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Teixeira Durate

Quarterly Report Jun 20, 2014

1919_10-q_2014-06-20_e37656ea-9bf7-4ec3-aab6-d664c311bb9b.pdf

Quarterly Report

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Relatório e Contas 1º Trimestre 2014 Report and Accounts1st Quarter

CONTENTS

    1. Company Identification
    1. Key Indicators
    1. Teixeira Duarte Group 1 st Quarter of 2014
    1. Interim Management Report
  • I. Introduction
  • II. Overall Appraisal of the Activity
  • III. Facts Which Occurred After the End of the 1st Quarter of 2014
  • IV. Outlook for 2014
    1. Consolidated Financial Statements
  • I. Consolidated Statement of Financial Position
  • II. Consolidated Income Statement for the Period
  • III. Consolidated Statement of Other Comprehensive Income
  • IV. Consolidated Statement of Changes in Equity
  • V. Consolidated Cash Flow Statement
  • VI. Notes to the Consolidated Financial Statements

Teixeira Duarte, S.A.

LISTED COMPANY

Head Office: Lagoas Park, Edifício 2 - 2740-265 Porto Salvo Share Capital: € 210.000.000 Single Legal Person and Registration number at Cascais-Oeiras Commercial Registry 509 234 526

KEY INDICATORS

1st Q
2010
1st Q
2011
1st Q
2012
1st Q
2013
1st Q Variation
2014 2014/2013 %
Average number of workers 12,742 11,817 10,412 11,358 12,705 11.9%
Turnover 297 309 283 342 357 4.2%
Operating Income 307 319 293 354 360 1.8%
EBITDA 37 51 39 54 71 31.1%
EBITDA / Turnover Margin 12.3% 16.4% 13.9% 15.7% 19.8% 25.9%
EBIT 22 37 27 38 54 40.3%
Tangible fixed assets + Investment properties 1,059 1,033 1,031 1,044 1,084 3.8%
Investments in associates and joint ventures + Financial assets available for sale + Other investments 380 315 153 130 163 25.7%
Net debt 1,055 1,116 927 1,101 1,194 8.5%
Total Equity 617 549 319 357 411 15.1%
Net Income Attributable to Shareholders 92 8 6 7 16 122.3%

Notes:

The book values are expressed in million euros

The figures in the "Variation 2014/2013 %" column were calculated based on amounts that were not rounded off. Total Equity includes non-controlling interests.

2014 TEIXEIRA DUARTE GROUP - 1st Quarter

I - INTRODUCTION

Under the terms and for the effect of the applicable legal and regulatory provisions, TEIXEIRA DUARTE, S.A. ("TD, S.A.") hereby discloses the Interim Report relative to the first three months of 2014, of which the financial statements attached herewith are also an integral part.

In compliance with and under the regulations on the presentation of periodic information, it is hereby clarified that the elements disclosed herein refer only to the consolidated aspect and that the consolidated financial Statements as at 31 March 2014 were prepared using accounting policies consistent with the International Financial Reporting Standards ("IFRS"), as adopted in the European Union, enforced for periods started on 1 January 2014 and in conformity with IAS 34 – Interim Financial Reporting.

On this issue, it should be noted that, pursuant to the applicable standards, the Group adopted "IFRS 11 - Joint Arrangements for the first time, under the terms and with the scope further detailed in Notes 1 and 3 of the Notes to the Financial Statements. This fact implied that, for purposes of comparability, the indicators of the Consolidated Statements as at 31 March and 31 December 2013 presented herein were restated based on this new standard.

Without prejudice to the regular monitoring of the activity of the Teixeira Duarte Group by its Supervisory Bodies, as well as through the information reported to the Supervisory Bodies for the purpose of the preparation of this document, the elements published herein are not, pursuant to the applicable provisions, subject to auditing.

In addition to the Consolidated Financial Statements and respective notes, this document also presents a brief description of the evolution of the Group's activity during the period under analysis, relative to which we highlight the following aspects:

  • Net Income Attributable to Shareholders was positive by 15.9 million euros;
  • Turnover stood at 356.5 million euros;
  • Foreign Market represents 84.4% of Turnover;
  • EBITDA reached 70.6 million euros;
  • EBITDA / Turnover Margin stood at 19.8%;
  • Net Debt of 1,194 million euros;
  • Net Assets of the Group of 2,755 million euros;
  • Financial Autonomy of 14.9%;
  • Order Book of the Teixeira Duarte Group for the construction sector stood at 2,176 million euros.

II – OVERALL APPRAISAL OF THE ACTIVITY

Income Statement

for the quarters ended on 31 March 2014 and 2013

1st Q 14 1st Q 13
"Restated"
Var (%) 1st Q 13
Operating income 360,389 353,911 1.8% 353,890
Operating costs (289,752) (300,046) (3.4%) (300,221)
EBITDA 70,637 53,865 31.1% 53,669
Amortisation and depreciation (15,959) (14,276) 11.8% (14,279)
Provisions and impairment losses (933) (1,294) (27.9%) (1,120)
EBIT 53,745 38,295 40.3% 38,270
Financial results (25,710) (24,524) 4.8% (24,499)
Earnings before tax 28,035 13,771 103.6% 13,771
Income tax (14,279) (6,981) 104.5% (6,981)
Net income 13,756 6,790 102.6% 6,790
Attributable to:
Shareholders 15,948 7,173 122.3% 7,173
Non-controlling interests (2,192) (383) 472.3% (383)

(Values in thousand euros)

The Net Income Attributable to Shareholders was positive by 15,948 thousand euros.

It is important to highlight that, apart from the improved performance of the Group's companies compared with the same quarter of the previous year, this indicator was influenced by currency conversion differences:

1st Q 14 1st Q 13
"Restated"
Var (%) 1st Q 13
Currency conversion differences 4,676 (5,695) - (5,692)
4,676 (5,695) - (5,692)

(Values in thousand euros)

Turnover recorded an overall increase of 4.2% relative to the same period of 2013, having reached 356,519 thousand euros.

Portugal declined by 23.9% and other markets increased by 11.8%, to account for 84.4% of the total Turnover of the Teixeira Duarte Group.

Evolution of Turnover by Markets

(Values in thousand euros)

The tables below present the Turnover detailed by countries and activity sectors, clearly indicating the exposure of the Group to different economic contexts.

Turnover by Country

1st Q 14 1st Q 13 "Restated"
Country Value Contribution Value Contribution Variation
Portugal 55,795 15.6% 73,307 21.4% (23.9%)
Angola 160,093 44.9% 181,518 53.0% (11.8%)
Algeria 17,287 4.8% 13,484 3.9% 28.2%
Brazil 33,072 9.3% 18,333 5.4% 80.4%
Spain 7,032 2.0% 6,450 1.9% 9.0%
Mozambique 10,478 2.9% 12,188 3.6% (14.0%)
Venezuela 71,722 20.1% 34,559 10.1% 107.5%
Other 1,040 0.3% 2,471 0.7% (57.9%)
356,519 100.0% 342,310 100.0% 4.2%

(Values in thousand euros)

Activity Sector 1st Q 14 Contribution 1st Q 13
"Restated"
Contribution Variation
Construction 175,430 49.2% 160,781 47.0% 9.1%
Concessions and Services 17,902 5.0% 16,194 4.7% 10.5%
Real estate 22,344 6.3% 21,644 6.3% 3.2%
Hotel services 15,238 4.3% 18,253 5.3% (16.5%)
Distribution 46,941 13.2% 49,566 14.5% (5.3%)
Energy 16,452 4.6% 28,812 8.4% (42.9%)
Automotive 62,212 17.4% 47,060 13.7% 32.2%
356,519 100.0% 342,310 100.0% 4.2%

Turnover by Activity

(Values in thousand euros)

An analysis of turnover is presented below, taking into account its evolution by activity sector, where the restatement explained above only influenced this indicator in the Construction sector:

Construction Turnover grew by 9.1% compared with March 2013, with the increased activity in Algeria, Brazil and Venezuela having offset the declines recorded in Portugal, Angola and Mozambique.

The values in Portugal fell by 24.5%, due to the widespread retraction, and in Angola by 48.1% primarily as a result of the fact that one of the major works underway in this country during the first quarter of 2013 is currently at a stage of completion.

Brazil and Venezuela showed very significant growth, with the first having increased from 7,410 thousand euros to 21,827 thousand euros and, the second, from 34,559 thousand euros to 71,722 thousand euros.

In this context, it should be noted that as at 31 March 2014, the external market represented 88.1% of Construction turnover.

Turnover of Concessions and Services

In Concessions and Services, Turnover grew by 10.5% in relation to the first three months of 2013, with good performance in all the markets in which the Group operates, especially in Portugal, where the attraction of new customers enabled an increase of 29.9% relative to March 2013.

Turnover of Real Estate

Turnover of Hotel Services

Turnover of Distribution

Real Estate business, as a whole, grew by 3.2% in relation to the first three months of 2013.

In Portugal, similar values to March 2013 were recorded, while in Brazil the foreign exchange devaluation implied that the 22.7% growth of activity was not reflected in this indicator.

The Turnover of Hotel Services fell by 16.5% year-on-year, essentially penalised by the variations which occurred in Angola, since Portugal and Mozambique recorded values similar to those of March 2013.

In fact, the impact of the closure for remodelling works of "Hotel Trópico", in Luanda, was such that the improvement recorded in the other two hotels of the Group in the city was insufficient to offset it.

Distribution declined by 5.3% relative to March 2013.

Not considering the currency conversion effect, the activity recorded similar amounts to those of the first three months of the previous year.

In Energy, the Group's Turnover fell by 42.9% year-on-year, essentially as a result of the strong reduction of sales in large outlets.

Turnover of the Automotive sector

(Values in thousand euros)

The Automotive sector increased its Turnover by 32.2% in relation to the quarter ended on 31 March 2013.

Not considering the currency conversion effect, the activity grew by 37.8% year-onyear.

Operating income increased by 1.8% relative to March 2013, reaching the value of 360,389 thousand euros.

Evolution of Operating Income

(Values in thousand euros)

The table below confirms the good performance not only of the Concessions and Services and Automotive sectors, but also in Construction which, in spite of Portugal having declined by 25.1%, in general, increased by 7.9% relative to the first three months of 2013.

Operating Income by activity and geographic market:

Internal Market External Market Total
Activity Sector 1st Q 14 1st Q 13
"Restated"
Var (%) 1st Q 14 1st Q 13
"Restated"
Var (%) 1st Q 14 1st Q 13
"Restated"
Var (%)
Construction 21,863 29,198 (25.1%) 155,053 134,783 15.0% 176,916 163,981 7.9%
Concessions and Services 6,401 4,907 30.4% 12,190 11,785 3.4% 18,591 16,692 11.4%
Real estate 8,818 8,843 (0.3%) 13,709 14,211 (3.5%) 22,527 23,054 (2.3%)
Hotel services 3,079 2,368 30.0% 12,295 16,213 (24.2%) 15,374 18,581 (17.3%)
Distribution 378 988 (61.7%) 47,380 51,123 (7.3%) 47,758 52,111 (8.4%)
Energy 16,510 31,448 (47.5%) 22 4 450.0% 16,532 31,452 (47.4%)
Automotive - - - 62,691 48,040 30.5% 62,691 48,040 30.5%
Total 57,049 77,752 (26.6%) 303,340 276,159 9.8% 360,389 353,911 1.8%

(Values in thousand euros)

In view of the evolution referred to above, the contribution of each activity sector to the total value of the operating income achieved as at 31 March 2014 was as follows:

EBITDA increased by 31.1% relative to March 2013, to stand at 70,637 thousand euros.

Analysing this indicator by sector, the table below shows very divergent performance among the different business areas according to the specific characteristics of each activity and the respective markets in which they operate.

Activity Sector 1st Q 14 1st Q 13
"Restated"
Var (%)
Construction 46,215 21,022 119.8%
Concessions and Services 1,506 4,703 (68.0%)
Real estate 11,137 5,469 103.6%
Hotel services 3,209 7,167 (55.2%)
Distribution (690) 7,142 -
Energy 635 807 (21.3%)
Automotive 12,615 11,169 12.9%
Not allocated to segments (3,956) (3,636) 8.8%
Elimination (34) 22 -
70,637 53,865 31.1%

Evolution of EBITDA by Activity

(Values in thousand euros)

The EBITDA / Turnover Margin increased by 25.9% year-on-year, having shifted from 15.7% to 19.8% by March 2014.

Evolution of the EBITDA / Turnover Margin

The financial results were negative by 25,710 thousand euros for the quarter ended on 31 March 2014.

This indicator presents similar amounts to those recorded for the first quarter of the previous year, although with divergent variations in the following headings:

  • Increase of 3,860 thousand euros in interest paid;
  • Negative effect of 5,900 thousand euros of earnings from associates and joint ventures, with this heading having being negative by 326 thousand euros in March 2013.
  • Positive effect of the currency conversion differences of 4,676 thousand euros in the first three months of 2014, which had been negative by 5,695 thousand euros in the same period of the previous year.
1st Q 14 1st Q 13
"Restated"
Var (%)
Financial costs and losses: (53,178) (42,568) 24.9%
Interest paid (22,747) (18,887) 20.4%
Unfavourable currency conversion differences (24,648) (17,466) 41.1%
Other financial costs and losses (5,783) (6,215) (7.0%)
Financial income and gains: 32,986 16,918 95.0%
Interest received 2,906 4,144 (29.9%)
Favourable currency conversion differences 29,324 11,771 149.1%
Cash discounts received 82 129 (36.4%)
Other financial income and gains 674 874 (22.9%)
Earnings from investment activities: (5,518) 1,126 -
Earnings from associates and joint ventures (5,900) (326) 1709.8%
Dividends 137 1,146 (88.0%)
Other investments 245 306 (19.9%)
Financial results (25,710) (24,524) -

(Values in thousand euros)

Income Tax for the quarter ended on 31 March 2014 reached the value of 14,279 thousand euros, while at the end of the same period of the previous year it had stood at 6,981 thousand euros.

1st Q 14 1st Q 13
"Restated"
Var (%)
Current tax (22,628) (15,630) 44.8%
Deferred tax 8,349 8,649 (3.5%)
(14,279) (6,981) 104.5%

(Values in thousand euros)

Total Net Assets fell by 0.9% in relation to 31 December 2013 "Restated", having reached 2,755,259 thousand euros.

Evolution of Net Assets

(Values in thousand euros)

Net Debt reached 1,194,384 thousand euros as at 30 March 2014, reflecting an increase of 1.5% in relation to the end of the previous year.

Evolution of Net Debt

(Values in thousand euros)

The Equity Attributable to Shareholders increased by 54,121 thousand euros, having shifted from 325,407 thousand euros to 379,528 thousand euros, corresponding to growth of 16.6% in relation to 31 December 2013.

Total Equity grew by 14% to stand at 411,063 thousand euros, influenced essentially by the following factors:

  • Positive net income of 13,756 thousand euros;
  • Positive currency conversion effect of 22,276 thousand euros, recorded as a result of the appreciation of the Currencies with which the Group operates in relation to the Euro;
  • Positive variation in the fair value of the financial assets available for sale, net of deferred tax, of the value of 15,881 thousand euros;
  • Negative hedge operation effect of 1,201 thousand euros, as a result of the variation of the fair value of the financial instrument (interest rate swap) contracted in 2008 under the Concession of the Management of Cascais Hospital Building.

Financial Autonomy shifted from 13% as at 31 December 2013 to 14.9% as at 31 March 2014.

The Average Number of Workers at the end of the quarter ended on 31 March 2014 was 12,705, reflecting an increase of 5.8% compared with 31 December 2013.

Evolution of the Average Number of Employees

"Teixeira Duarte, S.A." shares appreciated from 0.89 euros as at 31 December 2013 to 1.105 euros as at 31 March 2014.

The graph below shows the evolution of the stock market prices of the shares during the first three months of the year, which varied during this period between a minimum of 0.87 euros and maximum of 1.44 euros.

Teixeira Duarte, S.A. Share Prices

During this period, 26,941,457 shares were traded on the stock market, with a total turnover of 29,843,557 euros.

III. FACTS WHICH OCCURRED AFTER THE END OF THE 1st QUARTER OF 2014

TEIXEIRA DUARTE pursued its activity in the different sectors and markets in which it operates, where the following relevant fact which occurred after the closing of the first quarter of 2014, which was disclosed in due time to the market:

Notification of the service order for new infrastructure work in Algeria, for the value of 121,749,760 euros

On 2 April 2014, the enterprise group which includes "Teixeira Duarte - Engenharia e Construções, S.A." was notified of the Service Order issued by the Algerian entity "AGA- Algérienne de Gestion des Autoroutes" for the contract "Réalisation des Installations et Equipements d'Exploitation de l'autoroute Este-Ouest, Lot Ouest" (Execution of facilities and equipment for the operation of the East-West Motorway, West Lot), in Algeria.

"Teixeira Duarte - Engenharia e Construções, S.A." is the leader of the enterprise group, holding a stake of 48%, with 46% belonging to the Algerian enterprise group "ETRHB HADDAD" and 6% to the Spanish "SICE, S.A.".

The contract has a foreseen period of twenty-three months counted from the aforesaid 2 April 2014 and an overall value of € 253,645,332 (two hundred and fifty-three million, six hundred and forty-five thousand and three hundred and thirty-two euros), increased by VAT at the legal rate in force, of which 35.7% is paid in euros and the remaining 64.3% in Algerian dinar. Pursuant to its share in the aforesaid enterprise group, "Teixeira Duarte - Engenharia e Construções, S.A." is entitled to receive € 121,749,760 (one hundred and twenty-one million, seven hundred and forty-nine thousand and sixty euros).

IV. OUTLOOK FOR 2014

For 2014, growth is expected of the activity in various countries of importance in the Group's action in the foreign market, namely a significant increase in Venezuela.

Thus, the Teixeira Duarte Group's Order Book for the construction sector reached the impressive total value of 2,176,068 thousand euros as at 31 March 2014, corresponding to an increase of 6.7% relative to 31 December 2013.

Therefore, and notwithstanding any new contracts that may arise, the Group has assured adequate business levels in construction in the foreign market which, in spite of the current unfavourable circumstances in the domestic market, has implied that, as a whole, Teixeira Duarte already has contracts to the total value of 619,647 thousand euros for 2014 and 547,812 thousand euros for 2015, distributed as follows by the markets of operation of the Teixeira Duarte Group:

Apr - Dec 2014 Contribution (%) 2015 Contribution (%)
Portugal 71,348 11.5% 23,995 4.4%
Angola 121,942 19.7% 107,495 19.6%
Algeria 103,198 16.7% 181,467 33.1%
Brazil 70,534 11.4% 58,432 10.7%
Mozambique 50,897 8.2% 26,883 4.9%
Venezuela 191,628 30.9% 148,375 27.1%
Other 10,100 1.6% 1,165 0.2%
Total 619,647 100.0% 547,812 100.0%

(Values in thousand euros)

For 2014, Teixeira Duarte maintains the forecast of achieving consolidated operating income of 1,600 million euros.

Lagoas Park, 30 May 2014

The Board of Directors,

Pedro Maria Calainho Teixeira Duarte

Manuel Maria Calainho de Azevedo Teixeira Duarte

Joel Vaz Viana de Lemos

Carlos Gomes Baptista

Diogo Bebiano Branco de Sá Viana Rebelo

Jorge Ricardo de Figueiredo Catarino

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2014, 31 DECEMBER 2013 AND 1 JANUARY 2013 (Values expressed in thousand euros)

Notes 31/03/2014 31-12-2013
"Restated"
01-01-2013
"Restated"
Non-current assets:
Goodwill 29,706 29,706 29,715
Intangible assets 19,095 34,563 31,281
Tangible fixed assets 13 604,784 571,234 529,738
Investment properties 14 478,742 479,965 498,236
Investments in associates and joint ventures 7 and 15 36,600 36,461 51,858
Financial assets available for sale 7 and 16 105,599 84,613 48,597
Other investments 20,115 15,537 14,546
Deferred tax assets 17 192,315 188,514 111,912
Customers 52,555 53,224 58,091
Other receivables 103 97 79
Other non-current assets 2,151 1,561 1,716
Total non-current assets 1,541,765 1,495,475 1,375,769
Current assets:
Inventories 288,597 289,894 313,575
Customers 444,205 492,135 476,724
Other receivables 82,651 69,315 65,099
Cash and cash equivalents 19 171,913 186,441 241,961
Other investments 618 62 10,888
Other current assets 225,510 245,921 279,698
Total current assets 1,213,494 1,283,768 1,387,945
TOTAL ASSETS 7 2,755,259 2,779,243 2,763,714
Equity:
Share capital 20 210,000 210,000 210,000
Adjustment of holdings in associates and joint ventures 4,340 1,669 1,607
Currency conversion adjustments (13,653) (37,085) (3,671)
Reserves and retained earnings 162,893 86,849 20,066
Consolidated net income 15,948 63,974 24,003
Equity attributable to shareholders 379,528 325,407 252,005
Non-controlling interests 31,535 35,321 73,863
TOTAL EQUITY 411,063 360,728 325,868
Non-current liabilities:
Loans 22 671,487 680,980 401,060
Provisions 76,591 72,934 36,148
Financial leases 180,745 184,062 199,580
Deferred tax liabilities 17 52,740 52,693 57,979
Other payables 8,246 9,833 15,110
Other non-current liabilities 62,501 83,906 177,793
Total non-current liabilities 1,052,310 1,084,408 887,670
Current liabilities:
Loans 22 694,810 681,626 834,905
Suppliers 162,684 167,002 186,737
Financial leases 21,226 21,634 22,015
Other payables 68,222 83,927 20,260
Other current liabilities 344,944 379,918 486,259
Total current liabilities 1,291,886 1,334,107 1,550,176
TOTAL LIABILITIES 7 2,344,196 2,418,515 2,437,846
TOTAL LIABILITIES AND EQUITY 2,755,259 2,779,243 2,763,714

The notes are an integral part of the consolidated statement of financial position as at 31 March 2014.

CONSOLIDATED INCOME STATEMENT FOR THE QUARTERS ENDED ON 31 MARCH 2014 AND 2013 (Values expressed in thousand euros)

Notes 1st Q 14 1st Q 13
"Restated"
Operating income:
Sales and services rendered 7 and 8 356,519 342,310
Other operating income 8 3,870 11,601
Total operating income 8 360,389 353,911
Operating costs:
Cost of sales (130,512) (110,343)
Change in production (637) (1,094)
External supplies and services (83,590) (108,977)
Staff costs (62,949) (62,069)
Amortisation and depreciation 7 (15,959) (14,276)
Provisions and impairment losses in depreciable and amortisable assets and Goodwill 7 (933) (1,294)
Other operating costs (12,064) (17,563)
Total operating costs (306,644) (315,616)
Net operating income 7 53,745 38,295
Financial costs and losses 7 and 9 (53,178) (42,568)
Financial income and gains 7 and 9 32,986 16,918
Earnings from investment activities:
Earnings from associates and joint ventures 7 and 9 (5,900) (326)
Other 7 and 9 382 1,452
Financial results (25,710) (24,524)
Earnings before tax 7 28,035 13,771
Income tax 10 (14,279) (6,981)
Consolidated net income for the quarter 13,756 6,790
Net income attributable to:
Shareholders 11 15,948 7,173
Non-controlling interests (2,192) (383)
Earnings per share:
Basic (euros) 11 0.04 0.02
Diluted (euros) 11 0.04 0.02

The notes are an integral part of the consolidated income statement of the quarter ended on 31 March 2014.

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE QUARTERS ENDED ON 31 MARCH 2014 AND 2013 (Values expressed in thousand euros)

Notes 1st Q 14 1st Q 13
"Restated"
Consolidated net income for the quarter 13,756 6,790
Income and costs that will not be subsequently reclassified to net income
Other changes in equity (3,048) (2,300)
(3,048) (2,300)
Income and costs that may be subsequently reclassified to net income
Fair value of financial assets available for sale 16 15,881 6,605
Currency conversion adjustments 22,276 19,592
Adjustment of holdings in associates and joint ventures 15 2,671 (76)
Hedge financial instruments (1,201) 559
39,627 26,680
Net income recognised directly in equity 36,579 24,380
Comprehensive income for the quarter 50,335 31,170
Comprehensive income attributable to:
Shareholders 54,121 32,202
Non-controlling interests (3,786) (1,032)

The notes are an integral part of the consolidated statement of other comprehensive income for the quarter ended on 31 March 2014.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE QUARTERS ENDED ON 31 MARCH 2014 AND 2013 "Restated" (Values expressed in thousand euros)

Reserves and retained earnings
Notes Share capital Adjustment of holdings
in associates and joint
ventures
Currency
conversion
adjustments
Legal reserve Free reserves Fair value
reserve
Hedge operation
reserve
Retained earnings Consolidated net
income
Total equity
attributable to
shareholders
Non-controlling
interests
Total
Balance as at 1 January 2013 "Restated" 20 210,000 1,607 (3,671) 5,500 65,700 995 (11,011) (41,118) 24,003 252,005 73,863 325,868
Comprehensive income for the period:
Consolidated net income for the period
Variation in currency conversion adjustments
Variation in fair value and divestment of financial assets
-
-
-
-
-
20,558
-
-
-
-
-
-
-
-
-
-
7,173
-
7,173
20,558
(383)
(966)
6,790
19,592
available for sale 16 - - - - - 6,605 - - - 6,605 - 6,605
Effect of hedge operations - - - - - - 559 - - 559 - 559
Effect of the application of the equity method 15 - (76) - - - - - - - (76) - (76)
Other - - - - - - - (2,617) - (2,617) 317 (2,300)
Operations with shareholders in the period:
Appropriation of the consolidated net income for 2012:
Transfer to retained earnings - - - - - - - 24,003 (24,003) - - -
Balance as at 31 March 2013 210,000 1,531 16,887 5,500 65,700 7,600 (10,452) (19,732) 7,173 284,207 72,831 357,038
Adjustment of holdings
in associates and joint
ventures
Currency
conversion
adjustments
Legal reserve Free reserves Reserves and retained earnings
Fair value
reserve
Hedge operation
reserve
Retained earnings Consolidated net
income
Total equity
attributable to
shareholders
Non-controlling
interests
Total
Notes Share capital
Balance as at 1 January 2014 "Restated" 20 210,000 1,669 (37,085) 10,000 75,378 34,074 (8,305) (24,298) 63,974 325,407 35,321 360,728
Comprehensive income for the period:
Consolidated net income for the period
Variation in currency conversion adjustments
-
-
-
-
-
23,432
-
-
-
-
-
-
-
-
-
-
15,948
-
15,948
23,432
(2,192)
(1,156)
13,756
22,276
Variation in fair value and divestment of financial assets
available for sale 16 - - - - - 15,881 - - - 15,881 -
Effect of hedge operations
Effect of the application of the equity method
15 -
-
-
2,671
-
-
-
-
-
-
-
-
(1,201)
-
-
-
-
-
(1,201)
2,671
-
-
Other - - - - - - - (2,610) - (2,610) (438)
Operations with shareholders in the period:
Appropriation of the consolidated net income for 2013:
15,881
(1,201)
2,671
(3,048)
Transfer to retained earnings
Balance as at 31 March 2014
-
210,000
-
4,340
-
(13,653)
-
10,000
-
75,378
-
49,955
-
(9,506)
63,974
37,066
(63,974)
15,948
-
379,528
-
31,535
-
411,063

The notes are an integral part of the consolidated statement of changes in equity for the quarter ended on 31 March 2014.

CONSOLIDATED CASH FLOW STATEMENT FOR THE QUARTERS ENDED ON 31 MARCH 2014 AND 2013 (Values expressed in thousand euros)

Notes 1st Q 14 1st Q 13
"Restated"
OPERATING ACTIVITIES:
Revenue from customers 341,634 262,644
Payments to suppliers (211,058) (248,214)
Payments to staff (59,651) (57,835)
Cash flow generated by operations 70,925 (43,405)
Income tax payment/revenue (8,014) (5,051)
Other revenue/payments relative to operating activity (8,544) (14,730)
Cash flow from operating activities (1) 54,367 (63,186)
INVESTMENT ACTIVITIES:
Revenue derived from:
Financial investments 19 10,654 8,684
Tangible fixed assets and investment properties 455 981
Interest and similar income 4,089 4,407
Dividends 19 137 1,146
15,335 15,218
Payments relative to:
Financial investments 19 (15,603) (5,954)
Tangible fixed assets and investment properties (41,335) (17,419)
Intangible assets (146) (288)
(57,084) (23,661)
Cash flow from investment activities (2) (41,749) (8,443)
FINANCING ACTIVITIES:
Revenue derived from:
Loans raised 472,384 844,935
Payments relative to:
Loans raised (468,693) (789,610)
Interest and similar costs (26,984) (18,525)
(495,677) (808,135)
Cash flow from financing activities (3) (23,293) 36,800
Variation in cash and cash equivalents (4)=(1)+(2)+(3) (10,675) (34,829)
Effect of currency conversion differences (3,853) (17,101)
Cash and cash equivalents at the beginning of the period 19 186,441 241,961
Cash and cash equivalents at the end of the period 19 171,913 190,031

The notes are an integral part of the cash flow statement of the quarter ended on 31 March 2014.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS AT 31 MARCH 2014

1 - INTRODUCTION

Teixeira Duarte, S.A. ("Company" or "TD, S.A.") with head office in Porto Salvo, was incorporated on 30 November 2009, with share capital of 210,000,000 euros, represented by 420,000,000 shares with the nominal value of 0.50 euro each, and its core business is the implementation and management of investments, the coordination and supervision of other companies integrated in or related to its business Group.

The business group of Teixeira Duarte ("Group") is composed of the companies in which it holds stakes, indicated in Notes 4 and 15. The Group's core business is the following: Construction; Concessions and Services; Real Estate; Hotel Services; Distribution; Energy and Automotive (Note 7).

The values indicated herein are expressed in thousand euros, since this is the currency used preferably in the economic environment in which the Group operates.

During the quarter ended on 31 March 2014, the Group adopted, for the first, IFRS 11 - Joint Arrangements, which classifies joint arrangements as joint operations (combining the existing concepts of jointly controlled assets and jointly controlled operations) or joint ventures (equivalent to the existing concept of a jointly controlled entity) and requires the use of the equity method in joint ventures, thus eliminating the method of proportional consolidation. This standard has replaced IAS 31 - Interests in Joint Ventures and SIC 13 Jointly Controlled Entities - Non.- Monetary Contributions by Venturers. With the adoption of this new standard, the Group no longer proportionally consolidates its investments in joint ventures, namely the Enterprise Groups ("ACE"). The impacts of the adoption of this standard are detailed in Note 3.

Furthermore, following the new law issued in 2014 by Venezuela (Foreign Exchange Agreement number 25), which establishes a new foreign exchange rate for certain currency sale transactions, applicable as of 24 January 2014, there was significant devaluation of the Venezuelan bolívar (Note 6).

2 - BASIS OF PRESENTATION

The consolidated financial statements as at 31 March 2014 were prepared using the accounting policies consistent with the International Financial Reporting Standards ("IFRS"), as adopted by the European Union, effective for periods beginning on 1 January 2014 and in conformity with IAS 34 - Interim Financial Reporting.

3 - ALTERATIONS OF POLICIES, ESTIMATES AND ERRORS

The accounting policies adopted are consistent with those used in the preparation of the financial statements for the financial year ended on 31 December 2013, and described in the respective notes, except with respect to standards and interpretations whose enforcement date corresponds to financial years started on or after 1 January 2014. This is the case of the adoption of IFRS 11 - Joint Arrangements, which led to the discontinuation of the application of the proportional consolidation method to investments in joint ventures, namely Enterprise Groups ("ACE").

As a result of the adoption of IFRS 11, the following alterations were made to the previously reported Consolidated Statement of Financial Position as at 31 December 2013 and 1 January 2013, and to the previously reported Consolidated Income and Cash Flow Statements for the quarter ended on 31 March 2013:

Reconciliation of Financial Position as at 31 December 2012 and 1 January 2013:

01-01-2013
"Restated"
Application of
IFRS 11
31/12/2012
Non-current assets:
Tangible fixed assets 529,738 (37) 529,775
Investments in associates and joint ventures 51,858 1,149 50,709
Other non-current assets 794,173 - 794,173
Total non-current assets 1,375,769 1,112 1,374,657
Current assets:
Customers 476,724 (127) 476,851
Other receivables 65,099 1,004 64,095
Cash and cash equivalents 241,961 (4,102) 246,063
Other current assets 604,161 (1,659) 605,820
Total current assets 1,387,945 (4,884) 1,392,829
TOTAL ASSETS 2,763,714 (3,772) 2,767,486
Equity:
Equity attributable to shareholders 252,005 - 252,005
Non-controlling interests 73,863 - 73,863
TOTAL EQUITY 325,868 - 325,868
Non-current liabilities:
Provisions 36,148 (2,055) 38,203
Other non-current liabilities 851,522 - 851,522
Total non-current liabilities 887,670 (2,055) 889,725
Current liabilities:
Suppliers 186,737 (1,093) 187,830
Other payables 20,260 1,163 19,097
Other current liabilities 1,343,179 (1,787) 1,344,966
Total current liabilities 1,550,176 (1,717) 1,551,893
TOTAL LIABILITIES 2,437,846 (3,772) 2,441,618
TOTAL LIABILITIES AND EQUITY 2,763,714 (3,772) 2,767,486

Reconciliation of Financial Position as at 31 March 2013:

31-03-2013
"Restated"
Application of
IFRS 11
31/03/2013
Non-current assets:
Tangible fixed assets 544,315 (31) 544,346
Investments in associates and joint ventures 52,005 1,227 50,778
Other non-current assets 814,920 - 814,920
Total non-current assets 1,411,240 1,196 1,410,044
Current assets:
Customers 499,754 (22) 499,776
Other receivables 65,702 1,376 64,326
Cash and cash equivalents 190,031 (4,064) 194,095
Other current assets 598,489 (1,459) 599,948
Total current assets 1,353,976 (4,169) 1,358,145
TOTAL ASSETS 2,765,216 (2,973) 2,768,189
Equity:
Equity attributable to shareholders 284,207 - 284,207
Non-controlling interests 72,831 - 72,831
TOTAL EQUITY 357,038 - 357,038
Non-current liabilities:
Provisions 35,914 (1,877) 37,791
Other non-current liabilities 745,318 - 745,318
Total non-current liabilities 781,232 (1,877) 783,109
Current liabilities:
Suppliers 158,477 (630) 159,107
Other payables 23,534 1,160 22,374
Other current liabilities 1,444,935 (1,626) 1,446,561
Total current liabilities 1,626,946 (1,096) 1,628,042
TOTAL LIABILITIES 2,408,178 (2,973) 2,411,151
TOTAL LIABILITIES AND EQUITY 2,765,216 (2,973) 2,768,189

Reconciliation of Financial Position as at 31 December 2013:

31-12-2013
"Restated"
Application of
IFRS 11
31/12/2013
Non-current assets:
Tangible fixed assets 571,234 (23) 571,257
Investments in associates and joint ventures 36,461 563 35,898
Other non-current assets 887,780 - 887,780
Total non-current assets 1,495,475 540 1,494,935
Current assets:
Customers 492,135 (170) 492,305
Other receivables 69,315 8 69,307
Cash and cash equivalents 186,441 (3,471) 189,912
Other current assets 535,877 (1,260) 537,137
Total current assets 1,283,768 (4,893) 1,288,661
TOTAL ASSETS 2,779,243 (4,353) 2,783,596
Equity:
Equity attributable to shareholders 325,407 - 325,407
Non-controlling interests 35,321 - 35,321
TOTAL EQUITY 360,728 - 360,728
Non-current liabilities:
Provisions 72,934 (1,473) 74,407
Other non-current liabilities 1,011,474 - 1,011,474
Total non-current liabilities 1,084,408 (1,473) 1,085,881
Current liabilities:
Suppliers 167,002 (771) 167,773
Other payables 83,927 (235) 84,162
Other current liabilities 1,083,178 (1,874) 1,085,052
Total current liabilities 1,334,107 (2,880) 1,336,987
TOTAL LIABILITIES 2,418,515 (4,353) 2,422,868
TOTAL LIABILITIES AND EQUITY 2,779,243 (4,353) 2,783,596

Reconciliation of the Consolidated Cash Flow Statement for the quarter ended on 31 March 2013:

1st Q 13
"Restated"
Application
of IFRS 11
1st Q 13
OPERATING ACTIVITIES:
Revenue from customers 262,644 (119) 262,763
Payments to suppliers (248,214) 631 (248,845)
Payments to staff (57,835) 8 (57,843)
Cash flow generated by operations (43,405) 520 (43,925)
Income tax payment/revenue (5,051) - (5,051)
Other revenue/payments relative to operating activity (14,730) (482) (14,248)
Cash flow from operating activities (1) (63,186) 38 (63,224)
INVESTMENT ACTIVITIES:
15,218 - 15,218
Payments relative to:
(23,661) - (23,661)
Cash flow from investment activities (2) (8,443) - (8,443)
FINANCING ACTIVITIES:
Revenue derived from:
Loans raised 844,935 844,935
Payments relative to:
(808,135) - (808,135)
Cash flow from financing activities (3) 36,800 - 36,800
Variation in cash and cash equivalents (4)=(1)+(2)+(3) (34,829) 38 (34,867)
Effect of currency conversion differences (17,101) - (17,101)
Cash and cash equivalents at the beginning of the period 241,961 (4,102) 246,063
Cash and cash equivalents at the end of the period 190,031 (4,064) 194,095

Reconciliation of the Consolidated Income Statement for the quarter ended on 31 March 2013:

1st Q 13
"Restated"
Application
of IFRS 11
1st Q 13
Operating income:
Sales and services rendered 342,310 30 342,280
Other operating income 11,601 (9) 11,610
Total operating income 353,911 21 353,890
Operating costs:
Cost of sales (110,343) - (110,343)
Change in production (1,094) - (1,094)
External supplies and services (108,977) 168 (109,145)
Staff costs (62,069) 8 (62,077)
Amortisation and depreciation (14,276) 3 (14,279)
Provisions and impairment losses in depreciable and amortisable assets and Goodwill (1,294) (174) (1,120)
Other operating costs (17,563) (1) (17,562)
Total operating costs (315,616) 4 (315,620)
Net operating income 38,295 25 38,270
Financial costs and losses (42,568) 16 (42,584)
Financial income and gains 16,918 (36) 16,954
Earnings from investment activities:
Earnings from associates and joint ventures
Other
(326)
1,452
(5) (321)
1,452
Financial results (24,524) (25) (24,499)
Earnings before tax 13,771 - 13,771
Income tax (6,981) - (6,981)
Consolidated net income for the quarter 6,790 - 6,790
Net income attributable to:
Shareholders 7,173 - 7,173
Non-controlling interests (383) - (383)
Earnings per share:
Basic (euros) 0.02 - 0.02
Diluted (euros) 0.02 - 0.02

4 - COMPANIES INCLUDED IN THE CONSOLIDATION PERIMETER

As at 31 March 2014, TEIXEIRA DUARTE, S.A. and the following controlled companies were included in the consolidation, by the full method:

Corporate name Head office Effective percentage
holding
INTERNAL MARKET
CONSTRUCTION
CONSTRUSALAMONDE, ACE Edifício 2, Lagoas Park
Porto Salvo
92.50%
EPOS - Empresa Portuguesa de Obras
Subterrâneas, S.A.
Edifício 1, Lagoas Park
Porto Salvo
100.00%
OFM - Obras Públicas, Ferroviárias e Marítimas, S.A. Edifício 1, Lagoas Park
Porto Salvo
60.00%
SOMAFEL - Engenharia e Obras Ferroviárias, S.A. Edifício 1, Lagoas Park
Porto Salvo
60.00%
TEIXEIRA DUARTE – Engenharia e Construções, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
CONCESSIONS AND SERVICES
INVICTAAMBIENTE - Recolha de Resíduos e Limpeza
Pública, S.A.
Praça do Bom Sucesso, nº 61 - Escritórios 501 e 502
Porto
100.00%
MARINERTES, S.A. Edifício 1, Lagoas Park
Porto Salvo
51.00%
RECOLTE – Serviços e Meio Ambiente, S.A. Edifício 1, Lagoas Park
Porto Salvo
100.00%
SATU-Oeiras - Sistema Automático de Transporte
Urbano, S.A. (a)
Edifício Paço de Arcos, E.N. 249/3
Paço de Arcos
49.00%
TDGI - Tecnologia de Gestão de Imóveis, S.A. Edifício 1, Lagoas Park
Porto Salvo
100.00%
TDHOSP - Gestão de Edifício Hospitalar, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
REAL ESTATE
BONAPARTE - Imóveis Comerciais e Participações, S.A. Edifício 2, Lagoas Park 100.00%
Fundo de Investimento Imobiliário Fechado TDF Porto Salvo
Edifício 2, Lagoas Park
Porto Salvo
100.00%
IMOPEDROUÇOS - Sociedade Imobiliária, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
IMOTD - SGPS, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
QUINTA DE CRAVEL - Imobiliária, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
TDE - Empreendimentos Imobiliários, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
TD VIA - Sociedade Imobiliária, S.A. Edifício 2, Lagoas Park
Porto Salvo
93,75%
TDF - Sociedade Gestora de Fundos de Investimento
Imobiliário, S.A.
Edifício 2, Lagoas Park
Porto Salvo
100.00%
TEIXEIRA DUARTE - Gestão de Participações e Edifício 2, Lagoas Park 100.00%
Investimentos Imobiliários, S.A.
TRANSBRITAL - Transportes e Britas Pio Monteiro
Porto Salvo
Pedreira das Perdigueiras - Laveiras
100.00%
& Filhos, S.A.
V8 - Gestão Imobiliária, S.A.
Paço de Arcos
Edifício 2, Lagoas Park
Porto Salvo
100.00%
Corporate name Head office Effective percentage
holding
HOTEL SERVICES
ESTA - Gestão de Hotéis, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
EVA - Sociedade Hoteleira, S.A. Av. República, nº 1
Faro
100.00%
GO CORP TRAVEL SOLUTIONS – Agência
de Viagens, S.A.
Rua da Comunidade Lusíada, nº 2, Letra C
Faro
100.00%
LAGOASFUT - Equipamento Recreativo e
Desportivo, S.A.
Edifício 2, Lagoas Park
Porto Salvo
100.00%
LAGOAS HOTEL, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
ROCHORIENTAL - Sociedade Hoteleira, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
SINERAMA - Organizações Turísticas e Hoteleiras, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
TDH - SGPS, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
TDHC - Instalações para Desporto e Saúde, S.A. Edifício 2, Lagoas Park
Porto Salvo
100.00%
DISTRIBUTION
BONAPAPEL - Artigos de Papelaria e Equipamentos
Informáticos - Unipessoal, Lda.
Edifício 2, Lagoas Park
Porto Salvo
100.00%
TEIXEIRA DUARTE - DISTRIBUIÇÃO S.A. Edifício 1, Lagoas Park
Porto Salvo
100.00%
ENERGY
ACG - Distribuição e Comércio de Gás, S.A. (b) Rua das Lagoas - Campo Raso
Sintra
48.61%
DIGAL - Distribuição e Comércio, S.A. (b) Rua das Lagoas - Campo Raso
Sintra
47.50%
DNGÁS - Distribuição e Comércio de Gás, S.A. (b) Rua das Lagoas - Campo Raso
Sintra
50.00%
MULTIGÁS - Sociedade Comercial e
Distribuidora de Gás, S.A. (b)
Rua das Lagoas - Campo Raso
Sintra
47.50%
PETRIN - Petróleos e Investimentos, S.A. (b) Edifício 1, Lagoas Park
Porto Salvo
47.91%
PPS - Produtos Petrolíferos, S.A. (b) Edifício 1, Lagoas Park
Porto Salvo
50.00%
PTG - SGPS, S.A. Edifício 1, Lagoas Park
Porto Salvo
100.00%
TANQUIGÁS - Distribuição e Comércio de Gás, S.A. (b) Rua das Lagoas - Campo Raso
Sintra
47.50%
TDARCOL - SGPS, S.A. (c) Edifício 1, Lagoas Park
Porto Salvo
50.00%
AUTOMOTIVE
TDO - Investimento e Gestão, S.A. Rua das Pretas, 4 - Fracção 4 D
Funchal
100.00%
Corporate name Head office Effective percentage
holding
OTHER
C + P.A. - Cimento e Produtos Associados, S.A. Edifício 1, Lagoas Park 100.00%
TDO - SGPS, S.A. Porto Salvo
Rua das Pretas, 4 - Fracção 4 D
100.00%
TEDAL - SGPS, S.A. Funchal
Edifício 2, Lagoas Park
Porto Salvo
100.00%
EXTERNAL MARKET
SOUTH AFRICA
DISTRIBUTION
Global Net Distributors (Pty) Ltd. Po Box 15318
Farrarmere – Benon – Gauteng 1518
South Africa
100.00%
ANGOLA
CONSTRUCTION
BETANGOLA - Betões e Pré-Fabricados de Angola, Lda. Rua Comandante Che Guevara, 67 - 1º D
Luanda
100.00%
CONCESSIONS AND SERVICES
EDUCARE - Actividades Educativas e Culturais, Lda. Rua Amílcar Cabral, 27 - R/C C 100.00%
TDGI - Tecnologia de Gestão de Imóveis, Lda. Luanda
Rua Comandante Che Guevara, 67 - 1º D
Luanda
100.00%
REAL ESTATE
AFRIMO - Empreendimentos Imobiliários, Lda. Rua Amílcar Cabral, 51 - 1º C 51.00%
ANGOPREDIAL - Empreendimentos Imobiliários, Lda. Luanda
Rua Amílcar Cabral, 27 - R/C D
100.00%
IMOAFRO - Empreendimentos Imobiliários, Lda. Luanda
Rua Amílcar Cabral, 27 - R/C D
100.00%
TEIXEIRA DUARTE - Engenharia e Construções Luanda
Rua Amílcar Cabral, 27 - R/C D
100.00%
(Angola), Lda.
URBÁFRICA - Sociedade Imobiliária, Lda.
Luanda
Rua Amílcar Cabral, 35 - 5º C
Luanda
90.00%
HOTEL SERVICES
ALVALADE - Empreendimentos Turísticos e
Hoteleiros, Lda.
Rua Comandante Gika – Bairro Maiango
Luanda
100.00%
ANGOIMO - Empreendimentos e Construções, Lda. Rua Amílcar Cabral, 35 – 5º C 100.00%
HOTEL TRÓPICO, S.A. Luanda
Rua da Missão, 103
Luanda
80.00%
Corporate name Head office Effective percentage
holding
URBANGO - Gestão Imobiliária, Lda. Rua Amílcar Cabral, 27 - R/C D
Luanda
100.00%
DISTRIBUTION
CND – Companhia Nacional de Distribuição, Lda. Rua Amílcar Cabral, 51 - 1º C 100.00%
DCG – Distribuição e Comércio Geral, Lda. Luanda
Avenida Pedro de Castro Van - Dúnem
Luanda
100.00%
AUTOMOTIVE
AUTO COMPETIÇÃO Angola, Lda. Rua Eugénio de Castro, Instalações do 100.00%
AUTO 8, Lda. Cine Atlântico - Luanda
Via A-1, Lote CCB-5 - Pólo Automóvel
100.00%
COMÉRCIO DE AUTOMÓVEIS, Lda. Luanda
Rua Frederich Engels, 9
100.00%
TDA - Comércio e Indústria, Lda. Luanda
Rua Amílcar Cabral, nº 27 R/C, Letra C
100.00%
VAUCO - Automóveis e Equipamentos, Lda. Luanda
Rua Ho Chi Min (Largo 1º de Maio)
Luanda
51.00%
ALGERIA
CONSTRUCTION
TEIXEIRA DUARTE ALGERIE, SPA Parc Miremont, Rue A, nº 136 Bouzareah
Algiers
99.94%
BRAZIL
CONSTRUCTION
EMPA - Serviços de Engenharia, S.A. Rua Major Lopes, 800 100.00%
SOMAFEL Brasil – Obras Ferroviárias e
Marítimas, Ltda.
Bairro São Pedro - Belo Horizonte
Rua Major Lopes, 800 – sala 306
Bairro São Pedro – Belo Horizonte
60.00%
CONCESSIONS AND SERVICES
GONGOJI Montante Energia, S.A. Rua Major Lopes, 800 - sala 310 100.00%
PAREDÃO de Minas Energia, S.A. Bairro São Pedro - Belo Horizonte
Rua Major Lopes, 800 - sala 306
100.00%
TABOQUINHA Energia, S.A. Bairro São Pedro - Belo Horizonte
Rua Major Lopes, 800 - sala 308
Bairro São Pedro - Belo Horizonte
100.00%
REAL ESTATE
TDPG - Empreendimentos Imobiliários
e Hoteleiros, Ltda.
TDSP - Participações, Ltda.
Avenida Domingos Ferreira nº 4060, sala 301
Boa Viagem - Cidade de Recife
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
100.00%
Corporate name Head office Effective percentage
holding
TDSP - Elisa de Moraes, Empreendimentos
Imobiliários, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
90.00%
TDSP - Bela Vista, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP - Galeno de Castro, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP - Maratona, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP - Direitos Humanos, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP – Alta Vista I, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP – Verum Mooca, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
TDSP – Gilberto Sabino, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
95.00%
TDSP – Alta Vista II, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP – Gualaxos, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
TDSP – Alta Vista III, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP – Zanzibar, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.50%
TDSP – Dionísio da Costa, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.50%
TDSP - 11, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
TDSP - 12, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
TDSP – Volta Redonda, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
TDSP - 14, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
TDSP – Alta Vista IV, Empreendimentos
Imobiliários, SPE, Ltda.
Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
92.65%
TDSP - 16, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401
Itaim Bibi - São Paulo
100.00%
TDSP - 17, Empreendimentos Imobiliários, SPE, Ltda. Rua Iguatemi, nº 448, 14º andar, Conjunto 1401 100.00%
DISTRIBUTION
TDD - Distribuição Brasil, Ltda. Rua Iguatemi, nº 448, 6º andar, Conjunto 602
Itaim Bibi - São Paulo
100.00%
CYPRUS
OTHER
LEVENEL, Limited Irakli, Egkomi, 2413
Nicosia
100.00%
SPAIN
CONCESSIONS AND SERVICES
RECOLTE, Servicios Y Medioambiente, S.A.U. Av. Alberto Alcocer, 24 - 7º
Madrid
100.00%
Corporate name Head office Effective percentage
holding
GIBRALTAR
CONSTRUCTION
Teixeira Duarte International, LTD. 23, Portland House - Glacis Road
Gibraltar
100.00%
MACAU
CONSTRUCTION
TEIXEIRA DUARTE - Engenharia e Construções
(Macau), Lda.
Rua de Xangai, 175
Edifício Assoc. Comercial de Macau, 10 A
Macau
100.00%
MOZAMBIQUE
CONSTRUCTION
TEIXEIRA DUARTE - Engenharia e Construções
(Moçambique), Lda.
Av. 24 de Julho, 141
Maputo
74.46%
CONCESSIONS AND SERVICES
TDGI - Tecnologia de Gestão de Imóveis, Lda. Av. 24 de Julho, 141
Maputo
69.55%
REAL ESTATE
IMOPAR - Centro Comercial de Maputo, S.A.R.L. Av. 24 de Julho, 135
Maputo
100.00%
HOTEL SERVICES
AVENIDA - Empreendimentos Turísticos e
Hoteleiros, Lda.
Sociedade Hotel Tivoli, Lda.
Av. 24 de Julho, 135
Maputo
Av. 25 de Setembro, 1321
100.00%
65.00%
TIVOLI BEIRA - Hotelaria e Serviços, Lda. Maputo
Av. 24 de Julho, 141
Maputo
98.72%
NAMIBIA
CONCESSIONS AND SERVICES
KARIBIB Portland Cement (PTY) P O Box 9574 Windhoek 95.00%
KPC Trading and Services Namibia
P O Box 2143 Windhoek
57.00%
SQUIRREL Investments 115 PTY, Ltd. Namibia
P O Box 2143 Windhoek
Namibia
95.00%
RUSSIA
CONCESSIONS AND SERVICES
MMK Cement, Limited Liability Company Murmansk
Russia
70.00%
Corporate name Head office Effective percentage
holding
VENEZUELA
CONSTRUCTION
Consorcio Boyacá – La Guaira Av. San Juan Bosco Ota Coromoto no
Aplica Urb. Altamira – Caracas
Venezuela
57.20%

(a) The Group controls these subsidiaries through the subsidiary TEIXEIRA DUARTE - Engenharia e Construções, S.A.

(b) The Group controls these subsidiaries through the subsidiary TDARCOL - SGPS, S.A.

(c) The Group controls these subsidiaries through the subsidiary PTG - SGPS, S.A.

5 - CHANGES IN THE CONSOLIDATION PERIMETER

During the quarter ended on 31 March 2014, no companies entered or left the consolidation perimeter, relative to the consolidation perimeter as at 31 December 2013.

6 - EXCHANGE RATES

The following exchange rates were used to convert the assets and liabilities expressed in foreign currency as at 31 March 2014 and 31 December 2013, as well as the earnings of operations developed in countries where the functional currency is different from the Euro, for the quarters ended on 31 March 2014 and 2013:

Closing rate Average rate
Currency 31/03/2014 31/12/2013 Var 31/03/2014 31/03/2013 Var
US Dollar 1.3788 1.3791 (0.02%) 1.3727 1.3170 4.23%
Macaense Pataca 11.0182 11.0141 0.04% 10.9707 10.5219 4.27%
Mozambican Metical 41.8200 41.2400 1.41% 41.5575 39.5075 5.19%
Venezuelan Bolivar (a) 14.7532 8.6774 70.02% 15.4689 6.9509 122.55%
Angolan Kwanza 133.9980 134.5920 (0.44%) 133.4458 126.0405 5.88%
Algerian Dinar 108.1372 108.1034 0.03% 107.2769 103.2285 3.92%
Moroccan Dirham 11.2296 11.2621 (0.29%) 11.2338 11.1469 0.78%
Brazilian Real 3.1276 3.2576 (3.99%) 3.2200 2.6376 22.08%
Ukrainian Hryvnia 15.6839 11.3638 38.02% 13.1292 10.6882 22.84%
Namibian Dollar 14.5875 14.5660 0.15% 14.7989 11.7131 26.34%
Cape Verdean Escudo 110.2650 110.2650 - 110.2650 110.2650 -
Russian Rouble 48.7800 45.3246 7.62% 47.9490 40.2378 19.16%
Tunisian Dinar 2.1797 2.2701 (3.98%) 2.1998 2.0621 6.68%
South Africa Rand 14.5875 14.5660 0.15% 14.7989 11.7131 26.34%
Columbian Peso 2,715.9300 2,661.6600 2.04% 2,732.2850 na -

(a) As mentioned in the Introduction, following the new law issued in 2014 by Venezuela (Foreign Exchange Agreement number 25), which establishes a new foreign exchange rate for certain currency sale transactions, applicable as of 24 January 2014, there was significant devaluation of the Venezuelan bolívar during this quarter. Specifically, this legislation is applicable for the settlement of currency sale transactions intended, namely, for the payment of "international investments" (a concept which includes the repatriation of start-up capital and remittance of interest and dividends). The settlement of currency for these transactions will be made at the exchange rate arising from the last allocation of currency made through the auction system (SICAD).

7 – SEGMENTAL INFORMATION

The Group organises its activity according to the following business segments:

  • Construction;
  • Concessions and services;
  • Real estate;
  • Hotel services;
  • Distribution;
  • Energy;
  • Automotive.

The sales and services rendered and the earnings of each of operating segment referred to above, for the quarters ended on 31 March 2014 and 2013 "Restated", were as follows:

Sales and services rendered
1st Q 14 1st Q 13 "Restated" Net operating income
Segment Customers
abroad
Inter-segmental Total Customers
abroad
Inter-segmental Total 1st Q 14 1st Q 13
"Restated"
Construction 175,430 28,697 204,127 160,781 15,449 176,230 35,926 11,760
Concessions and services 17,902 2,764 20,666 16,194 3,922 20,116 718 3,695
Real estate 22,344 2,636 24,980 21,644 3,285 24,929 9,827 4,882
Hotel services 15,238 3,184 18,422 18,253 2,191 20,444 1,290 4,585
Distribution 46,941 1,110 48,051 49,566 2,201 51,767 (2,267) 5,927
Energy 16,452 583 17,035 28,812 689 29,501 214 355
Automotive 62,212 2,577 64,789 47,060 2,781 49,841 12,028 10,705
Not allocated to segments - 976 976 - - - (3,957) (3,636)
Elimination - (42,527) (42,527) - (30,518) (30,518) (34) 22
356,519 - 356,519 342,310 - 342,310 53,745 38,295
Financial costs and losses (Note 9) (53,178) (42,568)
Financial income and gains (Note 9) 32,986 16,918
Earnings from investment activities (Note 9) (5,518) 1,126
Earnings before tax 28,035 13,771

Inter-segmental transactions are carried out under market conditions and terms, equivalent to transactions conducted with third parties.

The accounting policies in the different segments are consistent with the Group's policies.

Other information:

Segment Fixed capital expenditure through Amortisation and depreciation
profit or loss
Provisions and impairment
losses (a)
1st Q 14 1st Q 13
"Restated"
1st Q 14 1st Q 13
"Restated"
1st Q 14 1st Q 13
"Restated"
Construction 9,159 18,474 9,100 7,946 1,189 1,316
Concessions and services 1,361 437 1,044 1,006 (256) 2
Real estate 2,758 187 1,310 611 - (24)
Hotel services 13,197 923 1,919 2,582 - -
Distribution 9,502 2,327 1,577 1,215 - -
Energy 341 2,953 421 452 - -
Automotive 1,206 1,441 587 464 - -
Not allocated to segments - - 1 - - -
37,524 26,742 15,959 14,276 933 1,294

(a) Net impairment losses relative to depreciable and amortisable assets and goodwill.

The assets and liabilities of the segments and their respective reconciliation with the consolidated total, as at 31 March 2014 and 31 December 2013 "Restated", are as follows:

Assets Liabilities
31/03/2014 31-12-2013 "Restated"
Segment Investments in
associates and
joint ventures
(Note 15)
Financial
assets
available for
sale (Note
16)
Other
assets
Total Investments in
associates and
joint ventures
(Note 15)
Financial
assets
available for
sale (Note
16)
Other assets Total 31/03/2014 31-12-2013
"Restated"
Construction 1,286 - 1,904,317 1,905,603 1,552 - 1,849,050 1,850,602 1,369,334 1,431,171
Concessions and services 783 24,560 231,996 257,339 842 25,208 232,336 258,386 179,160 176,292
Real estate 801 73,775 1,610,267 1,684,843 71 54,080 1,565,408 1,619,559 897,765 887,726
Hotel services - - 312,057 312,057 - - 303,808 303,808 221,756 215,297
Distribution - - 228,037 228,037 - - 221,756 221,756 200,004 184,806
Energy 24 - 74,834 74,858 24 - 76,064 76,088 47,386 49,271
Automotive - - 166,202 166,202 - - 146,448 146,448 129,355 108,128
Not allocated to segments 33,706 7,264 1,030,342 1,071,312 33,972 5,325 971,611 1,010,908 222,834 211,041
Elimination - - (2,944,992) (2,944,992) - - (2,708,312) (2,708,312) (923,398) (845,217)
36,600 105,599 2,613,060 2,755,259 36,461 84,613 2,658,169 2,779,243 2,344,196 2,418,515

The sales, services rendered and information on non-current non-monetary assets by geographical segment are broken down as follows for the quarters ended on 31 March 2014 and 2013 and as 31 March 2014 and 31 December 2013 "Restated", respectively:

Sales and services rendered Non-monetary non-current assets
1st Q 13 31-12-2013
Geographic segment 1st Q 14 "Restated" 31/03/2014 "Restated"
Portugal 55,796 73,307 608,024 608,311
Angola 160,093 181,518 398,439 369,578
Algeria 17,287 13,484 11,577 12,395
Brazil 33,073 18,333 53,044 52,643
Spain 7,032 6,450 13,625 12,946
Mozambique 10,477 12,188 26,308 24,911
Venezuela 71,722 34,559 20,063 33,343
Other 1,039 2,471 1,247 1,341
356,519 342,310 1,132,327 1,115,468

Non-current non-monetary assets include goodwill, intangible assets, tangible fixed assets and investment properties.

8 - OPERATING INCOME

For the quarters ended on 31 March 2014 and 2013 "Restated", operating income was as follows:

1st Q 14 1st Q 13
"Restated"
Sales and services rendered:
Sales 287,103 289,470
Services rendered 69,416 52,840
356,519 342,310
Other operating income:
Supplementary income 922 1,369
Reversal of impairment losses in accounts receivable 648 267
Divestment of assets (a) 148 717
Own work capitalised (b) 131 3,014
Reversal of inventory impairment losses 64 1,384
Inventory gains 35 2,348
Tax refunds 2 1,219
Variation in the fair value of investment properties - 260
Other operating income 1,920 1,023
3,870 11,601
360,389 353,911

(a) The gains indicated above were obtained through the divestment of tangible fixed assets.

(b) Own work capitalised essentially corresponds to costs associated to the construction of properties.

9 - FINANCIAL RESULTS

The financial results for the quarters ended on 31 March 2014 and 2013 "Restated" were as follows:

1st Q 14 1st Q 13
"Restated"
Financial costs and losses:
Interest paid (22,747) (18,887)
Unfavourable currency conversion differences (24,648) (17,466)
Other financial costs and losses (5,783) (6,215)
(53,178) (42,568)
Financial income and gains:
Interest received 2,906 4,144
Favourable currency conversion differences 29,324 11,771
Cash discounts received 82 129
Other financial income and gains 674 874
32,986 16,918
Earnings from investment activities:
Earnings from associates and joint ventures (a) (5,900) (326)
Dividends (b) 137 1,146
Other investments 245 306
(5,518) 1,126
Financial results (25,710) (24,524)
  • (a) The earnings from associates and joint ventures for the quarters ended on 31 March 2014 and 2013 "Restated" correspond to the effect of the application of the equity method to these investments (Note 15).
  • (b) As at 31 March 2014, the values presented correspond to dividends received from "Other Investments" (873 thousand euros as at 31 March 2013). As at 31 March 2013, 273 thousand euros were also received from "Financial assets available for sale".

During the quarters ended on 31 March 2014 and 2013, no interest was capitalised on the acquisition cost of qualifying assets.

10 - INCOME TAX

"TD, SA" is subject to the special taxation regime for corporate groups (RETGS), which covers all the companies in which it holds a stake, directly or indirectly, of at least 75% of the respective share capital, provided that this stake confers more than 50% of the voting rights and that they are also resident in Portugal and taxed under the general regime of Corporate Income Tax ("IRC").

All the other participated companies, not covered by the special taxation regime for corporate groups, are taxed individually, based on their respective tax bases and applicable rates of Corporate Income Tax, Municipal Surcharge and State Surcharge.

"TD, S.A." and most of the companies in which it holds a stake, based in Portugal, are subject to Corporate Income Tax ("IRC") at the rate of 23%. Entities which record taxable profit are also subject to the Municipal Surcharge, whose rate may vary to the maximum of 1.5%, as well as the State Surcharge, incident on the portion of taxable profit in excess of 1,500,000 euros, 7,500,000 euros and 35,000,000 euros, at the rates of 3%, 5% and 7%, respectively. Regardless of the profit for tax purposes recorded for the year, the entities referred to above are also subject to autonomous taxation on the expenses and at the rates established in article 88 of the Corporate Income Tax Code.

In the calculation of the taxable profit, to which the aforesaid tax rates are applied, non-acceptable amounts for tax purposes are added to and subtracted from the book value profit or loss. These differences between the book value profit or loss and the profit or loss for tax purposes may be of a temporary or permanent nature.

Pursuant to the legislation in force, tax returns in Portugal may be reviewed and corrected by the tax authorities for a period, in general, of four years (five years for Social Security).

The Board of Directors believes that any corrections which might arise from any tax reviews/inspections to these tax returns will not significantly affect the consolidated financial statements reported as at 31 March 2014.

The Group records deferred taxes corresponding to the temporary differences between the book value of the assets and liabilities and the corresponding tax base, as laid down in IAS 12 - Income Tax (Note 17).

The income taxes recognised for the quarters ended on 31 March 2014 and 2013 are as follows:

1st Q 14 1st Q 13
Current tax:
Income tax in Portugal (11,258) (5,395)
Income tax in other jurisdictions (11,370) (10,235)
Current tax (22,628) (15,630)
Deferred tax (Note 17): 8,349 8,649
(14,279) (6,981)

In addition to the amounts of deferred taxes recorded directly in the income statement, deferred taxes amounting to (4,714) thousand euros were recorded directly in equity as at 31 March 2014 ((942) thousand euros as at 31 March 2013) (Note 17).

11 - EARNINGS PER SHARE

The earnings per share for the quarters ended on 31 March 2014 and 2013 were calculated taking into account the following amounts:

1st Q 14 1st Q 13
Net income for the effect of calculating earnings per basic share (net income for the period) 15,948 7,173
Weighted average number of shares for the effect of calculating earnings per basic share (thousand) 420,000 420,000
Earnings per basic share 0.04 0.02

Due to the fact that, for the quarters ended on 31 March 2014 and 2013, there are no dilution effects of the earnings per share, the diluted earnings per share are the same as the basic earnings per share.

12 - DIVIDENDS

The Company's separate financial statements relative to 31 December 2013 have not yet been approval by the Shareholders, and the General Meeting of Shareholders has been called for 31 May 2013.

13 - TANGIBLE FIXED ASSETS

During the quarters ended on 31 March 2014 and 2013 "Restated", the movements which occurred in the tangible fixed assets, as well as in the respective accumulated depreciation and impairment losses, were as follows:

Land & Buildings Other Tangible fixed Advances
natural & other Basic Transport Tools & Administrative tangible fixed assets on account of
Gross assets: resourcesconstructions equipment equipment utensils equipment fixed assets in progress tang. fixed assets Total
Balance as at 1 January 2013 33,826 409,337 377,713 79,540 36,989 40,078 18,721 43,985 183 1,040,373
Currency conversion adjustments (223) 4,909 687 493 170 542 396 (587) (54) 6,333
Additions - 637 9,898 1,872 777 404 632 9,819 - 24,039
Transfers and write-offs (2) (1,533) 1,235 488 (61) (51) (2,285) 3,079 (129) 740
Divestments (33) (197) (835) (657) (27) (215) (3) - (1,967)
Balance as at 31 March 2013 33,568 413,153 388,698 81,736 37,848 40,758 17,461 56,296 - 1,069,518
Balance as at 1 January 2014 31,683 434,063 406,263 82,356 41,065 41,134 10,004 65,873 - 1,112,441
Currency conversion adjustments 87 (1,053) (1,480) 32 (245) (373) 77 (2,460) - (5,415)
Additions - 634 3,761 2,507 462 403 2,082 27,401 - 37,250
Transfers and write-offs (141) 3,673 (1,060) 400 411 (43) 363 11,264 - 14,867
Divestments - (73) (1,425) (433) (4) (79) - - - (2,014)
Balance as at 31 March 2014 31,629 437,244 406,059 84,862 41,689 41,042 12,526 102,078 - 1,157,129
Accumulated depreciation
and impairment losses:
Balance as at 1 January 2013 166 112,976 274,235 57,894 28,893 31,316 5,155 - - 510,635
Currency conversion adjustments - 353 984 504 11 513 42 - - 2,407
Reinforcements - 3,719 6,366 2,496 625 712 122 - - 14,040
Transfers and write-offs - (161) 56 (40) (69) (35) (7) - - (256)
Divestments - (165) (608) (637) (26) (184) (3) - - (1,623)
Balance as at 31 March 2013 166 116,722 281,033 60,217 29,434 32,322 5,309 - - 525,203
Balance as at 1 January 2014 166 133,284 280,370 58,481 31,097 32,367 5,442 - - 541,207
Currency conversion effect - (342) (248) 20 (194) (83) - - - (847)
Reinforcements - 4,060 7,730 2,226 715 765 165 - - 15,661
Transfers and write-offs - (174) (1,886) 101 (62) (4) (2) - - (2,027)
Divestments - (39) (1,151) (381) (3) (75) - - - (1,649)
Balance as at 31 March 2014 166 136,789 284,815 60,447 31,553 32,970 5,605 - - 552,345
Net value:
As at 31 March 2013 33,402 296,431 107,665 21,519 8,414 8,436 12,152 56,296 - 544,315
As at 31 March 2014 31,463 300,455 121,244 24,415 10,136 8,072 6,921 102,078 - 604,784

The additions to tangible fixed assets carried out during the quarter ended on 31 March 2014 essentially refer to investments in facilities and equipment.

As at 31 March 2014, the tangible assets in progress include 75,316 thousand euros relative to buildings and other constructions in progress, in particular the following:

  • For the Hotel sector, the remodelling of Hotel Trópico in Angola;
  • For the Distribution sector, the expansion of the network of shops in Angola;
  • For the Energy sector, the development of the tank facility project in Aveiro.

14 - INVESTMENT PROPERTIES

During the quarters ended on 31 March 2014 and 2013, the movement which occurred in investment properties was as follows:

2014 2013
Balance as at 1 January 479,965 498,236
Currency conversion adjustments 16 2,517
Increases / divestments (812) (1,435)
Variation in fair value (427) 260
Transfer of tangible fixed assets - 12
Balance as at 31 March 478,742 499,590

The income gained from investment properties arising from operating lease contracts reached 8,119 thousand euros for the quarter ended on 31 March 2014 (7,999 thousand euros as at 31 March 2013). In the quarter ended on 31 March 2014, direct operating costs related to investment properties reached 739 thousand euros (973 thousand euros as at 31 March 2013).

15 - INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The following associates and joint ventures were recorded through the equity method as at 31 March 2014:

Corporate name Head office Effective percentage
holding
ALVORADA PETRÓLEO, S.A. Rua Major Lopes, 800, 3º andar
Belo Horizonte - Minas Gerais - Brazil
43.20%
ALSOMA, GEIE. 3 Av André Malraux
Levallois Peret
27.00%
AVIAS - Grupo Ferroviário para a
Alta Velocidade, ACE
Edifício 1, Lagoas Park
Porto Salvo
14.10%
AVIA PORTUGAL - Produtos Petrolíferos, S.A. Edifício 1, Lagoas Park
Porto Salvo
21.32%
CAIS DE CRUZEIROS 2ª FASE, ACE Rua da Tapada da Quinta de Cima
Linhó – Sintra
15.00%
CONBATE, ACE Edifício 2, Lagoas Park
Porto Salvo
20.00%
CONSORCIO MINERO LUSO VARGAS C.A.
(CONLUVAR)
Av. La Armada, Edifício Centro Socialista Demivargas, Piso 4
1162 La Guaira – Catia La Mar
49.00%
DOURO LITORAL, ACE Edifício 8, Lagoas Park
Porto Salvo
40.00%
D.L.O.E.A.C.E. – Douro Litoral Obras Edifício 2, Lagoas Park 40.00%
Especiais, ACE
ENGIL/MOTA/TEIXEIRA DUARTE
Porto Salvo
Av. Fabril do Norte, 1601
33.33%
– Requalificações Urbanas, ACE
FERROVIAL/TEIXEIRA DUARTE - Obras
Matosinhos
Edifício Central Park
50.00%
Hidráulicas do Alqueva, ACE
GMP – Grupo Marítimo Português, ACE
Rua Alexandre Herculano, Nº 3, 2º - Linda-a-Velha
Edifício 1, Lagoas Park
20,04%
GMP – Grupo Marítimo Português MEK, ACE Porto Salvo
Edifício 1, Lagoas Park
20,04%
GPCC - Grupo Português de Construção de Porto Salvo
Rua Senhora do Porto, 930
25.00%
Infraestruturas de Gás Natural, ACE
GPCIE - Grupo Português de Construção de
Porto
Edifício Sagres
25.00%
Infraestruturas da Expo, ACE
IMOC - Empreendimentos Imobiliários, S.A.R.L.
Rua Professor Henrique de Barros, nº 4, 2 A - Prior Velho
Av. 24 de Julho, 135
Maputo
4.,92%
Limited Liability Company Cement Khutorskya Str., 70
Odessa
49.00%
METROLIGEIRO - Construção de
Infraestruturas, ACE
Estrada da Luz, 90 - 6º E
Lisbon
26.80%
NOVA ESTAÇÃO, ACE Av. Frei Miguel Contreiras, nº 54, 7º
Lisbon
25.00%
RPK Gulfstream, Ltd. Tri Ruchja str.
183003, Murmansk
42.70%
SCP AK10 - Empreendimentos e
Participações SPE Ltda.
Avenida Alameda Santos, nº 960 - 19º,
Edifício CYK, Cerqueira César, São Paulo
25.00%
SOMAFEL/FERROVIAS, ACE Av. Columbano Bordalo Pinheiro, 93 - 7º
Lisbon
36.00%
STELGEST - Gestão Hoteleira, S.A. Edifício 2, Lagoas Park 45.00%
TEIX.CO, SPA Porto Salvo
BP 62B Zone D'Active Dar El Beida
Algiers
48.78%
TEIXEIRA DUARTE - SOPOL - Metro
Superfície, ACE
Edifício 2, Lagoas Park
Porto Salvo
57.30%
holding
TEIXEIRA DUARTE/OPCA - Fungere – Parcela
1.18 do Parque das Nações em Lisboa
- 3ª Fase – Empreitada de Acabamentos
e Instalações Especiais dos Edifícios
para o Hotel e Escritórios, ACE
Edifício 2, Lagoas Park
Porto Salvo
60.00%
TRÊS PONTO DOIS - Trabalhos Gerais de
Construção Civil, Via e Catenária
de Modernização da Linha
do Norte, ACE
Av. das Forças Armadas, 125 - 2º C
Lisbon
50.00%

The investments in associates showed the following movements during the quarters ended on 31 March 2014 and 2013 "Restated":

Holdings Goodwill Total
Balance as at 1 January 2013 40,155 11,703 51,858
Effects of the application of the equity method:
- Effect on net income for the period (Note 9) (326) - (326)
- Effect on equity (76) - (76)
Currency conversion adjustments 180 - 180
Other 366 3 369
Balance as at 31 March 2013 40,299 11,706 52,005
Balance as at 1 January 2014 24,768 11,693 36,461
Effects of the application of the equity method:
- Effect on net income for the period (Note 9) (5,900) - (5,900)
- Effect on equity 2,671 - 2,671
Increases 865 - 865
Currency conversion adjustments (34) 2 (32)
Other 2,535 - 2,535
Balance as at 31 March 2014 24,905 11,695 36,600

The investments in associates and joint ventures as at 31 March 2014 and 31 December 2013 "Restated" are detailed as follows:

31/03/2014 31-12-2013 "Restated"
Associates Holdings Goodwill Value of
financial
position
Holdings Goodwill Value of
financial
position
Limited Liability Company Cement (a) 16,072 11,643 27,715 16,072 11,643 27,715
IMOC - Empreendimentos Imobiliários, S.A.R.L. 5,991 - 5,991 6,257 - 6,257
RPK Gulfstream, Ltd. 783 - 783 842 - 842
Alvorada Petróleos, S.A. 728 - 728 - - -
SCP AK10 - Empreendimentos e Participações SPE Ltda. 21 52 73 21 50 71
Other 1,310 - 1,310 1,576 - 1,576
24,905 11,695 36,600 24,768 11,693 36,461

(a) Financing loan of 16,072 thousand euros as at 31 March 2014 and 31 December 2013 "Restated".

The holdings referred to above are recorded through the equity method which, in the quarters ended on 31 March 2014 and 2013 "Restated", had the following impacts:

1st Q 14
Gains and
losses in
associates
(Note 9)
Adjustments
of holdings
Dividends Total
Alvorada Petróleos, S.A. 4 60 - 64
Limited Liability Company Cement (5,324) 2,583 - (2,741)
IMOC - Empreendimentos Imobiliários, S.A.R.L. (621) - - (621)
SCP AK10 - Empreendimentos e Participações SPE Ltda. (1) - - (1)
Other 42 28 - 70
(5,900) 2,671 - (3,229)
Alvorada Petróleos, S.A.
Limited Liability Company Cement
4
60 - 64
(5,324) 2,583 - (2,741)
IMOC - Empreendimentos Imobiliários, S.A.R.L. (621) - - (621)
SCP AK10 - Empreendimentos e Participações SPE Ltda. (1) - - (1)
Other 42 28 - 70
(5,900) 2,671 - (3,229)
1st Q 13 "Restated"
Gains and
losses in
associates Adjustments
Associates
Alvorada Petróleos, S.A.
(Note 9)
(157)
of holdings
(21)
Dividends
-
Total
(178)
Limited Liability Company Cement (137) (56) - (193)
IMOC - Empreendimentos Imobiliários, S.A.R.L. 65 641 - 706
SCP AK10 - Empreendimentos e Participações SPE Ltda. (2) - - (2)
Other (95) (640) - (735)
(326) (402)
16 -
FINANCIAL ASSETS AVAILABLE FOR SALE
During the quarters ended on 31 March 2014 and 2013, the movements which occurred in the valuation of the financial assets
available for sale, stated at their respective fair value, were as follows:
(76) -
2014 2013
Fair value as at 1 January 84,613 48,597
Increase in fair value 20,986 7,346
Fair value as at 31 March 105,599 55,943
As at 31 March 2014 and 31 December 2013, the Group held 357,000,000 shares of Banco Comercial Português, S.A., classified
as financial assets available for sale.
The financial assets available for sale, and their respective cost and market values, as at 31 March 2014 and 31 December 2013,
are as follows:
31/03/2014 31/12/2013
Cost value Market value Cost value Market value
Banco Comercial Português, S.A.
Banco Bilbao Vizcaya Argentaria, S.A.
717,321
35,958
81,039
24,560
717,321
35,958
59,405
25,208

16 - FINANCIAL ASSETS AVAILABLE FOR SALE

2014 2013
Fair value as at 1 January 84,613 48,597
Increase in fair value 20,986 7,346
Fair value as at 31 March 105,599 55,943
31/03/2014 31/12/2013
Cost value Market value Cost value Market value
Banco Comercial Português, S.A. 717,321 81,039 717,321 59,405
Banco Bilbao Vizcaya Argentaria, S.A. 35,958 24,560 35,958 25,208
753,279 105,599 753,279 84,613

17 - DEFERRED TAXES

All situations which might significantly affect future taxes are stated through the application of the deferred tax rule.

During the quarters ended on 31 March 2014 and 2013, the movements which occurred in deferred tax assets and liabilities, in accordance with the temporary difference which generated them, were as follows:

Deferred tax assets Deferred tax
liabilities
2014 2013 2014 2013
Balance as at 1 January 188,514 111,912 52,693 57,979
Constitution / Reversal
Net income (Note 10) 8,564 8,818 215 169
Equity (4,906) (942) (192) -
Currency conversion effect and adjustments 143 (515) 24 456
Balance as at 31 March 192,315 119,273 52,740 58,604

Deferred tax assets are only recorded insofar as it is considered that taxable profits are likely to occur in future taxation periods which may be used to recover the tax losses or deductible tax differences. This assessment was based on the business plans of the Group's companies, periodically reviewed and updated, on the prospects of generating taxable earnings.

As of 1 January 2014, the deduction of tax losses in Portugal, including tax losses recorded in previous periods, is limited to 70% of the taxable profit for the year when this deduction is made.

18 - RELATED PARTIES

The transactions and balances between "TD, S.A." and the Group's companies included in the consolidation perimeter, which are related parties, were eliminated in the consolidation process and are not disclosed in the present note. The balances and transactions between the Group and associates, joint ventures, related parties and individuals with significant voting rights and their own companies, are detailed below.

The terms or conditions applied between these related parties are, in substance, identical to those which would normally be contracted, accepted and applied between independent entities in comparable transactions.

The main balances with related entities as at 31 March 2014 and 31 December 2013 "Restated" are detailed as follows:

Balance receivable Balance payable Loans granted Other debts
Entity 31/03/2014 31-12-2013
"Restated"
31/03/2014 31-12-2013
"Restated"
31/03/2014 31-12-2013
"Restated"
31/03/2014 31-12-2013
"Restated"
AEBT - Auto Estradas do Baixo Tejo, S.A. - - - - 5,373 819 - -
AEDL - Auto Estradas do Douro Litoral, S.A. - - - - 1,202 1,202 - -
ALSOMA, GEIE - - - 24 - - - -
AVIAS, ACE - 48 - - - - -
AVIA PORTUGAL, S.A. - - - - - - -
CINTEL - Construção Interceptor Esgotos, S.A. 46 46 - - 4 4 - -
CONBATE, ACE 35 57 - - - - - 24
Minero Luso Vargas Consortium - CONLUVAR 2,793 4,783 358 779 - - 3 6
OPSUT 2010 Consortium 1,414 1,560 424 - - - - -
DOURO LITORAL, ACE 71 50 62 61 - - - (102)
DOURO LITORAL OBRAS ESPECIAIS, ACE 1 - - - - - (269) (269)
EIA - Ensino de Investigação e Administração, S.A. 9 - - - - - (324) (324)
GMP - Grupo Maritimo Português, ACE 70 58 10 10 - - - -
GMP – Grupo Marítimo Português MEK, ACE 22 21 - - - - - -
GPCC - Grupo Português de Construção de Infraestruturas de
Gás Natural, ACE - 79 - 59 - - - (48)
GPCIE - Grupo Português de Construção de Infraestruturas da
Expo, ACE - - - - - - - (1)
IMOC - Empreendimentos Imobiliários, S.A.R.L. 4,525 1,554 - - - - (2,104) (2,092)
Limited Liability Company Cement 147 - - - 16,072 16,072 - -
LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. - - - - 150 150 - -
METROLIGEIRO - Construção de Infraestruturas, ACE 20 14 1 1 - - - (2)
Moreira e Cunha, Lda. 25 33 - - - - - (80)
MTS - Metro Transportes do Sul, S.A. - - - - 740 740 - -
NOVA ESTAÇÃO, ACE 805 1,005 35 35 - - - -
Promociones Inmobiliárias 3003, C.A. - 55 - - - - (31) (37)
RPK Gulfstream, Ltd. - - - - 2,045 2,200 - -
SOMAFEL/FERROVIAS, ACE - 1 - - - - - -
STELGEST - Gestão Hoteleira, S.A. - 19 - - - - (687) (736)
TEGAVEN - Teixeira Duarte Y Asociados, C.A. 4,729 6,106 794 1,349 82 139 37,269 68,521
TEIX.CO SPA 1,381 1,381 720 720 - - (291) (291)
TEIXEIRA DUARTE/OPCA - Fungere - Parcela 1.18 do Parque das
Nações em Lisboa - 3ª Fase - Empreitada de Acabamentos
e Instalações Especiais dos Edifícios para o Hotel e
Escritórios, ACE 65 64 11 6 - - - (2)
TEIXEIRA DUARTE - SOPOL - Metro Superfície, ACE 24 17 71 54 - - - -
TRÊS PONTO DOIS - Trabalhos Gerais de Construção Civil, Via e
Catenária de Modernização da Linha do Norte, ACE - 1 35 35 - - - (134)
NOVA ESTAÇÃO, ACE
VSL Sistema de Pré-Esforço - Equipamento de Montagem, S.A. - - 3 - - - - -
16,182 16,952 2,524 3,133 25,668 21,326 33,566 64,433

The main transactions carried out in the quarters ended on 31 March 2014 and 2013 "Restated", with related entities were as follows:

Sales and services rendered Purchases and services received Interest debited
1st Q 14 1st Q 13
"Restated"
1st Q 14 1st Q 13
"Restated"
1st Q 14 1st Q 13
"Restated"
CONBATE, ACE 60 67 - - - -
Minero Luso Vargas Consortium - CONLUVAR 55 499 2,885 2,212 - -
OPSUT 2010 Consortium 139 598 186 646 - -
DOURO LITORAL, ACE 15 25 5 - - -
GMP - Grupo Maritimo Português, ACE 12 - - - - -
GMP – Grupo Marítimo Português MEK, ACE 1 - - - - -
GPCC - Grupo Português de Construção de Infraestruturas de
Gás Natural, ACE - - 2 - - -
IMOC - Empreendimentos Imobiliários, S.A.R.L. 2,329 5 62 21 - -
Limited Liability Company Cement - - - - 442 442
METROLIGEIRO - Construção de Infraestruturas, ACE 5 - - - - -
Moreira e Cunha, Lda. 23 14 - - - -
STELGEST - Gestão Hoteleira, S.A. 11 26 2 - - 16
SOMAFEL/FERROVIAS, ACE - 1 - - - -
TEIX.CO SPA - - - - - -
TEIXEIRA DUARTE/OPCA - Fungere - Parcela 1.18 do Parque das
Nações em Lisboa - 3ª Fase - Empreitada de Acabamentos
e Instalações Especiais dos Edifícios para o Hotel e
Escritórios, ACE 1 - 5 - - -
TEIXEIRA DUARTE - SOPOL - Metro Superfície, ACE 11 15 17 - - -
TEGAVEN - Teixeira Duarte Y Asociados, C.A. 29 - 73 - - -
VSL Sistema de Pré-Esforço - Equipamento de Montagem, S.A. - - 3 - - -
2,691 1,250 3,240 2,879 442 458

The remunerations of the members of the governing bodies of TD, S.A. for the quarters ended on 31 March 2014 and 2013 were as follows:

1st Q 14 1st Q 13
Executive directors:
Short term benefits 214 177
Supervisory board:
Short term benefits 17 17
Chartered accountant:
Short term benefits 15 15
246 209

The remunerations of the members of the senior management staff of TD, S.A. for the quarters ended on 31 March 2014 and 2013 were as follows:

1st Q 14 1st Q 13
Senior staff:
Short term benefits 1,573 1,811
1,573 1,811

19 - NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

Cash and cash equivalents

As at 31 March 2014 and 31 December 2013 "Restated", this heading is broken down as follows:

31/03/2014 31-12-2013
"Restated"
Demand deposits 124,071 134,088
Term deposits 32,772 34,104
Other cash investments 6,081 2,704
Cash 8,989 15,545
171,913 186,441

The heading of cash and cash equivalents includes cash, deposits repayable on demand, term deposits and cash investments with maturity of less than three months, repayable on demand and with insignificant risk of change of value.

Cash flow from investment activities

The revenue derived from financial investments in the quarters ended on 31 March 2014 and 2013, refer to the divestment of holdings in the following entities:

1st Q 14 1st Q 13
Banco Bilbao Vizcaya Argentaria, S.A. 10,654 5,642
Banco Comercial Português, S.A. - 2,823
Other - 219
10,654 8,684

The payments relative to financial investments in the quarters ended on 31 March 2014 and 2013, refer to the acquisition of holdings in the following entities:

1st Q 14 1st Q 13
Banco Bilbao Vizcaya Argentaria, S.A. 10,965 5,680
AEBT - Vias do Baixo Tejo, S.A. 4,554 -
Other 84 274
15,603 5,954

The dividends received in the quarters ended on 31 March 2014 and 2013, were as follows:

1st Q 14 1st Q 13
CPM - Companhia de Parques de Macau, S.A.R.L. 137 213
Banco Bilbao Vizcaya Argentaria, S.A. - 375
LUSOPONTE - Concessionária para a Travessia do Tejo, S.A. - 392
Other - 166
137 1,146

20 - SHARE CAPITAL

As at 31 March 2014 and 2013, the underwritten and paid-up share capital was represented by 420,000,000 shares with the nominal value of 0.50 euro each.

As at 31 March 2014, TEIXEIRA DUARTE - Sociedade Gestora de Participações Sociais, S.A. directly held 197,950,000 shares representing the share capital of TEIXEIRA DUARTE, S.A., corresponding to 47.13% of its share capital.

21 - RESERVES AND RETAINED EARNINGS

Legal reserve: Pursuant to the current legislation, the Company is obliged to transfer at least 5% of its annual net income to the legal reserve, until it reaches at least 20% of the share capital. This reserve is not distributable to the shareholders, but may be used to absorb losses, after all the other reserves have been depleted, or incorporated in the share capital.

Fair value reserve: The fair value reserve arises from the difference between the cost value and market value of the financial assets available for sale, not yet recognised in the income statement.

Free reserves: The free reserves are available for distribution.

Hedge operation reserve: The hedge operation reserve reflects the effective component (net of the tax effect) of net changes in the fair value of derivative financial instruments classified as cash flow hedges.

22 - LOANS

As at 31 March 2014 and 31 December 2013, the following loans had been raised:

31/03/2014 31/12/2013
Non-current liabilities:
Bank loans a) 199,765 209,200
Commercial paper b) 471,722 471,780
671,487 680,980
Current liabilities:
Bank loans a) 632,310 569,278
Commercial paper b) 62,500 112,348
694,810 681,626
1,366,297 1,362,606

a) Bank loans

As at 31 March 2014, the domestic bank loans, bank overdrafts and pledged current accounts earned interest at the weighted annual average rate of 4.83% (3.74% as at 31 March 2013).

As at 31 March 2014, the most significant bank loans contracted by the Group essentially correspond to:

Loan raised from Banco Caixa Geral (Spain), contracted on 11 February 2008 of the present value of 15,820 thousand euros, which will fall due on 11 February 2016.

Loan raised from Caixa Banco de Investimento, S.A. and Caixa Geral de Depósitos, S.A., contracted on 21 February 2008 of the present value of 47,276 thousand euros, which will be repaid in 40 equal and successive instalments, ending on 10 December 2033.

Loan raised from Banco BIC de Angola, contracted on 20 October 2008 of the present value of 1,815 thousand euros, which will fall due on 27 November 2014.

Loan taken out by the Group at Caixa Geral de Depósitos, S.A. on 30 December 2008, of the present value of 34,329 thousand euros, which will be repaid in 117 equal and successive monthly instalments, ending on 30 December 2023.

Loan raised from Banco Fomento de Angola, contracted on 6 February 2009 of the present value of 272 thousand euros, which will fall due on 30 September 2014.

Loan raised from Banco Caixa Geral Totta Angola, contracted on 21 December 2011 of the present value of 14,715 thousand euros, which will fall due on 28 February 2019.

Loan raised from Banco Espírito Santo de Investimento, S.A., contracted on 29 December 2011, of the present value of 1,352 thousand euros, which will fall due on 27 November 2015.

Loan raised from Banco Bradesco, S.A., contracted on 27 March 2012 of the present value of 8,034 thousand euros, which will fall due on 27 November 2015.

Loan raised from Banco BPI, S.A., contracted on 19 July 2012 of the present value of 2,139 thousand euros, which will fall due on 19 July 2015.

Loan raised from Banco BIC de Angola, contracted on 9 October 2012 of the present value of 11,940 thousand euros, which will fall due on 5 December 2019.

Loan raised from Banco BIC de Angola, contracted on 9 October 2012 of the present value of 26,513 thousand euros, which will fall due on 13 December 2019.

Loan raised from Banco Privado Atlântico, contracted on 12 October 2012 of the present value of 20,135 thousand euros, which will fall due on 18 October 2017.

Loan raised from Banco Popular Portugal, S.A., contracted on 13 December 2012, of the present value of 5,419 thousand euros. The present principal will be repaid over the contract period, and in accordance with the table of agreed haircuts, by the product of the sale of the mortgaged real estate properties, with the remainder being settled through bullet repayment on 13 December 2015.

Factoring line from Banco Espírito Santo, S.A. of the amount of 35,000 thousand euros, which is being used to the value of 34,887 thousand euros.

Under a credit line from Caixa Geral de Depósitos, S.A. of the amount of 35,000 thousand dollars of the United States of America, for advances on revenue from invoices relative to exports, which is used to the value of 19,456 thousand dollars.

Under a Commercial Discount Line abroad (advance of credit letters), at Banco Espírito Santo, S.A. of the amount of 40,000 thousand euros, which is being used to the value of 19,466 thousand euros as at 31 March 2014.

As at 31 March 2014 and 31 December 2013, the bank loans also include pledged current accounts of the value of 492,449 and 453,408 thousand euros, respectively.

b) Commercial paper

As at 31 March 2014, the Group had negotiated the following commercial paper programmes:

  • Grouped programme for the placing and underwriting of commercial paper contracted with Banco Espírito Santo de Investimento, S.A. and Banco Espírito Santo, S.A. on 16 December 2005, to the sum of 100,000 thousand euros, currently 46,000 thousand euros, in which TEIXEIRA DUARTE - Engenharia e Construções, S.A. and its associate TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. take part, with the entire amount being used by TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. The participation of each company in the programme may vary each time it is used. The duration of the programme is five years minus one day, counted as of the contract signing date. The issue periods are from 1 to 6 months and earn interest in advance at the Euribor rate of the period plus a spread of 2.5%, with the repayment of the last issue being on 20 August 2018. This programme stipulates semi-annual repayments starting on 20 August 2015 of the value of 1,000 thousand euros on the first date and 2,500 thousand euros thereafter, and settlement of the remaining value on the repayment date of the last issue of the programme.

Programme for the placing and underwriting of commercial paper commercial paper, contracted with Banco Comercial Português, S.A. on 18 August 2008, of 20,000 thousand euros, with annual renovation. The interest is earned in arrears, with the rate being indexed to the three-month Euribor plus a spread of 5.75% determined according to each issue date.

Programme for the placing and underwriting of commercial paper commercial paper, contracted with Banco Comercial Português, S.A. on 18 August 2008, of 25,000 thousand euros, with annual renovation. The interest is earned in arrears, with the rate being indexed to the three-month Euribor plus a spread of 5.75% determined according to each issue date.

Grouped programme, for the placing and underwriting of commercial paper contracted with Caixa Geral de Depósitos, S.A. on 7 July 2010, to the sum of 70,000 thousand euros, in which TEIXEIRA DUARTE - Engenharia e Construções, S.A. and its associate TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. take part, with the entire amount being used by TEIXEIRA DUARTE - Engenharia e Construções, S.A. The participation of each company in each programme may vary each time it is used. The programme was reduced to 60,000 thousand euros on 28 April 2011 and renewed on 11 May 2012 for a further 3 years counted as of 14 April 2012. The current amount is 50,000 thousand euros, with another repayment of 10,000 thousand having been established for 14 May 2014. The interest is earned in advance on each subscription date, with the intervention rate being indexed to the Euribor for the respective period, in force on the second business day prior to each subscription date, plus 5.25% and determined in accordance with the date of each auction.

Programme for the placing and underwriting of commercial paper contracted with Banco Espírito Santo Investimento, S.A. and Banco Espírito Santo, S.A. on 28 December 2010, of the amount of 34,000 thousand euros, in which TEIXEIRA DUARTE - Engenharia e Construções, S.A. participates. The programme had an initial use of three years, which was extended up to 28 January 2015 counted as of the contract signing date. The interest is earned in advance on each subscription date, with the intervention rate being indexed to the Euribor for the respective period, in force on the second business day prior to each subscription date, plus 3% and determined in accordance with the date of each auction.

Grouped programme for the placing and underwriting of private commercial paper contracted on 14 January 2011 with Banco Comercial Português, S.A., with the total amount used being 20,750 thousand euros, in which TEIXEIRA DUARTE - Engenharia e Construções, S.A. and its associate TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. take part, to the amounts of 18,650 thousand euros and 2,100 thousand euros, respectively. The participation of each company in the programme may vary each time the programme is used, with TEIXEIRA DUARTE - Engenharia e Construções, S.A. being required to participate with at least 10% of the total value. The duration of the programme is five years, starting from the contract signing date, the interest is earned on a six-monthly basis in arrears, with the reference rate being indexed to the one to sixmonth Euribor under competitive auction for periods of 7 to 180 days via direct placement, increased by 4.375% and determined according to the date of each auction, with the repayment of the last issue being made on 6 January 2016.

Grouped programme for the placing and underwriting of commercial paper contracted on 28 December 2011, with Banco Comercial Português, S.A. of the total amount of 43,000 thousand euros, currently 36,000 thousand euros, in which TEIXEIRA DUARTE, S.A., TEIXEIRA DUARTE - Engenharia e Construções, S.A. and TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. take part, where on this date the amounts used by each were 250 thousand euros, 250 thousand euros and 35,500 thousand euros, respectively. Each of the future issues must necessarily be carried out together by all the issuers and the participation of each issuer cannot be less than 250 thousand euros. The programme may be used over seven years counted as of the date of the first issue, with repayments being foreseen at the end of each semester at increasing values between 2,000 thousand euros and 6,500 thousand euros. The applicable interest rate is the Euribor for each issue period, in force on the second business day prior to its beginning, increased by a spread of 4.25%.

Grouped programme for commercial paper issues, contracted on 6 November 2013 with Banco Espírito Santo, S.A. and Banco Espírito Santo de Investimento, S.A., of the value of 100,000 thousand euros, in which Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A. and Teixeira Duarte – Engenharia e Construções, S.A. participate, with the amounts of 90,000 thousand euros and 10,000 thousand euros, respectively. The participation of each company in the programme may vary in each of its issues. The duration of the programme is five years, counted as of the contract signing date, with the interest falling due in advance and the reference rate being indexed to the Euribor for the respective period, in force on the second business day prior to each subscription date, plus a spread of 5.00% and determined according to the date of each auction, with the repayment of the last issue being on 6 November 2018. The Programme will be subject to partial repayments, to occur on a semi-annual basis as of May 2015 of 1,500 thousand euros, as of May 2016 of 2,000 thousand euros, and the penultimate instalment being in May 2018 of 2,500 thousand euros.

Grouped programme for commercial paper issues, contracted on 30 December 2013 with Banco Espírito Santo, S.A. and Banco Espírito Santo de Investimento, S.A., of the value of 203,000 thousand euros, granted by the issuers Teixeira Duarte – Engenharia e Construções, S.A. and Teixeira Duarte - Gestão de Participações e Investimentos Imobiliários, S.A., and by the guarantors TEDAL – Sociedade Gestora de Participações Sociais, S.A., Teixeira Duarte – Engenharia e Construções, S.A., Quinta de Cravel – Imobiliária, S.A. and V8 – Gestão Imobiliária, S.A., which is being fully used by Teixeira Duarte – Engenharia e Construções, S.A.. The participation of each company in each programme may vary in each of its issues. The duration of the programme is five years minus 1 day, counted as of the contract signing date, with the interest falling due in advance and the reference rate being indexed to the Euribor for the respective period, in force on the second business day prior to each subscription date, plus a spread of 5.00% and determined according to the date of each auction, with the repayment of the last issue being on 29 November 2018. The Programme will be subject to partial repayments, to occur on a semi-annual basis as of April 2014 of 1,250 thousand euros, on December 2015 of 8,000 thousand euros, and as of June 2016 of 5,000 thousand euros.

As at 31 March 2014 and 31 December 2013, the repayment of non-current bank loans is defined as follows:

31/03/2014 31/12/2013
2015 168,908 164,209
2016 67,685 82,051
2017 46,778 46,190
2018 318,113 323,461
2019 and following 70,003 65,069
671,487 680,980

As at 31 March 2014 and 31 December 2013, the funding in foreign currency was expressed as follows:

Currency 31/03/2014 31/12/2013
Currency Euro Currency Euro
Venezuelan Bolivar 968,637 65,656 409,000 47,134
US Dollar 45,418 32,940 80,572 58,423
Moroccan Dirham 691 62 - -
Angolan Kwanza 14,436,881 107,740 12,754,485 94,764
South African Rand 1,218 84 1,117 77
Brazilian Real 45,304 14,485 40,487 12,428

The loans denominated in foreign currency earn interest at market rates and were converted into euros based on the exchange rate as at the reporting date.

23 - CONTINGENT LIABILITIES, GUARANTEES AND COMMITMENTS

Contingent liabilities:

Following various inspections conducted by the Taxation and Customs Authority (AT) to the accounts of TEIXEIRA DUARTE - Gestão de Participações Investimentos Imobiliários, S.A. ("TDGPII, S.A."), a company 100% held indirectly by TEIXEIRA DUARTE, S.A. relative to the financial years of 2007 to 2011, the following corrections were made to the tax losses that had initially been reported for this participated company:

Calculated AT
Year tax loss Correction
2007 46,632 29,331
2008 50,590 45,938
2009 50,182 24,807
2010 18,165 6,467
2011 12,779 3,213

With the exception of the amount of 611 thousand euros included in the correction to the tax loss for 2008 (relative, according to the AT, to the undue application of number 10 of article 22 of the EBF to the distribution of income by the TDF Real Estate Investment Fund), these corrections arise entirely from the non-acceptance, as a tax cost, of the financial costs incurred with the investment made in participated companies under the form of additional paid-in capital.

Since "TDGPII S.A." is subject to corporate income tax (IRC) in accordance with the special taxation scheme for groups of companies (RETGS) (article 69 and following of the IRC Code), the corrections to the tax losses of the financial years of 2008 and 2009 were the object of Statements of Payment of IRC and compensatory interest issued to the controlling company, TEIXEIRA DUARTE - Engenharia e Construções, S.A., which filed judicial reviews at the Administrative and Fiscal Court of Sintra.

During 2013, "TD-EC, SA", as the controlling company, was notified of the Report of Conclusions for the financial year of 2010 and consequent additional Statements of Payment of IRC and compensatory interest associated to the corrections for the financial year of 2010. The Company is currently preparing the corresponding objection, considering the applicable legal periods.

Notwithstanding the unfavourable outcome to the claims of "TDGPII, S.A." and, consequently, the controlling company, under the proceedings relative to the financial year of 2006, the Board of Directors continues to expect a different outcome for the other financial years under court proceedings.

It should be noted that the Statement of Payment of IRC and compensatory interest for the financial year of 2008 issued to "TD-EC, S.A.", as the controlling company, apart from the corrections described above relative to the participated company "TDGPII, S.A.", also includes a correction to the taxable profit calculated at an individual level for "TD-EC, S.A.".

The total amount of corrections to taxable profit reached 35,467 thousand euros, of which "TD-EC, S.A." objected to 32,595 thousand euros, related to tax credit, the system of re-investment of tax gains and the undue application of number 10 of article 22 of the EBF.

The correction relative to the financial year of 2011 for the participated company "TDGPII, S.A." had not been the object of any additional payment required by the controlling company, as at the closing date of March 2014.

Guarantees:

As at 31 March 2014 and 31 December 2013 "Restated", the group of companies included in the consolidation had provided the following guarantees to third parties:

31/03/2014 31-12-2013
"Restated"
Bank guarantees provided 309,353 326,831
Fidelity insurance 295,811 379,078

The bank guarantees were essentially provided for the effect of tenders, advances received and as a completion bonds for works.

TEIXEIRA DUARTE - Engenharia e Construções, S.A., EPOS - Empresa Portuguesa de Obras Subterrâneas, S.A., SOMAFEL - Engenharia e Obras Ferroviárias, S.A., OFM - Obras Públicas, Ferroviárias e Marítimas, S.A., RECOLTE, Serviços e Meio Ambiente, S.A., RECOLTE, Servicios y Medioambiente, S.A.U., EMPA - Serviços de Engenharia, S.A. and the Boyacá - La Guaira Consortium, have provided completion bonds in order to guarantee the good implementation of works and services rendered.

In order to secure the loan contract signed with Banco Caixa Geral, S.A., of the present value of 15,820 thousand euros, granted by RECOLTE, Servicios y Medioambiente, S.A.U., RECOLTE, Servicios y Medioambiente, S.A.U. pledged 2,400,000 shares of Banco Bilbao Vizcaya Argentaria, S.A.

A mortgage was also constituted in favour of Caixa Geral de Depósitos, S.A. on lot 3, situated in Lagoas Park, owned by TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A., to secure a loan contract granted by TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. of the present value of 34,329 thousand euros.

In order to secure a contract signed with Banco Caixa Totta Angola, of the present value of 14,715 thousand euros, URBANGO - Gestão Imobiliária, Lda. mortgaged a property owned by it, number 256 - 1st section, located in Chicala.

In order to secure a contract signed with BIC, of the present value of 26,513 thousand euros, ANGOIMO - Empreendimentos e Construções, Lda. mortgaged a property owned by it, number 2554, located in Samba.

In order to secure a contract signed with BIC, of the present value of 11,940 thousand euros, ANGOIMO - Empreendimentos e Construções, Lda. mortgaged a property owned by it, number 2554, located in Samba.

In order to secure a loan contract signed with Banco BPI, S.A., of the present value of 2,139 thousand euros, TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. mortgaged 12 fractions of the property located at Campo Grande, number 9 in Lisbon.

In order to secure the commercial paper contract signed on 28 December 2011 with Banco Comercial Português, S.A., of the present value of 36,000 thousand euros, granted by TEIXEIRA DUARTE, S.A., TEIXEIRA DUARTE - Engenharia e Construções, S.A. and TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A., constituted a general mortgage on the properties implanted respectively on lots 6, 18 and 19, located in Lagoas Park, owned by TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A.

In order to secure the loan of the present value of 5,419 thousand euros, signed with Banco Popular Portugal, S.A. on 13 December 2012, granted by TEIXEIRA DUARTE - Engenharia e Construções, S.A., TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários S.A., QUINTA DE CRAVEL - Imobiliária, S.A. and V8 - Gestão Imobiliária, S.A., V8 - Gestão Imobiliária, S.A. mortgaged their fractions owned of the urban property located on Rua de Castro Portugal, numbers 497 and 511; Rua Professora Rita Lopes Ribeiro Fonseca, numbers 28, 34, 40, 46, 52, 58, 64, 70, 76, 80, 94 and 96; and Rua Doutor Miguel Assunção Lopes, number 15, Locality and Parish of Vila Nova de Gaia, as well as the fractions of the urban property called lot 14, located on Rua Guilherme Duarte Camarinha, numbers 30, 38, 42, 48, 54, 62, 70 and 74, and Rua Professora Rita Lopes Ribeiro Fonseca, numbers 12 and 18, Locality of Candal, Parish of Vila Nova de Gaia, for the total value of 5,419 thousand euros.

Apart from the guarantees indicated above, the following pledges have also been provided:

In order to secure the commercial paper contract signed with Banco Espírito Santo Investimento, S.A. and Banco Espírito Santo, S.A. of the value of 46,000 thousand euros, granted by TEIXEIRA DUARTE - Engenharia e Construções, S.A. and TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A., TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. and TEDAL - Sociedade Gestora de Participações Sociais, S.A. pledged 325,000,000 and 32,000,000 shares of Banco Comercial Português, S.A., respectively.

In order to secure the commercial paper contract signed with Banco Espírito Santo Investimento, S.A. and Banco Espírito Santo, S.A. of the value of 203,000 thousand euros, granted by TEIXEIRA DUARTE - Engenharia e Construções, S.A. and TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A., TEDAL – Sociedade Gestora de Participações Sociais, S.A. pledged 12,500,000 shares of EPOS – Empresa Portuguesa de Obras Subterrâneas, S.A., 200,000.000 shares of C+P.A. – Cimentos e Produtos Associados, S.A., and TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. pledged 1,325,000 participation units of the TDF Closed Real Estate Investment Fund. TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. constituted a voluntary mortgage on an urban property it owns, destined for warehouses, workshops, materials laboratory and parking of equipment, located on Avenida da Indústria, Alto Estanqueiro - Jardia, Montijo, of the value of 15,516 thousand euros. QUINTA DE CRAVEL – Imobiliária, S.A. also mortgaged the lots for construction numbers 8, 10, 11, 12, 13, 19, 26 and 31, located at Quinta de Cravel, Mafamude, Vila Nova de Gaia, for the total value of 6,839 thousand euros. V8 – Gestão Imobiliária, S.A. mortgaged the lots for construction numbers 1, 2, 3, 5, 6, 8 and 16, 18, 20 and 30 located at Empreendimento Santa Maria Design District, Santa Marinha, Vila Nova de Gaia, for the total value of 30,079 thousand euros.

In order to secure the commercial paper contract signed with Caixa Geral de Depósitos, S.A. of the value of 70,000 thousand euros, currently 50,000 thousand euros, granted by TEIXEIRA DUARTE - Engenharia e Construções, S.A. and TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A., TEIXEIRA DUARTE - Gestão de Participações e Investimentos Imobiliários, S.A. pledged 4,550,000 participation units of the TDF Closed Real Estate Investment Fund. As at the date of the present report, the programme was being entirely used by TEIXEIRA DUARTE – Engenharia e Construções, S.A.

In order to secure the commercial paper contract signed with Banco Espírito Santo de Investimento, S.A. and Banco Espírito Santo, S.A., of the value of 34,000 thousand euros, granted by TEIXEIRA DUARTE - Engenharia e Construções, S.A., TEDAL - Sociedade Gestora de Participações Sociais, S.A. pledged 500,000 shares of TDGI - Tecnologia de Gestão de Imóveis, S.A.

In order to reinforce the guarantees provided under the financial lease contract signed on 31 December 2008 with Banco Comercial Português, S.A., TEDAL - Sociedade Gestora de Participações Sociais, S.A. pledged 9,000,000 shares of SOMAFEL - Engenharia e Obras Ferroviárias, S.A.

In order to secure debts to third parties, of the value of 560 thousand euros, IMOTD - SGPS, S.A. pledged 24,000 shares of V8, S.A.

In order to secure the loan contract granted by TDHOSP - Gestão de Edifício Hospitalar, S.A. of the present value of 47,276 thousand euros, TEIXEIRA DUARTE - Engenharia e Construções, S.A. pledged to Caixa Geral de Depósitos, S.A. and Caixa Banco de Investimentos, S.A., 1,540,000 shares of TDHOSP - Gestão de Edifício Hospitalar, S.A. Under the same loan contract, TEIXEIRA DUARTE - Engenharia e Construções, S.A., as shareholder, pledged the credit rights over TDHOSP – Gestão de Edifício Hospitalar, S.A.

Financial commitments:

As at 31 March 2014 and 2013, the comfort letters provided by TEIXEIRA DUARTE, S.A. and its subsidiaries reached 448,613 thousand euros and 475,758 thousand euros, respectively.

As at 31 March 2014 and 31 December 2013, factoring contracts without right of recourse were in force, which were recorded as reduction of accounts receivable of the value of 87,458 thousand euros and 99,829 thousand euros, respectively. Pursuant to the contractual conditions, the Group's liability is essentially restricted to the guarantee of acceptance on the part of customers of the invoices which are the object of factoring.

Other:

As at 31 March 2014 and 31 December 2013, there were no inventories pledged to secure liabilities.

24 – MEASUREMENT AT FAIR VALUE

Estimated fair value - assets and liabilities measured at fair value

The table below presents the Group's assets and liabilities measured at fair value as at 31 March 2014, according to the following hierarchical levels of fair value:

  • Level 1: the fair value of financial instruments is based on lending net market prices as at the reference date of the statement of financial position;

  • Level 2: the fair value of financial instruments is not determined based on lending net market prices, but rather through use of valuation models;

  • Level 3: the fair value of financial instruments is not determined based on lending net market prices, but rather through use of valuation models whose main inputs are not observable on the market;

Category Item Level 1 Level 2 Level 3
Assets:
Financial assets available for sale Shares 105,599 - -
Financial assets at fair value through profit or loss Shares 618 - -
Investment properties Buildings and land - 478,742 -
Liabilities:
Financial liabilities at fair value Hedge derivatives 12,590 - -

Except with respect to non-current loans, most financial assets and liabilities mature in the short term, hence it is considered that their fair value is identical to the respective book values.

Most of the loans are taken out at variable interest rates. Therefore, it is deemed that the corresponding book value (amortised cost) does not differ significantly from the respective market value.

25 - APPROVAL OF THE FINANCIAL STATEMENTS

The financial statements for the quarter ended on 31 March 2014 were approved by the Board of Directors on 30 May 2014.

26 - SUBSEQUENT EVENTS

TEIXEIRA DUARTE pursued its activity in the different sectors and markets in which it operates, where the following relevant fact which occurred after the closing of the first quarter of 2014, which was disclosed in due time to the market:

Notification of the service order for new infrastructure work in Algeria, for the value of 121,749,760 euros

On 2 April 2014, the enterprise group which includes "Teixeira Duarte - Engenharia e Construções, S.A." was notified of the Service Order issued by the Algerian entity "AGA- Algérienne de Gestion des Autoroutes" for the contract "Réalisation des Installations et Equipements d'Exploitation de l'autoroute Este-Ouest, Lot Ouest" (Execution of facilities and equipment for the operation of the East-West Motorway, West Lot), in Algeria.

"Teixeira Duarte - Engenharia e Construções, S.A." is the leader of the enterprise group, holding a stake of 48%, with 46% belonging to the Algerian enterprise group "ETRHB HADDAD" and 6% to the Spanish "SICE, S.A.".

The contract has a foreseen period of twenty-three months counted from the aforesaid 2 April 2014 and an overall value of € 253,645,332 (two hundred and fifty-three million, six hundred and forty-five thousand and three hundred and thirty-two euros), increased by VAT at the legal rate in force, of which 35.7% is paid in euros and the remaining 64.3% in Algerian dinar. Pursuant to its share in the aforesaid enterprise group, "Teixeira Duarte - Engenharia e Construções, S.A." is entitled to receive € 121,749,760 (one hundred and twenty-one million, seven hundred and forty-nine thousand and sixty euros).

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