annual report 2007 - zonebourse.com · luis ladaria (agro commodities distribution) rafael sanchez...

A N N U A L R E P O RT 2 0 0 7

Table of Contents

Mission Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Key figures relating to the group’s development . . . 3

Board of directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Financial timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Evolution of the share price. . . . . . . . . . . . . . . . . . . . . 5

Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . 6

Group activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Contribution to the consolidated result . . . . . . . . . . 12

Geographical contribution to the

consolidated result . . . . . . . . . . . . . . . . . . . . . . . . 13

Annual Report of the Board

of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

Crop protection . . . . . . . . . . . . . . . . . . . . . . . . . 18

Crop nutrition. . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Industrial chemicals and environment . . . . . . . 20

Agro commodities distribution . . . . . . . . . . . . 21

Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Energy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Real estate property . . . . . . . . . . . . . . . . . . . . . 23

Income statement . . . . . . . . . . . . . . . . . . . . . . . 24

Developments in the first quarter of 2008. . . . 25

Distribution of profits . . . . . . . . . . . . . . . . . . . . 26

Appointments . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Annexe to the management report . . . . . . . . . 27

Consolidated figures. . . . . . . . . . . . . . . . . . . . . .29

Consolidated income statement . . . . . . . . . . . 31

Consolidated balance sheet. . . . . . . . . . . . . . . 32

Consolidated cash flow statement. . . . . . . . . . 34

Consolidated statement of changes in

shareholder´s equity . . . . . . . . . . . . . . . . . . . 35

Notes to the consolidated financial

statements . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Statutory Accounts . . . . . . . . . . . . . . . . . . . . . . .61

Balance sheet after distribution . . . . . . . . . . . . 62

Income statement . . . . . . . . . . . . . . . . . . . . . . . 64

Limited Company (S.A.)

500, Avenue Louise

1050 Brussels

NN.0403 085 280

Ordinary General Meeting June 17, 2008

2SAPEC ANNUAL REPORT 2007

MISSION STATEMENT

Mission Statement

Formed in 1926 as a mining and chemical company, Sapec expanded its activities into various industrial and

service sectors covering the whole of the Iberian Peninsula, developing the perspective of an industrial holding

group controlling the management of various activities.

As an investor, the Sapec Group pays particular attention to generating added value by pursuing the following

objectives:

to manage a diversified portfolio of activities, capitalising, at present, on the Group’s knowledge and know how

in the field of agriculture, chemical products, animal nutrition, services with a logistical component and in the

energy generation, utilizing renewable resources primarily in the Iberian geographical area;

to develop sustainable competitive advantages through the acquisition of a leadership position or, by exploiting

niche markets in sectors offering potential growth.

This policy is implemented by:

systematically and closely monitoring the divisions in which the Group has investments;

managing the divisions as autonomous profit centres, responsible for their own cash flow in the context of yield

requirements being able to count on the Group’s support which may also include financial solutions.

This policy is an expression of the objective of increasing the company’s share value as well as ensuring a stable

and continuous dividend growth.


KEY FIGURES

Key figures relating to the group’s development

GLOBAL DATA (M€) Belgian reporting standards (1) IFRS

2003 2004 2004 2005 2006 2007

Turnover 428.8 532.0 538.2 514.9 516.4 572.5

Operating profit (2) 6.2 10.4 21.1 22.4 15.2 23.6

Net consolidated profit 9.2 10.3 11.3 13.3 10.4 22.4

Net consolidated profit - group share 8.4 9.5 10.8 12.1 7.4 20.7

EBITDA (recurrent) (3) 16.1 17.5 30.2 34.0 26.8 34.8

Shareholder’s equity (after distribution) 95.1 99.8 97.6 106.5 111.0 127.4

Total balance sheet 357.9 359.2 306.1 367.2 405.2 570.6

CONSOLIDATED DATA PER SHARE (€) Belgian reporting standards (1) IFRS

2003 2004 2004 2005 2006 2007

Number of shares 1,355,000 1,355,000 1,355,000 1,355,000 1,355,000 1,355,000

Shareholder’s equity after distribution 70.2 73.6 72.0 78.6 81.9 94.0

Operating profit (2) 4.6 7.7 15.5 16.5 11.2 17.4

Net profit group - share 6.2 7.0 8.0 9.0 5.5 15.3

Operating cash flow 11.9 13.0 23.7 24.7 19.8 25.7

Dividend common shares (gross) 1.75 1.95 1.95 2.1 2.1 2.7

Pay out on operating profit 38.0% 25.3% 12.6% 12.7% 18.7% 15.5%

Pay out on net consolidated

profit - group share 28.2% 27.7% 24.4% 23.3% 38.2% 17.6%

(1) The figures concerning 2003 and 2004 were prepared in accordance with the Belgian accounting standards, with the exception of the amorti-

sations of the consolidation differences, which were withdrawn. For 2004, the year of the transition, the primary difference concerns the profits

and losses from the real estate activity, for which the operational profits and losses were considered an exceptional result sheltered from the

Belgian standards.

(2) For the years 2003 to 2004, it corresponds to the former designation of «operational result».

(3) The figures for 2004 to 2007 do not consider the amounts of a non-recurrent nature that would normally have been considered exceptional

under the Belgian standards.


Board of directorsEduardo Catroga * Chairman

Antoine Velge * Managing Director

Philippe de Broqueville Director

Manuel Fernando Espírito Santo Director

Jean-Marie Laurent Josi Director

Xavier Scheyven Director

Günter Strauss Director

Christian Varin Director

Patricia Velge Director

Board secretaryEric van Innis *

Chief Financial OfficerJoão Sinde *

Division managersJoão Estrela (Crop Protection)

Eric van Innis (Crop Nutrition)

Fernando Gamboa (Industrial Chemicals and Environment)

José Martins Pereira (Logistics)

Luis Ladaria (Agro Commodities Distribution)

Rafael Sanchez Castillo (Energy)

Statutory auditorMazars & Guérard

Company Auditor No. 221

88, rue Gachard 1050 Bruxelles

Represented by Mr. Xavier Doyen

* Members of the Executive Committee

BOARD OF DIRECTORS


FINANCIAL TIMETABLE

Financial timetable

June 17, 2008 General Meeting 2007 financial year

June 23, 2008 Dividend Payment

September 1, 2008 Publication of half-yearly results

March 31, 2009 Publication of annual results

June 16, 2009 General Meeting 2008 financial year

Evolution of the share price in Euros

2002 2003 2004 2005 2006 2007

Ordinary shares min 31.4 39.1 44.8 67.0 82.5 90.3

max 44.5 52 72.5 96.2 97.0 114.3

Closing 31/12 ord. 43.0 46.5 72.5 93.1 90.0 102.5

Total number of shares as at 31/12 1,355,000 1,355,000 1,355,000 1,355,000 1,355,000 1,355,000

Market Capitalization 31/12 (k€) 58,265 63,008 98,238 126,151 121,950 138,888

SAPEC Shareholders No. shares Total number of shares 1,355,000

Financière Frédéric Jacobs S.A. 113,661

Soclinpar S.A. 17,969

LHI S.A. 610,973

BES Investimento S.A. (ex. ESSI) 14,179

Cobepa S.A. 204,950

Alcatel Bell Pensioenfonds VZW 42,000

Stock exchange 351,268

8.4%1.3%

3.1%45.1%

1.1%

15.1%

25.9%

SAPEC Versus Belgian all Shares

Bel 20

Brussels all shares SAPEC BEL 20

1/07

2/07

3/07

4/07

5/07

6/07

7/07

7/07

8/07

9/07

10/0

7

11/0

7

12/0

7

130,00

125,00

120,00

115,00

110,00

105,00

100,00

95,00

90,00

85,00


CORPORATE GOVERNANCE

Corporate governance

The company adheres to the Belgian Code of Corporate Governance (Lippens Code). The company’s Corporate Gover-

nance Charter entered into force on 21 June 2006. However, the implementation of its principles takes into account

the specific structure of the shareholder equity, in view of the fact that the majority family stake has ensured the

company’s stability for over eighty years.

Composition of the Board of DirectorsThe Board consists of 9 members divided Expiration du mandat

Into the following categories:

Eduardo Catroga (Chairman) AUG 2011(*)

Antoine Velge (Managing Director) AUG 2011(*)

Xavier Scheyven AUG 2009

Manuel Fernando Espírito Santo AUG 2010

Patricia Velge AUG 2009

(Five directors proposed by the majority Group)

Christian Varin AUG 2010

Jean-Marie Laurent-Josi AUG 2010

(Two directors proposed by the Cobepa Group)

Philippe de Broqueville AUG 2011(*)

Günter Strauss AUG 2010

(Two independent directors)

(*) subject to the approval of the General Meeting

The Chairman and the Managing Director are chosen from among the appointed directors by proposal of the majority

Group. The duration of the term of office of the directors is laid down in the company’s articles of association at a

maximum of 6 years. At present the terms of office run for three years.

Mission and functioning of the Board of DirectorsThe Board meets four times a year on a regular basis or whenever company is interests require it to do so.

As a general rule, the Board:

- Determines the company’s strategy and values and approves the plans and budgets;

- Decides on significant financial transactions, acquisitions and disinvestments;

- Ensures the setting up of the appropriate structures procedures and controls to achieve the aims of the company

and manage the risks;

- Supervises the performance of daily management;

- Ensures effective communication with the shareholders and other interested parties.

In 2007, the Board met five times.

The decisions are taken by a majority of votes, with the Chairman having the casting vote in the event of a tie.

The company is considered to be validly represented by two directors. It can also be validly represented by special

representatives within the limits of the power of attorney granted to them.



The Board set up from among its members two consultative committees:

- An Audit Committee, responsible for auditing the financial statements, for managing the risks and the effectiveness

of the internal and external audits;

- An Appointments and Remuneration Committee responsible for proposing to the Board the appointments and re-

munerations of the directors and senior management.

Daily management of the companyThe Board of Directors may delegate part of its powers to a managing director (or even two). Within the framework of

this delegation of powers, the managing director has been entrusted with the following main tasks:

- Responsibility for the daily management of the company and the supervision of the subsidiaries;

- Ensuring the effective organisation of the company and of its subsidiaries;

- Evaluating senior management and submitting proposals to the Remuneration Committee with regard to its development

and remuneration;

- Making investment/disinvestment decisions of under EUR 1 million;

- Preparing and submitting to the Board of Directors important decisions to be taken and performance reporting on the

performance of the mission;

- Implementing the decisions of the Board of Directors.

To help the managing director to coordinate the activities of senior management, he is assisted by an Executive

Committee, usually consisting of general managers within the Group and its subsidiaries. The Managing Director is

ultimately accountable to the Board of Directors for the company’s daily management.

The Executive Committee meets monthly in the presence of the Chairman of the Board of Directors.

Shareholder structure and publicityAs at January 1 2008, the issued capital amounts to EUR 36,600,000, represented by 1,355,000 ordinary shares,

including 22,682 shares with strip, in accordance with the legislation.

Also in accordance with the legislation and the company’s articles of association, all shareholders who hold more

than 3% of the securities and then 5% or a multiple of this percentage, must send a declaration of transparency to

the company.

Annual General MeetingsThe ordinary general meeting takes place on the third Tuesday of June at 11 a.m. at the company’s head office.

If an extraordinary general meeting proves to be necessary, the Board of Directors shall try to hold it immediately

after the ordinary general meeting.

The general meeting deliberates in line with the agenda laid down in the letter convening the meeting.

The letters convening the meetings and organisation of meetings shall comply with the memorandum and articles of

association and the legal provisions of the Company Code.

The vote is public and is held by a show of hands. The counting of the votes and the result are given immediately.

The minutes of the general meeting are drawn up and signed by the shareholders who wish to do so at the end of

the meeting.



Dividend policyThe company’s dividend policy seeks to find a balance between the yield for the shareholders and the availability

of resources to finance the development of its activities.

DerogationThe company departs from the Code (Lippens Code) on the following principles:

- The group of directors, elected by the family shareholders, is able to dominate the decisions;

- The company communicates the total remunerations paid to the members of the Board of Directors;

- The term of office of the directors can be renewed several times.

The entire Corporate Governance Charter, with detailed explanations about these derogations, may be consulted on

the company’s web site : www.sapec.be.

Financial communicationIn view of the very significant international development of its activities, the Group has chosen English as the only

language of communication, with French remaining the administrative legal language.

From now on, the annual report will be drawn up in English, with a French version being available on request from the

company’s head office.

Relations with the dominant shareholdersThere is an agreement between Cobepa and the majority Group.

AuditorsThe Auditor is the firm Mazars & Guérard, represented by Mr Xavier Doyen, Company Auditor.


GROUP ACTIVITIES

Group Activities

The Sapec Group comprises six businesses and an accessory real estate activity:

This business consists of the amination, solid and liquid formulation,

packaging and distribution in the Iberian Peninsula of phytosanitary

products earmarked for crop protection. The product portfolio mainly

consists of generic products distributed under the brand names of the

subsidiary companies, Sapec Agro (PT) and Selectis in Portugal and

Sapec Agro (ES) and Tradecorp in Spain. Together, the four companies

make Sapec third operator in the crop protection sector in the Iberian

Peninsula, after the multinationals. The Group operates a factory in

this sector of activity, located in Setúbal (PT) and two logistics centers

in Spain (Valence and Albacete).

This activity covers the production, including the synthesis of

a chelated agent and sale of a range of nutritional elements

and enriching agents with a high added value earmarked for

agriculture, in particular horticulture, viticulture, floriculture and

fruiticulture.

The main components of the range are liquid and solid trace

elements (chelates), bio stimulants (humic acids and amino

acids) as well as acidity and/or salinity correctors.

The production is based in Spain on two different sites and the products are sold in various geographical zones via

a direct commercial presence as the Iberian Peninsula, Europe, the Middle East, Mexico, Brazil and Colombia or

through agreement with local distributors in more than 55 countries worldwide.

This business incorporates the production, the packaging and

distribution in Portugal of chemical products to industry in general

and to the construction, car, manufacturing paper, environmental and

chemical sectors in particular. This activity is pursued through Sapec

Química, which operates industrial and logistical platforms in Setúbal,

covering Southern Portugal and in Ovar, covering Northern Portugal.

In the environement sector Sapec has set up the company CITRI

(Integrated industrial non-hazardous wastetreatment centre) in

Setúbal, specializing in recycling and disposal of non-toxic industrial

waste. New projects in this expanding sector are in development,

including in hazardous waste sector.

An identical center for hazardous waste will start during 2008.

Sapec holds in this project 34.1%


GROUP ACTIVITIES

In Portugal, then in Spain, the Group developed a

significant business importing and distributing raw

materials for animal feeds such as cereals, cereal

substitutes and proteins.

In Portugal, the Group operates through its subsidiary

Seteia. In Spain, the subsidiary Interpec Ibérica (one

of the main players on the market) operates from the

logistical bases of Tarragona, Cartagena and Cádiz, thus

covering three quarters of the Iberian animal nutrition

market.

In addition, in Tarragona and in Cadiz, Interpec has its own port and logistical facilities gaining a better control of the

entire distribution chain, from purchasing from foreign origins through to the end customer.

LogisticsThis business, which has evolved significantly over the

past few years, focuses today on two activities:

on one hand, in Setúbal the port handling of bulk products

and on the other hand the development of a network of

multimodal land-based terminals in Portugal devoted

to warehousing, consolidation/deconsolidation and

distribution of mer chan dise and containers for various

customers, in particular in the maritime and industrial

sectors.

This business generates and sells hydraulic energy via

14 mini power stations situated in Galicia, Castilla and

Extremadura in Spain, with a total installed capacity

of 55 MW. This activity is developed by the Spanish

company Grupo Naturener, SA, where Sapec owns

56.03%.

In Spain, Naturener is building three solar plants with a

combined capacity of 30 MW which will be in operation

in 2008. Naturener is also developing a large portfolio

of wind farms in Canada (Alberta) and USA (Montana)

with a total capacity of 1,300 Mw.


GROUP ACTIVITIES

Real estate is not, as such, one of the Group’s

activities. However it is very important because

of how much it represents in terms of value

and the reserve of financial resources that it

can generate for the Group.

In 80 years of operating in the Iberian

Peninsula, the Group has accumulated

significant holdings. These essentially consist

of 6,000 hectares of land, which is currently

forested in Spain, and 300 hectares of

land used for industrial estates in Portugal.

The Group also owns office space in Madrid

and Lisbon.

When not directly allocated for use by the group’s various divisions, these assets are deemed non-operational and

discountable.

Over the following pages, the reader will find the key figures of the Group broken down per sector and per country

as well as an organisation chart of the companies’ active in each sector and a map of the world showing the main

sites.


Contribution to the consolidated profit (in k€)

Sales

Crop protection 11.9 %

Crop nutrition 4.4 %

Indus. chem. & envir. 6.4 %

Logistics 2.4 %

Agro commodities dist. 73.1 %

Energy 1.9 %

60.65

22.33

32.87

12.25

373.49

9.57

EBITDACrop protection 18.4 %



Logistics 6.0 %


Energy 31.5 %

6.44

1.41

4.26

9.87

2.13

11.11

EBIT




Logistics -2.4 %


Energy 37.6 %

-0.57

8,54

9.10 4.49

0.40

2.25

Cash flow before tax




Logistics 4.1 %


Energy 37.1 %

3.84

1.09

6.93

9.79 4.17

0.55

2006

Sales




Logistics 2.6 %


Energy 1.9 %

EBITDACrop protection 12.2 %



Logistics 30.4 %


Energy 12.9 %

EBIT




Logistics 33.1 %


Energy 10.8 %





Logistics 34.1 %


Energy 14.8 %

2007

66.62

27.45

34.43

15.13

417.68

10.65

1.91

17.97

5.06

4.69

1.78

15.55

4.35

6.97

15.41

1.52 2.89

16.12

2.91

17.60

3.48

19.41

7.44

7.06

GROUP ACTIVITIES


100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

100

90

80

70

60

50

40

30

20

10

0

66.0%

76.9%

23.1%

69.1%

30.9%

77.5%

22.5%

53.2%

46.8%

52.1%47.9%

82.2%

52.2%

17.8%

47.8%34.0%

Geographical contribution to the consolidated results

Spain Portugal

GROUP ACTIVITIES

2006 2007

Sales

EBITDA

EBIT


Sales

EBITDA

EBIT


Porto

LisboaSetúbal

Ávila

Madrid

Albacete

Cádiz

Tarragona

BRAZIL

COLOMBIA

UNITED STATES

MEXICO

CANADA

Port or Cargo Terminal

Energy hydraulics

Plant

Wind energy

Photovoltaic energy

CROP PROTECTION

CROP NUTRITION

INDUSTRIAL CHEMICALS AND ENVIRONMENT

LOGISTICS

AGRO COMMODITIES DISTRIBUTION

ENERGY

POLAND

ITALIA

BELGIUM

FRANCE

SPAIN

MAROC

EGYPT

MACAO

PORTUGAL

CROP PROTECTION

CROP NUTRITION

INDUSTRIAL

CHEMICALS

AND ENVIRONMENT

LOGISTICS

AGRO

COMMODITIES

DISTRIBUTION

ENERGY

PROPERTY

HOLDINGS

Sapec Agro

(PT) 100%

Selectis

(PT) 100%

Sapec Agro

(SP) 100%

Tradecorp

(SP) 100%

Tradecorp do

Brasil

(BR) 100%

Nevada

Chemicals

(MX) 100%

Tradecorp

France

(FR) 100%

Tradecorp Italie

(IT) 100%

Sapec Química

(PT) 100%

Citri

(PT) 100%

Sisav

(PT) 34,1%

Maritime

Inland

Sapec Terminais

Portuários

(PT) 100%

Navipor

(PT) 50%

SPC

(PT) 100%

Interpec Ibérica

(SP) 100%

Seporsur

(SP) 100%

UTE

(SP) 50%

Interagreisa

(SP) 100%

Seporta

(SP) 90%

Seteia

(PT) 100%

Tharsis

(SP) 95,6%

Grupo Naturener

(SP) 56%

Naturener Hidro

(SP) 56%

Naturener Solar

(SP) 56%

Nuener

(SP) 26.2%

Nuenex

(SP) 24.7%

Tramontana

(USA) 56%

Tramontana

(Canada) 56%

Sapec Parques

Industriais (PT)

100%

PT = Portugal - SP = Spain - BR = Brazil - FR= France MX = Mexico IT = Italy

CAN = Canada - USA = United States

Percentage = economic holding as at 31/12/2007


MANAGEMENT REPORT

Management Report of the Board of Directors the business activities and the consolidated results of the Sapec Group in 2007

The operating income, after a rather difficult 2006 for all the activities of the Sapec Group, experienced a strong

improvement in 2007, thanks principally to an exceptional year in the agro commodities distribution sector.

The recording of a significant capital gains further to the sale of lands of the logistical platform near Lisbon allowed

the Group’s total results to progress noticeably and reach a record level.

The principal worldwide indicators (population growth, increase in living standards in China and in India, replacement

of part of the mineral-based fuels with plant-based fuels, massive needs for biomass) lead us to believe that we are

entering a cycle where the prices of agricultural products will remain high and the demand for “production inputs”

for agriculture will remain significant. Prices will also be more volatile given the amounts of money invested by the

funds on the principal agricultural commodities markets.

This cycle should last at least until the recomposition of strategic levels of world stocks, which will necessitate one

or two record harvests in order to re-balance supply and demand. Insofar as 90% of the group’s turnover is linked to

the agricultural and food processing sector, this favourable cycle is positive for us; farmers are regaining confidence

and the increase in cash flows will make it possible to dynamise the investments in this sector.

In crop protection, the distribution channels were able in this favourable context to dispose of surplus of stocks

and our subsidiaries were once again able, in the Iberian Peninsula, to increase our market share in this sector

noticeably.

In crop nutrition, the increase in sales was good, especially outside of the Iberian Peninsula where our various

subsidiaries and sales offices made good progress.

In industrial chemical products, the year was “flat”, consumption remains low pending a stronger recovery of industrial

activity in Portugal. Different projects and options are under study in order to try to redimension this sector of activity,

whose critical mass is still too low.

In the environmental sector, treatment and re-use of industrial wastes, the year confirmed the flourishing nature of

this activity in Portugal; several development projects are being analysed.

In agro commodities distribution our activity, in this context of rising prices, was steady and profitable throughout

the year, enabling this activity and its port subsidiaries to experience a record year in terms of results. This sector of

activity contributed the most to the improvement of the Group’s operating income in 2007. The activity of our port

terminals in Spain also developed very positively.

In logistics, the activity of our port terminal in Setubal was very steady, making it possible to exceed the one million

tonnes of unloaded products. The level of productivity increased significantly, allowing a noticeable progress in the

operating income. For the multi-modal platforms, in spite of a year still in deficit, the performance showed a net

improvement further to the reorganisation plan established in 2006. As forecast, 2008 should be a positive year for

this activity.

In the renewable energies sector, 2007 was the year for defining the strategic models for our subsidiary Naturener.

This company is becoming a significant player in the sector both in Spain and in North America, with wind farms

and photovoltaic projects in the pipeline, to be built over 2008-2011, which represents around 20 times its current

installed capacity in hydroelectricity.

Given the very significant impact for our group of this investment not linked to our traditional activities, we are

presenting to you for the first time a pro forma balance sheet and profit and loss account of the group separating

traditional activities and energy.


Crop protection

In the Iberian Peninsula the market for crop protection products at distribution level expe-

rienced an increase of ± 5% on 2006.

The distribution benefited from the favourable climate to dispose of surplus of stocks ac-

cumulated since 2005. Consumption at agricultural level was sustained and it is estimated

that the average level of stocks at distribution level at the end of 2007 was reduced by

nearly 15% in comparison with the end of 2006.

In spite of the favourable agricultural context and contrary to what is happening with the majority of the other agricultural

inputs, the selling prices of crop protection have remained under pressure, negatively affecting the margins, principally in

Spain. The fact that significant quantities of products, which were going to lose their permit for sale in the course of 2007

(further to the entry into effect of the European review) were put on this market at discounted prices, and the struggle of the

multinationals against the constant increase of market share of generic products, explain this atypical trend. We think that

these factors are cyclical and that starting in 2008 a recovery of the margins should be possible.

In Portugal, SAPEC Agro achieved a turnover of 25,305 k€ in 2007 compared with 23,742 k€ in 2006, thus consolidating

its market share.

Further to measures taken, the amount of outstanding customer liabilities experienced a favourable development during the

course of the final quarter of the year and makes it possible to forecast a noticeable improvement for 2008 in the average

time of payments, which remained too long throughout the year 2007.

SELECTIS achieved a level of sales of 6,964 k€ in 2007 compared with 6,244 k€ in 2006, thus slightly increasing its

market share.

The SAPEC Group, through its two subsidiaries, remains the largest player in Portugal on the crop protection market, achie-

ving 32,269 k€ of sales, which is a 32% market share.

In Spain our two subsidiaries SAPEC Agro (E) and TRADECORP saw their sales increasing by 13% and 14%, respectively,

in comparison with 2006.

Our turnover reached 34,667 k€ in 2007 compared with 30,669 k€ in 2006, enabling the SAPEC Group to see its market

share to grow again in 2007.

The pressure on the prices and the margins was strongest in Spain, leading to an erosion in the average gross margin of 1.6%.

Overall on the Iberian Peninsula, the market having increased by 5%, our sales went from 60,647 k€ in 2006 to 66,620 k€

in 2007, that is, an increase of 10%, thus enabling the Group to strengthen its position and become the third largest player

in this sector.

In spite of the growth in sales and the slight improvement of the EBIT, the operating result (before taxes) of the sector did

not increase in comparison with 2006 (2,167 k€ in 2006 compared with 2,249 k€ in 2007). The financial costs went from

2,263 k€ in 2006 to 2,703 k€ in 2007; the average outstanding customers liabilities still too high, and the increase in the

cost of money are the explanations for this.

The operational cash flow (before taxes) went from 4,173 k€ in 2006 to 4,354 k€ in 2007.

Within the framework of the European approval system, which makes it compulsory to license and register every active ingre-

dient used in agriculture, a programme of investment over three years was approved in order to allow this sector to register on

its behalf, at European level, the principal active ingredients that make up its product portfolio.

This investment will make it possible to make access to the active ingre-

dients secure, to diversify the supplier risk, to open up new opportunities

upstream and downstream from the activity, to improve the bargaining

power significantly and, finally should enable an average improvement in

the gross margin.

The entry into force of the European review system, in the end, will have the

advantage of making the markets more transparent and of eliminating a still

large number of small players.

C

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MANAGEMENT REPORT


Crop nutrition

In the Iberian Peninsula we estimate that

in terms of volume the market must have

grown ± 5%. The markets for citrus fruits and

horticultural products have suffered from imports

coming from the Middle East and the Maghreb.

However, vineyards, olive trees, fruit growing and

everything connected with grains is flourishing.

On the Iberian market we sell these products through three

commercial networks: SAPEC Agro in Portugal, Tradecorp and

SAPEC Agro (SP) in Spain. Our network outperformed the market, as

our sales increased 11% in comparison with 2006, that is 9,105 k€

compared with 8,219 k€ in 2006, the introduction of new products

and the focus on sales at TRADECORP are the principal explanations

for this.

The average gross margin remained stable in comparison with 2006,

but remains noticeably below the average gross margin achieved internationally. The Spanish market, the number one

world market, is very competitive. In spite of all this, we feel, in view of the favourable context and depending on a

dynamic strategy of differentiation, that there is potential for improvement.

Internationally, the growth of sales in comparison with 2006 was 30% and the average gross margin, in spite of the

weakness of the dollar, increased by more than two points.

launch of new products in the North.

and the average gross margin experienced significant progress, improving by nearly five points in comparison with

2006.

improvement in the average gross margin, and the setting up of the sales structure is continuing and will make it

possible to ensure a better growth rate in the coming years.

terms of quantity (more than 100%) and quality (margins, guarantees and payment terms), a new sales team

is already operational and the potential of this market is being confirmed. A loss of 488 k€ was entered in the

accounts as the balance of the reorganisation carried out in 2007.

had growth of 29%.

The total sales of this sector of activity went from 22,328 k€

in 2006 to 27,449 k€ in 2007 which is a growth of 23%.

The operational EBIT of the sector went from 399 k€ in

2006 to 2.398 k€ in 2007; an exchange loss of -247 k€,

further to the devaluation of the dollar, was entered.

The operational result (before taxes) of the sector went from

-464 k€ in 2006 to 1,010 k€ in 2007 and the operational

cash flow (before taxes) went from 550 k€ in 2006 to

1,518 k€ in 2007.

MANAGEMENT REPORT


Industrial chemicals and environment

In industrial chemical products in Portugal, the market remains weak. There was a timid

recovery in consumption, but the constant increase in the prices of raw materials could not

be completely passed on to the market in 2007, which caused an erosion of the average

gross margin. In the polymers sector, dominated by a network of small family businesses,

prudence must be exercised in the analysis of the solvency of potential customers.

An exceptional strengthening of 1,161 k€ of provision for customers of doubtful liabilities was implemented to cover

a set of small customers, and principally, the court-ordered bankruptcy of a major customer, whose total debt amounts

to 1,250 k€.

This activity therefore experienced sales that are slightly higher in terms of volume and in value than those of 2006

(+4%), i.e. 87,816 tonnes in 2007 compared with 84,440 tonnes in 2006 and 31,125 k€ in 2007 compared with

30,046 k€ in 2006.

The average gross margin experience a slight erosion of 0.6% in comparison with 2006.

New products were launched and others are under study in the area of elastomers and conventional products.

Two players and traditional competitors have been put up for sale by their shareholders and we have analysed the two

dossiers.

With the shareholders of one of the two companies we have reached an agreement on the buyout of a major part of the

company’s business.

This business is complementary to ours and represents a turnover of more than 14,000 k€ an a potential EBITDA of

more than 900 k€ per year.

The acquisition will therefore enable us to significantly increase our market share in this sector, enlarge the customer

portfolio and enter into new industrial markets. The due diligence is under way.

The environment (CITRI activity) again experienced a good year. The tonnes of non-toxic industrial wastes received for

disposal were on the increase, i.e. 125,798 tonnes in 2007 compared with 105,720 tonnes in 2006. Prices stayed at

a good level throughout the year with the result that the turnover for this activity increased from 4,503 k€ in 2006 to

5,475 k€ in 2007.

The production on an industrial scale of a secondary fuel from the residue received started up, and nearly 5,000 tonnes

of this type of fuel have already been sold.

The operational and structural costs are in line with the objec-

tives.

The EBITDA in 2007 is placed at 2,815 k€ compared with

2,196 k€ in 2006 and the EBIT at 1,807 k€ at 2007 com-

pared with 1,028 k€ in 2006.

In the environmental sector the following elements are worthy

of note:

site, whose capacity is more or less equal to the sum of

the first two, is being completed and the inauguration is planned for the second quarter of 2008.

stage. This project, the SISAV, is a consortium in which SAPEC has a participating interest of 34,1% and the invest-

ment of a total amount of 27,000 k€ is financed by a non-recourse “project finance”. The start-up of the activity is

planned for the end of June 2008.

and residues. Several projects are currently being studied.

In

In

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MANAGEMENT REPORT


For the sector as a whole, the operating income (before tax) and after establishment of the exceptional provision went

from 1,868 k€ in 2006 to 1,180 k€ in 2007 and the operational cash flow (before) went from 3,842 k€ in 2006 to

2,887 k€ in 2007.

Agro commodities distribution

Interpec Ibérica in Spain broadly anticipated, then followed the rise in the prices of

agricultural raw materials, having thus cleared record pre-tax profits of 10.7 M€. Good

decisions taken at the right time in respect of both products and shipping allowed us to

achieve this figure.

The volumes handled were slightly lower than those for 2006, at significantly higher prices.

We were voluntarily selective during the second half of the year since the risks of “non-fulfilment” are higher in a market

that is so volatile. Since the beginning of 2008, we have noticed a drop in consumption; many meat producers have

not succeeded in earning money against the backdrop of rising prices for animal feed and prefer to send their livestock

to slaughter.

Although certain products (and freight in general) have experienced a downward correction from 20 to 30% since the

beginning of the year, the quotations remain high. We are anticipating the continuation of this situation in the medium

term, as long as the worldwide strategic stocks of agro commodities have not been reconstituted.

Our port subsidiaries Seporta and Seporsur performed very well. Aside from food processing products, Seporsur un-

loaded more than 1 million tonnes of clinker, tripling the volume unloaded in 2006.

Seporta also increased its activity and its income in comparison with 2006.

In Cadiz (Seporsur) we are in the process of building an instal-

lation for the storage of vegetable oils intended for the biodiesel

market. It should be operational in the month of April 2008 and

will make it possible to further diversify our range of products and

customers.

Our commercial subsidiary in Portugal, Seteia, also performed well

and succeeded in increasing its market share and its income.

We are analysing a project for a bioethanol production plant from

maize, in association with a local partners, to be installed on our

land in Setúbal. No definitive decision, , will be taken as long as

the Portuguese legislative framework is not final and positive for this

project, for which the investment could be on the order of 80 M€.

Logistics

The Group’s logistics sector today consists of a land sector (multi-usage and multi-

modal platforms) and a port sector (bulk terminal at Setúbal and 50% of Navipor,

port subsidiary specialising in Roll-on/Roll-off at Setúbal as well).

In the land sector in an economic context that is still troubled in Portugal, sales

increased by 12% in comparison with 2006 thanks to the reshaping of the sales

teams. The container segment was relatively weak, compensated by the groupage and logistics activity. It was still

not possible to reach the “breakeven-point” in 2007.

The sale, in the form of a “sale-partial rent-back” of the Lisbon terminal (Póvoa), allowed SPC to record a very signi-

ficant capital gain and noticeably reduce its debt and its net investment. The R.O.I. for this activity should improve

MANAGEMENT REPORT


noticeably in 2008. On the other hand, the opening of the new terminal in concession with the Portuguese railways

in Lisbon will make it possible to stimulate the railway activity between Lisbon and Valongo (Porto) benefiting the

two terminals. Economic activity in Portugal remained weak in 2007, but certain recent signs lead us to hope for a

better 2008.

Concerning port activity, the bulk terminal at Setúbal was sustained, and exceeds one million tonnes for the first

time in its history.

New customers (and products) like clinker and sugar had a significant impact on the dilution of the fixed costs and

therefore the increase of the income. The installed capacity of our solid bulk quay is near saturation and major

investments, both for increasing the unloading capacity and for improving the environmental conditions, will be

necessary in the next few years. We are continuing to negotiate with

the authorities of the port of Setúbal concerning the possibility of

extending our quay.

The quay for bulk liquids unfortunately continued to be under-uti-

lised as long as no major industrial installation for fuels is installed

on our land in Setúbal.

The subsidiary Navipor closed the financial year with a profit, with

sustained activity but without news as to the announced future

terminal concessions for Setúbal.

Energy

The production of our hydroelectric plants in Spain increased by 12% in com-

parison with 2006, but the turnover increased by only 2% due to a price per Kwh

slightly lower than that obtained in 2006. The increase in production was notice-

able above all in the spring as autumn was rather dry.

Concerning our developments in the United States and Canada, we greatly in-

creased the management team based in San Francisco and opened an office, at

the beginning of 2008, in Calgary for our activities in Canada. In fact, after the

acquisition in 2007 of the company West Windeau, which has projects in the pipe-

line on the order 700 MW in the southeast of the province of Alberta, we notice-

ably increased our presence in this country. We also convinced the management

of West Windeau to remain with us and to take charge of our portfolio of projects

in Canada.

Insofar as the portfolio of projects is concerned, we have cut out a certain number

of projects that had little chance of success and strengthened the Canadian port-

folio.

The portfolio of secured projects, for which we have the authorisation, the land,

the connection to the electrical network and a major part of the turbines, are the

following:

network by the end of 2008;

mid-2009;

MANAGEMENT REPORT


The portfolio of projects not yet secured, for which we do not yet have

the turbines or all the necessary authorisation, is the following:

for the end of 2009 or 2010.

in 2010 or 2011.

We are in the process of finalising the authorisations for the electrical

line that is meant to connect the two Wild Rose projects (400 MW) to

the Canadian network.

We are thus considering a total portfolio of 1000 MW to be build

between 2008 and 2011, a remain of around 300 MW is still under

analyse.

In photovoltaic solar energy, we are in the process of building four projects totalling 29 MW in Spain. All these

projects will be terminated in July/August 2008 and should benefit from the attractive price premium system cur-

rently in effect until 28 September 2008. We have other projects in the pipeline amounting to around 90 Mwp to

be built between 2008 and 2009, pending announcement of the new price premium system in force as of the end

of September 2008.

The majority of the costs of development and start-up of our North American and Solar activities are capitalised, as

well as the financial costs.

For this sector, the recurring profit is being maintained in practice at the level of that of 2006; the great difference

from the preceding year is located at the level of non-recurrent income. In 2006 we recorded the largest share of

the capital gain on the sale of Naturener Eolica in Spain, with the balance recorded in 2007. A supplement could

occur between 2008 and 2010 depending on whether or not the final authorisations for the projects in Castilla Leon

are obtained.

Real estate property

Only one plot in the infrastructured part of the industrial

park of Setúbal, where we still have a small stock of lots,

was sold in 2007. This part of the park has already entered

into its phase of normal operation with management

provided by the Group.

Finally, works to improve the road access to the industrial

zone, where our park is located, has begun. This new

infrastructures will benefit the future development of the

park.

In Lousal, where the Group’s old pyrite mine is located,

an urban tourism plan has been approved. Contacts have

been made with various promoters interested in the purchase of the land.

MANAGEMENT REPORT


Income statement

Analysis of the Profit and Loss Statement reveals a turnover increasing from 11% and an operational result that

went from 15,203 k€ in 2006 to 23,562 k€ in 2007, which is an improvement of 55% in spite of the entry of

3,839 k€ in non-recurrent costs. 1

After a difficult 2006 for some of our activities, the increase in the operational income is due to a slight improve-

ment in the crop protection sector, to good progress in the crop nutrition sector and the logistics sector, and finally

to a record in agro commodities, which by itself explains the improvement in the income.

This improvement in the operational result is found at the level of the EBITDA (gross operating profit) which went

from 26,790 k€ in 2006 to 34,835 k€ in 2007, and is an increase of 30%.

As a consequence of the increase in the net debt and above all the soaring of the cost of money, the net financial

costs went from -8,595 k€ in 2006 to -10,974 k€ in 2007 (+ 28%). The increase in the net debt linked with the

investments in renewable energies has no impact since the interest has been capitalised.

The products of sales of non-current assets and on investments for a total of 16,185 k€ cover the sale of the land

of the logistics platform near Lisbon, the sale of an old logistics warehouse near Porto and a part of the capital gain

on the sale of our wind farm projects in Spain, the major part of which was already recorded in 2006.

The income before tax was 29,104 k€, as compared with 14,634 k€ in 2006 and the net consolidated income

reached 22,375 k€ in 2007 compared with 10,376 k€ in 2006 (+116%).

The income share of the Group stands at 20,712 k€ compared with 7,448 k€ in 2006.

The significant growth in the total assets on the balance sheet, which went from 405,224 k€ at the end of 2006

to 570,594 k€ at the end of 2007 (+165,370 k€ or +41%), is essentially due to the investments made in the

renewable energies sector (wind in the USA/Canada and photovoltaic in Spain), as the weight of this sector in the

assets in the balance sheet went from 26,412 k€ in 2006 to 147,365 k€ in 2006 (that is +120,953 k€).

The Group’s net consolidated debt as a consequence primarily of the same investments went from 167,202 k€ at

the end of 2006 to 270,481 k€ at the end of 2007, that is +103,279 k€, 92,603 k€ of which is connected with

the energy sector.

Aside from projects in renewable energies, the net debt went from 154,739 k€ at the end of 2006 to 165,415 k€

at the end of 2007, which is an increase of 7%, concentrated primarily in the sector of the distribution of agro com-

modities, in which needs for working capital increased further to the severe rise in the prices of raw materials.

The Group’s other activities were able, in general, to reduce their needs for working capital.

The solvency ratio (excluding renewable energy projects) is 34.6% (34.1% in 2006). The shareholder equity of the

Group is located at 131,232 k€ compared with 113,914 k€ en 2006, which is an increase of 15%.

The long-term financing went from 224,585 k€ in 2006 to 256,570 k€ in 2007. Excluding projects in renewable

energies, which went from 224,585 k€ to 235,395 k€, in spite of the reduction in the long/medium term debt,

which went from 95,480 k€ in 2006 to 89,024 k€ in 2007.

MANAGEMENT REPORT

1 Project development costs (costs not activated USA\Canada in wind power, bioethanol project in Portugal), research costs, restructuring

costs (Brazil) and provision for non recurrent bad debt expense (distribution of chemical products).


The reduction of this debt originates from the reduction in the leasing of 2,850 k€, further to the sale of the plots

of land in Póvoa in Portugal and the short-term reclassifying of the bonded debt of 10,492 k€, which will mature

in September 2008. The negotiations for its replacement are already under way.

In compliance with legal obligations, the Group advises that it is maintaining a contract for share liquidity with a

banking institution charged with its discretionary management. On the date of 31/12/07, the Group held 881 own

shares, acquired in respect of the decision of the General Assembly of 19/06/2007.

Developments in the first quarter of 2008

The agricultural and food processing sectors are experiencing a favourable cycle which should benefit our activities con-

nected with these sectors. In crop protection, growth in the market share is still possible in Spain and continuing the

improvement in the working capital remains the principal objective in Portugal. In crop nutrition, international growth will

be able to continue as the result of investments in commercial structures and developments of new products completed.

In agro commodities distribution, the year 2007 was completely exceptional, because all the factors were positive. The

first quarter is giving positive indications; however, the year 2008 should be normal for this sector.

In the logistics sector, business remains sustained at the beginning of 2008, which is the result of the new commercial

dynamics established by this subsidiary.

As regards the industrial chemical products and environment sector, the acquisition of the business of the competing

company should be concretized soon and will have a positive impact already in 2008. The SISAV project (environment)

will be able to start up in June 2008.

In wind energy, the construction of the Glacier Wind project, Montana, is in the start-up stage.

In photovoltaic energy in Spain, the construction of the first four projects totalling 29 MW is under way.

In order to finance these projects, the shareholders of Naturener contributed 180 M€ in the form of an increase of capital

in October 2007 and March 2008. Sapec S.A. obtained a medium-term bank loan in March 2008 to finance the Group’s

part of capital increase, for an amount of around 80 M€.

In this sector and as a shareholder of Naturener, Sapec is studying the various options for its strategy. These could lead to

the entrance of new partners, the disposal of our stakes or the sale of one or other branch of this sector.

The first quarter is developing in line with our prospects, however it is too early to make concrete.

MANAGEMENT REPORT


MANAGEMENT REPORT

Distribution of profits

The net profit of the company Sapec S.A. amounts to 3,550.5 k€.

The balance for distribution amounts to 23,552.9 k€.

The Board of Directors proposes the balance to be distributed as follow:

Dividends 3,697.4 k€

Directors emoluments 108.9 k€

Carried forward 19,746.6 k€

We will also propose to the meeting, by separate vote, to give a discharge to the Board Members for their management

and to the Auditor for his inspection assignment.

Appointments

We call your atttention that the mandates of Mr Eduardo Catroga, Mr Antoine Velge and Mr Philippe de Broqueville

will expire at the date of the general meeting of June 17, 2008.

These Board Members can be re-elected, and we propose that you renew their mandates for a duration of three years,

that is until the general meeting of 2011.


Annexe to the management report

Financial risk management

The management of financial risks is an integral part of the Group’s management.

The Board of Directors defines the financial policy and the Management Committee establishes the respective

objectives.

Within the scope of its operational activities, the Group is exposed to the risks of the market (exchange rates, raw

materials and interest rates), of credit and of payments. In keeping with the policies and objectives established, the

Group undertakes operations with financial derivative instruments exclusively within the framework of operational

transactions of assets, liabilities or of anticipated operations.

The market risks arise essentially from the exposure to monetary fluctuations, in particular vis-à-vis the American

dollar, the Brazilian réal and the Mexican peso, from the interest rates and from the prices of raw materials.

For certain raw materials connected with the business activity, the Group also uses instruments for covering

fluctuations of the various quotations.

Insofar as the risk of the raw materials is concerned, principally in the business activity, it arises basically from

movements on the world market connected with purchasing programmes of soy and cereal grains. The risk is

attenuated through appropriate actions on the various quotation markets. The covering of this risk is managed by the

concerned companies of the Group, through the adoption of appropriate covering instruments.

The interest rate risk arises from the cash flows connected with loans at variable interest. This type of risk is

controlled as much as possible through the use of derivative instruments, basically of the “options”, “FRA’s” and

“swaps” type.

The credit risk arises from the failure by third parties to meet their contractual undertakings arising from bailments

of availability, from the purchase of financial derivative instruments or from the portfolio of commercial loans.

The credit risk connected with the management of the availabilities or of the financial derivative instruments is

minimised by the choice of entities with a high financial rating.

The credit risk connected with commercial transactions is controlled by setting up systems for analysing the financial

capacities of the customers to which credit ceilings are assigned, and by subscribing to credit-insurance policies with

institutions with a high financial rating, any time it is possible or feasible.

The risk of a lack of liquidity, associated with the difficulties some companies in the Group have in satisfying their

financial obligations, is resolved by a Central Accounts Department which gives a guarantee to make the entries of

cash and the maturity dates of loans and other financial obligations coincide, and for the systematic and sustainable

maintenance of a certain volume of rapidly mobilisable liquid assets.

The management of the financing debts is done by the Central Accounts Department, in such a way that it does not

experience any difficulty in refinancing its operations.

MANAGEMENT REPORT


Environmental risks

The production and stocking sites of the Group, as well as the transport of the products, especially for the chemical

products, for the treatment of industrial residues and for the port activities, are exposed to the risks of environmental

contamination.

The Group systematically seeks to have the best technical solutions available for the installations/equipment, that is

for the handling, the storing and transport of the products.

Cumulatively, insurance policies are systematically taken out each time that this proves necessary and possible

(certain cases are not covered by the insurers or reinsurers), whether the contamination is accidental or progressive

(case of CITRI).

MANAGEMENT REPORT


CONSOLIDATED FIGURES

Consolidated figures



(in k€)

Notes Current Prior

year

1. Revenue 1;2 572,465 516,362

2. Other operating income 3 3,337 1,665

3. Operating expenses 4 -552,241 -502,824

5. Gain (loss) on disposal of non-current assets 13,986 1,801

7. Gain (loss) on investments 2,199 6,268

8. Gain (loss) on derivatives 440 -44

9. Net financial income 5 -10,974 -8,595

10.Share in the net income of the companies consolidated

by the equity method -109 0

14. Income taxes 6 6,728 4,258

(a)

1. Basic earnings per share 15.29 5.50

2. Diluted earnings per share 15.29 5.50

1. Exchange rate adjustments included in the income statement 582 34

2.Operating lease and sublease payments recognised in

the income statement1.567 1.011

(a) After taxes related with continuity activities.



(in k€)

ASSETS Notes Current Prior

year

1. Tangible assets 7 235,931 149,691

2. Investment property 8 1,344 1,345

3. Intangible assets 9 49,014 36,193

4. Financial assets 10 744 0

5. Deferred tax asset 11 5,829 3,426

6. Other non-current financial assets 12 424 371

7. Derivative financial instruments 0 75

9. Other non-current assets 13 11,570 0

11. Inventories 14 122,122 90,230

12. Other current financial assets 1,028 2,610

13. Derivative financial instruments 15 216 766

14. Tax receivables 400 485

15. Trade and other receivables 16 98,398 91,441

17. Cash and cash equivalents 17;20 38,707 26,649

18. Other current assets 4,867 1,943

Notes Current Prior

year

A. EQUITY 131,232 113,914

1. Capital 18 43,727 43,727

Issued capital 7,127 7,127

Share premiums 36,600 36,600

2. Consolidated reserves 87,595 70,266

3. Own shares 19 -90 -79

B. Minority interests 36,314 15,191

5. Long-term interest-bearing borrowings 20 88,576 94,999

6. Long-term non-interest-bearing borrowings 447 481

7. Deferred income 21 1,647 1,905

8. Long-term provisions 22 3,552 4,212

10. Deferred tax liabilities 11 6,968 6,486

11. Non-current trade and other payables 0 2,017

12. Other non-current liabilities 2,254 2,188

C

13. Short-term interest-bearing borrowings 20 220,095 98,300

14. Short-term non-interest-bearing borrowings 70 70

15. Deferred income 21 531 590

17. Derivative financial instruments 15 236 2,059

18. Income tax payable 9,294 4,198

19. Trade and other payables 23 59,825 48,752

20. Other current liabilities 9,552 9,860



The important impact in 2007 with the developpment of the renewable energy projects (wind farms in USA/Canada and

photovoltaic in Spain), at the consolidated balance sheet difficults the comparaison with 2006.

It seems usefull the presentation of the 2007 balance sheet, without the impact due to those projects and making pos-

sible this comparaison.

without projects USA/CAN and

solar

Conso

au

31.12.07

Conso

au

31.12.06

Variation

Dec07/

Dec06

31.12.07

(ajust)

31.12.06

(ajust)

Variation

Dec07/

Dec06

(ajust)

ASSETS A E

Assets 287,033 187,228 99,805 162,730 174,765 -12,036

Deferred tax assets 5,829 3,426 2,403 5,074 3,426 1,648

Other non-current assets 11,994 446 11,548 11,994 446 11,548

Trade and other receivables 98,398 91,441 6,957 92,103 88,584 3,519

Cash and cash equivalents 38,707 26,649 12,058 22,793 15,557 7,237

Other current assets 128,633 96,034 32,599 128,535 96,034 32,501

A. Equity 131,232 113,914 17,318 131,918 113,914 18,004

B. Minority interests 36,314 15,191 21,123 14,453 15,191 -739

A. Non-current liabilities 103,445 112,289 -8,844 100,506 112,289 -11,783

Long-term interest-bearing borrowings 88,576 94,999 -6,423 88,576 94,999 -6,423

Deferred tax liabilities 6,968 6,486 482 4,029 6,486 -2,457

Other non-current liabilities 7,901 10,804 -2,903 7,901 10,804 -2,903

B. Current liabilities 299,603 163,829 135,774 176,352 137,417 38,936

Short-term interest-bearing borrowings 220,095 98,300 121,794 99,116 74,745 24,371

Other current liabilities 79,508 65,528 13,980 77,236 62,671 14,565



(in k€)

Current Prior

year

1. Profit/loss for the year 22,375 10,376

2. Non-cash adjustments -3,396 3,972

Depreciation and amortization 11,273 11,587

Reductions in value 1,524 770

Profit(loss) on disposal of non-current assets -16,678 -8,070

Changes in provisions for investments 494 -

Share in the net income of the companies consolidated by the equity method 109 -

Changes in provisions -117 -316

3. Changes in working capital -27,403 -17,745

Changes in inventories -27,965 -3,859

Changes in trade and other receivables -8,559 -9,919

Changes in derivative financial instruments -1,198 -63

Changes in trade and other payables 10,749 -3,025

Changes in taxes liabilities 5,825 -839

Other changes in working capital -6,255 -41

1 . Acquisitions -130,389 -33,041

Payments made for the acquisition of non-current assets, (excluding financial assets)

(-)

-129,052 -33,041

Of wich: USA/CAD Project and Naturener Solar -108,410 -

Payments made for the acquisition of subsidiaries, associated companies or joint

ventures net of the cash acquired) (-) -1,337 -

2. Disposals 20,055 19,082

Entries from to the disposal of non-financial non-current assets 20,055 7,562

Entries from to the disposal of subsidiaries, associated companies or joint

ventures, (net of the disposed cash) - 11,520

3. Other cash flows related to investment operations - -1,549

Changes in capital of affiliated companies 18,420 -

(Acquisition) sale of own shares - -79

Dividends paid to the shareholders (-) -2,942 -2,931

Changes in long-term financial debt -6,456 9,468

Changes in short-terms financial debt 121,794 14,522



Capi

tal

0 0 0

Net profit for the period 7,448 7,448 2,928 10,376

Dividends -2,936 -2,936 -902 -3,838

Operations with own shares 4 -79 -75 -75

Other 1 1 -4,373 -4,372

0 0 -79

Net profit for the period 20,712 20,712 1,663 22,375

Dividends -2,942 -2,942 -2,942

Operations with own shares 11 -11 - -

Profit/loss on the conversion of foreign currencies - - -261 - - - -261 -165 -425

of which: appreciations in value (depreciations in value) of

revaluation of assets-261 -261 -165 -425

Increase of capital - 18,420 18,420

Other -191 -191 1,204 1,013

0

The weakening of the dollar is the main cause of the negative translation difference charged directly in equity.

The closing exchange rate of the dollar used by the Group went from 1.3170 at the end of 2006 to 1.4721 at the end

of 2007.

At the end of 2007 there were no transactions on own shares. The change recorded relates to the valuation of the quot-

ing of the shares on the market.

The item “Capital Increase” includes the impact of Naturener, SA capital increase (21 million €) and of Tharsis capital

reduction (2.5 million €).

«Other» contains the impact of the recognition of the minorities in the wind farm and photovoltaic energy projects.



The main accounting policies adopted to prepare the consolidated accounts are set as follows:

The consolidated accounts have been prepared in accordance with the international accounting standards (IFRSInternational

Financial Reporting Standards) and with the interpretations published by the interpretation committee of the IASB, as they

apply on the reporting date.

Furthermore, the financial statements include all the information required by the 7th directive of the European Union.

The IFRS were adopted for the first time for the consolidated accounts of the 2005 financial year. The 2004 accounts have

been restated to allow comparison.

For the financial year, the Group adopted the rules that came into effect in 2007 (IFRS 7). The application of this new rule provoked

the publication of additional information about the financial instruments.

The Group decided no to apply any rule before the date of it coming into force.

The companies controlled by the Group (control is understood to mean the power to influence the financial and operational

policies of a company in order to obtain benefits from its activities) are consolidated according to the global integration

method.

All of the intra-group balances and transactions are eliminated.

The companies over which the Group exercises with a limited number of associates a joint control (joint control is understood

to mean the sharing via a contractual agreement of the control of an economic activity), are consolidated according to the

proportional integration method.

Holdings in companies in which the Group exercises a notable influence (notable influence is understood to mean the power

to participate in the decisions relating to the financial and operational policy of the company held, without however exercising

control over these policies) are accounted for using the equity method.

Currency operations are converted into euro at the transaction rate. At the end of the period, the monetary elements

are converted at the closing rate as well as the non monetary elements that are the subject of specific hedging. The

resulting exchange adjustments are entered in the income statement.

Non monetary assets and liabilities valued at historical cost and registered in foreign currencies are converted at

the rate of exchange in force on the date of the transaction. The resulting differences in conversion are recorded in

shareholder’s equity accounts under a specific heading (differences in conversion).

Within the framework of the consolidation, the assets and liabilities of the foreign entities are converted in to euro at

the closing rate. The results are converted into euro at the average rate of the period.

The goodwill represents the difference between the acquisition cost and the Group’s share in the fair value of the identifiable

assets and liabilities of a subsidiary, associate, or a joint venture, on the acquisition date.

The goodwill is not depreciated but is the subject of an annual depreciation test (impairment test), which is carried out

more frequently if there is some indication of impairment losses.

Any impairment losses of the goodwill are presented in the income statement and can be the subject of recoveries.

In the event of a surplus in the acquirer’s share of interests in the fair value of the assets, liabilities and contingent

liabilities acquired compared with the cost, this surplus is immediately recognised in the income statement of the

acquisition period.



The intangible assets are recognised at their acquisition value, less the accumulated depreciations and any depreciations in value.

They are recognised if it is probable that future economic benefits arising from the asset will go to the company and if the cost of

this asset can be reliably measured.

The intangible fixed assets are amortised on a straight-line basis over their estimated useful lives. The estimated useful lives are as

follows:

- Licences, patents and similar rights: 15 years

- IT software: 3 years

- Concessions: the contractual duration.

The research costs are charged to the period during which they were incurred.

The development costs are activities if and only if all the conditions set out below are fulfilled:

proven) ;

The development costs activated are amortised on a straight-line basis over their useful lives.

The tangible assets are recognised in the balance sheet at their historical value less accumulated depreciations and

impairment losses.

The subsequent expenditure relating to tangible fixed assets are only entered as an asset if it can be clearly demon-

strated that this leads to an increase in the future economic benefits expected from the use of the tangible fixed asset.

Borrowing costs directly attributable to the acquisition or production of an asset are added to the cost of this asset until is ready for

use if the amount of the investment is higher than 2,5 mio€ or if the construction/production period is higher than one year.

The depreciations relate to the estimated useful life of the various categories of the tangible fixed assets on a straight-line basis.

The estimated useful lives are as follows:

1. Constructions : Industrial

Commercial

Administrative

20 years

50 years

33 à 50 years

2. Equipment 3 to 10 years depending on type

3. Installations – fittings 10 to 15 years depending on use

4. Transport equipment from 4 to 6 years depending on

type

5. Furniture – Office from 3 to 10 years

6. IT Equipment 4 years

7. Constructions, Installations, Equipment on Concessions The duration of the concession, if

this duration is less than the initial

useful life.

The fittings made to the rented constructions are capitalised and depreciated over the residual duration of the lease or over

the useful life if the latter is lower.

When the carrying amount of an asset is higher than its estimated recoverable value, a reduction in value relating to this dif-

ference is directly recognised as reduction of.



The assets held as finance leases (finance leases are understood to mean leases whose aim is to transfer to the lessee almost

all of the risks and benefits inherent to the ownership of an asset, with ownership being transferred or otherwise at the expiry

of the lease) are recorded in the balance sheet at their fair value or at the present value of the minimum payments linked to

the leases if lower.

The corresponding obligation is recognised in the financial liabilities. The finance costs, which represent the difference

between all of the lease obligations and the fair value of the assets, are entered into the income statement over the duration

of the lease.

Subsidies relating to the purchases of tangible fixed assets are recognised in the « deferred income » item of the balance

sheet.

The subsidy is charged as a income at the same rate as the depreciation of the fixed assets to which it relates.

The inventories are measured at the lower of cost (commodities and merchandise) or cost price (goods in progress and finished

products) and net realisable value. The value of the inventories is generally determined by applying the weighted average cost

method.

In view of the specific nature of the trading activities, the stocks in this sector are measured at their fair value on the reporting date,

less the marketing costs yet to be committed.

The costs of the stocks include the acquisition, processing and other costs incurred to transport the stocks to the place and in the

condition in which they are found. The processing costs of the stocks include the costs directly linked to the units produced, such

as direct labour. They also include the systematic affectation of the general fixed and variable productions costs that are incurred to

transform the commodities into end products. The fixed production overheads are the indirect production costs that remain relatively

constant independently of the volume of production, such as depreciation and the maintenance of the buildings and of the industrial

equipment and the management and administration costs of the factory. The variable production costs are the indirect production

costs that vary directly or almost directly according to the production volume such as indirect commodities and indirect labour.

Trade receivables are measured at their nominal value, less the non recoverable estimated amounts.

The group makes a distinction between two categories of financial assets – short-term investments: the assets held until maturity

and the assets available for sale.

The assets held until maturity are non-derived financial assets that have fixed or defined payments, a fixed maturity date and that

the company has the express intention and the means of holding until maturity date, other being than those designated as assets

available for sale and those defined as loans and accounts receivable.

The assets available for sale are non designated as available for sale not categorised in any other category of financial assets.

The assets held until their maturity are recognised initially at their fair value which is normally the transaction price.

On each closing date, these assets are recognised at their depreciated cost according to the effective interest rate method. They are,

moreover subject to the impairment test.

At their initial recognition, these assets are recognised at the fair value which is normally the transaction price.

On each closing date, these assets are recognised at their fair value unless they are equity instruments not listed on an active market

and whose fair value cannot be estimated in a reliable manner. These instruments are then measured at cost.



The variations in fair value are recognised directly in equity capital and if applicable, the income from interest that includes

the actuarial depreciation of the premiums and depreciations, remain recognised in the result.

The assets available for sale are subject to impairment testing on each closing date. The eventual depreciation resulting

from it is recognised in the income statement. If these are shares that are classified among the assets available for sale,

any reduction in the fair value stated on closing dates following depreciation is recognised in the income statement. Any

subsequent appreciation of the fair value is not entered into the income statement. If these are debt instruments classified

among the assets available for sale, any subsequent appreciation of the fair value is recognised in the income statement

up to the previously recognised depreciation.

Cash and cash equivalents include cash on hand and demand deposits, the short term investments and highly liquid invest-

ments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value.

They are recognised in the balance sheet at their nominal value.

The group uses derivative financial instruments mainly in order to reduce the risks linked to the unfavourable fluctuations

in interest rates, exchange rates and commodity prices. The group does not hold and does not issue derivative financial

instruments for commercial or speculative purposes.

The derivative financial instruments are measured at the fair vale. The recognition of non realised losses or profits depends

on the nature of the element covered.

When the derivative financial instrument is considered to hedge the exposure to the cash flow variations which (i) is attributable

to a specific risk linked to a recognised asset or liability (for example to all or part of the future interest payments on a variable rate

liability) or a highly probable foreseen transaction and (ii) could affect the result, the share of the profit or of the loss on the hedging

instrument that is considered to provide effective hedging must be directly recognised in equity capital, via the equity capital vari-

ation table. The ineffective share of the profit or of the loss on the hedging instrument must be recognised in the result. When the

derivative financial instrument is considered to hedge exposure to the variations in the fair value of a recognised asset or liability or a

firm non recognised commitment, or an identified share of this asset, of this liability or this firm commitment, which is attributable to

a specific risk and which can affect the result, the profit or the loss resulting from the restatement of the hedging instrument at the

fair value must be recognised in the result.

The profit or the loss on the element hedged attributable to the hedged risk must adjust the carrying amount of the

hedged element and be recognised in the result, even when the hedged element is furthermore measured at cost or is

a financial asset available for sale.

If the hedging accounting conditions are not met, the variations in the fair value of the derivative financial instruments are

recognised in the income statement.

A provision is constituted when the Group has a legal or implicit obligation, on the balance sheet date:

The commitments arising from restructuring companies are recognised if a formalised and detailed restructuring plan has

been drawn up and if such restructuring has started or has been announced to the persons concerned.

In accordance with IAS 36, on each closing date, if there is any indication that an asset has lost value and if the recover-

able value of this asset is lower than its carrying amount, an impairment loss is recognised in the charges of the income

statement unless another international standard disposes otherwise.



The income taxes for the period cover the current taxes and the deferred taxes. They are charged to the income statement unless

they relate to elements recorded directly in equity capital, in which case they are recognised in the equity capital.

The current taxes refer to the taxes to be paid on the profit for the period, calculated at the rate in force and the adjustments relating

to prior years.

The deferred tax assets and liabilities must be measured at the tax rates whose application is expected over the period during which

the asset will be realised or the liability settled, on the basis of the tax rates (and the tax regulations) that have been adopted or almost

adopted on the closing date.

The deferred tax assets are only recorded when it is probable that taxable profits will be realised to which the deferred tax assets

can be imputed.

Supplementary taxes on the profit arising from the distribution of dividends are recognised at the same time as the obligation to pay

the corresponding dividend.

The business unit information is drawn up according to the business units of activity of the Group (1st level segmentation) and the

large geographical regions (2nd level segmentation).

The business units of activity are: crop protection, crop nutrition, industrial chemicals and environment, agro commodities distribu-

tion, logistics and energy.

The geographical regions are: Portugal, Spain and export.

An revenue is recognised when it is probable that it will be acquired and its amount can be reliably measured.

The turnover is constituted by the sales to third parties, less the commercial deductions. It is registered in the income statement

when the significant risks and benefits inherent to the ownership of the goods are transferred to the buyer.

The dividends are recorded in the income statement when the right of the shareholder to receive the payment is established.

The income from interest is recognized in the income statement prorata temporis, in view of the effective interest rate of the

investment.

The contingent assets are not recognised but are presented in the disclosures if the economic benefit is probable.

The contingent liabilities are not recognised but presented in the disclosures.

The own shares are recorded as reduction of the equity capital. No profit or loss must be recognised in the result in the event of the

purchase, sale, issue or cancellation of these treasury shares. These profits or losses must be presented in the financial statements

as a variation in the consolidated equity capital.

The dividends are recognised in the liabilities for the period during which they are declared.

Certain of the group’s companies grant their personnel defined retirement benefits. For these companies, a pension fund has been

set up to guarantee the future pensions to the beneficiaries.

This responsibility of these companies is restated annually by the insurance company that manages the fund. If it looks that the

capitalisation is insufficient, the companies concerned are obliged to make contributions to top up the pension fund and these

amounts are charged to the income statement.



Capital

Brazil

TRADECORP DO BRASIL COM. INS. AGRIC. Ltda São Paulo 99.99% BRL 255,132

Spain

SEPORSUR ,S.A.U. Cadiz 99.99% EUR 1,659,000

GRUPO COMPANIA DE AZUFRE Y COBRE DE THARSIS, S.A. Madrid 95.60% EUR 18,782,666

INTERPEC IBÉRICA, S.A. Madrid 99.99% EUR 6,010,000

INTERAGREISA, S.A.U. Madrid 99.99% EUR 300,000

GRUPO NATURENER, S.A. Madrid 56.03% EUR 72,217,000

NATURENER HYDRO, S.L.U. (1) Madrid 56.03% EUR 14,504,000

NATURENER SOLAR, S.A.U. Madrid 56.03% EUR 70,000

TRADE CORPORATION INTERNATIONAL, S.A. Madrid 99.99% EUR 7,700,000

NATURENER SOLAR TINAJEROS, S.L.U. Madrid 56.03% EUR 4,269,000

NATURENER SOLAR ALANGE, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR FUERTEVENTURA, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR GRAN CANARIA, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR LANZAROTE, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR TENERIFE, S.L.U. Madrid 56.03% EUR 3,010

CORPLENER DE CIUDAD REAL, S.L.U. Madrid 56.03% EUR 3,006

SOLARGEN PROYECTOS E INSTALACIONES SOLARES, S.L. Madrid 47.63% EUR 3,010

GUADALTA, S.A.U. Madrid 42.08% EUR 3,655,356

MORALES RENOVABLES, S.L.U. Madrid 42.08% EUR 61,303

ALMURADIEL SOLAR, S.L.U. Madrid 42.08% EUR 144,243

SAPEC AGRO, SA Réus 99.99% EUR 2,510,978

SEPORTA, S.A. Tarragona 89.99% EUR 1,550,000

France

SAS TRADECORP FRANCE Paris 99.99% EUR 37,000

Italy

TRADECORP ITALIA SRL Milan 99.99% EUR 10,000

Mexico

NEVADA CHEMICALS SA DE CV Guadalajara 99.99% MXN 919,000

Portugal

SAPEC AGRO, S.A. Lisboa 99.99% EUR 9,494,670

SAPEC PORTUGAL SGPS, S.A.(2) Lisboa 99.99% EUR 35,446,825

SAPEC QUIMICA, S.A. Lisboa 99.99% EUR 3,415,000

SETEIA, Lda Lisboa 99.99% EUR 1,150,000

CITRI, S.A. Setúbal 99.99% EUR 3,600,000

SPI, SA Setúbal 99.99% EUR 8,500,000

SELECTIS, S.A Setúbal 99.99% EUR 950,000

STP, S.A. Setúbal 99.99% EUR 4,182,500

SPC, S.A. Vila Franca de Xira 99.99% EUR 9,000,000

United Kingdom

IBERIA PCC Ltd Guernesey 100% EUR 248,000

U.S.A

TRAMONTANA USA LLC Delaware 56.03% USD 3,500,000

NATURENER USA LLC Delaware 56.03% USD 1,500,000

GPWE LLC Montana 56.03% -

NATURENER MCCORMICK ENERGY LLC Montana 56.03% -

NATURENER RIM ROCK I ENERGY LLC Montana 56.03% -

NATURENER RIM ROCK II ENERGY LLC Montana 56.03% -

SCOTTSBLUFF WIND PARK LLC Montana 56.03% -

NATURENER ADEL ENERGY LLC Montana 56.03% -

SIROCCO WIND PARK LLC Montana 56.03% -



Capital

Canada

TRAMONTANA CANADA INC British Columbia 56.03% CAD 9,240,000

NATURENER ENERGY CANADA INC Alberta 56.03% CAD 7,000,000

NATURENER WEST RALEY ENERGY INC Alberta 28.58% -

NATURENER PRAIRE HOME ENERGY INC Alberta 36.81% -

CASTLE ROCK RIDGE WIND ENERGY INC Alberta 56.03% -

NATURENER WESTFIELD ENERGY INC Alberta 39.61% -

YAGOS WIND ENERGY INC Alberta 34.18% -

NATURENER SOUTHRIDGE ENERGY INC Alberta 56.03% -

NATURENER WILD ROSE I ENERGY INC Alberta 56.03% CAD 200

NATURENER WILD ROSE II ENERGY INC Alberta 56.03% -

NATURENER WILD ROSE III ENERGY INC Alberta 56.03% -

NATURENER EAST PALLISER ENERGY INC Alberta 56.03% -

ENERGY LOGICS USA INC Delaware 56.03% -

Capital

Portugal

NAVIPOR, Lda Setúbal 49.99% EUR 1,375,000

Spain

NUENEX GESTIÓN DE ENERGÍA, S.L. Madrid 24.65% EUR 100,000

NEW ENERGY GENERATION, S.A. Madrid 26.22% EUR 600,000

ESTIVADORA GADITANA, UTE Cadiz 49.99% EUR 100,000

Capital

Portugal

SISAV, SA Lisboa 34.13% EUR 2 500 000

Capital

Entrée dans le périmètre

NATURENER SOLAR, S.A.U. Madrid 56.03% EUR 70,000

NATURENER SOLAR TINAJEROS, S.L.U. Madrid 56.03% EUR 4,269,000

NATURENER SOLAR ALANGE, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR FUERTEVENTURA, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR GRAN CANARIA, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR LANZAROTE, S.L.U. Madrid 56.03% EUR 3,010

NATURENER SOLAR TENERIFE, S.L.U. Madrid 56.03% EUR 3,010

CORPLENER DE CIUDAD REAL, S.L.U. Madrid 56.03% EUR 3,006

SOLARGEN PROYECTOS E INSTALACIONES SOLARES, S.L. Madrid 47.63% EUR 3,010

GUADALTA, S.A.U. Madrid 42.08% EUR 3,655,356

MORALES RENOVABLES, S.L.U. Madrid 42.08% EUR 61,303

ALMURADIEL SOLAR, S.L.U. Madrid 42.08% EUR 144,243

INTERAGREISA, S.A.U. Madrid 99.90% EUR 300,000

ESTIVADORA GADITANA, UTE Cadiz 49.99% EUR 100,000

SISAV, SA Lisboa 34.13% EUR 2,500,000

NATURENER WILD ROSE I ENERGY INC Alberta 56.03% CAD 200

NATURENER WILD ROSE II ENERGY INC Alberta 56.03%

NATURENER WILD ROSE III ENERGY INC Alberta 56.03%

NATURENER EAST PALLISER ENERGY INC Alberta 56.03%

(1) Naturener Hydro, S.L.U. was created by contribution of the hydraulic activity of the company Naturener, S.A. (which changed its name for

Grupo Natunerer, S.A.)

(2) The company Horticrop, Lda. was merged with Sapec Portugal SGPS, S.A. in January 2007.



The following disclosures refer to the figures given in the summarised consolidated accounts and are drawn up in k€

(thousands €), unless otherwise indicated.

2007

Cro

p p

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Cro

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l che

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dis

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2)

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ion

s

Con

solid

ated

Revenue

- External sales 66,620 27,449 34,427 15,127 417,680 10,648 514 - 572,465

- Internal sales - - 2,331 409 - - - -2,740 -

EBITDA 7,057 2,908 3,482 17,596 19,405 7,441 -6,689 -179 51,020

of which: recurrent 7,321 3,396 3,482 3,646 19,411 5,289 -6,615 -1,096 34,834

Depreciation and amortization expenses 2,369 996 1,707 2,053 1,436 2,391 320 - 11,273

EBIT 4,688 1,910 1,775 15,545 17,967 5,057 -7,009 -186 39,747


Financial results -2,703 -1,387 -586 -1,473 -3,993 -467 76 - -10,534

EBT 1,985 522 1,180 14,070 13,975 4,582 -7,142 -69 29,104

of which: recurrent 2,249 1,010 1,180 127 13,969 2,434 -7,068 -874 13,028

Cash flow (before tax) 4,354 1,518 2,887 16,123 15,411 6,973 -6,822 -69 40,376

of which: recurrent 4,618 2,006 2,887 2,180 15,405 4,825 -6,748 -982 24,192

Total assets 85,710 43,226 33,636 53,347 138,730 206,424 141,223 -131,732 570,594

Total liabilities 68,225 40,347 27,468 26,892 108,302 120,857 142,659 -131,732 403,048

Operational working capital(1) 48,400 15,778 10,762 1,827 78,539 -2,400 3,967 - 156,874

Fixed assets 18,518 12,751 14,926 28,954 20,076 176,998 15,234 - 287,457

Cro

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2)

Elim

inat

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s

Con

solid

ated

Revenue

- External sales 60,647 22,328 32,870 12,247 373,485 9,565 5,221 - 516,362

- Internal sales 44 - 1,720 352 - - 329 -2,445 -

EBITDA 6,437 1,413 4,255 2,127 9,865 11,108 761 -1,106 34,860


Depreciation and amortization expenses 1,951 1,014 2,001 2,696 1,328 2,011 586 - 11,587

EBIT 4,485 399 2,254 -569 8,536 9,097 175 -1,104 23,273

of which: recurrent 4,430 399 2,281 -569 8,536 3,942 -2,731 -1,085 15,203

Financial results -2,263 -863 -413 -1,040 -2,932 -1,318 25 165 -8,639

EBT 2,222 -464 1,841 -1,609 5,604 7,779 200 -939 14,634

of which: recurrent 2,167 -464 1,868 -1,609 5,604 2,624 -2,706 -920 6,564

Cash flow (before tax) 4,173 550 3,842 1,087 6,932 9,790 786 - 26,221

of which: recurrent 4,118 550 3,869 1,087 6,932 4,635 -2,120 -920 18,151

Total assets 50,341 33,700 32,661 50,341 92,393 91,886 100,851 -46,949 405,224

Total liabilities 57,236 30,829 26,199 35,363 69,739 61,340 42,361 -46,949 276,118

Operational working capital(1) 39,285 13,879 12,159 1,962 59,238 -800 4,876 - 130,599

Fixed assets 15,632 11,392 14,296 43,734 15,078 70,309 17,159 - 187,599

(1) Includes the trade receivables, inventories and trade payables

(2) contains: “ holdings”, “real estate” and “consolidation adjustments”



2007 Portugal Spain Consolidated

Revenue

- External sales 129,006 438,042 5,417 0 - 572,465

- Internal sales 25,356 5,179 0 2,009 -32,544 -

EBITDA 25,786 29,497 -70 -6,131 1,938 51,020

of which: recurrent 11,696 26,813 -70 -5,543 1,938 34,834

Depreciation and amortization expenses 5,790 5,282 89 112 - 11,273

EBIT 19,996 24,216 -159 -6,242 1,938 39,747

of which: recurrent 5,906 21,531 -159 -5,654 1,938 23,562

Financial results -5,494 -7,104 345 1,719 - -10,534

EBT 15,739 18,619 186 -4,646 -794 29,104

of which: recurrent 1,649 15,934 186 -4,057 684 13,028

Cash flow (before tax) 21,528 23,901 275 -4,534 -794 40,376

of which: recurrent 7,439 21,216 275 -3,944 -794 24,192

Total assets 151,665 279,759 5,643 253,964 -120,436 570,594

Fixed assets 58,956 134,639 330 93,532 - 287,457

Portugal Spain Consolidated

Revenue

- External sales 91,633 420,291 3,653 785 - 516,362

- Internal sales 20,622 2,494 - 210 -23,326 -

EBITDA 11,937 23,363 -229 -211 - 34,860

of which: recurrent 8,923 18,418 -236 -315 - 26,790

Depreciation and amortization expenses 6,499 4,984 89 15 - 11,587

EBIT 5,438 18,379 -319 -225 - 23,273

of which: recurrent 2,423 13,434 -326 -328 - 15,203

Financial results -4,091 -5,322 -276 1,050 - -8,639

EBT 1,346 13,057 -594 825 - 14,634

of which: recurrent -1,668 8,112 -602 722 - 6,564

Cash flow (before tax) 7,846 18,040 -505 840 - 26,221

of which: recurrent 4,831 13,096 -512 736 - 18,151

Total assets 182,028 223,416 36,325 75,065 -111,610 405,224

Fixed assets 80,634 90,473 15,985 507 - 187,599

(1) contains : « holding », « consolidation adjustments » and «wind farm».



Current Prior

year

Sales of goods 544,245 495,444

Services rendered 27,368 20,248

Rental income 853 670

Current Prior

year

Government grants 258 280

Fixed assets produced for own use 578 24

Adjustments of previous periods 141 12

Profit from contractual penalties 125 228

Miscellaneous income 2,236 1,121

Current Prior

year

Cost of raw materials, supplies and goods pruchased for resale 478,895 417,775

Changes in inventory -28,241 -1,375

Employee benefits expenses 30,001 26,048

of which:

- remunerations 22,944 19,788

- short-term employees benefits (including social security) 4,699 4 071

- other expenses 2,357 2,186

Depreciation and amortization 11,273 11,587

Reductions in value (net of recoveries) 1,524 770

Other operating expenses 58,789 48,019

Current Prior

year

Reduction in value on bad debts 1,698 946

Recoveries of bad debts provisions (-) -174 -208

Reductions in value on inventories - 32

770

Current Prior

year

Services and other goods 56,050 46,405

Fiscal charges 1,812 1,534

Provisions for liabilities and charges (net of recoveries) -117 -316

Penalities 53 66

Miscellaneous charges 991 330



Current Prior

year

Charges of the debts net of the income from current assets(1) 10,307 7,262

Losses (profits) in foreign exchanges -582 -34

Other financial losses (2) (profits) 1,249 1,368

(1) Charges of debts (by type of debt):

Bonds 1,186 1,186

Commercial paper 1,992 951

Finance lease obligations 1,567 1,011

Credit institutions 7,274 4,616

Factoring 536 486

Others loans 157 73

Sub-total 12,711 8,323

Interests income (-) -2,405 -1,061

Total

(2) of which:

- charges of discounts on accounts receivable 302 399

- miscellaneous (commissions, bank charges, charges with factoring/conforming, etc) 947 968

Total

Current Prior

year

Current taxes related to current year 8,427 4,522

Current taxes related to prior years -82 482

Deferred taxes -1,616 -746

Tangible assets -67 -75

Goodwill and intangible assets 99 172

Inventories, accounts receivables, accounts payables and provisions -416 -9

Tax losses -1,296 -736

Others 63 -98

Earnings before taxes 29,104 14,634

Applicable tax rate 33,99% 33,99%

Tax charge based on the applicable tax rate 9,892 4,974

Tax effect of tax rates in the other jurisdictions -313 -148

Tax effect of tax exempt revenues -3,376 -1,390

Tax effect of the non-deductible expenses 829 918

Tax effect of the tax losses recovered (used) - -578

Tax effect of the changes on tax rates 24 -

Tax effect of current tax adjustment related to prior years -82 482

Other increase (decrease) -246 -

The effective tax rate of the Group (23.12%) is lower than the nominal rate, mainly due to the partial exemption/reduc-

tion of the rate of the added values.



Lan

d a

nd

bu

ildin

gs

Pla

nt,

mach

inery

an

d e

qu

ipm

en

t

Fu

rnitu

re a

nd

roll-

ing s

tock

Oth

er

tan

gib

le

ass

ets

Con

stru

ction

in

pro

gre

ss a

nd

ad

van

ce p

aym

en

ts

Tota

l

At the end of prior year 87,455 99,304 18,206 1,461 9,970 216,396

Changes of the period:

- Investments 2,659 9,384 2,194 197 104,231 118,665

- Disposals and decommissionings -16,896 -2,829 -1,373 -78 - -21,176

- Transfers -1,802 881 57 33 -3,163 -3,994

At the end of prior year 71,416 106,740 19,085 1,613 111,038 309,891

At the end of prior year 18,373 35,585 11,821 926 66,705

Changes of the period :

- Charge for the year 2,999 5,848 1,808 142 10,797

- Cancellation of depreciations on disposals -1,735 -613 -1,175 -7 -3,530

- Transfers -133 175 -31 -23 -12

At the end of the year 19,504 40,994 12,423 1,038 73,960

the principal acquisitions/disposals are as follows:

COMPANIES BOOK COST

- wind farm (in development) - Nature.USA/CAN 75,515

- photovoltaic energy plant (in development) - Nature. solaire 21,847

- port quays - Seporsur 4,500

- port quays - Seporta 3,778

- installations - Agro 2,626

- sorting installations - CITRI 1,928

- logistics platform - SPC 15,393



Lan

d a

nd

bu

ildin

gs

Pla

nt,

mach

inery

an

d e

qu

ipm

en

t

Fu

rnitu

re a

nd

rolli

ng s

tock

Tota

l

Net carrying amount of finance leases included in tangi-

ble assets15,697 21,004 2,691 39,391

Gross value of totally depreciated tangible assets in use 5,296 7,116 6,297 18,709

Value of tangible assets uses as collectible guarantee for

loans and mortgages- 34,447 - 34,447

Land

Oth

er

inve

stm

ent

build

ings

Tota

l at

his

torical

cost

At the end of prior year 1,305 54 1,359


- Investments - - -

- Disposals and decommissionings - - -

At the end of the year 1,305 54 1,359

At the end of prior year - 14 14


- Charge for the year - 1 1

At the end of the year -

(1) The investment properties are recognised at historical cost.



Con

cess

ion

s,

licen

ces,

tra

de

mark

s, e

tc.

Good

will

(1

)

Oth

er

inta

ngib

le

ass

ets

Tota

l

At the end of prior year 13,078 15,321 13,257 41,656


- Investments (2) 309 804 11,375 12,488

- Disposals and decommissionings -112 -112

- Transfers - -2 939 2 939 -

- Other changes 834 834

At the end of the year 13,275 13,186 28,405 54,866

At the end of prior year 5,463 - - 5,463

Changes of the period: - -

- Charge for the year 466 - - 466

-Transfers - - - -

- Disposals and retirements -89 - - -89

- Transfers 12 - - 12

At the end of the year 5,852 - - 5,852

(1) the value of the “goodwill” corresponds to the over-prices paid at the time of the acquisition of certain financial investments interests, for which the

details are as follows:

Sapec Portugal SGPS, S.A. 651

Naturener, S.A. 1,512

Sapec Química, S.A. 408

Sapec Agro, S.A. (E) 2,936

Tradecorp, S.A. 5,115

Citri 1,760

Tharsis 804

For the investments acquired until December 31, 2003 the value of goodwill is the registered at the end of these year, followings the Belgium rules; in accordance

with these, the value of goodwill was subject to amortization over the greater of useful life or 20 years.

In accordance with IFRS standards, goodwill is no longer subject to amortization: its value is now periodically subject to an « impairment test », or whenever any

occurrence may suppose the possibility of a loss in value.

Test of the goodwill value did not give rise to any adjustment in 2007. In order to carry out these tests, the Group prepared cash flow forecast based on the latest

financial forecasts. The cash flow forecast were discounted at a rate approximate to the Group WACC (weighted average cost of capital) to calculate the fair value

of the cash generating unit.

In 2007, the variation of the goodwill arose from:

Tharsis (reduction of the capital further to the purchase of own

shares)

804

Tramontana (USA/Canada) -2,939

(2) The investment in “other intangible assets” concerns development costs with EDDHA (815 k€) and with the Photovoltaic Energy Plants.



Su

bsi

dia

ries

Ass

ocia

ted

com

pan

ies

Join

t ve

ntu

res

Com

pan

ies

con

-

solid

ate

d b

y th

e

eq

uity

meth

od

Tota

l

- - - - -

Gross carrying amount - - - - -

Cumulated losses of value (-) - - - - -

- - - - -

Investments - - - 853 853

Share in the net profits and losses -109 -109

744 744

Gross Carrying Amount 853 853

Cumulated losses of value (-) -109 -109

Current Prior

year

Tangible assets 349 478

Intangible assets 440 365

Inventories, accounts receivables, suppliers and provisions 880 909

Tax losses 2,877 1,453

Others 1,283 221

Tangible assets 1,330 1,238

Intangible assets 3,233 3,246

Others 2,405 2,002

Deferred tax assets and/or liabilities are registered in the accounts as temporary differences deriving from the fact the fiscal authorities evaluate assets and

liabilities differently from the standards used for the preparation of consolidated accounts. The changes in deferred taxes accounted for during the year

are registered in the profit and loss account, unless these relate to items directly booked to shareholders funds.



Sh

are

s

Secu

rities

oth

er

than

sh

are

s

Loan

s

Oth

er

fin

an

cia

l

ass

ets

Tota

l

At the end of prior year 244 - 127 - 371

- Changes of period:

- Investments 53 - - - 53

- Disposals and decommissionings - - - - -

At the end of the year 297 - 127 - 424

0 - - - -

At the end of prior year - - - - -

Changes of period: - - - - -

- Reduction in value - - - - -

- Losses in value - - - - -

- Recoveries of losses in value - - - - -

At the end of the year

244 - -

297 424

At end of 2007, this heading related to securities with no significant value; consequently, these were not consolidated nor placed in equivalence.The fair value of the securities corresponds to the book value of these shares.

In 2007, the other non-current assets represent the amount to be received from the sale of Logistics platform at Póvoa

Sta Iria. The book value is the fair value of the claim at the date of the balance sheet.

Current Prior

year

Raw materials and supplies 13,009 10,193

Work-in-process 12 26

Finished goods 18,609 15,601

Goods purchased for resale 81,280 59,125

Property intended for sale 9,212 5,285

Total



Within the framework of its operational activities, the Group is exposed to risks from exchange rates, interest rates and

prices of raw materials (see annexe to the Management Report – Financial risk management). In order to cover against

these risks, the Group uses selected derivatives. However, the required criteria to apply hedging accounting according to

the IFRS standards are not met, and the impact of these operations was directly registered on income statement.

For certain positions in raw materials connected with the trading activity, the Group used instruments (especially futures

and swaps) to reduce the risk of price fluctuations.

In December 2007, the Group maintained open positions (buy and sell commitments), futures and options on raw

materials and freights contracts for 737.3 million € (290.2 million € in 2006).

The adopted policy for covering exchange rate risks includes systematically covering of the risk of transactional exchange

rates and monitoring the possible covering of exchange rate positions generated by the activities on the basis of the

expected flows. The Group does not specifically cover the exchange rate risk connected with the profits and losses of

subsidiaries whose operating currency is not the EUR.

Concerning the management of the transactional exchange risk (buying or selling by a company in the Group in a cur-

rency other than its functional currency), the Group’s exposure essentialy linked to the EUR/USD risk.

In 2007, the Group is coveried at a limit of 100.6 million USD (14.8 million USD in 2006).

The derivatives that are used to cover the exchange rate risks are forwards and options. The open positions in options at

the end of December 2007 were as following:

The management of the interest rate risk is carried out centrally at Group level and the amount of the existing cover at

the end of 2007 was not significant.

At december 31, a limit around 34 millions EUR ( 35 million EUR in 2006) of the Group’s debt was fixed rate interest.

For the sensivity analysis, an increase (decrease) of 1% on the interest rate would be expressed in an increase (decrease)

of charges of 1.6 million EUR (0.99 million EUR in 2006).



Prior year

Fair value Contratctual

or notional

amounts

Fair value Notional or

contractual

amount

Interest rate derivatives:

- Futurs and swaps 284 57,500

Foreign exchange contracts:

- options _ euro / dollar 216 61,137 557 12,650

Interest rate derivatives:

- Futurs and swaps 119 50,000 1,661 90,000

Foreign exchange contracts:

- euro / dollar 91 4,002 235 7,541

- options _ euro / dollar 26 4,750 163 6,000

Derivative financial instruments - assets:

- Maturity in en 2007 766 35,150

- Maturity in en 2008 216 61,137 75 35,000

Derivative financial instruments - liabilities:

- Maturity in en 2007 2,059 103,541

- Maturity in en 2008 236 58,752

Current Prior

year

Trade receivables 78,841 74,500

Other receivables 19,557 16,941

Total

In 2007, trade receivables represents 50 days of sales (53 in 2006) and its book value reflects the fair value at closing

date balance sheet.

The Group’s exposure to credit risk is controlled by a very rigid policy of credit concession and by taking out credit insur-

ance policies in agreement with the established in the “Financial risk management”.



Current Prior

year

Not due 45,741 46,399

up to 30 days 21,616 15,573

up to 90 days 8,625 8,542

up to 180 days 2,179 1,421

beyond 180 days 6,368 8,592

84,529 80,527

reductions of value - 5,688 - 6,027

Total

Current Prior

year

Cash at bank and on hand 14,888 13,794

Short-term treasury applications 23,819 12,855

Total

Current Prior

year

Number of nominal shares without indication of value 1,355,000 1,355,000

Book value 36,600 36,600

Current Prior

year

Free from specific allocation 881 881

Carrying amount at 31 December, 2007 74,964 74,964

Market value as at 31 December, 2007 90,302 79,290

Current Prior

year

Financial debt 309,188 193,850

Cash and cash equivalents (-) -38,707 -26,649

Net indebtedness 270,481 167,201



Current Prior

year

Notes

Bonds 12,212 22,677 a)

Long-term finance lease obligations 33 981 37,684 b)

Long-term debts to financial institutions 29,034 24,638

Other long term debts 13,797 10,481

Sub-total (long term) 89,023 95,480

Amount due within 12 months (shown under current liabilities) 18,920 8,779

Other short-term borrowings 201,245 89,592

Total

The financial debt is repayable as follow:

Current Prior

year

On demand or within one year 220,165 98,371

Between two and five years 64,846 77,844

Beyond five years 24,177 17,636

Total

a) Bonds

Issuer Nominal

Value

Interest rate Year of issue and maturity

Nom Effective Issue Maturity

SAPEC SA 10,500 5,75% 5,82% 09/09/03 09/09/08

SAPEC SA 12,250 4,75% 4,92% 07/01/05 07/01/10

b) Finance lease obligations

Prior year

Total future

payments

Unexpired

interests

expenses

Current

value

Total future

payments

Unexpired

interests

expenses

Current

value

Maturity in one year 4,237 1,152 3,085 6,736 2,193 4,543

Maturity between one and five

years

19,663 2,996 16,667 34,040 4,358 29,682

Maturity in more than five years 18,508 1,194 17,314 9,894 1,892 8,002

Total

Current Prior

year

Government grants 2.131 2.376

Other 47 119

Maturity dates:

- Maturity in one year 531 590

- Maturity in more than one year 1.647 1.905



Tax (1) Disputes

(2)

Other Total Prior

year

Provisions - opening balance 2,658 1,157 397 4,212 4,237

Charges for the year - - - - 634

Utilisation of provisions -483 - -31 -514 -321

Recoveries - -147 - -147 -338

Other 19 -19 - -

from which non-current provisions 2,175 1,029 347 3,552 4,212

from which current provisions - - - - -

In 2007 the provisions decreased by 660 (- 16%).

The utilisations refers, essentially to the payments of VAT 224 k€ and import duties of 260 k€.

(1) The provisions for tax risks concern situations whose interpretation of the fiscal standards is doubtful. In most cases the amounts have already been

paid, but the judgement is still pending.

(2) The provisions for disputes concern contractual situations for which negotiations are underway or before the court. These provisions concern a number

of cases that are not publicly known and whose detailed presentation could prejudice the interests of the Group.

Current Prior

year

Trade payables 44,089 34,021

Advances received 1 110

Payroll liabilities and social security 4,408 3,765

Other payables 11,327 10,856

Total

Pensions and retirement benefits

Certain companies within the Group (Sapec Agro, Seteia and Sapec Química) grant their personnel the benefit of a sup-

plementary pension in addition to the statutory pension.

The right to this benefit depends on various conditions: the right to the statutory pension and the presence of the worker

within the company on the date on which this right becomes due. On the basis of its calculation method, these are

“defined benefit” insurances (rather than “guaranteed contribution” insurance).

In 1987, the Group set up a pension fund (SAPEC pension fund) and allocated the capital necessary to finance obliga-

tions arising from these rights. The management of this fund is entrusted to an Insurance Company, which, every year

on 31 December, calculates the volume of the “Commitments for past services” and the capitalisation value of the fund.

The companies top up the fund if it falls below this value.

The volume of the “Commitments for past services” and the amount of the contributions to guarantee the correct financ-

ing of the fund are calculated by the fund management entity according to the Project Unit Credit method.



The maximum amount required to finance the fund calculated for 2007 and the annual contributions forecast for the

following years are:

Companies Value of the fund

as at 31/12/2007

Commitments

for past in

31/12/2007

Contributions in

2007

Contributions in

2006

Forecast annual

contributions

(2008 and

following)

Sapec Portugal

SGPS, S.A.

- 50,66 50,70 - -

Sapec Agro 233,05 191,71 - - 10,91

Sapec Química 25,62 35,58 10,50 - 2,39

Seteia 6,78 1,38 - - -

Total -

The company Interpec Iberica as well as all of the operators in the import of agro commodities sector contest the appli-

cation by the Spanish port authorities of an import customs tax. This dispute covers the period between 1993 and 2002

and relates to a significant amount that the authorities should repay to the operators including Interpec Iberica. The

dispute is today in the hands of the Spanish Constitutional Tribunal.

a) Disposals of subsidiaries (1)

Current Prior

year

Non-current assets - 6,205

Current assets - 396

Non-current liabilities - -

Current liabilities - 4,711

-

Gain (loss) - 6,365

- -

Paid: - 9,264

- in cash - 9,264

- in deferred payment - -

Net entry of cash on disposal: - 9,263

- payment in cash - 9,264

- bank balances and cash ceded - 1

(1) in 2006, this information concerned the disposal of the company Naturener Eólica.



b) Off-balance sheet commitments

Guarantees and other liabilities

Current Prior

year

Actual guarantees given 42,243 44,587

Bank guarantees 77,064 24,204

Factoring responsability 3,963 1,848

Other guarantees 700 553

The bank guarantees essential represent guarantees granted to guarantee the payment of the VAT, the installation of the

photovoltaic plants and the rights for the transmission of energy (USA/CAN).

Capital commitments

Current Prior

year

Tangible assets 355,502 -

In 2007, capital expenditure contracted but not yet incurred are related to the investments with the projects for wind

farms and photovoltaic energy plants.

c) Remuneration of the Board of Directors and employment

Prior year

Number Costs Number Costs

Non-executive members of the Board of Directors 7 7

Executive members of the Board of Directors 2 2

Total remunerations 922 1,027

Employment

Prior year

Number Costs Number Costs

- Employees 692 30,001 606 26,048

Transactions with associated companies are mainly commercial transactions and are negotiated at normal market

prices.

In 2007 the Group did not finalize any significant transactions with associated companies or persons, and no director

was, or has been, personally interested in any significant transaction relating to Group businesses.



e) Related-party transactions

Prior year

Other

affiliated

companies

TOTAL Other

affiliated

companies

TOTAL

Accounts receivables: 654 654 438 438

- Trade receivables 366 366 29 29

- Other receivables 288 288 408 408

Accounts payables: 430 430 133 133

- Trade payables 379 379 36 36

- Other payables 51 51 97 97

- - - -

Services rended 211 211 28 28

Services acquired (-) 956 956 523 523

f) Auditor’s remuneration

Current Prior year

Audit services 374 382

Other services 74 238

Total



Company number: BE 0403.085.280

As required by law and the company’s articles of association, we report to you in the context of our appointment as statutory auditor. This

report includes our opinion on the consolidated accounts and the required additional disclosure..

We have audited the consolidated accounts of SAPEC SA and its subsidiaries (the “Group”) as of and for the year ended December 31,

2007, prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and with the legal and

regulatory requirements applicable on quoted companies in Belgium. These consolidated accounts comprise the consolidated balance

sheet as of December 31, 2007 and the consolidated statements of income, changes in shareholders’ equity and cash flows for the year

then ended, as well as the summary of significant accounting policies and other explanatory notes. The total of the consolidated balance

sheet amounts to EUR 570.594 (000) and the consolidated statement of income shows a profit for the year (group share) of EUR 20.712

(000).

The company’s board of directors is responsible for the preparation of the consolidated accounts. This responsibility includes: designing,

implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated accounts that are free from

material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting

estimates that are reasonable in the circumstances.

Our responsibility is to express an opinion on these consolidated accounts based on our audit. We conducted our audit in accordance with

the legal requirements applicable in Belgium and with Belgian auditing standards, as issued by the “Institut des Reviseurs d’Entreprises/

Instituut der Bedrijfsrevisoren”. Those auditing standards require that we plan and perform the audit to obtain reasonable assurance about

whether the consolidated accounts are free of material misstatement.

In accordance with the auditing standards referred to above, we have carried out procedures to obtain audit evidence about the amounts

and disclosures in the consolidated accounts. The selection of these procedures is a matter for our judgment, as is the assessment of

the risk that the consolidated accounts contain material misstatements, whether due to fraud or error. In making those risk assessments,

we have considered the Group’s internal control relating to the preparation and fair presentation of the consolidated accounts, in order to

design audit procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness

of the Group’s internal control. We have also evaluated the appropriateness of the accounting policies used and the reasonableness of

accounting estimates made by management, as well as the presentation of the consolidated accounts taken as a whole. Finally, we have

obtained from the board of directors and Group officials the explanations and information necessary for our audit. We believe that the audit

evidence we have obtained provides a reasonable basis for our opinion.

In our opinion, the consolidated accounts give a true and fair view of the Group’s net worth and financial position as of December 31, 2007

and of its results and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by

the European Union, and with the legal and regulatory requirements applicable on quoted companies in Belgium.

The company’s board of directors is responsible for the preparation and content of the management report on the consolidated

accounts.

Our responsibility is to include in our report the following additional remark, which does not have any effect on our opinion on the consoli-

dated accounts:

− the management report deals with the information required by the law and is consistent with the consolidated accounts. However,

we are not in a position to express an opinion on the description of the principal risks and uncertainties facing the companies

included in the consolidation, the state of their affairs, their forecast development or the significant influence of certain events on

their future development.

Nevertheless, we can confirm that the information provided is not in obvious contradiction with the information we have acquired in the

context of our appointment.

Brussels, April 15, 2008

MAZARS & GUERARD - REVISEURS D’ENTREPRISES

Statutory Auditor

Represented by

X. DOYEN

STATUTORY ACCOUNTS


The statutory annual accounts of Sapec S.A.

are presented in summary format.

In accordance with the articles 98 and 100 of the Belgium companies code,

the management report of the Board of Directors,

the annual accounts of SAPEC S.A. as well as the Auditor’s Report

will be filed with the National Bank of Belgium.

These documents are available on request from:

500, Avenue Louise

1050 Bruxelles

The statutory auditor’s report is unqualified and certifies that the statutory accounts of SAPEC S.A.

for the year ending give the true and fair view of the financial position and results of the Company

in accordance with all legal and regulatory dispositions.

STATUTORY ACCOUNTS


Assets in k€ Prior year

I. Start-up costs (ann. I.) - -

II. Intangible assets (ann. II) - -

III. Tangible assets (ann. III) 802 728

A. Land and buildings 781 705

B. Plant, machinery and equipment 10 6

C. Vehicles, furniture and other equipment 6 12

E. Other tangible assets 5 5

F. Construction in progress and advance payments - -

IV. Financial assets (ann. IV and V) 61,646 61,646

A. Related companies 61,645 61,645

1. Participating interests 61,645 61,645

2. Accounts receivable - -

C. Long-term investments 1 1

1. Stocks and shares - -

2. Accounts receivable and cash guarantees 1 1

Current assets

V. Long-term accounts receivable 13,579 4,000

B. Other receivables 13,579 4,000

VII. Short-term accounts receivable 78,019 49,384

A. Trade accounts receivable 6,316 383

B. Other receivables 71,703 49,001

VIII. Short-term investments (ann. V and VI) 695 193

A. Own shares 75 75

B. Short-term bank deposits 620 118

IX. Cash at bank and on hand 695 732

X. Prepaid income and deferred expenses (ann. VII) 808 829

STATUTORY ACCOUNTS


in k€ Prior year

I. Equity capital (ann. VIII) 36,600 36,600

A. Subscribed capital 36,600 36,600

II. Share premiums 7,127 7,127

IV. Reserves 4,610 4,610

A. Legal reserve 3,660 3,660

B. Unavailable reserves 75 75

1. For treasury shares 75 75

C. Untaxed reserves 875 875

V. Retained earnings 19,746 20,002

207 207

VII. A. Provisions for liabilities and charges 207 207

2. Fiscal charges 198 198

4. Other liabilities and charges (ann. IX) 9 9

B. Deferred taxes

VIII. Non-current liabilities (ann. X) 14 812 24,677

A. Financial debts 14,812 24,677

2. Unsubordinated bonds 12,212 22,677

5. Other loans 2,600 2,000

IX. Current liabilities (ann. X) 71,792 22,019

A. Instalment of medium/long-term loans due on the year 11,892 1,000

B. Financial debts 49,687 17,460

2. Other loans 49,687 17,460

C. Trade and other payables 5,758 325

1. Trade payables 5,758 325

E. Tax, wages and social security debts 1,071 818

1. Taxes 1,030 778

2. Remuneration and social security charges 41 40

F. Other debts 3,384 2,416

X. Prepaid income and accrued expenses (ann. XI) 1,350 2,270

STATUTORY ACCOUNTS


in k€ Prior year

A. Revenue (ann. XII, A) 6,443, 468

D. Other operating income (ann. XII, B) 150 223

A. Raw materials and goods (5,975) (421)

1. Sundry goods and services (5,975) (421)

B. Services and various goods (775) (398)

C. Remuneration, social charges and

pensions (ann. XII, C2) (294) (309)

D. Depreciation, amortisation and reductions of value on

costs of establishment, on intangible and

tangible assets (75) (23)

E. Reductions in value of stocks, orders

in progress and on commercial debts

(allocations +, recoveries -)(ann. XII, D) - -

F. Provisions for risks and expenses (ann.XII) - 537

G. Other operating expenses (ann. XII, F) (18) (558)

Operating loss (544) (481)

A. Income from long-term investments 3,671 3,268

B. Income from current assets 2,917 2,023

C. Other investment income (ann. XIII, A) 576 577

A. Expenses debts (ann. XIII, B) (2 ,766) (1,831)

C. Other financial expenses (ann. XIII, D) (150) (149)

-

B. Recoveries of reductions in value on

financial assets - -

D. Gains on disposal of tangible and intangible assets - -

E. Other exceptional income (ann. XIV, A) - 1

STATUTORY ACCOUNTS


in k€ 2007 2006

B. Reduction in value on financial assets - -

D. Losses in disposals of tangible and intangible assets (1)

E. Other exceptional expenses (ann. XIV, B) (11) (10)

- -

B. Transfers to the deferred taxes - -

A. Income taxes (142) (146)

B. Loss and recovery of tax provisions - 44

- -

in k€ 2007 2006

1. Profit of the year to be allocated 3,551 3,295

2. Profit carried forward from the preceding year 20,002 19,724

2. On the reserves - -

1. To the capital and to share premiums - -

2. To the legal reserve - -

3. To the other reserves - (75)

1. Profit to be carried forward (19,746) (20,002)

1. Remuneration of the capital 3,698 2,844

2. Directors or managers 109 98

STATUTORY ACCOUNTS


1. Subscribed capital

1.1. At close of previous year 36,600

1.2. At close of the current year 36,600

2. Representation of capital

2.1. Share categories

Ordinary shares 1,355,000

VVPR shares

2.2. Nominal or bearer shares 1,355,000

Nominal 941,328

Bearer 413,672

OWNERSHIP DECLARATIONS

Shares

1,355,000

% held

by

the entity

FINANCIERE FREDERIC JACOBS S.A., Brussels 113,661 8.39%

Total sub-group 1 113,661 8.39%

SOCLINPAR S.A., Luxembourg 17,969 1.33%

LUSO HISPANIC INVESTMENT LHI S.A., Luxembourg 610,973 45.09%


BES INVESTIMENTO S.A, Lisbonne 14,179 1.05%


COBEPA S.A., Brussels 204,950 15.12%

Total sub-groups 1, 2, 3 et 4 961,732 70.98%

Alcatel Bell pension funds 42,000 3.10%

STATUTORY ACCOUNTS


1. The start-up costs and the intangible assets are entered at their acquisition value and are amortized over 3 to 5

years. They are withdrawn from the inventory as soon as they are fully amortized.

2. The tangible assets are entered at their acquisition value and depreciated according to the rates and methods

authorised by the tax regulations following a linear method whose duration depends on the nature of the fixed assets

(for example, head office building: 33 years, office equipment: 5 years, etc.).

3. The assets and liabilities of the branch are converted according to the monetary/non monetary method laid down

by the Accounting Standards Commission CNC (Commission des Normes Comptables).

4. The financial assets are evaluated at their acquisition value. Impairment losses are applied in the event of sustain-

able losses or write-downs. The provisions for the write-down of securities are evaluated security by security on the

basis of the carrying amount and approved by the Board of Directors.

5. The accounts receivable in EUR are entered at their nominal value. Impairment losses are exercised on the

accounts receivable that are considered to be written off. A provision for bad debts hedges potential losses.

6. The debts in EUR are entered at their nominal value.

7. Short-term investments are evaluated at their acquisition value and the depreciations are calculated on the basis of

the rate in force at the close of the period.

8. The provisions for liabilities and charges are set up at the close of each period to hedge any liabilities and losses for

the year or prior years, subject to the agreement of the Board of Directors. These provisions are recovered in the

results if they have not been used.

9. Assets, accounts receivable, debts and commitments in currencies : currency transactions are converted into EUR

at the rate in force at the time of the transaction or, in the event of specific hedging, at the rate of the hedging

transaction.

The monetary assets and liabilities are reevaluated at the closing rate and the conversion differences that result

from them are recognised in the income statement.

STATUTORY ACCOUNTS


(in k€)

ASSETS

The financial holdings in associated companies (61,645) are broken down as follows :

- Sapec Portugal 48,120

- Interpec Iberica 1,410

- Tharsis 11,707

- Iberia Pcc 248

- Sapec Finance 160

61,645

The « Other accounts receivable » includes :

Accounts receivable from the group’s companies

- Sapec Portugal SGPS 26,766

- Sapec Agro 579

- Sapec Agro Spain 2,600

- SPI 2,398

- Interpec Iberica 8,293

- Tradecorp 10,343

- Tharsis 20,232

- Naturener 69

- Other 129

71,409

Tax adjustments & recovery of

fiscal provision 294

Total 71,703

This mainly concerns the refinancing of the subsidiaries through the issue of the mid term loan and of

commercial papers on the Belgian capital market. This last method of financing payable between 1 and 6

months allows the company to finance its subsidiaries under better conditions than they would otherwise

be granted on the local banking market.

At December 31, 2007 the company held 881 own shares. The other investments represent short term

deposits (118).

These are two bond issues, one of 10,500 issued at a rate of 5.75% and falling due on 9/9/2008, and the

other of 12,250 issued at a rate of 4.75% and falling due on 7/1/2010.

Also compraises a loan of 2,000 at Euribor rate 3 months and falling due on 4/9/2009.

STATUTORY ACCOUNTS


Current liabilities

These liabilities amount to 71,792 compared with 22,019 in 2006, growing up to 49,773.

The long-term debt with maturity in one year concerns the bond by tax interest 5.75% with due date as at

9/9/2008.

The other loans, representing the use of commercial paper on the Belgian capital market are increasing by

32,227 compared with last year.

The « other liabilities » item breaks down as follows

- Dividends due on prior year 106

- Net dividends and percentages of the period 2,882

- Debts payable to Sapec SGPS 396

3,384

The debts expenses consist of liabilities expenses broken down as follows :

- Bank loans 157

- Commercial papers 1,423

- Prorata expenses on bond issues 1,186

- Commission : credit opening guarantee 57

The remainder (93) relates to miscellaneous finance costs, in particular the costs incurred by stock

exchange listing, the payment of coupons and commissions.

Dividends have been received from Sapec SGPS, the Interpec Ibérica, the Sapec Finance and Ibéria Pcc.

How to contact us?

Sapec S.A.

500 Avenue Louise, b. 6

1050 Brussels

Tel.: + 32 (0)2 513 92 58

Fax: + 32 (0)2 512 20 90

E-mail : [email protected]

Site : www.sapec.be

VAT: BE403 085 280

Brussels Trade Register N° 626

Investor relations and financial disclosure

[email protected]

Antoine Velge

Eric van Innis

Published by

Antoine Velge

Tel. : + 32 (0)2 513 92 58

Fax : + 32 (0)2 512 20 90

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