Annual Report 2010

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Corporate Information
Letter from the CEO, 6 Board of Directors, 9 Main Statistics, 10 Internationalisation, 12
01 02 03 04 05 06
Concessions, 15
Infrastructures, 18 Energy, 22 Car Parks, 24
07
CSR, 91
The Value of Commitment, 92 Human Resources, 96 Value Creation, 115 Community and Social Environment, 131 Research and Development, 146
08 09
Economic Report, 155
Energy, 33
T&D, 36 Power Generation, 38 Industrial Projects, 40 Photovoltaic Solar Power, 42
Construction, 55
Civil Works, 60 Building, 64
Environment, 73
Management Report, 263
Facilities, Maintenance and Services, 79
Factories, 85
Emesa, 87 Corvisa, 87 Typsa, 89
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ci. Letter from the CEO
part from the reservations which are inextricably linked to the uncertain future of the world economy, all would seem to indicate that Isolux Corsn has started to recover a growth rate which we would expect to continue over the forthcoming years. We closed 2010 with a generalised increase throughout our economic divisions and with results which can be classified as positive. In any case, it is important that we are aware of the full extent of the international reality. The global economy is synonymous with tremendous opportunities however, at the same time, by virtue of its multiple facets it is an increasingly bigger challenge. As was indicated a year ago, globalisation is not an option. In a very short space of time it has become a market prerequisite. In previous years we prepared the company for addressing this challenge and 2010 will go down in the Groups history books as the year in which we ratified our global vocation. For the first time our revenue from abroad exceeded that made in Spain and 82% of our business portfolio is based on the international market.
6
Steadfastly Onwards
Luis Delso Heras
CEO
We have consolidated Isolux Corsn as a global company and, moreover, we have achieved this in countries which have been selected as the future drivers of the world economy. In recent years our Group has reinforced its presence in the USA, India, Brazil and Mexico. The complexity and opportunities offered by each of these markets reflect the need to have a team of first class professionals as ours has proved to be. The work undertaken by this team has been decisive in increasing our revenue by 7%, thus resulting in a turnover of 3.24 billion euros, in a year when the market has, to say the least, proved to be complex. All together we have been able to achieve a historical EBITDA figure with growth of 22% compared to the last financial year. Without consolidation of the internationalisation process these results would not be possible. Isolux Corsn operates in 30 countries on four continents. This distribution guarantees the territorial diversification of our business, and paves the way to huge growth prospects in strategic markets such as Asia and
South America which add greatly to the Groups profitability. Isolux Corsns activity in India, one of the emerging economies with the highest expected growth in the world, is today an example to be followed. The involvement of local partners and our commitment to the country have been fundamental in consolidating our business in this market where we already have 710 km of motorways in concession. A similar case, at the other side of the world, is that of Brazil, one of the countries where the Group intends to invest more in the forthcoming years. Here we operate 680 km of motorways and more than 3200 km of transmission lines, half of which are reserved for our huge project in the Amazon. The USA is another of the key geographical areas for Isolux Corsns future development. In 2010 we made progress with our project for the construction of 564 km of high voltage lines in the state of Texas. All of this international expansion should not, however, detract from the fact that Spain continues to be an important
market for Isolux Corsn. Our involvement in the construction of high speed networks where we have participated in practically all of the Spanish AVE lines, is a clear example of the strategic role played by our company in the construction sector for large infrastructures. Likewise, it is worth highlighting the development of technological projects with a significant proportion of R&D&I, linked to clean energy, such as the City of Energy in Len. I would like to leave you with a thought to conclude. In the years to come we will expand our global vocation even more. This is a process which is unstoppable and the steps we are taking in that direction are steadfast. The secret of this development will continue to be closely connected to our ability to relate to other cultures with awareness and respect, lending our experience, know-how and knowledge.
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ci. Board of Directors
Board of Directors
CEO: Luis Delso Heras
Vice President: Jos Gomis Caete
Directors: Antonio Portela lvarez Juan Jos vila Gonzlez Javier Gmez-Navarro Navarrete Serafn Gonzlez Morcillo Antonio Hernndez Mancha Jos Luis Hernndez Snchez Francisco Moure Bourio Juan Odriz San Martn Antonio Pulido Gutirrez ngel Serrano Martnez-Estllez
Secretary: Juan Francisco Falcn Ravelo
(as of 31st December 2010)
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ci. Main Statistics
Revenue
International National 2.415 1.941 23% 1.583 19% 11% 89% 81% 77% 78%
+
3.317 22% 3.018 43%
7%
3.240 51%
EBITDA
+
252 191 255
22%
311
Portfolio
International National
17%
30.180
25.838 79% 15.565
82%
117 57% 49%
144
201 0 in figures
International Presence
Europe
Spain Portugal Italy
America
Argentina Bolivia Brazil Chile Ecuador Colombia USA Guatemala Mexico Nicaragua Panama Peru
Asia
Saudi Arabia India Jordan Kuwait Oman Qatar Syria
Africa
Angola Algeria Gabon Equatorial Guinea Kenya Morocco Mauritania Mozambique
B 2005 2006 2007 2008 2009 2010
2005 2006 2007 2008 2009 2010
57% 5.614 6.374 32% 31% 40% 68% 69% 60% 43% 21% 18% B 2005 2006 2007 2008 2009 2010
9.473
Revenue
EBITDA
Portfolio 70%
INT
3.240
Billions of euros
311
30%
ESP
Millions of euros
30.180
Billions of euros
Revenue per geographic area America
28%
Europe
57%
Asia
7%
Africa
8%
Figures of interest
3,812 1,690
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Km of transmission lines in Brazil and the USA Km of motorways in India, Brazil, Mexico and Spain
267 21,683
MW installed in PV power stations over the last 3 years
Employees
Parking spaces in Spain
6,465
Headquarters throughout the world
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ci. Internationalisation
A global business
Revenue originating from international activity in 2010 exceeded that made in the national area for the first time in the Groups history (51% abroad as opposed to 49% of turnover in Spain). As such, the EBITDA percentage obtained abroad went up to 70%, and the business portfolio outside Spain was at 82% during 2010. The Group is active in 30 countries on four continents and, in all of these, a corporate commitment policy is developed with the country and its social environment. This international expansion process has already etched out its path and the huge challenge to be addressed now
Isolux Corsn consolidates its presence in strategic and emerging countries
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is the implementation of a global business strategy in order to consolidate markets and open new opportunities. Over the last year, the Group consolidated its activity in some emerging countries whose economic indicators position them as large centres for economic development. Examples of these are India, Brazil and Mexico. The company in turn continues to increase its activity in important strategic markets for the immediate future such as the case of the USA. Isolux Corsn made its first indent in the infrastructure concession business in India in 2008 when it was awarded the
contract for the NH-1 PanipatJalandhar. From then on the companys activity in this country has been consolidated with contracts for a total of 4 motorways in concession (NH-2 VaranasiAurangabad, NH-6 Maharashtra/ Gujarat-Hazira Port, NH-8 Kishangarh-Ajmer-Beawar) with over 710 km in construction and operation. The company has also started work on the construction of various transmission lines in Uttar-Pradesh and has completed two substations in Maharashtra. Brazil is another of the countries which brings together the extensive activity of all the Groups business lines. Two motorways
are being built and managed in concession in the state of Baha (BR 116 and BR 324), with a total of 680 km. At the same time, there are 3812 km of transmission lines in the USA and in Brazil following the sale of the Chinese company State Grid Corporation, for a total value of 1.400 B, with 8 concessions for transmission lines in Brazil, operated jointly with other Spanish partners. This rotation of assets has considerably reinforced the Groups investment capacity to undertake new projects within a short timeframe. In the American market Isolux Corsn is, from its headquarters in Austin (Texas), carrying out engineering works prior to
the construction of a total of 564 km high voltage lines which will transport the energy generated by the wind farms located in the northwest of the state to the southeast of Texas where industry is concentrated, as are the main cities such as Dallas and San Antonio. Isolux Corsn operates this project on a 50% basis with the Canadian fund Brookfield Asset Management through the company set up for that purpose under the name of Wind Energy Transmission Texas. In Mexico, the company has continued with its work on the construction of the Perote-Banderilla and Saltillo-Monterrey motorways and has put three
The American continent represents 28% of the companys revenue
sections into operation that form part of the belt to Saltillo as part of this last concession. Finally, Africa. This continent contributes to 8% of the Group revenue and Isolux Corsn is undertaking numerous projects in Angola to help the government to rectify, in part, the countrys electric deficit. The Group also has electric projects currently in their initial phase and development projects in other countries in the area such as Gabon, Mozambique, Kenya and Equatorial Guinea, in addition to continuing with the construction works for the Oran tram in Algeria where the Group is also developing other environmental and hydraulic projects.
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Concessions
Forward-looking vision
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01. Concessions
Forward-looking vision
The economic crisis which began in 2008 has forced a global reflection on the management of strategic infrastructures in countries throughout the world. The concession arrangement, as a tried and tested efficacy model, responds to the need for joint effort between public and private entities in order to address the challenges that the future holds. The Concessions division in Isolux Corsn has been able to interpret these circumstances in terms of
The turnover in Concessions grew by 54% in 2010 to total 164 M
market opportunity and, in 2010, its results are clear proof of the success achieved. The gradual settling down achieved in the international area in recent years has played a key role in the increased turnover in this division to as much as 164 million euros. This is an increase of 54% compared to 2009. The last year represented a considerable increase for this division both in terms of new contract awards (es-
pecially in emerging countries such as Brazil, India or Mexico) and in the management and operation of established concessions with the operation of an important concession activity having started. At the moment, the companys strategic endeavour in the Concessions division represents an important vision of the future, given that Isolux Corsn Concessions has accumulated a business portfolio with a value of 23.613 billion euros.
Kilometres of motorways in concession

1,690 1,502
Main infrastructure concessions

Project
Panipat-Jalandhar motorway (NH-1) Varanasi-Aurangabab motorway (NH-2) Maharashtra-Gujarat motorway border to Hazira Port (NH-6) Kisangarh-Ajmer-Beawar motorway (NH-8) BR 116 and BR 324 Saltillo-Monterrey motorway Perote-Banderilla motorway A4 Madrid-Ocaa motorway
Km
291 192 133 94 680 95 60 64
Location
India India India India Brazil Mexico Mexico Spain
595 176 244
81 2005
2006
2007
2008
2009
2010
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01. Concessions
INFRASTRUCTURES
Isolux Corsn, the first European infrastructure developer in India

More than 700 km of motorways in India
For the last two years, the Concessions division of Isolux Corsn has been working in close collaboration with the Government of India in the framework of the National Motorway Development Programme drawn up by the National Highways Authority of India (NHAI). The Indian authorities have made a clear
The investment made exceeds 2 billion euros
commitment to the concessions formula in order to guarantee the feasibility and maintenance of the most emblematic land infrastructures. Against this backdrop, the Concessions division of Isolux Corsn has made a firm commitment to gain a foothold in this country. The results speak for themselves: in two years
the concession has been awarded for the improvement and operation of four motorways which total over 700 kilometres and represent an investment of 2 billion euros. Moreover, the financing of the first three projects has been closed (NH-1, NH-6 and NH-8) for the amount of 950 million euros.
Spain, new contracts

In Spain, the company was awarded the maintenance contract for the A4 between Madrid and Ocaa, in one of the sections nearest to the capital (64 km long) with average traffic flows of approximately 80,000 vehicles per day in 2010. In 2010, Isolux Corsn completed the construction and adaptation work for this road which has already opened. Public-private pairing In spite of the economic crisis, Spain continues to be a strategic market. The Infrastructure Plan (IP) implemented by the Ministry of Development represents an important opportunity for the concession business. This investment plan, with public and private funds, will enable Isolux Corsn to apply its knowledge and experience to the development of concessions.
Main concessions in India

QQ Panipat Jalandhar motorway | NH-1 The awarding of this concession in 2008 made Isolux Corsn the first Spanish company to be given a contract award for the construction and maintenance of a road infrastructure in India (291 km). Works to expand the motorway to six lanes and for the dual service carriageway were undertaken and the fencing of this infrastructure was completed which the Group manages in operation. QQ Maharashtra Gujarat motorway border to Hazira Port | NH-6 During 2010 works started on the NH-6, which have an investment of 350 million euros. This affects a section of 133 kilometres in the state of Gujarat. This concession includes the enlargement, improvement, operation and maintenance of this infrastructure until the year 2027. QQ Kishangarh Ajmer Beawar motorway | NH-8 This concession started in 2009 in a consortium with the local company Soma Enterprise Limited. It includes activities for the enlargement, improvement, operation and maintenance of a section of 94 kilometres. The investment totals 210 million euros and the management period will be extended to 2027. Varanasi Aurangabad motorway | NH-2 In 2010, the consortium with Soma Enterprise Limited was also awarded the concession to enlarge, operate and maintain this infrastructure of 192 kilometres for 30 years. The investment totals 600 million euros.
INFRASTRUCTURES
Efficacy in all divisions

Isolux Corsn is constructing and managing 1,690 km of motorways
In 2010, the Infrastructure Concessions division of Isolux Corsn maintained its development in international markets in line with the strategy pursued in recent years. As such, countries such as India, Brazil and Mexico continue to represent the strategic axis of international business. Indeed, Isolux Corsn has 1,211
Toll station on the Panipat Jalandhar motorway | India
The investment made exceeds 3.800 billion euros
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km of motorways in operation and 1,450 km in progress, some of which operate whilst at the same time being built. This recognition of concession management in countries which are redefining the bases of the world economy has been accompanied by some very positive results in Spain.
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01. Concessions
INFRASTRUCTURES
The first motorway for the Group in Mexico opens

The operation of concessions, such as the Saltillo Monterrey motorway, are decisive for the consolidation of the business
Currently Isolux Corsn is in charge of two motorway concessions in Mexico: SaltilloMonterrey and PeroteBanderilla, awarded in 2006 and 2008 respectively.
Isolux Corsn operates one of the main communication routes in Monterrey
Main concessions in Mexico

QQ Saltillo - Monterrey motorway On this motorway, constructed by Isolux Corsn and opened in 2009, 42 kilometres are operated which last year registered an average daily flow of 7,639 vehicles. On 27th October 2010 Sections II and III of Libramiento Norponiente in Saltillo were put into operation totalling a length of 24 kilometres. Furthermore, 8 more kilometres were also opened of the SaltilloMonterrey motorway, which means that at the end of 2010, the active sections totalled 74 kilometres, a figure which represents 77% of the road put into concession (95 km in total). QQ Perote Banderilla motorway The project, still in progress and which also includes Libramiento de Xalapa, registered overall progress of 52%. The opening of the Perote-Banderilla motorway (Sections I and II), with a layout of 30 kilometres, is forecast for 2011. The rest of the project, with regard to Libramiento de Xalapa (Sections III and IV), comprising a further 30 kilometres, is also making good progress.
INFRASTRUCTURES
Expansion in Brazil
The Group is operating one of the most important concessions in the country
Isolux Corsn continues to consolidate its presence in Brazil through federal motorway concessions. The company is implementing the concession contract with the Federal Government of Brazil for the enlargement, maintenance and management over 25 years of the federal roads BR 116 and BR 324 in Baha.
Works in Viabaha, in the state of Baha | Brazil
Isolux Corsn is managing 680 km in Brazil with an investment of more than 710 M
The project investment quantity totals 710 million euros of which, by 2010, 50 had been used. Road transport is the type most used in Brazil which means that the infrastructure market in this country has excellent growth prospects.
Main concessions in Brazil

QQ BR 116 This is an important north-south road in the state of Baha, one of the areas of the country with most potential. QQ BR 324 It connects the city of Salvador and the Port of Aratu to the BR116 which is also in Baha.
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Toll on the Saltillo - Monterrey motorway | Mexico
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01. Concessions
ENERGY
Strategic expansion in the United States

The project will enable taking renewable energy from the northeast of Texas to the population ENERGY
The USA is one of the key markets for the expansion of the energy transmission concession activity in Isolux Corsn. Following the contract award obtained in 2009 in the state of Texas, and with an investment of 500 million euros, Isolux Corsn will construct and operate 564 km of 345 kV lines that will supply the renewable energy produced by the wind farms in the northeast of the state to the southeast of Texas where industry and population nuclei are concentrated. This project, which the company is implementing in a consortium with the Canadian investment fund Brookfield Asset Management, made Isolux Corsn the first Spanish company to obtain an electric transmission concession in the USA.
The Group in the global energy market

The company has 3,812 km of transmission lines in Brazil and the USA Transmission line concessions
Country
Brazil USA
With an investment of 500 M, the company will operate 564 km of lines
Km
3,248 564
The growing energy requirements in the world, and the complexity with which the 21st century is facing the changes occurring in this sector, make the energy sector a leading reference for the economic development of countries. Currently, 20% of the world population still has no access to electricity and, in its 2010 report, the International Energy Agency (IEA) highlights the need to increase investments over the next 20 years in the generation and distribution of energy in order to contribute to development as set forth in the UN Millennium Development Goals. Against this backdrop, and with the commitment to sustainability, Isolux Corsn has an important role to play on the global energy market.
Isolux Corsn consolidates its activity in strategic markets such as the USA
The company continues to take pole position in the electric transmission concession business on a global level with a total of 7 concessions and 3,812 Km of transmission lines throughout the world. The Group has consolidated its business with new works and concessions whilst committing to highly strategic markets such as the United States and Brazil and has, at the same time, strengthened itself by rotating mature assets in order to be able to continue investing and building. The Energy Concessions business focuses both on the management of transmission lines (and associated substations) and on power generation concessions: wind, thermal, hydraulic and other alternative energies.
Brazil: vast experience in an emerging market

Isolux Corsn is building more than 1,200 km of lines in the Amazon
The consolidation of Isolux Corsns business in Brazil, one of the most up-and-coming markets in Latin America, has made the company one of the main operators of transmission lines in the country. The company currently has 3,248 km of transmission lines in Brazil and associated substations. The main Isolux Corsn project in Brazil is the construction of over 1,200 km of lines in the Amazon, with an investment of 900 million euros. In 2010 Isolux Corsn closed an operation for the rotation of mature assets in Brazil to the Chinese consortium State Grid Corporation Of China, the largest electricity transport country in China. The economic return on this operation (272.9 M) translates into greater investment capacity for undertaking new projects. Isolux Corsn has been established in Brazil for over a decade and, to date, continues to represent one of the main internationalisation drivers for the company. Brazil profiles itself as one of the best emerging markets based on its growth and stability prospects for the next decade and the company is prepared to undertake and respond to the requirements of any public or private project throughout Brazil.
The rotation of mature assets enables making new investments
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01. Concessions
Car Park Concessions

Basic statistics
Total number of spaces Facilities Cities Spaces in operation Spaces under construction Spaces being designed 21,683 43 21 16,074 1,528 4,081
Padre Claret car park, Segovia | Spain
CAR PARKS
Constant growth
Isolux Corsn manages 21,683 parking spaces in 21 Spanish cities
The Car Parks division of Isolux Corsn is one of the leading companies in Spain in the public and private development sector for car parks. The company manages 21,000 parking spaces in 43 facilities in 21 Spanish cities with an investment of 300 million euros. In spite of the difficult economic climate which characterised 2010, this division has managed to maintain its growth rate which
This division maintains its growth rate weighted at 24.25%
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is positioned at a mean weighted increase of 24.25% since 2006. 74% of the total spaces are already in the operation phase whilst 7% are being built and the remaining 19% are in the design phase. The maturity of the car parks in operation in previous years, and the expansion of the business to the hospital division, are some of the keys to the success of 2010.
During 2010 the company was awarded the concession contract for the operation of the two car parks for Hospital Miguel Servet in Zaragoza (199 spaces), Hospital de Cartagena (1780) and Hospital del Mar Menor (633 spaces). In addition to the aforementioned hospitals, over the last year car parks were put into operation in Torres Quevedo, La Pea Sports Hall, Ibarrekolanda Square and
Garai Gardens, in the city of Bilbao (324 spaces) and the Po XII Car Park in Talavera de la Reina (607 spaces), which means a total of 2,910 new spaces in operation and an increase of 22% compared to the previous year. Isolux Corsn is competing in the sector along various lines of business. On the one hand, the company focuses on the development and operation of car parks
according to a rotation system, in which state-of-the-art technology is used to ensure the greatest number of users for each available space at any time. On the other hand, the company is also responsible for the management of surface car parks (ORA), whose activity responds primarily to the municipal demand for the comprehensive management of car parks in public roads.
The spaces in operation increased by 22% in 2010
The Car Park division also manages lease contracts to third parties with proven and mature properties and is responsible for the promotion and sale of car park spaces for residents.
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01. Concessions
PHOTO GALLERY OF UNIQUE PROJECTS
BR 116 and BR 324 motorways | Brazil

Cilent: Federal Government of Brazil | Total length: 680 km | Concession period: 25 years | Budget: 710 M
One of the largest infrastructure concessions in the world

Isolux Corsn manages two of the most important roads in Brazil: BR 116 and BR 324. With a total of 680 kilometres, this project is the second largest concession by length in Brazil and one of the most important in the world. The BR 116 motorway is an important north-south road in the state of Baha, one of the states with greatest development potential in the country, and the BR 324 connects the city of Salvador and the Port of Aratu to the BR 116.
Preparation of a toll area in the Brazil concessions In 2010, Isolux Corsn started the project by carrying out important work for the improvement of the surface, signs and safety devices, as well as the provision of the user support service and pick-up and ambulance services. 16,474 pick-up calls and 2,730 ambulance calls were registered in only nine months. In 2011 the doubling works will start for 83.67 km of the BR 116.
Isolux Corsn manages 680 km of roads in the state of Baha, in Brazil
The works will enable improving the connection of the north-south motorway in the state of Baha
Viabaha is one of the Groups main concessions in Brazil
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01. Concessions
Transmission lines Texas | United States

Developer: Texas Public Utility Commision | Km of lines: 564 | Output of lines: 345 kV Consortium: Brookfield Asset Management | Concession period: 40 years | Investment: 500 M
Transmission lines for transporting clean energy to the population in the southeast of Texas
With the concession of 564 km of transmission lines in Texas, Isolux Corsn is consolidating itself in a key market for the expansion of concession activity. The company has offices in Austin (Texas), where the Isolux Corsn team is putting the finishing touches to the engineering projects for the construction of the lines. In order to facilitate management and construction the project was subdivided into three parts or subprojects which will be connected to voltage between 2012 and 2013.
Isolux Corsn has its own offices in Austin with an engineering team
The Texas Public Utility Commission awarded this concession in 2009 to the consortium formed by Isolux Corsn with a stake of 50% with Brookfield Asset Management for a period of 40 years. As such, the company retained seven lines from the new high voltage electric transmission network which will transport clean energy from the wind farms in the north of Texas to the southeast of the area. The consortium operates through the Wind Energy Transmission Texas (WETT), which has already obtained the regulatory licence for all of its three subprojects.
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01. Concessions
Santa Brbara car park - Cdiz | Spain

Developer: EMISO | Built surface area: 21,227 m2 | No. of spaces: 900 | Investment: 12 M
It has 900 spaces of which 200 are reserved for residents
State-of-the-art technology in car parks for the city of Cdiz

This is the largest car park in the historic quarter of this city in Andaluca
Isolux Corsn has built the largest car park in the historic quarter of the city of Cdiz. Located in an area highly frequented by tourists, Santa Brbara car park (for which 12 million euros were invested) has a total of 900 spaces, of which 200 will be reserved for residents through the administrative concession and the rest will be rotated. The car park, built on a surface area of 21,227 m2, is equipped with the most cutting-edge technologies available in the sector such as free space indication systems, chargers for electric cars, car registration plate reading system, CCTV and 17 spaces exclusively reserved for the disabled. The Group will assume responsibility for the operation of the Santa Brbara car park, for a period of 50 years, through the joint venture Emiso Cdiz.
The Santa Brbara car park is adapted for use by the disabled
Isolux Corsn carried out the works over a period of 18 months
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Energy
Power output
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02. Energy
Power output
With a growth rate of 22% over the last year, the Energy division of Isolux Corsn has consolidated itself as one of the most strategic areas in the company where most of the business is concentrated on the international market, especially Brazil,
Energy, one of the most strategic and fastest growing divisions in the Group
Mexico, Argentina, India, USA and the African continent. This important development in energy activity has generated revenue of 1.100 B for Isolux Corsn and has set the pace of growth which the company would hope to see continue in forthcoming
years. Within the Energy division, Isolux Corsn concentrates its activity in four large areas: transmission and distribution (T&D), conventional and renewable power generation, industrial projects and large projects in which high technological speciali-
sation is outstanding. In all of these, Isolux Corsn plays an important role on the global market, although the lions share of the business corresponds to T&D. In this division the company is building very high voltage transmission
lines at a rate of more than 500 kilometres per year and has an increasingly high volume of activity. Isolux Corsn has reaffirmed its pole position amongst the leading constructors of photovoltaic power stations in the world. In
Isolux Corsn, one of the leaders in the construction of photovoltaic power stations
2010, the company completed the construction of the largest photovoltaic power station on the European continent (72 MW) in Italy and over the last three years has already accumulated installed power of 267 MWp.
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02. Energy
TRANSMISSION AND DISTRIBUTION
Growth in strategic countries

India, the USA and developing African countries are key markets for the Group. In India, Isolux Corsn started work on various transmission lines in Uttar-Pradesh and has completed two substation enlargements of 132 kV in Maharashtra. The construction of the three 66/11kV substations in Alkhissa, in Qatar and the turnkey construction of the Kodsaya and Dimas substations in Syria, round off the most important projects that the company has on the Asian continent. In the USA, Isolux Corsn manages its activity in transmission lines from the office located in Austin (Texas) where the company has deployed the necessary team to develop energy infrastructure construction projects.
600 km of lines built in 2010

In 2010 Isolux Corsn built a total of 600 km of transmission lines, which represents 20% more activity than the previous year.
Latin America
The construction project for 1,200 km of high voltage lines in the Amazon continues to be one of the most important challenges facing this division both due to its dimensions and complexity. This refers to the construction of the transmission lines which will connect the largest city in the Brazilian Amazon to the countrys interconnected system. The company has made progress in the engineering work and the implantation of the camps and has obtained the environmental permits. In this same country the company has completed the construction of the 500 kV CESTE line and the two Estreito and Imperatriz substations. Moreover, Isolux Corsn has obtained a new contract for the construction of a converter substation from alternating to direct current. In Argentina, the completion of the laying works between Formosa and Senz Pea is noteworthy, with a total of 350 km of 500 kV lines and the NOA-NEA line which has already been energised. 2010 also saw the start of construction of lines between Comahue and Cuyo, and the substations of Formosa and Resistencia were completed. In Mexico it is worth highlighting the Juile substation and various 400 kV lines associated with wind farms.
Main T&D line milestones | 2010

Project
Completion of the Juile substations and associated lines Monterrey substations Construction and commissioning of the substation for PEEGT Energisation of the NOA-NEA lines Completion of the Formosa-Senz section Pea Construction of lines, substations and electrification Lucala Uige, Malange, Sumbe-Porto Amboin and Cabinda Stadium Opening of the project office in Austin (Texas) Start of works for high voltage lines in Uttar-Pradesh Completion and energisation of 2 substations in Maharashtra Energisation of 3 substations in Alkhissa Completion of the CESTE line and two substations in Estreito and Imperatriz Awarding of new electrification projects
Location
Mexico Mexico Syria Argentina Argentina Angola USA India India Qatar Brazil Gabon
Isolux Corsn consolidates itself as a leading company in T&D
Strengthened activity in Africa

Angola has once again proved to be the source of important activity for the company. In 2010 the rural electrification work came to an end in Malange with a total of 133 km of network (54% underground), as well as transmission lines in Sumbe-Porto Amboin and LucalaUige. In this country Isolux Corsn also built the power supply line to Cabinda Stadium, where various matches were held for the African Nations Cup. The Energy division of Isolux Corsn has reinforced its activity in Africa, thus being awarded new contracts in Gabon. The government of this country in the Gulf of Guinea awarded Isolux Corsn its second electrification contract for the sum of 34.6 M. This includes the construction of 200 km of lines from Kango to Lambarene and Ndjole going through Bifoun, as well as the construction of a substation of 225/20kV in Bifoun. The company currently operates in Angola, Mauritania, Morocco, Mozambique, Algeria, Gabon, Kenya and Equatorial Guinea.
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02. Energy
The plant in Loma de La Lata was inaugurated in 2010 | Argentina
POWER GENERATION
Intense activity in Argentina

175 MW for the countrys interconnected system
In Argentina Isolux Corsns activity is most outstanding in Patagonia, where work continues on the electric power station of Ro Turbio (the most southerly in the world) and in the cities of La Plata and Santa Fe. In these locations the company is building two open cycles for ENARSA: this is the Ensenada Barragn project, for 2x280 MW and Brigadier Lpez in Santa Fe, for 280 MW. In November 2010, Isolux Corsn opened the combined cycle power station in Loma de La Lata (Argentina). This project, carried out as a joint venture with Tecna, will incorporate another 175 MW in the national interconnected system without increasing fuel consumption or pollutant emissions. Combined cycle technology enables an increase of 50% of output without increasing fuel consumption. As such, the new electric generation is performed based on using exhaust gases from the gas turbines which were already in operation.
Main power generation milestones | 2010

Project
Inauguration of the combined cycle power station Loma de La Lata Construction for ENARSA of the two open cycles in Barragn and Santa Fe Handover of a power generation barge
Location
Argentina Argentina Angola
Angola
In 2010 Isolux Corsn handed over a power generation barge with two gas turbines with an output of 48 MW in open cycle to the government of Angola. This project, which was executed in the record time of 4 months, was considered as a solution for increasing the energy capacity of Luanda in the short term.
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INDUSTRIAL PROJECTS
Industrial projects
CITY OF ENERGY (CIUDEN). Isolux Corsn develops all the
Cutting-edge technology
Isolux Corsn is developing strategic projects for CO2 capture
The Industrial Project division is specialised in undertaking turnkey construction projects (EPC) in which high technological specialisation is particularly noteworthy. Amongst the key projects are those executed
Experts in executing turnkey projects with cutting-edge technology
for the City of Energy (CIUDEN), the National Hydrogen Centre (both in Spain), the bioethanol plant in Colombia and the modernisation and remote control of Hydraulic Power Stations in Morocco.
auxiliary, electric, mechanical and civil work equipment, as well as the distributed control system for one of the most important facilities in the world for CO2 capture. Isolux Corsn was awarded the construction of the CO2 capture and purification unit, which enables reducing emissions by almost 90%. The pilot plant located in El Bierzo (Len, Spain) features two different oxy-combustion technologies, pulverised carbon (PC) and fluidised bed combustion (FBC), and will be fully operative in 2012.
NATIONAL HYDROGEN CENTRE. Isolux Corsn awarded itself
the construction of the National Hydrogen Experimentation Centre and Fuel Cells in Puertollano (Ciudad Real, Spain), a bioclimatic building which includes the most modern energy use technology. This is one of the 24 unique scientific and technological facilities implemented by the Spanish Ministry of Education and Science. The centre will be operative in 2012 and is intended to boost a new industrial sector related with hydrogen production and storage.
BIOETHANOL PLANT IN COLOMBIA. Isolux Corsn has ma-
naged to execute its first biofuel project outside of Europe with a contract award for the company Bioenergy in Colombia. The project includes the construction of an industrial complex which includes a bioethanol plant based on sugar cane with a processing capacity of 2,100,000 tonnes of cane per year, a co-generation electric energy plant with an output of 40 MW based on husks or sugar cane chaff and other facilities intended for the milling, distillation and production of vinasses.
MOROCCO. Isolux Corsn has, since 2009, been working in a
consortium with Indra, on the rehabilitation, modernisation and automation of practically all of the hydroelectric power stations in Morocco. The contract with ONE (Office National dElectricit) covers 25 plants with 53 power generation groups and joint installed power of more than 1,700 MW. The objective is the rehabilitation of the park of hydroelectric power stations in Morocco and remote control from two remote management centres.
MEXICO. In Salamanca (Mexico) Isolux Corsn is constructing,
in conjunction with Tecna, the RSU-2 sulphur recovery unit, with the capacity for processing 80 tonnes per day. The integration projects include detail engineering, construction and training as well as start-up and behaviour tests.
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PHOTOVOLTAIC SOLAR ENERGY
Isolux Corsn, leader in the construction of EPC photovoltaic power stations

The company has, in only three years, accumulated constructed installed power of 267 MWp
Isolux Corsn has reaffirmed its pole position amongst the leading specialised companies worldwide in the construction of turnkey projects for photovoltaic solar power stations by achieving, in only three years, an ins-
In 2010 it built more than 120 MW and the largest power station in Europe
talled power of 267 MWp. The companys activity in developing photovoltaic projects ranges from administrative processing, engineering and construction through to the commissioning and maintenance of the facilities
for their entire service life. In 2010, the company built the largest photovoltaic power station in Europe in the record time of eight months: Rovigo (Italy), with 85 hectares of surface and a power output of 72 MWp. The fa-
cility was developed by the North American company SunEdison and Banco Santander. The total activity of the Group during the last year includes the construction of more than 120 MW of photovoltaic power stations
in Spain and Italy: Rovigo (72), Campania (20.4), Saelices (11), Fuentelamo (8.06) and Puglia (7.16). Moreover, Isolux Corsn built the roof for the T-Solar plant in Orense and a solar plant for the Autonomous University of Madrid.
Isolux Corsn installed a solar plant for the Autonomous University of Madrid
The management and execution of all work is underpinned by the management certifications for the areas of R&D&I, quality, environmental management and occupational health and safety.
Main photovoltaic power stations | 2010

Project
Rovigo Campania Saelices Fuentelamo Puglia 42
Characteristics
72 MWp 20.40 MWp 11.016 MWp 8.06 MWp 7.161 MWp
Location
Italy Italy Spain Spain Italy
View of the photovoltaic roof installed by Isolux Corsn in the Autonomous University of Madrid | Spain
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Rovigo photovoltaic power station | Italy

Developers: SunEdison and Banco Santander | Installed power: 72 MW | Surface: 85 Ha | Modules 280,000 | Budget: 152 M
280,000 monocrystalline and polycrystalline modules, 60 transformation booths and 1,500 electric boxes and panels have been installed
A total of 500 people and 40 companies in the region were used for the construction work
In addition to generating clean energy, the power station has all the relevant sustainability attributes
The largest photovoltaic power station in Europe

Isolux Corsn built the largest photovoltaic power station in Europe and did so in the record time of eight months. With a surface area of 85 ha and an output of 72 MW, the Rovigo (Italy) photovoltaic power station is equipped with cutting edge technology for centralised remote monitoring and operation and anti-intrusion control around its perimeter which exceeds 4 km. Developed by the North American company SunEdison and Banco Santander, this power station enables generating enough clean electricity to satisfy the annual consumption of a population with 50,000 inhabitants and to avoid the atmospheric emission of 41,000 tonnes of CO2.
With 85 hectares of surface and installed power of 72 MW
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Transmission lines in the Amazon | Brazil

Developer: ANEEL | Transmitted power: 1,050 MW | Length: 1,200 km | In operation: 2012 | Budget: 800 M
Transmission lines in the Amazon

Since 2009 Isolux Corsn has been undertaking one of the most challenging and complex energy projects. Both due to its dimensions (1,200 km of high voltage lines) and the difficulties characterising the terrain (in the very heart of the Amazon region), this is one of the most complex projects executed by the company. Isolux Corsn works on the construction of the transmission lines of 500 and 230 kV which will connect Manaos, the largest city in the Brazilian Amazon, to the countrys interconnected system and will enable the use of renewable energy for the electric consumption of the region. The difficulties of the terrain require the construction of pylons with a height of 250 m in order to cross the Amazon River and to find complex solutions to overcome the construction conditions of a thick forest landscape. The project already has all the required environmental permits.
This will enable the use of renewable energy in the region
In 2010 work camps were set up to undertake the project
The transmission lines installed by Isolux Corsn in Brazil will enable the connection of Manaos to the countrys interconnected system
The company obtained all the environment permits
Pylons with a height of over 250 m will be required to cross the Amazon River
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CIUDEN | Spain
Developer: City of Energy Foundation | Technological partner: Air Liquide | Technology: CO2 capture and storage (CCS) Budget: 10 M
Building the City of Energy

The construction of the CO2 capture and purification unit that the City of Energy (CIUDEN) Foundation awarded to Isolux Corsn will allow Spain to position itself as one of the main references in the world in R&D&I for CO2 capture and storage (CCS) technologies. This unit, located in Len, will enable converting carbon into a source of clean and sustainable energy since it is thought that CCS technologies will enable a reduction in CO2 emissions by 90%. In addition to the construction of this unit, Isolux Corsn was awarded the design and execution of the Process Control System for Oxy-combustion and CO2 Capture during a preliminary phase of the CIUDEN Technological Development Plant.
The system used will enable reducing CO2 emissions by 90% in thermal plants
The construction of the CIUDEN facilities requires the use of cutting-edge technology and a highly qualified team
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INFINITA RENOVABLES
300,000 tonnes of biodiesel in 2010

Infinita supplies biodiesel to the main Spanish oil companies
In 2010, the company which heads the production and sale of biodiesel, Infinita Renovables, achieved a production volume in excess of 300,000 tonnes in its plants in Castelln and Ferrol. Infinita is the company with the largest biodiesel production capacity in Spain, with the possibility of producing 600,000 tonnes in Castelln and 300,000 in Ferrol. The company has emphasised its distinguishing facets such as the strategic location of its plants, the availability of its own docking area which allows optimising costs and flexibility in deliveries and the quality of the product with specifications which are stricter than the standard in force.
The strategic location of its plants provides flexible supply
These advantages, along with its vast storage capacity, give flexibility to the supply and make customer and supplier management easier. In Europe, Infinita Renovables is the third company with the greatest production capacity according to the European Biofuel Observatory (Eurobserver). Its 900,000 tonnes of installed capacity place it ahead of important companies such as Biopetrol, Marseglia Group or Novaol. Infinita supplies biodiesel to the main Spanish oil companies such as Repsol, BP and other leading international operators. As such, it has contracts with international commodities companies for the supply of vegetable oil.
Infinita Renovables facilities in Ferrol | Spain
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02. Energy
Visit to the Tecna office | Argentina
TECNA
Comprehensive energy projects

Created in 1974, Tecna is an engineering and construction company specialising in the development of turnkey projects for the global energy, gas and oil markets, as well as the provision of services for energy facilities. It executes comprehensive energy projects, from the design and construction of plants to their commissioning, operation and maintenance. Tecna has formed part of the Isolux Corsn Group since 2006
Business areas
QQ Turnkey projects: execution of EPC / QQ Operation and maintenance: O&M
Tecna develops turnkey projects for global energy markets
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and has a staff of approximately 1,000 people, the majority of whom are engineers, technicians and experts in engineering and project management, with presence in Latin America, the USA, Europe and the Near East. The company focuses its activity on the sectors for the production of gas and oil both on and off shore, gas pipelines, compressor stations, oil pipelines, refining, petrochemical, electric power generation, alternative/renewable energy and nuclear energy.
Amongst the technologies offered by Tecna in the natural gas area it is worth highlighting LPG recovery plants, dew point adjustment, dehydration, removal of contaminants and compressor stations and pressure reducers. For the oil sector, this includes primary separation plants, treatment and re-injection of production water, raw treatment, removal of contaminants, pumping stations, refining units and petrochemical units.
Lump sum projects, design and provision of modular plants and comprehensive project management. QQ Engineering and consultancy: design and basic engineering, FEED studies and special engineering studies both in the area of processes and in the other specialities. QQ Automation and control: integrated solutions for the implementation of control systems and plant safety, telemetry, integration of data in corporate applications, connectivity solutions and integral data display via the Internet.
services for industrial plants whilst ensuring safe and reliable operation and the comprehensive management of the facilities according to the strictest parameters with regard to quality, safety, and environmental conservation. QQ Nuclear energy: participation in nuclear power plant projects and experimental nuclear reactors, through engineering, quality, safety, construction and commissioning services. QQ Electric energy: participation in power station projects for power generation, cogeneration and combined cycles.
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Construction
With an international vision
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03. Construction
We build with an international vision

In 2010, the Construction division in Isolux Corsn increased its turnover by 5.9% compared to the previous financial year and obtained revenue of 1.305 billion euros. In an adverse economic climate this parameter itself could be interpreted
The results obtained by the Construction division in Isolux Corsn in 2010 are proof of the continuous growth trend registered in recent years and confirm the correct bu-
siness strategy pursued. Activity linked to the international market generated a turnover of 403 million euros which represents 30.7% of total activity.
The accumulated portfolio guarantees activity over the next three years
Evolution in turnover in B
B) guarantees construction activity over the next three years. On the other hand, the growth in the international market which already represents 43.75% of the portfolio, underpins the consolidation of the business with a global vision. Suspension bridge in Soto de Ribera. Asturias | Spain
as a huge achievement. Indeed it is, however it is not the only one. The successful work developed in this area translates into two realities which are, at least, equally important. On the one hand, the portfolio accumulated during 2010 (3.626
+23%
1.233 1.170 1.061
1.305
2007
2008
2009
2010
Road construction continues to be the most important activity in the division: it represents almost 49% of the portfolio, followed by non-residential building with 19% and railways with 16%.
Composition of the portfolio by project type

5.18% 5.44% 3.22% 2.03% 0.10% 48.71%
16.26%
19,07%
19.06%
Roads Non-residential building Railways Residential building Hydraulic works Urban development Remaining civil works Maritime works
Evolution of portfolio in B +58%

3.380 3.158 3.626
2.289
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2007 2008 2009 2010
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INFRASTRUCTURES
A forward-looking strategy
The company consolidates its presence in India, Algeria, Mexico and Brazil and is participating in its first bids in countries such as Chile, Paraguay, Panama, the Persian Gulf and the Middle East.
The company has consolidated its presence in India, Algeria, Mexico and Brazil and is participating in its first bids in countries such as Chile, Paraguay, Panama, the Persian Gulf and the Middle East. The positive evolution in the Construction division of Isolux Corsn is based on a development strategy which adheres to the following criteria: maintaining the relevant position which corresponds to it in the national
43.5% of the construction portfolio corresponds to the international market
market, consolidating its presence in the countries in which it permanently operates (India, Mexico, Brazil or Algeria) and ratifying its importance in the international division, supporting itself in these countries in order to expand to nearby zones with the possibility of consistent development. The success of this strategy is based on elements such as local management and closeness to the customer. With this awareness, the company
ensures the transfer of the knowledge acquired from setting up in new countries. Another key element for understanding the efficacy of this strategy is the growth and expansion obtained by optimising concession projects. Finally, it is also worth highlighting tried and tested efficiency for extending the capacities of Isolux Corsn to new projects in countries where presence and localisation are stable.
Growth against the odds

The construction sector is currently under a great deal of strain and this is backed up by economic indicators: tenders in the public sector in Spain are characterised by an interannual reduction by 32% (this is as much as 54.7% in General State Administration), the surface area approved for new projects has also fallen by 12.23% and loans for construction activities are constantly characterised by a downward trend etc. Within this obviously adverse context, the results for the Construction division in Isolux Corsn take on a truly outstanding dimension.
Internationalisation of the portfolio

The growth of the portfolio in the Construction division of Isolux Corsn represents 7.3% compared to the previous financial year. With 3.626 billion euros, this portfolio guarantees the construction activity (at the same level as in 2010) over the next 34 months. The analysis of the portfolio reflects the internationalisation of the company: 43.5% is based on the foreign market and on stable activity in 6 countries. In 2010, Isolux Corsn registered significant growth in India and Algeria, consolidated its activity in the markets in Mexico and Brazil and etched out expansion possibilities in countries such as Chile, Uruguay, Panama, Bangladesh and in areas such as the Persian Gulf and the Middle East where the company is participating in various bids.
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CIVIL WORKS
Isolux Corsn strengthens its presence in India

The company is working on the construction of four motorways
In 2010, Isolux Corsn started the works on three new road projects in India. Specifically, this is an expansion to six lanes of the NH-2 in its section between Varanasi and Aurangabad (192 km) with a total budget of 520 million euros. The NH-6 (133 km) which connects Maharashtra/Gujarat to Hazira Port and has a total budget of 274 million euros and the NH-8 which runs between Kishangarh
Isolux Corsn has a portfolio with a value of 640 M in India
and Beawar (94 km) with a total budget of 185 million euros. In conjunction with these developments the main part of the work carried out on the NH-1, section Panipat-Jalandha, was completed with an annual production value in 2010 of 95 million euros. Isolux Corsns construction portfolio in India at the end of the year was 640 million euros thus becoming one of the companys main markets.
Latin America, the other decisive factor

In Mexico, the two motorways in progress obtained their highest production rate in 2010: PeroteBanderilla, where construction works made considerable progress in 2010 and Saltillo-Monterrey. Furthermore, in 2010 work started on the construction of road No.4 of the National Road Network in Argentina, a project which has a total budget of 405 million euros. Moreover, the company maintains an important presence in Brazil with the construction of the federal roads BR 116 and BR 324, with a budget of 474 M.
Projects started during the financial year 2010

Project
Adaptation to 6 lanes of the NH-2 section: Varanasi-Aurangabad National road network road Number 4 Adaptation to 6 lanes of the NH-6 section: Surat-Hazira Adaptation to 6 lanes of the NH-8 section: Kishangarh-Beawar High speed line, section: Tolosa-Hernialde High speed line Antequera-Granada section: Pinos Puente-Granada Construction of the A-40 motorway section: Torrijos-Toledo Urban development of the sector S1 in the City of the Environment in Garray Soria Construction of the A-21 motorway Jaca-lmite de Navarra in Sigs
Diversification in Algeria
In Algeria, the Construction division of Isolux Corsn diversifies its activity between railways and hydraulic works and is one of the most strategic markets for the company. With regard to railway activity, in 2010 progress was made on the construction of the Oran tram, one of the companys most important projects. With regard to hydraulic activity, work continued on the supply to Mostaganem (81 million euros) and a contract was awarded for the supply of the pipeline from the desalination plant in Macta for 45 million euros.
Total budget in M
520 405 274 185 112.5 95 74 61 46
Activity
Roads Roads Roads Roads Railway Railway Roads Urban development Roads
Location
India Argentina India India Spain Spain Spain Spain Spain 61
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CIVIL WORKS
Spain, with high speed

Isolux Corsn has participated in the construction of all the Spanish high speed lines
In Spain, work in the Construction division of Isolux Corsn is highly diversified, where the role played by the company in high speed construction is particularly outstanding. Spanish high speed In the Railway division, the works on the high speed lines experienced their highest production rate in 2010, both the Madrid-Barcelona motorway (in the Nudo Trinidad
The company awarded itself the section TolosaHernialde of the Basque Y with 112.5 M
section) and the Orense-Santiago motorway (Amoeiro section). Moreover, in the same year work started on the high speed line Antequera-Granada (section Pinos Puente-Granada) with a budget of 95.2 million euros. Over the last year, Isolux Corsn was awarded the contract for the construction works for the section Tolosa-Hernialde, in Guipzcoa, which constitutes the eighth section of the so-called high speed
Basque Y. The project has a budget of over 112.5 million euros to be spent over a period of 26 months. Most of it will be assigned to the tunnel. Roads In roads the construction of the A-40 motorway was started (section: Torrijos-Toledo with a total budget of 73.6 million euros) and the A-21 motorway Jaca-Sigs in Navarra (total budget of 46.4 million euros).
Works on the high speed line Antequera-Granada | Spain
High speed viaduct over the Llobregat River | Spain
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BUILDING
Important architectural works

The company primarily builds non-residential projects
The contract award for construction works in the prison Centro Penitenciario de Preventivos in Barcelona was one of the most significant milestones in Isolux Corsns Building division last year. This construction has a total budget of 463 million euros. With regard to work in progress, another important project is the enlargement and refurbishment of Guadalajara hospital which has a budget of 110 million eu-
Isolux Corsn built the stations for Line 5 of the Barcelona Underground
ros. This project will increase the capacities of the hospital facilities since there will be an increase from the current 382 beds to the 771 found in the new centre. The work carried out on the Line 5 station architecture for the Barcelona Underground must also be highlighted. Furthermore, the construction of the new terminal in Santiago de Compostela Airport (171 million euros total budget) is still ongoing.
Construction works on Santiago de Compostela Airport | Spain
Leioa Faculty of Social Sciences. Pas Vasco | Spain
Building projects in 2010

Project
Prison Centro Penitenciario de Preventivos de Barcelona (surface right) Construction of the new Santiago de Compostela Airport terminal Architecture of the Line 5 stations of the Barcelona Underground 64
Total budget in M
463 171 74.1
Activity
Building Building Building
Location
Spain Spain Spain 65
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Safe transport between Veracruz and Mexico City

Perote-Banderilla represents one of the most emblematic projects undertaken by Isolux Corsn in recent years in Mexico. The construction of this communication route which connects the Port of Veracruz, the most important in the country, to Mexico City was started in 2008 with the objective of easing traffic and reducing transport times and costs. This motorway, which had an award budget of 190.6 million euros and an execution period of 37 months, was created as the quickest and safest alternative for transport between these two locations. Throughout 2010, the company continued with the execution of the road works with a length of 60 km and a width of 12 m which include various structures and viaducts as well as a tunnel with a length of 346 m.
Perote Banderilla motorway | Mexico

The motorway communicates the Port of Veracruz, the most important in the country, and Mexico City
Developer: Estado de Veracruz | Length: 60 km Opened: 2008 | Execution period: 37 months Award amount: 190.6 M
More than 757 people participated in the construction of the motorway
The project required the levelling of a surface area measuring 10.7 Mm3
The central pile of the K-61 viaduct has a height of 114 metres
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Aduana Taylor | Argentina

Client: Ministry of Federal Planning, Public Investment and Services of the Argentine Republic Year of construction: 1855 | Execution period: 16 months | Amount: 18.7 M
Historical restoration in Buenos Aires

Owing to the second centenary of its independence, the Government of the Argentine Republic commissioned Isolux Corsn with the restoration works and restoration of value of the Museum of the Casa Rosada de la Aduana Nueva. This gave the city a museum-like cultural atmosphere within the former structures of the Aduana Taylor, a building which is very popular with visitors. For this project, Isolux Corsn harmonised the relevant construction works with restoration and archaeological operations, thus safeguarding the foundations of previous constructions and other findings of cultural value. The new building includes museum rooms, administration and services areas and a zone intended exclusively for the exhibition of the mural Ejercicio plstico (Plastic Exercise) by David Alfaro Siqueiros, made in 1933 and declared an Asset of historical-artistic national interest in 2003.
Isolux Corsn restored the Aduana Taylor for its use as a museum
Isolux Corsn restored frames, walls and vaults
The building was built on San Miguel Castle and the Nueva Aduana
An exhibition of the mural by David Alfaro Sequeiros Plastic Exerise is featured

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High speed in the Pas Vasco

Featured within the new railway network of the Pas Vasco, the section in Guipuzcoa Tolosa-Hernialde constitutes the eighth known as the Basque Y. With an award budget of more that 112.5 billion euros to be spent over the period of 26 months, the section will have a length of 3,811.7 metres most of which will be comprised of a tunnel. The project, awarded to Isolux Corsn, comprises the execution of three tunnels excavated in a mine, two false tunnels, four viaducts, a section in a ditch and an evacuation gallery in Montezkue. The peculiarity of this project is that it has been
Y Tolosa - Hernialde | Spain

Client: Basque Government | Award year: 2010 | Execution period: 26 months | Amount: 112.5 M
The route will go underground over a section of 700 metres in order to reduce the impact on the landscape
designed in such a way that it respects, to a maximum, the natural environment it goes through, taking into account landscape integration measures such as reuse of surplus from excavations, the lowering of slopes, an improved integration of the tunnel mouths in the hillside, greater excavation of the roads, the use of false tunnels or the recovery and creation of new areas suitable for agriculture and fishing activities. For all of these measures the Basque Y represents an example to be followed with regard to minimising the visual and acoustic impact.
Most of the 3,811 metres of the section go through a tunnel
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Environment
Responsible management
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HIDRULICA HYDRAULICS
Responsible management for the integral water cycle

Isolux Corsn has the accumulated experience of over 30 years in the management of hydraulic infrastructure projects. This experience has always been characterised by its firm commitment to efficient and responsible management in any project related to the integral water cycle. The Environment division, with increasingly greater global projection and under full expansion of the business, participates in public and private bids throughout the area both on the national and international market. In 2010, revenue increased by more than 39% and the international portfolio already represents 53% of the Hydraulics business. Global activity The construction works for pipelines, and pumping for supplying Mostaganem in Algeria, continue to be one of the most important projects in progress in this area. Internationally the companys activity in Latin America is also outstanding where Isolux Corsn is active in the WWTP in San Felipe (Tucumn) in Argentina, and in the enlargement of the WWTP Norte II, in Puerto Vallarta (Jalisco, Mexico). The company undertakes projects which include the design, construction, operation and financing of infrastructures in the integral water cycle and implements its activity in the following areas:
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The international portfolio already represents 53% of the business in the Environment division
QQ Hydraulic infrastructure
QQ Water treatment and
Underground water catchment Water pumping and lifting stations Irrigation networks Supply and sewage networks Sewage pipes
purification Drinking water treatment plants (DWTP) Wastewater treatment plants (WWTP) Desalination of water (SWTP) Hydroelectric power stations Electric equipment Control systems WWTP San Felipe. San Miguel de Tucumn | Argentina All the activities include the execution of services for construction, development and detailed engineering and civil works. This also includes supply, installation of electro-mechanical equipment, electrical facilities, commissioning, maintenance, training of the staff assigned by the client and operation. The Environment division has been awarded certificates according to the Company Register number ER-0569/1996, under the requirements of the Standard UNE-EN ISO 9001:2000, issued by AENOR, as well as the Environmental Management Certificate number GA-2001/0048 under the Standard UNE-EN ISO 14001/2004.
Construction projects for the supply of Mostaganem | Algeria
n Main contracts in execution during 2010

Project Pipelines and pumping systems for connection to the Mostaganem desalination plant WWTP in Tomelloso and Argamasilla de Alba and collectors (Ciudad Real) WWTP San Felipe, San Miguel de Tucumn Operation and maintenance of the WWTP La China (Madrid) DWTP collectors Community of La Campana de Oropesa (Toledo) WWTP Quinta do Conde Construction, commissioning and operation of the Cardeosa DWTP (vila) Enlargement of the WWTP Norte II, in Puerto Vallarta (Jalisco) Service for the operation, conservation and maintenance of the sewage systems of Agramunt, Balaguer, Baronia de Rialb, Oliana, Ponts, Rossell and Trrega (Lleida) Services for the operation, conservation and maintenance of the collector systems and purification plants of Vielha, Les, Bossost, Escunhau, Canejan and Bagergue (Vall DAran, Lleida) Enlargement of the Trrega WWTP (Lleida) Construction and operation of the WWTPs in Camarena, Arcicllar and Camarenilla (Toledo) Grouping of effluents and Brenes WWTP, (Sevilla) Amount 106,869,349 24,645,153 20,912,676 16,313,937 14,786,378 8,500,000 8,384,553 7,165,730 7,725,817 5,794,200 4,892,210 4,889,782 4,161,907 Location Algeria Spain Argentina Spain Spain Portugal Spain Mexico Spain Spain Spain Spain Spain 75
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Campana de Oropesa DWTP | Spain

Supply population: 43,000 inhabitants | Treatment capacity: 150 l/sc | Treated water tanks: 6,200 m3 | Pipeline length: 50 km
The Oropesa DWTP project has yielded revenue of almost 15 million euros
Clean water for fourteen municipalities

Treatment capacity of 150 l/sg In 2010 Isolux Corsn completed the construction of the project for the supply system for the Community of Campana de Oropesa in Toledo. The projects consist in the catchment of raw water in the Titar river and in the Navalcn reservoir. From these points the water is driven up to the drinking water treatment plant. The water treatment is conventional including mixing, flocculation, lamellar clarification and filtration in two phases, one over sand bed and another final one in activated carbon. Additionally, the plant has an ozonisation system for the metering of ozone both in the mixing chamber and in the carbon filter inlet.
A DWTP has been completed in Toledo thus supplying 43,000 inhabitants

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Facilities, Maintenance and Services
Expansion of the business

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Electric substation on the high speed line Madrid Valencia | Spain
FACILITIES
Expansion of the business

Isolux Corsn was awarded the contract for the traction substations for the AVE in the section Vigo-A Corua for 42 M
The division of Facilities, Maintenance and Services at Isolux Corsn offers a vast array of features both on a national and international level. This ranges from the construction of electric systems and railway signalling to electric power station facilities, airport beacons, facilities in unique buildings and their control systems, mobile or fixed telecommunications and integral maintenance. Facilities In the area of general facilities it is worth highlighting the important work of this division in 2010. The company won the contract for the electric, mechanical, control, detection and extinguishing facilities in the new terminal building in Santiago de Compostela Airport. Moreover, the company completed the facilities for Line 5 of the Barcelona Underground, the infrastructures of the Blood Bank in the same city and the Neona-
The Group carried out the electric installation of the North Sea Giant, the largest off-shore multipurpose supply vessel in the world | Spain
The company started its activity in India with the Mohali Shopping Mall
tology Plant and the new ICUs in Valme Hospital in Sevilla. The award of the two new substations for the Spanish Electric Network in Mezquita (Teruel) and Carril (Murcia) and the facilities for the Bielsa tunnel round off the main contract awards for the company in Spain. On an international level the company started its activity in India with facilities in the Mohali Shopping Mall, 300 Km to the north of Delhi. Moreover, the division is responsible for the electrical and mechanical facilities of ships, safety facilities in prisons and guidance and recognition facilities for vehicle registration plate recognition in car parks. Transport In the Transport Infrastructure division, as the Groups main milestone, within the railway sector it is worth highlighting the award of traction substations for the high speed section Vigo- A Coru-
a for an amount in excess of 42 million euros to be executed over the period of 30 months. With regard to Railway Control Systems, the company put out to contract and completed the High Speed Energy Remote Control Madrid-Valencia and the Barcelona-Figueres section. In 2010, Isolux Corsn completed the construction of the Electric Power Station for La Palma Airport and accesses to the South Terminal of Barcelona Airport. Moreover, the company completed the remodelling of the Electric Power Station for Pamplona Airport.
TELECOMMUNICATIONS
The most important operators place their trust in Isolux Corsn

The company undertook projects for the installation of fibre optic
In the telecommunications division, Isolux Corsn implements projects for the main national and international operators. Throughout 2010 important companies such as Telefnica or Vodafone placed their trust in the Group for projects related to the deployment of fibre optic networks, the preparation of mobile telephone sites and the installation of data processing centres.
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05. Facilities, Maintenance and Services

MAINTENANCE AND SERVICES
High satisfaction services

The company consolidated itself in maintenance activities for energy networks and facilities
The company consolidated its activities in the area of maintenance for energy and telecommunications networks, industrial and integral building maintenance. Isolux Corsn has achieved a high degree of satisfaction in the T4 maintenance work and maintenance of the Endesa, Iberdrola and Unin Fenosa networks.
The Group manages the walkways in Barajas Airport
SECURITY
Undertaking international security projects

Watsegur has certifications which guarantee its quality
In the area of security, Isolux Corsn works via its branch Watsegur, which has the necessary homologations to offer security systems both actively and passively. Watsegur has certifications as both an installation and maintenance company in order to undertake projects for fire fighting systems and has all of those related to environment and quality standards connected to its activity. Amongst the main projects under82
Isolux Corsn controls security in AVE and Suburban Train workshops
taken by the Isolux Corsn branch it is worth highlighting the adaptation of the facilities and the access control to Terminal 4 in Madrid Airport and the security installation in the AVE and Suburban Train workshops. Outside Spain, the company has increased its turnover by executing projects for security, equipment, general facilities and protection for prisons and processing plants.
The company undertakes comprehensive security projects

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Factories
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06.Factories Instalaciones mantenimiento y servicios
EMESA
For more than fifty years, Emesa has been a leading reference in the manufacture of towers for the wind power sector and unique metal structures. The company is located in Coirs (A Corua) where it has a factory over an area of 109,000 m2 and a production capacity of 45,000 tonnes per year. In 2010 Emesas activity was affected by the difficult situation characterising the construction sector in general and wind power, the companys main action line, by turnover.
CORVISA
Corvisa is a leading company in the manufacture and sale of products for roads, urban streets and airports whose main activity is the manufacture of bituminous emulsions and the execution of projects for bituminous slurries. With over thirty years of activity and a turnover of 10 million euros the company has maintained similar results in recent years. Corvisa currently fundamentally operates in Spain, however intends to expand its activity to international markets such as Brazil and Libya. The implementation of R&D&I projects is another decisive factor for the companys future.
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TYPSA
Founded in 1962, Typsa is one of the main national manufacturers of concrete beams with four factories in Spain located in Zaragoza, Sevilla, Toledo and Cdiz. In 2010 the company obtained a production volume similar to the previous year of approximately 260,000 beams between line beams and those for road devices.
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Corporate Social Responsibility Report

The Value of Commitment
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07. Corporate Social

Responsibility Commitment with sustainability is a value inherent in the company
Isolux Corsn undertakes its activity with a growing vocation of sustainability and commitment to all of its stakeholders. This commitment, contained within and supported by the companys business strategy, forms part of its company culture and supports the principles of corporate responsibility.
Basic principles
Legal compliance of all company and professional activities undertaken
by the company and in all countries where any company in the Group is active.
Dialogue, integrity and transparency in the Groups company and
professional activities towards interested parties, thus providing true, accurate and accessible information.
Scrupulous respect for the principles included in the Declaration of
Human Rights.
Prevention of pollution and the minimisation of adverse ambient effects
which could be caused by our activities.

Search for continuous improvement and the quality of our services by
providing employees with the system required for achieving customer satisfaction.
Efficacy and efficiency in all actions, making use of the most suitable
means in each case.

Boosting of R&D&I in the activities we pursue. Collaboration in the economic and social development of the areas in
which we act.
The Value of Commitment
The implementation of these principles and those of the Global Compact, which we signed last year, form the basis for the commitments featured in our Corporate Responsibility strategy. QQ Commitment to employees QQ Commitment to the creation of value QQ Commitment to the community and the environment QQ Commitment to innovation and to R&D&I
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Responsibility
Stakeholders
Description
Employees: human capital is one of the most important resources in the company Clients: the company has adapted and adjusted to the specific requirements of each group and has carried out tailor-made management of these Shareholders: the company expresses its firm commitment and willingness to create long-term value for them Suppliers and subcontractors: they represent a key element for the development of the business Society: the company interacts constantly with society and considers it essential to manage its priorities and expectations in order to contribute to the development of the areas in which it operates Regulatory bodies: A strategic element within the Group Business partners: A strategic element within the Group
ISOLUX CORSN IS COMMITTED TO ITS 10 PRINCIPLES

Key points
Retaining talent Professional development Reconciliation Social benefits Satisfaction Quality Innovation Transparency Creation of long-term value Innovation Transparency Professionalism Respect for human rights Ethical attitude Sustainable development Transparency Close monitoring of regulatory standards Relationships based on trust Long-term relationships
The Group is a member of the United Nations Global Compact

During the financial year 2010, Isolux Corsn made its membership of the United Nations Global Compact official and, as such, joined the initiative in the Group to promote the voluntary commitment to implement the 10 principles which govern this mission.
The signing of the Global Compact is proof of the companys commitment to transparency
The Group is committed to submitting an annual progress report in which it will describe its endeavours to comply with the Principles signed as part of public responsibility and transparency, and in accordance with the Progress Policy of the Global Compact.
Principles for commitment

1 Support and respect for the protection of fundamental human rights recognised internationally within its remit of influence. 2 Assurance that practices do not compromise human rights. 3 Support for the freedom of association and effective recognition of the right to collective negotiation. 4 Elimination of any kind of forced or coerced labour. 5 Eradication of child labour. 6 Elimination of discrimination in employment and occupations. 7 Application of preventive actions which favour the environment. 8 Promotion of initiatives which favour increased environmental responsibility. 9 Favouring the development and dissemination of environmentally-friendly technologies. 10 Work against corruption in all its facets, including extortion and bribery.
The communication channels

Group
Employees
Channels
Intranet: only accessible to employees Corporate documentation Communication seminars. Annual meetings Company committee Health and safety committee Webpage: www.isoluxcorsan.com E-mail: info@isoluxcorsan.com Satisfaction surveys A purchasing system which enables having all the information regarding suppliers online and the possibility of consulting comparative tables with information on other projects or services in the organisation. All of this enhances efficiency and the smooth running of the contracting process. Founder of the Obralia portal with a database of more than 30,000 suppliers Direct dialogue with NGOs, associations and foundations Specific participation in associations and foundations Webpage: www.isoluxcorsan.com E-mail: info@isoluxcorsan.com Press conferences, direct interviews, etc. Open days: guided visits to sites and facilities for schools and other social groups
Clients
Suppliers
Society
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07. Corporate Social Responsibility

HUMAN RESOURCES
Develop Human Capital

A fundamental characteristic in Isolux Corsn is balanced growth in recent years. The Group closed 2010 with a total staff of 6,465 employees, of whom 65.15% belong to Spain. The staff is distributed into central and peripheral structure staff, technical and site staff. In Spain, of the total staff, 84.99% are men and 15.01% are women. The average age is 39. The average seniority is 7.73 years.
Commitment to employees
Contributing to achieving the business strategy
2010 was characterised by investing in people as a key element to meeting our strategic objectives. After several years of constant growth the management of talent and commitment to our employees are a priority. To this end, our effort is focused on boosting the development of professionals by facilitating the policies, procedures and tools that enable them to grow and achieve the maximum goals in their careers. To achieve this, the Human Resources strategy is based on four key aspects: QQ Develop Human Capital QQ Boost the internationalisation strategy QQ Maximise internal talent QQ Guarantee our excellence
Staff by zones
Staff % 65.43 23.16 6.34 5.07 Europe America Africa Asia 4,230 1,497 410 328
Spain
Average staff age (years) Average seniority (years) % of men % of women 39 7.73 85 15
The management of talent and commitment to employees is a priority
From the HR Department we contribute to the development of human capital by applying best practices with regard to recruitment, selection and the internal promotion of our talent. QQ As proof of our firm commitment to the development of our talent, all vacancies are published internally via the corporate Intranet in order to boost internal promotion and mobility. QQ We have an IT application built into our management systems which enables publishing internal vacancies, therefore it is the candidates themselves who enter their academic and professional history. This means that our selection team can immediately access the applications all at once. QQ We have collaboration agreements signed with the main Universities and most prestigious academic institutions and we regularly participate in the most relevant Employment Forums. QQ More than 70 students in recent years with technical degrees with excellent qualifications have been awarded a grant with the objective of subsequently joining the staff. QQ We have recruited over 100 people for work experience after completing their studies to give them the opportunity to apply the academic skills they have learned.
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HUMAN RESOURCES
Boost to the internationalisation strategy

For many years our strategy has been focused on international expansion by penetrating new markets and increasing our level of activity in those in which we are active. In accordance with this strategy we are now active on four continents. We are looking for people who can adapt to our dynamic culture, committed to participating in large projects anywhere in the world, motivated to work with people from different countries and who contribute a high level of technical knowledge and linguistic skills. As a result of this, every year we recruit professionals in different countries and a more diverse number of nationalities to ensure that there are more than 43 different nationalities distributed throughout the companies in the Group. Against this backdrop, those of us who form part of Isolux Corsn must be prepared to address the challenge presented by multiculturalism. To this end, we promote training programmes and diversity integration policies, we encourage geographic mobility and develop corporate tools which encourage global management. Within the context of this policy to promote international mobility during 2010, 264 people were expatriated to countries other than their country of origin and 90 were temporarily displaced. Within this context of internationalisation it is essential to be able to attract the talent of the best professionals who contribute to meeting our goals. To do so, policies and actions are adopted directed at the integration and cohesion of staff throughout the world:
Staff by geographic areas | 2010
Europe
QQ We publish our policies, manuals, procedures and other corporate standards in the Groups main languages. QQ Meetings are encouraged by division within the company the objective of which is to dynamise the functional network of contacts, establish synergies, share knowledge and specify joint strategies. As such, there was a meeting of the Human Resources Managers for Angola, Algeria, Argentina, Brazil, Spain, Mexico and India in order to analyse the current climate and set forth joint strategies. QQ The participation of professionals from various countries in corporate training programmes intended to disseminate corporate policies, standards and global action criteria. QQ Corporate training in various countries such as the implementation of Quality, Environment, Health and Safety Systems in Mexico, Argentina, Brazil and India. Within this global context we continue with the development and deployment of IT applications which contribute to our strategic objectives: QQ Employee Portal through which professionals can consult and modify their personal and professional details, linguistic skills, consult and print out their payslips. QQ Manager Portal (Self-Service Manager) through which the directors can consult the professional information of their collaborators, complete performance assessments and assure the assessment process log. QQ International deployment of our HR management tool. This tool enables homogenous and rapid management of the various HR processes.
66%
Asia
5%
Africa America
6%
23%
More than 43 different nationalities amongst our employees
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Responsibility HUMAN RESOURCES HUMAN RESOURCES
The company maximises internal talent

Isolux Corsn has become a reference in the sector to be known as an engineers school, due to its participation in emblematic projects in various sectors from construction to power generation and energy transport during which our professionals have the opportunity to innovate and show off their skills. Constant learning and the identification, recognition and management of talent are strategic development axes for people and the business. In 2010 we endeavoured to implement the process of Performance Assessment which enables us to identify talent, and personalise development needs and maximise our specific high value training programmes. The Performance Assessment process strengthens high value training.
Guarantee our excellence

We have continued with the endeavour to maintain our high level of professionalism which has made us a leading reference in the sector. To do so, the training plan included 2,738 people carrying out 80,380 hours of training actions throughout 2010. From the outset, we considered Training as a strategic activity to meet our objectives by providing professionals with the necessary knowledge, techniques and skills for their constant development. The company used the most upto-date methodologies with the commitment to facilitate access to training by as many employees as possible. As such, in 2010 66.93% of employees managed to attend some kind of training action with an average of 29.4 hours per participant. The Training Plan 2010 was designed to be comprehensive in such a way as to cover the main development areas:
The Performance Assessment process strengthens high value training
QQ Development of the Performance Assessment process. All employment positions were analysed and a profile was drawn up of each of these. Subsequently the key competences and skills were identified. Once the positions were specified and the competences associated with them, an IT application was developed and added to the Intranet and our HR management system. We organised various awareness seminars with executives and assessors who participated in the process. This ambitious project has enabled us to assess 1,720 professionals. QQ Our commitment to internal mobility is reflected in a total of 127 promotions in Spain during the 2010 financial year. QQ Development of the 1st Edition of the Higher Course in the Management of Large Projects. The programme is strategic as the source of identifying future project leaders and is aimed at project managers, team leaders and site managers. Designed specifically for the company 35 people participated in this 1st Edition. In total, more than 300 hours of online training were given and 90 hours of in situ training given by speakers from the most important Business Schools. The programme discusses technical project management, economic management, planning and the development of executive skills. The objectives of the course were to provide participants with management knowledge, strategies, methods and suitable techniques for correct project management by strengthening executive and leadership skills and boosting the culture of Isolux Corsn. QQ As in previous years, we continued with the Master Grants Programme or the Postgraduate Courses. Unlike other years, and in order to provide maximum value and contribute more to professional growth, the company awarded grants in programmes aligned to our specific needs, directed at the execution of international projects and programmes or postgraduate master in the Management of Civil Works, Project, Construction and the Maintenance of High Voltage Electric Infrastructures.
67% of the employees participated in some kind of training action in 2010
Distribution of training
Actions POR, Quality and the Environment Technical Company Management and Skills Languages IT Tools Total 132 76 27 46 38 319 Participants 1,328 377 291 244 498 2,738
QQ Training in the Prevention of Occupational Risks, Quality and the Environment QQ Technical Training QQ Training in Company Management and Skills QQ Training in Languages QQ Training in IT Tools
The Higher Course in the Management of Large Projects was held for 35 students for 88 hours in situ and 300 online | Spain
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QQ This was carried out with the 4th Edition of the Development Programme for Young Talent with the objective of identifying, developing and retaining our youngest talent. 58 new high-potential professionals were added to this programme who had access to tailor-made training programmes and who subsequently undergo a special assessment and monitoring process.
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Responsibility
Throughout the year 319 training actions were designed, planned and executed. The distribution of training by companies in the Group is as follows: Distribution of training
Company Grupo Isolux-Corsn, S.A. Corsn Corviam Construccin, S.A. Isolux Corsn Concesiones, S.A. Isolux Corsn Aparcamientos, S.A. Isolux Corsn Servicios, S.A. Isolux Ingeniera, S.A. Gic Fbricas Watsegur Total Actions 45 116 7 2 13 133 1 2 319 Participants 191 989 30 34 177 1,294 6 17 2,738 Hours 5,235 30,114 465 614 5,006 38,475 178 294 80,380
QQ With regard to the Training set forth in the State Agreement of the Metal Sector actions were adopted in the three cycles: Permanent Training Room, Training in POR and Basic Training Level in POR.
POR Training | Metal Agreement

Cycle First training cycle in POR: Permanent training room Second cycle: Training in POR Third cycle: Basic training level in POR Total Participants 69 131 165 365 Hours 1,527 2,689 9,900 14,116
During 2010 training on the Prevention of Risks and Health and Safety represented the maximum priority with the objective of making commitments which, with regard to training, are planned for the collective agreements which affect our activity. QQ As an outstanding fact, during 2010 we took up the challenge to train all our professionals on the actions set forth in the 4th General Agreement of the Construction Sector and in the State Agreement of the Metal Sector. In total more than 32,667 hours of training and 1,254 people participated in these actions. QQ With regard to the Training set forth in the 4th General Agreement of the Construction Sector, actions were adopted in the three mandatory cycles: Permanent Training Room, Training in POR and Basic Training Level in POR.
QQ Finally, it is worth highlighting that 7,537 hours of training were also given on the Prevention of Occupational Risks which were not required either by the 4th General Agreement of the Construction Sector or the State Agreement of the Metal Sector for a total of 537 participants.
POR Training | Construction Agreement

Cycle First training cycle in POR: Permanent training room Second cycle: Training in POR Third cycle: Basic training level in POR Total Participants 48 235 69 352 Hours 1,584 5,290 4,140 11,014
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Respect, equal opportunities and non-discrimination

Isolux Corsn assumes the responsibility to maintain a free working environment thus ensuring that each worker is treated fairly, with respect and dignity. Likewise, the definition of an effective policy for equal opportunities is pursued with the objective of ensuring that all employees can undertake their professional activity properly and develop professionally within the company.
Isolux Corsn implements integration policies for the disabled
The company guarantees the absence of any type of discrimination for reasons based on culture, age, gender, disability, ethnic origin, political ideology or any other type. In Spain, during 2010 work was continued actively on the implementation of the integration policy for the disabled in Group companies whilst services are currently provided for a total of 57 disabled workers (51 men and 6 women).
Company Management is firmly committed to boosting effective equality between men and women. During the last year the number of women executives was increased to six (one executive in 2009 compared to seven executives in 2010). Equally, during 2010 there was an increase of 114 % in the number of women in managerial positions in proportion to the staff of previous years.
Freedom of trade union association and collective negotiation

Isolux Corsn respects the freedom of trade union association by its employees and the effective recognition of the right to collective negotiation of staff representatives and trade unions in accordance with the legislation applicable in each country. Spain is the country which has the strictest labour legislation with regard to the representation of workers. During 2010 various electoral processes were held. The following were formed or renewed:
The company reached agreements on social improvements with its workers
QQ Company committees: Isolux Ingeniera, S.A. Madrid (17 members); Isolux Corsn Servicios Madrid -Ambulance Section-(13 members) and Isolux Corsn Servicios Madrid -Maintenance Section- (9 members). QQ Staff representatives: Isolux Ingeniera, S.A. Sevilla (1 representative). Likewise, collective negotiation is promoted and boosted with the legal representatives of the relevant workers in each of their areas having reached agreement on various subjects (labour calendars, salary reviews, social improvements, equality, etc). During 2010 there was active participation in the negotiation of various agreements in the sector area, collective agreements and specific company agreements.
Trade union representation

Centre Isolux Ingeniera Corsn-Corviam Construccin Gif Fbricas Emesa Isolux Corsn Servicios Number 54 60 5 13 29
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Responsibility
HUMAN RESOURCES
HUMAN RESOURCES
Commitment to the Health and Safety Policy

Safety is an essential value in the implementation of all of the Groups activities
Through our Health and Safety Management System we commit ourselves to ensuring the health and safety of our workers, as well as that of our suppliers, contractors and collaborating companies. To this end, in our Health and Safety Policy, which is applicable to all the countries where the Group is active, we assume the commitment to implement all activities whilst bearing in mind that safety as an essential value as well as a continuous improvement of the Health and Safety Management System. The basic points of this policy are: QQThe analysis of procedures, processes, techniques, resources and raw materials in order to eliminate, reduce or control various types of concurrent occupational risks. QQThe guarantee to provide general information for employees through their representatives, as well as the provision of direct information concerning specific risks which affect their various workstations or functions and the applicable prevention measures for these risks. QQ The guarantee to consult employees and to permit their participation within the framework of all issues which affect occupational health and safety. QQ A guarantee to train employees on occupational health and safety in line with the proper undertaking of their job. QQ The guarantee to provide the required human and material resources to comply with health and safety regulations. QQ The development, implementation and periodic review of the Management System for the Prevention of Occupational Risks suited to our organisation in addition to adopting measures which enable improving its effectiveness. Thanks to the involvement and commitment made by everyone (employees, suppliers, contractors and collaborating companies), Isolux Corsn is making its way towards building the desired safety culture. Proof of this is the downward trend in the accident rates in recent years.
Creation of a health and safety structure in each country

Given the significant growth of international business, and once each project has been provided with the human and material resources required to develop the Health and Safety Management System, Isolux Corsn has gone further and created a Health and Safety Structure in each of the countries where it operates. With a corporate manager in charge, whose fundamental mission is to ensure compliance with the legal standards in each country, the H&S culture is promoted amongst all workers regardless whether they are company employees or employees from collaborating companies. Coordination is guaranteed with corporate policies and managers in central headquarters. The Health and Safety Management System is in line with the standard International Health and Safety Assessment (OHSAS) 18001:2007 and is applicable to all activities and countries where Isolux Corsn undertakes its activities.
The company applies its safety commitments to all countries where it operates
The basic documents of which the management system is comprised are structured into five levels: QQ The Prevention Plan describes the activities of each of the companies and their organisation. It sets forth the functions and responsibilities of the various hierarchical levels and the objectives to be met. QQ The manual for the Prevention Management System contains Management guidelines in order to ensure compliance with the Policy for the Prevention of Occupational Risks as well as the commitments and objectives achieved. QQ The procedures for the Management System describe in detail how the different activities are to be implemented in order to meet the requirements and commitments stipulated in the manual. QQ The working instructions and the standards for the Prevention of Occupational Risks describe how specific activities are performed which involve special risks for employees health and safety. QQ The records feature the results of the preventive activities carried out ensuring compliance with the Management System requirements.
In order to guarantee and strengthen the integration process courses are periodically given on training, implementation and awareness of the Management System. Nevertheless, all the information is available on the corporate Intranet with access from any of the countries in which the Group is active.
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Responsibility HUMAN RESOURCES
Management tools
QQ New IT tool Isolux Corsn has a specific IT tool for the management of the prevention of occupational risks which enables monitoring health and safety activity. This tool allows the analysis and assessment of results in addition to facilitating the detection of areas for improvement both in the different countries in which the Group undertakes its activity and globally. It is planned that this tool is operative in all countries throughout 2011.
More than 700 audits to control the extent to which the System is implemented
Audits
Divisions Corporate Energy Environment Facil, Main, Serv. Concessions Factories Construction Total Number 2 45 63 451 2 3 160 726
HUMAN RESOURCES
Management of the prevention of occupational risks

The Management System has been reviewed in order to adapt it to the Groups new dimensions and requirements and has become a protocol of international action. The internal requirements contained in the Management System with regard to safety exceed those legally established in the countries where the company undertakes its activities. Throughout 2010 the company issued a series of reports in different countries in which Health and Safety management was discussed with regard to compliance with legal requirements and the control of documentation and safety during the execution of different projects. These reports were used
QQ Audits All the companies in Isolux Corsn periodically undergo a series of internal audits. Their purpose is to compare and verify not only the degree of compliance but also the implementation level of the Prevention Management System and the extent of the preventive culture in the organisation. These internal audits are performed both by the actual experts in the health and safety service and external organisations. During 2010, the number of audits performed for various projects, services and work centres in Isolux Corsn was 726 in the various countries where it operates. Likewise, the Health and Safety Management System is audited by external organisations who verify the extent and level of compliance in the application of the aforementioned standards.
Each country has the means to meet the requirements of the Health and Safety Management System
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as the basis for proceeding with the implementation of Health and Safety Management Systems in various countries in the interest of continuous improvement. During the last quarter of 2010 the Management System implementation phase was started, adapted both to legal requirements and the characteristics of each of the countries where Isolux Corsn is active. It is planned that this system is implemented and operative in all countries throughout 2011. With this implementation the Group aims to build an outstanding health and safety culture which enables satisfying the highest standards in safety, by achieving the international involvement
of the entire organisation, that of its suppliers, contractors and collaborating companies on an international level. For the improved monitoring and control of the system, the company has provided each country, and the different contracts, with both the material and human resources required. Communication with the Health and Safety Managers in each country is direct and continuous with the corporate manager of the Health and Safety Service. A report is issued on a monthly basis reflecting the status of Health and Safety in our activities in each country which enables issuing a global report which is given to Management.
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Responsibility
QQ Information on activities The Corporate Health and Safety Service issues a monthly dashboard for the control and monitoring of activity with regard to the prevention of occupational risks. As part of the information featured is the monitoring of international accident rates. This dashboard is submitted to the Executive Committee for its analysis and information. Another indicator included in the monthly activity reports is training in the Prevention of Occupational Risks. This is included in the General Annual Training Plan, both with regard to compulsory training (as indicated by the various agreements) and site training on specific risks related to the activity being undertaken given to the staff and subcontractors. It is worth highlighting the yearly drop in the number of awareness actions. These actions consist of in situ explanations directed at staff who are performing their work incorrectly, whether forming part of the companys staff or that of a subcontractor. The drop in such actions is the result of the influence of the health and safety culture amongst our staff as well as amongst the staff of those companies that collaborate with us.
Workers are increasingly aware of health and safety issues
Management indexes
Indicators Drafted and revised safety plans Business activity coordination meetings Accident investigation information Internal audits Visits to sites and work centres Ergonomic studies/hygiene assessments Emergency plans Health and Safety Committee meetings Awareness actions 2008 2,135 761 488 1,043 4,854 3 14 32 4,096 2009 2,033 721 387 1,024 4,584 10 18 39 3,572 2010 1,825 554 188 711 3,586 15 25 42 2,469
QQ Accident report In 2010, thanks to the effort and commitment made by the company, the number of minor accidents decreased significantly (-38.54%) as did the number of days for sick leave (-36.57%). This, at the same time, indicates a considerable reduction in accident rates and a reflection of the performance level with regard to the Health and Safety
culture adopted by all the Groups employees. One of the basic activities in this aspect is the investigation of accidents and incidents and the identification of their causes as a key element in the proactive management of safety. The identification of causes, as well as the implementation of corrective measures, enables the company to prevent accidents from being repeated.
* Data referring to Spain
Management indexes
Indicators Training actions Training action hours Trained workers 2008 1,428 6,511 7,186 2009 1,498 8,109 7,296 2010 1,509 7,735 7,838
Of the 1,509 training actions in 2010, 1,397 were talks on site, given to 6,504 workers both from the company and subcontracted and 112 actions correspond to specific training given by entities specialised in the activities undertaken as stipulated by the various agreements. This training was given to 1,254 participants.
Number of accidents 2008-2010

Accidents Minor accidents Serious accidents Fatal accidents Total On the way to and from work Average staff Sick leave days Ratio of sick leave days Accident ratio 2008 488 0 0 488 31 5,948 10,821 1.82 0.082 2009 384 2 1 387 32 5,427 7,620 1.4 0.071 2010 236 3 0 239 22 4,945 4,833 0.98 0.048 Var 2009-2010 -38.54% +50.00% -100.00% -38.24% -31.25% -8.88% -36.57% -30.00% -32.39%
Accident rates 2008-2010

Indicators Incident rate Frequency rate Severity rate 110
2008 75.65 41.87 0.99
2009 65.76 35.96 0.77
2010 44.81 23.90 0.53
Var 2009-2010 -31.85% -33.54% -31.16% 111 111
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Health check-ups
In the area of Occupational Medicine important management procedures have continued to be developed in the protection of health. QQ Medical check-ups for workers In total, 5,390 medical check-ups (1,148 in the company headquarters) were carried out. Of all the medical check-ups, 897 correspond to new employees and 4,493 to annual periodic check-ups. All of these were subject to the specific medical protocols based on the risk assessment of the various workstations. QQ Medical care Isolux Corsn provides direct medical care through doctors and Technical Health Care located in some of its offices, and indirect care through an external prevention service for its entire workforce in each of the countries in which it is active. QQ International activity In all of the activities undertaken by Isolux Corsn the legal requirements in force in each country are complied with, especially with regard to the health and safety of its employees. To ensure this it collaborates with local clinics and, if necessary, specialised institutions. All staff, whether local, displaced or expatriated, have a medical care insurance policy.
Respect for privacy and data confidentiality

In 2010 safety measures were audited with regard to data protection
Isolux Corsn safeguards, in particular, the right to privacy and data confidentiality by always acting in accordance with the provisions of Organic Law 15/1999 of 13th December on the Protection of Personal Information and the Regulation on Security Measures (Royal Decree 994/1999 of 11th June). In the General Data Protection Register we keep all the files under our responsibility which contain personal information and there is a security document which it is mandatory to complete for all staff with access to automated personal information. Furthermore, in compliance with the schedules established by law, in 2010 the biannual audit took place led by an external auditor to review the suitability of the implemented security measures. Additionally, the annual review was carried out by the external auditor on the existing IT controls in the organisation by reviewing all aspects related to logical security, physical security, the separation of functions and other aspects which ensure the correct access and confidentiality of the information managed by the Group.
Health campaigns
Isolux Corsn provides medical care in all of the countries where it operates
QQ Vaccination In the area of employee health protection there were vaccine campaigns for specific illnesses: 75 vaccines for seasonal flu and 231 for hepatitis. The staff to whom these vaccines were given correspond primarily to maintenance workers in hospital facilities, those involved in transporting sick patients or collecting solid urban waste from wastewater treatment plants and those in the company headquarters. QQ Blood donation In 2010, two blood donation campaigns were carried out with the participation of 11% of the workforce in the work centres where they were implemented. These donations could be used for up to 210 patients and will enable performing 17 surgical operations, to transfuse platelets to 6 patients and to carry out 2 liver transplants.
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Responsibility HUMAN RESOURCES
Reconciliation of working and family life

Isolux Corsn endeavours to reconcile the working and family life of its workers. During 2010, there was an increase in the number of people who took advantage of the various permits which help and promote this reconciliation process. Reconciliation
Country Spain Algeria Argentina Brazil 3 3 Maternity M 1 W 54 M 139 5 4 38 1 Paternity W Reduced working day M 9 W 67 Other permits M 49 4 1 W 18 3 2
Commitment to value creation

Isolux Corsn makes inroads in its international growth by committing to economic development in all the countries where it operates
Isolux Corsn pursues sustainable growth by generating value simultaneously in all of its stakeholder groups. This growth strategy is underpinned by a vast project portfolio in various countries with great potential for generating value in the energy sector, construction and concessions. These projects are managed by human capital comprised of more than 43 nationalities which represents one of the bases on which Isolux Corsns competitive advantage stands. As such, the company is committed to
The company goes up 32 positions in the ENR 2010 Top International Contractor
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deepening and consolidating an internationalisation process which was already started in previous financial years. This strategic decision by Isolux Corsn, which anticipated the changes in the international economic cycle, is complemented by our commitment to consolidating ourselves as a sound reference in each and every one of the companys business divisions. This fact has culminated in the Groups intense presence on international markets, an undertaking which has been reflected in the rise from position
88 to 56 in 2010 in the ENR Top International Contractor classification. We are aware that to strengthen this international expansion strategy we must adapt the existing human capital in the company as quickly as possible to the international challenges ahead which will be vital if we are to consolidate our presence amongst the best. This commitment to growth has a direct impact on the generation of value throughout society by fomenting the economic development of the countries where the company operates.
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Responsibility VALUE CREATION
Generation of value with controlled risk

Isolux Corsn is aware of the risks which can be derived from undertaking it activities. To this end, it has implemented various management systems which have been certified by external entities of renowned prestige. The Management Systems for Quality, Environmental Management and Health and Safety, according to the international standards ISO 9001, ISO 14001 and OHSAS 18001, provide guarantees for the quality of service, prevention of pollution and the prevention of occupational risks for our shareholders, clients and society as a whole. In harmony with the new international challenges facing the Group, a system has been implemented for the Management of Corporate and Project Risks in order to ensure success in the companys decision-taking. The methodology applied is based on that undertaken by the Committee of Sponsoring Organizations of the Treadway Commission (COSO II). It focuses on the proactive management of potential events with particular emphasis on those which could be positive for the Group. The reporting system enables completing the continuous improvement process in the affected procedures. These management tools ensure that Isolux Corsns policy with regard to risks is conveyed both to collaborators and business partners as has been occurring with other corporate policies.
The Groups management systems have been accredited by external entities
VALUE CREATION
Our principles and commitments are transferred to the supplier chain

The success achieved by the company, as well as that planned for the future, would not be possible without the constant collaboration of our suppliers. We find ourselves in a global market of clients, projects and suppliers. The balance and combination between the use of suppliers with local presence in each ac-
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Isolux has a code of ethics and good contracting practices in the management of purchasing
tion area, and important world suppliers, provide the management of purchasing and contracting with greater efficiency. Isolux Corsn has recently made every endeavour to develop the skills and tools required for optimising processes for the identification, assessment, selection and homologation of suppliers anywhere in the world.
The processes associated with these functions are governed by two bases: transparency and equal opportunities and the strict enforcement of all legal, social and environmental standards applicable in each case. To this end, Isolux Corsn has a code of ethics and good contracting practices which is applicable to all purchasing.
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Responsibility VALUE CREATION VALUE CREATION
Supplier selection and assessment plan

For the implementation of contracting processes for goods and services Isolux Corsn has a corporate purchasing standard and detailed contracting procedures according to the type of business in question. All of these are applicable everywhere and determine the separation of functions directed at complying with the best purchasing practices which exist on todays market. The teams of people responsible for such procedures are trained in these standards and procedures. As such, they have the necessary knowledge of all the legal, fiscal and logistical aspects which govern transactions for products and services as a whole. Our teams bid throughout the world for the hiring required based on a predetermined panel of suppliers already approved, and on the inclusion of new alternatives which could add value according to the market we are operating in at any given time. To this end, there is a continuous monitoring process of potential world suppliers for those product ranges with high rotation or a strategic element. Prior to being awarded any product or service an absolute prerequisite is to have already been homologated. Offers from suppliers are subject to a strict comparison and negotiation process based on which, after technical and commercial assessment, the final contract award is placed. The assessment and selection of
Purchasing management tools

Isolux Corsn has IT tools the purpose of which is to ensure the robustness and traceability of all purchasing processes from one end to another. This is included as from the emergence of the need in a purchasing up to documental conciliation of invoices and orders once the process has been completed. In the same way, the systems facilitate and improve clientsupplier communication.
The systems favour global client-supplier communication
Our IT support is based on the one corporate application which features the information regardless of the project type, site or reference country. Therefore, not only does communication flow quickly, but the accessible information globally enables us to capture any previous experience with the supplier, thus optimising our future contracting based on all types of synergies.
Innovation in management
The company works with suppliers in order to ensure delivery dates and optimise costs
Suppliers are, without a doubt, a key factor for a successful relationship with our clients. As such, against a changing business backdrop from a global geographical, technological and macroeconomic perspective, it is absolutely essential, amongst other actions, to ensure there is constant innovation in supplier management techniques, new supply strategies are set up and management tools are optimised all of which is aimed at giving our clients added value. Annual objectives in supplier management are quality assurance, fulfilment of execution schedules and optimisation of the total cost.
Supplier reports to assess the quality of service
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suppliers is carried out for each of the Groups projects and services depending on their capacity to supply products and provide services in accordance with specific requirements. This assessment does not only include technical and economic aspects but also ensures compliance with social and environmental aspects. This process is completed with the incorporation of all the suppliers and subcontractors with whom the Group is going to work.
A record is drawn up based on the results of these assessments and any other actions derived from them using an IT application set up throughout the company under the control and supervision of the Purchasing Department. Each Manager for the Organisational Unit who makes a purchase, or subcontracts, issues a report per supplier. In it they assess the quality of the service provided or the product supplied.
Suppliers 2007-2010 | Main statistics

Indicators / year Total volume of purchases from suppliers (B) Total volume of purchases from local suppliers (B) Total number of suppliers % of the total of local suppliers 2007 1.874 1.482 18.844 79.24% 2008 2.732 1.675 19.127 75.30% 2009 2.408 1.862 19.572 77.24% 2010 2.550 2.002 20.015 79.43% 119
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Responsible communication
Isolux Corsn manages corporate communication transparently and responsibly. The company maintains a fluid and professional relationship both with mainstream media and economic media as well as with those from specific sectors and national and international experts. In 2010, the communicative activity of Isolux Corsn was not immune to the digital revolution or to the globalisation process in which both the Group and the world of communication find themselves immersed. Within this new context the company has started to transform the relationship with its audiences of interest, giving increasing media focus to the international area and consolidating the presence of the brand within the online environment.
Isolux Corsn adapts its communication to the digital era and to the global reality
Presence of Isolux Corsn in the media in 2010

QQ In 2010, and from the Communication Department of Isolux Corsn in Spain, a total of 1,339 news items referring to the company have been monitored*. QQ 2,443 references were made to the Group. QQ In terms of space, these figures translate into 5,608 press modules, the equivalent of more than 112 complete pages of information. Added to this is the companys presence in digital media which represents the largest volume of dissemination.
Information by media type

Press Online
20%
80%
Information by media type

57 286
QQ Of the total news items monitored* in 2010 with regard to Isolux Corsn, 80% corresponded to online media (1,073 items) and the other 20% to written press (266 items).
Fourth quarter Third quarter Second quarter First quarter
48 251 98 63 274 262
Items according to national and international dissemination

QQ The dissemination of items registered in Spain offers the following overview: 940 national items and 399 international items.
*Analysis carried out on the items received in the GBA clipping service in Spain
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Press Online
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Institutional relations
Isolux Corsn has made a relevant institutional endeavour in countries such as Spain, Mexico, Brazil. Italy and Algeria which is reflected by the organisation, collaboration or participation in
Isolux Corsn participated in over 40 events in different countries throughout the world
more than 40 events in 2010. In addition to events linked to own development of the projects carried out by the company - laying of first stones, visits by authorities or inaugurations- Isolux Corsn
has lent its support, through its presence in several associated fairs and employment forums, to technical study faculties and to the processes of talent capture amongst university graduates.
QQ January Inauguration Cua Verde ODonnell. Madrid | Spain Visit by the Ministry for Development to the Fuentecisneros Park and Civic Centre. Alcorcn | Spain Angola Electricity. Luanda | Angola
QQ February 1st stone Procosur Premises. Tax-free area. Cdiz |Spain Inauguration Cabreiros Vilalba section of the Ferrol-Vilalba AG-64 motorway. Lugo | Spain Day events special foundation laying. Burgos | Spain
QQ March Visit by the regional Minister for the Environment WWTP Camarenilla. Toledo | Spain 1st stone BIFOR. Talavera | Spain Water fair. Exhibition of the hydraulic project carried out in the area. Mostaganem | Algeria
QQ April Inauguration of Casa de Juventud. Parla | Madrid | Spain Employment FORUM FUTURCIVIL. Barcelona | Spain Employment FORUM ETSI PUBLIC WORKS. Madrid | Spain Employment FORUM INDUFORUM, Industrial ETSI. Madrid | Spain EUROMED Conference Water. Barcelona | Spain BIPTIMA Fair. 3rd International Biomass and Energy Services Fair. Jan | Spain
QQ May Inauguration Fuentecisneros Park and Civic Centre. Alcorcn | Spain Inauguration Remodelling Buero Vallejo Theatre. Alcorcn | Spain 1st stone PAU LOS MOLINOS. Getafe | Spain SIEE POLLUTEC Fair. Oran | Algeria
QQ June Day event on Projects of Geotechnical Interest. College of Civil Engineers. Madrid | Spain 1st stone Faculty of Medicine. Granada | Spain Congress Angola Electricity | Angola Inauguration WWTR Trrega. Lleida |Spain Opening to traffic of the 2nd belt of SanSebastinDonostia. San Sebastin |Spain 1st stone section AVE Porto-Miamn. Orense | Spain 1st stone DWTP Cardeosa. vila | Spain
QQ July Inauguration Business Park Entrecaminos 2nd Phase. Ciudad Real | Spain Inauguration RadazulTabaiba Beach. Rosario. Tenerife | Spain
QQ August Inauguration of the High Performance Centre of Lon attended by the President of the Government, Jos Luis Rodrguez Zapatero. Len | Spain Visit by authorities to the Tomelloso WWTP. Ciudad Real | Spain
QQ September 1st stone Health Centre. Carabanchel. Madrid | Spain 1st stone WWTP Moncofa. Castelln | Spain Presentation Electrolineras in Car Park Health Centre. Crdoba | Spain Contract signing of the National Centre of Hydrogen in Puertollano. Ciudad Real | Spain Inauguration motorway. 4th Centenary Ciudad Real-Grantula. Ciudad Real | Spain Inauguration DWTP Oropesa. Toledo | Spain 1st stone DWTP Campo Limpo. Sao Paulo | Brazil
QQ October 1st stone Moncofar Desalination Plant. Castelln | Spain Inauguration of the Norponiente belt of the Saltillo motorway. Sections 2 and 3. Saltillo-Monterrey | Mexico
QQ November
QQ December
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Inauguration Rovigo Inauguration of the Solar Plant. Rovigo |Italy David Siqueiros mural 7th edition of the in the Aduana Taylor by the President Awards by the ChamCristina Fernndez de ber of Commerce of Kirchner. Buenos Aires Brazil which are given | Argentina annually to persona Visit by Cristina Ferlities and institutions nndez de Kirchner who have made a conand the Ministry for tribution to the relations Federal Planning, between Brazil and Investments and SerSpain. Madrid | Spain vices, Julio De Vido, to Sponsoring of the 9th the remodelling works Gala Cadena SER, as for the Aduana Taylor the platform for making and the Casa Rosada the official presentaMuseum. Buenos tion of the Talavera de Aires | Argentina la Reina Pio XII Car Park Project in the presence of local authorities, Council and Regional Government of Castilla La Mancha. Talavera de la Reina | Spain
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Commitment to quality in all our activities

The commitment to quality is a strategic tool with which Isolux Corsn seeks to increase the trust of its clients. This commitment represents a priority which is not only very important when ensuring our clients loyalty, but has also been used to capture new clients who have been impressed by our business model.
Quality policy
In Isolux Corsn, as a global concern active on four continents, we are fully aware that the growth and competitiveness of our company depends directly on the satisfaction level that we achieve with our clients wherever they may be. To this end, for more than fifteen years we have had a Corporate Quality Policy in which our organisation endeavours to: QQ Develop and implement Quality Management Systems appropriate to the organisation and in accordance with the principles stipulated in the international standard ISO 9001:2008 and, within this policy, adopt measures which enable the continuous improvement of the efficiency of the implemented systems. QQ Comply with the requirements applicable to the products and services supplied as required by the mandatory standards and specifications stipulated by the clients for whom these are carried out. QQ Optimise the management of the working processes and methodologies, information, supplies, resources and capacities and of internal or external relations required in the implementation of the activities.
New clients trust our business model
The Corporate Quality Policy ensures the improvement and efficacy of services
QQ Set-up and control compliance with objectives consistent with this policy and in accordance with the organisations capacities. Ensure that these objectives contribute to improving the quality of our products and services and the efficacy of the quality management system. QQ Periodically review this policy in order to ensure that it is in line with the Managements vision and strategic objectives and with the requirements detected at any time in the environment of the social market and inherent in the implementation of the business activities. The Management ensures the implementation of the necessary measures in order to guarantee knowledge of and commitment to this Quality Policy by all the members of the organisation.
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Internal audits
In Isolux Corsn we attach great importance to performing internal audits, using them as a tool which contributes to maintaining a high level of implementation for our management systems in any business area and in all countries where we operate. Thanks to vast experience in quality management, Isolux Corsn has a team of highly qualified internal auditors with the capacity to cover all Isolux Corsn activities in any part of the world. During 2010 we increased the number of internal quality audits by 80% compared to 2009.
External audits
Once a year, the Quality and Environmental Management Systems for the companies in Isolux Corsn are assessed by independent certifying bodies of renowned international prestige such as AENOR or DNV. In recent years, external auditors have highlighted various strong points in Isolux Corsns companies amongst which are:
During 2010 we increased the number of internal quality audits by 80%
Management is involved in compliance with the management systems
The increase in internal audits has also led to an increase in the total number of non-conformities detected. Nevertheless, if we take into account the number of deviations detected for each internal audit carried out, in 2010 we detected 11% less than in 2009.
Corporate area:
The support and involvement of Management in
compliance with and the effectiveness of the management systems.

The effort made in the management of R&D&I,
Quality and the Environment of the Group for the maintenance and improvement of the systems.
The graphic analysis and log of the compiled in-
formation in the process monitoring reports for IT systems. Number of audits

2009 Corporate Construction Engineering and Services Total 2 22 50 74 2010 6 72 70 148 Group Construction Engineering and Services Total
Number NCs/IA
2009 2.00 3.36 3.34 3.31 2010 1.00 2.81 3.30 2.96
Social action: submission of computerised mate-
rial for reuse via NGOs.

The integration of the R&D&I Management Sys-
tem with the Groups Quality and Environmental Management.

Performance management in the organisation. The quality of the Corporate Social Responsibility
Report. The deviations detected during this year were, generally, more minor and occasional. Internal audits, by being considered as efficient monitoring and control tools, contribute to the positive perception of our clients with regard to our quality management systems.
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Responsibility
EXTERNAL AUDITS
Engineering and Services area:

The review reports of the system by Management
Construction area
High quality of the verification list used to carry out
with regard to information analysis.

The organisations involvement in improving the sys-
the internal audits on the projects and of the reports generated as a result thereof.
The control of drawings and distribution to sites. The documental management of the quality certifica-
tem and the search for solutions which benefit operational efficiency by using IT applications.
Excellent quality of the final site documentation. Planning and monitoring of the tests to be carried out. Information and log of compiled information in reports
tes of the materials used in the projects.

The very strict control of quality records on site, espe-
for key accounts.

Involvement by staff. Tidiness and cleaning in audited projects. Documental control of audited projects.
cially with regard to traceability (concrete, keystones, steel, etc.) and in the execution of the test plan.
Waste management on-site. The established health and safety measures for
containing spillages or emergency environmental effluents in the Machinery Park.

The high degree of self-control in the quality of the
sites and the good inspection methodology applied to them.

Intensity in the detection and solution to deviations
associated with the application of management systems in projects (non-conformities).

Transparency in the handling of management sys-
tem information.
Generally speaking, in all of the centres visited the
technical review reports for the project units.

Generally, documental control on sites. The control of the receipt and release of documen-
tation in the Projects Service within the Engineering Division.

The traceability and control of the receipt of materials
on site.
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New Passenger Terminal in the Port of A Corua | Spain
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Customer satisfaction
QQ Engineering and Construction The satisfaction of our customers in these business areas is measured indirectly by completing a simple survey which is subsequently analysed. The questions featured in the survey measure their satisfaction level with regard to various aspects which range from drawing up the offer through to the processing of complaints, whilst including the quality of the documentation exchanged during the execution process or the quality of the project finally submitted. Each of the answers given is assigned a numerical value in such a way that at the end the result of each survey is converted into a score between 0 and 100. In addition, our clients have the option of making comments regarding their answers, as well as giving us their suggestions for improvement.
Most clients positively assess the companys work
During the last three years an improvement has been recorded with regard to customer satisfaction measured through our surveys (information referring to projects in Spain). In 2010, the assessment given by our clients for each of the aspects assessed at the end of the project was, for the most part, good or very good. QQCar Parks Customer service is of particular importance in the car park business where meeting the needs of
our clients is part and parcel of the activity. Gaining customer loyalty in such a competitive environment becomes one of the main objectives for the management staff (managers and operators), as well as for monitoring and security staff. All of our car parks have a permanent user support service which guarantees solving minor vehicle problems. Moreover, given the location of many of these, the mobile breakdown signposting material is available in Spanish, English and French.
Commitment to the community and the environment

Social responsibility and respect for native cultures and customs
The main objective of Isolux Corsn with regard to social issues is to harmonise our social investment with our responsibility as a company. To do so, as a company expert in engineering, building and managing infrastructures for transport, the environment, energy and services, we play an important role in the structure and economic evolution of the countries where we undertake our business. Our intention is to improve the quality of life and the opportunities for those who are in these communities. That is why we opt for implementing our projects in line with the responsibility which is derived from our business areas in which we undertake our activity. Hence the reason that most of our social investment is in Spain, Brazil and Mexico where the Groups presence has been consolidated for years. Whilst in Spain the recipients of our contributions are foundations whose main objective is the professional integration of those with disabilities, in Brazil and Mexico the main beneficiaries are local populations affected by our projects without overlooking other countries where the Groups presence is to a lesser extent and social investments are still in the development or study phase.
Satisfaction
Year 2008 2009 2010 Year Score out of 100 76.96 77.57 80.04
Our intention is to improve the quality of life of the communities where the Group operates
Information from the period 2008-2010, extracted from the database Group Customer Satisfaction, included in Isolux Corsn Groups Quality and Environment Management Tool.
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Responsibility
QQInvestment policy During 2010, Isolux Corsn assigned more than 1.6 million euros to the development of its 43 social initiative projects. In Spain, the main beneficiaries of our social action have been the Adecco, Apai and Once foundations. Their mission is the professional integration of those with a disability and the contributions made by the Group have built the foundations for three projects the development of which is in the implementation phase. Sport has also been another central area in this regard. Our collaboration with the Numantia Sport Club Foundation for the training of young sports people, the Iber Basketball Club Guadalajara and the Feminine Basketball Club of Ourense are proof of this. Contrary to our social action in Spain, in the international area the contributions made go beyond mere money. The presence of the Group in specific countries means the employment and hiring of local manpower
Adecco, Apai and Once, the main beneficiaries of Isolux Corsns social action
and suppliers. This boosts the local economy, improves the professional training of our workers and their occupational conditions, the development of local infrastructures for the implementation of our projects and, above all, the supply of water and electric energy. On many occasions the rural environment is the recipient of new building processes or new technologies and we teach respect for the environment and highlight the need for conservation.
Contributions by action area

Education
Activities in the Apai Association Art, culture, sport
1.87%
11.91%
Humanitarian aid
2.21%
Social wellbeing
84.01%
Isolux Corsn collaborates in events with high social content
Contributions as a result of the project

Occasional contributions
24.45%
Sports sponsorship present in the Groups social action The company reserves part of its resources for social action in Angola
Social investment
132
75.49%
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Responsibility COOPERATION
Our presence continues even after our projects have been completed
The presence of the Group continues even after our projects are up and running and, on many occasions, depending on the geographical location and the nature of the project, we donate the infrastructures set up for its execution to the local populations affected. QQ In Cabinda (Angola) we have provided all the equipment required for one of the rooms of their clinics to be used by the local population once our projects have come to an end. QQ In Ro Turbio (Argentina) work has continued on renovating the buildings and kitchens of the YCRT (Ro Turbio Coalbeds), to ensure that once the projects have been completed they remain the property of the municipality. QQ In the area of influence of the Perote-Banderilla motorway (Mexico), various actions have been adopted to educate the local population on the conservation of running water sources. Moreover, they have also been provided with drinking water intake and pumping systems which guarantee the supply to the population of Paso de San Juan (Jilotepec) and the cleaning of irrigation channels and the supply of material to labourers for the use of the water.
Isolux Corsn donates equipment and staff to the local community once the projects have been completed
COOPERATION
The local population, the main beneficiary

As a company Principle and, above all, in countries where there are poor sanitation facilities, Isolux Corsn contributes in this area with central and/or local authorities. QQ In Cabinda (Angola) there is an available and accessible doctor for all workers on our sites and for the local population. In Angola anti-ophidic kits are supplied (antidotes for snake bites) which have been made available for the local population.
Isolux Corsn provides medical care in all of the countries where it operates
QQ In Brazil we have collaborated with the Department of Health to control and fight malaria, particularly in the Amazon region where the energy business is established. QQ In Haiti, after the earthquake suffered by the country early in the year, Isolux Corsn collaborated by donating medically equipped ambulances for United Firefighters Without Frontiers.
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Responsibility COOPERATION
Associations
For many years now the companies in Isolux Corsn have been actively participating in more than 25 professional associations in the sectors in which it implements its activity.
The company participates in more than 25 professional associations
Associations:
QQ Spanish Association for Quality QQ Association of Communication Executives QQ AENOR QQ Economic and Commercial Office of Spain in Casablanca QQ Association of National Building Companies (SEOPAN) QQ Association of Developing Economists QQ Photovoltaic Business Association QQ iiR Portugal-Sponsor Angola QQ Association of Water Technology Companies (ASAGUA) QQ Genoa Financial Club QQ Latin American Association of Metros and Undergrounds QQ AMICYF Association QQ Spanish Association of Assembly and Maintenance Companies (ADEMI) QQ PPP Forum QQ Technical Association of Emulsions (ATEB) List of the most important professional or sector associations in which Isolux Corsn companies participate as of December 2010.
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Responsibility QUALITY AND THE ENVIRONMENT
Commitment to the environment and business development

Environmental Management Policy
The care of the natural environment wherever we undertake our activities and our concern for aspects related to the environment on a local, regional and international level are decisive and competitive factors throughout all business areas. As proof of this we have, for more than 10 years, established a Corporate Environmental Policy, in which Isolux Corsn commits itself to: QQ The development and implementation of Environmental Management Systems appropriate to the organisation and in accordance with the principles stipulated in the international standard ISO 14,001:2004 and the adoption of measures which enable the continuous improvement of the efficiency of the implemented systems. QQ Setting up and verifying compliance with environmental objectives and challenges consistent with this policy and in accordance with the organisations capacities. QQ Ensuring that these objectives and challenges contribute to the progressive increase of good environmental conduct and the efficiency of the environmental management system. QQ Applying practices aimed at the prevention and reduction of pollution thus trying to minimise the most significant environmental impacts. QQ Complying with the applicable environmental legislation and other requirements that the organisation endorses related with its environmental aspects. Maintaining the relevant available information which is kept properly updated. QQ Periodically reviewing this policy in order to ensure that it is in line with the Managements vision and strategic objectives and with the requirements detected at any time in the environment of the social market and natural in the implementation of the business activities. QQ The Management ensures the implementation of the necessary measures in order to guarantee knowledge of and commitment to this Environmental Policy by all the members of the organisation and its external collaborators. Likewise it ensures that it is available for any stakeholder and the public in general.
Identification of the environmental aspects of projects

Wherever it is active, Isolux Corsn identifies the environmental aspects associated with the tasks being performed in projects and classifies them according to the following categories and subcategories: 1. Real environmental aspects: water pollution, consumption of natural resources/products, soil damage, acoustic emissions, atmospheric emissions, inert waste, hazardous waste, urban waste and the use of raw materials. 2. Potential environmental aspects: accidents and incidents.
Isolux Corsn implements practices aimed at preventing pollution
In 2010, within the category of real environmental aspects the highest percentage corresponds to the generation of inert waste (28%), followed by the generation of urban waste (18%) and hazardous waste (16%), along with the consumption of natural resources/products (12%). On the other hand, within the category of potential aspects the highest percentage corresponds to the possible occurrence of environmental accidents (61%), followed by the possible occurrence of an incident (39%).
Assessment of the environmental aspects identified above

After identifying the environmental aspects associated with the activities undertaken in it, each project proceeds with their assessment by following the system established by Isolux Corsn, which has been standardised for all countries. This system is based on the analysis of various characteristics which specify the degree of impact that an environmental aspect can have on the surrounding natural environment: certainty, time considerations, class, magnitude or environment. Each characteristic is given a relative value: low, medium or high, based on objective criteria. As the result of this assessment, a value is obtained which reflects the impact of each aspect on the natural environment. If this value is equal to, or greater than, 100, the aspect is considered as significant. This requires controls and measures to be stipulated to minimise the impact; if 100 or less, the aspect is considered as negligible.
Minimisation of significant environmental aspects

26% of the environmental aspects identified during 2010 in our projects finally resulted in being significant. Within the real significant aspects, most corresponded to the generation of hazardous waste (69%). With regard to the rest it is worth highlighting inert waste (9%), atmospheric emissions (7%) and damage to land (6%). The potential aspects that were assessed as significant in 2010 correspond, to a large extent (91%), to possible accidents, compared to possible incidents.
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Responsibility
Waste management
The management of the waste we generate as a result of our activities, in all the projects we execute, is one of the key aspects in environmental operational control. Proof of this are the training and awareness sessions which are usually carried out as part of our projects in order to raise staff awareness, both the companys own and that of subcontracted companies, on the need to correctly separate and store waste and on the importance of the procedures to be followed for its correct management whether it be hazardous or inert. Isolux Corsn provides collection containers for all the waste produced in the projects it executes and hires authorised waste agents to ensure that they are removed and subjected to the most suitable treatment according to the waste. This ensures adequate separation and management of the waste produced as a result of the activities undertaken in all countries where it operates. The waste produced in offices is managed via the municipal collection services in those places where they are located or via authorised private agents in other cases.
Waste management in 2010

Description (Code CER-Stat rev.3) 01.1 01.2 01.3 02.1 02.3 03.1 03.2 05.1 06.1 06.2 06.3 07.1 07.2 07.3 07.4 07.5 08.2 08.4 09.1 09.2 10.1 10.2 10.3 11.1 11.3 11.4 12.1 12.2 12.3 12.6 Used solvents Acid, alkaline or saline waste Use mineral oils Chemical waste outside classification Mixed chemical waste Chemical deposits and waste Industrial effluent sludge Infectious sanitary waste Ferrous material waste Non-ferrous material waste Mixed material waste Glass waste Paper and cardboard waste Rubber waste Plastic waste Waste from wood Discarded electric and electronic equipment Machines and components from discarded equipment Waste from food products and from food preparation Plant waste Domestic waste and similar Mixed or unsorted materials Separation waste Sludge from wastewater treatment Uncontaminated drainage sludge Content of septic tanks Construction and demolition waste Asbestos waste Waste from natural minerals Polluted soil and sludge from drainage Quantities (kg) 2010 355 60 14,774 4,891 3,908 680,203 71,680 980 142,654 12,200 856 23,000 65,770 1,420 277,105 721,171 3,009 6,212 5 170,012 1,047,237 13,980 182,397 7,733,240 90 72 247,735,372 11,243 25,787,926 8,146
Data referring to projects executed in Spain.
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Responsibility QUALITY AND THE ENVIRONMENT
Environmental protection, a shared objective

Isolux Corsn, aware of the environmental impacts which could be derived from the activities it undertakes, has established an Environmental Management System for the control and minimisation of these impacts in all countries where it operates. After vast experience in environmental management in projects and services, in 2010 Isolux Corsn adopted several initiatives aimed at meeting the following objectives:
Maximum control in environmental management
QQ Identification of legal requirements in all countries where it operates and assessment of compliance. QQ Development of good practices in environmental management regardless of the country in which the activity is being undertaken. QQ Standardisation in the identification and assessment of environmental aspects. QQ Adoption of minimising measures for environmental risk. QQ Provision of the resources required for environmental prevention in all countries where its activities are carried out. QQ Provision of qualified resources for environmental management on site for all projects and in all countries where it operates. QQ Training in environmental issues of project teams who are active in all countries where its activities are carried out. QQ Setting up of reporting and monitoring guidelines for indicators to consolidate the information originating from the various countries where it operates. QQ Implementation of execution controls and internal audits in its projects in all countries where it operates. QQ Setting of objectives, follow-up and review of systems.
In order to meet these objectives, during the last year the following actions were carried out: QQ Diagnosis of compliance with environmental legal requirements and compliance with the requirements stipulated in international standards ISO 9001 and ISO 14001 in all the main projects being carried out by the Group: Thermal electric coal-fired power station with an output of 240 MW in Ro Turbio ( Argentina). Conversion to combined cycle of the thermal power station in Loma de La Lata (Argentina). Thermal power station in Barragn (Argentina). Rehabilitation project and expansion of the HV, MV and LV lines in the cities of Cabinda and Landana (Angola). Oran tram (Algeria). Projects for substations and electric lines (Qatar). Hydraulic project, 116 km of pipelines in Mostaganem (Algeria). NH6, NH8, NH1 motorways (India). Perote Xalapa motorway (Mexico).
QQ Incorporation and training of highly-qualified resources in environmental management for all projects. QQ Creation of a corporate structure in the various countries in order to implement and carry out environmental monitoring of projects. QQ Adaptation of Isolux Corsn Management Systems to the legal requirements and organisation of each country. QQ Adaptation of corporate management tools for their use in various countries. QQ Implementation of Management Systems through training sessions and coordination meetings in the different countries. QQ Monitoring of the systems through tools such as dashboards, internal audits, monitoring reports, action plans, etc.
In 2010 a structure of technicians was consolidated in the most strategic countries
The actions undertaken have laid the foundations for achieving high management standards regardless of the country in which we are executing our projects, complying at all times with legal requirements whilst seeking customer satisfaction and adopting measures to prevent pollution as the result of our activities. The environmental management of our projects starts with an exhaustive identification of the real and potential environmental aspects derived from the activities to be carried out within the framework of the project. Once identified and assessed, the operational controls are established and the monitoring required to ensure that the risks associated with the activity are minimised, provided that they are significant risks. Moreover, in all our projects the applicable legal requirements are identified whilst establishing the mechanisms for the continuous assessment of compliance with them. During 2010, a structure of highlyqualified technicians was consolidated in countries such as Argentina, Brazil, Mexico, India and Angola, whose mission is the implementation and monitoring of Management Systems for Quality and the Environment in all projects executed in such countries whilst continuously informing Management in order to adopt these actions more efficiently, correct any deviation detected at any time and avoid its repetition.
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Responsibility
The international expansion of Isolux Corsn, with projects for construction and concessions in more than 30 countries goes hand in hand with a commitment made by Management to implement a work and organisation culture which, regardless of the country in which we perform our activities, ensures that the following objectives are met: QQ Legal compliance. QQ Integrity and transparency. QQ Efficacy and efficiency. QQ Safe working environments. QQ Internal audits and monitoring visits to sites and services. QQ Incorporation of highly qualified technicians for the management of quality and the environment in the various projects and corporate structure of the countries. QQ Training sessions for the entire corporate and project structure of the various countries that form part of the company. QQ Setting up of dashboards and monitoring indicators with common criteria for all countries. QQ Improvement in the supplier assessment tool in order to incorporate the requirements corresponding to Social Responsibility and the Prevention of Occupational Risks. QQ Database in Spain for the documental control of building sites according to the new CTE. QQ Database in Spain to issue the test plan for sites.
Training on all systems is an objective set for 2011
These initiatives will be continued for the following objectives planned for 2011: QQ Continuing with the documentation development task to reflect the legal requirements of each country and its organisation. QQ Training on the Management Systems for Quality and the Environment in new projects. QQ Implementation of tools for the Management Systems for Quality and the Environment in newly awarded projects. QQ Incorporation of tools and methodologies for identifying legal requirements in each country which enable the organisation to ascertain its obligations and to provide the necessary resources for compliance with them. QQ Setting of objectives for Quality and the Environment of each country under the criteria of the strategy specified by the Corporate Department of Quality and the Environment.
QQ Planning and implementation of internal audits in all the countries as a monitoring tool. QQ Setting forth of criteria which enable information consolidation for measuring and analysing quality management data and environmental performance which help in decision-taking by Management. QQ Improvement in the management of knowledge by seeking tools and methodologies which facilitate information transfer and Know How from one project to another. QQ Implementation and certification of the Management System for Quality and Environmental Management in countries with a permanent corporate structure by certification entities of renowned prestige. Implementation and certification of the Quality and Environmental Management System for concession activities for infrastructures, energy and car parks.
QUALITY AND THE ENVIRONMENT
Commitment to promoting quality, environmental management and the prevention of risks
2010, a key year for the development of initiatives in Quality and the Environment
QQ Commitment to quality. QQ Commitment to the prevention of pollution. To this end, the Management Systems for Quality, the Environment and Health and Safety have become an essential tool to ensure that this culture impregnates itself at all levels of the organisation and in all countries where we execute our projects. 2010 was very important for the development and implementation of initiatives for the promotion of Quality and the Environment in all countries amongst which the following must be highlighted: QQ Diagnosis of legal compliance and requirements with standards ISO 9001, ISO 14001 and OHSAS in the main international projects. QQ Adaptation of the documentation in the Quality, Environment and Health and Safety Systems to the legal requirements and organisation of each country. QQ Adaptation of IT tools in the management of quality and the environment to the various languages in the organisation.
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Responsibility RESEARCH AND DEVELOPMENT
Internationally recognised certifications

ISO 9001 (Quality) and ISO 14001 (Environment)
QQ Isolux Corsn sets its annual objectives with regard to Quality and the Environment based on its Management Systems. All the Management Systems that Isolux Corsn has implemented according to international standards ISO 9001 and ISO 14001 are certified by independent certification bodies of renowned international prestige. On an annual basis these independent bodies review our Management Systems by performing audits in situ. They ensure that their application in our offices and projects is in accordance with both international standards which offers an additional guarantee to our clients and society in general wherever they may be.
External bodies annually review Isolux Corsns systems
EMAS Register
QQ The factory for metal products Emesa, specialised in the manufacture of all kinds of metal structures and wind turbine towers, was registered in the EMAS of the Regional Government of Galicia in February 2009 after the implementation of an exhaustive environmental management system according to the EMAS Regulation which, for the Isolux Corsn Group, represents a commitment to transparency in the disclosure of our activities with the most significant impacts. QQ From this moment on the EMAS Declaration of the company Emesa, S.L. is available to the public on the webpage of the Regional Government of Galicia and on Emesas webpage. The Emesa Management System, based on the EMAS III Regulation, sets forth an assessment system for aspects and performance which is more demanding than that required by the ISO 14001 international standard.
OHSAS 18001 (Health and Safety)

QQ The external audit processes enable us to promote continuous improvement in our management system. This is why emphasis is placed on the certification of the different companies who comprise the Group according to the OHSAS 18001:2007 specification. The companies belonging to the Group who have this certification are: Isolux Ingeniera, Corsn-Corviam Construccin, Isolux Corsn Servicios and Grupo Isolux Corsn. QQ Throughout 2010, all of these companies underwent the relevant periodic audits for control and recertification.
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RESEARCH AND DEVELOPMENT
Technological innovation in favour of the environment

Isolux Corsn has a Management System for R&D&I certified by AENOR under the standard UNE 166.002:2006 which promotes the development of R&D and Technological Innovation projects within the Groups Business Units thus offering high added value for our clients. As the basis for this Management System, Management at Isolux Corsn has established the following Corporate R&D&I Policy:
Isolux Corsn promotes the development of R&D&I projects
QQ The development and implementation of the R&D&I Management System adapted to the organisation and in accordance with the principles stipulated in the UNE 166002:2006 standard, with the adoption of measures which enable the continuous improvement of its efficacy. QQ The provision of a reference framework in the organisation in order to set R&D&I objectives and their periodic review.
QQ Assurance of the availability of resources in order to meet the R&D&I objectives to know and analyse the latest technological advances in our sector. QQ The detection of new ideas which enable the development of new products and services. QQ To foment cooperation in our areas of business with external organisations which provide knowledge, methodologies and resources.
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R&D&I in the Construction Division
In this business division it is considered strategic to undertake and subsequently certify R&D&I projects according to the standard UNE 166001:2006. Throughout 2010 four new R&D&I projects were presented all of which were in the area of geotechnical technology. Corsn-Corviam Construccin forms part of the executive bodies of the Spanish Construction Technological Platform (PTEC). This platform is comprised of the most important institutions, public research entities, universities and companies in the construction sector. Within this platform, Corsn-Corviam is responsible for the Health and Safety Strategic Line (LESS), focused on the research and development of new technologies and solutions which improve safety and reduce the negative impact on employees health. On 20th September 2010 the PTEC Foundation was officially registered of which Corsn-Corviam is a founding partner. The prime objective of this Foundation is to contribute to the sustainable progress of the Construction Sector, whilst placing particular emphasis on the promotion of innovation in construction in order to obtain and ensure greater efficacy on how investment in the sector for Research, Development and Innovation is spent. This foments improvement in efficiency, productivity, quality and safety as well as leading to a significant reduction in the impact on the environment and an increase in the wellbeing of citizens.
SIC Project
During last year, the Groups construction company continued to work on the launch of the project Planning for Safety Integrated in Construction as part of its role as leader in the PTEC Health and Safety Strategic Line sounding out the possibility of an agreement with other partners potentially interested in participating in the projects and analysing various financing channels.
Isolux Corsn has an R&D&I Management System certified by AENOR according to the Spanish standard UNE 166002:2006. Under the auspices of this Management System, during 2010 Corsn-Corviam Construccin, S.A. continued with the certification of four new projects for research, development and technological innovation (R&D&I): QQ Study of stabilisation systems for tunnelling between cut-off walls, with support in screens with strong vertical loads. QQ Mechanised excavation of wells in hard rock (vertical tunnelling machine). QQ Special alteration methods for urban tunnels. QQ New method for the calculation of sliding comprised of slopes. All of these were assessed by independent experts and were given the corresponding certification as an R&D&I Project according to the UNE 166001:2006 Spanish standard.
CLEAM Project
With a grant from the Centre for Industrial Technological Development CDTI for 44% of the total budget of more than 20 million euros this project is contained within the Sustainable Construction Strategic Line of the PTEC. Led by the seven large construction companies, amongst its participants are various universities, public and private research centres as well as two SMEs. It is divided into seven large groups of activities one of which is coordinated by Isolux Corsn. In 2010 this CENIT project embarked on its fourth and last year of work. During this last phase of the project the work is focused on completing all tasks, compiling the results and conclusions obtained. Once this task is carried out the consortium members will study, for those tasks which allow it, a future development project in which new specific technological applications are obtained.
Isolux Corsn promotes development and innovation in the sector
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07. R&D&I in the
Engineering Division
Corporate Social Responsibility

During 2010, Isolux Ingeniera was in charge of three projects in the water sector. As part of these, it collaborated closely with various universities such as Len University, Alicante University and the University of Castilla - La Mancha. The projects undertaken are: QQ The development of a biocatalytic electrolysis process for wastewater. R&D&I project with a duration of two years with a grant awarded by the CDTI. QQ Feasibility study for the production of liquid biofuels based on WWTP sludge. Innovation project with a duration of one year with the aid granted by the Madrid Development Institute (IMADE). QQ Technical and economic feasibility study on treatment plant sludge composting in a rotary sieve. Innovation project with a duration of one year with the aid granted by the Madrid Development Institute (IMADE). In order to raise awareness of these projects the company participated in various Congresses such as the International Sludge Congress held in Budapest on 8th, 9th and 10th September and ANQUE, held in Oviedo between 13th and 16th June 2010. Likewise, it continued with the activities set forth in the project for Control Systems in Solar Farms which was started in 2008 and which was awarded a grant by the Ministry for Industry, Tourism and Commerce. The National R&D&I Plan and, more specifically, the subsidies put forward for the research project notifications in the area of energy and climate change are enabling Isolux Corsn to increase the resources used for new lines of work which are emerging from projects under development. Isolux Ingeniera also has vast experience in projects in other fields such as the Development and Production of the OCL System (Analyser of the Overhead Contact Line for Railway Traction Substations), Automation of Railway Traction Substations, Localisation of Equipment in Wi-Fi Networks and Remote Control Networks. The results obtained in these projects were applied to design processes in order to provide our clients with tailor-made products. Line 5 of the Barcelona Underground | Spain
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Consolidated Annual Accounts
GRUPO ISOLUX CORSN, S.A. AND SUBSIDIARIES Consolidated Annual Accounts at 31 December 2010 and 2010 Management Report
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Note
1 2 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 2.7. 2.8. 2.9. 2.10. 2.11. 2.12. 2.13. 2.14. 2.15. 2.16. 2.17. 2.18. 2.19. 2.20. 2.21. 2.22. 2.23. 2.24. 2.25. 2.26. 2.27. 2.28. 3 4
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Consolidated balance sheet Consolidated income statement Consolidated statement of comprehensive income Consolidated statement of change in equity Consolidated cash flow statement Notes to the consolidated annual accounts General information Summary of the main accounting policies applied Basis of presentation Consolidation principles Foreign currency transactions Property, plant and equipment Intangible assets Non-current assets assigned to projects Interest cost Non-financial asset impairment losses Financial assets Derivative financial instruments and hedging activities Inventories Trade and other receivables Cash and cash equivalents Share capital Government grants Trade payables Borrowings Current and deferred income taxes Employee benefits Provisions Revenue recognition Leases Non-current assets (or disposal groups) held for sale Dividend distribution Environment Operating results Biological assets Financial information by segments Financial risk management Accounting estimates and judgments 162 164 165 166 168 171 171 173 173 178 179 180 181 182 182 182 183 184 185 186 186 186 186 186 187 187 188 188 189 191 192 192 192 192 192 192 193 199
Note 5 Financial information by segments 6 Property, plant and equipment 7 Goodwill and other intangible assets 8 Non-current assets assigned to projects 9 Investments in associates 10 Financial investments 11 Derivative financial instruments 12 Trade and other receivables 13 Inventories 14 Cash and cash equivalents and Financial assets at fair value through profit or loss 15 Share capital, share premium and legal reserve 16 Cumulative translation differences 17 Retained earnings and minority interest 18 Trade and other payables 19 Borrowings 20 Deferred income tax 21 Provisions for other liabilities and charges 22 Revenue / Sales 23 Materials consumed and other external costs 24 Other income and expenses 25 Employee benefit expenses 26 Operating leases 27 Net financial results 28 Income tax 29 Earnings per share 30 Dividends per share 31 Contingencies and guarantees provided 32 Commitments 33 Related-party transactions 34 Share-based payments 35 Joint ventures 36 Temporary joint ventures (UTEs) 37 Environment 38 Subsequent events 39 Auditors fees Appendix I 255 Appendix II 258 Appendix III 259 Appendix IV 260
Page 201 205 207 211 215 217 218 222 224 225 226 227 228 230 231 234 237 238 238 238 239 240 241 242 244 244 244 245 245 251 252 253 254 254 254
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Consolidated balance sheet

(Thousand euro) 31 December 2010 31 December 2009 1 January 2009
Consolidated balance sheet

31 December 2010 31 December 2009 1 January 2009
Note ASSETS Non-current assets Property, plant and equipment Goodwill Intangible assets Intangible assets assigned to projects Other non-current assets assigned to projects Investments in associates Financial investments Trade and Other receivables Deferred tax assets Derivative financial instruments Current assets Inventories Trade and other receivables Derivatives and financial instruments Financial assets at fair value through profit or loss Cash and cash equivalents Total assets 13 12 11 14.2 14.1 6 7.1 7.2 8.1 8.2 9 10 12 20 11
Note EQUITY Capital and reserves attributable to the Companys equity holders Share capital Share premium account Legal reserve Hedging reserve Cumulative translation differences Retained earnings 15 15 15 11 16 17
203,834 487,114 66,509 1,400,922 252,201 178,996 11,512 69,093 115,886 4,287 2,790,354 427,860 1,941,875 4,710 2,300 937,555 3,314,300 6,104,654
216,534 486,192 54,209 1,393,672 278,548 57,059 143,006 63,357 61,740 2,675 2,756,992 357,784 1,655,435 1,634 504 420,778 2,436,135 5,193,127
238,784 486,662 64,937 659,864 274,400 57,837 101,946 27,772 41,537 4,751 1,958,490
17,463 469,163 8,207 (36,316) 38,119 199,710 696,346
17,463 469,763 5,850 (13,663) 10,492 183,088 672,993 52,457 725,450
17,463 470,634 3,493 (13,956) (53,388) 199,229 623,476 21,503 644,979
Minority interests Total equity
17
74,728 771,074
LIABILITIES 333,525 1,489,444 5,417 210,771 287,469 2,326,626 4,285,116 Non-current liabilities Borrowings Project finance Derivative financial instruments Deferred tax liabilities Provisions for other liabilities and expenses Trade and other payables Current liabilities Borrowings Project finance Trade and other payables Current tax liabilities Derivative financial instruments Provisions for other liabilities and expenses Total liabilities Total equity and liabilities 11 21.2 19 8.3 18 372,804 222,480 2,559,171 21,779 12,559 52,099 3,240,892 5,333,580 6,104,654 216,894 141,735 2,191,878 11,713 6,200 34,969 2,603,389 4,467,677 5,193,127 144,139 151,096 1,875,643 20,138 6,637 33,584 2,231,237 3,640,137 4,285,116 19 8.3 11 20 21.1 18 877,564 1,012,530 47,647 66,752 47,167 41,028 2,092,688 691,061 828,335 20,562 55,035 49,883 219,412 1,864,288 703,690 534,407 27,811 54,183 33,983 54,826 1,408,900
Notes 1 to 39 and Appendices I to IV form an integral part of these consolidated annual accounts.
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Consolidated income statement

(Thousand euro) Year ended 31 December Note Total operating revenue Revenue / Sales Other operating income Difference between opening and closing inventories Own work capitalized Total operating expenditure Materials consumed and other external costs Employee benefit expenses Depreciation, amortization and impairment losses Change in trade provisions Other operating expenses Operating results Financial expenses Financial income Net financial results Share of result of associates Profit before income tax Income tax Profit for the year Attributable to: Companys equity Holders Minority interests 17 63,155 805 63,960 Earnings per share attributable to the Companys equity holders during the year Basic and diluted (euro per share) 29 0,72 60,904 (4,724) 56,180 0,70 28 27 27 27 9 24 23 25 6, 7 and 8 22 24 2010 3,239,786 3,188,740 44,995 5,034 1,017 (3,032,084) (1,864,095) (379,270) (86,692) (16,804) (685,223) 207,702 (171,743) 56,022 (115,721) (7,072) 84,909 (20,949) 63,960 2009 3,018,540 2,959,162 56,044 (19,133) 22,467 (2,834,436) (1,771,669) (355,659) (65,058) (6,515) (635,535) 184,104 (139,949) 34,333 (105,616) (12,012) 66,476 (10,296) 56,180
Consolidated statement of comprehensive income for the year ended at 31 December 2010 and 2009
(Thousand euro) Year ended at 31 December Note Profit/(loss) for the year Other comprehensive income: Changes due to financial statement translation Fair value changes in cash flow hedges - Tax effect Cash flow hedge transferred to profit and loss - Tax effect Net cash flow hedges Comprehensive income for year attributable to: Parent Companys shareholders Minority interests 16 11 20 11 20 34,819 (54,609) 15,245 21,952 (6,545) (23,957) 74,822 68,129 6,693 62,221 (13,240) 3,130 14,740 (4,351) 279 118,680 125,077 (6,397) 2010 63,960 2009 56,180
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Consolidated statement of changes in equity - Year 2010

(Thousand euro)
Consolidated annual accounts of Group Isolux Corsn - Year 2009

(Thousand euro)
Attributable to the Companys equity holders

Share Capital (Note 15) Share Premium account (Note 15) Legal Reserve (Note 15) Hedging reserve (Note 11) Cumulative translation difference (Note 16) Retained earnings (Note 17) Minority interests (Note 17) Total equity Share Capital (Note 15)
Attributable to the Companys equity holders

Share Premium account (Note 15) Legal Reserve (Note 15) Hedging reserve (Note 11) Cumulative translation difference (Note 16) Retained earnings (Note 17) Minority interests (Note 17) Total equity
Balance at 31 December 2009 Profit/(loss) for the year Net cash flow hedges Foreign currency translation differences Total other comprehensive income Total comprehensive income Other movements (Incentives; net from tax effect) (Note 34) Other movements 2009 profit distribution (Note 17) Balance at 31 December 2010
17,463 17,463
469,763 (600) 469,163
5,850 2,357 8,207
(13,663) (22,653) (22,653) (22,653) (36,316)
10,492 27,627 27,627 27,627 38,119
183,088 63,155 63,155 (19,266) (1,510) (25,757) 199,710
52,457 805 (1,304) 7,192 5,888 6,693 15,578 74,728
725,450 63,960 (23,957) 34,819 10,862 74,822 (19,266) 14,068 (24,000) 771,074
Balance at 1 January 2009 Profit/(loss) for the year Net cash flow hedges Foreign currency translation differences Total other comprehensive income Total comprehensive income Other movements 2008 profit distribution Dividends paid against reserves (Note 17) Balance at 31 December 2009
17,463 17,463
470,634 (871) 469,763
3,493 2,357 5,850
(13,956) 293 293 293 (13,663)
(53,388) 63,880 63,880 63,880 10,492
199,229 60,904 60,904 (43,059) (33,986) 183,088
21,503 (4,724) (14) (1,659) (1,673) (6,397) 37,351 52,457
644,979 56,180 279 62,221 62,500 118,680 37,351 (40,702) (34,857) 725,450
Notes 1 to 39 and Appendices I to IV form an integral part of these consolidated annual accounts. Notes 1 to 39 and Appendices I to IV form an integral part of these consolidated annual accounts.
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Consolidated cash flow statement

(Thousand euro) Year ended 31 December Notes Cash flows from operating activities Profit for the year before taxes Adjustments for: - Depreciation, amortization and impairment losses - Change in trade provisions - Profit on non-current assets assigned to projects disposals - Share in associates profits - Net financial results Subtotal Changes in working capital : - Inventories - Trade and other receivables - Financial assets at fair value through profit or loss - Trade and other payables - Provisions for other liabilities and expenses - Other non-current receivables and payables - Other changes Cash generated from operations - Taxes paid Net cash generated from operating activities (79,893) (306,058) (1,796) 318,774 14,139 (4,303) 225,499 (16,997) 208,502 41,929 (49,666) 210,267 264,170 (3,580) (18,581) (2,374) 697,848 (25,458) 672,390 24 9 27 6,7 and 8 86,692 16,804 (26,562) 7,072 115,721 199,727 65,063 6,515 12,012 105,616 189,206 Net change in cash and cash equivalents Cash and cash equivalents at start of the year Exchange differences included in net change for the year Cash and cash equivalents at the end of the year 84,909 66,477 2010 2009 Cash flows from Financing activities - Net income from borrowings - Net reimbursement of borrowings - Income from project finance - Reimbursement of project finance - Interest paid - Dividends paid Net cash generated from/(used in) financing activities
Year ended 31 December Note 2010 467,030 (124,616) 505,863 (58,037) (161,718) (24,000) 604,522 2009 183,225 (144,139) 279,923 (80,141) (137,251) (49,769) 51,848
512,907 420,778 3,870 14.1 937,555
134,076 287,469 (767) 420,778
Note Cash flows from investing activities - Acquisition of subsidiary, net of cash acquired - Acquisition of property, plant and equipment and intangible assets - Income from property, plant and equipment and intangible assets disposal - Acquisition of non-current assets assigned to projects - Revenue due to non-current assets assigned to projects disposal - Acquisitions of investments in associates and financial investments - Net change in other receivables - Interest received and other financial income Net cash used in investing activities
2010
2009
(46,615) 1,415 (506,019) 256,535 (1,374) (6,061) 2,002 (300,117)
2,213 (46,260) (412,085) (95,666) (70,523) 32,159 (590,162)
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Notes to the consolidated annual accounts

(Thousand euro)
General information
At the 2010 year end GRUPO ISOLUX CORSN, S.A. (hereinafter, the Company) forms a group (hereinafter, the Group) comprising the parent company Grupo Isolux Corsn, S.A. and its subsidiaries and associates. Additionally, the Group participates with other entities or members in joint ventures and temporary joint ventures (hereinafter, Joint Ventures). Appendices I, II, III and IV to these notes contain additional information on the entities included in the consolidation scope. The Group companies hold interests of less than 20% in other entities over which they have no significant influence, except from those explained in note 9. The Groups main activities and sales are carried on and made in Spain and Latin America, and it is in expansion in Asia, Africa and North America. For the purposes of preparing the consolidated annual accounts, a group is understood to exist when the parent company has one or more subsidiaries, which are those entities that the parent company controls directly or indirectly. The principles applied during the preparation of the Groups consolidated annual accounts, together with the consolidation scope, are described in Note 2.2. Appendix I to these notes set outs the identification details of the subsidiaries included in the consolidation scope under the full consolidation method. Appendix II provides the identification details of the associates included in the consolidation under the equity consolidation method. Appendix III contains the identification details of the joint ventures included in the consolidation scope under the proportionate consolidation method. The parent company and certain subsidiaries are members of temporary joint ventures, whose assets, liabilities, income and expenses are recognized using the proportionate method. Appendix IV contains a detail of the temporary joint ventures of which Group companies are members. Changes in the consolidation scope during 2010 are as follows: The following companies were incorporated: Isolux Corsn Concesiones de Mxico, S.A. de C.V., Isolux Corsan Energy Cyprus Limited, Isolux Corsan Power Concessions India Private Limited, Mainpuri Power Transmission Private Limited, Isolux Corsn Concessions India Privated Limited, Soma Isolux Varanasi Aurangabad Tollway Private Limited, Isolux Soma and Unitech JV, Isolux Corsn Brasilea de Infraestructuras, S.L., ICI Soma JV, Carreteras Centrales de Argentina, S.A., Wett Holdings LLC., Eclesur, S.A., Empresa Concesionaria Lneas Elctricas del Sur, S.A., Isolux Corsn Renovables, S.A , Isolux Corsn Panam, S.A., Hixam Gestin de Aparcamientos III, S.L., Isolux Corsn Arabia Saud, LLC and Isolux Corsn Gulf, LLC. The following companies were acquired: AB Alternative Investment, B.V., ICC Sandpiper, B.V., Isolux Corsn Participaciones de Infraestructura Ltda., Isolux Corsn Participaciones en Viabaha Ltda. Shareholding increase in Infinita Renovables, S.A. from 70% to 80%. Shareholding decrease in Luxeol, S.L. from 100% to 70% and in Viabahia Concessionaria de Rodovias, S.A. from 75% to 55%. Joint ventures sale in Brazil (see note 8.1), sale of Infinita Renovables Patagonia, S.A. and Aparcamientos IC Gmez Ulla, S.L. During the year, Isolux de Mxico, S.A. de C.V. absorbed Isolux Corsn Construccin S.A. de C.V. (both came within the consolidation scope in 2009). Changes in the consolidation scope during 2009 are as follows: The following companies were incorporated: Grupo Isolux Corsn Concesiones, S.A., Isolux Ingeniera USA LLC, Isolux Corsn Cyprus Limited, Sociedad Concesionaria Zona 8-A., S.A, Elica Isolcor, S.L., Parque Elico Cova da Serpe II, S.L., Vas Administracin y Logstica, S.A. de C.V., Viabahia Concessionaria de Rodovias, S.A., Iccenlux Corp., Isolux Corsan Concessions Cyprus Limited, Isolux Corsan NH1 Cyprus Limited, Aparcamientos IC Elche, S.L., Inversiones Blumen, S.L., Lneas de Comahue Cuyo, S.A., Aparcamientos Los Bandos Salamanca, S.L., Soma Isolux Surat Hazira Tollway PVT, LTD., Soma Isolux Kishangarh-Ajmer-Beawar Tollway PVT.LTD, Isolux Corsn India & Soma Enterprises Limited, Indra Isolux de Mxico S.A de C.V., Construcciones e Instalaciones del Noreste S.A. de C.V. and Wind Energy Transmission Texas, LLC. The following companies were acquired: Agua Limpia Paulista, S.A. (40%), Integraao Electrica Norte e Nordeste, S.A. (50%) and Global Vambru, S.L.
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Shareholding increase in Alqlunia5, S.A. and Pinares del Sur, S.L. from 25% to 50% and from 18% to 50%, respectively. Sale of Parque Elico Cova da Serpe, S.L. On 17 December 2004, the Company was incorporated which, following several name changes, is now named Grupo Isolux Corsn, S.A. The Company is the parent of a group that is continuing the activities of Grupo Isolux Wat. The latter group gained broad experience in the Spanish market and was engaged mainly in engineering. At the beginning of 2005 it merged with the Corsn Corviam Group, which was also reputable and engaged mainly in construction. Grupo Isolux Corsn is the result of the 2005 merger. Grupo Isolux Corsn, S.A.s registered office is at Caballero Andante 8 Street, 28021 Madrid. The Company is registered in the Madrid Mercantile Register, volume 20,745, book 0, section 8, sheet 194; page M-367466, entry 11. The latest adaptation and rewording of its bylaws is entered in volume 20,745, book 0, section 8, sheet 189, and page M-367466, entry 7. Grupo Isolux Corsn, S.A. does business in Spain and abroad, mainly consisting of the following activities (carried on by the Company itself or its subsidiaries): Engineering studies, industrial assembly and manufacture of the necessary components, integrated facilities and construction. Manufacture, sale and representation of electrical, electronic, electromechanical, computer and industrial products, machinery and equipment. Rendering of all types of consultancy, audit, inspection, metering, analysis, report, research and development services; project design, planning, supply, execution and assembly; project and site management and supervision; tests, trials, commissioning, control and evaluation; repair and maintenance services in integrated facilities; electrical and electronic facilities, air conditioning and aeration systems; sanitary fluid and gas systems; elevators and freight elevators; fire protection and detection systems; hydraulic systems, information systems, mechanical and industrial systems; communications, energy, environment; and energy lines, substations and power plants. Integrated construction, repair, conservation and maintenance of all kinds of construction and all kinds of installation and fitting work. Purchase, sale, lease and operation by any means of real property or real property rights. Holding, management and administration of securities and equity interests in any entity. The Group mainly operates through the following business lines: Construction: all kinds of civil engineering and construction projects, both residential and nonresidential. Engineering and industrial services: engineering, energy, telecommunications, installations and environment.
Concessions: the Group holds land infrastructure concessions including motorways and car parks, and electricity infrastructure concessions such as high-voltage power cables and power plants and transformation energy plants. Renewable energy: activity in bio-fuel. These consolidated annual accounts were prepared by the Board of Directors on 28 March 2011. The Directors will submit these consolidated annual accounts to the General Shareholders` Meeting for approval. The accounts are expected to be approved without changes.
Summary of the main accounting policies applied

The main accounting policies applied when preparing these consolidated annual accounts are described below. These policies have been applied consistently to all the financial years presented in these consolidated annual accounts. 2008 improvement project. Acquisition method is maintained regarding business combinations, but important changes are introduced. For example, all payments made to acquire a business are recorded at fair value on the acquisition date, and contingent payments classified as liabilities are recorded at fair value at each balance sheet end, recording any change in the income statement. An accounting policy choice, applicable to each business combination and consisting of measuring non-parent shares at its fair value or at the proportional net value of the acquired companys assets and liabilities, is introduced. All transaction costs are carried as expenses. The Group has applied IFRS 3 (Reviewed) to all business combinations taking place as from 1 January 2010, on a prospective basis. IAS 27 (reviewed), Separate and consolidated financial statements: This standard is mandatory and must be applied on a prospective basis to all the periods commencing as from 1 July 2009. This standard requires the effects of all transactions with non-parent shares to be recognized in equity if there is no control change, so as to these transactions not to generate neither goodwill nor gains or losses. The standard also establishes the accounting policy to be applied when control is lost. Any residual share held by the Company returns to its fair value and a gain or loss is recorded in the income statement. The Group has applied IAS 27 (reviewed) to all transactions with non-parent shares as from 1 January 2010, on a prospective basis. IFRIC 12, Concession services agreements: This interpretation affects public-private concession services agreements in which the grantor states the services to be assigned to the infrastructure by the concessionaire, the entity to whom the service must be rendered and the price to be applied. The grantor also controls any significant residual share in the infrastructure at the end of the agreement. This interpretation is enforceable for all fiscal years beginning as from 30 March 2009. The Group applies IFRIC 12 as from 1 January 2010, on a retrospective basis. This retrospective enforcement had no significant effect, since the Group has applied similar criteria relating concession services agreements accounting as those terms stated under IFRIC 12. IFRIC 15, Property construction agreements:This interpretation clarifies the recognition conditions for those revenues relating to property construction agreements and, particularly, if these agreements fall within the application scope of IAS 11 Construction contracts or IAS 18 Revenue. This interpretation is enforceable for all fiscal years commencing as from 1 January 2010. The Group has adopted IFRIC 15 interpretation as from that date on a prospective basis, with no significant effect on consolidated annual accounts.
2.1. Basis of presentation The Groups consolidated annual accounts at 31 December 2010 have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted for its use in the European Union, approved by the European Commission Regulations (IFRS-EU) and effective at 31 December 2009. The Group started working under IFRS-EU on 1 January 2006. The policies described below have been applied consistently to all the financial years presented in these consolidated annual accounts. The amounts are expressed in thousands of euro in this document, unless otherwise stated. The consolidated annual accounts have been prepared on a historical cost basis, except for certain cases stipulated by IFRS-EU in which assets and liabilities are carried at fair value. The Company has made the following choices in cases in which IFRS-EU allow for alternative criteria: Measurement of property, plant, equipment and intangible assets at historical cost, capitalizing financial expenses over the construction period. Joint ventures and temporary joint ventures are proportionately consolidated. The preparation of consolidated annual accounts under IFRS-EU requires the use of certain critical accounting estimates. The application of IFRS-EU also requires that management exercise judgment in the process of applying the Companys accounting policies. Note 4 discloses the areas that require a higher level of judgment or entail greater complexity, and the areas where assumptions and estimates are significant for the consolidated annual accounts. Standards, amendments and interpretations that came into effect in 2010 IFRS 3 (Reviewed), Business combinations: This standard is mandatory and must be applied on a prospective basis to all business combinations whose acquisition date was after the date of the first period beginning after 1 July 2009. The advanced application of this standard is allowed for those fiscal years commencing as from 30 June 2007. In any case, such advanced application requires the enforcement at the same date of IAS 27 (reviewed in 2008) and amendments incorporated to IFRS 3 as a consequence of the
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Improvement Project published by IASB in April 2009 and adopted by the European Union in March 2010. Amendments incorporated to this project, as well as enforceable dates for each of them are explained below: IAS 1, Financial Statements disclosure: The amendment is about the classification of liabilities convertible into equity instruments, as current or non-current items. Despite the holders right to require the liability to be settled by an equity instruments issue at any time, a financial liability is classed as non-current if there is an unconditional right to delay its cancellation through a transfer of cash or other assets for the next 12 months following the financial statements date. This amendment is enforceable for all fiscal years beginning as from 1 January 2010. The Group has adopted it since 1 January 2010. IAS 7, Cash flow statement: The modification is to clarify that only those disbursements arising in asset recognition in the balance sheet can be classified as cash flow from investment activities. In this manner, alignment in cash flow from investment activities classification and assets recognized relating financial situation are improved, decreasing practical differences. This amendment is enforceable for all fiscal years beginning as from 1 January 2010. As a consequence, all disbursements arising in asset recognition in the balance sheet are showed as cash flow from investment activities in the consolidated cash flow statement. IAS 17, Leases: When a lease includes both land and buildings, the classification as financial or operating lease must be performed separately, in accordance with the general principles stated in IAS 17. Prior to this amendment, IAS 17 required any indefinite real estate lease to be classified as an operating lease, unless ownership was transferred at the end of the lease. However, this practice has been discontinued since IASB considers it is against general principles applicable in lease classification. When a lease is newly classed as financial, the recognition must be done on a retrospective basis. This amendment is enforceable for all fiscal years beginning as from 1 January 2010. The Group has adopted IAS 17 amendment since 1 January 2010, with no significant effects on its financial statements. IAS 18, Revenue: A new section is added to IAS 18 Appendix, in which guidance to determine whether an entity acts as principal or agent is given. The amendment affects IAS 18 Appendix which is not part of the standard itself, so the new guidance will be in force as from its publication. The Group has adopted the additional section in IAS 18 since 1 January 2010, without significant issues arising on its financial statements. IAS 36, Impairment of assets: For the purpose impairment testing, each gash generating unit (CGU) or group of CGUs to which the goodwill is allocated should not be larger than an operating segment (in accordance with IFRS 8) prior to aggregation. Entities that use aggregated operating segments to determine their cash generating units will be forced to disaggregate when the amendment becomes effective. This could result in the recognition of an impairment loss. This amendment is of mandatory application for
all years commencing on or after 1 January 2010. The criteria adopted by the Group are similar to those established in IAS 36, therefore the application of the same has not had any significant effect. IFRS 2, Share-based remuneration: IFRS 2`s scope is aligned with business combination definition contained in IFRS 3 (reviewed) Business combinations. The amendment supports that transactions under common control and business contributed to create a joint venture are not under IFRS 2`s scope. This amendment is enforceable for all fiscal years commencing as from 1 July 2009. The Group has adopted it since 1 January 2010, without any significant effect on its financial statements. IFRS 5, Held-for-trading non-current assets and interrupted activities: The amendment clarifies that IFRS 5 states the information to be disclosed regarding held-for-trading non-current assets and interrupted activities. Terms about information disclosure contained in other IFRS are not applicable, unless these standards require: Specific information to be disclosed regarding held-for-trading assets and interrupted activities; or information to be disclosed about the measurement of assets and liabilities inside a disposal group which was not under the scope of IFRS 5.
ments considered as net investment hedge which do not comply with the requirements under IFRIC 16. This interpretation is enforceable for all fiscal years commencing as from 1 July 2009. IFRIC 18, Transfers of assets from customers: This interpretation provides guidance on how to account for assets from customers or cash received that is used to acquire or construct specific assets. This interpretation applies only to those assets used to connect the customer to a network or provide the customer with on-going access to a supply of goods or services, or to do both. This interpretation shall be applied prospectively to all transfers of assets from customers received on or after 1 July 2009. For the purpose of its adoption by the EU, this interpretation shall be effective, at the latest, as from the start of the first year beginning after 31 October 2009. The Group applies IFRIC 18 since 1 January 2010 without this having a material impact on the financial statements of the Group. IFRS 1 (reviewed) First adoption of IFRS (in force since 1 July 2009) and IFRS 1 (amendment) Additional exemptions for those entities initially adopting IFRS (in force since 1 January 2010). The following amendments relate to the improvement project published by IASB in April 2009 and adopted by the European Union in March 2010: IFRIC 9 (Amendment) New assessment of implicit derivatives (in force for years commencing as from 1 July 2009) IFRIC 16 Net investment hedge for foreign transactions (in force since 1 July 2009) IAS 38 (Amendment) Intangible assets (in force since 1 January 2010) IAS 39 (Amendment) Financial instruments: measurement and recognition (in force since 1 January 2010) Standards, amendments and interpretations to existing standards that are not yet in effect and have not been previously adopted by the Group Standards, amendments and interpretations that can be adopted in advance for years commencing as from 1 January 2010: IAS 24, Information disclosure concerning related parties: The reviewed standard clarifies and simplifies the definition for related party, removing all inconsistencies present in the previous standard and making it easier to apply. In addition, it eliminates the requirement for those entities related to Public Administrations which have to disclose all the information concerning transactions carried out with public bodies and other entities related with them. This reviewed standard can be total or partially adopted in advanced. The standard is applicable for those years beginning as from 1 January 2011. The Group will adopt IAS 24 as from 1 January 2011, on a prospective basis.
IAS 32 (Amendment) Right issues classification (in force as from 1 February 2010) IFRIC 14 (Amendment) Advanced payments concerning minimum financing requirements (in force as from 1 January 2011) IFRIC 19 Financial liabilities cancellation through equity instruments (applicable to those year beginning at 30 June 2010) 2010 improvement project, published by IASB in May 2010 and that modifies IFRS 1, 3 and 7 and IAS 1, 12, 27 and 34, as well as IFRIC 13: IFRS 1 First adoption of IFRS IFRS 3 Business combinations: Improvement Project includes the following aspects with respect to IFRS 3: Contingent consideration agreements arising in business combinations with an acquisition date prior to IFRS 3 application (2008) have to be recorded in compliance with the requirements stated in previous IFRS 3 (issued in 2004). Amendments in IFRS 7 Financial instruments: information disclosure, IAS 32 Financial instruments: disclosure and IAS 39 Financial instruments: measurement and recognition eliminate exemptions related to contingent considerations, but are not applicable to contingent considerations arising from business combinations with an acquisition date prior to IFRS 3 application (2008); The choice to measure non-parent shares at fair value or at the proportional net value of acquired companys assets and liabilities only applies to instruments representing present shares and granting holders the right to participate in the event of a settlement by the company??, on a proportionate basis. The rest of non-parent share components are measured at fair value unless another measurement basis was required by IFRS.
This amendment is enforceable for all fiscal years beginning as from 1 January 2010, on a prospective basis. The Group has adopted it since 1 January 2010, without any significant issue arising as concerns its financial statements. IFRS 8, Operation segments: The requirement to report the value of the assets in a segment is only applicable when the highest decision-making unit reviews this information. This amendment is enforceable for all fiscal years beginning as from 1 January 2010. Prior to IFRS 8 being in force, information by segment was prepared by the Group and reviewed by its highest decision-making unit, therefore the amendments adoption had no significant effects. Standards, amendments and interpretations in force since 2010, whose application has no impact on the Groups annual accounts IFRIC 16, Hedge of a net investment in a foreign operation: This interpretation concerns the accounting treatment to be applied to a net investment hedge, including the fact that the hedge does not refer to presentation currency differences but to those related to functional currency. It also states that the hedge instrument can be maintained in any part of the group, except for the dependent company it is hedging. The requirements under IAS 21 Changes in foreign exchange rates are applicable to the hedged item. The company has applied IAS 39 Financial instruments: measurement and recognition since 1 January 2010 on a prospective basis, to stop hedge accounting related to those hedge instru-
IFRS 3 guidance applies to all share-based remunerations derived from a business combination, including share-based payment agreements replaced both voluntarily and not voluntarily. This amendment is enforceable for all fiscal years beginning as from 1 July 2010. The Group will apply IFRS 3 (amendment) to all business combinations since 1 January 2011, on a prospective basis. IFRS 7 Financial instruments: information disclosure: Amendments relate to financial instrument information disclosure, mainly concerning quantitative and qualitative aspects of the nature and scope of those risks associated with financial instruments. This amendment is enforceable for all fiscal years beginning as from 1 January 2011. The Group will apply IFRS 7 (amendment) to all financial instruments as from 1 January 2011, on a prospective basis. IAS 1 Financial statements disclosure: Companies can present an itemized analysis of other results in the statement of changes in equity or in the notes to the annual accounts . This amend-
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ment is enforceable for all fiscal years beginning as from 1 January 2011. The Group will adapt financial statements in accordance with IAS 1 as from 1 January 2011, on a prospective basis. IAS 27 Separate and consolidated financial statements: Amendments in IAS 21 Effects of changes in foreign exchange rates, IAS 28 Investments in associates and IAS 31 Interests in joint ventures resulting from IAS 27 review (2008) have to be applied on a prospective basis. This amendment is enforceable for all fiscal years beginning as from 1 July 2010. The Group will adopt this standard as from 1 January 2011, on a prospective basis. IAS 34 Intermediate financial information IFRIC 13 Customer loyalty programs IFRS 7 (amendment) Disclosures Transfers of financial assets: The amendment to IFRS 7 requires additional disclosures in respect of risk exposure arising from financial assets transferred to third parties. The amendment requires disclosure about risks and rewards of transfer transactions involving on-balance sheet financial assets and the identification of associated financial liabilities and requires enhanced disclosure about transactions involving off-balance sheet financial assets: the result generated on the transaction, the remaining risks and rewards and the reflection for accounting purposes of the same, initial and future, and the estimated fair value of the on-going involvement recorded on the balance sheet. Amongst others, this amendment would affect transactions involving the sale of financial assets, factoring agreement, securitization of financial assets and securities loan agreements. Amendments in IFRS 7 are enforceable for all fiscal years beginning as from 1 July 2011, although adoption in advanced is also allowed. At the preparation date of these consolidates annual accounts. This amendment was pending adoption by the European Union. The Group is analyzing the impact this adoption could have over consolidated annual accounts. IAS 12 (amendment) Deferred income tax: underlying assets recovery: This amendment offers a practical approach to measure deferred income tax assets and liabilities related to real estate investments carried at fair value. This measurement option is provided in IAS 40 Investment property. The amendment will be enforceable for all fiscal years beginning as from 1 January 2012. IFRS 1 (Amendment) Hyperinflation level increase and elimination of those fixed dates applicable to first adopters. No significant impact is expected as a result of these standards entering into force.
In addition, at the preparation date of these financial statements, IASB had published the following standards which are pending adoption by the European Union. These standards, amendments and interpretations will be enforceable as from 2011; the Group has adopted them in advance: IFRS 9, Financial instruments: IFRS 9 simplifies financial assets recording and introduces new requirements relating its classification and measurement. Those assets held for collect cash from payments are measured at amortized cost, whereas the rest (including held-for-trading financial assets), are measured at fair value. Hence, only an impairment model for those assets carried out at amortized cost was required. In October 2010, IASB updated IFRS 9 to include initial recognition and subsequent measurement criteria for financial liabilities and disposal criteria for financial instruments. Related issues in IAS 39 have not been change, except for the subsequent recording of financial liabilities through profit and loss. In such cases, fair value changes arising from credit risk assessment are directly recorded in equity as income and expense. These amounts cannot be allocated to the income statement but reclassified to other captions under equity. Nevertheless, in the event that a mismatch is detected with the related financial assets measurement, all value changes will be charged to results. For the moment, the current IAS 39 requirements regarding financial assets impairment and hedge accounting are still in force. This standard will be applicable for all fiscal years beginning as from 1 January 2013, although it can be implemented in advance. At the preparation date of these consolidated annual accounts, this standard had not been adopted by European Union.
Restatement and change in accounting criteria: During 2010, Groups Board of Directors has decided to change the accounting policy regarding consolidation of real estate businesses in which there exists joint control. This decision implies replacing the proportionate consolidation method by the equity method, as explained in note 2.2, and has been adopted due to the decreasing importance of these businesses over the activity of the Group and because the real estate line of business is no longer considered as a strategic business. In compliance with IAS 8 this change has been applied on a retrospective basis. Therefore, in compliance with IAS 1, the Consolidated Balance Sheet shows comparative information regarding previous year end and initial restated balances. This change had no impact on equity. Major impacts of the above-mentioned restatement at 31 December 2009 and 2008 are explained below:
Impact on operating result 2009 Landscape Corsn, S.L. Las Cabezadas de Aranjuez, S.L. Alqlunia 5, S.A. Pinares del Sur, S.L. 234 360 (50) 544
Impact on assets at 31 December 2009 (358) (6,979) (10,691) (10,996) (29,024) 2008 (358) (6,860) (7,218)
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2.2. Consolidation principles Subsidiaries Subsidiaries are all entities (including special-purpose companies) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. When through the acquisition of a subsidiary, the Group acquires a group of assets or net assets that are not a business, the group cost is allocated between the identifiable assets and liabilities within the group based on their fair values at the acquisition date (all acquisition during 2010 and 2009 present these characteristics). The cost of net assets group includes legal and financial expenses necessary to carry out the transaction. When the Group incurs in costs related to the acquisition of a participation in an entity that is not a business and the transaction has not been finalized at year end, the aforementioned costs are recognized in the balance sheet if it is likely that the transaction will be carried out successfully after year end. In the event that the transaction cannot be estimated as likely, the incurred costs are recognized as expenses in the income statement. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective to the extent of any minority interests. The excess of the cost of acquisition over the fair value of the Groups share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is directly recognized in the income statement. Intercompany transactions, balances and unrealized gains on transactions between Group companies are removed. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Appendix I to these notes set outs the identification details of the subsidiaries included in the consolidation scope under the full consolidation method. Aparcamiento Los Bandos Salamanca S.L. and Aparcamientos IC Sarrin where the Group holds a 70% and a 51% of the shares, respectively, are not considered subsidiaries as the control is not held by the Group. Agreements established between shareholders result in the investment being considered as a joint venture (See Appendix III).
Agua Limpia Paulista, S.A. and Concesionaria Autova A-4 Madrid, S.A. where the Group holds 40% and 48.75% of the shares, respectively, are considered subsidiaries since the control is held by the Group, due to shareholder agreements (See Appendix I). Transactions and minority interests The Group treats transactions with minority shareholders as transactions with non-Group third parties. The sale of minority interests generates gains and/or losses for the Group that are recognized in the income statement. The acquisition of minority interests results in goodwill in the amount of the difference between the price paid and the relevant proportion of the carrying amount of the subsidiarys net assets. Joint ventures The Group treats incorporated or unincorporated entities in which two or more members have joint control under contractual agreements as joint ventures. Joint control is understood to be the situation established in an agreement between the parties in which financial and operating decisions require the consensus of all members. Interests in joint ventures are consolidated using the proportionate consolidation method, with the exception of Landscape Corsn, S.L., Pinares del Sur, S.L., Las Cabezadas de Aranjuez, S.L. and Alqlunia 5, S.L. The Groups shareholding in these companies amounts to 50%, 50%, 40% and 50% respectively, and, as stated in note 2.1, they are consolidated through the equity method commencing this year. The Group combines its share of the assets, liabilities, income, expenses and cash flows of the jointly controlled entity, line by line, with similar items in its own accounts. The Group recognizes, in its consolidated annual accounts, the portion pertaining to the other members of the jointly controlled entity of any profits or losses obtained from the sale of the Groups assets to the entity. The Group does not recognize its own share of the profits or losses of the jointly-controlled entity derived from the purchase by the Group of the entitys assets, until those assets are sold to an independent third party. A loss is immediately recognized on the transaction if it causes a reduction in the net realizable value of current assets or an impairment loss. Appendix III to these notes set outs the identification details of the joint ventures included in the consolidation scope under the proportionate consolidation method, except those companies mentioned above, which are consolidated through the equity method. Associates Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method and are initially recognized at cost. The Groups investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition. The Groups share on its associates post-acquisition profits or losses is recognized in the income state-
ment and its share of post-acquisition movements in reserves is recognized in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Groups share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the associate. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Groups share in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains or losses in associates are recognized in the income statement. Appendix II to these notes set outs the identification details of the associates included in the consolidation scope under the equity consolidation method. Temporary joint ventures (UTEs) A temporary joint venture (UTE), as defined by Spanish legislation, is a system in which entrepreneurs collaborate for a specified, fixed or undetermined period to carry out or to execute a construction work, service or supply. The UTEs balance sheet and income statement items are included in the shareholders balance sheet and income statement on a proportionate basis. Transactions between the UTE and other Group subsidiaries are eliminated. Appendix IV contains details of each UTE consolidated using the proportionate method.
2.3. Foreign currency transactions Functional and presentation currency The items included in the annual accounts of each of the Group companies are measured using the currency of the principal economic environment in which the company operates (functional currency). The consolidated annual accounts are presented in euro, the Companys functional and presentation currency, although figures are expressed in thousands of euro for presentation purposes. Transactions and balances Transactions in foreign currency are translated to the functional currency using the exchange rates effective at the transaction dates; at the year-end they are measured at the exchange rate in force at that moment. Foreign currency gains and losses resulting from the settlement of transactions and translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currency are recognized in the income statement, except when deferred in equity as qualifying cash flow hedges or qualifying net investment hedges. Changes in the fair value of monetary instruments denominated in foreign currency and classified as available for sale are separated into translation differences resulting from changes in the instruments amortized cost and other changes in the instruments carrying amount. The translation differences are recognized in results for the year and other changes in the carrying amount are recognized in equity. Translation differences in respect of non-monetary items such as equity instruments at fair value through profit or loss are presented as part of the fair value gain or loss. Translation differences with respect to nonmonetary items such as equity instruments classed as available-for-sale financial assets are included in equity in the revaluation reserve. Group companies Results and the financial situation of all Group companies (none of which has the currency of a hyperinflationary economy) whose functional currency differs from the presentation currency are translated to the presentation currency as follows: The assets and liabilities on each balance sheet presented are translated at the closing exchange rate at the balance sheet date; The income and expenses in each income statement are translated at the average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates existing at the transaction dates, in which case income and expenses are translated at the rates on the transaction dates); and All resulting exchange differences are recognized as a separate component of equity.
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On consolidation, any exchange differences resulting from the translation of a net investment in foreign companies and loans and other instruments in foreign currency designated as hedges of those investments are taken to equity. When sold, such exchange differences are recognized in the income statement as part of the profit or loss on the sale. Adjustments to goodwill and fair value arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the year-end exchange rate, except goodwill arising prior to 1 January 2006.
2.4. Property, plant and equipment Land and buildings mainly comprise plants, offices, technical installations, machinery and tooling. Property, plant and equipment are recognized at cost less depreciation and cumulative impairment losses, except for land, which is presented net of impairment losses. Historical cost includes expenses directly attributable to purchases of property, plant and equipment. Subsequent costs are included in the assets carrying amount or recognized as a separate asset only when it is likely that the future economic benefits associated with the asset will flow to the Group and the cost of the asset may be reliably determined. The carrying amount of a replaced component is written off the accounts. All other repair and maintenance expenses are charged to the income statement in the year in which they are incurred. Land is not depreciated. Depreciation of other assets is calculated on a straight-line basis in order to allocate costs to residual values based on the estimated useful lives of the assets in question, using the following rates:
Rate Buildings Plant Machinery Tooling Furnishings Data-processing equipment Vehicles 1%-3% 6 % - 14 % 10 % - 17 % 12.5 % - 33 % 5 % - 16 % 12.5 % - 25 % 8 % - 14 %
2.5. Intangible assets Goodwill Goodwill is the excess of acquisition cost over the fair value of the Groups share of the identifiable net assets of the subsidiary or associate acquired at the acquisition date. Goodwill relating to acquisitions of subsidiaries is included in intangible assets. Goodwill arising from acquisitions of associates is included in investments in associates and tested for impairment together with the total balance relating to the associate. Goodwill recognized separately is tested for impairment at least annually or when there are signs of impairment. It is carried at cost less cumulative impairment losses. Gains and losses on the sale of a company include the carrying amount of goodwill related to the company sold. Goodwill is assigned to cash generating units (CGUs) in order to test for impairment losses. This relates to CGUs that are expected to benefit from the business combination that gave rise to the goodwill. Administrative concessions Administrative concessions are recognized in the amount paid by the Company with respect to assignment or operating royalties. In certain cases, concessions relate to the administrative authorization granted by municipal authorities or other public bodies for the construction and subsequent operation of car parks, highways, electric transmission lines and other assets during the periods specified in the relevant contracts. The accounting treatment of such assets is similar to the treatment stated in IFRIC 12. Once the exploitation of the concession assets begins, related collections are recognized as ordinary revenue and operating expenditure is included in expenses for the year. In all cases, the intangible assets are amortized on a straight-line basis over the concession term, except for those railway concessions, which are depreciated in a systematic way, based on the estimated traffic and expected revenues. At each account close, the return on each project is reviewed to determine whether there is any sign of impairment since the assets are not recoverable on the basis of the operating revenue generated. As project-related funding is obtained, concessions are reclassified into non-current assets assigned to projects (see Note 2.6). Computer software Software licenses acquired from third parties are capitalized on the basis of the costs incurred to acquire and prepare the licenses for the use of a specific program. These costs are amortized over the useful life of the software for a maximum of five years. Costs associated with developing or maintaining computer software programs are recognized as an expense when incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognized as intangible assets.
Computer program development costs recognized as assets are amortized over the programs estimated useful lives (not more than 5 years) on a straight-line basis. Research and development expenses Research expenditure is recognized as an expense as incurred. Costs incurred in development projects (related to the design and testing of new or improved products) are recognized as intangible assets when the following requirements are met: Completion of production of the intangible asset so that it becomes available for use or sale is technically possible; Management intends to complete the intangible asset in question, for use or sale; There is capacity to use or sell the intangible asset; The manner in which the intangible asset will generate probable future economic benefits is demonstrable; Adequate technical, financial or other resources are available to complete development in order to use or sell the intangible asset; and The outlay attributable to the intangible asset during development may be reliably estimated.
Other development expenditure is recognized as an expense when incurred. Development expenses previously recognized as an expense are not recorded as an asset in a subsequent period. No development costs are capitalized at 31 December 2010. Contracts portfolio Contractual relations with clients acquired through Business combinations are recognized at its fair value at the acquisition date. Contractual customers relationships has a definite life and are measured at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis during the expected duration of the contract (5 years).
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An assets carrying amount is written down immediately to its recoverable amount if the assets carrying amount is greater than its estimated recoverable amount (Note 2.8). Gains and losses on the sale of property, plant and equipment are calculated by comparing the proceeds with the carrying amount and are included in the income statement on the line Other operating revenue. Own work capitalized is carried at production cost and reflected as income in the income statement. Assets received through debt collection procedures are measured at the lower of the price related to the receivable for the corresponding asset, and market price.
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2.6. Non-current assets assigned to projects This caption includes the amount of investments made mainly in transport, car parks, energy and environmental infrastructures that are operated by the Groups subsidiaries and are financed by means of project finance arrangements (Project finance). These financing structures are applied to projects that are themselves capable of providing sufficient guarantees to the participating financial institutions with respect to the repayment of the debts incurred to undertake the project, although additional guarantees can arise in between construction period and project implementation. Each project is carried out through specific companies in which project assets are partly financed by a contribution of funds from the promoters, limited to a certain sum, and partly (generally a larger sum) by long-term external borrowings. Debt servicing is secured basically by the cash flows that will be generated by the project itself in the future and by mortgaging the project assets. The assets are measured based on the costs directly attributable to their construction and incurred up to the date the assets become operational, such as studies and projects, expropriations, replacement services, construction work executed, site management and administration, installations and structures, and other similar costs, as well as those indirectly attributable costs corresponding to the construction period. Likewise, financial expenses accrued during construction period are capitalized. This generally relates to a concession contract. The main characteristics to be considered in relation to non-current assets associated with concession projects are as follows: The concession assets are owned by the granting authority in the majority of cases. The granting authority controls or regulates the concession holders services and the conditions under which they must be rendered. The assets are exploited by the concession holder in accordance with the criteria set out in the concession documents during the stipulated concession term. At the end of that period, the assets revert to the granting authority and the concession holder no longer holds any rights in this respect.
2.7. Interest costs Interest costs incurred in the construction of any qualifying assets are capitalized over the period needed to complete and prepare the asset for the intended use. Other interest costs are expensed.
2.9. Financial assets The Group classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, held to maturity and available for sale. The classification depends on the purpose for which the financial assets were acquired. Management establishes the classification of financial assets when they are initially recognized and reviews the classification at each reporting date. In accordance with IFRS 7 amendment, the Group classifies market-valued financial instruments based on the lowest of used data that were significant with respect to the instrument whole fair value. In compliance with this standard, financial instruments must be classified as follows: 1. 2. 3. Quoted prices in active markets for identical instruments. Directly (prices) or indirectly (based on prices), observable data for the instrument. Data not based on market observations.
classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date. Recognition of financial assets Acquisitions and disposals of investments are recognized at the trading date, i.e. the date the Group undertakes to acquire or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets at fair value through profit or loss are initially carried at fair value and transaction costs are taken to the income statement. Investments are written off when the rights to receive cash flows from them have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amortized cost using the effective interest rate method. Gains and losses resulting from changes in the fair value of financial assets at fair value through profit or loss are included in the income statement in the year in which they arise. Dividend income from financial assets at fair value through profit or loss is recognized in the income statement when the Groups right to receive payment is established. Changes in the fair value of monetary instruments denominated in foreign currency and classified as available for sale are analyzed by separating the differences in the instruments amortized cost and other changes in the instruments carrying amount. Translation differences on monetary instruments are recognized in the income statement, while translation differences on non-monetary instruments are recognized in equity. Changes in the fair value of monetary and non-monetary instruments classified as available for sale are recognized in equity. When available-for-sale instruments are sold or impaired, the cumulative fair value adjustments recognized in equity are taken to the income statement. Interest on available-for-sale instruments calculated using the effective interest rate method is recognized in the income statement item Net financial results. Dividends from available-for-sale equity instruments are recognized in the income statement in Net financial results when the Groups right to receive payment is established. The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value using measurement techniques which include recent uncontrolled transactions between willing and knowledgeable parties relating to other instruments that are substantially identical and the analysis of discounted cash flows and option pricing models, maximizing market input and relying as little as possible on the entitys specific inputs. At the balance sheet date, the Group assesses whether there is objective evidence of impairment losses with respect to a financial asset or group of financial assets. For equity instruments classified as available for sale, in
2.8. Non-financial asset impairment losses Assets with an indefinite useful life and goodwill are not amortized/ depreciated and are tested annually for impairment. Assets subject to amortization/depreciation are tested for impairment provided that an event or change in circumstances indicates that their carrying amount might not be recoverable. An impairment loss is recognized in the amount by which the assets carrying amount exceeds its recoverable amount. The recoverable amount is the higher between an assets fair value less sale costs and value in use. For the purposes of assessing impairment, assets are grouped together at the lowest level for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill for which impairment losses have been recognized are tested at each balance sheet date in the event that the loss has reversed.
Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired mainly for shortterm sale. Derivatives are also categorized as held for trading unless they are designated as hedges. The assets in this category are included in current assets. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date, which are classified as non-current assets. Loans and receivables are included in trade and other receivables in the balance sheet (Note 2.12). Receivables include the present value of future cash flows from certain concessions. In such cases, there is a contractual right to receive future cash flows or other financial assets directly from the granting authority and the granting authority guarantees those payments. Held-to-maturity financial assets Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that Group management has the positive intention and ability to hold to maturity. Should the Group sell a non-insignificant amount of its heldto-maturity financial assets, the entire category will be reclassified as available for sale. Such available-for-sale financial assets are included in non-current assets, except those that mature within 12 months as from the balance sheet date, which are classified as current assets. Available-for-sale financial assets Available-for-sale financial assets are non-derivatives assets that are either designated in this category or not
Repairs and maintenance that do not extend the useful life or production capacity of the relevant assets are expensed in the year the costs are incurred. Payback of the entire investment in a concession is obtained by the end of the project period, net of any amount that the granting authority reimburse at the concession end. The concession holder receives revenues for the services rendered, either directly from users or from the granting authority. Non-current assets assigned to projects consist mainly of intangible assets (see Note 2.5) and property, plant and equipment (see Note 2.4).
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order to determine whether there is impairment losses it will be necessary to examine whether there is a significant or protracted below cost decline in the fair value of the securities. If there is any evidence of this type for available-for-sale financial assets, the cumulative loss determined as the difference between the acquisition cost and current fair value, less any impairment loss in that financial asset previously recognized in the income statement, is removed from equity and recognized in the income statement. Impairment losses recognized in the income statement on equity instruments are not reversed through the income statement. Impairment testing of receivables is described in Note 2.12. Financial assets and liabilities are offset and presented by its net value in the balance sheet when there is a legally enforceable right to compensate the recorded amounts, and the Group has the intention to settle or to realize the asset and cancel the liability simultaneously.
2.10. Derivative financial instruments and hedging activities Derivatives are initially recognized at fair value at the contract date and are subsequently measured at fair value. The method to recognize the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, on the nature of the item being hedged. The Group may designate certain derivatives as: fair value hedges of recognized assets and liabilities (fair value hedge); hedges of a specific risk associated with a recognized liability or a highly probable forecast transaction (cash flow hedge); or hedge of a net investment in a foreign operation (net investment hedge). The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking hedge transactions. The Group also documents its assessment, at inception and on an ongoing basis, of whether or not the derivatives used in hedge transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged items. The fair value of some derivative instruments used for hedging purposes is shown in Note 11. Movements in the hedging reserve are shown in the consolidated statement of changes in equity and Consolidated Statement of Comprehensive Income. The total fair value of hedging derivatives is classified as a non-current asset or liability if the period to maturity of the hedged item is more than 12 months and as a current asset or liability if the period to maturity of the hedged item is less than 12 months. Derivatives not classified as hedges for accounting purposes are carried as current assets or liabilities. Regarding the amendment in IFRS 7, the Group proceeds to classify financial instruments market valuations as stated in Note 2.9. Fair value hedge Changes in the fair value of derivatives that are designated and qualified as fair value hedges are recognized in the income statement together with any change in the fair value of the hedged asset or liability that may be attributable to the risk hedged. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of the hedged item for which effective interest rate method has been used, is recorded as profit or loss up to its maturity. Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges is recognized in equity. The gain or loss relating to the ineffective portion is immediately taken to the income statement item Net financial results.
Amounts accumulated in equity are recorded in the income statement in the periods when the hedged item affects results (for instance, when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of interest rate swaps that hedge variable-rate borrowings is recognized in the income statement item Net financial results. The gain or loss relating to the effective portion of forward foreign currency contracts that hedge sales is recognized in the income statement item Sales and the ones hedging purchases is recognized in Materials consumed and other external costs. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement item Net financial results. Net investment hedge Hedges of net investments in foreign operations are accounted for in a similar way to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in equity. The gain or loss relating to the ineffective portion is immediately recognized in the income statement. Gains and losses accumulated in equity are included in the income statement when the foreign operation is disposed of. At 31 December 2010 and 2009 the Group does not hold net foreign investment hedge derivatives. Derivative financial instruments at fair value through profit or loss Certain derivatives do not qualify for hedge accounting and are recognized at fair value through profit or loss. Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are immediately recognized in the income statement item Net financial results.
2.11. Inventories Raw materials and finished products are carried at the lower between the acquisition or production cost, using the weighted average cost method, and the net realizable value. Finished products and work in progress items costs include design costs, raw materials, direct work force, other direct costs and general manufacturing costs (based on a normal capacity of production facilities). Changes in prices of such inventories referred to variable indexes are recorded against inventories value. Buildings under construction and other structures are measured based on direct execution costs, also including financing costs incurred during the development phase and structural costs attributable to the projects. These items are classified as short- or long-term cycle depending on whether the period to completion is less or more than twelve months. Obsolete, defective or slow-moving products are written down to their net realizable value. Inventories comprise biological assets (see Note 2.27). Net realizable value is the selling price estimated during ordinary business course, less applicable sale variable costs.
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2.12. Trade and other receivables Trade receivables are amounts due from customers related to goods sold or services rendered in the course of the companys business. If the receivables are expected to be collected in a year or less (or in the operation cycle if longer), they are classified as current assets. Otherwise, they are recorded as non-current assets. Trade receivables are initially recognized at fair value and are subsequently measured at amortized cost using the effective interest rate method, less a provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due in accordance with the original terms of the receivables. The existence of significant financial difficulties on the part of the debtor, the probability that the debtor will become bankrupt or undertake a financial restructuring, and late payment or default are considered to be indicators of the impairment of a receivable. The amount of the provision is the difference between the assets carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The assets carrying amount is written down as the provision is applied and the loss is recognized in the income statement. When a receivable is uncollectable, the provision for receivables is adjusted accordingly. Subsequent recoveries of receivables written off are recognized in the income statement for the year in which the recovery takes place.
2.14. Share capital Share capital consists entirely of ordinary shares classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases the Companys equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the Companys equity holders until the shares are redeemed, reissued or sold. When these shares are sold or subsequently reissued, any amount received, net of any incremental cost on the transaction which is directly attributable and the corresponding income tax effects, and is included in equity attributable to the Companys equity holders.
2.17. Borrowings Borrowings are initially carried at fair value net of transaction costs. They are subsequently measured at amortized cost. Any differences between the funds obtained (net of necessary costs) and their repayment value are recognized in the income statement over the life of the debt applying the effective interest rate method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months as from the balance sheet date. Interest and other costs incurred to obtain bank loans are taken to the income statement for the year on an accrual basis.
2.18. Current and deferred taxes Tax expense for the year comprises current and deferred tax. Tax is recognized in the income statement except to the extent it relates to items recognized directly in equity. In this case, tax is also recognized in equity. The current tax charge is calculated based on the tax laws approved or about to be approved at the balance sheet date in the countries where the Groups companies operate and generate results subject to tax. Management assesses regularly the positions taken in relation to tax returns with respect to situations where tax law is subject to interpretation, and establishes, where appropriate, the necessary provisions on the basis of the amounts that it is expected to pay to the tax authorities. Deferred income tax is calculated, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated annual accounts. However, if the deferred taxes arise from the initial recognition of a liability or an asset on a transaction other than a business combination that at the time of the transaction has no effect on the tax gain or loss, they are not accounted for. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the temporary differences can be offset. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary differences is controlled by the Group and it is likely that the temporary difference will not reverse in a foreseeable future. Deferred tax assets and liabilities are offset if, and only if, there is a legally recognized right to offset current tax assets against current tax liabilities and when the deferred tax assets and deferred tax liabilities derive from income tax levied by the same taxing authority on the same taxable entity or person or different taxable entities or persons which intend to settle current tax assets and liabilities on a net basis.
2.15. Government grants Grants from the government are recognized at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants relating to costs are deferred and recognized in the income statement over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred government grants and are credited to the income statement on a straight-line basis over the expected lives of the related assets.
2.13. Cash and cash equivalents Cash and cash equivalents include cash in hand, demand deposits in banks and other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
2.16. Trade payables Trade payables are initially recognized at fair value and are subsequently measured at amortized cost using the effective interest rate method.
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2.19. Employee benefits Pension and retirement obligations For the purposes of their accounting treatment, defined contribution plans under which the companys obligation consists solely of contributing an annual amount must be differentiated from defined benefit plans under which employees are entitled to a specific benefit on the accrual of their pensions. Defined contribution plans A defined contribution plan is a pension plan under which the Group pays fixed contributions to a fund and has no legal or constructive obligation to make additional contributions if the fund has insufficient assets to pay to all the employees the benefits related to the services rendered in the current year and in prior years. Contributions accrued in respect of defined contribution plans are expensed annually. Defined benefit plans A defined benefit plan is a pension plan that is not a defined contribution plan. A defined benefit plan usually defines the amount of the benefit that will be received by an employee at the time of retirement, normally on the basis of one or more factors such as age, years of service and remuneration. The liability recognized in the balance sheet with respect to defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of the plan assets and any unrecognized past service costs. The defined benefit obligation is calculated annually by independent actuaries in accordance with the projected unit credit method. The present value of the obligation is determined by discounting the estimated future cash flows at interest rates on government bonds denominated in the currency in which the benefits will be paid and maturities similar to those of the relevant obligations. At 31 December 2010 and 2009 the Group does not hold such kind of operations. Termination benefits Termination benefits are payable as a result of the Groups decision to terminate employment before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes these benefits when it has demonstrably undertaken to terminate current employees employment in accordance with a formal detailed plan that cannot be withdrawn, or to provide severance indemnities as a result of an offer made to encourage voluntary redundancy. Benefits that will not be paid within 12 months of the balance sheet date are discounted to their present value.
Profit-sharing and bonus plans The Group recognizes a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the profit attributable to the Companys equity holders after certain adjustments. The Group recognizes a provision when contractually obliged or when there is a past practice that has created a constructive obligation.
2.21. Revenue recognition Sales include the fair value of payments received or receivable for the sale of goods and services in the ordinary course of the Groups activities. Sales are presented net of value added tax, returns, rebates and discounts, and after eliminating sales within the Group. The Group recognizes revenue when the amount may be reliably estimated, it is likely that the future economic benefits will flow to the entity and the specific conditions are fulfilled for each of the Groups activities, as described below. A reliable calculation of the amount of revenue is not deemed possible until all sale-related contingencies have been resolved. The Groups estimates are based on historical results, taking into account customer type, transaction type and specific terms. The methods used to recognize revenue in each of the Groups business activities are described below: Construction business When the results of a construction contract may be reliably estimated, ordinary revenue and associated costs of the contract are recognized as such in the income statement, based on the percentage of completion of the activity performed under the contract at the balance sheet date. When a project is expected to generate a loss, the necessary provisions are recorded to cover the entire loss during preparation of the updated budget. Percentage of completion is generally determined by examining work executed. This method may be used since all contracts generally include: a definition of each project unit that must be executed to complete the whole project; a measurement of each of these project units; and the price at which each unit is certified.
nably assured with respect to the completed work are recognized as contract revenue, subject to the limit of the total contract costs. During the execution of construction work, unforeseen events not envisaged in the primary contract may occur that increase the volume of work to be executed. These changes to the initial contract require the customers technical approval and subsequent financial approval. This approval permits, from that moment, the issue and collection of certificates for this additional work. Revenue from the additional work is not recognized until the customers approval is reasonably assured; costs incurred in this work are, however, recognized when incurred, irrespective of the degree of approval obtained from the customer. In the event that the amount of work actually executed in a project exceeds the amount certified at the year end, the difference between the two amounts is reflected in the consolidated balance sheet item Trade and other receivables. When the amount of work actually executed in a project is lower than the amount of the certificates issued, the difference is recognized in the consolidated balance sheet item Trade and other payables. Estimated project close-out costs are provisioned and apportioned over the execution period. These costs are recognized proportionally on the basis of estimated costs as a proportion of executed work. Costs incurred from projection completion to definitive settlement are charged to the provision recorded and the remaining balance is recognized in the item Provisions for other liabilities and charges in current liabilities in the consolidated balance sheet. Late-payment interest arising from delays in the collection of certificates from public administrations is recognized when it is likely that the interest will actually be collected and the amount may be reliably measured. Costs relating to the tendering of bids for construction contracts are taken to the income statement when incurred, when the success of the bid is not probable or is not known at the date the costs are incurred. Bid tendering costs are included in the cost of the contract when the success of the bid is probable or is known, or when it is certain that the costs will be reimbursed or included in contract revenue. Engineering business Engineering project revenue is recognized on a percentage-of-completion basis, based on direct costs incurred in relation to total estimated costs. The methods described for the construction business, as regards the recognition of revenue for additional work, recognition of estimated future losses by recording provisions, accounting treatment of any timing differences between revenue recognition for accounting purposes and the certificates issued to customers, and the recognition of late-payment interest, are also applied to the engineering business. Concessions and services business The Group has concessions to operate electricity infrastructure, car parks, toll roads, etc. The services bu189
2.20. Provisions The Group recognizes a provision when: it has a present legal or constructive obligation as a result of past events; it is likely that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognized for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are carried at the present value of forecast payments that are expected to be required to settle the obligation, using a rate before taxes that reflects the current market assessment of the time value of money and the specific risks of the obligation. Any increase in the provision over time is recognized as interest expense.
In order to put this method into practice, at the end of each month a measurement of completed units is obtained for each project. The resulting total is the amount of construction work executed at the contractual price, which is recognized as project revenue from inception. The difference with respect to the corresponding figure a month earlier is production for the month, which is the amount recognized as revenue. Construction work costs are recognized for accounting purposes on an accrual basis; costs actually incurred to execute project units completed, plus costs that may be incurred in the future and must be allocated to the project units completed, are recognized as expenses. The application of this revenue recognition method is combined with the preparation of a budget made for each construction contract by project unit. This budget is used as a key management tool in order to maintain detailed monitoring, project unit by project unit, of fluctuations between actual and budgeted figures. In such exceptional cases, when it is not possible to estimate the margin for the entire contract, the total costs incurred are recognized and sales that are reaso-
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siness consists mainly of environmental services, such as wastewater treatment, and maintenance services for industrial infrastructure and related areas. Under concession and management contracts for services, revenue and expenditure is recognized on an accrual basis, irrespective of when the related monetary or financial flows take place. The accounting treatment of the main activities is described below. Multiple element contracts Concessions for public services are contracts between a private operator and the Government or a different public body, in which the latter party grants to the private operator the right to provide public services such as the supply of water or electricity, or the operation of roads, airports or prisons. Control over the asset is retained by the public sector, but the private operator assumes responsibility for building the asset and for operating and maintaining the infrastructure. Depending on the contract terms, concessions are treated as intangible assets (when the predominant element is that the concession holder has the right to receive fees directly from users or the level of future flows are not assured by the granting authority) or as financial assets (when the granting authority guarantees a level of future cash flows). The Group offers certain agreements under which it builds an infrastructure in exchange for a concession to operate it for a specified period. When such contracts contain multiple elements, the amount of revenue recognized is defined as the fair value for each phase of the contract. Revenue from infrastructure construction and engineering is recognized as described in the preceding paragraphs. Revenue from an intangible asset operation is recognized on an accrual basis as operating revenue. When a financial asset has been previously recognized, revenue is treated as a principal repayment with an interest income component. The characteristics of the Groups main activities are described below: Toll roads/electricity transmission lines In most cases, the principle of risk and business venture on the part of the concession holder coexists with the principle of assurance of the concessions economic and financial equilibrium on the part of the Government. Revenue is recognized at fair value during the construction phase. When the granting authority directly provides or guarantees a level of revenue for the concession holder, the asset is included in receivables. When the concession holder has the right to receive fees from users or revenues are not guaranteed, an intangible asset is recognized. In such cases, the Group recognizes revenue on an accrual basis and the intangible asset is depreciated over the concession term using a straight-line method, except for some toll rails infrastructures concessions in which the depreciation is recognized based in the traffic forecast for the concession. Car parks Car park business may be divided into:
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customer. The sale and related costs are not recognized until the parking space has been handed over, which usually coincides with the execution of the public deed of sale. Additionally, in order to recognize the sale and costs, construction of the car park must have been completed and the license for the use of the car park must have been delivered. Commitments formalized in car park sale contracts pending handover are recorded as advanced receivables in the amounts obtained on account of the parking space. Capitalized costs are included in inventories and measured as described in the relevant section. On-street car parks: This is a public service rendered to local authorities, which mainly concerns the management of public parking and the collection of the fees charged by municipalities for these services. The revenues are usually the hourly parking fees paid or the price paid for the public service by the council and is recognized when the relevant amounts fall due for payment. In the case of concessions, the amount paid to obtain the concession is recognized in the income statement over the concession period. Capitalized costs are included as intangible assets or financial assets, depending on the characteristics of the contract. Depreciation is charged on a straight-line basis during the concession term and begins when the asset is available for use. Off-street car parks: In this case, revenues arise from the use of parking spaces owned by the company or held under an administrative concession. Off-street car park revenues are recorded when the hourly parking rate is paid and, in the case of season ticket holders, on an accrual basis. Revenues from mixed car parks (off-street and for local residents) are recognized as described in the preceding paragraph, in the case of the off-street spaces. As regards spaces for local residents, the amounts received for spaces handed over are recorded in liabilities and taken to the income statement on a straight-line basis over the relevant concession periods, provided the distributable costs may not be reasonably segregated. During the accounting period in which the revenues are recognized, the necessary provisions are posted to cover costs to be incurred following handover. These provisions are calculated using the best estimates of costs to be incurred and may only be reduced as a result of a payment made in relation to the costs provisioned or a reduction in the risk. Once the risk has disappeared or the payments have been made, the surplus provision is reversed. Capitalized costs are recognized as intangible assets. Real estate business The Group companies recognize sales and results of real estate development projects when the property is handed over to the buyer, which usually coincides with the execution of the public deed of sale. Amounts received on account are included in Trade and other payables on the liabilities side of the consolidated balance sheet.
2.22. Leases When a Group company is the lessee Finance lease The Group leases certain property, plant and equipment. Property, plant and equipment leases where the Group has substantially all the risks and rewards of ownership are classed as finance leases. Finance leases are capitalized at the leases inception at the lower between the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the outstanding debt. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance lease is depreciated over the shorter of the useful life of the asset or the lease term. When a Group company is the lessee Operating lease Leases in which a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Payments made under operating leases (net of any incentives received from the lesser) are charged to the income statement on a straight-line basis over the period of the lease. When a Group company is the lessor When assets are leased under finance lease, the present value of lease payments is recognized as a financial receivable account. The difference between the gross receivable and the present value of that amount is recognized as a financial return on capital. Lease revenues are recognized during the lease period in accordance with the net investment method, which reflects a constant periodic rate of return. Assets leased to third parties under operating lease contracts are included in tangible fixed assets on the balance sheet. Income from leases is recognized on a straight-line basis during the lease term.
Car parks for local residents: This business involves the construction of car parks whose spaces are sold directly to the end
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2.23. Non-current assets (or disposal groups) held for sale Non-current assets (or disposal groups) are classified as held-for-sale assets and are recognized at the lower between carrying value and fair value less selling costs, if the carrying value is mainly recovered through sale instead of continuing use. There are no non-current assets (or disposal groups) held for sale at the balance sheet dates.
2.27. Biological assets Agricultural products harvested or collected from biological assets are measured at the point of sale or harvest at fair value less estimated costs at point of sale. Such measurement relates to the cost value at the harvest or collection date for the purposes of measuring inventories. Gains or losses on the variation in fair value less estimated costs at point of sale are recognized in the consolidated income statement. Specifically: agricultural products like grains are recorded at market value, net of marketing costs. Additionally assets used in the production process are recognized at their replacement cost.
Financial risk management

3.1. Financial risk factors Groups activities are exposed to a variety of financial risks: market risk (including foreign exchange risk, fair value interest rate risk and price risk), credit risk and liquidity risk. The Groups overall risk management program focuses on financial markets uncertainty and seeks to minimize potential adverse effects on the Groups financial performance. The Group uses derivative financial instruments to hedge certain risks. Risk management is performed by the Groups Central Treasury Department in accordance with policies approved by the Board of Directors. This department identifies, evaluates and hedges financial risks in close association with the Groups operating units. The Board provides written policies for overall risk management and for specific areas such as foreign exchange risk, interest rate risk, liquidity risk, use of derivatives and non-derivatives, and investment of cash surpluses. a. Market risk a.1. Foreign exchange risk had the functional currency of each country with transactions in US dollars depreciated/appreciated by 10% against the US dollar, without any change in the remaining variables, the consolidated result after tax for 2010 would have been 8.085 thousand euro lower/higher (2009: 7.672 thousand euro lower/higher), mainly due to the effects of the increase/decrease in USD liability/ asset positions. Equity would have changed by the same amounts (effects calculated excluding the impact of fair value changes in the derivative financial instruments contracted). The Group has a number of investments in foreign operations whose net assets are exposed to foreign exchange risk. These investments are located basically in Latin America (Brazil and Mexico), USA and India. In general, the Group ensures that operations in each country are financed by borrowings in the functional currency of that country so that foreign exchange risk only affects the capital investment. Where the investment is partially or fully financed by borrowings, the Group ensures that the loans are obtained in the correspondent functional currency. When no financing is used, the Group does not contract hedges, except in certain cases in which shortterm forecast flows relating dividends from the subsidiary are hedged. Set out below is a breakdown of the main foreign currency exposures affecting capital investments:
2.24. Dividend distribution Dividend distribution to the Companys equity holders is recognized as a liability in the Groups consolidated annual accounts in the year in which the dividends are approved by the parent Companys equity holders.
2.28. Financial information by segments Operative segments are consistently disclosed with internal information, which is presented to the highest decision-making unit. This unit is responsible for operative segments resources allocation and for these segments` performance assessment. Management Committee has been designed as the highest decision-making unit.
2.25. Environment The consolidated Group has no environmental liabilities, costs, assets, provisions or contingencies that could be significant in relation to its equity, financial situation and results. No specific breakdowns are therefore included in these notes to the consolidated annual accounts relating to environmental issues.
2.26. Operating results The income statement caption operating results includes the results of the Group companies ordinary activities, excluding financial results (see Note 27) and shares on associates` profits.
The Group has international operations and is therefore exposed to foreign exchange risk during currency transactions, relating particularly to the US dollar (USD), Brazilian real, Mexican peso, Qatari real and Indian rupee, as well as to other currencies. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. Management has implemented a policy that requires the Group companies to manage foreign exchange risk with respect to their functional currency. The Group companies are obliged to hedge all foreign exchange risk through the Central Treasury Department. Foreign exchange risks arising from future commercial transactions and recognized assets and liabilities are hedged by means of forward contracts traded through the Groups Treasury Department. Foreign exchange risk arises when future commercial transactions or recognized assets and liabilities are denominated in a currency other than the companys functional currency. The Groups Treasury Department has a policy of hedging net forecast flows deriving from forecast transactions in currencies other than the functional currency of the Group company that effects the transaction. At 31 December 2010 and 2009 there were foreign current put transactions related to companies located in Spain, Africa, India and Latin America (See Note 11). The Groups transactions are generally completed in each countrys functional currency, although transactions are often effected in a different currency (mainly in Spain and Latin America), particularly in US dollars. At 31 December 2010,
2010 Brazilian Real (*) Mexican Peso (*) Indian Rupee US Dollar (*) Other currency (*) Total 392,592 267,976 93,238 22,806 4,343 780,955
2009 335,550 214,222 66,544 10,399 6,191 632,906
(*) Excluding the value of goodwill at each date, as mentioned in Note 7.1.
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a.2. Price risk The Group is not exposed to equity instrument price risk since it has no significant investments. The Group is partially exposed to market price risk in respect of raw materials, relating basically to metals and oil, which affect the price of supplies of equipment and materials manufactured in the projects executed by the Group. Generally, these effects are efficiently passed on in selling prices by all similar contractors operating in the same sector. It is also exposed to risk of change in price of raw materials used in the biodiesel production, which has begun during 2009. The Group reduces and mitigates price risk by means of policies implemented by management, consisting basically of a reduction or increase in the rate of placements and the selection of currencies and countries of origin, as well as by ensuring the production or acquisition of certain raw materials at a closed price. For oil purchases to use as raw material in biodiesel production, the Group has purchase contracts in which oil price is referred to diesel quotation, which in turn is the reference price for biodiesel. In this way, margins are assured.
The Group analyses its exposure to interest rate risk in a dynamic manner. A simulation is performed in which the Group calculates the effect on results of a specific change in the interest rate. In each simulation, the same interest rate fluctuation is used for all currencies and reference rates. Scenarios are only simulated for liabilities representing the most relevant interest-bearing positions. Based on the simulations performed, the impact on results after tax of an increase/decrease of 100 basis points in the interest rate would have been a reduction/increase of 2.839 thousand euro (2009: 2.450 thousand euro), mainly due to a rise/reduction in interest expense on variable-rate loans; equity would have changed by the same amounts (effects calculated without considering the impact of fair value changes in the derivative financial instruments contracted). Borrowings The Groups interest-rate risk arises mainly from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Fixed-interest borrowings expose the Group to fair value interest rate risk. A large part of the Groups borrowings are obtained at variable rates, the main reference rate being the Euribor. The Group uses interest rate swaps to convert long-term financing to fixed interest rates. Exposure to variable interest rate risk at each year end is analyzed below:
a.3. Cash flow and fair value interest rate risk Interest rate risk must be analyzed in relation to the two types of financing obtained by the Group: Project finance As explained in Note 8, the Group participates in a number of investment projects under Project finance arrangements in which, among other aspects, repayments are secured only by cash flows from the respective projects; there may be, in some cases and during the construction phase, additional guarantees. In such cases, financing mainly comprises long-term, variablerate instruments. The interest rates applicable depend on the country in which the project is lo
cated and on the currency in which the financing is issued. Financing issued at variable rates exposes the Group to cash flow interest rate risk. The Group uses interest rate swaps to convert long-term financing totally or partially to fixed interest rates. Additionally, under certain project finance contracts the company that obtains the financing undertakes vis--vis the granting banks to contract the above-mentioned derivative financial instruments. Exposure to variable interest rate risk at each year end is analyzed below:
2010
Financing Interest-bearing cash and cash equivalents Net position Portion hedged by derivative financial instruments
Euribor rates 399,528 (59,397) 340,131 100%
TJLP rate (*) 285,788 (68,072) 217,716 0%
TIIE rate (**) 296,782 (29,274) 267,508 96%
PLR rate (***) 252,912 (65,815) 187,097 0%
Other rates (1,403) (1,403) 0%
Total 1,235,010 (223,962) 1,011,048 59% Borrowings Interest-bearing cash and cash equivalents Net position Portion hedge by derivative financial instruments Euribor rate 1,119,646 (237,429) 882,217 86%
2010
Other rates 130,722 (436,414) (305,692) 0% Total 1,250,368 (673,843) 576,525 131% Euribor rate 889,777 (186,575) 703,202 89%
2009
Other rates 18,178 (114,667) (96,489) 0% Total 907,955 (301,242) 606,713 104%
2009
Financing Interest-bearing cash and cash equivalents Net position Portion hedged by derivative financial instruments (*) Brazilian long-term reference interest rate (**) Mexican long-term reference interest rate (***) Indian long-term reference interest rate
Euribor rates 374,145 (31,327) 342,818 73%
TJLP rate (*) 365,650 (20,756) 344,894 0%
TIIE rate (**) 190,929 (7,996) 182,933 132%
PLR rate (***) 30,585 (17,424) 13,161 0%
Other rates 8,761 (4,878) 3,883 0%
Total 970,070 (82,381) 887,689 55%
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The Group analyses exposure to interest rate risk in a dynamic manner. A number of scenarios are simulated taking into account refinancing, renewal of current positions, alternative financing, existence of variable-rate investments (in this sense, very short-term interest-bearing placements are treated as being exposed to variable interest rates) and existing hedges. Through these scenarios, the Group calculates the effect on results of a specific change in the interest rate. In each simulation, the same interest rate fluctuation is used for all currencies. Scenarios are only si-
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mulated for liabilities that represent the most relevant interest-bearing positions. Based on the simulations conducted, the impact on after-tax results of an increase/decrease of 100 basis points interest rate would decrease/ increase in (717) thousand euro (2009: (172) thousand euro), mainly due to higher/lower interest expense on variable rate loans. Equity would have changed in the same amount (effects calculated not considering the impact of changes in fair value of financial derivatives contracts). b. Credit risk The Group manages credit risk in relation to the following groups of financial assets: Derivative financial instruments (see Note 11) and balances included under Cash and cash equivalents and financial assets at fair value through profit or loss (see Note 14). Balances related to trade and other receivables (see Note 12). Derivative financial instruments and bank borrowings included in cash and cash equivalents and financial assets at fair value through profit or loss are contracted with reputable financial institutions that obtain high credit ratings. Investments in government bonds and treasury bills also relate to governments with high credit ratings. A high proportion of trade and other receivables (62.37% and 60.72% at 31 December 2010 and 2009, respectively) relate to transactions with national and international public institutions and the Group therefore considers that credit risk is under tight control. A significant part of the receivables from private companies relate to companies with high credit ratings and there is no default history with respect to the Group. A periodic follow-up is performed of the overall position in trade and other receivables and also an individual analysis of the most significant exposures. c. Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, Group Treasury aims to maintain flexibility in funding by keeping committed credit lines available. Regarding to the Groups project financing arrangements (Project finance), as explained in Note 7, repayments are secured only by cash flows from the respective projects. In such cases, the Group hedges liquidity risk by ensuring that financing is long term and structured on the basis of the forecast cash flows for each project. Accordingly, 82% of financing recognized at 31 December 2010 (2009: 85%) falls due after more than one year and 68% of the financing recognized at 31 December 2010 (2009: 69%) falls due after more than four years. As regards the Groups liquidity position, mana-
gement monitors the Groups forecast liquidity based on expected cash flows. The following table contains a breakdown of the Groups financial liabilities that will be settled in the net amount, grouped together by maturity date based on the period from the balance sheet date to the maturity date stipulated in each contract. The amounts shown in the table relate to undiscounted cash flows stipulated in the contract. Balances payable in less than 12 months reflect the relevant carrying amounts as the effect of discounting is not significant.
At 31 December 2010 Borrowings Derivative financial instruments Trade and other payables (excluding deferred revenue) Accrued uinmatured interest Total At 31 December 2009 Borrowings Derivative financial instruments Trade and other payables (excluding deferred revenue) Accrued unmatured interest Total
Less than 1 year
Between 1 and 2 years
Between 2 and 5 years
More than 5 years
372,804 12,559 2,559,171 37,239 2,981,773
62,315 2,382 3,331 31,877 99,905
606,621 7,146 3,405 69,515 686,687
208,628 38,118 9,293 11,774 267,813
216,894 6,200 2,191,878 23,985 2,438,957
38,763 20,562 23,188 22,879 105,392
589,819 476 20,889 611,184
62,478 2,539 7,792 72,809
Liquidity risk is managed on an overall, centralized basis by Group Treasury. This includes both managing cash from the Groups recurring transactions (analysis and follow-up of debt maturities, collections, renewal and contracting of loans, management of available credit lines, and temporary placement of cash surpluses) and ma-
naging the funds necessary to undertake planned investments. At 31 December 2010 the Group has a positive working capital amounting 73 thousand euro. Operative cash flow net from tax effect for 2011 is expected to exceed 317 thousand euro.
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3.2. Capital risk management The Groups capital management objectives consist of protecting its capacity to do business as a going concern in order to obtain a return for shareholders and profits for other holders of equity instruments, as well as to maintain an optimal capital structure and reduce cost of capital. In order to maintain or adjust the capital structure, the Group could adjust the amount of dividends payable to shareholders, reimburse capital to shareholders, issue new shares or sell shares to reduce debt. The Group monitors capital based on the leverage ratio, in line with industry practices. This ratio is calculated as net debt divided by total capital (excluding the
position assigned to projects). Net debt is calculated as total borrowings (including current position in trade and other payables, as reflected in the consolidated accounts) less cash and cash equivalents and financial assets at fair value through profit or loss. Capital is calculated as equity, as reflected in the consolidated accounts, plus net debt. In 2010, the Groups strategy, which has not changed since 2009, consisted of keeping the leverage ratio below 80%, which is deemed reasonable considering that the Groups main businesses (construction and engineering) are characterized by high levels of working capital (both financial assets and financial liabilities). Leverage ratios at 31 December 2010 and 2009 are shown below:
Accounting estimates and judgments

The preparation of consolidated annual accounts under IFRS-EU requires that management make estimations and assumptions that could affect the accounting policies adopted and the amounts of assets, liabilities, revenue, expenses and related breakdowns. The estimates and assumptions made are based on past experience or other facts that are deemed to be reasonable under the circumstances, at the balance sheet date, the result of which is the basis from which to judge the carrying amount of the assets and liabilities that cannot be immediately determined in any other manner. Actual results could differ from estimated ones. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Certain accounting estimates are considered to be significant if the amount of the estimates and assumptions is material and if the impact of the estimates and assumptions on the financial position or operating results is material. Group managements main estimates are explained below. initially recognized, such differences will have an effect on income tax and the provisions for deferred taxes in the year in which they are deemed to arise. In this sense, there are no significant aspects subject to estimates that could have a material impact on the Groups position. Fair value of derivatives or other financial instruments The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group exercises judgment to select a variety of methods and to make assumptions based mainly on market conditions at the balance sheet date. The Group has used discount cash flow analyses for a number of available-for-sale financial assets not traded in active markets. Revenue recognition The Group recognizes revenue from construction and engineering activities on a percentage-of-completion basis. Percentage of completion is calculated as costs incurred under the contract as a percentage of estimated total contract costs. This revenue recognition method is only used when the result of the contract may be reliably estimated and the contract is likely to generate profits. If the result of the contract cannot be reliably estimated, revenue is recognized as costs are recovered. When a contracts costs are likely to exceed the contracts revenue, the loss is immediately expensed. When applying the percentage-of-completion method, the Group makes significant estimates in relation to total costs necessary to perform the contract. These estimates are reviewed and evaluated periodically to verify whether a loss has been generated and whether the percentage-of-completion method may continue to be applied, or to reestimate the forecast project profit. During the project, the Group also estimates likely contingencies relating to the increase in the total estimated cost and adjusts revenue recognized accordingly. The Groups historical data indicates that its estimates are adequate and reasonable in relation to the above-mentioned aspects. Useful lives of property, plant and equipment and intangible assets Group management determines estimated useful lives and related depreciation charges for its property, plant and equipment and its intangible assets. This estimate is based on the period during which the non-current assets will generate economic benefits. At each account close, the Group reviews the useful lives of non-current assets. If the estimates differ from previous estimates, the effect of the change is recognized prospectively as from the year in which the change takes place. For those intangible assets related to railway administrative concessions that are depreciated in a systematic way based on the expected traffic and expected revenues, Group`s management annually updates traffic estimates made for such concessions.
2010 Borrowings (see Note 19) y Trade and other payables Current (see Note 18) Less: financial assets at fair value through profit or loss (see Note 14.2) Less: cash and cash equivalents (see Note 14.1) Net debt Equity (including minority interests) Total share capital Leverage ratio (net debt / total capital) 3,809,539 (2,300) (937,555) 2,869,684 771,074 3,640,758 78.8%
2009 3,099,833 (504) (420,778) 2,678,551 725,450 3,404,001 78.7%
4.1. Critical accounting estimates and judgments The Group makes estimates and judgments concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and judgments that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Estimated impairment of goodwill The Group verifies annually whether there is an impairment loss with respect to goodwill, in accordance with the accounting policy in Note 2.8. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates and sensitivity analyses are performed on the most relevant variables included in the estimates, paying particular attention to situations in which potential impairment indicators may be identified (see Note 7.1). Income tax The Group is subject to income taxes in numerous jurisdictions. A significant level of judgment is required to determine the worldwide provision for income tax. There are many transactions and calculations with respect to which the ultimate calculation of the tax is uncertain in the ordinary course of business. The Group recognizes liabilities for anticipated tax problems based on estimates as to whether additional taxes will be necessary. When the final tax result differs from the amounts which were
3.3. Fair value estimation The fair value of financial instruments traded in active markets (such as publicly traded derivatives and held-for-trading and available-for-sale investments) is based on quoted market prices at the balance sheet date. The market price used for financial assets is the current bid price. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Market prices or brokers prices are used for long-term payables. Other techniques, such as the estimated
discounted cash flow method, are used to determine fair value for the remaining financial instruments. The fair value of interest-rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date. The carrying amount less the provision for the impairment of receivables and payables is assumed to approximate their fair value. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.
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Warranty claims The Group generally offers 24- or 36-month warranties on its projects and services. Management estimates the related provision for future warranty claims based on historical warranty claim information, as well as recent trends that might suggest that past cost information may differ from future claims. As in the case of revenue recognition, the Groups historical data indicates that its estimates are adequate in this respect. Receivables and financial assets The Group makes estimates relating to the collectability of balances owned by customers in projects in which disputes have arisen or litigation is in progress due to disagreement with the work executed or the failure to fulfill contractual clauses linked to the return on the assets handed over to customers. The Group also makes estimates to assess the recoverability of available-for-sale financial assets, based mainly on the financial health and near-term business prospects of the investee company. Provisions Provisions are recognized when it is probable that a present obligation arising from past events will result in an outflow of funds and the amount of the obligation may be reliably estimated. Significant estimates are required in order to comply with IFRS. Group management makes estimates of the likelihood of the contingencies and the amount of the liability to be settled in the future, evaluating all relevant information and facts.
Financial information by segments

Operative segments have been determined based on the information presented to Management Committee, which is used to strategic decision making. Regarding operative segments, the Committee considers there are 5 business units: Construction, Engineering and Industrial Services, Concessions, Renewable Energies and Real Estate. Moreover, an additional analysis concerning geographical areas in which the Group operates is performed: Spain, Latin America (mainly Mexico, Brazil and Argentina), Asia (basically India), and others (including mainly activities carried out in Angola or Algeria). Since the Renewable Energies segment has been recently incorporated and considering it does not reach the quantitative limits under IFRS 8, the decision has been taken not to present this segment separately, but to include it in Engineering and Industrial Services. Revenues from this segment are obtained from fuel (biodiesel) sale to external customers. Businesses from Real Estate segments are included under Others, Corporate and Consolidation Adjustments, due to its low contribution to Group operations; revenues from this segment are obtained through real estate sales. Construction and Engineering and Industrial Services segments obtain their revenue mainly by rendering construction services, whereas Concessions segment obtain them through the sale of the corresponding service according to the type of concession to which it relates. Revenues generated between segments mainly come from construction services rendered by Construction and Engineering and Industrial Services to the rest of segments or to the Groups Corporate. These revenues are carried out under market conditions and analyzed by Management Committee as stated in Own work capitalized. Operative segments performance is assessed by Management Committee based on the valuation of each segment operating result. Total impact on Net financial results of financial income and expenses are analyzed by each individual segment. A detailed analysis is carried out by Treasury Department, which manages Groups cash position. Likewise, income tax is analyzed at Group level by Management Committee.
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Segment-information presented to Management Committee at 31 December 2010 is as follows:
Segment-information presented to Management Committee at 31 December 2009 is as follows:
2010 Revenue from external customers Segments ordinary revenue Own work capitalized Other operating revenue Total operating revenue Depreciation and charges due to impairment Operating expenses Operating result Net financial results Shares in associates` profit/ (Loss) Before-tax profit/(loss) Income tax Profit/(loss) for the year Total Assets Total assets include: Investments in associates Additions to non-current assets Total Liabilities
Construction 1,281,931 1,305,269 1,305,269 (7,725) (1,203,640) 93,904 4,495 98,399 1,558,378 7,455 1,309,446
Engineering and Industrial Services 1,625,958 1,718,059 45,615 1,763,674 (33,829) (1,642,826) 87,019 (21,374) 65,645 2,168,063 14,747 1,666,576
Concessions 163,577 163,577 397 163,974 (33,598) (51,429) 78,947 (44,410) (6,562) 27,975 2,172,660 8,761 377,102 1,951,108
Other, Corporate and Consolidation Adjustments 117,274 1,835 1,017 4,017 6,869 (11,540) (47,497) (52,168) (54,432) (510) (107,110) (20,949) 205,553 170,235 6,046 406,450
Total 3,188,740 3,188,740 1,017 50,029 3,239,786 (86,692) (2,945,392) 207,702 (115,721) (7,072) 84,909 (20,949) 63,960 6,104,654 178,996 405,350 5,333,580
2009 Revenue from external customers Segments ordinary revenue Own work capitalized Other operating revenue and inventory changes Total operating revenue Depreciation and charges due to impairment Operating expenses Operating result Net financial results Shares in associates` profit/ (Loss) Before-tax profit/(loss) Income tax Profit/(loss) for the year Total Assets Total assets include: Investments in associates Additions to non-current assets Total Liabilities
Construction 1,225,194 1,232,984 1,232,984 (7,516) (1,150,241) 75,227 7,650 82,877 1,448,945 8,774 1,167,156
Engineering and Industrial Services 1,588,542 1,524,362 22,467 105,296 1,652,125 (21,828) (1,526,969) 103,328 (18,007) 85,321 1,948,628 31,726 1,308,685
Concessions 106,298 106,317 435 106,752 (27,515) (32,505) 46,732 (25,844) (6,080) 14,808 1,703,590 13,791 613,228 1,570,921
Other, Corporate and Consolidation Adjustments 39,128 95,499 (68,820) 26,679 (8,199) (59,663) (41,183) (69,415) (5,932) (116,530) (10,296) 91,964 43,268 6,620 420,915
Total 2,959,162 2,959,162 22,467 36,911 3,018,540 (65,058) (2,769,378) 184,104 (105,616) (12,012) 66,476 (10,296) 56,180 5,193,127 57,059 660,348 4,467,677
During 2010 and 2009 no charge due to goodwill impairment has been recognized. Ordinary revenues from external customers are measured consistently with those applied in the income statement. Total assets and liabilities amounts presented to Management Committee are measured consistently with those applied in the consolidated annual accounts. These assets and liabilities are assigned based on segment activities and physical asset location.
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The parent company is domiciled in Spain, but the Group also operates abroad. Information by geographical segment at 31 December 2010 is presented below:
6
Other Consolidation Adjustments 532,391 206,282
Property, plant and equipment

Set out below is a breakdown of property, plant and equipment showing movements:
2010 Ordinary revenue from external customers Total assets Total assets include: Non-current assets Total Liabilities
Spain 1,588,804 3,353,428
Latin America 865,835 2,019,099
Asia 201,710 525,845
Total 3,188,740 6,104,654
1,480,597 3,609,985
1,014,680 1,254,800
296,064 388,989
(987) 79,806
2,790,354 5,333,580 Cost 2010
Land and buildings
Plant machinery and tooling
Furnishings
Vehicles
Data processing equipment 16,949 1,898 (7,608) 11,239
PPE in progress
Other PPE
Total
The parent company is domiciled in Spain, but the Group also operates abroad. Information by geographical segment at 31 December 2009 is presented below:
1 January Additions Disposals Impairment Other Consolidation Adjustments 329,679 182,836 Transfers Total 2,959,162 5,193,127 31 December Accumulated Depreciation 1 January Depreciation
121,546 3,247 (770) (1,800) 680 122,903
142,625 8,845 (9,197) 483 142,756
9,390 833 (1,642) 8,581
21,860 1,472 (3,157) 20,175
581 4,397 4,978 -
5,172 380 (388)
318,123 21,072 (22,762) (1,800)
(823) 4,341
340 314,973
2009 Ordinary revenue from external customers Total assets Total assets include: Non-current assets Total Liabilities
Spain 1,793,418 2,958,047
Latin America 749,494 1,661,282
Asia 86,571 390,962
(5,043) (2,527) 285 1,800 (1,048) (6,533) 116,370
(64,462) (20,501) 7,724 (40) (77,279) 65,477
(4,716) (673) 1,308 (145) (4,226) 4,355
(10,774) (2,466) 1,548 (1,079) (12,771) 7,404
(11,895) (1,585) 6,422 (7,058) 4,181
4,978
(4,699) (504) 151 1,780 (3,272) 1,069
(101,589) (28,256) 17,438 1,800 (532) (111,139) 203,834
1,414,879 2,872,714
1,089,850 1,032,293
245,102 269,469
7,161 293,201
2,756,992 4,467,677
Disposals Impairment Transfers
During 2010 and 2009 ordinary revenue from transactions carried out with a single customer representing more than 10% of the Group has not been recognized.
31 December Net book value
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2009 Cost 1 January Additions Disposals Transfers 31 December Accumulated Depreciation 1 January Depreciation Disposals Transfers 31 December Net book value
Land and buildings
Plant machinery and tooling
Furnishings
Vehicles
Data processing equipment
PPE in progress
Other PPE
Total
Goodwill and other intangible assets

7.1. Goodwill Set out below is an analysis of goodwill, the only intangible asset with an indefinite useful life, showing movements:
2010 Beginning of the year 2009 486,662 (470) 486,192
144,418 1,476 (24,348) 121,546
138,604 17,018 (18,748) 5,751 142,625
9,190 1,060 (848) (12) 9,390
16,737 4,178 (847) 1,792 21,860
15,895 2,494 (899) (541) 16,949
7,691 154 (7,264) 581
4,139 1,389 (159) (197) 5,172
336,674 27,769 (21,501) (24,819) 318,123
(4,587) (1,128) 672 (5,043) 116,503
(67,823) (19,446) 18,353 4,454 (64,462) 78,163
(4,199) (571) 815 (761) (4,716) 4,674
(6,235) (2,338) 491 (2,692) (10,774) 11,086
(11,154) (1,329) 728 (140) (11,895) 5,054
581
(3,892) (703) 153 (257) (4,699) 473
(97,890) (25,515) 20,540 1,276 (101,589) 216,534
486,192 922 487,114
Differences on exchange Impairment charges End of the year
Goodwill and intangible assets with indefinite useful lives have been assigned to the Groups cash-generating units (CGUs) based on the country concerned and the business segment. Set out below is a summary by CGU (or CGU group) of goodwill assignment:
CGU
2010 154,578 24,510 54,735 12,284 231,166 9,841 487,114
2009 154,578 24,510 54,735 11,362 231,166 9,841 486,192
Property, plant and equipment include at 31 December 2010 vehicles, machinery and other assets totaling 3,184 thousand euro (2009: 4,922 thousand euro) being acquired under finance leases, as analyzed below:
39,963 thousand euro (2009: 30,092 thousand euro) and accumulated depreciation of 17,637 thousand euro (2009: 13,418 thousand euro). At 31 December 2010 property, plant and equipment with an original cost of 44,055 thousand euro (2009: 46,265 thousand euro) and accumulated depreciation of 284 thousand euro (2009: 197 thousand euro) were not used in operations. Most of these buildings were acquired as payment in kind. In 2010 and 2009 no impairment charges were reflected in relation to these assets. The income statement includes rental costs of 100,241 thousand euro (2009: 112,704 thousand euro), relating to rented property, plant and equipment. During 2010, a land has been impaired by 1,800 thousand euro based on its market value (2009: 0 thousand euro). The consolidated Group has taken out a number of insurance policies to cover risks relating to property, plant and equipment. The coverage provided by these policies is considered to be sufficient.
Construction Engineering Mxico Engineering Brazil Engineering Argentina and other Engineering Spain and other Renewable energies Total
2010 Capitalized finance lease cost Accumulated depreciation Carrying amount 8,782 (5,598) 3,184
2009 9,149 (4,227) 4,922
Bank borrowings are secured by land and buildings valued at 68,765 thousand euro (2009: 71,384 thousand euro). The balance of secured debt amounts to 37,841 thousand euro (2009: 39,476 thousand euro). At 31 December 2010, the Group has property, plant and equipment located abroad for a total cost of
Except in the case of Renewable energies, whose cash flows are estimated for the useful life of the entire project, the recoverable amount of CGUs is determined through value-in-use calculations based on the projected cash flows before taxes stated in financial budgets approved by management for a five-year period. Cash flows for the period following the five-year period are extrapolated using the estimated residual growth rates explained below. The growth rate does not exceed the average long-term growth rate for the CGUs businesses. Flows are discounted using a rate based on the weighted average cost of capital for each CGU.
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The most relevant key assumptions employed to calculate value-in-use are set out below:
7.2. Other intangible assets A breakdown of movements for 2010 and 2009 is as follows:
Discount rate 2010 10.30% 13.00% 14.00% 18.00% 10.50% 12.00% 2009 10.00% 13.40% 14.50% 18.00% 10.50% 12.00% Cost 1 January Additions Disposals Transfers 31 December 11,116 (5,239) 52,407 11,116 38,039 19,607 18,364 5,936 (1,329) (213) 22,758 67,519 25,543 (1,329) (5,452) 86,281 2010 Contract portfolio Administrative Concessions Computer software Total
Operating result (*) CGU Construction Engineering Mxico Engineering Brazil Engineering Argentina and other Engineering Spain and other Renewable energies 2010 76,453 5,682 7,669 11,564 122,550 (5,886) 2009 95,156 6,797 12,507 10,421 82,936 12,087
Residual growth rate 2010 1% 2% 2% 2% 1.7% (**) 2009 1.7% 2% 2% 2% 1.7% (**)
(*) Results included in operating result column refer to the forecast for the following year. The Group generally estimates forecasts for 5 years based on their business plan. (**) Not applicable.
Accumulated depreciation 1 January Amortization (2,223) (2,223) (4,446) 6,670 (225) (3,543) 48,864 (2,152) (1,166) (8,935) (4,031) 1,168 15 (11,783) 10,975 (13,310) (7,420) 1,168 (210) (19,772) 66,509
These assumptions have been used to analyze each CGU in the business segment. Group management considers that changes to assumptions that could cause a CGUs carrying amount to exceed its recoverable amount are not reasonably possible. Management calculated the budgeted gross margin based on past performance and market expectations. Weighted average growth rates are in line with the forecasts contained in industry reports. Discount rates are before taxes and reflect specific risks related to the relevant business segments. In 2010 and 2009, no impairment losses were identified.
Disposals Transfers 31 December Net book value
2009 Cost 1 January Additions Disposals Transfers 31 December
Contract portfolio
Administrative Concessions
Computer software
Total
11,116 11,116 -
49,283 16,671
13,895 6,507 (2,038)
74,294 23,178 (2,038) (27,915)
(27,915) 38,039
18,364
67,519
Accumulated depreciation 1 January Amortization Disposals Transfers 31 December Net book value (2,223) 8,893 (2,223) 2,430 (2,152) 35,887 (1,986) (2,596) (7,371) (2,463) 912 (13) (8,935) 9,429 (9,357) (7,282) 912 2,417 (13,310) 54,209
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At 31 December 2010, projects under this caption mainly correspond to the following concessions: - Concession obtained in 2009 for the construction and maintenance of seven 421-kilometer transmission lines and five new substations in Texas (United States) performed through the joint venture Wind Energy Transmission Texas L.L.C. included in Appendix III. Concession period is unlimited. At 31 December 2010, works are at an initial development stage and the expected investment amounts to 464 million euro, approximately. - Car park concessions totally located in Spain that at 31 December 2010 had not yet received financing assigned to projects. - Other concessions for public and environmental services rendering. At the year end these concessions have not yet received of financing assigned to projects; once they are assigned financing, they will be considered as intangible assets assigned to projects or receivables, as appropriate. In addition, during 2010 the following concessions received of financing and were transferred to intangible assets assigned to projects: - Concession obtained in 2009 for 19 years to the extension, improvement, operation and maintenance of a 133-kilometer toll road in India (Surat-Hazira) through the joint venture Soma Isolux Surat Hazira Tollway PVT, Ltd., included in Appendix III. Concession period is up to 2028. At 31 December 2009, the works were at an initial development stage and expected investment amounted to 404 million euro, approximately.
- Concession obtained in 2009 for 18 years to the extension, improvement, operation and maintenance of a 94-kilometer toll road in India (Kishangarh-Aimer Beawar Highway) through the joint venture Soma Isolux Kishangarh-Ajmer-Beawar Tollway PVT, Ltd., included in Appendix III. Concession period is up to 2027. At 31 December 2009, the works were at an initial development stage and expected investment amounted to 201 million euro, approximately. - Concession obtained in 2009 for 25 years to the extension, improvement, operation and maintenance of 681-kilometer toll roads in Brazil through the subsidiary Viabahia Concessionaria de Rodovias, S.A., included in Appendix I. Concession period is up to 2035. At 31 December 2009, implementation of toll systems have begun and expected investment amounted to 710 million euro, approximately. Administrative concessions include costs related to the construction and/or operation of various assets (car parks, water treatment and waste management plants, and other concessions) for which the Group has obtained the concession to operate the assets for a certain period. At the end of the concession period, the asset will entirely revert to the granting authority. The Group will depreciate capitalized asset over the concession term. The item Computer software reflects the ownership and right of use of computer software acquired from third parties. The balance of computer software does not include amounts related to software developed inhouse. Bank borrowings are secured by other intangible assets valued at 11,577 thousand euro (2009: 3,132 thousand euro). The balance of secured debt amounts to 5,072 thousand euro (2009: 1,230 thousand euro).
Non-current assets assigned to projects

The consolidation scope includes shareholdings in companies incorporated to engage in a single project. The project companies are usually financed by means of project finance (Project finance). The basis of the agreement between the company and the bank is the assignment of cash flows generated by the project to service the debt and interest (including an exclusion or quantified allowance for all other assets), in such a way that investment payback for the bank will take place solely through the project cash flows. Additional guarantees could be settled in some cases during construction phase. Any other borrowings are subordinated to the Project finance until it is fully repaid. These are financing arrangements which are applied to specific business projects. Companies engaged in energy installation projects, bio-fuel plants and certain toll roads have other shareholders. In the case of certain toll road and car park concessions, the Group is the only concession holder.
8.1. Intangible assets assigned to projects In view of the projects` characteristics a large part of the non-current assets assigned to projects are recognized in Intangible assets Concessions (see accounting treatment in Notes 2.5, 2.6 and 2.21). This headline includes 615,629 thousand euro (2009: 395,962 thousand euro) relating to non-current assets in progress.
2010 Cost 1 January Additions Translation differences effects Disposals Transfers 31 December 1,449,248 355,506 130,893 (480,407) 4,799 1,460,039
2009
680,248 596,117 149,153 23,730 1,449,248
Accumulated amortization 1 January Amortization Translation differences effects Disposals Transfers 31 December Net book value (55,576) (39,505) (2,871) 37,395 1,440 (59,117) 1,400,922 (20,384) (25,018) (7,757) (2,417) (55,576) 1,393,672
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At 31 December 2010, the Group has intangible assets assigned to projects abroad with a total carrying amount of 1,168,226 thousand euro (2009: 1,226,935 thousand euro).
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During 2010, 52,075 thousand euro have been capitalized (2009: 39,747 thousand euro), relating to interest accrued during the construction of non-current assets arising on direct financing received to build the assets. The projects included in this caption relate basically to the following concessions: Concessions for electricity transmission lines in Brazil for 3,929 km and an approximated investment of 1,617 million euro for periods of approximately 30 years, through joint ventures at 33.3% and 50% included in Appendix III, as well as through two subsidiaries at 100%, included in Appendix I. At 31 December 2010, the Group has 7 concessions, 4 of which are being operated, and other 3 are under construction or newly allocated, (At 31 December 2009, the Group had 15 concessions, 11 of which were in operation, and other 4 were under construction or newly allocated). At December 2010, the Group sold the shareholding held at 31 December 2009 over 8 concessions for electricity transmission lines (see note 24). Car park concessions (mainly off-street car park concessions) in Spain for periods of up to 50 years, through subsidiaries and joint ventures included in Appendix I and III. At 31 December 2010, a part of the concessions are being operated, while the rest of them are under construction. Up to 16,044 car parks (2009: 19,041) were managed during 2010 and expected investment amounts to 317 million euro. Up to 2015, 22,103 car parks are expected to be managed. Two toll road concessions in Mexico, through the subsidiary Concesionaria Autopista MonterreySaltillo, S.A.C.V. and Autopista Perote-Xalapa, S.A.C.V. At 31 December 2009, these concessions are in the following situation: Concesionaria Autopista Monterrey-Saltillo S.A.C.V.: Concession for the construction, operation and maintenance achieved in 2006 to 2036 for 95 km, with a total estimated investment of 226 million euro. The concession partially entered in operation during previous year, expanding those sections in operation during 2010. At the yea end, approximately 78% of the concession is at operation. Concesionaria Autopista Perote-Xapala, S.A.C.V.: Concession for the construction, operation and maintenance achieved in 2008 to 2038 for 59.9 km, with a total estimated investment of 453 million euro approximately. Operating is forecasted along 2011. Concession obtained in 2007 for improvement, expansion and maintenance of a 68-kilometer toll road (Autova A-4) through Concesionaria Autova A-4 Madrid, S.A., included in Appendix I. Period of concession is until 2026. At 31 December 2010 practically the whole concession is operating. Estimated investments amounts to 82 million euro, approximately.
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nipat-Jalandar) through the subsidiary SomaIsolux NH One Tollway Private Limited, included in Appendix I. Concession period is up to 2023. Construction works regarding extension and improvement of the existing path (operation and maintenance activities are carried on since the concession implementation) began in 2009 and the expected investment amounted to 739 million euro, approximately. During 2010 there have been cash outflows totaling 167,869 thousand euro, which had been capitalized in the previous year. During 2009, concession rights which had not generated cash flows in the year were capitalized in the amount of 182,705 thousand euro. Concession obtained in 2009 for 19 years to the extension, improvement, operation and maintenance of a 133-kilometer toll road in India (Surat-Hazira) through the joint venture Soma Isolux Surat Hazira Tollway PVT, Ltd., included in Appendix III. Concession period is up to 2028. At 31 December 2009, the works were at an initial development phase and expected investment amounted to 404 million euro, approximately. Operation is expected by 2012. During 2010 this concession has been allocated financing, so it has been reclassified to intangible assets assigned to projects. Concession obtained in 2009 for 18 years to the extension, improvement, operation and maintenance of a 94-kilometer toll road in India (Kishangarh-Aimer Beawar Highway) through the joint venture Soma Isolux Kishangarh-AjmerBeawar Tollway PVT, Ltd., included in Appendix III. Concession period is up to 2027. Construction works have begun during 2010 and expected investment amounts to 201 million euro. Operation is expected by 2012. During 2010 this concession has been allocated financing, so it has been reclassified to intangible assets assigned to projects. Concession obtained in 2009 for 25 years to the extension, improvement, operation and maintenance of 681-kilometer toll roads in Brazil through the subsidiary Viabahia Concessionaria de Rodovias, S.A., included in Appendix I. Concession period is up to 2035. At 31 December 2010 it is in operation and implementation works concerning toll systems have been performed simultaneously. Expected investment amounts to 710 million euro, approximately. During 2010 this concession has been allocated financing, so it has been reclassified to intangible assets assigned to projects. Control of most concession assets reverts to the granting body at the end of the concession period although there is usually an option to renew concessions at the time they expire.
8.2. Other non-current assets assigned to projects There are other non-current assets assigned to projects, whose detail is presented below:
2010 Cost 1 January Additions Translation differences effects Disposals Transfers 31 December 287,787 3,229 2,189 (19,840) 313 273,678
2009
275,120 13,270 (25,422) 24,819 287,787
Accumulated depreciation 1 January Amortizations Translation differences effects Disposals Transfers 31 December Net book value (9,239) (11,511) (45) 16 (698) (21,477) 252,201 (720) (7,243) (1,276) (9,239) 278,548
No interest relating to non-current assets under construction was capitalized during the construction phase neither in 2010 nor 2009, except for non-current assets coming from company Infinita Renovables, where financial expenditures are capitalized for 4,268 thousand euro in 2009 (2010: 0 thousand euro). At 31 December 2010, 214,929 thousand euro (2009: 223,232 thousand euro) belonging to two bio-fuel plants (Located in Ferrol and Castelln) and managed through Infinita Renovables are recognized under this caption.
Concession obtained in 2008 for 15 years to the extension, improvement, operation and maintenance of a 291 kilometer toll road in India (Pa-
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Operations in these plants took place during 2009. 2009 disposals are mainly related to the sale of Parque Elico Cova da Serpe (located in Orense, Galicia), by transferring all shares of the company concessionaire. This caption records assets allocated to projects abroad at a net book value amounting to 10,453 thousand euro (2009: 28,874 thousand euro).
Investments in associates
Set out below is an analysis of investments in associates showing movements: Transfers recorded in 2010 relate to investment transfer in Grupo T-Solar Global, S.A. (see note 10). Although investment in this company at 31 December 2010 amounts to 19.80%, it has been considered as an associate due to the existence of several factors indicating the Groups significant influence (options on receivables capitalization (see note 12), the Groups executives acting as directors in Grupo T-Solar Global, S.A., agreements with other shareholders to companys shares acquisition, and the Groups intention to gain control over the company). All transactions carried out after year end in order for the Group to gain control over Grupo T-Solar Global, S.A. are detailed in note 38. The operations and issues mentioned above have been taken into account by the Group to analyze the potential existence of impairment losses in the investment. Additions during 2009 mainly correspond to the shareholding increase in Pinares del Sur, S.L., through the assumption of 13,000 new shares concerning share capital increase approved by General Shareholders Meeting on 28 April 2009, in the amount of 781 thousand euro and with a share premium of 5,740 thousand euro. Impairment recorded during 2009 relates to the investment in Pinares del Sur, S.L. This impairment was due to the impairment undergone by the Companys real estate promotions market value. The Groups interests in its principal associates, all of which are unlisted, are analyzed below:
8.3. Project finance The repayment schedule for project finance is set out below, based on project cash flow forecasts and as stipulated in the relevant contracts:
31/12/2010 Opening balance Additions 2010 Current Maturities per year 222,480 2012 49,546 2013 51,142 Non-current 2014 72,247 Subsequent 839,595 Subtotal 1,012,530 Total 1,235,010 Disposals Transfers Impairment of investments Profit/(loss) of equity companies Profit/(loss) of equity companies Responsibility provision Subsequent 665,041 Subtotal 828,335 Total 970,070 128,875 (7,072) 134 57,059 31/12/2009 57,837 10,965 (4,714) (7,298) 269
2009 Current Maturities per year 141,735 2011 40,152 2012
Non-current 2013 66,916
Closing balance
178,996
57,059
56,226
At 31 December 2010 there are debts totaling 835,482 thousand euro (2009: 595,924 thousand euro) denominated in foreign currencies (mainly Brazilian real, Indian Rupees and Mexican pesos). Project finance is often guaranteed by a pledge on the project companys shares granted by its shareholders, the assignment of debt claims or restrictions on the disposal of project assets. Nevertheless, additional guarantees may be granted during the construction phase and until the implementation of the project. All financing is referenced to market rates and rates are contractually reviewed after periods which do not generally exceed six months. The fair values of current and non-current financing therefore approximate their carrying amounts.
2010 Name Alqlunia 5, S.L. Pinares del Sur, S.L. Las Cabezadas Aranjuez, S.L. Lanscape Corsan , S.L. Country of incorporation Spain Spain Spain Spain Assets 20,016 39,786 54,259 275 Liabilities 22,204 33,993 57,110 52 Revenue 89 5,564 541 2 Results (2,704) (541) (1,164) (2) % Interest 50.00% 50.00% 40.00% 50.00%
2009 Name Alqlunia 5, S.L. Pinares del Sur, S.L. Las Cabezadas Aranjuez, S.L. 214 Lanscape Corsan , S.L. Country of incorporation Spain Spain Spain Spain Assets 22,173 38,780 55,656 277 Liabilities 21,656 44,033 57,343 52 Revenue 146 595 801 12 Results (520) (2,150) (1,569) (105) % Interest 50.00% 50.00% 40.00% 50.00% 215
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The Groups interests in its principal associates, all of which are unlisted, are analyzed below
10
Liabilities 420,612 1,120,418 307 9,965 Revenue 11,821 115,285 Results (5,636) (116,753) % Interest 25.50% 19.80% 33.33% 23.75% Opening balance Additions
Financial Investments
Set out below is an analysis of financial investments assets showing movements:
2010 143,006 1,294 (55) (128,875) (3,858) 11,512 (11,512) 2009 101,946 76,163 (34,858) (245) 143,006 (143,006) -
2010 Name Autopista Madrid-Toledo, S.A. Grupo T-Solar Global, S.A. Gestin de Participes de Biorreciclajes, S.L. Proyectos Inmobiliarios Residenciales, S.L. 2009 Name Autopista Madrid-Toledo, S.A. Gestin de Participes de Biorreciclajes, S.L. Proyectos Inmobiliarios Residenciales, S.L. Country of incorporation Spain Spain Spain Assets 527,890 283 7,122 Liabilities 444,430 307 9,965 Revenue 4,793 Results (18,649) % Interest 25.50% 33.33% 23.75% Country of incorporation Spain Spain Spain Spain Assets 498,396 1,281,982 283 7,122
Disposals Transfers Impairment losses (Note 27) Closing balance Less non-current portion Current portion
In order to measure its shareholdings, the Group has adjusted the above-mentioned figures in accordance with the accounting policies described in Note 2.
For measurement purposes, financial investments are classified as available-for-sale financial assets (See Note 2.9). Transfers during 2010 correspond to the transfer of investment in Grupo T-Solar Global, S.A. (See note 9). Additions in 2009 are mainly due to contributions made to Grupo T-Solar Global S.A., in the amount of 72,580 thousand euro and disposals concerning the allocation of freely available for distribution reserve through Grupo T-Solar Global, S.A. share-based payment dated at 21 December 2009 and amounting to 34,857 thousand euro (See Note 17). At 31 December 2009 the shareholding in this company amounted to 19.80%. The rest of the available-for-sale financial assets relate entirely to minority interest investments in unlisted companies in which the Group does not have significant influence. As these are residual investments in companies the size of which is immaterial within the Group, and given the impossibility of applying measurement methods to the investments, they are presented at acquisition cost, net of impairment disclosed in the financial information of the respective companies. This caption does not include investments in debt instruments. Available-for-sale financial assets are all denominated in euro. Maximum exposure to credit risk at the reporting date is the carrying amount of the assets classified as available for sale. Financial instrument balances under this caption are classified in Group 3 for the purpose of information sources used to determine its fair value in compliance with IFRS 7 (See Note 2.9).
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Derivative financial instruments

Derivative financial instruments are analyzed below at 31 December 2010 and 2009:
Main currency forward contracts characteristics at 31 December 2010 are shown below:
Project name or associate Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera 2010 Assets Interest rate swaps-cash flow Hedges Interest rate swaps-held for Trading Currency forward contracts-cash flow Hedges Currency forward contracts- held for Trading Total Less non-current portion: Interest rate swaps cash flow Hedges Interest rate swaps held for Trading Currency forward contracts cash flow hedges Currency forward contracts held for Trading 4,287 Current portion 4,709 3,789 498 (47,646) (12,559) (47,337) (309) 2,589 86 2,675 1,634 (20,562) (6,200) (20,301) (261) 3,789 2,803 2,404 8,996 Liabilities (47,337) (12,631) (236) (60,204) Assets 2,589 141 1,579 4,309 2009 Liabilities (23,020) (1,809) (1,825) (108) (26,762) Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera/Tecna Forward Isolux Ingeniera/Tecna Forward Isolux Mxico Forward Isolux Mxico Forward Isolux Ingeniera/Tecna Forward Isolux Ingeniera/Tecna
Transaction Purchase Sale Purchase Sale Sale Purchase Sale Purchase Sale Purchase Sale Purchase Sale
Currency (**) CHF QAR USD USD MXN USD USD USD USD USD USD USD USD
Final maturity 11/01/2011 17/02/2011 31/08/2012 30/09/2011 19/01/2011 29/04/2011 18/01/2011 30/03/2012 30/04/2012 12/01/2011 14/01/2011 10/01/2011 18/01/2011
Notional value (*) 309 (113,597) 71,347 (72,072) (9,837) 41,625 (12,421) 12,380 (53,385) 13,235 (9,498) 7,307 (6,016)
(*) Effective at 31 December 2010 (**) USD: US Dollar; QAR: Qatari Real; CHF: Swiss Franc; MXN: Mexican Peso
Main currency forward contracts characteristics at 31 December 2009 are shown below: Derivatives held for trading are carried as current assets or liabilities. The total fair value of a hedging derivative is classified as a non-current asset or liability if the period to maturity of the hedged item is more than 12 months and as a current asset or liability if the period to maturity of the hedged item is less than 12 months. The ineffective net portion of cash flow and fair value hedges recognized as revenue in the income statement totals 601 thousand euro (2009: 2,661 thousand euro) (see Note 27). The maximum credit risk exposure at the reporting date is the fair value of the derivative financial instruments carried in the balance sheet. Financial instrument balances under this caption are classified in Group 2 for the purpose of information sources used to determine its fair value in compliance with IFRS 7 (See Note 2.9). Foreign currency forward contracts The notional principal of currency forward sale contracts, relating mainly to the sale of US dollars and purchase of euro and Mexican pesos (net of US dollars purchased against euro and Mexican pesos sold) outstanding at 31 December 2009 was 7,498 thousand USD (2008: 45,345 thousand USD). It is expected that high likely future transactions hedged, denominated in foreign currency, take place on different dates, mainly within the next 12 months. Profit and loss recognized in the hedging reserve in equity with respect to foreign currency forwards at 31 December 2010 are recognized in the period or periods during which the hedged transaction affects the income statement. This normally takes place within 12 months of the balance sheet date unless the gain or loss had been included in the initial purchase value of fixed assets, in which case such recognition occurs during assets life (between five and ten years).
Currency (**) USD USD USD USD USD USD MXN QAR CHF USD USD Notional value (*) (6,016) 16,866 (136,554) 118,136 (12,630) 1,126 (23,103) (165,375) 2,239 (33,744) 156
Project name or associate Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Ingeniera Forward Isolux Mxico Forward Isolux Mxico
Transaction Sale Purchase Sale Purchase Purchase Sale Sale Sale Purchase Sale Purchase
Final maturity 30/07/2010 30/08/2010 30/03/2012 30/04/2012 29/01/2010 12/01/2010 19/11/2010 07/02/2011 04/03/2010 12/01/2011 20/01/2010
(*) Effective at 31 December 2009 (**) USD: US Dollar; QAR: Qatari Real; CHF: Swiss Franc; MXN: Mexican peso 218 219
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Although all the contracts in force at 31 December 2010 and 2009 were obtained for hedging purposes, due to the Groups contracting and designation criteria applicable at the contract dates, some of the contracts did not qualify for hedge accounting under IFRS-EU. Gross incomes and expenditures recorded in the hedging reserve (net of tax effect and external partners) resulting from cash flow hedge at 31 December 2010 amount to 9,645 thousand euro (2009: 2,568) thousand euro) and will be transferred to the income statement on an ongoing basis until the contract is settled. These derivatives` settlement generated a loss of 135 thousand euro (2009: 601 thousand euro).
Interest rate swaps The notional principal of interest rate swaps outstanding at 31 December 2010 amounted to 1,352.370 thousand euro (2009: 1,093,879 thousand euro). At 31 December 2010, fixed interest rates ranged between 1.80% and 4.82% (2009: 2.44% and 5.05%). The variable interest rate is the EURIBOR. In the case of the derivative linked to the TIIE rate (variable rate used for two projects in Mexico), the contracted fixed interest rate is 8.20% (2009: 8.20%). At 31 December 2010, gains and losses recognized in the hedging reserve in equity (net of tax effects and external partners) with respect to interest rates swaps amounts to 26,671 thousand euro (2009: 11,095 thousand euro) and will be taken to the income statement on a continuous basis until bank borrowings are repaid. These derivatives settlements generated a loss of 21,815 thousand euro (2009: 14,139 thousand euro).
Set out below is an analysis of the main interest rate swaps in force at 31 December 2009:
Name
Contract date
Final maturity
Notional value
Fixed interest rate (paid) 2.89% 4.36% 2.47% 2.44% 2.66% 4.36% 4.79% 4.12% 8.20% 8.20% 5.05%
Variable interest rate (charged) Euribor Euribor Euribor Euribor Euribor Euribor Euribor Euribor TIIE (*) TIIE (*) Euribor
Grupo Isolux Corsn Grupo Isolux Corsn Grupo Isolux Corsn Grupo Isolux Corsn Grupo Isolux Corsn Bank loan HIXAM Bank loan Sociedad Concesionaria Zona 8-A
19/07/2007 03/10/2008 24/02/2009 23/06/2009 11/09/2009 07/02/2007 26/07/2007 30/04/2007 30/05/2007 13/02/2008 01/08/2008
28/02/2010 26/03/2010 24/02/2010 23/06/2012 03/06/2012 29/12/2022 25/02/2024 31/12/2012 30/05/2025 14/01/2022 15/06/2025
200,000 thousand euro 305,000 thousand euro 20,000 thousand euro 30,000 thousand euro 50,000 thousand euro 65,302 thousand euro 8,807 thousand euro 131,634 thousand euro 2,330,080 thousand mexican peso 2,226,085 thousand mexican peso 21,611 thousand euro
Set out below is an analysis of the main interest rate swaps in force at 31 December 2010:
Bank loan Infinita Renovables Bank loan Concesionaria Saltillo Monterrey Bank loan Concesionaria Autopista Perote-Xalapa Bank loan Sociedad Concesionaria Autova A-4
Name
Contract date
Final maturity
Notional value
Fixed interest rate (paid) 2.66% 2.44% 2.47% 1.80% 2.03% 1.97% 3.79% 4.36% 8.20% 4.45% 8.20% 3.00% 4.82%
Variable interest rate (charged) Euribor Euribor Euribor Euribor Euribor Euribor Euribor Euribor TIIE (*) Euribor TIIE (*) Euribor Euribor
(*) Mexican long-term reference interest rate
Grupo Isolux Corsn Grupo Isolux Corsn Grupo Isolux Corsn Grupo Isolux Corsn Grupo Isolux Corsn Bank loan IC Concesiones Bank loan Infinita Renovables Bank loan Hixam Bank loan Concesionaria Saltillo Monterrey Bank loan Sociedad Concesionara Autova A-4 Bank loan Concesionaria Perote-Xalapa Bank loan HIXAM II Bank loan Sociedad Concesionaria Zona 8-A
11/09/2009 23/06/2009 24/02/2009 22/06/2009 10/09/2010 28/04/2010 30/04/2007 07/02/2007 30/05/2007 01/08/2008 13/02/2008 13/01/2010 26/07/2007
03/06/2012 23/06/2012 24/02/2012 18/06/2013 29/06/2015 03/06/2013 30/12/2016 29/12/2022 30/05/2025 15/06/2025 14/01/2022 23/12/2025 25/02/2024
50,000 thousand euro 20,000 thousand euro 20,000 thousand euro 85,000 thousand euro 532,000 thousand euro 50,000 thousand euro 181,800 thousand euro 63,273 thousand euro 2,330,080 thousand mexican peso 58,165 thousand euro 1,900,000 thousand mexican peso 30,466 thousand euro 7,607 thousand euro
During January 2010, the interest rate swap related to Infinita Renovables, S.A. loan, has been renegotiated. This new contract matures at 30 December 2016, the notional hedged amount totals 181,800 thousand euro and pays a guaranteed interest rate of 3.79%, twice a year. Those derivatives hedging 200 and 305 million loans have been substituted by the derivative hedging a notional of 532 million relating the Forward Start Facility financing, referred to in note 19.1.
(*) Mexican long-term reference interest rate
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Trade and other receivables

Set out below is an analysis of trade and other receivables:
Movements in the provision for impairment of trade receivables are as follows:
2010 Opening balance Appropriations Applications 31/12/2010 Non-current Loans to associates Trade receivables for sales and services Other receivables 24,385 39,466 5,242 69,093 Current Trade receivables for sales and services Trade receivables-Work completed pending certification Less: Provision for impairment of receivables Trade receivables Net Trade receivables from associates Loans to associates Sundry debtors Public entities In advance-payments to suppliers Other receivables 826,336 592,212 (15,178) 1,403,370 21,492 55,258 102,601 160,777 144,360 54,017 1,941,875 822,523 402,015 (10,645) 1,213,893 4,222 1,910 146,272 130,140 119,936 39,062 1,655,435 739,732 429,394 (25,310) 1,143,816 13,961 112,901 154,894 38,402 25,470 1,489,444 US dollar Qatar riyal Brazilian real Moroccan dirham Argentinean peso Mexican peso Algerian dinar Other currencies 2010 87,691 9,747 4,820 948 72,761 877 5,093 1,499 183,436 19,635 41,238 2,484 63,357 580 21,226 5,966 27,772 31/12/2009 01/01/2009 Reversals Transfers Closing balance 10,645 15,692 (6,288) (4,871) 15,178
2009 25,310 3,732 (18,397) 10,645
The remaining accounts included in receivables contain no assets that are impaired. The maximum exposure to credit risk at the reporting date is the fair value of each category of receivables referred to above. It is not Group policy to contract insurance for receivables hedging. The balance of trade receivables for sales and services includes the following amounts denominated in currencies other than the euro:
2009 72,782 6,970 39,495 7,066 41,970 4,690 6,583 3,409 182,965
There is no significant effect on the fair values of trade and other receivables due to its recognition at amortized cost, since nominal values are deemed to approximate fair values. At 31 December 2009 Sundry debtors includes a loan granted at 30 November 2009 to the related company Grupo T-Solar Global, S.A. amounting to 50,888 thousand euro, which must be repaid by 30 May 2010 and 30 November 2010. This loan accrues interest at 6-month Euribor plus an annual spread of 2.5%. In the event of a monetary contributions to borrowers share capital, it will be required to pay the loan. At any time the Group had the option to capitalize the debt by offsetting the debt held by Grupo T-Solar Global, S.A. against the Group. During 2010 the loan has been extended under the conditions mentioned before, being the new maturity date on 30 November 2011. At 31 December 2010 this operation is recorded under the caption Loans to associates.
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At 31 December 2010, the sum of 405,780 thousand euro (2009: 188,812 thousand euro) has been deducted, relating to German method contract loans and other invoices assigned to third parties prior to maturity. These assets have been written off the balance sheet since it is considered that they meet the requirements stipulated in IAS 39 regarding de-recognition of financial assets. At 31 December 2010 Trade receivables for sales and services caption includes bills discounted at banks for a total of 59,233 thousand euro (2009: 50,013 thousand euro). The Group recognized a loss of 15,692 thousand euro (2009: 3,732 thousand euro) due to the impairment of trade receivables during the fiscal year ended 31 December 2010.
Costs incurred and gains recognized (less recognized losses) on all contracts in force at the balance sheet date amounted to 5,292,735 thousand euro (2009: 8,319,547 thousand euro) and 403,358 thousand euro (2009: 798,707 thousand euro), respectively.
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Inventories
14
At 31 December 2010 there are no commitments to sell property developments in progress (2009: 4,970 thousand euro). In this respect, the Group has received advance payments amounting to 33 thousand euro (2009: 1,239 thousand euro) which are reflected on the liabilities side of the consolidated balance sheet in the item Advanced receivables. During 2010, capitalized interest amounted to 362 thousand euro (2009: 1,039 thousand euro), relating to interest accrued during the construction of properties and arising on direct financing received to build the properties. The increase in inventories during 2010 is mainly due to the increase in real estate properties received as credit collections. The amount received for credit collections in 2010 totals 14,613 thousand euro. At 31 December 2010 property development guarantying funding received amounts 36,798 thousand euro (2009: 45,736 thousand euro). During 2010, an impairment amounting 3,840 thousand euro (2009: 0 thousand euro) on real estate has been recorded based on the income statement.
A breakdown of inventories is set out in the following table:
Cash and cash equivalents and Financial assets at fair value through profit or loss
14.1. Cash and cash equivalents Set out below is a breakdown of cash and cash equivalents:
31/12/2010 31/12/2009 316,295 104,483 420,778 01/01/2009 193,617 93,852 287,469 Short -term bank deposits and others 31/12/2010 2,300 2,300 31/12/2009 504 504
31/12/2010 Property developments in progress Raw materials and finished products Capitalized project costs 229,931 113,499 84,430 427,860
31/12/2009 199,666 101,705 56,413 357,784
01/01/2009 186,222 95,501 51,802 333,525
14.2. Financial assets at fair value through profit or loss Set out below is a breakdown of financial assets at fair value through profit or loss:
Cash at bank and in hand Short-term bank deposits and other
427,880 509,675 937,555
Set out below is a breakdown of property developments in progress by cycle:
31/12/2010 Property developments in progress, short cycle Property developments in progress, long cycle 65,745 164,186 229,931
31/12/2009 39,168 160,498 199,666
01/01/2009 48,038 138,184 186,222
This caption includes cash (cash in hand and demand deposits in banks) and cash equivalents (i.e., shortterm highly liquid investments easily convertible into specific cash amounts within a maximum of three months, or with any restriction and availability penalty if higher, and whose value is not subject to significant change risks). Of the total figure for cash and cash equivalents, temporary joint ventures contributed 179,368 thousand euro (2009: 184,348 thousand euro) and joint ventures contributed 33,395 thousand euro (2009: 51,659 thousand euro). Cash and cash equivalents include balances in currencies other than euro totaling 612,134 thousand euro (2009: 177,819 thousand euro). For the purposes of the cash flow statement, the treasury balance includes the balance in the caption cash and cash equivalents. During 2009 the concession gained for the toll road in India through the subsidiary Soma-Isolux NH Tollway Private Ltd., was partially capitalized. An amount of 182,705 thousand euro related to this capitalization, did not affect cash flows. That is the reason why changes related to this operation not affecting cash flows have not been considered in 2009 cash flow statement. At 2010 year end, 12,920 thousand euro (2009: 23,640 thousand euro) are recognized under Cash in hand and banks, whose availability is restricted to the requirements of the loan received as funding for Hixam II project.
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Share capital, share premium and legal reserve

a) Share capital The parent companys share capital consists of 87,316,199 ordinary bearer shares (2009: 87,316,199 shares) with a par value of 0.20 euro each (2009: 0.20 euro). The shares are fully paid up in a total amount of 17,463 thousand euro (2009: 17,463 thousand euro). There are no restrictions on the transfer of the shares. The following companies hold interests in the parent companys share capital:
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Cumulative translation differences

A breakdown by company/subgroup of cumulative translation differences is set out below:
Company or subgroup Isolux de Mxico S.A. de CV Grupo Isolux Energa y Participaciones Ltda. Isolux Proyectos, Ltda. Powertec Proyectos, Ltda. Isowat Mozambique, S.A. Isolux Brasil Sociedade Anonima 2010 2009 % interest 53.67% 12.11% 6.11% 15.61% 10.00% 2.50% 100.00% No. of shares 46,864,562 10,573,339 5,334,367 13,629,406 8,731,620 2,182,905 87,316,199 % interest 53.67% 12.11% 6.11% 15.61% 10.00% 2.50% 100.00% Isolux Corsan Polonia, Sp Zoo Concesionaria Autopista Saltillo-Monterrey, S.A. de C.V. Grupo Tecna
2010 (545) 26,345 1,156 761 1,452 (813) (214) 3,701 (3,676) (10) 601 6,613 5,983 1,036 1,063 (57) 183 (437) (525) 3,099 478 (6,645) (1,430) 38,119
2009 (2,929) 26,347 239 199 1,519 94 (227) (4,366) (5,793) 25 (6,506) (651) (978) (106) 884 563 2,455 (277) 10,492
No. of shares Construction Investment Sarl Caja Castilla La Mancha Corporacin, S.A. Grupo Corporativo Empresarial de la Caja de Ahorros y Monte de Piedad de Navarra, S.A.U. Corporacin Empresarial Cajasol, S.A.U. Cartera Perseidas, S.L. Charanne B.V. Total 46,864,562 10,573,339 5,334,367 13,629,406 8,731,620 2,182,905 87,316,199
Lneas Mesopotmicas Argentinas, S.A. Concesionaria Autopista Perote-Xalapa, S.A. Azul de Cortes, S.A. De C.V. Soma-Isolux NH One Tollway Pvt Ltda. Soma-Isolux Surat Hazira Tollway Pvt Ltd. Soma-Isolux Kishangarh - Ajmer - Beawar Tollway Pvt. Ltd. Isolux Corsn Argentina, S.A. Agua Limpia Paulista, S.A.
b) Share premium account This reserve is unrestricted and stands at 469,163 thousand euro (2009: 469,763 thousand euro). c) Legal reserve Appropriations to the legal reserve are made in compliance with Article 274 of the Capital Companies Act, which stipulates that 10% of the profits for each year must be transferred to this reserve until it represents at least 20% of share capital. At 31 December 2009 and 2010 this reserve amounts to 3,493 thousand euro and is fully incorporated.
The legal reserve is not available for distribution. Should it be used to offset losses in the event of no other reserves being available, it must be replenished out of future profits. In addition, this reserve includes the reserve resulting from the application in the parent company of Article 273.4 of the Spanish Companies Act 2010: In any event, a restricted reserve equivalent to the goodwill appearing on the asset side of the balance sheet must be allocated and a portion of profits representing at least 5% of that goodwill must be allocated to this reserve. If there were no profits or profits were insufficient, freely available reserves should be used. This reserve amounts to 4,714 thousand euro (2009: 2,357 thousand euro) at 31 December 2010.
Isolux Corsan India PVT ICI & soma Enterprise Viabaha Concessionaria de Rodovias, S.A. Corsn Corvian Construccin, S.A. - Sucursales Isolux Ingenieria, S.A.- Sucursales Otras Total
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Retained earnings and minority interest

The proposal for the distribution of the parent companys 2010 results that will be submitted to the Annual General Meeting and the approved (on 28 June 2010) 2009 distribution are set out below:
2010 2009 Grupo Tecna
Movements in minority interests during 2009 are set out below:
Opening balance 6,093 350 300 12,773 302 1,685 21,503
Share of profit/ losses 3,348 301 (50) (10,341) 1,853 165 (4,724)
Dividends (617) (300) (917)
Change in shareholding and others (1,132) (339) 3 146 5,208 (24) 32,879 (146) 36,595
Closing balance 7,692 12 (47) 300 146 5,208 2,408 35,034 1,704 52,457
Interisolux Torrejn Viv. Joven, S.L. Julitex, S.L. Interisolux Alcorcn Viv. Joven, S.L. Agua Limpia Paulista, S.A.
Available for distribution Profit for the year 52,096 38,114
Viabaha Concessionaria de Rodovas, S.A. Grupo Infinita Renovables
Distribution Voluntary reserves Reserve for unavailable goodwill (Spanish Companies Act 2010, article 273.4) Dividends Total 19,739 2,357 30,000 52,096 11,757 2,357 24,000 38,114
Soma-Isolux NH One Tollway Pvt. Ltda. Sociedad Concesionaria Auto. A4, S.A. Total
At 21 December 2009 the General Shareholders Meeting approved the share premium and the allocation of unrestriced reserves in the amount of 34,857 thousand euro through the contribution of Grupo T-Solar Global, S.A. shares in favor of Groups shareholders (see Note 10). Movements in minority interests during 2010 are set out below:
Opening balance Grupo Tecna Interisolux Torrejn Viv. Joven, S.L. Julitex, S.L. Interisolux Alcorcn Viv. Joven, S.L. Agua Limpia Paulista, S.A. Viabaha Concessionaria de Rodovas, S.A. Grupo Infinita Renovables Soma-Isolux NH One Tollway Pvt. Ltda. 228 Sociedad Concesionaria Auto. A4, S.A. Total 7,692 12 (47) 300 146 5,208 2,408 35,034 1,704 52,457
Share of profit/ losses 2,023 (50) (79) 204 (3,892) 3,500 (901) 805
Dividends (617) (617)
Change in shareholding and others 727 173 15,471 2,011 4,451 (750) 22,080
Closing balance 9,825 12 (97) 300 240 20,883 527 42,985 53 74,728 229
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Trade and other payables

Set out below is a breakdown of trade and other payables at 31 December 2010, 31 December 2009 and 1 January 2009:
31/12/2010 Non-current Deferred income-Goverment grants Other payables Total Current Trade payables Bills payables Interim Billings Advances received on contracted work Social security and other taxes Other payables Total 1,136,644 715,197 238,929 210,272 160,714 97,415 2,559,171 883,665 728,873 218,851 163,060 136,961 60,468 2,191,878 655,296 735,794 180,342 128,180 110,384 65,647 1,875,643 10,136 30,892 41,028 10,504 208,908 219,412 1,417 53,409 54,826 31/12/2009 01/01/2009
19
Borrowings
31/12/2010 Non-current Property development Other mortgage loans Syndicated loan Credit lines Other borrowings Finance lease liabilities 16,905 58,180 532,928 127,592 140,350 1,609 877,564 Current Advanced credit debts Syndicated loan Mortgage loans Credit lines Finance lease liabilities Other loans 73,750 3,420 7,786 268,271 1,246 18,331 372,804 Total borrowings 1,250,368
31/12/2009
01/01/2009
11,869 52,527 457,121 30,228 136,485 2,831 691,061
23,677 45,229 502,890 20,360 107,195 4,339 703,690
31,942 50,995 1,248 119,853 1,899 10,957 216,894 907,955
2,147 116,109 1,843 24,040 144,139 847,829
At 31 December 2009, other non-current payables include costs to be incurred in the amount of 14,836 thousand euro (2009: 182,705 thousand euro) related to the intangible asset recognized in 2009 for the toll road administrative concession in India (Panipat-Jarandar). Regarding non-current position, deferred income mainly corresponds to grants received for the acquisition of fixed assets assigned to projects. Nominal values are deemed to approximate fair values.
Information regarding delays in payments to suppliers in compliance with Law 15/2010 (5 July). In accordance with Law 15/2010 (5 July), a maximum of 60 days is established as the period for making payment of outstanding amounts to suppliers and creditors. For this purpose, a temporary payment schedule finishing on 1 January 2013 is defined. In compliance with second additional provision of the above Law, from the date of its entry into force until 31 december 2011, the payment period will be 120 days. In compliance with Law 15/2010 which amended the law establishing measures to combat late payment, the Group is analyzing the standard contracts with its suppliers in those cases in which the new law is applicable and, bearing in mind that the payment management system that the Group uses, in general, is for payment to be confirmed through financial institutions by virtue of the contracts concluded with the latter, at 31 December 2010 and considering the total balance outstanding to suppliers in Spain at said date, there are no significant amounts, in said balance, with an accumulated deferral exceeding the legally established payment period.
Borrowings relating to property developments and finance lease liabilities are secured by the financed assets. Other mortgage loans are secured by the non-current assets stated in Note 6. Virtually all borrowings bear interest at Euribor rates and contracted rates are reviewed after periods which do not generally exceed six months. The fair values of current and non-current borrowings therefore approximate their carrying amounts.
Credit lines are generally classified as short-term since its maturity is used to be on an annual basis. Nevertheless, these lines reflect tacit renewal clauses. At 31 December 2010 and 2009, non-current borrowings mature as indicated below:
2010 Item Between 1 and 5 years 970 16,202 532,928 122,160 116,700 1,609 668,936 More than 5 years 15,935 41,978 5,432 23,650 208,628 Total Between 1 and 5 years 3,769 20,642 457,121 30,228 120,574 2,831 635,165
2009 More than 5 years 8,100 31,885 15,911 55,896 Total
Property development Other mortgage loans Syndicated loan Credit lines Other borrowings
16,905 58,180 532,928 127,592 140,350 1,609 877,564
11,869 52,527 457,121 30,228 136,485 2,831 691,061 231
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Finance lease liabilities are discounted to their present value. Future financial charges on finance leases total 110 thousand euro (2009: 114 thousand euro).
Moreover, the loan must comply with the usual ratios required for this kind of operations. At 31 December 2010 Management understands no covenant under this agreement has been breached. Maturities per year for such loans are shown below:
19.1. Syndicated loans On 14 February 2007, the Group concluded an agreement to obtain a credit line of 200,000 thousand euro. At 31 December 2010 the balance outstanding is 162,547 thousand euro (2009: 201,335 thousand euro). The credit line bears interest at the Euribor plus a spread of 0.60% per annum, in periods of 1, 3 or 6 months. At 13 November 2009 the above-mentioned credit was renewed and subscribed by most of the financial institutions at 31 December 2009 (Nominal: 165,000 thousand euro). By means of this renewal, the syndicated entities revoke the early repayment clause fixed at 14 February 2010 and an interest rate of Euribor plus a spread of 2.5% per annum is established as from the renewal date. Therefore, the new maturity date is 14 February 2012 (subject to an early repayment clause on 14 February 2011). On 26 March 2008, the Group entered into an agreement for a credit line amounting to 305,000 thousand euro, the main aim of which is the funding of the Groups operations. At the year end date, the balance pending payment amounts to 209,310 thousand euro (2009: 306,781 thousand euro). This facility bears interest at Euribor plus 0.90% a year in periods of 1, 3 or 6 months. At 13 November 2009 the above-mentioned credit was renewed and suscribed by most of the financial institutions by 31 December 2009 (Nominal: 295,000 thousand euro). By this renewal, the syndicated entities revoke the early repaiment clause fixed at 26 March 2010 and an interest rate of Euribor plus a spread of 2.5% per annum is established as from the renewal date. Therefore, the new maturity date is 26 March 2012 (subject to an early repayment clause on 26 March 2011). On 29 June 2010, the Group has arranged a long-term syndicated loan under Forward Start Facility mode which writes off the above mentioned agreements, as well as other credit lines and loans amounting to 72,000 thousand euro. The initial granted amount under this operation is 532,000 thousand euro (which may be increased to 700,000 thousand euro through other financial institutions joining) and is structured in Section A (345,800 thousand euro) and Section B (revolving credit by 186,200 thousand euro, for the Groups general treasury financing needs). At 31 December 2010 the syndicated loan has been increased to 552,000 thousand euro (352,300 thousand euro in Section A and 189,700 thousand euro in Section B), therefore the consolidated loans at that date amount to 452,857 thousand euro. Disposed balances accrue interest of Euribor plus a variable spread between 2.25% and 3% depending on certain ratios.
amounts to 22,640 thousand euro (2009: 0 thousand euro). Repayment is through ten equal amounts to be paid twice a year as from June 2012. The loan must comply with the usual ratios required for this kind of operations. At 31 December 2009 Management understands no covenant under this agreement has been breached.
Maturity date 29/12/2012 29/06/2013 29/12/2013 29/06/2014 29/12/2014 29/06/2015 Total
Amount (thousand euro) 11,051 44,168 55,183 66,215 99,368 276,015 552,000
19.3. Credit lines Credit lines are generally classified as short-term as they are usually arranged on an annual basis. Nevertheless, these lines reflect tacit renewal clauses. When the term is longer than a year, they are classified as non-current.
19.4. Other information The carrying amount of the Groups borrowings is denominated in the following currencies:
On 17 June 2010, the Group arranged a 85,000 thousand euro credit line with Natixis, ICO and KBC, structured in Section A (70,000 thousand euro to infrastructure concession project finance in India) and Section B (15,000 thousand euro to Groups project finance). At 31 December 2010 the outstanding payment amounts to 83,491 thousand euro. The loan accrues interest of Euribor plus a 3% annual spread and cancelation is through a single payment on 17 June 2015 (with potential advanced amortization on 17 June 2013 and 17 June 2015 in the event of agreement between financial entities and the Group). Additionally, as usual for this kind of operation, the loan is subject to certain ratios compliance. At 31 December 2010 Management understands no covenant under this agreement has been breached.
2010 Non-current Euro Other currencies 845,605 31,959 877,564 Current Euro Other currencies 274,040 98,764 372,804 Total borrowings 1,250,368
2009
690,488 573 691,061 199,289 17,605 216,894 907,955
19.2. Other borrowings The following debts are included under this caption: At 2 June 2008, the Company entered into an agreement for a credit line amounting to 100,000 thousand euro with Instituto de Crdito Oficial (ICO), the main aim of which is the funding of the infrastructure concession operations in Mexico carried out by the Group. At the year end, the balance pending payment amounts to 100,245 thousand euro (2009: 100,527 thousand euro). This facility bears interest at Euribor plus 3 % a year, in periods of 1, 3 or 6 months at the borrowers request. The loan must comply with the usual ratios required for this kind of operations. At 31 December 2009 Management understands no covenant under this agreement has been breached. At 16 December 2009, the Company entered into an agreement for a seven-year loan amounting to 25,000 thousand euros with Compaa Espaola de Financiacin del Desarrollo, S.A. (Cofides), the main aim of which is the funding of an infrastructure project in India. This facility bears interest at Euribor plus 3.55% a year. At the year end the balance pending payment
The Group has the following unused credit lines:
2010 Variable rate: - Maturing in less than one year - Maturing in more than one year 143,825 86,741 230,566
2009
236,750 24,255 261,005
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Deferred income tax
Deferred tax assets At 1 January 2009 Charged to income statement Charged to equity At 31 December 2009 Charged to income statement Charged to equity Deferred tax assets 2010 2009 41,537 21,727 (1,520) 61,744 Deferred tax liabilities 2010 55,035 10,128 1,589 66,752 2009 54,183 1,151 (299) 55,035 Fair value reserves in equity: Reserve for hedging transactions At 31 December 2010
Reversals
Appropriations
Other movements (5,336) 12,475 -
Total 41,537
(4,932) (3,875) (26,213) -
31,991 2,355 57,591 10,289
21,723 (1,520) 61,744 43,853 10,289 115,886
The gross movement in deferred income tax is shown below:
1 January Charge to income statement (Note 28) Tax charged to equity 31 December
61,744 43,853 10,289 115,886
Deferred tax assets / (liabilities) charged to equity during the year are as follows:
2010 2009
8,700 8,700
(1,221) (1,221)
Deferred tax assets at each year end are as follow:

2010 Tax losses Tax credits pending application Temporary differences 39,037 35,302 41,547 115,886 2009 22,040 27,549 12,155 61,744 Deferred tax assets Arising from provisions Arising from non-current assets Arising from financial derivatives measurement
Deferred tax assets and liabilities arising from temporary differences are analyzed below:
2010
2009
10,413 13,650 17,484 41,547 (9,465) (2,838) (20,180) (8,175) (19,250) (6,844) (66,752)
2,460 3,105 6,590 12,155 (9,465) (747) (7,359) (8,014) (19,250) (10,200) (55,035)
Movements during 2010 and 2009 in deferred tax assets and liabilities are as follows:
Total Deferred tax liabilities Arising from measurement of inventories Other movements (1,515) 5,068 Arising from measurement of derivative financial instruments Arising from non-current assets Arising in trade and other receivables Arising in available- for- sale financial assets Arising from other items Total
Deferred tax liabilities At 1 January 2009 Charged to income statement Charged to equity At 31 December 2009 Charged to income statement Charged to equity At 31 December 2010
Reversals
Appropriations
Total 54,183
(8,423) (775) (15,024) -
11,089 476 20,084 1,589
1,151 (299) 55,035 10,128 1,589 66,752
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The Group records deferred tax assets relating to tax loss carryforwards at 31 December 2010 as follows:
21
Total 2,767 54 2,390 16,883 16,997 39,037 -
Provisions for other liabilities and charges

21.1. Provisions for other liabilities and charges Non-current
Provisions for project completion Balance at 1 January 2008 13,952 14,346 (10,192) 18,106 4,155 (9,758) 12,503 (4,000) 34,664 31,777 6,887 Provisions for litigation and other 20,031 11,746
Country Generation year 2007 2008 2009 2010 Spain 2,767 2,255 12,516 13,971 2,486 Argentina 81 Mexico
4,367 540
Total 33,983 26,361 (10,192) 49,883 11,042 (13,758) 47,167
These tax credits must be applied over a 15, 5 and 10year period since its recognition in Spain, Argentina and Mexico, respectively. Deferred tax assets with respect to tax credits pending application and tax losses are recognized insofar as the realization of the relevant tax benefit through future taxable profits is likely. The Group has recognized all its tax credits and tax losses on the basis of estimated future taxable profits.
Appropriations Reversals Applications Balance at 31 December 2009 Appropriations Reversals Applications Balance at 31 December 2010
Provisions for project completion The balance in this account relates to projects that are completed or substantially completed and consists of the Groups estimate of probable costs to be incurred prior to final acceptance by the customer. Additional customer claims not subject to objective quantification at consolidated anual accounts preparation date could arise, although Management understands no significant loss over provisioned amounts will arise. Provisions for litigation and other This balance relates to provisions set up to cover other liabilities and charges related or not related to litigation, including tax or other contingencies for which the Group considered a provision should be posted. In the opinion of the directors and legal counsel, the lawsuits in question are not likely to generate significant losses above the amounts provisioned.
21.2. Provisions for other liabilities and charges Current The balances included in this item, totaling 52,099 thousand euro (2009: 34,969 thousand euro), relate to the Construction Division and the Engineering Division and mainly consist of provisions for project completion costs and other items. Change in trade provisions in the income statement registers net allocations made to provisions for other liabilities and current expenses.
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Revenue / Sales
Sales information by activity and market is included in Note 5.
25
Employee benefit expenses

2010 Wages and salaries Social Security contributions 304,022 75,248 379,270 2009 289,194 66,465 355,659
23
Materials consumed and other external costs

The account Materials consumed and other external costs during 2010 and 2009 is analyzed below:
Wages and salaries during 2010 include indemnities amounting 11,376 thousand euro (2009: 7,050 thousand euro). The Groups average workforce is analyzed below:
2010 Category Graduates Administrative staff Workers 2,647 794 4,199 7,640 2009 2,220 530 5,139 7,889
2010 Raw materials and other supplies Difference between opening and closing inventories, excluding real estate Other external costs Total 921,782 (39,811) 982,124 1,864,095
2009 1,004,321 (10,815) 778,163 1,771,669
Additionally, the average number of persons employed during 2010 by the proportionately-consolidated companies has been 1,374 (2009: 882). At 31 December 2010, personnel distribution by gender is as follows:
Men Category Board Directors 13 7 137 1,742 327 3,286 5,512 1 17 480 249 206 953 13 8 154 2,222 576 3,492 6,465 Senior managers Managers Graduates Administrative staff Workers Women Total
24
Other income and expense

Other operating income and expense are analyzed below: During 2010 other operating expense includes net losses from the sale of non-current assets totaling 812 thousand euro. No results for this item were recognized during 2009. On December 2010 the Group has carried on joint ventures sale regarding 8 electric line transmission concessions in Brazil (see note 8.1). This operation has implied a net cash inflow of 256,535 thousand euro, a net operating profit of 26,562 thousand euro and a conversion difference revenue amounting to 33,026 thousand euro not generating cash inflows.
2010 Other operating revenue Operating grants Other operating revenue Total Other operating expense Operating leases Other external services Impairment of net receivables 238 Taxes Total 100,241 524,141 (1,596) 62,437 685,223 1,187 43,808 44,995
2009
1,012 55,032 56,044 112,704 451,220 12,497 59,114 635,535
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At 31 December 2009, by personnel distribution by gender is as follows:

Men Category Board Directors Senior managers Managers Graduates Administrative staff Workers 12 10 103 1,699 251 4,620 6,695 8 411 237 284 940 12 10 111 2,110 488 4,904 7,635 Women Total
27
Net financial results

2010 Interest expense Net gains/ (losses) on foreign currency transactions Net gains/ (losses) on derivative financial instruments at fair value Impairment of available-for-sale investments (Note 10) Other financial expense Financial expense Interest income and other financial income Reversal impairment of available-for-sale investments (Note 10) Net gains/(losses) on foreign currency transactions Net gains/ (losses) on derivative financial instruments at fair value Other financial income Financial income (139,158) (3,858) (28,727) (171,743) 13,398 28,921 601 13,102 56,022 (115,721) 2009 (118,231) 2,661 (245) (18,812) (139,949) 17,354 3,657 13,322 34,333 (105,616)
26
Operating leases
Future minimum lease installments under non-cancellable operating leases are analyzed below:
2010 Less than 1 year Between 1 and 5 years More than 5 years Total 11,166 18,271 10,488 39,925 2009 13,525 18,488 12,453 44,466
Net financial expense/ loss
Profits from foreign currency transactions in 2010 include 33,026 thousand euro relating to a joint ventures sale of 8 electric transmission line concessions in Brazil (see note 24).
The expense recognized in the income statement during 2010 in relation to operating leases totals 100,241 thousand euro (2009: 112,704 thousand euro). The Group leases the building in which its headquarters are located from a third party. The lease agreement has a 12-year term as from lease inception (15 March 2007), although the Group may exercise a purchase option as from year five, in which case the parties must previously agree on the terms of the transaction. Since at lease inception and at the preparation date of these consolidated annual accounts, the purchase option is not likely to be exercised the operation has been classified as an operating lease. All payments due throughout the original 12-year term are included in the above table.
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Income tax
Grupo Isolux Corsn, S.A. is the parent company of Fiscal Group 102/01 and is therefore authorized to present consolidated tax declarations in Spain for all companies included in Fiscal Group. Income tax expense is composed of:
The effective tax rate in 2010 has been 24.67% (2009: 15.49%). This rate differs from the rate applicable to the parent company (30% in 2009 and 2010) mainly due to the net effect of non-deductible expenses, which increase the effective tax rate, and deductions generated, which reduce the effective tax rate, as well as different tax rates abroad that may be higher or lower than the rate applicable in Spain and therefore increase or reduce the effective tax rate. On 1 July 2010, inspection activities on Income Tax for the period 2005-2008 were initiated in Grupo Isolux Corsn, S.A., as the parent company of the tax group. Likewise, several group companies are subject to a general inspection of Value Added Tax (2006-2008), Income Tax (2006-2008), Annual Statement of Operations (2005-2008) and Intra-Community Business Operations Statement (2005-2008). From the actions that the tax authorities could adopt in relation to the inspected years, a tax liability could result which cannot be objectively quantified. However, the management of the parent company estimate that the resulting liability of that potential revision could mean significant losses higher than the provisioned amounts. The following taxes and years are open to inspection:
2010 2009 66,476 19,943 2,596 1,436 (16,611) 2,932 10,296 Income tax Corporate income tax Value added tax Personal income tax Other taxes Fiscal years 2009 a 2010 2009 a 2010 2009 a 2010 last 4 years
2010 Current income tax Deferred tax (Note 20) Total Income Tax Expense 54,674 (33,725) 20,949
2009 30,888 (20,572) 10,296
The Groups income tax differs from the theoretical amount that would have been obtained if the tax rate applicable to the consolidated companies profits had been used as follows:
Profit before taxes Tax calculated at the rate applicable to the parent companys profits Effect on tax payable of non-tax deductible expenses Effect of different tax rates abroad and other differences in foreign operations Deductions generated during the year Other Tax expense
84,909 25,472 2,453 2,440 (3,437) (5,979) 20,949
Set out below is a breakdown of deductions generated in each year:
As a result, among other things, of the different interpretations to which Spanish tax legislation lends itself, additional liabilities may be raised in the event of a tax inspection. The directors of the parent company consider, however, that any additional liability that might be raised would not significantly affect these consolidated annual accounts.
2010 Deductions for export activities Profits reinvested Total 3,437 3,437
2009 15,142 1,469 16,611
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Earnings per share

Basic and diluted Basic earnings per share are calculated by dividing the profit attributable to the Companys equity holders by the weighted average number of outstanding ordinary shares for the year. Diluted earnings per share are calculated by adjusting the weighted average number of outstanding ordinary shares to reflect the conversion of all potentially dilutive ordinary shares. As the Company has no potentially dilutive ordinary shares, diluted earnings per share are the same as basic earnings per share.
2010 Profit attributable to the Companys equity holders (Thousand euro) Weighted average number of outstanding ordinary shares Basic earnings per share (euro per share) 63,155 87,316,199 0,72 2009 60,904 87,316,199 0,70
32
Commitments
Non-current assets purchase commitments No significant commitments have been made to purchase non-current assets at the balance sheet date, other than those required in the ordinary course of business.
Operating lease commitments The Group leases a number of premises, offices and other property, plant and equipment under non-cancellable operating leases. These leases contain variable terms, phase-related clauses and renewal rights. The lease expenditure charged to the income statement during the year and information on future minimum installments is set out in Note 26.
33
Related-party transactions
Transactions with related parties during 2010 and 2009 form part of the Groups ordinary course of business. These transactions are described below: a. Transactions with the Companys principal shareholders
30
Dividends per share

Dividends paid out (or proposed) in relation to profits for 2010 and 2009 amount to 30,000 thousand euro and 24,000 thousand euro (see Note 17), respectively, entailing a dividend per share of 0.34 euro and 0.27 euro, respectively. If in 2009 we take into account agreed dividends against reserves amounting 34,857 thousand euro (see Note 17), total dividends will amount to 58,847 thousand euro in 2009, which entails a dividend per share of 0.67 euro in 2009.
a.1. Transactions with Caja Castilla La Mancha Group The Group effects transactions with Caja Castilla La Mancha Group solely in connection with its banking activities. Transactions completed at 31 December 2010 and 2009 are presented below by nature:
2010
2009 Disposed 6,023 15,000 40,400 1,403 18,330 8,486 Granted 15,500 15,000 40,400 6,000 19,072 8,227 Disposed 15,473 15,000 40,400 1,561 19,072 8,227
31
Contingencies and guarantees provided

The Group has contingent liabilities in respect of bank guarantees and other guarantees provided in the ordinary course of business from which no significant liability is expected to arise in addition to the items provisioned as indicated in Note 21. In the ordinary course of business, as is common practice in companies engaged in engineering and construction activities, the Group furnished guarantees to third parties totaling 1,250 thousand euro (2009: 1,369 million euro) for the proper performance of contracts. In accordance with its general terms of engagement, the Group is required to provide technical guarantees in connection with the execution of projects. These guarantees may be provided in cash or in the form of bank guarantees and must remain in effect for a specified period. Additionally, the group has provided financial guarantees to related parties as mentioned in note 33.
Granted Credit lines Long-term syndicated loans Project finance Guarantees granted Mortgage loans Other loans 6,500 15,000 40,400 2,000 18,330 8,486
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During 2010 the interest rate swap to hedge future Euribor fluctuations by a notional value of 33,333 thousand euro has expired (2009: 33,333 thousand euro). The Group also has numerous current accounts necessary to carry on its ordinary business and manages a part of its cash resources by contracting financial assets through Caja Castilla La Mancha Group. The income statement for each period includes costs and revenue related to the above-mentioned operations, which reflect market conditions. a.2. Transactions with Corporacin Caja Navarra Group The Group effects transactions with Corporacin Caja Navarra Group solely in connection with its banking activities. Transactions completed at 31 December 2010 and 2009 are presented below by nature:
2010 Granted Credit lines Long-term syndicated loans Guarantees granted Other borrowings 15,000 20,000 10,000 2,000 Disposed 14,958 20,000 8,367 2,000 Granted 15,000 20,000 10,000 2,000 2009 Disposed 3,526 20,000 7,284 2,000
a.3. Transactions with Corporacin Empresarial Cajasol S.A.U The Group effects transactions with Corporacin Empresarial Cajasol, S.A.U. solely in connection with its banking activities. Transactions completed at 31 December 2010 and 2009 are presented below by nature:
2010 Granted Credit lines 15,000 Disposed 14,964 Granted
2009 Disposed 14,985
15,000
During 2010 the interest rate swap to hedge future Euribor fluctuations by a notional value of 33,333 thousand euro has expired (2009: 33,333 thousand euro). The Group also has several current accounts necessary to carry on its ordinary business and manages a part of its cash resources by contracting financial assets through Corporacin Empresarial Cajasol S.A.U. The income statement for each period includes costs and revenue related to the above-mentioned operations, which reflect market conditions. a.4. Transactions with Charanne B.V. a.5. Transactions with Vista B.V. The Group has carried out the following transactions with Vista B.V. in 2009 and 2010: On 7 February 2008, the Group granted a loan to the company BV Vista for a total of 4,700 thousand euro, with a one year maturity, which earns an interest rate of Euribor plus a spread of 1%. This loan has been renewed for an additional year and transferred to Charanne B.V. during 2009. On 4 December 2008, the Group acquired the 100% of the shares that Vista BV had of the Company Azul de Cortes, BV for an amount of 44,218 thousand euro (see Note 13). The balance outstanding as at 31 December 2008 in connection with this transaction amounted to 31,516 thousand euro. During 2009 the debt with this Company has been transferred to Charanne B.V.
During 2010 the interest rate swap to hedge future Euribor fluctuations by a notional value of 33,333 thousand euro has expired (2009: 33,333 thousand euro). On 31 December 2009 the Group had an export credit facility line with a 25,000 thousand limit. The utilized amount totaled 18,450 thousand euro. At 31 December 2010 the limit is 5,000 thousand euro, the amount utilized being 3,282 thousand euro. The Group also has several current accounts necessary to carry on its ordinary business and manages a part of its cash resources by contracting financial assets through Corporacin Caja Navarra Group. The income statement for each period includes costs and revenue related to the above-mentioned operations, which reflect market conditions.
The Group has carried out the following transactions with Charanne B.V. shareholder during 2009 and 2010: On 7 February 2008, the Company granted a loan to B.V. Vista for a total of 4,700 thousand euro, with a one year maturity and bearing an interest rate of Euribor plus a spread of 1%. This loan has been renewed for an additional year and transferred to Charanne B.V. during 2009. A renewal for an additional year has taken place in 2010. On 4 December 2008, the Group acquired the 100% of the shares that Vista B.V had of the Company Azul de Cortes, B.V. During 2009 the Company has transferred this debt to Charanne B.V.The balance outstanding debt at 31 December 2009 in connection with this transaction amounted to 11,076 thousand euro (22,152 thousand euro at 31 December 2009).
The transactions mentioned above were carried out under market conditions.
The transactions mentioned above were carried out under market conditions.
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b. Transactions with the Companys Board directors and management b.1. Information required by articles 229 to 231 of Capital Company Act Parent companys directors have nothing to report pursuant to Articles 229 to 231 of Capital Company Act, approved by Royal Decree 1/2010 of 2 July, except for the following offices and functions held and performed, and shareholdings owned: Mr. Luis Delso Heras is a Board director of Ghesa, Ingeniera y Tecnologa, S.A., Cable Submarino de Canarias, S.A., Corsn-Corviam Construccin, S.A. , Isolux Ingeniera, S.A. (Chairman) , Isolux Wat Ingeniera, S.L. (Chairman) , Isolux Corsn Concesiones, S.A. (Chairman), Isolux Corsn Inmobiliaria, S.A. (Chairman), Infinita Renovables, S.A., Grupo Isolux Corsn Concesiones, S.L. (Chairman), Isolux Corsn Concesiones de Infraestructuras, S.L. (Chairman), T-Solar Global, S.A. (Chairman), Grupo T-Solar Global, S.A., and Las Cabezadas Aranjuez, S.L. Mr. Jos Gomis Caete is a Board member of Corsn-Corviam Construccin, S.A. (Vice-Chairman), Isolux Ingeniera, S.A. (ViceChairman), Isolux Wat Ingeniera, S.L. (in his capacity as representative of Construction Investments, S.a.r.l.- Vice-Chairman), Isolux Corsn Inmobiliaria, S.A. (in his capacity as representative of Construction Investments, S.a.r.l.- Vice-Chairman), Isolux Corsn Concesiones, S.A. (in his capacity as representative of Construction Investments, S.a.r.l. ViceChairman); Grupo Isolux Corsn Concesiones, S.L. (Vice-Chairman); Isolux Corsn Concesiones de Infraestructuras, S.L. (Vice-Chairman); Infinita Renovables, S.A. (Chairman); T-Solar Global, S.A.; and Grupo T-Solar Global S.A. (Chairman). Mr. Antonio Portela Alvarez is a Board director of Desarrollo de Concesiones y Servicios, Sercn, S.A.(Chairman) , Infinita Renovables, S.A., T-Solar Global, S.A., Corsn-Corviam Construccin, S.A. (CEO), Isolux Corsn Inmobiliaria, S.A. (CEO), Isolux Corsn Concesiones, S.A. (CEO), Isolux Ingeniera, S.A. (CEO), Grupo Isolux Corsn Concesiones, S.L. (CEO), Isolux Corsn Concesiones de Infraestructuras, S.L. (CEO) and Isolux Corsn Aparcamientos, S.L. (Chairman). Additionally, Mr Antonio Portela Alvarez holds shares in Infinita Renovables, S.A. (indirect interest of less than 10% through other companies) and Aral, Gestin y Organizacin S.L. (33%). Grupo Corporativo Empresarial de la Caja de Ahorros y Monte de Piedad de Navarra, S.A.U. holds shares in the following companies: Acciona Solar, S.A. (25%) (Board of directors member). Mr. Juan Odriz San Martn (in his capacity as representative of Grupo Empresarial de la Caja de Ahorros y Monte de Piedad de Navarra, S.A.U.) is a Board director of Isolux Corsn
Concesiones, S.A. and Isolux Corsn Inmobiliaria, S.A. Moreover, Mr. Eduardo Lpez Milagro, representative of Grupo Corporativo Empresarial de la Caja de Ahorros y Monte de Piedad de Navarra, S.A.U., is Board member of Acciona Solar, S.A. in representation of Grupo Corporativo Empresarial de la Caja de Ahorros y Monte de Piedad de Navarra, S.A.U. Mr. Serafn Gonzlez Morcillo is a Board director of Isolux Wat Ingeniera, S.L., Isolux Corsn Concesiones, S.A. and Isolux Corsn Inmobiliaria, S.A. Mr. Francisco Moure Bourio is a Board director of Sociedad de Promocin y Participacin Empresarial Caja de Madrid, S.A. Aditionally is a Board director of Tcnicas y Proyectos, S.A., Isolux Wat Ingeniera, S.L., Isolux Corsn Inmobiliaria, S.A. and Isolux Corsn Concesiones, S.A. Mr. Juan Jos vila Gonzlez, as representative of Caja Castilla La Mancha Corporacin, S.A., is Board member of Industrializaciones Estratgicas, S.A. (Chairman) and Promociones Inmobiliarias Gaytan IV (Chairman). Additionally is a Board director of Isolux Wat Ingeniera, S.L., Isolux Corsn Inmobiliaria, S.A. and Isolux Corsn Concesiones, S.A. Caja Castilla La Mancha Corporacin, S.A. is Board member of Grupo T-Solar Global, S.A.; El Reino de Don Quijote de la Mancha, S.A.; Obenque, S.A.; Comtal Estruc, S.L; and Las Cabezadas Aranjuez, S.L. Moreover, it has a shareholding in the following companies: CCM Iniciativas Industriales, S.L. and subsidiaries (100%); CCM Inmobiliaria Centrum 2004, S.L. and subsidiaries (99.97%); CCM Inmobiliaria del Sur 2004, S.L. and subsidiaries (99.97%); Comtal Estruct, S.L. (30.77%); Construcciones Sarrin, S.L. (5.26%); DHO Grupo Constructor Corporativo S.L. (10.53%); El Reino de Don Quijote de la Mancha, S.A. (12.80%); Las Cabezadas de Aranjuez S.L. (60%); Planes e Inversiones CLM, S.A. and subsidiaries (100%); Bami Newco, S.A. (1.45%); Midamarta S.L. (1%); Diverga Construcciones, S.L. (4.95%), Obenque S.A. (14.33%); Explotaciones Forestales y Cinegticas Alta-Baja (100%); Hormigones y ridos Aricam, S.L. (25%); and Desarrollo Industrial Aricam, S.L. (4.74%). Monte de Piedad y Caja de Ahorros San Fernando de Huelva, Jerez y Sevilla (Cajasol), holds direct share in Gerens Hill Internacional, S.A. (4.12%) and indirect (0.15%). Mr. ngel Serrano Martnez-Estllez is a Board Director member of Corsn-Corviam Construccin, S.A., Isolux Wat Ingeniera, S.L., Isolux Corsn Inmobiliaria, S.A., Isolux Corsn Concesiones, S.A. and Grupo T-Solar, S.A. Mr. Jos Luis Hernndez Snchez, as representative of Cartera Perseidas, S.L., is a Board Director member of Isolux Corsn Inmobiliaria, S.A. and Isolux Corsn Concesiones, S.A.
Cartera Perseidas, S.L. is Board member of Grupo T-Solar Global, S.A.; Isolux Corsn Inmobiliaria, S.A. and Isolux Corsn Concesiones, S.A. Mr. Javier Gmez-Navarro Navarrete is a Board Director member of Tcnicas Reunidas, S.A., Isolux Corsn Inmobiliaria, S.A. and Isolux Corsn Concesiones, S.A. The inclusion of the above information in the notes to the consolidated annual accounts of Grupo Isolux Corsn, S.A. is the result of a detailed analysis of the information received from all the members of the Board of Directors of Grupo Isolux Corsn, S.A., based on a teleological interpretation of Articles 229-230 of Capital Companies Act.
b.2. Transactions with companies in which the Board directors of Grupo Isolux Corsn, S.A. are also directors or administrators: Transactions and balances with companies in which the Board directors of Grupo Isolux Corsn, S.A. are also directors or administrators are analyzed below:
2010 Ciudad Real Aeropuerto, S.L. Synergy Industry and Technology, S.A.
Debtor balances 15,189 809
Creditor balances -
Costs / Purchases -
Financial income -
Revenue / Sales -
2009 Ciudad Real Aeropuerto, S.L. Synergy Industry and Technology, S.A. Grupo T-Solar Global, S.A.
Debtor balances 15,189 809 98,804
Creditor balances 27,540
Costs / Purchases 23,741
Financial income 87
Revenue / Sales 1,460 48,895
The following should be noted with respect to the transactions with Grupo T-Solar Global, S.A. at 31 December 2009: During 2009 the main commercial transactions between the Group and T-Solar Global, S.A. correspond to solar plates purchased from Grupo T-Solar Global and to revenue from services relating to construction, operation, maintenance and monitoring in photovoltaic solar plants by virtue of construction, operation and maintenance arrangements between both parts. During 2009 the Company granted a loan to the related company Grupo T-Solar Global, S.A. for a total of 50,888 thousand euro. The contract was set up at 30 November 2009, matures at 30 November 2010 and will be paid in two installments, on 30 May 2010 and 30 November 2010. This loan bears interest
at the six-month Euribor rate plus an annual 2.5% spread. In the event of monetary contributions to the borrowers share capital, it will be forced to redeem the loan. At any time the Group has the option to capitalize the debt by offsetting the debt held by Grupo T-Solar Global, S.A. against the Company. Grupo Isolux Corsn has given technical guarantees amounting 26,884 thousand euro to the company. The transactions mentioned above were carried out under market conditions.
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b.3. Remuneration paid to Board directors and management of Grupo Isolux Corsn, S.A.
2009 Autopista Madrid-Toledo Concesionaria, S.A. 2010 2009 5,050 558 5,608 Proyectos Inmobiliarios Residenciales, S.L. Alqlunia 5, S.A. Pinares del Sur, S.L. Las Cabezadas de Aranjuez S.L
Debtor balances 1,097 1,315 395 10,675 13,600
Creditor balances 1 -
Costs / Purchases -
Revenue / Sales 1,097 4,303 -
Wages and salaries (including indemnities) Per diems for attendance at Board meetings
4,678 630 5,308
Additionally, certain Board directors and managers are beneficiaries of the incentive plan described in Note 34.
Regarding transactions with Grupo T-Solar Global, S.A. During 2009 the main commercial transactions between the Group and T-Solar Global, S.A. correspond to solar plates purchase to Grupo T-Solar Global and to revenue from services rendering relating construction, operation, maintenance and monitoring in photovoltaic solar plants by virtue of construction, operation and maintenance arrangements between both parts. During 2009 the Company granted a loan to the related company Grupo T-Solar Global, S.A. for a total of 50,888 thousand euro. The contract was set up at 30 November 2009, matures at 30 November 2010 and will be paid in two times, on 30 May 2010 and 30 November 2010. . This loan bears interest at the six-month Euribor rate plus an annual 2.5% spread. In the event of monetary contributions to the borrowers share capital, it will be forced to redeem
the loan. At any time the Group has the option to capitalize the debt by offsetting the debt held by Grupo T-Solar Global, S.A. against the Company. The maturity date has been extended up to 30 November 2011, under the same terms stated in the previous contract. Grupo Isolux Corsn has given technical guarantees amounting 19,277 thousand euro to the company. Transactions mentioned above were done under market conditions.
b.4. Loans granted to Board of Directors
2010 Opening balance Interest charged Closing balance 5,198 99 5,297
2009 5,099 99 5,198
The loans relate to 2000 and 2002, have no established maturity date and bear interest at the Euribor rate + 0.50%.
c. Transactions with associates Transactions and balances with associates at 31 December 2010 and 2009 are analyzed below:
2010 Autopista Madrid-Toledo Concesionaria, S.A. Proyectos Inmobiliarios Residenciales, S.L. Grupo T-Solar Global, S.A. Alqlunia 5, S.A. Pinares del Sur, S.L. Las Cabezadas de Aranjuez S.L Debtor balances 4,450 1,315 73,816 395 8,874 13,600 Creditor balances 151 Costs / Purchases 161 Revenue / Sales 31,799 1,952
34
Share-based payments
In 2006 a three-year incentive plan was created for the Groups managers and Board directors. In accordance with that plan, incentives will be paid in 2009 by the present shareholders of Grupo Isolux Corsn, S.A. provided certain conditions stipulated in the relevant agreement were fulfilled. In 2006, 2007 and 2008 the Group recorded the corresponding expense against an increase in equity. During 2010, the Company has assumed the payment, recording the impact directly in equity in the amount of 19,266 thousand euro (agreed amount net of tax effect).
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Joint ventures
36
Temporary joint ventures (UTEs)

The Group has interests in the UTEs listed in Appendix IV. The amounts set out below represent the Groups share, based on its interests in the UTEs, of assets, liabilities, revenue and results. These amounts are included in the consolidated balance sheet and income statement:
2010 2009
The Group has interests in the joint ventures listed in Appendix III. The amounts set out below represented the Groups share, based on its interest in the joint ventures, on assets, liabilities, revenue and results of joint ventures consolidated through the proportional method. These amounts are included in the consolidated balance sheet and income statement:
31/12/2010 Assets: Non-current assets Current assets Liabilities: Non-current liabilities Current liabilities Net assets Revenue Expenses Profit after taxes 303,287 183,884 487,171 311,782 359,089 (334,962) 24,127 374,954 247,694 622,648 386,128 285,289 (261,908) 23,381 246,631 137,313 383,944 224,342 589,213 209,740 798,953 861,552 147,224 1,008,776 552,025 56,261 608,286 31/12/2009 01/01/2009
Assets: Non-current assets Current assets Liabilities: Non-current liabilities Current liabilities Net assets Revenue 558 505,828 506,386 (6,439) 919,557 (925,996) (6,439) 465 458,594 459,059 29,295 772,696 (743,401) 29,295 6,708 493,239 499,947 16,681 471,673 488,354
Expenses Profit after taxes
There are no contingent liabilities relating to the Groups interests in joint ventures, or contingent liabilities recognized by the joint ventures themselves.
There are no contingent liabilities relating to the Groups interests in UTEs, or contingent liabilities recognized by the UTEs themselves.
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Environment
Appendix I
Subsidiaries included in the Consolidation Scope
Shareholding Cost (thousand euro) 450,012 13,218 48,678 8,847 9,403 7,198 3,984 3 - 21,659 - - - - - - - - - 250 60 2,692 342 3 3 13,174 9,265 33,263 388 229,243 4,825 197 61,582 11,828 40,794 943 10,167 % par value Consolidation method FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC
The Group has taken the necessary measures to protect and improve the environment and to minimize environmental impact, if applicable, in compliance with current environmental legislation. Consequently, no provision for environmental liabilities and charges has been deemed necessary and there are no contingencies relating to environmental protection and improvement.
Company name Isolux Ingeniera, S.A. GIC Fbricas, S.A. Elaborados Metlicos Emesa S.L. Watsegur, S.A. Isolux Maroc, S.A. Isowat Mozambique, Lda. Isolux Corsn Polonia Sp zoo Luxeol S.L. Isolux Ingeniera USA LLC Tecna Estudios y Proyectos S.A.
Address Madrid Madrid A Corua Madrid Casablanca Maputo Varsovia Madrid Houston Bs. Aires Madrid
Shareholder
Activity Engineering Engineering Engineering Engineering Engineering Engineering Engineering Concessions Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Engineering Concessions Engineering Engineering Engineering Engineering Engineering Engineering Engineering Construction Construction Construction Construction Construction Construction Construction Construction
Auditor PwC PwC PwC PwC PwC Unaudited Unaudited Unaudited Unaudited PwC PwC PwC PwC PwC PwC Other Other Other Other Unaudited Unaudited PwC PwC Unaudited Unaudited PwC PwC Unaudited Unaudited PwC Other Unaudited PwC Unaudited Unaudited PwC Pwc 255
100.00 Grupo Isolux Corsn, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 70.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 50.01 Isolux Ingeniera, S.A. 100.00 Tecna Estudios y Proyectos S.A. 90.00 Tecna Proy. y Operaciones, S.A. 98.95 Tecna Proy. y Operaciones, S.A. 76.92 Tecna Proy. y Operaciones, S.A. 76.90 Tecna Proy. y Operaciones, S.A. 99.00 Tecna Proy. y Operaciones, S.A. 100.00 Tecna Proy. y Operaciones, S.A. 99.00 Tecna Proy. y Operaciones, S.A. 100.00 Tecna Proy. y Operaciones, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 40.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Ingeniera, S.A. 100.00 Isolux Wat Ingeniera, S.L. 100.00 Isolux Corsn Servicios S.A. 100.00 Isolux Wat Ingeniera, S.L. 100.00 Powertec Espaola, S.A. 100.00 Grupo Isolux Corsn, S.A. 100.00 Corsn Corviam Const., S.A. 100.00 Corsn Corviam Const., S.A. 100.00 Corsn Corviam Const., S.A. 100.00 Corsn Corviam Const., S.A. 100.00 Corsn Corviam Const., S.A. 100.00 Corsn Corviam Const., S.A. 100.00 Corsn Corviam Const., S.A.
38
Subsequent events
After 31 December 2010, and in relation to the comments contained in Note 9, contracts have materialised for the purchase of shares in Grupo T-Solar Global, S.A. from other shareholders, increasing the Groups holding in said company to 38.34%. Moreover, the Group has approved at said date, its intention to contribute the relevant funds in relation to a capital increase that was decided on 23 February 2011 by the Shareholders Meeting of Grupo T-Solar Global, S.A., which is being executed. The amount and percentage to be contributed is pending a decision by the rest of the shareholders. Furthermore, a merger has been approved by virtue of which the new Group company
that is set up, Grupo GTS Sociedades Solares S.A., will absorb Grupo T-Solar Global, S.A. On completion of this transaction, the Group will have control over the merged company and Grupo T-Solar Global, S.A. will be a subsidiary of the Group. On 18 March 2011 the Group has signed an agreement with Morgan Stanley Infrastructure Partner (MSIP) American infrastructure fund, by virtue of which the Group joins MSIP as a strategic partner for infrastructure concessions business in India. This agreement enhances the Groups financial position in this kind of business and favors its entry in new related projects.
Tecna Proyectos y Operaciones, S.A. (1) Tecna Bolivia, S.A. (1) Tecna Brasil Ltda. (1) Tecna del Ecuador, S.A. (1) Medianito del Ecuador, S.A. (1) Latintecna, S.A. (1) Tecna Engineering LLC (1) Ven Tecna, S.A. (1) Tecninct Proyectos e Ingeniera S.A. de C.V. (1) Energa de Asturias GIC, S.A. Isolux Elica, S.A Sociedad Concesionaria Zona 8-A, S.A
Sta Cruz de la Sierra Rio Janeiro Quito Quito Lima Houston Caracas Mxico DF Avils Madrid Zaragoza Sao Paulo Madrid Madrid Madrid Madrid Madrid Rio Janeiro Madrid Lisboa Madrid Mxico DF Rio Janeiro Rio Janeiro Bs. Aires Argel
39
Auditors fees
Agua Limpia Paulista, S.A Eolica Isolcor, S.L. Isolux Wat Ingeniera, S.L. Isolux Corsn Servicios S.A. Global Vambru, S.L. Powertec Espaola, S.A. Powertec Proyectos e Obras Ltda. Corsn-Corviam Construccin, S.A. Constructora Pina do Vale, S.A. Extremea de Infraestructura, S.A. Isolux de Mxico, S.A. de C.V. Isolux Corsn do Brasil S.A. Isolux Proyectos e Instalaciones LTDA.
The fees accrued to PricewaterhouseCoopers Auditors, S.L. for audit services rendered during 2010 total 1,013 thousand euro (2009: 851 thousand euro). Fees accrued to PricewaterhouseCoopers Auditores, S.L. for other services rendered during 2010 total 313 thousand euro (2009: 424 thousand euro).
Fees accrued to other companies operating under the PricewaterhouseCoopers brand for other services rendered during 2010 amount to 414 thousand euro (2009: 840 thousand euro). The fees accrued to other auditors for audit services rendered during 2010 total 369 thousand euro (2009: 270 thousand euro).
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Isolux Corsn Argentina S.A. Isolux Corsn Argelie EURL
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Appendix Shareholding Cost (thousand euro) 1,602 3 23 - 95,003 530,496 302,409 1,310 1,292 68,906 52,876 3 - 22,174 7,190 3 - - - 6 6 34,500 4,824 383 - 23 3 3 - - 106,003 4,652 6 6 6 1,651 13,682 21,400 2,040 7,871 500 1,215 % par value Consolidation method FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC Shareholding Cost (thousand euro) 3,571 1,500 682 9,400 10,134 7,850 2,426 6,411 2,247 3 191 150,003 33 118 3 66 1,213 706 108 1,200 94 66,458 - 1,067 4,451 549 53,238 104 10 3,013 47 180 - 73 310 % par value 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 80.00 100.00 100.00 100.00 90.00 80.00 100.00 100.00 100.00 100.00 100.00 96.04 80.70 100.00 100.00 100.00 100.00 100.00 100.00 70.00 100.00 Consolidation method FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC FC
Company name Isolux Corsn India Engineering & Constuction Private LTD. Construcciones e Instalaciones del Noreste S.A. de C.V Isolux Corsn Cyprus Limited Isolux Corsn Panam, S.A. (*) Grupo Isolux Corsn Concesiones, S.L. Isolux Corsn Concesiones, S.A. Isolux Energia e Particip. Ltda. Linhas de Xingu Transmissora de Energa Linhas de Macapa Transmissora de Energa Conc. Aut. Monterrey-Saltillo, S.A.C.V. Soma-Isolux NH One Tollway Private Limited Parque Elico Cova da Serpe II, S.L. Vias Administracin y Logstica, S.A. de C.V. Viabahia Concessionaria de Rodovias, S.A. Iccenlux Corp. Isolux Corsn Concesiones de Mxico, S.A. de C.V. (*) Isolux Corsan Energy Cyprus Limited (*) Isolux Corsan Power Concessions India Private Limited (*) Mainpuri Power Transmission Private Limited (*) AB Alternative Investment, B.V. (*) ICC Sanpiper, B.V. (*) Isolux Corsn Concesiones de Infraestructuras, S.L. (2) Sociedad Concesionaria Autova A-4 Madrid S.A. Isolux Corsan Concessions Cyprus Limited Isolux Corsn Concessions India Privated Limited (*) Isolux Corsan NH1 Cyprus Limited Isolux Corsn Mexicana de Infrestructuras, S.L. (4) Isolux Corsn Brasilea de Infraestructuras, S.L. (*) Isolux Corsn Participaciones de Infraestructura Ltda (*) Isolux Corsn Participaciones en Viabaha Ltda (*) Isolux Corsn Aparcamientos, S.L. Isolux Corsn Aparcamientos Madrid, S.A. Aparcamientos IC Zaragoza Torrero, S.L. Aparcamientos IC Talavera II, S.L. Aparcamientos IC Segovia II, S.L. Explotaciones Las Madrigueras, S.L. Aparcamientos IC Ruiz de Alda S.A. Hixam Gestin de Aparcamientos, S.L. Ceut de Aparcamientos y Serv., S.A. Gestin de Concesiones, S.A. 256 Aparcamientos IC Talavera, S.L. Aparcamientos Segovia, S.L.
Address Haryana Mxico DF Nicosia
Shareholder
Activity Construction Construction Construction Construction Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions
Auditor PwC PwC Unaudited Unaudited PwC PwC Deloitte Unaudited Unaudited PwC Other Unaudited PwC PwC E&Y Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited PwC PwC Unaudited Unaudited Other Unaudited Unaudited Unaudited Unaudited PwC Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited PwC Unaudited Unaudited Unaudited Unaudited
Company name Aparcamientos IC Zaragoza, S.L. Aparcamientos Islas Canarias, S.L. Aparcamientos IC Toledanos, S.L. Hixam Gestin de Aparcamientos II, S.L. Aparcamientos IC Ponzano, S.L. Aparcamientos IC Toledanos II, S.L. Aparcamientos IC Chiclana, S.L. Aparcamientos IC Hospital de Murcia, S.L. Aparcamientos IC Crdoba, S.L. Hixam Gestin de Aparcamientos III, S.L. (*) Desarrollo de Concesiones y Servicios Sercon, S.A. Isolux Corsn Inmobiliaria, S.A. Cost Wright, S.L. Valdelro, S.L. Julitex, S.L. Olmosa, S.L. El Sitio de la Herrera, S.L. Electrnica Control de Motores, S.A. Interisolux Torrejn Vivienda Joven, S.L. Interisolux Alcorcn Vivienda Joven, S.L. Acta, S.A. Azul de Cortes BV Azul de Cortes, S. de R.L, de C.V. (3) Benda, S.A. Corvisa, S.L. EDIFISA, S.A. Infinita Renovables, S.A. Intal. y Montajes La Grela, S.A. Inversiones Blumen, S.L. Powertec Sistemas, S.A. Powertec Catalua, S.A. Unidad Mater. Avanz. Ibrica, S.A. Isolux Corsn Renovables, S.A. (*) Isolux Corsan Arabia Saudi LLC (*) Isolux Corsan Gulf LLC (*)
Address Madrid Las Palmas Madrid Madrid Madrid Madrid Madrid Madrid Madrid Madrid Madrid Madrid Madrid Madrid Las Palmas Madrid Madrid Madrid Madrid Madrid Lisboa Amsterdam La Paz Madrid Madrid Madrid Vigo A Corua Madrid Madrid Madrid Orense Buenos Aires Riad Oran
Shareholder Hixam Gestin de Aparcamientos, S.L. Hixam Gestin de Aparcamientos, S.L. Hixam Gestin de Aparcamientos, S.L. Isolux Corsn Aparcamientos S.L. Hixam Gestin de Aparcamientos II, S.L. Hixam Gestin de Aparcamientos II, S.L. Hixam Gestin de Aparcamientos II, S.L. Hixam Gestin de Aparcamientos II, S.L. Hixam Gestin de Aparcamientos II, S.L. Isolux Corsn Aparcamientos S.L. Grupo Isolux Corsn Concesiones, S.L. Grupo Isolux Corsn, S.A. Isolux Corsn Inmobiliaria, S.A. Isolux Corsn Inmobiliaria, S.A. Grupo Isolux Corsn, S.A. Isolux Corsn Inmobiliaria, S.A. Isolux Corsn Inmobiliaria, S.A. Isolux Corsn Inmobiliaria, S.A. Isolux Corsn Inmobiliaria, S.A. Isolux Corsn Inmobiliaria, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Azul de Cortes BV Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A. Grupo Isolux Corsn, S.A.
Activity Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Real Estate Real Estate Real Estate Real Estate Real Estate Real Estate Real Estate Real Estate Real Estate Engineering Real Estate Real Estate Engineering Engineering Real Estate Engineering Engineering Engineering Engineering Engineering Concessions Engineering Engineering
Auditor Unaudited Unaudited Unaudited PwC Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited PwC Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited PwC PwC Other Unaudited PwC Unaudited PwC Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
100.00 Corsn Corviam Const., S.A. 100.00 Isolux de Mxico, S.A. de C.V. 100.00 Corsn Corviam Const., S.A. 100.00 Corsn Corviam Const., S.A. 100.00 Grupo Isolux Corsn, S.A. 100.00 Grupo Isolux Corsn Concesiones, S.L. 100.00 Isolux Corsn Concesiones, S.A. 100.00 Isolux Energia e Particip. Ltda. 100.00 Isolux Energia e Particip. Ltda. 100.00 Isolux Corsn Concesiones, S.A. 61.00 Isolux Corsn Concesiones, S.A. 100.00 Isolux Corsn Concesiones, S.A. 100.00 Isolux Corsn Concesiones, S.A. 55.00 Isolux Corsn Concesiones, S.A. 100.00 Isolux Corsn Concesiones, S.A. 100.00 Isolux Corsn Concesiones, S.A. 100.00 Isolux Corsn Concesiones, S.A. 100.00 Isolux Corsan Energy Cyprus Limited 100.00 Isolux Corsn Concesiones, S.A. 100.00 AB Alternative Investment, B.V. 100.00 Grupo Isolux Corsn Concesiones, S.L. 48.75 Isolux Corsn Concesiones de Infraestruct., S.L 100.00 Isolux Corsn Concesiones de Infraestruct., S.L 100.00 Isolux Corsan Concessions Cyprus Limited 100.00 Isolux Corsn Concesiones de Infraestruct., S.L 100.00 Isolux Corsn Concesiones de Infraestruct., S.L 100.00 Isolux Corsn Concesiones de Infraestruct., S.L 100.00 Isolux Corsn Concesiones de Infraestruct., S.L 100.00 Isolux Corsn Participaciones de Infraestruct. Ltda. 100.00 Grupo Isolux Corsn Concesiones, S.L. 100.00 Isolux Corsn Aparcamientos S.L. 100.00 Isolux Corsn Aparcamientos S.L. 100.00 Isolux Corsn Aparcamientos S.L. 100.00 Isolux Corsn Aparcamientos S.L. 100.00 Isolux Corsn Aparcamientos S.L. 100.00 Isolux Corsn Aparcamientos S.L. 100.00 Isolux Corsn Aparcamientos S.L. 100.00 Hixam Gestin de Aparcamientos, S.L. 100.00 Hixam Gestin de Aparcamientos, S.L. 100.00 Hixam Gestin de Aparcamientos, S.L. 100.00 Hixam Gestin de Aparcamientos, S.L.
Ciudad de Panam Madrid Madrid Rio Janeiro Rio Janeiro Rio Janeiro Mxico DF Haryana Madrid Mexico DF Sao Paulo Houston Mexico DF Nicosia Haryana Haryana La Haya Amsterdam Madrid Madrid Nicosia Haryana Nicosia Madrid Madrid Sao Paulo Sao Paulo Madrid Madrid Madrid Madrid Madrid Tenerife Madrid Madrid Ceuta La Lnea Madrid Segovia
73.00 Isolux Corsan Power Concessions India Private Ltd FC
Renewable Energies PwC
(*) Companies acquired or incorporated during the year and/or additional investment in companies already included in the consolidation scope in the previous year. The inclusion of these companies in the consolidation scope did not generate additional sales during the year. (1) Cost included in Tecna Estudios y Proyectos, S.A. (2) Change in companys name during 2009 (before-named Aparcamientos IC Arona, S.L.) (3) Change in companys name during 2009 (before-named Juandro Consultores S. de R.L.) (4) Change in companys name during 2010 (before-named Aparcamientos IC Elche, S.L.) FC: Full Consolidation
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Appendix II
Shareholding Cost (thousand euro) 25,274 1,278 20 138,855 % par value 25.50 23.75 33.33 19.80 Consolidation method EC EC EC EC
Appendix III
Shareholding Cost (thousand euro) 15 1 - - 616 22,676 12,131 7,548 28,060 72,971 7,626 7,620 70,573 11,667 11,892 7,182 7,182 502 4,500 3 4 - - 20 - 4 - 6 9 9 6 10,444 32,791 750 % par value Consolidation method PC PC
Company name Autopista Madrid Toledo Concesionaria, S.A. Proyectos Inmobiliarios Residenciales, S.L. Gestin de Partcipes de Bioreciclaje, S.L. Grupo T-Solar Global, S.A.(*)
Address Madrid Madrid Cdiz Madrid
Shareholder Isolux Corsn Concesiones de Infraestruct., S.L Isolux Corsn Inmobiliaria, S.A. Global Vambru, S.L Grupo Isolux Corsn, S.A.
Activity Concessions Real Estate Concessions
Auditor Auren Unaudited Other
Company name Constructora Autopista Perote Xalapa S.A. de C.V. Indra Isolux de Mxico S.A de C.V. Isolux Corsn India & Soma Enterprises Limited ICI Soma JV (*) Carreteras Centrales de Argentina, S.A. (*) Porto Primavera Transmisora Energia S.A. Vila do Conde Transmisora Energia S.A. Cachoeira Paulista T. Energia S.A. Jauru Transmisora de Energa S.A. Integracao Electrica Norte e Nordeste, S.A. Isonor Transmission S.A.C. Per Caravelli Coteruse Transmisora de Energa S.A.C. Concesionaria Autopista Perote Xalapa S.A. de C.V. Soma Isolux Surat Hazira Tollway PVT, LTD Soma Isolux Kishangarh-Ajmer-Beawar Tollway PVT.LTD Wett Holdings LLC Wett - Wind Energy Transmission Texas, LLC. Parking Pio XII, S.L. Emiso Cdiz S.A. Aparcamientos IC Sarrin Aparcamientos Los Bandos Salamanca, S.L Isolux Soma and Unitech JV (*) Partcipes de Biorreciclaje, S.L. Bioreciclajes de Cdiz S.A. (5) Lineas Mesopotanicas S.A. Lineas del Norte S.A. Lineas de Comahue Cuyo, S.A. Eclesur, S.A. (*) Empresa Concesionaria Lneas Elctricas del Sur, S.A. (*) Landscape Corsn, S.L. Pinares del Sur, S.L. Las Cabezadas de Aranjuez S.L. Alqlunia5 S.A. (*) (5) PC: EC:
Address Mxico DF Mexico D.F Haryana Haryana Buenos Aires Rio Janeiro Rio Janeiro Rio Janeiro Rio Janeiro Sao Paulo Lima Lima Mxico DF Haryana Haryana Delaware Austin Palencia Cdiz Madrid Madrid Haryana Madrid Cdiz Bs. Aires Bs. Aires Bs. Aires Buenos Aires Buenos Aires Madrid Cdiz Madrid Toledo
Shareholder
Activity Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Concessions Real Estate Real Estate Real Estate Real Estate Concessions Real Estate Real Estate Real Estate Real Estate
Auditor PwC Unaudited Unauditeda Unaudited PwC Deloitte Deloitte Deloitte Deloitte Unaudited Unaudited Unaudited PwC Other Other Unaudited E&Y Unaudited Unaudited Other Unaudited Unaudited Unaudited Other Other PwC PwC PwC Unaudited Unaudited Unaudited PwC E&Y Other
50.00 Isolux de Mxico, S.A. de C.V. 50.00 Isolux de Mxico, S.A. de C.V.
50.00 Isolux Corsn India Engineering & Const Pvt LTD. PC 50.00 Isolux Corsn India Engineering & Const Pvt LTD. PC 49.00 Corsn Corviam Const., S.A. 33.33 Isolux Energia e Particip. Ltda. 33.33 Isolux Energia e Particip. Ltda. 33.33 Isolux Energia e Particip. Ltda. 33.33 Isolux Energia e Particip. Ltda. 50.00 Isolux Energia e Particip. Ltda. 50.00 Isolux Corsn Concesiones, S.A. 100.00 Isonor Transmisin S.A.C. 50.00 Isolux Corsn Concesiones, S.A. 50.00 Isolux Corsn Concesiones, S.A. 50.00 Isolux Corsn Concesiones, S.A. 50.00 Iccenlux Corp. 50.00 Wett Holdings 50.00 Isolux Corsn Aparcamientos, S.L. 50.00 Isolux Corsn Aparcamientos S.L. 51.00 Isolux Corsn Aparcamientos S.L. 70.00 Isolux Corsn Aparcamientos S.L. 50.00 Isolux Corsn Concesiones, S.A. 49.50 Isolux Ingeniera, S.A. 33.33 Global Vambru, S.L 98.00 Partcipes de Biorreciclaje, S.L. 33.33 Grupo Isolux Corsn, S.A. 33.33 Grupo Isolux Corsn, S.A. 33.34 Grupo Isolux Corsn, S.A. 50.00 Grupo Isolux Corsn, S.A. 50.00 Grupo Isolux Corsn, S.A. 50.00 Isolux Corsn Inmobiliaria, S.A. 50.00 Isolux Corsn Inmobiliaria, S.A. 40.00 Isolux Corsn Inmobiliaria, S.A. 50.00 Isolux Corsn Inmobiliaria, S.A. PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC PC EC EC EC EC
Renewable Energies PwC
(*) Added to the consolidation scope during the year. MP: Equity method.
Soma Isolux Varanasi Aurangabad Tollway Private Limited (*) Haryana
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Companies acquired or incorporated during the year and/or additional investment in companies already included in the consolidation scope in the previous year. The inclusion of these companies in the consolidation scope did not generate additional sales during the year. Cost included in Participes de Bioreciclaje S.L. Proportionate Consolidation Equity consolidation method
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Appendix
Appendix IV
Companies included in consolidation scope participating in temporary Joint ventures (UTEs)
Name of UTE % interest Name of UTE % interest
Name of UTE
% interest
Name of UTE
% interest
UTE ENVOLVENTE CRUZ ROJA UTE MURO UTE DEPUR.SESEA BOROX UTE VALENCIA I INSTALACIN DE ESTACIN L3 ROQUETES UTE UTE CERCANIAS MADRID LINEA C-3 PINTO CARRETERA LEN CEMBRANOS ACTUACIONES MEDIAMBIENTALES AVE UTE IDAM MONCOFA PLANTA DE VALORIZACIN ORGANICA ALGARVE UTE RIO TURBIO OFF ESPAA UTE REMODELACIN SOTSCENTRALS L-3 TMB UTE CORELSA CANALIZACION AT PUERTO FERROL NUEVO VIAL DE CONEXIN CON CTRA. N-352 UTE AVELE INFRAESTRUCTURA TRANSPORTE UTE AVELE 2 INFRA.TRANSPORTE NUEVA AREA TERMINAL AEROPUERTO DE SANTIAGO UTE GARABOLOS AUTOVA DEL DUERO-VARIANTE DE ARANDA MTTO. T4 BLOQUE 1, AENA MTTO.CENTRO URGENCIAS EXTRAHOSP.EL MOLAR UTE VALENCIA III UTE CABEZA DE BUEY UTE HOSPITAL VIRGEN DE LA SALUD CARRETERA PUERTO RICO-MOGAN UTE CORIA MORALEJA CARRIL MAANET-FORNELLS DE LA SELVA AP-7 UTE INECAT UTE ANTEQUERA UTE VIA SAGRERA UTE DG POLICIA UTE CAJA DUERO MTTO. ALCALA-MECO UTE MANTENIMIENTO ALCALA MECO UTE VALENCIA V ENLACE MEIRAS CONSTRUCCIN ACCESOS A SOTO DE RIBERA UTE DCS LOMA LA LATA UTE ELECT. HOSPITAL PARAPLEJICOS SISTEMAS A4T1 UTE U 11 SAN LAZARO HOSPITAL PARAPLEJICOS TOLEDO
60.00% 60.00% 90.00% 50.00% 100.00% 40.00% 65.00% 33.34% 45.00% 50.00% 91.00% 40.00% 50.00% 40.00% 50.00% 31.92% 32.32% 55.00% 80.00% 70.00% 100.00% 100.00% 50.00% 100.00% 40.00% 30.00% 60.00% 55.00% 39.25% 70.00% 50.00% 100.00% 100.00% 80.00% 20.00% 50.00% 50.00% 60.00% 50.00% 99.00% 50.00% 70.00% 80.00%
UTE COIN CASAPALMA ADECUACION CAMINO TORTILLA VARIANTE LINARES UTE AVE NUDO DE LA TRINIDAD MONTCADA UTE PLAZA SUR DELICIAS MANTENIMIENTO XUNTA DE GALICIA UTE DEPURADORA FERNAN NUEZ UTE MARBELLA UTE EDIFICIO MEDICINA C.JUSTICIA MADRID MTTO.EDIFICIOS M MEDIO AMBIENTE EMISARIO RIO PISUERGA TRAVESIA MARTOS II VIA DEL PRAT DE LLOBREGAT UTE ARITZETA LOMA LA LATA - OFF UTE ABASTECIMIENTO OROPESA AUTOVIA IV CENTENARIO FASE 1 TRAMO 1 UTE MACEIRAS REDONDELA UTE PRESA SANTOLEA SANEAMIENTO PUERTO DEL CARMEN ACONDICIONAMIENTO CTRA. VALLEHERMOSO-ARURE UTE CABREIROS REDES BCN UTE ACOMETIDAS ATEWICC-4 DRATYP IX T. RENFE 07 - CENTRO T. RENFE 07 - NORTE UTE REGADO DURATON LINEA DE TRANSMISION CAPANDA UTE MIERA UTE JEREZ GTOS GRALES UTE HOSPITAL ALCAZAR UTE GIRONA UTE EDAR VIC LINEA 9 METRO BARCELONA RED ACCESO RURAL EN CATALUA CONSTRUCCIN SUBESTACIN PLAN TRAMONTANA UTE ALP PLANOLES SUPLIDOS U.T.E. PALOS INTEGRACIN SISTEMA CONTROL DEL TSA TELEMANDO DE ENERGIA UTE BENIDORM SAVE 3, SUPLIDOS MTTO. INTEGRAL BASE
50.00% 50.00% 33.34% 50.00% 70.00% 50.00% 80.00% 50.00% 100.00% 50.00% 50.00% 25.00% 50.00% 75.00% 100.00% 70.00% 50.00% 50.00% 70.00% 70.00% 70.00% 50.00% 33.33% 50.00% 50.00% 50.00% 100.00% 33.00% 50.00% 10.00% 40.00% 33.00% 50.00% 20.00% 50.00% 50.00% 33.33% 99.90% 33.33% 50.00% 49.00% 26.20% 80.00%
261
EDAR VILLAHERMOSA COLUNGA CARAVIA UTE CONSER INF LEON UTE ACCESO PTO. VALENCIA UTE CARRETERA A-222- MEDIANA PROMOCION RIVAS PASARELA PTE CASTRO UTE AUTOVIA RONDA-RINCON UTE EDAR CARBONERO PLAN DOTACION BDA. CEUTA CONSERVACIN INFRAESTRUCTURA LEON UTE JUCAR VINALOPO CAMINO DE SANTIAGO AMPLIACIN PUERTO 1 FASE MEJORA ACCESO PUERTO CORREDOR DEL MORRAZO RONDA LOS OMEYAS UTE FFCC EL PORTAL UTE UTE MACAS PICAVEA RELLENO PARCELAS 23 AUTOPISTA MADRID TOLEDO PRESA ARAUZO UTE ESTACION AGUAS RESIDUALES DE LA LINEA A-312 VARIANTE LINARES UTE LAS TERRAZAS MODERNIZACIN INST. RIEGO EN RIO BEMBEZAR CORDOBA CONVENTO SAN FRANCISCO II UTE PUNTO LIMPIO BENAVENTE UTE ZAMORA VERDE DUPLICACION CALZADA VARIANTE MARTOS EN A-316 UTE EL ESPARTAL II LINEA FERROVIARIA OSUNA AGUADULCE UTE VARIANTE CARTAMA OBRAS CENTRO TECNOLOGICO ARNEDO LA RIOJA REMODELACIN INTEGRAL ARRASATEKO KIROL ESPARRUA RESIDUOS SAN ROQUE
260
70.00% 66.67% 50.00% 40.00% 50.00% 97.00% 50.00% 50.00% 100.00% 50.00% 50.00% 33.33% 50.00% 25.00% 50.00% 50.00% 33.34% 70.00% 50.00% 34.00% 36.00% 100.00% 50.00% 50.00% 100.00% 50.00% 50.00% 50.00% 33.00% 50.00% 55.00% 50.00% 60.00% 80.00% 50.00% 100.00% 80.00% 100.00%
REMODELACIN DARSENA INTERIOR PORTO VILANOVA UTE CONCESIONARIA EDAR LAXE CORSN UTE QUIEBRAJANO DUPLICACION M-501 HOSPITAL DE BURGOS MEJORA RED SANEAMIENTO CASCO DE LA VILLA LINEA AEREA MADRID-SEGOVIA-VALDEASTILLAS UTE MUELLE BAIONA AMPLIACION DE PEIRAO UTE ACCESO A CORUA UTE ABASTECIMIENTO LERIDA CANAL PIANA MEJORA ABASTECIMIENTO AGUA OVIEDO UTE HOSPITAL MILITAR UTE CATENARIA MALAGA UTE SANEAMIENTO MUNICIPIOS CORDOBA LINEA AVE CAMPOMANES UTE GUINOLUX UTE CLIMATIZACION ALCAZAR SAN JUAN UTE AUTOVIA A7 CONCENTAINA MURO DE ALCOY ACONDICIONAMIENTO TRAVESIA DE MARTOS LINEA 5 TRAMO UTE ARCO TRIUNFO UTE ENVASES PICASSENT UTE PRESA MELONARES UTE GUADALOPE UTE FLUMEN MODERNIZACIN RIEGOS UTE ATEWICC 3 SUPLIDOS UTE ALMAGRO AVE AMOREBIETA - ETXANO UTE RIO DUERO-TUNEL PINAR ANTEQUERA MONTAJE VIA ALTA VELOCIDAD VIA PRAT.S.JOAN UTE CENTROS PENITENCIARIOS ANDALUCIA ORIENTAL UTE LOMA LA LATA ON UTE MANSUB 2 CONSTROL Y SISTEMAS ADECUACIN PRESA BEMBEZAR Y RETORNILLO NUEVO APOYO TERMINAL BARCELONA UTE UTE VERDUGA CENTRO DE INSERCIN SOCIAL DE TENERIFE UTE E.D.A.R. TOMELLOSO
50.00% 100.00% 50.00% 50.00% 10.00% 70.00% 20.00% 65.00% 50.00% 70.00% 100.00% 100.00% 50.00% 50.00% 50.00% 50.00% 40.00% 50.00% 50.00% 40.00% 100.00% 70.00% 50.00% 50.00% 50.00% 33.34% 100.00% 50.00% 45.00% 50.00% 100.00% 75.00% 25.00% 50.00% 75.00% 100.00% 100.00% 90.00%
ACONDICIONAMIENTO CTRA A-495.GIBRALEON-S.BARTOLOME 60.00%
CAPANDA 33.33%
ADECUACION ENTORNO CASA LES RADIOS UTE MUNICIPIOS COSTEROS
report
annual
2010
08. Economic report

Appendix
Name of UTE
% interest
Name of UTE
% interest
MANTENIMIENTO INSTALACIONES EDIFICIO ADUANA AEROPUERTO CIUDAD REAL UTE UTE QUINTANA SS/EE LINEA 3 METRO SUPLIDOS MANTENIMIENTO SANITARIO GUADALQUIVIR UTE COMAVE, SUPLIDOS VODAFONE CDC LEGANES PLANTA DE COMPOSTAJE EN ARANDA UTE LEVATEL UTE ENARSA OFF MUSEO DE AMERICA BARRIADA PR.ALFONSO UTE EDAR LA CHINA SEDE ADMINISTRATIVA HOSPITAL MILITAR SEVILLA GALERIAS BARAJAS CSIC EN LA CARTUJA UTE ARQUITECTURA L-5 UTE PLANTA COMPRESORA CALLES POLA DE LENA AMPLIACION HOSPITAL UNIVERSIDAD DE GUADALAJARA PUENTE PISUERGA UTE EUBA-IURRETA UTE UTE LOECHES AZUCARERA PRAVIA UTE TUNEL STA.M CABEZA SEGURIDAD UNID.MADRES DE YESERIAS TERCERA RONDA CIRCUNV. A CORUA-POCOMACO UTE AVE PINAR II MANIPE ASTURIAS
100.00% 65.00% 50.00% 50.00% 80.00% 28.33% 50.00% 50.00% 50.00% 50.00% 100.00% 50.00% 50.00% 100.00% 100.00% 100.00% 43.50% 50.00% 100.00% 50.00% 50.00% 50.00% 50.00% 60.00% 51.00% 100.00% 80.00% 64.29% 100.00%
UTE CORONA F.ABAJON REHABILITACIN CUARTEL TENIENTE RUIZ OBRAS TRES APARCAMIENTOS EN CEUTA BEATRIZ DE BOBADILLA RAMBLA ALBOX OBRAS EDIF. FACULTAD MEDICINA DE GRANADA UTE TUNEL BIELSA PRESA GUADALMELLATO PCI L2 METRO BCN INSTAL . L5 METRO BCN UTE LAVAPINOS PUENTE - GRANADA UTE HOSPITAL DE LAFERRERE BALSA DE VICARIO UTE PLANTA TRATAMIENTO VALLADOLID UTE ZAMORA LIMPIA UTE AYUNTAMIENTO MORALEJA UTE AYUNTAMIENTO JARAIZ DE LA VERA UTE AGUAS CILLEROS UTE ZONA VERDE UTE MONUMENTO HISTORICO UTE ALICANTE I UTE AVICO DCS RIO TURBIO C&S UTE AVE PORTO-MIAMAN SANEAMIENTO CASTRILLON UTE UTE RIO TURBIO ON UTE TORIO-BERNESGA UTE CEUTA APARCAMIENTO
50.00% 42.50% 42.50% 100.00% 70.00% 50.00% 50.00% 60.00% 50.00% 16.00% 80.00% 40.00% 70.00% 30.00% 30.00% 60.00% 50.00% 60.00% 60.00% 60.00% 40.00% 25.00% 50.00% 75.00% 55.00% 91.00% 50.00% 50.00%
MTTO.COMUNICACION.L9 20.00% METRO-R.METTAS/VAPES 50.00%
LUCALA 33.33%
09.
REFORMA HOSPITALIZACIN HOSPITAL MILITAR SEVILLA 100.00%
Management Report
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09. Management report
Economic Environment
During 2010 Gross Domestic Product (GDP) of the Spanish economy underwent an annual decrease of 0.2% a less sensitive decrease as compared to 3.7% reduction rate experienced during 2009. During 2010 an increase of 1.7% has taken place in the Euro zone. This decrease is particularly due to the decline in the internal demand, mainly generated by the reduction in public administration consumption and in the gross formation of fixed capital Employment decreased by 2.3% compared with last year, then there was a sharp increase in the unemployment rate from 18.0% in 2009 to 20.0% in 2010. The consumer price index ended 2010 at 1.8%, which is higher than the (0.3%) at which 2009 ended. Regarding investment, the gross formation of fixed capital fell by 7.2% in 2010, reflecting a 2.7% increase in capital goods and 10.9% decline in construction. Economic forecasts for 2011 foresee a sensitive increase in the performance of the Spanish economy and GDP is expected to grow by 0.7%, employment is expected to fall by 0.3%, inflation is expected to increase by 2.3%, the gross formation of fixed capital will fall by 1.7% while the national deficit will reach 6.4%. Economic forecasts for those countries in which the Company operates are quite positive. The expected growth margin in 2011 Gross Domestic Product is of 4.13% in Brazil, 8.37% in India, 3.92% in Mexico and 2.31% in USA. These amounts take a greater importance due to the higher Group internationalization.
Business performance in 2010

2.1. Financial highlights The development of the Groups main figures in 2009 and 2010 is as follows:
Key Figures
Thousand euro
2010 3,239,786 63,960 207,702 311,198 (115,721) 1,235,010 310,513 30,180
2009 3,018,540 56,180 184,104 255,677 (105,616) 970,070 486,673 25,839
Variation 7.33% 13.85% 12.82% 21.72% 9.52% 27.31% -36.20% 16.80%
Total operating revenue Consolidated profit (before minority interests) Operating profit Gross operating profit - EBITDA (1) Net financial results Debts associated with Projects (2) Net debt with financial entities (3) Portfolio (thousand euro)
(1) Operating profit not taking into account amortization/ depreciation, impairment losses and changes in trade provisions. (2) Includes short and long-term Project finance. (3) Includes debts with financial entities net of cash, cash equivalents and short-term bank deposits.
Development and performance of the Group in 2010

With respect to Concessions, there was a marked increase in investments in the different areas operated: Car Parks: always in Spain; New concessions have been put in operation, Investments in new concessions to be operated in future years Turn to occupation levels prior to the crisis in operative car parks. In Construction, our presence in traditional sectors in Spain such as land infrastructures (rail and road) was continued, promoting our presence in overseas markets where the Group is developing major infrastructure projects (in countries such as Mexico, Algeria and India). In Engineering and Services, regarding the international market, the Group has developed major international projects particularly in the transmission area and power generation in countries such as Brazil, Argentina, Mexico, Angola and Italy. Regarding the area of Renewable Energies, 2010 has been the first year in which the Groups Biodiesel plants in Castellon and Ferrol have been fully operating. In general the Group has increased its overseas presence which in 2010 reached more than 50% of Groups activity, as well as consolidated its leadership position in the domestic market.
There has been a slightly increase in Gross Operating Profit EBITDA (7.33%) and consolidated profit (13.85%). Particularly noteworthy is the 16.80% portfolio increase.
Energy Infrastructures: Implementation of new energy transmission concessions in Brazil, Significant investment in concessions in Brazil. Disinvestment due to shareholding disposal in 8 transmission concessions in Brazil. Beginning of the investments in United States.
Toll roads:
264
New concession granted in India for a 192-kilometer toll road. BR116 toll road (681 kilometers) entry in operation in Brazil. Significant investments in concessions in India, Brazil, Mexico and Spain.
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2.2. Groups results 2.2.1. Income Statement performance The performance of the income statement for 2010 and 2009, as well as the variation in the most important figures, is as follows: 2.2.2. Development and composition of turnover The development and composition of turnover during 2010 and 2009 is as follows:
Thousand euro
2010 1,305,269 1,718,059 163,577 1,835 3,188,740
% of Total 41.0% 53.9% 5.1% -
2009 1,232,984 1,524,362 106,317 95,499 2,959,162
% of Total 41.7% 51.5% 3.6% -
% 2009-2010 5.9% 12.7% 53.9% 7.8%
Construction 2010 Thousand euro Turnover Other operating income (1) Inventory changes External and operating expenses Staff costs Gross Operating Profit (EBITDA) % over turnover Depreciation and charges due to impairment losses Change in trade provisions Operating profits % over turnover Net Financial Results Shares in result of associates Profit before taxes Income tax Profit for the year Profit attributed to minority interests Profit attributed to Companys shareholders (1) Includes own work capitalized. 3,239,786 3,188,740 46,012 5,034 (2,549,318) (379,270) 311,198 9.61% (86,692) (16,804) 207,702 6.51% (115,721) (7,072) 84,909 (20,949) 63,960 805 63,155 2009 3,018,540 2,959,162 78,511 (19,133) (2,407,204) (355,659) 255,677 8.62% (65,058) (6,515) 184,104 6.22% (105,616) (12,012) 66,476 (10,296) 56,180 (4,724) 60,904 3.70% 13.85% 27.73% 9.57% 12.82%
Thousand euro
Variation 7.33%
Engineering and Industrial Services Concessions Other (1) Total
(1) Includes other business and consolidation adjustments
21.72%
With respect to the breakdown into domestic and international markets, the Groups turnover has performed as follows:
2010 1,588,804 1,599,936 865,835 734,101 3,188,740
% of Total 49.8% 50.2% 54.1% 45.9%
2009 1,793,418 1,165,744 749,494 416,250 2,959,162
% of Total 60.6% 39.4% 64.3% 35.7%
% 2009-2010 (11.4%) 37.2% 15.5% 76.4% 7.8%
Domestic market International market America Rest of the world Total
2.2.3. Development and composition of Gross Operating Profit (EBITDA) The development and composition of EBITDA during 2010 and 2009 is as follows:
Thousand euro
2010 104,712 135,015 112,545 (41,074) 311,198
% of Total 33.6% 43.4% 36.1% -
2009 85,771 128,378 74,162 (32,634) 255,677
% of Total 33.8% 50.2% 29.0% -
% 2009-2010 22.1% 5.2% 51.8% 21.72%
Construction Engineering and Industrial Services Concessions Other (1) Total
(1) Includes other business and consolidation adjustments
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Outlook 2011
The business volume of Grupo Isolux Corsn during 2010 exceeded 5,977 million euro, 22% of which relates to the domestic market and 78% to international markets. Set out below is a by area-breakdown of business for 2010:
Treasury stocks
There have been no movements in treasury stock during the year.
5
% of Total 21.97% 31.50% 46.53%
Research and development activities

Research, initial design, testing of new products and services, etc., as well as specific innovation initiatives involving these products, regardless of whether or not they are attributed to projects, are carried out in general by the employees of the Groups different departments within the framework of varying national and regional government aid programmes.
2010 Construction Engineering and Industrial Services Concessions Total 1,313,262 1,882,913 2,780,874 5,977,049
The Groups total portfolio at 31 December 2010 amounts to 30,179,9 million euro, 18% of which relates to domestic market and 82% to international ones. Set out below is a breakdown of the portfolio by business area and performance with respect to 2009:
6
2009 3,380,824 2,110,281 20,138,020 210,147 25,839,272 % of Total 13.1% 8.2% 77.9% 0.8% % 2009-2010 7.3% 29.5% 17.3% (0.9%) 16.8%
Human Resources
The average number of stood at 7,640 instead average Group of year average workforce by follows: Group employees during 2010 of 7,889 employees of added 2009. The composition of the professional category is as
2010 Construction Engineering and Industrial Services Concessions Other sectors Total 3,626,434 2,731,978 23,613,190 208,312 30,179,914
% of Total 12.0% 9.1% 78.2% 0.7%
Category University graduates Administrative staff Workers
2010 2,647 794 4,199 7,640
2009 2,220 530 5,139 7,889
Despite the current macro-economic environment both in Spain and globally, Group portfolio figures, enable us to be reasonably optimistic about our prospects in 2011. Grupo Isolux Corsn expects to improve turnover by maintaining its profitability ratios and cash generation during 2011. Of the contracts awarded to the Group in the first few months of 2011, the following are particularly noteworthy in view of their significance.
3,150 MW rectifier station construction (Porto Velho) and 2,950 MW inverter station (Araraguara) in Brazil. Tarragonas Central Market renewal and car park operation. Construction of an office building in Madrid as EFE agency headquarters. Construction of two photovoltaic solar plants in Italy for Sunedison. Car parks for the new courts in Las Palmas de Gran Canaria (700 spaces). 150 MW Kulhna Generation Plant in Bangladesh.
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Use of Financial Instruments

The activities carried out by Group companies are exposed to various financial risks. The policies developed by Grupo Isolux Corsn concerning these risks are based on the establishment of hedges for exchange and interest rate risks. Operations with financial derivatives at 31 December 2010 are as follows: a) Exchange rate hedging operations In order to hedge the exchange risk, the Group has arranged hedging transactions through which it insures: 1. The forward sale and purchase of US dollars (USD) against euro with different dates and at different exchange rates for a total amount of 161,328 thousand dollar and 132,660 thousand dollar, respectively. 2. The forward sale and purchase of USD against Mexican pesos with different dates and exchange rates for a total amount of 9,498 thousand dollar and 13,235 thousand dollar, respectively. 3. The forward purchase of Swiss Francs against euro with different dates and exchange rates for a total amount of 309 thousand Swiss Francs 4. The forward sale of Mexican pesos against euro with different dates and Exchange rates for a total amount of 9,837 thousand Mexican pesos. The effect of these transactions has been valued at the year end. b) Interest rate hedging operations At 31 December 2010, the Group has entered into interest rate swaps with financial entities. These swaps were arranged on 10 September 2010, are in effective force until 14 February 2011 and mature on 29 June 2015, and insure a rate of 2.025% for a debt of 532,000 thousand euro, related to the long-term loan provided by a syndicate. This loan was renewed, extended and grouped into a unique contract amounting to 552,000 thousand euro which will be in force as from 14 February 2011.
Total
In addition, in 2010 the following interest rate swaps were in force: HIXAM loan: The repayment of this loan is through the following amortization schedule: Contract date: Notional amount: Interest rate: Maturity date: HIXAM II loan: Contract date: Notional amount: Interest rate: Maturity date: 13 January 2010 30,466 thousand euro 3.00% 23 December 2025 7 February 2007 63,273 thousand euro 4.36% 29 December 2022
Other loans/credits to the Group:: Contract date: Notional amount: Interest rate: Maturity date: Contract date: Notional amount: Interest rate: Maturity date: Contract date: Notional amount: Interest rate: Maturity date: Contract date: Notional amount: Interest rate: Maturity date: Contract date: Notional amount: Interest rate: Maturity date: 24 February 2009 20,000 thousand euro 2.47% 24 February 2010 23 June 2009 20,000 thousand euro 2.44% 23 June 2012 29 May 2009 50,000 thousand euro 2.66% 3 June 2012 29 April 2010 50,000 thousand euro 1.97% 3 June 2013 22 June 2010 85,000 thousand euro 1.80% 18 June 2013
Maturity date 29/12/2012 29/06/2013 29/12/2013 29/06/2014 29/12/2014 29/06/2015
2010 11,051 44,168 55,183 66,215 99,368 276,015 552,000
Sociedad Concesionaria Zona 8 loan Contract date: Notional amount: Interest rate: Maturity date: Infinita Renovables loan: Contract date: Notional amount: Tipo de Inters: Maturity date: 1 February 2010 181,800 thousand euro 4.115% 30 December 2016 26 July 2007 7,607 thousand euro 4.815% 25 February 2024
Concesionaria Saltillo - Monterrey S.A de C.V. loan: Contract date: 30 May 2007 Notional amount: 2,330,080 thousand Mexican pesos Interest rate: 8.20% Maturity date: 30 May 2025 Concesionaria Perote-Xalapa S.A de C.V. loan: Contract date: 13 February 2008 Notional amount: 1,900,000 thousand Mexican pesos Interest rate: 8.20% Maturity date: 14 January 2022 Sociedad Concesionaria Autova A4 Madrid S.A. loan: Contract date: Notional amount: Interest rate: Maturity date: 30 July 2008 29,082 thousand euro 5.05481% 15 June 2025
Sociedad Concesionaria Autova A4 Madrid S.A. loan: Contract date: Notional amount: Interest rate: Maturity date: 30 July 2008 29,082 thousand euro 5.058% 16 June 2025
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Published by: Isolux Corsn Direccin General de Medios Comunicacin e Imagen Corporativa Caballero Andante, 8 28021 Madrid www.isoluxcorsan.com
Creation and design: Torres y Carrera Printed by: Varoprinter Legal deposit:
Printed on paper originating from forests that are managed in a responsible way.
272

Annual Report 2010

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Annual Report 2010

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report

Economic Report, 155

Management Report, 263

Facilities, Maintenance and Services, 79

ci. Letter from the CEO

ci. Board of Directors

CEO: Luis Delso Heras

Vice President: Jos Gomis Caete

Secretary: Juan Francisco Falcn Ravelo

(as of 31st December 2010)

ci. Main Statistics

25.838 79% 15.565

117 57% 49%

B 2005 2006 2007 2008 2009 2010

2005 2006 2007 2008 2009 2010

Revenue per geographic area America

MW installed in PV power stations over the last 3 years

Headquarters throughout the world

Isolux Corsn consolidates its presence in strategic and emerging countries

The American continent represents 28% of the companys revenue

The turnover in Concessions grew by 54% in 2010 to total 164 M

Kilometres of motorways in concession

Main infrastructure concessions

595 176 244

Isolux Corsn, the first European infrastructure developer in India

The investment made exceeds 2 billion euros

Spain, new contracts

Main concessions in India

Efficacy in all divisions

Toll station on the Panipat Jalandhar motorway | India

The investment made exceeds 3.800 billion euros

The first motorway for the Group in Mexico opens

Isolux Corsn operates one of the main communication routes in Monterrey

Main concessions in Mexico

Works in Viabaha, in the state of Baha | Brazil

Main concessions in Brazil

Toll on the Saltillo - Monterrey motorway | Mexico

Strategic expansion in the United States

The Group in the global energy market

With an investment of 500 M, the company will operate 564 km of lines

Brazil: vast experience in an emerging market

The rotation of mature assets enables making new investments

Car Park Concessions

Padre Claret car park, Segovia | Spain

This division maintains its growth rate weighted at 24.25%

The spaces in operation increased by 22% in 2010

BR 116 and BR 324 motorways | Brazil

One of the largest infrastructure concessions in the world

Isolux Corsn manages 680 km of roads in the state of Baha, in Brazil

Viabaha is one of the Groups main concessions in Brazil

Transmission lines Texas | United States

Santa Brbara car park - Cdiz | Spain

It has 900 spaces of which 200 are reserved for residents

State-of-the-art technology in car parks for the city of Cdiz

Isolux Corsn carried out the works over a period of 18 months

Growth in strategic countries

600 km of lines built in 2010

Main T&D line milestones | 2010

Isolux Corsn consolidates itself as a leading company in T&D

Strengthened activity in Africa

The plant in Loma de La Lata was inaugurated in 2010 | Argentina

Intense activity in Argentina

Main power generation milestones | 2010