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OHL Group Annual Report

2008

Data Highlights 2008OHL Group

2008 % 2007 % % 08/07

Economic Data

Millions of euros

Annual turnover 4,008.8 100.0 3,764.4 100.0 6.5

Gross operating income (EBITDA) 607.6 15.2 542.9 14.4 11.9

Net operating income (EBIT) 422.7 10.5 373.7 9.9 13.1

Net attributable income 150.7 3.8 140.5 3.7 7.3

Parent company net shareholders' equity 422.4 608.4 -30.6

Operational Data

Millions of euros

Portfolio breakdown

Short-term portfolio 6,023.6 10.2 5,302.2 13.9 13.6

Long-term portfolio 53,044.6 89.8 32,756.0 86.1 61.9

Total portfolio 59,068.2 100.0 38,058.2 100.0 55.2

Turnover breakdown

Domestic Construction 1,786.4 44.6 1,973.9 52.4 -9.5

International Construction 1,429.1 35.7 1,162.2 30.9 23.0

Industrial 25.5 0.6 - - -

Concessions 542.4 13.5 435.5 11.6 24.5

Environment 119.9 3.0 116.8 3.1 2.7

Development 105.5 2.6 76.0 2.0 38.8

Total turnover 4,008.8 100.0 3,764.4 100.0 6.5

Human resources (employees at year end )

Full time 14,037 68.3 10,030 71.3 40.0

Temporary 6,520 31.7 4,039 28.7 61.4

Total personnel 20,557 100.0 14,069 100.0 46.1

Ratios

Gross operating income (EBITDA) / Turnover 15.2% 14.4%

Net operating income (EBIT) / Turnover 10.5% 9.9%

Gross income / Turnover 6.7% 6.1%

Net attributable income / Turnover 3.8% 3.7%

ROE (Net attributable income / Parent company average net shareholders’ equity)

29.2% 24.4%

Data per Share (euros)

Share price at close of year 9.96 23.03

Gross dividend per share 0.4306 0.4013

Annual revaluation -56.75% -1.58%

Net attributable income 1.74 1.61

Number of shares at close of year 87,492,055 87,492,055

www.ohl.es

TURNOVER BREAKDOWN AND PERFORMANCE

EBITDA BREAKDOWN AND PERFORMANCE

PORTFOLIO BREAKDOWN AND PERFORMANCE

Turnover 2008 Turnover 2004 - 2008 (Millions of euros)

EBITDA 2008 EBITDA 2004 - 2008 (Millions of euros)

Portfolio 2008 Portfolio 2004 - 2008 (Millions of euros)

DELEGATION - MEXICOOHL MÉXICO SC, S.A. DE C.V. CONSTRUCTORA PROYECTOS VIALES DE MÉXICO, S.A. DE C.VPaseo de la Refoma, nº 22-25, Piso 22Col. Juárez Delegación Cuauhtémoc 06600 Mexico DF - MEXICOTelephone: +52 55 52 03 09 49Fax: +52 55 52 03 36 92

CONSTRUCTORA TP, S.A.C. Avda. Elmer Faucett 28880 Callao - PERUTelephone: +511 572 08 59Fax: +511 572 00 89

DELEGATION - TURKEYHorasan Sokak, 16 Kat 206700 G.O.P. Ankara - TURKEYTelephone: +90 312 436 53 50Fax: +90 312 436 53 52

OHL CENTRAL EUROPE, a.s.Olšanská , 1ª (Budova Sudopu 7, patro)13080 Praha 3 – CZEHC REPUBLICTelephone: +420 296 761 130Fax: +420 296 761 144

OHL ŽS, a.s.Buresova 938/17660 02 Brno-Stred – CZEHC REPUBLICTelephone: +420 541 571 111Fax: +420 541 212 166

ŽPSV, a.s.Trebízského 207687 24 Uherský Ostroh – CZEHC REPUBLICTelephone: +420 572 419 311Fax: +420 572 419 308

TSS, a.s. Jicinska 1605 501 01 Hradec Králové – CZEHC REPUBLICTelephone: +420 972 342 210Fax: +420 972 342 202

OHL USA, INC405 SW 148th Avenue. Suite OneDavie, Florida 33325 - USATelephone: +1 954 476 3200Fax: +1 954 476 3230

ARELLANO CONSTRUCTION CO 7051 S.W. 12th street Miami, Florida 33144 - USATelephone: +3 059 949 901Fax: +3 059 949 903

COMMUNITY ASPHALT CORP.14005 NW 186th StreetHialeah, Florida 33018 - USATelephone: +1 305 829 0700Fax: +1 305 829 8772

TOWER-OHL GROUP405 SW 148th Avenue. Suite OneDavie, Florida 33325 - USATelephone: +1 954 476 3200Fax: +1 954 474 3111

OHL CONSTRUCTION CANADA, INC 1440 St. Catherine Street West - Suite 310 Montreal, PQ H3G 1R8 - CANADATelephone: +514 394 0865Fax: +514 394 9454

DELEGATION - ARGENTINASuipacha, 1380, Piso 5ºC10 11ACD Buenos Aires - ARGENTINATelephone: +54 11 43 94 07 70Fax: +54 11 43 94 07 87

DELEGATION - ECUADORAvda. Amazonas, E3-131 y Pasaje GuayasEdif. Rumiñahui, oficina 701 17-07-9290 Quito - ECUADORTelephone: +593 22 25 03 27Fax: +593 22 92 05 39

DELEGATION - ALGERIALotissement Mimosas, Villa nº7 - Ben AknounArgel (ALGERIA)Telephone: +213 17 03 11 31 Fax: +213 21 91 40 83

OHL INDUSTRIAL OHL INDUSTRIAL, S.L. Paseo de la Castellana 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 353 12 00Fax: +34 91 345 75 06

ATMOS ESPAÑOLA, S.A.Paseo de la Castellana, 178 bis 28046 Madrid Telephone: +34 (91) 353 12 00Fax: +34 (91) 345 75 06

CHEMTROL PROYECTOS Y SISTEMAS, S.L. Félix Boix, 328036 MadridTelephone: +34 (91) 353 23 40Fax: +34 (91) 343 04 91

ECOLAIRE ESPAÑA, S.A.Paseo de la Castellana, 178 bis 28046 MadridTelephone: +34 (91) 345 75 06Fax: +34 (91) 345 75 06

PROYECTOS Y SISTEMAS, S.A. Paseo de la Castellana, 178 28046 MadridTelephone: +34 (91) 353 12 00Fax: +34 (91) 345 75 06

OHL CONCESSIONS OHL CONCESIONES, S.L.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTeléfono: +34 91 348 41 00Fax: +34 91 348 45 79

SPAIN

AUTOPISTA EJE AEROPUERTO, C.E.S.A. Área de Servicio “Valdebebas”Autopista M-12, P.K. 4 (sentido Sur)28042 MadridTelephone: +34 91 301 70 00Fax: +34 91 301 70 07

EUROGLOSA 45, C.C.A. DE MADRID, S.A. Autopista M-45 P.K. 5,7 Ramal Parque Sur s/n28914 Leganés (Madrid)Telephone: +34 91 682 92 90Fax: +34 91 688 33 99

AUTOVÍA DE ARAGÓN TRAMO 1, S.A.Paseo de la Castellana, 259 D, Torre Espacio28046 MadridTelephone: +34 91 348 41 00Fax: +34 91 348 45 79

CERCANÍAS MÓSTOLES NAVALCARNERO, S.A.Avda. Europa, 2 Edificio Alcor, Plaza B, Planta 0-Ala oeste28046 Alcorcón (Madrid)Telephone: +34 91 689 06 64Fax: +34 91 348 45 79

METRO LIGERO OESTE, S.A.Edgar Neville, s/n, Ciudad de la Imagen28223 Pozuelo de Alarcón (Madrid)Telephone: +34 91 503 16 00Fax: +34 91 503 16 90

TERMINALES MARÍTIMAS DEL SURESTE, S.A. Nuevo Acceso Poniente al Puerto de Alicante frente al Muelle nº 17, s/n 03008 AlicanteTelephone: +34 96 598 49 23Fax: +34 96 592 37 89 MARINA UROLA, S.A. Barrio Santiago, s/n, Edificio Capitanía, Puerto Deportivo 20750 Zumaia (Guipúzcoa)Telephone: +34 943 86 09 38 Fax: +34 943 14 32 99

NAUTIC TARRAGONA, S.A. Port Esportiu, Local Capitanía, s/n 43004 TarragonaTelephone: +34 977 21 31 00Fax: +34 977 21 27 02

NOVA DÁRSENA ESPORTIVA DE BARÁ, S.A.Plaza Mediterráno, s/n - Apdo. de correos nº 5043883 Roda de Bará (Tarragona)Telephone: +34 977 13 81 69

PORT TORREDEMBARRA, S.A. Edificio Capitanía43830 Torredembarra (Tarragona)Telephone: +34 977 64 32 34Fax: +34 977 64 32 36

INTERNATIONAL

OHL CONCESIONES ARGENTINA, S.A.Av. de Mayo, 1437, 5º Piso, Dpto. J1085 Ciudad de Buenos Aires - ARGENTINATelephone: +54 11 43 71 04 66Fax: +54 11 43 82 36 31

AEC, S.A. Ricchieri Av. San MartínB1768DJA Ciudad MaderoProv. de Buenos Aires -ARGENTINATelephone: +54 11 44 62 06 61Fax: +54 11 44 62 12 42

OHL BRASIL, S.A.Rua Joaquim Floriano 913, 6º Piso. Itaim Bibi04534-013 São Paulo - BRAZILTelephone: +55 11 30 74 24 04Fax: +55 11 30 74 24 05

AUTOVIAS, S.A. Bairro Jardim Jóquei ClubeRodovia Anhanguera, km 312,2. Pista Norte14079-000 Ribeirão Preto - São Paulo -BRAZILTelephone: +55 16 21 02 42 00Fax: +55 16 21 02 42 50

CENTROVIAS, S.A. Rodovia Washington Luís, Km 216,8 - Pista Sul 13530-000 Itirapina - São Paulo - BRAZILCaixa Postal 204113574-970 São Carlos - São PauloTelephone: +55 16 33 63 83 00 Fax: +55 16 33 72 07 55

INTERVIAS, S.A. Rodovia Anhanguera, Km. 168 Pista Sul13602-040 Ararás - São Paulo - BRAZILTelephone: +55 19 35 43 60 00Fax: +55 19 35 43 60 14 VIANORTE, S.A. Rodovia Attilo Balbo Km 327,5 – Pista Leste14173-000 Sertãozinho - São Paulo - BRAZILTelephone: +55 16 36 01 11 22 Fax: +55 16 36 01 11 00

AUTOPISTA FLUMINENSE, S.ABR 101- Km 269,5 - Pista Norte - Bairro BasílioRio Bonito / RJ, 28.800-000 - BRAZILTelephone: +55 21 27 34 88 88Fax: +55 21 27 34 85 35

AUTOPISTA FERNÃO DIAS, S.AAv. Prefeito Olavo Gomes de Oliveira, 676037550-000 - Pouso Alegre / MG - BRAZILTelephone /Fax: +55 35 34 25 82 33

AUTOPISTA RÉGIS BITTENCOURT, S.ARodovia SP 139, nº 226 - Bairro Cecap11900-000 – Registro / SP - BRAZILTelephone /Fax: +55 13 38 28 16 00

AUTOPISTA LITORAL SUL, S.A.Rua Nilo Peçanha n.º 680 - Bairro Fazendas89211-400 - Joinville / SC - BRAZILTelephone: +55 47 31 77 07 00Fax: +55 47 34 33 47 05

AUTOPISTA PLANALTO SUL, S.A.Av. Alfonso Petschow n º 4040 - Bairro Indústria83880-000 - Rio Negro / PR - BRAZILTelephone: +55 47 36 41 53 11Fax: +55 47 36 41 53 25

AUTOPARK, S.A.Av. Brigadeiro Faria Lima, 2894 CEP 01451-938Jardim Paulistano – SP - BRAZILTelephone: +55 11 3079 1775

OHL CONCESIONES CHILE, S.A.Monjitas, 392. Piso 17, Edificio El Comercio8320113 Santiago de Chile - CHILETelephone: +56 27 14 23 00Fax: +56 27 14 23 25

AUTOPISTA DEL SOL, S.A. AUTOPISTA LOS LIBERTADORES, S.A.Monjitas, 392. Piso 6, Edificio El Comercio8320113 Santiago de Chile – CHILETelephone: +56 27 14 23 50Fax: +56 27 14 23 51

AUTOPISTA LOS ANDES, S.A. Monjitas, 392. Piso 17, Edificio El Comercio8320113 Santiago de Chile - CHILETelephone: +56 27 14 23 00 Fax: +56 27 14 23 25

OHL INFRASTRUCTURE, INC. 5914 Wets Courtyard Drive, Suite 160 Austin, Texas 78730 - USATelephone: +1 512 860 38 50Fax: +1 512 860 38 51

OHL CONCESIONES MÉXICO, S.A. de C.V. CONCESIONARIA MEXIQUENSE, S.A. DE C.V.AUTOVÍAS CONCESIONADAS OHL, S.A. DE C.V.VIADUCTO BICENTENARIO, S.A. DE C.V.Avda. Paseo de la Reforma nº 222 - Piso 25 Col. Juárez Delegación Cuauhtémoc 06600 Mexico DF – MEXICOTelephone: +52 55 52 55 52 50 Fax: +52 55 52 03 36 92

GANA, S.A. Avda. Paseo de la Reforma nº 222 - Piso 25 Col. Juárez Delegación Cuauhtémoc 06600 Mexico DF - MEXICOTelephone: +52 55 52 55 57 27Fax: +52 55 52 03 36 92

AMAIT, S.A.San Pedro TotoltepecToluca International Aeroport Toluca, State of Mexico, 50226 - MEXICOTelephone: +52 72 22 73 15 44 Fax: +52 72 22 73 03 81

AUTOPISTA DEL NORTE, S.A.C.Av. Víctor A. Belaúnde 147, Vía Principal 140 Edificio Real Seis, Piso 7Centro Empresarial Real San IsidroLima 27 - PERUTelephone: +51 12 11 26 39Fax: +51 12 11 25 26

OHL ENVIRONMENTOHL MEDIO AMBIENTE, INIMA, S.A.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 48 94Fax: +34 91 348 47 79

DELEGATION - BRAZILAMBIENT SERVIÇOS AMBIENTAIS DE RIBEIRÃO PRETO, S.A.Rodovia Alexandre Balbo SP 328, km. 334,6Ribeirão Preto SP-CEP 14062-800 - BRAZILTelephone: +55 16 39 62 81 00Fax: +55 16 39 62 81 06

OHL MEDIO AMBIENTE, INIMA BRASIL, LTDARua Joaquim Floriano, 913 ,6º Andar, Sala 02-Itaim Bibi CP 04534 - 013 São Paulo - BRAZILTelephone: +011 30 44 41 33Fax: +011 30 44 41 33

SERVIÇOS DE SANEAMIENTO DE MOGI MIRIM, S.A. Rua Orlando Pacini nº194 Jardim Mello Bairro Santa Cruz CEP 13800 - 382 Mogi Mirim - BRAZILTelephone: +55 16 39 62 81 00

DELEGATION - CHILEINIMA CHILE, LTDAOficina Valparaíso, 050La Chimba BajoAntofagasta - CHILETelephone: +56 55 21 42 97 Fax: +56 55 21 42 96

DESALINIZADORA ARICA, LTDA (DESALARI)Rivera Sur, s/n Valle de Lluta, Casilla 50DArica - CHILETelephone: +56 58 21 72 80Fax: +56 58 21 04 41

TRACTAMENT METROPOLITÁ DE FANGS, S.L.Rambla Prim, s/n08019 Barcelona - SPAINTelephone: +34 93 446 66 17Fax: +34 93 455 16 04

INIMA USA CORPORATIONINIMA USA CONSTRUCTION CORPAQUARIA WATER LLCMetro South Executive Park 1115 West Chestnut Suite 204 - BrocktonMassachusetts 02301 - USATelephone: +50 84 27 99 74 Fax: +50 84 27 55 47

DELEGACIÓN - MEXICOINIMA DE MÉXICO, S.A.Paseo de la Refoma, nº 222 Piso 22Col. Juárez Delegación Cuauhtémoc06600 Mexico DF – MEXICOTelephone: +52 55 52 03 09 49Fax: +52 55 52 03 36 92

PROMOAQUA DESALACIÓN DE LOS CABOS, S.A. DE C.V.Prolongación Paseo San Lucas, s/n Colonia Los Cangrejos, Cabo San LucasBaja California Sur (B.C.S.) - MEXICOTelephone: +52 62 41 73 04 77Fax: +52 62 41 22 02 68

DELEGATION - ALGERIASHARIKET TAHLYAT MIYAH MOSTAGANEM, SPA (STMM, SPA)SHARIKET MIYEH RAS DJINET, SPA (SMD, SPA)Cite Abdpuni, Ilot nº 36Dar El Beida – Alger (ALGÉRIE)Telephone: +213 21 37 14 49Fax: +213 21 37 14 35

OHL DEVELOPMENTOHL DESARROLLOS, S.L.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 42 95Fax: + 34 91 348 46 84

DELEGATION - MEXICOPaseo de la Reforma nº 222, Piso 23Col. Juárez, Delegación Cuauhtémoc06600 Mexico DF – MEXICOTelephone: +52 55 5955 7382Fax: +52 55 52 03 33 40

GASTRONÓMICA SANTA FEPaseo de la Reforma nº 222, Piso 23Col. Juárez, Delegación Cuauhtémoc06600 Mexico DF – MEXICOTelephone: +52 55 5955 7384Fax: +52 55 5250 0168

OHL DESARROLLOS MÉXICO, S.A. DE C.V.HUARIBE, S.A. DE C.V.INMOBILIARIA MAYALUUM, S.A. DE C.V. GOLF DE MAYAKOBA, S.A. DE C.V.ISLAS DE MAYAKOBA, S.A. DE C.V.LAGUNAS DE MAYAKOBA, S.A. DE C.V.OPERADORA HOTELERA DEL CORREDOR MAYAKOBA, S.A. DE C.V.OPERADORA MAYAKOBA, S.A. DE C.V.AQUA DE MAYAKOBA, S.A. DE C.V.VICEROY RESORTS MAYAKOBA, S.R.L. DE C.V.VILLAS DE MAYAKOBA, S.A. DE C.V.VIVEROS DE MAYAKOBA, S.A. DE C.V.MARINA MAYAKOBA, S.A. DE C.V.Ctra. Federal Chetumal-Puerto Juárez, Km 298. Riviera Maya77710 Playa del Carmen Solidaridad, Quintana Roo - MEXICOTelephone: +52 984 873 4900Fax: +52 984 873 4901

COMERCIAL PASEO SAN FRANCISCO, S.A. DE C.V.BAJA PUERTO ESCONDIDO, S.A. DE C.V.Arroyo Xonaca 1006 (Mall Administrative Offices)Col. El Alto Puebla72000 Puebla - MEXICOTelephone: +52 222 246 5381Fax: +52 222 246 5951

Major Companies of the OHL GroupParent Company of the OHL Grup

OBRASCÓN HUARTE LAIN, S.A.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 41 00Fax: + 34 91 348 44 63www.ohl.es

OHL DOMESTIC CONSTRUCTIONAGRUPACIÓN GUINOVART OBRAS Y SERVICIOS HISPANIA, S.A. (G&O)Mas Casanovas, 46-6408025 BarcelonaTelephone: +34 93 446 60 00Fax: +34 93 456 16 04

ASFALTOS Y CONSTRUCCIONES ELSAN, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 384 74 00Fax: 91 767 14 77

ASTRAL FACILITIES MANAGEMENT, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 774 70 00Fax: +34 91 774 70 86

CONSTRUCCIONES ADOLFO SOBRINO, S.A.Pº Portuetxe, 8328018 San SebastiánTelephone: +34 943 31 02 44Fax: +34 943 31 01 84

CONSTRUCCIONES ENRIQUE DE LUIS, S.A. (CELSA)Edificio Aída, c/ Madre Rafols, 250004 ZaragozaTelephone: +34 976 44 72 74Fax: +34 976 28 38 72

ELECTRIFICACIONES Y MONTAJES INTEGRALES OHL, S.A.Orense, 6 28020 MadridTelephone: +34 91 417 82 60Fax: +34 91 598 04 45

INGESAN, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 774 70 00Fax: +34 91 774 70 86

MORKAITZ, S.A.Plaza Circular, 4 - 5ª planta48001 BilbaoTelephone: +34 94 401 64 46Fax: +34 94 401 64 48

PACSA SERVICIOS URBANOS Y DEL MEDIO NATURAL, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 384 74 30Fax: +34 91 384 74 05

S.A. DE TRABAJOS Y OBRAS (SATO) Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid Telephone: +34 91 383 73 10Fax: +34 91 383 16 31

OHL INTERNATIONAL CONSTRUCTION OHL CONSTRUCCIÓN INTERNACIONAL, S.L.OHL CONSTRUCCIÓN INTERNACIONAL, S.L.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 43 20Fax: +34 91 348 41 71

DELEGATION - CHILEOHL ANDINA, S.A.SOCIEDAD CONCESIONARIA CENTRO DE JUSTICIA DE SANTIAGO, S.A.Monjitas, 392 – Piso 20Santiago de Chile – CHILETelephone: +56 2731 94 00Fax: +56 2731 94 02

0

1,000

2,000

3,000

4,000

5,000

20082007200620052004

3,278

2,2252,443

3,7644,009

0

100

200

300

400

500

600

700

20082007200620052004

489

248285

543

608

0

10,000

20,000

30,000

40,000

50,000

60,000

20082007200620052004

31,783

16,467

22,622

38,058

59,068

45%

Domestic Construction

International Construction

Industrial (0%)

Environment

Development

36%

13%

3% 3%

Concessions

20%



Industrial (0%)

Environment

Development

56%

3% 3%

18%

Concessions

5%



Industrial (0%)

Development (0%)

85%

5% 5%

Concessions

Environment

1


2008INDEX

OHL Group. Data Highlights 2008

Letter from the Chairman 2

OHL GROUP REPORT

Corporate Governance 7

OHL Group Activities 13

Domestic Construction 14

International Construction 26

Industrial 37

Concessions 40

Environment 46

Development 49

Social Information 53

Quality and Environment 61

RDI 67

FINANCIAL STATEMENTS AND MANAGEMENT REPORT

Auditor’s Report 78

Financial Statements 79

Management Report 191

Major Companies of the OHL Group

2008

2

Letter from the Chairman

Juan-Miguel Villar Mir

Chairman of the OHL Group

3


2008

Letter from the Chairman

Dear Shareholders:

Once again, I have the satisfaction of addressing all of you at the beginning of the OHL Group’s 2008 Annual Report to share with you the events that, in my opinion, highlighted the course of the last year.

OHL closed 2008 with very satisfactory results despite the difficult macroeconomic environment, and has achieved double digit growth, both in EBITDA and in EBIT, reinforcing our position as an international and diversified Group.

The Spanish Economy

The Spanish economy closed 2008 in a recession for the first time in 15 years, after two consecutive quarters in contraction. The situation was similar in the Euro zone as well as in the EU-27, which, subsequent to the falls in their Gross Domestic Products (GDPs) in the third and fourth quarters of 2008, registered the first recession since their creation in 1999. This difficult scenario joins the effect of the world financial crisis, triggered by the collapse of the sub-prime market in August 2007, followed by the combined real estate crisis and loss of competitiveness of our economy.

However, and despite this unfavourable situation, if we consider the whole of 2008, Spain’s growth was better than the Euro zone average. The Spanish economy ended last year with 1.2% growth, compared to 0.8% in the Euro zone and 0.9% in the EU-27.

The exterior deficit again became an important dead weight for our economy, reaching 9.5% of the GDP. Further, the finances of Public Administrations were reduced by the economic crisis and concluded 2008 with a 3.82% deficit of the GDP, with a negative register of 41,874 million Euros. This figure has been a a counterpoint to the largest fiscal surplus in the history of our democracy, obtained in 2007, when that period closed with a surplus of 2.23% of the GDP.

The Construction Sector

The construction sector is experiencing an important adjustment which is being seen reflected in its principal indicators. 2008 ended with 5.1% fall in activity. Despite the unfavourable scenario, growth in the civil works subsector is worth highlighting, having experienced an increase of 4.5% compared to the 5.5% it registered in 2007. The other subsectors presented negative figures with respect to growth, and residential building registered the largest rate of contraction, 13.5%, which contrasts with the 4% growth reached in the prior period.

In 2008, the sector generated sales of 193,280 Million Euros and employed 2,404,200 workers, representing 11.9% of the total workforce.

The Spanish cement industry has also been affected in a very important way by the crisis, with a decrease in consumption in 2008 very close to 24%, reaching 42.7 million tons, a situation that breaks a growing tendency maintained throughout ten years (1997-2007).

Additionally, public licitations, which in 2008 were situated at 39,812 Million Euros, had a 1.3% regression with respect to 2007. Regarding subsectors, civil works presented an increase of 1%, reaching a total 28,107 Million Euros. Conversely, public licitations for edification projects regressed 6.6%, situated at 11,705 Million Euros.

4

With respect to 2009, estimates indicate that investment in infrastructure by the Ministries of Development, Environment and Rural and Marine Affairs registered an increase of 3.4%, in real terms, according to the State’s General Budgets.

The Obrascón Huarte Lain Group

Results

The Group presented good results for the 2008 period despite the global economic crisis scenario. Sales reached 4,008.8 Million Euros, with a 6.5% increase with respect to 2007. Regarding operating margins, the Group’s EBITDA grew by 11.9%, reaching 607.6 Million Euros, representing 15.2% of sales. And it is important to highlight the Group’s 7.3% increase in net profit in 2008, up to 150.7 Million Euros.

The Group’s primary drivers of growth were activities in OHL International Construction and OHL Concessions, which together represented 49% of sales and 74% of the gross operating margin, followed by OHL Domestic Construction, with satisfactory results in terms of EBITDA and EBIT, which have grown 2.4% and 9.4%, respectively.

During 2008, the Ibex-35 Technical Advising Committee decided to include the OHL Group in the Index as of July 1. But that decision did not impede the severe negative effects that our share price suffered and continues to suffer, as does the rest of the construction sector, as a result of the tumultuous financial crisis that the global economy is suffering.

Portfolio

The short-term portfolio grew by 13.6% with respect to the previous period, reaching 6,024 Million Euros, equivalent to 18 months of total sales.

The long term portfolio grew 61.9% with respect to 2007, to 53,045 Million Euros, 95% of which corresponds to OHL Concessions and secures the Group’s business in the long term.

Situation with respect to the crisis

At this moment, no one doubts that we find ourselves before the worst global economic and financial crisis of the last decades. This crisis is having a huge impact on the Spanish economy and on the country’s construction sector.

In our country, the world financial crisis coincides with two other crisis’ specific to Spain: the real estate crisis, for having built double the amount of homes relative to sustainable demand during a prolonged period of time, and the loss of competitiveness of our economy, with accumulated effects in deterioration, by rising inflation and labour costs significantly superior to the Euro zone average.

But not all of the companies in the sector have been affected in the same way. Conforming to the strategy adopted and published in 2002, OHL has remained distant from any traditional real estate activity and, fulfilling the commitments with its clients, OHL has been progressively departing from the residential building sector which represents, to date, less than 2% EBITDA. As a consequence, having focused on activities at the margin of the real estate crisis, Obrascón Huarte Lain is not directly affected by it.

These aspects are complemented with other elements established in the business strategy, which the Group has been fulfilling successfully, anticipating the current problems. This strategy implies diversification, always in activities related to construction, and internationalization, always with prudent criteria.

5


2008

Financial Policies

In 2008, the OHL Group continued its traditional safe activity, with a solid and conservative financial structure. This way, the company arrived at the close of the period with net debt with resources of 716.6 Million Euros, implying a low leverage level of an order of 2.68 times EBITDA with the Group’s resources.

Along this line, and as proof that our circumstances are foreign to the financial crisis that affects the real estate sector and some construction firms, it is important to note that OHL has 600 Million Euros of unused lines of financial credit, a good diversification in its sources of financing, which include 600 Million Euros from an emission of bonds in the Euro market with expiration in May 2012 and a total of 303.2 Million Euros from a syndicated loan also in the Euro market, which expires at the end of 2011, all of which are aspects that have permitted the Group to complete the period with a comfortable position in treasury of 765.1 million Euros, which currently situates us, at a time when many other companies have had to face severe financial difficulties, in a reasonably comfortable position.

Sustainable development

The positive results in the Group’s economic and financial sphere are complemented with the strategic commitment that OHL maintains to sustainable development, which complements the current Annual Report, thereby demonstrating the Group’s efforts to increase quality and representation of the information these documents contain.

The progress that the Group has made in the area of sustainability has been compensated by its inclusion, in April 2008, in the FTSE4Good Ibex Index, the first Stock Exchange indicator that evaluates sustainable development in Spanish companies and that recognizes OHL as one of the model companies in the areas of Sustainability and Corporate Social Responsibility.

Finally, I would like to express, on my behalf and on behalf of OHL’s Board of Directors, our gratitude for the confidence and support provided by all of you, ladies and gentlemen shareholders of this company, without forgetting the important efforts of the individuals that integrate the Group’s human resources. Their commitment, efforts and dedication have been a fundamental factor in our growth and allow us to continue to advance in the fulfilment of objectives based on a process of continuous improvement, to which we all subscribe.

Chairman of the Board of Directors

Juan-Miguel Villar Mir

>> Corporate Governance

6 Torre Espacio, OHL Group Headquarters. Madrid, Spain.

7


2008INDEX

Corporate Governance

OHL GROUP REPORT





RDI 67


8

The OHL Group maintained its commitment to the practices of good governance during the 2008 period;

a challenge manifested in previous years and reflected in the faithful adherence of its normative body its

government organs to the standards and recommendations in the area of corporate governance on a national

and international front.

Following the company’s good government practices, and as the Board Rules foresee in compliance with

Recommendation 14 of the Unified Code of Good Governance, during the first quarter of the 2008 period at the

proposal of the Nominating and Compensation Committee, an advisor was named to cover the first Board of

Directors vacancy since the approval of the Unified Code.

Board of Directors

Board of Directors through December 31, 2008

Chairman Mr. Juan-Miguel Villar Mir

Proprietary director*Member of the Nominating and Compensation Committee

First Deputy Chairman Mr. José Luis García- Villalba González

Independent directorPresident of the Nominating and Compensation Committee

Second Deputy Chairman Mr. Juan Villar-Mir de FuentesProprietary director* Member of the Audit and Compliance Committee

Members Mr. Baltasar Aymerich Corominas

Proprietary director*

Mr. Tomás García Madrid

Proprietary director* Member of the Audit and Compliance Committee

Mr. Javier López Madrid

Proprietary director* Member of the Nominating and Compensation Committee

Mr. Rafael Martín de Nicolás Cañas

Executive Director

Mr. Juan Mato Rodríguez

Independent directorPresident of the Audit and Compliance Committee

SAAREMA Inversiones, S.A., represented by Mr. Joaquín García-Quirós Rodríguez

Independent directorMember of the Nominating and Compensation Committee

Mr. Luis Solera Gutiérrez

Independent directorMember of the Nominating and Compensation Committee

Mr. Jaime Vega de Seoane Azpilicueta

External DirectorMember of the Audit and Compliance Committee

Ms. Silvia Villar-Mir de Fuentes

Proprietary director*

Secretary, not director Mr. Daniel García-Pita Pemán

Deputy secretary, not director Mr. José Mª del Cuvillo Pemán

* Designated at the request of the Villar Mir Group, S.L.

9


2008

Board Committees

Audit and Compliance Committee

The Audit and Compliance Committee, presided by an Independent Director, meets periodically in function of

need, or at least four times per year. One of the sessions is destined necessarily to evaluate the efficiency and

compliance with the rules and procedures of corporate government and to prepare information that the Board

of Directors must approve and include within its annual public documentation.

Additionally, the following are among its principal functions: evaluate the results of the company’s financial

audits (internal and external); review the pamphlets emitted and the periodic financial information which the

Board must provide to the markets; examine the fulfilment of the Internal Conduct Rule in the Stock Exchanges,

the Regulations of the Board of Directors, the Regulations of the General Shareholders’ Meeting, the Personal

Executive Code of Conduct, and, in general, the company’s corporate governance rules, making necessary

proposals for their improvement, as well as advising the Board prior to the adoption of agreements relating

to the creation or acquisition of participations in entities with special purposes or domiciled in countries or

territories that are considered tax havens.

The Committee’s composition is as follows:

During the 2008 period, this Committee met on six occasions.

Nominating and Compensation Committee

The Nominating and Compensation Committee, presided by an Independent Director, is composed of External

Directors who are primarily independent. The Committee meets every time the Board or its President requests

the emission of a report or the adoption of proposals as well as in any case that is convenient for the good

development of its functions.

One of the meetings is dedicated to preparing information about compensation of the Directors that the Board

must approve and include in its annual public documentation.

This Committee is charged with establishing the criteria that must be followed for the composition of the Board

of Directors. In addition, it sends to the Board proposals for the nominating of Directors, nomination and

cessation of the Secretary and of the members of each of the Committees, and proposes both the compensation

system as well as the amount of annual compensation for Directors and of the members of the Management

Committee, among other functions.

Chairman Mr. Juan Mato Rodríguez

Members Mr. Tomás García Madrid


Mr. Juan Villar-Mir de Fuentes


10

Its composition is detailed as follows:

Management Team through December 31, 2008

OHL Group Organizational Chart

Chairman Mr. José Luis García-Villalba González

Members Mr. Javier López Madrid

SAAREMA Inversiones, S.A., represented by Mr. Joaquín García-Quirós Rodríguez

Mr. Luis Solera Gutiérrez

Mr. Juan-Miguel Villar Mir

Board of directors

chairmanship second deputy chairmanship

ohL internationaL construction

economic and financiaL GeneraL

manaGement

ohLindustriaL

ohL domestic construction

ohLconcessions

ohL environment inima

corporate GeneraL manaGement

first deputy chairmanship

Corporate Areas Operating Areas

internaL audit manaGement

LeGaL services manaGement

nominatinG and compensation

committee

audit and compLiance committee

GeneraL sharehoLders meetinG

Governance Bodies

Board secretary

ohL deveLopment

11


2008

Management Committee

The Management Team is complemented by the Management Committee, which has the following

composition:

Roles and responsibilities:

• Study and propose business stategy for the Group in the medium to long term.

• Assist the President in elaborating proposals for the Board of Directors regarding long term plans, annual

budgets, investment programs and basic organic structure.

• Analyze and define expansion and development policies, as well as actions for new lines of business or new

geographic areas.

• Control the Group’s general progress and activities, and define corrective measures, if necessary.

• Monitor for the maintenance of the Group’s key client and shareholder relationships.

• Establish guidelines to potentiate the organization’s values and the fulfilment of the standards for good

business conduct.

• Know and control the execution of plans, programs, forecasts, budgets and the financial state of the

company.

• Analyze the evolution of projects obtained and the state of the job portfolio, and review commercial activity,

delegating actions to be taken.

• Study and inform about long term plans, investment programs and disinvestments as well as the annual

budget.

• Define human resource policies and study and inform about modifications in the employee base and

compensation conditions.

• Study and inform about the company’s organic structure and functioning.

• Approve the standards for internal activity.

• Facilitate information about the activities of each member.

• Assist the President with issues about which he solicits the Committee’s criteria.

• Be familiar with the quarterly progress of the investments presented by the President of the Investors

Committee.

President Mr. Juan-Miguel Villar Mir

Members Mr. José Antonio Fernández Eléjaga

Mr. Luis García-Linares García

Mr. Tomas García Madrid

Mr. Francisco Marín Andrés


Mr. José Antonio Membiela Martínez

Mr. Andrés Pan de Soraluce Muguiro

Mr. Juan Luis Osuna Gómez

Mr. Gonzalo San Cristóbal Tierra


Mr. José María del Cuvillo Pemán

12

>> OHL Group Activities

Fourth Zaragoza Belt. Spain.

13


2008INDEX

OHL GroupActivities

OHL GROUP REPORT



Domestic Construction 14

International Construction 26

Industrial 37

Concessions 40

Environment 46

Development 49



RDI 67

14


DOMESTIC CONSTRUCTIONIn 2008, following eleven consecutive years of growth, the construction sector suffered

an important regression of 5.1% in its activity, with production at around 193.280

Billion Euros, equivalent to 17.6% of the national GDP and 10.6% GVA (Gross Value

Added).

Despite this unfavourable scenario, it is convenient to highlight that the civil works

subsector experienced 4.5% growth, compared with the 5.5% it reached in 2007.

Conversely, the rest of the subsectors registered negative numbers in their evolution;

concretely, the residential building subsector experienced the highest contraction,

13.5%, a number that contrasts with the 4% progress it had registered in the previous

period.

In 2008, public bids rounded out at 40 Billion Euros, with a slight decrease of 1.3%,

with respect to 2007.

Construction also had negative figures in terms of employment, with an elimination

of nearly 300,000 jobs, situating employment in the sector at the end of de 2008 at

2,404,200 workers, close to 12% of the total employed Spanish population.

Despite the unfavourable data from the 2008 period, the construction sector

maintains its relevance in the Spanish economy through its important carry over

effects, both in terms of employment as well as in terms of activity. This way, in

the five year period from 2003-2007, construction contributed to Spain’s economic

growth with 27%; further, in the 1997-2007 period, of the 45.4% GDP, 10.6 points are

derived from investment in construction, and of them, 5.7 percentage points came

from investment in real estate.

OHL Domestic Construction Division is structured along three business lines:

• Domestic Civil Works

• Domestic Building

• Urban Services and Infrastructures

In the paragraphs that follow, a market analysis for each of OHL’s business lines is

carried out, indicating the most relevant activity in 2008, as well as predictions for

the future.

In 2008, Civil Works grew by 4.5%, compared

to the 5.1% general

regression in the

construction industry

15


2008

Domestic Civil Works

Market and Strategy

Of the total volume of public works brought up for contest in Spain during 2008,

which exceeded 39.812 Billion Euros, the civil works subsector, with 70.6% of this

amount, continues to be the driver of this activity. Bids for projects increased by 1%

compared to volume in 2007, situating the figure at 28.106 Billion Euros.

Transportation infrastructures with 19.206 billion Euros, concentrated more than two

thirds of their bid parts in civil works; concretely, 68.3%. Urbanization projects took

second place at 4.812 Billion Euros, and finally, hydraulic projects, were situated at

3.624 Billion Euros.

The primary administrations promoting civil works were the following:

• The Central Administration was the most active, offering public bids for a total

amount of 17.302 Billion Euros (43.5% of total licitations), representing 6% more

than the previous year.

• The Autonomous administrations offered 13.033 Billion Euros in bids, an amount

practically equivalent to the 2007 amount and which implies 32.7% of the total

public bid activity promoted in 2008.

• Finally, the local and provincial administrations released to contest bids for

projects valued at 9.476 Billion Euros, with a 13.4% decrease with respect to

2007 and representing 23.8% of total 2008 licitations.

Construction of the South Dike. Port of Barcelona. Spain.

O-Eixo Viaduct, for the Boqueixon-Santiago de Compostela High Speed Train Line. Spain.

16


The management carried out by the Ministry of Development should be highlighted,

with 14.623 Billion Euros in projects brought up for bid, 20.6% more than the 2007

volume. Its most important activity was highway projects, whose licitations by the

Highway General Management Division were at 3.870 Billion Euros. Meanwhile,

those projects promoted by ADIF, a public business entity charged with, among other

activities, the high speed railway network, grew 26.5%, up to 4.679 Billion Euros,

and the bidding amount from the General Railway Management was maintained at

865.5 Million Euros.

In 2008, the OHL Group’s Domestic Civil Works area reached a business figure of

1.019 Billion Euros, an amount that converted this activity into the most relevant

for the Domestic Construction Division and for the Group, by generating 57% of the

division’s production and 25.4% of OHL’s total business.

New hiring for projects in civil works reached 620.5 Million Euros, reflecting a volume

that situates this activity’s portfolio at 2.304 Billion Euros through December 31, 2008,

and guaranteeing more than 25 months of production.

This portfolio volume and the investment previsions contemplated in the government’s

Strategic Plan for Infrastructures and Transportation guarantee the sustainability of

revenue for OHL’s civil works area throughout 2009.

Relevant Activities

The sales figures for the OHL Group’s Domestic Civil Works division in the year 2008

contributed significantly to the production obtained. Among others, the following

projects should be highlighted:

• Conduction of water to Llanura Manchega (Cuenca)

• Railway Móstoles-Navalcarnero (Madrid)

• Soto del Real high speed rail tunnel (Madrid)

• Boqueixón-Santiago high speed rail underground (La Coruña)

• Cantábrico Divided Highway, A-8, Barreiros-Reinante stretch (Lugo)

• A-50 Divided Highway, San Pedro del Arroyo-Chaherrero stretch (Ávila)

• Mediterráneo Divided Highway, A-7, Ronda Oeste de Málaga

• UTE (Temporary Union of Companies). Torres Port Dike (Gijón)

• UTE. Arlabán-Eskoriatza Divided Highway(Guipúzcoa)

• UTE. High Speed Railway at La Robla-Pajares Stretch (León)

• Fourth Zaragoza Belt (Zaragoza)

• UTE. Langosteira Port (La Coruña)

• Eastern Airplane Parking Platform. Phase I. Barcelona Airport

Viaduct of the Barreiros-Reinante Stretch of the Cantábrico Divided Highway.Lugo, Spain.

Punta Langosteira Port Projects in La Coruña, Spain.

Expansion of El Musel Port. Gijón, Spain.

17


2008

Domestic Civil Works. OHL Group 2008 Principal Project Awards

Typology Project Amount(Thousands €)

Location Client

Highways, Divided Highways and Expressways

Divided Highway GR-43. Stretch: Pinos Puente-Atarfe (Link to futura A-44) 75,769 Granada

Ministry of Development - D. Gral. Highways

International Gibraltar Airport Highway and Tunnel Access 35,378 Gibraltar Government of Gibraltar

Lane for buses and vehicles A.O. (high occupation) on the C-58 34,564 Barcelona Generalitat de Catalunya - Tabasa

Infrastructure Railway work L9 Barcelona Metro, Stretch I 110,800 Barcelona

Generalitat de Catalunya – Railway Infrastructure

Zamora-Lubián Stretch. Substation La Hiniesta-Perilla de Castro 46,286 Zamora Ministry of Development - SEITT

L1, Metro (underground) Ligero Granada 19,255 GranadaJunta Andalucía - G. Railway. Andalucía

Decoupling of the Fanderia-Oiartzun Stretch 18,072 Guipúzcoa C.A. País Vasco - Euskal Trenbides

Talus conditionning. High speed railway Mad-Zar-Bar-F.Fra. S. Vicenç dels Horts-Sants 11,361 Barcelona Ministry of Development - ADIF

Road and Treatment Plan 2009-2010 period Lot 1 Madrid 10,818 Madrid Ministry of Development - ADIF

Hydraulic Works Burdalo Dam. Escurial municipality and others 20,514 Cáceres M. Environment - D. Gral. Water

Sector VIII Modernization and part of Sector IX Flumen Canal 12,741 Huesca C.A. Aragón - SIRASA

ETAP head, network of supply to Llanura Manchega F I, Phase 1 11,911 Cuenca M. Environment - D. Gral. Water

Transformation of Yaldo River zone to irrigable land 6,895 La Rioja Regantes Community Yalde Valley

Maritime Projects Adosado Wharf Expansion, 2nd Phase Barcelona Port 31,651 Barcelona

M. Development – Barcelona Port Authority

Des. Exterior Isla Verde, 3rd Phase, 4th act. Esplanade expansion 8,317 Cádiz

M. Development - Bahía Algeciras Port Authority

Dredging recuperation Conil Port 5,492 Cádiz J. de Andalucía - E.P. Andalucian Ports

Quay for solid Bulks Shelter Dike Ferrol Port 5,906 La Coruña Isolux Ingeniería, S.A.

Other Civil Works East Platform Airplane Parking Phase I 18,094 Barcelona M. Development - Aena

Majadahonda Wastewater treatment plant 7,748 Madrid C.A. Madrid - Isabel II Channel

Installation and equipment in galleries Málaga Airport 5,776 Málaga M. Development - Aena

Southwest Network Reuse of EDAR waters 5,702 Madrid M. Environment - Cuenca del Tajo

18


OHL/Domestic Civil Works 2008. Sales, hiring and portfolio. Millions of Euros.

Average size of Jobs valued above 600,000 Euros.In Millions of Euros

Domestic Building

Market and Strategy

According to activity indicators, the construction sector ended 2008 with a 5.3%

decline in investment with respect to 2007. This behaviour, worse in all respects than

that of the entire Euro zone, was due principally to the bursting of the real estate

market bubble, the collapse of the housing market; in other words, of residential

building, which represents an order of 50% of the total investment in construction.

Data 2005 2006 2007 2008

Sales 741.1 1,027.0 1,113.4 1,019.4

Hiring 710.0 582.0 1,010.5 620.5

Portfolio 2,116.3 2,019.0 2,314.1 2,288.80

500

1,000

1,500

2,000

2,500

Cartera

Hiring

Ventas

2008200720062005

Sales

Portfolio0

500

1,000

1,500

2,000

2,500

Cartera

Hiring

Ventas

2008200720062005

Sales

Portfolio

0

3

6

9

12

15

2008200720062005

14.6

12.6

7.9

10.9

27%

Highways

Railways

Maritime Projects

Hydraulic Projects

Other civil works

12%

30%

18%

13%

Sales by activity

OHL/Domestic Civil Works 2008

19


2008

The number of approved projects and licenses given fell by more than 50% with

respect to the year prior, and the decrease in investment in residential construction

reached 10% quotas. Some developments continue but they have slowed down due

to severe financial difficulties.

It can be predicted that this correction will be a long process, as there are still a high

level of new homes that need to enter the market, increasing the enormous existing

stock; and further, neither the downward pressure of prices nor the policies that are

to be implemented to facilitate mortgage credit and to activate the rental market

allow for optimism.

The construction crisis in Spain will be long and will be accentuated in 2009, year in

which the volume of residential construction will exceed 150,000 homes and of them,

if expectations are fulfilled, at least a third will be public sector promotions.

Taking all of this into account, and although during 2008, non-residential building

experienced a slight improvement, due to an important fall in the office market

segment and all that represents the private sector, as well as a very strong pressure

on prices provoked by strong competition among companies, estimations for 2009

predict a 10% fall in total construction investment, a drop that can reach 25% for

residential building , and slightly negative for the non-residential market.

These predictions are supported, nonetheless, by an enormous investment effort

by the Public Administrations, mostly in civil works, which will mark and define the

depth, repercussion, scenario and rate of recuperation.

The consumption of cement registered for the first time in 2008, after many years,

a negative evolution, with an annual regression that could exceed 15%, a fall in

percentage which elevates to 24% for all construction industry materials.

However, the most dramatic negative indicator

of the construction sector is the loss of jobs,

which is being produced at a very noticeable

rhythm. In 2008, nearly 300,000 jobs were

lost, according to employment statistics and

data regarding Social Security affiliation.

Resulting from this cause and effect scenario

is the large the group of companies, that are

starting to be important real estate developers

and construction firms, that are soliciting voluntary contests from creditors as they

cannot fulfil their payment obligations.

Canal Theatre Hall of Spectators. Madrid. Spain.

(right). Arroyo de la Encomienda

Education Centre. Valladolid. Spain (left).

20


At OHL, with minimal exposition to residential building from which the company

has been departing progressively in the last years, until representing only 18% of

our Domestic Edification portfolio, the impact of the crisis is much less than in other

companies within the sector, and its effects, which translate into a moderate size

adjustment, due also to the conservative attitude in relationships with private clients,

has barely had an effect on our company.

In this environment, and with evident financial strength, the policies adopted should

be looked at more closely: prudency in the recognition of executed projects; strict

rules in the sales documentation, and overall the materialization of payment; strict

control over direct costs and structures; rigorous accounting procedures; and in the

commercial and hiring area, a radical focus towards public non-residential edification

with high added value, which requires technical competence where singularity is a

factor that moderates competitiveness.

The company was awarded 289.4 Million Euros in new projects, during a year in which

there has been a very notable cut in project spending by the Public Administrations.

These contracts have allowed Domestic Building to conclude 2008 with a portfolio

of requests equivalent to 852 Million Euros, a volume equivalent to 16 months of

production. The prediction for 2009 production is at 567 Million Euros.

Of this portfolio, 83.6% belongs to the Public Sector and 16.4% belongs to the

Private Sector. Regarding project types, 33% correspond to hospitals; 36% to large

administrative buildings; 18% to residential edification, and the remaining 13%,

to other projects (sports, leisure, industrial, etc.). This breakdown allows for a

clear appreciation of the fall in the housing market and of the entire private sector

market.

In the area of concessions –PPP projects –, there are different very important actions

Water Tower. Zaragoza. Spain.

OHL has progressively

left residential building,

which only represents 18%

of the Domestic Building

portfolio

Estremera Penitentiary Centre in Madrid. Spain.

Mahon Hospital. Menorca. Balearic Islands. Spain.

21


2008

underway and we expect that in 2009 these will take fruit and continueconsolidating

and supporting the Portfolio with significant weight. Functioning fully and to complete

client satisfaction are the los Mossos de Escuadra police stations and the Southeast

Hospital (Madrid); Barcelona’s City of Justice, which once investment is finalized,

will be in the process of transfer and occupation. Additionally, the construction of

Burgos Hospital continues at a good rhythm, as does Barcelona’s Hotel Vela, which

will be inaugurated at the end of this year.

The Facilities Management area, through the companies Astral and Ingesan, begins

its third year of with high growth rates, superior to 20% interannual, and a 110 million

Euro portfolio of requests. Highlighted among this year’s new clients are the Madrid

Metro and the Juan Canalejo Hospital Complex in La Coruña.

Relevant Activities

In the area of hospitals, Mahón Hospital of the Balearic Government Health Council

in Menorca was inaugurated (40 Million Euros) and the construction work on the

Mar Menor Hospital (Murcia) continues at a good pace, as do the 12 de Octubre

Polyclinic and the San Carlos Clinic, both in Madrid, as well as Fuerteventura and

Elda Hospitals, among others.

Among the cultural projects completed in 2008, the following should be highlighted:

IODACC (63.6 Million Euros), Temporary and Permanent Oscar Domínguez Exposition

Centre and Public Library for the Cabildo Insular of Tenerife, and the Canal Theatres

(45.5 Million Euros), for the Autonomous Community of Madrid. Both projects are

characterized by their great detail and technical difficulty, and for having been

designed by world class architects. Also worth pointing out, in the area of education,

is the R+D Building (14 Million Euros) at the University of Zaragoza.

Gran Hotel Palacio de Isora. Tenerife Island. Spain.

University of Zaragoza R+D Building. Spain.

In their third year, Astral and Ingesan registered 20% annual growth rates in facilities management

22


In the tourism sector, the Gran Hotel Palacio de Isora (86 Million Euros), built by the

Meliá Group in Southern Tenerife, began operating in the summer. It has also been

the domestic building project with highest production in 2008.

Finally, the contribution to Expo Zaragoza 2008, where OHL built the Water Tower

(47 Million Euros) and the Mexico Pavilion are worth noting. There is no doubt that

the first was the Expo’s Icon; a singular and emblematic project of the Expo; which

stood out as a model reference and highlight for the entire exhibition site, as the most

widely recognized and visible project of the Expo. At 80m high and with a horizontal

section in the shape of a water drop, its technical difficulty lied in the steel and crystal

framework that defines the skin of a great interior hole which displayed the exposition

“Water for Life,” with spectacular content related to water, nature and culture.

Domestic Building. Principal OHL Group Awards in 2008 Millions of Euros

Project Location Client Amount

Bilbao Vizcaya Airport Terminal Building Vizcaya M.F. AENA 26.5

Valle Romano Resort (Estepona) Málaga La Kutxa 23.2

Fat Institute Headquartes Sevilla CSIC 18.7

Sana Tower (Tarrasa) Barcelona Tarrasa City Hall 17.4

258 VPO Santa Adela Granada Granada City Hall 16.8

Office Building on Pº. Recoletos Madrid Inmob. Colonial 14.2

New Iguzzini Headquarters Barcelona Iguzzini 12.3

School of Physics MadridComplutense University 12.1

School of Education Alicante Alicante University 8.9

Edificio C1 y D1 Bon Pastor Barcelona Barcelona City Hall 8.9

OHL/Domestic Building. 2008 Portfolio Structure by Activity (above) and by type of client (below). Total: 852 Million Euros

36%

Large buildings

Hospitals

Residential

Rest

13%

33%

18%

16.4%

Private

Public

83.6%

23


2008

Urban and Infrastructure Services

Market and Strategy

The conservation and maintenance strategy of the Urban and Infrastructure Services

have experimented great growth in the last years, especially if diverse particularities

of this business are taken into account, such as the atomization of contracts

and eminently local contracts, which have contributed to extremely aggressive

competition, with an increasingly noticeable need to reduce costs, improve efficiency

and increase productivity.

For these reasons, the Urban and Infrastructure Service business line adapted its

organization to the markets demands, reallocating funds, fostering more autonomy

and increasing competitiveness.

For this, the company has organized segments by activity through specialized

companies:

Pacsa Urban and Natural Environment Services is the company that leads this

activity and counts on the support of Irena as a subsidiary in environmental and

landscaping restoration.

Elsan, together with Oshga, is dedicated to infrastructure maintenance activities,

circulation routes, airports and gas.

This reorganization, in addition to increasing efficiency and productivity levels,

projects towards clients a sharper image of specialization.

Relevant Activities

During 2008, Urban and Natural Environment Services, led by Pacsa, developed its

activity the maintainence of urban areas, urbanization and remodelling projects,

gardening and urban furniture equipping.

Also, through Irena, the Service develops contracts related to the natural environment,

such as landscape restoration, maintenance and cleaning of rain waters, coasts and

dams, among others.

Urban Services and Infrastructures adapted their organization to meet market’s very automated and competitive demands

24


Road Services, with Elsan as the lead company, focuses its activity on Airport

Infrastructure maintenance, construction of roads, and pavement reinforcement

and rehabilitation.

Integral Conservations, also with Elsan as leader, develops its activities in the areas

of conservation, maintenance and winter highway maintenance, and roads across

Spain, as well as the construction and maintenance of gas stations and commercial

areas along roads.

Gas Services develops its activity throughout various parts of Spain through Elsan and

Oshga, both by obtaining clients (new members) as well as through the construction

of networks, setbacks, connections and domestic and industrial installations.

The Urban and Infrastructure Services business line provided the OHL Group with

sales of 136 Million Euros in 2008, a figure slightly lower than 2007, as a result of

the closing of the edification business line.

However, projects awarded reached 146 Million Euros, representing 15% more than

the amount reached in the previous year.

The Urban and Infrastructure

services business line

reached sales of 136 Million Euros in 2008

Evolution of Sales and HiringMillions of Euros

Data 2003 2004 2005 2006 2007 2008

Sales 119.5 132.0 137.5 155.8 170.6 136.0

Hiring 127.8 128.8 156.3 157.0 127.0 146.0

0

20

40

60

80

100

120

140

160

180

Hiring

Sales

200820072006200520042003

25


2008

Urban Services and Infrastructures. Production distribution in 2008.Total: 136 Million Euros

Urban Services and Infrastructures. Distribution by the project’s clients hired.Total: 146 Million Euros

Urban Services. Principal activities in 2008 Million Euros

Project Client Amount

Conservation of pavements Madrid City Hall 20

Conservation of Cleaning of Madrid’s.Zones I and II Isabel II Canal 11

Collectors Network C/ Alcalá (Madrid) Isabel II Canal 4

Álava Penitentiary Center Bases SIEP - M. of Interior 9

Colonia Ciudad de los Ángeles EMVS - Madrid City Hall 4

LAV Maintenance Madrid-Málaga ADIF - M. of Development 2

Road Services. Principal activities in 2008


A-1 Pavement rehabilitation OHL Concessions 9

A-3 Pavement rehabilitation Ministry of Development 8

Barajas Airport Conservation AENA 8

El Molar Variant Ministry of Development 8

Integral Conservations. Principal activities in 2008


Highway Conservation. Northern Zone. Madrid Community of Madrid 3

Highway Conservation. Northern Zone. Valencia Generalitat Valenciana 7

Conservation of A-8 in Asturias Ministry of Development 4

Las Tablas Service Station Disa Peninsula, S.L. 2

Montico Golf Service Station Disa Peninsula, S.L. 1

Integral Conservations. Principal activities in 2008


Gasification of Cataluña y Levante Gas Natural 21

Gasification of Cantabria y Galicia Gas Natural 10

Gasification of Madrid Gas Natural 3

11%

Isabel II Canal

Autonomic Admon.

Other City Halls

Madrid City Hall

Private

Central Admon.

9%

3%

56%

14%

7%

20%

Road Services

Urban Services

Integral Conservations

Gas Services

35%20%

25%

26


INTERNATIONAL CONSTRUCTION

Market and Strategy

In 2008, OHL’s International Construction Division consolidated its expansion into

new markets, with the the vocation of permanence always dominating. This policy

is guaranteed by the 63.92% growth in its portfolio in the short term with respect to

the year prior and due to the fact that the company won of a total of 46 projects in

the international market during the period.

Fruit of these policies and its brilliant results is OHL’s excellent position in the ranking

of international contractors published by the prestigious magazine Engineering News

Record (ENR), in which the Group has continued to escalate positions and has come

to occupy Ranking number 28 globally.

United States and Canada

In 2008, the Group acquired a percentage of control of Arellano Construction and

Stride Constructors in the State of Florida. With these new alliances, OHL consolidates

its presence in the United States and completes its portfolio of activities and services

in this market, including the edification of hospitals, a sector in which Arellano

Construction specializes. This company complements the activities of the two

subsidiaries acquired in 2006: Community Asphalt, in transportation infrastructure,

and Tower-OHL Group, in edification.

With the experience, and financial and technical support of OHL’s technical group,

its American companies have been able to confront new challenges and obtain

projects with innovative financial models or in new areas of activity. As such, the

US-1 contracts, valued at US$111 Million, and I-95, valued at US$198 Million, are the

first examples of projects promoted in Florida under a financing model similar to the

“German method,” meaning that the total payment for the amount due is carried

out in phases.

US-1 Highway, in Florida. United States. (left). Mount Sinai Hospital. Miami Beach. United States. (right).

In 2008, OHL International

Construction was awarded

46 projects internationally

and has increased

63.92% its short term

portfolio

27


2008

US-1 is also the first project in the United States awarded to a private company

through an “unsolicited proposal.”

Added to these important and innovative projects, are the awarding of the First

Phase of the Orange Line, for US$360 Million, converting OHL into the first Spanish

company to develop a railway project in the United States. The contract consists of

the construction of a section of the Orange Line which will lengthen the Miami metro

(Metrorail) towards Miami International Airport.

More than 1,000 employees and eight offices in the State of Florida situate OHL

among one of the largest local companies recognized in the sector. This recognition

is reflected in the awards that the company’s subsidiaries have received. Florida

Transportation gave Community Asphalt the award that distinguishes the company

as the #1 FDOT (Florida Department of Transportation) subcontractor responsible for

the creation of civil infrastructures in the State.

Tower, on the other hand, was awarded Best Industrial Building for International

Corporate Park, as well the Best Multiuse Building for the construction of City Palms,

given by the prestigious association, ABC (Associated Builders and Contractors).

Special mention should also be given to Miami Green Building project, which was

developed by Arellano Construction and is the first building classified as “Green”

in Miami.

Together with the activities of its affiliates, OHL has continued its commercial activity

in diverse States throughout the U.S. market, as well as in its neighbour country,

Canada, where the company has been making important strides in the hospital sector

in the provinces of Quebec and Ontario. The strategic interest of OHL in Canada was

consolidated, at the end of 2008, by establishing an affiliate to more closely follow

development in market.

Work on the Taunton River (Boston) for the construction of the first desalination plant awarded through a Concession in

the United States. (left). Miami Green Building, built by Arellano

Construction, one of OHL’s three subsidiaries in Florida.

United States. (right).

28


Central and Eastern Europe

The Czech Republic is one of the principal countries that contribute to the OHL Group’s

sales and employment. OHL entered the market with the acquisition of the Czech

construction Group ŽPSV, composed of 20 companies, among which the following

are highlighted:

- ŽPSV: OHL has 89.94% participation. This company is dedicated to the

prefabrication of concrete blocks, especially railroad crossings, of which OHL is

the only fabricating company in the Czech Republic.

- OHL ŽS: The largest company in the Czech Group and one of the country’s principal

construction companies, with significant history in railway work. Previously

denominated as ZS Berno, OHL’s participation is at 88%.

- ŽPSV Cana: Slovak prefabrication company and the only developer of railroad

crossings in Slovakia. The OHL Group represents 53.01% of its capital.

- ŽS Bratislava: Slovak construction company, with a tradition in railway building

and now beginning building services. OHL has 68.34% participation.

- ŽPSV Varna: Bulgarian prefabrication company and fabricator of railroad

crossways. OHL Group has 89.94% of the company.

Subsequent to the acquisition of the Czech Group, the OHL Central Europe subsidiary

was created as the head of this business group, with headquarters and central offices

in Prague, the capital of the Czech Republic.

In December 2005, through its OHL ZS subsidiary, the OHL Group made a very

important step in the Czech railway market, by entering as a shareholder of the

Through its affiliate TSS, OHL ŽS dominates the market maintaining railway lines in the Czech Republic. In the photo, a stretch of the Krasikov-Ceska railway.

OHL ŽS is the first Czech

company by international

business, with subsidiaries in

Slovakia, Bulgaria and Bosnia

29


2008

company, Tratová Strojní Spolecnost (TSS), with 49%, in the context of the process

of privatization carried out by the public company CD (Czech Railways). With this

participation, OHL has achieved a dominant position in the maintenance and

conservation market of the Czech Republic’s railway lines, since República TSS is the

company that has the most resources, both human and machines, for modernization

and reparation and maintenance of the Czech Railways, activity in which it boasts

more than 55 years of experience.

The excellent evolution of results during recent periods and the expectations for

growth are an important guarantee for the OHL Group in Central and Eastern Europe.

OHL Central Europe’s turnover during the 2008 period was at 500 Million Euros,

representing 35% and 12.5%, respectively, of OHL’s total business, and representing

the Group’s leading international market.

OHL’s effort and work since its entrance into this Czech business group has been

compensated in the expansion and diversification of its Portfolio in the region. Since

December 31, 2003, figures have increased from 211.6 Million Euros, 73% in railway

work, to 600 Million Euros, 35% in railway work, through December 31, 2008.

This important growth has been possible due to reinforcement in the Czech market and

international growth. OHL ZS is the first Czech construction company by international

business volume, with subsidiary companies in Slovakia, Bulgaria and Bosnia and

Herzegovina, with construction contracts in seven countries: Czech Republic, Slovak

Republic, Bulgaria, Hungary, Bosnia, Montenegro and Azerbaijan.

Further, during 2008, necessary action was initiated for the entrance into new

markets, such as Romania, Hungary, Ukraine and Russia, with the goal of extending

OHL’s active presence in Central Europe and the Orient.

Among the principal adjudications in the year 2008, the following can be

highlighted:

Railway projects: optimization of the Strabo–Planar Mariánských Lázní railway

stretch (Czech Republic), with a 158.4 Million Euro budget; modernization of the

Zilina–Krasno nad Kysucou railway line (Slovakia), with a 153.6 Million Euro budget

and reconstruction of the Mezötúr–Gyoma railway stretch (Hungary), with an 83.9

Million Euro budget.

OHL Central Europe’s turnover was 500 Million Euros in 2008, situating this region as the leading international market for the OHL Group

30


Road projects: D47 Highway, Bohumín–Polish Border Stretch (Czech Republic), with

a 114.5 Million Euro budget.

Edification: Expansion of the Bohunice de Brno University Campus, Phase E (Czech

Republic), with a 23.7 Million Euro Budget.

Environmental Work: Expansion of the potable water network and the Ruse City

Sewage System (Bulgaria), with a 13.5 Million Euro budget.

Turkey

The construction of the high velocity train between Ankara and Istanbul, completed

with total success in 2008 by the UTE (Temporary Union of Companies) led by OHL, is

one of the most complex railways built by a Spanish construction company outsider

of Spain. During 2008, the client (Turkish State Railways) began the provisional

reception of the project, which is expected to conclude during 2009.

In addition, the work at the east water treatment plant in Konya

experienced significant progress during 2008, with its completion expected in the

first quarter of 2009.

OHL International Construction has a special vocation of permanence in this

competitive market, in which it continues to strive for important civil works projects,

Ankara-Istanbul High Speed Train, in Turkey, and one of the most complex railway projects completed by OHL or any Spanish construction company internationally.

In the photos, the Turkish Prime Minister’s Inaugural Speech, Tayyip Erdogan (Left), and details of the first trip.

31


2008

currently in the licitation phase. The development program of the Turkish Railway

network continues to be a priority objective.

The Highway Concession program, announced during 2008, is also being analyzed

with special interest.

Middle East

OHL International Construction developed intense commercial activity during the last

two years in the Middle East, participating in processes, both in prequalification as

well as licitations, of important projects, although always with very selective criteria

regarding the selection of operations in which it becomes involved.

This activity gave its first fruits at the beginning of 2008, when the UTE led by OHL

was awarded the contract for the Sidra Medical and Research Centre in Qatar (Doha),

one of the most technologically advanced hospitals in the world. This contract, with

a budget of 1.645 Billion Euros, represents the largest project in OHL’s history. The

project included the design, construction, equipment and maintenance of a building

complex with a total surface area of 326,000 m². It includes a hospital, an external

clinic, a General Services building, a parking lot and a Mosque. It will be a first class

health, research and education centre of reference in the Persian Golf, both for

international and local professionals and patients.

The Middle East is a market of special interest for the OHL Group, whose objective

is to consolidate an active and permanent participation in this region in the next

years as an asset, and permanent participant in developing all types of infrastructure

projects.

North Africa

OHL’s active presence in Algeria in the last years, materialized in the construction of

two very relevant projects including the Highway Bypass in Algeria and the railway

line between Annaba and Ramdane Djamel, both underway and expected to reach

maximum production limits in 2009. This was seen extended in 2008 by the awarding

of the constriction contract for the Orán Convention Centre by Sonatrach, the largest

Algerian public company, which manages the country’s gas and petroleum.

This extremely important project, with a budget exceeding 580 Million Euros, was

signed at the beginning of 2008 under a fast track scenario and should be completed

for use in April 2010, for the 16th International Congress and Exhibition on Liquefied

Natural Gas, organized by Sonatrach The design was developed from the first sketch

OHL builds Sidra Hospital, in Qatar, the largest Project in the Group’s history and one of the most advanced in the world

32


by OHL, and contains a Palace for Congresses, an Exhibition Palace, a five star hotel

and an underground parking lot and will be a true model icon, both for the client as

well as for the city of Orán.

OHL is also studying with great interest opportunities

that are being presented in Libia, as a result of the

opening of this market, which has been consolidating

in the last years

Latin America

OHL’s activity in the Latin American markets dates back to 1970 and has its origins

in Argentina. Since then, the Group’s presence is continuously reinforced from

the permanent delegations in various countries, in which the company carried out

large infrastructure and edification projects, with intense activity in Mexico, Chile,

Argentina, Peru and Ecuador.

Within the current global economic climate, Mexico stands out strategically in the

Latin American market. At the beginning of 2009, Felipe Calderón, Mexico’s President

presented the “National Agreement in Favor of the Family Economy and Employment

For Better Living,” which supports the acceleration of the National Infrastructure

Program, in such a way that in 2009 the country will have at its disposal a historic

budget of 31 Billion Euros for infrastructure construction.

It was during the 2008 period that the OHL Group’s participation has been most

notable in Mexico, where the company completed the construction of the Amozoc-

Perote Tollway. Its inauguration was held on November 12th with the presence of

Mexican President Felipe Calderón.

In the first semester of 2008, the first phase of construction of the Buenavista-

Cuautitlán underground train was completed. Its inauguration took place on June

10th at the Buenavista-Lechería stretch. In the second semester, the Cuautitlán

and Tultitlán Stations were completed and subsequently inaugurated in the first

week of January 2009, thereby completing 27 km of work and six stations. With a

transportation capacity of 2,224 passengers per train, this project benefits 4.8 Million

Mexicans, reducing travel time by 70%.

During 2008, OHL was awarded the public bid for the construction and concession of

the Elevated Bicentenary Viaduct, a project of great magnitude in the State of Mexico.

The first phase, which involves 23.5 km and reversible traffic, should be concluded

in 2010, the bicentenary year of Mexico’s independence and the centenary year of

OHL has expanded its presence in Algeria with

the award of the Orán Convention

Centre, with a budget reaching

580 million euros

The Orán Convention Centre project, in Algeria, is advancing at a good pace.

33


2008

OHL builds two of Mexico’s most symbolic projects: the Elevated Bicentenary Viaduct and the Exterior Mexiquense Circuit

the beginning of the Mexican Revolution. This first phase will include three lanes and

will link with the Circuito Exterior Mexiquense Highway (Phase III, Stretch I), which

the OHL Group is also administering and building.

The results reached with the execution and launch of the first phase of the Circuito

Exterior Mexiquense Highway allowed OHL to continue with the project in 2008,

beginning the construction of Phase II, at 7.5 km long, and of Phase III’s 10km long

Stretch I.

The construction of Puebla’s Libramiento Norte will begin in the near future, in

the capital of this Mexican state with the same name, at the A4 State Tollway, with

an approximate length of 31.5 km, awarded in February 2008. In Central America,

commercial activity is taking place in the following countries: Honduras, Costa Rica,

Panama and Belize.

In Chile, La Reina Military Hospital, the most important in Latin America, was

completed in 2008, as was the construction of piques and tunnels of Stretch

2 for the lengthening of Maipú Line 5 of the Santiago, Chile Metro and the

works of the secondary shaft that connects the Camino de las Frutas and the

Sector 2 of the Los Andes Highway (International Route 60Ch). Sector 1 of this

route continues in progress, and is expected to conclude in 2010. Additionally,

work has continued on the Coquimbo City Hospital and on the collector for the

cleaning of the Mapocho River, in Santiago, which are expected to be finalized

in 2009.

Additionally, at the beginning of the period in Chile, work on the Ministry of

Public Works institutional building began in the city of La Serena and the civil

work corresponding to Stretch 1 and inter-stations for the lengthening of Maipú

Line 5 of the Santiago Metro, began.

La Reina Military Hospital in Santiago, Chile, is considered

one of the largest and most advanced in Latin America.

34


In Ecuador, with presence since 1981, OHL has executed projects with high degrees

of technical complexity, as a company of reference in the construction of tunnels.

En 2008, the construction of the San Eduardo tunnels in the city of Guayaquil was

complete. This project consisted of the construction of unidirectional road tunnels,

with three lanes at 1.3 km in length each, converting them into the longest and largest

of the country. Thanks to this Project, the Guayaquil Construction Chamber awarded

OHL distinction as “Construction Company of the Year.”

In Argentina, OHL in recent years has been developing important edification projects,

especially in the area of social, health and safety infrastructure in the context of the

official policies implemented in this area by the successive governments.

One characteristic of these healthcare projects under execution is that they include

existing rehabilitation centres, implying very efficient organization which includes

adequate planning by stages. Currently, the New Burn Centre is being worked on,

together with progress in other functional areas, constituting the first renovation

phase of Córdoba Hospital and the construction of the High Complexity Medical

Institute (IMAC) in the Province of Córdoba, with a total surface area of 28,522 m²,

and 35 beds.

Also in the Province of Córdoba, and at an elevated execution level, the Misericordia

Hospital is being built, with a 10,000 m² surface area and 80 beds. The project is

expected to be finalized in May 2009. Also underway is the last phase of the group

of eight schools that were contracted within the plan for 43-schools and additional

equipment.

With permanent attention to quality in the jobs being realized, the first phase of

construction of the Héctor Quintana Children’s Hospital will be built in the first

months of 2009, in the Province of Jujuy, with a 13,100 m² surface area and 125

beds. Subsequently, the reformation of the current building will continue, within the

planned rehabilitation programs.

San Eduardo Tunnels. Ecuador. (left). Amozoc-Perote Highway. Mexico (right).

OHL International

Construction increases and

consolidates its international

presence yearly: In 2008, Canada, Qatar, Colombia and

Peru were incorporated

onto OHL’s country map

35


2008

In Peru, with the acquisition at the beginning of 2008 of Constructora TP, SAC

(previously C. Tizón P SAC), one of the most important in the country, OHL strongly

positions itself in the country, where it has previously executed various projects.

The Peruvian Construction market will grow at an important rate in the next few

years, due primarily to the existing infrastructure deficit on a national scale and to

the Government’s interest in correcting this deficit to achieve predicted levels of

economic growth for the country.

Currently, a stretch of road is being worked on in the Interoceánico Sur road corridor,

which will unite the Peruvian coast with Brazil, establishing a new road connection

between the Pacific and Atlantic Oceans, from which the project’s name was born.

The stretch under way is located in the lower rainforest of the Madre de Dios and

Cuzco departments, in the south of Peru, in an area with very complex and difficult

to access topography.

The OHL Group signed in February 2009 the contract for the concession of the Red

Vial 4, a 356 km stretch from Panamericana Norte between Pativilca and Trujillo. The

project includes the construction of the second road from Trujillo to the South.

It is clear that the diversification, the careful selection of markets, maintaining

healthy prudent principles, and the vocation of permanence in these countries, have

allowed OHL to obtain important contracts and to consolidate a portfolio of projects

that guarantees balanced growth in the future.

The President of Peru, Alán García, and of OHL, Juan-Miguel Villar

Mir, sign the concession contract for the Red Vial 4, on the North

Panamerican Route.

36


OHL/International Construction. Short Term Portfolio through 12/31/2008.

Country Millions of Euros %

MEXICO 169.55 6.5

ARGENTINA 13.02 0.5

ECUADOR 10.60 0.4

CHILE 49.88 1.9

TURKEY 13.12 0.5

ALGERIA 844.12 32.4

QATAR 608.97 23.3

CZECH REPUBLIC 409.94 15.7

SLOVAK REPUBLIC 22.95 0.9

HUNGARY 38.92 1.5

MONTENEGRO 3.60 0.1

BULGARIA 5.77 0.2

AZERBAIJAN 74.72 2.9

UNITED STATES 343.94 13.2

TOTAL 2,609.09 100.0

OHL/International Construction. Sales in 2008.

Country Millions of Euros %

MEXICO 88.20 6.2

ARGENTINA 17.29 1.2

ECUADOR 22.64 1.6

CHILE 136.35 9.5

TURKEY 0.04 0.0

ALGERIA 197.41 13.8

QATAR 63.02 4.4

CZECH REPUBLIC 498.04 34.9

SLOVAK REPUBLIC 23.49 1.60

HUNGARY 1.25 0.1

MONTENEGRO 6.33 0.4

BULGARIA 13.13 0.9

AZERBAIJAN 25.19 1.8

UNITED STATES 336.67 23.6

TOTAL 1,429.06 100.00

37


2008

INDUSTRIAL

Market and Strategy

OHL Industrial is the OHL Group’s youngest business division. Created at the

beginning of 2008, it introduced the Group into the engineering and construction

markets of industrial installations, approaching this new activity especially under

the modality of turnkey or EPC projects and of industrial concessions, with a clear

international vocation.

This new division began through the acquisition of four companies with ample

experience in the sector and that belonged to the former Ecolaire Group: Ecolaire

Spain, general industrial engineering; Projects and Systems (Prosisa) and Atmos

Española, specialized in engineering management of solids, and Chemtrol Projects

and Systems (Chepro), a reference in creating systems that fight fires.

In its first period of activity, in 2008, the division reached a turnover of 25.5 Million

Euros and an EBITDA of 1.6 Million.

Ecolaire Spain is the engineer of the specialized division for turnkey project

development in the industrial sector, although the company’s intense activity in the

areas of refinery, petrochemicals, energy and environment all stand out.

In 2008, the traditional industrial engineering market (refinery and petrochemicals)

suffered a progressive contraction, restricting itself to pure engineering contracts

(not turnkey) of small complexity. On the contrary, in the renewable energy sector,

construction of prefabricated thermo solar centres registered a rapid expansion,

driven by a favourable tariff system which will be maintained through mid-2009.

Ecolaire will concentrate its efforts on this sector.

Prosisa is an engineering firm specialized in projects managing solids to grains in

the most diverse areas: mines, quarries, open pits, cement, bone, metallurgy, cargo

ports and terminals, chemical and glass and steam power plants, among others.

Atmos Spain, on the other hand, is recognized in the mining and cement industry

for the accredited quality of its designs and fabrication of machinery and capital

goods. The company has exported to numerous countries, directly and through other

engineering firms.

OHL Industrial introduced the Group to the engineering market and the construction of turnkey plants

38


Finally, Chepro has consolidated into an

international engineering firm in area of

protection against fires, an activity in which

it has more than thirty years of experience.

The company specializes both in active as

well as passive protections, as well as in high

temperature textiles, thermal insulations that

can be dismantled, expansion joints and

fillers.

Relevant Activities

During 2008, Ecolaire Spain’s activity was principally based on the development of

pure engineering projects for its regular clients, including Cepsa, BP and CLH, and

its first activities as engineer for the OHL Group, participating in the Orán Convention

Centre Project, built by OHL. From its creation in 1976, Ecolaire has successfully

developed more than 120 projects in refinery, petrochemicals, fertilizer storage

systems and gas.

On the other hand, Prosisa has in its portfolio more than 200 projects executed in

the management of solids. During 2008, the company collaborated closely with OHL

Industrial in the elaboration of an offer for a phosphogypsum plant in Saudi Arabia

(Maad´en Project), and has also carried out projects in the Andean Steam Power Plant

(Chile), for the carbon discharge terminal in la Coruña (Spain; Medusa–Unión Fenosa

Project), for the new silicone line in the Sabon factory (Ferroatlántica), as well as the

technical advice on the wooden ribbons of the tunnel in Navalcarnero for OHL.

Chepro’s most relevant activity during 2008, in the area of active protection against

fires, took place internationally, with projects executed in Algeria, Chile, Egypt

and Qatar. In Qatar, OHL developed a system against fires for the the Masaiced

cogeneration plant. In the domestic market, the work by Cepsa, Acerinox, Endesa

and Petronor should be highlighted, in addition to the maintenance work at SABIC

Innovative Plastics, in Cartagena.

In the area of high temperature textiles and and firewalls, OHL has continued creation

and supply for numerous companies in the petrochemical and energy sectors, etc.,

as well as for maintenance and assembly companies.

Medusa, a Project developed in La Coruña as a carbon storage park.

39


2008

Atmos Spain’s most relevant activities in 2008 were centred on the supply of

capital goods to Lafarge and Cimpor, for their plants in Morocco and Mozambique,

respectively, and to Cementos Molins, in Spain. Further, the company is currently

supplying extractors for the Moroccan Group, OCP (Office Cherifien des Phosphates),

a leading global phosphate exporter.

OHL Industrial. Principal references for executed projects

Company Project Country Client

Ecolaire Spain Butadiene Plant in the Tabriz petrochemical complex.Biological Purification Plant in the La Plata Refinery. GLP SP2 Fire Station.High density polyethylene plant.Phenol cumene plant, in Huelva.Refrigeration Tower at the Castellón refinery.HDS Plant at the Algeciras refinery.

Irán

ArgentinaAlgeriaKuwaitSpainSpainSpain

Chagalesh

Repsol YPFSonatrachEquateErtisaBPCepsa

Prosisa Discharge, transportation and storage System for Zinc Minerals in Avilés Port.Carbon Storage Park in A Coruña.

SpainSpain

Asturiana de ZincUnión Fenosa

Chepro(systems against fires)

Refrigeration Cotter for Tanks, in Huelva.Cogeneration Plant North I, Nubaria I & II and Cairo II, in Cairo.Fuel storage park in Madeira. RFK detection system. Masaice Cogeneration Plant.

España

EgyptPortugalAlgeriaQatar

Ertisa

Initec EnergíaMASA-Dragados IndustrialSonatrach-CepsaIberinco

Atmos Metallic Plate Extractor Type ATM-5T for the discharge of clinker at the Cienfuegos Port.Four APRON Feeders for bauxita discharge systems.Three bulk feeders ATM-5TR, one extractor ATM-10T and an elyptic disc screen.Two ATM-D8 Extractors.

Cuba

Venezuela

MozambiqueMarroco

Holcim Group

CVG Venezuela

CimporOCP

40


OHL CONCESSIONS

Market and Strategy

2008 involved another period of growth for OHL Concessions. The subsidiary that

leads the Concessions division strengthened its position in the international ranking

of transportation concession companies in a significant way.

At the close of 2004, OHL Concessions had a total of 10 highway concessions that

amounted to 1,348 kilometres. Just four years later (through December 31, 2008),

the number of kilometres in concession grew to 4,401. These were managed by 22

companies. Included in this figure was the concession of the Red Vial Nº 4 in Peru,

awarded in December 2008, although the signing of the contract took place in

February 2009.

Consequently, the growth experienced in the last four years in this division is quite

notable: 227% kilometres in concession, 175% in the average annual daily traffic

volume and 120% in the number of subsidiaries. These figures, together with the

consolidation of the company in the rest of its business lines, have reinforced OHL

Concessions as one of the largest transportation infrastructure operators on a global

scale and have converted this division into the more important for the OHL Group,

representing in 2008, 55.9% of the OHL Group’s total EBITDA, 13.5% of the business

volume and 81% of the Group’s investment.

During 2008, the inauguration of new Infrastructures and the positive behaviour of the

concessionary companies with projects in operation and construction have permitted

maintaining the growth line in OHL Concessions´ principal economic parameters. As

a result, Sales grew by 24,5%, representing a total 542.4 Million Euros, while EBITDA

elevated to 339.9 Million, with a 7.2% increase.

0

100

200

300

400

500

600

EBITDA

Ebitda

200820072006

Sales

542.4

339.9333.4

253.5

435.5

317

OHL Concessions. Evolution of Sales and EBITDA. Million Euros

OHL Concessions integrates 22

companies that manage 4,401 kilometres of

Highway

41


2008

The long term Portfolio, in function of the consolidation criteria of the subsidiaries

and after the incorporation of new companies in Brazil and Mexico, was situated at

13.5% at the end of the period, at 50.425 Billion Euros, with 66.6% growth compared

to growth through December 31, 2007.

2008 Portfolio by country *

Country Thousands of Euros %

Argentina 776,572 1.6

Brazil 20,372,843 40.4

Chile 4,152,156 8.2

Spain 6,661,524 13.2

Mexico 18,462,316 36.6

Total 50,425,411 100.0

* This does not include the Autopista del Norte, S.A.C, concessionary company of the Red Vial Nº 4 in Peru, awarded in December 2008. Its constitution took place in the month of February 2009.

Highways managed by OHL Concessions

Highway/Company Length(Km)

OHLParticipation

(%)

Spain

Autovía M-45

Euroglosa 45 C.C.A. Madrid S.A. 8 100.0

Autopista M-12

Autopista Eje Aeropuertos C.E.S.A. 9 100.0

Autovía A-2 Tramo1

Autovía de Aragón Tramo 1, S.A. 56 95.0

Total 74 -

Argentina

Autopista Ezeiza-Cañuelas

AEC, S.A. 60 70.0

Total 60 -

Brazil

Autovias

Autovias, S.A. 316 60.0

Centrovias

Centrovias Sistemas Rodoviarios, S.A. 218 60.0

Intervias

Concessionária de Rodovias do Interior Paulista, S.A. 376 60.0

Vianorte

Vianorte, S.A 237 60.0

Rio de Janeiro a Espírito Santo

Autopista Fluminense, S.A. 320 60.0

Rest of the Group

Concessions

55.9%

44.1%

Rest of the Group

Concessions

86.5%

13.5%

Revenues

EBITDA

>>

42


Highways managed by OHL Concessions

Highway/Company Length(Km)

OHLParticipation

(%)

Belo Horizonte a São Paulo

Autopista Fernão Dias, S.A. 562 60.0

São Paulo a Curitiba

Autopista Régis Bittencourt , S.A. 402 60.0

Curitiba a Florianópolis

Autopista Litoral Sul, S.A. 382 60.0

Curitiba a Rio Grande do Sul

Autopista Planalto Sul, S.A. 413 60.0

Total 3,226 -

Chile

Autopista Los Libertadores

Autopista Los Libertadores, S.A. 119 75.0

Autopista del Sol

Autopista del Sol, S.A. 132 75.0

Autopista Los Andes

Autopista Los Andes, S.A. 92 100.0

Total 343 -

Mexico

Circuito Exterior Mexiquense (Fases I, II y III)

Concesionaria Mexiquense, S.A. de C.V. 110 87.0

Circuito Exterior Mexiquense (Fase IV)

Concesionaria Mexiquense, S.A. de C.V. 45

Viaducto Elevado Periférico Norte

Viaducto Bicentenario, S.A. de C.V. 32 100.0

Carretera Amozoc-Perote

Grupo Autopistas Nacionales, S.A. 123 55.0

Libramiento Norte de Puebla

Autovías Concesionadas OHL, S.A. de C.V. 32 100.0

Total 342

Peru

Red Vial Nº 4

Autopista del Norte, S.A.C.* 356 100.0

Total 356

TOTAL HIGHWAYS 4,401 -*Concessionary company launched in February, 2009.

The 2008 period brought satisfactory results in highways operated by concessionary

companies, with an average daily traffic increase of 7%.

>>

In 2008, the daily traffic

increase on OHL Concessions’ highways was

70%

43


2008

Traffic and revenue of highways by country and revenue

Country TrafficVar. 08/07

Revenue in local currency

Var. 08/07

Argentina -0.6% 14.2%

Brazil 11.2% 17.6%

Chile* 7.5% 15.3%

Spain -6.8% 2.7%

Mexico 18.0% 23.3%

*Traffic from Los Andes Highway is not included, as its first section was inaugurated in June 2008.

Railways managed by OHL Concessions

Length(Km)

OHLParticipation

Metro Ligero Pozuelo and Boadilla (Spain)

Metro Ligero Oeste, S.A. 22 51.0 %

Cercanías Móstoles-Navalcarnero (Spain)

Cercanías Móstoles-Navalcarnero, S.A. 15 100.0

During 2008, ligero metro lines ML2 and ML3, operated by Ligero Oeste Metro,

registered average growth in the number of daily passengers of 42.5%, reaching close

to seven million passengers per year.

The company, Cercanías Móstoles Navalcarnero, initiated the construction process

of these 14km railway infrastructures, in May 2008.

Airports managed by OHL Concessions

Infrastructures under concession

OHL Participation

Toluca International Airport (Mexico) Airport, complementary and commercial services

Administradora Mexiquense del Aeropuerto Internacional de Toluca, S.A.

32.8%

The Toluca International Airport, for the third consecutive year, experimented

a notable increase in activity, exceeding four million passengers annually.

Commercial Ports Managed by OHL Concessions

Surface Area(hectares)

OHLParticipation

Port of Alicante (Spain)

Terminales Marítimas del Sureste, S.A. 30 50.0%

Mexico’s Toluca International Airport exceeded Four Million annual passengers

44


The Chilean President, Michelle Bachelet, presided over the inauguration of the first section of the Los Andes Highway. To her left, Juan Osuna, Chief Executive Officer of OHL Concessions.

Marinas managed by OHL Concessions

Number of Moorings

OHL Participation

Zumaia Marina (Spain)

Marina Urola, S.A. 490 78.3%

Roda de Bará Marina (Spain)

Nova Dársena Esportiva de Bará, S.A. 647 50.0%

Torredembarra Marina (Spain)

Port Torredembarra, S.A. 795 24.0%

Tarragona Marina (Spain)

Nautic Tarragona, S.A. 441 25.0%

Relevant Activities

For OHL Concessions, one of the most relevant activities during the 2008 period was

constituted by the February 14 signing, between OHL Brazil and the Federal Brazilian

government, of the concession contracts for the administration and improvement of

5 highway lots belonging to the federal network, converting the Group into the largest

highway concession operator in Brazil, where it has a market quota of 25%, with 3,226

km. The signature of these contracts initiated an intense program of improvements in

road surfaces and pavements and the establishment of offices and control centres.

In Mexico, under the integral design scheme, construction, financing and subsequent

operation, two new road projects were incorporated into the OHL Concession

Portfolio: the 31.5 km long Puebla Libramiento Norte, with a total generated

investment of 134 Million Euros, and the Elevated Bicentenary Viaduct which,

with a 30 year concession, is structured in three phases, with a total expected

investment of 1,188 Million Euros.

In Peru, in December 2008, OHL Concessions was awarded the concession for

the Red Vial Nº 4 on the section between Pativilca and Trujillo. The contract was

signed in February, 2009.

In addition to the incorporation of transportation infrastructures in concession,

among the relevant acts of the last period are the closing of financing for projects

in investment phase and the inauguration of new infrastructures:

- In Mexico, for the Financing for Phases II and III of the Exterior Mexiquense Circuit,

Mexiquense Concessionary company signed a loan for 6 Billion Mexican pesos,

an amount equivalent to 375 Million Euros.

45


2008

- In Chile, the first section of the Los Andes Highway was inaugurated. It extends

from kilometre 105 on Route 5 North (Panamerican route) to the

Troncal Sur highway, reaching Viña del Mar and Valparaíso.

- In Mexico, the opening to traffic of the last stretch of the Amozoc-Perote Highway

took place on October 26th.

- In Spain, the new Roda de Bará Marina was inaugurated in the month of June

and will be managed by a company called Nova Dársena Esportiva de Barà.

Three months later, in Alicante, the container terminal of Terminales Marítimas

del Sureste was inaugurated, with a surface area of 146,000 m² and 75,000 m²

for storage of containers.

Once again this year, the awards and recognitions given to the company in the area

of Corporate Social Responsibility should be mentioned:

- In Brazil, OHL received the Volvo de Segurança no Trânsito Award from Vendas

e Marketing do Brazil (ADVB), as well as the Top Social Responsibility Award from

the Associação dos Dirigentes for the “Projeto Escola.”

- In Argentina, the Ezeiza-Cañuelas Highway received recognition from the

Garrahan Foundation for its recycled paper and plastic effort.

- In Chile, the Los Libertadores Highway was recognized as one of the entities with

the highest level of compliance with the Competitive Business Program (PEC),

whose objective is to control labour risk and occupational health.

- In Spain, the Aragón-Stretch 1 Concessionary Highway received recognition from

the Comandancia de la Guardia Civil for the conservation work that took place

along the Stretch in concession of A-2. For its part, Terminales Marítimas del

Sureste obtained in April the FOPA 2007 Award for work done on the expansion

of Alicante Port, highlighting the strict environmental control plan applied to the

project.

In addition to the signing of concession contracts of the five new federal highways in Brazil, OHL Concessions was awarded in 2008 two new road projects in Mexico and another in Peru

Container Terminal at Alicante Port. Spain (above).

Roda de Bara Marina. Tarragona. Spain (below).

46


ENVIRONMENT

Market and Strategy

OHL’s Environment division, as an OHL Group Business division in the water treatment

market, was consolidated as one of the principal operators in the sector through its

head company, OHL Environment Inima, with a significant job awarded in 2008.

In the domestic market, a bid number above the average historic number has been

maintained, fundamentally due to the pending investments in desalination by

the Ministry of Environment, Rural and Marine Affairs through the state company,

Acuamed, with the AGUA program.

On the international market, numerous projects were bid on, fundamentally as

concession contracts with operation and maintenance periods above 20 years in

countries like Algeria, Mexico, Brazil and the Arab Emirates. Inima is one of the

Spanish companies with greatest presence and activity outside of Spain, with

desalination plants operating in Chile, Brazil, Mexico and the United States, and

currently under construction in Algeria.

Additionally, during 2008, OHL Environment Inima participated in the RDI public

contests with various high technology projects within the National Science and

Technology program of the Ministries of Industry, Tourism, Commerce, Environment,

Rural and Marine Affairs.

The company’s own technology, together with ample experience and a strong

domestic and international implementation, allow for confronting future prospects

with guarantees, relying on the support of the following strategies:

- Domestic Market: maintain market quota, primarily through the National Water

Quality Plan 2008-2015, with investment expected at around 20,000 Million Euros,

and the 2007 Royal Reutilization Decree, which incorporates tertiary treatment to

increase wastewater quality in a large number of installations.

- International Market: Entrance into emerging markets such as the United States,

the Middle East, Eastern Europe and Asia, fostering alliances with local groups,

without dismissing acquisitions as routes to growth.

Los Cabos desalination plant in, Baja California, Mexico.

The hiring of OHL

Environment in the domestic

market doubled the predicted objective for

2008

47


2008

- Diversification of activity: incorporating new business with high technology

components, such as thermal dryers, mud treatment and others.

- Increase OHL’s own technology as an added value by stimulating RDI activity.

Relevant Activities

Both the technical capacity as well as the commercial effort developed by OHL

Environment Inima throughout 2008 translated into an important number of

adjudications, both in desalination as well as in potable and wastewaters.

The following are worth noting: Potable Water Treatment Plant in Llanura Manchega

(Cuenca), which is the most important potabilizing plant put up for bid by the Ministry

of Environment in 2008, with a 3 m3/sec capacity; the desalinator in Moncofa, in

Castellón, with 35,000 m3/day, and the Mogi-Mirim Concession in Brazil with Orbal

technology (concentric canal system through which wastewater is oxygenated, until

its arrival in a decanter). The adjudication of this project consolidates the presence

of Inima in this country.

OHL Environment Inima. Adjudications in 2008

Typology Project Amount € (s/IVA) Country Client

Construction and exploitation (3 years) IDAM Moncofa (Castellón) 19,734,260.20 Spain MIMAM - ACUAMED

Construction

Treatment of afino. Water treatment plant (ETAP). Majadahonda (Madrid) 7,747,968.23 Spain Isabel II Canal

Construction

Expansion, Tertiary Treatment. Wastewater Treatment Plant (EDAR). Rejas (Madrid) 5,702,820.94 Spain Aguas C. Tajo

ConstructionETAP Llanura Manchega (Cuenca) 11,911,193.11 Spain MARMA

Construction EDAR Redueña (Madrid) 3,963,198.90 Spain Isabel II Canal

Concession (30 years) EDAR Mogi-Mirim 132,240,000.00 Brazil

São Paulo Municipality (Brazil)

1 year Exploitation Operation and Maintenance Alicante II (Alicante) 1,028,109.45 Spain

MIMAM – Mancomunidad Canales del Taibilla

2 year Exploitation (renewable 2 more years)

Operation and Maintenance Lot III. Alcalá (Madrid) 3,321,641.06 Spain Isabel II Canal

4 year Exploitation (renewable 2 more years)

Operation and Maintenance Granollers, and others (Barcelona) 6,562,271.51 Spain Besos Consortium

48


During 2008, the Alicante II desalinator, with a 65,000 m3/day capacity, began

exploitation. This is the first desalinator put into function in Spain with an energy

recuperation system through isobaric cameras (ERI®).

Work also began on the Boadilla wastewater treatment plant (Madrid) and the

Benalmádena wastewater treatment plant was launched (Málaga), both of which

were totally open to biological filter technology.

In addition, the work on important plants continues at a good pace and within the

important fixed time periods, such as the Algeciras wastewater treatment plant, a

relevant reference in biological processes using bio filtration as well as the Alicante-

North wastewater treatment plant. The expansion work on the Majadahonda ETAP

in Madrid also began.

In the United States, the Taunton River(Boston-Massachusetts) brackish water

treatment plant is already operating and in Algeria, the work on the Mostaganem

desalinator (200,000 m³/day), with inverse osmosis technology and one of the

largest in the world, as well as the Cap Djinet (100,000 m³/day), with the same

technology.

It is also important to note the award by the Ministry of Environment, Rural and Marine

Affairs of the RDI Project for the “Reduction of production of mud of a wastewater

treatment plant through oxic-anoxic digestion at room temperature,” with the

important objective of diminishing the production of mud by 40%.

OHL Environment Inima has an AENOR UNE 166002.2006 certification for RDI

management.

Principal Concessions managed by Inima

Name Activity Years of Concession

Ambient Purification and Cleaning in Ribeirão Preto(Brazil) 2001-2019

Desalant Desalination Plant of Antofagasta (Chile) 2003-2021

Desalari Desalination Plant of Arica (Chile) 1998-2009

Aquaria Desalination Plant of Taunton-River (Boston-EEUU) 2008-2028

MetrofangThermal Mud Dryer of the Besós Wastewater Treatment Plant (Barcelona-Spain) 2001-2016

AIE Cádiz-S.FernandoCádiz-San Fernando Wastewater Treatment Plant (Spain) 2002-2024

Carboneras Desalination Plant of Carboneras (Almería, Spain) 2003-2028

Promoaqua Desalination Plant of Los Cabos (Mexico) 2007-2027

Mostaganem Desalination Plant of Mostaganem (Algerie)Under construction

(25 years)

Cap Djinet Desalination Plant of Cap Djinet (Algerie)Under construction

(25 years)

Mogi-Mirim Wastewater Treatment Plant Mogi-Mirim (Brazil)Under construction

(30 years)

OHL Environment

Inima began the exploitation

of the Taunton River Plant

(United States) and began

work on the Mostaganem

and Cap Djinet Desalinators, in

Algeria

49


2008

DEVELOPMENT

Market and Strategy

OHL Development integrates the activity of the OHL Group into the promotion

and exploitation of mixed-use tourism infrastructures, with important projects

in Mexico and with a clear international vocation.

Tourism, like other economic sectors, is not immune to the deterioration of the

global economy. The general 2% growth of international tourism in 2008 is due

to the notable results from the first half of the year, prior to the rough cooling

off of the economy, having produced a decrease in activity already in the last

months of 2008.

This scenario affected the different tourism segments in distinct measures. In

the area of luxury tourism, in which OHL Development has positioned itself, the

strength of the brands linked to the projects limit to a great degree the effects

of the international economic crisis. At the same time, the focus on the North

American market allows the company to benefit from the recuperation of the

economy, which will surely improve at a faster rate than other markets, thanks

to the flexibility of their economic structures.

As a consequence of this strategy, the projects underway will not only decrease

in operation volume or profitability, but will on the contrary, continue to increase

not having yet accomplished their ship’s velocity.

The general economic scenario can also provide favourable opportunities to

develop new projects in areas that wouldn’t have been viable in the economic

context of the last years.

Relevant Activities

With respect to the exploitation of the already active assets, it is important to

note the continued improvement of the results of exploitation, approaching cruise

ship levels at Fairmont and Rosewood hotels.

In addition, during 2008, the El Camaleón Golf Course was under exploitation and

by February 2009, it will have had the third edition of the prestigious Mayakoba

Golf Classic, the only official tournament in the history of the PGA celebrated

outside of the U.S. and Canada.

Banyan Tree inaugurated the third hotel at Mayakoba and Viceroy is building the fourth

50


The complex’s third hotel, Banyan Tree Mayakoba, has its inauguration expected

for March 1, 2009. The construction of the fourth hotel, Viceroy Mayakoba,

continues in its first phase, with very advanced studies of the second phase.

In the San Francisco de Puebla Project, the company is working on the exploitation

of the shopping centre, with 16,300 m² of rentable surface area as well as of the

boutique hotel, La Purificadora, also in Puebla.

In the same complex, studies have been carried out of a large warehouse which will

culminate in the emblematic development in the city of Puebla, with production

expected to begin during 2009.

In Mexico D.F., after completing the purchase 19,500 m² piece of land in the Santa

Fe neighborhood, one of the most exclusive and most dynamic of the city, and

the headquarters of the majority of large corporations that operate in Mexico,

market and viability studies have been carried out for the building of a mixed-

use complex.

Further, prospectuses of land in various target markets were analyzed, with short

term plans to replicate the business model developed in Mayakoba in one or

various new locations.

OHL Development

studies replicating the

Business model developed at

Mayakoba at one or various new

locations

Detail of a villa at the Banyan Tree Hotel, the most recent luxury chain opened at Mayakoba.

51


2008

Mayakoba tourism development. Mexico.

52

>> Social Information

The OHL Group maintains a policy of equal opportunity and non-discrimination based on respect for workers.

53


2008INDEX

Social Information

OHL GROUP REPORT





RDI 67

54


THE PEOPLE OF OHLThe mission of the OHL Human Resources (HR) Corporate Management is linked to

the following objectives:

• Define and apply HR policy according to OHL Group Strategy.

• Encourage the personal and professional development of employees.

• To drive values and ethical principals as well as the corporate culture and voluntarily

acquired commitments.

• To watch for the strict compliance of labour legislation and internal standards.

The HR Management, dependent on the Corporate General Management, establishes

a general management criterion which guarantees the faithful compliance of decisions

that emanate from the Management Committee. This division also coordinates

information about personnel, both nationally and internationally.

The OHL Group maintains a policy of equal opportunity and non-discrimination based

on respect for workers, regardless of their ideological condition, religion, race, age,

or sex, that additionally supports to the work life balance and favors the integration

of groups at risk for social exclusion or physical or mental disability through its Social

Action Plan, which favors labour integration.

In the operations related to the creating new subsidiaries or the acquiring already

existing companies, processes of integration are put into practice based on the

introduction of the Group’s own management procedures and tools, providing the

information and training necessary to all personnel of the new companies.

On an international level, members of the Human Resources Management work to

develop corporate labour polices in the countries in which OHL operates, always in

coordination with those responsible for HR of the distinct operating divisions, as well

as with those in the local areas, adapting policies to the real needs of the Group, its

workers and each country’s legislation.

In the same way, the exchange of experiences is fostered among the different local

HR executives, who study the creation of communication channels that facilite the

implementation of values of global knowledge within the Group.

This chapter summarizes some of the relevant aspects of the OHL Group’s social

practices. Its content is addressed in further detail in the 2008 Sustainable

Development Report, which complements this Annual Report.

55


2008

With respect to the participation and representation of employees, the Human

Resource policy involves the scrupulous respect for freedom of association of its

workers.

The following tables and graphs reflect the basic data relative to the OHL Group’s

employee base through December 31, 2008.

By title 2008 % 08/07 2007 % 07/06 2006

Directors and high-level Managers 2,432 11.8% 20.0 2,026 14.4% 3.8 1,951 15.1%

Mid-level Managers 2,630 12.8% 20.5 2,182 15.5% 35.6 1,608 12.4%

Non-degree technicians 2,291 11.2% 14.2 2,006 14.2% 26.0 1,592 12.3%

Administratives 1,910 9.3% 13.4 1,684 12.0% 9.6 1,537 11.9%

Rest of personnel 11,294 54.9% 83.0 6,171 43.9% -1.1 6,238 48.3%

Total 20,557 100.0% 46.1 14,069 100.0% 8.8 12,926 100.0%

DISTRIBUTION OF OHL GROUP EMPLOYEE BASE

By job type 2008 % 08/07 2007 % 07/06 2006

Full time personnel 14,037 68% 40 10,030 71% 5 9,548 74%

Part time personnel 6,520 32% 61 4,039 29% 20 3,378 26%

Total 20,557 100% 46 14,069 100% 9 12,926 100%

According to destination 2008 % 08/07 2007 % 07/06 2006

Domestic 6,429 31% 12.5% 5,715 41% 7 5,347 41%

International 14,128 69% 69.1% 8,354 59% 10 7,579 59%

International employees by country through 12-31-2008 (Total: 14,128)

Brazil

Chile

Czech Republic

Mexico

United States

Algeria

Argentina

Qatar

Slovakia

Others

0.8%

26.0%

10.9%

7.2%

6.7%

1.7%

20.3%

3.2%

19.0%

Bulgaria 42Peru 40Turkey 16Ecuador 5Arab Emirates 1

4.2%

Brazil

Chile

Czech Republic

Mexico

United States

Algeria

Argentina

Qatar

Slovakia

Others

0.8%

26.0%

10.9%

7.2%

6.7%

1.7%

20.3%

3.2%

19.0%

Bulgaria 42Peru 40Turkey 16Ecuador 5Arab Emirates 1

4.2%

The exchange of experiences is encouraged among the different local executives responsible for human resources

56


The Management

of training at OHL on

domestic territory is developed according

to the P-10 procedure

of the Quality and

Environment Management

System

OHL’s Employee base: distribution by divisions through 12/31/2008

Concessions

Environment

Development

Industrial

Corporates



1%

26%

21%

42%

1%

7%

2%Concessions

Environment

Development

Industrial

Corporates



1%

26%

21%

42%

1%

7%

2%

In the area of training, the OHL Group considers the permanent updating of worker

capacity a priority. Along this line, the Group opted more than 10 years ago for

continuous training as part of its business strategy, so as to assure sustainable

development in the market. As a result, OHL’s training management has obtained

much recognition, clearly converting the organization into one of the companies of

obligatory reference in the area.

The Management of training at OHL on domestic territory is developed according to

the P-10 procedure of the Quality and Environment System, elaborated according to

the UNE EN ISO 9001:2000 standard, certified by AENOR.

The Training Service, hierarchically integrated into the Corporate General Management,

administers everything concerning training management by carrying out the needs

diagnostic. This Service also manages and directs the development of the annual

training plans for all of OHL’s companies in Spain and collaborates in the detection

of training needs of the Group’s workers outside of Spain, transmitting, additionally,

the experience obtained nationally.

2008 OHL GROUP TRAINING PLAN

Training Given

Participants nº 23,161

Hours of Training 245,912

57


2008

In 2008, OHL was the first Spanish company to obtain recognition by the Labour

Construction Foundation for providing the legally required training in prevention of

the National Collective Agreement of the Construction Sector.

For the last ten years, the Group has had its own Labour Risk Prevention System,

both in construction and in other similar activities.

OHL develops its prevention activity through its Affiliate Prevention Service, a

specific organizing unit integrated into the Corporate General Management and

whose members are exclusively dedicated to the prevention of labour risks in the

Group’s companies.

The Management System is audited internally by its own Affiliated Prevention Service

and inspected by labour authorities, as well as audited by independent auditors, who

apply their conformity to the specifications of the 2007 OHSAS 18000 standard.

OHL has experienced considerable progress in the area of labour risk prevention

(LRP) thanks to a permanent investment and the establishment of a policy of priority

commitment in the area, in which all of Group levels are involved.

OHL has a long term Strategic Prevention Plan that it shares with the affiliate

companies. The plan was born five years ago and is based on six actions, upon which

the company develops its annual performance. These actions are as follows:

- Assurance of the prevention system

- Maintenance of prevention knowledge

- Training and prevention information

- Continuous improvement controls

- Permanent prevention collaboration

- Prevention service sustainability

The prevention policy has driven the Group to obtain three significant milestones in

the last five years, manifesting its spirit of prevention leadership.

In 2008, OHL was the first Spanish company to receive recognition by the Labour Construction Foundation for providing training in prevention required legally by the National Collective Construction Agreement

58


0

5,000

10,000

15,000

20,000

OHL

SEOPAN

Construction

20072006200520042003

15,37o

5,344

7,354

13,866

5,303

6,930

13,498

4,988

7,133

4,357

6,725 *

12,904

0

5,000

10,000

15,000

20,000

OHL

SEOPAN

Construction

20072006200520042003

15,37o

5,344

7,354

13,866

5,303

6,930

13,498

4,988

7,133

4,357

6,725 *

12,904

Compared Evolution of the Accident Rate Index at OHL, SEOPAN and Construction

* Provisional

Source: MTAS.ATE-24 (January 2009)

Accident index = Nº accidents x 100,000

Nº affiliated workers to the S.S. with contingency of AT

specific coverage

OHL GROUP PREVENTION POLICY MILESTONES

2005

2007

2008

1st National Construction Group certified “OHSAS 18001”

1st National Construction Group with accreditation of “EXCELLENCE” in Prevention Management

1st National Construction Group recognized by the FLC (Construction Labour Foundation) for PREVENTION TRAINING

OHL’s permanent prevention objective is that the Group accident rate remain at

values under 50% of the construction sector index; actually, in the last few years, that

index has been situated below the figures registered by SEOPAN for its associated

companies.

Social Action

The management of social action is developed according to the Framework Social

Action Plan approved by the Sustainability Committee in June, 2008. In it, the bases

upon which the social action plans of OHL’s companies should be realized in all of

the countries in which it operates, are established.

59


2008

Criteria of the Framework Social Action Plan

The OHL Group’s Framework Social Action Plan, inspired by a philosophy of

commitment to society, defines the following criteria for the development of all of

the activity foreseen in the different social action plans:

- Alignment with the mission, vision, values and activity guidelines for OHL Group activity.

- Active commitment to the priority needs of the community and vocation of permanence, relying on the Millenium Development Objectives with action marks. - Linking business objectives to community social needs, seeking maximum value for all interest groups. - Involvement and commitment of upper management. - Active participation of the Group’s employees. - Respect for the 10 Principles of the United Nations Global Compact. - Precise definition, establishing clear and measurable objectives, favoring alliances with strategic partners that contribute to the success of the social activities implemented.

In 2008, the expansion of the OHL Group’s Social Action Plan was approved in

Spain for a new period of three years, 2009-2011, conforming to the criteria of the

Framework Plan, applying the areas of the sustainability plan and accessibility and

labour insertion of persons with disabilities and at risk for social exclusion.

Internationally, social activities take place in those countries in which OHL has

permanent presence, such as Algeria, Mexico, Brazil, Chile, Argentina, United States

and the Czech Republic. The objective is the development of society through the

promotion of programs with real social value and responding to the priority needs

of the communities. The most significant areas are health, access to education and

development of road security, especially directed to youth.

It should be noted that the drive for corporate volunteerism, which has as objective

to create within the OHL Group an open space for dialogue and cooperation

among employees and society, through which volunteers can develop and provide

community service through their talent and unique and singular capacities, and at the

same time satisfy solidarity concerns, and definitely, personal growth. Active groups

currently exist in Spain, Brazil, Chile and the United States, formed by employees

that belong to 20 OHL companies. The Group’s volunteers define and lead their own

social projects.

In 2008, 1,202,977 Euros were destined to Social Action Projects, without

including employee dedication time, volunteer hours or OHL Group furniture

donations.

In 2008, 1,202,977 Euros were destined to Social Action Projects, without including employee dedication time, volunteer hours or OHL Group furniture donations

60

>> Quality and Enviromment

Desalination plant for salty water in Taunton River. Brockton, Massachusetts. US.

61

OHL Group Anual Report

2008

Quality and Environment

INDEX

OHL GROUP REPORT





RDI 67

62


COMMITMENT TO QUALITY AND ENVIRONMENTRespect for the environment, the conservation of natural surroundings and the

quality of services provided is a commitment assumed by the OHL Group, which

is made public through the Declaration of the Quality and Environment Policy and

Environmental Activity, the Commitment to the Fight against Climate Change and the

adherence to the United Nations Global Compact.

MANAGEMENT OF QUALITY AND ENVIRONMENT. FIGHT AGAINST CLIMATE CHANGE

The fulfilment of this commitment is fomented along all of the Group’s Business lines

and in all of the countries in which OHL operates.

The OHL Group favors the implementation of systems to effectively manage the quality

and environment of the services it provides, in Spain and internationally. Proof of

this is the large number of companies and centres belonging to the Group which

have obtained certifications for their Management systems where these factors are

considered an added value for the Client, as is the case in Spain, Brazil, Chile or the

Czech Republic.

In countries in which other Environment and Quality standards are used, OHL utilizes

the relevant systems in each case. This occurs in the activities developed in the United

States, for example. In other markets, like Argentina, Mexico and Algeria, the Group

promotes the implementation of Quality and Environmental Plans that are similar to

those used by companies with certified management systems.

It is important to note that the 2008 period ended with the obtaining of certificates

according to ISO 9001 and ISO 14001 standards for activities that to that date, the

company did not have, such as the follow up and control of concessionary companies

belonging to the Group (OHL Concessions); the cleaning and maintenance of buildings

and installations (Ingesan); gardening and environmental repositioning (Irena), or

the operation and maintenance of the Ligero Oeste Metro lines (OHL Concessions).

Currently, the OHL Group activities developed under a certified Quality Management

System reach 69%, and reach 62% in Environmental Management. It is important

to point out that these figures increase to 98%, for Quality and for Environment in

the case of OHL Domestic Construction; and to 88%, for Quality at OHL Industrial. In

This Chapter summarizes some relevant aspects regarding the OHL Group’s Quality

and Environment management. Its contents are further expanded upon in the 2008

Sustainable Development Report, which compliments this Group Annual Report.

63


2008

Currently, OHL Group activities developed under a Certified Quality System reach 69%, and reach 62% in environmental management

other business lines, these percentages remain low, due fundamentally to the facts

that in some countries or for certain activities, management systems different from

those that OHL uses, are applied.

The role carried out by the Quality and Environment Committee in 2008 was

fundamental for the incorporation of issues of general interest for OHL Group activities,

independent from the specific issues relating to system certification, highlighting

issues like activity in the fight against climate change or the Environmental

Responsibility Law which entered into force in Spain. The recent incorporation of

the General Director of OHL Industrial completes the representation of all of the

divisions of the business.

The Quality and Environment Service depends hierarchically on the OHL Group’s

innovation and development division and is independent from the production lines.

It is located in the Group’s central offices and lends service both in Spain as well as

in the countries in which activity takes place.

In addition, the business lines rely on the important collaboration of specialized

technicians, which, from the actual project (quality unit managers and/or

environment); work centres (executives responsible for quality and/or environment),

or from the services of the delegations and management, performs direct quality

and environmental functions or support, always in coordination with the corporate

service.

During 2008, the OHL Group satisfactorily spent more than 80 days undergoing

quality and environmental audits carried out by accredited entities, clients and

public organizations in the different countries in which the company is present. Also,

internally, more than 350 audits took place. 87% of these were carried out by the

corporate auditing service.

The Quality and Environment technicians from the different areas have made a special

effort in the different areas, especially in assistance for the implementation and

follow up of the Quality and Environment System and the corresponding training at

the different work centres, dedicating more than 450 days. The Group’s employees

have received more than 19,100 hours of environmental training.

In environmental management, the activity that they have carried out since the

beginning in the following areas of activity has stood out: Mayakoba Tourism

Development, in which biodiversity is a fundamental pillar of the business; OHL

Concession Highways in Brazil, Mexico and Chile, which include investment in activity

related to Biodiversity and the fight against climate change, as well as control amnd

follow up of distinct environmental aspects, and the management of water, with the

development of new technologies.

64


Among the initiatives related to the fight against climate change, the following can

be highlighted:

• Long term: RDI for the development of the best technologies and the application

of new knowledge with the objective of obtaining new products and constructive

processes that are more sustainable and energy efficient.

• Short/Medium term: Transfer from offices to Torre Espacio, a building designed with

a bioclimatic philosophy; commitment to the reduction of CO2 emissions (Entorno

Foundation Action CO2 Program); awareness and training program about climate

change directed to OHL employees; reduction in the number of personal computer

equipment and development of an inventory protocol for greenhouse gases.

Additionally, the following aspects have been worked on in the different areas of

the business: search for more efficient environmental solutions for projects; carbon

neutralization projects on Highways, and optimization of energy in desalinators,

among other aspects.

Company Quality Environment Business line Certification year expected

In Spain

Celsa ISO 9001 ISO Domestic Construction 2009

Oshga ISO 9001 Domestic Construction 2009

General Services ISO Corporate General Management

2009

Sacova ISO 9001UNE 158101 and 158201

Corporate General Management

Pending

International

OHL Argentina Office Quality plans for

worksISO 9001

Environment plans for

worksISO 14001


Pending

OHL Mexico International Construction

Pending

OHL Algeria Office International Construction

Pending

OHL GROUP COMPANIES WITH NON-CERTIFIED MANAGEMENT SYSTEMS

The new OHL Group

Headquarters in Madrid is

a bio-climatic building

65


2008

Carbon neutralization on highways and energy optimization in desalinators, are among the projects developed by OHL in the fight against climate change

ISO 9001 ISO 14001 Business Line

In Spain

OHL Domestic Construction

Sato Domestic Construction

Sobrino Domestic Construction

G&O Domestic Construction

E&M Domestic Construction

Malvar Domestic Construction

Ingesan ▲ ▲ Domestic Construction

Elsan Domestic Construction

Elsan - Planta de Aglomerado Montroy AIE ▲ Domestic Construction

Pacsa Domestic Construction

Irena ▲ ▲ Domestic Construction

OHL Concesiones ▲ ▲ Concessions

Metro Ligero Oeste ▲ ▲ Concessions

Inima Environment

Ecolaire Industrial

Chepro Industrial

International

OHL Concesiones Chile ▲ Concessions

Autovias (Brazil) Concessions

Centrovias (Brazil) Concessions

Intervias (Brazil) Concessions

Vianorte (Brazil) Concessions

OHL Sucursal Chile International Construction

ŽPSV (Czech Republic) International Construction

OHL ŽS (Czech Republic) International Construction

Ambient (Brazil) Environment

(*) Reach according to detail in corresponding certificate.(▲) Certificate obtained in 2008.

OHL GROUP COMPANIES CERTIFIED BY ACCREDITATION ENTITIES (*)

OHL Group. Construction and Environment in Spain. Evolution of Quality and Environment visits and audits

0

200

400

600

800

1,000

Attendance

Internal Audits

200820072006

326 314 306

453 510 483

779 824789

66

>> RDI

O’Eixo Viaduct. High Speed Railway at Boqueixon-Santiago Stretch. A Coruña. Spain.

67


2008INDEX

RDI

OHL GROUP REPORT





RDI 67

68

>> RDI

This chapter picks up some of the OHL Group’s relevant RDI management aspects. Its

content is covered more specifically in the 2008 Sustainable Development Report,

which complements this Annual Report.

RESEARCH, DEVELOPMENT AND INNOVATION

RDI Management System

OHL obtained in 2008 an AENOR certificate for its RDI Management System,

conforming to the UNE 166.002:2006 standard. This management knowledge system

allows for better technical quality and provides transparency and profitability for RDI

activities. The procedures to certify and implement the RDI Management System in

2009 have already begun in four other companies of the Group: Asphalts and Elsan

Construction, OHL Concessions, OHL Environment Inima and Sociedad Anónima

Trabajos y Obras(SATO).

For the coordination of the total RDI activity, the OHL Group has a Research,

Development and Innovation service that provides support for the execution of

projects to more than 100 engineers and specialists. The total number of persons in

the Group implied in the research activity reached 146. In addition, the RDI service

receives the backing of the RDI Committee for its work performance, constituted by

the members of the company’s Management Committee.The procedures for

implementing and certifying the 2009 RDI Management

System in four other of

the Groups companies has already begun

R+D R+D

I I

R+D

i

2008

R+D 123

I 23

Total 146

OHL Group Personnel in RDI Projects

69


2008

Research, Development and Innovation Projects

In 2008, the OHL Group increased its investment in RDI by 61.6% compared to

2007, continuing with the increasingly higher tendency initiated during previous

periods.

R+D Investment Effort

The investment effort in RDI is defined as the investment made en R+D divided by

the GVA (gross added value) generated, and is expressed in % GVA. This indicator is

used to compare the homogenous form to distinct companies and industries, and

even to reference them to the total investment in R+D made by Spain.

In the OHL Group, this effort in 2008 was of the order of two times superior to the

average of the construction sector in 2007, according to the latest data provided by

the INE (National Statistics Institute) in November 2008. For the National Construction

Division, which spent nearly 71% of the Group total in R+D, this R+D investment

multiplier was situated at around five times that of the industry average.

In the OHL Group, the investment effort in 2008 was two times above the construction sector average in 2007

Proof of the RDI project on floating shelter dykes in the CEHIPAR.

Evolution of OHL Group investment in RDI

R+D R+D

I I

R+D

i

Euros

R+D 6,076,040

I 281,138

Total 6,357,178

2008 OHL Group Total Investment in RDI

* This figure included, for the first time, the investment realized in the Group’s international areas, but not in the activities regarding innovation of the activity lines.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

5.0

4.5

5.5

6.5

6.0

I

R+D

2008200720062005

9.5%

61.9%

61.6%*

70

>> RDI

Testing Site of the Intelligent Highway Project at the Airport Center Highway.

Relevant Projects in execution during 2008

Project Description

Iberoeka Project 05 – 425: INTELLIGENT HIGHWAYS Development of a free-flow toll system, without barriers or traffic lanes.In collaboration with the Madrid’s Polytechnic University and with cooperation from Indra and a Mexican firm.

Research regarding Floating Shelter Dikes (DAF) Obtaining the knowledge necessary for the construction of floating shelter dikes braced to the seafloor for use in waters more than 50 m. deep.Project in collaboration with State Ports, the University of Valencia and the El Pardo Hydrodynamic Experience Canal(Madrid).

Dispensing and mechanical behaviour of high resistance concrete with special uses (HAR)

The project focuses on research regarding procedures for measuring and the technological properties of diverse types of high resistance concrete HAR (fck>50 MPa) with diverse additional specific requirements.With collaboration from Castilla-La Mancha University.

Characterization of the ecological processes surrounding infrastructures (RECOTAL)

Criticizes the current protocols for revegetation and proposes new techniques for the ecological restoration of these enclaves. Research is applied with the objective of drafting a manual of best practices for the ecological restoration of the affected spaces by the construction of infrastructures. Project in collaboration with Madrid’s Universidad Complutense.

Computerized management control of maritime projects(GIOM)

Tool for control of execution of maritime projects, for follow up in real time, both from the actual project as well as remotely via the OHL Group’s intranet. Developed in Alicante by SATO, a subsidiary of the Group.

Research of a dynamic positioning system for fishing barges (GANGUILES)

The objective of the project is to control position and direction during the operation of breakwater by the clamp. In this type of operation, not only does the condition of weight vary rapidly, but also the strength of the wind, current and waves, requiring a rapid and trustworthy positioning system to obtain the pour in adequate coordinates. Developed by OHL subsidiary, SATO, with the collaboration of Madrid’s Polytechnic University.

71


2008

Project Sulabu Testing, in cooperation with Czech

subsidiary ŽPSV.

The SATOGRAB project will optimize the clamp for

block recuperation.


Project Description

New research on clamps for recuperation of blocks of diverse tonnage (SATOGRAB)

Optimization of the already patented design of the clamp for the recuperation of blocks, resulting in weight diminishment with 120 t to 50 t as useful for the same block weight, 90 t. This also includes the optimum dimension highly varied weight ranges.

Research on floating shelter dikes. Amplification of previous project (DAF II)

Floating Shelter Dike Project II. Continuation of the research carried out on a previous Project by the same name. The design of the project will be carried out and technical assistance will be given at of a real floating harbour in a sporting port. The new dike reduces the impact on the marine bed and on the ocean beds. OHL and SATO participate.

Research and development of a prefabricated plate for railways including design and testing for mixed traffic (SULABU)

Sulabu Project. This project proposes the design and development of an especially conceived solution for the Spanish market, which will simultaneously determine polyvalence for its application in an Iberian gauge line and UIC. Additionally, the Project has the intention to be more valid for mixed traffic (products and travellers), with the distinct requirements that this calls for.This solution should pick up, or part from, the experience of the Japanese model. In 2008, the Project received the Eureka seal and enjoys the cooperation of the subsidiary ŽPSV and of another Czech company.

New system for detecting and measuring building movements in real time (TORRE ESPACIO THEODOLITES)

Torre Espacio Theodolites Project. Research and development of a tool that guarantees control, for the first time in real time, of the movement of Torre Espacio through robotized topographic devices, sending information practically instantly to determined computerized and telephone terminals, thereby making possible the visualization of the original movements. The system simultaneously transmits meteorological data through stations set up to this end.Project in cooperation with Madrid’s Polytechnic University.

72

>> RDI

The Cubípodo seeks to design a new element for the construction of dikes.


Project Description

Bioclimatic architecture and solar thermal energy (ARFRISOL)

Singular strategic project to demonstrate the adjustment of bioclimatic architecture and of solar energy used in buildings. It aims to obtain thermal energy for heating and for refrigeration solar thermal energy. As Basic elements for the conditioning of future construction, utilizing only 10 to 20 % of conventional energy compared to that which is currently used.To make these investigations possible, five buildings were constructed (sample containers) in different climatic zones in Spain.Led by CIEMAT, in cooperation with other construction and technology companies, Barredo Foundation, Almería’s Solar Platform and the universities of Oviedo and Almería.

Research on a new element to build dikes (CUBÍPODO) Cubípodo Project Investigation and development on a real scale of a new element that: - Avoids the paving of the traditional block - Has more hydraulic stability and fewer overflows. - Has more structural resistance, and consequently, generates increased savings in materials. Special casing and storage systems are also designed, which allow for systematic and effective production, making the product’s final cost competitive.Project developed by SATO in collaboration with the Polytechnic University of Valencia, the University of Cantabria and the University of Aalborg in Denmark.

Design and development of advanced techniques for the conservation, maintenance and exploitation of port infrastructures (DYNA PORT)

Management tool for recalculating structural safety and durability. Definition of indicators of a follow up system onsite and in real time. Application to the entire lifecycle and an ample variety of transportation infrastructures. The Project was launched at the initiative of the Langosteira UTE (Temporary Union of Companies) with the support of the Port Administration. The study will be applied to Langosteira Port, the new port outside of La Coruña. Coordinated by the Eduardo Torroja Institute. Participants include SATO and the rest of the UTE members.

73


2008


Project Description

Strategic research on the safest and most sustainable highways, focused on the asphalt sector (FÉNIX-CENIT)

Investigation on safer and more sustainable highways, focused on the asphalt sector. Development of new nanomaterials, bituminous dense mixtures at temperatures inferior to 100º C and semi-hot asphalt mixes, all to increase the durability of the pavement, as well as systems to capture and store energy from solar irradiation over the asphalt surface.The consortium is formed by 11 companies. 15 research and technology centres collaborate. The OHL Group is present through its subsidiary, Elsan.

Development of a system of intelligent control for MBR processes in the purification of residual waters (MBR)

Development of a system of intelligent control for MBR systems, starting with the evaluation of the behaviour of hollow fibre membranes and plane membranes in the process of purifying of residual waters. Application to new and existing wastewater treatment plants. Project developed by INIMA in cooperation with the University of Girona.

Utilization of hydro geologic natural analogues for the optimization of capturing processes in ocean water purifiers (HYDROGEOLOGIC ANALOGUES)

INIMA Research Project to further examine the physical, chemical and micro biotic processes that disrupt the desalination of ocean water caught in wells.In cooperation with Almería University and Spain’s Geological and Mining Institute.

Cost reduction in the exploitation of a wastewater treatment plant, reducing the production of mud (REDUCTION OF MUD)

Development of a process that allows for diminished production of de biological mud in a wastewater plant through the study of digestive processes anoxic/oxic at room temperature in a reactor working with discontinued charges. Modification of the working conditions of the wastewater treatment plant’s biomass. The primary technological innovation resides in the fact that the project seeks a reduction in the production of dry material at the origin. In cooperation with University of Girona.

Façade of the building constructed by OHL for the Arfrisol Project.

OHL Environment, Inima develops an RDI Project to reduce biological

mud in purification.

74

>> RDI

The SATO affiliate develops a dynamic positioning system for barges.


Project Description

Development and modular integration of an advanced toll system (ADVANCED TOLL STANDARD)

Define an advanced toll standard that offers users the latest in technology for their comfort and speed and that, at the same time, will have a control centre which will offer toll concessionaires the ability to administer, supervise, manage and maintain in a modular way any element within any toll system modality. Produced by OHL Concessions, in cooperation with Indra and the Pontific University of Comillas – ICAI.

Investigation and development of an ecological linker (ECOLOGICAL LINKER)

Research and development of an ecological linker with a base of geopolymeric structures capable of immobilizing potentially dangerous substances from industrial residues generated in large volumes and their posterior application to edification. Conducted by ŽPSV (Czech Republic) in collaboration with the University of Brno’s School of Chemistry.

Leadership in Energy and Environmental Design (LEED) The Green Building Rating System LEED is the nationally accepted form to certify green buildings developed by the U.S. Green Building Council. LEED certification distinguishes construction projects that have demonstrated a commitment to sustainability by complying with the highest standards of capacity, applicable only to construction projects.This fundamentally consists of design and construction practices that reduce notably or limit the negative impact of buildings on the environment and their occupants in five general areas:

- Sustainable Building - Water protection and efficiency- Energy efficiency and renewable energy - Conservation of natural resources and materials- Interior environmental qualityThis implies environmental, economic, health and safety, and social benefits. This concept is currently being developed in all of the projects under way in Toronto and Montreal by OHL USA.

75


2008

CLEAM is a multidisciplinary project on clean, efficient

and environmentally friendly construction.

OHL Concessions directs OASIS, the first Spanish RDI project

for the design of the Highway of the Future.


Project Description

Clean, Efficient and Environmentally Friendly Construction (CLEAM - CENIT)

The general objective of this Project is to open a series of research lines that have as a goal the generation of new knowledge in the area of lineal transportation infrastructures, seeking, through synergic action, new models of greater sustainability and care for the environment.A multidisciplinary investigation project co-led by OHL. This project is supported by the Strategic Sustainable Construction Line of the Spanish Technology Construction Platform (LECS). The multitude of aspects handled in the project “Clean Efficient Environmentally Friendly Construction” is seen reflected in the number of companies and research organizations involved and the available budget. Partners: Acciona, FCC, DRAGADOS, Sacyr, Corsan-Corviam, FERROVIAL, OHL, Martínez Segovia and Quilosa. An AIE (Economic Interest Group) was arranged between the companies.Collaborators: CEDEX, IETCC, LABEIN, AIDICO, CIDEMCO, INTROMAC, UCM, UPM, UPV (EHU). Univ. of Oviedo and Univ. of La Coruña.75

Operation of Safe, Intelligent and Sustainable Highway (OASIS – CENIT)

Definition of a highway whose operation presents differentially superior levels of safety, service to users and sustainability. The Highway is conceptualized from a global perspective throughout its life cycle. In the execution of the Project from a global perspective, the most advanced ICT’s will be used.The idea is to develop the European Standards and an advanced sustainability model, among other objectives.The Project is led by OHL Concessions.Other partners: OHL, Abertis, Iridium, Dragados, Indra, Sice, Geocisa, GMV, five SMEs and 14 OPI’s (Public Research Organizations).

76

>> Obrascón Huarte Lain, S.A. and Subsidiaries

Parrot Jungle, Miami. Florida, US.

77

Financial Statements and Management Report

2008CONTENTS


FINANCIAL STATEMENTS AND MANAGEMENT REPORT

Auditor’s Report 78

Consolidated Financial Statements 79

Management Report 191

78


AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS

To the Shareholders of

OBRASCÓN HUARTE LAIN, S.A.:

1. We have audited the consolidated financial statements of OBRASCÓN HUARTE LAIN, S.A. and Subsidiaries comprising

the consolidated balance sheet at 31 December 2008 and the related consolidated income statement, consolidated cash

flow statement, consolidated statement of changes in equity and notes to the consolidated financial statements for the

year then ended. The preparation of these consolidated financial statements is the responsibility of the Parent’s directors.

Our responsibility is to express an opinion on the consolidated financial statements taken as a whole based on our audit

work performed in accordance with generally accepted auditing standards in Spain, which require examination, by means

of selective tests, of the evidence supporting the consolidated financial statements and evaluation of their presentation,

of the accounting policies applied and of the estimates made.

2. As required by Spanish corporate and commercial law, for comparison purposes the Parent’s directors present, in addition

to the figures for 2008 for each item in the consolidated balance sheet, consolidated income statement, consolidated

cash flow statement and consolidated statement of changes in equity, the figures for 2007. Our opinion refers only to the

consolidated financial statements for 2008. On 1 April 2008, we issued our auditors’ report on the 2007 consolidated

financial statements, in which we expressed an unqualified opinion.

3. In our opinion, the accompanying consolidated financial statements for 2008 present fairly, in all material respects, the

consolidated equity and consolidated financial position of OBRASCÓN HUARTE LAIN, S.A. and Subsidiaries at 31 December

2008 and the consolidated results of their operations, the changes in the consolidated equity and their consolidated

cash flows for the year then ended, and contain the required information, sufficient for their proper interpretation and

comprehension, in conformity with International Financial Reporting Standards as adopted by the European Union applied

on a basis consistent with that of the preceding year.

4. The accompanying consolidated directors’ report for 2008 contains the explanations which the Parent’s directors consider

appropriate about the Group’s situation, the evolution of its business and other matters, but is not an integral part of the

consolidated financial statements. We have checked that the accounting information in the consolidated directors’ report

is consistent with that contained in the consolidated financial statements for 2008. Our work as auditors was confined to

checking the consolidated directors’ report with the aforementioned scope, and did not include a review of any information

other than that drawn from the accounting records of OBRASCÓN HUARTE LAIN, S.A. and Subsidiaries.

DELOITTE, S.L.

Registered in ROAC under no. S0692

Juan José Roque

1 April 2009

Translation of a report originally issued in Spanish based on our work performed in accordance with generally accepted auditing standards in Spain and of consolidated financial statements originally issued in Spanish and prepared in accordance with IFRSs as adopted by the European Union (see Notes B and F). In the event of a discrepancy, the Spanish-language version prevails

79


2008

Financial Statements

80


Note: the accompanying Notes A.1 to F are an integral part of the consolidated balance sheet at 31 December 2008.

Consolidated balance sheets at 31 december 2008 and 2007

Thousands of eurosAssets 31/12/08 31/12/07NON-CURRENT ASSETS

Property, plant and equipmentLand and buildings 195,827 200,420 Machinery 292,707 237,826 Non-current assets of concession operators 3,791,440 3,493,931 Other fixtures, tools and furniture 88,547 63,505 Advances and property, plant and equipment in the course of construction

46,970 65,866

Other items of property, plant and equipment 40,670 25,225 Accumulated depreciation and impairment losses (772,269) (749,709)

3,683,892 3,337,064

Investment property 67,962 73,602

Goodwill 38,850 16,302

Intangible assetsComputer software 14,440 15,859 Other intangible assets 311,654 281,817 Accumulated amortisation (71,345) (66,384)

254,749 231,292 Non-current financial assets

Investment securities 3,846 2,766Other loans 203,140 198,914 Deposits and guarantees given 28,721 13,230 Impairment losses (17,519) (19,728)

218,188 195,182

Investments accounted for using the equity method 116,178 108,089

Deferred tax assets 484,727 380,244

TOTAL NON-CURRENT ASSETS 4,864,546 4,341,775

CURRENTS ASSETSInventories

Embodiment items, fungibles and replacement parts for machi-nery

88,758 66,192

Auxiliary shop projects and site installations 26,775 24,690 Advances to suppliers and subcontractors 53,746 27,089 Write-downs (931) (517)

168,348 117,454 Trade and other receivables

Trade receivables for sales and services 1,505,783 1,398,898 Receivable from associates 127,100 110,585 Employee receivables 913 970 Tax receivables 143,868 169,813 Sundry accounts receivable 162,077 214,418 Write-downs (155,223) (148,356)

1,784,518 1,746,328 Current financial assets

Investment securities 85,442 86,208 Other loans 212,497 97,335 Deposits and guarantees given 13,018 6,160 Allowances (49,168) (5,975)

261,789 183,728

Current income tax assets 26,432 23,772

Other current assets 43,866 22,645

Cash and cash equivalents 503,333 647,842

TOTAL CURRENT ASSETS 2,788,286 2,741,769

TOTAL ASSETS 7,652,832 7,083,544

81


2008

Note: the accompanying Notes A.1 to F are an integral part of

the consolidated balance sheet at 31 December 2008.

Thousands of eurosEQUITY AND LIABILITIES 31/12/08 31/12/07EQUITY

Share capital 52,495 52,495 Share premium 254,365 254,365 Treasury shares (35,005) (11,022)Reserves 21,079 26,083 Reserves of consolidated companies 340,370 236,324 Valuation adjustments (361,544) (90,269)Consolidated profit for the year attributable to the Parent 150,686 140,450

TOTAL EQUITY ATTRIBUTABLE TO THE PARENT 422,446 608,426 Minority interests 280,602 309,162 TOTAL EQUITY 703,048 917,588

NON-CURRENT LIABILITIESDebt instruments and other held-for-trading liabilities

Corporate bonds 613,652 712,787 Bond issue of concession operators 212,713 298,723

826,365 1,011,510 Bank borrowings

Mortgage loans and other loans 599,672 273,949 Loans of concession operators 1,693,716 1,301,823

2,293,388 1,575,772

Other financial liabilities 194,119 95,744

Deferred tax liabilities 256,671 198,997

Provisions 23,794 19,796

Deferred income 159,633 89,914

Other non-current liabilities 175,501 220,743

TOTAL NON-CURRENT LIABILITIES 3,929,471 3,212,476

CURRENT LIABILITIESDebt instruments and other held-for-trading liabilities

Corporate bonds 21,613 22,484 Bond issue of concession operators 17,167 28,847

38,780 51,331 Bank borrowings

Mortgage loans and other loans 212,492 300,046 Loans of concession operators 128,875 137,741 Unmatured accrued interest payable 3,367 2,454 Unmatured accrued interest payable of concession operators 17,294 13,079

362,028 453,320

Other financial liabilities 15,942 13,230

Trade and other payablesAdvances received from customers 418,866 308,376Payable for purchases and services 1,080,211 1,002,865Notes payable 574,725 649,810

2,073,802 1,961,051

Provisions 147,488 143,481

Current income tax liabilities 45,301 19,212

Other current liabilitiesPayable to associates 93,493 72,432Remuneration payable 17,422 9,831Tax payables 166,081 161,871Other non-trade payables 52,132 61,574Guarantees and deposits received 1,734 2,878Other current liabilities 6,110 3,269

336,972 311,855

TOTAL CURRENT LIABILITIES 3,020,313 2,953,480

TOTAL EQUITY AND LIABILITIES 7,652,832 7,083,544

Consolidated balance sheets at 31 december 2008 and 2007

82


Consolidated income statements for the year ended 31 december 2008 and 2007

Note: Notes A.1. to F are an integral part of the consolidated income statement for the year ended 31 December 2008.

Thousands of euros

2008 2007

Revenue 4,008,777 3,764,419

Other operating income 248,573 198,872

Changes in inventories of finished goods and work in progress 3,110 (14,075)

Procurements (2,471,348) (2,425,544)

Staff costs (543,732) (456,213)

Depreciation and amortisation charge (184,893) (158,389)

Changes in provisions (30,420) (10,848)

Other operating expenses (607,378) (524,518)

PROFIT FROM OPERATIONS 422,689 373,704

Finance income 89,141 58,231

Finance costs (292,206) (216,933)

Exchange differences (gains and losses) (20,579) 6,913

Gains (Losses) on changes in value of financial instruments at fair value

4,980 (11,882)

Result of companies accounted for using the equity method 6,785 4,407

Impairment losses and gains and losses on disposal of financial instruments

56,189 16,374

PROFIT BEFORE TAX 266,999 230,814

Income tax (84,569) (55,445)

PROFIT AFTER TAX 182,430 175,369

Minority interests (31,744) (34,919)

CONSOLIDATED PROFIT FOR THE YEAR ATTRIBUTABLE TO THE PARENT 150,686 140,450

Earnings per share:

Basic 1.74 1.61

Diluted 1.74 1.61

83


2008Consolidated income statements for the year ended 31 december 2008 and 2007 Consolidated statements of changes in equity for the years ended 31 december 2008 and 2007

The accompanying Notes A.1 to F are an integral part of the consolidated

statement of changes in equity for the year ended 31 December 2008.

Thousands of euros

Share capital

Share premium

Treasury shares

Reserves Reserves of consolidated companies

Valuation adjustments

Consolidated profit for the year

attributable to the Parent

Total equity attributable

to the Parent

Minority interests

Total equity

Balances at 31 December 2006 52,495 254,365 - 53,600 121,685 (46,083) 105,096 541,158 268,583 809,741

2007 net profit - - - - - - 140,450 140,450 34,919 175,369

Changes in hedging reserves - - - - - 16,818 - 16,818 5,951 22,769

Measurement of financial instruments held for sale

- - - - - (2,639) - (2,639) - (2,639)

Translation differences - - - - - (58,365) - (58,365) 2,253 (56,112)

Total recognised income and expenses

- - - - - (44,186) 140,450 96,264 43,123 139,387

Distribution of 2006 profit - - - (10,644) 89,467 - (105,096) (26,273) - (26,273)

Treasury shares - - (11,022) - - - - (11,022) - (11,022)

Treasury share transactions - - - (846) - - - (846) - (846)

Changes in the scope of consolidation

- - - (16,027) 25,172 - - 9,145 (2,544) 6,601

Balances at 31 December 2007 52,495 254,365 (11,022) 26,083 236,324 (90,269) 140,450 608,426 309,162 917,588

2008 net profit - - - - - - 150,686 150,686 31,744 182,430

Changes in hedging reserves - - - - - (65,195) - (65,195) (13,620) (78,815)

Measurement of financial instruments held for sale

- - - - - (24,637) - (24,637) (24,637)

Translation differences - - - - - (181,443) - (181,443) (43,348) (224,791)

Total recognised income and expenses

- - - - - (271,275) 150,686 (120,589) (25,224) (145,813)

Distribution of 2007 profit - - - (14,864) 120,299 - (140,450) (35,015) - (35,015)

Treasury shares - - (23,983) - - - - (23,983) - (23,983)

Treasury share transactions - - - (3,466) - - - (3,466) - (3,466)

Changes in the scope of consolidation

- - - 13,326 (16,253) - - (2,927) (3,336) (6,263)

Balances at 31 December 2008 52,495 254,365 (35,005) 21,079 340,370 (361,544) 150,686 422,446 280,602 703,048

84


Consolidated cash flow statements for the year ended 31 december 2008 and 2007

The accompanying Notes A.1 to F are an integral part of the consolidated cash flow statement for the year ended 31 December 2008.

Thousands of euros

2008 2007

A) CASH FLOWS FROM OPERATING ACTIVITIES (1+2+3+4) 553,928 500,233

1.Profit before tax 266,999 230,814

2.Adjustments for 340,583 301,279

(+) Depreciation and amortisation charge 184,893 158,389

(+/-) Other adjustments (net) 155,690 142,890

3.Changes in working capital (65,090) (38,879)

4. Other cash flows from operating activities 11,436 7,019

(+/-) Income tax recovered /(paid) (45,644) (53,655)

(+/-) Other collections/(payments) from operating activities 57,080 60,674

B) CASH FLOWS FROM INVESTING ACTIVITIES (1+2+3) (1,000,176) (810,869)

1.Payments due to investment (1,178,008) (900,683)

(-) Group companies, associates and business units (270,258) (217,481)

(-) Property, plant and equipment, intangible assets and investment property (827,018) (605,414)

(-) Other financial assets (80,732) (77,788)

2.Proceeds from disposal 88,691 31,583

(+) Group companies, associates and business units 72,185 7,668

(+) Property, plant and equipment, intangible assets and investment property 7,336 23,915

(+) Other financial assets 9,170 -

3.Other cash flows from investing activities 89,141 58,231

(+) Dividends received 6,489 83

(+) Interest received 82,652 58,148

C) CASH FLOWS FROM FINANCING ACTIVITIES (1+2+3+4) 315,565 603,445

1.Proceeds and (payments) relating to equity instruments (27,449) (11,022)

(-) Acquisition (114,328) (38,708)

(+) Disposal 86,879 27,686

2. Proceeds and (payments) relating to financial liability instruments 700,505 862,099

(+) Issue 1,276,966 1,247,151

(+/-) Other adjustments to profit (net) (576,461) (385,052)

3.Dividends and returns on other equity instruments paid (35,015) (26,273)

4. Other cash flows from financing activities (322,476) (221,359)

(-) Interest paid (297,334) (225,563)

(+/-) Other collections/(payments) from financing activities (25,142) 4,204

D) EFFECT OF FOREIGN EXCHANGE RATE CHANGES (13,826) (9,504)

E) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C+D) (144,509) 283,305

F) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 647,842 364,537

G) CASH AND CASH EQUIVALENTS AT END OF YEAR (E+F) 503,333 647,842

COMPOSITION OF CASH AND CASH EQUIVALENTS AT END OF YEAR

(+) Cash on hand and at banks 279,413 445,504

(+) Other financial assets 223,920 202,338

TOTAL CASH AND CASH EQUIVALENTS AT END OF YEAR 503,333 647,842

85


2008

86


Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with

IFRSs as adopted by the European Union (see Notes B and F). In the event of a discrepancy, the Spanish-language

version prevails

Notes to the consolidated financial statements for the year ended 31 December 2008.

OBRASCÓN HUARTE LAIN, S.A. AND SUBSIDIARIES

A.- General information

A.1. Company name and registered office

Obrascón Huarte Lain, S.A., formerly Sociedad General de Obras y Construcciones Obrascón, S.A. (the “Parent”)

was incorporated on 15 May 1911 and has its registered office in Madrid, at Paseo de la Castellana, 259 D.

A.2. Lines of business

The main business activities carried on by the companies composing the Obrascón Huarte Lain Group are

classified as follows:

Construction

• Construction of all manner of civil engineering works and building construction for public agencies and

private customers, both in Spain and abroad.

Infrastructure concession

• Operation of infrastructure administrative concessions relating mainly to transport, car parks, ports and

airports.

Industrial

• Industrial engineering, particularly complete industrial plants or systems, including the design, construction,

maintenance and operation thereof and any other activity related to mining, gas, oil, chemicals,

petrochemicals and energy.

Services

• Management, operation, upkeep and maintenance of urban infrastructure (roads, railways and buildings)

and equipment.

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2008

• Water cycle projects, technical and scientific advisory services and engineering services for water supply

and treatment facilities.

• Environmental restoration services.

• Operation of water and environmental concessions.

• Operation of hotel complexes and large shopping centres.

• Care services.

A.3. Profit for the year, changes in equity attributable to the Parent and changes in cash flows

a) Profit for the year

The profit for 2008 attributable to the Parent amounted to EUR 150,686 thousand, representing 3.8% of revenue

and growth of 7.3% with respect to 2007.

The detail of the income statements for the two years is as follows:

Thousands of euros

Concept 2008 2007 % change

Revenue 4,008,777 3,764,419 6.5

EBITDA 607,582 542,941 11.9

EBIT 422,689 373,704 13.1

Financial and other results (155,690) (142,890) 9.0

Profit before tax 266,999 230,814 15.7

Income tax (84,569) (55,445) 52.5

Minority interests (31,744) (34,919) (9.1)

Profit attributable to the Parent 150,686 140,450 7.3

b) Changes in equity attributable to the Parent

The changes in the equity attributable to the Parent in 2008 and 2007 were as follows:

88


Thousands of euros

Concept

Balance at 31 December 2006 541,158

Net profit for 2007 140,450

Hedging reserves 16,818

Translation differences (58,365)

Valuation adjustments relating to available-for-sale financial assets (2,639)

Distribution of 2006 profit (26,273)

Treasury shares (11,022)

Treasury share transactions (846)

Change in the scope of consolidation 9,145


Net profit for 2008 150,686

Hedging reserves (65,195)

Translation differences (181,443)

Valuation adjustments relating to available-for-sale financial assets (24,637)

Distribution of 2007 profit (35,015)

Treasury shares (23,983)

Treasury share transactions (3,466)

Change in the scope of consolidation (2,927)


c) Changes in cash flows

The cash flows in 2008 compared with those of 2007, classified on the basis of whether they arise from operating

activities, investing activities or financing activities, are summarised as follows:

Thousands of euros

Cash flows 2008 2007 Difference

From operating activities 553,928 500,233 53,695

From investing activities (1,000,176) (810,869) (189,307)

From financing activities: 315,565 603,445 (287,880)

Changes in recourse borrowings 232,523 551,624 (319,101)

Changes in non-recourse borrowings 467,982 310,475 157,507

Other changes (384,940) (258,654) (126,286)

Effect of changes in exchange rates (13,826) (9,504) (4,322)

Net increase/(decrease) in cash and cash equivalents (144,509) 283,305 (427,814)

Cash and cash equivalents at beginning of year 647,842 364,537 283,305

Cash and cash equivalents at beginning of year 503,333 647,842 (144,509)

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2008

A.4. Proposed distribution of profit and dividend

The distribution of the profit for 2008 that the directors of Obrascón Huarte Lain, S.A. will propose for approval

by shareholders at the Annual General Meeting is as follows:

Thousands of euros

Concept

2008 profit 55,402

Distribution:

Dividends 37,674

To voluntary reserves 17,728

The directors of Obrascón Huarte Lain, S.A. will propose to the shareholders at the Annual General Meeting the

payment of a total gross dividend of EUR 37,674 thousand with a charge to 2008 profit.

The distribution of profit proposed by the directors does not include any appropriation to the legal reserve,

since the stipulated level had been reached in prior years (see Note C.12).

A.5. Earnings per share

a) Basic earnings per share

Basic earnings per share are calculated by dividing the consolidated profit for the year attributable to the Parent

by the weighted average number of ordinary shares outstanding during the year, excluding the average number

of treasury shares held in the year.

b) Diluted earnings per share

Diluted earnings per share are calculated in a similar way to basic earnings per share; however, the weighted

average number of shares outstanding is increased by share options, warrants and convertible debt.

In 2008 and 2007 there were no differences between the basic earnings per share and diluted earnings per

share.

Concept 2008 2007

Consolidated profit for the year attributable to the Parent (thousands of euros) 150,686 140,450

Average number of shares outstanding 86,405,131 87,243,468

Basic earnings per share (euros) 1.74 1.61

Diluted earnings per share (euros) 1.74 1.61

90


B.- Basis of presentation and basis of consolidation

B.1. Basis of presentation

The consolidated financial statements for 2008 of the Obrascón Huarte Lain Group were prepared:

• By the Parent’s directors, at the Board of Directors meeting held on 31 March 2009.

• In accordance with International Financial Reporting Standards (IFRSs) as adopted by the European

Union.

• Taking into account all the mandatory accounting principles and policies and measurement bases with

a significant effect on the consolidated financial statements. Note B.6 summarises the most significant

accounting principles and policies and measurement bases applied in the preparation of the Group’s 2008

consolidated financial statements.

• So that they present fairly the Group’s consolidated equity and financial position at 31 December 2008,

and the results of its operations, the changes in consolidated equity and the consolidated cash flows in

2008.

• On the basis of the accounting records kept by the Parent and by the other Group companies.

However, since the accounting principles and policies and measurement bases used in preparing the Group’s

consolidated financial statements for 2008 (IFRSs) differ from those used by certain Group companies

(local standards), the required adjustments and reclassifications were made on consolidation to unify

the accounting principles and policies and measurement bases used and to make them compliant with

International Financial Reporting Standards (IFRSs).

The Group’s consolidated financial statements for 2007 were approved by the shareholders at the Annual

General Meeting of the Parent on 20 May 2008. The 2008 consolidated financial statements of the Group and

the 2007 financial statements of the Parent and of the Group companies have not yet been approved by their

shareholders at the respective Annual General Meetings. However, the Parent’s Board of Directors considers

that they will be approved without any changes.

B.2. International Financial Reporting Standards (IFRSs)

The basis of consolidation, accounting policies and measurement bases used to prepare the consolidated

financial statements for the year ended 31 December 2008 are the same as those used in the 2007 consolidated

financial statements.

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2008

Standards and interpretations in force in 2008

IFRIC 11 IFRS 2 Group and Treasury Share Transactions and the amendment to IAS 39/IFRS 7 Reclassification of

Financial Assets became effective for the first time in 2008.

The adoption of these new interpretations and amendments did not have any effect on the Group’s consolidated

financial statements.

Standards and interpretations issued but not yet in force

At the date of preparation of these consolidated financial statements the following standards and interpretations

had been published by the IASB but had not yet come into force, either because they became effective after

the date of the consolidated financial statements or because they have not yet been adopted by the European

Union:

Standards and amendments to standards: Obligatory application in the years beginning

on or after

IFRS 8 Operating Segments 1 January 2009

Revision of IAS 23 Borrowing Costs 1 January 2009

Revision of IAS 1 Presentation of Financial Statements 1 January 2009

Revision of IFRS 3 (1) Business Combinations 1 July 2009

Amendment to IAS 27 (1) Consolidated and Separate Financial Statements 1 July 2009

Amendment to IFRS 2 Vesting Conditions and Cancellations 1 January 2009

Amendment to IAS 32 and IAS 1 (1) Puttable Financial Instruments and Obligations Arising on Liquidation

1 January 2009

Amendment to IFRS 1 and IAS 27 (1) Cost of an Investment in a Subsidiary in the Separate Financial Statements of a parent

1 January 2009

Amendment to IAS 39 (1) Eligible Hedged Items 1 July 2009

Interpretations:

IFRIC 12 (1) Service Concession Arrangements (2)

IFRIC 13 Customer Loyalty Programmes 1 January 2009 (3)

IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

1 January 2009 (3)

IFRIC 15 (1) Agreements for the Construction of Real Estate 1 January 2009

IFRIC 16 (1) Hedges of a Net Investment in a Foreign Operation 1 October 2008

IFRIC 17 (1) Distributions of Non-Cash Assets to Owners 1 July 2009

(1) Standards and interpretations not adopted by the European Union at the date of these consolidated financial statements.(2) This interpretation was endorsed by the European Union on 26 March 2009 and is effective from the first year beginning after 29 March 2009 but may be applied early. (3) Obligatory application as of the date of approval published in the Official Journal of the European Union.

IFRIC 12 was endorsed by the European Union on 26 March 2009. The Group’s directors are currently assessing

the impact that the application of this interpretation will have on the accompanying consolidated financial

statements.

92


Except as described in the preceding paragraph, the Group’s directors do not expect significant changes to arise

as a result of the introduction of other standards, amendments and interpretations that have been published

but not yet come into force, since the standards are to be applied prospectively, the amendments relate to

presentation and disclosure and/or the matters are not applicable to the Group’s operations.

B.3. Currency

These consolidated financial statements are presented in euros since this is the currency of the primary economic

environment in which the Group operates. Foreign operations are accounted for in accordance with the policies

established in Note B.6.9.

B.4. Responsibility for the information and use of estimates

The information in these financial statements is the responsibility of the Group’s directors.

In the Group’s consolidated financial statements for 2008 estimates were occasionally made by the senior

executives of the Group and of the Group companies, later ratified by the directors, in order to quantify certain

of the assets, liabilities, income, expenses and obligations reported herein. These estimates relate basically

to the following:

• The impairment losses on certain assets.

• The useful life of the property, plant and equipment and intangible assets.

• The amount of certain provisions.

• The measurement of goodwill.

• The fair value of certain unquoted assets

Although these estimates were made with the best information available at 31 December 2008 and 2007, events

that may take place in the future might make it necessary to change these estimates in coming years. Changes

in accounting estimates would be applied in accordance with the requirements of IAS 8, recognising the effects

of the change in estimates in the related consolidated income statements.

As required by IAS 1, the information relating to 2008 is presented, for comparison purposes, with similar

information relating to 2007 and, accordingly, it does not constitute the Group’s complete consolidated financial

statements for 2007.

B.5. Basis of consolidation

a) Subsidiaries:

“Subsidiaries” are defined as companies over which the Parent has the capacity to exercise control; this capacity

is evidenced by the power to govern the financial and operating policies of an investee so as to obtain benefits

from its activities. This control is presumed to exist when the Parent owns directly or indirectly more than half of

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2008

the voting power of the investee or, should the percentage of ownership be lower, when there are agreements

with other shareholders that give the Parent control.

The financial statements of the subsidiaries are fully consolidated with those of the Parent. Accordingly:

• The results from intra-Group transactions are eliminated on consolidation and are deferred until they

are realised vis-à-vis non-Group third parties, with the exception of those relating to work performed for

concession operators.

• Also, receivables, payables, income and costs between companies included in the consolidable group are

eliminated from the consolidated financial statements.

• Any excess of the cost of the investments in the consolidated companies over the corresponding underlying

carrying amounts arising as a result of the acquisition is allocated to certain assets and liabilities up to the

limit of the market value of each item.

• The resulting positive difference, if any, after allocation of the excess to assets and liabilities is recognised

under “Goodwill” on the asset side of the balance sheet.

• Should the difference between the acquisition cost of the investments and their underlying carrying amount

be negative, it will be taken to income.

The minority shareholders’ share of:

• The equity of investees is presented under “Equity - Minority Interests” in the consolidated balance

sheet.

• The profit or loss for the year is presented under “Minority Interests” in the consolidated income

statement.

b) Joint ventures:

A joint venture is a contractual arrangement whereby two or more companies undertake operations, hold assets

or have interests in entities so that strategic financial and operating decisions affecting the joint venture require

the unanimous consent of the venturers.

The financial statements of the joint ventures are proportionately consolidated with those of the Parent.

Accordingly:

94


• The results from intra-Group transactions are eliminated on consolidation, in proportion to the Parent’s

ownership interest in the joint venture, and are deferred until they are realised vis-à-vis non-Group third

parties, with the exception of those relating to work performed for concession operators.

• Also, receivables, payables, income and costs between companies included in the consolidable group are

eliminated from the consolidated financial statements, in the same proportion to the Parent’s ownership

interest in the joint venture.

• Any excess of the cost of the interests in joint ventures over the corresponding underlying carrying amounts

arising as a result of the acquisition is allocated to certain assets and liabilities up to the limit of the market

value of each item.

• The resulting positive difference, if any, after allocation of the excess to assets and liabilities is recognised

under “Goodwill” on the asset side of the consolidated balance sheet.

• Should the difference between the acquisition cost of the investments and their underlying carrying amount

be negative, it will be taken to income.

The assets and liabilities assigned by the Group to jointly controlled operations are recognised in the consolidated

balance sheet classified according to their specific nature. Similarly, the Group’s share of the income and

expenses of joint ventures is recognised in the consolidated income statement on the basis of the nature of

the related items.

c) Associates:

Associates are companies over which the Parent is in a position to exercise significant influence, but not control

or joint control with other shareholders.

In the consolidated financial statements, investments in associates are accounted for using the equity method.

Accordingly:

• They are accounted for at the Group’s share of their net assets, less any impairment of the investment.

• The proportional part of the equity of the associate attributable to the Group is compared with the cost of

acquisition of the investment, and any excess or deficiency attributable to identified assets and liabilities

increases or reduces the initial measurement thereof.

• Any remaining excess is recognised under “Investments Accounted for Using the Equity Method” on the

asset side of the balance sheet, whereas any remaining deficiency is allocated to profit or loss.

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2008

• If as a result of losses incurred by an associate its equity were negative, the investment should be presented

in the Group’s consolidated balance sheet with a zero value, unless the Group is obliged to give it financial

support, in which case the related provision to cover the risk would be recorded.

d) Scope of consolidation:

The companies included in the scope of consolidation at 31 December 2008 are detailed in Appendix I.

The activities, the registered offices, the detail of equity and the net cost of the investment of the most significant

companies forming the scope of consolidation are included in Appendixes II and III.

e) Changes in the scope of consolidation:

The following changes arose in the scope of consolidation in 2008:

Inclusion of companies Nº of companies

Fully consolidated companies 28

Equity method 7

Total inclusions 35

Exclusion of companies Nº of companies

Fully consolidated companies 4

Proportionate consolidation 4

Equity method 4

Total exclusions 12

The detail of the companies and the reason for their inclusion or exclusion are disclosed in Appendix IV.

The main companies included in the scope of consolidation in 2008, due to acquisition, were Arellano

Construction Co. (see Note C.4) and the companies that make up the industrial business line: Ecolaire España,

S.A., Chemtrol Proyectos y Sistemas, S.L. and Proyectos y Sistemas, S.A. (see Note C.3.).

B.6.- Accounting principles and policies and measurement bases used

The accounting principles and policies and measurement bases applied in preparing the Group’s consolidated

financial statements for 2008 were as follows:

96


1. Property, plant and equipment

Property, plant and equipment are recognised at acquisition cost (revalued, where appropriate, in accordance

with various legal provisions prior to the date of transition to IFRSs, including Royal Decree-Law 7/1996) less

any accumulated depreciation and any recognised impairment loss.

However, IFRS 1 permitted the measurement of individual items at their fair value in the first-time application.

Accordingly, the Group revalued land in Azuqueca de Henares (Guadalajara), which gave rise to an increase in

reserves of EUR 5,900 thousand.

The costs of expansion, modernisation or improvements leading to increased productivity, capacity or efficiency

or to a lengthening of the useful lives of the assets are capitalised.

Repairs that do not lead to a lengthening of the useful life of the assets and maintenance costs are charged to

the consolidated income statement for the year in which they are incurred.

The Group capitalises interest during the non-current asset construction period as indicated in Note B.6.18.

Group work on property, plant and equipment is recognised at accumulated cost (external costs, internal costs

calculated on the basis of in-house consumption of warehouse materials and manufacturing costs allocated

using hourly absorption rates similar to those used for inventory measurement).

Except for concession assets, depreciation is calculated using the straight-line method on the basis of the

acquisition cost of the assets less their residual value; the land on which the buildings and other structures

stand has an indefinite useful life and, therefore, is not depreciated.

The period property, plant and equipment depreciation charge is recognised in the consolidated income

statement at rates based on the following years of estimated useful life of the various assets.

Concept Years of useful life

Buildings 25-50

Machinery 6-16

Non-current assets of concession operators (*)

Other fixtures, tools and furniture 10

Other items of property, plant and equipment 3-5

(*) Non-current assets of concession operators are depreciated on the basis of the pattern of consumption (production units) of the concession assets only during the term of the concession.

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2008

The Group companies consider that the periodic maintenance plans for its fixtures, the cost of which is charged

to income in the year in which they are incurred, are sufficient to ensure the delivery of the assets concerned

in good working order on completion of the concession period.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned

assets of the same nature.

At each accounting close, the consolidated companies assess whether there is any internal or external indication

that the carrying amounts of their property, plant and equipment items exceed their related recoverable amounts,

i.e. the higher of the net amount which could be obtained if they were sold and the present value of the cash

flows (see Note B.4).

If this is the case, the carrying amount of the assets in question are reduced to their recoverable amount and the

future depreciation charges in the consolidated income statement are adjusted in proportion to the adjusted

carrying amount and the new remaining useful lives of the assets should such a re-estimation be required.

Similarly, when there are indications that the value of property, plant and equipment has recovered, the

consolidated companies recognise the reversal of the impairment loss recognised in prior periods and adjust

the depreciation charges in future consolidated income statements up to a maximum of the original carrying

amount.

2. Investment property

“Investment Property” in the accompanying consolidated balance sheet reflects the values of the land, buildings

and other structures held either to earn rentals or for capital appreciation as a result of future increases in

market prices.

Measurement: land is measured at acquisition cost increased by site clearance and preparation costs. Structures

are measured at the cost of the related progress billings for completed construction work plus contract costs

(site management, levies, architects’ fees, etc.) and are depreciated on a straight-line basis over their useful

lives, which are the same as those used for similar items of property, plant and equipment.

Borrowing costs: borrowing costs attributable to these investments are capitalised during the construction

period until the properties are ready for sale and are treated as an addition to the value of the investment.

Interest income obtained from the short-term investment of cash surpluses is deducted from the cost of the

investment.

98


Recognition of revenue and profit or loss: revenue and profit or loss are recognised when the assets are sold

and the sale has been executed in a public deed, which is when the rights and obligations inherent thereto are

transferred. Rental income is allocated to the consolidated income statement on an accrual basis.

Expense recognition: in rentals, expenses are recognised on an accrual basis and all maintenance, management

and impairment costs relating to the leased assets are charged to income.

At the end of each reporting period, the Group analyses whether the carrying amount of investment property

exceeds fair value and, if so, it makes the appropriate valuation adjustment in the consolidated income statement

by recognising an impairment loss in income to reduce the carrying amount to fair value.

3. Goodwill

Any excess of the costs of acquisition of an investment in a company over its underlying carrying amount is

allocated to certain assets and liabilities on consolidation.

This excess is allocated as follows:

1. If it is attributable to specific assets and liabilities of the company acquired, increasing the value of the

assets acquired (or reducing the value of the liabilities acquired).

2. If it is attributable to specific intangible assets, recognising it explicitly in the consolidated balance

sheet.

3. The remainder, if any, is recognised under “Goodwill” on the asset side of the consolidated balance

sheet.

At the end of each reporting period it is analysed whether as a result of any impairment the value of the goodwill

is lower than its carrying amount. If so, the difference is eliminated with a charge to the consolidated income

statement.

These impairment losses recognised for goodwill are not reversed in a subsequent period.

Goodwill arising from the acquisition of foreign companies is translated to euros at the closing rate.

4. Impairment of property, plant and equipment and intangible assets

The Group reviews the carrying amounts of its tangible and intangible assets to compare that amount with the

recoverable amount so as to determine whether there is any impairment loss.

Recoverable amount is the higher of:

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2008

• Fair value.

The price that would be agreed upon by two independent parties, less costs to sell; and

• Value in use.

Estimated present value of the expected future cash flows, using a pre-tax discount rate, both during the

use of the asset and from the possible disposal of the asset at the end of its useful life.

If the recoverable amount of an asset is less than its carrying amount, an impairment loss is recognised.

When an impairment loss subsequently reverses, income is recorded up to the amount of the impairment loss

previously recognised.

5. Intangible assets

Intangible assets are recognised initially at acquisition or production cost.

They are subsequently measured at acquisition or production cost less any accumulated amortisation and any

accumulated impairment losses.

Computer software

This heading includes mainly the costs arising from the installation and acquisition of computer software, which

is amortised on a straight-line basis over a maximum period of five years.

Other intangible assets

“Other Intangible Assets” includes mainly the operating rights relating to administrative concessions, which

are amortised on the basis of the pattern of consumption (units of production).

It also includes development expenditure, which is capitalised if it meets the requirements of identifiability,

reliability in cost measurement and high probability that the assets created will generate economic benefits.

These costs are amortised on a straight-line basis over the useful life of the asset.

Expenditure on research activities is recognised as an expense in the year in which it is incurred.

Also, under IFRS 3, all the assets of a business combination, including intangible assets, regardless of whether

they had been previously recognised in the acquiree’s balance sheet, must be measured at fair value, provided

that they meet certain identifiability and separability criteria. In this regard, this heading includes the amount

relating to the measurement of the backlog and the customer portfolio of the acquirees at the date of acquisition,

taking as a reference the projected margins after taxes, projected expenditure and the term of the contracts.

The amount relating to the backlog will be amortised over the residual term of the contracts and the customer

portfolio will be amortised over the estimated average useful life thereof.

100


6. Financial assets

These are assets representing collection rights for the Group as a result of investments or loans. These rights

are classified as current or non-current on the basis of whether they are due to be settled within less than or

more than 12 months, respectively. They are made up of:

Investment securities:

Financial assets represented by securities that can be classified as:

• Held-to-maturity investments: securities with fixed or determinable payments and fixed maturity. The Group

has the positive intention to hold these securities from the date of purchase to the date of maturity.

These securities are recognised at acquisition cost, including transaction costs.

Any deficiency of the acquisition cost below the fair value of these assets at the end of the reporting period

is taken to profit or loss.

• Held-for-trading investments: securities acquired with the intention of generating a profit from fluctuations

in their purchase and sale prices.

These securities are also recognised at cost, including transaction costs.

Any deficiency of the acquisition cost below the fair value of these assets at the end of the reporting period

is also taken to the consolidated income statement.

• Available-for-sale financial assets: investments in financial assets from which the Group does not expect

to obtain a significant gain and which are made for cash management purposes.

If the fair value of these investments exceeds their carrying amounts, the value of the asset is increased and

the increase is recognised in equity. On disposal, this amount is transferred to the consolidated income

statement.

In the event of impairment, the amount credited to equity is reduced and, if the amount of the impairment

loss exceeds the amount previously credited to equity, the excess is charged to the consolidated income

statement.

Other loans:

“Other Loans” includes loans and receivables originated by the Group: financial assets originated by the

companies in exchange for supplying cash, goods or services directly to a debtor, which are measured at the

principal amount plus the accrued interest receivable.

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2008

Deposits and guarantees:

These are cash amounts securing project bids or contracts of another kind. These amounts are restricted as to

their use to the extent that the specific terms and conditions of each project bid or contract continue to exist.

Deposits and guarantees expiring within 12 months are classified as current items and those expiring within

more than 12 months are classified as non-current items.

7. Transfers of financial assets and derecognition of financial assets and liabilities

The accounting treatment of the transfers of financial assets depends on the extent to which the risks and

rewards associated with the transferred assets are contractually transferred to third parties.

Financial assets are only derecognised when they are realised or when the Group transfers substantially all the

inherent risks and rewards and control thereover to third parties.

Financial liabilities are only derecognised when the obligations giving rise to them no longer exist.

8. Inventories

“Inventories” in the consolidated balance sheet includes the assets that the consolidated companies:

• Hold for sale in the ordinary course of business;

• Have in the process of production, construction or development for such sale; or

• Expect to consume in the production process or in the provision of services.

All inventories are measured at the lower of cost and net realisable value.

Net realisable value is the estimated selling price net of all the costs required to complete the production of

inventories and to sell them.

Goods and work in progress are measured at production cost, which includes the cost of materials, direct labour

and production costs and the interest incurred during the construction period.

9. Foreign currency

The items included in the financial statements of each of the Group companies are measured in their respective

functional currencies.

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The consolidated financial statements are presented in euros, which is the Parent’s functional and presentation

currency.

In the individual financial statements of the Group companies, foreign currency transactions are translated as

follows:

• Transactions performed during the year in currencies other than the functional currency are translated at

the exchange rates prevailing at the transaction date.

• Monetary asset and liability balances denominated in currencies other than the functional currency (cash

and items with no impairment losses when converted to cash) are translated at the closing rates.

• Non-monetary asset and liability balances denominated in currencies other than the functional currency

are translated at the historical exchange rates.

Translation gains and losses are included in the consolidated income statement.

On consolidation, the balances of the financial statements of the consolidated companies whose functional

currency is not the euro are translated to euros as follows:

• Assets and liabilities are translated at the exchange rates prevailing at the reporting date.

• Income and expense items are translated at the average exchange rates for the year, unless exchange rates

fluctuate significantly, in which case they are translated at the closing rates.

• Equity is translated at the historical exchange rates.

Any exchange differences arising from the consolidation of companies with a functional currency other than the

euro are classified in the consolidated balance sheet under “Equity - Valuation Adjustments”.

Entities and branches located in hyperinflationary economies

None of the functional currencies of the subsidiaries, jointly controlled entities and associates located abroad

relate to hyperinflationary economies as defined by International Financial Reporting Standards. Accordingly,

at the 2008 accounting close it was not necessary to adjust the financial statements of any of the consolidated

entities to correct them for the effect of inflation.

10. Bonds and bank borrowings

Bonds and bank borrowings are measured at the amount received, net of direct issue costs, plus the accrued

interest payable at year-end. Borrowing costs are recognised on an accrual basis in the income statement using

103


2008

the method of modifying the nominal rate taking into account issue discounts, fees, expenses, etc. This method

is equivalent to using the effective interest rate, which is the rate that exactly matches the net value of the cash

receipts to the present value of future disbursements.

Debts due to be settled within 12 months of the balance sheet date are classified as current items and those

due to be settled within more than 12 months as non-current items.

11. Derivative financial instruments and hedges

In order to mitigate the economic effects of exchange rate and interest rate fluctuations to which the Group is

exposed as a result of its business activities, the Group uses derivative financial instruments, such as foreign

currency hedges, interest rate swaps and combined interest rate and foreign currency derivatives.

The Group also arranged a financial swap tied to the Group’s share price in order to hedge the potential loss

that might arise from the exercise of the options under the Incentive Plan described in Note C.23.3.

The derivatives arranged are future exchange commitments, on the basis of which the Group and banks agree

to exchange in the future interest payments, currencies, or both simultaneously. In the case of an interest rate

derivative, the commitment is to pay a fixed interest rate in exchange for receiving a floating interest rate, and

in the case of a foreign exchange derivative the commitment is to pay or receive a given amount of euros in

exchange for a given amount in another currency. In the case of the financial swap tied to the Parent’s share

price, the commitment is to pay or receive the result of the change in the share price with respect to a reference

price and to pay a floating interest rate.

It should be noted that when the Group arranges a derivative, it does not do so with the intention of settling it

early or of trading with it. The Group does not use derivatives for speculative purposes, but rather to mitigate

the economic effects that may arise from its foreign trade and financing activities due to exchange and interest

rate fluctuations.

Summarised below are the most essential aspects of accounting legislation relating to derivative financial

instruments.

11.1 Recognition on the balance sheet

Derivatives are recognised on the consolidated balance sheet at their market value in the same way as any

other financial asset or liability.

Market value (also known as fair value) is the net amount that the Group would have to pay or receive if the

derivative were settled at the measurement date, and is equal to the difference between the present value

of the future collections and payments agreed on by the Group and the related banks under the terms of the

derivative arranged.

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As in the case of other financial assets and liabilities, recognition of the fair value of a derivative gives rise to

a change in equity. The change in equity arises directly through “Equity - Valuation Adjustments” or indirectly

through profit or loss. The criteria applied in each case are described below.

11.2 Direct effect on equity or indirect effect through profit or loss

The fair value of a derivative changes during its term. Changes in fair value arise: as a result of the passage of

time; as a result of changes in interest rate and exchange rate curves; and, in the case of derivatives on shares,

also as a result of changes in share prices.

Only certain derivatives can be considered to qualify for hedge accounting.

The requirements that must be met for a derivative to be considered to qualify for hedge accounting are as

follows:

a. The underlying in relation to which the derivative is arranged to mitigate the economic effects that might

arise therefrom as a result of fluctuations in exchange rates, interest rates or both simultaneously must

initially be identified.

b. When the derivative is arranged, the reason for which it was arranged must be appropriately documented

and the hedged risk must be identified.

c. It must be demonstrated that the hedge is effective from the date of the arrangement of the derivative

to the date of its settlement, i.e. that it meets the objective initially defined. In order to assess this, the

effectiveness of the hedge is tested, and given effectiveness levels must be scored.

When the derivative does not qualify for hedge accounting, or the Group voluntarily decides not to apply hedge

accounting, changes in fair value must be recognised in the consolidated income statement.

For derivatives that qualify for hedge accounting, under the relevant accounting standards changes in fair

value are recognised directly in equity or indirectly through profit or loss on the basis of the type of hedged

risk concerned:

a) Cash flow hedges

A derivative arranged to hedge against exposure to future variability in the expected cash flows in a foreign

currency transaction as a result of exchange rate fluctuations can be considered to be a cash flow hedge.

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2008

The same is true of a derivative arranged to hedge against exposure to future variability in the expected cash

flows in floating-rate financing as a result of interest rate fluctuations.

The portion of the gain or loss on hedging instruments whose purpose is to act as a cash flow hedge of

an underlying and which is determined to be an effective hedge is recognised under “Equity - Valuation

Adjustments”, and the ineffective portion of the gain or loss is recognised in the consolidated income

statement. The cumulative balance of “Equity - Valuation Adjustments” is transferred to the consolidated

income statement when and to the extent that the gains or losses on the hedged risk of the underlying also

start to be reflected in the consolidated income statement.

b) Hedges of net investments in foreign operations

When a derivative or another financial instrument is used to hedge against exchange rate fluctuations that

affect the carrying amount of net investments in foreign operations, it can be considered to be a hedge of a

net investment in a foreign operation.

The gains or losses on this type of derivative are recognised in the consolidated income statement in a similar

fashion to those on cash flow hedges. The only difference is that the accumulated amounts under “Equity

- Valuation Adjustments” are not recognised in the consolidated income statement until the investment is

sold.

c) Fair value hedges

Fair value hedges arise when a derivative is arranged to convert financing at a fixed interest rate into financing

at a floating interest rate in order to tie a portion of the financing to interest rate changes and, therefore, to

the performance of the market. They also include derivatives arranged to hedge the possible future changes

in the equivalent euro value of firm commitments to collect or pay certain amounts in foreign currency due

to exchange rate fluctuations.

When the purpose of the hedging derivative is to act as a fair value hedge, gains or losses on the derivative

and its underlying are recognised through profit or loss.

12. Provisions

The Group’s consolidated financial statements include all the material provisions with respect to which it is

considered that it is highly probable that the obligation covered by them will have to be settled. Contingent

liabilities are not recognised in the consolidated financial statements, but rather are disclosed, as required

by IAS 37.

106


Provisions are classified as current or non-current based on the estimated period of time for meeting the

obligations covered by them.

Litigation and claims in process

At the end of 2008 certain litigation and claims were in process against the consolidated companies arising

from the ordinary course of their operations. The Group’s legal advisers and directors consider that the outcome

of litigation and claims, none of which are for a significant individual amount, will not have a material effect on

the financial statements for the years in which they are settled.

Provision for project completion

This provision is intended to cover the expenses arising from completion of a project until its definitive settlement.

The estimated costs in this connection are accrued over the construction period on the basis of production

volumes.

Provision for management and other fees

This provision relates to the amount incurred for project management and inspection fees, laboratory, layout

and other fees payable at the consolidated balance sheet date. The amounts of these fees are set in the related

project specifications and in current legislation. The estimated costs in this connection are accrued over the

construction period on the basis of production volumes.

Provision for temporary site employees

This provision reflects the liability incurred for temporary site employees, based on the average remuneration

rate and the average years of service at the consolidated balance sheet date.

13. Revenue recognition

Revenue for each year is recognised on an accrual basis, i.e. when the actual flow of the related goods and

services occurs, regardless of when the resulting collections and payments are made.

Revenue is recognised, by type of business, as follows:

Construction

Revenue is calculated using the percentage of completion method whereby, in construction projects from which

a final profit is expected, the profit is calculated by applying to the expected profit the percentage resulting

from comparison of the actual costs incurred with the projected total costs until completion of the project. In

the case of projects from which a final loss is expected, the loss is recognised in full in the income statements

as soon as it becomes known.

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2008

In accordance with standard practice in the industry, the estimates used to calculate the stage of completion

include the possible effect of the net margin on certain contract modifications, addenda and settlements which

are being processed, and which the Group considers to be reasonably realisable.

“Trade Receivables for Sales and Services – Amounts to Be Billed for Work/Services Performed” on the asset

side of the consolidated balance sheet represents the difference between the amount of the completed work

recognised, including the adjustment to the margin recognised by application of the stage of completion, and

the amount of billed completed work up to the balance sheet date.

If the amount of production from inception is lower than the amount billed, the difference is recognised under

“Advances Received from Customers” on the liability side of the consolidated balance sheet.

Infrastructure concessions

Revenue is recognised on an accrual basis.

If a toll system is used, toll revisions are not applied until the new tolls come into force.

Revenue from motorway services is recognised on an accrual basis, regardless of whether or not a portion of

the contract has been collected in advance.

The Group recognises as “Other Operating Income” the collection rights acknowledged in the year by the

Mexican government at the subsidiary Concesionaria Mexiquense, S.A. de C.V. as guaranteed remuneration

under the concession arrangement.

Industrial

Revenue from sales and services is recognised on an accrual basis whereas revenue from installation and

assembly work is recognised when the contracts have been substantially performed, i.e. when the costs to be

incurred are not significant with respect to total costs.

Services

• Revenue in the case of infrastructure and urban equipment services is determined by measuring the

completed units at the contract price, per the main contract with the owners or per approved addenda or

amendments thereto. If these services have not been contractually approved, because the related contracts

are being drawn up, the related revenue will only be recognised if technical approval has been secured. If

because of their term and conditions contracts in this area meet the requirements provided for in IAS 11,

the percentage of completion method is also applied.

• Production in the area relating to the construction of water cycle projects is recognised by reference to the

stage of completion.

108


• In the case of services relating to environmental recovery, production is recognised as the services are

provided and is measured at the contract price.

• In the water concessions and projects area, which encompasses water treatment, purification and

desalination, production is recognised on the basis of the terms and conditions of each contract, applying

the tariffs and criteria stipulated therein to the services provided.

• Revenue in the hotel complex business is recognised on an accrued basis with reference to the services

provided.

• The shopping centres generate rental income, which is recognised on an accrual basis.

Price revisions are applied if they are provided for in the related contracts.

• In the care services area, revenue is recognised on an accrual basis. The monthly or daily charges are

applied on the basis of the use of the service. For private customers, the prices are set freely. Prices for

government subsidised customers have to be approved by the related authorities, which publish them in

the corresponding Official Gazettes at the beginning of each year.

• In the real estate business, revenue is recognised for the amounts executed in the public deeds relating to

completed buildings.

14. Deferred income

“Deferred Income” relates substantially in full to grants. Grants are credited to the consolidated income statement

in one or several years. Grants may be:

Grants related to income: grants to offset an expense or guarantee a minimum inflow of funds. They are credited

to “Other Operating Income” in the consolidated income statement in the same period as that in which the

associated expenses are recognised.

Grants related to assets: grants for the setting up or investment in long-term assets of a company, its investments

or to finance borrowings arising from such investments. Grants related to assets are recognised as deferred

income on the liability side of the consolidated balance sheet and are taken systematically to “Other Operating

Income” in the consolidated income statement over the useful lives of the assets concerned.

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2008

15. Share-based payment

Share-based payment plans

These plans are measured when granted using a binomial measurement model which takes into account the

exercise price, volatility, the option life, expected dividends, the risk-free interest rate and the assumptions

made to incorporate the effects of expected early exercise.

In accordance with IFRS 2, the aforementioned amount is allocated to income under “Staff Costs” over the

period in which the employee is required to stay at the company in order to exercise the plan and is allocated

to the consolidated income statement on a straight-line basis over the period between the grant date and the

exercise date. Pursuant to the Plan Regulations, the Company may choose whether the plan is settled in cash

or by issuing equity instruments. Company management considers that it does not have a present obligation

to settle in cash and, therefore, the balancing entry for the staff costs recognised is made in an equity account

without making any adjustment to the amount initially recognised, in accordance with the provisions of IFRS 2

on equity-settled share-based payment transactions.

Lastly, as detailed in Note C.18, in order to hedge the potential loss that might arise from the exercise of the

Plan, the Company arranged a financial instrument. This financial instrument is considered a derivative and is

accounted for accordingly (see Note B.6.11).

16. Termination benefits and post-employment benefits

The termination benefits that have to be paid to employees pursuant to the legislation applicable to each Group

company are charged to the consolidated income statement in the year in which they are paid.

If the Group were to establish a labour force restructuring plan, provisions for the costs of such a plan would

be recognised in the consolidated income statement when the detailed formal plan for the restructuring were

established and communicated to the parties concerned.

There are no restructuring plans making it necessary to recognise a provision in this connection.

The Group does not have post-employment benefit obligations in the form of pension plans or other benefits.

110


17. Leases

Leases are classified as finance or operating leases.

Finance leases are deemed to be those in which the risks and rewards relating to the leased asset are transferred

to the lessee, who, habitually but not necessarily, has the option to purchase the asset at the end of the lease

on the terms and conditions agreed on when the transaction was formalised. In leases of this nature:

• When the consolidated companies act as the lessor of an asset, the aggregate present values of the lease

payments receivable from the lessee plus, where appropriate, the price of exercising the purchase option

are recognised as accounts receivable (financial assets).

• When the consolidated companies act as the lessee, they present the cost of the leased assets in the

consolidated balance sheet, based on the nature of the leased asset, and, simultaneously, recognise a

liability for the same amount.

The assets are measured at the lower of fair value, i.e. at the price that would be set by two parties in an arm’s

length transaction, and the discounted present value of the amounts payable to the lessor plus the price of

exercising the purchase option.

These assets are depreciated on the basis of their nature using similar criteria to those applied to the items of

property, plant and equipment.

Operating leases are leases that do not transfer the risks and rewards incidental to ownership of an asset and

are accounted for on the basis of the contractual nature of each transaction. Income and expenses from these

transactions are allocated to the consolidated income statement on an accrual basis.

18. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of assets that take a lengthy

period of time to get ready for their use or sale are added directly to the cost of those assets, until such time as

the assets are ready for their use or sale.

Pursuant to IAS 23, investment income earned on the temporary investment of specific borrowings pending

their expenditure on qualifying assets is deducted from the borrowing costs.

All other borrowing costs are recognised in the consolidated income statement in the year in which they are

incurred.

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2008

19. Income tax

The Group companies’ income tax expense is calculated on the basis of accounting profit before taxes, increased

or decreased, as appropriate, by the permanent differences from taxable profit, net of tax relief and tax credits,

excluding tax withholdings and prepayments made during the year.

Deferred tax assets and liabilities are the taxes expected to be recoverable or payable on differences between

the carrying amounts of assets and liabilities in the financial statements and their tax bases. They are measured

at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled.

At 31 December 2008, most of the Spanish Group companies were taxed under the consolidated tax regime

and, accordingly, the income tax expense recognised in the consolidated income statement relates to the

sum of the tax expense of the consolidated tax group companies and of the companies not forming part of the

consolidated tax group, which are mainly the foreign companies.

20. Consolidated cash flow statement

Cash flows are inflows and outflows of cash and cash equivalents, which are short-term, highly liquid investments

that are subject to an insignificant risk of changes in value.

This statement reflects changes in cash flows in the year, classifying them as:

• Cash flows from operating activities: ordinary cash flows from Group companies and other activities that

are not investing or financing activities.

• Cash flows from investing activities: those arising from the acquisition and disposal of non-current

assets.

• Cash flows from financing activities: those arising from changes in financial liabilities and transactions with

shareholders.

The consolidated cash flow statement is prepared using the indirect method, i.e. on the basis of the changes in

the consolidated income statement and consolidated balance sheet, and is presented with comparable figures

for two consecutive periods.

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Thousands of euros

Concept Land and buildings

Machinery Non-current assets of

concession operators

Other fixtures, tools and furniture

Advances and property, plant and equipment in the course of

construction

Other items of property, plant and equipment

Total

Cost

Balances at 1 January 2007 184,573 214,065 2,925,292 59,544 5,345 18,911 3,407,730

Additions/Disposals due to change in the scope of consolidation

(701) (660) - (110) 39,785 (73) 38,241

Additions 43,248 44,344 685,429 16,876 45,608 11,087 846,592

Disposals (5,651) (17,000) (68,036) (12,234) (20,081) (4,499) (127,501)

Exchange differences (4,751) (3,446) (48,276) (664) (4,414) (375) (61,926)

Transfers and other (16,298) 523 (478) 93 (377) 174 (16,363)

Balances at 31 December 2007 200,420 237,826 3,493,931 63,505 65,866 25,225 4,086,773


14 8,038 (138,346) 1,401 - - (128,893)

Additions 8,580 50,400 790,010 24,208 20,453 9,258 902,909

Disposals (2,795) (14,509) (6,035) (3,439) (14,959) (5,309) (47,046)

Exchange differences (12,246) 1,448 (342,687) (736) (2,543) 9,175 (347,589)

Transfers and other 1,854 9,504 (5,433) 3,608 (21,847) 2,321 (9,993)

Balances at 31 December 2008 195,827 292,707 3,791,440 88,547 46,970 40,670 4,456,161

Accumulated depreciation and allowances

Balances at 1 January 2007 26,454 128,551 436,793 34,631 - 12,333 638,762


81 (266) - (17) - (41) (243)

Additions 7,083 21,199 102,072 6,437 - 3,246 140,037

Disposals (3,681) (9,242) (8,082) (6,710) - (1,951) (29,666)

Exchange differences 285 (1,753) 3,233 101 - (198) 1,668

Transfers and other (800) 177 (124) (54) - (48) (849)

Balances at 31 December 2007 29,422 138,666 533,892 34,388 - 13,341 749,709


10 5,604 (70,382) 777 - - (63,991)

Additions 12,004 31,066 91,476 11,468 - 4,780 150,794

Impairment losses - - 18,000 - - - 18,000

Disposals (2,285) (11,335) (1,450) (2,743) - (4,052) (21,865)

Exchange differences 41 699 (61,629) 93 - (626) (61,422)

Transfers and other 12 5,845 (4,858) (1) - 46 1,044

Balances at 31 December 2008 39,204 170,545 505,049 43,982 - 13,489 772,269

Net balances at 31 December 2007 170,998 99,160 2,960,039 29,117 65,866 11,884 3,337,064

Net balances at 31 December 2008 156,623 122,162 3,286,391 44,565 46,970 27,181 3,683,892

C.- Notes to the consolidated financial statements

C.1.- Property, plant and equipment

The changes in “Property, Plant and Equipment” in the consolidated balance sheets in 2008 and 2007 were

as follows:

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2008

The net balance at 31 December 2008 in the table above includes most notably the following items:

• EUR 2,399,923 thousand relating to net property, plant and equipment owned by the Group’s entities and

branches located abroad (31 December 2007: EUR 2,167,096 thousand).

• EUR 19,046 thousand relating to property, plant and equipment held by the consolidated companies under

finance leases at 31 December 2008 (31 December 2007: EUR 19,365 thousand).

• EUR 3,286,391 thousand (2007: EUR 2,960,039 thousand) relating to net property, plant and equipment

of concession operators which are being depreciated on the basis of the pattern of consumption (units of

production) of the concession assets.

• It should be noted with respect to concession operators that in 2008 the Group filed a claim to re-establish

the economic balance of the Autopista Eje Aeropuerto de Barajas (Madrid) concession, where the actual

traffic is substantially less than that stated in the tender specifications. In this regard, in 2008 the Group

performed an impairment test to determine any possible loss in value that might reduce the recoverable

amount of the property plant and equipment. As a result, impairment losses on property, plant and

equipment totalling EUR 18,000 thousand were recognised under “Changes in Provisions” in the consolidated

income statement (bringing the cumulative impairment losses recognised to EUR 48,000 thousand).

• At 31 December 2008, certain property, plant and equipment, with a carrying amount of EUR 91,579 thousand

(31 December 2007: EUR 116,232 thousand), were mortgaged as security for loans against which EUR 67,278

thousand had been drawn down (31 December 2007: EUR 74,676 thousand) (see Note C.17).

At 31 December 2008, “Property, Plant and Equipment of Concession Operators” included EUR 150,556 thousand

relating to borrowing costs capitalised during the construction period (31 December 2007: EUR 116,456 thousand).

Borrowing costs capitalised in 2008 amounted to EUR 34,100 thousand (2007: EUR 27,170 thousand).

At 31 December 2008 and 2007, there were no material amounts relating to items of property, plant and equipment

that were temporarily idle or retired from active use.

The Group takes out the required insurance policies to cover the possible risks to which its property, plant and

equipment are subject.

Property, plant and equipment with a gross value of EUR 108,864 thousand had been fully depreciated at 31

December 2008 (31 December 2007: EUR 117,959 thousand).

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Investments in concessions

Concession contracts are arrangements between the concession grantor, which is generally a public body,

and the Group companies to provide public services through the operation of certain assets required for the

provision of the service.

The concession right generally entails a monopoly on the provision of the service granted for a specified period

of time, after which, in general, the non-current concession assets required to provide the service have to be

returned to the concession grantor.

Revenue from performing the service may be received directly from the users or, sometimes, through the

concession grantor itself. The prices for providing the service are usually regulated by the grantor.

These projects are generally financed with long-term borrowings without recourse to the shareholders secured

mainly by the cash flows generated by the concession operator companies and their assets, accounts and

contractual rights. Since cash flows constitute the main security for the repayment of the borrowings, there

are restrictions on the use of the funds by the shareholders until certain conditions have been met, which is

assessed each year.

Also, reserves are recognised and continue to exist throughout the term of the borrowings, relating generally

to the six months following the servicing of the debt, which are restricted as to their use by the Company, and

whose purpose is to cater for the servicing of the debt if the cash flows generated by the Company prove to

be insufficient. These reserve accounts are classified under “Current Financial Assets – Other Loans” in the

consolidated balance sheet (see Note C.5.2).

The Group’s concessions at 31 December 2008 were as follows:

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2008

Operator Description of concession Location % Total projected

investment (millions of euros)

Remaining period (years)


Administradora Mexiquense del Aeropuerto Internacional de Toluca, S.A. de C.V. (1)

Toluca airport State of Mexico (Mexico) 32.67 300 47

Autopark, S.A. Underground car park Rio de Janeiro (Brazil) 90.00 9 34

Autopista Eje Aeropuerto Concesionaria Española, S.A. Barajas airport toll motorway Madrid (Spain) 100.00 427 19

Autopista Ezeiza Cañuelas, S.A. Ezeiza Cañuelas motorway Buenos Aires (Argentina) 71.35 93 12

Autopista Fernao Dias, S.A. Federal motorway Pouso Alegre-MG (Brazil) 60.00 816 24

Autopista Fluminense, S.A. Federal motorway Rio Bonito – RJ (Brazil) 60.00 615 24

Autopista Litoral Sul, S.A. Federal motorway Joinville – SC (Brazil) 60.00 758 24

Autopista Planalto Sul, S.A. Federal motorway Rio Negro – PR (Brazil) 60.00 461 24

Autopista Regis Bittencourt, S.A. Federal motorway Reistro – SP (Brazil) 60.00 1,082 24

Autovía de Aragón Tramo 1, S.A. A-2 road, Madrid R-2 section Madrid (Spain ) 95.00 233 18

Autovías, S.A. Sao Paulo motorway Sao Paulo (Brazil) 60.00 320 10

Autovías Concesionadas OHL, S.A. de C.V. Puebla road Puebla (Mexico) 100.00 134 29

Centrovías Sistemas Rodoviários, S.A. Sao Paulo motorway Sao Paulo (Brazil) 60.00 278 10

Cercanías Móstoles Navalcarnero, S.A. Railway line Madrid (Spain) 100.00 424 19

Concessionaria de Rodovías do Interior Paulista, S.A., Intervías Sao Paulo motorway Sao Paulo (Brazil) 60.00 501 19

Concesionaria Mexiquense, S.A. de C.V. Mexico City ring road State of Mexico (Mexico) 87.20 1,544 29

Euroglosa 45, Concesionaria de la Comunidad de Madrid, S.A M-45 road. N-V to N-IV section Madrid (Spain) 100.00 116 19

Grupo Autopistas Nacionales, S.A. Amozoc Perote motorway State of Mexico (Mexico) 55.00 179 25

Marina Urola, S.A. Marina Zumaia (Spain) 78.34 2 19

Metro Ligero Oeste, S.A. Pozuelo-Boadilla light rail Madrid (Spain) 51.00 937 28

Nautic Tarragona, S.A. (1) Marina Tarragona (Spain) 25.00 16 16

Nova Dársena Esportiva de Bará, S.A. Marina Barcelona (Spain) 50.00 38 27

Port Torredembarra, S.A. (1) Marina Torredembarra (Spain) 24.08 5 15

Sociedad Concesionaria Autopista del Sol, S.A. Santiago-San Antonio motorway Santiago (Chile) 75.03 152 10

Sociedad Concesionaria Autopista Los Andes, S.A. Route 60 motorway Santiago (Chile) 100.0 276 27

Sociedad Concesionaria Autopista Los Libertadores, S.A. Santiago-Los Andes motorway Santiago (Chile) 75.02 154 17

Terminales Marítimas del Sureste, S.A. Terminal operation Alicante (Spain) 50.00 111 27

Viaducto Bicentenario, S.A. de C.V. Flyover Mexico City (Mexico) 100.00 1,188 29

Vianorte, S.A. Sao Paulo motorway Sao Paulo (Brazil) 60.00 247 9

Environment

Ambient, Serviços Ambientais de Riberao Preto, S.A. Drinking water plant Riberao Preto (Brazil) 100.00 35 15

Aquaria Water LLC Desalination plant Massachussets (EEUU) 87.50 84 18

Biorreciclaje de Cádiz, S.A. (1) Municipal solid waste Cádiz (Spain) 32.66 - 16

Cádiz San Fernando, A.I.E (1) Drinking water plant Cádiz (Spain) 21.95 30 15

Desalant, S.A. Desalination plant Antofagasta (Chile) 100.00 49 13

Desalinizadora Arica, Ltda. Desalination plant Arica (Chile) 100.00 6 1

OHL Medio Ambiente, Inima, S.A. Desalination plant Almería (Spain) 25.00 - 20

Promoaqua Desalación de Los Cabos, S.A. de C.V. Desalination plant Los Cabos (Mexico) 90.00 34 18

SESAMM – Serviços de Saneamiento de Mogi Mirim, S.A. Water treatment plant Mogi Mirim - SP (Brazil) 57.00 17 29

Shariket Miyeh Ras Djinet, Spa (1) Desalination plant Cap Djinet (Argelia) 25.49 96 25

Shariket Tahlya Miyah Mostaganem, Spa (1) Desalination plant Mostaganem (Argelia) 25.50 157 25

Tractament Metropolitá de Fangs, S.L. Thermal sludge-drying plant Barcelona (Spain) 50.40 72 8

Other

Hospital del Sureste, S.A. (1) Hospital Madrid (Spain) 33.33 80 28

Nova Bocana Barcelona, S.A. (1) Hotel Barcelona (España) 25.00 178 33

Nuevo Hospital de Burgos, S.A. (1) Hospital Burgos (Spain) 20.00 269 28

Sacova Centros Residenciales, S.L. Retirement home Valencia Aut. Community (Spain)

100.00 70 41

Sociedad Concesionaria Centro de Justicia de Santiago, S.A. Law courts Santiago (Chile) 100.00 63 17

Urbs. ludex et Causidicus, S.A. (1) Law courts Barcelona (Spain) 20.00 371 30

(1) Companies included under “Investments Accounted for Using the Equity Method”.

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Under the related concession arrangements, the concession operators are required to make investments which

must be completed within the periods specified below:

Thousands of euros

Period

Within five years 4,185,540

Between five and ten years 1,256,568

After 10 years 2,953,601

Total 8,395,709

These investments will be financed through loans granted to the concession operators, capital increases and

the cash flows generated by the concession operators.

C.2. Investment property

The changes in “Investment Property” in the consolidated balance sheets in 2008 and 2007 were as follows:

Thousands of euros

Concept

Balances at 1 January 2007 69,543

Additions 11,713

Disposals (1,579)

Exchange differences (6,126)

Transfers 51

Balances at 31 December 2007 73,602

Additions 4,358

Disposals (11,978)

Exchange differences (9,423)

Transfers 11,403

Balances at 31 December 2008 67,962

At 31 December 2008, certain investment property, with a carrying amount of EUR 2,972 thousand (2007: EUR

3,848 thousand) was mortgaged as security for loans against which EUR 2,029 thousand had been drawn down

(31 December 2007: EUR 2,037 thousand) (see Note C.17).

At 31 December 2008, the main investment property was the Mayakoba tourism development in the Riviera

Maya district of Mexico, amounting to EUR 55,868 thousand (2007: EUR 60,419 thousand).

At 31 December 2008, the fair value of the Group’s investment property calculated on the basis of appraisals

and estimates provided by in-house valuers, amounted to EUR 128,882 thousand.

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2008

C.3. Goodwill

The detail, by company, of the balance of “Goodwill” in the consolidated balance sheets at 31 December 2008

and 2007, is as follows:

Thousands of euros

Companies giving rise to goodwill 2008 2007

Agrupación Guinovart Obras y Servicios Hispania, S.A. 2,350 2,350

Avalora Tecnologías de la Información, S.A. 225 225

Chemtrol Proyectos y Sistemas, S.A. 8,612 -

Construcciones Adolfo Sobrino, S.A. 3,408 3,408

Construcciones Enrique de Luis, S.A. 142 142

Constructora TP, S.A.C. 849 -

Ecolaire España, S.A. 8,716 -

Electrificaciones y Montajes Integrales OHL , S.A. 99 99

Ferrocivil, S.A. 7 7

Huartemex, S.A. de C.V. 132 132

Ingeniería de los Recursos Naturales, S.A. 66 66

Inmobiliaria Mayaluum, S.A. de C.V. 350 350

Instituto de Gestión Sanitaria, S.A.U. 399 399

Morkaitz, S.A. 42 42

OHL Medio Ambiente, Inima, S.A.U. 9,082 9,082

Proyectos y Servicios, S.A. 4,371 -

Total 38,850 16,302

The changes in 2008 and 2007 in “Goodwill” in the consolidated balance sheets were as follows:

Thousands of euros

Concept 2008 2007

Beginning balance 16,302 75,590

Additions/Disposals due to changes in the scope of consolidation

22,548 -

Allocations to assets - (59,288)

Ending balance 38,850 16,302

In 2008 all the shares of the companies that make up the Industrial line of business (Chemtrol Proyectos y

Sistemas, S.L., Ecolaire España, S.A. and Proyectos y Sistemas S.A.) were acquired.

The main data relating to these companies, which were acquired on 15 January 2008, are as follows:

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Concept Thousands of euros

Non-current assets 767

Current assets 12,124

Non-current liabilities (1,020)

Tax liabilities (1,198)

Non-current liabilities (6,822)

Cost 25,550

Profit contributed 472

Revenue contributed 25,520

The disposals in 2007 relate to the allocation to assets of Community Asphalt Corp. and The Tower Group, Inc.,

the estimation of which was completed in 2007. The goodwill arising on consolidation was allocated in full to

other intangible assets with finite useful lives, including most notably the backlog and the customer portfolio

of the acquirees.

The estimates and projections available to the Parent’s directors show that the projected profit and discounted

cash flows of these companies attributable to the Group adequately supports the carrying amount of the

goodwill recognised.

C.4. Intangible assets

The changes in “Intangible Assets” in the consolidated balance sheets at 31 December 2008 and 2007 were

as follows:

119


2008

Thousands of euros

Concept Computer software

Other intangible assets

Total

Cost

Balances at 1 January 2007 13,375 221,717 235,092

Additions 2,081 5,849 7,930

Disposals (194) (1,336) (1,530)

Transfers and other 481 43,050 43,531

Exchange differences 116 12,537 12,653

Balances at 31 December 2007 15,859 281,817 297,676


292 42 334

Additions 2,371 67,436 69,807

Disposals (3,418) (3,465) (6,883)

Transfers and other (625) - (625)

Exchange differences (39) (34,176) (34,215)


Accumulated amortisation

Balances at 1 January 2007 10,514 38,435 48,949

Additions 1,623 17,437 19,060

Disposals (174) (419) (593)

Transfers and other 20 (3,031) (3,011)

Exchange differences 99 1,880 1,979



189 42 231

Additions 1,836 16,731 18,567

Disposals (3,413) (2,663) (6,076)

Exchange differences (35) (7,726) (7,761)


Net balances at 31 December 2007 3,777 227,515 231,292

Net balances at 31 December 2008 3,781 250,968 254,749

At 31 December 2008, “Other Intangible Assets” included concession operator royalties amounting to EUR

145,473 thousand (2007: EUR 141,618 thousand), the breakdown of which was as follows:

Thousands of euros

Company 2008 2007

Autovías, S.A. 6,521 8,890

Centrovías Sistemas Rodoviarios, S.A. 9,287 12,492

Concessionaria de Rodovías do Interior Paulista, S.A. 4,260 5,033

Vianorte, S.A. 85,932 115,203

Viaducto Bicentenario, S.A. de C.V. 39,473 -

Total 145,473 141,618

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The remainder of “Other Intangible Assets” relates fundamentally to the value assigned on consolidation to

the customer portfolio and backlog of the acquirees.

The additions to “Other Intangible Assets” in 2008 include EUR 21,874 thousand relating to the acquisition of

70% of Arellano Construction Co. on 10 September 2008. The cost of the investment was EUR 27,357 thousand,

which is a provisional amount since it depends on the margins and net profit or loss of the acquirees in 2008

and 2009. Total revenue in 2008 amounted to EUR 74,949 thousand, of which EUR 28,829 thousand were

contributed to the consolidated income statement. Profit contributed to the consolidated income statement

totalled EUR 746 thousand. At the acquisition date, the acquiree’s non-current and current assets amounted

to EUR 490 thousand and EUR 22,266 thousand, respectively.

C.5. Financial assets

1. Investment securities

The detail of “Investment Securities” at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Non-current Current Non-current Current

Held-to-maturity securities 1,192 23,477 - 25,407

Available-for-sale securities 2,654 61,965 2,766 60,801

Subtotal 3,846 85,442 2,766 86,208

Impairment losses (872) (46,966) (872) (3,770)

Total 2,974 38,476 1,894 82,438

The amounts of investment securities classified as current relate in full to securities maturing at over 3 months

and under 12 months.

“Impairment Losses” relates to the Group’s best estimate in order to recognise the investment securities at

fair value.

2. Other loans and deposits and guarantees given

“Other Loans” includes mainly reserve accounts in accordance with the financing agreements of certain

concession operators and loans granted to other entities, for which provisions are recognised if there is any

collection risk.

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2008

All the initial amounts are increased by accrued interest receivable.

The cash deposits and guarantees arise as a result of project bids and contracts of various types. Deposits and

guarantees expiring within 12 months are classified as current items and those expiring within more than 12

months are classified as non-current items.

The detail is as follows:

Thousands of euros

Concept 2008 2007

Non-current Current Non-current Current

Other loans 203,140 212,497 198,914 97,335

Deposits and guarantees given 28,721 13,018 13,230 6,160

Impairment (16,647) (2,202) (18,856) (2,205)

Total, net 215,214 223,313 193,288 101,290

At 31 December 2008, the non-current balance of “Other Loans” included EUR 159,780 thousand (2007:

EUR 121,863 thousand) relating to collection rights of the subsidiary Concesionaria Mexiquense, S.A. de C.V.

acknowledged by the Mexican government (see Note B.6.13).

The non-current balance of “Other Loans” at 31 December 2008 included restricted reserve accounts amounting

to EUR 198,193 thousand (2007: EUR 91,360 thousand) used by certain concession operators to service debt.

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C.6. Investments accounted for using the equity method

The investments accounted for using the equity method at 31 December 2008 and 2007 were as follows:

Thousands of euros

Company 2008 2007

Administradora Mexiquense del Aeropuerto Internacional de Toluca, S.A. de C.V. 42,526 47,284

Avalora Tecnologías de la Información, S.A. 1,182 1,128

Cádiz San Fernando, A.I.E. 1,146 1,149

E.M.V. Alcalá de Henares, S.A. 2,003 1,948

Hospital del Sureste, S.A. 1,471 2,829

Mayakoba Thai, S.A. de C.V. 8,635 5,852

Nova Bocana Barcelona, S.A. 6,180 4,068

Nuevo Hospital de Burgos, S.A. 279 2,081

Operadora Mayakoba, S.A. de C.V. 15,020 14,321

Port Torredembarra, S.A. 1,003 718

Shariket Tahlya Miyah Mostaganem, Spa 5,362 1,431

Tomi Remont, a.s. 3,258 2,563

TSS, a.s. 16,644 13,322

Viceroy Resorts Mayakoba, S.R.L. de C.V. 5,987 5,911

Other 5,482 3,484

Total 116,178 108,089

The total basic aggregates (at 100%) of the investments accounted for using the equity method are as

follows:

Thousands of euros

Concept 2008 2007

Total assets 1,814,173 966,424

Total liabilities 1,483,628 545,660

Total equity 330,545 420,764

Total liabilities and equity 1,814,173 966,424

Revenue 110,305 91,237

Net profit 14,696 13,011

123


2008

The changes in “Investments Accounted for Using the Equity Method” in the consolidated balance sheets in

2008 and 2007 were as follows:

Thousands of euros

Concept 2008 2007

Beginning balance 108,089 88,000

Increases 11,945 17,074

Share of profit for the year 6,785 4,407

Decreases (11,079) (2,077)

Additions/Disposals due to change in the scope of consoli-dation 438 685

Ending balance 116,178 108,089

Appendixes I, II and III include a list of the main investments accounted for using the equity method, showing

the name, registered office, percentage of ownership and equity of the related companies and the net cost of

the investments.

C.7. Trade and other receivables

1. Trade receivables for sales and services

The detail of “Trade Receivables for Sales and Services” at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Trade receivables for sales and services

Amounts to be billed for work/services performed 546,177 506,942

Progress billings 761,570 739,629

Trade notes receivable 55,598 39,214

Retentions 142,438 113,113

Subtotal 1,505,783 1,398,898

Customer advances (418,866) (308,376)

Total, net 1,086,917 1,090,522

The detail of the balance of “Trade Receivables for Sales and Services”, by type of customer, is as follows:

Thousands of euros

Concept 2008 2007

Spain 917,990 989,175

Public sector 566,568 634,359

Central government 196,562 305,120

Autonomous community government 189,413 161,280

Local government 113,538 109,908

Other agencies 67,055 58,051

Private sector 351,422 354,816

Operations abroad 587,793 409,723

Total 1,505,783 1,398,898

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The average age of the balances receivable relating to progress billings, notes and retentions at 31 December

2008 was 86 days (2007: 85 days).

At 31 December 2008, the balance of “Trade Receivables for Sales and Services” was net of EUR 396,408 thousand

(2007: EUR 366,456 thousand) relating to the accounts receivable from customers assigned without recourse

to banks. Since these assignments are without recourse in the event of non-payment, they are treated as a

reduction of trade receivables. These transactions bear interest at normal market rates until the date stipulated

in the related assignment agreement.

The aforementioned amount includes that relating to sale of future collection rights arising from the project

contracts awarded under the “total price payment” system amounting to EUR 104,625 thousand (2007: EUR

104,657 thousand), which are deducted directly from the amounts to be billed for work performed.

The directors consider that the carrying amount of trade and other receivables approximates their realisable

value.

2. Other receivables

The detail of “Other Receivables” at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Gross balance Impairment Net balance Gross balance Impairment Net balance

Receivable from associates

127,100 (595) 126,505 110,585 (394) 110,191

Employee receivables 913 - 913 970 - 970

Tax receivables (Note C.21.7)

143,868 - 143,868 169,813 - 169,813

Sundry accounts receivable

162,077 (100,420) 61,657 214,418 (100,589) 113,829

Total 433,958 (101,015) 332,943 495,786 (100,983) 394,803

The balances receivable from associates relate mainly to transactions associated with the Group’s normal

business activities, performed on an arm’s length basis.

C.8. Cash and cash equivalents

“Cash and Cash Equivalents” relates to the Group’s fully liquid assets and includes cash on hand and at banks

and short-term bank deposits with an original maturity of three months or less. These balances are not restricted

as to their use and are not subject to a risk of changes in value.

Most of the balances relate to short-term deposits.

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2008

C.9. Share capital

The changes in the share capital of the Parent in 2008 and 2007 were as follows:

Concept Number of shares

Par value (thousands of euros)

Number of shares and par value of share capital at 1 January 2007 87,492,055 52,495

Number of shares and par value of share capital at 31 December 2007 87,492,055 52,495

Number of shares and par value of share capital at 1 January 2008 87,492,055 52,495

Number of shares and par value of share capital at 31 December 2008 87,492,055 52,495

At 2008 year-end, the share capital was represented by 87,492,055 fully subscribed and paid bearer shares of

EUR 0.60 par value each. The shares are listed on the Madrid and Barcelona Stock Exchanges and are traded

on the Spanish computerised trading system.

The detail of the only company with a direct or indirect ownership interest of 10% or more in the share capital

of the Parent at 31 December 2008 is as follows:

Company % of ownership

Inmobiliaria Espacio, S.A. 56.015

C.10. Share premium

The Consolidated Spanish Companies Law expressly permits the use of the share premium account balance

to increase the capital of the entities at which it is recognised and does not establish any specific restrictions

as to its use.

C.11. Treasury shares

The changes in “Treasury Shares” in 2008 and 2007 were as follows:

Concept No. of shares Thousands of euros

Balance at 31 December 2006 - -

Purchases 2,678,625 76,993

Sales (2,260,756) (65,971)

Balance at 31 December 2007 417,869 11,022

Purchases 6,734,570 114,328

Sales (4,172,177) (90,345)

Balance at 31 December 2008 2,980,262 35,005

126


The average price of the treasury shares at 31 December 2008 was EUR 11.75 (31 December 2007: EUR

26.38).

C.12. Reserves

The detail, by item, of the balances of “Reserves” in the consolidated balance sheets in 2008 and 2007 is

as follows:

Thousands of euros

Concept 2008 2007

Restricted reserves of the Parent

Legal reserve 10,499 10,499

Reserve for retired capital 1,231 1,231

Reserve for treasury shares - 1,763

Subtotal 11,730 13,493

Voluntary and consolidation reserves

Attributable to the Parent 9,349 12,590

Attributable to the consolidated companies 340,370 236,324

Subtotal 349,719 248,914

Total 361,449 262,407

Legal reserve

Under the Consolidated Spanish Companies Law, 10% of net profit for each year must be transferred to the

legal reserve until the balance of this reserve reaches at least 20% of the share capital. The legal reserve can be

used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased

share capital amount. Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to

offset losses, provided that sufficient other reserves are not available for this purpose.

The distribution of the Parent’s 2008 profit proposed by the directors does not include any appropriation to

the legal reserve, since the minimum legally required level had been reached in prior years.

Reserve for retired capital

As a result of the capital reduction through the retirement of treasury shares in 2006 and pursuant to current

legislation safeguarding the guarantee provided by equity vis-à-vis third parties, a reserve for retired capital

was recognised.

EUR 1,231 thousand were appropriated to this reserve with a charge to unrestricted voluntary reserves.

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2008

This reserve is restricted as to its use while the conditions that made it necessary to recognise it continue to

exist, i.e. it cannot be used until capital is increased once again by the related amount.

Reserves at consolidated companies

The detail, by company, of the balances of this account in the consolidated balance sheets at 31 December

2008 and 2007 is as follows:

Thousands of eurosCompany 2008 2007Administradora Mexiquense del Aeropuerto Internacional de Toluca, S.A. de C.V. 1,741 811Aeropistas, S.L. (22,115) (13,653)Agrupación Guinovart Obras y Servicios Hispania, S.A. - (813)Ambient Serviços Ambientais de Ribeirao Preto, S.A. (5,581) (9,621)Asfaltos y Construcciones Elsan, S.A. (74) 1,002Autopark, S.A. (226) (142)Autopista Eje Aeropuerto Concesionaria Española, S.A. (18,953) (20,378)Autopista Ezeiza Cañuelas, S.A. (17,418) (15,165)Autovías, S.A. 1,763 10,674Autovía de Aragón-Tramo 1, S.A. (293) (418)Avalora Tecnologías de la Información, S.A. 530 420Baja Puerto Escondido, S.A. de C.V. (150) -Centro Comercial Paseo de San Francisco, S.A. de C.V. 7,003 8,627Centrovías Sistemas Rodoviários, S.A. 5,266 23,543Cercanías Móstoles Navalcarnero, S.A. (684) (978)Community Asphalt Corp. 3,377 6,487Concesionaria Mexiquense, S.A. de C.V. 69,897 32,898Concessionaria de Rodovías do Interior Paulista, S.A. 36,782 22,659Construcciones Amozoc Perote, S.A. de C.V. 10,524 10,701Construcciones Enrique de Luis, S.A. 938 1,488Constructora de Proyectos Viales de México, S.A. de C.V. 76,120 71,488Constructora e Inmobiliaria Xalitic, S.A. de C.V. - 434Consulnima, S.L. - 104Desalant, S.A. (1,831) (1,182)Desalinizadora Arica, Ltda. 1,127 822E.M.V. Alcalá de Henares, S.A. 1,538 1,491Electrificaciones y Montajes Integrales OHL, S.A. 1,597 1,997Euroconcesiones, S.L. 1,057 -Empresa Constructora Huarte San Jose, Ltda. 265 272Euroglosa 45 Concesionaria de la Comunidad de Madrid, S.A. (1,377) (1,984)Gastronómica Santa Fé, S.A. de C.V. (5,697) (4,206)Golf de Mayakoba, S.A. de C.V. (1,795) 573Grupo Autopistas Nacionales, S.A. 1,485 681Huaribe, S.A. de C.V. (4,448) 306Huartemex, S.A. de C.V. 397 450Infraestructura Dos Mil, S.A. (3,774) (6,145)Ingeniería de los Recursos Naturales, S.A. 391 359Inima de México, S.A. de C.V. (1,017) (286)Inima USA Corporation (851) (847)Inmobiliaria Fumisa, S.A. de C.V. - (3,209)Inmobiliaria Mayaluum, S.A. de C.V. 4,689 985Islas de Mayakoba, S.A. de C.V. 586 (264)Jose Malvar Construcciones, S.A. - 909KMP Consult, a.s. - 103Lagunas de Mayakoba, S.A. de C.V. (985) (980)Latina Manutençao de Rodovías, Ltda. 461 430Marina Urola, S.A. (164) (141)Metro Ligero Oeste, S.A. (2,491) -Nautic Tarragona, S.A. 84 117 >>

128


Obras y Servicios Hispania Gas, S.A. 1,367 968Obrascón Huarte Lain, Construcción Internacional, S.L. (159) -OHL Andina, S.A. 16,815 17,809OHL Austral, S.A. 12,972 5,119OHL Brasil, S.A. 49,403 7,567OHL Central Europe, a.s. 102 526OHL Concesiones Chile, S.A. (196) 4,274OHL Concesiones Mexico, S.A. de C.V. México, S.A. de C.V. 9,720 (1,612)OHL Concesiones, S.L. 41,056 38,628OHL Finance, S.à.r.l. 612 618OHL Medio Ambiente Inima, S.A.U. 751 1,396OHL Medio Ambiente, Inima Chile Ltda. (209) (244)OHL ZS, a.s. 34,208 22,099Operadora Concesionaria Mexiquense, S.A. de C.V. 1,723 1,170Operadora Mayakoba, S.A. de C.V. (3,803) (1,528)PACSA, Servicios Urbanos y del Medio Natural, S.L. 1,611 -Pachira, S.L. 16,218 10,119Participes en Brasil, S.L. (1,038) -Paulista Infraestructura, Ltda. 4,181 4,190Port Torredembarra, S.A. 27 262Promoaqua Desalación de los Cabos, S.A. de C.V. (640) -Rentia Invest, a.s. (3,147) (3,138)S.A. Trabajos y Obras (16,216) 1,555Sacova Centros Residenciales, S.L. (960) (185)Seconmex Administración, S.A. de C.V. 257 138Sawgrass Rock Quarry Inc. (45) (297)Sociedad Concesionaria Autopista del Sol, S.A. (6,041) (3,566)Sociedad Concesionaria Autopista Los Andes, S.A. 592 592Sociedad Concesionaria Autopista Los Libertadores, S.A. (4,146) (54)Sociedad Concesionaria Centro de Justicia de Santiago, S.A. 3,148 3,150Sociedad Vehículo CA, S.L. 7,540 734Sociedade para Participaçao em Rodavías, S.A. (1,619) (992)Técnicas y Gestión Medioambiental, S.A. (53) (251)Tenedora de Participaciones Tecnológicas, S.A. 26,237 115Terminales Marítimas del Sureste, S.A. (115) -The Tower Group, Inc. 2,367 836Tomi Remont, a.s. 1,712 342Tractament Metropolitá de Fangs, S.L. 2,582 1,878Transportes Aéreos de Xalapa, S.A. de C.V. - (391)TSS, a.s. 5,422 1,628Urbanizadora Hispano Belga, S.A. 1,120 1,010Urbs Iudex et Causidicus, S.A. (331) (204)Viveros de Mayakoba, S.A. de C.V. 53 (84)ZPSV Caña, a.s. 926 490ZPSV, a.s. (393) (803)ZPSV a.s. (2,635) 1,152ZS Bratislava, a.s. 1,489 694Other 211 217Total 340,370 236,324

C.13. Capital management

The objective of the Group’s capital management is to maintain an optimal financial structure that enables it

to reduce the cost of capital but also guarantees the capacity to continue managing recurring operations and

undertaking new projects focused on growth and the creation of value. This Group objective is not officially

established and the Board of Directors has not set any parameters with respect thereto.

>>

129


2008

The Group uses three main sources to finance growth:

• Project finance, which is always long term and with recourse only to the cash flows generated and the

project assets being financed and always in the same currency as the revenue from the related project.

• Cash flows generated by the Group that are not related to project finance, including dividends arising

from projects.

• Long-term corporate finance, with recourse to the head of the Group at all times, of a moderate amount

with respect to equity and in proportion to the cash generated.

• Short-term corporate finance, with recourse to the head of the Group, used only to cover the possible

seasonality of business during the year.

The capital structure is controlled through gearing, i.e. the ratio of net financial debt to equity. The Group’s

directors consider that the gearing ratio at 31 December 2008 was adequate, the detail being as follows:

Thousands of euros

Concept 2008 % 2007 % Change %

Equity 703,048 917,588

With-recourse borrowings

Gross with-recourse borrowings 1,138,390 32.3 948,200 30.7 20.1

Current financial assets + cash and cash equivalents not related to non-recourse borrowings

421,810 618,187 -31.8

Net with-recourse borrowings 716,580 26.0 330,013 14.6 117.1

Net with-recourse borrowings/equity 101.9% 36.0%

Non-recourse borrowings

Gross non-recourse borrowings 2,382,171 67.7 2,143,733 69.3 11.1

Current financial assets + cash and cash equivalents related to non-recourse borrowings

343,312 213,383 60.9

Net non-recourse borrowings 2,038,859 74.0 1,930,350 85.4 5.6

Net non-recourse borrowings/equity 290.0% 210.4%

Total financial debt

Total gross financial debt 3,520,561 100.0 3,091,933 100.0 13.9

Total net financial debt 2,755,439 100.0 2,260,363 100.0 21.9

Total net debt/equity 391.9% 246.3%

The distribution of the Group’s borrowings between non-current and current is as follows, and reflects the

relative weight of non-current borrowings:

130


Thousands of euros

2008 % 2007 % Var.%

Gross non-current borrowings 3,119,753 100.0 2,587,282 100.0 20.6

With recourse 905,510 29.0 824,262 31.9 9.9

Non-recourse 2,214,243 71.0 1,763,020 68.1 25.6

Gross current borrowings 400,808 100.0 504,651 100.0 -20.6

With recourse 232,880 58.1 123,938 24.6 87.9

Non-recourse 167,928 41.9 380,713 75.4 -55.9

Total gross borrowings 3,520,561 100.0 3,091,933 100.0 13.9

Non-current 3,119,753 88.6 2,587,282 83.7 20.6

Current 400,808 11.4 504,651 16.3 -20.6

C.14. Valuation adjustments

1. Hedging reserves

Hedging reserves include the amount of changes in the fair value of financial derivatives, net of the related tax

effect.

The changes in the balance of “Hedging Reserves” in 2008 and 2007 were as follows:

Thousands of euros

Concept 2008 2007

Beginning balance (40,304) (57,122)

Hedges of companies existing at beginning of year (65,195) 16,818

Ending balance (105,499) (40,304)

2. Valuation adjustments relating to available-for-sale financial assets

The changes in the balance of this heading in 2008 and 2007 were as follows:

Thousands of euros

Concept 2008 2007

Beginning balance (2,639) -

Valuation adjustments relating to available-for-sale financial assets (24,637) (2,639)

Ending balance (27,276) (2,639)

Valuation adjustments relating to available-for-sale financial assets are made in accordance with best estimates

in order to recognise the amounts at fair value.

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2008

3. Translation differences

The detail, by country and by company, of the balance of “Translation Differences” at 31 December 2008 and

2007 is as follows:

Thousands of euros

Country and company 2008 2007

Algeria

Other (65) (140)

Total Algeria (65) (140)

Argentina

Autopista Ezeiza Cañuelas, S.A. (3,333) (2,547)

Other (Argentina) 98 -

Total Argentina (3,235) (2,547)

Brazil

Ambient Serviços Ambientais de Ribeirão Preto, S.A. (3,622) 559

Autopista Fernao Dias, S.A. (2,927) -

Autopista Fluminense, S.A. (1,652) -

Autopista Litoral Sul, S.A. (1,619) -

Autopista Planalto Sul, S.A. (1,237) -

Autopista Regis Bittencourt, S.A. (2,137) -

Autovías, S.A. 458 10,251

Centrovías Sistemas Rodoviarios, S.A. 3,614 10,516

Concesionaria de Rodovías do Interior Paulista, S.A. (519) 6,995

OHL Brasil, S.A. (1,237) (1,904)

Vianorte, S.A. (5,866) 3,391

Other (2,360) 961

Total Brazil (19,104) 30,769

Mexico

Autovias Concesionadas OHL, S.A. de C.V. (5,618) -

Administradora Mexiquense del Aeropuerto Internacional de Toluca , S.A de C.V.

(14,696) (6,894)

Baja Puerto Escondido, S.A. de C.V. 1,907 367

Centro Comercial Paseo de San Francisco, S.A. de C.V. (2,600) (235)

Concesionaria Mexiquense, S.A. de C.V. (70,108) (17,194)

Construcciones Amozoc Perote, S.A. de C.V. (2,679) (1,571)

Constructora de Proyectos Viales de Mxico, S.A. de C.V. (23,463) (11,502)

Golf Mayakoba, S.A de C.V. (2,101) (1,328)

Grupo Autopistas Nacionales, S.A. (4,535) (2,279)

Huaribe, S.A. de C.V. (35,136) (18,689)

Inmobiliaria Fumisa, S.A. de C.V. - (1,239)

132


Inmobiliaria Mayaluum, S.A. de C.V. (2,043) (609)

Islas de Mayakoba, S.A. de C.V. (2,539) (1,267)

Operadora Mayakoba, S.A. de C.V. (825) (1,609)

OHL Concesiones México, S.A. de C.V. (4,130) (3,095)

Promoaqua Desalación de los Cabos, S.A. de C.V. (1,958) (1,164)

Viaducto Bicentenario, S.A. de C.V. (11,662) -

Viceroy Resorts Mayakoba, S.R.L. de C.V. (2,663) (1,297)

Other (1,595) (1,053)

Total Mexico (186,444) (70,658)

Chile

Desalant, S.A. (2,470) 858

Infraestructura Dos Mil, S.A. (2,820) (2,538)

OHL Andina, S.A. (3,111) 841

OHL Austral, S.A. (4,025) (410)

Sociedad Concesionaria Autopista del Sol, S.A. 407 1,724

Sociedad Concesionaria Autopista Los Andes, S.A. (5,362) 1,297

Other (809) 367

Total Chile (18,190) 2,139

Perú

Otros (39) -

Total Perú (39) -

Czech Republic

OHL Central Europe, a.s. (1,605) (2,855)

OHL ZS, a.s. 3,494 3,408

ZPSV, a.s. 1,669 2,050

Other 729 1,107

Total Czech Republic 4,287 3,710

Slovakia

ZPSV Caña, a.s. 616 256

ZS Bratislava, a.s. 1,255 522

Other 50 20

Total Slovakia 1,921 798

United States

Aquaria Water LLC (1,136) (1,540)

Community Asphalt Corp. (4,622) (6,915)

Inima Usa Corporation 1,453 (450)

OHL USA. Inc (1,318) 68

The Tower Group, Inc. (2,127) (1,906)

Other (150) (654)

Total USA (7,900) (11,397)

Total (228,769) (47,326)

133


2008

C.15. Minority interests

The balance of “Minority Interests” in the consolidated balance sheets includes the interest of minority

shareholders in the fully consolidated companies. The balance of “Minority Interests” in the consolidated

income statements reflects the share of minority shareholders in profit for the year.

The detail of the balances of “Minority Interests” in the consolidated balance sheets at 31 December 2008 and

2007 is as follows:

Thousands of euros

Company 2008 2007

Aquaria Water LLC 739 1,019

Arellano Construction Co. 2,196 -

Autopista Ezeiza Cañuelas, S.A. 6,166 7,440

Autopista Fernao Días, S.A. (1,995) -

Autopista Fluminense, S.A. (1,101) -

Autopista Litoral, Sul, S.A. (1,080) -

Autopista Planalto Sul, S.A. (831) -

Autopista Regis Bittencourt, S.A. (1,387) -

Autovías, S.A. 14,084 22,418

Autovía de Aragón-Tramo I, S.A. 278 512

Centrovías Sistemas Rodoviários, S.A. 32,296 31,497

Community Asphalt Corp. 10,958 9,396

Concesionaria Mexiquense, S.A. de C.V. 32,599 32,488

Concesionaria de Rodovías do Interior Paulista, S.A. 37,052 30,759

Construcciones Amozoc Perote, S.A. de C.V. 5,704 4,974

Grupo Autopistas Nacionales, S.A. 10,111 10,768

Infraestructura Dos Mil, S.A. 7,897 9,324

Latina Manutençao de Rodovías, Ltda. 3,488 338

Metro Ligero Oeste, S.A. 40,836 58,258

OHL Brasil, S.A. 63,412 58,162

OHL ZS, a.s. 4,354 7,828

Paulista Infraestructura, Ltda. 5,223 3,108

Promoaqua Desalación de los Cabos, S.A. de C.V. 311 501

Sawgrass Rock Quarry, Inc. (1,509) (1,618)

SESAMM - Serviços de Saneamiento de Mogi Mirim, S.A. 1,426 -

Sociedad Concesionaria Autopista Los Libertadores, S.A. (2,973) (1,178)

Sociedad Concesionaria Autopistas del Sol, S.A. (2,817) (1,403)

Sociedade para Participaçao em Rodavías, S.A. (1,293) (747)

Stride Contractors, Inc 793 -

Tractament Metropolitá de Fangs, S.L. 6,572 7,129

Vianorte, S.A. (2,142) 2,329

Villas de Mayakoba, S.A. de C.V. 665 738

ZPSV Caña, a.s. 2,615 2,468

ZPSV, a.s. 5,074 9,720

ZS Bratislava, a.s. 2,704 2,362

Other 177 572

Total 280,602 309,162

134


The detail of the interests of minority shareholders in the profit for 2008 and 2007 is as follows:

Thousands of euros

Company 2008 2007

Autovías, S.A. 6,353 4,896


Community Asphalt Corp. 2,806 3,195




Latina Manutençao de Rodovías, Ltda. 3,824 16

Metro Ligero Oeste, S.A. (9,678) (2,919)

OHL ZS, a.s. 279 2,364

Sociedad Concesionaria Autopista Los Libertadores, S.A. (1,605) (1,383)

Tractament Metropolitá de Fangs, S.L. 104 1,222

Vianorte, S.A. 1,700 108

ZPSV, a.s. 1,340 1,009

Other (1,191) (288)

Total 31,744 34,919

C.16. Debt instruments and other held-for-trading financial liabilities

The detail of the balance of this heading in the consolidated balance sheets at 31 December 2008 and 2007

is as follows:

Thousands of euros

Concept 2008 2007

Non-current corporate bond issue 613,652 712,787

Current corporate bond issue 21,613 22,484

Non-current bond issue of concession operators 212,713 298,723

Current bond issue of concession operators 17,167 28,847

Total 865,145 1,062,841

1. Corporate bond issue

Corporate Bond Issue” includes the principal and the accrued interest payable at 31 December 2008 of a long-

term bond issue made in May 2007 in Europe for a face value of EUR 700,000 thousand and maturing in 2012.

The annual interest rate is 5% and the bonds have an investment grade rating. Any change in the assigned

rating increases the interest rate by 1.25%.

In the last few months of 2008 bonds with a face value of EUR 100,000 thousand were purchased on the

market for an acquisition price of EUR 63,673 thousand, giving rise to a gain of EUR 36,327 thousand, and this

amount is recognised under “Impairment and Gains or Losses on Disposals of Financial Instruments” in the

consolidated income statement for 2008 (see Note C.23-7). As provided for in the terms and conditions of the

issue, the repurchased bonds were retired.

135


2008

The detail, by company, of “Corporate Bond Issue” at 31 December 2008 and 2007 is as follows:

Company Thousands of euros

Year of final maturity Issue currency2008 2007

Obrascón Huarte Lain, S.A. 619,226 719,083 2012 Euros

OHL ZS, a.s. 16,039 16,188 2010 Czech koruna

Total 635,265 735,271

The interest rate on the bond issues was 4.99% in 2008 (2007: 5.00%).

2. Bond issue of concession operators

The detail, by company, of “Bond Issue of Concession Operators” at 31 December 2008 and 2007 is as

follows:

Thousands of Euros

Operator Thousands of Euros Year of final maturity

Issue currency

2008 2007

Inmobiliaria Fumisa, S.A. de C.V. - 66,970 2013 Mexican peso

Sociedad Concesionaria Autopista del Sol, S.A. 125,194 140,710 2018 Chilean peso

Sociedad Concesionaria Autopista Los Libertadores, S.A. 104,686 119,890 2025 Chilean peso

Total 229,880 327,570

In connection with the aforementioned bond issues, the companies have undertaken to achieve certain financial

ratios in relation to their respective financial statements, which were being achieved in full at 31 December

2008. These issues are also secured by the related concession assets.

The interest rate on the bond issues of concession operators was 5.31% in 2008 (2007: 5.60%).

The corporate bonds and the bonds of concession operators are summarised, by maturity, as follows:

Thousands of euros

Concept Debts maturing in:

2009 2010 2011 2012 2013 Subsequent years

Total

Corporate bonds 21,613 15,628 - 598,024 - - 635,265

Bonds of concession operators 17,167 10,962 12,007 16,242 19,654 153,848 229,880

Total 38,780 26,590 12,007 614,266 19,654 153,848 865,145

136


C.17. Bank borrowings

The Group’s financial liabilities arising from transactions with banks at 31 December 2008 were as follows:

Thousands of euros

Concept Borrowings maturing in:

2009 2010 2011 2012 2013 Subsequent years

Total

Mortgage loans 3,459 3,847 4,354 4,684 4,903 48,060 69,307

Certificate and note discounting facilities

25,789 - - - - - 25,789

Loans and credit lines 183,244 182,464 210,320 4,320 3,468 133,252 717,068

Total mortgage and other loans 212,492 186,311 214,674 9,004 8,371 181,312 812,164

Loans of concession operators 128,875 389,230 52,243 55,530 47,705 1,149,008 1,822,591

Total loans 341,367 575,541 266,917 64,534 56,076 1,330,320 2,634,755

Accrued interest payable 3,367 - - - - - 3,367

Accrued interest payable of concession operators

17,294 - - - - - 17,294

Total accrued interest payable 20,661 - - - - - 20,661

Total bank borrowings 362,028 575,541 266,917 64,534 56,076 1,330,320 2,655,416

The following should be noted in connection with bank borrowings:

• Mortgage loans

At 31 December 2008, certain items of property, plant and equipment amounting to EUR 91,579 thousand

(2007: EUR 116,232 thousand) had been mortgaged for a total of EUR 67,278 thousand (2007: EUR 74,676

thousand) (see Note C.1.).

At 31 December 2008, certain investment properties amounting to EUR 2,972 thousand (31 December

2007: 3,848 thousand) had been mortgaged for a total of EUR 2,029 thousand (31 December 2007: 2,037

thousand) (see Note C.2.).

These loans bear interest at market rates.

• Discount lines and progress billings and note discounting facilities.

137


2008

Thousands of euros

Concept 2008 2007

Limit 90,667 26,002

Amount used 25,789 2,475

Undrawn balance 64,878 23,527

The interest rate on the amount used was 4.67% in 2008 (2007: 4.51%).

• Loans and credit facilities and loans of concession operators.

Thousands of euros

Concept 2008 2007

Limit 3,539,446 3,119,614

Amount used 2,551,148 1,934,371

Undrawn balance 988,298 1,185,243

The interest rate on the amount used was 7.17% in 2008 (2007: 7.17%).

At 31 December 2008, the Parent had a loan of EUR 301,997 thousand for which it has to achieve certain financial

ratios relating to the consolidated financial statements, which were being achieved in full at 31 December

2008.

At 31 December 2008, the subsidiary Sociedad Vehículo CA, S.L. had a loan balance of EUR 32,563 thousand

for which it has to achieve certain financial ratios relating to the consolidated financial statements, which were

being achieved in full at 31 December 2008.

At 31 December 2008, the subsidiary Participes en Brasil, S.L. had a loan balance of EUR 125,000 thousand for

which it has to achieve certain financial ratios relating to its individual financial statements and those of OHL

Brasil, S.A., and the market price of the shares of OHL Brasil on the São Paolo (Brazil) stock exchange, which

were being achieved in full at 31 December 2008. There is a pledge on 60% of the shares of OHL Brasil, owned

by Participes en Brasil, S.L.

In connection with the loans of the concession operators at 31 December 2008, totalling EUR 1,822,591 thousand

(2007: EUR 1,439,564 thousand), the operators must provide certain guarantees in relation to their accounts

receivable and non-current assets assigned to the concession project.

The detail, by operator, of Group’s concession operators’ loans at 31 December 2008 and 2007 is as follows:

138


Thousands of euros

Company 2008 2007

Aeropistas, S.L. 237,313 238,552

Ambient Serviços Ambientais de Ribeirao Preto, S.A. 17,056 19,398

Aquaria Water LLC 21,071 -

Autopista Ezeiza Cañuelas, S.A. 20,652 23,900

Autopista Fernao Dias, S.A. 1,929 -

Autopista Fluminense, S.A. 709 -

Autopista Litoral Sul, S.A. 22 -

Autopista Regis Bittencourt, S.A. 1,011 -

Autovía de Aragón-Tramo 1, S.A. 8,511 -

Autovías, S.A. 94,862 67,189




Desalant, S.A. 16,005 15,261

Metro Ligero Oeste, S.A. 509,322 440,267

Nova Dársena Esportiva de Bara, S.A. 16,238 10,680

Promoaqua Desalación de los Cabos, S.A. de C.V. 5,153 6,590

Sacova Centros Residenciales, S.L. 34,443 37,308

Sociedad Concesionaria Autopista Los Andes, S.A. 215,301 153,055

Sociedad Concesionaria Centro de Justicia de Santiago, S.A. 34,739 46,730

Terminales Marítimas del Sureste, S.A. 44,605 29,267

Tractament Metropolitá de Fangs, S.L. 21,495 20,281

Vianorte, S.A. 26,189 37,510

Total 1,822,591 1,439,564

C.18. Other financial liabilities

1. Obligations under finance leases

The detail of the Group’s finance lease obligations at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Under non-current liabilities 25,118 21,429

Under current liabilities 13,788 9,918

Total 38,906 31,347

The Group leases certain of its fixtures and equipment under finance leases. The average lease term is 50

months. In the year ended 31 December 2008, the average effective interest rate on the lease obligations was

5.39% (2007: 4.97%). Interest rates are set at the contract date. All leases are on a fixed instalment basis. The

unmatured interest on the leases amounts to EUR 4,013 thousand (2007: EUR 2,689 thousand).

139


2008

2. Derivative financial instruments

The Group uses derivative financial instruments, such as foreign currency hedges, interest rate swaps and

combined interest rate and foreign currency derivatives in order to mitigate the economic effects of exchange

rate and interest rate fluctuations to which it is exposed as a result of its business activities. The Group also

arranged in 2007 a financial swap tied to the Parent’s share price in order to hedge the potential loss that might

arise from the exercise of the options under the Incentive Plan described in Note C.23-3.

It is not permitted to arrange derivatives at the Group for speculative purposes.

No collection risks are expected to arise in relation to the amounts that the banks have undertaken to pay to

the Group in the future on the basis of the derivatives arranged, since the banks with which they were arranged

are highly solvent.

The derivatives arranged by the Group are basically measured by discounting the future cash flows in accordance

with the contractual and market conditions at the date of measurement.

The main criteria relating to derivatives are described in Note B.6. Set forth below is a description of how the

fair values of the derivatives arranged by the Group were accounted for at 31 December 2008 as other financial

assets or liabilities and of their impact, net of taxes, on equity.

Foreign currency hedges

The Group arranges foreign currency hedges in order to avoid the economic impact that currency fluctuations

have on payment obligations and collection rights in foreign currencies.

Following is a detail of the outstanding foreign currency hedges at 31 December 2008, indicating, on the one

hand, the nominal amounts in euros of the hedges, i.e. the amounts that the Group and the banks have agreed

to exchange in euros in exchange for paying or receiving certain amounts in foreign currencies, classified by

maturity, and, on the other, the fair values of the hedges, grouped together as other financial assets or liabilities,

and their impact, net of taxes, on equity. Also indicated is the range of exchange rates and the nominal amounts

in foreign currency arranged.

140


Thousands of euros

ConceptNominal amount

Maturity Fair values included in

Impact on

equity

Foreign currency per euro

Nominal amount in thousands of foreign currency

Within 3 months

After 3 months

Other financial assets

Other financial liabilities Range

of exchange rates

Derivatives considered for accounting purposes to be fair value hedges

Future US dollar purchases against euros

30,418 10,576 19,842 371 1,182 (567) 1.2475-1.4910 40,993

Future Czech koruna purchases against euros

11,719 5,584 6,135 30 917 (702) 23.185-27.23 290,654

Future Czech koruna sales against euros

207 - 207 13 - 11 25.117 5,199

Derivatives not considered hedges for accounting purposes at the decision of the Group


4,643 4,643 - 332 - 232 1.4869-1.4910 6,913

Future US dollar sales against euros

5,338 5,338 - 363 2 253 1.2846-1.3975 6,913


783 - 783 6 - 5 27.079-27.132 21,225

Future Czech koruna sales against euros

783 - 783 52 - 42 24.982-25.118 19,624

Future Mexican peso sales against euros

55,755 55,755 - 4,457 - 3,120 17.311-18.556 978,459

Total 109,646 81,896 27,750 5,624 2,101 2,394

The detail of the outstanding foreign currency hedges at 31 December 2007 is as follows:

Thousands of euros

Concept

Nominal amount (on

arrangement date)

Maturity Fair values included inImpact

on equity (net

of tax effect)

Foreign currency per euro

Nominal amount in thousands of foreign

currency (on arrangement

date)

Within 3 months

After 3 months


Other financial liabilities Range

of exchange rates

Derivatives considered for accounting purposes to be fair value hedges


46,738 15,278 31,460 - 2,512 (1,758) 1.3698 - 1.4664 64,876


12,794 3,266 9,528 520 - 395 27.079 - 27.446 349,231

Derivatives not considered hedges for accounting purposes at the decision of the Group

Future Mexican peso purchases against euros

15,477 15,477 - - 425 (298) 15.633 - 15.635 241,962

Future Mexican peso sales against euros

27,651 27,651 - 240 374 (94) 15.577 - 16.428 447,231

Total 102,660 61,672 40,988 760 3,311 (1,755)

141


2008

Interest rate derivatives

The Group arranges interest rate swaps to mitigate the variability of the cost of external financing.

In project financing, the use of interest rate derivatives normally forms part of the requirements imposed by the

financing banks. The purpose of these derivatives is to limit the possible impact that future changes in interest

rates might have on the finance costs of the projects if the financing continues to bear floating rate interest.

The following table shows in euros the notional amounts of the interest rate derivatives at 31 December 2008,

which are the amounts on the basis of which the interest will be settled, grouped together by settlement currency

and classified based on their final maturity, together with the fair values of the derivatives, grouped together

as other financial assets or liabilities, and their impact, net of taxes, on equity. Also indicated is the range of

interest rates.

Thousands of euros

Settlement currency

Notional amount

Final maturity of the derivatives Fair value included in

Impact on equity

Range of annual interest

ratesWithin 1

year1 to

5 years

5 to 10 years

After ten years


Other financial liabilities

Derivatives considered for accounting purposes to be cash flow hedges

Euros 971,810 21,536 15,179 314,544 620,551 - 68,907 (58,600) 3.32 - 7.80%

Mexican peso 260,066 - - 260,066 - 114 36,290 (26,047) 8.16 - 11.75%

Chilean peso 102,849 - - - 102,849 - 29,715 (24,663) 6.68%

US dollars 96,544 - 24,190 17,547 54,807 - 8,711 (7,287) 4.95 - 5.65%

Total 1,431,269 21,536 39,369 592,157 778,207 114 143,623 (116,597)

The detail of the outstanding interest rate derivatives at December 2007 is as folows:

Thousands of euros

Settlement currency

Notional amount

Final maturity of the derivatives Fair value included in

Impact on equity

Range of annual interest

ratesWithin 1

year1 to

5 years

5 to 10 years

After ten years



Derivatives considered for accounting purposes to be cash flow hedges

Euros 1,074,140 200,000 8,956 56,682 808,502 20,400 17,471 (4,369) 3.32 - 7.80%

Mexican peso 169,066 - - 169,066 1,138 21,100 (14,372) 8.16 - 11.75%

Chilean peso 113,558 - - - 113,558 - 26,075 (18,252) 6.68%

US dollars 54,244 - 24,421 17,498 12,325 - 1,432 (1,422) 4.95 - 5.65%

Total 1,411,008 200,000 33,377 243,246 934,385 21,538 66,078 (38,415)

142


In the case of interest rate derivatives arranged by the Group’s investees that are owned 50% or less, the

notional amounts, the fair values of the derivatives and the impact on equity shown in the foregoing table are

in proportion to the Group’s ownership interests in those investees. The negative impact on equity is limited, in

the case of the investees less than 50% owned by the Group, to the value of the Group’s ownership interest.

The total notional amount of the interest rate derivatives at 31 December 2008, net of the notional amounts of

the derivatives arranged by companies accounted for using the equity method, represents 48.7% of the total

loans in force at that date (31 December 2007: 64.0%).

Derivatives on treasury shares

In 2007 the Group arranged a financial swap tied to the Parent’s share price in order to hedge the potential

loss that might arise from the exercise of the options under the Incentive Plan described in Note C.23.3. The

commitment is to pay or receive the result of the change in the share price with respect to the reference price

until the maturity of the derivative and to pay a floating interest rate during the term of the swap. The notional

amount of the derivative is EUR 38,203 thousand, equal to 1,312,381 shares at the reference price of EUR 29.11

per share. The result of the change in the share price will be positive for the Group if the market price exceeds

EUR 29.11 and negative if it falls below this price.

At 31 December 2008, the market value of the derivative was EUR -25,431 thousand, which was recognised

under “Other Non-Current Financial Liabilities” in the consolidated balance sheet (31 December 2007: EUR

-8,237 thousand). Its cumulative negative impact, net of the tax effect, at 31 December 2008 was EUR 17,802

thousand (31 December 2007: EUR 5,766 thousand).

Sensitivity analysis

Sensitivity analysis involves the measurement of the effect that interest rates, exchange rates and/or share

prices other than those existing on the market at the measurement date would have had.

The sensitivity analysis of exchange rates focused on the foreign currency derivatives outstanding at the date

of the analysis, simulating a 10% increase in the foreign currency per euro exchange rate with respect to those

in force at 31 December 2008 and 2007. The result of this analysis is as follows:

143


2008

Thousands of euros

Concept 2008 2007

Market value

Impact on equity

Market value

Impact on equity

Mexican peso (5,689) (3,982) (1,406) (984)

US dollars 3,252 2,276 4,776 3,343

Czech koruna 858 652 1,434 1,090

Total (1,579) (1,054) 4,804 3,449

If a sensitivity analysis were performed using the hypothesis of a 10% decrease in the foreign currency per

euro exchange rate with respect to those applicable at 31 December 2008 and 2007, the impact would be as

follows:

Thousands of euros

Concept 2008 2007

Market value

Impact on equity

Market value

Impact on equity

Mexican peso 4,655 3,259 1,151 806

US dollars (2,778) (1,945) (3,908) (2,736)

Czech koruna (702) (534) (1,173) (891)

Total 1,175 780 (3,930) (2,821)

The table below shows the difference in the market value of the interest rate hedges and equity with respect to the

data presented had interest rates been 0.5% higher than those applicable at 31 December 2008 and 2007.

Thousands of euros

Concept 2008 2007

Market value

Impact on equity

Market value

Impact on equity

Euros 35,318 24,723 30,829 21,580

Mexican peso 9,826 7,075 5,087 3,663

Chilean peso 3,926 3,259 5,849 4,855

US dollars 2,145 1,517 1,044 744

Total 51,215 36,574 42,809 30,842

Had interest rates been 0.5% lower, the effect on market value and equity would have been as follows:

144


Thousands of euros

Concept 2008 2007

Market value

Impact on equity

Market value

Impact on equity

Euros (41,584) (26,231) (32,733) (22,913)

Mexican peso (10,269) (7,394) (5,281) (3,802)

Chilean peso (4,134) (3,431) (6,248) (5,186)

US dollars (2,250) (1,592) (1,085) (774)

Total (58,237) (38,648) (45,347) (32,675)

A 10% increase/decrease in the share price with respect to the price at 31 December 2008 would have given

rise to an increase/decrease of EUR 1,307 thousand (2007: EUR 3,022 thousand) in the market value of the

financial swap tied to the share price and an increase/decrease in equity of EUR 915 thousand (2007: EUR 2,116

thousand) with respect to the amount presented.

C.19. Provisions

1. Long-term provisions

The breakdown of “Long-Term Provisions” at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Provisions for taxes 10,165 8,086

Provisions for litigation in progress 5,432 7,161

Provisions for third-party liability 1,079 1,051

Provisions for dismantling, retiring or refurbishing non-current assets

3,581 -

Other provisions 3,537 3,498

Total 23,794 19,796

2. Short-term provisions

The breakdown of “Short-Term Provisions” at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Project completion 33,491 37,916

Management and other fees 23,248 23,601

Other provisions 90,749 81,964

Total 147,488 143,481

145


2008

C.20. Deferred income

The breakdown of “Deferred Income” at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Grants 146,483 78,376

Other 13,150 11,538

Total 159,633 89,914

The balances, by company, of grants for 2008 are as follows:

Thousands of euros

Company

Grupo Autopistas Nacionales, S.A. 57,369

Obrascón Huarte Lain, S.A. 391

OHL Medio Ambiente, Inima, S.A. 459

Promoaqua Desalación de los Cabos, S.A. de C.V. 5,803

S.A. Trabajos y Obras 51

Sociedad Concesionaria Autopista Los Andes, S.A. 77,671

Tractament Metropolitá de Fangs, S.L. 4,739

Total 146,483

The principal grants received by the Group relate to the financing contributed by the relevant authorities in order

to provide financial viability to the construction of the concession assets and to guarantee the profitability of

the project.

C.21. Other liabilities

The detail of the balance of “Other Liabilities” in the consolidated balance sheets at 31 December 2008 and

2007 is as follows:

Thousands of euros

Concept 2008 2007

Non-current current Non-current current

Payable to associates 17 93,493 - 72,432

Remuneration payable - 17,422 - 9,831

Tax payables - 166,081 - 161,871

Other non-trade payables 175,467 52,132 220,743 61,574

Guarantees and deposits received 17 1,734 - 2,878

Other - 6,110 - 3,269

Total 175,501 336,972 220,743 311,855

146


The detail of the Group’s other non-trade payables at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007


Royalties of concession operators 144,338 18,110 180,712 20,189

Payable to non-current asset suppliers 13,004 12,750 5,341 8,499

Other 18,125 21,272 34,690 32,886

Total 175,467 52,132 220,743 61,574

The detail of the Group’s concession operator royalties at 31 December 2008 and 2007 is as follows:

Thousands of euross

Concept 2008 2007


Centrovías Sistemas Rodoviarios, S.A. 22,660 3,048 28,377 3,372

Concesionaria de Rodovías do Interior Paulista, S.A.

16,892 1,841 20,785 2,036

Vianorte, S.A. 89,193 10,813 112,068 12,062

Autovías, S.A. 15,593 2,408 19,482 2,719

Total 144,338 18,110 180,712 20,189

C.22. Tax matters

1. Consolidated tax group

The Group files consolidated tax returns for all the Spanish resident companies which meet the requirements

provided for in tax legislation, while the other companies not qualifying for this regime, mainly foreign companies,

file individual tax returns.

2. Recognition

The income tax expense of the consolidated Group companies is obtained by aggregating the income tax expense

of the companies forming part of the consolidated tax group and that of the companies that file individual

income tax returns.

The tax bases are calculated on the basis of the profit for the year adjusted by temporary differences, permanent

differences and tax loss carryforwards.

147


2008

The tax effect of temporary differences between the transactions recognised using different criteria in the

accounting records and in the income tax return gives rise to deferred tax assets and liabilities that will be

recoverable or payable in the future.

Tax losses, if recognised, also give rise to deferred tax assets that will not be deducted from the expense for

future years.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when

the assets are realised or the liabilities are settled.

Deferred tax assets are only recognised when there are no doubts that there will be sufficient taxable profits in

the future against which to charge these temporary differences.

When the closing is performed for tax purposes each year, the deferred tax balances are reviewed in order to

ascertain whether the related rights continue to exist and the appropriate valuation adjustments are made so

as to adapt the balances to the prevailing situation.

3. Reconciliation of the accounting profit to the taxable profit

The reconciliation of the accounting profit to the taxable profit is as follows:

Thousands of euross

Concept 2008 2007

Consolidated accounting profit for the year before tax

266,999 230,814

Permanent differences (28,169) (39,649)

Of Spanish companies (12,001) (42,775)

Of foreign companies (16,168) 3,126

Temporary differences (253,447) (75,610)

Of Spanish companies (122,267) 16,404

Of foreign companies (131,180) (92,014)

Offset of prior years' tax losses (38,976) (26,092)

Taxable profit (53,593) 89,463

The permanent differences relate mainly to:

• Expenses not considered to be deductible for tax purposes.

• Profits obtained abroad by branches and joint venturers.

148


• Recognition and use of provisions.

• Tax withholdings paid abroad.

• Consolidation adjustments (mainly the elimination of dividends and the elimination of investment valuation

allowances).

The temporary differences arose mainly from:

• The profit of joint venturers, the recognition of which for tax purposes is deferred one year.

• The recognition of provisions, not considered to be tax deductible and the use of provisions adjusted in

prior years.

• The finance leases and the different methods used for tax and accounting purposes in the depreciation

and amortisation charge of non-current assets.

4. Income tax and tax rate.

Income tax is calculated using the tax rates in force in each country in which the Group operates, the main ones

being as follows:

Country 2008 2007

Spain 30.0% 32.5 %

Algeria 25.0% 25.0%

Argentina 35.0% 35.0%

Brazil 34.0% 34.0%

Chile 17.0% 17.0%

United States 38.6% 38.6%

Mexico 28.0% 28.0%

Qatar 35.0% 35.0%

Czech Republic 21.0% 24.0%

Slovakia 19.0% 19.0%

Turkey 20.0% 20.0%

The income tax expense of EUR (84,569) thousand relates to:

• EUR (9,529) thousand relating to the expense recognised by the Spanish tax group companies (2007:

income of EUR 4,359 thousand). The expense recognised in 2008 includes the expense relating to branches

abroad and the charge for a tax provision for the purpose of covering the settlements that might arise as

149


2008

a result of an income tax review of Huarte for the tax periods from 1994 to 1997, amounting to EUR (4,019)

thousand.

• EUR (66,401) thousand relating to the expense recognised by the Spanish and foreign companies that file

individual tax returns (2007: EUR (45,813) thousand).

• An expense of EUR 8,639 thousand arising from consolidation adjustments (2007: EUR (13,340)

thousand).

In addition to the income tax expense for 2008, the amount recognised directly in equity is as follows:

Thousands of euros

Concept

Changes in the value of derivative financial instruments 25,955

Revaluation of financial assets classified as held for sale 10,559

Other 7,092

Total 43,606

5. Deferred taxes and tax losses.

The changes in deferred tax assets in 2008 and 2007 were as follows:

Thousands of euros

Concept

Balance at 1 January 2007 372,560

Increases 19,075

Decreases (11,391)


Increases 146,868

Decreases (42,385)


The detail, by item, at 31 December 2008 and 2007 is as follows:

Thousands of euros

Concept 2008 2007

Tax assets 337,927 274,146

Tax loss carryforwards 302,414 238,551

Tax credit carryforwards 35,513 35,595

Temporary differences 146,800 106,098

Total 484,727 380,244

150


The changes in deferred tax liabilities in 2008 and 2007 were as follows:

Thousands of euros

Concept

Balance at 1 January 2007 175,497

Increases 23,749

Decreases (249)


Increases 114,866

Decreases (57,192)


Of the total deferred tax liabilities, EUR 25,762 thousand were recognised directly in reserves in equity (31

December 2007: EUR 38,211 thousand).

The deferred taxes recognised arose from:

• The differences between accounting and tax legislation concerning the timing of recognition of certain

income and expense items, fundamentally the profit of joint ventures whose recognition for tax purposes

is delayed by a year and the recognition and use of provisions adjusted in prior years.

• The consolidation process, as a result of adjustments on the consolidation of the financial statements that

affected income tax.

The Group companies’ tax loss carryforwards available for offset in future tax returns amount to EUR 1,173,039,

the last years for offset of which are as follows:

Year Thousands of euros

2009 8,568

2010 25,583

2011 170,8172012 65,8562013 51,2762014 5,1992015 19,6572016 23,4422017 24,5502018 35,9812019 182,1592020 61,8362021 602022 9,6582023 167,033

No limit 321,364Total 1,173,039

151


2008

Most of the tax loss carryforwards are recognised as deferred tax assets, amounting to EUR 302,414 thousand,

since the Parent’s directors considered that there are no doubts as to their future recoverability. The situation

of the tax loss carryforwards is reviewed at the end of each reporting period.

The Group companies have unused double taxation tax credits amounting to EUR 16,715 thousand, and tax

credits for investment (reinvestment, R&D&i and other) amounting to EUR 43,146 thousand.

6. Years open for review by the tax authorities

In general, the Group companies and the joint ventures have all the tax returns for the taxes applicable to them

which were filed in the last four years open for review by the tax authorities.

At the end of 2008 the Spanish National Appellate Court dismissed the appeal filed by the Company against the

tax assessments issued by the tax authorities in connection with income tax of Huarte, S.A. for 1994 to 1997,

in which a total tax loss carryforward of EUR 102,030 thousand was challenged.

In 2009 the Company filed an appeal at the Spanish Supreme Court, on which no judgment has yet been

handed down.

Based on the opinion of their legal advisers, the Company’s directors consider that the appeal will be granted

leave to proceed and expect the judgment of the Supreme Court to be favourable and, therefore, that no loss

will arise for Obrascón Huarte Lain, S.A. in this connection.

The Company has also filed various appeals in connection with 1996 to 2002 relating to the timing of recognition

of income and expenses of the joint ventures. A favourable ruling is expected to be handed down in this

connection.

The possible tax audits of the years open for review by the tax authorities could give rise to certain contingent

tax liabilities that cannot be objectively quantified. However, the Parent’s directors consider that these liabilities

would not be material.

7. Tax receivables and payables

The detail of the “Tax Receivables” and “Tax Payables” at 31 December 2008 and 2007 is as follows:

152


Thousands of euros

Concept Current assets Current liabilities

2008 2007 2008 2007

VAT 104,652 135,974 122,756 108,632

Other taxes 39,216 33,839 29,497 40,644

Accrued social security taxes - - 13,828 12,595

Total 143,868 169,813 166,081 161,871

C.23. Income and expenses

1. Revenue

The Group’s revenue in 2008 amounted to EUR 4,008,777 thousand (2007: EUR 3,764,419 thousand). The detail,

by activity, customer and geographical market, is as follows:

Thousands of euros

By activity 2008 2007 % Change

Construction in Spain 1,786,361 1,973,872 (9.5)

Construction abroad 1,429,063 1,162,256 23.0

Industrial 25,520 - n/a

Infrastructure concessions 542,381 435,453 24.6

Environment 119,964 116,800 2.7

Development 105,488 76,038 38.7

Total revenue 4,008,777 3,764,419 6.5

Thousands of euros

By activity, customer and geographical market

2008

Spain Abroad Total

Public sector Private sector Public sector Private sector Public sector Private sector

Construction in Spain 1,235,273 551,088 - - 1,235,273 551,088

Construction abroad - - 860,360 568,703 860,360 568,703

Industrial 12,740 12,780 - - 12,740 12,780

Infrastructure concessions 38,315 24,505 104,820 374,741 143,135 399,246

Environment 46,220 2,710 22,077 48,957 68,297 51,667

Development 5,743 17,300 - 82,445 5,743 99,745

Total revenue 1,338,291 608,383 987,257 1,074,846 2,325,548 1,683,229

153


2008

Thousands of euros

By activity, customer and geographical market

2007

Spain Abroad Total

Public sector Private sector Public sector Private sector Public sector Private sector

Construction in Spain 1,357,943 615,929 - - 1,357,943 615,929

Construction abroad - - 821,087 341,169 821,087 341,169

Industrial services - - - - - -

Infrastructure concessions 10,432 20,445 - 404,576 10,432 425,021

Environment 46,491 8,800 24,686 36,823 71,177 45,623

Development - 20,450 - 55,588 - 76,038

Total revenue 1,414,866 665,624 845,773 838,156 2,260,639 1,503,780

Thousands of euros

By geographical market 2008 2007

Spain:Andalucía 163,931 173,124Aragón 111,028 99,123Asturias 79,160 77,208Balearic Islands 11,317 21,832Canary Islands 143,765 128,348Cantabria 16,667 28,636Castilla La Mancha 73,220 26,209Castilla y Leon 90,912 90,971Cataluña 468,015 502,374Ceuta and Melilla 3,501 15,552Extremadura 6,627 8,772Galicia 109,626 76,818La Rioja 427 264Madrid 395,715 582,304Murcia 28,089 12,677Navarra 12,861 7,819Basque country 85,052 73,552Valencia 146,761 155,007Total Spain 1,946,674 2,080,590Abroad:Algeria 224,755 43,324Argentina 28,545 14,410Azerbaijan 40,241 17,134Brazil 351,760 245,071Bulgaria 4,813 3,323Chile 197,773 190,539Croatia - 637Ecuador 19,872 10,822United States 349,980 383,503Hungary 27,314 20,046Mexico 257,089 248,347Montenegro 10,181 13,001Panama - 48Peru 2,300 -Qatar 62,978 -Czech Republic 452,349 321,690Slovakia 30,783 58,574Turkey 1,370 113,360Total abroad 2,062,103 1,683,829Total revenue 4,008,777 3,764,419

154


2. Other operating income

In 2008 the Group recognised under “Other Operating Income” EUR 79,633 thousand (2007: EUR 46,196

thousand) relating to the collection rights of the subsidiary Concesionaria Mexiquense, S.A. de C.V. acknowledged

by the State of Mexico government (see Note B.6.13).

3. Staff costs

Share-based payment plans.

On 13 November 2007, the Company’s Board of Directors resolved to implement an Incentive Plan (the “Plan”)

aimed at building the loyalty of 49 executives of the Obrascón Huarte Lain Group. For the purposes of the Plan,

the Obrascón Huarte Lain Group is taken to include the group of companies comprising the Parent and the

companies controlled by it in the terms provided for in Article 4 of the Spanish Securities Market Law.

In 2010 the executives included in the Plan will be entitled to receive an incentive tied to their staying at the

Obrascón Huarte Lain Group from 13 November 2007 to 13 November 2010 on the basis of the appreciation of

Obrascón Huarte Lain shares.

The main features of the Plan are as follows:

• Beneficiaries: general managers and executives of Obrascón Huarte Lain S.A. and Group companies,

selected by the Board of Directors. At 31 December 2007, a total of 1,138,939 units had been granted to 49

Group executives.

• Number of units granted: 1,312,381

• Exercise price: EUR 34.26

The Plan was measured and recognised in the income statement as indicated in Note B.6.15. At 31 December

2008, the staff costs in connection with the Plan amounted to EUR 2,578 thousand (31 December 2007: EUR

299 thousand). The main assumptions used to measure the Plan implemented in 2007 were as follows.

• Period required to stay at the company to exercise the Plan: 3 years

• Risk-free interest rate: 3.87%

• Dividend yield: 1.57%

155


2008

In November 2007 the Company arranged a financial swap tied to the Company’s share price in order to hedge

the potential loss that might arise from the exercise of the options under the Incentive Plan. The main features

of this contract are as follows:

• The notional amount of the swap is EUR 38,203 thousand, equal to 1,312,381 shares at a price of EUR 29.11

per share.

• The Company will pay the bank a return on the notional amount based on Euribor plus a spread.

• The bank may terminate the contract early if the share price falls below 50% of the initial price, in which case,

the Company would pay the bank in cash the difference between the market price and the reference price.

At 31 December 2008, the Company had made a deposit of EUR 20,486 thousand as additional security.

• The Company may wholly or partially terminate the contract early, in which case if the market price of the

shares is less than the initial price the Company will pay the bank the difference. If the market price is above

the initial price the Company will receive the difference between the aforementioned amounts.

This contract qualifies as a derivative for accounting purposes and is treated as described in Note B.6.11. In

2008, a negative amount of EUR 17,194 thousand (2007: EUR 8,237 thousand) was allocated to income under

“Net Loss on Changes in Value of Financial Instruments at Fair Value”.

4. Other operating expenses

The detail of “Other Operating Expenses” in the consolidated income statements is as follows:

Thousands of euros

Concept 2008 2007

Outside services 486,020 408,433

Taxes other than income tax 39,232 40,237

Other current operating expenses 82,126 75,848

Total other operating expenses 607,378 524,518

5. Finance income

The detail of “Finance Income” in the consolidated income statements is as follows:

156


Thousands of euros

Concept 2008 2007

Income from equity investments 6,489 83

Interest income from other companies 82,652 58,148

Total finance income 89,141 58,231

6. Finance costs

The detail of “Finance Costs” in the consolidated income statements is as follows:

Thousands of euros

Concept 2008 2007

On finance leases and non-current asset instalment purchases

1,261 743

On the financing of current transactions 290,945 216,190

Total finance costs 292,206 216,933

At 31 December 2008, 63.6 % of total finance costs related to concession operators (2007: 63.6 %).

7. Impairment losses and gains and losses on disposal of financial instruments

The balance of “Impairment Losses and Gains and Losses on Disposal of Financial Instruments” in the

consolidated income statement amounted to EUR 56,189 thousand at 31 December 2008 (31 December 2007:

EUR 16,374 thousand). Of note under this heading was the repurchase of corporate bonds on the market with a

face value of EUR 100,000 thousand giving rise to a gain of EUR 36,327 thousand (see Note C.16-1).

This heading also includes the gains (losses) on disposal of companies, the main disposals being Inmobiliaria

Fumisa, S.A. de C.V. and Sociedade Concessionaria do Marina do Parque das Naçoes, S.A. (see Appendix IV).

157


2008

8. Transactions and balances in currencies other than the euro

The detail of the transactions in currencies other than the euro in 2008, by currency and for the main operating

income and expense items, is as follows:

Currency

Thousands of euros

Revenue Other operating income

Procurements Other operating expenses

Czech Koruna 426,076 13,164 378,056 2,557

Croatian kuna - - 29 -

Slovak koruna 32,365 1,335 23,382 393

Algerian dinar 203,644 5,161 109,832 59,890

Moroccan dirham - 99 - 137

Canadian dollar - - - 144

US dollar 460,839 15,558 383,629 21,167

Hungarian forint 659 41 1,408 -

Swiss franc - - - 22

Bulgarian lev 3,921 173 2,402 49

Pound sterling - - - 54

New Turkish lira 71 1,306 8,075 3,468

Azerbaijani new manats - 1 473 8

Argentine peso 28,545 97 7,208 12,860

Chilean peso 197,515 6,714 98,603 41,302

Mexican peso 231,256 101,660 114,268 47,150

Brazilian real 351,760 345 59,061 24,107

Qatari ryial 62,978 - 12,534 44,951

Peruvian new sol 1,577 34 674 1,018

Trinidad-Tobago titi dollar - - - 3

Total 2,001,206 145,688 1,199,634 259,280

Balances in currencies other than the euro

The balances payable in currencies other than the euro at 31 December 2008 and 2007, by currency and for the

main liability items in the balance sheet, were as follows:

158


Currency

Thousands of euros

2008

Bank borrowings Debt instruments and other

marketable securities


Trade and other payables

Other current and non-current

liabilities

Costa Rican colon - - - 352 21

Czech koruna 3,721 16,039 9,425 122,292 16,515

Croatian kuna - - - 1 -

Slovak koruna 52 - 1,850 8,326 1,777

Algerian dinar - - - 208,421 19

Moroccan dirham 1,347 - - 7,387 2,562

Canadian dollar - - - 33 32

US dollar 133,152 - 6,697 130,746 29,551

Hungarian forint - - - 392 -

Bulgarian lev - - - 807 79

New Turkish lira - - - 9,352 5,357

Honduran lempira - - - - 153

Argentine peso 20,708 - - 5,594 2,309

Chilean peso 255,913 229,880 30,240 40,045 5,874

Mexican peso 319,679 - 36,290 45,848 16,558

Brazilian real 336,941 - 2,068 48,592 181,204

Qatari ryial - - - 80,247 15,515

Peruvian new sol - - - 525 257

Total 1,071,513 245,919 86,570 708,960 277,783

159


2008

Currency

Thousands of euros

2007

Bank borrowings Debt instruments and other

marketable securities


Trade and other payables

Other current and non-current

liabilities

Costa Rican colon - - - 399 20

Czech koruna 4,882 16,188 6,715 108,659 16,924

Croatian kuna - - - 7 -

Slovak koruna - - 496 8,106 2,286

Swedish kronor - - - 270 -

Algerian dinar - - - 43,456 2,674

Moroccan dirham - - - 98 9

US dollar 99,190 50,686 - 102,844 29,831

Hungarian forint - - - 53 -

Honduran lempira - - - 132 -

Bulgarian lev - - - 147 128

New Turkish lira - - - 28,984 10,458

Argentine peso 23,924 - - 7,121 1,014

Chilean peso 221,725 260,600 26,264 58,260 29,142

Mexican peso 226,019 16,284 21,784 47,515 29,179

Brazilian real 214,069 - 493 15,109 213,400

Peruvian new sol 1 - - - -

Total 789,810 343,758 55,752 421,160 335,065

The balances receivable in currencies other than the euro at 31 December 2008 and 2007, by currency and for

the main financial asset items, were as follows:

Thousands of euros

Currency

2008

Non-current financial assets

Current financial

assets

Czech koruna 706 49

Slovak koruna 211 -

US dollar 1,554 1,769

Hungarian forint 27 -

New Turkish lira - 670

Argentine peso 1,779 -

Chilean peso 24 200,360

Mexican peso 159,902 735

Brazilian real 3,195 13,727

Total 167,398 217,310

160


Thousands of euros

Currency

2007

Non-current financial assets

Current financial assets

Czech koruna 1,341 22

Croatian kuna - 10

US dollar 23,085 1,488

Bulgarian lev - 55

Hungarian forint - 134

Argentine peso 1,542 215

Chilean peso 26 80,078

Mexican peso 101,109 17,253

Brazilian real 7,423 19,160

TOTAL 134,526 118,415

9. Consolidated profit attributable to the Parent

The detail of the contribution to net profit attributable to the Parent in 2008 and 2007 by each of the consolidated

companies is as follows:

Thousands of euros

Company 2008 2007

Obrascón Huarte Lain, S.A. 57,677 43,846

Administradora Mexiquense del Aeropuerto Internacional de Toluca, S.A. de C.V. 3,045 931

Aeropistas, S.L. (11,973) (10,829)

Agrupación Guinovart Obras y Servicios Hispania, S.A. (63) 6,404

Ambient Serviços Ambientais de Ribeirão Preto, S.A. 4,083 4,041

Aquaria Water LLC (136) -

Arellano Construction Co. 509 -

Asfaltos y Construcciones Elsan, S.A. (1,564) (3,759)

Astral Facilities Management, S.A. (231) (1)

Atmos Española, S.A. 133 -

Autopark, S.A. (2,926) (79)

Autopista Eje Aeropuerto Concesionaria Española, S.A. (13,407) (790)

Autopista Ezeiza Cañuelas, S.A. (5,684) (2,137)

Autopista Fernão Días, S.A. (66) -

Autopista Regis Bittencourt, S.A. 56 -

Autovias, S.A. 8,627 6,458

Avalora Tecnologías de la Información, S.A. 443 499

Baja Puerto Escondido, S.A. de C.V. (3,119) (1,859)

Biorreciclaje de Cádiz, S.A. 1,559 -

BNS International, Inc. (142) (178)

Cádiz San Fernando, A.I.E. 124 127

Centro Comercial Paseo de San Francisco, S.A. de C.V. (3,530) (1,624)

Centrovias Sistemas Rodoviários, S.A. 7,395 8,677

Chemtrol Proyectos y Sistemas, S.L. (56) -

Community Asphalt Corp. 7,710 9,265 >>

161


2008



Construcciones Adolfo Sobrino, S.A. 145 482


Construcciones Enrique de Luis, S.A. 212 (551)

Constructora de Proyectos Viales de México, S.A. de C.V. 15,292 4,631

Constructora TP, S.A.C. (1,356) -

Consulmina, S.L. - 355

Desalant, S.A. (7,296) (648)

Desalinizadora Arica, Ltda. 222 306

Ecolaire España, S.A. 422 -

E.M.V. Alcalá de Henares, S.A. 56 48

Electrificaciones y Montajes Integrales OHL , S.A. (184) (288)

Euroconcesiones, S.L. (535) (362)

Euroglosa 45 Concesionaria de la Comunidad de Madrid, S.A. 3,036 2,025

Gastronómica Santa Fé, S.A. de C.V. (854) (1,453)

Golf de Mayakoba, S.A. de C.V. 222 (1,090)

Grupo Autopistas Nacionales, S.A. 1,451 805

Hospital del Sureste, S.A. (420) (8)

Huaribe S.A. de C.V. (8,223) (4,253)

Huartemex, S.A. de C.V. (166) (56)

Infraestructura Dos Mil, S.A. (1,733) (2,375)

Ingeniería de los Recursos Naturales, S.A. 165 32

Inima de México, S.A. de C.V. (323) (731)

Inmobiliaria Fumisa, S.A. de C.V. - 12,645

Inmobiliaria Mayaluum, S.A. de C.V. 2,354 3,704

Instituto de Gestión Sanitaria, S.A. (71) (101)

Islas de Mayakoba, S.A. de C.V. 7,642 849

Islas de Mayakoba Servicios, S.A. de C.V. 83 50

Jose Malvar Construcciones, S.A. - 229

Latina Manutençao de Rodovias, Ltda. 5,737 24

Marina Mayakoba, S.A. de C.V. (79) (6)

Marina Urola, S.A. (136) 81

Metro Ligero Oeste, S.A. (10,074) (3,039)

MKH Promatec, S.A. 221 -

Morkaitz, S.A. (89) 142

Nova Dársena Esportiva de Bara, S.A. (185) -

Nuevo Hospital de Burgos, S.A. (90) (61)

Obras y Servicios Hispania Gas, S.A. 415 399

Obrascón Huarte Lain, Construcción Internacional, S.L. (1,388) 903

Obrascón Huarte Lain, Desarrollos, S.L. (286) 180

OHL Andina, S.A. 2,811 (994)

OHL Austral, S.A. 4,148 7,852

OHL Brasil, S.A. (4,356) (4,943)

OHL Central Europe, a.s. (2,626) (424)

OHL Construction Canada, Inc (56) -

OHL Concesiones Argentina, S.A. 95 -

OHL Concesiones Chile, S.A. 553 (5)

OHL Concesiones México, S.A. de C.V. 189 650

OHL Concesiones, S.L. 3,001 3,214

OHL Industrial, S.L. (559) -

OHL Infrastructure Central Europe, s.r.o (80) -

>>

>>

162


OHL Infrastructures, Inc. (3,018) (1,667)

OHL Medio Ambiente, Inima, S.A. 208 (2,241)

OHL Meio Ambiente Inima Brasil Ltda 167 -

OHL Medio Ambiente, Inima Chile Ltda. (1,801) 39

OHL, México SC, S.A. de C.V. 99 86

OHL Toluca, S.A. de C.V. (100) (58)

OHL USA, Inc. (673) (538)

OHL ŽS, a.s. 7,867 7,617

Operadora Concesionaria Mexiquense, S.A. de C.V. 2,064 1,604

Operadora Mayakoba, S.A. de C.V. (82) (1,600)

Pachira, S.L. 25,974 1,060

PACSA, Servicios Urbanos y del Medio Natural, S.L. (131) 1,611

Participes en Brasil, S.L. 3,672 (1,038)

Paulista Infraestructura, Ltda. 3,871 (8)

Port Torredembarra, S.A. 285 (235)

Promoaqua Desalación de los Cabos, S.A. de C.V. (234) (630)

Proyectos y Servicios, S.A. (248) -

S.A. Trabajos y Obras (12,650) 418

Sacova Centros Residenciales S.L. (2,118) (2,718)

Sawgrass Rock Quarry Inc. 53 252

Seconmex Administración, S.A. de C.V. 111 127

Sociedad Concesionaria Autopista del Sol, S.A. (2,856) (2,415)

Sociedad Concesionaria Autopista Los Andes, S.A. (641) -

Sociedad Concesionaria Autopista Los Libertadores, S.A. (4,819) 521

Sociedad Concesionaria Centro de Justicia de Santiago, S.A. 1,692 (1)

Sociedad Vehículo CA, S.L. (2,870) (4,736)

Sociedade para Participaçao em Rodavías, S.A. 524 (627)

Stride Contractors, Inc 237 -

Técnicas y Gestión Medioambiental, S.A. 991 198

Tenedora de Participaciones Tecnológicas, S.A. (4,964) (63)

Terminales Marítimas del Sureste, S.A. (1,384) (88)

The Tower Group, Inc. (7,715) (1,394)

Tomi Remont, a.s. 555 1,294

Trabajos de Carpintería Especializados, S.L. (499) (230)

Tractament Metropolitá de Fangs, S.L. 105 1,242

Transportes Aéreos Xalapa, S.A. de C.V. - (1,969)

TSS, a.s. 1,653 3,110

Urbanizadora Hispano Belga, S.A. (34) (124)

Urbs Iudex et Causidicus, S.A. (407) (118)

Vianorte, S.A. 2,551 163

Viveros de Mayakoba, S.A. de C.V. 170 118

ŽPSV Caña, a.s. 22 319

ŽPSV, a.s. 4,936 3,674

ŽS Bratislava, a.s. 646 609

Other 49 86

150,686 140,450

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2008

D.- Other disclosures

D.1.- Segment reporting

Segment reporting is structured by separating the primary segments from the secondary segments.

The Group considers that the segmentation that best represents it is that based on the various business areas

in which it operates. These areas constitute the primary segments, which are:

• Construction in Spain

• Construction abroad

• Industrial (*)

• Infrastructure concessions

• Environment

• Development

(*) Activity initiated in 2008

Basic information about these businesses in 2008 and 2007 is presented below.

Thousands of euros

2008

Construction in Spain

Construction abroad

Industrial Concessions Environment Development Total Group

Revenue 1,786,361 1,429,063 25,520 542,381 119,964 105,488 4,008,777

EBITDA 120,828 111,127 1,649 339,779 19,293 14,906 607,582

As a percentage of revenue

6.8% 7.8% 6.5% 62.6% 16.1% 14.1% 15.2%

EBIT 101,667 76,758 1,559 228,028 8,122 6,545 422,689


5.7% 5.4% 6.1% 42.0% 6.8% 6.2% 10.5%

Property, plant and equipment, net

97,481 191,852 190 2,990,275 187,069 195,873 3,683,892

Current assets 1,555,397 1,149,295 18,200 514,082 133,768 113,840 2,788,286

Current liabilities 1,271,718 983,380 8,272 607,719 145,902 222,560 3,020,313

Operating cash flow (*) (8,683) 83,359 209 383,365 32,910 (11,384) 392,328

Changes in with recourse borrowings (*)

55,813 10,448 18,046 201,863 (15,848) 101 432,833

Change in non-recourse borrowings (*)

- (13,633) - 298,250 24,343 18,631 327,591

Investments and other (*) (47,130) (80,174) (18,255) (883,478) (41,405) (7,348) (1,152,752)

(*) Excluding effect of changes in the scope of consolidation and exchange rates.

164


Thousands of euros

2007

Concept Construction in Spain

Construction abroad

Industrial Concessions Environment Development Total Group

Revenue 1,973,872 1,162,256 - 435,453 116,800 76,038 3,764,419

EBITDA 117,894 86,945 - 317,021 13,041 8,040 542,941


6.0% 7.5% - 72.8% 11.2% 10.6% 14.4%

EBIT 92,988 57,456 - 215,910 5,387 1,963 373,704


4.7% 4.9% - 49.6% 4.6% 2.6% 9.9%


91,376 178,477 - 2,653,274 176,312 217,763 3,337,064

Current assets 1,688,569 780,700 - 390,011 144,517 105,081 2,741,769

Current liabilities 1,467,245 590,278 - 596,022 202,628 242,962 2,953,480

Operating cash flow (*) 120,649 28,203 - 180,867 14,014 11,892 297,402

Changes in with recourse borrowings (*)

(95,294) 32,480 - 89,872 10,551 59,712 206,682

Change in non-recourse borrowings (*)

- (14,197) - 346,282 14,053 (1,082) 345,056

Investments and other (*) (25,355) (46,486) - (617,021) (38,618) (70,522) (849,140)

(*) Excluding effect of changes in the scope of consolidation and exchange rates..

The secondary segments are the geographical areas in which the Group operated during the year. The most

significant segment information is as follows:

Thousands of euros

Concept2008

Spain Algeria Brazil Eastern Europe

Chile Mexico Qatar Turkey United States

Other countries

Total Group

Revenue 1,946,674 224,755 351,760 565,681 197,773 257,089 62,978 1,370 349,980 50,717 4,008,777

EBITDA 87,210 25,544 230,468 32,533 52,821 147,772 19,562 481 10,075 1,116 607,582


4.5% 11.4% 65.5% 5.8% 26.7% 57.5% 31.1% 35.1% 2.9% 2.2% 15.2%

EBIT 36,106 18,131 163,381 22,442 31,151 133,920 19,206 246 302 (2,196) 422,689


1.9% 8.1% 46.4% 4.0% 15.8% 52.1% 30.5% 18.0% 0.1% -4.3% 10.5%

Profit after taxes (attributable)

16,389 10,552 50,420 12,352 (11,699) 80,029 15,964 120 (4,416) (19,025) 150,686


0.8% 4.7% 14.3% 2.2% -5.9% 31.1% 25.3% 8.8% -1.3% -37.5% 3.8%

Year-end headcount 6,430 950 3,673 2,966 2,874 1,537 454 16 1,014 643 20,557

Short-term backlog 3,312,673 684,074 - 555,900 49,884 185,575 844,121 13,824 352,397 25,112 6,023,560

Long-term backlog 6,919,551 1,357,332 20,692,549 - 4,401,094 18,560,362 - - 337,092 776,572 53,044,552

Total backlog 10,232,224 2,041,406 20,692,549 555,900 4,450,978 18,745,937 844,121 13,824 689,489 801,684 59,068,112


1,283,969 18,663 818,682 78,411 478,797 821,764 6,175 - 95,307 82,124 3,683,892

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2008

Thousands of euros

Concept

2007

Spain Algeria Brazil Eastern Europe

Chile Mexico Qatar Turkey United States

Other coun-tries

Total Group

Revenue 2,080,574 43,340 245,069 434,403 190,540 248,350 - 113,359 383,504 25,280 3,764,419

EBITDA 110,075 (1,170) 168,156 27,514 53,939 130,437 - 23,344 27,692 2,954 542,941


5.3% -2.7% 68.6% 6.3% 28.3% 52.5% - 20.6% 7.2% 11.7% 14.4%

EBIT 66,184 (3,726) 114,185 18,515 33,971 104,136 - 22,995 18,203 (759) 373,704


3.2% -8.6% 46.6% 4.3% 17.8% 41.9% - 20.3% 4.7% -3.0% 9.9%

Profit after taxes (attributable)

21,343 (1,883) 29,541 15,480 2,484 56,273 - 15,283 4,863 (2,934) 140,450


1.0% -4.3% 12.1% 3.6% 1.3% 22.7% - 13.5% 1.3% -11.6% 3.7%

Year-end headcount

5,715 275 1,490 2,798 1,560 826 - 21 906 478 14,069

Short-term backlog

3,544,642 526,269 - 595,906 181,007 70,419 - 5,381 323,925 54,588 5,302,137

Long-term backlog

6,711,24 1,283,200 6,428,899 25,690 5,294,938 11,966,886 - - 318,682 725,800 32,756,019

Total backlog 10,256,566 1,809,469 6,428,899 621,596 5,475,945 12,037,305 - 5,381 642,607 780,388 38,058,156


1,169,968 6,886 659,663 72,246 523,714 749,100 - 195 72,025 83,267 3,337,064

D.2. Risk control

One of the priorities of the Group’s corporate governance policy is risk management and internal control. Internal

control procedures must enable risk control to be improved, facilitate a monitoring system and ensure that the

controls are applied correctly.

The objectives of risk management are as follows:

•Prevention and control of the risks that may affect the achievement of the targets set by the Group and its

equity.

• Ensure compliance with current legislation and with the Group’s internal regulations and procedures.

• Guarantee the reliability and completeness of the accounting and financial information.

In order to strengthen the integration of risk management in the decisions relating to the Group’s business,

the Parent continued to reinforce the global risk management system and enhanced the management system

of the whole organisation so that the managers of all the business lines follow the same corporate principles

in risk management and are able to use uniform policies, processes and models.

166


This integrated risk control system permits the following:

1) Identification of the events that may affect the achievement of the Group’s targets.

2) Evaluation of the risks arising from these events.

3) Taking of decisions on the measures to be implemented to maintain the risks within the established

limits.

4) Appropriate monitoring of risks.

The Group currently has a corporate risk model, drawn up on the basis of the models established for the

Construction in Spain and Construction Abroad business lines, with their respective indicators for the risks

identified. Once the control targets had been identified, they were systematically monitored with the aim of

extending them to the other activities.

The Group has thus identified the risks that may prevent it from achieving its targets; it has fostered the

ongoing improvement of the existing controls (actions, policies, regulations and procedures), perfecting the

measurement indicators established for each risk and, therefore, has minimised the probability of these risks

having a significant impact on its business.

Group risks

The Group’s normal activity in different business and geographical areas requires an ongoing analysis of the

main risks which can be classified as follows:

a) Market risks

In this category the Group manages the risks relating to changing and specific circumstances in the markets in

which it operates, particularly potential regulatory changes in the various markets, country risk and risk arising

from entries into the market, alliances and joint ventures.

b) Operating risks

The main operational risks managed by the Group relate to:

• Contracting: bringing contracts into line with the policies defined by the Group.

• Subcontracting: arising from the secondary liability of the Group for the performance of subcontractors and

from possible discrepancies in the fulfilment of contracts.

• Quality: ensuring that the Group’s products and services meet the specifications and requirements of

customers and third parties.

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2008

• Health and safety: managing and preventing occupational illness and accidents suffered by Group employees

and by external personnel of collaborators.

• Environmental: efficient use of resources to prevent business activities having an adverse impact, mainly

on the environment but also on persons and property.

c) Financial risks

These risks mainly affect the obtainment of financing when required and at a reasonable cost and the

maximisation of the available financial resources. The most significant are as follows:

• Interest rate risk

• Foreign currency risk

• Credit risk

• Liquidity risk

d) Risks related to the reliability of economic and financial information

The Group’s objective is to ensure that the information used is correct and accurate and enables decisions to

be taken by Group executives and third parties.

Risk control policies and systems

By implementing an integral risk control model, the Group’s traditional policies for minimising risks and the

most efficient and complete control systems are being systematically integrated.

Both the control systems and the policies are backed up by internal regulations (rules and procedures) and by

information systems to form a complete, homogeneous and uniform whole. The main systems and policies and

their correlation with the aforementioned risks are detailed below:

a) Market-related

The Group’s presence in the Spanish and foreign markets is the result of a strategy defined after detailed

analysis of the risks and opportunities therein by the Group’s Strategy Committee and the managers of each

business line. This, together with the Group’s historical experience in many of these markets, mitigates the

exposure to risk.

The main business and geographical risk factors in each market are also monitored so that they may be

pre-empted.

168


Investment policy

All investments are carried out following the strategy set by the Group through its managing bodies, which is

monitored and defined by the Group’s Management Committee.

An Investment Committee analyses all the economic, financial, legal and tax aspects and the return required in

order to guarantee that all investments are in line with the aforementioned policy. It also takes all the decisions

on divestments and mergers.

b) Operations-related

System for the technical and economic planning of projects

There are detailed procedures with controls at different levels for project tender processes which disclose any

failure to comply with the Group’s objectives in this respect.

Most of the risks inherent to the performance of projects are associated with the meeting of deadlines, correct

performance and the control of project operations and costs.

The Group has technical planning tools that enable it to study, develop and monitor the complete execution

of the project by cost and sales activity. A system of this nature needs to be monitored and updated and the

production line reviews the progress of the projects at least every four months and takes all the corrective

measures required to guarantee deadlines, quality and profitability.

The business areas that do not use this tool have other specific tools with which to analyse the progress of

their business (e.g. traffic and incident control in concessions, etc.) and similarly take the required measures,

where necessary.

Purchasing system

The Group’s purchasing system is essential to guarantee the construction period, quality and profitability of

projects. Consequently, the Group uses tools such as internal regulations and computer systems to make this

process as efficient and transparent as possible.

The process begins with the accreditation of suppliers and subcontractors, which is an essential requirement

in order for bids to be accepted and projects to be awarded. Once this procedure has been carried out, the

decision-making processes related to orders or subcontracted work must comply with internal regulations

169


2008

and be monitored in the performance phase by the manager of each project, who in turn is supervised by the

Purchasing Manager who follows all the process by computer.

Control of the legal obligations (tax and labour law) of the companies that work with us is monitored closely.

Insurance policy

The Group’s insurance policy is designed and implemented on a centralised basis.

In this regard, the Group insures its assets and takes out third-party liability and all-risk construction insurance

policies with the widest possible coverage for an appropriate price (cost of premiums).

All insurance cover is reviewed periodically to adapt it to changing conditions and to thus guarantee its

application.

Accordingly, in fulfilment of Environmental Liability Law 26/2007, transposing Directive 2004/35/CE, the Company

has taken out the insurance policy required to provide cover for this risk throughout the European Unión.

Quality system

The quality management system is essential to the achievement of the Group’s expected profitability since it

ensures that the quality standards required by customers are fulfilled.

This system complies with the ISO 9001:2000 standard and focuses on ongoing improvement and customer

satisfaction.

A key element of the quality system is the requirement for our suppliers and subcontractors to comply with the

aforementioned quality standards, which is why the prior accreditation system exists.

The quality system is implemented at most of our Spanish and foreign subsidiaries.

Occupational risk prevention system

The strategic plan initiated in 2004 enabled the Group to obtain OHSAS 18001:1999 certification in 2005. This

certificate is issued by SGS and has helped to implement a “zero accident” philosophy, reducing the accident

rate year after year.

Pursuant to the Occupational Risk Prevention Law, the Group subsidiaries act through the Joint Prevention

Service (SPM) which monitors the application of obligatory safety measures and prepares an occupational risk

prevention system in line with the UNE 81900 and OHSAS 18000 standards.

170


Environmental management system

The Group is aware of the environmental impact of its activities and is liable to both its customers and society.

It therefore uses an environmental management system based mainly on the management of quality and

sustainability indicators which afford a more profound and detailed knowledge of the impact on the environment

and allow the Group to take measures in this respect.

Employees are also given ongoing training in this area and the Group works with customers, suppliers,

governments and agencies in this connection.

Executive code of conduct

In 2002 the Group approved a code of conduct which ensures that all managers take into account the need to

comply with certain ethical principles in their actions.

Every executive receives and agrees to comply with the code.

A corporate Conduct Committee establishes and develops the procedures required to ensure compliance with

the code and is also responsible for interpreting infringements and proposing the appropriate disciplinary

measures.

The Group’s Internal Audit unit, which reports to the Audit and Compliance Committee of the Board of Directors

and performs annual reviews, plays a key role in the detection of internal infringements, which it reports to

the Committee.

Human resources policy

All Group policies in this area focus on the creation of stable and safe workplaces and professional training

and development.

At the same time, since the employees are considered the Group’s primary asset, there is fluent communication

with workers’ representatives to facilitate an appropriate working environment.

c) Finance-related

The Group uses derivative financial instruments to mitigate the economic effects that might arise from the

foreign currency and interest risks to which it is exposed due to its business activities. These instruments are

arranged with highly solvent banks, thus reducing the credit risk to a minimum.

The liquidity risk is managed by controlling availability.

171


2008

The credit risk is also monitored exhaustively from the time a contract is studied until the debt has been

collected in full. The appropriate guarantees and hedges are also arranged when the circumstances so require

and particularly in connection with international projects.


Economic information system

The information system is based on an in-house accounting system implemented at most Spanish Group

companies and at certain of the foreign companies, whose basic administrative processes and the associated

controls were developed by the Parent. When the characteristics of the activity so advise, specific accounting

and management systems are used.

Both systems are completed by a single reporting system for all Group companies which enables economic

information to be prepared for external reporting purposes.

The reliability of the Group’s information is guaranteed by internal controls which may take the shape of automatic

processes or periodic reviews..

Other matters

The general supervisory functions of the Audit Committee of the Board of Directors include the review of the

Group’s financial statements, monitoring compliance with legal requirements and the correct application of

accounting policies and the review of the periodic financial information that the Board must furnish to the

markets.

If deemed appropriate, it may also use the advisory services of external professionals, those of any executives

considered necessary and those of external auditors.

D.3.- Number of employees

The average number of employees in 2008 and 2007, by professional category, was as follows:

Professional categoryAverage number of employees

2008 2007

Management and university graduates 2,189 1,948

Further education college graduates 2,211 2,050

Non-graduate line personnel 2,155 1,957

Clerical staff 1,797 1,737

Other 8,572 5,890

Total 16,924 13,582

Permanent employees 11,708 9,762

Temporary employees 5,216 3,820

Total 16,924 13,582

172


The average number of employees in 2008, by category and gender, was as follows:

Professional categoryAverage number of employees

Men Women

Management and university graduates 1,646 543

Further education college graduates 1,717 494

Non-graduate line personnel 1,905 250

Clerical staff 1,045 752

Other 7,240 1,332

Total 13,553 3,371

D.4. Transactions with related companies

Related-party transactions are deemed to be transactions with players outside the Group but with which there

are strong ties as defined in Ministry of Economy and Finance Order EHA/3050/2004, of 15 September, and in

Spanish National Securities Market Commission (CNMV) Circular 1/2005, of 1 April.

The following transactions were performed with related companies in 2008 and 2007:

Thousands of euros

Concept 2008 % of total 2007 % of total

Revenue 46,625 1.16 46,524 1.24

Other operating income 1,279 0.51 581 0.29

Procurements 2,989 0.12 4,038 0.17

Other operating expenses 16,049 2.64 4,289 0.82

Acquisition of intangible assets 276 - 242 -

Purchases of property, plant and equipment 122 -

Disposal of property, plant and equipment 155 - - -

The breakdown of the aforementioned transactions is as follows:

Employer Identification

Number of the related company

Name of the related company

Type of relationship

Type of transaction Name of the Group

company

Thousands of euros

A-78917440 Torre Espacio Castellana, S.A. Contractual Construction work OHL, S.A. 11,942

B-82607839 Promociones y Propiedades Inmobiliarias Espacio, S.L.

Contractual Construction work OHL, S.A. 9,171

B-95258786 Promoción Los Granados del Mar, S.L. Contractual Construction work OHL, S.A. 22

B-82963091 Espacio Zona Prime, S.L. Contractual Construction work OHL, S.A. 1,949

B-03753340 Espacio Alicante, S.L Contractual Construction work OHL, S.A. 2,731

77-0684507 Espacio USA, Inc. Contractual Construction work The Tower Group 4,614

B-80420516 Ferroatlántica, S.L. Contractual Construction work Ecolaire España, S.A. 280 >>

173


2008

B-80420516 Ferroatlantica, S.L. Contractual Construction work Proyectos y Sistemas, S.A.

13

A-28165298 Fertiberia, S.A. Contractual Construction work Ecolaire España, S.A. 104

DRR0810211M7 Desarrollos RBK en la Rivera, S.A. de C.V. Contractual Gains on sales Islas de Mayakoba, S.A de C.V.

15,799

A-28032829 Pacadar, S.A. Contractual Services OHL, S.A. 1

DRR0810211M7 Desarrollos RBK en la Rivera, S.A. de C.V. Contractual Services Islas de Mayakoba, S.A de C.V.

16

A-80400351 Espacio Information Techonology, S.A. Contractual Services OHL, S.A. 224

A-80400351 Espacio Information Techonology, S.A. Contractual Services Instituto de Gestión Sanitaria, S.A.

2

77-0684507 Espacio USA, INC. Contractual Services The Tower Group 8

B-80420516 Ferroatlantica, S.L. Contractual Services OHL, S.A. 1

A-28294718 Inmobiliaria Espacio, S.A. Contractual Services Instituto de Gestión Sanitaria, S.A.

13

A-78917440 Torre Espacio Castellana, S.A. Contractual Services Instituto de Gestión Sanitaria, S.A.

40

B-84996362 Torre Espacio Gestión, S.L. Contractual Services Instituto de Gestión Sanitaria, S.A.

257

B-82500257 Grupo Villar Mir, S.L. Contractual Services OHL, S.A. 571


Contractual Services OHL, S.A. 20

B-95258786 Promoción los Granados del Mar Contractual Services OHL, S.A. 27

A-28165298 Fertiberia, S.A. Contractual Services OHL, S.A. 44

B-82963091 Espacio Zona Prime, S.L. Contractual Services OHL, S.A. 55

A-80400351 Espacio Information Techonology, S.A. Contractual Disposal of property, plant and equipment

OHL, S.A. 129

B-84996362 Torre Espacio Gestión, S.L. Contractual Disposal of property, plant and equipment

OHL, S.A. 26

A-28032829 Pacadar, S.A. Contractual Procurements OHL, S.A. 1,040

A-28032829 Pacadar, S.A. Contractual Procurements S.A. Trabajos y Obras 321

A-96736335 P. Pretensados de Levante, S.A. Contractual Procurements OHL, S.A. 911

A-78917440 Torre Espacio Castellana, S.A. Contractual Procurements OHL, S.A. 706

A-79322947 Codisoil, S.A. Contractual Procurements OHL, S.A. 11

A-80400351 Espacio Information Techonology, S.A. Contractual Provision of outside services

Agrupación Guinovart Obras y Servicios Hispania, S.A.

300


Asfaltos y Construcciones Elsan, S.A.

195


OHL Medio Ambiente, Inima, S.A.

88


Electrificaciones y Montajes Integrales OHL, S.A.

42


Morkaitz, S.A. 10


OHL Desarrollos, S.L. 24

>> >>

174



Construcciones Enrique de Luis, S.A.

45


Construcciones Adolfo Sobrino, S.A.

85


OHL Concesiones, S.L. 568


S.A. Trabajos y Obras 215


OHL, S.A. 2,661

B-84996362 Torre Espacio Gestión, S.L. Contractual Provision of outside services

OHL, S.A. 1

A-78917440 Torre Espacio Castellana, S.A. Contractual Provision of outside services

OHL, S.A. 5,470


Contractual Provision of outside services

OHL, S.A. 1

A-28027183 Ideam, S.A. Contractual Provision of outside services

OHL, S.A. 299

B-84481506 Fórmula Jet, S.L. Contractual Provision of outside services

OHL, S.A. 1,247

B-84481506 Fórmula Jet, S.L. Contractual Provision of outside services

OHL Medio Ambiente, Inima, S.A.

8

A-28294718 Inmobiliaria Espacio, S.A. Contractual Provision of outside services

OHL, S.A. 11

A-28171288 Técnica y Proyectos S.A. Contractual Provision of outside services

OHL, S.A. 4,604

B-84033935 Durinx Servicios, S.L. Contractual Provision of outside services

OHL, S.A. 175

A-80400351 Espacio Information Technology, S.A. Contractual Acquisition of intangible asset

OHL, S.A. 276

A-78917440 Torre Espacio Castellana, S.A. Contractual Pourchase of property, plant and equipment

OHL, S.A. 122

The transactions were performed on an arm’s length basis.

At 31 December 2008 and 2007, the balances with related companies were as follows:

>>

175


2008

Thousands of euros

Concept 2008 % of total 2007 % of total

Assets

Non-Current

Deposits and guarantees given 1,208 4.21 - -

Current

Trade receivables for sales and services 27,718 1.84 20,847 1.49

Sundry accounts receivable 647 0.40 111 0.05

Liabilities

Current

Customer advances 2 - 255 0.08

Accounts payable for purchases and services 712 0.07 844 0.08

Notes payable 1,402 0.24 2,074 0.32

Other non-trade payables 3,119 5.98 57 0.09

D.5. Backlog

At 31 December 2008, the Group’s total backlog amounted to EUR 59,068,112 thousand (2007: EUR 38,058,156

thousand).

The breakdown of the Group’s backlog, by activity and geographical market, is as follows:

Thousands of euros

By activity

2008 2007

Short-term maturity

Long-term maturities

Total Short-term maturity


Total

Construction in Spain 3,203,083 17,428 3,220,511 3,491,689 16,590 3,508,279

Construction abroad 2,609,099 107,403 2,716,502 1,440,376 149,200 1,589,576

Industrial 12,162 - 12,162 - - -

Infrastructure concessions - 50,425,410 50,425,410 - 30,261,185 30,261,185

Environment 183,187 2,494,311 2,677,498 314,098 2,329,044 2,643,142

Development 16,029 - 16,029 55,974 - 55,974

Total backlog 6,023,560 53,044,552 59,068,112 5,302,137 32,756,019 38,058,156

Of the total short-term backlog at 31 December 2008, EUR 4,900,490 thousand related to public works and

EUR 1,123,070 thousand to private works (2007: EUR 3,772,947 thousand and EUR 1,529,190 thousand,

respectively).

176


Thousands of euros

Geographical market

2008 2007

Short-term maturity


Total Short-term maturityLong-term maturities

Total

Spain:

Andalucía 536,365 36,502 572,867 374,809 37,707 412,516

Aragón 85,645 - 85,645 156,612 - 156,612

Asturias 161,284 - 161,284 225,418 - 225,418

Balearic Islands 810 - 810 12,181 - 12,181

Canary Islands 194,766 - 194,766 298,655 - 298,655

Cantabria 45,290 - 45,290 45,629 - 45,629

Castilla-La Mancha 133,667 - 133,667 151,778 - 151,778

Castilla y Leon 161,659 - 161,659 155,421 - 155,421

Cataluña 662,036 253,269 915,305 661,919 288,715 950,634

Extremadura 28,705 - 28,705 12,092 - 12,092

Galicia 214,580 - 214,580 266,530 - 266,530

La Rioja 8,154 - 8,154 1,678 - 1,678

Madrid 762,983 6,075,590 6,838,573 807,398 5,812,066 6,619,464

Melilla - - - 30 - 30

Murcia 43,853 - 43,853 64,046 - 64,046

Navarra 26,748 - 26,748 34,718 - 34,718

Basque country 94,995 29,460 124,455 95,318 30,449 125,767

Valencia 147,769 524,730 672,499 180,410 542,987 723,397

Total Spain 3,309,309 6,919,551 10,228,860 3,544,642 6,711,924 10,256,566

Abroad:

Algeria 684,074 1,357,332 2,041,406 526,269 1,283,200 1,809,469

Argentina 13,018 776,572 789,590 27,422 725,800 753,222

Azerbaijan 74,719 - 74,719 89,082 - 89,082

Brazil - 20,692,549 20,692,549 - 6,428,899 6,428,899

Bulgaria 5,775 - 5,775 - - -

Chile 49,884 4,401,094 4,450,978 181,007 5,294,938 5,475,945

Ecuador - - - 20,364 - 20,364

United States 352,397 337,092 689,489 323,925 318,682 642,607

France 77 - 77 - - -

Hungary 38,923 - 38,923 - - -

Israel - - - 6,803 - 6,803

Qatar 844,121 - 844,121 - - -

Morocco 1,235 - 1,235 - - -

Mexico 185,575 18,560,362 18,745,937 70,419 11,966,886 12,037,305

Montenegro 3,596 - 3,596 10,174 - 10,174

Mozambique 5 - 5 - - -

Peru 10,600 - 10,600 - - -

Czech Republic 409,940 - 409,940 490,582 25,690 516,272

Slovakia 22,947 - 22,947 6,067 - 6,067

Turkey 17,188 - 17,188 5,381 - 5,381

Venezuela 177 - 177 - - -

Total abroad 2,714,251 46,125,001 48,839,252 1,757,495 26,044,095 27,801,590

Total backlog 6,023,560 53,044,552 59,068,112 5,302,137 32,756,019 38,058,156

177


2008

At 31 December 2008, the total backlog abroad represented 82.7% of the total backlog (2007: 73.1%).

D.6. Guarantee commitments to third parties

The contingent liabilities include the normal liability of construction companies for the performance and

completion of the project contracts held by the Group companies and those arranged by the joint ventures in

which they have interests. There is also a secondary liability for the obligations of the Group’s subcontractors

to the social security system with respect to their site employees. No losses are expected to arise for the Group

in this connection.

At 31 December 2008, the Group companies had provided EUR 2,779,307 thousand of guarantees to third parties

(31 December 2007: EUR 2,300,714 thousand), of which, in accordance with standard practice in the industry,

EUR 2,525,458 thousand (31 December 2007: 2,063,461 thousand) related to completion bonds deposited with

public authorities and private customers to guarantee proper performance of the project contracts, and the

remainder to provisional guarantees for project bids.

Also, some Group companies had provided personal and joint and several guarantees to various entities (mainly

banks) as security for the credit facilities granted to other Group companies which amounted to EUR 3,580

thousand at 31 December 2008 (31 December 2007: EUR 4,832 thousand).

The Parent’s directors do not expect any additional liabilities to arise in connection with these guarantees that

might affect the 2008 financial statements.

D.7. Remuneration of directors and senior executives

1. Remuneration of the Board of Directors

At the Annual General Meeting of OBRASCÓN HUARTE LAIN, S.A. held on 10 May 2007, the shareholders

approved the Board of Directors’ remuneration policy consisting of fixed annual remuneration set at SEVEN

HUNDRED AND FIFTY THOUSAND (750,000) EUROS for 2007 and subsequent years, maintaining the criteria for

its distribution among the directors unchanged, with the sole exception being that it would also be distributed

among the Executive Directors.

In 2008, as in prior years, the non-executive directors did not receive any kind of variable remuneration or

benefits. Executive directors received a fixed salary and variable remuneration based on objectives, the amount

of which is set annually by the Nomination and Remuneration Committee. The Company also pays life insurance

premiums for executive directors.

In accordance with the foregoing, the remuneration earned in 2008 by the directors in all connections was as

follows:

178


Euros

Directors BOARD MEETINGS

AUDIT COMMITTEE MEETINGS

NOMINATION COMMITTEE MEETINGS

ATTENDANCE FEES (EUROS)

VARIABLE REMUNERATION

(EUROS)

TOTAL REMUNERATION

(EUROS)

Juan-Miguel Villar Mir 6 - 2 18,000.00 67,539.00 85,539.00

José Luis García-Villalba González 6 - 2 18,000.00 59,097.00 77,097.00

Juan Villar-Mir de Fuentes 6 6 - 27,000.00 40,523.50 67,523.50

Rafael Martín de Nicolás Cañas 6 - - 13,500.00 33,770.00 47,270.00

Baltasar Aymerich Corominas 6 - - 13,500.00 33,770.00 47,270.00

Tomás García Madrid 6 6 - 27,000.00 40,523.50 67,523.50

Javier López Madrid 6 - 2 18,000.00 40,523.50 58,523.50

Juan Mato Rodríguez 6 6 - 27,000.00 50,654.00 77,654.00

SAAREMA INVERSIONES, S.A., represented by Mr. Joaquín García-Quiros Rodríguez

6 2 18,000.00 40,523.50 58,523.50

Luis Solera Gutiérrez 5 2 15,750.00 40,523.50 56,273.50

Jaime Vega de Seoane y Azpilicueta

6 6 - 27,000.00 40,523.50 67,523.50

Silvia Villar-Mir de Fuentes 4 - - 11,250.00 28,029.00 39,279.00

Total - - - 234,000.00 516,000.00 750,000.00

In 2008 the executive director received EUR 695 thousand for the performance of his executive duties.

No advances or loans have been granted to the Board members or senior executives.

Pursuant to Article 127 ter.4 of the Spanish Companies Law, following is a detail of the companies outside the

Obrascón Huarte Lain Group that engage in an activity that is identical, similar or complementary to the activity

that constitutes the corporate purpose of Obrascón Huarte Lain, S.A., in which the members of the Company’s

Board of Directors owned equity interests at 31 December 2008, and of the functions, if any, that they discharged

thereat at that date:

179


2008

Owner Company Position/Function Ownership interest

Juan-Miguel Villar Mir Inmobiliaria Espacio, S.A. Chairman and CEO 5.5% (*)

Promociones y Propiedades Inmobiliarias Espacio, S.L.

- 5.5% (*)

Torre Espacio Castellana, S.A. - 5.5% (*)

Juan Villar-Mir De Fuentes Inmobiliaria Espacio, S.A. Deputy Chairman and CEO 28.7%


Chairman and CEO 28.7% (*)

Torre Espacio Castellana, S.A. Representative of the sole director 28.7% (*)

Tomás García Madrid Inmobiliaria Espacio, S.A. General attorney-in-fact -


General attorney-in-fact -

Torre Espacio Castellana, S.A. General attorney-in-fact -

Pacadar, S.A. Representative of the sole director -

Baltasar Aymerich Corominas Inmobiliaria Espacio, S.A. Adviser to the Chairman -

Silvia Villar-Mir de Fuentes Inmobiliaria Espacio, S.A. Director 28.7%

(*) Indirect ownership interest.

The Company has taken out a directors’ third-party liability insurance policy covering the Board members. There

are no other obligations to the Board members.

2. Remuneration of senior executives

The total remuneration earned by the Parent’s General Managers and by executives who perform similar

functions - excluding those who are also members of the Board of Directors (whose remuneration is detailed

above) - amounted to EUR 3,353 thousand in 2008 (2007: EUR 4,334 thousand).

No advances or loans have been granted to senior executives.

D.8. Fees paid to auditors

The fees for financial audit services paid to the main auditors of the Group companies totalled EUR 2,139

thousand in 2008 (2007: EUR 1,646 thousand) and the audit fees paid to other auditors amounted to EUR 201

thousand (2007: EUR 125 thousand).

Also, the fees for other professional services paid to the principal auditors of the Group companies totalled

EUR 1,468 thousand in 2008 (2007: EUR 303 thousand), and those paid to other auditors amounted to EUR 23

thousand (2007: EUR 3 thousand).

180


E.- Events after the balance sheet date

On 16 March 2009 the rating agency Fitch Ratings reduced the long-term Issuer Default Rating (IDR) and the

unsecured senior debt rating of Obrascón Huarte Lain, S.A. from BBB- to BB+ and the short-term IDR from F3

to B.

The agency placed the long-term IDR and the unsecured senior debt rating on Rating Watch Negative (RWN).

F.- Explanation added for translation to English

These consolidated financial statements are presented on the basis of IFRSs as adopted by the European Union.

Certain accounting practices applied by the Group that conform with IFRSs may not conform with other generally

accepted accounting principles.

181


2008

Exhibits

182


APPENDIX IDetail of the main companies composing teh consolidated Group at 31 December 2008

SUBSIDIARIES (fully consolidated)

COMPANIES WITH REGISTERED OFFICE IN SPAIN COMPANIES WITH REGISTERED OFFICE ABROAD

Construction in Spain Construcción Internacional(1) Agrupación Guinovart Obras y Servicios Hispania, S.A. (2) Arellano Construction Co.(1) Asfaltos y Construcciones Elsan, S.A. (2) BMSK, a.s. Sofie

Astral Facilities Management, S.A. BNS International Inc.(1) Construcciones Adolfo Sobrino, S.A. CAC Vero I, LLC(1) Construcciones Enrique de Luís, S.A. (1) Community Asphalt Corp.(1) Electrificaciones y Montajes Integrales OHL, S.A. (1) Constructora de Proyectos Viales de México, S.A. de C.V.(1) Ingeniería de los Recursos Naturales, S.A. (1) Constructora e Inmobiliaria Huarte Ltda.

Instituto de Gestión Sanitaria, S.A.U. Constructora TP, S.A.C.(2) Morkaitz, S.A. (1) Empresa Constructora Huarte San José, Ltda.

Obras y Servicios Hispania-Gas, S.A. Huarte Ecuador, S.A.Oshsa-Levante, A.I.E. (1) Huartemex, S.A. de C.V.

(1) PACSA, Servicios Urbanos y del Medio Natural, S.L. Hur, S.A.(1) S.A. Trabajos y Obras (1) OHL Andina, S.A.

Trabajos de Carpintería Especializados, S.L. (1) OHL Austral, S.A. (2) OHL Central Europe, a.s.

Construction abroad OHL Construction Canada, Inc.Ferrocivil, S.A. (1) OHL Mexico SC, S.A. de C.V.Obrascón Huarte Lain, Construcción Internacional, S.L. (2) OHL Pozemné stavby, a.s.Posmar Inversiones 2008, S.L. OHL USA, Inc.

(1) Sociedad Vehículo CA, S.L. (1) OHL ZS, a.s.(2) Rentia Invest, a.s.

Industrial Sawgrass Rock Quarry Inc.Atmos Española, S.A. (1) Sociedad Concesionaria Centro de Justicia de Santiago, S.A.

(1) Chentrol Proyectos y Sistemas, S.L. Stride Contractors, Inc.(1) Ecolaire España, S.A. (2) The Tower Group, Inc.

MKH Promatec, S.A. (2) ZPSV Caña, a.s.OHL Industrial, S.L. (2) ZPSV Eood, a.s.Proyectos y Sistemas, S.A. ZPSV Servis, s.r.o.

(1) ZPSV, a.s. Infrastructure concessions (2) ZS Bratislava, a.s.

(1) Aeropistas, S.L. ZS Brno, a.s. (1) Autopista Eje Aeropuerto Concesionaria Española, S.A.(1) Autovía de Aragón-Tramo 1, S.A. Infrastructure concessions(1) Cercanías Móstoles Navalcarnero, S.A. Autopark, S.A.(1) Euroconcesiones, S.L. (1) Autopista Ezeiza Cañuelas, S.A. (1) Euroglosa 45 Concesionaria de la Comunidad de Madrid, S.A. (1) Autopista Fernao Dias, S.A.(2) Marina Urola, S.A. (1) Autopista Fluminense, S.A.(1) Metro Ligero Oeste, S.A. (1) Autopista Litoral Sul, S.A.(1) OHL Concesiones, S.L. (1) Autopista Planalto Sul, S.A.

Pachira, S.L. (1) Autopista Regis Bittencourt, S.A.(1) Participes en Brasil, S.L. (1) Autovias Concesionadas OHL, S.A. de C.V.

Vincida Grupo de Inversiones 2006, S.L. (1) Autovias, S.A.(1) Centrovías Sistemas Rodoviários, S.A.

Environment (1) Concesionaria Mexiquense, S.A. de C.V.(1) OHL Medio Ambiente, Inima, S.A.U. (1) Concessionaria de Rodovías do Interior Paulista, S.A.(2) Técnicas y Gestión Medioambiental, S.A. (1) Construcciones Amozoc Perote, S.A. de C.V.(1) Tractament Metropolità de Fangs, S.L. Financiadora de Proyectos de Infraestructura, S. de R.L. de C.V.

(1) Grupo Autopistas Nacionales, S.A.Development (1) Infraestructura Dos Mil, S.A.

Obrascón Huarte Lain, Desarrollos, S.L. (1) Latina Manutençao de Rodovias, Ltda.(1) Sacova Centros Residenciales, S.L. (1) OHL Brasil, S.A.

(2) OHL Concesiones Argentina, S.A.Other (1) OHL Concesiones Chile, S.A.

Centro de Empresas Sevilla 1, S.A. (1) OHL Concesiones Mexico, S.A. de C.V.Entorno 2000, S.A. OHL Infrastructure Central Europe, s.r.o.Josefa Valcarcel 42, S.A. OHL Infrastructures. Inc.Leonardo Site, S.L. (1) OHL Toluca, S.A. de C.V.Satafi, S.A. (1) Operadora Concesionaria Mexiquense, S.A. de C.V.Tenedora de Participaciones Tecnológicas, S.A. Organización de Proyectos de Infraestructura, S. de R.L. de C.V.Urbanizadora Hispano Belga, S.A. Paulista Infraestructura, Ltda.

(1) Seconmex Administración, S.A. de C.V.(1) Sociedad Concesionaria Autopista del Sol, S.A.(1) Sociedad Concesionaria Autopista Los Andes, S.A.(1) Sociedad Concesionaria Autopista Los Libertadores, S.A.(1) Sociedade para Participaçao em Rodovias, S.A.(1) Viaducto Bicentenario, S.A. de C.V.(1) Vianorte, S.A.

Environment(1) Ambient Serviços Ambientais de Ribeirao Preto, S.A.(2) Aquaria Water LLC(2) Desalant, S.A.(2) Desalinizadora Arica Ltda.(1) Inima de México, S.A. de C.V.(2) Inima USA Construction Corporation(2) Inima USA Corporation(2) Inversiones Inima, S.A.(2) OHL Medio Ambiente, Inima Chile Ltda.(1) OHL Meio Ambiente Inima Brasil Ltda.(1) Promoaqua Desalación de los Cabos, S.A. de C.V.(1) SESAMM - Serviços de Saneamiento de Mogi Mirim, S.A.

Development(1) Aqua Mayakoba, S.A. de C.V.(1) Baja Puerto Escondido, S.A. de C.V.(1) Centro Comercial Paseo de San Francisco, S.A. de C.V.(1) Gastronómica Santa Fe, S.A. de C.V.(1) Golf de Mayakoba, S.A. de C.V.(1) Golf Mayakoba Servicios, S.A. de C.V.(1) Huaribe Servicios, S.A. de C.V.(1) Huaribe, S.A. de C.V.(1) Inmobiliaria Mayaluum Servicios, S.A. de C.V.(1) Inmobiliaria Mayaluum, S.A. de C.V.(1) Islas de Mayakoba Servicios, S.A. de C.V.(1) Islas de Mayakoba, S.A. de C.V.(1) Lagunas de Mayakoba, S.A. de C.V.(1) Lote 5 Hotel Mayakoba, S.A. de C.V.(1) Marina Mayakoba, S.A. de C.V.(1) OHL Desarrollos Mexico, S.A. de C.V.(1) Sociedad de Servicios Paseo de San Francisco, S.A. de C.V.(1) Villas de Mayakoba, S.A. de C.V.(1) Viveros de Mayakoba, S.A. de C.V.

OtherElsengrund Bau GmbHOHL Finance, S.á.r.l.

183


2008APPENDIX IDetail of the main companies composing teh consolidated Group at 31 December 2008

JOINT VENTURES (proportionately consolidated)


Construction in Spain

Asfaltos Elsan-Pacsa Torrescámara, A.I.E.

Inoxosha Gas, A.I.E.


(2) Nova Dársena Esportiva de Bara, S.A.

(1) Terminal Polivalente Sureste, S.L.

(1) Terminales Marítimas del Sureste, S.A.

EnvironmentInalia Water Solutions, S.L.

Inalia Mostaganem, S.L.

ASSOCIATES (accounted for using the equity method)


Construction in Spain Construction abroad Agrupación de Investigación Estratégica Proyecto Fenix, A.I.E. Pevnustka, a.s.

Comaco-Asmaco, A.I.E. (2) Remont Pruga D.D. Sarajevo

Concesionaria Colegio de Usera, S.L. (2) Slovenské Tunely, a.s.

Concessió Estacions Aeroport L 9, S.A. (2) Stavba a údrzba zelezníc, a.s. Bratislava

(1) Hospital del Sureste, S.A. (2) Tomi Remont, a.s.

(1) Nova Bocana Barcelona, S.A. (2) TSS, a.s.

Nova Bocana Bussiness, S.A.

(1) Nuevo Hospital de Burgos, S.A. Infrastructure concessions(1) Urbs Iudex et Causidicus, S.A. (1) Administradora Mexiquense del Aeropuerto Internacional de Toluca, S.A. de C.V.

H.Sacifyc, S.A.


Mepsa Servicios y Operaciones, S.A. Environment Nautic Tarragona, S.A. Shariket Miyeh Ras Djinet, Spa

Port Torredembarra, S.A. Shariket Tahlya Miyah Mostaganem, Spa

Puente Logístico Mediterráneo, S.A.

Sociedad Estatal de Estiba y Desestiba del Puerto de Alicante, A.P.I.E.

Environment Development Cádiz San Fernando, A.I.E. (1) Lotes 3 Servicios, S.A. de C.V.

Desaladora Costa del Sol, S.A. (1) Mayakoba Thai, S.A. de C.V.

(1) Operadora Hotelera del Corredor Mayakoba, S.A. de C.V.

Other (1) Operadora Mayakoba, S.A. de C.V.

Avalora Tecnologías de la Información, S.A. (1) Servicios Hoteleros del Corredor Mayakoba, S.A. de C.V.

Clean-Cenit, A.I.E. Viceroy Resorts Mayakoba, S.R.L. de C.V.

E.M.V. Alcalá de Henares, S.A.

Invercoll, S.A.

Proyecto Cenit-Oasis, A.I.E.

(1) Audited by principal auditor

(2) Audited by other auditors

184


AP

PEN

DIX

II

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.A.

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omes

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gre

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.A.

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Avd

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, nº

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onia

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ez, D

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185


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Com

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Aut

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tenc

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139

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aseo

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onia

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ez, D

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sil,

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s

APPENDIX III

Detail of the equity and next cost of the investment in the main companies composing

the consolidated Group at 31 December 2008

187


2008

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pany

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onia

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ació

n Cu

auht

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ico

D.F

. C.P

. 066

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ico

C.P.

777

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APPENDIX III


the consolidated Group at 31 December 2008Ownership interest Thousands of euros

COMPANY Direct Indirect TotalShare Capital

Capital payments

outstandignReserves

Profit/(Lost) for

2008

Interim dividend

Total shareholder

s’equity


Total equityPartici-pating loan

Equity + Participating

loan

Net cost of the invest-

ment

Fully consolidated subsidiaries

Aeropistas, S.L. - 100.00 100.00 30,597 - 21,132 (46,689) - 5,040 (21,132) (16,092) 45,655 29,563 106,465

Agrupación Guinovart Obras y Servicios Hispania, S.A. 100.00 - 100.00 30,050 - 8,931 2,077 - 41,058 - 41,058 - 41,058 50,885

Ambient Serviços Ambientais de Ribeirao Preto, S.A. 20.91 79.09 100.00 15,064 - (1,333) 3,447 - 17,178 - 17,178 - 17,178 19,418

Aqua Mayakoba, S.A. de C.V. - 60.00 60.00 17,126 - 9 (2) - 17,133 - 17,133 - 17,133 8,658

Aquaria Water LLC - 87.50 87.50 8,623 - - (164) - 8,459 (2,554) 5,905 - 5,905 7,545

Arellano Construction Co. - 70.00 70.00 1 - 5,942 1,380 - 7,323 - 7,323 - 7,323 27,367

Asfaltos y Construcciones Elsan, S.A. 100.00 - 100.00 6,010 - (171) (1,564) - 4,275 - 4,275 - 4,275 5,913

Astral Facilities Management, S.A. 100.00 - 100.00 66 - 304 (231) - 139 - 139 - 139 406

Atmos Española, S.A. - 100.00 100.00 120 - 24 133 - 277 - 277 - 277 280

Autopark, S.A. - 90.00 90.00 1,553 (1,100) (77) (2,683) - (2,307) - (2,307) - (2,307) 757

Autopista Eje Aeropuerto Concesionaria Española, S.A. - 100.00 100.00 42,360 - 284,812 (34,410) - 292,762 - 292,762 - 292,762 289,858

Autopista Ezeiza Cañuelas, S.A. 71.35 - 71.35 26,575 - 1,711 (6,763) - 21,523 - 21,523 - 21,523 78,142

Autopista Fernao Dias, S.A. - 60.00 60.00 17,397 - - (91) - 17,306 - 17,306 - 17,306 10,438

Autopista Fluminense, S.A. - 60.00 60.00 9,631 - - - - 9,631 - 9,631 - 9,631 5,778

Autopista Litoral Sul, S.A. - 60.00 60.00 10,563 - - - - 10,563 - 10,563 - 10,563 6,338

Autopista Planalto Sul, S.A. - 60.00 60.00 7,767 - - (14) - 7,753 - 7,753 - 7,753 4,660

Autopista Regis Bittencourt, S.A. - 60.00 60.00 13,669 - - 78 - 13,747 - 13,747 - 13,747 8,201

Autovía de Aragón-Tramo 1, S.A. 25.00 70.00 95.00 47,448 (31,975) (308) - - 15,165 (4,815) 10,350 - 10,350 10,124

Autovias Concesionadas OHL, S.A. de C.V. - 100.00 100.00 26,318 (22,714) - - - 3,604 - 3,604 - 3,604 3,604

Autovias, S.A. - 60.00 60.00 39,864 (3,373) 8,216 13,102 (6,144) 51,665 - 51,665 - 51,665 30,098

Baja Puerto Escondido, S.A. de C.V. - 100.00 100.00 6,055 - (1,472) (4,906) - (323) - (323) - (323) -

BNS International Inc. - 100.00 100.00 2 - (454) (73) - (525) - (525) - (525) 965

CAC Vero I, LLC - 80.00 80.00 2,515 - 61 43 - 2,619 - 2,619 - 2,619 2,012

Centro Comercial Paseo de San Francisco, S.A. de C.V. - 100.00 100.00 7,635 - (3,487) (2,226) - 1,922 15 1,937 - 1,937 11,379

Centrovías Sistemas Rodoviários, S.A. - 60.00 60.00 29,613 (14,669) 5,111 11,118 (5,239) 25,934 - 25,934 - 25,934 9,721

Cercanías Móstoles Navalcarnero, S.A. 20.00 80.00 100.00 95,549 (71,662) (684) - - 23,203 - 23,203 - 23,203 23,888

Chemtrol Proyectos y Sistemas, S.L. - 100.00 100.00 181 - 536 1,578 - 2,295 - 2,295 - 2,295 10,800

Community Asphalt Corp. - 80.00 80.00 1 - 42,830 14,768 (3,859) 53,740 - 53,740 - 53,740 108,296

Concesionaria Mexiquense, S.A. de C.V. 0.00 87.20 87.20 148,493 - 1,993 13,565 - 164,051 (26,062) 137,989 - 137,989 129,488

Concessionaria de Rodovías do Interior Paulista, S.A. - 60.00 60.00 18,236 (174) 66,501 23,298 (53,214) 54,647 - 54,647 - 54,647 28,358

Construcciones Adolfo Sobrino S.A. 100.00 - 100.00 1,520 - 4,023 55 - 5,598 - 5,598 - 5,598 8,987

Construcciones Amozoc Perote, S.A. de C.V. - 66.50 66.50 3 - 12,532 4,492 - 17,027 - 17,027 - 17,027 2

Construcciones Enrique de Luis, S.A. 100.00 - 100.00 2,140 - 7,263 2,712 (2,500) 9,615 - 9,615 - 9,615 8,607

Constructora de Proyectos Viales de México, S.A. de C.V. 20.09 79.91 100.00 2,634 - 50,514 13,142 - 66,290 - 66,290 - 66,290 18,657

Constructora e Inmobiliaria Huarte Ltda. 89.90 10.10 100.00 588 - 141 (63) - 666 - 666 - 666 843

Constructora TP, S.A.C. - 94.00 94.00 3,199 (608) (933) (1,456) - 202 - 202 - 202 2,410

Desalant, S.A. 0.01 99.99 100.00 20,874 - (272) (6,201) - 14,401 - 14,401 - 14,401 18,424

Desalinizadora Arica Ltda. - 100.00 100.00 537 - 1,403 193 - 2,133 - 2,133 - 2,133 538

Ecolaire España, S.A. - 100.00 100.00 849 - (9) 422 - 1,262 - 1,262 - 1,262 9,605

Electrificaciones y Montajes Integrales OHL, S.A. 100.00 - 100.00 601 - 4,997 1,707 (1,500) 5,805 - 5,805 - 5,805 4,490

Empresa Constructora Huarte San José, Ltda. 95.00 5.00 100.00 1 (17) 236 (29) - 191 - 191 - 191 12

Euroconcesiones, S.L. - 100.00 100.00 3 - 1 1,529 - 1,533 (5,700) (4,167) - (4,167) 3

Euroglosa 45 Concesionaria de la Comunidad de Madrid, S.A. - 100.00 100.00 19,063 - 2,895 4,341 - 26,299 - 26,299 - 26,299 19,441

Ferrocivil, S.A. - 100.00 100.00 60 - 70 13 - 143 - 143 - 143 108

Financiadora de Proyectos de Infraestructura, S. de R.L. de C.V. - 100.00 100.00 - - - 1 - 1 - 1 - 1 -

Gastronómica Santa Fe, S.A. de C.V. - 100.00 100.00 6,600 - (3,850) (733) - 2,017 - 2,017 - 2,017 7,989

Golf de Mayakoba, S.A. de C.V. - 100.00 100.00 14,526 - (5,107) (634) - 8,785 - 8,785 - 8,785 8,862

Golf Mayakoba Servicios, S.A. de C.V. - 100.00 100.00 3 - 59 3 - 65 - 65 - 65 3

Grupo Autopistas Nacionales, S.A. - 55.00 55.00 18,158 - 2,042 2,268 - 22,468 - 22,468 - 22,468 9,987

Huaribe S.A. de C.V. - 100.00 100.00 20,676 - (422) (16,271) - 3,983 - 3,983 - 3,983 10,856

Huaribe Servicios, S.A. de C.V. - 100.00 100.00 3 - 40 21 - 64 - 64 - 64 3

Huartemex S.A. de C.V. - 100.00 100.00 3 - 110 (144) - (31) - (31) - (31) 4

Infraestructura Dos Mil, S.A. - 75.00 75.00 36,107 - (6,228) 1,337 - 31,216 - 31,216 - 31,216 33,251

Ingeniería de los Recursos Naturales, S.A. - 100.00 100.00 643 - 481 165 - 1,289 - 1,289 - 1,289 799

Inima de México, S.A. de C.V. 0.00 100.00 100.00 1,687 - (784) (276) - 627 - 627 - 627 2,272

Inima USA Construction Corporation - 100.00 100.00 - - - - - - - - - - -

Inima USA Corporation - 100.00 100.00 42,471 - (97) (10) - 42,364 - 42,364 - 42,364 42,900

Inmobiliaria Mayaluum Servicios, S.A. de C.V. - 100.00 100.00 3 - 40 14 - 57 - 57 - 57 47

Inmobiliaria Mayaluum, S.A. de C.V. - 100.00 100.00 1,749 - 4,225 2,023 - 7,997 - 7,997 - 7,997 2,843

Instituto de Gestión Sanitaria, S.A.U. - 100.00 100.00 790 - (125) (71) - 594 - 594 263 857 1,331

Inversiones Inima, S.A. 0.89 99.11 100.00 24,782 - (17) (6,139) - 18,626 - 18,626 - 18,626 18,726

Islas de Mayakoba Servicios, S.A. de C.V. - 96.50 96.50 38 (1) 42 74 - 153 - 153 - 153 37

Islas de Mayakoba, S.A. de C.V. - 96.50 96.50 7,097 - 811 6,802 - 14,710 (1,699) 13,011 - 13,011 6,717

Lagunas de Mayakoba, S.A., de C.V. - 53.44 53.44 34,892 - (50) (17) - 34,825 - 34,825 - 34,825 17,604

Latina Manutençao de Rodovias, Ltda. - 60.00 60.00 78 - 701 7,887 (656) 8,010 - 8,010 - 8,010 47

Lote 5 Hotel Mayakoba, S.A. de C.V. - 100.00 100.00 3 - - (1) - 2 - 2 - 2 3

Marina Mayakoba, S.A. de C.V. - 100.00 100.00 524 - (5) (68) - 451 - 451 - 451 582

Marina Urola, S.A. 39.17 39.17 78.34 503 - 193 (174) - 522 - 522 - 522 470

Metro Ligero Oeste, S.A. - 51.00 51.00 37,064 - 79,974 (19,752) - 97,286 (13,949) 83,337 - 83,337 63,079

Morkaitz, S.A. - 100.00 100.00 463 - 184 (89) - 558 - 558 - 558 608

Obras y Servicios Hispania-Gas, S.A. - 100.00 100.00 60 - 1,481 415 - 1,956 - 1,956 - 1,956 174

Obrascón Huarte Lain, Construcción Internacional, S.L. 100.00 - 100.00 41,330 - 77,625 1,352 - 120,307 - 120,307 - 120,307 119,114

Obrascon Huarte Lain, Desarrollos, S.L. 100.00 - 100.00 53,920 - 61,545 (286) - 115,179 - 115,179 - 115,179 115,434

OHL Andina, S.A. 99.00 1.00 100.00 2,632 - 14,689 2,439 - 19,760 - 19,760 - 19,760 3,246

OHL Austral, S.A. - 100.00 100.00 11,700 - 3,106 3,598 - 18,404 - 18,404 - 18,404 4,549

OHL Brasil, S.A. - 60.00 60.00 170,575 - 69,329 68,047 (26,312) 281,639 - 281,639 - 281,639 96,525

OHL Central Europe, a.s. - 100.00 100.00 18,641 - 143 1,529 - 20,313 - 20,313 - 20,313 17,391

OHL Concesiones Argentina, S.A. 5.00 95.00 100.00 4,479 (845) (7) 102 - 3,729 - 3,729 - 3,729 3,534

OHL Concesiones Chile, S.A. 0.00 100.00 100.00 15,743 - (7,311) 481 - 8,913 - 8,913 - 8,913 17,328

OHL Concesiones Mexico, S.A. de C.V. 0.00 100.00 100.00 305,663 (50,484) 8,244 2,364 - 265,787 - 265,787 - 265,787 344,028

OHL Concesiones, S.L. 100.00 - 100.00 162,860 - 424,220 31,682 - 618,762 - 618,762 - 618,762 586,294

OHL Construction Canada, Inc. - 100.00 100.00 - - - (56) - (56) - (56) - (56) -

OHL Desarrollos México, S.A. de C.V. 0.00 100.00 100.00 92,701 - - (26,073) - 66,628 - 66,628 - 66,628 108,962

OHL Finance, S.á.r.l. 100.00 - 100.00 13 - 612 (41) - 584 - 584 - 584 13

OHL Industrial, S.L. 100.00 - 100.00 8,518 - 17,026 (559) - 24,985 - 24,985 - 24,985 25,554

OHL Infrastructure Central Europe, s.r.o. - 100.00 100.00 83 - - (82) - 1 - 1 - 1 83

188


APPENDIX III (cont.)



Ownership interest Thousands of euros

COMPANY Direct Indirect TotalShare Capital

Capital payments

outstandignReserves

Profit/(Lost) for

2008

Interim dividend

Total shareholder

s’equity


Total equityPar-

ticipating loan

Equity + Participating

loan

Net cost of the invest-

ment

Fully consolidated subsidiariesOHL Infrastructures. Inc - 100.00 100.00 4,610 - (1,650) (3,176) - (216) - (216) - (216) 3,086

OHL Medio Ambiente, Inima Chile Ltda. - 100.00 100.00 25,127 - (155) (7,646) - 17,326 - 17,326 - 17,326 29,108

OHL Medio Ambiente, Inima, S.A.U. 100.00 - 100.00 141,682 - (3,794) 334 - 138,222 - 138,222 - 138,222 147,923

OHL Meio Ambiente Inima Brasil Ltda. - 100.00 100.00 11,025 - - 138 - 11,163 - 11,163 - 11,163 16,978

OHL Mexico SC, S.A. de C.V. - 100.00 100.00 55 - (74) 86 - 67 - 67 - 67 56

OHL Toluca, S.A. de C.V. - 66.67 66.67 57,897 - (68) (128) - 57,701 - 57,701 - 57,701 38,598

OHL USA, Inc. - 100.00 100.00 5,389 - 27,188 (4,206) - 28,371 - 28,371 - 28,371 32,914

OHL ZS, a.s. - 88.00 88.00 18,101 - 37,803 7,066 - 62,970 - 62,970 - 62,970 16,364

Operadora Concesionaria Mexiquense, S.A. de C.V. - 100.00 100.00 3 - 1 1,774 - 1,778 - 1,778 - 1,778 3

Organización de Proyectos de Infraestructura, S. de R.L. de C.V. - 100.00 100.00 129,488 - - - - 129,488 - 129,488 - 129,488 129,488

Oshsa-Levante, A.I.E. - 55.00 55.00 6 - - - - 6 - 6 - 6 4

Pachira, S.L. - 100.00 100.00 4 - 175 31,013 192 - 192 - 192 -

PACSA, Servicios Urbanos y del Medio Natural, S.L. 100.00 - 100.00 5,606 - 1,611 (131) - 7,086 - 7,086 - 7,086 5,606

Participes en Brasil, S.L. - 100.00 100.00 41,084 - 68,251 8,345 - 117,680 - 117,680 - 117,680 98,950

Paulista Infraestructura, Ltda. - 60.00 60.00 155 - 6,391 5,322 (6,403) 5,465 - 5,465 - 5,465 93

Posmar Inversiones 2008, S.L. 100.00 - 100.00 3 - (1) - - 2 - 2 - 2 3

Promoaqua Desalación de los Cabos, S.A. de C.V. - 92.00 92.00 5,263 (48) (541) (218) - 4,456 - 4,456 - 4,456 6,941

Proyectos y Sistemas, S.A. - 100.00 100.00 240 - 39 337 - 616 - 616 - 616 5,250

Rentia Invest, a.s. - 100.00 100.00 2,999 - 9,988 2,622 - 15,609 - 15,609 - 15,609 16,540

S.A. Trabajos y Obras 100.00 - 100.00 1,854 - 16,964 42,315 (41,995) 19,138 - 19,138 - 19,138 43,347

Sacova Centros Residenciales, S.L. - 100.00 100.00 20,044 - (10,930) (2,118) - 6,996 (883) 6,113 7,000 13,113 16,191

Satafi S.A. 99.99 0.01 100.00 750 - 1,108 7 - 1,865 - 1,865 - 1,865 1,858

Sawgrass Rock Quarry Inc. - 80.00 80.00 1 - 1,036 492 - 1,529 - 1,529 - 1,529 6,611

Seconmex Administración, S.A. de C.V. - 87.20 87.20 3 - 235 110 - 348 - 348 - 348 12

SESAMM - Serviços de Saneamento de Mogi Mirim, S.A. - 57.00 57.00 3,315 - - - - 3,315 - 3,315 - 3,315 2,529

Sociedad Concesionaria Autopista del Sol, S.A. - 75.03 75.03 15,066 - (7,799) (3,451) (1,669) 2,147 - 2,147 - 2,147 9,899

Sociedad Concesionaria Autopista Los Andes, S.A. 0.00 100.00 100.00 33,187 - 24,663 (555) - 57,295 (24,663) 32,632 - 32,632 37,457

Sociedad Concesionaria Autopista Los Libertadores, S.A. - 75.02 75.02 13,309 - (5,057) (5,571) (1,552) 1,129 - 1,129 - 1,129 9,922

Sociedad Concesionaria Centro de Justicia de Santiago, S.A. 100.00 - 100.00 9,387 - 2,379 1,467 - 13,233 - 13,233 - 13,233 9,387

Sociedad de Servicios Paseo de San Francisco, S.A. de C.V. - 100.00 100.00 3 - - (10) - (7) - (7) - (7) 3

Sociedad Vehículo CA, S.L. - 100.00 100.00 66,573 - 7,231 3,767 - 77,571 (1,407) 76,164 - 76,164 66,264

SPR - Sociedade para Participaçao em Rodovias, S.A. - 60.00 60.00 75,309 - (2,264) 4,056 - 77,101 - 77,101 - 77,101 45,185

Técnicas y Gestión Medioambiental, S.A. - 100.00 100.00 932 - 498 3,069 - 4,499 - 4,499 - 4,499 3,562

Tenedora de Participaciones Tecnológicas, S.A. 100.00 - 100.00 601 - (232) (4,576) - (4,207) (27,276) (31,483) 160 (31,323) 369

The Tower Group - 100.00 100.00 1 - 20,949 (7,636) - 13,314 - 13,314 - 13,314 24,432

Trabajos de Carpintería Especializados, S.L. - 100.00 100.00 148 - (238) (499) - (589) - (589) 300 (289) 300

Tractament Metropolità de Fangs, S.L. - 50.40 50.40 8,540 - 5,121 209 - 13,870 (620) 13,250 - 13,250 4,304

Urbanizadora Hispano Belga, S.A. 100.00 - 100.00 1,211 - (4,108) (34) - (2,931) - (2,931) 710 (2,221) 710

Vianorte, S.A. - 60.00 60.00 35,306 (1,898) 5,025 6,067 (3,336) 41,164 - 41,164 - 41,164 38,324

Viaducto Bicentenario, S.A. de C.V. - 100.00 100.00 70,161 (13,525) - - - 56,636 - 56,636 - 56,636 56,636

Villas de Mayakoba, S.A. de C.V. - 72.50 72.50 2,573 (57) (15) 53 - 2,554 - 2,554 - 2,554 2,135

Vincida Grupo de Inversiones 2006, S.L. 25.00 75.00 100.00 3 - (2) (2) - (1) - (1) - (1) 3

Viveros de Mayakoba, S.A. de C.V. - 100.00 100.00 187 - 27 146 - 360 - 360 - 360 250

ZPSV Caña, a.s. - 53.01 53.01 3,479 - 2,347 117 - 5,943 - 5,943 - 5,943 1,785

ZPSV Eood, a.s. - 89.94 89.94 3 - (1,013) 47 - (963) - (963) - (963) -

ZPSV, a.s. 1.32 88.62 89.94 22,188 - 16,944 11,340 - 50,472 - 50,472 - 50,472 42,810

ZS Bratislava, a.s. - 68.34 68.34 5,231 - 3,781 1,022 - 10,034 - 10,034 - 10,034 3,911

TOTAL 2,687,037 (213,150) 1,487,721 158,120 (185,379) 3,934,349 (130,745) 3,803,604 54,088 3,857,692 3,739 ,466

Proportionately consolidated companies

Asfaltos Elsan-Pacsa Torrescámara, A.I.E. - 50.00 50.00 12 - - - - 12 - 12 - 12 6

Inalia Water Solutions, S.L. - 50.00 50.00 3 - (76) 64 - (9) - (9) - (9) 2

Inalia Mostaganem, S.L. - 50.00 50.00 3 - (2) (2) - (1) - (1) - (1) 2

Inoxosha Gas, A.I.E. - 50.00 50.00 6 - - - - 6 - 6 - 6 3

Nova Dársena Esportiva de Bara, S.A. - 50.00 50.00 3,731 - (17) (370) - 3,344 - 3,344 - 3,344 1,866

Terminal Polivalente Sureste, S.L. - 50.00 50.00 48 - (7) (3) - 38 - 38 - 38 24

Terminales Marítimas del Sureste, S.A. - 50.00 50.00 15,000 - (228) (2,767) - 12,005 (2,270) 9,735 - 9,735 7,500

TOTAL 18,803 (330) (3,078) 15,395 (2,270) 13,125 13,125 9,403

Companies accounted for using the equity method

Administradora Mexiquense del Aeropuerto

Internacional de Toluca, S.A. de C.V.- 32.67 32.67 63,157 - 59,092 7,919 - 130,168 - 130,168 - 130,168 50,947

Avalora Tecnologías de la Información, S.A. - 45.00 45.00 455 - 942 1,229 - 2,626 - 2,626 - 2,626 434

Cádiz San Fernando, A.I.E. - 21.95 21.95 4,658 - - 565 - 5,223 - 5,223 - 5,223 1,015

Concesionaria Colegio de Usera, S.L. 10.00 - 10.00 - - - - - - - - - -

Concessió Estacions Aeroport L 9, S.A. 36.00 - 36.00 1,043 - - - - 1,043 - 1,043 - 12,809 12,141

E.M.V. Alcalá de Henares, S.A. 34.00 - 34.00 1,202 - 4,763 (74) - 5,891 - 5,891 - 5,891 409

Hospital del Sureste, S.A. 33.33 - 33.33 6,567 - (893) (1,261) - 4,413 - 4,413 1,473 5,886 3,662

Lotes 3 Servicios, S.A. de C.V. - 48.00 48.00 3 - - 44 - 47 - 47 - 47 1

Mayakoba Thai, S.A. de C.V. - 48.00 48.00 21,382 - - - - 21,382 (3,392) 17,990 - 17,990 10,264

Nautic Tarragona S.A. 25.00 - 25.00 1,202 - 336 - - 1,538 - 1,538 - 1,538 301

Nova Bocana Barcelona, S.A. 25.00 - 25.00 44,178 (15,336) - - - 28,842 (4,120) 24,722 - 24,722 7,211

Nova Bocana Bussiness, S.A. 25.00 - 25.00 16,340 (12,256) (114) - - 3,970 - 3,970 - 3,970 1,021

Nuevo Hospital de Burgos, S.A. 20.00 - 20.00 36,428 (24,025) (587) (451) - 11,365 (9,970) 1,395 - 1,395 2,481

Operadora Mayakoba, S.A. de C.V. - 44.17 44.17 42,257 - (8,058) (193) - 34,006 - 34,006 - 34,006 18,646

Partícipes de Biorreciclaje S.A. - 33.33 33.33 60 - 2,823 1,831 - 4,714 - 4,714 - 4,714 2

Port Torredembarra S.A. 24.08 - 24.08 2,865 - 889 412 - 4,166 - 4,166 - 4,166 691

Shariket Miyeh Ras Djinet, Spa - 25.49 25.49 5,629 (3,632) - - - 1,997 - 1,997 - 1,997 531

Shariket Tahlya Miyah Mostaganem, Spa - 25.50 25.50 26,553 (4,269) - - - 22,284 - 22,284 - 22,284 5,362

Slovenské Tunely, a.s. - 14.96 14.96 66 - 1,013 60 - 1,139 - 1,139 - 1,139 49

Tomi Remont, a.s. - 44.00 44.00 1,842 - 4,376 1,179 - 7,397 - 7,397 - 7,397 715

TSS, a.s. - 43.12 43.12 27,721 - 7,321 3,558 - 38,600 - 38,600 - 38,600 8,228

Urbs Iudex et Causidicus, S.A. 20.00 - 20.00 38,902 - (1,650) (2,032) - 35,220 (35,220) - - - 7,780

Viceroy Resorts Mayakoba, S.R.L. de C.V. 48.00 - 48.00 12,473 - - - - 12,473 - 12,473 - 12,473 8,664

APPENDIX IVDetail of changes in the scope of consolidation at 31 December 2008

189


2008APPENDIX III (cont.)



APPENDIX IVDetail of changes in the scope of consolidation at 31 December 2008

SUBSIDIARIES (fully consolidated) ENTIDADES DEPENDIENTES (que consolidan por integración global)

INCLUSIONS SALIDAS

COMPANY REASON SOCIEDAD CONCEPTO

Arellano Construction Co. Purchase Fernando Murga Ingeniería, S.A. Fusión Atmos Española, S.A. Purchase José Malvar Construcciones, S.A. Fusión Autopista Fluminense, S.A. Incorporation Strunbet, a.s. LiquidaciónAutopista Litoral Sul, S.A. Incorporation ZPSV Ruskov, s.r.o. Venta Autopista Planalto Sul, S.A. IncorporationAutopista Régis Bittencourt, S.A. IncorporationAutopistas Fernão Dias, S.A. IncorporationAutovias Concesionadas OHL, S.A. de C.V. IncorporationChemtrol Proyectos y Sistemas, S.L. PurchaseConstructora TP, S.A.C. PurchaseEcolaire España, S.A. PurchaseFernando Murga Ingeniería, S.A. PurchaseFinanciadora de Proyectos de Infraestructura, S. de R.L. de C.V. IncorporationLote 5 Hotel Mayakoba, S.A. de C.V. IncorporationMKH Promatec, S.A. PurchaseOHL Meio Ambiente Inima Brasil Ltda. PurchaseOHL Construction Canada, Inc. IncorporationOHL Desarrollos Mexico, S.A. de C.V. IncorporationOHL Industrial, S.L. IncorporationOHL Infrastructure Central Europe, s.r.o. IncorporationOHL Pozemné stavby, a.s. IncorporationOrganización de Proyectos de Infraestructura, S. de R.L. de C.V. IncorporationPosmar Inversiones 2008, S.L. PurchaseProyectos y Sistemas, S.A. PurchaseSESAMM - Serviços de Saneamiento de Mogi Mirim, S.A. IncorporationSociedad de Servicios Paseo de San Francisco, S.A. de C.V. IncorporationStride Contractors, Inc. PurchaseViaducto Bicentenario, S.A. de C.V. Incorporation

JOINT VENTURES (proportionately consolidated) NEGOCIOS CONJUNTOS (que consolidan por integración proporcional)

INCLUSIONS INCORPORACIONESCOMPANY REASON SOCIEDAD CONCEPTO

Constructora e Inmobiliaria Xalitic, S.A. de C.V. Venta Inmobiliaria Fumisa, S.A. de C.V. Venta Prestadora de Servicios Fumisa, S.A. de C.V. Venta Transportes Aéreos de Xalapa, S.A. de C.V. Venta

ASSOCIATES (accounted for using the equity method) ENTIDADES ASOCIADAS (que consolidan por el método de la participación)

INCLUSIONS SALIDAS

COMPANY REASON SOCIEDAD CONCEPTO

Clean-Cenit, A.I.E. Incorporation Consulnima, S.L. Venta Concessió Estacions Aeroport L 9, S.A. Incorporation KPM Consult, a.s. Venta Comaco-Asmaco, A.I.E. Incorporation Parking CZ, a.s. Venta Lotes 3 Servicios, S.A. de C.V. Incorporation Sociedade Concessionaria da Marina do Parque das Naçoes, S.A. Venta Nova Bocana Bussiness, S.A. IncorporationProyecto Cenit-Oasis, A.I.E. IncorporationSociedad Estatal de Estiba y Desestiba del Puerto de Alicante, A.P.I.E. Purchase

190


APPENDIX IV (cont.)

Detail of changes in the scope of consolidation at 31 December 2008

SUBSIDIARIES (fully consolidated)

EXCLUSIONS

COMPANY REASON

Fernando Murga Ingeniería, S.A. MergerJosé Malvar Construcciones, S.A. MergerStrunbet, a.s. LiquidationZPSV Ruskov, s.r.o. Sale

JOINT VENTURES (proportionately consolidated)

EXCLUSIONS COMPANY REASON

Constructora e Inmobiliaria Xalitic, S.A. de C.V. Sale

Inmobiliaria Fumisa, S.A. de C.V. Sale

Prestadora de Servicios Fumisa, S.A. de C.V. Sale

Transportes Aéreos de Xalapa, S.A. de C.V. Sale

ASSOCIATES (accounted for using the equity method)

EXCLUSIONS

COMPANY REASON

Consulnima, S.L. SaleKPM Consult, a.s. SaleParking CZ, a.s. SaleSociedade Concessionaria da Marina do Parque das Naçoes, S.A. Sale

191

Management Report

2008

Management Report

192


Translation of a report originally issued in Spanish. In the event of a discrepancy, the Spanish-language version prevails

1. Economic overview

In the last quarter of 2008 there was a significant downturn in the world economy, affected by the acute financial

and liquidity crisis, and this began to show signs in emerging economies, which had remained relatively immune

to the crisis. The slowdown in world demand and the falling raw material prices, particularly tumbling oil prices,

reduced inflationary pressure considerably. Although the policies of the central banks might have prevented

the worst case scenario of a total collapse of the system, they were insufficient in view of the weakness of the

economy. After three years of world growth at approximately 5.0%, the World Bank has forecasted growth at

3.6% for 2008 and 1.9% for 2009.

The governments of the main world economies reacted to this severe widespread crisis with a series of urgent

measures lending financial and fiscal support, increasing the central banks’ mechanisms to provide liquidity

and reducing intervention rates on an unprecedented scale. European Central Bank interest rates ended the

year at 2.5% with further falls in January (to 2.0%) and March (to 1.5%).

The Spanish economy, hit by two crises (the world financial crisis and the Spanish real estate crisis), was

affected by two consecutive declines in the third and final quarter of 2008. Consequently, it is considered to

have technically entered a recession given the negative contribution of national demand, offset only in part by

the positive contribution from foreign trade. Year-on-year, GDP fell 0.7% in the final quarter although average

growth in the year taken as a whole stood at 1.2%.

Construction activity, which was hit hard by the real estate crisis and the subsequent decline in residential

building construction, continued to lose steam in the last quarter of 2008. According to the latest estimates by

Seopan (Spanish Constructors’ Association), the construction industry, with production of EUR 193,000 million,

saw a decrease of 5.1% in real terms with respect to 2007 and suffered the sharpest fall of all the industries in

the Spanish economy.

Public tenders, by date of issue in the Spanish Official State Gazette, ended the year at EUR 40,000 million,

a similar figure to that of 2007 (excluding the first generation motorways in 2007). Noteworthy was the sound

performance of the Spanish State-owned Land Transport Infrastructure Company (SEITT), up 110%.

Despite the reduction in interest rates, residential demand is not expected to recover in the short term or indeed

until house prices have been adjusted to the economic and financial capabilities of potential demand, which

would enable for-sale-housing inventories to be absorbed over time.

The government announced for 2009, as a measure to kick start the economy, the most extensive public works

investment programme in the history of Spain totalling EUR 33,000 million in infrastructure projects, of which

more than 55% will be used for transport infrastructure. In addition, the State Budget already included a year-

on-year 6% increase in investment from the Ministry of Public Works and its publicly-owned companies.

193

Management Report

2008

2. Business Performance

Results

2008 was characterised by the intensifying and broadening global economic crisis, one of the most serious

economic crises in history. Against such a formidable backdrop, the OHL Group obtained highly satisfactory

results and achieved the following growth:

• Sales: 6.5%

• EBITDA: 11.9%

• EBIT: 13.1%

• Net attributable profit: 7.3%

This was made possible due to the Group’s successful strategy in place and in use since 2002 (with a view to

growth following the completion of the merger period), which entails the following:

• No presence in real estate activities.

• Reduction of residential building construction to a minimum.

• On-going diversification in construction-related activities.

• Internationalisation, always in accordance with principles of prudence.

• A sustained sound and conservative financial structure.

Accordingly, the Group was able to obtain sound results due to the noteworthy contribution from the

International Construction line of business (with sales, EBITDA and EBIT growth of over 20%) and the diversifica-

tion activities: Concessions (the most significant due to its relative weight, accounting for 55.9% of the Group’s

Main aggregates of the Obrascón Huarte Lain Group

Millions of euros

2008 % 2007 % % Change

Revenue 4,008.8 100.0 3,764.4 100.0 6.5

EBITDA 607.6 15.2 542.9 14.4 11.9

EBIT 422.7 10.5 373.7 9.9 13.1

Profit before tax 267.0 6.7 230.8 6.1 15.7

Profit attributable to the Parent 150.7 3.8 140.5 3.7 7.3

Short-term backlog 6,023.6 5,302.2 13.6

Long-term backlog 53,044.6 32,756.0 61.9

Total backlog 56,068.2 38,058.2 55.2

Property, plant and equipment, net 3,683.9 3,337.1 10.4

Equity attributable to the Parent 422.4 608.4 -30.6

Gross with-recourse borrowings 1,138.4 948.2 20.1

Net with-recourse borrowings 716.6 330.0 117.2

Gross non-recourse borrowings 2,382.2 2,143.7 11.1

Net non-recourse borrowings 2,038.8 1,930.4 5.6

194


EBITDA), Environment and Development. Despite the adverse situation arising from the fall in sales,

Domestic Construction achieved satisfactory results in terms of EBITDA and EBIT, which grew by 2.4% and

9.4%, respectively.

The considerable increase in the Group’s total backlog, up 55.2% in 2008 (an increase of 13.6% in the short-term

backlog and 61.9% in the long-term backlog), guarantees ongoing future growth that will continue to be based

on International Construction and Concessions, the backlog for which grew 70.9% and 66.6%, respectively.

Lastly, in accordance with the financial principles of prudence established, the Group ended the year with a

sound liquidity and indebtedness position, which translates as:

- Net with-recourse borrowings equivalent to 2.68 times with-recourse EBITDA.

- More than EUR 600 million available credit facilities.

- Cash and current financial assets of EUR 765.1 million.

- Well diversified financing sources, including EUR 600 million from the issue of bonds on the Euromarket,

maturing in May 2012, and EUR 303.2 million from a syndicated loan, also on the Euromarket, the final

maturity of which is in January 2011.

Contracts

The Group’s short-term contracts stood at EUR 4,646.5 million at the end of 2008.

Millions of euros

2008 %

Domestic Construction 1,497.7 32.2

International Construction 2,522.5 54.3

Industrial 29.2 0.6

Concessions 542.4 11.7

Environment - -

Development 54.7 1.2

Total 4,646.5 100.0

The contribution of International Construction is particularly noteworthy, accounting for 54.3% of total contracts,

an increase of 120.2% with respect to 2007.

Backlog

The total backlog amounted to EUR 59,068.2 million, up 55.2% on 2007.

10.2% of the total backlog related to short-term projects with long-term projects accounting for the other

89.8%.

195

Management Report

2008

Millions of euros

2008 % % Change 08/07

Short-term backlog 6,023.6 10.2 13.6

Long-term backlog 53,044.6 89.8 61.9

Total backlog 59,068.2 100.0 55.2

Domestic Construction 3,220.6 5.5 -8.2

International Construction 2,716.5 4.6 70.9

Industrial 12.2 - n.a.

Concessions 50,425.4 85.4 66.6

Environment 2,677.5 4.5 1.3

Development 16.0 - -71.4

Total backlog 59,068.2 100.0 55.2

The short-term backlog stood at EUR 6,023.6 million, an increase of 13.6% with respect to 2007, and covers a

business period of 18 months. Domestic Construction accounted for 53.2% of this backlog while International

Construction represented 43.3%.

The long-term backlog totalled EUR 53,044.6 million, up 61.9% due to the new concessions obtained, particularly

the five federal motorways in Brazil.

87.0% of the long-term backlog relates to the market abroad and the remaining 13.0% to the Spanish market.

Infrastructure concession contracts account for 95.1% of the total amount with a 66.6% rise in motorway

concessions, due mainly to the inclusion of the five federal motorways in Brazil.

Analysis by business line


Millions of euross

2008 % 2007 % % Change

Revenue 1,786.4 100.0 1,973.9 100.0 - 9.5

EBITDA 120.8 6.8 118.0 6.0 2.4

EBIT 101.7 5.7 93.0 4.7 9.4

Total backlog 3,220.6 3,508.3 -8.2

Domestic Construction sales fell 9.5% in 2008 with respect to 2007 due to the downturn in the Spanish economy

and the concomitant deceleration of project execution and tenders, particularly in the first half of 2008, which

was also affected by the general elections held in March.

196


However, the significant concentration of this line of business on large civil engineering works and non-

residential building construction projects meant that its EBITDA and EBIT grew 2.4% and 9.4% with respect to

2007, despite the fall in sales.

The Group will continue to implement the strategy announced in 2002, consisting of reducing residential

building construction activity to a minimum and the on-going concentration on civil works and non-residential

building construction. This strategy, together with the committed drive announced by the government to invest

in infrastructures - a necessary measure to kick start the Spanish economy – should enable the Group to sustain

the level of activity in future years.


Millions of euros

2008 % 2007 % % Change

Revenue 1,429.1 100.0 1,162.2 100.0 23.0

EBITDA 111.1 7.5 86.9 7.5 27.8

EBIT 76.8 5.4 57.4 4.9 33.8

Total backlog 2,716.5 1,589.6 70.9

Despite the complicated macroeconomic scenario, International Construction achieved excellent results in

2008, leading to the following year-on-year increases:

• Sales: 23.0%

• EBITDA: 27.8%

• EBIT: 33.8%

These results were possible due largely to the positive performance of the Czech subsidiaries, whose billings

increased by 30.2% in 2008, the start up of significant contracts awarded in that year (Hospital de Sidra in

Doha, Qatar, and the Orán conference centre in Algeria) and the inclusion of new American companies Arellano

Construction and Stride Constructors, specialised in hospital building construction.

However, most significant was the substantial growth in the short-term backlog (construction) at the end of

2008, up 81.1% to EUR 2,609.1 million, thereby guaranteeing continued growth in this activity in the future.

Also noteworthy was the sound geographical diversification of this backlog, the detail of which is as follows:

• Qatar: 32%

• Algeria: 23%

• Central and Eastern Europe: 21%

• US: 13%

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Management Report

2008

• Mexico: 7%

• Chile: 2%

This backlog still does not include the projects due to be carried out for certain of the significant concessions

awarded in 2008 and contracts awarded in the first few months of 2009, some of which are particularly important

such as the Miami underground (Florida, US).

Industrial

Millions of euros

2008 % 2007 % % Change

Revenue 25.5 100.0 - - n.a.

EBITDA 1.6 6.3 - - n.a.

EBIT 1.5 5.9 - - n.a.

Total backlog 12.2 - -

Activity in this area obtained billings of EUR 25.5 million and EBITDA of EUR 1.6 million in 2008.

This line of business, included only recently in the Group (January 2008), consists of the construction and/or

supply of complete industrial plants and is expected to achieve significant growth in the future both in Spain

and abroad.

Concessions

Millions of euros

2008 % 2007 % % Change

Revenue 542.4 100.0 435.5 100.0 24.5

EBITDA 339.9 62.7 317.0 72.8 7.2

EBIT 228.1 42.1 215.9 49.6 5.7

Total backlog 50,425.4 30, 261.2 66.6

Concessions continued to perform well, and increased by the following amounts compared to 2007:

• Sales: 24,5%

• EBITDA: 7,2%

• EBIT: 5,7%

The main factors that influenced sales and EBITDA are as follows:

198


Positive factors:

- The positive evolution of traffic in the majority of our concessions is shown in the table below:

Traffic performance 2008 2007 % Change

Aecsa (1) 214,720 216,067 -0.6%

Autovias (1) 103,786 79,362 30.8%

Centrovias (1) 60,727 56,780 7.0%

Intervias (1) 141,576 136,189 4.0%

Vianorte (1) 79,582 74,523 6.8%

Autopista del Sol (1) 71,201 65,651 8.5%

Autopista Los Libertadores (1) 36,206 34,263 5.7%

Autopista Los Andes (1) 13,768 0 n/a

Euroglosa M-45 (2) (4) 77,303 82,995 -6.9%

Autopista Eje Aeropuerto (1) 10,575 11,356 -6.9%

Metro Ligero Oeste (3) 18,902 13,262 42.5%

Amozoc-Perote (1) 18,911 14,970 26.3%

Concesionaria Mexiquense I (1) 119,673 102,327 17.0%

(1) No. of vehicles (equivalent average paying traffic)(2) No. of vehicles (average daily density)(3) Average daily no. of passengers(4) A drop in traffic does not affect income since the traffic still exceeds the limit set as a collection basis by the Community of Madrid (shadow toll).

- In Autovias, the opening of the Santa Rita Toll Plaza in July 2007 enabled the capture of traffic flows, with a

significant effect on growth in sales with respect to December 2007.

- The entry into service of Metro Ligero Oeste light rail at the end of August 2007 contributed EUR 27.2 million

to sales and EUR 7.5 million to consolidated EBITDA in 2008.

Negative factors:

- The effect of the performance of the Latin American currencies against the Euro compared to December

2007:

Average exchange rate for the period (EUR 1)

2008 2007 Depreciation

Argentine peso 4.66 4.29 8.6%

Chilean peso 766.82 717.92 6.8%

Mexican peso 16.33 15.05 8.5%

Brazilian real 2.66 2.66 -

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- As a result of the sale of the 50% ownership interest in Fumisa (Mexico) on 29 February 2008, it no longer

contributed either sales or EBITDA in 2008. In 2007 the aforementioned company contributed EUR 32.5 million

and EUR 30.8 million, respectively. Nonetheless, this sale gave rise to a gain of EUR 25.3 million.

The detail, by country, of the sales and EBITDA of the main concession operators as a result of the aforementioned

factors and following the effect of the depreciation of various currencies, is as follows:

Millions of euros

COUNTRY CompanyREVENUE EBITDA

2008 2007 % Change 2008 2007 % Change

ARGENTINA 11.3 10.7 5.6% 0.6 2.8 -78.6%

Aecsa 11.3 10.7 5.6% 0.6 2.8 -78.6%

BRAZIL 272.5 232.0 17.5% 204.7 165.5 23.7%

Autovias 68.9 56.4 22.2% 51.3 40.7 26.0%

Centrovias 63.9 52.7 21.3% 48.7 36.8 32.3%

Intervias 77.9 69.2 12.6% 57.6 49.2 17.1%

Vianorte 61.8 53.7 15.1% 47.1 38.8 21.4%

CHILE 51.6 44.5 16.0% 33.4 28.9 15.6%

Autopista del Sol 31.5 29.1 8.2% 19.2 17.3 11.0%

Autopista Los Libertadores 16.6 15.4 7.8% 12.3 11.6 6.0%

Autopista Los Andes 3.5 - n.a. 1.9 - n.a.

SPAIN 43.8 28.4 54.2% 0.8 16.4 -95.1%

Euroglosa M-45 11.1 10.4 6.7% 10.1 9.4 7.4%

Autopista Eje-Aeropuerto 5.5 5.7 -3.5% -16.8 2.2 n.a.

Metro Ligero Oeste 27.2 12.3 121.1% 7.5 4.8 56.3%

MEXICO 79.5 114.5 -30.6% 118.2 122.3 -3.4%

Inmobiliaria Fumisa - 32.5 n/a - 30.8 n.a.

Amozoc-Perote (1) 26.3 32.8 -19.8% 12.1 24.1 -49.8%

Concesionaria Mexiquense I (2) 53.2 49.2 8.1% 106.1 67.4 57.4%

TOTAL CONCESSIONS 458.7 430.1 6.6% 357.7 335.9 6.5%

Head office and others 83.7 5.4 n.a. -17.8 -18.9 -5.8%

TOTAL 542.4 435.5 24.5% 339.9 317.0 7.2%

In addition to the overall positive operational performance of the Group’s concession operators, particularly

noteworthy was the inclusion of the new contracts in Brazil (five federal motorways) and Mexico (Libramiento

Norte Northern Bypass in Puebla and the Bicentenario flyover in Mexico City).

Following these awards, OHL Concesiones currently manages 25 concessions, including 21 toll motorway

concessions totalling 4,044 km, 1 airport, 1 port and 2 rail concessions, thereby consolidating its position as

one of the world’s leading infrastructure concession operators (according to the PWF Newsletter, October 2008,

OHL moved up one place in the world ranking to number 7).

200


It is also important to mention the agreement in principle reached in January 2009 with the Argentine government

following several years of negotiation, which is currently at the implementation stage, whereby the tariffs to be

collected by the concession operator AECSA virtually doubled and, consequently, progress was made towards

restoring the economic and financial equilibrium of the contract.

Also, in 2008 a claim was formally filed to re-establish the economic balance of the Barajas Airport – Direct

Access Motorway (Autopista Eje-Aeropuerto de Barajas) concession (Madrid), for which actual traffic flows have

been considerably lower than those estimated in the tender process. Accordingly, in 2008 property, plant and

equipment were tested for impairment to determine whether they had suffered any losses that might reduce

their recoverable amount. Consequently, an impairment loss of EUR 18 million was recognised for property, plant

and equipment. This impairment loss had an extremely adverse effect on the concession operator’s EBITDA and

was added to prior years’ impairment losses of EUR 30 million. Consequently, property, plant and equipment

were stated at their estimated recoverable value.

At 31 December 2008, the long-term backlog stood at EUR 50,425.4 million, up a considerable 66.6% with respect

to 2007 year-end, due mainly to the inclusion of the five Brazilian federal concessions and the Bicentenario

flyover concession in Mexico City.

Environment

Millions of euros

2008 % 2007 % Change %

Revenue 119.9 100.0 116.8 100.0 2.7

EBITDA 19.3 16.1 13.0 11.1 48.5

EBIT 8.1 6.8 5.4 4.6 50.0

Total backlog 2,677.5 2,643.1 1.3

Environment recorded sales of EUR 119.9 million in 2008, a figure very similar to the one in 2007.

However, EBITDA increased by 48.5% due to the improvement in margins arising on the gradual maturation of

the projects in progress.

Environment ended the year with a short-term backlog equivalent to 18.3 months of sales and a long-term

backlog of EUR 2,494.3 million.

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2008

Development

Millions of euros

2008 % 2007 % % Change

Revenue 105.5 100.0 76.0 100.0 38.8

EBITDA 14.9 10.5 8.0 10.5 86.3

EBIT 6.5 2.6 2.0 2.6 225.0

Total backlog 16.0 56.0 -71.4

As regards Development, sales and EBITDA were up 38.8% and 86.3%, respectively, due to the ongoing

consolidation of the Mayakobá tourist complex, the main project of this line of business.

In 2008 the Fairmont and Rosewood hotels and “El Camaleón” golf course opened at Mayakoba, as did the

Banyan Tree hotel recently in 2009. The fourth hotel, Viceroy, is under construction and the agreements are

being finalised for construction of the fifth and final hotel that will complete the complex.

3. Consolidated income statement

Millions of euros

2008 2007 %Change Amount % Amount %

Revenue 4,008.8 100.0% 3,764.4 100.0% 6.5%

Procurements -2,471.9 -61.7% -2,426.0 -64.4% 1.9%

Staff costs -543.7 -13.6% -456.2 -12.1% 19.2%

Depreciation and amortisation charge -184.9 -4.6% -158.3 -4.2% 16.8%

Other operating items -385.6 -9.6% -350.2 -9.3% 10.1%

PROFIT FROM OPERATIONS 422.7 10.5% 373.7 9.9% 13.1%

Financial loss -203.1 -5.1% -158.7 -4.2% 28.0%

Exchange differences (gains and losses) -20.6 -0.5% 6.9 0.2% -398.6%

Gains/Losses on changes in value of financial instruments at fair value

5.0 0.1% -11.9 -0.3% -142.0%

Results of entities accounted for using the equity method 6.8 0.2% 4.4 0.1% 54.5%

Impairment and gains on disposal of financial instruments 56.2 1.4% 16.4 0.4% 242.7%

PROFIT BEFORE TAX 267.0 6.7% 230.8 6.1% 15.7%

Income tax -84.6 -2.1% -55.4 -1.5% 52.7%

PROFIT AFTER TAX 182.4 4.5% 175.4 4.7% 4.0%

Minority interests -31.7 -0.8% -34.9 -0.9% -9.2%

CONSOLIDATED PROFIT FOR THE YEAR ATTRIBUTABLE TO THE PARENT

150.7 3.8% 140.5 3.7% 7.3%

202


The OHL Group’s revenue for 2008 amounted to EUR 4,008.8 million, up 6.5% on 2007. International Construction

and Concessions mainly contributed to this increase, up 23.0% and 24.5%, respectively, and offset the decrease

in the volume of construction of Domestic Construction (-9.5%). Environment and Development also grew by

2.7% and 38.8%, respectively.

48.6% of total revenue in 2008 was obtained in Spain and the remaining 51.4% came from abroad. International

sales rose by 22.5%, a clear indication of the growing internationalisation of the Group.

EBITDA for 2008 amounted to EUR 607.6 million, accounting for 15.2% of revenue and representing an increase

of 11.9% with respect to 2007. This increase was due mainly to International Construction and Concessions

which, with increases in EBITDA of 27.8% and 7.2%, respectively, represent 74.2% of the Group’s total EBITDA.

Also noteworthy was the 2.4% rise in EBITDA in Domestic Construction despite the decrease of 9.5% in the

volume of construction.

85.6% of the Group’s total EBITDA came from abroad compared with 79.7% in 2007.

EBIT for 2008 amounted to EUR 422.7 million, representing 10.5% of revenue, and was also up 13.1% on

2007. All the lines of business showed growth, particularly International Construction and Concessions, which

represented 72.2% of the Group’s total EBIT.

The financial loss for 2008 amounted to EUR 203.1 million, EUR 44.4 million more than in 2007. This rise was

due basically to the increase in the finance costs of infrastructure concession operators (Metro Ligero Oeste,

Ruta 60, etc.), which came into service in the second half of 2007, and the rise in the Group’s net corporate

borrowings with respect to 2007.

Exchange differences in 2008 amounted to a loss of EUR 20.6 million compared to a gain of EUR 6.9 million in

2007. The average and year-end euro exchange rates for currencies from the main countries in which the OHL

Group operates depreciated sharply by 22.9%, 20.7% and 18.5%, in the case of the year-end exchange rates

for the Brazilian real, Chilean peso and Mexican peso, respectively.

Noteworthy under Gains/Losses on changes in value of financial instruments at fair value is the loss of EUR 18.7

million related to the closing value of the equity swap arranged on 13 November 2007 to hedge the incentive

plan tied to the Group’s share price which expires in three years.

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2008

The following positive results are noteworthy under Impairment and gains on disposal of financial

instruments:

- The gain of EUR 25.3 million on the sale of the 50% ownership interest held by the OHL Group in the Mexican

company Fumisa, which operated the international terminal at Mexico City airport.

- The gain of EUR 36.3 million on the repurchase in the market of bonds issued by Obrascón Huarte Lain, listed

on the London stock exchange for a nominal amount of EUR 100.0 million, at an acquisition price of EUR 63.7

million. In accordance with the terms of the issue, the repurchased obligations were redeemed

Profit before tax stood at EUR 267.0 million, representing 6.7% of revenue and an increase of 15.7% with respect

to 2007.

The consolidated profit attributable to the Parent amounted to EUR 150.7 million, accounting for 3.8 % of revenue

and up 7.3% on 2007.

204


4. Consolidated balance sheet

Millions of euros

2008 2007 Change 08/07

% Change

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 3,683.9 3,337.1 346.8 10.4%

Investment property 67.9 73.6 -5.7 -7.7%

Intangible assets 293.6 247.6 46.0 18.6%

Non-current financial assets 218.2 195.2 23.0 11.8%

Investments accounted for using the equity method 116.2 108.1 8.1 7.5%

Deferred tax assets 484.7 380.2 104.5 27.5%

NON-CURRENT ASSETS 4,864.5 4,341.8 522.7 12.0%

CURRENT ASSETS

Inventories 168.4 117.5 50.9 43.3%

Trade and other receivables 1,810.9 1,770.1 40.8 2.3%

Current financial assets 261.8 183.7 78.1 42.5%

Other current assets 43.9 22.6 21.3 94.2%

Cash and cash equivalents 503.3 647.8 -144.5 -22.3%

CURRENT ASSETS 2,788.3 2,741.7 46.6 1.7%

TOTAL ASSETS 7,652.8 7,083.5 569.3 8.0%

EQUITY AND LIABILITES

EQUITY

Share capital 52.5 52.5 0.0 0.0%

Share premium 254.4 254.4 0.0 0.0%

Reserves 326.4 251.3 75.1 29.9%

Profit for the year attributable to the Parent 150.7 140.5 10.2 7.3%

Valuation adjustments -361.6 -90.3 -271.3 300.4%

Equity attributable to the Parent 422.4 608.4 -186.0 -30.6%

Minority interests 280.6 309.2 -28.6 -9.2%

EQUITY 703.0 917.6 -214.6 -23.4%

NON-CURRENT LIABILITIES

Non-current bank borrowings 3,119.8 2,587.3 532.5 20.6%

Other non-current financial liabilities 194.1 95.7 98.4 102.8%

Deferred tax liabilities 256.7 199.0 57.7 29.0%

Provisions 23.8 19.8 4.0 20.2%

Deferred income 159.6 89.9 69.7 77.5%

Other non-current liabilities 175.5 220.8 -45.3 -20.5%

NON-CURRENT LIABILITIES 3,929.5 3,212.5 717.0 22.3%

CURRENT LIABILITIES

Current bank borrowigs 400.8 504.6 -103.8 -20.6%

Other financial liabilities 15.9 13.2 2.7 20.5%

Trade payables 2,119.1 1,980.3 138.8 7.0%

Provisions 147.5 143.5 4.0 2.8%

Other current liabilities 337.0 311.8 25.2 8.1%

CURRENT LIABILITIES 3,020.3 2,953.4 66.9 2.3%

TOTAL EQUITY AND LIABILITIES 7,652.8 7,083.5 569.3 8.0%

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Management Report

2008

The main observations on the consolidated balance sheet at 31 December 2008 and the changes therein with

respect to 31 December 2007 are as follows:

Property, plant and equipment: amounted to EUR 3,683.9 million, of which 89.2% relate to concession operators.

This heading was up EUR 346.8 million, an increase of 10.4%, due mainly to the net effect of the following:

- Net investments of EUR 394.3 million made by infrastructure concession operators in 2008, including most

notably the five federal motorway concession operators in Brazil, Concesionaria Mexiquense, S.A. de C.V.,

Metro Ligero Pozuelo y Boadilla, S.A. and Cercanías Móstoles Navalcarnero.

- The net investments of EUR 10.5 million made by the Environment concession operators.

- The exclusion of Fumisa, whose registered office is in Mexico, from the scope of consolidation due to the

sale thereof. This company contributed net property, plant and equipment of EUR 60.1 million at 31 December

2007.

Intangible assets: amounted to EUR 293.6 million, up EUR 46.0 million with respect to 31 December 2007. Of

the total balance of this heading, EUR 145.5 million relate to the fees of the infrastructure concession operators,

including most notably in 2008 the inclusion of the fees of the concession operator Viaducto Bicentenario, S.A.

de C.V. in Mexico, amounting to EUR 39.5 million.

Trade and other payables: at 31 December 2008 the balance amounted to EUR 1,810.9 million, which accounted

for 23.7% of total assets. 30.2% of the balance related to amounts to be billed for work performed, and the ratio

stood at 1.6 months of sales, in line with the figure for 2007.

Equity attributable to the Parent: amounted to EUR 422.4 million at 31 December 2008, which represented

5.5% of total assets and was down EUR 186.0 million compared with 31 December 2007, due to the net effect

of the following:

- The profit attributable for 2008, which amounted to EUR 150.7 million.

- Fall of EUR 35.0 million as a result of the dividend paid in July 2008 out of 2007 profit.

- Decrease in reserves:

- of EUR 181.5 million arising in the translation of the financial statements in foreign currency. This

considerable impact arose from depreciation of the currencies of the above-mentioned main countries

in which the Group operates, the majority of which occurred in the last two years.

- of EUR 89.9 million due to the effect of the measurement of financial instruments.

- of EUR 24.0 million related to the increase in treasury shares in 2008.

- of EUR 6.3 million due to other changes in reserves.

206


Treasury shares included under this heading amounted to EUR 35.0 million and totalled 2,980,262 treasury

shares at 31 December 2008.

Minority interests: stood at EUR 280.6 million and dropped by EUR 28.6 million as a result of the net effect of:

- 2008 profit attributable to minority interests amounting to EUR 31.7 million.

- Decrease of EUR 43.3 million arising on the translation of the financial statements in foreign currency attributable

to minority interests.

- Drop of EUR 13.6 million due to the effect of the measurement of financial instruments.

- Other decreases of EUR 3.4 million arising from changes in ownership interests and other items.

Bank borrowings

The detail of bank borrowings at 31 December 2008 compared with 31 December 2007 is as follows:

Millions of euros

2008 % 2007 % % change

With recourse borrowings

Gross with recourse borrowings 1,138.4 32.3 948.2 30.7 20.1

Current financial assets + Cash and cash equivalents 421.8 618.2 -31.8

Net with recourse borrowings 716.6 26.0 330.0 14.6 117.2

Net with recourse borrowings/equity 101.9% 36.0%

Non-recourse borrowings

Gross non-recourse borrowings 2,382.2 67.7 2,143.7 69.3 11.1

Current financial assets + Cash and cash equivalents 343.4 213.3 61.0

Net non-recourse borrowings 2,038.8 74.0 1,930.4 85.4 5.6

Net non-recourse borrowings/equity 290.0% 210.4%

Total borrowings

Total gross borrowings 3,520.6 100.0 3,091.9 100.0 13.9

Total net borrowings 2,755.4 100.0 2,260.4 100.0 21.9

Net with recourse borrowings were up EUR 386.6 million in 2008 due mainly to the investments made in that

year.

Gross non-recourse borrowings accounted for 67.7% of total borrowings, up 11.1% compared with 31 December

2007, due to the need to finance the investments made mainly by concession operators, including most notably

Metro Ligero Oeste Pozuelo, Concesionaria Mexiquense and Autopista Los Andes. Fumisa, which contributed EUR

67.0 million in gross non-recourse borrowings at 31 December 2007 was excluded due to the sale thereof.

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Management Report

2008

Net non-recourse borrowings accounted for 74.0% of the total and increased by 5.6% with respect to the figure

recognised at 31 December 2007.

88.6% of the total gross borrowings is at long term and the remaining 11.4% at short term.

5. Stock exchange information

Share capital and shares

At 31 December 2008, the share capital of the Parent, Obrascón Huarte Lain, S.A., amounted to EUR 52,495,233,

represented by 87,492,055 ordinary shares of EUR 0.60 par value each with a market price of EUR 9.96 at 31

December 2008 and a PER for 2008 of 5.8.

Stock exchange

The crisis sparked by the real estate industry and its effect on the financial markets stemming from the sub-

prime mortgages continued to blight all types of financial assets and gave rise to a liquidity crisis and a lack

of confidence among economic players that has cast doubt on the current capitalist system. Governments

and institutions of the main states and economic areas worldwide reacted with measures and plans aimed at

rescuing the financial system and the economy itself.

The adverse effects of the financial crisis on world economic activity, and particularly listed companies,

reverberated throughout world stock markets. Stock market prices crashed across the board which went hand

in hand with a rise in volatility, which was at its highest level in twenty years.

Following five consecutive years of profit, Spain’s main stock exchange index, the Ibex 35, fell 39.43% in 2008,

an all-time yearly low. The industries hardest hit were real estate, construction companies and banks, with an

average loss in 2008 of 50% of their market value.

After reaching a maximum price of EUR 28.98 in May (up 25.83% on the 2007 closing price), the OHL Group’s

shares ended 2008 with a market price of EUR 9.96, down 56.75% on 2007. A total of 124,261,103 shares were

traded in 2008 (142.0% of the total amount listed), with an average of 489,216 shares traded daily.

On 9 April 2008, the Company entered the new FTSE4Good Ibex sustainability index and became one of the twenty

seven securities in the select group of listed companies that founded the sector for responsible investment on

the Spanish stock exchange. The FTSE4Good Ibex is the first index for socially responsible investments on the

Spanish market and is specifically designed to be used to create financial products such as exchange-traded

funds (ETFs). Inclusion in this index evidences the Group’s compliance with the strict FTSE4Good criteria for

ethical, social and environmental responsibility, thus enabling it to consolidate itself as a Group with socially

responsible business practices and to qualify investment in OHL as responsible and sustainable.

208


At its meeting held on 10 June 2008, the Technical Advisory Committee for the Ibex indices decided, in accordance

with the technical standards on the composition and calculation of the Ibex indices, to include Obrascón Huarte

Lain, S.A. in the Ibex 35 index, effective from 1 July. At the end of 2008, this index had accumulated a decline

in value of 39.4% with respect to 2007.

On 10 October 2008, in accordance with the provisions of Regulation (EC) 2273/2203, and the authorisation

granted by the shareholders at their annual general meeting held on 20 May 2008, the Board of Directors agreed

to implement a treasury share repurchase plan, whereby the Company could acquire a maximum number of

4,374,603 shares, equivalent to 5% of the share capital.

This plan established that the shares be purchased at market price under the price and volume conditions

envisaged in Article 5 of Regulation (EC) 2273/2203, in the Company’s Code of Conduct on matters relating to

the Securities Market and within the limits set by the shareholders at the Annual General Meeting of 20 May

2008.

The plan will end either on 30 June 2009 or previously on the date of the Annual General Meeting at which the

Company’s shareholders authorise for issue the financial statements for 2008.

The purpose of this plan is to reduce share capital under a resolution to be adopted by the Company’s shareholders

at the Annual General Meeting, on the terms and conditions established thereat. However, the acquired shares

may also be used to cover the duly approved plans to deliver Company shares and share options.

At 2008 year-end, Obrascón Huarte Lain, S.A., held 2,980,262 treasury shares arising from the liquidity agreement

entered into on 10 July 2007 with Crédit Agricole Cheuvreux, S.A., and from the Repurchase Plan agreed on by

the Board of Directors on 10 October 2008.

As in previous years, the dividend per share was approximately 25%, estimated on the basis of profit for the

year attributable to the Parent.

The Company’s market data at 31 December 2008 were as follows:

- Number of shares of EUR 0.60 par value: EUR 87,492,055

- Market capitalisation: EUR 871,420,868

- Earnings per share: EUR 1.74 euros

- Cash flow per share: EUR 3.88 euros

- PER (market price at 31/12/08 / Earnings per share at 31/12/08: 5.8

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Management Report

2008

Trading and market price in 2008

Month Shares tradedMaximum

priceMinimum

priceAverage price

Closing market price

January 11,904,961 23.34 16.15 19.73 21.22

February 6,186,902 23.44 19.71 21.46 22.22

March 5,166,788 23.71 21.10 22.50 23.50

April 7,567,682 27.34 23.55 25.38 26.00

May 5,293,641 28.98 25.78 27.38 26.25

June 7,296,120 27.49 21.23 24.06 21.59

July 12,347,743 21.78 18.09 19.80 19.14

August 9,578,508 19.96 18.00 18.99 19.31

September 20,834,417 20.20 12.05 14.89 12.53

October 18,779,919 12.75 7.51 9.67 9.80

November 10,003,714 11.11 7.51 9.10 9.03

December 9,300,708 10.39 8.45 9.55 9.96

Historical market data

2008 2007 2006 2005 2004

Closing price 9.96 23.03 23.40 13.48 6.30

Maximum price 28.98 37.80 25.20 13.79 6.90

Minimum price 7.51 22.02 12.45 6.27 5.80

Average price 16.86 29.80 17.24 9.28 6.28

Shares traded 124,261,103 120,363,209 64,257,637 132,319,290 28,217,732

Average effective volume per day (euros)

8,258,882 14,054,122 4,358,222 4,459,305 697,885

Market capitalisation (euros)

871,420,868 2,014,942,027 2,047,314,087 1,207,051,745 564,126,557

Gross dividend per share

0.4306 0.4013 0.3003 0.2857 0.1602

210


30

40

50

60

70

80

90

31-12-07

100

120

110

Maximum, minimum and closing prices in 2008

OHL, Ibex 35 and the construction industry in 2008

23.34 23.44 23.71

27.3428.98

27.49

21.7819.96 20.20

12.7511.11 10.39

16.15

19.7121.10

23.55

25.78

21.23

18.09 18.00

12.05

7.51 7.51 8.45

5

20

25

30

January

FebruaryM arch

April M ayJune July

August

September

October

November

Dicember5

20

25

30

15 15

10 10

January

February

March

September

October

November

December

April

May

June Ju

ly

August

OHL IBEX-35 Construccion Industry

211

Management Report

2008

Effective volume of OHL shares traded in 2008 (millions of euros)

Treasury shares

At 2008 year-end Obrascon Huarte Lain, S.A. held 2,980,262 treasury shares, which represented 3.4% of the

share capital and amounted to EUR 35,005 thousand.

Number of shares Thousands of euros

Balance at 31 December 2007 417,869 11,022

Purchases 6,734,570 114,328

Sales (4,172,177) (90,345)

Balance at 31 December 2008 2,980,262 35,005

The average price of treasury shares at 31 December 2008 stood at EUR 11.75 (EUR 26.38 at 31 December

2007).

6. Development

In 2008 the Company invested EUR 2,418 thousand in development projects and incurred expenditure of EUR

1,766 thousand. Also EUR 8,890 thousand relating to 21 research and development projects were capitalised

to “Other Intangible Assets” in the balance sheet at 31 December 2008.

0

50

100

150

200

250

300

350

235

192

133145

116

182

91

310

182

247

176

Febr

uary

Mar

ch

April

May

June July

Augu

st

Sept

embr

er

Oct

ober

Nove

mbe

r

Dece

mbe

r

Janu

ary

89

212


7. Main Risks and Uncertainties

The Group is exposed to four types of financial risk:

- Interest rate risk arising from possible changes in the cash flows associated with borrowings tied to floating

interest rates.

- Foreign currency risk arising from possible changes in the equivalent euro value of foreign trade transactions

denominated in foreign currency.

- Credit risk arising from the possible non-payment by banks of the amounts to be paid in the future to the

Company in respect of financial instruments arranged.

- Liquidity risk arising from the business activities’ financing needs.

The Group uses derivative financial instruments to mitigate the economic effects that might arise from the

foreign currency and interest risks to which it is exposed due to its business activities.

Financial instruments are arranged with highly solvent banks, thus reducing the credit risk to a minimum.

The liquidity risk is managed by controlling at all times the availability of sufficient cash and financing to cover

the liquidity requirements.

The financial risks which might arise, especially in relation to credit and liquidity, are minimal due to the controls

and policies in place, particularly the policies in relation to debt structure and the diversification of sources of

financing, and to the sound financial position of the OHL Group.

8. Events after the balance sheet date

On 16 March 2009, the credit rating agency Fitch Ratings downgraded the long-term Issuer Default Rating (IDR)

of Obrascón Huarte Lain, S.A. and the unsecured senior debt rating from BBB- to BB+ and the short-term IDR

from F3 to B.

The long-term IDR and the unsecured senior debt rating were put on Rating Watch Negative (RWN) by the

agency.

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9. Outlook

The economy and the industry

The latest revision of the Stability Programme for 2008-2011 presents the following forecasts for the Spanish

economy for the next three years: negative growth of 1.6% in 2009 and positive growth of 1.2% in 2010 and

2.6% in 2011.

Despite the reduction in interest rates, the latest indicators continue to point towards an increase in the decline

in construction activity in the first few months of 2009.

Residential demand is not expected to recover in the short term or indeed until house prices have been adjusted

to the economic and financial capabilities of potential demand, which would enable for-sale-housing inventories

to be absorbed over time.

Non-residential construction will make headway in 2009 through the State Investment Plan in municipal public

works, pushing growth to 1.2% (11.0% in public works and 6.3% in private projects) and offsetting the downturn

in housing construction only in part.

The government announced for 2009, as a measure to kick start the economy, the most extensive public works

investment programme in the history of Spain totalling EUR 33,000 million in infrastructure projects, of which

more than 55% will be used for transport infrastructure. In addition, the State Budget already included a year-

on-year 6% increase in investment from the Ministry of Public Works and its publicly-owned companies.

According to the latest estimates by Seopan, the construction industry could end 2009 with negative growth of

8% to 12%, evidencing the fact that the impact of the financial crisis in Spain has not only affected the housing

market but the entire construction industry.

10. Outlook for the near future

The Group will continue to implement the same strategy in place since 2002 after the merger process, which

enabled it to face the world financial crisis and the Spanish real estate crisis from a position of strength.

Accordingly, the strategy outlined entails the Group’s consolidation of its presence in Domestic Construction

based on civil engineering work. With respect to building construction, it will continue to concentrate on non-

residential building construction and to reduce its presence in residential building construction (housing-unit

construction) to virtually nothing. Sales figures are expected to hold up in the area taken as a whole due to the

ongoing investment in infrastructures acting as leverage to stimulate the Spanish economy and the low exposure

214


to housing-unit construction, which was badly affected by the severe Spanish real estate crisis. It should also

be noted that the Group will continue to refrain from operating in the real estate business in the future.

Internationalisation and diversification, especially in infrastructure concessions, will continue to be the

cornerstones of the Group’s growth in the future.

In terms of internationalisation, it should be noted that the international business accounted for 51% of sales,

80% of EBITDA, 66% of assets and 83% of the Group’s backlog at 2008 year-end.

Specifically, the International Construction line of business, for which yearly growth has exceeded 25% in

the last four years, will continue to display strong grow although at all times in line with the Group’s criteria

of prudence. Accordingly, the billings of this line of business in 2009 are likely to exceed that of Domestic

Construction for the first time.

There has also been a substantial diversification process in recent years although, in accordance with the

strategy announced, in construction-related activities only. The Group will continue to adopt this strategy in

the future, basing its diversification on the infrastructure concession activity, which represented 56% of 2008

consolidated EBITDA thereby becoming the core business. The growth of this line of business in the future

will continue to be based in the same countries in which the Group is present, especially Mexico, Brazil, Chile

and Spain, applying highly selective criteria when investing in new projects that include a return in euros of

over 15% for the shareholder and non-recourse project financing using the same currency in which revenue is

generated.

The smallest lines of business of the Group will also support the related diversification process since they are

expected to gradually increase their relative weight. These lines of business are Environment (desalination

and water purification only), Development (Mayakoba tourist resort) and the new Industrial line of business

(complete turnkey plants).

Of equal importance to the future is the Group’s commitment to the financial security criteria that it applied in

the past, which will enable it to face the world financial crisis with confidence without the need to refinance or

sell significant assets. It will continue to give priority to sustaining conservative indebtedness (net with recourse

borrowings less than three times with recourse EBITDA) and a significant liquidity position, and will also continue

to cover financial requirements on an on-going basis with long-term borrowings.

Lastly, as far as corporate strategy is concerned, the Group will continue to place particular emphasis on boosting

sustainable development policies and fostering R&D&i activities, thereby placing it at the forefront of the design

and organisation of corporate government, complying with all regulations and recommendations at all times and

basing increased productivity and competitiveness on the human resources and applied research policies.

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11. Proposed distribution of profit and dividend

The distribution of the profit for 2008 that Obrascón Huarte Lain, S.A.’s directors will propose for approval by

the shareholders at the Annual General Meeting is as follows:

Thousands of euros

Profit for 2008 55,402

Distribution:

Dividends 37,674

To voluntary reserves 17,728

The directors of Obrascón Huarte Lain, S.A. will propose to the shareholders at the Annual General Meeting the

payment of a total gross dividend of EUR 37,674 thousand with a charge to profit for 2008.

The distribution of profit proposed by the directors does not include any appropriation to the legal reserve,

since the stipulated level had been reached in prior years (see Note C.12).

12. Capital structure, side agreements and restrictions on the transferability of the shares and the voting rights

a) Capital structure

At 31 December 2008, the share capital of the Company amounted to EUR 52,495,233 and was divided into

87,492,055 ordinary shares of the same class of EUR 0.60 par value each, traded by the book entry system. All

the shares confer the same rights on the holders.

b) Restriction on the transferability of the shares and the voting rights

There are no bylaw or restrictions of any other type on the transferability of the shares or the exercise of the

related voting rights.

c) Side agreements

The Parent has not been notified of any side agreements.

13. Significant ownership interests in the share capital

The detail of the holders of significant direct and indirect ownership interests at 2008 year-end is as follows:

216


Name of the shareholder Number of direct voting rights

Number of indirect voting rights

% of total voting rights

Inmobiliaria Espacio, S.A. - 49,008,993 (*) 56.015

Gartmore Investment Management, Ltd. - 4,623,578 (**) 5.285

Fidelitiy Internacional Limited - 1,713,692 (***) 1.959

(*) Through:

Name of the holder of the direct ownership interest Number of direct voting rights


Grupo Villar Mir, S.L. Unipersonal 44,379,747 50.724

Espacio Activos Financieros, S.L. 4,629,246 5.291

(**) Through:



Gartmore Fund Managers, Ltd. 801,925 0.917

Gartmore Investment, Ltd. 3,821,653 4.368

(***) Through:



Fid Fds - European Growth Pool 1,644,600 1.880

Australia - Fund S.A. 56,000 0.064

Fij Global Small Cap T55452 7,000 0.008

Fast Optimised European EQ FD 2,600 0.003

Fid Aus Select G Small Cap Fd 2,600 0.003

Ferp-Industrials Pilot Fund 892 0.001

14. Rules applicable to the nomination and replacement of the members of the managing body and to the amendment of the parent’s bylaws

a) Nomination and replacement of the members of the managing body

The nomination and replacement of the members of the Board of Directors is, in general, regulated by the

applicable articles of the Spanish Companies Law and by Articles 20 and 23 of the bylaws.

Additionally, Articles 16.2-b and 19-24 inclusive of the Board of Directors Regulations provide as follows:

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Management Report

2008

- Any nomination or removal must be preceded by the related report of the Nomination and Remuneration

Committee.

- Positive and negative criteria regarding the adequacy of potential candidates.

- Term of the position.

- Reasons for the early removal of directors.

Articles 24-26 of the General Meeting Regulations also apply to this area and establish, in line with the provisions

of the Board of Directors Regulations, the criteria for the appointment and possible re-appointment of non-

executive directors.

b) Amendment of the Parent’s bylaws

Any amendment to the Parent’s bylaws is regulated by the applicable articles of the Spanish Companies Law

and by Article 17 of the bylaws, which do not establish any quorum or qualified majority other than that provided

for in the Law.

15. Powers of the members of the managing body

The Board of Directors has conferred upon Rafael Martín de Nicolás Cañas all the powers delegable by law except

for the following powers on which the Board of Directors will be informed and take a decision directly:

a) Approval of the general strategy and basic criteria for the organisation of the Company and particularly:

• The strategic or business plan and the annual management and budget targets.

• The investment and financing policy.

• The definition of the Group structure.

• The corporate governance policy.

• The corporate social responsibility policy.

b) The nomination, remuneration and, if applicable, the dismissal of the Company’s most senior executives.

c) Approval of the policy on dividends and treasury shares and particularly the related limits.

218


d) Monitoring of the management and assessment of executives.

e) Identification of the main risks for the Company, particularly the risks arising from derivatives transactions,

and the implementation and monitoring of the internal control and appropriate reporting systems.

f) Establishment of the policy for reporting to and notifying shareholders, the markets and public opinion, paying

particular attention to financial reporting which, as a listed company, it must make public periodically.

g) The creation or acquisition of ownership interests in special-purpose entities or companies domiciled in

countries or territories considered to be tax havens.

h) And, in general, any transactions which involve the disposal of a substantial amount of Company assets,

taken to be those in excess of EUR 60,101,210.44 and large corporate transactions, taken to mean advance

agreements and merger or spin-off projects and the purchase or sale of controlling ownership interests in

companies totalling in excess of EUR 60,101,210.44 per transaction.

16. Significant agreements entered into in the event of a change in control of the parent as a result of a takeover bid

The Parent has not entered into any significant agreements that come into force, become amended or are

terminated in the event of a change in control over the Parent as a result of a takeover bid.

17. Termination benefit agreements between the company and its empoloyees, execute or directors

The Parent has not entered into any agreements with its directors, executives or employees in general that

involve the payment of indemnities other than those provided for by law in the event of unjustified dismissal,

resignation or termination of the employment relationship as a result of a takeover bid.

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18. Annual corporate governance report of listed companies

A. Ownership structure

A.1. Fill out the following table on the Company’s share capital:

Date of last change Share capital (€) Number of shares Number of voting rights

18 September 2006 52,495,233 87,492,055 87,492,055

Indicate if there are different classes of shares that carry different rights:

Yes

No X

Class Number of shares Unit par value Unit number of voting rights

Different rights

1 87,492,055 EUR 0.60 87,492,055 No

A.2. List the direct and indirect holders of significant ownership interests in the Company at year-end, excluding

directors:

Name or company name of shareholder Number of direct voting rights

Number of indirect voting rights (*)

% over total voting rights

Inmobiliaria Espacio, S.A. - 49,008,993 (*) 56,015

Gartmore Investment - 4,623,578 (**) 5.285

Fidelity International Ltd. - 1,713,692 (***) 1.959

(*) Through:

Name or company name of direct holder of ownership interest

Number of direct voting rights % over total voting rights

Grupo Villar Mir, S.L. Unipersonal 44,379,747 50.724

Espacio Activos Financieros, S.L. 4,629,246 5,291

(**) Through:



Gartmore Fund Managers Ltd 801,925 0.917

Gartmore Investment, Ltd 3,821,653 4.368

220




Fid Fds-European Growth Pool 1,644,600 1.880

Australia-Fund S.A. 56,000 0.064

Fij Global Small Cap T55452 7,000 0.008

Fast Optimised European EQ FD 2,600 0.003

Fid Aus Select Gl Small Cap Fd 2,600 0.003

Ferp-Industrials Pilot Fund 892 0.001

Specify the most significant variations in shareholder structure during the year:

Name or company name of shareholder Transaction date Transaction description

- - -

- - -

A.3. Fill out the following tables on the members of the company’s Board of Directors who hold voting rights

over shares in the company:

Name or company name of director Number of direct voting rights

Number of indirect voting rights (*)


Mr. José Luis García-Villalba González 58,115 - 0.066

Mr. Javier López Madrid - 5,000 (*) 0.006

Mr. Rafael Martín de Nicolás Cañas 100 - 0.000

Mr. Luis Solera Gutiérrez - 105,964 (**) 0.121

Mr. Jaime Vega de Seoane y Azpilicueta 12,000 53,990 (***) 0.075

Ms. Silvia Villar-Mir de Fuentes 200 - 0.000

(*) Through:



Financiera Siacapital, S.L. 5,000 0.006

(**) Through:



Bussol, S.A. 105,964 0.121

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(***) Through:



Adaja, S.A. 33,490 0.038

Vevaso, S.A. 20,500 0.023

Total % of voting rights held by the Board of Directors

0.269

Fill out the following tables on the members of the Company’s Board of Directors who hold rights over shares

in the Company:

Name or company name of director

Number of direct options Number of indirect options

Equivalent number of shares


- - - - -

A.4. Indicate, as appropriate, any relationships of a family, commercial, contractual or corporate nature existing

between the holders of significant ownership interests, insofar as they are known to the company, unless they

have scant relevance or arise from the ordinary course of business:

Non-existent.

Related name or company name Type of relationship Brief description

- - -

A.5. Indicate, as appropriate, any relationships of a commercial, contractual or corporate nature existing

between the holders of significant ownership interests and the company and/or its Group, unless they have

scant relevance or arise from the ordinary course of business:

Non-existent.

Related name or company name Type of relationship Brief description

- - -

A.6. Indicate whether the company has been notified of any shareholders agreements that may affect it pursuant

to Article 112 of Spanish Securities Market Law. If so, briefly describe them and specify the shareholders party

to those agreements:

Yes

No X

222


Parties to the shareholders’ agreement % of share capital affected Brief description of agreement

- - -

Indicate whether the company is cognizant of the existence of concerted actions between the shareholders. If

so, briefly describe them:

Yes

No X

Parts of concerted actions % of share capital affected Brief description of agreement

- - -

Expressly indicate any amendment to or termination of such agreements or concerted action during the fiscal

term:

-

A.7. Indicate whether there is any individual or legal entity that exercises, or can exercise, control over the

Company, in accordance with Article 4 of the Securities Market Law If so, describe them briefly:

Yes X

No

Name or company name

Inmobiliaria Espacio, S.A.

Remarks

-

A.8. Fill out the following tables on the company’s treasury shares:

At year-end:

Number of direct shares Number of indirect shares (*) Total % over share capital

2,980,262 -- 3,406

(*) Throug:

Name or company name of direct holder of ownership interest Number of direct shares

- -

Total -

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Management Report

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Give details of any significant variations during the year, in accordance with Royal Decree 1362/2007:

Notification date Total direct purchased shares Total indirect purchased shares Total % over share capital

09-04-2008 883,581 - 1.010

23-06-2008 878,560 - 1.004

22-07-2008 865,984 - 0.990

21-08-2008 893,269 - 1.021

18-09-2008 904,793 - 1.034

13-10-2008 830,912 - 0.950

06-11-2008 900,000 - 1.029

Gains/(Losses) from disposal of treasury shares during the financial year (4,951)

A.9. State the conditions and the term of the authorisation currently in force granted by the General Meeting

to the Board of Directors to carry out acquisitions or transfers of treasury shares.

Pursuant to Article 75.1 of the Companies Law, the Annual General Meeting held, on first call, on 20 May 2008,

resolved to authorise the Company’s Board of Director to acquire treasury shares under any transfer mode

approved by law, directly or through a subsidiary or affiliated company, up to the maximum amount legally

accepted. The authorisation shall be valid for 18 months and the shares may be acquired at a maximum price

of 50 euro per share, with no minimum price limit.

Pursuant to Article 75.1 of the Companies Law, acquired shares may be granted to company employees or

managers according to remuneration or as a result of timely agreed options plans.

A.10. Indicate any legal or bylaw restrictions on the exercise of voting rights and any legal restrictions on the

acquisition or transfer of ownership interests in the share capital.

State if there are any legal restrictions on the exercise of voting rights:

Yes

No X

Maximum percentage of voting rights that can be exercised by a shareholder due to legal restriction

-

224


State if there are any bylaws restrictions on the exercise of voting rights:

Yes

No X

Maximum percentage of voting rights that can be exercised by a shareholder due restriction in the bylaws

-

Description of legal and bylaw restrictions to voting rights -

State if there are any legal restrictions on the acquisition or transfer of equity interests:

Yes

No X

Description of legal restrictions on the acquisition or transfer of equity interests -

A.11. State if the General Meeting has resolved to adopt measures to neutralise a take-over bid pursuant to the

provisions of Law 6/2007.

Yes

No X

If applicable, describe the measures approved and the terms under which the restrictions shall become void:

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Management Report

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B. Management structure of the Company

B.1. Board of Directors

B.1.1. Detail the maximum and minimum number of directors as per the bylaws:

Maximum number of directors 13

Minimum number of directors 7

B.1.2. Fill out the following table with the directors’ particulars:


Representative Board office Date of first appointment

Date of last appoinment

Procedure

Mr. Juan-Miguel Villar Mir Non-executive proprietary director (proxy for Villar Mir Group)

01-08-1987 11-05-2004 Annual General Meeting

Mr. José Luis García-Villalba González

Independent non-executive director



Non-executive proprietary director (proxy for Villar Mir Group)



Executive director 31-03-2004 11-05-2004 Annual General Meeting

Mr. Baltasar Aymerich Corominas



Mr. Tomás García Madrid Non-executive proprietary director (proxy for Villar Mir Group)


Mr. Javier López Madrid Non-executive proprietary director (proxy for Villar Mir Group)


Mr. Juan Luis Mato Rodríguez



SAAREMA Inversiones, S.A. Mr. Joaquín García-Quirós Rodríguez



Mr. Luis Solera Gutiérrez Independent non-executive director



Non-executive director 28-06-1994 11-05-2004 Annual General Meeting




Total numbers of directors 12

226


Indicate any removals of directors during the year:

Name or company name of director Director’s condition upon termination Date of termination

- - -

B.1.3. Fill out the following tables on the members of the Board and their status:

EXECUTIVE DIRECTORS

Name or company name of director Committee proposing appointment Office per Company organisation chart

Mr. Rafael Martín de Nicolás Cañas Appointments and Remuneration Committee

Director General Manager with delegated powers

Total number of executive directors 1

Total % of the Board 8.33

NON-EXECUTIVE PROPRIETARY DIRECTORS

Name or company name of director Committee proposing appointment Name or company name of significant shareholder represented or proposing appointment

Mr. Juan-Miguel Villar Mir Appointments and Remuneration Committee Villar Mir Group

Mr. Baltasar Aymerich Corominas Appointments and Remuneration Committee Villar Mir Group

Mr. Tomás García Madrid Appointments and Remuneration Committee Villar Mir Group

Mr. Javier López Madrid Appointments and Remuneration Committee Villar Mir Group

Mr. Juan Villar-Mir de Fuentes Appointments and Remuneration Committee Villar Mir Group

Ms. Silvia Villar-Mir de Fuentes Appointments and Remuneration Committee Villar Mir Group

Total number of proprietary directors 6


INDEPENDENT NON-EXECUTIVE DIRECTORS

Name or company name of director Profile

Mr. José Luis García-Villalba González PhD/DSc of Roads, Channels and Ports, with a vast experience in the construction and infrastructure concessions sector. He was Vice-Chairman of SEOPAN and ASETA and tenured lecturer on Business Organisation at Madrid Polytechnic University’s Higher Technical School for Road, Channels and Ports Engineers (Escuela Técnica Superior de Ingenieros de Caminos, Canales y Puertos) for 14 years.

Mr. Juan Mato Rodríguez Attorney at Law, renowned businessman and former Chairman of Madrid’s Official Chamber of Commerce and Industry and Chairman of Ifema’s Executive Committee. He is currently Chairman of Beverajes Tripe J, S.L. and member of Caja Madrid Assembly, Sala Retiro y Alternativa, S.L.'s Board of Directors, Madrid’s Economic and Social Council and G.S.S. Comunicaciones Advisory Committee.

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SAAREMA INVERSIONES, S.A., proxy by Mr. Joaquín García-Quirós Rodríguez

Holding company. Mr. García-Quirós is an industrial engineer, who devel-oped part of his professional career at Alcatel and later held responsibility positions at Banco de Crédito Oficial. He was member of Cortefiel’s interna-tional management and Board of Directors, and in the industrial sector he was director of Nicolás Correa, S.A. He is currently Saarema Inversiones, S.A.’s Chief Executive Director.

Mr. Luis Solera Gutiérrez Industrial Engineer, holding responsibility positions in the service, mining, banking and real estate sectors, plus 20 years in the IT and communications sectors. He is currently Honorary Chairman of Tecnocom Telecomunicaciones y Energía, S.A, First Vice-president of Hotel Meliá Castilla and director of Informes y Proyectos, S.A. (INYPSA).

Total number of proprietary directors 4


OTHER NON-EXECUTIVE DIRECTORS

Name or company name of director Committee proposing appointment

Mr. Jaime Vega de Seoane Azpilicueta Appointments and Remuneration Committee

Total number of other non-executive directors 1


Give reasons why these other non-executive directors cannot be considered either proprietary or independent

members and their relations, whether with the company or its officers, or with its shareholders:

Name or company name of director Reasons Company, officer or shareholder with whom relation is maintained

Mr. Jaime Vega de Seoane Azpilicueta Seniority -

Indicate any variations in the status of each director that may have occurred during the year:

No changes.

B.1.4. Describe, if applicable, the reasons why proprietary directors have been appointed at the initiative of

shareholders whose shareholding is less than 5%:

There are no non-executive proprietary directors appointed by shareholders whose shareholding is less

than 5%.

State if formal requests for a presence of the Board have been rejected from shareholders with a shareholding

equal to or greater than that of others who have been successfully appointed proprietary directors. If applicable,

state the reasons for such rejection:

228


Yes

No X

Name or company name of shareholder Reason

- -

B.1.5. State if a director has resigned from his or her directorship before completing the term of office, if such

director has given his or her reasons to the Board and by what means; and, if the reasons have been notified in

writing to the entire Board, describe below at least the reason argued by the director:

Name of director Reason for removal

- -

B.1.6. Indicate what powers, if any, have been delegated to the Chief Executive Officer/s:


Brief description

Mr. Rafael Martín de Nicolás Cañas (Director General Manager)

All of the powers of the Board of Directors, save for those that cannot be delegated pursuant to law and the provisions of Article 5 of the Board Regulations, including: approval of the company’s general strategies; appointment, remuneration and, if applicable, dismissal of Company’s senior executives; approval of matters related to treasury stock policy; control of executives’ management and evaluation; identification of Company’s main risks; determination of policy on information and communication with shareholders, markets and the public opinion; and, in general, transactions involving Company’s substantial assets.

B.1.7. Identify, as appropriate, the Board members who hold office as directors or executives at other companies

forming part of the listed company’s group:

Name or company name of director Company name of Group company Office

Mr. José Luis García-Villalba González OHL Concesiones, S.L. Unipersonal Deputy chairman

Autopista Ezeiza Cañuelas, S.A. Director

Sociedad Concesionaria Autopista Los Andes, S.A.

Member

Concesionaria Mexiquense, S.A de C.V. Member

Mr. Tomás García Madrid OHL Concesiones, S.L. Unipersonal Member

Aeropistas, S.L. Member

Autopista Eje Aeropuerto C.E.S.A. Member

Obrascón Huarte Lain Brasil, S.A. Member

Mr. Javier López Madrid OHL Concesiones, S.L. Unipersonal Member

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Mr. Rafael Martín de Nicolás Cañas Nuevo Hospital de Burgos, S.A. Member

Sociedad Anónima Trabajos y Obras (SATO) Unipersonal

Member

Mr. Juan Villar-Mir de Fuentes OHL Concesiones, S.L. Unipersonal Chairman

B.1.8. Give details, as appropriate, of any directors of the company who are members of the Boards of Directors

of other non-Group companies that are listed on official securities markets in Spain, as disclosed to the

Company:

Name or company name of director Company name of Listed company Office

Mr. Luis Solera Gutiérrez Informes y Proyectos, S.A. Natural person representing director Reverter 17, S.L.

Mr. Jaime Vega de Seoane Axpilicueta Gas Natural SDG, S.A. Director

B.1.9. State and, if applicable, explain if the company has set forth rules on the number of boards on which its

directors may hold seats:

Yes X

No

Explanation of rules

Pursuant to the Company’s Board of Directors Regulations, in general and save exception duly justified by the Appointments and Remuneration Committee, members of more than five boards of directors cannot be proposed as directors.

B.1.10. In relation to recommendation 8 of the Unified Code, state the company general policies and strategies

whose approval is reserved for the full Board:

Yes No

Investment and financing policy X

Definition of the structure of the corporate group X

Corporate governance policy X

Corporate social responsibility policy X

The strategic or business plan, as well as the annual management objectives and budgets

X

Compensation and performance evaluation policy for senior executives X

Risk control and management policy and periodic monitoring of internal reporting and control systems

X

Dividend policy and treasury shares policy and, in particular, limits thereon

X

230


B.1.11. Fill out the following tables on the aggregate remuneration of directors accrued during the year:

a) At the reporting company:

Item Data in thousands of Euros

Fixed remuneration 695

Variable remuneration 516

Attendance fees 234

Bylaw-stipulated directors’ emoluments -

Share options and/or other financial instruments -

Other -

TOTAL: 1,445

Other benefits Data in thousands of Euros

Advances -

Loans granted -

Pension funds and plans: contributions -

Pension funds and plans: obligations -

Life insurance premiums -

Guarantees provided by the Company for directors -

b) Due to membership of the Company’s directors of other boards of directors and/or of the senior management

of Group companies:

Item Data in thousands of Euros

Fixed remuneration -

Variable remuneration -

Attendance fees -

Bylaw-stipulated directors’ emoluments -

Share options and/or other financial instruments -

Other -

TOTAL: -

Other benefits Data in thousands of Euros

Advances -

Loans granted -

Pension funds and plans: contributions -

Pension funds and plans: obligations -

Life insurance premiums -

Guarantees provided by the Company for directors -

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c) Total remuneration by type of director (in thousand of Euros):

Type of director By Company By Group

Executive directors 743 -

Non-executive proprietary directors 366 -

Independent non-executive directors 269 -

Other non-executive directors 67 -

Total 1,445 -

d) With respect to profit attributable to the Parent:

Total directors’ remuneration (thousands of Euros) 1,445

Total directors’ remuneration/ profit attributable to the Parent (expressed as %) 0.95%

B.1.12. Identify the senior executives who are not executive directors, and indicate the total remuneration

accrued for them during the year:

Name or company name Office

Mr. José Antonio Fernández Eléjaga Chief Financial Officer

Mr. Luis García-Linares García Corporate General Manager

Mr. Francisco Marín Andrés General Manager of International Construction

Mr. José Antonio Membiela Martínez General Manager of Water and Environmental Services

Mr. Andrés Pan de Soraluce Muguiro General Manager for Development

Mr. Juan Luis Osuna Gómez Concessions General Manager

Mr. Gonzalo San Cristóbal Tierra Industrial General Manager

Mr. José María del Cuvillo Pemán General Manager of Legal Services

Mr. José Félix Pareja de Lerma Auditing Manager

Total remuneration of senior executives (thousand Euros) 3,353

B.1.13. Identify in aggregate terms whether there are any guarantee or golden parachute clauses for senior

executives, including executive directors of the Company or of its group, in the event of termination or changes

in control. Indicate whether these contracts have to be disclosed to and/or approved by the bodies of the

Company or of its Group:

There are no guarantee or golden parachute clauses for senior executives of the Company or its group in the

event of termination or changes in control

Number of beneficiaries -

232


Board of Directors Annual General Meeting

Body authorising the clauses - -

Yes No

Is the Annual General Meeting informed of the clauses?

- -

B.1.14. Describe the process for setting Board members’ remuneration and the relevant provisions in the

company bylaws:

Process for setting Board members’ remuneration and the relevant provisions in the company bylaws

The General Shareholders Meeting is the body responsible for determining the Board of Directors remuneration proposed by it and upon prior favourable report by the Appointments and Remuneration Committee. There is currently fixed 750,000 euro remuneration, which can only me modified through General Meeting resolution, pursuant to the aforementioned procedure.

Article 24 e) of the Company Bylaws regulates this matter.

State whether any of the following decisions are reserved for approval by the full Board:

Yes No

At the proposal of the company’s chief executive, the appointment and potential removal of senior executives, as well as their indemnity clauses.

X

The remuneration of directors, as well as in the case of executive di-rectors, the additional compensation for their executive functions and other conditions to be fulfilled by their contracts.

X

B.1.15. State whether the Board of Directors approves a detailed remuneration policy and specify the issues on

which it makes a pronouncement:

Yes X

No

Yes No

Amount of fixed components, with an itemisation, where applicable, of fees for participation at the meetings of the Board and its Committees and an estimate of the annual fixed remuneration derived therefrom.

X

Variable remuneration components. X

Main characteristics of social security systems, with an estimate of their amount or equivalent annual cost.

X

The conditions to apply to the contracts of executive directors exerci-sing senior management functions. Among them.

X

B.1.16. State whether the Board brings before the General Meeting for a vote, as a separate point on the agenda,

and on a consultative basis, a report on the directors remuneration policy. If so, explain the aspects of the report

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in relation to the remuneration policy approved by the Board for the coming years, the most significant changes

therein with respect to the one applied during the year and an overall summary of how the remuneration policy

was applied during the fiscal period. Describe the role played by the Remuneration Committee and state whether

outside advisory service has been used. If so, identify the external consultants providing such advice:

Yes X

No

Issues on which the remuneration policy report makes a pronouncement

- Global amounto of anual compensation.- Amount of fees fot attendance at Board and Committee meetings.- Compensation distribution coefficients.

Remuneration Committee’s role

The Appointments and Remuneration Committee is the body in charge of reporting on the Board’s remuneration policy, which should be submitted to the latter.

Yes No

Has external advisory service been used? X

Identify the external consultants -

B.1.17. Indicate, as appropriate, which Board members are, in turn, members of the Boards of Directors or

executives or employees of companies that hold significant ownership interests in the listed Company and/or

group companies:

Name or company name of director Name or company name of significant shareholder

Office

Mr. Baltasar Aymerich Corominas Inmobiliaria Espacio, S.A. Advisor to the Chief Executive Officer

Mr. Tomás García Madrid Inmobiliaria Espacio, S.A. General Legal Representative

Grupo Villar Mir, S.L. Unipersonal Chief Executive Officer

Espacio Activos Financieros, S.L. Director

Mr. Javier López Madrid Grupo Villar Mir, S.L. Unipersonal Chief Executive Officer

Espacio Activos Financieros, S.L. Director

D. Juan-Miguel Villar Mir Inmobiliaria Espacio, S.A. Chairman and CEO

Grupo Villar Mir, S.L. Unipersonal Chairman and CEO

Mr. Juan Villar-Mir de Fuentes Inmobiliaria Espacio, S.A. Vice-chairman and CEO

Grupo Villar Mir, S.L. Unipersonal Vice-chairman and CEO

Espacio Activos Financieros, S.L. Vice-chairman and CEO


Inmobiliaria Espacio, S.A. Director

Grupo Villar Mir, S.L. Unipersonal Director

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Give details, as appropriate, of any material relationships, other than those envisaged under the preceding

heading, of the members of the Board of Directors with significant shareholders and/or at Group companies:

Name or company name of associated director

Name or company name of significant as-sociated shareholder

Description of relationship

- - -

B.1.18. Indicate the amendments, if any, to the Board Regulations during the year:

Yes

No X

Description of changes

-

B.1.19. Indicate the procedures for the appointment, re-election, evaluation and removal of directors. Give details

of the competent bodies, the formalities to be fulfilled and the criteria to be used in each of the procedures.

Procedure

Any appointment or re-election proposal submitted by the Board of Directors to the General Meeting for approval and any appointments made by the Board by its legally stipulated powers of cooption are preceded by a proposal or report by the Appointments and Remuneration Committee.

Directors removal shall be effective at the end of the period for which they were appointed, or when so resolved by the General Meeting. In addition, they must tender their resignation to the Board of Directors if they are disqualified on the grounds pursuant to the Board Regulations, upon prior report by the Appointments and Remuneration Committee.

B.1.20. Indicate the cases in which the directors must resign.

Grounds for resignation

Article 23 of the Board Regulations states that directors shall tender their resignation to the Board of Directors in the following cases:

a) Proprietary directors, when transferring their equity interest. b) Upon removal from executive positions to which their appointment as director is linked. c) When they are disqualified on the grounds of conflict of interest or any other legal grounds. d) When indicted for any presumed crime or when subject of disciplinary measures for serious or very serious breach determined by supervising authorities. e) When seriously reprimanded by the Audit and Compliance Committee upon breaching of director’s obligations. f) When their continuity in the Board can jeopardise the interests of the Company or when the reasons for their appointment no longer apply.

B.1.21. State whether the chairman of the Board of Directors also performs the functions of the company’s

Chief Executive. If so, describe the measures taken to limit the risks of power being concentrated in the hands

of one person:

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Yes

No X

Risk limiting measures

-

Indicate, and if applicable describe, any rules that have been established that authorise an independent director

to request that a Board meeting be called or that new topics be included on the agenda, to coordinate and voice

the concerns of non-executive directors and to direct the evaluation by the Board of Directors:

Yes

No X

Explanation of rules

-

B.1.22. Are qualified majorities, other than statutory majorities, required for any type of decision?:

Yes

No X

Describe how resolutions are adopted by the Board of Directors and specify, at least, the minimum attendance

quorum and the type of majority for adopting resolutions:

Adoption of resolutions

Description of resolution Quorum Type of majority

Ordinary resolutions Half of the members plus one, present and represented

Majority vote of attendees

Power delegation Two thirds of board members Two thirds of board members

Amendments to Regulations One half plus one Two thirds of attendees

B.1.23. Explain whether there are any specific requirements, apart from those relating to the directors, to be

appointed Chairman.

Yes

No X

Description of requirements

-

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B.1.24. State whether the Chairman has a casting vote:

Yes

No X

Matters on which there is a casting vote

-

B.1.25. Indicate whether the bylaws or the board regulations set any age limit for directors:

Yes

No X

Age limit for Chairman:

Age limit for Chief Executive:

Age limit for Directors:

B.1.26. Indicate whether the Bylaws or the Board Regulations set a limited term of office for independent

directors:

Yes

No X

Maximum term of office (years) -

B.1.27. If the number of female Board members is nil or small, explain the reasons why and describe the initiatives

adopted to correct this situation.

Description of the reasons and initiatives

The Board of Directors has one female director.

In particular, state whether the Appointments and Remuneration Committee has laid down any procedures so

that the selection processes are not affected by implicit biases that may hinder the selection of female directors,

and instead deliberately seek out female candidates with the required profile:

Yes X

No

Describe the main procedures

The Appointments and Remuneration Committee shall be especially responsible for avoiding all kinds of biases that may hinder the appointment of female directors and for deliberately searching women that may potentially cover those positions.

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B.1.28. Indicate whether there are any formal procedures for granting proxies to vote at Board meetings. If so,

give brief details:

Directors who cannot attend the meeting shall delegate their vote in favour of a member holding the same

position, including the corresponding instructions. (Article 18 of the Board Regulations).

B.1.29. Indicate the number of Board meetings held during the year and how often the Board has met without

the Chairman’s attendance:

Number of Board meetings 6

Number of Board meetings without Chairman’s attendance 0 (*)

*The Chairman shall leave the meeting when the Board evaluates the Chairman’s office.

Indicate how many meetings of the various Board Committees were held during the year:

Number of Executive or Delegated Committee meetings -

Number of Audit Committee meetings 6

Number of Appointments and Remuneration Committee meetings 2

Number of Appointments Committee meetings -

Number of Remuneration Committee meetings -

B.1.30. State the number of meetings held by the Board of Directors during the financial year, which were not

attended by all members. For this purpose, appointments of representatives without specific instructions will

be considered non-attendance:

Number of non-attendance by directors during the period 1

% non-attendance of total votes during the period 0.01

B.1.31. Indicate whether the individual and consolidated financial statements submitted for approval by the

Board are duly certified:

Yes X

No

Indicate, as appropriate, the person(s) who certified the Company’s individual and consolidated financial

statements for formal preparation by the Board:

Name Office

Mr. José Antonio Fernández Eléjaga Chief Financial Officer

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B.1.32. Explain the mechanisms, if any, established by the Board of Directors to prevent the individual and

consolidated financial statements prepared by it from being submitted at the Annual General Meeting with a

qualified auditors’ report:

Financial statements, like all other periodic financial information or any other that might have to be disclosed

to the markets, are examined by the Audit and Compliance Committee at a periodic meeting attended by

the Company’s external auditors, where they report on their auditing, all pursuant to Article 15 of the Board

Regulations.

Likewise, Article 43 of the abovementioned Regulations states that the Board shall produce the financial

statements not leaving room for qualifications by the auditor, a recommendation that the Company has been

compliant with since being listed on the securities market.

B.1.33. Is the Board Secretary a director?

Yes

No X

B.1.34. Describe the procedures for appointment and removal of the Board Secretary, stating whether the

appointment and removal are reported on by the Appointments Committee and approved by the full Board:

Appointment and removal procedure

The proposal for the Board’s Secretary appointment or removal shall be reported by the Appointments and Remuneration Committee to the full Board of Directors pursuant to Article 12 of the Board Regulations. The Secretary’s appointment or removal shall be approved by the Board.

Yes No

Does the Appointment Committee report on the appointment? X

Does the Appointment Committee report on the removal? X

Is the appointment approved by the full Board? X

Is the removal approved by the full Board? X

Is the Board Secretary charged with the function of procuring, most especially, compliance with the good

governance recommendations?

Yes X

No

Remarks

-

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B.1.35. Indicate the mechanisms, if any, established by the Company to preserve the independence of the

auditors, of financial analysts, of investment banks, and of rating agencies:

The Audit and Compliance Committee is responsible for gathering information on matters that may call the

auditor’s independence into question, as well as any other matters relating to the auditing process, including

receiving information and the other disclosures stipulated in accounting and auditing legislation and auditing

standards. Following this and pursuant to Article 43 of the Board of Directors Regulations, the latter shall not hire

those audit firms whose fees for all concepts may exceed 10% of its overall revenues during the last period.

B.1.36. State whether the Company has changed its external auditor during the period. If so, identify the

incoming and outgoing auditors:

Yes

No X

Outgoing auditor Incoming auditor

- -

If there were disagreements with the outgoing auditor, describe the content of such differences:

Yes

No X

Explanation of disagreements

-

B.1.37. Indicate whether the audit firm performs other non-audit work for the Company and/or its group and,

if so, state the amount of fees received for such work and the percentage over the fees billed to the Company

and/or its Group:

Yes X

No

Company Group Total

Amount of other non-audit work (thousands of Euros)

1,317 151 1,468

Amount of other non-audit work/total amount billed by audit firm (as a %)

80.95% 7.62% 40.69%

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B.1.38. State whether the audit report on the financial statements for the previous year contained reservations

or qualifications. If so, state the reasons given by the Chairman of the Audit Committee to explain the content

and scope of those reservations or qualifications.

Yes

No X

Explanation of reasons

-

B.1.39. Indicate the number of years that the current audit firm has been uninterruptedly auditing the financial

statements of the Company and/or the Group. Also indicate the number of years audited by the current audit

firm as a percentage of the total number of years during which the financial statements have been audited:

Company Group

Number of uninterrupted years 21 18

Company Group

No. of years audited by the current audit firm / No. of years the company has been audited (in %)

100% 100%

B.1.40. Indicate any ownership interests, disclosed to the Company, held by the members of the Company’s

Board of Directors in the capital of entities engaging in an activity that is identical, similar or complementary

to the activity that constitutes the object of the Company or of its Group. Also indicate the positions they hold

or the functions they discharge at these companies:

Director Company Office Shareholding

Mr. Juan-Miguel Villar Mir Inmobiliaria Espacio, S.A. Chairman and CEO 5.5% (*)


5.5% (*)

Torre Espacio Castellana, S.A. 5.5% (*)

Mr. Juan Villar-Mir de Fuentes Inmobiliaria Espacio, SA. Vice-chairman and CEO 28.7%


Chairman and Chief Executive Officer

28.7% (*)

Torre Espacio Castellana, S.A. Natural person proxy of sole Director

28.7% (*)

Mr. Tomás García Madrid Inmobiliaria Espacio, S.A. General Legal Representative

-


General Legal Representative

-

Torre Espacio Castellana, S.A. General Legal Representative

-

Pacadar, S.A. Natural person proxy of sole Director

-

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Mr. Baltasar Aymerich Corominas

Inmobiliaria Espacio, S.A. Advisor to the Chief Executive Officer

-


Inmobiliaria Espacio, S.A. Director 28.7%

(*) Indirect shareholding

B.1.41. Indicate whether there is a procedure for directors to be able to receive outside advisory services:

Yes X

No

Details of procedure

Article 26 of the Board of Directors Regulations states that non-executive directors shall propose expert advice on legal, accounting, technical, financial, commercial or other matters at the Company’s expense to be aided during furtherance of their duties.

B.1.42. Indicate whether there is a procedure for the directors to be able to receive the necessary information

to prepare for meetings of the managing bodies sufficiently in advance, and if so, give details:

Yes X

No

Details of procedure

Board members shall receive the information to be examined during Board meetings sufficiently in advance (72 hours).

Pursuant to Article 25 of the Board of Directors Regulations, the director has all the powers to request information on any aspect related to the Company, examine its books, records, documents and other background overview of company transactions and for inspection of all its facilities.

B.1.43. Indicate whether the Company has put forward rules that compel directors to disclose and, if applicable,

resign in situations that may harm the Company’s credit and reputation. If so, give details:

Yes X

No

Describe the rules

Company directors shall tender their resignation to the Board of Directors and, should the latter deem it convenient, for-malise the corresponding resignation pursuant to Article 23 of the Board of Directors Regulation, which includes, among others, their indictment for any presumed crime or upon subject of disciplinary measures for serious or very serious breach determined by supervising authorities and when their continuity in the Board can jeopardise the interests of the Company.

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B.1.44. State whether any Board member has advised the Company that he or she has been prosecuted or ordered

to stand trial for any of the criminal offences referred to in Article 124 of the Companies Law:

Yes

No X

Name of director Criminal Case Remarks

- - -

State whether the Board of Directors has analysed the case. If so, provide the rationale of such a decision as

to whether or not the director should remain on the Board:

Yes

No X

Adopted decision Reasoned explanation

Applies / Does not apply -

B.2. Committees of the Board of Directors

B.2.1. Give details of all the committees of the Board of Directors and their members:

EXECUTIVE OR DELEGATE COMMITTE

Name Office Type

- - -

- - -

AUDIT AND COMPLIANCE COMMITTEE

Name Office Type

Mr. Juan Mato Rodríguez Chairman Independent non-executive

Mr. Tomás García Madrid Member Proprietary non-executive

Mr. Jaime Vega de Seoane y Azpilicueta Member Other non-executive

Mr. Juan Villar-Mir de Fuentes Member Proprietary non-executive

Mr. Daniel García-Pita Pemán Secretary -

Mr. José María del Cuvillo Pemán Vice-secretary -

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APPOINTMENTS AND REMUNERATION COMMITTEE

Name Office Type

Mr. José Luis García-Villalba González Chairman Independent non-executive

Mr. Tomás García Madrid Member Proprietary non-executive

SAAREMA INVERSIONES, S.A. Member Independent non-executive

Mr. Luis Solera Gutiérrez Member Independent non-executive

Mr. Juan-Miguel Villar Mir Member Proprietary non-executive

Mr. Daniel García-Pita Pernán Secretary -

Mr. José María del Cuvillo Pernán Vice-Secretary -

APPOINTMENT COMMITTEE

Name Office Type

- - -

- - -

REMUNERATION COMMITTEE

Name Office Type

- - -

- - -

COMMITTEE

Name Office Type

- - -

- - -

B.2.2. State whether the Audit Committee is responsible for the following functions:

Yes No

Supervise the preparation and the integrity of the financial information on the Company and, if applicable, the Group, reviewing compliance with the regulatory requirements, proper delimitation of the scope of consolidation and correct application of accounting policies.

X

Conduct periodic reviews of risk management and internal control systems, so that the principal risks are adequately identified, managed and disclosed properly.

X

Safeguard the independence and effectiveness of the internal audit function; propose the selection, appointment, reappointment and removal of the head of internal audit; propose that service’s budget; receive regular report-backs on its activities; and verify that the conclusions and recommendations of its reports are taken into account by the top management.

X

Establish and supervise a mechanism that allows employees to report the irregularities of potential importance, especially financial and accounting ones, that they detect inside the Company, confidentially and, if considered appropriate, anonymously.

X

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Bring before the Board proposals for selection, appointment, re-election and replacement of the external auditor, as well as the terms of the auditor’s engagement.

X

Regularly receive information on the audit plan and the results of its execution from the external auditor, and verify that the senior management takes into account its recommendations.

X

Ensure the independence of the external auditor. X

In the case of groups, promote the Group auditor’s assumption of responsibility for audits in the group companies.

X

B.2.3. Describe the rules of organisation and functioning, and the responsibilities attributed to each of the

Board committees.

AUDIT AND COMPLIANCE COMMITTEE

Pursuant to Article 15 of the Board of Directors Regulations, all the members of the Audit and Compliance

Committee shall be directors not holding executive positions in the Company. The Audit and Compliance

Committee shall appoint among its members an independent director as Chairman. The Chairman shall be

replaced every four years and may be re-elected after stepping down for one year. The Board of Director’s

Secretary shall be the Committee’s Secretary and, in his/her absence, the Board’s Vice-secretary shall replace

him/her. The Committee’s Secretary shall draw up the minutes of the adopted resolutions, which shall, in turn,

be notified to the Board.

This Committee shall meet periodically as required and, at least, four times a year. One of the meetings shall

be necessarily devoted to evaluate the Company’s governance rules and procedures efficacy and compliance

and to prepare the information the Board of Directors shall approve and include in its annual public report.

The Committee shall be duly convened when half of the members plus one, present or represented, attend the

meeting. Resolutions shall be adopted by majority vote of the directors attending the Committee.

Votes in writing and with no proxy shall only be admitted when none of the members oppose to such

procedure.

APPOINTMENTS AND REMUNERATION COMMITTEE

Pursuant to Article 16 of the Board of Directors Regulations, the Appointments and Remuneration Committee

shall be composed of non-executive directors, mainly independent directors, and shall appoint a Chairman

among its independent directors. In the absence of the Chairman, the meeting shall be chaired by the most

senior director. The Board of Director’s Secretary shall be the Committee’s Secretary and, in his/her absence,

the Board’s Vice-secretary shall replace him/her. The Committee’s Secretary shall draw up the minutes of the

adopted resolutions, which shall, in turn, be notified to the Board.

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The Appointments and Remuneration Committee shall meet whenever the Board or its Chairman requests a

report or the adoption of proposals and, in any case, whenever convenient for the appropriate furtherance of

its duties. One of the meetings shall be devoted to prepare the report on the directors’ remunerations, which

the Board of Directors shall approve and include as part of its annual public report.

B.2.4. Indicate, where appropriate, the advisory and consultative powers and any delegated authority held by

each of the committees:

Committee Brief description

Audit and Compliance Committee a) Report to the General Shareholders’ Meeting matters therein raised by share-holders regarding their competence, and consider suggestions on such matters shareholders, the Board of Directors and Company managers may pose.

b) Propose the appointment of the auditor, the terms of engagement of the auditor, monitoring and observance of the audit contract and, if applicable, his/her revocation or non-renewal.

c) Maintain relations with the external auditors, assess the results of each audit and the management team’s response to their recommendations, and intervene in case of discrepancies between the latter and them with regard to policies and methods applicable in preparing financial statements, as well as gathering information on matters that may call the auditor’s independence into question, and any other matters relating to the auditing process, including receiving information and the other disclosures stipulated in accounting and auditing legislation and auditing standards.

d) Monitor compliance of auditing contract, always attempting a clear and precise drafting of the opinion on the financial statements and audit report's main contents.

e) Monitor Company’s internal audit services, being aware and verifying finan-cial information and internal control system’s adequacy and integrity and check-ing appointment and replacement of the people responsible.

f) Review Company’s statements, oversee compliance with legal requirements and correct application of generally accepted accounting principles and also inform on the proposals for changes in the accounting policies and methods suggested by management.

g) Review bulletins and periodic financial information to be submitted by the Board to the markets and their regulatory bodies.

h) Examine compliance with the Internal Rules of Conduct in Securities Markets, the Regulations of the Board of Directors, the Regulations of the General Shareholders’ Meeting, Executive Personnel’s Code of Conduct and, in general, the Company’s rules of governance, and make proposals for improving them. The Audit Committee is particularly responsible for receiving information and, if applicable, issuing a report on the disciplinary measures applied to the Company’s senior executive team.

i) Report to the Board prior to the adoption of resolutions related to the creation or acquisition of shares in special purpose vehicles or entities resident in countries or territories considered tax havens.

Appointments and Remuneration Committee a) Design and review the criteria that must be followed with respect to the composition of the Board of Directors and the selection of candidates.

b) Reporting to the Board on the proposed appointments of directors so it may directly appoint them (cooption) or submit them to the General Meeting’s decision.

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c ) Propose to the Board the appointment of Committee members.

d) Propose to the Board of Directors the annual remuneration system and amounts of directors and Steering Committee members as well as the criteria for the remuneration of the rest of the Group’s executive staff.

e) Verify periodically remuneration programs, assessing their adequacy and return.

f) Monitor remuneration transparency.

g) Reporting on the list of transactions that imply or may imply a conflict of interests and, in general, on the matters included in chapter on IX of this Regulation.

h) Consider suggestions made by the Company’s Chairman, members of the Committee, senior executives or shareholders.

i) Report the full Board on the proposal of appointment and removal of the Board of Directors’ Secretary.

j) Annually report the full Board on the evaluation of the Board of Directors’ Chairman performance.

k) Advise the Board on the conditions to be fulfilled by the contracts of senior management performing as executive directors, including terms of contract, notice period and any other clauses concerned with hiring bonuses, as well golden parachutes clauses.

l) Report the Board on the initiatives adopted to increase the number of female directors.

m) Examine and organise, in appropriate form, the succession of the Chairman and Chief Executive so the handover proceeds in a planned and orderly manner.

B.2.5. Indicate, as appropriate, whether there are any regulations for the Board Committees; if so, indicate where

they can be inquired and whether any amendments have been made during the year. Also indicate whether

any annual report on the activities of each committee has been prepared voluntarily:

Article 23 of the Company Bylaws regulates Audit and Compliance Committee’s existence and operating rules, also

included in Article 15 of the Board Regulations. Article 16 of the Board Regulations sets forth the Appointment

and Remuneration Committee’s composition, operation and responsibilities.

Each committee is responsible for drafting an annual report on the activities developed throughout the previous

fiscal year, included as part of the Company’s annual public report.

Neither the Bylaws nor the Board of Directors Regulations suffered any amendments during 2008, with the last

amendment being approved during 2007 so they would faithfully reflect the recommendations contained in the

Listed Companies Unified Code of Good Governance, approved by the National Securities Market Commission’s

Board on 22 May 2006, and whose contents are valid to date.

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B.2.6. Indicate whether the composition of the executive committee reflects the participation of the various

directors on the Board according to their status:

Yes -

No -

If “no” explain the composition of the executive committee

There is no Executive Committee

C. Related-party transactions

C.1. State whether only the full Board can approve, upon a prior favourable report from the Audit Committee or

some other committee charged with this function, the transactions carried out by the Company with directors,

or with shareholders with significant holdings or represented on the Board, or with persons related thereto:

Yes X

No

C.2. Give details of material transactions entailing a transfer of funds or obligations between the Company or

group companies and the significant shareholders of the Company:

The following transactions with related entities under market conditions were conducted during 2008:

Concept 2008 % on OHL Group’s Total

Sales and other operating income 48,059 1.67

Purchases and other operating expenses 19,436 2.88

Below is a detailed list of operations mentioned in Note D.4 of OHL Group’s Consolidated Annual Report:

Name or company name of significant shareholder

Name or company name of Company or Group company

Nature of relationship

Type of transaction Amount (thousand Euros)

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Works execution 11,942


Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Works execution 22



Inmobiliaria Espacio, S.A. Islas de Mayakoba, S.A. de C.V. Contractual Revenues from sale 15,799

Inmobiliaria Espacio, S.A. The Tower Group Contractual Works execution 4,614

Inmobiliaria Espacio, S.A. Ecolaire España, S.A. Contractual Works execution 280

Inmobiliaria Espacio, S.A. Proyectos y Sistemas, S.A. Contractual Works execution 13

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Inmobiliaria Espacio, S.A. Ecolaire España, S.A. Contractual Works execution 104

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Provision of services 1

Inmobiliaria Espacio, S.A. Islas de Mayakoba, S.A.de C.V. Contractual Provision of services 16



Inmobiliaria Espacio, S.A. The Tower Group Contractual Provision of services 8


Inmobiliaria Espacio, S.A. Instituto de Gestión Sanitaria, S.A. Contractual Provision of services 13








Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Sale of property, plant and equipment

129

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Sale of property, plant and equipment

26

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Supplies 1,040

Inmobiliaria Espacio, S.A. Sociedad Anónima Trabajos y Obras Contractual Supplies 321

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Supplies 911



Inmobiliaria Espacio, S.A. Agrupación Guinovart Obras y Servicios Hispania, S.A.

Contractual Provision of external services 300

Inmobiliaria Espacio, S.A. Asfaltos y Construcciones Elsan, S.A. Contractual Provision of external services 195

Inmobiliaria Espacio, S.A. OHL Medio Ambiente, Inima, S.A. Contractual Provision of external services 88

Inmobiliaria Espacio, S.A. Electrificaciones y Montajes Integrales OHL, S.A.

Contractual Provision of external services 42

Inmobiliaria Espacio, S.A. Morkaitz, S.A. Contractual Provision of external services 10

Inmobiliaria Espacio, S.A. OHL Desarrollos, S.L Contractual Provision of external services 24

Inmobiliaria Espacio, S.A. Construcciones Enrique de Luis, S.A. Contractual Provision of external services 45

Inmobiliaria Espacio, S.A. Construcciones Adolfo Sobrino, S.A. Contractual Provision of external services 85

Inmobiliaria Espacio, S.A. OHL Concesiones, S.L. Contractual Provision of external services 568

Inmobiliaria Espacio, S.A. S.A. Trabajos y Obras Contractual Provision of external services 215

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Provision of external services 2,661


Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Provision of services 5,470

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Provision of external services 1


Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Provision of external services 1,247

Inmobiliaria Espacio, S.A. OHL Medio Ambiente, Inima, S.A. Contractual Provision of external services 8


Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Purchase of intangible assets 276

Inmobiliaria Espacio, S.A. Obrascón Huarte Lain, S.A. Contractual Purchase of property, plant and equipment

122

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C.3. Give details of material transactions entailing a transfer of funds or obligations between the Company or

entities of its group and the Company’s directors or executives:

Name or company name of director or executives

Name or company name of Company or Group company

Nature of relationship

Type of transaction Amount (thousand euros)

Mr. Juan Luis Osuna Gómez Obrascón Huarte Lain, S.A. Contractual Provision of Services 4.604

Mr. Gonzalo San Cristóbal Tierra Obrascón Huarte Lain, S.A. Contractual Provision of Services 175

C.4. Give details of material transactions by the Company with other companies of the same group, where such

transactions are not eliminated in the process of preparing the consolidated financial statements and are not

conducted within the course of the Company’s ordinary business, as regards their subject-matter or terms and

conditions:

Name of Group company Brief description of transaction Amount (thousand euros)

- - -

C.5. State whether the members of the Board of Directors have at any time during the year found themselves in

a conflict of interest pursuant to Article 127 under the Companies Law:

Yes

No X

Name or company name of director Description of the conflict of interest situation

- -

C.6. Give details of the mechanisms in place for detecting, identifying and resolving any potential conflicts of

interest between the Company and/or its Group and its directors, executives or significant shareholders:

Article 32 of the Board of Directors Regulations states the mechanisms to detect and regulate possible conflicts

of interest between the Company and/or its group and its directors, executives or significant shareholders, so

that the director shall abstain from attending and intervening in any debates that may affect his/her matters of

personal interest. There shall also be a director’s conflict of interest when the matter affects a person related

to him/her pursuant to Article 127 section 5 of the Companies Law.

In order to perform direct or indirect professional or commercial transactions with the Company, the director

should report the conflict of interest to the Board of Directors so it can be authorised, upon prior report from

the Appointments and Remuneration Committee.

The director or a related person, pursuant to Article 127 section 5 of the Companies Law, shall not benefit from a

Company’s business opportunity, unless previously offered to and rejected by the Company, and the contribution

thereof be authorised by the Board upon prior report from the Appointments and Remuneration Committee.

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For the purposes of the previous paragraph, a business opportunity shall be understood as any possibility to

make an investment or trade operation triggered or discovered by the director in connection to his/her office,

or by means of Company information resources, or under such circumstances that make it reasonable to believe

that the third party offer was directed to the Company.

The Board of Directors formally reserves the right to maintain confidential any company transaction with a

significant shareholder.

Under no circumstances shall the Company authorise the transaction unless a report from the Appointments

and Remuneration Committee has assessed the operation under shareholders’ equal opportunities policy and

market conditions.

General authorisation of the operations line and its implementation conditions shall be sufficient when dealing

with ordinary transactions.

When significant shareholders’ transactions shall be decided by the General Shareholders’ Meeting, the Board

of Directors will recommend affected significant shareholders to abstain from voting.

C.7. Is more than one company in the group publicly traded in Spain?

Yes

No X

Identify the subsidiary companies that are listed in Spain:

Listed subsidiaries

Not applicable

State if the relevant areas of activity they engage in and any business dealings between them, as well as between

the listed subsidiary and other group companies have been defined publicly accurately:

Yes

No X

Define any possible business relations between the parent company and the listed subsidiary, and between the latter and the other Group companies.

Not applicable

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Identify the mechanisms in place to resolve possible conflicts of interest between the listed subsidiary and the

other Group companies:

Mechanisms to resolve possible conflicts of interest

-

D. Risk control systems

D.1. General description of the risk policy of the Company and/or its Group, giving details of and evaluating

the risks covered by the system, together with evidence that the system is appropriate for the profile of each

type of risk:

One of the priorities of OHL Group’s corporate governance policy is risk management and internal control.

Internal control procedures must enable risk control to be improved, facilitate a monitoring system and ensure

that the controls are applied correctly.

The objectives of risk management are as follows:

• Prevention and control of the risks that may affect the achievement of the targets set by the Group and its

equity.

• Ensure compliance with current legislation and with the Group’s internal regulations and procedures.

• Guarantee the reliability and completeness of the accounting and financial information.

In order to strengthen the integration of risk management in the decisions relating to the Group’s business,

the Parent reinforced the global risk management system and enhanced the management system of the

whole organisation so that the managers of all the business lines follow the same corporate principles in risk

management and are able to use uniform policies, processes and models.

This integrated risk control system permits the following:

1) Identification of the events that may affect the achievement of the Group’s targets.

2) Evaluation of the risks arising from these events.

3) Taking of decisions on the measures to be implemented to maintain the risks within the established limits.

4) Appropriate monitoring of risks.

The Group currently has a corporate risk model, drawn up on the basis of the models established for the

Domestic and International business lines, with their respective indicators for the risks identified. Once the

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control targets had been identified, they were systematically monitored and this process will be intensified and

extended to the other activities.

The Group has thus identified the risks that may prevent it from achieving its targets; it has fostered the

ongoing improvement of the existing controls (actions, policies, regulations and procedures), perfecting the

measurement indicators established for each risk and, therefore, has minimised the probability of these risks

having a significant impact on its business.

Group risks

The Group’s normal activity in different business and geographical areas requires an ongoing analysis of the

main risks that may be classified as follows:

a) Market risks

In this category the Group manages the risks relating to changing and specific circumstances in the markets in

which it operates, particularly potential regulatory changes in the various markets, country risk and risk arising

from entries into the market, alliances and joint ventures.

b) Operational risks

The main operational risks managed by the Group relate to:

• Contracting: bringing contracts into line with the policies defined by the Group.

• Subcontracting: arising from the secondary liability of the Group for the performance of subcontractors and

from possible discrepancies in the fulfilment of contracts.

• Quality: ensuring that the Group’s products and services meet the specifications and requirements of customers

and third parties.

• Health and safety: managing and preventing occupational illness and accidents suffered by Group employees

and by external personnel of collaborators.

• Environmental: efficient use of resources to prevent business activities having an adverse impact, mainly on

the environment but also on persons and property.

c) Financial risks

These risks mainly affect the obtainment of financing when required and at a reasonable cost and the

maximisation of the available financial resources. The most significant are as follows:

• Interest rate risk

• Exchange rate risk

• Credit risk

• Liquidity risk


The Group’s objective is to ensure that the information used is correct and accurate and enables decisions to

be taken by Group executives and third parties.

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Risk control policies and systems

By implementing an integral risk control model, the Group’s traditional policies for minimising risks and the

most efficient and complete control systems are being systematically integrated.

Both the control systems and the policies are backed up by internal regulations (rules and procedures) and by

information systems to form a complete, homogeneous and uniform whole. The main systems and policies

and their correlation with the aforementioned risks are detailed below:

a) Market-related

The Group’s presence in the Spanish and foreign markets is the result of a strategy defined after detailed

analysis of the risks and opportunities therein by the Group’s Management Committee and the managers of

each business line. This, together with the Group’s historical experience in many of these markets, mitigates

the exposure to risk.

The main business and geographical risk factors in each market are also monitored so that they may be

pre-empted.

> Investment policy

The Group’s investments follow the strategy set by the Group through its managing bodies, which is monitored

and defined by the Group’s Management Committee.

An Investment Committee analyses all the economic, financial, legal and tax issues and the return required in

order to guarantee that all investments are in line with the aforementioned policy. Such Committee also takes

all the decisions on divestments and mergers.

b) Operations-related

> System for the technical and economic planning of projects

There are detailed procedures with controls at different levels for project tender processes which disclose any

failure to comply with the Group’s objectives in this respect.

Most of the risks inherent to the execution of projects are associated with the meeting of deadlines, correct

execution and the control of project operations and costs.

The Group has technical planning tools that enable it to study, develop and monitor the complete execution

of the project by cost and sales activity. A system of this nature needs to be monitored and updated and the

254


production line reviews the progress of the projects at least every four months and takes all the corrective

measures required to guarantee deadlines, quality and profitability.

The business areas that do not use this tool have other specific tools with which to analyse the progress of

their business (e.g. traffic and incident control in concessions, etc.) and similarly take the required measures,

if applicable.

> Purchasing system

The Group’s purchasing system is essential to guarantee the construction period, quality and profitability of

projects. Consequently, the Group uses tools such as internal regulations and computer systems to make this

process as efficient and transparent as possible.

The process begins with the accreditation of suppliers and subcontractors, which is an essential requirement

in order for bids to be accepted and projects to be awarded. Upon accomplishment of this requirement,

decision making processes for the projects or hirings to be awarded shall observe the internal regulations

and be monitored at their execution stage by each project manager, under the surveillance of the Purchasing

Management following up the whole process through computer systems.

Particular attention is paid to controlling the legal obligations (tax and labour law) of the companies that work

with us.

> Insurance policy

The Group’s insurance policy is designed and implemented on a centralised basis.

In this regard, the Group insures its assets and takes out third-party liability and all-risk construction insurance

policies with the widest possible coverage for an appropriate price (cost of premiums).

All insurance cover is reviewed periodically to adapt it to changing conditions and to thus guarantee its

application.

In this respect and pursuant to Act 26/2007 on Environmental Responsibility, part of Directive 2004/35/EC in

the Spanish legal system, the Company counts with an insurance policy covering such risk within the scope of

the European Union.

> Quality system

The quality management system is essential to the achievement of the Group’s expected profitability since it

ensures that the quality standards required by customers are fulfilled.

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Such system observes the standard ISO 9001:2000 and is designed for continuous improvement and for our

customers’ satisfaction.

A key element of the quality system is the requirement for our suppliers and subcontractors to comply with the

aforementioned quality standards, which is why the prior accreditation system exists.

The quality system is implemented at most of our Spanish and foreign subsidiaries.

> Occupational risk prevention system

The strategic plan initiated in 2004 enabled the Group to obtain OHSAS 18001:1999 certification in 2005. This

certificate is issued by SGS and has helped to implement a “zero accident” philosophy, reducing the accident

rate year after year.

Pursuant to the Occupational Risk Prevention Law, the Group subsidiaries act through the Joint Prevention

Service (SPM) which monitors the application of obligatory safety measures and prepares an occupational risk

prevention system in line with the UNE 81900 and OHSAS 18000 standards.

> Environmental management system

The Group is aware of the environmental impact of its activities and is liable to both its customers and society.

It therefore uses an environmental management system based mainly on the management of quality and

sustainability indicators which afford a more profound and detailed knowledge of the impact on the environment

and allow the Group to take measures in this respect.

Employees are also given ongoing training in this area and the Group works with customers, suppliers,

governments and agencies in this connection.

> Executive Staff’s Code of Conduct

In 2002 the Group approved a code of conduct which ensures that all managers take into account the need to

comply with certain ethical principles in their actions.

Every executive receives and agrees to comply with the code.

A corporate Conduct Committee establishes and develops the procedures required to ensure compliance with

the code and is also responsible for interpreting infringements and proposing the appropriate disciplinary

measures.

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The Group’s Internal Audit unit, which reports to the Audit and Compliance Committee of the Board of Directors

and performs annual reviews, plays a key role in the detection of internal infringements, which it reports to

the Committee.

> Human resources policy

All Group policies in this area focus on the creation of stable and safe workplaces and professional training

and development.

At the same time, since the employees are considered the Group’s primary asset, there is fluent communication

with workers’ representatives to facilitate an appropriate working environment.

c) Finance-related

The Group uses derivative financial instruments in order to mitigate the economic effects of foreign currency

and interest rate risks to which it is exposed. They are arranged with highly solvent banks, thereby reducing

the credit risk to a minimum.

The liquidity risk is managed by controlling availability.

The credit risk is also monitored exhaustively from the time a contract is studied until the debt has been

collected in full. The appropriate guarantees and hedges are also arranged when the circumstances so require

and particularly in connection with international projects.

d) Related to the reliability of economic and financial information

> Economic information system

The information system is based on an in-house accounting system implemented at most Spanish Group

companies and at certain of the foreign companies, whose basic administrative processes and the associated

controls were developed by the Parent company. When the characteristics of the activity so advise, specific

accounting and management systems are used.

Both systems are completed by a single reporting system for all Group companies which enables economic

information to be prepared for external reporting purposes.

The reliability of the Group’s information is guaranteed by internal controls which may take the shape of automatic

processes or periodic reviews.

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> Other matters

The general supervisory functions of the Audit Committee of the Board of Directors include the review of the

Group’s financial statements, monitoring compliance with legal requirements and the correct application of

accounting policies and the review of the periodic financial information that the Board must furnish to the

markets.

If deemed appropriate, it may also use the advisory services of external professionals, those of any executives

considered necessary and those of external auditors.

D.2. State if any of the different types of risk that affect the Company and/or its Group (operational, technology,

financial, legal, reputational, tax, etc):

Yes

No X

If so, describe the circumstances that gave rise to them and state whether the control systems in place functioned

properly:

Risk materialised during the year Circumstances that gave rise to risk Functioning of control systems

- - -

D.3. Indicate whether any committee or other governing body is responsible for establishing and overseeing

these control mechanisms:

Yes X

No

If so, give details of its functions:

Name of committee or body Description of functions

Audit and Compliance Committee Monitor Company’s internal audit services, being aware and verifying financial infor-mation and internal control system’s adequacy and integrity and checking appoint-ment and replacement of the people responsible.

D.4. Identification and description of the procedures for compliance with the various regulations affecting the

Company and/or its Group:

The Company does not operate in regulated markets.

258


E. Annual General Meeting

E.1. State if there are differences with the quorum provisions of the Companies Law in respect of General

Meetings. If so, give details:

Yes

No X

E.2. State if there are differences with the rules laid down in the Companies Law regarding the adoption of

resolutions. If so, give details:

Yes

No X

E.3. List any rights of the shareholders in connection with General Meetings that differ from those contained

in the Companies Law:

There are no rights different from those covered by the Companies Law.

E.4. Indicate the measures, if any, adopted to encourage participation by shareholders at General Meetings:

Article 40 of the Board of Directors Regulations and the General Meeting Regulations state that the Board of

Directors shall foster shareholders’ informed participation in general meetings and shall implement any timely

measure to facilitate the effective exercise of the General Shareholders’ Meeting responsibilities pursuant to

the provisions of the Law and the Company Bylaws.

Particularly, the Board of Directors shall implement the following measure:

- Make every effort to report to shareholders prior to the General Meeting all the information that may

be required by law and everything that, though not legally required, might be of interest to them and

reasonably submitted by it.

- Address, with due diligence, information requests submitted by shareholders prior to the Meeting.

- Answer, with due diligence, questions submitted by shareholders during the Meeting.

- Ensure matters proposed to the General Meeting are voted in order and separately, giving shareholders

the opportunity to intervene to voice their views on each of the matters subject to vote.

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E.5. Indicate whether the Chairman of the Board of Directors chairs General Meetings. Give details of what

measures, if any, are adopted to ensure the independence and correct functioning of the General Meeting:

Yes X

No

Pursuant to Article 23 section e) of the Company Bylaws and to the General Shareholders’ Meeting Regulations,

the Chairman of the Board of Directors shall chair the General Meeting.

Details of measures 1.- The Chairman shall organise shareholders’ debates and interventions so the meeting is developed in an orderly manner within a reasonable period. He/she shall call to order shareholders who use offensive language against people or institutions, use inappropriate language or digress from the matter of their inter-vention. The Chairman may also restrict the time for interventions.

2.- The Chairman shall decide whether shareholders may intervene at the end of the debate on each point or once all of them, or a group thereof, have been discussed.

3.- The Chairman shall ensure matters proposed to the General Meeting are voted in order and separately, giving shareholders the opportunity to intervene to voice their views on each of the matters subject to vote.

4.- The Chairman shall decide whether the vote is to take place after each matter is debated or once the enti-re debate is concluded, though in the latter case, separate votes should be casted for each of the proposals submitted to the General Meeting.

5.- The Chairman shall decide the order in which the different proposals for a specific point on the agenda shall be voted. Once a proposal is approved, all the others that may be incompatible with it shall be excluded.

E.6. Indicate, as appropriate, any amendments introduced to the General Meeting Regulations during the

year:

No amendments were made to these Regulations in 2008.

E.7. Indicate the data on attendance at the General Meetings held in the year to which this report refers:

ATTENDANCE DATA

Date of General Meeting % attendance in person

% attendance by proxy

% by remote voting Total

Electronic vote Other

20.05.2008 51.135 15.689 - - 66,824 (*)

* Including treasury stock

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E.8. Briefly indicate the resolutions adopted at the General Meetings held in the year to which this report refers

and the percentage of votes with which each resolution was adopted:

One.- Approve the Financial Statements and the Management Report for the year ended 31 December 2007 of

both the Company and its Consolidated Group.

This proposal counts with a favourable report from the Audit and Compliance Committee. It was approved with

the abstention of 325,163 shares and the favourable vote of the remaining 58,141,229 shares, representing

99.97% of shares with voting right.

Two.- Approve Company’s 2007 profit distribution proposal.


the abstention of 310,019 shares, rejection of 125 shares and the favourable vote of the remaining 58,156,248

shares, representing 99.99% of shares with voting right.

Three.- Approve Company’s Board of Directors management for 2007.


the abstention of 310,019 shares, rejection of 22,821 shares and the favourable vote of the remaining 58,133,552


Four.- Reappoint Deloitte, S.L. as OBRASCÓN HUARTE LAIN, S.A. and its Consolidated Group’s external auditors

for the period between 1 January and 31 December 2008, pursuant to Article 204 of the Companies Law.


the abstention of 310,019 shares and the favourable vote of the remaining 58,156,373 shares, representing

100% of shares with voting right.

Five.- Delegate to the Board of Directors, pursuant to Article 319 of the Regulations of the Mercantile Register,

the power to issue securities according to the provisions of the general scheme on debentures issuance,

including, as applicable, the Second Additional Provision of Law 13/1985, disregarding, where non-applicable,

the authorisation conferred by resolution of the Annual General Meeting of 10 May 2007. The approval of

issuance conditions included that it could occur once or several times within a maximum five-year term from

the effective date of this resolution. Securities shall be issued with a maximum 35-year amortisation term

from issuance. Maximum par value of securities to be issued shall be THREE BILLION euros or its equivalent

in another currency.

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It was approved with the abstention of 310,019 shares, rejection of 6,638,387 shares and the favourable vote

of the remaining 51,517,986 shares, representing 88.58% of shares with voting right.

Six.- Authorise the Company’s Board of Director to acquire, pursuant to Article 75.1 of the Companies Law,

treasury shares under any transfer mode approved by Law, directly or through a subsidiary or affiliated company,

up to the maximum amount legally accepted. The authorisation has 18 months duration and the shares shall

be acquired at a maximum price of 50 euros per share, with no minimum price limit.

Pursuant to Article 75.1 of the Companies Law, acquired shares may be granted to company employees or

managers according to remuneration or as a result of timely agreed options plans.


the abstention of 310,019 shares, rejection of 125 shares and the favourable vote of the remaining 58,156,248


Seven.- Ratify Ms. Silvia Villar-Mir de Fuentes’ appointment as Company Director for 6 years through cooption

by the Board of Directors, replacing Mr. Mariano Aísa Gómez, effective on 31 March 2008.

The aforementioned appointment is reported to be proposed by Inmobiliaria Espacio, S.A., a company owned

by the Villar Mir Group, representing its shareholding interests and, therefore, considered Villar Mir Group’s non-

executive proprietary director for legal, bylaw, and good governance regulations and principles purposes.

This proposal counts with a favourable report from the Appointments and Remuneration Committee. It was

approved with the abstention of 310,019 shares, and the favourable vote of 44,655,880 shares with voting

rights, representing 76.78% of shares with voting right. Pursuant to Article 114.1 of the Securities Market Law,

13,500,493 proxy shares by delegation of Mr. Juan-Miguel Villar Mir abstained from voting.

Eight.- Approve the report about directors’ remuneration policy drafted by the Board of Directors during the

meeting held on 31 March 2008.


approved with the abstention of 310,019 shares, rejection of 125 shares and the favourable vote of the remaining

58,156,248 shares, representing 99.99% of shares with voting right.

262


Nine.- Approve the participation of OHL Group’s general managers, members of its senior executive team, in

the Incentives Plan agreed by the Board of Directors during the meeting held on 13 November 2007, including

the allocation of OHL share-price linked “units” under the general terms notified and disclosed to the National

Securities Market Commission on 13 November 2007. The 12 senior executives were allocated 590,943 “units”.

This resolution is submitted to the General Meeting pursuant to the Fourth Additional Provision of the Companies

Law.


approved with the abstention of 310,019 shares, rejection of 13,039 shares and the favourable vote of the

remaining 58,143,334 shares, representing 99.97% of shares with voting right.

Ten.- Approve the report issued by the Board of Directors at the meeting held on 31 March 2008 on matters

related to Article 116 bis of the Securities Market Law.


the abstention of 5,260,862 shares and the favourable vote of the remaining 53,205,530 shares, representing

91.49% of shares with voting right.

Eleven.- Expressly grant powers to the Chairman, Secretary and Vice-secretary so that any of them, with as many

powers as may be required by Law, may appear before a Notary to formalise the adopted resolutions and follow

all necessary proceedings to register such resolutions, as applicable, in the corresponding public records, as

well as the mandatory registration of financial statements in the Mercantile Register and submit, if necessary,

documents clarifying or rectifying original ones, requesting, if applicable, partial recording, pursuant to the

Mercantile Register’s verbal or written assessment.

In addition, the Board of Directors has the power to introduce in the resolutions to be lodged with the Mercantile

Register any clarifications or rectifications thereby necessary.

It was approved with the abstention of 310,019 shares and the favourable vote of the remaining 58,156,373

shares, representing 100% of shares with voting right.

Twelve.- Approve the Annual General Meeting’s Minute.

It was approved with the abstention of 310,144 shares and the favourable vote of the remaining 58,156,248


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E.9. Indicate whether the bylaws contain any restriction establishing a minimum number of shares required to

attend the General Meeting:

Yes

No X

Number of shares required to attend a General Meeting 1 share

E.10. Indicate and provide support for the policies followed by the Company with respect to proxy voting at

General Meetings:

Pursuant to Article 9 of the General Meeting Regulations, shareholders are provided with attendance cards via

the companies depositaries of securities in the usual manner, expressly indicating the information submitted

to shareholders and the proposals from the Board of Directors, or other shareholders, if applicable, related to

each of the points on the agenda, to facilitate instructions to proxies when shareholders appoint one to attend

the Meeting.

Shareholders may appoint any person, whether a shareholder or not, as a proxy to attend the General

Meeting.

Public proxy requests by the Board of Directors or by any member thereof should justify in detail the proxy vote

upon shareholder’s failure to give instructions and, if applicable, reveal conflicts of interest.

The Board of Directors has not exercised this power since the Company is listed on the securities markets.

E.11. Indicate whether the company is aware of the policy of institutional investors on participating or not

participating in the company’s decisions:

Yes

No X

Describe the policy

-

E.12. Indicate the URL and means of accessing corporate governance content on your website:

The address is www.ohl.es. http://www.ohl.es/ . “Corporate Governance” can be accessed from the home page.

Click on it to find, among others, the “Annual Corporate Governance Report”.

264


F. Degree of compliance with corporate governance regulations

State the extent to which the Company complies or fails to comply with Unified Code recommendations.

In the event of non-compliance with any of the recommendations, explain the recommendations, rules, practices

or criteria applied by the Company:

1. The bylaws of listed companies should not place an upper limit on the votes that can be cast by a single

shareholder, or impose other obstacles to the takeover of the Company by means of share purchases on the

market.

See subsections: A.9 , B.1.22 , B.1.23 and E.1 , E.2

Complies Explain

2. When a dominant and a subsidiary company are stock market listed, the two should provide detailed

disclosure on:

a) The type of activity they engage in, and any business dealings between them, as well as between the

subsidiary and other group companie.

b) The mechanisms in place to resolve possible conflicts of interest.

See subsections: C.4 and C.7

Complies Partly complies Explain Not applicable

3. Even when not expressly required under company law, any decisions involving a fundamental corporate change

should be submitted to the General Shareholders’ Meeting for approval or ratification, and particularly:

a) The transformation of listed companies into holding companies through the process of ‘subsidiarisation’,

i.e. reallocating core activities to subsidiaries that were previously carried out by the originating firm, even

though the latter retains full control of the former.

b) Any acquisition or disposal of key operating assets that would effectively alter the Company’s corporate

purpose.

c) Operations that effectively add up to the Company’s liquidation.

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Complies Partly complies Explain

4. Detailed proposals of the resolutions to be adopted at the General Shareholders’ Meeting, including the

information stated in Recommendation 28, should be made available at the same time as the publication of

the Meeting notice:

Complies Explain

5. Separate votes should be taken at the General Shareholders’ Meeting on materially separate items, so

shareholders can express their preferences in each case. This rule shall apply in particular to:

a) The appointment or ratification of directors, with separate voting on each candidate.

b) Amendments to the bylaws, with votes taken on all articles or groups of articles that are materially

different.

See subsection: E.8


6. Companies should allow split votes, so financial intermediaries acting as nominees on behalf of different

clients can issue their votes according to instructions:

See subsection: E.4

Complies Explain

7. The Board of Directors should perform its duties with unity of purpose and independent judgement, according

all shareholders the same treatment. It should be guided at all times by the Company’s best interest and, as

such, strive to maximise its value over time.

It should likewise ensure that the Company abides by the laws and regulations in its dealings with stakeholders;

fulfils its obligations and contracts in good faith; respects the customs and good practices of the sectors and

territories where it does business; and upholds any additional social responsibility principles it has subscribed

to voluntarily.


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8. The Board should see the core components of its mission as to approve the Company’s strategy and authorise

the organisational resources to carry it forward, and to ensure that management meets the objectives set while

pursuing the Company’s interests and corporate purpose. As such, the Board in full should reserve the right

to approve:

a) The Company’s general policies and strategies, and in particular:

i) The strategic or business plan, as well as the annual management objectives and budgets.

ii) Investment and financing policy.

iii) Definition of the structure of the corporate group.

iv) Corporate governance policy.

v) Corporate social responsibility policy.

vi) Compensation and performance evaluation policy for senior executives.

vii) Risk control and management policy and periodic monitoring of internal reporting and control

systems.

viii) Dividends and treasury shares policy and, in particular, limits thereon.

See subsections: B.1.10, B.1.13, B.1.14 and D.3

b) The following decisions :

i) At the proposal of the company’s chief executive, the appointment and potential removal of senior

executives, as well as their indemnity clauses.

See subsection: B.1.14

ii) The remuneration of directors, as well as in the case of executive directors, the additional compensation

for their executive functions and other conditions to be fulfilled by their contracts.


iii) The financial information listed companies must periodically disclose.

iv) Investments or operations considered strategic by virtue of their amount or special characteristics,

unless their approval corresponds to the General Shareholders’ Meeting.

v) The creation or acquisition of shares in special purpose vehicles or entities resident in jurisdictions

considered tax havens, and any other transactions or operations of a comparable nature whose

complexity might impair the transparency of the group.

c) Transactions which the Company conducts with directors, significant shareholders, shareholders with Board

representation or other persons related thereto (‘related-party transactions’).

However, Board authorisation need not be required for related-party transactions that simultaneously meet

the following three conditions:

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1. They are governed by standard form agreements applied on an across-the board basis to a large number

of clients.

2. They go through at market rates, generally set by the person supplying the goods or services.

3. Their amount is no more than 1% of the Company’s annual revenues.

It is advisable that related-party transactions should only be approved on the basis of a favourable report from

the Audit Committee or some other committee handling the same function; and that the directors involved

should neither exercise nor delegate their votes, and should withdraw from the meeting room while the Board

deliberates and votes.

Ideally the above powers should not be delegated with the exception of those mentioned in b) and c), which

may be delegated to the Executive Committee in urgent cases and later ratified by the full Board.

See subsections: C.1 and C.6


9. In the interests of maximum effectiveness and participation, the Board of Directors should ideally comprise

no fewer then five and no more than fifteen members:


Complies Explain

10. External, proprietary and independent directors should occupy an ample majority of Board places, while the

number of executive directors should be the minimum practical, bearing in mind the complexity of the corporate

group and the ownership interests they control.

See subsections: A.2 , A.3, B.1.3 and B.1.14


11. In the event that some non-executive director can be deemed neither proprietary nor independent, the

Company should disclose this circumstance and the links that person maintains with the Company or its senior

officers, or its shareholders.


Complies Explain Not applicalble

268


12. That among non-executive directors, the relation between proprietary members and independents should

match the proportion between the capital represented on the Board by proprietary directors and the remainder

of the Company’s capital.

This proportional criterion can be relaxed so the weight of proprietary directors is greater than would strictly

correspond to the total percentage of capital they represent:

1. In large cap companies where few or no equity stakes attain the legal threshold for significant shareholdings,

despite the considerable sums actually invested.

2. In companies with a plurality of shareholders represented on the Board but not otherwise related.

See subsections: B.1.3 , A.2 and A.3

Complies Explain

13. The number of independent directors should represent at least one third of all Board members.


Complies Explain

14. The nature of each director should be explained to the Shareholders’ General Meeting , which will make or

ratify his or her appointment. Such determination should subsequently be confirmed or reviewed in each year’s

Annual Corporate Governance Report, after verification by the Appointments Committee. The said Report should

also disclose the reasons for the appointment of proprietary directors at the urging of shareholders controlling

less than 5% of capital; and explain any rejection of a formal request for a Board place from shareholders whose

equity stake is equal to or greater than that of others applying successfully for a proprietary directorship.

See subsections: B.1.3 and B.1.4


15. When women directors are few or non-existent, the board should state the reasons for this situation and the

measures taken to correct it; in particular, the Appointments Committee should take steps to ensure that:

a) The process of filling Board vacancies has no implicit bias against women candidates.

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b) The Company makes a conscious effort to include women with the target profile among the candidates

for Board places.

See subsections: B.1.2, B.1.27 and B.2.3


16. The Chairman, as the person responsible for the proper operation of the Board of Directors, should ensure

that directors are supplied with sufficient information in advance of Board meetings; and work to procure a good

level of debate and the active involvement of all members, safeguarding their rights to freely express and adopt

positions; he or she should organise and coordinate regular evaluations of the board and, where appropriate,

the Company’s Chief Executive, along with the chairmen of the relevant board committees.



17. When a Company’s Chairman is also its Chief Executive, an independent director should be empowered to

request the calling of Board meetings or the inclusion of new business on the agenda; to coordinate and give

voice to the concerns of non-executive directors; and to lead the Board’s evaluation of the Chairman.



18. The Secretary should take care to ensure that the Board’s actions:

a) Adhere to the spirit and letter of laws and their implementing regulations, including those issued by

regulatory agencies.

b) Observe the Company Bylaws and the Regulations of the General Shareholders’ Meeting, the Board of

Directors and others.

c) Are informed by those good governance recommendations of the Unified Code that the Company has

subscribed to.

In order to safeguard the independence, impartiality and professionalism of the Secretary, his or her appointment

and removal should be proposed by the Appointments Committee and approved by a full Board meeting; and

the relevant appointment and removal procedures being spelled out in the Board’s regulations.

270




19. The Board should meet with the necessary frequency to properly perform its functions, in accordance with

a calendar and agendas set at the beginning of the year, to which each Director may propose the addition of

other items.



20. Director absences should be kept to the bare minimum and quantified in the Annual Corporate Governance

Report. When directors have no choice but to delegate their vote, they should do so with instructions.



21. When directors or the Secretary express concerns about some proposal or, in the case of directors, about

the Company’s performance, and such concerns are not resolved at the Board, the person expressing them can

request that they be recorded in the minute book.


22. The board in full should evaluate the following points on a yearly basis:

a) The quality and efficiency of the Board’s operation.

b) Starting from a report submitted by the Appointments Committee, how well the Chairman and Chief

Executive have carried out their duties.

c) The performance of its Committees on the basis of the reports furnished by the same.



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23. All directors should be able to exercise their right to receive any additional information they require on

matters within the Board’s competence. Unless the Bylaws or Board Regulations indicate otherwise, such

requests should be addressed to the Board Chairman or Secretary.


Complies Explain

24. All directors should be entitled to call on the Company for the advice and guidance they need to carry out

their duties. The Company should provide suitable channels for the exercise of this right, extending in special

circumstances to external assistance at the Company’s expense.


Complies Explain

25. Companies should organise induction programmes for new directors to acquaint them rapidly with the

workings of the Company and its corporate governance rules. Directors should also be offered refresher

programmes when circumstances so advise.


26. Companies should require their directors to devote sufficient time and effort to perform their duties

effectively, and, as such:

a) Directors should apprise the Appointments Committee of any other professional obligations, in case they

might detract from the necessary dedication.

b) Companies should lay down rules about the number of Boards on which their Board members can take

part.



27. The proposal for the appointment or renewal of directors which the Board submits to the General Shareholders’

Meeting, as well as provisional appointments by the method of co-option, should be approved by the Board:

a) On the proposal of the Appointments Committee, in the case of independent directors.

b) Subject to a report from the Appointments Committee in all other cases.

272




28. Companies should post the following director particulars on their websites, and keep them permanently

updated:

a) Professional experience and background.

b) Directorships held in other companies, listed or otherwise.

c) An indication of the director’s classification as executive, proprietary or independent; in the case of

proprietary directors, stating the shareholder they represent or have links with.

d) The date of their first and subsequent appointments as a Company director.

e) Shares held in the Company and any options on the same.


29. Independent directors should not stay on as such for a continuous period of more than 12 years.


Complies Explain

30. Proprietary directors should resign when the shareholders they represent dispose of their ownership interest

in it entirety. If such shareholders reduce their stakes, thereby losing some of their entitlement to proprietary

directors, the latter’s number should be reduced accordingly.

See subsections: A.2, A.3 and B.1.2


31. The Board of Directors should not propose the removal of independent directors before the expiry of their

tenure as mandated by the bylaws, except where just cause is found by the board, based on a proposal from

the Appointments Committee. In particular, just cause will be presumed when a director is in breach of his or

her fiduciary duties or comes under one of the disqualifying grounds enumerated in section III.5 (Definitions)

of this Code.

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The removal of independents may also be proposed when a takeover bid, merger or similar corporate operation

produces changes in the Company’s capital structure, in order to meet the proportionality criterion set out in

Recommendation 12.


Complies Explain

32. Companies should establish rules obliging directors to inform the board of any circumstance that might harm

the organisation’s name or reputation, tendering their resignation as the case may be, with particular mention

of any criminal charges brought against them and the progress of any subsequent trial.

The moment a director is indicted or tried for any of the crimes stated in Article 124 of the Companies Law,

the Board should examine the matter and, in view of the particular circumstances and potential harm to the

Company’s name and reputation, decide whether or not he or she should be called on to resign. The Board

should also disclose all such determinations in the Annual Corporate Governance Report.

See subsections: B.1.43, B.1.44


33. All directors should express clear opposition when they feel a proposal submitted for the Board’s approval

might damage the corporate interest. In particular, independents and other directors unaffected by the conflict

of interest should challenge any decision that could go against the interests of shareholders lacking Board

representation.

When the Board makes material or reiterated decisions about which a director has expressed serious reservations,

then he or she must draw the pertinent conclusions. Directors resigning for such causes should set out their

reasons in the letter referred to in the next Recommendation.

The terms of this Recommendation should also apply to the Secretary of the Board; director or otherwise.

Complies Partly complies Explain Not Applicable

34. Directors who give up their place before their tenure expires, through resignation or otherwise, should state

their reasons in a letter to be sent to all members of the Board. Irrespective of whether such resignation is filed as

a significant event, the motive for the same must be explained in the Annual Corporate Governance Report.

274




35. The Company’s remuneration policy, as approved by its Board of Directors, should specify at least the

following points:

a) Amount of fixed components, with an itemisation, where applicable, of fees for participation at the meetings

of the Board and its Committees and an estimate of the annual fixed remuneration derived therefrom.

b) Variable remuneration components, including:

i) The types of directors they apply to, with an explanation of the relative weight of variable to fixed

remuneration items.

ii) Performance evaluation criteria used to calculate entitlement to the award of shares or share options

or any performance-related remuneration.

iii) The main parameters and grounds for any system of annual bonuses or other non cash benefits.

iv) An estimate of the sum total of variable payments arising from the remuneration policy proposed, as

a function of degree of compliance with pre-set targets or assumptions.

c) The main characteristics of pension systems (for example, supplementary pensions, life insurance and

similar arrangements), with an estimate of their amount or annual equivalent cost.

d) The conditions to apply to the contracts of executive directors exercising senior management functions.

Among them:

i) Duration.

ii) Notice period.

iii) Any other clauses covering hiring bonuses, as well as indemnities or ‘golden parachutes’ in the event

of early termination of the contractual relation between company and executive director.



36. Remuneration comprising the delivery of shares in the Company or other companies in the group, share

options or other share-based instruments, payments linked to the Company’s performance or membership of

pension schemes should be confined to executive directors.

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The delivery of shares is excluded from this limitation when directors are obliged to retain them until the end

of their tenure.

See subsections: A.3, B.1.3

Complies Explain

37. External directors’ remuneration should sufficiently compensate them for the dedication, abilities and

responsibilities that the post entails, but should not be so high as to compromise their independence.

Complies Explain

38. In the case of remuneration linked to Company earnings, deductions should be computed for any

qualifications stated in the external auditor’s report.

Complies Explain Not applicable

39. In the case of variable remunerations, remuneration policies should include technical safeguards to ensure

they reflect the professional performance of the beneficiaries and not simply the general progress of the markets

or the Company’s sector, atypical or exceptional transactions or circumstances of this kind.


40. The board should submit a report on the directors’ remuneration policy to the advisory vote of the General

Shareholders’ Meeting, as a separate point on the agenda. This report can be supplied to shareholders separately

or in the manner the company sees fit.

The report will focus on the remuneration policy the Board has approved for the current year with reference, as the

case may be, to the policy planned for future years. It will address all the points referred to in Recommendation

35, except those potentially entailing the disclosure of commercially sensitive information. It will also identify

and explain the most significant changes in remuneration policy with respect to the previous year, with a global

summary of how the policy was applied over the period in question.

The role of the Remuneration Committee in designing the remuneration policy should be reported to the Meeting,

along with the identity of any external advisors engaged.



276


41. The notes to the annual accounts should list individual directors’ remuneration in the year, including:

a) A breakdown of the compensation obtained by each company director, to include where appropriate:

i) Participation and attendance fees and other fixed director payments.

ii) Additional compensation for acting as chairman or member of a Board committee.

iii) Any payments made under profit-sharing or bonus schemes, and the reason for their accrual.

iv) Contributions on the director’s behalf to defined-contribution pension plans, or any increase in the

director’s vested rights in the case of contributions to defined-benefit schemes.

v) Any severance packages agreed or paid.

vi) Any compensation they receive as directors of other companies in the Group.

vii) The remuneration executive directors receive in respect of their senior management posts.

viii) Any kind of compensation other than those listed above, of whatever nature and provenance within

the Group, especially when it may be accounted a related-party transaction or when its omission would

detract from a true and fair view of the total remuneration received by the director.

b) An individual breakdown of deliveries to directors of shares, share options or other share-based instruments,

itemised by:

i) Number of shares or options awarded in the year, and the terms set for their execution.

ii) Number of options exercised in the year, specifying the number of shares involved and the exercise

price.

iii) Number of options outstanding at the annual close, specifying their price, date and other exercise

conditions.

iv) Any change in the year in the exercise terms of previously awarded options.

c) Information on the relation in the year between the remuneration obtained by executive directors and the

Company’s profits, or some other measure of enterprise results.


42. When the Company has an Executive Committee, the breakdown of its members by director category should

be similar to that of the Board itself. The Secretary of the Board should also act as secretary to the Executive

Committee.



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43. The Board should be kept fully informed of the business transacted and decisions made by the Executive

Committee. To this end, all board members should receive a copy of the Committee’s minutes.

Complies Explain Not applicables

44. In addition to the Audit Committee mandatory under the Securities Market Law, the Board of Directors should

form a committee, or two separate committees, of Appointment and Remuneration.

The rules governing the make-up and operation of the Audit Committee and the Appointment and Remuneration

committee or committees should be set forth in the Board Regulations, and include the following:

a) The Board of Directors should appoint the members of such committees with regard to the knowledge,

aptitudes and experience of its directors and the terms of reference of each Committee; discuss their proposals

and reports; and be responsible for overseeing and evaluating their work, which should be reported to the

first Board plenary following each meeting.

b) These committees should be formed exclusively of non-executive directors and have a minimum of three

members. Executive directors or senior officers may also attend meetings, for information purposes, at the

Committees’ invitation.

c) Committees should be chaired by an independent director.

d) They may engage external advisors, when they feel this is necessary for the discharge of their duties.

e) Minutes of meeting proceedings should be drawn up and a copy sent to all Board members.



45. The job of supervising compliance with internal codes of conduct and corporate governance rules should be

entrusted to the Audit Committee, the Appointments Committee or, as the case may be, separate Compliance

or Corporate Governance Committees.

Complies Explain

46. All members of the Audit Committee, particularly its chairman, should be appointed with regard to their

knowledge and background in accounting, auditing and risk management matters.

278


Complies Explain

47. Listed companies should have an internal audit function, under the supervision of the Audit Committee, to

ensure the proper operation of internal reporting and control systems.

Complies Explain

48. The head of internal audit should present an annual work programme to the Audit Committee; report to it

directly on any incidents arising during its implementation; and submit an activities report at the end of each

year.


49. Control and risk management policy should specify at least:

a) The different types of risk that affect the Company (operational, technology, financial, legal, reputational,

tax, etc) with the inclusion under financial or economic risks of contingent liabilities and other off-balance-

sheet risks.

b) The determination of the risk level the Company sees as acceptable.

c) Measures in place to mitigate the impact of risk events should they occur.

d) The internal reporting and control systems to be used to control and manage the above risks, including

contingent liabilities and off-balance-sheet risks.

See subsection: D


50. The Audit Committee’s role should be:

1. With respect to internal control and reporting systems:

a) Supervise the preparation and the integrity of the financial information on the company and, if applicable,

the group, reviewing compliance with the regulatory requirements, proper delimitation of the scope of

consolidation and correct application of accounting policies.

b) Conduct periodic reviews of risk management and internal control systems, so that the principal risks are

adequately identified, managed and disclosed properly.

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c) Monitor the independence and efficacy of the internal audit function; propose the selection, appointment,

reappointment and removal of the head of internal audit; propose the department’s budget; receive

regular report-backs on its activities; and verify that senior management are acting on the findings and

recommendations of its reports.

d) Establish and supervise a mechanism whereby staff can report, confidentially and, if necessary, anonymously,

any irregularities they detect in the course of their duties, in particular financial or accounting irregularities,

with potentially serious implications for the firm.

2. With respect to the external auditor:

a) Bring before the Board proposals for selection, appointment, re-election and replacement of the external

auditor, as well as the terms of the auditor’s engagement.

b) Receive regular information from the external auditor on the progress and findings of the audit programme,

and check that senior management are acting on its recommendations.

c) Monitor the independence of the external auditor, to which end:

i) The Company should notify any change of auditor to the CNMV as a significant event, accompanied by

a statement of any disagreements arising with the outgoing auditor and the reasons for the same.

ii) The Committee should ensure that the Company and the auditor adhere to current regulations on the

provision of non-audit services, the limits on the concentration of the auditor’s business and, in general,

other requirements designed to safeguard auditors’ independence.

iii) The Committee should investigate the issues giving rise to the resignation of any external auditor.

d) In the case of groups, promote the Group auditor’s assumption of responsibility for audits in the group

companies.

See subsetions: B.1.35, B.2.2, B.2.3 and D.3


51. The Audit Committee should be empowered to meet with any Company employee or manager, even ordering

their appearance without the presence of another senior officer.

Complies Explain

52. The Audit Committee should prepare information on the following points from the Recommendation 8 for

input to board decision-making:

280


a) The financial information listed companies must periodically disclose. The Committee should ensure that

interim statements are drawn up under the same accounting principles as the annual statements and, to this

end, may ask the external auditor to conduct a limited review.

b) The creation or acquisition of shares in special purpose vehicles or entities resident in jurisdictions

considered tax havens, and any other transactions or operations of a comparable nature whose complexity

might impair the transparency of the group.

c) Related-party transactions, except where their scrutiny has been entrusted to some other supervision and

control committee.



53. The Board of Directors should seek to present the annual accounts to the General Shareholders’ Meeting

without reservations or qualifications in the audit report. Should such reservations or qualifications exist, both

the Chairman of the Audit Committee and the auditors should give a clear account to shareholders of their

scope and content.



54. The majority of Appointment Committee members –or Appointment and Remuneration Committee members,

as the case may be– should be independent directors.



55. The Appointment Committee should have the following functions in addition to those stated in earlier

recommendations:

a) Evaluate the balance of skills, knowledge and experience on the Board, define the roles and capabilities

required of the candidates to fill each vacancy, and decide the time and dedication necessary for them to

properly perform their duties.

b) Examine or organise, in appropriate form, the succession of the Chairman and Chief Executive, making

recommendations to the Board so the handover proceeds in a planned and orderly manner.

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c) Report on the senior officer appointments and removals which the Chief Executive proposes to the

Board.

d) Report to the Board on the gender diversity issues discussed in Recommendation 14 of this Code.



56. The Appointment Committee should consult with the Company’s Chairman and Chief Executive, especially

on matters relating to executive directors.

Any Board member may suggest directorship candidates to the Appointment Committee for its consideration.


57. The Remuneration Committee should have the following functions in addition to those stated in earlier

recommendations:

a) Propose to the Board of Directors:

i) The remuneration policy for directors and senior officers.

ii) The individual remuneration and other contractual conditions of executive directors.

iii) The standard conditions for senior officer employment contracts.

b) Oversee compliance with the remuneration policy set by the Company.

See subsections: B.1.14, B.2.3


58. The Remuneration Committee should consult with the Chairman and Chief Executive, especially on matters

relating to executive directors and senior officers.


282


G. Other information of interest

If you consider that there is any material aspect or principle relating to the Corporate Governance practices

followed by your company that has not been addressed in this report, indicate and explain below.

This section can include any other information, clarification or qualification relating to the previous sections

of the report.

In particular, indicate whether the company is subject to any legislation other than the Spanish legislation on

corporate governance, and if so, include the information that it is required to furnish, where such information

differs from that required in this report.

Binding definition of Independent Director:

State whether any independent director has or has had a relation with the Company, its significant shareholders

or its executives, which had it been sufficiently significant or important would have prevented the director from

being considered independent according to section 5 of the Unified Code on Good Governance:

Yes

No X

Name of director Type of relationship Reason

- - -

This Annual Corporate Governance Report was approved by the Company’s Board of Directors at its meeting

held on 31 March 2009.

State if there have been Directors who have voted against or have abstained in relation to the approval of this

Report.

Yes

No X

Name or company name of director voting against this report

Reasons (against, abstention, non-attend-ance)

Explain reasons

- - -

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Management Report

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STATEMENT OF RESPONSIBILITY AND PREPARATION OF MANAGEMENT REPORT

Executives state that, to the best of their knowledge, the Management Report includes a true analysis of Obrascón

Huarte Lain, S.A.’s business evolution, profits/losses and positioning, together with a description of the main

risks and uncertainties faced by the Company.

This Consolidated Management Report was approved by the Board of Directors at its meeting held on 31 March

2009, in view of its verification by Auditors and subsequent approval by the Annual General Shareholders’

Meeting. Such Management Report consists of 66 pages, all of which are signed by the Board of Directors’

Secretary, with this last page, No. 67, including the signature of all the directors.

Mr. Juan-Miguel Villar Mir Mr. José Luis García-Villalba González Mr. Juan Villar-Mir de Fuentes

Mr. Rafael Martín de Nicolás Cañas Mr. Baltasar Aymerich Corominas Mr. Tomás García Madrid

Mr. Javier López Madrid Mr. Juan Luis Mato Rodríguez Saarema Inversiones, S.A., Proxy by: Mr. Joaquín García-Quirós Rodríguez

Mr. Luis Solera Gutiérrez Mr. Jaime Vega de Seoane y Azpilicueta Ms. Silvia Villar-Mir de Fuentes

Mr. Daniel García-Pita Pemán (Board of Directors’ Secretary, non-director)

TURNOVER BREAKDOWN AND PERFORMANCE

EBITDA BREAKDOWN AND PERFORMANCE

PORTFOLIO BREAKDOWN AND PERFORMANCE

Turnover 2008 Turnover 2004 - 2008 (Millions of euros)

EBITDA 2008 EBITDA 2004 - 2008 (Millions of euros)

Portfolio 2008 Portfolio 2004 - 2008 (Millions of euros)

DELEGATION - MEXICOOHL MÉXICO SC, S.A. DE C.V. CONSTRUCTORA PROYECTOS VIALES DE MÉXICO, S.A. DE C.VPaseo de la Refoma, nº 22-25, Piso 22Col. Juárez Delegación Cuauhtémoc 06600 Mexico DF - MEXICOTelephone: +52 55 52 03 09 49Fax: +52 55 52 03 36 92

CONSTRUCTORA TP, S.A.C. Avda. Elmer Faucett 28880 Callao - PERUTelephone: +511 572 08 59Fax: +511 572 00 89

DELEGATION - TURKEYHorasan Sokak, 16 Kat 206700 G.O.P. Ankara - TURKEYTelephone: +90 312 436 53 50Fax: +90 312 436 53 52

OHL CENTRAL EUROPE, a.s.Olšanská , 1ª (Budova Sudopu 7, patro)13080 Praha 3 – CZEHC REPUBLICTelephone: +420 296 761 130Fax: +420 296 761 144

OHL ŽS, a.s.Buresova 938/17660 02 Brno-Stred – CZEHC REPUBLICTelephone: +420 541 571 111Fax: +420 541 212 166

ŽPSV, a.s.Trebízského 207687 24 Uherský Ostroh – CZEHC REPUBLICTelephone: +420 572 419 311Fax: +420 572 419 308

TSS, a.s. Jicinska 1605 501 01 Hradec Králové – CZEHC REPUBLICTelephone: +420 972 342 210Fax: +420 972 342 202

OHL USA, INC405 SW 148th Avenue. Suite OneDavie, Florida 33325 - USATelephone: +1 954 476 3200Fax: +1 954 476 3230

ARELLANO CONSTRUCTION CO 7051 S.W. 12th street Miami, Florida 33144 - USATelephone: +3 059 949 901Fax: +3 059 949 903

COMMUNITY ASPHALT CORP.14005 NW 186th StreetHialeah, Florida 33018 - USATelephone: +1 305 829 0700Fax: +1 305 829 8772

TOWER-OHL GROUP405 SW 148th Avenue. Suite OneDavie, Florida 33325 - USATelephone: +1 954 476 3200Fax: +1 954 474 3111

OHL CONSTRUCTION CANADA, INC 1440 St. Catherine Street West - Suite 310 Montreal, PQ H3G 1R8 - CANADATelephone: +514 394 0865Fax: +514 394 9454

DELEGATION - ARGENTINASuipacha, 1380, Piso 5ºC10 11ACD Buenos Aires - ARGENTINATelephone: +54 11 43 94 07 70Fax: +54 11 43 94 07 87

DELEGATION - ECUADORAvda. Amazonas, E3-131 y Pasaje GuayasEdif. Rumiñahui, oficina 701 17-07-9290 Quito - ECUADORTelephone: +593 22 25 03 27Fax: +593 22 92 05 39

DELEGATION - ALGERIALotissement Mimosas, Villa nº7 - Ben AknounArgel (ALGERIA)Telephone: +213 17 03 11 31 Fax: +213 21 91 40 83

OHL INDUSTRIAL OHL INDUSTRIAL, S.L. Paseo de la Castellana 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 353 12 00Fax: +34 91 345 75 06

ATMOS ESPAÑOLA, S.A.Paseo de la Castellana, 178 bis 28046 Madrid Telephone: +34 (91) 353 12 00Fax: +34 (91) 345 75 06

CHEMTROL PROYECTOS Y SISTEMAS, S.L. Félix Boix, 328036 MadridTelephone: +34 (91) 353 23 40Fax: +34 (91) 343 04 91

ECOLAIRE ESPAÑA, S.A.Paseo de la Castellana, 178 bis 28046 MadridTelephone: +34 (91) 345 75 06Fax: +34 (91) 345 75 06

PROYECTOS Y SISTEMAS, S.A. Paseo de la Castellana, 178 28046 MadridTelephone: +34 (91) 353 12 00Fax: +34 (91) 345 75 06

OHL CONCESSIONS OHL CONCESIONES, S.L.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTeléfono: +34 91 348 41 00Fax: +34 91 348 45 79

SPAIN

AUTOPISTA EJE AEROPUERTO, C.E.S.A. Área de Servicio “Valdebebas”Autopista M-12, P.K. 4 (sentido Sur)28042 MadridTelephone: +34 91 301 70 00Fax: +34 91 301 70 07

EUROGLOSA 45, C.C.A. DE MADRID, S.A. Autopista M-45 P.K. 5,7 Ramal Parque Sur s/n28914 Leganés (Madrid)Telephone: +34 91 682 92 90Fax: +34 91 688 33 99

AUTOVÍA DE ARAGÓN TRAMO 1, S.A.Paseo de la Castellana, 259 D, Torre Espacio28046 MadridTelephone: +34 91 348 41 00Fax: +34 91 348 45 79

CERCANÍAS MÓSTOLES NAVALCARNERO, S.A.Avda. Europa, 2 Edificio Alcor, Plaza B, Planta 0-Ala oeste28046 Alcorcón (Madrid)Telephone: +34 91 689 06 64Fax: +34 91 348 45 79

METRO LIGERO OESTE, S.A.Edgar Neville, s/n, Ciudad de la Imagen28223 Pozuelo de Alarcón (Madrid)Telephone: +34 91 503 16 00Fax: +34 91 503 16 90

TERMINALES MARÍTIMAS DEL SURESTE, S.A. Nuevo Acceso Poniente al Puerto de Alicante frente al Muelle nº 17, s/n 03008 AlicanteTelephone: +34 96 598 49 23Fax: +34 96 592 37 89 MARINA UROLA, S.A. Barrio Santiago, s/n, Edificio Capitanía, Puerto Deportivo 20750 Zumaia (Guipúzcoa)Telephone: +34 943 86 09 38 Fax: +34 943 14 32 99

NAUTIC TARRAGONA, S.A. Port Esportiu, Local Capitanía, s/n 43004 TarragonaTelephone: +34 977 21 31 00Fax: +34 977 21 27 02

NOVA DÁRSENA ESPORTIVA DE BARÁ, S.A.Plaza Mediterráno, s/n - Apdo. de correos nº 5043883 Roda de Bará (Tarragona)Telephone: +34 977 13 81 69

PORT TORREDEMBARRA, S.A. Edificio Capitanía43830 Torredembarra (Tarragona)Telephone: +34 977 64 32 34Fax: +34 977 64 32 36

INTERNATIONAL

OHL CONCESIONES ARGENTINA, S.A.Av. de Mayo, 1437, 5º Piso, Dpto. J1085 Ciudad de Buenos Aires - ARGENTINATelephone: +54 11 43 71 04 66Fax: +54 11 43 82 36 31

AEC, S.A. Ricchieri Av. San MartínB1768DJA Ciudad MaderoProv. de Buenos Aires -ARGENTINATelephone: +54 11 44 62 06 61Fax: +54 11 44 62 12 42

OHL BRASIL, S.A.Rua Joaquim Floriano 913, 6º Piso. Itaim Bibi04534-013 São Paulo - BRAZILTelephone: +55 11 30 74 24 04Fax: +55 11 30 74 24 05

AUTOVIAS, S.A. Bairro Jardim Jóquei ClubeRodovia Anhanguera, km 312,2. Pista Norte14079-000 Ribeirão Preto - São Paulo -BRAZILTelephone: +55 16 21 02 42 00Fax: +55 16 21 02 42 50

CENTROVIAS, S.A. Rodovia Washington Luís, Km 216,8 - Pista Sul 13530-000 Itirapina - São Paulo - BRAZILCaixa Postal 204113574-970 São Carlos - São PauloTelephone: +55 16 33 63 83 00 Fax: +55 16 33 72 07 55

INTERVIAS, S.A. Rodovia Anhanguera, Km. 168 Pista Sul13602-040 Ararás - São Paulo - BRAZILTelephone: +55 19 35 43 60 00Fax: +55 19 35 43 60 14 VIANORTE, S.A. Rodovia Attilo Balbo Km 327,5 – Pista Leste14173-000 Sertãozinho - São Paulo - BRAZILTelephone: +55 16 36 01 11 22 Fax: +55 16 36 01 11 00

AUTOPISTA FLUMINENSE, S.ABR 101- Km 269,5 - Pista Norte - Bairro BasílioRio Bonito / RJ, 28.800-000 - BRAZILTelephone: +55 21 27 34 88 88Fax: +55 21 27 34 85 35

AUTOPISTA FERNÃO DIAS, S.AAv. Prefeito Olavo Gomes de Oliveira, 676037550-000 - Pouso Alegre / MG - BRAZILTelephone /Fax: +55 35 34 25 82 33

AUTOPISTA RÉGIS BITTENCOURT, S.ARodovia SP 139, nº 226 - Bairro Cecap11900-000 – Registro / SP - BRAZILTelephone /Fax: +55 13 38 28 16 00

AUTOPISTA LITORAL SUL, S.A.Rua Nilo Peçanha n.º 680 - Bairro Fazendas89211-400 - Joinville / SC - BRAZILTelephone: +55 47 31 77 07 00Fax: +55 47 34 33 47 05

AUTOPISTA PLANALTO SUL, S.A.Av. Alfonso Petschow n º 4040 - Bairro Indústria83880-000 - Rio Negro / PR - BRAZILTelephone: +55 47 36 41 53 11Fax: +55 47 36 41 53 25

AUTOPARK, S.A.Av. Brigadeiro Faria Lima, 2894 CEP 01451-938Jardim Paulistano – SP - BRAZILTelephone: +55 11 3079 1775

OHL CONCESIONES CHILE, S.A.Monjitas, 392. Piso 17, Edificio El Comercio8320113 Santiago de Chile - CHILETelephone: +56 27 14 23 00Fax: +56 27 14 23 25

AUTOPISTA DEL SOL, S.A. AUTOPISTA LOS LIBERTADORES, S.A.Monjitas, 392. Piso 6, Edificio El Comercio8320113 Santiago de Chile – CHILETelephone: +56 27 14 23 50Fax: +56 27 14 23 51

AUTOPISTA LOS ANDES, S.A. Monjitas, 392. Piso 17, Edificio El Comercio8320113 Santiago de Chile - CHILETelephone: +56 27 14 23 00 Fax: +56 27 14 23 25

OHL INFRASTRUCTURE, INC. 5914 Wets Courtyard Drive, Suite 160 Austin, Texas 78730 - USATelephone: +1 512 860 38 50Fax: +1 512 860 38 51

OHL CONCESIONES MÉXICO, S.A. de C.V. CONCESIONARIA MEXIQUENSE, S.A. DE C.V.AUTOVÍAS CONCESIONADAS OHL, S.A. DE C.V.VIADUCTO BICENTENARIO, S.A. DE C.V.Avda. Paseo de la Reforma nº 222 - Piso 25 Col. Juárez Delegación Cuauhtémoc 06600 Mexico DF – MEXICOTelephone: +52 55 52 55 52 50 Fax: +52 55 52 03 36 92

GANA, S.A. Avda. Paseo de la Reforma nº 222 - Piso 25 Col. Juárez Delegación Cuauhtémoc 06600 Mexico DF - MEXICOTelephone: +52 55 52 55 57 27Fax: +52 55 52 03 36 92

AMAIT, S.A.San Pedro TotoltepecToluca International Aeroport Toluca, State of Mexico, 50226 - MEXICOTelephone: +52 72 22 73 15 44 Fax: +52 72 22 73 03 81

AUTOPISTA DEL NORTE, S.A.C.Av. Víctor A. Belaúnde 147, Vía Principal 140 Edificio Real Seis, Piso 7Centro Empresarial Real San IsidroLima 27 - PERUTelephone: +51 12 11 26 39Fax: +51 12 11 25 26

OHL ENVIRONMENTOHL MEDIO AMBIENTE, INIMA, S.A.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 48 94Fax: +34 91 348 47 79

DELEGATION - BRAZILAMBIENT SERVIÇOS AMBIENTAIS DE RIBEIRÃO PRETO, S.A.Rodovia Alexandre Balbo SP 328, km. 334,6Ribeirão Preto SP-CEP 14062-800 - BRAZILTelephone: +55 16 39 62 81 00Fax: +55 16 39 62 81 06

OHL MEDIO AMBIENTE, INIMA BRASIL, LTDARua Joaquim Floriano, 913 ,6º Andar, Sala 02-Itaim Bibi CP 04534 - 013 São Paulo - BRAZILTelephone: +011 30 44 41 33Fax: +011 30 44 41 33

SERVIÇOS DE SANEAMIENTO DE MOGI MIRIM, S.A. Rua Orlando Pacini nº194 Jardim Mello Bairro Santa Cruz CEP 13800 - 382 Mogi Mirim - BRAZILTelephone: +55 16 39 62 81 00

DELEGATION - CHILEINIMA CHILE, LTDAOficina Valparaíso, 050La Chimba BajoAntofagasta - CHILETelephone: +56 55 21 42 97 Fax: +56 55 21 42 96

DESALINIZADORA ARICA, LTDA (DESALARI)Rivera Sur, s/n Valle de Lluta, Casilla 50DArica - CHILETelephone: +56 58 21 72 80Fax: +56 58 21 04 41

TRACTAMENT METROPOLITÁ DE FANGS, S.L.Rambla Prim, s/n08019 Barcelona - SPAINTelephone: +34 93 446 66 17Fax: +34 93 455 16 04

INIMA USA CORPORATIONINIMA USA CONSTRUCTION CORPAQUARIA WATER LLCMetro South Executive Park 1115 West Chestnut Suite 204 - BrocktonMassachusetts 02301 - USATelephone: +50 84 27 99 74 Fax: +50 84 27 55 47

DELEGACIÓN - MEXICOINIMA DE MÉXICO, S.A.Paseo de la Refoma, nº 222 Piso 22Col. Juárez Delegación Cuauhtémoc06600 Mexico DF – MEXICOTelephone: +52 55 52 03 09 49Fax: +52 55 52 03 36 92

PROMOAQUA DESALACIÓN DE LOS CABOS, S.A. DE C.V.Prolongación Paseo San Lucas, s/n Colonia Los Cangrejos, Cabo San LucasBaja California Sur (B.C.S.) - MEXICOTelephone: +52 62 41 73 04 77Fax: +52 62 41 22 02 68

DELEGATION - ALGERIASHARIKET TAHLYAT MIYAH MOSTAGANEM, SPA (STMM, SPA)SHARIKET MIYEH RAS DJINET, SPA (SMD, SPA)Cite Abdpuni, Ilot nº 36Dar El Beida – Alger (ALGÉRIE)Telephone: +213 21 37 14 49Fax: +213 21 37 14 35

OHL DEVELOPMENTOHL DESARROLLOS, S.L.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 42 95Fax: + 34 91 348 46 84

DELEGATION - MEXICOPaseo de la Reforma nº 222, Piso 23Col. Juárez, Delegación Cuauhtémoc06600 Mexico DF – MEXICOTelephone: +52 55 5955 7382Fax: +52 55 52 03 33 40

GASTRONÓMICA SANTA FEPaseo de la Reforma nº 222, Piso 23Col. Juárez, Delegación Cuauhtémoc06600 Mexico DF – MEXICOTelephone: +52 55 5955 7384Fax: +52 55 5250 0168

OHL DESARROLLOS MÉXICO, S.A. DE C.V.HUARIBE, S.A. DE C.V.INMOBILIARIA MAYALUUM, S.A. DE C.V. GOLF DE MAYAKOBA, S.A. DE C.V.ISLAS DE MAYAKOBA, S.A. DE C.V.LAGUNAS DE MAYAKOBA, S.A. DE C.V.OPERADORA HOTELERA DEL CORREDOR MAYAKOBA, S.A. DE C.V.OPERADORA MAYAKOBA, S.A. DE C.V.AQUA DE MAYAKOBA, S.A. DE C.V.VICEROY RESORTS MAYAKOBA, S.R.L. DE C.V.VILLAS DE MAYAKOBA, S.A. DE C.V.VIVEROS DE MAYAKOBA, S.A. DE C.V.MARINA MAYAKOBA, S.A. DE C.V.Ctra. Federal Chetumal-Puerto Juárez, Km 298. Riviera Maya77710 Playa del Carmen Solidaridad, Quintana Roo - MEXICOTelephone: +52 984 873 4900Fax: +52 984 873 4901

COMERCIAL PASEO SAN FRANCISCO, S.A. DE C.V.BAJA PUERTO ESCONDIDO, S.A. DE C.V.Arroyo Xonaca 1006 (Mall Administrative Offices)Col. El Alto Puebla72000 Puebla - MEXICOTelephone: +52 222 246 5381Fax: +52 222 246 5951

Major Companies of the OHL GroupParent Company of the OHL Grup

OBRASCÓN HUARTE LAIN, S.A.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 41 00Fax: + 34 91 348 44 63www.ohl.es

OHL DOMESTIC CONSTRUCTIONAGRUPACIÓN GUINOVART OBRAS Y SERVICIOS HISPANIA, S.A. (G&O)Mas Casanovas, 46-6408025 BarcelonaTelephone: +34 93 446 60 00Fax: +34 93 456 16 04

ASFALTOS Y CONSTRUCCIONES ELSAN, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 384 74 00Fax: 91 767 14 77

ASTRAL FACILITIES MANAGEMENT, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 774 70 00Fax: +34 91 774 70 86

CONSTRUCCIONES ADOLFO SOBRINO, S.A.Pº Portuetxe, 8328018 San SebastiánTelephone: +34 943 31 02 44Fax: +34 943 31 01 84

CONSTRUCCIONES ENRIQUE DE LUIS, S.A. (CELSA)Edificio Aída, c/ Madre Rafols, 250004 ZaragozaTelephone: +34 976 44 72 74Fax: +34 976 28 38 72

ELECTRIFICACIONES Y MONTAJES INTEGRALES OHL, S.A.Orense, 6 28020 MadridTelephone: +34 91 417 82 60Fax: +34 91 598 04 45

INGESAN, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 774 70 00Fax: +34 91 774 70 86

MORKAITZ, S.A.Plaza Circular, 4 - 5ª planta48001 BilbaoTelephone: +34 94 401 64 46Fax: +34 94 401 64 48

PACSA SERVICIOS URBANOS Y DEL MEDIO NATURAL, S.A.Enrique Larreta, 1028036 MadridTelephone: +34 91 384 74 30Fax: +34 91 384 74 05

S.A. DE TRABAJOS Y OBRAS (SATO) Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid Telephone: +34 91 383 73 10Fax: +34 91 383 16 31

OHL INTERNATIONAL CONSTRUCTION OHL CONSTRUCCIÓN INTERNACIONAL, S.L.OHL CONSTRUCCIÓN INTERNACIONAL, S.L.Paseo de la Castellana, 259 D, Torre Espacio28046 Madrid - SPAINTelephone: +34 91 348 43 20Fax: +34 91 348 41 71

DELEGATION - CHILEOHL ANDINA, S.A.SOCIEDAD CONCESIONARIA CENTRO DE JUSTICIA DE SANTIAGO, S.A.Monjitas, 392 – Piso 20Santiago de Chile – CHILETelephone: +56 2731 94 00Fax: +56 2731 94 02

0

1,000

2,000

3,000

4,000

5,000

20082007200620052004

3,278

2,2252,443

3,7644,009

0

100

200

300

400

500

600

700

20082007200620052004

489

248285

543

608

0

10,000

20,000

30,000

40,000

50,000

60,000

20082007200620052004

31,783

16,467

22,622

38,058

59,068

45%



Industrial (0%)

Environment

Development

36%

13%

3% 3%

Concessions

20%



Industrial (0%)

Environment

Development

56%

3% 3%

18%

Concessions

5%



Industrial (0%)

Development (0%)

85%

5% 5%

Concessions

Environment

284


Managed and published by:

OHL Group

Paseo de la Castellana, 259 D, Torre Espacio - 28046 Madrid

Tel.: +34 91 348 41 00

www.ohl.es

Coordination and production:

IPPI Comunicación

Design: C.A.M.

Paseo de la Castellana, 154 - 28046 Madrid

Tel.: +34 91 314 81 78

www.ippi.es

National book category number: M-31293-2009

OH

L G

roup

Ann

ual R

epor

t 20

08


2008

Data Highlights 2008OHL Group

2008 % 2007 % % 08/07

Economic Data

Millions of euros

Annual turnover 4,008.8 100.0 3,764.4 100.0 6.5

Gross operating income (EBITDA) 607.6 15.2 542.9 14.4 11.9

Net operating income (EBIT) 422.7 10.5 373.7 9.9 13.1

Net attributable income 150.7 3.8 140.5 3.7 7.3

Parent company net shareholders' equity 422.4 608.4 -30.6

Operational Data

Millions of euros

Portfolio breakdown

Short-term portfolio 6,023.6 10.2 5,302.2 13.9 13.6

Long-term portfolio 53,044.6 89.8 32,756.0 86.1 61.9

Total portfolio 59,068.2 100.0 38,058.2 100.0 55.2

Turnover breakdown

Domestic Construction 1,786.4 44.6 1,973.9 52.4 -9.5

International Construction 1,429.1 35.7 1,162.2 30.9 23.0

Industrial 25.5 0.6 - - -

Concessions 542.4 13.5 435.5 11.6 24.5

Environment 119.9 3.0 116.8 3.1 2.7

Development 105.5 2.6 76.0 2.0 38.8

Total turnover 4,008.8 100.0 3,764.4 100.0 6.5

Human resources (employees at year end )

Full time 14,037 68.3 10,030 71.3 40.0

Temporary 6,520 31.7 4,039 28.7 61.4

Total personnel 20,557 100.0 14,069 100.0 46.1

Ratios

Gross operating income (EBITDA) / Turnover 15.2% 14.4%

Net operating income (EBIT) / Turnover 10.5% 9.9%

Gross income / Turnover 6.7% 6.1%

Net attributable income / Turnover 3.8% 3.7%

ROE (Net attributable income / Parent company average net shareholders’ equity)

29.2% 24.4%

Data per Share (euros)

Share price at close of year 9.96 23.03

Gross dividend per share 0.4306 0.4013

Annual revaluation -56.75% -1.58%

Net attributable income 1.74 1.61

Number of shares at close of year 87,492,055 87,492,055

www.ohl.es

· ohl group annual report 2008 ohl group annual report 2008 data highlights 2008 ohl group 2008 %...

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