annual - moonshapes...msf.annual report 2012 5 07 09 13 15 36 37 38 39 40 corporate entities senior...

ANNUALREPORT

2012

WE BUILD STABILITY.WE SPREAD COMPETENCE.WE CONQUER CONFIDENCE.

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HEAD OFFICE

NORTHERN BRANCH

CENTRAL WAREHOUSES

Rua Frederico George nº37Alto da Faia 1600-468 LISBOA . PORTUGALTel.: +351 217 213 500 . Fax: +351 217 213 599

Rua Gonçalo Cristóvão, nº 128, 15º Esq.4200-264 PORTO . PORTUGALTel.: +351 222 073 190 . Fax: +351 222 010 699

Casal Maria Magra, Estrada IC2, km 44,42580-243 OTA . PORTUGAL

Tax number 500 195 838Lisbon Commercial Registry Office Share Capital: 28.067.480 eurosContractor Licence no. 103

COVER PICTURE:LISBON METRO’S RED LINE . SUBWAY LINE BETWEEN THE ORIENTE AND THE AEROPORTO STATIONS . LISBON . PORTUgAL

BACK PICTURE:PORT OF PRAIA . SANTIAGO ISLAND . CAPE VERDE

WE BUILD STABILITY.WE SPREAD COMPETENCE.WE CONQUER CONFIDENCE .

Approved at the Annual Meetingon the 3rd May 2013

ANNUALREPORT

2012

UPGRADING OF N1 HIGHWAY LOT 2 APENKWA INTERCHANGE TO MALLAM ROAD JUNCTION . ACCRA . gHANA

5MSF . Annual Report 2012

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CORPORATE ENTITIES

SENIOR STAFF

OWNERSHIP STRUCTURE

MANAGEMENT REPORT FOR THE FINANCIAL YEAR OF 2012

CONSOLIdATEd BALANCE SHEET

CONSOLIdATEd INCOME STATEMENT BY NATURE

CONSOLIdATEd INCOME STATEMENT BY FUNCTION

CONSOLIdATEd CASH FLOW STATEMENT

CONSOLIdATEd STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENdING ON 31ST dECEMBER 2012

INDEX

INFRASTRUCTURE CONSTRUCTION TO INCREASETHE ENERGY PRODUCTION CAPACITY OF THE vENDA NOvA III DAM. MONTAlEGRE . portugal

vILA FRANCA DE XIRA HOSPITAL . PORTUgAL


GENERAL MEETINGMr. Fernando Augusto Silva Cunha de Sá (Chairman)

Mrs. Maria Luís Nazaré dos Santos Ferreira (Secretary)

BOARD OF DIRECTORSMr. Carlos Pompeu Ramalhão Fortunato (Chairman)

Mr. Tiago Brito da Mana Ramalhão Fortunato (Vice-chairman)

Mr. Paulo Nuno Ferreira Silvestre (Vice-chairman)

Mr. Fernando Manuel dos Santos Valério

Mr. José Pedro de Sá Campos Gil

Mr. Manuel Burnay Nazareth de Sousa

Mr. Francisco José Sobreira Pires

Mr. José Joaquim da Cunha Moura Ferreira

Mr. António Manuel Aragão de Melo

dEPUTY EXECUTIVE dIRECTOR

Mr. José Marcelino Silveira Ricardo

SUPERVISORY BOARDMr. Amílcar Martins Escudeiro (Chairman)

Rui Pena, Arnaut & Associados, Sociedade de Advogados, RL,

represented by Mr. João Francisco de Freitas Cruz Caldeira

Lamego, Horta e Associados - Sociedade de Advogados, RL,

represented by Professor José Alberto Rebelo dos Reis Lamego

Mr. Manuel Henrique Martins da Silva (Alternate)

STATUTORY AUdITOR

deloitte & Associados, SROC, S.A.,

represented by Mr. Tiago Nuno Proença Esgalhado

Mr. duarte Nuno Passos Galhardas (Alternate)

SECRETARYMrs. Maria Madalena Serra dos Santos Teixeira da Silva (Acting)

Mr. Miguel Eduardo Saraiva Vieira (Alternate)

CORPORATE ENTITIES

MARÃO TUNNEL CONTRACTAMARANTE - vILA REAL . PORTUgAL


SENIOR STAFF

Mr. Alexandre Henrique Luz F. Silva

Mr. António Luís Inácio Guimarães

Mr. Armando José Maltez Filipe

Mr. Arsénio Mendes Simões

Mr. Camilo de Lelis Camargo de Mello

Mr. Carlos Moisés da Silva Barbosa

Mr. Fernando Varela Mathias Castello Branco

Mr. Jorge M. Espírito Santo Faria

Mr. José Ernesto Aleixo

Mr. José Filipe Rodrigues Pina Santiago

Mr. José Pedro Granjeia Silvestre

Mr. José Pedro Lopes Morgado

Mr. Luís Filipe A. Campos Ferreira

Mr. Luís Miguel Soares Ribeiro da Costa Salema

Mrs. Maria Carlos R. F. L. Ramada

Mr. Martinho B. da Mana R. Fortunato

Mr. Orlando José J. Pinto Costa

Mr. Pedro Nuno N. Serpa dos Santos

Mr. Rui Carlos Estrela de Sá Pessoa

Mr. Rui F. Frazão A. Monteiro

Mrs. Teresa Cristina Lopes Belo Ferreira

10 WE BUILD STABILITY. WE SPREAD COMPETENCE. WE CONQUER CONFIDENCE.

SENIOR TECHNICAL STAFF

Mr. Álvaro Rui Cortijo Oliveira

Mrs. Ana Cristina B. Campos Rebelo

Mrs. Ana Sofia Antunes Casal Antunes

Mr. André Madeira Stoffel

Mr. André Rodrigues Cordeiro Melo Cabral

Mr. António Fernando P. Bugalho

Mr. António Fernando Vicente Sousa

Mr. António José Simões F. dos Santos

Mr. António Pedro Afonso Barroso

Mr. António Pedro Guedes Ramalhão

Mr. António Pedro Lima Brás Jorge

Mr. Armando Manuel da Cruz Robalo

Mr. Augusto Manuel Martins de Oliveira

Mr. Bruno Guia Neto Machado

Mrs. Carla M. Oliveira Ramos Santos

Mrs. Carla Patrícia Pinto Lourenço

Mr. César Manuel Pereira Peixe

Mr. Cláudio Lourenço Gil

Mrs. Cristina Maria Bento Monteiro

Mr. Eduardo Jorge Nogueira Matos

Mr. Emanuel X. B. de S. T. da Costa

Mr. Fernando José de Almeida Carlos

Mr. Fernando José Moreira R. Borges

Mr. Fernando S. do A. Andrade

Mrs. Filipa Cristina Carvalho Mineiro

Mr. Francisco A. Mendes C. Afonso

Mr. Francisco José Oliveira Carrilho

Mr. Francisco José Pinto Calhelha

Mr. Frederico J. M. de Faria Galvão

Mr. Frederico Marques dias

Mrs. Helena Catarina F. F. Gonçalves

Mr. Hugo Ricardo Ribeiro Rebelo

Mrs. Inês Cordeiro Pereira de Sousa Eiró

Mrs. Isabel Maria Fernandes Brigas

Mr. Jaime Xavier M. Rosa dourado

Mr. João António Filipe Ferreira

Mr. João F. Antunes Seco Marques

Mr. João José Rodrigues Gomes

Mr. João Miguel Ferreira Sousa

Mr. João Miguel Lopes Ladeira Forte

Mr. João P. Mourao Pena da Costa

Mr. João Paulo Ferreira da Costa

MARÃO TUNNEL CONTRACT AMARANTE - vILA REAL . PORTUgAL


Mr. José Carlos Afonso Barroso

Mr. José Carlos Calhau Pechardo

Mr. José Manuel Geraldo Galvão

Mr. Licínio Lucas Pereira

Mr. Luís Augusto Mota Almeida

Mr. Luís E. Mendonça C. Roque G. de Faria

Mr. Luís F. S. durão Branco

Mr. Manuel Alfredo Teixeira Borges

Mr. Manuel Pereira Mendes Campos

Mrs. Maria Beatriz Barreto de Ornelas Valério

Mrs. Maria dulce S. Cascalheira

Mrs. Maria Madalena Santos Leal

Mrs. Maria Manuel Rodrigues Elias

Mrs. Maria Rita do Rosário Coutinho da Silva

Mrs. Marta C. Barreira S. Fachada

Mr. Miguel José Esquetim Águas

Mr. Nuno Miguel Pinto Martins Godinho

Mr. Nuno Miguel Pratas Louro

Mr. Nuno Silva Cotrim

Mr. Orlando José M. A. Quintas Nascimento

Mrs. Patrícia C. Sousa do Amaral Xavier

Mr. Paulo Jorge Ferreira de Jesus Alves

Mr. Paulo José G. Silva Ribeiro

Mr. Pedro Manuel Calvet de Magalhães Leal

Mr. Pedro Manuel F. Silva

Mr. Pedro Miguel Silva Ferreira

Mr. Ricardo Jorge Correia Pinto do Amaral

Mr. Ricardo Sousa Arez

Mrs. Rita S. de Matos P. Santiago

Mr. Rodrigo Nuno Miguens Urbano Munhá

Mr. Rui Fernando Gomes Panarra

Mr. Rui Luís Jesus Martins

Mr. Rui Miguel Santos de Almeida

Mr. Rui Miguel Tátá Santos Silva

Mrs. Rute Margarida Barros Almeida

Mr. Sérgio Nuno Garrete Guerra

Mr. Sérgio Ribeiro Esteves

Mrs. Sónia A. dos Santos Almeida Rato

Mrs. Teresa Paula Marques Pedro Ferreira

Mr. Tiago José dos Santos Mendes

Mrs. Vanda M. Bochechas C. Friaes dos Santos

NATIONAL TRUNK ROAD N8 BETWEEN ASSIM PRASO AND BEKWAI . ASHANTI REGION . gHANA

PORT OF SAL-REI EXPANSIONBOA vISTA ISLAND . CAPE VERDE


OWNERSHIP STRUCTURE

FOZ TUA DAM . FOZ DO TUAvILA REAL . PORTUgAL


1. ACTIVITY OVERVIEW

1.1. ThE GLOBAL ECONOMY IN 2012The implementation of economic policies consistent with the purpose of correcting framework and structural

macroeconomic unbalances, continued to have a main influence in the 2012 global economic activity, causing a generalised

slowdown and causing different countries in different geographical locations, albeit showing signs of growth, to do so in

a timid manner, with growth being inferior to 2011. The slowdown was due to a general mood of continuing uncertainty,

with a lack of confidence concerning the weak capacity in controlling the Euro crisis and with the possible effects relating

to the fiscal policies of the United States of America (USA).

The International Monetary Fund (IMF) (World Economic Outlook Update dated 23rd January 2013) informed that the economy, in global terms, registered a growth of 3.2% when compared with the 3.9% in 2011 (5.2% in 2010).

The slowdown occurred both within the so called developed economies, in which the 1.3% growth in 2012 compares

with the 1.6% in 2011, as within the emerging economies (5.1% in 2012 as opposed to 6.3% in 2011). Within the first set,

it has to be noted that the USA and Japan were exceptions, presenting a growth of 2.3% and 2%, respectively, values

which are in both cases superior to those verified in 2011 (1.8% in the USA and -0.6% in Japan). The slow growth and

the uncertainties felt in the more developed economies affected the emerging markets through international trade and

finance, mainly with the fall in exports causing a cooling in their respective growths.

For 2012, the contraction of the Gross domestic Product (GdP) of the Euro Zone is estimated at 0.45%. data concerning

UE27 forecasts a slightly smaller contraction to that felt in the single currency countries, registering a fall in the GdP of 0.2%.

The infection of the economic slowdown to the “central” Euro Zone economies was evident. As opposed to what happened

in 2011, the German economy suffered a significant cooling, only achieving, as per the mentioned FMI report, a 0.9%

growth. This contrasts with the 3.1% achieved in 2011. The comeback to recovery of the Euro Zone, in the 1% ballpark, is

now only expected in 2014. For 2013, one expects a contraction of -0.2%.

during 2012 the American economy continued with the rebound started in 2009, having registered a 2.3% growth when

compared to the previous year. The confidence of the American consumers remains with the tendency to that registered

before the recession. The rebound of the job market signals to a gradual improvement in the economy. Although the job

creation remains below the long term average, the unemployment rate fell to 7.8% in december 2012. For 2013 the IMF

expects that the American GdP grows 2%. These forecasts have as an underlying factor the solving of the American

budgetary issue.

The Brazilian GdP 1% increase, the Chinese 7.8% and India’s 4.5%, confirms the growth initiated in 2010. However

the economic cooling was evident, being that the respective Central Banks cut interest rates and reduced compulsory

reserves. For 2013 one expects that these countries continue to represent the relevant “engine” of global economic

growth, with the main international bodies forecasting an acceleration of economic growth vis-à-vis 2012. The Middle

East and North African economies presented in 2012 an increase of 5.2% (3.5% in 2011), being that the African

sub-Saharan (4.8%) slowed down when compared to the previous year (5.3%). Within these, behaviours differ: for

Angola an estimated growth of 6.8% in 2012 is foreseen, which positively compares with the 3.9% registered in 2011;

conversely, the FMI estimates for 2012 GdP’s growths for Gabon (6.1%), Ghana (8.2%) and Equatorial Guinea (5.7%)

MANAgEMENT REPORTFOR THE FINANCIAL YEAR OF 2012


during 2012 concerning the forex market, the investment in the dollar and in the yen was patent, with both currencies reaching the maximum of 2 and 12 years vis-à-vis the Euro, respectively. Pound sterling followed the valuation tendency

against the Euro, reaching the highest quotation in nearly four years. The promise on the part of the ECB’s president, at

the end of July, in doing everything possible to safeguard the existence of the Euro, was fundamental for the recuperation

of this currency. In accordance with the numbers of the Bank of Portugal, the exchange was in the most part above the

1.3 EUR/USd mark, during the first months of the year, with the valuation of the American currency, especially as of

May, which reached in July, a rate close to 1.20EUR/USd. This tendency inverted as of the end of July, to close the year

around 1.32 EUR/USd.

Oil prices reached a new maximum in 2012, in terms of yearly averages (USd 112 per barrel), having shown an irregular

behaviour throughout the year, registering a maximum value of USd 128 per barrel on the 1st March and reaching the

yearly minimum in June (USd 88 per barrel), essentially due to the reduction in the demand on the part of the consumer

regions and in the increase of production in the USA, and later nearly recovering to levels achieved during the beginning

of the year (USd 110 per barrel).

INFRASTRUCTURE CONSTRUCTION TO INCREASE THE ENERGY PRODUCTION CAPACITY OF THE BEMPOSTA DAM . MOGADOURO . PORTUgAL

31.12.0831.12.0931.12.1030.12.1131.12.12

Note: Quotations on the last day of each year. Source: Banco de Portugal

2.6030.4530.7821.0240.109

2.8920.7001.0061.3560.187

2.9710.9941.2271.617

0.320

3.0181.127

1.3721.791

0.432

3.0491.2481.5071.947

0.542

Euribor - 1M

INTEREST RATES

Euribor - 3M Euribor - 6M Euribor - 9M Euribor - 12M

which are lower than the previous year’s. Cape Verde (4.3%) and Senegal (3.7%) came up with more modest increases.

FMI’s most recent report foresees the continuation of robust activities in these economies throughout 2013.

On the money market, the European Central Bank (ECB) proceeded, in mid 2012, to cut the interest rate, lowering the reference rate from 1% to 0.75%. This decision, combined with the excess in liquidity, allowed the Euribor rates to descend

to historical levels. In July, the speech of the ECB’s president, with the promise to do all to safeguard the existence of the

Euro, calmed the markets. His efforts materialised with the creation of the Outright Monetary Transactions, a programme

which seeks the purchase, on the part of the ECB, of sovereign debt in the secondary market of countries of the Euro zone

which look for assistance, and which considerably eased the pressure on the yields of the peripheral countries.


1.2. ThE PORTUGUESE ECONOMY IN 2012For Portugal 2012 was of great economic contraction, as per data from the National Statistics Institute (INE) disclosed on 11th March 2013, with the GdP falling 3.2%, a reduction greater than the 2011 one (-1.6%), which was very much

influenced, as in the previous year, by the implementation of the Economic and Financial Adjustment Programme (PAEF),

which came into being after the financial assistance request made in April 2011 and which called upon the deleveraging of

several sectors of the economy and by the external scenario.

data points to a very strong contraction in domestic demand (-6.8%), with a very negative contribution to the reduction

of GdP (-7%). Only exports prevented a worse performance, contributing with 3.9 percentage points to GdP’s growth.

Even though, contrary to the two previous years in which they were dynamic, registering growth rates of 7.2% (2011) and

of 10.2% (2010), 2012 saw a slowdown of exports to 3.3%, with decreases both in Goods and Services. The reduction in

imports was of 6.9% (-5.5% in 2011).

The improvement in the Foreign Balance of Goods and Services and the Primary Output Balance, established that the net

financing capacity of the Portuguese economy in 2012 was of 0.4% of GdP, rebalancing the Trade Balance and inverting

the position of net financing need registered during many years.

The most recent numbers on unemployment show that the situation continues to worsen, with the rate climbing 1.1

percentage points during the last quarter of the year, to 16.9%. This increase in unemployment at the end of 2012

reflects the recession and also the pessimism of businessmen concerning the performance of the economy during 2013,

principally at the internal demand level and mainly in Services.

Apart from the great reduction in private consumption (-5.6%), in 2012 investment decreased 13.7% in volume, mainly

influenced by the reduction of 18.1% in the Gross Fixed Capital Formation component, which already showed negative

values of -11.4% in the previous year.

Inflation rate in 2012 was of 2.8%, a reduction when compared with the 3.7% registered in 2011. Contributing to this

slowdown was the smaller increase in the prices of energy products and the reduction in the prices in the health sector,

mainly due to the revision in the prices of medicines.

For 2013, the Bank of Portugal foresees the continuation of the down spiral which started in 2011, with the GdP contracting

by 2%. However, one predicts that 2013 will be a year characterised by a higher level of liquidity, due to better financing

conditions by the State and by the companies. Reflecting the lower risk perception concerning Portugal, is the lowering of

the 10 year yields to the levels found at the end of 2010.

1.3. ThE CONSTRUCTION SECTOR IN PORTUGALduring 2012 one continued to witness the destruction of the construction sector, as we have known it during the last 20

years. According to the Portuguese Federation of the Construction and Public Works (FEPICOP), during 2012 one saw a

downfall in the demand concerning the Civil Construction and Public Works sector. With the main indicators reflecting this

situation, it was possible to observe a reduction in the consumption of cement of 26.9%, in relation to the same period

of 2011, reaching absolute values (3.3 million tonnes) which have not been seen since 1973. According to the National

Institute of Statistics, during 2012 the number of licenses concerning new housings registered a total of 11,156, 5,929 less

than those issued during the same period of 2011 and 13,708 less than 2010.

EvINAYONG - ACUREMAN - MEDUNU ROAD . CONTINENTAL REGION . EQUATORIAL gUINEA


A decrease in public investment occurred in the public works sector, falling 38.7% and 44.4%, in number and value,

respectively, vis-à-vis the previous year. Concerning the number of those unemployed and registered at job centres

relating to the construction sector at the end of december 2012, the total surpassed 105.6 thousand, as per data issued

by the Employment and Professional Training Institute. These numbers reflect an increase of 25.4% when compared to

the same month of 2011 and represent 16.2% of the total unemployed at the end of december 2012.

The production of the sector presented as at year’s end a sharp drop, i.e. a negative value of 15.5%, in real terms (-9.4%

in 2011). With negative yearly performance within the activity throughout the last twelve years, the sector presents, when

compared to the production in 2000, an accumulated downfall of nearly 50%. The decrease in production spread out to

all main sectors of the activity. The segment of construction of residential buildings was the worst hit (20%) according

to FEPICOP’s forecasts. The decrease in the production rate of the civil engineering sector was of 15% and the index

regarding the non-residential buildings fell by 11.8%, when compared to the previous year.

The Construction sector in 2012 was the most affected by the insolvencies registered in Portugal, representing around

28% of the 6,688 cases presented by Cosec. The increase of insolvencies in the Construction sector (43%) was greater

than the domestic insolvency increase (41%).

The persistence of a difficult economic situation and the non-existence of a specific policy which could revert, or at least

mitigate the difficulties in which the sector finds itself, does not let one perceive a comeback for 2013. The Association of

the Construction, Public Works and Service Entities (AECOPS) points to a deterioration of the sector’s situation, with a

decrease in production of 15% in 2013, a value, if confirmed, which would be 56% less than the volume registered in 2000.

2. COMPANY PERFORMANCE IN 2012

The activity of MSF Engenharia, S.A. (“MSF Engenharia”, “MSF” or “Company”) was heavily conditioned by various

factors, of which one can highlight the current economic crisis in Europe and in the US and which greatly affects a

significant portion of its international markets, by the destruction of the construction sector in Portugal, as we have

known it during the last twenty years, and by the difficulties of some customers in complying with their contractual

obligations.

Portugal is going through an exceptional period of financial difficulties and is trying to consolidate its public accounts, but

this fact does not suspend the Rule of Law, and should not suspend the contractual and partnership good faith between

the different parties.

Therefore it is totally incomprehensive and unacceptable when one observes the attitude of the Portuguese State in the

carrying out of its responsibilities concerning the concession contract for the construction and operation of the IP4-Túnel

do Marão. In fact, after long months of negotiations, the State department of Public Works, following the approval of the

State department of Finance, presented an agreement proposal to Auto-Estradas do Marão, S.A., concessionaire of Túnel

do Marão, which made it feasible to restructure the concession and which would leave the more sensitive issues to be

discussed in the Arbitral Tribunal, such as the indemnities which the Concessionaire and the construction JV understand

to have the right to. This agreement was formally accepted by the Concessionaire, which was never signed by the State

and who after some months rejected the agreement, which had been formally proposed by itself in the first place. The


works were stopped throughout 2012 and Infratúnel JV, in which MSF holds 45%, declared the construction contract

null and void. The Concessionaire in which the MSF Group holds a participation of 45% has requested the opening of an

Arbitral Tribunal to decree the termination of the concession contract, due to motives attributed to the Grantor.

Also incomprehensible and unacceptable is the attitude of Parque Escolar, in the management of the construction contract

of the Lagos and Portimão schools, which following months of contractual suspension due to lack of payments, was not

able to propose a plan for its regularisation and an agreement for the reestablishment of a contractual rebalancing. There

also being in this case no alternative for the MSF/Neocivil consortium than to request the establishment of an Arbitral

Tribunal, in order to determine the termination of the contract, due to the fault on the part of Parque Escolar.

MSF continues to believe that Portugal is governed by the Rule of Law and that, in the last instance, the Courts will be

it´s guarantor.

Summing up 2012, one has to highlight the fact that, as proven by the reduction of its consolidated liabilities by over

30% and by the growth of its equity by 2.8%, MSF had the capacity to surpass the enormous difficulties it encountered,

even though suffering a great drop in the volume of its business and in consolidated income, which reached 263 million

Euros and 0.4 million Euros respectively, being strongly influenced by the previously mentioned situations, by the abrupt

downslide of the market, by the suspension and/or delay in the takeoff of some works, by the delay in payments on

the part of customers and by many insolvencies which affected business partners. Even though significant delays in

relevant payments on the part of public debtors, domestically and globally, still exist, MSF achieved throughout the year

a reduction of these amounts and expects the smoothing out of most of these cases throughout the 2013 Financial Year.

At the start of the Financial Year, the Company counted on an order book of over 700 million Euros and registered at the

end of the Financial Year 636 million Euros in work contracts.

In 2012, international activity significantly increased its participation to 56% of the Company’s consolidated total (41% in

2011), with invoicing in Portugal retracting to around one third of that booked in 2011. For the coming years, one expects

an extension of the international presence, with MSF continuing to analyse different markets, current and potential ones,

based on profitability criteria and the degree of exposure which, by way of geographic dispersion and regional mobility,

mitigates the risks of a pronounced prevalence of a given market or country. Throughout 2012, a reorganisation of the

internal structure into “Regional Hubs” was weighed and prepared and which shall be implemented at the beginning of

2013, allowing for an optimisation in the resources management, thus enhancing the success of the defined strategy.

MSF has a sound strategy built up in line with the “Vision 2015 – 2020”, which currently serves as the basis for the

medium and long-term guidelines and which is permanently monitored and adjusted, owing to the fact that the world

economic situation is unstable and unpredictable. The achieved performance confirms the merit of the sustained growth

strategy that the Company has carried out, showing the fairness of the options taken in the past and which, among others,

allowed to develop a consolidated international process, accompanied and adjusted in function of the real difficulties and

opportunities encountered.

By the end of 2012, the international experience of MSF, consolidated during the course of a decade and a half, encompassed

the presence in countries like Angola, Bulgaria, Cape Verde, United Arab Emirates, Gabon, Ghana, Equatorial Guinea,

Mozambique, Namibia, Poland, Qatar, São Tomé and Príncipe and Senegal.


The behaviour of the domestic market was particularly unfavourable, with an unprecedented shortfall in billing, to 117

million Euros, which represents around one third of the 2011 value (302 million Euros). The decrease in business registered

in the international markets was less (-29%), with the amounts of sales and services rendered, adding up to 146 million

Euros (206 million Euros in 2011).

The contribution of activities performed in the international arena, in countries such as Angola, Cape Verde, Ghana,

Equatorial Guinea, Poland and Senegal increased from 41% to 56% of consolidated sales and services rendered. The

weight of the domestic market in the business volume in 2012, was of 44%, when compared to 59% in 2011.

3. ECONOMIC AND FINANCIAL PERFORMANCE

At year-end 2011, MSF’s consolidated turnover achieved the sum of 263 million Euros, a very significant decrease when compared to the previous year (508 million Euros). This behaviour, only partially forecasted, is due to essentially, as

mentioned earlier, to the difficult environment and in particular by the sector’s situation in Portugal, by the suspension of

ongoing works and the delaying in the start up of works contracted in the international markets.

TURNOVER BREAk-dOWNSALES ANd SERVICES RENdEREd


In the Financial Year of 2011, EBITDA (Earnings before Interest, Taxes, depreciations and Amortisation) stood at 23.5 million Euros, compared with 35.3 million Euros in the counterpart period of last year, having decreased 33%. Likewise,

one registers a decrease in operating income (EBIT) which, at year-end, attained the sum of 11.3 million Euros (20.2 million Euros in 2011). It is to be noted that percentagewise in relation to turnover, the EBITdA improved when compared

to the same period in 2011, from 7% to 9% as also did EBIT, albeit less significantly, from 4.0% to 4.3%.

Consolidated net income, attributed to the shareholders of MSF, in the value of 0.4 million Euros, compares unfavourably with those obtained during the last years. Apart from the effects of the activity’s downturn, this indicator is influenced by

the behaviour of financial results, which increased by 57%.

during 2012, the Company’s major financial effort was maintained – vital for the continued compliance with its

commitments, as has always been its policy – to meet the needs to increase working capital, associated with the

geographic dispersal of activity and the difficulties experienced by some clients in managing to meet the contractual

payment deadlines. In 2012 the needs to invest in basic equipment was of 3.2 million Euros, a very reduced amount when

compared to previous years.

TURNOVER BREAk-dOWN IN 2012


The consolidated net indebtedness of the Company fell by 6.1 million Euros, from 78.4 to 72.3 million Euros. In 2013, the balances receivable from third parties are expected to continue to progressively get back to normal, thus contributing to

the continuation of debt reduction.

It is worthy of note, the significant reduction in the Company’s consolidated liabilities in more than 30% and the increase

in equity of 2.8%, with a direct impact in the improvement of the solvency and liquidity indicators. In consolidated terms,

at the end of the year, the solvency ratio was of 41% and the general liquidity ratio reached 117%. The Net debt to EBITdA

ratio stood at 3.1 at year-end.

The capitalisation of income throughout the last years contributed to the increase in equity, which by the end of 2012, reached 94.8 million Euros. Also worthy of note, is the purpose to fully reinvest in the Company in the form of retained

earnings, the distributable net income for the Financial Year.

4. CONSTRUCTION

4.1. DOMESTIC MARKET4.1.1. Commercial ActivityCommercial activity in the domestic market was decisively affected by the major fall in works put out to tender and the

irrational increase in bids with abnormally low prices, policy with which MSF does not adhere to, due to the enormous

risks involved. during 2012, the Commercial department submitted 78 bids on the domestic market to tender, for a

total amount of 590 million Euros. Awards stood at 5 million Euros, corresponding to a success rate of less than 1%, a

symptomatic factor of the sector´s situation.

In the public works’ segment, the following works were awarded and initiated:

• General works’ contract for the construction of the S. Pedro do Mar church promoted by the Fábrica da Igreja de Quarteira,

for an approximate global amount of 730 thousand Euros and concluded in 2012 being carried out by Neocivil S.A.;

• Construction of Lots 101 and 112 – Houses type C and d, promoted by Royal Óbidos - Promoção e Gestão Imobiliária e

Turística, S.A., in the amount of 788.4 thousand Euros and to be carried out by Neocivil S.A.;

PAvEMENT STRUCTURE OF THE MAIN RUNWAY AND ACCESSES TO THE PLATFORM OF THE DIASS AIRPORT . DAKAR . SENEgAL


• Construction of houses at the Herdade da Comporta, promoted by Pátio das Andorinhas, Investimentos Imobiliários,

Lda, in the approximate amount of 3.6 million Euros and to be carried out by Neocivil, S.A..

4.1.2. Production ActivityWe would stress the following works’ contracts completed or under implementation in 2012:

hydraulic works • Conclusion of the general works’ contract to increase the energy production capacity of Picote dam, promoted by EdP

– Gestão de Produção de Energia, S.A. and carried out as part of a consortium with MSF Engenharia holding 60%, for

an approximate total amount of 60 million Euros;

• Conclusion of the general works’ contract to increase the energy production capacity of Bemposta dam, promoted by

EdP – Gestão de Produção de Energia, S.A. and carried out as part of a consortium with MSF Engenharia holding 35%,

for an approximate total amount of 50 million Euros;

• General works’ contract to increase the energy production capacity of Venda Nova III dam, promoted by EdP – Gestão

de Produção de Energia, S.A. and carried out by an JV led by MSF Engenharia, which holds 28.34%, for an approximate

total amount of 132 million Euros.

• General works’ contract for the construction of the Foz do Tua dam promoted by EdP – Gestão de Produção de Energia,

S.A. and carried out by an JV in which MSF Engenharia holds 33.3%, for a total approximate amount of 163 million

Euros.

Communication routes • Conclusion of the works’ contract involving the design, project, expropriations, construction and supply and assembly of

equipment included in the Baixo Tejo sub concession, contracted with VBT – Vias do Baixo Tejo, S.A. and carried out by

an JV in which MSF Engenharia holds 17.5%, for a total amount of around 203 million Euros;

• Conclusion of the road system construction contract for a total approximate amount of 436 million Euros, part of the

Litoral Oeste sub concession and promoted by AELO – Auto-Estradas do Litoral Oeste, S.A., to which the following works’

contracts belong and to be carried out by an JV led by MSF Engenharia, in which it holds 37.5%:

− Implementation of works involving the design, project, expropriations, construction and supply and assembly of

equipment on the motorway stretches of the IC 36-Leiria South/Leiria East and the IC2- Batalha bypass;

− Implementation of the works concerning design, project, expropriations, construction and supply and assembly of

equipment on the stretches of IC9-Nazaré/Alcobaça/EN1, Nazaré bypass, IC9-EN1/Fátima and IC9-Fátima/Ourém;

− design, project, expropriations and construction of the extension on the stretch in service IC2-Junction IC36/Junction

EN 109.

• Works’ contract to build a motorway and associated road units called the Marão Tunnel Concession, promoted by

Concessionaire Auto-Estradas do Marão, S.A. and carried out by an JV in which MSF Engenharia holds 45%, for an

amount of 359 million Euros (contract terminated by the JV).

UPGRADING OF N1 HIGHWAY LOT 2 APENKWA INTERCHANGE TO MALLAM ROAD JUNCTION . ACCRA . gHANA


Civil and Industrial Construction • Conclusion of the works’ contract for the implementation of the Toll Plaza on the IC36L / A8, part of the Litoral Oeste

sub concession and implemented for LOC Litoral Oeste Construtores JV, for the sum of 3.4 million Euros;

• Conclusion of the construction of the New Control Rooms at Lisbon Airport, part of the ALS development Plan

promoted by ANA Aeroportos de Portugal, S.A. The works amount to 4.3 million Euros and are implemented by a

consortium led by MSF Engenharia, with a 65% participation;

• Conclusion of the construction of the Lojas Sul - Praça Central - Terminal 1 of Lisbon Airport, integrated in the ALS

development Plan, promoted by ANA Aeroportos de Portugal, S.A. The works amount to 1.4 million Euros and are

implemented by a consortium led by MSF Engenharia, with a 65% participation;

• Construction of “Casas do Parque Condominium”, Plots 1, 2, 3 and 4, section 6 at Alta de Lisboa, promoted by SGAL –

Sociedade Gestora da Alta de Lisboa, S.A. for the approximate amount of 60 million Euros;

• Construction of the New Hospital of Vila Franca de Xira for Escala Vila Franca de Xira, the building management entity.

The works’ value amounts to 76.6 million Euros and they are carried out by an JV in which MSF Engenharia holds

12.5%;

• Works’ contract to modernise Júlio dantas Secondary School in Lagos and Poeta António Aleixo Secondary School in

Portimão for Parque Escolar, E.P.E., for the sum of 28.4 million Euros. The works are carried out as part of a consortium

with Neocivil, with equal percentages;

• Works’ Contract to implement bare brickwork, finishing’s, low voltage, telecommunications and AVAC at the New River

Terminal, Terreiro do Paço Interface, works promoted by Metropolitano de Lisboa, E.P. The works’ value amounts to

around 26.7 million Euros and they are being carried out by an JV in which MSF Engenharia holds 24.5%.

4.1.3. Affiliated companiesNeocivil – Construções do Algarve S.A. (“Neocivil”)The strong slowdown in the civil construction market in 2012, mainly at the level of private works and which has been the

main sector of activity of Neocivil, was specially felt in the Algarve, the traditional geographical area of the entity. To the

difficult scenario, one must add other very downward factors for the entity’s activities, with a direct repercussion on its

activities in 2012. Highlighted are the already mentioned difficulties in the contracts carried out concerning Parque Escolar

and which induced the forced suspension of the contracted works for a period over 7 months, in works that insured

around 37% of invoicing expected for 2012. One has to point out to a new delay in the start up of the Sheraton Algarve

Hotel works, now for 2014, and the delay in the commencement of the phases of Allotment 8.3 – Vilamoura XXI. Works

for L’ANd Vineyards for Sousa Cunhal Turismo, S.A., continue suspended due to default in payment.

The above mentioned translated into a reduction in the entity’s invoicing, with the turnover during the Financial Year being

near the 6.7 million Euro mark, less than forecasted and to those registered in previous years. Sales deriving from the real

estate activity reached 0.8 million Euros, amount which reflects the difficulties in the sector and being inferior to those

registered in any of the previous years. As a corollary of the sharp downturn in turnover, one notes in 2012 a worsening

in indicators such as the EBITdA (Earnings before Interest, Taxes, depreciations and Amortisation) which is negative in

around 1 million Euros. The net loss of the Financial Year amounts to 1.6 million Euros.


The value of the order book, which at year end reached the amount of 18.4 million Euros (excluding the amount referring

to the Hotel Sheraton works, whose start up is delayed to 2014) and the great expectation of new works throughout the

year, make one believe in the pickup of the entity’s turnover in 2013.

Indubel - Indústrias de Betão S.A. (“Indubel”)2012 was marked by the change in the shareholder composition of this subsidiary, with MSF becoming the majority

shareholder of the capital of Indubel, as the result of a decision taken at that company´s Shareholders General Meeting

and which determined the amortisation of shares held by “Novopca – Construtores Associados, S.A.”.

during the year Indubel concentrated itself on the development of its commercial activity, with the purpose of guaranteeing

the expansion of the geographical area in which it operates, privileging regions in which the MSF Group operates in,

mainly in countries as Ghana, Angola and Senegal. One has to highlight the ongoing works in Ghana, the awarding of

a new project in the same country and which shall start up in 2013 and the ingress into the Senegalese market, with a

subcontracting of 314 thousand Euros to be performed by a branch of MSF in this country. Additionally, works for the

installation of pile foundations in Atuabo, Ghana, for an outside entity, in the value of approximately 1.5 million Euros,

were awarded.

However, 2012 was a year which registered a great slowdown in the turnover of Indubel, with numbers below 3 million

Euros, something not seen for the last 5 years. Various factors contributed to this, such as the conclusion of great projects

performed and billed in 2011 (both domestic and international), delays in the start up of some international works (in

Senegal and Ghana) but which invoicing shall only occur in 2013 and the structural crisis in Portugal, which limited the

awarding of new projects. The net income in 2012 was a negative 1.774 thousand Euros.

The Prefabrication sector continued to be the biggest contributor to the entity’s activities, followed by the Geotechnical

Engineering area, in which Indubel is one of the international leaders. In 2012, the invoicing was of 2 million Euros,

originated essentially through four works: (i) conclusion of the supply and installation of girders and pylons for the

Lixeira de Valadares viaduct; (ii) supply of pre-manufactured panels for the new hospital of Vila Franca de Xira; (iii)

manufacturing and installation of pre-manufactured rest rooms in a residential building of Grid 6; and (iv) manufacturing

and installation of the Carregado Toll.

The international turnover grew to approximately 907 thousand Euros, resulting exclusively form Geotechnical Engineering

business segment. The awarding at the end of 2012 of the two above mentioned works, invoicing of which shall only be

done throughout 2013, creates expectations that this segment grows in 2013, apart from the good perspectives for other

projects, mainly the supply of pre-manufactured monoblocks to Angola.

4.2. FOREIGN MARKETS4.2.1. Commercial ActivityIn foreign markets, following on the strategic line to expand the activity of MSF, which has allowed it to compensate for

the continued retraction of the domestic market, there were 54 bids for tender with a total amount of 1.612 million Euros.

The success rate achieved stood at 6.9%, with the value of the contracted works standing at 111 million Euros. Some of

the proposals were, at the end of 2012, still in negotiation, enhancing significantly this amount which should be accounted

for in 2013.


Africa and the Middle EastBids were submitted for tenders in Angola, Benin, Cape Verde, Gabon, Ghana, Mozambique, Qatar and Senegal.

Consequently, MSF was awarded the following works’ contracts:

• Work contract for the EPC (Engineering, Procurement and Construction) of the Permanent Residential Housing Project

for Angola LNG workers, in the town of Soyo, Zaire province, north Angola, in the value of 227 million dollars, to be

carried out by a consortium led by MSF Engenharia Angola, Lda. (MSF Angola), in which it holds 65%;

• Construction of the Industrial Assembly Complex of electronic and household appliances, in the value of 18.8 million

dollars, for Inovia, Electrónica de Angola, Lda. to be carried out by MSF Angola;

• Construction of the Bridge over the Ndioum river, in Senegal, and respective accesses. The work is financed by the

MCA, and is valued at 10 million Euros;

• Works’ contract for the construction and rehabilitation of a 2,800 metre road which links the Via Expresso Street to

Vidrul, in the municipality of Cacuaco, Luanda province. Awarded by the Study, Planning and Statistics Cabinet of the

Ministry of City Planning and Construction (MINUC), to the consortium led by MSF Engenharia Angola, Lda., with the

value of the works at 9.1 million US dollars;

• Rehabilitation and requalification work’ of the Portuguese Embassy’s residence and of the 155h and 16th floors of the

Chancellery building in Maputo, Moçambique, in the value of 280 thousand Euros.

EuropeThe commercial activity in Poland involved a reduced numbers of bids, with the maintenance of the abnormally low price

practice presented to tenders by most of the competitors, a practice which MSF does not agree with, as already referred

to concerning the domestic market, thus not allowing us to obtain any award.

4.2.2. Production ActivityProduction activity in global markets represented in 2012, 55% of MSF’s consolidated production, split between seven

European and African countries. This fact translates into an important consolidation in the international activity of MSF

and in its expansion capacity.

AfricaIn addition to the works awarded and already mentioned above, the following works’ contracts, completed or in progress

in 2011, should be highlighted:

• Completion of the construction of Lot 2 of the N1 motorway between Apenkwa Interchange and Mallam Road Junction

in Accra, for the Republic of Ghana, promoted by the Millenium development Authority and with a contract value of

83.7 million dollars;

• Completion of the construction of the Ribeira da Torre Valley penetration road at the Island of Santo Antão, Republic of

Cape Verde, for the Ministry of Infrastructures, Transport and Sea, for the sum of 7.2 million Euros;

• Construction of the Evinayong – Acureman - Medunu road, for the Equatorial Guinea Government, with a contract value

of 129.4 million Euros;

JÚLIO DANTAS HIGH SCHOOL AND POETA ANTóNIO ALEIXO HIGH SCHOOL. LAGOS AND PORTIMÃO . PORTUgAL


• Rehabilitation of 59.9 km of the National Trunk Road #8, between Assim Praso and Bekwai, in the Republic of Ghana,

for the sum of 60.1 million dollars;

• Implementation of the paving structure of the main runway and accesses to the diass airport platform in dakar,

Senegal, a contract valued at 87 million Euros;

• Expansion and modernisation works in the Port of the city of Praia – Phase 2 - for the the Ministry of Infrastructures,

Transport and Telecommunications of the Government of Cape Verde, with a contract value of 72 million Euros, carried

out as part of a consortium, with a 37.5% participation;

• Construction of the expansion of the Port of Sal Rei, on the Island of Boa Vista, for the Ministry of Infrastructures,

Transport and Telecommunications of the Cape Verde Government, contracted for the sum of 63.5 million Euros,

carried out as part of a consortium, with a 50% participation;

• Construction of 36 social housing dwellings on the island of Boa Vista, for the Ministry of decentralisation, Housing

and Territorial Organisation of the Cape Verde Government, for the sum of 89.7 million Cape Verdean Escudos, carried

out as part of a consortium, with a 51% participation;

• Construction of the Infrastructures at the Bikele Site for “Ministère de L´Habitat, de L’Ecologie et du dévellopement

durable”, of the Gabonese Republic, contracted for the sum of 114.2 million Euros;

• Construction of 5,000 social housing dwellings for “Ministère de L´Habitat, de L’Ecologie et du dévellopement

durable”, of the Gabonese Republic, a contract valued at 141.5 million Euros.

EuropeThe activity in Poland concerned the monitoring of financial rebalancing processes resulting from completed contracts at

the respective entities. In the public works market, MSF Engenharia, S.A. was involved in the carrying out of the following

contracts:

• Completion of the construction of the S19 expressway between Stobierna and Rzeszów, Republic of Poland, for

GddkiA, for the sum of 213.5 million Zlotys, carried out as part of a consortium in which MSF Engenharia, S.A. and

MSF Polska Sp z o.o hold 64.8%;

• design and Construction of the A1 motorway between Stryków and Tuszyn, 37.3 km long, for GddkiA, valued at 1.159

million Zlotys, carried out as part of a consortium with an aggregate participation of 25% for MSF Engenharia, S.A.

and MSF Polska Sp z o.o.

4.2.3. Affiliated companiesThe activities of the international affiliates were undertaken during the course of the year with support to the Group’s

commercial and production activities in the respective countries, making a decisive contribution to the success achieved,

being worthy of note, the following:

MSF Engenharia Angola, Lda.MSF Angola has been consolidating, in a sustained manner, its presence in the Angolan market. In 2012, it signed

three important contracts, which were mentioned above, for the construction of the ALNG housing project, in Soyo, for

PORT OF SAL-REI EXPANSION . BOA vISTA ISLAND . CAPE VERDE


the construction of Inovia’s Industrial Assembly Complex concerning electronic and household appliances, and for the

construction and rehabilitation of a road in the municipality of Cacuaco, Luanda province. Its turnover reached 9.9 million

Euros, with a net income of 0.7 million Euros.

MSF Polska Sp z o.oMSF Polska has carried out its activity in the Polish market in a permanent partnership with MSF Engenharia. No award

was granted during its commercial activities, due to the already mentioned abnormally low price practice, policy which

MSF does not agree with. Its turnover was of 2 million Euros and the net income was negative in 0.4 million Euros.

MSF Cabo Verde, S.A.MSF Cabo Verde continued to carry out its commercial and production activity by backing projects in which MSF

Engenharia is involved with. Its turnover was of 5.2 million Euros with a negative net income of 0.2 million Euros.

MSF Construction Qatar LLCAl-Mustafawi, Leptis, Fortunato – Construction LLC, MSF Construction Qatar, was incorporated in January 2012, being a

partnership between partners of Qatar and Portugal.

MSF Qatar has, with MSF Engenharia, carried out great commercial activity, with the presentation of several bids and

expects that the awarding of the first contract can be achieved in 2013.

5. CONCESSIONS

In what concerns the “Concession and Public - Private Partnership” sector, the activity was marked indelibly by the

clearly retraction, if not recession, of the Portuguese economy, aggravated by a media climate in which the indifference

of the agents of the sector raged since the beginning of 2011, followed by clearly persecutory attitudes from several

political and social quadrants, creating a persistent sense of instability and insecurity in the “Partnership” relationship,

both being incompatible with the contractual relationship in which the entities, legitimately, always expected to be in line

with a multi-centennial jurisdiction, as the Portuguese one. Without any new initiative registered since 2009 in the road

sub-sector, and since 2010 in the rail sector, in 2012, one saw the termination of the high speed rail concession, between

Poceirão and Caia (imposed by the refusal of the “advanced permit” by the Court of Auditors and which, one remembers,

followed the cancelation of the high speed rail link tender, between Lisbon and Poceirão, in September 2010), as well as

the lack of interest on the part of the State regarding the construction of a new airport in Lisbon (which, as announced,

would be the obligation of the new shareholder of a privatised ANA – Aeroportos de Portugal). Also no advances occurred

in the tender relating to the “Hospital Oriental de Lisboa”, notwithstanding the various manifestations of interest and

intention on the part of the Awarding Entity and Guardian, regarding the award confirmation to the “Salveo Group”, which

we are part of.

At the end of May 2012, as previously mentioned, the negotiations for the restructuring of the “IP4-Túnel do Marão

Concession” came to nothing, creating a long and lengthy suit, characterised by unpredictable changes, dictated by

incomprehensive and unacceptable attitudes on the part of the State. The Concessionaire, barred in those conditions

to comply with the obligations resulting from the concession contract, in July petitioned with the Arbitral Tribunal, the

termination of the contract, due to motives attributable to the Grantor – expecting that the ruling shall be given at

the beginning of 2014. The same circumstances led “JV Infratúnel” and “TdM” to terminate, respectively, the “Project

and Construction Contract” and the “Operation Contract” – declarations that due to the non-exercising of the rights


contractually stated in favour of the State and the Banks, were put into effect at the start of the third quarter of 2012,

therefore effectively terminating the contracts since then.

Still within the sphere of “Auto-Estradas do Marão, S.A.” (AEM), at the end of May 2012, the Banks demanded that

the shareholding entities of AEM call in additional paid-in capital, in the maximum amount initially forecasted. The

Shareholders’ legal understanding was that said amount is not owed, but only the sum needed to liquidate the Own

Funds facilities. The Shareholders timely injected funds into AEM in order to satisfy its obligations. The banks called on

the guarantees given by the shareholders, in the amount they intended. The process for the establishment of an Arbitral

Tribunal was initiated in June to demand that the Banks reimburse the funds illegally appropriated, and pay an indemnity

for damages suffered by the shareholding entities of AEM – it is estimated that the ruling be given until the end of 2013.

The completion of the construction of the stretches of the IC9 - Nazaré / Alcobaça, EN1 / Fátima and Fátima / Ourém

which was achieved on 30th April and of the “IC 32 - Nó de Penalva”, on 1st November, marks the entry into service of

the totality of the sub concessioned road network, respectively the “Auto-Estradas do Litoral Oeste, S.A.” and “Auto-

Estradas do Baixo Tejo, S.A.”. It should be noted that in what concerns each of these entities, during the third quarter of

2012, a understanding memorandum was signed with “EP, Estradas de Portugal, S.A.”, for the negotiation of specific and

limited reductions of the subject of the sub concession contract.

6. SUSTAINABILITY IN VALUE CREATION

MSF constantly strives to ensure that its activity has a positive impact on the improvement in the quality of life of

people and communities, as well as in conserving the environment. It has the firm purpose to contribute to growth in

a sustainable manner. This is a very broad concept, encompassing a respect for ethical values and principles, employee

motivation and development, the promotion of safety, health and well-being and ensuring good levels of productivity,

efficiency, innovation, cost control, risk management, the search for better practices and technical solutions, environmental

conservation and corporate social responsibility.

6.1. hUMAN RESOURCESAt 31st december 2012, 2,145 employees were in the pay of MSF and the entities integrated in its consolidation perimeter,

compared with 3,648 at year-end 2011. This figure includes 571 employees working on a temporary basis, as at the

closure of the Financial Year of 2012.

As an upshot of the high degree of globalisation, those employees working abroad in the pay of companies in the MSF

consolidation perimeter stood at 1,094, around 51% of the total, at the end of the Financial Year.

As far as MSF and branches are concerned, it is worth mentioning that over 40% of employees are top-level, highly

qualified permanent staff.

MSF believes that the continuous increase in the qualification of its Human Resources is vital so that they will have the

tools at their disposal to provide an effective response to the challenges which lie before them. With this in mind, in

2012 the Company promoted 198 training procedures involving 1,247 participations in a total of 3,942.8 hours. These

procedures essentially affected the fields of Quality, Safety and the Environment, Engineering Techniques, Accounts and

Finance and Computing.


The commitment to strengthen its employees’ skills has been accompanied by an active campaign to raise the awareness

and training of its outsourced collaborators, seeking an ever greater integration and commitment by these entities to

MSF’s policies and objectives.

6.2. OCCUPATIONAL hEALThMSF maintained its policies to promote its employees’ health and the Company met those aims it had set itself for 2012.

In addition to the medical examinations intended to comply with the legal obligations, the following activities are worthy

of special note in this area:

• Medical examinations complemented by an electrocardiogram, audiogram, eye test, and a spirometry for a complete

evaluation, as possible, of employees’ state of health, in terms of the professional activity they undertake;

• High Blood Pressure (HBP) Control Programme amongst employees involving procedures to raise awareness

concerning cardiovascular risks of HBP, BP surveillance and healthy lifestyle advice. With this in mind, the MSF Vida

Activa strolls were continued;

• during 2012, the implementation of gymnastics was extended to other workplaces other than headquarters;

• Monitoring of noise exposure for all Company employees and temporary workers and the choice of the most suitable

ear protectors to minimise the risks of occupational deafness. All employees are informed regarding the noise counts

that they are exposed to, as well as the protection measures that they must adopt;

• Information to travelling employees concerning health risks and prophylactic measures recommended for each region.

6.3. QUALITY, SAFETY AND ENVIRONMENT SYSTEMIn 2012, MSF ended another three year certification cycle, with great success in 2012.

The current certification associated with Quality, Safety and Environment (QSA) mirrors the management policies adopted

long ago by the Company and is shown on the day-to-day of its collaborators and in projects in which it is involved in.

The QSA System within the international works was further implemented throughout the year, as a result of the quest to

maintain the high standards of internal demands, validated by the QSA Internal Audit Programme, which also includes

the technical audits under the responsibility of the Audit and Financial Rebalancing Service (SAR).

The international projects, due to the multitude of requirements within the QSA sphere, have been presented to the

collaborators as a constant challenge, both in what concerns the need to master the referred requirements and in what

concerns the management of the means needed for their implementation and compliance. In this sense, there has been

an ongoing follow up on the international works, on the part of the QSA technical team, thus guaranteeing the support in

understanding and in implementing the system.

Throughout the year the requirements of the ISO/IEC 17025 standard were maintained, in the context of competences

for test laboratories. The 2nd IPAC Accreditation Audit was carried out, with very positive results for MSF and the

maintenance of the accreditation of the Laboratories at Ota, Venda Nova III and Foz Tua.

“CASAS DO PARQUE” CONDOMINIUM . LISBON . PORTUgAL


The yearly objectives were achieved and by year end, in response to the ongoing adjustment of the Company to the

growing international activity, MSF initiated a large internal discussion cycle concerning a timely revision of the QSA

System.

6.4. TEChNICAL DEVELOPMENT AND SUPPORT SYSTEMThe Technical and Auditing division (dTA), founded in 2008, includes the Technical Office (SES), the Topography Service

(STO) and the Auditing and Financial Rebalancing Service (SAR). Since said date, it has operated as a works’ support

structure, both in the domestic and foreign markets, in the quest for better practices and innovative technical solutions,

which add value to its trade debtors and to the Company.

during 2012, the technical audits were fully subordinated to the Company’s Quality, Safety and Environment System.

during the course of the Financial Year, seven audits were carried out, six in the international area (Africa) and one in the

domestic market.

6.5. RISK MANAGEMENT during the carrying out of their activities, MSF and its affiliate companies are exposed to different types of risks and levels

which derive from the uncertainties and threats inherent in the carrying out of operations in multiple sectors, countries

and socioeconomic and legal settings. In the awareness of the fact that risk exposure is limited and accessory to activity,

both in its business area and in those of its affiliate companies, MSF seeks, on a day-to-day basis, to control, mitigate

the potential negative impacts and make the most of any opportunities for improvement, with a view to ensuring the

continuity of operations and value creation.

Risk management at MSF essentially consists of impact identification and evaluation and the determination of mitigation,

implementation, monitoring and reporting actions. In this regard the Quality, Safety and Environment System plays a

vital role, contributing by defining the internal procedures and standards at the most varied levels, setting out to ensure

that the activities are carried out in the safest, most effective and controlled manner, without any unexpected events

and respecting the various standards and policies. At the Company, there are methodologies developed to deal with the

risks associated, inter alia, with the drawing up of bids, the volatility of raw materials’ prices, the carrying out of works,

purchasing and operating equipment, customer credit, the performance capabilities of trade suppliers or subcontractors,

project management, the provision of guarantees and the integrity of its assets, including that of its information and

communications’ systems. Specifically in the financial area there are procedures aimed at risk management, such as

interest rate variations, forex variations, liquidity and counterparty risks.

Also worthy of note, is the fact that with the consolidation of its global presence and the continuous growth in MSF’s

appearance in different markets, specific measures have been strengthened, in terms of managing the risks inherent in

carrying out activity abroad.

6.6. INFORMATION AND DEVELOPMENT SYSTEMSNotwithstanding the desired savings, the Company continued to invest in its information systems, seeking greater control

over operations and inducing productivity increases by automating some tasks. The geographical dispersion forces the

permanent seeking of solutions which mitigate the impact for the end user, through procedures carried out to protect the

functionality of applications, to which a growing number of users from different countries have access to, highlighting the

care with the monitoring of the communication links, the functioning of all infrastructure and the correct and timely support

from the help desk.

ROAD INTO vALE DA RIBEIRA DA TORRE . SANTO ANTÃO ISLAND . CAPE VERDE


Some of the Group branches have also benefitted from the implementation of Oracle PeopleSoft Financials projects to cover the financial areas, and extension projects of the invoice checking platforms in Ghana, Cape Verde and Angola

were carried out, which will make a major contribution to the standardisation of procedures and the enhancement of the

information available. An upgrade in the AXIS4AII (applicational system developed by the Group and directioned to the operational management and business support of the entities of the Civil and Public Works sector) was carried out in

order to integrate functionalities, in order to support requirements associated with the growing international commercial

activity and incorporate recent technologies, guaranteeing compatibility with the new software versions, among them,

the Microsoft Office.

during 2012, it is worth noting the implementation project of the salary processing module in Oracle PeopleSoft, seeking to standardise systems within the Human Resources area and the establishment of a document managerial module,

so as to respond to a growing need of organisation and analysis of documents, avoiding hard copies and speeding up

researches. This system was extended not only to the works but also to other central services of MSF.

6.7. ENVIRONMENTAL RESPONSIBILITYAs already referred to in previous years, MSF – to be precise, through its QSA system – has made an on-going effort to

conserve the environment and has implemented various measure and control counts with a view to the promotion to its

employees, suppliers, outsources and other business partners, of the values and principles of environmental responsibility.

during the Financial Year of 2012, raising awareness and training campaigns in terms of rational energy use and reduced

consumption were continued, inter alia. These campaigns focused both on fixed premises and building sites. Under

the policies defined, raising awareness actions were implemented and the reduction in water consumption and the

minimisation of the impacts deriving from its use were promoted. The procedures to promote a reduction in sound

pollution were continued, as were general impact minimisation procedures, in terms of dust and emissions of CO2, COV

and HCFC.

2012 was the third year involving the full use of the new MSF Headquarters, opened in late 2009. during the course of

the year, and further to the experience acquired from another complete Financial Year with the existing consumption,

production and billing elements, there was a review of the basic operation of the building and some additional measures

were introduced, with a view to optimising energy consumption and production. This is a developing process, bearing

in mind the results gradually obtained over time and in view of the building’s dynamics, its use and reactions to external

factors (seasons of the year).

6.8. CORPORATE SOCIAL RESPONSIBILITYUnder its patronage policy and in collaboration with social, cultural and educational institutions and projects, the MSF

Group provides support in the form of implementing civil construction works, but also by providing funds or goods to

entities and causes which support groups in need.

2012 was another difficult year for many communities and MSF maintained its support, making more employees available

for initiatives connected with social welfare actions. As in previous years, apart from the initiatives specifically carried out

by the Company and affiliates, the social initiatives also encompassed the participation in activities organised by other

entities which brought together a series of entities and promoted welfare actions.


Globally, procedures continued to be undertaken for the benefit of local communities, namely, working on improvements

in infrastructures like schools, water and road systems.

7. PROSPECTS FOR 2013

All prospects would suggest a further shrinking of the Portuguese economy in 2013 and the continuation of an adverse

economic climate for the Construction sector, with great limitations to investments.

Against this economic backdrop, 2013 is expected to once again lay increased challenges down to the various economic

agents, companies in general and also MSF, in terms of the pursuit of their objectives. The existence of negotiations

aiming for the awarding of several contracts and signatures, of which are expected to occur during the first semester of

2013, the works in progress in various countries, backed up by an order book of around 636 million Euros at year-end

2012, enhance the expectation of a growth in the international markets and foresees the strengthening of the Company’s

globalisation level.

The implementation of “Regional Hubs” at the start of 2013, allowing for the optimisation of resource management and

the continued priority to strengthen economic and financial soundness, will lead to the successful implementation of the

outlined strategy.

8. RELEVANT FACTS FOLLOWING END OF FINANCIAL YEAR

Following the closing of the Financial Year, we would highlight:

• The awarding of the works’ contract for the construction of the infrastructure of the new Alegro Shopping Mall in

Setúbal, for Multicenco - Estabelecimentos Comerciais, S.A., for the amount of 15 million Euros and to be carried out

by and JV led by MSF, in which it holds 50%;

• The awarding intention by GE Proyectos, of the construction contract of the Mofup-Nsok road, in Equatorial Guinea,

for the amount of 138 million Euros;

• The awarding intention by IFH, S.A., of the construction contract of 294 social housing dwellings in the Boa Esperança

district, Sal Rei, Boa Vista Island, Cape Verde, for the amount of 8.6 million Euros;

• The awarding intention by IFH, S.A., of the construction contract of 250 social housing dwellings in Palha Sé, Santiago

Island, Cape Verde, for the amount of 7.3 million Euros;

• The awarding of the construction contract of the Hotel Prestige & Spa, in Aljustrel, for Majogab, Investimentos

Unipessoal, for the amount of 15.6 million Euros and to be carried out by Neocivil;

• The awarding and the signing of the construction contract of the Royal Óbidos Spa & Golf Resort Hotel, in Óbidos, for

Royal Óbidos – Promoção e Gestão Imobiliária e Turística, S.A., for the amount of 9.7 million Euros and to be carried

out by Neocivil.


Furthermore, one has to note that in February 2013, MSF Engenharia established a branch in Moçambique (Maputo).

9. OThER LEGAL INFORMATION

MSF Engenharia has no debts outstanding neither to the Public State Sector nor to the Social Security authorities.

The Company does not hold any own shares in its portfolio, nor has it granted any authorisations to businesses between

the Company and its directors.

MSF Engenharia has seven branches: in Cape Verde (Town of Praia); in the United Arab Emirates (Abu dhabi); in Gabon

(Libreville); in Ghana (Accra North); in Equatorial Guinea (Bata - Litoral); in Poland (Warsaw) and in Senegal (Almadies

– dakar).

10. PROPOSED DISTRIBUTION OF INCOME

The Board of directors duly proposes that the net income for the Financial Year of 2012, in the sum of 391,493 Euros,

should be fully transferred to the retained earnings account.

INFRASTRUCTURE CONSTRUCTION TO INCREASE THE ENERGY PRODUCTION CAPACITY OF THE vENDA NOvA III DAM . MONTALEGRE . PORTUgAL


11. FINAL NOTE

The Board of directors would like to express its recognition to all of those who in 2012 gave their support in their

effort to achieve the Company’s objectives. It thanks the support and faith given by the Shareholder, the availability and

valued collaboration of the Audit Committee and of the Statutory Auditor, the effort, dedication and the uppermost

professionalism of MSF’s collaborators, as well as the fundamental cooperation of entities, companies and persons which

and whom it had the pleasure to meet.

Lisbon, April 15th 2013

The Board of directors

S-19 MOTORWAY BETWEEN STOBIERNA AND RZESZóW . RZESZóW . POLAND

(Eur)

NON-CURRENT ASSETSTangible fixed assetsInvestment propertiesGoodwillIntangible assetsFinancial investments - loans grantedFinancial investments - other methodsAdvance on account of investmentsShareholdersOther receivablesdeferred tax assets

CURRENT ASSETSInventoriesTrade debtorsAdvances to trade suppliersState and other public entitiesShareholders Other receivablesdeferralsCash and bank deposits

TOTAL ASSETS

20

21

22

23

24

24

24

25

26

19

27

28

29

30

25/38

26

31

4

40,994,924

2,484,445

19,281,843

587,157

8,850,000

13,289

2,711,565

17,560,518

1,188,904

93,672,645

23,960,460

128,877,245

6,780,032

6,314,606

944,629

47,386,247

1,043,119

15,849,351

231,155,689324,828,334

39,313,865

2,531,761

19,281,843

734,507

3,550,000

8,284

1,139,113

13,134,937

17,560,518

1,578,692

98,833,520

26,099,685

187,417,086

7,289,010

10,812,695

910,282

56,870,797

3,324,164

32,251,673

324,975,392423,808,912

CONSOLIDATED BALANCE SHEET AS AT 31ST deCeMBeR 2012

(Eur)

EQUITYPaid-up share capitalOther equity instrumentsShare premiumsLegal reservesRetained earningsAdjustments to financial assetsOther equity variationsNet incomeNet income attributed to capital holders of parent company Minority interests TOTAL EQUITY

LIABILITIESNON-CURRENT LIABILITIESProvisionsLoans obtainedLoans obtained - leasingShareholders deferred tax liabilities

CURRENT LIABILITIESTrade suppliersAdvances from trade debtorsState and other public entitiesShareholders Loans obtainedLoans obtained - leasingOther accounts payabledeferralsFinancial instrument liabilities

TOTAL LIABILITIESTOTAL EQUITY AND LIABILITIES

32

32

32

32

32

32

32

43

33

34

34

25/38

19

35

36

30

25/38

34

34

37

31

41

28,067,480

42,500,000

997,596

5,683,834

19,336,649

-2,424,492

-1,159,341

391,493

93,393,219

1 ,439,398

94,832,616

10,075,184

15,012,295

5,880,635

3

1,707,406

32,675,523

62,269,963

28,621,618

4,322,000

146,054

63,399,608

3,865,089

12,632,343

20,485,851

1,577,670

197,320,196229,995,719

324,828,334

28,067,480

42,500,000

997,596

5,683,834

12,321,073

-908,501

-3,386,670

7,015,576

92,290,388

2,720

92,293,108

10,321,561

10,016,790

9,051,295

3

1,010,902

30,400,551

112,964,488

35,236,910

7,316,933

2,561,970

85,258,432

6,354,663

14,598,096

32,216,047

4,607,714

301,115,253331,515,804

423,808,912

ACCOUNTS NOTES 2012 2011

ASSETS


EQUITY AND LIABILITIES

CONSOLIDATED INCOMESTATEMENT BY NATURE AS AT 31ST deCeMBeR 2012

(Eur)

Sales and services renderedOperating subsidiesVariation in production inventoriesIn-house worksCost of goods soldThird party supplies & servicesPersonnel expensesInventory impairment (losses/reversals)Accounts receivable impairment (losses/reversals)Provisions (increases/reductions)Increases/reductions in fair valueOther revenue and gainsOther expenses and losses

Income before depreciation, loan expenses and taxes Expenses/reversals of depreciation and amortisation Operating income (before loan expenses and taxes) Interest and other similar revenue obtainedInterest and other similar expenses paid Income before taxes Income Tax Net income Minority interestsNet income attributed to capital holders of parent company

6

7

8

9

10

11

12

27

13

33

14

15

16

17

18

19

262,725,579

254

-535,786

197,302

-55,012,635

-144,946,862

-50,615,672

-13,188

984,476

205,763

23,426,997

-12,895,587

23,520,641

-12,178,094

11,342,547

3,730,285

-13,328,945

1,743,887

-1,774,504

-30,617

-422,110

391,493

507,990,534

4,066

-566,891

188,946

-108,836,328

-306,350,093

-52,339,644

-300,281

-1,065,572

262,512

6,832,504

-10,505,142

35,314,611

-15,100,480

20,214,131

6,264,866

-12,379,840

14,099,157

-7,099,715

6,999,442

-16,134

7,015,576



(Eur)


Sales and services renderedCost of sales and services rendered Gross income Other revenuedistribution expensesAdministrative expensesR&d expensesOther expenses Operating income (before loan expenses and taxes) Net loan expenses Income before taxes Income tax Net income Net income attributed to:Capital holders of parent companyMinority interests

6

43

43

19

43

262,725,579

-227,255,170

35,470,409

2,833,643

-26,304,258

-6,041,007

5,958,788

-4,214,901

1,743,887

-1,774,504

-30,617

391,493

-422,110

-30,617

507,990,534

-464,923,333

43,067,201

3,250,196

-23,314,191

-6,049,863

16,953,343

-2,854,186

14,099,157

-7,099,715

6,999,442

7,015,576

-16,134

6,999,442

CONSOLIDATED INCOMESTATEMENT BY FUNCTION AS AT 31ST deCeMBeR 2012


(Eur)


CASh FLOW FROM OPERATING ACTIVITIESReceived from trade debtorsPayment to trade suppliersPayrollCash generated from operations(Payment)/Reimbursement of income taxOther receipts/(payments) Cash flow from operations (1) CASh FLOW FROM INVESTING ACTIVITIESPayments concerning:Tangible fixed assetsIntangible assetsFinancial investmentsTerm deposit for guaranteeOther financial assetsReceipts concerning:Tangible fixed assetsIntangible assetsFinancial investmentsOther assetsInvestment subsidiesInterest and similar revenuedividends Cash flow from investments (2) CASh FLOW FROM FINANCING ACTIVITIESReceipts concerning:Loans obtainedPaid-up capital and other equity instrumentsLoss coverage donations Shareholders/Shareholders’ loansOther loansPayments concerning:Loans obtained Amortisations of financial leasing agreementsInterest and similar expenses dividends Reductions in capital and of other equity instrumentsShareholders/Shareholders’ loansOther loansCash flow from loans (3) Change in cash and equivalents (1+2+3)Translation gains/lossesPerimeter changes Opening cashEnding cash

4

4

4

315,401,739

-258,123,222

-45,020,020

12,258,497-2,660,761

8,573,755

18,171,491

-4,687,012

-506,476

-5,300,000

-1,800,000

-646,996

89,874

1,448,274

694,978

-10,707,358

36,104,495

64,272,317

27,235

-55,397,925

-8,330,442

-8,199,663

-54,344,698

-25,066

-25,893,747

-18,429,614168,278

59,01432,251,67314,049,351

494,762,287

-437,507,574

-46,921,834

10,332,879-1,279,465

48,007,631

57,061,045

-6,091,734

-654,459

-1,560,982

144,034

380,419

1,333,706

-6,449,016

135,263,162

26,000,000

417,291

-150,672,036

-5,187,957

-11,140,554

-2,462

-40,107,500

-267,482

-45,697,538

4,914,4911,645,822

809,28324,882,07732,251,673

CONSOLIDATED CASH FLOWSTATEMENT AS AT 31ST deCeMBeR 2012


LEGALRESERVE(Note 32)

5,374,116

309,718

5,683,834

5,683,834

Balance at 01.01.2011 Net income distribution of the 2010 net income Transference due to non-attributed income Other changes Exchange changes due to integration of branch accounts Minority interests due to consolidation perimeter change Fair value of hedging financial instrument Balance at 01.01.2011 Net income distribution of the 2011 net income Transference due to non-attributed income Other changes Exchange changes due to integration of branch accounts Minority interests due to consolidation of perimeter change Change in the fair value of hedging financial instrument net of tax Balance at 31.12.2012

32

32

43

41

32

32

43

28,067,480

28,067,480

28,067,480

PAID-UPShARE

CAPITAL(Note 32)

NOTES OThEREQUITY

INSTRUMENTS(Note 32)

ShAREPREMIUM(Note 32)

41,758,910

741,090

42,500,000

42,500,000

997,596

997,596

997,596

CONSOLIDATED STATEMENT OF CHANgES IN EQUITY AS AT 31ST deCeMBeR 2012


ADjUSTMENTSTO FINANCIAL

ASSETS(Note 32)

NETINCOME

TOTALATTRIBUTABLETO ThE GROUP

MINORITYINTERESTS

(Note 43)

OThEREQUITY

VARIATIONS(Note 32)

RETAINEDEARNINGS

(Note 32)

TOTALEQUITY

-1,268,151

-7,124

366,774

-908,501

-51,035

-1,464,957

-2,424,492

6,194,368

7,015,576

-6,194,368

7,015,576

391,493

-7,015,576

391,493

87,560,742

7,015,576

-7,124

366,774

-2,645,580

92,290,388

391,493

-51,035

-1,464,957

2,227,329

93,393,219

-16,134

18,854

2,720

-422,110

1,858,788

1,439,398

-3,386,670

-3,386,670

2,227,329

-1,159,341

6,436,423

5,884,650

12,321,073

7,015,576

19,336,649

87,560,742

6,999,442

-7,124

366,774

18,854

-2,645,580

92,293,108

-30,617

-51,035

-1,464,957

1,858,788

2,227,329

94,832,616

(Eur)

Print run of 500 copies.

Printed in matt art paper 150gr.

The wood used in manufacturing this paper pulp

comes from sustainable managed forests.

design and layout by Zook, design e Comunicação.

Printed by Multitema.

IMPRINT

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CORPORATE ENTITIESSENIOR STAFFOWNERSHIP STRUCTUREMANAGEMENT REPORT FOR THE FINANCIAL YEAR OF 2012CONSOLIDATED BALANCE SHEET AS AT 31ST DECEMBER 2012CONSOLIDATED INCOME STATEMENT BY NATURE AS AT 31ST DECEMBER 2012CONSOLIDATED INCOME STATEMENT BY FUNCTION AS AT 31ST DECEMBER 2012CONSOLIDATED CASH FLOW STATEMENT AS AT 31ST DECEMBER 2012CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AS AT 31ST DECEMBER 2012

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