criteria caixaholding, s.a.u. and subsidiaries · net gains on financial transactions (note 17.2)...

Criteria CaixaHolding, S.A.U. and Subsidiaries

Consolidated financial statements and consolidated directors' report

for the year ended 31 December 2013

(prepared in accordance with International Financial Reporting Standards)

Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 27). In the event of a

discrepancy, the Spanish-language version prevails.

* * * * *

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CONTENTS

Consolidated balance sheets .................................................................................................. 3

Consolidated income statements ............................................................................................. 5

Consolidated statements of comprehensive income ...................................................................... 6

Consolidated statements of changes in equity ............................................................................. 7

Consolidated statements of cash flows ...................................................................................... 8

Notes to the financial statements

1. Group activities and general information ........................................................................... 9

2. Basis of presentation and basis of consolidation .................................................................. 10

3. Accounting policies .................................................................................................... 24

4. Goodwill and other intangible assets .............................................................................. 38

5. Property, plant and equipment ...................................................................................... 40

6. Investment property .................................................................................................. 42

7. Investments accounted for using the equity method ............................................................ 43

8. Financial assets ........................................................................................................ 49

9. Inventories ............................................................................................................. 52

10. Non-current assets classified as held for sale ..................................................................... 53

11. Cash and cash equivalents ........................................................................................... 55

12. Equity ................................................................................................................... 55

13. Long-term provisions ................................................................................................. 59

14. Financial liabilities at amortised cost ............................................................................... 60

15. Other non-current liabilities ......................................................................................... 63

16. Tax matters and income tax ......................................................................................... 65

17. Income and expenses ................................................................................................. 68

18. Notes to the consolidated statements of cash flows ............................................................. 73

19. Fair value ............................................................................................................... 74

20. Risk management policy .............................................................................................. 75

21. Contingencies and obligations ....................................................................................... 79

22. Segment reporting .................................................................................................... 79

23. Related party disclosures ............................................................................................. 81

24. Other salient information ............................................................................................ 90

25. Information on the environment and corporate responsibility ................................................. 91

26. Events after the reporting period ................................................................................... 91

27. Explanation added for translation to English .............................................................................................. 92

APPENDIX I Investments in Group companies ............................................................................. 93

APPENDIX II Investments in jointly controlled entities and associates ................................................. 94

APPENDIX III Available-for-sale financial assets - Equity instruments .................................................. 95

Consolidated directors' report

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Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 27). In the event of a discrepancy, the Spanish-language version prevails.

CRITERIA CAIXAHOLDING, S.A.U. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2013 AND 2012 (notes 1 to 3)

Thousands of euros

ASSETS Notes 2013 2012(*)

NON-CURRENT ASSETS

Goodwill and other intangible assets (Note 4) 746,916 802,775

Property, plant and equipment (Note 5) 116,214 151,711

Investment property (Note 6) 1,170,945 1,131,077

Investments accounted for using the equity method (Note 7) 7,278,655 7,487,244

Financial assets (Note 8) 41,986 154,908

Available-for-sale financial assets 15,084 33,912

Loans, receivables and other financial assets 26,902 120,996

Deferred tax assets (Note 16) 1,063,533 1,081,324

Total non-current assets 10,418,249 10,809,039

CURRENT ASSETS

Non-current assets classified as held for sale (Note 10) 1,243,924 1,290,733

Inventories (Note 9) 798,372 1,145,228

Current financial assets (Note 8) 104,581 184,402

Other current assets 153,001 160,142

Tax assets (Note 16) 17,239 23,291

Dividends receivable 135,762 136,773

Other current assets - 78

Cash and cash equivalents (Note 11) 372,941 283,473

Total current assets

2,672,819 3,063,978

TOTAL ASSETS 13,091,068 13,873,017

The accompanying Notes 1 to 27 and the Appendices are an integral part of the consolidated balance sheet at 31 December 2013.

(*) The figures at 31 December 2012 are presented for comparison purposes only.

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Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting

framework applicable to the Group (see Notes 2 and 27). In the event of a discrepancy, the Spanish-language version prevails.


CONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2013 AND 2012 (notes 1 to 3)

Thousands of euros

EQUITY AND LIABILITIES Notes 2013 2012(*)

EQUITY:

Share capital, reserves and profit (Note 12) 8,944,345 9,189,854

Share capital 1,381,520 3,225,000

Share premium - 5,463,285

Reserves 7,172,121 444,623

Profit attributable to the Group 471,704 56,946

Interim dividend paid (81,000) -

Valuation adjustments (Note 12) (128,106) (44,610)

Non-controlling interests (Note 12) 375,465 383,355

Total equity 9,191,704 9,528,599

NON-CURRENT LIABILITIES:

Long-term provisions (Note 13) 172,988 192,044

Non-current payables (Note 14) 3,066,178 2,124,348

Deferred tax liabilities (Note 16) 346,540 362,947

Other non-current liabilities 28,868 124,715

Derivatives (Note 15.1) 13,734 23,624

Other non-current liabilities (Note 15.2) 15,134 101,091

Total non-current liabilities 3,614,574 2,804,054

CURRENT LIABILITIES:

Financial liabilities at amortised cost (Note 14) 251,701 1,409,484

Bank borrowings 75,082 1,375,690

Other financial liabilities 176,619 33,794

Derivative financial instruments (Note 15.1) 48 383

Tax liabilities (Note 16) 8,906 109,210

Deferred income 17,097 14,582

Other current liabilities 7,038 6,705

Total current liabilities 284,790 1,540,364

TOTAL EQUITY AND LIABILITIES 13,091,068 13,873,017

The accompanying Notes 1 to 27 and the Appendices are an integral part of the consolidated balance sheet at 31 December 2013.

(*) The figures at 31 December 2012 are presented for comparison purposes only.

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CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012

(notes 1 to 3)

Thousands of euros

Notes 2013 2012(*)

CONTINUING OPERATIONS

Revenue (Note 17.1) 349,415 283,742

Result of companies accounted for using the equity method (Note 7) 680,502 819,854

Net gains on financial transactions (Note 17.2) 3,559 -

Net gains on transactions with Group companies, jointly controlled entities and associates (Note 17.3) 204,891 92,974

Staff costs (Note 17.4) (74,767) (73,091)

Depreciation and amortisation charge (Note 17.5) (73,065) (68,718)

Net impairment losses (Note 17.6) (300,686) (834,592)

Other operating expenses (Note 17.7) (168,109) (141,955)

Net provisions recognised (Note 13) 205 -

Other gains (Note 17.8) 49,660 52,472

Other losses (Note 17.8) (70,125) (181,652)

PROFIT (LOSS) FROM OPERATIONS 601,480 (50,966)

Finance income 11,871 14,084

Finance costs (Note 14) (164,916) (172,815)

FINANCIAL LOSS (153,045) (158,731)

PROFIT (LOSS) BEFORE TAX 448,435 (209,697)

Income tax (Note 16.2) 44,288 312,369 PROFIT FROM CONTINUING OPERATIONS 492,723 102,672

Profit from discontinued operations - - CONSOLIDATED PROFIT FOR THE YEAR 492,723 102,672

Profit attributable to non-controlling interests (Note 12.6) (21,019) (45,726) PROFIT ATTRIBUTABLE TO THE GROUP 471,704 56,946

The accompanying Notes 1 to 27 and the Appendices are an integral part of the consolidated income statement for 2013.

(*) The figures for 2012 are presented for comparison purposes only.

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Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting

framework applicable to the Group (see Notes 2 and 27). In the event of a discrepancy, the Spanish-language version prevails.


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012

(notes 1 to 3)

Thousands of euros

Notes 2013 2012(*)

Consolidated profit per income statement 492,723 102,672

Items that will be reclassified subsequently to profit or loss (86,932) (27,672)

Available-for-sale financial assets (Note 12.4) (12,707) 16,159

Revaluation gains (losses) (6,499) 16,159

Amounts transferred to profit or loss (6,208) -

Cash flow hedges (Note 12.4) 6,133 (9,089)

Revaluation gains (losses) 6,133 (8,445)

Amounts transferred to profit or loss - (644)

Translation differences (Note 12.4) (2,040) 357

Revaluation gains (losses) (2,040) 357

Amounts transferred to profit or loss - -

Companies accounted for using the equity method (Note 12.4) (78,492) (37,244)

Revaluation gains (losses) (65,726) (36,104)

Amounts transferred to profit or loss (12,766) (1,140)

Tax effect (Note 12.4) 194 2,145

Items that will not be reclassified subsequently to profit or loss - -

COMPREHENSIVE INCOME FOR THE YEAR 405,791 75,000

Profit attributable to non-controlling interests (Note 12.6) (21,019) (45,726)

Other comprehensive income attributable to non-controlling interests

(Note 12.6) 3,436 (652)

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS

(17,583) (46,378)

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE GROUP 388,208 28,622

The accompanying Notes 1 to 27 and the Appendices are an integral part of the consolidated statement

of comprehensive income for 2013.


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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013 AND 2012

(notes 1 to 3)

Thousands of euros

Share capital

Uncalled capital

Share premium and reserves

Interim dividend

Profit for the year

attributable to the Parent

Total share capital,

reserves and profit

Valuation adjustments

Non-controlling interests

Total equity

Balance at 31/12/11 3,225,000 - 6,363,910 - 200,884 9,789,794 (16,286) 344,893 10,118,401

Comprehensive income for the year - - -

- 56,946 56,946 (28,324) 46,378 75,000

Final dividend for 2012 - - - - (102,565) (102,565) - - (102,565) Distribution of share premium - - (497,435)

- - (497,435) - - (497,435)

Transfers between equity items - - 98,319

- (98,319) - - - -

Other changes - - (56,886) - - (56,886) - (7,916) (64,802)

Balance at 31/12/12 3,225,000 - 5,907,908 - 56,946 9,189,854 (44,610) 383,355 9,528,599

Comprehensive income for the year

- - - - 471,704 471,704 (83,496) 17,583 405,791

2013 interim dividend - - - (81,000) - (81,000) - - (81,000)

Distribution of share premium

- - (584,000) - - (584,000) - - (584,000)

Transfers between equity items (Note 12)

(1,843,480) - 1,900,426 - (56,946) - - - -

Other changes - - (52,213) - - (52,213) - (25,473) (77,686)

Balance at 31/12/13 1,381,520 - 7,172,121 (81,000) 471,704 8,944,345 (128,106) 375,465 9,191,704

The accompanying Notes 1 to 27 and the Appendices are an integral part of the consolidated statement of changes in equity for 2013.


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Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 27).

In the event of a discrepancy, the Spanish-language version prevails.


CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012

(notes 1 to 3)

Thousands of euros

Notes 2013 2012(*)

1. Cash flows from operating activities 2,473 (78,971)

Profit (loss) before tax 448,435 (209,697)

Adjustments for (Note 18) (338,337) 278,393

Changes in working capital (Note 18) (661) 4,355

Other amounts received/(paid) relating to operating activities (1,881) 5,243

Interest paid (174,344) (134,697)

Tax recovered (paid) 69,261 (22,568)

2. Cash flows used in investing activities 1,114,410 883,273

Interest received 18,199 6,449

Dividends received 438,424 449,768

Payments due to Investment (-) (124,384) (284,612)

- Group companies, joint ventures and associates (4,199) -

- Property, plant and equipment, investment property and other intangible assets (48,334) (50,492)

- Available-for-sale financial assets - (1,438)

- Non-current assets classified as held for sale (33,893) (192,906)

- Loans granted (37,958) (39,776)

Proceeds from disposal (+) 782,171 711,668

- Group companies, joint ventures and associates 543,596 194,807

- Property, plant and equipment, investment property and other intangible assets 27,379 43,439

- Available-for-sale financial assets 8,042 1,371

- Repayment of loans granted 109,204 32,233

- Non-current assets classified as held for sale 93,950 439,818

3. Cash flows from financing activities (1,027,415) (762,262)

Dividends paid (81,000) (102,565)

Distribution of reserves (584,000) (497,435)

Loans obtained 958,735 1,659,391

Repayment of loans obtained (1,321,750) (1,821,653)

NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS 89,468 42,040

Cash at beginning of year 283,473 241,433

Cash at end of year 372,941 283,473

Cash generated (used) in the year 89,468 42,040

The accompanying Notes 1 to 27 and the Appendices are an integral part of the consolidated statement of cash flows for 2013.


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Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 2 and 27). In the event of a discrepancy,

the Spanish-language version prevails.


Notes to the consolidated financial statements

for the year ended 31 December 2013

1. Group activities and general information

Criteria CaixaHolding, S.A.U. ("Criteria", "Criteria CaixaHolding" or "the Parent") and its subsidiaries make up the Criteria CaixaHolding Group ("the Group"). The registered office of Criteria CaixaHolding, S.A.U. is at Avenida Diagonal, 621-629, Barcelona.

Criteria CaixaHolding, S.A.U., formerly Servihabitat XXI, S.A.U. (and prior to that Gestora de Microfinances, S.A.U.), was incorporated on 16 December 2003. The resolutions adopted by the Board of Directors on 16 July 2007 whereby the company name was changed from Gestora de Microfinances, S.A.U. to Servihabitat XXI, S.A.U. were executed in a public deed on 25 July 2007.

The merger by absorption of Servihabitat XXI, S.A.U. and Criteria CaixaHolding, S.A.U. took place on 18 December 2013. In this regard, Criteria (the absorbed company) owned directly all the shares of Servihabitat XXI (the absorbing company). The structure chosen was therefore that of a so-called "downstream merger”, whereby a subsidiary absorbs its parent. From the material legal and financial standpoint it makes no difference whether one or other structure is used, since in both cases the post-merger company has both, in completely equal terms, the assets and liabilities of Criteria (the absorbed company) and those of Servihabitat XXI (the absorbing company). Also, as a result of the merger, the absorbing company's name adopted the name of the absorbed company (Criteria CaixaHolding, S.A.U.).

Caixa d’Estalvis i Pensions de Barcelona (”la Caixa”) is the Parent's sole shareholder.

The object of Criteria CaixaHolding, per Article 2 of its bylaws, is to carry on the following business activities:

a) the acquisition, sale and management of marketable securities and equity interests in other companies (with both officially listed and unlisted securities);

b) the administration and management of companies and the management and administration of securities representing the equity of entities resident in Spain and non-resident entities;

c) the provision of financial, tax, technical, stock market and any other advisory services;

d) the performance of activities as consultants, advisers and promoters of industrial, commercial, property development, agricultural and any other projects;

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e) the construction, refurbishment, maintenance, acquisition, administration, management, development, sale and lease, except under finance lease, of, and provision of technical assistance in relation to, all manner of real property owned by Criteria itself or by others.

f) the marketing of real property, for its own account or for the account of third parties, in the broadest terms and by all possible means, including the Internet through the management and use of websites.

The Parent may also have interests in other companies, even participating in their incorporation, forming associations with them or having any kind of involvement with them.

Criteria CaixaHolding, S.A.U. forms part of the Caja de Ahorros y Pensiones de Barcelona Group ("the “la Caixa” Group"), the parent of which is “la Caixa”, whose registered office is at Av. Diagonal, 621-629, 08028, Barcelona and which prepares consolidated financial statements. The consolidated financial statements of the ”la Caixa” Group are deposited at the Barcelona Mercantile Registry and are authorised for issue by the legally established deadline, i.e. before 31 March each year. The consolidated financial statements of the “la Caixa” Group for 2013 were formally prepared by the directors of "la Caixa" at the Board of Directors Meeting held on 27 February 2014. Criteria CaixaHolding, S.A.U. meets the requirements in current legislation relating to the exemption from preparing consolidated financial statements provided from in Royal Decree 1159/2010, of 17 September; however, the related consolidated financial statements are prepared in accordance with International Financial Reporting Standards and are authorised for issue on a voluntary basis.

2. Basis of presentation and basis of consolidation

2.1. Regulatory financial reporting framework applicable to the Group and fair presentation

The accompanying consolidated financial statements, which were formally prepared by the Board of Directors at its Meeting on 27 March 2014, were obtained from the accounting records of the Parent and of its subsidiaries and are presented in accordance with the following regulatory financial reporting framework:

a) The Spanish Commercial Code and all other Spanish corporate law.

b) International Financial Reporting Standards (“IFRSs”) as adopted by the European Union, in conformity with Regulation (EC) no. 1606/2002 of the European Parliament and of the Council, of 19 July, and subsequent amendments thereto; and

c) All other applicable Spanish accounting legislation,

and, accordingly, present fairly the Group's consolidated equity and consolidated financial position at 31 December 2013, and the consolidated results of its operations and its consolidated cash flows. The consolidated financial statements of the Group and the financial statements of the Group companies for 2013 have not yet been approved by their shareholders at the respective Annual General Meetings, although it is considered that they will be approved without any material changes.

The principal accounting policies and measurement bases applied in preparing the Group's consolidated financial statements for 2013 are summarised in the Note on Accounting policies. The consolidated financial statements for 2013 were prepared on the basis of the accounting records kept by Criteria CaixaHolding and by the other Group companies. However, when the accounting policies and measurement bases used in preparing the Group's consolidated financial statements for 2013 (IFRSs) differ, in certain cases, from those used by the Group companies, the required adjustments and

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reclassifications are made to unify the policies and methods used and to make them compliant with the International Financial Reporting Standards adopted by the European Union.

At 31 December 2013, the Group's presentation currency was the euro. The functional currency of the Parent and of most of the subsidiaries, jointly controlled entities and associates is the euro. The other balances and transactions in currencies other than the euro are deemed to be foreign currency balances and transactions.

The financial statements of investees with a functional currency other than the presentation currency, the euro, were translated to euros as follows:

The assets and liabilities in their balance sheets were translated at the exchange rates ruling at the reporting date.

The consolidated income statement items were translated at the cumulative average exchange rates for the period in which they arose.

Any resulting exchange differences are recognised as a separate component of equity under “Valuation Adjustments – Translation Differences”.

When control, joint control or significant influence over a company with a functional currency other than the euro is lost, the translation differences recognised as a component of equity relating to that company are recognised in profit or loss at the same time as the gain or loss on the disposal is recognised. If the investee with a functional currency other than the euro is a jointly controlled entity or associate and a partial disposal takes place that does not result in a change of classification of the investee or results in the jointly controlled entity becoming an associate, only the proportional part of the translation differences is recognised in profit or loss. If a percentage of ownership of a subsidiary of these characteristics is disposed of without losing control of the subsidiary, the same percentage of the cumulative translation difference is allocated to non-controlling interests.

The figures are presented in thousands of euros unless the use of another monetary unit is stated explicitly. Certain financial information in these consolidated financial statements was rounded off and, consequently, the figures shown herein as totals may differ slightly from the exact sum of the individual figures.

2.2. Application of new standards

Standards and interpretations issued by the International Accounting Standards Board (IASB) that came into force in 2013

At the date of preparation of these consolidated financial statements the following standards and interpretations had come into force, the adoption of which by the Group did not have a significant effect hereon.

- Amendments to IAS 1, Presentation of Financial Statements

These amendments change the presentation of items of other comprehensive income in the statement of comprehensive income. The amendments provide for the separation of OCI items into two groups (those that might be reclassified to profit or loss and those that will not be reclassified to profit or loss).

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Also, and unlike previous exposure drafts, the amendments do not require that OCI items be presented jointly in a single statement. The final wording makes it possible to continue to use the approach taken by the Group in its consolidated financial statements for prior periods.

These amendments did not give rise to significant changes in the presentation of the financial information in the consolidated statement of comprehensive income.

- Amendments to IAS 19, Employee Benefits

The main change introduced by these amendments to IAS 19, which became effective on 1 January 2013, affects the accounting treatment of defined benefit plans since, since the date on which the amendments became effective, all actuarial gains are recognised immediately in equity in order to recognise in the consolidated balance sheet the total deficit or surplus in the plan. Also, the interest cost and the expected return on plan assets are replaced in the new version by an amount of net interest, which is calculated by multiplying the defined benefit liability (or asset) by the discount rate. The amendments also entail changes in the presentation of cost components in the statement of comprehensive income, which are aggregated and presented in a different way.

The application of this IAS did not have any effect of the Group's equity.

- Amendments to IFRS 7, Financial Instruments: Disclosures

The amendments introduce new disclosure requirements for all recognised financial assets and financial liabilities that are set off, and also apply to recognised financial instruments that are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are set off in accordance with IAS 32, Financial Instruments: Presentation.

The entry into force of the amendments to IFRS 7 did not give rise to additional disclosures because the analysis the Group conducts regarding whether or not to offset certain financial assets and financial liabilities is in line with the clarifications included in the standard.

- IFRS 13, Fair Value Measurement

The purpose of this IFRS is to set out in a single standard a framework for measuring the fair value of assets or liabilities when other standards require that the fair value measurement model be used. In this regard, it does not change in any way the current measurement bases established by other standards and applies to both financial and non-financial items.

Also, this IFRS changes the current definition of fair value, introduces new factors to be taken into account and focuses its calculation on the so-called “fair value hierarchy”, which is conceptually similar to that already used by IFRS 7, Financial Instruments: Disclosures for certain disclosures on financial instruments.

The Group has analysed the potential effects of the new definition of fair value on measurements, which did not give rise to any changes in relation to the determination of the fair value of financial assets and financial liabilities measured at fair value.

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- Amendments to IAS 12, Income Taxes - Deferred Taxes Arising from Investment Property

The amendments introduce an exception to the general principles of IAS 12 which affects deferred taxes arising from investment property measured using the fair value model in IAS 40, Investment Property. In these cases, there is now a rebuttable presumption in relation to the measurement of any deferred tax asset or deferred tax liability that the carrying amount of the investment property will be recovered entirely through sale. This presumption is rebutted if the investment property is depreciable and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time rather than through sale.

In view of the nature of the amendments, their entry into force did not have any effect on the Group.

Standards and interpretations issued by the IASB but not yet in force

At the date of preparation of these consolidated financial statements, the most significant standards and interpretations that had been published by the IASB but which had not yet come into force, either because their effective date is subsequent to the date of the consolidated financial statements or because they had not yet been adopted by the European Union, were as follows:

The Group assessed the impacts arising therefrom and decided not to choose the option of early application, where permitted, since it considered that early application would not have any significant effects.

Standards and interpretations Title

Obligatory application in

annual reporting periods

beginning on or after:

Approved for use in the EU

IFRS 10 Consol idated Financia l Statements 1 January 2014

IFRS 11 Joint Arrangements 1 January 2014

IFRS 12 Disclosure of Interests in Other Enti ties 1 January 2014

Amendments to IAS 27 Separate Financia l Statements 1 January 2014

Amendments to IAS 28 Investments in Associates 1 January 2014

Amendments to IAS 32 Financia l Instruments : Presentation 1 January 2014

Amendments to IFRS 10, 11 and 12

Consol idated Financia l Statements , Joint Arrangements

and Disclosure of Interests in Other Enti ties : Trans i tion

Guidance 1 January 2014

Amendments to IFRS 10, 12 and IAS 27 Investment Enti ties 1 January 2014

Amendments to IAS 36 Recoverable Amount Disclosures for Non-Financia l Assets 1 January 2014

Amendments to IAS 39

Novation of Derivatives and Continuation of Hedge

Accounting 1 January 2014

Not yet approved for use in the EU

IFRIC 21 Levies 1 January 2014

Amendments to IAS 19 Defined Benefi t Plans : Employee Contributions 1 July 2014

Improvements to IFRSs , 2010-2012 cycle

and 2011-2013 cycle Minor amendments 1 July 2014

IFRS 9 Financia l instruments : Class i fication and Measurement N/A

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- IFRS 10, Consolidated Financial Statements

This IFRS is issued jointly with IFRS 11, IFRS 12 and the amendments to IAS 27 and IAS 28 (as described below), to replace the current standards relating to consolidation and accounting for subsidiaries, associates and joint ventures, together with the related disclosures.

The entry into force of this IFRS will lead to the replacement of the rules on consolidation in the current IAS 27, Consolidated and Separate Financial Statements, as well as the SIC 12 interpretation, Consolidation - Special Purpose Entities.

The main new feature introduced by IFRS 10 is a change in the current definition of control. The new definition of control sets out the following three elements of control: power over the investee; exposure, or rights, to variable returns from involvement with the investee; and the ability to use power over the investee to affect the amount of the investor’s returns.

At the reporting date, no significant changes are expected to arise in relation to entities controlled by the Group as a result of the adoption of the new definition of control.

- IFRS 11, Joint Arrangements

IFRS 11 will supersede IAS 31, Interests in Joint Ventures currently in force. The fundamental change introduced by IFRS 11 with respect to the current standard is the elimination of the option of proportionate consolidation for jointly controlled entities, which will begin to be accounted for using the equity method. It also modifies certain aspects of the approach to be taken in analysing joint arrangements, focusing on whether or not the joint arrangement is structured through a separate vehicle. Also, IFRS 11 classifies joint arrangements into two types - joint operations or joint ventures.

The Group accounts for its joint ventures using the equity method. Consequently, the application of this IFRS is not expected to have a significant impact.

- IFRS 12, Disclosure of Interests in Other Entities

The issue of IFRS 12 makes it possible to group together in a single IFRS and to extend all the disclosure requirements for interests in subsidiaries, associates, joint arrangements or other interests. One of the new features with respect to the current disclosure requirements is the introduction of mandatory disclosures on unconsolidated structured entities.

The application of this new IFRS will increase the disclosure requirements in connection with associates and jointly controlled entities and, particularly in relation to reconciliations of the profit or loss contributed by those entities and the attributable profit or loss.

- Revision of IAS 27, Separate Financial Statements

This revision re-issues IAS 27, since when it comes into force its contents will apply only to the separate financial statements of an entity.

- Revision of IAS 28, Investments in Associates and Joint Ventures

This revision re-issues IAS 28, which will also address the treatment of jointly controlled entities, since, like associates, they will have to be accounted for using the equity method because no other option is available.

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- Amendments to IAS 32, Financial Instruments: Presentation

The amendments to IAS 32 introduce certain additional clarifications to the application guidance on the requirements of the standard for being able to offset a financial asset and a financial liability in the balance sheet. IAS 32 already indicates that a financial asset and a financial liability may only be offset when an entity currently has a legally enforceable right to set off the recognised amounts.

The amended application guidance states, inter alia, that in order to meet this criterion, the right of set-off must not be contingent on a future event, and must be legally enforceable in the normal course of business, in the event of default and in the event of insolvency or bankruptcy of the entity and all of the counterparties.

- Amendments to IFRS 10, IFRS 11 and IFRS 12, Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities: Transition Guidance

The intention of the IASB with these amendments has been to clarify certain matters relating to the transition provisions of these standards. It is clarified that the date of first-time application is the beginning of the period in which IFRS 10 is applied for the first time. This is the date at which an investor would perform its analysis as to whether or not there are changes in the conclusions regarding the investments that should be consolidated.

Also, in relation to comparative information, the standards state that if there are no changes at the date of first-time application in the consolidation conclusions, no adjustments need be made to the comparative amounts. If there are any changes, the comparative amounts have to be restated, but only the comparative amounts for the preceding period.

- Amendments to IFRS 10, IFRS 12 and IAS 27, Investment Entities

These amendments introduce the definition of an "investment entity" and exceptions whereby investments over which control is exercised that are defined as “investment entities” will not be consolidated but must instead be measured at fair value through profit or loss.

The amendments also introduce disclosure requirements for entities defined as “investment entities”.

- Amendments to IAS 36, Recoverable Amount Disclosures for Non-Financial Assets

These amendments propose restricting the current disclosure of the recoverable amount of an asset or cash-generating unit to reporting periods in which an entity has recognised or reversed an impairment loss.

In addition, they introduce new disclosure requirements for when the recoverable amount has been calculated as fair value less costs of disposal and an impairment loss has been recognised or reversed. These amendments will require disclosure of the level of the IFRS 13 fair value hierarchy within which the fair value measurement of the asset is categorised and, for fair value measurements categorised within Levels 2 and 3 of the fair value hierarchy, a description of the valuation techniques used, the key assumptions made and the discount rate used in the current and previous measurements.

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- Amendments to IAS 39, Novation of Derivatives and Continuation of Hedge Accounting

These amendments permit an entity to continue hedge accounting, if specific conditions are met, in a circumstance in which a derivative, which has been designated as a hedging instrument, is novated in order for clearing to be effected through a central counterparty as a consequence of this being required by new laws or regulations.

These amendments have been introduced in response to legislative changes prompted by a G20 commitment to improve transparency and regulatory oversight of OTC derivatives.

- IFRIC 21, Levies

This interpretation addresses the moment at which a liability to pay a levy must be recognised if that liability is based on financial information for a period other than that in which the obligating event that gives rise to the payment of a levy occurs.

The interpretation states that the liability must be recognised when the related obligating event occurs, a moment which is normally identified by legislation. For example, if an entity is obliged to pay a levy based on the revenue that was generated in the previous period but under the related legislation the entity is only obliged to pay the levy if it is engaging in the same activity on 1 January of the following period, the entity will not have a constructive obligation until 1 January and, therefore, the liability should not be recognised until that date.

- Amendments to IAS 19, Defined Benefit Plans: Employee Contributions

These amendments have been issued in order to facilitate the possibility of recognising employee contributions to defined benefit plans as a reduction in the service cost in the same period in which they are payable if, certain requirements are met, without having to make calculations in order to base the related percentages of the employee's salary on the number of years of service to the employer. Contributions from employees or third parties set out in the formal terms of a defined benefit plan will have to be accounted for as follows:

If the contribution is not dependent on the number of years of service, it can be recognised as a reduction in the service cost in the same period in which they are payable (this accounting option must be applied consistently over time).

Contributions from employees that are linked to service must be attributed to periods of service.

- Improvements to IFRSs, 2010-2012 Cycle

The improvements of this Cycle have been completed, giving rise to amendments to the following standards:

IFRS 2, Share-based Payment: the definitions of "vesting conditions" and "market condition" have been amended and the definitions of "performance condition" and "service condition" have been added.

IFRS 3, Business Combinations: contingent consideration classified as an asset or a liability, regardless of whether it is a financial instrument or a financial asset or financial liability, must be measured at fair value at each reporting date and changes in fair value must be recognised in profit or loss.

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IFRS 8, Operating Segments: these amendments make it necessary to disclose the judgements made by management in applying the operating segment aggregation criteria. In addition, an entity must provide a reconciliation of the total of the reportable segments’ assets to the entity’s assets.

IFRS 13, Fair Value Measurement: the Basis for Conclusions of IFRS 13 is amended to clarify that the issue of IFRS 13 does not mean that the IASB has removed the ability to measure short-term receivables and payables with no stated interest rate at invoice amounts without discounting, when the effect of not discounting is immaterial.

IAS 16, Property, Plant and Equipment and IAS 38, Intangible Assets: these amendments clarify that when an entity applies the revaluation model to an item of property, plant and equipment or an intangible asset, the gross carrying amount of the asset is adjusted in a manner that is consistent with the revaluation of the carrying amount of the asset, so that the accumulated depreciation is equal to the difference between the gross carrying amount and the carrying amount of the asset after the revaluation.

IAS 24, Related Party Disclosures: amounts paid or payable to entities that provide management services to the reporting entity must be disclosed because such entities are also deemed to be related parties of the reporting entity.

- Improvements to IFRSs, 2011-2013 Cycle

The improvements of this cycle have been completed, giving rise to amendments to the following standards:

IFRS 3, Business Combinations: it is clarified that this standard does not apply to the formation of a joint arrangement in the financial statements of the joint arrangement itself.

IFRS 13, Fair Value Measurement: the improvements amend the scope of the exception for measuring the fair value of groups of financial assets and financial liabilities on a net basis to stress that the references to financial assets and financial liabilities should be read as applying to all contracts within the scope of IAS 39 or IFRS 9, regardless of whether they meet the definitions of financial assets or financial liabilities in IAS 32.

IAS 40, Investment Property: the amendments clarify that IAS 40 and IFRS 3 are not mutually exclusive and both standards may have to be applied and, therefore, when acquiring investment property an entity must determine whether the investment property meets the definition of investment property in IAS 40 and whether the transaction can be considered to be a business combination.

- IFRS 9, Financial Instruments: Classification and Measurement

IFRS 9 will in the future replace the current part of IAS 39 relating to the classification and measurement of financial instruments. There are very significant differences with respect to the current standard, in relation to financial assets, including the approval of a new classification model based on only two categories, namely instruments measured at amortised cost and those measured at fair value, the disappearance of the current “held-to-maturity investments” and “available-for-sale financial assets” categories, impairment analyses only for assets measured at amortised cost and the non-separation of embedded derivatives in financial asset contracts.

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In relation to financial liabilities, the classification categories proposed by IFRS 9 are similar to those currently contained in IAS 39 and, therefore, there should not be any very significant differences except for the requirement to recognise changes in fair value relating to own credit risk as a component of equity, in the case of fair value option financial liabilities.

Management considers that the future application of IFRS 9 will not have a material effect on the financial assets and financial liabilities disclosed herein.

The effective date of IFRS 9 will be established when the standard has been finalised. In this regard, the IFRS is not expected to be mandatorily applicable to reporting periods prior to those beginning on or after 1 January 2017.

2.3. Non-obligatory accounting principles applied

The directors formally prepared these consolidated financial statements taking into account all the obligatory accounting principles and standards with a significant effect hereon. All obligatory accounting principles were applied. No non-obligatory accounting principles were applied.

2.4. Comparative information

As a result of the merger by absorption of Servihabitat XXI S.A.U. and Criteria CaixaHolding, S.A.U. (see Notes 1 and 2.7), the head of the Group changed, since Criteria (the absorbed company and until then the Parent of the Criteria Group) owned directly all the shares of Servihabitat XXI (the absorbing company). However, the aforementioned merger of the head of the Group did not give rise to any changes in the Group, except for the expression of the Group's share capital and the share premium (see Note 12). Accordingly, for comparison purposes the information of the Criteria Group for 2012 is presented.

International Financial Reporting Standards require that the information presented in the consolidated financial statements be consistent with that relating to the preceding year. In 2013 no transactions were performed or different accounting methods applied that affected the comparability of the financial information and/or that required a change in the comparative information.

The figures for 2012 are presented for comparison purposes only.

2.5. Grouping of items

Certain items in the balance sheet, income statement, statement of changes in equity and statement of cash flows are grouped together to facilitate their understanding; however, whenever the amounts involved are material, the information is broken down in the related notes to the financial statements.

2.6. Basis of consolidation

In addition to information relating to the Parent, the consolidated financial statements include information relating to the subsidiaries, jointly controlled entities and associates. The procedure for including the assets and liabilities of these companies was based on the type of control or influence exercised over them, the detail being as follows:

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Subsidiaries

The Group considers subsidiaries to be companies over which it has the capacity to exercise control. Control arises when the Group:

- has the power to direct the relevant activities of an entity, i.e. those that significantly affect its returns, as a result of a statutory or bylaw provision or an agreement;

- has the current ability, i.e. the practical ability, to exercise the rights to use that power in order to affect its returns; and

- is exposed, or has rights, to variable returns from its involvement with the investee.

Generally, voting rights afford the power to direct the relevant activities of an investee. in calculating these rights, all the direct and indirect voting rights, including potential rights such as, for example, call options acquired on the equity instruments of the investee, are taken into account. In certain situations, an investor may have the power to direct the activities of an investee without holding a majority of the voting rights, e.g. when the other voting rights are widely dispersed, when an investor holds significantly more voting rights than any other vote holder, or when there are contractual arrangements with other vote holders for the transfer of their votes.

When it is difficult to determine whether an investor’s rights are sufficient to give it power over an investee, the investor must consider evidence of whether it has the practical ability to direct the relevant activities unilaterally. These relevant activities include financial and operating activities and activities related with the appointment and remuneration of the members of the managing bodies.

The figures of the subsidiaries are consolidated with those of Criteria CaixaHolding using the full consolidation method, which consists of the aggregation of the assets, liabilities, equity, income and expenses of a similar nature included in their separate financial statements. The carrying amount of the direct and indirect investments in the share capital of the subsidiaries is eliminated in proportion to the percentage of ownership of the subsidiaries held by virtue of these investments. All other balances and transactions between the consolidated companies are eliminated on consolidation.

The share of third parties of the equity of the Criteria CaixaHolding Group and of the profit for the year is shown under “Equity - Non-Controlling Interests” in the consolidated balance sheet and “Profit Attributable to Non-Controlling Interests” in the consolidated income statement, respectively.

When control is of a company is obtained, its assets, liabilities and contingent liabilities are recognised at their fair value on that date. Any positive differences between the cost of acquisition and the fair values of the identifiable net assets acquired are recognised as goodwill. Any negative differences are recognised in profit or loss on the acquisition date. The results of subsidiaries acquired during the year are consolidated from the date of acquisition to year-end. Similarly, the results of subsidiaries that cease to be so during the year are consolidated from the beginning of the year to the date on which control is lost.

Acquisitions and disposals leading to a changes in an ownership interest in an investee that do not result in a loss of control of the investee are equity transactions and no loss or gain is recognised in the consolidated income statement. The difference between the consideration transferred or received and the decrease or increase in non-controlling interests, respectively, is recognised in reserves.

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IAS 27 states that when control of a subsidiary is lost, such assets, liabilities, non-controlling interests and other items as might have been recognised in "Valuation Adjustments" must be derecognised and the fair value of the consideration received plus any residual investment must be recognised. The difference between the two amounts is recognised in the consolidated income statement.

Jointly controlled entities

Jointly controlled entities are defined by the Criteria CaixaHolding Group as entities that are not subsidiaries but which, under a contractual agreement, are jointly controlled by it and other unrelated shareholders. Relevant information on these companies is provided in Appendix II.

Investments in jointly controlled entities are accounted for using the equity method, i.e. they are initially recognised at cost and their carrying amount is increased or reduced in order to recognise the corresponding proportion of the profit or loss for the year obtained by the investee after the acquisition date. The profits and losses resulting from transactions with a jointly controlled entity are eliminated to the extent of the Group's interest in the jointly controlled entity. Dividends received and other changes in equity as a result of the changes in equity which the jointly controlled entity did not recognise in its profit or loss for the year are taken into account. These changes are recognised directly in the Group's equity. At the acquisition date, the difference between the cost of the investment and the portion relating to the investor of the net fair value of the identifiable assets, liabilities and contingent liabilities of the jointly controlled entity is accounted for in accordance with the Revised IFRS 3, Business Combinations. If a jointly controlled entity applies policies other than those adopted by the Group, the relevant adjustments will be made to the financial statements of the jointly controlled entity that are used to apply the equity method, in order to ensure that the jointly controlled entity's accounting policies are the same as those used by the Group. Intangible assets with finite useful lives identified as a result of a purchase price allocation (PPA) are amortised with a charge to "Result of Companies Accounted for Using the Equity Method" in the consolidated income statement. At 31 December 2013, the Group had investments in the jointly controlled entities Gas Natural SDG, S.A. (“Gas Natural”) and Palau-Migdia, S.L., which are accounted for using the equity method. The use of the proportionate consolidation method to recognise these investments would give rise to the inclusion of the ownership interest under various line items in the 2013 consolidated balance sheet and consolidated income statement, as shown in the table below, instead of recognising the investment on the asset side of the consolidated balance sheet as a single line item under “Investments Accounted for Using the Equity Method”. The figures shown were estimated on the basis of the latest available information.

Line item in the consolidated financial statements Millions of euros

Non-current assets 11,827

Current assets 7,079

Non-current liabilities 7,390

Current liabilities 2,956

Revenue and other income 9,524

Operating expenses 7,122

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Associates

Associates are companies over which the Parent exercises significant influence but which are not subsidiaries or jointly controlled entities. Significant influence is presumed to exist if the Parent holds directly or indirectly 20% or more of the voting rights of the investee. If less than 20% of the voting power is held, significant influence is considered to exist if any of the circumstances indicated in IAS 28 arise. The existence of significant influence by an entity is usually evidenced in one or more of the following ways: representation on the board of directors of the investee; participation in policy-making processes; material transactions between the entity and its investee; interchange of managerial personnel; or provision of essential technical information.

In the consolidated financial statements, investments in associates are accounted for using the equity method described in the preceding section relating to jointly controlled entities.

Intangible assets with finite useful lives identified as a result of a purchase price allocation (PPA) are amortised with a charge to "Result of Companies Accounted for Using the Equity Method" in the consolidated income statement.

Relevant information on these entities is disclosed in Appendix II.

2.7. Changes in the scope of consolidation

The main changes in the scope of consolidation or in the percentages of ownership in 2013 were as follows:

Consolidation method and percentage of ownership Company 31/12/13 31/12/12

Abertis Infraestructuras, S.A. (*) Equity method 19.22% Equity method 22.55%

Gas Natural S.D.G., S.A. Equity method 34.52% Equity method 34.96% Caixa Capital Risc, S.G.E.C.R., S.A. Full 100.00% - -

(*) The percentage of control at 31 December 2013 was 23.09%.

Following is a description of the main changes shown in the foregoing table relating to transactions that took place in 2013:

Abertis

On 22 March 2013, Criteria sold 24,443,675 shares representing 3% of the share capital of Abertis Infraestructuras, S.A. for EUR 342,194 thousand. The shares of Abertis Infraestructuras, S.A. were acquired by OHL Emisiones, S.A.U., a subsidiary of the Obrascón Huarte Laín, S.A. Group (see the Note on Investments accounted for using the equity method).

Caixa Capital Risc

On 21 November 2013, Criteria acquired from CaixaBank, S.A. its 99.99% ownership interest in Caixa Capital Risc, S.G.E.C.R., S.A. for EUR 4,200 thousand. In turn, Caixa Assistance, S.A.U., a wholly-owned investee of Criteria, acquired the remaining 0.01% for EUR 420. As a result, Criteria CaixaHolding, S.A.U. owns directly and indirectly all the shares of Caixa Capital Risc, S.G.E.C.R., S.A.

The detail of the fair values of the assets acquired and liabilities assumed and of the financial goodwill arising from the business combination is as follows:

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Fair value

(thousands of euros)

Assets acquired:

Intangible assets 133

Property, plant and equipment 95

Loans and receivables 887

Cash and cash equivalents 2,977

Other assets 91

Liabilities assumed:

Current tax liabilities (355)

Trade and other payables (175)

Other liabilities (354)

Net assets acquired 3,299

Goodwill (Note 4) 901

Fair value of the business acquired (100%) 4,200

Also, In 2013 the following transactions were performed:

Spin-off and sale of the real estate management line of business

On 19 February 2013, and effective for accounting purposes from 1 January 2013, the plan for the spin-off of the real estate management line of business carried on by Servihabitat XXI, S.A.U. (now Criteria) was approved, and the assets and liabilities of this business were contributed to the newly-formed company Servihabitat Gestión Inmobiliaria, S.L.U. Through this non-monetary contribution, Servihabitat XXI, S.A.U. (now Criteria) subscribed and paid all the new shares of the newly-formed company. The spin-off public deed was registered at the Mercantile Registry on 27 March 2013.

Subsequently, on 26 September 2013 the Boards of Directors of ”la Caixa”, CaixaBank, S.A. and Criteria CaixaHolding, S.A.U. approved the sale of all the shares of Servihabitat Gestión Inmobiliaria, S.L.U. to CaixaBank, S.A. for EUR 98 million. This transaction was executed in a public deed on 31 October 2013 (see the Note on Net gains on transactions with Group companies, jointly controlled entities and associates).

The contribution of this business to the Group at the transaction date amounted to EUR 82 million, EUR 122 million and EUR 20 million in relation to assets, revenue and net profit or loss, respectively.

Merger of Servihabitat XXI (the absorbing company) and Criteria CaixaHolding (the absorbed company)

Background

Servihabitat XXI had, itself or through wholly-owned subsidiaries, traditionally been engaging in (i) the acquisition, ownership and sale of all manner of real property –including the assets awarded to ”la Caixa” in payment of debt (up to the date of the reorganisation of the ”la Caixa” Group in 2011, when the ”la Caixa” Group's foreclosed assets were acquired by BuildingCenter (wholly owned by CaixaBank))–; and (ii) the administration, management, operation and marketing, through sale or lease, except under finance lease, of all manner of real property owned by it or by third parties.

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As a result of the growing interest of foreign investors in investing in real estate service management platforms (“servicers”) in the Spanish real estate market, the ”la Caixa” Group took the decision to facilitate the entry of an investor in the real estate management business carried on by Servihabitat XXI.

For this reason, in March 2013 Servihabitat XXI span off the real estate asset management business to a wholly-owned subsidiary Servihabitat Gestión Inmobiliaria, S.L.U. (“SGI”). As a result, the acquisition management, development, asset management and marketing business activities that had historically been carried on by Servihabitat XXI started to be carried on by SGI. Therefore, SGI began to provide real estate services for the account of third parties, with no property assets in its balance sheet.

On 26 September 2013, it was announced that the Boards of Directors of ”la Caixa”, Criteria, Servihabitat XXI and CaixaBank had approved the sale and transfer by SVH XXI to CaixaBank of all the shares of SGI. In addition, on that same date it was made public that the Board of Directors of CaixaBank had approved the sale ‒immediately after the acquisition of SGI from Servihabitat XXI‒ of the business of SGI to a newly-formed company (Servihabitat Servicios Inmobiliarios, S.L.) owned 51% by the fund Texas Pacific Group (TPG) and 49% by CaixaBank. Also, on 26 September 2013 these transactions were published as a “relevant event” on the website of the Spanish National Securities Market Commission (CNMV).

By means of a "relevant event" of 31 October 2013, CaixaBank notified the market (i) that it had acquired all the shares of SGI from a subsidiary of Criteria (Servihabitat XXI); and (ii) that, after having received authorisation from the European competition authorities, it had formalised the sale of SGI's real estate management business to Servihabitat Servicios Inmobiliarios, owned 51% by TPG and 49% by CaixaBank.

Accordingly, Servihabitat XXI became a company engaging mainly in the mere ownership of real estate assets.

Raison-d'être for the merger

Based on the circumstances described in the preceding paragraphs, the purpose of the merger was to simplify the part of the ”la Caixa” Group's legal structure in which both Criteria and Servihabitat XXI were included in order to improve the efficiency of the management and business activities of the two companies, since, as a result of the transfer of the real estate management business, the business activities of the two companies were now similar, as they both engaged mainly in the ownership of assets, equity investments in various companies in the case of Criteria, and real estate assets in the case of Servihabitat XXI.

Moreover, having these two companies with separate legal personalities gave rise to unnecessary duplication in terms of their management and administration.

In this context, the directors of Criteria and Servihabitat XXI considered it advisable to promote this merger, with the aim of integrating their assets and thus streamline and rationalise their management structure, taking advantage of economies of scale, facilitate the assignment of resources (human and financial) and simplify the management and control of their businesses.

As a result, on 14 November 2013 the sole shareholders of Servihabitat XXI, S.A.U. and Criteria CaixaHolding, S.A.U. resolved to carry out the merger, in the terms provided for in Articles 22 et seq. of the Spanish Law on structural changes to companies formed under the Spanish Commercial Code, through the absorption of Criteria (the absorbed company) by Servihabitat XXI (the absorbing company), with the dissolution without liquidation of the absorbed company and the transfer en bloc of all its

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assets and liabilities to the absorbing company, which acquired, by way of universal succession, the assets, rights and obligations of Criteria.

In this regard, Criteria (the absorbed company) now owns directly all the shares of Servihabitat XXI (the absorbing company). The structure chosen is therefore that of a so-called "downstream merger”, whereby a subsidiary absorbs its parent. A downstream merger was chosen rather than an upstream merger because, from the material legal and financial standpoint it makes no difference whether one or other structure is used, since in both cases the post-merger company will have both, in completely equal terms, the assets and liabilities of Criteria (the absorbed company) and Servihabitat XXI (the absorbing company). A downstream merger was chosen for technical reasons in order to simplify the formalities relating to the transaction.

The draft terms of merger were executed in a public deed on 17 December 2013 and were filed at the Barcelona Mercantile Registry on 18 December 2013. This merger was effective for accounting purposes in the separate financial statements from 1 January 2013.

The sole shareholders of Servihabitat XXI and Criteria resolved to apply to the merger the special tax regime provided for in Chapter VIII of Title VII of the Spanish Income Tax Law.

Also, as a result of the merger, the absorbing company adopted the name of the absorbed company (Criteria CaixaHolding, S.A.U.).

This merger did not have any impact on the consolidated financial statements of the Criteria CaixaHolding Group, except for the restatement of the Group's share capital and share premium (see Note 12).

3. Accounting policies

The principal accounting policies used in preparing the Group's consolidated financial statements for 2013, in accordance with International Financial Reporting Standards as adopted by the European Union, were as follows:

3.1. Use of judgements and estimates

In preparing the accompanying consolidated financial statements estimates were made by the Parent's directors in order to measure certain of the assets, liabilities, income, expenses and obligations reported herein. These estimates relate basically to the following:

- The measurement of investments accounted for using the equity method (Note 7).

- The impairment losses on financial assets (see Note 8).

- The fair value of certain financial assets and financial liabilities (see Note 19).

- The measurement of goodwill and intangible assets (see Note 4).

- The useful life and fair value of other intangible assets and property, plant and equipment (see Notes 4 and 5).

- The determination of the recoverable amount of investment property, inventories and non-current assets classified as held for sale (see Notes 6, 9 and 10).

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- The calculation and recognition of provisions and contingent liabilities (see Note 13).

- The recognition of tax assets and the recoverability thereof (see Note 16).

The respective estimates and assumptions are reviewed on an ongoing basis; the effects of the reviews of the accounting estimates are recognised in the period in which they are made, if these only affect that period, or in the period of the review and in future periods. Although these estimates were made on the basis of the best information available at 2013 year-end, events that take place in the future might make it necessary to change these estimates (upwards or downwards) in coming years. Changes in accounting estimates would be applied prospectively.

3.2. Goodwill and other intangible assets

3.2.1. Goodwill and acquisition of non-controlling interests

Goodwill acquired in a business combination is measured at the date of acquisition as the excess of the fair value of the assets exchanged over the net fair value of the identifiable assets, liabilities and contingent liabilities of the acquired company. After initial recognition, the goodwill is measured at this excess amount less any accumulated impairment losses. The Group tests goodwill for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount might have become impaired.

On disposal of a subsidiary or jointly controlled entity, the amount attributable to goodwill is included in the calculation of the gain or loss on disposal.

Goodwill relating to jointly controlled entities and associates accounted for using the equity method is presented under “Non-Current Assets - Investments Accounted for Using the Equity Method” in the consolidated balance sheet together with the amount represented by the investment in the entity's capital.

An increase or a decrease in an investment in a subsidiary that does not give rise to a loss of control is treated as an equity transaction. Therefore, the goodwill paid would be recognised directly in the Group's equity, with no effect on goodwill or on the consolidated income statement.

3.2.2. Other intangible assets

The other intangible assets are identifiable non-monetary assets without physical substance which arise as a result of a third-party acquisition. However, only intangible assets whose cost can be determined objectively and from which it is considered probable that future economic benefits will be generated are recognised. Intangible assets are recognised initially at acquisition or production cost and are subsequently measured at cost less any accumulated amortisation and any accumulated impairment losses.

"Other Intangible Assets" includes basically the car park and logistics park business concessions of Saba Infraestructuras, S.A., which are amortised over their years of estimated useful life. In general, administrative concessions are presented on the asset side of the consolidated balance sheet and measured at the total amount of the disbursements made to obtain them.

IFRIC 12, which came into force on 1 January 2010, regulates the accounting treatment of public and private service concession arrangements when:

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the grantor controls or regulates what services the operator must provide with the infrastructure, to whom it must provide them, and at what price; and

the grantor controls any significant residual interest in the infrastructure at the end of the term of the arrangement.

It also establishes various accounting methods (the intangible asset model, the financial asset model and the bifurcated model) based on the agreements between the concession operator and the grantor.

In these concession arrangements, the operator acts as a service provider; specifically, on the one hand, providing infrastructure construction and upgrade services and, on the other, providing operation and maintenance services over the term of the arrangement. The consideration received is the right to charge users of the public service a price.

The average amortisation periods of the intangible assets in the consolidated balance sheet are as follows:

Type of asset Estimated average useful life

Administrative concessions Based on the term of the

concession Computer software

3-6 years

Other intangible assets 3-5 years

The estimated amortisation of intangible assets is recognised with a charge to the consolidated income statement for the year in which it is taken. Annual amortisation is recognised under “Depreciation and Amortisation Charge” in the consolidated income statement and impairment losses recognised and reversed are presented under "Net Impairment Losses" (see the Note on Income and expenses).

3.3. Property, plant and equipment

Property, plant and equipment include assets, either owned or held under finance leases, held by the Group for administrative use or for the production or supply of goods and services that are expected to be used for more than one year.

As a general rule, property, plant and equipment are stated at cost, less accumulated depreciation and any impairment losses (see Note 18 on Income and expenses).

Depreciation is calculated using the straight-line method, on the basis of the acquisition cost of the assets less their residual value, based on their estimated useful lives. Land is not depreciated since it is considered to have an indefinite useful life. The period property, plant and equipment depreciation charge is recognised under “Depreciation and Amortisation Charge” in the consolidated income statement and is determined on the basis of the years of estimated useful life of the various assets, as follows:

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Type of asset Estimated useful life

Property

· Buildings 25-50 years

· Fixtures 10-13 years

Furniture and other plant 3-16 years

Computer hardware 2-8 years

Other items of property, plant and equipment 4-20 years

Upkeep and maintenance expenses are recognised under “Other Operating Expenses” in the consolidated income statement. However, the costs of improvements leading to increased capacity or efficiency or to a lengthening of the useful lives of the assets are capitalised.

3.4. Investment property

“Investment Property” in the accompanying consolidated balance sheet reflects the net values of the land, buildings and other structures held either to earn rentals or for capital appreciation.

Investment property is stated at acquisition cost revalued, where appropriate, pursuant to the applicable legislation. For the purposes of valuation and estimated useful life, the same policies are used as for identical items of property, plant and equipment.

The rental income earned in 2013 from investment property amounted to EUR 67,408 thousand, and this amount is recognised under “Revenue” in the accompanying consolidated income statement (see the Note on Income and expenses).

In accordance with IAS 40, the Group determines periodically the fair value of its investment property. This fair value is determined using as a reference appraisals conducted by independent valuers and whether or not the property was being leased at year-end. Therefore, at the end of each period, the fair value reflects the market conditions of the items of investment property at that date.

The Group did not capitalise any borrowing costs in 2013 or 2012. No borrowing costs had been capitalised at year-end.

The Group depreciates its investment property by the straight-line method based on the years of estimated useful life of the related assets, as follows:

Years of estimated

useful life

Property: Buildings 50 Plant 12.5

3.5. Inventories

Inventories consisting of land and property developments in progress are measured at acquisition price or cost of construction.

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The cost of construction includes the direct and indirect expenses required for construction, together with the borrowing costs incurred in financing the building work during the construction phase, provided that the work takes longer than one year to complete.

The Group did not capitalise any borrowing costs in 2013.

Advance payments received as a result of purchase option agreements are recognised as advances on inventories and are made on the assumption that the conditions attaching to the options will be fulfilled.

The Group recognises the appropriate impairment losses on inventories if their net realisable value is lower than their carrying amount. For the purpose of determining the net realisable value, the Group considered the fair value of the inventories obtained from appraisals performed by independent third-party valuers and the Group’s intention to realise the assets in the short and medium term, for which purpose expectations regarding the evolution of the Spanish property market in the short and medium term were taken into account.

3.6. Non-current assets classified as held for sale

“Non-Current Assets Classified as Held for Sale” includes assets or groups of assets the value of which will be recovered mainly through a sale transaction that is highly likely to occur. The Group includes under this heading items of property, plant and equipment which were not intended for own use or classified as investment property and for which, in any case, there is an intention to sell.

If the assets are retained in the consolidated balance sheet for longer than initially foreseen, their carrying amount is reviewed in order to recognise any impairment loss that the difficulty in finding buyers or receiving reasonable offers might have disclosed.

These assets or disposal groups are measured at the lower of carrying amount and fair value less costs to sell. The impairment losses arising after capitalisation of these assets are recognised under “Net Impairment Losses” in the consolidated income statement. If their value is subsequently recovered, the amount of the recovery may be recognised under the same heading in the consolidated income statement up to the limit of the impairment losses previously recognised. The assets classified under this heading are not depreciated.

At the reporting date, the Group recognises the appropriate impairment losses when the net realisable value of the assets is lower than their carrying amount. For the purpose of determining the net realisable value, the Group considered the fair value obtained from appraisals performed by independent third-party valuers and the Group’s intention to realise the assets in the short and medium term, for which purpose expectations regarding the evolution of the Spanish property market in the short and medium term were taken into account.

Therefore, at 31 December 2013 the impairment losses recognised reflected both the effects of the appraisals conducted by independent third-party valuers and the other factors referred to above.

3.7. Financial instruments

Financial instruments are initially recognised in the consolidated balance sheet when the Group becomes a party to the contract giving rise to them, under the terms and conditions thereof. Financial assets and liabilities are recognised from the date on which the legal right to receive or the legal obligation to pay cash arises.

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A financial asset is fully or partially derecognised when the contractual rights to the cash flows from the financial asset expire or when the financial asset is transferred. Also, a financial liability is fully or partially derecognised when the related obligations, risks or other rewards are extinguished.

Fair value and amortised cost

Upon initial recognition, all financial instruments are recognised at fair value which, unless there is evidence to the contrary, is the transaction price. Thereafter, at a specified date, the fair value of a financial instrument is the amount for which it could be delivered, if an asset, or settled, if a liability, in a transaction carried out between knowledgeable, willing parties on an arm's-length basis. The most objective and common reference for the fair value of a financial instrument is the price that would be paid for it on an organised, transparent and deep market (“quoted price” or “market price”).

If there is no market price for a given financial instrument, its fair value is estimated on the basis of the price established in recent transactions involving similar instruments and, in the absence of this information, of valuation techniques commonly used by the international financial community, taking into account the specific features of the instrument to be measured and, particularly, the various types of risk associated with it.

The fair value of derivatives not traded in organised markets or derivatives traded in scantly deep or transparent organised markets is determined using methods recognised by the financial markets, namely “net present value” (NPV) or option pricing models (see the Note on Risk management policy).

In the respective notes to the consolidated financial statements, financial instruments at fair value are classified on the basis of the methodology used to measure them, as follows:

Level 1. On the basis of quoted prices in active markets.

Level 2. Using valuation techniques in which the assumptions correspond to directly or indirectly observable market data or to quoted prices on active markets for similar instruments.

Level 3. Valuation techniques are used in which certain of the main assumptions are not supported by observable market data.

The detail of the fair value of the financial instruments held by the Group at 31 December 2013 and 2012 based on the method used for calculating fair value is shown in the Note on Fair value.

Also, certain financial assets and liabilities are recognised at amortised cost. This criterion is applied mainly to the financial assets recognised under “Loans and Receivables” and to the financial liabilities recognised under “Financial Liabilities at Amortised Cost”.

A portion of the assets and liabilities recognised under these headings are included in certain of the fair value micro-hedges managed by the Group companies and, accordingly, are presented in the consolidated balance sheet at their fair value relating to the hedged risk.

Classification and measurement of financial assets and financial liabilities

The financial instruments not included in the categories indicated below are recognised under one of the following headings in the accompanying consolidated balance sheet: “Cash and Cash Equivalents” and “Derivatives”.

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Loans and receivables. These relate to loans and receivables: financial assets arising from the sale of goods or the rendering of services in the ordinary course of the Group's business, or financial assets which, not having commercial substance, are not equity instruments or derivatives, have fixed or determinable payments and are not traded in an active market. These assets are initially measured at fair value adjusted by the fees and commissions and transaction costs directly attributable to the acquisition of the financial asset, which are charged to income by the effective interest method through maturity. They are subsequently measured at amortised cost, as described earlier in this Note.

Any impairment losses are recognised as set forth in the Note on Impairment of financial assets. Lastly, changes in the fair value of the financial assets hedged by fair value hedges are measured, where appropriate, as described in the Note on Derivatives and hedges.

Available-for-sale financial assets. This line item in the consolidated balance sheet includes debt instruments not classified as financial assets held for trading, as held-to-maturity investments or as loans and receivables, and equity instruments issued by entities other than associates, provided that they are not classified as held for trading, and other financial assets at fair value through profit or loss.

In general, this category includes all the equity securities.

Equity instruments whose fair value cannot be determined in a sufficiently objective manner are measured at cost, net of any impairment losses.

Changes in the fair value of financial assets from the date of acquisition are recognised, net of the related tax effect, in “Equity - Valuation Adjustments - Available-for-Sale Financial Assets” until the financial asset is derecognised. The balance recognised in equity is then taken to “Gains (Losses) on Financial Assets and Financial Liabilities” in the consolidated income statement.

Any returns on securities, in the form of dividends, are recognised under "Returns on Equity Instruments" in the consolidated income statement. Any impairment losses on these securities are recognised as indicated in the Note on Impairment of financial assets.

Financial liabilities at amortised cost: these liabilities are initially measured at fair value, adjusted by the amount of the transaction costs that are directly attributable to the issue of the financial liability, which are recognised in the consolidated income statement by the effective interest method until they mature. They are subsequently measured at amortised cost, as described earlier in this Note.

The accrued interest borne on financial liabilities at amortised cost is recognised under “Finance Costs” in the consolidated income statement. Changes in the fair value of the financial liabilities hedged by fair value hedges are measured as described in the Note on Derivative financial instruments.

3.8. Impairment of assets

The information contained in these notes to the consolidated financial statements presents objective data of the valuations being afforded by the market to a number of ownership interests in listed companies accounted for using the equity method (jointly controlled entities and associates) or as available-for-sale equity instruments. These objective data have been used as a determining factor in assessing the possible existence of impairment in the listed companies taken as a whole.

However, in the context of an impairment test and the quantification of any amount to be recognised in the consolidated income statement, as established in the specific measurement bases and explained in the notes corresponding to these assets, the Group used its expert judgement based on generally accepted measurement bases which include, inter alia, discounting the future cash flows expected from

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the business or specialised analyst reports in accordance with the characteristics of each type of asset or the best information available.

Following is a detail of the main criteria used when assessing the impairment of the Group's assets.

3.8.1. Impairment of property, plant and equipment and intangible assets

The carrying amount of these assets is reviewed individually at least at each year-end in order to determine whether there is any indication of the existence of impairment. If impairment is detected by any other means before year-end, the fair value of these assets is reviewed at that date. If there are indications of impairment, and always in the case of goodwill and intangible assets with an indefinite useful life, the recoverable amount of these assets is estimated.

Recoverable amount is the higher of fair value and value in use. In assessing value in use, the future cash flows are discounted to their present value using pre-tax discount rates that reflect current market assessments of the time value of money and the risks specific to the asset. For assets which do not generate largely independent cash flows, the recoverable amount is determined for the cash-generating units (CGUs) to which the assets belong.

Impairment losses are recognised in the consolidated income statement for all assets or, where applicable, for the cash-generating units in which they are included, when their carrying amount exceeds the corresponding recoverable amount. In the case of cash-generating units and not individual assets, these losses are applied to reducing firstly the goodwill assigned to these units and secondly the other assets.

Impairment losses are reversed, except in the case of goodwill, if there were changes in the estimates used to determine the recoverable amount. The reversal of an impairment loss is recognised in the consolidated income statement. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.

3.8.2. Impairment of investments in companies accounted for using the equity method

Impairment of investments accounted for using the equity method is determined by comparing their recoverable amount (the higher of value in use and fair value less costs to sell) with their carrying amount, provided that there is evidence that the investment may have become impaired.

In accordance with the methodology established by the Group, the indicators which are used to assess the impairment of jointly controlled entities and associates listed on secondary markets are, inter alia, the quoted market price at year-end, a significant or prolonged decrease in market value to below cost, the dividends paid in recent years, the expected dividends and the expectations in the market in which the investee operates.

In order to determine evidence of impairment, a test is carried out to determine value in use which includes market appraisals and those carried out internally or by independent valuers. The value in use of the investment is estimated, based on the best available information, on the basis of the corresponding portion of the present value of the cash flows expected to be generated by the jointly controlled entity or associate, which include the estimated future cash flows from operating activities and the amounts resulting from the final sale or disposal by any other means of the investment.

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The impairment losses on assets of this nature are reversed if there were changes in the estimates used to determine the recoverable amount. Both the impairment loss and the reversal of an impairment loss are recognised in the consolidated income statement. In this respect, an impairment loss is reversed only to the extent that the carrying amount of the asset after the reversal does not exceed the amount which would appear in the accounting records if the aforementioned impairment loss had not been previously recognised.

3.8.3. Impairment of financial assets

A financial asset is considered to be impaired when there is objective evidence of an adverse impact on the future cash flows that were estimated at the transaction date, or when its carrying amount may not be fully recovered.

As a general rule, the carrying amount of impaired financial instruments is adjusted with a charge to the consolidated income statement for the period in which the impairment becomes evident, and the reversal, if any, of previously recognised impairment losses is recognised in the consolidated income statement for the period in which the impairment is reversed or reduced, except in the case of equity instruments classified as available for sale, since this impairment is not considered to be reversible.

When the recovery of any recognised amount is considered unlikely, the amount is written off, without prejudice to any actions that the Group entities may initiate to seek collection until their contractual rights are extinguished definitively by expiry of the statute-of-limitations period, remission or any other cause.

Equity instruments classified as available for sale

In accordance with the methodology established by the Group, the indicators used to assess the impairment of these instruments which are listed on secondary markets are, inter alia, the quoted market price at year-end, a significant or prolonged decrease in market value to below cost, the dividends paid in recent years, the expected dividends and the expectations in the market in which the investee operates. The purpose of these indicators is to assess the existence of objective evidence of impairment. However, a decline in fair value to below the cost of acquisition is not in itself evidence of impairment.

The Group uses its expert judgement to make case-by-case valuations of all its investments, using the generally accepted valuation methods described in the preceding paragraph. In general, it is presumed that the instrument has become impaired if the market value of the asset has been subject to a continuous fall over a period of 18 months or by more than 40% without the value having recovered, without prejudice to the possibility that an impairment loss might have to be recognised before that period has elapsed or before the market value has dropped by that percentage.

An impairment loss on equity instruments is calculated individually and once there is objective evidence of a loss as a result of an event or group of events with an impact on estimated future cash flows, it is equal to the difference between their acquisition cost and fair value, less any impairment loss previously recognised in the consolidated income statement.

3.8.4. Derivatives and hedges

The Group uses derivative financial instruments as a financial risk management tool. When these transactions meet certain requirements, they qualify for hedge accounting.

When the Group designates a transaction as a hedge, it does so from inception of the transaction or of

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the instrument included in the hedge and the transaction is documented appropriately in accordance with the regulations in force. The hedge accounting documentation duly identifies the hedged instrument or instruments and the hedging instrument or instruments, the nature of the risk to be hedged, and the criteria or methods used by the Group to assess the effectiveness of the hedge over its entire life, taking into account the risk intended to be hedged.

The Group applies hedge accounting for hedges that are highly effective. A hedge is considered to be highly effective if, during its expected life, the changes in fair value or in the cash flows that are attributed to the hedged risk are almost entirely offset by changes in the fair value or in the cash flows, as appropriate, of the hedging instrument or instruments.

To measure the effectiveness of hedges, the Group analyses whether, from the beginning to the end of the term defined for the hedge, it may be expected, prospectively, that the changes in fair value or in the cash flows of the hedged item that are attributable to the hedged risk will be almost entirely offset by changes in the fair value or in the cash flows, as appropriate, of the hedging instrument or instruments and, retrospectively, that the results of the hedge will be within a range of 80% to 125% of the results of the hedged item.

Hedging transactions performed by the Group are classified in two categories:

- Fair value hedges, which hedge the exposure to changes in fair value of financial assets and liabilities or unrecognised firm commitments, or an identified portion of such assets, liabilities or firm commitments, that is attributable to a particular risk, provided that it affects the consolidated income statement. These relate mainly to the derivative financial instruments arranged by the Group companies to convert fixed-rate borrowings into floating-rate borrowings.

- Cash flow hedges, which hedge the exposure to changes in cash flows that is attributed to a particular risk associated with a financial asset or liability or with a highly probable forecast transaction, provided that it could affect the consolidated income statement. These hedges relate mainly to the derivative financial instruments arranged by the Group companies to convert floating-rate borrowings into fixed-rate borrowings.

In the specific case of financial instruments designated as hedged items or qualifying for hedge accounting, gains and losses are recognised as follows:

- In fair value hedges, the gains or losses arising on both the hedging instruments and the hedged items attributable to the type of risk being hedged are recognised directly in the consolidated income statement.

- In cash flow hedges, the gains or losses arising on the portion of the hedging instruments qualifying as an effective hedge are recognised temporarily in equity under “Valuation Adjustments - Cash Flow Hedges”, and are not recognised in the consolidated income statement until the gains or losses on the hedged item are recognised in the consolidated income statement or until the date of maturity of the hedged item in certain situations in which hedge accounting is discontinued. The gains or losses on the hedging instrument are recognised under the same heading in the consolidated income statement as the gains or losses on the hedged item. Financial instruments hedged in this type of hedging transaction are recognised using the methods described in the Note on Financial instruments, without any changes since they are considered to be hedged instruments. The gains or losses on the ineffective portion of the hedging instruments are recognised directly under “Other Gains" and "Other Losses", respectively, in the consolidated income statement.

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The Group discontinues hedge accounting when the hedging instrument expires or is sold, when the hedge no longer qualifies for hedge accounting or, lastly, when the designation as a hedge is revoked.

3.9. Foreign currency transactions

Foreign currency assets and liabilities, including unmatured foreign currency purchase and sale transactions considered as hedges, are translated to euros using the average exchange rates prevailing on the spot currency market at year-end, except for non-monetary items measured at historical cost, which are translated to euros at the exchange rates prevailing at the date of acquisition, and non-monetary items measured at fair value, which are translated to euros at the exchange rates prevailing when the fair value was determined.

Unmatured forward foreign currency purchase and sale transactions not considered as hedges are translated to euros at the year-end exchange rates on the forward currency market.

The exchange rates used by the Group in translating the foreign currency balances and transactions to euros were those published by the European Central Bank.

The exchange differences arising on the translation of foreign currency balances and transactions to the functional currency of the consolidated companies are recognised in the consolidated income statement. ”Valuation Adjustments - Exchange Differences” under equity in the consolidated balance sheet includes the net amount of exchange differences arising on non-monetary items whose fair value is adjusted in equity and the differences arising on the translation to euros of the balances in the functional currencies of the fully and proportionately consolidated companies and companies accounted for using the equity method whose functional currency is not the euro, and the differences arising for the same reasons at jointly controlled entities and associates accounted for using the equity method.

3.10. Current/Non-current classification

In the consolidated balance sheet, assets and liabilities are classified as current if they relate to cash and cash equivalents of unrestricted use, are expected to be realised or settled, respectively, during the course of the normal cycle of operations, are held for trading or are expected to be realised or settled, respectively, within twelve months from the reporting date. All of the other assets and liabilities are classified as non-current items.

3.11. Provisions and contingencies

When preparing the consolidated financial statements, a distinction is made between:

- Provisions: credit balances covering present obligations at the date of preparation of the consolidated financial statements arising from past events which could give rise to a loss for the entities that is considered likely to occur and which is certain as to its nature but uncertain as to its amount and/or timing; and

- Contingent liabilities: possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of the entities.

The Group's consolidated financial statements include all the material provisions with respect to which it is considered more likely than not that the obligation will have to be settled. Provisions are recognised on the liability side of the consolidated balance sheet on the basis of the obligations covered and include the provisions for pensions and similar obligations, the provisions for taxes and the provisions for

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contingent liabilities and obligations. Contingent liabilities are not recognised in the consolidated financial statements, but rather are disclosed, as required by IAS 37.

Period provisions are recognised in the consolidated income statement under “Net Provisions Recognised”.

3.12. Income tax

The expense for Spanish corporation tax and similar taxes applicable to foreign consolidated entities is recognised in the consolidated income statement unless it arises from a transaction whose results are recognised directly in equity. In that case, the income tax is also recognised in the Group's equity.

The income tax expense for the year is calculated as the tax payable on taxable profit for the year, adjusted for the changes arising during the year in the assets and liabilities recognised as a result of temporary differences, tax credits and relief and tax loss carryforwards.

The Group considers a temporary difference to exist when there is a difference between the carrying amount of an asset or liability and its tax base. The tax base of an asset or liability is taken to be the amount attributed to that asset or liability for tax purposes. A taxable temporary difference is one that will generate a future obligation for the Group to make a payment to the relevant tax authorities. A deductible temporary difference is one that will generate a future right for the Group to a refund or to make a lower payment to the relevant tax authorities.

Tax credits and relief are amounts that, after performance of the activity or obtainment of the profit or loss giving entitlement to them, are not used for tax purposes in the related tax return until the conditions for doing so established in the tax regulations are met, provided that the Group considers it probable that they will be used in future periods.

Deferred tax assets identified as temporary differences are only recognised if it is considered probable that the entities forming part of the tax group will obtain sufficient future taxable profits against which to offset them. Temporary differences are recognised in the consolidated balance sheet as deferred tax assets or liabilities, separately from current tax assets or liabilities, which basically comprise income tax payments on account and VAT refundable.

The deferred tax assets and liabilities recognised are reassessed at each reporting date in order to ascertain whether they still exist, and the appropriate adjustments are made on the basis of the findings of the analyses performed.

Criteria CaixaHolding files consolidated tax returns as a subsidiary in tax group number 20/1991.

3.13. Revenue and expense recognition

The most significant criteria used by the Group to recognise its revenue and expenses are summarised as follows:

Revenue from sales and services

Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises. Revenue is measured at the fair value of the consideration received, net of discounts and taxes.

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Revenue from sales is recognised when the significant risks and rewards of ownership of the goods sold have been transferred to the buyer, and the Parent retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold.

Revenue from the rendering of services is recognised by reference to the stage of completion of the transaction at the end of the reporting period, provided the outcome of the transaction can be estimated reliably.

Dividend income and expenses

Dividends received from companies other than subsidiaries, jointly-controlled entities and associates are recognised as income when the consolidated entities' right to receive them arises, which is the date of the resolution of the relevant managing body of the investee.

Interest income and expenses and similar items

Interest income, interest expenses and similar items are generally recognised on an accrual basis, regardless of when the resulting monetary or financial flow arises. Interest income, interest expenses and similar items are recognised by applying the effective interest method.

3.14. Related party transactions

The Group performs all its transactions with related parties on an arm’s length basis. Also, the transfer prices are adequately supported and, therefore, the Group’s directors consider that there are no material risks in this connection that might give rise to significant liabilities in the future.

3.15. Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases.

Operating leases

Lease income and expenses from operating leases are recognised in income on an accrual basis.

Also, the acquisition cost of the leased asset is presented in the consolidated balance sheet according to the nature of the asset, increased by the costs directly attributable to the lease, which are recognised as an expense over the lease term, applying the same method as that used to recognise lease income.

A payment made on entering into or acquiring a leasehold that is accounted for as an operating lease represents prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided.

3.16. Termination benefits

Under current legislation, the Group is required to pay termination benefits to employees terminated under certain conditions. Therefore, termination benefits that can be quantified reasonably are recognised as an expense in the year in which the decision to terminate the employment relationship is taken. The accompanying consolidated financial statements do not include any provision in this connection, since no situations of this nature are expected to arise.

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3.17. Consolidated statement of comprehensive income

The Group opted to present all recognised income and expense items in two separate statements. The components of profit or loss for the year are displayed in the consolidated income statement and the second statement, which starts with the profit or loss for the year, displays the components of other comprehensive income.

The principal components of other comprehensive income are valuation adjustments to available-for-sale financial assets, cash flow hedges and translation differences arising from the translation of the functional currency and the presentation currency. The statement shows as a separate component the changes arising in the same connection at the associates and jointly controlled entities, which are accounted for using the equity method. The statement specifically displays reclassifications of components of other comprehensive income that have been recognised in profit or loss, providing a similar level of detail. Other components of other comprehensive income are, for example, changes in revaluation reserves recognised in accordance with IAS 16 or IAS 38 and actuarial gains and losses on defined benefit plans pursuant to IAS 19.

3.18. Statements of changes in equity

The most significant changes in equity are included in this statement and relate mainly to (i) the comprehensive income for the year; (ii) the amounts of the transactions with owners in their capacity as owners, such as dividends or distributions of share premiums or unrestricted reserves; and (iii) changes in this connection relating to associates and jointly controlled entities.

3.19. Consolidated statement of cash flows

The consolidated statement of cash flows is presented using the indirect method. The following terms are used in the consolidated statement of cash flows:

- Cash flows. 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.

- Cash flows from operating activities. These include the transactions of Group subsidiaries, including payments of interest and taxes and other activities that are not investing or financing activities.

- Cash flows from investing activities. Cash flows from the acquisition and disposal of non-current assets and other investments not included in cash and cash equivalents. They also include the dividends received from financial assets in listed companies and in those accounted for using the equity method.

- Cash flows from financing activities. These include activities that result in changes in the size and composition of the equity and borrowings of the Group.

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4. Goodwill and other intangible assets

The changes in goodwill and other intangible assets in 2013 and 2012 were as follows:

2013 Thousands of euros

Balance at 31/12/12

Additions and charge for the year

Disposals and

impairment Transfers Other

Balance at 31/12/13

Goodwill - - - - 901 901

Other intangible assets (net) 802,165 (28,261) (11,176) (3,748) (12,965) 746,015

Computer software 22,016 3,658 (36) (570) (13,751) 11,317

Administrative concessions 1,032,531 8,348 (16,697) (2,589) (12,077) 1,009,516

Other intangible assets 71,961 3,107 (250) (619) (799) 73,400

Accumulated amortisation (324,343) (43,374) 5,807 30 13,662 (348,218)

Computer software (15,815) (4,237) 1 5 10,938 (9,108)

Administrative concessions (281,733) (36,353) 5,636 31 2,291 (310,128)

Other intangible assets (26,795) (2,784) 170 (6) 433 (28,982)

Impairment losses 610 - - - (610) -

Total 802,775 (28,261) (11,176) (3,748) (12,674) 746,916

"Administrative Concessions" relates mainly to the concessions for the operation of car parks. The asset to be recognised (value of the concession or value of the right to charge users of the public service) as consideration for the infrastructure construction or upgrade services is measured in accordance with IFRIC 12 (see the Note on Accounting policies) and is amortised on a straight-line basis over the concession term.

In 2013 the balance of "Administrative Concessions" decreased as a result of the early termination of the Saba Sanef car park concession in France.

The detail of the main administrative concessions is presented in the Note on Other salient information.

The column “Others” relates to changes in the scope of consolidation and translation differences. 2013 includes primarily: i) the EUR 901 thousand recognised under "Goodwill" relating to the inclusion in the Group's scope of consolidation of Caixa Capital Risc (see the Note on Changes in the scope of consolidation); ii) the disposals under “Computer Software” arising from the sale of Servihabitat Gestión Inmobiliaria S.L.U. to CaixaBank (see the Note on Changes in the scope of consolidation); iii) and translation differences amounting to EUR 8,229 thousand.

The decrease in the balance of "Computer Software" was due to the sale of Servihabitat Gestión Inmobiliaria S.L.U. to CaixaBank (see the Note on Changes in the scope of consolidation).

In 2013 no impairment losses were recognised in the consolidated income statement (2012: EUR 1,000 thousand) (see the Note on Income and expenses).

The fully amortised intangible assets in use at 31 December 2013 amounted to EUR 33,952 thousand (31 December 2012: EUR 33,906 thousand).

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Balance at 31/12/11


Disposals and

impairment Transfers

Changes in the scope of

consolidation and other

Balance at 31/12/12

Goodwill 198 - (198) - - -

Other intangible assets (net) 758,774 (14,518) (1,048) 59,125 (168) 802,165

Computer software 13,715 5,008 (111) 3,358 46 22,016

Administrative concessions 948,925 22,263 (4,937) 69,361 (3,081) 1,032,531

Other intangible assets 64,941 901 (7) 6,063 63 71,961

Accumulated amortisation (268,807) (42,690) 4,007 (19,657) 2,804 (324,343)

Computer software (8,871) (3,550) 42 (3,384) (52) (15,815)

Administrative concessions (239,863) (36,238) 3,959 (12,509) 2,918 (281,733)

Other intangible assets (20,073) (2,902) 6 (3,764) (62) (26,795)

Impairment losses - (1,000) 1,096 - 514 610

Total 758,972 (15,518) (150) 59,125 346 802,775

In 2012 the balance of "Administrative Concessions" increased as a result of the reclassification of buildings located in Chile to administrative concessions (see the Note on Property, plant and equipment) as a result of the construction of new car parks and the capitalisation of fees and charges.

The detail of the carrying amount of the intangible assets located outside Spain at 31 December 2013 and 2012 is as follows:


Cost

Accumulated amortisation

Impairment Carrying

amount

Europe 314,077 (87,276) (17,079) 209,722

Latin America 76,092 (20,171) - 55,921


Cost

Accumulated amortisation

Impairment Carrying

amount

Europe 333,426 (82,806) (16,170) 234,450

Latin America 83,484 (20,098) - 63,386

There are intangible asset construction commitments totalling EUR 178,600 thousand (2012: EUR 180,384 thousand) relating mainly to car parks in progress at Saba Italy. A portion of these commitments are conditional upon the achievement of certain conditions such as securing a predetermined level of presales of parking spaces, as stipulated in the concession contracts.

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5. Property, plant and equipment

The changes in 2013 and 2012 in "Property, Plant and Equipment" in the accompanying consolidated balance sheets were as follows:


Balance at 31/12/12


Disposals and reversals Transfers



Balance at 31/12/13

Land, buildings and construction contracts in progress

136,103 16,019 (358) (50,305) 303 101,762

Cost 171,999 18,300 (391) (60,062) (149) 129,697

Accumulated depreciation (25,135) (2,281) 33 2,891 452 (24,040)

Impairment (10,761) - - 6,866 - (3,895)

Furniture, fixtures and other 15,608 (1,764) (58) 2,334 (1,668) 14,452

Cost 44,690 1,394 (110) 346 (2,495) 43,825


Total 151,711 14,255 (416) (47,971) (1,365) 116,214

The additions to "Land, Buildings and Construction Contracts in Progress" are due primarily to the acquisition of the car park located in Avenida Carlos III (Barcelona) for EUR 15 million by Saba Infraestructuras.

The transfers under "Land, Buildings and Construction Contracts in Progress" relate basically to the reclassification of an office building located at calle Provençals 39, Barcelona, in which Servihabitat XXI (now Criteria), together with other companies in the ”la Caixa” Group, carried on their business activity and a building located at the Paseo de la Castellana 186, Madrid, two commercial premises in Marbella (El Capricho shopping centre) and commercial premises in Mallorca located in Gabriel Alomar Villalonga. As a result of the transaction to spin off the property management business to Servihabitat Gestión Inmobiliaria, S.L.U. and the subsequent sale thereof to CaixaBank described in the Note on Changes in the scope of consolidation, the Company transferred all of the assets previously intended for own use to "Investment Property" (see the Note on Investment property).

Any gains and losses on disposals of property, plant and equipment are recognised under "Other Gains" and "Other Losses", respectively, in the accompanying consolidated income statement (see the Note on Income and expenses).

In 2013 no impairment losses were recognised in the consolidated income statement (2012: EUR 3,528 thousand) (see the Note on Income and expenses).

At 31 December 2013, no bank loans secured by a mortgage on assets -mainly items of property, plant and equipment- had been recognised (2012: EUR 7,352 thousand).

The fully depreciated property, plant and equipment in use at 31 December 2013 amounted to EUR 20,225 thousand (31 December 2012: EUR 17,745 thousand).

- 41 -


Balance at 31/12/11


Disposals and reversals Transfers

Changes in the scope of consolidation

and other Balance at 31/12/12

Land, buildings and construction contracts in progress

173,819 (4,117) (599) (33,311) 311 136,103

Cost 211,521 1,956 (628) (41,575) 725 171,999


Impairment (6,242) (3,528)

9 - (1,000) (10,761)

Furniture, fixtures and other 15,902 518 (145) (350) (317) 15,608

Cost 44,335 3,691 (340) (1,343) (1,653) 44,690

Accumulated depreciation (28,433) (3,173) 195 993 1,336 (29,082)

Total 189,721 (3,599) (744) (33,661) (6) 151,711

The transfers from "Land, Buildings and Construction Contracts in Progress" amounting to EUR 41,575 thousand relate mainly to the reclassification of buildings to administrative concessions (see the Note on Goodwill and other intangible assets). The aforementioned buildings relate mainly to car parks located in Providencia, Santa Lucia, Plaza de Tribunales and Plaza Ciudadanía, all of which are located in Chile.

The detail of the carrying amount of the property, plant and equipment located outside Spain at 31 December 2013 and 2012 is as follows:


Cost

Accumulated depreciation

Impairment Carrying

amount

Europe 77,679 (21,825) (3,893) 51,961

Latin America 323 (241) - 82


Cost


Impairment Carrying

amount

Europe 76,609 (21,239) (23,026) 32,344

Latin America 338 (163) - 175

The Group takes out the insurance policies it considers necessary to cover the possible risks to which its property, plant and equipment are subject.

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6. Investment property

The changes in 2013 and 2012 in "Investment Property" in the accompanying consolidated balance sheets were as follows:


Balance at 31/12/12


Disposals Transfers



Balance at 31/12/13

Cost

Land and buildings 1,346,093 11,711 (15,935) 191,685 2,077 1,535,631

Furniture, fixtures and other 32,910 5,249 (5) 270 4 38,428


Buildings (70,840) (21,164) 148 (6,409) (1,329) (99,594)

Furniture, fixtures and other (13,980) (3,088) 5 - 8 (17,055)

Net

Land and buildings 1,275,253 (9,453) (15,787) 185,276 748 1,436,037

Furniture, fixtures and other 18,930 2,161 - 270 12 21,373

Total, net 1,294,183 (7,292) (15,787) 185,546 760 1,457,410

Impairment losses (163,106) (105,480) - (19,408) 1,529 (286,465)

Total 1,131,077 (112,772) (15,787) 166,138 2,289 1,170,945

As described in Notes 2.7 and 5, the Parent transferred the properties previously used in its own operations classified under "Property, Plant and Equipment" to "Investment Property" for a total net amount of EUR 46,730 thousand (cost of EUR 56,020 thousand, accumulated depreciation of EUR 2,524 thousand and associated impairment losses of EUR 6,766 thousand), as a result of the spin-off of the property management line of business, which has meant that these properties -which until that time were assets used in its own operations- are considered to be investment property since these assets are being leased under the corresponding rental agreement in force until 31 October 2013 with the newly created company Servihabitat Gestión Inmobiliaria, S.L.U. and from 1 November 2013 onwards with Servihabitat Servicios Inmobiliarios.

Also, in 2013 as a result of leasing certain property assets that had been classified under "Inventories", the corresponding reclassification to "Investment Property" was made for a net amount of EUR 127,523 thousand.

The Group recognised impairment amounting to EUR 105,480 thousand on this investment property where the fair value based on appraisals and valuations conducted by independent valuers was lower than the cost recognised. In 2012 impairment losses amounting to EUR 58,349 thousand were recognised.

In 2013 the Group disposed of items of investment property, obtaining pre-tax losses of EUR 1,292 thousand on these sales. In 2012 investment property disposals gave rise to pre-tax losses amounting to EUR 5,637 thousand.

At 31 December 2013, the most significant investments recognised under "Investment Property" relate to property and residential property developments earmarked for lease located in Catalonia, Madrid, Northern Spain and the Spanish region of Levante, and investments in logistics parks located in the Barcelona logistics activity area (Zona Actividades Logísticas, ZAL amounting to EUR 2,303 thousand) and in the Consorci de Parcs Logístics Toulouse (France) (amounting to EUR 4,077 thousand), corresponding to the logistics parks business engaged in by the Saba Group (see detail on logistics parks in the Note on Other salient information).

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At 31 December 2013, there were various bank loans totalling EUR 136,238 thousand (2012: EUR 137,962 thousand) that were secured by mortgages on certain items of investment property.

At 31 December 2013, the fully depreciated investment property still in use amounted to EUR 5,190 thousand (in 2012 there was no fully depreciated investment property still in use).

In 2013 the carrying amount of the investment property located in European countries other than Spain amounted to EUR 40,896 thousand (2012: EUR 58,263 thousand). At 31 December 2013 and 2012, there was no investment property located in Latin America.

In 2013 the rental revenue from the Group’s investment property amounted to EUR 67,408 thousand (2012: EUR 60,253 thousand) (see the Note on Income and expenses). The expenses relating directly to investment property related transactions giving rise to rental income in 2013 amounted to EUR 1,789 thousand (2012: EUR 1,991 thousand).


Balance at 31/12/11


Disposals Transfers



Balance at 31/12/12

Cost

Land and buildings 1,149,958 14,989 (31,925) 248,702 (35,631) 1,346,093

Furniture, fixtures and other 31,212 1,684 - 11 3 32,910


Buildings (59,211) (17,321) (417) 1,220 4,889 (70,840)

Furniture, fixtures and other (10,986) (2,989) - (5) - (13,980)

Net

Land and buildings 1,090,747 (2,332) (32,342) 249,922 (30,742) 1,275,253

Furniture, fixtures and other 20,226 (1,305) - 6 3 18,930

Total, net 1,110,973 (3,637) (32,342) 249,928 (30,739) 1,294,183

Impairment losses (90,095) (58,349) 17,275 (35,198) 3,261 (163,106)

Total 1,020,878 (61,986) (15,067) 214,730 (27,478) 1,131,077

In 2012 the transfers recognised under "Investment Property" relate mainly to the reclassification of buildings formerly classified as non-current assets held for sale or inventories, since they are buildings in the course of construction earmarked for lease, as a result of the Group's property activity. The changes in the scope of consolidation relate to the assets associated with the logistics business owned by the Saba Group in Santiago de Chile, which was sold in 2012. 7. Investments accounted for using the equity method

"Investments Accounted for Using the Equity Method" in the accompanying consolidated balance sheets includes the equity investments in jointly controlled entities and associates.

These investments are accounted for using the equity method on the basis of the best available estimate at the date of preparation of the consolidated financial statements. The figures relating to share capital, reserves and the results of these companies, in addition to any dividends distributed or accrued in 2013, are detailed in Appendix II. For listed companies, the latest published data are given. In the case of unlisted companies, the figures shown relate to the latest actual or estimated data available at the date of preparation of these notes to the consolidated financial statements.

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Thousands of euros

31/12/13 31/12/12

Listed

Underlying carrying amount (1) 5,537,294 5,635,616

Goodwill (2) 1,050,975 1,166,150

Unlisted

Underlying carrying amount (1) 565,314 559,957

Goodwill (2) 126,706 126,706

Subtotal

7,280,289 7,488,429

Less:

Impairment losses

(1,634) (1,185)

Total

7,278,655 7,487,244

(1) Including the purchase price allocation of the acquisition-date fair value of the assets and liabilities.

(2) Corresponding to the difference between the acquisition price and the underlying carrying amount attributable to the investee at the acquisition date.

The detail of the main changes in 2013 and 2012 in "Investments Accounted for Using the Equity Method" is as follows:


Underlying carrying amount

Goodwill TOTAL

Balance at 31/12/12 6,194,388 1,292,856 7,487,244

Purchases and capital increases - - -

Sales (189,188) (115,175) (304,363)

Changes in profit or loss 680,502 - 680,502

Dividends declared (453,740) - (453,740)

Transfers (1,063) - (1,063)

Other changes in reserves (*) (129,476) - (129,476)

Subtotal at 31/12/13 6,101,423 1,177,681 7,279,104

Impairment (449) - (449)

Balance at 31/12/13 6,100,974 1,177,681 7,278,655

(*) Including valuation adjustments and other changes in reserves.

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Underlying carrying amount

Goodwill TOTAL

Balance at 31/12/11 6,042,636 1,319,259 7,361,895

Purchases and capital increases - - -

Sales (84,990) (32,664) (117,654)

Changes in profit or loss 819,854 - 819,854

Dividends declared (480,772) - (480,772)

Transfers (6,425) 6,261 (164)

Other changes in reserves (*) (94,730) - (94,730)

Subtotal at 31/12/12 6,195,573 1,292,856 7,488,429

Impairment (1,185) - (1,185)

Balance at 31/12/12 6,194,388 1,292,856 7,487,244

(*) Including valuation adjustments and other changes in reserves.

Purchases, capital increases and sales

No investments accounted for using the equity method were acquired in 2013.

The detail of the sales made in 2013 is as follows:

Thousands of euros

Sales Underlying carrying

amount Goodwill TOTAL

Abertis Infraestructuras, S.A. (129,836) (108,238) (238,074) Gas Natural, SDG, S.A. (59,352) (6,937) (66,289)

Total sales (189,188) (115,175) (304,363)

The detail of the main transactions carried out in relation to the investments jointly controlled entities and associates in 2013 is as follows:

Abertis Infraestructuras, S.A.

On 22 March 2013, 24,443,675 shares representing 3% of the share capital of Abertis Infraestructuras, S.A. were sold for EUR 342,194 thousand. These shares of Abertis Infraestructuras, S.A. were acquired by OHL Emisiones, S.A.U., a subsidiary of the Obrascón Huarte Laín, S.A. Group.

In addition, in the first quarter of 2013 0.305% of the share capital of Abertis was sold for EUR 33,087 thousand.

The gross gain of EUR 140,831 thousand obtained on these sales was recognised under "Net Gains on Transactions with Group Companies, Jointly Controlled Entities and Associates".

In the framework of the acquisition of 60% of the shares of OHL Brasil (now Arteris) in 2012, in August 2013 Abertis (through Partícipes en Brasil, owned 51% by Abertis and 49% by Brookfield) and Brookfield launched a takeover bid for the remaining 40% of Arteris. In order to respect the rights of the non-controlling shareholders, the bidders had to offer as consideration for the takeover bid an alternative under the same terms and conditions as those offered to OHL (the former controlling shareholder of

- 46 -

Arteris), i.e. two-thirds in shares of Abertis and the remainder in cash. Therefore, Criteria reached an agreement with Abertis and Brookfield to lend them the necessary Abertis shares.

On 5 September 2013, the takeover bid for Arteris launched by Partícipes and Brookfield came to an end with the acceptance of shareholders owning 24.2% of the share capital, meaning that Arteris was owned 69.3% by Partícipes and 14.9% by Brookfield. Partícipes and Brookfield had to hand over 4% of the share capital of Abertis, which they did, using: (i) treasury shares of Abertis; (ii) shares acquired on the market; and (iii) shares borrowed from Criteria.

On 10 September 2013, under the agreements entered into previously, Criteria lent 4,122,550 shares to Abertis and 18,519,282 shares to Brookfield, signifying that a total of 22,641,832 shares had been lent. 50% of the shares had to be returned six months later and the other 50% nine months later, although Abertis and Brookfield could return shares early at their discretion.

To secure the transaction, Criteria received, when the transaction was formalised, collateral of EUR 312,118 thousand, calculated by multiplying the 22,641,832 shares lent by the closing market price of the shares on 5 September (EUR 13.785/share). The collateral is revised when the market price of the shares rises or drops by more than 5% or each time there is a partial reimbursement of the loan.

This loan of shares earns interest at between 75 and 100 basis points on the share price at the date of delivery of the shares on the principal market on which the shares lent are traded. This interest is payable quarterly from the date of delivery.

Since Criteria retains substantially the risks and rewards of ownership of the Abertis shares lent, they were not derecognised from the Company's financial statements.

At 31 December 2013, 16,738,455 Abertis shares had been returned, leaving 5,903,377 shares on loan and collateral of EUR 91,434 thousand (recognised under “Current Liabilities - Financial Liabilities at Amortised Cost” in the consolidated balance sheet).

At 31 December 2013, the ”la Caixa” Group had an economic ownership interest of 19.22% in Abertis and controlled 23.09% (where control is taken to be the total investment held through subsidiaries).

Gas Natural, SDG, S.A.

In 2013 a total of 3,352,139 shares representing 0.33% of the share capital of the company were sold for EUR 51,478 thousand, giving rise to a gross gain of EUR 860 thousand recognised under "Net Gains on Transactions with Group Companies, Jointly Controlled Entities and Associates".

On 20 December 2013, a call option sold on 1,000,000 shares of Gas Natural exercised by the counterparty expired. Criteria opted for the physical delivery of the shares, recognising the resulting gain under "Net Gains on Transactions with Group Companies, Jointly Controlled Entities and Associates" for a gross amount of EUR 2,338 thousand, while the result generated by the financial derivative was recognised under “Net Gains on Financial Transactions” in the accompanying consolidated income statement.

At 31 December 2013, the Group had an economic ownership interest of 34.52% in Gas Natural.

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The detail of the sales made in 2012 is as follows:

Thousands of euros

Sales Underlying carrying

amount Goodwill TOTAL

Abertis Infraestructuras, S.A. (38,422) (32,664) (71,086) Port Aventura Entertainment, S.A. (46,498) - (46,498) Other (70) - (70)

Total sales (84,990) (32,664) (117,654)

The detail of the main transactions carried out in relation to the investments in jointly controlled entities and associates in 2012 is as follows:

Abertis Infraestructuras, S.A.

In 2012 a total of 7,848,241 shares representing 0.98% of the share capital of the company were sold for EUR 83,521 thousand, giving rise to a pre-tax gain of EUR 13,494 thousand, which was recognised under "Net Gains on Transactions with Group Companies, Jointly Controlled Entities and Associates".

Port Aventura Entertainment, S.A. ("Port Aventura")

On 10 December 2012, Criteria formalised the sale of 50% of Port Aventura to Investindustrial for EUR 105 million. The sale transaction gave rise to a pre-tax gain of EUR 50 million, and this amount was recognised under "Net Gains on Transactions with Group Companies, Jointly Controlled Entities and Associates".

Investindustrial, which became a shareholder of Port Aventura in December 2009, already held since that date a 50% ownership interest in the company.

This transaction is in line with the strategy announced when Investindustrial became a shareholder, and which involved permitting the entry of an industrial operator, for the purpose of facilitating Port Aventura's growth through investment in new attractions and hotels.

Impairment

In line with the Group's policy, the appropriate impairment tests were performed on these investments in order to determine their fair value. The main methodology applied was the discounted cash flow ("DCF") method. Conservative assumptions obtained from sources of acknowledged prestige were used. The weighted average cost of capital (WACC) for each business and country was used as the discount rate, which ranged from 6.6% to 10.8% in 2013, and no control premiums were taken into consideration in the valuation of the investees. The growth rates used in calculating the residual value beyond the period covered by the projections were between 0.5% and 1.5%. This growth was determined on the basis of data for the last period projected and in no case exceeds the increase in the nominal GDP estimated for the country or countries in which the investees carry on their business activities.

In view of the degree of uncertainty involved in these assumptions, sensitivity analyses are performed thereon using reasonable changes in the key assumptions on which the recoverable amounts of the cash-generating units are based in order to confirm whether these recoverable amounts continue to exceed the related recoverable amounts. In this regard, to complement the central scenario, possible changes in the main assumptions used in the models were calculated and sensitivity analyses were performed on the most significant variables, including the various business drivers and drivers relating

- 48 -

to the income statements of the investees, in order to check the resistance of the value of these investments to more adverse scenarios.

The basic assumptions used were as follows:

Market risk premium: 5%

Betas obtained from Bloomberg

GDP and CPI: forecasts presented by The Economist Intelligence Unit

The projection periods were adapted, where appropriate, to the characteristics of each company (for example the term of the concessions).

The earnings projections used in the estimation of discount rates were, in certain cases, for more than five years due to the particular circumstances of each holding, e.g. significant investment plans, location of investments in emerging economies, concession terms and other similar factors. In parallel, other more specific factors in relation to the Group's investments were also taken into consideration including, inter alia, lawsuits and country risk, without these factors having a significant potential impact on the valuation of holdings.

Based on the analyses performed and applying conservative criteria and a policy of maximum prudence, it was disclosed that there was a need to recognise impairment losses amounting to EUR 449 thousand in relation to the value of the holdings. It is the policy of Group management to review the valuation of these investments on an ongoing basis.

The financial information of the entities accounted for using the equity method, based on the most recent public information available, is summarised as follows:

2013 In thousands of euros

Entity Assets Liabilities Income Profit attributable to

the Parent

Abertis Infraestructuras, S.A. 28,133,532 21,543,909 4,653,525 616,826 Gas Natural, SDG, S.A. 44,945,389 29,935,591 25,182,243 1,444,563 Other unlisted companies 5,876,709 3,077,614 2,234,922 148,875

2012 In thousands of euros

Entity Assets Liabilities Income Profit attributable to

the Parent

Abertis Infraestructuras, S.A. 29,086,551 22,125,712 4,038,357 1,024,430 Gas Natural, SDG, S.A. 46,887,568 32,008,649 25,154,226 1,440,179 Other unlisted companies 5,994,005 3,221,862 2,115,985 129,661

- 49 -

Goodwill

The detail at 31 December 2013 and 2012 of the goodwill included under “Investments Accounted for Using the Equity Method” is as follows:

Thousands of euros

Entity 31/12/13 31/12/12

Abertis Infraestructuras, S.A. 500,376 608,614

Gas Natural, SDG, S.A. 550,599 557,536

Hisusa, S.A. 111,213 111,213

Vithas Sanidad, S.L. 15,493 15,493

Total 1,177,681 1,292,856

8. Financial assets

The detail of the financial assets in the accompanying consolidated balance sheets is as follows:

Thousands of euros

31/12/13 31/12/12

Financial assets Non-current Current Non-Current Current

Available-for-sale financial assets 15,084 - 33,912 -

Loans and receivables 26,902 104,581 120,996 184,402

Total 41,986 104,581 154,908 184,402

The following tables detail the maturities of the financial assets of the Group at 31 December 2013 and 2012 (excluding cash and cash equivalents):

2013 Maturity (in thousands of euros)

Type of financial item

Within 12 months

Between 1 and 3 years

3 to 5 years After 5 years or no maturity date

ASSETS

Available-for-sale financial assets - - - 15,084

Loans and receivables 101,666 5,999 - -

Short-term bank deposits 117 - - -

Other financial assets 2,798 - - 20,903

Total 104,581 5,999 - 35,987


Type of financial item

Within 12 months


3 to 5 years After 5 years or no maturity date

ASSETS

Available-for-sale financial assets - - - 33,912

Loans and receivables 182,064 32,714 - 70,000

Short-term bank deposits 67 - - -

Other financial assets 2,271 - - 18,282

Total 184,402 32,714 - 122,194

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8.1. Available-for-sale financial assets

The changes in “Available-for-Sale Financial Assets”, based on the nature of the related transactions, is as follows:


Purchases and

capital Valuation

31/12/12 increases Sales adjustments Impairment 31/12/13

Metrovacesa, S.A. 7,795 - (1,834) (5,961) - -

Inmobiliaria Colonial, S.A. 21,311 - - (6,746) (876) 13,689

Total listed companies 29,106 - (1,834) (12,707) (876) 13,689

Other unlisted 4,806 - - - (3,411) 1,395

Total unlisted companies 4,806 - - - (3,411) 1,395

Total 33,912 - (1,834) (12,707) (4,287) 15,084


Purchases

and capital Valuation

31/12/11 increases Sales adjustments Impairment 31/12/12

Metrovacesa, S.A. 10,547 - - 5,961 (8,713) 7,795

Inmobiliaria Colonial, S.A. 117,668 - - 10,198 (106,555) 21,311

Total listed companies 128,215 - - 16,159 (115,268) 29,106

Other unlisted 8,244 1,438 (1,371) - (3,505) 4,806

Total unlisted companies 8,244 1,438 (1,371) - (3,505) 4,806

Total 136,459 1,438 (1,371) 16,159 (118,773) 33,912

Metrovacesa, S.A.

On 29 January 2013, the Extraordinary General Meeting of Metrovacesa, S.A. approved the delisting from the Spanish Stock Exchange of all the company's shares and the takeover bid for the company's shares launched by the bidders (BBVA, Banco Sabadell, Banco Popular and Santander). The offer price was EUR 2.28/share. Criteria, with a holding of 0.36% of the share capital of Metrovacesa, S.A., accepted the bid, which was settled on 17 May 2013 for a total of EUR 8,042 thousand, recognising the gross gain of EUR 6,208 thousand obtained under "Net Gains on Financial Transactions".

Inmobiliaria Colonial, S.A.

After the end of the 2013 reporting period, the Group sold its holding in Inmobiliaria Colonial (see the Note on Events after the reporting period).

Impairment

In accordance with management criteria, and in view of the economic situation and the fall in market prices, the existence of objective evidence that the value of the available-for-sale financial assets has become impaired is reviewed on a regular basis.

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At 31 December 2013, the Group analysed the possible impairment of all its equity instruments classified as available-for-sale financial assets in order to recognise, as appropriate, the related impairment losses. For these purposes, an asset is considered to be impaired when the cumulative falls in market value have taken place over a period exceeding 18 months or by more than 40%.

In 2013 the Group recognised an impairment loss of EUR 876 thousand on its holding in Inmobiliaria Colonial as a result of the fall in its market price. Impairment was also recognised on the ownership interests in Vehículo de Tenencia y Gestión 9, S.L. and Aliancia Zero, S.A. amounting to EUR 1,701 thousand and EUR 1,710 thousand, respectively.

8.2. Loans and receivables

The detail of “Loans and Receivables” at 31 December 2013 and 2012 is as follows:

Thousands of euros

31/12/13 31/12/12

Non-current Current Non-current Current

Sundry accounts receivable 5,999 101,783 102,714 182,131

Other financial assets 20,903 2,798 18,282 2,271

Total 26,902 104,581 120,996 184,402

The change in "Non-Current Financial Assets - Sundry Accounts Receivable" relates to the early repayment of the EUR 70 million loan (plus the accrued interest receivable) granted to PortAventura by Mediterránea Beach & Golf Community, S.A.U. arising from the sale of the buildings performed in 2011. The loan earns interest at 8% and matures in November 2021. Interest of EUR 6,171 thousand was earned in 2013 (2012: EUR 5,675 thousand) and was recognised under "Finance Income" in the accompanying consolidated income statement.

“Sundry Accounts Receivable” includes at 31 December 2013 EUR 78,265 thousand relating to the amounts receivable from “la Caixa” in connection with the final income tax settlement for 2012.

“Other Financial Assets” includes, inter alia, balances receivable, sundry loans and guarantees given.

The detail of the gross balance of "Sundry Accounts Receivable" and of the related impairment is as follows:

Thousands of euros

31/12/13 31/12/12

Non-current Current Non-current Current

Sundry accounts receivable - gross 8,189 107,045 109,059 184,329

Impairment losses (2,190) (5,262) (6,345) (2,198)

Ending balance 5,999 101,783 102,714 182,131

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The changes in impairment losses in 2013 and 2012 were as follows:

Thousands of euros 31/12/13 31/12/12

Beginning balance (8,543) (6,002)

Add:

Impairment losses charged to profit or loss (81) (1,052)

Less:

Amounts reversed 1,045 -

Amounts written off - 472

Changes in the scope of consolidation and other 127 (1,961)

Ending balance (7,452) (8,543)

9. Inventories

The detail of "Inventories" in the accompanying consolidated balance sheets is as follows:


Building lots and developments in progress 1,437,217 2,308,467

Completed property developments 18,382 31,510

Advances 37,745 4,672

Write-downs (694,972) (1,199,421)

Total 798,372 1,145,228

"Inventories" includes mainly land and buildings that are under construction valued at the lower of cost, including borrowing costs, and realisable value, which is taken to be the estimated selling price net of the estimated costs for their production and sale.

"Advances" includes assets for which the Group has entered into a long-term swap agreement consisting of the transfer of land to developers in exchange for buildings constructed on that land. At 31 December 2013, these swapped assets totalled EUR 37,745 thousand.

In September 2012 Mediterránea Beach & Golf Community granted Veremonte España, S.L. an option to purchase the land it owned adjacent to the Port Aventura theme park. The carrying amount of the land at 2013 year-end was EUR 278 million. This option gives Veremonte the right, but does not oblige it, to acquire the land. The premium paid for the purchase option amounted to EUR 1 million and was recognised under "Other Non-Current Liabilities" in the accompanying consolidated balance sheet.

The changes in "Inventories" in the accompanying consolidated balance sheets is as follows:


Beginning balance 2,344,649 2,491,864

Purchases 11,487 22,543

Sales (52,806) (44,222)

Transfers and other (809,939) (125,525)

Write-downs recognised in profit or loss (47) (11)

Total gross 1,493,344 2,344,649

Write-downs (694,972) (1,199,421)

Ending balance 798,372 1,145,228

- 53 -

The purchases in 2013 relate to additions for building transfers and capitalisable expenses. In 2012 "Purchases" related to acquisitions of building lots and property developments that were financed by the “la Caixa” Group.

In 2013 the Group transferred properties included under "Inventories" to "Investment Property", since they are held to earn rentals, and to "Non-Current Assets Classified as Held for Sale", since they are held for sale (see the Notes on Investment property and Non-current assets classified as held for sale).

Also, in 2013 the Group disposed of items of inventories, giving rise to pre-tax gains of EUR 1,934 thousand on these sales (see the Note on Other gains and losses). In 2012 inventory disposals gave rise to pre-tax losses amounting to EUR 2,910 thousand.

In 2012 the Group transferred properties included under "Inventories" to "Investment Property" as they were earmarked for lease.

The changes in the write-downs in 2013 and 2012 were as follows:


Beginning balance (1,199,421) 722,812

Period write-downs 986 585,232

Transfers 498,401 (97,412)

Amounts written off 5,062 (11,211)

Ending balance (694,972) 1,199,421

10. Non-current assets classified as held for sale

The detail of "Non-Current Assets Classified as Held for Sale" in the accompanying consolidated balance sheets is as follows:


Building lots 1,567,807 795,710

Completed developments 1,034,215 1,236,739

Advances 26,738 31,992

Impairment losses (1,384,836) (773.708)

Total 1,243,924 1,290,733

"Advances" includes the following:

- The amounts deposited at courts in order to be able to participate in auctions of properties amounted to EUR 4,127 thousand at 31 December 2013. These amounts are recoverable in the short term. "Advances" also includes the cash advances paid to third parties for various administration and management processes relating to the Group's properties. The aforementioned advances are not secured.

- At 31 December 2013, “Advances” includes EUR 10,144 thousand relating to the payments made to the CaixaBank as advances on buildings that are expected to be acquired by the Group from its sole shareholder in the short term.

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- At 31 December 2013, "Advances" also included EUR 12,377 thousand corresponding to cash advances paid.

The changes in 2013 and 2012 in "Non-Current Assets Classified as Held for Sale" were as follows:


Beginning balance 2,064,441 2,650,187

Add:

Business combinations and changes in the scope of consolidation

- -

Additions 71,401 192,906

Less:

Sales (186,312) (619,600)

Transfers and other 679,230 (159,052)

Total gross 2,628,760 2,064,441

Impairment losses (1.384,836) (773.708)

Ending balance 1,243,924 1,290,733

The additions in 2013 relate to the constructed buildings received in accordance with the swap deeds. The additions in 2012 related mainly to the acquisition of property developments financed by the “la Caixa” Group.

In 2013 the Group transferred properties recognised under "Inventories" to "Non-Current Assets Classified as Held for Sale" as they were earmarked for sale and a formal plan had been established in this connection.

In 2012 the Group transferred property recognised under "Non-Current Assets Classified as Held for Sale" to "Investment Property" as they were earmarked for lease.

In 2013 the disposals of non-current assets classified as held for sale gave rise to a pre-tax loss of EUR 20,496 thousand (losses of EUR 120,450 thousand in 2012) (see the Note on Other gains and losses).

The changes in impairment losses in 2013 and 2012 were as follows:


Beginning balance (773,708) (684,856)

Add:

Additions (215,730) (144,412)

Transfers and other (491,667) (61,478)

Less:

Disposals 22,865 59,332

Amounts written off 73,404 57,706

Ending balance (1,384,836) (773,708)

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11. Cash and cash equivalents

The detail of “Cash and Cash Equivalents” is as follows:

Thousands of euros

Interest rate

Other information Type of contract 31/12/13 31/12/12

Interest-earning demand deposits 345,730 255,157 Mainly 3-month

Euribor plus 20 basis points

Held mainly with CaixaBank

Other non-interest-earning demand deposits 27,211 28,316 - -

Total 372,941 283,473

The interest earned in 2013 on cash and cash equivalents amounted to EUR 5,470 thousand (2012: EUR 5,693 thousand) and is recognised under "Finance Income" in the accompanying consolidated income statement.

In 2013 Criteria CaixaHolding arranged six deposits with CaixaBank for a minimum amount of EUR 125,000 thousand and a maximum amount of EUR 200,000 thousand, which earned nominal interest at a minimum rate of 0.87% and a maximum rate of 1.13%. At 31 December 2013, no deposits had been arranged with CaixaBank.

The balance of "Cash and Cash Equivalents" matures in full within twelve months.

12. Equity

The consolidated statement of changes in equity shows the changes in equity in 2013 and 2012. Following is a breakdown and a description of the most significant changes.

12.1. Share capital

As a result of the merger of Servihabitat XXI (the absorbing company) and Criteria CaixaHolding (the absorbed company), the Parent's share capital became the share capital of the absorbing company. As a result, at 31 December 2013 the share capital was represented by 34,538,000 fully subscribed and paid shares of EUR 40 par value each. The capital reduction was recognised in reserves.

At 31 December 2012, the share capital of Criteria (the absorbed company) amounted to EUR 3,225,000 thousand.

The Parent’s shares are not officially listed.

12.2. Share premium

As a result of the downstream merger between Criteria CaixaHolding (the absorbed company) and Servihabitat XXI (the absorbing company), the share premium balance became the share premium of the absorbing company (31 December 2013: EUR 0) and the share premium of the absorbed company was reclassified to reserves.

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The balance of “Share Premium” arose as a result of the contribution effected on 1 August 2011. The capital increase resulted in the issuance of 3,224,939,800 shares of EUR 1 par value each, with share premium of 2.131493087 per share (EUR 6,873,938 thousand). On that same date, the sole shareholder resolved to transfer EUR 645,000 thousand to the legal reserve with a charge to the share premium.

The Board of Directors of ”la Caixa”, the sole shareholder of Criteria CaixaHolding, S.A.U. (absorbed company), in its meeting held on 11 April 2013, approved the distribution of EUR 584,000 thousand with a charge to the share premium. This amount was paid to the sole shareholder on 15 April 2013 in a single payment.

In 2012 share premium distributions were approved totalling EUR 497,435 thousand and the share premium balance at 31 December 2012 was EUR 5,463,285 thousand.

12.3. Reserves

The reserves include the net amount of the accumulated profit or loss recognised in prior years through the consolidated income statement which, in the distribution of profit, was allocated to equity, plus the costs incurred in issuing own equity instruments.

Restrictions on the availability of accumulated profits and other reserves

The share premium and reserves attributable to the Parent include the legal reserve amounting to EUR 24,582 thousand at 31 December 2013. This legal reserve may not be distributed to shareholders except in the event of the liquidation of the Parent. Under the Consolidated Spanish Limited Liabilities Company 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.

At 31 December 2013, the balance of the Parent's legal reserve had not reached the legally required minimum.

There are no other significant restrictions on the availability of the reserves.

12.4. Valuation adjustments

Available-for-sale financial assets

This heading in the accompanying consolidated balance sheets includes the amount, net of the related tax effect, of the differences between market value and acquisition cost (net gains/losses) of the assets classified as available for sale which must be classified as part of equity. These differences are recognised in the consolidated income statement when the assets that give rise to them are sold or become impaired.

Cash flow hedges

This heading in the accompanying consolidated balance sheets includes the amount, net of the related tax effect, of changes in value of the financial derivatives designated as cash flow hedges, in respect of the effective portion of the aforementioned hedges.

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Exchange differences

This heading includes the net amount of exchange differences arising on non-monetary items changes in the fair value of which are recognised in equity and the differences arising on the translation to euros of the balances in the functional currencies of the fully and proportionately consolidated companies and the companies accounted for using the equity method whose functional currency is not the euro.

Companies accounted for using the equity method

This heading includes the valuation adjustments, cash flow adjustments and exchange difference adjustments which took place in relation to associates and jointly controlled entities accounted for using the equity method.

The changes in "Valuation Adjustments" in 2013 and 2012 were as follows:

2013

Thousands of euros

Amounts transferred to profit or loss Valuation

gains and losses

before tax Deferred

tax liabilities

Balance at 31/12/12 Before tax Income tax

Balance at 31/12/13

Available-for-sale financial assets 11,311 (6,208) 1,862 (6,499) 1,950 2,416

Cash flow hedges (8,461) - - 6,113 (3,618) (5,966)

Exchange differences 2,217 - - (2,040) - 177

Companies accounted for using the equity method (49,677) (12,766) - (62,290) - (124,733)

Total (44,610) (18,974) 1,862 (64,716) (1,668) (128,106)

2012

Thousands of euros

Amounts transferred to profit or loss Valuation gains and

losses before tax

Deferred tax liabilities

Balance at 31/12/11 Before tax Income tax

Balance at 31/12/12

Available-for-sale financial assets - - - 16,159 (4,848) 11,311

Cash flow hedges (6,365) (644) 193 (8,445) 6,800 (8,461)

Exchange differences 1,860 - - 357 - 2,217

Companies accounted for using the equity method (11,781) (1,140) - (36,756) - (49,677)

Total (16,286) (1,784) 193 (28,685) 1,952 (44,610)

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12.5. Distribution of the profit or loss of the Parent and dividends

The distribution of the profit of the Parent for 2013 proposed by the directors of Criteria CaixaHolding is as follows:

Thousands of euros

2013

Basis of distribution:

Profit for the year 110,055

Distribution:

To legal reserve 11,006

To voluntary reserves 18,049

Dividends 81,000

Total 110,055

At its meeting held on 13 June 2013 the Board of Directors of the absorbed company resolved to pay an interim dividend of EUR 81,000 thousand out of the profit for 2013, which was paid to ”la Caixa” on 17 June 2013.

The profits or losses of the individual Group companies will be appropriated as resolved at their respective Annual General Meetings.

12.6. Non-controlling interests

This heading relates to the share of non-controlling shareholders in the equity and profit or loss for the year of the fully consolidated Group companies. The changes in 2013 and 2012 in "Non-Controlling Interests" in the consolidated balance sheet were as follows:


Balance at 31/12/12

Profit (Loss) for the year


consolidation and in

percentage of ownership

Reclassifications and other

Interim dividends


Balance at 31/12/13

Company

Inversiones Autopistas, S.L.

77,849 (8) - 20,798 (21,310) - 77,329

Saba Infraestructuras, S.A. 234,903 (3,187) - (4,830) - 456 227,342

Other 70,603 24,214 - (9,209) (10,922) (3,892) 70,794

Total 383,355 21,019 - 6,759 (32,232) (3,436) 375,465

In 2013 the amount recognised under "Reclassifications and Other" attributed to Inversiones Autopistas, S.L. relates mainly to the dividends attributed to non-controlling interests collected in the year in relation to the ownership interest this subsidiary has in Abertis Infraestructuras, S.A.

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Balance at 31/12/11

Profit (Loss) for the year


consolidation and in

percentage of ownership

Reclassifications and other

Interim dividends


Balance at 31/12/12

Company

Inversiones Autopistas, S.L.

60,134 (8) - 38,918 (21,195) - 77,849

Saba Infraestructuras, S.A. 212,451 5,811 22,136 (2,550) - (2,945) 234,903

Other 72,308 39,923 - (34,824) (10,402) 3,598 70,603

Total 344,893 45,726 22,136 1,544 (31,597) 653 383,355

12.7. Capital management objectives, policies and processes followed by the Group

The Group manages its capital to provide the companies composing it with sufficient economic resources to be able to carry on their business activities. Aside from rationally and objectively managing the capital required to cover the risks assumed through its activity, the Group aims to maximise the return for the shareholder through an appropriate debt-to-equity balance. This policy, however, should be interpreted within the context of the capital management policy of its sole shareholder “la Caixa”, as it is a financial services company regulated in Spain, with its own internal risk and regulatory capital management model.

For management purposes, the Group considers the debt comprising certain loans and credit facilities, included in the Note on Financial liabilities at amortised cost, cash and cash equivalents and the portion of equity made up of share capital, reserves and retained earnings as capital.

The objectives established above are met by determining the individual requirements of each of the entities, fulfilling the obligations arising from the industries in which they operate and providing the Parent with its own resources.

Group management periodically reviews the capital structure.

13. Long-term provisions

The changes in "Long-Term Provisions" in 2013 and 2012 were as follows:


Balance at 31/12/12

Charge for the year

Provisions reversed

Amounts used

Transfers and other

Balance at 31/12/13

Provisions for replacements and charges 168,431 4,143 - (17,405) (5,200) 149,969

Provisions for other third-party liability 23,613 - (205) 5 (394) 23,019 Total 192,044 4,143 (205) (17,400) (5,594) 172,988

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2012

Thousands of euros

Balance at 31/12/11

Charge for the year

Provisions reversed

Amounts used

Transfers and other

Balance at 31/12/12

Provisions for replacements and charges 157,300 - - (5,994) 17,125 168,431

Provisions for other third-party liability 30,609 - - (8,295) 1,299 23,613 Total 187,909 - - (14,289) 18,424 192,044

Provisions for replacements and charges

The Group includes the provisions for replacements and charges it will have to cover throughout the term of the administrative concessions it has been granted. Within the framework of the application of IFRIC 12 pursuant to the intangible asset model, the future actions the concession operator is required to undertake arising from the use of the infrastructure for its maintenance or restoration have been defined, for which the related provisions have been recognised on the basis of the best possible estimate of the expenditure required.

Provisions for other third-party liability

In 2012 the provisions for other third-party liability were used, inter alia, to settle the obligations assumed in relation to the guarantees provided to the acquirers in sales of companies.

14. Financial liabilities at amortised cost

The detail of “Financial Liabilities at Amortised Cost” in the accompanying consolidated balance sheets at 31 December 2013 and 2012, based on the nature of the financial instrument giving rise to the liability, is as follows:

Thousands of euros

31/12/13 31/12/12

Financial liabilities at amortised cost Non-current Current Non-current Current

Bank borrowings 3,066,178 75,082 2,124,348 1,375,690

Other financial liabilities - 176,619 - 33,794

Total 3,066,178 251,701 2,124,348 1,409,484

The Group's financial liabilities at 31 December 2013 and 2012 mature as follows:


Type of financial liability Within 12 months



After 5 years or no maturity date

Bank borrowings 75,082 797,254 2,050,456 218,468

Other financial liabilities 176,619 - - -

Total 251,701 797,254 2,050,456 218,468

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Bank borrowings 1,375,690 39,218 1,650,506 434,624

Other financial liabilities 33,794 - - -

Total 1,409,484 39,218 1,650,506 434,624

14.1. Bank borrowings

The detail of the non-current and current bank borrowings at 31 December 2013 and 2012 is as follows:

2013

Thousands of euros

Limit Amount

Non-current Current Average

interest rate Maturity

Credit facilities and lines Between EUR

225 million and EUR 750 million

636,319 6,375 6-month Euribor + 2.4% - 12 month Euribor + 2.525%

April 2015 - December 2017

Loans and credits facilities 1,057,414 12,757 0.955% - 6-month

Euribor+2.4% June 2015 - June 2051

Other 1,372,445 55,950 6-month

Euribor+2.9% January 2020

Total 3,066,178 75,082

On 20 November 2013, “la Caixa” granted a loan of EUR 270 million to Criteria (formerly Servihabitat XXI) which it used to cover the balance drawn down against the credit facility held with CaixaBank. In turn, the limit of the credit facility was increased to EUR 750 million. At 31 December 2013, no amounts had been drawn down against this credit facility.

On 13 December 2013, “la Caixa” granted a loan of EUR 280 million to Criteria CaixaHolding, maturing on 30 June 2015. The Group used this cash to repay the facility Mediterránea held with CaixaBank.

On 24 December 2013, ”la Caixa” granted a credit facility to Criteria CaixaHolding with a limit of EUR 650 million. At 31 December 2013, EUR 400 million had been drawn down and used to repay the loan of EUR 650 million held with CaixaBank.

"Non-Current Payables - Other" includes the EUR 1,350 million debenture issue launched by Servihabitat XXI (now Criteria) in June 2012. On 29 November 2013, the terms and conditions of the aforementioned non-convertible debentures were amended. Specifically, the interest rate was changed from a fixed rate of 4.94% to a floating rate of 6-month Euribor plus a spread of 2.9%. Also, the maturity of the debentures was extended to 1 January 2020.

"Current Payables - Other" also includes EUR 33,345 thousand corresponding to the interest accrued on the aforementioned non-convertible debentures issued in June 2012 by Servihabitat XXI (now Criteria).

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2012

Thousands of euros

Limit Amount

Non-current Current Average interest rate Maturity

Credit facilities and lines Between EUR 225 million and EUR

600 million 242,611 658,300

1-month Euribor+2.5bp - 4.65%

June 2013 - April 2015

Loans and credits facilities 514,472 671,119 Floating November 2013 - January 2029

Other 1,367,265 46,271 4.94% June 2017

Total 2,124,348 1,375,690

On 28 June 2012, the Group subsidiary Servihabitat XXI, S.A.U. (now Criteria) issued non-convertible debentures amounting to EUR 1,350 million, maturing on 28 June 2017 and bearing interest at a fixed rate of 4.94%. The proceeds from the debenture issue were used to partially repay the credit facility of EUR 2,000 million with CaixaBank outstanding at 2011 year end. The balance of EUR 650 million outstanding at 2012 year-end was recognised under "Current Loans and Credit Facilities". The amount of the non-convertible debentures was recognised under "Non-Current Payables - Other". The aforementioned non-convertible debenture issue was subscribed in full by CaixaBank.

On 13 February 2013, the extension of the maturity of the aforementioned credit facility to 1 November 2014 was approved.

14.2. Other financial liabilities

The detail of “Current Liabilities - Other Financial Liabilities” at 31 December 2013 and 2012 is as follows:

Thousands of euros

31/12/13

31/12/12

Trade payables 68,798 25,921

Guarantees received 12,020 5,743

Other payment obligations 3,189 763

Deposits received as security 91,434 -

Other 1,178 1,367

Total 176,619 33,794

"Deposits Received as Security" includes the balance of the collateral arising from the arrangement of Abertis' securities loan with Brookfield and Abertis. When the loan was arranged (10 September 2013), Criteria received collateral of EUR 312,118 thousand, calculated by multiplying the 22,641,832 shares loaned at that date by the closing market price on 5 September (EUR 13.785 per share). At 31 December 2013, the balance amounted to EUR 91,434 thousand (see the Note on Investments accounted for using the equity method").

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15. Other non-current liabilities

15. 1 Derivative financial instruments

The detail of the derivative financial instruments, by category, is as follows:

Thousands of euros

31/12/13 31/12/12

LIABILITIES

Hedging derivative financial instruments

Cash flow hedges 13,734 23,624

Total non-current 13,734 23,624

Trading derivative financial instruments - 383

Hedging derivative financial instruments

Cash flow hedges 48 -

Total current 48 383

Total derivative financial instruments 13,782 24,007

Interest rate cash flow hedges

The non-current liability cash flow hedges relate to interest rate swaps with an average interest rate of between 2.08% and 4.45%, mostly maturing at over three years.






Derivatives 48 316 11,066 2,352






Derivatives - 127 600

22,897

The tables below provide information on the hedging derivative contracts in force at 31 December 2013 and 2012:

2013

Thousands of euros

Maturity (notional)

Type of contract Fair

value Maturity (notional)

Average interest rate

Within 1 year


After 5 years

Swaps and similar transactions

13,782 211,284 2.08%-4.45% 9,115 160,000 42,169

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2012

Thousands of euros

Maturity (notional)

Type of contract Fair

value Maturity (notional)

Average interest rate

Within 1 year


After 5 years

Swaps and similar transactions

23,624 265,980 2.08%-4.45% 3,000 169,115 93,865

The foregoing include hedging contracts arranged with CaixaBank with a nominal value of EUR 51 million in 2013 (2012: EUR 65 million). The other hedging contracts were arranged with other Spanish banks (notional amount of EUR 67 million) and foreign banks (notional amount of EUR 93 million).

Valuation model:

To determine the fair value of the interest rate derivatives (swaps or IRSs), the Group used valuations based on an analysis of the discounted cash flows and, in the case of unquoted derivatives, took into account assumptions based mainly on the market conditions at the reporting date.

In 2013 and 2012 effectiveness tests were performed on the aforementioned hedges. Any ineffective hedges, in view of their nature as cash flow hedges, were recognised under “Net Gains on Financial Transactions” in the consolidated income statement.

15. 2 Other non-current liabilities

The detail of "Other Non-Current Liabilities" at 31 December 2013 and 2012 is as follows:

Thousands of euros

31/12/13

31/12/12

Payable to trade suppliers 14,210 96,825

Other payment obligations 180 1,550

Other 744 2,716

Total 15,134 101,091

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16. Tax matters and income tax

16.1. Tax assets and liabilities

The detail of the tax assets and tax liabilities at 31 December 2013 and 2012 is as follows:

Thousands of euros

31/12/13 31/12/12

Tax assets Non-current Current Non-current Current

Deferred tax assets 395,447 - 770,610 -

Due to business combinations 35,290 - 35,290 -

Tax loss carryforwards 254,900 - 27,721 -

Tax credit carryforwards 369,801 - 235,998 -

Arising on valuation of cash flow hedges 8,093 - 11,703 -

Tax withholdings and pre-payments - 2,022 - 771

Tax - Other items 2 15,217 2 22,520

Total 1,063,533 17,239 1,081,324 23,291

"Deferred Tax Assets" includes EUR 164 million relating to the differences between the carrying amounts of ownership interests and their tax bases and EUR 210 million relating to non-tax-deductible expenses for accounting purposes, due basically to inventory write-downs and non-current assets classified as held for sale.

The balance of "Tax Loss Carryforwards" includes EUR 179,508 thousand relating to tax losses incurred in 2012 that were not offset by the tax group in its definitive income tax return for 2012. Also, this account includes the effect of the recognition of the tax losses incurred in 2013 amounting to EUR 53,468 thousand by the companies belonging to the tax group.

Thousands of euros

31/12/13 31/12/12

Tax liabilities Non-current Current Non-current Current

Other deferred tax liabilities (275,853) - (284,686) -

Due to business combinations (69,643) - (73,413) - Tax liabilities resulting from valuation of available-for-sale financial assets (1,035) - (4,848) -

Tax liabilities resulting from valuation of cash flow hedges (9) -

Income tax - (3,724) - (104,728)

Other current tax liabilities - (5,182) - (4,482)

Total (346,540) (8,906) (362,947) (109,210)

"Other Deferred Tax Liabilities" includes basically EUR 212 million relating to differences between the costs for tax and accounting purposes of ownership interests.

The tax credit carryforwards at 31 December 2013 include mainly double taxation tax credits.

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16.2. Income tax

Special consolidation regime

In accordance with Transitional Provision Forty-Two of the Consolidated Spanish Income Tax Law introduced by Spanish Savings Banks and Bank Foundations Law 26/2013, and based on the restructuring transactions envisaged in the Group pursuant to that Law, Criteria CaixaHolding files consolidated tax returns, as a subsidiary, as part of tax group no. 20/1991.

Reconciliation of the accounting profit to the income tax benefit

The table below shows the reconciliation of the income tax benefit recognised in the consolidated income statements for 2013 and 2012 to the accounting profit and the average effective tax rate:

Thousands of euros

2013 2012

Profit (Loss) before tax (1) 448,435 (209,697)

Adjustments for:

Result of companies accounted for using the equity method (680,502) (819,854)

Profit (Loss) after adjustments for result of companies accounted for using the equity method

(232,067) (1,029,551)

Tax charge (30%) 69,620 308,865

Adjustments to the tax charge: (29,092) 9,071

Investment disposals taxed at lower rate (4,814) 11,611

Derecognition of deferred tax assets (31,750) -

Tax credit for reinvestment of income from investment disposals 14,143 2,052

Tax withholdings and other (6,671) (4,592)

Income tax (2) 44,288 312,369

- Income tax for the year (income/(expense)) 40,528 317,936

- Adjustment to 2012 income tax 3,760 (5,567)

Profit after tax (1) + (2) 492,723 102,672

Change in deferred tax assets and liabilities

The changes in deferred tax assets and liabilities and their impact on the consolidated income statement were as follows:

Thousands of euros

Consolidated balance sheet Consolidated income statement

Deferred tax assets 31/12/13 31/12/12 2013 2012

Deferred tax assets 395,447 770,610 (10,719) 21,990

Due to business combinations 35,290 35,290 - 7,390

Tax loss carryforwards 254,900 27,721 - 3,136

Tax credit carryforwards 369,801 235,998 133,802 -

Arising on valuation of cash flow hedges 8,093 11,703 - 193

Other 2 2 - -

Total 1,063,533 1,081,324 123,083 32,709

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Thousands of euros

Consolidated balance sheet Consolidated income statement

Deferred tax liabilities 31/12/13 31/12/12 2013 2012

Due to business combinations (39,643) (73,413) (3,770) (3,781)

Tax liabilities resulting from valuation of available-for-sale financial assets

(1,035) (4,848) (1,862) -

Tax liabilities resulting from valuation of cash flow hedges (9) - - -

Other deferred tax liabilities (275,853) (284,686) - -

Total (346,540) (362,947) (5,632) (3,781)

Net deferred tax assets 716,993 718,376 117,451 28,928

The detail of income tax in 2013 and 2012 is as follows:

Thousands of euros

2013 2012

Profit or loss

Income tax for the year:

Current tax (76,923) 289,008

Adjustments to prior years' tax 3,760 (5,567)

Deferred tax:

Relating to changes in temporary differences 117,451 28,928

Income tax benefit / (expense) recognised in the consolidated income statement 44,288 312,369

Thousands of euros

2013 2012

Consolidated statement of comprehensive income

Deferred tax relating to items charged or credited directly to other comprehensive income in the year:

Net gains/(losses) on cash flow hedges 15,534 6,800

Unrealised gains/(losses) on available-for-sale financial assets 1,950 (4,848)

Income tax benefit / (expense) charged directly to other comprehensive income 17,484 1,952

16.3. Years open for review by the tax authorities

Under current legislation, tax returns may not be considered to be final until they have been reviewed by the tax authorities or until the statute of limitations period has expired. The last four years since the close of the statutory filing period are open for review by the tax authorities.

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17. Income and expenses

The detail of the main consolidated income statement headings is as follows.

17.1. Revenue

The detail of “Revenue” in the accompanying consolidated income statements for 2013 and 2012 is as follows:

Thousands of euros

Revenue 2013 2012

Revenue from sales and services 155,197

151,712

Revenue from leases 67,408 60,253

Other operating income 126,810 71,777

Total 349,415 283,742

“Revenue from Sales and Services” includes EUR 150,694 thousand (2012: EUR 148,553 thousand) relating basically to revenue from the operation of car parks for both the general public and residents. It also includes revenue from the operation of logistics parks.

“Other Operating Income” includes mainly to income from services provided to other “la Caixa” Group companies and, in particular, to BuildingCenter, S.A.U. for the management of property assets. Until 31 October 2013, this activity was carried on by the Group company Servihabitat Gestión Inmobiliaria. On that date it was transferred to CaixaBank and it was subsequently transferred to Servihabitat Servicios Inmobiliarios (see the Note on Changes in the scope of consolidation). On 1 November 2013, the Group entered into a contract for services for the management of its real estate assets by Servihabitat Servicios Inmobiliarios for Criteria (formerly Servihabitat XXI).

At the end of 2013 and 2012, all the Group's operating leases for housing units could be cancelled by tenants with, in most cases, one month’s prior notice and, accordingly, there are no non-cancellable minimum lease payments based on the leases currently in force.

In relation to the leases for offices, commercial premises and industrial buildings, the Group has contracted with tenants for the following minimum lease payments, based on the leases currently in force, without taking into account the charging of common expenses, future increases in the CPI or future contractual lease payment revisions (in thousands of euros):

Operating leases Minimum lease payments

Nominal value

2013 2012

Within one year 4,888 5,339

Between one and five years 14,451 17,650

After five years 14,816 13,560

Total 34,155 36,549

At the end of 2013 and 2012 the Group had contracted with lessors for the following minimum lease payments, based on the leases currently in force, without taking into account the charging of common expenses, future increases in the CPI or future contractual lease payment revisions (in thousands of euros):

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Operating leases Minimum lease payments

Nominal value

2013 2012

Within one year 4,093 7,561

Between one and five years 11,319 20,298

After five years 9,157 87,383

Total 24,569 115,242

The detail of the operating lease and sublease payments recognised as an expense and as income, respectively, in 2013 and 2012 is as follows (in thousands of euros):

2013

2012

Minimum lease payments 5,364 4,014 Contingent rents paid - 33 (Sublease payments) - (161)

Total, net 5,364 3,886

17.2. Net gains/losses on financial transactions

On 29 January 2013, the shareholders at the Extraordinary General Meeting of Metrovacesa, S.A. approved the delisting from the Spanish Stock Exchange of all the company's shares and the takeover bid for the shares of the company launched by the bidders (BBVA, Banco Sabadell, Banco Popular and Santander). The offer price was EUR 2.28/share. Criteria, with an ownership interest of 0.36% in Metrovacesa, S.A. accepted the bid, which was settled on 17 May 2013 for a total amount of EUR 8,042 thousand, giving rise to a gross gain of EUR 6,208 thousand.

Also, the Group recognised under this heading the financial result on the exercise of the call option sold on 1,000,000 shares of Gas Natural by the counterparty which was settled in the form of shares (see Note on Investments accounted for using the equity method).

17.3. Net gains on transactions with Group companies, jointly controlled entities and associates

The balance of this heading in 2013 is made up of the pre-tax gain of EUR 140,831 thousand on the sale of 3.3% of Abertis Infraestructuras, S.A. and of the pre-tax gain of EUR 3,198 thousand on the sale of 0.33% of Gas Natural (see the Note on Investments accounted for using the equity method). It also includes the pre-tax gain of EUR 61 million arising from the sale of Servihabitat Gestión Inmobiliaria.

The balance of this heading in 2012 related basically to the after-tax gain of EUR 50 million on the sale of Port Aventura in December 2012 (see the Note on Investments accounted for using the equity method). It also includes the after-tax gain on transactions performed in the year relating to the Group's ownership interest in Abertis and to the sale of the Saba Group's logistics business in Santiago de Chile for EUR 56 million (see the Notes on Investments accounted for using the equity method and Investment property).

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17.4. Staff costs

The detail of “Staff Costs” in the accompanying consolidated income statements for 2013 and 2012 is as follows:

Thousands of euros

2013 2012

Wages and salaries 55,796 55,004

Social security costs 12,735 12,686

Termination benefits 2,460 1,537

Other staff costs 3,776 3,864

Total 74,767 73,091

In 2013 and 2012 the average number of employees at the Group companies, by professional category, was as follows:

Professional category 2013 2012

Senior and middle management 216 238

Clerical staff 347 358

Assistants 720 765

Temporary employees 162 161

Total 1,445 1,522

Also, the headcount at the end of 2013 and 2012, by gender and category, was as follows:

2013 2012

Professional category Men Women Men Women

Executives 26 11 15 4

Line personnel and clerical staff 98 65 150 173

Other employees 810 390 784 388

Total 934 466 949 565

The reduction in the workforce at 2013 year-end compared to 2012 is due to the fact that those individuals employed by the Group to perform real estate management services are no longer included in the Group's workforce (232 individuals performed this activity at 2012 year-end) as a result of the spin-off and subsequent sale of this line of business to CaixaBank.

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17.5. Depreciation and amortisation charge

The detail of “Depreciation and Amortisation Charge” is as follows:

Thousands of euros

2013 2012

Intangible assets 43,374 42,690

Property, plant and equipment and investment property 29,691 26,028

Total 73,065 68,718

17.6. Net impairment losses

The detail of “Net Impairment Losses" in the accompanying consolidated income statements for 2013 and 2012 is as follows:

Thousands of euros

2013 2012

Gains Losses Net Gains Losses Net

Intangible assets (Note 4) - - - 1,096 (1,000) 96

Property, plant and equipment (Note 5) - - - 9 (3,528) (3,519)

Investment property (Note 6) - (105,480) (105,480) 17,275 (58,349) (41,074)

Available-for-sale financial assets (Note 8) - (4,287) (4,287) - (118,773) (118,773)

Non-current assets classified as held for sale (Note 10) 22,865 (215,730) (192,865) 59,332 (144,412) (85,080)

Inventories (Note 9) 23,905 (22,919) 986 26,792 (612,024) (585,232)

Other 1,045 (85) 960 42 (1,052) (1,010)

Total 47,815 (348,501) (300,686) 104,546 (939,138) (834,592)

17.7. Other operating expenses

The detail of “Other Operating Expenses” in 2013 and 2012 is as follows:

Thousands of euros 2013 2012

Outside services 149,229 118,543

Taxes other than income tax 18,880 23,412

Total 168,109 141,955

The fees and expenses relating to the audit of the separate and consolidated financial statements of the Group companies in 2013 amounted to EUR 764 thousand (2012: EUR 705 thousand), of which EUR 399 thousand (2012: EUR 318 thousand) were billed by Deloitte, S.L. and other firms in its group or related to it.

In 2013 EUR 48 thousand was recognised in relation to other services related with audit services (2012: EUR 6 thousand).

Also, the fees and expenses paid in 2013 for other services provided by the auditors amounted to EUR 35 thousand at 31 December 2013 (31 December 2012: EUR 232 thousand), of which EUR 18 thousand were billed by Deloitte, S.L. or a firm related to it.

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The entry into force of Law 15/2010, of 5 July, amending Law 3/2004, of 29 December, establishing measures to combat late payment in commercial transactions, establishes the obligation for companies to expressly publish information on the payment periods to their suppliers in the notes to the financial statements. In relation to this disclosure obligation, on 31 December 2010, the corresponding resolution issued by the Spanish Accounting and Audit Institute (ICAC) was published in the Spanish Official State Gazette.

Pursuant to Transitional Provision Two of the aforementioned resolution, following is a detail of the trade payables recognised at 31 December 2013 which were past-due by more than the maximum payment period established by Law 15/2010 (60 days):

In thousands of euros

Amounts paid and payable at year-end 2013 2012

Amount % Amount %

Paid in the maximum payment period 194,075 84.89% 213,056 91.74% Remainder 34,554 15.11% 19,190 8.26%

Total payments made in the year 228,629 100% 232,246 100% Weighted average period of late payment exceeding maximum payment period (days) 95 127 Weighted average period of late payment (days) 70 52 Payments at year-end not made in the maximum payment period 991 623

17.8. Other gains and losses

The detail of “Other Gains” and “Other Losses” in the consolidated income statements for 2013 and 2012 is as follows:

Thousands of euros

2013 2012

Gains Losses Net Gains Losses Net

Intangible assets 17,458 (14,107) 3,351 - - - Property, plant and equipment 1,251 (1,060) 191 35 (6) 29

Investment property 1,966 (3,258) (1,292) 79 (5,716) (5,637)

Non-current assets classified as held for sale 18,140 (38,636) (20,496) 46,406 (166,856) (120,450)

Other 10,845 (13,064) (2,219) 5,952 (9,074) (3,122)

Total 49,660 (70,125) (20,465) 52,472 (181,652) (129,180)

The gains and losses on sales of investment property and non-current assets classified as held for sale relate mainly to the Group's property activities. "Intangible Assets" includes the gains and losses arising from the early termination of the concession arrangement for the Saba Sanef car parks in France and "Other" relates to the gains and losses arising from the sale of inventories associated with the real estate line of business.

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18. Notes to the consolidated statements of cash flows

At 31 December 2013, cash and cash equivalents had increased by EUR 89,468 thousand with respect to 31 December 2012. The flows from investing activities (EUR 1,114 million) were basically used to offset the flows used in financing activities (EUR 1,027 million).

Cash flows from operating activities

The main disclosures relating to operating activities are as follows:

Thousands of euros

Adjustments for 2013 2012

Depreciation and amortisation charge 73,065 68,718

Impairment losses recognised (+) / reversed (-) 300,686 834,592

Change in provisions (+/-) (205) -

Gains/Losses on disposals of property, plant and equipment (+/-) 18,246 126,058

Net gains/losses on disposals of investments (+/-) (204,891) (92,974)

Net gains/losses on other items (+/-) 2,219 3,122

Result of companies accounted for using the equity method (680,502) (819,854)

Finance income (-) (11,871) (14,084)

Finance costs (+) 164,916 172,815

Total (338,337) 278,393

Thousands of euros

Changes in working capital 2013 2012

Current tax assets and liabilities 11,982 -

Other current assets (6,229) 13,754

Other current liabilities (12,304) (27,956)

Inventories 5,890 18,557

Total (661) 4,355

Cash flows used in investing activities

The divestments made at Group companies, joint ventures and associates amounting to EUR 543,596 thousand relate basically to the sale of the subsidiary Servihabitat Gestión Inmobiliaria for EUR 98 million and the sale of shares of Abertis Infraestructuras, S.A. and Gas Natural in 2013 (see the Note on Investments accounted for using the equity method).

The other flows from investing activities relate to dividends received (EUR 438,424 thousand), to the repayment of loans granted amounting to EUR 109,204 thousand (including most notably the repayment of the EUR 70 million loan granted to PortAventura by Mediterránea Beach & Golf Community, S.A.U.) and to the proceeds from sales of non-current assets classified as held for sale related to the Group's property activities (EUR 93,950 thousand).

All the investments and divestments in the year were paid and collected in cash.

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Cash flows from financing activities

The flows from investing activities were used basically to finance the remuneration of the Group's sole shareholder, to which dividends totalling EUR 81,000 thousand and a share premium of EUR 584,000 thousand were paid.

Most of the financing in the year was granted by the sole shareholder “la Caixa” and was mainly used to repay a portion of the financing from CaixaBank, S.A. (see the Note on Financial liabilities at amortised cost).

19. Fair value

The detail of the fair value of the financial instruments recognised in the consolidated balance sheets at 31 December 2013 and 2012 is as follows:

Thousands of euros


Carrying amount

Fair value

Carrying amount

Fair value

ASSETS

Available-for-sale financial assets 15,084 15,084 33,912 33,912

Loans and receivables 107,665 107,665 284,778 301,130

Short-term bank deposits 117 117 67 67

Other financial assets 23,701 23,701 20,553 20,553

Cash and cash equivalents 372,941 372,941 283,473 283,473

Total 519,508 519,508 622,783 639,135

LIABILITIES

Liabilities at amortised cost 3,141,260 3,127,526 3,499,793 3,571,899

Derivatives 13,782 13,782 24,007 24,007

Other financial liabilities 176,619 176,619 34,039 34,039

Total 3,331,661 3,317,927 3,557,839 3,629,945

The carrying amount of financial instruments not recognised at fair value was calculated as follows:

Since cash and cash equivalents and certain current financial assets such as short-term deposits are liquid instruments or mature within twelve months, their fair value approximates their carrying amount.

The fair value of the loans and receivables and financial liabilities at amortised cost was estimated by discounting the expected cash flows using a market interest rate at each year-end. The carrying amount and fair value of borrowings arranged at floating interest rates tied to market rates are considered to be similar at year-end. In 2013 all of the Group's financing bore interest at a floating market rate (see the Note on Financial liabilities at amortised cost).

The table below shows the main financial instruments at 31 December 2013 and 2012 broken down by the method used to estimate their fair value:

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Thousands of euros

31/12/13 31/12/12

Financial instruments Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

ASSETS

Available-for-sale financial assets 13,689 - 1,395 29,106 - 4,806

Loans and receivables - 107,665 - - 284,778 -

Short-term bank deposits - 117 - - 67 -

Other financial assets - 23,701 - - 20,553 -

Cash and cash equivalents - 372,941 - - 283,473 -

LIABILITIES

Liabilities at amortised cost - 3,141,260 - - 3,499,793 -

Derivatives - 13,782 - - 24,007 -

Other financial liabilities - 176,619 - - 34,039 -

The changes in 2013 and 2012 in the balance of level 3 financial instruments were as follows:

Thousands of euros

Purchases

and capital Impairment

31/12/12 increases Sales losses 31/12/13

Available-for-sale financial assets 4,806 - - (3,411) 1,395

Thousands of euros

Purchases

and capital Impairment

31/12/11 increases Sales losses 31/12/12

Available-for-sale financial assets 8,244 1,438 (1,371) (3,505) 4,806

The fair value of the available-for-sale equity instruments and the investments accounted for using the equity method amounted to EUR 9,866 million at 31 December 2013 (31 December 2012: EUR 7,794 million). In determining the fair value, the market value of the shares of the listed companies at 31 December 2013 were used, and the recoverable amounts calculated by the Group using generally accepted valuation techniques were used for the unlisted companies.

20. Risk management policy

Following is a list of the risks that might affect the economic profitability of the Group’s activities, its financial solvency and its corporate reputation as a result of its holdings in financial assets:

Market risk. This includes the value of the ownership interests in other companies, classified as available-for-sale financial assets, and changes in interest rates and foreign exchange rates.

Liquidity risk. This relates mainly to the lack of liquidity of certain of its investments or needs arising from its commitments or investment plans.

Credit risk. Arising when counterparties fail to meet their payment obligations and the possible losses as a result of changes in their credit quality. Conceptually, this type of risk includes

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investments in the portfolio of jointly controlled entities and associates, and available-for-sale financial assets intended to be held on a long-term basis.

Country risk. Consisting of the possibility of assets becoming impaired or of a decrease in funds generated or transferred to the Parent as a result of political, economic and social instability in the countries in which investments are held.

Operational risk. Relating to errors in the implementation and performance of operations.

In this respect, the Board of Directors carries out supervisory functions in relation to the performance of the investees and periodically monitors the internal control and risk management systems in place.

Management's priority is to identify the main risks in terms of the most significant businesses and apply policies with high degree of decentralisation in view of the wide variety of businesses and their high level of specialisation.

The Group, in coordination with the Corporate Risk Models and Policies Division of the CaixaBank, uses various methods and tools to assess and monitor risks:

For investments not classified as available for sale, and for investments classified as available for sale but intended to be held on a long-term basis the most significant risk is default risk and, therefore, the PD/LGD (Probability of Default and Loss Given Default ) approach is used.

For other financial assets classified as available for sale, the most significant risk is market risk and, therefore, the market (VaR) approach is used.

These methods and tools make it possible to adequately assess and measure the Group's exposure to the risk and, as a result, take the decisions required to minimise the impact of these risks with a view to making the following more stable:

Cash flows, to facilitate financial planning and to be able to take appropriate investment or divestment decisions.

The income statement, with the aim of promoting medium- and long-term stability and growth.

The value of equity, in order to safeguard the value of the investment made by the shareholder.

Following is a description of the main risks and of the policies adopted to minimise their impact on the Group's financial statements.

20.1. Market risk

This refers to the risk that the value of a financial instrument may vary as a result of changes in the price of shares, interest rates or foreign exchange rates. Possible consequences of these risks are decreases in equity and losses arising due to changes in market prices composing the investment portfolio, rather than the trading portfolio, at medium to long term.

Price risk

At 31 December 2013, substantially all the Group's investments in equity instruments related to listed securities. Consequently, the Group is exposed to the market risk generally associated with the listed

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companies whose shares fluctuate in price and trading volume due to factors beyond the Group's control.

The Group has specialised teams which continually monitor investee transactions, more or less in accordance with the Group's level of influence in them, using a combination of indicators which are updated periodically. Also, in conjunction with the Corporate Risk Models and Policies Division of the CaixaBank, investment risk measurements are taken, both from the standpoint of the risk inherent in market price volatility, using VaR (Value at Risk) models on the risk-free interest rate yield spread from the point of view of the possibility of default (see the Note 20.3 on Credit risk), applying models based on the Probability of Default and Loss Given Default approaches.

Each of these indicators is monitored on an ongoing basis to be able, at any time, to take the most appropriate decisions on the basis of the market performance observed and predicted and of the Group's strategy.

Interest rate risk

This relates mainly to exposure to changes in borrowing costs on floating-rate debt. Therefore, the risk lies basically in the Group's indebtedness. In this regard, in interest rate risk management, the sensitivity of the fair value of the assets and liabilities to changes in the structure of the market rate curve is considered.

Interest rate risk is managed and controlled directly by the management of the companies involved.

The market interest rate affects financial profit since certain financial liabilities and financial assets (basically "Cash and Cash Equivalents") are arranged at a floating rate (tied to Euribor). Accordingly, there is considerable exposure to interest rate changes. The effect on profit, based on the instruments indicated at the reporting date, would be as follows:

Millions of euros

Change Effect on profit

net of tax

-0.5% 9

+0.5% (9)

+1% (18)

There is also debt at a floating rate, the exposure of which to changes in interest rates is mitigated using swaps (cash flow hedges) and, therefore, would not have a material impact on profit.

Foreign currency risk

The functional currency for most of the assets and liabilities in the Group's consolidated balance sheet is the euro. The main asset items in the consolidated balance sheet are subject to exchange rate fluctuations relating to assets located in Chile. However, it should be noted that these assets only represent 0.35% of the Group's total consolidated assets and their contribution to consolidated profit for the year is not significant.

The Group may also be indirectly exposed to foreign currency risk through the foreign currency investments made by the companies accounted for using the equity method due, in certain cases, to the major international presence of these companies. These companies directly employ methods to mitigate foreign currency risk.

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The Group's policies, on the basis of the overall quantification of risk, take into account the advisability of arranging either derivative financial instruments or debt in the same currency or currencies of the economic environment as the assets in which the investment is made.

20.2. Liquidity risk

Liquidity risk relates to the possibility of a company not being able to meet its payment obligations because it cannot sell a financial instrument sufficiently quickly without incurring significant additional costs. The liquidity risk associated with the possibility of financial investments being converted into cash is of little significance since they are generally listed on deep, active markets.

In its investing activity, the Group takes into account in the management of its liquidity the generation of sustained and significant cash flows by its businesses and investments and the capacity to realise its investments which, in general, are listed on deep, active markets.

The maturities of the Group's financial assets and liabilities is presented in each of the Notes to the consolidated financial statements.

20.3. Credit risk

Credit risk refers to the risk of incurring losses through breach of contractual payment obligations by a debtor or changes in the risk premium relating to the financial solvency of the debtor. The main credit risks are the investments in associates, mainly listed associates, which is not the same as the risk related to the market value of their shares.

The value of investments in jointly controlled entities and associates of EUR 9,851 million is not, in principle, subject to the risk of a change in the price of the shares, since their market price does not affect the figures in the consolidated balance sheet or consolidated income statement because of the way investments of this nature are accounted for. The risk for the Group in investments of this nature is associated with the performance of the business of the investee, and the possible bankruptcy thereof, since the market price of the shares is a mere indicator. In general, this risk can be classified as a credit risk. The tools used to measure these risks are models based on the PD/LGD (Probability of Default and Loss Given Default) approach, also as provided for in the New Basel Capital Accord (NBCA).

20.4. Country risk

The Group's policy for managing or mitigating country risk consists mainly of monitoring the geographical area in which it makes its investments both before making the investment and periodically after the investments have been made. In addition, country risk is taken into account when deciding on whether to sell investments or spread them over different geographical areas.

20.5. Operational risk

This is defined as the risk of incurring a loss as a result of errors in operating processes. Operational risk relates to any event that might give rise to a loss as a result of inadequate internal processes, human error, the incorrect functioning of information systems and/or external events.

The risk management process covers issues in relation to systems and staff, administrative processes, information security and legal matters. This risk is managed for the purpose of establishing adequate controls to minimise possible losses.

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The Parent has policies in place and a Procedures Manual as part of the continuous improvement of its internal control systems and for the purpose of ensuring adequate control of operational risk through controls designed to reduce or eliminate exposure to such risk.

21. Contingencies and obligations

The calculation of the contingent liabilities at 31 December 2013 and 2012 is as follows:

Thousands of euros

31/12/13 31/12/12

Financial guarantees 49,164 47,800

Other contingent liabilities with third parties 11,304 7,732

Total 60,468 55,532

The financial guarantees correspond in full to the car park and logistics park business and are related to the operation of administrative concessions. EUR 2,318 thousand of the bank guarantees are from CaixaBank and the remainder are from third parties. The bank guarantees expire on the basis of the term of the related concession.

Other contingent liabilities with third parties relate basically to the guarantee lines available in relation to the Group's property activities.

22. Segment reporting

General information

The Group presents its segment information in accordance with IFRS 8 in order to disclose the information that makes it possible to evaluate the nature and financial effects of the business activities in which it engages and the economic environments in which it operates.

IFRS 8 requires that segment information be prepared and presented in the same way as it is provided to management for making decisions about operating matters. To this end, the components that share the nature of the products and services offered and the nature of the regulatory framework to which they are subject are grouped together. This segmentation coincides, in general terms, with the internal organisation and information habitually used by management in conducting the Group's business.

Therefore, the operating segments defined by the Group are as follows:

- The industrial segment, which encompasses the ownership interests in industrial companies, including activities in the energy industry (Gas Natural), infrastructure (Abertis and Saba) and other services (Agbar).

- The real estate segment encompasses the real estate activities carried on by the companies: Servihabitat Alquiler, Servihabitat Alquiler II, Servihabitat Alquiler IV (all engaging in the lease of properties); and Mediterránea Beach & Golf Community (operation and management of property developments in the areas adjacent to the Port Aventura theme park). As well as all these direct ownership interests, this segment also includes an indirect ownership interest in Palau-Migdia (engaging in property development).

The information included in the column Other non-allocable in the accompanying segment information consists of the income, expenses and assets not allocable to any of the aforementioned segments and

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makes it possible to reconcile the information with the amounts presented in the consolidated financial statements. This segment includes the ownership interest held by the Group in Vithas Sanidad, S.L. (hospital business), Lumine Travel, S.A.U. (travel agency) and Caixa Capital Risc (venture capital fund manager).

Information on the profit or loss and assets of the operating segments

The procedure used to obtain the segment income, expenses and assets was to detail the contribution of the companies allocated to each segment, after eliminations and adjustments on consolidation. Also, each segment was allocated the amounts from the holding companies and the Parent that are reasonably attributable thereto.

The goodwill and other intangible assets arising in the business combinations were allocated to the related segments. Also, the impairment losses arising from the recognition of available-for-sale financial assets at fair value were allocated to the related segments.

In 2013 there were no significant transactions between the Group's various segments and there were no material inter-segment balances at 31 December 2013, except for the dividend income and balances eliminated on consolidation.

The segment information for 2013 and 2012 is as follows:

Segment information for 2013 Thousands of euros

Other non- Total Industrial Property allocable Group

Income and expenses: Revenue 188,033 156,341 5,041 349,415 Result of companies accounted for using the equity method 678,927 12 1,563 680,502 Net gains on transactions with Group companies, jointly controlled entities and associates

144,191 60,700 - 204,891

Depreciation and amortisation charge (*) (53,291) (19,327) (447) (73,065) Other non-monetary items (*) (3) (274,697) (64) (274,764) Finance income 4,437 6,215 1,219 11,871 Finance costs (35,714) (128,600) (602) (164,916) Income tax (31,320) 73,605 2,003 44,288 Consolidated profit (loss) for the year 790,611 (290,331) (7,557) 492,723 Assets: Additions to goodwill and other intangible assets 13,097 1,822 1,095 16,014 Additions to property, plant and equipment 18,660 163 871 19,694 Additions to investment property 6,686 10,274 - 16,960 Investments in associates and joint ventures - - - - Total assets 9,153,290 3,707,030 230,748 13,091,068

(*) Not involving cash outflows or inflows. Relating basically to impairment losses on assets and provisions.

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Segment information for 2012 Thousands of euros

Other non- Total Industrial Property allocable Group

Income and expenses: Revenue 185,935 95,964 1,843 283,742 Result of companies accounted for using the equity method 810,726 31 9,097 819,854 Net gains on transactions with Group companies, jointly controlled entities and associates

44,224 - 48,750 92,974

Depreciation and amortisation charge (53,601) (14,726) (391) (68,718) Other non-monetary items (*) (453) (834,139) - (834,592) Finance income 7,598 5,820 666 14,084 Finance costs (37,955) (134,770) (90) (172.815) Income tax (7,838) 320,430 (223) 312,369 Consolidated profit (loss) for the year 837,308 (781,978) 47,342 102,672 Assets: Additions to goodwill and other intangible assets 24,085 4,047 40 28,172 Additions to property, plant and equipment 3,603 953 1,091 5,647 Additions to investment property 3,680 12,993 - 16,673 Investments in associates and joint ventures - - - - Total assets 9,434,538 4,380,838 57,641 13,873,017

(*) Not involving cash outflows or inflows. Relating basically to impairment losses on assets and provisions.

Information by geographical area

Saba Infraestructuras, S.A. is the Group subsidiary whose activities with more geographical diversification. The various countries in which the Saba Infraestructuras Group operates are organised and managed separately, and each country represents a strategic business unit that manages the same type of activity but in a different market. The Group's activities are located in Spain, the rest of Europe and Latin America.

Thousands of euros

2013 2012

Non-current assets(*)

Revenue Non-current

assets(*) Revenue

Spain 8,954,148 279,329 9,170,011 217,469

Rest of Europe 302,579 55,838 329,675 50,861

Latin America 56,003 14,248 73,121 15,412

Total 9,312,730 349,415 9,572,807 283,742

(*) excluding financial assets or deferred tax assets

Additionally, the business of most of the Group's associates and jointly controlled entities is highly diversified geographically, and a high percentage of the recurring results of the investees is obtained in countries other than Spain. At 31 December 2013, it was estimated that around one-half of the revenue was obtained in Spain, with 26% being obtained in Latin America, 14% in the rest of Europe and 7% in the rest of the world.

23. Related party disclosures

Transactions between Criteria CaixaHolding and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this Note. In all cases, all the transactions were carried out in the ordinary course of business on an arm's length basis. The transactions with its most significant shareholders and other related parties, members of the Board of Directors and senior executives are provided below.

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23.1. Significant shareholders

“Significant shareholders” means the shareholders with the right to propose a director or who have an ownership interest in the Parent of more than 50%.

Since inception, “la Caixa” has been the sole shareholder of Criteria CaixaHolding. At 31 December 2013, the ownership interest of “la Caixa” in Criteria CaixaHolding was 100%.

23.1.1. Description of relations with “la Caixa”

In view of the nature of the business activities carried on by the Parent's sole shareholder through its subsidiary CaixaBank, S.A., the fact that CaixaBank, S.A. belongs to the group of companies controlled by “la Caixa” and the complementary nature of the business activities carried on by the Criteria CaixaHolding Group and the “la Caixa” Group (e.g. in the property area), transactions took place with related parties in the period covered by the historical financial information and it is foreseeable that they will continue to take place in the future.

In any case, all transactions with related parties, pursuant to the definition provided for in Ministry of Economy and Finance Order EHA/3050/2004, of 15 September, performed in 2013, were carried out on an arm's length basis.

23.1.2. Detail of balances with the “la Caixa” Group

All the transactions with the “la Caixa” Group are carried out in the ordinary course of business and on an arm’s length basis.

Thousands of euros

Balances of Criteria CaixaHolding and subsidiaries with the "la Caixa" Group

Balances at Net Balances at

31/12/12 change 31/12/13

ASSETS

Cash and cash equivalents 224,084 86,856 310,940

Other assets 1,481 (1,361) 120

Total 225,565 85,495 311,060

LIABILITIES

Bank borrowings 3,104,517 (354,561) 2,749,956

Other liabilities 39,807 (37,394) 2,413

Total 3,144,324 (391,955) 2,752,369

“Cash and Cash Equivalents” relates basically to cash investments of Group companies in demand and term deposits with CaixaBank, S.A. Worthy of note are Criteria CaixaHolding with a balance at 31 December 2013 of EUR 205,905 thousand and the Saba Group with a balance of EUR 61,146 thousand.

In 2013 six deposits were arranged with CaixaBank for EUR 125,000 thousand and EUR 200,000 thousand, earning interest at a nominal rate of between 0.87% and 1.13%. At 31 December 2013, no deposits had been arranged with CaixaBank.

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“Bank Borrowings” relates basically to the financing obtained from the sole shareholder and CaixaBank, S.A. by the Group companies in order to be able to carry on their business activities, as detailed in the Note on Financial liabilities at amortised cost.

Criteria CaixaHolding has entered into a security deposit agreement with CaixaBank, S.A.

On 31 October 2013, all the shares held by the Group in Servihabitat Gestión Inmobiliaria, S.L. were sold to CaixaBank for EUR 98 million (see Note 2.7).

It should be noted that in 2013 the sole shareholder received an interim dividend for 2013 totalling EUR 81,000 thousand and was paid EUR 584,000 thousand of the share premium. At 31 December 2013, both amounts had been paid in full.

On the other hand, there are post-employment obligations with senior executives amounting to 6,029 thousand euros.

The detail of the most significant balances of the Criteria Group companies accounted for using the equity method (associates and jointly controlled entities) with the “la Caixa” Group as a related party in 2013 is as follows:

Thousands of euros

Balances of companies accounted for using the equity method with the "la Caixa" Group

Balances at Net Balances at

31/12/12 change 31/12/13

ASSETS

Deposits, marketable securities and subordinated debt 1,638,295 689,738 2,328,033

Total 1,638,295 689,738 2,328,033

LIABILITIES

Other loans and credit facilities 1,061,612 (494,303) 567,309

Total 1,061,612 (494,303) 567,309

Per the information available to the Parent, all the transactions between the jointly controlled entities and associates and the “la Caixa” Group companies were carried out on an arm's length basis, took place in the ordinary course of business and were of scantly material amounts in relation to the understanding of the Group's financial information.

At 31 December 2013, Gas Natural held term deposits at CaixaBank totalling EUR 1,000 million and demand deposits totalling EUR 533 million.

At 31 December 2013, Abertis Infraestructuras held term deposits at CaixaBank totalling EUR 680 million and demand deposits totalling EUR 2 million.

The detail of the income and expenses arising from transactions carried out in 2013 and 2012 is as follows:

- 84 -

2013

Thousands of euros

Balances with the “la Caixa” Group Of Criteria CaixaHolding

and Group companies

Of companies accounted for using

the equity method (*)

INCOME

Revenue from sales and services 5,280 -

Other income 121,536 -


Other gains 60,827 -

Total 189,498 34,846

EXPENSES

Other operating expenses (4,195) -

Fees and commissions paid (241) (7,110)

Other losses - -

Finance costs (133,497) (21,564)

Total (137,933) (28,674)

(*) Reflected in the income statements of the respective companies.

2012

Thousands of euros

Balances with the “la Caixa” Group Of Criteria CaixaHolding

and Group companies

Of companies accounted for using

the equity method (*)

INCOME

Revenue from sales and services 985 -

Other income 71,708 -


Total 74,047 14,456

EXPENSES

Other operating expenses (916) -

Fees and commissions paid (290) (9,819)

Other losses - -

Finance costs (140,506) (27,125)

Total (141,712) (36,944)

(*) Reflected in the income statements of the respective companies.

"Income from Sales and Services" relates to income from property leases and provision of services in the management and administration of subsidiaries by Criteria CaixaHolding.

In 2012 Criteria CaixaHolding entered into a contract for services with CaixaBank relating to the control of management, accounting, administration and financial management at CaixaBank investees.

A framework agreement for the rendering by CaixaBank of certain services to Criteria CaixaHolding was also entered into, which includes, as arranged in an arrangement document, internal audit services.

- 85 -

There is a lease with CaixaBank in relation to the offices of Criteria CaixaHolding, S.A.U., located at Avenida Diagonal 621, Barcelona and at Paseo de la Castellana, 51, Madrid.

"Finance Income" of Criteria CaixaHolding and Group companies relates to income obtained from deposits.

In 2013 an agreement was entered into for the rendering by Servihabitat Servicios Inmobiliarios of certain services to Criteria, Servihabitat Alquiler y Servihabitat Alquiler II (see Note 2.7), which include mainly real estate and back office services.

Agreement for Serveis Informàtics la Caixa, S.A. (Silk) to provide services relating to the maintenance and management of certain computer software to Criteria CaixaHolding.

"Fees and Commissions Paid" includes fees and commissions paid by the Group to CaixaBank for the services provided by the latter's office network.

"Finance Costs" includes borrowing costs incurred on credits, loans, credit facilities and non-convertible debentures granted by CaixaBank to the Group companies.

23.1.3. Detail of balances between Criteria CaixaHolding and subsidiaries, jointly controlled entities and associates

All the transactions were carried out on an arm's length basis and took place in the ordinary course of business.

The balances between the Group and the jointly controlled entities and associates that were not eliminated on consolidation are as follows:

Balances with jointly controlled entities and associates Thousands of euros

2013 2012

ASSETS

Other current assets 135,762 136,773

Total 135,762 136,773

LIABILITIES

Other liabilities 23,163 5,429

Total 23,163 5,429

INCOME

Other income 145,198 13,530

Finance income - 687

Total 145,198 14,217

"Other Current Assets" includes dividends declared by and receivable from Gas Natural at 31 December 2013.

Criteria CaixaHolding has entered into an agreement to loan shares to Abertis (see the Note on Investments accounted for using the equity method).

"Other Income" mainly includes gains on the sale of Abertis Infraestructuras and Gas Natural shares amounting to EUR 144,029 thousand.

- 86 -

23.2. Contracts with the sole shareholder

At 31 December 2013, the following loans had been granted by the sole shareholder:

On 20 November 2013 and 13 December 2013, ”la Caixa” granted two loans to the Criteria CaixaHolding for EUR 270 million and EUR 280 million, respectively (see the Note on Financial liabilities at amortised cost).

On 24 December 2013, ”la Caixa” granted a loan to Criteria for a maximum amount of EUR 650 million, of which EUR 400 million had been drawn down at 31 December 2013 (see the Note on Financial liabilities at amortised cost).

23.3. Remuneration of directors

The detail of the remuneration received by the members of the Board of Directors of Criteria CaixaHolding in 2013 and 2012 in the form of fees for attending Board meetings, other remuneration and remuneration received for representing the Parent on the Boards of Directors of listed companies and other companies in which it has a significant presence or representation is as follows:


Remuneration paid by Criteria CaixaHolding 1,811 1,633

Remuneration paid by other companies 413 527

Other remuneration paid by Criteria CaixaHolding to directors that discharged executive duties in the year - -

Total

2,224 2,160

The expense incurred by Criteria CaixaHolding in relation to a third-party liability insurance premium paid to cover the directors and executives in 2013 was assumed by the head of the “la Caixa” Group. In 2012 the expense assumed by Criteria CaixaHolding in this connection amounted to EUR 12 thousand.

In 2013 Criteria CaixaHolding did not make any contributions to pension plans for the directors.

Criteria CaixaCorp does not have any pension obligations to former or current members of the Board of Directors in their capacity as such or any other obligations to them other than those disclosed above.

No agreements are in force relating to termination benefits in the event of the unilateral termination by the Parent of the members of the managing bodies of Criteria CaixaHolding.

The Parent’s directors did not perform any transaction other than in the normal course of business or other than on an arm's length basis with the Parent or with the Group companies in 2013. Also, none of these transactions is of a significant amount that might hinder the proper interpretation of the Group's consolidated financial statements.

- 87 -

23.4. Remuneration of senior executives

The detail of the remuneration of senior executives in 2013 and 2012 is as follows:

Thousands of euros Salaries Attendance

fees Other items

Pension plans

Insurance premiums

Termination benefits

Share-based payments

2013 2,426 83 47 30 20 - -

2012 1,343 95 25 - - - -

23.5. Other disclosures concerning the Board of Directors

Article 229 of the Spanish Limited Liability Companies Law requires that directors declare any direct or indirect ownership interest which, either they themselves or persons related to them, hold in the share capital of companies engaging in an activity that is identical, similar or complementary to the activity constituting the object of the company of which they are directors, and the positions held or functions discharged thereat. Also, the directors must inform the company of any situation involving direct or indirect conflict that they may have with the company's interests. This information must be disclosed in the notes to the company's financial statements.

Until December 18, 2013 the company name of the company was "Servihabitat XXI, SA, Sole-Shareholder Company”, being until then the real estate business its object. As of December 18, 2013 the merger of the company with its sole shareholder Criteria CaixaHolding, S.A., Sole-Shareholder Company was completed. Under the merger, the Company absorbed its Sole-Shareholder Company, company which was dissolved and extinguished transferring all of its assets by universal succession to the Company (at that time "was called Servihabitat XXI, SA, Sole Shareholder Company"). At the time of the merger, effective December 18, 2013, the Company adopted as the new name of the merged company CaixaHolding Criteria, S.A., Sole Shareholder Company. Also expanded its objects to include the activities of the acquired company, ie the activity of holding company securities. Therefore, from December 18, 2013 the type of activity that constitutes the corporate purpose of the Company was both the real estate company as the holding company securities.

To this end, the people who have been members of the Board of Directors of the Parent during 2013 have provided the following information, taking into account the change of corporate purposes from December 18, 2013:

- 88 -

COMPANY

REPRESENTED

Isidro Fainé Casas

(related party)

Construcciones Riera, S.A. (under

l iquidation)Real Estate 9.00%

--

Isidro Fainé Casas

(related party) Urban Top Zone, S.L.Real Estate 99.00% Administrator

Isidro Fainé Casas

(related party) Inverfolven, S.L.Real Estate 30.00% Administrator

Isidro Fainé Casas

(related party) Plana Busquets,S.L.Real Estate 4.00% Administrator

Isidro Fainé Casas

(related party) Aeron, S.L.Real Estate 10.00%

Attorney

José Antonio Asiáin AyalaActividades de Construcción y

Rehabilitación Grupo Goialde, S.L.Real Estate - - Director -

Julián Cabanillas Moreno

(until 11/07/2013)Servihabitat Alquiler, SL Real Estate Rentals - -

Sole Administrator

(until December 2013)-


(until 11/07/2013)Servihabitat Alquiler II, S.L.U. Real Estate Rentals - -

Sole Administrator



(until 11/07/2013)Buildingcenter, S.A.U. Real Estate - -

Sole Administrator

(until December 2013)Caixa Corp, S.A.


(until 11/07/2013)Servihabitat Alquiler IV, S.A. Real Estate Rentals - -

Sole Administrator



(until 11/07/2013)Els Arbres de la Tardor, S.L. Real Estate - -

Director



(until 11/07/2013)Palau Migdia, S.L. Real Estate - - Director -


(until 11/07/2013)Suministros Urbanos y Mantenimiento, S.A. Real Estate - -

Chairman of the Board of

Directors

(until December 2013)

-


(until 11/07/2013)Grupo Inmobiliario Ferrocarril, S.A. Real Estate - - Director

Cajasol Inversiones

Inmobiliarias, S.A.U.


(until 11/07/2013)Europea de Desarrollos Urbanos, S.A. Real Estate - -

Director

(until May 2013)

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)Desarrollos Industriales Prado Marina, S.L. Real Estate - -

Director

(until May 2013)

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)Hercesa Internacional, S.L. Real Estate - - Director

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)

Gestur Cajacanarias Inversiones y

Desarrollos, S.A.Real Estate - -

Deputy Chairman and

Joint Managing Director

(until December 2013)

Cajasol Inversiones



(until 11/07/2013)Buildingcenter Imobiliar, S.R.L. Real Estate - - Sole Administrator Caixa Corp, S.A.


(until 11/07/2013)Servihabitat Gestión Inmobiliaria, S.L. Real Estate - - Sole Administrator

Criteria CaixaHolding,

S.A.U. (prior

Servihabitat XXI)


(until 11/07/2013)Servihabitat Ofigest, S.L. Real Estate - - Sole Administrator


S.A.U. (prior

Servihabitat XXI)


(until 11/07/2013)VIP Gestión de Inmuebles, S.L.U. Real Estate - - Sole Administrator

Valenciana de

Inversiones

Participadas, S.L.U.

Juan Carlos Álvarez Cortizo

(until 11/07/2013)Holret, S.A.U. Tenedora - -


Directors-


(until 11/07/2013)Grupo BC Servicios 2011, S.L. Real Estate (rural properties) - - Director Caixa Corp, S.A.


(until 11/07/2013)Avenida Principal, S.L. Real Estate - -

Director

(until March 2013)

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)Celogal-Uno, S.L. Real Estate - -

Director

(until March 2013)

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)Drembul, S.L. Real Estate - -

Director

(until March 2013)

Cajasol Inversiones



(until 11/07/2013)Hacienda La Cartuja, S.A. Real Estate - - Deputy Chairman

Cajasol Inversiones



(until 11/07/2013)Drembul Polonia, S.L. Real Estate - - Director

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)

Gestur Cajacanarias Inversiones y

Desarrollos, S.A.Real Estate - -

Director

(until December 2013)Web Gestión 2, S.A.U.

Marcos Contreras Manrique Incobe 2000, S.L. Real Estate 0.94% 20 Managing Director -

Marcos Contreras Manrique Incobe 2000, S.L. Real Estate 99.06% 212,338 - DAMALISCO

Juan María Nin Génova

(related party)JAP 99 SIMCAV, S.A. Investment - - Administrator -

Juan María Nin Génova JAP 99 SIMCAV, S.A. Investment 100.00% - - -

Juan María Nin Génova

(related party)Alpajua, S.L. Investment 3.00% Administrator -

Juan María Nin Génova Alpajua, S.L. Investment 97.00% - - -

Manuel Romera Gómez

(until 12/18/2013)Acciona, S.A. Construction and other - 200 - -

Manuel Romera Gómez

(until 12/18/2013)Fomento de Construcciones y Contratas S.A. Construction and other - 1,886 - -

DIRECTOR COMPANY LINE OF BUSINESS % Nº SHARES POSITION

- 89 -

COMPANY

REPRESENTED

Victoria Barber Willems Bare 2005, S.L. Real Estate Development/Construction 50.00% 3,006Joint and Several

Administrator-

Victoria Barber Willems Niftriks Inversions, S.L. Real Estate Development/Construction 25.00% 750 - -

Victoria Barber Willems

(related party)Bare 2005, S.L. Real Estate Development/Construction 50.00% 3,006

Joint and Several

Administrator-


(related party)Niftriks Inversions, S.L. Real Estate Development/Construction 50.00% 1,500 - -


(related party)Niftriks Inversions, S.L. Real Estate Development/Construction 25.00% 750 Administrator -


(related party)Kirstad, S.A. Real Estate Development/Construction 20.00% 400 Administrator -


(related party)Kirstad Habitatges, S.L. Real Estate Development/Construction 20.00% 620 Administrator -


(related party)Kirstad Patrimonial, S.L. Real Estate Development/Construction 20.00% 620 Administrator -


(related party)Amics Patrimonial, S.L. Real Estate Development/Construction 20.00% 4,200 Administrator -


(related party)Bay 2002, S.L. Real Estate Development/Construction 51.30% 1,535 Administrator -


(related party)Diskvalls, S.A. Real Estate Development/Construction 20.00% 160 Administrator Kirstad, S.A.

Montserrat Cabra Martorell Inmobiliaria Colonial, S.A. Real Estate 0.00% 51 - -

Isabel Estapé Tous Triana 88, S.L.Real Estate/Development/Rentals

Livestock and farming85.47% 468,101

Joint and Several

Administrator-

Isabel Estapé Tous

(related party) Triana 88, S.L.Real Estate/Development/Rentals

Livestock and farming14.42% 78,975

Joint and Several

Administrator-

Francesc Bellavista Auladell

(until 12/18/2013)Aliancia Zero, S.L. (under l iquidation) Real Estate - -

Director

(until November 2013)

ServiHabitat XXI, S.A.

(now Criteria

CaixaHolding)


(until 12/18/2013)Vehículo de Tenencia y Gestión 9, S.L. Real Estate - - Director

ServiHabitat XXI, S.A.

(now Criteria

CaixaHolding)


(until 12/18/2013)

Mediterránea Beach & Golf Community,

S.A.U.Real Estate/Leisure - - Director -


(until 12/18/2013)Criteria CaixaHolding, S.A. Holding/Real Estate - -

Assistant General

Director-

Xavier Moragas Freixa

(until 12/18/2013)Aliancia Zero, S.L. (under l iquidation) Real Estate - -

Director

(until November 2013)


S.A.U. (before the

merger with

Servihabitat XXI)

Xavier Moragas Freixa

(until 12/18/2013)Criteria CaixaHolding, S.A. Holding/ Real Estate - -

Assistant Deputy General

Director -

Jean-Louis Chaussade GDF Suez (France) Holding/Util ities - -

Member of the

Management Committee

and Executive Committee

-

Jean-Louis Chaussade Suez Environnement Company (France) Holding/Util ities 0.00% 5,225 Director and CEO -

Jean-Louis Chaussade Suez Environnement España, S.L. Holding - - Managing Director -

Jean-Louis ChaussadeHisusa-Holding de Infraestructuras y

Servicios Urbanos, S.A.Holding - -


Directors-

Jean-Louis Chaussade Sino French Holdings Ltd (China-HK) Holding/Util ities - -Chairman of the Board of

Directors-

Jean-Louis Chaussade Sembsita Australia PRY (Australia) Holding/Cleaning - - Director -

Jean-Louis Chaussade

(related party)GDF Suez (France) Holding/Util ities 0.00% 4,836 - -







Miquel Noguer PlanasMediterránea Beach & Golf Community,

S.A.U.Real Estate/Leisure - - Director -

DIRECTOR COMPANY LINE OF BUSINESS % Nº SHARES POSITION

- 90 -

24. Other salient information

The Group subsidiaries from Saba Aparcamientos operate car parks and street-level regulated areas under various legal forms in the various countries in which the Group operates. At 31 December 2013, the Group had 204 centres (2012: 190 centres). The detail by country and type of operation is as follows:

2013

Owned Concession

Concession - regulated

street-level areas

Management Leasing Total

Spain 10 54 13 19 5 101 Italy 2 45 9 2 1 59 Portugal 1 12 5 6 - 24 Andorra - - - 2 1 3 Chile - 13 - 2 - 15 France - 2 - - - 2

Total 13 126 27 31 7 204

2012

Owned Concession

Concession - regulated

street-level areas

Management Leasing Total

Spain 9 53 10 11 5 88 Italy 2 44 10 2 1 59 Portugal 1 12 5 5 - 23 Andorra - - - 2 1 3 Chile - 13 - 2 - 15 France - 2 - - - 2

Total 12 124 25 22 7 190

The detail of the centres under administrative concession (contracts entered into local authorities in the various countries in which the Group operates) and of the regulated street-level areas is as follows:

- Spain: 67 operating centres (car parks and regulated street-level areas) with a total of 29,612 parking spaces. The aggregate remaining average concession term is 20 years.

- Italy: 54 operating centres with 25,715 parking spaces and a remaining average concession term of 27 years.

- Portugal: 17 car parks which offer 5,563 parking spaces under various concessions with a remaining average term of 15 years.

- Chile: 5,065 parking spaces distributed among 13 operating centres with a remaining average concession term of 23 years.

- France: 2 operating centres with a total of 521 parking spaces which expires in 2014.

The Group subsidiaries from Saba Parques Logísticos operate logistic parks in the various countries in which the Group operates under various legal forms. At 31 December 2013, the Group had 11 logistic parks. The detail by country, type of operation and square metres under operation is as follows:

- 91 -

2013 Number of logistics parks (*)

Owned Concession Leasing Total m2

Spain 9 243,200 479,701 165,626 888,527 Portugal 1 - - - - France 1 20,517 - - 20,517

Total 11 263,717 479,701 165,626 909,044

2012 Number of logistics parks (*)

Owned Concession Leasing Total m2

Spain 9 242,931 449,737 164,907 857,575 Portugal 1 - - - - France 1 20,511 - - 20,511

Total 11 263,442 449,737 164,907 878,086

(*) Of all the logistics parks in operation available in the Group, 3 parks located in Spain and Portugal are under construction and, therefore, have not yet come into service.

25. Information on the environment and corporate responsibility

In view of the Group's business activities, it does not have any environmental expenses, assets, provisions or contingencies that might be material with respect to its equity, financial position or results. Therefore, no specific disclosures relating to environmental issues are included in these notes to the consolidated financial statements.

With the close cooperation of CaixaBank and “la Caixa”, and through its “Active Management” policy, involving its presence in the governing bodies of its investees, the Group continues to develop internal processes for assessing and controlling the social and environmental risk of its investees in order to be able to guarantee that these organisations work in a responsible and ethical manner.

The energy and utilities companies in which the Group has ownership interests have well-defined corporate responsibility strategies and, in addition, are multinationals which report periodically using best reporting practices in relation to the implementation of their sustainability strategies. Their commitment and responsibility have been acknowledged by various Spanish and international bodies in prestigious rankings or indexes such as, among others, “Monitor Español de Reputación Corporativa” (Spanish Corporate Reputation Monitor), “The Good Company Ranking 2007” and “FTSE4good”.

26. Events after the reporting period


In January 2014 the Company sold the ownership interest it held in Inmobiliaria Colonial at 31 December 2013 (5.79%) for EUR 15 million, giving rise to a pre-tax gain of EUR 4,760 thousand.

Mediterránea Beach & Golf Community, S.A.

On 16 January 2014, Mediterránea Beach & Golf Community increased capital by EUR 196 million, through the issuance of 239,025 new shares of EUR 41 par value each. This capital increase was fully subscribed by Criteria CaixaHolding.

- 92 -

Criteria Caixaholding

On 11 February 2014, Criteria CaixaHolding granted a loan of EUR 20 million to Resort Holdings, BV, maturing in 2021 and bearing interest of 10.25%. 27. Explanation added for translation to English

These consolidated financial statements are presented on the basis of the regulatory financial reporting framework applicable to the Group (see Note 2.1). Certain accounting practices applied by the Group that conform with that regulatory framework may not conform with other generally accepted accounting principles and rules.

- 93 -

APPENDIX I

Investments in Group companies

Other

Profit equity Total

Company name and line of business Location/ Registered office Direct Total (Loss) items equity

Inversiones Autopistas, S.L. Av. Diagonal, 621-629 50.10 50.10 100,000 27,261 42,718 - 169,979 21,402 - 154,551Holding company 08028 Barcelona

Mediterránea Beach & Golf Community, S.A. Hipólito Lázaro 100.00 100.00 94,189 15,396 (7,324) - 102,261 - - 136,80243481 La Pineda - Vila Seca - Tarragona

Spain

Saba Infraestructuras, S.A. Av. del Parc Logístic, 22-26 50.10 50.10 73,904 394,451 1,928 26,280 496,563 - - 194,941Management of car parks and logistics parks 08040 Barcelona

Spain

Servihabitat Alquiler II, S.L.U. Provençals, 39 (Torre Pujades) 0.00 100.00 3 (33,468) (14,409) - (47,873) - - -08019 BarcelonaSpain

Servihabitat Alquiler IV, S.A. Provençals, 39 (Torre Pujades) 0.00 100.00 15 (4) (0) - 10 - - -08019 BarcelonaSpain

Servihabitat Alquiler, S.L. Provençals, 39 (Torre Pujades) 0.00 100.00 10,503 (51,838) (64,001) - (105,336) - - -08019 BarcelonaSpain

Caixa Capital Risc, SGECR, S.A. Av. Diagonal, 613 99.99 100.00 1,000 1,716 577 - 3,293 - - 4,200Venture capital 08028 Barcelona

Lumine Travel, S.A.U. Hipólito Lázaro s/n 0.00 100.00 60 5 88 - 152 - - -Travel agency 43481 La Pineda (Vila-Seca)

TarragonaSpain

Operation and management of property

developments in the areas adjacent to the theme

park

Operation, management and administration of

leased housing units



Share

capital

Reserves

and interim

dividends

Dividends from

direct

ownership

interest in 2013

Impairment of

direct

ownership

interest

Carrying

amount of

direct

ownership

Thousands of euros



% of ownership interest

- 94 -

APPENDIX II

Investments in jointly controlled entities and associates

Thousands of euros

Dividends

from total Reserves Other ownership

Share and interim equity Total interest in Market price

Company name and line of business Location/ Registered office Direct Total capital dividends Profit items equity 2013 12/31/2013

Abertis Infraestructuras, S.A. Av. del Parc Logístic, 12-20 15.34 19.22 2,566,586 458,760 616,826 2,947,451 6,589,623 81,173 1,111,493 16.15 15.4908040 Barcelona

Spain

Gas Natural, SDG, S.A. Plaça del Gas, 1 34.52 34.52 1,000,689 11,345,625 1,444,563 1,218,921 15,009,798 310,026 4,621,164 18.70 17.58Electricity and gas company 08003 Barcelona

Spain

Hisusa-Holding de Infraestructuras Y Serv.Urbanos, S.A. Torre Agbar. Av. Diagonal, 211 24.26 24.26 372,170 1,312,062 79,542 - 1,763,774 19,306 639,059 - -Holding company 08018 Barcelona

Spain

Palau- Migdia, S.L. Gran Vía Jaume I, 9 - 50.00 3,523 3,209 24 - 6,756 500 - - -Property development 17002 Girona

Spain

Vithas Sanidad, S.L. Príncipe de Vergara, 110 20.00 20.00 10,730 64,171 12,662 3,532 91,095 - 47,473 - -Management company 28002

Spain

Note: for the listed companies, the figures shown relate to data published by the Spanish National Securities Market Commission (CNMV) at 31 December 2013, and for unlisted companies, the figures shown relate to the latest real or estimated data available at

the date of preparation of these notes to the consolidated financial statements.

Carrying

amount of

direct

ownership

Average

market % of ownership interest

Transport and telecommunications infrastructure

management

- 95 -

APPENDIX III

Available-for-sale financial assets - Equity instruments

Thousands of euros

Company name and l ine of bus inessLocation/ Regis tered office Direct Total

C/ Pedro de Valdivia , 16 5.79 5.79 - 1.05 1.2028006 MadridSpain

C/ José Echegaray, 8 - 9.48 - - -28232 MadridSpain

Vehículo de Tenencia y Gestión 9, S.L. Paseo de la Castel lana, 89 - 19.90 - - -28046 MadridSpain

Sociedad Promotora Bi lbao Gas Hub, S.A. C/ Gran Via De Don Diego Lopez De Haro 23 25.00 25.00 - - -48,001 Bi lbao

Spain

% of ownership Dividends from

direct ownership

interest in 2013

Market

price at

Inmobi l iaria Colonia l , S.A.

Average

market

price in

last quarter

of 2013

Logis tics , market and financia l services

required

Real estate services

Real estate services

Property development

Al iancia Zero, S.L.

- 96 -

Translation of a report originally issued in Spanish. In the event of a discrepancy, the Spanish-language version prevails.

Criteria CaixaHolding, S.A.U. and Subsidiaries

CONSOLIDATED DIRECTORS' REPORT FOR 2013

1 Performance of the Group in 2013 and outlook

Criteria CaixaHolding is the investment company of the “la Caixa” Group, with holdings in strategic industries such as the energy industry, infrastructure and utilities and in the real estate business, which seeks to generate value through the active management of its portfolio.

The gross value of the portfolio of Criteria CaixaHolding at 31 December 2013 was EUR 13,119 million (the net value, including debt, was EUR 10,662 million). This portfolio includes top-level companies with a sound position of leadership in their various sectors of activity, and which have a significant capacity for generating value and profitability.

Criteria CaixaHolding has its head office in Barcelona and its sole shareholder is Caixa d´Estalvis i Pensions de Barcelona (“la Caixa”), which holds all the shares.

Management principles

Criteria CaixaHolding promotes the growth, development and profitability of the companies and businesses in which it has ownership interests through active management. To this end, it has significant knowledge of the industries in which it has a presence, a long track record which affords it a significant position as an investment company and proven management teams.

With this aim, the Company works daily on the ongoing identification, analysis, study and evaluation of new business, investment and divestment opportunities.

Criteria CaixaHolding participates actively in the governing bodies of its investees, cooperating in the definition of their future strategies in coordination with the companies' management teams and contributing to the development of their businesses in the medium and long term.

Medium- to long-term investment approach

Criteria CaixaHolding's active management philosophy means that it has a medium- to long-term investment time horizon and that it maximises value using an approach founded on corporate development and commitment to the strategies of the companies in the portfolio, carrying out purchase and sale transactions at the most appropriate time.

Criteria CaixaHolding is a consolidated business project combining investments in listed companies, leaders in their respective industries, with ownership interests in unlisted companies, which offer steady returns with controlled levels of risk.

The breakdown of the gross value of the portfolio (of which 70% relates to listed companies) at 31 December 2013 is as follows:

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1 Saba, Mediterránea Beach & Golf Community, Vithas, Caixa Capital Risc and Colonial

Significant events during the year

Real estate business

Servihabitat had traditionally engaged in (i) the acquisition, ownership and sale of all manner of real estate assets –including the assets awarded to “la Caixa” (up to the date of the reorganisation of the “la Caixa” Group's banking business)–; and (ii) the administration, management, operation and marketing, through sale or lease, except under finance lease, of all manner of real estate assets owned by it or by third parties.

As a result of the growing interest of foreign investors investing in real estate service management platforms -servicers- in the Spanish real estate market, in 2013 the “la Caixa” Group took the decision to facilitate the entry of an investor in the real estate management business carried on by Servihabitat. Accordingly, the acquisition management, development, asset management and retail activities that had traditionally been carried on by Servihabitat were transferred to the servicer, and, therefore, Servihabitat's main activity became the holding of real estate assets. As a result of the transfer to the servicer, the business activities of Criteria and Servihabitat were now similar, as they both engaged mainly in the ownership of assets (ownership interests in the case of Criteria and real estate assets in the case of Servihabitat). With the aim of simplifying the “la Caixa” Group's legal and operating structure, in December 2013 the merger of the two companies was registered at the Barcelona Mercantile Registry, thus increasing efficiency in the management and execution of their activities. Abertis

On 22 March 2013, Criteria sold 3% of the share capital of Abertis Infraestructuras, S.A. to the Obrascón Huarte Laín Group. This transaction was carried out for EUR 342.2 million, with consolidated gains before tax of EUR 128 million.

At 31 December 2013, Criteria had an ownership interest of 19.2% in Abertis Infraestructuras.

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INVESTEE PORTFOLIO

GAS NATURAL (34.5%)

Gas Natural Fenosa is a leading multinational company in the gas and electricity industry. It is present in 25 countries and has almost 20 million customers and an installed capacity of over 15 GW.

It is the largest integrated gas and electricity utility in Spain and Latin America, leader in the retailing of gas in the Iberian Peninsula and the main distributor of natural gas in Latin America. Also, it is a benchmark LNG(

1) and natural gas operator in the Atlantic and Mediterranean basin

Highlights in 2013

Having achieved all the financial objectives established in its 2010-2012 Strategic Plan, Gas Natural Fenosa presented its new 2013-15 Strategic Plan and its vision until 2017. The three-year period from 2013 to 2015 is expected to be complicated in light of the effects of regulatory changes and the economic and energy scenarios in Spain and Europe. In this period the Group will lay the foundations for tackling successfully the period of recovery and growth that is expected to take place in 2016-17, supported by the economic recovery in Spain and the commencement of new gas, international generation and gas distribution projects.

In 2013 Gas Natural Fenosa's international presence continued to grow: in July the Group won the tender to supply natural gas to southeast Peru for 20 years, and in August the continuation of its electricity distribution operations in Panama for 15 years was confirmed. In addition, the Group strengthened its gas and LNG business by entering into new procurement (Algeria, Azerbaijan and Russia) and supply (Argentina, Korea and Repsol) agreements.

The Group also demonstrated its ability enter debt markets. In 2013 it made three issues in the euro market and one issue in new markets (Switzerland), and undertook a new refinancing operation for more than EUR 2 billion. In this way, the Group consolidated its financial soundness

* and closed the year

with agency ratings above those for sovereign debt.

Corporate social responsibility

For Gas Natural Fenosa corporate social responsibility comprises a series of actions aimed at developing stable, sound and mutually beneficial relations and a climate of confidence with its stakeholders. In this way, Gas Natural Fenosa takes on seven corporate social responsibility commitments: (i) customer orientation; (ii) commitment to results; (iii) the environment; (iv) interest in people; (v) health and safety; (vi) commitment to society; and (vii) integrity.

Gas Natural Fenosa has been included in the FTSE4Good index since its creation in 2001. In 2013 the Dow Jones Sustainability Index once again acknowledged Gas Natural Fenosa as a leader in the gas utilities industry and for the second year running it was recognised as the world's most highly valued utility by the Carbon Disclosure Project (the main parameters measured being transparency and climate change strategy). In addition, Gas Natural Fenosa is a member of the Asociación Española del Pacto Mundial de Naciones Unidas (the Spanish Association of the UN Global Compact -ASEPAM-), Forética, and the Corporate Excellence - Centre for Reputation Leadership Foundation.

(1) Liquefied natural gas. *2013 Net debt/EBITDA (2.9x)

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Main aggregates

Income statement (millions of euros) 2013 2012

Revenue 24,969 24,904

EBITDA 5,085 5,080

Net profit 1,445 1,441

Balance sheet (millions of euros) 2013 2012

Total assets 44,495 46,887

Equity 15,010 14,879

Net financial debt 14,641 15,995

Operating data 2013 2012

Gas distribution (GWh) 424,808 409,774

Electricity distribution (GWh) 51,750 54,362

Gas supply points (thousands) 11,948 11,663

Electricity supply points (thousands) 7,543 8,309

Generating capacity (MW) 15,420 15,519

Electricity production (GWh) 53,756 56,248

ABERTIS (19.2%)

Abertis is the leading international group in toll road and telecommunications infrastructure management. It has become the world leader in the toll road management sector with more than 7,300 kilometres globally thanks to the inclusion of nine OHL toll road concession operators in Brazil and another three in Chile. As a result of the geographical diversification undertaken in recent years, Abertis has a presence through its various business areas in 12 countries in Europe and the Americas, generating more than 60% of its revenue outside Spain in 2013. Abertis is listed on the Spanish stock markets and is part of the Ibex 35 index and the international FTSEurofirst 300 and Standard & Poor’s Europe 350 indexes.

Highlights in 2013

As part of the company's strategy of updating constantly its portfolio and focusing on its core businesses, in 2013 Abertis sold most of its airport assets (TBI, Codad and Aerocali).

In the context of acquiring toll road assets in Brazil, in September 2013 Abertis and Brookfield launched a takeover bid for all the shares of Arteris (formerly OHL Brasil), acquiring 24.2% of the share capital. As a result of the settlement of the takeover bid, the consortium has a direct ownership interest of 69.3% in Arteris.

In 2013 Abertis acquired a majority ownership interest in the satellite operator Hipasat. It currently holds 57.1% of the shares thanks to the acquisition of 7.2% from Telefónica and 16.4% from the Spanish National Institute for Aerospace Technology (INTA), which is attached the Spanish Ministry of Defence.

As regards the telecommunications infrastructure business, in December 2013 Abertis acquired 1,741 mobile telephony towers from Telefónica and Yoigo. This transaction formed part of the agreement entered into with the two operators for the restructuring and streamlining of their mobile infrastructure, which will entail the acquisition, in different stages, by Abertis of at least 4,227 passive infrastructures and the decommissioning of those which cannot be optimised.

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In February 2014 Abertis acquired 6% of the ownership interest in Metropistas (two toll roads in Puerto Rico) from the investment funds managed by Goldman Sachs, thus holding an ownership interest of 51% in the aforementioned company and fully consolidating this asset.


For Abertis, corporate social responsibility (CSR) is a way of understanding the company’s role in society, taking into consideration the environmental, social and economic impact of its activities and its relations with the various stakeholders.

The Abertis Strategic Social Responsibility Plan represents a roadmap and it is complemented by involvement in various initiatives such as, for example, the United Nations Global Compact, the Carbon Disclosure Project and the Dow Jones Sustainability Index. Abertis was included in the Dow Jones Sustainability Index (DJSI) for the seventh time, after six consecutive appearances and one year off the index, in the World and Europe categories.

Main aggregates

Income statement (millions of euros) 2013* 2012*

Revenue 4,654 3,721

EBITDA

2,923 2,363

Net profit

617 1,024

Balance sheet (millions of euros) 2013* 2012

Total assets

28,134 29,087

Equity

6,590 6,961

Net financial debt

13,155 14,130

Revenue/ operating data 2013* 2012

ADT (Average daily traffic) 19,796 21,490

Toll road revenue

4,139 3,220

Telecommunications revenue 511 493

Airport revenue

N/A 319 *The airport division is classified as discontinued operations

AGUAS DE BARCELONA (24.1%)

Aguas de Barcelona (Agbar) is an international benchmark as an operator in the field of water and environmental services. With a total volume of assets of around EUR 5,650 million, it is the leading private operator in the water management business in Spain, supplying water to more than 1,000 municipalities. Globally, Agbar provides services to more than 26 million people in Spain, Chile, the UK, Colombia, Algeria, Cuba, Mexico, Peru, Brazil, Turkey and the US.

Highlights in 2013

In 2013 the various companies that make up Agbar were reorganised, thus adapting its corporate structure to its geographical presence and the businesses in which it operates. To do so, Aquadom (concession operators) and Aqualogy Soluciones y Tecnologías (environment, infrastructure, solutions and knowledge) were incorporated.

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On 1 August, Agbar and the Barcelona Metropolitan Area (AMB) incorporated Aigües de Barcelona, empresa metropolitana de gestió del cicle integral de l’Aigua S.A. (owned 85% by Agbar and 15% by AMB). The company will manage the entire water cycle in the metropolitan area of Barcelona. Agbar provided its water supply service assets and AMB provided its waste water treatment and reuse assets.

In 2013 the Agbar Group continued to develop both its domestic and international commercial activities. In Spain, 15 low-pressure water distribution system contracts

2, 12 new high-pressure water distribution

system contracts3, 13 new sewerage system contracts and 19 new contracts for the management of

waste water treatment plants were awarded or renewed. Notable events at international level were the entry into service of the Mapocho treatment plant in Chile, which made it possible to treat 100% of the waste water.

Lastly, worthy of note in 2013 was the obtainment of control of Aigües de Sabadell, through a takeover bid, and Mina Pública d’Aigües de Terrassa (through the execution of a new shareholders agreement).


At Agbar, corporate social responsibility is understood as the integration in decision-making processes relating to economic, environmental, social, employment, ethical and moral variables as a means of extending the management capacity of its human resources by increasing their awareness of the consequences of their decisions. It is inherent to the very nature of Agbar's business activity, since it provides a public service where quality, respect for the environment and social progress are basic principles which form part of its responsibility.

Corporate responsibility forms part of the Group's management model, having been built on the foundations of the company's vision, mission and values. The preparation of a new medium-term Corporate Responsibility Plan is palpable evidence of the fact that corporate responsibility is a principle that is ever present in the company' activities. This 2012-2016 Plan reaffirms Agbar's commitment to its stakeholders and updates the actions and objectives assigned to each of them.

Main aggregates


Revenue 2,037 1,933

EBITDA 648 641

Net profit 136 117



Equity 2,701 2,645

Net financial debt 1,297 1,450

Operating data(1) 2013 2012

Water consumption in Spain 745 768

Water consumption in Chile 549 538

(1) Data in hm3.

2 Low-pressure water distribution: distribution to end consumer.

3 High-pressure water distribution: water catchment, transportation and treatment.

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SABA INFRAESTRUCTURAS (50.1%)

Saba Infraestructuras ("Saba") is a benchmark industrial operator in the management of car parks and logistics parks. With a presence in six countries, namely Spain, Italy, Chile, Portugal, France and Andorra, the Group manages more than 180,000 parking spaces in 327 car parks, following the Aena and Adif transactions. It also manages a network of eleven logistics parks which cover approximately 700 hectares and have a buildable area of almost 3 million square metres.

Highlights in 2013

In 2013 Saba focused its activities on three important lines: efficiency, commercial innovation and proactiveness and growth.

In terms of efficiency, the company continued with the plan it launched in 2012, focusing its efforts mainly on the improvement of its internal and business systems, the simplification of its organisation and support tools, and the across-the-board reduction of operating costs. In addition, it implemented the Remote Car Park Management project and the energy efficiency plan, by commencing the introduction of LED technology in its car park network.

Under commercial innovation and proactiveness, Saba has continued to foster diversification and customer loyalty by working on the quality of its service, improving its facilities, providing discounts and promotions, launching new products and implementing VIA T. At 2013 year-end, Saba had installed this access and payment system in 29 of its car parks in Spain, achieving usage of 30% by both the general public and residents, and a total of 1.2 million transactions were made with VIA T.

With regard to growth, most noteworthy in the car park business area was Saba's successful bid for the lease agreement for car parks in the Adif train station network, which entails 22,000 new parking spaces located at 51 train stations over a ten-year period. In addition, Saba was awarded the management of the Mediterranean lot car parks at 14 airports in the Spanish public airports and aviation agency (Aena) network, which includes 57,000 parking spaces over a five-year period.

Also noteworthy in this business area are the acquisition of the Carles III car park in Barcelona, and the inclusion of managed assets: the Cima Hospital in Barcelona; the Vila Franca de Xira Hospital and Porto Business School in Portugal, and the Universidad Católica in Chile. Under concession arrangements, Saba incorporated the regulated parking areas of Blanes (Girona), Masnou (Barcelona), la Seu d’Urgell (Lleida) and Castellar del Vallès (Barcelona), as well as in Verona (Italy), where it opened a car park.

With regard to logistics parks, in 2013 Saba entered into 30 new agreements covering 62,000 square metres. Also, 40 customers, representing 175,000 square metres, renewed agreements and extended the duration of the agreements or the areas covered thereby. Worthy of note is the development of the ZAL Toulouse logistics activity area and the obtainment of major customers: Bimbo and ALK (Coslada), Airbus (ZAL Seville), Egetra (ZAL Toulouse), Airfarm (PLZF), as well as the signing of an agreement with Gazeley for the launch and development of the Lisbon logistics platform.


Corporate social responsibility is a cornerstone of Saba's strategy, and its activities are focused mainly on respecting the environment (the introduction of LED technology and a 6% reduction in Saba's carbon footprint in 2013, among others), society (signing agreements to foster the employment of disabled people) and mobility, through active cooperation with authorities to find long-term solutions in urban areas (such as the implementation of VIA T in the main car parks).

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Main aggregates (*)


Revenue 185 196

EBITDA 77 78

Net profit 0,1 3,1



Equity 495 503

Net financial debt 380 388

(*) Consolidated results of Saba Infraestructuras.

MEDITERRÁNEA BEACH & GOLF COMMUNITY (100%)

Mediterránea Beach & Golf Community is the owner of a 600,000 square metre developed land reserve and of the three-course Lumine Golf Club designed by Greg Norman and Alfonso Vidaor. Since 2010 the golf courses have been managed by Troon Golf, an international company with more than 20 years’ experience and a proven track record in the management, development and marketing of top-level golf complexes.

Highlights in 2013

In 2013 the Mediterránea Beach & Golf Community golf courses played host to important tournaments such as the Spanish Junior Open, the European Tour Qualifying School and the PGA Championship.

In 2013 the company also hosted the International Golf Travel Market (IGTM), the world's most important golf industry fair and the main global golf event for the tourism service offering, its buyers and the media.


Lumine Golf Club maintains the highest quality standards, as acknowledged and accredited by the International Gold Signature Sanctuary certificate from the Audubon Society, one of the oldest, most respected and demanding conservation organisations. This certificate is awarded to the best golf courses in the world in recognition of their respectful and sustainable integration in the environment.

Main aggregates


Total assets 307 300

Equity 102 109

Net financial debt* -10 183


Number of rounds 60,123 53,277

* The Parent granted financing to repay i ts financia l debt prior to the

capita l increase that took place in 2014.

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VITHAS (20.0%)

Vithas currently has ten hospitals and a procurement platform (PlazaSalud24).

Vithas is Spain's third largest* private hospital group. Its ten hospitals are hospitals of reference in their respective areas of influence (Alicante, Almería, Granada, Las Palmas de Gran Canaria, Lleida, Madrid, Málaga, Tenerife, Vigo and Vitoria-Gasteiz) and attend health insurance company, private and occupational accident insurance company patients, in addition to referral patients in collaboration with the Spanish national health service, taking the view that the best healthcare is that which pools both private and public resources to the benefit of society as a whole.

Hospital network of the Vithas Group.

* Source: DBK 2013. By volume of billings, excluding hospital groups owned by health insurance companies in view of their exclusive nature.

Vithas has a dual commitment: healthcare and the welfare of people. For this purpose, Vithas combines

a local management model, specialised and adapted to the needs of the communities in which the

centres are located, with an integrated vision which enables it to unify the quality of the care provided.

Vithas plans to progressively integrate new hospitals and specialist centres into the Group and has an ongoing commitment to invest in improvements to infrastructure and technology facilities, allocating up to 7% of its annual income, which in absolute terms would represent around EUR 15 million per year.

Highlights in 2013

2013 saw the inauguration of a new unit specialising in women and children called “Vithas Salud Maternum”. The unit boasts more than 1,000 m2 and EUR 600,000 were invested. In Almeria a new medical specialties unit was created, supplying the Virgen del Mar Hospital with new, cutting edge equipment and medical technologies. An investment of EUR 5 million was made and confirms Vithas's commitment to consolidating its growth project.

The Group's revenue in 2013 was slightly up on that of 2012. The increase in billings to insurance companies and the private segment offset the loss of revenue from the Spanish national health service and the occupational accident insurance companies as a result of the difficulties experienced by the national health system and the Spanish labour market.

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The Group's commitment to CSR positions the hospitals as responsible companies that are committed to the social and environmental context in which they operate. Noteworthy in this regard is the Group's new “Vithas Aula Salud” initiative, which aims to educate different segments of the population about healthcare topics, for example, healthy eating habits, the prevention of traffic accidents and assisted reproduction. Several conferences were held at all the Group's hospitals.

Main aggregates


Revenue 200 196

EBITDA 32 32

Net profit 13 13


Total assets 231 223

Equity 103 91

Net financial debt 68 73


Number of patients 1,560,693 1,561,588

CAIXA CAPITAL RISC (100%)

Caixa Capital Risc, the venture capital arm of the “la Caixa” Group, is a leading management investment

fund that provides equity and participating loans to innovative companies in their early stages.

Caixa Capital Risc currently manages a capital of EUR 103 million, which it invests mainly in Spanish

companies in the digital technologies, life sciences and industrial technologies fields.

Through four specialised vehicles it invests in the first rounds of funding (seed capital) and supports

companies as they grow.

This management company comprises a team of professionals whose main activity is to identify,

analyse, invest in and support innovative business projects in their early stages in Spain.

Highlights in 2013

2013 saw significant investment activity: 577 investment opportunities were analysed, resulting in 42 investments, making Caixa Capital Risc one of the most active players in the country. In addition, Caixa Capital Risc's noteworthy portfolio monitoring activity led to 6 divestitures and 26 capital increases incorporating new venturers.


Alongside its investment activity, Caixa Capital Risc is a strong supporter of entrepreneurs throughout Spain. Through the EmprendedorXXI award, Caixa Capital Risc promotes initiatives that provide recognition, training to and showcase new companies with high potential, while facilitating the generation of value-added contacts.

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Main aggregates


Revenue 3.3 2.4

EBITDA

0.7 0.4

Net profit

0.5 0.3


Total assets

3.9 3.2

Equity

2.7 3.3


Funds managed 73 73

2 Risk management

The Criteria CaixaHolding Group's main risk is that associated with the investee portfolio.

This risk is associated with the possibility of incurring losses due to changes in market prices and/or to losses on the positions composing the investment portfolio at medium to long term.

Criteria and the Strategic Risk Management Division of the “la Caixa” Group measure the risk exposure of these positions, both from the standpoint of the risk inherent in market price volatility, using VaR (Value at Risk) models on the risk-free interest rate yield spread as proposed by the New Basel Capital Accord (NBCA) for banks, and from the point of view of the possibility of bankruptcy, applying models based on the Probability of Default and Loss Given Default (“PD” and “LGD”) approaches, also in accordance with the provisions of the NBCA.

Also, as part of the active management of the investments and of the ongoing monitoring thereof, the Group's teams of specialists monitor the investees. At least once a year and whenever there are indications that the Group's investments might have become impaired, internal impairment tests are conducted using generally accepted valuation methods.

Specifically, to ensure that the property asset portfolio is measured on the basis of its actual valuation in the balance sheet, the Group bases its measurements on accredited appraisals and its intention to realise its assets in the short and medium term, for which purpose the expectations regarding the evolution of the Spanish property market in the medium and long term were taken into account. These appraisals are carried out frequently and, as a result, more than half the assets were appraised less than twelve months ago and the remainder were appraised no more than two years ago, in almost all cases.

The property assets acquired are managed with a view to recovering the amount invested through their sale. The strategies used for this purpose are as follows:

- Land development. The economic value of the assets classified as rural land is negligible with respect to the assets acquired taken as a whole. However, some of the land, although classified as land for urban development, still requires the performance of certain actions in order to complete its development such as, inter alia, completion of planning, reparcelling or urban development. The aforementioned actions are carried out using the specialised services of Servihabitat Servicios Inmobiliarios, always in accordance with the most demanding investment criteria, and only taking action in cases in which the investment ensures that the value of the property assets affected will not drop.

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- Completion of property developments. The acquisition criteria established by the Group have restricted the acquisition of property developments in progress. A range of minor improvement measures are carried out with a view to being able to sell some of these property developments.

- Property development swap transactions. These consist of mobilising certain plots of land through their transfer to a property developer in return for a portion of the finished product in the promotion. This strategy is used very sparingly and very demanding standards are set in the selection of the property developers in terms of their solvency and capacity to implement the project in question. In this way, it is possible to transform the land acquired into a finished product, thereby facilitating its sale in the market.

- In-house property development. Used in a restricted number of highly specific transactions in which the quality and the characteristics of the asset indicate that its development is the clearest and safest way of recovering the investment and generating a positive margin. The Group's property development activities in 2013 were scant.

- Lease of property. This makes it possible to take advantage of the ever-increasing demand and to generate recurring revenue without forcing the sale of property in a shrinking purchase market in which there are difficulties in obtaining financing.

- Sale. The Group engages in very active, multi channel marketing activities, via the Internet, CaixaBank branches, Servihabitat Servicios Inmobiliarios offices and property development agents, etc., with the support afforded by the experience and know-how of Servihabitat Servicios Inmobiliarios.

Criteria CaixaHolding has established policies to minimise the other risks to which the Group is exposed, such as credit risk, interest rate risk, foreign currency risk and liquidity risk. Evaluation procedures have been put in place to enable management to monitor at all times whether or not it is necessary to hedge the risks assumed using financial instruments (see the Note on Risk management policy).

3 Use of financial instruments

The Group uses derivative financial instruments to hedge the financial risks to which it is exposed.

4 Events after the reporting period


In January 2014 Criteria Caixaholding, S.A.U. sold the interest it held in Inmobiliaria Colonial at 31 December 2013 (5.79%) for EUR 15 million, generating a gain before tax of EUR 4,760 thousand.

Mediterránea Beach & Golf Community

On 16 January 2014, Mediterránea Beach & Golf Community increased capital by EUR 196 million by issuing 239,025 new shares of EUR 41 par value each. This capital increase was fully subscribed by the Company.

Criteria Caixaholding

On 11 February 2014, Criteria CaixaHolding granted a loan of EUR 20 million to Resort Holdings, BV, maturing in 2021 and bearing interest of 10.25%.

5 Research and development activities

The Group did not engage in any research and development activities in 2013.

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6 Treasury share transactions

At 31 December 2013, the Group companies did not hold any shares of the Parent.

criteria caixaholding, s.a.u. and subsidiaries · net gains on financial transactions (note 17.2)...

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