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013 DIRECTORS’

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REPORTDIRECTORS’

4 INDEX | DIRECTORS’ REPORT 2013

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STATUTORY BOARDS 06

MESSAGE FROM THE CHAIRMAN 08

CONSOLIDATED MANAGEMENT REPORT 10

01. The Secil Group in 2013 1202. Main Developments in 2013 2103. Portugal 2204. Tunisia 2605. Lebanon 2806. Angola 3007. Cape Verde 32 08. Outlook 3409. Proposed allocation of results 35

CONSOLIDATED FINANCIAL STATEMENTS 36

01. Consolidated balance sheet 38 02. Consolidated income statement 39 03. Statement of changes in consolidated shareholders’ equity 4004. Statement of consolidated cash flows 4405. Index to the notes to the consolidated financial statements 4606. Notes to the consolidated financial statements 48

ANNEXES 180

SUSTAINABILITY REPORT 18601. This report 18802. Secil 19003. Sustainability strategy andmanagement 19404. Sustainability - Priorities for the future 19505. Secil in numbers 208

ANNEXES 212

SOCIAL RESPONSIBILITY REPORT 21801. The Secil Group and its employees 22002. The Secil Group and the community 232

ORGANIGRAM 104

6 STATUTORY BOARDS | DIRECTORS’ REPORT 2013

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PEDRO MENDONÇA DE QUEIROZ PEREIRA

GONÇALO DE CASTRO SALAZAR LEITE

FRANCISCO JOSÉ MELO E CASTRO GUEDES

CARLOS ALBERTO MEDEIROS ABREU

SÉRGIO ALVES MARTINS

JOSÉ MIGUEL PEREIRA GENS PAREDES

PAULO MIGUEL GARCÊS VENTURA

JOÃO LUÍS BARBOSA PEREIRA DE VASCONCELOS

BOARD OF DIRECTORS

PEDRO MENDONÇA DE QUEIROZ PEREIRA Chairman of the Directors

GONÇALO DE CASTRO SALAZAR LEITE President of Executive Comitee

CARLOS ALBERTO MEDEIROS ABREUMember of Executive Comitee

SÉRGIO ALVES MARTINSMember of Executive Comitee

JOÃO LUÍS BARBOSA PEREIRA DE VASCONCELOSMember of Executive Comitee

FRANCISCO JOSÉ MELO E CASTRO GUEDESMember of Board of Directors

JOSÉ MIGUEL PEREIRA GENS PAREDESMember of Board of Directors PAULO MIGUEL GARCÊS VENTURAMember of Board of Directors

_STATUTORY BOARDS

8 MESSAGE FROM THE CHAIRMAN | DIRECTORS’ REPORT 2013

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_MESSAGE FROM THE CHAIRMAN

AN EXERCISE IN RESILIENCE

In 2013, the priority established by Secil was the implementation of the Com--pany’s plan for adjustment and resizing, in response to the profound decrease in business resulting from the economic crisis in the country, which particularly affected the construction sector.

In view of the three principal lines of action outlined in this plan - to adjust the pro-duction and cost structure to the level of existing business, to export more, and to achieve performance excellence in mana-gement - various actions were undertaken to reduce costs and change procedures to improve the production indicators.

To this operational effort was added an improved performance level with regard to exports, so that good interim results were achieved, which still need to be consolidated and expanded.

Moreover, the development of Secil’s international operations has steadily improved. This is a long-term strategy, which, this year in particular, is already achieving good results for Ciment de Sibline in Lebanon.

It is essential for Secil to maintain this resilience in view of the adverse condi-tions, ensuring the achievement of its

objectives, clearly defined and widely shared by the entire organization. We will continue to encourage the adop-tion of best practices and maintain our focus on business internationalization.In addition to the Annual Report and Accounts, this publication also in-cludes the Sustainability Report and Social Responsibility Report, which show that Secil, despite the prevailing financial constraints, remains commit-ted to integrated policies for sustaina-ble development, in which it generally achieves its proposed objectives in line with, or even surpassing, the sector’s international best practices.

For all these reasons, I encourage all Secil employees to continue to persevere along this difficult path that, I am cer-tain, will bear fruit in the coming years.

Pedro Queiroz PereiraChairman of the Board of Directors

10 CONSOLIDATED MANAGEMENT REPORT | DIRECTORS’ REPORT 2013

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1. The Secil Group in 20132. Main Developments in 2013 3. Portugal 4. Tunisia 5. Lebanon 6. Angola 7. Cape Verde 8. Outlook 9. Proposed allocation of results

CONSOLIDATED MANAGEMENT REPORT

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especially in countries facing serious budgetary and financial difficulties, including Portugal, which is the Secil Group’s main market.

In this context, the company’s expec-tations for 2013 were for a year of un-certainty, with business hard hit by the economic situation and in particular by the depression in the construc-tion sector in Portugal. Secil pressed ahead with the strategy, delineated and first implemented in 2012, by ad-justing operations in Portugal into line with the new business reality, positio-ning the Group advantageously for an upturn in the market.

The plan initiated in the previous year, which encompassed a broad array of measures to streamline costs and

_1.THE SECIL GROUP IN 2013

Growth in the world economy is esti-mated at 3% in 2013, with the emer-ging economies growing by 4.7% and the developed economies by only 1.3% (World Economic Outlook, IMF, January 2014).

The Euro zone remained in recession, with GDP falling by 0.4%. According to the latest projections, the economy in the Euro zone has started to rally, and growth of 1% is forecast for 2014, although this is expected to be more modest in the economies subject to adjustment programmes, where ex-ports will make a fundamental contri-bution to growth.

The construction industry and cement consumption both remain in a de-pressed state in the European Union,

maximize efficiency in all units in Por-tugal, led to significant savings and gains in 2013, although the negative growth which continued to affect the country has not allowed it to record positive results. The downsizing stra-tegy pursued has resulted in a signi-ficant reduction in personnel costs in Portugal, both in industrial operations, and at head office and in supporting units.

The process of restructuring, which started in 2012 and continued during 2013, meant that, in some units, the gains achieved have already led to a recovery in results, notably in the mor-tars and aggregates business areas. The new back office structure, set up in November 2012, has made it pos-sible to resize this area and achieve

THE SECIL GROUP IN 2013

01.

CONSOLIDATED MANAGEMENT REPORT | DIRECTORS’ REPORT 2013

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ever in 2013. Operations in Portugal continued to be geared to exports and constantly looking out for business opportunities in new markets.

In Tunisia, operations continued to be hampered by the restrictions on ex-ports and sales prices remained regu-lated and have been unchanged since June 2011. Even so, it was possible to increase export sales, bringing a significant improvement in operations, in view of the better returns offered by these sales.

Regarding capital expenditure in 2013, special mention should be made of the replacement of the coolers of the two kilns. This required shutting down the kilns and increasing clinker pur-chases which had a negative effect on the operating margin. The main aim of this project was to achieve energy gains, so as to cut costs, and to get a sustained increase in clinker output. The effects of these projects on output were already visible towards the end of 2013, and will be felt much more remarkably in 2014.

In Lebanon, the main focus of invest-ment was on improving performance in cement output, by cutting of pro-duction costs, improving environmen-tal performance and boosting output. The gains achieved were significant and had an extremely positive impact in 2013, with the Sibline cement mill recording its highest ever output of ce-ment and clinker production. Substan-tial reductions were achieved in pro-duction costs, thanks to a decrease in the clinker incorporation rate and lower energy consumption.

In 2013 the company started building up a new blocks plant in Lebanon, in or-der to diversify its business areas. This project is due for completion in 2014.

synergies, and a broader process of optimizing these functions has also been launched. This process has also involved IT projects designed to im-prove organizational processes and the renegotiation of a number of ser-vice contracts. The company will con-tinue to benefit from these efforts for ongoing improvement in 2014.

Increased efficiency has also been one of the Group’s main priorities in all its locations. The various operatio-nal units have pressed ahead with a series of initiatives in order to increase their profitability. It must be highlighted that cement operations in Portugal has implemen-ted a programme for pooling resources in maintenance, by centralizing func-tions, renegotiating maintenance and production contracts and reducing stocks. To improve energy efficiency has been another prime objective in Portugal. Projects were designed to cut the costs of thermal and elec-trical energy. The array of measures implemented has led to a higher rate of alternatives fuels substitution and to a reduction in power consumption, thereby generating savings on energy costs.

The various units in Portugal have pro-ved to be capable of responding to the reduction in sales volume on the domestic market and have pursued a strategy of focussing on products with greater value added, which have enri-ched the sales mix. This strategy has resulted in an increase in average sa-les prices in aggregates and mortars. Sales have also increased in value ad-ded ready-mixed concrete products.

Secil has successfully continued to fo-cus on its export strategy. Cement ex-ports have reached the highest volume

In Angola, the constant pressure on sales prices, which had already been felt in 2012, was particularly strong in 2013. The company implemented a se-ries of projects designed to cut down production costs, so that it could im-prove its margin and offset the squeeze on sales prices. Among these projects were the fitting of a separator circuit in one of the cement mills which allows a cement production with a lower rate of clinker incorporation. This resulted in a reduction in variable production costs from November onwards.

The Board of Directors is confident that these measures, combined with the long term commitment to exports and international expansion, will allow the Group to restore its profit levels and profitability.

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MAIN CONSOLIDATED OPERATIONAL INDICATORS 2013 2012 VARIATION Cement Production Capacity 7,650 7,650 0.0%Sales Volumes Grey Cement 1 000 t 4,574 4,551 0.5%White Cement 1 000 t 87 92 -4.6%Artificial Lime 1 000 t 56 66 -15.7%Clinker 1 000 t 231 315 -26.8%Ready-Mixed Concrete 1 000 m3 1,027 1.266 -18.9%Aggregates 1 000 t 1,790 2.056 -12.9%Pre-Cast Concrete 1 000 t 74 87 -15.4%Mortars 1 000 t 99 141 -29.7%Hydraulic lime 1 000 t 22 15 47.0%Mortar fixative 1 000 t 12 10 21.8%Personnel Number of employees 2,127 2,247 -121Accident frequency ratio 1.37 1.28 7.5%Accident severity ratio 34.13 27.51 24.1%

CONSOLIDATED INCOME STATEMENT (THOUSAND OF EURO) 2013 2012 VARIATION Turnover 411,525 450,233 -8.6%Operational costs 351,491 379,482 -7.4%EBITDA 60,034 70,750 -15.1%Amortization, depreciation and provisions 66,761 87,865 -24.0%EBIT -6,727 -17,115 -60.7%Net financial results -23,919 -12,750 87.6%Profit (Loss) before income tax -30,645 -29,865 2.6%Income tax expense 1,509 -3,897 -138.7%Minority interests -5,761 -4,698 22.6%Net Income attributable to company’s equity holders -34,897 -38,459 -9.3%

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by 259 thousand m3 in volume from 2012. Concrete sales in Tunisia held steady at 2012 levels, whilst in Leba-non they grew significantly, recording an increase of 16%. However, this growth was not enough to offset sales decline in Portugal, given the relative importance of the domestic market in the Group’s total concrete sales.

The Secil Group recorded a turnover in 2013 of 412 million euros, down by 38.7 million euros on the figure recor-ded in 2012.

Secil’s Group cement and clinker sales have totalled 4.9 million tons, approxi-mately 1.5% down on the sales recor-ded in 2012. Strong sales performance in Lebanon (up 7%) and sales growth in Tunisia (up 4%), thanks to increase in exports, helped to mitigate the sales recorded in Portugal.

The performance of cement sales in Portugal continued to suffer the effects of the adverse economic situation. The focus on exports meant that the drop of 21% in sales on the domestic market was partially mitigated by the growth in exports. Therefore, total sales in the Portuguese domestic market were down by 9%.

In 2013 the Group’s sales of ready--mixed concrete fell by 19%. This reduction was largely due to the per-formance of operations in Portugal, where sales slumped by 27%, down

TURNOVER (THOUSAND OF EURO) 2013 2012 VARIATION Portugal 259,597 303,221 -14.4%Lebanon 90,415 88,027 2.7%Tunisia 67,199 67,086 0.2%Angola 23,870 28,531 -16.3%Cape Verde 5,425 5,846 -7.2%Other 1,079 2,101 -48.7%Intercompany -36,059 -44,578 -19.1%Consolidated Total 411,525 450,233 -8.6%

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at 16.3%. This was due to a significant decrease in prices as a result of fierce market competition in 2013.

EBITDA stood at 60 million euros, down by approximately 10 million eu-ros in relation to the previous year.

This reduction is mainly justified by the decrease in turnover from operations in Portugal.

It stands out the positive performance of operations in Lebanon, thanks to the increase in cement and concrete sa-les. In Tunisia, the Group achieved an increase in exports (with higher prices than in the home market), whilst sales on the domestic market held steadily.

Cement sales in Angola were down by approximately 5.5% in volume, but the reduction in turnover was higher,

EBITDA ( THOUSAND OF EURO) 2013 2012 VARIATIONPortugal 20,894 39,342 -46.9%Lebanon 31,301 22,476 39.3%Tunisia 7,477 8,956 -16.5%Angola 241 2,601 -90.7%Cape Verde 194 66 194.6%Other -73 -2,692 -97.3%Consolidated Total 60,034 70,750 -15.1%

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depreciated by around 7%, had a negative impact in Tunisia’s EBITDA of 563 thousand euros, and that the depreciation of the dollar, by around 3.3%, brought down Lebanon’s EBI-TDA by 1 million euros.

If we remove the impact of CO2 permit sales, the impact of currency depre-ciation and variations in the impair-ment of inventories and receivables, the EBITDA for 2013 was higher than in 2012 by around 2 million euros. In a particularly adverse environment, and considering the drop in turnover, this fact reflects the success of the various measures undertaken within the Group’s operations and most sig-nificantly in Portugal.

Personnel costs were brought down by 12% in comparison with 2012. At year-end 2013, Secil Group had a workforce of 2 127 employees which represents a significant reduction in relation to 2012 (2 247 employees). This reduction is all the more signifi-cant when compared with the start of 2012: 2 565 employees.

The process of reorganization was launched in Portugal in 2012 in the cement, ready-mixed concrete and aggregates units. In 2013, the process included the precast concrete and cement operations in Portugal (albeit on a smaller scale than in 2012). The workforce in Portugal has fallen from 1 338 in 2011 to 1 057 in 2012 and 950 at year-end 2013.

The Group has pressed ahead with a series of initiatives in its different bu-siness units in order to improve ope-rational profitability. With this aim the Portugal Cement unit continued the projects initiated in 2012. These pro-jects were mainly related with mainte-nance, alternative fuels and renegotia-tion of service contracts.

This reduction was largely due to lower earnings from sales of CO2 emission permits surplus - down by 8.2 million euros - and to an increase of approximately 3 million euros in the figures recorded for impairments on receivables and inventories. If these effects are removed, and despite a reduction of approximately 38.7 mi-llion euros in turnover, it is possible to see that management measures which have been implemented to cut costs and maximize efficiency made it possible to mitigate the decline in business by improving the profitability of operations.

In Portugal, growth in cement exports of cement and the pursuit of a range of initiatives and projects designed to optimize operations were not enough to outweight shrinking of the domestic market.

The significant improvement in Leba-non’ EBITDA made a decisive contribu-tion to compensate the drop in EBITDA from other group units. This increase was most strongly recorded in cement business. In addition to growth in sa-les, this unit achieved significant re-ductions in production costs thanks to improvements in production efficiency.

Although EBITDA was down in 2012 by approximately 10 million euros, performance had been boosted by to-tal earnings of 9.2 million euros from CO2 sales - whilst these sales stood at just 1 million euros in 2013 - with the company opting not to sell its reserve of permits surplus. The CO2 emission permits market was extremely volatile: prices started the year at around 6.60 €/t, falling to levels slightly below 3 €/t and then recovering to end the year at 4.83 €/t.

It should be stressed out that the weakness of the Tunisian dinar, which

In Lebanon, the gains achieved in pro-ductivity and consumption of thermal and electrical energy made it possible to cut production costs and increase the EBITDA margin. In Tunisia and Angola, projects over the course of 2013 enabled the respective units to improve their output significantly. Al-though these gains were only obtai-ned at the end of the year, meaning that their impact in 2013 was small, significant gains are expected in the course of 2014.

Secil recorded negative EBIT of 6.7 mi-llion Euros, due to the recording of de-preciation, provisions and impairments totalling 66.8 million euros. This figure includes 13.6 million in impairment of goodwill, in Portugal, and 2.8 million euros in impairment of fixed assets. In 2012 this item had been even more significant, with impairments totalling 31.2 million euros.

The Group recorded a financial loss of 23.9 million €, significantly worse than the figure of 12.8 million € recorded in 2012.

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euros. In addition to the effects of CO2 permit sales as mentioned above, this result reflects impairments of goodwill (13.6 million euros) and of fixed assets (2.8 million euros) as well as the increa-sed financial losses.

This situation was due to an increase in average indebtedness in relation to the previous year - and resulted from profit distribution and loans to shareholders held in 2012, and also the acquisition in that year of a 13.6% stake in the Su-premo Group. These operations took place at the end of the 1st half of 2012 which means it influenced debt and interest for only a part of that financial year. In 2013, debt and financial costs were also influenced by increased in-vestment in Supremo and by the ac-quisition of 45.58% of NSOSPE which represents a total of 15.6 million euros.

Profits from associated companies de-clined in 2013, presenting a negative figure of 2.2 million euros for the year. This reduction was caused above all by the inclusion on an equity method basis for NSOSPE. The net income of this associated company is affected by its financial loss as a result of the borrowing it took out to carry on Secil’s investments in Brazil.

Net income attributable to sharehol-ders in 2013 was negative at 34.9 million

NET FINANCIAL RESULTS (THOUSAND OF EURO) 2013 2012 VARIATION Interest and similar income 5,160 5,563 -7%Interest and similar expense -26,864 -18,308 47%Profit (Loss) from Associated Companies -2,214 -5 42608%Consolidated Total -23,919 -12,750 88%

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CONSOLIDATED BALANCE SHEET (THOUSAND OF EURO) 2013 2012 VARIATION Non-current Assets Tangible Assets 365,304 397,109 -8.0% Financial investments 33,408 29,430 13.5% Goodwill 114,967 132,212 -13.0% Other non-current assets 23,052 20,925 10.2%Current Assets Inventories 91,765 98,726 -7.1% Trade Receivables and other receivables 62,423 135,718 -54.0% Cash and cash equivalents 124,323 72,732 70.9% Other current assets 12,454 19,877 -37.3%Total Assets 827,697 906,729 -8.7%Equity Attributable to the company’s shareholders 249,034 306,061 -18.6%Minority Interests 66,192 65,679 0.8%Total Equity 315,226 371,739 -15.2%Non-current Liabilities Interest- bearing loans and borrowings 285,921 324,098 -11.8% Provisions 21,294 18,878 12.8% Other non-current liabilities 38,927 47,457 -18.0%Current Liabilities Interest- bearing loans and borrowings 71,365 35,354 101.9% Trade Payables 41,321 35,729 15.7% Other current liabilities 53,642 73,473 -27.0%Total Liabilities 512,470 534,989 -4.2%Total Equity and Liabilities 827,697 906,729 -8.7%

Secil Group’s total net assets stood at 828 million euros at 31 December 2013, down by 8.7% in comparison with year-end 2012. This was partly caused by the reduction of goodwill because of the recording of impair-ments, and the reduction of 31.8 mi-llion euros in the net value of tangible fixed assets. Investment in tangible fi-xed assets totalled 34.4 million euros. The impact of depreciation,, totalling 51 million euros, and the depreciation against the euro of the currencies of countries where the Group’s assets are located, causing an effect of ap-proximately 15.9 million euros, con-tributed to reduction in the value of this item.

Investments in tangible fixed assets re-late in the main to projects in cement operations in Portugal, Tunisia and Le-banon, and account for 85% of the total capital expenditure. The main projects in Portugal were held within the scope of alternative fuels; those in Tunisia referred to the replacement of the kiln coolers and those in Lebanon to the completion of the revamping of the line of kiln 1. These projects made it pos-sible to improve operational efficiency and consequently the profitability of these plants.

At 31 December 2013, net financial debt stood at 229.9 million euros which represents a reduction of 56.8 million

euros in comparison with the figure of 286.7 million euros in December 2012.

Over the course of 2013 the Secil Group maintained a number of unu-sed credit lines, in order to assure the funding of its current operations and potential investments in new assets. At the end of the year, total credit facilities contracted by the Group amounted to approximately 627 million euros, of which 267 million euros was not used.

In 2013 the banking system showed greater willingness to grant credit which was accompanied by an im-provement in the terms and conditions offered.

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In November 2013, the European Cen-tral Bank lowered its marginal lending rate to 0.25%, from the rate of 0.75% prevailing at the start of the year. The Euribor 3 month rate, the most repre-sentative benchmark for the Group’s borrowing, stayed at historically low levels albeit with a slight rise, moving from 0.187% at the start of the year to 0.287% at the end. This resulted in a negative impact on the company’s financial results.

On the foreign exchanges, the EUR/USD exchange rate was somewhat volatile, fluctuating over the year between 1.2786 and 1.3814, with an average of 1.3281.

In managing its foreign exchange risk, Secil Group pursued its policy of maxi-mising the potential of natural hedging of its currency exposure, by netting forex flows within the Group. In rela-tion to the USD, the main currency to which we are exposed, natural hedging in 2013 stood at 65%.

The Secil Group Pension Fund is divi-ded into four sub-funds with different risk profiles: one sub-fund allocated to the defined benefits plan - which con-tinues to adopt a conservative invest-ment policy - and three sub-funds allo-cated to the defined contribution fund with diversified profiles and a value of 13.1 million euros.

At 31 December 2013, the Secil Group Pension Fund presented an overall fi-nancial surplus of 4.1 million euros in relation to actuarial liabilities calcula-ted by independent actuaries with re-ference to the same date.

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KEY EVENTS 2013

02.

_PORTUGAL

> Launch of the “Secil +” programme involving all management staff in the Secil Group. This programme has been set for the next three years and it has been designed to align and provide in-formation on Group strategy, with 10 main priorities.

> Implementation of the project for integration and consolidation of SAP (UNO Project). It includes a number of improvements to the system that will allowthe optimization of these func-tions. > Cement exports stood at its highest level in the company’s history (1 062 thousand t).

> Completion of the gas by-pass sys-tems on the clinker production lines in Outão (kiln 8 in May and kiln 9 in July) and Maceira (kiln 5 in April and kiln 6 in July). This has contributed to the in-crease of the use of alternative fuels instead of fossil fuels.

> Start-up of the new cement bagging and palletting unit at the Secil-Outão Plant, making it possible to increase export capacity for bagged cement. > Merger of the operational manage-ment for Maintenance and Production at the Maceira and Pataias cement plants.

> Reorganization and downsizing of the precast concrete division.

> Acquisition of 2 pump trucks and 4 concrete mixer trucks to compensate for the closure of market operators and to assure concrete supplies.

> Consolidation of implementation of the Customer Relationship Manage-ment (CRM) System. This system pro-vides the integration of all customer information, interaction and needs, lea-ding to a closer relationship and pro-vision of a higher standard of service.

> The cement carrier Roaz made its first successful voyage to Madeira to unload cement in the silos of Cimentos Madeira. This now offers an important alternative for assuring regular supplies for our operations in the region.

> Secil obtained a positive result in the external audit conducted by APCER (Portuguese Certification Association). This was a follow-up and extension audit for the Environmental and Safety Certification of the Microalgae Unit, at the Cibra-Pataias Plant.

> Celebrations to mark the 90th anniver-sary of the Maceira-Liz Plant. “90 Years of Cementing History” was the slogan for celebrations that brought together past and present employees, clients and institutional partners in the region.

> Award of the Secil Architecture Award to José Neves, for the rehabilitation and extension design of Escola Francisco de Arruda, in Lisbon.

_LEBANON

> New records set for clinker and cement production and for sales volume.

> Completion of capital project for mo-dernization of line 1, cutting production costs, improving environmental perfor-mance and increasing production.

> Work started on the building of a blocks plant which is due for completion in 2014.

> Implementation of the SAP system.

TUNISIA

> Replacement of the coolers on the two kilns.

> Opening of new ready-mixed con-crete plant on the island of Djerba.

> Sud Béton obtained certification for quality (ISO 9001), safety (ISO 14001) and Environment (OHSAS 18001).

_ANGOLA

> Construction of a big bags filling line. Secil Lobito becomes the only supplier of cement type I 42.5 for the construc-tion of the new airport in Namibe and the municipal football stadium in Me-nongue.

> Fitting of a separator circuit on the cement mill. This will allow the produc-tion of cements with a low percentage of clinker incorporation which results in reduction in the variable production costs for CEM II 32.5 R cement. With this equipment, the plant will also be able to produce CEM I 52.5 R cement for the first time in Angola.

> Creation of the Angolan Cement In-dustry Association (AICA), with Secil Lobito as one of the founder members.

_CAPE VERDE

> Start of regular supplies to the islands of São Nicolau and Maio.

> First sales of CEM IV/A (V) 32.5 R cement, which is being made available in Cape Verde for the first time by Secil.

> Alteration of the power distribution layout at the aggregates plants helping to cut costs, and fuel consumption in particular.

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According to forecasts published by the IMF, gross domestic product fell by 1.8% in 2013 (World Economic Outlook, IMF, January 2014). Current estimates from the Bank of Portugal (Winter Economic Bulletin) point to con-traction of 1.5% in 2013, which implies an accrued drop of around 6% over the period 2011-2013. On a year-on-year basis, growth in GDP recovered over the course of 2013.

The current projections confirm the prospect of a gradual recovery of the Portuguese economy. As from the end of 2013 and through to the end of the

projection (2014-2015), the economy is expected to record positive growth in GDP (Winter Economic Bulletin - Bank of Portugal).

In 2013, the construction industry in Portugal was once again hit by a starkly recessionary environment. Budgetary restrictions led to a reduction in both public and private investment bringing down the level of cement consumption in Portugal.

The residential construction sector remained in decline, due to the large stocks of housing available for sale

and high levels of household debt. In public works, the traditional lever of the economy, the budgetary situation meant that projects were once again postponed.

However, we should point to less se-vere conditions in the second half of the year which, combined with positive evolution in economic indicators, su-ggests a higher level of confidence for 2014. According to the latest figures re-leased by FEPICOP, although the cons-truction industry remains in decline, the data from December 2013 points to a recovery in business indicators.

03.

UNIT 2013 2012 VARIATION

Cement Market 1000 t 2,800 3,516 -20%Clinker Prodution 1000 t 2,021 2,186 -8%Cement Prodution 1000 t 2,152 2,270 -5%Cement and Clinker Sales* Domestic Market 1000 t 1,081 1,364 -21%External Market 1000 t 1,488 1,471 1%Total 1000 t 2,570 2,834 -9%Ready-Mixed Concrete Sales* 1000 m3 699 958 -27%Aggregates Sales* 1000 t 2,281 2,666 -14%Mortars and Binders Sales* 1000 t 134 166 -20%Pre-Cast Concrete Sales* 1000 t 70 82 -15%Turnover 1,000 € 259,597 303,221 -14%EBITDA 1,000 € 20,894 39,342 -47%EBITDA Margin % 8% 13% EBIT 1,000 € -22,746 -27,875 -18%EBIT Margin % n.a. n.a. Capex 1,000 € 14,856 13,608 9%Employees Nº 949 1,055 -107

* Sales volumes relate to the total sales of each business area. Intercompany sales are not purged.

PORTUGAL


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The construction output index (INE - December 2013) presented a year-on--year variation in November 2013 of -14.4% which indicates a slightly less severe reduction than in the previous month (-15.8%). Although these figu-res still point to contraction, the year--on-year variations suggest a certain degree of recovery. In this context Secil once more recor-ded a decline in business operations in Portugal in 2013. Demand for cement continued to fall down on the year by 20% (as compared to 28.6% in 2012), according to figures from Cemapre. However, the negative year-on-year variations grew significantly smaller over the course of the year.

Estimates point to the domestic ce-ment market totalling 2.8 million tons, which represents a reduction of around 20% in relation to the previous year. Sales by Secil in the Portuguese ma-rket were in line with this trend, stan-ding at 1 081 thousand tons, 20.7% less than in 2012. Competition was extremely fierce in 2013 due to the existence of overcapacity in Portugal and also surplus supply in the Spanish market.

Despite the difficult environment, the cement unit maintained its competitive position in the domestic market, thanks to a marketing dynamic focussed on the diversity of the product range, con-solidation of the logistic structure and implementation of new approaches to customer relations. Efforts made over the year made it possible to increase the average sales price and also the proportion of more complex products with greater value added.

By market segment, retail and manu-facture fell by below the market ave-rage, whilst concrete production and construction fell more significantly

than the estimate of cement consump-tion for the country as a whole.

White cement manufactured by Secil was used in a number of high-profile construction projects, including the Panoramic Elevator in Sines and the Public Gardens Elevator in Covilhã. Su-pplies continued to the Nadir Afonso Foundation in Chaves (architect: Álvaro Siza Vieira), and to Edíficio Poente at Tagus Parque, Oeiras (architect: Frede-rico Valsassina) which was concluded this year.

Regarding projects with grey cement, it must be highlighted the supply to two major hydroelectric plants, at Venda Nova and Salamonde, in Vieira do Mi-nho, to the Igreja dos Navegantes at Expo Norte in Lisbon, conclusion of the Portugal Telecom Data Centre in Covi-lhã, construction of irrigation infrastruc-tures around the Alqueva reservoir and the Edifício Dynamic, in Braga.

Secil successfully maintained an ex-port-led approach, achieving an in-crease in total sales on foreign markets, which now account for 55% of overall sales. This increase was noticeable in sales of cement, which rose by around 16%, whilst clinker sales fell by 23%. These trends were advantageous as the margins on cement are greater.

Sales of ready-mixed concrete were the worst hit by the situation in the cons-truction sector, recording the most significant reduction, down by 27%. In addition to the dearth of construc-tion projects, this unit has to contend with fierce competition that result in a significant impact on sales prices and margins.

Aggregates sales dropped by 14%, corresponding to a decrease of 386 thousand tons. This reduction was even greater in Madeira, hit by the surplus

supply on the market (down by 48% on the previous year). This surplus was a result of the raw material available from engineering works in streams and maritime projects.

In mainland Portugal, a reduction in the sales volume was accompanied by a change in approach to the market, seeking to give priority to supplying higher-end aggregates. As a result, and although sales were down in volume, they presented a mix featuring higher priced products. Efforts continued to promote sales of ornamental stones, as initiated in 2012. Positive progress was made although these stones account only for a small proportion of total sales of aggregates.

In line with trends in the construction sector, planning permission was gran-ted for a smaller number of rehabilitation projects, confirming the loss of vitality in this sector already observed since the 2nd quarter of 2012. The sharp drop in the number of construction projects and in the size of each project has continued to contribute to fierce competition in the rehabilitation segment.

Mortar sales reflected market trends, with a 28% drop in the sales volume. The Group has pressed ahead with its strategy, first defined in 2011, of laun-ching and promoting new value-added products. This strategy has softened the impact of the reduction in sales volume.

Sales of hydraulic lime by Secil Arga-massas grew by an impressive 53% in relation to 2012. These sales were boosted by the closure of a competitor’s factory in March 2013.

On international markets, the Group continued to pursue the strategy defi-ned in 2012. Exports grew by 6%, with sales expanding into new countries such as Holland, Belgium and Canada.

24

PORTUGAL03.

Sales of precast concrete continued to decline in 2013. Competition in the market remained extremely fierce, with supply far outstripping demand and prices at very low levels. The reduction of 15% recorded in the Group’s sales of precast concrete was caused by a sharp drop in business by Secil Prebe-tão, where sales slumped by 20%, and by 27% in the case of concrete blocks, due to excess supply in the market.

Despite the economic situation, Argi-betão recorded growth in tile sales in

relation to 2012. Investment grew in re-tiling and re-roofing works, as did the use of tiles in new construction projects in the domestic market, where sales increased by 2% in quantity. Sales in the Spanish market also grew by 1%.In this context, total turnover in Por-tugal fell by 14.4% in relation to 2012, standing at 259.6 million euros. It is im-portant to note that the different units have pursued a strategy of focussing on products with greater value added in order to reduce the impact of lower sales volumes.

Turnover in cement business dropped by 9%, which represents a reduction of 15.7 million euros in relation to 2012. On the domestic market, efforts made over the year led to an increase in the average sales price and in the proportion of more complex products with greater value added. This means that the 20% reduction in sales quan-tities was reflected by a slightly smaller reduction - 18% - in turnover. In re-lation to products, the new CEM II/B--L 42,5R cement accounted for an in-creased proportion of sales, and there was also significant growth in sales of CEM I 52,5R and CEM IV/A (V) 32,5R SR, which almost doubled in relation to the previous year. A new packaging design was placed on the market for 25 kg bags.The continued focus on exports led to an increase in quantities sold of around 1%, but the increase in turnover was slightly higher, around 2%. This varia-tion was due to an increase of 16% in cement sales which has a higher price than clinker whose sales fell by 23%.

The reduction in turnover in ready--mixed concrete (down by 17.9 million euros) was sharper than the reduction in quantities (31%, compared to 27%). This was due to the erosion of the ave-rage sales price (in mainland Portugal

and Madeira) as a result of an extre-mely adverse environment of cut-throat competition. Despite an increased fo-cus on value-added products, that re-sulted in sales growth, this was insuffi-cient to atenuate the wider decline, as these products still account for only a small proportion of total sales.

Turnover in aggregates recorded a re-duction similar to that in the sales vo-lume. However, the average sales price increased by approximately 4.6% on sales in mainland Portugal. This was not enough to offset the effect on turnover of the reduction in transport services and the lower sales prices in Madeira. This price increase reflected the change in the sales mix and the approach to the market, where efforts have been made to give priority to su-pplying higher-value aggregates.

Sales of mortars were in line with ma-rket trends, with a drop of 28% in the sales volume measured in tons. The ongoing strategy, dating back to 2011, of launching and promoting value-ad-ded products has resulted in a rise of 25% in Secil Argamassas’ average sa-les price. This, combined with growing sales of hydraulic lime, has served to offset the drop in the sales volume.

Turnover in precast concrete was down by 14%, slightly less than the reduction in sales in quantities. This was partially due to the increase in average prices for tiles, in both Portugal and Spain, reflecting the marketing efforts made in this area. The average sales price in this business unit grew by 2.9% in Portugal and 3.3% in Spain

EBITDA from units based in Portugal stood at 20.9 million euros which, com-pared with the figure of 39.3 million eu-ros recorded in 2012, represents a fall of 46.9%.


25

The sales performance in most busi-ness units had a negative impact on EBITDA and is responsible for a sig-nificant part of the reduction in this indicator. As stated above, the Group recorded a significant reduction in CO2 permit sales, with revenues down to 1 million euros in 2013, in contrast to 9.2 million euros in 2012. Without the CO2 effect EBITDA would have fallen by 33.9%. As a result of this manage-ment decision, Secil now has reserves of significant value that can be realize in 2014 if it chooses to sell the surplus CO2.

The financial situation of most clients in the different business units remains challenging, and the problem of uncol-lectable debts has grown. EBITDA for 2013 was brought down by the recor-ding of impairments in receivables and also on inventories, which were written down by 2.8 million euros in relation to 2012. Excluding the negative variation in these items in relation to 2012 and also the effect of CO2 sales, the drop in Portugal’s EBITDA would have been 24.6%, instead of 46.9%.

Growth in cement exports, where mar-gins are lower than on the domestic market, also contributed to the reduc-tion of the EBITDA margin.

Attention should be drawn to the very positive effect of the reduction and control of operating costs, including personnel costs, in all units, due to the restructuring of operations undertaken in 2012 and 2013.

This decrease was caused by the major restructuring of operations in Portugal in 2012, in particular in the cement, ready-mixed concrete and aggregates Units. Restructuring measures were also adopted in 2013, in the pre-cast concrete division and once more in

cement operations. Operational mana-gement has been merged for mainte-nance and production at the Maceira and Pataias cement plants which in-creased operational efficiency.

Personnel costs have been brought down by an impressive 7.7 million euros, clearly illustrating the efforts made by the business units to adapt their structures to the current market situation.

Work continued on cost cutting pro-jects, particularly in cement opera-tions which account for a significant proportion of the Group’s total costs in Portugal. These measures included the programme for pooling resources in in-dustrial maintenance in order to cut the costs of materials, services and stocks. There was also the project to improve energy efficiency aiming to reduce the cost of electrical and thermal energy.

The Group has also increased the use of industrial waste as thermal fuel. Overall, the rate of use of alternative fuels rose from 41% in 2012 to 44% in 2013. Efforts and investment in this area continue to be a priority, in order to obtain a higher substitution rate and consequently an even more significant saving on energy costs.

As a result of these efforts it was pos-sible to atenuate to a large extent the impact of dwindling business on the domestic market. Secil will be able to take advantage of these improvements when the market recovers. Despite the downsizing of the various units and efforts to cut costs made it possible to soften the impact of the fall in turnover, these measures were unable to offset this reduction in full, with the exception of the aggregates and mortars units, where EBITDA recovered in relation to 2012. The implementation of such

measures state that business units in Portugal are well positioned for a mea-ningful recovery as soon as the market starts to upturn.

Investment in tangible fixed assets in Portugal totalled 14.9 million euros and are mainly concentrated in the cement area. Work was completed on projects to increase storage capacity for alter-native fuels (RDF) and to install gas by-passes on the kilns at the Outão and Maceira plants. All these projects were intended to increase the use of alternative fuels and to achieve even more significant savings in energy con-sumption.

The growth in the Portuguese eco-nomy in the final quarter of 2013 is undoubtedly a sign of confidence for 2014. However, being the construction sector in the final position of the in-vestment cycle, construction activity and cement consumption can be ex-pected to remain in decline in 2014, albeit at a more moderate pace than in 2013.

Current projections point to growth of 0.8% in the economy in 2014, after negative growth in 2013 estimated at 1.5% (Bank of Portugal - Winter Eco-nomic Bulletin - January 2014). The latest IMF projections also point to growth of 0.8%.

The Group’s operations in Portugal in 2014 will continue to be influenced by the situation in the construction sector. Despite the prospects for degree cer-tain recovery in 2015, priority will con-tinue to focus in the implementation of measures that enable operational effi-ciency in a wide range of areas (both in industrial operations and at head office). The objective is to be ready to achieve better results as soon as the market recovers.

26

TUNISIA04.

The Tunisian economy continues to feel the effects of the post-revolutio-nary situation, with political and social instability both on the rise. The transi-tion period has dragged on, due to the postponement of the elections. Des-pite this situation, the Tunisian eco-nomy is thought to have grown by 3% in 2013, albeit down from the figure of 3.6% recorded in 2012 (World Econo-mic Outlook, IMF January 2014).

The financial year of 2013 was ma-rked by the worsening of the political crisis and continuing outbreaks of so-cial instability, demonstrations, strikes and general insecurity, which have un-dermined the economy. The tourism and export sectors remain in reces-sion, budgetary and foreign balances have worsened and reforms (most of which are already under way) have been implemented at a much slower

pace than initially forecasted. At the end of April, the IMF granted Tunisia a credit facility (special drawing right). Although the public works sector is in recession the residential and com-mercial construction sector continues to grow.

Despite the unfavourable situation, annual sales of binders grew in 2013 by 2.5%, and consumption rose to a

UNIT 2013 2012 VARIATION Market Cement 1000 t 7,402 7,163 3%Artificial Lime 1000 t 278 331 -16%Total 1000 t 7,680 7,494 2%Clinker Production 1000 t 857 898 -5%Cement Production 1000 t 1,272 1,201 6%Artificial Lime Production 1000 t 54 66 -19%Total 1000 t 1,326 1,267 5%Cement and Clinker Sales* Domestic Market 1000 t 1,236 1,237 0%External Market 1000 t 94 36 160%Total 1000 t 1,330 1,273 4%Ready-Mixed Concrete Sales* 1000 m3 175 176 0%Turnover 1,000 € 67,199 67,086 0%EBITDA 1.000 € 7,477 8,956 -17%EBITDA Margin % 11.1% 13.4% EBIT 1,000 € 1,269 2,820 -55%EBIT Margin % 1.9% 4.2% Capex 1.000 € 7,782 6,892 13%Employees Nº 379 378 0%



27

total of 7.7 million tons. The market in southern Tunisia, where the plant is lo-cated, recorded growth of 3% in con-sumption of binders. Commercial performance in the cement activity improved in relation to 2012. Sales increased by 5%, with the ex-port rising to 94 thousand tons. This represents a significant improvement over 2012, when exports totalled 36 thousand tons despite the restrictions imposed by the Government.

In ready-mixed concrete operations, it was possible to keep the sales volume at the same level as in 2012, despite the reduction in major public and pri-vate construction projects and une-ven growth in the private construction sector.

Turnover remained at a similar level to 2012. However the 7% drop in value of the Tunisian dinar against the euro resulted into a negative impact of ap-proximately 5 million euros. Turnover in cement business grew by 8% in local currency, due to growth in export volu-mes. On the domestic market, turno-ver was unchanged from 2012 with the sales volume holding steady and ce-ment price continued to be submitted to regulation, with no alteration since July 2011.

Turnover in the concrete sector also performed well in local currency, thanks to an increase in the average sales price.

EBITDA generated by Tunisia fell by approximately 17% in comparison to 2012. This was partially due to the de-preciation of the Tunisian dinar against the euro, which had an impact on this indicator of approximately 563 thousand euros. If the currency had been stable, EBITDA would have fallen by only 10%.

This reduction was due to a drop in cement’s EBITDA, caused by a 5% fall in clinker production as a result from the stoppages which took place in two kilns in order to undertake the replacement of the coolers. Clinker had to be purchased and imported so that clients’ need and market position in the market had to be protected. In addition, the depreciation of the cur-rency also had a negative impact on the cost of importing spare parts. In ready-mixed concrete, it was pos-sible to maintain the sales volume in a particularly difficult environment and it also proved possible to increase EBI-TDA by 7% and the EBITDA margin from 10.3% to 11.1%. This resulted from improved margins even though the depreciation of the currency di-minished the impact of this success.Capital expenditure totalled 7.7 million euros. The most important project was undoubtedly the substitution of the coolers in the two kilns which will result in energy gains and increased clinker production capacity.

Although this task was only completed towards the end of the year, the posi-tive effects of this investment were still felt, with the unit increasing its clinker production and achieving better EBI-TDA margins than earlier in the year. A significant improvement in results is expected in 2014.

The Tunisian economy can be expec-ted to grow by 3.7% in 2014, up from the estimated level of 3% in 2013 (World Economic Outlook, IMF, Ja-nuary 2014), despite the uncertainty still persisting with regard to political and social instability.

The prospects for the Tunisian market and consequently for our operations are positive. In the first few days of

2014 the Tunisian government annou-nced the deregulation of cement sales prices and exports.

As a result of this deregulation, sales prices have already been increased once, and it is estimated that further adjustments will occur in 2014. The exports deregulation will make it pos-sible to improve our relationship with foreign clients and to take advantage of the excellent location of the Gabés plant, although we may be confronted with unforeseeable difficulties due to the unstable situation in Libya. The start-up of a new cement plant in late 2013 may also change the sales ou-tlook for cement in the local market.

28

LEBANON05.

According to the latest figures publi-shed by the IMF, the Lebanese eco-nomy is thought to have grown by 1.5% in 2013, in line with the figure for 2012 (World Economic Outlook, IMF, January 2014) but nonetheless falling short of the projections at the start of 2013. The crisis in Syria is having a wide-ranging impact on Lebanon in-cluding on economic growth.

The Middle Eastern region has been going through a period of significant change, involving political transition in several countries, holding out the pro-mise of growth. However, these chan-ges have also created uncertainty, es-

pecially in investment, tourism and the economy in general. Lebanon has the-refore not been immune to the impact of the global slowdown and regional instability, in particular as a result of the current situation in Syria.

Although economic growth had been anticipated, cement consumption was expected to stabilize after the boom years of 2003 to 2011.Demand in the property sector was extremely robust and the public works sector was also lively. The construction industry ex-perienced continued growth and the cement sector presented new record levels of business. In this context, ce-

UNIT 2013 2012 VARIATION Cement Market 1000 t 5,850 5,319 10%Clinker Production 1000 t 923 817 13%Cement Production 1000 t 1,239 1,123 10%Cement and Clinker Sales* Domestic Market 1000 t 1,265 1,184 7%Ready-Mixed Concrete Sales* 1000 m3 153 132 16%Turnover 1,000 € 90,415 88,027 3%EBITDA 1,000 € 31,300 22,522 39%EBITDA Margin % 34.6% 25.6% EBIT 1,000 € 20,778 11,190 86%EBIT Margin % 23.0% 12.7% Capex 1,000 € 9,680 9,558 1%Employees Nº 506 506 0%



29

ment consumption was up on 2012 at a total of 5.9 million tons representing a growth of around 10%.

In this context, Sibline recorded excel-lent performance in cement sales - up by 7% -, with all sales being made on the domestic market.

Ready-mixed concrete business was also driven by the fast pace of demand from the construction sector with a sig-nificant increase in sales. Concrete sa-les in 2013 totalled 153 thousand m3, up by 16% on 2012, representing the largest sales volume in the ready-mixed concrete in Lebanon.

Turnover from operations in Lebanon rose by approximately 3% from 2012, thanks to the increase in cement and concrete sales. This increase of 3% is nonetheless affected by the 3.3% fall in value of the dollar against the euro in 2013, which brought turnover down by around 3 million euros. Turnover from cement grew by around 5% in local currency, thanks to the growing sales volume and an increase, albeit modest, in the average sales price.

Turnover from ready-mixed concrete also performed well. This was due en-tirely to the increase in the sales vo-lume, as the average price dropped by around 1% in local currency (4% in euros), due to tough competition. The concrete business recorded a turnover of 9 million euros, up by 11% on 2012.EBITDA generated by operations in Le-banon stood at 31.3 million euros, ha-ving grown by 39% in relation to 2012.The significant improvement in the EBITDA’s performance is due to a bet-ter performance in sales and in pro-duction in both areas of activity, most particularly in cement.

Cement and clinker production was well up on 2012. Clinker production rose by 13% and that of cement by 10%. In the previous year, results were hit by the additional cost of clinker and cement purchases as a result produc-tion fall. This situation was hampered by lengthy stoppages caused by fre-quent power cuts during the first half of the year and also problems of a te-chnical nature, which have since been resolved.

Special attention should be drawn to the extremely positive production performance at Sibline’s plant. The problems experienced in 2012 were solved. Production on line 2 was sta-bilized and the project for revamping line 1 was completed. Clinker produc-tion for the year stood at 923 thousand tons and cement production at 1 238 thousand tons, the highest levels ever.

The investment in revamping line 1 also made it possible to achieve an impro-vement in thermal energy consump-tion, which came down in relation to 2012, with a positive impact on fuel costs.

Improved production performance was reflected in a significant reduction in power consumption and in a clinker in-corporation rate of 76.7%, the lowest level ever recorded. The improvement in indicators for power and thermal energy consump-tion and the reduction in the clinker incorporation rate made it possible to bring down production costs. There-fore EBITDA margin increased on ce-ment from 26.6% in 2012 to 36.1% in 2013.

The EBITDA’s performance in ready--mixed concrete, which stood at 765 thousand euros (up by 70% on 2012)

reflected an increase of 16% in the sales volume, as well as gains achieved by cutting production costs. Despite the deterioration of the average sales price by around 4%, the reduction in variable production costs offset this effect, the-reby increasing the unit gross margin.

Capital expenditure in 2013 totalled 9.7 million euros, with the main achieve-ment being the completion of the pro-ject to improve and revamp the produc-tion line of kiln 1.

In Lebanon, the economic performance is forecasted to be similar to that in 2013, with growth in the order of 1.5%, according to the latest outlook from the IMF. The Miwddle Eastern region will continue to be affected by signi-ficant change and political and social upheavals, which have undermined the stability of the economy. Although ex-pectations point to continued growth in Lebanon, this has fallen short of the country’s potential.

Cement consumption is expected to stabilize in 2014, and estimates suggest a slight fall in demand. Even so the prospects for our operations are fairly positive. The improvements achieved in cement production will allow us to record better results in 2014. Clinker ou-tput can be expected to increase along with the productivity of the cement mills, which will lead to increased gains on production costs. These will be favoura-bly influenced by an improvement in the raw material mix and the use of thermal fuels. The ready-mixed market has shown great vitality and considering the con-tracts adjudicated, growth in concrete sales can be anticipated for 2014. The production and sale of concrete blocks is due to start up along with the marke-ting of mortars.

30

ANGOLA06.

The Angolan economy is still growing and the latest figures released by the IMF point to growth in gross domestic product of 5.6% in 2013, up from 5.2% in 2012 (World Economic Outlook, IMF, January 2014). These prospects for growth are based on forecasts of stronger growth in the oil & gas sec-tor, increased consumer spending and implementation of a public programme for infrastructure which is expected to boost business in the construction in-dustry and other sectors.

The construction industry once again presented a tendency for growth, sup-ported by government plans for large scale projects for housing and road improvements, bridges, silos and the

rail system. In line with this trend the cement market in Angola totalled 5.5 million tons.

As a result of one manufacturer dou-bling its capacity and of another (which started up in the fourth quarter of 2013) consolidating its production process, the total production capacity of Ango-lan manufacturers rose from 4.5 million to 7.5 million tons.

This was the competitive context in which the sales volume recorded by Secil Lobito fell by 5.5% in relation to the previous year. Competition on the domestic market has been further hei-ghtened by imports of cement at extre-mely low prices.

UNIT 2013 2012 VARIATION Cement Market 1000 t 5,500 5,000 10%Cement Production 1000 t 181 186 -3%Cement Sales 180 191 -6%Turnover 1,000 € 23,870 28,531 -16%EBITDA 1,000 € 241 2,601 -91%EBITDA Margin % 1% 9% EBIT 1,000 € -2,754 534 -616%EBIT Margin % n.a. 1.9% Capex 1,000 € 1,931 1,302 48%Employees Nº 253 270 -17


31

Cement production capacity in An-gola is currently higher than market demand. This fact, combined with the pressure of low prices cement imports, led to a significant drop in sales prices, which are estimated to have fallen by 12% in 2013.

As a result, our turnover was down by 16.3% in 2012 due essentially to the fall in sales prices.

The impact on EBITDA was significant Given the deterioration in sales volume and the average sales price causing it to fall back in 2013.

Significant efforts were made by ope-rational units to respond to this diffi-cult environment. A series of projects were undertaken in order to cut down production costs. Capital expenditure for the year totalled 1.8 million euros, and part of this investment will allow to bring down variable production costs by around 15% in 2014. The person-nel policy was also geared to cutting costs. At year-end 2013 the workforce numbered 249 employees, represen-ting a reduction of 6% in relation to December 2012.

Prospects for 2014 in Angola are pro-mising. According to the IMF, the An-golan economy is set to grow by 6.3%. The tenders for a number of structural projects by the Angolan government, including dams, roads and airports, points to strong growth in the cement market in 2014. As a result of the ca-pital projects undertaken in 2013 a substantial reduction in production costs will take place and make Secil Lobito more competitive. Prospects are good for an increase in the sales volume as well as a substantial impro-vement in customer services, thanks to implementation of investment projects in the packaging area.

32

CAPE VERDE

07.

Cape Verde’s economy is thought to have grown by 1.5%, in 2013, down from the 2.5% growth recorded in 2012 (World Economic Outlook, IMF January 2014). Cape Verde has a small but open economy, highly dependent on foreign capital, meaning that deve-lopment remains largely tied to inter-national trends. The growth recorded in 2013 was once again supported by the tourism sector.

The construction market was faced with severe contraction in 2013 and tough competition, whilst the interna-tional economic situation, particularly in Europe, limited private investment in Cape Verde. This situation affec-

ted mainly holiday properties where a large number of projects were halted or postponed. Public investment in infras-tructure was not enough to avoid sharp contraction of the construction market.

In line with this scenario, estimates point to a reduction of around 15% in the cement market, with consumption standing at approximately 200 thou-sand tons. Secil Cabo Verde conti-nued to pursue a dynamic marketing policy based on a close relationship with customers. Despite the adverse market situation the company’s sales outperformed the market, with a sales volume of 47 thousand tons, down by 7% on 2012.

UNIT 2013 2012 VARIATION Cement Sales* 1000 t 47 51 -7%Aggregates Sales* 1000 m3 56 77 -27%Pre-cast Concrete Sales* 1000 t 0.7 1.1 -39%Turnover 1,000 € 5,425 5,846 -7%EBITDA 1,000 € 184 66 180%EBITDA Margin % 3.4% 1.1% EBIT 1,000 € 111 -10 -1207%EBIT Margin % 2.0% -0.2% Capex 1,000 € 58 67 -14%Employees Nº 36 34 6%



33

In addition to the drop in cement sales, business in aggregates suffered a more severe reduction. Estimates suggest that the aggregates market on the island of Santiago experienced a slowdown in relation to the previous year which, in combination with the start-up of a new competitor, caused sales to drop by 27%.

Despite the reduction in sales volumes in both business areas and an environ-ment of severe crisis, sales prices for cement rose by around 5%, softening the impact of the drop in quantities sold.

Efforts made to keep business sustai-nable, in particular by cutting costs,

meant that the variable production cost for aggregates was significantly lowered, offsetting the slump in bu-siness.

As a result, EBITDA improved consi-derably in 2013, standing at 184 thou-sand euros, and the EBITDA margin rose to 3.4%.

The prospects for Cape Verde’s eco-nomy are for growth in 2014. Accor-ding to the latest IMF projections, the economy should grow by 4.4%, once again on the strength of the tourism industry. The scenario for the next few years is for restrictive budgetary and monetary policies, and a conse-

quent reduction in public investment. The funds available will only be used to finance the public deficit, diverting credit away from the private sector.

It is estimated that the cement market will contract again in 2014 leading to a further increase in competition, in both cement and aggregates.

34

OUTLOOK08.

In Portugal the economic environment in 2014 is forecasted to be more favou-rable than in recent years. The latest projections from the Bank of Portugal depict a gradual recovery in domestic demand and moderate growth in the economy over 2014 and 2015.

As stated above, the latest projections from the IMF and the Bank of Portu-gal point out to growth of 0.8% in the Portuguese economy. The construc-tion sector is expected to suffer further contraction in 2014, although the de-terioration will be less severe than that observed in recent years.

The Group’s operations in Portugal will continue in 2014 to be influenced by the situation in the construction sector. Despite the prospects for a degree of recovery in 2015, priority will continue to be assigned to implementing mea-sures to improve operational efficiency in a wide range of areas (both in indus-trial operations and at head office), so as to be ready to achieve better results when the market recovers.

In Tunisia, the economy is expected to grow by 3.7%, accordingly to the IMF’s latest estimates, despite the un-certainty deriving from the continued possibility of political and social insta-bility. In line with expectations for the economy as a whole, the construction and cement sector is also expected to record stronger growth than in 2013.

The prospects for the Tunisian market are positive thanks to the deregulation of prices which finally took place in early 2014. Sales prices have already been increased once and it is concei-vable that further adjustments will take place during 2014.

In Lebanon, economic performance in 2014 is forecast to be similar to that in 2013, with growth in the order of 1.5%, according to the latest forecasts from

the IMF. Recent changes in the Middle East region have not made it easy to maintain economic stability, influencing the growth forecast for Lebanon, which is well below the country’s potential. The cement market is expected to sta-bilize, after the boom years of 2003 to 2011.

Prospects for 2014 in Angola are pro-mising. According to the IMF, the An-golan economy can be expected to grow by 6.3% in 2014, up from the fi-gure of 5.6% estimated for 2013. This scenario offers the prospect of strong growth in the Angolan cement market. Secil’s operations should be positively affected by the impact of capital ex-penditure projects in 2013, which have cut production costs and point to an improvement in results.

It is anticipated that the overall perfor-mance of the Secil Group in 2014 will be positive, and significantly better in relation to 2013.


35

Secil – Companhia Geral de Cal e Ci-mento, S.A. recorded a net loss for the period of 34 897 448.00 euros. The Board of Directors proposes that this loss be transferred to the retained ear-nings account.

The Board of Directors, Outão 3 April 2014

CHAIRMAN

Pedro Mendonça de Queiroz Pereira

DIRECTORS

Gonçalo de Castro Salazar LeiteFrancisco José Melo e Castro GuedesCarlos Alberto Medeiros AbreuSérgio António Alves MartinsJoão Luís Barbosa Pereira de Vasconcelos José Miguel Pereira Gens ParedesPaulo Miguel Garcês Ventura

PROPOSED ALLOCATION OF PROFITS

09.

36 CONSOLIDATED FINANCIAL STATEMENTS | DIRECTORS’ REPORT 2013

37

1. Consolidated Balance Sheet 2. Consolidated Income Statement 3. Statement of Changes in Consolidated Shareholders’ Equity4. Statement of Consolidated Cash Flows

CONSOLIDATED FINANCIALSTATEMENTS

38

CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2013 AND 2012Amounts in Euro NOTE 31/12/13 31/12/12

ASSETS Non-current assets Property, plant and equipment 11 365,303,840 397,109,394Investment property 13 1,289,715 1,467,045Goodwill 10 114,966.625 132,211,694Intangible assets 14 3,877.689 1,643,793Financial investments - equity method 15 33,408,378 5,016,542Financial investments - other methods 15 - 24,413,353Other receivables 19 2,407,210 2,639,982Deferred tax assets 16 11,827,066 13,496,066Other financial assets 17 3,650,427 1,678,153 536,730,950 579,676,022Current assets Inventories 18 91,765,301 98,725,715Trade receivables 19 48,447,939 55,679,493Advances to suppliers 25 2,062,119 1,978,167State and other public entities 26 8,414,033 13,018,771Other receivables 19 13,975,118 80,038,893Deferred assets 27 804,662 879,418Non-current assets held for sale 20 1,174,069 4,000,614Cash and cash equivalents 19 124,323,147 72,731,764 290,966,388 327,052,835 Total assets 827,697,338 906,728,857 EQUITY AND LIABILITIES Capital and reserves attributable to the company’s equity holders Paid-up capital 21 264,600,000 264,600,000Treasury shares 21 (22,609,745) (22,609,745)Legal reserves 21 40,680,725 40,680,725Other reserves 21 94,623,691 94,623,691Retained earnings (7,952,383) 30,299,150Revaluation reserve 21 14,242,547 14,450,157Other changes in capital and reserves attributable to the company’s equity holders 21 (99,653,339) (77,523,969) 283,931,496 344,520,009Consolidated net income for the year (34,897,448) (38,459,143) 249,034,048 306,060,866Minority interests 6 66,192,420 65,678,572Total equity 315,226,468 371,739,438 LIABILITIES Non-current liabilities Provisions 22 21,294,223 18,878,416Related parties 37 585,000 505,000Interest-bearing loans and borrowings 24 282,920,857 324,097,871Post-employment benefit liabilities 23 2,566,329 2,813,668Deferred tax liabilities 16 34,513,322 38,343,238Other financial liabilities 39 4,262,775 5,795,506 346,142,506 390,433,699Current liabilities Trade payables 24 42,321,474 35,728,624Advances from customers 25 2,534,888 2,030,936State and other public entities 26 16,971,737 36,850,426Related parties 37 1,655,133 2,100,022Interest-bearing loans and borrowings 24 71,364,558 35,354,394Other accounts payable 24 31,000,729 30,946,151Liabilities directly associated with non-current assets held for sale 20 100,265 1,234,141Deferred liabilities 27 379,580 311,026 166,328,364 144,555,720Total liabilities 512,470,870 534,989,419Total equity and liabilities 827,697,338 906,728,857

CONSOLIDATED BALANCE SHEET01.

CONSOLIDATED FINANCIAL STATEMENTS | DIRECTORS’ REPORT 2013

39

CONSOLIDATED INCOME STATEMENT

02.

CONSOLIDATED INCOME STATEMENT FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012 Amounts in Euro NOTE 31/12/13 31/12/12 Revenue 28 411,525,441 450,232,612Appropriated earnings of associates and joint controlled entities 29 (2,214,487) (5,184)Change in production inventories 1,450,246 (3,715,749)Own work capitalised 166,060 504,862Cost of sales and materials consumed (130,724,451) (142,150,129)External supplies and services 30 (158,008,105) (170,617,271)Personnel costs 31 (65,927,987) (75,005,684)Impairment of inventories ((losses)/ reversals) 18 (1,716,701) (496,026)Impairment of accounts receivable ((losses)/ reversals) 19 (634,228) 1,210,542Impairment of non depreciable/amortisable investments ((losses)/ reversals) 10 (13,620,281) (6,702,954)Provisions ((increases)/ decreases) 22 (3,752,209) (3,307,606)Other income and gains 32 22,613,082 39,129,188Other costs and losses 33 (9,867,647) (21,157,267)Profit before depreciation, net finance costs and taxes 49,288,733 67,919,334Depreciation/amortisation costs/reversals 34 (58,436,262) (69,225,174)Impairment of depreciable/amortisable assets ((losses)/ reversals) 34 206,338 (15,814,419)Operating profit (before net finance costs and taxes) (8,941,191) (17,120,259)Interest and similar income 35 5,159,598 5,399,286Interest and similar expense 35 (26,863,903) (18,143,885)Profit before taxation (30,645,496) (29,864,858)Corporate income tax 16 1,508,953 (3,896,666)Consolidated net income for the year (29,136,543) (33,761,524) Consolidated net income attributable to: Company’s equity holders 36 (34,897,448) (38,459,143)Minority interests 6 5,760,905 4,697,619 (29,136,543) (33,761,524) Basic earning per share (0.72) (0.79)

40

EQUITY ATTRIBUTABLE TO HOLDERS OF THE PARENT COMPANY’S EQUITY OTHER CHANGES IN PAID-UP TREASURY LEGAL OTHER REVALUATION SHAREHOLDERS’ NET TOTAL MINORITY CAPITAL SHARES RESERVES RESERVES RETAINED SURPLUSES EQUITY INCOME FOR THE SHAREHOLDERS’ INTERESTS TOTAL Amounts in Euro NOTES (NOTE 21.1) (NOTE 21.1) (NOTE 21.2) (NOTE 21.3) EARNINGS (NOTE 21.4) (NOTE 21.5) YEAR EQUITY (NOTE 6.2) EQUITY Position at beginning of 2013 264,600,000 (22,609,745) 40,680,725 94,623,691 30,299,150 14,450,157 (77,523,969) (38,459,143) 306,060,866 65,678,572 371,739,438Changes in the period: Revaluation surplus of tangible fixed assets Realisation of revaluation surplus 21.4 - - - - 239,182 (239,182) - - - - - Deferred tax 16.2 - - - - (31,572) 31,572 - - - - - Financial statement translation differences 21.5.1 - - - - - - (24,100,907) - (24,100,907) (2,902,672) (27,003,579) Fair value reserve of hedging derivatives Movement in fair value reserve of hedging derivatives in the period 21.5.4 - - - - - - 1,532,731 - 1,532,731 - 1,532,731 Deferred tax 16.2 - - - - - - (424,313) - (424,313) - (424,313) Actuarial variances and changes in assumptions Movement in actuarial variances and assumptions 21.5.2 - - - - - - (1,009,091) - 1,009,091) (10,822) (1,019,913) Deferred tax 16.2 - - - - - - 298,685 - 298,685 573 299,258 Government grants Investment grants 21.5.3 - - - - - - (146,437) - 146,437) 21,250 (125,187) Emissions rights grants 21.5.3 - - - - - - 2,283,263 2,283,263 - 2,283,263 Deferred tax 16.2 - - - - - - (563,301) - (563,301) 4,005) (567,306) Effect of acquisition / disposal of investee companies - - - - - - - - - 1,500 1,500 Other changes recognised in shareholders’ equity Transfer of net income for 2012 to reserves 21.6 - - - - (38,459,143) - - 38,459,143 - - - - - - - 38,251,533) (207,610) (22,129,370) 38,459,143 (22,129,370) (2,894,176) (25,023,546)Net income for the year (34,897,448) (34,897,448) 5,760,905 (29,136,543)Total income (57,026,818) 2,866,729 (54,160,089)Operations with shareholders in the year Distribution of net income for 2012 21.6 - - - - - - - - - (2,352,881) (2,352,881) - - - - - - - - - (2,352,881) (2,352,881)Position at the end of 2013 264,600,000 (22,609,745) 40,680,725 94,623,691 (7,952,383) 14,242,547 (99,653,339) (34,897,448) 249,034,048 66,192,420 315,226,468

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

03.

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY FROM 1 JANUARY 2013 TO 31 DECEMBER 2013


41

EQUITY ATTRIBUTABLE TO HOLDERS OF THE PARENT COMPANY’S EQUITY OTHER CHANGES IN PAID-UP TREASURY LEGAL OTHER REVALUATION SHAREHOLDERS’ NET TOTAL MINORITY CAPITAL SHARES RESERVES RESERVES RETAINED SURPLUSES EQUITY INCOME FOR THE SHAREHOLDERS’ INTERESTS TOTAL Amounts in Euro NOTES (NOTE 21.1) (NOTE 21.1) (NOTE 21.2) (NOTE 21.3) EARNINGS (NOTE 21.4) (NOTE 21.5) YEAR EQUITY (NOTE 6.2) EQUITY Position at beginning of 2013 264,600,000 (22,609,745) 40,680,725 94,623,691 30,299,150 14,450,157 (77,523,969) (38,459,143) 306,060,866 65,678,572 371,739,438Changes in the period: Revaluation surplus of tangible fixed assets Realisation of revaluation surplus 21.4 - - - - 239,182 (239,182) - - - - - Deferred tax 16.2 - - - - (31,572) 31,572 - - - - - Financial statement translation differences 21.5.1 - - - - - - (24,100,907) - (24,100,907) (2,902,672) (27,003,579) Fair value reserve of hedging derivatives Movement in fair value reserve of hedging derivatives in the period 21.5.4 - - - - - - 1,532,731 - 1,532,731 - 1,532,731 Deferred tax 16.2 - - - - - - (424,313) - (424,313) - (424,313) Actuarial variances and changes in assumptions Movement in actuarial variances and assumptions 21.5.2 - - - - - - (1,009,091) - 1,009,091) (10,822) (1,019,913) Deferred tax 16.2 - - - - - - 298,685 - 298,685 573 299,258 Government grants Investment grants 21.5.3 - - - - - - (146,437) - 146,437) 21,250 (125,187) Emissions rights grants 21.5.3 - - - - - - 2,283,263 2,283,263 - 2,283,263 Deferred tax 16.2 - - - - - - (563,301) - (563,301) 4,005) (567,306) Effect of acquisition / disposal of investee companies - - - - - - - - - 1,500 1,500 Other changes recognised in shareholders’ equity Transfer of net income for 2012 to reserves 21.6 - - - - (38,459,143) - - 38,459,143 - - - - - - - 38,251,533) (207,610) (22,129,370) 38,459,143 (22,129,370) (2,894,176) (25,023,546)Net income for the year (34,897,448) (34,897,448) 5,760,905 (29,136,543)Total income (57,026,818) 2,866,729 (54,160,089)Operations with shareholders in the year Distribution of net income for 2012 21.6 - - - - - - - - - (2,352,881) (2,352,881) - - - - - - - - - (2,352,881) (2,352,881)Position at the end of 2013 264,600,000 (22,609,745) 40,680,725 94,623,691 (7,952,383) 14,242,547 (99,653,339) (34,897,448) 249,034,048 66,192,420 315,226,468

42

EQUITY ATTRIBUTABLE TO HOLDERS OF THE PARENT COMPANY’S EQUITY OTHER CHANGES IN PAID-UP TREASURY LEGAL OTHER REVALUATION SHAREHOLDERS’ NET TOTAL MINORITY CAPITAL SHARES RESERVES RESERVES RETAINED SURPLUSES EQUITY INCOME FOR THE SHAREHOLDERS’ INTERESTS TOTAL Amounts in Euro NOTES (NOTE 21.1) (NOTE 21.1) (NOTE 21.2) (NOTE 21.3) EARNINGS (NOTE 21.4) (NOTE 21.5) YEAR EQUITY (NOTE 6.2) EQUITY

Position at beginning of 2012 264,600,000 (22,609,745) 39,533,989 129,368,944 30,090,412 14,658,895 (70,295,380) 22,934,710 408,281,825 67,816,941 476,098,766Changes in the period: Revaluation surplus of tangible fixed assets Realisation of revaluation surplus 21.4 - - - - - 240,482 (240,482) - - - - Deferred tax 16.2 - - - - - (31,744) 31,744 - - - - Financial statement translation differences 21.5.4 - - - - - - (8,325,786) - (8,325,786) (1,654,990) (9,980,776) Fair value reserve of hedging derivatives Movement in fair value reserve of hedging derivatives in the period 39 - - - - 2,978,353) - 2,978,353) - (2,978,353) Deferred tax 16.2 - - - - 867,989 - 867,989 - 867,989 Actuarial variances and changes in assumptions Movement in actuarial variances and assumptions 21.5.2 - - - - 4,817,630 - 4,817,630 24,001 4,841,631 Deferred tax 16.2 - - - - (1,446,642) - (1,446,642) (5,925) (1,452,567) Government grants Investment grants 21.5.3 - - - - - - (922,687) - (922,687) (41,772) (964,459) Emissions rights grants 21.5.3 - - - - - - 678,611 - 678,611 2,224 680,835 Deferred tax 16.2 - - - - - - 80,649 - 80,649 10,134 90,783 Effect of acquisition / disposal of investee companies - - - - - - - - - 289,904 289,904 Other changes recognised in shareholders’ equity Transfer of net income for 2011 to reserves 21.6 - - 1,146,736 21,787,974 - - - (22,934,710) - - - - - 1,146,736 21,787,974 208,738 (208,738) (7,228,589) (22,934,710) (7,228,589) (1,376,424) (8,605,013)Net income for the year (38,459,143) (38,459,143) 4,697,619 (33,761,524)Total income (45,687,732) 3,321,195 (42,366,537)Operations with shareholders in the year

Reimbursement of supplementary capital in subsidiaries - - - - - - - - - (44,892) (44,892) Distribution of net income for 2011 21.6 - - - - - - - - (5,414,672) (5,414,672) Distribution of reserves 21.3 - - - (56,533,227) - - - - (56,533,227) - (56,533,227) - - - (56,533,227) - - - - (56,533,227) (5,459,564) (61,992,791)Position at the end of 2012 264,600,000 (22,609,745) 40,680,725 94,623,691 30,299,150 14,450,157 (77,523,969) (38,459,143) 306,060,866 65,678,572 371,739,438

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY

03.

STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY FROM 1 JANUARY 2012 TO 31 DECEMBER 2012


43

EQUITY ATTRIBUTABLE TO HOLDERS OF THE PARENT COMPANY’S EQUITY OTHER CHANGES IN PAID-UP TREASURY LEGAL OTHER REVALUATION SHAREHOLDERS’ NET TOTAL MINORITY CAPITAL SHARES RESERVES RESERVES RETAINED SURPLUSES EQUITY INCOME FOR THE SHAREHOLDERS’ INTERESTS TOTAL Amounts in Euro NOTES (NOTE 21.1) (NOTE 21.1) (NOTE 21.2) (NOTE 21.3) EARNINGS (NOTE 21.4) (NOTE 21.5) YEAR EQUITY (NOTE 6.2) EQUITY

Position at beginning of 2012 264,600,000 (22,609,745) 39,533,989 129,368,944 30,090,412 14,658,895 (70,295,380) 22,934,710 408,281,825 67,816,941 476,098,766Changes in the period: Revaluation surplus of tangible fixed assets Realisation of revaluation surplus 21.4 - - - - - 240,482 (240,482) - - - - Deferred tax 16.2 - - - - - (31,744) 31,744 - - - - Financial statement translation differences 21.5.4 - - - - - - (8,325,786) - (8,325,786) (1,654,990) (9,980,776) Fair value reserve of hedging derivatives Movement in fair value reserve of hedging derivatives in the period 39 - - - - 2,978,353) - 2,978,353) - (2,978,353) Deferred tax 16.2 - - - - 867,989 - 867,989 - 867,989 Actuarial variances and changes in assumptions Movement in actuarial variances and assumptions 21.5.2 - - - - 4,817,630 - 4,817,630 24,001 4,841,631 Deferred tax 16.2 - - - - (1,446,642) - (1,446,642) (5,925) (1,452,567) Government grants Investment grants 21.5.3 - - - - - - (922,687) - (922,687) (41,772) (964,459) Emissions rights grants 21.5.3 - - - - - - 678,611 - 678,611 2,224 680,835 Deferred tax 16.2 - - - - - - 80,649 - 80,649 10,134 90,783 Effect of acquisition / disposal of investee companies - - - - - - - - - 289,904 289,904 Other changes recognised in shareholders’ equity Transfer of net income for 2011 to reserves 21.6 - - 1,146,736 21,787,974 - - - (22,934,710) - - - - - 1,146,736 21,787,974 208,738 (208,738) (7,228,589) (22,934,710) (7,228,589) (1,376,424) (8,605,013)Net income for the year (38,459,143) (38,459,143) 4,697,619 (33,761,524)Total income (45,687,732) 3,321,195 (42,366,537)Operations with shareholders in the year

Reimbursement of supplementary capital in subsidiaries - - - - - - - - - (44,892) (44,892) Distribution of net income for 2011 21.6 - - - - - - - - (5,414,672) (5,414,672) Distribution of reserves 21.3 - - - (56,533,227) - - - - (56,533,227) - (56,533,227) - - - (56,533,227) - - - - (56,533,227) (5,459,564) (61,992,791)Position at the end of 2012 264,600,000 (22,609,745) 40,680,725 94,623,691 30,299,150 14,450,157 (77,523,969) (38,459,143) 306,060,866 65,678,572 371,739,438

44

STATEMENT OF CONSOLIDATED CASH FLOWS

04.

STATEMENT OF CONSOLIDATED CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012Amounts in Euro NOTES 31/12/13 31/12/12 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 470,886,104 521,942,951 Payments to suppliers (334,123,790) (378,842,695) Payments to personnel (45,732,747) (55,118,085) Cash flows from operations 91,029,567 87,982,171 Corporate income tax (payments)/receipts 37,920 6,078,704 Other (payments)/receipts (36,716,079) (30,742,416) Net cash inflow from operating activities (1) 54,351,408 63,318,459INVESTING ACTIVITIES Payments relating to: Tangible fixed assets (29,457,983) (38,673,090) Intangible assets - (25,765) Financial investments (17,602,279) (25,284,652) Other assets - (125,840,701) (47,060,262) (189,824,208) Receipts derived from: Tangible fixed assets 400,448 1,371,645 Interest and similar income 3,358,789 543,256 Dividends 713,506 878,599 Other assets 70,143,004 126,463 74,615,747 2,919,963 Net cash outflow from investing activities (2) 27,555,485 (186,904,245)FINANCING ACTIVITIES Receipts derived from: Loans raised 564,313,583 1,589,771,952 Share capital increased 1,500 - Other 80,000 - 564,395,083 1,589,771,952 Payments relating to: Loans raised (566,734,207) (1,429,201,504) Repayments under finance leases (553,494) (633,837) Interest and similar expense (25,064,676) (17,066,996) Dividends (2,228,211) (4,929,302) Reductions in capital and other equity instruments - (44,892) (594,580,588) (1,451,876,531) Net cash outflow from financing activities (3) (30,185,505) 137,895,421CHANGE IN CASH AND CASH EQUIVALENTS (1)+(2)+(3) 51,721,388 14,309,635CURRENCY TRANSLATION ADJUSTMENTS (3,364,682) (1,037,523)CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 61,802,586 46,648,661NON-CURRENT ASSETS HELD FOR SALE - 1,881,813CASH AND CASH EQUIVALENTS AT END OF THE YEAR 4 110,159,292 61,802,586



TO THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

INDEX

1. INTRODUCTORY NOTE 48

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS 48

3. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES 483.1 Basis of preparation 483.2 Basis of consolidation 483.2.1 Consolidation principles 483.2.2 Interests in joint controlled entities 493.2.3 Interests in associates 493.2.4 Others investments 503.2.5 Business combinations 503.2.6 Goodwill 513.2.7 Foreign financial statement translation 513.3 Segment reporting 523.4 Property, plant and equipment 523.5 Leases 533.6 Investment property 533.7 Intangible assets 533.8 Impairment of tangible and intangible fixed assets excluding goodwill 543.9 Income tax 553.10 Inventories 553.11 Financial assets and financial liabilities 55

3.11.1 Impairment of financial assets 573.11.2 Derecognition of financial assets and financial liabilities 573.12 Non-current assets held for sale and discontinued operations 573.13 Government grants 583.14 Foreign currency conversion 583.15 Provisions 583.16 Post employment benefits 593.15.1 Defined contribution plans 593.15.2 Defined benefit plans 593.17 Other long-term employee benefits 603.18 Short-term employee benefits 603.19 Revenue recognition 603.20 Borrowing costs 603.21 Derivative financial instruments and hedge accounting 613.22 Risk management 623.21.1 Financial risk 623.21.2 Operational risk 623.23 Share capital and treasury shares 633.24 Dividends 633.25 Critical value judgments and principal sources of uncertainty associated with estimates 63

3.26 Post-balance sheet events 65

4. CASH FLOWS 65

5. SEGMENT REPORTING AND REVENUE BY GEOGRAPHIC DESTINATION 605.1 Segment reporting 605.2 Revenue by segment 70

6. INVESTMENTS IN SUBSIDIARIES 726.1 Subsidiaries 726.2 Minority interests 74

7. INTERESTS IN JOINT CONTROLLED ENTITIES 76

8. INTERESTS IN ASSOCIATES AND OTHER FINANCIAL INVESTMENTS 76

9. CHANGES TO THE CONSOLIDATION SCOPE 80

10. GOODWILL 81

11. PROPERTY, PLANT AND EQUIPMENT 82

12. LEASES 8412.1 Finance leases 8412.2 Operating leases 86

47

13. INVESTMENT PROPERTY 86

14. INTANGIBLE ASSETS 88

15. FINANCIAL INVESTMENTS 92

16. CORPORATE INCOME TAX 9416.1 Current tax 9416.2 Deferred tax 96

17. OTHER FINANCIAL ASSETS 102

18. INVENTORIES 104

19. FINANCIAL ASSETS 10619.1 Categories of financial assets 10619.2 Financial assets – trade receivables 10619.3 Financial assets – otherreceivables 10819.4 Impairment of accounts receivable 110

20. NON-CURRENT ASSETS HELD FOR SALE 112

21. CAPITAL AND RESERVES ATTRIBUTABLE TO THE COMPANY’S EQUITY HOLDERS 114

21.1 Paid-up capital and treasury shares 11421.2 Legal reserves 11521.3 Other reserves 11621.4 Revaluation reserve 11721.5 Other changes in capital and reserves attributable to the Company’s equity holders 11721.5.1 Foreign currency translation reserves 11821.5.2 Changes to actuarial assumptions 12021.5.3 Government grants 12021.5.4 Fair value reserve for hedging derivatives 12221.6 Appropriation of previous period’s net income 122

22. PROVISIONS 123

23. EMPLOYEE BENEFITS 12423.1 Post-employment benefits – defined contribution plans 12823.2 Post-employment benefits – defined benefit plans 12823.2.1 Description of definedbenefit plans 13223.2.2 Liabilities and current period movements 13323.3 Long-term benefits 140

24. FINANCIAL LIABILITIES 14224.1 Categories of financial liabilities 14224.2 Financial liabilities – trade payables 14224.3 Financial liabilities – interest-bearing loans and borrowings 14224.4 Financial liabilities – other accounts payable 145

25. ADVANCES FROM CUSTOMERS AND TO SUPPLIERS 145

26. STATE AND OTHER PUBLIC ENTITIES 146

27. DEFERRED LIABILITIES 147

28. REVENUE 148

29. APPROPRIATED EARNINGS OF ASSOCIATES 148

30. EXTERNAL SUPPLIES AND SERVICES 149

31. PERSONNEL COSTS 149

32. OTHER INCOME AND GAINS 150

33. OTHER COSTS AND LOSSES 151

34. DEPRECIATION AND AMORTISATION COSTS/ REVERSALS 152

35. FINANCE COST (NET) 152

36. EARNINGS PER SHARE 153

37. RELATED PARTIES 154

38. FINANCIAL RISKS 15838.1 Foreign currency risk 15838.2 Interest rate risk 16038.3 Credit risk 16438.4 Liquidity risk 168

39. FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS 170

40. ENVIRONMENTAL EXPENDITURE 174

41. AUDITORS’ REMUNERATION 176

42. COMMITMENTS 17742.1 Guarantees and other financial commitments 17742.2 Other commitments 178

43. POST-BALANCE SHEET EVENTS 179


TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES

FOR THE YEAR ENDED 31 DECEMBER 2013

(In these notes, unless indicated otherwise, all amounts are expressed in euro.).

_1. INTRODUCTORY NOTE

The SECIL Group (the Group) compri-ses Secil – Companhia Geral de Cal e Cement, S.A. (Secil) and its subsi-diaries. Secil was incorporated on 27 June 1918 and has as its main bu-siness object the manufacture and sale of cement produced at its plant in Outão, Setúbal, and distributed by various commercial depots throughout the country.

HEAD OFFICE: Outão, SetúbalSHARE CAPITAL: Euro 264,600,000CORPORATE BODY NO.: 500 243 590

Secil heads a diversified group with business interests in Portugal, Tunisia, Spain, Angola, France, Lebanon and Cape Verde, focused on: (i) cement production at factories located in Ma-ceira, Pataias, Gabès (Tunisia), Lobito (Angola) and Beirut (Lebanon), (ii) the production and sale of readymixed

concrete in Portugal, Tunisia and Le-banon and (iii) the production of aggre-gates and the operation of quarries in Portugal and Cape Verde.

These consolidated financial state-ments were approved by the Board of Directors at the meeting of 3th April 2014.

Pursuant to prevailing legislation in Portugal, these financial statements are subject to approval by the Sharehol-ders’ General Meeting. The Board of Directors is of the opinion that these consolidated financial statements pre-sent a true and fair view of the financial position and results of the Company and its subsidiaries, as well as its con-solidated financial position, financial performance and consolidated cash flows.

_2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The accompanying consolidated fi-nancial statements have been prepa-red in accordance with requirements prevailing in Portugal, as set out in Decree-Law 158/2009 of 13 July and in conformity with the conceptual fra-mework, accounting and financial re-porting standards and interpretative rules applicable for the year ended 31 December 2013.

_3. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

The principal accounting policies ap-plied in the preparation of these con-solidated financial statements are des-cribed below.

_3.1 BASIS OF PREPARATION

The accompanying financial state-ments are prepared on the going con-cern basis from the accounting books and records of the companies included in the consolidation (Notes 6 and 7), kept in accordance with local accoun-ting principles generally accepted of the subsidiaries, and adjusted so that the consolidated financial statements are in accordance with Accounting and Financial Reporting Standards (NCRF).

_3.2 BASIS OF CONSOLIDATION

_3.2.1 CONSOLIDATION PRINCIPLES

The consolidated financial statements include the financial statements of the Parent Company (“Company”) and all its controlled subsidiaries. Control is deemed to exist when the Company has the power, directly or indirectly, to govern the entity’s financial and opera-ting policies so as to obtain economic benefits from its activities: this is nor-mally associated with control, direct or indirect, of more than half of the voting rights. The existence and effect of po-tential voting rights that are currently exercisable or convertible are consi-dered in determining the existence of the control that the Company has over an entity.

The subsidiaries are included in the consolidated financial statements using the full consolidation method from the date on which the Company assumes control over the financial and

49

operating decisions and cease to be consolidated from the date on which control ceases.

The accounting policies of the subsi-diaries were adapted whenever neces-sary so as to ensure consistency with the policies adopted by the Group.

Intra-group transactions and balances, any unrealised gains arising from tran-sactions and dividends distributed be-tween group companies are eliminated in preparing the consolidated financial statements. Unrealised losses are eli-minated in the same manner, but only to the extent that there is no evidence of impairment of a transferred asset.

Third-party investments in companies’ equity and net income or loss are pre-sented under the caption Minority in-terests, in the consolidated balance sheet separately under shareholders’ equity, and in the consolidated income statement respectively,. The compa-nies included in the consolidated finan-cial statements are detailed in Notes 6 and 7.

Minority interests are initially measured as the corresponding share in the fair value of the net assets acquired. Sub-sequently, these interests are adjusted for by the corresponding share in the changes in the subsidiaries’ sharehol-ders’ equity.

When the losses attributable to the mi-nority interests exceed the correspon-ding interests in the subsidiary’s sha-reholders’ equity, the Group absorbs this excess and any additional losses, except where the minorities have an obligation and are capable of covering such losses. If the subsidiary subse-quently reports profits, the Group ap-propriates all the profits until such time that the minorities’ share of the losses

absorbed by the Group have been re-couped.

When the Group reduced its interest in subsidiaries, any difference be-tween the fair value of the conside-ration received or receivable and the corresponding share in the recorded amount of the subsidiary’s net assets is recognised in the income statement of the period.

_3.2.2 INTERESTS IN JOINT CONTROLLED ENTITIES

A joint controlled entity is a joint ven-ture which involves the establishment of a company, a partnership or another entity which by means of a contrac-tual arrangement is jointly controlled by the various business participants.

Joint controlled entities are accounted for in the consolidated financial state-ments on the basis of the proportio-nate consolidation method, whereby the assets, liabilities, income and costs of the joint controlled entities are recognised on a line-by-line basis with similar items in the consolidated financial statements in proportion to the Group’s share of control.

The transactions, balances and divi-dends distributed between the joint controlled entities and other Group companies are eliminated in the con-solidation process in proportion to the Group’s share of control.

_3.2.3 INTERESTS IN ASSOCIATES

Associated companies are all entities over which the group exercises sig-nificant influence but does not have control, generally applied in invest-ments representing between 20% and 50% of the voting rights. Significant influence exists when the Group has

power to participate in decisions re-lating to the associate’s financial and operating policies, without resulting in control or joint control by the Group.

Investments in associates are accoun-ted for using the equity method. Under the equity method, the consolidated income statement reflects the Group’s share of profit or loss of the related associates. Investments in associates are recorded at acquisition cost adjus-ted for the Group’s interest in changes in the shareholders’ equity of the as-sociates and dividends received.

The excess of cost relative to the fair value of the identifiable assets and lia-bilities of each associate at acquisition is recognised as goodwill (Note 3.2.5) and included in the carrying amount of the investment. Where the difference between cost of acquisition and the fair value of the net assets and liabili-ties acquired is negative, that amount is recognised as income of the period.

An evaluation of investments in asso-ciates is carried out when there are indicators that the asset may be im-paired, with impairment losses being recognised in the income statement. When impairment losses previously recognised cease to exist, they are re-versed, with the exception of goodwill.

When the Group’s share in the losses of an associated company is equal to or exceeds its investment in the associate, the investment’s carrying value is stated as nil value, except if it has given a commitment or made payments on behalf of the associate. If the associate subsequently reports profits, the Company resumes the re-cognition of its share in those profits only after its share in the profits is equal to its share of losses not recog-nised.


Unrealised gains on transactions with associates are eliminated to the extent of the Group’s share in the associate. Unrealised losses are also eliminated ex-cept if the transaction reflects evidence of impairment of a transferred asset.

The accounting policies of associates were adapted whenever necessary so as to ensure consistency with the Group’s policies.

Interests in associates are disclosed in Note 8.

_3.2.4 OTHERS INVESTMENTS

Other investments are the interests in all the entities in which the group do not exercise significant influence, generally applied in the case of investments re-presenting less than 20% of the voting rights.

The other investments are accounted for:

> at their acquisition cost or amortized cost adjusted of impairment losses, when the financial investment is not public traded or the fair value cannot be reliably measured;

> at fair value against profit and loss when the investment has public market prices.

The gains or losses related to these investments (dividends) are recorded in the income statement when the dis-tribution is approved and announced.

_3.2.5 BUSINESS COMBINATIONS

The purchase method of accounting is employed in accounting for the acqui-sition of subsidiaries and businesses by the Group. The cost of a business combination is measured as the ag-gregate on acquisition date of: (a) the fair value of assets transferred or to be transferred; (b) the fair value of liabili-ties incurred or assumed; (c) the fair va-lue of equity instruments issued by the Group in exchange for securing control over the subsidiary; and (d) the costs directly attributable to the acquisition.

To the extent applicable, the cost of the business combination or acquisi-tion includes the effect of contingent payments agreed to within the scope of the transaction. Subsequent alterations to such payments are recorded against the corresponding goodwill.

The contingent assets, liabilities and obligations of the subsidiary or busi-ness acquired which meet the con-ditions for recognition laid down in NCRF 14 are recognised at their fair value at the date of acquisition. The excess of the consideration paid over

the fair value of the Company’s interest in the identifiable assets and liabilities acquired is recorded as goodwill. If the consideration paid is less than the fair value of the subsidiary’s identifia-ble assets and liabilities acquired, the difference is recognised directly in the consolidated income statement.

Whenever an increased stake in the equity of an associate results in the ac-quisition of control, as a result of which it is included in the consolidated finan-cial statements using the purchase method, the proportionate fair values attributed to the assets and liabilities, corresponding to the percentages pre-viously held, are recorded under the caption “Other changes in capital and reserves attributable to the company’s equity holders”.

Where the consideration paid is less than the fair value of the acquired subsidiary’s net assets (i.e. negative goodwill), the difference is recognised directly in the income statement under the caption “Other income and gains”.

In the event that the initial recognition of an acquisition is not concluded by the end of the reporting period in which it took place, the Group reports provi-sional figures for the items not recog-nised. These provisional amounts are subject to adjustment during a period of 12 months from acquisition date.

_3.2.6 GOODWILL

Goodwill is the excess of the conside-ration paid for the business concentra-tion over the Group’s share of fair value of the identifiable assets, liabilities and contingent liabilities recognised as a result of the acquisition.

Goodwill is recognised as an asset at the date control is acquired. Subse-


NOTES

51

quently, goodwill is not amortised and subject to annual impairment testing.

For impairment testing purposes, goo-dwill is imputed to the Group’s cash--generating units that are anticipated to benefit from the combination’s sy-nergies. The cash-generating units to which goodwill was imputed are sub-ject to annual impairment testing and at any time during the year if an indicator of impairment is considered to exist. If the recoverable amount of the cash--generating unit is less than the corres-ponding book value, the resulting im-pairment loss is initially imputed to the amount recorded as goodwill, while the remainder is imputed to the other cash--generating unit assets in proportion to their carrying amounts. Impairment losses arising in respect of goodwill are not reversed once recognised. Gains or losses resulting from the sale of an entity include the value of the cor-responding Goodwill.

_3.2.7 FOREIGN FINANCIAL STATEMENT TRANSLATION

Foreign entities are those which operate abroad, have organisational, economic and financial autonomy and which pre-pare their financial statements using a currency other than the Euro.

The items included in the financial sta-tements of each one of the Group’s fo-reign entities are measured using the currency of the economic environment in which the entity operates (functio-nal currency). The consolidated finan-cial statements are presented in Euro, which is the Group’s functional and presentation currency.

The assets and liabilities reported in the financial statements of foreign en-tities are converted into Euro using the exchange rates ruling at balance sheet

date. Income, costs and cash flows of these financial statements are conver-ted into Euro at the average exchange rate for the period. The currency diffe-rence resulting from the conversion is recorded in equity in the caption “Other changes in capital and reserves attribu-table to the company’s equity holders - currency translation differences”.

Goodwill and fair value adjustments re-sulting from the acquisition of foreign entities are treated as assets and lia-bilities of the acquired entity and con-verted into Euro in accordance with the exchange rate ruling at balance sheet date.

Whenever a foreign entity is sold, the accumulated exchange rate difference is recognised in the income statement as a gain or loss on the disposal.

The following are the exchange rates used for the translation of results, cash flows and balance sheets into Euro:

APPRECIATION/ 31/12/2013 31/12/2012 (DEVALUATION)

TND (Tunisian dinar) Average exchange rate for the period 2.1576 2.0065 (7.53%) Exchange rate at end of the period 2.2615 2.0468 (10.49%)LBP (Lebanese pound) Average exchange rate for the period 2,002.10 1936.80 (3.37%) Exchange rate at end of the period 2,079.00 1989.00 (4.52%)USD (American dollar) Average exchange rate for the period 1.3281 1.2848 (3.37%) Exchange rate at end of the period 1.3791 1.3194 (4.52%)BRL (Brazilian real) Average exchange rate for the period 2.8685 2.5077 (14.39%) Exchange rate at end of the period 3.2576 2.7036 (20.49%)CVE (Cape Verde escudo) Average exchange rate for the period 110.2650 110.2650 0.00% Exchange rate at end of the period 110.2650 110.2650 0.00%AOA (Angolan kwanzas) Average exchange rate for the period 128.1283 - - Exchange rate at end of the period 136.8127 126.7482 (7.94%)


_3.4 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are sta-ted at cost of acquisition, which inclu-des the purchase price, costs directly attributable to the activities needed for placing the assets in the location and condition required for their opera-tion in the manner intended and, when applicable, the initial estimate of the dismantling and removal costs of the assets, as well as the costs which the Group expects to incur with the resto-ration of the respective locations, net of accumulated depreciation and im-pairment losses.

On the date of transition to NCRF, the Group commenced the recognition, for the first time, of the cost related to the environmental remediation and improvements to be incurred with the quarries in Property, plant and equip-ment, as provided for in NCRF 7. The capitalised costs are subject to annual depreciation in accordance with the estimated useful life of the respective quarries.

Property, plant and equipment acqui-red up until 1 January 2010 (date of

transition to NCRF), are recorded pur-suant to NCRF 3 – Adoption for the first time of the Accounting and Financial Re-porting Standards, at their deemed cost, corresponding to the acquisition costs or revalued acquisition cost in line with ap-plicable legislation (certain tangible fixed assets acquired up until 31 December 1992 and 1996, were revalued in 1993 and 1998, respectively in accordance with legislation through the use of mo-netary devaluation coefficients).

The cost of property, plant and equip-ment of the Group’s subsidiaries: CMP, Société des Ciments de Gabés (SCG), Cimentos Costa Verde, Sicobetão, Cole-gra, Quimipedra, Uniconcreto, Eurobetão and Lusoinertes, was determined based on independent valuations on acquisition.

Costs incurred after acquisition are in-cluded in an asset’s carrying amount or recognised as a separate asset, as ap-propriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of an item can be measured reliably. All other expenditure relating to repairs and maintenance is charged during the financial period in which it is incurred.

_3.3 SEGMENT REPORTING

A business segment is a group of as-sets and operations of the Group which is subject to different risks and returns than those relating to other business segments.

Three business segments have been identified: Cement, Concrete and Ag-gregates.

Geographical segment is an individual area committed to supplying products or services in a particular economic environment and which is subject to different risks and benefits than those arising from segments which operate in other economic environments. The geographical segment is defined based on the destination country of the goods and services sold by the Group.

The accounting policies applied in seg-ment reporting are those consistently used by the Group. All inter-segment sales and services at market prices are eliminated on consolidation.

The information relating to the identi-fied segments is presented in Note 5.


NOTES

53

Depreciation is calculated on a strai-ght-line basis in conformity with the estimated useful life of each group of assets. For certain classes of property, plant and equipment the reducing-ba-lance method is used.

The useful lives and depreciation basis of assets are reviewed annually. The effect of any alteration to these estima-tes is recognised in the income state-ment prospectively.

Repair and maintenance expenditure which is not capable of generating fu-ture economic benefits is recorded as a cost in the period in which it is incurred.The residual values of the assets and the respective useful lives are reviewed and adjusted, where necessary, at the balance sheet date. When the carrying value exceeds the estimated recove-rable amount, the assets are written down to their estimated recoverable amount, and an impairment charge is recorded (Note 3.8).

Gains or losses on the write-off or dis-posal represent the difference between the amount received and the asset’s carrying value, and are recognised in the income statement, under the cap-tions ”Other income and gains” and “Other costs and losses”.

_3.5 LEASES

Assets held under finance leases, which are leases where substantially all the risks and rewards of ownership of the asset have been transferred to the lessee. The remaining leases are classified as operating leases. The classification of leases is done based on the substance and not the form of the lease contract.

Assets acquired under finance leases, as well as the corresponding liabilities,

are recorded at the inception of the le-ase at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Finance le-ase payments are apportioned between the finance and the capital elements of future obligations over the periods of the relevant agreements and represent a constant rate of interest on the outs-tanding balance of the liability.

Operating lease rentals are charged on a straight-line basis over the lease term. Grants received are recorded as a liabi-lity, while the aggregate amount thereof is recognised as a decrease in the lease cost, also on a straight-line basis.

Contingent rentals are recognised as an expense in the period in which they are incurred.

_3.6 INVESTMENT PROPERTY

Investment property comprises fixed properties held for the purpose of gene-rating rental income or for capital appre-ciation (or both), and are not intended for use in the production or supply of goods or services or for administrative purposes or for sale in the ordinary course of business.

Investment property is initially measu-red at cost, including transaction costs. Subsequently, investment properties are measured in accordance with the cost model.

Costs incurred related with investment property in use, namely, maintenance, repairs, insurance and property taxes are recognised as an expense in the period to which they refer. Improve-ments in respect of which there are expectations that they will generate additional future economic benefits are capitalised under the caption “Invest-ment property”.

_3.7 INTANGIBLE ASSETS I) INTANGIBLES ACQUIRED SEPARATELY

Intangible assets acquired separately are recorded at cost (or, in certain rare cases, in accordance with the revalua-tion model), net of accumulated amor-tisation and impairment losses.

II) INTANGIBLES GENERATED INTERNALLY – RESEARCH AND DEVELOPMENT EXPENDITURE

Expenditure on research activity is re-corded as a cost in the period in which it is incurred, while expenditure on pro-ject development is only recognised as an internally-generated intangible asset if all the following conditions are met:

> There is technical viability to com-plete the intangible so that it is availa-ble for use or for sale;

> There is the intention to complete the intangible and to use or sell it;

> There is the ability to use or sell the intangible;

> The intangible is capable of genera-ting future economic benefits;

> The appropriate technical and finan-cial resources are available to complete the development of the intangible and to use or sell it;

> It is possible to reliably measure the expenditure associated with the intan-gible during its development phase.

The amount of the internally-generated intangible asset initially recognised is the sum of the expenditures incurred after the date on which the aforemen-tioned conditions are met. When such conditions are not met, the expenditure incurred in the development phase is


recorded as an expense of the period. Internally-generated intangible assets are recorded at cost net of accumula-ted amortisation and impairment losses.

III) INTANGIBLES ACQUIRED WITHIN THE AMBIT OF BUSINESS COMBINATIONS

Intangibles acquired within the ambit of business combinations and recognised separately from goodwill are initially re-corded at their fair value on acquisition date, and thereafter net of accumulated amortisation and impairment losses.

IV) AMORTISATION OF INTANGIBLES

Amortisation is recognised on the straight-line basis over the estimated useful life of the intangible assets. The useful lives and amortisation method applied to the various intangible assets are reviewed annually. The effect of any change in these estimates is recognised in the income statement prospectively.

Intangible assets (irrespective of the manner in which they are acquired or generated) with an indefinite useful life are not amortised, but instead subjected to annual impairment tests or whenever

there is an indication that the intangible may be impaired.

V) EMISSION RIGHTS

Emission rights attributed to the Group at no cost within the ambit of the EU ETS (European Union Emissions Trading Scheme) 2013-2020, are accounted for at the time of their initial recognition at fair value under the caption “Intangible assets” and recognised as a grant direc-tly in equity, in the caption “Other chan-ges in capital and reserves attributable to the company’s equity holders”.

A cost is recognised on the basis of the amortisation of the intangible as-set, and income is recognised on the proportional basis of the emission ri-ghts received in respect of the actual emissions by the Group.

Emissions are measured at the histori-cal cost of the rights on the FIFO basis.

On the sale of emission rights, a gain or loss arises representing the difference between the sale proceeds and the res-pective cost of acquisition, net of the government grant received and recor-

ded under “Other income and gains” or “Other costs and losses” respectively in the period the disposal takes place.

Whenever emissions exceed the quan-tity of the rights held the respective lia-bility is recognised in accordance with NCRF 21 - Provisions, Contingent Lia-bilities and Contingent Assets.

_3.8 IMPAIRMENT OF TANGIBLE AND INTANGIBLE FIXED ASSETS EXCLUDING GOODWILL

At each reporting date, a review is car-ried out of the carrying values of the Group’s tangible and intangible fixed assets with a view to ascertaining whe-ther there is any indicator that they may be impaired. If such an indicator exists, the recoverable amount of the respec-tive assets is estimated with a view to determining the extent of the impair-ment loss (where this is the case).

When it is not possible to determine the recoverable amount of an individual asset, an estimate is made of the reco-verable amount of the cash-generating unit to which the asset belongs.

The recoverable amount of the asset or the cash-generating unit is the greater of (i) its fair value less costs to sell and (ii) its value-in-use. In assessing the value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit for which the future cash flows es-timates have not been adjusted.

Whenever the carrying value of the as-set or cash-generating unit is greater than its recoverable amount, an impair-ment loss is recognised. The impair-ment loss is recognised immediately in


NOTES

55

the income statement under the cap-tions “Impairment of non-depreciable/amortisable assets ((losses)/reversals)” or “Impairment of depreciable/amorti-sable assets ((losses)/reversals)”, ex-cept where such loss offsets a revalua-tion surplus recorded in equity, which is recognised as a revaluation decrease.

Reversals of previously recognised im-pairment losses are recognised under the same captions of the income state-ment when evidence exists that the los-ses recognised no longer exist or have diminished, and only to the limit of the amount that would have been recog-nised (net of depreciation/amortisation) had the loss not been recorded.

_3.9 INCOME TAX

Corporate income tax corresponds to current and deferred taxation. Current taxes and deferred taxes are recorded in the income statement, except where they relate to items recorded directly in equity, in which case the corresponding tax is also recorded in equity.

Current tax: current tax payable is based on the taxable profit for the period of the various Group entities. Taxable profit di-ffers from accounting net income/loss given that it excludes certain costs and income which are only deductible or ta-xable in other periods. Taxable profit also excludes costs and income which will never be deductible or taxable.

Deferred tax: deferred tax refers to the temporary differences between the va-lues of assets and liabilities for accoun-ting purposes and their respective values for taxation purposes.

Deferred tax liabilities are generally re-cognised for taxable temporary differen-ces. Deferred tax assets are recognised for deductible temporary differences: ho-

wever, such recognition is only applied where there is reasonable expectation of sufficient future taxable profits to uti-lize against the respective deferred tax assets. A review of deferred tax assets is carried out at each reporting date, and adjusted for expectations of their future utilisation.

Deferred tax assets and liabilities are measured using the tax rates expected to be in force on the date of the res-pective reversal of the corresponding temporary differences, based on tax rates (and tax legislation) in force at the reporting date.

Set off between deferred tax assets and liabilities is only permitted when: (i) the company has a legal right to off-set such assets and liabilities; (ii) such assets and liabilities refer to income ta-xes assessed by the same tax authority and (iii) the company intends to offset for settlement purposes.

_3.10 INVENTORIES

Inventories are stated in accordance with the following criteria:

I) GOODS FOR RESALE AND RAW MATERIALS

Goods for resale and raw, subsidiary and consumable materials are valued at the lower of purchase cost and net realisable value. Purchase cost inclu-des ancillary purchase expenditure and is based on the weighted average principle.

II) FINISHED GOODS AND WORK-IN-PROGRESS

Finished and intermediate goods and

work-in-progress are valued at the lo-wer of cost of production (includes cost of direct materials, labour and attributable production overheads ba-sed on a normal operating capacity) and net realisable value, excluding storage, logistics and selling costs.

Net realisable value corresponds to the estimated selling price after de-ducting completion and selling costs. The difference between cost and net realisable value, if lower, is recorded as a stock impairment charge.

_3.11 FINANCIAL ASSETS AND FINANCIAL LIABILITIES

Financial assets and financial liabi-lities are recognised in the balance sheet when the Group companies become part of the corresponding contractual provisions, in accordance with the requirements of NCRF 27 – Financial Instruments.

Financial assets and financial liabili-ties are classified into the following categories: (i) at cost or amortised cost and (ii) at fair value with changes recognised in the income statement.

I) AT COST OR AMORTISED COST

Financial assets and financial liabili-ties which present the following cha-racteristics are classified under the category “at cost or amortised cost”:

> Payable on demand or with a defi-ned maturity; and

> Have an associated fixed or deter-minable return; and


> Are not a derivative financial instru-ment or do not incorporate a derivative financial instrument.

Amortised cost is calculated employing the effective interest methodology. The effective interest rate is the discount rate of estimated future payments or receipts over the expected life of the financial instrument’s resulting in the net carrying value of the financial asset or liability.

The following financial assets and fi-nancial liabilities are included in this category:

a) TRADE AND OTHER RECEIVABLES

Trade and other receivable balances are stated at amortised cost net of im-pairment losses. Normally, the amorti-sed cost of these assets does not differ from their nominal value.

b) CASH AND CASH EQUIVALENTS

The amounts included under the cap-tion “Cash and bank balances” com-prise cash balances, bank balances and term deposits and other treasury assets with maturities of three months or less and are subject to an insignifi-cant risk of changes in value.

These assets are stated at amortised

cost. Normally, the amortised cost of these assets does not differ from their nominal value.

c) OTHER ASSETS

Other assets, which include loans granted, are stated at amortised cost net of any impairment losses. D) TRADE AND OTHER PAYABLES

Trade and other payables are stated at amortised cost. Normally, the amor-tised cost of these liabilities does not differ from their nominal value.

e) LOANS RECEIVED

Loans are recognised in liabilities at amortised cost.

Expenditure related with the procu-rement of borrowings, namely bank commissions, stamp duty, interest and other charges, are recognised on the effective interest basis in the income statement over the term of the borro-wings. The expenditure is presented as a deduction to the caption ”Interest--bearing debt”.

f) OTHER LIABILITIES

Other liabilities are generally recorded at amortised cost.


NOTES

57

G) LOAN CONTRACTS

Loan contracts which cannot be repaid on a net basis and which, when exe-cuted, meet the conditions for being classified under the category “At cost or amortised cost”, are recorded at cost net of any impairment losses.

The amounts of the loan contracts are recorded, according to their nature, un-der the caption “Other financial assets” or under the caption “Other financial lia-bilities”.

Amortised cost is calculated employing the effective interest methodology. The effective interest rate is the discount rate of estimated future payments or receipts over the expected life of the financial instrument’s resulting in the net carrying value of the financial asset or liability.

II) AT FAIR VALUE WITH CHANGES RECOGNISED IN THE INCOME STATEMENT

All financial assets and liabilities not classified under the category “at cost or amortised cost” are classified in the category “at fair value with changes recognised in the income statement”.

Such assets and liabilities are measu-red at fair value, while changes therein are recorded in the income statement under the captions “Losses from fair value decreases” and “Gains from fair value increases”.

_3.11.1 IMPAIRMENT OF FINANCIAL ASSETS

Financial assets classified under the category “at cost or amortised cost” are subject to impairment testing at each reporting date. Such financial as-sets are impaired when there is objec-tive evidence that as a result of one or more events occurring after their initial

recognition, their estimated future cash flows are affected.

For financial assets measured at amor-tised cost, the impairment charge cor-responds to the difference between the carrying amount of the asset and the present value of the new estimated future cash flows discounted at the ori-ginal effective interest rate.

For financial assets measured at cost, the impairment charge corresponds to the di-fference between the carrying value of the asset and the best estimate of the asset’s fair value.

Impairment losses are recorded in the in-come statement under the caption “Im-pairment of accounts receivable ((losses)/reversals)” in the period in which they are determined.

Subsequently, if the amount of the impair-ment loss decreases and such decrease can be objectively related to an event which took place after the recognition of the loss, this must be reversed in the income statement. The reversal must be recognised up to the limit of the amount of the amortised cost which would be re-cognised had the loss not been initially re-corded. The reversal of impairment losses is recorded in the income statement un-der the same caption, while the reversal of impairment losses on equity instruments (measured at cost) is not permitted.

_3.11.2 DERECOGNITION OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The Group derecognises financial assets only when the contractual rights to their future cash flows expire, or when the fi-nancial asset and all the significant risks and rewards associated with its posses-sion are transferred to another entity. The financial assets transferred in respect of which the Group retained some signifi-

cant risks and benefits are derecog-nised provided that control over these has been assigned.

The Group derecognises financial lia-bilities only when the corresponding obligation has been settled, cancelled or expired.

_3.12 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Non-current assets and disposal groups for sale are classified as held for sale when their carrying value is essentially recoverable by means of a sale and not through their continued use. This condition is deemed to apply only when the sale is highly probable and the non-current asset or group for disposal is available for immediate sale under their present conditions. The corresponding sale must be concluded within one year commencing from the classification date of the non-current asset or group for disposal as available for sale.

When the Group is committed under a plan for the sale of a subsidiary which involves the loss of control over it, all that subsidiary’s assets and liabilities are classified as held for sale, provi-ded that the requirements referred to in the preceding paragraph are satis-fied, even where the Group retains a minority interest in the subsidiary after the sale.

From the moment that certain tangible assets are deemed to be held for sale, such assets are no longer depreciated and they are henceforth classified as non-current assets held for sale. The gains or losses on the disposal of tan-gible assets, calculated as being the difference between the sale price and the respective net book value, are re-


cognised in the income statement un-der the caption “Gains or losses on the disposal of assets”.

Non-current assets and the groups for sale classified as for sale are stated at the lower of their carrying value and their fair value less selling expenses.

_3.13 GOVERNMENT GRANTS

Government grants are recognised where there is reasonable assurance that the grant will be received and all attaching conditions have been com-plied with.

Government grants associated with the acquisition or manufacture of non--current assets are initially recognised in equity, under the caption Other changes in capital and reserves attributable to the company’s equity holders, and subse-quently imputed on a systematic basis (proportionate to the depreciation of the underlying assets) as income for the year during the useful lives of the assets. In cases of grants for non-depreciable assets, they are retained in capital and reserves attributable to the company’s equity holders, except for the portion re-

quired to compensate for impairment losses on the assets.

Other government grants are generally recognised as income in a systematic manner over the period of the asso-ciated costs to be offset. Government grants received for losses already in-curred or which do not have associa-ted future costs, are recognised as income in the period when received.

_3.14 FOREIGN CURRENCY CONVERSION

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. At each reporting date, the carrying values of monetary items denominated in foreign curren-cies are retranslated at the rate of exchange ruling at the balance sheet date. The carrying values of non-mo-netary items recorded at fair value denominated in foreign currencies are retranslated at the rate of exchange ruling at the date on which the res-pective fair values were determined. The carrying values of non-monetary items recorded at historical cost deno-minated in foreign currencies are not retranslated.

Currency differences resulting from the above-mentioned retranslations are recognised in the income statement in the period in which they are generated.

_3.15 PROVISIONS

Provisions are only recognised when the Group has a present obligation (ei-ther legal or constructive) as a result of a past event, it is probable that a transfer of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Provisions are measured at the present value of the best estimate of the resour-ces required to settle the obligation at the reporting date. Such estimate is determined taking into consideration the risks and uncertainties associated with the obligation.

Provisions are reviewed on the repor-ting date and are adjusted to reflect the best estimate at that date.

Present obligations arising from for--value contracts are recorded and me-asured as provisions. A for-value con-tract exists when the Group is a party subject to the terms and conditions of an agreement, compliance with which has associated costs that are not pos-sible to avoid and which exceed the economic benefits derived there from.

A provision for restructuring is recogni-sed when the Group has developed a detailed formal restructuring plan and initiated its implementation or announ-ced its principal components to those covered by it. In measuring the provi-sion for restructuring, only expenditure resulting from the Company’s normal activities are considered.

Contingent liabilities are not recognised in the financial statements, but disclo-sed whenever there is a possibility that an outflow of resources encompassing economic benefits is not remote. Con-tingent assets are not recognised in


NOTES

59

the financial statements, but disclosed when it is probable that there will be a future economic inflow of resources.

ENVIRONMENTAL REMEDIATION AND IMPROVEMENTS

In terms of applicable legislation, cer-tain Group companies have the res-ponsibility of undertaking environmen-tal remediation and improvements to operated quarries. The remediation works include clearing and revamping of the affected areas, land preparation, transportation and disposal of mate-rials for landfill, fertilisation, execution of resurfacing plans with hydro-resee-ding and plantations and the mainte-nance and conservation of remediated zones after implantation.

The extent of the necessary work and respective cost to be incurred were cal-culated based on independent studies, and the corresponding total liability was measured as being the expected amount of the future cash flows, dis-counted to their present value. A dis-count rate of 7.4% was used for this purpose.

Value judgments and estimates are involved in the formation of expecta-tions concerning future activities and the time span of the associated cash flows. These projections are made ba-sed in the existing landscape and the regulations in force.

The amount of the provision for re-mediation is increased at the repor-ting date by the time effect of money against the caption “Interest and simi-lar expense”, and reduced by expen-

diture incurred by Group companies with the remediation on the date the expenditure occurs.

_3.16 POST EMPLOYMENT BENEFITS

_3.16.1 DEFINED CONTRIBUTION PLANS

The contributions to defined-contri-bution plans are recognised as a cost under the caption “Personnel costs” in the period in which they are incurred (when the employees covered by the plan provide the services entitling them to the benefits).

_3.16.2 DEFINED BENEFIT PLANS

The costs associated with the Group’s defined-benefit plans are recognised under the caption “Personnel costs” and are assessed on the basis of the projected unit credit method by actua-rial valuations performed at the interim and year-end reporting dates.

Actuarial gains and losses resulting from differences between assump-tions used for actuarial purposes and those effectively incurred, and from changes to assumptions and the diffe-rence between the expected return on the fund’s assets and the actual return are recognised directly in equity in the caption “Other changes in capital and reserves attributable to the company’s equity holders”(Note 23).

The cost of past services is recognised in the income statement on a straight--line basis over the period until the benefits become vested. To the extent that the benefits vest the related ex-pense is recognised immediately.

Gains and losses generated by a reduc-tion or a liquidation of a defined-benefit plan are recognised in the income sta-tement in the period the event occurs.

A reduction in a plan occurs when there is a material reduction in the number of employees or the plan is altered in such a manner that the benefits attributed are materially reduced.

The liability associated with the gua-ranteed benefits recognised in the balance sheet represents the present value of the corresponding obligation, adjusted for actuarial gains and losses and for the cost of past services not recognised and less the fair value of plan assets out of which obligations are to be settled.

_3.17 OTHER LONG-TERM EMPLOYEE BENEFITS

NCRF 28 – Employee benefits, provides a simplified method for the recognition and measurement of other employee long-term benefits with the immediate recognition of post-employment benefits relating to (i) actuarial gains and losses and (ii) all the cost of past services.

The respective costs are recorded under the caption ‘‘Personnel costs” and the liability recognised in the balance sheet at the present value of the defined bene-fit obligation, calculated in accordance with the actuarial valuations at each re-porting date.

_3.18 SHORT-TERM EMPLOYEE BENEFITS

Short term employee benefits are recog-nised as an expense under the caption


“Personnel costs” in the period the ser-vice is rendered.

In the case of profit-sharing and incentive schemes, the costs are recognised only when,: (i) there is a legal or constructive obli-gation to make such payments as a conse-quence of past events and (ii) a reasonable estimate can be made of the obligation.

A present obligation exists only when the Group has no realistic alternative but to make the payment.

_3.19 REVENUE RECOGNITION

Revenue represents the fair value of the consideration received or to be recei-ved and is net of the estimated amount of returns, discounts, other rebates and value added tax/sales tax.

Revenue from the sale of goods is recog-nised when all the following conditions are fulfilled:

> All the risks and rewards of ownership have passed to the buyer;

> The company no longer has any con-trol over the goods sold;

> The amount of revenue can be re-liably measured;

> It is probable that economic bene-fits associated with the transaction will flow to the Group;

> The costs incurred or to be incurred with the transaction can be reliably measured.

Revenue from the provision of ser-vices is recognised according to the stage of completion of the transac-tion at the reporting date, providing the following conditions have been fulfilled:

> The amount of the revenue can be reliably measured;

> It is probable that economic bene-fits associated with the transaction will flow to the Group;

> The costs incurred or to be incurred with the transaction can be reliably measured;

> The stage of completion can be re-liably measured.


NOTES

61

Interest revenue is recognised using the effective interest method, providing it is probable that economic benefits flow to the Group and the amount can be relia-bly measured.

Revenue derived from dividends is re-cognised by the Group upon entitlement.

_3.20 BORROWING COSTS

Finance charges on borrowings are ge-nerally recognised as costs as and when incurred.

Borrowing costs incurred in the acquisi-tion, construction or production of fixed assets are capitalised when the period of the construction is more than one year, thus forming an integral part of the asset’s cost.

The capitalisation of these costs com-mences after the start of the preparation for the asset’s construction or develop-ment activities and is suspended as soon as the asset is commissioned or the pro-ject concerned suspended.

Any financial income generated by loans directly related to a specific investment is deducted from the borrowing costs eligible for capitalisation. _3.21 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE ACCOUNTING

The Group employs derivative financial instruments to manage financial risks.

The Group contracts derivative financial instruments such as interest rate swaps (IRS), caps and floors, forwards, etc to manage adverse interest rate and foreign currency risks.

In addition, the Group employed deriva-tive financial instruments to manage risks related to its portfolio of emission rights.

Derivative financial instruments are stated at fair value on the date they are contracted. At each reporting date, the instruments are re-measured at fair value, with the corresponding gain or loss on re-measurement recognised immediately, except where designated as a hedge. If designated as a hedging instrument, any gain or loss stemming from the re-measurement of the hed-ging instrument is recognised in the income statement when the hedged position affects net income/loss.

A derivative financial instrument with a positive fair value is recognised as a financial asset in the captions “Other non-current assets” or “Other current assets”. A derivative financial instrument with a negative fair value is recognised as a financial liability under the captions “Other non-current accounts payable” or “Other current accounts payable”.

A derivative financial instrument is clas-sified as non current when its remaining maturity term is more than 12 months and its realisation or discharge is not expected to occur within 12 months.

HEDGE ACCOUNTING

The Group designates certain derivative financial instruments as a hedging ins-trument within the scope of hedge ope-rations involving interest rate risk and emission right price risk.

The criteria for the application of hedge accounting rules are as follows:

> Adequate documentation of the hed-ged item;

> The risk to be hedged is one of the risks described in NCRF 27 – Financial Instruments;

> It is expected that the changes in the

fair value or cash flows of the hedged item, attributable to the risk to be hed-ged, are practically offset by changes in the fair value of the hedging instrument.

At the inception of the hedge operation, the Group documents the relationship between the hedging instrument and the hedged items, together with its risk management objective and the strategy underlying the proposed transaction. The Group also documents its assessment of the effectiveness of the hedging instru-ment in offsetting movements in the fair values or cash flows of the hedged items.

Movements in the fair value of deriva-tive financial instruments designated as a hedging instrument for the risk of emission right prices within the ambit of a highly probable forecast transaction are recorded in equity, under the caption “Other changes in capital and reserves attributable to the company’s equity holders – hedging reserve”. The gains or losses recorded in equity are trans-ferred to the income statement contem-poraneously with the materialisation of the hedged transaction, and presented in the line affected by the hedged item.

Hedge accounting is discontinued when the Group terminates the hedge rela-tionship, when the hedging instrument expires, is sold or is exercised, or when the hedging instrument no longer qua-lifies for hedge accounting. Any cumu-lative gain or loss amount recorded in “Other changes in capital and reserves attributable to the company’s equity holders” is only transferred when the hedged position affects the income statement. When the hedged position consists of a future transaction and


such transaction is not expected to take place, any amount recorded in “Other changes in capital and reserves attribu-table to the company’s equity holders” is immediately transferred to the income statement.

_3.22 RISK MANAGEMENT

_3.21.1 FINANCIAL RISK

The Secil Group has a risk management programme which focuses its analysis on the financial markets with a view to mi-tigating the potential adverse effects on the Secil Group’s financial performance.

Risk management is undertaken by Secil’s Finance Department in accor-dance with the policies approved by the Board of Directors.

a) FOREIGN CURRENCY RISK

Fluctuations in the Euro relative to other foreign currencies can affect the Group’s revenue in a number of ways.

Currency risk arises primarily from the exposure of the Group to its purchases of fuel and sea freight, both of which are

incurred in USD. The Group pursues a policy of maximi-sing the potential natural hedge of its currency exposure through the com-pensatory effect of its intra-group cur-rency flows. In the case of cash flows not offset, the underlying risk has been analysed and hedged through currency option contracts which permit the group to benefit partially from favou-rable movements in exchange rates.

The Secil Group has assets located in Tunisia, Angola and Lebanon, with the result that any change in local cur-rencies versus the Euro could have an impact on the Group’s balance sheet.

b) INTEREST RATE RISK

Towards the end of 2005, the Group op-ted to partially hedge interest rate risk by means of derivative instruments which fixed a maximum level for the finance charges on long-term borrowings pha-sed repayment terms. The remaining borrowings attract variable interest rate.

c) EMISSION RIGHTS RISK

The Group promotes the active ma-

nagement of its portfolio of emission rights allocated to the Group within the ambit of phase 2 of the EU-ETS. As a result of the increased usage of alternative fuels the Group maintains emission right surpluses whilst some excess rights have been transacted on the open market, eliminating price risk.

d) REVENUE RISK

Deterioration in global economic condi-tions or adverse situations which affect economies at the local level could give rise to situations in which customers are unable to meet their commitments on purchases of products. Credit insu-rance has been one of the instruments employed by the Group to mitigate the negative impact of this type of risk.

e) LIQUIDITY RISK

The Group manages liquidity risk in two ways: first it ensures that its interest--bearing debt has a medium and long--term profile with maturities in line with the lives of the assets financed, and second having access to surplus credit facilities.

_3.21.2 OPERATIONAL RISK

a) CONSTRUCTION SECTOR

The Group’s turnover is dependent on the level of activity in the building sec-tor in each of the geographic markets in which it operates. The construction sector tends to be cyclical, in particular in mature economies, and depends on the level of residential and commercial building, as well as on the level of in-vestments in infrastructure.


NOTES

63

The construction sector is sensitive to factors such as interest rates, while a downturn in economic activity in any specific economy may lead to a reces-sion in the building industry.

The Group considers its geographical diversification the best means of sta-bilising its earnings. However its busi-ness, financial situation and operating profit can be negatively affected by a downturn in the construction sector in any of the key markets it operates in.

b) DEMAND FOR PRODUCTS

In mature markets, the demand for cement and other building materials tends to be highly constant throu-ghout the year. A decline in demand is observed in January and December. The demand for the Group’s products is generally aligned with this pattern.

c) ENVIRONMENTAL LEGISLATION

In recent years, EU and national legis-lation has been more demanding with regard to waste management.

The Group complies with legislation cur-rently in force, having made substan-tial investments in recent years in this area. Although no significant changes to current legislation are envisaged in the near future, the possibility exists that the Group may need to undertake additional investments in this area so as to comply with any new legislation.

d) ENERGY COSTS

A significant part of the Group’s costs relates to energy costs. Energy is a cost

factor with a substantial weight on the business carried on by the Group.

The Group hedges to a certain degree against the energy price risk through the usage of alternative fuels at its fac-tories and long-term electric power su-pply contracts for certain of its energy requirements.

However significant fluctuations in electricity and fuel costs can have a ne-gative impact on the Group’s business, financial situation and operating profit.

e) NEED FOR SIGNIFICANT INVESTMENTS IN FUTURE ACQUISITIONS

The Group has interests in sectors undergoing consolidation and where growth opportunities may arise through organic growth and acquisitions.

_3.23 SHARE CAPITAL AND TREASURY SHARES ORDINARY SHARES ARE CLASSIFIED IN EQUITY (NOTE 21).

Costs directly attributable to the issue of new shares or other equity instru-ments are stated as a deduction, net of taxes, from the issue proceeds. The costs directly imputed to the is-sue of new shares or options for the acquisition of a business combination are included in the cost of acquisition, as part of the purchase consideration.

Treasury shares are recorded at the cost of acquisition, as a deduction from capital and reserves attributable to the company’s equity holders under the caption “Treasury shares”, while gains or losses arising from their disposal are recorded in “Other reserves”. In confor-mity with applicable commercial legis-lation, as long as the treasury shares remain in the company’s possession, a reserve equivalent to their acquisition cost is created and may not be utilised.

When a Group company acquires trea-sury shares in the parent company the payment, including directly attributable incremental costs net of taxes, is de-ducted from the Group’s equity, until such time as the shares are cancelled, re-issued or disposed of.

When such shares are subsequently sold or re-issued, any proceeds, net of directly attributable costs and ta-xes, are recognised in other reserves in equity.

_3.24 DIVIDENDS

The distribution of dividends to sha-reholders is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by its shareholders and until their distribution.

_3.25 CRITICAL VALUE JUDGMENTS ANDPRINCIPAL SOURCES OF UNCERTAINTYASSOCIATED WITH ESTIMATES

In the preparation of the accompanying consolidated financial statements, va-lue judgments and estimates were made and a number of assumptions used which affect the carrying amounts of assets and liabilities, as well as the stated amounts of income and expen-ses in the period.

Estimates and underlying assumptions were determined based on: the best knowledge available at the date of the approval of the consolidated financial statements, the events and transac-tions in progress, and the experience of past and/or current events.

Situations may however arise in subse-quent periods which, unforeseeable at the date of the approval of the conso-lidated financial statements, were not considered in those estimates. Chan-


ges to estimates which occur after the date of the financial statements will be corrected prospectively. For this rea-son and given the degree of the asso-ciated uncertainty, the actual results of the transactions concerned could differ from estimates.

The principal value judgments and es-timates made in the preparation of the accompanying consolidated financial statements were the following: a) IMPAIRMENT OF GOODWILL

Goodwill is subject to impairment tes-ting annually or whenever there are signs of a possible loss of value in ac-cordance with the policy described in Note 3.2.6.

The recoverable amounts of the cash--generating units to which the goodwill is allocated are ascertained based on the value-in-use method, determined in accordance with the expected cash flows. In determining the value-in-use, management estimates are used with respect to future trends in activity and discount rates.

b) INCOME TAX

The Group recognises liabilities for additional tax assessments resulting from inspections carried out by the tax authorities.

When the final outcome of the above reviews is different from the amounts initially recorded, any differences will have an impact on income tax and deferred tax in the periods in which such differences are identified.

c) DEFERRED TAX ASSETS RECOGNITION

Deferred tax assets are recognised when there is a strong probability that there will be future taxable profits available for offset against temporary differences, or when there are defer-red tax liabilities whose reversal is ex-pected to occur in the same period in which the deferred tax assets are reversed. The assessment of deferred tax assets is done by management at the end of each financial year, taking into account the prospects for future performance.

d) ACTUARIAL ASSUMPTIONS

The valuation of defined-benefit lia-bilities is carried out annually with recourse to independent actuarial studies, based on actuarial assump-

tions associated with economic and demographic indicators. Changes to those assumptions can have a mate-rial impact on such liabilities.

e) PROVISIONS

The Group periodically analyses po-tential obligations arising from past events and which are the object of recognition or disclosure. The subjec-tivity inherent in determining the pro-bability and amount of internal resour-ces required to settle the obligations could lead to significant adjustments, not only as a result of changes to the assumptions utilised, but also the fu-ture recognition of provisions previou-sly disclosed as contingent liabilities.

f) IMPAIRMENT OF ACCOUNTS RECEIVABLE

The Group manages credit risks in the accounts receivable portfolio by means of stringent risk analysis when credit is granted to new customers, as well as through regular credit reviews (Note 19.4).

Owing to the intrinsic nature of its customers, credit ratings are not re-adily available on customers which would allow their characterisation and analysis as a homogeneous popula-tion.

Accordingly, information is gathered on customer financial performance through regular contacts with custo-mers and other entities involved in the commercial relationship (for example, sales agents).

In parallel, the Group contracts credit insurance cover for customer balan-ces reducing its exposure to those ex-cess balances in the event of a claim, which amount varies according to a customer’s geographic origin.


NOTES

65

_3.26 POST-BALANCE SHEET EVENTS

Events after the balance sheet date which provide additional information about conditions that existed at ba-lance sheet date (“adjusting events” or post-balance sheet events which give rise to the adjustments) are reflected in the financial statements. Post-balance sheet events that provide information about conditions which occur after the balance sheet date (“non-adjusting events” or post-balance sheet events which do not give rise to adjustments) are disclosed in the financial state-ments if they are deemed to be ma-terial.

_4. CASH FLOWS

For purposes of the consolidated cash flow statement, cash and cash equivalents include cash, liquid bank balances with maturities of up to three months and money market treasury in-vestments, net of bank overdrafts and other short-term borrowing equiva-lents. Cash and cash equivalents at 31 December 2013 and 2012 comprise:

Amounts in Euro 31/12/13 31/12/12 Cash 305,587 268,965Liquid bank deposits 25,609,321 23,554,412Treasury investments 98,408,239 48,908,387 (Note 19) 124,323,147 72,731,764Bank overdrafts (Note 24.3) (14,163,855) (10,929,178) 110,159,292 61,802,586


_5. SEGMENT REPORTING AND REVENUE BY GEOGRAPHIC DESTINATION

_5.1 SEGMENT REPORTING

Segment information is presented in relation to three business seg-ments comprising Cement, Concrete

and Aggregates. Directly attributable earnings, assets and liabilities are al-located to each segment, as well as items which can be imputed to each segment on a reasonable basis. The segment reporting for the years ended 31 December 2013 and 2012 is shown as follows:

31 DECEMBER 2013 CEMENT CONCRETE AGGREGATES CAPE CAPE OTHER NOT Amounts in Euro PORTUGAL LEBANON TUNISIA ANGOLA VERDE PORTUGAL LEBANON TUNISIA PORTUGAL VERDE ALLOCATED ELIMINATIONS CONSOLIDATED Revenue External revenue 161,367,949 81,302,932 59,332,254 23,869,560 4,749,460 40,829,862 9,112,591 7,866,267 7,626,997 616,975 14,850,594 - 411,525,441 Inter-segmental revenue 42,373,278 3,371,481 2,707,706 - 100,489 172,308 - - 4,416,590 - 11,260,186 (64,402,038) - Total sales and services 203,741,227 84,674,413 62,039,960 23,869,560 4,849,949 41,002,170 9,112,591 7,866,267 12,043,587 616,975 26,110,780 (64,402,038) 411,525,441

EBITDA 27,514,063 30,536,137 6,603,314 (1,050,390) 125,865 (3,365,632) 765,066 873,884 (404,050) 68,394 (1,624,604) (7,704) 60,034,343 Depreciation and amortisation (costs)/ reversals (30,407,318) (8,892,765) (9,235,536) (1,754,601) (7,407) (2,126,884) (662,747) (465,774) (2,144,655) (66,167) (2,672,408) - (58,436,262) Government grants 7,771,522 - 357,138 - - - - 1,832 201 - 95,426 - 8,226,119 Gains /(losses) on disposal of non-current assets 134,572 (28,361) 4,593 - (86) 338,794 (23,651) - 179,956 - 9,431 - 615,248 Provisions ((increases)/ decreases) 281,394 (532,874) (72,662) (10,463) - (1,401,469) (175) (7,456) (3,667) - (2,004,837) - (3,752,209) Impairment of non depreciable/ amortisable investments ((losses)/ reversals) (13,620,281) - - - - - - - - - - - (13,620,281) Impairment of depreciable/amortisable assets ((losses)/ reversals) 600,092 - - (1,202,321) - 1,065,668 - - 394,664 - (651,765) - 206,338

EBIT (7,725,956) 21,082,137 (2,343,153) (4,017,775) 118,372 (5,489,523) 78,493 402,486 (1,977,551) 2,227 (6,848,757) (7,704) (6,726,704) Gains and (losses) in associates and joint ventures - - - - - - - - (3,257) - (2,211,230) - (2,214,487)Operating profit (before finance cost and taxation) (7,725,956) 21,082,137 (2,343,153) (4,017,775) 118,372 (5,489,523) 78,493 402,486 (1,980,808) 2,227 (9,059,987) (7,704) (8,941,191) External net finance costs (16,139,008) (285,023) (1,576,181) (745,665) 26,945 (209,375) (44,604) (49,242) (230,484) 32,388 (2,484,056) - (21,704,305) Inter-segmental net finance costs 1,104,838 - - - - (1,129,809) - - (1,952,935) - 1,977,906 - - Total net finance costs (15,034,170) (285,023) (1,576,181) (745,665) 26,945 (1,339,184) (44,604) (49,242) (2,183,419) 32,388 (506,150) - (21,704,305) Profit before taxation (22,760,126) 20,797,114 (3,919,334) (4,763,440) 145,317 (6,828,707) 33,889 353,244 (4,164,227) 34,615 (9,566,137) (7,704) (30,645,496) Corporate income tax 3,326,924 (3,147,575) 889,859 (175,883) (9,529) (221,713) - (108,758) 827,414 (10,345) 138,559 - 1,508,953 Consolidated net income for the year (19,433,202) 17,649,539 (3,029,475) (4,939,323) 135,788 (7,050,420) 33,889 244,486 (3,336,813) 24,270 (9,427,578) (7,704) (29,136,543)Consolidated net income for the year attributable to: Company’s equity holders (19,615,501) 9,010,090 (2,990,646) (2,519,055) 135,788 (6,870,376) 17,301 241,119 (3,174,127) 15,168 (9,139,505) (7,704) (34,897,448) Minority interests 182,299 8,639,449 (38,829) (2,420,268) - (180,044) 16,588 3,367 (162,686) 9,102 (288,073) - 5,760,905 OTHER INFORMATION Goodwill 84,305,590 - 1,624,249 - - 7,409,634 - - - - 21,627,152 - 114,966,625 Financial investments - equity method - - 2,211 - - 766,120 - - 381,825 - 32,258,222 - 33,408,378 Other segment assets 198,413,220 140,426,839 130,452,078 21,767,557 2,208,194 44,940,940 8,145,497 6,260,837 46,006,159 1,461,874 79,239,140 - 679,322,335 Consolidated total assets 282,718,810 140,426,839 132,078,538 21,767,557 2,208,194 53,116,694 8,145,497 6,260,837 46,387,984 1,461,874 133,124,514 - 827,697,338 Segment liabilities 301,965,646 32,511,014 63,233,198 9,997,266 49,827 12,530,579 3,842,867 2,273,268 14,400,739 48,400 71,618,066 - 512,470,870 Fixed capital expenditure 13,195,758 9,382,423 7,642,649 1,931,165 2,825 630,631 297,129 191,004 465,959 54,893 572,102 - 34,366,538

67

31 DECEMBER 2013 CEMENT CONCRETE AGGREGATES CAPE CAPE OTHER NOT Amounts in Euro PORTUGAL LEBANON TUNISIA ANGOLA VERDE PORTUGAL LEBANON TUNISIA PORTUGAL VERDE ALLOCATED ELIMINATIONS CONSOLIDATED Revenue External revenue 161,367,949 81,302,932 59,332,254 23,869,560 4,749,460 40,829,862 9,112,591 7,866,267 7,626,997 616,975 14,850,594 - 411,525,441 Inter-segmental revenue 42,373,278 3,371,481 2,707,706 - 100,489 172,308 - - 4,416,590 - 11,260,186 (64,402,038) - Total sales and services 203,741,227 84,674,413 62,039,960 23,869,560 4,849,949 41,002,170 9,112,591 7,866,267 12,043,587 616,975 26,110,780 (64,402,038) 411,525,441

EBITDA 27,514,063 30,536,137 6,603,314 (1,050,390) 125,865 (3,365,632) 765,066 873,884 (404,050) 68,394 (1,624,604) (7,704) 60,034,343 Depreciation and amortisation (costs)/ reversals (30,407,318) (8,892,765) (9,235,536) (1,754,601) (7,407) (2,126,884) (662,747) (465,774) (2,144,655) (66,167) (2,672,408) - (58,436,262) Government grants 7,771,522 - 357,138 - - - - 1,832 201 - 95,426 - 8,226,119 Gains /(losses) on disposal of non-current assets 134,572 (28,361) 4,593 - (86) 338,794 (23,651) - 179,956 - 9,431 - 615,248 Provisions ((increases)/ decreases) 281,394 (532,874) (72,662) (10,463) - (1,401,469) (175) (7,456) (3,667) - (2,004,837) - (3,752,209) Impairment of non depreciable/ amortisable investments ((losses)/ reversals) (13,620,281) - - - - - - - - - - - (13,620,281) Impairment of depreciable/amortisable assets ((losses)/ reversals) 600,092 - - (1,202,321) - 1,065,668 - - 394,664 - (651,765) - 206,338

EBIT (7,725,956) 21,082,137 (2,343,153) (4,017,775) 118,372 (5,489,523) 78,493 402,486 (1,977,551) 2,227 (6,848,757) (7,704) (6,726,704) Gains and (losses) in associates and joint ventures - - - - - - - - (3,257) - (2,211,230) - (2,214,487)Operating profit (before finance cost and taxation) (7,725,956) 21,082,137 (2,343,153) (4,017,775) 118,372 (5,489,523) 78,493 402,486 (1,980,808) 2,227 (9,059,987) (7,704) (8,941,191) External net finance costs (16,139,008) (285,023) (1,576,181) (745,665) 26,945 (209,375) (44,604) (49,242) (230,484) 32,388 (2,484,056) - (21,704,305) Inter-segmental net finance costs 1,104,838 - - - - (1,129,809) - - (1,952,935) - 1,977,906 - - Total net finance costs (15,034,170) (285,023) (1,576,181) (745,665) 26,945 (1,339,184) (44,604) (49,242) (2,183,419) 32,388 (506,150) - (21,704,305) Profit before taxation (22,760,126) 20,797,114 (3,919,334) (4,763,440) 145,317 (6,828,707) 33,889 353,244 (4,164,227) 34,615 (9,566,137) (7,704) (30,645,496) Corporate income tax 3,326,924 (3,147,575) 889,859 (175,883) (9,529) (221,713) - (108,758) 827,414 (10,345) 138,559 - 1,508,953 Consolidated net income for the year (19,433,202) 17,649,539 (3,029,475) (4,939,323) 135,788 (7,050,420) 33,889 244,486 (3,336,813) 24,270 (9,427,578) (7,704) (29,136,543)Consolidated net income for the year attributable to: Company’s equity holders (19,615,501) 9,010,090 (2,990,646) (2,519,055) 135,788 (6,870,376) 17,301 241,119 (3,174,127) 15,168 (9,139,505) (7,704) (34,897,448) Minority interests 182,299 8,639,449 (38,829) (2,420,268) - (180,044) 16,588 3,367 (162,686) 9,102 (288,073) - 5,760,905 OTHER INFORMATION Goodwill 84,305,590 - 1,624,249 - - 7,409,634 - - - - 21,627,152 - 114,966,625 Financial investments - equity method - - 2,211 - - 766,120 - - 381,825 - 32,258,222 - 33,408,378 Other segment assets 198,413,220 140,426,839 130,452,078 21,767,557 2,208,194 44,940,940 8,145,497 6,260,837 46,006,159 1,461,874 79,239,140 - 679,322,335 Consolidated total assets 282,718,810 140,426,839 132,078,538 21,767,557 2,208,194 53,116,694 8,145,497 6,260,837 46,387,984 1,461,874 133,124,514 - 827,697,338 Segment liabilities 301,965,646 32,511,014 63,233,198 9,997,266 49,827 12,530,579 3,842,867 2,273,268 14,400,739 48,400 71,618,066 - 512,470,870 Fixed capital expenditure 13,195,758 9,382,423 7,642,649 1,931,165 2,825 630,631 297,129 191,004 465,959 54,893 572,102 - 34,366,538


31 DECEMBER 2012 CEMENT CONCRETE AGGREGATES CAPE CAPE OTHER NOT Amounts in Euro PORTUGAL LEBANON TUNISIA ANGOLA VERDE PORTUGAL LEBANON TUNISIA PORTUGAL VERDE ALLOCATED ELIMINATIONS CONSOLIDATED Revenue External revenue 177,112,604 79,853,531 59,119,254 28,530,608 4,917,773 58,781,398 8,175,021 7,966,323 8,699,707 845,361 16,231,032 - 450,232,612 Inter-segmental revenue 49,468,875 3,130,295 2,794,672 - 129,494 238,324 - - 4,693,050 - 8,616,686 (69,071,396) - Total sales and services 226,581,479 82,983,826 61,913,926 28,530,608 5,047,267 59,019,722 8,175,021 7,966,323 13,392,757 845,361 24,847,718 (69,071,396) 450,232,612 EBITDA 43,742,317 22,027,018 8,137,720 2,477,623 (105,785) (2,398,668) 449,406 818,744 (1,902,152) 171,724 (2,660,221) (7,453) 70,750,273 Depreciation and amortisation (costs)/ reversals (41,596,079) (6,874,154) (8,941,750) (2,069,015) (14,175) (2,065,483) (684,104) (521,379) (3,128,034) (76,406) (3,254,595) - (69,225,174) Government grants 16,769,975 - 384,033 - - - - 3,407 201 - 109,265 - 17,266,881 Gains /(losses) on disposal of non-current assets (9,276,737) (101) 2,470 19,435 1,110 8,223,891 9,688 7,476 (8,378,935) 13,597 (703,970) - (10,082,076) Provisions ((increases)/ decreases) (2,690,382) (1,037,906) (130,214) - - 2,501 (47,916) - (10,415) - 606,726 - (3,307,606) Impairment of non depreciable/amortisable investments ((losses)/ reversals) (2,097,255) - - - - - - - (600,811) - (4,004,888) - (6,702,954) Impairment of depreciable/amortisable assets ((losses)/ reversals) 226,562 - - - - (11,689,483) - - (513,311) - (3,838,187) - (15,814,419) EBIT 5,078,401 14,114,857 (547,741) 428,043 (118,850) (7,927,242) (272,926) 308,248 (14,533,457) 108,915 (13,745,870) (7,453) (17,115,075) Gains and (losses) in associates and joint ventures (80,453) - - - - 2 - - (4,288) - 79,555 - (5,184)

Operating profit (before finance cost and taxation) 4,997,948 14,114,857 (547,741) 428,043 (118,850) (7,927,240) (272,926) 308,248 (14,537,745) 108,915 (13,666,315) (7,453) (17,120,259) External net finance costs (12,612,118) (809,266) (845,855) (275,466) 8,244 (8,770) (41,770) (53,499) (168,749) 30,878 2,031,772 - (12,744,599) Inter-segmental net finance costs (10,616,762) - - - - (1,340,600) - - (2,459,513) - 14,416,875 - - Total net finance costs (23,228,880) (809,266) (845,855) (275,466) 8,244 (1,349,370) (41,770) (53,499) (2,628,262) 30,878 16,448,647 - (12,744,599) Profit before taxation (18,230,932) 13,305,591 (1,393,596) 152,577 (110,606) (9,276,610) (314,696) 254,749 (17,166,007) 139,793 2,782,332 (7,453) (29,864,858) Corporate income tax 1,589,455 (2,040,974) 603,174 - (18) 877,444 - (76,921) (598,359) (36,274) (4,214,193) - (3,896,666) Consolidated net income for the year (16,641,477) 11,264,617 (790,422) 152,577 (110,624) (8,399,166) (314,696) 177,828 (17,764,366) 103,519 (1,431,861) (7,453) (33,761,524)Consolidated net income for the year attributable to: Company’s equity holders (16,757,065) 5,750,587 (780,291) 77,814 (110,624) (8,365,115) (155,609) 175,433 (17,645,238) 64,700 (706,282) (7,453) (38,459,143) Minority interests 115,588 5,514,030 (10,131) 74,763 - (34,051) (159,087) 2,395 (119,128) 38,819 (725,579) - 4,697,619

OTHER INFORMATION Goodwill 100,870,106 - 1,794,625 - - 7,409,634 - - - - 22,137,329 - 132,211,694 Financial investments - equity method - - 2,443 - - 766,120 - - 385,082 - 3,862,897 - 5,016,542 Financial investments - other methods - - - - - - - - - 24,413,353 - 24,413,353 Other segment assets 266,661,823 130,961,326 144,566,005 23,338,009 2,413,954 49,820,154 7,874,416 7,216,198 47,154,064 1,437,479 63,643,840 - 745,087,268Consolidated total assets 367,531,929 130,961,326 146,363,073 23,338,009 2,413,954 57,995,908 7,874,416 7,216,198 47,539,146 1,437,479 114,057,419 - 906,728,857Segment liabilities 334,774,562 28,862,327 66,992,259 3,219,916 57,640 9,990,506 3,585,835 2,618,226 12,972,370 63,792 71,851,986 - 534,989,419Fixed capital expenditure 12,019,826 9,276,649 6,673,721 1,302,453 668 285,453 281,377 217,831 663,133 66,981 639,512 - 31,427,604

69

31 DECEMBER 2012 CEMENT CONCRETE AGGREGATES CAPE CAPE OTHER NOT Amounts in Euro PORTUGAL LEBANON TUNISIA ANGOLA VERDE PORTUGAL LEBANON TUNISIA PORTUGAL VERDE ALLOCATED ELIMINATIONS CONSOLIDATED Revenue External revenue 177,112,604 79,853,531 59,119,254 28,530,608 4,917,773 58,781,398 8,175,021 7,966,323 8,699,707 845,361 16,231,032 - 450,232,612 Inter-segmental revenue 49,468,875 3,130,295 2,794,672 - 129,494 238,324 - - 4,693,050 - 8,616,686 (69,071,396) - Total sales and services 226,581,479 82,983,826 61,913,926 28,530,608 5,047,267 59,019,722 8,175,021 7,966,323 13,392,757 845,361 24,847,718 (69,071,396) 450,232,612 EBITDA 43,742,317 22,027,018 8,137,720 2,477,623 (105,785) (2,398,668) 449,406 818,744 (1,902,152) 171,724 (2,660,221) (7,453) 70,750,273 Depreciation and amortisation (costs)/ reversals (41,596,079) (6,874,154) (8,941,750) (2,069,015) (14,175) (2,065,483) (684,104) (521,379) (3,128,034) (76,406) (3,254,595) - (69,225,174) Government grants 16,769,975 - 384,033 - - - - 3,407 201 - 109,265 - 17,266,881 Gains /(losses) on disposal of non-current assets (9,276,737) (101) 2,470 19,435 1,110 8,223,891 9,688 7,476 (8,378,935) 13,597 (703,970) - (10,082,076) Provisions ((increases)/ decreases) (2,690,382) (1,037,906) (130,214) - - 2,501 (47,916) - (10,415) - 606,726 - (3,307,606) Impairment of non depreciable/amortisable investments ((losses)/ reversals) (2,097,255) - - - - - - - (600,811) - (4,004,888) - (6,702,954) Impairment of depreciable/amortisable assets ((losses)/ reversals) 226,562 - - - - (11,689,483) - - (513,311) - (3,838,187) - (15,814,419) EBIT 5,078,401 14,114,857 (547,741) 428,043 (118,850) (7,927,242) (272,926) 308,248 (14,533,457) 108,915 (13,745,870) (7,453) (17,115,075) Gains and (losses) in associates and joint ventures (80,453) - - - - 2 - - (4,288) - 79,555 - (5,184)

Operating profit (before finance cost and taxation) 4,997,948 14,114,857 (547,741) 428,043 (118,850) (7,927,240) (272,926) 308,248 (14,537,745) 108,915 (13,666,315) (7,453) (17,120,259) External net finance costs (12,612,118) (809,266) (845,855) (275,466) 8,244 (8,770) (41,770) (53,499) (168,749) 30,878 2,031,772 - (12,744,599) Inter-segmental net finance costs (10,616,762) - - - - (1,340,600) - - (2,459,513) - 14,416,875 - - Total net finance costs (23,228,880) (809,266) (845,855) (275,466) 8,244 (1,349,370) (41,770) (53,499) (2,628,262) 30,878 16,448,647 - (12,744,599) Profit before taxation (18,230,932) 13,305,591 (1,393,596) 152,577 (110,606) (9,276,610) (314,696) 254,749 (17,166,007) 139,793 2,782,332 (7,453) (29,864,858) Corporate income tax 1,589,455 (2,040,974) 603,174 - (18) 877,444 - (76,921) (598,359) (36,274) (4,214,193) - (3,896,666) Consolidated net income for the year (16,641,477) 11,264,617 (790,422) 152,577 (110,624) (8,399,166) (314,696) 177,828 (17,764,366) 103,519 (1,431,861) (7,453) (33,761,524)Consolidated net income for the year attributable to: Company’s equity holders (16,757,065) 5,750,587 (780,291) 77,814 (110,624) (8,365,115) (155,609) 175,433 (17,645,238) 64,700 (706,282) (7,453) (38,459,143) Minority interests 115,588 5,514,030 (10,131) 74,763 - (34,051) (159,087) 2,395 (119,128) 38,819 (725,579) - 4,697,619

OTHER INFORMATION Goodwill 100,870,106 - 1,794,625 - - 7,409,634 - - - - 22,137,329 - 132,211,694 Financial investments - equity method - - 2,443 - - 766,120 - - 385,082 - 3,862,897 - 5,016,542 Financial investments - other methods - - - - - - - - - 24,413,353 - 24,413,353 Other segment assets 266,661,823 130,961,326 144,566,005 23,338,009 2,413,954 49,820,154 7,874,416 7,216,198 47,154,064 1,437,479 63,643,840 - 745,087,268Consolidated total assets 367,531,929 130,961,326 146,363,073 23,338,009 2,413,954 57,995,908 7,874,416 7,216,198 47,539,146 1,437,479 114,057,419 - 906,728,857Segment liabilities 334,774,562 28,862,327 66,992,259 3,219,916 57,640 9,990,506 3,585,835 2,618,226 12,972,370 63,792 71,851,986 - 534,989,419Fixed capital expenditure 12,019,826 9,276,649 6,673,721 1,302,453 668 285,453 281,377 217,831 663,133 66,981 639,512 - 31,427,604


_5.2 REVENUE BY SEGMENT

Revenue (net of discounts) by geogra-phic destination for the year ended 31 December 2013 and 2012 is presented as follows:

31 DECEMBER 2013 OTHER Amounts in Euro CEMENT CONCRETE AGGREGATES NOT ALLOCATED CONSOLIDATED

Portugal 90,308,459 40,829,862 7,626,997 12,356,305 151,121,623Lebanon 81,302,932 9,112,591 - - 90,415,523Tunisia 53,988,906 7,866,267 - - 61,855,173Angola 23,979,788 - 264,236 24,244,024Cape Verde 4,749,460 - 616,975 51,954 5,418,389Spain 1,031,030 - - 811,128 1,842,158Algeria 26,710,514 - - - 26,710,514Guinea-Bissau 3,993,502 - - - 3,993,502Equatorial Guinea 11,493,422 - - - 11,493,422Sao Tome and Principe 1,421,695 - - - 1,421,695Morocco 2,451,201 - - - 2,451,201Brazil 11,617,913 - - - 11,617,913Colombia 2,065,279 - - - 2,065,279Venezuela 1,677,686 - - - 1,677,686Dominican Republic 3,171,100 - - - 3,171,100Sierra Leone 1,627,107 - - - 1,627,107Other 9,032,161 - - 1,366,971 10,399,132 330,622,155 57,808,720 8,243,972 14,850,594 411,525,441

71

31 DECEMBER 2012 OTHER Amounts in Euro CEMENT CONCRETE AGGREGATES NOT ALLOCATED CONSOLIDATED

Portugal 110,369,223 58,781,398 8,699,707 13,273,146 191,123,474Lebanon 79,853,531 8,175,021 - - 88,028,552Tunisia 57,064,045 7,966,323 - - 65,030,368Angola 28,766,805 - - 129,929 28,896,734Cape Verde 5,181,323 - 845,361 - 6,026,684Spain 970,725 - - 904,702 1,875,427Algeria 22,188,573 - - - 22,188,573Guinea-Bissau 2,752,805 - - - 2,752,805Equatorial Guinea 10,805,332 - - - 10,805,332Sao Tome and Principe 839,028 - - - 839,028Morocco 2,614,546 - - - 2,614,546Brazil 13,097,444 - - - 13,097,444Venezuela 269,010 - - - 269,010Dominican Republic 1,873,942 - - - 1,873,942Sierra Leone 1,384,657 - - - 1,384,657Other 11,502,781 - - 1,923,255 13,426,036 349,533,770 74,922,742 9,545,068 16,231,032 450,232,612


_6. INVESTMENTS IN SUBSIDIARIES

_6.1 SUBSIDIARIES

At 31 December 2013 and 2012, the Group had the following subsidiaries:

31/12/13 31/12/12 % OF CAPITAL HELD BY SECIL % OF CAPITAL HELD BY SECIL COMPANY NAME HEAD OFFICE DIRECT INDIRECT TOTAL DIRECT INDIRECT TOTAL

Parcim Investments, B.V. (Note 9) Amesterdam - - - 100.00 - 100.00 Secilpar, Unipessoal, Lda. Lisbon 100.00 - 100.00 100.00 - 100.00 Somera Trading Inc. Panama - 100.00 100.00 - 100.00 100.00 Hewbol, S.G.P.S., Lda. Funchal - 100.00 100.00 - 100.00 100.00 Secil Cabo Verde Comércio e Serviços, Lda. Praia - 100.00 100.00 - 100.00 100.00 ICV - Inertes de Cabo Verde, Lda. Praia 37.50 25.00 62.50 37.50 25.00 62.50 Florimar- Gestão e financial, S.G.P.S., Lda. Funchal 100.00 - 100.00 100.00 - 100.00 Seciment Investments, B.V. Amesterdam 100.00 - 100.00 100.00 - 100.00 I3 financial e Serviços, Ltda. Rio de Janeiro - 99.97 99.97 - 99.97 99.97 Serife - Sociedade de Estudos e Realizações Industriais e de Fornecimento de Equipamento, Lda. Lisbon 100.00 - 100.00 100.00 - 100.00 Silonor, S.A. Dunkerque 100.00 - 100.00 100.00 - 100.00 Société des Ciments de Gabés Tunis 98.72 - 98.72 98.72 - 98.72 Sud- Béton- Société de Fabrication de Béton du Sud Tunis - 98.72 98.72 - 98.72 98.72 Zarzis Béton Tunis - 98.72 98.72 - 98.72 98.72 Secil Angola, SARL Luanda 100.00 - 100.00 100.00 - 100.00 Secil - Companhia de Cimento do Lobito, S.A. Lobito - 51.00 51.00 - 51.00 51.00 Secil, Betões e Inertes, S.G.P.S., S.A. Setúbal 100.00 - 100.00 100.00 - 100.00 Unibetão - Indústrias de Betão Preparado, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Britobetão - Central de Betão, Lda. Évora - 91.00 91.00 - 91.00 91.00 Eurobetão - Betão Pronto, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Sicobetão - Fabricação de Betão, S.A. (Note 9) Lisbon - - - - 100.00 100.00 Secil Britas, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Quimipedra - Secil Britas, Calcários e Derivados, Lda. (Note 9) Lisbon - - - - 100.00 100.00 Colegra - Exploração de Pedreiras, S.A. (Note 9) Lisbon - - - - 100.00 100.00 Lusoinertes, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Secil Martingança - Aglomerantes e Novos Materiais para a Construção, S.A. Leiria 51.19 48.81 100.00 51.19 48.81 100.00 IRP - Industria de Rebocos de Portugal, S.A. Santarém - 75.00 75.00 - 75.00 75.00 Ciminpart - Investimentos e financial, S.G.P.S., S.A. Lisbon 100.00 - 100.00 100.00 - 100.00 ALLMA - Microalgas, Lda. (Note 9) Leiria - 70.00 70.00 - - - Argibetão - Sociedade de Novos Produtos de Argila e Betão, S.A. Lisbon - 90.87 90.87 - 90.87 90.87 Cimentos Costa Verde - Comércio de Cimentos, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Solenreco-Produção e Comercialização de Combustíveis, Lda. Oporto - 98.00 98.00 - 98.00 98.00 Valcem - Produtos Cimentícios, Lda. (Note 9) Setúbal - - - 50.00 50.00 100.00 Prescor Produção de Escórias Moídas, Lda. Lisbon - 100.00 100.00 - 100.00 100.00 CMP - Cimentos Maceira e Pataias, S.A. Leiria 100.00 - 100.00 100.00 - 100.00 Ciments de Sibline, S.A.L. Beirut 28.64 22.41 51.05 28.64 22.41 51.05 Soime, S.A.L. Beirut - 51.05 51.05 - 51.05 51.05 Cimentos Madeira, Lda. Funchal 57.14 - 57.14 57.14 - 57.14 Beto Madeira - Betões e Britas da Madeira, S.A. Funchal - 57.14 57.14 - 57.14 57.14 Promadeira - Sociedade Técnica de Construção da Ilha da Madeira, Lda. Funchal - 57.14 57.14 - 57.14 57.14 Brimade - Sociedade de Britas da Madeira, S.A. Funchal - 57.14 57.14 - 57.14 57.14 Madebritas - Sociedade de Britas da Madeira, Lda. (a) Funchal - 29.14 29.14 - 29.14 29.14 Pedra Regional - Industria Transformadora de Rochas Ornamentais, S.A. (a) Funchal - 29.14 29.14 - 29.14 29.14 Reficomb- Refinação e Comercialização de Combustíveis Derivados de Resíduos, S.A. Setúbal 100.00 - 100.00 100.00 - 100.00 Uniconcreto - Betão Pronto, S.A. Lisbon 100.00 - 100.00 100.00 - 100.00

(a) Companies held in 51% by Brimade, S.A. and controlled by the Group

73

31/12/13 31/12/12 % OF CAPITAL HELD BY SECIL % OF CAPITAL HELD BY SECIL COMPANY NAME HEAD OFFICE DIRECT INDIRECT TOTAL DIRECT INDIRECT TOTAL

Parcim Investments, B.V. (Note 9) Amesterdam - - - 100.00 - 100.00 Secilpar, Unipessoal, Lda. Lisbon 100.00 - 100.00 100.00 - 100.00 Somera Trading Inc. Panama - 100.00 100.00 - 100.00 100.00 Hewbol, S.G.P.S., Lda. Funchal - 100.00 100.00 - 100.00 100.00 Secil Cabo Verde Comércio e Serviços, Lda. Praia - 100.00 100.00 - 100.00 100.00 ICV - Inertes de Cabo Verde, Lda. Praia 37.50 25.00 62.50 37.50 25.00 62.50 Florimar- Gestão e financial, S.G.P.S., Lda. Funchal 100.00 - 100.00 100.00 - 100.00 Seciment Investments, B.V. Amesterdam 100.00 - 100.00 100.00 - 100.00 I3 financial e Serviços, Ltda. Rio de Janeiro - 99.97 99.97 - 99.97 99.97 Serife - Sociedade de Estudos e Realizações Industriais e de Fornecimento de Equipamento, Lda. Lisbon 100.00 - 100.00 100.00 - 100.00 Silonor, S.A. Dunkerque 100.00 - 100.00 100.00 - 100.00 Société des Ciments de Gabés Tunis 98.72 - 98.72 98.72 - 98.72 Sud- Béton- Société de Fabrication de Béton du Sud Tunis - 98.72 98.72 - 98.72 98.72 Zarzis Béton Tunis - 98.72 98.72 - 98.72 98.72 Secil Angola, SARL Luanda 100.00 - 100.00 100.00 - 100.00 Secil - Companhia de Cimento do Lobito, S.A. Lobito - 51.00 51.00 - 51.00 51.00 Secil, Betões e Inertes, S.G.P.S., S.A. Setúbal 100.00 - 100.00 100.00 - 100.00 Unibetão - Indústrias de Betão Preparado, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Britobetão - Central de Betão, Lda. Évora - 91.00 91.00 - 91.00 91.00 Eurobetão - Betão Pronto, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Sicobetão - Fabricação de Betão, S.A. (Note 9) Lisbon - - - - 100.00 100.00 Secil Britas, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Quimipedra - Secil Britas, Calcários e Derivados, Lda. (Note 9) Lisbon - - - - 100.00 100.00 Colegra - Exploração de Pedreiras, S.A. (Note 9) Lisbon - - - - 100.00 100.00 Lusoinertes, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Secil Martingança - Aglomerantes e Novos Materiais para a Construção, S.A. Leiria 51.19 48.81 100.00 51.19 48.81 100.00 IRP - Industria de Rebocos de Portugal, S.A. Santarém - 75.00 75.00 - 75.00 75.00 Ciminpart - Investimentos e financial, S.G.P.S., S.A. Lisbon 100.00 - 100.00 100.00 - 100.00 ALLMA - Microalgas, Lda. (Note 9) Leiria - 70.00 70.00 - - - Argibetão - Sociedade de Novos Produtos de Argila e Betão, S.A. Lisbon - 90.87 90.87 - 90.87 90.87 Cimentos Costa Verde - Comércio de Cimentos, S.A. Lisbon - 100.00 100.00 - 100.00 100.00 Solenreco-Produção e Comercialização de Combustíveis, Lda. Oporto - 98.00 98.00 - 98.00 98.00 Valcem - Produtos Cimentícios, Lda. (Note 9) Setúbal - - - 50.00 50.00 100.00 Prescor Produção de Escórias Moídas, Lda. Lisbon - 100.00 100.00 - 100.00 100.00 CMP - Cimentos Maceira e Pataias, S.A. Leiria 100.00 - 100.00 100.00 - 100.00 Ciments de Sibline, S.A.L. Beirut 28.64 22.41 51.05 28.64 22.41 51.05 Soime, S.A.L. Beirut - 51.05 51.05 - 51.05 51.05 Cimentos Madeira, Lda. Funchal 57.14 - 57.14 57.14 - 57.14 Beto Madeira - Betões e Britas da Madeira, S.A. Funchal - 57.14 57.14 - 57.14 57.14 Promadeira - Sociedade Técnica de Construção da Ilha da Madeira, Lda. Funchal - 57.14 57.14 - 57.14 57.14 Brimade - Sociedade de Britas da Madeira, S.A. Funchal - 57.14 57.14 - 57.14 57.14 Madebritas - Sociedade de Britas da Madeira, Lda. (a) Funchal - 29.14 29.14 - 29.14 29.14 Pedra Regional - Industria Transformadora de Rochas Ornamentais, S.A. (a) Funchal - 29.14 29.14 - 29.14 29.14 Reficomb- Refinação e Comercialização de Combustíveis Derivados de Resíduos, S.A. Setúbal 100.00 - 100.00 100.00 - 100.00 Uniconcreto - Betão Pronto, S.A. Lisbon 100.00 - 100.00 100.00 - 100.00

(a) Companies held in 51% by Brimade, S.A. and controlled by the Group


_6.2 MINORITY INTERESTS

Minority interests at 31 December 2013 and 2012 included in equity are as follows:

Minority interests at 31 December 2013 and 2012 reported, in the con-solidated income statement, are as follows:

NET PROFIT NET PROFIT Amounts in Euro 31/12/13 31/12/12

Britobetão - Central de Betão, Lda. (18,323) (3,374)Société des Ciments de Gabés and subsidiaries (35,463) (7,735)Secil Martingança, S.A. - (36,405)IRP - Industria de Rebocos de Portugal, S.A. 57,173 26,050Secil - Companhia de Cimento do Lobito, S.A. (2,420,268) 74,763Ciments de Sibline, S.A.L and subsidiaries 8,656,037 5,354,943Cimentos Madeira, Lda. and subsidiaries (142,680) (90,115)Other (335,571) (620,508) 5,760,905 4,697,619

MINORITY INTERESTS MINORITY INTERESTS Amounts in Euro 31/12/13 31/12/12

Britobetão - Central de Betão, Lda. 64,731 83,053Société des Ciments de Gabès and subsidiaries 921,417 1,068,243IRP - Industria de Rebocos de Portugal, S.A. 421,258 414,085Secil - Companhia de Cimento do Lobito, S.A. 5,235,200 8,106,185Ciments de Sibline, S.A.L and subsidiaries 54,798,441 50,798,376Cimentos Madeira, Lda. and subsidiaries 5,353,225 5,476,149Other (601,852) (267,519) 66,192,420 65,678,572

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The movements in minority interests for the years ended 31 December 2013 and 2012 were as follows:

Amounts in Euro 31/12/13 31/12/12

Opening balance 65,678,572 67,816,941 Change in consolidation scope: IRP - Industria de Rebocos de Portugal, S.A. Transfer financial liability for the 30% stake - 766,318 Acquisition by the group of 5% of share capital - (228,282) Secil Martingança - Aglomerantes e Novos Materiais para a Construção, S.A. Acquisition by the group of the remaining 3% of the share capital - (258,010) Premix Liban, S.A.L Liquidation - 9,878 ALLMA - Microalgas, Lda. Constitution (Note 9) 1,500 - Reimbursement of supplementary capital in subsidiaries - (44,892) Translation of foreign subsidiaries’ financial statements (2,902,672) (1,654,990) Dividends (2,352,881) (5,414,672) Actuarial assessment variances and changes in assumptions (10,249) 18,076 Emission rights - 1,635 Government grants 17,245 (31,049) Net income for the year 5,760,905 4,697,619 Closing balance 66,192,420 65,678,572


_7. INTERESTS IN JOINT CONTROLLED ENTITIES

At 31 December 2013 and 2012, the Group presented the following interests in joint controlled entities:

_8. INTERESTS IN ASSOCIATES AND OTHER FINANCIAL INVESTMENTS

At 31 December 2013 and 2012, the Group had the following interests in associates:

31/12/13 31/12/12 % OF CAPITAL HELD BY SECIL % OF CAPITAL HELD BY SECILCOMPANY NAME HEAD OFFICE DIRECT INDIRECT TOTAL DIRECT INDIRECT TOTAL Secil Unicon - S.G.P.S., Lda. Lisbon 50.00 - 50.00 50.00 - 50.00 Secil Prébetão, S.A. Montijo - 39.80 39.80 - 39.80 39.80

31/12/13 31/12/12 HEAD OFFICE INDIRECT % OF CAPITAL HELD INDIRECT % OF CAPITAL HELD

Financial investments - equity method: Setefrete, SGPS, S.A. Setúbal 25.00 25.00 MC - Matériaux de Construction Gabès 49.36 49.36 J.M. Henriques, Lda. Câmara de Lobos 28.57 28.57 Ave-Gestão Ambiental e Valorização Energética, S.A. Lisbon 35.00 35.00 Supremo Cimentos, S.A. Pomerode 15.00 - NSOSPE - Empreendimentos e financial, S.A. Rio de Janeiro 45.58 - Sociedade de Inertes, Lda. Nacala - Porto 49.00 - Financial investments - other methods: Supremo Cimentos, S.A. Pomerode - 13.81

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31/12/13 31/12/12 % OF CAPITAL HELD BY SECIL % OF CAPITAL HELD BY SECILCOMPANY NAME HEAD OFFICE DIRECT INDIRECT TOTAL DIRECT INDIRECT TOTAL Secil Unicon - S.G.P.S., Lda. Lisbon 50.00 - 50.00 50.00 - 50.00 Secil Prébetão, S.A. Montijo - 39.80 39.80 - 39.80 39.80

31/12/13 31/12/12 HEAD OFFICE INDIRECT % OF CAPITAL HELD INDIRECT % OF CAPITAL HELD

Financial investments - equity method: Setefrete, SGPS, S.A. Setúbal 25.00 25.00 MC - Matériaux de Construction Gabès 49.36 49.36 J.M. Henriques, Lda. Câmara de Lobos 28.57 28.57 Ave-Gestão Ambiental e Valorização Energética, S.A. Lisbon 35.00 35.00 Supremo Cimentos, S.A. Pomerode 15.00 - NSOSPE - Empreendimentos e financial, S.A. Rio de Janeiro 45.58 - Sociedade de Inertes, Lda. Nacala - Porto 49.00 - Financial investments - other methods: Supremo Cimentos, S.A. Pomerode - 13.81


to Euro 7,206,924 (Note 15), corres-ponding to 45.58% share capital as at 31 December 2013.

> Increased the share capital held in Supremo Cimentos, S.A. from 13.81% to 15%, through an investment amoun-ting to Euro 5,623,327 (Note 15). > On 14 October 2013 the subsi-diary Florimar-Gestão e Participações,

S.G.P.S., Lda., made an investment of 648 Euros (Note 15) in the cons-titution of the Sociedade de Inertes, Lda., which represented a 49% inte-rest in the associate share capital.

At 31 December 2013 and 2012, the associates and other financial in-vestments presented the following amounts in their financial state-ments:

During the current period the subsi-diary Ciminpart - Investimentos e Par-ticipações, SGPS, S.A. (“Ciminpart”) made the following investments in as-sociates:

> At 31 May 2013 acquired 17.5% inte-rest in NSOSPE -. Empreendimentos e Participações, S.A. for Euro 2,771,380 (Note 15). Afterwards increased its in-vestment in this associate, amounting

31 DECEMBER 2013 TOTAL TOTAL SHAREHOLDER’S NETAmounts in Euro ASSETS LIABILITIES EQUITY REVENUE INCOME

MC- Materiaux de Construction a) 699,140 572,858 126,282 4,753,814 25,693 Inertogrande Central de Betão, Lda. c) J.M.J. - Henriques, Lda. a) 1,074,797 311,147 763,650 - (6,514)Setefrete, SGPS, S.A. b) 4,731,052 1,969,573 2,761,479 102,813 1,347,994 Ave-Gestão Ambiental e Valorização Energética, S.A. a) 4,087,892 3,695,911 391,981 12,302,485 331,011 Supremo Cimentos S.A a) 120,508,624 26,703,724 93,804,900 49,846,812 (1,088,680)NSOSPE - Empreendimentos e financial, S.A. a) 62,478,338 57,438,441 5,039,897 - (8,984,196)

a) Amounts refer to 31/12/2013 b) Amounts refer to 31/12/2012, adjusted for dividends paid for the period ended on 31/12/2013


Chryso - Aditivos de Portugal, S.A. c) 1,212,556 1,357,654 (145,098) 1,983,158 (201,130)MC- Materiaux de Construction e) 673,045 575,446 97,599 10,434,070 38,593Inertogrande Central de Betão, Lda. e) 1,916,082 1,983,828 (67,746) - (9,060)Viroc Portugal - Indústrias de Madeira e Cimento, S.A. b) 6,450,884 22,869,191 (16,418,307) 3,211,870 (993,294)J.M.J. - Henriques, Lda. e) 1,072,906 302,742 770,164 - (8,575)Setefrete, SGPS, S.A. a) 6,027,305 2,682,391 3,344,914 99,336 683,582Ave-Gestão Ambiental e Valorização Energética, S.A. d) 2,723,523 1,991,905 731,618 8,862,010 670,649Supremo Cimentos S.A e) 119,315,029 33,983,327 85,331,702 44,783,267 (1,581,603)

a) Amounts refer to 31/12/2011, adjusted for dividends paid for the period ended on 31/12/2012 b) Amounts refer to 31/07/2012, reference date for the sale of the associated c) Amounts refer to 31/10/2012, reference date for the sale of the associated d) Amounts refer to 30/11/2012 (latest accounts available) e) Amounts refer to 31/12/2012

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MC- Materiaux de Construction a) 699,140 572,858 126,282 4,753,814 25,693 Inertogrande Central de Betão, Lda. c) J.M.J. - Henriques, Lda. a) 1,074,797 311,147 763,650 - (6,514)Setefrete, SGPS, S.A. b) 4,731,052 1,969,573 2,761,479 102,813 1,347,994 Ave-Gestão Ambiental e Valorização Energética, S.A. a) 4,087,892 3,695,911 391,981 12,302,485 331,011 Supremo Cimentos S.A a) 120,508,624 26,703,724 93,804,900 49,846,812 (1,088,680)NSOSPE - Empreendimentos e financial, S.A. a) 62,478,338 57,438,441 5,039,897 - (8,984,196)

a) Amounts refer to 31/12/2013 b) Amounts refer to 31/12/2012, adjusted for dividends paid for the period ended on 31/12/2013


Chryso - Aditivos de Portugal, S.A. c) 1,212,556 1,357,654 (145,098) 1,983,158 (201,130)MC- Materiaux de Construction e) 673,045 575,446 97,599 10,434,070 38,593Inertogrande Central de Betão, Lda. e) 1,916,082 1,983,828 (67,746) - (9,060)Viroc Portugal - Indústrias de Madeira e Cimento, S.A. b) 6,450,884 22,869,191 (16,418,307) 3,211,870 (993,294)J.M.J. - Henriques, Lda. e) 1,072,906 302,742 770,164 - (8,575)Setefrete, SGPS, S.A. a) 6,027,305 2,682,391 3,344,914 99,336 683,582Ave-Gestão Ambiental e Valorização Energética, S.A. d) 2,723,523 1,991,905 731,618 8,862,010 670,649Supremo Cimentos S.A e) 119,315,029 33,983,327 85,331,702 44,783,267 (1,581,603)

a) Amounts refer to 31/12/2011, adjusted for dividends paid for the period ended on 31/12/2012 b) Amounts refer to 31/07/2012, reference date for the sale of the associated c) Amounts refer to 31/10/2012, reference date for the sale of the associated d) Amounts refer to 30/11/2012 (latest accounts available) e) Amounts refer to 31/12/2012


_9. CHANGES TO THE CONSOLIDATION SCOPE

In 2013, the changes to the consolida-tion scope which impacted the conso-lidated financial statements were the result of acquisitions of subsidiaries detailed as follows:

INCLUSIONS IN THE CONSOLIDATION SCOPE

> ALLMA - Microalgas, Lda. – with head office in Leiria, incorporated on 22 January 2013.

EXCLUSIONS FROM THE CONSOLIDATION SCOPE

> Colegra - Exploração de Pedreiras, S.A.L, liquidated on 17 December 2013;

> Sicobetão - Fabricação de Betão, S.A., merged into Unibetão - Indús-trias de Betão Preparado, S.A. on 30 December 2013;

> Quimipedra - Secil Britas, Calcários e Derivados, Lda., merged into Secil Britas, S.A. on 23 December 2013;

> Valcem - Produtos Cimentícios, Lda. S.A., merged into Ciminpart – Investi-mentos e Participações, SGPS, S.A. on 30 December 2013;

> Parcim Investments, B.V., liquidated on 5 August 2013.

SUBSIDIARIES Amounts in Euro CONSTITUTED Current assets Cash and cash equivalents 5,000Minority interests (Note 6.2) (1,500)Identifiable assets and liabilities at acquisition date 3,500Positive acquisition difference (Note 10) -Gains on financial investments disposal -Business combination 3,500Cash and cash equivalents (5,000)Net assets acquired / integrated (1,500)

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Amounts in Euro PORTUGAL LEBANON TUNISIA OTHER TOTAL Cement 50,647,610 11,432,593 27,324,503 - 89,404,706Concrete 21,336,708 - 1,624,249 - 22,960,957Other 2,480,536 - - 120,426 2,600,962 74,464,854 11,432,593 28,948,752 120,426 114,966,625

_10. GOODWILL

The following movements were regis-tered under the caption “Goodwill” during the years ended 31 December 2013 and 2012:

For purposes of impairment testing, the recoverable amount of each of the CGU’s is determined based on a value-in-use computation, using the discounted cash flow method. The computation is based on historical performance and on projections of bu-

siness expansion with the current pro-duction structure, using the Group’s forecasted 5-year medium-term plan.

As a result of the impairment tests, goodwill impairment losses were booked in the year ended 31 De-

cember 2013 amounting to Euro 13,620,281 (Euro 6,702,954 in 2012) relating to the cash generating units of concrete business segment in Por-tugal (Euro 11,896,000) and cement business segment in Angola (Euros 1,724,281).

Goodwill is allocated to the Group’s cash-generating units (CGU’s), identi-fied according to the country of ope-rations and business segment, as follows:

Amounts in Euro 12/31/13 12/31/12 Gross amount at beginning of the period 217,561,182 226,115,417Accumulated impairments losses (85,349,488) (79,999,736)Net amount at beginning of the period 132,211,694 146,115,681Impairment losses (Note 16) (13,620,281) (6,702,954)Acquisitions: IRP- Industria de Reboco de Portugal, S.A. - 69,888 Secil Martingança, S.A. - 242,420Foreign translation change: Société des Ciments de Gabès (Note 21.5.1) (2,866,217) (1,666,969) Sud-Béton-Société de Fabrication de Béton du Sud (Note 21.5.1) (170,376) (99,090) Ciments de Sibline, S.A.L. (Note 21.5.1) (510,178) (232,264) Secil Angola, SARL (Note 21.5.1) (78,017) (35,520)Transfer to “Other provisions” - (4,146,673)Transfer to “Non-current assets held for sale” - (1,332,825)Closing balance 114,966,625 132,211,694


_11. PROPERTY, PLANT AND EQUIPMENT

Property, Plant and Equipment registe-red the following movements in the ye-ars ended 31 December 2013 and 2012, including accumulated depreciation:

The accumulated impairment losses are detailed as follows:

ACCUMULATED LOSSES FOR ACCUMULATED LOSSES FOR NON-CURRENT ACCUMULATED LOSSES THE YEAR LOSSES THE YEAR TRANSLATION ASSETS HELD LOSSESAmounts in Euro 1/1/12 (NOTE 34) 1/1/13 (NOTE 34) CAMBIAL FOR SALE 31/12/13

Land and natural resources (1,369,751) (3,405,058) (4,774,809) (770,000) - (2,277,432) (7,822,241)Buildings and other improvements (968,670) (3,312,907) (4,281,577) 417,220 - (1,427,993) (5,292,350)Equipment (948,204) (3,212,703) (4,160,907) 1,097,631 - (606,822) (3,670,098)Tangible fixed assets in progress - - - (1,202,321) 76,319 (262,750) (1,388,752) (3,286,625) (9,930,668) (13,217,293) (457,470) 76,319 (4,574,997) (18,173,441)

LAND AND BUILDINGS TANGIBLE NATURAL LANDSCAPE AND OTHER FIXED ASSETS ADVANCE Amounts in Euro RESOURCES REMEDIATION IMPROVEMENTS EQUIPMENT IN PROGRESS PAYMENTS TOTAL

Assets Balance at 1 January 2012 174,502,002 5,093,941 377,485,173 1,268,644,706 45,894,918 3,339,667 1,874,960,407 Acquisitions 167,000 - 2,309,746 4,167,658 23,320,371 1,462,829 31,427,604 Disposals (35,308) - (77,509) (6,229,885) (60,126) - (6,402,828) Adjustments, transfers and write-offs 676,228 9,623,434 32,685,855 (42,630,647) (3,314,161) (2,959,291) Translation adjustment (3,429,111) - (2,391,074) (9,927,395) (1,316,012) 3,540 (17,060,052) Balance at 31 December 2012 171,880,811 5,093,941 386,949,770 1,289,340,939 25,208,504 1,491,875 1,879,965,840 Acquisitions 20,045 - 1,495,769 9,629,101 22,802,798 418,825 34,366,538 Disposals (37,668) - (155,220) (6,439,438) (10,493) (24,609) (6,667,428) Adjustments, transfers and write-offs 116,922 - 8,123,947 25,035,094 (33,952,121) (729,413) (1,405,571) Translation adjustment (6,123,467) - (5,224,453) (20,923,028) (1,086,955) (46,408) (33,404,311) Non-current assets held for sale (Note 20) 2,081,798 - 5,943,197 4,858,959 265,000 - 13,148,954 Balance at 31 December 2013 167,938,441 5,093,941 397,133,010 1,301,501,627 13,226,733 1,110,270 1,886,004,022 Accum. Depreciation and impairment losses Balance at 1 January 2012 (36,663,400) (1,546,644) (291,526,590) (1,108,098,964) - - (1,437,835,598) Depreciation (Note 34) (2,353,835) (115,431) (10,835,521) (39,291,220) - - (52,596,007) Impairment losses (Note 34) (3,405,058) - (3,312,907) (3,212,703) - - (9,930,668) Disposals 6,732 - 80,785 6,169,832 - - 6,257,349 Adjustments, transfers and write-offs (4,982) - (5,130,036) 7,912,927 - - 2,777,909 Translation adjustment 783,967 - 1,215,033 6,471,569 - - 8,470,569 Balance at 31 December 2012 (41,636,576) (1,662,075) (309,509,236) (1,130,048,559) - - (1,482,856,446) Depreciation (Note 34) (2,027,663) (102,472) (9,857,018) (39,085,215) - - (51,072,368) Impairment losses (Note 34) (770,000) - 417,220 1,097,631 (1,202,321) - (457,470) Disposals - - 146,157 6,519,329 - - 6,665,486 Adjustments, transfers and write-offs - - 167,119 864,286 - - 1,031,405 Translation adjustment 1,482,699 - 2,547,724 13,376,735 76,319 - 17,483,477 Non-current assets held for sale (Note 20) (628,275) - (5,742,029) (4,858,962) (265,000) - (11,494,266) Balance at 31 December 2013 (43,579,815) (1,764,547) (321,830,063) (1,152,134,755) (1,391,002) - (1,520,700,182) Net assets Net amount at 31 December 2012 130,244,235 3,431,866 77,440,534 159,292,380 25,208,504 1,491,875 397,109,394 Net amount at 31 December 2013 124,358,626 3,329,394 75,302,947 149,366,872 11,835,731 1,110,270 365,303,840

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ACCUMULATED LOSSES FOR ACCUMULATED LOSSES FOR NON-CURRENT ACCUMULATED LOSSES THE YEAR LOSSES THE YEAR TRANSLATION ASSETS HELD LOSSESAmounts in Euro 1/1/12 (NOTE 34) 1/1/13 (NOTE 34) CAMBIAL FOR SALE 31/12/13

Land and natural resources (1,369,751) (3,405,058) (4,774,809) (770,000) - (2,277,432) (7,822,241)Buildings and other improvements (968,670) (3,312,907) (4,281,577) 417,220 - (1,427,993) (5,292,350)Equipment (948,204) (3,212,703) (4,160,907) 1,097,631 - (606,822) (3,670,098)Tangible fixed assets in progress - - - (1,202,321) 76,319 (262,750) (1,388,752) (3,286,625) (9,930,668) (13,217,293) (457,470) 76,319 (4,574,997) (18,173,441)

LAND AND BUILDINGS TANGIBLE NATURAL LANDSCAPE AND OTHER FIXED ASSETS ADVANCE Amounts in Euro RESOURCES REMEDIATION IMPROVEMENTS EQUIPMENT IN PROGRESS PAYMENTS TOTAL

Assets Balance at 1 January 2012 174,502,002 5,093,941 377,485,173 1,268,644,706 45,894,918 3,339,667 1,874,960,407 Acquisitions 167,000 - 2,309,746 4,167,658 23,320,371 1,462,829 31,427,604 Disposals (35,308) - (77,509) (6,229,885) (60,126) - (6,402,828) Adjustments, transfers and write-offs 676,228 9,623,434 32,685,855 (42,630,647) (3,314,161) (2,959,291) Translation adjustment (3,429,111) - (2,391,074) (9,927,395) (1,316,012) 3,540 (17,060,052) Balance at 31 December 2012 171,880,811 5,093,941 386,949,770 1,289,340,939 25,208,504 1,491,875 1,879,965,840 Acquisitions 20,045 - 1,495,769 9,629,101 22,802,798 418,825 34,366,538 Disposals (37,668) - (155,220) (6,439,438) (10,493) (24,609) (6,667,428) Adjustments, transfers and write-offs 116,922 - 8,123,947 25,035,094 (33,952,121) (729,413) (1,405,571) Translation adjustment (6,123,467) - (5,224,453) (20,923,028) (1,086,955) (46,408) (33,404,311) Non-current assets held for sale (Note 20) 2,081,798 - 5,943,197 4,858,959 265,000 - 13,148,954 Balance at 31 December 2013 167,938,441 5,093,941 397,133,010 1,301,501,627 13,226,733 1,110,270 1,886,004,022 Accum. Depreciation and impairment losses Balance at 1 January 2012 (36,663,400) (1,546,644) (291,526,590) (1,108,098,964) - - (1,437,835,598) Depreciation (Note 34) (2,353,835) (115,431) (10,835,521) (39,291,220) - - (52,596,007) Impairment losses (Note 34) (3,405,058) - (3,312,907) (3,212,703) - - (9,930,668) Disposals 6,732 - 80,785 6,169,832 - - 6,257,349 Adjustments, transfers and write-offs (4,982) - (5,130,036) 7,912,927 - - 2,777,909 Translation adjustment 783,967 - 1,215,033 6,471,569 - - 8,470,569 Balance at 31 December 2012 (41,636,576) (1,662,075) (309,509,236) (1,130,048,559) - - (1,482,856,446) Depreciation (Note 34) (2,027,663) (102,472) (9,857,018) (39,085,215) - - (51,072,368) Impairment losses (Note 34) (770,000) - 417,220 1,097,631 (1,202,321) - (457,470) Disposals - - 146,157 6,519,329 - - 6,665,486 Adjustments, transfers and write-offs - - 167,119 864,286 - - 1,031,405 Translation adjustment 1,482,699 - 2,547,724 13,376,735 76,319 - 17,483,477 Non-current assets held for sale (Note 20) (628,275) - (5,742,029) (4,858,962) (265,000) - (11,494,266) Balance at 31 December 2013 (43,579,815) (1,764,547) (321,830,063) (1,152,134,755) (1,391,002) - (1,520,700,182) Net assets Net amount at 31 December 2012 130,244,235 3,431,866 77,440,534 159,292,380 25,208,504 1,491,875 397,109,394 Net amount at 31 December 2013 124,358,626 3,329,394 75,302,947 149,366,872 11,835,731 1,110,270 365,303,840


31/12/13 31/12/12 ACQUISITION ACCUMULATED NET BOOK ACQUISITION ACCUMULATED NET BOOKAmounts in Euro COST DEPRECIATION VALUE COST DEPRECIATION VALUE

Basic equipment 4,365,548 (1,679,936) 2,685,612 4,379,114 (1,143,368) 3,235,746

The Group headquartered in Portugal revalued its Property, Plant and Equip-ment in previous years pursuant to ap-plicable legislation, namely Ministerial Order no. 258 of 28 December 1963, Decree-Laws nos. 126/77, 430/78,

_12. LEASES

_12.1 FINANCE LEASES

At 31 December 2013 and 2012 the Group used the following assets ac-quired under finance leases:

At 31 December 2013 and 2012, the Group’s debt relating to finance leases, as well as the relevant repayment plan, was as follows:

219/82, 319-G/84, 118-B/86, 111/88, 49/91, 264/92, 22/92 and 31/98.

Details of the historical acquisition costs and revalued amounts of Prop-erty, Plant and Equipment, net of ac-

cumulated depreciation, at 31 Decem-ber 2013 and 2012 were as follows:

Amounts in Euro 31/12/13 31/12/12CAPTIONS HISTORICAL COST REVALUATION RESERVE REVALUED AMOUNT HISTORICAL COST REVALUATION RESERVE REVALUED AMOUNT

Land and natural resources 114,489,774 9,868,852 124,358,626 120,156,100 10,648,864 130,244,235Buildings and other improvements 71,277,697 4,025,250 75,302,947 70,902,086 6,538,448 77,440,534Plant and equipment 149,218,413 148,459 149,366,872 159,114,778 177,602 159,292,380 334,985,884 14,042,561 349,028,445 350,172,964 16,804,185 366,977,149

FINANCE LEASES - INSTALMENTS PAYABLE

Amounts in Euro 31/12/13 31/12/12

Non current (Note 24.3) 2,441,096 3,099,370Current (Note 24.3) 656,874 551,933 3,097,970 3,651,303

85

During the years ended 31 December 2013 and 2012 the following amounts were recognised in the captions “(De-preciation and amortisation (expense)/ reversals” and “Interest and similar ex-pense”:

Amounts in Euro 31/12/13 31/12/12CAPTIONS HISTORICAL COST REVALUATION RESERVE REVALUED AMOUNT HISTORICAL COST REVALUATION RESERVE REVALUED AMOUNT

Land and natural resources 114,489,774 9,868,852 124,358,626 120,156,100 10,648,864 130,244,235Buildings and other improvements 71,277,697 4,025,250 75,302,947 70,902,086 6,538,448 77,440,534Plant and equipment 149,218,413 148,459 149,366,872 159,114,778 177,602 159,292,380 334,985,884 14,042,561 349,028,445 350,172,964 16,804,185 366,977,149

FINANCE LEASES-COMPULSORY INSTALMENTS

Amounts in Euro 31/12/13 31/12/12

Within 1 year 793,816 729,829Between 1 and 2 years 677,751 800,839Between 2 and 3 years 681,829 676,634Between 3 and 4 years 680,716 673,603Between 4 and 5 years 699,775 669,852After 5 years - 694,341 3,533,887 4,245,098Future interest -to be deducted (435,917) (593,795)Present value of finance lease liabilities (Note 24.3) 3,097,970 3,651,303

Amounts in Euro 31/12/13 31/12/12

Depreciation in the year 536,568 275,959Finance costs 152,315 190,202 688,883 466,161


31/12/13 31/12/12Amounts in Euro LET FOR SALE TOTAL LET FOR SALE TOTAL

Opening balance - gross 957,222 1,261,860 2,219,082 957,222 1,103,319 2,060,541Additions - - - - 158,541 158,541Disposals - (158,541) (158,541) - - -Closing balance - gross 957,222 1,103,319 2,060,541 957,222 1,261,860 2,219,082 Opening balance - depreciation and impairment losses 689,308 62,729 752,037 673,311 60,219 733,530Transfers - - - - (284) (284)Depreciation and impairment losses (Note 34) 15,997 2,792 18,789 15,997 2,794 18,791Closing balance - depreciation and impairment losses 705,305 65,521 770,826 689,308 62,729 752,037 Net amount 251,917 1,037,798 1,289,715 267,914 1,199,131 1,467,045

_12.2 OPERATING LEASES

At 31 December 2013 and 2012, the Group is lessee under operating leases relating to rental agreements of vehi-cles denominated in Euro.

Future minimum rentals payable under operating leases at 31st December are detailed as follows:

Operating lease expenditure recogni-sed in the years ended 31 December 2013 and 2012 totalled Euro 777,528 and Euro 591,888, respectively.

_13. INVESTMENT PROPERTY

The following movements were registe-red in investment property in the years ended 31 December 2013 and 2012:

Amounts in Euro 31/12/13 31/12/12 Less than 1 year 390,787 247,0981 to 5 years 183,900 192,412 574,687 439,510

87

31/12/13 31/12/12Amounts in Euro LET FOR SALE TOTAL LET FOR SALE TOTAL

Opening balance - gross 957,222 1,261,860 2,219,082 957,222 1,103,319 2,060,541Additions - - - - 158,541 158,541Disposals - (158,541) (158,541) - - -Closing balance - gross 957,222 1,103,319 2,060,541 957,222 1,261,860 2,219,082 Opening balance - depreciation and impairment losses 689,308 62,729 752,037 673,311 60,219 733,530Transfers - - - - (284) (284)Depreciation and impairment losses (Note 34) 15,997 2,792 18,789 15,997 2,794 18,791Closing balance - depreciation and impairment losses 705,305 65,521 770,826 689,308 62,729 752,037 Net amount 251,917 1,037,798 1,289,715 267,914 1,199,131 1,467,045


Investment property is depreciated on the straight-line basis and over the pe-riod of the expected useful life of each asset group.

The following income and expenditure related to investment property was re-cognised in the current and prior years under review:

_14. INTANGIBLE ASSETS

In the years ended 31 December 2013 and 2012, the following movements took place under the caption “Intangible assets”, as well as the respective amortisation:

INTANGIBLE INDUSTRIAL EMISSION INTANGIBLE ASSETS Amounts in Euro PROPERTY RIGHTS ASSETS IN PROGRESS TOTAL Assets Balance at 1 January 2012 133,329 32,492,696 81,249 25,953 32,733,227 Acquisitions - 33,425 - 23,518 56,943 Rights granted - 24,936,244 - - 24,936,244 Rights sold - (7,913,799) - - (7,913,799) Adjustments, transfers and write-offs 38,837 - - (38,837) - Rights returned to Licence Coordinating Entity - (31,230,992) - - (31,230,992) Balance at 31 December 2012 172,166 18,317,574 81,249 10,634 18,581,623 Acquisitions - - - 33,253 33,253 Rights granted - 10,640,176 - - 10,640,176 Rights sold - (1,791,891) - - (1,791,891) Rights repealed - (26,364) - - (26,364) Adjustments, transfers and write-offs 19,451 - - (19,451) - Rights returned to Licence Coordinating Entity - (16,155,808) - - (16,155,808) Balance at 31 December 2013 191,617 10,983,687 81,249 24,436 11,280,989Accum. Amortisations and impairment losses Balance at 1 January 2012 (74,587) (31,642,215) (76,550) - (31,793,352) Amortisations in the year (Note 34) (31,887) - (1,974) - (33,861) Emissions in the year (Note 34) - (16,576,515) - - (16,576,515) Impairment losses on the period (Note 34) - 234,906 - - 234,906 Rights returned to the Licence Coordinating Entity - 31,230,992 - - 31,230,992 Balance at 31 December 2012 (106,474) (16,752,832) (78,524) - (16,937,830) Amortisations in the year (Note 34) (47,363) - (1,832) - (49,195) Emissions in the year (Note 34) - (7,235,891) - - (7,235,891) Impairment losses on the period (Note 34) - 663,808 - - 663,808 Rights returned to the Licence Coordinating Entity - 16,155,808 - - 16,155,808 Balance at 31 December 2013 (153,837) (7,169,107) (80,356) - (7,403,300)Net assets Net amount at 31 December 2012 65,692 1,564,742 2,725 10,634 1,643,793 Net amount at 31 December 2013 37,780 3,814,580 893 24,436 3,877,689

31/12/13 31/12/12Amounts in Euro LET FOR SALE TOTAL LET FOR SALE TOTAL Rental income 38,103 - 38,103 36,859 - 36,859Depreciation and impairment losses (15,997) (2,792) (18,789) (15,997) (2,794) (18,791) 22,106 (2,792) 19,314 20,862 (2,794) 18,068

89

INTANGIBLE INDUSTRIAL EMISSION INTANGIBLE ASSETS Amounts in Euro PROPERTY RIGHTS ASSETS IN PROGRESS TOTAL Assets Balance at 1 January 2012 133,329 32,492,696 81,249 25,953 32,733,227 Acquisitions - 33,425 - 23,518 56,943 Rights granted - 24,936,244 - - 24,936,244 Rights sold - (7,913,799) - - (7,913,799) Adjustments, transfers and write-offs 38,837 - - (38,837) - Rights returned to Licence Coordinating Entity - (31,230,992) - - (31,230,992) Balance at 31 December 2012 172,166 18,317,574 81,249 10,634 18,581,623 Acquisitions - - - 33,253 33,253 Rights granted - 10,640,176 - - 10,640,176 Rights sold - (1,791,891) - - (1,791,891) Rights repealed - (26,364) - - (26,364) Adjustments, transfers and write-offs 19,451 - - (19,451) - Rights returned to Licence Coordinating Entity - (16,155,808) - - (16,155,808) Balance at 31 December 2013 191,617 10,983,687 81,249 24,436 11,280,989Accum. Amortisations and impairment losses Balance at 1 January 2012 (74,587) (31,642,215) (76,550) - (31,793,352) Amortisations in the year (Note 34) (31,887) - (1,974) - (33,861) Emissions in the year (Note 34) - (16,576,515) - - (16,576,515) Impairment losses on the period (Note 34) - 234,906 - - 234,906 Rights returned to the Licence Coordinating Entity - 31,230,992 - - 31,230,992 Balance at 31 December 2012 (106,474) (16,752,832) (78,524) - (16,937,830) Amortisations in the year (Note 34) (47,363) - (1,832) - (49,195) Emissions in the year (Note 34) - (7,235,891) - - (7,235,891) Impairment losses on the period (Note 34) - 663,808 - - 663,808 Rights returned to the Licence Coordinating Entity - 16,155,808 - - 16,155,808 Balance at 31 December 2013 (153,837) (7,169,107) (80,356) - (7,403,300)Net assets Net amount at 31 December 2012 65,692 1,564,742 2,725 10,634 1,643,793 Net amount at 31 December 2013 37,780 3,814,580 893 24,436 3,877,689

31/12/13 31/12/12Amounts in Euro LET FOR SALE TOTAL LET FOR SALE TOTAL Rental income 38,103 - 38,103 36,859 - 36,859Depreciation and impairment losses (15,997) (2,792) (18,789) (15,997) (2,794) (18,791) 22,106 (2,792) 19,314 20,862 (2,794) 18,068


Emission rights totalling Euro 3,814,580 and Euro 1,564,742 at 31 December 2013 and 2012 respectively relate to the value of rights attributed and depo-sited free of charge in favour of Group companies at the “Registo Português de Licenças de Emissão” (National Rights Registrar), plus the licenses acquired and deducted by the rights

delivered/to deliver to the “Entidade Coordenadora do Licenciamento” (the national licensing coordinating entity) in respect of actual emissions.

The movements registered in the years ended 31 December 2013 and 2012 in respect of emission rights were as follows:

31/12/13 31/12/12Amounts in Euro TONS EUROS TONS EUROS Assets Opening balance 2,097,830 18,317,574 2,230,361 32,492,696 Rights granted (Note 21.5.3) 2,240,037 10,640,176 2,689,994 24,936,244 Rights aquired - - 133,700 33,425 Rights repealed (2,844) (26,364) - - Rights sold (Note 21.5.3) (193,300) (1,791,891) (853,700) (7,913,799) Rights returned to Licence Coordinating Entity (1,741,206) (16,155,808) (2,102,525) (31,230,992) Closing balance 2,400,517 10,983,687 2,097,830 18,317,574Accumulated amortisation and impairment losses Opening balance (1,725,978) (16,752,832) (1,615,468) (31,642,215) Amortisation for the year relating to: Emissions in the year (1,613,104) (7,235,891) (2,213,035) (16,576,515) Reversal of impairment losses on the period (Note 34) - 663,808 - 234,906 Rights returned to the Licence Coordinating Entity 1,741,206 16,155,808 2,102,525 31,230,992 Closing balance (1,597,876) (7,169,107) (1,725,978) (16,752,832)Net amount 802,641 3,814,580 371,852 1,564,742

91

The Group sold 193,700 tonnes (853,700 in 2012) of emission rights in the year ended 31 December 2013, ha-ving recorded gains amounting to Euro 978,774 (7,561,300 in 2012) (Note 32).

31/12/13 31/12/12Amounts in Euro TONS EUROS TONS EUROS Assets Opening balance 2,097,830 18,317,574 2,230,361 32,492,696 Rights granted (Note 21.5.3) 2,240,037 10,640,176 2,689,994 24,936,244 Rights aquired - - 133,700 33,425 Rights repealed (2,844) (26,364) - - Rights sold (Note 21.5.3) (193,300) (1,791,891) (853,700) (7,913,799) Rights returned to Licence Coordinating Entity (1,741,206) (16,155,808) (2,102,525) (31,230,992) Closing balance 2,400,517 10,983,687 2,097,830 18,317,574Accumulated amortisation and impairment losses Opening balance (1,725,978) (16,752,832) (1,615,468) (31,642,215) Amortisation for the year relating to: Emissions in the year (1,613,104) (7,235,891) (2,213,035) (16,576,515) Reversal of impairment losses on the period (Note 34) - 663,808 - 234,906 Rights returned to the Licence Coordinating Entity 1,741,206 16,155,808 2,102,525 31,230,992 Closing balance (1,597,876) (7,169,107) (1,725,978) (16,752,832)Net amount 802,641 3,814,580 371,852 1,564,742


_15. FINANCIAL INVESTMENTS

At 31 December 2013 and 2012, finan-cial investments, including Goodwill, comprised the following:

The carrying value of financial invest-ments registered the following move-ments during the years ended 31 De-cember 2013 and 2012:

The caption financial investments comprise the goodwill generated on the ac-quisition of associates, as follows:

Subsidiaries/Associates % HELD 31/12/13 31/12/12 Associates Setefrete, SGPS, S.A. 25.00% 2,918,120 3,063,979 MC - Materiaux de Construction 49.36% 2,211 2,442 J.M.J. - Henriques, Lda. 28.57% 381,825 385,082 Ave-Gestão Ambiental e Valorização Energética, S.A. 35.00% 1,446,165 1,565,039 Supremo Cimentos, S.A. 15.00% 22,088,327 - Nsospe Empreendimentos e financial, S.A. 45.58% 6,571,082 - Sociedade de Inertes, Lda 49.00% 648 - 33,408,378 5,016,542Other financial investments Supremo Cimentos, S.A. 13.81% - 24,413,353 33,408,378 29,429,895

GOODWILLAmounts in Euro AQ. YEAR 31/12/13 31/12/12

Setefrete, SGPS, S.A. 2003 2,227,750 2,227,750Ave - Gestão Ambiental e Valorização Energética, S.A. 2009 1,308,977 1,308,977Supremo Cimentos, S.A. 2013 5,218,785 -Nsospe Empreendimentos e financial, S.A. 2013 4,273,668 - 13,029,180 3,536,727

31/12/13 31/12/12 OTHER OTHER FINANCIAL FINANCIAL Amounts in Euro ASSOCIATES INVESTMENTS TOTAL ASSOCIATES INVESTMENTS TOTAL

Opening balance 5,016,542 24,413,353 29,429,895 5,516,355 - 5,516,355Acquisitions (Note 8) 15,602,279 - 15,602,279 - 24,413,353 24,413,353Net income accounted (Note 29) (2,214,487) - (2,214,487) 401,339 - 401,339Dividends distributed by Setefrete, SGPS, S.A. (487,500) - (487,500) (666,250) - (666,250)Dividends distributed by Ave, S.A. (226,006) - (226,006) (212,350) - (212,350)Transfer from “Other financial investments” 24,413,353 (24,413,353) - - - -Transfer to “Provisions” - negative equity (Note 22) - - - (22,413) - (22,413)Translation adjustment (8,695,803) - (8,695,803) (139) - (139)Saldo final 33,408,378 - 33,408,378 5,016,542 24,413,353 29,429,895

93

31/12/13 31/12/12 OTHER OTHER FINANCIAL FINANCIAL Amounts in Euro ASSOCIATES INVESTMENTS TOTAL ASSOCIATES INVESTMENTS TOTAL

Opening balance 5,016,542 24,413,353 29,429,895 5,516,355 - 5,516,355Acquisitions (Note 8) 15,602,279 - 15,602,279 - 24,413,353 24,413,353Net income accounted (Note 29) (2,214,487) - (2,214,487) 401,339 - 401,339Dividends distributed by Setefrete, SGPS, S.A. (487,500) - (487,500) (666,250) - (666,250)Dividends distributed by Ave, S.A. (226,006) - (226,006) (212,350) - (212,350)Transfer from “Other financial investments” 24,413,353 (24,413,353) - - - -Transfer to “Provisions” - negative equity (Note 22) - - - (22,413) - (22,413)Translation adjustment (8,695,803) - (8,695,803) (139) - (139)Saldo final 33,408,378 - 33,408,378 5,016,542 24,413,353 29,429,895


_16. CORPORATE INCOME TAX

_16.1 CURRENT TAX

The Group is subject to the tax grou-ping regime in Portugal, which governs business combinations of companies in which the dominant shareholding equals 90% or more, and meets the specific conditions of the Portuguese Corporate Income Tax Code (initials IRC).

Companies within the scope of the tax grouping regime calculate their income tax obligation on an individual basis. Gains resulting from the application of the tax grouping regime are treated as a deduction at the parent company level.

The figure of Euro 3,547,069 recorded as current tax includes (i) Euro 18,088 referring to the over-estimation for ta-xation relating to the previous period, (ii) Euro 755,445 relating to income tax costs of prior periods and (iii) Euro 4,320,602 (Note 26) referring to the estimate for corporate income tax for the period.

Annual tax returns in Portugal are subject to review and adjustment by the tax authorities for four years. Ho-wever, losses may be subject to re-view and additional assessment by the tax authorities for a longer period.

In the other countries in which the Group carries on operations, these periods differ from that applicable in Portugal and as a general rule are longer.

The Board of Directors is of the opi-nion that any corrections to tax re-turns resulting from assessments will not have a material impact on the consolidated financial statements at 31 December 2013.

The reconciliation of the effective tax rate in the years ended 31 December 2013 and 2012 is as follows:

Gains and losses relating resulting from the application of the equity method on subsidiary and associate investments are adjusted against net income of the period in arriving at ta-xable income, pursuant to prevailing legislation.

Dividends are considered in the computation of taxable income in the year in which they are received if the investment is held for a period of less than one year or represents less than 10% of the investee’s sha-re capital.

At 31 December 2013 and 2012, cor-porate income tax comprised:

Amounts in Euro 31/12/13 31/12/12

Current tax 3,547,069 6,596,004Additional assessments (4,238,041) (3,356,170)Deferred tax (Note 16.2) (817,981) 656,832 (1,508,953) 3,896,666

95

The reconciliation of the effective tax rate in the years ended 31 December 2013 and 2012 is as follows:

(a) Main items included herein:

(b) The corporate income tax decrease in the period under the caption “Change in the tax rate” includes (i) the positive net effect (Euro 1,111,774) of different tax rates, namely, Lebanon’s tax rate of 15% and the negative effect related to the change of the corporate income tax rate in Portugal (Euro 80.997).

(c) “Tax adjustments” refers mainly to additional flat tax applied on certain categories of expenses (Euro 733,074) net of the effect of international double taxation (Euro 227,758).

Amounts in Euro 31/12/13 31/12/12

Profit before tax (30,645,496) (29,864,858)Tax at current rate (9,040,421) (9,407,430)Permanent differences (a) 4,287,308 11,253,768Prior-year recoverable tax losses (31,808) (274,829)Non-recoverable tax losses 7,662,299 4,302,658Prior-year non-recoverable tax losses 1,278,242 1,107,477Change in tax rate (b) (1,030,777) (866,259)Provision for current tax (4,933,558) (3,356,170)Withholding outright 102,874 264,480Tax relating to prior periods (439,686) 232,224Adjustments to taxable amount (c) 636,574 640,747 (1,508,953) 3,896,666Effective tax rate 0.0% 0.0%

Amounts in Euro 31/12/13 31/12/12

Impairment losses in Goodwill (Note 10) 13,620,281 6,702,954Losses in non-current assets held for sale - 10,068,133Effect of the application of the equity method (Note 29) 2,214,487 5,184Taxable gains / (losses) 2,874,429 6,432,862Accounting gains / (losses) (2,907,713) (914,577)Tax incentives (809,380) (1,554,007)Dividends from companies with headquarters outside the EU 1,958,476 3,922,153Increase / (Decrease) in taxed provisions 181,517 9,209,445Other (2,598,849) 1,854,102 14,533,248 35,726,249Tax impact (29,50%) 4,287,308 11,253,768


_16.2 DEFERRED TAX

Deferred tax assets and liabilities regis-tered the following movements during the years ended 31 December 2013 and 2012:

31 DECEMBER 2013 CHANGE NET PROFIT/(LOSS) IN TAX CHANGE NON-CURRENT TRANSLATION FOR THE YEAR RATE SHAREHOLDERS’ IN TAX ASSETS Amounts in Euro OPENING BALANCE ADJUSTMENT (NOTE 16.1) (NOTE 16.1) EQUITY RATE HELD FOR SALE CLOSING BALANCE Temporary differences giving rise to deferred tax assets Taxed provisions and impairments 17,701,992 (527,609) 2,225,361 - - - - 19,399,744 Provisions for environmental and landscape remediation 2,251,493 - 286,964 - - - - 2,538,457 Tax losses carried forward 5,341,885 - (5,004,739) - - - - 337,146 Liability for retirement subsidy (Note 23) 430,715 (33,517) 2,572 - (2,909) - - 396,861 Liability for death subsidy (Note 23) 53,853 - (1,175) - - - - 52,678 Liability for long-service award (Note 23) 551,207 - (16,541) - - - - 534,666 Pension fund shortfall (Note 23) 96,648 (9,331) (29,297) - 36,158 - - 94,178 Unfunded retirement benefits (Note 23) 6,739,718 - (653,010) - (123,814) - - 5,962,894 Liability for healthcare assistance (Note 23) 983,936 - (399,862) - (69,279) - - 514,795 Accounting deferred gains originating from intra-group transactions 1,459,469 - 1,254,205 - - - - 2,713,674 Fair value calculated on business combinations 1,385,387 (59,973) - - - - - 1,325,414 Imparidades em activos fixos 7,452,863 - (778) - - - - 7,452,085 Other temporary differences 6,375,190 - (38,949) - (1,532,731) - - 4,803,510 50,824,356 (630,430) (2,375,249) - (1,692,575) - - 46,126,102Temporary differences giving rise to deferred tax liabilities Revaluation of tangible fixed assets (4,807,282) - 1,094,533 - - - (8,727) (3,721,476) Fair value calculated on business combinations (115,529,388) 7,193,335 3,406,372 - - - (27,562) (104,957,243) Accounting deferred gains originating from intra-group transactions (10,400,946) 450,248 - - - - - (9,950,698) Deferral of tax on asset gains (904,480) - 114,924 - - - (55,294) (844,850) Increased depreciation and amortisation (3,944,550) 387,029 (273,055) - - - - (3,830,576) Financial instruments (Note 39) - - - - - - - - Pension fund surplus (Note 23) (5,030,218) - (252,109) - 1,179,757 - - (4,102,570) Government grants (1,389,229) 66,129 - - 59,058 - - (1,264,042) Emission rights (Note 21.5.3) (1,531,317) - - - (2,283,263) - - (3,814,580) Other temporary differences (328,820) - 100,676 - - - - (228,144) (143,866,230) 8,096,741 4,191,341 - (1,044,448) - (91,583) (132,714,179)Amounts carried in the balance sheet: Deferred tax assets 13,496,066 (156,760) (383,050) (649,406) (427,159) (52,625) - 11,827,066 Deferred tax liabilities (38,343,238) 2,224,453 1,282,028 568,409 (274,962) 62,385 (32,397) (34,513,322)

97

As a result of the changes introduced by Law No. 2/2014 of 16 January, whi-ch amends:

(I) Article 87.º of the Corporate Income Tax Code (CIT), fixing a corporate inco-me tax rate of 23% from 2014 onwards;

(II) Article 87.º - A of the CIT Code, whi-ch stated an additional taxation called the State Surcharge of 3% for entities

with a taxable income amount betwe-en Euro 1,500,000 and Euro 7,500,000, 5% for entities with a taxable income amount between Euro 7,500,000 and Euro 35,000,000 and 7% for entities with a taxable income amount higher than Euro 35,000,000;

(III) Article 52.º of the CIT code that li-mits the deduction of prior year tax los-ses at 70 % of taxable income amount,

the Group updated the rates applica-ble to its deferred tax assets and lia-bilities .

31 DECEMBER 2013 CHANGE NET PROFIT/(LOSS) IN TAX CHANGE NON-CURRENT TRANSLATION FOR THE YEAR RATE SHAREHOLDERS’ IN TAX ASSETS Amounts in Euro OPENING BALANCE ADJUSTMENT (NOTE 16.1) (NOTE 16.1) EQUITY RATE HELD FOR SALE CLOSING BALANCE Temporary differences giving rise to deferred tax assets Taxed provisions and impairments 17,701,992 (527,609) 2,225,361 - - - - 19,399,744 Provisions for environmental and landscape remediation 2,251,493 - 286,964 - - - - 2,538,457 Tax losses carried forward 5,341,885 - (5,004,739) - - - - 337,146 Liability for retirement subsidy (Note 23) 430,715 (33,517) 2,572 - (2,909) - - 396,861 Liability for death subsidy (Note 23) 53,853 - (1,175) - - - - 52,678 Liability for long-service award (Note 23) 551,207 - (16,541) - - - - 534,666 Pension fund shortfall (Note 23) 96,648 (9,331) (29,297) - 36,158 - - 94,178 Unfunded retirement benefits (Note 23) 6,739,718 - (653,010) - (123,814) - - 5,962,894 Liability for healthcare assistance (Note 23) 983,936 - (399,862) - (69,279) - - 514,795 Accounting deferred gains originating from intra-group transactions 1,459,469 - 1,254,205 - - - - 2,713,674 Fair value calculated on business combinations 1,385,387 (59,973) - - - - - 1,325,414 Imparidades em activos fixos 7,452,863 - (778) - - - - 7,452,085 Other temporary differences 6,375,190 - (38,949) - (1,532,731) - - 4,803,510 50,824,356 (630,430) (2,375,249) - (1,692,575) - - 46,126,102Temporary differences giving rise to deferred tax liabilities Revaluation of tangible fixed assets (4,807,282) - 1,094,533 - - - (8,727) (3,721,476) Fair value calculated on business combinations (115,529,388) 7,193,335 3,406,372 - - - (27,562) (104,957,243) Accounting deferred gains originating from intra-group transactions (10,400,946) 450,248 - - - - - (9,950,698) Deferral of tax on asset gains (904,480) - 114,924 - - - (55,294) (844,850) Increased depreciation and amortisation (3,944,550) 387,029 (273,055) - - - - (3,830,576) Financial instruments (Note 39) - - - - - - - - Pension fund surplus (Note 23) (5,030,218) - (252,109) - 1,179,757 - - (4,102,570) Government grants (1,389,229) 66,129 - - 59,058 - - (1,264,042) Emission rights (Note 21.5.3) (1,531,317) - - - (2,283,263) - - (3,814,580) Other temporary differences (328,820) - 100,676 - - - - (228,144) (143,866,230) 8,096,741 4,191,341 - (1,044,448) - (91,583) (132,714,179)Amounts carried in the balance sheet: Deferred tax assets 13,496,066 (156,760) (383,050) (649,406) (427,159) (52,625) - 11,827,066 Deferred tax liabilities (38,343,238) 2,224,453 1,282,028 568,409 (274,962) 62,385 (32,397) (34,513,322)


As at 31 December 2013 the tax rate change in Portugal applied to the de-ferred taxes, had a negative impact on earnings amounting to Euro 80,997 and a positive impact of Euro 9,760 recognised in equity.

31 DECEMBER 2012 NET PROFIT/ (LOSS) TRANSLATION FOR THE YEAR SHAREHOLDERS’ Amounts in Euro OPENING BALANCE ADJUSTMENT (NOTE 16.1) EQUITY TRANSFERS CLOSING BALANCE Temporary differences giving rise to deferred tax assets Taxed provisions and impairments 20,098,772 (273,904) (2,122,876) - - 17,701,992 Provisions for environmental and landscape remediation 2,560,245 - (308,752) - - 2,251,493 Tax losses carried forward 1,626,725 - 3,715,160 - - 5,341,885 Liability for retirement subsidy (Note 23) 433,921 (12,069) 29,837 (20,974) - 430,715 Liability for death subsidy (Note 23) 71,736 - (17,883) - - 53,853 Liability for long-service award (Note 23) 916,628 - (365,421) - - 551,207 Pension fund shortfall (Note 23) 77,594 (4,489) (49,549) 53,604 19,488 96,648 Unfunded retirement benefits (Note 23) 7,871,240 - (663,490) (375,055) (92,977) 6,739,718 Liability for healthcare assistance (Note 23) 12,118,893 - (10,304,759) (830,198) - 983,936 Accounting deferred gains originating from intra-group transactions 1,798,804 - (339,335) - - 1,459,469 Fair value calculated on business combinations 1,567,224 (26,171) (155,666) - - 1,385,387 Imparidades em activos fixos - - 4,166,238 - 3,286,625 7,452,863 Other temporary differences 8,271,587 - (13,622) 1,403,850 (3,286,625) 6,375,190 57,413,369 (316,633) (6,430,118) 231,227 (73,489) 50,824,356Temporary differences giving rise to deferred tax liabilities Revaluation of tangible fixed assets (6,080,661) - 1,273,379 - - (4,807,282) Fair value calculated on business combinations (124,073,863) 4,271,268 4,273,207 - - (115,529,388) Accounting deferred gains originating from intra-group transactions (10,605,926) 204,980 - - - (10,400,946) Deferral of tax on asset gains (985,542) - 81,062 - - (904,480) Increased depreciation and amortisation (3,858,617) 207,685 (293,618) - - (3,944,550) Financial instruments (Note 39) (1,574,504) - - 1,574,504 - - Pension fund surplus (Note 23) (2,066,878) - 632,179 (3,669,008) 73,489 (5,030,218) Government grants (2,353,688) 39,187 - 925,272 - (1,389,229) Emission rights (Note 21.5.3) (850,481) - - (680,836) - (1,531,317) Other temporary differences (493,563) (1) 164,744 - - (328,820) (152,943,723) 4,723,119 6,130,953 (1,850,068) 73,489 (143,866,230)Amounts carried in the balance sheet: Deferred tax assets 16,106,288 (82,115) (2,523,870) 14,135 (18,372) 13,496,066 Deferred tax liabilities (41,244,240) 1,324,384 2,066,176 (507,930) 18,372 (38,343,238)

99

31 DECEMBER 2012 NET PROFIT/ (LOSS) TRANSLATION FOR THE YEAR SHAREHOLDERS’ Amounts in Euro OPENING BALANCE ADJUSTMENT (NOTE 16.1) EQUITY TRANSFERS CLOSING BALANCE Temporary differences giving rise to deferred tax assets Taxed provisions and impairments 20,098,772 (273,904) (2,122,876) - - 17,701,992 Provisions for environmental and landscape remediation 2,560,245 - (308,752) - - 2,251,493 Tax losses carried forward 1,626,725 - 3,715,160 - - 5,341,885 Liability for retirement subsidy (Note 23) 433,921 (12,069) 29,837 (20,974) - 430,715 Liability for death subsidy (Note 23) 71,736 - (17,883) - - 53,853 Liability for long-service award (Note 23) 916,628 - (365,421) - - 551,207 Pension fund shortfall (Note 23) 77,594 (4,489) (49,549) 53,604 19,488 96,648 Unfunded retirement benefits (Note 23) 7,871,240 - (663,490) (375,055) (92,977) 6,739,718 Liability for healthcare assistance (Note 23) 12,118,893 - (10,304,759) (830,198) - 983,936 Accounting deferred gains originating from intra-group transactions 1,798,804 - (339,335) - - 1,459,469 Fair value calculated on business combinations 1,567,224 (26,171) (155,666) - - 1,385,387 Imparidades em activos fixos - - 4,166,238 - 3,286,625 7,452,863 Other temporary differences 8,271,587 - (13,622) 1,403,850 (3,286,625) 6,375,190 57,413,369 (316,633) (6,430,118) 231,227 (73,489) 50,824,356Temporary differences giving rise to deferred tax liabilities Revaluation of tangible fixed assets (6,080,661) - 1,273,379 - - (4,807,282) Fair value calculated on business combinations (124,073,863) 4,271,268 4,273,207 - - (115,529,388) Accounting deferred gains originating from intra-group transactions (10,605,926) 204,980 - - - (10,400,946) Deferral of tax on asset gains (985,542) - 81,062 - - (904,480) Increased depreciation and amortisation (3,858,617) 207,685 (293,618) - - (3,944,550) Financial instruments (Note 39) (1,574,504) - - 1,574,504 - - Pension fund surplus (Note 23) (2,066,878) - 632,179 (3,669,008) 73,489 (5,030,218) Government grants (2,353,688) 39,187 - 925,272 - (1,389,229) Emission rights (Note 21.5.3) (850,481) - - (680,836) - (1,531,317) Other temporary differences (493,563) (1) 164,744 - - (328,820) (152,943,723) 4,723,119 6,130,953 (1,850,068) 73,489 (143,866,230)Amounts carried in the balance sheet: Deferred tax assets 16,106,288 (82,115) (2,523,870) 14,135 (18,372) 13,496,066 Deferred tax liabilities (41,244,240) 1,324,384 2,066,176 (507,930) 18,372 (38,343,238)


DEFERRED TAX ASSET RESULTING FROM TAX LOSS CARRIED FORWARDS

Deferred tax assets resulting from tax losses are recognised to the extent

TAX LOSS CARRIED FORWARDS NOT GIVING RISE TO A DEFERRED TAX ASSET

Tax losses which the Group considers, at this date, cannot be offset against

future taxable profits, and as such do not warrant recognition as a deferred tax asset, are shown by year of expira-tion as follows:

that it is probable that the relevant tax benefit will materialise through future taxable profits. Deferred tax assets recognised by the Group are as follows:

Amounts in Euro 31/12/13 31/12/12 EXPIRY DATE Secil - Companhia Geral de Cal e Cimento, S.A. - 5,112,968 2017Cimentos Madeira, Lda. 337,146 228,917 2017 337,146 5,341,885

COMPANY TOTAL 2014 2015 2016 2017 2018 2019 AND THEREAFTER Betomadeira, S.A. 866,048 549,385 316,663 - - - -Britobetão - Central de Betão, Lda. 7,869 - - - 7,869 - -Cimentos Costa Verde - Comércio de Cimentos, S.A. 81,297 81,297 - - - - -Florimar, SGPS, Lda 134,899 24,965 24,275 - 31,725 53,934 -I3 Participações e Serviços, Ltda. 86,372 - - - - - 86,372Lusoinertes, S.A. 4,170,612 - 1,711,361 - 2,459,251 - -Madebritas, Lda. 12,733 5,960 2,169 - 2,027 2,577 -Pedra Regional. S.A. 792,648 179,408 497,415 - 91,537 24,288 -Reficomb- Refinação e Comercialização de Combustíveis Derivados de Resíduos, S.A. 3,096 - 3,096 - - - -Secil Angola, SARL 486,584 - - 486,584 - - -Secil - Companhia Geral de Cal e Cimento, S.A. (RETGS) 38,068,887 - - - 16,809,562 21,259,325 -Secil Prébetão, S.A. 5,950,323 1,448,715 1,866,920 - 861,832 1,772,856 -Secil Unicon - S.G.P.S., Lda. 45,466 9,298 17,766 - 15,881 2,521 -Seciment Investments, B.V. 67,590 - - - - - 67,590Serife - Sociedade de Estudos e Realizações Industriais e de Fornecimento de Equipamento, Lda. 233233 84,301 148,932 - - - -Silonor, S.A. 11,914,077 - - - - - 11,914,077Société des Ciments de Gabés 106,771 - - - - 106,771 -Soime, S.A.L. 353,909 - 51,140 302,769 - - -Solenreco-Produção e Comercialização de Combustíveis, Lda. 150,336 - 150,336 - - - -Uniconcreto - Betão Pronto, S.A. 5,122,818 - 3,864,422 - 1,258,396 - -Zarzis Béton 90,060 - - - - - 90,060 68,745,628 2,383,329 8,654,495 789,353 21,538,080 23,222,272 12,158,099

101

COMPANY TOTAL 2014 2015 2016 2017 2018 2019 AND THEREAFTER Betomadeira, S.A. 866,048 549,385 316,663 - - - -Britobetão - Central de Betão, Lda. 7,869 - - - 7,869 - -Cimentos Costa Verde - Comércio de Cimentos, S.A. 81,297 81,297 - - - - -Florimar, SGPS, Lda 134,899 24,965 24,275 - 31,725 53,934 -I3 Participações e Serviços, Ltda. 86,372 - - - - - 86,372Lusoinertes, S.A. 4,170,612 - 1,711,361 - 2,459,251 - -Madebritas, Lda. 12,733 5,960 2,169 - 2,027 2,577 -Pedra Regional. S.A. 792,648 179,408 497,415 - 91,537 24,288 -Reficomb- Refinação e Comercialização de Combustíveis Derivados de Resíduos, S.A. 3,096 - 3,096 - - - -Secil Angola, SARL 486,584 - - 486,584 - - -Secil - Companhia Geral de Cal e Cimento, S.A. (RETGS) 38,068,887 - - - 16,809,562 21,259,325 -Secil Prébetão, S.A. 5,950,323 1,448,715 1,866,920 - 861,832 1,772,856 -Secil Unicon - S.G.P.S., Lda. 45,466 9,298 17,766 - 15,881 2,521 -Seciment Investments, B.V. 67,590 - - - - - 67,590Serife - Sociedade de Estudos e Realizações Industriais e de Fornecimento de Equipamento, Lda. 233233 84,301 148,932 - - - -Silonor, S.A. 11,914,077 - - - - - 11,914,077Société des Ciments de Gabés 106,771 - - - - 106,771 -Soime, S.A.L. 353,909 - 51,140 302,769 - - -Solenreco-Produção e Comercialização de Combustíveis, Lda. 150,336 - 150,336 - - - -Uniconcreto - Betão Pronto, S.A. 5,122,818 - 3,864,422 - 1,258,396 - -Zarzis Béton 90,060 - - - - - 90,060 68,745,628 2,383,329 8,654,495 789,353 21,538,080 23,222,272 12,158,099


_17. OTHER FINANCIAL ASSETS

At 31 December 2013 and 2012, other financial assets net of accumulated im-pairments are broken down as follows:

The movements in the carrying value of the impairment of non-current assets during the years ended on 31 Decem-ber 2013 and 2012 were as follows:

31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Other financial assets - non-current: Fixed deposit (Notes 38.2 and 42.2) 1,250,000 - 1,250,000 1,250,000 - 1,250,000Advances for investments 2,000,000 - 2,000,000 - - -Other 499,068 (98,641) 400,427 530,968 (102,815) 428,153 3,749,068 (98,641) 3,650,427 1,780,968 (102,815) 1,678,153

Amounts in Euro 31/12/13 31/12/12

Opening balance 102,815 105,243Translation adjustment (4,174) (2,428)Closing balance 98,641 102,815

103

31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Other financial assets - non-current: Fixed deposit (Notes 38.2 and 42.2) 1,250,000 - 1,250,000 1,250,000 - 1,250,000Advances for investments 2,000,000 - 2,000,000 - - -Other 499,068 (98,641) 400,427 530,968 (102,815) 428,153 3,749,068 (98,641) 3,650,427 1,780,968 (102,815) 1,678,153


_18. INVENTORIES

At 31 December 2013 and 2012, inven-tories net of impairments comprised:

The movements in the carrying value of the impairment of inventories dur-ing the years ended on 31 December 2013 and 2012 were as follows:

The increases and the reversals in the amount of Euro 1,723,901 and Euro 7,200 respectively are recognised in the caption “Impairment of inventories ((loss-es)/ reversals)” of income statement.

31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Raw, subsidiary and consumable materials 75,350,298 (7,004,010) 68,346,288 81,776,672 (6,117,094) 75,659,578Work in progress 720,560 - 720,560 605,812 - 605,812Finished and intermediate goods 19,257,736 (595,001) 18,662,735 18,649,483 (357,596) 18,291,887Goods for resale 4,129,383 (96,105) 4,033,278 4,243,936 (75,808) 4,168,128Advances on purchases 2,440 - 2,440 310 - 310 99,460,417 (7,695,116) 91,765,301 105,276,213 (6,550,498) 98,725,715

Amounts in Euro 31/12/13 31/12/12

Opening balance 6,550,498 6,287,884Increases 1,723,901 634,159Reversals (7,200) (138,133)Charge-off (66,851) -Foreign currency adjustment (505,232) (233,412)Closing balance 7,695,116 6,550,498

105

31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Raw, subsidiary and consumable materials 75,350,298 (7,004,010) 68,346,288 81,776,672 (6,117,094) 75,659,578Work in progress 720,560 - 720,560 605,812 - 605,812Finished and intermediate goods 19,257,736 (595,001) 18,662,735 18,649,483 (357,596) 18,291,887Goods for resale 4,129,383 (96,105) 4,033,278 4,243,936 (75,808) 4,168,128Advances on purchases 2,440 - 2,440 310 - 310 99,460,417 (7,695,116) 91,765,301 105,276,213 (6,550,498) 98,725,715


_19. FINANCIAL ASSETS

_19.1 CATEGORIES OF FINANCIALASSETS

The categories of financial assets at 31 December 2013 and 2012 are de-tailed as follows:

_19.2 FINANCIAL ASSETS –TRADE RECEIVABLES

At 31 December 2013 and 2012, trade receivables, net of impairments, com-prised:

31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Cash and cash equivalents (Note 4): Cash 305,587 - 305,587 268,965 - 268,965 Liquid bank deposits 25,609,321 - 25,609,321 23,554,412 - 23,554,412 Other cash and cash equivalents 98,408,239 - 98,408,239 48,908,387 - 48,908,387 124,323,147 - 124,323,147 72,731,764 - 72,731,764Financial assets at cost: Trade receivables (Note 19.2) 73,776,844 (25,328,905) 48,447,939 77,802,685 (22,123,192) 55,679,493 Other receivables - current (Note 19.3) 20,796,516 (6,821,398) 13,975,118 86,166,621 (6,127,728) 80,038,893 Other receivables - non-current (Note 19.3) 4,263,185 (1,855,975) 2,407,210 4,495,957 (1,855,975) 2,639,982 98,836,545 (34,006,278) 64,830,267 168,465,263 (30,106,895) 138,358,368 223,159,692 (34,006,278) 189,153,414 241,197,027 (30,106,895) 211,090,132

31/12/13 31/12/12 ACCUMULATED ACCUMULATED GROSS IMPAIRMENT NET BOOK GROSS IMPAIRMENT NET BOOKAmounts in Euro VALUE (NOTE 19.4) VALUE VALUE (NOTE 19.4) VALUE Trade receivables 72,701,299 (25,328,905) 47,372,394 71,932,833 (22,123,192) 49,809,641Trade receivables -related parties (Note 37) 1,075,545 - 1,075,545 5,869,852 - 5,869,852 73,776,844 (25,328,905) 48,447,939 77,802,685 (22,123,192) 55,679,493

107

31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Cash and cash equivalents (Note 4): Cash 305,587 - 305,587 268,965 - 268,965 Liquid bank deposits 25,609,321 - 25,609,321 23,554,412 - 23,554,412 Other cash and cash equivalents 98,408,239 - 98,408,239 48,908,387 - 48,908,387 124,323,147 - 124,323,147 72,731,764 - 72,731,764Financial assets at cost: Trade receivables (Note 19.2) 73,776,844 (25,328,905) 48,447,939 77,802,685 (22,123,192) 55,679,493 Other receivables - current (Note 19.3) 20,796,516 (6,821,398) 13,975,118 86,166,621 (6,127,728) 80,038,893 Other receivables - non-current (Note 19.3) 4,263,185 (1,855,975) 2,407,210 4,495,957 (1,855,975) 2,639,982 98,836,545 (34,006,278) 64,830,267 168,465,263 (30,106,895) 138,358,368 223,159,692 (34,006,278) 189,153,414 241,197,027 (30,106,895) 211,090,132

31/12/13 31/12/12 ACCUMULATED ACCUMULATED GROSS IMPAIRMENT NET BOOK GROSS IMPAIRMENT NET BOOKAmounts in Euro VALUE (NOTE 19.4) VALUE VALUE (NOTE 19.4) VALUE Trade receivables 72,701,299 (25,328,905) 47,372,394 71,932,833 (22,123,192) 49,809,641Trade receivables -related parties (Note 37) 1,075,545 - 1,075,545 5,869,852 - 5,869,852 73,776,844 (25,328,905) 48,447,939 77,802,685 (22,123,192) 55,679,493


The aged analysis of trade receiva-bles, net of impairments, at the bal-ance sheet date was as follows:

_19.3 FINANCIAL ASSETS – OTHER RECEIVABLES

At 31 December 2013 and 2012 other current accounts receivables, net of impairments, comprised:

31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Not yet due 30,471,425 (8,048) 30,463,377 31,288,426 - 31,288,426Past due: 0-90 days 13,614,867 (96,684) 13,518,183 16,356,922 (128,837) 16,228,08590-180 days 1,764,979 (78,518) 1,686,461 5,097,037 (413,891) 4,683,146180-360 days 1,921,667 (918,807) 1,002,860 3,040,910 (729,502) 2,311,408> 360 days 26,003,906 (24,226,848) 1,777,058 22,019,390 (20,850,962) 1,168,428 73,776,844 (25,328,905) 48,447,939 77,802,685 (22,123,192) 55,679,493

31/12/13 31/12/12 ACCUMULATED ACCUMULATED GROSS IMPAIRMENT NET BOOK GROSS IMPAIRMENT NET BOOKAmounts in Euro VALUE (NOTE 19.4) VALUE VALUE (NOTE 19.4) VALUE Other receivables Related parties (Note 37): Loans granted - - - 70,184,660 - 70,184,660 Other transactions 1,194,842 (647,000) 547,842 395,771 - 395,771 Other 13,558,727 (6,174,398) 7,384,329 12,499,132 (6,127,728) 6,371,404 14,753,569 (6,821,398) 7,932,171 83,079,563 (6,127,728) 76,951,835Receivables for accrued income Interest receivable 486,849 - 486,849 469,015 - 469,015 Interest receivable - related parties (Note 37) 2,584,774 - 2,584,774 784,548 - 784,548 Other 2,971,324 - 2,971,324 1,833,495 - 1,833,495 6,042,947 - 6,042,947 3,087,058 - 3,087,058 20,796,516 (6,821,398) 13,975,118 86,166,621 (6,127,728) 80,038,893

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31/12/13 31/12/12 GROSS ACCUMULATED NET BOOK GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE IMPAIRMENT VALUE VALUE IMPAIRMENT VALUE Not yet due 30,471,425 (8,048) 30,463,377 31,288,426 - 31,288,426Past due: 0-90 days 13,614,867 (96,684) 13,518,183 16,356,922 (128,837) 16,228,08590-180 days 1,764,979 (78,518) 1,686,461 5,097,037 (413,891) 4,683,146180-360 days 1,921,667 (918,807) 1,002,860 3,040,910 (729,502) 2,311,408> 360 days 26,003,906 (24,226,848) 1,777,058 22,019,390 (20,850,962) 1,168,428 73,776,844 (25,328,905) 48,447,939 77,802,685 (22,123,192) 55,679,493

31/12/13 31/12/12 ACCUMULATED ACCUMULATED GROSS IMPAIRMENT NET BOOK GROSS IMPAIRMENT NET BOOKAmounts in Euro VALUE (NOTE 19.4) VALUE VALUE (NOTE 19.4) VALUE Other receivables Related parties (Note 37): Loans granted - - - 70,184,660 - 70,184,660 Other transactions 1,194,842 (647,000) 547,842 395,771 - 395,771 Other 13,558,727 (6,174,398) 7,384,329 12,499,132 (6,127,728) 6,371,404 14,753,569 (6,821,398) 7,932,171 83,079,563 (6,127,728) 76,951,835Receivables for accrued income Interest receivable 486,849 - 486,849 469,015 - 469,015 Interest receivable - related parties (Note 37) 2,584,774 - 2,584,774 784,548 - 784,548 Other 2,971,324 - 2,971,324 1,833,495 - 1,833,495 6,042,947 - 6,042,947 3,087,058 - 3,087,058 20,796,516 (6,821,398) 13,975,118 86,166,621 (6,127,728) 80,038,893


_19.4 IMPAIRMENT OF ACCOUNTS RECEIVABLE

The movements in the carrying value of the impairment of accounts recei-vables during the years ended on 31 December 2013 and 2012 were as follows:

The increases and the reversals in the amount of Euro 3,084,123 and Euros 2,449,895, respectively are recognised in the caption “Impairment of accounts receivable ((losses)/ reversals)” of in-come statement.

At 31 December 2013 and 2012 other current accounts receivables net of impairments, comprised:

31/12/13 31/12/12 ACCUMULATED ACCUMULATED GROSS IMPAIRMENT NET BOOK GROSS IMPAIRMENT NET BOOKAmounts in Euro VALUE (NOTE 19.4) VALUE VALUE (NOTE 19.4) VALUE Other receivables Guarantees given to third parties 1,302,305 - 1,302,305 1,408,946 - 1,408,946 Other related parties (Note 37) 550,000 - 550,000 550,000 - 550,000 Other 2,410,880 (1,855,975) 554,905 2,537,011 (1,855,975) 681,036 4,263,185 (1,855,975) 2,407,210 4,495,957 (1,855,975) 2,639,982

31/12/13 31/12/12 OTHER OTHER OTHER OTHER NON CURRENT TRADE RELATED CURRENT NON CURRENT TRADE RELATED CURRENT DEBTORS RECEIVABLES PARTIES DEBTORS DEBTORS RECEIVABLES PARTIES DEBTORS Amounts in Euro (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) TOTAL (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) TOTAL Opening balance 1,855,975 22,123,192 - 6,127,728 30,106,895 1,855,975 24,194,507 4,535,857 6,178,173 36,764,512Change in scope - - - - - - - - - -Increases - 2,414,605 647,000 22,518 3,084,123 - 2,528,179 - 43,961 2,572,140Reversals - (2,445,461) - (4,434) (2,449,895) - (3,588,198) (183,629) (10,855) (3,782,682)Charges - (405,485) - (7,907) (413,392) - (968,462) (4,352,228) (13,942) (5,334,632)Translation adjustment - (224,422) - (10,748) (235,170) - (108,525) - (3,918) (112,443)Transfers - - - - - - 65,691 - (65,691) -Non-current assets held for sale - 3,866,476 - 47,241 3,913,717 - - - - -Closing balance 1,855,975 25,328,905 647,000 6,174,398 34,006,278 1,855,975 22,123,192 - 6,127,728 30,106,895

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31/12/13 31/12/12 ACCUMULATED ACCUMULATED GROSS IMPAIRMENT NET BOOK GROSS IMPAIRMENT NET BOOKAmounts in Euro VALUE (NOTE 19.4) VALUE VALUE (NOTE 19.4) VALUE Other receivables Guarantees given to third parties 1,302,305 - 1,302,305 1,408,946 - 1,408,946 Other related parties (Note 37) 550,000 - 550,000 550,000 - 550,000 Other 2,410,880 (1,855,975) 554,905 2,537,011 (1,855,975) 681,036 4,263,185 (1,855,975) 2,407,210 4,495,957 (1,855,975) 2,639,982

31/12/13 31/12/12 OTHER OTHER OTHER OTHER NON CURRENT TRADE RELATED CURRENT NON CURRENT TRADE RELATED CURRENT DEBTORS RECEIVABLES PARTIES DEBTORS DEBTORS RECEIVABLES PARTIES DEBTORS Amounts in Euro (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) TOTAL (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) TOTAL Opening balance 1,855,975 22,123,192 - 6,127,728 30,106,895 1,855,975 24,194,507 4,535,857 6,178,173 36,764,512Change in scope - - - - - - - - - -Increases - 2,414,605 647,000 22,518 3,084,123 - 2,528,179 - 43,961 2,572,140Reversals - (2,445,461) - (4,434) (2,449,895) - (3,588,198) (183,629) (10,855) (3,782,682)Charges - (405,485) - (7,907) (413,392) - (968,462) (4,352,228) (13,942) (5,334,632)Translation adjustment - (224,422) - (10,748) (235,170) - (108,525) - (3,918) (112,443)Transfers - - - - - - 65,691 - (65,691) -Non-current assets held for sale - 3,866,476 - 47,241 3,913,717 - - - - -Closing balance 1,855,975 25,328,905 647,000 6,174,398 34,006,278 1,855,975 22,123,192 - 6,127,728 30,106,895


_20. NON-CURRENT ASSETS HELD FORSALE

At 30 June 2011, Secil – Companhia Geral de Cal e Cimento, S.A. acquired the entire share capital of Uniconcre-to – Betão Pronto, S.A. (previously denominated Lafarge Betões, S.A.) and of its subsidiaries Eurobetão – Betão Pronto, S.A. and Lusoinertes, S.A. (previously denominated Lafarge Agregados Unipessoal, Lda.). These companies operate in the concrete and aggregates market and owned at the acquisition date twenty seven

concrete plants and four aggregates quarries.

As part of this acquisition, the decision to sell the assets and liabilities presen-ted as non-current assets held for sale results from the requirement by the Competition Authority, as well as from the subsequent internal evaluation carried out by the Group.

At 31 December 2013 and 2012 the assets and liabilities directly associa-ted with non-current assets held for sale are detailed as follows:

Amounts in Euro 31/12/13 31/12/12

ASSETS Property, plant and equipment 1,174,069 2,888,775Trade receivables - 806,453Advances to suppliers - 38,592State and other public entities - 86,909Other receivables - 122,262Deferred assets - 1,130Cash and cash equivalents - 56,493 1,174,069 4,000,614LIABILITIES Deferred tax liabilities 100,265 132,662Trade payables - 132,633Advances from customers - 588State and other public entities - 52,263Other accounts payable - 915,995 100,265 1,234,141 1,073,804 2,766,473

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GROSS ACCUMULATED NET BOOK Amounts in Euro VALUE DEPRECIATION VALUE

Balance at 1 January 2013 14,451,129 (11,562,353) 2,888,775Depreciation (Note 34) - (60,019) (60,019)Derecognition of non-current assets held for sale (Note 11) (13,148,954) 11,494,266 (1,654,688)Balance at 31 December 2013 1,302,175 (128,106) 1,174,069

During the current period as a result of (i) the difficulties in completing the plan of sale and (ii) internal re-assessment, the assets and liabilities of the subsidi-ary Uniconcreto – Betão Pronto, S.A. no longer qualify as non-current assets held for sale. As at 31 December 2013, the assets and liabilities held for sale, correspond to concrete plants whose sales follow the imposition placed by the Competition Authority.

The movements in tangible fixed as-sets, in the year ended 31 December 2013 are as follows:


_21. CAPITAL AND RESERVES ATTRIBUTABLE TO THE COMPANY’SEQUITY HOLDERS

_21.1 PAID-UP CAPITAL AND TREASURYSHARES

At balance sheet date, Secil’s share capital was fully subscribed and paid up, represented by 52,920,000 shares with a unit nominal value of Euro 5.

At 31 December 2013 and 2012, the following entities had relevant holdin-gs in the company’s capital:

At 23 December 2013, Great Earth - Projectos, S.A. incorporated by merg-er, the company Cimentospar – Par-ticipações Sociais, S.G.P.S., S.A., and now holds, as of that date, the titled and registered shares representing the share capital of Secil – Companhia Geral de Cal e Cimento, S.A..

Nº OF SHARES % OF CAPITAL HELD NAME 31/12/13 31/12/12 31/12/13 31/12/12

Cimentospar - Participações Sociais S.G.P.S., S.A. - 48,734,540 - 92.091%Great Earth – Projectos, S.A. 48,734,540 - 92.091% -Longapar, S.G.P.S., S.A. 1,000 1,000 0.002% 0.002%Treasury shares 4,184,460 4,184,460 7.907% 7.907% 52,920,000 52,920,000 100.000% 100.000%

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Treasury shares stated on the consoli-dated financial statements at 31 De-cember 2013 and 2012 were held by the following entities:

Company law prescribes that at least 5% of annual net income must be transferred to the legal reserve until this is equal to at least 20% of the issued capital.

This reserve cannot be distributed unless in the event of the company’s winding up: however, it may be used to absorb losses after other reserves have been fully utilised or can be in-corporated into issued capital.

Hewbol, S.G.P.S, Lda., is a subsidiary of Secil Group, so, the 366,100 shares held by itself, are recorded as own shares in the Group consolidated financial state-ments.

_21.2 LEGAL RESERVES

At 31 December 2013 and 2012 legal reserves comprised:

TREASURY SHARES 31/12/13 31/12/12

Secil, S.A. 3,818,360 3,818,360Hewbol, S.G.P.S., S.A. 366,100 366,100 4,184,460 4,184,460

Amounts in Euro 31/12/13 31/12/12 Opening balance 40,680,725 39,533,989Appropriation fo previous year’s net income - 1,146,736Closing balance 40,680,725 40,680,725


_21.3 OTHER RESERVES

At 31 December 2013 and 2012, the other reserves comprised:

Other reserves correspond to free re-serves available for distribution to share-holders and constituted through the ap-propriation of prior years’ earnings.

Amounts in Euro 31/12/12 31/12/11 Opening balance 94,623,691 129,368,944Distribution of reserves - (56,533,227)Appropriation of previous year’s net income - 21,787,974Closing balance 94,623,691 94,623,691

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_21.4 REVALUATION RESERVE

The movements in revaluation reserves during the years ended on 31 Decem-ber 2013 and 2012 were as follows:

The carrying value of Euro 14,242,547 is not available for distribution to the Company’s shareholders.

_21.5 OTHER CHANGES IN CAPITAL AND RESERVES ATTRIBUTABLE TO THE COMPANY’S EQUITY HOLDERS

Other changes in capital and reserves attributable to the Company’s equity holders were as follows:

Amounts in Euro 31/12/13 31/12/12 Opening balance 14,450,157 14,658,895Surplus realised in the period (239,182) (240,482)Deferred tax in the period 31,572 31,744Closing balance 14,242,547 14,450,157

Amounts in Euro 31/12/13 31/12/12

Translation differences (105,387,863) (81,286,956)Variances and changes in actuarial assumptions 3,999,956 5,009,047Deferred tax - variances and changes in actuarial assumptions (1,212,443) (1,511,128)Government grants 1,212,582 1,359,019Deferred tax - government grants (338,436) (410,398)Emission right carbon 3,808,338 1,525,075Deferred tax- emission right carbon (1,080,167) (444,904)Fair value reserve for hedging derivatives (906,941) (2,439,672)Deferred tax - fair value reserve for hedging derivatives 222,201 646,514Equity interest in financial investments (Note 15) 29,434 29,434 (99,653,339) (77,523,969)


_21.5.1 FOREIGN CURRENCY TRANSLATION RESERVES

The carrying value of foreign currency translation reserves of Euro 105,387,863 relates to currency differences arising on the translation of the financial state-

ments of the companies, goodwill and loans which qualify as net extensions of the net investment, principally those in Tunisia, Lebanon, Angola and Brazil. The movements registered in foreign currency translation reserves in 2013 and 2012 were as follows:

31 DECEMBER 2013Amounts in Euro OPENING BALANCE DECREASES CLOSING BALANCE Société des Ciments de Gabès: Translation of financial statements (51,948,966) (7,443,401) (59,392,367) Translation of positive consolidation differences (Note 10) (23,864,291) (3,036,593) (26,900,884)Secil Angola, S.A.R.L.: Translation of financial statements 2,044,160 (498,879) 1,545,281 Extension of the net investment (50,722) (1,205,911) (1,256,633) Translation of positive consolidation differences (Note 10) 56,500 (78,017) (21,517)Secil - Companhia de Cimentos do Lobito, S.A.: Translation of financial statements (566,918) (104,215) (671,133)Ciment de Sibline, SAL: Translation of financial statements (6,695,892) (2,506,703) (9,202,595) Translation of positive consolidation differences (Note 10) (241,594) (510,178) (751,772)I3 Participações e Serviços, Ltda. Translation of financial statements (19,233) (21,441) (40,674)Supremo Cimentos, S.A. Translation of financial statements - (747,299) (747,299)Nsospe Empreendimentos e Participações, SA Translation of financial statements - (7,948,270) (7,948,270) (81,286,956) (24,100,907) (105,387,863)

31 DECEMBER 2012 Amounts in Euro OPENING BALANCE DECREASES CLOSING BALANCE Société des Ciments de Gabès: Translation of financial statements (47,479,176) (4,469,790) (51,948,966) Translation of positive consolidation differences (Note 10) (22,098,232) (1,766,059) (23,864,291)Secil Angola, S.A.R.L.: Translation of financial statements 2,263,409 (219,249) 2,044,160 Extension of the net investment 498,283 (549,005) (50,722) Translation of positive consolidation differences (Note 10) 92,020 (35,520) 56,500Secil - Companhia de Cimentos do Lobito, S.A.: Translation of financial statements (562,158) (4,760) (566,918)Ciment de Sibline, SAL: Translation of financial statements (5,671,492) (1,024,400) (6,695,892) Translation of positive consolidation differences (Note 10) (9,330) (232,264) (241,594)I3 Participações e Serviços, Ltda. Translation of financial statements 5,506 (24,739) (19,233) (72,961,170) (8,325,786) (81,286,956)

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31 DECEMBER 2013Amounts in Euro OPENING BALANCE DECREASES CLOSING BALANCE Société des Ciments de Gabès: Translation of financial statements (51,948,966) (7,443,401) (59,392,367) Translation of positive consolidation differences (Note 10) (23,864,291) (3,036,593) (26,900,884)Secil Angola, S.A.R.L.: Translation of financial statements 2,044,160 (498,879) 1,545,281 Extension of the net investment (50,722) (1,205,911) (1,256,633) Translation of positive consolidation differences (Note 10) 56,500 (78,017) (21,517)Secil - Companhia de Cimentos do Lobito, S.A.: Translation of financial statements (566,918) (104,215) (671,133)Ciment de Sibline, SAL: Translation of financial statements (6,695,892) (2,506,703) (9,202,595) Translation of positive consolidation differences (Note 10) (241,594) (510,178) (751,772)I3 Participações e Serviços, Ltda. Translation of financial statements (19,233) (21,441) (40,674)Supremo Cimentos, S.A. Translation of financial statements - (747,299) (747,299)Nsospe Empreendimentos e Participações, SA Translation of financial statements - (7,948,270) (7,948,270) (81,286,956) (24,100,907) (105,387,863)

31 DECEMBER 2012 Amounts in Euro OPENING BALANCE DECREASES CLOSING BALANCE Société des Ciments de Gabès: Translation of financial statements (47,479,176) (4,469,790) (51,948,966) Translation of positive consolidation differences (Note 10) (22,098,232) (1,766,059) (23,864,291)Secil Angola, S.A.R.L.: Translation of financial statements 2,263,409 (219,249) 2,044,160 Extension of the net investment 498,283 (549,005) (50,722) Translation of positive consolidation differences (Note 10) 92,020 (35,520) 56,500Secil - Companhia de Cimentos do Lobito, S.A.: Translation of financial statements (562,158) (4,760) (566,918)Ciment de Sibline, SAL: Translation of financial statements (5,671,492) (1,024,400) (6,695,892) Translation of positive consolidation differences (Note 10) (9,330) (232,264) (241,594)I3 Participações e Serviços, Ltda. Translation of financial statements 5,506 (24,739) (19,233) (72,961,170) (8,325,786) (81,286,956)


_21.5.2 CHANGES TO ACTUARIAL ASSUMPTIONS

The movements in the changes to actuarial assumptions during the ye-ars ended on 31 December 2013 and 2012, apportioned between the Company’s equity holders and mino-rity interests were as follows:

_21.5.3 GOVERNMENT GRANTS

INVESTMENT GRANTS

The movements in investment grants during the years ended on 31 Decem-ber 2013 and 2012 were as follows:

31/12/13 31/12/12 HOLDERS HOLDERS OF PARENT OF PARENT Amounts in Euro COMPANY’S EQUITY MINORITIES TOTAL COMPANY’S EQUITY MINORITIES TOTAL

Opening balance 5,009,047 296,490 5,305,537 191,417 272,489 463,906 Movement in the period (Note 23.2) (1,009,091) (10,822) (1,019,913) 4,817,630 24,001 4,841,631 Closing balance 3,999,956 285,668 4,285,624 5,009,047 296,490 5,305,537

Amounts in Euro 31/12/13 31/12/12 Opening balance 1,389,229 2,353,688Translation adjustment (66,129) (39,187)Grants received 1,628,403 -Grants recognised in the income statement (Note 32) (1,687,461) (925,272)Closing balance 1,264,042 1,389,229Government grants apportioned to: Company’s equity holders 1,212,582 1,359,019Minority interests 51,460 30,210 1,264,042 1,389,229

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EMISSION RIGHT SUBSIDIES

The movements in emission right subsi-dies during the years ended on 31 De-cember 2013 and 2012 were as follows:

31/12/13 31/12/12 HOLDERS HOLDERS OF PARENT OF PARENT Amounts in Euro COMPANY’S EQUITY MINORITIES TOTAL COMPANY’S EQUITY MINORITIES TOTAL

Opening balance 5,009,047 296,490 5,305,537 191,417 272,489 463,906 Movement in the period (Note 23.2) (1,009,091) (10,822) (1,019,913) 4,817,630 24,001 4,841,631 Closing balance 3,999,956 285,668 4,285,624 5,009,047 296,490 5,305,537

Amounts in Euro 31/12/13 31/12/12 Opening balance 1,525,075 850,481Scope change - (6,242)Rights granted in the period (Note 14) 10,640,176 24,936,244Rights repealed (26,364) -Subsidy recognised in the income statement for the period (Note 32) (6,538,658) (16,341,609)Rights sold in the period (Note 14) (1,791,891) (7,913,799)Closing balance 3,808,338 1,525,075Emission right subsidies apportioned to: Company’s equity holders 3,808,338 1,525,075Minority interests - - 3,808,338 1,525,075


_21.5.4 FAIR VALUE RESERVE FOR HEDGING DERIVATIVES

The movements in the fair value reser-ve for hedging derivatives during the years ended on 31 December 2013 and 2012 were as follows:

_21.6 APPROPRIATION OF PREVIOUSPERIOD’S NET INCOME

In terms of a resolution approved at Secil’s General Meeting held on 27 May 2013, the net losses for the period ended 31 December 2012 amounting to Euro 38,459,143, were transferred to “Retained earnings”.

31/12/13 31/12//12 INTEREST RATE INTEREST RATE EU EMMISSION SWAPS SWAPS ALLOWANCES Amounts in Euro (NOTE 39) (NOTE 39) (NOTE 39) TOTAL Opening balance (2,439,672) (1,035,823) 1,574,504 538,681Maturity - - (1,574,504) (1,574,504)Fair value increases 1,532,731 - - -Fair value decreases - (1,403,849) - (1,403,849)Closing balance (906,941) (2,439,672) - (2,439,672)

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_22. PROVISIONS

The movements in provisions during the years ended on 31 December 2013 and 2012 were as follows:

The Euro 3,752,209 increase (2012 in-crease in Euro 3,307,606) recorded in the statement of profit and loss under the caption “provisions”, includes:

(I) The increase of Euro 5,165,013 (Euro 4,235,902 in 2012) recorded un-der caption “Others”;

(II) The total reversals of Euro 1,412,804 (Euro 943,623 in 2012).

NEGATIVE ENVIRONMENTAL Amounts in Euro EQUITY REMEDIATION OTHER TOTAL

Balance at 1 January 2012 5,134,257 6,742,944 10,337,470 22,214,671Increases 406,523 15,327 4,235,902 4,657,752Financial discount (Note 35) - 337,134 - 337,134Disposals (58,041) - - (58,041)Charges (5,460,326) (24,185) 2,275,379 (3,209,132)Reversals - (117,630) (825,993) (943,623)Translation adjustment - - (87,290) (87,290)Transfers (22,413) - (4,010,642) (4,033,055)Balance at 31 December 2012 - 6,953,590 11,924,826 18,878,416Increases - - 5,165,013 5,165,013Financial discount (Note 35) - 356,093 - 356,093Charges - (51,530) (1,462,342) (1,513,872)Reversals - (119,981) (1,292,823) (1,412,804)Translation adjustment - - (178,623) (178,623)Balance at 31 December 2013 - 7,138,172 14,156,051 21,294,223


_23. EMPLOYEE BENEFITS

As referred to in Notes 3.16 and 3.17, the Group grants its employees and their families a number of post-employ-ment and other long-term benefits.

The evolution in employee benefit obli-gations assumed by the Group, stated in the consolidated balance sheet at 31 December 2013 and 2012, was as follows:

31 DECEMBER 2013 NET PROFIT/(LOSS) FOR THE YEAR PERSONNEL OTHER COSTS CHANGES CURRENCY PAYMENTS PREMIUMS PAID/ CONTRIBUTIONS TO CLOSINGAmounts in Euro OPENING BALANCE (NOTE 31) IN EQUITY ADJUSTMENT MADE REDEMPTIONS THE FUNDS BALANCE

Post-employment benefits - defined contribution Contributions - 778,972 - - (778,972) - - - “Reserve” account (1,012,191) - - - 125,018 - - (887,173) (1,012,191) 778,972 - - (653,954) - - (887,173) Post-employments benefits - defined benefit Group pensions liabilities 6,739,718 311,421 (123,814) - (964,431) - - 5,962,894 Funds’ shortfall/ (surplus) (4,933,570) (237,312) 1,215,914 (9,331) - (41,114) (2,979) (4,008,392) Liabilities for retirement subsidies 430,715 71,223 (2,908) (33,520) (68,649) - 396,861 Liabilities for healthcare 983,936 36,302 (69,279) - (436,164) - - 514,795 3,220,799 181,634 1,019,913 (42,851) (1,469,244) (41,114) (2,979) 2,866,158 Long-term benefits Liabilities for long-service awards 551,207 73,255 - - (89,796) - - 534,666 Liability for death subsidy 53,853 (1,175) - - - - - 52,678 605,060 72,080 - - - (89,796) - - 587,344 2,813,668 1,032,686 1,019,913 (42,851) (2,212,994) (41,114) (2,979) 2,566,329

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31 DECEMBER 2013 NET PROFIT/(LOSS) FOR THE YEAR PERSONNEL OTHER COSTS CHANGES CURRENCY PAYMENTS PREMIUMS PAID/ CONTRIBUTIONS TO CLOSINGAmounts in Euro OPENING BALANCE (NOTE 31) IN EQUITY ADJUSTMENT MADE REDEMPTIONS THE FUNDS BALANCE

Post-employment benefits - defined contribution Contributions - 778,972 - - (778,972) - - - “Reserve” account (1,012,191) - - - 125,018 - - (887,173) (1,012,191) 778,972 - - (653,954) - - (887,173) Post-employments benefits - defined benefit Group pensions liabilities 6,739,718 311,421 (123,814) - (964,431) - - 5,962,894 Funds’ shortfall/ (surplus) (4,933,570) (237,312) 1,215,914 (9,331) - (41,114) (2,979) (4,008,392) Liabilities for retirement subsidies 430,715 71,223 (2,908) (33,520) (68,649) - 396,861 Liabilities for healthcare 983,936 36,302 (69,279) - (436,164) - - 514,795 3,220,799 181,634 1,019,913 (42,851) (1,469,244) (41,114) (2,979) 2,866,158 Long-term benefits Liabilities for long-service awards 551,207 73,255 - - (89,796) - - 534,666 Liability for death subsidy 53,853 (1,175) - - - - - 52,678 605,060 72,080 - - - (89,796) - - 587,344 2,813,668 1,032,686 1,019,913 (42,851) (2,212,994) (41,114) (2,979) 2,566,329


31 DECEMBER 2012 NET PROFIT/(LOSS) FOR THE YEAR PERSONNEL OTHER COSTS CHANGES CURRENCY PAYMENTS PLAN CUTS/ PREMIUMS PAID/ CONTRIBUTIONS TO CLOSINGAmounts in Euro OPENING BALANCE (NOTE 31) IN EQUITY ADJUSTMENT TRANSFERS MADE LIQUIDATIONS REDEMPTIONS THE FUNDS BALANCE

Post-employment benefits - defined contribution Contributions - 1,057,564 - - - (1,057,564) - - - - “Reserve” account (521,893) - - - - 398,642 (888,940) - - (1,012,191) (521,893) 1,057,564 - - - (658,922) (888,940) - - (1,012,191) Post-employments benefits - defined benefit Group pensions liabilities 7,871,240 381,509 (375,055) - (92,977) (1,044,999) - - - 6,739,718 Funds’ shortfall/ (surplus) (1,989,284) (165,630) (3,615,404) (4,489) 92,977 - 888,940 (50,011) (90,669) (4,933,570) Liabilities for retirement subsidies 433,921 29,837 (20,974) (12,069) - - - - - 430,715 Liabilities for healthcare 12,118,893 (9,593,653) (830,198) - - (711,106) - - - 983,936 18,434,770 (9,347,937) (4,841,631) (16,558) - (1,756,105) 888,940 (50,011) (90,669) 3,220,799 Long-term benefits Liabilities for long-service awards 916,628 (27,586) - - - (337,835) - - - 551,207 Liability for death subsidy 71,736 (13,723) - - - (4,160) - - - 53,853 988,364 (41,309) - - - (341,995) - - - 605,060 18,901,241 (8,331,682) (4,841,631) (16,558) - (2,757,022) - (50,011) (90,669) 2,813,668

127

In September 2010, the original con-tract setting up the Secil Pension Fund was amended (it is now called the Secil Group Pension Fund), and the new amended fund contract came into force on 1 January 2010.

The Fund’s members are Secil and its subsidiaries:

(I) CMP – Cimentos Maceira e Pataias, S.A. and Unibetão –Industrias de Betão Preparado, S.A., which integrat-ed (and simultaneously extinguished) their Pension Funds into the Secil Pen-sion Fund;

(II) Cimentos Madeira, Lda., which in-tegrated (and simultaneously extin-

guished) its insurance policy into Secil Pension Fund;

(III) Britobetão – Central de Betão, Lda., Secil Britas, S.A. and Quimipe-dra – Secil Britas, Calcários e Deriva-dos, Lda.

The subsidiary Cimentos Madeira changed, from 1 January 2012 on-wards, to a defined contribution plan the previous defined benefit plan which guaranteed to their employees in the form of a pension complement for age, invalidity, early-retirement and survival pensions.

The net asset resulting from the tran-sition of the active employees of Ci-

mentos Madeira from a defined ben-efit plan to a defined contribution plan, after the transfer of past service cost liabilities with reference to 31 Decem-ber 2011, ensuring the funding of the liabilities with retirees included in the previous defined benefit plan, was transferred to the “Reserve Account” of Cimentos Madeira and allocated to the new defined contribution plan.

The Secil Group Pension Fund is the financial vehicle for the payment of the benefits contemplated by the Pension Plans of each member (now jointly managed) and which are described in Notes 23.1 and 23.2.

31 DECEMBER 2012 NET PROFIT/(LOSS) FOR THE YEAR PERSONNEL OTHER COSTS CHANGES CURRENCY PAYMENTS PLAN CUTS/ PREMIUMS PAID/ CONTRIBUTIONS TO CLOSINGAmounts in Euro OPENING BALANCE (NOTE 31) IN EQUITY ADJUSTMENT TRANSFERS MADE LIQUIDATIONS REDEMPTIONS THE FUNDS BALANCE

Post-employment benefits - defined contribution Contributions - 1,057,564 - - - (1,057,564) - - - - “Reserve” account (521,893) - - - - 398,642 (888,940) - - (1,012,191) (521,893) 1,057,564 - - - (658,922) (888,940) - - (1,012,191) Post-employments benefits - defined benefit Group pensions liabilities 7,871,240 381,509 (375,055) - (92,977) (1,044,999) - - - 6,739,718 Funds’ shortfall/ (surplus) (1,989,284) (165,630) (3,615,404) (4,489) 92,977 - 888,940 (50,011) (90,669) (4,933,570) Liabilities for retirement subsidies 433,921 29,837 (20,974) (12,069) - - - - - 430,715 Liabilities for healthcare 12,118,893 (9,593,653) (830,198) - - (711,106) - - - 983,936 18,434,770 (9,347,937) (4,841,631) (16,558) - (1,756,105) 888,940 (50,011) (90,669) 3,220,799 Long-term benefits Liabilities for long-service awards 916,628 (27,586) - - - (337,835) - - - 551,207 Liability for death subsidy 71,736 (13,723) - - - (4,160) - - - 53,853 988,364 (41,309) - - - (341,995) - - - 605,060 18,901,241 (8,331,682) (4,841,631) (16,558) - (2,757,022) - (50,011) (90,669) 2,813,668


_23.1 POST-EMPLOYMENT BENEFITS – DEFINED CONTRIBUTION PLANS

The defined contribution pension sche-me managed by the Secil Group Pen-sion Fund is funded by member com-panies and beneficiary contributions and cover the following:

(I) The Secil and CMP Plans include all the employees who at 31 December 2009 had permanent employment con-tracts (and who are covered by the de-fined benefit pension scheme in force at the companies) and who have opted to transfer to these Plans, and all new permanent employees from 1 January 2010, as well as members of the Board of Directors;

(II) The Unibetão and Britobetão Plans, include all employees with a permanent employment contract on 31 December 2009 entered into under the CCT (col-lective employment agreement) conclu-ded between APEB and FETESE and, all new permanent employees admitted

from 1 January 2010, with the excep-tion of Unibetão employees covered by the CCT concluded between APEB and FEVICCOM, who continue to benefit from the defined benefit pension sche-me, as well as members of the Board of Directors;

(III) Betomadeira Plan includes all the active employees that as at December, 31 2010, had non term labour contracts and were included in the Collective Work Agreement between APEB – As-sociação Portuguesa das Empresas de Betão Pronto and FETESE – Federação dos Sindicatos dos Trabalhadores de Serviços and others;

(IV) The Secil Britas Plan, include all em-ployees with a permanent employment contract on 31 December 2009 and all new permanent employees from 1 Ja-nuary 2010, as well as members of the Board of Directors;

(V) Eurobetão Plan includes all the em-ployees without a term labour contract

as at October 31, 2011 and all the em-ployees with non-term labour contracts at the same date. This plan also inclu-des the board members;

(VI) Cimentos Madeira Plan includes all the employees without a term labour contract as at January, 1 2012 (and that were included in the defined be-nefit plan in force in the Company) and all the employees contracted with non term labour contracts after that date. This plan also includes the board mem-bers;

(VII) Brimade Plan includes all the em-ployees without a term labour contract as at July 1, 2012 and all the employe-es with non-term labour contracts after that date.

_23.2 POST-EMPLOYMENT BENEFITS – DEFINED BENEFIT PLANS

The costs incurred with defined benefit plans in the years ended 31 December 2013 and 2012 were as follows:

31 DECEMBER 2013 EXPECTED GAINS CURRENT INTEREST RETURN ON ON PLAN (NOTE 31)Amounts in Euro SERVICES COST PLAN ASSETS CUTS TOTAL

Group pension liabilities - 311,421 - - 311,421Liabilities for pensions with separate fund 15,757 1,072,308 (1,318,329) (7,048) (237,312)Liabilities for death and retirement subsidies 29,298 41,925 - - 71,223Liabilities for healthcare 13,401 22,901 - - 36,302 58,456 1,448,555 (1,318,329) (7,048) 181,634

129

31 DECEMBER 2013 EXPECTED GAINS CURRENT INTEREST RETURN ON ON PLAN (NOTE 31)Amounts in Euro SERVICES COST PLAN ASSETS CUTS TOTAL

Group pension liabilities - 311,421 - - 311,421Liabilities for pensions with separate fund 15,757 1,072,308 (1,318,329) (7,048) (237,312)Liabilities for death and retirement subsidies 29,298 41,925 - - 71,223Liabilities for healthcare 13,401 22,901 - - 36,302 58,456 1,448,555 (1,318,329) (7,048) 181,634


In the period ended December, 31 2012 was recorded the amount of Euro 10,392,571 regarding the “curtailment” in the defined benefit plan - healthcare.

The following gains and losses were recognised directly in equity in the years ended 31 December 2013 and 2012:

31 DECEMBER 2012 EXPECTED GAINS CURRENT INTEREST RETURN ON ON PLAN CHANGES (NOTE 31)Amounts in Euro SERVICES COST PLAN ASSETS CUTS IN PLAN TOTAL

Group pension liabilities - 381,509 - - - 381,509Liabilities for pensions with separate fund 207,522 1,298,187 (1,533,261) (138,078) - (165,630)Liabilities for death and retirement subsidies 64,471 8,275 - - (42,909) 29,837Liabilities for healthcare 194,153 604,765 - - (10,392,571) (9,593,653) 466,146 2,292,736 (1,533,261) (138,078) (10,435,480) (9,347,937))

31 DECEMBER 2013 ACTUARIAL GAINS AND LOSSES OTHER PLAN ASSETS TOTAL DEFERRED Amounts in Euro VARIANCES EST. VS ACTUAL (NOTE 21.5.2) TAX NET

Group pension liabilities 123,814 - 123,814 (39,051) 84,763Liabilities for pensions with separate fund (511,185) (704,729) (1,215,914) 365,503 (850,411)Liabilities for death and retirement subsidies 2,908 - 2,908 (6,126) (3,218)Liabilities for healthcare 69,279 - 69,279 (21,068) 48,211 (315,184) (704,729) (1,019,913) 299,258 (720,655)


Group pension liabilities 375,055 - 375,055 (118,182) 256,873Liabilities for pensions with separate fund 1,374,189 2,241,215 3,615,404 1,078,569) 2,536,835Liabilities for death and retirement subsidies 20,974 - 20,974 (5,693) 15,281Liabilities for healthcare 830,198 - 830,198 (250,123) 580,075 2,600,416 2,241,215 4,841,631 (1,452,567) 3,389,064

131

In the period ended December 31, 2013 was recorded the amount of Euro 1,019,913 in actuarial losses, re-lated to the changing of actuarial as-

sumptions occurred during the period, namely the salary increase rate, the pension trend rate and the discount rate (Note 23.2.2.).

The costs reported relate to the de-fined benefit plans in the Group and detailed below.

31 DECEMBER 2012 EXPECTED GAINS CURRENT INTEREST RETURN ON ON PLAN CHANGES (NOTE 31)Amounts in Euro SERVICES COST PLAN ASSETS CUTS IN PLAN TOTAL

Group pension liabilities - 381,509 - - - 381,509Liabilities for pensions with separate fund 207,522 1,298,187 (1,533,261) (138,078) - (165,630)Liabilities for death and retirement subsidies 64,471 8,275 - - (42,909) 29,837Liabilities for healthcare 194,153 604,765 - - (10,392,571) (9,593,653) 466,146 2,292,736 (1,533,261) (138,078) (10,435,480) (9,347,937))


Group pension liabilities 123,814 - 123,814 (39,051) 84,763Liabilities for pensions with separate fund (511,185) (704,729) (1,215,914) 365,503 (850,411)Liabilities for death and retirement subsidies 2,908 - 2,908 (6,126) (3,218)Liabilities for healthcare 69,279 - 69,279 (21,068) 48,211 (315,184) (704,729) (1,019,913) 299,258 (720,655)


Group pension liabilities 375,055 - 375,055 (118,182) 256,873Liabilities for pensions with separate fund 1,374,189 2,241,215 3,615,404 1,078,569) 2,536,835Liabilities for death and retirement subsidies 20,974 - 20,974 (5,693) 15,281Liabilities for healthcare 830,198 - 830,198 (250,123) 580,075 2,600,416 2,241,215 4,841,631 (1,452,567) 3,389,064


_23.2.1 DESCRIPTION OF DEFINED BENEFIT PLANS

DEFINED BENEFIT PLANS WITH FUNDS UNDER EXTERNAL MANAGEMENT

OBLIGATIONS FOR COMPLEMENTARY RETI-REMENT AND SURVIVORS’ PENSIONS AND RETIREMENT ALLOWANCES

Secil and its subsidiaries:

(I) CMP- Cimentos Maceira e Pataias, S.A.;

(II) Unibetão - Industrias de Betão Pre-parado, S.A.;

(III) Cimentos Madeira, Lda.;

(IV) Betomadeira – Betões e Britas da Madeira, S.A.;

(V) Societé des Ciments de Gabès;

have assumed the commitment to pay their employees amounts by way of complementary retirement, infirmity, early retirement and survivors’ pen-sions, as well as a retirement allowan-ces.

The obligations related to these bene-fits are funded by externally managed funds, or covered by insurance poli-cies.

The plans are assessed every six mon-ths, at the dates of the closing of the in-terim and annual financial statements, by qualified and independent actuaries and performed in accordance with the projected unit credit methodology.

DEFINED BENEFIT PLANS MANAGED BY THE GROUP

OBLIGATIONS FOR COMPLEMENTARYRETIREMENT AND SURVIVORS’ PENSIONS

The obligations relating to Secil’s re-tirees at the date the Pension Fund was constituted, 31 December 1987, are guaranteed directly by Secil. Simi-larly, the obligations assumed by the subsidiarie Secil Martingança, S.A., are guaranteed directly by the company. At 26 June 2012, the obligations of Cimentos Madeira, Lda. and Betoma-deira- Betões e Britas da Madeira, S.A. of all retirees and pensioners who were receiving a pension, were transferred to the Defined Benefits Pension Plan of Cimentos Madeira which joined the Secil’s Pension Fund.

These plans are also assessed every six months by independent entities in accordance with the capital cover me-thodology corresponding to premiums of the immediate life annuities for the valuation of obligations to current pen-sioners and the projected unit credit methodology for valuing obligations of current employees.

133

HEALTHCARE OBLIGATIONS

Secil and its subsidiaries: CMP- Cimen-tos Maceira e Pataias, S.A., Cimentos Madeira, Lda. and Secil Britas, S.A. provide their employees with a health-care scheme which complements the national health plan and is available to their families, early retirees and retirees and widows, through an healthcare in-surance policy contracted.

OBLIGATIONS FOR RETIREMENT BENEFITS

The following subsidiaries undertake the commitment to their employees to pay a retirement and infirmity subsidy, with the following criteria for being awarded:

_23.2.2 LIABILITIES AND CURRENT PERIOD MOVEMENTS

ACTUARIAL ASSUMPTIONS IN VALUATION OF OBLIGATIONS

The actuarial valuation performed by independent entities at 31 December 2013 and 2013 of obligations for past services were based on the following assumptions:

(I) at Secil Angola, S.A.R.L. and Secil Lobito, S.A. (Angola), on retirement date, pursuant to the General Labour Law 2/2000, a retirement subsidy which is equivalent to one quarter of the last salary earned multiplied by the number of years service at the company;

(II) at Societé des Ciments de Gabès (Tunísia), on retirement date, based on the Collective Employment Agreement, article 52, a retirement subsidy which is equivalent to: (i) 2 months of the last salary if the employee has less than 30 years service at the company and (ii) 3 months of the last salary if the em-ployee has 30 years or more service at the company.

31/12/13 31/12/12 Social Security Benefits Formula Decree-Law 187/2007 Decree-Law 187/2007 of 10 May of 10 MayDisability tables EKV 80 EKV 80 Mortality tables TV 88/90 TV 88/90Salary increase rate 1.00% 1.50%Technical interest rate 4.50% 5.00%Pension trend rate 0.45% 0.90%Healthcare cost trend rate 4.60% 4.60%


LIABILITIES FOR PAST SERVICES WITH POST-EMPLOYMENT BENEFIT AND SURVIVOR PLANS

According to the actuarial valuation

The liabilities of the Group registered the following evolution during the years ended 31 December 2013 and 2012:

at 31 December 2013 and 2012, the present value of the post-employment obligations and market values of the funds/insurance policies allocated to them, are as follows:

31/12/13 31/12/12 PLAN INSURANCE ASSUMED PLAN INSURANCE ASSUMED Amounts in Euro FUND POLICY BY THE GROUP TOTAL FUND POLICY BY THE GROUP TOTAL

Liabilities for past services - Current employees 142,821 270,061 - 412,882 244,706 266,623 - 511,329 - Retirees 21,255,939 - 5,962,894 27,218,833 22,218,813 - 6,739,718 28,958,531 - Market value of the funds (25,499,746) (177,467) - (25,677,213) (27,491,958) (171,754) - (27,663,712)Shortfall / (surplus) (4,100,986) 92,594 5,962,894 1,954,502 (5,028,439) 94,869 6,739,718 1,806,148


Liabilities at beginning of the year 22,463,519 266,623 6,739,718 29,469,860 26,933,324 1,586,388 7,871,240 36,390,952 Translation adjustment - (26,697) - (26,697) - (14,910) - (14,910)Amounts registered in net income/(loss) for the year: Current services 7,647 8,110 - 15,757 197,946 9,576 - 207,522 Costs with past services - - - - - - - - Interest cost 1,057,667 14,641 311,421 1,383,729 1,281,590 16,597 381,509 1,679,696 Expected return on plan assets (1,309,088) (9,241) - (1,318,329) (1,468,161) (65,100) - (1,533,261) Losses / (Gains) on curtailments (7,048) - - (7,048) (138,078) - - (138,078)Amounts recorded in shareholders’ equity: Actuarial gains and losses 475,862 35,323 (123,814) 387,371 (1,421,879) 47,690 (375,055) (1,749,244) Pension fund’s expected return 1,309,088 9,241 - 1,318,329 1,468,161 65,100 - 1,533,261 Retirements - (27,939) - (27,939) - (79,320) - (79,320)Transfer of responsabilities to the fund - - - - 1,392,375 (1,299,398) (92,977) - Curtailments plans - - - - (3,054,120) - - (3,054,120)Pensions paid in the year (2,598,887) - (964,431) (3,563,318) (2,727,639) - (1,044,999) (3,772,638)Liabilities by the end of the year 21,398,760 270,061 5,962,894 27,631,715 22,463,519 266,623 6,739,718 29,469,860 0

135


Liabilities for past services - Current employees 142,821 270,061 - 412,882 244,706 266,623 - 511,329 - Retirees 21,255,939 - 5,962,894 27,218,833 22,218,813 - 6,739,718 28,958,531 - Market value of the funds (25,499,746) (177,467) - (25,677,213) (27,491,958) (171,754) - (27,663,712)Shortfall / (surplus) (4,100,986) 92,594 5,962,894 1,954,502 (5,028,439) 94,869 6,739,718 1,806,148


Liabilities at beginning of the year 22,463,519 266,623 6,739,718 29,469,860 26,933,324 1,586,388 7,871,240 36,390,952 Translation adjustment - (26,697) - (26,697) - (14,910) - (14,910)Amounts registered in net income/(loss) for the year: Current services 7,647 8,110 - 15,757 197,946 9,576 - 207,522 Costs with past services - - - - - - - - Interest cost 1,057,667 14,641 311,421 1,383,729 1,281,590 16,597 381,509 1,679,696 Expected return on plan assets (1,309,088) (9,241) - (1,318,329) (1,468,161) (65,100) - (1,533,261) Losses / (Gains) on curtailments (7,048) - - (7,048) (138,078) - - (138,078)Amounts recorded in shareholders’ equity: Actuarial gains and losses 475,862 35,323 (123,814) 387,371 (1,421,879) 47,690 (375,055) (1,749,244) Pension fund’s expected return 1,309,088 9,241 - 1,318,329 1,468,161 65,100 - 1,533,261 Retirements - (27,939) - (27,939) - (79,320) - (79,320)Transfer of responsabilities to the fund - - - - 1,392,375 (1,299,398) (92,977) - Curtailments plans - - - - (3,054,120) - - (3,054,120)Pensions paid in the year (2,598,887) - (964,431) (3,563,318) (2,727,639) - (1,044,999) (3,772,638)Liabilities by the end of the year 21,398,760 270,061 5,962,894 27,631,715 22,463,519 266,623 6,739,718 29,469,860 0


The actual performance of scheme as-sets and insurance policies during the years ended 31 December 2013 and 2012, was as follows

31/12/13 31/12/12 PLAN CAPITAL PLAN CAPITALAmounts in Euro FUND INSURED FUND INSURED Opening balance 27,491,958 171,754 28,197,183 2,311,813Translation adjustment - (17,366) - (10,421)Contribution made in the year/ Insurance premium paid 2,979 41,114 90,669 50,011Funds income in the period 603,696 9,904 3,779,521 (5,045)Pensions paid (2,598,887) - (2,727,639) -Retirements - (27,939) - (79,320)Transfer of responsabilities to the fund - - 2,095,284 (2,095,284)Curtailments plans - - (3,943,060) -Closing balance 25,499,746 177,467 27,491,958 171,754

137

At 31 December 2013 and 2012, the funds had the following composition per class of investment:

Amounts in Euro 31/12/13 31/12/12

Equities 2,219,723 4,123,794Bonds - fixed rate 12,365,037 15,395,496Public debt 7,266,399 7,422,829Fixed property 115,070 -Liquid assets 3,533,517 549,839 25,499,746 27,491,958


LIABILITIES FOR PAST SERVICES RELATING TO OTHER POST-EMPLOYMENT BENEFITS

According to the actuarial assessment conducted by independent entities at 31 December 2013 and 2012, the present value of the liabilities was as follows:

The liabilities of the Group registered the following evolution during the years ended 31 December 2013 and 2012:

31/12/13 31/12/12 RETIREMENT RETIREMENT Amounts in Euro HEALTHCARE AND DEATH TOTAL HEALTHCARE AND DEATH TOTAL

Liabilities for past services - Current employees 10,240 396,861 407,101 10,240 430,715 440,955 - Retirees 504,555 - 504,555 973,696 - 973,696 514,795 396,861 911,656 983,936 430,715 1,414,651


Liabilities at beginning of the year 983,936 430,715 1,414,651 12,118,893 433,921 12,552,814Translation adjustment - (33,520) (33,520) - (12,069) (12,069)Amounts recorded in net income/(loss) for the year Current services 13,401 29,298 42,699 194,153 64,471 258,624 Interest cost 22,901 41,925 64,826 604,765 8,275 613,040 Changes in plan - - - (10,392,571) (42,909) (10,435,480)Amounts recorded in shareholders’ funds (69,279) (2,908) (72,187) (830,198) (20,974) (851,172)Benefits paid in the year (436,164) (68,649) (504,813) (711,106) - (711,106)Liabilities by the end of the year 514,795 396,861 911,656 983,936 430,715 1,414,651

139


Liabilities for past services - Current employees 10,240 396,861 407,101 10,240 430,715 440,955 - Retirees 504,555 - 504,555 973,696 - 973,696 514,795 396,861 911,656 983,936 430,715 1,414,651


Liabilities at beginning of the year 983,936 430,715 1,414,651 12,118,893 433,921 12,552,814Translation adjustment - (33,520) (33,520) - (12,069) (12,069)Amounts recorded in net income/(loss) for the year Current services 13,401 29,298 42,699 194,153 64,471 258,624 Interest cost 22,901 41,925 64,826 604,765 8,275 613,040 Changes in plan - - - (10,392,571) (42,909) (10,435,480)Amounts recorded in shareholders’ funds (69,279) (2,908) (72,187) (830,198) (20,974) (851,172)Benefits paid in the year (436,164) (68,649) (504,813) (711,106) - (711,106)Liabilities by the end of the year 514,795 396,861 911,656 983,936 430,715 1,414,651


_23.3 LONG-TERM BENEFITS

LONG-SERVICE AWARDS

Secil and the subsidiary CMP – Cimen-tos Maceira e Pataias, S.A., assumed the commitment of payment of bonu-ses to their employees that reach the 25 years of working time within these

The Group’s liabilities registered the following evolution during the years ended 31 December 2013 and 2012:

companies, which will be paid in the year that the employees celebrates 25 years of company service.

DEATH SUBSIDY

Secil and the subsidiary CMP – Cimen-tos Maceira e Pataias, S.A., assumed the obligation to pay a subsidy on the

death of a current employee equivalent to one month of the last salary earned.

According to the actuarial valuations conducted by independent entities with reference to 31 December 2013 and 2012, the value of these benefit liabilities for past services is detailed as follows:

Amounts in Euro 31/12/13 31/12/2

Long-service awards 534,666 551,207Death subsidy 52,678 53,853 587,344 605,060

31/12/13 31/12/12 LONG-SERVICE DEATH LONG-SERVICE DEATH Amounts in Euro AWARDS SUBSIDY TOTAL AWARDS SUBSIDY TOTAL

Liabilities at beginning of the period 551,207 53,853 605,060 916,628 71,736 988,364Current services 27,215 3,143 30,358 39,968 4,063 44,031Interest cost 26,676 2,850 29,526 43,849 3,979 47,828Changes in plan (9,630) (1,736) (11,366) Actuarial gains and losses 28,994 (5,432) 23,562 (111,403) (21,765) (133,168)Benefits paid in the year (89,796) - (89,796) (337,835) (4,160) (341,995)Liabilities by the end of the year 534,666 52,678 587,344 551,207 53,853 605,060

141

31/12/13 31/12/12 LONG-SERVICE DEATH LONG-SERVICE DEATH Amounts in Euro AWARDS SUBSIDY TOTAL AWARDS SUBSIDY TOTAL

Liabilities at beginning of the period 551,207 53,853 605,060 916,628 71,736 988,364Current services 27,215 3,143 30,358 39,968 4,063 44,031Interest cost 26,676 2,850 29,526 43,849 3,979 47,828Changes in plan (9,630) (1,736) (11,366) Actuarial gains and losses 28,994 (5,432) 23,562 (111,403) (21,765) (133,168)Benefits paid in the year (89,796) - (89,796) (337,835) (4,160) (341,995)Liabilities by the end of the year 534,666 52,678 587,344 551,207 53,853 605,060


_24. FINANCIAL LIABILITIES

_24.1 CATEGORIES OF FINANCIAL LIABILITIES

The categories of financial liabilities at 31 December 2013 and 2012 are de-tailed as follows:

_24.2 FINANCIAL LIABILITIES – TRADE PAYABLES

At 31 December 2013 and 2012 trade payables comprised:

_24.3 FINANCIAL LIABILITIES - INTEREST--BEARING LOANS AND BORROWINGS

Interest-bearing loans and borrowings at 31 December 2013 and 2012 com-prised:

31/12/13 31/12/12 Amounts in Euro CURRENT NON CURRENT TOTAL CURRENT NON CURRENT TOTAL Financial liabilities at cost: Trade payables 42,321,474 - 42,321,474 35,728,624 - 35,728,624 Loans 71,364,558 282,920,857 354,285,415 35,354,394 324,097,871 359,452,265 Other accounts payable 31,000,729 - 31,000,729 30,946,151 - 30,946,151 144,686,761 282,920,857 427,607,618 102,029,169 324,097,871 426,127,040

Amounts in Euro 31/12/13 31/12/12 Trade payables 30,231,728 28,212,369Trade payables - related parties (Note 37) 3,849,138 496,136Invoices received to be processed 8,240,608 7,020,119 42,321,474 35,728,624

31/12/13 31/12/12 Amounts in Euro CURRENT NON CURRENT TOTAL CURRENT NON CURRENT TOTAL Bond loans: SBI 2007 - 2017 - 40,000,000 40,000,000 - 40,000,000 40,000,000 Secil 2012 - 2017 - 60,000,000 60,000,000 - 60,000,000 60,000,000 Secil 2013 - 2016 - 40,000,000 40,000,000 - - Secil 2013 - 2018 - 40,000,000 40,000,000 - - -Bank loans 56,990,910 93,371,244 150,362,154 25,175,207 212,256,950 237,432,157Bank overdrafts (Note 4) 14,163,855 - 14,163,855 10,929,178 - 10,929,178Other loans: Under QREN 1,811,398 7,108,517 8,919,915 1,143,146 8,741,551 9,884,697Finance leases - instalments payable (Note 12) 656,874 2,441,096 3,097,970 551,933 3,099,370 3,651,303Commissions from bank loans (2,258,479) - (2,258,479) (2,445,070) - (2,445,070) 71,364,558 282,920,857 354,285,415 35,354,394 324,097,871 359,452,265

143

31/12/13 31/12/12 Amounts in Euro CURRENT NON CURRENT TOTAL CURRENT NON CURRENT TOTAL Financial liabilities at cost: Trade payables 42,321,474 - 42,321,474 35,728,624 - 35,728,624 Loans 71,364,558 282,920,857 354,285,415 35,354,394 324,097,871 359,452,265 Other accounts payable 31,000,729 - 31,000,729 30,946,151 - 30,946,151 144,686,761 282,920,857 427,607,618 102,029,169 324,097,871 426,127,040

31/12/13 31/12/12 Amounts in Euro CURRENT NON CURRENT TOTAL CURRENT NON CURRENT TOTAL Bond loans: SBI 2007 - 2017 - 40,000,000 40,000,000 - 40,000,000 40,000,000 Secil 2012 - 2017 - 60,000,000 60,000,000 - 60,000,000 60,000,000 Secil 2013 - 2016 - 40,000,000 40,000,000 - - Secil 2013 - 2018 - 40,000,000 40,000,000 - - -Bank loans 56,990,910 93,371,244 150,362,154 25,175,207 212,256,950 237,432,157Bank overdrafts (Note 4) 14,163,855 - 14,163,855 10,929,178 - 10,929,178Other loans: Under QREN 1,811,398 7,108,517 8,919,915 1,143,146 8,741,551 9,884,697Finance leases - instalments payable (Note 12) 656,874 2,441,096 3,097,970 551,933 3,099,370 3,651,303Commissions from bank loans (2,258,479) - (2,258,479) (2,445,070) - (2,445,070) 71,364,558 282,920,857 354,285,415 35,354,394 324,097,871 359,452,265


The subsidiary Secil Betões e Inertes, S.A. floated a bond loan on 22 Octo-ber 2007 for a total amount of Euro 40,000,000. These bonds were fully subscribed and paid up on subscription and are represented by securities. The bonds were issued by way of a private and direct placing. The coupon interest is paid half-yearly and in arrears on 22 October and 22 April of each year. The bonds will be redeemed on the date of payment of the 20th coupon, that is, on 22 October 2017. Early redemption may be requested (“Call option”), in to-tal or in part, on the 10th, 12th, 14th, 16th and 18th interest-payment dates.

As at December, 31 2012, Secil con-tracted a bond loan amounting of Euro 60,000,000. These bonds were fully subscribed on the bond emission date and are presented by bonds held by the owner. These bonds were issued under a direct private placement. Inte-

UNDRAWN COMMITTED BORROWING FACILITIES

At 31 December 2013 and 2012, un-drawn committed borrowing facilities totalled Euro 267,230,062 and Euro 237,580,265, respectively.

FINANCIAL COVENANTS

There are loan agreements with banks that require compliance with certain financial ratios covenants.

The Jointly Controlled Entity Secil Pre-betão is renegotiating some financing contacts, one of which requires com-pliance with the financial ratio covenant of Net Debt / EBITDA.

rests on coupons are post-dated and paid bi-annually on 28 June and 28 De-cember of each year. The redemption of this bonds emission will be made at its nominal value, on 28 December 2017.

On May 24, 2013 Secil issued two bond loans amounting to Euro 40,000,000 each with 3 and 5 years maturity. These bonds were fully subscribed on at the emission date and are presented by bonds held by the owner. These bonds were issued under a direct private pla-cement. Interests on coupons are post--dated and paid bi-annually on 24 May and 24 November of each year. The reimbursement of these bonds will be made at its nominal value, on 24 May 2016 and 2017, respectively.

The portion classified as non-current at 31 December 2013 and 2012 has the following specified redemption plan:

Amounts in Euro 31/12/13 31/12/12 1 to 2 years 45,261,071 60,320,2002 to 3 years 73,041,148 87,983,0993 to 4 years 136,813,713 24,350,3544 to 5 years 19,731,872 107,249,886More than 5 years 8,073,053 44,194,332 282,920,857 324,097,871

145

_24.4 FINANCIAL LIABILITIES – OTHER ACCOUNTS PAYABLE

At 31 December 2013 and 2013, non--current and current other accounts payables are detailed as follows:

Creditors for accrued costs at 31 De-cember 2013 and 2012 comprise:

_25. ADVANCES FROM CUSTOMERSAND TO SUPPLIERS

At 31 December 2013 and 2012 advan-ces from customers and advances to suppliers comprise:

Amounts in Euro 31/12/13 31/12/12 Fixed asset suppliers 2,567,221 3,167,463Fixed asset suppliers - related parties (Note 37) 43,516 43,516Other creditors 4,030,760 3,237,930Other creditors - related parties (Note 37) 19,305 2,723Creditors for accrued costs 24,339,927 24,494,519 31,000,729 30,946,151

Amounts in Euro 31/12/13 31/12/12 Insurance 34,303 103,520Personnel costs 8,949,558 9,660,439Interest payable 2,751,309 1,926,356Energy cost accruals 6,560,633 6,181,411Transport services 802,295 1,259,434Shareholders (Note 37) 108,123 1,831,425Bank charges 166,644 686,296Consulting 2,291,568 -Other 2,675,494 2,845,638 24,339,927 24,494,519

ASSETS LIABILITIESAmounts in Euro 31/12/13 31/12/12 31/12/13 31/12/12 Advances to suppliers 2,062,119 1,978,167 - -Advances from customers - - 2,534,888 2,030,936 2,062,119 1,978,167 2,534,888 2,030,936


_26. STATE AND OTHER PUBLIC ENTITIES

At 31 December 2013 and 2012 state and other public entities comprise:

At 31 December 2013 and 2012 corpo-rate income tax comprised:

In the current period, the tax authori-ties paid the remaining amount of Euro 1,968,087 on tax incentives for inter-nationalization provided for in Decree--Law 401/99 of 14 October, as part of the acquisition of Société des Ciments de Gabès which was outstanding. The incentive consisted of a tax deduction

of 10% of the investment, with a maxi-mum amount of Euro 5,985,575.

In December 2013, Secil pay addition-al tax amounting to Euro 10,485,093, under the Special Regime for the Set-tlement of Tax and Social Security debts (RERD).

ASSETS LIABILITIES Amounts in Euro 31/12/13 31/12/12 31/12/13 31/12/12 Corporate income tax 5,341,724 9,302,013 12,548,551 28,197,297Income tax withheld 92,547 106,014 1,147,149 4,778,157Value Added Tax 2,734,610 3,275,695 1,343,457 2,053,951Contribution to Social Security - - 1,316,003 1,338,510Other taxes 245,152 335,049 616,577 482,511 8,414,033 13,018,771 16,971,737 36,850,426

31/12/13 31/12/12 DEBIT CREDIT NET Amounts in Euro BALANCE BALANCE NET BALANCE Corporate income tax for the year (Note 16) (844,118) 3,476,484 4,320,602 6,077,359Foreign currency adjustment - (126,872) (126,872) (56,960)Payments on account 1,640,688 (42,419) (1,683,107) (3,242,280)Recoverable tax withheld at source 4,130,782 (6,554) (4,137,336) (6,591,771)Prior period IRC 414,372 (124,382) (538,754) (2,737,607)Additional assessments - 9,372,294 9,372,294 25,446,543 5,341,724 12,548,551 7,206,827 18,895,284

147

_27. DEFERRED LIABILITIES

The balance of deferred liabilities at 31 December 2013 and 2012 comprised:

In June 2011, the Group entered into a contract in terms of which it received Euro 223.000, whereby it undertakes to carry out the following future exchange of emission rights:

During the current period, the Group executed the contract and proceeded to the licenses exchange, to deliver to the Entity Licensing Coordinator as part of its obligations by emissions of greenhouse gases, recognising gains in the amount of Euro 223,000 (Note 32).

ASSETS LIABILITIESAmounts in Euro 31/12//12 31/12/12 31/12/13 31/12/12 Insurance 198,721 187,190 - -Rents 231,769 277,533 - -Residue treatment - - 255,556 -EU Emmission alowances - Contract - - - 223,000Other 374,172 414,695 124,024 88,026 804,662 879,418 379,580 311,026

MATURITY CER (TON) EUA (TON)

27 June 2011 (330,177) 330,17710 December 2011 (335,000) 335,00010 December 2012 (335,000) 335,000until 1 April 2014 1,000,177 (1,000,177)


_28. REVENUE

At 31 December 2013 and 2012 reve-nue comprised:

_29. APPROPRIATED EARNINGS OF ASSOCIATES

In the years ended 31 December 2013 and 2012, the Group equity accounted the earnings of associates as follows:

Amounts in Euro 31/12/13 31/12/12

Sales revenue 390,819,750 425,697,762Services revenue 21,496,919 25,641,943Cash discounts (791,228) (1,107,093) 411,525,441 450,232,612

Amounts in Euro 31/12/13 31/12/12

Appropriated earnings of associates Setefrete, SGPS, S,A, 341,641 170,897 J,M, Henriques, Lda, (3,257) (4,287) Ave-Gestão Ambiental e Valorização Energética, S,A, 107,132 234,729 Supremo Cimentos, S,A, (80) - Nsospe Empreendimentos e Participações, S,A, (2,659,923) - (Note 15 and 16) (2,214,487) 401,339 Viroc Portugal - Ind, Madeiras e Cimento, S,A, - (326,071) Chryso - Aditivos de Portugal, S,A, - (80,452) (Note 22) - (406,523)

149

_30. EXTERNAL SUPPLIES AND SERVICES

External supplies and services in the years ended 31 December 2013 and 2012 are detailed as follows:

_31. PERSONNEL COSTS

At 31 December 2013 and 2012, per-sonnel costs comprise:

The remuneration of members of the Group’s governing bodies, including performance bonuses, for the years ended 31 December 2013 and 2012 comprise:

Amounts in Euro 31/12/13 31/12/12

Subcontracts 10,978,317 14,440,696Specialist services 40,090,453 41,910,509Materials 565,451 691,804Energy and oil 44,929,019 47,342,902Travelling and transport costs 40,304,998 44,246,137Miscellaneous services 21,139,867 21,985,223 158,008,105 170,617,271

Amounts in Euro 31/12/13 31/12/12 Remuneration of Governing Bodies 4,617,739 4,590,062Employees’ remuneration 44,606,537 50,450,289Post employment benefits: Defined contribution (Note 23) 778,972 1,057,564 Defined benefit (Note 23) 181,634 (9,347,937) Other long-term benefits (Note 23) 72,080 (41,309)Severance payments 988,451 11,399,375Other personnel costs 14,682,574 16,897,640 65,927,987 75,005,684

Amounts in Euro 31/12/13 31/12/12 Secil Board of Directors 3,410,316 3,408,672Other members of subsidiaries’ governing bodies 1,207,423 1,181,390 4,617,739 4,590,062


At 31 December 2013 and 2012, the number of employees in the Group broken down by business segment, was as follows:

_32. OTHER INCOME AND GAINS

At 31 December 2013 and 2012, other income and gains comprise:

The favourable currency differences re-corded in the year ended 31 December 2013 mainly refer to variations between the exchange rate ruling at the date of the transaction, the date of the respec-

tive settlement of the transaction and the restatement of intra-group transac-tions in foreign currency, and largely at-tributable to the variation in the Ameri-can dollar during the year under review.

31/12/13 31/12/12 COUNTRY/SEGMENT CEMENT CONCRETE AGGREGATES OTHER TOTAL CEMENT CONCRETE AGGREGATES OTHER TOTAL Portugal 491 211 126 122 950 525 243 132 157 1,057Lebanon 436 70 - - 506 430 76 - - 506Tunisia 283 96 - - 379 290 88 - - 378Angola 249 - - 4 253 266 - - 4 270Cape Verde 13 - 23 - 36 11 - 23 - 34Other - - - 1 1 - - - 2 2Total 1,472 377 149 127 2,125 1,522 407 155 163 2,247

Amounts in Euro 31/12/13 31/12/12 Emission rights granted at no cost (Note 21,5,3) 6,538,658 16,341,609Government grants (Note 21,5,3) 1,687,461 925,272Income and gains from non-financial investments 696,243 1,024,588Supplementary income - related parties (Note 37) 1,934,818 176,390Supplementary income - other 1,586,275 2,191,858Sales of emission rights (Note 14) 978,774 7,561,300 Emission rights swap (Note 27) 223,000 1,694,672Favourable currency differences 1,095,483 1,840,109Income from residue treatment 842,679 835,916Gains on financial instruments - Currency forwards (Note 39) - 161,231Other gains on financial investments Other - 110,358 7,029,691 6,265,885

151

_33. OTHER COSTS AND LOSSES

In the years ended 31 December 2013 and 2012, other gains and losses com-prise:

Costs and losses on non-financial as-sets in the year ended 31 December 2012 include Euro 11,035,530 relating to losses on non-financial assets held for sale.

31/12/13 31/12/12 COUNTRY/SEGMENT CEMENT CONCRETE AGGREGATES OTHER TOTAL CEMENT CONCRETE AGGREGATES OTHER TOTAL Portugal 491 211 126 122 950 525 243 132 157 1,057Lebanon 436 70 - - 506 430 76 - - 506Tunisia 283 96 - - 379 290 88 - - 378Angola 249 - - 4 253 266 - - 4 270Cape Verde 13 - 23 - 36 11 - 23 - 34Other - - - 1 1 - - - 2 2Total 1,472 377 149 127 2,125 1,522 407 155 163 2,247

Amounts in Euro 31/12/13 31/12/12 Costs and losses on non-financial assets 80,995 11,214,922Costs and losses on financial assets - 2,100Donations 910,998 848,237Indirect taxes 2,289,037 2,189,515Unfavourable currency differences 2,365,754 2,234,121Bank charges 714,003 1,062,691Other operating costs 3,506,860 3,605,681 9,867,647 21,157,267


_34. DEPRECIATION AND AMORTISATION COSTS/ REVERSALS

Depreciation and amortisation costs/ reversals in the years ended 31 Decem-ber 2013 and 2012 comprise:

_35. FINANCE COST (NET)

At 31 December 2013 and 2012, fi-nance costs (net) comprise:

Amounts in Euro 31/12/13 31/12/12 Tangible fixed assets (Note 11) 51,072,368 52,596,007Investment property (Note 13) 18,789 18,791Intangible assets (Note 14) 7,285,086 16,610,376Non-current assets held for sale (Note 20) 60,019 -Depreciation/amortisation costs/(reversals) 58,436,262 69,225,174Tangible fixed assets (Note 11) 457,470 9,930,668Non-current assets held for sale (Note 20) - 6,118,657(Reversals)/Impairment losses on emission rights (Note 14) (663,808) (234,906)Impairment of depreciable/amortisable assets (losses/ (reversals)) (206,338) 15,814,419

Amounts in Euro 31/12/13 31/12/12 Interest and similar income: Other interest earned 1,036,578 2,862,169 Other interest earned - related parties (Note 37) 4,115,319 2,529,831 Other financial income and gains 7,701 7,286 5,159,598 5,399,286Interest and similar expense: Interest expense on other loans (23,923,880) (15,671,775) Interest expense on other loans - related parties (Note 37) (33,025) (26,568) Favourable /(unfavourable) currency differences on interest-bearing loans (618,857) (360,449) Gains/ (losses) on financial instruments - Interest rate swaps: Interests incurred (1,382,259) (1,060,611) Ineffective financial instrument (Note 39) - (139,182) Discounting of provision for landscape remediation (Note 22) (356,093) (337,134) Other financial costs and expenses (549,789) (548,166) (26,863,903) (18,143,885)

153

There are no convertible financial ins-truments relating to Secil shares, and consequently no dilution of earnings.

The reported weighted average number of shares includes 4,184,460 treasury shares held by Secil and by its subsi-diary Hewbol SGPS, Lda. (Note 21.1).

_36. EARNINGS PER SHARE

Earnings per share in the years ended 31 December 2013 and 2013 were as follows:

Amounts in Euro 31/12/13 31/12/12 Earnings attributable to Company’s equity holders (34,897,448) (38,459,143)Weighted average number of shares 48,735,540 48,735,540 Basic earnings per share (0.716) (0.789)Diluted earnings per share (0.716) (0.789)


_37. RELATED PARTIES

During the years ended 31 December 2013 and 2012, the following related party transactions were realised:

31 DECEMBER 2013 INTEREST AND SALES AND OTHER NTEREST AND ACQUISITION OF PERSONNEL SIMILAR EXPENSE SERVICES INCOME AND SIMILAR INCOME Amounts in Euro GOODS AND SERVICES COSTS (NOTE 35) SERVICES GAINS (NOTE 32) (NOTE 35) Shareholders Cimentospar, S,A, 200,492 - - - - 1,123,990Other related parties Semapa, S,G,P,S,, S,A, (2,814,477) (21,696) - - - 2,955,9 Seribo, S,A, - - (4,810) - - - Eng,Silva Dias - - (334) - - - Other shareholders in subsidiaries and other related parties - - (27,881) - - 34,148Associated companies and joint controlled entities Supremo Cimentos S,A - - - 11,669,303 11,633 - Margem - Companhia de Mineração - - - - 1,323,942 - J,M,J, Henriques, Lda, - - - - 1,800 - Inertogrande - - - - 1,800 - Secil Unicon - S,G,P,S,, Lda, - - - - - 1,246 Secil Prebetão - Pré-Fabricados de Betão, S,A, (45,610) - - 365,384 1,058 - Setefrete - Soc, Tráfego Cargas, S,A, (2,197,148) - - - 29,574 Ave-Gestão Ambiental e Valorização Energética, S,A, (3,409,317) - - 127,753 565,011 - (8,266,060) (21,696) (33,025) 12,162,440 1,934,818 4,115,319

31 DECEMBER 2012 INTEREST AND SALES AND OTHER INTEREST AND ACQUISITION OF GOODS PERSONNEL SIMILAR EXPENSE SERVICES INCOME AND SIMILAR INCOME Amounts in Euro AND SERVICES COSTS (NOTE 35) PROVIDED GAINS (NOTE 32) (NOTE 35) Shareholders Cimentospar, S.A. (192,992) - - - - 281,312Other related parties Semapa, S.G.P.S., S.A. (1,638,526) (26,992) - - - 2,164,364 Seribo, S.A. - - (4,130) - - Eng.Silva Dias - - (287) - - - Supremo Cimentos S.A - - - 11,819,942 - 41,082 Other shareholders in subsidiaries and other related parties - - (14,776) - - 35,682Associated companies and joint controlled entities J.M. Henriques, Lda. - - - - 1,800 - Ave-Gestão Ambiental e Valorização Energética, S.A. (2,929,015) - - 18,489 155,237 Inertogrande - Central de Betão, Lda. - - - - 1,800 - Secil Unicon - S.G.P.S., Lda. - - (7,375) - 88 7,391 Secil Prebetão - Pré-Fabricados de Betão, S.A. (52,789) - - 497,699 1,773 - Setefrete - Soc. Tráfego Cargas, S.A. (3,178,984) - - - 15,692 - (7,992,306) (26,992) (26,568) 12,336,130 176,390 2,529,831

155

31 DECEMBER 2013 INTEREST AND SALES AND OTHER NTEREST AND ACQUISITION OF PERSONNEL SIMILAR EXPENSE SERVICES INCOME AND SIMILAR INCOME Amounts in Euro GOODS AND SERVICES COSTS (NOTE 35) SERVICES GAINS (NOTE 32) (NOTE 35) Shareholders Cimentospar, S,A, 200,492 - - - - 1,123,990Other related parties Semapa, S,G,P,S,, S,A, (2,814,477) (21,696) - - - 2,955,9 Seribo, S,A, - - (4,810) - - - Eng,Silva Dias - - (334) - - - Other shareholders in subsidiaries and other related parties - - (27,881) - - 34,148Associated companies and joint controlled entities Supremo Cimentos S,A - - - 11,669,303 11,633 - Margem - Companhia de Mineração - - - - 1,323,942 - J,M,J, Henriques, Lda, - - - - 1,800 - Inertogrande - - - - 1,800 - Secil Unicon - S,G,P,S,, Lda, - - - - - 1,246 Secil Prebetão - Pré-Fabricados de Betão, S,A, (45,610) - - 365,384 1,058 - Setefrete - Soc, Tráfego Cargas, S,A, (2,197,148) - - - 29,574 Ave-Gestão Ambiental e Valorização Energética, S,A, (3,409,317) - - 127,753 565,011 - (8,266,060) (21,696) (33,025) 12,162,440 1,934,818 4,115,319

31 DECEMBER 2012 INTEREST AND SALES AND OTHER INTEREST AND ACQUISITION OF GOODS PERSONNEL SIMILAR EXPENSE SERVICES INCOME AND SIMILAR INCOME Amounts in Euro AND SERVICES COSTS (NOTE 35) PROVIDED GAINS (NOTE 32) (NOTE 35) Shareholders Cimentospar, S.A. (192,992) - - - - 281,312Other related parties Semapa, S.G.P.S., S.A. (1,638,526) (26,992) - - - 2,164,364 Seribo, S.A. - - (4,130) - - Eng.Silva Dias - - (287) - - - Supremo Cimentos S.A - - - 11,819,942 - 41,082 Other shareholders in subsidiaries and other related parties - - (14,776) - - 35,682Associated companies and joint controlled entities J.M. Henriques, Lda. - - - - 1,800 - Ave-Gestão Ambiental e Valorização Energética, S.A. (2,929,015) - - 18,489 155,237 Inertogrande - Central de Betão, Lda. - - - - 1,800 - Secil Unicon - S.G.P.S., Lda. - - (7,375) - 88 7,391 Secil Prebetão - Pré-Fabricados de Betão, S.A. (52,789) - - 497,699 1,773 - Setefrete - Soc. Tráfego Cargas, S.A. (3,178,984) - - - 15,692 - (7,992,306) (26,992) (26,568) 12,336,130 176,390 2,529,831


At 31 December 2013 and 2012 the Group companies presented the follo-wing balances with related parties:

31 DECEMBER 2013 ASSETS LIABILITIES NON-CURRENT LOANS TRADE OTHER ACCRUED SHAREHOLDERS/ SHAREHOLDERS/ TRADE FIXED ASSET OTHER ACCRUED ADVANCED RECEIVABLES OPERATIONS INCOME MEMBERS MEMBERS PAYABLES SUPPLIERS CREDITORS COSTSAmounts in Euro (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) NON CURRENT CURRENT (NOTE 24.2) (NOTE 24.4) (NOTE 24.4) (NOTE 24.4) Shareholders Longapar - S.G.P.S., S.A. - - - - - 1,160 - - - -Other related parties Semapa, SGPS, S.A. - - 243 1,250,626 - - 3,016,444 - - - Cotif Sicar - - - - - 19,560 - - - Pedro Soveral - - - - - - - - - - Ricardo Soveral - - - - - - - - - - Seribo, S.A. - - - - - 185,759 - 43,516 - 76,201 Eng.Silva Dias - - - - - 12,893 - - - 5,287 Other shareholders in subsidiaries and other related parties 550,000 - 689,885 34,148 585,000 1,435,761 - - 19,305 26,635Associated companies and joint controlled entities Supremo Cimentos S.A - 991,491 9,539 - - - - - - - Margem - Companhia de Mineração - - 27,162 1,300,000 - - - - - - J.M.J. Henriques, Lda. - - 114,683 - - - - - - - Inertogrande - Central de Betão, Lda. - - 204,678 - - - - - - - Secil Unicon - S.G.P.S., Lda. - - 22,164 - - - - - - - Secil Prebetão - Pré-Fabricados de Betão, S.A. - 82,209 23,026 - - - 11,024 - - - Setefrete - Soc. Tráfego Cargas, S.A. - - - - - - 479,084 - - - Ave-Gestão Ambiental e Valorização Energética, S.A. - 1,845 101,150 - - - 342,586 - - - Sociedade de Inertes, Lda - - 2,312 - - - - - - - 550,00 1,075,545 1,194,842 2,584,774 585,000 1,655,133 3,849,138 43,516 19,305 108,123

31 DECEMBER 2012 ASSETS LIABILITIES NON-CURRENT TRADE LOANS OTHER ACCRUED SHAREHOLDERS / SHAREHOLDERS / TRADE FIXED ASSET OTHER ACCRUED LOANS ADVANCED RECEIVABLES ADVANCED OPERATIONS INCOME MEMBERS MEMBERS PAYABLES SUPPLIERS CREDITORS COSTS Amounts in Euro (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) (NOTE 19.3) NON CURRENT CURRENT (NOTE 24.2) (NOTE 24.4) (NOTE 24.4) (NOTE 24.4) Shareholders Longapar - S.G.P.S., S.A. - - - - - - 1,160 - - - - Cimentospar, S.G.P.S., S.A. - - 19,004,666 - 213,038 - - - - - 133,661Other related parties Semapa, SGPS, S.A. - - 50,983,338 243 571,510 - - - - - 1,621,420 Cotif Sicar - - - - - - 21,612 - - - - Seribo, S.A. - - - - - - 185,759 - 43,516 - 71,391 Eng.Silva Dias - - - - - - 12,893 - - - 4,953 Supremo Cimentos S.A - 5,838,758 - 39 - - - - - - - Other shareholders in subsidiaries and other related parties 550,000 - - 39,991 - 505,000 1,878,598 1,635 - - -Associated companies and joint controlled entities - J.M. Henriques, Lda. - - - 107,353 - - - - - - - Ave-Gestão Ambiental e Valorização Energética, S.A. - 7,160 - 15,364 - - - 471,104 - - - Inertogrande - Central de Betão, Lda. - - - 198,198 - - - - - - - Secil Unicon - S.G.P.S., Lda. - - 196,656 27,421 - - - - - - - Secil Prebetão - Pré-Fabricados de Betão, S.A. - 23,934 - 7,162 - - - 10,759 - 2,723 - Setefrete - Soc. Tráfego Cargas, S.A. - - - - - - - 12,638 - - - 550,000 5,869,852 70,184,660 395,771 784,548 505,000 2,100,022 496,136 43,516 2,723 1,831,425

157

31 DECEMBER 2013 ASSETS LIABILITIES NON-CURRENT LOANS TRADE OTHER ACCRUED SHAREHOLDERS/ SHAREHOLDERS/ TRADE FIXED ASSET OTHER ACCRUED ADVANCED RECEIVABLES OPERATIONS INCOME MEMBERS MEMBERS PAYABLES SUPPLIERS CREDITORS COSTSAmounts in Euro (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) NON CURRENT CURRENT (NOTE 24.2) (NOTE 24.4) (NOTE 24.4) (NOTE 24.4) Shareholders Longapar - S.G.P.S., S.A. - - - - - 1,160 - - - -Other related parties Semapa, SGPS, S.A. - - 243 1,250,626 - - 3,016,444 - - - Cotif Sicar - - - - - 19,560 - - - Pedro Soveral - - - - - - - - - - Ricardo Soveral - - - - - - - - - - Seribo, S.A. - - - - - 185,759 - 43,516 - 76,201 Eng.Silva Dias - - - - - 12,893 - - - 5,287 Other shareholders in subsidiaries and other related parties 550,000 - 689,885 34,148 585,000 1,435,761 - - 19,305 26,635Associated companies and joint controlled entities Supremo Cimentos S.A - 991,491 9,539 - - - - - - - Margem - Companhia de Mineração - - 27,162 1,300,000 - - - - - - J.M.J. Henriques, Lda. - - 114,683 - - - - - - - Inertogrande - Central de Betão, Lda. - - 204,678 - - - - - - - Secil Unicon - S.G.P.S., Lda. - - 22,164 - - - - - - - Secil Prebetão - Pré-Fabricados de Betão, S.A. - 82,209 23,026 - - - 11,024 - - - Setefrete - Soc. Tráfego Cargas, S.A. - - - - - - 479,084 - - - Ave-Gestão Ambiental e Valorização Energética, S.A. - 1,845 101,150 - - - 342,586 - - - Sociedade de Inertes, Lda - - 2,312 - - - - - - - 550,00 1,075,545 1,194,842 2,584,774 585,000 1,655,133 3,849,138 43,516 19,305 108,123

31 DECEMBER 2012 ASSETS LIABILITIES NON-CURRENT TRADE LOANS OTHER ACCRUED SHAREHOLDERS / SHAREHOLDERS / TRADE FIXED ASSET OTHER ACCRUED LOANS ADVANCED RECEIVABLES ADVANCED OPERATIONS INCOME MEMBERS MEMBERS PAYABLES SUPPLIERS CREDITORS COSTS Amounts in Euro (NOTE 19.3) (NOTE 19.2) (NOTE 19.3) (NOTE 19.3) (NOTE 19.3) NON CURRENT CURRENT (NOTE 24.2) (NOTE 24.4) (NOTE 24.4) (NOTE 24.4) Shareholders Longapar - S.G.P.S., S.A. - - - - - - 1,160 - - - - Cimentospar, S.G.P.S., S.A. - - 19,004,666 - 213,038 - - - - - 133,661Other related parties Semapa, SGPS, S.A. - - 50,983,338 243 571,510 - - - - - 1,621,420 Cotif Sicar - - - - - - 21,612 - - - - Seribo, S.A. - - - - - - 185,759 - 43,516 - 71,391 Eng.Silva Dias - - - - - - 12,893 - - - 4,953 Supremo Cimentos S.A - 5,838,758 - 39 - - - - - - - Other shareholders in subsidiaries and other related parties 550,000 - - 39,991 - 505,000 1,878,598 1,635 - - -Associated companies and joint controlled entities - J.M. Henriques, Lda. - - - 107,353 - - - - - - - Ave-Gestão Ambiental e Valorização Energética, S.A. - 7,160 - 15,364 - - - 471,104 - - - Inertogrande - Central de Betão, Lda. - - - 198,198 - - - - - - - Secil Unicon - S.G.P.S., Lda. - - 196,656 27,421 - - - - - - - Secil Prebetão - Pré-Fabricados de Betão, S.A. - 23,934 - 7,162 - - - 10,759 - 2,723 - Setefrete - Soc. Tráfego Cargas, S.A. - - - - - - - 12,638 - - - 550,000 5,869,852 70,184,660 395,771 784,548 505,000 2,100,022 496,136 43,516 2,723 1,831,425


_38. FINANCIAL RISKS

The Group has a risk management pro-gramme which focuses its analysis on the financial markets with a view to mi-tigating the potential adverse effects on the Group’s financial performance.

Risk management is undertaken by Secil’s Finance Department in accor-dance with policies approved by the Board of Directors.

_38.1 FOREIGN CURRENCY RISK

Fluctuations in the exchange rate of the Euro against other currencies can signi-

ficantly impact the Group’s revenue in a number of ways.

Foreign currency risk arises primarily from purchases of fuel and sea freight, both of which are denominated and paid for in USD.

The Group has pursued a policy of ma-ximisation of the potential natural hedge of its currency exposure through the off-setting of intra-group currency flows.

In the case of cash flows not offset na-turally, the resulting risk has been analy-sed and hedged by means of currency option contracts which stipulate the

maximum counter value to be settled and which permit the group to benefit partially from favourable movements in exchange rates.

The Group has assets located in Tunisia, Angola, Lebanon and Brazil, with the result that any change in their respective currency exchange rates could have an impact on the Group’s balance sheet.

The Group’s exposure to exchange rate risk at 31 December 2013 and 2012, ba-sed on balance sheet values of financial assets and liabilities, converted to Euro at exchange rates ruling on that date, is presented as follows:

31/12/13 31/12/12 AMERICAN 000’ LEBANESE TUNISIAN ANGOLAN AMERICAN 000’ LEBANESE TUNISIAN Amounts in Euro DOLLAR POUND DINAR KWANZAS TOTAL DOLLAR POUND DINAR TOTAL

Assets Other receivables - non-current and current 475,476 155,778 5,124,325 102,780 5,858,359 590,803 218,649 3,698,462 4,507,913Trade receivables 1,899,458 12,440,383 7,593,066 1,346,642 23,279,549 6,119,281 9,573,949 8,502,033 24,195,263Cash and cash equivalents 44,806,628 15,713,195 1,590,085 1,919,329 64,029,237 41,130,860 159,891 1,986,315 43,277,066Total financial assets 47,181,562 28,309,356 14,307,476 3,368,751 93,167,145 47,840,943 9,952,489 14,186,810 71,980,243Liabilities Shareholders/ members- non-current and current - (1,435,273) (20,047) - (1,455,320) - (1,688,501) (21,954) (1,710,455)Interest-bearing loans - non-current and current (7,659,695) (4,694,566) (30,508,962) (8,361,336) (51,224,559) (12,173,734) (1,112,928) (29,770,567) (43,057,229)Other accounts payable - non-current and current (65,855) (8,533,119) (5,650,644) (657,065) (14,906,683) (804,944) (6,709,516) (6,246,792) (13,761,252)Trade payables (1,735,572) (2,103,667) (7,569,563) (168,482) (11,577,284) (1,586,902) (1,348,804) (8,554,503) (11,490,208)Total financial liabilities (9,461,122) (16,766,625) (43,749,216) (9,186,883) (79,163,846) (14,565,580) (10,859,749) (44,593,815) (70,019,145)Balance sheet net financial position 37,720,440 11,542,731 (29,441,740) (5,818,132) 14,003,299 33,275,363 (907,260) (30,407,005) 1,961,098

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In the years ended 31 December 2013 and 2012, the impact arising from a 5% change in all the spot foreign currency exchange rates relative to the Euro, is as follows:

31/12/13 31/12/12 AMERICAN 000’ LEBANESE TUNISIAN ANGOLAN AMERICAN 000’ LEBANESE TUNISIAN Amounts in Euro DOLLAR POUND DINAR KWANZAS TOTAL DOLLAR POUND DINAR TOTAL

Assets Other receivables - non-current and current 475,476 155,778 5,124,325 102,780 5,858,359 590,803 218,649 3,698,462 4,507,913Trade receivables 1,899,458 12,440,383 7,593,066 1,346,642 23,279,549 6,119,281 9,573,949 8,502,033 24,195,263Cash and cash equivalents 44,806,628 15,713,195 1,590,085 1,919,329 64,029,237 41,130,860 159,891 1,986,315 43,277,066Total financial assets 47,181,562 28,309,356 14,307,476 3,368,751 93,167,145 47,840,943 9,952,489 14,186,810 71,980,243Liabilities Shareholders/ members- non-current and current - (1,435,273) (20,047) - (1,455,320) - (1,688,501) (21,954) (1,710,455)Interest-bearing loans - non-current and current (7,659,695) (4,694,566) (30,508,962) (8,361,336) (51,224,559) (12,173,734) (1,112,928) (29,770,567) (43,057,229)Other accounts payable - non-current and current (65,855) (8,533,119) (5,650,644) (657,065) (14,906,683) (804,944) (6,709,516) (6,246,792) (13,761,252)Trade payables (1,735,572) (2,103,667) (7,569,563) (168,482) (11,577,284) (1,586,902) (1,348,804) (8,554,503) (11,490,208)Total financial liabilities (9,461,122) (16,766,625) (43,749,216) (9,186,883) (79,163,846) (14,565,580) (10,859,749) (44,593,815) (70,019,145)Balance sheet net financial position 37,720,440 11,542,731 (29,441,740) (5,818,132) 14,003,299 33,275,363 (907,260) (30,407,005) 1,961,098

31/12/13 31/12/12Amounts in Euro 5% INCREASE 5% DECREASE 5% INCREASE 5% DECREASE Shareholders’ equity (412,510) 455,933 (176,166) 194,710Net income for the period (254,313) 281,083 82,780 (91,494) (666,823) 737,016 (93,386) 103,216


_38.2 INTEREST RATE RISK

Whenever the outlook for the future trend in interest rates so warrants, the Group enters into contracts to safe-guard against adverse movements through recourse to derivative finan-cial instruments. In the selection of instruments, importance is essentially attributed to their economic aspects. The implications of inclusion of each additional instrument in the portfolio of existing derivatives are also taken into account, namely, the effects in terms of the volatility of earnings.

In managing exposure to interest ra-tes, the Group only hedges cash flows. These operations are recorded in the

balance sheet at fair value and, to the extent that they are considered to be effective hedges, the changes in fair value are initially recorded in equity and subsequently reclassified gains/losses on financial instruments in net financial (Note 35) items on the date of settlement.

If the hedged operation proves to be ineffective, this is recorded directly in the income statement. The costs as-sociated with hedged borrowings are accounted for on the accrual basis at the rate applicable to the hedged ope-ration contracted, on a net basis.

When a hedging instrument expires or is sold, or when the hedge cea-

ses to meet the required criteria for hedge accounting, the changes in the derivative’s fair value accumulated in reserves are recognised in the income statement at the same time as the hed-ged operation impacts net income/loss.

The Group contracted during 2009 an interest rate hedge by way of an inte-rest rate swap (IRS) with a notional va-lue of Euro 40,000,000. The remaining debt was maintained at variable rates.

At 31 December 2013 and 2012, the evolution of financial assets and finan-cial liabilities with interest rate expo-sure per re-set date and type of rate is presented in the following table:

31 DE DECEMBER 2013Amounts in Euro NOTE UP TO 1 MONTH 1-3 MONTHS 3-12 MONTHS 1-5 YEARS TOTAL

Assets Non-current Other financial assets 17 - - - 1,250,000 1,250,000Current Cash and cash equivalents Liquid bank deposits 4 25,609,321 - - - 25,609,321 Treasury assets 4 85,123,498 2,545,036 10,711,902 27,802 98,408,238Total financial assets 110,732,819 2,545,036 10,711,902 1,277,802 125,267,559Liabilities Non-current Interest-bearing debt Bond loans 24.3 - - 140,000,000 40,000,000 180,000,000 Bank loans 24.3 32,695,653 19,978,413 38,556,259 2,140,919 93,371,244 Finance leases 12 2,441,096 - - - 2,441,096Current Interest-bearing debt Bank loans 24.3 36,948,584 3,719,929 15,507,101 815,296 56,990,910 Bank overdrafts 24.3 9,336,458 4,827,397 - - 14,163,855 Finance leases 12 656,874 - - - 656,874Total financial liabilities 82,078,665 28,525,739 194,063,360 42,956,215 347,623,979Net exposure to interest rate risk 28,654,154 (25,980,703) (183,351,458) (41,678,413) (222,356,420)

161


Assets Non-current Other financial assets 17 - - - 1,250,000 1,250,000Current Cash and cash equivalents Liquid bank deposits 4 25,609,321 - - - 25,609,321 Treasury assets 4 85,123,498 2,545,036 10,711,902 27,802 98,408,238Total financial assets 110,732,819 2,545,036 10,711,902 1,277,802 125,267,559Liabilities Non-current Interest-bearing debt Bond loans 24.3 - - 140,000,000 40,000,000 180,000,000 Bank loans 24.3 32,695,653 19,978,413 38,556,259 2,140,919 93,371,244 Finance leases 12 2,441,096 - - - 2,441,096Current Interest-bearing debt Bank loans 24.3 36,948,584 3,719,929 15,507,101 815,296 56,990,910 Bank overdrafts 24.3 9,336,458 4,827,397 - - 14,163,855 Finance leases 12 656,874 - - - 656,874Total financial liabilities 82,078,665 28,525,739 194,063,360 42,956,215 347,623,979Net exposure to interest rate risk 28,654,154 (25,980,703) (183,351,458) (41,678,413) (222,356,420)



Assets Non-current Non-current liabilities 17 - - - 1,250,000 1,250,000Current Cash and cash equivalents Liquid bank deposits 4 23,823,377 - - - 23,823,377 Treasury assets 4 40,666,224 8,242,163 - - 48,908,387Total financial assets 64,489,601 8,242,163 - 1,250,000 73,981,764Liabilities Non-current Interest-bearing debt Bond loans 24.3 - - 60,000,000 40,000,000 100,000,000 Bank loans 24.3 118,190,604 38,753,019 55,313,327 - 212,256,950 Finance leases 12 2,978,662 - 120,708 - 3,099,370Current Interest-bearing debt Bank loans 24.3 6,876,469 2,844,282 15,454,456 - 25,175,207 Bank overdrafts 24.3 6,291,048 3,204,840 1,433,290 - 10,929,178 Finance leases 12 511,296 662 39,975 - 551,933Total financial liabilities 134,848,079 44,802,803 132,361,756 40,000,000 352,012,638Net exposure to interest rate risk (70,358,478) (36,560,640) (132,361,756) (38,750,000) (278,030,874)

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The Group uses sensitivity analysis when measuring the estimated chan-ges on earnings and equity of an imme-diate increase or decrease in market in-terest rates, with all other variables held constant. This analysis is only for illus-trative purposes, bearing in mind that in practice, market rates rarely change in isolation. The sensitivity analysis is based on the following assumptions:

(I) Changes in market interest rates affect interest income or expense of floating rate financial instruments;

(II) Changes in market interest rates

only affect interest income or expense in relation to financial instruments with fixed rate interest rates if these are re-cognised at fair value;

(III) Changes in market interest rates affect the fair value of derivative finan-cial instruments and other financial as-sets and financial liabilities;

(IV) Change in the fair value of deriva-tive financial instruments and other fi-nancial assets and financial liabilities are estimated discounting future cash flows of net present values, using ma-rket rates at the end of the year.


Assets Non-current Non-current liabilities 17 - - - 1,250,000 1,250,000Current Cash and cash equivalents Liquid bank deposits 4 23,823,377 - - - 23,823,377 Treasury assets 4 40,666,224 8,242,163 - - 48,908,387Total financial assets 64,489,601 8,242,163 - 1,250,000 73,981,764Liabilities Non-current Interest-bearing debt Bond loans 24.3 - - 60,000,000 40,000,000 100,000,000 Bank loans 24.3 118,190,604 38,753,019 55,313,327 - 212,256,950 Finance leases 12 2,978,662 - 120,708 - 3,099,370Current Interest-bearing debt Bank loans 24.3 6,876,469 2,844,282 15,454,456 - 25,175,207 Bank overdrafts 24.3 6,291,048 3,204,840 1,433,290 - 10,929,178 Finance leases 12 511,296 662 39,975 - 551,933Total financial liabilities 134,848,079 44,802,803 132,361,756 40,000,000 352,012,638Net exposure to interest rate risk (70,358,478) (36,560,640) (132,361,756) (38,750,000) (278,030,874)


Under these assumptions, an increase or decrease of 0.50% in market interest rates for all the currencies for which the Group has borrowings or derivative financial instruments at 31 December 2013 and 2012 would result as follows:

_38.3 CREDIT RISK

Deterioration in global economic con-ditions or adverse situations which af-fect economies at the local level could give rise to situations in which cus-tomers are unable to meet their com-mitments on purchases of products.

Credit insurance has been one of the in-struments employed by the Group to miti-gate the negative impact of this type of risk.

Sales not covered by credit insurance are subject to rules which ensure that these are made to customers with proper credit history and within the maximum predefined exposure lim-its and approved balances for each customer.

The Group carried out within the ambit of its activity periodic renegotiations of outstanding balances in accordance with its risk management policy.

At 31 December 2013 and 2012, trade receivable balances presented the fol-lowing ageing profile, taking into ac-count the due date of the outstanding amounts:

31/12/13 31/12/12Amounts in Euro 0,5% INCREASE 0,5% DECREASE 0,5% INCREASE 0,5% DECREASE

Shareholders’ equity 677,175 (678,852) 862,969 (888,525)Net income for the period (911,782) 911,782 (811,914) 809,212 (234,607) 232,930 51,055 (79,313)

Amounts in Euro 31/12/13 31/12/12 Amounts not yet past due 30,471,424 31,288,426Amounts past due: from 1 to 90 days 13,614,867 16,356,922 from 91 to 180 days 1,764,979 5,097,037 from 181to 360 days 1,921,667 2,924,996 from 361to 540 days 1,877,408 2,137,831 from 541 to 720 days 1,517,671 1,279,816 more than 721 days 10,236,477 9,826,447 In legal collection proceedings 12,372,351 8,891,210 43,305,420 46,514,259Total trade receivables balances 73,776,844 77,802,685Impairments (25,328,905) (22,123,192)Net trade receivables balances (Note 19.2) 48,447,939 55,679,493Contracted credit insurance limit 10,244,944 11,241,547

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These amounts correspond to the balances outstanding relative to con-tracted payment terms. Despite there being delays in settlement of certain amounts compared to payment terms, this does not result in the identification of impairment situations other than those recognised as losses.

Losses recognised in the period are calculated on the basis of information gathered regularly regarding the finan-cial performance of customers which allow, in conjunction with experience gained in the analysis of the portfolio

“Other” in the above table refers to treasury investments and bank depo-sits with financial institutions in Angola and Tunisia, respectively, in respect of which it has not been possible to obtain a credit rating for the dates presented.

and doubtful debts previously recor-ded, and the balances not covered by credit insurance. The fact that there are guarantees for a significant part of the outstanding balances justifies the fact that no impairment loss has been recorded relating to those balances.

The quality of the Group’s credit risk at 31 December 2013 and 2012 relating to financial assets (bank balances and derivative financial instruments with positive fair value) whose counterpar-ties are financial institutions is detailed as follows:

Amounts in Euro 31/12/13 31/12/12 Rating: A+ - 598,272A 68,566 -BBB 85,024 -BBB - 1,004,390 317,682BB 6,830,950 10,825,969BB- 26,294,500 9,856,754B+ - 4,723,657B 18,871,557 1,553,028Other 70,862,573 44,587,437 124,017,560 72,462,799


31/12/13 31/12/12Amounts in Euro GROSS VALUE JV GUARANTEES GROSS VALUE JV GUARANTEES Past due debtor balances not impaired: Past due for less than 3 months 13,518,183 6,610,477 16,228,085 8,231,449 Past due for more than 3 months 4,466,381 449,968 8,162,982 321,198 17,984,564 7,060,445 24,391,067 8,552,647Past due debtor balances impaired: Past due for less than 3 months 96,684 - 128,837 - Past due for more than 3 months 25,224,172 - 21,994,355 - 25,320,856 - 22,123,192 - 43,305,420 7,060,445 46,514,259 8,552,647

The aged analysis of trade receivable balances and respective impairment at 31 December 2013 and 2012 which are now due is as follows:

As described above, the Group adop-ted a credit insurance policy for the majority of trade receivable balances and has a practice of selecting financial entities with sound financial ratings as counterparties in its transactions. Ac-cordingly, it is the Group’s conviction

that the actual exposure to credit risk is mitigated within acceptable levels.

The maximum exposure to credit risk in the balance sheet at 31 Decem-ber 2013 and 2012 is detailed is as follows:

Amounts in Euro NOTE 31/12/13 31/12/12

Non current assets Other accounts receivable 19 2,407,210 2,639,982Other financial assets 17 3,650,427 1,678,153 Current assets Trade receivables 19 48,447,939 55,679,493Other accounts receivable 19 13,975,118 80,038,893Other financial assets 17 - -Cash and cash equivalents 4 124,323,147 72,731,764 Exposure to off-balance sheet credit risk Guarantees and commitments 42 164,723,143 198,866,826

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31/12/13 31/12/12Amounts in Euro GROSS VALUE JV GUARANTEES GROSS VALUE JV GUARANTEES Past due debtor balances not impaired: Past due for less than 3 months 13,518,183 6,610,477 16,228,085 8,231,449 Past due for more than 3 months 4,466,381 449,968 8,162,982 321,198 17,984,564 7,060,445 24,391,067 8,552,647Past due debtor balances impaired: Past due for less than 3 months 96,684 - 128,837 - Past due for more than 3 months 25,224,172 - 21,994,355 - 25,320,856 - 22,123,192 - 43,305,420 7,060,445 46,514,259 8,552,647


_38.4 LIQUIDITY RISK

The Group manages liquidity risk in two ways: first it ensures that its interest-bearing debt has a medium and long-term profile with maturities in line with the lives of the assets fi-nanced, and second having access to surplus credit facilities.

The projection of cash flows is per-formed by the Group’s operating en-tities and aggregated annually by the central treasury department in the compilation of the annual budget. The Group’s central treasury depart-ment is charged with monitoring the Group’s liquidity requirements so as

to ensure the maintenance of a proper level of available funds for operational requirements. These projections take into consideration the Group’s debt financing plans, compliance with in-ternal objectives relating to balance sheet ratios and, where applicable, compliance with external require-ments related to operating activities, and with the Group’s legal, tax and operational obligations.

The liquidity of the financial liabilities contracted will generate the following undiscounted monetary flows, inclu-ding interest, based on the remaining term up until contractual maturity at balance sheet date:

31/12/13 31/12/12 UP TO MORE THAN UP TO MORE THAN Amounts in Euro NOTE 1 YEAR 1-5 YEARS 5 YEARS TOTAL 1 YEAR 1-5 YEARS 5 YEARS TOTAL

Shareholders/ members 37 1,655,133 585,000 - 2,240,133 2,100,022 505,000 - 2,605,022Interest-bearing loans Bond loan Capital 24.3 - 180,000,000 - 180,000,000 - 100,000,000 - 100,000,000 Interest 7,128,450 25,226,338 - 32,354,788 3,976,851 17,664,850 - 21,641,701Bank loans Capital 24.3 56,990,910 85,298,192 8,073,052 150,362,154 25,175,207 196,077,170 16,179,780 237,432,157 Interest 9,128,812 21,469,411 1,158,192 31,756,415 8,367,423 19,418,706 1,375,733 29,161,862Other loans Capital 24.3 1,811,398 7,108,517 - 8,919,915 1,143,146 8,741,551 - 9,884,697Finance leases Capital 12.1 656,874 2,441,096 - 3,097,970 551,933 2,423,817 675,553 3,651,303 Interest 12.1 136,942 298,975 - 435,917 177,896 397,111 18,788 593,795Bank overdrafts Capital 24.3 14,163,855 - - 14,163,855 10,929,178 - - 10,929,178 Interest 305,948 - - 305,948 41,147 - - 41,147Other accounts payable Derivative financial instruments (*) 1,371,423 3,222,074 - 4,593,497 1,118,100 3,903,340 - 5,021,440 Fixed asset supplies 24.4 2,610,737 - - 2,610,737 3,210,979 - - 3,210,979 Other creditors 24.4 4,050,065 - - 4,050,065 3,240,653 - - 3,240,653 Creditors for accrued costs 24.4 24,339,927 - - 24,339,927 24,494,519 - - 24,494,519Trade payables 24.2 42,321,474 - - 42,321,474 35,728,624 - - 35,728,624 166,671,948 325,649,603 9,231,244 501,552,795 120,255,678 349,131,545 18,249,854 487,637,077

(*) Non discounted values

169

31/12/13 31/12/12 UP TO MORE THAN UP TO MORE THAN Amounts in Euro NOTE 1 YEAR 1-5 YEARS 5 YEARS TOTAL 1 YEAR 1-5 YEARS 5 YEARS TOTAL

Shareholders/ members 37 1,655,133 585,000 - 2,240,133 2,100,022 505,000 - 2,605,022Interest-bearing loans Bond loan Capital 24.3 - 180,000,000 - 180,000,000 - 100,000,000 - 100,000,000 Interest 7,128,450 25,226,338 - 32,354,788 3,976,851 17,664,850 - 21,641,701Bank loans Capital 24.3 56,990,910 85,298,192 8,073,052 150,362,154 25,175,207 196,077,170 16,179,780 237,432,157 Interest 9,128,812 21,469,411 1,158,192 31,756,415 8,367,423 19,418,706 1,375,733 29,161,862Other loans Capital 24.3 1,811,398 7,108,517 - 8,919,915 1,143,146 8,741,551 - 9,884,697Finance leases Capital 12.1 656,874 2,441,096 - 3,097,970 551,933 2,423,817 675,553 3,651,303 Interest 12.1 136,942 298,975 - 435,917 177,896 397,111 18,788 593,795Bank overdrafts Capital 24.3 14,163,855 - - 14,163,855 10,929,178 - - 10,929,178 Interest 305,948 - - 305,948 41,147 - - 41,147Other accounts payable Derivative financial instruments (*) 1,371,423 3,222,074 - 4,593,497 1,118,100 3,903,340 - 5,021,440 Fixed asset supplies 24.4 2,610,737 - - 2,610,737 3,210,979 - - 3,210,979 Other creditors 24.4 4,050,065 - - 4,050,065 3,240,653 - - 3,240,653 Creditors for accrued costs 24.4 24,339,927 - - 24,339,927 24,494,519 - - 24,494,519Trade payables 24.2 42,321,474 - - 42,321,474 35,728,624 - - 35,728,624 166,671,948 325,649,603 9,231,244 501,552,795 120,255,678 349,131,545 18,249,854 487,637,077

(*) Non discounted values


_39. FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS

With the object of minimising exposure to changes in exchange rates, interest rates on borrowings and to hedge against the price risk associated with highly probable future transactions involving emission ri-ghts, the Group entered into a number of derivative financial instrument contracts.

The fair value of derivative financial ins-truments is recorded: (i) when positive, in assets under other financial assets (Note 17) and (ii) when negative, in lia-bilities under other financial liabilities (Note 24).

At 31 December 2013 and 2012, the fair value of the financial instruments is summarised as follows:

The following movements took place in the balance sheet relating to the fair va-lue of financial instruments in the years ended 31 December 2013 and 2012:

NOTIONAL Amounts in Euro CURRENCY AMOUNT MATURITY 31/12/13 31/12/12 Cash flow hedge Interest rate swaps EUR 40,000,000 2017 (4,262,775) (5,795,506) 40,000,000 (4,262,775) (5,795,506)

31/12/13 31/12/12 CHANGE IN FAIR VALUE CHANGE IN FAIR VALUE Amounts in Euro CASH FLOW HEDGE TOTAL HELD-FOR-TRADING CASH FLOW HEDGE TOTAL

Opening balance (5,795,506) (5,795,506) (160,746) (2,677,971) (2,838,717)Currency adjustment - - (485) - (485)Maturity - - 161,231 (1,574,504) (1,413,273)Fair value increases 1,532,731 1,532,731 - - -Fair value decreases - - - (1,403,849) (1,403,849)Fair value - Ineffective financial instrument (Note 35) - - - (139,182) (139,182)Closing balance (4,262,775) (4,262,775) - (5,795,506) (5,795,506)

171

NOTIONAL Amounts in Euro CURRENCY AMOUNT MATURITY 31/12/13 31/12/12 Cash flow hedge Interest rate swaps EUR 40,000,000 2017 (4,262,775) (5,795,506) 40,000,000 (4,262,775) (5,795,506)

31/12/13 31/12/12 CHANGE IN FAIR VALUE CHANGE IN FAIR VALUE Amounts in Euro CASH FLOW HEDGE TOTAL HELD-FOR-TRADING CASH FLOW HEDGE TOTAL

Opening balance (5,795,506) (5,795,506) (160,746) (2,677,971) (2,838,717)Currency adjustment - - (485) - (485)Maturity - - 161,231 (1,574,504) (1,413,273)Fair value increases 1,532,731 1,532,731 - - -Fair value decreases - - - (1,403,849) (1,403,849)Fair value - Ineffective financial instrument (Note 35) - - - (139,182) (139,182)Closing balance (4,262,775) (4,262,775) - (5,795,506) (5,795,506)


CASH FLOW HEDGE DERIVATIVES

In the year ended 31 December 2012, the Group recognised gains from chan-ges in the fair value of derivative finan-cial instruments held-for-trading, rela-ted to currency forwards, in the amount of Euro 161,231 under the captions “Other income and gains” (Note 32).

During the year ended 31 December 2009, the Group entered into a held--for-trading derivative contract – an in-terest rate swap (IRS,) with a notional value of Euro 40million. However, after carrying out prospective and retros-pective effectiveness tests, the ope-ration was deemed to be a cash flow hedge effective 1 July 2010.

In the conduct of effectiveness tests, the linear regression method is used which analyses the statistical correla-tion between the change in the swap’s fair value and the change in the fair va-

(II) Losses arising on fair value chan-ges in emission right financial derivati-ves amounting to Euro 1,574,504 (Note 21.5.4), under the caption “Other chan-ges in capital and reserves attributable to the company’s equity holders, net of res-pective deferred taxes of Euro 495,969.

(III) Losses on the ineffective portion of the cash flow financial derivative relating to interest rate swaps in the amount of Euro 139,182 (Note 35), respectively, in the caption “Finance costs (net)”.

lue of the debt (borrowings) attributable to the changes in the Euribor interest rate.

HELD-FOR-TRADING DERIVATIVES

In the years ended 31 December 2013 and 2012 the Group recorded:

(I) Gains arising on fair value changes in hedging derivative financial instru-ments relating to interest rate swaps in the amount of Euro 1,532,731 and losses in the amount of Euro 1,403,849 (Note 21.5.4), respectively, under the caption “Other changes in capital and reserves attributable to the company’s equity holders”, net of respective de-ferred taxes of Euro 424,313 and Euro 372,020.

The fair value of the interest rate swap of Euro 4,262,775 Euro and Euro 5,795,506, respectively, is apportioned to the following captions in the Group’s shareholders’ equity:

Amounts in Euro 31/12/13 31/12/12 Fair value reserve for hedging derivatives (Note 21.5.4) (906,941) (2,439,672)Retained earnings (3,355,834) (3,216,652)Net income for the year: Net finance cost - ineffective financial instrument (Note 35) - (139,182) (4,262,775) (5,795,506)

173

The dollar offset method is used which adopts the “hypothetical derivative” approach for purposes of recording ineffectiveness. The method entails the definition of a hypothetical deriva-tive which replicates the conditions of the hedged instrument, and sub-sequently the comparison between the variations occurring in the flows generated by the same hypothetical derivative and the variations incurred in the flows generated by the hedging instrument. In this specific case, the ratio of the change in the fair value of the hedging instrument was used, di-vided by the change in the fair value of the bond loan attributable to changes in the 6-month Euribor rate compared with the hedging instrument’s fixed benchmark rate.


_40. ENVIRONMENTAL EXPENDITURE

Within the scope of its business opera-tions the Group incurs various environ-mental expenditure which, depending on its characteristics, is capitalised or recognised as a charge in operating results of the period.

Environmental expenditure incurred in order to preserve resources or to avoid or reduce future damage, and which is deemed to permit prolonging the life or expanding the capacity or improving the security or efficiency of other assets held by the Group, is capitalised.

Expenditure capitalised and recogni-sed as costs in the years ended 31 December 2013 and 2012 comprised:

Amounts in Euro 31/12/13 31/12/12 IMPUTED IMPUTED AREAS TO COSTS CAPITALISED TOTAL TO COSTS CAPITALISED TOTAL

Emissions 959,171 2,643,482 3,602,653 1,021,928 3,994,031 5,015,959Residue water management 38,608 - 38,608 45,894 - 45,894Residue management 1,549,914 6,690,176 8,240,090 1,818,619 1,905,358 3,723,977Protection of soil and subterranean water 4,674 65,227 69,901 2,473 40,592 43,065Nature conservation 506,726 37,201 543,927 857,454 156,582 1,014,036Noise and vibration 60,000 - 60,000 - - -Other environmental protection activities 380,179 18,558 398,737 475,295 163,550 638,845 3,499,272 9,454,644 12,953,916 4,221,663 6,260,113 10,481,776

175

EMISSION RIGHTS

Within the scope of the Kyoto Protocol, the European Union has undertaken to curb the emissions of greenhouse gases. In this context, a Community Directive was published which makes provision for the trading in emission rights. This directive was transposed into Portuguese legislation and is appli-cable with effect from 1 January 2005, amongst others, to the cement industry (Note 14).

Amounts in Euro 31/12/13 31/12/12 IMPUTED IMPUTED AREAS TO COSTS CAPITALISED TOTAL TO COSTS CAPITALISED TOTAL

Emissions 959,171 2,643,482 3,602,653 1,021,928 3,994,031 5,015,959Residue water management 38,608 - 38,608 45,894 - 45,894Residue management 1,549,914 6,690,176 8,240,090 1,818,619 1,905,358 3,723,977Protection of soil and subterranean water 4,674 65,227 69,901 2,473 40,592 43,065Nature conservation 506,726 37,201 543,927 857,454 156,582 1,014,036Noise and vibration 60,000 - 60,000 - - -Other environmental protection activities 380,179 18,558 398,737 475,295 163,550 638,845 3,499,272 9,454,644 12,953,916 4,221,663 6,260,113 10,481,776


_41. AUDITORS’ REMUNERATION

At 31 December 2013 and 2012, ex-penses relating to the statutory audit and audit services comprised:

Amounts in Euro 31/12/13 31/12/12 Statutory audit services 347,345 359,183Other assurance services - 1,500Tax consultancy services 10,221 41,717Other non-audit services 498 37,035 358,064 439,435

177

(a) As mentioned in Note 26, as at 19 De-cember 2013, Secil paid tax debts under the Special Regime for the Settlement of Tax and Social Security Debts (RERD). These debts were guaranteed by Secil through bank guarantees issued to the 2nd Setúbal tax office, in the amount of Euro 13,698,054. Although the debts have been settled as of 31 December 2013, the Tax Administration had not yet proceeded with the return of these guarantees.

(b) Secil understands that the promissory notes issued to guarantee loans obtai-ned by the Group, shall not be disclosed as commitments, as their loans are re-cognized as liabilities by the Group. Thus in the period ended 31 December 2013 changed its disclosure criteria.

(c) These promissory notes regard to 50% of two loans denominated “Cé-dulas de Crédito Bancário”, contrac-

ted by the associated company Mar-gem - Companhia de Mineração in the amount of BRL 50,000,000.

(d) This warranty respect to 100% of the loan amount called “EKF”, contrac-ted by the associated company Mar-gem - Companhia de Mineração in the amount of BRL 200,500,000.

_42. COMMITMENTS

_42.1 GUARANTEES AND OTHER FINANCIAL COMMITMENTS

At 31 December 2013 and 2012, gua-rantees issued by the Group and other financial commitments were as follows:

Amounts in Euro 31/12/13 31/12/12 Guarantees issued 2nd Setúbal tax office (a) 13,698,054 10,082,208 IAPMEI (under QREN) 2,299,046 3,494,696 IAPMEI (under PEDIP) 99,760 99,760 APSS - Administração dos Portos de Setúbal e Sesimbra 2,547,495 2,547,495 APDL - Administração do Porto de Leixões 676,920 680,529 Direcção Geral de Alfândegas (Customs Department) 854,414 800,000 Comissão de Coordenação e Desenv. Regional Centro 845,173 845,173 Comissão de Coordenação e Desenv. Regional LVT 994,338 994,338 Comissão de Coordenação e Desenv. Regional Algarve 480,804 480,804 Comissão de Coordenação e Desenv. Regional Norte 236,421 236,403 Secretaria Regional do Ambiente e Recursos Naturais 274,595 199,055 Instituto de Conservação da Natureza - Arrábida 454,958 280,639 Others 585,590 1,027,858 24,047,568 21,768,958Letters of credit 1,306,728 3,093,769Purchase commitments to suppliers 11,620,085 18,244,473Promissory notes as security for loans: Group (b) - 137,265,766 Other financial investments (c) 15,348,712 18,493,860 15,348,712 155,759,626Warranty to guarantee the loans obtained: Other financial investments (d) 61,548,379 -Mortgages: Land, buildings and equipments from Sibline 50,590,801 52,880,097Guarantee 260,870 -


_42.2 OTHER COMMITMENTS

PROMISSORY LIENS AND MORTGAGES

Secil Martingança contracted in 2010 a new bank loan in the amount of Euro 2.500.000 for the construction of its new plant located in Montijo and constitu-ted a mortgage over the relevant plot of land. At 31 December 2013 the total loan balance outstanding totalled Euro 1,428,571.

INVESTMENT IN A NEW PLANT IN ANGOLA

In terms of the Memorandum of Unders-tanding signed between the Angolan Government and the subsidiary Secil in April 2004, Secil – Companhia de Ce-ment do Lobito, S.A. – approximately 51% held by the SECIL Group and, indi-rectly, 49% by the Angolan State - was incorporated on 29 November 2005 and commenced operations on 1 January 2006. Accordingly, the contract for the operation of the Encime do Lobito plant, entered into between the Angolan State and Tecnosecil (now called Secil An-gola) and which has been in force since September 2000, has now terminated.

Secil Lobito’s share capital of USD 21.274.286 was paid up through the transfer of the tangible and intangi-ble assets of Secil Angola and En-cime U.E.E. respectively by the SECIL Group and by the Angolan Government (through Encime U.E.E.) at the amount resulting from the valuation carried out in October 2003 by an independent in-ternational audit firm.

In this Memorandum of Agreement, it was estimated that within a time hori-zon of 36 months commencing from the date the respective share capital was paid up, Secil Lobito would build a cement and clinker factory in Lobito. On 26 October 2007, the Angolan Cabinet approved the Private Invest-ment Project called the “Lobito New Cement Factory” involving an amount of USD 91,539,000, contracted on 14 December 2007, by Secil Lobito and by ANIP – Agência Nacional para o Inves-timento Privado, the latter representing the Angolan state. Furthermore, in 2008, an electric--power generating plant costing USD 18.000.000 was added to the invest-ment.

However it has not yet been possible for the subsidiary Secil Lobito to com-mence construction of the new plant.

PLEDGE DEPOSITS

The subsidiary Ciminpart sold in 2012 its financial interest in VIROC to a Re-covery Fund. A bank deposit of Euro 1,250,000 (Note 17) has been pledged, as collateral to this transaction.

“FIDUCIARY” SELL

In 2013, Margem - Companhia de Mi-neração, a company indirectly held by

Secil with a 30.95% interest, contrac-ted two loans denominated “Cédulas de Crédito Bancário” amounting to 50,000,000 Brazilian Real each (Euro 15,348,723 each), to fund cash require-ments arising from the construction of the new power plant in Adrianópolis. As guarantee for these loans, Ciminpart S.G.P.S., S.A made the “Fiduciary” sell of Supremo Cimentos, S.A. shares.

179

_43. POST-BALANCE SHEET EVENTS

There were no post-balance events which provide additional information on conditions existing at the balance sheet date or provide information on conditions which occurred after the balance sheet date.

CHAIRMAN

Pedro Mendonça de Queiroz Pereira

DIRECTORS

Gonçalo de Castro Salazar LeiteFrancisco José Melo e Castro GuedesCarlos Alberto Medeiros AbreuSérgio António Alves MartinsJoão Luís Barbosa Pereira de Vasconcelos José Miguel Pereira Gens ParedesPaulo Miguel Garcês Ventura

CHARTERED ACCOUNTANT

Emília Rosa Mota de Carvalho

180 ANNEXES | DIRECTOR’S REPORT 2013

181

1. report and Opinion of the Audit Board Consolidated Accounts2. Consolidated Statutory Audit Report

ANNEXES

186 SUSTAINABILITY REPORT | DIRECTORS’ REPORT 2013

187

SUSTAINABILITYREPORT

1. This Report 2. Secil 3. Sustainability Strategy and Management 4. Sustainability - Priorities for the future5. Secil in numbers

SUSTAINABILITY REPORT

1. This report 2. Secil3. Sustainability strategy and management4. Sustainability - Priorities for the future5. Secil in numbers


In line with the GRI version 3.0, this re-port focuses on the key events and re-sults of 2013 relating to the experience of sustainability at Secil, in the cement activity at Secil Group.

Under Visão 2050 (Vision 2050), laun-ched in February 2010 by the World Business Council for Sustainable De-velopment (WBCSD), it is estimated that in 2050 the world population will reach 9 billion people. For businesses, this fore-cast represents great opportunities with millions of new consumers. At the same time, however, it presents an immense challenge in how to ensure a lifestyle and consumption patterns compatible with the limitations of natural resources.

The ultimate goal is to ensure that “in 2050, about 9 billion people will live well, within the limits of the planet”.

To achieve the Visão 2050 results, the WBCSD has developed ACÇÃO 2020 (ACTION 2020)- a roadmap for compa-nies showing them how to positively in-fluence environmental and social trends, while increasing their own capacity to withstand problems such as climate change and demographic change.

Secil is a member of the Cement Sus-tainability Initiative (CSI) of the WBCSD, and of Projecto Acção 2020 (Action Project) promoted by the Portuguese Business Council for Sustainable De-

THIS REPORT01.

189

velopment (BCSD), closely following and contributing to the development of strategies aimed at achieving the set objectives.

The presentation of this report will be based on Secil’s responses, as a ce-ment industry, to Priorities for the Future arising from ACÇÃO 2020 and from the limits of the planet.

This report is published in conjunction with the Annual Report and Accounts and the Social Responsibility Report. Accordingly, economic performance and activities with staff and the com-munity will be addressed in more detail in those two reports.

For more detail on particular aspects of Secil’s activity, please consult our web-site (www.secil.pt).

Secil encourages and welcomes your feedback. It recognizes that it is through dialogue and the exchange of ideas that higher levels of excellence can be achieved both at business level and in defence of the interests of stakeholders.

Additional information, comments or suggestions can be obtained from:

Secil – Companhia Geral de Cal e Cimento, SAMr José Bravo FerreiraDirector of the Department of Sustainability, External Institutional ProcessesFábrica do Outão – Apartado 712901-864 SetúbalE-mail: [email protected] e/ou [email protected]: +351 212 198 230


Secil is a Corporate Group operating in several countries, engaged particu-larly in the production of cement, the production and sale of concrete and aggregates and quarrying, through its subsidiaries.

It also includes companies operating in complementary areas, such as the distribution of construction materials, design and implementation of industrial projects, development of solutions in the field of environmental protection and the use of waste as an energy source.

It currently has 2,127 employees throu-ghout all its areas of activity. Products are marketed and distributed by the respective marketing departments, a little throughout the whole world

TURNOVER SALES OF CLINKER AND CEMENT NO. OF EMPLOYEES

SECIL02.

64%

1%2%

17%16%

Cabo verde

Angola

Líbano

Tunísia

Portugal

VENDAS DE CLÍNQUER E CIMENTO

Cabo verde

Angola

Líbano

Tunísia

Portugal


PÁGINA 3 DO WORD PÁGINA 3 DO WORD PÁGINA 3 DO WORD PÁGINA 6 DO WORD

PÁGINA 14 DO WORD

58%

1%

6%

20% 15%

Cabo verde

Angola

Líbano

Tunísia

Portugal

PNA

Área de estudo

Limite propriedade SECIL

Locais de amostragem

Nº DE COLABORADORES LIMITES DO PLANETA

45%

1%

24%

12%18%

ACIDIFICAÇÃO OCEÂNICA ESGOTAMENTO DO OZONO FRONTEIRA DOS CICLOS USO GLOBAL DE MUDANÇA NO USO DE

TAX

A DE P

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B

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RSID

ADE

(AIN

DA N

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FÓSFOR

FÓSFORO

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DO FÓSO FÓ

CICLO DLO D

FÓSFÓS

ORO

CICLO DO NITROGÉNIO

64%

1%2%

17%16%

Cabo verde

Angola

Líbano

Tunísia

Portugal


Cabo verde

Angola

Líbano

Tunísia

Portugal



PÁGINA 14 DO WORD

58%

1%

6%

20% 15%

Cabo verde

Angola

Líbano

Tunísia

Portugal

PNA

Área de estudo




45%

1%

24%

12%18%


TAX

A DE P

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DE

C

ARGA

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(AIN

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FÓSFOR

FÓSFORO

LO DO FÓS

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CICLO DLO D

FÓSFÓS

ORO


64%

1%2%

17%16%

Cabo verde

Angola

Líbano

Tunísia

Portugal


Cabo verde

Angola

Líbano

Tunísia

Portugal



PÁGINA 14 DO WORD

58%

1%

6%

20% 15%

Cabo verde

Angola

Líbano

Tunísia

Portugal

PNA

Área de estudo




45%

1%

24%

12%18%


TAX

A DE P

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DE

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(AIN

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(AIN

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ORO

FÓSFOR

FÓSFORO

LO DO FÓS

DO FÓSO FÓ

CICLO DLO D

FÓSFÓS

ORO


PORTUGAL LEBANON ANGOLA CAPE VERDETUNISIA

191

64%

1%2%

17%16%

Cabo verde

Angola

Líbano

Tunísia

Portugal


Cabo verde

Angola

Líbano

Tunísia

Portugal



PÁGINA 14 DO WORD

58%

1%

6%

20% 15%

Cabo verde

Angola

Líbano

Tunísia

Portugal

PNA

Área de estudo




45%

1%

24%

12%18%


TAX

A DE P

ERDA

DE

C

ARGA

DE

AERO

SOL

ATM

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POLU

IÇÃO QUÍMICA

MUDANÇA CLIMÁTICA


B

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RSID

ADE

(AIN

DA N

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DO)

(

AINDA

NÃ

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ORO

FÓSFOR

FÓSFORO

LO DO FÓS

DO FÓSO FÓ

CICLO DLO D

FÓSFÓS

ORO


PÁGINA 3 DO WORDPORTUGAL3 PLANTSMACEIRA, PATAIAS AND OUTÃO

TUNISIA1 PLANTGABÈS

ANGOLA1 PLANTLOBITO

LEBANON1 PLANTSIBLINE


SECIL02.

OBJECTIVE WHERE? WHEN? INCOME 2013

Accident rates: Global 2013Reduce the frequency rate (IF) to 8. IF = 13.0Reduce the severity index to (IG) 175. IG = 312.6

Provide Health and Safety Training Global 2013 2.2 h/worker to workers, with a target of 8 h training per year.

Stakeholder consultation Global 2014 OngoingCollection of face-to-face feedback from 100% of stakeholders in Portugal and 60% of stakeholdersin the international operations.

Implementation of a Health and Safety at Work management system Gabès 2014 Ongoingin accordance with OHSAS 18001.

Implementation of an environment and safety management system. Sibline 2014 Ongoing

Reduce specific CO2 emissions per tonne of cement product by 15%, Global 2015 12% reductionfor the year 1990.

Achieve an alternative fuel substitution rate of: Global 2015> 55 % in 2013, in the plants in Portugal 42.1%> 10% in 2015, in the Gabès and Sibline plants 0% Reduce the rate of clinker incorporation to: Global 2013> 74% in grey cement, in 2013 in operations in Portugal 75.7%> 79% in white cement, in 2012 in the Pataias Plant 74.6%> 75% in grey cement, in 2013 in international operations 77.9%

Secil knows what it is seeking to be-come in the future, an industry of high profitability, provided a safe working environment that is valued by all em-ployees and with the lowest possible environmental impact.

193

HOW WILL WE ACHIEVE IT? WHAT ARE THE NEXT STEPS?

Continuing the work of employee consultation and training and monthly monitoring of indicators so that corrective measures can be applied if the improvement trend is not as desired.

Better planning will increase training on this subject, with the aim of minimizing accidents.

2014, will see the continuation of the preparatory work for the stakeholder consultation process in the international operations.

Due to the corporate situation experienced in recent years, certification of the safety management system has been delayed. However, it is planned that it will take place in 2014.

The process of implementation of an integrated quality, environment and safety management system began in October 2010. The system is already in place, and it is expected that certification will be achieved in 2014.

This will be achieved through:> The use of secondary raw materials, preferably already decarbonised, for the manufacture of clinker.> The use of alternative fuels, preferably with higher levels of biomass.> The manufacture of blended cements, with the introduction of secondary raw materials during milling, and consequent reduction of clinker content.

In the Portuguese plants, the goal of 55 % was not achieved, due to issues associated with themix of alternative fuels available on the market and their characteristics.

Maximization of the manufacture of blended cements, through the use of minor components provided in NP EN 197-1.The high rate of export from the plants operating in Portugal undermined the objectives set for grey cement.


SUSTAINABILITY STRATEGY AND MANAGEMENT

03.

The ongoing challenge is to ensure that all activities are carried out sus-tainably, with appropriate return on invested capital, protection of the en-vironment and compliance with social obligations to ensure our future busi-ness continuity.

The sustainability strategy is aligned with the values of Excellence, Accoun-tability, Quality, Innovation and Trans-parency that have long characterized Secil; the strategy is based on 3 prio-rities:

COMPETITIVENESS

Development of technological capa-bilities to optimize production pro-cesses and their support systems, incorporating the best available te-chnology. Innovation in the quality of Secil products, services and solutions provided to Customers, exceeding expectations in relation to the added value they receive, so that we become their preferred partner. Positioning in a globalized world, taking advantage of international business opportunities.

MINIMIZATION OF IMPACTS

Enhance the eco-efficiency of our pro-cesses, mitigating impacts on the en-vironment and guiding actions for the promotion of biodiversity.

ENGAGEMENT WITH STAKEHOLDERS

Foster a work environment valued by employees and consolidate an ethical and civic positioning that is recogni-zed by stakeholders.

Sustainability management is based on consistent application of best prac-tices in governance, in order to ensure adequate control mechanisms for the risks associated with the status of a company with important responsibili-ties to all the stakeholders in the so-ciety where it operates.

The current organizational structu-re is therefore a key to achieving the objectives set, in the management of environmental, social and economic aspects. Given the complex, cross--cutting and multidisciplinary nature of

sustainability, the organizational struc-ture consists of different but comple-mentary units that guarantee the sus-tainability of the organization.

195

1.CLIMATE CHANGE

4. EMISSION OF HAZARDOUS SUBSTANCES

7. SKILLS AND

EMPLOYMENT

2.NUTRIENT CYCLING

5. DRINKING

WATER FOR ALL

8. WELL-BEING AND

SUSTAINABLE LIFESTYLES;

3. DEGRADATION

OF ECOSYSTEMS

6. RIGHTS

AND BASIC NEEDS

9. FOOD

DIRECTLY INFLUENCED BY THE CEMENT INDUSTRY

INDIRECTLY INFLUENCED BY THE CEMENT INDUSTRY

ATMOSPHERIC AEROSOL LOAD (NOT QUANTIFIED)SOMEWHAT INFLUENCED BY THE CEMENT INDUSTRY

LIMITS OF THE PLANET

ACTION 2020 / PRIORITY AREAS

FONT: CEMENT SUSTAINABILITY INITIATIVE FONT: STOCKHOLM RESILIENCE CENTRE

SUSTAINABILITY SCIENCE FOR BIOSPHERE STEWARDSHIP

LIMITS OF THE PLANET

Solutions need to be created that are impactful, measurable, scalable, replicable and that go beyond business-as-usual.

SUSTAINABILITY - PRIORITIES FOR THE FUTURE

04.

PÁGINA 6 DO WORD

Acima dos Limites do planeta

Limites do planeta

LIMITES DO PLANETA

OCEANIC ACIDIFICATION STRATOSPHERIC OZONE FRONTIER WITH GLOBAL USE CHANGIN

B

IODI

VERS

ITY

AT

MOS

PHER

IC A

EROS

OL L

OAD

CHE

MICAL P

OLLUTION

CLIMATE CHANGE

DEPLETION BIOGEOCHEMICAL CYCLES OF DRINKING WATER LAND USE

L

OSS

RATE

(N

OT Q

UANT

IFIE

D)

(NOT

QUANTIFIED)

CYCLE

ROUS CY

ROUS CYC

OSPHOROUHOROUORO

PHOSPHOSPH

ROUROU

CYCL

NITROGEN CYCLE


04.

_4.1 CLIMATE CHANGE

In recent years Secil has made major investments to reduce its CO2 emis-sions by increasing its thermal and electrical efficiency, increasing the co--processing of alternative fuels, using secondary raw materials and testing innovative technologies for carbon capture (microalgae) and low carbon intensity production of cement and clinker.

SPECIFIC CLINKER CO2/T EMISSIONS;

859

851854

842833836

816808 803

798

200

9

20

10

20

11

2012

2013

200

9

20

10

20

11

2012

2013

GROSS NET

SPECIFIC CEMENT PRODUCT CO2/T EMISSIONS

672667 671

661

640

654 640

636631

614

200

9

20

10

20

11

2012

2013

200

9

20

10

20

11

2012

2013

GROSS NET

197

Consumption of Alternative Fuels has already brought us savings of about 1 million tonnes of CO2 since 2005.

ROADMAP TO A LOW CARBON ECONOMY

In 2013 CEMBUREAU (European Ce-ment Association) published its Road-map on the “Role of the Cement indus-try in achieving a low carbon economy in 2050”. This document, which in the same year was adapted to the Portu-guese situation within the ATIC - Ce-ment Industry Technical Association, focuses on a set of ways to reduce CO2 emissions in cement production by using more advanced versions of already known technologies while, at the same time, seeking to speculate on what could be achieved by 2050.

To achieve the 80% emissions reduc-tion suggested by the European Com-mission, innovative and disruptive te-chnologies will be needed, involving significant investment in research and to provide the funds required for their implementation (E.g.: It is estimated that 85 % of clinker production will be equipped with carbon capture and sto-rage technology (CCS)).

The prototype microalgae production unit, which won the National Award for Environmental Innovation 2009 and was one of ten finalists in the EEP Awards (“European Environment Press”), was designed for an area of 10 000 m2.

Carbon Capture and Storage (CCS)

CCS technology is at an early stage of development and the conditions necessary for its public acceptance have not yet been established. It is unlikely to be commercially available before 2030.Secil is participating in a major R & D project, launched in 2006 by ECRA (“European Cement

Research Academy”), to test, with the support of equipment manufacturers, the technical and economic feasibility of application of CO

2 capture technologies in cement plants.

In Portugal, the cement sector plans to take an active role in the development of a technology roadmap for CCS-R (Carbon Capture and Storage - Reuse) together with

the sectors with the highest emissions. It is thought that this project is likely to be launched soon by a group of national agencies and the national cement industry could contribute significantly, as a result of its recent experience in developing technology roadmaps for the international cement industry with the IEA (“ International Energy Agency”) and the WBCSD/CSI.

EVOLUTION OF THE CARBON INTENSITY OF CZ-PRODUCED CLINKER; CO2 EMISSIONS; CLK

ALTERNATIVE FUELS AND SPECIFIC CO2 EMISSIONS

CO2 EMISSIONS CLK

120%

110%

100%

90%

80%

70%

60%

199

0

199

6

2002

2008

199

1

199

7

2003

2009

199

2

199

8

2004

2010

2011

2012

199

3

199

9

2005

199

4

2000

2006

199

5

200

1

2007

MICROALGAE UNIT


MITIGATION IS NEEDED, ADAPTATION IS ESSENTIAL

Faced with the expected increase in extreme weather events such as floods, rising sea levels and natural disasters, the construction of safe buildings and infrastructures is vital. Concrete, which is mainly composed of cement, has a key role to play in supporting the adap-tation of society to the impacts of cli-mate change. Concrete can be used for protection against fire, flooding, for the protection of people, animals, property and the environment. It also plays a pivotal role in guaranteeing a secure supply of clean water and energy.

EUROPEAN CARBON TRADING

CARBON LEAKAGE

During 2013 the main concern of the ce-ment sector in Portugal was the defence of the maintenance of the sector in the list of sectors exposed to the risk of Carbon Leakage. The exit of the sector from the Carbon Leakage list has a major impact on the development of activity, so remai-ning on the list is of vital importance to its survival.

Publication of the list, updated to the end of March 2014, is pending - although the European Commission has already stated that the parameters and classification cri-teria used in the 2009 list will be retained, which will ensure that the sector remains, as desired, on the list of sectors exposed to the risk of Carbon Leakage.

IMPACT OF “BACKLOADING” AND “CSCF”

Early 2014 saw approval of the deferral mechanism for the auctioning of CO2 emission permits (“backloading”) in or-der to temporarily withdraw about 900 million licenses from the market, which should be restored at the end of 2013-2020.

A potential consequence of this measure may be an increase in indirect costs,

04.

NORTH JETTY AT BARRA DO DOURO


199

through electricity prices, which will reflect the increased costs of CO2 permits purchased at auction by the energy utilities.

The unexpected application of a “Cross Sectoral Correction Factor” (CSCF) significantly less than the unit (changing from 0.94272151 in 2013 to 0.82438204 in 2020), which is a much more demanding and difficult “benchmark” to achieve with the cur-rent technology, may mean that cer-tain sectors with a surplus move into deficit, with consequent impacts on domestic and foreign competitiveness conditions. For the national cement industry, not to mention other aspects, mere application of this factor will mean the removal of about 5.5 million permits allocated free of charge.

_4.2. DEGRADATION OF ECOSYSTEMS

CO-PROCESSING OF WASTE

Secil has cooperated with the waste management authorities to develop practices allowing better quality of waste and its suitability for the industry.

The co-processing of waste in the cement industry means that it can be fully used, as the fuel component provides the necessary heat for the process and the material component converts it into cement. Thus, co-pro-cessing brings significant benefits to the company: a safe and effective lo-cal waste treatment option, recycling of waste that would otherwise be lan-dfilled, energy recovery and recycling of resources.

Between 2005 and 2013, the co-proces-sing of about 1 million tonnes of was-te avoided the emission of approximately 1 million tons of CO2 and allowed the reduction of coke importation in 340 thousand tons (26 million euros). The strategy of maximizing the use ofalternative fuels, also reflects an incre-ase of national component Gross Value Added in the cement sector. Indeed, Secil has contributed within its capabilities, to the balance of the com-mercial balance in this period, as the following table shows:

Export of clinker and cement ~ 440 M €Import of petroleum coke avoided ~ 340 M €

CO2 EMISSIONS WITH CO-PROCESSING IN CEMENT KILNS

CO2 EMISSIONS WITHOUT CO-PROCESSING IN CEMENT KILNS

PETROLEUM COKE

ALTERNATIVE FUELS

CO-PROCESSING IN CEMENT KILNS= 7 565 ktCO2 WITHOUT CO-PROCESSING IN CEMENT KILNS= 9679 ktCO2

BIODIVERSITY AND LANDSCAPE RECOVERY

Biodiversity - which encompasses va-riety of ecosystems, species and ge-nes - is our life insurance. It is also our natural capital, providing ecosystem services that underpin our economy.

Loss of biodiversity undermines the provision of these services, becoming a global problem that requires collecti-ve solutions on different scales.

Secil is aware of its responsibility and has been developing strategies to redu-ce the impact on biodiversity resulting from its activities, to contribute to the functioning of a sustainable industry.

6574KTCO2

8688KTCO2

991KTCO2

991KTCO2


04.ENVIRONMENTAL PLANS AND LANDSCAPE RECOVERY

In all its plants in Portugal, Secil has implemented an Environmental and Landscape Recovery Plan (PARP) for gradual recovery of operated areas, by planting native species. The operation/recovery is performed by preparing Three-Year Programmes, with descrip-tions of the landscape operation and recovery for three years, to running alongside the approved Quarry Plan.

RECOVERED AREA / PLANT UN QUARRY LICENSED AREA Secil-Outão 39.6Maceira-Liz % 1.66 Cibra-Pataias 3.6

Since 1997, the Faculty of Science of the University of Lisbon (FCUL) has been collaborating with Secil on the Ecologi-cal Management of Degraded Areas in Limestone Quarries Project. The works focus mainly on study of vegetation and the results have contributed to improve-ments in the recovery programmes of the areas prospected in the Secil-Outão quarries.


201

Limitations to recruitment of native species in hydroseeding mixturesGraça Oliveira, Adelaide Clemente, Alice Nunes & Otilia Correia

A scientific article concerning the use of native plant species in revegetation of quarry programmes was published in August 2013 in the journal Ecological Engineering. The article was the result of an experiment carried out in the Outão nurseries, the aim of which was to simulate the procedures used in hydroseeding in Mediterranean quarries and to study the behaviour of five different species.

SLOPES RECOVERED FROM THE “VALE DE MÓS B”

QUARRY (LIMESTONE) SECIL-OUTÃO.

SLOPES RECOVERED FROM THE VALE DE MÓS

A QUARRY (MARL) SECIL-OUTÃO.

SLOPE RECOVERED FROM THE “MARTINGANÇA-

-MACEIRA” QUARRY (LIMESTONE) MACEIRA-LIZ.

BIODIVERSITY ACTION PLANS

After starting the characterization stu-dies of the flora and fauna in its plants in Portugal, with a huge team of re-searchers from the University of Évo-ra, the University of Lisbon Faculty of Sciences and the Higher Institute of Agronomy, Secil implemented an Ac-tion Plan for wildlife, currently ongoing at different stages in its three plants. The Action Plan, linked to the landsca-pe recovery programmes, defines an active management strategy through

regular monitoring of fauna and conti-nuous evaluation of the effectiveness of the proposed measures, such as the development of artificial shelters and increased water availability. This stra-tegy allows the diversity and abundan-ce of the fauna to be compared with the references already made and for trends over time to be evaluated. Only long-term monitoring will enable the actual success of the Action Plan to be evaluated, so that actions that are not appropriate can be changed and those with positive effects be implemented.


04.

64%

1%2%

17%16%

Cabo verde

Angola

Líbano

Tunísia

Portugal


Cabo verde

Angola

Líbano

Tunísia

Portugal



PÁGINA 14 DO WORD

58%

1%

6%

20% 15%

Cabo verde

Angola

Líbano

Tunísia

Portugal

PNA

Área de estudo




45%

1%

24%

12%18%


TAX

A DE P

ERDA

DE

C

ARGA

DE

AERO

SOL

ATM

OSFÉ

RICO

POLU

IÇÃO QUÍMICA

MUDANÇA CLIMÁTICA


B

IODIVE

RSID

ADE

(AIN

DA N

ÃO Q

UANT

IFICA

DO)

(

AINDA

NÃ

O QUANTIFICADO)

ORO

FÓSFOR

FÓSFORO

LO DO FÓS

DO FÓSO FÓ

CICLO DLO D

FÓSFÓS

ORO


PÁGINA 3 DO WORD

64%

1%2%

17%16%

Cabo verde

Angola

Líbano

Tunísia

Portugal


Cabo verde

Angola

Líbano

Tunísia

Portugal



PÁGINA 14 DO WORD

58%

1%

6%

20% 15%

Cabo verde

Angola

Líbano

Tunísia

Portugal

PNA

Área de estudo




45%

1%

24%

12%18%


TAX

A DE P

ERDA

DE

C

ARGA

DE

AERO

SOL

ATM

OSFÉ

RICO

POLU

IÇÃO QUÍMICA

MUDANÇA CLIMÁTICA


B

IODIVE

RSID

ADE

(AIN

DA N

ÃO Q

UANT

IFICA

DO)

(

AINDA

NÃ

O QUANTIFICADO)

ORO

FÓSFOR

FÓSFORO

LO DO FÓS

DO FÓSO FÓ

CICLO DLO D

FÓSFÓS

ORO


PÁGINA 3 DO WORD

Hemorrhois hippocrepis (Horseshoe whip snake)

SAMPLING SITES EDGE OF SECIL’S PROPERTY STUDY’S AREA ARRABIDA NATIONAL PARK MONITORING OF NEST BOXES

DISTRIBUTION OF THE 40 POINTS PROPOSED FOR INVENTORY

BY DISTANCE BUFFER TO THE PROPERTY AND HABITATS INCLUDED


203

Case Study: “Secil-Outão Biodiversity Framework in the Arrabida Natural Park”

Under the Protocol in force between Secil and the University of Évora, the study the “Secil-Outão Surrounding Area Biodiversity Framework” began in March 2013. This study’s main objectives are:

> To match up the biodiversity of Secil-Outão’s property with the surrounding area within the Arrabida Natural Park (PNA). It is intended that this information will provide a suitable framework for the management of biodiversity at Secil with management at PNA level;

> To contribute to scientific knowledge on the occurrence and distribution of fauna species in the Arrabida Natural Park.

40 sampling sites were selected within a perimeter radius of 5 km from Secil’s property. The study, which provides actions to be undertaken within 13 months, will coincide with the 3rd general sampling inventory of the fauna on Secil’s property and shall include the following groups/species (bats, carnivorous mammals,

rabbits, wild boar, birds of prey, nocturnal birds, songbirds and butterflies).

New data on the distribution range of Hemidactylus turcicus in PortugalPedro A. Salgueiro, Denis Medinas, Carmo Silva, Alexandra Silva & António Mira

An article on the results obtained during the monitoring conducted in 2010 under phase 2 of the Biodiversity Action Plan was published in September 2013, in the Bulletin of the Spanish Herpetological Association. The article entitled “New data on the distribution range of the Turkish Gecko Hemidactylus turcicus (Linnaeus, 1758) (Sauria: Gekkonidae) in Portugal” describes the first regional observation of geckos and their distribution over the Secil-Outão property.

Effects of Forest Management in Bat Communities Case Study in a Fragmented Pine Forest LandscapeDenis Medinas, Mário Carmo, Sofia Eufrázio, Pedro Salgueiro, Carmo Silva, Cátia Sá, Alexandra Silva, João Tiago Marques & António Mira

Presentation of the Poster XI Congress of the

Spanish Association for the Conservation and Study of Mammals (SECEM), part of the Cibra-Pataias Plant Action Plan, which involved the study of patterns of activity and composition of the bat community in the areas surrounding the area of operations of the Cibra-Pataias plant, including the National Forest of Leiria area.

PHOTOGRAPHIC TRAPPING

(HERPESTES ICHNEUMON)

MONITORING OF SHELTERING BOXES

(PIPISTRELLUS SP.)

DETAIL OF THE DISTINCTIVE CHARACTERS

OF AN INDIVIDUAL GECKO (HEMIDACTYLUS

TURCICUS)


04.

_4.3 POTENTIALLY HARMFUL EMISSIONS

In addition to CO2, the manufacturing process generates emissions of ni-trogen oxides (NOx), sulphur dioxide (SO2), particulates, volatile organic compounds (VOCs) and other micro-pollutants which may contribute to lo-cal air pollution.

Part of the facilities provide a range of means for controlling these emissions, including fabric filters, low emission burners, SNCR (Selective non ca-talytic reduction) systems - to control NOx emissions, and injection of lime/calcium hydroxide - for control of SO2 emissions. In addition to these devices, there are also electrostatic filters instal-led in two furnaces.

All facilities are equipped with conti-nuous monitoring of particulate emis-sions, NOx and SO2, TOC, HCl, HF and NH3 with the exception of the Sibline and Gabès plants where continuous monitoring of pollutants such as TOC, HCl and HF is being implemented. For heavy Metals and Dioxins and Furans, ad hoc monitoring is performed.

6,157

5,6896,071

5,347

5,138

1,3161,205 1,411

1,1971,270

200

9

20

10

20

11

2012

2013

200

9

20

10

20

11

2012

2013

t NOx g NOx/t clk

751

569

624 629

401

161

121 145 135

91

200

9

20

10

20

11

2012

2013

200

9

20

10

20

11

2012

2013

t SO2 g SO2/t clk

POTENTIALLY HARMFUL EMISSIONS

580583

434

561

464

124 123101

144 136

200

9

20

10

20

11

2012

2013

200

9

20

10

20

11

2012

2013

t PARTICLES g PARTICLES/t clk


205

The cement industry joined this pro-gramme in 2013, through a Partnership led by CSI/WBCSD, specially dedicated to mercury emissions in cement manu-facture.

Under this programme two working groups were created with the follow-ing objectives:

> To establish a sectoral inventory and benchmark scenarios for the industry;

> To develop Mercury emission reduc-tion guidelines for the cement industry.

_4.4 DRINKING WATER FOR ALL

In the specific case of the cement in-dustry - although not a significant sec-tor in terms of water consumption, with about 2 % of world consumption - water is essential for cooling equip-ment and flue gases and, in some cas-es, cooling inside the mills. In our busi-ness, some water evaporates during the process, but water can and should be recycled/reused, particularly in the case of cooling circuits.

At CSI level, a working group was cre-ated to provide better understanding of the risks for the cement industry, although local conditions of resource availability and the main consumers thereof may be the most significant risk factor.

In 2013, Secil participated in the Glob-al Water Tool pilot project for the ce-ment industry under the CSI Water Task Force (TF9), whose actual use will be implemented in 2014.

MERCURY

UNEP’s Global Mercury Partnership Programme is one of the most im-portant mechanisms in the creation of immediate actions for mitigation/elimination of Mercury. The ultimate goal of this programme is to pro-tect human health and the environ-ment from emissions of mercury and its compounds, by minimizing and where possible eliminating it from an-thropogenic emissions (into the air, water or soil).

IN 2013, 13 % OF WATER CONSUMPTION CAME FROM

PLACES OF EXTREME SCARCITY.

DRINKING WATER FOR ALL

14471342

14421316 1288

200

9

20

10

20

11

20

12

20

13

1000 m3

TOTAL WATER CONSUMPTION

PERFORMANCE OF THE SECIL CEMENT GROUP

1 1 1

0

3

ONLY CEMENT PLANTS

EX

TR

EM

E S

CA

RC

ITY

SH

OR

TAG

E

STR

ES

S

EN

OU

GH

AB

UN

DA

NT

The benchmark range of specific wa-ter consumption in cement produc-tion was based on the values obtai-ned by the four largest producers.

SPECIFIC WATER CONSUMPTION

0,278

0.303

0.254

0,273

0,278

0,281

0,273

200

9

20

10

20

11

20

12

20

13

m3/t CEMENT BENCHMARK


04.

_4.5 RIGHTS AND BASIC NEEDS

OCCUPATIONAL HEALTH AND SAFETY

Health and Safety at Work is a priority issue for Secil. Strategy in this area has the goal of “ZERO FATALITIES”, to re-duce y-o-y accident rates in a sustained manner, to foster a high and increasing awareness of occupational hazards, to provide adequate training for employees and service providers.

Secil intends to implement a sustaina-bility benchmark that is at least compa-rable to that which it uses in Portugal, in all the countries in which it operates, which is why major investments have been made in performance improvement

equipment, not only environmental and industrial, and best practices in health and safety at work and relationship with the surrounding communities have also been introduced. An example of this ac-tion was the establishment of the Com-mission for Environmental Monitoring in Gabès. During 2013, this committee mo-nitored and validated the petroleum coke discharge method at the port of Gabès.

Secil collaborates actively in the CSI Task Force on Health and Safety. The motto of this Task Force is “Aiming for Zero”, i.e. achieving the objective of “zero fatalities” in the operations of the CSI members. While this is an ambitious safety challenge for the cement sector, its success is vital.

NOTE: THIS REPORT ONLY INCLUDES ACCIDENTS THAT

RESULTED IN ABSENCE LASTING MORE THAN 1 DAY.

30

20

10

0

INDEX OF SEVERITY EVALUATION

23.98

17.017.5

20

11

20

10

200

9

20

12

20

13

20

14

20

13

OVERALL OBJECTIVE

20

15

10

5

0

FREQUENCY RATE

20

11

20

10

200

9

20

12

7,0

20

14

13,04

8,0

20

13

20

13

OVERALL OBJECTIVE

Volunteer Firefighters provide training to Secil’s employees

The Volunteer Firefighters of Maceira and Pataias provide training to the Maceira-Liz-and Cibra Pataias’s employees

under the scope “Emergency Combat”.The aim of these actions was to improve the performance of the employees that belong to the Emergency Team –security delegates, area managers, heads of prevention team

and emergency brigade. The actions were more practical unlike previous years that were more theoretical.The number of employees covered was 101, which considered these trainings very positive.

500

400

300

200

100

0

SEVERITY INDEX

312,64

155,0157,0

20

11

20

10

200

9

20

12

20

13

20

14

20

13OVERALL OBJECTIVE


207

1. CLIMATE CHANGE

> INNOVATIVE AND ENERGY-EFFICIENT BUILDINGS> MORE RESILIENT INFRA-STRUCTURE FOR ADAPTA-TION TO CLIMATE CHANGE> NEW PRODUCTS WITH LOWER CARBON INTENSITY> CO2 SEQUESTRATION

> INFRASTRUCTURE FOR MOBILITY PROVIDING BETTER PERFORMANCE IN TRANSPORTATION> BUILDING AT HEIGHT> MORE RESILIENT INFRASTRUCTURE WITH LOW MAINTENANCE COSTS

> SIMPLE> DURABLE> ROBUST > AFFORDABLE> VERSATILE

> RECYCLING OF CONCRETE

CONCRETE

3. DEGRADATION

OF ECOSYSTEMS

8.WELFARE

AND SUSTAINABLE LIFESTYLES

Concrete is the most widely used buil-ding material in the world and is even the most widely consumed resource after water. Its widespread use is a result of its characteristics - strength and durability, versatility, low mainte-nance, produced with high energy effi-ciency, locally produced and used with excellent thermal mass which gives it enormous capacity for energy storage, thus reducing thermal fluctuations in-side buildings.

The current market environment asso-ciated with civil construction challen-ges the responsiveness of companies in finding ways to enhance the viability

of their business, by innovating and refreshing the market with new pro-ducts to meet the new requirements that are being identified, particularly in the areas of urban regeneration (see boxes 1 and 2), maintenance of roads, sustainable construction and even lan-dscaping.

Secil already has a range of innovative technical solutions based on products derived from cement, which can con-tribute to the success of the various urban regeneration operations which are necessary to revitalize and mone-tize large swathes of the urban built heritage.

1. Secil supports the reconstruction of an old washhouse The old washhouse of Vendas de Azeitão reopened to the public on 7thMarch, after general recovery works of the public facilitydated 1916. The Parish

Council of S. Simon was in charge for the intervention and had the Secil’s support.

The recovery works consisted on measures to improve the washing, centered in the consolidating inner and exterior of the building and

rehabilitation of the tank . The work during more than month, included the repair of a wall in risk of falling, the repair of the roof, the recovery of gates and placing new flooring in stone sidewalk at the entrance.

2. Rehabilitation of Francisco Arruda Basic School wins Secil Architecture Award 2012

The architect José Neves is the author of the awarded work that conquered the Secil Architecture Award 2012, the Rehabilitation of

Francisco Arruda School. The Jury of Secil Architecture Award 2012 chaired by architect Manuel Graça Dias, distinguished Rehabilitation of Francisco de Arruda Basic School, in a set of 21 works of exemplary quality Architecture.

Examples of SECIL sustainable products

Unidren: porous concrete specially designed for use in outdoor pavements where ground sealing and management of stormwater are critical success factors.

UniLeve: lightweight concrete manufactured with cork, with expanded clay or with EPS; low density concrete with of thermal/acoustic insulation properties.

Adhere Acústico:associated with Betonilha EcoCork provides soundproofing for percussion noises.

SecilVit Cork: cork insulation panel that combines superior thermal performance for an ETICS system (External Thermal Insulation) for efficient environmental performance.

_4.6 WELL-BEING AND SUSTAINABLE LIFESTYLES

THE ROLE OF CONCRETE... IN ACHIEVING VISÃO 2050


SECIL IN NUMBERS

05.

ECONOMIC INDICATORS UN 2012 2013 Net Assets M € 668 577Equity M € 234 169EBITDA M € 76 64Capex M € 29 32Financial liabilities M € 168 181Return on Assets % - 0.9 - 1.7Return on Equity % - 2.6 - 5.8Net results M € - 6 - 9Cement production capacity 103t 7,650 7 650Cement and Clinker Sales 103t 5,415 5 466Turnover M € 400 374

FINANCIAL FLOWS WITH STAKEHOLDERS UN 2012 2013 Sales to customers 1,000 € 404,128 394,622Other operating revenues 1,000 € 9,256 91 921Total revenues 1,000 € 413,384 486,543Payment of employee salaries 1,000 € 35,702 27,816Sponsorship 1,000 € 895 922Paying of Taxes to the State and Municipalities 1,000 € 7,941 661Payments to Suppliers 1,000 € 317,028 317,676Payment of interest to banks 1,000 € 13,411 18,749Payment of dividends to shareholders 1,000 € 4,152 3,106Total payments 1,000 € 363,247 368,932Balance for the company 1,000 € 50,137 117,611Net refinancing 1,000 € 158,165 1,433Issue bonuses 1,000 € - -Total available for investment 1,000 € 208,302 116,178Financial investments 1,000 € 6,501 27,318Industrial investments 1,000 € 35,941 20,650Agreed loans 1,000 € 192,799 18,265

AMOUNTS RELATED TO SECIL’S GROUP CEMENT ACTIVITY

209

Corporate indicators UN 2012 2013 Number of employees (staff and contractors) no. 1,463 1,407Type of contract Permanent contract % 90.4 90.6Fixed-term contract % 6.8 6.8Temporary assignment % 2.8 2.7Sex Male % 94.1 94.3Female % 5.9 5.7Average age Years 47.3 46.5Age profile < 30 years % 11.0 11.030 – 39 years % 15.2 15.241 – 49 years % 30.6 30.6≥ 50 years % 43.2 43.2Length of service < 1 year % 1.0 1.91 - 9 years % 33.3 32.510 - 24 years % 34.9 30.9≥ 25 years % 30.7 34.8Staff turnover rate % 14.7 6.6Total departures no. 221 96% retirement departures % 13.6 17.6Total new recruitments no. 51 42% graduates recruited % 35.3 59.5Absenteeism % 8.1 6.5% sites with certified health and safety at work management system % 50 50Health and Safety Severity Index (Ig) (1) % 288.2 312.6Frequency Index (If) (1) % 12.7 13.0Index of severity duration or assessment (id) (1) % 22.8 24.0Fatalities (Secil employees) no. 0 1Fatalities per 10,000 workers no. 0 6.8Fatalities (service providers) no. 0 0Fatalities (part three) no. 0 0Accidents (Secil employees) no. 60 53Total accidents no. 77 81Frequency rate (workers Secil) % 18.4 17.2


ENVIRONMENTAL INDICATORS UN 2012 2013 % Sites with certified environmental management system % 67 67% Sites registered on EMAS % 50 50Energy consumption Thermal energy (furnaces) TJ 14,922 14,247Specific thermal consumption MJ/t 3,816 3,632 Electricity GWh 591 540Responsible Use of Fuels and Materials Natural raw materials kt 7,294 7,649Secondary raw materials (SRM) kt 298 249Utilization rate of SRM % 3.5 3.2Solid fossil fuels kt 349 333Gaseous fossil fuels 1,000 Nm3 24 18Alternative Fuels kt 169 169Overall thermal substitution rate % 21.1 21.1Fossil alternatives thermal substitution rate % 11.7 11.1Biomass alternatives thermal substitution rate % 9.4 10.0Climate Protection (9) CO2 Emissions – Gross (2) Mt 3.3 3.2CO2 Emissions – Net (3) Mt 3.1 3.0Specific CO2 emissions per tonne of cement products (4) – gross (2) kg/t 661 640Specific CO2 emissions per tonne of cement products (4) – net (3) kg/t 631 614Clinker incorporation rate (5) % 77.7 77.1Atmospheric emissions (9) Particles kt 0.6 0.5 g/ t clk 144 136NOx kt 5.3 5.1 g/ t clk 1 197 1,270SOx kt 0.6 0.4 g/t clk 135 91% clinker produced with monitoring of major (6) and minor emissions % 67 65% clinker produced with continuous monitoring of major emissions % 100 100Water Consumption Total groundwater 103 m3 1,342 1,288Specific index m3/t cim 0.281 0.273Biodiversity Quarries with recovery plans % 80 80Quarry with community involvement plans (7) % 40 40Active quarries, or those in adjacent areas, which have a high biodiversity value (8) no. 13 13Quarries with high biodiversity value that have implemented biodiversity management plans (as per the above) % 100 100

05.SECIL IN NUMBERS

211

1) THE LOSS RATIOS INCLUDE SECIL EMPLOYEES AND SERVICE PROVIDERS. THE AMOUNTS PRESENTED WERE TRANSFORMED TO THE METHODOLOGY OF THE INTERNATIONAL LABOUR ORGANISATION, WHICH RESULTS IN THE APPLICATION OF ONE MILLION HOURS INSTEAD OF 100,000 HOURS. THE SEVERITY INDEX DOES NOT INCLUDE THE NUMBER OF DAYS LOST LAST YEAR.2) TOTAL CO2 EMISSIONS3)TOTAL CO2 EMISSIONS - CO2 EMISSIONS FROM ALTERNATIVE FUELS4) CLINKER PRODUCED + ADDITIVES CONSUMED IN CEMENT MILLING5) INCLUDES CEMENT FACTORIES AND MILLS6) PARTICLES, NOX E SOX7) GIVEN THAT ONLY THE OUTÃO PLANT HAS A HIGH BIODIVERSITY VALUE, BECAUSE IT IS WITHIN A NATURAL PARK.8) THE CIBRA-PATAIAS PLANT HAS AN ENVIRONMENTAL MONITORING COMMITTEE, BUT THIS HAS BEEN INACTIVE SINCE 20099) 2012 DATA VERIFIED BY AN EXTERNAL ENTITY, IN ACCORDANCE WITH THE FOLLOWING CSI GUIDELINES: MONITORING AND REPORTING OF ATMOSPHERIC EMISSIONS IN THE CEMENT INDUSTRY, VERSION 2, AND MONITORING AND REPORTING OF CO2 EMISSIONS IN THE CEMENT INDUSTRY, VERSION 3.

212 SUSTAINABILITY REPORT | DIRECTORS’ REPORT 2013 ANNEXES | DIRECTOR’S REPORT 2013

213

ANNEXES

1. Verification Statement 2013 - Emissions data Secil CSI 2011- 2012 2. Verification Statement 2013 - CO

2 emission data Secil

CSI 2011-2012

SOCIAL RESPONSIBILITY REPORT | DIRECTORS’ REPORT 2013218

219

1. The Secil Group and its employees2. The Secil Group and the community

SOCIAL RESPONSIBILITYREPORT


mentation of corrective and preventive measures;

> Monitoring of the work environment, including noise, vibration, lighting and air quality;

> Emergency situation simulations;

> Access control;

> Investigation and reporting of all incidents (workplace accidents, near misses and dangerous situations de-tected).

_1.1 HEALTH AND SAFETY AT WORK

Secil actively promotes a health, hy-giene and safety at work policy to ensure that its installations are safe places for all people, both inside and outside the Company to pursue the goal of “Zero Fatalities” and reduce accidents and lost work days.

To that end, various activities have been developed, most of them on-going, aimed at adapting and imple-menting safety manuals and directives to the reality of each Company in the Secil Group. These include:

> The “CSI (Cement Sustainability Ini-tiative) rules relating to Management of Service Providers and Management of Internal and External Transport Dri-ving”.

> Implementation in all Secil Group Companies of the checks stipulated in the Work Equipment Directive (Decree--Law No. 50/2005) and in the resolution of detected non-conformities;

> Systematic identification of hazards, risk analysis and control for all tasks performed at the facilities under Secil’s responsibility;

> Planned and documented audits and safety inspections, connected to the execution of action plans for the imple-

> In 2013 there was an increase in the Secil accident rate, as can be seen in the following graphs. There was a 7.4% increase in frequency and a 24.1% in-crease in the severity rate compared to 2012. In installations located in Por-tugal, there was no fatal workplace accident involving direct employees, service providers or visitors. This was not the case in the manufacturing unit in Lebanon, where we mourn a single accident resulting in the death of an employee.

THE SECIL GROUP AND ITS EMPLOYEES

01.

30

25

20

15

10

5

0No. o

f Acc

iden

ts w

ith L

ost W

orkd

ays

Freq

uenc

y Ra

te

ACCIDENTS BETWEEN THE

PERIOD 2007 TO 2013

FREQUENCY RATE RELATING FOR THE

PERIOD 2007 TO 2013

350

300

250

200

150

100

50

0

195

30.00

19.49

18.52

19.76

14.7012.79

13.74144

140

157

138109 113

200

7

200

8

200

9

2010

2011

2012

2013

SECIL GROUPACCIDENTS WITH LOST WORKDAYS (FREQUENCY)

Graph - I: Frequency Rate Trend - Accidents with Lost Workdays (2007-2013)

221

_1.2 PORTUGAL

_1.2.1 WORK ENVIRONMENT

COMFORT

In addition to a safe environment, Secil seeks to ensure that all its employees have access to the most useful services, especially in plants that are remote from neighbouring towns, particularly for the Outão factory canteen service, dining rooms and food storage and heating equipment, ATM machine and accom-modation in the factory perimeters.

The Secil Staff Centres at Maceira and Pataias offer facilities such as a sports pavilion, areas for socialising, games rooms, function rooms, libraries and swimming pools. Cimentos Madeira Group has a room for socialising on its premises where employees can enjoy leisure time. There is also the new admi-nistrative building at Betomadeira that provides a significant improvement in staff working conditions.

INTERNAL COMMUNICATION

Internal Communication is fundamental for Group staff involvement, whichever company they work for in whatever ge-ographical location. The main vehicles of Secil´s Internal Communication em-ployed are:

> Secil Informação - monthly newslet-ter, distributed with pay slips;

> Cimentar - newsletter distributed in the Cimento Madeira Group in digital format on a quarterly basis. All issues of the newsletter are posted on the Ci-mentos Madeira Group website (www.cimentosmadeira.com);

> Intranet site, where subjects are ex-plored in greater detail.

WELCOMING FOR NEW EMPLOYEES

Secil organizes an Induction Pro-gramme for all new Staff. The Staff in-duction programme consists of general modules and other modules designed in accordance with the functions to be performed by each Staff member. This induction programme also inclu-des the distribution of an Induction Manual and the internal presentation of the employee. The Company uses this programme to provide newcomers with sufficient information on the Group’s Vision, Mission, and Values and also the model of Governance, Financial Performance, Historical Evolution and identification of current national and in-ternational business areas.

In 2013, as in 2012, welcome campaigns primarily targeted trainees whose inte-gration programme was more focused on general modules. Staff who joined Secil in 2013 also undertook a Welcome Programme, designed according to the function that each of them would oc-cupy in the future. STAFF RETENTION AND ABSENTEEISM

The recessionary national economic cli-mate which had major impacts on the construction sector in 2011 and worse-ned in 2012 and 2013, with significant effects on cement production and sales, led Secil (Secil and CMP) to restructure and downsize its staff, resulting in the termination of 80 employment con-tracts in different services. Overall, du-ring 2013, 51 people left the company, with 22 % retirements, 24 % collective redundancies and 54 % voluntary re-dundancy or others. However, it remains Secil’s policy to promote staff retention and low ab-senteeism, through training, internal redeployment and awarding prizes to encourage attendance.

ACCIDENTS BETWEEN THE

PERIOD 2007 TO 2013

FREQUENCY RATE RELATING FOR THE

PERIOD 2007 TO 2013

750

600

450

300

150

0

No. o

f Los

t Wor

kday

s

Seve

rity

Rate

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

4,602

707.04599.18

453.90

403.02 403.00

275.06341.29

4,427

3,4313,206

3,784

2,3452,807

200

7

200

8

200

9

2010

2011

2012

2013

SECIL GROUPACCIDENTS WITH LOST WORKDAYS (SEVERITY)

Graph - II: Severity Trend - Accidents with Lost Workdays (2007-2013)


Museum, from which they proceeded to the Henrique Sommer School Cluster, along a pedestrian route through the Maceira-Liz district, accompanied by the Maceira Philharmonic Band. A film of archive material was also projected with the involvement of some employees and retirees, whose testimonies lead us over time through the successive gene-rations and experiences of over 90 years of history in the factory. The “O Mistério do Coreto” (Mystery of the Bandstand) book, published by Secil, on the so-cial work carried out by the founder of the Maceira-Liz Plant, Henry Sommer, should also be highlighted. The book was written by 1st Cycle pupils of the Maceira School Cluster in collaboration with the writer Ana Cristina Luz.

> Christmas Celebrations through va-rious initiatives, including lunches/din-ners for current and former employees, lunches with distribution of gifts to the children of employees with theatre or circus entertainment.

In Madeira there was a notable Christ-mas celebration, which this year in-volved a group of employees, family members and friends in the presenta-tion of a theatre play called “As Estrelas Sentinelas” (The Sentinel Stars). As in previous years, there was participation in celebrations such as Epiphany and the Midnight Mass.

The merit and the result of these poli-cies can be seen in the indicators (Secil and CMP) for average employee age (45 years) and average length of service in the Company (20 years). Absentee rates, excluding long-term illness, were 1.79 in 2013.

We would like to point out that the mini-mum salary for the cement activity (Secil and CMP) is 1.8 times the national level. EVENTS ORGANIZED BY THE COMPANY

Whether directly or through the Staff So-cial Clubs that it supports and finances, Secil regularly promotes the organisa-tion of various social, cultural or sports events, with the end goal of uniting its employees, giving them a chance to en-joy themselves and encouraging Group culture.

Several events were organized throu-ghout 2013. Some of these events were on a regular basis, others started for the first time. Some of the main events pro-moted directly by Secil were:

> Celebration of the 90th anniversary of the Maceira-Liz Plant with the theme “90 Years’ Cementing History”. This anniversary brought together workers, retirees, customers and institutional partners from the region. Guests were greeted at the Maceira-Liz Cement Plant

The Secil and CMP Staff Social Clubs play a very important role in organising and promoting employee sports and cul-tural activities. In 2013 a number of initiatives took place, including:

> Trip to the Politeama theatre to see the play “Portuguese Review”, with about 84 people involved, including employees, retirees and family members;

> Participation, for the fourth consecutive year, in the organization of the Christmas Party at the Politeama Theatre in Lisbon, with a musical production, open to all Secil Group companies.

> Organization, as part of the Christmas party, of a charitable initiative, “Uma Criança, Um Abraço” (For Every Child A Hug) where lots of children brought a toy to be delivered to needy children in neighbourhoods in the Setúbal area. The initiative included about 60 children;

> Supply, even under the Christmas fes-tivities, of cakes to all employees to wish them happy Christmas holidays.

01.THE SECIL GROUP AND ITS EMPLOYEES

223

_1.2.2 TRAINING

Secil focuses on the training of its em-ployees, as it believes that this is es-sential for the company, to enable it to create the internal skills necessary for the proper performance and flexibility required to respond to a range of de-mands, and for employees themsel-ves, for constant updates to increase their level of knowledge and enhance their value to the company and the employer’s market in general.

In line with this objective, Secil provides Training Centres in the Corporate Tech-nical Centre, for the delivery of courses designed and targeted at Secil’s real--world situation, with emphasis on the continuing education programme. Ad hoc programmes of a specific character are also delivered

2010 2011 2012 2013 TOTAL

Continuing Training Programmes (CTP) 399 449 96 11 955Leadership Training Programme* 530 487 227 0 1.244Process Officer Training Programme** 796 850 488 118 2.252Total 1,725 1,786 811 129 4,451

* This CTP ended in 2012, with no training record in 2013;.

**The figures presented here do not account for all CTP trainees, but the trend of trainees on the courses since 2010.

ONGOING TRAINING PROGRAMMES

ONGOING TRAINING PROGRAMMES

Ongoing Training Programmes are mul-tidisciplinary training to provide Em-ployees with interdisciplinary knowledge on various areas of the Company, with the objective of boosting team perfor-mance, multifunctionality and flexibility and improving safety and productivity. Secil provides three training program-mes, one for each Professional Group: Staff, Managers and Process Officers. The following table shows the trend in the number of trainees participating in each continuing training programme, between 2010 and 2013.


TRAINING DATA

In 2013 the Secil Group’s Training Cen-tres organized 231 training courses at-tended by 1,890 trainees, representing a training volume in the order of 11,412 hours.

In 2013 the focus was once again on the Trainee Programme, with the in-tegration of two recent engineering graduates. This programme repre-sents the company’s commitment to a a policy of renewal of core skills for its business and an undertaking to provide training of excellence for its future employees.

The programme has already been run-ning for four years - 2008, 2009, 2010 and 2013, with a total of 27 graduates integrated. In 2013, as in previous ye-ars, the Trainee Programme was sup-ported by the Institute of Employment and Vocational Training, through the integration of Trainees on the Trainee Placement programme.

01.

No. of No. of Volume training programmes trainees of training (hours)

Continuing 16 129 2.300Ad-hoc 215 1.761 9.112Total 231 1,890 11, 412

CONTINUING AND AD-HOC TRAINING

AD-HOC TRAINING-TRENDIN NUMBER OF TRAINEES

4000

3000

2000

1000

2010

20

11

2012

2013


225

Secil has an Internal Regulation laying down rules for expatriate employees, with a view to the adoption of best market practices.

SPECIFIC TRAINING PROGRAMMES

In addition to the training organized by the Corporate Technical Centre, Secil has been promoting training through protocols established with external companies, tailored training and “case by case” training.

In 2013, the Cimentos Madeira Group delivered 15 training sessions with 48 employees participating, with a total of 550 hours, distributed across the different areas as per following graph.

Training hours in the administrative area were mainly devoted to programmes such as the development of foreign lan-guages (English) and accounting/finance.

3 employees also participated in 2 semi-nars: (i) Labour Law and (ii) Accounting/Finance.

_1.2.3 CAREER AND MOBILITY

Secil carries out its business in different geographical locations, both nationally and internationally. In 2013, Secil star-ted operations in Mozambique, which will offer a greater number of career de-velopment opportunities and increased mobility to its employees.

In 2013 Secil and CMP (i) recruited 5 members of staff, 2 of which to the Trai-nee Programme; (ii) carried out 53 ma-nagement and staff and non-staff pro-motions/progressions; (iii) carried out 25 work placements for graduates/masters in collaboration with various national uni-versities.

Additionally, Secil collaborated with the Ministry of Foreign Affairs, through the integration of an Attaché at its premi-ses. For three weeks, the Embassy At-taché moved through different depart-ments getting to know the situation of a Portuguese internationalized industrial company. This was an unprecedented initiative for Secil and for the Ministry of Foreign Affairs.

During 2013, 3 new expatriations star-ted and 4 ended. The year ended with a group of 14 employees providing servi-ces outside the country, as shown in the graph below.

VOLUME OF TRAINING

NO. OF EXPATRIATES

4

3

2

1

0

3

BR

AZI

L

MO

ZAM

BIQ

UE

1 1

CA

PE

VE

RD

E

3

AN

GO

LA

4

TU

NIS

IA

2L

EB

AN

ON

6%

94%

6%

94%

MASCULINO FEMININO

Administra�va74%

Comercial3%

Qualidade6%

Tec./Prod.15%

Segurança2%

Volume de Formação (horas)

3%2%

6%

15%

74%

34%

66%

Plano de pensões BD 25,5 mio

Plano de pensões CD 13,1 mio

24%16%

60%

Sub-fundo conservador

Sub-fundo dinâmicoSub-fundo ultraconservador

24%16%

60%



16%

60%



23% 26%

51%

Desportivas

Associações

Culturais

Inclusão Social

32%

68%92%

8%

ADMINISTRATIVE

QUALITY

COMMERCIAL TECH. / PROD.

SAFETY


01.

_1.2.4 PERFORMANCE MANAGEMENT AND INCENTIVES

All Secil business areas, nationwide, have implemented a Performance Evaluation System. The aim is to re-cognize, reward and distinguish good performance in Economic/Financial, Operational, Quality/ Safety/Environ-ment, among other areas. In addition, this system aims to identify training needs and potential employee promo-tions/career progressions.

Due to the specific nature of each of Secil’s business areas, these evaluation systems integrate specific methodolo-gies adapted to each situation, with different stages of development which may cover some or all employees, as is the case of Secil and CMP.

Individual performance awards are at-tributed in function of the results ob-tained by the Company/Group and the result of the Performance Evaluation of each employee.

_1.2.5 SOCIAL BENEFITS

Secil believes that employee satisfac-tion contributes in large measure to the success of its business. Accordingly, it awards a set of benefits to its em-ployees and their families including the Pension Plan and Health Plan

PENSIONS

In the Secil Group Cement Sector (Secil, CMP and Cimentos Madeira), employees benefit from complemen-tary pensions for old age and disability and their spouses, descendants and dependents similarly benefit from sur-vivors’ pensions.

In the Concrete and Aggregates sector (Unibetão, Eurobetão, Britobetão, Be-toMadeira and Secil Britas), employees benefit from complementary pensions for old age and disability.

Currently, all of these Companies offer a pension supplement benefit in the form of a defined contribution pension plan.

At the end of 2013, Defined Bene-fit pension plans (DBP) and Defined Contribution pension plans (DCP) had the following distribution among parti-cipants and beneficiaries.

CEMENT SECTOR

CONCRETE SECTOR

6%

94%

6%

94%

MASCULINO FEMININO

Administra�va74%

Comercial3%

Qualidade6%

Tec./Prod.15%

Segurança2%


3%2%

6%

15%

74%

34%

66%



24%16%

60%



24%16%

60%



16%

60%



23% 26%

51%

Desportivas

Associações

Culturais

Inclusão Social

32%

68%92%

8%

6%

94%

6%

94%

MASCULINO FEMININO

Administra�va74%

Comercial3%

Qualidade6%

Tec./Prod.15%

Segurança2%


3%2%

6%

15%

74%

34%

66%



24%16%

60%



24%16%

60%



16%

60%



23% 26%

51%

Desportivas

Associações

Culturais

Inclusão Social

32%

68%92%

8%

DBP

DBP

DCP

DCP


227

Pension plans are funded by a single Pension Fund: the Secil Group Pension Fund. The Companies are responsible for (i) making monthly contributions to the sub-funds (Dynamic, Conservative and Ultra-conservative) that finance the Defined Contribution Pension Plans and (ii) maintaining sufficient funding for the responsibilities undertaken with the Defined Benefits Pensions Plans.

Below we show the distribution of the value of the Defined Benefit and Defi-ned Contribution Funds at 31/12/2013, and the distribution between the in-vestment policies of the Defined Con-tribution Plan.

In 2013, the level of funding of the Se-cil Defined Benefit Pension Plans was 130 %, CMP was 116 % and Unibetão was 162 %.

SECIL GROUP PENSION FUND VALUE AT 31 DEC 2013

No. P

artic

ipan

ts /

Bene

ficia

ries

300

200

100

0

17

7

293

DC

P

DC

P

DC

P

CONCRETE SECTOR

CEMENT SECTOR

No. P

artic

ipan

ts /

Bene

ficia

ries

800

600

400

200

0

688

87

363

DB

P

DB

P

DC

P

RETIRED / PENSIONERS ACTIVE EMPLOYEES

6%

94%

6%

94%

MASCULINO FEMININO

Administra�va74%

Comercial3%

Qualidade6%

Tec./Prod.15%

Segurança2%


3%2%

6%

15%

74%

34%

66%



24%16%

60%



24%16%

60%



16%

60%



23% 26%

51%

Desportivas

Associações

Culturais

Inclusão Social

32%

68%92%

8%

6%

94%

6%

94%

MASCULINO FEMININO

Administra�va74%

Comercial3%

Qualidade6%

Tec./Prod.15%

Segurança2%


3%2%

6%

15%

74%

34%

66%



24%16%

60%



24%16%

60%



16%

60%



23% 26%

51%

Desportivas

Associações

Culturais

Inclusão Social

32%

68%92%

8%

DEF. CONTR.PENSION PLAN 13.1 MILLION

CONSERVATIVE SUB-FUND

PENSION PLAN VD 25.5 MILLION

DYNAMIC SUB-FUND

ULTRACONSERVATIVE SUB -FUND

DEF. CONT. PENSION PLAN INVESTMENT PROFILE

RETIRED / PENSIONERS ACTIVE EMPLOYEES


HEALTH Secil and CMP provide a Health Plan for retired employees that extend to their respective households. This Plan is harmonized between the two cement companies.

Cimentos Madeira offers its employees an active Health Plan, which was har-monized in 2011, in line with the other group companies.

The companies in the Concrete sector, Secil Britas, Argibetão, Secil Martin-gança and IRP provide a Health Plan identical to that of Secil for their em-ployees. In the case of the Concrete sector companies, Secil Britas and

Argibetão, the Health Plan covers the household with a small contribution by the employee. At Secil Martingança, the Health Plan may be extended to the household, in which case the additional cost is borne by the employee.

The health benefits for all of the above--mentioned companies are funded by a health insurance policy in a reimbur-sed, agreed network system.

In order to better adapt the Health Plan to the requirements of each per-son, Secil negotiated UpGrades to the health insurance, which meant that by making an extra payment themselves, employees or retired employees could increase the annual capital of their He-alth Plan and/or that of their household.

OTHER SOCIAL BENEFITS

Besides the above-mentioned bene-fits, several Group companies also award other social benefits, including: (i) retirement and death benefits, when the employee retires or dies in active service; (ii) personal accident and/or life insurance protecting employees in the event of death and/or perma-nent disability; (iii) travel insurance, covering almost the whole world, for the protection of employees travelling on company business; and (iv) service awards, which reward years of service of employees. In 2013, the social benefits offered by Secil to its employees amounted to consolidated liabilities of approxima-tely 3 million Euros, a cost of around 1 million Euros, or 2% of personnel costs.


229

_1.3. INTERNATIONAL OPERATIONS

_1.3.1 WORK ENVIRONMENT TUNISIA

In Tunísia, although there were some improvements in safety, 2013 was ma-rked by a prolonged period of transition caused by constant delay in scheduling the new elections. This resulted in so-cial and political conflicts marked by assassinations of political leaders and the year ended in negotiations to form a transitional government of techno-crats in order to overcome the exis-ting political deadlock. In the context of social unrest, a number of security measures were taken to protect inter-nal staff and service providers.

Société des Ciments de Gabès (SCG) has a canteen service, library and three housing units that it makes available to its employees with favourable condi-tions for accommodation.

SCG is notable for the Internet access enjoyed by technical staff and the dis-tribution of the Group’s monthly news-letter (Secil Informação). Furthermore, visits to the Secil Portugal plants are a current practice adopted by the area managers, so as to allow for the spre-ading of Group culture and knowledge exchange.

Policies to combat absenteeism, through employee training and evalu-ation penalties, with an impact on per-formance and productivity bonuses. Nonetheless we must emphasize that there was an increase in the absen-teeism rate from 4.01 % in 2012 to 4.47 % in 2013.

Among the social measures promoted by SCG to encourage a good work en-vironment, there was the end of year

meal organised by the Company and free transportation it offers all em-ployees.

LEBANON

In Ciment Sibline, safety procedures and policies follow the Group stan-dards. Safety awareness was included in the new employee induction pro-gramme.

The Company provides transportation to all employees.

Communication is managed primarily through panels and by sending emails to employees.

CAPE VERDE

The Group’s companies based in Cape Verde promote safety in the workplace through information campaigns and by assigning a monetary prize for the achievement of targets set in the area of safety.

The companies guarantee their em-ployees a canteen service and trans-portation.

Attendance is encouraged by awarding monetary prizes to employees who achieve the set target.

ANGOLA

In Secil Lobito various measures have been implemented to improve working conditions, including the following: (i) the construction of changing rooms and bathrooms in the Packaging Sec-tor; (ii) improvement of the changing rooms in the Auto Workshop section; (iii) the purchase of new worker trans-port buses by the service provider company.In order to combat absenteeism, Secil

Lobito pays its employees a quarterly cash incentive, calculated based on attendance.

_1.3.2 TRAINING

TUNISIA

The main objective sought by SCG in the training programmes is to boost professional skills and versatility in its employees. Thus, in 2013 2,830 hours’ training were delivered, representing 10.2 hours/worker.

LEBANON

Ciment de Sibline offers training to its employees in technical areas, adminis-tration and management, maintenance, information technology and languages. In 2013, 284 employees attended a total of 5,374 hours’ training.

ANGOLA

Secil Lobito recorded 400 hours’ trai-ning, distributed over the departments of health and safety, IT and quality lab.


_1.3.3 PROFESSIONAL DEVELOPMENT AND MOBILITY

TUNISIA

SCG seeks to promote internal recruit-ment whenever possible, with comple-mentary training programmes. Skills development and mobility are encoura-ged by the productivity and profitability assessment system.

In this company, the ratio between the lo-west wage and the local minimum wage is 1.75, which shows SCG’s concern to pay its employees above the market rate.

ANGOLA

Secil Lobito introduced scaled wage updates, with the aim of reducing the wage gap. In 2013, it recruited a higher manager to the post of Commercial Di-rector.

_1.3.4 SOCIAL BENEFITS

TUNISIA

The Social Benefits SCG has given to its employees include subsidies (reli-gious and retirement), a health plan, personal accident travel insurance, and credit facilities, inter alia. Also in relation to the children of employees, the best students in each school year are selected and receive support in the form of school equipment. SCG pro-vides first children, age 14 and under, with the opportunity to attend a sum-mer camp.

Sud-Béton also offers its employees various Social Benefits: religious sub-sidies (Aid Kébir and Aid Sghir), retire-ment subsidies, a health plan (group insurance that covers the employees), 20% discount on concrete purchase and support with schooling.


231

LEBANON

Ciment de Sibline provides its em-ployees with benefits in the areas of health and education, inter alia. All em-ployees and their families benefit from health insurance covering all the me-dical expenses: in 2013 1,562 people were covered. Additionally, there is me-dical assistance provided by two doc-tors and a nurse on Company premises.

In terms of education, every year study grants are awarded to Ciment de Si-bline employees’ children.

he benefit amount is set according to educational level and in 2013 the scho-larships paid totalled 650,193.500 Le-banese Pounds, as shown in the follo-wing table:

The Company has a not for profit Co-operative association that is managed by the workers themselves, selling foo-dstuffs. Employees have access to the cooperative and they receive an an-nual contribution of 900,000 Lebanese pounds for expenses

Employees in the Lebanon also benefit from financial facilities, both in purcha-sing cement and in obtaining financing:

> Acquisition of cement up to 40t/year with discount of 3 USD on the selling price;

> Financing of up to 3,000,000 Leba-nese pounds, without interest and re-payable over 12 months.

At Ciments de Sibline, the minimum salary is 1.04 times the local minimum salary rate.

ANGOLA

The Secil Lobito Employees and their households benefit from health care provided by two doctors and three nur-ses at the company’s facilities. One of the doctors specializes in paediatrics.

This initiative has been running for three years and has brought dramatic reductions in child mortality among the children of the employees. The Com-pany has set up medical assistance protocols with two clinics in the city of Lobito, so that all employees and their respective households can benefit from health care at zero cost. Medications are also paid for by the Company.

Sector Level Valor

Private Sector University 152,272.500 Primary 164,593.750 Technical 16,800.000 Other levels 246,446.250Public Sector University 28,887.250 Primary 5,912.500 Technical 14,000.000 Other levels 21,281.250 650,193.500

SCHOOL SCHOLARSHIPS 2013 (LEBANESE POUNDS),


_2.1 PORTUGAL

_2.1.1 EDUCATION, SCIENCE AND TECHNOLOGY

SECIL ARCHITECTURE AND CIVIL ENGINE-ERING AWARDS AND SECIL UNIVERSITIES AWARD

The Secil Award (Prémio Secil) pro-motes and encourages the authors of works using products resulting from Secil’s business activity.

In 2013, the Secil Architecture Award was given to the Rehabilitation and Ex-pansion of the Francisco Arruda Pri-mary School, Lisbon, designed by the architect José Neves. This work was awarded by a jury judging 21 works of exemplary quality architecture.

The “Secil Award - 20 years” is granted within the scope of the “Architecture and Civil Engineering Competition” and aims to encourage the quality of aca-demic work and give public recognition

to young people who have studied in Portuguese Schools of Architecture and Civil Engineering. Secil has been awarding prizes to university students for over 10 years. This year the Juries recognized 5 Architecture and 3 Civil Engineering Projects by students from the Universities of Porto, Coimbra and Lisbon.

The “Secil Award - 20 years” Exhibition pays homage to the authors and works recognized over 20 years with the Se-cil Architecture and Civil Engineering Award (1992-2012). The Secil Award has recognized the works of renowned Portuguese Architects and Civil Engi-neers such as Álvaro Siza Vieira, Edu-ardo Souto de Moura, José Luís Carri-lho Graça, Armando Rito, Rui Furtado and Segadães Tavares among others.The Exhibition toured several cities

throughout 2013, in places such as uni-versities or reference works recognized with the Secil Prize.

SECIL AND THE SCIENTIFIC COMMUNITY

Secil actively seeks to support the scientific community by promoting events and sponsoring initiatives that contribute towards spreading know-ledge and innovation.

Secil sponsored the Lisbon Archi-tecture Triennale, which ran from 12 September to 15 December 2013. The Palácio Sinel in Cordes, the Triennial’s base, hosted the “Secil Award – 20 years” exhibition. For 3 months exhi-bitions, events, debates, publications, interfaces, conversations, civic actions all took place and were produced, to analyse the condition in which architec-ture is performed and how it is contex-tualized, expressed and understood.

Support for the publication of the book “Estruturas de Betão” (Concrete Structures) by Julio Appleton, which is intended for engineering students and engineers focusing on consulting and design, management, supervision and execution of works with concrete structures.

The Cimentos Madeira Group was re-cognized in the “Top 100 Companies of Madeira” competition in the trade and industry sector.

PROTOCOLS WITH TEACHING INSTITUTIONS

To support the Group’s Recruitment, Research and Development activity, Secil is forming a closer relationship with specialized higher education insti-tutions in the areas of Civil Engineering, Chemistry and Materials, establishing the bases for academic, science and technology collaboration.

THE SECIL GROUP AND THECOMMUNITY

02.

233

In 2013 a Business Doctorate grant was renewed through the Founda-tion for Science and Technology, for the development of a research pro-ject involving, in addition to Secil, The Graduate Technical Institute of Lisbon and the Faculty of Engineering of the University of Coimbra. In this connec-tion, a new grant was approved for the development of a new project in the area of Geotechnical Research, in collaboration with the Graduate Tech-nical Institute.

The Cimentos Madeira Laboratory continues to collaborate with the University of Madeira, Regional La-boratory of Civil Engineering and Vo-cational Institute of Transport and Lo-

gistics. In 2013, it supported several initiatives, including:

> guidance for a master’s thesis rela-ted to self-compacting concrete - from theory to marketing;

> support and co-supervision of a PhD related to the use of self-compacting concrete in exposed structures and marine environments;

> development of concretes reinforced with glass fibres and evaluation of their full-scale behaviour;

> guidance for a traineeship in labo-ratory techniques related to transport and logistics.


_2.1.2 CULTURE AND SPORT

Secil has committed itself to the sus-tainable development of cultural, sporting and social inclusion activities, following on from the Group’s social responsibility policy. More than 80 as-sociations in Setúbal district receive funds to support their activities, as shown in the graph.

2 new associations are worthy of note: Day Centre - Social Solidarity Associa-tion of the Parish of Gambia and Adap-ted Sports YMCA.

In Cultural terms, Secil was present for the first time at the Santiago Fair in Setúbal, which took place from 20 July to 4 August. The Secil stand received 1,300 visits and took as its theme: “The Light of Arrábida”, on the UNESCO World Heritage Site application.

It also supported other initiatives such as:

> Support for the documentary “Ar-rábida- Da Serra ao Mar” (Arrábi-da- From the Mountains to the Sea). This is a documentary about animals, plants and the wonderful sites of the Arrábida Natural Park. It is the work of nature photographers Luís Quinta and Ricardo Guerreiro;

> Lisbon Week – Secil sponsored Lis-bon Week by providing black architec-tural concrete for the construction of the Lisbon Week Lounge in Largo de São Domingos, Lisbon;

> Setúbal Music Festival;

> Leiria Music Festival;

> Feast day of Nossa Srª do Rosário de Tróia.

Since 2006, Secil has been carrying out environmental awareness cam-paigns, in particular the initiative pro-moted by Évora Boat, with the parti-cipation of students from schools in Setúbal who have the opportunity to take a walk along a route through the Secil-Outão property.

02.

6%

94%

6%

94%

MASCULINO FEMININO

Administra�va74%

Comercial3%

Qualidade6%

Tec./Prod.15%

Segurança2%


3%2%

6%

15%

74%

34%

66%



24%16%

60%



24%16%

60%



16%

60%



23% 26%

51%

Desportivas

Associações

Culturais

Inclusão Social

32%

68%92%

8%

SPORTS CULTURAL SOCIAL INCLUSION

ASSOCIATIONS

THE SECIL GROUP AND THECOMMUNITY

235

Secil has a Museum on the premises of the Maceira-Liz Plant, which ope-ned on 22 April 1991. The Museum documents the long history of the fac-tory and, through a museum circuit that contrasts with the modern plant in operation, has obtained the status of “site museum”. In 2013, the Museum received about 1,072 visitors, as sho-wn in the following table:

In terms of Sport, Secil supported vari-ous groups and initiatives, including the Setúbal Half Marathon.

Cimentos Madeira Group supports the cultural and sporting activities of its region, maintaining its status as shareholder in the Classical Orchestra of Madeira, supporting the restoration work on the Vitória chapel, sponsoring the Bread Fair and the celebration of the 500th anniversary of the Funchal Diocese - Festa das Famílias. Of note was the support provided through distribution of bags of cement for the renovation of the nautical post of the Funchal São Lázaro Naval Club, sup-port for the “Pedestrian Trial around the city of Funchal”, organized by Ma-deira Athletics Association and its on-going status as a partner sponsor of the Portosantense Sports Club.

Cimentos Madeira Group continues to be a partner in regional Associations that put on events of an environmen-tal nature, such as the Association of Friends of the Funchal Ecologi-cal Park and AREAM – the Regional Agency for Energy and Environment of Madeira.

_2.1.3 SOCIAL SOLIDARITY

Through its influence in the areas where it operates, Secil, makes a sig-nificant contribution towards support-ing the various Social Inclusion bodies.

In 2013, Secil supported various in-stitutions through the provision of ce-ment: (i) Minho University; (ii) the Na-tional Laboratory of Civil Engineering; (iii) the Setúbal National Scouts Corps. In the bathing season, the Secil-Outão

Plant provided a secure car park in the old coal shed. This served a pop-ulation of about 35,969 people and 14,359 vehicles.

Secil agreed a protocol with the Parish Council of Maceira, with noteworthy do-nations to (i) the Maceirinha Association for the construction of the new synthetic playing field; (ii) the Maceira Volunteer Fire-fighters for the purchase of an ur-ban and industrial fire-fighting vehicle.

For the second year running, Secil has cut back significantly on its Christ-mas gifts, using the funds normally set aside for buying them to support organisations for Social Solidarity. In 2013, Secil supported the Cimentar Afectos project of the Coração Amare-lo Association (a caring institution that provides assistance to the elderly).

No visitors

1st cycle 2862nd cycle - secondary (Year 6 to Year 12) 400Higher Education 64Various Entities 322 1,072


Since 2010 Secil has supported the GRACE Association - Corporate Citi-zenship Discussion and Support Group - that seeks to develop collaborative actions between local communities and charities.

The Cimentos Madeira Group partici-pated in the campaign: “Dê uma tampa pela indiferença” (Put a lid on indiffe-rence) An informal agreement was set up between Cimentos Madeira and the Regional Delegation of the Portuguese Association for the Disabled (APD) for the use of a specific container for the collection of plastic lids. This campaign also involves the identification of per-sons with special needs. The aim is to associate the action with concrete and known situations of all those taking part. It also supports the Madeira Vo-lunteer Fire Service and the Portuguese League Against Cancer.

_2.2 INTERNATIONAL OPERATIONS

_2.2.1 EDUCATION, SCIENCE AND TECHNOLOGY

TUNISIA

Société des Ciments de Gabès has developed some initiatives in collabo-ration with schools and universities,such as:

> 25 winter internships in collaboration with ISET – Junior College of Techno-logical Studies; > 10 spring internships in collaboration with ENIG - National School of Engi-neers of Gabès; > 39 summer internships and 71 gra-duation internships In collaboration with graduation schools in Engineering.

LEBANON

Ciment de Sibline accepts visit re-quests from Schools and Universities. In 2013 has received students from the following establishments:

> American University Beirut (AUB) > Lebanese University (Faculty of Scien-ces and the Technological Institute IUT) > Islamic University > Beirut Arab University (BAU) > Rafic Hariri University (RHU) The Company promotes training courses, up to 3 months for recent graduates. In 2013, 19 people atten-ded this course.

02.THE SECIL GROUP AND THECOMMUNITY

237

ANGOLA

Secil Lobito has protocols with se-condary schools that open up its pre-mises for professional internships in the various company areas. During 2013 the Company hosted 21 trai-nees. _2.2.2 CULTURE AND SPORT

TUNISIA

The SCG sponsors several local sporting and cultural associations, either directly or indirectly, through the fund made avai-lable to the Governor of Gabes.

LEBANON

Ciment de Sibline made several spon-sorship to cultural associations and sports, including: > Kfarmatta Municipality

> Ounoub Ain Municipality

> Aytat Municipality

> Naameh Municipality

> Baewarte Municipality

ANGOLA

Secil Lobito sponsored some cultural and sporting initiatives, namely (i) the UNAC National Union of Angolan Ar-tists and Composers, which receives direct financial support; (ii) the Carni-val Party which has a strong tradition in the city of Lobito; (iii) Radio Lobito, also with direct financial sponsorship; (iv) the commemorative celebrations of the 100th anniversary of the City of Lobito. Recently, a group of workers

created the Secil Lobito Sports Group which has already organized a range of activities.

_2.2.3 SOCIAL SOLIDARITY

TUNISIA

In the special circumstances experien-ced in 2013, the Tunisian companies of the Secil Group contributed, through the Governor, to a fund for the deve-lopment of individual small busines-ses and for social support, especially for a village near to the cement Plant, in order to find solutions for the high unemployment that is currently afflic-ting Tunisia.

LEBANON

Ciment de Sibline supports the local community through various initiatives, with priority for social support, dona-tions to municipalities and sponsorship of religious institutions, such as: > Machmouchie Monastery

> Unite Lebanon Youth Project

> Druz foundation for social welfare

> Baakline library’s friends comity

> Lebanese institution for the blind

ANGOLA

Secil Lobito supports various Local Authority institutions, Schools, Reli-gious Organisations and Hospitals to hightlight:The Construction of the Church of Dis-trict Golf and (ii) improvementscarried out in the Primary School of

Education No. BG/2044 Commander GIKA inLobito.

CAPE VERDE

In Cape Verde, relationships and so-cial inclusion are promoted with local communities by supporting important activities in the fields of education, cul-ture and religion. This support may be provided through cash donations, ma-terials or even provision of resources. IIn 2013, were supported by various institutions, such as (i) the Kindergar-ten João Varela, (ii) the Parish of the Santíssimo Nome de Jesus (iii) the As-sociation “The Varelenses. “

238 GROUP DIAGRAM | DIRECTORS’ REPORT 2013

240 GROUP DIAGRAM | DIRECTORS’ REPORT 2013

SECIL

PORTUGAL INTERNATIONAL

MAINLAND MADEIRA TUNISIA LEBANON ANGOLA CAPE VERDE BRAZIL OTHER

CEMENT Secil Cimentos Madeira Société Ciments Ciment de Sibline Secil Lobito Secil Cabo Verde Grupo Supremo Secil Algérie CMP (100%) (57,14%) de Gabès (98,72%) (51,05%) (51%) (100%) (15%) (Argélia) (97,9%)

READY-MIXED AND AGGREGATES Uniconcreto (100%) Betomadeira (57,14%) Secil Betões e Inertes (100%) Brimade (57,14%) Sudbéton (98,72%) SOIME (51,05%) Inertes de Cabo Unibetão (100%) Pedra Regional (29,14%) Verde (62,50%) Britobetão (91%) Madebritas (29,14%) Eurobetão (100%) JMHenriques (28,57%) Secil Britas (100%) Lusoinertes (100%) MORTARS AND BINDERS Secil Martingança (100%) IRP (75%)

PRE-CAST CONCRETE Secil Unicon (50%) Promadeira (57,14%) Zarzis Béton (98,52%) Secil Prebetão (39,80%) Argibetão (90,87%)

ENVIRONMENT AND ENERGY Prescor (100%) AVE (35%) Solenreco (98%) Reficomb (100%) ALLMA (70%)

TRANSPORT AND SERVICES Grupo Setefrete (25%) Silonor CCV (100%) (França) (100%) Secilpar (100%) Somera (Panamá) (100%)

FINANCIAL SOCIETIES AND OTHERS Ciminpart (100%) Hewbol (100%) MC (49,36%) Secil Angola (100%) NSOSPE (45,98%) Sociedade Serife (100%) Florimar (100%) I3P (99,97%) de Inertes (Moçambique) (49%) Seciment (Holanda) (100%)

SECIL

241

SECIL

PORTUGAL INTERNATIONAL

MAINLAND MADEIRA TUNISIA LEBANON ANGOLA CAPE VERDE BRAZIL OTHER

CEMENT Secil Cimentos Madeira Société Ciments Ciment de Sibline Secil Lobito Secil Cabo Verde Grupo Supremo Secil Algérie CMP (100%) (57,14%) de Gabès (98,72%) (51,05%) (51%) (100%) (15%) (Argélia) (97,9%)

READY-MIXED AND AGGREGATES Uniconcreto (100%) Betomadeira (57,14%) Secil Betões e Inertes (100%) Brimade (57,14%) Sudbéton (98,72%) SOIME (51,05%) Inertes de Cabo Unibetão (100%) Pedra Regional (29,14%) Verde (62,50%) Britobetão (91%) Madebritas (29,14%) Eurobetão (100%) JMHenriques (28,57%) Secil Britas (100%) Lusoinertes (100%) MORTARS AND BINDERS Secil Martingança (100%) IRP (75%)

PRE-CAST CONCRETE Secil Unicon (50%) Promadeira (57,14%) Zarzis Béton (98,52%) Secil Prebetão (39,80%) Argibetão (90,87%)

ENVIRONMENT AND ENERGY Prescor (100%) AVE (35%) Solenreco (98%) Reficomb (100%) ALLMA (70%)

TRANSPORT AND SERVICES Grupo Setefrete (25%) Silonor CCV (100%) (França) (100%) Secilpar (100%) Somera (Panamá) (100%)

FINANCIAL SOCIETIES AND OTHERS Ciminpart (100%) Hewbol (100%) MC (49,36%) Secil Angola (100%) NSOSPE (45,98%) Sociedade Serife (100%) Florimar (100%) I3P (99,97%) de Inertes (Moçambique) (49%) Seciment (Holanda) (100%)

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