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ANNUALREPORT
2012
WE BUILD STABILITY.WE SPREAD COMPETENCE.WE CONQUER CONFIDENCE.
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HEAD OFFICE
NORTHERN BRANCH
CENTRAL WAREHOUSES
Rua Frederico George nº37Alto da Faia 1600-468 LISBOA . PORTUGALTel.: +351 217 213 500 . Fax: +351 217 213 599
Rua Gonçalo Cristóvão, nº 128, 15º Esq.4200-264 PORTO . PORTUGALTel.: +351 222 073 190 . Fax: +351 222 010 699
Casal Maria Magra, Estrada IC2, km 44,42580-243 OTA . PORTUGAL
Tax number 500 195 838Lisbon Commercial Registry Office Share Capital: 28.067.480 eurosContractor Licence no. 103
COVER PICTURE:LISBON METRO’S RED LINE . SUBWAY LINE BETWEEN THE ORIENTE AND THE AEROPORTO STATIONS . LISBON . PORTUgAL
BACK PICTURE:PORT OF PRAIA . SANTIAGO ISLAND . CAPE VERDE
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WE BUILD STABILITY.WE SPREAD COMPETENCE.WE CONQUER CONFIDENCE .
Approved at the Annual Meetingon the 3rd May 2013
ANNUALREPORT
2012
UPGRADING OF N1 HIGHWAY LOT 2 APENKWA INTERCHANGE TO MALLAM ROAD JUNCTION . ACCRA . gHANA
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5MSF . Annual Report 2012
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CORPORATE ENTITIES
SENIOR STAFF
OWNERSHIP STRUCTURE
MANAGEMENT REPORT FOR THE FINANCIAL YEAR OF 2012
CONSOLIdATEd BALANCE SHEET
CONSOLIdATEd INCOME STATEMENT BY NATURE
CONSOLIdATEd INCOME STATEMENT BY FUNCTION
CONSOLIdATEd CASH FLOW STATEMENT
CONSOLIdATEd STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENdING ON 31ST dECEMBER 2012
INDEX
INFRASTRUCTURE CONSTRUCTION TO INCREASETHE ENERGY PRODUCTION CAPACITY OF THE vENDA NOvA III DAM. MONTAlEGRE . portugal
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vILA FRANCA DE XIRA HOSPITAL . PORTUgAL
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7MSF . Annual Report 2012
GENERAL MEETINGMr. Fernando Augusto Silva Cunha de Sá (Chairman)
Mrs. Maria Luís Nazaré dos Santos Ferreira (Secretary)
BOARD OF DIRECTORSMr. Carlos Pompeu Ramalhão Fortunato (Chairman)
Mr. Tiago Brito da Mana Ramalhão Fortunato (Vice-chairman)
Mr. Paulo Nuno Ferreira Silvestre (Vice-chairman)
Mr. Fernando Manuel dos Santos Valério
Mr. José Pedro de Sá Campos Gil
Mr. Manuel Burnay Nazareth de Sousa
Mr. Francisco José Sobreira Pires
Mr. José Joaquim da Cunha Moura Ferreira
Mr. António Manuel Aragão de Melo
dEPUTY EXECUTIVE dIRECTOR
Mr. José Marcelino Silveira Ricardo
SUPERVISORY BOARDMr. Amílcar Martins Escudeiro (Chairman)
Rui Pena, Arnaut & Associados, Sociedade de Advogados, RL,
represented by Mr. João Francisco de Freitas Cruz Caldeira
Lamego, Horta e Associados - Sociedade de Advogados, RL,
represented by Professor José Alberto Rebelo dos Reis Lamego
Mr. Manuel Henrique Martins da Silva (Alternate)
STATUTORY AUdITOR
deloitte & Associados, SROC, S.A.,
represented by Mr. Tiago Nuno Proença Esgalhado
Mr. duarte Nuno Passos Galhardas (Alternate)
SECRETARYMrs. Maria Madalena Serra dos Santos Teixeira da Silva (Acting)
Mr. Miguel Eduardo Saraiva Vieira (Alternate)
CORPORATE ENTITIES
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MARÃO TUNNEL CONTRACTAMARANTE - vILA REAL . PORTUgAL
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9MSF . Annual Report 2012
SENIOR STAFF
Mr. Alexandre Henrique Luz F. Silva
Mr. António Luís Inácio Guimarães
Mr. Armando José Maltez Filipe
Mr. Arsénio Mendes Simões
Mr. Camilo de Lelis Camargo de Mello
Mr. Carlos Moisés da Silva Barbosa
Mr. Fernando Varela Mathias Castello Branco
Mr. Jorge M. Espírito Santo Faria
Mr. José Ernesto Aleixo
Mr. José Filipe Rodrigues Pina Santiago
Mr. José Pedro Granjeia Silvestre
Mr. José Pedro Lopes Morgado
Mr. Luís Filipe A. Campos Ferreira
Mr. Luís Miguel Soares Ribeiro da Costa Salema
Mrs. Maria Carlos R. F. L. Ramada
Mr. Martinho B. da Mana R. Fortunato
Mr. Orlando José J. Pinto Costa
Mr. Pedro Nuno N. Serpa dos Santos
Mr. Rui Carlos Estrela de Sá Pessoa
Mr. Rui F. Frazão A. Monteiro
Mrs. Teresa Cristina Lopes Belo Ferreira
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10 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
SENIOR TECHNICAL STAFF
Mr. Álvaro Rui Cortijo Oliveira
Mrs. Ana Cristina B. Campos Rebelo
Mrs. Ana Sofia Antunes Casal Antunes
Mr. André Madeira Stoffel
Mr. André Rodrigues Cordeiro Melo Cabral
Mr. António Fernando P. Bugalho
Mr. António Fernando Vicente Sousa
Mr. António José Simões F. dos Santos
Mr. António Pedro Afonso Barroso
Mr. António Pedro Guedes Ramalhão
Mr. António Pedro Lima Brás Jorge
Mr. Armando Manuel da Cruz Robalo
Mr. Augusto Manuel Martins de Oliveira
Mr. Bruno Guia Neto Machado
Mrs. Carla M. Oliveira Ramos Santos
Mrs. Carla Patrícia Pinto Lourenço
Mr. César Manuel Pereira Peixe
Mr. Cláudio Lourenço Gil
Mrs. Cristina Maria Bento Monteiro
Mr. Eduardo Jorge Nogueira Matos
Mr. Emanuel X. B. de S. T. da Costa
Mr. Fernando José de Almeida Carlos
Mr. Fernando José Moreira R. Borges
Mr. Fernando S. do A. Andrade
Mrs. Filipa Cristina Carvalho Mineiro
Mr. Francisco A. Mendes C. Afonso
Mr. Francisco José Oliveira Carrilho
Mr. Francisco José Pinto Calhelha
Mr. Frederico J. M. de Faria Galvão
Mr. Frederico Marques dias
Mrs. Helena Catarina F. F. Gonçalves
Mr. Hugo Ricardo Ribeiro Rebelo
Mrs. Inês Cordeiro Pereira de Sousa Eiró
Mrs. Isabel Maria Fernandes Brigas
Mr. Jaime Xavier M. Rosa dourado
Mr. João António Filipe Ferreira
Mr. João F. Antunes Seco Marques
Mr. João José Rodrigues Gomes
Mr. João Miguel Ferreira Sousa
Mr. João Miguel Lopes Ladeira Forte
Mr. João P. Mourao Pena da Costa
Mr. João Paulo Ferreira da Costa
MARÃO TUNNEL CONTRACT AMARANTE - vILA REAL . PORTUgAL
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11MSF . Annual Report 2012
Mr. José Carlos Afonso Barroso
Mr. José Carlos Calhau Pechardo
Mr. José Manuel Geraldo Galvão
Mr. Licínio Lucas Pereira
Mr. Luís Augusto Mota Almeida
Mr. Luís E. Mendonça C. Roque G. de Faria
Mr. Luís F. S. durão Branco
Mr. Manuel Alfredo Teixeira Borges
Mr. Manuel Pereira Mendes Campos
Mrs. Maria Beatriz Barreto de Ornelas Valério
Mrs. Maria dulce S. Cascalheira
Mrs. Maria Madalena Santos Leal
Mrs. Maria Manuel Rodrigues Elias
Mrs. Maria Rita do Rosário Coutinho da Silva
Mrs. Marta C. Barreira S. Fachada
Mr. Miguel José Esquetim Águas
Mr. Nuno Miguel Pinto Martins Godinho
Mr. Nuno Miguel Pratas Louro
Mr. Nuno Silva Cotrim
Mr. Orlando José M. A. Quintas Nascimento
Mrs. Patrícia C. Sousa do Amaral Xavier
Mr. Paulo Jorge Ferreira de Jesus Alves
Mr. Paulo José G. Silva Ribeiro
Mr. Pedro Manuel Calvet de Magalhães Leal
Mr. Pedro Manuel F. Silva
Mr. Pedro Miguel Silva Ferreira
Mr. Ricardo Jorge Correia Pinto do Amaral
Mr. Ricardo Sousa Arez
Mrs. Rita S. de Matos P. Santiago
Mr. Rodrigo Nuno Miguens Urbano Munhá
Mr. Rui Fernando Gomes Panarra
Mr. Rui Luís Jesus Martins
Mr. Rui Miguel Santos de Almeida
Mr. Rui Miguel Tátá Santos Silva
Mrs. Rute Margarida Barros Almeida
Mr. Sérgio Nuno Garrete Guerra
Mr. Sérgio Ribeiro Esteves
Mrs. Sónia A. dos Santos Almeida Rato
Mrs. Teresa Paula Marques Pedro Ferreira
Mr. Tiago José dos Santos Mendes
Mrs. Vanda M. Bochechas C. Friaes dos Santos
NATIONAL TRUNK ROAD N8 BETWEEN ASSIM PRASO AND BEKWAI . ASHANTI REGION . gHANA
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PORT OF SAL-REI EXPANSIONBOA vISTA ISLAND . CAPE VERDE
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13MSF . Annual Report 2012
OWNERSHIP STRUCTURE
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FOZ TUA DAM . FOZ DO TUAvILA REAL . PORTUgAL
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15MSF . Annual Report 2012
1. ACTIVITY OVERVIEW
1.1. ThE GLOBAL ECONOMY IN 2012The implementation of economic policies consistent with the purpose of correcting framework and structural
macroeconomic unbalances, continued to have a main influence in the 2012 global economic activity, causing a generalised
slowdown and causing different countries in different geographical locations, albeit showing signs of growth, to do so in
a timid manner, with growth being inferior to 2011. The slowdown was due to a general mood of continuing uncertainty,
with a lack of confidence concerning the weak capacity in controlling the Euro crisis and with the possible effects relating
to the fiscal policies of the United States of America (USA).
The International Monetary Fund (IMF) (World Economic Outlook Update dated 23rd January 2013) informed that the economy, in global terms, registered a growth of 3.2% when compared with the 3.9% in 2011 (5.2% in 2010).
The slowdown occurred both within the so called developed economies, in which the 1.3% growth in 2012 compares
with the 1.6% in 2011, as within the emerging economies (5.1% in 2012 as opposed to 6.3% in 2011). Within the first set,
it has to be noted that the USA and Japan were exceptions, presenting a growth of 2.3% and 2%, respectively, values
which are in both cases superior to those verified in 2011 (1.8% in the USA and -0.6% in Japan). The slow growth and
the uncertainties felt in the more developed economies affected the emerging markets through international trade and
finance, mainly with the fall in exports causing a cooling in their respective growths.
For 2012, the contraction of the Gross domestic Product (GdP) of the Euro Zone is estimated at 0.45%. data concerning
UE27 forecasts a slightly smaller contraction to that felt in the single currency countries, registering a fall in the GdP of 0.2%.
The infection of the economic slowdown to the “central” Euro Zone economies was evident. As opposed to what happened
in 2011, the German economy suffered a significant cooling, only achieving, as per the mentioned FMI report, a 0.9%
growth. This contrasts with the 3.1% achieved in 2011. The comeback to recovery of the Euro Zone, in the 1% ballpark, is
now only expected in 2014. For 2013, one expects a contraction of -0.2%.
during 2012 the American economy continued with the rebound started in 2009, having registered a 2.3% growth when
compared to the previous year. The confidence of the American consumers remains with the tendency to that registered
before the recession. The rebound of the job market signals to a gradual improvement in the economy. Although the job
creation remains below the long term average, the unemployment rate fell to 7.8% in december 2012. For 2013 the IMF
expects that the American GdP grows 2%. These forecasts have as an underlying factor the solving of the American
budgetary issue.
The Brazilian GdP 1% increase, the Chinese 7.8% and India’s 4.5%, confirms the growth initiated in 2010. However
the economic cooling was evident, being that the respective Central Banks cut interest rates and reduced compulsory
reserves. For 2013 one expects that these countries continue to represent the relevant “engine” of global economic
growth, with the main international bodies forecasting an acceleration of economic growth vis-à-vis 2012. The Middle
East and North African economies presented in 2012 an increase of 5.2% (3.5% in 2011), being that the African
sub-Saharan (4.8%) slowed down when compared to the previous year (5.3%). Within these, behaviours differ: for
Angola an estimated growth of 6.8% in 2012 is foreseen, which positively compares with the 3.9% registered in 2011;
conversely, the FMI estimates for 2012 GdP’s growths for Gabon (6.1%), Ghana (8.2%) and Equatorial Guinea (5.7%)
MANAgEMENT REPORTFOR THE FINANCIAL YEAR OF 2012
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16 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
during 2012 concerning the forex market, the investment in the dollar and in the yen was patent, with both currencies reaching the maximum of 2 and 12 years vis-à-vis the Euro, respectively. Pound sterling followed the valuation tendency
against the Euro, reaching the highest quotation in nearly four years. The promise on the part of the ECB’s president, at
the end of July, in doing everything possible to safeguard the existence of the Euro, was fundamental for the recuperation
of this currency. In accordance with the numbers of the Bank of Portugal, the exchange was in the most part above the
1.3 EUR/USd mark, during the first months of the year, with the valuation of the American currency, especially as of
May, which reached in July, a rate close to 1.20EUR/USd. This tendency inverted as of the end of July, to close the year
around 1.32 EUR/USd.
Oil prices reached a new maximum in 2012, in terms of yearly averages (USd 112 per barrel), having shown an irregular
behaviour throughout the year, registering a maximum value of USd 128 per barrel on the 1st March and reaching the
yearly minimum in June (USd 88 per barrel), essentially due to the reduction in the demand on the part of the consumer
regions and in the increase of production in the USA, and later nearly recovering to levels achieved during the beginning
of the year (USd 110 per barrel).
INFRASTRUCTURE CONSTRUCTION TO INCREASE THE ENERGY PRODUCTION CAPACITY OF THE BEMPOSTA DAM . MOGADOURO . PORTUgAL
31.12.0831.12.0931.12.1030.12.1131.12.12
Note: Quotations on the last day of each year. Source: Banco de Portugal
2.6030.4530.7821.0240.109
2.8920.7001.0061.3560.187
2.9710.9941.2271.617
0.320
3.0181.127
1.3721.791
0.432
3.0491.2481.5071.947
0.542
Euribor - 1M
INTEREST RATES
Euribor - 3M Euribor - 6M Euribor - 9M Euribor - 12M
which are lower than the previous year’s. Cape Verde (4.3%) and Senegal (3.7%) came up with more modest increases.
FMI’s most recent report foresees the continuation of robust activities in these economies throughout 2013.
On the money market, the European Central Bank (ECB) proceeded, in mid 2012, to cut the interest rate, lowering the reference rate from 1% to 0.75%. This decision, combined with the excess in liquidity, allowed the Euribor rates to descend
to historical levels. In July, the speech of the ECB’s president, with the promise to do all to safeguard the existence of the
Euro, calmed the markets. His efforts materialised with the creation of the Outright Monetary Transactions, a programme
which seeks the purchase, on the part of the ECB, of sovereign debt in the secondary market of countries of the Euro zone
which look for assistance, and which considerably eased the pressure on the yields of the peripheral countries.
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17MSF . Annual Report 2012
1.2. ThE PORTUGUESE ECONOMY IN 2012For Portugal 2012 was of great economic contraction, as per data from the National Statistics Institute (INE) disclosed on 11th March 2013, with the GdP falling 3.2%, a reduction greater than the 2011 one (-1.6%), which was very much
influenced, as in the previous year, by the implementation of the Economic and Financial Adjustment Programme (PAEF),
which came into being after the financial assistance request made in April 2011 and which called upon the deleveraging of
several sectors of the economy and by the external scenario.
data points to a very strong contraction in domestic demand (-6.8%), with a very negative contribution to the reduction
of GdP (-7%). Only exports prevented a worse performance, contributing with 3.9 percentage points to GdP’s growth.
Even though, contrary to the two previous years in which they were dynamic, registering growth rates of 7.2% (2011) and
of 10.2% (2010), 2012 saw a slowdown of exports to 3.3%, with decreases both in Goods and Services. The reduction in
imports was of 6.9% (-5.5% in 2011).
The improvement in the Foreign Balance of Goods and Services and the Primary Output Balance, established that the net
financing capacity of the Portuguese economy in 2012 was of 0.4% of GdP, rebalancing the Trade Balance and inverting
the position of net financing need registered during many years.
The most recent numbers on unemployment show that the situation continues to worsen, with the rate climbing 1.1
percentage points during the last quarter of the year, to 16.9%. This increase in unemployment at the end of 2012
reflects the recession and also the pessimism of businessmen concerning the performance of the economy during 2013,
principally at the internal demand level and mainly in Services.
Apart from the great reduction in private consumption (-5.6%), in 2012 investment decreased 13.7% in volume, mainly
influenced by the reduction of 18.1% in the Gross Fixed Capital Formation component, which already showed negative
values of -11.4% in the previous year.
Inflation rate in 2012 was of 2.8%, a reduction when compared with the 3.7% registered in 2011. Contributing to this
slowdown was the smaller increase in the prices of energy products and the reduction in the prices in the health sector,
mainly due to the revision in the prices of medicines.
For 2013, the Bank of Portugal foresees the continuation of the down spiral which started in 2011, with the GdP contracting
by 2%. However, one predicts that 2013 will be a year characterised by a higher level of liquidity, due to better financing
conditions by the State and by the companies. Reflecting the lower risk perception concerning Portugal, is the lowering of
the 10 year yields to the levels found at the end of 2010.
1.3. ThE CONSTRUCTION SECTOR IN PORTUGALduring 2012 one continued to witness the destruction of the construction sector, as we have known it during the last 20
years. According to the Portuguese Federation of the Construction and Public Works (FEPICOP), during 2012 one saw a
downfall in the demand concerning the Civil Construction and Public Works sector. With the main indicators reflecting this
situation, it was possible to observe a reduction in the consumption of cement of 26.9%, in relation to the same period
of 2011, reaching absolute values (3.3 million tonnes) which have not been seen since 1973. According to the National
Institute of Statistics, during 2012 the number of licenses concerning new housings registered a total of 11,156, 5,929 less
than those issued during the same period of 2011 and 13,708 less than 2010.
EvINAYONG - ACUREMAN - MEDUNU ROAD . CONTINENTAL REGION . EQUATORIAL gUINEA
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18 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
A decrease in public investment occurred in the public works sector, falling 38.7% and 44.4%, in number and value,
respectively, vis-à-vis the previous year. Concerning the number of those unemployed and registered at job centres
relating to the construction sector at the end of december 2012, the total surpassed 105.6 thousand, as per data issued
by the Employment and Professional Training Institute. These numbers reflect an increase of 25.4% when compared to
the same month of 2011 and represent 16.2% of the total unemployed at the end of december 2012.
The production of the sector presented as at year’s end a sharp drop, i.e. a negative value of 15.5%, in real terms (-9.4%
in 2011). With negative yearly performance within the activity throughout the last twelve years, the sector presents, when
compared to the production in 2000, an accumulated downfall of nearly 50%. The decrease in production spread out to
all main sectors of the activity. The segment of construction of residential buildings was the worst hit (20%) according
to FEPICOP’s forecasts. The decrease in the production rate of the civil engineering sector was of 15% and the index
regarding the non-residential buildings fell by 11.8%, when compared to the previous year.
The Construction sector in 2012 was the most affected by the insolvencies registered in Portugal, representing around
28% of the 6,688 cases presented by Cosec. The increase of insolvencies in the Construction sector (43%) was greater
than the domestic insolvency increase (41%).
The persistence of a difficult economic situation and the non-existence of a specific policy which could revert, or at least
mitigate the difficulties in which the sector finds itself, does not let one perceive a comeback for 2013. The Association of
the Construction, Public Works and Service Entities (AECOPS) points to a deterioration of the sector’s situation, with a
decrease in production of 15% in 2013, a value, if confirmed, which would be 56% less than the volume registered in 2000.
2. COMPANY PERFORMANCE IN 2012
The activity of MSF Engenharia, S.A. (“MSF Engenharia”, “MSF” or “Company”) was heavily conditioned by various
factors, of which one can highlight the current economic crisis in Europe and in the US and which greatly affects a
significant portion of its international markets, by the destruction of the construction sector in Portugal, as we have
known it during the last twenty years, and by the difficulties of some customers in complying with their contractual
obligations.
Portugal is going through an exceptional period of financial difficulties and is trying to consolidate its public accounts, but
this fact does not suspend the Rule of Law, and should not suspend the contractual and partnership good faith between
the different parties.
Therefore it is totally incomprehensive and unacceptable when one observes the attitude of the Portuguese State in the
carrying out of its responsibilities concerning the concession contract for the construction and operation of the IP4-Túnel
do Marão. In fact, after long months of negotiations, the State department of Public Works, following the approval of the
State department of Finance, presented an agreement proposal to Auto-Estradas do Marão, S.A., concessionaire of Túnel
do Marão, which made it feasible to restructure the concession and which would leave the more sensitive issues to be
discussed in the Arbitral Tribunal, such as the indemnities which the Concessionaire and the construction JV understand
to have the right to. This agreement was formally accepted by the Concessionaire, which was never signed by the State
and who after some months rejected the agreement, which had been formally proposed by itself in the first place. The
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19MSF . Annual Report 2012
works were stopped throughout 2012 and Infratúnel JV, in which MSF holds 45%, declared the construction contract
null and void. The Concessionaire in which the MSF Group holds a participation of 45% has requested the opening of an
Arbitral Tribunal to decree the termination of the concession contract, due to motives attributed to the Grantor.
Also incomprehensible and unacceptable is the attitude of Parque Escolar, in the management of the construction contract
of the Lagos and Portimão schools, which following months of contractual suspension due to lack of payments, was not
able to propose a plan for its regularisation and an agreement for the reestablishment of a contractual rebalancing. There
also being in this case no alternative for the MSF/Neocivil consortium than to request the establishment of an Arbitral
Tribunal, in order to determine the termination of the contract, due to the fault on the part of Parque Escolar.
MSF continues to believe that Portugal is governed by the Rule of Law and that, in the last instance, the Courts will be
it´s guarantor.
Summing up 2012, one has to highlight the fact that, as proven by the reduction of its consolidated liabilities by over
30% and by the growth of its equity by 2.8%, MSF had the capacity to surpass the enormous difficulties it encountered,
even though suffering a great drop in the volume of its business and in consolidated income, which reached 263 million
Euros and 0.4 million Euros respectively, being strongly influenced by the previously mentioned situations, by the abrupt
downslide of the market, by the suspension and/or delay in the takeoff of some works, by the delay in payments on
the part of customers and by many insolvencies which affected business partners. Even though significant delays in
relevant payments on the part of public debtors, domestically and globally, still exist, MSF achieved throughout the year
a reduction of these amounts and expects the smoothing out of most of these cases throughout the 2013 Financial Year.
At the start of the Financial Year, the Company counted on an order book of over 700 million Euros and registered at the
end of the Financial Year 636 million Euros in work contracts.
In 2012, international activity significantly increased its participation to 56% of the Company’s consolidated total (41% in
2011), with invoicing in Portugal retracting to around one third of that booked in 2011. For the coming years, one expects
an extension of the international presence, with MSF continuing to analyse different markets, current and potential ones,
based on profitability criteria and the degree of exposure which, by way of geographic dispersion and regional mobility,
mitigates the risks of a pronounced prevalence of a given market or country. Throughout 2012, a reorganisation of the
internal structure into “Regional Hubs” was weighed and prepared and which shall be implemented at the beginning of
2013, allowing for an optimisation in the resources management, thus enhancing the success of the defined strategy.
MSF has a sound strategy built up in line with the “Vision 2015 – 2020”, which currently serves as the basis for the
medium and long-term guidelines and which is permanently monitored and adjusted, owing to the fact that the world
economic situation is unstable and unpredictable. The achieved performance confirms the merit of the sustained growth
strategy that the Company has carried out, showing the fairness of the options taken in the past and which, among others,
allowed to develop a consolidated international process, accompanied and adjusted in function of the real difficulties and
opportunities encountered.
By the end of 2012, the international experience of MSF, consolidated during the course of a decade and a half, encompassed
the presence in countries like Angola, Bulgaria, Cape Verde, United Arab Emirates, Gabon, Ghana, Equatorial Guinea,
Mozambique, Namibia, Poland, Qatar, São Tomé and Príncipe and Senegal.
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20 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
The behaviour of the domestic market was particularly unfavourable, with an unprecedented shortfall in billing, to 117
million Euros, which represents around one third of the 2011 value (302 million Euros). The decrease in business registered
in the international markets was less (-29%), with the amounts of sales and services rendered, adding up to 146 million
Euros (206 million Euros in 2011).
The contribution of activities performed in the international arena, in countries such as Angola, Cape Verde, Ghana,
Equatorial Guinea, Poland and Senegal increased from 41% to 56% of consolidated sales and services rendered. The
weight of the domestic market in the business volume in 2012, was of 44%, when compared to 59% in 2011.
3. ECONOMIC AND FINANCIAL PERFORMANCE
At year-end 2011, MSF’s consolidated turnover achieved the sum of 263 million Euros, a very significant decrease when compared to the previous year (508 million Euros). This behaviour, only partially forecasted, is due to essentially, as
mentioned earlier, to the difficult environment and in particular by the sector’s situation in Portugal, by the suspension of
ongoing works and the delaying in the start up of works contracted in the international markets.
TURNOVER BREAk-dOWNSALES ANd SERVICES RENdEREd
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21MSF . Annual Report 2012
In the Financial Year of 2011, EBITDA (Earnings before Interest, Taxes, depreciations and Amortisation) stood at 23.5 million Euros, compared with 35.3 million Euros in the counterpart period of last year, having decreased 33%. Likewise,
one registers a decrease in operating income (EBIT) which, at year-end, attained the sum of 11.3 million Euros (20.2 million Euros in 2011). It is to be noted that percentagewise in relation to turnover, the EBITdA improved when compared
to the same period in 2011, from 7% to 9% as also did EBIT, albeit less significantly, from 4.0% to 4.3%.
Consolidated net income, attributed to the shareholders of MSF, in the value of 0.4 million Euros, compares unfavourably with those obtained during the last years. Apart from the effects of the activity’s downturn, this indicator is influenced by
the behaviour of financial results, which increased by 57%.
during 2012, the Company’s major financial effort was maintained – vital for the continued compliance with its
commitments, as has always been its policy – to meet the needs to increase working capital, associated with the
geographic dispersal of activity and the difficulties experienced by some clients in managing to meet the contractual
payment deadlines. In 2012 the needs to invest in basic equipment was of 3.2 million Euros, a very reduced amount when
compared to previous years.
TURNOVER BREAk-dOWN IN 2012
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22 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
The consolidated net indebtedness of the Company fell by 6.1 million Euros, from 78.4 to 72.3 million Euros. In 2013, the balances receivable from third parties are expected to continue to progressively get back to normal, thus contributing to
the continuation of debt reduction.
It is worthy of note, the significant reduction in the Company’s consolidated liabilities in more than 30% and the increase
in equity of 2.8%, with a direct impact in the improvement of the solvency and liquidity indicators. In consolidated terms,
at the end of the year, the solvency ratio was of 41% and the general liquidity ratio reached 117%. The Net debt to EBITdA
ratio stood at 3.1 at year-end.
The capitalisation of income throughout the last years contributed to the increase in equity, which by the end of 2012, reached 94.8 million Euros. Also worthy of note, is the purpose to fully reinvest in the Company in the form of retained
earnings, the distributable net income for the Financial Year.
4. CONSTRUCTION
4.1. DOMESTIC MARKET4.1.1. Commercial ActivityCommercial activity in the domestic market was decisively affected by the major fall in works put out to tender and the
irrational increase in bids with abnormally low prices, policy with which MSF does not adhere to, due to the enormous
risks involved. during 2012, the Commercial department submitted 78 bids on the domestic market to tender, for a
total amount of 590 million Euros. Awards stood at 5 million Euros, corresponding to a success rate of less than 1%, a
symptomatic factor of the sector´s situation.
In the public works’ segment, the following works were awarded and initiated:
• General works’ contract for the construction of the S. Pedro do Mar church promoted by the Fábrica da Igreja de Quarteira,
for an approximate global amount of 730 thousand Euros and concluded in 2012 being carried out by Neocivil S.A.;
• Construction of Lots 101 and 112 – Houses type C and d, promoted by Royal Óbidos - Promoção e Gestão Imobiliária e
Turística, S.A., in the amount of 788.4 thousand Euros and to be carried out by Neocivil S.A.;
PAvEMENT STRUCTURE OF THE MAIN RUNWAY AND ACCESSES TO THE PLATFORM OF THE DIASS AIRPORT . DAKAR . SENEgAL
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23MSF . Annual Report 2012
• Construction of houses at the Herdade da Comporta, promoted by Pátio das Andorinhas, Investimentos Imobiliários,
Lda, in the approximate amount of 3.6 million Euros and to be carried out by Neocivil, S.A..
4.1.2. Production ActivityWe would stress the following works’ contracts completed or under implementation in 2012:
hydraulic works • Conclusion of the general works’ contract to increase the energy production capacity of Picote dam, promoted by EdP
– Gestão de Produção de Energia, S.A. and carried out as part of a consortium with MSF Engenharia holding 60%, for
an approximate total amount of 60 million Euros;
• Conclusion of the general works’ contract to increase the energy production capacity of Bemposta dam, promoted by
EdP – Gestão de Produção de Energia, S.A. and carried out as part of a consortium with MSF Engenharia holding 35%,
for an approximate total amount of 50 million Euros;
• General works’ contract to increase the energy production capacity of Venda Nova III dam, promoted by EdP – Gestão
de Produção de Energia, S.A. and carried out by an JV led by MSF Engenharia, which holds 28.34%, for an approximate
total amount of 132 million Euros.
• General works’ contract for the construction of the Foz do Tua dam promoted by EdP – Gestão de Produção de Energia,
S.A. and carried out by an JV in which MSF Engenharia holds 33.3%, for a total approximate amount of 163 million
Euros.
Communication routes • Conclusion of the works’ contract involving the design, project, expropriations, construction and supply and assembly of
equipment included in the Baixo Tejo sub concession, contracted with VBT – Vias do Baixo Tejo, S.A. and carried out by
an JV in which MSF Engenharia holds 17.5%, for a total amount of around 203 million Euros;
• Conclusion of the road system construction contract for a total approximate amount of 436 million Euros, part of the
Litoral Oeste sub concession and promoted by AELO – Auto-Estradas do Litoral Oeste, S.A., to which the following works’
contracts belong and to be carried out by an JV led by MSF Engenharia, in which it holds 37.5%:
− Implementation of works involving the design, project, expropriations, construction and supply and assembly of
equipment on the motorway stretches of the IC 36-Leiria South/Leiria East and the IC2- Batalha bypass;
− Implementation of the works concerning design, project, expropriations, construction and supply and assembly of
equipment on the stretches of IC9-Nazaré/Alcobaça/EN1, Nazaré bypass, IC9-EN1/Fátima and IC9-Fátima/Ourém;
− design, project, expropriations and construction of the extension on the stretch in service IC2-Junction IC36/Junction
EN 109.
• Works’ contract to build a motorway and associated road units called the Marão Tunnel Concession, promoted by
Concessionaire Auto-Estradas do Marão, S.A. and carried out by an JV in which MSF Engenharia holds 45%, for an
amount of 359 million Euros (contract terminated by the JV).
UPGRADING OF N1 HIGHWAY LOT 2 APENKWA INTERCHANGE TO MALLAM ROAD JUNCTION . ACCRA . gHANA
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24 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
Civil and Industrial Construction • Conclusion of the works’ contract for the implementation of the Toll Plaza on the IC36L / A8, part of the Litoral Oeste
sub concession and implemented for LOC Litoral Oeste Construtores JV, for the sum of 3.4 million Euros;
• Conclusion of the construction of the New Control Rooms at Lisbon Airport, part of the ALS development Plan
promoted by ANA Aeroportos de Portugal, S.A. The works amount to 4.3 million Euros and are implemented by a
consortium led by MSF Engenharia, with a 65% participation;
• Conclusion of the construction of the Lojas Sul - Praça Central - Terminal 1 of Lisbon Airport, integrated in the ALS
development Plan, promoted by ANA Aeroportos de Portugal, S.A. The works amount to 1.4 million Euros and are
implemented by a consortium led by MSF Engenharia, with a 65% participation;
• Construction of “Casas do Parque Condominium”, Plots 1, 2, 3 and 4, section 6 at Alta de Lisboa, promoted by SGAL –
Sociedade Gestora da Alta de Lisboa, S.A. for the approximate amount of 60 million Euros;
• Construction of the New Hospital of Vila Franca de Xira for Escala Vila Franca de Xira, the building management entity.
The works’ value amounts to 76.6 million Euros and they are carried out by an JV in which MSF Engenharia holds
12.5%;
• Works’ contract to modernise Júlio dantas Secondary School in Lagos and Poeta António Aleixo Secondary School in
Portimão for Parque Escolar, E.P.E., for the sum of 28.4 million Euros. The works are carried out as part of a consortium
with Neocivil, with equal percentages;
• Works’ Contract to implement bare brickwork, finishing’s, low voltage, telecommunications and AVAC at the New River
Terminal, Terreiro do Paço Interface, works promoted by Metropolitano de Lisboa, E.P. The works’ value amounts to
around 26.7 million Euros and they are being carried out by an JV in which MSF Engenharia holds 24.5%.
4.1.3. Affiliated companiesNeocivil – Construções do Algarve S.A. (“Neocivil”)The strong slowdown in the civil construction market in 2012, mainly at the level of private works and which has been the
main sector of activity of Neocivil, was specially felt in the Algarve, the traditional geographical area of the entity. To the
difficult scenario, one must add other very downward factors for the entity’s activities, with a direct repercussion on its
activities in 2012. Highlighted are the already mentioned difficulties in the contracts carried out concerning Parque Escolar
and which induced the forced suspension of the contracted works for a period over 7 months, in works that insured
around 37% of invoicing expected for 2012. One has to point out to a new delay in the start up of the Sheraton Algarve
Hotel works, now for 2014, and the delay in the commencement of the phases of Allotment 8.3 – Vilamoura XXI. Works
for L’ANd Vineyards for Sousa Cunhal Turismo, S.A., continue suspended due to default in payment.
The above mentioned translated into a reduction in the entity’s invoicing, with the turnover during the Financial Year being
near the 6.7 million Euro mark, less than forecasted and to those registered in previous years. Sales deriving from the real
estate activity reached 0.8 million Euros, amount which reflects the difficulties in the sector and being inferior to those
registered in any of the previous years. As a corollary of the sharp downturn in turnover, one notes in 2012 a worsening
in indicators such as the EBITdA (Earnings before Interest, Taxes, depreciations and Amortisation) which is negative in
around 1 million Euros. The net loss of the Financial Year amounts to 1.6 million Euros.
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25MSF . Annual Report 2012
The value of the order book, which at year end reached the amount of 18.4 million Euros (excluding the amount referring
to the Hotel Sheraton works, whose start up is delayed to 2014) and the great expectation of new works throughout the
year, make one believe in the pickup of the entity’s turnover in 2013.
Indubel - Indústrias de Betão S.A. (“Indubel”)2012 was marked by the change in the shareholder composition of this subsidiary, with MSF becoming the majority
shareholder of the capital of Indubel, as the result of a decision taken at that company´s Shareholders General Meeting
and which determined the amortisation of shares held by “Novopca – Construtores Associados, S.A.”.
during the year Indubel concentrated itself on the development of its commercial activity, with the purpose of guaranteeing
the expansion of the geographical area in which it operates, privileging regions in which the MSF Group operates in,
mainly in countries as Ghana, Angola and Senegal. One has to highlight the ongoing works in Ghana, the awarding of
a new project in the same country and which shall start up in 2013 and the ingress into the Senegalese market, with a
subcontracting of 314 thousand Euros to be performed by a branch of MSF in this country. Additionally, works for the
installation of pile foundations in Atuabo, Ghana, for an outside entity, in the value of approximately 1.5 million Euros,
were awarded.
However, 2012 was a year which registered a great slowdown in the turnover of Indubel, with numbers below 3 million
Euros, something not seen for the last 5 years. Various factors contributed to this, such as the conclusion of great projects
performed and billed in 2011 (both domestic and international), delays in the start up of some international works (in
Senegal and Ghana) but which invoicing shall only occur in 2013 and the structural crisis in Portugal, which limited the
awarding of new projects. The net income in 2012 was a negative 1.774 thousand Euros.
The Prefabrication sector continued to be the biggest contributor to the entity’s activities, followed by the Geotechnical
Engineering area, in which Indubel is one of the international leaders. In 2012, the invoicing was of 2 million Euros,
originated essentially through four works: (i) conclusion of the supply and installation of girders and pylons for the
Lixeira de Valadares viaduct; (ii) supply of pre-manufactured panels for the new hospital of Vila Franca de Xira; (iii)
manufacturing and installation of pre-manufactured rest rooms in a residential building of Grid 6; and (iv) manufacturing
and installation of the Carregado Toll.
The international turnover grew to approximately 907 thousand Euros, resulting exclusively form Geotechnical Engineering
business segment. The awarding at the end of 2012 of the two above mentioned works, invoicing of which shall only be
done throughout 2013, creates expectations that this segment grows in 2013, apart from the good perspectives for other
projects, mainly the supply of pre-manufactured monoblocks to Angola.
4.2. FOREIGN MARKETS4.2.1. Commercial ActivityIn foreign markets, following on the strategic line to expand the activity of MSF, which has allowed it to compensate for
the continued retraction of the domestic market, there were 54 bids for tender with a total amount of 1.612 million Euros.
The success rate achieved stood at 6.9%, with the value of the contracted works standing at 111 million Euros. Some of
the proposals were, at the end of 2012, still in negotiation, enhancing significantly this amount which should be accounted
for in 2013.
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26 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
Africa and the Middle EastBids were submitted for tenders in Angola, Benin, Cape Verde, Gabon, Ghana, Mozambique, Qatar and Senegal.
Consequently, MSF was awarded the following works’ contracts:
• Work contract for the EPC (Engineering, Procurement and Construction) of the Permanent Residential Housing Project
for Angola LNG workers, in the town of Soyo, Zaire province, north Angola, in the value of 227 million dollars, to be
carried out by a consortium led by MSF Engenharia Angola, Lda. (MSF Angola), in which it holds 65%;
• Construction of the Industrial Assembly Complex of electronic and household appliances, in the value of 18.8 million
dollars, for Inovia, Electrónica de Angola, Lda. to be carried out by MSF Angola;
• Construction of the Bridge over the Ndioum river, in Senegal, and respective accesses. The work is financed by the
MCA, and is valued at 10 million Euros;
• Works’ contract for the construction and rehabilitation of a 2,800 metre road which links the Via Expresso Street to
Vidrul, in the municipality of Cacuaco, Luanda province. Awarded by the Study, Planning and Statistics Cabinet of the
Ministry of City Planning and Construction (MINUC), to the consortium led by MSF Engenharia Angola, Lda., with the
value of the works at 9.1 million US dollars;
• Rehabilitation and requalification work’ of the Portuguese Embassy’s residence and of the 155h and 16th floors of the
Chancellery building in Maputo, Moçambique, in the value of 280 thousand Euros.
EuropeThe commercial activity in Poland involved a reduced numbers of bids, with the maintenance of the abnormally low price
practice presented to tenders by most of the competitors, a practice which MSF does not agree with, as already referred
to concerning the domestic market, thus not allowing us to obtain any award.
4.2.2. Production ActivityProduction activity in global markets represented in 2012, 55% of MSF’s consolidated production, split between seven
European and African countries. This fact translates into an important consolidation in the international activity of MSF
and in its expansion capacity.
AfricaIn addition to the works awarded and already mentioned above, the following works’ contracts, completed or in progress
in 2011, should be highlighted:
• Completion of the construction of Lot 2 of the N1 motorway between Apenkwa Interchange and Mallam Road Junction
in Accra, for the Republic of Ghana, promoted by the Millenium development Authority and with a contract value of
83.7 million dollars;
• Completion of the construction of the Ribeira da Torre Valley penetration road at the Island of Santo Antão, Republic of
Cape Verde, for the Ministry of Infrastructures, Transport and Sea, for the sum of 7.2 million Euros;
• Construction of the Evinayong – Acureman - Medunu road, for the Equatorial Guinea Government, with a contract value
of 129.4 million Euros;
JÚLIO DANTAS HIGH SCHOOL AND POETA ANTóNIO ALEIXO HIGH SCHOOL. LAGOS AND PORTIMÃO . PORTUgAL
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27MSF . Annual Report 2012
• Rehabilitation of 59.9 km of the National Trunk Road #8, between Assim Praso and Bekwai, in the Republic of Ghana,
for the sum of 60.1 million dollars;
• Implementation of the paving structure of the main runway and accesses to the diass airport platform in dakar,
Senegal, a contract valued at 87 million Euros;
• Expansion and modernisation works in the Port of the city of Praia – Phase 2 - for the the Ministry of Infrastructures,
Transport and Telecommunications of the Government of Cape Verde, with a contract value of 72 million Euros, carried
out as part of a consortium, with a 37.5% participation;
• Construction of the expansion of the Port of Sal Rei, on the Island of Boa Vista, for the Ministry of Infrastructures,
Transport and Telecommunications of the Cape Verde Government, contracted for the sum of 63.5 million Euros,
carried out as part of a consortium, with a 50% participation;
• Construction of 36 social housing dwellings on the island of Boa Vista, for the Ministry of decentralisation, Housing
and Territorial Organisation of the Cape Verde Government, for the sum of 89.7 million Cape Verdean Escudos, carried
out as part of a consortium, with a 51% participation;
• Construction of the Infrastructures at the Bikele Site for “Ministère de L´Habitat, de L’Ecologie et du dévellopement
durable”, of the Gabonese Republic, contracted for the sum of 114.2 million Euros;
• Construction of 5,000 social housing dwellings for “Ministère de L´Habitat, de L’Ecologie et du dévellopement
durable”, of the Gabonese Republic, a contract valued at 141.5 million Euros.
EuropeThe activity in Poland concerned the monitoring of financial rebalancing processes resulting from completed contracts at
the respective entities. In the public works market, MSF Engenharia, S.A. was involved in the carrying out of the following
contracts:
• Completion of the construction of the S19 expressway between Stobierna and Rzeszów, Republic of Poland, for
GddkiA, for the sum of 213.5 million Zlotys, carried out as part of a consortium in which MSF Engenharia, S.A. and
MSF Polska Sp z o.o hold 64.8%;
• design and Construction of the A1 motorway between Stryków and Tuszyn, 37.3 km long, for GddkiA, valued at 1.159
million Zlotys, carried out as part of a consortium with an aggregate participation of 25% for MSF Engenharia, S.A.
and MSF Polska Sp z o.o.
4.2.3. Affiliated companiesThe activities of the international affiliates were undertaken during the course of the year with support to the Group’s
commercial and production activities in the respective countries, making a decisive contribution to the success achieved,
being worthy of note, the following:
MSF Engenharia Angola, Lda.MSF Angola has been consolidating, in a sustained manner, its presence in the Angolan market. In 2012, it signed
three important contracts, which were mentioned above, for the construction of the ALNG housing project, in Soyo, for
PORT OF SAL-REI EXPANSION . BOA vISTA ISLAND . CAPE VERDE
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28 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
the construction of Inovia’s Industrial Assembly Complex concerning electronic and household appliances, and for the
construction and rehabilitation of a road in the municipality of Cacuaco, Luanda province. Its turnover reached 9.9 million
Euros, with a net income of 0.7 million Euros.
MSF Polska Sp z o.oMSF Polska has carried out its activity in the Polish market in a permanent partnership with MSF Engenharia. No award
was granted during its commercial activities, due to the already mentioned abnormally low price practice, policy which
MSF does not agree with. Its turnover was of 2 million Euros and the net income was negative in 0.4 million Euros.
MSF Cabo Verde, S.A.MSF Cabo Verde continued to carry out its commercial and production activity by backing projects in which MSF
Engenharia is involved with. Its turnover was of 5.2 million Euros with a negative net income of 0.2 million Euros.
MSF Construction Qatar LLCAl-Mustafawi, Leptis, Fortunato – Construction LLC, MSF Construction Qatar, was incorporated in January 2012, being a
partnership between partners of Qatar and Portugal.
MSF Qatar has, with MSF Engenharia, carried out great commercial activity, with the presentation of several bids and
expects that the awarding of the first contract can be achieved in 2013.
5. CONCESSIONS
In what concerns the “Concession and Public - Private Partnership” sector, the activity was marked indelibly by the
clearly retraction, if not recession, of the Portuguese economy, aggravated by a media climate in which the indifference
of the agents of the sector raged since the beginning of 2011, followed by clearly persecutory attitudes from several
political and social quadrants, creating a persistent sense of instability and insecurity in the “Partnership” relationship,
both being incompatible with the contractual relationship in which the entities, legitimately, always expected to be in line
with a multi-centennial jurisdiction, as the Portuguese one. Without any new initiative registered since 2009 in the road
sub-sector, and since 2010 in the rail sector, in 2012, one saw the termination of the high speed rail concession, between
Poceirão and Caia (imposed by the refusal of the “advanced permit” by the Court of Auditors and which, one remembers,
followed the cancelation of the high speed rail link tender, between Lisbon and Poceirão, in September 2010), as well as
the lack of interest on the part of the State regarding the construction of a new airport in Lisbon (which, as announced,
would be the obligation of the new shareholder of a privatised ANA – Aeroportos de Portugal). Also no advances occurred
in the tender relating to the “Hospital Oriental de Lisboa”, notwithstanding the various manifestations of interest and
intention on the part of the Awarding Entity and Guardian, regarding the award confirmation to the “Salveo Group”, which
we are part of.
At the end of May 2012, as previously mentioned, the negotiations for the restructuring of the “IP4-Túnel do Marão
Concession” came to nothing, creating a long and lengthy suit, characterised by unpredictable changes, dictated by
incomprehensive and unacceptable attitudes on the part of the State. The Concessionaire, barred in those conditions
to comply with the obligations resulting from the concession contract, in July petitioned with the Arbitral Tribunal, the
termination of the contract, due to motives attributable to the Grantor – expecting that the ruling shall be given at
the beginning of 2014. The same circumstances led “JV Infratúnel” and “TdM” to terminate, respectively, the “Project
and Construction Contract” and the “Operation Contract” – declarations that due to the non-exercising of the rights
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29MSF . Annual Report 2012
contractually stated in favour of the State and the Banks, were put into effect at the start of the third quarter of 2012,
therefore effectively terminating the contracts since then.
Still within the sphere of “Auto-Estradas do Marão, S.A.” (AEM), at the end of May 2012, the Banks demanded that
the shareholding entities of AEM call in additional paid-in capital, in the maximum amount initially forecasted. The
Shareholders’ legal understanding was that said amount is not owed, but only the sum needed to liquidate the Own
Funds facilities. The Shareholders timely injected funds into AEM in order to satisfy its obligations. The banks called on
the guarantees given by the shareholders, in the amount they intended. The process for the establishment of an Arbitral
Tribunal was initiated in June to demand that the Banks reimburse the funds illegally appropriated, and pay an indemnity
for damages suffered by the shareholding entities of AEM – it is estimated that the ruling be given until the end of 2013.
The completion of the construction of the stretches of the IC9 - Nazaré / Alcobaça, EN1 / Fátima and Fátima / Ourém
which was achieved on 30th April and of the “IC 32 - Nó de Penalva”, on 1st November, marks the entry into service of
the totality of the sub concessioned road network, respectively the “Auto-Estradas do Litoral Oeste, S.A.” and “Auto-
Estradas do Baixo Tejo, S.A.”. It should be noted that in what concerns each of these entities, during the third quarter of
2012, a understanding memorandum was signed with “EP, Estradas de Portugal, S.A.”, for the negotiation of specific and
limited reductions of the subject of the sub concession contract.
6. SUSTAINABILITY IN VALUE CREATION
MSF constantly strives to ensure that its activity has a positive impact on the improvement in the quality of life of
people and communities, as well as in conserving the environment. It has the firm purpose to contribute to growth in
a sustainable manner. This is a very broad concept, encompassing a respect for ethical values and principles, employee
motivation and development, the promotion of safety, health and well-being and ensuring good levels of productivity,
efficiency, innovation, cost control, risk management, the search for better practices and technical solutions, environmental
conservation and corporate social responsibility.
6.1. hUMAN RESOURCESAt 31st december 2012, 2,145 employees were in the pay of MSF and the entities integrated in its consolidation perimeter,
compared with 3,648 at year-end 2011. This figure includes 571 employees working on a temporary basis, as at the
closure of the Financial Year of 2012.
As an upshot of the high degree of globalisation, those employees working abroad in the pay of companies in the MSF
consolidation perimeter stood at 1,094, around 51% of the total, at the end of the Financial Year.
As far as MSF and branches are concerned, it is worth mentioning that over 40% of employees are top-level, highly
qualified permanent staff.
MSF believes that the continuous increase in the qualification of its Human Resources is vital so that they will have the
tools at their disposal to provide an effective response to the challenges which lie before them. With this in mind, in
2012 the Company promoted 198 training procedures involving 1,247 participations in a total of 3,942.8 hours. These
procedures essentially affected the fields of Quality, Safety and the Environment, Engineering Techniques, Accounts and
Finance and Computing.
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30 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
The commitment to strengthen its employees’ skills has been accompanied by an active campaign to raise the awareness
and training of its outsourced collaborators, seeking an ever greater integration and commitment by these entities to
MSF’s policies and objectives.
6.2. OCCUPATIONAL hEALThMSF maintained its policies to promote its employees’ health and the Company met those aims it had set itself for 2012.
In addition to the medical examinations intended to comply with the legal obligations, the following activities are worthy
of special note in this area:
• Medical examinations complemented by an electrocardiogram, audiogram, eye test, and a spirometry for a complete
evaluation, as possible, of employees’ state of health, in terms of the professional activity they undertake;
• High Blood Pressure (HBP) Control Programme amongst employees involving procedures to raise awareness
concerning cardiovascular risks of HBP, BP surveillance and healthy lifestyle advice. With this in mind, the MSF Vida
Activa strolls were continued;
• during 2012, the implementation of gymnastics was extended to other workplaces other than headquarters;
• Monitoring of noise exposure for all Company employees and temporary workers and the choice of the most suitable
ear protectors to minimise the risks of occupational deafness. All employees are informed regarding the noise counts
that they are exposed to, as well as the protection measures that they must adopt;
• Information to travelling employees concerning health risks and prophylactic measures recommended for each region.
6.3. QUALITY, SAFETY AND ENVIRONMENT SYSTEMIn 2012, MSF ended another three year certification cycle, with great success in 2012.
The current certification associated with Quality, Safety and Environment (QSA) mirrors the management policies adopted
long ago by the Company and is shown on the day-to-day of its collaborators and in projects in which it is involved in.
The QSA System within the international works was further implemented throughout the year, as a result of the quest to
maintain the high standards of internal demands, validated by the QSA Internal Audit Programme, which also includes
the technical audits under the responsibility of the Audit and Financial Rebalancing Service (SAR).
The international projects, due to the multitude of requirements within the QSA sphere, have been presented to the
collaborators as a constant challenge, both in what concerns the need to master the referred requirements and in what
concerns the management of the means needed for their implementation and compliance. In this sense, there has been
an ongoing follow up on the international works, on the part of the QSA technical team, thus guaranteeing the support in
understanding and in implementing the system.
Throughout the year the requirements of the ISO/IEC 17025 standard were maintained, in the context of competences
for test laboratories. The 2nd IPAC Accreditation Audit was carried out, with very positive results for MSF and the
maintenance of the accreditation of the Laboratories at Ota, Venda Nova III and Foz Tua.
“CASAS DO PARQUE” CONDOMINIUM . LISBON . PORTUgAL
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31MSF . Annual Report 2012
The yearly objectives were achieved and by year end, in response to the ongoing adjustment of the Company to the
growing international activity, MSF initiated a large internal discussion cycle concerning a timely revision of the QSA
System.
6.4. TEChNICAL DEVELOPMENT AND SUPPORT SYSTEMThe Technical and Auditing division (dTA), founded in 2008, includes the Technical Office (SES), the Topography Service
(STO) and the Auditing and Financial Rebalancing Service (SAR). Since said date, it has operated as a works’ support
structure, both in the domestic and foreign markets, in the quest for better practices and innovative technical solutions,
which add value to its trade debtors and to the Company.
during 2012, the technical audits were fully subordinated to the Company’s Quality, Safety and Environment System.
during the course of the Financial Year, seven audits were carried out, six in the international area (Africa) and one in the
domestic market.
6.5. RISK MANAGEMENT during the carrying out of their activities, MSF and its affiliate companies are exposed to different types of risks and levels
which derive from the uncertainties and threats inherent in the carrying out of operations in multiple sectors, countries
and socioeconomic and legal settings. In the awareness of the fact that risk exposure is limited and accessory to activity,
both in its business area and in those of its affiliate companies, MSF seeks, on a day-to-day basis, to control, mitigate
the potential negative impacts and make the most of any opportunities for improvement, with a view to ensuring the
continuity of operations and value creation.
Risk management at MSF essentially consists of impact identification and evaluation and the determination of mitigation,
implementation, monitoring and reporting actions. In this regard the Quality, Safety and Environment System plays a
vital role, contributing by defining the internal procedures and standards at the most varied levels, setting out to ensure
that the activities are carried out in the safest, most effective and controlled manner, without any unexpected events
and respecting the various standards and policies. At the Company, there are methodologies developed to deal with the
risks associated, inter alia, with the drawing up of bids, the volatility of raw materials’ prices, the carrying out of works,
purchasing and operating equipment, customer credit, the performance capabilities of trade suppliers or subcontractors,
project management, the provision of guarantees and the integrity of its assets, including that of its information and
communications’ systems. Specifically in the financial area there are procedures aimed at risk management, such as
interest rate variations, forex variations, liquidity and counterparty risks.
Also worthy of note, is the fact that with the consolidation of its global presence and the continuous growth in MSF’s
appearance in different markets, specific measures have been strengthened, in terms of managing the risks inherent in
carrying out activity abroad.
6.6. INFORMATION AND DEVELOPMENT SYSTEMSNotwithstanding the desired savings, the Company continued to invest in its information systems, seeking greater control
over operations and inducing productivity increases by automating some tasks. The geographical dispersion forces the
permanent seeking of solutions which mitigate the impact for the end user, through procedures carried out to protect the
functionality of applications, to which a growing number of users from different countries have access to, highlighting the
care with the monitoring of the communication links, the functioning of all infrastructure and the correct and timely support
from the help desk.
ROAD INTO vALE DA RIBEIRA DA TORRE . SANTO ANTÃO ISLAND . CAPE VERDE
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32 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
Some of the Group branches have also benefitted from the implementation of Oracle PeopleSoft Financials projects to cover the financial areas, and extension projects of the invoice checking platforms in Ghana, Cape Verde and Angola
were carried out, which will make a major contribution to the standardisation of procedures and the enhancement of the
information available. An upgrade in the AXIS4AII (applicational system developed by the Group and directioned to the operational management and business support of the entities of the Civil and Public Works sector) was carried out in
order to integrate functionalities, in order to support requirements associated with the growing international commercial
activity and incorporate recent technologies, guaranteeing compatibility with the new software versions, among them,
the Microsoft Office.
during 2012, it is worth noting the implementation project of the salary processing module in Oracle PeopleSoft, seeking to standardise systems within the Human Resources area and the establishment of a document managerial module,
so as to respond to a growing need of organisation and analysis of documents, avoiding hard copies and speeding up
researches. This system was extended not only to the works but also to other central services of MSF.
6.7. ENVIRONMENTAL RESPONSIBILITYAs already referred to in previous years, MSF – to be precise, through its QSA system – has made an on-going effort to
conserve the environment and has implemented various measure and control counts with a view to the promotion to its
employees, suppliers, outsources and other business partners, of the values and principles of environmental responsibility.
during the Financial Year of 2012, raising awareness and training campaigns in terms of rational energy use and reduced
consumption were continued, inter alia. These campaigns focused both on fixed premises and building sites. Under
the policies defined, raising awareness actions were implemented and the reduction in water consumption and the
minimisation of the impacts deriving from its use were promoted. The procedures to promote a reduction in sound
pollution were continued, as were general impact minimisation procedures, in terms of dust and emissions of CO2, COV
and HCFC.
2012 was the third year involving the full use of the new MSF Headquarters, opened in late 2009. during the course of
the year, and further to the experience acquired from another complete Financial Year with the existing consumption,
production and billing elements, there was a review of the basic operation of the building and some additional measures
were introduced, with a view to optimising energy consumption and production. This is a developing process, bearing
in mind the results gradually obtained over time and in view of the building’s dynamics, its use and reactions to external
factors (seasons of the year).
6.8. CORPORATE SOCIAL RESPONSIBILITYUnder its patronage policy and in collaboration with social, cultural and educational institutions and projects, the MSF
Group provides support in the form of implementing civil construction works, but also by providing funds or goods to
entities and causes which support groups in need.
2012 was another difficult year for many communities and MSF maintained its support, making more employees available
for initiatives connected with social welfare actions. As in previous years, apart from the initiatives specifically carried out
by the Company and affiliates, the social initiatives also encompassed the participation in activities organised by other
entities which brought together a series of entities and promoted welfare actions.
-
33MSF . Annual Report 2012
Globally, procedures continued to be undertaken for the benefit of local communities, namely, working on improvements
in infrastructures like schools, water and road systems.
7. PROSPECTS FOR 2013
All prospects would suggest a further shrinking of the Portuguese economy in 2013 and the continuation of an adverse
economic climate for the Construction sector, with great limitations to investments.
Against this economic backdrop, 2013 is expected to once again lay increased challenges down to the various economic
agents, companies in general and also MSF, in terms of the pursuit of their objectives. The existence of negotiations
aiming for the awarding of several contracts and signatures, of which are expected to occur during the first semester of
2013, the works in progress in various countries, backed up by an order book of around 636 million Euros at year-end
2012, enhance the expectation of a growth in the international markets and foresees the strengthening of the Company’s
globalisation level.
The implementation of “Regional Hubs” at the start of 2013, allowing for the optimisation of resource management and
the continued priority to strengthen economic and financial soundness, will lead to the successful implementation of the
outlined strategy.
8. RELEVANT FACTS FOLLOWING END OF FINANCIAL YEAR
Following the closing of the Financial Year, we would highlight:
• The awarding of the works’ contract for the construction of the infrastructure of the new Alegro Shopping Mall in
Setúbal, for Multicenco - Estabelecimentos Comerciais, S.A., for the amount of 15 million Euros and to be carried out
by and JV led by MSF, in which it holds 50%;
• The awarding intention by GE Proyectos, of the construction contract of the Mofup-Nsok road, in Equatorial Guinea,
for the amount of 138 million Euros;
• The awarding intention by IFH, S.A., of the construction contract of 294 social housing dwellings in the Boa Esperança
district, Sal Rei, Boa Vista Island, Cape Verde, for the amount of 8.6 million Euros;
• The awarding intention by IFH, S.A., of the construction contract of 250 social housing dwellings in Palha Sé, Santiago
Island, Cape Verde, for the amount of 7.3 million Euros;
• The awarding of the construction contract of the Hotel Prestige & Spa, in Aljustrel, for Majogab, Investimentos
Unipessoal, for the amount of 15.6 million Euros and to be carried out by Neocivil;
• The awarding and the signing of the construction contract of the Royal Óbidos Spa & Golf Resort Hotel, in Óbidos, for
Royal Óbidos – Promoção e Gestão Imobiliária e Turística, S.A., for the amount of 9.7 million Euros and to be carried
out by Neocivil.
-
34 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
Furthermore, one has to note that in February 2013, MSF Engenharia established a branch in Moçambique (Maputo).
9. OThER LEGAL INFORMATION
MSF Engenharia has no debts outstanding neither to the Public State Sector nor to the Social Security authorities.
The Company does not hold any own shares in its portfolio, nor has it granted any authorisations to businesses between
the Company and its directors.
MSF Engenharia has seven branches: in Cape Verde (Town of Praia); in the United Arab Emirates (Abu dhabi); in Gabon
(Libreville); in Ghana (Accra North); in Equatorial Guinea (Bata - Litoral); in Poland (Warsaw) and in Senegal (Almadies
– dakar).
10. PROPOSED DISTRIBUTION OF INCOME
The Board of directors duly proposes that the net income for the Financial Year of 2012, in the sum of 391,493 Euros,
should be fully transferred to the retained earnings account.
INFRASTRUCTURE CONSTRUCTION TO INCREASE THE ENERGY PRODUCTION CAPACITY OF THE vENDA NOvA III DAM . MONTALEGRE . PORTUgAL
-
35MSF . Annual Report 2012
11. FINAL NOTE
The Board of directors would like to express its recognition to all of those who in 2012 gave their support in their
effort to achieve the Company’s objectives. It thanks the support and faith given by the Shareholder, the availability and
valued collaboration of the Audit Committee and of the Statutory Auditor, the effort, dedication and the uppermost
professionalism of MSF’s collaborators, as well as the fundamental cooperation of entities, companies and persons which
and whom it had the pleasure to meet.
Lisbon, April 15th 2013
The Board of directors
S-19 MOTORWAY BETWEEN STOBIERNA AND RZESZóW . RZESZóW . POLAND
-
(Eur)
NON-CURRENT ASSETSTangible fixed assetsInvestment propertiesGoodwillIntangible assetsFinancial investments - loans grantedFinancial investments - other methodsAdvance on account of investmentsShareholdersOther receivablesdeferred tax assets
CURRENT ASSETSInventoriesTrade debtorsAdvances to trade suppliersState and other public entitiesShareholders Other receivablesdeferralsCash and bank deposits
TOTAL ASSETS
20
21
22
23
24
24
24
25
26
19
27
28
29
30
25/38
26
31
4
40,994,924
2,484,445
19,281,843
587,157
8,850,000
13,289
2,711,565
17,560,518
1,188,904
93,672,645
23,960,460
128,877,245
6,780,032
6,314,606
944,629
47,386,247
1,043,119
15,849,351
231,155,689324,828,334
39,313,865
2,531,761
19,281,843
734,507
3,550,000
8,284
1,139,113
13,134,937
17,560,518
1,578,692
98,833,520
26,099,685
187,417,086
7,289,010
10,812,695
910,282
56,870,797
3,324,164
32,251,673
324,975,392423,808,912
CONSOLIDATED BALANCE SHEET AS AT 31ST deCeMBeR 2012
(Eur)
EQUITYPaid-up share capitalOther equity instrumentsShare premiumsLegal reservesRetained earningsAdjustments to financial assetsOther equity variationsNet incomeNet income attributed to capital holders of parent company Minority interests TOTAL EQUITY
LIABILITIESNON-CURRENT LIABILITIESProvisionsLoans obtainedLoans obtained - leasingShareholders deferred tax liabilities
CURRENT LIABILITIESTrade suppliersAdvances from trade debtorsState and other public entitiesShareholders Loans obtainedLoans obtained - leasingOther accounts payabledeferralsFinancial instrument liabilities
TOTAL LIABILITIESTOTAL EQUITY AND LIABILITIES
32
32
32
32
32
32
32
43
33
34
34
25/38
19
35
36
30
25/38
34
34
37
31
41
28,067,480
42,500,000
997,596
5,683,834
19,336,649
-2,424,492
-1,159,341
391,493
93,393,219
1 ,439,398
94,832,616
10,075,184
15,012,295
5,880,635
3
1,707,406
32,675,523
62,269,963
28,621,618
4,322,000
146,054
63,399,608
3,865,089
12,632,343
20,485,851
1,577,670
197,320,196229,995,719
324,828,334
28,067,480
42,500,000
997,596
5,683,834
12,321,073
-908,501
-3,386,670
7,015,576
92,290,388
2,720
92,293,108
10,321,561
10,016,790
9,051,295
3
1,010,902
30,400,551
112,964,488
35,236,910
7,316,933
2,561,970
85,258,432
6,354,663
14,598,096
32,216,047
4,607,714
301,115,253331,515,804
423,808,912
ACCOUNTS NOTES 2012 2011
ASSETS
ACCOUNTS NOTES 2012 2011
EQUITY AND LIABILITIES
-
CONSOLIDATED INCOMESTATEMENT BY NATURE AS AT 31ST deCeMBeR 2012
(Eur)
Sales and services renderedOperating subsidiesVariation in production inventoriesIn-house worksCost of goods soldThird party supplies & servicesPersonnel expensesInventory impairment (losses/reversals)Accounts receivable impairment (losses/reversals)Provisions (increases/reductions)Increases/reductions in fair valueOther revenue and gainsOther expenses and losses
Income before depreciation, loan expenses and taxes Expenses/reversals of depreciation and amortisation Operating income (before loan expenses and taxes) Interest and other similar revenue obtainedInterest and other similar expenses paid Income before taxes Income Tax Net income Minority interestsNet income attributed to capital holders of parent company
6
7
8
9
10
11
12
27
13
33
14
15
16
17
18
19
262,725,579
254
-535,786
197,302
-55,012,635
-144,946,862
-50,615,672
-13,188
984,476
205,763
23,426,997
-12,895,587
23,520,641
-12,178,094
11,342,547
3,730,285
-13,328,945
1,743,887
-1,774,504
-30,617
-422,110
391,493
507,990,534
4,066
-566,891
188,946
-108,836,328
-306,350,093
-52,339,644
-300,281
-1,065,572
262,512
6,832,504
-10,505,142
35,314,611
-15,100,480
20,214,131
6,264,866
-12,379,840
14,099,157
-7,099,715
6,999,442
-16,134
7,015,576
ACCOUNTS NOTES 2012 2011
-
38 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
(Eur)
ACCOUNTS NOTES 2012 2011
Sales and services renderedCost of sales and services rendered Gross income Other revenuedistribution expensesAdministrative expensesR&d expensesOther expenses Operating income (before loan expenses and taxes) Net loan expenses Income before taxes Income tax Net income Net income attributed to:Capital holders of parent companyMinority interests
6
43
43
19
43
262,725,579
-227,255,170
35,470,409
2,833,643
-26,304,258
-6,041,007
5,958,788
-4,214,901
1,743,887
-1,774,504
-30,617
391,493
-422,110
-30,617
507,990,534
-464,923,333
43,067,201
3,250,196
-23,314,191
-6,049,863
16,953,343
-2,854,186
14,099,157
-7,099,715
6,999,442
7,015,576
-16,134
6,999,442
CONSOLIDATED INCOMESTATEMENT BY FUNCTION AS AT 31ST deCeMBeR 2012
-
39MSF . Annual Report 2012
(Eur)
ACCOUNTS NOTES 2012 2011
CASh FLOW FROM OPERATING ACTIVITIESReceived from trade debtorsPayment to trade suppliersPayrollCash generated from operations(Payment)/Reimbursement of income taxOther receipts/(payments) Cash flow from operations (1) CASh FLOW FROM INVESTING ACTIVITIESPayments concerning:Tangible fixed assetsIntangible assetsFinancial investmentsTerm deposit for guaranteeOther financial assetsReceipts concerning:Tangible fixed assetsIntangible assetsFinancial investmentsOther assetsInvestment subsidiesInterest and similar revenuedividends Cash flow from investments (2) CASh FLOW FROM FINANCING ACTIVITIESReceipts concerning:Loans obtainedPaid-up capital and other equity instrumentsLoss coverage donations Shareholders/Shareholders’ loansOther loansPayments concerning:Loans obtained Amortisations of financial leasing agreementsInterest and similar expenses dividends Reductions in capital and of other equity instrumentsShareholders/Shareholders’ loansOther loansCash flow from loans (3) Change in cash and equivalents (1+2+3)Translation gains/lossesPerimeter changes Opening cashEnding cash
4
4
4
315,401,739
-258,123,222
-45,020,020
12,258,497-2,660,761
8,573,755
18,171,491
-4,687,012
-506,476
-5,300,000
-1,800,000
-646,996
89,874
1,448,274
694,978
-10,707,358
36,104,495
64,272,317
27,235
-55,397,925
-8,330,442
-8,199,663
-54,344,698
-25,066
-25,893,747
-18,429,614168,278
59,01432,251,67314,049,351
494,762,287
-437,507,574
-46,921,834
10,332,879-1,279,465
48,007,631
57,061,045
-6,091,734
-654,459
-1,560,982
144,034
380,419
1,333,706
-6,449,016
135,263,162
26,000,000
417,291
-150,672,036
-5,187,957
-11,140,554
-2,462
-40,107,500
-267,482
-45,697,538
4,914,4911,645,822
809,28324,882,07732,251,673
CONSOLIDATED CASH FLOWSTATEMENT AS AT 31ST deCeMBeR 2012
-
40 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.
LEGALRESERVE(Note 32)
5,374,116
309,718
5,683,834
5,683,834
Balance at 01.01.2011 Net income distribution of the 2010 net income Transference due to non-attributed income Other changes Exchange changes due to integration of branch accounts Minority interests due to consolidation perimeter change Fair value of hedging financial instrument Balance at 01.01.2011 Net income distribution of the 2011 net income Transference due to non-attributed income Other changes Exchange changes due to integration of branch accounts Minority interests due to consolidation of perimeter change Change in the fair value of hedging financial instrument net of tax Balance at 31.12.2012
32
32
43
41
32
32
43
28,067,480
28,067,480
28,067,480
PAID-UPShARE
CAPITAL(Note 32)
NOTES OThEREQUITY
INSTRUMENTS(Note 32)
ShAREPREMIUM(Note 32)
41,758,910
741,090
42,500,000
42,500,000
997,596
997,596
997,596
CONSOLIDATED STATEMENT OF CHANgES IN EQUITY AS AT 31ST deCeMBeR 2012
-
41MSF . Annual Report 2012
ADjUSTMENTSTO FINANCIAL
ASSETS(Note 32)
NETINCOME
TOTALATTRIBUTABLETO ThE GROUP
MINORITYINTERESTS
(Note 43)
OThEREQUITY
VARIATIONS(Note 32)
RETAINEDEARNINGS
(Note 32)
TOTALEQUITY
-1,268,151
-7,124
366,774
-908,501
-51,035
-1,464,957
-2,424,492
6,194,368
7,015,576
-6,194,368
7,015,576
391,493
-7,015,576
391,493
87,560,742
7,015,576
-7,124
366,774
-2,645,580
92,290,388
391,493
-51,035
-1,464,957
2,227,329
93,393,219
-16,134
18,854
2,720
-422,110
1,858,788
1,439,398
-3,386,670
-3,386,670
2,227,329
-1,159,341
6,436,423
5,884,650
12,321,073
7,015,576
19,336,649
87,560,742
6,999,442
-7,124
366,774
18,854
-2,645,580
92,293,108
-30,617
-51,035
-1,464,957
1,858,788
2,227,329
94,832,616
(Eur)
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CORPORATE ENTITIESSENIOR STAFFOWNERSHIP STRUCTUREMANAGEMENT REPORT FOR THE FINANCIAL YEAR OF 2012CONSOLIDATED BALANCE SHEET AS AT 31ST DECEMBER 2012CONSOLIDATED INCOME STATEMENT BY NATURE AS AT 31ST DECEMBER 2012CONSOLIDATED INCOME STATEMENT BY FUNCTION AS AT 31ST DECEMBER 2012CONSOLIDATED CASH FLOW STATEMENT AS AT 31ST DECEMBER 2012CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31ST DECEMBER 2012