, in light of the substantial macroeconomic changes, the liquidity shortage and the strong contraction of the local construction market, Group management adjusted the strategic plan, as will be further developed in the appropriate section.

Corporate Bodies

The current composition of the corporate bodies is as follows:

General Meeting Board:

Fernando Enes Gaião (Chairman) João Pessoa e Costa (Secretary)

Board of Directors:

Manuel Roseta Fino (Chairman) António Manuel Pereira Caldas Castro Henriques (Executive member) Pedro Gonçalo de Sotto-Mayor de Andrade Santos (Executive member) Jorge Domingues Grade Mendes (Executive member) António Manuel Formigal de Arriaga (Non-executive, independent member) António Pereira da Silva Neves (Non-executive member) Carlos Moreira Garcia (Non-executive, independent member) José Manuel Baptista Fino (Non-executive member) Martim Salema de Sande e Castro Fino (Non-executive member) PARINAMA - Participação e Investimentos, SGPS, SA, taxpayer no. 509 016 987, that nominated Ana Maria Martins Caetano (Non-executive member)

Supervisory Board:

Júlio de Lemos de Castro Caldas (Chairman) Carlos Pedro Machado de Sousa Góis Joaquim Augusto Soares da Silva Júlio de Jesus Pinto (Substitute)

Statutory Auditor:

Grant Thornton Associados, SROC, Lda, represented by Jorge Bento Martins Ledo.

Remuneration Commission:

José Manuel Baptista Fino (Chairman) António Jorge Gonçalves Afonso João Pessoa e Costa

Per deliberation of the Board of Directors of April 26, 2010, Messrs Jorge Manuel de Oliveira Alves and Pedro Miguel Tigre Falcão Queirós were nominated, Company Secretary and Substitute Secretary, respectively.

The changes occurring during the period to which this report relates were the following: on 28 July 2011 Mr Pedro Manuel de Almeida Gonçalves handed in his resignation from the office of Director and, consequently, from the post he held as President of the Executive Commission, effective from 30 August 2011; on the same date, Mr António Manuel Pereira Caldas Castro Henriques was nominated to the office of President of the Executive Commission effective from the effective

cessation of duties of his predecessor; on 30 August 2011, Mr Jorge Domingues Grade Mendes was co-opted as Member of the Board of Directors and the Executive Commission was recomposed as follows:

Mr António Manuel Pereira Caldas Castro Henriques President (CEO);
Mr Pedro Gonçalo de Sotto-Mayor de Andrade Santos Member;
Mr Jorge Domingues Grade Mendes Member.

Shareholders

At 31 December 2011, the holders of qualified shareholdings in the share capital of the company were:

Manuel Fino, SGPS, S.A.	Number of Shares	% Share Capital	% Voting Rights (*)
Indirectly through Investifino	113,302,682	70.814%	71.042%
Investimentos e Participações SGPS, S.A.
Total Imputable	113,302,682	70.814%	71.042%

PARINAMA – Participações e Investimentos, SGPS, S.A.	Number of Shares	% Share Capital	% Voting Rights (*)
Directly	17,600,000	11.000%	11.035%
Total Imputable	17,600,000	11.000%	11.035%

Santander Asset Management - Sociedade Gestora de Fundos de Investimento Mobiliários, S.A.	Number of Shares	% Share Capital	% Voting Rights (*)
Indirectly through:
Fundo Santander Acções Portugal	2,930,324	1.831%	1.837%
Fundo Santander PPA	312,634	0.195%	0.196%
Total Imputable	3,242,958	2.027%	2.033%

(*) Considers the impact of the 5,518 preferred shares carrying no voting rights and the existence of the 507,292 own shares held at 31 December 2011

Group Governance

• Organizational Structure

• Group Organizational Chart

The structure of the financial shareholdings comprising the Soares da Costa Group is represented in the organizational chart that follows:

(1) Company held (33.33%) by Clear – Instalações Electromecânicas, S.A..

(2) Additionally, Ciagest, SA has a 1% participation in SDC Imobiliária, Lda.

(4) Additionally, Sociedade de Construções Soares da Costa, SA holds a 4% participation in Auto-estradas XXI, S.A. and Operestradas XXI, SA.. (5) Additionally, Sociedade de Construções Soares da Costa, S.A. holds a 0.004% participation in Exproestradas XXI, S.A..

(6) Additionally, SDC Serviços Técnicos e de Gestão, SA and Hidroequador Santomense hold, each, a 0.002% participation in SDC Hidroenergia, SA..

(7) Additionally, Clear Angola, S.A. holds a 2% participation in Costa Sul, Lda. and in Imosede, Lda..

(8) Company held (16.302%) by Soares da Costa Concessões, SGPS, S.A. and by (0.002%) Sociedade de Construções Soares da Costa, S.A.

(9) Additionally, Intevias – Serviços e Gestão, S.A. holds a 0.002% of Portvias, S.A..

(10) Additionally, Grupo Soares da Costa, SGPS, S.A. holds a 0.5% participation in Indáqua Feira, S.A..

(11) Additionally, Sociedade de Construções Soares da Costa, S.A. Holds a 1% stake in MTA, LDA. and in Carta Angola, LDA.

New shareholdings and changes in the consolidation perimeter during the 2011 period

i) Inclusion of Soares da Costa Brasil Construções, Ltda., a wholly owned Brazilian company incorporated in January 2011, which object is civil construction in general, particularly in the areas of civil, electrical and mechanical engineering, be it through construction management or for contracted work, as well as the preparation of projects, calculations and studies, acquisition and disposal of movable assets, real estate and construction materials, real estate incorporations, public services and public utilities and related concessions, seeking always sustainable practices in civil construction to reduce energy consumption and other ecological solutions to preserve the environment;
ii) Inclusion in the consolidation perimeter of Soares da Costa e Lena, A.C.E., a joint venture set up in March 2011, 50% held by the Group, which object is to improve the operational conditions, the optimization of the resources and the results of the economic activities of the grouped companies, through the combined realization of all the acts, material and judicial, necessary to execute all the civil construction work on Lot 2, with a length of 52.206 Km, of the Poceirão – Caia section of the high velocity train line corridor between Lisbon and Madrid;
iii) Inclusion in the consolidation perimeter of the company Cerenna Cerâmica Nacional de Angola, S.A., a company 51% held by the Group, which object is the production and trade of red or white clay roof tiles, bricks, jack-arches and similar artefacts, as well as the implementation and/or management of investment and development projects related with the mining industry and its derivatives, ceramics, metal-mechanical, trade, import-export, information technology, transport, hotel management and tourism, civil and industrial construction, real estate, professional training, agency contracts, intermediation, management and operation of buildings or real estate developments, owned or otherwise, including their commercial or tourism related operation;
iv) Inclusion in the consolidation perimeter of the company Santolina Holding B.V., a wholly owned subsidiary set up in April 2011, which object is the incorporation, participation, management and acquisition of financial shareholdings in other companies, the rendering of administrative, technical, financial, economic or management services to other companies or persons, acquisition, disposal, management and operation of movable assets and real estate, including patents, brands, licences, permissions and industrial property and other rights, loan cash to/from, act as surety or guarantor, perform and promote all the activities that are directly or indirectly related with its object;
v) Reinforcement of the shareholding in the company Coordenação & Soares da Costa, SGPS, Lda., a company that is now wholly owned by the Group;
vi) Merger, by incorporation, of Soares da Costa Indústria, SGPS, S.A. into Soares da Costa Construção, SGPS, S.A., and the consequent transfer of all the financial shareholdings it held to the Construction business area;
vii) Disposal of the shareholding in the company Mini Price Hotels (Porto), S.A., a company that had been 34% held by the Group;
viii) Inclusion in the consolidation perimeter of the company Terceira Onda Planejamento e Desenvolvimento LTDA, a Brazilian company, incorporated on 10 February 2011, 50% held by the Group, which object is the planning, development, management and preparation of projects, consultancy and execution of civil engineering works, rendering of electrical and mechanical services, relating to the development of the Rio Branco – PR and the São Luiz – MA units, to the company Votorantim Cimentos, S.A., as per the terms laid down in the Announcement regarding the Contracting of Construction Services (Edital para Contratação de Serviços de Construção) dated as of 20 September 2010;
ix) Inclusion in the consolidation perimeter of the company MY WATT, LDA, a company 50% owned by Energia Própria, S.A. and that has as its object the installation, operation and maintenance of solar plants;
x) Within the scope of the reorganization of the Vortal Group: transmission, through the disposal of the shares held in Vortal – Comércio Electrónico, Consultadoria e Multimédia, S.A., and acquisition of a shareholding in the company Vortal SGPS, S.A., in a percentage corresponding to that previously held in Vortal – Comércio Electrónico, Consultadoria e Multimédia, S.A.;
xi) Merger in the Energia Própria Group: Energia Própria, SGPS, SA, holding company of the Self Energy Group, absorbed through incorporation, during the 2011 period, its subsidiaries Self Energy Serviços de Energia, S.A., and Self Energy Solutions, S.A., changed its name to Energia Própria, SA and started carrying out its economic activities directly;
xii) Cession of 66% of the share capital of MTA Máquinas e Tractores de Angola, Lda., a company now consolidated under the equity method;
xiii) During the 4th quarter of 2011, the inactive companies Soares da Costa Desenvolvimento, S.A., MZI, Soc. de Construções, Lda. and Soares da Costa Ambiente e Energia, S, A. were judicially dissolved.

1.2 STRATEGY

Vision and Strategic Objectives

To be an economic Group in the construction and services/concessions sector with an international projection, with levels of profitability and the creation of value for its shareholders on par with that of the best global references in the sector, are the vision and strategic objectives of the Soares da Costa Group.

Mission

The Group's mission is to satisfy the demands of the market and of its clients through a sustainable business model, with qualified and motivated resources, generators of economic, social and environmental value, in a manner that provides an attractive return for the shareholders.

People, respect for the environment and economic growth are the pillars of Soares da Costa. Acting always in an ethical, responsible and honest manner, the Group abides by the following values:

Permanent market orientation and client satisfaction;
Growth sought through the efficiency and effectiveness of management;
Group culture based on the principles of fairness and impartiality;
Socially responsible conduct;
Creation of long-lasting relationships with partners, both domesticaly and internationally;
Promotion of the respect for the environment.

Strategic Plan "Renewed Ambitions 2014" Update

During the second half of 2011 Group management, taking into consideration the substantial macroeconomic changes, the reduced financing liquidity and the strong contraction of the domestic construction market, adjusted and updated the strategic plan.¹

This adaptation of the strategy, in general terms, places a strong emphasis on the construction activity in the Group's core geographies. The strategic guidelines to be implemented are strongly aimed at the INTERNATIONALIZATION of the CONSTRUCTION BUSINESS AREA and the FINANCIAL SUSTAINABILITY of the activities. With a view to adjusting the growth of the Group's activities to a level compatible with the external constraints, namely of a financial nature, protecting the profitability levels and permitting, at the end of the plan period, an expressive reduction in net-debt, the following vectors were selected for action:

Maintenance of the growth in Africa;
Development of the Brazilian market through organic growth, with the prospect of an acquisition in the mediumterm;
Permanence in the United States, with an emphasis on profitability;
Postponement of investments in new energy and environment businesses;
Disposal of non-strategic and/or mature assets;
Concessions: minimization of the capital/ equity needs;
Reduction of structure costs.

2. ACTIVITY OVERVIEW

General Analysis

The year 2011 was characterized, on a global scale, by weakened growth and increased uncertainly. World product expanded 4.0%² , driven by the emerging markets, with Asia in the lead. The world economy is under the confluence of two adverse developments: the almost complete stagnation of the advanced economies and the increased uncertainty in the financial and fiscal planes. The fiscal consolidation underway in many of the more developed economies impacts their internal demand; on the other hand, the level of scepticism in the market has increased regarding many of the countries' ability to stabilize their public debt, and these concerns are more widespread and less focused, as was the case before, on the countries in the European periphery.

The US economy grew some 1.7% during 2011 and a slightly higher growth (2.0%), although still below the historical average, is estimated for 2012. The need to accelerate the fiscal consolidation process places pressure on public spending, which will cease to be a growth stimulant, whilst private investment, though positive, has evolved only timidly. The draining of the real estate bubble is evident, with a decrease in real estate stocks and less pronounced decreases in house prices, but it is clear that this sector will not be boosting economic growth in the near future.

The Euro Zone, affected by its concerns over public debt, saw its economic activity very much conditioned during 2011. Conservative budget policies, in some cases severely restrictive, the need to accelerate the financial deleveraging process

¹ See Privileged Information dated 28 November 2011 in the CMVM website (www.cmvm.pt) 2

International Monetary Fund projections, IMF – World Economic Outlook, September 2011

and the increase in the price of petroleum resulted in a weak product growth, tending to an expected stagnation for 2012, with the main economies, such as Germany and France, showing very limited product expansion.

The Portuguese Economy

The year 2011 was dominated by the Portuguese State's request for financial assistance from the International Monetary Fund and the European Union, a request made prior to the election that led to the substitution of the dominant political party in the Government. This request resulted in the formalization of an Economic and Financial Assistance Programme (EFAP), under which the Government of Portugal undertook to adopt measures to correct the macroeconomic and structural imbalances.

These measures, which have basically materialized in a significant reduction in public investment and a heavier tax burden, aimed at budgetary consolidation, have resulted in an economic retraction due to the decrease in private consumption (both current and durable). One can also observe a contraction in the investment, with the GFCF indicator recording the lowest historical minimum since the beginning of the series commencing in 1995, with negative contributions from all the components: transportation equipment, machinery and equipment and construction, the latter recording the most significant contribution.

The good progress recorded in international trade, with exports achieving a notable increase (+15.1 in terms of homologous variation in November, with imports decreasing by 3.6%), is insufficient to compensate the strong reduction in internal demand³ .

Consequently, the Portuguese economy contracted 1.6% in 2011 and the Bank of Portugal, in its Spring Bulletin, projects a steeper drop of 3.4% for 2012, followed by stagnation in 2013 (reviewing the projections made in the 2011 Winter Bulletin from -3.1 and +0.3, respectively).

In terms of inflation, the Consumer Price Index (CPI) recorded an average rate increase of 3.7% in 2011 (1.4% in 2010). This change reflects the significant increase in energy prices and the VAT rate changes applicable as from January 2011. On the other hand, the average annual increase in the Harmonized Consumer Price Index (HCPI) moved from 1.4% in 2010 to 3.6% in 2011, attaining a differential of 0.9 p.p.(-0.2 p.p. the previous year)⁴ versus the Euro Zone.

Unemployment continues to be a variable displaying a worrisome variation at the economic and social levels. Recent data disclosed by INE⁵ places the estimated unemployment rate for the 4th quarter of 2011 at 14.0%, 1.6 percentage points over that of the previous quarter. The average annual unemployment rate for 2011 was 12.7%.

Internal Market: The Construction Sector

The indicators measuring the evolution of the construction sector reflect its progressive deterioration in 2011. Last December, the construction production index reflected a homologous variation of -12.7%, reflecting variations of -12.2% in the construction of buildings and of -13.1% in the civil engineering segment. This deterioration of the monthly homologous variations, took the average rate change of the global index over the last twelve months down to -9.9%, with the construction of buildings showing an average variation of -10.2% in November, which is even worse than that recorded in the civil engineering segment (-9.6%)⁶ .

³ The source used here was the "Síntese Económica de Conjuntura" – December 2011, INE (Economic Survey)

⁴ Índice de Preços no Consumidor, December 2011, INE 11 Jan. 2012 (CPI)

⁵ Unemployment Statistics – 4th quarter 2011 - 16 Feb. 2012

⁶ Production, Employment and Remuneration in Construction indices, December 2011, INE, 10 February 2012

Despite the habitual delay in the adjustment of the labour market, the unusually long recessionary cycle being experienced by the sector has inevitably resulted in lower employment, with the average variation rate over the last twelve months, measured in December, coming in at -10.1%.

The drop in the value of public bids launch in 2011, which attained 29.7%, corresponding to a contraction of 1.2 million Euros, compared to the 4.3 million Euros launched in 2010⁷ , is a clear indication that this recessive climate will be prolonged. Likewise, licensing of new houses and dwellings recorded homologous drops in December of –25.2% and -35.0% (-21.7% and -29.6% in the previous month), respectively⁸ .

External Market

A brief reference on the macroeconomic environment of the main external markets in which the company has a direct intervention follows:

- ANGOLA

In Angola, the IMF report dated 16 September 2011 on the Fifth Evaluation within the scope of the Stand-By Agreement, refers that "the economic growth in 2010 and in the first half of 2011 was strong, although way below the levels predating the crisis. The main constraints were the production of petroleum below the level expected and the deceleration in the credit flows and in the activity of the sectors affected by delays in government-debt settlements". Even so, the same report projected a 7.7% growth rate for the non-petroleum GDP for 2011, although the overall GDP growth is estimated at 3.4%.

Indeed, the Angolan economy's growth rate estimates continue to suggest a strong performance, even though the scenarios of a meagre performance by the global economy and of a petroleum production decrease bring in an element of uncertainty that recommends prudence in projecting the economy's expansion rate.

The control over inflation is one of the authorities' priorities. A decreasing trend has been achieved, with the variation rate for various prices over the last twelve months coming in at 11.3% in November, with the objective for 2012 being set at 10%.

- MOZAMBIQUE

This country is considered a success story amongst the African economies and has assumed an increasingly important role in Southern Africa, given, namely its potential as a supplier of energy.

Both internal entities (State Budget Amendment for 2011) and international entities project expansion rates for the Mozambican economy for 2011 and for subsequent years in excess of 7%⁹ , higher than the growth rate recorded in 2010, 6.8%, which, of itself, was one of the most pronounced growth rates in Sub-Saharan Africa.

This growth rate acceleration results from the progress brought about by direct foreign investment, via megaprojects particularly in the mineral resource extraction sector, through the increase in public investment as well as due to the good performance of the agricultural sector, all factors fundamental to the progress made in attaining the overall strategic objective of eradicating absolute poverty in the country.

Despite these indicators, its continued heavy dependence on international aid must be referred.

⁷ Conjuntura da Construção no. 58, January/2012, FEPICOP (Construction Survey)

⁸ Economic Survey – January 2012, 17 Feb. 2012 INE

⁹ 7.4% at the end of the first half of 2011, according to a statement made by the Governor of the Banco de Moçambique in official speech at the end of the economic year of 2011

One of the political priorities has been the war on inflation which is, however, affected by exogenous factors such as the increase in the price of commodities and of foodstuff at an international level. The adoption of restrictive monetary measures by the Banco de Moçambique (Mozambican Central Bank) and the increased stability of the local currency (Metical) have permitted the reduction of inflation which, even so, presents an annual average variation rate of 11.3%, measured in November.

- UNITED STATES

As stated above, the USA economy expanded some 1.7% during the year just ended and the projections for 2012 are of an economic growth of some 2%.

In the real estate area the credit restrictions and the continuing adjustment underway to drain the excessive residential market stocks, lead one to expect a market with a poor dynamic, although the bottom of the cycle has been passed. On the other hand, the federal budget policy and that of many states, less expansionist, will lead to a public investment that will not constitute a great economic growth propulsion factor.

The responses to opinion surveys carried out by AGC of AMERICA (The Associated General Contractors of America) with reference to the construction sector in the State of Florida for 2012 are, for the majority of the segments, conservative or pessimistic (motorways, other transport, water/sewerage, public buildings, offices, etc.), with the energy segment being the only one for which the responses predicting an increase in turnover for 2012 exceeded those predicting a decrease.

At the PPP level, following a disappointing 2011 marked by an anaemic behaviour and the cancellation of projects, namely in Florida - Florida High-Speed Rail – and in Georgia - West by Northwest Project – projects for which the Group was prequalified, the expectations for 2012 are those of a reanimation in various fields: Greenfield and Brownfield transport infrastructure projects, social infrastructure and water projects.

- ROMANIA

Romania attained a GDP growth in the order of 1.5% in 2011 and forecasts point to a GDP growth rate of some 4.3% for 2012.

The construction sector in the country demonstrated some dynamism in 2011, supported essentially by the development and construction of infrastructure.

3. RELEVANT FACTS OF THE YEAR

The disclosure of the 2010 Results: on 4 April 2011 the Group disclosed the results for the 2010 economic period;
Realization of the Shareholder General Meeting on 12 May 2011, that amongst other deliberations approved the Consolidated and Individual Management Report and Financial Statements for the 2010 economic period and approved the proposal for the appropriation of the Individual Net Income for the Period;
Adjudication of a construction project to Prince: on 30 June 2011 the market was informed of the adjudication of a project to extend a motorway segment on the I-75, in the Tampa area, in Florida, United States of America, in an amount equivalent to 65.4 million Euros;
Change in the Executive Commission on 28 July Mr Pedro Almeida Gonçalves resigned from his position as Director and, consequently, from that of President of the Executive Commission, which was accepted with effect from 30 August 2011; with effect from Mr Pedro Almeida Gonçalves' cessation of functions as director, Mr António Castro Henriques was nominated to the post of President of the Executive Commission;
Signature of the assignment of a project, launched by the Direção Nacional de Infraestruturas Públicas (National Directorate of Public Infrastructure) of the Ministry of Urbanism and Construction of the Republic of Angola, to Sociedade de Construções Soares da Costa, SA, in an amount equivalent to 63 million Euros, integrated within the requalification of the "Município de Sambizanga e Encostas da Boa Vista" project, in Luanda;
First projects contracted in Brazil: on 19 August 2011 the Group disclosed that Sociedade de Construções Soares da Costa, SA, in association with the Brazilian company SERPAL, signed two contracts with Votorantim Cimentos;
Adjudication of a conception-construction project to Prince, in the United States of America: the Florida Department of Transportation (FDOT) announced Prince as the winner of the tender for a conception-construction project for the substitution of the junction of motorways US27 (SR25) and SR 50 in Lake County, Florida. Prince teamed with the USA subsidiary of the English company Atkins, a leading global consultant in the area of engineering and conception. The project is worth an amount equivalent to 14.5 million Euros;
On 30 August 2011, following Mr Pedro de Almeida Gonçalves' resignation from the post of member of the Board of Directors, the Board of Directors co-opted to that post Mr Jorge Domingues Grade Mendes, integrating the Executive Commission that thereafter had the following composition: Mr António de Castro Henriques (President), Mr Gonçalo Andrade Santos and Mr Jorge Grade Mendes (Members);
On 20 October 2011 the company disclosed that it had denounced, with effect from 31 December 2011, the liquidity contract celebrated on 21 September 2010 with Lisbon Brokers Sociedade Corretora, SA (which contractual position had been assumed in the meantime by Banco L. J. Carregosa, SA);
Update of the strategic plan. On 28 November 2011 the Group announced the need to update/adapt its strategy due to the strong deterioration of the economic and sector context and to the degradation in the availability of credit. The strategic guidelines were therefore strongly oriented to internationalization, to the construction business area and to the financial sustainability of the activities (vide the development in section 1.2 above, in this Report).

4. ANALYSIS OF THE ACTIVITY: CONSOLIDATED ACCOUNTS

(Million Euros)	2011	2010	Var.
Turnover	873.5	893.5	-2.2%
Portugal	328.9	380.2	-13.5%
External Market	544.7	513.3	+6.1%
EBITDA	94.1	88.2	6.6%
EBITDA Margin	10.8%	9.9%	+0.9 p.p.
EBIT	58.9	49.9	+18.0%
EBIT Margin	6.7%	5.6%	+1.1 p.p.
Financial Results	-51.8	-33.6	54.2%
Earnings before Tax	7.1	16.3	-56.5%
Net Income Attributable to Group	2.4	15.6	-84.7%

Consolidated Financial Indicators

Turnover

The Group's turnover amounted to 873.5 million Euros, 20 million less in absolute terms and 2.2% below that recorded in the previous year. This drop was determined by the accentuated decrease in the domestic market activity, consequence of the adverse macroeconomic and sector framework, indeed already sufficiently portrayed in a previous chapter of this report, and that even the significant developments occurring in the construction of the Transmontana motorway infrastructure were insufficient to compensate.

However, the external market had a global growth of 6.1% which, associated with the decrease of 13.5% in the domestic market, progressively accentuates the international dimension of the Group, with the external turnover quota representing 62.4%, compared with 57.4% in 2010.

Breakdown of Turnover by Geographical Market

	2011	%	2010	%	Var.
(Million Euros)
Portugal	328.9	37.6%	380.2	42.6%	-13.5%
Angola	325.4	37.3%	344.8	38.6%	-5.6%
U.S.A.	114.1	13.1%	78.8	8.8%	44.8%
S. Tomé e Príncipe	2.6	0.3%	6.6	0.7%	-60.9%
Mozambique	80.4	9.2%	38.3	4.3%	109.7%
Romania	6.6	0.8%	25.9	2.9%	-74.4%
Other	15.6	1.8%	18.9	2.1%	-17.6%
Total	893.5	100.0%	893.5	100.0%	-2.2%

In the external markets very expressive growths were recorded in the United States and in Mozambique. In the United States of America turnover attained an historical maximum of 114 million Euros in 2011, revealing a growth of 44.8% and in Mozambique it exceeded 80 million Euros, more than doubling the amount of the previous year. Angola, however, saw its 2011 turnover decrease slightly (5.6%) when compared to the maximum amount recorded the previous year, but approaches to compete with the domestic market for primacy in terms of turnover.

The remaining markets (S. Tomé e Príncipe, Romania and other) present a global amount close to 25 million Euros but lost relevance in comparative terms with the previous year.

Distribution of Turnover by Business Area

(Million Euros)	2011	%	2010	%	Var.%
Turnover	873.5	100.0%	893.5	100.0%	-2.2%
Construction	796.2	91.1%	842.0*	94.2%	-5.4%
Concessions	187.6	21.5%	102.2	11.4%	+83.6%
Real Estate	7.1	0.8%	14.6	1.6%	-51.2%
Self Energy	8.6	1.0%	-	-	-
Group + Shared Serv.	13.6	1.6%	11.3	1.3%	20.2%
Eliminations	-139.6	-16.0%	-76.5	-8.6%	-

* For comparative purposes the Construction indicators include Industry, previously separately disclosed.

In terms of the contribution of each business area to the consolidated turnover, the highlights were the significant increase in the amount and weight of the activity in the Concessions area, in detriment to the Construction area, that suffered a drop of 5.4%; the real estate area, in the absence of the development of new projects and with the anaemic state of the market, had a decreasing weight, below that of the Self Energy segment, consolidated for the first time in 2011 and still only representing a mere 1% of total turnover.

Profitability

The income statement, summarized below by major caption, shows that, despite the slight decrease in turnover, the operating margin increased from 5.6% to 6.7% in relation to total operating gains, reflecting the Group's strategic concern with the sustainability of the activities in detriment to an aggressive growth based on the practice of a risky pricing policy, increasingly widespread, but unsustainable in the medium/long-term.

Consolidated Income Statement

Amounts in million Euros; structure in % of Operating Revenue and Gains

	2011	%	2010	%	Var.
Turnover	873.5	98.5%	893.5	98.9%	-2.2%
Production Variation	-19.1	-2.2%	-17.2	-1.9%	10.8%
Other Operating Gains	32.4	3.6%	27.3	3.0%	18.7%
Revenue and Operating Gains (OG)	886.8	100.0%	903.6	100.0%	-1.9%
Cost of Goods Sold and Mat. Cons.	186.5	21.0%	176.2	19.5%	5.8%
External Supplies and Services	437.2	49.3%	460.9	51.0%	-5.1%
Staff Costs	146.4	16.5%	156.5	17.3%	-6.5%
Provisions and Value Adjust.	1.9	0.2%	4.1	0.5%	-52.9%
Amort./Depr. and Impairment Losses	33.8	3.8%	34.5	3.8%	-2.2%
Other Operating Losses	22.1	2.5%	21.4	2.4%	3.2%
EBIT	58.9	6.6%	49.9	5.5%	18.0%
Financial Results	-51.8	-5.8%	-33.5	-3.7%	54.4%
Earnings before Tax	7.1	0.8%	16.4	1.8%	-56.7%
Corporate Income Tax	4.7	0.5%	0.3	0.0%	-
Net Income for the Period	2.3	0.3%	16.0	1.8%	-85.4%
Net income Attributable to Group	2.4	0.3%	15.6	1.7%	-84.8%

EBITDA attained 94.1 million Euros in 2011 (corresponding to 46.6 million Euros obtained in the 2nd half of the year and 47.5 in the 1st half), increasing by 6.6% over the previous year. Consequently, the EBITDA/turnover margin recorded a positive evolution, due to in addition to the EBITDA being higher in absolute terms (+5.9 million Euros), it having been obtained with a lower turnover, increasing to 10.8%, 0.9 percentage points over the 2010 value.

Profitability by Business Area

(Million Euros)	2011	%	Margin	2010	%	Margin	Var.
EBITDA	94.1	100.0%	10.8%	88.2	100.0%	9.9%	6.6%
Construction	47.7	50.7%	6.0%	53.9	61.1%	6.4%	-11.5%
Concessions	43.3	46.0%	23.1%	34.0	38.5%	33.3%	27.3%
Real Estate	4.1	4.3%	57.0%	5.5	6.2%	37.7%	-26.1%
Self Energy	-2.1	-2.2%	-23.9%	-	-	-	-
Group + Shared Services	0.7	0.7%	5.1%	-1.9	-2.1%	-16.5%	137.2%
Eliminations	0.4	0.4%	-	-3.4	-3.8%	-	-
EBIT	58.9	100.0%	6.7%	49.9	100.0%	5.6%	+18.0%
Construction	29.4	50.0%	3.7%	32.3	64.7%	3.8%	-8.9%
Concessions	29.0	49.3%	15.5%	19.9	39.8%	19.5%	+45.9%
Real Estate	2.5	4.2%	35.0%	3.9	7.8%	26.6%	-35.7%
Self Energy	-2.2	-3.7%	-25.4%	-	-	-	-
Group + Shared Services	-0.2	-0.4%	-1.7%	-2.8	-5.7%	-25.0%	+91.8%
Eliminations	0.4	0.6%	-	-3.3	-6.7%	-	-

Note: The margin is calculated in relation to the turnover of each segment.

Financial Results

Financial Results totalled -51.8 million Euros, when it had been -33.5 million Euros in 2010. Within this change special significance is attributed to the decrease in the revenue and capital gains from shareholdings (-16.9 million Euros), that were strongly influenced in 2010 by the disposal of the shareholding the Group held in Banco Africano de Investimentos.

Net financing costs (interest borne less interest earned) increased from 36.0 million Euros to 41.1 million Euros, which was ultimately compensated by the exchange differences that, having been marginally negative in 2010 (-0.5 million Euros), contributed with a positive 6.4 million Euros in the year under review.

Earnings before Tax and Net Income

The conjugation of the operating and financial results analysed above resulted in a pre-tax profit of 7.1 million Euros, significantly below (-56.7%) that obtained in the preceding year. Additionally, the tax impact on 2011 was more burdensome than it was over 2010, due to the different natures of the taxable income as well as the fact that the tax amount includes the effect of the de-recognition of some deferred tax assets of a subsidiary of the concessions area. Hence, net income was even more penalized in relation to the previous year (-84.8%), totalling 2.4 million Euros.

Consolidated Statement of Financial Position

At the level of the consolidated statement of financial position and in a comparative analysis between 2011 and the previous year, two dominant and related aspects permeate this statement:

• A balance sheet growth with significant increases in assets and liabilities;

• A structural change clearly revealing the growing weight of the business of the Concessions area in the Group, namely in terms of the infrastructure projects under construction that have adopted the financial asset model of accounting (in particular the Transmontana motorway, but also the Zambeze motorway, in Mozambique).

Reference will now be made to some relevant aspects that result from the above-mentioned comparative analysis of this financial statement, starting with the breakdown and evolutionary analysis of the ASSETS:

Total assets grew by 102.4 million Euros, to 1,763.7 million, with the variation being split into an increase of 136.7 million Euros in non-current assets (that move from 800.5 to 937.2 million Euros), whilst current assets decrease (- 34.3 million Euros);
The increase in non-current assets is fundamentally related to accounts receivable that increased by 135.7 million Euros, relating, to a large extent, to the accounting in the consolidated statement of financial position of the financial assets of the above-mentioned concessions, that follow the financial asset accounting model;
At the level of current assets the most important change is related to the decrease in inventories, from 158.3 to 127.9 million Euros.

EQUITY, which increased in 2010, suffered a drop of 23.0 million Euros in 2011. The main changes relate to the following factors:

Change, net of deferred taxes, in the fair value of derivative financial instruments (essentially interest rate swaps in the concessions area) of -20.7 million Euros;
The distribution of dividends to the shareholders out of the 2010 net income, approved at the Ordinary General Meeting of 12 May, in an amount of 3.5 million Euros;
The consolidated result for the period that amounted to +2.4 million, in this case with a positive impact;
Other variations in equity (foreign exchange reserves, movements in own shares and other changes), in a global amount of -1.2 million Euros.

Given the fundamental equation of the balance sheet, with an increase in assets of 102.4 million Euros and a decrease in equity of 23.0 million Euros, LIABILITIES increased by 125.4 million Euros, This increase was concentrated in non-current liabilities (∆= 141.4 million), since current liabilities decreased by 16.0 million Euros. In addition to the captions that contribute to net-debt, which evolution is analysed below, the largest changes occurred in derivative financial instruments, essentially from the concessions area, that now amount of 66.4 million Euros (the sum of the current and non-current elements), versus the amount of 38.3 million Euros a year before. At the current liabilities level and in the working capital captions, a decrease is evident in amounts due to suppliers (-25.8 million Euros), as is a reduction in advances from clients (- 37.2 million Euros).

Net-debt

Remunerated net-debt at the end of 2011 amounted to 863.0 million Euros and included an amount of 399.8 million Euros of debt without recourse, in the concessions business segment.

Evolution of Net-debt (Million Euros)	Dec. 2011	Dec. 2010	Variation
Total Net-debt	863.0	735.4	+16.7%
With recourse	463.2	442.5	+4.7%
Without recourse	399.8	292.9	+36.5%

The amount of 463.2 million Euros in debt with recourse is at the level recorded at the end of the 1st half-year of the previous year (461.9 million Euros). The financing of the reinforcement of own funds in some projects, namely in the Transmontana motorway sub-concessionaire, is the main factor justifying the increase in corporate debt in 2011 that, were it not for that component, would have decreased compared to the amount of the previous year. On the other hand, the debt without recourse increased significantly due to the direct external financing of the sub-concessionaire.

The following table shows the evolution of net-debt and of EBITDA over the last few years, with the respective multiple, in 2011, at an amount of 9.2x compared to the amount of 8.3x a year before.

Evolution of Net-debt and Ratio of Net-debt/ EBITDA

(Million Euros)	2007	2008	2009	2010	2011
Net-debt	313.6	606.3	675.9	735.4	863.0
EBITDA	36.2	86.4	87.2	88.2	94.1
Multiple (Net-debt / EBITDA)	8.7x	7.0x	7.8x	8.3x	9.2x

Investment

The amount of the investment in Tangible Fixed Assets totalled, in 2011, 25.7 million Euros, 11.8% lower than the 29.2 million Euros in 2010. The breakdown by investment caption is as follows:

Evolution of Investment

(Million Euros)	2011	2010	Var.
Land and buildings	6.2	7.1	-12.9%
Basic Equipment	6.9	8.4	-17.7%
Fixed tangible assets in-progress	10.5	9.6	+9.4%
Other tangible fixed assets	2.2	4.1	-47.2%
Total	25.7	29.2	-11.8%

This investment is substantially concentrated in the construction segment and relates, over and above the investment in plant, to the effort put into improving the production support infrastructure, with a particular emphasis on the Viana and Luanda construction yards, in Angola.

5. PERFORMANCE BY BUSINESS AREA

5.1 CONSTRUCTION

The Construction area, being the traditional sector of intervention, is the most important vector in the business of the Soares da Costa Group and its internationalization assumes a preponderant role.

Soares da Costa Construção, S.G.P.S., S.A. leads this business area, and it should be pointed out that in 2011, as a result of the merger through incorporation of Soares da Costa Indústria, SGPS, SA, it also went on to incorporate the original shareholdings of this previously autonomous industrial segment, namely Socometal, Somafel and OFM. However, for greater ease and understanding of all subsequent analyses, the indicators presented below with respect to 2010 have been re-expressed as if the industry area already belonged to the construction business area, thereby permitting a complete comparability.

The chart shown below presents a summary of the principal consolidated indicators of this business area, evidencing a global decrease of 5.4% in turnover, result of the combination of a significant decrease in the domestic market activity that a slight increase in the external market did not compensate, a certain resilience in the margins of an operational nature (with the EBITDA/turnover margin at 6.0%) and a slight deterioration of the financial function. Were it not for the less interesting behaviour in the profitability level achieved in the United States of America market, we would be concluding that the difficulties and challenges resulting from the adverse economic environment that marked 2011, were completely and successfully over.

(Million euros)	2011	2010*	Variation %
Turnover	796.2	842.0	-5.4%
Portugal	264.2	314.0	-15.9%
International market	532.0	528.0	+0.8%
EBITDA	47.7	53.9	-11.5%
EBIT	29.4	32.3	-8.9%
Financial Results	-16.9	-14.1	19.5%
Net Income	7.4	13.4	-44.8%

Key Peformance Indicators - Construction

Note: 2010 amounts presented as if the Industry business area already formed part of the Construction business area

Turnover

The Construction business area turnover attained the amount of 796.2 million Euros in 2011, which compares with 842.0 million Euros in the previous year (-5.4%). The relative weight of the external market, which grew globally in terms of annual variation (+0.8%), was significantly accentuated and it came to represent 2/3 of total turnover, due to the significant decrease recorded in the domestic market. The latter resulted from the demand restrictions in the internal market, profusely illustrated by the various indicators discussed in the sector overview analysis and which effects were passed on, in a very relevant

manner, in the contribution to the consolidated turnover made by some of the subsidiaries focused on this market, as was the case, in particular, of the subsidiary Contacto.

Turnover of the Construction business area by Geographical Market

(Million euros)	2011	%	2010	%	∆ 2011/10
Portugal	264.2	33.2%	314.0	37.3%	-15.9%
Angola	327.6	41.1%	364.3	43.3%	-10.1%
United States	114.2	14.3%	78.9	9.4%	44.7%
Mozambique	72.1	9.1%	36.3	4.3%	98.5%
Brazil	4.2	0.5%	-	-	-
Romania	6.6	0.8%	25.9	3.1%	-74.4%
Other	7.3	0.9%	22.6	2.7%	-67.7%
Total	796.2	100.0%	842.0	100.0%	-5.4%

The following table presents the contribution of each subsidiary/joint venture/associated company of the Construction business area to the consolidated turnover of this area and the respective comparison with the previous year:

Turnover by company - Construction

(million Euros)

	2011		2010
Gross	Adjust.	Consol.	Consol.	Var.
605.7	-164.5	441.1	507.8	-13.1%
25.2	-4.5	20.7	51.1	-59.4%
113.7	0	113.7	76.6	48.5%
0.3	-0.3	0	0.1	-100.0%
0	0	0	2.5	-99.0%
0.2	0	0.2	0.4	-49.8%
0.3	0.1	0.2	0.3	-31.8%
36.3	-31.6	4.7	9.3	-49.6%
57.5	-46.7	10.8	13.9	-22.6%
18.7	-0.1	18.6	16.2	14.7%
0.6	0	0.6	3.2	-82.4%
1.5	0	1.5	0.7	126.3%
10.7	-7.4	3.3	2.5	32.1%
125.5	-0.2	125.3	37.8	231.2%
4.1	0	4.1	14.9	-72.3%
2.2	-0.1	2.1	13.5	-84.5%
1.2	-1.4	-0.3	4.2	-106.2%
20.9	-5.5	15.4	14.6	4.8%
5.4	-0.6	4.8	8.9	-45.5%
0.7	-0.2	0.5	5.1	-90.2%
0.2	0	0.2	6.5	-96.7%
1.5	0	1.5	3.2	-54.7%

GCVC, ACE	2.2	0	2.2	3.0	-28.3%
Mota-Engil, SDC, Mte. Adriano - Matosinhos, ACE	3.2	0	3.2	3.2	1.1%
SOMAFEL - Engenharia e Obras Ferroviárias, S.A., SA	7.8	-0.1	7.7	28.2	-72.8%
OFM - Obras Públicas, Ferroviárias e Marítimas, S.A.	5.4	-0.1	5.2	7.7	-31.9%
Construções Metálicas SOCOMETAL, S.A.	12.3	-8.0	4.2	5.9	-27.8%
Terceira Onda Planejamento e Desenvolvimento, Ltda.	3.9	0	3.9	0	-
Other	0.6	0.2	0.8	0.7	15.9%
Total	1,067.4	-271.2	796.2	842.0	-8.5%

Next are summarized the most relevant aspects of the development of the activity in this business area during 2011, in the different geographical markets:

PORTUGAL

The companies of the Construction business area consolidated using the full consolidation method and with a significant intervention in the country are:

Sociedade de Construções Soares da Costa, SA
Contacto Sociedade de Construções, SA
Clear Instalações Electromecânicas, SA
Construções Metálicas Socometal, SA, originally from the Industry area.

Furthermore, various joint ventures, in which, namely Sociedade de Construções Soares da Costa, SA, has shareholdings, are in operation and are consolidated using the proportional method; during the 2011 economic period additional companies were consolidated using the proportional method, namely those with share capital held by the rail and maritime project area, that transferred in from the Industry area: Somafel and OFM.

The performance of these companies in 2011 was conditioned by the depressive climate hanging over the domestic civil construction and public works market described above. Adding to this, and despite the signing of the reformulated concession contract in February 2011, was the Court of Auditors' delay in issuing the formal approval (visto) on the contract (the contract is with the concessionaire Elos), relating to the high velocity train line project for the section Poceirão-Caia, and which, subsequent to the period end, was ultimately rejected by the Court of Auditors.

Even though the market constraints that conditioned the activity of the sector's companies in Portugal were strong, Sociedade de Construções Soares da Costa, SA, was able to turn around the year 2011, and it can be said that the company's performance positively overcame the difficulties it faced.

Of great relevance to the year's activity was the Transmontana motorway construction project developed by the joint venture CAET XXI - Construções, ACE, in which the company has a 50% shareholding. In reality, were it not for this project the domestic turnover of the company, which was in line (even slightly above, +1.8%) with that of the previous year, would have been significantly lower.

In addition to the merited highlighting of this project in particular, the following important works were completed in Portugal, during the 2011 economic period:

Parque Escolar Lote 2AN2 (School Premises Network Lot 2AN2);
ETAR do Barreiro (WWTP);
Barreiro-Moita Drainage Sub-system;
Capinha Irrigation Network, in Cova da Beira;
Pousada da Cidadela de Cascais (Heritage Hotel);
Bypass to Madalena do Mar, in Madeira;
Organic Recovery Centre in Seixal, which entered the testing phase of the equipment and systems.

Regarding the works started in 2011, and despite the climate of economic containment installed in Portugal, the following should be highlighted:

Pousada da Serra da Estrela (Heritage Hotel), in Covilhã;
World Hotel, in Praia da Tocha;
Hotel Sana Evolution, in Lisbon;
EDIA Bloco de Aljustrel (Block);
EDIA Bloco de Pedrógão 3 (Block);
Tróia Housing Development Infrastructure;
Substitution of the Vitória Plant roofing, in Madeira.

Regarding the geographical distribution of the domestic operating activity of the main construction company of the Group, a strong stagnation was confirmed in Madeira (1% of activity in 2011, compared to 4% in 2010 and 14% in 2009) and a strong concentration was evident in the north of the country. It should be pointed out that this percentage results primarily from the Transmontana motorway, which represents a huge portion of this amount.

Domestic Activity in 2011: Distribution by Geographical Area

The distribution by activity segment followed the sector trend already manifested in 2010, in which a clear deceleration in private activity was detected, in that there was a shift to the Engineering and Infrastructure segment, that increased its quota from a mere 27% in 2008 to almost 54% in 2009, representing some two-thirds in 2010 and almost 90% in 2011. Once again, it must be stressed that this number does not reflect any public investment intention trend but rather an abrupt drop in private investment.

Domestic Activity in 2011: Distribution by Segment

Within the segment of Civil Construction, almost three-quarters of the activity occurred in the Hotel sub-segment, with the remaining activity in 2011 split between Residential and School construction. The latter sub-segment, given its public sector investment nature, highlights the undeniable stagnation in private investment.

Domestic Activity in 2011 – Civil Construction: Distribution by Sub-segment

Within the Engineering and Infrastructure segment, Roads represented some two-thirds of the activity, followed by Infrastructure and Environment with a weight of some 10%, Dams (corresponding essentially to the reinforcement of the Alqueva Dam energy production capacity) with some 6% and Bridges, with 5%.

Domestic Activity in 2011 – Engineering and Infrastructure: Distribution by Sub-segment

At the level of the joint ventures in which the company participates, in addition to the CAET XXI– Construções, ACE (50%) referred to above and the LGV- Engenharia e Construção de Linhas de Alta Velocidade, ACE (17.25%), set up with the object of "executing the work underlying the contract to be signed with ELOS – Ligações de Alta Velocidade, S.A., the company that is to celebrate the contract covering the concession, construction, financing, maintenance and availability, throughout the entire RAVE concession period, of the Poceirão-Caia line as well as all the operating activities at Évora Station, including those of management and sale of advertising, of the commercial areas integrated in it and of the car parks adjacent to it" the following must also to be referred to:

HidroAlqueva, ACE (50%), with the object of executing the global construction contract for the capacity increase of the Alqueva hydroelectric plant (Escalão), for EDP;
Mota-Engil, Soares da Costa, MonteAdriano Matosinhos, ACE (28.57%), for the construction of the infrastructure necessary for the implementation of Indáqua Matosinhos, SA's investment plan;
GCVC Grupo Construtor de Vila do Conde, ACE (28.57%), in respect of the conception, project and construction of the infrastructure necessary for the implementation of Indáqua Vila do Conde, SA's investment plan;
Nova Estação, ACE (25%) Contract for the conception/construction of the structural work on the extension between the Amadora East and the Reboleira Stations on the Blue Line of the Metropolitano de Lisboa E.P.(Metro).

The domestic market has been the target market of the subsidiary Contacto. This subsidiary recorded a substantial drop in its activity in 2011. The considerable decrease in the demand for commercial buildings from the client Sonae, a very depressed private market due to the domestic and international funding shortage and the aversion to risk assumed by the investors who have also delayed the start-up of projects, and a very limited public investment programme, have turned 2011 into one of the years, in the company's more recent history, recording the lowest activity levels.

2011 saw the continued strategic widening of Contacto's client portfolio and the relative weight of public works in its works mix was strengthened even if, as is patent above, the scarcity of the demand determined a very relevant decrease in the activity.

During the 2011 economic period the following works were completed:

Construction of the 2nd segment of the Pisão-Roxo Adductor of the Alqueva Multipurpose Complex;
Construction of the A12 Setúbal / Montijo Motorway Sub-section Junction A2 A12 Setúbal (EN 10) Alto da Guerra;
Construction of the reformulation of the Campo junction, with the widening and improvement from 2 to 3 lanes, between Km 19+800 and Km 20+825, of the subsection Valongo/Campo – A4 Oporto / Amarante Motorway;
Monserrate High School;
Caldas das Taipas High School;
Carlos Amarante High School;

Individual turnover amounted to 25.2 million Euros, with an operating result of 115 thousand Euros, compared to the amounts of 73.2 million Euros and 576 thousand Euros, respectively, in 2010.

Clear is another subsidiary with a relevant activity both in the country as well as in Angola, in this case through its subsidiary Clear Angola.

In Portugal, in terms of production and benefitting from a relatively comfortable works volume that transitioned from the previous year, the activity ran as expected, and the company's resources achieved a significant occupancy rate. The company's participation in the following projects is to be highlighted:

Pousada da Cidadela de Cascais (Heritage Hotel), with its involvement in the hydraulic, mechanical and electrical installations;
CVO - Central de Valorização Orgânica do Seixal (Organic Recovery Centre): a contract won in 2010 by the Hydraulics area, had a significant evolution during the year just ended and is currently in its final stage;
Vila Verde High School, in the Braga district, with its intervention in the acclimatization area.

Within the scope of the construction of the Transmontana motorway and through the electro-technical area some subcontracts were undertaken in the "electrical public lighting infrastructure in the Espinheiro, Alto de Espinho, Vila Real Centro and Vila Real Norte junctions", "telecommunication and public lighting networks infrastructure in the Amendoeira junction" and "telecommunication and public lighting networks infrastructure in Lot 10".

In Madeira, Hydraulics concluded the "hydraulics installation and equipment at the São Martinho High/Professional School".

Close to end of the period, contract work was restarted on the "hydraulics installation and equipment at Quinta do Lorde – Marina and Resort Hotel – Phase II", following the interruption that occurred in 2010.

In the railways sector, which activity segment is run by the subsidiary Somafel, 2011 saw a degradation of the production activity due to the inexistence of new adjudications. Indeed, the limits imposed on debt levels in companies falling within the State corporate sector practically implied the cessation of the launch of any public tenders. Additionally, the expectations regarding some projects on the Linha do Norte (North Line) were not realized, justified by the infrastructure's poor performance, primarily in the segments not yet modernized.

In this manner the activity of the company in the domestic market was insignificant, and it had to redirect itself to the external market, to countries in the Maghreb region (Kingdom of Morocco and the Popular and Democratic Republic of Algeria) where it has been consolidating its presence since 2005 and 2007, respectively.

With regard to Socometal, its activity in the domestic market ran as planned and in line with the previous year. The most significant works undertaken were the bypass over the Fervença River and the 6.2 A overhead passage in Vila Real, both within the scope of CAET XXI and, for clients totally external to the Group the highlight goes to the Bridge over the Febros River, within the scope of the Douro Litoral (Teixeira Duarte, SA) concession and the structural project, supply and installation of metallic shading coverage structures for Warehouse 08 (Gran Cruz Porto, SA), all in the "iron" specialty, whilst in "aluminium" the highlight goes to the Pousada da Cidadela (Heritage Hotel) in Cascais.

Globally, the consolidated turnover of the Construction area in the domestic market amounted to 264.2 million Euros, a drop of 15.9% on the 314.0 million Euros of the previous year.

ANGOLA

The Angolan market contributed globally, in 2011, with 327.6 million Euros, effectively constituting the largest activity quota, representing 41.1% of global turnover.

In this market the activity of Sociedade de Construções Soares da Costa, S.A. is of a fundamental significance but so is that of the subsidiary Clear, Clear Angola, which has been assuming a position of growing relevance.

With reference to the activity of Sociedade de Construções Soares da Costa, SA in this country during 2011, despite not having met the levels of the previous year it continued, however, to maintain high levels. Its notoriety and acknowledged prestige and the technical reputation earned in the construction of buildings in the diverse sub-segments (residential, commercial and offices), justify and call for the participation of the company in varied important projects.

However, the infrastructure segment, a strategic development vector in the diversification and enlargement of the business portfolio, already assumes an important operational significance in this market. Amongst the most relevant works included in the production for the year were the following:

Construction of the Bayview office blocks;
Rehabilitation of the Marginal de Luanda (Waterfront Road);
Largo do Ambiente Building (completed);
Torre do 1º Congresso (Tower);
Atrium Independência Building (completed);
Museu da Ciência e da Tecnologia (Science and Technology Museum) GOE;
INE New Building;
Sana Luanda Royal Hotel (completed).

It is important to highlight the progressive expansion of the activity of the company to regions outside the Luanda area, with the execution of works, namely in Soyo (Bechtel – LNG Project: Bairro Fina School), Benguela (BESA headquarters in Lobito), and Huambo (Huambo Cultural Centre), projects that were adjudicated and started during the period.

Clear Angola invariably continues to grow its activity and its turnover increased by 18.2% when expressed in local currency and 9.9% when expressed in Euros, attaining the amount of 57.5 million Euros, even after having had a growth of 43.5% in 2010 that followed on a growth of 35% in 2009.

Indeed, in 2011, Clear had an active role in the majority of the residential and office block projects that were being built in Luanda, such as Torre Dipanda, Torre Atrium, the Total building, the Sonangol Distribuidora building as well as in other areas, examples of which are the Hospitals of Sambizanga, Cazenga and Futungo, which endowed the company with a growing and valuable affirmation in the market and also a notable progress in its technical execution capabilities.

The activity mix did not alter significantly, with "electricity" representing 41% of the output (43% a year before), "acclimatization" growing somewhat (29% versus 26% in 2010) and "hydraulics" representing 27% (versus 28% a year before). Finally, "maintenance" generated revenue representing 3%, an amount equal to that of the previous year. Nevertheless, the growth of the revenue in nominal terms from all the specialties compared to that of the previous year should be highlighted.

Socometal has also sought to implement itself in this market even though, for now, its activity has only derived from subcontracting work from Sociedade de Construções Soares da Costa, SA, with the more notable interventions during the year in the "aluminium" area being the Largo do Ambiente Building and the new office block for Total in Luanda.

UNITED STATES OF AMERICA

Prince assumes itself as a nuclear company within the scope of the construction activities of the Soares da Costa Group, in the United States of America.

The company's activity centred on the transport infrastructure construction segment with public clients, validating, thus, the important strategic change made following the company's acquisition by the Soares da Costa Group, in 2008.

Amongst the projects completed during 2011 the most noteworthy are:

SR683/US 301: This 18.3 million Dollar project for FDOT relating to the construction and widening of 2,604 miles of SR 683 (US301) in Sarasota County, Florida, included the reconstruction and widening of the motorway, a new drainage system, improvement in water and sewerage systems and new road signs, was completed during the 1st half of the year, before the deadline, enabling Prince to earn a premium of 580 thousand Dollars for early conclusion.
SR50/West Colonial Drive Last December Prince completed the reconstruction of SR50, a 19.4 million Dollar contract, that consisted of the widening from 4 to 6 lanes of this primary connecting artery between Clermont and Orlando. Started in the summer of 2009, this project was completed within the deadline, earning Prince two incentives totalling 1.3 million Dollars.

• Other projects – Prince also completed, in 2011, two other projects adjudicated by Liberty Mutual during the summer of 2010: SR50/Dean Road in the amount of 10.6 million Dollars and Narcoossee Road in the amount of 9 million Dollars.

Prince continued to develop its capabilities in bridge construction. At the end of 2010 Prince had 13 bridges under construction. This number increased to 31 during 2011. This diversification will allow Prince to increase its competency in projects in this segment and will make it more competitive in projects that combine motorway construction with bridges.

Of note, within the scope of the geographical expansion of the company's activity, is the opening of offices in Dallas, Texas, where proposals have already been submitted and the expectations are of the adjudication of some projects.

OTHER INTERNATIONAL MARKETS

In addition to the core markets: Portugal, Angola and the United States of America we present below a summary of the main aspects of the company's activities during 2011, carried out in other international markets through its subsidiaries, joint ventures and associated companies: Mozambique, Romania, S. Tomé e Príncipe, Brazil, Costa Rica and Israel.

MOZAMBIQUE

Mozambique is also a market of historic permanence for Soares da Costa. In addition to the activity carried out by its permanent establishment, activity is also carried out through the Mozambican subsidiary, Soares da Costa Moçambique, S.A.R.L., whose share capital is 80% held by the Group.

This market merits an important reference in this report not only due to the significant increase in turnover and profitability achieved but also because of the relevance, quality and importance of the works/projects being carried out.

One of the internationally most relevant public events for Mozambique in 2011 was the organization of the X African Games. The dedication of the intervening parties to the construction of the Olympic Village, respective infrastructure, training areas and the Olympic pools complex, permitted meeting the objectives, with the delivery of the 848 apartments on the due date, creating the ideal accommodation and event conditions for the athletes present at the X Games, which took place during September 2011. The professionalism and capacity of the company continue to reflect an image of credibility and trust, recognized by the market in general, be they public or private entities.

The evolution of the rehabilitation of Estrada EN 221 (Road), namely the two lots contracted to SDC, was conditioned by the extreme delay in the formalization of the Portuguese Commercial Credit Facility underlying it. Despite the resulting constraints, the human resources necessary were not demobilized so as to guarantee a rapid start-up as soon as the necessary conditions were in place, which occurred on the threshold of the third-quarter of 2011.

With all the human and technical resources mobilized, the Ponte de Tete (Bridge) already evidences an appreciable progress, with the stake construction (on land and in water) pace progressively improving with the experience gained, whilst the abutments and pillars of the super-structure are being raised. Except for the consequences of a possible overflow, above the norm, of the Zambezi River, on the normal evolution of the works (as a result of the rain typical in this season and in this area), all the indications are that the conditions have been garnered to guarantee regular and sustained production and productivity indices. This infrastructure involves both the constructing company as well as the Group concessionaire (integrated in the company Estradas do Zambeze), and is of particular importance to this Mozambican regional road network and to the connections to the Interland countries, namely Malawi, Zambia and Zimbabwe.

Additionally, regarding Soares da Costa Moçambique, SA, this subsidiary completed the following projects during 2011:

● Construction of the new building for the Direção Províncial do Plano e Finanças Inhambane;
● Finishings works of the Millennium Developers building;
● Construction of the Petromoc Moatize gas station (Tete);
● Construction of the Mosteiro das Irmãs Clarissas (Monastery) Namaacha;
● Construction of the Petromoc Muelé gas station Inhambane;
● Rehabilitation of the official residence of the Banco de Moçambique Maputo;
● Rehabilitation of the facilities of the TDM Call Centre Maputo;
● Adaptation of the branch facilities of the Banco Único in Matola, in Sommershield and in Mica;
● Construction of the Feira do Artesanato (Handicraft Fair) parking lot Maputo.

and started the following works:

● Construction of the INSS building Tete;
● Construction of the Hotel Vip Inn Beira parking lot and conference centre Beira;
● Construction of the TVCABO headquarters in Beira;
● Construction of the twin building of the Hotel Vip Inn Beira (2nd Phase);
● Demolition of the existing buildings on the Ex-Facim property;
● Construction of the Petromoc Zoo gas station Maputo.

ROMANIA

During 2011 the following works were completed in this market:

• Pitesi Water and Sewerage Infrastructure, a project carried out in consortium with MAEC (with Soares da Costa leading the consortium), with an executed turnover volume of 18.2 million Euros, and in respect of which the delivery was formalized on 16 December 2011;

• Galati Water and Sewerage Infrastructure, a project carried out in consortium with MAEC (with Soares da Costa leading the consortium), with an executed turnover volume of 40.7 million Euros, completed in November 2011 and under guarantee until November 2012;

• Accesses to the Vutcani wind farm in Vaslui, Romania, a project for the client Global Services Provider (EDP Renováveis – Espanha) with a contractual amount of 4.3 million RON (1.05 million Euros), a joint-venture project with ISIS Europa (50/50) and in which the latter is the Consortium leader; completed in November 2011;

• Corugea Bypass in Tulcea, Romania, a project for the consortium Alpha Wind/Beta Wind/Enel Green Power Romania, with a contracted amount of 610 thousand RON (140 thousand Euros); a project undertaken by a joint-venture of the company with ISIS Europa (50/50), with Soares da Costa leading the consortium; work was finalized in November 2011.

Work is on-going on the access works to the Casimcea and Alpha Wind wind farms, both in Tulcea.

BRAZIL

Brazil, in line with the Group's strategic plan, is considered one of the priority markets in terms of selecting new geographies for the company's activities. 2011 formalized the start of this expansion into Brazil. To this end, Sociedade de Construções Soares da Costa, SA set up a branch in this territory in June 2011, enabling it to conduct new business, directly, in the future.

In addition to the commercial activity carried out, aimed essentially at private clients in the industrial area, it should be noted that through another entity named Terceira Onda Planejamento e Desenvolvimento, Ltda., in which Sociedade de Construções Soares da Costa, SA holds 50% of the share capital (the remaining 50% being held by a local construction company), the participation in two civil construction projects, integrated in an investment undertaken by the cement company Votorantim designated "3ª Onda de Investimentos da Votorantim Cimentos", was already possible during this first year.

The first contract, for the civil construction of a cement grinding plant in S. Luís do Maranhão, in the amount of 12.7 million Reais, with an 8 month execution period, started in March 2011 and was finalized in November of the same year.

The second contract, for the civil construction of a 5,000 tonne/day production line in Rio Branco do Sul, Paraná, amounts to 36.3 million Reais and, having also started in March 2011, has its completion foreseen, within the deadline set, for July 2012.

The Brazilian company Soares da Costa Brasil, Lda., wholly owned by the Soares da Costa Group, was also set up and is registered with CREA (Conselho Regional de Engenharia e Agronomia – Regional Engineering and Agronomy Council), which endows upon it the legal capacity to carry out activities in that country.

The approach vis-à-vis a new market always represents a challenge, be it through cultural or legal differences or due to the financing needs posed by the investment required. However, the presence of the company in Brazil, with the ambition of staying on permanently, is assumed to constitute an important vector of the current strategic plan.

S. TOMÉ and PRÍNCIPE

The activity in this market is carried out through the subsidiary: Soares da Costa, STP Construções, Lda. The year 2011, with the conclusion of the work on the Trindade High School (inaugurated officially at the end of August), was characterized by a reduced activity level. At the end of the year work was started on the extension project of the Banco Internacional de São Tomé and Príncipe headquarters, contracted in November following the selection of the company out of six firms invited to bid and in respect of which the company had the second best financial proposal, benefitting from the technical evaluation result to win the tender.

Between the end and the start of the projects referred to above, in addition to various interventions in the Palmar Central shipyard the company carried out various works at Resort Bombom for the HBD Group, a South African group with economic interests in the region and which approximation to the Group might be of great interest in the future.

COSTA RICA

The construction activity in this market is carried out through Sociedade de Construciones Centro-Americanas, SA, a Costa Rican company, wholly owned by the Construction area sub-holding company.

In 2011, this company's activity was fundamentally centred on the rehabilitation and execution of the new deck of the bridge over the Virilla River on the General Cañas (National Road no. 1) motorway, in an amount of approximately 2 million Dollars.

ISRAEL

In Israel, the participation of the construction area takes place in collaboration with the Group's concessions area, within the scope of the Telavive Metro project. In addition to Sociedade de Construções Soares da Costa, SA's branch, this company also has a 30% shareholding in the consortium "Israel Metro Builders" (IMB).

This project, as explained in last year's Management Report, was interrupted by the project owner, who unilaterally terminated the concession contract; international arbitration proceedings are running their course and will ultimately decide this conflict.

The company shares the conviction of the concessionaire entity, the direct party to the process, that there were no grounds for that unilateral termination and awaits the Arbitration Court's decision on this litigation. It, however, recognizes that the realisation of the assets relating to this project, namely those that result from the proportional incorporation of IMB, may be dependent on the direction this decision takes.

PROFITABILITY

If turnover had the behaviour noted above, the operational results of the construction area stood at a level of relative efficiency. Indeed, EBITDA totalled 47.7 million Euros, dropping from the 53.9 million of the previous year due to the combined effects of the decrease in turnover and the lower profitability level of the business carried out in the United States of America in 2011, which determined a slight reduction in the global margin, from 6.4% to 6.0%.

Financial results suffered a moderate deterioration from -14.1 million Euros in 2010 to -16.9 million Euros in 2011, denoting the influence of the general aggravating factors affecting the financing conditions, even if benefitting from a comparatively favourable evolution in the foreign exchange balance.

The consolidated net income of the Construction business area amounted to 7.4 million Euros, lower than the 14.1 million attained in 2010 (Construction business area + Industry business area).

5.2 CONCESSIONS

From the economic context described in a previous chapter, and with a special impact on the concessions area, the restrictions to the financing of the economy and the budget re-equilibrium programme of the Portuguese State standout; significantly conditioning the launch of new projects or even the progress and execution of projects already launched. Despite this, the Concessions activity in the Soares da Costa Group recorded, in 2011, a manifestly positive development, the Group's main aspects of note in this area, being:

TRANSPORT CONCESSIONS

In the scope of road concessions, under development and under the management of the Concessions business area of the Group, there are currently 1,146 Km of roads (of which 446 Km with a motorway profile) under construction, in operation and under maintenance, corresponding to a global investment of 1,532 million Euros.

Of note are Scutvias (the Beira Interior motorway) and San José–Caldera (Costa Rican motorway), already operating at cruising speed, achieving positive results that enable us to estimate the generation of cash flows that will permit the combined payment of dividends and of shareholder loan interest in an amount of approximately 44 million Euros over the next three years.

Construction worked proceeded at a good rhythm on the Transmontana motorway, and this project is expected to be completed during the course of the current period. This project's accumulated investment amount already ascends to 402 million Euros. Finally, and no less important, reference goes to the project Estradas do Zambeze (Roads), in Mozambique, which conclusion is foreseen for 2014 but already permits the operation and maintenance of approximately 700 Km of roads.

Below are analysed the main aspects of the activity of the Group's subsidiaries in this sub-segment of road concessions during 2011:

• Scutvias – Auto-Estradas da Beira Interior, S.A.

The Portuguese State defined the sector's financing options, deciding on the application of the principle "user/payer" on road concessions previously available without costs for the users (SCUT). In respect of the Beira Interior motorway

concession, the toll regime applicable to vehicles circulating on it came into effect on 8 December 2011, in accordance with Decree-Law 111/2011 of 28 November. Scutvias decided to transfer the responsibility for the supply and installation of the MLFF (Multi-Lane Free Flow) system to a company-vehicle named Portvias – Vias de Portagem, SA with the objective of separating the risks that the MLFF system could pass on to Scutvias itself.

This legislative change had a considerable impact on the level of the concession traffic, which combined with the scenario of economic crisis in existence led to traffic recorded coming in below that expected and below that recorded in the previous year. Indeed, traffic volume attained 99.2 million vehicles, to which corresponds an average daily traffic volume (ADTV) of 9,671 vehicles/Km, circa -8.5% below that of 2010. On the other hand, traffic recorded between 8 December and the end of the year indicates a strong contraction, a clear result of the introduction of tolls.

Nevertheless, turnover increased by some 2% given that the services rendered in general and the receipts by band, in particular, were influenced by the increase, contractually foreseen, in the higher limit of band 1 traffic. The receipts by band are responsible for 96.6% of the total revenue and gains and correspond to the road traffic valuation determined for the year 2011. Bearing in mind the unilateral decision taken by the Portuguese State to start toll collection in December 2011, the receipts by band were calculated based on the real traffic up until that date and on an estimated traffic from that date to the end of the year (24 days). The estimated traffic corresponds to the traffic foreseen in the Base Case, adjusted for the deviation calculated between the traffic foreseen in the base case for 2010 and the real traffic recorded in that same year.

The increase in supplies and external services in general and in the caption maintenance and repairs, in particular, brought EBITDA down slightly (-2%) to 92.4 million Euros, a decrease which, with an unchanged annual amount in depreciation and amortization costs, resulted in a small decrease in operating results from 60.6 million Euros to 58.6 million Euros. Nevertheless, the decrease occurring in the net financing costs of the company, from 42.0 to 39.0 million Euros, improved the financial result thereby producing a net income in this subsidiary in the order of 12.7 million Euros (10.0 million Euros a year before).

It must be indicated that the data reflected to above refer to Scutvias in its entirety, whilst the company is consolidated based on the proportional interest held by the Group (33.3%).

• Autoestradas XXI, Subconcessionária Transmontana, S.A.

The delay in the concession of the formal approval (visto) by the Court of Auditors, which only occurred on 15 July 2010, resulted in the request for an extension of the deadline to conclude the project of a further 13 months, request which was approved by the Assistant Secretary of State for Public Works and Communications, by EP – Estradas de Portugal, S.A. and by the Instituto Nacional de Infraestruturas Rodoviárias (National Institute of Road Infrastructure) (InIR). The formalization of the agreements referred to above and the respective addenda to the contracts in place occurred during the year 2011.

During this period road circulation on lots 2, 7, 10 and 13, in their entirety, and lots 5 and 12, in part, came into service, with tolls starting to be charged on lot 10.

For 2012, the prospects are for a high rhythm of construction, at a level adequate to guarantee meeting the deadlines established to complete the work. The company will continue to rely on a policy of quality in order to satisfy both the grantor and its shareholders, employees and other stakeholders. The increased efficiency of the internal controls, through operational adjustments, used as a means to obtain productivity and competitiveness gains, will continue to be one of the strategic lines of the company.

During 2011 this company's turnover amounted to 250 million Euros, EBITDA totalled 7.6 million and net income 928 thousand Euros, with Soares da Costa Group's share of these indicators being 50%.

• Estradas do Zambeze, SA

This Mozambican company has its registered office in Maputo and is 40% held by the Group. The concession contract signed with the State will have the duration of 30 years and covers the conception, construction, operation and maintenance of the project named "Nova Ponte de Tete e Estradas", with a system of real tolls together with a subsidiary mechanism that guarantees the receipts. The concession includes the new Tete bridge, with circa 2 Km, and approximately 14 Km of new 2x1 roads; the rehabilitation, financing, operation, maintenance of the national roads between Cuchamano and Zóbuè (N7 and N8), with a stretch of approximately 260 Km; the maintenance of the road between Cassacatiza and Tete (N9), with a length of approximately 268 Km; the maintenance of the road between Colomué and Mussacama (N304), with an extension of approximately 156 Km; and the operation and maintenance of the Samora Machel Bridge in Tete.

The date established for the start of the concession period was 1 April 2011. At the beginning of May the first transfer of receipts from the grantor to Estradas do Zambeze, originating from the collection of border taxes, took place.

This company contributed – numbers already reflected at the consolidation percentage in the Group – with a turnover of 11.6 million Euros (2.0 million in 2010), recording an EBITDA of 280 thousand Euros and a net income of 204 thousand Euros versus, in these last two captions, inexpressive amounts in the previous year.

In terms of the road operation and maintenance activity, carried out by the associated company Operadora das Estradas do Zambeze SA, the assistance and vigilance activity started on 1 October 2011.

• Soares da Costa Concessions USA

This North-American company wholly owned by Soares da Costa Concessões, SGPS, SA, was incorporated in 2010 with the object of working the North-American market in the areas of investment in infrastructure projects, positioning the Soares da Costa Group in the concessions market in the United States of America, which is still at a growth and development phase. Its technical competence was soon recognized in that it was pre-qualified for the Tampa-Orlando High Speed Rail and Georgia West by Northwest Managed Lanes projects. However, given decisions taken at political and public strategy guidance level, these projects were cancelled by the governmental entities of the States of Florida and Georgia, respectively.

Nevertheless, promising horizons for the development of 3P projects in the North-American market are opening up in 2012 and beyond.

Still within the transport concessions segment, but now focusing exclusively the rail sub-segment, note is given of the activity carried out:

• ELOS – Ligações de Alta Velocidade, SA

This company was incorporated in 2010 following the adjudication to the consortium co-led by Soares da Costa of the public private partnership contract for the construction, financing, maintenance and availability of the Poceirão-Caia segment that forms part of the future high-velocity train line between the cities of Lisbon and Madrid. Given the Group's shareholding in the company (16.7%) it is not consolidated and the investment made is recorded at cost.

At the end of 2010 ELOS prepared all the elements necessary for the reformulation of the concession contract. The company was notified of the decision adjudicating the reformulated concession contract on 19 January 2011. Subsequently, on 8 February, the new Financial Close of the concession was made within the scope of the reformulated concession contract. Following this action, which objective was to settle the doubts raised by the Court of Auditors, namely in respect of changes in the risk profile of the grantor, the formal approval by the said Court was expected for soon which, however, did not come to happen.

The constraints provoked by the Portuguese State's inability to guarantee the financial execution of the concession contract, and the restrictions placed by the banking entities on the approved financing lines resulting from the failure to obtain the formal approval, resulted in a significant slowdown of the company's activity in the second-half of the year, with the activity having been reduced to a minimum that guarantees the meeting of the commitments established with the grantor and with the financial entities.

In this context, the company saw itself in position where it was obliged to continue to comply with the punctual servicing of the debt, which constitutes a peculiar "gap" given the slowdown in the activity induced by the grantor, due to the absence of the formal approval. For ELOS to honour these obligations it was, however, given the impossibility of using the existing approved financing lines, necessary for its shareholders to approve in a General Meeting, in December 2011, an increase in the company's shareholders equity.

Despite the uncertainty that had been increasing throughout the year (more intensely in the second-half of the year), the company continued to develop the ante-project and the remaining technical documentation relating to this phase of the project, having completed it, and thus, meeting its main objective for the period.

Subsequent to the period end, the Court of Auditors decided not to concede the formal approval to the concession contract.

To close this section reference is made to the project:

• Telavive Metro Project - Israel

Regarding this project, it is important to refer to the litigation existing between the grantor (the State of Israel) and Metropolitan Transportation Solutions (MTS), a concessionaire company in which the Soares da Costa Group holds, through Soares da Costa Concessões, SGPS, SA, a shareholding of 20%. During the 3rd quarter of 2010, MTS was confronted with the grantor's unilateral position to resolve the contract, for alleged non-compliance by the concessionaire, unless the latter accepted both to make a number of concessions/compensations to the grantor as well as other conditions. The Concessionaire decided to reject both the Grantor's position as well as the conditions imposed – that would make the project unviable - and referred the dispute to the Arbitration Court for a decision, undertaking all the necessary formalities. The arbitration proceedings have taken place with the normalcy and delay typical of these kinds of processes. It is our conviction that the proceedings underway are being carried out with the necessary independence and in compliance with the international canons, and we therefore await a decision, during 2012, that safeguards the interests of the Group.

CAR PARK CONCESSIONS

Despite the economic retraction and the consequent inevitable decrease in the use of individual transport in favour of public transport, the subsidiary CPE – Companhia de Parques de Estacionamento, S.A. attained a new total revenue maximum of the last three years, in 2011, of close to 5.1 million Euros. The significant reduction achieved in operating costs (approximately 0.5 million Euros), as a result of management measures implemented, enabled the company to achieve positive results for the first time. Of note is the EBITDA growth that reached, in 2011, an amount of 2.6 million Euros, corresponding to a margin in excess of 50% of revenue earned.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
FULL-YEAR 2011 RESULTS
/ GRUPO SOARES DA COSTA SGPS, SA	SOARES DA COSTA GRUPO IGPS

(Million Euros)	2011	2010	2009
Total operating revenue	5.1	4.9	4.9
Total operating costs	4.7	5.2	5.2
Amortization and depreciation	2.3	2.4	1.2
Operating costs excl. amort./deprec.	2.4	2.8	3.9
EBITDA	2.6	2.1	0.9
EBITDA Margin	52.0%	43.2%	19.3%

Key Performance Operators of CPE – Companhia de Parques de Estacionamento, S.A.

It still presents, however, a strong negative net result (-3.0 million Euros) due to the high level of debt servicing and to the non-recurring recognition, in 2011, of an annulment of deferred tax assets of 1.2 million Euros.

The car park segment, in the Soares da Costa Group, is complemented by Costaparques - Estacionamentos, S.A., whose activity is circumscribed to the management of the Galeria Central car park, in Campo 24 de Agosto, in Oporto and to the operation of the subterranean car park Gemini and that of its defined surface parking area, in Oliveira de Azeméis, with a total of 1,860 parking spaces.

Whilst the occupation rates of the Galeria Central Car Park in Campo 24 Agosto – Oporto remains stable, the Gemini Car Park, in the square with that name, in Oliveira de Azeméis, has still not attained a minimally satisfactory demand, which will only happen with the maintenance of an effective monitoring system over parking in the surrounding roads. Therefore, we recognize the appropriateness of the measures taken by the company in establishing a communication and information platform, implemented in 2010, that will permit the Municipality of Oliveira de Azeméis to issue payment notices, which results will now be incremented with the charging of a maximum daily fare, and to apply fines on payment notices not settled. Costaparques will hence see its objective met, through a process with evident results since it maintains its contractual percentage of the receipts, which will now have an increase in the maximum daily fare of 2.5 Euros to 8.5 Euros, further increased by the deterrent effect of the fines.

The company presented an operating revenue volume of 303 thousand Euros, 20% higher than that earned in the previous year and a positive EBITDA of 59.6 thousand Euros.

WATER AND ENERGY CONCESSIONS

• Indaqua, S.A.

Indaqua, S.A. is a company that results from a strategic partnership in the water sector created by some national economic groups, with competencies in different business areas, active in the environmental sector and in the management of the water cycle, including the treatment, transport and distribution of water and the collection and treatment of wastewater.

Soares da Costa Concessões SGPS (and through this subsidiary the Soares da Costa Group) has a 28.57% shareholding in the capital of Indaqua, which is consolidated using the equity method.

During 2011, Indaqua continued the management, at normal pace, of the concessions previously contracted. It is to be noted that the Fafe, Sto. Tirso/Trofa and Feira concessionaires recorded important increases in water volumes invoiced. In consolidated terms, Indaqua presented operating revenue of 54 million Euros and operating costs of 37 million Euros for an EBITDA of circa 17 million Euros. Net financing costs, in consolidated terms, were approximately 10 million Euros. Indaqua, S.A.'s net income was 766 thousand Euros.

The year just ended was intense in terms of searching for new geographical markets in South America (Brazil and Peru), in Africa (Angola) and in Asia (Macau). In Angola, Indaqua started its activity through the companies Vista Water and Akwangola. The prior, during 2011, had in execution the technical assistance contract to the programme "Água para Todos

(Water for All)" for the Ministry of Energy and Water. During the year it was adjudicated the contract for advisory services in the creation and start-up of Águas de Saurimo e Dundo (Waters of Saurimo and Dundo) and the contract for training in the operation and maintenance of the basic sewerage infrastructure, a programme sponsored by the European Union. Vista Water presented total operating gains, in 2011, of 1.7 million USD and Akwangola of circa 0.5 million USD.

In 2011 Indaqua was adjudicated a contract for the operation and maintenance of a wastewater treatment plant in Macau, which caters for over half-a-million people, for a period of 5 years. The biological treatment of the wastewater will be carried out in reactors with membrane technology. With this new membrane technology, the Macau WWTP will become one of the world's largest infrastructures with this type of treatment. This tender won by Indaqua is worth over 28 million Euros.

This associated company is not only reaching a phase of maturity but, with the new business, is also seeing its international dimension significantly reinforced.

• Hidroequador Santomense – Exploração de Centrais Hidroeléctricas, Lda.

This company has a 60% shareholding in the company Hidroeléctrica STP, Lda., in S. Tomé e Príncipe, that has as its object the conception, study, construction and operation of energy generating plants, management of energy resources, electromechanical, electrical and civil projects, with the remaining 40% belonging to EMAE, the public company responsible for the distribution of electricity and water in S. Tomé e Príncipe. At 31 December 2011, the company had in operation the Guegue hydroelectric power plant, in São Tomé, and the Papagaio hydroelectric power plant, on the Príncipe Island.

Work on the construction of the Bombaim hydroelectric power plant progresses. The road which had subsided and blocked the access to the work site and stopped the work on the hydroelectric power plant has been recovered and was opened to traffic. The most important equipment, that has already been acquired, namely generators, turbines and transformers, as well as a large part of the pipeline, is warehoused at the port of S. Tomé e Príncipe, awaiting transport to the works and installation. The corresponding medium voltage overhead line has been erected and is ready to be connected.

Hidroequador Santomense and Hidroelectrica Lda signed, at the end of 2009, a contract for the supply of electricity generated by a set of generators installed at the Bobo Forro II Plant, with the Government of S. Tomé e Príncipe. Total revenue from the operation of this Plant amounted, in 2011, to 2.4 million Euros.

In accordance with the provisions of the contract in force, the S. Tomé e Príncipe Government proposed, in June 2011, the advance acquisition of the set of generators and transformers, with the corresponding negotiations taking place as from the end of September 2011 and also including the substation attached to the referred equipment and which guarantees the interconnection to the public grid. Negotiations were completed at the end of January 2012 and the proposal made by this company's shareholders has been accepted by the high representatives of the Government of S. Tomé e Príncipe, who undertook to define the terms that fit the intended transaction.

• Soares da Costa Hidroenergia, SA

Soares da Costa Hidroenergia, S.A. was incorporated in March 2010, under the majority control of Soares da Costa Concessões, SGPS, SA and its object is the construction and operation of hydroelectric power plants. In December 2010, it celebrated four contracts for the implementation of hydroelectric operations covering a period of 45 years, two on the Zêzere River, one in Abrantes and another in Castro D'Aire, with an installed capacity totalling approximately 28 MW, at a total investment of circa 44 million Euros. At 31 December 2011, the investment already made in this subsidiary totalled some 10 million Euros.

During the 2011 economic period the company took steps and made contact with different entities in an effort to find a new partner who combines the technical profile with the desired financial capacity, to develop the hydroelectric plants adjudicated. However, it worked on and presented to the competent authorities the studies relating to the Proposed Scope

Definition for the implementation of the hydroelectric operations, which construction, depending on the projects, is foreseen for 2012 and 2013, with the industrial start-up expected in 2014.

DEVELOPMENT OF NEW CONCESSIONS BUSINESS:

In this matter and in the domestic market, reference must be made to the new Hospital Oriental de Lisboa (previously called "Todos-os-Santos") project, for which the Consortium SALVEO, led by Soares da Costa Concessões SGPS, has already received a preliminary adjudication. The hospital is to be located in the east side of Lisbon, and will substitute five of the units presently operating in central Lisbon (the São José, Capuchos, Desterro, Santa Marta and D. Estefânia Hospitals) serving a total of 950 thousand inhabitants. The hospital, with 165,000 m² will have a construction period of three years and the contract concession period is expected to last for thirty years. The final adjudication of this project is awaited.

In the external market, the Group, through several of its subsidiaries, has made relevant commercial inroads and noteworthy concession tenders for which we have proposed include, namely the Chincero-Cusco international airport in Peru and the S. Petersburg Metro, in Russia, both under evaluation by the grantors and awaiting development.

Having completed a brief panorama of the general activity of the subsidiaries, joint ventures and associated companies of this business area during 2011, we now present the general consolidated indicators of this business segment:

Key Performance Indicators - Concessions

(Million Euros)	2011	2010	Var.
Turnover	187.6	102.2	83.6%
EBITDA	43.3	34.0	27.3%
EBIT	29.0	19.9	45.9%
Financial Results	-27.8	-28.2	-1.4%
Consol. Result Attributed to Group	-1.0	-6.9	-85.9%

The concessions business is based, in general terms, on the realization of large scale investments with long-term returns and a moderate risk and requires a strong financial structure and a significant dimension. The booster characteristic of the concessions area in the Construction segment is evident, constituting, in reality, a complementary area with important synergetic factors.

Concessions Business Area – Turnover by Company

Amounts in million Euros

Company		2011		2010	Var.
	Gross	Adjust.	Consol.	Consol.
Soares da Costa Concessões, SGPS, S.A.	2.2	-0.8	1.4	0.2	832.8%
C.P.E. - Comp. De Parque de Estacionamento, S.A.	4.8	0.0	4.7	4.9	-3.0%
COSTAPARQUES – Estacionamentos, S.A.	0.3	0.0	0.3	0.3	20.6%
Soares da Costa Serviços Téc. e de Gestão, S.A.	0.9	-1.4	-0.5	1.1	-
SCUTVIAS – Autoestradas da Beira Interior, S.A.	39.1	0.0	39.1	38.3	2.2%
Portvias - Portagem de Vias, S.A.	0.6	-0.1	0.5	0	-
MRN - Manutenção de Rodovias Nacionais, S.A.	13.8	-13.8	0	4.3	-100.0%
Estradas do Zambeze, S.A.	11.6	0.0	11.6	2.0	476.8%
OPERESTRADAS XXI S.A.	4.4	-1.8	2.6	0.1	-

- -14.2% -38.5%
-





163.7%

The consolidated accounts of Soares da Costa Concessões, S.G.P.S., S.A. are revealing of the specificity of this business segment: strong positive operating results (29.0 million Euros compared to the 19.9 million a year before, growing by 45.9%), even higher EBITDA (+43.3 million Euros, versus +34.0 million a year before, that is +27.3%), due to significant levels of amortization/depreciation¹⁰, evidencing margins to turnover without parallel in other segments, but with negative financial results of a relevant amount (-27.8 million Euros, practically in line with the previous year), reflecting the cost of financing the investments.

With an activity mix, as shown above, in which mature investments generating profits coexist with investments that have yet to reach break-even and some still in the implementation phase, the net result for the Concessions Area progressed quite expressively in 2011, moving from a negative -6.9 million Euros in 2010 to an amount of -1.0 million Euros.

5.3 REAL ESTATE

In addition to real estate promotion, this business area also includes the management of own real estate assets, from which several Group companies physically operate.

Key Performance Indicators – Real Estate

(Million Euros)	2011	2010	∆ %
Turnover	7.1	14.6	-51.2%
EBITDA	4.1	5.5	-26.1%
EBIT	2.5	3.9	-35.7%
Financial Results	-3.4	-4.9	-30.9%
Consol. Result Attributed Group	-0.5	-0.7	-31.8%

Consolidated turnover for this area was 7.1 million Euros, an amount slightly below half that made the previous year. The table presented below breaks these amounts down by company, revealing the decreased contribution of Soarta, that in 2010 had sales of some significance relating to the Soarta-República projects, in Matosinhos and Alcântara in Lisbon, which have been practically sold in their entirety.

¹⁰ Due to the changes introduced by IFRIC 12, this statement is not accurate for concessions that apply the financial asset model of accounting.

The consolidated indicators in this area reveal an EBITDA of 4.1 million Euros and an operating result of 2.5 million (which compare with 5.5 and 3.9 million Euros in 2010, respectively) and a consolidated result for the period of -0.5 million Euros, compared to the amount of -0.7 million Euros recorded in the homologous previous period.

Real Estate Business Area – Turnover by Company

Amounts in million Euros

Company		2011	2010	Var.
	Gross Adjust.		Consol.	Consol.
SOARTA – Soc Imob. Soares da Costa, S.A.	1.0	0	1.0	8.2	-87.4%
CIAGEST – Imobiliária e Gestão, S.A.	4.5	0	4.5	5.1	-11.3%
Mercados Novos – Imóveis Comerciais, Lda.	0.1	0	0.1	0.3	-64.6%
Cais da Fontinha – Investim. Imobil., S.A.	0.6	0	0.6	0.2	227.4%
HABITOP – Sociedade Imobiliária, S.A.	0.3	0	0.3	0.1	353.6%
NAVEGAIA - Instalações Industriais SA	0.1	0	0.1	0.1	0.1%
Soares da Costa Imobiliária, Lda	0.4	0	0.4	0.6	-36.3%
Total	7.2	0	7.1	14.6	-51.2%

Regarding the main projects, 2011 saw the marketing phase of the Cais da Fontinha project, in Gaia, and the conclusion of the construction of the Condomínio Residencial da Talatona (Residential Condominium) project, in Angola, which marketing will occur in 2012.

Even though the real state area is not nuclear to the strategy of the Group, opportunities for business will not be lost, namely those occurring in the scope of the urban rehabilitation policies in Portugal, and in the core international markets in which the Group is present.

5.4 ENERGIA PRÓPRIA

The consolidated Financial Statements were influenced for the first time by the performance of the companies constituting the Self Energy Group. As previously stated, the Group acquired at the end of 2010 a controlling interest (57.26%) in the company Energia Própria, SGPS, SA, holding company of the Self Energy Group, which involved an investment of 6.5 million Euros; this company wholly owns the companies Self Energy Serviços de Energia, SA, the first ESCO (Energy Services Company) company operating in Portugal, Self Energy Solutions, SA, sector leader in solar and wind micro-generation solutions and Self Energy Engineering & Innovation, SA, dedicated to engineering and innovation, research and technological development services in the area of energetic efficiency and renewable energy.

Energia Própria also holds a controlling interest in Self Energy UK and has shareholdings in other companies in Portugal, Mozambique and Espanha.

During the period, the holding company "Energia Própria" was merged with its two subsidiaries Self Energy Serviços de Energia, SA and Self Energy Solutions, SA, thereby concentrating the various attributes of the "Energy" business (energetic

efficiency, micro-generation and construction of photovoltaic plants) in a single entity seeking greater robustness, a position of reference in the market, synergies and cost rationalization.

In 2011 the energetic efficiency business, with the brand "Self Energy ESCO", had a sustained growth and operating margins in line with historical results prior to its integration in the Soares da Costa Group, of note being the turnover increase and the net positive contribution brought in by the energetic efficiency areas in the United Kingdom, Spain and Mozambique. This sub-segment represents circa 36% of the turnover of this area. On the other hand, the micro-generation business in Portugal, with the brand "Self Energy Solutions", suffered a slight decrease.

The photovoltaic plants area was the one most affected by the economic crisis as it is totally dependent on the access to finance.

The deadlock of projects such as the 8MW one in Ferreira do Alentejo adjudicated in 2010, despite the Preliminary Information Request's (PIP) validity until October 2012, greatly affected the indicators that are presented below in consolidated terms:

(Million Euros)	2011
Turnover	8.6
EBITDA	-2.1
EBIT	-2.2
Financial Results	-0.7
Consol. Res. for Period Attrib. Group	-1.9

Key Performance Indicators - Energia Própria, SGPS, SA

Despite the economic and financial situation, which realistically will not improve in a particularly relevant manner in 2012, the prospects for this area are of a significant improvement in the profitability indicators.

The energetic efficiency area will have new challenges and opportunities in Portugal through the regulation of the ESCOs (Energy Services Companies), the implementation of the ECO-AP programme that aims to attain a 30% savings in energy use in State buildings and also through the opportunities arising with the release of the European Fund JESSICA, for urban rehabilitation. In the United Kingdom, the photovoltaic mini-generation business has gained new interest for plants with up to 250 KW following important legislative changes. At the energetic efficiency level, the existence of mechanisms such as "Green Deal" or "Renewable Heat Incentive" will also turn some projects under study at some clients for over a year, and that were not economically viable at the time, viable. To this end, a memorandum of understanding signed in 2011 with a large Facilities Management Company will enable Self Energy to act in the energetic efficiency area on a portfolio of over 50 buildings, the majority of which belonging to public entities. The commercial order book in the United Kingdom exceeds 10 million Euros, with good financing prospects in the market itself.

In the micro-generation area one will see the gradual decline in the subsidized tariffs and in the capacity made available at those tariffs, up till the moment that the prices attain parity with the real costs of the grid to clients ("grid parity"). At that point, the regulatory environment will have a minor impact and new opportunities will surge, namely through the introduction of formats such as net metering, which are estimated to start being tested in Spain in 2012. This new framework is also a great opportunity for positioning both the brand "Self Energy Solutions" and its Authorized Agents network.

The photovoltaic plants area will have as its primary objectives the execution of works-in-progress and their connection to the grid in the established timeframes, the potential disposal of some of the plants in operation for over two years, namely through the company Rooftops of Spain and the start-up of the installation of the Project in Poland, the main development Project of the company and that may come to represent an appreciable turnover.

6. INDIVIDUAL ACCOUNTS

The individual accounts of Grupo Soares da Costa, S.G.P.S, S.A., are also prepared in accordance with International Financial Reporting Standards (IAS/IFRS), as adopted by the European Union. They reflect the realization of a turnover of 6.2 million Euros, higher than that recorded in the previous year (4.0 million Euros). This revenue relates essentially to the rendering of technical management services to other Group companies.

Operating results were negative in 0.7 million Euros but substantially better than those of the previous period which amounted to -3.2 million Euros.

Overall financial results amounted to +0.8 million Euros (versus the 29.4 million a year before), with the difference being influenced by the very expressive reduction in revenue and capital gains on shareholding disposals, that in 2010 amounted to 33.8 million Euros and in the year just ended did not exceed 3.7 million Euros.

Indeed, dividend earnings in 2011 from the sub-holding of the Construction area amounted to 3.7 million Euros in 2011 versus the amount of 15.5 million Euros in 2010, a year in which the disposal of the shareholding in BAI also contributed significantly to financial results, without parallel in 2011.

The amount of net assets increased from 489.1 million Euros at the end of 2010 to 542.3 million Euros (+53.2 million Euros), significantly influenced by the increase occurring in the amount of loans conceded to Group, associated and other investment companies, included in non-current assets, that increased by 75.2 million Euros, and the reduction of cash and cash equivalents of 11.4 million Euros.

In terms of capital shareholdings and other financial investments no relevant changes occurred.

On the liabilities side one notes, in correlation with the increase in assets, an increase from 271.3 to 329.8 million Euros, again fundamentally influenced by the level of internal debt to the Group, with the caption "group, associated and investment companies" recording an increase of 52.8 million Euros.

Most expressive in liabilities continue to be the medium and long-term debenture loans, contracted towards the end of the 2007 economic period, one having a nominal value of 20 million and an eight-year maturity and the other with a nominal value of 80 million Euros at ten years, both bearing interest rates indexed to EURIBOR. During the year the company paid, on the respective due dates, the coupon interest on numbers 7 and 8 of these debenture issues.

The change in equity amounted to -2.7 million Euros, fundamentally due to the outflow of own funds – distribution of dividends to shareholders (3.5 million Euros) out of part of the 2010 net income – not having been offset by the individual net income earned in 2011, that amounted to 0.9 million Euros.

7. HUMAN RESOURCES

Human resources constitute one of the pillars of the competitiveness and development of organizations. Since the principles and strategic orientation guidelines in matters of human resource development within the Group are already consolidated, there has been a progressive implementation and consolidation of a set of methodologies and good practices designed to promote human capital growth. Below are summarized the most relevant aspects of the Group activity in matters relating to human resources in its varied dimensions:

STAFF RECRUITMENT AND SELECTION

With the aim of aligning human capital with its organizational development strategy, Soares da Costa Group sought to give continuity in 2011 to a recruitment strategy that guarantees the admission of new workers not only with the skills required for the function but also with significant professional development potential.

Internal recruitment was the preferred approach applied during 2011 to satisfy human resource needs, an approach which tends to enhance the employees' career management, with the consequent motivational gains, as well as to reduce costs with external recruitment processes and with the integration of new employees.

During 2011, 21 requests were received to fill 34 functions. By and large these recruitment requests were aimed at closing gaps in the operations of the Soares da Costa Group in Angola. Of greater prevalence were the recruitment and selection processes for the functions of Works Manager, Designer/Planner, Works Dispenser and HVAC (Heating, Ventilation and Air Conditioning) Technicians for the company Clear Angola.

TRAINING

The primary characteristic of the investment in training in 2011 was the number of training hours, 19,833, worth 127 thousand Euros in enrolment fees. This volume covered 4,010 participations involving 1,186 participants. An analysis of the distribution of hours amongst the professional categories reveals that the Senior Staff and the Qualified Professionals used up a significant portion of the training hours. This distribution reveals lower levels of training at the Intermediate-level Staff, highlighting a clear need to act at these levels. "Civil Construction and Civil Engineering" was the thematic area that recorded the highest number of training hours in 2011 – 7,737 hours, followed by "Management" with 3,698 hours and "Work Safety" with 3,329 hours.

By Professional Category	2011
Management	563
Senior Staff	7,334
Mid-level Staff	2,445
Intermediate-level Staff	713
Qualified Professionals	8,658
Semi-qualified Professionals	48
Unqualified Professionals	96
Trainees and Apprentices	12
Total	19,833

By Themes	2011
Computer sciences	180
Computing from a user perspective	1,046
Social and behavioural sciences	167
Civil construction and civil engineering	7,737
Electricity and energy	110
Electronics and automation	225
Engineering and the like	305
Management	3,698
Languages and foreign literature	990
Marketing and advertising	78
Accounting and management	816
Law	431
Unspecified	300
Environmental protection	320
Health	101
Safety and hygiene in the workplace	3,330
Total	19,833

The training events held within the Soares da Costa Group are divided into planned and unplanned training. In the prior were contemplated the training actions resulting from the diagnosis of training needs, whilst the latter relate to training sessions not originally planned, but which need was determined subsequently, such as is the case with participations in congresses, seminars and conferences. In so far as planned training is concerned, the year 2011 had as its main objective to develop in the holders of certain critical functions, a set of technical and behavioural skills that are considered strategic for the improvement of the Group's human capital, namely: Project Management, Languages, Leadership, Business Innovation and Technical Skills in Engineering and Management. Regarding project management, the 2nd edition of the Advanced Management and Negotiation Programme, in partnership with Católica Executive Education Lisbon took place in September 2011. Covering a total of 98 hours, this programme had as recipients Works Managers, Project Managers and Budget Coordinators.

At top management level, 2011 was marked by the Top Management Encounter. This event, led by organizational development consultants, brought together fifty top-level managers for two days, to work on the themes of leadership and business innovation. This Encounter was an important formative moment, with undeniable gains in terms of aligning values and attitudes applied in the leadership of work teams. The methodology adopted combined the speakers' discussions on the themes with animated group dynamics oriented to the sharing, cohesion and the development of work teams.

With a great impact on the sharing and on the transfer of the knowledge existing in the Group, Engineering and Management Thematic Workshops were created. The format used in these workshops brings together internal speakers, experienced on a given theme, who share their knowhow with an audience comprising colleagues with a professional interest in that theme. Given that some of the themes were of an engineering nature, the workshop presentations, where applicable, were complemented with study visits to construction works, where some of the technical aspects discussed in the workshops could be visualized in loco. These thematic workshops in Engineering and Management brought together 1,100 participants and covered the following themes: methodologies used in assembling metallic and mixed structures, reinforcing the energy production capacity at the Alqueva Dam, FIDIC contracts, decentralized production of energy and energetic efficiency, Public Contracts Code, Technical Conferences 2011, sustainability management indicators project, LEED – Evaluation of Sustainable Construction, International Procurement and visit to the Corgo viaduct works.

Finally, 2011 saw the creation of the Academy of Knowledge which, complying with the concept and model of a corporative university, has as its mission to: Promote the sharing of experiences and transfer knowledge from the more experienced generation in the Group to the younger generations; Offer a set of specific formative programmes that aim to develop a series of corporative skills, transversal to the various functional groups; Disseminate a set of values and a behavioural pattern that permits the consolidation of the Organizational Culture required at the core of every company of the Group; Take the formative programmes of a corporative nature to the expatriate employees, namely through e-learning solutions.

In the pursuit of this mission, partnerships are established with the best domestic business schools in terms of developing the formative programmes. In 2011 we formalized the first partnership between the Academy of Knowledge and Católica Executive Education Lisbon, which resulted in the Advanced Project Management and Negotiation Programme. The Academy of Knowledge will increase the qualification levels of the human resources of the Soares da Costa Group and, simultaneously, give them more specific and predictable professional career prospects. We will thus be promoting the improvement of our human capital and, consequently, the capacity to assume more demanding challenges.

INTERSHIP PROGRAMMES

Within the scope of the Prémio Talento (Talent Award) three newly qualified civil engineers saw their investigative work awarded a prize: a 6 month internship at Sociedade de Construções Soares da Costa. The interns had an opportunity to get to know, under the guidance of experienced coordinators, two important functional activity areas in the company: Technical and Technical-Commercial.

The Soares da Costa Group received other types of internships throughout 2011, namely 11 curricular and 4 professional internships. One of the professional interns was received by the company Self Energy Solutions S.A., and the remaining interns were taken in by Sociedade de Construções Soares da Costa, S.A. Amongst the entities promoting internships are CICCOPN, IEFP, the Professional School of Fundão, the Fundação da Juventude (Youth Foundation) and the Escola Superior de Tecnologia e Gestão do Instituto Politécnico de Beja (Higher School of Technology and Management of the Beja Polytechnic Institute). Soares da Costa Group's readiness to take in interns promoted by external entities reflects the high level of social responsibility the Group assumes towards the community it forms part of.

PERFORMANCE EVALUATION

The performance evaluation system in place at the Soares da Costa Group has as its main objectives the promotion of the professional development of the employees, the rewarding of excellence and the increase in the operating results of the various business areas. This system ties individual performance with team, company and Group results, in order to instil joint responsibility, cooperation and cohesion within the work teams. It also sustains an evaluation system that balances performance indicators based on process, activity or task results with qualitative indicators that gauge the pattern of attitudes with which the employees perform their functions. In 2011 some 950 employees were integrated in the performance evaluation process and this total includes not only the employees working in Portugal but also those working in Angola, Mozambique, Romania, Costa Rica and Brazil.

EVALUATION OF POTENTIAL

The Evaluation of Potential and Management of Talent process combines, in an integrated manner, the data relating to technical skills, operational skills of a behavioural nature, professional interests, motivational factors, career projects and international mobility disposition, amongst other aspects. These evaluation processes continued throughout 2011, with the aim of increasing the knowledge available on the skills, interests, availability and career projects of the employees of the Soares da Costa Group.

NUMBER OF EMPLOYEES AND STAFF COSTS

The number of employees at the service of the companies' consolidated using the full consolidation method was 5,549 in 2011, decreasing by 403 relative to the previous year.

Consolidated staff costs amounted to 146.4 million Euros, representing 17.7% of total operating costs versus 156.5 million Euros and 18.3% respectively, for 2010.

Sociedade de Construções Soares da Costa, SA, continues to be the main employer of the Group, with 3,249 employees (3,775 indefinite term employees a year before).

A comparative analysis shows an important decrease in the number of employees. The company's strategy in the management of human resources gives preference, as stated above, to inter-sector and geographic mobility and, within the wider scope of the Group, inter-company mobility, as a means to mitigate the effects of the scarcity prevalent in the domestic construction market that has resulted in human resource redundancies in certain professional categories; the severity of this problem, however, has resulted in the implementation of corrective actions in the allocation of this important production factor, actions which the company has sought to implement in a cautious and progressive manner, abiding by the law in force and, even more importantly, imbued in the social responsibility concerns that are transversal to the conduct of all its activities.

In this matter, it is important to note that Sociedade de Construções Soares da Costa, SA was declared, by order of the Secretary of State for Employment dated 7 December 2011, a company under restructuring, in the terms of and for the purposes foreseen in paragraph d) of no. 2 and no. 4 of article 10 of Decree-Law 220/2006, of 3 November.

Complementing this analysis, of note is the fact that the number of indefinite term employees in the companies' consolidated using the proportional method totalled 881 employees, number analogous to the 878 of the previous year.

The company, individually, has 40 indefinite term employees (28 the previous year).

8. SUSTAINABLE DEVELOPMENT

Soares da Costa Group's commitment to Sustainable Development is continually reaffirmed through the various initiatives that involve the creation of value for the shareholder, the protection and well-being of the employees and of the community with which it interacts, the preservation of the environment, through the minimization of the negative environmental impacts, and the continuous improvement in the value created for the priority interest groups.

During 2011, Soares da Costa Group continued to develop and support various initiatives (internal and external) which objectives are in line with the sustainable activity guidelines, seeking a balance between the business carried out and the well-being of the communities with which it interacts, privileging the pillars of health, education and environment.

	Scholarship Programme for children of employees (3rd Edition) •
	Prémio Talento SdC (Talent Prize) aimed at university students (end of the 2nd Edition – • that was awarded to 3 students – and launch of the 3rd Edition)
Support of Education and	Organization of Evening Talks, with the cooperation of various external guests •
Knowledge	Sharing of knowledge and of the personal and professional experiences of our • employees, in the Technical Conferences on Construction (2nd Edition), Technical Workshops on Construction, Technical Workshops on Management and Technical Visits to works-in-progress
	Clínica de Golfe SdC (Golf Clinic) •
Support of	Torneio de Bowling SdC (Bowling Tournament)(2nd Edition) •
Sporting and Cultural	• Support for the athletics team SdC Runners
Initiatives	Conclusion of the Rehabilitation Project of the Campanhã Juvenile Centre (Social • Corporative Responsibility Programme)
	Organization of Summer Camps for children of employees •
Support of	• Realization of Outdoor SdC
Leisure	Realization of the Christmas Party for the children of the employees, during which • various presents are handed out
Support of Society	With various collaborations (sponsorships, materials' donations, labour, etc.) in • Portugal, Angola and Mozambique
	With thousands of articles collected in solidarity campaigns carried out in the fixed • units of the company, within the scope of Ecoponto Solidário

More information on Sustainable Development at Grupo Soares da Costa, SGPS, SA, may be consulted in the 2011 Sustainability Report, available at www.soaresdacosta.pt

9. MAIN RISKS AND UNCERTAINTIES

Soares da Costa Group, as the various parts that comprise this Report and Accounts attest, carries out its activity in various business segments and in various geographical areas. Consequently, the Group is exposed, naturally, to various risks that can be classified as:

Business Risks
Operating risks: those that can impact the effectiveness and efficiency of the operational and service rendering processes of the Group, client satisfaction and the reputation of the companies;
Integrity risks: those related with internal and external frauds that the group companies may be subject to;
Management and human resource risks: risks related, amongst others, with management, leadership, authority limits, displacement, local insertion, etc.;
Financial risks. Namely currency risk, interest rate risk, liquidity risk and credit risk;
Information Risks
Operating, financial and strategic evaluation information;
• Environmental Risks
Competition;
Political, economic, legal and fiscal environment;
Regulation of and changes in the sector.

From an organizational perspective, important steps were taken in 2011 to improve the analysis and risk management system. Consequently, at the corporate centre, and therefore with transversal application throughout the Group, an Analysis and Risk Management unit was set up with the objective of guaranteeing the efficiency and effectiveness of the Group's operations, the safeguarding of its assets, the reliability of the financial data and the compliance with the law and applicable norms.

The risk analysis is undertaken by the various corporative units of the Group. Work is carried out to identify and prioritize upfront the risks classified as more critical (determined through the combination of the probability of occurrence with the potential impact) and Risk Management strategies are defined so as to implement the control procedures that will reduce these to an acceptable level. In this manner the Group has been implementing control activities that permit the mitigation of these risks. The objective is to maximize the trade-off between the risks and the business margins so as to attain, in a sustained manner, the strategic objectives.

This matrix is based on the general lines of the strategic plan in force, the goals that are to be met, the type of activity carried out and the countries that constitute the preferred areas for a stable intervention. Subsequently, and in obedience to these guidelines, a set of parameters are defined that guide the strategic objectives covering the assumption of risk and all the monitoring actions carried out to guarantee the conformity of the risks actually incurred with those objectives.

To perform the assessment and subsequent monitoring, through their internal organizations, the different management areas of the company (Business Development, Finance Management, Management Control, Human Resources, Legal Services, etc.) identify and evaluate the risks that their decisions, in their respective areas of intervention and competence, involve and list the measures that may prevent or minimize these. In function of that analysis, critically monitored by the central unit, decisions are taken relating to the business, country or project in question, namely the decision to contract or not to contract or of the contracting conditions.

The analysis and management system is an interactive process that extends throughout all the phases of the project, from the original potential set-up, at a moment of pure prospecting, right through to its epilogue, when all the responsibilities connected to it are extinguished. Naturally, during its evolution, some fundamental milestones requiring a wider scope in terms of decision making are set-up, both to evaluate if the potential risks and the forms in which best to broach these fit the strategic profile defined, as well as to ensure that the control mechanisms and procedures are being complied with and are proving to be adequate. For their thorough management, detailed information procedures are created, with the content adequate to each phase, which will permit the timely monitoring of the various vicissitudes and the taking of action at the exact moment of an occurrence. The full process is open to contributions from reviews and to the improvements that any structure wishes to propose, and is the object of periodic reflection and evaluation involving both the supporting services as well as the operational areas.

The objective of capital risk management at Soares da Costa Group is to safeguard the continuity of the operations of the Group, thus providing returns for the shareholders and benefits for the remaining stakeholders, maintaining a solid capital structure that supports the development of the business. The Group has reinforced its risk analysis policies in order to be better prepared to respond to the uncertainties and vicissitudes that derive from adapting its activity to the retraction in the domestic market, and is actively searching for alternatives that boost its capacities.

10. SOARES DA COSTA ON THE STOCK EXCHANGE

Share Capital Representation

Pursuant to article 4, no. 3, of the By-laws, the company's share capital is represented by one hundred and sixty million scriptural bearer shares, with a par value of one Euro each, divided into two categories of shares, reciprocally convertible through a general meeting deliberation: a) one hundred and fifty-nine million nine hundred and ninety-four thousand four hundred and eighty-two (159,994,482) ordinary shares; b) five thousand five hundred and eighteen (5,518) preferred nonvoting share, but with a preferential right to a dividend and to the reimbursement of the respective nominal amount in the event of the liquidation of the company.

Own shares

In October 2011, the company informed the market, through the CMVM internet site and through its own website, and in terms of and for the purposes laid down in article no. 248 of the Securities Code, that it had renounced the liquidity contract celebrated on 21 September 2010 with Lisbon Brokers Sociedade Corretora, S.A. (whose contractual position had, in the meantime, been assumed by Banco L.J. Carregosa, S.A). This termination took effect as from 31 December 2011. Consequently, and still considering transactions carried out under the said contract, as disclosed on 11 January 2012, Grupo Soares da Costa held, at 31 December 2011, 507,292 own shares, corresponding to 0.317% of its share capital.

Dividends

As was proposed by the board of directors in the shareholders general meeting held on 12 May 2011, the distribution of a gross dividend of 0.0217 Euros per ordinary share and of 0.05 Euros per preferred share was approved. As was communicated on 27 May 2011, the dividends were placed at the shareholders disposal as from 13 June 2011, with the shares transacting on the stock exchange without the right to the dividend as from 8 June 2011.

Share Price Evolution

Grupo Soares da Costa's stock price evolution was negative for the second consecutive year, losing circa 31.5% in 2011, following a drop of 55% in the previous year. At 31 December 2011, each share of Soares da Costa was worth 0.37 Euros, corresponding to a market capitalization of approximately 59 million Euros, versus the 86 million Euros at the end of the previous year.

This drop reflects the very negative evolution of the Portuguese share market as a whole (PSI20, the index of reference, fell 28% in accumulated terms, and the PSI General index, that the Group's shares integrate, fell circa 20% in 2011), with a strong increase in risk aversion by investors in relation to the domestic market in consequence of various facts (although all of them intertwined): sovereign debt crisis, request for international financial aid from IMF/ EU/ Central European Bank, retraction of both the economy and the companies' liquidity and the contraction of GDP. Additionally, Soares da Costa's share price evolution also reflects, specifically, the strong break in the activity and in the expectations for the construction and infrastructure sector in Portugal.

An additional consequence of this recessive context for the Portuguese economy and for its companies, was the very sharp drop in the liquidity of the share when compared to the previous year: the volume of shares transacted fell by 64%, whilst the accumulated transacted value fell by 81% (already reflecting the previously referred to share price drop). As a comparative reference, the accumulated transacted value of the companies integrating the PSI20 index fell by 31% and that of the companies integrating the PSI Geral index fell by 30%.

Key Performance Indicators of Soares da Costa Share Price

2011	2010	2009	2008	2007
0.54	1.19	0.63	2.09	0.69
0.37	0.54	1.19	0.63	2.09
0.59	1.27	1.31	2.13	2.87
0.27	0.49	0.49	0.58	0.69
21.3	59.1	186.8	81.1	510.2
9.8	50.8	190.5	123.1	857.5

Source: Euronext

Evolution of the Soares da Costa Share Price (Euro) and Daily Transacted Volume (number of shares)

Source: Euronext

11. ORDER BOOK AND PROSPECTS

The construction sector is experiencing in PORTUGAL, we repeat, a very severe context: a climate of public budget constraints, oversupply in the real estate market, uncertainty and aversion to risk on the part of private agents, shortage of finance and a negative external perception as to the country's solvability conditions (ratings and devaluation of assets). All these "springs" flowed into a very relevant break in construction investment, conditioned the commercial activity and revealed themselves in 2011, in manifestations such as:

General shortage of tenders, with the consequent degradation of prices;
Even greater stagnation of tenders launched in the Madeira island;
Suspension of the School Infrastructures Renovation;
Suspension of the public private partnerships in road infrastructure;
Suspension of the expansion plans of the Lisbon and Oporto underground transportation;
Suspension of all new tenders for the high speed railway network;
Suspension of the new Lisbon Airport;
Suspension of private projects in the offices sub-segment;
Postponement of private projects in the hotels sub-segment.

Compounding the challenge even more is the minute rate of decisions taken on tenders launched: the Hospital Oriental de Lisboa, is currently in a deadlock, and various other tenders in the domain of water supply and treatment have also been suspended.

The only positive note in terms of investment in Portugal is the National Dam Plan, with various tenders launched both by EDP as well as by Iberdrola. Despite these prospects, no actual projects materialized in 2011 from Iberdrola, and EDP postponed the execution of one of the dams tendered –Alvito dam.

Even so, some important adjudications were won in 2011 amongst which we highlight: Bypass to Madalena do Mar, 2nd phase, in Madeira, Fajã da Ovelha – Ponte do Pargo Expressway (in consortium) in Madeira, the Irrigation, Road and Drainage infrastructure construction contracts of the Bloco (Block) in Aljustrel and of Bloco (Block) 3 in Pedrogão, the infrastructure construction of the Pestana Tróia Resort, structural interventions in the Trofa and Sortes Tunnels (Refer), the Moura-Safara adductor (AGDA), the Hotel da Tocha (Hotel) for the client World Hotel and Hotel Sana Evolution. With regard to the subsidiary Contacto, reference is made to the adjudication of a hotel unit in Praça da Ribeira, in Oporto and the supermarket Continente Bom Dia, in Ramalde, also in Oporto.

In terms of Sociedade de Construções Soares da Costa's international commercial activity, during 2011 the following occurred:

Start-up of commercial activity in the African West Coast, with the presentation on a series of bids in Senegal and Gambia;
Pre-qualification for a high velocity railroad network between Tangier and Kenitra, in Morocco, with effective participation in various tenders;
Presentation for various tenders in Oman, with an adjudication coming through after the year end;
Maintenance of a high level of commercial activity in the Portuguese-speaking African countries where the company maintains a traditional presence (Angola and Mozambique – with the widening and extension of the effective activity to the geographic limits of these countries – and S. Tomé e Príncipe).
Relevant steps to consolidate the presence, recently initiated, in Brazil.

In ANGOLA, we highlight the adjudications of: Edifício Blue Plaza (Building), which will be one of the tallest buildings in the centre of Luanda with 17 stories and 4 basements; the Luanda Sul Development, comprising two residential buildings; the

"Shopping Fortaleza" complex that is to grow next to the new waterfront bypass, facing the bay of Luanda and integrating a seven-storied building for the promoter Sopros – Sociedade Angolana de Promoção de Shoppings and, due to its representativeness considering the highly selective criteria imposed, Soares da Costa's entrance into the "universe" of Nestlé contractors/ suppliers, with the adjudication of a project with a 9 month execution period and worth more than 6 million Dollars.

Evidencing the policy of expanding and widening the activity to the entire Angolan territory are the adjudication of works in other regions outside the Luanda area, as is the case of namely, in Soyo (Bechtel – LNG Project: Bairro Fina School), Benguela (BESA headquarters in Lobito), and Huambo (Cultural Centre of Huambo), that were already started during the period.

Within the scope of infrastructure, the important project launched by the Direcção Nacional de Infraestruturas Públicas of the Ministry for Urbanism and Construction of the Republic of Angola, for the requalification of the "Municipality of Sambizanga and Encostas da Boa Vista", in Luanda, partially in the ex-"Roque Santeiro" area (encompassing the execution of the public rainwater drainage infrastructure, the construction of road accesses, the assembly of power supply distribution and the public lighting network infrastructure), in an amount of 90 million Dollars (63 million Euros) and an execution period of 12 months, must be highlighted.

As to Clear Angola's activity, this company had a good commercial performance during the year just ended, that resulted from winning new projects in an amount of 4.9 thousand million Kwanzas (with electricity representing 67%, acclimatization 21% and hydraulics 12%). Amongst the projects won are the Torre do 1º Congresso (Tower) for BESA, the New Parking Lot Building to be executed by the consortium Namkwang/Soares da Costa, the Empreendimento Residencial Talatona (Residential Development), in South Luanda, for the consortium Hagen/Goecimenta and the Edifício Fénix (Building), for Somague.

In Mozambique, the level of adjudications and new contractings occurred at a reasonable pace. Reference is made to the adjudication of various works for the set-up of various branches of Banco Único (Matota, Sommerschield – Maputo and in Mica), the construction of the technical building and offices of TV Cabo in Beira and the extension of Hotel Vip Inn Beira (2nd phase: new twin building). With the objective of increasing the potential project universe, the activity is being extended to practically all the country, such that, at the end of the period, the Group is present in the provinces of Maputo, Gaza, Inhambane, Sofala and Tete.

In the UNITED STATES the highlight, in terms of the main commercial happenings, goes to the adjudication of a project with the highest value in the history of the subsidiary Prince: the widening and reconstruction of I-75/SR 93, in Tampa, Florida, a contract of 94.7 million Dollars, for the FDOT (Florida Department of Transportation), with an execution period of 1,500 days and that consists of the reconstruction and widening of 10 miles of the interstate motorway I-75 from SR56 to Fowler Avenue and 3 miles of road, including the construction of 13 bridges.

In addition to this project, on 15 March 2011 Prince was announced project contractor for the construction of the New Tampa Boulevard Bridge, in the city of Tampa, over the I-75 and that is to connect the New Tampa Boulevard to Commerce Park, a 12.5 million Dollar project.

Cattlemen Road - Sarasota County announced, on 6 April 2011, Prince as the bidder with the lowest price for the 14.5 million Dollar project relating to the construction of a new highway with 3 miles with an execution period until January 2013, earthwork activities having already started.

Regarding US27 (SR25) X SR50 DB, the Prince-Atkins conception-construction team will carry out this project, worth 20.8 million Dollars, with an execution period of 700 days, for District Five of the FDOT.

In summary, Prince's commercial activity during 2011 allowed it to get works amounting to 142 million Dollars.

The company will continue focused on widening its geographical scope of activity, with the expansion into the State of Texas and open to market opportunities within the scope of the so-called 3P projects (public private partnerships) for which growth is expected in 2012, following an anaemic 2011 in this domain, with the cancellation of several projects amongst which: Florida High-Speed Rail and Georgia's West by Northwest, for which the company was already qualified.

In COSTA RICA, the local company is pre-qualified for the construction and supply of basic equipment for the "Hospital de Trauma (Trauma Hospital)" in an amount of circa 60 million Dollars. The tender is expected to be launched during 2012.

Additionally, in 2011 budgets were prepared for the reconstruction and extension of 28 bridges, in a global amount of 7.6 million Dollars. The respective decisions are awaited, although, as of now, it is already known that some of these projects will not carry on.

Together with Prince (consortium leader) and two local partners, the local company budgeted the extension and rehabilitation work on National road no. 1, the Interamericana Norte road, section Cañas – Liberia, with an length of 50 Km, in a global amount of circa 114 million Dollars, with the Group's participation in the consortium being 55%.

The subsidiaries in the railroad and maritime work segments with an activity of some relevance generally focused on the North-African markets and we highlight, in 2011, the adjudication of an intervention project in the Porto de La Guaira (Port), in Venezuela, in an amount in excess of 27 million Euros.

In summary, the order book reflects the following composition:

(Million Euros)	Dec. 2011	%	Dec. 2010	%	∆ 2011-2010
Total	1,404.6	100.0	1,667.7	100.0	-15.8%
Portugal	482.6	34.4	720.6	43.2	-33.0%
Angola	467.0	33.3	446.4	26.8	4.6%
USA	201.7	14.4	197.3	11.8	2.2%
Mozambique	131.6	9.4	170.2	10.2	-22.7%
Romania	-	0.0	7.2	0.4	-99.5%
S. Tomé & Príncipe	2.0	0.1	15.3	0.9	-86.6%
Costa Rica	43.4	3.1	43.5	2.6	-0.3%
Brazil	5.4	0.4	-	-	-
Algeria	38.1	2.7	53.7	3.2	-29.0%
Morocco	3.6	0.3	8.8	0.5	-59.0%
Cape Verde	1.6	0.1	4.7	0.3	-66.2%
Venezuela	27.6	2.0	-	-	-

Order Book at of 31 December 2011 and 2010

PROSPECTS AND OBJECTIVES FOR 2012

Within the scope of the implementation and execution of the strategic guidelines, the Group's activity in 2012 will focus on the construction business and on the core geographies. Angola tends to dispute with Portugal the status of first market in terms of turnover contribution to the Group. In the domestic market the Transmontana motorway construction project will continue to assume a significant role. In the wake of 2011, the prospects are for high activity levels in the United States of America and Mozambican markets. On the other hand, material growth is expected in Brazil.

The challenges at profitability level require further efforts in structural cost reduction, particularly in the domestic market.

In terms of debt, debt without recourse associated with the concession projects in progress is likely to expand, but no new relevant investments are foreseen in the energy and environment business and in the real estate area and, on the other hand, the Group will seek to sell, selectively and when opportune, non-strategic assets with a fund generating/debt with recourse reduction potential.

Given a climate of greater uncertainty as to the economic variables, the production of prospective financial information involves additional risks. Without prejudice to the recognition of the existence of exogenous factors, that may be highly conditioning, the Group considers it reasonable to set as its turnover goal for 2012 an amount of close to 900 million Euros, with the generation of an EBITDA of approximately 10%. The possible change in the accounting model associated with the Beira Interior (Scutvias) motorway concession due to the recent introduction of tolls and the possible change in the compensation in function of the availability of the infrastructure may lead to a review of these amounts.

12. SUBSEQUENT EVENTS

The accounts were approved by the Board of Directors on 19 April 2012.

As relevant facts occurring subsequent to the date of reference of the accounts and as per the privileged information communications disclosed and brought to the public's attention through the CMVM site, the company informed:

On 12 March 2012, that it had been informed, through the concessionaire company "Elos Ligações de Alta Velocidade, S.A." that the Court of Auditors had refused to issued the formal approval on the concession contract for the HVT Section Poceirão-Caia of the high velocity train line between Lisbon and Madrid. The Group's subsidiary, Soares da Costa Concessões, SGPS, SA, has a shareholding in that concessionaire company of 16.304%. The concession, with a duration of 40 years, implied a total investment of 1,494,881,960 Euros, with an amount of 1,440,749,262 Euros for the project, expropriation and construction, to be executed by a joint venture "LGV– Engenharia e Construção de Linhas de Alta Velocidade, ACE" led by Sociedade de Construções Soares da Costa S.A., which is also a subsidiary of the Group, with a shareholding of 17.25% in the joint venture.
On 28 March, of the adjudication to its subsidiary Sociedade de Construções Soares da Costa, SA, of works in the Oman Sultanate, that includes the execution of the projects and construction work on road infrastructure, contemplating road sections, five overhead bypasses over road interchanges, and associated infrastructure networks, to be executed in the area between the international airport of Masqat and the Masqat expressway. The project will be executed through a joint venture with a local construction company, with Sociedade de Construções Soares da Costa holding a 70% stake. This project, worth 48 million Euros and with an execution period of 654 days, represents the construction activity's expansion into a new market.
On 3 April 2012, of the celebration of a contract with its subsidiary Sociedade de Construções Soares da Costa, SA, for the execution of the project and construction of the social facilities of Angola LNG (1st phase), in Soyo, in Angola. The project will be executed in consortium with MSF, with Soares da Costa holding a 50% stake. The project has an execution period of 36 months and the total adjudication amount is 252 million Dollars (189 million Euros).

13. PROPOSAL FOR THE APPROPRIATION OF RESULTS

The board of directors of the company Grupo Soares da Costa, S.G.P.S., SA, taking into consideration the present Financial Statements, propose to the Shareholders, in accordance with that laid down in paragraph f) of article 66 of the Commercial Companies Code and the legislation applicable to the distribution of corporate assets, namely articles 32 and 33 of the said Code, that the individual net income of 877,727.62 Euros, earned by the company during the period ended on 31 December 2011, be appropriated as follows:

a)	To Legal Reserve (5% of the net income for the period)	43,886.38 Euros
b)	To Dividends attributable to the preferred shares
	5,518 x 0.05	275.90 Euros
	c) To Retained Earnings	833,565.34 Euros

14. STATEMENT ON THE CONFORMITY OF THE FINANCIAL INFORMATION

(IN TERMS OF PARAGRAPH C) OF NO. 1 OF ARTICLE 245 OF THE SECURITIES CODE)

The members of the Board of Directors, individually, declare that to the best of their knowledge:

a) The Consolidated Financial Statements, the Individual Financial Statements and the other documents comprising the accounts were prepared in conformity with the accounting standards applicable, presenting a true and fair view, in all materially relevant aspects, of the assets and liabilities, of the equity and of the consolidated and individual results of the issuer;

b) The Management Report accurately discloses the evolution of the business, the performance and the financial position both of the issuer and of the companies included in the consolidation perimeter and contains a description of the principal risks and uncertainties which they face.

15. ACKNOWLEDGEMENTS

On concluding this report on the activity carried out during the 2011 economic period, the Board of Directors takes this opportunity to express its appreciation to all the public and private entities that, directly or indirectly, have supported and cooperated with the company and with the various entities in the Soares da Costa universe. It is gratifying to highlight, in particular, the relationship of trust with which clients, suppliers and other business partners, namely financial institutions, have honoured us.

To the members of the other corporate bodies, as well as to our external and statutory auditors, we acknowledge the manner and the rigor with which they carried out their functions.

Finally, the high level of professionalism and sense of duty demonstrated by the employees to the Group, without whose efforts and dedication it would not have been possible to create the value the company is responsible for, merits a special mention.

Porto, April 19, 2012

The Board of Directors,

Manuel Roseta Fino, António Manuel Pereira Caldas de Castro Henriques, Pedro Gonçalo de Sotto Mayor de Andrade Santos, Jorge Domingues Grade Mendes, Ana Maria Martins Caetano, António Manuel Formigal de Arriaga, António Pereira da Silva Neves, Carlos Moreira Garcia, José Manuel Baptista Fino, Martim Salema de Sande e Castro Fino

II - ANNEXES TO THE MANAGEMENT REPORT

1. PARTICIPATIONS AND TRANSACTION OF MEMBERS OF THE CORPORATE BODIES (according to Article 9. Point a) and 14 no. 7 of Regulation 5/2008 of the CMVM)

Manuel Roseta Fino (Chairman of the board of directors): Chairman of the board of directors of Investifino – Investimentos e Participações SA. This company held, as of January 1, 2011, 113,302,682 shares that correspondent to 70.8142% of the capital, that maintained by December 31, 2011.

Pedro Gonçalo de Sotto-Mayor de Andrade Santos (Executive member of the board of directors): Member of the board of directors of Investifino – Investimentos e Participações SA. This company held, as of January 1, 2011, 113,302,682 shares that correspondent to 70.8142% of the capital, that maintained by December 31, 2011.

António Pereira da Silva Neves (Member of the board of directors): Held by January 1, 2011, 13,220 shares, that maintained by December 31, 2011.

Ana Maria Martins Caetano (Member of the board of directors): Chairman of the board of directors of Parinama – Participações e Investimentos, SA. This company held, as of January 1, 2011, 17,600,00 shares that correspondent to 11.0000% of the capital, that maintained by December 31, 2011.

José Manuel Baptista Fino (Member of the board of directors): Member of the board of directors of Investifino – Investimentos e Participações SA. This company held, as of January 1, 2011, 113,302,682 shares that correspondent to 70.8142% of the capital, that maintained by December 31, 2011.

The other members of the corporate bodies did not hold, as of December 31, 2011, shares of the company, and did not made any transactions on the company's shares in 2011.

2. QUALIFIED SHAREHOLDINGS

As of December 31, 2011 shareholders with qualified shareholdings in the company were the following:

Manuel Fino, SGPS, S.A.	Number of shares		% Capital	% Voting rights (*)
Indirectly through Investifino	113.302.682		70,814%	71,042%
- Investimentos e Participações SGPS, S.A.
Total	113.302.682		70,814%	71,042%
PARINAMA – Participações e Investimentos, SGPS, S.A.	Number of shares		% Capital	% Voting rights (*)
Directly	17.600.000		11,000%	11,035%
Total	17.600.000		11,000%	11,035%
Santander Asset Management - Sociedade Gestora de Fundos de Investimento Mobiliários, S.A.	Number of shares	% Capital		% Voting rights (*)
Indirectly through:
Fundo Santander Acções Portugal	2.930.324		1,831%	1,837%
Fundo Santander PPA	312.634		0,195%	0,196%
Total	3.242.958		2,027%	2,033%

(*) Considers 5,518 preferred non voting shares and 507,292 own shares held by December 31, 2011

3. OTHER LEGAL INFORMATIONS

Debts to the State and Social Security

Pursuant to and for the purposes of art. 2 of Decree-Law no. 534/80, November 7 and Article 21 of Decree-Law no. 411/91, dated October 17, we state that Grupo Soares da Costa has no outstanding debts to the state resulting from payment of taxes or contributions to Social Security.

4. CORPORATE GOVERNANCE REPORT

0 – STATEMENT OF COMPLIANCE

In accordance with the Portuguese Securities and Exchange Commission's (CMVM) Code of Corporate Governance (Reg. Nr. 1/ 2010):

0.1 Legislation

Soares da Costa is subject to the Code of Corporate Governance defined by CMVM, which is available in the commission website www.cmvm.pt.

0.2 Recommendations' Statement of Compliance

		Recommendation	Compliance	Report's Reference
I.		SHAREHOLDERS' GENERAL MEETING
I.1		BOARD OF THE SHAREHOLDINGS' MEETING
	I.1.1	The Chairman of the Board of the General Meeting shall have the necessary human and logistical resources at his/her disposal, taking the company's economic situation into account.	Adopted	-
	I.1.2	The remuneration of the Chairman of the Board of the General Meeting shall be disclosed in the annual report on corporate governance.	Adopted	I.3
I.2		PARTICIPATION IN THE SHAREHOLDER'S MEETING
	I.2.1	The requirement for the Board to receive statements for share deposit or blocking for participation at the general meeting shall not exceed 5 working days.	Adopted	I.4
	I.2.2	Should the general meeting be suspended, the company shall not compel share blocking during the interim period until the meeting is resumed and shall then prepare itself in advance as required for the first session.	Adopted	I.5
I.3		VOTING AND EXERCISING VOTING RIGHTS
	I.3.1	Companies shall not impose any statutory restriction on postal voting and whenever adopted or admissible, on electronic voting.	Adopted	I.9
	I.3.2	The statutory deadline for receiving early voting ballots by mail may not exceed three working days.	Adopted	I.11
	I.3.3	Companies shall ensure the level of voting rights and the	Adopted	I.7

			shareholder's participation is proportional, ideally through the
			statutory provision that obliges the one share-one vote principal.
			The companies that: i) hold shares that do not confer voting right; ii)
			establish non-casting of voting rights above a certain number, when
			issued solely by a shareholder or by shareholders related to former,
			do not comply with the proportionality principle.
	I.4		RESOLUTION-FIXING QUORUM
		I.4.1	Companies shall not set a resolution-fixing quorum that outnumbers	Adopted	I.8
			that which is prescribed by law.
	I.5		MINUTES AND INFORMATION ON RESOLUTIONS PASSED
		I.5.1	Extracts from the minutes of the general meetings or documents	Adopted	I.13 e I.14
			with corresponding content must be made available to shareholders
			on the company's website within a five day period after the General
			Meeting has been held, irrespective of the fact that such information
			may not be classified as material information. The information
			disclosed shall cover the resolutions passed, the represented capital
			and the voting results. Said information shall be kept on file on the
			company's website for no less than a 3 year period.
	I.6		MEASURES ON CORPORATE CONTROL
		I.6.1	Measures aimed at preventing successful takeover bids, shall	Not applicable	-
			respect both the company's and the shareholders' interests. The
			company's articles of association that by complying with said
			principal, provide for the restriction of the number of votes that
			may be held or exercised by a sole shareholder, either
			individually or in concert with other shareholders, shall also
			foresee for a resolution by the General Assembly (5 year
			intervals), on whether that statutory provision is to be amended
			or prevails – without super quorum requirements as to the one
			legally in force – and that in said resolution, all votes issued be
			counted, without applying said restriction.
		I.6.2	In cases such as change of control or changes to the composition	Adopted	I.20
			of the Board of Directors, defensive measures shall not be
			adopted that instigate immediate and serious asset erosion in the
			company, and further disturb the free transmission of shares and
			voluntary performance assessment by the shareholders of the
			members of the Board of Directors.
II			BOARD OF DIRECTORS AND SUPERVISORY BOARD
	II.1		GENERAL ISSUES
	II.1.1		STRUCTURE AND DUTIES
		II.1.1.1	The Board of Directors shall assess the adopted model in its	Adopted	II.3
			Annual Report on Corporate Governance and pin-point possible
			hold-ups to its functioning and shall propose measures that it
			deems fit for surpassing such obstacles.
		II.1.1.2	Companies shall set up internal control and risk management	Adopted	II.5, II.6
			systems in order to safeguard the company's worth and which		and II.9
			will identify and manage the risk. Said systems shall include at
			least the following components: i) setting of the company's
			strategic objectives as regards risk assumption; ii) identifying the

		main risks associated to the company's activity and any events
		that might generate risks; iii) analyse and determine the extent of
		the impact and the likelihood that each of said potential risks will
		occur; iv) risk management aimed at aligning those actual

		incurred risks with the company's strategic options for risk
		assumption; v) control mechanisms for executing measures for
		adopted risk management and its effectiveness; vi) adoption of
		internal mechanisms for information and communication on
		several components of the system and of risk-warning ; vii)
		periodic assessment of the implemented system and the
		adoption of the amendments that are deemed necessary.
	II.1.1.3	The Board of Directors shall ensure the establishment and	Adopted	II.6
		functioning of the internal control and risk management systems.

		The Supervisory Board shall be responsible for assessing the
		functioning of said systems and proposing the relevant
		adjustment to the company's needs.
	II.1.1.4	The companies shall: i) identify the main economic, financial and	Adopted	II.9
		legal risk that the company is exposed to during the exercise of
		its activity; ii) describe the performance and efficiency of the risk
		management system, in its Annual Report on Corporate
		Governance.
	II.1.1.5	The Board of Directors and the Supervisory Board shall establish	Adopted	II.7
		internal regulations and shall have these disclosed on the

		company's website.

II.1.2		GOVERNANCE INCOMPATIBILITY AND INDEPENDENCE
	II.1.2.1	The Board of Directors shall include a number of non-executive	Adopted	II.3 and
		members that ensure the efficient supervision, auditing and		II.14
		assessment of the executive members' activity.
	II.1.2.2	Non-executive members must include an adequate number of	Not adopted	II.3 and
		independent members. The size of the company and its shareholder		II.14
		structure must be taken into account when devising this number and
		may never be less than a fourth of the total number of Board
		Directors.
	II.1.2.3	The independency assessment of its non-executive members carried	Adopted	II.15
		out by the Board of Directors shall take into account the legal and
		regulatory rules in force concerning the independency requirements

		and the incompatibility framework applicable to members of other
		corporate boards, which ensure orderly and sequential coherence in
		applying independency criteria to all the company. An independent
		executive member shall not be considered as such, if in another
		corporate board and by force of applicable rules, may not be an
		independent executive member.

II.1.3		ELIGIBILITY AND APPOINTMENT CRITERIA
	II.1.3.1	Depending on the applicable model, the Chairman of the Supervisory	Adopted	II.21 and
		Board and of the Auditing and Financial Matters Committees shall be		II.22
		independent and adequately competent to carry out his/her duties.
	II.1.3.2	The selection process of candidates for non-executive members shall	Adopted	II.16

		be conjured so as to prevent interference by executive members.

II.1.4		POLICY ON THE REPORTING OF IRREGULARITIES
	II.1.4.1	The company shall adopt a policy whereby irregularities occurring	Adopted	II.35

		within the company are reported. Such reports shall contain the following information: i) the means be which such irregularities may be reported internally, including the persons that are entitled to receive the reports; ii) how the report is to be handled, including confidential treatment, should it be required by the reporter.
	II.1.4.2	The general guidelines on this policy shall be disclosed in the Annual Report of Corporate Governance.	Adopted	II.35
II.1.5		REMUNERATION
	II.1.5.1	The remuneration of the Members of the Board of Directors shall be structured so that the formers' interests are capable of being aligned with the long-term interests of the company. Furthermore, the remuneration shall be based on performance assessment and shall discourage taking on extreme risk. Thus, remunerations shall be structured as follows: i) The remuneration of the Board of Directors carrying out executive duties shall include a variable element which is determined by a performance assessment carried out by the company's competent bodies according to pre-established quantifiable criteria. Said criteria shall take into consideration the company's real growth and the actual growth generated for the shareholders, its long-term sustainability and the risks taken on, as well as compliance with the rules applicable to the company's activity; ii) The variable component of the remuneration shall be reasonable overall as regard the fixed component of the remuneration and maximum limits shall be set for all components; iii) A significant part of the variable remuneration shall be deferred for a period not less than three years and its payment shall depend of the company's steady positive performance during said period; (iv) Members of the Board of Directors shall not enter into contracts with the company or third parties that will have the effect of mitigating the risk inherent in the variability of the remuneration established by the company; (v) The Executive Directors shall hold, up to twice the value of the total annual remuneration, the company shares that were allotted by virtue of the variable remuneration schemes, with the exception of those shares that are required to be sold for the payment of taxes on the gains of said shares; (vi) When the variable remuneration includes stock options, the period for exercising same shall be deferred for a period of not less than three years; (vii) The appropriate legal instruments shall be established so that in the event of a Director's dismissal without due cause, the envisaged compensation shall not be paid out if the dismissal or termination by agreement is due to the Director's inadequate performance; (viii) The remuneration of Non-Executive Board Members shall not include any component the value of which is	Adopted in i),ii),iv),vii) and viii), and Not applicable in iii), v)e vi)	II.31, II.32 and II.33
	II.1.5.2	subject to the performance or the value of the company. A statement on the remuneration policy of the Board of Directors	Not adopted in	II.32 and
		and Supervisory Board referred to in Article 2 of Law No. 28/2009 of 19 June, shall contain, in addition to the content therein stated, adequate information on: i) which groups of companies the remuneration policy and practices of which were taken as a baseline for setting the remuneration ii) the payments for the dismissal or termination by agreement of the Directors' duties.	i) and Not applicable in ii)	II.33
	II.1.5.3	The remuneration policy statement referred to in Article 2 of Law	Adopted	II.32 and

		No. 28/2009 shall also include the directors' remunerations which		II.33
		contain an important variable component, within the meaning of
		Article 248-B/3 of the Securities Code. The statement shall be
		detailed and the policy presented shall particularly take the long
		term performance of the company, compliance with the rules
		applicable to its business and restraint in taking risks into account.
	II.1.5.4	A proposal shall be submitted at the General Meeting on the	Not applicable	-
		approval of plans for the allotment of shares and/or options for
		share purchase or further yet on the variations in share prices, to
		members of the Board of Directors and Supervisory Board and other
		managers within the context of Article 248/3/B of the Securities
		Code. The proposal shall mention all the necessary information for
		its correct assessment. The proposal shall contain the regulation plan
		or in its absence, the plan's conditions. The main characteristics of
		the retirement benefit plans established for members of the Board
		of Directors and Supervisory Board and other managers within the
		context of Article 248/3/B of the Securities Code, shall also be
		approved at the General Meeting.
	II.1.5.5	At least one of the Remuneration Committee's representatives shall	Adopted	II.31
		be present at the Annual General Meeting for Shareholders.
	II.1.5.6	The amount of remuneration received, as a whole and individually,	Adopted	II.33
		in other companies of the group and the pension rights acquired
		during the financial year in question shall be disclosed in the Annual
		Report on Corporate Governance.
II.2		BOARD OF DIRECTORS
	II.2.1	Within the limits established by law for each management and	Adopted	II.3
		supervisory structure, and unless the company is of a reduced size,
		the Board of Directors shall delegate the day-to-day running and the
		delegated duties shall be identified in the Annual Corporate
		Governance Report.
	II.2.2	The Board of Directors must ensure that the company acts in	Adopted	II.3
		accordance with its goals, and shall not delegate its duties, namely in
		what concerns: i) definition of the company's strategy and general
		policies; ii) definition of the corporate structure of the group; iii)
		decisions taken that are considered to be strategic due to the
		amounts, risk and particular characteristics involved.
	II.2.3	Should the Chairman of the Board of Directors carry out executive	Not applicable	-
		duties, the Board of Directors shall set up efficient mechanisms for
		coordinating non-executive members that can ensure that these may
		decide upon, in an independent and informed manner, and
		furthermore shall explain these mechanisms to the shareholders in
		the corporate governance report.
	II.2.4	The annual management report shall include a description of the	Adopted	II.3 and
		activity carried out by the non executive board members and shall		II.14
		mention any restraints encountered.
	II.2.5	The company shall expound its policy of portfolio rotation on the	Adopted	II.11
		Board of Directors, including the person responsible for the financial
		portfolio, and report on same in the Annual Corporate Governance
		Report.
II.3		CEO, EXECUTIVE COMMITTEE AND EXECUTIVE BOARD OF DIRECTORS
	II.3.1	When Managing Directors that carry out executive duties are	Adopted	II.3

	requested by other Board Members to supply information, the former must do so in a timely manner and the information supplied must adequately suffice the request made.
II.3.2	The Chairman of the Executive Committee shall send the convening notices and minutes of the meetings to the Chairman of the Board of the Directors and, as applicable, to the Chairman of the Supervisory	Adopted	II.3 and II.12
II.3.3	Board or the Auditing Committee, respectively. The Chairman of the Executive Board of Directors shall send the convening notices and minutes of the meetings to the Chairman of the General and Supervisory Board and to the Chairman of the Financial Matters Committee.	Not applicable	-
II.4	GENERAL AND SUPERVISORY BOARD, FINANCIAL MATTERS COMMITTEE, AUDIT COMMITTEE AND SUPERVISORY BOARD
II.4.1	Besides carrying out its supervisory duties, the General and Supervisory Board shall advise, follow-up and carry out an on-going assessment on the management of the company by the Executive Board of Directors. Besides other subject matters, the General and Supervisory Board shall decide on: i) the definition of the strategy and general policies of the company; ii) the corporate structure of the group; and iii) decisions taken that are considered to be strategic due to the amounts, risk and particular characteristics involved.	Not applicable	-
II.4.2	The annual reports and financial information on the activity carried out by the General and Supervisory Committee, the Financial Matters Committee, the Auditing and Supervisory Committee must be disclosed on the company's website.	Adopted	II.4
II.4.3	The annual reports on the activity carried out by the General and Supervisory Board, the Financial Matters Committee, the Audit Committee and the Supervisory Board must include a description on the supervisory activity and shall mention any restraints that they may have come up against.	Adopted	II.4
II.4.4	The General and Supervisory Board, the Auditing Committee and the Supervisory Board (depending on the applicable model) shall represent the company for all purposes at the external auditor, and shall propose the services supplier, the respective remuneration, ensure that adequate conditions for the supply of these services are in place within the company, as well as being the liaison officer between the company and the first recipient of the reports.	Not adopted	II.4
II.4.5	According to the applicable model, the General and Supervisory Board, Auditing Committee and Supervision Board shall assess the external auditor on an annual basis and advise the General Meeting that he/she be discharged whenever justifiable grounds are present.	Adopted	II.4
II.4.6	The internal audit services and those that ensure compliance with the rules applicable to the company (compliance services) shall functionally report to the Audit Committee, the General and Supervisory Board or in the case of companies adopting the Latin model, an independent director or Supervisory Board, regardless of the hierarchical relationship that these services have with the executive management of the company.	Not adopted
II.5	SPECIAL COMMITTEES
II.5.1	Unless the company is of a reduced size and depending on the adopted model, the Board of Directors and the General and	Adopted	II.1, II.36

		Supervisory Committees, shall set up the necessary Committees in order to: i) ensure that a competent and independent assessment of the Executive Directors' performance is carried out, as well as its own overall performance and further yet, the performance of all existing committees; ii) study the adopted governance system and verify its efficiency and propose to the competent bodies, measures to be carried out with a view to its improvements; iii) in due time identify potential candidates with the high profile required for the performance of director's duties.
	II.5.2	Members of the Remuneration Committee or alike shall be independent from the Members of the Board of Directors and include at least one member with knowledge and experience in matters of remuneration policy.	Adopted	II.38
	II.5.3	Any natural or legal person which provides or has provided, over the past three years, services to any structure subject to the Board of Directors, to the Board of Directors of the company or that has to do with the current consultant to the company shall not be recruited to assist the Remuneration Committee. This recommendation also applies to any natural or legal person who has an employment contract or provides services.	Not applicable	II.39
	II.5.4	All the Committees shall draw up minutes of the meetings held.	Adopted	II.37

III		INFORMATION AND AUDITING
III.1		GENERAL DISCLOSURE DUTIES
	III.1.1	Companies shall maintain permanent contact with the market thus upholding the principle of equality for shareholders and ensure that investors are able to access information in a uniform fashion. To this end, the company shall create an Investor Relations Support.	Adopted	III.16
	III.1.2	The following information that is made available on the company's Internet website shall be disclosed in the English language: a) The company, public company status, headquarters and remaining data provided for in Article 171 of the Commercial Companies Code; b) Articles of Association; c) Credentials of the Members of the Board of Directors and the Market Liaison Officer; d) Investor Assistance Unit – its functions and access means; e) Accounts Reporting documents; f) Half-Yearly Calendar on Company Events; g) Proposals sent through for discussion and voting during the General Meeting; h) Notices convening General Meetings.	Adopted	III.16
	III.1.3	Companies shall advocate the rotation of auditors after two or three terms in accordance with four or three years respectively. Their continuance beyond this period must be based on a specific opinion for the Supervisory Board to formally consider the conditions of auditor independence and the benefits and costs of replacement.	Adopted	III.18
	III.1.4	The external auditor must, within its powers, verify the implementation of remuneration policies and systems, the efficiency and functioning of internal control mechanisms and report any shortcomings to the company's Supervisory Board.	Adopted	-
	III.1.5	The company shall not recruit the external auditor for services other than audit services, nor any entity with which same takes part or incorporates the same network. Where recruiting such services is called for, said services should not be greater than 30% of the total value of services rendered to the company. The hiring of these	Adopted	III.17

		services must be approved by the Supervisory Board and must be
		expounded in the Annual Corporate Governance Report.

IV		CONFLICTS OF INTEREST
IV.1		SHAREHOLDER RELATIONSHIP
	IV.1.1	Where deals are concluded between the company and shareholders	Not applicable	-
		with qualifying holdings, or entities with which same are linked in
		accordance with Article 20 of the Securities Code, such deals shall be
		carried out in normal market conditions.
	IV.1.2	Where deals of significant importance are undertaken with holders	Not applicable	-
		of qualifying holdings, or entities with which same are linked in
		accordance with Article 20 of the Securities Code, such deals shall be
		subject to a preliminary opinion from the Supervisory Board. The
		procedures and criteria required to define the relevant level of
		significance of these deals and other conditions shall be established
		by the Supervisory Board.

0.3. Overall assessment of the degree of adoption of recommendation groups related to each other by topics

In general, the company has adopted the recommendations, not existing groups of recommendations worth mentioning in terms of adoption/ not adoption. In any case, the company does not completely agree with the independence requirements, and does not consider the internal auditing and compliance services as supervisory services, but as fundamental support services to the executive management. Furthermore, regarding remunerations, the company believes that to have in the remuneration committee a member related with the board of directors, although with non executive functions, is key to allow a more reasoned evaluation.

0.4. Differences between CMVM recommendations and recommendations that have not been complied with or that the company considers not to be applicable

Regarding recommendation II.1.2.2, the company believes that the number doesn't reflect the intervention capacity of the independent members of the boards; on the contrary, the current composition of the board of directors adequately represents the different interests of the company's structure.

In what concerns recommendation II.1.5.2, the company does not deem appropriate to publicly refer to other companies.

In what concerns recommendation II.4.4, from the current relationship between the financial committee and the external auditor, results that the financial committee does not have all the responsibilities mentioned in that recommendation, and although the financial committee has direct contact with the external auditor, the company does not consider to be applicable the requirement for the external auditor to be proposed by the financial committee as well as its remuneration, favoring an independent relationship between these two supervision structures.

The company also disagrees with the recommendation II.4.6, as we do not see as correct that the internal audit depends on the external audit or any corporate bodies other than the executive committee: the internal and external audit functions are different and its field of actuation should not be confused, what could be highly damaging to the success of these missions; in fact, the internal auditing services, as well as the risk management, in a Group with an industrial nature, represent a key tool to the executive management, both at a central and at the business units levels, so, functionally, these should depend on the executive management; this should not prevent full availability to collaborate or provide information to the non executive members of the board and to members of the supervisory board, as has always happened.

In recommendation II.5.2, we consider that the interpretation of this recommendation is that the independence relates to the executive committee members which is why we have considered this recommendation to be "adopted", since the

remuneration committee is constituted by three members, two of which are not related with the company's corporate bodies with the remaining being a non executive member of the board of directors, in fact, the recent legislation for this issue applicable to financial institutions goes in the same direction.

I – GENERAL MEETING OF SHAREHOLDERS

I.1 e I.2 Identification of the members of the board of the general meeting of shareholders, beginning and expiration dates of terms of office

The board to the general meeting of shareholders is constituted by the following members:

. Fernando Enes Gaião (chairman), term of office beginning in April 2010 and ending in 31 December 2012;
. João Pessoa e Costa (secretary), term of office beginning in April 2010 and ending in 31 December 2012.

I.3 Indication of the remuneration of the chairman of the board of the general meeting of shareholders

The remuneration attributed to the chairman of the board of the general meeting of shareholders in 2011 amounted to 13.500 euros. The remuneration attributed to the secretary of the board of the general meeting of shareholders in 2011 amounted to 4.050 euros.

I.4 Indication of the prior notice required for the blocking of shares for participation in the General Meeting

There is no blocking period. The exercise of the voting rights and the shareholders representation are regulated by the company's bylaws, in accordance with the legal framework, as described below.

As set out in article 8 - 1 of the company's bylaws: "In order to be entitled to vote, shareholders must have evidence of registration of their shares in a book-entry securities account no later than 5 business days prior to the relevant meeting, and must provide evidence to the company until 5 p.m. of the third business day prior to the general meeting of shareholders". For the purposes of the preceding provision shares will be blocked from the registration until the General Meeting is closed.

I.5 Indication of the rules for blocking shares in the event of the General Meeting being suspended

In accordance with the current legal framework, there is no blocking period, shareholders only need to (re)prove their shares' ownership.

I.6 Number of shares corresponding to one vote

Each share corresponds to one vote.

I.7 Indication of the articles of association rules which envisage the existence of actions that do not confer voting rights or which enable voting rights over a certain number not to be counted, when issued by a single shareholder or shareholders related thereto

The company's share capital is represented by 160.000.000 nominal shares, 1 Euro each, of which 5,518 are preferred shares and 159,994,482 are ordinary shares. In accordance with article 342-3 of the Companies Code, currently, preferred shares do

not carry voting rights. Soares da Costa shares are listed in NYSE Euronext – Lisbon. There isn't any restriction/ limit to voting rights, when issued by a single shareholder or shareholders related thereto.

1.8 The existence of articles of association rules on the exercise of voting rights, including constitutive and decision-making quorums or systems for equity rights

The article 10-1 of the company's bylaws establishes that:" The general meeting of shareholders is constituted and can validly deliberate in a first session, when the number of shareholders present or represented fulfils the legal quorum requested, and, in a second session, with any number of shareholders present or represented, regardless of the share capital represented.

I.9 The existence of bylaws rules on the exercise of voting rights via postal voting

Existing bylaw rules on the exercise of voting rights:"Voting by correspondence may encompass all matters contained in the notice. For this purpose, shareholders with voting rights who wish to exercise their vote via postal voting, in addition to fulfilling all the conditions and deadlines stated above, must address a communication to the chairman of the board of the general meeting of shareholders up to 5 p.m. on the business day immediately prior to the meeting, accompanied by a sealed envelope containing their clearly stated, unambiguous vote on each of the items on the agenda with a legally acknowledged signature. The envelopes containing the votes shall be opened at the meeting at the voting time of each item of the agenda, and shall be considered as votes against in the case of proposals presented after that voting was expressed." These rules are always part of the general meeting of shareholders' notice.

I.10 Providing a model for the right to vote by mail

The documents to vote by correspondence shall be requested to the company's Investor Relations Office (by telephone: +351 228 342 200, or by email: [email protected]).

I.11 A deadline requirement for the receipt of the postal ballots and the date on which the General Meeting is held

The period of time implemented for receipt of declarations of vote by mail is one business day prior to the date of the general meeting of shareholders.

I.12 Exercise of voting rights by electronic means

Currently, the possibility of voting by electronic means is not available, as we believe that taking into consideration the shareholders that are usually present in the company' general meeting, that option does not bring any significant advantage. Furthermore, we believe the physical attendance should be encouraged. In the general meeting held on May 12, 2011, the shareholders presented represented 84.57% of the company's share capital compared to 81.82% in 2010's general meeting.

I.13 Possibility of shareholders gaining access to excerpts from the Minutes of the General Meetings in the company's website within five days after the general meeting was held

The minutes of the general meetings of shareholders are available in the company's website (www.soaresdacosta.pt). In the same day of the meeting, the main deliberations are disclosed and the minutes are made available at the company's website as soon as they are finished and signed.

I.14 Existence of a historical record on the company's website with the resolutions passed at the company's General Meetings, share capital and voting results referring to the previous three years

The general meetings' minutes and lists of presences remain available at the company's website for at least three years.

I.15 Indication of the representative(s) from the Remuneration Committee present at General Meetings

At the last general meeting held on May 12, 2011, two of the three members of the remuneration committee were present.

I.16 Information of the intervention by the General Meeting on matters concerning the company's remuneration policy and the assessment of the performance of members of the Board of Directors and other Directors

At the last general meeting, the remuneration committee for the company's corporate bodies submitted a document explaining the remuneration policy guidelines, as well as the criteria used in the fixation of the remuneration amounts attributed to corporate bodies' members.

I.17 Information of the intervention by the General Meeting on matters concerning the proposal on the share allocation plan, and/or stock option plans, or based on share price fluctuations, to members of the board of directors, supervisory board and other directors

During the last financial year didn't exist nor were planned any share option plans and therefore this matter was not discussed in the company's general meeting.

I.18 Information of the intervention by the General Meeting on matters concerning the approval of the main features of the retirement benefit system as enjoyed by the members of the Board of Directors, Supervisory Board and other Directors

The company does not have any pension benefit systems or any early pension program to be enjoyed by its directors and therefore this issue was not addressed at the general meeting.

I.19 Existence of statutory provision that envisages for a duty to be subject, at least every five years, to a resolution by the General Meeting, for the maintenance or withdrawal of the statutory provision providing for the limitation of the number of votes capable of being held or exercised by a single shareholder individually or together with other shareholders

There is no statutory provision for the submission to the general meeting of shareholders of a rule limiting the votes held or exercised by a single shareholder or by a group of shareholders in a combined way.

I.20 Indication of the defensive measures that have the effect of automatically causing a serious asset erosion of company assets in case of transfer of control or changes to the composition of the Board of Directors

There are no agreements or measures related with the change of control of the company's capital or with the composition of the corporate bodies and therefore it does not exist any limit to shares' transfer or to the shareholders' discretion of the board of directors' performance.

I.21 Important agreements to which the company is a party and that come into force, are changed or terminated in cases such as a change in company control, and also related outcome, unless the disclosure of same, due to its nature, is highly damaging to the company and except when the company is specifically obliged to disclose said information by virtue of other legal requirements

There are no significant agreements entering into force in the event of change in company control.

I.22 Agreements between the company and the Board of Directors that provide for compensation in cases of dismissal, unfair dismissal or termination of employment following a change in company control

There are no agreements between the company and the members of the management body that provide for compensation in cases of dismissal, unfair dismissal or termination of employment following a change in company control.

II - BOARD OF DIRECTORS and SUPERVISORY BOARD

Section I – GENERAL ISSUES

II.1 Identification and composition of corporate boards as of December 31, 2011

General Meeting Board (2010-12):

Fernando Enes Gaião (Chairman) João Pessoa e Costa (Secretary)

Board of Directors (2010-12):

Manuel Roseta Fino (Chairman) António Manuel Pereira Caldas Castro Henriques (Executive Committee, Chief Executive Officer) Pedro Gonçalo de Sotto-Mayor de Andrade Santos (Executive Committee) Jorge Domingues Grade Mendes (Executive Committee) António Manuel Formigal de Arriaga (Non executive, Independent) António Pereira da Silva Neves (Non executive) Carlos Moreira Garcia (Non executive, Independent) José Manuel Baptista Fino (Non executive) Martim Salema de Sande e Castro Fino (Non executive) PARINAMA - Participações e Investimentos, SGPS, S.A., corporate body number 509 016 987, that designated Ana Maria Martins Caetano (Non executive).

Supervisory Board (2010-12):

Júlio de Lemos de Castro Caldas (Chairman) Carlos Pedro Machado de Sousa Góis Joaquim Augusto Soares da Silva Júlio de Jesus Pinto (Substitute)

Chartered Accountant (2010-12):

Grant Thornton Associados, SROC, Lda, represented by Jorge Bento Martins Ledo

Remuneration Committee (2010-12):

José Manuel Baptista Fino (Chairman) António Jorge Gonçalves Afonso João Pessoa e Costa

This composition reflect the changes that occurred in the board of directors' composition during 2011: following the resignation letter as of June 28, 2011 of Mr. Pedro Manuel Almeida Gonçalves as a member of the board of directors, with effect from August 30, onwards, the board of directors decided at a meeting held on that date to name Mr. António Manuel Pereira Caldas de Castro Henriques as the chairman of the executive committee. The board also decided to co-opt as a member of the board, Mr. Jorge Domingues Grade Mendes, who integrated the executive committee. Therefore, since August 30, the composition of the executive committee is the following: Mr. António Castro Henriques (chairman), Mr. Gonçalo Andrade Santos and Mr. Jorge Grade Mendes (members).

II.2 Identification and composition of special committees established with responsibilities for the management or the supervision of the company

here are no other special committees established with responsibilities in matters of corporate management or supervision, besides the committees mentioned in II.1.

II.3 Organisational structure and functional chart relating to the division of powers among the various boards, committees and/or departments within the company, including information on the scope of the delegation of powers

The following organigram shows the company's organisation model, identifying the heads of the divisions:

The company's operational structure is stated in the management report, with the Group's subsidiaries' being represented by its logo. Furthermore, there is also an operational structure before the notes to the consolidated financial accounts that illustrates the subsidiaries' structure, also indicating the group's stake (%) in each company and the consolidation method used.

The company's management is exercised by an executive committee constituted by three members of the board of directors, in which the board of directors has delegated all the management responsibilities, except for the responsibilities mentioned in the article 406 a) to d), f), l) and m) of the Companies Code; also under the board of directors' authority is the approval of the Group's strategy and all the decisions that, by its amount of risk, assume a strategic nature, as well as structural changes. The executive committee, although deciding in a collegial way, guided by the CEO, monitors the company's operational activity, and preferential business areas are divided among its three members:

• António Manuel Pereira Caldas Castro Henriques – institutional representation and investors relations, management control and strategic planning, human resources, legal, corporate communication and marketing, suppliers, real estate business area, and all matters related to the concessionaire Elos - Ligações de Alta Velocidade, S.A;

Pedro Gonçalo de Sotto-Mayor de Andrade Santos shared services, , reporting and tax issues, concessions business area, environment & energy business area, and all matters related to the concessionaire Auto-Estradas XXI, S.A.;
Jorge Domingues Grade Mendes construction business area.

The remaining non executive members of the board of directors are informed of the decisions and issues discussed by the executive committee, being also reported the company's operational performance, with the possibility of submitting to the board of directors any matter/issue that has been discussed by the executive committee.

The board of directors currently has ten members, seven of which are non executive, including the chairman.

Regardless of the delegated responsibilities, the non executive members monitored the executive committee performance, having access to all the matters/ issues and being totally at ease to ask for additional information on the decisions taken. On the other hand, the non executive members had a word on the approval of the company's most significant documents, having total access to the information/ data they believe is important to their monitoring function, accompanying and verification of the compliance with the company's strategy set out. There were no constraints on the performance of nonexecutive directors.

Two of the non executive members of the board of directors are independent, as defined by the CMVM recommendations. We believe that the independence criteria should be based on a relative positioning regarding the shareholders, and should also take into consideration the executive committee's composition. The company's management, of which the executive committee is in charge – should follow the company's superior interests, and should be run by professional managers, with no relation to the shareholders.

The shareholders' representation within the board of directors is mainly carried out by non executive members. In this context, two of the members of the executive committee do not have a relation with the shareholders with qualifying positions and four of the current seven non executive members have a relation with shareholders with qualifying positions. The responsibility of monitoring the company's management is handed to the non executive members and to the supervisory board, constituted by independent members, as established in the Portuguese Law.

II.4 Reference to the annual reports on the activities undertaken by the General and Supervisory Board, the Financial Board, the Audit Board and the Supervisory Board including the description of the supervisory activity and indicating any restraints found, and being subject to disclosure on the website of the company, together with the financial statements

The supervisory board, the chartered accountant and the external auditor reports are released annually with the company's management report and accounts. The supervisory board report describes the supervision activity of the committee and eventual restraints found. The supervisory board has a direct contact with the company's services and with the external auditor. The choice of the external auditor can be proposed by the supervisory board even though nothing is stipulated in that sense; in fact, we believe that when changing the external auditor, the supervisory board intervention is not justifiable, as we believe that since there are several supervision units (supervisory board, chartered accountant and external auditor) these should be independent between them. Nevertheless, the supervisory board can evaluate the external auditor work, and even purpose its dismissal. This supervision activity is approved at the general meeting of shareholders.

II.5 Description of the company's internal control and risk management systems, particularly with regard to financial reporting and the functioning and effectiveness thereof

In the dependence of the executive committee, but coordinated by the secretary-general, there are some support and consultancy units that are transversal to the entire Group: legal, management control and strategic planning, investor relations, report and tax and communication, sustainability and organization change. Besides the control and auditing

services that exist in each business area, the company has a corporate governance committee, constituted by the secretarygeneral (chairman), the legal officer, the investor relations officer, a member of the remuneration committee, an operational officer and a senior technical worker, that reflects on the company's corporate governance policy and presents proposals in these matters. On the other hand, as the company is a holding, the risk committees are structured at the subsidiaries level. At the holding level, there is an unit that promotes risk control strategies, defines the general policies and the responsibility terms and monitors its implementation. The financial information is released internally to all of the officers, taking into consideration their operational area, audited by the external auditor, by the chartered accountant and by the supervisory board when applicable.

II.6 Responsibility of the Board of Directors and the Supervisory Board in establishing and operating the company's internal control and risk management systems, and also in assessing said system's functioning and adaptation to the company's requirements

The board of directors was responsible by the internal control and management system. The supervisory board has direct access to the management control and risks' monitoring services, also having the responsibility to evaluate theses systems, and may propose their adjustment to the needs of the company.

II.7 Indication of the existence of regulations on the functioning of the corporate boards or other internally defined rules on incompatibility and the maximum number of positions that a member is entitled to hold and the place where said rules may be consulted

The board of directors and the supervisory board have internal operation regulations, that are available at the company's internet site.

Section II – BOARD OF DIRECTORS

II.8 In the event of the Board of Directors' Chairman carrying out an executive role, an indication of the mechanisms coordinating the tasks of non-executive members in order to ensure independence and notification of decisions

The chairman of the board of directors does not perform any executive duties.

II.9 Identification of the major economic, financial and legal risks to which the company is exposed in pursuing its business activity

Soares da Costa Group has a diversified activity, operating in several business areas and geographical markets. Therefore, the company is exposed to different risks which can be classified as follows:

Business risks:

− Operational risks: risks that can affect the efficiency of the operational performance, the customers satisfaction and the Group companies' reputation;
− Integrity risks: risks related with internal and external fraud to which the Group companies' might be exposed;
− Human resources and management risks: risks related with management, officers, authority limits, delocalization, and adaptation to local markets, etc.
− Financial risks: risks related with the foreign exchange rate variations, interest rate, liquidity risks and credit risks.

Information risks:

− Operational, financial and strategic evaluation information.

Context risks:

− Competition;
− Tax, legal framework, economic and political context;
− Regulation and changes in the sector profile.

From an organizational point of view, in 2011 important steps were given towards the change in the risk management and analysis system. In fact, within the corporate centre context, and therefore with transversal competence to all the Group, was created a Risk Analysis and Management Unit, having as goal to assure the efficiency and effectiveness of the Group's operations, the safeguarding of assets, the reliability of financial reporting and the compliance with laws and regulations.

The risk analysis is assured by the Group's several corporative units. The risks are identified and a prioritization is made of the risks classified as most critical (determined through the combination of the probabilities of occurrence and potential impact) and are defined Risk Management strategies to implement control procedures reduce risks to an acceptable level. In this sense, the Group has been implementing control activities that allow risks' mitigation. The goal is to maximize the trade-off between the risks and the businesses' margins; so that the Group's strategic goals are achieved, in a sustainable way.

This matrix is born from the strategic plan being implemented, from the targets defined, from the type of activity and from the preferred countries was a stable intervention is developed. Afterwards, and taking into consideration these general guidelines, a set of parameters if defined to orient the strategic goals of risk assumption and all the monitoring to check compliance between the risks effectively incurred and those goals.

In order to evaluate and monitor, through the internal organisation, the company's different management areas (Business Development, Finance, Management Control, Human Resources, Legal, etc.) identify and evaluate he risks associated with their decisions, in their intervention and competence areas, involve and list the measures that prevent or minimize these risks. Taking into consideration this analysis, critically monitored by the Central Unit, decisions regarding the operational activity, project or country are taken, namely the decision to contract or not, and the eventual contract conditions.

Risk management and analysis system is an interactive process, that that runs through all phases of a project, since its potential launch, in pure prospection phase, to its epilogue, when all the responsibilities related with that project are extinct. In its evolution, some essential milestones rose in an enlarged decision making process, both to evaluate its the potential risks and the way to address them fit the strategic profile defined, and to investigate whether the mechanisms and control procedures are being observed and if they are appropriate.

For its adequate management, were created procedures with detailed information, with contents appropriated to each phase, that will allow the timely monitoring of the several features and acting upon the occurrences. All the process is open to revision and improvement contributions, that any structure proposes and it is object of reflection and periodic evaluation involving either support services or operational areas.

The main goal of the capital risk management in Soares da Costa Group is to safeguard the Group's operations continuity and therefore, assure shareholders' return and benefits for the remaining stakeholders, to maintain a solid capital structure to support the business' development. The Group has reinforced its risk analysis policy in order to be more able to answer to the uncertainties and features that arose from its activity's adaption to the domestic market contraction, with the consequent search for alternatives that may enhance our skills.

II.10 Powers of the Board of Directors, particularly with regard to resolutions concerning capital increase

In this regard, the board of director is empowered by general law. Additionally, the Group's bylaws establish that the board of directors is allowed to deliberate capital increase operations, through contributions in cash, up to 320,000,000.00 euros.

II.11 The information on the rotation policy of the Board of Directors' functions, namely as to the financial responsibility division and the rules applicable to the appointment and replacement of members of the board of directors and of the supervisory board

After a temporary adaption period, and to the 2010-12 period, the company has once again a member as the chief financial officer (CFO), while in the previous period, two members of the board shared this function, one of which is now a non executive member of the board. Therefore, the rotation of the CFO occurred in the beginning of this term.

However, there is not a rule specifically referring a rotation policy, and therefore, this rotation will depend upon several conditions, namely the particular characteristics of the function such as external exposure, human and intellectual experience which shall not be neglected, always bearing in mind the Group's financial performance and the shareholders interests. Being planned an evaluation at the end of the term, the future rotation will depend upon several conditions, namely the particular characteristics of the function such as external exposure, human and intellectual experience which shall not be neglected, always bearing in mind the Group's financial performance and the shareholders' best interests.

II.12 The number of meetings held by the board of directors and the supervisory board as well as reference to the minutes of said meetings

The board of director meets regularly on a quarterly basis, but extraordinary meetings can happen by suggestion of any of its members. During 2011, the board of directors met nine times, with an average participation above 97%. The chairman of the supervisory board also often attends the board of directors' meetings. In 2011, the supervisory board met eight times with a participation of 100% of its members. Minutes from both the board of directors and the supervisory board meetings are taken, and the minutes from the board of directors meetings are also sent to the supervisory body chairman.

II.13 The number of meetings held by the Executive Committee or by the Executive Board of Directors, as well as reference to the drawing up of the minutes of those meetings and whenever applicable, the submission of same with the convening notices to the Chairman of the Board of Directors, the Chairman of the Supervisory Board or of the Audit Committee, the Chairman of the General and Supervisory Board and to the Chairman of the Financial Matters Committee

The executive committee convened twenty and none times during 2011, with a 100% attendance of its members. A minute of each meeting is taken, being also sent to the non executive members of the board of directors, including to the chairman of the board of directors and to the chairman of the supervisory board. In general, no notices of meeting are issued to the executive committee meetings since they are scheduled in advance for the entire year, being this calendar released to its members and to those entities.

II.14 Distinction between executive and non-executive members and among these, differentiating those members that would comply if the incompatibility rules were to be applied (Article 414-A/1 of the Commercial Companies Code, except for item /b and the independency criteria provided for in article 414/5, both of the Commercial Companies Code)

Seven of the current ten members of the board of directors have non executive functions: Manuel Roseta Fino, António Manuel Formigal de Arriaga, António Pereira da Silva Neves, Carlos Moreira Garcia, José Manuel Baptista Fino, Martim Salema de Sande e Castro Fino, and PARINAMA - Participação e Investimentos, SGPS, S.A. that designated Ana Maria Martins Caetano. Manuel Roseta Fino, José Manuel Baptista Fino, Martim Salema de Sande e Castro Fino, PARINAMA - Participação e

Investimentos, SGPS, S.A. that designated Ana Maria Martins Caetano, and António Pereira da Silva Neves are not considered independent members, according to the article 414-5 of the Corporate Code's definition, as they are members of the board designated by shareholders with a qualified shareholding or because they have been elected by more than 2 times. The three first members of the board mentioned also do not comply with the incompatibility rules of article 414 -1 d) and h) of the Corporate Code. António Manuel Formigal de Arriaga and Carlos Moreira Garcia are independent members of the board of directors and comply with the incompatibility rules as defined in the above mentioned article.

II.15 A description of the legal and regulatory rules and other criteria that have been used as a basis for assessing the independency of its members carried out by the board of directors

The independence evaluation was done based on the article 414-5 of the Corporate Code.

II.16 A description of the selection rules for candidates for non-executive member positions and the way in which executive members refrain from interfering in the selection process

The selection of non executive board members is done by the shareholders, without any intervention from the executive members of the board of directors.

II.17 Reference to the fact that the company's annual management report includes a description on the activity carried out by non-executive members and possible obstacles that may be detected

The management annual report, which includes this corporate governance report, has a brief description of the non executive members' activity, including eventual constraints to their activity found during the year. As already mentioned, there were no constraints on the performance of non-executive members.

Manuel Roseta Fino (Chairman of the board of directors)

Attendance of the Sciences College in the Universidade Clássica de Lisboa. Designated to the office for the first time on 12- Oct-2006. Term of office expires on 31-Dec-2012. By 31-Dec-2011 held, through Investifino –Investimentos e Participações, SGPS, S.A. (of which is Chairman), 113,302,682 of shares of the company.

António Manuel Pereira Caldas Castro Henriques (Chairman of the executive committe)

Graduation in Management in IX Dauphine Paris University; MBA in Universidade Nova de Lisboa. Member of the board of directors of Banco Comercial Português between June 1995 and January 2008. Designated non executive member of Soares da Costa Group for the first time in Apr-2008, being a member of the executive committee since 26-Apr-2010, and chairman of the executive committe since 31-Aug-2011. Term of office expires on 31-Dec-2012. By 31-Dec-2011, did not hold any share of the company.

Pedro Gonçalo de Sotto-Mayor de Andrade Santos (Executive member of the board of directors)

Graduation in Management in Universidade Católica de Lisboa. Post-graduation in Real Estate in ESAI. Several functions in Fino Group: chairman of the board of Gameinvest, S.A., member of the board of directors of Deéssepor, S.A., Snucker-Confecções, S.A., Fino Participações SGPS, S.A., Carfino SGPS, S.A. and Investifino – Investimentos e Participações, SGPS, S.A.. Member of the board of directors of the company since Oct-2006, by ratified cooptation in 22-May-2007 and member of the

executive committee since 31-Jan-2008. Term of office expires on 31-Dec-2012. By 31-Dec-2011, held, through Investifino – Investimentos e Participações, SGPS, S.A. (of which is a member of the board), 113,302,682 of shares of the company.

Jorge Domingues Grade Mendes (Executive member of the board of directors)

Graduation in Civil Engeneering by Instituto Superior Técnico de Lisboa. Head of Production and Technical-Commercial of ENGIL – Sociedade de Construção Civil, S.A., Member of the board of directors of A. Silva & Silva - Sociedade Gestora de Participações Sociais, S.A., Chief Executive Officer of da Sopol - Sociedade Geral de Construções e Obras Públicas, S.A. (Group A. Silva & Silva), Member of the board of directors of Opca - Obras Públicas e Cimento Armado, S.A. and Chief Executive Officer of Opway Engenharia, S.A. between 2008 and 2011. Executive member of the board since 31-Aug-2011. Term of office expires on 31-Dec-2012. By 31-Dec-2011, did not hold any share of the company.

Ana Maria Martins Caetano (Non executive member of the board of directors)

Graduation in Law in Universidade Católica Portuguesa. From 1984 to 2010, was a member of the board of directors of several companies of Salvador Caetano Group, namely at Grupo Salvador Caetano SGPS, S.A. and Toyota Caetano Portugal, S.A.. Founder and chairman of the board of directors of PARINAMA – Participações e Investimentos, SGPS, S.A. though which held, by 31-Dec-2011, 17,600,000 shares of the company. Designated to the office for the first time on 26-Apr-2010. Term of office expires on 31-Dec-2012.

António Manuel Formigal de Arriaga (Non executive member of the board of directors)

Graduation in Economics in Universidade Católica Portuguesa. From 1996 to October 2010 was a member of the board of directors of Papelaria Fernandes Lojas, S.A., Fernandes Converting – Transformação de Papel, S.A., Fernandes Técnica – Desenho e Reprodução, S.A., Printima, Impressão e Tratamento de Imagens, S.A. and of Transfer – Sociedade de Transportes, S.A., offices that have terminated with these companies' bankruptcy process. Designated to the office for the first time on 26-Apr-2010. Term of office expires on 31-Dec-2012. By 31-Dec-2011, did not hold any share of the company.

António Pereira da Silva Neves (Non executive member of the board of directors)

Graduation in Economics and Finance in Universidade do Porto. Designated for the first time in May 2008. Works in Soares da Costa Group since 1980 as a Financial Manager. Executive member of the board of directors since 1998, become non executive in 26-Apr-2010. Term of office expires on 31-Dec-2012. By 31-Dec-2011, held 13,220 shares of the company.

Carlos Moreira Garcia (Non executive member of the board of directors)

Diplomat carrier preparation course and "Altos Estudos" course in Instituto Rio Branco. Certified by Georgetown University as Fellow in Foreign Service. Diplomat since 1970. Assumed several offices in the Brazilian Foreign Relations State department, namely Brazilian ambassador in Madrid (Spain). Amongst other functions, currently is member of the executive committee of the Euro-América Foundation, Chairman of the corporate board of the Rio de Janeiro's Iberian-American Trade Commerce. Designated to the office for the first time on 26-Apr-2010. Term of office expires on 31-Dec-2012. By 31-Dec-2011, did not hold any share of the company.

José Manuel Baptista Fino (Non executive member of the board of directors)

Attendance of Business Studies in Northeast London. Amongst other function at Fino Group, is member of the board of directors of Cimpor – Cimentos de Portugal, S.A.. Is a non executive member of the board since April 2008. Term of office expires on 31-Dec-2012. Holds, through Investifino – Investimentos e Participações, SGPS, S.A. (of which is a member of the board), 113,302,682 of shares of the company.

Martim Salema de Sande e Castro Fino (Non executive member of the board of directors)

Graduation in Political Science in Northeastern University in Boston, US. Since April 2007. General manager of Workcare – Medecina, Higiene e Segurança no Trabalho. Designated to the office for the first time on 26-Apr-2010. Term of office expires in 31-Dec-2012. By 31-Dec-2010, did not hold any shares of the company.

II.19 Duties that the members of the board of directors carry out in other companies and a description of duties carried out in other companies of the same holding

Below we transcribe the information made available by the members of the board of directors of the company. Therefore, as of 31-Dec-2011:

Manuel Roseta Fino: Chairman of the board of directors of Investifino- Investimentos e Participações SGPS S.A., Chairman of the board of directors of Manuel Fino SGPS S.A., sole member of the board of director of Predifino-Sociedade Imobiliária S.A., Chairman of the board of directors of Carfino SGPS S.A., Sole member of the board of director of Quinta da Ramada Imobiliário S.A., Sole member of the board of director of Snucker (Portugal) Confecções S.A., Sole member of the board of director of Fino Participações SGPS S.A., Sole member of the board of director of Quinta da Ramada Sociedade Agrícola, S.A., Sole member of the board of director of Imoban-Imobiliária do Ancão S.A., Member of the board of directors of Specialty Minerals (Portugal) Especialidades Minerais S.A., Manager of GMC-Granitos e Material de Construção, Lda, Member of the general counsel of Fundação Millenniumbcp.
António Manuel Pereira Caldas Castro Henriques: Chairman of the board of directors of SCSP Soares da Costa, Serviços Partilhados, S.A., Chairman of the board of directors of Soares da Costa – Construção SGPS S.A., Chairman of the board of directors of Sociedade de Construções Soares da Costa, S.A., Chairman of the board of directors of Soares da Costa América, INC., Chairman of the board of directors of Soares Da Costa – Imobiliária – SGPS, S.A., Chairman of the board of directors of Soares da Costa - Concessões, SGPS S.A., Chairman of the board of directors of ELOS – Ligações de Alta Velocidade, S.A., Chairman of the board of directors of ELOS – OM, S.A., Chairman of the board of directors of Movex – Produção, Venda e Aluguer de Módulos Pré-Fabricados S.A.., Board member of AEM - Associação de Empresas Emitentes de Valores Cotados em Mercado, Member of the audit committee of the Federação Portuguesa de Bancos Alimentares contra a Fome.
Pedro Gonçalo de Sotto-Mayor de Andrade Santos: Chairman of the Board of directors of INR Investimentos Nacionais Rodoviários, SGPS, S.A., Chairman of the Board of directors of Soares da Costa – Serviços Técnicos e de Gestão, S.A., Chairman of the board of directors of Intevias – Serviços e Gestão, S.A., Chairman of the board of directors of Soares da Costa Hidroenergia, S.A., Chairman of the board of directors of MRN – Manutenção de Rodovias Nacionais, S.A., Chairman of the board of directors of Scutvias – Autoestradas da Beira Interior, S.A., Chairman of the board of directors of Portvias – Portagem de Vias, S.A., Vice-Chairman of the board of directors of Soares da Costa – Concessões, SGPS, S.A., Chairmam of the board of directors of Soares da Costa Concessions USA, INC., Vogal of the board of directors of SCSP – Soares da Costa, Serviços Partilhados, S.A., Member of the board of directors of Energia Própria, S.A., Member of the board of directors of Self Energy Engineering & Innovation, S.A., Member of the board of directors of Soares da Costa – Construção, SGPS, S.A., Member of the board of directors of Sociedade de Construções Soares da Costa, S.A., Member of the board of directors of Investifimo – Investimetos e Participações, S.A., Member of the board of directors

of Manuel Fino, SGPS, S.A., Member of the board of directors of Carfino, SGPS, S.A., Manager of Soares da Costa Hidroenergia 1T, Lda., Manager of Soares da Costa Hidroenergia 4T, Lda., Manager of Soares da Costa Hidroenergia 8T, Lda., Manager of Soares da Costa Hidroenergia 8C, Lda., Manager of Hidroeléctrica STP, Lda. – Sociedade Comercial de Responsabilidade, Lda.

Jorge Domingues Grade Mendes: Chairman of the board of directors of Soares da Costa Moçambique, S.A.R.L., Chairman of the board of directors of Clear – Instalações Electromecânicas S.A., Chairman of the board of directors of Construções Metálicas - Socometal S.A., Chairman of the board of directors of Contacto – Sociedade de Construções, S.A., Chairman of the board of directors of Ciagest - Imobiliária e Gestão, S.A., Chairman of the board of directors of Soarta - Sociedade Imobiliária Soares da Costa S.A., Chairman of the board of directors of Habitop – Sociedade Imobiliária S.A., Chairman of the board of directors of Cais da Fontinha – Investimentos Imobiliários, S.A., Chairman of the board of directors of Navegaia - Instalações Industriais, S.A., Deputy Chairman of the board of directors of Soares da Costa – Construção SGPS S.A., Deputy Chairman of the board of directors of Soares da Costa América, Inc., Deputy Chairman of the board of directors of Sociedade de Construções Soares da Costa, S.A., Deputy Chairman of the board of directors of Soares Da Costa – Imobiliária – SGPS, S.A., Manager of Mercados Novos - Imóveis Comerciais Lda., Manager of M.Z.I. - Sociedade de Construções, Lda.
Ana Maria Martins Caetano: Chairman of the board of directors of Parinama Participações e Investimentos, S.A., Chairman of the board of directors of Caetano Coatings, S.A., Manager of Parinama Serviços Unipessoal, Lda., Manager of Gepatimob – Investimentos Imobiliários, Lda., Manager of Saltriana Sociedade Agrícola de Triana, Lda., Manager of A Rama da Oliveira, Lda., Manager of JVE – Serviços de Radiologia, Lda.
António Manuel Formigal de Arriaga: Manager of Sítio do Livro, Lda.
António Pereira da Silva Neves: Not a member of any board of directors of other companies.
Carlos Moreira Garcia: Member of the Board of Trustees of Fundação Luso Brasileira.
José Manuel Baptista Fino: Chairman of the board of directors of Ramada Holdings SGPS S.A., Chairman of the board of directors of Ethnica SGPS S.A., Chairman of the board of directors of Área Infinitas - Design de Interiores S.A., Chairman of the board of directors of Ramada Energias Renováveis S.A., Chairman of the board of directors of Dignatis - Investimentos Imobiliários S.A., Member of the board of directors of Investifino- Investimentos e Participações SGPS S.A., Member of the board of directors of Manuel Fino SGPS S.A., Member of the board of directors of Cimpor - Cimentos de Portugal SGPS S.A., Deputy director of Specialty Minerals (Portugal) Especialidades Minerais S.A., Manager of Dorfino - Imobiliário Lda.
Martim Salema de Sande e Castro Fino: Manager of Workcare – Medicina, Higiene e Segurança no Trabalho.

Section III – GENERAL AND SUPERVISORY BOARD, FINANCIAL MATTERS COMMITTEE AND SUPERVISORY BOARD

II.21 Identification of the members of the supervisory board and statement indicating that same comply with the incompatibility rules provided for in article 414-A/1, and whether they comply with the independency criteria in article 414/5, both of the Commercial Companies Code

The Supervisory board is constituted by Júlio de Lemos Castro Caldas, Carlos Pedro Machado de Sousa Góis and Joaquim Augusto Soares da Silva. These members have stated that they comply with the incompatibility rules and with the independence criteria, detailed in article 414-1 and article 414-5 of Corporate Code, respectively.

II.22 Professional qualifications of the audit committee members, indication of professional activities carried out by the same in the last five years at least, number of shares in the company held by the same, date of first appointment and date of expiration of term of office

Júlio de Lemos de Castro Caldas (Chairman)

Graduation in Law in Universidade de Lisboa. Dean of the Lawyers Professional Association from 1993 to 1999. Chairman of the board of directors of Banco Bilbao Viscaya Argentaria (Portugal), S.A. for two mandates. Defence Minister from 1999 to 2001. Chairman of the audit committee of Companhia de Seguros Global and Global Via for three mandates. Designated to the office for the first time on 29-Apr-2008. Term of office expires on 31-Dec-2012.

Carlos Pedro Machado de Sousa Góis

Chartered Accountant number 597, partner of J. Bastos, C. Sousa Góis & Associados, SROC, Lda. registered in the Chartered Accountants Professional Association with the number 104. Functions in the company are related with the chartered accountant responsibilities, as defined by law, also assuming the function of single auditor. In the last 5 years has been a member of the Economists Professional Association, Accountants Professional Association, Technical Accountants Association (APOTECA), Tax Consultants Association, Information Systems Audit and Control Association (ISACA). Currently is the chartered accountant of several companies. Since 1987 is partner of J.Bastos, C. Sousa Góis & Associados, SROC, Lda. as a chartered accountant (number 597). Since 1987 is judicial administrator. In 1986/1997 was a teacher of Analytic Accounting, Introduction to Management, International businesses and Financial Accounting in Universidade Nova de Lisboa (Economics College). Designated to the office for the first time on 29-Apr-2008. Term of office expires on 31-Dec-2012.

Joaquim Augusto Soares da Silva

Graduation in Accounting and Management Control. Chairman of the general meeting of APPAC – Portuguese Association of Accounting Experts; elaboration and presentation of APPC's certification application of several public entities; coordinator of APPC training; member of the external evaluation committee of the Higher Education (subcommittee B2.2 – Corporate Management), including the analysis of the universities self evaluations, in loco evaluations and reporting. The current term of office as member of the supervisory board of Grupo Soares da Costa, SGPS, S.A. will cease on 31-12-2012. First appointment took place on 04-07-2006.

None of the members of the supervisory board earn any amount in other companies from Soares da Costa Group. By 31-Dec-2011, none of the members of the supervisory board held any shares or bond of the company.

II.23 Duties that the members of the supervisory board carry out in other companies and describing those which are carried out in other companies of the same holding

The members of the supervisory board carry out the following duties in other companies (none of which in Soares da Costa Group):

• Júlio de Lemos de Castro Caldas: Chairman do board of directors da SISAV – Sistema Integrado de Tratamento e Eliminação de Resíduos, S.A., Non executive member of the board of directors of EGEO – Tecnologia e Ambiente, S.A., Non executive member of the board of directors of OGMA – Indústria Aeronáutica de Portugal, S.A., Chairman of the general meeting board of ZON Multimédia SGPS, S.A., Chairman of the general meeting board of Navalrocha – Sociedade de Construções Navais, S.A., Chairman of the general meeting board of Multinova – União Livreira e

Cultural, S.A, Chairman of the general meeting board of Adega Cooperativa de Ponte da Barca, Chairman of the general meeting board of F. Albuquerque e Filhos, S.A., Manager of Estações – Comércio de Produtos Agrícola, S.A., Manager of Sociedade Agrícola de Faquelo, Lda, Manager of Sociedade Revisal, Lda., Chairman of the General Council of Supervision of Viniverde – Comércio e Produção de Vinho Verde, S.A., Member of the board of directors of Fundação da Casa de Mateus.

Carlos Pedro Machado de Sousa Góis: Single member of the audit committee, representing the chartered accounting company Sociedade J. Bastos, C Sousa Góis & Associado, SROC, Lda in the following companies: Escrita Digital. S.A., IG – Informática e Gestão, S.A., IG – Informática e Gestão, S.A., NCO SGPS, S.A., Sociedade Independente de Participações SGPS, S.A., Tavamar – Sociedade de Produtos Congelados, S.A., Viveiros do Falcão, S.A., Infosistema – Sistemas de Informáticos, S.A., Franquiger, S.A., INCG, SGPS, S.A., Nova Franquiger, S.A., OKE – Tiner, Lda., S3 Portugal – Des. de Circuitos Microelect. e Software, S.A., GTIE – Consultores, S.A., Sociedade Civil Agrícola Isalema, S.A., Âmbito – Sociedade Corretora de Seguros, Lda, Vans Madeira – Consultadoria e Projectos, S.A., Seveneves Investimentos Imobiliários, S.A., Robles Machado, SGPS, Lda, Tomásio Duarte, S.A., Legendra – Investimentos Imobiliários, S.A., Projecto Nata Design, S.A., Commonground, S.A., Tormo & Associados Portugal, S.A., Município de Angra do Heroísmo, Serviços Municipalizados de Angra do Heroísmo, Redislogar (Portugal) – Artigos Eléctricos, S.A., Rádio Renascença, Lda., Intervoz Publicidade, S.A., PR3D, Consultoria e Comunicação, S.A., Lizmontagens, Emp. Montagens Termo Industriais, S.A., DBL Aluminium Serviçes, S.A., COGECO – Consultadoria, Gestão e Contabilidade, S.A., COGECO II – Contabilidade, S.A., CORDIS – Gestão de Imóveis e Participações Sociais, S.A., M2SN – Soluções e Negócios, S.A., Promade – Construções, S.A., Celso & Santos, S.A., ESLAM – Estut. Lamin. Engenharia, S.A., Somercrest Industrial Holdings, SGPS, S.A., Nedphyl – Com. Prod. Alim., Farm. E Afins, S.A., Reilimpa, Limpezas e Serviços, S.A., FoxTransfers – Instrituição de Pagamento, Lda, Estoril-Live, S.A., Inbright, SGPS S.A., HPLife – Empreendimentos Imobiliários, S.A., Pug World, S.A.., LDC Group, SGPS, S.A., Kay Line – Sociedade Imobiliária, S.A., Sustentatudo, S.A., Grupo Euromarketing – SGPS, S.A., Geniupgrade, SGPS, S.A., Get – Estudos Técnicos e Construções, S.A., Culturangra, EEM, Legenda Viva, S.A., Centromar – Sociedade de Construções, S.A..
Joaquim Augusto Soares da Silva: Alternate member of the supervisory board of Cofina, SGPS, S.A., Alternate member of the supervisory board of Altri, SGPS, S.A., Alternate member of the supervisory board of Celulose do Caima, SGPS, S.A., Alternate member of the supervisory board of F. Ramada Investimentos, SGPS, S.A..

II.24 Reference to the fact that the supervisory board assesses the external auditor on an annual basis and the possibility of proposing to the general meeting that the auditor be discharged whenever justifiable grounds are present

The supervisory board annually evaluates the external auditor, and can propose to the general meeting that the auditor be discharged whenever justifiable grounds are present.

Section IV – REMUNERATION

II.30 Description of the remuneration policy of the board of directors and the supervisory board

In 2011, the remuneration committee submitted to the general meeting a proposal with the guidelines to be followed by the committee, also including the general guiding principles related with the executive members of the board' remuneration definition, namely in its variable component. Therefore, taking into consideration the market parameters, namely the guidelines followed in companies of similar dimension and activity, it was proposed and has been determined to link the remuneration of chairman of the board of directors to the remuneration of the chairman of the executive committee.

Additionally, below we reproduce the remuneration policy guidelines followed by the remuneration committee, which were approved at the general meeting held on 22-May-2007:

The remunerations of the members of the audit committee are a fixed amount, that takes into consideration both the company track record and the market practise;
The Chartered Accountant remuneration is defined taking into consideration the legal framework;
The members of the board of directors and the remuneration committee remuneration definition should take into consideration:
The market practise, taking into consideration the company's size and the Group's complexity;
The existence of non executive/ executive directors;
The representativeness of the Chairman of the board of directors;
The non executive directors' participation in eventual activities, committees, etc.
The representativeness of the Chairman of the executive committee;
The company's remuneration policy track record;
Regarding the executive directors, to have a variable component in the remuneration, based on several criteria as turnover, share price/ market capitalisation performance, earnings, noncurrent businesses, or other, as long as variable component does not surpass 6% of the Group's consolidated net income.

II.31 Indication on the amount concerning the annual remuneration paid individually to members of the board of directors and of the supervisory board of the company, including fixed and variable remuneration and as to the latter, mentioning the different components that gave rise to same, the parts that has been deferred and paid

The directors' remuneration is defined by the remuneration committee, elected by the general meeting of shareholders, following the guidelines also approved by the general meeting. In 2011, the board of directors' remuneration breakdown was the following:

Board Member		Subsidy	Fixed Remunera tion	Total 2011
António Formigal de Arriaga	Member, Non Executive, Independente	0	67,000	67,000
António Manuel Castro Henriques	Member, Executive	1,386	395,700	397,086
António Pereira Silva Neves	Member, Non Executive	0	209,000	209,000
Carlos Moreira Garcia	Member, Non Executive, Independente	0	67,000	67,000
Jorge Domingues Grade Mendes	Member, Executive (since 31st of August)	462	119,626	120,088
José Manuel Baptista Fino	Member, Non Executive	0	67,000	67,000
Manuel Roseta Fino	Chairman Board of Directors	0	256,000	256,000
Martim de Sande e Castro Fino	Member, Non Executive	0	67,000	67,000
PARINAMA/ Ana Maria Caetano	Member, Non Executive	0	67,000	67,000
Pedro Gonçalo Andrade Santos	Member, Executive	1,386	382,100	383,486
Pedro Manuel Almeida Gonçalves	Member, Executive (up to 30th of August)	882	327,923	328,805
	Total	4,116	2,025,349	2,029,465

The remunerations of the members of the board of directors summed, in 2011, 2,029,465 euros, of which 1,229,465 euros from the executive members and 800,000 from non executive members. Taking into consideration the current economic

context, the members of the executive committee renounced to the variable remuneration, and so, the figures indicated concern solely to fixed remuneration.

The supervisory board remuneration's breakdown in 2011 was as follows:

Board Member		Fixed Remuneration	Total 2011
Carlos Pedro Sousa Gois	Member	26,800	26,800
Joaquim Augusto Soares Silva	Member	16,750	16,750
Julio Lemos Castro Caldas	Member	51,200	51,200
Total		94,750	94,750

II.32 Information on the way the remuneration is structured so as to allow aligning the interests of the members of the board of directors with the long-term interests of the company as well as how it is based on the performance assessment and how it discourages excessive risk assumption

The remuneration committee established the remuneration guidelines taking into consideration the company's track record, the several members' responsibilities and representation and the market practise. Concerning the executive directors, the remuneration guidelines also considers a variable component of an amount that the committee believes is not an incentive to an excessive risk taking; however, and as mentioned, this variable component was not applied in 2011's remuneration.

II.33 As regards the remuneration of the executive members:

a) Reference to the fact that the executive members' remuneration includes a variable component and information on the way said component relies of the assessment performance;

The executive directors' remuneration includes, in general and as a rule, a variable component, to be attributable on a discretionary way by the remuneration committee, which is mainly based on the consolidated net income achieved in the previous year.

b) The corporate bodies responsible for assessing the performance of executive members;

The corporate body responsible for assessing the performance evaluation of the executive directors for remuneration purposes is the remuneration committee, constituted by: José Manuel Baptista Fino (chairman), João Pessoa e Costa and António Jorge Gonçalves Afonso. The remuneration committee currently does not integrate any executive director, nor executive directors, direct relatives up to 3rd grade, being therefore an independent committee. The remuneration policy proposed by the committee is approved by the shareholders in general meeting.

c) The pre-established criteria for assessing the performance of executive members;

The executive directors' performance for remuneration effects is assessed freely by the remuneration committee following the criteria the committee believes is the most adequate at each moment. Only the consolidated net income criterion is pre defined.

d) The relative importance of the variable and fixed components of the members' remuneration, as well as the maximum limits for each component;

In general, and as a rule, the variable component of the executive directors' remuneration weights 20% to 35% of the total remuneration. The sum of the variable components of the executive directors cannot surpass 6% of the consolidated net income.

e) The deferred payment of the remuneration's variable component and the relevant deferral period;

It is not defined any deferment period for the payment of the variable component of remunerations.

f) An account of the way whereby the payment of the variable remuneration is subject to the company's continual positive performance during the deferral period;

This issue is being study by the remuneration committee, however, any change should only be adopted in mandate programme; still, and taking into consideration its size and proportional nature, the committee has considered that this deferment does not make sense.

g) Sufficient information on the criteria whereon the allocation of variable remuneration on shares is based, as well as on maintaining company shares that the executive members have had access to, on the possible share contracts, namely hedging contracts or risk transfer, the relevant limit and its relation apropos the value of the total annual remuneration;

The distribution of shares as a variable component of the remuneration is not planned.

h) Sufficient information on the criteria whereon the allocation of variable remuneration on options is based as well as its deferral period and exercising price;

The distribution of options as a variable component of the remuneration is not planned.

i) The main factors and reasons for any annual bonus scheme and any other non-financial benefits;

No other type of remuneration is planned, besides the variable component

j) Remuneration paid in the form of a share in the profits and/or the payment of bonuses and the rationale behind the act of awarding such bonuses and/or share in profits;

It is not planned any remuneration paid in the form of a share in the profits and/or the payment of bonuses.

l) Compensation paid or owed to former executive directors in relation to early contract termination;

During the 2010 financial year, no compensation was paid or became due to former executive directors related with termination of their office during the financial year.

m) Reference to the envisaged contractual restraints for compensation owed for undue dismissal of executive directors and its relation apropos the remunerations' variable component;

No limits are contractually established for any compensation to be paid upon undue dismissal of executive directors, other than as provided for by law.

n) Amounts paid on any basis by other companies in a group relationship or exercising control over the company;

There were no amounts paid, for any reason whatsoever, by other companies in control or group relationship, except for the amount paid by the majority shareholder Investifino – Investimentos e Participações, SGPS, S.A. to the executive director Pedro Gonçalo de Sotto-Mayor de Andrade Santos, totalling 59,500 euros in 2011 financial year.

o) A description of the main characteristics of the supplementary pensions or early retirement schemes set up for executive directors and whether said schemes were subject or not to the approval of the general meeting;

There isn't any supplementary pension or early retirement scheme set up for directors.

p) An estimate of the non-financial benefits considered as remuneration which do not fall under the categories listed above;

There are no significant/ relevant non pecuniary benefit deemed as remuneration.

q) Mechanisms for preventing executive directors from having employment contracts that question the grounds of the variable remuneration;

The remuneration's variable component criteria do not allow implementing contracts that put into stake its existence.

II.34 Reference to the fact that remuneration of non-executive members of the Board of Directors is not included in the variable component

The non executive directors' remuneration does not have any variable component.

II.35 Information on the reporting of irregularities adopted by the company (reporting means, persons entitled to receive said reports, how the reports are to be handled and the names of the persons or bodies that have access to the information and the relevant involvement in the procedure).

The irregularities report policy has been released to all of the group's employees, referring to whom these irregularities should be reported (executive committee), the use given to that information (legal services will research and analyse the reported irregularity, using other services/units if necessary, and will make a proposal regarding an eventual solution and/or penalty), the confidentiality guarantee and annual and general statistical data on the reported irregularities. This data can be consulted by the shareholders, by request to the Investor Relations Office. Soares da Costa Group's internal and external procedure are based on ethical standards and in conformity with the legal framework. We believe these ethical standards should be followed by all employees, and team/department leaders and managers should monitor this with particular attention. The irregularities report main goal is to timely terminate and prevent irregularities from happening whether they are technical, economic, behaviour, legal or any other kind. In this policy definition, the Corporate Ethical Code, which applies to all the employees of the Group, has a particularly important role.

Section V – SPECIALIZED COMMITTEES

II.36 Identification of members of those committees that have been constituted for the purposes of individual and overall performance assessment of the executive members, consideration on the governance system that has been adopted by the company and the identification of potential candidates with the professional profile fitting the member position

Besides de supervisory board, the directors' performance evaluation is done by the remuneration committee, whose composition and functions have already been described. The directors are chosen by the shareholders and there is not any committee in charge of identifying potential member of the board of directors.

By the end of August 2011, the executive committee established the management committee, having as goal to support, with an advisory nature, the executive committee decisions, coordinate activities create synergies and facilitate the information flows between the several business and functional areas. Amongst other functions, this advisory committee have the following functions: assist the executive committee in the analysis of the current matters, proposing measures to its development in a correct way; analysis and discussion of the Group's business and monitoring of the activity development and of the results of the several companies and business areas; discussion of commercial strategies of the several business areas and of its implementation measures; analysis of the Group's resources to implement those strategies, proposing measures concerning its use and affectation; discussion of the eventual participation in large projects; discussion of the company's financial matters and measures to optimize cash flow; establish team building initiatives and synergies between the several business area and Group's companies, to improve profitability; discussion of the internal ad external communication strategy of the Group; and, in general, to analyse any issue/ matter requested by the executive committee. This management committee meets monthly, in accordance with the executive committee chairman notice, being held minutes of each meeting. In 2011, the management committee met five times.

The corporate governance committee, whose chairman is the secretary-general, has as main goal to monitor all the issues related with the company's governance, evaluating the existing model taking into consideration the company's operational context and strategy, proposing changes to this model when the committee believes they are necessary. This committee is composed by the following members: António Manuel Sousa Barbosa da Frada, Jorge Alves, António Jorge Gonçalves Afonso, Fernando Semana, António de Paula Santos and Rita Carles.

II.37 Number of meetings held by the committees that have been constituted for management and supervision during the period concerned, as well as reference to the minutes of said meetings that have been held

The board of directors met nine times in 2011, with an average attendance of 98%. The chairman of the supervisory board also attends the board of directors meetings. The supervisory board met eight times in 2011. The executive committee met twenty and nine times in the same period, with an average attendance of 100%. From all these meetings minutes are taken.

II.38 Reference to the fact that one member of the remuneration committee has knowledge and experience in remuneration policy issues

The members of the remuneration committee have the necessary skills and the experience in terms of remuneration policy based on their technical and professional qualifications and extensive curriculum in other companies.

II.39 Reference to the independency of natural or legal persons with an employment contract or providing services to the remuneration committee, as regards the Board of Directors as well as, when applicable, to the fact that these persons have an existing relation with the company consultant

The remuneration committee is constituted by three members. Its chairman is a non executive director of the board and the other two members are independent, with no connection whatsoever with the board of directors nor with any consultancy company. Were not contracted any services consultancy / support services for the Remuneration Committee.

III – INFORMATION AND AUDITING

III.1 The equity structure including those shares that are not admitted to trading, the different category of shares, rights and duties of these shares and the equity percentage that each category represents

The company's social capital is represented by 160,000,000 shares, with a nominal value of 1 Euro, of which 5,518 shares are preferential shares and 159,994,482 are ordinary shares. In accordance with article 342-3 of the Commercial Code preferential shares do not have voting rights. All shares are listed in Euronext Lisbon.

III.2 Qualifying holdings in the issuer's equity calculated as per article 20 of the Securities Code

Qualifying shareholdings as of December 31, 2011:

Manuel Fino, SGPS, S.A.	Shares (#)	% Capital	% Voting rights (*)
Indirectly through Investifino	113,302,682	70.814%	71.042%
Investimentos e Participações SGPS, S.A.
Total	113,302,682	70.814%	71.042%

PARINAMA – Participações e Investimentos, SGPS, S.A.	Shares (#)	% Capital	% Voting rights (*)
Directly	17,600,000	11.000%	11.035%
Total	17,600,000	11.000%	11.035%

Santander Asset Management - Sociedade Gestora de Fundos de Investimento Mobiliários, S.A.	Shares (#)	% Capital	% Voting rights (*)
Indirectly through:
Fundo Santander Acções Portugal	2,930,324	1.831%	1.837%
Fundo Santander PPA	312,634	0.195%	0.196%
Total Imputável	3,242,958	2.027%	2.033%

(*) Taking into consideration 5,518 preferred nonvoting shares and 507,292 own shares, as of December 31, 2011

Participations held by the members of the corporate bodies, as of December 31, 2011:

Manuel Roseta Fino (Chairman of the board of directors): Chairman of the board of directors da Investifino – Investimentos e Participações S.A.. This company held 113,302,682 shares, as of January 1, 2011, corresponding to 70.814% of the share capital, a stake unchanged as of December 31, 2011.

Pedro Gonçalo de Sotto-Mayor de Andrade Santos (Executive member of the board of directors): Member of the board of directors of Investifino – Investimentos e Participações S.A.. This company held 113,302,682 shares, as of January 1, 2011, corresponding to 70.814% of the share capital, a stake unchanged as of December 31, 2011.

António Pereira da Silva Neves (Non executive member of the board of directors): As of January 1, 2011 held 13,220 shares,

a participation unchanged as of December 31, 2011.

Ana Maria Martins Caetano (Non executive member of the board of directors): Chairman of the board of directors of PARINAMA – Investimentos e Participações, SGPS, S.A.. This company held 17,600,000 shares, as of January 1, 2011, corresponding to 11.000% of the share capital, a stake unchanged as of December 31, 2011.

José Manuel Baptista Fino (Non executive member of the board of directors): Member of the board of directors of Investifino – Investimentos e Participações S.A.. This company held 113,302,682 shares, as of January 1, 2011, corresponding to 70.814% of the share capital, a stake unchanged as of December 31, 2011.

The remaining members of the corporate bodies do not have any shares of the company.

III.3 Identification of the shareholders that hold special rights and a description of those rights

There are no shareholders with special rights, besides the shareholders with preferential shares that have the right to preferential dividends but are not entitled to vote at general meetings.

III.4 Possible restrictions on share-transfer i.e. consent clauses for their disposal or restrictions on share-ownership

There aren't any restrictions or limitations to the share transferability or ownership. There are no limits to the voting rights. All shareholders have the same rights, taking into consideration the special legal features of the preferential shares.

III.5 Shareholder agreements that the company may be aware of and that may restrict the transfer of securities or voting rights

The company is not aware of any shareholders' agreements which might lead to restrictions in the transfer of securities or voting rights.

III.6 Rules applicable to the amendment of the articles of association

The amendment of the company's articles of association is subject to the Portuguese corporate legal framework.

III.7 Control mechanisms for a possible employee-shareholder system inasmuch as the voting rights are not directly exercised by them

There aren't any control mechanisms for a possible employee-shareholder system inasmuch as the voting rights are not directly exercised by them.

III.8 Description concerning the evolution of the issuer's share price and taking the following into account:

Performance of the Soares da Costa Group' stock price in 2011 (in euros)

Legend – Main Material Information Released in 2011:

1. 18-03-2011 Qualified Shareholding by Santander Asset Management
2. 04-04-2011 Full-year 2010 Earnings Release
3. 12-05-2011 General Shareholders Meeting Resolutions
4. 30-05-2011 1st Quarter of 2011 Earnings Release
5. 30-06-2011 Award of a Work to Prince (United States)
6. 28-07-2011 Changes in the Executive Committee's Composition
7. 29-07-2011 Award of a Work in Angola
8. 19-08-2011 First Works Contracted in Brazil
9. 26-08-2011 Award of a Design-Built Project to Prince (United States)
10. 30-08-2011 Cooptation of a Member of the Board of Directors and Recomposing of the Executive Committee
11. 31-08-2011 1st Half Earnings Release
12. 20-10-2011 Termination of Liquidity Contract
13. 28-11-2011 3rd Quarter Earnings Release and Strategic Plan Update

Relative Performance of Soares da Costa Group' stock price and PSI20 market index in 2011 (base 100)

During 2011, 21.3 million shares were traded, less 64% than in the previous tear, corresponding to a trading volume in euros of 9.8 million, a 81% fall compared with 2010, reflecting both the decrease in the share price (-31% of cumulated fall in the year), and the already mentioned decline in the number of shares traded. The stock price trend and the lower liquidity also affected the remaining stocks of the Euronext Lisbon, as proven by the cumulated 28% fall of the PSI20 index, which also suffered a decrease of 26% in the amount traded in 2011.

In the following table we detail some historical data on the ordinary shares performance:

		2011	2010	2009	2008	2007	2006	2005
Number of Shares Traded		21,292,523	59,100,588	186,757,988	81,095,182	510,237,948	286,071,140	33,505,540
Amount Traded	'000 EUR	9,8	50,8	195,3	123,1	857,5	183,0	10,4
Opening Stock Price	EUR/per share	0.55	1.18	0.65	2.08	0.69	0.35	0.37
Closing Stock Price	EUR/per share	0.37	0.54	1.20	0.63	2.09	0.69	0.35
Average Stock Price	EUR/per share	0.43	0.86	1.04	1.52	1.68	0.64	0.31
Max. Stock Price	EUR/per share	0.59	1.27	1.34	2.13	2.87	0.77	0.39
Date		09-Feb	07-Jan	14-Dec	04-Jan	10-Jul	21-Aug	11-Jan
Min. Stock Price	EUR/per share	0.27	0.49	0.50	0.58	0.69	0.33	0.26
Date		10-Aug	22-Dec	19-Dec	19-Dec	02-Jan	16-Jan	05-Dec

Source: Euronext

Note: The quantities and prices of 2005 and 2006 were adjusted taking into consideration the stock split done in August 2006, to €1.00 nominal value from €5.00.

III.9 Description of the dividend distribution policy adopted by the company, including the dividend value per share distributed during the last three periods

For the third consecutive year, the Group paid dividends to its shareholders. Therefore, from June 13, 2011 onwards the company paid dividends both to the ordinary and preferred nonvoting shares:

Euro		2010		2009	2008
	Gross	Net	Gross	Net	Gross	Net
Ordinary Shares	0.0217	0.017	0.0434	0.0347	0.031	0.0248
Preferred Shares	0.05	0.0393	0.05	0.04	0.15	0.12

III.10 A description of the main characteristics of the share and stock-option plans adopted or valid for the financial year in question

During the 2011 financial year, the Company did not adopt any share and stock-option plans, nor did any such plans remain in force.

III.11 A description of the main data on business deals and transactions carried out between the company and between the members of the Management and Supervisory Board or companies in a control or group relationship, provided the amount is economically significant for any of the parties involved, except for those business deals or transactions that are cumulatively considered within the bounds of normal market conditions for similar transactions and are part of the company's current business

During 2011, there were not any transactions between the company and the management and supervisory bodies or qualified shareholders or companies in a control or group relationship.

III.12 Description of the vital data on business deals and transactions carried out in the absence of normal market conditions between companies and owners of qualifying holdings or entity-relationships with the former, as envisaged in article 20 of the Securities Code

Not applicable.

III.13 Description of the procedures and criteria applicable to the supervisory body when same provides preliminary assessment of the business deals to be carried out between the company and the owners of qualifying holdings or entityrelationships with the former, as envisaged in article 20 of the Securities Code

The supervisory board gives its prior opinion to eventual transactions between the company and owners of a qualified participation or related entities.

III.14 Description of the statistical data (number, average and maximum values) on the business deals subject to preliminary opinion by the supervisory board

There were no transactions with these characteristics. Furthermore, the supervisory board accompanies the company activity and, furthermore, the audit committee chairman attends the board of directors' meetings.

III.15 Indication of the availability on the company's website, of annual activity reports drawn up by the general and supervisory board, by the financial matters committee, the audit committee and the supervisory board, including constraints that might be encountered, as well as financial information documents

The annual reports on the board of directors and supervisory board activity are available of the company's website, including eventual constraints faced.

III.16 Reference to an Investor Assistance Unit or a similar service, describing: a) The role of said office; b) Type of information made available; c) Access means to said Office; d) The company's website; e) The market liaison officer's credentials

The company and executive committee have adopted a policy regarding investors and shareholders of direct and permanent contact. The company has an investor support office organised as a department, which assures the communication with shareholders, investors, equity analysts and the market in general.

Material information release is electronically and directly sent to CMVM's extranet and to Euronext Lisbon internet site. The company fully complies with the legal framework regarding information release (annual report and accounts, notices, interest payment press releases, etc.) and general meeting of shareholders' related information.

The company's official interne site, www.soaresdacosta.pt, has information specifically directed to investors ("Investors" submenu) namely financial figures quarterly updated, general meetings' notices, general meetings' deliberations, information on bond issues, dividend and interest payments, bylaws, management reports and accounts and material information releases. During 2011, the market relations representative continued to be the Group's secretary-general, António Manuel Sousa Barbosa da Frada, supported by the investor relations office. The representative to the market relations contacts are: antó[email protected]. Information requests should be preferably sent to the investor relations officer: Rita Carles, [email protected], telephone + 351 21 791 3236 or + 351 22 834 2217. The investor relations office provides information on the share price historic performance, general meetings' attendance (direct or be representative), necessary documents to the general meetings, dividend payments, bonds coupons and redemptions, annual reports and accounts, half year and quarterly financial accounts and material information releases. Although all this information is available on www.soaresdacosta.pt, by request, this can also be sent by mail or e-mail. The investor relations office requires the applicant's identification and, eventually, the purpose of the information request. All the information is available in Portuguese and English.

The contact for the media is the Communication, Sustainability ad Organizational Change department: Rita Nunes Pinto, [email protected], telephone +351 22 834 2221.

III.17 Indication of the annual compensation paid to the auditor and to other individuals or groups that belong to the same network supported by the company and/or by any group that bears with it a control or group relationship and the percentage of the total amount paid for the following services: a) Statutory account review services; b) Other audit reliability services; c) Tax consulting services; d) Other non-statutory auditing services

The company's external auditor is BDO & Associados, SROC, number 29 in the Chartered Accountants Professional Association and number 1122 in the CMVM's auditors' registration, represented by Paulo Jorge de Sousa Ferreira (Chartered Accountant number 781). In 2011, these audit services provided to the company (and other related entities, in which the company has a controlling participation) amounted to 107,625 euros. The services provided by the chartered accountant, Grant Thornton & Associados – SROC, to the company (and other related entities, in which the company has a controlling participation) summed 129,960 euros in 2011. The board of directors states that, prior to sign up any service to the company's external auditor, makes sure that this will not put their independence at risk (as defined in CMVM's recommendation number C (202) 1873 of 16-May-2004).

III.18 Reference to the external auditor's rotation period

The current external auditor initiated functions in 2005.

III – CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL POSITION AS OF DECEMBER 31, 2011 AND 2010

				(Euro)
A S S E T S	Notes	31.12.2011	31.12.2010	31.12.2010
			restated
NON CURRENT
Intangible fixed assets:
Goodwill	8 e 9	86,896,365	87,156,004	87,156,004
Other intangible fixed assets	8 e 9	255,443,363	267,243,983	267,243,983
	7	342,339,728	354,399,987	354,399,987
Tangible fixed assets:
Land and buildings	9	169,262,712	152,138,253	152,138,253
Basic equipment	9	66,447,006	70,554,688	70,554,688
Other tangible fixed assets	9	17,552,831	22,042,596	22,042,596
Fixed assets in progress	9	18,459,450	26,438,863	26,438,863
	7	271,721,999	271,174,400	271,174,400
Investment properties	11	9,907,556	10,026,295	10,026,295
Financial investments:
Financial investments under the equity method	11	11,607,524	12,530,850	12,530,850
Loans to associated companies	11	10,399,882	9,471,239	9,471,239
Other financial investments	11 e 21	12,876,395	11,722,555	11,722,555
	7	34,883,801	33,724,644	33,724,644
Deferred taxes (assets)	7 e 26	40,941,330	29,485,716	29,485,716
Other non current assets	7, 13 e 30	237,395,050	101,653,940	69,392,335
Total non current assets		937,189,464	800,464,982	768,203,377
CURRENT
Inventories	7, 12 e 21	127,938,135	158,306,787	158,306,787
Accounts receivable:
Trade Debtors	13, 21 e 30	440,708,549	423,273,006	451,527,081
Receivables from Public Entities		1,441,691	2,604,802	2,604,802
Other accounts receivable	13 e 21	61,307,338	49,686,475	53,694,004
	7	503,457,579	475,564,282	507,825,887
Other current assets	7 e 14	109,009,408	130,413,871	136,587,275
Cash, Deposits and Securities	7 e 15	86,098,349	96,531,607	96,531,607
Total current assets		826,503,472	860,816,546	899,251,556
TOTAL ASSETS	7 e 30	1,763,692,936	1,661,281,528	1,667,454,933

CONSOLIDATED FINANCIAL POSITION AS OF DECEMBER 31, 2011 AND 2010

SHAREHOLDERS EQUITY and LIABILITIES	Notes	31.12.2011	31.12.2010 restated	(Euro) 31.12.2010
SHAREHOLDERS' EQUITY
Share capital	16	160,000,000	160,000,000	160,000,000
Own shares	16	(172,526)	(197,780)	(197,780)
Reserves and retained earnings	16	(49,820,845)	(40,041,140)	(40,286,958)
Net income	7	2,376,012	15,629,331	15,570,960
Equity attributable to the group		112,382,641	135,390,411	135,086,222
Minorities		4,139,852	4,170,912	4,170,912
Total shareholders' equity		116,522,493	139,561,323	139,257,134
LIABILITIES
NON CURRENT
Provisions	21	886,200	704,145	704,145
Loans:
Bonds	17	97,604,741	97,204,246	100,000,000
Bank loans	17	538,988,548	429,504,930	433,111,904
		636,593,289	526,709,177	533,111,904
Accounts payable	19	51,310,099	44,959,160	15,811,119
Derivatives	18	53,939,404	25,550,030	-
Deferred assets (liabilities)	26	27,884,259	31,264,257	31,264,257
Total non current liabilities		770,613,251	629,186,768	580,891,425
CURRENT
Loans:
Bank loans	17	269,468,826	247,536,906	247,700,168
Outher loans	17	37,850,092	46,607,772	46,607,772
		307,318,918	294,144,678	294,307,940
Accounst payable:
Trade Creditors		227,775,844	253,552,158	262,169,173
Fixed assets suppliers		3,790,535	8,068,350	8,068,350
Advances on sales		75,655,448	112,905,358	133,436,384
Taxes		8,809,377	3,453,256	3,453,256
Other accounts payable	19	56,659,835	52,213,120	52,213,120
		372,691,039	430,192,243	459,340,284
Derivatives	18	12,504,360	12,790,859	40,052,559
Other current liabilities	20	184,042,876	155,405,656	153,605,591
Total current liabilities		876,557,193	892,533,436	947,306,374
Total liabilities	7 e 30	1,647,170,444	1,521,720,205	1,528,197,799
Total shareholders's equity and liabilities		1,763,692,936	1,661,281,528	1,667,454,933

CONSOLIDATED INCOME STATEMENT FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010

				(Euro)
INCOME STATEMENT	Notes	2011	2010	2010
			restated
Turnover	7	873,548,049	893,528,161	893,528,161
Change in production		(19,097,212)	(17,236,048)	(17,236,048)
Other operating income	23	32,367,362	27,265,352	27,265,352
Operating income		886,818,200	903,557,465	903,557,465
Cost of goods sold		(186,470,924)	(176,237,285)	(176,237,285)
Third party supplies & services		(437,246,965)	(460,878,171)	(460,878,171)
Staff costs	24	(146,388,809)	(156,482,764)	(156,482,764)
Depreciation and imparity losses	7	(33,791,882)	(34,548,579)	(34,548,579)
Provisions	7	(1,936,230)	(4,115,004)	(4,115,004)
Other operating costs	23	(22,096,255)	(21,402,316)	(21,402,316)
Operating costs		(827,931,065)	(853,664,119)	(853,664,119)
Operating results from continued activities	7	58,887,135	49,893,346	49,893,346
Interest received		14,441,415	10,446,738
Interest paid		(55,587,613)	(46,484,789)
Net financing costs	25	(41,146,199)	(36,038,051)	(35,466,994)
Gains in associated companies		665,568	856,114
Losses in associated companies		(500,001)	(506,765)
Gains and losses in associated companies	25	165,566	349,349	349,349
Income and capital gains in stakes held		1,484,231	18,379,035
Other financial income		35,206,631	27,439,509
Other financial costs		(47,509,853)	(43,669,826)
Other financial income & costs	25	(10,818,991)	2,148,718	1,519,290
Financial results	7 e 25	(51,799,624)	(33,539,983)	(33,598,355)
Earnings before taxes		7,087,511	16,353,363	16,294,991
Income tax	7 e 26	(4,746,210)	(323,524)	(323,524)
Net income	7	2,341,301	16,029,838	15,971,467
Attributable to the Group	7	2,376,012	15,629,331	15,570,960
Minorities	7	(34,711)	400,507	400,507
Earnings per share of continued activities:	27
Basic		0.015	0.098	0.097
Diluted		0.015	0.098	0.097
Earnings per share:	27
Basic		0.015	0.098	0.097
Diluted		0.015	0.098	0.097

CONSOLIDATED INCOME STATEMENT TO THE 4TH QUARTER OF 2011 and THE 4TH QUARTER OF2010

		(Euro)
INCOME STATEMENT	4th Quarter	4th Quarter
	2011	2010
Turnover	243,766,815	265,994,484
Change in production	(21,830,458)	(18,962,099)
Other operating income	21,217,253	7,573,536
Operating income	243,153,611	254,605,922
Cost of goods sold	(53,303,031)	(44,470,866)
Third party supplies & services	(119,655,875)	(140,130,758)
Staff costs	(38,097,556)	(39,314,833)
Depreciation and imparity losses	(8,732,695)	(8,203,325)
Provisions	(1,614,170)	(1,985,034)
Other operating costs	(8,005,761)	(9,221,575)
Operating costs	(229,409,087)	(243,326,392)

Operating results from continued activities	13,744,524	11,279,530
Interest received	4,710,488	(1,917,373)
Interest paid	(15,862,260)	(14,645,867)
Net financing costs	(11,151,774)	(16,563,240)
Gains in associated companies	249,527	514,088
Losses in associated companies	(409,589)	(153)
Gains and losses in associated companies	(160,063)	513,936
Income and capital gains in stakes held	762,828	16,952,977
Other financial income	14,680,531	9,247,928
Other financial costs	(17,950,211)	(13,105,438)
Other financial income & costs	(2,506,853)	13,095,467
Financial results	(13,818,689)	(2,953,837)
Earnings before taxes	(74,165)	8,325,693
Income tax	(1,855,562)	1,621,188
Net income	(1,929,727)	9,946,880
Attributable to the Group	(1,961,131)	9,807,647
Minorities	31,404	139,233
Earnings per share	(0.012)	0.061

STATEMENT OF CONSOLIDATED COMPREHENSIVE INCOME FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010

				(Euro)
	Notes	2011	2010 restated	2010

Consolidated net profit for the period	7	2,341,301	16,029,838	15,971,467
Other comprehensive income
Exchange difference stemming from transposition of financial
statements expressed in foreign currencies		(16,631)	1,906,477	1,906,477
Variation on fair value of derivatives	16	(28,102,874)	(13,659,559)	(13,659,559)
Variation on deferred taxes of derivatives	16	7,378,018	5,149,797	5,149,797
Ajustments in investment consolidated by equity method		(883,858)	1,970,827	1,970,827
Other variations		(45,884)	(14,453)	(14,453)
Total comprehensive income for the period		(19,329,928)	11,382,927	11,324,556
Attributable:
minorities		(31,061)	693,800	693,800
to the Group		(19,298,868)	10,689,127	10,630,756

STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010

	Equity capital	Own shares	Reserves and retained earnings	Reserves for foreign exchange	Coverage derivatives	Other	Own funds attributable to shareholders	Own funds attributab le to minorities	(Euro) Total equity
Balance as of 01/Jan/2011
	160,000,000	(197,780)	(1,633,280)	(337,995)	(24,644,913)	2,204,380	135,390,411	4,170,912	139,561,324
Dividend distribution Acquisition of own	-	-	(3,463,847)	-	-	-	(3,463,847)	-	(3,463,847)
shares	-	25,254	(93,580)	-	-	-	(68,326)	-	(68,326)
Others Integrated consolidated	-	-	(4,936,786)	(369,912)	5,129,968	-	(176,730)	-	(176,730)
earnings Balance as of	-	-	2,376,012	(20,282)	(20,724,856)	(929,742)	(19,298,868)	(31,061)	(19,329,928)
31/Dec/2011	160,000,000	(172,526)	(7,751,481)	(728,190)	(40,239,801)	1,274,639	112,382,640	4,139,852	116,522,492

	Equity capital	Own shares	Reserves and retained earnings	Reserves for foreign exchange	Coverage derivatives	Other	Own funds attributable to shareholders	Own funds attributab le to minorities	Total equity
Balance as of
01/Jan/2010	160,000,000	-	(10,494,587)	(1,951,180)	(16,135,152)	248,007	131,667,089	1,005,445	132,672,534
Dividend distribution Acquisition of own	-	-	(6,944,036)	-	-	-	(6,944,036)	-	(6,944,036)
shares	-	(197,780)	(72,862)	-	-	-	(270,642)	-	(270,642)
Others Integrated consolidated	-	-	3,055	-	-	-	3,055	2,471,667	2,474,723
earnings Balance as of	-	-	15,570,960	1,613,184	(8,509,762)	1,956,374	10,630,756	693,800	11,324,556
31/Dec/2010	160,000,000	(197,780)	(1,937,470)	(337,995)	(24,644,914)	2,204,381	135,086,222	4,170,912	139,257,134

	Equity capital	Own shares	Reserves and retained earnings	Reserves for foreign exchange	Coverage derivatives	Other	Own funds attributable to shareholders	Own funds attributab le to minorities	Total equity
Balance as of 01/Jan/2010
restated	160,000,000	-	(10,248,769)	(1,951,180)	(16,135,152)	248,007	131,912,907	1,005,445	132,918,352
Dividend distribution	-	-	(6,944,036)	-	-	-	(6,944,036)	-	(6,944,036)
Acquisition of own
shares	-	(197,780)	(72,862)	-	-	-	(270,642)	-	(270,642)
Others	-	-	3,055	-	-	-	3,055	2,471,667	2,474,723
Integrated consolidated
earnings	-	-	15,629,331	1,613,184	(8,509,762)	1,956,374	10,689,127	693,800	11,382,927
Balance as of 31/Dec/2010
restated	160,000,000	(197,780)	(1,633,280)	(337,995)	(24,644,914)	2,204,381	135,390,411	4,170,912	139,561,323

CONSOLIDATED CASH FLOWS STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010 AND FROM OCTOBER 1 TO DECEMBER 31, 2011

	2011		2010			(Euro) 4th Quarter 2011
Operating activities:
Receipts from customers	729,226,037		752,095,124		172,932,297
Payments to suppliers	(626,458,193)		(593,336,470)		(168,496,946)
Payments to staff	(132,808,555)		(147,633,688)		(35,023,315)
	(30,040,711)		11,124,966		(30,587,965)
Payments/ receipts of income tax	(4,740,400)		(9,972,853)		(967,619)
Other payments/ receipts related with oper.activities	(46,802,211)		(21,063,839)		(25,163,957)
	(51,542,610)		(31,036,692)		(26,131,576)
Cash flow from operating activities		(81,583,322)		(19,911,726)		(56,719,540)
Investment activities:
Receipts from:
Financial investments	458,000		21,099,460		-
Fixed tangible assets	2,398,866		1,596,954		556,469
Interest and similar income	1,358,028		421,792		463,353
Dividends	198,276	4,413,171	1,344,692	24,462,898	-	1,019,822
Payments related with:
Financial investments	2,335,341		4,864,358		146,839
Fixed tangible assets	8,259,962		8,893,028		3,418,746
Intangible assets	1,996,014	12,591,317	6,044,738	19,802,125	1,109,265	4,674,849
Cash flow from investment activities		(8,178,146)		4,660,772		(3,655,027)
Financing activities:
Receipts from:
Loans	473,507,895		485,077,136		106,269,351
Capital increases, supplem. payments and issue prem.	-		125,243		-
Sale of own shares	670,031		464,071		130,088
Interest received	288,766	474,466,692	307,312	485,973,762	96,063	106,495,503
Payments related with:
Loans	323,401,232		403,019,841		58,387,641
Financial leasing contracts	9,692,216		11,616,996		1,975,991
Interest paid	55,991,809		49,555,517		23,017,590
Dividends	3,750,881		6,939,695		160,683
Acquisition of own shares	810,073	393,646,211	734,713	471,866,762	119,488	83,661,394
Cash flow from financing activities		80,820,481		14,107,000		22,834,109
Change in cash and cash equivalents		(8,940,987)		(1,143,953)		(37,540,459)
Effect of foreign exchange differences		(1,486,230)		1,690,231		787,851
Effect of changes in stakes/ participations		(6,041)		2,702,212		(11,876)
Cash and cash equivalents at the beginning of the period		96,531,607		93,283,117		-
Cash and cash equivalents at the end of the period		86,098,349		96,531,607		(36,764,484)

ANNEX TO THE CONSOLIDATED CASH FLOWS STATEMENTS

Acquisitions, underwriting, capital increases and changes in shareholdings

Inflow by cash and equivalents of 458,00 Euros regarding the alienation of the Group's stake in "Mini Price Hotels (Porto). S.A.".
Outflow by cash and equivalents of 1,930,499 Euros regarding the Group's participation in "Energia Própria, S.A.".
Equity injection in "Autopistas Del Valle, S.A." of 118,247 Euros, by cash and equivalents.
Equity injection in "Roof Tops of Spain, S.A." of 50,000 Euros, by cash and equivalents.
Equity injection in "Larvick Reliable, R.L." of 10,000 Euros, by cash and equivalents.
Equity injection in "Metropolitan Transportation Solutions, Ltd." of 53,054 Euros, by cash and equivalents.
Equity injection (accessory installments) in "Elos Ligações de Alta Velocidade, S.A." of 163,040 Euros, by cash and equivalents
Outflow by cash and equivalents of 2,500 Euros regarding the Group's participation in "MY Watt Lda.".

Cash and equivalents breakdown
--------------------------------	--	--	--	--	--	--

	31/12/2011	31/12/2010

Cash	951,975	1,226,220
Bank deposits (immediately ava ilable)	84,832,285	95,305,387
Equi val ents to cash	314,090	-

Cash and equiva lents	86,098,349	96,531,607
Tradable Securities	-	-
Cash in Consoli dated Financia l Positi on Statement	86,098,349	96,531,607

Other Transactions

Inflow by cash and equivalents of 120,961 Euros of dividends paid by "Vortal, S.A." to "Soares da Costa Construção, SGPS, S.A.".
Outflow by cash and equivalents of 3,461,357 Euros of dividends paid by "Grupo Soares da Costa, SGPS, S.A." to its shareholders.

GRUPO SOARES DA COSTA, SGPS, SA

Consolidated Accounts– December 31, 2011

Consolidation Perimeter and Methods

Grupo Soares da Costa, SGPS, SA

(1) Company held (33.33%) by Clear – Instalações Electromecânicas, S.A.. (2) Additionally, Ciagest, SA has a 1% participation in SDC Imobiliária, Lda.

(3) Additionally, Sociedade de Construções Soares da Costa, SA, Ciagest, SA, Clear, SA and SDC Serviços Técnicos e de Gestão, SA have, each, a 0.01% participation in SCSP – Soares da Costa Serviços Partilhados, SA. (4) Additionally, Sociedade de Construções Soares da Costa, SA holds a 4% participation in Auto-estradas XXI, S.A. and Operestradas XXI, SA..

(5) Additionally, Sociedade de Construções Soares da Costa, S.A. holds a 0.004% participation in Exproestradas XXI, S.A..

(6) Additionally, SDC Serviços Técnicos e de Gestão, SA and Hidroequador Santomense hold, each, a 0.002% participation in SDC Hidroenergia, SA..

(7) Additionally, Clear Angola, S.A. holds a 2% participation in Costa Sul, Lda. and in Imosede, Lda..

(8) Company held (16.302%) by Soares da Costa Concessões, SGPS, S.A. and by (0.002%) Sociedade de Construções Soares da Costa, S.A.

(9) Additionally, Intevias – Serviços e Gestão, S.A. holds a 0.002% of Portvias, S.A.. (10) Additionally, Grupo Soares da Costa, SGPS, S.A. holds a 0.5% participation in Indáqua Feira, S.A..

(11) Additionally, Sociedade de Construções Soares da Costa, S.A. Holds a 1% stake in MTA, LDA. and in Carta Angola, LDA.

CONSOLIDATED ACCOUNTING POLICIES AND EXPLANATORY NOTES AS OF DECEMBER 31, 2011

1. INTRODUTORY NOTE

The company currently named GRUPO SOARES DA COSTA, SGPS, SA ("Company") was incorporated on 02 June 1944, under the name "Soares da Costa, Lda.", a limited company that has been changed into a public company by deed of 01 May 1968, also changing its denomination to "Sociedade de Construções Soares da Costa, S.A.".

As of December 30, 2002, after a Group re-organisation process, the company assumed its current name and changed its mission into the "management of shareholdings as an indirect way to develope economic activities".

The current share structure of the "Grupo Soares da Costa" is represented in the annexed diagram.

The full list of the companies included in the Group's consolidation perimeter and the consolidation methods applied are detailed in the following notes.

Figures mentioned in the Notes are in Euros, unless otherwise indicated.

2. MAIN ACCOUNTING POLICIES

The main accounting policies adopted in the preparation of the consolidated financial statements are as follows:

2.1. PRESENTATION BASIS

The consolidated financial statements assume the Company's continuity and were compiled from the accounting records of the companies included in consolidation, which were kept according to the accounting principles accepted in Portugal, and adjusted in the consolidation process to ensure that the consolidated financial statements comply with International Standards on Financial Reporting as adopted in the European Union, in force for the financial year starting at 01 January 2005, from which date the Company began applying IAS/IFRS.

The financial statement include some figures that were estimated, affecting the amounts reported as assets and liabilities, as well as those reported as income and costs for the period reported. All estimates and assumptions made by the Board of Directors were based on the best information available at the date the financial statements were approved.

The Board of Directors believes that the attached consolidated financial statements and subsequent notes are a fair representation of the consolidated financial information.

The following standards, amendments and interpretations are effective for the first time with reference to January 1, 2011: - Classification of rights issues (Amendment to IAS 32);

Termination of financial liabilities by equity instruments (IFRIC 19);
Disclosure of related parties (Amendment to IAS 24 and IFRS 8);
Pre-payment of a minimum funding requirement (amendment to IFRIC 14);
Improvements to IFRSs in May 2010.

The effect on the financial statements of Grupo Soares da Costa SGPS SA for the year ended December 31, 2011, arising from the standards, interpretations, amendments and revisions set out above, where applicable, was not significant. In terms of standards or interpretations issued by IASB, but not yet effective in this exercise, we emphasize the following:

Standard / Interpretation	Change	Date of Application (IASB)
Transfers of financial assets	Amendment to IFRS 7	01/07/2011 (*)
Recovery of non-depreciable assets	Amendment to IAS 12	01/01/2012 (**)
Exemption for severe hyperinflation and removal of fixed dates	Amendment to IFRS 1	01/07/2011 (**)
Presentation of items of other comprehensive income	Amendment to IAS 1	01/07/2012
Employee benefits	Amendment to IAS 19	01/01/2013
Compensation of financial assets and financial liabilities	Amendment to IFRS 7	01/01/2013
Compensation of financial assets and financial liabilities	Amendment to IAS 32	01/01/2014

Disclosures about the transition to IFRS 9	Amendment to IFRS 7	01/01/2015
Government subsidies	Amendment to IFRS 1	01/01/2013
IFRIC 20 - Removal costs during production of a surface mine	New standard	01/01/2013
IFRS 9 - Financial Assets - Classification and measurement	New standard	01/01/2013
IFRS 10 - Consolidated financial statements	New standard	01/01/2013
IFRS 11 - Joint agreements	New standard	01/01/2013
IFRS 12 - Disclosure of interests in other entities	New standard	01/01/2013
IFRS 13 - Fair value: measurement and disclosure	New standard	01/01/2013
IAS 27 - Separate financial statements	Revision of the standard	01/01/2013
IAS 28 - Investments in associates and joint ventures	Revision of the standard	01/01/2013

*) Endorsed by the European Union on November 23, 2011 and effective for years beginning after July 1, 2011.

(**) According to the report EFRAF of March 19, 2012 - "The EU endorsement status report", the endorsement is not expected before the effective date. Grupo Soares da Costa has not yet completed the clearance of all impacts resulting from implementation of the standards mentioned above.

In 2011 we proceeded to the change in accounting policy on the distinction between assets and current liabilities versus noncurrent, associated with the register of deductions for guarantees to customers, retention of guarantees made to suppliers, customer advances and derivative financial instruments, having proceeded to the restatement on the financial position relating to December 31, 2010. Thus, we estimated the values of assets and liabilities maturing within more than one year after the date of such statement.

In 2011 also made the change in accounting policy on bank loans. The loans were presented at its face value, with the deferral of the linear initial charges and as ofDecember 31, 2011 came to be measured at amortized cost (note 2.6 c)), thus fulfilling stipulated in IAS 39 and IAS 32.

In accordance with IAS 8 the company proceeded to the restatement of financial statements for the year 2010. Reconciliation of equity and net income for 2010 is as follows:

Shareholders equity by January 1, 2010	132,672,534
Costs and interest pa id adjustments	245,818
Restated shareholders equity by January 1, 2010	132,918 ,352


2010's net income	15,570,960
Costs and interest pa id adjustments	58,371
Restated 2010's net income	15,629,331

2.2. CONSOLIDATION PRINCIPLES

The consolidation methods applied by the Group are:

a) Group companies – Full consolidation method

The companies in which the Group directly or indirectly holds more than 50% of the voting rights at the General Shareholders' Meeting and/or has control over financial and operational policy (definition of control used by the Group), were included in the consolidated financial statements by the full consolidation method. The stakes held by third parties in these companies are presented under "minority interests", being included in the Consolidated Financial Position Statement in Shareholders' Equity and in the Consolidated Income Statement in net income of the year.

When losses attributable to minorities are greater than the minority interest in a subsidiary's Shareholders' Equity, the Group absorbs this excess and any additional losses, except when the minorities have an obligation and are able to cover those losses. If the subsidiary subsequently reports profits, the Group takes those profits until the minority share of previous losses absorbed has been recovered.

The assets and liabilities of each company are accounted at their fair value at acquisition. Any excess of acquisition cost over the fair value of the net assets and liabilities acquired is recognised as "goodwill" (Note 2.2.d)). If there is a negative

difference between acquisition cost and the fair value of net assets and liabilities acquired, this is recognised as income for the year.

Minority interests include the proportion of the fair value of assets and liabilities known at the acquisition date which belong to third parties.

The results of subsidiaries acquired or sold during the year are included in the financial statements from the date of acquisition or until the date when they are sold.

Whenever necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by the Group. Transactions, balances and distributed dividends between Group companies are eliminated in the consolidation process. Capital gains resulting from the sale of stakes within Group companies are also eliminated.

The list of the companies consolidated by the full consolidation method is in Note 3.

b) Jointly controlled companies – Proportional consolidation method

Shareholdings in jointly controlled companies were included in the consolidated financial statements by the proportional consolidation method, from the date when control began to be shared. According to this method, assets, liabilities, income and costs from these companies were integrated in the consolidated financial statements, item by item, in proportion to the amount of control attributable to the Group.

If the acquisition cost surpasses the fair value of the assets and liabilities for each jointly controlled company at the acquisition date, that excess is recognised as "goodwill" (Note 2.2.d). If there is a negative difference between acquisition cost and the fair value of net assets and liabilities acquired, this is recognised as income for the year.

Whenever necessary, adjustments are made to the financial statements of jointly controlled entities to bring their accounting policies in line with those used by the Group. Transactions, balances and dividends distributed between Group companies are eliminated in the consolidation, in proportion to the amount of control attributable to the Group. Capital gains resulting from the sale of stakes within Group companies are also eliminated.

The classification of the financial investments in jointly controlled companies is determined based on the Shareholders' agreements that define the joint control, in the effective percentage of shares or voting rights held.

The financial interests held in Complementary Grouping of Companies (ACEs), are generally consolidated in the financial statements by the proportional consolidation method.

The list of companies consolidated by the proportional consolidation method is detailed in Note 4.

c) Associated Companies – Equity Method

Stakes in associated companies, which are companies in which the Group has significant influence but does not have control or joint control on the companies' financial and operational decisions – in general, stakes representing 20% to 50% of share capital – are registered by the equity method.

According to the equity method, shareholdings are registered at their acquisition cost adjusted by the Group's share in Shareholders' Equity variations (including net income) of the associated companies, and also by the gains or losses of the financial year and dividends received.

If the acquisition cost surpasses the fair value of the assets and liabilities of each associated company at the date of the acquisition, that excess is recognised as "goodwill" (Note 2.2.d). If there is a negative difference between acquisition cost and the fair value of net assets and liabilities acquired, this is recognised as income for the year.

Investment in associated companies is evaluated when there are signs that assets' value may be subject to impairment losses. Any impairment losses found are registered as costs in consolidated income statement.

The investment in associated companies is reported as a null value when the Group corresponding percentage of accumulated losses in associated companies' exceeds the investment value.

Financial investments in associated companies are detailed in Note 5.

d) "Goodwill"

The differences between the acquisition cost of investments in Group companies and jointly controlled companies and the net balance between fair value of those companies' assets and liabilities at the acquisition date, were recorded as intangible assets under "Goodwill" item.

The goodwill does not suffer any depreciation, although every year is checked for impairment losses. Any impairment loss is immediately registered in the Consolidated Income Statement for the year, affecting the financial statements, and is not subsequently reverted.

Differences between the acquisition cost of stakes in foreign-based Group companies, jointly controlled companies and associated companies, and the assets and liabilities' fair value at the acquisition date, are accounted in the reporting currency of those companies, and converted to the reporting currency of the Group (Euro) at the exchange rate in force at the time of the Consolidated Financial Position Statement. Exchange differences generated in this conversion are registered in Shareholders' Equity under "Exchange Conversion Reserve".

e) Conversion of foreign entities' financial statements

Companies operating in other countries besides Portugal, enjoying organisational, economic and financial autonomy are considered foreign entities.

The foreign entities' assets and liabilities are converted to Euros using the exchange rates at the date of the Consolidated Financial Position Statement, and costs and income and cash flow are converted to Euros using the average exchange rate for the year. The resulting exchange difference is recorded in Shareholders' Equity under "Exchange Conversion Reserve" item.

The "goodwill" and fair value adjustments resulting from the acquisition of foreign entities are treated as assets and liabilities of that entity and converted to Euros according to the exchange rate at the date of the Consolidated Financial Position Statement.

Whenever a foreign entity is sold, the accumulated exchange difference is recognised in the Consolidated Income Statement as gain or loss resulting from that sale.

The rates used to convert the figures of foreign entities (Group companies, jointly controlled companies or associated companies) to Euros were the following:

		Exchange rate	Average	Exchange rate	Average
		as of	exchange rate	as of	exchange rate
		31/12/2011	2011	31/12/2010	2010
US Dollar	EUR/USD	1.2939	1.4000	1.3362	1.3207
Mozambica n Metica l	EUR/MZN	34.665	40.370	43.305	45.645
S. Tomé & Príncipe Dobra	EUR/STD	24,500	24,500	24,500	24,500
Angola n Kwa nza	EUR/AOA	122.55	131.18	121.60	122.03
Romanian Leu	EUR/ROL	4.3233	4.2399	4.2620	4.2169
Israelia n Shekel	EUR/ILS	4.9453	5.0105	4.7406	4.9270
Brazilian Real	EUR/BRL	2.4159	2.3375	2.2177	2.3234
UAE Dirha ms	EUR/AED	4.7566	5.1460	4.9095	4.8550
British Pound	EUR/GBP	0.8353	0.8713	-	-
Centra l African CFA	EUR/CFA	656.14	656.14	656.14	656.14

2.3. INVESTMENT PROPERTIES

Investment properties include all the land and buildings owned to obtain rents or capital appreciation, or both, that are not for use in the production or supply of goods or services, nor for administrative purposes nor for sale as part of the business daily management.

Investment properties are registered at their acquisition cost. By the time financial statements were transposed to the IAS/IFRS framework (01 January 2004), materially relevant investment properties were adjusted to reflect their fair value at conversion date ("deemed-cost").

Costs incurred related with the use of investment properties, namely, maintenance, repairs, insurance, and property tax (Local Property Tax), are recognised as costs in the Consolidated Income Statement for the respective financial year. Improvements expected to generate future additional economic benefits are capitalized under "Investment properties".

The depreciation method used for investment property is straight-line depreciation method, using a depreciation rate for a useful working life of 100 years.

2.4. FIXED TANGIBLE ASSETS

Tangible fixed assets acquired up to 31 December 2003, the transition date to IAS/IFRS, are registered at "deemed cost", minus depreciations and impairment losses. The "deemed cost" was determined as follows:

Land and buildings Market value as of 31 December 2003 determined by independent assessment J. Curvelo, Lda..
Basic equipment Market value as of 31 December 2003, determined by internal assessment of assets from a user perspective, audited by an external assessment of an independent body – J. Curvelo, Lda..
Others Acquisition cost or acquisition cost revaluated in accordance with the principles generally accepted in Portugal.

Assets acquired after 31 December 2003, are recorded at acquisition cost minus accumulated depreciations and impairment losses.

Depreciations are calculated on a straight line basis once the assets start to be used and are applied systematically throughout the useful life of the assets, which is determined in function of the expected use of the asset by the Group, the asset's wear and tear, the likelihood of technical obsolescence and the residual value attributable. The residual value attributable to the asset is determined on the basis of estimated value recoverable at the end of its useful life. The depreciation rates correspond to the following estimated useful life periods:

	Useful life
Buildings	8 - 100
Ba sic equipment	2 - 20
Other tangible assets	3 - 10

Fixed tangible assets in progress are registered at acquisition or production cost, minus any impairment losses. Gains and losses from the sale or disposal of tangible fixed assets are determined as the difference between the alienation price and the net accounting value at the time of the sale/disposal, and are registered in the Consolidated Income Statement as "other operational gains" or "other operational losses"

2.5. INTANGIBLE ASSETS

Intangible assets, with the exception of "goodwill", are registered at acquisition cost, minus accumulated depreciations and impairment losses. Intangible assets are only recognised if they are likely to produce future economic benefits to the Group, if they are controlled by the Group and if their value can be reasonably measured.

Yearly depreciations for intangible assets are registered in the Consolidated Income Statement under "Depreciations and amortisation costs and impairment losses". The depreciation method used for intangible assets with a finite useful life is the straight-line depreciation method. A useful life of between 3 and 5 years is used for these assets, except for the charges related with concession agreements which are amortized according to the straight line basis over 12-month periods during the concession period.

2.6. FINANCIAL ASSETS AND LIABILITIES

a) Financial investments

a) Financial Investments

Financial investments are recognized at the date the risks and rewards inherent to them are transferred. They are initially registered at acquisition price, i.e. the fair value of the price paid including transaction expenses.

Financial investments are classified into investments held until maturity and investments evaluated at fair value through results.

Following the initial recognition, investments stated at fair value through results are revaluated at their fair value, without deducting any transaction costs that may have been incurred on the sale. Investments in Equity instruments not listed in regulated financial markets, and for which fair value cannot be reliably estimated, are accounted at acquisition cost deducted from eventual impairment losses.

Gains or losses arising from a change of the fair value of investments evaluated at fair value through results are registered in the Consolidated Income Statement for the year.

b) Accounts receivable

Accounts receivable are registered at their nominal value minus any impairment losses, recognised under "Impairment losses" in accounts receivable, so that they reflect the realisable net value.

c) Loans

Loans are registered as liabilities at their nominal value.

Any inherent costs that are paid in advance, are recognised linearly in the Consolidated Income Statement for the year up to the loan maturity, classified under "Other current assets".

Financial costs associated with interests and similar costs (namely stamp duty), are registered in the Consolidated Income Statement according to the Matching Principle, with any amounts due and not paid at the date of the Consolidated Financial Position Statement being classified under "Other current liabilities".

d) Accounts payable

Accounts payable are registered at nominal value. Usually these debts do not pay interest.

e) Discounted bills of exchange and accounts receivable in "factoring"

Discounted bills of exchange and accounts receivable sold to factoring companies (with recourse) are registered in assets at their nominal value, being the advance already registered as a liability.

Interest charges are recognised in accordance with the Matching Accounting Principle.

f) Cash and equivalents

The amounts included under "Cash and equivalents" correspond to cash, bank deposits and term deposits and other short term cash applications.

2.7. LEASES

Lease contracts are classified as:

Financial leases if all risks and advantages inherent to ownership are substantially transferred;
Operational leases if all risks and advantages inherent to ownership are not substantially transferred.

Classification of leases as financial or operational is decided in accordance with the substance and not the form of the contract.

The values of fixed assets acquired through financial lease contracts are registered as assets and their respective cost is registered as a liability. The depreciation of these assets, calculated as per 2.4 supra, are registered as depreciations for the year.

The capital repayment included in rents paid is registered as reductions to those responsibilities while interests included are registered as financial expenses for the respective year.

In the case of operational leases, rents due are recognised as a cost in the Consolidated Income Statement throughout the period of the leasing contract under "External supplies and services".

2.8. INVENTORIES

Inventories, raw materials and consumables are valued at either acquisition cost or net realizable value, whichever is lower. In the movement of raw materials and consumables, these are valued at average weighted cost.

Finished and semi-finished products, sub-products and products and work in progress are valued at either production cost or net realizable value, whichever is the lower. Production costs include the cost of raw material, direct labour costs and general manufacturing costs. The cost method considered is the average cost.

The net realizable value is the regular sale price minus finishing and marketing expenses.

2.9. FINANCIAL COSTS IN LOANS OBTAINED

Financial costs related to loans obtained are generally recognised as a cost according to the Matching Accounting Principle. Pursuant to the terms of IAS 23, financial costs from loans associated with the acquisition, construction or production of fixed assets, or associated with motorway concessions or real estate projects classified under inventories are capitalised and comprised in asset's cost. Capitalisation of these charges begins once preparation for the construction activity or development of the asset has begun, and is interrupted once the asset production ends, or when the project in question is suspended.

In 2011, 3,407,383 euros of financial charges were capitalised as part of the cost of tangible fixed assets.

As of December 31, 2011, 11,439,704 Euros were capitalised as part of the net cost of tangible fixed assets in the consolidated financial statements of the Group.

2.10. PROVISIONS

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, which may result in a cash outflow for which a reliable estimate can be done. Provisions are revaluated at each Consolidated Financial Position Statement closing date and are adjusted to reflect the best estimate at that date.

2.11. INCOME TAX

Income tax is calculated on the basis of the taxable income (which differ from accounting net income) of the companies included in consolidation, in accordance with the tax rules in force in each company head office location country. Deferred taxes refer to the temporary differences between the accounting and figures for tax purposes in terms of assets and liabilities.

Deferred taxes assets and liabilities, are calculated and annually assessed using the tax rates expected to be in force at the reversion date of temporary differences.

Deferred taxes assets are registered when there are reasonable prospects of sufficient taxable income for them to be used. At the closing date of the Consolidated Financial Position Statement, the temporary differences underlying assets for deferred taxes are re-assessed in order to recognise assets for deferred taxes not previously registered as those failed to meet the conditions for registration, and/or to reduce their amount according to the current expectations of future recovery. Deferred taxes are registered as loss or income in each year, except if they arise from transactions or events registered in equity, in which case deferred tax is also registered under those same items.

2.12. CONSOLIDATED FINANCIAL POSITION STATEMENT

Realisable assets and demandable liabilities, to be due past the closing date of Consolidated Financial Position Statement, are accounted as non-current assets and liabilities, respectively.

2.13. RECOGNITION OF COSTS AND INCOME

a) Construction contracts

For the recognition of income and expenses of construction contracts, it has been adopted the percentage of completion method. According to this method, income directly related to work in progress is recognised in the Consolidated Income Statement in accordance with the percentage of completion of the work, which is determined by the ratio between expenses incurred at the time of the financial statements and total estimated expenses for the work. The differences between income accounted through the application of this method and the invoices issued are recorded under "Other current assets" or "Other current liabilities", according to the nature of the difference. Income and expenses related with the promotion of real-estate are deferred in the balance until the respective execution has been fully or substantially terminated.

Variations in the value of works compared with the contracted price are recognised in each year's Consolidated Income Statement when it is highly possible that the client will approve the amount arising from that variation, and that this can be reliably measured.

Claims for reimbursement of expenses not included in the contract price are included as revenues when negotiations are at an advanced stage and it is probable that the client will accept the claim, and that it is reliably measurable.

b) Real estate projects

Recognition of sales in real estate projects is done when the legal transfer of the property occurs, or, exceptionally, when possession or inherent risks of the property are transferred to the promissory buyer and the sale is considered to be irreversible.

c) Other activities

Sales and services revenues, are generally accounted when they occur. Financial income from delayed payment by clients is accounted when there is significant evidence that they are recoverable.

d) Costs related with bids preparation

Expenses incurred with the preparation of bids are recognised in the Consolidated Income Statement of the financial year they occurred, since the outcome of the bid is still unknown.

e) Matching Principle

The Group companies record their income and expenses on an accrual basis, whereby income and expenses are recognised when they are generated independently of when they are received or paid. The differences between the amounts received and paid and the corresponding income and expenses generated are registered under "Other current assets" or "Other current liabilities", depending on the nature of the difference.

2.14. BALANCES AND TRANSACTIONS IN FOREIGN CURRENCY

Foreign currency transactions (non-Euro) are registered at the exchange rates in force at the time of each transaction.

On each balance date, monetary assets and liabilities expressed in foreign currency are converted to Euros using the rates in force at that time.

Exchange differences, both favourable and unfavourable, due to discrepancies between the exchange rates in force at the time of the transaction and those in force when payments were made or received, or as at the date of the balance, are registered as "Other financial gains and losses" in the Consolidated Income Statement for the year.

2.15. IMPAIRMENT OF NON-CURRENT ASSETS, EXCEPT GOODWILL

An assessment of impairment is made at the time of each balance, and whenever an event or change in circumstances signals that the figure registered for the asset may not be recovered.

Whenever the asset amount is higher than its recoverable value, it is recognised an impairment loss, which is registered in the Consolidated Income Statement.

The recoverable amount is the highest figure between the net sale price and the use value. The net sale price is the amount obtained from alienating the asset in a transaction accessible to the parties involved minus the expenses directly attributable to the alienation. The value-in-use is the current value of estimated future cash flows that are expected from the constant use of the asset and its alienation at the end of its useful life. The recoverable amount is estimated for each asset individually, or, if this is not possible, for the operational unit to which the asset belongs.

A reversion of impairment losses recognised in previous years is registered when there are signs that the recognised impairment losses no longer exist or have diminished. The reversion of impairment losses is recognised in the Consolidated Income Statement as an operational income.

However, if the impairment loss was not registered in previous years, the reversion of impairment loss is carried out up to the limit of the amount recognised (net of amortization or depreciation).

2.16. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities are not recognised in the Consolidated Financial Statements, but are disclosed in the Notes to the accounts, unless the possibility of outflow is remote.

Contingent assets are not recognised in the Consolidated Financial Statements, but are disclosed in the Notes to the accounts, when it is likely to occur a future economic inflow.

2.17. SUBSEQUENT EVENTS

Events occurring after the reporting date, which provide additional information on the conditions existing at that date, are reflected in the Consolidated Financial Statements. Events subsequent to the reporting date which provide information on conditions occurring after that date, if material, are disclosed in the Consolidated Financial Statements.

2.18. INFORMATION BY SEGMENTS

The business and geographical sectors applicable to the Group's activity are determined each year. Detailed information on this subject is included in Note 7.

2.19. SUBSIDIES

Government subsidies are recognized at fair value provided that there is a reasonable assurance that they will be paid and that the Group will meet the conditions to the granting of that subsidy.

Operating subsidies, especially those for staff training, are registered in the Consolidated Income Statement according to the expenses incurred.

2.20. DERIVATIVES

The Group uses derivatives to cover financial risks to which is exposed, namely interest rate risk. The Group does not use such instruments for speculative purposes.

Derivatives are registered at fair value. The recognition method is determined by their nature and goals.

Hedge accounting

The possibility of designating a derivative as a hedge instrument is regulated by IAS 39, namely regarding documentation and effectiveness.

The Group uses the following criteria to classify its derivatives as cash flow hedging instruments:

The hedge is expected to efficiently offset changes in cash flow attributable to the covered risk;
The efficiency of the coverage can be reliably measured;
There is adequate documentation about the transaction to be covered at the beginning of the coverage;
The transaction subject to the coverage is highly probable.

Changes in the fair value of financial instruments classified as "fair value coverage" are recognized as a financial result in the period, as well as the changes in the fair value of the assets or liabilities subject to that risk.

Changes in the fair value of derivatives classified as "cash flow coverage" are recognized in "Reserves from Hedging Operations" in their effective component, and as a financial result in their non-effective component. Amounts recorded under "Reserves from Hedging Operations" are transferred to financial results in the period in which the covered item impacts results.

Hedge accounting is discontinued when derivatives reach maturity, or when the instruments are sold, the option is exercised or when the coverage ratio no longer meets the requirements of IAS 39. In situations where the derived instrument is declassified as a hedge instrument, the fair value differences accumulated and deferred in Shareholders' Equity in the item "Reserves from Hedging Operations" are transferred to the Income Statement of that year.

Changes in fair value of derivatives aiming at providing financial coverage, but that do not meet all the requirements of IAS 39 (Financial Instruments: Recognition and Measurement), and regarding the possibility of a hedge accounting, are registered in the Consolidated Income Statement in the period which they occur.

Negotiating derivatives

Changes in fair value of derivatives aiming at providing financial coverage, in accordance with the company's risk management policies, but which do not comply with all the provisions of IAS 39 regarding the possibility of classification as hedge accounting, are registered in the Consolidated Income Statement in the period in which they occur. During the financial year, no financial instruments were reclassified.

2.21. AGREEMENTS FOR PROVISION OF SERVICES

For service concession arrangements, IFRIC 12 determines how the service concession operators should apply the rules on recognition and measurement by the private operator in the provision of infrastructure construction and operation under the signature of contracts concession. This interpretation was issued by the IASB in November 2008 and adopted by the European Union in March 2009, with mandatory for financial years beginning on / or after January 1, 2010.

This interpretation applies to activities carried out by associates of the Soares da Costa Group.

Thus, the concessions operated by the associated companies Auto-Estradas XXI and Estradas do Zambeze are framed on the model of financial asset. The revenue and costs related to building service are treated according to IAS 11 - Construction contracts. The revenue and costs relating to operation and maintenance service are treated according to IAS 18, revenue and contractual obligations to maintain or restore the infrastructure at certain levels of capacity for the provision of public service are recorded in accordance with IAS 37-provisions, contingent liabilities and contingent assets.

On the other hand, the associated Scutvias, CPE and Costaparques have a record of intangible assets associated with the right to operate infrastructure in return for payments and other healthcare plan made thereunder. The intangible asset is reduced through amortization over the concession period.

2.22. OWN SHARES

Own shares are recorded at acquisition value as a deduction to equity. Gains or losses incurred on the sale of own shares are registered in the "Reserves and retained profits" account.

2.23. OWN WORK CAPITALISED

Own work capitalised essentially refers to construction and processing work carried out for own purposes.

Capitalisation of these expenses depends on the following requisites:

The work carried out is identifiable;
The work will most probably generate future economic rewards and;
The development costs can be reliably measured.

2.24. MANAGEMENT OF INVESTED CAPITAL

The Group manages its capital so as to assure the continuity of the Group, seeking to maximise value creation for its shareholders. The Group's capital therefore consists of equity from shareholders (consisting of share capital that has been fully subscribed and realised, accrued capital reserves, asset revaluation reserves, foreign exchange reserves, consolidation differences and earnings from previous years not distributed to the shareholders), debt (recourse debt and non-recourse debt) and the funds held as cash and cash equivalents.

The Group has two kinds of debt: recourse debt and non-recourse debt. The difference between these two types of debt lies in the type of liability undertaken. Recourse debts undertaken by any Group company can be enforced against the Group's shareholders whereas non-recourse debt, undertaken exclusively in concession business awarded in a project finance context, can only be enforced against the concessionaire, meaning only the latter's assets can be foreclosed in payment.

2.25. FINANCIAL RISK MANAGEMENT

Information is supplied on the Group's financial risks management is given on chapter 9 of the 2011 Management Report as well as in Note 30 of the Explanatory Notes.

3. GROUP COMPANIES FULLY CONSOLIDATED

Group companies included in consolidation by the full integration method, their head offices and proportion of share capital held as of December, 31 2011:

		Capital Held
Company	Headoffices	Directly	Indirectly	Total
Grupo Soares da Costa SGPS, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	Empresa Mãe	-	-
Soares da Costa Serviços Partilhados, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	100.00%	-	100.00%
Energia Própria
Energia Própria, S.A.	Estrada de Talaíde, lote 27, Talaíde 2785-734 S. Domingos de Rana	57.26%	-	57.26%
Self Energy Uk	Southbank Technopark, 90 London Road, London, SE1 6LN	-	78.10%	78.10%
Ventos do Horizonte, S.A.	Edifício Ninho de Empresas, Edifício Ninho de Empresas, Avenida do Mercado Abastecedor, nº 4, 5400-673 Outeiro Seco – Chaves	-	60.00%	60.00%
Self Energy Engineering & Innovation, S.A.	Rua de Fundões 151 Centro Empresarial e Tecnológico 3700-121 São João da Madeira	-	100.00%	100.00%
Construction
SDC Construção SGPS, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	100.00%	-	100.00%
Soares da Costa América, Inc.	7270 N.W. 12 TH Street, Suite PH3 - Miami - Florida - 33126 U.S.A.	-	100.00%	100.00%
Porto Construction Group, LLC	7270 N.W. 12 TH Street, Suite #207 - Miami - Florida - 33126 U.S.A.	-	60.00%	60.00%
Soares da Costa Construction Services, LLC	751 Park of Comm. Drive, Suite #108 - Boca Raton - Florida - 33487 U.S.A.	-	80.00%	80.00%
Soares da Costa Contractor, LLC	7270 N.W. 12 TH Street, Suite PH3 - Miami - Florida - 33126 U.S.A.	-	100.00%	100.00%
Soares da Costa Moçambique, SARL	Av. Ho Chi Min nº 1178, Maputo Moçambique	-	80.00%	80.00%
Soares da Costa S. Tomé e Principe - Construções, Lda	S. Tomé e Príncipe	-	100.00%	100.00%
Soares da Costa Construcciones Centro Americanas, S.A.	Cantón Cero Uno - S. José Costa Rica	-	100.00%	100.00%
Carta - Cantinas e Restauração, Lda	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Carta - Restauração e Serviços, Lda	Rua Cónego Manuel das Neves, 19 Luanda - Angola	-	100.00%	100.00%
Soc. Construções Soares da Costa, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
CONTACTO - Soc. Construções, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Soares da Costa Brasil - Construções, Lda.	Rua Bandeira Paulista, nº 600, 1º Andar, Conjunto 13, CEP 04532-001, São Paulo, Brasil	-	100.00%	100.00%
Santolina Holding B.V.	De Lairessestraat 154, 1075HL Amsterdam	-	100.00%	1 00.00%
CERENNA - Cerâmica Nacional de Angola, S.A.	Município da Ingombota, Bairro Ingombota, Rua Cónego Manuel Alves das Neves, Nº 19 - Luanda	-	51.00%	51.00%

Soares da Costa/Contacto - Modernização de Escolas, ACE	Rua Santos Pousada, nº 220 4000-478 Porto	-		100.00%
GEC - Guinea Ecuatorial Construcciones, S.A.	Urbanización Villa Orquídea, vivenda nº 4, Carretera del Aeropuerto, Malabo, Républica de Guinea Ecuatorial	-	51.00%	51.00%
CLEAR - Instalações Electromecânicas, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
CLEAR Angola, S.A.	Rua Cónego Manuel das Neves, 874 Luanda - Angola	-	95.00%	95.00%
Coordenação & Soares da Costa, SGPS, Lda.	Rua Julieta Ferrão, nº 12, 13º Andar, N. Senhora de Fátima - 1000 Lisboa	-	100.00%	100.00%
Prince Contracting, LLC	5411 Willis Road Palmetto, Florida 34221 - USA	-	100.00%	100.00%
Construções Metálicas SOCOMETAL, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Real Estate
Soares da Costa Imobiliária, SGPS, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	100.00%	-	100.00%
CIAGEST - Imobiliária e Gestão, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Mercados Novos - Imóveis Comerciais, Lda.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
SOARTA - Soc Imob. Soares da Costa, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
HABITOP - Sociedade Imobiliária, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Soares da costa Imobiliária, Lda	Estrada Farol das Lagostas Município da Sambízanga, C. do N'Golakiluange - Luanda	-	100.00%	100.00%
Cais da Fontinha - Investimentos Imobiliários, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
IMOKANDANDU - Promoção Imobiliária, Lda.	Estrada Farol das Lagostas, Município do Sambízanga, Comuna do N'Gola Kiluange - Angola	-	51.00%	51.00%
NAVEGAIA - Instalações Industriais S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
IMOSEDE, Lda	Rua Conego Manuel das Neves Casa nº 19 - Luanda	-	100.00%	100.00%
Costa Sul Sociedade de Promoção Imobiliária, Lda	Rua Conego Manuel das Neves Casa nº 19 - Luanda	-	100.00%	100.00%
Hotti - Angola Hoteis, S.A.	Município da Ingombota, Bairro Patrice Lumumba, Rua Cônego M. das Neves, nº 190 - Luanda	-	50.60%	50.60%
IMOSDC - Investimentos, Lda	Rua Cónego Manuel das Neves, 19 Luanda	-	100.00%	100.00%
Concessões
Soares da Costa Concessões, SGPS, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	100.00%	-	100.00%
Soares da Costa Concesiones - Costa Rica, S.A.	100 Est,200 Sul, 50 Oest - H. de La Mujer - San José - Costa Rica	-	100.00%	100.00%
COSTAPARQUES - Estacionamentos, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Soares da Costa Serviços Técnicos e de Gestão, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Infraestructuras Soares da Costa Costa Rica, S.A.	100 Est,200 Sul, 50 Oest - H. de La Mujer - San José - Costa Rica	-	100.00%	100.00%
C.P.E. - Companhia de Parque de estacionamento, S.A.	Rua Julieta Ferrão, nº 12, 14º 1649 Lisboa	-	100.00%	100.00%
Intevias - Serviços e Gestão, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	100.00%	100.00%
Hidroequador Santomense - Exploração de Centrais Hidroeléctricas, Lda.	Av. Repatriamento dos Poveiros, nº 67, Edifício Cecominsa, Póvoa de Varzim	-	75.00%	75.00%

Hidroeléctrica STP, Limitada	Avenida Água Grande, São Tomé - S. Tomé e Príncipe	-	45.00%	45.00%
INR - Investimentos Nacionais Rodoviários, SGPS, S.A.	Rua Julieta Ferrão, nº 12, 14º 1649-039 Lisboa	-	100.00%	100.00%
Soares da Costa Hidroenergia, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	75.00%	75.00%
Soares da Costa Hidroenergia 1T, Lda.	Rua Santos Pousada, nº 220 4000-478 Porto	-	75.05%	75.05%
Soares da Costa Hidroenergia 4T, Lda.	Rua Santos Pousada, nº 220 4000-478 Porto	-	75.05%	75.05%
Soares da Costa Hidroenergia 8C, Lda.	Rua Santos Pousada, nº 220 4000-478 Porto	-	75.05%	75.05%
Soares da Costa Hidroenergia 8T, Lda.	Rua Santos Pousada, nº 220 4000-478 Porto	-	75.05%	75.05%
Soares da Costa Concessions USA, Inc.	7270 NW 12 Street, Suite 860, Miami, Florida 33126 EUA	-	100.00%	100.00%

The list of the companies fully consolidated suffered the following changes during the financial year ending on 31 December 2011:

Inclusion in the consolidation of the company "Soares da Costa Brazil Construction Ltd." 100% held by the Group;
Inclusion in the consolidation of the company "Cerenna Cerâmica de Angola, SA", a company under Angolan law held by the Group at 51%;
Inclusion in the consolidation of the company "Santolina Holding BV", a company under the Dutch law held by the Group at 100%;
Increase in the participation held in the company "Coordenação & Soares da Costa SGPS, Lda", a company which became wholly owned by the Group. As a result of increase in the participation the company ceased to be integrated by the proportional method and was included in the consolidation perimeter using the full consolidation method;
Merger by incorporation of the company "Soares da Costa Indústria SGPS SA" in the company "Soares da Costa Construção SGPS SA.". Because of this merger the financial participations held by "Soares da Costa Indústria SGPS SA" have become an integral part of the segment reporting of Construction and Public Works.
Merger by incorporation of companies " Self Energy Serviços de Energia, S.A." and " Self Energy Solutions, S.A." in the company "Energy Self, SGPS, SA.". Following this merger the company changed its name to "Energia Própria, S.A";
Assignment of 66% shares in the MTA Máquinas e Tractores de Angola, Limitada. This company was consolidated by the equity method.
Extinction of " Soares da Costa Ambiente e Energia, S.A.", the " Soares da Costa Desenvolvimento, S.A." and "MZI Lda." closed companies in the fourth quarter of 2011.

4. JOINTLY CONTROLLED COMPANIES – PROPORTION CONSOLIDATION METHOD

Jointly controlled companies included in the consolidation by the proportional method, their registered offices and the proportion of capital held as of 31 December 2011:

Company	Headoffices	Capital Held
		Directly	Indirectly	Total

Construction

TRANSMETRO - Construção do Metropolitano do Porto, ACE	Rua Santos Pousada, nº 220 4000-478 Porto	-	50.00%	50.00%
Normetro - Agrupamento do Metropolitano do Porto, ACE	Rua Santos Pousada, 300 - 7º Bonfim Porto	-	17.90%	17.90%
ASSOC - Soares da Costa - Construção do Estádio de Braga, ACE	Av. Imaculada Conceição, 756 - Dume - 4700- 034 Braga	-	40.00%	40.00%
Estádio de Coimbra, SC/Abrantina, ACE	Rua Santos Pousada, nº 220 4000-478 Porto	-	60.00%	60.00%
Casais, Eusébios, FDO, J. Gomes, Rodrigues e Névoa - Soares da Costa, Construção do Estádio de Braga - Acab.e Instalações/Infraest.Interiores, ACE	Av. Imaculada Conceição, 756 - Dume - 4700- 034 Braga	-	40.00%	40.00%
Três ponto dois - T.G. Const. Civil - Via e Cat Mod. Linha do Norte, ACE	Avª das Forças Armadas, 125 - 2ºC - Lisboa	-	50.00%	50.00%
Somague, Soares da Costa - Agrupamento Construtor do Metro de Superfície, ACE	Rua Engº Ferreira Dias, 164 4100-247 Porto	-	50.00%	50.00%
Remodelação Teatro Circo - S.C., A.B.B., D.S.T., ACE	Rua Santos Pousada, nº 220 4000-478 Porto	-	50.00%	50.00%
GCF - Grupo Construtor da Feira, ACE	Rua do Rego Lameiro, nº 38, Campanhã, 4300- 454 Porto	-	28.57%	28.57%
GCVC, ACE	Rua do Rego Lameiro, nº 38, Campanhã, 4300- 454 Porto	-	28.57%	28.57%
Mota-Engil, Soares da Costa, MonteAdriano - Matosinhos, ACE	Via Adelino Amaro da Costa nº 315, Lugar da Guarda 4470-557 Moreira da Maia	-	28.57%	28.57%
HidroAlqueva, ACE	Av. Frei Miguel Contreiras, nº 54 7º Andar, Lisboa	-	50.00%	50.00%
Nova Estação, ACE	Av. Frei Miguel Contreiras, nº 54 - 7º Andar, 1749-083 Lisboa	-	25.00%	25.00%
Soares da Costa e Lena, ACE	Rua Julieta Ferrão, 12º e 13º Andar, Nossa Senhora de Fátima, 1649-039 Lisboa	-	50.00%	50.00%
Terceira Onda Planejamento e Desenvolvimento, Ltda.	Av. Ibirapuera, 2.332, Bloco I, 9º andar, sala 01, Ed. Torre Ibirapuera I; Moema, S. Paulo - Brasil	-	50.00%	50.00%
GACE - Gondomar, ACE	Rua Eng. Ferreira Dias, nº 161 - Porto	-	24.00%	24.00%
LGC - Linha de Gondomar, Construtores, ACE	Rua Eng. Ferreira Dias, nº 161 Freguesia de Ramalde - Porto	-	30.00%	30.00%
CAET XXI - Construções, ACE	Rua de Santos Pousada, 220 Bonfim, Porto	-	50.00%	50.00%
Israel Metro Builders - a Registered Partnership	132 Derekh Menakhem begin, Tel-Aviv, Israel	-	30.00%	30.00%
LGV, Engenharia e Construção de Linhas de Alta Velocidade, ACE	Rua Abranches Ferrão, nº 10, 9ºF, 1600-001 Lisboa	-	17.25%	17.25%
SOMAFEL - Engenharia e Obras Ferroviárias, S.A.	Avª da República, 42 - 3º 1069-207 Lisboa	-	40.00%	40.00%
OFM - Obras Públicas, Ferroviárias e Marítimas, S.A.	Avª Columbano Bordalo Pinheiro, 93-7º - 1000 Lisboa	-	40.00%	40.00%
Somafel e Ferrovias, ACE	Avª Columbano Bordalo Pinheiro, 93-7º - 1000 Lisboa	-	24.00%	24.00%
Somafel - Obras Ferroviárias e Marítimas Ltda.	Rua Major Lopes, nº 800, sala 306, Bairro S.Pedro, Belo Horizonte-Minas Gerais	-	40.00%	40.00%
Real Estate
Talatona Imobiliária, Lda	Rua Cónego Manuel das Neves, 19 Luanda - República de Angola	-	49.00%	49.00%
Concessions

SCUTVIAS - Autoestradas da Beira Interior, S.A.	Praça de Alvalade nº 6 7º Andar Lisboa	-	33.33%	33.33%
OPERESTRADAS XXI, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	50.00%	50.00%
Exproestradas XXI - AE Transmontana, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	50.00%	50.00%
Auto-Estradas XXI - Subconcessionária, S.A.	Rua Santos Pousada, nº 220 4000-478 Porto	-	50.00%	50.00%
Estradas do Zambeze, S.A.	Distrito Urbano 1, Bairro Central, Av. Ho Chi Min nº 1178, 2º andar, Maputo - Moçambique	-	40.00%	40.00%
Operadora das Estradas do Zambeze, S.A.	Distrito Urbano 1, Bairro Central, Av. Ho Chi Min nº 1178, 2º andar, Maputo - Moçambique	-	40.00%	40.00%
MRN - Manutenção de Rodovias Nacionais, S.A.	Av. 12 de Novembro, nº 42, 1º Direito 6005-001 Alcains - Castelo Branco	-	33.33%	33.33%
Portvias - Portagem de Vias, S.A.	Avenida 12 de Novembro, 42, 1º Dto, 6005 001 Alcains - Castelo Branco	-	33.33%	33.33%

The list of the companies proportionally consolidated suffered the following changes during the financial year ending on 31 December 2011:

Inclusion in the consolidation perimeter of the company "Soares da Costa e Lena, ACE" in which the Group has a 50% participation;
Increase in the participation held in the company "Coordenação & Soares da Costa, SGPS, Lda.", a company which became wholly owned by the Group. As a result of increase in the participation the company ceased to be integrated by the proportional method and was included in the consolidation perimeter using the full consolidation method;
Extintion of the company "Acestrada Construção de Estradas, ACE", a company closed during the second quarter of 2011;
Inclusion in the consolidation perimeter of the company "Terceira Onda Planejamento e Desenvolvimento LTDA", in which the Group has a 50% participation.

As of 31 December 2011 the amounts, weighted for the percentage of joint control, of the current assets, non current assets, current liabilities, non current liabilities, income and expenses related with the jointly controlled companies were as follows:

Company	Assets	Liabilities	Costs	Net income

ASSOC - Soares da Costa - Construção do Estádio de Braga, ACE	73,571	73,571	124	-
Auto-estradas XXI - Subconcessionária, S.A.	215,341,433	224,549,051	133,210,524	463,997
CAET XXI - Construções, ACE	44,762,995	36,261,021	119,969,155	6,071,353
Casais, Eusébios, FDO, J. Gomes, Rodrigues e Névoa - Soares da Costa, ACE	23,178	-	61	76
Estádio de Coimbra, SC/Abrantina, ACE	297,712	297,712	4,561	-
Estradas do Zambeze, S.A.	19,491,717	18,680,462	11,525,097	204,160
Exproestradas XXI - AE Transmontana, S.A.	6,015,775	6,008,122	4,002,141	(22,650)
GACE - Gondomar, ACE	2,638,708	2,638,708	2,174,910	-
GCF - Grupo Construtor da Feira, ACE	367,733	367,733	-	-
GCVC, ACE	953,323	953,323	4,100,414	-
HidroAlqueva, ACE	4,210,480	4,222,344	21,145,854	(7,215)

Israel Metro Builders - a Registered Partnership	4,282,553	4,282,553	-	-
LGC - Linha de Gondomar, Construtores, ACE LGV, Engenharia e Construção de Linhas de Alta Velocidade,	4,418,296	2,823,187	1,153,625	4,359
ACE	9,988,950	9,788,482	1,440,338	133,310
Mota-Engil, Soares da Costa, MonteAdriano - Matosinhos, ACE	1,299,041	1,299,041	6,444,847	-
MRN - Manutenção de Rodovias Nacionais, S.A.	8,505,878	4,098,030	9,581,032	4,404,434
Normetro - Agrupamento do Metropolitano do Porto, ACE	3,490,375	3,473,944	258,135	16,431
Nova Estação, ACE	2,355,934	2,357,101	5,442,990	(681)
OFM - Obras Públicas, Ferroviárias e Marítimas, S.A.	6,504,163	4,764,223	6,060,298	(546,660)
Operadora das Estradas do Zambeze	927,598	800,722	512,105	14,891
Operestradas XXI, S.A.	4,111,633	1,991,468	2,338,565	2,071,651
Portvias - Portagem de Vias, S.A.	8,377,772	8,252,287	542,879	108,820
Remodelação Teatro Circo - S.C., A.B.B., D.S.T., ACE	1,726,606	1,726,606	2,700	-
SCUTVIAS - Autoestradas da Beira Interior, S.A.	239,598,155	215,673,873	35,668,100	4,203,939
Soares da Costa e Lena, ACE	177,955	177,955	337,307	-
SOMAFEL - Engenharia e Obras Ferroviárias, S.A.	19,568,319	7,504,529	9,829,155	(1,266,934)
Somafel - Obras Ferroviárias e Marítimas Ltda.	212,086	412,690	213,200	(212,752)
Terceira Onda Planejamento e Desenvolvimento, Ltda.	2,750,385	2,438,283	3,583,496	322,356
Somague, Soares da Costa - Agrupamento Construtor do Metro de Superfície, ACE	311,171	311,171	8,975	-
Talatona Imobiliária, Lda	28,501,004	30,243,114	4,737,646	(310,088)
TRANSMETRO - Construção do Metropolitano do Porto, ACE Três ponto dois - T.G. Const. Civil - Via e Cat Mod. Linha do	6,502,583	5,750,430	690,289	22,282
Norte, ACE	488,569	339,309	78,499	149,260

At the reporting date there are no contingent commitments or capital commitments related with the jointly controlled companies.

5. COMPANIES INCLUDED IN CONSOLIDATION BY THE EQUITY METHOD

Companies included in consolidation by the equity method, their registered offices and the proportion of capital held as of December 31, 2011:

Company	Headoffices		Capital Held
		Directly	Indirectly	Total
Energia Própria
Self Energy Moçambique, S.A.	Avenida Kenneth Kaunda, nº 403 Maputo – Moçambique	-	45.00%	45.00%
Larvick Reliable, S.L.	Av. Finestrat, S/N, Edificio La Cala, Local 10, 03509 Finestrat	-	49.50%	49.50%
UTE Efacec – Self Energy, Ley 18/1982	Avenida de la Industria 4, Edf. 1, 2-2C 28108 Alcobendas - Madrid	-	50.00%	50.00%
My Watt, Lda	Rua Julieta Ferrão, nº 12, Lisboa	-	50.00%	50.00%
Reflexos Púrpura, Lda	Rua Julieta Ferrão, nº 12, Lisboa	-	50.00%	50.00%
Construção

Grupul Portughez de Constructii S.R.L. 10873 Bucharest - Roménia - 50.00% 50.00% CFE Indústria de Condutas, S.A. Rua Particular Joaquim Silva, 480 Sobrado - Valongo - 33.33% 33.33% Constructora San José - Caldera, S.A. Costa Rica - 17.00% 17.00% SDC Emirates Construction, L.L.C. Abu Dhabi - Emirados Árabes Unidos - 49.00% 49.00% MTA - Máquinas e Tractores de Angola, Lda Rua Cônego Manuel das Neves, casa 19, Bairro Patrice Lumumba - Angola - 34.00% 34.00% Alsoma, AEIE 3 Av André Malrau 92300 Levallois Perret - 18.00% 18.00% Traversofer Industrie & Services Ferroviaires, SARL 27 Chemin du Reservoir - Hydra - Alger - 20.00% 20.00% Concessões Metropolitan Transportation Solutions, Ltd. 14 Hamelecha Street, Park Afek, Rosh Haya'in Israel - 20.00% 20.00% GAYAEXPLOR - Construção e Exploração de Parques de Estacionamento, Lda. Rua Santos Pousada, nº 220 4000-478 Porto - 25.00% 25.00%

INDÁQUA - Indústria e Gestão de Águas, S.A. Rua Antero de Quental, 221-3º Sala 303 - 4455-

INDÁQUA MATOSINHOS - Gestão de Águas de Matosinhos, S.A. Rua 1º de Maio, nº 273 4451-956 Matosinhos - 28.14% 28.14% Indáqua Vila do Conde - Gestão de Águas de Vila do Conde, S.A. Indáqua Feira - Indústria de Àguas de Santa Maria da Feira, S.A.

In the companies Constructora San José - Caldera, SA and Alsoma EEIG, the Group considers to have significant influence on these shares since they have the power to participate in making financial and operating policies of these companies.

Praça Luís de Camões, 9, 3º 1480-719 Vila do

Rua Dr. Elísio de Castro, nº 37 - Santa Maria da

586 Perafita - 28.57% 28.57%

Conde - 28.00% 28.00%

Feira - 27.07% 27.07%

During the year ended December 31, 2011 the following changes in the companies included in the consolidation by the equity method:

Alienation of the 34% participation held in the company "Mini-Price Hotels (Porto), S.A.";
The company "MTA Máquinas e Tractores de Angola, Ltda" is now consolidated by equity method, after the sale of a 66% share;
Inclusion in the consolidation perimeter of the company "MY WATT, LDA", a company held by Energia Própria, S.A. at 50%;
Inclusion in the consolidation perimeter of the company "REFLEXOS PÚRPURA, LDA", a company held by Energia Própria, S.A. at 50%.

As of December 31, 2011 the total amount of assets, liabilities, revenue and profits of companies included in consolidation by the equity method were as follows:

Company	Assets	Liabilities	Shareholders equity	Income	Net income
INDÁQUA - Indústria e Gestão de Águas, S.A.	64,955,551	48,807,586	16,147,964	8,223,845	707,483
Traversofer Industrie & Services Ferroviaires	25,051	25,075	(24)	64,252	(11,975)
GAYAEXPLOR - Construção e Exploração de Parques Estacionamento, Lda	265,326	243,002	22,324	-	(1,936)
Alsoma, AEIE (a)	1,841,905	488,842	1,353,063	768,301	252,214
Grupul Portuguhez de Constructii S.R.L.	3,395,325	3,952,517	(557,192)	24,024	(14,667)
MTA - Máquinas e Tractores de Angola, Lda	1,096,520	818,071	278,449	536,293	(451,830)

Indáqua Matosinhos, S.A.	57,793,201	58,117,659	(324,458)	31,390,637	(52,263)
Indáqua Vila do Conde, S.A.	43,918,460	41,893,813	2,024,647	19,214,936	(15,591)
Indáqua Feira, S.A.	103,080,232	91,835,334	11,244,898	23,743,335	(584,243)
CFE - Indústria de Condutas, S.A.	614,460	539,082	75,378	429,214	(171,099)
SDC Emirates, LLC	2,100	1,261	839	242	(67,086)
Metropolitan Transportation Solutions, Ltd. (b)	47,091,957	47,035,317	56,640	-	-
Construtora - S. José Caldera, S.A.	23,419,646	13,845,843	9,573,803	17,002,360	2,247,348
Self Energy Moçambique S.A.	3,106,355	2,948,824	157,531	1,046,249	79,993
Larvick Reliable, R. L.	121,579	142,353	(20,774)	103,059	35,260
Ute Efacec/Self Energy, Ley 18/1982	702,605	966,458	(263,853)	2,296,719	(1,117,005)
My Watt, Lda	1,016,121	1,011,793	4,328	-	(672)
Reflexos Púrpura, Lda	811,640	811,000	640	-	(360)

(a) 31/03/2011

(b) 30/09/2010

During the period ended December 31, 2011 there was no record of impairment losses on these investments since there is no evidence of its existence.

6. COMPANIES NOT INCLUDED IN CONSOLIDATION

Companies not included in the consolidation, as they are not material to the reported results, their registered offices and the proportion of capital held as of December 31, 2011:

Company	Head offices	Capital Held
		Directly	Indirectly	Total
Construção Estação Tratamento das Águas do Paiva, ACE	Av. Fabril do Norte, 1601 - Matosinhos	-	50.00%	50.00%
GPCC - Grupo Português de Construção de Infraestruturas de Gás Natural, ACE	Rua Santos Pousada, nº 220 4000-478 Porto	-	25.00%	25.00%
GPCIE - Grupo Português de Construção de Infrestruturas da Expo, ACE	Quinta de Beirolas - Estaleiro Moscavide (Parque Expo) Stª Maria dos Olivais - 2685 Sacavém	-	25.00%	25.00%
Grupo Construtor do Edifício Gil Eanes, ACE	Edifício Gil Eanes, Expo 98, lotes 1.13.03 e 1.14.01 - Sta.Maria dos Olivais	-	50.00%	50.00%
Molinorte Linha do Norte - Construção Civil, ACE	Rua Santos Pousada, nº 220 4000-478 Porto	-	23.50%	23.50%
Soares da Costa, Engil, ACE - (Hosp. De Tomar)	Rua Santos Pousada, nº 220 4000-478 Porto	-	50.00%	50.00%

The companies listed above are complementary group of companies whose projects are virtually complete. The assets, liabilities, expenses revenue and profits of these companies as of December 31, 2011 are as follows:

Company	% Participation	Assets	Liabilities	Costs	Income
Construção Estação Trat. Das Águas do Paiva, ACE	50.00%	34,395	34,395	164	164
GPCC - Grupo Português de Construção de Infraestruturas de Gás Natural, ACE	25.00%	312,468	312,468	15,597	15,597

GPCIE - Grupo Português de Construção de
Infraestruturas da Expo, ACE	25.00%	188,746	188,746	36,353	36,353
Grupo Construtor do Edifício Gil Eanes, ACE	50.00%	62,922	62,922	211	211
Molinorte Linha do Norte - Construção Civil, ACE	23.50%	170,786	170,786	-	-
Soares da Costa, Engil, ACE - (Hosp. de Tomar)

7. INFORMATION BY SEGMENT

Based on the consolidated financial information for each business area, shows the following breakdown of the results and segment assets and liabilities as of December 31, 2011:

	Construction	Real Estate	Concessions	Energia Própria	Holding and other	Eliminations	Consolidated
Turnover:
External to the Group	677,072,416	2,567,667	185,081,333	8,587,359	239,273	-	873,548,049
Intragroup	119,135,461	4,582,060	2,522,232	-	13,334,975	(139,574,728)	-
Total turnover	796,207,878	7,149,727	187,603,566	8,587,359	13,574,248	(139,574,728)	873,548,049
Operational result by segment	29,430,998	2,499,990	29,004,926	(2,183,562)	(232,038)	366,820	58,887,135
Unallocated costs Operational results (continued activity)	29,430,998	2,499,990	29,004,926	(2,183,562)	(232,038)	366,820	- 58,887,135
Discontinued activity net income
Interest paid	(25,342,628)	(3,977,689)	(33,384,301)	(161,010)	(14,575,410)	21,853,425	(55,587,613)
Interest received	12,798,760	129,971	10,913,126	4,200	12,737,535	(22,142,177)	14,441,415
Net income from associated companies	355,017	-	201,644	(391,095)	-	-	165,566
Other financial costs/ income	(4,687,770)	457,912	(5,564,502)	(128,345)	2,564,222	(3,460,507)	(10,818,991)
Income tax	(4,475,955)	407,230	(2,021,424)	980,906	715,373	(352,340)	(4,746,210)
Regular activity results	8,078,422	(482,586)	(850,532)	(1,878,906)	1,209,681	(3,734,779)	2,341,301
Minorities	673,706	(26,932)	119,392	-	-	(800,877)	(34,711)
Net income attributable to the Group	7,404,717	(455,655)	(969,923)	(1,878,906)	1,209,681	(2,933,903)	2,376,012
Other data:
Assets	1,150,832,655	161,356,679	635,654,067	22,739,334	544,645,679	(773,542,885)	1,741,685,530
Financial invesments	6,058,517	78,984	18,214,280	621,874	-	(2,966,249)	22,007,406
Consolidated total assets							1,763,692,936
Liabilities	976,271,839	83,700,998	716,300,302	19,484,390	332,051,742	(480,638,827)	1,647,170,444
Consolidated total liabilities							1,647,170,444
Depreciations	17,258,738	1,287,999	14,248,275	80,784	925,136	(9,050)	33,791,882
							122

Other non cash costs (besides depreciations)	1,555,338	312,985	16,342	51,566	-	-	1,936,230
Intantigle and tangible assets
acquisitions	17,726,124	109,310	8,024,232	672,369	310,292	-	26,842,327

The breakdown of results, assets and liabilities by segment as of December 31, 2010 was as follows:

	Construction	Real Estate	Concessions	Holding and other	Eliminations	Consolidated
Turnover:
External to the Group	781,650,921	9,597,845	102,146,196	133,199	-	893,528,161
Intragroup	67,499,698	5,038,799	8,317	11,156,620	(83,703,434)	-
Total turnover	849,150,620	14,636,644	102,154,513	11,289,819	(83,703,434)	893,528,161
Operational result by segment	32,298,674	3,886,101	19,876,079	(2,822,123)	(3,345,385)	49,893,346
Unallocated costs						-
Operational results (continued activity)	32,298,674	3,886,101	19,876,079	(2,822,123)	(3,345,385)	49,893,346
Discontinued activity net income
Interest paid	(18,415,955)	(4,609,907)	(25,550,836)	(10,076,949)	12,168,859	(46,484,789)
Interest received	13,905,138	75,733	3,962,573	6,332,372	(13,829,078)	10,446,738
Net income from associated companies	(94,349)	7,960	435,498	-	241	349,349
Other financial costs/ income	(9,511,750)	(376,167)	(7,211,732)	33,088,149	(13,839,783)	2,148,718
Income tax	(4,332,851)	324,691	1,466,037	1,332,071	886,527	(323,524)
Regular activity results	13,848,907	(691,589)	(7,022,381)	27,853,520	(17,958,619)	16,029,838
Minorities	433,559	(23,938)	(9,115)	-	-	400,507
Net income attributable to the Group	13,415,347	(667,651)	(7,013,267)	27,853,520	(17,958,619)	15,629,331
Other data:
Assets	1,107,628,502	158,618,994	489,959,537	510,821,728	(627,749,322)	1,639,279,439
Financial invesments	3,316,349	377,496	18,322,020	599,476	(613,252)	22,002,089
Consolidated total assets						1,661,281,528
Liabilities	963,775,658	80,927,103	549,777,602	292,176,724	(364,936,882)	1,521,720,205
Consolidated total liabilities						1,521,720,205
Depreciations	18,375,301	1,259,318	14,105,272	960,321	(151,633)	34,548,579
Other non cash costs (besides depreciations)	3,874,706	502,709	19,946	-	(282,356)	4,115,004
Intantigle and tangible assets
acquisitions	25,141,322	1,714,927	11,726,643	5,709,709	-	44,292,600

Intragroup transactions are done at market values.

Sales and services breakdown by geographical market:

Turnover by geographical market	31/12/2011	%	31/12/2010	%
Portuga l	328,856,787	37.65%	380,200,375	42.55%
Angola	325,447,093	37.26%	344,845,685	38.59%
U.S.A.	114,071,553	13.06%	78,773,720	8.82%
Romania	6,629,981	0.76%	25,876,496	2.90%
Mozambique	80,378,076	9.20%	38,326,754	4.29%
Brazil	4,160,816	0.48%	-	0.00%
S. Tomé & Príncipe	2,574,796	0.29%	6,584,181	0.74%
Other countries	11,428,947	1.31%	18,920,950	2.12%
Total	873,548,049	100.00%	893,528,161	100.00%

Os ativos líquidos e investimentos em ativos tangíveis distribuem-se por mercados geográficos como segue:

	Portugal	Angola	U.S.	Mozambi que	S.Tomé & Príncipe	Guinea	Romania	Other countries	Total
Net Assets:
- Intangible	333,534,403	-	8,739,491	-	54,187	-	-	11,647	342,339,728
- Fixed Tangible - Investment	134,422,765	115,403,187	13,159,878	3,032,052	3,903,177	306,069	366,950	1,127,922	271,721,999
Properties - Financial	9,869,907	-	-	37,649	-	-	-	-	9,907,556
Investments	20,490,933	78,984	-	671,874	-	-	-	13,642,010	34,883,801
- Inventories	50,478,845	72,202,257	-	824,229	177,966	-	-	4,254,838	127,938,135
- Accounts Receivable	355,400,864	271,583,433	26,185,665	60,070,149	1,220,454	6,960,858	4,442,988	14,988,218	740,852,629
- Cash andequivalents	49,339,670	24,736,591	8,127,191	1,729,268	278,728	13,454	1,356,834	516,614	86,098,349
- Deferred taxes	28,641,094	2,237,802	9,954,401	9,374	-	-	-	98,658	40,941,330
- Other assets	74,416,515	18,751,447	8,482,179	1,365,881	280,321	1,263,236	3,438,383	1,011,446	109,009,408
Total	1,056,594,995	504,993,701	74,648,806	67,740,476	5,914,835	8,543,618	9,605,154	35,651,352	1,763,692,93 7
Investments in 2011: - Intangible and Fixed
Tangible Assets	9,328,131	9,178,870	6,379,123	818,213	816,188	-	318	321,483	26,842,327
Total	9,328,131	9,178,870	6,379,123	818,213	816,188	-	318	321,483	26,842,327

8. INTANGIBLE ASSETS

a) Gross assets

The movements in the gross value of intangible assets were the following:

Intangible assets	Opening Balance	Changes in Perimeter	Increases	Disposals	Exchange Rate Effect	Transfers and write off's	Closing Balance
Goodwill	87,156,004	-	-	-	-	(259,640)	86,896,365
Other intangible assets	298,446,376	-	1,122,113	-	148	(230,993)	299,337,643
Total	385,602,380	-	1,122,113	-	148	(490,633)	386,234,008

The balance recorded as "Goodwill" on the date of December 31, 2011 for the following acquisitions that occurred in previous years:

a. Acquisition, by the end of 2010, of 57.26% of the share capital of the subsidiary Energia Própria, SA, originating the accounting of goodwill in the amount of 5,299,282 euros, provisional value, since the Group was still in the process of determining the fair value of assets and liabilities of the company. The goodwill recorded in 2011, suffered a decrease of 259,640 euros, updating the value to 5,039,641 euros;
b. Acquisition, in 2008, of the subsidiary Contacto Sociedade de Construção, S.A., which originated goodwill of 44,134,341 euros. During the first half of 2010 there was an increase in this value, amounting to 88,200 euros, according to the conditions of the contract for the purchase of that company;
c. acquisition, in 2008, 13.33% of the share capital of associated company Autoestradas da Beira interior, S.A., and which resulted in a total effective participation of 33.33% and generated a goodwill amounting to 28,128,844 euros ;
d. Acquisition in the second half of 2007, 75% of the capital of the subsidiary Hidroequador Santomense Exploração de Centrais Hidroeléctricas, Lda. which resulted in a goodwill of 765 846 euros, registered in 2008 but calculated with reference to the date 31 December 2007, as in 2007 the Group was still in the process of determining the fair value of assets and liabilities of that company;
e. Acquisition of subsidiary Prince Contracting, LLC. that originated a goodwill amounting to 8,739,491 euros.

The "Other intangible assets" balance concerns mainly to Public Service Concession Agreements (IFRIC12).

After an internal study that has measured the current value of future cash flows, an adjustment was made in the amount of 250,000 euros for investment in "Parque Gemini", so as to adjust the book value of net realizable value.

During the year 2011 were capitalized financial charges as part of the cost of these assets, valued at 636,568 euros in relation to ongoing projects in the area of hydroelectric concessions.

As of December 31, 2011 there are no contractual commitments to acquire intangible fixed assets and no research and development expenses were registered in the period.

b) Accumulated depreciations

Movements in accumulated depreciations of intangible assets:

Intangible assets	Opening Balance	Changes in Perimeter	Increases	Regularization	Exchange Rate Effect	Closing Balance
Other intangibl e assets	31,202,393	-	12,720,129	(28,361)	119	43,894,281
Total	31,202,393	-	12,720,129	(28,361)	119	43,894,281

In late 2011, the Group, in accordance with IAS 36, impairment testing the goodwill relating to acquisitions of Contact, through evaluation by an independent body, the Prince, based on an independent study by the Energia Própria, Scutvias Hidroequador Santomense and, based on evaluations conducted internally.

Prince

The methodology used was the discounted cash flow (DCF - "Discounted Cash Flows"). The reference value was calculated assuming the continuity of the company and perspetivando maintaining the current organization.

For this purpose we estimated the activity of the company until 2017 and assumed that it will enter a mature stage of business from this year (thus estimating a perpetuity according to the Gordon model).

The operating free cash flows have been updated by an annual rate of discount of 10.08% which reflects the weighted average cost of capital (WACC):

(a) Cost of debt capital: 3.71%

(b) Income tax: 35%

(d) Risk premium to the market value of 5%

(e) Beta of assets of 1.56

(f) Leveraged Beta = Hamada formula;

(g) Capital structure target 75%

Energia Própria

The methodology used was the Updated Cash Flow (DCF - "Discounted Cash Flows"). The reference value was calculated assuming the continuity of the company, the lack of synergies and future perspetivando maintaining the current organization.

The estimates were produced assuming a nominal growth rate equivalent to inflation rate of 2%.

The explicit projection period was ten years, ie 2012 to 2021. It was considered a residual value that corresponds to the overall value that we consider the stabilization of its profitability, ie, in this case, after 2021, an amount determined as the current value of a perpetual and was assumed a growth rate long-term cash flows equal to the inflation rate assumed.

The operating free cash flows have been updated by an annual rate of discount of 11.95% which reflects the weighted average cost of capital (WACC):

(a) Cost of debt capital: 7%

(b) Income tax: 26.5%

(d) Premium market risk value of 5.3%

(e) Beta of assets of 1.14

(f) Leveraged Beta = Hamada formula;

(g) Capital structure target 60%

Contacto

The DCF – Discounted Cash Flows method was used.

The reference value was calculated assuming the continuity of the company, the absence of future synergies and maintaining the current organisation structure.

Estimates are at nominal rates, with a growth rate of 2% p.a., equivalent to inflation.

The explicit estimate period was five year, from 2012 to 2016. A residual rate considering a steady state profitability level was used, meaning that after 2015, it was considered the present value of a perpetuity that assumed a long-term growth rate from the cash flow equal to the rate of inflation.

Free operating cash flows were discounted at an annual discount rate of 11.7%, reflecting weighted average cost of capital (WACC):

(a) Cost of debt: 5.5%

(b) Corporate tax rate: 26.5%

(d) Market risk premium = 9.13%;

(e) Beta assets = 1.04;

(f) Leveraged Beta = Hamada formula;

(g) Target D/E structure = 19.2%

Scutvias

The DCF – Discounted Cash Flows method was used, in the shareholder's perspective (Free Cash-Flow to Equity).

The reference value was calculated assuming the continuity of the company, the absence of future synergies and maintaining the current organisation structure.

Estimates were based on the financial prospects of the business plan which takes into account the conditions of the respective concession contract.

The discount rate of 10.0% was used based on the following parameters:

(a) Risk-free interest rate 6.10%
(b) Market risk premium: 5%
(c) Levered beta equity: 0.76

Hidroequador Santomense

Also with reference to Hidroequador Santomense, an internal impairment test has been ran

The assessment methodology used has been Cash-Flow to Equity (shareholder perspective) according to which the company's value is obtained through the update of the cash flows expected by the shareholder, i.e. dividends payment and return of capital such as shareholders advances and loans as well as inherent interest. In the case at hand, the concessions the end of the concessions is known and being those structured in a project finance regime, this has been the method usually used by the market.

The calculation of the financial projections has been based on a financial model and resulting financial statements. The free cash flows risk is evaluated through the usage of a discount rate used to update those flows at the moment of the assessment. In order to obtain the discount rate, a risk-free interest rate, a market-risk premium and a country-risk premium have been used. In order to estimate the net cash flow generated, given that the concessions' end is pre-determined, financial projections over the concession period have been taken into account.

After running impairment tests, it was concluded that there is no need to make any adjustments to the value obtained.

9. TANGIBLE FIXED ASSETS

a) Gross assets

Movement in gross value of tangible fixed assets:

Fixed Tangible assets	Opening Balance	Changes in Perimeter	Increases	Disposals	Exchange Rate Effect	Transfers and write off's	Closing Balance
Land and buil dings	194,758,348	(57,823)	6,172,563	(891,064)	157,542	16,198,165	216,337,731
Basi c Equi pment	145,870,154	(36,688)	6,916,306	(2,750,419)	641,790	(2,582,923)	148,058,221
Other fixed tangible a ssets	60,990,799	(157,353)	2,176,729	(3,087,334)	392,319	(3,079,893)	57,235,267
Ongoing fi xed tangi ble assets	26,438,863	(5,092)	10,454,616	-	(24,693)	(18,404,243)	18,459,450
Total	428,058,164	(256,956)	25,720,213	(6,728,817)	1,166,957	(7,868,894)	440,090,669

In the column "Increase" of the "Tangible assets in progress" and "Land and buildings" are recorded work for the entity in the amount of 6,692,528 euros and 5,655,399 euros, respectively.

In the column "Disposals" of the "Land and buildings" was included the sale of surface rights of land Edurb-Talatona, which generated a capital gain in the amount of 2,527,349.22 euros (see note 23).

During 2011, were capitalized financial charges as part of the cost of these assets, valued at 199,160 euros, which covers essentially to the Hidroeléctrica STP,Lda project.

As at the end of 2011, consolidated financial statements of the Group included the amount of 1,299,514 euros capitalized as part of the net cost of these assets.

As of December 31, 2011 there are no materially relevant contractual commitments for the acquisition of tangible fixed assets.

b) Accumulated depreciations

Movement in accumulated depreciations of tangible fixed assets:

Fixed Tangible assets	Opening Balance	Changes in Perimeter	Increases	Regularisatio n	Exchange Rate Effect	Closing Balance
Land and buil dings	42,620,095	(6,811)	5,282,731	(863,875)	42,879	47,075,019
Ba sic Equi pment	75,315,467	(7,481)	9,835,774	(3,951,415)	418,868	81,611,215
Other fi xed tangibl e assets Total	38,948,202 156,883,764	(99,126) (113,418)	5,418,342 20,536,848	(4,961,454) (9,776,744)	376,473 838,220	39,682 ,436 168,368,670

Breakdown of the net values of intangible fixed assets and tangible fixed assets by primary reporting segment as of December 31, 2011.

				Construction Real Estate Concessions Energia Própria	Financial Participations	Total
Goodwil l	52,962,032	-	28,894,690	5,039,642	-	86,896,365
Other i nta ngi ble asstes	20,551	-	255,189,201	233,611	-	255,443,363
Total intangible asstes	52,982,583	-	284,083,892	5,273,253	-	342,339,728
Lands and buil di ngs	79,882,582	74,226,866	15,153,265	-	-	169,262,712
Ba sic equi pment	64,668,012	111,655	1,406,973	260,366	-	66,447,006
Other fixed tangible a ssets	14,040,232	502,594	678,745	12,040	2,319,220	17,552,831
Fixed ta ngi ble assets under construction	5,256,388	2,189,136	10,197,268	644,881	171,777	18,459,450
Total fixed tangible assets	163,847,214	77,030,250	27,436,250	917,287	2,490,998	271,721,999

During 2011, the company conducted tests for impairment of the carrying value of certain of its properties, through assessments by independent entities.

No impairment losses (or reversal of losses) were recorded for the tangible fixed assets in the financial year ended December 31, 2011.

10. FINANCIAL AND OPERATIONAL LEASING

Financial Leasing

In the Consolidated Financial Position, the Group has tangible fixed assets under the financial lease. As of December 31, 2011 the book value of these assets is as follows:

Financial Leasing	Gross Assets	Accumulated depreciation	Net Assets
La nds and buildi ngs	977,904	248,880	729,023
Basic equi pment	13,690,349	3,948,990	9,741,359
Other fi xed tangibl e assets	1,472,750	524,004	948,747
Total	16,141,003	4,721,874	11,419,129

The Group's responsibilities for these contracts are as follows:

Current	2,810,135
Non current	2,389,730

The total future minimum payments under the financial leases at the reporting date and their present value, for each period, has been reconciled in the table below:

	31/12/2011
Financial leasing minimum payments:
2012	3,070,207
2013	1,430,546
2014	827,139
2015	84,394
2016	34,165
	5,446,451
Present va lue/ interests	246,587
Present value of the financial leasing
minimum payments	5,199,865
Current	2,810,135
Non current	2,389,730

The financial lease agreements are subject to the market's interest rates and determine the asset's useful life. As of December 31, 2011 there are no contingent rents or restrictions regarding the payment of dividends (or any additional debts) associated with the financial lease agreement.

The Group also conducted two real estate leaseback transactions whose liabilities have been registered in the Consolidated Financial Position Statement under "Bank loans". As of 31 December 2011 the current liabilities and non-current liabilities associated with these agreements amounted to 1,306,862 euros and 12,103,303 euros respectively.

The real estate leaseback agreements are subject to the following underlying terms:

Contract	Real estate financial leasing contract number 450003696

Date	December 28, 2005
Lessor	Banco Comercial Português, S.A.
Lessee	Ciagest - Imobiliária e Gestão, S.A.
Asset	Acquisition of real estate assets alienated by HABITOP - Sociedade Imobiliária S.A. and CIAGEST - Imobiliária e Gestão S.A.
Financing amount	17,352,500 Euros
Residual value	2% of total financing amount
Term	15 years
Number of rents	60 rents, antecipated
Frequency	Quarterly, beginning on March 25, 2006
Interest rate	Euribor 3 months + 1.750%

Contract Real estate financial leasing contract number 450007448

Date	February 29, 2008
Lessor	Banco Comercial Português, S.A.
Lessee Asset	Ciagest - Imobiliária e Gestão, S.A. Fractions of the building in Rua Alvaro Pais, Rua Sousa Lopes and Rua Julieta Ferrão, in the city of Lisboa
Financing amount	3,000,000 Euros
Residual value	300,000 Euros

Term	12 years
Number of rents	48 rents, antecipated
Frequency	Quarterly, beginning on May 25, 2008
Interest rate	Euribor 3 months + 1.50%

Operational Leasing

Expenses with operating lease agreements amounting to 4,321,489 euros were recognized in 2011. Rents on operating lease agreements (fixed rents) maintained by the Group as of December 31, 2011, mainly referring to operating lease of vehicles, have the following maturity profile:

Maturity 2012 2,570,331 2013 1,459,790 2014 809,569 2015 237,579 Total 5,077,269

11. INVESTMENT PROPERTIES AND FINANCIAL INVESTMENTS

a) Gross assets

Movement in the gross value of investment properties and financial investments:

Investment properties and Financial investments	Opening Balance	Changes in Perimeter	Exchange Rate Effect	Increases	Disposals	Equity Method	Transfers and write	Closing Balance
Investment properties	12,449,902	-	12,535	691,537	-	-	(589,855)	12,564,118
Fi nanci al investments :
Equity cons olida ted financial investments	12,530,850	-	78,790	3,000	(239,558)	(688,243)	(77,315)	11,607,524
Loans to as socia ted companies	9,471,239	-	-	1,155,089	(68,000)	-	(158,446)	10,399,882
Other financial i nves tments	12,109,577	-	241,369	2,291,565	(1,366,800)	-	17,267	13,292,979
Total	34,111,666	-	320,159	3,449,654	(1,674,358)	(688,243)	(218,494)	35,300,385

Are recorded at zero value, the investments in associated CFE - Indústria de Condutas, S.A., Grupul Portuguhez de Constructii S.R.L., Ute Efacec/Self Energy, Ley 18/1982 e Larvick Reliable, R. L.. The amounts that exceed the value of the investment, the Group's share of accumulated losses associated with these, are of 19,872 euros, 278,596 euros, 131,928 euros and 10,284 euros, respectively.

The value recorded in column "Increases" under "Loans to associated companies," 385,584 euros respect to the loan granted by the subsidiary Soares da Costa Concessões, SGPS, S.A. to INDÁQUA - Indústria e Gestão de Águas, S.A., a company indirectly owned by Soares da Costa Group in 28.57% and 505,500 euros relate to loans granted by the subsidiary Energia Própria, S.A. to My Watt, Lda, a company indirectly owned by Soares da Costa Group by 50%.

The values shown in column "Disposals", under "Investments in equity" and "Loans to associated companies" comply in full, the sale of the company "Mini-Price Hotels (Porto), SA".

The value recorded in the "Transfer. and write off "under" Investment Properties ", of 521,640 euros concern for the transfer of a fraction of the Troia Building, owned by the subsidiary Ciagest - Imobiliária e Gestão, S.A., for investment property for tangible fixed assets.

Under "Other financial investments" is reflected in the establishment of Vortal, SGPS, SA, valued at 2,122,872 euros, in the column "Increases", and the divestiture of the Vortal – Comércio Electrónico, Consultadoria e Multimédia, S.A., in the amount of 1,366,800 euros in the column "Disposals".

As at 31 December 2011 and 31 December 2010, the breakdown of the balance recorded under "Other financial investments" is as follows:

	31/12/2011	31/12/2010
Financia l assets available for sa le	4,866,053	4,028,729
Financia l assets fai r val ue through gains or losses	432,393	432,393
Loans granted and accounts recei vabl e	7,994,533	7,648,455
Total	13,292,979	12,109,577

Financial assets available for sale respect to holdings that do not embody significant value and are not regulated market. Financial assets at fair value through profit or loss refers to shares of capital in Millennium BCP, which due to its negative effect on the stock price at balance sheet date is shown in note 21.

Loans and receivables relate primarily to contracts for supplies granted in other companies where there is no significant influence.

b) Accumulated depreciations

Movement in accumulated depreciations of investment properties:

	Opening Balance	Changes in Perimeter	Increases	Regularisations	Exchange Rate Effect	Closing Balance
Inves tment properties	2,423,607	-	255,543	(27,558)	4,971	2,656,562

During the period ended December 31, 2011 were recognized income on investment properties amounting to 284,076 euros. There were no direct operating expenses during the period of investment property or contractual obligations to purchase, construct or develop investment property or for repair, maintenance or enhancements thereof.

According to external evaluations carried out by a specialist independent and based on generally accepted evaluation criteria for the housing market, the fair value of assets classified as investment properties amounts to approximately 15.99 million euros.

Movement in value adjustments on financial investments is detailed in note 21.

12. BREAKDOWN OF INVENTORIES

Inventories	31/12/2011	31/12/2010
Raw materials and consumables	20,211,598	31,121,976
Goods and work in progress	57,688,187	74,765,377
Finished and intermediate goods	39,677,418	42,338,207
Goods	15,362,675	15,011,426
Fair value a djustments	(5,001,742)	(4,930,199)
Total	127,938,135	158,306,787

During the year 2011 were capitalized financial charges as part of the cost of these assets, amounting to 2,571,655 euros, which covers the real estate project developed in Angola by the associated company Talatona Imobiliária, Lda. The capitalization rate corresponds to the specific funding for this project at the rate of 24.2%.

At the end of 2011, in the Group's consolidated financial statements were capitalized, as part of the net cost of these assets, the amount of 5,788,664 euros.

The item "Work in Progress" breaks down as follows to the date of December 31, 2011:

Products and work in progress	31/12/2011	31/12/2010
Work in progress	32,829,190	54,913,300
Rea l estate projects under construction	24,858,997	19,852,077
Total	57,688,187	74,765,377

13. BREAKDOWN OF ACCOUNTS RECEIVABLE

Accounts Receivable	31/12/2011	31/12/2010
Customers with retention of gua rantees	27,104,699	28,254,075
Advances to suplli ers	3,496,670	4,007,530
Other a ccounts receivable	206,793,681	69,392,335
Accounts receivable - non current	237,395,050	101,653,940
Customers - current accounts	437,572,441	417,366,017
Customers - other receivables	3,133,963	5,897,288
Customers - doubtful accounts	21,194,830	19,720,859
Fair val ue adjustments	(21,192,685)	(19,711,158)
Customers	440,708,549	423,273,006
Subsidiari es	947,503	1,218,710
Advances to suppli ers/ fixed assets suppli ers	16,382,411	9,792,561
State and other publi c bodies	11,633,457	7,822,466
Other a ccounts receivable	35,538,796	37,875,801
Fair val ue adjustments	(3,194,828)	(7,023,063)
Other accounts receivable - current	61,307,338	49,686,475

The amount registered in the "Other accounts receivable - non-current" item refers to the compliance with IFRIC12 (financial asset model) by the jointly controlled entities Auto-Estradas XXI - Subconcessionária, S.A. and Estradas do Zambeze, S.A.. The Group's exposure to credit risk results from the accounts receivable related with its activity, being the maximum exposure to the credit risk the nominal value of its accounts receivable.

There is no significant concentration of credit risk as of 31 December 2011.

The following table shows by consolidated company and seniority levels of customer current account balances by the end of the fiscal year:

		0 to 180	181 to	361 to	541 to	+ than
Company	Performing	days	360 days	540 days	720 days	720 days	Total
Soc. Construções Soares da Costa, SA	136,127,200	50,498,863	28,164,341	11,622,474	10,245,450	121,110,883	357,769,211
Prince Contracting, LLC	9,127,822	6,243,183	-	-	-	-	15,371,006
CLEAR ANGOLA, S.A.	6,144,435	1,203,289	856,470	625,766	1,907,876	652,144	11,389,980
Soares da Costa Moçambique, SARL	1,823,357	6,286,743	499,664	239,544	164,093	498,026	9,511,426
Soares da Costa Concessões, SGPS, S.A.	8,252,938	-	-	-	-	-	8,252,938
LGV, Engenharia e Construção de Linhas de Alta Velocidade, ACE	8,078,470	-	-	-	-	-	8,078,470
Soares da Costa Construction Services, LLC	14,698	-	-	-	-	6,591,415	6,606,112
CONTACTO - Soc. Construções, S.A.	3,836,301	594,338	175,536	101,265	-	99,478	4,806,918
SOMAFEL - Engenharia e Obras Ferroviárias, S.A., SA	1,414,545	524,124	2,033,442	210,542	319,955	93,142	4,595,751
CLEAR - Instalações Electromecânicas, S.A. TRANSMETRO - Construção do Metropolitano do	2,003,118	427,085	132,734	110,110	701,585	874,098	4,248,731
Porto, ACE	3,549,485	-	-	-	-	-	3,549,485

Total	189,196,247	74,840,124	41,407,124	13,702,159	13,973,108	131,558,378	464,677,140
Other companies	636,610	146,196	297,223	29,358	2,835	225,085	1,337,307
Três ponto dois - T.G. Const. Civil - Via e Cat Mod. Linha do Norte, ACE	227,759	-	-	-	-	72,659	300,418
Mercados Novos - Imóveis Comerciais, Lda.	303,230	-	-	-	-	-	303,230
Portvias - Portagem de Vias, S.A.	1,800	413,130	-	-	-	-	414,930
Lda C.P.E. - Companhia de Parque de estacionamento, S.A.	- 56,804	26,858 232,188	76,852 34,004	315 15,870	467,453 4,076	- 151,979	571,479 494,921
GCVC, ACE Soares da Costa S. Tomé e Principe - Construções,	624,731	-	-	-	-	-	624,731
Remodelação Teatro Circo - S.C., A.B.B., D.S.T., ACE	984	984	-	-	-	749,572	751,539
CIAGEST - Imobiliária e Gestão, S.A.	757,372	29,280	4,770	-	2,826	55,967	850,216
Mota-Engil, Soares da Costa, MonteAdriano - Matosinhos, ACE	922,704	2,695	-	-	-	-	925,398
Nova Estação, ACE Construções Metálicas SOCOMETAL, S.A.	- 982,919	1,309,685 52,394	- 130,526	- 126,666	- 649	- -	1,309,685 1,293,154
SA	-	515,375	640,934	160,224	-	-	1,316,532
HidroAlqueva, ACE Soares da Costa Construcciones Centro Americanas,	-	1,477,819	-	-	-	-	1,477,819
Terceira Onda Planejamento e Desenvolvimento, Ltda.	1,672,603	-	-	-	-	-	1,672,603
Carta - Restauração e Serviços, Lda	1,315,610	508,837	6,058	129,554	-	43,041	2,003,100
Hidroequador Santomense - Exploração de Centrais Hidroeléctricas	-	-	2,094,744	-	-	-	2,094,744
LGC - Linha de Gondomar, Construtores, ACE	466,101	1,029,512	802,371	-	-	-	2,297,984
GACE - Gondomar, ACE Energia Própria, SGPS, S.A.	- 133,027	2,398,117 -	- 2,210,100	- -	- -	- -	2,398,117 2,343,127
OFM - Obras Públicas, Ferroviárias e Marítimas, S.A.	721,625	919,430	198,057	330,472	156,309	340,890	2,666,782
Porto, ACE	-	-	3,049,297	-	-	-	3,049,297
Normetro - Agrupamento do Metropolitano do

A substantial part of the receivables with longer maturity are from government authorities, for which there is no substantial risk of default. Information on credit risk is disclosed in note 30 of the present document.

As of December 31, 2011 and 2010, the account "State and other public entities" breakdown is the following:

	31/12/2011	31/12/2010
Value added tax	11,286,713	7,733,792
Other	346,744	88,674
Total	11,633,457	7,822,466

14. BREAKDOWN OF OTHER CURRENT ASSETS

Other current assets	31/12/2011	31/12/2010
Income a ccrua ls	92,690,287	116,378,837
Deferred costs	16,319,121	14,035,033
Total	109,009,408	130,413,871

As of December 31, 2011 these items breakdown is the following:

	31/12/2011	31/12/2010
Accrued income
Non invoiced works done	47,433,293	63,070,818
Compensatory processes in progress	16,032,980	22,417,750
Estima ted revenue by traffic range	13,362,330	13,043,813
Other	15,861,685	17,846,455
	92,690,287	116,378,837
Deferred costs
Construction works' set up costs	10,272,697	6,767,163
Other	6,046,424	7,267,870
	16,319,121	14,035,033

The "Estimated revenue by traffic range" account refers to traffic revenue from the motorway concession are, generated but not yet billed.

15. BREAKDOWN OF CASH AND EQUIVALENTS

Cash and equivalents	31/12/2011	31/12/2010
Bank deposits	85,146,375	95,305,387
Cash	951,975	1,226,220
Total	86,098,349	96,531,607

The total account balance as of December 31, 2011 and December 31, 2010 of 22,493,072 euros and 23,302,714 euros respectively, are related with non-recourse cash and cash equivalents registered as term deposits from the motorway concessionaire Scutvias - Autoestradas da Beira Interior, SA.

The financing and concession agreements of the associated company Scutvias – Autoestradas da Beira Interior, S.A. require the maintenance of deposits equal to 5/3 of the next debt payment.

Therefore, as of 31 December 2011 and 31 December 2010 the reserves of demand deposits or term deposits included in the Consolidated Financial Position amount to these mentioned figures.

16. COMPOSITION OF SHARE CAPITAL AND RESERVES

Soares da Costa SGPS SA share capital amounts to 160,000,000 Euros, represented by:

a) One hundred and fifty-nine million nine hundred and ninety-four thousand four hundred and eighty-two (159,994,482) ordinary shares;

b) Five thousand five hundred and eighteen (5,518) preferential shares with no voting rights, but with the right to receive a preferential dividend and preferential reimbursement of the respective nominal value if the company declares bankruptcy. In 2011, the movements related with own shares were as follows:

	No. of shares	Nominal value	Discounts and premiuns	Amount
Opening balance	382,914	382,914	(185,134)	197,780
Acquisi tions	1,847,588	1,847,588	(1,037,515)	810,073
Ali enations	(1,723,210)	(1,723,210)	887,883	(835,327)
Closing balance	507,292	507,292	(334,766)	172,526

During this period, the holding company, Grupo Soares da Costa, SGPS, SA acquired 1,847,588 own shares at an average price of 0.44 euros, which negatively affected the shareholders' equity by 810,073 euros.

In the same period, the parent company sold 1,723,210 own shares at an average price of 0.43 euros, positively influencing the shareholders' equity by 741,747 euros.

The currency translation reserve reflects the exchange rate changes occurred in translating the financial statements of subsidiaries in a currency other than Euro and are not likely to be distributed or be used to absorb losses.

Some of the Group's companies contracted cash flow hedge financial instruments. Verified changes in the fair value of those financial instruments are directly recognised at the "Reserves and retained profits" item. The cumulative effect of these derivatives and the respective deferred tax discriminates as follows:

	Derivatives	Deferred taxes	Total
Grupo Soares da Costa, SGPS, S.A	(63,676)	15,919	(47,757)
Socieda de de Construções Soa res da Costa, S.A.	147,636	(42,814)	104,822
Intevias – Serviços e Gestão, S.A.	(2,357,063)	589,266	(1,767,797)
C.P.E. – Companhia de Pa rques de Estaciona mento, S. (1,745,711)	A.	436,428	(1,309,283)
Scutvias – Autoestra das da Beira Interior, S.A.	305,583	(84,035)	221,547
Auto-Estradas XXI - Subconcessi onária, S.A.	(24,389,643)	6,463,255	(17,926,387)
Total	(28,102,874)	7,378,018	(20,724,856)

17. BANK LOANS

As of December 31, 2011, the main bank loans entered into by the Group are as follows:

Holding

Grupo Soares da Costa, SGPS, SA has contracted with a banking syndicate the placement and underwriting of Commercial Paper issues up to a limit of 32,000 thousand euros, under a commercial paper programme contract in place up to 16 June 2015. As of December 31, 2011 this programme was being completely used.
Loan granted by Caixa Central de Crédito Agrícola Mutuo to Grupo Soares da Costa, SGPS, SA, amounting to 2,670 thousand euros, to be repaid in 7 six-monthly instalments ending on June 2015.
Loan granted by Caixa Geral de Depósitos to Grupo Soares da Costa, SGPS, S.A., amounting to 1,250 thousand euros, to be repaid in 5 quarterly instalments ending on March 2013.
Loan granted by Banco Popular Portugal to Grupo Soares da Costa, SGPS, SA, amounting to 5,000 thousand euros, to be repaid in 4 six-monthly instalments ending on June 2014.
Loan granted by Caixa Geral de Depósitos to Grupo Soares da Costa, SGPS, S.A., amounting to 14,000 thousand euros, to be repaid in 8 quarterly instalments ending on October 2013.
Loan granted by Banif - Banco Internacional do Funchal to Grupo Soares da Costa, SGPS, SA currently amounting to 1,839 thousand euros, to be paid back in 10 quarterly instalments ending on April 2014.
Loan granted by Caixa Banco de Investimentos to Grupo Soares da Costa, SGPS, SA currently amounting to 1,250 thousand euros, to be reimbursed on January 2012.
Bonds issued by Grupo Soares da Costa, SGPS, SA, amounting to 20,000 thousand euros, to be repaid by November 2015.
Bonds issued by Grupo Soares da Costa, SGPS, SA, amounting to 80,000 thousand euros, to be repaid by December 2017. - Loan granted by Banco Santander to Energia Própria, S.A., currently amounting to 350 thousands of euros, to be repaid in quarterly instalments, ending on April 2015.
Loan granted by Banco Santander to Energia Própria, S.A., currently amounting to 250 thousands of euros, to be paid back in quarterly instalments, ending on November 2012.
Loan granted by Banco Santander to Energia Própria, S.A., currently amounting to 125 thousands of euros, to be paid back in quarterly instalments, ending on September 2015.
Loan granted by Banco Santander to Self Energy Engineering & Innovation, S.A., currently amounting to 70 thousands of euros, to be paid back in quarterly instalments, ending on September 2013.

Construction

"Hot money" loan granted by NCG Banco, SA, Portuguese subsidiary, to Sociedade de Construções Soares da Costa, SA currently amounting to 1,235 thousand euros, to be repaid in January, February and March 2012.
"Hot money" loan granted by Montepio Geral, to Sociedade de Construções Soares da Costa, SA currently amounting to 3,000 thousand euros, to be repaid in January 2012.
Loan granted by Caixa Geral de Depósitos to Sociedade de Construções Soares da Costa, SA amounting to 138 thousand dollars, to be paid back in 2 quarterly instalments ending on January 2012.
Loan granted by NCG Banco, SA, Portuguese subsidiary, to Sociedade de Construções Soares da Costa, S.A. amounting to 1,150 thousand euros, to be paid back in 23 six-month instalments ending on January 2023.
Loan granted by Banco BPI to Sociedade de Construções Soares da Costa, SA amounting to 355 thousand Euros, to be paid back in 2 quarterly instalments ending on May 2012.
Loan granted by Banco BPI to Sociedade de Construções Soares da Costa, SA amounting to 1,491 thousand Euros, to be paid back in 7 quarterly instalments ending on September 2013.
Loan granted by Banco BPI to Sociedade de Construções Soares da Costa, SA amounting to 59 thousand Euros, to be paid back on February 2013.
Loan granted Banco Português de Negócios to Sociedade de Construções Soares da Costa, SA amounting to 1,689 thousand Euros, to be paid back in 13 quarterly instalments ending on January 2015.
Loan granted by Banco Português de Negócios to Sociedade de Construções Soares da Costa, SA with amounting to 2,717 thousand Euros, to be paid back in 5 quarterly instalments ending on February 2013.
Loan granted by Banco BIC to Sociedade de Construções Soares da Costa, SA amounting to 400 thousand Euros, to be paid back in 6 monthly instalments ending on June 2012.
Loan granted by Banif - Banco Internacional do Funchal to Sociedade de Construções Soares da Costa, SA currently amounting to 3,542 thousand Euros, to be paid back in 13 quarterly instalments ending on February 2015.
Loan granted by Caixa Geral de Depósitos to Sociedade de Construções Soares da Costa, SA amounting to 8,750 thousand Euros, to be paid back in 7 quarterly instalments ending on until September 2013.
Loan granted by Banco Bilbao Vizcaya Argentaria (Portugal) to Sociedade de Construções Soares da Costa, SA amounting to 3,750 thousand Euros, to be paid back in 2 monthly instalments ending on February 2012.
Loan granted by Barclays Bank to Sociedade de Construções Soares da Costa, SA amounting to 3,040 thousand Euros, to be paid back in 6 monthly instalments ending on July 2012.
Loan granted by Barclays Bank to Sociedade de Construções Soares da Costa, SA amounting to 1,600 thousand Euros, to be paid back in 5 monthly instalments ending on June 2012.
Loan granted by Bnaco BAI Europa to Sociedade de Construções Soares da Costa, SA amounting to 2,000 thousand rol, to be paid back on June 2012.
Loan granted by BRD Groupe Société Generale to Sociedade de Construções Soares da Costa, SA amounting to 755 thousand rol, to be paid back in 3 quarterly instalments ending on August 2012.
Sociedade de Construções Soares da Costa, S.A. has contracted with Barclays Bank the placement and underwriting of Commercial Paper issues up to a limit of 9,900 thousand euros, under a commercial paper programme contract in place up to August 2013. As of December 31, 2011 this programme was being completely used.
Sociedade de Construções Soares da Costa, S.A. has contracted with Caixa Central de Credito Agrícola Mutuo the placement and underwriting of Commercial Paper issues up to a limit of 5,000 thousand euros, under a commercial paper programme contract in place up to January 2014. As of December 31, 2011 this programme was being completely used.
Sociedade de Construções Soares da Costa, S.A. has contracted with Caixa Geral de Depósitos the placement and underwriting of Commercial Paper issues up to a limit of 15,000 thousand Euros, under a commercial paper programme contract in place up to June 2012. As of December 31, 2011 this programme was being completely used.
Sociedade de Construções Soares da Costa, S.A. has contracted with Banco Comercial Português the placement and underwriting of Commercial Paper issues up to a limit of 4,500 thousand Euros, under a commercial paper programme contract in place up to January 2014. As of December 31, 2011 this programme was being completely used.
Sociedade de Construções Soares da Costa, S.A. has contracted with Banco Comercial Português and Banco Popular Portugal the placement and underwriting of Commercial Paper issues up to a limit of 15,000 thousand Euros, under a commercial paper programme contract in place up to January 2014. As of December 31, 2011 this programme was being completely used.
Loan granted by Banco Africano de Investimento to Sociedade de Construções Soares da Costa, SA amounting to 1,950 thousand dollars, to be paid back in 13 monthly instalments ending on January 2013.
Loan granted by Banco de Fomento de Angola, amounting to 462,157 thousand kwanzas, to be paid back in 22 montly instalments ending on October 2013.
Loan granted by Montepio Geral to Clear Instalações Electromecânicas, SA amounting to 218 thousand euros, to be paid back in 5 quarterly instalments ending on March 2013.
Loan granted by Montepio Geral to Construções Metálicas Socometal, S.A. amounting to 218 thousand euros, to be paid back in 5 quarterly instalments ending on March 2013.
Loan granted by Montepio Geral to Construções Metálicas Socometal, S.A. amounting to 250 thousand euros, to be paid back in 12 quarterly instalments ending on December 2014.
Loan granted by Banif to Soares da Costa America, Inc. amounting to 13,659 thousand dollars, to be paid back in sixmonthly instalments ending on September 2013.
Loan granted by Commerce National Bank Finance to Soares da Costa America, Inc. currently amounting to 1,950 thousand dollars, to be paid back on December 2011.
Loan granted by TerraBank to Soares da Costa America, Inc. currently amounting to 1,900 thousand euros, to be paid on April 2012.
Loan granted by M&I Bank to Prince Contracting, LLC amounting to 104 thousand dollars, with a monthly fixed instalment (capital and interests) of 1.1 thousand dollars and a final repayment of 98 thousand dollars on September 2012.

Concessions

Loan granted by Banco BPI to Soares da Costa Concessões, SGPS, SA amounting to 1,429 thousand euros, to be paid back in 3 half-yearly instalments ending on December 2012.
- Loan granted by Banco Popular Portugal to Soares da Costa Concessões, SGPS, S.A. amounting to 16,968 thousand euros, to be paid back in 50 quarterly instalments ending on May 2024.
Loan granted by Banif Banco de Investimentos to Soares da Costa Concessões, SGPS, SA amounting to 2,625 thousand Euros, to be paid back in 10 six-monthly instalments ending on June 2016.
Loan granted by Banco BPI to CPE - Companhia de Parques de Estacionamento, SA amounting to 27,941 thousand euros, to be paid back in 34 six-monthly instalments ending on December 2028.
Loan granted by Banco BPI to CPE - Companhia de Parques de Estacionamento, SA amounting to 1,010 thousand euros, to be paid back in 4 six-monthly instalments ending on December 2013.
Loan granted by Banco BPI to Intevias - Serviços e Gestão, SA amounting to 62,258 thousand euros, to be paid back in 14 yearly instalments ending on July 2028.
Loan granted by Caixa Banco de Investimentos to Soares da Costa Hidroenergia 1T, Lda. and Soares da Costa Hidroenergia 4T currently amounting to 5,000 thousand euros, to be paid on June 2012.
Loan granted by Banca Comercial e do Banco Europeu de Investimentos to Scutvias – Autoestradas da Beira Interior, S.A., currently and in the percentage of the participation amounting to 9,610,821 euros and 4,179,165 euros, respectively, to be repaid in 2 six-month installements ending on October 2012.
Loan granted by BBU Bank to Soares da Costa Concessions USA, Inc. amounting to 2,000 thousand dollars, to be paid back on April 2012.
Loan granted by Banif Banco de Investimento to SDC Costa Rica, SA amounting to 7,852 thousand dollars, to be paid back on December 2017.

Real Estate

Loan granted by Banco Comercial Portugues to Ciagest – Imobiliária e Gestão, SA amounting to 2,197 thousand Euros, to be paid back in 33 quarterly instalments ending on February 2020.
Loan granted by Banco Comercial Português to Ciagest – Imobiliária e Gestão, SA amounting to 11,215 thousand Euros, to be paid back in 36 quarterly instalments ending on December 2020.
Loan granted by Caixa Nova Galicia to Ciagest – Imobiliária e Gestão, SA currently amounting to 3,946 thousand euros, to be paid back in 102 monthly instalments ending on June 2020.
Loan granted by Caixa Nova Galicia to Ciagest – Imobiliária e Gestão, SA currently amounting to 1,167 thousand euros, to be paid back in 17 monthly instalments ending on April 2013.
Loan granted by Nova Caixa Galicia to Cais da Fontinha - Investimentos Imobiliária, S.A. currently amounting to 3,225 thousand euros, to be paid back in 6 quarterly instalments ending on March 2013.
Loan granted by Banco Privado Atlântico to Talatona Imobiliária, Lda. amounting to 2,857,083 thousand kwanzas, to be paid back on February 2012.

As of December 31, 2011 "Bank loans" in non-current liabilities included the financing loans secured by the associated company Scutvias – Autoestradas da Beira Interior, SA to fund the construction of the motorway, operated under a concession contract, from Banco Europeu de Investimento and the banking syndicate, amounting to 97,553,660 Euros and 70,015,941 Euros, respectively, in the percentage attributable to the Group. The main terms of these loans are:

Credit facility	Interest rate	1st Payment	Last payment
Banki ng syndi cate	Variable, i ndexed to 6	1st hal f of 2006	1st ha lf of 2019
European Investment Bank Fixed rate: 6.43%	month Euribor	2nd half of 2007	1st hald of
			2024

The jointly controlled company Auto-Estradas XXI - Subconcessionária, S.A., entered into the following financing: long term credit facility, EIB facility with commercial risk and EIB facility with guarantees, under the following terms:

EIB facility with commercial risk:

Amount:	Up to EUR 200,000,000
Total Period:	Up to 27 years as of the Financial Close
Use Period:	5 years
Interest Rate:	Euribor plus margin
Margin:	From 2009 until the first semester of 2016: 0,90% p.a. After the first semester of 2016: 0,37% p.a. Note: an aditional 0.20% margin over the EIB margins has been considered since that to the financings entered into with EIB on a variable rate, an estimated 0.31% spread over Euribor is chargeable.
Commitment Fee:	0.45% p.a. over the amount not used
Financial operations fee:	0,50% flat
Redemption:	Variable and increasing with mandatory redemption amounts
Hedging:	Interest rates variation risk hedging through a swap contract with differentiated coverage: 100% of the capital during the availability period and for the following periods the coverage levels for the outstanding principal: - From 2014 to 2027: 70% of the outstanding principal not taking into account the depreciations under the cash sweep system; - From 2028 to 2029: 17% and 7% of the outstanding principal not taking into account the depreciations under the cash sweep system;

EIB's guaranteed facility loan:

Amount:	Up to EUR 89,000,000
Total Period:	Up to 27 years as of the Financial Close
Use Period:	5 years
Interest Rate:	Euribor plus margin
Margin:	0.0% as long as bank guarantees are in force and 0.37% after the release of the bank guarantees granted by commercial banks. Note: the financial system isn't taking into account the release of the bank guarantees
Commitment Fee:	0.20% p.a. over the amount not used
Financial operations fee:	0,20% flat

Redemption:	Variable and increasing with mandatory redemption amounts

Long Term Credit Facility:

Up to EUR 286,000,000
Up to 27 years as of the Financial Close, that is to say until 10/12/2035
5 years (from 2009 to 2013)
Euribor plus margin
2009 to 2011: 1,60% p.a.
2012 to 2015: 1,80% p.a.
50% of the applicable margin over the amount not used
1,40% flat In fiscal terms, the incidence of the fee has been divided between VAT and stamp duty with the 75% and 25% respectively
EUR 100,000 per year, adjusted with inflation
Full cash sweep durign 2014 and 2015 and the remaining bullet in 2016.
Interest rate variation risk hedging through a swap contract with differentiated coverage: 100% of the capital during the availability period and for the following periods the coverage levels for the outstanding principal: From 2014 to 2027: 70% of the outstanding principal not taking into account the depreciations under the cash sweep system; • From 2028 to 2029: 17% and 7% of the outstanding principal not taking into account the depreciations under the cash sweep system;

The consortium bid takes into account the renegotiation of the Long Term Credit Facility in 2016 through the issuance of a debenture loan under more advantageous conditions. This refinancing operation is not deemed as the "Subconcession refinancing" provisioned in clause 90 of the Subconcession Contract because it is a part of the Consortium bid, the fulfilment risk is fully undertaken by the Consortium and is included in the Base Case. This way, it is acknowledged that, should favourable impacts result from such operation, those results shall be fully withheld by the Subconcessionary. The financial conditions of the refinancing operation are as follows:

Amount:	256,292,632.25
Total Period:	Until 20 years
Use Period:	A single use in 2016
Interest Rate:	Euribor plus margin

Margin:	1.50%
Financial operations fee:	0,50% flat
Agent's Fee:	EUR 100,000 per year, adjusted with inflation
Redemption:	42 six-monthly instalments with variable capital as of 30 June 2016
Hedging:	Interest rate variation risk partial hedging through a swap contract with the following coverage levels for the outstanding principal: From 2016 to 2026: 70% of the outstanding principal; • Year 2028: 17% of the outstanding principal; • Year 2029: 7% of the outstanding principal; • Remaining period: 0% coverage, that is to say variable capital regime.

The amounts of the items "Bonds" and "Bank Loans", as of December 31, 2010, were restated due to the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflect a decrease in 2,795,754 euros and 3,606,974 euros in the non current liabilities, respectively, and of 163,261 euros in the current liabilities.

The nominal values of the loans recorded in the Consolidated Financial Position as of December 31, 2011 have the following maturities:

Maturity	Bank loans	Bonds	Overdrafts	Other (Factoring)	Total
2012	247,793,855	-	21,674,970	37,850,092	307,318,918
2013	73,102,618	-	-	-	73,102,618
2014	67,504,205	-	-	-	67,504,205
2015	41,627,053	19,573,368	-	-	61,200,421
2016	33,769,761	-	-	-	33,769,761
2017	117,193,747	78,031,373	-	-	195,225,120
After 2017	205,791,164	-	-	-	205,791,164
Total	786,782,403	97,604,741	21,674,970	37,850,092	943,912,207

The non recourse debt as of December 31, 2011 had the following maturities:

Maturity	Bank loans
2012	15,353,363
2013	14,728,257
2014	32,139,089
2015	32,604,045
2016	27,361,265
2017	113,305,825
after 2017	189,234,986
Total	424,726,830

The Group's loans as of December 31, 2011 had the following interest rates:

Type of Credit facility	Minimum	Maximum
Overdraft	5.030%	9.190%
Hot Money	7.235%	11.940%
Bank loans	2.222%	10.000%
Bonds	4.204%	4.319%
Commerci al paper	4.856%	8.156%

Addicionally, specific financing contract in local markets have interest rates between 7.282% and 24.24%.

In general, bank loans pay interest at variable rates hence exposing the Group to the effect of fluctuations in market interest rates.

However, to manage interest rate risk, in particular in the Concessions business area, the Group contracted financial instrument to cover interest rates changes, as summarised in the "Derivatives" note below.

Based on the net indebtness level as of December 31, 2011, a variation of one percentage point in the indexing interest rate would have an impact p.a. in terms of financial costs of 5.5 million euros.

18. DERIVATIVES

During the first quarter of 2011, the Group signed the following interest rate cover instrument:

Grupo Soares da Costa SGPS, S.A.

Type of financi al instrument:	Deri vati ve
Description:	Interest rate coverage
Banks:	BANCO POPULAR
Currency:	Euro
Contract date:	11/03/2011
Beginning date:	14/06/2011
Maturity date:	16/06/2014
Frequency:	Annual
Swap:	2.64
Amount covered by 31/12/2011:	4.513.000 Euros, redeema ble
Reference:	Euribor 12M

In the Concessions business area, the Group has the following interest rate cover instruments:

Scutvias - Autoestradas da Beira Interior, S.A.

Deri vati ve Interest rate coverage, 100% of debt
to commercial banking (to al l term of the debt) BCP / BPI / BAYERISCHE / CGD
Euro
24/09/1999
01/10/1999
04/10/2018
Semiannua l
7.14
247.035.016 Euros
Euribor + 1% duri ng the construction phase;
Euribor + 0.9% during the opera tion phase.

Intevias - Serviços e Gestão, S.A.

Type of fi nancial instrument:	Derivative
Descri ption:	Interest rate coverage
Banks:	BPI
Currency:	Euro
Contract date:	04/12/2008
Begi nning da te:	04/12/2008
Maturity da te:	15/07/2023
Frequency:	Annual
Swap:	3.45
Amount covered by 31/12/2011:	57.492.000 Euros, redeema ble
Reference:	Euribor 12 months

CPE - Companhia de Parques de Estacionamento, S.A.

Type of fi nancial instrument:	Derivative
Descri ption:	Interest rate coverage
Banks:	BPI
Currency:	Euro
Contract date:	09/06/2009
Begi nning da te:	10/06/2009
Maturity da te:	10/12/2028
Frequency:	Semiannual
Swap:	4.19
Amount covered by 31/12/2011:	19.528.959 Euros, redeema ble
Reference:	Euribor 6 months

Auto-estradas XXI - Subconcessionária, S.A.

Type of financi al instrument:	Deri vati ve
Description:	Interest rate coverage
Banks:	BBVA, BANESTO, BANCO POPULAR, CAJA
	MADRID, SANTANDER TOTTA, BPI, LA CAIXA
Currency:	Euro
Contract date:	30/01/2009
Beginning date:	03/02/2009
Maturity date:	31/12/2029
Frequency:	Semiannua l
Swap:	4.22
Amount covered by 31/12/2011:	501.337.777 Euros, redeemabl e
Reference:	Euribor 6 months

In the Construction business area, and in order to cover exchange rate risk associated with cash flows of a specific project, the Group has signed several currency forward contracts summarised in the table below:

Soc. Construções Soares da Costa, S.A.

Type of fi nancial instrument:	Deriva tive
Descri ption:	Forward
Banks:	Barclays Bank
Currency:	US dol lar
Contract date:	03/07/2009	18/09/2009
Beginning date:	03/07/2009	18/09/2009
Maturity date:	09/07/2012	09/07/2012
Frequency:	Flexible	Flexible
Swap:	1.4455	1.5100
Amount covered by 31/12/2011:	8.150.000 USD	5.000.000 USD
Reference:	Foreign exchange rate EUR/USD

As of December 31, 20110, these instruments had been classified as coverage instruments as they met the formal requisites of IAS 39 related to the documentation and effectiveness of the derivative coverage instruments.

The fair value of these financial instruments was set by the respective counterparts which are independent and credible entities by adopting appropriate evaluation models. These were based on the discounted cash flow method using observable market inputs listed in the interbank market.

As of December 31, 2012 and 2010, the item "Derivatives" has the following breakdown.

Derivatives	31/12/2011	31/12/2010

Grupo Soares da Costa, SGPS, S.A	63,676	-
Soci edade de Construções Soa res da Costa, S.A.	1,190,357	1,337,993
Intevia s – Serviços e Gestão, S.A.	4,261,552	1,904,489
C.P.E. – Companhi a de Parques de Estaciona mento, S.A.	3,309,601	1,563,890
Scutvia s – Autoestradas da Beira Interior, S.A.	13,494,989	13,800,571
Auto-Estradas XXI - Subconcessionária, S.A.	44,123,589	19,733,946
Total	66,443,764	38,340,890

19. BREAKDOWN OF ACCOUNTS PAYABLE

As of December 31, 2011 the item "Accounts payable" breakdown was the following:

Accounts payable	31/12/2011	31/12/2010
Fixed assets suppliers	2,389,730	4,656,414
Suppl iers with retention of guarantees	10,211,038	8,617,015
Advances from customers	21,670,923	20,531,026
Other	17,038,409	11,154,705
Accounts payable - non current	51,310,099	44,959,160
Associated companies	16,867	3,990,041
Other sharehol ders	32,823	1,251,208
State and other public enti ties (excluding i ncome tax)	6,611,564	5,451,424
Outros credores	49,998,581	41,520,448
Accounts payable - current	56,659,835	52,213,121

"State and other public bodies" (including income tax) account breakdown as of December 31, 2011 and 2010:

	31/12/2011	31/12/2010
Val ue added tax	2,369,315	2,620,840
Social security's contributions	2,456,940	1,562,883
Other	1,785,309	1,267,701
Total	6,611,564	5,451,424

20. BREAKDOWN OF OTHER CURRENT LIABILITIES

Other current assets	31/12/2011	31/12/2010
Income a ccrua ls	92,690,287	116,378,837
Deferred costs	16,319,121	14,035,033
Total	109,009,408	130,413,871

The value of "Accrued expenses" has been restated to December 31, 2010, with the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflects an increase of 88,395 euros. As of December 31, 2011 and 2010 these items breakdown was as follows:

	31/12/2011	31/12/2010
Accrued costs
Invoi ced to be received	97,894,505	84,955,870
Staff costs to pay	9,033,777	9,797,409
Interest to pay	7,943,361	6,744,945
Other	11,986,808	7,100,891
	126,858,452	108,599,114
Deferred income
Works invoiced not executed	48,619,467	37,562,605
Anteci pated rents	324,107	321,984
Other	8,240,850	8,921,952
	57,184,424	46,806,541

21. BREAKDOWN IN ANNUAL MOVEMENT OF FAIR VALUE ADJUSTMENTS AND PROVISIONS

Movement in fair value adjustments:

Fair Value Adjustments	Notes	Opening Balance	Changes in Perimeter	Increases	Reductions	Closing Balance
Doubtful customers		19,711,158		1,532,440	(50, 914)	21,192,685
Customers	13	19,711,158		1,532,440	(50, 914)	21,192,685
Other accounts receivable		7,023,063		109,720	(3,937,955)	3,194,828
Other accounts receivable	13	7,023,063		109,720	(3,937,955)	3,194,828
Raw materials and consumables		153,213		85,389	(14, 870)	223,733
Goods and work in progress		281,689	٠	69,066	(348, 772)	1,983
Finished and intermediate goods		4,050,259	٠	$\overline{\phantom{a}}$	(14, 694)	4,035,566
Goods		445,038		368,324	(72, 902)	740,460
Inventories	12	4,930,199		522,780	(451, 238)	5,001,742
Equity consolidated financial investments		٠		$\overline{\phantom{a}}$		٠
Other financial investments		387,023		48,996	(19, 434)	416,584
Financial investments		387,023		48,996	(19, 434)	416,584
Total fair value adjustments		32,051,444		2,213,936	(4,459,541)	29,805,838

Movement in provisions was as follows:

Provisions	Opening Balance	Changes in Perimeter	Increases	Reductions	Closing Balance
Other provisions for risks and charges	704,145	$\overline{\phantom{a}}$	275.739	(93.684)	886,200
Total	704.145	$\overline{\phantom{a}}$	275.739	(93.684)	886,200

Its breakdown by nature as of December 31, 2011, was the following:

	Opening balance	Increases	Reductions	Closing balance

Judicial proceedings	602,692	52,212	(86, 180)	568,724
Pensions and other staff costs	22,663	190,028	(7,504)	205,186
Other provisions	78,790	33,500	٠	112,290
Total	704.145	275,739	(93, 684)	886,200

Impairment losses related with accounts receivable are accounted based on an individual risk analysis, considering its nature, the payment delay and the Group's past experience in similar situations.

Details on the fair value adjustments and existing provisions as of December 31, 201a by primary reporting segment:

				Construction Real Estate Concessions Energia Própria	Financial Participations	Consolidated
Other financial investments					416,584	416,584
					416,584	416,584
Inventories
Raw materials and consumables	223,733					223,733
Goods and work in progress	3,869,840	165,726				4,035,566
Finished and intermediate goods	1,983		٠	٠		1,983
Goods		714,307		26,154		740,460
	4,095,555	880,033		26,154		5,001,742
Customers
Doubtful customers	19,632,543	1,543,117	3,384	13,641		21,192,685
	19,632,543	1,543,117	3,384	13,641		21,192,685
Other account receivable
Other account receivable	3,194,828		٠			3,194,828
	3,194,828					3,194,828
Total fair value adjustments	26,922,926	2,423,149	3,384	39,795	416,584	29,805,838
Other provisions for risks and charges	828,366		46,063	11,771		886,200
	828,366		46,063	11,771		886,200

22. RELATED PARTIES

Account balances and transactions within the Group companies in the perimeter of the consolidation are eliminated in the consolidation process, and are not disclosed in this note. Balances and transactions between the Group and associated companies (consolidated by the equity method) are detailed in the following table.

The terms and conditions used in these transactions between the Group and related parties are substantially the same normally contracted between independent entities in comparable operations.

Balances as of December 31, 2011	Customers	Other 3rd parties assets	Loans to subsidiaries and associated	Suppliers	Other 3rd parties liabilities
Gayaexplor - Const. Exploração de Parques Estacionam., Lo	22,734		27,500
Indágua - Indústria e Gestão de Águas, SA	٠	180,396	9,373,759	64,523
Metropolitan Transportation Solutions, Itd.	7,171,502	1,500,238	53,054		861,227
Grupul Portughez de Construtii, S.R.L.	1,220,804	505,521			٠
CFE Indústria de Condutas, S.A.	12,721	٠	45,000	9,163
MTA - Máquinas e Tractores de Angola Lda.	24,146	154,237		17,431
SDC Emirates Construction, L.L.C.	٠	101,624
Self Energy Mocambique, S.A.	118,027	٠
Larvick Reliable, R.L.	15,000		43,000
My Watt, Lda	٠		505,500
Total	8,584,934	2,442,016	10,047,813	91,117	861,227

Transactions in 2011	Operating income and gains	Operating costs and losses	Financial income/ costs
CFE Indústria de Condutas, S.A.	15,067	54,748	-
MTA - Máquinas e Tra ctores de Angol a Lda.	395,705	714,531	(4,243)
Indáqua - Indústri a e Gestão de Água s, S.A.	-	223,145	346,619
Metropoli tan Tra nsporta tion Sol utions Ltd.	-	84,752	-
Self Energy Moçambique, S.A.	329,981	-	-
Total	740,753	1,077,176	342,376

Remunerations for members of the Board of Directors, Supervisory Board and key management team members as of December 31, 2011 are as follows:

	Fixed remuneration	Variable remuneration	Total
Executive members of the boa rd of directors	1,229,465	-	1,229,465
Non executive members of the board of directors	800,000	-	800,000
Members of the supervisory board	94,750	-	94,750
Key members of the management team	4,264,258	310,493	4,574,750

The company's external auditor is BDO BDC & e Associados, SROC, number 29 in the Chartered Accountants Professional Association and number 1122 in the CMVM's auditors registration, represented by Paulo Jorge de Sousa Ferreira (Chartered Accountant number 781). The Group (or other related entities) paid during 2011 107,625 Euros to the external auditor (and other related companies) for their statutory audit services. The chartered accountant, Grant Thornton & Associados – SROC, received 134,377.5 Euros in 2011.

The board of directors states that, prior to sign up any service to the company's external auditor, makes sure that this will not put their independence at risk (as defined in CMVM's recommendation number C (202) 1873 of May 16, 2004).

As of December 31, 2011, the companies Manuel Fino, SGPS, S.A. and PARINAMA – Participações e Investimentos, SGPS, S.A. hold, respectively, 70.81% and 11% of the Group's share capital. In turn, the company Manuel Fino SGPS, S.A. holds 20.3% of the voting rights at Cimpor - Cimentos de Portugal, SGPS, S.A.. Therefore, pursuant to the provisioned in IAS 34, Cimpor Group can be (indirectly) considered a related party which is why we present its balance as of December 31, 2011 and the transactions occurred during the past year:

Balance as of December 31, 2011	Suppliers	Other
Betão Li z, SA.	3,566,278	-
Agrepor Agregados-Extracção de Inertes, SA.	162,739	-
Ciarga -Argama ssas Secas, SA.	84	-
Predi fino - Sociedade Imobili ária , SA.	7,117	-
Predi ana - Sociedade de Pré-Esforçados, S.A.	-	711
PARINAMA - Pa rticipações e Investimentos, SGPS, SA	5 ,945	-
Ibera - Indústria de Betã o, S.A.	167,621	-
Total	3,909,784	711

Transactions in 2011	Purchases	Other financial income and gains	External Supplies
Betão Li z, SA. Agrepor Agregados-Extracção de Inertes, SA.	8,300,199 834,867	22,424 465	4,842 -
Ciarga -Argamassas Secas, SA. Predi fino - Sociedade Imobili ária, SA.	68 -	- -	- 4,902
PARINAMA - Participações e Investi mentos, SGPS, SA	-	-	67,715
Ibera - Indústria de Betã o, S.A.	136,274	-	-
Total	9,271,408	22,889	77,459

The balances as of December 31, 2010 and transactions during 2010 were as follows:

Balance as of December 31, 2010	Suppliers
Cimpor - Indústria de Cimentos, S.A.	115
Betão Liz, SA.	4,027,692
Agrepor Agregados-Extracção de Inertes, SA.	660,960
Predifi no - Sociedade Imobi liá ria, SA.	1,098
Prediana - Socieda de de Pré-Esforaçados, S.A.	711
PARINAMA - Participa ções e Investi mentos, SGPS, SA	6,050
Total	4,696,626

Transactions in 2010	Other financial Purchases income and gains		External Supplies

Cimbetão - Cimpor Betão de Moçambique, S.A.R.L.	4,43 4	-	-
Betão Li z, SA.	4,386,225	6,594	6,118
Agrepor Agrega dos-Extracção de Inertes, SA.	640,967	2,513	-
Ciarga -Argama ssas Secas, SA.	14,557	-	-
Predi fino - Soci edade Imobil iária , SA.	-	-	11,027
PARINAMA - Pa rticipações e Investimentos, SGPS, SA	-	-	84,448
Total	5,046,183	9,107	101,593

We further state that the above mentioned transactions took place under market's normal conditions.

23. BREAKDOWN OF OTHER OPERATING INCOME AND COSTS

Other operating income are as follows:

Other operating income	31/12/2011	31/12/2010

Own works	12,534,888	14,606,176
Ga ins in fixed tangi ble assets	3,763,977	997,925
Operational subsidies	174,110	12,357
Ajustments reversi on	552,368	343,763
Other operating income and gai ns	15,342,020	11,305,131
Total	32,367,362	27,265,352

Other operating cost are as follows:

Other operating costs	31/12/2011	31/12/2010
Taxes	9,374,260	8,278,216
Bad debts	628,080	1,244,951
Losses i n fixed ta ngible a ssets	2,255,187	1,485,534
Fines	175,245	100,536
Donations	42,815	29,039
Losses i n inventories	156,517	243,342
Penal ties in contracts	2,268,208	2,014,456
Other operati onal costs and losses	7,195,944	8,006,242
Total	22,096,255	21,402,316

24. EMPLOYEES

Average number of employees working for companies included in the Group's consolidation perimeter by full consolidation method, during the financial year ending on December 31, 2011, totalled 5,549:

Directors	Senior management	Middle management	Officers and heads of services	Highly qualified professionals	Semi qualified professionals	Non qualified staff	Apprentices
44	419	304	451	2,551	830	522	428

Average number of employees working for companies included in the Group's consolidation perimeter by the proportional method during 2011, totalled 881:

Directors	Senior management	Middle management	Officers and heads of services	Highly qualified professionals	Semi qualified professionals	Non qualified staff	Apprentices
32	88	82	75	192	163	236	13

Average number of employees working for companies included in the Group's consolidation perimeter by full consolidation method, during the financial year ending on December 31, 2010, totalled 5,952:

Directors	Senior management	Middle management	Officers and heads of services	Highly qualified professionals	Semi qualified professionals	Non qualified staff	Apprentices
34	429	266	469	2,563	1,267	660	264

Average number of employees working for companies included in the Group's consolidation perimeter by the proportional method during 2010, totalled 878:

Directors	Senior management	Middle management	Officers and heads of services	Highly qualified professionals	Semi qualified professionals	Non qualified staff	Apprentices
38	133	71	121	264	131	111	9

25. CONSOLIDATED FINANCIAL RESULTS

Consolidated financial results breakdown for the financial years ending on December 31, 2011 and 2010:

Costs and losses		31/12/2011	31/12/2010
Interest paid		55,587,613	46,484,789
Losses in financial investments in associated companies		500,001	506,765
Forei gn exchange losses		28,411,897	27,354,644
Cash discounts granted		33,383	49,204
Financial appli cations adjustments		48,996	29,285
Other fi nancial costs and losses		19,015,578	16,236,693
Other financial losses		47,509,853	43,669,826
	(1)	103,597,468	90,661,380
Income and gains		31/12/2011	31/12/2010
Interets received		14,441,415	10,446,738
Gains in financial investments in associated companies		665,568	856,114
Income and capital gains from participations		1,484,231	18,379,035
Forei gn exchange gains		34,784,003	26,837,302
Cash discounts obtained		364,475	63,385
Other fi nancial income and gains		58,154	538,821
Other financial gains		35,206,631	27,439,509
	(2)	51,797,844	57,121,396
Financial results	(2)-(1)	(51,799,624)	(33,539,983)

The value of the items "Interest expense" and "Other expenses and financial loss" was restated to December 31, 2010, with the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflects a decrease of 58,371 euros.

The item "Other financial costs and losses" mainly refers to the cost of banking guarantees, arrangement fees and other expenses and commissions charged by financial institutions.

The item "Income and capital gains from equity investments" for the year 2010 is influenced by a capital gain obtained from the alienation of a participation.

Gains and losses from associated companies for the financial years ended December 31, 2011 and 2010:

	31/12/2011	31/12/2010
Losses in financial investments in associated companies:
SDC Emira tes Construction, L.L.C.	32,872	64,706
Grupul Portughez de Constructi i S.R.L.	-	433,479
CFE Indústri a de Condutas, S.A.	37,159	7,466
Alsoma, AEIE	-	640
Traversofer, SARL	2,395	-
GAYAEXPLOR - Constr.e Explor.de Parques Estacionamento, Lda	484	474
Ute Efacec/Self Energy , Ley 18/1982	426,575	-
My Watt, Lda	336	-
Refl exos Púrpura, Lda	180	-
Total	500,001	506,765
Gains in financial investments in associated companies:
Mini Price Hotels (Porto), S.A.	-	8,201
Constructota San José - Ca ldera , S.A.	382,045	408,693
INDÁQUA - Indústri a e Gestão de Água s, S.A.	202,128	435,972
Alsoma, AEIE	45,399	-
Traversofer, SARL	-	3,249
Self Energy Moçambi que, S.A.	35,997	-
Total	665,568	856,114
Gains/ (losses) in financial investments in associated companies:	165,566	349,349

26. INCOME TAX AND DEFERRED TAXES

Grupo Soares da Costa, S.G.P.S., S.A. and its domestic affiliates held directly or indirectly by the Group in more than 90% are taxed for their Legal Person Tax on Income under the Special Scheme for Taxing of Companies Groups (RETGS).

AS for the companies not covered by RETGS, current tax is estimated based on the taxable income under the rules and tax systems in force at each company's country.

As of January 1, 2007, municipalities are entitled to deliberate an annual tax exemption up to 1.5% over the taxable profit subject to tax on Income, thus rising the nominal tax rate to 26.5%.

However, following the publication of Law 12 – A/2010, 30 June, a state exemption has been introduced, covering all taxable persons presenting taxable profit subject to Tax on Income higher than 2 million euros. This state exemption corresponds to 2.5% of the taxable profit over the mentioned limit.

According to the legislation in force in Portugal, income tax declarations 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, when tax benefits have been granted, or when inspections, complaints or objections are in progress, in which cases, depending on the circumstances, the mentioned period may be extended or suspended.

Hence, the Company's tax declarations from 2008 to 2011 may still be subject to review. The board of directors considers that any amendments won't have a significant impact on the consolidated financial statements.

The income tax accounted for December 31, 2011 and 2010 breakdown as follows:

Tax income	31/12/2011	31/12/2010
Income ta x (current)	10,596,163	4,822,422
Deferred tax	(5,849,953)	(4,498,898)
Total	4,746,210	323,524

Reconciliation of profit before tax for the tax period is as follows:

	Tax	Fiscal basis	Amount
Tax and nominal income tax amount	26.50%	7,087,512	1,878,191
State tax surcharge		3,879,317	1,028,019
Autonomous taxation		3,442,230	912,191
Effect from diverge income tax rates			(366, 479)
Subsidiaries with temporary exemption			(3,885,176)
Companies with net losses, that do not calculate deferred taxes		4,161,910	1,102,911
assets		(35,061)	(9, 291)
Reversal of deferred tax assets (extinction loss carry-overs)		5,019,262	1,330,104
Earnings in associated companies (equity consolidated)		(665, 568)	(176, 375)
Non-deductible expenses for tax purposes		2,563,356	679,289
Capital gains on sale of investments		(1,363,269)	(361, 266)
Other tax benefits		(235, 284)	(62, 350)
Taxable dividends and other adjustments		10,101,197	2,676,442
Tax and effective income tax amount	66.97%		4,746,210

Deferred taxes assets and liabilities accounted in Consolidated Financial Position Statement were originated by the following situations:

Deferred taxes assets	31/12/2011	31/12/2010

Losses reported	14,775,540	10,800,070
Fixed assets diverge valuation	5,332,692	5,369,816
Inventories value adjustments	2,153,923	1,729,137
Accounts receivables value adjustments	-	8,808
Financial investments diverge valuation	1,732	1,604
Financial instruments fair value	17,658,225	10,279,765
Others	1,019,218	1,296,516
Total	40,941,330	29,485,716
Deferred taxes liabilities	31/12/2011	31/12/2010

Fixed assets diverge valuation	17,585,484	19,118,942
Inventories value adjustments	116,659	144,096
Non fiscal accepted's provisions	9,471,354	11,063,852
Capital gains with deferred taxes	410,751	427,882
Other	300,011	509,485
Total	27,884,259	31,264,257

The reportable tax losses which caused the deferred taxation assets:

		Limit for		Deferred
Country	Year	Use	Fiscal losses	taxes assets
Portugal
	2011	2015	3,511,537
	2010	2014	2,838,427
	2009	2015	3,412,021
	2008	2014	2,851,195
	2007	2013	2,651,815
			15,264,995	3,761,928
U.S.A.
	2011	2031	11,199,382
	2009	2029	2,840,369
	2007	2027	3,461,540
	2006	2026	907,811
	2005	2025	2,570,889
	2004	2024	4,152,152
			25,132,143	9,954,401
Costa Ri ca
	2011	2014	220,027	76,008
Angol a
	2011	2014	605,497
	2010	2013	1,646,316
	2009	2012	547,802
			2,799,615	979,865
Mozambique
	2010	2015	52,152
			52,152	3,338
Total				14,775,540

According to the applicable legislation, these losses can only be used if the respective companies generate a positive income tax result.

27. EARNINGS PER SHARE

The company's capital consists of 159,994,482 ordinary shares and 5,518 preferential shares without voting rights, with a par value of 1 Euro each.

Holders of preferential shares without voting rights are entitled to a priority dividend on the terms stipulated in 2.7 of the respective issuance prospectus and are listed for trading, at no less than 5% of the respective par value, pursuant to article 341 (2) of the Portuguese Commercial Companies Code.

Earnings per share	31/12/2011	31/12/2010
Conti nued operati ons earnings, net of minorities	2,376,012	15,629,331
Net income attributable to the Group	2,376,012	15,629,331
Number of preferred sha res	5,518	5,518
Number of ordinary shares	159,994,482	159,994,482
Total number of shares	507,292	382,914
Weighted a vera ge number of ordinary shares	159,499,423	159,926,409
Earni ngs a ttri butable to preferred shares	276	276
Continued operations earnings per share
Basic	0.015	0.098
Di luted	0.015	0.098
Earnings per share
Basic	0.015	0.098
Di luted	0.015	0.098

The company does not have convertible debt instruments, meaning the basic result is the same as the diluted result.

28. ASSETS HELD FOR SALE AND ACTIVITIES BEING DISCONTINUED

As of December 31, 2011 there were no assets held for sale or activities being discontinued.

29. GUARANTEES

The detail of bank guarantees and collateral provided by the Group to third parties as of December 31, 2011 are as follows:

	Euro	US dollar	Koanza de Angola	Mozambican metical	S. Tomé dobra	Costa Rica colón	Israelite shekel	Other	Total
Bank guara ntees Collateral	475,679,394 22,644,365	7,240,131 9,660,716	- -	4,229,018 8,106	- 24,734	64,234 -	393,245 -	4,353,884 -	491,959,906 32,337,919
Bank guarantees

Guarantees in respect of construction contracts	279,910,911
Guarantees in respect of concession contra cts	100,972,019
Guarantees given to fina nci al institutions	109,569,185
Other guarantees	1,507,791
Total	491,959,906

The value of guarantees given to financial institutions consist essentially to the bank guarantees from the associated company Scutvias, SA, on behalf of the European Investment Bank in the amount of 80,086,021.95 Euros (part attributable to the Group). The banks involved in the provision of such bank guarantees are coincident with the entities present in the bank syndication process.

30. FINANCIAL RISKS

Foreign Exchange Risk

This risk arises mainly from the international operations of the Group. Operations by some of the Group's companies in foreign markets increase its exposure to the effects of the several currencies change against the Euro. The exchange rate risk management policy followed by the Group aims to minimize the sensitivity of the Group's earnings to exchange rates fluctuations. The Group targets to balance assets and liabilities expressed in the same currency.

Assets and liabilities denominated in foreign currency, converted into Euros as of December 31, 2011, were as follows:

Assets	EUR	USD	AOK	MZM	STD	CRC	ILS	Other	Total		Eliminations Consolidated
Financia l investments	1,170,188,430	74,995,046	-	-	-	-	-	250,937	1,245,434,413	(1,210,134,028)	35,300,385
Customers	229,943,809	312,728,832	-	18,161,314	6,682	-	934,179	14,150,216	575,925,032	(108,111,784)	467,813,248
Associated companies	4,606,219	-	-	-	-	-	-	455,837	5,062,056	(4,114,554)	947,503
Adva nces to suppliers	10,153,325	6,818,150	1,739,621	8,996,924	-	-	-	387,953	28,095,973	(8,496,670)	19,599,303
Adva nces to fixed assets suppliers	5,033	-	-	-	-	-	-	274,746	279,778	-	279,778
Sta te and public bodies	10,557,531	-	68,055	1,770,682	2,072	-	10,705	666,103	13,075,148	-	13,075,148
Other debtors	485,044,630	10,031,785	7,697,443	9,865,390	60,291	504	12,447	5,400,298	518,112,787	(278,975,139)	239,137,648
Securities a nd other treasury	-	277,144	-	-	-	-	-	36,946	314,090	-	314,090
Bank deposits	51,718,462	19,806,676	10,329,644	1,029,483	210,995	24	24,466	1,712,535	84,832,285	-	84,832,285
Ca sh	303,648	255,625	280,715	95,999	370	-	3,277	12,341	951,975	-	951,975
Accruals a nd deferra ls	99,390,356	8,406,612	996,715	1,210,068	7,640	6,565	1,125	580,214	110,599,296	(1,589,887)	109,009,409
Total											971,260,771

Liabilities	EUR	USD	AOK	MZM	STD	CRC	ILS	Other	Total		Eliminations Consolidated
Bank loans	696,165,512	61,672,379	40,407,018	3,093,218	-	-	2,008,107	5,111,139	808,457,373	-	808,457,373
Bonds	97,604,741	-	-	-	-	-	-	-	97,604,741	-	97,604,741
Other sha reholders	15,820	22,571	-	-	-	-	-	3,500	41,891	(9,069)	32,822
Suppliers	209,820,223	85,220,178	9,369,226	9,038,966	6,633	290	167,657	23,486,174	337,109,347	(99,122,464)	237,986,883
Fixed assets suppliers	663,453	-	289,372	-	-	-	-	281,521	1,234,346	(253,945)	980,401
Adva nces from customers	36,353,030	61,356,856	151,895	2,816,641	5,150	-	-	-	100,683,572	(9,240,576)	91,442,996
Adva nces from sales/ revenues	28,758	2,447,060	3,407,556	-	-	-	-	-	5,883,375	-	5,883,375
Financia l lea sing creditors	5,199,865	-	-	-	-	-	-	-	5,199,865	-	5,199,865
Sta te and public bodies	12,513,988	4,164	180,377	1,523,849	14,792	3,801	19,767	1,160,202	15,420,941	-	15,420,941
Other creditors	629,027,403	37,461,603	4,584,100	3,174,436	7	336	1,853,344	30,834,823	706,936,053	(602,032,105)	104,903,948
Derivatives	66,443,764	-	-	-	-	-	-	-	66,443,764	-	66,443,764
Accruals a nd deferra ls	155,092,742	13,051,475	14,016,897	5,728,689	524	364,253	237,197	239,408	188,731,187	(4,688,310)	184,042,877
Total											1,618,399,985

Non-monetary assets and liabilities denominated in foreign currency, converted into Euros as of December 31, 2011, were as follows:

	EUR	USD	AOK	MZM	STD	CRC	ILS	BRL	Total
Assets	711,209,816	31,853,771	37,102,075	1,862,123	4,911,316	1,021,441	4,254,845	216,778	792,432,165
Liabil ities	27,785,072	664,657	201,271	-	78,791	40,668	-	-	28,770,459

Credit Risk

This risk is associated with accounts receivable inherent to the Group's activity. Credit risks at each reporting date are detected by the competent departments. The need to register an impairment loss is determined according to the seniority of the debt, the client's risk profile, previous experience and further circumstances.

As of December 31, 2011 the board of directors strongly believes that the estimated adjustments to the accounts receivable have been adequately represented in the financial statements.

As of December 31, 2011 to the following accounts receivable amounts no adjustments have been registered as collection was considered reasonable:

Maturity	Customers - current account	Customers - other receivables	Customers - doubtful accounts	Total
Performi ng	189,196,247	3,133,963	-	192,330,210
0 to 180 days	74,826,483	-	-	74,826,483
181 to 360 days	41,407,124	-	-	41,407,124
361 to 540 days	13,702,159	-	-	13,702,159
541 to 720 days	13,973,108	-	-	13,973,108
more tha n 720 days	131,558,378	-	15,786	131,574,164
Total	464,663,499	3,133,963	15,786	467,813,248

Debts outstanding for more than 360 days are categorized by type of customer as follows:

Amounts more than 360 days overdue	31/12/2011

Angolan public entities	66,922,792
Angolan private enti ties	21,994,132
Portuguese public entiti es	34,794,691
Portuguese priva te entities	21,149,956
Guinea publ ic entities	2,533,240
Mozambican publi c enti ties	30,858
Mozambican private entities	873,926
S. Tomé public entities	35,880
S. Tomé private enti ties	431,888
US pri vate entiti es	6,671,474
Other pri vate entities	3,794,808
Total	159,233,645

The above figure in category "Angolan Public Entities" include, with reference to December 31, 2011 60.8 million on behalf of an entity with which negotiations are underway with a view to their regularization.

Liquidity Risk

The liquidity risk management policy aims to ensure that at any given moment the profile of the maturity dates of the company's debt matches the capacity to generate cash flow to meet it. The management of liquidity risk therefore includes managing imbalances between the requirements for funds (for operating and financial costs, investments and debt repayment) and the inflows (receipts from customers, disinvestments, and financing commitments from financial entities). On the other hand, the Group adopts measures to prevent this kind of risks through an adequate and timely cash flow management. In order to manage liquidity risk, the Group maintains a balance between the term and flexibility of contracted debt through the use of phased financing which reflects the requirement for funds. In addition, the Group has hot money accounts and overdrafts which avoid (temporary) cash flow problems.

Maturity of the financial liabilities as of December 31, 2011:

Maturity	Loans	Suppliers	Investment suppliers	Financial leasing	Advances from customers	Other	Other liabilities and	Total
2012	307,318,918	227,775,844	980,401	2,810,135	75,655,448	65,469,212	196,547,236	876,557,193
2013	73,102,618	3,908,879	-	1,481,417	20,620,624	4,536,655	-	103,650,193
2014	67,504,205	3,052,791	-	798,011	1,050,299	2,047,264	-	74,452,570
2015	61,200,421	1,801,732	-	76,002	-	503,667	-	63,581,822
2016	33,769,761	1,447,636	-	34,300	-	503,667	156,822	35,912,186
2017	195,225,120	-	-	-	-	3,647,314	-	198,872,434
After 2017	205,791,164	-	-	-	-	5,799,838	81,666,841	293,257,843
Total	943,912,207	237,986,882	980,401	5,199,865	97,326,370	82,507,616	278,370,899	1,646,284,241

According to the Statement of Financial Position, current liabilities amount to 876.6 million Euros and current assets to 826.5 million Euros, corresponding to a current ratio of 0.94 overall.

In this context, we provide the following additional information:

a) current liabilities include bank loans, in the form of escrow accounts and commercial paper amounting to 186 million Euros that historically have assumed features of automatic renewal at maturity, corresponding to the structural financial support to the Group's operations, which we expected to maintain;

b) One of the strategic guidelines set out the changes made in late 2011 to the strategic plan, is the disposal of mature assets and / or non-strategic, namely from the area of concessions, to increase liquidity and reduce indetness level;

c) In addition, the Group's management has ongoing discussions with major financial credit institutions to the adequacy of the maturity of indebtedness under the general lines of the plan.

31. SUBSEQUENT EVENTS

As a relevant fact occurred after the reference date of the accounts and reported as material information through the website of CMVM, the Company informed as of March 21, 2012, that through the concessionaire company "Elos – Ligações de Alta Velocidade, S.A.", was instructed that the Court of Auditors has refused the concession contract of the high speed railway (HRS) stretch between Poceirão and Caia, part of the Lisboa-Madrid line. The subsidiary Soares da Costa Concessões, SGPS, SA has in that concessionaire company a 16.304% stake. The 40-year concession, involved a total investmet of 1,494,881,960 Euros, with a value of 1,440,749,262 Euros to the project, expropriation and construction, to be run by a complementary group of companies "LGV-Engineering and Construction High Speed Lines, ACE", led by Sociedade de Construções Soares da Costa SA, also a subsidiary of the Group, with a shareholding of 17.25%.

This subsequent event is estimated to have no impacts on the financial statements as of December 31, 2011.

32. CONTINGENCIES

Dispute between Quinta da Murtosa / Sociedade de Construções Soares da Costa / Porto Municipality

The subsidiary Sociedade de Construções Soares da Costa, SA maintains an account receivable from "Quinta da Murtosa – Empreendimentos Imobiliários, Lda." of 5,985,575 Euros, disclosed in the annexed Consolidated Financial Position Statement under "Clients – Current Account". This is related to a promissory contract of purchase and sale for a plot of land that should have been handed over by the Porto Municipality within the scope of a protocol celebrated on December 7, 2000. The payment of this account receivable is dependent of the resolution of litigation process between Sociedade de Construções Soares da Costa, SA, Quinta da Murtosa – Empreendimentos Imobiliários, Lda, and the Oporto Municipality. Simultaneously, Quinta da Murtosa has filed a litigation process against Sociedade de Construções Soares da Costa, SA demanding the return of the land that is the object of the above-mentioned promissory contract.

On January 2005, the subsidiary company Sociedade de Construções Soares da Costa, SA has filed a proceedings against Porto Municipality demanding the return of the land that is the object of the litigation. Alternatively, should the land not be handed over, Soares da Costa demands the payment of 7,182,689 Euros plus interests. This case has already been sentenced and a favourable decision was awarded to Soares da Costa already passed to res judicata and since the Municipal City Council

of Oporto did not spontaneously execute this sentence the relevant executive action has been filed and proceedings are ongoing.

As the board of directors does not believe that the resolution of this problem will have any impact on the annexed Consolidated Financial Statements, no provision has been registered.

Red Line of the Tel Aviv Light Rail Project, Israel

During the execution of the concession contract a dispute involving the grantor (State of Israel) and Metropolitan Transportation Solutions (MTS), the concessionaire company in which the Group holds a 20% stake, arose as previously disclosed to the market.

After the signature of the referred contract, which took place on May 2007, and as provisioned in the contract, the actions leading to the "Financial Close" and the early performance of the project works started. Activities leading to the "Financial Close" have been disturbed by the global financial crisis which determined the need for some amendments to the contractual provisions. Those amendments have been exhaustively negotiated by the grantor and the concessionaire along with financing entities.

During the 3rd quarter of 2010, MTS has been confronted with the decision of the grantor to terminate the contract due to alleged breach of contract, unless MTS accepted a new set of compensation for the grantor along with other conditions.

The concessionaire and its shareholders have decided to reject that position by the grantor as well as the conditions demanded - which would render the project inoperable - and submit the dispute to an Arbitration Court, implementing the required actions for that purpose.

At the moment the arbitration process is ongoing in accordance with the international standards. MTS has filed a complaint in the Arbitrage Court for damage sustained and loss of profit, to which the State of Israel has in turn filed a complaint with the amounts included in the guarantees undertaken by the concessionaire' shareholders. The outcome of the dispute is expected during 2011.

MTS as well as its shareholders have already expressed their conviction, with which the board of directors agreed, that the conduct by the grantor is illegal and that the arbitration award will be favourable to their interests.Linha Vermelha Metro de Tel Aviv, Israel.

The arbitration proceedings have been occuring within the normal standards and with the typical length of such processes. The State has used all legal mechanisms at their disposal to delay the process as possible, which is why only the first hearings will take place in May 2012, at a date yet to be defined.

Consolidated assets that are exposed to this risk amount to 13.0 million Euros, with the sums claimed under that dispute standing far beyond that figure.

MTS and its shareholders have already expressed the conviction, that the board of directors shares, that the process is unfolding with the necessary independence and respect for international canons, so still awaiting an outcome to the process during the year 2012.

33. CHANGES IN POLICY, AND ERROR ESTIMATES

During the year 2011, with the exception of change in accounting policy on the measurement of bank loans at amortized cost and the classification of assets and current liabilities versus non-current, there were no changes in accounting policies, compared to those considered in the preparation of financial information for the year 2010 were not recorded material errors relating to prior years (see note 2.1.).

34. ACCOUNTS RELEASE'S APPROVAL

At a meeting held on April 19, 2012, the board of directors authorised the release of these consolidated financial statements.

IV – INDIVIDUAL FINANCIAL STATEMENTS

INDIVIDUAL FINANCIAL POSITION STATEMENT DECEMBER 31, 2010 AND 2011

A S S E T S	Notes	31/12/2011	31/12/2010 Restated	31/12/2010
NON CURRENT
Intangible assets		0	0	0
Fixed tangible assets:
Transport equipment	4	24,527	0	0
Administrative equipment	4	12,759	12,771	12,771
		37,285	12,771	12,771
Financial investments:
Capital participations in subsidiaries	5	260,951,074	261,151,074	261,151,074
Loans to associated companies	5	210,227,913	134,984,138	134,984,138
Other financial investments	5	227,180	276,176	276,176
Financial investments ongoing	5	50,000	50,000	50,000
		471,456,167	396,461,388	396,461,388
Deferred taxes (assets)	21	4,120,681	4,104,762	4,104,762
Total non current assets		475,614,133	400,578,921	400,578,921
CURRENT
Accounts receivable:
Trade debtors	8	2,557,578	876,249	876,249
Receivables from public entities	8	759,930	2,301,471	2,301,471
Group companies, subsidiaries and associated companies	8	62,246,671	69,744,350	69,744,350
Other	8	577,531	577,824	577,824
		66,141,710	73,499,894	73,499,894
Other current assets	9	435,594	884,988	3,495,928
Cash and equivalents	10	78,233	11,492,163	11,492,163
Total current assets		66,655,537	85,877,044	88,487,984
Total assets		542,269,671	486,455,965	489,066,905

INDIVIDUAL FINANCIAL POSITION STATEMENT DECEMBER 31, 2010 AND 2011

				(Euro)
SHAREHOLDERS EQUITY and LIABILITIES	Notes	31/12/2011	31/12/2010 Restated	31/12/2010
SHAREHOLDERS' EQUITY
Share capital	11	160,000,000	160,000,000	160,000,000
Own shares		(172,526)	(197,780)	(197,780)
Reserves and retained earnings
Legal reserves		7,423,896	6,074,579	6,074,579
Other reserves		2,501,550	2,617,633	2,617,633
Retained earnings		42,469,535	19,624,390	19,487,856
Adjustments in financial assets		(660,530)	(660,530)	(660,530)
Net income for the year		877,728	27,683,563	27,491,412
Total shareholders' equity		212,439,652	215,141,855	214,813,170
LIABILITIES
NON CURRENT
Loans:
Bonds	12	97,604,741	97,204,246	100,000,000
Bank loans	12	14,112,455	19,750,000	19,750,000
		111,717,196	116,954,246	119,750,000
Accounts payable:
Investment' suppliers		9,963	0	0
		9,963	0	0
Derivatives	13	31,950	0	0
Total non current liabilities		111,759,109	116,954,246	119,750,000
CURRENT
Loans:
Bank loans	12	45,833,053	38,114,733	38,277,995
		45,833,053	38,114,733	38,277,995
Accounts payable:
Suppliers		1,425,965	781,297	781,297
Investment' suppliers		11,634	0	0
Payables to public entities	14	6,204,106	1,772,124	1,772,124
Group companies, subsidiaries and associated companies	14	163,745,638	110,942,692	110,942,692
Other	14	84	2,036,553	2,036,553
		171,387,427	115,532,666	115,532,666
Derivatives	13	31,726	0	0
Other current liabilities	15	818,703	712,465	693,074
Total current liabilities		218,070,909	154,359,864	154,503,735
Total liabilities		329,830,018	271,314,110	274,253,735
Total shareholders's equity and liabilities		542,269,671	486,455,965	489,066,905

SEPARATE INDIVIDUAL INCOME STATEMENT FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010

				(Euro)
			2010
INCOME STATEMENT	Notes	2011	Restated	2010
Turnover	16	6,235,258	4,003,279	4,003,279
Other operating income
Other		251,739	1,950	1,950
Operating income		6,486,997	4,005,229	4,005,229
External supplies	17	(2,618,182)	(2,184,521)	(2,184,521)
Staff costs	19	(4,213,849)	(4,277,361)	(4,277,361)
Depreciation, amortisation and imparity losses		(16,454)	(12,311)	(12,311)
Other operating costs
Taxes		(234,215)	(654,757)	(654,757)
Other		(137,265)	(45,252)	(45,252)
Operating costs		(7,219,966)	(7,174,202)	(7,174,202)
Operating result		(732,969)	(3,168,973)	(3,168,973)
Interest received		12,760,013	6,434,540	6,434,540
Interest paid		(14,578,249)	(9,472,692)	(9,664,842)
Net financing costs		(1,818,235)	(3,038,151)	(3,230,302)
Gains in associated companies		3,742,412	33,761,739	33,761,739
Other financial gains		604,856	487,663	487,663
Other financial losses		(1,771,192)	(1,765,270)	(1,765,270)
Other financial gains and losses		2,576,076	32,484,131	32,484,131
Financial result	20	757,841	29,445,980	29,253,830
Earnings before taxes		24,872	26,277,007	26,084,857
Income tax	21	852,856	1,406,555	1,406,555
Net income		877,728	27,683,563	27,491,412
Earnings per share:
Basic	22	0.005	0.173	0.172
Diluted	22	0.005	0.173	0.172

STATEMENT OF INDIVIDUAL COMPREHENSIVE INCOME FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010

	2011	2010 Restated	2010
Net profit for the period	877,728	27,683,563	27,491,412
Other comprehensive income
Exchange difference stemming from transposition of financial
statements expressed in foreign currencies
Variation on fair value of derivatives	(47,757)	-	-
Other variations
Total comprehensive income for the period	829,971	27,683,563	27,491,412

STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010

	Equity capital	Own shares	Reserves and retained earnings	Coverage derivatives	Other	Total equity
Balance as of January 1,
2011	160,000,000	(197,780)	56,000,165	-	(660,530)	215,141,855
Dividends	-	-	(3,463,847)	-	-	(3,463,847)
Own shares	-	25,254	(93,580)	-	-	(68,326)
Other	-	-	-	-	-	-
Integrated earnings Balance as of December 31,	-	-	877,728	(47,757)	-	829,971
2011	160,000,000	(172,526)	53,320,465	(47,757)	(660,530)	212,439,652

(Euro)

	Equity capital	Own shares	Reserves and retained earnings	Coverage derivatives	Other	Total equity
Balance as of January 1, 2010 restated	160,000,000	-	35,333,501	-	(660,530)	194,672,970
Dividends	-	-	(6,944,036)	-	-	(6,944,036)
Own shares	-	(197,780)	(72,862)	-	-	(270,642)
Other	-	-	-	-	-	-
Integrated earnings	-	-	27,683,563	-	-	27,683,563
Balance as of December 31, 2010 restated	160,000,000	(197,780)	56,000,165	-	(660,530)	215,141,855

INDIVIDUAL CASH FLOWS STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 2011 AND 2010

	Notes	2011		2010
Operating activities:
Receipts from customers		5,925,648		4,895,148
Payments to suppliers		(1,976,444)		(2,340,377)
Payments to staff		(4,128,095)		(4,293,221)
		(178,891)		(1,738,451)
Payments/ receipts of income tax		3,102,830		(331,936)
Other payments/ receipts related with oper.activities		(2,488,421)		(2,817,745)
Cash flow from operating activities		614,409	435,518	(3,149,681)	(4,888,131)
Investment activities:
Receipts from:
Financial investments	8	218,752,353		139,184,335
Dividends		3,740,967	222,493,320	16,727,649	155,911,984
Payments related with:
Financial investments	8	306,826,045		143,325,561
Fixed tangible assets		320	306,826,364		13,027 143,338,588
Cash flow from investment activities			(84,333,044)		12,573,397
Financing activities:
Receipts from:
Loans		412,664,573		554,975,729
Sale of own shares		670,031		464,071
Interest received		12,166,120	425,500,724	5,720,701	561,160,500
Pagamentos respeitantes a:
Loans		334,928,966		547,740,450
Financial leasing contracts		10,872		328
Dividends		3,461,357		6,939,696
Acquisition of own shares		810,073		734,713
Interest paid		13,599,977	352,811,245	8,730,770	564,145,956
Cash flow from financing activities			72,689,479		(2,985,455)
Change in cash and equivalents			(11,208,047)		4,699,810
Foreign exchange differences effect			(205,882)		(188,485)
Cash and equivalents, beginning of the period			11,492,163		6,980,837
Cash and equivalents, end of the period			78,233		11,492,163

ANNEX TO THE INDIVIDUAL CASH FLOW STATEMENTS

During 2011, the following cash and equivalents operations occurred:

Payment in cash and equivalents of 1,930,499 euros concerning the acquisition of the company Energia Própria, SGPS, SA;
Receipt by cash and equivalents of 51,444 euros concerning the sharing in the settlement of the company Soares da Costa Ambiente e Energia, SGPS, SA;
Receipt by cash and equivalents of 34,778 euros concerning the sharering in the settlement of the company Soares da Costa Desenvolvimento, SA;
Receipt by cash and equivalent of dividends of 3,659,000 euros paid by the company Soares da Costa Construção, SGPS, SA;
Receipt by cash and equivalent of dividends of 81,967 euros paid by the company Soares da Costa Serviços Partilhados, SA;
Payment in cash and equivalents of dividends of 3,461,356 euros.

Breakdown of Cash and Equivalents

	31/12/2011	31/12/2010
Cash	638	1,168
Banki ng deposits (imedia tely availa ble)	77,595	11,490,995
Cash equivalents	-	-
Cash and equi va lents	78,233	11,492,163
Trada ble securities	-	-
Cash in the ba lance	78,233	11,492,163

The receipts/ payments of loans – financing activities – include successive settlements and new issues of commercial paper issues, totalling 64,000,000 euros.

INDIVIDUAL ACCOUNTING POLICIES AND EXPLANATORY NOTES AS OF DECEMBER 31, 2011

1. INTRODUCTORY NOTE

Identifying elements:

Company name: Grupo Soares da Costa S.G.P.S., S.A.

Registered at the Commercial Registry Office of Oporto and Tax Number: 500 265 763

Head Office: Rua de Santos Pousada, 220 4000-478 PORTO

Activity: Grupo Soares da Costa, S.G.P.S., S.A. is the parent Company of Soares da Costa Group.

The company has been incorporated on 02 June 1944 as a limited business corporation named "Soares da Costa, Lda", which later, on 01 May 1968, became a joint stock company by deed at a notary public office, under the corporate name of "Sociedade de Construções Soares da Costa, S.A.". This company "operated in the civil construction and public works industry, in related activities and in the acquisition and disposal of real estate assets".

On 30 December 2002, after the transfer of its direct productive activities, namely in the construction business, and by a public deed celebrated at the 4th Notary Public Office of Porto, "Sociedade de Construções Soares da Costa, S.A." changed its company object to "Management of shareholdings as an indirect way of carrying out economic activities" and adopted its current name "Grupo Soares da Costa, S.G.P.S., S.A.".

Figures mentioned in Notes are presented in Euro units.

2. ACCOUNTING REFERENCE BASIS USED IN THE PREPARATION OF THE FINANCIAL STATEMENTS

The company is an integral part of the consolidation group whose parent company - Grupo Soares da Costa, SGPS, SA has been drawing up consolidated accounts since 2004 in accordance with the International Financial Reporting Standards (IAS/IFRS) as adopted in the European Union.

Therefore, under the provisions of no 1 of article 4 of decree law 158/2009, as of 13 July, it has adopted the drawing up of the individual financial reports in accordance with those international standards.

The company changed the accounting policy on bank loans 2011. Up to 2010 loans were presented at their nominal or face value, with the deferral of the linear initial burden. In 2011 loans are measured at amortized cost (note 3.3 c)), thus fulfilling the stipulated in IAS 39 and IAS 32.

In accordance with IAS 8, the company restated the financial statements for 2010. Reconciliation of equity and net income for 2010 is as follows:

Shareholders equity as of Ja nuary 1, 2010	194,536,436
Adjustment from i nterest pai d	136,535
Shareholders equity as of January 1, 2010 - restated	194,672,970
2010's net income	27,491,412
Adjustment from i nterest pai d	192,150
2010's net income - restated	27,683,563

3. MAIN ACCOUNTING POLICIES

The main accounting policies adopted in the preparation of the financial statements are as follows:

3.1. PRESENTATION BASIS

The financial statements assume the Company's continuity and were compiled from the accounting records of the company, which comply with the International Standards on Financial Reporting as adopted in the European Union, in force for the financial year starting on 01 January 2009, from which date the Company began applying IAS/IFRS.

The Company's Board of Directors believes that the attached financial statements and subsequent notes are a fair representation of the financial information.

For the purpose of these financial statements, the company has not implemented any standards or interpretations that have been issued by IASB in a subsequent date.

3.2. FIXED TANGIBLE ASSETS

Tangible fixed assets have been recorded at acquisition cost or at a reassessed acquisition cost taking into consideration accumulated depreciations and impairment losses.

Depreciations are calculated according to a straight line method and on a monthly basis, in accordance with the following estimated useful lives:

	Useful life
Transport equipment	4
Administrati ve equipment	3 - 10

Gains or losses resulting from the sale or disposal of tangible fixed assets are determined through the difference between the alienation price and the net accounting value at the time of the sale/disposal, and are registered in the Income Statement as "other income and gains" or "other expenses and losses".

3.3. FINANCIAL ASSETS AND LIABILITIES

a) Financial Investments

Financial investments are recognized at the date the risks and rewards inherent to them are transferred. They are initially registered at acquisition price, i.e. the fair value of the price paid.

Investments are evaluated when there are signs that assets' value might be subject to impairment losses. Any impairment losses found are registered as costs at the income statement.

Financial investments are classified into investments held until maturity and investments evaluated at fair value through results.

Following the initial recognition, investments stated at fair value through results are re-evaluated at their fair value, without deducting any transaction expenses that might have been incurred on the sale. Investments in Equity instruments not listed in regulated financial markets, and for which fair value cannot be reliably estimated, are accounted at acquisition cost deducted from eventual impairment losses.

Financial investments in both group and associated companies are registered at acquisition cost minus impairment losses, if applicable.

Gains or losses arising from a change of the fair value of investments evaluated at fair value through results are registered at the Income Statement for the financial year.

Company has decided, at the date of the transition to IFRS, to measure the Financial Investments at their acquisition cost, according with the Generally Accepted Accounting Principles previously used, using such amount as the cost considered at that date, in accordance with the option provisioned in IFRS 1.

b) Accounts receivable

Accounts receivable are registered at their nominal value minus any impairment losses, recognised under "Impairment losses" in accounts receivable, so that they reflect the realisable net value.

c) Loans

Loans are registered as liabilities at their amortise cost value (effective interest rate method).

The costs associated with the issue of such loans are recorded as a deduction from debt and recognized over the life of the loan, according to the effective interest rate method.

Financial costs associated with interests and similar costs (namely stamp duty), are registered at the Income Statement according to the Matching Principle, with any amounts due and not paid at the date of the Consolidated Financial Position Statement being classified under "Other current liabilities".

d) Accounts payable

Accounts payable are registered at their nominal value.

e) Cash and equivalents

The amounts included under "Cash and equivalents" correspond to cash, bank deposits and term deposits and other short term cash applications.

3.4 LEASES

Lease contracts are classified as:

Financial leases if all risks and advantages inherent to ownership are substantially transferred;
Operational leases if all risks and advantages inherent to ownership are not substantially transferred.

Classification of leases as financial or operational is decided in accordance with the substance and not the form of the contract.

The assets acquired under finance lease contracts are recorded at fair value in the assets and their responsibilities in the liabilities. Depreciation of these assets is calculated in accordance with that described in 3.2. above, and are recorded in depreciation for the year.

The capital included in the rent paid is recorded as a reduction of those responsibilities and interest included in those revenues are recorded as expenses in the financial year to which they relate.

In the case of operational leases, rents due are recognised as a cost in the Consolidated Income Statement throughout the period of the leasing contract under "External supplies and services".

3.5. FINANCIAL COSTS IN LOANS OBTAINED

Financial costs related to loans obtained are generally recognised as a cost according to the Matching Accounting Principle. Pursuant to the terms of IAS 23, financial costs from loans associated with the acquisition, construction or production of fixed assets, or associated with real estate projects classified under inventories are capitalised and comprised in asset's cost. Capitalisation of these charges begins once preparation for the construction activity or development of the asset has begun, and is interrupted once the asset production ends, or when the project in question is suspended.

3.6. INCOME TAX

Current income tax is calculated based on the taxable profits in accordance with the existing taxation rules. Deferred taxes refer to the temporary differences between the accounting and figures for tax purposes in terms of assets and liabilities.

Deferred taxes assets and liabilities, are calculated and annually assessed using the tax rates expected to be in force at the reversion date of temporary differences.

Deferred taxes assets are registered when there are reasonable prospects of sufficient taxable income for them to be used. At the closing date of the Consolidated Financial Position Statement, the temporary differences underlying assets for deferred taxes are re-assessed in order to recognise assets for deferred taxes not previously registered as those failed to meet the conditions for registration, and/or to reduce their amount according to the current expectations of future recovery. Deferred taxes are registered as expense or income in each year, except if they came from figures registered directly in equity, in which case deferred tax is also registered under the same item.

3.7. FINANCIAL POSITION STATEMENT

Realisable assets and payable liabilities, to be due past the closing date of Consolidated Financial Position Statement, are accounted as non current assets and liabilities, respectively.

3.8. RECOGNITION OF EXPENSES AND INCOME

Services revenues, are generally accounted when they occur.

Financial income from delayed payment by customers is accounted when there is significant evidence that they are receivable.

Dividends are accounted as income in the financial year they are attributed.

The Company accounts its income and expenses on an accrual basis: income and expenses are recognised when generated, regardless of the moment at which they are received or paid. The differences between the amounts received and paid and the corresponding income and expenses generated are registered under "Other current assets" or "Other current liabilities", depending on the nature of the difference.

3.9. BALANCES AND TRANSACTIONS IN FOREIGN CURRENCY

Foreign currency transactions (non-Euro), are registered at the exchange rates in force at the time of each transaction. On each balance date, monetary assets and liabilities expressed in foreign currency are converted to Euros using the rates in force at that time.

The figures included in the Financial Position Statement were translated into Euros using the following:

	Average foregn exchange rate (buy/ sell)
		31/12/2011	31/12/2010
US dollar	EUR/USD	1.2939	1.3362
Angol an kwanza	EUR/AOA	122.55	121.60
Bra zil ian real	EUR/BRL	2.4159	2.2177

3.10. IMPAIRMENT OF NON CURRENT ASSETS

An assessment of impairment is made at the time of each balance, and whenever an event or change in circumstances signals that the figure registered for the asset may not be recovered.

Whenever the asset amount is higher than its recoverable value, it is recognised an impairment loss, which is registered in the Consolidated Income Statement.

3.11. CONTINGENT ASSETS AND LIABILITIES

Contingent liabilities are not recognised in the Financial Statements, but are disclosed in the Explanatory Notes to the accounts, unless the possibility of outflow is remote.

Contingent assets are not recognised in the Financial Statements, but are disclosed in the Explanatory Notes to the accounts, when it is likely to occur a future economic inflow.

3.12. SUBSEQUENT EVENTS

Events occurring after the reporting date, which provide additional information on the conditions existing at that date, are reflected in the financial statements. Events subsequent to the reporting date which provide information on conditions occurring after that date, if material, are disclosed in the Financial Statements.

3.13. DERIVATIVES

The company contracts derivative financial instruments to hedge financial risks to which is exposed, particularly those arising from changes in interest rate, not using derivative instruments for trading purposes.

Derivative financial instruments are measured at fair value. The recognition method depends on the nature and purpose of the contract.

The possibility of classify a derivative instrument as a hedging instrument complies with the provisions of IAS 39, particularly regarding their documentation and effectiveness.

The criteria used to classify derivatives as hedging instruments of cash flows are as follows:

It is expected that the hedge is highly effective in offsetting changes in cash flows attributable to the hedged risk;
The effectiveness of the hedge can be reliably measured;
Is there adequate documentation of the transaction to be covered at the beginning of the coverage;
The covered transaction is highly probable.

Changes in the fair value of financial instruments designated as hedging of "fair value" are recognized as financial income of the period, as well as changes in fair value of the asset or liability subject to that risk.

Changes in the fair value of derivative instruments designated as hedging of "cash flow" are recognized in "Reserves of coverage transactions" in its effective component, and in the financial results in its non-effective component. The amounts recorded under " Reserves of coverage transactions" are transferred to the income statement in the period when the hedged item also impacts results.

Hedge or coverage accounting is discontinued when the hedging instrument reaches maturity, it is sold or exercised, or when the hedging relationship ceases to meet the requirements of IAS 39. In situations where the derivative no longer qualifies as a hedging instrument, the fair value differences accumulated and deferred in equity under the caption "Reserves of coverage transactions" are transferred to the income statement.

The derivative instruments that are contracted with the aim of carrying out economic hedges and that do not meet all the provisions of IAS 39 (Financial Instruments: Recognition and Measurement) regarding the possibility of qualifying as hedges for accounting, the corresponding changes in fair value are recognized in the income statement for the period they occur.

3.14. OWN SHARES

Own shares are recorded at acquisition value as a deduction to equity. Gains or losses incurred on the sale of own shares are registered in the "Reserves and retained profits" account.

3.15. RISK MANAGEMENT

During its activity the company is exposed to a variety of risks: market risk (including exchange rate and interest rate risk as well as price risk), credit risk and liquidity risk. The global risk management program focuses on the unpredictability of the financial markets and seeks to minimize its adverse effects on the company's financial performance.

Exposure to credit risk results from the accounts receivable related with usual activity, being the maximum exposure to the credit risk the nominal value of the accounts receivable.

There is no significant concentration of credit risk as of December 31, 2011.

3.16. VALUE JUDGMENTS, CRITICAL ASSUMPTIONS AND MAJOR SOURCES OF UNCERTAINTY ASSOCIATED WITH ESTIMATES

In preparing the financial statements some judgments and estimates were made and used and different assumptions that affect the value of assets and liabilities, as well as the income and expenses in the period.

The estimates and underlying assumptions were determined based on the best knowledge existing at the date of approval of the financial statements of events and transactions in progress, as well as on the experience of past/ current events. However, situations that may occur in subsequent periods and that are not foreseeable at the date of approval of financial statements were not considered in these estimates. Changes to estimates that occur after the date of the financial statements will be corrected prospectively. For this reason and given the degree of uncertainty, the actual results of the transactions in question may differ from the corresponding estimates.

4. TANGIBLE FIXED ASSETS

a) Gross Assets

Movement in gross value of tangible fixed assets:

Opening		Transfers and	Closing
Fixed tangible assets	balance	Increases	Disposals	write off's	balance
Transportation equipment	500	31,818	-	-	32,318
Admi nistra tive equi pment	2,363,320	9,150	-	(2,223)	2,370,247
Total	2,363,820	40,968	-	(2,223)	2,402,565

b) Accumulated Depreciations

Movement in accumulated depreciations of tangible fixed assets:

Fixed tangible assets	Opening balance	Increases	Cancellation and reversal	Closing balance
Transportation equipment	500	7,292	-	7,792
Administrati ve equipment	2,350,549	9,163	(2,223)	2,357,488
Total	2,351,049	16,454	(2,223)	2,365,280

5. FINANCIAL INVESTMENTS

a) Gross Assets

Movement in the gross value of financial investments:

Financial investments	Opening balance	Increases	Disposals	Transfers and write off's	Closing balance
Fina nci al investments:
Equi ty stakes in subsi diaries	277,570,120	-	-	(200,000)	277,370,120
Loans to subsidi aries	134,984,138	75,243,775	-	-	210,227,913
Other financia l invesments	643,764	-	-	-	643,764
Fina nci al investments i n progress	50,000	-	-	-	50,000
Total	413,248,022	75,243,775	-	(200,000)	488,291,797

The amount recorded in column "Transfers and write off's" refers to the write off of the shares in Soares da Costa – Desenvolvimento, SA and Soares da Costa Ambiente e Energia, SGPS, SA. by dissolution. Movement in fair value adjustments:

Fair value adjustments	Opening balance	Increases	Reductions	Closing balance
Equi ty stakes in subsi diaries	16,419,046	-	-	16,419,046
Other financia l invesments	367,588	48,996	-	416,584
Total	16,786,634	48,996	-	16,835,630

The amount of 16,419.046 euros refers to the adjusted value of capital share in "Soares da Costa Imobiliária SGPS, S.A." and "Soares da Costa Indústria SGPS, S.A.", of 16,000,000 and 419,046 respectively, as a way to correct the differences between the accounting value and the market value, being the reference or "proxy" the shareholders' equity (IAS) of Soares da Costa Imobiliária SGPS, S.A. and the individual shareholders' equity (IAS) of Soares da Costa Indústria SGPS S.A.

6. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATED COMPANIES

As of December 31, 2011 the Group had direct stakes in the following companies:

Company	Head offices	Financial Pos. Statemet value as of Dec 31, 2011		Participation Shareholders equity	Net income 2011
Group companies:
Soares da Costa Cons trução, SGPS, SA	Rua de Santos Pous ada, 220 4000 - 478 - Porto	143,808,449	100.000%	153,876,362	4,129,545
Soares da Costa Imobil iária, SGPS, SA	Rua de Santos Pous ada, 220 4000 - 478 - Porto	83,393,057	100.000%	86,691,207	(314,273)
Soares da Costa Conces s ões , SGPS, SA	Rua de Santos Pous ada, 220 4000 - 478 - Porto	25,967,527	100.000%	11,215,160	(8,080,531)
SCSP-Soares da Costa Serviços Partilhados , S.A. Rua de Santos Pous ada, 220	4000 - 478 - Porto	1,293,416	99.960%	1,447,702	328,708
EnergiaPrópria,SGPS, SA.	Es trada de Tal aíde, Lote 27 2785-734 - Talaíde	6,488,625	57.260%	4,653,314	(1,956,309)

7. FINANCIAL AND OPERATIONAL LEASING

Financial Leasing

The company has fixed assets included in the balance under financial lease. As of December 31, 2011 the book value of these assets is as follows:

		Cumulated
Financial leasing	Gross assets	Depreciation	Net assets
Transport equipment	31,818	7,292	24,527
Total	31,818	7,292	24,527

The responsibility for these contracts is as follows:

Short term	11,634
Medium and long term	9,963

The reconciliation between the total of future minimum payments for leases on the balance sheet date and their present value, for periods, is as follows:

	31/12/2011
Minimum payments of financial leasings:
2012	12,729
2013	10,277
	23,006
Interests	1,408
Net present value of minimum
payments of financial leasings:	21,597
Current	11,634
Non current	9,963

The financial leases bear interest at market rates and have periods of defined useful life. As of December 31, 2011 there are no contingent rents and restrictions relating to dividends (or any additional debt) associated with the leasing contracts in force.

Operational leasing

Expenses with operating lease agreements amounting to 201,286 euros were recognized in 2011.

Rents on operating lease agreements (fixed rents) maintained by the company as of December 31, 2011, mainly referring to operating lease of vehicles, have the following maturity profile:

Maturity
2012	191,202
2013	100,400
2014	45,144
2015	10,207
Total	346,953

8. BREAKDOWN OF ACCOUNTS RECEIVABLE

As at December 31, 2011 and December 31, 2010 breakdown was as follows:

Accounts receivable	31/12/2011	31/12/2010
Customers - current account	2,557,578	876,249
Customers	2,557,578	876,249
Group compa nies	50,099,584	60,418,121
Associated compani es	80,747	59,656
Special regime for the taxati on of corporate groups	12,066,340	9,266,574
Group and associated companies	62,246,671	69,744,350
Other	577,531	577,824
Fair val ue adjustments	0	0
Other accounts receivable	577,531	577,824

During 2011, income resulting from financial investments amounted to 218,752,353 euros, while the financial investments payments summed up to 306,826,045 euros.

"State and other public bodies" account breakdown as of December 31, 2011 and was as follows:

	31/12/2011	31/12/2010
Income tax	759,930	2,301,471
Total	759,930	2,301,471

9. BREAKDOWN OF OTHER CURRENT ASSETS

Other current assets	31/12/2011	31/12/2010
Accrued income	71,845	48,091
Deferred costs	363,749	836,897
Total	435,594	884,988

The value of the item "Deferred costs" was restated to December 31, 2010, with the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflects a decrease of 2,610,940 euros. On December 31, 2011 and 2010 these items have the following decomposition:

	31/12/2011	31/12/2010
Accrued income
Interest to receipt	71,845	48,091
Total	71,845	48,091
Deferred costs
Financing operations setting costs	304,313	778,752
Insurances	35,828	35,049
Other deferred costs	23,608	23,097
Total	363,749	836,897

The setting costs with financing operations are mainly related with commercial paper issues, to be deferred by the several settlement deadlines.

10. CASH AND EQUIVALENTS

As of December 31, 2011 and 2010 cash and equivalents breakdown was as follows:

	31/12/2011	31/12/2010
Cash	638	1,168
Banki ng deposits (i media tely availa ble)	77,595	11,490,995
Cash equivalents	-	-
Ca sh and equivalents	78,233	11,492,163
Trada ble securities	-	-
Cash in the ba lance	78,233	11,492,163

11. COMPOSITION OF SHARE CAPITAL AND RESERVES

The company's share capital amounts to 160,000,000 euros, being represented by 160,000,000 shares, with a nominal value of 1.00 Euro, of which 159,994,482 are ordinary shares and 5,518 are non-voting preferred shares with the right to receive a preferential dividend and preferential reimbursement of the respective nominal value if the company declares bankruptcy. Investifino – Investimentos e Participações SGPS, S.A. holds 70.8142% of the Company's share capital, corresponding to 113,302,682 shares granting 71.042% of voting rights as of December 31, 2011. In 2011, the movements related with own shares were as follows:

Amount Opening ba lance 382,914 382,914 (185,134) 197,780 Acquisitions 1,847,588 1,847,588 (1,037,515) 810,073 Ali enati ons (1,723,210) (1,723,210) 887,883 (835,327) Closing balance 507,292 507,292 (334,766) 172,526 Number of shares Nominal value Discounts and premiuns

During 2011 the company acquired 1,847,588 shares at an average price of 0.44 euros, which negatively affected the value of equity in 810,072.96 euros.

During 2011 the company sold 1,723,210 shares at an average price of 0.43 euros, positively influencing the value of equity in 741,746.57 euros.

Net income for the year 2010, amounting to 27,491,412 euros, was applied as follows, according to minutes number 109 of 05.12.2011:

Lega l reserve	1,374,571
Reta ined earnings	22,652,995
Di vidends	3,463,847
Total	27,491,412

Portuguese corporate legislation required that at least 5% of the annual net income must is allocated to "Legal reserve" account, until this reserve reaches at least 20% of the share capital. This reserve cannot be distributed, except in the case of bankruptcy, but can be used to absorb losses, after all other reserves have been used, and to increase the share capital. The revaluation reserves cannot be distributed to shareholders, unless they have been fully amortised or the respective items subject to the revaluation have been sold.

12. BANK LOANS

As of December 31, 2011 and December 31, 2010 bank loans breakdown was as follows:

	31/12/2011	31/12/2010
Non current liabilities
Bonds	97,604,741	97,204,246
Bank l oans	14,112,455	19,750,000
Total	111,717,196	116,954,246
Current liabilities
Bank l oans	45,769,651	37,936,739
Overdrafts	63,402	177,995
Total	45,833,053	38,114,733

The values of the account "Bonds" and "Bank Loans", as of December 31, 2010, were restated to the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflect a decrease in 2,795,754 euros and 163,261 euros in non-current liabilities and current, respectively.

The loans are measured at amortized cost, effective interest rates of: 1.557%, 1.594% and 2.166%.

On December 31, 2011, bank loans, in the form of overdrafts, bear an average annual interest rate of 10.601%.

On December 31, 2011, bank loans are as follows:

Grupo Soares da Costa SGPS SA has contracted with a syndicate the placement and underwriting of commercial paper issues up to 32 thousand euros, under a program contract valid until June 16, 2015. On December 31, 2011 this placement was fully in use.
Loan taken by Grupo Soares da Costa SGPS SA with Caixa Central Mutual Agricultural Credit in the amount of 2,670 thousand Euros to be paid on 7 semiannual installments, ending in June 2015.
Loan taken by Grupo Soares da Costa SGPS, S. A. from Caixa Geral de Depósitos in the amount of 1,250 thousand Euros, to be paid in 5 quarterly instalments, ending in March 2013.
Loan taken by Grupo Soares da Costa SGPS, S. A. with Banco Popular Portugal totaling 5,000 thousand euros, to be paid in 4 semiannual instalments, ending June 2014.
Loan taken by Grupo Soares da Costa SGPS, S. A. from Caixa Geral de Depósitos in the amount of 14,000 thousand Euros, to be paid in 8 quarterly instalments, ending in October 2013.
Loan taken by Grupo Soares da Costa SGPS, S. A. with Banif Banco Internacional do Funchal in the amount of 1,839 thousand Euros, to be paid in 10 quarterly instalments, ending in April 2014.
Loan taken by Grupo Soares da Costa SGPS, S. A. with Caixa Banco de Investimento in the amount of 1,250 thousand Euros, to be repaid in January 2012.
Bonds issued by Grupo Soares da Costa SGPS SA in the amount of 20,000 thousand euros, to be repaid in November 2015.
Bonds issued by Grupo Soares da Costa SGPS SA in the amount of 80,000 thousand euros, to be repaid in December 2017.

The nominal value of loans recorded in the balance sheet date of December 31, 2011 has the following maturities:

Total	Overdrafts	Other loans	Bonds	Bank loans	Maturities
45,959,220	63,402		-	45,895,818	2012
11,145,818	-		-	11,145,818	2013
2,278,121	-		-	2,278,121	2014
20,688,515	-		20,000,000	688,515	2015
0	-			-	2016
80,000,000	-		80,000,000	-	2017
0	-			-	a fter 2017
160,071,674	63,402	0	100,000,000	60,008,273	Total

The Group's loans as at December 31, 2010 had the following interest rates:

	Minimum	Maximum
Overdrafts	7.110%	8.670%
Bank loans	3.470%	7.902%
Bonds	4.204%	4.319%
Commercia l paper	8.156%	8.156%

13. DERIVATIVES

The company contracted with a financial institution, a derivative – an Interest Rate Swaps - with a current amount of 4,513,000 Euros, repayable, in order to partially cover the risk of interest rate on a loan of 5,000,000 Euros. The financial instrument that can be summarized as follows:

Grupo Soares da Costa SGPS, S.A.

Type of derivati ve:	Derivative
Descri ption:	Interest rate coverage
Bank:	BANCO POPULAR
Currency:	Euro
Contract date:	11/03/2011
Begi nning date:	14/06/2011
Maturity da te:	16/06/2014
Frequency:	Annual
Swap:	2.64%
Tota l amount covered on 31/12/2011:	4,513,000 euros, repayable
Reference:	Euribor 12 months

As of December 31, 2011 these derivatives were designated as coverage derivatives since they meet the statutory requirements set out in IAS 39 relating to the documentation of the relationship and effectiveness of the coverage derivative. The fair value of financial instruments was made by their counterparts who are fit and independent entities, through the adoption of appropriate valuation models. These are based on the method of discounted cash flows using observable market inputs, quoted in the interbank market.

On December 31, 2011 and December 31, 2010 the details of derivative financial instruments is as follows:

	31/12/2011 31/12/2010
Non current l iabil ities	31,950	0
Current lia bilities	31,726	0
Total	63,676	0

14. BREAKDOWN OF OTHER ACCOUNTS PAYABLE

As of December 31, 2011 and 2010 the item "Other accounts payable" breakdown was as follows:

Accounts payable	31/12/2011	31/12/2010
Group compani es	158,265,989	104,657,786
Other shareholders	9,932	7,442
Special regi me for taxa tion of corpora te groups	5,469,717	6,277,464
Group and associated companies	163,745,638	110,942,692
Other	84	2,036,553
Other accounts payable	84	2,036,553

"State and other public bodies" account breakdown as at December 31, 2011 and 2010 was as follows:

	31/12/2011	31/12/2010
Val ue added ta x	230,067	107,541
Income tax	5,743,767	1,582,555
Social security contri buti ons	103,043	10,142
Other	127,229	71,886
Total	6,204,106	1,772,124

15. OTHER CURRENT LIABILITIES

Other current liabilities	31/12/2011	31/12/2010
Accrued costs	818,703	712,465
Total	818,703	712,465

The value of "Accrued costs" has been restated to December 31, 2010, with the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflects an increase of 19,391 euros. As of December 31, 2011 and December 31, 2010 these items were broken down as follows:

	31/12/2011	31/12/2010
Accrued costs
Staff wages to be paid	455,479	414,777
Interest to be paid	363,224	297,689
Total	818,703	712,465

16. INFORMATION BY SEGMENTS

Turnover breakdown by geographical market was as follows:

	31/12/2011	%	31/12/2010	%
Portugal	5,684,413	91.17%	4,003,279	100.00%
Angola	61,245	0.98%	-	0.00%
U.S.	385,200	6.18%	-	0.00%
Mozambique	83,400	1.34%	-	0.00%
S. Tomé & Príncipe	21,000	0.34%	-	0.00%
Total	6,235,258	100.00%	4,003,279	100.00%

The decomposition of this item to the date of December 31, 2011 and December 31, 2010 was as follows:

Turnover	31/12/2011	31/12/2010
Shared services	6,000,000	3,900,000
Insurance	0	103,279
Other services rendered	235,258	0
Total	6,235,258	4,003,279

17. EXTERNAL SUPPLIES AND SERVICES

Expenditures with external supplies and services in 2011 and 2010, breakdown was as follows:

External supplies and services	31/12/2011	31/12/2010
Special ised works	1,039,868	1,159,337
Publ ici ty	396,045	23,186
Fees	68,833	37,054
Travel a nd accomidation expenses	301,211	345,151
Car hires	201,287	159,590
Fuel	53,585	36,557
Communications	34,811	34,520
Insurance	66,068	62,607
Other external suppli es and services	456,475	326,519
Total	2,618,182	2,184,521

18. RELATED PARTIES

Balances and transactions with both group and associated companies are detailed in the following table. The terms and conditions used in transactions between group companies and associated companies are substantially the same normally contracted between independent entities in comparable operations.

Balance as of December 31, 2011	Customers	Loans to Group and associated companies	Other accounts receivable	Suppliers	Loans from Group and associated companies
Soares da Costa Serviços Partilhados, SA	8,655	-	-	25,815	926,582
Costaparques, SA	-	23,004	-	640	-
Habitop, SA	-	-	-	635	151,144
Soc. Construções Soares da Costa, SA	949,750	-	10,597	5,323	53,583,424
Contacto - Soc. Construções, S.A.	60,017	-	-	-	87,135,184

Total	2,502,982	260,408,245	548,096	82,525	158,265,989
Estádio de Coimbra, ACE	-	-	-	5,424	-
CAET XXI - Construções, ACE	26	-	-	-	-
Auto-estradas XXI, S.A.	21	-	-	-	-
Operestradas XXI, SA	36	-	-	-	-
Energia Própria, SGPS, S.A.	3	882,549	85	-	-
Clear (Angola), SA	6	-	-	-	-
CPE, SA	11	-	-	-	-
Soares da Costa Concessions USA, Inc.	62,079	-	-	-	-
SDC S. Tomé e Principe, Construções, Lda	21,000	-	-	-	-
SDC Moçambique, SARL	83,400	-	-	-	-
SDC América, Inc.	925,551	-	-	-	-
Carta Angola	61,239	-	-	-	-
Indáqua Feira - Indústria de Águas de S. Maria da Feira	-	83,085	-	-	-
Gaya Explor, Lda	22,734	-	-	-	-
Scutvias, SA	5,328	-	-	-	-
Intevias - Serviços e Gestão, S.A.	-	-	-	-	1,919,489
Mercados Novos, Lda	-	-	-	-	1,313,345
Cais da Fontinha - Investimentos Imobiliários, SA	-	78,673	-	-	-
SDC Concessões, SGPS, SA	216	101,687,615	-	-	-
SDC Imobiliária SGPS, SA	4	20,275,153	-	-	-
SDC Construção SGPS, SA	79	136,166,481	537,414	-	-
Navegaia, Instalações Industriais SA	-	-	-	-	336,484
Socometal, SA	42,389	4	-	-	-
SDC Serviços Técnicos e de Gestão, SA	79,458	-	-	-	-
Clear, SA	137,626	-	-	-	12,900,336
Ciagest, SA	43,355	1,211,682	-	44,688	-

Balance as of December 31, 2010	Customers	Loans to Group and associated companies	Other accounts receivable	Suppliers	Loans from Group and associated companies
Soares da Costa Serviços Partilhados, SA	5,820	426,792	-	10,956	-
Costaparques, SA	-	-	-	932	-
Habitop, SA	-	-	-	621	-
Soc. Construções Soares da Costa, SA	488,720	-	-	11,728	24,412,145
Contacto - Soc. Construções, S.A.	65,515	-	-	-	-
Ciagest, SA	20,606	15,095,706	-	24,277	-
Clear, SA	63,313	-	-	-	-
SDC Serviços Técnicos e de Gestão, SA	62,841	-	-	-	2,091,463
Socometal, SA	14,236	-	-	-	2,585,939
Navegaia, Instalações Industriais SA	-	-	-	-	312,920
SDC Construção SGPS, SA	-	108,150,768	537,414	-	51,865,645
SDC Imobiliária SGPS, SA	-	2,778,083	-	-	-
SDC Indústria SGPS, SA	-	-	-	-	22,057,548
Soares da Costa - Ambiente e Energia, SGPS, S.A.	-	-	-	-	48,000

Soarta, SA	-	-	-	-	1,267,041
Soares da Costa Desenvolvimento, SA	-	-	-	-	17,087
SDC Concessões, SGPS, SA	-	66,684,179	-	-	-
Cais da Fontinha - Investimentos Imobiliários, SA	-	1,695,047	-	-	-
MZI, Lda	-	26,635	-	-	-
Carta, Lda	-	526,112	-	-	-
Indáqua Feira - Indústria de Águas de S. Maria da Feira	-	18,937	-	-	-
Mini Price Hotels (Porto), SA	-	-	-	35	-
Somafel, SA	72,600	-	-	-	-
Scutvias, SA	5,328	-	-	-	-
Gaya Explor, Lda	22,734	-	-	-	-
Indáqua Feira - Indústria de Águas de S. Maria da Feira	-	59,656	-	-	-
Total	821,714	195,461,915	537,414	48,549	104,657,786

Transactions in 2011	External supplies and services	Turnover	Interest paid	Interest charged
Soares da Costa Serviços Partilhados, SA	168,140	40,618	5,998	22,479
Costaparques, SA	2,736	5	-	1,575
Habitop, SA	7,470	-	4,237	846
Soc. Construções Soares da Costa, SA	35,878	3,784,154	2,220,004	-
Contacto - Soc. Construções, S.A.	-	582,887	4,791,211	-
Ciagest, SA	293,975	211,338	55	218,972
Clear, SA	-	564,688	248,044	1,646
SDC Serviços Técnicos e de Gestão, SA	-	387,648	25,228	-
Socometal, SA	-	102,225	134,941	4
Navegaia, Instalações Industriais SA	-	-	18,782	-
SDC Construção SGPS, SA	-	2,578	676,388	6,781,736
SDC Imobiliária SGPS, SA	-	3	-	890,543
Intevias - Serviços e Gestão, S.A.	-	-	45,281	-
Soarta, SA	-	-	31,013	-
Mercados Novos, Lda	-	-	64,065	-
Soares da Costa Desenvolvimento, SA	-	-	1,358	-
SDC Concessões, SGPS, SA	-	361	-	4,682,186
Soares da Costa - Ambiente e Energia, SGPS, S.A.	-	-	2,674	-
CPE, SA	-	131	-	-
Cais da Fontinha - Investimentos Imobiliários, SA	-	-	-	105,845
MZI, Lda	-	-	-	718
Carta, Lda	-	-	-	7,208
Indáqua Feira - Indústria de Águas de Santa Maria da Feira	-	-	-	4,493
SDC Moçambique, SARL	-	83,400	-	-
SDC S. Tomé e Principe, Construções, Lda	-	21,000	-	-
Soares da Costa Concessions USA, Inc.	-	-	-	-
Energia Própria, SGPS, S.A.	-	2	-	37,224
Operestradas XXI, SA	-	29	-	-
Auto-estradas XXI, S.A.	-	76	-	-

Total	510,124	6,228,470	8,269,278	12,755,474
Mini Price Hotels (Porto), SA	1,925	-	-	-
SDC América, Inc.	-	385,200	-	-
Carta Angola	-	61,239	-	-
Clear (Angola), SA	-	6	-	-
CAET XXI - Construções, ACE	-	882	-	-

Transactions in 2010	External supplies and services	Turnover	Interest paid	Interest charged
Soares da Costa Serviços Partilhados, SA	127,027	30,985	-	102,168
Costaparques, SA	2,904	199	-	795
Habitop, SA	7,881	-	710	374
Soc. Construções Soares da Costa, SA	27,004	2,507,629	500,972	2,076
Contacto - Soc. Construções, S.A.	-	649,772	1,154,045	-
Ciagest, SA	243,072	104,335	-	176,139
Clear, SA	-	323,458	-	51,954
SDC Serviços Técnicos e de Gestão, SA	-	312,311	86,940	-
Socometal, SA	-	74,570	68,652	3,365
Navegaia, Instalações Industriais SA	-	20	2,194	-
SDC Construção SGPS, SA	-	-	3,164,339	2,810,727
SDC Imobiliária SGPS, SA	-	-	7,312	759,532
SDC Indústria SGPS, SA	-	-	1,184,951	-
Intevias - Serviços e Gestão, S.A.	-	-	11,861	493
Soarta, SA	-	-	38,091	590
Mercados Novos, Lda	-	-	13,136	-
Soares da Costa Desenvolvimento, SA	-	-	1,035	-
SDC Concessões, SGPS, SA	-	-	-	2,023,213
CPE, SA	-	-	-	354,026
Cais da Fontinha - Investimentos Imobiliários, SA	-	-	-	28,884
MZI, Lda	-	-	-	778
Carta, Lda	-	-	-	21,324
Indáqua Feira - Indústria de Águas de Santa Maria da Feira	-	-	-	2,852
SDC América, Inc.	-	-	-	-
Mini Price Hotels (Porto), SA	2,002	-	-	-
Total	409,890	4,003,279	6,234,237	6,339,291

19. EMPLOYEES

The average number of employees during the financial years ended on December 31, 2011 was 40 persons, distributed as follows:

Directors	Senior	Middle	Highly qualified
	managers	managers	staff
9	22	1	8

The average number of employees during the financial year ended on December 31, 2010 was 28 persons, distributed as follows:

Directors	Senior	Middle	Highly qualified
	managers	managers	staff
9	12	1	6

Corporate bodies' remunerations for the financial year ended on December 31, 2011 and 2010 were as follows:

Corporate bodies	2011	2010
Boa rd od directors	1,962,465	2,553,856
Supervi sory body	94,750	101,500
Chartered accountants	16,800	16,800

Staff costs for the financial years ending on December 31, 2011 and 2010, have the following breakdown:

Staff costs	2011	2010
Wa ges	3,548,353	3,790,820
Social security contribution	665,496	486,540
Total	4,213,849	4,277,361

20. FINANCIAL RESULTS

The financial results for the periods ended December 31, 2011 and 2010 showed the following breakdown

Financial costs and losses		2011	2010
Interest pa id		14,578,249	9,472,692
Forei gn exchange l osses		206,278	190,723
Adjustments of financial i nvestments		48,996	29,285
Capital losses in the ali enati on of fi nancial i nvestments		10,222	0
Other fi nancial costs and l osses		1,505,696	1,545,262
(1)		16,349,440	11,237,961
Financial income and gains		2011	2010
Interest recei ved		12,760,013	6,434,540
Forei gn exchange gai ns		1,030	52,276
Cash discounts obtained		1	0
Income and capital ga ins from equity partici pati ons		3,742,412	33,761,739
Other fi nancial i ncome and gains		603,825	435,387
(2)		17,107,281	40,683,941
Financial results	(2)-(1)	757,841	29,445,980

The "Interest paid" was restated to December 31, 2010, with the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflects a decrease of 192,150 euros.

"Other financial costs and losses" includes, essentially, costs of bank guarantees, commissions of the commercial paper issues and bond issues and expenses charged for banking services.

21. INCOME TAX AND DEFERRED TAX

The company is taxed on its income under the Special Tax Regime for Corporate Groups. Being the parent company, the company registers in its relations with the State the tax charges and the tax credit/debit for the contributions of the other companies in "Shareholders/ group companies" accounts.

According to tax legislation, tax declarations are subject to review by the tax authorities for a four year period (five years for Social Security). Hence, the Company's tax declarations concerning 2007 and following years are still subject to review. The company's board of directors believes that eventual corrections, should they occur, would not have a significant impact on the financial statements.

The income tax accounted for December 31, 201a and 2010 breakdows as follow:

2011	2010
(852,856)	(1,406,555)
-	-
(852,856)	(1,406,555)

Reconciliation of the pre-tax result for this period income tax:

	2011	2010
Earni ngs before taxes	24,872	26,277,007
Adjustments generati ng deferred taxes
Other adjustments not generating deferred ta xes	(3,872,437)	(31,851,214)
Taxable i ncome	(3,847,565)	(5,574,207)
Average nomi nal income tax rate	25.00%	25.00%
	(961,891)	(1,441,589)
Effect of confi rmation or reversal of deferred tax
Autonomous taxation	109,035	35,034
Income tax	(852,856)	(1,406,555)

The value of "Income before tax" to December 31, 2010 was restated to the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflects an increase of 192,150 euros. The deferred tax assets on the balance sheet presented had the following origin:

Deferred tax assets	31/12/2011	31/12/2010
Di fferences in the financial i nvestments val uati on Fina nci al instruments fai r va lue	4,104,762 15,919	4,104,762
Total	4,120,681	4,104,762

22. EARNINGS PER SHARE

As stated in note 11, the company's capital consists of 159,994,482 ordinary shares and 5,518 preferential shares without voting rights, with a par value of 1 Euro each.

Holders of preferential shares without voting rights are entitled to a priority dividend on the terms stipulated in item 2.7 of the respective issuance prospectus and are listed for trading, at no less than 5% of the respective par value, pursuant to article 341 (2) of the Portuguese Corporate Code.

As of December 31, 2011 and 2010 the basic earning per share matches the diluted earning per share, having been calculated as follows:

Earnings per share	2011	2010
Net income	877,728	27,683,563
Number of preferred shares	5,518	5,518
Number of ordinary sha res	159,994,482	159,994,482
Number of own sha res	507,292	382,914
Weighted average number of ordinary sha res	159,499,423	159,926,409
Resul ts attributed to the preferred shares	276	276
Earnings per share
Basi c	0.005	0.173
Di luted	0.005	0.173

Net income for 2010was restated reflecting the implementation of the rule for the measurement of bank loans at amortized cost - IAS 39 and IAS 32 - and reflects an increase of 192,150 euros.

23. GUARANTEES

Details on the banking guarantees and collateral provided by the company to third parties as of December 31, 2011, were as follows:

		Euros
Bank Guarantees		18,524,352
Confort Letter	Credit line for international tra ding and hot-money	1,250,000	Soc. Construções SDC, SA
Confort Letter	Credit line for medium and l ong term financi ng	1,500,000	SDC Construção SGPS ,SA
Confort Letter	Credit line for ba nk gua ra ntees	3,250,000	SDC Construção SGPS ,SA
Confort Letter	Credit line for medium and l ong term financi ng	5,544,713	Ciagest, SA
Confort Letter	Credit line for medium and l ong term financi ng	1,750,000	Ciagest, SA
		13,294,713
Col latera l	Credit line for medium and l ong term financi ng and ba nk gua ra ntees	2,000,000	Soc. Construções SDC/SDC Concessões
Col latera l	Credit line of ovrdraft account	8,000,000	Soc. Construções SDC, SA
Col latera l	Credit line for ba nk gua ra ntees	8,000,000	Soc. Construções SDC/SDC Concessões
		18,000,000

24. FINANCIAL RISKS

Foreign Exchange Risk

This risk results mainly from the company's presence in foreign markets, increasing its exposure to the effects of the several currencies changes against the Euro. The exchange rate risk management policy followed by the company aims to minimize the sensitivity of the company's earnings to exchange rates fluctuations. The company seeks, as much as possible, to balance assets and liabilities expressed in the same currency.

Credit Risk

This risk is associated with accounts receivable inherent to the company's activity. The need to register an impairment loss is determined according to the seniority of the debt, the client's risk profile, previous experience and further circumstances.

As of December 31, 2011, the board of directors strongly believes that the estimated adjustments to the accounts receivable have been adequately represented in the financial statements.

As of December 31, 2011, to the following accounts receivable amounts no adjustments have been registered as collection was considered reasonable:

Maturity	Customers - current account

Performing	721,052
0 to 180 days	-
181 to 360 da ys	-
361 to 540 da ys	-
541 to 720 da ys	-
more than 720 days	155,197
Total	876,249

Liquidity Risk

The liquidity risk management policy aims to ensure that at any given moment the profile of the maturity dates of the company's debt matches its capacity to generate the required cash flows. The management of liquidity risk therefore includes managing imbalances between the requirements for funds (for operating and financial costs, investments and debt repayment) and the inflows (receipts from customers, disinvestments, and financing commitments from financial entities). Futhermore, the company adopts measures to prevent that kind of risks through an adequate and timely cash flow management. In order to manage liquidity risk, the company maintains a balance between the term and flexibility of contracted debt through the use of phased financing which reflects the requirement for funds. In addition, the company has hot money accounts and overdrafts which avoid (temporary) cash flow problems.

25. SUBSEQUENT EVENTS

There are no material events to report.

26. COMPLIANCE WITH LEGAL FRAMEWORK (decree law nr. 318/94, article 5, nr.4)

During the period ended December 31, 2011 were signed equity supply contracts with the following companies:

Soares da Costa Concessões, SGPS, S.A.
Soares da Costa Imobiliária, SGPS, S.A.
Energia Própria,SGPS, SA.

During the period ended December 31, 2011 were signed financial operations contracts with the following companies:

Soares da Costa Construção, SGPS, S.A.
Soares da Costa Concessões, SGPS, S.A.
Sociedade de Construções Soares da Costa, S.A.
Soares da Costa Imobiliária, SGPS, S.A.
Ciagest Imobiliária e Gestão, S.A.
Costa parques Estacionamentos, S.A.
Cais da Fontinha Investimentos Imobiliários S.A.
Contacto Sociedade de Construções, SA
Soares da Costa Serviços Partilhados, SA
Habitop Sociedade Imobiliária, S.A.
Mercados Novos-Imóveis Comerciais, Lda
Navegaia Instalações Industriais, S.A.
Intevias Serviços e Gestão S.A.
Clear-Instalações Electromecânicas, SA
Energia Própria,SGPS, SA.

- Socometal, SA.

As of December 31, 2011 and 2010, debit and credit positions, respectively, were as follows:

Loans granted
Company	31/12/2011	31/12/2010
Equity injections
Soares da Costa Construção, SGPS, S.A.	108,150,768	108,150,768
Soares da Costa Concessões, SGPS, S.A.	81,833,370	26,833,370
Soares da Costa Imobiliária, SGPS, S.A.	19,368,450	-
EnergiaPrópria,SGPS, SA.	875,325	-
Total	210,227,913	134,984,138
Loans granted
Soares da Costa Construção, SGPS, S.A.	27,374,838	-
Soares da Costa Concessões, SGPS, S.A.	19,380,260	39,592,842
Soares da Costa Imobiliária, SGPS, S.A.	814,900	2,764,700
Cais da Fontinha - Investimentos Imobiliários S.A.	78,300	1,687,000
Ciagest - Imobiliária e Gestão, S.A.	1,208,800	15,017,400
MZI - Sociedade de Construção, Lda	-	26,500
SCSP-Soares da Costa Serviços Partilhados, S.A.	-	421,500
Costaparques - Estacionamentos, S.A.	23,000	-
Carta - Cantinas e Restauração, Lda	-	523,500
Total	48,880,098	60,033,442
Loans obtained
Company	31/12/2011	31/12/2010
Soares da Costa Construção, SGPS, S.A.	-	51,846,987
Soares da Costa Indústria, SGPS, S.A.	-	21,948,000
Soares da Costa Concessões, SGPS, S.A.	-	-
Sociedade de Construções Soares da Costa, S.A.	53,284,710	24,223,029
Soares da Costa Desenvolvimento S.A.		17,000
Soares da Costa Serviços Partilhados, SA	922,700	-
Habitop - Sociedade Imobiliária, S.A.	150,100	-
Mercados Novos-Imóveis Comerciais, Lda	1,305,300	-
Navegaia - Instalações Industriais, S.A.	335,200	311,300
Construções Metálicas Socometal, SA.
	-	2,570,300
Intevias - Serviços e Gestão S.A.	1,907,700	-
Contacto - Sociedade de Construções, SA	86,595,500	-
Clear-Instalações Electromecânicas, SA	12,819,380	-
Soarta-Sociedade Imobiliária Soares da Costa, SA.	-	1,260,500
Soares da Costa Serviços Técnicos e de Gestão, S.A.	-	2,081,000
Soares da Costa - Ambiente e Energia, SGPS SA	-	48,000

Article 508.º F of the Corporate Code: The total amount charged by the external auditor and by the chartered accountant during 2011 was, respectively, 36,250 euros and 16,800 euros, concerning the legal certification of accounts and audit services.

27. CONTINGENCIES

As it has been widely reported, in 2002 the Soares da Costa Group underwent a profound re-structuring and re-organisation, which included the creation of a holding company and four sub-holdings, one for each major business area: construction, real estate, concessions and industry.

These sub-holdings' capital was paid in kind through the transfer to each company, at market value, of the portfolio of shareholdings previously held by the parent company in each sector. This process generated some capital gains and losses that were relevant for tax purposes.

Subsequent to examination of the accounting records of Grupo Soares da Costa, SGPS, SA, the tax authorities notified the company of a corporate income Tax settlement of 17,136,692 euros, with this figure essentially resulting from faillure to consider as tax costs capital losses generated in the above-mentioned restructuring and reorganisation process (although the corresponding capital gains generated in the same process were considered as profits). As the market has been previously informed (on November 10, 2005) this company, together with its external consultants, the statutory auditors, and auditors who supervised and intervened in the process, disagrees and categorically rejects that understanding of the tax authority, and the payment in question has been legally contested, except for the sum of 381,752 euros, which has already been paid. The board of directors and lawyers strongly believe that the contestation in question will be granted.

28. ACCOUNTS RELEASE'S APPROVAL

At a meeting held on April 19, 2012, the Board of Directors authorised the release of these consolidated financial statements.

29. CHANGES TO POLICIES, ESTIMATES AND ERRORS

During the year 2011, with the exception of change in accounting policy on the measurement of bank loans at amortized cost, there were no changes in accounting policies, compared to those considered in the preparation of financial information for the year 2010, furthermore were not recorded material errors relating to exercises above.

V – CERTIFICATIONS

THIS REPORT IS A TRANSLATION OF THE ORIGINAL, ISSUED IN PORTUGUESE. IN THE EVENT OF DISCREPANCIES, THE PORTUGUESE VERSIONS PREVAIL.

OPINION OF THE SUPERVISORY BOARD

Under the Law (No. 1 of Article 508-D of the Companies Code), the Supervisory Board received, for examination, the consolidated accounts of Soares da Costa SGPS SA, reported the year two thousand and eleven, who made up the following parts:

Consolidated balance sheet;
Consolidated financial statements;
Annex to the balance sheet;
Management report;
Corporate governance report.

We were also submitted for consideration, the following documents, reported concerning the year 2011, prepared by the external auditor, Mr. Dr. Jorge Paulo Ferreira de Sousa, on behalf of BDO & Associados, SROC:

Audit report of individual accounts;
Audit report of the consolidated accounts,

as well as documents produced by the ROC, Mr. Jorge Ledo Bento Martins, on behalf of Grant Thornton & Associados, SROC, Ltd.:

Legal certification of accounts;
Legal certifications of consolidated accounts

which, after analysis, deserved our agreement, and therefore the Supervisory Board decided, unanimously, to give them our approval.

As a result, has written this opinion and proposes that the consolidated accounts and management report for the year two thousand and eleven are approved by the General Assembly pursuant to Article 376. of the Corporate Code.

Porto, April 20, 2012

The Supervisory Board,

Júlio de Lemos de Castro Caldas (Chairman), Joaquim Augusto Soares da Silva, Carlos Pedro Machado de Sousa Góis

THIS REPORT IS A TRANSLATION OF THE ORIGINAL, ISSUED IN PORTUGUESE. IN THE EVENT OF DISCREPANCIES, THE PORTUGUESE VERSIONS PREVAIL.

REPORT AND OPINION OF THE SUPERVISORY BOARD ON THE INDIVIDUAL ACCOUNTS AND PROPOSALS MADE BY THE BOARD OF DIRECTORS CONCERNING THE EXERCISE OF THE YEAR 2011

1. INTRODUCTION

In accordance with paragraph g) of n. 1, Art. no. 420. Of the Corporate Code, the Supervisory Board shall, within its powers, "prepare an annual report on its monitoring actions and on the report its opinion concerning the accounts and proposals submitted by the Administration.". Under this legal framework, the Supervisory Board prepared this document, which reflects the work undertaken by its members during 2011, and, consequently, the conclusions reached.

The following points illustrate how the work developed.

2. SUPERVISORY BOARD

The unfavourable economic and financial factors observed since 2008 intensified in 2011, stressing that the measures taken by the government as a result of the Memorandum of Understanding negotiated with the troika, led, immediately, to a high level of austerity, not allowing visibility to when the construction sector, one of the most affected, will resume a satisfactory growth path.

This situation has forced the Supervisory Board to redouble its efforts in monitoring and analysis, with particular focus on the financial side on this recessive and uncertain context with which we are currently confronted.

Having been a change in the Group's strategic plan, aimed at adjusting the new market conditions, both national and international, the Supervisory Board properly sought to follow the decision taken.

Accordingly, the Supervisory Board has been developing their work to meet the demands of the authorities, through an activity considered adequate to the needs of each circumstance, whether as to the timing and in terms of its extent.

In particular the Supervisory Board:

a) Was present, through its chairman, at meetings of the Board and Executive Committee, in order to monitor more closely the subjects discussed and its implications, providing cooperation, where appropriate;

b) Examined with attention the contents of the minutes of those meetings, which were provided and, where necessary, asked for clarification or gave their specific contributions;

c) Assessed the changes in the strategic plan and, upon examination, gave it their agreement on the understanding that the intended effects are adequately addressed;

d) Discussed and analysed the quarterly and annual information, individual and consolidated;

e) Accompanied, as usual, preparations for the submission of year-end statements, including a meeting with representatives of Grant Thornton & Associados - SROC, Ltd., Mr Jorge Bento Martins Ledo, which also allowed an analysis of the work done leading up to the legal certification of accounts. The change of the corporate name of the auditors did not alter the status quo;

f) Analysed the audit reports (for the individual and consolidated accounts) prepared by the representative of the external auditor, BDO & Associados, SROC, Mr. Jorge Paulo Ferreira de Sousa;

g) Tried to follow as closely as possible the processes of existing litigation, as well as pending cases that could possibly affect the balance of the Group;

h) Continued to pay special attention to the collection processes, with the resolution of some cases with some relevance, and took knowledge on the measures taken to alleviate the delay in their settlement;

i) Analyzed the existence of impairments and the criteria adopted for their treatment;

j) Accompanied, as usual, the development of risk management system and internal control;

k) Kept monitoring tax function which continues to be adequately treated;

l) Elaborated and approved the plan of activities of the Supervisory Board for 2012;

m) Accompanied, as usual, at all times, the news appeared in media related with the Group's activity and with the situation of the construction industry, trying, whenever it seemed necessary, to obtain clarification from the Board of Directors.

The Supervisory Board received for consideration, as usual:

The management report;
The annual financial statements;
The annual report on the inspection conducted by the company auditors and the external auditors;
The annual corporate governance report, prepared pursuant to CMVM Regulation No. 1/2010;

documents, that after analysis, earned our agreement, because they provide a proper view of the Grupo Soares da Costa, highlighting once again the commitment of the governing bodies in order to adjust the Group to the economic context.

For all these reasons, the Supervisory Board considers that those documents are worth their approval.

3. ACKNOWLEDGEMENTS

During the year under review, the Supervisory Board was able to tell, in their tasks of inspection, with the accompaniment of Dr. Pedro Gonçalo de Sotto-Mayor Santos de Andrade, on behalf of the Executive Committee, Mr. António Pereira Neves da Silva, on behalf of the Board, and Mr. Fernando da Silva Semana, Head of the Fiscal and Tax Department, by which the Supervisory board, express, with satisfaction, the recognition by the way they facilitated our work on last year.

At the same time, the members of the Supervisory Board would like to thank the words addressed to them by the Board of Directors that are expressed in the management report.

4. DECLARATION

Pursuant to point c) of Article 245 of the Securities Market Code, members of the Supervisory Board declare that, to their best knowledge, the information provided in a) was prepared in accordance with the applicable accounting standards, giving a true and fair view of assets and liabilities, financial position and results of Grupo Soares da Costa SGPS, SA and the companies included in the consolidation, and the management report faithfully the evolution of business performance and the position taken by the Group and the companies included in consolidation and contains a description of principal risks and uncertainties that they face.

5. OPINION

In light of the foregoing, the Supervisory Board is of the opinion that the Annual General Meeting should:

1) Approve the annual report and accounts for the year 2011 that were presented by the Administration;

2) Approve the proposed application of the results as stated in the annual report submitted by the Administration;

3) Carry out a general appraisal of the management and supervision of the company, taking from that appraisal the conclusions referred in art. 455. of the Corporate Code;

4) Express appreciation to the activity developed by the Administration.

Porto, April 20, 2012

The Supervisory Board,

Júlio de Lemos de Castro Caldas (Chairman), Joaquim Augusto Soares da Silva, Carlos Pedro Machado de Sousa Góis

AI assistant

Grupo Media Capital SGPS — Annual Report 2011

1939_10-k_2012-05-16_257a5f27-121b-499b-8080-010f49698e97.pdf

CONTENTS

I – MANAGEMENT REPORT

HIGHLIGHTS

Consolidated Financial Indicators

INTRODUCTION

1. GRUPO SOARES DA COSTA

1.1 PROFILE

Who we are

Historical References

Corporate Bodies

General Meeting Board:

Board of Directors:

Supervisory Board:

Statutory Auditor:

Remuneration Commission:

Shareholders

Group Governance

• Group Organizational Chart

New shareholdings and changes in the consolidation perimeter during the 2011 period

1.2 STRATEGY

Vision and Strategic Objectives

Mission

Strategic Plan "Renewed Ambitions 2014" Update

2. ACTIVITY OVERVIEW

General Analysis

The Portuguese Economy

Internal Market: The Construction Sector

External Market

- ANGOLA

- MOZAMBIQUE

- UNITED STATES

- ROMANIA

3. RELEVANT FACTS OF THE YEAR

4. ANALYSIS OF THE ACTIVITY: CONSOLIDATED ACCOUNTS

Consolidated Financial Indicators

Turnover

Breakdown of Turnover by Geographical Market

Distribution of Turnover by Business Area

Profitability

Consolidated Income Statement

Profitability by Business Area

Financial Results

Earnings before Tax and Net Income

Consolidated Statement of Financial Position

Net-debt

Evolution of Net-debt and Ratio of Net-debt/ EBITDA

Investment

Evolution of Investment

5. PERFORMANCE BY BUSINESS AREA

5.1 CONSTRUCTION

Key Peformance Indicators - Construction

Turnover

Turnover of the Construction business area by Geographical Market

Turnover by company - Construction

PORTUGAL

Domestic Activity in 2011: Distribution by Geographical Area

Domestic Activity in 2011: Distribution by Segment

Domestic Activity in 2011 – Civil Construction: Distribution by Sub-segment

Domestic Activity in 2011 – Engineering and Infrastructure: Distribution by Sub-segment

ANGOLA

UNITED STATES OF AMERICA

OTHER INTERNATIONAL MARKETS

MOZAMBIQUE

ROMANIA

BRAZIL

S. TOMÉ and PRÍNCIPE

COSTA RICA

ISRAEL

PROFITABILITY

5.2 CONCESSIONS

TRANSPORT CONCESSIONS

• Scutvias – Auto-Estradas da Beira Interior, S.A.

• Autoestradas XXI, Subconcessionária Transmontana, S.A.

• Estradas do Zambeze, SA

• Soares da Costa Concessions USA

• ELOS – Ligações de Alta Velocidade, SA

• Telavive Metro Project - Israel

Grupo Media Capital SGPS Annual Report 2011