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Criteria CaixaCorp, S.A.

Financial Statementsfor the Year EndedDecember 31, 2007 andDirector’s Reporttogether with Auditor’s Report

CRITERIA CAIXACORP, SA

FINANCIAL STATEMENTS AND

MANAGEMENT REPORT FOR 2007

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accepted accounting principles in Spain (see Note 20). In the event of a discrepancy, the Spanish-language version prevails.


BALANCE SHEETS AT 31st DECEMBER 2007 AND 31st DECEMBER 2006 (Notes 1 and 4)

(Thousands of Euros)

ASSETS 2007 2006 (*) SHAREHOLDERS' EQUITY AND LIABILITIES 2007 2006 (*)

NON-CURRENT ASSETS: SHAREHOLDERS' EQUITY (Note 10):Intangible assets (Note 5) 155 405 Share capital 3,362,890 2,629,871 Computer software 1,281 1,150 Share premium 7,711,244 5,999,152 Other deferred charges 7 351 Reserves 525,974 1,148,192 Accumulated amortisation (1,133) (1,096) Legal reserve 525,974 525,974 Property, plant and equipment (Note 5) 1,272 9,435 Voluntary reserve - 622,218 Land and buildings - 8,881 Profit for the period 2,316,047 1,833,198 Fixtures, tools, furniture and other 3,134 2,225 Accumulated depreciation (1,862) (1,671) Interim dividend paid during the year (Note 3) (1,960,887) (500,000)Long-term investments (Note 6) 13,020,734 8,397,753 Investments in Group companies 3,289,249 2,249,083 Total shareholders' equity 11,955,268 11,110,413 Investments in associates 5,373,238 3,347,800 PROVISIONS FOR CONTINGENCIES AND Long-term investment securities 4,264,242 2,939,937 CHARGES (Notes 11 and 14) 9,723 183,327Long-term loans to Group companies (Note 7) 134,320 189 Long-term deposits and guarantees given 114 103 NON-CURRENT LIABILITIES:Allowances (Note 6) (40,429) (139,359) Long-term payables to Group companies (Note 12) 1,604,756 226,208

13,022,161 8,407,593 Total non-current liabilities 1,604,756 226,208

CURRENT ASSETS: CURRENT LIABILITIES:Accounts receivable 132,096 1,117,390 Bank borrowings (Note 12) 5,145 2 Receivable from Group companies (Note 7) 1,013 578,260 Payable to Group companies, associates and Other accounts receivable 5,452 525,904 jointly controlled entities (Note 12) 323,208 300,076 Tax receivables (Note 13) 125,631 13,226 Trade payables 26,478 1,566 Short-term investments (Note 8) 796,172 186,609 Other non-trade payables 28,990 57,297 Liquid assets (Note 9) 2,400 2,167,297 Accrual accounts 739 - Total current liabilities 383,821 358,941

Total current assets 931,407 3,471,296 TOTAL ASSETS 13,953,568 11,878,889 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 13,953,568 11,878,889

The accompanying Notes 1 to 20 are an integral part of the balance sheet at 31st December 2007

(*) The figures for 31st December 2006 are presented for comparison purposes only.

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accepted

accounting principles in Spain (see Note 20). In the event of a discrepancy, the Spanish-language version prevails.


INCOME STATEMENTS

FOR THE YEARS ENDING

31st DECEMBER 2007 AND 2006 (Notes 1 and 4)(Thousands of Euros)

DEBIT 2007 2006 (*) CREDIT 2007 2006 (*)

EXPENSES: INCOME Staff costs (Note 15) 8,432 6,570 Revenue (Note 15):Depreciation and amortisation charge 314 257 Services 1,189 1,356Other operating expenses (Note 15) 139,099 3,402 Income from equity investments 2,162,952 627,805Finance and similar costs (Note 15) 54,613 286 Other interest and similar income (Note 15) 91,224 31,340Provision for contingencies and charges - - Gains on disposals of investments (Note 6) 159,027 1,524,697

Extraordinary income or profit (Note 5) 1,692 -Losses on disposals of investments (Note 6) 169,176 - Change in the provision for contingencies and charges 10,277 -

(Note 11)Other extraordinary expenses and losses 11 588 Net change in control portfolio allowances (Note 6) 20,808 101,573

Profit before tax 2,075,524 2,275,668 Loss before tax - -

Income tax (Note 13) (240,523) 442,470

Net profit for the period 2,316,047 1,833,198 Net loss for the period - -

The accompanying Notes 1 to 20 are an integral part of the income statement for 2007

(*) The figures for 31st December 2006 are presented for comparison purposes only.

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accepted

accounting principles in Spain (see Note 20). In the event of a discrepancy, the Spanish-language version prevails.

Translation of financial statements originally issued in Spanish and prepared in accordance with generally accepted accounting principles in Spain (see Note 20). In the event of a discrepancy, the Spanish-language version prevails.


NOTES TO THE FINANCIALSTATEMENTS

FOR THE YEAR ENDED 31ST DECEMBER 2007

(1) COMPANY DESCRIPTION

Criteria CaixaCorp, SA, (formerly “CaixaHolding, SA”) changed its name to the present one on 19th July 2007. Its registered office is at Avenida Diagonal 621, Barcelona, and it was incorporated under the name GDS-Grupo de Servicios, SA for an indefinite period of time on 12th December 1980.

Per Article 2 of its bylaws, the company object of Criteria CaixaCorp, SA (hereinafter “Criteria CaixaCorp”), both in Spain and abroad, is as follows:

a) the administration and management of companies

b) the provision of financial, tax, technical, stock market and any other advisory services; and the performance of activities as consultants, advisers and promoters of industrial, commercial, property development, agricultural and any other projects.

c) the indirect performance, i.e. through the ownership of shares or holdings in other companies formed for the purpose, of private insurance transactions; and

d) operation as a holding company, being able to form or participate, as a partner or shareholder, in other companies, whatever their nature or object, through the subscription or acquisition and ownership of shares or holdings.

On 1st June 2000, GDS-Grupo de Servicios, SA absorbed Caixa Holding, which was dormant, and adopted its company name. On 31st July 2000, the Company carried out a EUR 2,625 million capital increase, with a share premium of EUR 7,288 million which was subscribed by its sole shareholder, la Caixa d’Estalvis i Pensions de Barcelona ("la Caixa"), on this same date and paid through the contribution of most of the shares that made up its share portfolio at that time. These shares were recognised by Criteria CaixaCorp at the carrying amount stated in the consolidated financial statements of “la Caixa” at the aforementioned date, and the gross value of the shares was carried separately from the allowances recorded.

In November 2006, the Board of Directors of “la Caixa” approved to study the admission to trading of its holdings through Criteria CaixaCorp. With this operation “la Caixa” seeks to obtain market approval of management of the portfolio and achieve a suitable platform for the international expansion of the banking and financial business.

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On 7th June 2007, the Annual General Assembly of “la Caixa” approved the admission to trading of Criteria Caixa Corp and authorised the sale of shares of the Company up to a limit of 49% of its share capital. On 19th July 2007, the Extraordinary General Assembly of “la Caixa” ratified these resolutions, in particular with regard to the broadening of the shareholder structure through an Initial Public Offering and/or a Public Offering (existing shares).

Following the approval of the Offering Circular of the Offering by the Spanish National Securities Market Comission (“CNMV”), on 10th October 2007 saw the completion of the process for the admission to trading of Criteria CaixaCorp, with its shares being admitted at market value. The Offering consisted of the issuance of 657,500,000 newly-issued shares with a par value of one euro (EUR 1) each. The initial price of the share was established at EUR 5.25, giving rise to a share premium of EUR 2,794,375 thousand. The transaction was finalised on 7th November 2007 through the partial exercise of the “green-shoe” subscription option by the Global Coordinators on 75,519,037 shares with a par value of one euro (EUR 1), which gave rise to an additional capital increase of EUR 75,519 thousand and a share premium of EUR 320,956 thousand. Additionally, “la Caixa” resolved to deliver free of charge 200 shares to each of the serving employees of “la Caixa”, to the employees of the “la Caixa” Foundation and other Group companies.

The final number of shares held by minority shareholders amounted to 21.97% of the share capital of Criteria CaixaCorp. “la Caixa” has stated its intention to Criteria CaixaCorp to promote an increase in the number of shares held by shareholders other than “la Caixa” until this number reaches 25% of the share capital of Criteria CaixaCorp (excluding, where appropriate, the Company’s treasury shares), with the objective of more widely distributing the shares of Criteria CaixaCorp and increasing their liquidity through the sale of existing shares. These shares would be sold in the event that, one year subsequent to the admission to trading of Criteria CaixaCorp’s shares, the market conditions were such as to enable “la Caixa” to obtain a selling price higher than the offering price without negatively affecting the trading thereof, and in this case they would be exercised in the three-month period from that date.

As a result of this operation, Criteria CaixaCorp lost its sole-shareholder status and this loss of status was executed in a public deed at the Barcelona Mercantile Registry on 7th November 2007.

During the first semester of 2007 and prior to its admission to trading, in 2007 Criteria CaixaCorp’s investment portfolio was reorganised to guarantee the future development of the business in terms of value maximisation, in line with the established strategy.

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In this respect, the following internal corporate reorganisation transactions were performed:

1. Sale to “la Caixa” of certain holdings owned by Criteria CaixaCorp, basically for the following reasons:

(i) Companies not expected to generate new

activity:

- Caixa de Barcelona Seguros de Vida, SA de Seguros y Reaseguros, (“CaixaVida”)

- Corporación Hipotecaria Mutual EFC, SA - RentCaixa, SA

(ii) Companies engaging in “la Caixa” multichannel management:

- e-“la Caixa” SA and its subsidiaries: • ECT MultiCaixa, SA • C3 Caixa Center, SA • Serviticket, SA

(iii) Companies providing support to “la Caixa”

or institutional investments:

- Banco de Europa, SA and its subsidiaries: • Telefónica Factoring, EFC, SA • FinanciaCaixa 2, EFC, SA • Telefónica Factoring Brasil, LTDA • GDS-CUSA, SA

- Servicios Urbanos y Mantenimiento, SA (SUMASA),

- PromoCaixa, SA - Caixa Preference, SAU - Telefónica Factoring México, SA

(iv) Seed capital companies which have an

institutional element of innovation support: - Barcelona Emprèn, SCR, SA - BCN Ventures, SGECR, SA - Catalana d’Iniciatives, SCR, SA - Invercat Exterior, FCR - Neotec Capital Riesgo, SCR, SA - Caixa Capital Risc, SGECR, SA - Caixa Capital Semilla, SCR de Régimen Simplificado, SA, - Caixa Capital Pyme Innovación, SCR de régimen simplificado, SA, - Iniciativa Emprendedor XXI, SA

(v) Other companies - Edicions 62, SA - Trade Caixa I, SA - Inforsistem, SA - Inversiones Inmobiliarias Oasis Resort, SL - Inversiones Inmobiliarias Teguise Resort, SL - 4-D Neuroimaging - Directo Inc. - Chip Card, SA - Productora Elèctrica Urgellenca SA - Foment de Ciutat Vella, SA

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2. Acquisition by Criteria CaixaCorp from “la Caixa” of the following shareholdings:

Company Name Ownership (%)

Abertis Infraestructuras, SA (1) 12.79

Inversiones Autopistas, SL (1) (2) 50.10

Telefónica, SA (1) 0.40

Bolsas y Mercados Españoles, SHMSF, SA 3.53

Gas Natural, SDG, SA (1) 0.20

Finconsum, EFC, SA (1) 55.00

CaixaRenting, SA(1) 100.00

Gesticaixa, SGFT, SA (1) 6.00

(1) Most of these holdings were previously sold to “la Caixa” by other Group companies.

(2) Holding company which has a 7.75% shareholding in Abertis Infraestructuras SA.

All the transactions listed above were performed at market value, i.e. considering the market price or third-party valuation of the investment or, in the absence thereof, its underlying carrying amount.

(2) BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS

a) Fair presentation

The accompanying financial statements, which were prepared by the Company’s directors, were obtained from the Company’s accounting records and are presented in accordance with the Spanish National Chart of Accounts, so that they present fairly the Company’s net worth and financial position at 31st December 2007, and the results of its operations and the funds obtained and applied by it in the year then ended. These financial statements, which were prepared by the Board of Directors on 6th March 2008, will be submitted for approval by the shareholders at the respective Annual General Meeting, and it is considered that they will be approved without any changes.

The 2006 financial statements were approved by the shareholders at the Annual General Meeting held on 29th March 2007.

The accompanying financial statements of Criteria CaixaCorp do not reflect the changes in equity that would result from fully or proportionately consolidating or accounting for investments in Group companies, jointly controlled entities and associates using the equity method. Additionally, the consolidated financial statements at 31st December 2007 and 2006 of the Criteria CaixaCorp Group, which were prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union, present the following aggregates with respect to consolidated

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equity, profit for the year attributable to the Group, total consolidated assets and total consolidated income:

2007 2006

Consolidated equity 15,013,591 14,944,921

Profit for the year attributable to the Group 1,725,862 2,159,331

Total consolidated assets 40,680,565 37,400,986

Revenue 2,227,420 2,739,545


The non-consolidated profit for the year of Criteria CaixaCorp includes, as a consequence of the investment portfolio reorganization, an extraordinary dividend from Caixa Barcelona Vida, amounted EUR 1,350 millions, which has been eliminated in the consolidation process (see Note 15).

b) Accounting principles

The financial statements were prepared using the accounting policies and measurement bases detailed in Note 4. All obligatory accounting policies and measurement bases with a significant impact on the accompanying financial statements were applied in their preparation. The headings “Profit from Operations”, “Financial Profit”, “Profit from Ordinary Activities” and “Extraordinary Profit” were eliminated from the accompanying income statement since, as a result of the activities of Criteria CaixaCorp, finance income, finance costs, changes in the control portfolio allowances and gains on disposal of investments form part of profit from operations.

c) Comparative information

The figures for 2006, included in the accompanying 2007 financial statements, are presented for comparison purposes only.

No other material regulatory changes arose which affect the comparison of the accompanying financial statements for 2007 and 2006.

d) Entry into force of the new Spanish National Chart of Accounts

In accordance with RD 1514/2007 of 16th November, the Company must adapt its accounting records to the new Spanish Chart of Accounts, which will enter into force on 1st January 2008 and must be applied for all periods beginning on or after that date.

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(3) DISTRIBUTION OF PROFIT

The distribution of profit for 2007 proposed by Criteria CaixaCorp’s directors and the allocation of profit for 2006 are as follows:

2007 2006

Distribution basis:

Profit for the year 2.316.047 1.833.198

2.316.047 1.833.198

Distribution:

Dividends 2.028.145 665.000

To legal reserve 146.604 -

To voluntary reserve 141.298 1.168.198

2.316.047 1.833.198


In 2007 the Board of Directors resolved to distribute three interim dividends for a total of EUR 1,960,887 thousand. Therefore, the Board of Directors of Criteria CaixaCorp will propose to the shareholders, at the Annual General Meeting, the distribution of a complementary dividend of EUR 67,258 thousand.

Set forth below are the legally required provisional accounting statements prepared to evidence the existence of sufficient liquidity for the distribution of these dividends:


Date of interim dividend distribution resolution 07/06/07 26/07/07 13/12/07

Date of accounting close used 30/04/07 30/06/07 30/11/07

Profits since 1 January 2007 1,712,351 1,881,339 2,245,760

Appropriation to the legal reserve - - (146,604)

Interim dividend distributed - (1,010,000) (1,860,000)

Maximum amount to be distributed 1,712,351 871,339 239,156

Interim dividend agreed upon (1,010,000) (850,000) (100,887)

Retained earnings 702,351 21,339 138,269

Available in credit accounts and liquid assets 6,605,114 5,905,456 4,170,287

Envisaged changes in liquid assets (4,332,096) (3,261,169) (785,424)

Interim dividend (1,010,000) (850,000) (100,887)

Remaining liquidity 1,263,018 1,794,287 3,283,976

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In 2006 Criteria CaixaCorp resolved to distribute three interim dividends for a total of EUR 500,000 thousand. Set forth below are the legally required provisional accounting statements prepared to evidence the existence of sufficient liquidity for the distribution of these dividends:


Date of interim dividend distribution resolution 06/06/06 07/09/06 28/12/06

Date of accounting close used 30/04/06 31/07/06 30/11/06

Profits since 1 January 2006 314,063 357,626 976,804

Interim dividend distributed - (100,000) (300,000)

Maximum amount to be distributed 314,063 257,626 676,804

Interim dividend agreed upon (100,000) (200,000) (200,000)

Remaining balance 214,063 57,626 476,804

Available in credit accounts and liquid assets 2,664,944 2,437,839 2,842,040

Envisaged changes in liquid assets (363,756) (209,125) 1,454,281

Interim dividend (100,000) (200,000) (200,000)

Remaining liquidity 2,201,188 2,028,714 4,096,321

(4) ACCOUNTING POLICIES

The principal accounting policies used by the Company in preparing its 2007 financial statements, in accordance with the Spanish National Chart of Accounts, were as follows:

a) Intangible assets

Intangible assets, which are recognised at cost, basically include development costs for new computer software and are amortised on a straight-line basis over five years.

The intangible asset amortisation charges for 2007 and 2006 amounted to EUR 53 thousand and EUR 39 thousand, respectively, and are recognised under “Depreciation and Amortisation Charge” in the accompanying income statement.

b) Property, plant and equipment

Property, plant and equipment are stated at acquisition cost less the related accumulated depreciation. Depreciation of the items of property, plant and equipment is calculated, using the straight-line method, on the basis of the cost value of the assets over the following periods of estimated useful life:

Years of Estimated Useful Life

Structures 50 Fixtures, tools and furniture 5 to 10 Computer hardware 2 to 3 Other items of property, plant and equipment

3 to 8

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As an exception, land is not depreciated since it is considered to have an indefinite life.

The costs of expansion or improvements leading to a lengthening of the useful lives of the assets are capitalised.

Upkeep and maintenance costs are recognised as an expense in the year in which they are incurred.

Depreciation charged to the income statement in 2007 and 2006 amounted to EUR 261 thousand and EUR 218 thousand, respectively, and is recognised under “Depreciation and Amortisation Charge” in the accompanying income statement.

c) Marketable securities and other similar investments

Investments in marketable securities and other similar financial assets are recognised as follows:

1. Listed securities (excluding shares in Group companies, jointly controlled entities or associates): at the lower of cost and market value. The market value was taken to be the lower of average market price in the last quarter and market price at year-end.

2. Unlisted securities and equity investments in Group companies, jointly controlled entities or associates: at the lower of acquisition cost and underlying carrying amount of the shares, adjusted by the amount of the unrealised gains disclosed at the time of the acquisition and still existing at the date of subsequent measurement. Gains not attributable to specific items of the investee will be amortised over the period in which it is considered, at a minimum, that this company will contribute to the generation of profit (from 5 to 20 years). These amortisation charges are recognised with a charge to “Net Change in Control Portfolio Allowances” in the accompanying income statement, unless they are absorbed by an increase in the underlying carrying amount of the investee.

Unrealised losses (cost higher than market value or fair value at year-end) are recognised under "Allowances" in the accompanying balance sheets.

Long-term guarantees relate to the rent deposits paid out by the Company for certain offices.

d) Current/Non-current classification

In the accompanying balance sheets assets and liabilities due to be settled within 12 months are classified as current items and those due to be settled within more than 12 months as non-current items.

e) Accounts receivable

The accounts receivable are recognised at face value or realisable value and the related operating allowance is recognised if the latter value is lower.

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f) Accounts payable

Accounts payable are recognised at repayment value plus the accrued interest payable at year-end.

g) Income tax

The current income tax expense is calculated on the basis of accounting profit before tax, increased or decreased, as appropriate, by permanent differences from taxable profit, net of tax relief and tax credits, excluding tax withholdings and prepayments.

The deferred tax assets or liabilities arising as a result of the timing differences resulting from the application of tax policies in the recognition of income and expenses are reflected in the balance sheet until they reverse, in accordance with current accounting legislation.

Additionally, Criteria CaixaCorp forms part of the “la Caixa” consolidated tax group and files consolidated tax returns (see Note 13) 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.

The taxable profit relating to tax credits for double taxation, reinvestment and staff training costs is treated as a deduction from income tax in the year in which entitlement to the tax credit arises or is exercised (see Note 13). Compliance with the requirements set forth in current legislation is required in order to use these tax credits.

In 2006 the Consolidated Corporation Tax Law was amended by Final Provision Two of Law 35/2006, of 28th November. As a result of this amendment, among other measures, the standard tax rate was reduced to 32.5% for the tax period beginning from 1st January 2007, and to 30% for the tax periods beginning from 1st January 2008. Consequently, at the end of each financial year the deferred tax assets and liabilities recognised under the balance sheet headings “Tax Receivables”, “Tax Payables” and “Long-term Payables to Group Companies” against “Income Tax” in the income statement were restated (see Note 13).

h) Foreign currency transactions

Foreign equity securities are translated to euros by applying to the acquisition price the exchange rates prevailing at the date on which the securities were included in the Company’s assets. This value may not exceed the value that would result from applying the year-end exchange rates to the market values of the securities.

Upon initial recognition, receivables and payables denominated in foreign currencies are translated to euros at the exchange rates ruling at the trade date, and are adjusted at year-end to the exchange rates then prevailing.

Exchange differences arising on adjustment of foreign currency payables and receivables to year-end exchange rates are classified by due date and currency, and for

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this purpose currencies which, although different, are officially convertible are grouped together.

The positive net differences in each group of currencies are recognised under "Deferred Income" on the liability side of the balance sheet, unless exchange losses in a given group have been charged to profit in prior years, in which case the net positive differences are credited to profit for the year up to the limit of the negative net differences charged to profit in prior years.

The negative differences in each group are charged to profit, the moment in which these differences are generated.

The positive differences deferred in prior years are credited to profit in the year in which the related receivables and payables fall due or are settled early, or as negative exchange differences for the same or a higher amount are recognised in each homogeneous group.

i) Derivative transactions

In equity security option transactions, the premiums paid are recognised as an asset while the premiums received are recognised as a liability. In the case of hedges, the premiums are taken to profit throughout the term of the option, whereas in the case of trading options, the premiums are allocated to profit as the hedge expires or is terminated early.

Options are measured periodically and, if appropriate, the related allowance is recognised.

Additionally, in 2007, Criteria CaixaCorp arranged hedge transactions on 0.94% of the shares of Telefónica (see Note 6.3). Consequently, the investment in these shares is not exposed to market risk, since the changes in value are offset by the changes in the value of the derivative and, accordingly, the shares continue to be recognised at cost.

j) Revenue and expense recognition

Revenue and expenses are recognised when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises.

However, in accordance with the accounting principle of prudence, the Company only recognises realised profit at year-end, whereas foreseeable contingencies and losses, including possible losses, are recognised as soon as they become known.

Dividends received on financial assets are recognised as revenue in the year in which the dividend distribution is announced by the managing body of an investee.

As a result of its admission to trading, Criteria CaixaCorp incurred a series of expenses, which were recognised in full in the accompanying income statement (see Note 15).

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(5) INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENT

The changes in intangible assets and property, plant and equipment in 2007 were as follows:

31/12/06 Additions Disposals 31/12/07

Total intangible assets

Acquisition cost 1,501 135 (348) 1,288

Accumulated depreciation (1,096) (53) 16 (1,133)

Total intangible assets: 405 82 (332) 155

Land and structures

Acquisition cost 8,881 133 (9,014) -

Accumulated depreciation (12) (58) 70 -

8,869 75 (8,944) -

Fixtures, tools, furniture and other

Acquisition cost 2,225 909 - 3,134

Accumulated depreciation (1,659) (203) - (1,862)

566 706 - 1,272

Total property, plant and equipment

Acquisition cost 11,106 1,042 (9,014) 3,134

Accumulated depreciation (1,671) (261) 70 (1,862)

Total property, plant and equipment: 9,435 781 (8,944) 1,272


The foregoing disposals of property, plant and equipment relate basically to the sale of premises owned by Criteria CaixaCorp to Gestora de MicroFinances, SA (a wholly-owned investee of “la Caixa”) for a total of EUR 10,442 thousand which generated pre-tax profit of EUR 1,497 thousand, which is recognised under “Extraordinary Income and Profit” in the accompanying income statement.

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(6) LONG-TERM INVESTMENTS

The most significant information relating to the shares included under “Investments in Group Companies”, “Investments in Associates” and “Long-term Investment Securities” is included in Appendixes I, II and III, respectively.

The changes in 2007 and 2006 in the various «Long-Term Investments» headings were as follows:

6.1. Investments in Group companies:

Changes in 2007


2007

Capital Increases

and Payments Capital Transfers

Company Acquisitions of Capital Calls Reductions Sales and Other Total

Balance at 2006 year-end 2,249,083

Banco de Europa, SA - - - (67,571) - (67,571)

Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SAU (1) - - - - (35,431) (35,431)

Caixa Capital Risc, SGECR, SA - - - (1,000) - (1,000)

Caixa de Barcelona Seguros de Vida, SA de Seg. y Reaseg. - - - (487,582) - (487,582)

Caixa Preference, SAU - - - (708) - (708)

CaixaRenting, SA 52,000 - - - - 52,000

Catalunya de Valores SGPS, UL (1) - - - - (262,802) (262,802)

Corporación Hipotecaria Mutual, EFC, SA (1) 1,867 - - (4,138) (325) (2,596)

e-"la Caixa", SA - - - (89,055) - (89,055)

Finconsum, EFC, SA 85,000 12,362 - - - 97,362

GestiCaixa, SGFT, SA 1,200 - - - - 1,200

Gestora de Microfinances, SA - - - (300) - (300)

Hodefi, SAS(2) - - - - (323,425) (323,425)

Iniciativa Emprendedor, XXI, SA - - - (10,000) - (10,000)

InverCaixa Gestión, SGIIC, SAU (1) 64 - - - (17,873) (17,809)

Inversiones Autopistas, SL 524,214 - - - 524,214

Inversiones Inmobiliarias Oasis Resort, SL (1) - - - (13,061) (383) (13,444)

Inversiones Inmobiliarias Teguise Resort, SL (1) - - - (12,381) (303) (12,684)

MediCaixa, SA - - - (144) - (144)

Negocio de Finanzas e Inversiones I, SL (1) - 657,940 - - (96,187) 561,753

PMC-Private Management - - - (293) - (293)

Port Aventura, SA 12,840 - - - - 12,840

PromoCaixa, SA - - - (665) - (665)

RentCaixa, SA de Seguros y Reaseguros - - - (64,214) - (64,214)

Holret, SA (formerly Servihabitat, SA) (2) 61 258,639 - - (154,357) 104,343

Suministros Urbanos y Mantenimientos, SA - - - (1,873) - (1,873)

Trade Caixa I, SA - - - (5,000) - (5,000)

Caifor, SA (3) - 33,750 - 118,545 152,295

Crisegen Inversiones, SL (4) 875,602 - - - 875,602

VidaCaixa, SA de Seguros y Reaseguros (3) - - - 56,094 56,094

Other companies 74 - - (1,015) - (941)

Subtotal 1,552,922 962,691 - (759,000) (716,447) 1,040,166


(1) The column “Transfers and Other” relates to the dividends distributed against reserves and/or share premium and deducted from the cost of the investment in each company.

(2) Criteria CaixaCorp subscribed a capital increase at Holret, SA, through the contribution of the full amount of its investment in Hodefi, SAS, at the carrying amount stated in the financial statements of Criteria CaixaCorp.

(3) The investments in Caifor, SA and VidaCaixa, SA de Seguros y Reaseguros were reclassified to Group companies following the acquisition of 50% of the ownership interest held by the Fortis Group.

(4) Crisegen Inversiones, SL (formerly, Fortis AG España Invest, SL) holds a 50% ownership interest in Caifor, SA and was acquired to the Fortis Group.

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Changes in 2006


2006

Capital Capital Transfers

Company Acquisitions Increases Reductions Sales and Other Total


Caixa de Barcelona Seguros de Vida, SA de Seg. y Reaseg. (1) - - - - (361,746) (361,746)

Edicions 62, SA (2) - - (8,390) (10,602) (9,969) (28,961)

Inversiones Inmobiliarias Oasis Resort, SL - - - - (380) (380)

Inversiones Inmobiliarias Teguise Resort, SL - - - - (299) (299)

Inmobiliaria Colonial, SA - - - (127,535) - (127,535)

Other companies 2 - - (15) (2) (15)

Subtotal 2 - (8,390) (138,152) (372,396) (518,936)


(1) The column “Transfers and Other” includes the refund of the share premium by Caixa Barcelona Seguros de Vida, SA de Seguros y Reaseguros, which is consequently deducted from the portfolio cost.

(2) At 31st December 2006, Criteria CaixaCorp held 30% of the share capital of Edicions 62, SA. As a result, it was reclassified from “Investments in Group Companies” to “Investments in Associates”.

As a result of the reorganisation process described in Note 1, Criteria CaixaCorp carried out the following transactions at Group companies:

Banco de Europa, SA: Sale to “la Caixa” of the whole of its 100% holding for EUR 71,800 thousand, giving rise to a pre-tax gain of EUR 4,229 thousand which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

Caixa Capital Risc, SGECR, SA: The Criteria CaixaCorp Group sold all its investments in companies engaging in the seed capital business, and which therefore have an element of institutional support for innovation. As a result, Criteria CaixaCorp sold the whole of the ownership interest in Caixa Capital Risc, SGECR, SA to “la Caixa” for EUR 6,268 thousand, giving rise to a pre-tax gain of EUR 5,268 thousand which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

Caixa de Barcelona Seguros de Vida, SA de Seguros y Reaseguros (CaixaVida): In March 2007, Criteria CaixaCorp sold its full ownership interest in CaixaVida to “la Caixa” for EUR 318,794 thousand. This transaction gave rise to a loss before tax of EUR 168,788 thousand, which is recognised under “Losses on Disposal of Investments” in the accompanying income statement.

Caixa Preference, SAU: Criteria CaixaCorp sold all of its 100% holding in Caixa Preference, SAU to “la Caixa” for EUR 2,688 thousand, giving rise to a pre-tax gain of EUR 1,980 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

CaixaRenting, SA: Criteria CaixaCorp acquired (see Note 1) 100% of CaixaRenting, SA for EUR 52,000 thousand. The total interest held by Criteria CaixaCorp in CaixaRenting, SA at 31st December 2007 is 100%.

Corporación Hipotecaria Mutual, EFC, SA: At the beginning of 2007 Criteria CaixaCorp acquired 30% of Corporación Hipotecaria Mutual, EFC, SA, which was

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owned by minority shareholders, for EUR 1,867 thousand. Subsequently, as part of the reorganisation process preceding its admission to trading, Criteria CaixaCorp sold all of its full ownership interest to “la Caixa” for its carrying amount, EUR 4,138 thousand.

e-“la Caixa”, SA: Criteria CaixaCorp sold all of its 100% holding in e-“la Caixa”, SA to “la Caixa” for EUR 87,187 thousand, giving rise to a loss before tax of EUR 197 thousand which is recognised under “Losses on Disposal of Investments” in the accompanying income statement.

Finconsum, EFC, SA: In February 2007, Criteria CaixaCorp acquired from Sofinco 45% of Finconsum, EFC, SA for EUR 38,250 thousand. Subsequently, it acquired from “la Caixa” the remaining 55% for EUR 46,750 thousand. On 20th December 2007, a capital increase of EUR 12,362 thousand was made, paid in full by Criteria CaixaCorp, which at 31st December 2007 had a 100% ownership interest in this company.

Gesticaixa, SGFT, SA: Criteria CaixaCorp acquired from “la Caixa” its 6% shareholding in Gesticaixa, SGFT, SA for EUR 1,200 thousand. Criteria CaixaCorp had a 100% ownership interest in GestiCaixa, SGFT, SA at 31st December 2007.

Gestora de Microfinances, SA: Criteria CaixaCorp sold all of its 100% holding in Gestora de Microfinances, SA to “la Caixa” for EUR 264 thousand, giving rise to a loss before tax of EUR 36 thousand, which is recognised under “Losses on Disposal of Investments” in the accompanying income statement.

Hodefi, SAS: Criteria CaixaCorp subscribed a non-monetary capital increase in Holret, SA for EUR 247,160 thousand (of which EUR 61,796 thousand were capital and the rest was share premium) through the contribution of all of its ownership interest in Hodefi, SAS. The cost value recognised by Criteria CaixaCorp for this non-monetary contribution was the carrying amount of these shares per Criteria CaixaCorp’s books.

Holret, SA (formerly Servihabitat, SA): Criteria CaixaCorp subscribed the entire capital increase in Holret, SA for EUR 247,160 thousand (EUR 61,796 thousand in capital and the rest as share premium), through the non-monetary contribution of 2,150,000 shares in Hodefi, SA representing 85.08% of its share capital. The cost value recognised by Criteria CaixaCorp for this non-monetary contribution was the carrying amount of these shares per Criteria CaixaCorp’s books, which amounted EUR 258,639 thousand.

Subsequently, Holret, SA distributed dividends of which a total sum of EUR 154,357 thousand was recognised as a deduction from the cost of the investment.

The Criteria CaixaCorp Group owned 100% of the shares of Holret, SA at 31st December 2007.

Iniciativa Emprendedor XXI, SA: Criteria CaixaCorp sold all of its 100% holding in Iniciativa Emprendedor XXI, SA to “la Caixa” for EUR 9,729 thousand, giving rise to a pre-tax gain of EUR 329 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

Inversiones Autopistas, SL: Criteria CaixaCorp acquired from “la Caixa” 50.10% of Inversiones Autopistas, SL, which held a 7.75% ownership interest in Abertis

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Infraestructuras, SA for EUR 524,214 thousand. The total interest held by Criteria CaixaCorp in this company at 31st December 2007 is 50.10%.

Inversiones Inmobiliarias Oasis Resort, SL and Inversiones Inmobiliarias Teguise Resort, SL: Criteria CaixaCorp sold to “la Caixa” all its holdings in these companies, both of which are 60% owned by Criteria CaixaCorp. This sale amounted to a combined total of EUR 26,567 thousand and gave rise to a pre-tax gain of EUR 1,125 thousand.

Negocio de Finanzas e Inversiones I, SL: On 29th March 2007, Criteria CaixaCorp subscribed the entire capital increase in Negocio de Finanzas e Inversiones I, SL for EUR 297,940 thousand (of which EUR 100,000 thousand were capital and the rest was share premium), through the non-monetary contribution of 11,470,159 shares of Atlantia, S.p.A. (formerly Autostrade, S.p.A.), representing 2.01% of share capital, of 367,548 shares of Boursorama, SA, representing 0.43% of share capital and 14,385,783 shares of Banco Comercial Portugues, SA, representing 0.40% of share capital. The cost value recognised by Criteria CaixaCorp for this non-monetary contribution was the carrying amount of these shares per Criteria CaixaCorp’s books.

Subsequently, Negocio de Finanzas e Inversiones I, SL distributed dividends, of which a sum of EUR 96,187 thousand was recognised by Criteria CaixaCorp as a deduction from the cost of the investment.

On 5th November 2007, Criteria CaixaCorp subscribed a new capital increase (with a monetary contribution) for a nominal amount of EUR 120,000 thousand, with a share premium of EUR 240,000 thousand.

PromoCaixa, SA: Criteria CaixaCorp sold to “la Caixa” all of its 99.99% holding in PromoCaixa, SA for EUR 4,058 thousand, giving rise to a pre-tax gain of EUR 3,393 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

RentCaixa, SA: Criteria CaixaCorp sold to “la Caixa” all of its 100% holding in RentCaixa, SA for EUR 65,821 thousand, giving rise to a pre-tax gain of EUR 1,607 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

Suministros Urbanos y Mantenimientos, SA: Criteria CaixaCorp sold all of its 51.00% holding in Suministros Urbanos y Mantenimientos, SA for EUR 1,997 thousand, giving rise to a pre-tax gain of EUR 124 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

TradeCaixa I, SA: Criteria CaixaCorp sold all of its 99.99% holding in TradeCaixa I, SA for EUR 6,667 thousand, giving rise to a pre-tax gain of EUR 1,667 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

Additionally, the following transactions were made with third parties outside the Group:

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Caifor, SA, Crisegen Inversiones, SL (formerly Fortis AG España Invest, SL) and VidaCaixa, SA de Seguros y Reaseguros: On 11th July 2007, Criteria CaixaCorp and Fortis Group reached an agreement whereby the former company would acquire Fortis’ holding in Caifor, SA (50%) and in SegurCaixa, SA de Seguros y Reaseguros (20%), through the acquisition by Criteria CaixaCorp of the holding company Fortis AG España Invest, SL (owner of 50% of Caifor, SA), and the subsequent acquisition by Caifor, SA of the 20% holding in SegurCaixa, SA de Seguros y Reaseguros, owned by the holding company Fortis España Invest, SL. On 12th November 2007, following the approval of the transaction by the related authorities, 50% of Caifor, SA’s shares were acquired, through the purchase of 100% of Fortis AG España Invest, SL, by means of a payment of EUR 875,602 thousand. In the context of this transaction, the Criteria CaixaCorp Group now owns 100% of Caifor, SA and its subsidiaries VidaCaixa, SA de Seguros y Reaseguros, SegurCaixa, SA de Seguros y Reaseguros and AgenCaixa, SA, and, as a result, reclassified the interests held in VidaCaixa, SA de Seguros y Reaseguros and Caifor, SA under “Investments in Associates and Jointly Controlled Entities” to “Investments in Group Companies”. On 20th December 2007, Criteria CaixaCorp paid EUR 33,750 thousand of capital calls of Caifor, SA.

On 12th December 2007, the change of Company name from Fortis AG España Invest, SL to Crisegen Inversiones, SL was approved.

Port Aventura, SA: Criteria CaixaCorp acquired an additional 3.14% interest in Port Aventura, SA for EUR 12,840 thousand. The total interest held by the Criteria CaixaCorp Group in Port Aventura, SA at 31st December 2007 is 97.12%.

Inmobiliaria Colonial, SA: In 2006 Criteria CaixaCorp sold all of its 18.25% direct holding in the capital of Inmobiliaria Colonial, SA (the total holding sold by the CaixaHolding Group was 39.54%), after accepting Grupo Inmocaral, SA’s takeover bid for all the share capital, at a price of EUR 63 per share. This gave rise to a pre-tax gain of EUR 558,803 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement for 2006.

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6.2. Investments in associates and jointly controlled entities:

Changes in 2007


2007

Transfers

Company Acquisitions Sales and Other Total


Abertis Infraestructuras, SA 1,786,247 - - 1,786,247

Banco BPI, SA 311,531 - - 311,531

Boursorama, SA (2) 1,219 - (1,219) -

Caifor, SA (1) (118,545) (118,545)

Edicions 62, SA - (9,969) - (9,969)

Gas Natural, SDG, SA 40,185 - - 40,185

Inforsistem, SA - (99) - (99)

Sociedad General de Aguas de Barcelona, SA 72,182 - - 72,182

VidaCaixa, SA de Seguros y Reaseguros (1) - - (56,094) (56,094)

Subtotal 2,211,364 (10,068) (175,858) 2,025,438


(1) The amount of the invested held in Caifor, SA and VidaCaixa, SA de Seguros y Reaseguros was reclassified to “Investments in Group Companies” following the acquisition of the additional 50% holding from the Fortis Group.

(2) The column “Transfers and Other” reflects the net sum of EUR 2,806 thousand relating to Boursorama, SA transferred from the heading “Long-term Investment Securities” to “Investments in Associates”, and EUR 4,025 thousand relating to the subsequent disposal thereof following its contribution in the capital increase at Negocios de Finanzas e Inversiones I, SL.

Changes in 2006


2006

Transfers

Company Acquisitions Sales and Other Total


Banco BPI, SA 381,099 - - 381,099

Edicions 62, SA (1) - - 9,969 9,969

Subtotal 381,099 - 9,969 391,068


(1) At 31st December 2006, Criteria CaixaCorp held 30% of the share capital of Edicions 62, SA. As a result, it was reclassified from “Investments in Group Companies” to “Investments in Associates”.

Abertis Infraestructuras, SA: As part of the Group’s reorganisation process, Criteria CaixaCorp acquired from “la Caixa” (see Note 1) a 12.79% ownership interest in Abertis Infraestructuras, SA for EUR 1,704,142 thousand. Subsequently, the Group acquired an additional holding of 0.594% on the stock market for a total amount of EUR 82,105 thousand. At 31st December 2007, the Criteria CaixaCorp Group's investment in Abertis Infraestructuras, SA was 21.12% and its controlling interest stood at 24.99% (comprising the total investment held through subsidiaries).

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Banco BPI, SA: Criteria CaixaCorp acquired from the subsidiary Catalunya de Valores SGPS, UL a 6.45% holding in Banco BPI, SA for EUR 310,381 thousand. Criteria CaixaCorp acquired a further 0.03% interest in Banco BPI, SA for EUR 1,150 thousand. Criteria CaixaCorp’s direct investment in Banco BPI, SA at 31st December 2007 is 15% and the Criteria CaixaCorp Group’s total investment is 25.02%.

In 2006, following prior authorisation from the Bank of Portugal to hold more than a 20% ownership in Banco BPI, SA, the Criteria CaixaCorp Group made an investment of EUR 381,099 thousand, representing a holding of 8.52%.

Boursorama, SA: Criteria CaixaCorp acquired 0.42% of Boursorama, SA for EUR 3,997 thousand. Hence, the Criteria CaixaCorp Group’s investment in Boursorama, SA exceeds 20% (it stood at 20.44% at 31st December 2007) and this company was classified as an associate. The direct interest held by Criteria CaixaCorp in Boursorama, SA was subsequently contributed to Negocio de Finanzas e Inversiones I, SL by means of a capital increase (see section 6.1 of this Note).

Edicions 62, SA: Criteria CaixaCorp sold to “la Caixa” all of its 30% holding in Edicions 62, SA for EUR 9,479 thousand, giving rise to a pre-tax gain of EUR 3,326 thousand which is recognised under “Gains on Disposal of Investments” in the accompanying income statement.

In 2006 Criteria CaixaCorp, Editorial Planeta, SA and Encicopedia Catalana, SA entered into a framework investment agreement whereby Criteria CaixaCorp reduced its holding in the publishing group Edicions 62 from 88.91% to 30%. As of that date, this holding was reclassified from “Investments in Group Companies” to “Investments in Associates”.

Gas Natural, S.D.G., SA: Criteria CaixaCorp, as part of the Group’s reorganisation process, acquired from “la Caixa” (see Note 1) a 0.2% interest in Gas Natural S.D.G., SA for EUR 40,185 thousand. The Criteria CaixaCorp Group’s total investment in Gas Natural SDG, SA at 31st December 2007 is 35.53%.

Sociedad General de Aguas de Barcelona, SA (Agbar): On 10th April 2007, Hisusa and its two shareholders, Suez Environnement, SA (and its subsidiary Suez Environnement España SLU) and Criteria CaixaCorp, notified the Spanish National Securities Market Commission, through a relevant event communication, supplemented by a further relevant event communication dated 13th April, 2007, its intention to jointly present a takeover bid on all the shares of Agbar not controlled by them, at a price of EUR 27.65 per share. After having obtained the related authorisations by the competent authorities, the tender offer prospectus was filed at the Spanish National Securities Market Commission on 27th December 2007, and the takeover bid was outstanding at 31st December 2007. Earlier, on 21st November, Hisusa, SA, Suez Environnement, SA and Criteria CaixaCorp notified the Spanish National Securities Market Commission by means of a further relevant event communication, regarding the purchase from Torreal, SA, second main shareholder of Agbar, of its 6.671% holding therein, arising from its irrevocable commitment to transfer its shares in the framework of the takeover bid. With this purchase, the Criteria Caixa Corp Group and its shareholder Suez Environnement, SA obtained a joint holding of 56.46% in Agbar, and resolved to jointly manage and exercise the future control over Agbar. The payment

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made by Criteria CaixaCorp for the acquisition of the 1.75% direct holding in Agbar from Torreal, SA amounted to EUR 72,182 thousand (see Note 18).

6.3. Long-term investment securities

Changes in 2007


2007

Capital Transfers

Company Acquisitions Increases Sales and Other Total


Atlantia, SpA (formerly Autostrade, SpA) 2,100 - - (257,096) (254,996)

Banco Comercial Portugués, SA 11,307 - - (36,820) (25,513)

Bolsas y Mercados Españoles, SHMSF, SA 122,561 - - - 122,561

Boursorama, SA 2,778 - - (2,806) (28)

Catalana d'iniciativa SCR, SA - - (1,404) - (1,404)

Directo, Inc - - (2,459) - (2,459)

Invercat Exterior FCR - - (1,745) - (1,745)

Repsol YPF, SA 53,191 - - - 53,191

Telefónica, SA 1,441,213 - - - 1,441,213

4D Neuroimaging - - (4,409) - (4,409)

Other companies - - (1,193) (913) (2,106)

Subtotal 1,633,150 - (11,210) (297,635) 1,324,305


(1) The column “Transfers and Other” includes the disposals of Atlantia, SpA (formerly Autostrade, SpA) and Banco Comercial Portugués, SA, since they were contributed in the capital increase at Negocios de Finanzas e Inversiones I, SL subscribed by Criteria CaixaCorp. This column also includes EUR 2,806 thousand, relating to Boursorama, SA, for the transfer from “Long-term Investment Securities” to “Investments in Associates”.

(2) Transactions performed in full or in part in the company reorganisation process prior to the Company’s admission to trading on the stock market (see Note 1).

Changes in 2006


2006

Capital Transfers

Company Acquisitions Increases Sales and Other Total


Autostrade, SpA 254,996 - - - 254,996

Banco Comercial Portugués, SA 25,513 - - - 25,513

Banco de Sabadell, SA - - (466,050) - (466,050)

Boursorama, SA 28 - - - 28

Endesa, SA - - (220,975) - (220,975)

Suez, SA - - (516,120) - (516,120)

Telefónica, SA 134,657 - - - 134,657

Other companies 260 1,179 - - 1,439

Subtotal 415,454 1,179 (1,203,145) - (786,512)


Atlantia, SpA (formerly Autostrade, SpA): As discussed above, Criteria CaixaCorp contributed to Negocio Finanzas e Inversiones I, SL all of its 2.01% equity interest in Atlantia, S.p.A. for EUR 257,096 thousand, acquired through an investment of EUR 254,996 thousand made in 2006 relating to 1.99% of the share capital, and a further investment of EUR 2,100 thousand made in 2007 relating to an additional 0.02% of

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the share capital. Subsequently, during the 2007 financial year, Negocio Finanzas e Inversiones I, SL sold this holding.

Banco Comercial Portugués, SA (BCP, SA): In February and March 2007, Criteria CaixaCorp acquired an additional 0.115% interest in BCP, SA for EUR 11,307 thousand. In March, Criteria CaixaCorp contributed its entire equity interest in BCP, SA, which stood at 0.40%, in a capital increase in Negocio Finanzas e Inversiones I, SL. Subsequently, Negocio de Finanzas e Inversiones I, S.L. has sold 0.142% of this holding. At 31st December 2007, the Criteria CaixaCorp Group’s holding in BCP, SA is 1.03%.

In 2006 Criteria CaixaCorp made an investment of EUR 25,513 thousand, which represented an ownership interest of 0.28% in the share capital of BCP.

Bolsas y Mercados Españoles, SHMSF, SA (BME): Criteria CaixaCorp acquired from “la Caixa” all of its 3.53% holding in BME for EUR 122,561 thousand. At 31st December 2007, the Criteria CaixaCorp Group’s holding in Bolsas y Mercados Españoles, SHMSF, SA was 3.53%.

Catalana d’Iniciatives, SCR, SA, Directo Inc. and Invercat Exterior F.C.R: Criteria CaixaCorp sold all of its holding in these companies for EUR 2,005 thousand, EUR 11 thousand and EUR 1,605 thousand, respectively. The combined profit before tax earned through these sales amounted to EUR 613 thousand and was recognised under “Gains on Disposal of Investments” in the accompanying income statement.

Repsol-YPF, SA: Criteria CaixaCorp acquired an additional 0.17% holding in Repsol-YPF, SA for EUR 53,191 thousand. At 31st December 2007, Criteria CaixaCorp’s direct holding in Repsol-YPF, SA stood at 9.27%, while the Group’s total holding stood at 12.67%.

Telefónica, SA: In 2007 Criteria CaixaCorp paid EUR 715,061 thousand for the purchase of shares of Telefónica, SA, of which EUR 310,928 thousand were acquired from “la Caixa” as part of the Group’s reorganisation process (see Note 1).

On the other hand, on 27th June 2007, Criteria CaixaCorp acquired an additional 0.94% equity interest in Telefónica for EUR 726,152 thousand, thereby optimising the net financial return on the investment. This investment was hedged through derivative hedging instruments, through Equity Linked Swaps, and accordingly, it is not subject to market risk and is recognised at cost.

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Following are the main terms and conditions of the equity swap agreements arranged on the shares of Telefónica:

Company Number of shares

% of share capital

Reference price Notional value

Maturity date

Société Générale 25,000,000

0.5237% EUR 16.15 per share EUR 403,750,000

25th July 2008

Morgan Stanley & Co. International Plc.

10,000,000

0.2095% EUR 16.12 per share EUR 161,200,000

28th July 2008

Goldman Sachs International

10,000,000

0.2095% EUR 16.12 per share EUR 161,200,000

28th July 2008

The Criteria CaixaCorp Group’s aggregate holding in Telefónica SA at 31st December 2007 was 5.48%.

4D-Neuroimaging: Criteria CaixaCorp sold in 2007 its entire holding in 4D-Neuroimaging at its underlying carrying amount.

Banco de Sabadell, SA: In 2006 Criteria CaixaCorp sold all its ownership interest (13.83%) in Banco de Sabadell, giving rise to a pre-tax gain of EUR 928,790 thousand. The total gain was recognised under “Gains on Disposal of Investments” in the accompanying income statement for 2006.

Endesa, SA: On 3rd July 2003, Caixa Finance, BV launched an issue, guaranteed by ”la Caixa”, of EUR 847,600 thousand in bonds convertible into Endesa, SA ordinary shares. This issue, consisting of 16,952 bonds of EUR 50,000 each maturing on 3rd July 2006, bore interest at 0.25% and the bondholders may exchange the bonds for Endesa, SA ordinary shares until maturity of the issue at a price of EUR 16 per share. This exchange may be made at a rate of 3,125 Endesa, SA ordinary shares per bond or for the equivalent cash value.

In 2006 the bondholders exercised the exchange of 3,387 bonds for 10,584,375 Endesa, SA ordinary shares, at the fixed price of EUR 16 per share.

Also, in 2006, following expiry of the convertible bond issue, CaixaHolding sold all the remaining investment, 0.004% of the share capital of Endesa, SA, giving rise to a pre-tax gain of EUR 395 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement for 2006.

Suez, SA: In 2006 Criteria CaixaCorp sold its entire 1.36% ownership interest in Suez, SA giving rise to a pre-tax gain of EUR 141,942 thousand, which is recognised under “Gains on Disposal of Investments” in the accompanying income statement for 2006.

Given that 1.11% of the ownership interest in Suez, SA was sold to Negocio de Finanzas e Inversiones I, SL, a Criteria CaixaCorp Group company, and that, at 31st December 2006, this company had not sold to non-Group third parties a shareholding equivalent to 1.06% of Suez, SA, Criteria CaixaCorp recognised a provision of EUR 110,158 thousand with a credit to “Provisions for Contingencies and Charges” in the

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accompanying balance sheet for 2006. In January 2007, the Group sold all its remaining ownership interest and, accordingly, it reversed the “Provisions for Contingencies and Charges” recognised, with a credit to “Gains on Disposal of Investments” in the accompanying income statement for 2007.

The changes in the investment valuation allowances were as follows:

2007 2006

Balance at beginning of year 139,359 301,387

Add:

Provision with a charge to profit

for the year 12,058 14,503

Less:

Allowances released with a credit

to profit for the year (32,866) (116,076)

Disposals due to sales (78,122) (60,455)

Balance at end of year 40,429 139,359


The breakdown of “Allowances Released” is as follows:

2007 2006

Suez, SA - 101,573

Atlantia, SpA 7,088 -

Hodefi, SAS 13,900 -

Port Aventura, SA 11,340 -

Hotel Caribe Resort, SL 446 -

Other 92 14,503

Total 32,866 116,076


The breakdown of “Disposals Due to Sales” is as follows:

2007 2006

Endesa, SA - 54,119

Edicions 62, SA 3,814 6,336

Hodefi, SAS 64,787 -

4-D Neuroimaging 4,409 -

Directo Inc 2,459 -

e-"la Caixa", SA 1,670 -

Other 983 -

Total 78,122 60,455


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(7) RECEIVABLE FROM GROUP COMPANIES

The breakdown of “Receivable from Group Companies” is as follows:


Receivable from Group Companies

Long-Term Short-Term

2007 2006 2007 2006

"la Caixa" 134,320 189 - 28,882

Other receivables from Group companies - - 1,013 549,378

Total 134,320 189 1,013 578,260

7.1. Long-Term Receivables:

The long-term receivable from “la Caixa” at 31st December 2007 relates to the estimated 2007 income tax payment, since Criteria CaixaCorp files consolidated tax returns together with its majority shareholder (see Note 13). It is estimated that the settlement from “la Caixa” of 2007 income tax will be made in January 2009, when the corresponding amount will be paid.

7.2. Short-Term Receivables:

The balance of “Other Receivables from Group Companies” at 31st December 2007 was mostly paid at the beginning of 2008 by the respective debtors.

The short-term receivable from “la Caixa” at 31st December 2006, included the income tax payment for 2005 amounting to EUR 28,863 thousand, which was pending collection at that date but was collected at the beginning of 2007.

At 31st December 2006, the short-term balance of “Other Receivables from Group Companies” includes EUR 539,425 thousand relating to the amount pending collection from Negocio de Finanzas e Inversiones I, SL for the sale of the 1.11% ownership interest in Suez, SA. This amount was collected in full in January 2007.

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(8) SHORT-TERM INVESTMENTS

The breakdown of “Short-Term Investments” on the asset side of the accompanying balance sheet is as follows:

2007 2006

Loans to Group companies and associates 356,134 9,800

"Equity swap" guarantee fund deposit 291,230 -

Dividends receivable 144,205 174,097

Interest receivable 2,378 2,712

Other deposits 2,225 -

Total 796,172 186,609


“Loans to Group Companies and Associates” relate basically to:

� Loan granted to Hisusa-Holding de Infraestructuras de Servicios Urbanos, SA on 20th November 2007 amounting to EUR 99,874 thousand to finance the purchase of 7,371,613 Agbar shares from Torreal, SA, within the framework of the takeover bid described in Note 6. The loan matures on 20th November 2008, and earns monthly interest tied to one-day Euribor plus 30 basis points. At 31st December 2006, this heading corresponds a short-term loan granted to Hisusa-Holding de Infraestructuras de Servicios Urbanos, SA which earned interest tied to one-month Euribor plus 30 basis points. This loan was repaid at the beginning of 2007.

� Loan granted to Crisegen Inversiones, SL on 20th December 2007, amounting to EUR 6,260 thousand and maturing on 30th June 2008, which earns monthly interest tied to one-month Euribor plus 30 basis points.

� Loan granted to Negocio de Finanzas e Inversiones I, SL, on 27th December 2007, amounting to EUR 250,000 thousand and maturing on 31st March 2008, which earns monthly interest tied to one-month Euribor plus 30 basis points.

The “Equity Swap Guarantee Fund Depostis” relate to the three equity swap agreements arranged on the 45,000,000 shares of Telefónica (see Note 6), to provide for the creation of a guarantee fund deposit which adapts, throughout the life of the derivative, following contributions either by the counterparties or by Criteria CaixaCorp, in line with the change in the market value of the shares of Telefónica. This deposit guarantees the availability of funds at all times for the two parties in the event of the partial or total termination of the agreement in advance or on the expiry date. The agreement also establishes an interest rate tied to the daily EONIA paid monthly in arrears.

The finance income accrued thereon, amounting to EUR 2,604 thousand, is recognised under “Other Interest and Similar Income” in the income statement.

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The detail of the dividends receivable at 31st December 2007 and 2006 is as follows:

Company 2007 2006

Gas Natural, SDG, SA 63,658 54,440

Repsol YPF, SA 56,548 39,998

Caifor, SA - 43,500

Repinves, SA 20,719 16,299

Catalunya de Valores, SGPS, UL - 16,000

Bolsas y Mercados Españoles, SHMSF, SA 2,823 -

Other 457 3,860

Total 144,205 174,097


Almost the whole amount of dividends outstanding at 31st December 2007 and 2006, had been paid in January 2008 and 2007, respectively.

(9) LIQUID ASSETS

At 31st December 2007, the balance of “Liquid Assets” in the accompanying balance sheet relates, basically, to cash deposited in demand deposits at “la Caixa”. At 31st December 2006, the balance of “Liquid assets” in the accompanying balance sheet relates basically to cash deposited in a credit facility arranged by Criteria CaixaCorp with “la Caixa” (see Note 12).

The interest rate on the credit facility debit and credit balances is one-day Euribor less 25 basis points and one-month Euribor plus 30 basis points, respectively.

At 31st December 2007, the Company had drawn down EUR 1,589,330 thousand against a long-term credit facility, which were recognised under “Long-Term Payables to Group Companies” in the accompanying balance sheet (see Note 12). In 2006 no amount had been drawn down against the credit facility.

The interest rate earned in 2007 and 2006 on the cash deposited in this credit facility amounted to EUR 63,888 thousand and EUR 17,043 thousand, respectively, and was recognised under “Other Interest and Similar Income” in the accompanying income statement (see Note 15). At 31st December 2007 and 2006, EUR 12 thousand and EUR 2,676 thousand, respectively, had not yet been collected and were recognised under “Short-Term Investments” in the accompanying balance sheets.

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(10) SHAREHOLDERS’ EQUITY

The changes in “Equity” accounts in 2007 and 2006 were as follows:


Interim Total

Share Share Legal Voluntary Profit for Dividend Paid Final Shareholders'

Capital Premium Reserve Reserve the Year During the Year Dividend Equity

Balance at 31/12/06 2,629,871 5,999,152 525,974 622,218 1,833,198 (500,000) - 11,110,413

Distribution of profit - - - 1,168,198 (1,833,198) 500,000 165,000 -

Prior years' final dividend - - - - - (165,000) (165,000)

Distribution of share premium and voluntary reserve - (1,403,239) - (1,790,416) - - - (3,193,655)

Capital increases:

Initial public offering 657,500 2,794,375 - - - - - 3,451,875

Green-shoe 75,519 320,956 - - - - - 396,475

Profit for the year - - - - 2,316,047 - - 2,316,047

Interim dividend in the current year - - - - - (1,960,887) - (1,960,887)

Balance at 31/12/07 3,362,890 7,711,244 525,974 - 2,316,047 (1,960,887) - 11,955,268


Interim Total

Share Share Legal Voluntary Profit for Dividend Paid Final Shareholders'

Capital Premium Reserve Reserve Year During the Year Dividend Equity

Balance at 31/12/05 2,629,871 5,999,152 525,974 - 1,279,218 (507,000) - 9,927,215

Distribution of profit - - - 622,218 (1,279,218) 507,000 150,000 -

Prior years' final dividend - - - - - - (150,000) (150,000)

Profit for the year - - - - 1,833,198 - - 1,833,198

Interim dividend in the current year - - - - - (500,000) - (500,000)

Balance at 31/12/06 2,629,871 5,999,152 525,974 622,218 1,833,198 (500,000) - 11,110,413

10.1. Share capital

At 31st December 2006, share capital consisted of 2,629,870,800 fully subscribed and paid registered ordinary shares wholly owned by “la Caixa”.

On 7th June 2007, the Annual General Assembly of “la Caixa” approved the admission to trading of Criteria Caixa Corp (see Note 1) and authorised the sale of shares in this Company up to a limit of 49% of its share capital. On 19th July 2007, the Extraordinary General Assembly of “la Caixa” ratified these resolutions, in particular with regard to the broadening of the shareholder structure through Initial Public Offering and/or a Public Offering (existing shares). As a result, on 10th October 2007, Criteria CaixaCorp was admitted to trading, issuing 657,500,000 new shares of one euro (EUR 1) par value each. The initial price of the share was established at EUR 5.25, giving rise to a share premium of EUR 2,794,375 thousand. Subsequently, on 7th November 2007 the “green-shoe” subscription option was partially exercised by the Global Coordinators on 75,519,037 additional shares, which gave rise to a new capital increase of EUR 75,519 thousand and a share premium of EUR 320,956 thousand.

Following this operation, “la Caixa” has a 78.03% ownership interest in the share capital of Criteria CaixaCorp.

At 31st December 2007, share capital consisted of 3,362,889,837 fully subscribed and paid shares. All the shares are in the form of entries, of EUR 1 par value each.

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10.2. Share premium

The “Share Premium” arose as a result of the capital increase carried out on 31st July 2000 (see Note 1).

The Consolidated Spanish Companies Law expressly permits the use of the share premium account balance to increase capital and does not establish any specific restrictions as to its use.

On 21st June and 30th July 2007, the respective Annual General Meeting of Criteria CaixaCorp resolved to distribute EUR 403,240 thousand and EUR 1,000,000 thousand, respectively, out of “Share Premium”.

Subsequently, in the aforementioned Initial Public Offering as described in the preceding section “Share Capital”, the share premium resulting from the successive capital increases totalled EUR 3,115,331 thousand.

10.3. Legal reserve

Under the Consolidated Spanish Companies Law, 10% of net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of the share capital.

The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount. Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose.

At 31st December 2006, the legal reserve recognised by the Company had reached the stipulated level.

As indicated in Note 3, the proposal for the distribution of profit for 2007 includes the distribution of EUR 146,604 thousand to the legal reserve, thereby, reaching the established minimum of 20% of share capital.

10.4. Voluntary reserves

On 21st June 2007, the shareholders at the Annual General Meeting of Criteria CaixaCorp approved the distribution of a dividend of EUR 1,790,416 thousand out of the Company’s voluntary reserves.

10.5. Treasury shares subscribed and paid

Within the framework of the admission to trading, Criteria CaixaCorp resolved to provide a share-based remuneration incentive for those employees serving prior to 31st December 2006. On 10th October 2007, the day Criteria CaixaCorp was admitted to trading, Criteria CaixaCorp purchased on the stock market 17,200 treasury shares of EUR 5.25 par value

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(initial price per share) which were delivered within a few days in full and free of charge to all the employees fulfilling the agreed terms and conditions (see Note 15).

At 31st December 2007, Criteria CaixaCorp had no treasury shares.

(11) PROVISIONS FOR CONTINGENCIES AND CHARGES

The changes under “Provisions for Contingencies and Charges” in the accompanying balance sheets for 2007 and 2006 were as follows:

2007 2006

Beginning balance 183,327 71,780

Add:

Period provision charged to

2007 profit - 111,547

Less:

Provisions released with

a credit to 2007 profit (143,470) -

Amount used (30,134) -

Ending balance 9,723 183,327


In 2005 Criteria CaixaCorp sold its ownership interests in Occidental Hotels Management, BV, Soteltur, SL, Soteltur Internacional BV, Tamar Internacional SARL and Boiacica - Consultadoria e Serviços, LDA to the subsidiary Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SAU. Also, Criteria CaixaCorp provided a price guarantee to Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SAU for up to the difference between the total price for which these ownership interests were sold and the cost thereof per Criteria CaixaCorp’s accounting records. As a result, Criteria CaixaCorp recognised under this heading a provision for the total gain after tax obtained on the aforementioned sales, amounting to EUR 51,780 thousand, from the proceeds generated by the transaction. In 2007, Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SAU sold the interests to third parties, and Criteria CaixaCorp released EUR 21,646 thousand of the provision for “Gains on Disposals of Investments”. Additionally, it used the remaining provision of EUR 30,134 thousand to record the account payable to Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SAU arising from the price guarantee agreed. This payable is recognised under “Payable to Group Companies, Associates and Jointly Controlled Entities” in the accompanying balance sheet and has been settled in January 2008.

In 2006 Criteria CaixaCorp sold its entire 1.36% ownership interest in Suez, SA to Negocio Finanzas e Inversiones I, SL. At 31st December 2006, this company had not sold to third parties outside the Group an ownership interest equivalent to 1.05% of Suez, SA and as a result, Criteria CaixaCorp reversed EUR 110,158 thousand of the proceeds from the sale of its ownership interest to Negocio Finanzas e Inversiones I, with a credit to “Provisions for

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Contingencies and Charges”. In January 2007, the Criteria CaixaCorp Group sold its entire remaining interest in Suez, SA. Accordingly, the aforementioned amount was reversed with a credit to “Gains on Disposal of Investments” in the accompanying income statement and has been settled in January 2008.

(12) PAYABLE TO GROUP COMPANIES

12.1. Long-term payables to Group companies:


Accounts payable to Group companies Long-Term

2007 2006

Other outstanding payables to "la Caixa" - 211,458

Deferred taxes payable to "la Caixa" 15,426 14,750

Credit facility with "la Caixa" (see Note 9) 1,589,330 -

Total 1,604,756 226,208

The long-term balance payable to “la Caixa” at 31st December 2007 corresponds to the amount drawndown against the credit facilities and the deferred taxes payable to “la Caixa” (see Note 13).

In 2007 the Company had a EUR 2,100 million credit facility with “la Caixa”, maturing on 30th June 2007, which was renewed on 27th June, increasing the limit to EUR 2,500 million maturing on 30th June 2009. On 30th July 2007, a new credit facility agreement was entered into, maturing on 31st December 2007 with a limit of an additional EUR 2,900 million, which was renewed on 28th December 2007 with the same limit and maturing on 30th June 2008. The interest rate on both credit facilities for the debit balances is 1-day Euribor less 25 basis points and on credit balances is 1-month Euribor plus 30 basis points. Criteria CaixaCorp has drawndown no balance against the short-term credit facility at 31st December 2007.

The interest borne in 2007 on the balances drawndown against the credit facilities amounted to EUR 54,446 thousand, which is recognised under “Finance and Similar Costs” in the accompanying income statement (see Note 15). At 31st December 2007, EUR 5,145 thousand of the interest borne remained unpaid and is recorded under “Current Liabilities - Bank Borrowings” in the accompanying balance sheet. In 2006 no amount had been drawn down against the credit facility.

At 31st December 2006, the balance of “Other Payables Outstanding to “la Caixa” at Long-Term” corresponded to the 2006 income tax payment.

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12.2. Short-term payables to Group companies:

Bank borrowings:

The balance of short-term bank borrowings relates to the interest payable to “la Caixa” in relation to drawdowns against the two credit facilities arranged (see Note 12.1).

To Group companies, associates and jointly controlled entities:


Accounts payable to Group companies Short-Term

2007 2006

Interim dividend payable to "la Caixa" 78,722 200,000

Amount payable to "la Caixa" for 2006 income tax 214,260 -

Other payables to Group companies 30,226 100,076

Total 323,208 300,076

The amount recorded under “Interim Dividend Payable to "la Caixa" relates to the interim dividend approved on 13th December 2007 (see Note 3), for the portion relating to the majority shareholder.

“Amount Payable to "la Caixa" for 2006 Income Tax” includes the balance payable to “la Caixa” for the 2006 income tax payment settled in January 2008.

“Other Payables to Group Companies” includes EUR 30,134 thousand payable to Caixa Capital Desarrollo, SCR de Régimen Simplificado, SAU, arising from the price guarantee granted in the sale of the OHM Group, as detailed in Note 11. At 31st December 2006, various accounts payable to Group companies were included which were all settled with the related creditor in January 2007.

(13) TAX MATTERS

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

Criteria CaixaCorp and some of its subsidiaries form part of the “la Caixa” consolidated tax Group. The Criteria CaixaCorp Group companies that form part of the “la Caixa” consolidated tax Group are listed in Appendix IV.

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The reconciliation of the accounting profit for the year before tax to the taxable profit for income tax purposes recorded in the 2007 and 2006 income statement is as follows:


2007 2006

Accounting profit for the year before tax 2,075,524 2,275,668

Permanent differences:

Increases 6,185 124,757

Decreases (449,518) (203,910)

(443,333) (79,153)

Taxable profit 1,632,191 2,196,515

Rate (32.5% in 2007, 35% in 2006 of taxable profit) (1) 530,462 768,780

Tax credits and tax relief (784,588) (324,264)

Income tax (254,126) 444,516

Withholding at source of non-resident entities 1,561 3,142

Other 12,042 (5,188)

Income tax expense (income) (240,523) 442,470

(1) From this line forward, negative amounts denote income and positive amounts denote expenses.

The decreases in 2007 and 2006 due to permanent differences relate basically to dividends received from non-resident entities pursuant to Article 21 of the Consolidated Income Tax Law, approved by Legislative Royal Decree 4/2004, of 5th March (“TRLIS”), and to differences between the cost, for tax and accounting purposes, of the ownership interests transferred in the current period and other items such as the reversal of provisions.

The nature and amount of the tax credits taken are as follows:


Nature 2007 2006

Tax credit for double taxation of dividends 673,822 206,807

Tax credit for double taxation of undistributed profit 6,213 117,449

Tax credit for reinvestment 104,545 -

Other 8 8

Total 784,588 324,264

At 31st December 2007 and 2006, “Tax Receivables” on the asset side of the accompanying balance sheet, includes EUR 121,177 thousand and EUR 7,415 thousand, respectively, relating to deferred tax assets, and “Other Non-Trade Payables” on the liability side of the accompanying balance sheet includes EUR 15,426 thousand relating to the deferred tax liabilities in 2007. As a result of the differences between accounting and tax legislation, and Criteria CaixaCorp’s taxation as part of the “la Caixa” consolidated tax group, the tax calculated on the basis of accounting profit differs from the tax settlement that determines the tax payable to the tax authorities; this results in the recognition of a deferred tax asset, for the excess tax paid with respect to accrued tax, and deferred income tax liability, for the excess accrued income tax with respect to the tax payable. Most of the amounts relating to the deferred income tax assets and liabilities are mainly a result of the elimination, for the purpose of calculating the taxable profit of the tax group, of the gains obtained by Criteria CaixaCorp from the transfer of its ownership interests in the companies to other entities which form part of the “la Caixa” consolidated tax group.

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Additionally, a portion of the deferred tax assets relate to the differences between accounting and tax legislation regarding the methods of recognition of the investment valuation allowance.

The deferred tax liability also includes the amount relating to the tax amortisation of goodwill arising on the acquisition of the ownership interest in Banco BPI.

Pursuant to article 42 of the TRLIS in relation to the tax credit for reinvestment of profit, in 2006 the income qualifying for this tax credit, arising from the transfer for valuable consideration of equity items, was EUR 1,141,899 thousand. At 31st December 2006, the reinvestments carried out by the companies included in the tax consolidated group did not allow the application of any amount under the concept of the tax credit for reinvestment of extraordinary profits in the 2006 tax return.

The final tax credits for reinvestment of extraordinary profits obtained in 2007, and the details of the reinvestment made, will be disclosed in the notes to the financial statements for 2008, once the income tax return for 2007 has been filed. At 2007 year end an estimated tax credit for reinvestment of EUR 104,545 thousand had been recognised.

The final tax credits for reinvestment of extraordinary profits obtained in 2005, 2004, 2003 and 2001 amounted to EUR 6,060 thousand, EUR 1,554 thousand, EUR 8,244 thousand and EUR 18,765 thousand, respectively, relating to extraordinary profits of EUR 30,300 thousand, EUR 7,770 thousand, EUR 41,221 thousand and EUR 110,380 thousand obtained in 2005, 2004, 2003 and 2001, respectively. The total proceeds obtained in the transfers that gave rise to these extraordinary profits had already been reinvested in the period between the year preceding the transfer and the year in question.

Additionally, in 2005 income of EUR 18,272 thousand arose which was eliminated from the consolidated taxable profit of the tax group. In 2007, since the aforementioned income materialised vis-à-vis third parties it was included in the taxable profit and may qualify for the tax credit for reinvestment as it fulfils all the requirements established in the regulations.

Appendix V provides details of the main parameters for application of the tax credit, pursuant to article 42 of the TRLIS.

Final provision two of Law 35/2006, of 28th November, amended the Consolidated Income Tax Law and, among other measures, changed the standard tax rate to 32.5% for the tax period beginning from 1st January 2007, and 30% for tax periods beginning from 1st January 2008.

As a result of this change in the tax rate, at 31st December 2007 and 2006 the deferred income tax assets and liabilities included under the balance-sheet headings “Tax Receivables/Payables” and “Long-Term Payables to Group Companies”, respectively, were re-estimated, and EUR 8,312 thousand were charged and EUR 133 thousand were credited to “Income Tax”.

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Criteria CaixaCorp took part in the following transactions under the special tax regime provided for in Chapter VIII of Title VII of TRLIS:

2007

- Special non-monetary contribution by Criteria CaixaCorp to Negocio de Finanzas e Inversiones I, SL of shares of Atlantia, S.p.A., Banco Comercial Portugues SA and Boursorama, SA, with a carrying amount of EUR 297,940 thousand. In consideration for the non-monetary contribution, the Company’s capital was increased by EUR 100,000 thousand, while the remaining value of the contribution was transferred to the share premium.

- Special non-monetary contribution by Criteria CaixaCorp to Holret, SA of shares of Hodefi, SAS with a carrying amount of EUR 258,639 thousand, equal to the carrying amount of Hodefi’s ownership interest in Criteria CaixaCorp.

2006

- No transactions were carried out under the special tax regime provided for in Chapter VIII of Title VII of TRLIS in 2006.

2005

- Merger by absorption of G.P. Comercial, SA, G.P. Resort, SA and USPA Hotel Ventures I, SA into Port Aventura, SA.

2004

- Special non-monetary contribution by Criteria CaixaCorp to Caixa Barcelona Seguros de Vida, SA de Seguros y Reaseguros of shares in Inmobiliaria Colonial, SA, with a carrying amount of EUR 175,618 thousand, for which Criteria CaixaCorp received shares in Caixa Barcelona Seguros de Vida, SA de Seguros y Reaseguros which were recognised for the same carrying amount.

- Special non-monetary contribution by Criteria CaixaCorp to Repinves, SA of shares in Repsol YPF, SA with a carrying amount of EUR 206,272 thousand, for which Criteria CaixaCorp received shares in Repinves, SA which were recognised for the same carrying amount.

2003

- The Company was not involved in any transactions of this nature.

2002

- Merger by absorption of BuildingCenter, SA into Prominmo, SA.

- Merger by absorption of Corporació de Participacions Estrangeres, SL into Criteria CaixaCorp. The merger balance sheet of the absorbed company at 31st December 2001 is presented in the Company’s financial statements for 2002.

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2001

- Special non-monetary contribution by Criteria CaixaCorp to InverCaixa Holding, SA of shares in GesCaixa I, SA, SGIIC,, with a carrying amount of EUR 28,268 thousand, for which Criteria CaixaCorp received shares in InverCaixa Holding, SA which were recognised for the same carrying amount.

- Special non-monetary contribution by Criteria CaixaCorp to e-"la Caixa", SA of shares in Caixa On Line Services, SA, with a carrying amount of EUR 10,515 thousand, for which Criteria CaixaCorp received shares in e-"la Caixa", SA which were recognised for the same carrying amount.

- Special non-monetary contribution by Criteria CaixaCorp to Banco de Sabadell, SA of shares in Banco Herrero, SA, with a carrying amount of EUR 310,486 thousand, for which Criteria CaixaCorp received shares in Banco de Sabadell, SA which were recognised for the same carrying amount.

- Special non-monetary contribution by Criteria CaixaCorp to Hotel Caribe Resort, SL (formerly Hotel Occidental Salou, SL) of building land valued at EUR 7,513 thousand, for which Criteria CaixaCorp received shares in Hotel Caribe Resort, SL which were recognised for the same carrying amount.

2000

- Special non-monetary contribution and exchange of securities by “la Caixa” to Criteria CaixaCorp involving shares in various companies, with a carrying amount of EUR 8,236,330 thousand, for which “la Caixa” received shares in Criteria CaixaCorp: which were recognised for the same carrying amount.

Years open for review by the tax authorities

At 31st December 2007, the years 2004, 2005, 2006 and 2007 are open for review by the tax authorities for the main taxes.

The review carried out by the tax inspection authorities of the Tax Group for 2000 and 2003 was completed in 2006, with no tax assessments being issued to Criteria CaixaCorp.

(14) GUARANTEE COMMITMENTS TO THIRD PARTIES AND OTHER CONTINGENT LIABILITIES

To Caixa Capital Desarrollo SCR, de Régimen Simplificado, SAU

On 17th December 2001, “la Caixa” granted a USD 24,118 thousand loan to Tamar, SARL, which was arranged in three tranches “A”, “B” and “C” of USD 16,298 thousand, USD 5,390 thousand and USD 2,430 thousand, respectively, initially maturing on 17th December 2006 and renewed until 17th February 2007, to finance the subscription of preference shares in

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Occidental Hotels Management, BV. Criteria CaixaCorp was, until the Group’s sale to third parties, the guarantor of tranche "C" of this loan and of the related interest.

In 2007, Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SAU sold the aforementioned companies for a sum that is below their purchase price and, as established in the guarantee originally provided, Criteria CaixaCorp compensated for the difference. The payment made by Criteria CaixaCorp arising from the sale price guarantee of the companies amounted to EUR 30,134 thousand (see Note 11).

For the takeover bid of Sociedad General de Aguas de Barcelona, SA

In the process of presenting the takeover bid on the shares of Agbar, the offerors, Hisusa – Holding de Infraestructuras y Servicios Urbanos, SA, Suez Environnement, SA, Suez Environnement España, SLU and Criteria CaixaCorp, state their intention that, subsequent to the settlement of the takeover bid, Agbar’s shares continue to be listed on the stock markets with an adequate level of liquidity.

As a result of and for the purposes of the foregoing, the offeror companies stated their firm, irrevocable and unconditional commitment to:

- dispose of, within three months of the settlement of the takeover bid, those shares in Agbar required, where necessary and in proportion to their percentage of ownership, to ensure that the proportion of ownership interest in Agbar held by third parties be at least 10%.

- adopt, within a maximum period of six months from the date of settlement of the takeover bid, the measures considered necessary (initial public offering through a capital increase or sale exclusively to eligible investors) to assure maintenance of the liquidity and the circulation of the shares following the performance of the takeover bid, in adequate conditions for their continued market listing.

In any event it is the offeror companies’ firm, irrevocable and unconditional intention that the percentage of ownership in Agbar held by third parties in the years following the settlement of the takeover bid be around 30%. As established above, the direct and indirect ownership interest held in Agbar by Suez Environnement and Criteria CaixaCorp following the implementation of the liquidity procedures detailed herein, considering the ownership interest held through HISUSA, will be 51% and 49%, respectively, always with a joint ownership interest in Agbar of more than 50%. The result of the takeover bid was published by the Spanish National Securities Market Commission (“CNMV”) on 18th January 2008 (see Note 18).

Criteria CaixaCorp received a guarantee of EUR 608,226 thousand from “la Caixa” in relation to the takeover bid on the Agbar shares to secure the potential maximum payment the Company would be required to make to the minority interests which back the takeover bid. This guarantee has been cancelled after the final settlement of the takeover in January 2008 (see Notes 15 and 18).

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(15) INCOME AND EXPENSES

Services provided

This heading basically includes income from consultancy and financial advisory services provided to Group companies.

Income from equity investments

The heading “Income from Equity Investments” in the income statement relates to dividends received from investees. The detail in 2007 and 2006 is as follows:


2007 2006

Caixa Barcelona Seguros de Vida, SA de Seguros y Reaseguros (1) 1,350,000 42,761

Gas Natural, SDG, SA 153,963 132,421

Banco de Europa, SA 56,801 4,806

Telefónica, SA 132,156 92,053

Negocio de Finanzas e Inversiones I, SL 53,813 -

Repsol YPF, SA 98,769 73,330

Repinves, SA 36,466 28,731

Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SA 35,169 50,000

Catalunya de Valores, SGPS, UL 69,248 16,000

Caifor, SA 56,875 43,840

Abertis Infraestructuras, SA 34,735 9,954

VidaCaixa, SA de Seguros y Reaseguros 24,231 21,378

Holret, SA (formerly Servihabitat, SA) 21,416 10,025

Banco BPI, SA 10,395 121

Banco de Sabadell, SA - 28,571

Suez, SA - 17,222

Hisusa, SA - 14,452

Other 28,915 42,140

Total 2,162,952 627,805

(1) In the process of reorganization of the Group perimeter before going listed, Caixa Barcelona Vida sold to “la Caixa” its stakes in Gas Natural (0.2%), Abertis (11.66%), Telefónica (0.39%) and Inversiones Autopistas (50.1%). After that, Criteria CaixaCorp acquired these stakes from “la Caixa”. The liquidity obtained by Caixa Barcelona Vida in this transactions allowed to distribute this dividend for an amount of EUR 1,350 million (see Notes 1 and 2).

Other interest and similar income

The detail of “Other Interest and Similar Income” on the credit side of the accompanying income statement is as follows:

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2007 2006

Short-term interest deposits with "la Caixa" (see Note 9) 63,888 17,771

Negocio de Finanzas e Inversiones I loan interest income 4,508 -Hisusa loan interest income 607 -Crisegen Inversiones loan interest income 9 -Result of operations with financial derivatives 21,929 12,847

Other finance income 283 722

Total 91,224 31,340

“Result of operations with financial derivaties” at 31st December 2007 and 2006 include:

• EUR 4,983 thousand relating to the premium received for the options, which expired or were exercised in 2007, on shares of Telefónica, SA of EUR 4,909 thousand and on shares of Repsol YPF, SA of EUR 73 thousand. In 2006, EUR 9,287 thousand were related to the premium received for the options on shares of Endesa, SA.

• EUR 14,342 thousand arising from the finance income from the Telefónica equity swap (see Note 6).

• EUR 2,604 thousand of interest earned on the security deposits arising from the Telefónica equity swap (see Note 8).

Staff costs

The breakdown of “Staff Costs” on the debit side of the income statements for 2007 and 2006 is as follows:


2007 2006

Wages and salaries 7,050 5,396

Employer social security costs 923 857

Other employee benefit costs 459 317

Total 8,432 6,570

The average number of employees in 2007 and 2006, by category and gender, was as follows:

Average Number of Employees

Professional Category

Women Men Total Women Men Total

Executives 0 2 2 0 2 2

Directors 2 6 8 2 5 7

Graduates, technicians and IT engineers 48 29 77 47 29 76

Clerical staff 9 0 9 8 0 8

Service and other staff 0 2 2 2 2

Temporary staff 1 0 1 0 0 0

Total 60 39 99 57 38 95

2007 2006

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In October 2007, following its admission to trading, Criteria CaixaCorp allocated each employee who had been in service prior to 31st December 2006 an incentive based on remuneration in shares allotted free of charge, giving rise to a disbursement of EUR 90 thousand which was recorded under “Other Employee Benefit Costs”.

Other operating expenses

The increase in expenses in 2007 is mainly a result of the Company’s reorganisation and preparation for admission to trading. The most significant expenses in relation to the Initial Public Offering are the bank fees paid to the underwriter entities, amounting to EUR 59,123 thousand, which include EUR 30,431 thousand paid to “la Caixa”, and the transfer tax expense for the capital increases carried out, amounting to EUR 38,483 thousand.

Additionally, “Other Operating Expenses” in the accompanying income statements for 2007 and 2006 includes EUR 5,794 thousand (excluding the expenses arising from the Initial Public Offering) and EUR 1,284 thousand, respectively, for technical reports and professional advisory services. EUR 175 thousand and EUR 134 thousand relate to the fees and expenses of Deloitte, SL for the audit of the individual and consolidated financial statements of Criteria CaixaCorp for 2007 and 2006, respectively. Also, additional fees of EUR 720 thousand were paid to Deloitte, SL, related to audit works, as part of the admission to trading process, and EUR 60 thousand for other items.

Finance and similar costs

The breakdown of this heading is as follows:


2007 2006

Interest on short-term debt with "la Caixa" (see Note 12) 54,446 -

Results of operations with financial derivatives 24 59

Other financial costs 143 227

Total 54,613 286

At 31st December 2007, “Results of Operations with Financial Derivatives” includes EUR 24 thousand relating to the amounts paid for Telefónica, SA share options exercised during the period. In 2006, the amount includes EUR 59 thousand to the amounts paid for Endesa, SA share options exercised in this year.

Environmental information

In view of the business activity carried on by the Company, it does not have any environmental liability, expenses, assets, provisions or contingencies that might be material with respect to its net worth, financial position or results. Therefore, no specific disclosures relating to environmental issues are included in these notes to the financial statements.

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Transactions with Group companies, associates and jointly controlled entities

In addition to the disclosures contained in other notes, the transactions carried out with Group companies, associates and jointly controlled entities in 2007 were as follows:


Criteria "la Caixa" Associates and Associates and

CaixaCorp Group Jointly Controlled Group Jointly Controlled

Group Companies Companies Entities Companies Entities

Services received 25 32,434 - 959 -

Services provided 77 537 52 1,286 71

Interest received 5,124 63,888 - 17,771 -

Interest charged - 54,446 - - -

Dividends received 285,198 1,407,984 236,016 254,030 230,242

Gains on disposal of investments 21,646 - - - -

Losses on disposal of investments - 169,176 - - -

Extraordinary gains on disposal of

property, plant and equipment - 1,427 - - -

2007 2006

As a result of the Initial Public Offering of Criteria CaixaCorp, on 19th September 2007 Criteria CaixaCorp and its Parent, “la Caixa”, signed a “Internal Protocol governing Relationships” with the purpose of strengthening the Company’s transparency, autonomy and good governance. This agreement basically controls:

• The definition of the main areas of activity of Criteria CaixaCorp and the Group companies

• The establishment of general criteria for the performance of operations or the provision of intragroup services on an arm's length basis; and

• The establishment of mechanisms to achieved the flow of information required between the Company and "la Caixa" to enable them to fulfil their management needs and their obligations to the respective regulators.

On the same date, a “Tax Consolidation” agreement was signed which governs the relations between Criteria CaixaCorp and “la Caixa” specific to the tax area, within the framework of the tax consolidation group to which it belongs, and an “Exchange of Information” agreement was also signed whereby Criteria CaixaCorp and “la Caixa” will share the information required to fulfil their legal and tax obligations.

Criteria CaixaCorp received a guarantee of EUR 608,226 million from “la Caixa” in relation to the takeover bid on the Agbar shares to secure the potential maximum payment the Company would be required to make to the minority interests which back the takeover bid. The guarantee was withdrawn in January 2008 following the publication of the result and settlement of the offer (see Notes 14 and 18).

Foreign currency transactions

There were no significant transactions in foreign currency in 2007.

- 40 -

(16) EFFECTS ARISING FROM THE ENTRY INTO FORCE OF THE 2008 SPANISH NATIONAL CHART OF ACCOUNTS

Royal Decree 1514/2007, which was published on 20th November 2007, approved the new Spanish National Chart of Accounts that came into force on 1st January 2008 and which must be applied for all periods beginning on or after that date. Under the aforementioned Royal Decree, the first financial statements prepared in accordance with the rules contained therein will be considered to be initial financial statements and, accordingly, they will not include comparative figures for the previous period; however, comparative information for the immediately preceding period may be presented, provided that it is adapted to the new Chart of Accounts. Also, the Chart of Accounts contains several transitional provisions which establish various options in the first-time application of the new accounting standards and provide for the voluntary adoption of certain exceptions on first-time application. The Company is implementing a transition plan for adaptation to the new accounting standards which involves, inter alia, analysing the differences in accounting rules and standards, determining whether or not comparative information adapted to the new standards will be presented and, consequently, the date of the opening balance sheet, selecting the accounting rules and standards to be applied in the transition and assessing the changes that have to be made to information systems and procedures. At the date of preparation of these financial statements, the aforementioned plan was still at the implementation phase and at present it is not possible to estimate fully, reliably and with all the relevant information the potential effects of the transition.

(17) DISCLOSURES CONCERNING THE BOARD OF DIRECTORS

Remuneration and other benefits

In 2007 the members of the Board of Directors and the Chairman of Criteria CaixaCorp earned EUR 1,472 thousand in attendance fees and remuneration.

In 2007 the remuneration received by the directors of Criteria CaixaCorp in connection with their duties as representatives of the Entity on the Boards of Directors of listed companies and other companies in which the Entity has a significant presence or representation amounted to EUR 5,388 thousand which were recognised in the income statements of Criteria CaixaCorp.

- 41 -

The detail of the abovementioned remunerations is the following:

Directors

Criteria CaixaCorp's

Board of Directors

In other

associates Total

Executive Directors 1.000 1.028 2.028

Nominee Director 327 4.360 4.687

Independent Directors 145 - 145

1.472 5.388 6.860

Thousands of Euros

In 2007 the senior executives earned a total of EUR 1,259 thousand, which includes EUR 120 thousand in Board of Directors’ Meeting attendance fees.

The agreements between the Company and members of the Board of Directors and/or Senior Executives of Criteria CaixaCorp establish, in case of unilateral termination by the Company, an indemnity amounted to a maximum of EUR 1.5 million.

Criteria CaixaCorp has no pension commitments to former and current members of the Board of Directors in their capacity as such or any commitments other than those disclosed above.

Purchase of shares by members of the Board of Directors and/or executives.

At 31st December 2007, the direct and indirect ownership interests held by members of the Board of Directors in the Company's share capital were as follows:

Shareholder No. of shares %

Ricard Fornesa Ribó 294,000 0.009%

Javier Godó Muntañola 1,230,000 0.037%

Juan Maria Nin Génova 66,391 0.002%

Isidre Fainé Casas 66,191 0.002%

Susana Gallardo Torrededia 58,700 0.002%

Isabel Estapé Tous 48,371 0.001%

Juan Rosell Lastortras 32,382 0.001%

Manuel Raventós Negra 17,330 0.001%

Manel García Biel 7,872 0.000%

Salvador Gabarró Serra 7,003 0.000%

Miquel Noguer Planas 3,561 0.000%

Mª Amparo Camarasa Carrasco 3,273 0.000%

Jordi Mercader Miró 1,496 0.000%

Alain Minc 0 0.000%

David K.P. Li 0 0.000%

1,836,570 0.055%

- 42 -

Detail of ownership interests, positions and functions in companies engaging in similar activities and similar activities performed by the directors as independent professionals or as employees

Pursuant to Article 127 ter. 4 of the Spanish Companies Law, introduced by Law 26/2003, of 17th July, which amends Securities Market Law 24/1988, of 28th July, and the Consolidated Spanish Companies Law, in order to reinforce the transparency of companies, set forth below is information relating to companies engaging in an activity that is identical, similar or complementary to the activity that constitutes the company object of Criteria CaixaCorp, at which the members of the Board of Directors hold or have held a position in 2007.

Line of Company

Shareholder Investee Shares Business Position Held Represented

Fainé Casas, Isidre Hisusa-Holding de Infraestructuras de Servicios Urbanos, SA n/a Holding Co. Director Criteria CaixaCorp, SA

Fainé Casas, Isidre Hodefi, SAS n/a Holding Co. Chairman -

Fornesa Ribó, Ricard Hodefi, SAS n/a Holding Co. Director -

Fornesa Ribó, Ricard (*) Hisusa-Holding de Infraestructuras de Servicios Urbanos, SA n/a Holding Co. Chairman Caixa Corp, SA

Fornesa Ribó, Ricard (*) Hisusa-Holding de Infraestructuras de Servicios Urbanos, SA n/a Holding Co. Deputy Chairman Caixa Corp, SA

Gallardo Torrededia, Susana Sugarinvest, SLU 100% Holding Co. Attorney-in-fact -

Godó Muntañola, Javier Grupo Godó de Comunicación, SA 98% Holding Co. Chairman -

Godó Muntañola, Javier Privatmedia, SL 20% Holding Co. Administrator -

Godó Muntañola, Javier Catalunya Comunicació, SL n/a Holding Co. Chairman -

Godó Muntañola, Javier Sociedad de Servicios Radiofónicos Unión Radio, SA n/a Holding Co. Deputy Chairman -

Juan Rosell Lastortras Civislar, SA 100% Holding Co. Chief Executive Officer -

(*) Ricard Fornesa Ribó held the post of chairman of Hisusa, SA until 29th June 2007, and since then has occupied the post of deputy chairman, as envisaged in the rotation plan agreed upon by the shareholders, Suez, SA and Criteria CaixaCorp.

Also, it is hereby stated that none of the members of the Board of Directors did not and do not carry on, as employees or as independent professionals, any activities that are identical, similar or complementary to the activity that constitutes the company object of Criteria CaixaCorp.

(18) EVENTS AFTER THE BALANCE-SHEET DATE

On 16th January 2008, the acceptance period for the takeover bid launched on the Agbar shares closed (see Note 6.2). At 31st December 2007, the Agbar shares held by Hisusa, SA, Suez Environnement, SA, and Criteria CaixaCorp (the Offerors) totalled 84,489,035, implying a total ownership interest of 56.461%. As a result, the number of issued shares affected by the bid was 65,152,672. Following the close of the acceptance period and in accordance with the result of the takeover bid published by the Spanish National Securities Market Commission (“CNMV”) on 18th January 2008, the number of shares in the bid totalled 50,205,817 at a price of EUR 27.65 per share. The shares were distributed among the offerors as follows:


Offeror No. of Shares Payment Outstanding

Hisusa 20,260,160 560,193

Suez Environment 15,272,286 422,279

Criteria CaixaCorp 14,673,371 405,719

50,205,817 1,388,191

- 43 -

On 23rd January 2008, Criteria CaixaCorp granted a loan of EUR 255,094 thousand to Hisusa to finance the purchase of 20,260,160 shares in Agbar as agreed within the framework of the takeover bid.

The Criteria CaixaCorp’s direct ownership interest in Agbar following settlement of the takeover bid is 11.55% whilst the Group’s ownership interest is 44.11%.

In accordance with the commitment given by the Offerors, described in Note 14, to dispose of within three months of the settlement of the takeover bid the required number of shares in Agbar, where necessary and in proportion to their percentage of ownership to ensure that the percentage of Agbar’s shares held by third parties is at least 10%. 17,316 shares must be disposed of to fulfil this commitment.

- 44 -

(19) STATEMENT OF CHANGES IN FINANCIAL POSITION

The statements of changes in financial position in relation to 2007 and 2006 are as follows:

(Thousands of Euros) (Thousands of Euros)

APPLICATION OF FUNDS 2007 2006 SOURCE OF FUNDS 2007 2006

Final dividend 165,000 150,000 Funds obtained from operations 2,263,644 239,655

Interim dividend 1,960,887 500,000 Capital increase and share premium 3,848,350 -

Distribution of share premium and Reduction in the cost of investments through

voluntary reserves 3,193,655 - dividends received 568,754 362,425

and intangible assets 1,177 9,428 Reimbursement of contributions to shareholders - 8,390

Additions to long-term investments 5,803,727 797,732 Disposal of long-term investments 623,601 2,916,641

Long-term loans 134,131 22 Non-current liabilities 1,378,548 26,954

Deposits and guarantees 11 -

Disposal of property, plant and equipment and

intangible assets 10,924 -

TOTAL FUNDS APPLIED 11,258,588 1,457,182 TOTAL FUNDS OBTAINED 8,693,821 3,554,065

Funds obtained in excess of funds applied Funds applied in excess of funds obtained

(increase in working capital) - 2,096,883 (decrease in working capital) 2,564,767 -

11,258,588 3,554,065 11,258,588 3,554,065

(*) The figures relating to 31st December 2006 are presented for comparison purposes only.

The changes in working capital in 2007 and 2006 were as follows:

(Thousands of Euros) (Thousands of Euros)

2007 2006

Net Net Net Net

Increase Decrease Increase Decrease

Accounts receivable - 985,294 691,949 -

Short-term investments 316,108 - 26,998 -

Cash - 1,871,442 1,142,674 -

Accrual accounts 739 - - -

Current liabilities - 24,878 235,262 -

Total 316,847 2,881,614 2,096,883 -

Change in working capital - 2,564,767 2,096,883 -


- 45 -

The reconciliation of the accounting profit to the funds obtained from operations is as follows:


2007 2006

Accounting profit 2,316,047 1,833,198

Amortisation and depreciation charge 314 257

Changes in provisions for contingencies

and charges (10,277) (600)

Amounts of provisions for contingencies

and charges used (30,134) -

Change in investment valuation allowances (20,808) (101,573)

Changes in provisions for long-term loans

to companies - 22

Gains on disposals of investments (159,027) (1,524,697)

Losses on disposals of investments 169,176 445

Deferred tax asset 32,603

Gains on disposal of property, plant and equipment (1,647) -

Total 2,263,644 239,655


(20) EXPLANATION ADDED FOR TRANSLATION TO ENGLISH

These financial statements are presented on the basis of accounting principles generally accepted in Spain. Certain accounting practices applied by the Company that conform with generally accepted accounting principles in Spain may not conform with generally accepted accounting principles in other countries.

- 46 -

APPENDIX I

Ownership interests in Group companies

Thousands of Euros

Dividends Carrying

Earned in 2007 Amount

for Direct of Direct

Company name and line of business Location Share Profit/ Ownership Ownership Audit

Direct Total Capital Reserves Loss Interest Interest (Net) Firm

AgenCaixa, SA Torres Cerdà. General Almirante, 2-6 0,00 100,00 601 2.878 284 - - Deloitte

Insurance agent 08014 Barcelona

CaiFor, SA Torres Cerdà. General Almirante, 2-6 50,00 100,00 256.267 51.369 114.380 56.875 152.295 Deloitte

Holding company 08014 Barcelona

Caixa Capital Desarrollo, SCR, de Régimen Simplificado, SAU Av. Diagonal, 621-629 100,00 100,00 400.000 80.021 86.079 35.169 479.569 Deloitte y Associados SROC, SA

Venture capital company 08028 Barcelona

CaixaRenting, SA Gran Via de les Corts Catalanes, 130 - 136 100,00 100,00 601 10.593 5.572 - 52.000 Price Waterhouse Coopers

Renting of vehicles and machinery 08038 Barcelona

Catalunya de Valores SGPS, UL Rua Júlio Dinis, 891 4º 100,00 100,00 2.211 442 224.949 69.248 2.654 Deloitte y Associados SROC, SA

Holding company 4050-327 Massarelos

Portugal Oporto

Cegripro, SAS 20, rue dÁrmenonville 0,00 100,00 38.000 590 6.846 - - Cabinet RSA SEEC & ASSOCIES

Property 92200 Neuilly Sur Seine

France Paris

Crisegen Inversiones, SL Av. Diagonal, 621 100,00 100,00 132.779 23.951 100.534 - 875.602 -

Purchase, disposal, transfer and management of the 08028 Barcelona

ownership interests in any business or activity

Finconsum, EFC, SA Gran Via Carles III, 87, bajos 1º B 100,00 100,00 50.733 4.114 (9.286) - 86.218 Price Waterhouse Coopers

Consumer finance 08028 Barcelona

GDS-Correduría de Seguros, SL Av. Diagonal, 427 bis - 429 1ª pl 67,00 67,00 30 6 3.973 2.568 241 KPMG/Peat Marwick

Insurance brokerage 08036 Barcelona

GestiCaixa, SGFT, SA Av. Diagonal, 621-629 91,00 100,00 1.502 300 1.750 2.804 2.630 Deloitte

Securitisation fund management 08028 Barcelona

G.P. Desarrollos Urbanísticos Tarraconenses, SLU Aribau, 192-198 1ª Planta 0,00 100,00 21.115 (517) (272) - - -

Property activities on behalf of third parties 08036 Barcelona

Hodefi, SAS 20, rue dÁrmenonville 0,00 100,00 252.699 2.350 1.440 - - Cailliau, Dedouit&Associés

Holding company 92200 Neuilly-sur-Seine /Deloitte&Touche

France Paris

Holret, SAU (formerly Servihabitat, SA ) Avda. Diagonal, 621-629 100,00 100,00 221.935 47.049 103.399 21.418 267.898 Deloitte

Property services 08028 Barcelona

Hotel Caribe Resort, SL Rambla del Parc s/n 60,00 60,00 17.936 (217) 708 - 11.016 Deloitte

Hotel operation 43840 Salou

Tarragona

InverCaixa Gestión, SGIIC, SAU Av. Diagonal, 621-629 100,00 100,00 18.751 8.573 8.829 10.827 27.365 Deloitte

Management of collective investment schemes 08028 Barcelona

Inversiones Autopistas, SL Av. Diagonal, 621-629 50,10 50,10 100.000 76.836 25.641 6.944 524.070 Deloitte


Invervida Consulting, SL Torres Cerdà. General Almirante, 2-6 0,00 100,00 2.905 581 4.254 - - -

Purchase, disposal, transfer and management of the 08014 Barcelona

ownership interests in any business or activity

Negocio de Finanzas e Inversiones I, SL Av. Diagonal, 621-629 100,00 100,00 220.003 333.569 55.756 53.813 561.756 No statutory requirement

Services 08028 Barcelona

Port Aventura, SA Avinguda Pere Molas, km.2 74,99 97,12 171.424 4.479 14.841 - 149.210 Deloitte

Theme park operation 43480 Vila-Seca

Tarragona

Recouvrements Dulud, SA 20, rue dÁrmenonville 0,00 100,00 3.272 (792) (1.080) - - Cailliau, Dedouit&Associés

Finance 92200 Neuilly Sur Seine /Deloitte&Touche

France Paris

SegurCaixa, S.A. de Seguros y Reaseguros Torres Cerdà. General Almirante, 2-6 0,00 100,00 9.100 27.316 25.963 - - Deloitte

Insurance 08014 Barcelona

Sodemi, SAS 20, rue dÁrmenonville 0,00 100,00 9.405 470 73 - - Cabinet RSA SEEC &

Property development and leasing 92200 Neuilly-sur-Seine ASSOCIES

France Paris

Tenedora de Vehículos, SA Edificio Estación de Renfe Local nº 3 p 0,00 65,00 600 545 585 - - Price Waterhouse Coopers

Renting 08256 Rajadell

Barcelona

VidaCaixa, SA de Seguros y Reaseguros Torres Cerdà. General Almirante, 2-6 20,00 100,00 252.971 42.497 134.535 24.231 56.094 Deloitte

Insurance 08014 Barcelona

Note: The foregoing information reflects the latest (actual or estimated) available figures at the time of preparing these notes to the financial statements.

% of

Ownership Interest

- 47 -

APPENDIX II

Ownership interests in associates and jointly controlled entities

Thousands of Euros

Dividends Carrying


for Total of Direct

Company name and line of business Location Share Profit/ Ownership Ownership Audit

Direct Total Capital Reserves Loss Interest Interest (Net) Firm

Abertis Infraestructuras, SA (C) Av. del Parc Logístic, 12-20 16,74 21,12 1.915.226 1.213.861 682.180 48.584 2.034.001 Price Waterhouse Coopers

Operation of transport and communications infrastructures 08040 Barcelona

Rua Tenente Valadim, 284 15,00 25,02 760.000 495.225 355.100 30.430 692.630 Deloitte4100 Oporto

Portugal

Boursorama, SA ( C) 18 Quai du Point du Jour 0,00 20,44 34.563 290.574 48.000 - - Deloitte / Ernst & Young

Banking 92659 Boulogne Billancourt

France

Gas Natural, SDG, SA (C) Plaça del Gas, 1 33,06 35,53 447.776 4.523.529 959.414 165.441 1.481.656 Price Waterhouse Coopers

Gas distribution 08003 Barcelona

Hisusa-Holding de Infraestructuras de Serv.Urbanos, SA Torre Agbar. Av. Diagonal, 211 49,00 49,00 213.373 536.972 54.931 - 449.216 Deloitte


Repinves, SA Av. Diagonal, 621-629 Torre II 5ª planta 67,60 67,60 61.304 838.661 53.966 36.466 643.541 Deloitte


Sociedad General de Aguas de Barcelona, SA (C) Torre Agbar. Av. Diagonal, 211 1,74 27,67 149.642 1.493.505 352.541 16.998 72.182 Deloitte

Water distribution and City Works 08018 Barcelona

(C) Listed company. Public data on capital, reserves, and profit at 31/12/2007; except for Boursorama SA, whose capital and reserves are at 30/06/07


Banco BPI, SA (C)Banking

% of Ownership Interest

- 48 -

APPENDIX III

Long-term investment securities

Thousands of Euros

Dividends Carrying


for Direct of Direct

Company name and line of business Location Ownership Ownership

Direct Total Interest Interest (Net)

Sede Praça D. João I, 28, Porto - 1,03 - -

4000-295 Oporto

Portugal

10 des Voex Road Central - 8,89 - -

Hong Kong P.R. China

Plaza de la Lealtad,1 3,53 3,53 2.823 122.561

28014 Madrid

P. de la Castellana, 278-280 9,27 12,67 98.768 1.816.128

28046 Madrid

Gran Vía, 28 5,48 5,48 132.156 2.325.552

28013 Madrid

(*) % of ownership interest includes 0.94% held through an equity swap.


Securities markets and financial systems

Bank of East Asia, Ltd.

Banking

Interest

Banco Comercial Português, SA

Banking

% of Ownership

Bolsas y Mercados Españoles, SHMSF, SA

Telecommunications

Operation of hydrocarbon market

Telefónica, SA(*)

Repsol YPF, SA

- 49 -

APPENDIX IV

Tax Consolidated Companies

Aris Rosen, SAU

Caixa Barcelona Seguros Vida, SA de Seguros y Reaseguros

Caixa Capital Desarrollo, SCR de régimen simplificado, SA

Caixa Capital Pyme Innovación, SCR de Régimen Simplificado, SA

Caixa Capital Risc, SGECR, SA

Caixa Capital Semilla, SCR de Régimen Simplificado, SA

Caixa d'Estalvis i Pensions de Barcelona (Parent Company)

Caixa Preference, SAU

CaixaCorp, SA

CaixaRenting, SA

Criteria CaixaCorp, SA

ECT MultiCaixa, SA

e-la Caixa, SA

FinanciaCaixa 2, EFC, SA

Grand Península Desarrollos Urbanísticos Tarraconenses, SLU

GDS-CUSA, SA

GestiCaixa, SGFT, SA

GestorCaixa, SA

Holret, SAU

Iniciativa Emprendedor XXI, SA

InverCaixa Gestión, SGIIC, SAU

MediCaixa, SA

MicroBank de la Caixa, SA

Negocio de Finanzas e Inversiones I, SL

Port Aventura, SA

PromoCaixa, SA

RentCaixa, SA de Seguros y Reaseguros

Serveis informátics de la Caixa, SA

Servihabitat XXI, SA

Serviticket, SA

Suministros Urbanos y Mantenimientos, SA - SUMASA

Trade Caixa I, SA

Valoraciones y Tasaciones Hipotecarias, SA

For the purpose of corporation tax, the consolidated Group consisted of the following companies in the

financial year 2008:

Note: The group of companies to which the tax consolidation system applies also includes 69 businesses

that are currently dormant.

- 50 -

APPENDIX V

Tax credit for reinvestment of extraordinary profits

Income Qualifying for Income on which Tax CreditYear the Tax Credit Tax Credit Claimed

2001 and prior years 110.380 110.380 18.7652002 - - -2003 41.221 41.221 8.2442004 7.770 7.770 1.5542005 30.300 30.300 6.060

18.272 -

2006 1.141.899 - -

At 2007 year-end, it was estimated that the companies in the "la Caixa" Group tax consolidation group had reinvested

extraordinary profit in 2007 which may be allocated to income qualifying for the tax credit arising in 2005 and 2006

amounting to EUR 522,724 thousand. Accordingly, tax revenue of EUR 104,545 thousand was recognised relating to the tax

credit for the reinvestment of extraordinary profit.

At 31 December 2006, the companies included in the scope of the tax consolidation of "la Caixa" recorded amounts pending

reinvestment which confer upon Criteria Caixacorp the right to apply the income relating to 2005 and 2006 amounting to EUR18,272 thousand and EUR 1,141,899 thousand, respectively, which provide a basis for calculating the tax credit. As a result,

Criteria Caixacorp had tax revenue of EUR 232,034 thousand pending recognition relating to the tax credit for extraordinary

profit, which will be accrued in 2007 and subsequent years when the related reinvestment is performed.

The gains were reinvested in equity securities, granting an ownership interest of more than 5%, and in tangible and

intangible assets.

Income qualifying for the tax credit set forth in Article 42 of Legislative Royal Decree 4/2004, of 5 March, approving the

Consolidated Income Tax Law:

Thousands of Euros

The total gain obtained through the transfer of equity items giving rise to the tax credit for reinvestment of extraordinary

profit in the years from 2001 to 2004 and in a portion of 2005 was reinvested within the period between the year prior to the

date of transfer and the year of transfer.

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


2007 CONSOLIDATED DIRECTORS’ REPORT

1- PERFORMANCE OF THE GROUP DURING THE YEAR

Criteria CaixaCorp, SA, (formerly “CaixaHolding, SA”) changed its name to the present one on 19th July 2007. Its registered office is at Avenida Diagonal 621, Barcelona, and it was incorporated under the name GDS-Grupo de Servicios, SA for an indefinite period of time on 12th December 1980. On 1st June 2000, GDS-Grupo de Servicios, SA absorbed Caixa Holding, which was dormant, and adopted its company name. On 31st July 2000, the Company carried out a EUR 2,625 million capital increase, with a share premium of EUR 7,288 million which was subscribed by its sole shareholder, la Caixa d’Estalvis i Pensions de Barcelona ("la Caixa"), on this same date and paid through the contribution of most of the shares that made up its share portfolio at that time.

Criteria CaixaCorp’s main activity is the active management, with controlled risk, of an investment, by:

• Investment in first-tier companies, with strong presence in their respective markets and ability to generate recurring value and profitability

• The involvement in the governing bodies of these companies, participating directly in the definition of policies and future strategies and contributing to their growth and development.

• An experienced management team, which has the support of a large team of professionals, which allows for identification of investment and divestment opportunities, and execute them at the right time depending on the cycle of each market.

Criteria CaixaCorp, as defined in its strategy, will be the vehicle for the international expansion "la Caixa".

- 2 -

Initial Public Offering

In November 2006, the Board of Directors of “la Caixa” approved to study the process to trading of its investments through Criteria CaixaCorp in order to obtain market approval of management of the portfolio and achieve a suitable platform for the international expansion of the banking and financial business.

On 7 June 2007, the Annual General Assembly of “la Caixa” approved the admission to trading of Criteria CaixaCorp and authorised the sale of shares of the Company up to a limit of 49% of its share capital. On 19 July 2007, the Extraordinary General Assembly of “la Caixa” ratified these decisions, in particular with regard to the broadening of the shareholder structure through an Initial Public Offering and/or a Public Offering (“the Offering”).

On 20 September 2007, the Spanish National Securities Market Commission approved and filed the IPO information prospectus, the date on which the subscription period began.

The initial offering was 657.5 million new shares, representing 20% of share capital and they were distributed in four tranches: 55% retail, 5% employees, 10% qualified domestic investors and 30% in qualified international investors.

On 8 October 2007, Criteria CaixaCorp set the price of the Offering at EUR 5.25 per share and awarded shares to over 360,000 new shareholders in the retail and employee tranches, there was an oversubscription in all of the tranches. It should also be mentioned that this Offering was well received by institutional investors.

Finally, on 10 October 2007, Criteria CaixaCorp successfully completed the flotation process with the admission to trading of its shares on that date.

On 7 November 2007, the green-shoe option was partially exercised by the Global Coordinators, subscribing 75.5 million shares at EUR 5.25 per share. Consequently, the total amount subscribed amounted to approximately EUR 3,850 million, giving rise to the largest Stock Market flotation in Spain to date.

Following this operation, “la Caixa” has a 78.03% ownership interest in Criteria CaixaCorp. The remaining 21.97% corresponds to the free float held by minority shareholders. “la Caixa” has stated that it intends to retain a controlling interest in the future, and increase the Company’s free-float, through the sale of up to 25% of the shares, with the objective of more widely distributing the shares of Criteria CaixaCorp. These shares would be sold provided that, at least, one year subsequent to the admission to trading, the market conditions were such as to enable “la Caixa” to obtain a selling price higher than EUR 5.25 per share, without affecting the trading thereof.

- 3 -

Basic share information

The performance of the main aggregates of Criteria CaixaCorp’s share from 10 October 2007, the date of its admission to trading, until year-end was as follows:

-30,3%

-1,5%

+2,1 %

Descuento%

Ibex 35

3.287 millones de acciones 3.363 millones de acciones

Cotización €

07/11/2007

NAV por acción

+1,6 %

28,0%

29,0%

30,0%

31,0%

32,0%

33,0%

34,0%

35,0%88

90

92

94

96

98

100

102

104

106

108

110

10101010----10101010----07070707 21212121----10101010----07070707 01010101----11111111----07070707 12121212----11111111----07070707 23232323----11111111----07070707 04040404---- 12121212----07070707 15151515---- 12121212---- 07070707 26262626----12121212---- 07070707

Ibex 35Ibex 35Ibex 35Ibex 35

NAV por acciónNAV por acciónNAV por acciónNAV por acción

DescuentoDescuentoDescuentoDescuento

Cotización Cotización Cotización Cotización CriteriaCriteriaCriteriaCriteria

Market capitalisation at year-end EUR 17,386 million

Share price at admission to trading EUR 5.25

Maximum share price during the six-month period (19/10/2007)

EUR 5.35

Minimum share price during the six-month period (23/11/2007)

EUR 4.98

Share price at year-end EUR 5.17

The share price fell slightly by 1.5%, compared to the price at admission to trading, closing at EUR 5.17 per share at 31 December 2007. This decrease in the share price contrasts with the increase in the NAV per share of Criteria CaixaCorp, which rose by 1.6% during the same period.

The discount to Net Asset Value (NAV) per share compared to the share price of Criteria CaixaCorp at 31 December 2007, was 30.3%, in line with the discount applied to other companies of similar characteristics. However, the growth in the share price of Criteria CaixaCorp is significant, without prejudice to the effects which might be caused by market turbulence started in mid January 2008. The accompanying graph shows the objective prices of the analysts, although it must be borne in mind that some of them were issued prior to the stock market crash in January 2008:

- 4 -

Nov 19th

Nov 30th

Feb 11th

Oct 25th

Dec 13th

Nov 22th

Nov 19th

Feb 11th

Feb 7th

Jan 26th

Feb 11th

Feb 12th4.61

4.80

5.00

5.50

5.50

5.55

5.80

5.90

6.00

6.02

6-6.70

7.10

0,00 1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00

Citigroup

Societe Generale

Ibersecurities

Ahorro Corporación

Cheuvreux

Morgan Stanley

JP Morgan

M&B Capital Advisers

Interdin

Banesto

Bankinter

UBS

The Net Asset Value (NAV) of Criteria CaixaCorp is as follows:

Millions of euros 31/12/07 30/09/07 30/06/07

GAV 1 26,193 25,473 26,104

Pro forma net debt position 2 (1,264) (5,008) (4,708)

NAV 24,929 20,465 21,396

Net debt/ GAV 4,8% 19,7% 18,0%

Millions of shares 3 3,363 2,630 2,630

NAV/share (EUR) 7.41 7.78 8.14

Note: The GAV corresponds to the gross value of the shares of CaixaCorp Criteria and its holdings companies, understood as investment holdings. Excludes assets arising on the consolidation process, such as financial assets available for sale related to Caifor’s insurance business.

(1) In the case of listed shares, the number of shares at the closing price were taken at the date in question. Unlisted shares at 30 June and 30 September were valued internally at 30 June 2007, in accordance with methodologies generally accepted by the market and validated by independent experts (see IPO prospectus). At 31 December, an internal revaluation was performed, except for on the land at Port Aventura which was valued by an independent expert.

(2) Pro forma information obtained based on the net debt position in the individual financial statements and considering the net cash flows of the holding companies and transactions in progress not yet materialised.

(3) Considers the capital increase (including the green-shoe) involving 733 million shares.

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The following is a detail of the NAV of Criteria CaixaCorp and its holdings companies by ownership interests at 31 December 2007:

Millions of euros Market Value 31/12/07

Gas Natural 6,366

Repsol-YPF 3,770

Abertis 2,972

Agbar 1,140

Telefónica (*) 5,540

BME 138

Banco BPI 1,019

Boursorama 143

The Bank of East Asia 683

Other listed ownership interests

147

Total listed 21,918

Total unlisted 3,595

Other committed investments (Agbar) 1

680

TOTAL GAV 26,193

Proforma net debt position 2 (1,264)

TOTAL NAV 24,929

Notes: Both the investments carried out by Criteria CaixaCorp and those by the Group’s holding companies are included.

(1) The level of acceptance of the Agbar takeover bid launched by Criteria CaixaCorp and Suez has meant having achieved the participation of 90.01% in Agbar; therefore, the amount to be paid by Criteria CaixaCorp was EUR 852 million (including EUR 172 million for the direct purchase from Torreal at the end of 2007).

(2) The pro forma net debt position was obtained by considering the transactions in progress which had not yet materialised at the close of each period.

(*) includes 45 million shares linked to the equity swap at acquisition cost, and not at market value.

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The Criteria CaixaCorp’s listed share portfolio has suffered the turbulence triggered in the financial markets started in 16 July onwards, due to the lack of liquidity caused by the sub-prime mortgages in the United States, mainly in the third quarter of the year. At 31 December 2007, GAV stood at EUR 26,193 million, slightly higher than at 30 June 2007.

On 17 January 2008, Criteria CaixaCorp paid its shareholders a gross dividend of EUR 0.03/per share out of the profit for 2007, which was distributed based on recurring net profit in October and November. This dividend is equivalent to annual profitability of approximately 4%. In order to fulfil our obligation to distribute approximately 90% of the individual recurring net profit since the flotation of the Company’s shares, the Board of Directors of Criteria CaixaCorp will propose to the shareholders at the Annual General Meeting to be held at the end of the first six months of 2008, the distribution of a final dividend corresponding to the recurring net profit in 2007.

The most significant financial information of the Company is as follows:

INDIVIDUAL FINANCIAL STATEMENTS

Millions of Euros 31/12/07 31/12/06

Recurring net profit 2 620 646

Total net profit 2,316 1,833

Nº shares (in millions) 3,363 2,630

EPS/total net profit (EUR)1 0.83 0.70

EPS/recurring net profit (EUR)1.2 0.22 0.24

Recurring operating expenses / NAV (%) 0.07% 0.04%

01/10/07-31/12/07

EPS / recurring net profit 4th Quarter (EUR) 0.06

Note:

(1) Taking into account the effect of the IPO, weighted number of shares for the corresponding period (EUR 2,789 million of equivalent shares).

(2) The reversal of the portfolio allowance in 2006, amounting to EUR 101 million should be taken into account.

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CONSOLIDATED FINANCIAL STATEMENTS

Millions of euros 31/12/07 31/12/06

Recurring net profit 1,180 899

Net profit attributable to the group 1 1,726 2,159

Note:

(1) Decrease in profit due to the effect of the change in the scope of consolidation and significant divestments in 2006.

As can be observed, the individual net profit at 31 December 2007 was 26% higher than during the same period in the previous year, due basically to the recurring dividends which were 4% higher than during the same period in the previous year, despite the impact of the divestments. Recurring net profit amounted to EUR 620 million. Recurrent expenses as a percentage of NAV are among the best ratios in the market (below 0.1% of NAV).

Group performance

The portfolio of investees at 31 December 2007 are as follows:

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Services Ownership interest 1

Seat(s) on the Board of Directors

Market Value2

Listed 19,926

Energy Gas Natural 35.53% 5 of 17 6,366 Repsol YPF 12.67% 2 of 16 3,770 Infrastructure Abertis 21.12% 6 of 21 2,972 Services/others Agbar 27.67% 5 of 12 1,140 Telefónica 3 5.48% 2 of 17 5,540 BME 3.53% 1 of 15 138

Unlisted/Private Equity 929

Port Aventura 97.12% 10 of 12 Hotel Caribe Resort 60.00% 4 of 7 Property portfolio 100.00% 7 of 7

Financial and insurance business Ownership interest 1

Seat(s) on the Board of Directors

Market Value2

Listed 1,992

International banking Banco BPI 25.02% 2 of 21 1,019 Boursorama 20.44% 2 of 10 143 The Bank of East Asia 8.89% - 683 Banco Comercial Portugués 1.03% - 109 Other - 38

Unlisted 2,666

Insurance 2,250 CaiFor 100.00% 11 of 11 GDS Correduría de Seguros 67.00% 1 of 1 Specialised financial services 416 InverCaixa Gestión 100.00% 6 of 6 CaixaRenting 100.00% 4 of 4 Finconsum 100.00% 8 of 8 GestiCaixa 100.00% 7 of 7

Total LISTED 21,918

Total UNLISTED 3,595

Other committed investments (AGBAR) 680

TOTAL GAV 26,193

Notes:

(1) Direct and indirect ownership interest

(2) Figures in millions of euros

(3) Approximately 0.94% of the ownership interest subscribed Equity Swap agreements, amounting to EUR 726 million.

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The GAV distribution of the current portfolio is as follows:

Services - Listed

76%

Non-listed

services

3%

International

Banking

8%

Insurance and

Financial

services

10%

Outstanding

acquired

commitments-

Agbar

3%

The services sector currently amounts to 82% of GAV, while the financial sector stands at 18%. Criteria CaixaCorp’s strategic objective is to change this portfolio mix in the medium to long term, increasing the weight of the financial sector to between 40 and 60%.

Investments in 2007

The accumulated total investments and divestment commitments in 2007 amounted to EUR 4,256 million. The transactions performed during the reorganisation process were not included.

Accumulated 2007

Millions of Euros % acquired Cash

Telefónica (1) 1.46 1,130 1

CaiFor (50%) / SegurCaixa (20%) (2) 50.00 1,018

The Bank of East Asia (3) 8.89 628

Abertis 1.71 232

AGBAR (4) 4.16 172

BME 3.53 123

Finconsum 45.00 50

Repsol YPF 0.17 53

Port Aventura 3.14 12

Boursorama 0.82 8

Gas Natural 0.01 2

Atlantia 0.02 2

Banco BPI 0.02 1

BCP 1.03 105

Other - 40

Total materialised 3,576

Agbar 680

Total committed 680

Total 4,256

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Notes: Both the investments made by Criteria CaixaCorp and those by the Group’s holding companies are considered.

(1) Approximately 0.94% contracted Equity Swaps totalling EUR 726 million. (2) EUR 950 million relates to the purchase of the Caifor Group from Fortis and EUR 68 million to the

payment of capital calls. (3) Including the capital increase performed by The Bank of East Asia at year-end. (4) Criteria CaixaCorp, together with Hisusa and Suez Environment España, purchased the ownership

interest held by Torreal in AGBAR.

The main investments which materialised during the second half of the year relate to the acquisition of all of the shares held by Fortis in CaiFor and SegurCaixa, the acquisition of 4.16% of the share capital of Agbar from Torreal, and the acquisition of 8.89% of the share capital of The Bank of East Asia. All of these investments were in line with the strategy set forth by Criteria CaixaCorp management. Furthermore, we also increased our ownership interest in companies which already belonged to our portfolio, particularly Abertis, Repsol YPF and Telefónica.

The purchase commitment acquired during the second half of 2007 and which had not yet materialised at 31 December 2007, related to the takeover bid on Agbar’s shares. On 1 October 2007, Criteria CaixaCorp, Hisusa, Suez Environnement and Suez Environnement España applied to the Spanish National Securities Market Commission for authorisation relating to the takeover bid on a total of 65,152,672 Agbar shares, representing 43.54% of the share capital. On 16 January 2008, the acceptance period for the takeover bid on the Agbar shares closed, the number of shares in the bid totalled 50,205,817 shares, representing 33.55% of the Company’s capital (77.06% of the shares targeted by the bid). This transaction, which was settled in January 2008, led to a payment by Criteria CaixaCorp of EUR 680 million.

Divestments in 2007

Total divestments in 2007, amount to EUR 1,281 million in terms of market value. The transactions performed during the reorganisation process were not considered.

Accumulated 2007

Millions of Euros

% sold Market Value

Gains

Suez 1.1 527 220

Atlantia 2.0 287 30

Caprabo 20.0 259 81

OHM Group 40.2 172 45

Other - 36 9

Total 1,281 385

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The most significant divestments during this six-month period relate to:

� Suez: it has been sold to a third party, the participation in Suez that Criteria CaixaCorp had previously sold the group company Negocio de Finanzas e Inversiones I, obtaining net capital gains of EUR 220 million.

� Caprabo: In September, the sales transaction concluded, obtaining consolidated gains before tax of EUR 90 million (EUR 81 million after tax). The net IRR since 2003 was 8.0%.

� OHM Group: At the end of July the sale of this ownership interest materialised, generating consolidated gains before tax of EUR 50 million (EUR 45 million after tax). The net IRR since 1998 was 1.5%.

The most significant aspects of the share portfolio are detailed as follows:

SERVICES

Listed

This group is composed of leading companies, mainly located in Spain, which have a capacity to generate growth and create value, in the energy, infrastructure and services sectors in which Criteria CaixaCorp is gaining knowledge and experience. The Company is aiming to intensify its active presence in the governing bodies of these companies, in proportion to the investment carried out and exercise a significant influence in their management.

Gas Natural is an energy services multinational, engaged in the supply, distribution and marketing of natural gas in Spain, Latin America, Morocco, Italy and France, with a portfolio of 10.7 million customers. The deregulation of the energy industry has allowed the group to be present in the electricity generation business and the marketing of other energy products and services. Gas Natural’s total assets exceed EUR 13,200 million.

Repsol YPF is an integrated international oil and gas company, with activities in over 30 countries, and it is leader in Spain and Argentina. It is one of the ten-largest private oil companies in the world and the largest private company in the energy industry in Latin America in terms of its volume of assets. Repsol YPF’s total assets exceed EUR 46,800 million.

Abertis is one of the leading European companies in infrastructure development and management, with over 3,300 kilometres of managed toll roads and total assets in excess of EUR 20,000 million. In the last few years, it has intensified its geographical and business diversification with investments of over EUR 3,070 million in French and Portuguese motorways, EUR 1,269 million in telecommunications and EUR 271 million in Latin American airports.

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Aguas de Barcelona (AGBAR) is a multiconcessionary operator focused on the water business, sanitation and health. It is leader in the Spanish market, present in Latin America and has total assets in excess of EUR 6,500 million. Criteria CaixaCorp and the Suez Group launched a joint takeover bid on all of the shares of AGBAR, which was authorised by the Spanish National Securities Market Commission on 27 December 2007. Once the takeover bid has been settled, Criteria CaixaCorp, through Hisusa, will directly and indirectly own 44.11% of AGBAR’s share capital and the Criteria CaixaCorp group and the Suez group will jointly exercise control over the company.

Telefónica is one of the leading integrated telecommunications operators in the world. It is a benchmark company in the Spanish and Portuguese-speaking markets and is present in Spain, the rest of Europe and the main Latin American countries. In Spain, Telefónica provides services to over 45 million customers. In the European countries where it operates, it provides services to over 40 million customers and in Latin America, to over 126 million customers. Telefónica is ranked number one in the telecommunications industry in Europe as an integrated telecommunications operator in terms of market capitalisation. Its total assets are in excess of EUR 105,600 million.

BME is the company which integrates all of the systems for the registration, clearing and settlement of securities and Spanish secondary markets. In 2007 it achieved historic levels of trading, capitalisation and settlement, with this being a record year for admissions to trading and the fifth consecutive year of profitability for investors in its markets.

Unlisted

The intention is to boost this line of business, take advantage of the knowledge acquired, by investing in business projects and having a potential to generate value and moderate risk in sectors with a capacity for growth.

Port Aventura has continued to develop, consolidating its position as the most important recreational and residential tourism destination in Mediterranean Europe. The park’s good performance is noteworthy, achieving a record number of visitors in excess of four million. Average hotel occupancy was 76%, up 5.5% on the previous year. Also, the basic development project is almost completed (March 2008), as well as the construction of three golf courses with a total of 45 holes, the inauguration of which is expected to take place in the second quarter of 2008.

Hotel Caribe Resort has 503 rooms and it is located at the Port Aventura Resort. Since 2006, the hotel has been managed by Port Aventura with a view to maximising occupancy and obtaining synergies.

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FINANCIAL SEGMENT

International Banking

In the scope of investments in the financial sector, Criteria CaixaCorp will act as the vehicle of expansion of “la Caixa”, through the acquisition of financial entities.

Banco BPI is a multi-specialised, universal financial group, focused on commercial banking aimed at private individuals and small and medium-sized companies, and is the fourth most important private financial group in Portugal.

It has total assets of more than EUR 41,500 million and a commercial network of over 700 branches.

Boursorama is the main on-line distributor of savings products in France, with total assets of almost EUR 3,000 million. It also operates in the United Kingdom, Spain and Germany where it is ranked second, third and fourth in terms of this online activity. As a result of the purchase and absorption in 2006 of CaixaBank France, it rechannelled its activity in France towards a direct banking model, integrating a network of 20 branches and a complete range of banking products and services. In 2007 Criteria CaixaCorp exceeded the ownership interest limit of 20%, thereby reflecting the stable nature of this investment.

The Bank of East Asia (BEA), with assets totalling more than EUR 30,000 million, more than 200 branches and 8,900 employees is the number one private independent bank in Hong Kong, and one of the best positioned foreign banks in China, where it has over 50 branches. Founded in Hong Kong in 1918, it offers commercial, corporate and investment banking services to its customers. It provides services to the Chinese community abroad by operating in other Asian countries, the United States, Canada and the United Kingdom.

In 2007 Criteria CaixaCorp invested in the bank in two stages; first, through the acquisition of interests in organised markets and, subsequently, through the subscription in full of a capital increase aimed at strengthening growth in China. At 31 December 2007, it held an interest of 8.89%. This situation led to the signing of a strategic commercial cooperation agreement between “la Caixa” and the bank, enabling “la Caixa” to offer its customers a high quality platform in Asia.

Insurance

In 2007 Criteria CaixaCorp gained exclusive control over the insurance activity of the Caifor Group. The Caifor holding company, which carries on its activity through its subsidiaries VidaCaixa and SegurCaixa, has a wide range of life and non-life products, which it offers its customers on a personalised basis. Over 3 million customers have taken out pension and insurance plans.

VidaCaixa’s activity is focused on life insurance, including all of the group’s new production and managing pension plan assets totalling EUR 11,282 million, ranking it in second place in the industry in this branch of activity. The organic growth of the business strengthens VidaCaixa as the leading life insurance company with a volume of

- 14 -

mathematical provisions of EUR 15,852 million. Conversely, VidaCaixa has consolidated its position as leader in the corporate employee welfare segment, with managed assets of approximately EUR 11,776 million. The risk products (basically life, accident and homeowners’ insurance) continued to achieve significant growth in 2007, particularly with respect to products linked to mortgages and loans to homeowners.

SegurCaixa is the company within the holding company focused on nonlife insurance and mention should be made of its entry into the car insurance business in 2007.

Specialised Financial Services

InverCaixa Gestión, is the company which manages collective investment institutions, achieving a volume of approximately EUR 14,000 million and a 5.6% market share which positions InverCaixa as the third-largest investment fund manager in Spain. Over the past few years, the current management model, which is based on customer segmentation and on the establishment of different profiles (i.e. profitability, risk) for each segment, has consolidated its position while strengthening the management of customers with greater strategic value (personal banking and private banking). The first hedge fund was also set up in addition to a specific range of funds for businesses.

CaixaRenting is specialised in renting transactions, both in the car and capital goods areas. The commercial policy developed over the past few years has intensified its presence in the small and medium-sized companies’ sector, via distribution through “la Caixa”. In 2007 new vehicle and capital goods rental transactions anounting to EUR 443 million were arranged, up 10% on the previous year. It manages a total of 35,986 cars, 30,927 under renting agreements and 5,059 under fleet management.

Finconsum engages in consumer financing at the point of sale, the issuance of credit cards and credit lines through direct marketing. In 2007 it contributed EUR 762 million of new business.

GestiCaixa has continued to further its activity in the financial markets as an asset securitisation management company. In 2007 four new funds were structured and set up, two for mortgage securitisation and two for asset securitisation, with total issues of EUR 4,250 million. At 31 December 2007, the company managed 26 securitisation funds, with EUR 13,961 million in outstanding bonds.

2- RISK MANAGEMENT

The Group’s main financial risks are those associated with the investee portfolio.

This risk refers to the possibility of decreases in equity and losses arising due to changes in market prices and/or for the losses on the positions composing the investment portfolio at medium- to long-term.

Criteria CaixaCorp has specialised teams which continually monitor investee transactions, more or less in accordance with the Group’s level of influence in them, using a combination of indicators which are updated periodically. Also, with the support of the Strategic Risk Management Division of “la Caixa”, investment risk measures are taken, both from the standpoint of market-price volatility using VaR models on the earnings spread with the

- 15 -

risk-free interest rate as proposed by Basel II for banks, and from a point of view of the possibility of a loss, applying models based on the Probability of Default and Loss Given Default (“PD” and “LGD”), also in accordance with the provisions of the New Basel Capital Accord.

Management monitors these indicators on an ongoing basis to be able to take in any moment the most appropriate decisions on the basis of the market performance observed and predicted and on the Group’s strategy.

These methods and tools permit adequate evaluation and measurement of the Group’s exposure to risk and, as a result, take the decisions required to minimise the impact of these risks.

3- USE OF FINANCIAL INSTRUMENTS

The Group uses different types of financial derivatives to hedge the financial risks described in the preceding paragraph.

The most significant instruments were assigned for accounting purposes as:

(a) Fair value hedges, which hedge the exposure to changes in the value of a portion of the investment in Telefónica, S.A. (0.94%) and,

(b) Cash flow hedges, which reasonably hedge the change in market interest rates in relation to loans granted to customers at fixed interest rates.

4- OUTLOOK

As defined in its strategy, Criteria CaixaCorp, will be the vehicle for international expansion of “la Caixa”. This expansion will consist of exporting the retail banking model –responsible for “la Caixa”’s leadership of the Spanish market- to other countries. Criteria CaixaCorp will prioritise investments in the financial and insurance sectors, until it reaches a break-even point in its investment in services portfolio in the medium term, without jeopardising its presence in strategic sectors of the economy such as telecommunications, energy and the management of infrastructure and basic services.

The main objectives are based on creating value for shareholders, through:

• Investing in accordance with the defined strategy.

• Attractive remuneration for the shareholder

• The active management of the ownership interests through participation in their governing bodies.

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• Competitive operating expenses.

In 2008 the Group expects to increase its dividend income 42% compared to the previous year, principally due to:

� Increasing the profit of the investees.

� A more aggressive dividend policy, already announced by several listed investees.

This increase in income, together with maintaining operating expenses at no more than 0.1% of NAV, will allow an estimated increase in net recurring profit of 26% to be obtained, compared to the previous year.

5- EVENTS AFTER THE BALANCE SHEET DATE

On 16 January 2008, the acceptance period for the takeover bid launched on the Agbar shares closed. At 31 December 2007, the Agbar shares held by Hisusa, Suezgroup, and Criteria CaixaCorp (the Offerors) totalled 84,489,035, implying a total ownership interest of 56.461%. As a result, the number of issued shares affected by the bid was 65,152,672. Following the close of the acceptance period and in accordance with the result of the takeover bid published by the Spanish National Securities Market Commission on 18 January 2008, the number of shares in the bid totalled 50,205,817, at a price of EUR 27.65 per share. The shares were distributed among the offerors as follows:

Offeror No. of Shares (Thousands of Euros) Payment Outstanding

Hisusa 20,260,160 560,193

Suez Environment 15,272,286 422,279

Criteria Caixa Corp 14,673,371 405,719

50,205,817 1,388,191

Criteria CaixaCorp’s direct ownership interest in Agbar following settlement of the takeover bid is 11.55% whilst the Group’s ownership interest is 44.11%.

6- RESEARCH AND DEVELOPMENT ACTIVITIES

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The Group did not engage in any research and development activities in 2007.

7- TRANSACTIONS INVOLVING TREASURY SHARES

Within the framework of the admission to trading, “la Caixa” Group resolved to provide a share-based remuneration incentive for those employees serving prior to 31 December 2006. On 10 October 2007, the day Criteria CaixaCorp was admitted to trading, Criteria CaixaCorp’s group companies purchased on the stock market 694,600 treasury shares of EUR 5.25 share price (initial price per share) which were delivered within a few days in full and free of charge to all the employees fulfilling the agreed terms and conditions.

At 31 December 2007, none of Criteria CaixaCorp’s group companies held no treasury shares.

8- SHARE CAPITAL STRUCTURE

At 31 December 2007, the share capital of Criteria CaixaCorp was EUR 3,362.9 million, represented by 3,362,889,837 fully subscribed and paid ordinary shares of EUR 1 par value each.

9- RESTRICTIONS ON THE TRANSFER OF SHARES

The shares of Criteria CaixaCorp and the dividend rights deriving therefrom, included in the preemptive rights are freely transferable by all the means admitted in Law.

10- SIGNIFICANT DIRECT AND INDIRECT OWNERSHIP INTERESTS

The shares comprising the share capital of Criteria CaixaCorp when it was admitted to trading (10 October 2007), were distributed among over 360,000 shareholders and at the end of the business year, the only shareholder which appeared on the Register of the Spanish National Securities Market Commission (CNMV), with a significant ownership interest was “la Caixa”. According to information provided by the Company, “la Caixa” is the owner of 78.03% of its share capital, following the exercise of the green shoe option after the Company was admitted to trading.

11- VOTING RIGHT RESTRICTIONS

All of Criteria CaixaCorp’s shares outstanding, which are ordinary shares belonging to a single class and series, grant the same voting and dividend rights to its holders, which are the full voting and dividend rights inherent therein, as included in the Spanish Companies’ Law and the Company’s bylaws.

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Each share carries one vote, without any restrictions on the maximum number of votes which may be cast by each shareholder or by companies belonging to the same group, in the case of legal entities.

With regard to the entitlement to attend the Annual General Meeting, the bylaws and regulations of Criteria CaixaCorp’s Annual General Meeting establish that shareholders who individually or together with other shareholders, certify ownership of at least one thousand (1,000) shares, are entitled to attend the Annual General Meeting.

12- SIDE AGREEMENTS

The Company has not been informed of the existence of any side agreements, the aim of which is to exercise voting rights at the Annual General Meetings or which restrict or influence the free transferability of Criteria CaixaCorp’s shares.

13- REGULATIONS APPLICABLE TO THE APPOINTMENT AND REPLACEMENT OF THE MEMBERS OF THE BOARD OF DIRECTORS AND AMENDMENT OF THE BYLAWS

The regulations governing the appointment and replacement of the members of the Board of Directors in Criteria CaixaCorp, are included in the bylaws (Articles 32 and 33) and Chapter VI of the Regulations of the Board of Directors relating to the Appointment and Removal of Directors (Articles 17 to 20), in addition to the general applicable regulation, established by the Spanish Companies’ Law (Articles 123 to 126, 131, 132, 137 and 138), and the Mercantile Registry Regulations (Section 5ª, Articles 138 to 148), which are summarised as follows. The Appointments and Remuneration Committee shall present to the Board of Directors the proposals for the appointment of independent directors so that the former may proceed to the appointment thereof, in the case of co-optation or to adopt such proposals as its own in order to submit them for approval by the Annual General Meeting. Furthermore, the Appointments and Remunerations Committee will inform the Board of Directors in relation to the appointment of the other types of directors.

When a director is removed from his position before the end of his mandate, the Board of Directors may appoint, by co-optation, a person to fill the vacancy until the date of the next Annual General Meeting, provided that it has been provided with the preliminary proposal or report from the Appointments and Remunerations Committee, as appropriate.

With regard to amendments to the bylaws, since the Company’s scope does not include special regulations, the general regulation established by the Spanish Companies’ Law (Chapter VI, Article 144 and thereafter) and by Mercantile Registry Regulations (sections 9ª and 10ª, (Articles 158 to 173), is applicable.

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14- POWERS OF THE MEMBERS OF THE BOARD OF DIRECTORS

The president of the Board of Directors, Ricard Fornesa Ribó, has been granted with all powers of attorney from the Board of Directos except for those explicitely non attributable by law and Company’s laws.

No powers of attorney have been individually granted in favour of members of the Board of Directors, except for the general power of attorney granted to Mr. Isidre Fainé Casas so that he may individually (joint and severally) act on behalf of the Company without any amount limitations.

In relation to powers regarding the possibility of issuing shares, on 6 September 2007, for the purpose of performing the Initial Public Offering on the shares of the Company, the Company’s sole-shareholder approved the share capital increase, by a nominal amount of up to EUR 657,500,000 and appointed the Board of Directors to establish a date for the execution thereof. Also, on that date, a second capital increase was approved which would be executed separately and subsequent to the first capital increase with the same authorisation as granted previously, to exercise the green shoe option. Finally, the same act also granted the Board of Directors of Criteria CaixaCorp, the power to increase share capital, at any time within the period of five years as from the adoption of the agreement, for an equivalent maximum nominal amount of EUR 1,314,935,400, with power to exclude the preemptive rights.

With regard to powers to repurchase shares, on the same date as mentioned above, the sole-shareholder resolved to authorise the Board of Directors of Criteria CaixaCorp to acquire the number of shares necessary to deliver them free of charge to each Criteria CaixaCorp employee serving prior to 31 December 2006 and to authorise the derivative acquisition of treasury shares, either directly or through group companies, subsequent to the date of admission to trading of the Company’s shares, within a period of 18 months as from the next day after the agreement.

15- SIGNIFICANT AGREEMENTS WHICH MAY BE AMENDED OR TERMINATED IN THE EVENT OF A CHANGE OF CONTROL

In relation to the effects of a potential change of control over the Company, no significant agreements exist, signed by Criteria CaixaCorp, which may come into force, be amended or terminated, in the event of a change of control. Without prejudice to the foregoing, as established by the Internal Relationship Memorandum of Understanding between Criteria CaixaCorp and “la Caixa”, when the latter no longer exercises effective control over the Company, both entities will be entitled to resolve the provision of the corresponding services, by giving reasonable notice (which will depend on the type of service involved), and subject to the determination in good faith, by the parties, of the costs of breach caused by early termination, where applicable, to each. “la Caixa” is considered to exercise

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control over Criteria CaixaCorp when it holds, either directly or indirectly, a majority stake in Criteria CaixaCorp or even if this ownership interest is equal to or less than 50%, whilst more than half of the directors of Criteria CaixaCorp have been appointed at the proposal of “la Caixa”.

Furthermore, in relation to the Agreement signed by Suez, “la Caixa”, Suez Environnement, Suez Environnement España, SLU and Criteria CaixaCorp SA regarding Hisusa and its ownership interest in Aguas de Barcelona, filed at the Spanish National Securities Market Commission on 19 July 2006, it was agreed that in the event of a change in the control of any of the companies which signed the agreement, the shareholder of Hisusa belonging to the group not affected by this change in control would be entitled to demand the dissolution and liquidation of Hisusa, in conformity with the principles established by the agreement.

16- AGREEMENTS BETWEEN THE COMPANY, MANAGEMENT, DIRECTORS OR EMPLOYEES WHO FORESEE INDEMNITY PAYMENTS ON TERMINATION OF THEIR RELATIONSHIP WITH THE COMPANY AS A RESULT OF A TAKEOVER BID

Lastly, in relation to the agreements between the Company and its management, directors or employees who are entitled to receive indemnity payments when they resign or are unjustly dismissed, or if the working relationship is terminated as a result of a takeover bid, the indemnity payments arising from the unilateral termination by the Company of the members of the governing bodies and the executive management of Criteria CaixaCorp amount to a maximum of EUR 1.5 million.

Date post:	22-Apr-2018
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