Cover: Douro Litoral Motorway

ANNUAL REPORT 2010

Cover: Douro Litoral Motorway

Annual Report 2010

Table of Contents COMPANY IDENTIFICATION GOVERNING BODIES ORGANOGRAM - 2010 TEIXEIRA DUARTE GROUP - 2010 SUMMARY OF INDICATORS MANAGEMENT REPORT OF THE BOARD OF DIRECTORS I. INTRODUCTION II. ECONOMIC ENVIRONMENT III. GENERAL OVERVIEW IV. SECTOR ANALYSIS IV.1. CONSTRUCTION IV.2. CEMENT, CONCRETE AND AGGREGATES IV.3. CONCESSIONS AND SERVICES IV.4. REAL ESTATE IV.5. HOTEL SERVICES IV.6. DISTRIBUTION IV.7. ENERGY IV.8. AUTOMOBILE V. HOLDINGS IN LISTED COMPANIES VI. EVENTS AFTER THE END OF THE REPORTING PERIOD VII. OUTLOOK FOR THE FINANTIAL YEAR 2011 VIII. DISTRIBUTION TO MEMBERS OF THE BOARD OF DIRECTORS IX. PROPOSAL FOR THE APPROPRIATION OF PROFIT NOTES TO THE MANAGEMENT REPORT OF THE BOARD OF DIRECTORS CORPORATE GOVERNANCE REPORT - 2010 FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS REPORTS, OPINIONS AND CERTIFICATIONS OF THE AUDIT BODIES 4 5 6 8 10 11 12 13 13 22 23 31 33 39 44 47 49 52 54 55 55 55 56 57 59 129 143 205 3

Teixeira Duarte, S.A. Head Office: Lagoas Park, Edifício 2-2740-265 Porto Salvo Share Capital: 420,000,000 Single Legal Person and Registration number 509.234.526 at the Commercial Registry of Cascais (Oeiras) 4

Governing Bodies Board of the General Meeting of Shareholders Chairman Deputy Chairman Secretary Mr. Rogério Paulo Castanho Alves Mr. José Gonçalo Pereira de Sousa Guerra Constenla Mr. José Pedro Poiares Cobra Ferreira Board of Directors Chairman Directors Mr. Pedro Maria Calainho Teixeira Duarte Mr. Manuel Maria Calainho de Azevedo Teixeira Duarte Mr. Joel Vaz Viana de Lemos Mr. Jorge Ricardo de Figueiredo Catarino Mr. Carlos Gomes Baptista Mr. João José de Gouveia Capelão Mr. João José do Carmo Delgado Supervisory Board Chairman Member Member Alternate Mr. António Gonçalves Monteiro Mr. Mateus Moreira Mr. Miguel Carmo Pereira Coutinho Mr. Horácio Lisboa Afonso Chartered ACCOUNTANT Mariquito, Correia & Associados Chartered Accountants Company, represented by Mr. António Franciso Escarameia Mariquito - ROC COMPANY Secretary Permanent Alternate Mr. José Pedro Poiares Cobra Ferreira Mrs. Maria António Monteiro Ambrósio Representative for Market Relations Mr. José Pedro Poiares Cobra Ferreira 5

TEIXEIRA DUARTE ORGANOGRAM 2010 BOARD OF DIRECTORS Adviser to the Board of Directors António Costeira Faustino Markets Corporate Centre Activity Sector Portugal Spain Construction Cement, Concrete and Aggregates Angola Delegation Mr. Valdemar Marques Mr. Luís Santos Mr. Pedro Costa Algeria Delegation Mr. Pedro Plácido Mr. Ricardo Acabado Mr. Guedes Duarte Brazil Mr. João Delgado Mr. Moreira da Silva Mr. Fernando Martins Mr. Alfredo Silva Cape Verde China Delegation Mr. António Carlos Teixeira Duarte Morocco Mozambique Delegation Mr. Carlos Timóteo Namibia Russia Sao Tome and Principe Tunisia Ukraine Venezuela Mr. Moreira da Silva Mr. Luís Alves Central Departments Contracts and Logistics Mrs. Maria António Ambrósio Safety, Quality and Environment Mr. Agripino Fonseca Human Resources and Administrative Services Mr. Ginja Sebastião Information technology services Mr. José Gaspar Finance and Accounts Mr. Martins Rovisco Procurement Mr. Leal da Silva Mr. Freitas Costa Corporate Services Corporate Secretariat Consolidation of Accounts Internal Audit Central Departments Planning and Studies Mr. Garcia Fernandes Mr. Luís Menezes Electromechanical Installations Mr. Helena Galhardas Special Studies Mr. Rocha Lobo Infrastructure Studies Mr. João Torrado Projects Mr. Baldomiro Xavier Equipment Mr. Rodrigo Ouro Operating Centres Geotechnology and Rehabilitation Mr. Magalhães Gonçalves Mr. Ivo Rosa Mr. Helder Matos Buildings Mr. Paulo Araújo Mr. Luís Mendonça Infrastructures Mr. Sampayo Ramos Mr. Sousa Barros Mr. José Palma Mr. Oliveira Rocha Mr. Joaquim Tavares Mr. Rosa Saraiva Mr. Fernando Frias Mechanical Engineering Mr. Paiva Nunes Mr. Henrique Nicolau Operating Centre for Shuttering and Prestressing Mr. Marques dos Santos Participated Companies E.P.O.S., S.A. Mr. Costa Simões Mr. Dias de Carvalho SOMAFEL, S.A. OFM, S.A. Mr. Viana de Lemos Mr. Paiva Nunes Mrs. Isabel Amador Concessions and Services GSC, S.A. Mr. Magalhães Gonçalves RECOLTE, S.A. Mr. Magalhães Gonçalves Mr. Luís Carreira SATU-OEIRAS, E.M., S.A. Mrs. Helena Galhardas TDGI, S.A. Mr. Rogério Fonseca TDHOSP, S.A. Mr. Matos Viegas Real Estate Mr. Manuel Maria Teixeira Duarte Mr. Diogo Rebelo Hotel Services Mr. Manuel Maria Teixeira Duarte Mr. Luís Vicente Distribution Mr. Diogo Rebelo Mr. Manuel Lopes Energy Mr. Artur Caracol Automobile Mr. Diogo Rebelo Mr. Silva Pereira 6 7

Summary of Indicators Teixeira Duarte, S.A. Notes: The book values are expressed in million Euros. The figures in the "Change 2010/2009 %" column were calculated based on amounts that were not rounded off. Total Equity includes non-controlling interests. (*) Restated Values 2006 2007 2008 2009 (*) 2010 Change 2010/2009 % Employees 7,774 10,717 13,157 13,530 13,036 (3.7%) Sales/Services Rendered 756 1,012 1,291 1,320 1,380 4.5% Operating Income 833 1,067 1,377 1,423 1,445 1.5% EBITDA 118 113 188 213 150 (29.3%) EBITDA / Turnover Margin 16% 11% 15% 16% 11% (32.3%) EBIT 87 70 131 157 84 (46.4%) Tangible Fixed Assets + Investment Property 724 781 925 983 1,042 6.1% Investments in Associates + Assets Available for Sale + Other Investments 1,225 1,551 1,168 1,276 317 (75.2%) Total Equity 783 834 339 515 562 9.2% Net Income 114 122 (347) 116 46 (60.1%) 10

Management Report of the Board of Directors 2010

Management Report of the Board of Directors 2010 I. INTRODUCTION The Board of Directors of Teixeira Duarte, S.A. (TD,SA), in compliance with the regulatory and legal framework for publicly traded companies, has the pleasure to present its management report for the financial year 2010. During 2010, TD,SA became the leading listed company of the TEIXEIRA DUARTE Group, and before the closing of the financial year had acquired the ownership of 100% of the share capital of Teixeira Duarte Engenharia e Construções, S.A. (TD-EC), which, in turn, thereafter no longer trades its shares on regulated markets. In this context, the present report will address the consolidated activity of TD,SA as leader of the Business Group comprising the universe of holdings identified in the "Table of the Teixeira Duarte Group - 2010" presented on the preliminary pages, and will disclose only brief notes on the Company in its individual capacity, namely with respect to the proposal for the appropriation of profit. Since each of these units has its own management bodies, which report on their individual activities, this document will provide only some observations for the purpose of allowing for a better perspective of the Group as a whole. In this context and in order to assess the development of the activity of these companies more appropriately, note will also be made, where justified, of some of their individual economic and financial indicators. The most appropriate way of presenting the topics object of the present Report will be to start with a brief description of the economic background, followed by an overall assessment of the action of the Teixeira Duarte Group, focusing on the most significant aspects of the Corporate Centre and in a consolidated perspective. The subsequent chapters will address the Group's different activity sectors, with an analysis of the respective performance over 2010, distinguishing for each the main markets of action, in particular the Construction area which is the core business of the Group. Reference will also be made to the strategic stakes held in listed companies during 2010, that is CIMPOR Cimentos de Portugal SGPS, S.A., Banco Comercial Português, S.A. and Banco Bilbao Vizcaya Argentaria, S.A.. The significant events that took place between the end of the financial year and the date on which this Report was prepared will then be described, followed by the outlook for 2011, currently in progress, ending with the proposal for the appropriation of profit. Attached to this document are, under the applicable legislation, the detailed report on the Company s structure and corporate governance practices (prepared in compliance with article 245-A of the Securities Market Code and with CMVM Regulation number 1/2007), as well as information relative to the stake in the share capital of TD,SA (namely in accordance with articles 447 and 448 of the Portuguese Commercial Companies Code and CMVM Regulation number 5/2008). Moreover, this report also includes the individual and consolidated financial statements and accompanying notes, which were prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, as well as the corresponding Reports and Opinions by the Audit Bodies, the Legal Certification of Accounts and the Audit Report prepared by an auditor registered at the CMVM. Pursuant to sub-paragraph c) of number 1 of article 245 of the Securities Market Code, the undersigned state that, to the best of their knowledge, the Management Report, annual accounts, legal certification of accounts and other documents presenting the accounts were prepared in accordance with applicable accounting standards, giving a true and fair view of the assets and liabilities, financial situation and 12

Management Report of the Board of Directors 2010 results of TD,SA and the companies included in the consolidation perimeter, as well as faithfully presenting the evolution of the businesses, performance and position of each of these entities, containing a description of the main risks and uncertainties facing them. NOTE: on the attached financial statements and indicators provided in the text of the actual management report: The financial statements of TD,SA as at 31 December 2009 include the consolidation through the full method of the assets and liabilities of the entities and holdings owned directly and indirectly by TD-EC, which are now consolidated by TD,SA. However, and since TD,SA was constituted on 30 November 2009, the consolidated income statement for that year include only the net income observed during the period between the above date of constitution and 31 December of the same year. Therefore, while the consolidated statement of the financial position of TD,SA reported as at 31 December 2009 are comparable with that of 2010, the consolidated statements of income, full income, changes in equity and cash flows do not include comparable data. Nevertheless, the consolidated financial statements of the Teixeira Duarte Group for the year ended on 31 December 2009 are available on the Company's website (www.teixeiraduarte.pt). However, and only in the Management Report, the indicators of the consolidated financial statements of TD-EC are presented for 2009, restated in accordance with IFRIC 12, solely for the purpose of comparison with the consolidated financial statements of TD,SA for 2010, thus allowing for an assessment of the evolution and performance of the Teixeira Duarte Group. II. ECONOMIC ENVIRONMENT During the year, the national economy lived under the threat of a sharp reduction in GDP, with most economic indicators confirming the continuation of the recession. By contrast, and in spite of the international crisis, the truth is that good performance has been recorded in the foreign markets where the Teixeira Duarte Group companies operate, as was the case in Angola, Algeria, Brazil and Mozambique, which are considered strategic markets for development abroad. III. GENERAL OVERVIEW - FINANCIAL OVERVIEW: In compliance with the legal provisions, the consolidated financial statements are prepared in accordance with the International Reporting Standards (IAS/IFRS). TD,SA was constituted on 30 November 2009, but was only listed on the stock market in August 2010 and it was only in December 2010 that TD,SA acquired 100% of the share capital social of TD-EC, replacing this entity as the leading listed company of the TEIXEIRA DUARTE Group. 13

Management Report of the Board of Directors 2010 Consolidated Income Statement for the years ended on 31 December 2010 and 2009 (Values in thousand Euros) 2010 2009 Var (%) (TD, SA) (TD-EC) Operation income 1,445,418 1,423,385 1.5% Operating costs 1,295,169 1,210,829 7.0% EBITDA 150,249 212,556 (29.3%) Amortisation and depreciation 59,025 55,369 6.6% Provisions 7,346 628 1069.7% EBIT 83,878 156,559 (46.4%) Financial profit or loss (17,680) (5,368) - Pre-tax profit 66,198 151,191 (56.2%) Income tax 26,820 36,562 (26.6%) Net profit 39,378 114,629 (65.6%) Attributable to: Shareholders 46,392 116,284 (60.1%) Non-controlling interests (7,014) (1,655) - The Consolidated Net Income Attributable to the Shareholders was positive by EUR 46,392 thousand. This indicator was influenced by the incorporation of the capital gains resulting from the sale of the stake in CIMPOR Cimentos de Portugal, SGPS, S.A. to the amount of EUR 71,183 thousand, and the appropriation of the net income of this subsidiary up to the date of its disposal, to the amount of EUR 9,237 thousand, as well as by the recording of an impairment loss in the stake held by Banco Comercial Português, S.A., with an impact on net income of EUR 64,146 thousand. 1,291,073 1,320,474 1,379,628 755,859 1,011,513 Turnover grew by 4.5% compared with 2009, having reached EUR 1,379,628 thousand. Evolution of Consolidated Turnover (Values in thousand Euros) 2006 2007 2008 2009 2010 Evolution of Turnover by Markets (Values in thousand Euros) 785,312 786,995 The positive variation was essentially due to the increases recorded in some sectors of Portugal and the maintenance of values similar to 2009 in the external market, which now represents 57% of the total of the Teixeira Duarte Group. 535,162 592,633 2009 2010 External Market Internal Market 14

Management Report of the Board of Directors 2010 The table below reflects the penalisation in most of the markets in which the Group operates, arising from the current scenario of crisis, with the exception of the growth observed in the markets of Portugal, Brazil and Venezuela. Countries TD Group Contribution T D G r o u p Contribution 2010 (%) 2009 (%) Portugal 592,633 43,0% 535,162 40.5% Angola 449,239 32,6% 495,759 37.5% Algeria 73,031 5,3% 101,655 7.7% Brazil 162,706 11,8% 78,212 5.9% Spain 25,089 1,8% 29,092 2.2% Morocco 3,328 0,2% 6,822 0.5% Mozambique 53,380 3,9% 53,424 4.0% Ukraine 10,556 0,8% 11,326 0.9% Venezuela 6,720 0,5% 5,254 0.4% Other 2,946 0,2% 3,768 0.3% 1,379,628 100,0% 1,320,474 100.0% Evolution of Turnover by Country (Values in thousand Euros) Consolidated operating income increased by 1.5% compared with 2009, reaching the value of EUR 1,445,418 thousand for the year ended on 31 December 2010. 1,066,727 1,377,181 1,423,385 1,445,418 Evolution of Consolidated Operating Income Cements, Concrete and Aggregates were negatively affected by the overall economic circumstances in some geographical markets where C+P.A., S.A. operates, namely Ukraine. 832,858 (Values in thousand Euros) The Automobile sector of Teixeira Duarte recorded a decrease in turnover as a result of the market conditions. Even so, these more significant reductions were compensated by the good performance achieved in Concessions and Services and in Energy, as well as by the increase of this indicator in the Distribution sector. 2006 2007 2008 2009 2010 Activity Sector Internal Market External Market Total 2010 2009 Var (%) 2010 2009 Var (%) 2010 2009 Var (%) Construction 381,664 373,892 2.1% 409,115 412,758 (0.9%) 790,779 786,650 0.5% Cement. Concrete and Aggregates - - - 13,577 17,706 (23.3%) 13,577 17,706 (23.3%) Concessions and Services 24,122 18,390 31.2% 32,154 26,109 23.2% 56,276 44,499 26.5% Real Estate 65,506 94,889 (31.0%) 75,937 48,419 56.8% 141,443 143,308 (1.3%) Hotel Services 16,253 15,061 7.9% 65,383 70,016 (6.6%) 81,636 85,077 (4.0%) Distribution 1,166 654 78.3% 120,959 115,513 4.7% 122,125 116,167 5.1% Energy 128,906 103,031 25.1% 19 18 5.6% 128,925 103,049 25.1% Automobile 81 1,477 (94.5%) 110,576 125,452 (11.9%) 110,657 126,929 (12.8%) Total 617,698 607,394 1.7% 827,720 815,991 1.4% 1,445,418 1,423,385 1.5% Operating Income by Activity Sector and Geographical Market (Values in thousand Euros) 15

Management Report of the Board of Directors 2010 Energy 9% Automobile 8% In this way, the contribution of each activity sector to the total value of consolidated operating income was as follows: Distribution 8% Construction 55% Contribution of each Activity Sector (Values in thousand Euros) Hotel services 5% Real estate 10% Concessions and Services 4% Cement, Concrete and Aggregates 1% 187,842 212,556 117,867 113,051 150,249 EBITDA fell by 29.3% in relation to the previous year to stand at EUR 150,249 thousand. Evolution of Consolidated EBITDA (Values in thousand Euros) 2006 2007 2008 2009 2010 Evolution of EBITDA by Activity (Values in thousand Euros) Activity Sector 2010 2009 Var (%) (TD. SA) (TD-EC) Construction 65,918 67,559 (2.4%) Cement. Concrete and Aggregates (7,416) 1,312 - Concessions and Services 11,753 7,978 47.3% Real Estate 62,453 80,498 (22.4%) Hotel Services 23,414 38,287 (38.8%) Distribution 7,814 7,737 1.0% Energy 7,943 7,846 1.2% Automobile (2,317) 14,333 - Not allocated to segments (17,745) (13,895) - Eliminations (1,568) 901-150,249 212,556 (29.3%) Analysing this indicator by sector of activity, the table below shows very divergent performance amongst the these business areas according to the specific characteristics of each and the respective markets in which they operate. 16

Management Report of the Board of Directors 2010 The EBITDA / Turnover Margin decreased by 32.2% in relation to December 2009, moving from 16.1% to 10.9% as at December 2010. 15.6% 14.5% 16.1% 11.2% 10.9% 2006 2007 2008 2009 2010 Evolution of the EBITDA / Consolidated Turnover Margin (Values in thousand Euros) The financial results were negative by EUR 17,680 thousand, compared with the negative results of EUR 5,368 thousand in the previous year. It is particularly significant that the reduction of the total debt and average interest rate level led to a decrease in financial charges of 21.3% compared with the same period of the previous year. In this regard, it should also be noted that the appropriation of the net income of the holding in CIMPOR Cimentos de Portugal, SGPS, S.A. (estimated up to the date of its disposal) and the respective sale contributed positively to the financial results (Net income relative to associated companies) by EUR 80,420 thousand. This indicator was also influenced, to the value of EUR 14,994 thousand, by the positive exchange rate effect of the appreciation of the Currencies with which the Group operates relative to the Euro, as well as by the recording of an impairment loss (Gains/losses in the measurement of assets available for sale) in the stake held in Banco Comercial Português, S.A., to the value of EUR 73,599 thousand. Income Tax for the year ended on 31 December 2010, reached the value of EUR 26,820 thousand, compared with the EUR 36,562 thousand reached in 2009. 3,222,510 3,177,730 3,512,471 Total Net Assets decreased by 22.5% in relation to 31 December 2009, having reached EUR 2,721,252 thousand. This reduction was essentially due to the disposal of the stake held in CIMPOR - Cimentos de Portugal, SGPS, S.A. 2,733,986 2,721,252 Evolution of Net Assets (Values in thousand Euros) 2006 2007 2008 2009 2010 17

Management Report of the Board of Directors 2010 Evolution of Consolidated Net Debt (Values in thousand Euros) 1,316,892 1,677,818 1,851,902 1,992,741 1,066,789 The total net Debt of the Group decreased by 46.5% in relation to the end of 2009, corresponding to a reduction of EUR 925,952 thousand, to stand at EUR 1,066,789 thousand, with this amount being particularly adjusted to the current economic environment. 2006 2007 2008 2009 2010 Evolution of Total Equity (Values in thousand Euros) 782,806 834,385 514,637 562,006 Total Equity decreased by 9.2% in relation to 31 December 2009, having reached EUR 562,006 thousand. 338,762 2006 2007 2008 2009 2010 Evolution of Financial Autonomy (Values in thousand Euros) 28.6% 25.9% 10.7% 14.7% 20.7% Financial Autonomy increased from 14.7% as at 31 December 2009 to 20.7% by the end of 2010, having increased by 41%. 2006 2007 2008 2009 2010 The Company's objectives and policies with respect to financial risks are described in Note 42 of the Notes to the Consolidated Financial Statements. Although there were no alterations to the consolidation perimeter during 2010, the following operations took place with entities of the Teixeira Duarte group during the year: - Extinction of TDCIM-SGPS, S.A. through its incorporation into another sub-holding of the Teixeira Duarte Group, TEDAL-Sociedade Gestora de Participações Sociais, S.A.; 18

Management Report of the Board of Directors 2010 - Extinction of the Macau Delegation of Teixeira Duarte Engenharia e Construções, S.A.; - Extinction of PETROSÓRIO Combustíveis e Lubrificantes, S.A., through dissolution; - Extinction of TCM Transportes Centrais de Matosinhos, Lda., through dissolution; - Disposal of the holding in CONSTRULINK Tecnologias de Informação, S.A.. - ORGANISATIONAL OVERVIEW: Notwithstanding a more detailed description of this matter in the attached "Corporate Governance Report", it is important to note at this point, with respect to the performance of the Teixeira Duarte Group in the different business sectors and markets, the close collaboration between all the structures, identified in the beginning of this Report, as well as the added value arising from these synergies, which are reflected in the privileged and efficient means of achieving collectively undertaken objectives. Particular note should be made, on the one hand, of the existence, in the context of the Group, of Central Departments with special responsibilities of transversal support to the actions developed in the different activity sectors, integrated in the Corporate Centre, entrusted with promoting a standardisation of procedures and providing support to the structures operating abroad in these areas common to various businesses. The Group's Operating Structures are organised by Activity Sector and tend to cover responsibility for all the teams and operations of these business areas, independently of the geographical market in which they operate, thus also acting to draw the technical and human central resources of the Group closer to those operating in the different markets of the Teixeira Duarte Group. Even so, it should be noted that occasionally some companies integrated in the Group, in view of the particularity of their business, maintain their respective specificity, especially in the Construction and, Concessions and Services sectors. Teixeira Duarte Engenharia e Construções, S.A., as the leading company of the Group in the Construction sector, develops its activity through Operating Centres, which divide up the production areas and are essential in the training of the senior management and in the follow-up of their career, as well as through a series of Central Departments with specific scope of action in terms of specialised support to the Operating Centres, in particular in the areas of Studies, Projects and Equipment. Regarding its human resources policy, Teixeira Duarte follows strict action in relation to the adequacy of the number of employees to the activity developed in the different sectors and markets. At the end of this year there was a reduction of 5.6% in the total number of employees compared with 31 December 2009, which decreased from 13,092 to 12,360. 7,774 10,717 13,157 13,530 13,036 Evolution of the Average Number of Employees This reduction results, essentially, from the decrease observed in the Construction sector in Angola and Algeria. The average number of employees of the Teixeira Duarte Group maintained the trend of contention recorded since 2008, having fallen to 13,036. 2006 2007 2008 2009 2010 19

Management Report of the Board of Directors 2010 During the year under analysis, the processes were continued for obtaining, monitoring or renewing Management System certifications of the different companies of the Group, in the fields of Safety, Quality, Environment, Social Responsibility and Research, Development and Innovation. In this context, it is appropriate to mention the objective of the Teixeira Duarte Group in pursuing the development of the concept of Sustainability, which, on the one hand, implies the 32.99 of the different aspects of procedures and their systematisation throughout the various structures comprising the entities of the Group and, on the other hand, will enable the Teixeira Duarte Group to have its own sustainability report, constituting an instrument recognised in the market and certifying respect for the sustainability criteria as well as the future commitments undertaken in this area. The Central IT Department has optimised the Information Systems, achieving notable improvements in the more efficient use of the potential of the SAP platform, extending its use to new companies, some of which are situated in new geographical areas and different market segments, with the objective of achieving the overall coverage of the Group's businesses. Technical conditions were created for the remote use of the existing platforms, enabling further adaptability of the resource use and improved productivity through the use of the synergies of operation. Focus was maintained on the security of the systems and the monitoring effort was intensified, with the objective of minimising operating risks and ensuring a high level of availability. Particular attention was given to the resizing and renewal of the existing communication networks, with the final decision having been made to implement a unified voice and data network, capable of ensuring greater flexibility, security and maintenance simplicity. The implementation process will take place next year. The Corporate Portal showed an notable evolution with the addition of new functionalities and applications, contributing to greater fluidity in the circulation of information, and progressively becoming a collaborative work platform, able to contribute effectively, amongst others, to the minimisation of the impact of geographical barriers. - CORPORATE OVERVIEW: In the area of compliance with all the corporate obligations, namely as an entity issuing tradable securities on regulated markets, note should be made of the public disclosure of a great variety of information by TD,SA in 2010. - Alterations to the Board of Directors: The Board of Directors of TD,SA, initially composed of 8 members, is currently composed of only seven members, following the resignation from the position of Director presented by Mr. João Salvador dos Santos Matias, on 23 February 2010, due to completing the age of 65, and who is now a member of the group of Coordinators/Consultants, formed by employees who have provided many years of good service to the Group. - Corporate Restructuring: Note should be made of the development of the Group's corporate restructuring process, started on 17 December 2009, the main objectives of which are the essential concentration of TD-EC in its core business activity, that is, the exercise of the civil construction and public works industry, in all its areas and related activities, and its replacement by TD,SA as the leading listed company of the Group. 20

Management Report of the Board of Directors 2010 Hence, and after the first prior concentration - at the end of 2009 - of 68.54% of the share capital of TD-EC in TD,SA, there was an public takeover bid, in the form of a public exchange offer for the entirety of the remaining share capital of TD-EC, which was held between 19 July and 6 August 2010. Following this acquisition, TD,SA increased the share capital to EUR 406,360,199, becoming the owner of 96.75% of the share capital of TD-EC. After the conclusion of the above operation, the shares of TD,SA were listed for trading on the regulated market of Euronext Lisbon as of 16 August, and on 21 September 2010 the shares of TD-EC were excluded from trading on that market, following the application for the loss of its status as a public company and their respective granting by the CMVM and Euronext Lisbon on this matter. From then on, TD,SA replaced TD-EC as the leading listed company of the Teixeira Duarte Group. Subsequently and with a view to the acquisition of the remaining shares of TD-EC that had not been acquired under the prior concentration and/or public exchange offer, on 26 November 2011 TD,SA presented an acquisition offer aimed at the total control of TD-EC, under the terms established in article 490 of the Commercial Companies Code, composed of the exchange of one TD,SA share for every TD-EC share delivered. Once this phase of the use of the potestative acquisition mechanism had finalised, TD,SA thus became the owner of 100% of the share capital of TD-EC, that is, of all the 420,000,000 shares representing its share capital. Subsequently, on 23 December 2010, TD,SA deliberated the increase of its share capital of EUR 406,360,199 to EUR 420,000,000. Therefore, and to summarise: a) TD,SA acquired 100% of the share capital of TD-EC and replaced this entity as the leading listed Company of the Teixeira Duarte Group; b) TD,SA currently has a share capital of EUR 420,000,000 represented by 420,000,000 shares with the nominal value of EUR 1.00 each, all of which are tradable on the regulated market of Euronext Lisbon. - General Meetings of Shareholders: The General Meeting was held four times during 2010. The Annual General Meeting of 27 May was suspended regarding the second point on the agenda - deliberation on the proposal for the appropriation of profit -, due to the commitment to the objective of distributing dividends also to the shareholders of TD-EC which, under the Public Exchange Offer, would participate in the operation, by exchanging their shares for TD,SA shares and at that time this process for the Public Exchange Offer was still in progress. Therefore, the General Meeting was resumed on 26 July, when the work relative to this point on the agenda were once again suspended, because the said process for the Public Exchange Offer had not yet been concluded. The work on this matter was then resumed on 6 September, on which date the above proposal was approved by all the shareholders. The General Meeting was held again on 23 December 2010, when the deliberations approved the proposals related to the increase of the share capital of TD,SA of EUR 406,360,199 to EUR 420,000,000, altered the Articles of Association to ensure their conformity with the new legislative framework relative to companies listed for trading on regulated markets, and maintained the total control of TD-EC. - Payment of Dividends: As a consequence of the abovementioned deliberations taken at the General Meeting regarding the appropriation of the profit relative to the financial year 2009, as of 23 September 2010 the dividend was paid corresponding to one Euro cent for each share representing the share capital of TD,SA. 21

Management Report of the Board of Directors 2010 - The shares of Teixeira Duarte, S.A.: As explained above, the shares of TD,SA were listed for trading on 16 August 2010. From their entry into trading until 31 December 2010, the shares devalued by 30.47%, falling from EUR 1.05 on 16 August 2010 to EUR 0.73 as at 31 December 2010. Regarding liquidity and turnover, during this period, 13,162,403 shares were traded on the stock market, with a total turnover of EUR 10,935,589. The graph below shows the evolution of the share prices since their listing for trading on the regulated market of Euronext Lisbon. 1.05 Teixeira Duarte, S.A. Share Prices 0.99 0.91 0.92 0.91 0.87 1 0.84 0.79 2 0.73 0.67 16-8-2010 31-8-2010 15-9-2010 30-9-2010 15-10-2010 29-10-2011 15-11-2010 30-11-2010 15-12-2010 31-12-2010 1 Announcement of payment of dividends relative to 2009-23 September 2010 2 Information on the activity, results and economic and financial situation in the 3rd Quarter 2010-25 November 2010 As at 31 December 2010, the share price was EUR 0.73 and, today, 28 April 2011 it is EUR 0.53. IV. SECTOR ANALYSIS The first part of each sector will provide a brief overview of how and where the Group operates in that specific business area, followed by an overview of the sectors in 2010, based on a set of indicators on the respective contributions to the overall indicators of the Group, and reference is made to the operating income on a non-consolidated basis to allow for a better understanding of the levels achieved by each sector individually. Then, for the actual reporting of the activity, brief notes are presented on the operation in the main geographical markets of each sector of the TEIXEIRA DUARTE Group. 22

Management Report of the Board of Directors 2010 IV.1. CONSTRUCTION Construction has been the core business of the Teixeira Duarte Group since the very beginning, and it is also the activity of the principal company of the Group, TD-EC. In 2009, Teixeira Duarte operated in this area in Portugal, Angola, Algeria, Brazil, Spain, Morocco, Mozambique and Venezuela - further analysed one by one - as well as in Cape Verde, France, Sao Tomé and Ukraine. Production is carried out through a series of Operating Centres of the aforementioned TD-EC, which operate in different segments of Construction and are supported by Central Departments specialised in the multiple areas supporting their activities. Furthermore, the Group also has many Complementary Groups of Companies (ACE) and other subsidiary companies operating in specific areas of Construction. - OVERVIEW OF THIS SECTOR DURING 2010: Consolidated Turnover in the Construction sector maintained the levels recorded in the previous year, with the internal market growing by 3.8%, especially promoted by the construction work of the Douro Litoral Motorway. 694,314 759,938 760,475 Evolution of Construction Turnover (Values in thousand Euros) 2008 2009 2010 Consolidated operating income grew by 0.5%, having increased from EUR 786,650 thousand to EUR 790,779 thousand, with the growth in Portugal having exceeded the decrease recorded abroad, which now represents 51.3% of the total value of this indicator. 67,559 65,918 After a significant increase last year relative to 2008, during the year under analysis EBITDA maintained values similar to those reached in 2009. 37,149 Evolution of Construction EBITDA (Values in thousand Euros) 2008 2009 2010 23

Management Report of the Board of Directors 2010 Simtejo - Works for the retaining walls of the "Tidal Lock System of Terreiro do Paço - Cais do Sodré" - Lisbon EP-Estradas de Portugal, S.A. - Rehabilitation and reinforcement of Foz Bridge over River Sousa - Gondomar In non-consolidated terms and in order to provide an overall view of the total activity during 2010, we disclose that the operating income of the companies of the Group operating in the Construction sector reached a total value of EUR 1,090,373 thousand, of which 50.4% was generated in Portugal and the rest abroad. After a strong increase of 17% from 2008 to 2009 in the contracting of works, the Teixeira Duarte Group managed to maintain the same level of award of contract work during 2010, with the total value standing at EUR 697,125 thousand. The Portfolio of Orders of the Teixeira Duarte Group for the construction sector, as a whole, reached the impressive value of EUR 2,148,068 thousand as at 31 December 2010, representing a slight decrease of 0.6% in relation to last year, ensuring good levels of activity, especially in the current context of such unfavourable economic circumstances. In the Geotechnical and Rehabilitation area, developed at TD-EC by Geotechnical and Rehabilitation Operating Centre, the there was an overall decrease in the Group's production in the markets in which it operates. In Portugal, income fell by 20% due not only to the end of some major works, but also and essentially as a result of the retraction in investment which was felt in a more immediate manner in the reduction of geotechnical and foundation activity. In particular, in the geotechnical and foundation area, the execution of the retaining walls of the "Tidal Lock Systems of Terreiro do Paço - Cais do Sodré" for Simtejo, the execution of various works in the Douro Litoral Concession, namely the "Cargo Transfer Platforms" through jet grouting and the "Portal of the Seixo Alvo Tunnel" and, for Metropolitano de Lisboa, the conclusion of the foundation works using piles and sprayed concrete in the Stations of Amadora Este and Reboleira, of the Blue Line. Even so, in the rehabilitation area, the Group managed to increase production in various areas of this speciality, and likewise, also continued 24

Management Report of the Board of Directors 2010 City Hall of Serpa - Works for the rehabilitation of facilities for "Musibéria - Centro de Música" ESCOM - Works for the retaining walls, general excavation and soil consolidation in Edifícios GES 2, 3 and 4 - Luanda to develop its strong and traditional technical areas of expertise, namely through the Inspection and Diagnosis of Structures and through Research, Development and Innovation. Particular note should be made, in this area of rehabilitation, of the conclusion of the works of "Musibéria - Centro de Música" for the City Hall of Serpa, as well as the conservation and structural rehabilitation works of "Convento de São Francisco" for the City Hall of Coimbra. For EP-Estradas de Portugal, S.A., note should be made of the rehabilitation works and reinforcement of Foz Bridge over the River Sousa, in the municipality of Gondomar, as well as the beginning of various contracts for the rehabilitation of engineering structures, namely a series of bridges on the IP3 over the reservoir of Aguieira Dam. In Angola the geotechnical and foundation production, especially as a result of the conclusion of the participation of this area in the works of the Bridge over the River Kwanza. However, it is important to mention the execution of the foundations, through piling, in the contract work for the National Assembly of Angola, as well as the conclusion of the works for the retaining walls, general excavation and soil consolidation in "Edifícios GES 2,3 and 4" for ESCOM and the beginning of the execution of speciality works in the Rehabilitation of the "Pier of the Commercial Port of Luanda". Brazil is a market undergoing expansion, where Teixeira Duarte believes that it can make the best of the synergies of its local structures combined with the knowledge and experience of the Group in this specific area of Construction. In Spain, in the geotechnical and foundation area, note should be made of the conclusion of the foundation work through piling of "Metro de Granada" for Ferrovial-Agroman, as well as the execution of the retaining walls, of great thickness, in the work "Tuneles Norte SE40" in Seville, for the UTE formed by the companies Sando-OHL-Azvi. The construction of the retaining walls was also started, through a diaphragm wall of great thickness, in the contract work for the Spanish high speed (AVE) line of Barcelona-Frontera Francesa, in Montmeló, for Ferrovial- Agroman, S.A.. 25

Management Report of the Board of Directors 2010 São João Hospital - Construction of floors 3, 4 and 5 eastwards Porto IMOFARMA - Porto Business and Technological Complex In Mozambique, the recognition by the local market of the implementation capacity of Teixeira Duarte has led to the award and beginning of important construction works, which has been reflected immediately in the action of this geotechnical and foundations area, as well as in the rehabilitation area, with this latter involved in major works concerning the bridges of Tete and the Island of Mozambique. In the Buildings area, the Group operates through the operating centre of TD-EC, as well as through other companies which also operate in markets abroad. In spite of the extremely strong decline of this activity area in Portugal, Teixeira Duarte maintains similar levels of production, essentially as a result of its exposure to markets undergoing growth such as the Angola, Brazilian and Mozambican. Therefore, in Portugal special note should be made of the school and hospital construction work, as well as the conclusion of buildings integrated in real estate projects of the actual Teixeira Duarte Group. This applies to the rehabilitation and expansion work of the Alberto Sampaio Secondary School in Braga, the Camilo Castelo Branco Secondary School in Famalicão and the Águas Santas Secondary School in Maia, as well as the finishing and special facilities for the future Lisbon Hotel School and the Restoration and Rehabilitation works, phase I, in Palácio Valadares in Lisbon, all regarding education establishments. In the hospital area, mention should be made of the conclusion of various contract works for São João Hospital in Porto, as well as the conclusion of Cascais Hospital. For IMOFARMA, the construction of the Business and Technological Complex of Porto, representing major construction work, of great complexity and with a short implementation period. 26

Management Report of the Board of Directors 2010 National Reconstruction Bureau Head office building of the National Assembly of Angola - Luanda Family Santana undertaking, São Paulo - Brazil In Angola, the activity increased slightly, where note should be made of the construction of various bank branches, the head office building of CABGOC, corresponding to major and demanding construction work, the conclusion of the 1st phase of the São Francisco de Assis College in Talatona for a company of the Teixeira Duarte Group, as well as the conclusion of the premises for the National Road and Traffic Department in Luanda for the National Reconstruction Bureau and the Secure Information Technology Centre of EMIS (Empresa Interbancária de Serviços). For ESCOM, Teixeira Duarte continued the contract work in progress and started the structure and finishing of three very large buildings, namely in terms of height, and started the construction of the head office building of the National Assembly of Angola, for the National Reconstruction Bureau, a construction work of great impact and which is progressing at a good rate. In Brazil, in this area, the Group operated through the local subsidiary EMPA, S/A in the management of important construction works for real estate developers integrated in the Teixeira Duarte Group in São Paulo, in particular Family Santana, composed of four hundred apartments in four tower blocks of twenty-five floors, as well as Quartier, composed of two tower blocks with two hundred apartments. Since this is a market with so many opportunities, the Group believes there is potential for its major growth in this area, which stimulates Teixeira Duarte to pursue increasing its size so as to be able to meet new challenges. In Spain, the Group accompanies the strong fall in activity which has been experienced in this market, however, even so, particular note should be made, amongst other contract works, of the beginning of the construction of a building in Calle Amália, in Madrid, for the Group's real estate sector. In Mozambique, Teixeira Duarte maintains a very active profile on the market, which has enabled its income to have increased, pursuing its action amongst multiple public and private entities, in particular the conclusion of the head office of the Ministries of Labour, Civil Service, Tourism and Youth and sports for BCI, as well as the continued execution of the Polytechnic Institute for Agricultural Science of Lionde, for the Ministry of Education and Culture. 27

Management Report of the Board of Directors 2010 BCI - Head office buildings of the Ministries of labour, Civil Service, Tourism and Youth and Sports Mozambique Douro Litoral Motorway In 2010 various education establishments were also concluded, not only in the city of Tete, but also in other locations of this province, for the Ministry of Education and Culture. The reconstruction of the premises in the Fishing Port of Beira were continued for the Ministry of Fisheries, as well as the 2nd phases of the Faculty of Science and the central office building of Eduardo Mondlane University, and the transformation of the Health Centre into the District Hospital of Manhiça for the Ministry of Health. Teixeira Duarte also worked on the construction of security infrastructures for KUDUMBA Investimentos in Nacala, Matola and Beira, the construction of Catedral de Fé for the IURD, the execution of the structure of two buildings for commercial, office and residential purposes for IMOINVESTE, Lda. In 2010 work was also started on the expansion of Armazéns do Ferromoçambique in Maputo, as well as the rehabilitation of the Maxaqueme pavilion in Maputo for the Organising Committee of the X All-Africa Games. In the area of Infrastructures, the Group operates through the operating centre of TD-EC, as well as through other companies which also operate in markets abroad. In 2010, the income obtained by the Group in this area increased strongly, reflecting the higher level of activity in Portugal and Brazil. On the national market, this growth was essentially the result of the construction of the Douro Litoral motorway, in particular the execution works of the metropolitan railway station of Reboleira, the Baixo Tejo motorway, the flood spillway of Paradela Dam, the Cais do Sodré/Alcântara 28

Management Report of the Board of Directors 2010 REFER - Railway Bridge over River Sado - Alcácer do Sal EPOS - Marão Tunnel tidal lock system and the conclusion of the railway bridge over the River Sado at Alcácer do Sal. In Angola, mention should be made of the conclusion of the New Bridge over the River Kwanza. In Algeria, in spite of the continuation of works in various fronts, the income of Teixeira Duarte decreased although it is important to note the continuation of the 2ème Rocade Autoroutière d Alger Sud, a stretch of the line and stations of the Algiers metropolitan railway and the modernisation of the Thenia/Tizi-Ouzou railway line and its electrification until Oued Aissi (50+14 km). In Brazil, there was an increase of the activity in this area of infrastructures, in particular regarding the construction of three PCH (small hydroelectric plants) in the State of Rio de Janeiro, as well as various road works. In Mozambique, Teixeira Duarte achieved a good level of activity, essentially with the execution of the contract work for the Rehabilitation of Samora Machel Bridge over the River Zambeze in Tete and the Bridge and Jetty of the Island of Mozambique. In Venezuela, efforts were pursued with a view to the execution of major contract works which will enable the direct action of TD-EC in this country, where the Group has also operated through the local subsidiary TEGAVEN, CA for over 30 years. In the area of underground works in Portugal, the subsidiary E.P.O.S. Empresa Portuguesa de Obras Subterrâneas, S.A., 100% owned by the Teixeira Duarte Group increased its activity, in particular regarding the development works for the mining infrastructure of Neves Corvo, participation in underground works for the Douro Litoral concession and for Reboleira metropolitan railway station in Lisbon, various contract works in Madeira and an important subcontract work for the construction of part of Marão Tunnel. 29

Management Report of the Board of Directors 2010 Somafel - Maintenance of the Western railway line OFM - Jardim do Tabaco Cruiser Pier in Lisbon Port For the Railway Works, the 60% owned subsidiary SOMAFEL - Engenharia e Obras Ferroviárias, S.A. recorded strong growth in two of the main markets in which it operates, the Portuguese and Algerian, continued the works in Morocco and, through a subsidiary in Brazil, began its commercial operation in this growing market. In Portugal, note should be made of its participation in the execution of the railway link to Aveiro Port and the railway bridge over the River Sado in Alcácer do Sal, as well as the execution of the renewal of the track on the Northern Line and maintenance of the railway track on the Beira Alta, Western and Northern lines. In Algeria, work was pursued in the renewal and modernisation of the Biskra/Tougourt and Thenia/Tizi Ouzou lines, while in Morocco the execution of the works continued for the renewal and improvement of the line serving the cities of Rabat and Casablanca. Regarding maritime works, OFM - Obras Públicas, Ferroviárias e Marítimas, S.A., 60% owned indirectly by the Teixeira Duarte Group recorded a strong reduction in the activity levels of its markets of operation, the Portuguese and Algerian, but began its operation in Cape Verde with the expansion work of the New Port in the Island of Santo Antão. In Portugal, this year, note should be made of the works carried out in the breakwater pier of Ericeira Port and in Jardim do Tabaco cruiser pier in Lisbon Port and, in Algeria, the execution of various public and private works, namely those carried out in Bejaia Commercial Port and Mers-el-kibir Naval Base. 30

Management Report of the Board of Directors 2010 ANGOCIME Úcua Quarry - Angola Cement Factory Odessa - Ukraine IV.2. CEMENT, CONCRETE AND AGGREGATES This sector has been individualised in the Teixeira Duarte Group since 2004, and is currently being developed through a group of companies operating abroad, two of which operate in Angola and the rest are integrated in C+P.A. Cimento e Produtos Associados, S.A., a company 52% owned by the Teixeira Duarte Group, with the remaining 48% belonging to the CIMPOR Group. In Angola the 00% controlled companies ANGOCIME and BETANGOLA operate in the area of the commercial exploitation of aggregates and the manufacture and marketing of ready-mix concrete, as well as the operation of a crushing plant, essentially to support the Group's construction activity in this country. In Ukraine, the locally registered company CEMENT, Ltd., 100% owned by C+P.A., S.A., operates the cement factory owned by it at Odessa. In Namibia, the subsidiary of C+PA, S.A., through the local company Karibib Portland Cement, Limited, has a project for the installation of a clinker production plant in the city of Karibib, for the purpose of producing cement, the reason for which it holds a mining license and an environmental license. C+P.A, S.A. also owns non-controlling holdings in companies in Spain and China, namely: a) A stake of 48.57% of the share capital of ARENOR, S.L., based in Seville, which operates in the concrete and aggregates sector in Spain and which in turn also has stakes in several local and overseas companies; b) 25% of the company based in Macau, under the corporate name of Sociedade de Investimento CIMPOR MACAU, S.A. continues associated to its shareholder CIMPOR, S.A. and to the local partners of Teixeira Duarte, for the development of activities in the strategic market of the Popular Republic of China, where this company of Macau is the indirect owner of holdings in various other companies operating in this cement sector in China. 31