Criteria CaixaHolding, S.A.U. · PDF fileStatements of cash flows ... The accompanying Notes 1 to 25 and the Appendices are an integral part of the statement of cash flows for 2013

Criteria CaixaHolding, S.A.U.

Financial Statements for the year ended

31 December 2013 and Directors' Report

Translation of financial statements originally issued in Spanish

and prepared in accordance with the regulatory financial

reporting framework applicable to the Company (see Notes 2 and

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

prevails.

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Balance sheets ......................................................................................................................................................... 3

Income statements ................................................................................................................................................. 5

Statements of changes in equity ............................................................................................................................. 6

Statements of cash flows ........................................................................................................................................ 8

Notes to the financial statements

1. Company activities ....................................................................................................................................... 9

2. Basis of presentation of the financial statements ..................................................................................... 12

3. Distribution of profit/Allocation of loss ..................................................................................................... 16

4. Accounting policies .................................................................................................................................... 17

5. Intangible assets ........................................................................................................................................ 27

6. Property, plant and equipment .................................................................................................................. 28

7. Investment property ................................................................................................................................... 29

8. Leases ......................................................................................................................................................... 32

9. Non-current investments in Group companies, jointly controlled entities and associates ........................ 33

10. Non-current financial assets ...................................................................................................................... 39

11. Non-current assets classified as held for sale ............................................................................................. 40

12. Inventories .................................................................................................................................................. 42

13. Current financial assets - Dividends receivable .......................................................................................... 43

14. Cash and cash equivalents .......................................................................................................................... 44

15. Equity .......................................................................................................................................................... 44

16. Financial liabilities (current and non-current) ............................................................................................ 46

17. Tax matters ................................................................................................................................................ 47

18. Income and expenses ................................................................................................................................. 52

19. Related party transactions .......................................................................................................................... 57

20. Note to the statement of cash flows .......................................................................................................... 63

21. Information on the environment ................................................................................................................ 63

22. Risk management policy ............................................................................................................................. 63

23. Segment reporting ...................................................................................................................................... 66

24. Events after the reporting period ............................................................................................................... 66

25. Explanation added for translation to English .............................................................................................. 67

APPENDIX I Disclosure requirements of Article 93 of the Consolidated Spanish Income Tax Law in relation to the merger of the Company and Criteria CaixaHolding (the absorbed company). ................................................ 68

APPENDIX II Investments in Group companies ...................................................................................................... 71

APPENDIX III Investments in jointly controlled entities and associates ................................................................. 72

APPENDIX IV Available-for-sale financial assets - Equity instruments ................................................................... 73

2013 Directors’ Report

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The accompanying Notes 1 to 25 and the Appendices are an integral part of the balance sheet at 31 December 2013.

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

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

to the Company (see Notes 2 and 25). In the event of a discrepancy, the Spanish-language version prevails.

CRITERIA CAIXAHOLDING, S.A.U.

BALANCE SHEETS AT 31 DECEMBER 2013 AND 2012

Thousands of euros

ASSETS Notes 31/12/13 31/12/12(*)

NON-CURRENT ASSETS

Intangible assets (Note 5) 301 4,563

Property, plant and equipment (Note 6) 1,750 47,626

Investment property (Note 7) 596,509 526,071

Non-current investments in Group companies, jointly controlled entities and associates

(Note 9) 8,061,409 622,269

Investments in Group companies (Note 9.1) 453,977 242

Investments in associates and jointly controlled entities (Note 9.2) 6,726,938 1,856

Other financial assets (Note 9.3) 880,494 620,171

Non-current financial assets (Note 10) 16,030 4,744

Equity Instruments 14,065 3,411

Other non-current financial assets 1,965 1,333

Deferred tax assets (Note 17) 1,005,072 258,118

Total non-current assets 9,681,071 1,463,391

CURRENT ASSETS

Non-current assets classified as held for sale (Note 11) 1,242,812 -

Inventories (Note 12) 187,438 2,111,713

Trade and other receivables 88,972 417,967

Trade receivables for sales and services 386 390

Receivable from Group companies and associates (Note 19) 81,464 417,569

Sundry accounts receivable 17 -

Employee receivables - 8

Other accounts receivable from public authorities (Note 17) 7,105 -

Current investments in Group companies and associates (Note 9.3) 315 43

Loans to companies 315 43

Current financial assets 135,864 515

Dividends receivable (Note 13) 135,762 -

Loans to companies 1 515

Other 101 -

Cash and cash equivalents (Note 14) 207,949 5,150

Total current assets 1,863,350 2,535,388

TOTAL ASSETS 11,544,421 3,998,779

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BALANCE SHEETS AT 31 DECEMBER 2013 AND 2012

Thousands of euros

EQUITY AND LIABILITIES Notes 31/12/13 31/12/12(*)

EQUITY:

Shareholders’ equity

Registered share capital 1,381,520 3,453,800

Share premium - 33,500

Legal and bylaw reserves 24,587 5

Other reserves - (12,575)

Merger reserves 7,143,452 (5,673)

Other shareholder contributions - (57,959)

Retained losses - (1,189,410)

Profit (Loss) for the year 110,055 (815,581)

Interim dividend paid during the year (81,000) -

Valuation adjustments 2,416 -

Available-for-sale financial assets 2,416 -

Total equity (Note 15) 8,581,030 1,406,107

NON-CURRENT LIABILITIES

Long-term provisions (Note 9.1) 150,472 67,794

Non-current payables (Note 16) 2,302,611 2,250

Deferred tax liabilities (Note 17) 318,846 -

Total non-current liabilities 2,771,929 70,044

CURRENT LIABILITIES

Current payables (Note 16) 33,882 2,436,107

Current payables to Group companies, associates and jointly controlled entities

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Trade and other payables 157,580 86,509

Payable to suppliers 40,718 67,457

Payable to suppliers - Group companies and associates

(Note 19) 13,768 7,053

Accounts payable 3,579 -

Remuneration payable - 1,550

Other accounts payable to public authorities

(Note 17) 615 1,219

Customer advances 6,293 9,230

Deposits received as security (Note 9.2) 91,434 -

Other 1,173 -

Total current liabilities 191,462 2,522,628

TOTAL EQUITY AND LIABILITIES 11,544,421 3,998,779

The accompanying Notes 1 to 25 and the Appendices are an integral part of the balance sheet at 31 December 2013.

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

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INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012

Thousands of euros

Notes 2013 2012(*)

Revenue 713,969 456,181

Revenue from equity investments (Note 18) 432,407 -

Changes in fair value of financial instruments (2,127) -

Net gains on disposals of financial instruments (Note 18) 244,434 -

Sales (Note 18) 34,650 386,048

Services (Note 18) 4,605 70,133

In-house work on non-current assets (Note 7) 101,548 193,286

Inventories included in investment property 101,548 193,286

Procurements (Note 18) (107,438) (1,507,751)

Purchases of land, developments in progress and completed developments

(107,438) (654,997)

Impairment of land, developments in progress and completed developments

- (852,754)

Other operating income 362 342

Staff costs (Note 18) (8,555) (9,729)

Other operating expenses (44,371) (98,949)

Outside services (26,679) (82,406)

Taxes other than income tax (11,987) (14,850)

Losses on, impairment of and changes in allowances for trade receivables

(5,705) (1,693)

Depreciation and amortisation charge (10,648) (9,407)

Changes in provisions 1,058 -

Impairment and gains or losses on disposals of non-current assets (Note 18) (583,556) (8,245)

Impairment and other losses (552,114) (3,908)

Gains or losses on disposals and other (31,442) (4,337)

Impairment and other losses on financial instruments (Note 18) (87,172) (30,478)

Other gains or losses 743 (263)

LOSS FROM OPERATIONS (24,060) (1,015,013)

Finance income (Note 18) 62,078 3,723

Finance costs (Note 19) (102,925) (114,135)

FINANCIAL LOSS (40,847) (110,412)

LOSS BEFORE TAX

(64,907) (1,125,425)

Income tax

(Note 17) 174,962 309,844

PROFIT (LOSS) FOR THE YEAR 110,055 (815,581)

The accompanying Notes 1 to 25 and the Appendices are an integral part of the income statement for 2013.

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

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STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED 31 DECEMBER 2013 AND 2012 A) STATEMENTS OF RECOGNISED INCOME AND EXPENSE

Thousands of euros

Notes 2013 2012(*)

A) PROFIT (LOSS) PER INCOME STATEMENT 110,055 (815,581)

(8,895) B) INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY (4,549) -

I. Arising from revaluation of financial instruments (Note 15) (6,499) -

II. Arising from cash flow hedges - -

III. Grants, donations and legacies received - -

IV. Arising from actuarial gains and losses and other adjustments - -

V. Tax effect (Note 15) 1,950 -

C) TRANSFERS TO PROFIT OR LOSS (Note 15) (4,346) -

VI. Arising from revaluation of financial instruments (6,208) -

VII. Arising from cash flow hedges - -

VIII. Grants, donations and legacies received - -

IX. Tax effect 1,862 -

TOTAL RECOGNISED INCOME AND EXPENSE 101,160 (815,581)

The accompanying Notes 1 to 25 and the Appendices are an integral part of the statement of recognised income and expense for 2013.


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Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 2 and 25).

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

The accompanying Notes 1 to 25 and the Appendices are an integral part of the statement of changes in total equity for 2013.

(*) The figures for 2012 and 2011 are presented for comparison purposes only.


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

B) STATEMENTS OF CHANGES IN TOTAL EQUITY

Thousands of euros

Share Share Merger Retained Other Profit (Loss) Interim Shareholders’ Valuation Total

capital premium Reserves reserves losses shareholder for the year dividend equity adjustments equity

Ante. contributions

Balance at 31 December 2011 3,453,800 33,500 (12,566) - (615,855) (57,959) (573,555) - 2,227,365 - 2,227,365

I. Total recognised income and expense - - - - - - (815,581) - (815,581) - (815,581)

II. Transactions with shareholders - - - - - - - - - - -

Decrease in equity resulting from merger (Note 1) - - (4) (5,673) - - - - (5,677) - (5,677)

III. Allocation of loss - - - - (573,555) - 573,555 - - - -

Balance at 31 December 2012 3,453,800 33,500 (12,570) (5,673) (1,189,410) (57,959) (815,581) - 1,406,107 - 1,406,107

I. Total recognised income and expense - - - - - - 110,055 (81,000) 29,055 (8,895) 20,160

II. Transactions with shareholders - - - - - - - - - - -

Increase in equity resulting from merger (Notes 1 and 2) - - - 7,727,452 - - - - 7,727,452 11,311 7,738,763

Capital reduction (Note 15) (2,072,280) (33,500) 37,157 5,673 2,004,991 57,959 - - - - -

Distribution of reserves - - - (584,000) - - - - (584,000) - (584,000)

III. Allocation of loss - - - - (815,581) - 815,581 - - - -

Balance at 31 December 2013 1,381,520 - 24,587 7,143,452 - - 110,055 (81,000) 8,578,614 2,416 8,581,030

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

The accompanying Notes 1 to 25 and the Appendices are an integral part of the statement of cash flows for 2013.


Thousands of euros

2013 2012(*)

A) Cash flows from operating activities 437,266 166,852

1. Loss for the year before tax (64,907) (1,125,425) 2. Adjustments for: 52,156 961,148

Depreciation and amortisation charge 10,648 9,407 Impairment losses 552,114 856,662 Changes in provisions 91,819 (19,597) Net losses on derecognition and disposal of non-current assets 31,442 4,337

Net gains on derecognition and disposal of financial instruments (244,434) (73) Changes in fair value of financial instruments 2,127 - Revenue from equity investments (432,407) - Finance income (62,078) (3,723) Finance costs 102,925 114,135

3. Changes in working capital 76,215 413,289 Inventories 5,890 411,317 Trade and other receivables 3,579 4,774 Current liabilities 74,635 (150) Other non-current assets and liabilities (7,889) (2,652)

4. Other cash flows from operating activities 373,802 (82,160) Interest paid (109,914) (82,160) Dividends received 438,418 - Interest received 7,964 - Income tax recovered (paid) 37,334 -

B) Cash flows from investing activities 396,245 (31,150)

Payments due to Investment (-) (255,116) (45,195) Intangible assets and property, plant and equipment (1,128) (4,414) Investment property (9,256) (22,396) Group companies and associates (210,836) (10,586) Non-current assets classified as held for sale (33,893) - Other financial assets (3) (7,799)

Proceeds from disposal (+) 651,361 14,045 Investment property 6,370 13,025 Subsidiaries, joint ventures and associates 542,999 1,020 Available-for-sale financial assets 8,042 - Non-current assets classified as held for sale 93,950 -

C) Cash flows from financing activities (760,261) (149,785)

Dividends and returns on other equity instruments paid (665,000) - Interim dividend for current year (81,000) - Distribution of reserves (584,000) -

Proceeds and payments relating to financial liability instruments (95,261) (149,785) Proceeds from issue of bank borrowings - Group companies 270,000 1,490,380 Proceeds from issue of borrowings from Group companies 950,000 - Repayment of bank borrowings - Group companies (1,045,261) (1,640,165) Repayment of borrowings from Group companies (270,000) -

NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS 73,250 (14,083)

Cash at beginning of year 5,150 13,560 Business unit (Note 2) 129,549 5,673 Cash at end of year 207,949 5,150

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

reporting framework applicable to the Company (see Notes 2 and 25). In the event of a discrepancy, the Spanish-language

version prevails.

Criteria CaixaHolding, S.A.U. Notes to the financial statements for the year ended 31 December 2013

1. Company activities

Criteria CaixaHolding, S.A.U. ("the Company" or "Criteria"), 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. On 18 December 2013, as a result of the merger of Servihabitat XXI, S.A.U. and Criteria CaixaHolding, S.A.U. explained in this same Note, Servihabitat XXI, S.A.U. adopted the name Criteria CaixaHolding, S.A.U.

Its registered office is at Avenida Diagonal 621-629 Barcelona.

The object of Criteria CaixaHolding, S.A.U., 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;

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 the Company itself or by others.

f) the marketing of real property, for the Company's 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 Company may also have interests in other companies, even participating in their incorporation, forming associations with them or having any kind of involvement with them.

The Company forms part of the Caixa d’Estalvis i Pensions 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.

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In 2013 the following transactions were performed:

Spin-off of the real estate management line of business

On 19 February 2013, the plan for the spin-off of the Company's real estate management line of business was approved, and the assets and liabilities of this business were contributed to the newly-formed company Servihabitat Gestión Inmobiliaria, S.L.U. (see Notes 2 and 9). The spin-off public deed was registered at the Mercantile Registry on 27 March 2013.

Sale of Servihabitat Gestión Inmobiliaria, S.L.U.

On 26 September 2013, it was announced that the Boards of Directors of ”la Caixa”, CaixaBank, S.A., Servihabitat XXI (the absorbing company) and Criteria CaixaHolding, S.A.U. (the absorbed company) had approved the sale, by the Company, of all the shares of Servihabitat Gestión Inmobiliaria, S.L.U. owned by it to CaixaBank, S.A. This transaction was executed in a public deed on 31 October 2013 (see Note 9.1).

Merger of Servihabitat XXI (now Criteria) and Criteria CaixaHolding (see Note 2)

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.

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, managing principally the property assets owned by CaixaBank and Servihabitat XXI.

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.

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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 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. The merger was effective for accounting purposes 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 Company's name was changed and the absorbing company adopted the name of the absorbed company (Criteria CaixaHolding, S.A.U.).

In 2012 the following transactions were performed:

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Merger of Servihabitat XXI (now Criteria) and Estuimmo, S.A.U., Estuillogimmo, S.L.U., Estuinvest, S.L.U., Estuvendimmo, S.L.U., Norton Center, S.L.U. and Servihabitat Alquiler III, S.A.U.

On 31 May 2012, Criteria CaixaHolding, S.A., the Company's then sole shareholder, resolved to merge the Company's wholly-owned subsidiaries Estuimmo, S.A.U., Estuillogimmo, S.L.U., Estuinvest, S.L.U., Estuvendimmo, S.L.U., Norton Center, S.L.U. and Servihabitat Alquiler III, S.A.U. (the absorbed companies) into Servihabitat XXI, S.A.U. (the absorbing company). The draft terms of merger were executed in a public deed on 6 July 2012 and were filed at the Barcelona Mercantile Registry on 13 July 2012.

Criteria CaixaHolding, S.A.U. meets the requirements in current legislation releasing it from the obligation to present consolidated financial statements provided for in Royal Decree 1159/2010, of 17 September. However, consolidated financial statements in accordance with International Financial Reporting Standards are voluntarily prepared and authorised for issue.

The accompanying financial statements do not reflect the financial position of the group headed by Criteria. These aggregates are presented in the consolidated financial statements prepared, in conjunction with the separate financial statements, in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, the main aggregates in which at 31 December 2013 were as follows:

Millions of euros 2013

Consolidated equity 9,192

Profit for the year attributable to the Group 472

Total consolidated assets 13,091

Revenue 349

2. Basis of presentation of the financial statements

a) Regulatory financial reporting framework applicable to the Company and fair presentation

The accompanying financial statements, which were formally prepared by the directors from the Company's accounting records, are presented in accordance with the regulatory financial reporting framework applicable to the Company, which consists of:

a) The Spanish Commercial Code, the Spanish Law on structural changes to companies formed under the Spanish Commercial Code and all other Spanish corporate law.

b) The Spanish National Chart of Accounts approved by Royal Decree 1514/2007, of 16 November, and its industry adaptations.

c) The mandatory rules approved by the Spanish Accounting and Audit Institute in order to implement the Spanish National Chart of Accounts and the relevant secondary legislation.

d) All other applicable Spanish accounting legislation.

The accompanying financial statements, which were obtained from the Company's accounting records, are presented in accordance with the regulatory financial reporting framework applicable to the Company and, in particular, with the accounting principles and rules contained therein and, accordingly, present fairly the Company's equity, financial position, results of operations and cash flows for 2013.

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These financial statements, which were authorised for issue by the Board of Directors at its meeting held on 27 March 2014, will be submitted for approval by the sole shareholder, and it is considered that they will be approved without any changes.

The financial statements for 2012 were approved by the sole shareholder on 21 February 2013. The financial statements for 2012 of the absorbed company were approved by the sole shareholder on 11 April 2013.

As a result of the merger indicated in Note 1, the ordinary activities of the Company, understood to be those carried one by the Company regularly and from which revenue was earned on a regular basis in 2013, corresponds to that of a holding company. Therefore, as regards the amounts corresponding to 2013, the Company's directors took into account the ruling published in Official Gazette nº. 79 (published on 28 July 2009) of the Spanish Accounting and Audit Institute (ICAC) in relation to the accounting classification in separate financial statements of the income and expenses of holding companies and to the determination of the revenue of entities of this nature.

Under this ruling, all the income obtained by a company as a result of its holding activities will constitute “Revenue” provided that these activities are considered to be ordinary activities. Therefore, both dividends and income obtained from the disposal of the investments in Group companies, jointly controlled entities and associates, their derecognition or changes in their fair value constitute, on the basis of the foregoing, "Revenue”.

Based on the foregoing and on the premise that the Company's ordinary activities include the strategic and long-term ownership of equity investments in other companies, certain reclassifications were made in the presentation of the Company's income statement.

Following is a detail of the line items forming an integral part of "Revenue":

- "Services": these include the services rendered to other companies;

- "Revenue from Equity Investments": this includes dividends received as a result of the ownership of equity investments in other companies;

- Change in fair value of financial instruments; and

- "Net Gains on Disposals of Financial Instruments".

Impairment and other losses on financial instruments and any exchange differences are included in the Company's profit or loss from operations.

Accordingly, at 31 December 2013 "Inventories" includes solely the land and property developments in progress held by the Company and "Non-Current Assets Classified as Held for Sale" includes the other properties recovered from lending transactions which, at 31 December 2013, the Company expects to recover through sale. The other property assets arising from lending transactions that are rented or are included in the Company's operating assets are classified as "Investment Property" and "Property, Plant and Equipment", respectively.

Pursuant to the ruling of the ICAC, "Financial Loss" is introduced, in which the finance income earned and the finance costs incurred during the year are included. The finance income earned on loans granted to subsidiaries is retained under "Financial Loss", since financing to subsidiaries is not a part of the Company's ordinary activity.

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b) Non-obligatory accounting principles applied

The directors formally prepared these 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.

c) Comparative information

The information contained in these notes to the financial statements at 31 December 2012 is presented for comparison purposes with that relating to 31 December 2013.

Spin-off of the real estate management line of business

Within the framework of the restructuring of the business activities carried on to date by the Company, on 19 February 2013, and effective for accounting purposes from 1 January 2013, Criteria CaixaHolding, S.A.U., the Company's then sole shareholder, approved the plan for the spin-off of the assets and liabilities associated with the Company's real estate management business to a newly-formed company Servihabitat Gestión Inmobiliaria, S.L.U. The spin-off plan was registered at the Barcelona Mercantile Registry on 27 March 2013.

The detail of the asset and liability items included in the spin-off is as follows:

Thousands Thousands

of euros of euros

NON-CURRENT ASSETS:

Intangible assets (Note 5) 4,563

Property, plant and equipment (Note 6) 524

CURRENT ASSETS:

Inventories 1,350

Advances to suppliers (Note 12) 1,350

Trade and other receivables 6,575 CURRENT LIABILITIES:

Receivable from Group companies and associates 6,567 Trade and other payables 2,318

Employee receivables 8 Payable to suppliers - Group companies and associates 624

Cash and cash equivalents 4,820 Remuneration payable 1,550

Cash 4,820 Other accounts payable to public authorities 144

Total assets 17,832 Total liabilities 2,318

Through the aforementioned non-monetary contribution, the Company subscribed and paid all the new shares of the newly-formed company Servihabitat Gestión Inmobiliaria, S.A. (see Note 9.1).

The transaction qualified for taxation under the tax neutrality regime provided for in Chapter VIII of Title VII of the Consolidated Spanish Income Tax Law approved by Legislative Royal Decree 4/2004, of 5 March, since it constitutes a contribution of a line of business in exchange for shares of the beneficiary company regulated by Article 83.3 of the Consolidated Spanish Income Tax Law.

Merger of Servihabitat XXI (now Criteria) and Criteria CaixaHolding

As indicated in Note 1, the Company was the beneficiary of the merger with Criteria CaixaHolding, S.A.U., a ”la Caixa” Group company. This transaction was effective for accounting purposes from 1 January 2013.

15

As a result of this merger and pursuant to Recognition and Measurement Standard 21 of the Spanish National Chart of Accounts, the assets and liabilities of the absorbed company were measured at the amounts that would correspond to them in the consolidated financial statements of the ”la Caixa” Group. The positive difference of EUR 151,170 thousand that arose as a result of the application of the aforementioned method, was allocated, pursuant to that standard, to a reserve account.

The detail of the amounts included in the accounting records of Servihabitat XXI (now Criteria) is as follows:

Criteria CaixaHolding,

S.A.U.

Effect of measurement

per the consolidated

financial statements

Merger

adjustment

Total amounts

included

1 January 2013

Intangible assets (Note 5) 233 - - 233

Property, plant and equipment (Note 6) 1,180 - - 1,180

Non-current investments in Group companies and associates (Note 9)

8,570,478 260,993 (1,360,090) 7,471,381

Non-current financial assets (Note 10) 29,482 - - 29,482

Deferred tax assets (Note 17) 399,574 - - 399,574

NON-CURRENT ASSETS 9,000,947 260,993 (1,360,090) 7,901,850

Trade and other receivables 9 - - 9

Current financial assets (Note 13) 136,778 - - 136,778

Cash and cash equivalents 134,369 - - 134,369

CURRENT ASSETS 271,156 - - 271,156

TOTAL ASSETS 9,272,103 260,993 (1,360,090) 8,173,006

EQUITY (Note 15) 8,947,683 151,170 (1,360,090) 7,738,763

Deferred tax liabilities (Note 17) 216,811 109,823 - 326,634

NON-CURRENT LIABILITIES 216,811 109,823 - 326,634

Current payables 383 - - 383

Payable to Group companies and associates 103,863 - - 103,863

Trade and other payables 3,363 - - 3,363

CURRENT LIABILITIES 107,609 - - 107,609

TOTAL EQUITY AND LIABILITIES 9,272,103 260,993 (1,360,090) 8,173,006

The effects of the measurement of the assets and liabilities at the amounts that would correspond to them in the consolidated financial statements of the ”la Caixa” Group relate basically to the undistributed profits obtained by the Criteria Group companies through 31 December 2012. The merger adjustment relates to the elimination of the investment in Servihabitat XXI held by Criteria (the absorbed company) when the merger took place.

d) Use of judgements and estimates

In preparing the accompanying financial statements estimates were made by the Company'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 in Group companies, jointly controlled entities and associates (see Note 9)

- Impairment losses on investment property, inventories and non-current assets classified as held for sale (see Notes 4-c, 4-g and 4-h).

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- The calculation of provisions and contingent liabilities (see Note 9).

- The recognition of tax assets and the recoverability thereof (see Note 17).

- The useful life of and impairment losses on intangible assets and property, plant and equipment (see Notes 5 and 6)

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.

e) 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.

f) Changes in accounting policies

In 2013 there were no significant changes in accounting policies with respect to those applied in the preparation of the information for 2012.

g) Correction of errors

In preparing the accompanying financial statements no significant errors were detected that would have made it necessary to restate the amounts included in the financial statements for 2012.

3. Distribution of profit/Allocation of loss

The distribution of the profit for 2013 proposed by the directors of Criteria CaixaHolding, S.A.U. and the allocation of the loss for 2012 are as follows:

Thousands of euros

2013 2012

Basis of appropriation:

Profit (Loss) for the year 110,055 (815,581)

Appropriation:

To retained losses - (815,581)

To legal reserve 11,006 -

To voluntary reserves 18,049 -

Interim dividends 81,000 -

Total 110,055 (815,581)

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The Board of Directors of the absorbed company, at its meeting held on 13 June 2013, approved the distribution of 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 provisional accounting statement prepared in accordance with legal requirements to evidence the existence of sufficient liquidity for the distribution of the aforementioned interim dividend is as follows:

(Thousands of euros)

Date of resolution to pay the interim dividend 13/06/13

Date of accounting close used 31/05/13

Profit obtained from 1 January 2013 272,051

Appropriation to legal reserve -

Maximum amount distributable 272,051

Interim dividend proposed (81,000)

Remainder 191,051

Amounts available in demand deposits 166,234 Projected changes in cash up to date of payment of dividend (172)

Interim dividend (81,000)

Remaining liquidity at date of payment of dividend 85,062

Projected changes in cash in following 12 months 155,172 Remaining liquidity 12 months later 240,234

4. Accounting policies

The principal accounting policies used by the Company in preparing the financial statements for 2013, in accordance with the Spanish National Chart of Accounts in force, were as follows:

a) Intangible assets

Intangible assets are initially recognised at cost and include basically the cost of developing new computer software, the useful life of which was estimated to be three years. They are subsequently reduced by any accumulated amortisation and any accumulated impairment losses.

Whenever there are indications of impairment, the Company tests the intangible assets for impairment to determine whether the recoverable amount of the assets has been reduced to below their carrying amount.

Recoverable amount is the higher of fair value less costs to sell and value in use and, wherever possible, the impairment tests are performed individually for each asset.

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 in prior years. A reversal of an impairment loss is recognised as income.

b) Property, plant and equipment

Property for own use, furniture and office equipment are recognised at cost less any accumulated depreciation and any accumulated impairment losses.

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Historical cost includes the expenses directly attributable to the acquisition of property.

Subsequent costs are included in the carrying amount of the asset or are recognised as a separate asset only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Other repair and maintenance expenses are recognised in the income statement for the year in which they are incurred.

The Company depreciates its property, plant and equipment for own use and other non-current assets by the straight-line method at annual rates based on the following years of estimated useful life:

Years of estimated useful life

Property:

Buildings 30 - 50

Plant 5 - 12.5

Computer hardware 2 - 3

Other items of property, plant and equipment 4-10

The gains or losses arising on the sale or derecognition of an asset are calculated as the difference between its carrying amount and its selling price, and are recognised under “Impairment and Gains or Losses on Disposals of Non-Current Assets” in the income statement

c) Investment property

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

Investment property is recognised at cost less any accumulated depreciation and any accumulated impairment losses.

The costs of expansion, modernisation or improvements leading to increased productivity, capacity or efficiency or to a lengthening of the useful lives of the assets are recognised as additions to the cost of the related assets , whereas upkeep and maintenance expenses are charged to the income statement for the year in which they are incurred.

In relation to projects in progress, only the costs of construction and borrowing costs are capitalised, provided that they had been incurred before the assets became ready for their intended use and the duration of the construction work exceeded one year.

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

Investment property in the course of construction is transferred to "Investment Property" when the assets become ready for use.

The Company depreciates its investment property by the straight-line method at annual rates based on the following years of estimated useful life:

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Years of estimated useful life

Property:

Buildings 50

Plant 12.5

The rental income earned in 2013 from the aforementioned investment property amounted to EUR 26,667 thousand (2012: EUR 12,599 thousand) (see Note 18-a), and is recognised under “Revenue - Sales” in the accompanying income statement.

Also, most of the repair and maintenance expenses incurred by the Company as a result of the operation of its assets are passed on to the corresponding lessees of the properties (see Note 4-p).

The gains or losses arising on the sale or derecognition of an asset are calculated as the difference between its carrying amount and its selling price, and are recognised under “Impairment and Gains or Losses on Disposals of Non-Current Assets” in the income statement Impairment of investment property and property, plant and equipment-

Periodically, the Company compares the carrying amount of the various items of its investment property with their recoverable amount, which is the higher of value in use and fair value less costs to sell. In order to determine the recoverable amount, the directors considered mainly the appraisals undertaken 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. When the aforementioned recoverable amount of the asset is less than its carrying amount, the Company recognises the appropriate impairment loss with a charge to the income statement.

d) 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.

At 31 December 2013, all the leases held by the Company were 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 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.

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e) Investments in Group companies, jointly controlled entities and associates

Group companies are defined as companies with which the Company constitutes a decision-making unit because it owns, directly or indirectly, more than 50% of the voting power, or, even if this percentage is lower, because there are agreements with other shareholders of these companies that give the Company the majority of the voting power.

Jointly controlled entities are defined by the Company as entities that are not subsidiaries but which, under a contractual arrangement, are jointly controlled by it and other unrelated shareholders.

Associates are companies over which the Company directly or indirectly exercises significant influence but which are not subsidiaries or jointly controlled entities. In most cases, significant influence exists when the Company holds 20% or more of the voting power of the investee. However, if less than 20% of the voting power is held, significant influence is deemed to exist when the Company expressly states that it exercises such significant influence and if any of the circumstances provided for in accounting legislation exists, such as (i) the voting rights corresponding to other shareholders are held; (ii) there is sufficient representation on the governing bodies; or (iii) there are agreements among entities.

Equity investments in Group companies, jointly controlled entities and associates are initially recognised at cost, which is equal to the fair value of the consideration given, plus any directly attributable transaction costs. The initial measurement also includes the amount of any pre-emption rights acquired.

These investments are subsequently measured at cost less any accumulated impairment losses.

At least at each reporting date, and whenever there are indications that the carrying amount might not be recoverable, the Company conducts the related impairment tests to quantify the possible write-down. The impairment loss is calculated as the difference between the carrying amount of the investment and its recoverable amount, which is the higher of fair value at that date less costs to sell and the present value of the future cash flows from the investment. Unless there is better evidence of the recoverable amount, it is based on the value of the equity of the investee, adjusted by the amount of the unrealised gains existing at the date of measurement.

Impairment losses recognised and reversed are charged and credited, respectively, to the income statement.

Where an impairment loss reverses, the carrying amount of the investment is increased, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised.

f) Financial instruments

The Company recognises a financial instrument in its balance sheet when it becomes a party to the contract or legal transaction giving rise to it.

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a. Financial assets

Financial assets

The Company accounts for its current and non-current financial assets as follows:

a) Loans and receivables

These are financial assets arising from the sale of goods or the rendering of services in the ordinary course of the Company'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.

The Company initially recognises financial assets included in this category at fair value, which is generally the price of the transaction. Transactions maturing within twelve months where there is no contractual interest rate, dividends receivable and capital calls on equity instruments expected to be received at short term are measured at face value, since the effect of not discounting the cash flows is not material.

These financial assets are subsequently measured at amortised cost, and the accrued interest is recognised in profit or loss using the effective interest method. At least once a year, and whenever there is objective evidence that a loan or account receivable has become impaired, the Company conducts an impairment test. Based on these tests, the Company recognises such impairment losses as might be required.

Impairment losses on these financial assets are measured as the difference between their carrying amount and the present value of the future cash flows that they are expected to generate, discounted at the effective interest rate.

Impairment losses recognised and reversed are charged and credited, respectively, to the income statement. Where an impairment loss reverses, the carrying amount of the receivable is increased, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised.

b) Held-for-trading financial assets

These relate to assets acquired with the intention of selling them in the near term and assets that form part of a portfolio for which there is evidence of a recent actual pattern of short-term profit-taking. This category also includes financial derivatives that are not financial guarantees and that have not been designated as hedging instruments.

These assets are measured at their fair value without deducting such costs to sell as might be incurred. Changes in fair value are recognised in profit or loss.

c) Available-for-sale financial assets

The Company includes in this category financial assets that are not held-for-trading financial assets, financial assets classified as at fair value through profit or loss, held-to-maturity investments, loans and receivables or investments in Group companies, jointly controlled entities and associates. At 31 December 2013, this category included mainly equity investments in listed companies.

Available-for-sale financial assets are initially recognised at the fair value of the consideration given, plus transaction costs.

22

Subsequently, available-for-sale financial assets are measured at fair value and the gains and losses arising from changes in fair value are recognised in equity until the asset is disposed of or it is determined that it has become (permanently) impaired, at which time the cumulative gains or losses previously recognised in equity are recognised in the net profit or loss for the year. In this regard, (permanent) impairment is presumed to exist if the market value of the asset has fallen by more than 40% or if there has been a prolonged fall in market value over a period of 18 months without the value having recovered.

At least at each reporting date the Company tests financial assets not measured at fair value through profit or loss for impairment. Objective evidence of impairment is considered to exist when the recoverable amount of the financial asset is lower than its carrying amount. When this occurs, the impairment loss is recognised in the income statement.

Cash and cash equivalents

The Company recognises under “Cash and Cash Equivalents” cash on hand and in bank accounts, short-term deposits and other highly liquid investments that will mature within three months from the date on which they were arranged.

Derecognition of financial assets

The Company derecognises a financial asset when the rights to the cash flows from the financial asset expire or have been transferred and substantially all the risks and rewards of ownership of the financial asset have also been transferred, such as in the case of firm asset sales, factoring of trade receivables in which the Company does not retain any credit or interest rate risk, sales of financial assets under an agreement to repurchase them at fair value and the securitisation of financial assets in which the transferor does not retain any subordinated debt, provide any kind of guarantee or assume any other kind of risk.

However, the Company would not derecognise financial assets, and would recognise a financial liability for an amount equal to the consideration received if transfers of financial assets were to arise in which substantially all the risks and rewards of ownership were retained, such as in the case of securities loans, note and bill discounting, with-recourse factoring, sales of financial assets subject to an agreement to buy them back at a fixed price or at the selling price plus a lender's return and the securitisation of financial assets in which the transferor retains a subordinated interest or any other kind of guarantee that absorbs substantially all the expected losses.

b. Financial liabilities

Financial liabilities include accounts payable by the Company that have arisen from the purchase of goods or services in the normal course of the Company's business and those which, not having commercial substance, cannot be classed as derivative financial instruments.

Accounts payable are initially recognised at the fair value of the consideration received, adjusted by the directly attributable transaction costs. These liabilities are subsequently measured at amortised cost.

The Company derecognises financial liabilities when the obligations giving rise to them cease to exist.

c. Equity instruments

An equity instrument is a contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

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Equity instruments issued by the Company are recognised in equity at the proceeds received, net of issue costs.

g) Inventories

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

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

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 Company recognises the appropriate write-downs of inventories if their net realisable value is lower than their carrying amount. For the purpose of determining the net realisable value, the Company's directors considered the fair value of the inventories obtained from appraisals performed by independent third-party valuers and the Company’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.

h) 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 Company 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 a disposal plan.

If the assets remain in the balance sheet longer than originally planned, their value is revised in order to recognise any impairment loss that the difficulty in finding buyers or reasonable offers may have brought to light.

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 “Impairment and Gains or Losses on Disposals of Non-Current Assets” in the income statement. If their value subsequently recovers, the increase may be recognised under the same heading in the 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 Company 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 Company considered the fair value obtained from appraisals performed by independent third-party valuers and the Company’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.

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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.

i) Current / Non-current classification

In the accompanying balance sheet, assets and liabilities maturing within no more than twelve months are classified as current items and those maturing within more than twelve months are classified as non-current items, except for “Inventories”, which are classified as current assets, since they are assets that will be realised in the Company's normal operating cycle. The normal operating cycle is the time between the acquisition of assets for inclusion in the various property developments and the realisation of the related goods in the form of cash or cash equivalents.

Also, bank borrowings are classified as non-current if the Company has the irrevocable right to meet the related payments within more than twelve months from the reporting date.

j) Foreign currency transactions

The Company's financial statements are presented in thousands of euros, since the euro is the Company's functional currency.

All foreign currency transactions are initially translated to euros by applying the exchange rates prevailing at the date of the transaction. Monetary items are translated at year-end at the exchange rates then prevailing. Both foreign exchange losses and exchange gains arising in this process and those arising when the related items are settled are recognised in income in the year in which they arise.

k) Provisions and contingencies

Provisions cover present obligations at the date of preparation of the financial statements arising from past events which could give rise to a loss for the Company that is considered likely to occur and which is certain as to its nature but uncertain as to its amount and/or timing.

Contingent liabilities are 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 Company's control.

The Company's financial statements include all the significant provisions with respect to which it is considered more likely than not that the obligation will have to be settled. Contingent liabilities are not recognised in the financial statements, but rather are disclosed, unless the possibility of an outflow in settlement is considered to be remote.

Provisions are measured at the present value of the best possible estimate of the amount required to settle or transfer the obligation, taking into account the information available on the event and its consequences. Where discounting is used, adjustments made to provisions are recognised as interest cost on an accrual basis.

The compensation to be received from a third party on settlement of the obligation is recognised as an asset, provided that there are no doubts that the reimbursement will take place, unless there is a legal relationship whereby a portion of the risk has been externalised as a result of which the Company is not liable; in this situation, the compensation will be taken into account for the purpose of estimating the amount of the related provision that should be recognised.

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l) Income tax

The current income tax expense or income is calculated by aggregating the current tax arising from the application of the tax rate to the taxable profit (tax loss) for the year, after deducting the tax relief and tax credits allowable for tax purposes, plus the change in deferred tax assets and liabilities recognised. In this regard, the current tax expense or income is the estimated amount payable or recoverable on the basis of the tax rates in force at the balance sheet date.

Deferred tax assets and liabilities are recognised for all temporary differences between the tax base of assets and liabilities and their carrying amounts. Therefore, the Company recognises a deferred tax liability for all taxable temporary differences that do not constitute the exceptions established in accounting legislation for being able not to recognise such a liability. Deferred tax assets are recognised for all deductible temporary differences, tax assets and tax credits and tax loss carryforwards, to the extent that it is probable that there will be a taxable profit against which the related tax asset can be utilised. The Company files consolidated tax returns (see Note 17) and, accordingly, the deferred tax assets and deferred tax liabilities arising from the eliminations of the results obtained from the transactions performed with other Group companies for the calculation of the consolidated tax base and which may be included in the future are recognised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.

The tax benefit relating to double taxation and reinvestment tax credits is deducted from the income tax expense for the year in which entitlement to the tax credit arises or is exercised (see Note 17). Compliance with the requirements set forth in current legislation is required in order to be able to use these tax credits.

The income tax expense is recognised in the income statement, unless the tax relates to items recognised directly in equity, in which case the income tax is also recognised in equity.

m) VAT

The Company is taxed under the deductible proportion VAT regime. Therefore, non-deductible input VAT forms part of the acquisition cost of current and non-current assets and of services the supply of which is subject to VAT. n) Revenue and expense recognition

General approach

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.

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 Company 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.

“Revenue” includes the dividends received from financial investments, which are recognised as revenue in the year in which the dividends are declared by the Board of Directors of the related investee.

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Recognition of sales of property developments and land

The Company recognises revenue from sales of property developments and land when the significant risks and rewards of ownership of the goods sold have been transferred to the buyer.

In all other cases, the cost incurred in the construction of the development is retained in “Inventories”, and the amount received on account of the total selling price is recognised under “Customer Advances” in the accompanying balance sheet.

o) Related party transactions

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

p) Costs charged to lessees

The direct costs of transactions relating to investment property that generated rental income in 2013 and 2012, recognised under “Profit (Loss) from Operations” in the accompanying income statement, amounted to EUR 1,789 thousand and EUR 1,991 thousand, respectively. The amount of these expenses associated with investment property that did not generate rental income is not material.

q) Statement of cash flows

The statement of cash flows was prepared using the indirect method and is made up of the following items:

- Cash flows: inflows and outflows of cash and equivalent financial assets, which are short-term, highly liquid investments that are subject to an insignificant risk of changes in value. They also include the Company’s payments and collections, including interest payments, dividends received and taxes, together with other activities that are not investing or financing activities.

- Operating activities: the principal revenue-producing activities and other activities that are not investing or financing activities.

- Investing activities: the acquisition and disposal of non-current assets and other investments not included in cash and cash equivalents.

- Financing activities: activities that result in changes in the size and composition of the equity and borrowings of the Group companies that are not operating activities. They include the proceeds received as a result of the acquisition by third parties of securities issued by the Company or from loans and other financing instruments granted by banks or third parties, together with the payments made to repay such loans and financing instruments. They also include the dividends paid to shareholders.

r) Termination benefits

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

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5. Intangible assets

The changes in "Intangible Assets” in the balance sheet in 2013 and 2012 were as follows:

2013

Thousands of euros

31/12/12

Additions due to merger (Note 2)

Disposals due to

spin-off (Note 2)

Additions 31/12/13

Cost: 11,216 769 (11,216) 212 981

Computer software 11,216 769 (11,216) 212 981

Accumulated amortisation: (6,653) (536) 6,653 (144) (680)

Computer software (6,653) (536) 6,653 (144) (680)

Total 4,563 233 (4,563) 68 301

2012

Thousands of euros

31/12/11


Additions Disposals 31/12/12

Cost 7,251 18 3,981 (34) 11,216

Computer software 7,251 18 3,981 (34) 11,216

Accumulated amortisation: (4,026) - (2,646) 19 (6,653)

Computer software (4,026) - (2,646) 19 (6,653)

Total 3,225 18 1,335 (15) 4,563

The additions in 2012 relate to improvements to the computer systems that manage the volume of business relating to the property owned by the Company prior to the spin-off of the real estate business in 2013.

The cost of the fully amortised assets still in use at 31 December 2013 amounted to EUR 372 thousand (31 December 2012: EUR 2,263 thousand).

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6. Property, plant and equipment

The changes in 2013 and 2012 in “Property, Plant and Equipment” in the balance sheet and the most significant information affecting this heading were as follows:

2013

Thousands of euros

31/12/12


Reductions due to

spin-off (Note 2) Additions Disposals

Transfers (Note 7) 31/12/13

Cost: 57,590 2,140 (1,361) 916 (246) (56,020) 3,019

Land 18,597 - - - - (18,597) -

Buildings 35,574 - - - (44) (35,530) -

Plant 2,099 999 - 797 (196) (1,893) 1,806

Other 1,320 1,141 (1,361) 119 (6) - 1,213

Accumulated depreciation: (3,198) (960) 837 (543) 71 2,524 (1,269)

Buildings (2,244) - - (180) - 2,424 -

Plant (157) (154) - (237) 66 100 (382)

Other (797) (806) 837 (126) 5 - (887)

Net: 54,392 1,180 (524) 373 (175) (53,496) 1,750

Land 18,597 - - - - (18,597) -

Buildings 33,330 - - (180) (44) (33,106) -

Plant 1,942 845 - 560 (130) (1,793) 1,424

Other 523 335 (524) (7) (1) - 326

Impairment (6,766) - - - - 6,766 -

Total 47,626 1,180 (524) 373 (175) (46,730) 1,750

"Property, Plant and Equipment" included basically an office building located at calle Provençals 39 in Barcelona, in which the Company, 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 at Gabriel Alomar Villalonga 3. As a result of the transaction to spin off the property management business to Servihabitat Gestión Inmobiliaria, S.L.U. described in Note 2, the Company transferred all of the assets previously intended for own use, to "Investment Property" (see Note 7).

29

2012

Thousands of euros

31/12/11 Additions Disposals


Cost: 57,173 433 (16) - 57,590

Land 18,558 39 - - 18,597

Buildings 35,409 165 - - 35,574

Plant 2,097 2 - - 2,099

Other 1,109 227 (16) - 1,320

Accumulated depreciation: (2,142) (1,062) 6 - (3,198)

Buildings (1,404) (840) - - (2,244)

Plant (102) (55) - - (157)

Other (636) (167) 6 - (797)

Net: 55,031 (629) (10) - 54,392

Land 18,558 39 - - 18,597

Buildings 34,005 (675) - - 33,330

Plant 1,995 (53) - - 1,942

Other 473 60 (10) - 523

Impairment (1,186) (2,928) - (2,652) (6,766)

Total 53,845 (3,557) (10) (2,652) 47,626

The cost of the fully depreciated assets still in use at 31 December 2013 amounted to EUR 681 thousand (31 December 2012: EUR 442 thousand).

The Company takes out insurance policies to cover the possible risks to which its property, plant and equipment are subject. At the end of 2013 and 2012 the property, plant and equipment were fully insured against these risks.

7. Investment property

The changes in 2013 and 2012 in “Investment Property” in the balance sheet and the most significant information affecting this heading were as follows:

30

2013

Thousands of euros

31/12/12 Additions Disposals Transfers

(Notes 6 and 12) 31/12/13

Cost: 613,549 9,256 (10,536) 183,543 795,811

Land and buildings 612,695 2,726 (10,536) 181,649 786,534

Plant 854 6,530 - 1,893 9,277

Accumulated depreciation: (13,354) (9,961) 294 (2,525) (25,546)

Land and buildings (12,811) (9,459) 294 (2,425) (24,401)

Plant (543) (502) - (100) (1,145)

Net: 600,195 (706) (10,242) 181,018 770,265

Land and buildings 599,884 (6,733) (10,242) 179,224 762,133

Plant 311 6,028 - 1,793 8,132

Impairment (74,124) (69,154) 2,263 (32,741) (173,756)

Total 526,071 (69,860) (7,979) 148,277 596,509

2012

Thousands of euros

31/12/11

Additions due to merger (Note 1) Additions Disposals

Transfers (Notes 6 and 12) 31/12/12

Cost: 331,186 35,069 22,396 (19,717) 244,615 613,549

Land and buildings 330,395 35,069 22,285 (19,669) 244,615 612,695

Plant 791 - 111 (48) - 854

Accumulated depreciation: (8,014) - (5,699) 359 - (13,354)

Land and buildings (7,531) - (5,598) 318 - (12,811)

Plant (483) - (101) 41 - (543)

Net: 323,172 35,069 16,697 (19,358) 244,615 600,195

Land and buildings 322,864 35,069 16,687 (19,351) 244,615 599,884

Plant 308 - 10 (7) - 311

Impairment (26,488) - (980) 2,021 (48,677) (74,124)

Total 296,684 35,069 15,775 (17,337) 195,938 526,071

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As described in Notes 2 and 6, the Company 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 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 the Company's own operations- are considered to be investment property since these assets are being rented with the corresponding rental agreement formally executed 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 renting certain property assets that had been classified under "Inventories", the corresponding reclassification to "Investment Property" was made for a net amount of EUR 101,548 thousand (cost of EUR 127,523 thousand and EUR 25,975 thousand of associated impairment) (2012: cost of EUR 244,615 thousand and 51,329 thousand of associated impairment).

The Company recognised impairment amounting to EUR 69,154 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 980 thousand were recognised.

In 2013 the Company disposed of items of investment property, obtaining pre-tax losses of EUR 1,784 thousand on these sales. In 2012 investment property disposals gave rise to pre-tax losses amounting to EUR 4,425 thousand.

Types of investment property and use

At 31 December 2013, the most significant investments recognised under “Investment Property” relate to the former head office of “la Caixa” located at Laietana Street 56 (Barcelona), an office building located at Provençals Street 39 (Barcelona), a building located at Ribera 16 (Valencia), a building located at República Argentina Street 256 (Barcelona) and a building located at Gran Via de les Corts Catalanes 655 (Barcelona).

The Company had investment property earmarked for sale and lease at the end of 2013 and 2012. The distribution of the use and geographical location of this investment property at the end of 2013 and 2012 is as follows:

2013

Square metres Square metres

leased

Housing units 389,758 318,472

Offices and commercial premises 64,880 35,551

Industrial buildings 14,138 13,337

Total 468,776 367,360


leased

Madrid 44,675 27,753

Barcelona 86,479 59,293

Other 337,622 280,314

Total 468,776 367,260

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2012


leased

Housing units 304,357 261,179

Offices and commercial premises 56,977 36,840

Industrial buildings 11,396 11,396

Total 372,730 309,415


leased

Madrid 40,536 26,779

Barcelona 72,654 53,236

Other 259,540 229,400

Total 372,730 309,415

There was no fully depreciated investment property at 31 December 2013. At 31 December 2012, the cost of the fully depreciated assets amounted to EUR 64 thousand.

The Company takes out insurance policies to cover the possible risks to which its investment property is subject. The Company's directors review annually, or whenever circumstances dictate, its coverage and the risks against which it is insured, and amounts required to reasonably cover these risks for the coming year are agreed upon.

8. Leases

At the end of 2013 and 2012 all the Company'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 Company 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 2013 2012

Within one year 4,699 5,339 Between one and five years 14,075 17,650 After five years 14,816 13,560

Total 33,590 36,549

As lessor the Company has a large number of leases with a high level of geographical dispersion, and there is no one lease, considered individually, that can be considered significant.

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9. Non-current investments in Group companies, jointly controlled entities and associates

The most significant information relating to the securities included under “Investments in Group Companies” and “Investments in Associates and Jointly Controlled Entities” is attached in Appendixes I and II, respectively.

The changes in 2013 in "Non-Current Investments in Group Companies, Jointly Controlled Entities and Associates" were as follows:

9.1. Investments in Group companies

The changes in the investments in Group companies, jointly controlled entities and associates in 2013 and 2012 were as follows:

2013

Thousands of euros

Additions Dividends

due to with a

merger Spin-off credit

(Note 2) (Note 2) Sales Additions to cost Total

Balance at 31/12/12 242

Servihabitat Gestión Inmobiliaria, S.L.U. - 15,514 (15,514) - - -

Saba Infraestructuras, S.A. 204,123 - - - (4,998) 199,125

Mediterránea Beach & Golf Com., S.A.U. 109,230 - - - - 109,230

Inversiones Autopistas, S.L. 141,141 - - - - 141,141

Caixa Capital Risc, S.G.E.C.R., S.A. - - - 4,200 - 4,200

Caixa Assistance, S.A.U. 12 - - - - 12

Caixa Títol, S.A.U. 15 - - - - 15

Club Caixa I, S.A.U. 12 - - - - 12

Changes in 2013 454,533 15,514 (15,514) 4,200 (4,998) 453,735

Balance at 31/12/13 453,977

Servihabitat Gestión Inmobiliaria, S.L.U.: on 23 March 2013, the Company subscribed and paid through a non-monetary contribution of the assets and liabilities assigned to the real estate management business (see Note 2), all the 12,928,587 shares of EUR 1 par value each, together with a share premium of EUR 0.2 per share, issued for the incorporation of Servihabitat Gestión Inmobiliaria, S.L.U.

On 31 October 2013, the Company sold all the shares to CaixaBank, S.A. (see Note 1) for EUR 98 million, giving rise to a pre-tax gain of EUR 81 million (see Note 18).

Saba Infraestructuras, S.A.: in June 2013 Saba Infraestructuras, S.A. approved the payment of dividends of EUR 4,998 thousand with a charge to the share premium, which was accounted for as a reduction of the cost of the related investment.

At 31 December 2013, the Company's ownership interest in Saba Infraestructuras, S.A. was 50.10%.

Caixa Capital Risc, S.G.E.C.R., S.A.: on 21 November 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. Caixa Assistance, S.A.U., a wholly-owned investee of Criteria, acquired the remaining 0.01% of the shares 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.

34

2012

Thousands of euros

Reductions

due to

merger Additions Total

(Note 1)

Balance at 31/12/11 141

Estullogimmo, S.L.U. (943) 943 -

Estuimmo, S.A.U. (6,755) 6,755 -

Servihabitat Alquiler III, S.L. - -

Estuvendimmo, S.L.U. - -

Estuinvest, S.L.U. - -

Other 101 101

Changes in 2012 (7,698) 7,799

Balance at 31/12/12 242

On 31 May 2012, the Company acquired all the shares of Estuimmo, S.A.U. and Estullogimmo, S.L.U. from Criteria CaixaHolding, S.A.U. (the absorbed company) for EUR 7,698 thousand, a value similar to the carrying amount of the related investments recognised at the vendor.

On 13 July 2012, the merger of Estuimmo, S.A.U., Estuillogimmo, S.L.U., Estuinvest, S.L.U., Estuvendimmo, S.L.U., Norton Center, S.L.U. and Servihabitat Alquiler III, S.A.U. (the absorbed companies belonging to the same group as the Company) (see Note 1) into Servihabitat XXI, S.A.U. (the absorbing company) was registered at the Barcelona Mercantile Registry. This led to the derecognition of the financial assets that the Company had recognised under “Non-Current Investments in Group Companies and Associates - Equity Instruments” for a cost of EUR 46,379 thousand and impairment losses of EUR 38,681 thousand, as well as the derecognition of the provisions for contingencies and charges recognised under “Long-Term Provisions – Other Provisions” amounting to EUR 47,601 thousand at 31 December 2011.

Impairment losses on investments in Group companies

The Company, particularly in view of the current domestic and international economic situation, carried out an analysis of the possible impairment of all its investments in order to recognise, where appropriate, the corresponding valuation adjustment.

The Company assessed the recoverable amounts of all its investments in Group companies using generally accepted valuation techniques, which are based mainly on an estimate of its share of the cash flows expected to be generated by the investees, arising as a result of both their ordinary activities or their disposal or derecognition.

Specifically, for the real estate investees, the recoverable amount was determined on the basis of the underlying carrying amount plus the unrealised gains on these investments, net of the related tax effect, basically attributable to property assets, the fair value of which was determined on the basis of appraisals and valuations conducted at the end of the period by independent valuers

The analysis performed disclosed the need to recognise, in 2013, an additional impairment loss on the investments in Servihabitat Alquiler and Servihabitat Alquiler II totalling EUR 82,885 thousand (2012: EUR 27,092 thousand). These impairment losses were recognised under “Impairment and Other Losses on Financial Instruments” in the accompanying income statement.

35

The amount by which the impairment exceeded the cost of the investments in Group companies was recognised under “Long-Term Provisions” in the accompanying balance sheet, EUR 150,179 thousand at 31 December 2013 (31 December 2012: EUR 67,294 thousand), and this amount covers basically the participating loans granted by the Company to those companies (see Note 9.3).

9.2. Investments in associates and jointly controlled entities

At 31 December 2013, the fair value of the investments in associates and jointly controlled entities amounted to EUR 9,314,348 thousand (31 December 2012: EUR 1,856 thousand). In determining the fair value, the Company considered the market value at 31 December 2013 for the listed companies and the recoverable amounts calculated by the Company using generally accepted valuation techniques for the unlisted companies.

The changes in 2013 and 2012 in “Investments in Associates and Jointly Controlled Entities” in the accompanying balance sheets were as follows:

2013 Thousands of euros

Additions

due to

merger

(Note 2) Sales Total

Balance at 31/12/12 1,856

Gas Natural, S.D.G., S.A. 5,059,077 (62,944) 4,996,133

Abertis Infraestructuras, S.A. 1,281,318 (228,822) 1,052,496

Hisusa (Holding de Infraestructuras y Servicios Urbanos, S.A.) 625,540 - 625,540

Vithas Sanidad, S.L. 50,913 - 50,913

Changes in 2013 7,016,848 (291,766) 6,725,082

Balance at 31/12/13 6,726,938


Additions

due to

merger

(Note 1) Sales Total

Balance at 31/12/11 -

Palau Migdia, S.A. 1,856 - 1,856

Changes in 2012 1,856 - 1,856

Balance at 31/12/12 1,856

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

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

These sales gave rise to gross gains of EUR 150,297 thousand, which are recognised under "Net Gains on Disposals of Financial Instruments" in the accompanying income statement.

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

36

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 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 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 - Deposits Received as Security” in the 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, S.D.G., S.A.: in the first quarter of 2013 the Company sold 3,352,139 shares representing 0.335% of the share capital of Gas Natural, S.D.G., S.A. for EUR 51,478 thousand, giving rise to a pre-tax gain of EUR 2,997 thousand.

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 Disposals of Financial Instruments” for a gross amount of EUR 3,543 thousand, while the result generated by the financial derivative was recognised under “Changes in Fair Value of Financial Instruments” in the accompanying income statement.

At 31 December 2013, the Company had an ownership interest of 34.52% in Gas Natural, S.D.G., S.A.

Palau Migdia, S.A.: as a result of the merger in 2012 of Servihabitat XXI, S.A.U. (now Criteria) and Estuimmo, S.A.U., Estuillogimmo, S.L.U., Estuinvest, S.L.U., Estuvendimmo, S.L.U., Norton Center, S.L.U. and Servihabitat Alquiler III, S.A.U., the Company acquired an ownership interest of 50% in Palau Migdia, S.A.

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Impairment losses on investments in associates and jointly controlled entities

In line with Group policy, impairment tests were performed on these holdings to determine their fair value. The methodology applied was basically the sum-of-the-parts 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 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 provided by The Economist Intelligence Unit

• The projection periods were adapted, where applicable, to the characteristics of each company (for example the term of 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. concession terms, significant investment plans, location of investments in emerging economies, etc. In parallel, other more specific factors in relation to the Company'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 in application of conservative criteria and a policy of maximum prudence, it was concluded that there was no need to recognise any impairment losses in relation to the value of the holdings. It is the policy of Company management to review the valuation of these investments on an ongoing basis.

9.3 Other financial assets

The changes in "Other Financial Assets" in the accompanying balance sheet were as follows:


31/12/12 Additions Reductions 31/12/13

Loans granted 584,820 289,414 (82,779) 791,455

Interest on loans 35,351 53,688 - 89,039

Total 620,171 343,102 (82,779) 880,494

38


31/12/11 Additions 31/12/12

Loans granted 578,934 5,886 584,820

Interest on loans 31,969 3,382 35,351

Total 610,903 9,268 620,171

The loans granted to the various Group companies recognised under “Other Financial Assets” at 31 December 2013 and 2012 mature as follows:


2015 2016 2017 2018 2019 Total

Servihabitat Alquiler, S.L. - - 206,000 134,000 7,000 347,000

Servihabitat Alquiler II, S.L.U. - - 124,278 7,000 - 131,278

Mediterránea Beach & Golf Community 197,221 - - - - 197,221

Other tax receivables - 115,956 - - - 115,956

Total 197,221 115,956 330,278 141,000 7,000 791,455


2015 2016 2017 2018 2019 Total

Servihabitat Alquiler, S.L. - - 206,000 134,000 7,000 347,000

Servihabitat Alquiler II, S.L.U. - - 124,278 7,000 - 131,278

Other - 106,542 - - - 106,542

Total - 106,542 330,278 141,000 7,000 584,820

The loans granted by the Company to Servihabitat Alquiler, S.L. and Servihabitat Alquiler II, S.L.U. are participating loans to finance the acquisition of the properties owned by the subsidiaries. These loans to Group companies earn interest at market rates repayable together with the related loan principal.

On 13 December 2013, Criteria granted Mediterránea Beach & Golf Community a loan of EUR 280 million maturing on 30 June 2015 the interest on which is payable every six months. The interest rate is six-month Euribor plus 2.40%. On 20 December 2013, Mediterránea Beach & Golf Community repaid EUR 83 million early. At 31 December 2013, the interest of EUR 315 thousand earned in this connection was recognised under “Current Investments in Group Companies and Associates” in the accompanying balance sheet.

“Other” relates to two loans granted to a third party at which the Company is represented in its managing bodies. One of the loans amounted to EUR 55,956 thousand at 31 December 2013 and is secured by a second mortgage taken out with Criteria on the land owned by the subsidiary. The first mortgage was taken out with CaixaBank, S.A. to secure loans granted by it.

“Other Financial Assets” also includes at 31 December 2013 EUR 89,039 thousand relating to accrued interest receivable on the participating loans granted by the Company to its subsidiaries (31 December 2012: EUR 35,351 thousand).

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10. Non-current financial assets

The changes in “Non-Current Financial Assets” in 2013 and 2012 were as follows:



Additions Disposals Impairment

losses Changes

in fair value

Total

Balance at 31/12/12 4,744

Available-for-sale financial assets:

Vehículo de Tenencia y Gestión 9, S.L. - - - (1,701) - (1,701)

Aliancia Zero, S.A. - - - (1,710) - (1,710)

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

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

Soc. Prom. Bilbao Gas Hub, S.A. 376 - - - - 376

Loans, derivatives and other - 632 - - - 632

Changes in 2013 29,482 632 (1,834) (4,287) (12,707) 11,286

Balance at 31/12/13 16,030

Metrovacesa, S.A.: on 29 January 2013, the shareholders at the Extraordinary Annual General Meeting of Metrovacesa, S.A. approved the delisting from the Spanish stock market of all the shares representing the company's share capital 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. The Company, which had a 0.36% ownership interest in Metrovacesa, S.A., accepted the bid, which was settled on 17 May 2013 for a total of EUR 8,042 thousand, giving rise to a pre-tax gain of EUR 6,208 thousand.

Inmobiliaria Colonial, S.A.: after 2013 year-end, the Company sold its ownership interest in Inmobiliaria Colonial (see Note “Events after the Reporting Period”).

"Loans, Derivatives and Other" includes the amount of the security deposits made in leases in which the Company is the lessee.



Additions Disposals Impairment

losses Total

Balance at 31/12/11 1,949

Available-for-sale financial assets:

Vehículo de Tenencia y Gestión 9, S.L. 5,185 - - (3,484) 1,701

Aliancia Zero, S.A. 4,606 - - (2,896) 1,710

Tecnoparc Sant Cugat, S.L. (947) - (947)

Loans, Derivatives and Other - 331 - - 331

Changes in 2012 9,791 331 (947) (6,380) 2,795

Balance at 31/12/12 4,744

As a result of the merger in 2012 described in Note 1, the Company has an ownership interests of 19.9% in Vehículos de Tenencia y Gestión 9, S.L. and 5.26% in Aliancia Zero, S.L. amounting to EUR 1,701 thousand and

40

EUR 1,710 thousand, respectively. On 6 July 2012, Criteria CaixaHolding, S.A.U. transferred to the Company an additional ownership interest of 4.24% in the share capital of Aliancia Zero, S.L.

On 16 May 2012, Tecnoparc Sant Cugat, S.L. was dissolved and liquidated. At 31 December 2011, the Company held an ownership interest of 15% in this company with a carrying amount of EUR 947 thousand. As a result of the liquidation, the Company received EUR 1,020 thousand.

The most significant information relating to the securities included under “Available-for-Sale Financial Assets - Equity Instruments” is disclosed in Appendix IV.

The Company recognises non-current financial assets at their fair value, accounting for any differences, net of the related tax effect, between the fair value and the acquisition cost under "Valuation Adjustments - Available-for-Sale Financial Assets" under equity in the accompanying balance sheet. The tax effect is recognised under "Non-Current Liabilities - Deferred Tax Liabilities" or "Non-Current Assets - Deferred Tax Assets" in the balance sheet.

Impairment of available-for-sale financial assets - Equity instruments

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.

The Company carried out an analysis of the possible impairment of all its equity instruments classified as available-for-sale financial assets in order to recognise, where appropriate, the corresponding valuation adjustment. For these purposes, impairment is considered to exist if there has been a prolonged fall in market value over a period of more than 18 months or if the market value of the asset has fallen by more than 40%.

In 2013 the Company recognised an impairment loss of EUR 876 thousand on its holding in Inmobiliaria Colonial arising from the fall in its market price. In addition, impairment losses of EUR 1,701 thousand and EUR 1,710 thousand were recognised on its holdings in Vehículo de Tenencia y Gestión 9, S.L. and Aliancia Zero, S.A., respectively.

11. Non-current assets classified as held for sale

"Non-Current Assets Classified as Held for Sale" in the balance sheet includes property assets which were not intended for own use or classified as investment property and for which, in any case, there is a plan to dispose of the assets.

The changes in “Non-Current Assets Classified as Held for Sale” in 2013 were as follows:

Thousands of euros

31/12/12

Transfers (Note 12) Additions Disposals 31/12/13

Building lots and developments in progress - 1,492,896 33,893 (14,900) 1,511,889

Completed developments - 1,186,038 - (153,676) 1,032,362

Advances - 26,738 - - 26,738

Impairment losses - (890,184) (482,960) 44,967 (1,328,177)

Total - 1,815,488 (449,067) (123,609) 1,242,812

The transfers in 2013 relate to the property assets which, as a result of the merger of Criteria (the absorbed company) into Servihabitat XXI (the absorbing company) performed in the year and of the fact that the post-merger company is a holding company, taking into account the close links that might exist between the

41

business activities carried on by a financial institution and the company object of the holding company, were reclassified from "Inventories" to "Non-Current Assets Classified as Held for Sale", as explained in Note 2-a.

The disposals in the year relate to the residential properties sold in 2013, giving rise to losses of EUR 29 million (see Note 18-f).

"Advances" includes the following:

- The amounts deposited at courts in order to be able to participate in auctions of properties amounting to EUR 4,127 thousand at 31 December 2013. These amounts are recoverable at short term. "Advances" also includes the cash advances paid to third parties for various steps required in relation the Company'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 Company from its sole shareholder in the short term.

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

The Company recognised EUR 482,960 thousand in 2013 in relation to impairment of non-current assets classified as held for sale whose net realisable value was lower than their carrying amount in accordance with the method described in Note 4-h.

The detail, by geographical area, of "Non-Current Assets Classified as Held for Sale" at 2013 year-end is as follows:

Thousands of euros

Gross carrying

amount

2013

Catalonia 547,583

Madrid 415,515

Andalusia 341,388

Castilla-La Mancha 296,123

Basque Country 259,216

Valencia 186,668

Asturias 92,457

Castilla y León 74,624

Canary Islands 68,300

Aragón 62,128

Murcia 51,663

La Rioja 37,888

Galicia 36,093

Balearic Islands 34,731

Navarre 15,710

Cantabria 14,587

Extremadura 9,353

Melilla 224

Total 2,544,251

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12. Inventories

The changes in “Inventories” in 2013 and 2012 were as follows:

2013

Thousands of euros

31/12/12

Reductions due to spin-off

(Note 2) Disposals Transfers

(Notes 7 and 11) 31/12/13

Building lots 2,303,941 - (10,485) (1,466,633) 826,823

Completed developments 1,297,057 - - (1,293,784) 3,273

Advances 111,872 (1,350) - (72,777) 37,745

Impairment losses (1,601,157) - 4,595 916,159 (680,403)

Total 2,111,713 (1,350) (5,890) (1,917,035) 187,438

2012

Thousands of euros

31/12/11

Additions due to merger Additions Disposals


Building lots 2,316,620 129,153 - (59,710) (82,122) 2,303,941

Completed developments 1,752,435 57,681 71,648 (499,273) (85,434) 1,297,057

Advances 188,525 406 - - (77,059) 111,872

Impairment losses (875,750) - (852,754) 76,018 51,329 (1,601,157)

Total 3,381,830 187,240 (781,106) (482,965) (193,286) 2,111,713

"Inventories" includes mainly land and buildings 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.

In 2013, the Company transferred various properties for a total cost of EUR 127,523 thousand and related impairment of EUR 25,975 thousand (2012: cost of EUR 244,615 thousand and impairment of EUR 51,329 thousand) to “Investment Property" in the accompanying balance sheet as they were earmarked for lease (see Note 7).

The period disposals relate to the cost of land and residential properties sold in 2013, which gave rise to gains of EUR 2 million (2012: EUR 110 million).

The Company recognised EUR 852,754 thousand in 2012 in relation to write downs of inventories whose net realisable value was lower than their carrying amount in accordance with the method described in Note 4-g

"Advances" also includes assets for which the Company has signed 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, the assets exchanged totalled EUR 37,745 thousand (31 December 2012: EUR 75,208 thousand).

In 2013 the Company received completed properties in accordance with the swap deeds, mainly in relation to the building lots located in Valdebebas (Madrid) and Azkoitia (Guipúzcoa), totalling EUR 47,868 thousand, which were transferred to "Completed Developments".

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Also, in 2013 the Company signed two new swap agreements consisting of the assignment of the properties located in Vitoria (Álava) and Fuenlabrada (Madrid). As a result, the Company reclassified EUR 10,406 thousand to "Advances to Suppliers".

The detail of inventories, by geographical area and operating cycle length, at year-end is provided in the following tables:

Thousands of euros

Gross carrying amount

2013 2012

Catalonia 204,646 865,055

Andalusia 141,750 508,005

Valencia 137,688 336,626

Madrid 123,445 572,566

Aragón 54,853 117,318

Castilla-La Mancha 42,144 352,373

Basque Country 38,939 298,245

Balearic Islands 34,603 75,764

Cantabria 11,033 26,739

Extremadura 10,575 20,313

Canary Islands 9,351 89,582

Murcia 6,809 66,640

Galicia 6,021 41,984

Castilla y León 5,810 81,071

Melilla 1,438 2,045

La Rioja 991 39,077

Asturias 0 89,732

Navarre 0 17,863

Total 830,096 3,600,998

13. Current financial assets - Dividends receivable

The detail of the accrued dividends receivable at 31 December 2013 and 2012 is as follows:

Thousands of euros

31/12/12 Additions due to merger (Note 2)

Collections Accrued (Note 18-a)

31/12/13

Dividends receivable - 136,773 (433,418) 432,407 135,762 Total - 136,773 (433,418) 432,407 135,762

The "Additions Due to Merger" related to the dividend receivable from Gas Natural, S.D.G., S.A. which was settled on 8 January 2013.

Also, the dividend receivable from Gas Natural, S.D.G., S.A. at 31 December 2013 from Gas Natural, S.D.G., S.A. was paid on 8 January 2014.

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14. Cash and cash equivalents

The balances of "Cash and Cash Equivalents" in the accompanying balance sheets at 31 December 2013 and 2012 relate mainly to cash on hand and in a demand deposit at CaixaBank.

The interest rate on the demand deposit is the average three-month Euribor plus 20 basis points.

The interest earned in 2013 on the cash deposited in the demand deposit amounted to EUR 1,228 thousand (2012: EUR 24 thousand) and was recognised under "Finance Income" in the accompanying income statements (see Note 18).

15. Equity

a) Share capital

At 31 December 2012, the share capital of the Company (the absorbing company) was represented by 34,538,000 fully subscribed and paid registered shares of EUR 100 par value each, its sole shareholder at that date being Criteria CaixaHolding, S.A.U., whose sole shareholder was ”la Caixa”.

On 8 April 2013, the sole shareholder of the Company resolved to reduce capital by EUR 2,072,280 thousand by reducing the par value of all the shares from EUR 100 par value each to EUR 40 par value each in order to restore the equity position, having first offset prior years' losses with a charge to the share premium and unrestricted reserves.

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.

As a result of the merger by absorption in 2013 (see Notes 1 and 2) of Servihabitat XXI and Criteria CaixaHolding, ”la Caixa” became the Company's sole shareholder.

b) Share premium

The balance of "Share Premium" arose as a result of the capital increases carried out in 2007 and 2008.

At 8 April 2013, prior years' losses were offset with a charge to the share premium within the framework of the capital reduction to restore the Company's equity position described above.

c) Legal reserve

Under the Spanish Limited Liability Companies Law, the Company must transfer 10% of net profit for each year 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 the end of 2013 the balance of this reserve had not reached the legally required minimum.

45

d) Merger reserve

As a result of the merger performed in 2012 (described in Note 1) between Servihabitat XXI, S.A.U. (now Criteria) and Estuimmo, S.A.U., Estuillogimmo, S.L.U., Estuinvest, S.L.U., Estuvendimmo, S.L.U., Norton Center, S.L.U. and Servihabitat Alquiler III, S.A.U., a negative merger reserve of EUR 5,673 thousand arose, which was offset with a charge to the share premium within the framework of the capital reduction described above.

Also, as a result of the merger between Servihabitat XXI, S.A.U. (now Criteria) and Criteria CaixaHolding, S.A.U. (the absorbed company) in 2013, a positive merger reserve of EUR 7,727,452 thousand arose.

On 11 April 2013, the Board of Directors of the "la Caixa", the sole shareholder of Criteria CaixaHolding, S.A.U. (the absorbed company), 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 one-off payment. As a result of the subsequent merger between Servihabitat XXI, S.A.U. (now Criteria) and Criteria CaixaHolding, S.A.U. (the absorbed company) and since the merger was effective for accounting purposes from 1 January 2013, the distribution was accounted for with a charge to merger reserve.

e) Dividends approved during the year

The Board of Directors of Criteria CaixaHolding (the absorbed company), at its meeting held on 13 June 2013, approved the distribution of an interim dividend of EUR 81,000 thousand out of the profit for 2013, which was paid to ”la Caixa” on 17 June 2013.

f) Valuation adjustments

"Equity - Valuation Adjustments" in the balance sheets includes basically the amount of the differences, net of the related tax effect, between the fair value and the acquisition cost of the assets classified as available for sale (see Note 10). These differences are transferred to profit or loss when the assets are sold or become impaired.

The changes in the valuation adjustments in 2013 were as follows:

g) Agreements with the sole shareholder

At 31 December 2013, the Company had entered into the following agreements with the sole shareholder:

- On 20 November 2013 and 13 December 2013, ”la Caixa” granted two loans to the Company, of EUR 270 million and EUR 280 million, respectively (see terms and conditions in Note 16).

- On 24 December 2013, ”la Caixa” granted a credit facility to Criteria with a limit of EUR 650 million, against which EUR 400 million had been drawn down at 31 December 2013 (see Note 16).

At 31 December 2012, the Company did not have any agreements with the sole shareholder.

Thousands of euros

Additions – gains Amounts

Additions due Reductions Deferred transferred to

Balance at to merger (losses) tax profit or loss Balance at

31/12/12 (Note 2) (before taxes) liabilities net of tax 31/12/13

Available-for-sale assets - 11,311 (6,499) 1,950 (4,346) 2,416

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16. Financial liabilities (current and non-current)

The detail of “Non-Current Payables” and "Current Payables" at the end of 2013 and 2012 is as follows:

Thousands of euros

Current Non-current

31/12/13 31/12/12 31/12/13 31/12/12

CaixaBank loan - 650,000 - - CaixaBank credit facility - 395,236 - - CaixaBank non-convertible debentures - 1,350,000 1,350,000 - ”la Caixa” loans - - 550,000 - ”la Caixa” credit facility - - 400,000 - Accrued interest payable 33,882 40,871 - - Other financial liabilities - - 2,611 2,250

Total 33,882 2,436,107 2,302,611 2,250

“Other Financial Liabilities” relates to long-term security deposits collected from the lessees of properties.

The Company's debt is not quoted on any market and was arranged on an arm's length basis. Accordingly, it is considered that its fair value does not differ significantly from its nominal value.

The detail, showing the maturity, limit and amount drawn down, of the bank borrowings from Group companies and payables to Group companies is as follows:

2013

Thousands of euros

Maturity Interest rate Limit Amount

drawn down

Accrued interest payable

”la Caixa” loan 30/06/16 6-month Euribor + 2.4% 270,000 270,000 537

”la Caixa” loan 30/06/15 6-month Euribor + 2.4% 280,000 280,000 -

”la Caixa” credit facility 31/12/17 6-month Euribor + 2.4% 650,000 400,000 -

CaixaBank credit facility 03/01/18 6-month Euribor + 2.4% 750,000 - -

CaixaBank non-convertible debentures 01/01/20 6-month Euribor + 2.9% 1,350,000 1,350,000 33,345

Total 2,300,000 33,882

On 20 November 2013, ”la Caixa” granted a loan of EUR 270 million to the Company which was used to cover the amount drawn down against the credit facility with CaixaBank. In turn, the limit of the aforementioned credit facility was increased to EUR 750 million.

On 29 November 2013, the terms and conditions were amended of the non-convertible debentures issued by the Company in 2012 which were fully subscribed and paid by CaixaBank. Specifically, the interest rate was changed from a fixed rate of 4.94% to a floating rate of six-month Euribor plus a spread of 2.9%. Also, the maturity date of the debentures was extended to 1 January 2020.

On 13 December 2013, ”la Caixa” granted a loan of EUR 280 million to Criteria maturing on 30 June 2015 which Criteria, in turn, granted to Mediterránea Beach & Golf Community, S.A. (see Note 9.3) under the same terms and conditions.

47

On 24 December 2013, “la Caixa” granted a loan with a limit of EUR 650 million to Criteria CaixaHolding. At 31 December 2013, the EUR 400 million drawn down had been used by the Company to repay the EUR 650 million loan it had received from CaixaBank.

2012

Thousands of euros

Maturity Interest

rate Limit Amount

drawn down

Accrued interest payable

CaixaBank loan (1) 01/11/13 4.52% 650,000 650,000 1,616

CaixaBank credit facility (2) 30/06/13 1-month Euribor + 2.5% 600,000 395,236 5,910

CaixaBank non-convertible debentures 28/06/17 4.94% 1,350,000 1,350,000 33,345

Total 2,395,236 40,871

(1) After the end of the 2012 reporting period the maturity date was set at 1 November 2014. (2) After the end of the 2012 reporting period the maturity date was set at 30 June 2014.

On 28 June 2012, the Company issued 27 debentures of EUR 50 million nominal value each, which were subscribed and paid in full in cash by CaixaBank, S.A. for a total amount of EUR 1,350 million.

17. Tax matters

a) Tax receivables and payables

Thousands of euros

31/12/13 31/12/12

Current Non-

current Current

Non-current

VAT refundable 7,089 - -

Deferred tax assets - 1,005,072 - 258,118

Other 16

Total tax receivables 7,105 1,005,072 - 258,118

Personal income tax withholdings payable 396 305 -

VAT payable 144 556 -

Accrued social security taxes payable 74 358 -

Deferred tax liabilities - 318,846 - -

Total tax payables 615 318,846 1,219 -

b) Consolidated taxation

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, the Company files consolidated tax returns, as a subsidiary, as part of tax group no. 20/1991.

c) Reconciliation of the accounting profit/loss to the taxable profit/tax loss

Income tax is calculated on the basis of accounting profit or loss obtained by applying generally accepted accounting principles, which does not necessarily coincide with the taxable profit or tax loss.

48

The reconciliation of the accounting loss before tax to the tax loss for income tax purposes is as follows:

2013

Thousands of euros

Increase Decrease Amount

Accounting loss for the year (before tax) (64.907)

Permanent differences:

Differences between carrying amount and tax base of investments transferred - (13,156) (13,156)

Other 1,693 - 1,693

Temporary differences:

Differences between carrying amount and tax base of investments transferred 13,250 (105,467) (92,217)

Provisions for equity deficits of Group companies and associates 86,296 - 86,296

Impairment losses on financial instruments- Available-for-sale financial assets 876 - 876

Provision for doubtful debts 1,468 (1,825) (357)

Inventory write-downs, non-current assets held for sale and investment property 698,282 (790,016) (91,734)

Non-current asset impairment 475 (201) 273

Non-deductible accounting depreciation and amortisation charges 3,062 - 3,062

Differences in depreciation and amortisation rates 453 - 453

Tax loss (169,718)

2012

Thousands of euros

Increase Decrease Amount

Accounting loss for the year (before tax) (1,125,425)

Permanent differences:

Expenses recognised in reserves - (4) (4)

Other 20 - 20

Temporary differences:

Provisions for equity deficits of Group companies and associates

49,440 (10,144) 39,296

Impairment losses on investments in Group companies 62 (201) (138)

Provision for doubtful debts 1,825 (1,626) 199

Impairment losses on inventories and investment property 790,016 (539,745) 250,271

Non-current asset impairment 201 - 201

General-purpose provisions - (7,458) (7,458)

Differences in depreciation and amortisation rates 305 (5) 300

Other 25 - 25

Tax loss (*) (842,713)

(*) The resulting tax asset is recognised as an account receivable from ”la Caixa” (see Note 19).

The difference between the taxable profit or tax loss and the accounting profit or loss relates mainly to the effect of the provisions recognised for the equity deficits of investees (see Note 9), to certain impairment losses on inventories and non-current assets classified as held for sale considered to be non-deductible and to differences between the carrying amounts and tax bases of investments transferred during the year.

49

As a result of the differences between accounting and tax legislation and of the Company's taxation as part of the consolidated tax group, the tax benefit calculated on the basis of accounting profit (loss) differs from the tax settlement that determines the income tax payable to or refundable from the tax authorities; this results in the recognition of deferred tax assets relating to the excess tax paid with respect to the accrued tax, and deferred tax liabilities relating to the excess income tax accrued with respect to the tax payable.

d) Reconciliation of the accounting profit/loss to the income tax benefit

The reconciliation of the accounting profit (loss) to the income tax benefit for 2013 and 2012 is as follows:

2013

Thousands

of euros

Accounting profit before tax (64,907)

Permanent differences (11,463)

Tax charge at 30% 22,911

Tax credits 151,877

Derecognition of deferred tax assets and adjustment of prior year's income tax 174

Total income tax benefit recognised in profit or loss (174,962)

2012

Thousands

of euros

Accounting loss before tax (1,125,425)

Permanent differences 16

Tax charge at 30% (337,623)

Tax credits 2

Derecognition of deferred tax assets and adjustment of prior year's income tax 27,777

Total income tax benefit recognised in profit or loss (309,844)

e) Deferred tax assets and liabilities recognised

The detail of “Deferred Tax Assets” is as follows (in thousands of euros):

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2013

Thousands of euros

31/12/12


Changes in the year

Transfers (Note 17-e) 31/12/13

Temporary differences (deferred tax assets): Provision for doubtful debts 548 - (107) - 441 Depreciation and amortisation charge 575 - 1,015 - 1,590 Inventory write-downs 237,005 - (27,438) - 209,567

Impairment losses on investments in Group companies 19,831 - 25,889 - 45,720

Other 159 - - - 159 Arising from increase in fair value of available-for-sale financial assets - 4,848 (1,789) - 3,059 Arising from differences between carrying amount and tax base - 193,182 (29,549) - 163,633 Tax loss carryforwards - - 50,915 176,567 227,482 Tax credits - 201,544 151,877 - 353,421

Total deferred tax assets 258,118 399,574 170,813 176,567 1,005,072

2012

Thousands of euros

31/12/11

Changes in the year 31/12/12

Temporary differences (deferred tax assets): Provision for doubtful debts 478 70 548 Depreciation and amortisation charge 486 89 575 Inventory write-downs 160,950 76,055 237,005 Swap 1,853 (1,853) -

Impairment losses on investments in Group companies (1) 28,445 (8,614) 19,831

Other 382 (223) 159 Tax credits 2 (2) -

Total deferred tax assets 192,596 65,522 258,118

(1) EUR 24,840 thousand were recognised directly in the Company's equity (see Note 9.1). Relating to the tax effect of the provision for contingencies and charges totalling EUR 82,799 thousand recognised at 31 December 2011 for the equity deficit of Estuinvest, S.L.U. and Estuvendimmo, S.L.U.

The detail of “Deferred Tax Liabilities” is as follows (in thousands of euros):

2013

Thousands of euros

31/12/12


Changes in the year 31/12/13

Arising from changes in the fair value of available-for-sale financial assets - 4,848 (3,813) 1,035 Arising from differences between carrying amount and tax base - 321,786 (3,975) 317,811

Total deferred tax liabilities - 326,634 (7,788) 318,846

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The deferred tax assets indicated above were recognised in the balance sheet because the Company's directors considered that, based on their best estimate of the future earnings of the Company and of the tax group, it is probable that these assets will be recovered.

The deferred tax assets and liabilities arising from differences between the carrying amounts and tax bases relate to the investments received in the contribution made by ”la Caixa” to Criteria (the absorbed company) in 2011. Also, the deferred tax liabilities arising in this connection include those relating to the differences between the carrying amounts and tax bases of the equity investments contributed in the merger in 2013 of the Company and Criteria CaixaHolding (the absorbed company) as a result of the effect of recognising the assets and liabilities contributed at their carrying amounts in the consolidated financial statements.

The deferred tax assets and liabilities relating to available-for-sale financial assets arise when these assets are measured at fair value (see Note 10).

f) Tax loss and tax credit carryforwards

The detail of the tax group's tax loss carryforwards and of the last years for offset is as follows:

2013

Thousands of euros

Last year for offset

2013 169,718 2031 2012 588,555 2030

Total 758,273

2012

Thousands of euros

Last year for offset

2012 842,713 2030

Total 842,713

The accompanying balance sheet includes the effect of recognising the related tax loss carryforwards amounting to EUR 50,915 thousand, which were classified as non-current assets. The Company's directors consider that the tax group to which the Company belongs will generate sufficient taxable profits to be able to fully recover the tax assets recognised.

As regards the tax loss incurred by the Company in 2012, EUR 254,158 thousand were offset by the tax group in the tax group's definitive income tax return for 2012 and are payable to the Company as part of the accounts receivable from ”la Caixa” (see Note 19). The remaining tax loss of EUR 588,555 thousand was transferred to “Deferred Tax Assets” in the accompanying balance sheet because they could not be offset by the tax group in the current year, although it is expected to be offset in the coming years.

The tax credit carryforwards at 31 December 2013 include mainly double taxation tax credits. The detail of the tax credits reported each year are as follows:

Thousands of euros

2013 151,877 2012 139,936 2011 61,608

Total 353,421

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In addition, in 2012 Criteria (the absorbed company) obtained income of EUR 26,998 thousand qualifying for a tax credit for the reinvestment of extraordinary income and a tax credit of EUR 3,240 thousand was recognised. The proceeds from the transfer that gave rise to the extraordinary income were reinvested by the tax group in 2012 in equity securities affording an ownership interest of over 5% and in property, plant and equipment, intangible assets and investment property used in operations.

g) Years open for review and tax audits

Under current legislation, taxes cannot be deemed to have been definitively settled until the tax returns filed have been reviewed by the tax authorities or until the four-year statute-of-limitations period has expired. At 2013 year-end the Company had the last four years open for review for all the taxes applicable to it. The Company's directors consider that the tax returns for the aforementioned taxes have been filed correctly and, therefore, even in the event of discrepancies in the interpretation of current tax legislation in relation to the tax treatment afforded to certain transactions, such liabilities as might arise would not have a material effect on the accompanying financial statements.

h) Transactions qualifying for taxation under the special tax regime

As required by Article 93 of the Consolidated Spanish Income Tax Law, following is a detail of the transactions carried out by the Company in 2013 that qualified for taxation under the special tax regime provided for in Chapter VIII of Title VII of the Consolidated Spanish Income Tax Law:

- Spin-off of the real estate management line of business through the contribution of the assets and liabilities assigned to that business to Servihabitat Gestión Inmobiliaria

- Merger by absorption of Criteria Caixaholding S.A.U. into Servihabitat XXI, S.A.U. Following the merger, the absorbing company adopted the name of the absorbed company (Criteria CaixaHolding, S.A.U.). The detail of the assets acquired included in the accounting records of Criteria Caixaholding for a value other than that at which they had been carried at Criteria (the absorbed company) is as follows:

Carrying amount at Criteria (the absorbed company)

Carrying amount at Criteria (the absorbing company)

Saba 199,939 204,123 MB&GC 136,802 109,230 Inversiones Autopistas 154,551 141,142 Gas Natural 4,679,384 5,059,077 Hisusa 639,059 625,540 Abertis 1,353,142 1,281,318 Vithas 47,474 50,914

The disclosures relating to transactions qualifying for taxation under the special tax regime in prior years are included in the notes on tax matters in the financial statements of Servihabitat XXI (the absorbing company) and Criteria (the absorbed company) for prior years.

18. Income and expenses

a) Revenue

Revenue from equity investments

“Revenue from Equity Investments” in the accompanying income statements relates to dividends received from investees, the detail for 2013 and 2012 being as follows:

53

Thousands of euros

Company 2013 2012

Gas Natural, S.D.G., S.A. 310,026 - Abertis Infraestructuras, S.A. 81,173 - Hisusa, Holding de Infraestructuras y Servicios Urbanos, S.A. 19,306 - Inversiones Autopistas, S.L. 21,402 - Palau Migdia, S.A. 500 -

Total 432,407 -

Net gains on disposals of financial instruments

"Net Gains on Disposals of Financial Instruments" in the accompanying income statements relates basically to gains on the sale of shares and investments held by the Company. The detail of “Net Gains on Disposals of Financial Instruments" in 2013 and 2012 is as follows:

Thousands of euros

Company 2013 2012

Abertis Infraestructuras, S.A. (Note 9.2) 150,297 - Gas Natural, S.D.G., S.A. (Note 9.2) 6,543 - Servihabitat Gestión Inmobiliaria, S.L.U. (Note 9.1) 81,386 - Metrovacesa, S.A. (Note 10) 6,208 -

Total 244,434 -

Sales and services

The detail of “Sales and Services Rendered” in the accompanying income statements for 2013 and 2012 is as follows:

Thousands of euros

2013 2012

Property sales 7,983 373,449

Building leases (Note 4-c) 26,667 12,599

Services (Note 19) 4,605 70,133

Total 39,255 456,181

In 2012 “Services” included mainly income from services provided to other “la Caixa” Group companies and, in particular, to Building Center, S.A.U. for the management of property assets. This line of business was spun off with effect for accounting purposes on 1 January 2013 to Servihabitat Gestión Inmobiliaria, S.L. (see Note 2).

b) Procurements

The detail of “Procurements” in the accompanying income statement is as follows:

54

Thousands of euros

2013 2012

Purchases (*) - 50,395

Changes in inventories 107,438 604,602

Impairment of land, building lots and buildings acquired (Note 10)

-

852,754

Total 107,438 1,507,751

(*) "Procurements - Purchases" in the accompanying income statement for 2012 included the reversal of invoices not yet received amounting to EUR 21,253 thousand.

All of the Company's purchases in 2012 were made in Spain.

c) Staff costs

The detail of “Staff Costs” in the accompanying income statements for 2013 and 2012 is as follows:

Thousands of euros

2013 2012

Wages, salaries and termination benefits 7,372 6,689

Employer social security costs 733 1,939

Other employee benefit costs 450 1,101

Total 8,555 9,729

(*) "Staff Costs - Wages, Salaries and Similar Expenses" in the accompanying income statement for 2012 included the reversal of provisions amounting to EUR 4,141 thousand.

The individuals employed by the Company in 2012 basically performed real estate management services and, therefore, as a result of the spin-off of this line of business in 2013, the Company's employees were included in the workforce of Servihabitat Gestión Inmobiliaria.

"Staff Costs" in 2013 relate to the cost of the employees who joined the Company as a result of the merger between Servihabitat XXI (now Criteria) and Criteria CaixaHolding (absorbed company).

The average number of employees at the Company in 2013 and 2012, by category, was as follows:

Professional category 2013 2012

Executives 8 6

Other line personnel 38 18

Clerical staff 16 144

Total 62 168

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 7 2 4 1

Other line personnel 20 16 10 12

Clerical staff 2 14 76 129

Total 29 32 90 142

55

d) Other operating expenses

Leases

The most significant operating lease held by the Company as the lessee at 2013 year-end was the lease from CaixaBank of the offices of Criteria, located at Avenida Diagonal 621, Barcelona and at Paseo de la Castellana, 51, Madrid.

At the end of 2013 the Company had contracted with CaixaBank 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:

Operating leases Thousands of euros

Minimum operating lease payments 2013 2012

Within one year 939 - Between one and five years 1,763 - After five years - -

Total 2,702 -

The fixed operating lease payments recognised as an expense in 2013 amounted to EUR 911 thousand and were included under “Other Operating Expenses”.

Fees paid to auditors

In 2013 and 2012 the fees for financial audit and other services provided by the auditor of the Company’s financial statements, Deloitte, S.L. and the fees billed by companies related to these auditors as a result of a relationship of control, common ownership or common management, were as follows (in thousands of euros):

Services provided by the auditors and by companies

related to the auditors

2013 2012

Audit services 378 138

Other attest services 48 -

Total audit and related services 426 138

Tax counselling services - 6

Other services 18 -

Total professional services 444 144

e) Disclosures on the payment periods to suppliers. Additional Provision Three. “Disclosure obligation”

provided for in Law 15/2010, of 5 July.

Set forth below are the disclosures required by Additional Provision Three of Law 15/2010, of 5 July:

56

31/12/13 31/12/12

Amount (thousands of euros)

% Amount

(thousands of euros) %

Paid in the maximum payment period 158,477 84% 160,372 90%

Remainder 30,525 16% 18,545 10%

Total payments made in the year 189,002 100% 178,917 100%

Weighted average period of late payment exceeding maximum payment period (days)

129 days - 127 days -

Weighted average period of late payment (days) 69 days - 52 days -

Payments at year-end not made in the maximum payment period

991 - 619 -

The Company made payments of EUR 189,002 thousand in 2013, of which EUR 158,477 thousand were paid within the stipulated maximum payment period and EUR 30,525 thousand were paid outside the maximum payment period.

Weighted average period of late payment was calculated as the quotient whose numerator is the result of multiplying the payments made to suppliers outside the maximum payment period by the number of days of late payment and whose denominator is the total amount of the payments made in the year outside the maximum payment period.

The maximum payment period applicable to the Company in 2013 under Law 3/2004, of 29 December, on combating late payment in commercial transactions, was 60 days.

f) Impairment and gains or losses on disposals of non-current assets

The detail of “Impairment and Gains or Losses on Disposals of Non-Current Assets” in the income statements for 2013 and 2012 is as follows:

Thousands of euros

2013 2012

Impairment losses: on non-current assets: (552,114) (3,908) Property, plant and equipment (Note 6) - (2,928) Investment property (Note 7) (69,154) (980) Non-current assets classified as held for sale (Note 11) (482,960) - Gains or losses on disposals of non-current assets: (31,442) (4,337) Property, plant and equipment (Note 6) (176) 88 Investment property (Note 7) (1,784) (4,425) Non-current assets classified as held for sale (Note 11) (29,482) -

Total (583,556) (8,245)

g) Impairment and losses on financial instruments

As explained in the Notes on investments in Group companies (see Note 9.1) and available-for-sale financial assets (see Note 10), Criteria recognised the following impairment losses under this heading:

57

Thousands of euros

2013 2012

On investments in Group companies (Note 9.1) 82,885 27,018 On available-for-sale financial assets (Note 10) 4,287 3,460

Total 87,172 30,478

h) Finance income

"Finance Income" in the accompanying income statements relates in full to income from marketable securities and other financial instruments, the detail being as follows:

Thousands of euros

2013 2012

Group companies and associates: 56,400 3,684 Interest on demand deposits at CaixaBank 1,228 24 Interest on loans to Group companies (Note 9.3) 54,002 3,660 Other finance income 1,170 - Third parties: 5,678 39 Other finance income 5,678 39

Total 62,078 3,723

19. Related party transactions

a) Related party transactions

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 performed in the course of the Company's ordinary activities and on an arm's length basis. The transactions performed with related companies are disclosed in the preceding Notes, the summary being as follows:

• Lease of Criteria services by CaixaBank relating to the control of management, accounting, administration and financial management at CaixaBank investees.

• Until 31 October 2013, lease of Servihabitat Gestión Inmobiliaria services by Criteria (absorbed company) relating to the control of the management, administration and financial management of property companies in which CaixaBank has ownership interests.

• Framework agreement for the rendering by CaixaBank of certain services to Criteria, including, as arranged in an engagement document, internal audit services.

• Agreement for the rendering by Servihabitat Servicios Inmobiliarios of certain services to Criteria (see Note 2), which include mainly real estate and back office services.

• Lease from CaixaBank of the offices of Criteria CaixaHolding, S.A.U., located at Avenida Diagonal 621, Barcelona and at Paseo de la Castellana, 51, Madrid.

• The Company has entered into a security deposit agreement with CaixaBank.

58

• 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.

• Agreement to loan shares of Abertis (see Note 9.2).

• Grant of two loans and a credit facility by "la Caixa” to Criteria (see Note 16).

• Credit facility from CaixaBank to the Company (see Note 16).

• Grant of a credit facility to Mediterránea Beach & Golf Community (the balance outstanding at 31 December 2013 amounted to 197 million).

• Debenture issue by the Company in 2012 fully subscribed and paid in cash by CaixaBank, S.A. (see Note 16).

• Sales of all the shares held by the Company in Servihabitat Gestión Inmobiliaria, S.L. to CaixaBank for EUR 98 million (see Note 1).

• In 2013 short-term deposits were arranged with CaixaBank for between 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, the Company did not have any deposits at CaixaBank.

On the other hand, there are post-employment obligations with senior executives amounting to 6,029 thousand euros.

As well as the above-mentioned transactions, the transactions carried out with Group companies, associates and jointly controlled entities in 2013 and 2012 were as follows:

2013

Thousands of euros

2013 2012

Associates Associates

Criteria “la Caixa” and jointly Criteria “la Caixa” and jointly

Group Group controlled Group Group controlled

entities entities

Services received - 11,467 68 - 12,165 20 Services rendered 7 4,211 - 456 67,870 124

Interest income 54,002 1,228 1,170 2,831 60 832

Interest expenses - 102,925 - - 114,315 -

Dividends received 21,402 - 411,005 - - -

Dividends deducted from cost of investment - - 4,998 - - -

Dividends, reserves and share premiums distributed

- 584,000 - - - -

Full-service leases - - - - 38 -

Rent revenue 4 4,247 98 6 2,556 229

b) Related party balances

The detail of the on-balance sheet balances with related parties at 31 December 2013 and 2012 is as follows:

59

2013

Thousands of euros

2013 2012

Associates Associates

Criteria “la Caixa” and jointly Criteria “la Caixa” and jointly

Group Group controlled Group Group controlled

entities entities

Long-term credit facilities (Note 9.3) 791,455 - - 584,820 - - Interest receivable (Note 9.3) 89,039 - - 35,351 - -

Current receivables - 81,457 7 47 417,151 371

Short-term credit facilities (Note 9.3) 315 - - - - -

Advances (Note 12) - 10,144 - - 11,588 -

Cash and cash equivalents - 205,613 - - 2,713 -

Non-current payables (Note 16) - 2,000,000 - - 2,395,236 -

Interest payable (Note 16) - 33,882 - - 40,871 -

Current payables 9 11,598 2,161 - 6,908 145

Security deposits (Note 9.2) - - 17,823 - - -

The Company also holds the financial assets described in Note 9.

The current receivables from ”la Caixa” include balances arising from transactions of a commercial nature and the position arising from the definitive settlement of the income tax for 2012, amounting to EUR 76,459 thousand (see Note 17).

c) Remuneration of directors and senior executives

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:

Thousands of euros

2013 2012

Remuneration paid by Criteria 1,811 1,633 Remuneration paid by other companies 143 527

Other remuneration paid by Criteria to directors that discharged executive duties in the year

-

Total 2,224 2,160

The expense of 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.

60

Criteria CaixaHolding did not make any contributions to pension plans for members of the Board of Directors in 2013 or 2012.

Criteria CaixaHolding, S.A.U. 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 Company of the members of the managing bodies of Criteria CaixaHolding.

The Company'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 Criteria CaixaHolding, S.A.U. or with Criteria CaixaHolding, S.A.U. Group companies in 2013 or 2012.

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 - - - -

Information regarding situations of conflict of interest involving the 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 Company during 2013 have provided the following information, taking into account the change of corporate purposes from December 18, 2013:

61

COMPANY

REPRESENTED

Isidro Fainé Casas

(related party)Construcciones Riera, S.A. (under

liquidation)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 Cabani llas 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)Desarrol los 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 Imobi liar, S.R.L. Real Estate - - Sole Administrator Caixa Corp, S.A.


(until 11/07/2013)Servihabitat Gestión Inmobiliaria, S.L. Real Estate - - Sole Administrator

Cri teria CaixaHolding,

S.A.U. (prior

Servihabitat XXI)


(until 11/07/2013)Servihabitat Ofigest, S.L. Real Estate - - Sole Administrator

Cri teria CaixaHolding,

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

(unti l March 2013)

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)Celogal-Uno, S.L. Real Estate - -

Director

(unti l March 2013)

Arquitrabe Activos,

S.L.U.


(until 11/07/2013)Drembul, S.L. Real Estate - -

Director

(unti l 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

62

COMPANY

REPRESENTED

Victoria Barber Wil lems Bare 2005, S.L. Real Estate Development/Construction 50.00% 3,006Joint and Several

Administrator-

Victoria Barber Wil lems 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% 3,006Joint 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) Diskval ls, 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 Bel lavista Auladell

(unti l 12/18/2013)Al iancia Zero, S.L. (under l iquidation) Real Estate - -

Director

(until November 2013)

ServiHabitat XXI, S.A.

(now Criteria

CaixaHolding)


(unti l 12/18/2013)Vehículo de Tenencia y Gestión 9, S.L. Real Estate - - Director

ServiHabitat XXI, S.A.

(now Criteria

CaixaHolding)


(unti l 12/18/2013)

Mediterránea Beach & Golf Community,

S.A.U.Real Estate/Leisure - - Director -


(unti l 12/18/2013)Criteria CaixaHolding, S.A. Holding/Real Estate - -

Assistant General

Director-

Xavier Moragas Freixa

(unti l 12/18/2013)Al iancia Zero, S.L. (under l iquidation) Real Estate - -

Director

(until November 2013)

Criteria CaixaHolding,

S.A.U. (before the

merger with

Servihabitat XXI)

Xavier Moragas Freixa

(unti l 12/18/2013)Criteria CaixaHolding, S.A. Holding/ Real Estate - -

Assistant Deputy General

Director -

Jean-Louis Chaussade GDF Suez (France) Holding/Uti li ties - -

Member of the

Management Committee

and Executive Committee

-

Jean-Louis Chaussade Suez Environnement Company (France) Holding/Uti li ties 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/Uti li ties - -Chairman of the Board of

Directors-

Jean-Louis Chaussade Sembsita Australia PRY (Austral ia) Holding/Cleaning - - Director -

Jean-Louis Chaussade

(related party)GDF Suez (France) Holding/Uti li ties 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

63

20. Note to the statement of cash flows

Cash and cash equivalents increased by EUR 73,250 thousand with respect to the end of 2012. This increase is explained by the positive flows from operating activities amounting to EUR 437,266 thousand and the positive flows from investing activities amounting to EUR 396,245 thousand, less the negative flows of EUR 760,261 thousand arising from financing activities, due basically to the remuneration of the sole shareholder.

The positive cash flows from operating activities included most notably the cash flows obtained from the dividends received from investments in companies, which amounted to EUR 438,417 thousand.

The positive cash flows from investing activities included most notably the those from the divestments made by the Company in Group companies, associates and jointly controlled entities (basically in Servihabitat Gestión Inmobiliaria, Abertis and Gas Natural, see Note 9.1), which amounted to EUR 542,999 thousand, and those from collections in relation to sales of non-current assets classified as held for sale, amounting to EUR 93,950 thousand. These positive flows were used to finance the investments made amounting to EUR 255,166 thousand, the most significant being the loans granted to Group companies (mainly to Mediterránea Beach & Golf Community, see Note 9.3).

The positive flows from operating and investing activities were used to offset negative flows from financing activities, which include most notably the payments made to the sole shareholder amounting to EUR 665,000 thousand in 2013.

21. Information on the environment

In view of the Company'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 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, Criteria CaixaHolding, S.A.U. 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 companies and utilities in which Criteria CaixaHolding, S.A.U. has ownership interests have well defined corporate responsibility strategies and, in addition, are multinationals which report periodically in accordance with 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”.

22. Risk management policy

1. Risk management policy

Following is a list of the risks that might affect the economic profitability of the Company’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.

64

• 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 investments in the portfolio of jointly controlled entities and associates.

• Operational risk. Relating to errors in the implementation and performance of operations.

The Company, in coordination with the Strategic Risk Management Division of the “la Caixa” Group, uses various methods and tools to assess and monitor risks:

- For investments not classified as available for sale and for available-for-sale investments intended to be held for strategic purposes, the most significant risk is default risk and, therefore, the PD/LGD approach is used.

- For the other investments 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 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 Company's financial statements.

1.1. 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 and/or for the losses on the positions composing the investment portfolio, rather than the trading portfolio, at medium to long term.

Price risk

At 31 December 2013, 92% of the market value of the Company's investments in equity instruments related to listed securities. As a result, the Group is exposed to the market risk generally associated with listed companies. The listed securities are exposed to fluctuations in price and trading volume due to factors beyond the Company's control.

The Company has specialised teams which continually monitor investee transactions, to a greater or lesser extent on the basis of the Company's level of influence over them, using a combination of indicators which are updated periodically. Additionally, the Company, together with the Strategic Risk Management Division of the “la Caixa” Group, measures the risk of the investments, 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 Basel II regulation for banks, and from the point of view of the possibility of bankruptcy, applying models

65

based on the Probability of Default and Loss Given Default (“PD” and “LGD”) approaches, also in accordance with the provisions of the New Basel Capital Accord (NBCA).

Company management monitors these indicators on an ongoing, case-by-case 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 Company's strategy. Also, the values are subject to ongoing monitoring in order to assess whether there is any objective evidence of impairment, as described in Note 6.

Interest rate risk

This relates mainly to changes in borrowing costs on floating-rate debt. Therefore, the risk lies basically in the Company'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 to limit and control the effects of changes in interest rates on profit and cash flows, ensuring the maintenance of a suitable level of overall borrowing costs.

The market interest rate affects financial profit since certain financial liabilities and financial assets 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 (loss)

net of tax -0.5% 7 +0.5% (7) +1% (14)

Foreign currency risk

The functional currency of the assets and liabilities in the Company's balance sheet is the euro.

The Company may also be indirectly exposed to foreign currency risk through the foreign currency investments made by investees due, in certain cases, to their major international presence.

The Company'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.

At 31 December 2013, the Company had no direct investments denominated in foreign currency.

Country risk

The Company's policy for managing or mitigating country exposure to indirect investment 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.

1.2. 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

66

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, Criteria CaixaHolding, S.A.U. 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 Company's financial assets and liabilities is presented in each of the Notes to the financial statements.

1.3. 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 cost of investments in jointly controlled entities and associates of EUR 6,727 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 balance sheet or income statement because these investments are recognised at acquisition cost. The risk 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).

1.4. Operational risk

This is defined as the risk of incurring a loss as a result of errors in operating processes.

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.

23. Segment reporting

The breakdown, by business line, of the Company's revenue is as follows:

Thousands of euros

Operating segment 2013 2012

Holding company 678,608 - Property business 35,361 456,181

Revenue 713,969 456,181

24. Events after the reporting period

• On 11 February 2014, Criteria CaixaHolding granted a loan of EUR 20 million to Resort Holdings, BV, maturing in 2021 and earning interest at 10.25%.

67

• Inmobiliaria Colonial, S.A.: 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.: 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.

In turn, Mediterránea repaid early the loan of EUR 197,221 thousand that had been granted to it by the Company (see Note 9.3).

25. Explanation added for translation to English

These financial statements are presented on the basis of the regulatory financial reporting framework applicable to the Company (see Note 2-a). Certain accounting practices applied by the Company that conform with that regulatory framework may not conform with other generally accepted accounting principles and rules.

68

APPENDIX I Disclosure requirements of Article 93 of the Consolidated Spanish Income Tax Law in relation to the merger of the Company and Criteria CaixaHolding (the absorbed company)

a) Most recent balance sheet of the transferor

CRITERIA CAIXAHOLDING, S.A.U. Balance sheet at 31 December 2012

Thousands of euros

ASSETS 31/12/12

NON-CURRENT ASSETS Intangible assets 233 Computer software 769 Accumulated amortisation (536) Property, plant and equipment 1,180 Fixtures, tools, furniture and other 2,140 Accumulated depreciation (960) Non-current investments in Group companies, jointly controlled entities and associates 8,570,478 Investments in Group companies 1,851,421 Investments in associates and jointly controlled entities 6,719,057 Non-current receivables from Group companies - Non-current financial assets 29,482 Deferred tax assets 399,574

Total non-current assets 9,000,947

CURRENT ASSETS Accounts receivable 9 Receivable from Group companies 8 Other receivables - Accounts receivable from public authorities 1 Current financial assets 136,778 Dividends receivable 136,773 Other 5 Cash and cash equivalents 134,369

Total current assets 271,156

TOTAL ASSETS 9,272,103

69

CRITERIA CAIXAHOLDING, S.A.U. Balance sheet at 31 December 2012

Thousands of euros

EQUITY AND LIABILITIES 31/12/12

EQUITY: Shareholders’ equity 8,936,372 Registered share capital 3,225,000 Share premium 5,463,285 Legal reserve 645,000 Voluntary reserves and first-time application reserve - Retained losses - Loss for the year (396,913) Interim dividend paid during the year - Valuation adjustments 11,311 Available-for-sale financial assets 11,311

Total equity 8,947,683

NON-CURRENT LIABILITIES Provisions for contingencies and charges - Deferred tax liabilities 216,811

Total non-current liabilities 216,811

CURRENT LIABILITIES Current payables 383 Current payables to Group companies, associates and jointly controlled entities 103,863 Trade and other payables 3,363 Accounts payable 1,641 Accounts payable to public authorities 737 Other 985 Total current liabilities 107,609

TOTAL EQUITY AND LIABILITIES 9,272,103

70

b) Year in which the transferor acquired the depreciable and amortisable assets transferred

2010 and prior years

2011 2012

Intangible assets - 367 233 Computer software - 730 769 Accumulated amortisation - (363) (536) Property, plant and equipment - 306 1,180 Fixtures, tools, furniture and other - 1,049 2,140 Accumulated depreciation - (743) (960)

c) List of assets acquired and liabilities assumed which are recognised in the accounting records of the Company at a carrying amount that differs from the amount at which they had been carried in the transferors' accounting records

See Note 17 on Tax matters.

d) List of the tax benefits enjoyed by the transferor with respect to which the Company must assume the fulfilment of certain requirements

See Note 17 on Tax matters.

71

APPENDIX II INVESTMENTS IN GROUP COMPANIES

Profit

Company name and line of business Location/ Registered office Direct Total (Loss)

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 - TarragonaSpain

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

Thousands of euros

Operation, management and administration of

leased housing

% of Ownership

Operation and management of property

developments in the areas adjacent to the theme

park


leased housing


leased housing

Reserves

and interim

dividends

Other

equity

items

Total

equity

Dividends

from direct

ownership

interest in

2013

Share

capital

Impairment

of direct

ownership

interest

Carrying

amount

of direct

ownership

interest

72

APPENDIX III INVESTMENTS IN JOINTLY CONTROLLED ENTITIES AND ASSOCIATES

Thousands of euros

Company name and line of business Location/ Registered office Direct Total

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 15,49

08040 BarcelonaSpain

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 17,58

Electricity and gas business 08003 BarcelonaSpain

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 BarcelonaSpain

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 28002Spain

Carrying

amount

of direct

ownership

interest

Transport and communications infrastructure

management

Total

equity

Dividends

from total

ownership

interest in

2013

Market

price at

31/12/13

Average

market

price in last

quarter

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 financial statements.

% of ownership Reserves

and interim

dividends

Share

capital

Other

equity

items

Profit

(Loss)

73

APPENDIX IV AVAILABLE-FOR-SALE FINANCIAL ASSETS - EQUITY INSTRUMENTS

Thous ands of euros

Company name and l ine of bus ines sLocation/ Regis tered office Direct Tota l

C/ Pedro de Va ldivia , 16 5,79 5,79 - 1,05 1,2028006 MadridSpain

C/ José Echegaray, 8 - 9,48 - - -28232 MadridSpain

Vehículo de Tenencia y Ges tión 9, S.L. Paseo de la Cas tel lana , 89 - 19,90 - - -28046 MadridSpain

Sociedad Promotora Bi lbao Gas Hub, S.A. C/ Gran Via De Don Diego Lopez De Haro 2325,00 25,00 - - -48.001 Bi lbao

Spain

% of owners hip Dividends from

direct owners hip

interes t in 2013

Market

price at

Inmobi l ia ria Colonia l , S.A.

Average

market

price in

las t quarter

of 2013

Logis tics , market and financial s ervices

required

Real estate services

Real estate services

Property development

Al iancia Zero, S.L.

1

Translation of a report originally issued in Spanish. In the event of a discrepancy, the Spanish-language version prevails.

Criteria CaixaHolding, S.A. (Sole-Shareholder Company)

Directors' Report for the year ended 31 December 2013 1 Performance of the company 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 a presence 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:

2

1 Saba, Mediterránea, Vithas, Colonial and Caixa Capital Risc.

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 of the real estate management business 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.

3

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 (2013 Net Debt/EBITDA (2.9x)) 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.

4

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) 2012

Total assets 44,495 46,887

Equity 15,010 14,879

Net financial debt 14,641 15,995

Operating data 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.

Regarding 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

5

acquisition, in different stages, by Abertis of at least 4,227 passive infrastructures and the decommissioning of those which cannot be optimised.

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 4,039

EBITDA 2,923 2,459

Net profit 617 1,024

Balance sheet (millions of euros) 2013 2012


Equity 6,590 6,961


Revenue/ operating data 2013 2012

ADT (Average daily traffic) 19,796 21,490

Toll road revenue 4,139 3,190

Telecommunications revenue 511 485

Airport revenue N/A 323

*The airports division is classified as a discontinued activity.

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.

6

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.

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.

2 Low-pressure water distribution: distribution to end consumer.

3 High-pressure water distribution: water catchment, transportation and treatment.

7

Main aggregates


Revenue 2,037 1,933

EBITDA 648 641

Net profit 136 117



Equity 2,701 2,645


Operating data(1)

2013 2012

Water consumption in Spain 745 768

Water consumption in Chile 549 538

(1) Data in hm3.

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

8

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).

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.

9

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

Operating data 2013 2012

Number of rounds 60,123 53,277

* The Parent granted financing to repa y i ts financia l debt prior to the

capi ta l increase that took pla ce in 2014.

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.

10

* Source: DBK 2013. By volume of billings, excluding hospital groups owned by health insurance companies in view of their exclusive nature.

Vithas has one 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 standardise 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.


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.

11

Main aggregates


Revenue 200 196

EBITDA 32 32

Net profit 13 13


Total assets 231 223

Equity 103 91

Net financial debt 68 73

Operating data 2013 2012

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

Operating data (millions of euros) 2013 2012

Funds managed 73 73

2 Risk management

Criteria CaixaHolding'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, Criteria teams of specialists monitor the investees. At least once a year and whenever there are indications that the Company'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 Company 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


Revenue 3.3 2.4

EBITDA 0,7 0.4

Net profit 0.5 0.3

Balance sheet (thousands of euros) 2013 2012

Total assets 3.9 3.2

Equity 2.7 3.3

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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.

- Completion of property developments. The acquisition criteria established by the Company 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 Company'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 Company 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 Company 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

Criteria CaixaHolding, S.A.U. uses derivative financial instruments to hedge the financial risks to which it is

exposed.

4 Events after the reporting period

• On 11 February 2014, Criteria CaixaHolding granted a loan of EUR 20 million to Resort Holdings, BV, maturing in 2021 and earning interest at 10.25%.

• Inmobiliaria Colonial, S.A. 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 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.

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In turn, Mediterránea repaid early the loan of EUR 197,221 thousand it had been granted by the Company (see Note 9.3).

5 Research and development activities

Criteria CaixaHolding, S.A.U. did not engage in any research and development activities in 2013.

6 Treasury share transactions

Criteria CaixaHolding, S.A.U. did not perform any treasury shares transactions in 2013.

Documents

Criteria CaixaHolding, S.A.U. · PDF fileStatements of cash flows ... The accompanying Notes 1 to 25 and the Appendices are an integral part of the statement of cash flows for 2013