998 Rel. Semestral ind. SC ING - Salvador Caetano€¦ · Heavy Duty Vehicles 3.051 4.530 -1.479...

REPORT

INTRODUCTION

Our Company recognising the challenges and the problems arising from the prevailing economic outlook was able, through an efficient management and a more stringent control of the budget, to overcome theobstacles in the meantime raised and has continued to focus on the productive investments, particularly so in the refurbishment and modernisation of its industrial framework. In the meantime, below is a detailedanalysis of the performance showed in the various business areas of the Company:

INDUSTRIAL ACTIVITY OVAR PLANT

During the first half of the year the reality of the Ovar Plants outputs was marked by a decline in the CKD production (HIACE and DYNA) and by a growth in the Optimo minibus production.It should be stressed the project which is under way with TMC and its European representative aimed at adapting the Ovar Plant framework to the new reality of the Dyna exportation to the European Markets fromthe start of the next year.The Chart below illustrates the evolution of some production indicators in the Ovar Plant.

CARREGADO PLANT

Auto PaintDuring the first half of 2002 this activity showed a 11% sales growth and a sharp fall in the financial results from 18,4% to 4,4%, in relation to the same period the previous year. These indicators are reflecting theheavy investment made and the start of the new Line, operating still now at low levels of capacity utilisation (30%, only).The BCP-Body Colour Paint Line, started to operate in the early days of January and has encountered several kinds of problems caused by the fact that the chemical treatment system, exempted from chromium,has proved inappropriate, despite all the guarantees provided by the Producer, as originally foreseen.The product developed in laboratory when used in this painting process has not resulted satisfactorily for which it is now being improved by the German Supplier. This will have caused some disturbance in theremaining lines which will have prevented us to achieve the main objectives set in for the first half of the year. In the meantime, 7 paint robots and a paint shop were acquired and are now at the final phase of assembly and production planning. This investment will allow a more rationalising line and enable us to securenew projects for the parts paint.Given the number of industrial paint offers we have in the Carregado Plant it was created jointly with the “JAC Products”, a working group devoted to the survey and development in the industrial paint area. Weare firmly focused on providing vehicle suppliers with more modern powder and liquid paints.

Industrial PaintThis activity has showed a positive evolution and saw a sales growth of 71% influencing turnover to grow from 0,1% to 4,1 when compared to the same period a year earlier.The floor covering activity has not started during the first quarter of the year, by the fact that the working group was not fully prepared in technical and human resources terms. The renewal and acquisition of new equipment was completed, which has allowed us to expand our sales to other market areas and maximise return on our specialised labour.During the period under review, we have secured three major works of reference in the paint area, namely the Sines gas terminal and the painting of Sporting and Benfica Stadiums, works which are forecast to con-tinue throughout the next year.

JUN '02 JUN '01 JUN '00

SALES 212.229.230 201.013.922 216.921.157

CASHFLOW 9.396.452 10.072.526 11.527.388

NET INCOME 4.589.382 4.679.393 5.163.811

INTEREST AND OTHERS 2.188.413 2.979.055 2.103.057

PERSONNEL EXPENSES 15.238.132 20.949.362 21.476.360

NET INVESTMENT 2.246.745 6.891.291 869.615

GROSS WORKING CAPITAL 62.802.885 43.515.019 58.899.260

GVA 26.580.796 33.375.637 33.572.337

SALES UNITS 11.549 9.971 11.304

NUMBER OF EMPLOYEES 1.326 2.056 2.127

(Euros)

PRODUCTION 2002 2001 2000 1999 1998Jan./Jun.

Toyota Physic Units 1.968 4.068 4.533 5.943 6.430

Homogenized Units 1.948 4.434 5.596 6.157 8.068 Optimo

Optimo Physic Units 116 213 171 166 196

Hilux Transformed Units 1.134 1.608 2.415 3.201 4.266

CDV's Transformed Units 574 1015 990 1.838 1.856

Number of Employees 389 389 390 418 426

KEY FIGURES

Av. Vasco da Gama, 1410 – 4431-956 Vila Nova de Gaia – C.R.C. do Porto nº 12301 – N.I.P.C. 500 239 037 - Sociedade Aberta

1

COMMERCIAL ACTIVITYTOYOTA VEHICLES

Period: Jan/Jun Source: internal company registrations (sales to dealers net and to special customers/fleets, rent-a-car, government) (*) including 4-wheelers

With regard to Toyota activity vehicle sales achieved a positive growth compared to a year earlier, while a poor performance was seen in relation to the budget forecasts.Sales registered 20,5% over 2001 (+1.763 units), which represents 11% down the aimed targets set up for the current year, i.e., less 1.266 units. In order to help to understand this performance, we herewith present an analysis of the Home Market behaviour:

Period: Jan/Jun Source: ACAP Basis: Registrations made (*) including 4-wheelers

Portuguese market is experiencing a serious crisis, particularly in its more significant segment, i.e., the light passenger vehicles (-8,5%), followed by the segment of the commercial vehicles (-2,8%), which rep-resents in global terms, nearly 8% below the year before, which was already a recessive period in this area.So, not surprisingly we have failed to meet the sales targets set in, because the sector environment has worsened, rather than stagnating or even showing some signs of recovery, as we have foreseen.It should be stressed that, notwithstanding the recessive climate seen in the automobile sector, we have achieved a growth rate of 20,5% whereas the overall market fell by 7,8%.In the light passenger cars segment, in particular, the difference seen is considerably higher: Toyota grew by 37,3%, while home market fell by 8,5%.Such performance is justified by the tremendous success enjoyed in our marketplace by the new generation of the Corolla model – our traditional best-seller – and which was launched into our market at the begin-ning of the current year, as well as by the very interesting sales levels achieved by a further commercial phenomenon, the Yaris model, already in its third year of life.We expect to maintain over the second half of the year the positive performance seen until now, as well as to get a minor deviation from the budget figures, after revising the forecasts made for 2002, taking intoconsideration the recessive outlook of the home market.

MIDI COACHES

Despite the current poor economic environment, the midi coach activity during the first half of 2002 has shown a steady performance, enabling us to achieve the sales targets included in the budget.It should be noted that we have exported the first midi coaches to the Italian market and seen some clear signs of recovery in the UK and Spanish markets, though still considered insufficient to offset the lossesregistered in the German and the Portuguese markets, which derived from the prevailing adverse environment.For the second half of 2002 a slight deceleration is expected, because, in national terms, our traditional customers – Municipalities and IPPSS – have started facing some difficulty in receiving, timely, the requiredsubsidies for the acquisitions concerned. With respect to the foreign markets the situation will not be much different, for which some decline in sales is forecast, which will lead us to revise the production rates to be achieved in the Ovar Plant.

INDUSTRIAL EQUIPMENT

Cargo Handling Equipment In view of the world economic environment, and particularly of the current situation and EU requirements, the sales turnover of the Cargo Handling Equipment in the 1st half of 2002 fell by 19,1%, in comparisonwith the same period a year earlier.Within this scenario, the Toyota Forklift sales have followed the slow down market trend, though our sales only fell by 17,4%, as illustrated on Map below:

Estimates for the 2nd half’02 point to the downward trend seen in the 1st half’02.

Liebherr Earthmoving EquipmentAlthough the adjudication of Public Works tenders have declined by 40% during the course of the 2nd half of 2002 and there has been a sharp fall in the self loading mixers, the financial results achieved in thisactivity were positive though not fully satisfactory. Despite the fact that statistics include, as home sales, a large number of equipment destined to the foreign markets (Peru, Poland, Angola) we have secured a market share of 5% in the North of Portugal and of4,6%, in terms of home market.

We believe this situation is likely to aggravate throughout the second half of 2002, since a significant evolution is not forecast for the Public Works market.

2

Deviations2002 2001 Budget In 2001 In Budget

Qty % Qty %

Light Passenger Vehicles * 7.387 5.380 7.342 2.007 37,3% 45 0,6%

Light Commercial Vehicles 2.916 3.104 4.097 -188 -6,1% -1.181 -28,8%

Heavy Duty Vehicles 80 136 210 -56 -41,2% -130 -61,9%

Total 10.383 8.620 11.649 1.763 20,5% -1.266 -10,9%

2002 2001 DeviationsQty %

Light Passenger Vehicles * 131.294 143.550 -12.256 -8,5%

Light Commercial Vehicles 43.540 44.790 -1.250 -2,8%

Heavy Duty Vehicles 3.051 4.530 -1.479 -32,6%

Total 177.885 192.870 -14.985 -7,8%

Market Toyota Industrial Equipment1st Half '02 2nd Half '02

2002 2001

2002 2001 Deviat. Qty Quota Qty Quota Deviat.

Counterbalanced Forklifts 885 1.061 -16,6% 136 15,4% 162 15,3% -16,0%

Warehouse Equipment 383 506 -24,3% 30 7,8% 39 7,7% -23,1%

Cargo Handling Equipment 1.268 1.567 -19,1% 166 13,1% 201 12,8% -17,4%

1st half'02 1st half'01 Units %

Total Market 367 450 -83 -18,4%

Liebherr 17 13 4 30,8%

Market Quota 4,6 2,9

SPARE PARTS

Whole SalesWe have achieved a positive deviation in relation to the aimed target of 3,09% which had been set in, while an overall decline of 3,63% was seen when compared to previous year.The whole sales weight, per brand, was as follows:-

• 84,5% in “Brand A” - Toyota Genuine Parts• 12,6% in “Brand V” – Accessories and Merchandising Products• 2,9% in “Brand F” – Local Content

Despite having witnessed in recent years the transfer of the percentage sales weight to “Brand A”, it is seen in the first half of the year, the decrease of one percentage point in the Toyota Genuine Parts weight,distributed by the remaining brands (+0,3pp in the “Brand V” and + 0,7% in the “Brand F”).The Dealers net has achieved a purchasing value to the Importer of only 93,9%, in relation to the figures previously agreed between both parties which in some way justifies the fall seen in relation to 2001. It is expected that, at the year-end a wider market coverage after re-structuring the Dealers net, which was started last October.

Sales of “Brand A” (Toyota Genuine Parts)The objective set out for this 1st half of the year was over 1,85 p.p., whereas a fall of 3,3% was registered, in relation to the same period of 2001. Taking into account the growing competition of the grey importsmarket, added to Extra Care Product recommended by our Distributor, we may conclude that after all, we have showed a steady performance.

Sales of “Brand F” (Local Content)We have stood below 0,7% the target fixed up for this year. However, there was a rise of 3,83 p.p. over the same period last year, caused by the ageing of the units in circulation (decrease in the quantity of unitsassembled in our Ovar Plant).

Sales of “Brand V” (Accessories)The objective set forth was largely exceeded (+13,38%). In the meantime, there was a drop of 7,22 pp when compared to the same period a year before. This fact can be partly explained by the change of the CarTax Regime introduced in the beginning of 2001, which has adversely affected the 4-wheeler and the light commercial vehicle sales, influencing negatively the incorporation of accessories into these models. Inturn, it is increasingly seen new units equipped with standard equipment, which has obviously affected the sale of accessories. We have been claiming insistently with our Distributor for the study and development of new products, so as to enable us to grow in this interesting business area.To conclude, we can refer that the 1st half of 2002 is according to the objectives set in. However, major difficulties are expected and whose determining factors are the Extra Care Programme, the slow growth ofthe number of units in circulation, and the increasing fierce competition experienced and following the changes to the present Car Tax Regime (Block Exemption).On the other hand, the launch of both new cars (i.e. NG Corolla), and new products - the “Car Care”, the “Smart Repair Kits”, and “the Service Consumables” - allied to new programmes developed by the AfterSales Division are essential tools which jointly with Toyota, we intend to use with the view of overcoming the problems which may be raised, always focused on the improved performance of the sales /profitabil-ity levels.

HUMAN RESOURCES

The first half of 2002 was marked, in short, by some decisions in terms of management, among which is the postponement of the annual salary increase for the month of September and the rise in the number ofnegotiations by mutual consent, according to the Company early retirement programme. We have continued to adopt the policy of strictly controlling expenses.The process of the “performance management” has seen a slow progress. As far as the environmental policy is concerned, this continued to be developed, and the processes for the Certification was started.

FINANCIAL ACTIVITY

Despite a mere observation to the accounts now presented, seeming to show that the business turnover has rised only by 5,6% when compared to the same period of 2001, it should be noted that the splitting upof the Caetano Buses business (creation of the CaetanoBus) which took place in JAN’02 has somehow hampered the real sales growth, which stood at 21%, representing over 212 million Euro’s.The great success enjoyed by the new Corolla generation allowed the Company to leave, during the period under review, in a situation contrary to that experienced in the overall automotive market.It is however evident that when we operate within an unfavourable macro economic environment – clear GNP deceleration, negative evolution of the investment, extremely reduced home demand resulting fromthe high indebtedness held by the private sector – particular focus on strategic decisions should be kept.The heavy investment implemented on sales campaigns allied to the launch of the Corolla new generation have been decisive factors which hampered the increase of the results for the period under review, thoughalways according to the budget.We have thus achieved a Cash-flow around 9,4 million Euros, representing however a decrease of about 6,7% when compared with the same period a year earlier.In the financing area and despite the overall rise in spreads, the Company has properly adjusted its financial framework to prevailing conditions, namely through operations aimed at improving its Working Capital,for which at the end of the first half of the year under review the issue of a new Debenture Loan in the total amount of 15 million Euros was concluded. Benefiting from the stabilisation of the rate of reference of the Banking Loans, the net financial charges reached 2,2 million Euros ( a reduction of 26% in relation to the first half of 2001) which represents 1% ofthe Company turnover.Prosecuting the policy of observing the maximum rates allowed, the Company has achieved the value of 3,4 million Euros the amortisation of Fixed Assets.Finally, it should be outlined that the item State and Other entities has no amount in arrears.

PROSPECTS FOR THE COMPANY

Since the measures implemented until now by the Portuguese government have contributed very little to overcome our stagnated economy, the second half of 2002 represents to our Company a further challengeto the strategies set forth, taking into consideration the gloomy outlook predicted for the automotive market. Within this unfavourable environment, it is expected that the Company annual turnover may exceed the 400 millions Euros, leading the net income to stand at figures slightly over those achieved in 2001. Since the end of the first half of the year, under review, until now, there are no determining factors which may jeopardise the prospects for the end of the financial year, under review.

3

Vila Nova de Gaia, 13th September 2002

Board of Directors

Salvador Fernandes Caetano – President

José Reis da Silva Ramos – Vice-President

Takuichi Uranishi

Kosuke Shiramizu

Maria Angelina Martins Caetano Ramos

Salvador Acácio Martins Caetano

Ana Maria Martins Caetano

ATTACHMENT TO THE REPORTBOARD MEMBERS AND SOLE AUDITOR SHAREHOLDINGS

Board MembersSalvador Fernandes Caetano – As no deals were made, as at Jun 30’02 hold 352.465 shares, with the nominal value of Eur 1 per share.Jointly with his spouse, Ana Pereira Martins Caetano holds 70% of the Equity of FOGECA – Gestão e Controle, SGPS., S.A since its set-up, thus holding directly and indirectly 20.633.500 shares, which represents58,95% of the share capital and of the voting rights in this Company. JOSÉ REIS DA SILVA RAMOS - neither shares nor bonds.TAKUISHI URANISHI - neither shares nor boldsKOSUKE SHIRAMIZU - neither shares nor bonds.MARIA ANGELINA MARTINS CAETANO RAMOS - neither shares nor bonds. SALVADOR ACÁCIO MARTINS CAETANO - neither shares nor bonds.ANA MARIA MARTINS CAETANO - neither shares nor bonds.YASHIMASA ISHII - neither shares nor bonds.

Salvador Fernandes Caetano, Chairman of the Board of Directors, Maria Angelina Martins Caetano Ramos, spouse of José Reis da Silva Ramos – Vice-President of the Board of Directors, Salvador Acácio MartinsCaetano, and Ana Maria Martins Caetano, members of the Board of Directors of FOGECA – Gestão e Controle – SGPS, S.A , this Company has acquired on April 23, 2002, 25 shares at 2,90 Euro’s each one, for whichas at June 30, 2002, hold 20,281,035 shares, with per share, with the nominal value of 1 Euro, each one. Salvador Fernandes Caetano, Chairman of the Board of Directors, and José Reis da Silva Ramos husband of Maria Angelina Martins Caetano Ramos, Director of SALVADOR CAETANO FOUNDATION, this company madeno deals, for which, as at June 30, 2002, hold 600.629 shares, with the nominal value of 1 Euro, each one. Salvador Fernandes Caetano, Chairman of the Board of Directors, Maria Angelina Martins Caetano Ramos, spouse of José Reis da Silva Ramos, and Salvador Acácio Martins Caetano, members of the Board ofDirectors of COCIGA – Construções Civis de Gaia, SA., this Company had no deals, for which as at June 30, 2002, hold 290 shares, with the nominal value of 1Euro, per share.

Sole Auditor:MAGALHÃES, NEVES E ASSOCIADOS, Society of Official Auditors, represented by Jorge Manuel Araújo de Beja Neves – holds neither shares nor bonds.

STATEMENT OF DIRECTORS SHAREHOLDINGS

(ACCORDING TO Art. 447º OF CORPORATION CODE)

4

Shares Shares Shares SharesSHAREHOLDERS Held Acquired Sold Held

As at 31.12.01 In 2002 In 2002 As at 30.06.02

SALVADOR FERNANDES CAETANO (Chairman) 352.465 -- -- 352.465

JOSÉ REIS DA SILVA RAMOS(Vice.President) -- -- -- --

TAKUICHI URANISHI (Member) -- -- -- --

KOSUKE SHIRAMIZU (Member) -- -- -- --

MARIA ANGELINA M. CAETANO RAMOS (Member) -- -- -- --

SALVADOR ACACIO MARTINS CAETANO (Member) -- -- -- --

ANA MARIA MARTINS CAETANO (Member) -- -- -- --

YASHIMASA ISHII (Alt. Director) -- -- -- --

Shareholdings over half of Share Capital

STATEMENT OF SHAREHOLDERS’POSITION

(ACCORDING TO ART. 448º OF CORPORATION CODE)

Shareholdings over 1/10 of Share Capital

Shareholdings over 2% of Share Capital


As at 31.12.01 In 2002 In 2002 As at 30.06.02

TOYOTA MOTOR CORPORATION 9.450.000 -- -- 9.450.000


As at 31.12.01 In 2002 In 2002 As at 30.06.02

FOGECA-Gestão e Controle- SGPS, SA 20.281.010 25 -- 20.281.035

SHAREHOLDERS Shares Voting Rights (%)

TOYOTA MOTOR CORPORATION 9.450.000 27,000

FOGECA-Gestão e Controle- SGPS, SA 20.281.035 57,946

BALANCE SHEET

5

Gross Depreciations Net Assets Net AssetsASSETS Notes Assets Provisions JUN '02 JUN '01

FIXED ASSETS

INTANGIBLE FIXED ASSETS

Installation Expenses 8 1.178.521 1.056.171 122.350 26.602

R & D Expenses 8 1.104.618 667.595 437.023 56.157

Goodwill 983.568 983.568 0 24.944

10 3.266.707 2.707.334 559.373 107.703

TANGIBLE FIXED ASSETS

Land 13.946.668 13.946.668 13.937.043

Buildings 60.532.347 32.589.502 27.942.845 26.722.491

Machinery and Fixtures 32.720.736 24.113.719 8.607.017 5.908.754

Vehicles 8.099.462 4.763.938 3.335.524 1.619.807

Tools 7.437.827 6.800.269 637.558 279.388

Administrative Equipment 8.820.001 7.790.727 1.029.274 994.572

Other Fixed Assets 2.177.856 1.866.345 311.511 345.503

Construction in Progress 1.470.456 1.470.456 5.672.810

10 e 13 135.205.353 77.924.500 57.280.853 55.480.368

INVESTMENTS

Investments on Affiliates 16 18.095.769 204.507 17.891.262 18.071.262

Investments in Other Companies 48 5.977.425 1.497 5.975.928 5.975.928

Loan to Affiliates 16 14.857.308 169.591 14.687.717 9.533.809

10 e 34 38.930.502 375.595 38.554.907 33.580.999

CURRENT ASSETS

INVENTORIES

Raw Materials and Others 11.069.065 11.069.065 14.602.328

Production in Process 7.616.828 7.616.828 7.079.849

Built-up and Finished Products 17.012.469 17.012.469 11.881.473

Goods 34 53.082.824 500.539 52.582.285 57.280.496

88.781.186 500.539 88.280.647 90.844.146

MEDIUM AND LONG TERM CREDITS

Accounts Receivable 16 8.850.636 8.850.636

8.850.636 8.850.636

CREDITS AT SHORT TERM

Accounts Receivable 16 98.603.172 98.603.172 114.878.313

Notes Receivable 217.100 217.100 134.656

Doubtful Accounts Receivable 23 e 34 1.732.474 1.508.984 223.490 (122.076)

Down Payments 170.820 170.820 336.498

Other Credits 0 0 5.045

100.723.566 1.508.984 99.214.582 115.232.436

AVAILABILITIES

Bank Deposits 4.976.396 4.976.396 8.354.588

Cash 314.357 314.357 424.162

5.290.753 5.290.753 8.778.750

ACCRUED AND DEFERRED

Accrued Income 60.745

Deferred Costs 51 2.040.577 2.040.577 897.893

2.040.577 2.040.577 958.638

Total Depreciations 80.631.834

Total Provisions 2.385.118

TOTAL ASSETS 383.089.280 83.016.952 300.072.328 304.983.040

Administrative Manager

Alberto Luís Lema Mandim

(Euros)

Board of Directors



Takuichi Uranishi

Kosuke Shiramizu




6

Equity and Equity andSHAREHOLDERS' EQUITY & LIABILITIES Notes Liabilities JUN '02 Liabilities JUN '01

EQUITY

SHARE CAPITAL 36 35.000.000 35.000.000

RESERVE FOR REVALUATION OF FIXED ASSETS 6 e 40 5.323.962 6.706.443

RESERVE

Legal Reserve 40 5.322.603 4.998.603

Other Reserve 40 64.442.274 61.813.608

PROFITS CARRIED FORWARD 6 e 40 (662.075)

NET INCOME 40 4.589.382 4.679.393

Total Equity 114.016.146 113.198.047

LIABILITIES

PROVISIONS

Reserve According to Industrial Tax Code 34 7.288.708 7.288.707

MEDIUM AND LONG TERM LIABILITIES

Debenture Loan 50 19.874.999 9.749.998

Bank Loan 50 24.500.000

Accounts Payable Fixed Assets 15 359.278 383.501

44.734.277 10.133.499

CURRENT LIABILITIES

Debenture Loan 4.875.001 9.862.980

Bank Loan 50 68.188.903 108.488.542

Accounts Payable 50 26.350.299 24.439.285

Affiliates 16 5.420

Shareholders 13.230 13.021

Down Payments 252.589 295.480

Accounts Payable Fixed Assets 24.423 22.764

Accrued Taxes 15 13.224.170 10.093.071

Other Debts 49 2.589.757 2.291.855

115.518.372 155.512.418

ACCRUED AND DEFERRED

Accrued Costs 51 18.506.025 18.821.869

Deferred Income 51 8.800 28.500

18.514.825 18.850.369

Total Liabilities 186.056.182 191.784.993

TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 300.072.328 304.983.040

(Euros)

INCOME STATEMENT

7

COSTS Notes JUN '02 JUN '01

COST OF GOODS AND RAW MATERIALS

Goods 118.494.102 91.837.823

Raw Materials 41 32.768.755 151.262.857 47.691.923 139.529.746

SUPPLIES 25.543.863 21.643.559

PERSONNEL EXPENSES

Wage and Salary 9.764.125 13.953.056

Welfare

Pension Fund 31 381.747 546.557

Other 5.092.260 15.238.132 6.449.749 20.949.362

DEPRECIATIONS 10 3.446.032 3.050.538

PROVISIONS 0 3.446.032 0 3.050.538

TAXES 26.217.329 15.843.597

OTHER OPERACIONAL COSTS 2.433.879 28.651.208 827.579 16.671.176

(A) 224.142.092 201.844.381

INTEREST

Other 45 3.461.638 3.461.638 3.796.418 3.796.418

(C) 227.603.730 205.640.799

EXTRAORDINARY LOSSES 46 129.040 102.547

(E) 227.732.770 205.743.346

INCOME TAXES 6 e 49 1.759.730 2.416.232

(G) 229.492.500 208.159.578

NET INCOME 4.589.382 4.679.393

234.081.882 212.838.971

PROFITS Notes JUN '02 JUN '01

SALES

Goods 171.546.123 129.134.324

Built-up and Other Finished Products 31.726.236 64.497.541

SERVICE PROVIDED 44 8.956.871 212.229.230 7.382.057 201.013.922

VARIATION OF PRODUCTS 42 8.917.902 3.515.157

WORKS OF THE COMPANY FOR ITSELF 21.156

SUPLEMENTARY INCOME 8.291.090 5.687.366

SUBSIDIES 615.966 8.907.056 1.040.700 6.728.066

(B) 230.054.188 211.278.301

INCOME FROM INVESTMENTS 562.443 248.084

OTHER FINANCIAL INCOME

Related to Other Companies

INTEREST

Other 45 710.782 1.273.225 569.279 817.363

(D) 231.327.413 212.095.664

EXTRAORDINARY PROFITS 46 2.754.469 743.307

(F) 234.081.882 212.838.971

RESUMO:

Operational Income (B)-(A) = 5.912.096 9.433.920

Financial Income (D-B)-(C-A) = (2.188.413) (2.979.055)

Current Income (D)-(C) = 3.723.683 6.454.865

Income Before Taxes (F)-(E) = 6.349.112 7.095.625

Net Income (F)-(G) = 4.589.382 4.679.393

(Euros)


Alberto Luís Lema MandimBoard of Directors

Salvador Fernandes Caetano – Presidente

José Reis da Silva Ramos – Vice-Presidente

Takuichi Uranishi

Kosuke Shiramizu




NOTES TO THE BALANCE SHEET AND INCOME STATEMENT

INTRODUCTION

Salvador Caetano – Indústrias Metalúrgicas e Veículos de Transporte, S.A. (“Salvador Caetano” or “the Company”) was incorporated in 1946, with its headquarters in Vila Nova de Gaia, that mainly carrieseconomic activities included in the automotive sector, namely the import, assembly and commercialization of light and heavy vehicles; the industry of coaches; import and sale of earth and charge movementindustrial equipment; the commercialization of auto spare parts and accessories, as well as the corresponding technical assistance. Additionally, the Company carries the activity of surface treatment whichincludes industrial painting and lacquering of the construction and automotive sectors. Its shares are listed in the Lisbon Stock Exchange Market.In the end of October of 2001 was set up the company “CaetanoBus – Fabricação de Carroçarias, SA” (CaetanoBus, SA.) that mainly carry the economic activity of bus and coach bodywork production, and will beentitled, in general, to all rights for the production and commercialization of the “Caetano” brand.The assets (stocks and equipment) related with the activity of bus and coach bodywork production were sold in the beginning of the first semester of 2002 to CaetanoBus, SA (Note 10 and 46).Salvador Caetano is the head of a group of companies that mainly carry economic activities included in the automotive sector, which are described in Note 16, together with other financial information. The following notes are numbered as defined by the Official Chart of Accounts (“Plano Oficial de Contabilidade - POC) and the notes that are not included herein are either not applicable to Salvador Caetano ortheir inclusion is not significant to the reading of the accompanying financial statements. Amounts mentioned in these notes are expressed in Euros.

1. DEROGATION OF PORTUGUESE OFFICIAL CHART OF ACCOUNTS

Although there are no derogation of the Portuguese Official Chart of Accounts, the Company did not apply what is established in the Accounting Standard nº9/92 (“Directriz Contabilística”), regarding the appli-cation of the equity method, in relation to financial investments in Affiliated companies. However, the Company proceeded to the elaboration and presentation of consolidated financial statements (Note 16). The effect on single financial statements of the application of the equity method is shown in separate (Note 53).

3. BASIS OF PRESENTATION AND PRINCIPLE ACCOUNTING POLICIES

The accompanying financial statements have been prepared on a going concern basis from books and accounting records of Salvador Caetano, maintained in accordance with generally accepted accounting prin-ciples in Portugal.The principal accounting policies used in the preparation of the accompanying financial statements are as follows:

a) Intangible assetsExpansion expenses, goodwill and development expenses, which mainly comprise costs with technological development and studies and conception of prototypes are depreciated on a straight-line basis over aperiod of three years.

b) Tangible fixed assetsTangible fixed assets acquired up to 31 December 1997 are stated at cost and can be restated in accordance with Portuguese legislation (Note 12). Tangible fixed assets acquired after that date are stated at cost.Depreciation is computed on straight line basis on an annual basis, accordingly with the following useful lives:

Years- Buildings and Other Constructions 20-50- Machinery and Equipment 7-16- Transport Equipment 4-5- Tools and Utensils 4-14- Administrative Equipment 3-14- Containers 5-11

c) Lease contractsTangible fixed assets acquired under financial lease contracts and the corresponding liabilities are recorded by the financial method. Under this method the cost of the fixed assets and the corresponding liabili-ty determined in accordance with the contractual financial plan are recorded and reflected in the balance sheet (Note 15). Installments are composed of interest and capital refunding. Interest included in thelease installments and depreciation of the fixed assets are recognized in the income statement of the period to which they apply.

d) Financial investments Financial investments up to 20% in Salvador Caetano Group companies (Note 16), are stated at cost, and a provision is recorded to reduce costs to its net realizable value for each investment, if necessary.Dividends from Group companies are recorded in the statement of income of the period in which they are received (Note 45).

e) InventoriesMerchandise, raw, subsidiary and consumable materials are stated at average cost, which is lower than market value.Finished and intermediate goods and work in process are stated at production cost, which is lower than market value. Production costs include incorporated raw materials, direct labour, production overheads andexternal services.

f) Provisions for other risks and chargesIncludes the remaining part of the provision recorded in previous years according to the previous Corporate Income Tax Code (“ex - Código da Contribuição Industrial”) and is held to face doubtful accounts andinventories depreciation marginal risks, or other general risks. It also includes a Provision for Others Risks and Charges to face doubtful accounts in Group Companies and a provision for depreciation of used carsto face the strong fluctuation of this merchandise market prices.

g) SubsidiesNon refundable subsidies received to finance fixed and intangible assets are recorded when granted as deferred income, and recognized in the statement of profit and loss proportionally to the depreciation of thesubsidized assets. Operating subsidies are recorded as “Operating income“ in the period in which they are received.

h) Accruals basisSalvador Caetano records income and expenses on an accrual basis. Under this basis income and expenses are recorded in the period to which they are related independently of when the amounts are received orpaid. The differences between the amounts received and paid and the corresponding income and expenses are recorded in “Accruals and Deferrals” captions.

8

i) Employee termination indemnitiesThe Company has the policy of recording employee termination indemnities as an operational expense in the year in which they are agreed.

j) Deferred income taxThe company, according with the Accounting Standard nº 28/01, recorded in the semester, in “Accruals and deferrals “ captions, deferred income tax related to the tax effect of timing differences between theresults determined for accounting and taxation purposes ( Notes 6 and 51).Additionally these differences respecting to previous years were recorded in Equity captions, “ Reserve for revaluation on fixed assets” and “ Profit carried forward” ( Note 40), and the part referring the semes-ter was recorded in Income Statement captions, “Income taxes” (Note 6).The effect of this procedure is not relevant to the comparability of the Financial Statement of 2002 with previous years.

l) Discounted notesDiscounted notes receivable from clients and associated companies are deducted from the corresponding nominal accounts receivable. Interest is recorded on na accrual basis (Note 31).

6. INCOME TAXES

In accordance with current legislation the Group companies tax returns are subject to review and correction by the tax authorities during a period of four years (five years for the period open till 1998). Consequently,the tax returns for the years still open up to 2001 are still subject to review. Social Security returns can be reviewed during a period of ten years. The Board of Directors of Salvador Caetano believes that any cor-rections resulting from reviews/inspections by the tax authorities to the tax returns open to inspection will not have a significant effect on the individual financial statements of this Company neither on the accom-panying consolidated financial statements.Amounts and nature of the assets and liabilities for deferred taxes recorded in the semester comprise:

Additionally the Income Statement caption “Income taxes” was determined like follows:Income taxes of 2002 (Note 49) 1.871.467Deferred income taxes of 2002 -111.737

1.759.730

7. AVERAGE NUMBER OF PERSONNEL

During the 1st semester of 2002 and 2001 the average number of employees was as follows:

The significant reduction in the number of employees in service in the Company is due to the transfer of personnel related to Bus and Coach bodywork production to the Group Company CaetanoBus, SA.

8. INSTALLATION, RESEARCH AND DEVELOPMENT EXPENSES

As of 30 June 2002, the net value of these items was as follows:

Installation Expenses:- Installation expenses and commercial expansion 1.785.521- Depreciation (1.056.171)

Total 122.350

Research and development expenses:- Studies and prototypes of Optimo’s new buses 336.875- Study of the new Dyna’s model 737.672 - Environment Study 30.071- Depreciation (667.595)

Total 437.023

10. MOVEMENT IN FIXED ASSETS

During the 1st semester of 2002, the movement in intangible and tangible fixed assets, and financial investments as well as in the accumulated depreciation and provisions was as follows:

9

Deferred Tax Deferred Tax Reflected in ReflectedAssets(Note 51) Liabilities(Note 51) Income Statement in Equity(Note 40)

Provisions not accepted

as fiscal costs 683.104 683.104

40% of depreciation as a result

of legal revaluation of fixed assets -1.337.066 -45.415 -1.382.481

Effect of the reinvestments

of the gains in fixed assets sales -1.278.857 -66.322 -1.345.179

683.104 -2.615.923 -111.737 -2.044.556

Items Jun '02 Jun '01

Employees 770 983

Production Personnel 567 1.097

1.337 2.080

The movement in “Disposals” verified in first semester of 2002 is in part due to the sale of the tangible fixed assets related to the activity of bus and coach bodywork production in sequence to the set up of thecompany CaetanoBus, with a gain of approximately Thousand Euros 2.243, wich was recorded in “Gains on fixed assets” caption (Note 46).The movement in ”Investments on Group Companies” is due to the merge, in the beginning of this year, of 10 companies of the Salvador Caetano Group operating in the retail sales in a new company SalvadorCaetano – Comércio de Automóveis, SA, like:

- Salvador Caetano (Porto), SA- Salvador Caetano (Minho), SA- Salvador Caetano (Coimbra), SA- Salvador Caetano (Setúbal), SA- Salvador Caetano (Algarve), SA- Salvador Caetano (Viseu), SA- Salvador Caetano (Caldas da Rainha), SA- Salvador Caetano (Espinho), SA- Unipark, SA- Salvador Caetano (CBEP), SA

The reduction in “Loan to Group Companies” was as follows:- Saltano – Investimentos e Gestão (SGPS), SA 1.621.093

12. RESTATEMENT OF TANGIBLE FIXED ASSETS (LEGISLATION)

Salvador Caetano restated its tangible fixed assets in accordance with Portuguese legislation as follows:Decree-Law 430/78, of 27 DecemberDecree-Law 219/82, of 2 June

10

Gross AssetsItems Opening Transfers and Ending

Balances Increases Disposals Write-offs Balances

Intangible Fixed Assets

Installation Expenses 1.139.890 14.191 24.440 1.178.521

Research & Development Expenses 1.675.821 138.625 -709.828 1.104.618

Key Money 983.568 983.568

3.799.279 152.816 - -685.388 3.266.707

Tangible Fixed Assets

Land 13.946.668 13.946.668

Buildings and Other Constructions 57.616.065 95.620 2.820.662 60.532.347

Machinery and Equipment 31.639.850 613.314 2.866.994 3.334.566 38.454.724

Vehicles 6.527.376 2.500.593 928.507 9.956.476

Tools 10.844.218 192.377 3.599.566 798 14.636.959

Administrative Equipment 9.976.576 268.881 1.425.456 11.670.913

Other Fixed Assets 2.489.821 25.069 353.318 16.284 2.884.492

Construction in Progress 7.211.355 833.373 316.081 -6.258.191 2.102.618

140.251.929 4.529.227 9.489.922 -85.881 154.185.197

Investments

Investments on Group Companies 18.095.769 9.868.046 -9.868.046 18.095.769

Investments on Other Companies 5.977.425 5.977.425

Loan to Group Companies 16.478.401 -1.621.093 14.857.308

40.551.595 9.868.046 - -11.489.139 38.930.502

Accumulated Depreciations and ProvisionsItems Opening Transfers and Ending


Intangible Fixed Assets

Installation Expenses 1.019.680 36.491 1.056.171

Research & Develepment Expenses 1.270.285 127.969 -730.659 667.595

Key Money 983.563 5 983.568

3.273.528 164.465 - -730.659 2.707.334


Buildings and Other Constructions 31.310.594 1.278.909 1 32.589.503

Machinery and Equipment 25.872.826 1.041.669 2.800.776 24.113.719

Vehicles 4.953.603 465.944 655.609 4.763.938

Tools 10.127.451 192.649 3.519.818 -13 6.800.282

Administrative Equipment 8.933.075 261.036 1.403.397 13 7.790.714

Other Fixed Assets 2.161.712 41.360 336.727 2.203.072

83.359.261 3.281.567 8.716.328 0 78.261.228

Financial Investments

Investments on Group Companies 204.507 204.507

Investments on Other Companies 1.497 1.497

Loan to Group Companies 169.591 169.591

375.595 - - - 375.595

Decree-Law 399-G/84, of 28 DecemberDecree-Law 118-B/86, of 27 MayDecree-Law 111/88, of 2 AprilDecree-Law 49/91, of 25 JanuaryDecree-Law 264/92, of 24 NovemberDecree-Law 31/98, of 11 February

A part (40%) of the increase in depreciation result of the legal revaluation of fixed assets is not acceptable as a cost for corporate income tax purposes (IRC), and the company recorded the liability for deferredtax (Note 6).

13. RESTATEMENTS OF TANGIBLE FIXED ASSETS

As of 30 June 2002, the acquisition cost and corresponding legal restatements of tangible fixed assets are as follows:

14. FIXED ASSETS BY LOCATION

As of 30 June 2002, the total amount of tangible fixed assets, including construction in progress, regarding each company premises, are as follows:

15. FINANCIAL LEASE

As of 30 June 2002, fixed assets under financial lease agreements were as follows:

As of 30 June 2002, Euros 359.278 are recorded as payables due under medium and long term rental contracts.

16. GROUP AND ASSOCIATED COMPANIES

As of 30 June 2002, the detail of Group and associated companies as for headquarters, percentage of share capital held, equity and net income, was as follows:

11

NetItems Cost Restatement Restated Value


Land and Natural Resources 7.944.425 6.002.243 13.946.668

Buildings and Other Constructions 23.953.182 3.989.663 27.942.845

Machinery and Equipment 8.471.671 135.346 8.607.017

Transport Equipment 3.335.524 3.335.524

Tools and Utensils 637.558 637.558

Administrative Equipment 1.027.717 1.557 1.029.274

Other Fixed Assets 311.034 477 311.511

Construction in Progress 1.470.456 1.470.456

47.151.567 10.129.286 57.280.853

Tangible Fixed ConstructionItems Assets in Progress Total

Head Office and Gaia Plant 51.651.791 843.218 52.495.009

Ovar Plant 30.423.126 30.423.126

Lisbon Facilities / Carregado Plant 51.659.980 627.238 52.287.218

133.734.897 1.470.456 135.205.353

Acquisition Acquisition RepayableItems Cost Year Restatement Depreciations Amount

Lisbon Premises 1.401.622 1993 224.260 231.688 383.701

Effective % of Total Net BalanceGroup Companies Capital Held Equity Income Value

Saltano - Investimentos e Gestão (SGPS), SA. 99,98% 21.120.689 62.997 4.488.183

Av. Vasco da Gama, 1410 - Oliveira do Douro - Vila Nova de Gaia

Salvador Caetano - Comércio de Automóveis, SA. 92,09% 46.923.596 981.188 9.868.048


Salvador Caetano España, SA. 99,23% 956.969 8.634 0

Ctra. de Andalucia (N-IV), Km 31,800

Ciempozuelos - España

Salvador Caetano (UK), Ltd. 98,00% GBP -455.487 GBP -136.227 2.097.830

Mill Lane, Heather-Coalville-Leicestershire

United Kingdom

Steia - Soc. Técn Equipam. Industriais e Acessórios, SARL 66,50% 0 0 204.507

Bissau

Guiné-Bissau

Salvador Caetano Moçambique, SARL 63,33% mMZM 2.607.816 mMZM -4.125.358 724.983

Av. Silva Cunha - Parcela 149 - Matola - Maputo

Moçambique

Salvador Caetano Coachbuilders Ltd. 98,00% GBP -5.755.750 GBP -700.593 0


United Kingdom

Due and payable balances with Group and associated companies, which, as of 30 June 2002, were recorded in the captions “Customers accounts receivable”, “Accounts payable to suppliers” and “Loans grantedto Group companies”, were as follows: - Accounts receivable

. Short Term 55.633.385

. Medium and Long Term 8.850.636- Accounts payable 3.886.547- Granted loans 14.857.308

23. DOUBTFUL ACCOUNTS RECEIVABLE

Accounts receivable considered as doubtful are included in the corresponding captions, amounting to Euros 1.732.474.

31. FINANCIAL COMMITMENTS NOT INCLUDED IN THE BALANCE SHEET

Pension FundSalvador Caetano constituted, by public deed dated 29 December 1988, the Salvador Caetano Pension Fund, which was subsequently updated in 2 January 1994 and in 29 December 1995. The Pension Fund was set up to, while Salvador Caetano maintains the decision to make contributions to the referred fund, provide employees, at the date of their retirement, the right to a pension complement,which is not updated and is based on a percentage of the salary, among other conditions. In accordance with an actuarial valuation made by the fund manager, Salvador Caetano contributes regularly to the fund, which as of 31 December 2001, reached an amount of approximately 21 millions of Euros,which exceeds the estimated past service liabilities on that date. These liabilities were calculated by the pension fund manager using the “Projected Unit Credit” method, the TV 77/73 mortality tables and theSuisseRe handicapped tables, as well as salary increase, pensions increase and average rate of return of 2%, 0% e 5%, respectively.During the 1st semester it was created a provision for the fund increase of, approximately, 382 thousand of Euros.

Other financial commitmentsAs of 30 June 2002, Salvador Caetano had assumed the following financial commitments:

12

Effective % of Total Net BalanceGroup Companies Capital Held Equity Income Value

Reliant Coaches Ltd. 98,00% GBP 369.301 GBP -12.306 0


United Kingdom

Cabo Verde Motors 87,43% mECV 132.437 mECV 18.623 463.493

Terra Branca - Praia

Cabo Verde

Forcabo, Lda. 87,34% mECV 12.665 mECV 259 0

Praia

Cabo Verde

Indicabo - Veiculos Automóveis, Lda. 87,35% mECV 4.269 mECV -157 0

Praia - Cabo Verde

Salvador Caetano - Aluguer Automóveis, SA. 99,99% 808.779 384.501 124.700

Rua José Mariani, 164 - Santa Marinha

Vila Nova de Gaia

CaetanoBus - Fabricação de Carroçarias, SA 73,98% 4.290.686 -1.708.683 0


Effective % of Total Net BalanceAffiliated Companies Capital Held Equity Income Value

Contrac, Gmbh 33,32% 3.465.773 -405.962 0

Max-Planck-Ring, 43 - Wiesbaden

Alemanha

IPE - Indústria Produtora de Espumas, SA. 24,99% 1.411.186 -275.825 0

Rua da Pereiras,275

Vila Nova de Gaia

Portianga - Comércio Internacional e Participações, SA. 32,99% 6.960.801 -477.218 0

Rua Campo Alegre, 1307 - Cave

Porto

Crustacil - Comércio Marisco, Lda. 26,39% -3.216.512 -328 0

Campo Grande, 28 - 9ºE

Lisboa

Robert Hudson, Ltd. 32,99% USD 5.285.833 USD -340.153 0

Rua Major Kanyangulu, 72 - Luanda

Angola

Amboim Pesca, Lda. 23,09% 0 0 0

Porto Amboim

Angola

Responsibilities Amount

Notes Receivable Discounted 20.729

L/Credit 1.236.797

Guarantee of Import Tax 32.113.411

33.370.937

34. MOVEMENT IN PROVISIONS

During 1st semester 2002, the movement in provisions was as follows:

36. COMPOSITION OF SHARE CAPITAL

As of 30 June 2002 Salvador Caetano share capital was represented by 35,000,000 bearer shares, totally subscribed and realized, with a nominal value of 1 Euro.

37. IDENTIFICATION OF CORPORATE ENTITIES WITH MORE THAN 20% OF ISSUED CAPITAL

- Fogeca – Gestão e Controle (S.G.P.S.), S.A. 58%- Toyota Motor Corporation 27%

40. VARIATION IN EQUITY ACCOUNTS

The movement in equity accounts, during the period ended 30 June 2002, were as follows:

The decrease in equity during the semester ended 30 June 2002, was due to the deliberation of the General Shareholders’ Meeting held on 23 April 2002, to distribute dividends amounting Euros 2.100.000 and bonusto employees of Euros 1.400.000.Commercial legislation establishes that at least 5% of the net profit of each year must be appropriated to a legal reserve until this reserve equals statutory minimum requirement of 20% of the share capital. Thisreserve is not available for distribution, except in case of dissolution of the company, but may be capitalized or used to absorb accumulated losses once other reserves have been exhausted. The revaluation reserve results from the revaluation of tangible fixed assets in accordance with current legislation (Note 12). This reserve is not available for distribution but may be capitalized or used in otherways specified in legislation.The movements in “Transfers” were due to the application of the profit of the year 2001 as mentioned above.The movements occurred in Reserve for Revaluation of Fixed Assets and Profit Carried Forward in the amounts of Euros 1.382.481 and Euros 662.075, were due to the effect of the recording the assets and liabili-ties for deferred taxes in accordance with the Accounting Standard nº 28/01 (Notes 6 and 51).

41. COST OF GOODS SOLD AND CONSUMED

The cost of goods sold and consumed for the 1st semester 2002 was as follows:

42. VARIATION OF PRODUCTION

The variation of production for the 1st semester 2002 was as follows:

43. REMUNERATION OF THE BOARD MEMBERS

The remuneration of the members of Salvador Caetano governing bodies during the 1st semester 2002 was as follows:

44. SALES AND SERVICES RENDERED BY GEOGRAPHIC MARKETS

Sales and services rendered by geographic markets, in the 1st semester 2002, was as follows:

13

Opening Ending

Items Balances Increases Utilisation Balances

Provision for Investments 375.595 375.595

Provision for Doubtful Accounts Receivable 1.907.677 398.693 1.508.984

Provision for Other Risks and Charges 7.288.708 7.288.708

Provision for Stocks 500.539 500.539

10.072.519 - 398.693 9.673.826

Board Members Amount

Board of Directors 196.289

Board of General Meeting of Shareholders 2.449

198.738

Raw Items Goods Materials Total

Opening Balances 65.448.496 19.503.707 84.952.203

Purchases 106.128.429 24.334.114 130.462.543

Closing Balances -53.082.824 -11.069.065 -64.151.889

118.494.101 32.768.756 151.262.857

Opening EndingItems Balances Increase Decreases Transfers Balances

Share Capital 35.000.000 35.000.000

Revaluation Reserve 6.706.443 -1.382.481 5.323.962

Legal Reserve 4.998.603 324.000 5.322.603

Other Reserves 61.813.608 2.628.666 64.442.274

Profit Carried Forward -662.075 -662.075

Net Income for the Year 6.452.666 4.589.382 -3.500.000 -2.952.666 4.589.382

Finished and Work inItems Intermediate Goods Progress Total

Closing Balances 17.012.469 7.616.828 24.629.297

Opening Balances -8.631.154 -7.080.241 -15.711.395

8.381.315 536.587 8.917.902

45. STATEMENTS OF FINANCIAL INCOME AND EXPENSES

The financial income and expenses for the 1st semester 2002 and 2001 comprise:

46. STATEMENTS OF EXTRAORDINARY INCOME AND EXPENSES

The extraordinary income and expenses for the 1st semester 2002 and 2001 comprise:

48. OTHER FINANCIAL INVESTMENTS

Other financial investments in companies listed on the stock exchange market, are reflected at acquisition cost, and the potential gains, not reflected on the balance sheet as of 30 June 2002, amount toapproximately Euros 5.998.902.

49. STATE AND OTHER GOVERNMENT ENTITIES

The liability caption “State and other government entities”, as of 30 June 2002, does not include outstanding overdue debts, and comprise:

50. BONDS AND BANK LOANS

As of 11 June 2002 Salvador Caetano issued a bond loan amounting to Euro 15.000.000, for a period of five years, with a nominal value of Euro 10 per bond, with a rate indexed to Euribor for 6 months added of1,15%. Interest is due each half year and postdated, and the first coupon is due on 11 December 2002. Reimbursement will be made by four equal installments on the dates of the 4th, 6th, 8th and 10th couponpayment. The total or partial anticipated reimbursement can be made as follow:

14

Internal ExternalItems Market Market Total

Light vehicles 167.620.725 3.464.396 171.085.121

Heavy vehicles 3.314.499 3.012.245 6.326.744

Industrial vehicles 4.617.005 320.224 4.937.229

Spare Parts and Accessories 20.325.559 597.706 20.923.265

Others 8.922.007 34.864 8.956.871

204.799.795 7.429.435 212.229.230

Costs and Losses Jun'02 Jun'01

Interest 2.957.070 3.243.213

Unfavourable Exchange Rate Differences 73.153 68.563

Cash Discount Granted 48.735 103.833

Other Financial Costs 382.680 380.810

Net Financial Expenses -2.188.413 -2.979.055

1.273.225 817.364

Income and Gains Jun'02 Jun'01

Interests 231.872 117.508

Revenue from Real Estate 275.000

Dividends 562.443 248.085

Favourable Exchange Rate Differences 30.403 293.443

Obtained Cash Discounts 10.486 54.371

Other Financial Income 163.021 103.957

1.273.225 817.364

Costs and Losses Jun'02 Jun'01

Donations 38.118 2.280

Losses on Inventories 6.331 11.162

Losses on Fixed Assets 27.503 54.444

Fines and Penalties 18.073 1.345

Prior Year Adjustments 2

Other Extraordinary Expenses 39.013 33.316

Net Extraordinary Income 2.625.429 640.761

2.754.469 743.308

Income and Gains Jun'02 Jun'01

Recover of Bad Debts 906

Gains on Inventories 182.832 97.998

Gains on Fixed Assets (Note 10) 2.481.321 589.105

Contractual Penalties 9.842

Reduction of Depreciations and Provisions (Note 34) 46.363

Prior Year Adjustments 32

Other Extraordinary Gains 89.378

2.754.469 743.308

Items Amount

Corporate Income Tax for the Year 1.871.467

Corporate Income Tax(payments in advance) -609.205

Vehicles Tax 4.094.769

Custom Duties 846.352

Value Added Tax 6.174.870

Other Taxes and Contributions 845.917

13.224.170

- “Call Option” - from the second date of payment of interests (Jun.2003). - “Put Option” - from the sixth date of payment of interests (Jun.2005).

As of 30 June 2002, bonds and bank loans can be detailed as follows:

51. ACCRUALS AND DEFERRED

As of 30 June 2002, these items were as follows:

Deferred CostsMaintenance charge 299.221Assets for deferred taxes (Note 6) 683.104Interest 229.016Others 829.236

2.040.577Accrued CostsVacations pay and bonus 5.868.626Vehicles Tax related with disposed vehiclesNot registered 2.902.400Liability for deferred taxes (Note 6) 2.615.923Interest 1.174.762Others 5.944.314

18.506.025Deferred IncomeSubsidies for investments 8.800

8.800

52. END-OF-LIFE VEHICLES

In September 2000 the European Commission voted on a directive regarding end-of-life vehicles and the responsability of Producers/Distributors for dismantling and recycling them. Producers/Distributors willhave to bear at least a significant part of the cost of the take back of vehicles put on the market as of July 1, 2002 and from January 1, 2007 for vehicles put on the market before July 1, 2002. This legislation willimpact Toyota vehicles sold in Portugal.Salvador Caetano and Toyota are closely monitoring the development of Portuguese National Legislation in order to access the impact on their financial statements.

53. EQUITY METHOD

Impact on Financial Statements of the Accounting Standard Nº 9 application

54. EXPLANATION ADDED FOR TRANSLATION

These financial statements are a translation of financial statements originally issued in Portuguese in accordance with generally accepted accounting principles in Portugal and the format and disclosures requiredby the Portuguese Official Plan of Accounts (“Plano Oficial de Contabilidade – POC), some of which may not conform with or be required by generally accepted accounting principles in other countries. In the eventof discrepancies, the Portuguese language version prevails.

15

Medium andLong Term Short Term

Bonds

Salvador Caetano ’99 4.874.999 4.875.001

Salvador Caetano ’02 15.000.000 -

19.874.999 4.875.001

Bank Loans

Debt securities - 14.963.937

Current loans - 52.724.966

Long term loans 24.500.000 500.000

24.500.000 68.188.903

Application of theItems Single Accounts Equity Method

Balance Sheet

Assets

Investiments 38.930.502 50.383.972

Shareholder's Equity

Adjustments to Financial Investments 14.623.538

Net Income 4.589.382 1.419.314

INCOME STATEMENT

Losses related to Subsidiaries andAffiliates Companies 3.170.068

Euros

LIMITED REVIEW REPORT BY AUDITOR REGISTERED IN CMVMON THE HALF YEAR NON-CONSOLIDATED INFORMATION

(Translation of a report originally issued in Portuguese) (Amounts expressed in Euro - ¤)

INTRODUCTION

1. In compliance with Article 246 of the Securities Market Code, we hereby present our Limited Review Report on the information of Salvador Caetano – Indústrias Metalúrgicas e Veículos de Transporte, S.A. (“theCompany”) for the half year ended 30 June 2002 which is included in: the Directors’ Report, the Balance Sheet (that reflects a total of ¤ 300.072.328 and shareholders’ equity of ¤ 114.016.146, including net prof-it of ¤ 4.589.382) and the Statement of profit and loss for the half year then ended and the accompanying notes.

2. The amounts in the financial statements, as well as the additional financial information, are in accordance with the Company’s accounting records.

RESPONSIBILITIES

3. The Company’s Board of Directors is responsible for: (i) the preparation of historical financial information in accordance with generally accepted accounting principles and that is complete, true, up-to-date,clear, objective and licit, as required by the Securities Market Code; (ii) adopting adequate accounting policies and criteria; (iii) the maintenance of an appropriate internal control system; and (iv) informing anysignificant facts that have influenced their operations, financial position or results.

4. Our responsibility is to examine the financial information contained in the above mentioned documents of account, including verification that, in all material respects, the information is complete, true, up-to-date, clear, objective and licit, as required by the Securities Market Code, and to issue a moderate assurance, professional and independent report on that financial information based on our work.

SCOPE

5. The purpose of our work was to obtain moderate assurance as to whether the above mentioned financial information is free of material misstatement. Our work was performed in accordance with the TechnicalReview/Audit Standards issued by the Portuguese Institute of Statutory Auditors, was planned in accordance with that objective, and consisted essentially of enquiries and analytical procedures with the objec-tive of reviewing: (i) the reliability of the assertions included in the financial information; (ii) the adequacy of the accounting principles used, taking into consideration the circumstances and the consistency oftheir application; (iii) the applicability, or not, of the going concern concept; (iv) the presentation of the financial information; and (v) whether, in all material respects, the financial information is complete,true, up-to-date, clear, objective and licit as required by the Securities Market Code.

6. Our work also included verifying that the financial information included in the Directors’ Report is consistent with the other above mentioned documents of account.

7. We believe that our work provides a reasonable basis for issuing the present limited review report on the half-year information.

QUALIFICATION

8. The accompanying financial statements reflect only the individual non consolidated accounts. The financial investments in Group companies are stated at cost, net of provisions and, consequently, the indi-vidual financial statements as of 30 June 2002 and 2001 do not reflect the effect on income and equity that would result if the equity method had been used. The Company prepared consolidated financial state-ments as of 30 June 2002, which reflect, as of that date, total consolidated net assets of ¤ 378.346.807 (¤ 355.736.770 as of 30 June 2001), and total consolidated equity of ¤ 125.469.616 (¤ 130.230.911 as of 30June 2001), including a net consolidated income of ¤ 1.419.314 (¤ 3.801.916 as of 30 June 2001). However, the last reports obtained from the Auditors of the affiliated companies are referred to the financial state-ments of those companies for the year ended as of 31 December 2001, and therefore, the financial statements of the affiliated companies as of 30 June 2002 were not reviewed, as they are only reviewed on anannual basis.

OPINION

9. Based on our work, which was performed with the objective of obtaining moderate assurance, except for the effect of the matter referred to in paragraph 8 above, nothing came to our attention that leads us tobelieve that the financial information for the half-year ended 30 June 2002 is not exempt from material misstatement that affects its conformity with generally accepted accounting principles and that, in termsof the definitions included in the Technical Review/Audit Standards referred to in paragraph 5 above, the information is not complete, true, up-to-date, clear, objective and licit.

16

Porto, 13th September 2002Magalhães, Neves e Associados - SROC

Represented by Jorge Manuel Araújo de Beja Neves

CONSOLIDATED REPORT

The climate of increased uncertainty surrounding the main world economies throughout the first half of 2002 is the main feature that characterises the background in which were developed the business activitiesnearly everywhere.Naturally, Portugal has also witnessed an adverse economic environment, given the fact that together with the serious consequences resulting from the cooling of external demand – according to the latest indi-cators the European demand shows a general stagnation – there are the widespread concerns arising from the fact that when the budget deficit was in excess of 3% of GDP, were taken severe measures that willhave obviously affected at once the economic agents prospects, with special emphasis on the consumers, in particular.On the other hand, having recently faced some difficulties in meeting the revised budget targets, which may delay the so desired inversion of expectations and allow us to achieve a sustained growth of our econ-omy we can anticipate a moderate recovery for the 2nd half of the year, under review, and where undesirable consequences are expected, following the Middle East armed conflict.In Portugal, from a look to the budget targets for the 1st half of the year, we can confirm the slowdown in domestic demand, where the severe crisis surrounding the civil construction sector and the sharp declinein the automobile market are determining factors which are obviously causing a major concern by the negative impact hence resulting. Companies belonging to our Group have redoubled efforts aiming to reverse the current declining trend seen and thus, since the beginning of 2002, a number of projects which were underway the previous year havebeen concluded, namely, the separation of the Gaia Plant activity of Salvador Caetano, I.M.V.T.-SA and the creation of the new company “CaetanoBus – Fabricação de Carroçarias, SA” (partnership with the DaimlerChrysler Group) and the merger of 10 Dealers constituting the company “Salvador Caetano Comércio de Automóveis, SA”.We can say that our universe of companies ended up reaching very satisfactory levels of performance, taking into consideration the surrounding circumstances. In reality, with regard to the performance of the automobile market, the wide appeal of the new Corolla version allied with the continued success enjoyed by the Yaris were decisive factors to enable us to performwell throughout the first half of 2002, showing a vigorous growth of 20,5%, while the overall market declined by 7,8% when compared to the same period in 2001. This evolution is of major importance by the effect on the after-sales services provided by the whole Toyota Dealers network, an effect which is not expected to be felt at once, but which will surely contribute forthe good performance of our activity, within the automobile sector.However, regarding the industrial activity, the coach bodywork production developed by the CaetanoBus, reflected clearly the adverse consequences of the terrorist attacks of September 11th 2001 in the U.S.A,besides already forecasted at the end of the previous year but which, unfortunately, by far exceeded the somewhat gloomy prospects that we have made.In reality, the activities connected with the air transport sector have seen a sharp decline, despite the hard efforts all the companies have deployed practically world wide, against the severe recession in demand,at the same time focusing on the stringent control of operating costs and on investment, as a way to achieve the required levels of performance.Adversely affected by the decrease in the rates of investment, the “Cobus” - the midi bus which is operating exclusively on airport platforms, - whose production during 2001 was at the rate of 5 units a week, throughout2001 has since that tragic date until now been reduced to the average of 1 unit weekly, generating obviously very low levels of capacity utilisation in the “CaetanoBus” company with all subsequent economic losses incurred. As the “Cobus” represents a world market share over 80%, it is likely that a slow recovery is seen, and that perhaps by the end of the first half of 2003 we may return back to a normal situation.Naturally, our German associate “Contrac GmhH” which exports this product (Cobus) all over the world saw its business turnover considerably reduced when compared to the same period in 2001, causing losseswhich totalled 407 thousand Euros. In our view, these losses are expected to be offset over the next 12 months, immediately the “Cobus” Market returns to its usual levels of performance.In the UK, our industrial Plant of Waterlooville has registered very low production rates, though some signs of recovery were evidenced at the start of the 2nd half of the year. The results in the meantime producedby this Plant (Salvador Caetano Coachbuilders) together with the poor sales levels achieved by this company (Salvador Caetano UK) ended up affecting negatively the overall results of the SC Group.In Spain, Salvador Caetano (Espanha), SA has showed a sustained performance, as well as our companies in Cabo Verde and Angola (Cabo Verde Motors and Robert Hudson, respectively). In Mozambique, our MatolaPlant (Salvador Caetano Moçambique) continued reflecting the deep economic crisis this market has been facing. We would very much like to see this situation overcome with our contribution. As a matter of fact,the Government entities from Mozambique must develop very significant efforts and raise the required conditions to improve the current economic outlook, without which it is unlikely to reach the minimum levelof profitability, allowing a high return from the investment implemented. In global terms, the SC Group turnover has achieved 258 millions Euros, which evidences 11,14% growth when compared to the same period the previous year, supported by the steady performance seen in the motorvehicle sector. However, the low production output rates achieved in the Caetano Coach bodywork Plants, together with the sharp fall in the coach demand already mentioned above, has adversely eroded the final profitability,with the positive consolidated results totalling 1,4 million Euros.On a movement of funds perspective, the exercise has evolved under normal conditions, with credit facilities at short and long term, which will comfortably be adjusted to any possible oscillations that may occurin the circuits of liquidity. The net investment for the period under review amounted to 47,2 million Euros, reflecting the entry into the consolidation perimeter, through the global integration of Salvador Caetano – Aluguer de Automóveis,SA, which holding a fleet of 3.524 vehicles, is influencing, in a significant way, this aggregate as well as the reintegrations concerned, with effect on the cash-flow evolution.

Finally, we are fully confident that a moderate evolution will be experienced during the second half of 2002, though we must take into account the latest forecasts from the Portuguese government pointing to aGNP growth between 0% and 1% for 2002.

CONSOLIDATED KEY FIGURES JUN '02 JUN '01 JUN '00

SALES 257.802.719 231.951.999 246.359.136

CASHFLOW 13.467.113 12.085.677 12.989.529

INTEREST AND OTHERS 3.156.248 3.838.936 2.517.705

PERSONNEL EXPENSES 30.298.044 30.953.556 29.243.023

NET INVESTMENT 47.286.839 6.830.241 (2.828.872)

GROSS WORKING CAPITAL 53.898.464 46.176.711 60.799.887

GVA 46.537.650 44.501.939 42.690.577

NUMBER OF EMPLOYEES 3.218 3.387 3.303

NET INCOME WITH MINORITY INTEREST 1.066.287 3.815.786 4.757.214

NET INCOME WITHOUT MINORITY INTEREST 1.419.314 3.801.916 4.638.170

(Euros)

Vila Nova de Gaia, 13th September 2002Board of Directors

Salvador Fernandes Caetano – PresidentJosé Reis da Silva Ramos – Vice-President

Takuichi UranishiKosuke Shiramizu

Maria Angelina Martins Caetano RamosSalvador Acácio Martins Caetano


Av. Vasco da Gama, 1410 – 4431-956 Vila Nova de Gaia – C.R.C. do Porto nº 12301 – N.I.P.C. 500 239 037 - Sociedade Aberta

17

18

CONSOLIDATED BALANCE SHEET

Gross Depreciations Net Assets Net AssetsASSETS Notes Assets Provisions JUN '02 JUN '01

FIXED ASSETS

INTANGIBLE FIXED ASSETS

Installation Expenses 25 1.706.258 1.315.016 391.242 78.957

R & D Expenses 25 1.152.928 675.647 477.281 58.027

Key Money 1.715.181 1.302.944 412.237 454.844

Goodwill 10 1.124.267 1.011.840 112.427 337.476

27 5.698.634 4.305.447 1.393.187 929.304

TANGIBLE FIXED ASSETS

Land and Natural Resources 27.026.290 0 27.026.290 24.301.756

Buildings 98.096.756 44.490.334 53.606.422 49.152.274

Machinery and Fixtures 43.000.115 31.681.808 11.318.307 9.009.352

Vehicles 58.381.347 13.408.091 44.973.256 5.839.343

Tools and Utensiles 8.618.397 7.587.301 1.031.096 473.460

Administrative Equipment 14.011.854 11.800.758 2.211.096 2.177.670

Other Fixed Assets 2.504.076 2.077.071 427.005 327.667

Construction in Progress 2.137.543 0 2.137.543 7.356.501

27 253.776.378 111.045.363 142.731.015 98.638.023

INVESTMENTS

Investments on Affiliates 4.254.869 0 4.254.869 4.190.779

Loan to Affiliates 249.399 0 249.399 249.398

Investments in Other Companies 46 8.269.174 206.004 8.063.170 8.163.959

Loan to Other Companies 46 1.605.080 169.591 1.435.489 1.449.948

Other Stocks 39.904 0 39.904 41.400

Real Estate Investments 3.743.944 2.514.865 1.229.079 1.360.407

27 18.162.370 2.890.460 15.271.910 15.455.891

CURRENT ASSETS

INVENTORIES

Raw Materials and Others 12.560.349 12.560.349 14.676.797

Production in Process 8.898.619 8.898.619 7.422.806

Built-up and Finished Products 26.014.484 26.014.484 30.867.466

Goods 74.325.143 995.786 73.329.357 73.259.240

46 121.798.595 995.786 120.802.809 126.226.309

CREDITS AT SHORT TERM

Accounts Receivable 82.523.397 82.523.397 100.736.765

Notes Receivable 1.227.358 1.227.358 1.577.725

Doubtful Accounts Receivable 6.364.218 5.383.146 981.072 629.741

Shareholders 0 0 0

Down Payments 313.094 313.094 336.498

Other Credits 1.048.831 1.086 1.047.745 482.161

46 91.476.898 5.384.232 86.092.666 103.762.890

MARKETABLE SECURITIES

Other 160.521 0 160.521 71.132

CASH AND BANKS

Bank Deposits 5.326.724 5.326.724 7.780.732

Cash 515.997 515.997 700.082

5.842.721 5.842.721 8.480.814

ACCRUALS AND DEFERRALS

Accrued Income 54 3.105.348 3.105.348 754.301

Deferred Costs 54 2.946.630 2.946.630 1.418.106

6.051.978 6.051.978 2.172.407

Total Depreciations 117.865.675

Total Provisions 6.755.613

TOTAL ASSETS 502.968.095 124.621.288 378.346.807 355.736.770



(Euros)

19

Board of Directors



Takuichi Uranishi

Kosuke Shiramizu




Equity and Equity andSHAREHOLDERS' EQUITY & LIABILITIES Notes Liabilities JUN '02 Liabilities JUN '01

EQUITY

SHARE CAPITAL 50 35.000.000 35.000.000

CONSOLIDATION DIFERENCES 12.087.030 11.833.876

ADJUSTMENTS TO FINANCIAL INVESTMENTS 1.281.702 126.301

IN ASSOCIATED COMPANIES

RESERVE FOR REVALUATION OF FIXED ASSETS 4.990.304 6.706.443

RESERVE

Legal Reserve 5.322.603 4.998.603

Other Reserve 66.033.735 67.763.772

PROFITS CARRIED FORWARD (665.072)

NET INCOME 1.419.314 3.801.916

Total Equity 52 125.469.616 130.230.911

MINORITY INTERESTS 4.993.650 4.399.928

LIABILITIES

PROVISIONS

PROVISIONS FOR RISK AND CHARGES 46 6.688.790 6.781.321

MEDIUM AND LONG TERM LIABILITIES

Debenture Loan 53 19.874.999 9.749.998

Fixed Assets Suppliers 47 359.278 2.517.181

Bank Loan 53 49.528.225 394.064

69.762.502 12.661.243

CURRENT LIABILITIES

Debenture Loan 53 4.875.001 9.862.980

Bank Loans 53 92.689.944 123.973.939

Accounts Payable 33.661.318 29.521.638

Notes Payable 773 23.265

Shareholders - Associated Companies 0 0

Shareholders - Others 26.438 15.205

Advances from Customers 557.761 609.097

Fixed Assets Suppliers 47 24.423 137.025

Public Entities 11.007.903 11.693.702

Other Creditors 1.446.632 2.641.213

144.290.193 178.478.064

ACCRUALS AND DEFERRALS

Accrued Costs 54 26.687.939 22.695.592

Deferred Income 454.117 489.711

27.142.056 23.185.303

Total Liabilities 247.883.541 221.105.931

TOTAL LIABILITIES+MINORITY INTEREST+ SHAREHOLDERS' EQUITY 378.346.807 355.736.770

(Euros)

20

Board of Directors



Takuichi Uranishi

Kosuke Shiramizu




CONSOLIDATED INCOME STATEMENT

COSTS Notes JUN '02 JUN '01

COST OF GOODS SOLD AND RAW MATERIALS CONSUMED

Merchandise 136.943.283 111.143.500

Materials 37.449.968 174.393.251 46.771.129 157.914.629

EXTERNAL SUPPLIES AND SERVICES 27.280.114 23.763.747

PAYROLL EXPENSES

Remuneration 20.781.406 21.508.263

Social Charges

Pension Fund 764.421 729.978

Other 8.752.217 30.298.044 8.715.315 30.953.556

DEPRECIATIONS AND AMORTIZATIONS 27 10.053.698 5.285.758

PROVISIONS 14.930 10.068.628 19.705 5.305.463

TAXES 26.420.367 16.011.117

OTHER OPERATING EXPENSES 1.490.055 27.910.422 855.013 16.866.130

(A) 269.950.459 234.803.525

DEPRECIATION OF FINANCIAL INVESTMENTS 27 60.953 54.477

LOSSES RELATED TO ASSOCIATED COMPANIES 365.647 240.432

INTEREST AND OTHERS 44 4.398.058 4.824.658 5.001.948 5.296.857

(C) 274.775.117 240.100.382

EXTRAORDINARY EXPENSES 45 464.309 513.136

(E) 275.239.426 240.613.518

INCOME TAX FOR THE YEAR 23 l) 2.359.811 2.963.644

(G) 277.599.237 243.577.162

MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES (353.027) 13.870

CONSOLIDATED NET INCOME FOR THE YEAR 1.419.314 3.801.916

278.665.524 247.392.948

PROFITS Notes JUN '02 JUN '01

SALES

Merchandise 185.889.993 143.332.859

Finished goods 54.782.635 71.399.143

SERVICE RENDERED 36 17.130.091 257.802.719 17.219.997 231.951.999

VARIATION OF PRODUCTS 7.851.805 3.601.901

WORK FOR THE COMPANY 54.501 22.357

SUPLEMENTARY INCOME 8.688.053 6.464.582

OPERATING SUBSIDIES 616.970

OTHER OPERATING INCOME 223.723 9.528.746 160.530 7.673.508

(B) 275.237.771 243.249.765

INCOME FROM INVESTMENTS

Related to Associated Companies 71.100 370.328

Related to Other Companies 627.538 255.292

OTHER FINANCIAL INCOME

Related to Associated Companies

Related to Other Companies 276.501 14.741

INTEREST AND OTHERS

Related to Other Companies 44 693.271 1.668.410 817.560 1.457.921

(D) 276.906.181 244.707.686

EXTRAORDINARY INCOME 45 1.759.343 2.685.262

RESUMO:

Operational Income (B)-(A) = 5.287.312 8.446.240

Financial Income (D-B)-(C-A) = (3.156.248) (3.838.936)

Current Income (D)-(C) = 2.131.064 4.607.304

Income Before Taxes (F)-(E) = 3.426.098 6.779.430

Net Income+Minority Interest In Income of Consolidated Subsidiaries (F)-(G) = 1.066.287 3.815.786

(Euros)



NOTES TO THE CONSOLIDATEDFINANCIAL STATEMENTS

INTRODUCTION

Salvador Caetano – Indústrias Metalúrgicas e Veículos de Transporte, S.A. (“Salvador Caetano” or “the Company”) was incorporated in 1946, with its headquarters in Vila Nova de Gaia, and forms a Group(“Salvador Caetano – IMVT, SA. Group”), whose companies mainly carry economic activities included in the automotive sector, namely, the import, assembly and commercialisation of light passengers and heavyvehicles; the industry of coaches; the commercialisation of earthmoving equipment and forklifts; the commercialisation of auto spare parts and accessories, as well as the corresponding technical assistance.Additionally, the Group carries the activity of surface treatment, which includes industrial painting, and lacquering of the construction and automotive sectors. As of 30 Jun 2002, the main companies that form Salvador Caetano-IMVT, SA. Group, their respective headquarters and the abbreviations used, are as follows:Companies Headquarters

With headquarters in Portugal:

Salvador Caetano – IMVT, SA. (“Empresa-mãe”) Vila Nova de GaiaSaltano – Investimentos e Gestão, S.G.P.S., S.A. (“Saltano”) Vila Nova de GaiaIPE – Indústria Produtora de Espumas, Lda. (“IPE”) PortoPortianga, S.A. (“Portianga”) PortoCrustacil – Comércio de Marisco, Lda. (“Crustacil”) LisboaSalvador Caetano – Aluguer de Automóveis, S.A. (“S.C. Aluguer”) PortoCaetanoBus-Fabricação de carroçarias, SA Vila Nova de GaiaSalvador Caetano- Comércio de Automóveis, SA Vila Nova de Gaia

With headquarters in other countries:

Salvador Caetano (UK), Ltd. (“Salvador Caetano UK”) Leicestershire (United Kingdom)Salvador Caetano (Espanha), S.A. (Salvador Caetano Espanha”) Madrid (Spain)Contrac GmbH (“Contrac”) Wiesbaden (Germany)Robert Hudson, Ltd. (“Robert Hudson”) Luanda (Angola)Steia – Sociedade Técnica de Equipamentos Industriaise Acessórios, S.A.R.L. (“Steia”) Bissau (Guiné-Bissau)Salvador Caetano (Moçambique), S.A.R.L. (“Salvador Caetano Moçambique”) Maputo (Mozambique)Cabo Verde Motors (“Cabo Verde Motors”) Praia (Cabo Verde)Salvador Caetano Coachbuilders, Ltd. (“S.C. Coachbuilders”) Leicestershire (United Kingdom)Reliant Coaches, Ltd. (“Reliant Coaches”) Leicestershire (United Kingdom)Amboim Pescas, Lda. (“Amboim”) Porto Amboim (Angola) Forcabo – Veículos Automóveis, Lda. (“Forcabo”) Praia (Cabo Verde)Indicabo – Veículos Automóveis, Lda. (“Indicabo”) Praia (Cabo Verde)

The inclusion of these companies in the consolidated financial statements as 30 June 2002 and the respective consolidation method used is described and explained in Notes 1, 2, 3 and 4 below.The changes occurred in the consolidation perimeter of Salvador Caetano – IMVT, SA. Group, in relation with the year ended 30 Jun 2002 is described in Note 14.The notes which follow are numbered as defined by the Official Chart of Accounts (“Plano Oficial de Contabilidade – POC”) for consolidated financial statements and the notes that are not included herein areeither not applicable to Salvador Caetano – IMVT, SA. Group or their inclusion is not significant to the reading the accompanying consolidated financial statements.The amounts mentioned in these notes are expressed in Euro.

1. GROUP COMPANIES INCLUDED IN THE CONSOLIDATION

The Group companies included in the consolidation by the full consolidation method, as defined in Article 1º, nº1, a) of Decree-Law 238/91, of 2 July, which determines the consolidation when a company holds themajority of voting rights, their respective headquarters and the proportion of share capital held are as follows:

2. GROUP COMPANIES EXCLUDED FROM CONSOLIDATION

Steia - Sociedade Técnica de Equipamentos Industriais e Acessórios, S.A.R.L., was excluded from consolidation, and is stated at acquisition cost, net of a provision to face the risk of devaluation, as referred toin Note 18. However, the non inclusion of this company in the consolidation is not materially relevant, based upon Article 4º of Decree-Law nº 238/91, of 2 July.

3. ASSOCIATED COMPANIES INCLUDED IN CONSOLIDATION

The associated companies were included in consolidation by the equity method, based upon the consolidation rules defined by Decree-Law nº 238/91, of 2 July. The proportion of share capital held and the mainfinancial figures as of 30 Jun 2002, are as follows:

21

Effective Jun ‘02% Held Total Total Net

Companies Jun ‘02 Jun ‘01 Currency Assets Equity Income

Salvador Caetano - Indústrias Metalúrgicas e Veículos

de Transporte, SA. Parent Company EUR 300.072.328 114.016.146 4.589.382

Saltano - Investimentos e Gestão (SGPS), SA. 99,98% 99,98% EUR 33.171.710 21.120.689 62.997

Salvador Caetano (UK), Ltd. 98,00% 98,00% GBP 7.014.330 -455.487 -136.227

Salvador Caetano España, SA. 99,23% 99,23% EUR 3.127.484 956.969 8.634

Salvador Caetano Moçambique, SARL 63,33% 63,33% MZM 29.594.312.207 2.607.815.762 -4.125.358.024

Cabo Verde Motors SARL 87,43% 87,43% CVE 417.441.987 132.436.784 18.622.534

Salvador Caetano Coachbuilders, Ltd. 98,00% 98,00% GBP 1.606.279 -5.755.750 -700.593

Reliant Coaches, Ltd. 98,00% 98,00% GBP 439.488 369.301 -12.306

Forcabo-Veículos Automóveis, Lda 87,34% 87,34% CVE 68.712.493 12.664.994 258.954

Indicabo-Veículos Automóveis, Lda 87,35% 87,35% CVE 5.655.811 4.268.894 -157.238

Salvador Caetano Aluguer Automóveis, SA 99,99% EUR 45.216.905 808.779 384.501

CaetanoBus-Fabricação de Carroçarias, SA 73,98% EUR 15.731.793 4.290.686 -1.708.683

Salvador Caetano Comércio Automóveis, SA 92,09% EUR 98.995.448 46.923.596 981.188

Capital HoldingCompany Headquarters Nominal Effective

Steia - Soc. Técn. Equipam. Industriais e Acessórios, SARL Bissau 100,00% 66,50%

4. ASSOCIATED COMPANIES EXCLUDED FROM CONSOLIDATION

The company above was excluded from consolidation, and is stated at acquisition cost. The non inclusion of this company is due to the fact that Amboim Pescas, Lda is inactive. However, the non inclusion of thiscompany in the consolidation is not materially relevant.

7. AVERAGE NUMBER OF PERSONNEL

During the 1st semester of 2002, the average number of personnel was as follows:

10. CONSOLIDATION DIFFERENCES

According to the “Consolidation principles” (Note 23), the differences between the acquisition cost of the financial investments and the corresponding equity values on the respective date of acquisition are com-puted by the Company and recorded in the accompanying consolidated financial statements according to the following criteria:In assets:

i) When the resulting difference is positive (“goodwill”), it is recorded in “Intangible assets”, being amortised on a systematic basis over a period of five years;In equity:

ii) When the resulting difference is negative (“badwill”), it is recorded directly in equity.

As a consequence of the above described criteria, as of 30 Jun 2002, the portion recorded in intangible assets is as follows:

14. CHANGES IN THE CONSOLIDATION PERIMETER

During the 1st semester 2002, the changes in the consolidation perimeter were as follows:

There is also to refer the merge in the new company Salvador Caetano –Comércio de Automóveis, SA. of the following companies:Salvador Caetano-Comércio de Automóveis (Algarve), SASalvador Caetano-Comércio de Automóveis (Coimbra), SASalvador Caetano-Comércio de Automóveis (Minho), SASalvador Caetano-Comércio de Automóveis (Setúbal), SASalvador Caetano-Comércio de Automóveis (Porto), SASalvador Caetano-Comércio de Automóveis (Viseu), SASalvador Caetano-Comércio de Automóveis (Caldas da Rainha), SASalvador Caetano-Comércio de Automóveis (Espinho), SASalvador Caetano-Comércio de Automóveis (CBEP), SAUnipark-Assistência e Comércio de Automóveis, SA

15. CONSISTENCY IN THE APPLICATION OF ACCOUNTING PRINCIPLES

The accounting principles used by Salvador Caetano – IMVT, SA. Group are consistent among the companies and were applied on a consistent basis with that of the preceding year, and are described in Note 23.

18. ACCOUNTING PRINCIPLES USED FOR FINANCIAL INVESTMENTS IN OTHER GROUP

AND ASSOCIATED COMPANIES NOT INCLUDED IN THE CONSOLIDATION

The financial investments in Group and associated companies excluded from the consolidation (Notes 2 and 4), are recorded at acquisition cost, net of a provision for financial investments, to face the devalua-tion of those financial investments.

21. FINANCIAL COMMITMENTS NOT INCLUDED IN THE CONSOLIDATED BALANCE SHEET

Pension Fund

Salvador Cateano – IMVT, SA. Group constituted, by public deed dated 29 December 1988, the Salvador Caetano Pension Fund, which was subsequently updated in 2 January 1994 and in 29 December 1995.

22

Change to the FullIncluded in Period Excluded in Period Consolidation Method

CaetanoBus, SA Caetsu, SA Salvador Caetano Aluguer, SA

Robert Hudson, Ltd Vedicol, Lda

Personnel

Employees 1.946

Workers 1.272

3.218

Effective Jun ‘02% Held Total Total Net

Companies Jun ‘02 Jun ‘01 Currency Assets Equity Income

IPE, SA 24,99% 24,99% EUR 4.056.207 1.411.186 -275.825

Portianga, SA 32,99% 32,99% EUR 22.883.731 6.960.801 -477.218

Crustacil,Lda 26,39% 26,39% EUR 2.140.761 -3.216.512 -328

Contrac GMBH 33,32% 33,32% EUR 29.293.766 3.465.773 -405.962

Robert Hudson, Ltd 32,99% USD 16.087.059 5.285.833 -340.153

% HeldCompany Headquarters Nominal Effective

Amboim Pescas,Lda Angola 70,00% 23,09%

Reflected in the Income StatementAmount In previous In 1st Half Net Amount

Items Jun ‘02 Years of 2002 Jun ‘02

Goodwill 1.124.267 -899.413 -112.427 112.427

This Pension Fund was set up to, while Salvador Caetano and the Group companies maintain the decision to make contributions to the referred fund, provide employees, at the date of their retirement, the right toa pension complement, which is not updated and is based on a percentage of the salary, among other conditions.In accordance with an actuarial valuation made by the fund manager, Salvador Caetano – IMVT, SA. Group created, during the 1st semester a provision for the reinforcement of the fund of, approximately 764 mil-lions Euro, which was recorded in the income statement of the period ended 30 Jun 2002 in the caption “Payroll Expenses”. The net assets of the pension fund amount as of 31 December 2001, is 29 millions Euro,which exceeds the estimated past service liabilities, on that date. These liabilities were calculated by the pension fund manager using the “Projected Unit Credit” method, the TV 73/77 mortality tables and theSuisseRe handicapped tables, as well as salary increase, pensions increase and rate of return of the fund assets of 2%, 0% and 5%, respectively.

Other financial commitments

As of 30 Jun 2002, Salvador Caetano – IMVT, SA. Group has assumed the following financial commitments:

23. BASIS OF PRESENTATION AND PRINCIPAL ACCOUNTING PRINCIPLES

Basis of presentation

The accompanying consolidated financial statements were prepared based on the going concern concept from the books and accounting records of the companies included in the consolidation (Notes 1 and 3),maintained in accordance with generally accepted accounting principles in Portugal.

Consolidation principles

The most important consolidation principles used were as follows:The consolidation of the Group companies referred to in Note 1 was made using the full consolidation method.Note 10 describes the basis for elimination of financial investments and the determination of consolidation differences, including the “goodwill” on the acquisition of financial investments.The balances, transactions, gains or losses generated between Salvador Caetano – IMVT, SA. Companies included in consolidation, were eliminated in the consolidation process and the amounts corresponding tothe participation of third parties in the consolidated companies, are presented in the caption “Minority Interests”.Financial investments in associated companies (Note 3) are stated in the consolidated balance sheet, by the equity method.The financial statements of the companies with its headquarters abroad were converted into Euro using the prevailing exchange rates at the date of the balance sheet closing of those companies. The effect of theexchange conversion of equity was reflected in equity caption “Other Reserves”, which is not significant to the accompanying financial statements.

Principal accounting policies

The principal accounting policies used in the preparation of the consolidated financial statements were as follows:

a) Intangible assetsIntangible assets, comprise expenses with share capital increases, expansion expenses and goodwill, and are amortised on a straight-line basis over a period of five years. Research and development expenses,which mainly comprise expenses with technological development and with studies and development of prototypes, are also amortised over a period of three years.Positive consolidation differences (“Goodwill”) are reflected in assets, in the caption “Goodwill” and are amortised on a straight-line basis for a period no longer than five years (Note 10).

b) Tangible fixed assetsTangible fixed assets acquired up to 31 December 1997 are stated at cost, and may be restated in accordance with legal dispositions (Note 41). Tangible fixed assets acquired after that date are stated at cost.Depreciation is provided on an annual straight-line basis, using rates which correspond to the following estimated useful lives:

Years- Buildings and Other Constructions 20 - 50- Machinery and Equipment 7 - 16 - Transport Equipment 4 - 5- Tools and Utensils 4 - 14- Administrative Equipment 3 - 14- Containers 5 - 11

c) LeasingTangible fixed assets acquired through financial lease contracts and the corresponding liabilities are recorded by the financial method. Consequently, the cost of the asset is recorded under tangible fixed assets,the corresponding liability under liabilities (Note 47). Instalments comprise the interest and the financial amortisation of capital, being the interest recorded as expense in the income statement of the year towhich they refer. The corresponding assets are amortised according to the estimated useful lives.

d) Financial investmentsFinancial investments in companies not included in consolidation (Notes 2 and 4), are stated at acquisition cost, net of a provision to the risk associated to each investment.Dividends related with this investments are recorded in the income statement of the year in which they are received.

e) InventoriesMerchandise, raw, subsidiary and consumable materials are stated at average acquisition cost, which is inferior to the respective market value.Finished and intermediate goods as well as work in progress are stated at production cost, which is lower than the respective market value. Production costs include the cost with raw materials, direct labour, pro-duction overheads and external services.

23

Liabilities Amount

For Notes Discounted 543.627

Credit 1.236.797

Guarantee of Import 32.214.525

33.994.949

f) Provisions for other risks and chargesIncludes the remaining part of the provision recorded in previous years according to the previous Corporate Income Tax Code (“ex - Código da Contribuição Industrial”) and is held to face doubtful accounts andinventories depreciation marginal risks, or other general risks and a provision for depreciation of used cars, due to the strong fluctuation of this merchandise market prices.

g) SubsidiesNon repayable subsidies to finance investment in intangible and tangible fixed assets are recorded in the caption “Deferred income”, when received, and amortised in the income statement in proportion to thedepreciation of the related subsidised fixed assets.Operational subsidies are recorded as operational income in the years they are received.

h) Accrual basisThe Company records its income and expenses on an accrual basis. Under this basis, income and expenses are recognised in the period to which they relate independently of when the amounts are received or paid.Differences between the amounts received and paid and the corresponding income and expenses are recorded in “Accruals and Deferrals” accounts (Note 54).

i) Employee termination indemnitiesThe Company has the policy of recording employee termination indemnities as an operational expense in the year in which they are agreed.

j) Balances and transactions expressed in foreign currenciesAssets and liabilities expressed in foreign currencies have been translated to Euro using the exchange rates in effect on the dates of the balance sheet, published by the Bank of Portugal. Exchange gains and loss-es arising from differences between the exchange rates in force on the dates of transactions, the dates of receipt, payment or the date of the balance sheet are recorded as income and expenses for the period.

k) Income taxesSalvador Caetano and subsidiary companies are taxed individually by means of Corporate Income tax, applicable according to the fiscal environment under which the companies are subject to.In accordance with current legislation the Group companies tax returns are subject to review and correction by the tax authorities during a period of four years (five for the year still open up to 1998). Consequently,the tax returns for the years still open up to now are still subject to review. Social Security returns can be reviewed during a period of ten years. The Board of Directors of Salvador Caetano believes that any cor-rections resulting from reviews/inspections by the tax authorities to the tax returns open to inspection will not have a significant effect on the individual financial statements of these Companies neither on theaccompanying consolidated financial statements.

l) Deferred income taxAccording to the Accounting standard nº 28/01, the Group recorded in the semester, in “Accruals and deferrals” captions, deferred income tax related to the tax effect of timing differences between the resultsdeterminated for accounting and taxation purpose (Note 54).Additionally, these differences respecting to previous years were recorded in Equity captions, “Reserve for revaluation on fixed assets “ and “Profit carried forward” (Note 52), having the part related to the 1stsemester 2002 being recorded in “Income Tax”. The effect of this procedure is not relevant to the comparability of the Financial Statement of 2002 with previous years.The amount and nature of the assets and liabilities for deferred taxes in the 1st semester of 2002 was as follows:

Additionally, the income statement caption “Income taxes” was determined as follows:Income tax 2002 2.471.548Deferred income tax 2002 -111.737

2.359.811

m) Discounted notesDiscounted notes receivable from clients and associated companies are deducted from the corresponding nominal accounts receivable. Interest is recorded on an accrual basis. (Note 21)

24. CURRENCY EXCHANGE RATES

The financial statements of the companies included in the consolidation and with values originally expressed in foreign currency were converted into Euro based on the following exchange rates and respectiveapplication:

24

Deferred Income Deferred Income Reflected Reflected Items Assets Liabilities in Income in Equity

(Note 54) (Note 54) Statement (Note 52)

Provisions not accepted as fiscal cost 683.104 683.104

40% of depreciation as a result of legal revaluation of fixed assets -1.670.725 -45.415 -1.716.140

Effect of the reinvestments of the gain in fixed assets sales -1.278.857 -66.322 -1.345.179

683.104 -2.949.582 -111.737 -2.378.215

Final Exchange Average Historic Exchange at the Final ExchangeItems Currency Jun ‘02 Exchange Jun ‘01 Date of Incorporation 2001

SC (UK), Ltd. GBP 1,5468 1,6111 0,9798 1,6614

Cabo Verde Motors, SARL CVE 0,0091 0,0091 0,0100 0,0091

SC Moçambique, SARL MZM 0,00004 0,00004 0,0001 0,00006

Forcabo, Lda CVE 0,0091 0,0091 0,0091 0,0091

Indicabo, Lda CVE 0,0091 0,0091 0,0091 0,0091

SC Coachbuilders, Ltd GBP 1,5468 1,6111 1,5851 1,6614

Reliant Coaches, LTd GBP 1,5468 1,6111 1,5192 1,6614

Balance Sheet Accounts

Application except Equity Income Statement Share Capital Retained

Earnings

25. INSTALLATION AND RESEARCH AND DEVELOPMENT EXPENSES

As of 30 Jun 2002 the detail of this caption is as follows:Installation Expenses:

Expenses with share capital increases 527.737Expansion expenses 1.178.521Accumulated depreciation -1.315.016Total 391.242

Research and Development Expenses:

Studies and prototypes 336.876Technological development 816.052Accumulated depreciation -675.647Total 477.281

27. MOVEMENT IN FIXED AND INTANGIBLE ASSETS

During the 1st semester of 2002, the movement in intangible and tangible fixed assets, as well as in the respective accumulated amortisation and depreciation was as follows:

On 30 June 2002, the variation occurred in the caption “Vehicles” results mainly from the introduction for the first time of Salvador Caetano – Aluguer de Automóveis by the full consolidation method.The caption “Investments in Other Companies” includes approximately Euro 5.855.010 referring to financial investments in companies with their share capital listed in the Stock Exchange Market, and the poten-tial gains, not reflected in the accompanying consolidated balance sheet, of approximately Euro 5.998.902 .

25

Gross AssetsItems Opening Transfers and Ending


Intangible Assets 6.975.361 403.108 0 -1.679.835 5.698.634

Installations Expenses 1.409.125 216.173 80.960 1.706.258

Research and Development Expenses 1.680.060 186.935 -714.067 1.152.928

Key Money 1.728.611 -13.430 1.715.181

Goodwill 2.157.565 -1.033.298 1.124.267

Tangible Assets 213.655.431 39.669.082 -21.863.044 22.314.909 253.776.378

Land 27.129.619 4.166 -107.495 27.026.290

Buildings and Other Constructions 92.616.526 3.123.929 2.356.301 98.096.756

Machinery and Equipment 41.327.363 1.942.550 -2.873.856 2.604.058 43.000.115

Vehicles 13.490.638 30.582.421 -13.238.347 27.546.635 58.381.347

Tools 11.761.272 1.195.922 -3.599.566 -739.231 8.618.397

Administrative Equipment 15.031.292 754.996 -1.481.876 -292.558 14.011.854

Other Fixed Assets 2.761.930 173.638 -353.318 -78.174 2.504.076

Construction in Progress 9.536.791 1.891.460 -316.081 -8.974.627 2.137.543

Financial Investments 19.264.198 50.000 0 -1.151.828 18.162.370

Investments on Affiliates 5.304.412 -1.049.543 4.254.869

Loan to Affiliates 249.399 249.399

Investments in Other Companies 8.369.963 -100.789 8.269.174

Loan to Other Companies 1.555.080 50.000 1.605.080

Other Stocks 41.400 -1.496 39.904

Real Estate Investments 3.743.944 3.743.944

Accumulated Depreciations and ProvisionsItems Opening Ending

Balances Increases Regularisations Balances

Intangible Assets 5.747.781 302.629 -1.744.963 4.305.447

Installations Expenses 1.209.460 51.001 54.555 1.315.016

Research and Development Expenses 1.273.360 136.020 -733.733 675.647

Key Money 1.332.249 3.181 -32.486 1.302.944

Goodwill 1.932.712 112.427 -1.033.299 1.011.840

Tangible Assets 109.093.780 9.751.069 -7.799.486 111.045.363

Buildings and Other Constructions 42.884.001 1.411.441 194.892 44.490.334

Machinery and Equipment 32.359.399 2.191.133 -2.868.724 31.681.808

Vehicles 7.810.434 5.383.075 214.582 13.408.091

Tools 10.764.647 355.826 -3.533.172 7.587.301

Administrative Equipment 12.940.288 312.895 -1.452.425 11.800.758

Other Fixed Assets 2.335.011 96.699 -354.639 2.077.071

Financial Investments 2.829.507 60.953 0 2.890.460

Investments in Other Companies 206.004 206.004

Loan to Other Companies 169.591 0 169.591

Real Estate Investments 2.453.912 60.953 2.514.865

36. SALES AND SERVICES RENDERED BY GEOGRAPHIC MARKETS AND BY ACTIVITIES

The detail of sales and services rendered by geographic markets, in the 1st semester of 2002, was as follows:

Additionally, sales and services rendered by activity are as follows:

39. REMUNERATION OF BOARD MEMBERS

The remuneration of the board members, in the line of duties in the Parent Company, as of 30 Jun 2002, was as follows:

41. RESTATEMENT OF FIXED ASSETS (LEGISLATION)

Salvador Caetano – IMVT, SA. Group restated its fixed assets, in previous years, according to the following legislation:Decree- Law 430/78, of 27 DecemberDecree-Law 219/82, of 2 JuneDecree-Law 399-G/84, of 28 DecemberDecree-Law 118-B/86, of 27 May

44. STATEMENT OF CONSOLIDATED NET FINANCIAL RESULTS

Consolidated net financial expenses for Jun 2002 and 2001 comprise:

45. STATEMENT OF CONSOLIDATED NET EXTRAORDINARY INCOME

Consolidated net extraordinary expenses for Jun 2002 and 2001 comprise:

26

Board Members Amount

Board of Directors 196.289

Board of General Meeting of Shareholders 2.449

198.738

Market Amount %

National 233.784.776 90,68%

Germany 4.365.200 1,69%

United Kingdom 8.544.984 3,31%

Spain 3.159.059 1,23%

Others 7.948.700 3,08%

257.802.719 100,00%

Activity Amount %

Vehicles 198.840.061 77,13%

Spare Parts 28.780.472 11,16%

Repairs 17.130.091 6,64%

Others 13.052.095 5,06%

257.802.719 100,00%

Expenses and Losses Jun '02 Jun '01

Interest 3.748.251 4.161.870

Amortization of Real Estate Investments 60.953 54.477

Foreign Currency Exchange Losses 156.734 340.599

Cash Discount Granted 66.590 126.460

Losses Related With Affiliates 365.647 240.432

Other Financial Expenses 426.483 373.020

Net Financial Results -3.156.248 -3.838.936

1.668.410! 1.457.921

Income and Gains Jun '02 Jun '01

Interest 341.352 311.464

Revenue from Real Estate 275.000 10.300

Gains from Financial Investments 627.538 255.292

Gains from Investments in

Affiliates 71.100 370.328

Foreign Currency Exchange Gains 21.623 294.021

Obtained Cash Discount 10.907 56.249

Gains on Disposals of Financial Investments 26 1.362

Other Financial Income 320.864 158.905

1.668.410 1.457.921

Expenses and Losses Jun '02 Jun '01

Donations 73.124 143.145Bad Debts 154 3.083Losses on Inventories 135.880 14.395Loss on Assets 78.631 121.108Fines and Penalties 18.539 3.751Increase in Amortizations and Provisions 7.212 8.744Prior Year Adjustments 56.891 118.250Other Extraordinary Expenses 93.878 100.660Net Extraordinary Results 1.295.034 2.172.126

1.759.343 2.685.262

Decree-Law 111/88, of 2 AprilDecree-Law 49/91, of 25 JanuaryDecree-Law 264/92, of 24 NovemberDecree-Law 31/98, of 11 February

46. MOVEMENT IN PROVISIONS

During the 1st semester of 2002, the movements in provision accounts were as follows:

47. FINANCIAL LEASING

During the 1st semester of 2002, the detail of the assets under leasing contracts is as follows:

Of the capital due as of 30 Jun 2002, Euro 359.278 are classified as medium and long term liabilities, because they are due after 30 Jun 2003.

50. SHARE CAPITAL

As of 30 Jun 2002, 35.000.000 shares of nominal value of 1 Euro each represent the share capital.

51. IDENTIFICATION OF CORPORATE ENTITIES WITH MORE THAN 20% OF ISSUED CAPITAL

- Fogeca – Gestão e Controle (S.G.P.S.), S.A. 58%

52. VARIATION IN EQUITY ACCOUNTS

The movements in consolidated equity accounts, during the 1st semester of 2002 can be summarised as follows:Total equity as of 31 December 2001 131.835.603Income distribution:

- Of the Parent company:Dividends -2.100.000To employees - 1.400.000

- Of other companiesTo employees - 234.464

Commercial legislation establishes that at least 5% of the net profit of each year must be appropriated to a legal reserve until this reserve equals the statutory minimum requirement of 20% of the share capital.This reserve is not applicable for distribution, except in case of dissolution of the Company, but may be capitalised or used to absorb accumulated losses once other reserves have been exhausted.The revaluation reserve results from the revaluation of tangible fixed assets in accordance with current legislation (Note 41). According to legislation and accounting principles in Portugal, this reserve is not avail-able for distribution but may be capitalised in future share capital increases or in other ways specified in legislation.The amount recorded as “Deferred Income” amounting to Euro 2.378.215, was due to the effect of recording the assets and liabilities for deferred taxes, related to previous years, in accordance with the AccountingStandard nº 28/01 (Note 23 l) and 54). Additionally, consolidated net profit for the 1st semester of 2001, was made up as follows:Net income:

- Of the Parent-company 4.589.382- Of the companies included by the full consolidation method -1.641.348

Consolidation adjustments- Amortisation of “goodwill” (Note 10) - 112.427- Other consolidation adjustments - 1.474.773

53. BONDS AND BANK LOANS

As of 30 Jun 2002, bonds and bank loans can be detailed as follows:

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Opening Increases Utilization EndingItems Balances and Decreases Balances

Provisions for Doubtful Accounts 5.677.350 125.781 -418.899 5.384.232

Provisions for Inventory Obsolescense 1.129.331 15.163 -148.708 995.786

Provisions for Financial Investments 375.595 375.595

Provisions for Other Risks and Charges 6.688.790 0 6.688.790

Aquisition Aquisition Restatement Accumu RepayableItems Cost Year Depreciations Amount

Lisbon Premises 1.401.622 1993 224.260 231.688 383.701

Income and Gains Jun '02 Jun '01

Return of Tax 40

Recover of Bad Debts 1.491 180

Gains on Inventories 182.832 99.216

Gains on Assets 1.215.324 2.248.945

Contractual Penalties 6.318 17.403

Reductions in Provisions 103.027 71.388

Prior Year Adjustments 150.100 153.006

Other Extraordinary Income 100.251 95.084

1.759.343 2.685.262

Deferred Income (Note 23 l)) -2.378.215

Other consolidation adjustments -1.672.622

Net consolidated income of Jun 2002 1.419.314

Total equity as of 30 Jun 2002 125.469.616

- Toyota Motor Corporation 27%

Contribution of the companies consolidated by The equity method -294.547

Consolidated net income for the year, including minority interests 1.066.287Minority interests for the period 353.027Net consolidated income for the period 1.419.314

Medium andLong Term Short Term

BondsSalvador Caetano ’99 – Euro 4.874.999 4.875.001Salvador Caetano ’02 – Euro 15.000.000

19.874.999 4.875.001Bank LoansDebt securities 14.963.937Current loans 49.528.225 77.726.007

49.528.225 92.689.944

As of 11 June 2002 Salvador Caetano issued a bond loan amounting to Euro 15.000.000, for a period of five years, with a nominal value of Euro 10 per bond, with a rate indexed to Euribor for 6 months added of1,15%. Interest is due each half year and postdated, and the first coupon is due on 11 December 2002. Reimbursement will be made by four equal instalments on the dates of the 4th, 6th, 8th and 10th coupon pay-ment.. The total or partial anticipated reimbursement can be made as follow:

- “Call Option”-from the second date of payment of interests (Jun.2003). - “Put Option” -from the sixth date of payment of interests (Jun.2005).

54. ACCRUALS AND DEFERRED

As of 30 June 2002, these items were as follows:Accrued Income

Warranty claims 574.074 Rappel 499.193Rent 564.933Others 1.467.148

3.105.348Deferred Costs

Maintenance charge 299.221Assets for deferred taxes (Note 23 l) 683.104Others 1.964.305

2.946.630

55. END-OF-LIFE VEHICLES

In September 2000 the European Commission voted on a directive regarding end-of-life vehicles and the responsability of Producers/Distributors for dismantling and recycling them. Producers/Distributors, will haveto bear, at least a significant part of the cost of the take back of vehicles put on the market as of July 1, 2002 and from January 1, 2007 for vehicles put on the market before July 1, 2002. This legislation will impactToyota vehicles sold in Portugal. Salvador Caetano and Toyota are closely monitoring the development of Portuguese National Legislation in order to access the impact on their financial statements.

56. EXPLANATION ADDED FOR TRANSLATION

These financial statements are a translation of financial statements originally issued in Portuguese in accordance with generally accepted accounting principles in Portugal and the format and disclosures requiredby the Portuguese Official Plan of Accounts (“Plano Oficial de Contabilidade – POC), some of which may not conform with or be required by generally accepted accounting principles in other countries. In the eventof discrepancies, the Portuguese language version prevails.

LIMITED REVIEW REPORT BY AUDITOR REGISTERED IN CMVMON HALF YEAR CONSOLIDATED INFORMATION

(Translation of a report originally issued in Portuguese) (Amounts expressed in Euro - ¤)

INTRODUCTION

1. In compliance with Article 246 of the Securities Market Code, we hereby present our Limited Review Report on the consolidated information of Salvador Caetano – Indústrias Metalúrgicas e Veículos de Transporte,S.A. (“the Company”) for the half year ended 30 June 2002 included in: the Directors’ Report, the consolidated Balance Sheet (that reflects a total of ¤ 378.346.807 and shareholders’ equity of ¤ 125.469.616,including net profit of ¤ 1.419.314) and the consolidated Statement of profit and loss for the six month period then ended and the accompanying notes.

2. The amounts in the financial statements, as well as the additional financial information, are in accordance with the accounting records of the Company and its subsidiaries.

RESPONSIBILITIES

3. The Company’s Board of Directors is responsible for: (i) the preparation of consolidated financial information that presents a true and fair view of the financial position of the companies included in the con-solidation and the consolidated result of their operations; (ii) the preparation of historical financial information in accordance with generally accepted accounting principles and that is complete, true, up-to-date, clear, objective and licit, as required by the Securities Market Code; (iii) adopting adequate accounting policies and criteria; (iv) the maintenance of an appropriate internal control system; and (v) inform-ing any significant facts that have influenced their operations, financial position or results.

4. Our responsibility is to examine the financial information contained in the above mentioned documents of account, including verification that, in all material respects, the information is complete, true, up-to-date, clear, objective and licit, as required by the Securities Market Code, and issuing a moderate assurance, professional and independent report on that financial information based on our work.

SCOPE

5. The purpose of our work was to obtain moderate assurance as to whether the above mentioned financial information is free of material misstatement. Our work was performed in accordance with the TechnicalReview/Audit Standards issued by the Portuguese Institute of Statutory Auditors, was planned in accordance with that objective, and consisted essentially of enquiries and analytical procedures with the objec-tive of reviewing: (i) the reliability of the assertions included in the financial information; (ii) the adequacy of the accounting principles used, taking into consideration the circumstances and the consistency oftheir application; (iii) the applicability, or not, of the going concern concept; (iv) the presentation of the financial information; and (v) whether, in all material respects, the consolidated financial information iscomplete, true, up-to-date, clear, objective and licit as required by the Securities Market Code.

6. Our work also included verifying that the consolidated financial information included in the Directors’ Report is consistent with the other above mentioned documents of account.

7. We believe that our work provides a reasonable basis for issuing the present limited review report on the half-year information.

QUALIFICATION

8. The financial statements of the affiliated companies, which represent approximately 41% of total consolidated net assets as of 30 June 2002 (34% as of 30 June 2001) and 38% of total consolidated income forthe six month period ended as of that date (38% as of 30 June 2001), were not subject to a review, as these financial statements are only reviewed on a annual basis by their Auditors, and therefore the last reportsobtained are referred to the financial statements of those companies as of 31 December 2001. Consequently, we have not obtained any report that would enable us to have moderate assurance as to whether thefinancial information of the affiliated companies is free of material misstatements.

OPINION

9. Based on our work, which was performed with the objective of obtaining moderate assurance, except for the effect of the matter referred to in paragraph 8 above, nothing came to our attention that leads us tobelieve that the consolidated financial information for the half-year ended 30 June 2002 is not exempt from material misstatement that affects its conformity with generally accepted accounting principles andthat, in terms of the definitions included in the Technical Review/Audit Standards referred to in paragraph 5 above, it is not complete, true, up-to-date, clear, objective and licit.

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Accrued Cost

Vacation pay and bonus 9.484.377Vehicles Tax related with disposed vehicles not registed 2.902.400Liability for deferred taxes (Note 23 l)) 2.949.582Interest 1.425.004Others 9.926.577

26.687.939

Porto, 13th September 2002Magalhães, Neves e Associados - SROC

Represented by Jorge Manuel Araújo de Beja Neves

998 Rel. Semestral ind. SC ING - Salvador Caetano€¦ · Heavy Duty Vehicles 3.051 4.530 -1.479...

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