IESA ÓLEO & GÁS S/A · IESA Óleo & Gás S/A is one of the most acknowledged and respected ... Company is also aware of the opportunities for construction of power plants primarily

IESA ÓLEO & GÁS S/A

Financial Statements For the years ended December 31, 2009 and 2010

IESA ÓLEO & GÁS S/A Financial Statements For the years ended December 31, 2009 and 2010

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SUMMARY Management Report 03 Independent Auditors’ Report 11 Balance Sheet 13 Income Statement 15 Statement of Shareholders’ Equity 16 Statement of Cash Flows 17 Statement of Value Added 18 Notes to the Financial Statements

1. Operational Context 19 2. Grounds for Preparation of the Financial Statements 19 3. Summary of the Main Accounting Principles Adopted 20 4. Initial Adoption of IFRS 29 5. Financial Instruments Risks Management 30 6. Cash and Cash Equivalents 32 7. Clients and Other Credits 33 8. Inventories 34 9. Tax Credits 35

10. Assets Held for Sale 35 11. Investments 36 12. Property and Equipment 38 13. Intangible 41 14. Impairment 42 15. Suppliers and Other Obligations 43 16. Financing and Loans 44 17. Tax and Contribution Payable 45 18. Provisions 46 19. Related Party Transactions 48 20. Capital Stock 49 21. Profit Sharing 49 22. Sales Revenue 50 23. Other Revenues and Expenses 50 24. Financial Revenues and Expenses 51 25. Insurances 51 26. Surety and Securities 52 27. Comprehensive Financial Statement 52 28. Information per Segment 52 29. Complementary Information - EBITDA 53

IESA ÓLEO & GÁS S.A.

MANAGEMENT REPORT Year 2010

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Introduction

This report is intended to show the main activities of IESA Óleo & Gás in the period from January 1 to December 31, 2010. It also intends to show the Company´s strong commitment to sustainability in its projects and actions. The financial statements included herein have been prepared in full compliance with the Corporate Law and with the international standards issued by International Accounting Standards Board – IASB and include the Independent Auditors’ report. The content of this publication is available on www.iesa.com.br.

Company’s Profile

IESA Óleo & Gás S/A is one of the most acknowledged and respected Brazilian companies in the sector for implementation of projects in Brazil’s oil market not only due to the great expertise of its engineering, procurement, construction and assembly staff, but also due to the ability in managing integrated solutions for the clients in Oil, Gas, Petrochemical and Power Generation industries. As a member of a Group with strong presence in the market for over four decades, IESA Óleo & Gás S/A has participated in the largest recent projects in the Brazilian oil sector.

Headquartered in the city of Rio de Janeiro, IESA Óleo & Gás has strongly performed under EPC (Engineering, Procurement and Construction) contracts being supported by the sinergy existing with industrial units of the Group in the State of São Paulo. The Company also owns two industrial bases – one located in Macaé in the State of Rio de Janeiro, and another in São Paulo, both specialized in the activities of maintenance, upgrade and modernization of oil and gas offshore platforms.

The unquestionable success of the Company’s business can be proven by the accomplishment in rolling out process and power plants, and upgrade, maintenance and modernization of offshore platforms and refineries. Thus making us able to deliver the full spectrum of each project from the engineering phase to the start up and construction activities.



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IESA Óleo & Gás also stands out from its competitors due to its various certifications such as quality, health, safety, environment and social responsibility which enlarges its capabilities level and its concerns with clients, workforce and environment.

In addition to accomplishing its social function by generating employment and income, IESA Óleo & Gás fosters a number of cultural and charity actions to the benefit of dwellers in the communities in which we operate.

Awarded in 2010 by the newspaper O Globo with the company that “Makes the Difference” IESA Óleo & Gás is always seeking better quality of life and welfare to its workforce. Deliver good actions and contribute to better world are the daily goals of the Company.

Comment on Operational Performance

2010 was characterized by the enhanced performance of the global economy and consequent improvement of oil market and consumption returning to the pre-crisis levels. Other positive aspect for our business was the completion of public share offering by Petrobras thus ensuring funds for financing it Business Plan 2010-2014 which estimates a US$224 billion investment.

The highlight of the business year was the award of contract for the hydrocracking unit (HCC) for Rio de Janeiro Petrochemical Complex - COMPERJ to be delivered by a consortium including Iesa Óleo & Gás, Queiroz Galvão and Galvão Engenharia, and a contract for the provision of an oil production platform P-62 in a consortium with Construtora Camargo Corrêa.

On December 31, 2010 IESA ÓIeo & Gás has a backlog of R$2.4 billion which provides the Company with enough soundness to underpin the significative results in the coming years.

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Administrative and commercial expenses of the holding company amounted to R$55,7 million which is an increase of 21% compared to 2009 (R$46,1 million). Increase of expenses in 2010 may be explained by training to specialized staff, mostly technicians and engineers, who were allocated in the Company's projects as a consortium and then moved to other assignments.

Infrastructure services for oil and gas industry have been through the shortage of qualified workforce and in this consideration the Company maintains an aggressive policy to retain and attract new talents required for the new investments demanded by the industry.

IESA Óleo & Gás gross cash generation measured by EBITDA (Earnings Before Interests, Taxes, Depreciation and Amortization) in 2010 was R$73,4 million against R$79,6 million in 2009, with a margin of 11%.

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Gross Revenue Evolution

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At the end of fiscal year 2010 indebtedness was R$243,6 million mostly represented by working capital operations and proper schedule of payment to the Company’s cash generation.

At the end the net profit was maintained in comparison to 2009, R$29,8 million against R$28,0 million adjusted by IFRS (International Financial Reporting Standards).

Perspectives for 2011

Market scenario is now solid supported by the investments announced by Petrobras, which is confirmed by the success of its capitalization plan and the discovery of pre-salt reservoirs in association with the ANP (National Agency of Petroleum) regulation on the national content which sets that at least 70% of products/equipment used for oil exploration and production are to be manufactured in Brazil.

In 2011 the Company has been benefiting from the continuation of installation services of COMPERJ, new oil and gas platforms to be contracted for the pre-salt and investments in refineries for the improvement of the fuel quality.

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In addition to the Macaé-RJ and São Vicente-SP offshore operational bases, which support the platforms in operation in the Campos Basin and Santos Basin, respectively, the Company has been also analyzing the rolling out of a new operational base for assembly and fabrication of modules for oil and gas platforms, in 2011.

Company is also aware of the opportunities for construction of power plants primarily natural gas with good business perspectives in this industry in the short and medium terms, and new business coming out with the establishment of new oil and gas exploration and production companies in Brazil, considering that this industry has seen a historical period of growth.

Social Management in 2010

Commitment with quality, professional respect and with the Company’s image are the key principles required from all IESA Óleo & Gás professionals. They underpin the staff relationship with clients, shareholders and the entire market.

Company stands out by the actions developed for the benefit of all workforce and stakeholders where the Company operates and by the number of certifications awarded - OHSAS 18001, ISO 9001, ISO 14011 and SA 8000 and ISO/TS 29001.

In 2010 IESA Óleo & Gás was offered the several awards such as:

January 2010 – ODEBEI (Norberto Odebrecht, EBE, IESA) consortium was granted Petrobras’ award on Quality, Environment and Health Engineering for Contractors under “Industrial Construction” category – 2nd place.

March 2010 – “Makes the Difference” award under “Rio's Economy / Development" category fostered by Firjan System and O Globo newspaper for those contributing to change the country.

October 2010 – Acknowledgement from NGO “Pela Vidda" (for Valorization, Integration and Dignity of AIDS victim);

November 2010 – Hemorio’s acknowledgement on social importance as volunteer blood donator ;



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December 2010 – Homage paid by Casa de Apoio à Criança com Câncer Santa Teresa (cancer children care);

December 2010 – Hemorio acknowledges the social importance of IESA in the Clube 25 project;

December 2010 – Valdir Lima Carneiro, CEO of IESA Óleo & Gás S/A, receives the Intermarket Award in recognition and award personalities highlighted in their activities during 2010;

December 2010 – Hemorio’s Henfil Trophy under “Volunteer and Inducement to Blood Donation” category.

Among other social programmes developed in 2010 the following can be highlighted:

• Scholarship Program – PROBEIN (for employees' children);

• Improvement of workers’ quality of life and welfare through "Walking for a Better Life" program;

• Blood donation campaigns with Hemorio;

• Provide qualification courses and continuous education for Providência slum dwellers in partnership with Pacifying Police Unit – Providencia UPP and Firjan System;

• Integrated pedagogical actions on STD, Aids, Drugs and Alcoholism in municipal schools in Rio de Janeiro in partnership with NGO Pela Vidda and Municipal Secretariat of Education;

• Visit to Hemorio patients with IESALEGRIA group.

Acknowledgements



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IESA Óleo & Gás S/A Management thanks its shareholders, suppliers, partners, clients and financial institutions for their support enabling us to reach a quick process of corporate consolidation. We thank especially our employees for their efforts and full dedication.

Executive Board of Officers

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INDEPENDENT AUDITORS’ REPORT The Board of Directors and Shareholders of IESA - ÓLEO & GÁS S/A We have audited the accompanying consolidated statements of financial condition of IESA – ÓLEO & GÁS S.A., identified as Holding Company and Consolidated respectively, which comprise the balance sheet as of December 31, 2010 and corresponding income statements, comprehensive financial statements, shareholders’ equity and cash flows for the year ended on December 31, 2010, as well as the summary of the main accounting practices and other explanatory notes. Administration Responsibility on Financial Statements The Executive Board of IESA – ÓLEO & GÁS S.A. is responsible for preparing and properly submitting the separate financial statements in accordance with the accounting practices adopted in Brazil and for the consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board – IASB, and in accordance with the accepted accounting practices in Brazil, as well as to the internal controls set out as necessary to allow the preparation of these financial statements free from any material misstatement. Responsibility of the Independent Auditors Our responsibility is to express an opinion on these consolidated financial statements based on our audits conducted in accordance with Brazilian and international auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of any material misstatement. An audit includes the performance of procedures selected to evidence supporting amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment including the assessment of risks of pertinent distortion in the financial statements regardless of being caused by fraud or error. For this risks assessment the auditor examines the pertinent internal controls for preparation and properly submitting of financial statements of Company, planning of auditing procedures suitable for the circumstances, but not to express an opinion on the efficacy of these internal controls of the Company. An audit also includes assessing accounting principles in Brasil and significant estimates made by Management, as well as evaluating the overall financial statements presentation. We believe that our audits provide reasonable basis for our opinion. Opinion on Separate Financial Statements In our opinion, the separate financial statements referred to above present fairly, in all material respects, the financial condition of IESA – ÓLEO & GÁS S.A. as of December 31, 2010, the performance of its operations and cash flows for the year ended on that date, in compliance with accounting principles generally accepted in Brazil.

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Opinion on Consolidated Financial Statements In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial condition of IESA – ÓLEO & GÁS S.A. as of December 31, 2010, the consolidated performance of its operations and consolidated cash flows for the year ended on that date, in compliance with International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board –IASB) and accounting principles generally accepted in Brazil. Emphasis As set out in Explanatory Note 2, the separate financial statements were prepared in accordance with accounting principles generally accepted in Brazil. In the case of IESA - ÓLEO & GÁS S.A. these principles are different from IFRS, applicable to the separated financial statements concerning the assessment of investment in controlled companies jointly by equity method while according to IFRS this should be cost or fair value. Other Issues Statements of Value Added We have also audited the separate and consolidated value added statements (DVA) for the year ending on December 31, 2010, whose submittal is required by the Brazilian Corporate Law for public companies, and as supplementary information by IFRS which do not require the DVA submittal. These statements have been submitted to the same auditing procedures referred to above, and in our opinion are suitably presented, in all their material respects, concerning the financial statements presentation. Rio de Janeiro, January 28, 2011.

CARLOS A. FELISBERTO Accountant CRC (PR) no. 037293/O-9-S-RJ

MARTINELLI Auditores CRC(SC) nº 001.132/O-9

IESA Óleo & Gás S/AC.N.P.J. M.F - Nº 07.248.576/0001-11

Balance SheetsYear ended as December 31, 2009 and 2010 (In thousands of Reais)

Asset Nota 31/12/2010 31/12/2009 01/01/2009 31/12/2010 31/12/2009 01/01/2009Represented Transition Represented Transition

CurrentCash and Cash Equivalents 6 63.527 51.892 50.008 124.098 74.894 55.478 Clients 7 137.003 128.448 87.198 137.621 128.448 87.198 Inventories 8 35.169 52.341 76.194 49.902 57.936 76.195 Tax Credits 9 9.691 12.095 10.552 9.737 12.380 11.198 Asset held for sale 10 128.897 11.784 11.784 128.897 11.784 11.784 Advance credits 957 3.154 1.516 998 3.157 1.516 Other credits 7 1.964 1.359 152 1.827 1.998 1.442

Total Current Asset 377.208 261.073 237.404 453.080 290.597 244.811

Non-CurrentNon-current receivables

Affiliate companies 19 - - 155 - 400 1.589 Bonds and Securities - 76.693 - - 76.693 - Deferred taxes 17 506 598 571 554 598 571 Other credits 7 7 358 - 122 447 76

Investments 11 26.478 2.711 4.682 21.050 1.737 965 Fixed asset 12 34.704 16.869 15.773 38.792 20.329 17.957 Intangible 13 3.218 937 107 3.885 1.145 247

Total Non-Current Asset 64.913 98.166 21.288 64.403 101.349 21.405

Total Asset 442.121 359.239 258.692 517.483 391.946 266.216

Notes are part of the financial statements. 13

HOLDING COMPANY CONSOLIDATED

IESA Óleo & Gás S/AC.N.P.J. M.F - Nº 07.248.576/0001-11Balance Sheets

Year ended as December 31, 2009 and 2010 (In thousands of Reais)

Liabilities Nota 31/12/2010 31/12/2009 01/01/2009 31/12/2010 31/12/2009 01/01/2009Represented Transition Represented Transition

CurrentSuppliers 15 12.551 5.889 5.880 14.521 7.407 11.065 Financing and Loans 16 138.165 84.131 87.886 138.165 84.131 87.886 Social contributions 15 13.845 10.555 12.187 14.663 10.639 12.378 Taxes and contributions payable 15 2.578 7.770 6.856 3.538 7.903 7.567 Provision for cost and charges 231 32.843 31.497 231 33.141 31.497 Order advances 15 149 150 1.815 88.238 31.159 8.791 Other accounts payable 15 3.092 965 574 3.101 1.013 600

Total Current Liability 170.611 142.303 146.695 262.457 175.393 159.784

Non-CurrentFinancing and Loans 16 105.462 77.954 15.694 105.462 77.954 15.694 Taxes and contributions payable 15 8.063 6.359 3.359 8.063 6.359 3.359 Loans with affiliate companies 19 18.938 383 5.565 2.427 - - Deferred taxes 17 12.201 11.910 8.119 12.201 11.910 8.119 Provisions for contingencies 18 1.488 1.759 1.681 1.488 1.759 1.681 Other accounts payable 15 - - - 27 - -

Total Non-Current Liabilities 146.152 98.365 34.418 129.668 97.982 28.853

Net EquitySocial capital 20 102.996 97.426 39.926 102.996 97.426 39.926 Appropriate retained earnings 22.403 21.145 37.653 22.403 21.145 37.653 Reconciliation using the Equity method (41) - - (41) - - Total Net Shareholders' Equity 125.358 118.571 77.579 125.358 118.571 77.579

Total Liability 442.121 359.239 258.692 517.483 391.946 266.216




Income StatementYear ended as December 31, 2009 and 2010 (In thousands of Reais)

Note 31/12/2010 31/12/2009 01/01/2009 31/12/2010 31/12/2009 01/01/2009Net Operating Revenue 22 669.084 627.378 527.394 747.671 652.449 569.079

Costs of Products and Services (545.067) (494.759) (422.580) (609.877) (514.843) (453.612)

Gross Profit 124.017 132.619 104.814 137.794 137.606 115.467

Operating Revenues [Expenses] (49.226) (52.883) (29.407) (62.120) (57.149) (40.781) Selling expenses (7.098) (6.148) (203) (7.098) (6.148) (203) Administrative and general (48.641) (40.029) (35.083) (56.184) (43.192) (41.540) Other Revenues (Expenses) 23 1.494 (8.669) 1.398 (8.570) Income using Equity method 5.019 1.963 5.879 (236) 761 962

Earnings before Expenses and Revenues 74.791 79.736 75.407 75.674 80.457 74.686 Financial

Financial expenses 24 (43.768) (43.817) (33.878) (45.145) (45.132) (34.214) Financial revenues 24 17.294 7.799 6.495 20.728 8.941 8.835

Earnings before Tax on Profits 48.317 43.718 48.024 51.257 44.266 49.307

Income Tax and Deferred Contribution 17 (383) (3.765) (5.027) (335) (5.997) (5.027) Income Tax and Current Contribution 17 (7.504) (11.926) (6.375) (10.492) (10.242) (7.426)

Earnings befor Profit Sharing 40.430 28.027 36.622 40.430 28.027 36.854

Employees Profit Sharing (10.612) - - (10.612) - -

NET INCOME 29.818 28.027 36.622 29.818 28.027 36.854

Number of shares at the end of year 65.995.745 60.425.526 39.925.526 66.995.745 60.425.526 39.925.526 basic and diluted earnings per thousand shares - R$ 451,82 463,83 917,26 445,07 463,83 923,07 Notes are part of the financial statements. 15


IESA ÓLEO & GÁS S/AC.N.P.J. M.F - Nº 07.248.576/0001-11

Statement of Shareholders' Equity

Year ended as December 31, 2009 and 2010

Distribution Reconciliation using Company'sSocial Earnings at disposal of Accrued Equity Net Shareholders ComprehensiveCapital Legal Retained General Meeting of Earnings method Equity Results

ShareholdersBalances on December 31, 2008 39.926 2.725 15.365 30.145 - - 88.161 - Initial adoption of IFRS (10.582) - (10.582) (10.582) On January 1, 2009 39.926 2.725 15.365 30.145 (10.582) - 77.579 (10.582)

Net income 28.027 28.027 28.027 Total Comprehensive Income 28.027 17.445

Capital increase : 12th General Meeting as of 27/04/2009 37.000 (37.000) - Capital increase: - 14th General Meeting as 17/12/2009 20.500 20.500 - Dividends Year 2008 (7.535) (7.535) - Capital Transactions with Shareholders 12.965 -

Legal Reserves 1.503 (1.503) - - Statutory Reserves 26.524 (26.524) - - Earnings retained for maintenance of Working Capital 22.609 (22.609) - -

Balances on December 31, 2009 97.426 4.228 974 26.525 (10.582) - 118.571 17.445

Net Income 29.818 29.818 29.818 Other comprehensive results - Reconciliation of Conversion for Affiliate Overseas (41) (41) (41) Total Comprehensive Result 29.777 29.777

Capital Increase - 14th General Meeting as of 17/12/2009 2.442 2.442 - Capital Increase - 15th General Meeting as of 20/12/2010 3.128 3.128 - Dividends Year 2008 (28.560) (28.560) - Capital Transactions with Shareholders (22.990) -

Legal Reserves 962 (962) - - Statutory Reserves 18.274 (18.274) - -

Balances on December 31, 2010 102.996 5.190 974 16.239 - (41) 125.358 29.777


Earnings Reserves


Statement of Cash FlowsYear ended as December 31, 2009 and 2010 (In thousands of Reais)

31/12/2010 31/12/2009 31/12/2010 31/12/2009OPERATING ACTIVITIES Represented RepresentedNet income 29.818 28.027 29.818 28.027 Expenses (revenues) not affecting the cash and cash equivalents

Depreciations and amortizations 935 674 1.844 1.271 Gains on selling permanent asset - (1.357) - (1.357) Loss on selling permanent asset 2 316 6 (318) Equity method (5.019) (1.963) 236 (893) Monetary and exchange rate variations 21.554 29.267 21.554 29.267 Deferred taxes (1.163) 1.858 (1.211) 1.858 Provisions (Reversal) (32.883) 1.548 (32.883) 1.548 Assignment of Fair Value (8.817) - (8.817) -

Net income for reconciled period 4.427 58.370 10.547 59.403

(Increase) reduction of asset:Clients 8.558 (41.250) 8.415 (40.754) Inventories 17.172 23.853 (885) 18.258 Taxes credit 2.496 (1.543) 2.736 (1.770) Advance expenses 2.551 (1.638) 2.496 (1.638) Other credits (1.159) (751) (1.131) (772)

29.618 (21.329) 11.632 (26.676) Increase (reduction) of liabilities

Suppliers 6.662 9 7.102 (5.933) Social contributions 3.290 (1.755) 3.726 (1.541) Taxes and contributions payable (2.034) 5.819 (1.207) 5.836 Order advances - (1.665) 65.998 26.085 Other accounts payable 2.991 (513) 2.991 (511)

10.909 1.895 78.610 23.936

NET CASH USED IN OPERATING ACTIVITIES 44.954 38.936 100.789 56.664

CASH FLOWS FROM INVESTING ACTIVITIESAsset held for Sale (38.734) - (38.734) - Bonds and securities - (76.693) - (76.693) Dividends received from affiliates 1.548 3.750 1.548 437 Payment of fixed asset purchase (21.055) (2.731) (23.055) (4.948) Payment of investment selling 814 543 814 543 Accrued reconciliation for conversion - - (41) -

(57.427) (75.131) (59.468) (80.661)

CASH FLOWS FROM FINANCING ACTIVITIESPayment received for issuance of shares 5.570 20.500 5.570 20.500 Payment of dividends (29.423) (6.632) (29.987) (6.632) Financing and loans proceeds 294.252 243.623 294.252 243.623 Financing and loans amortization - principal (240.390) (180.499) (240.390) (180.499) Financing and loans amortization - interests (23.877) (33.653) (23.877) (33.653) Loans with affiliate companies 17.976 (5.260) 2.315 74

24.108 38.079 7.883 43.413

INCREASE (DECREASE) OF CASH AND CASH EQUIVALENTS 11.635 1.884 49.204 19.416

Initial balance on cash and cash equivalents 51.892 50.008 74.894 55.478 Ending balance on cash and cash equivalents 63.527 51.892 124.098 74.894 INCREASE (DECREASE) OF CASH AND CASH EQUIVALENTS 11.635 1.884 49.204 19.416




Added Value StatementYear ended as December 31, 2009 and 2010 (In thousands of Reais)

31/12/2010 31/12/2009 31/12/2010 31/12/2009Represented Represented

REVENUES 733.651 702.472 812.238 727.770 Selling of goods, products and services 732.071 701.894 810.658 726.965 Other revenues (expenses) 1.580 805 1.580 805 Allowance for doubtful accounts - (227) -

PROVISIONS ACQUIRED FROM THIRD PARTIES (340.829) (330.330) (399.396) (346.208) Costs of goods, products and sold services (205.580) (203.923) (259.244) (217.430) Materials, power, third parties services and other (135.249) (126.407) (140.152) (128.778)

GROSS ADDED VALUE 392.822 372.142 412.842 381.335 Depreciation and Amortization (689) (674) (1.597) (1.271)

NET ADDED VALUE 392.133 371.468 411.245 380.064

ADDED VALUE RECEIVED UNDER TRANSFER 22.314 9.762 19.415 8.927 Result using the Equity method 5.019 1.963 (236) 893 Financial revenues 17.295 7.799 19.651 8.034

ADDED VALUE TO BE DISTRIBUTED 414.447 381.230 430.661 388.991

DISTRIBUTION OF ADDED VALUEPERSONNEL 240.230 216.673 251.377 223.249 Wages and charges 219.868 202.819 223.888 205.485 Benefits 7.209 11.091 14.005 14.834 FGTS 13.153 2.763 13.484 2.930 TAXES, CHARGES AND CONTRIBUTIONS 97.336 89.643 100.597 90.520 Federal 69.052 50.878 72.207 51.680 State 7.509 22.350 7.615 22.424 Municipal 20.775 16.415 20.775 16.415 REMUNERATION OF THIRD PARTIES CAPITAL 47.063 46.887 48.869 47.195 Interests 43.768 43.817 43.836 43.908 Rentals 3.295 3.070 5.033 3.286 REMUNERATION OF THEIR OWN CAPITAL 29.818 28.027 29.818 28.027 Profits to be distributed by the General Meeting of Shareholders 29.818 28.027 29.818 28.027

TOTAL ADDED VALUE DISTRIBUTED 414.447 381.230 430.661 388.991


CONSOLIDATEDHOLDING COMPANY

IESA ÓLEO & GÁS S/A Notes to the Consolidated Financial Statements for the years ended

December 31, 2009 and 2010 (In thousands of Brazilian Reais unless otherwise indicated)

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NOTE 1 – OPERATIONAL CONTEXT IESA Óleo & Gás S.A. is a private held company whose Incorporation Articles dated as March 4, 2005 are filed with JUCERJ under the number 33.3.0027555-0. It is also enrolled with CNPJ - Brazilian Registry of Legal Entities under the number 07.248.576/0001-11. Headquartered in the city of Rio de Janeiro – RJ, Rua Mayrink Veiga, 09, 14o andar parte, CEP 20090-050. Company’s main business is the services provision and supply of materials for oil, gas, chemical and petrochemical industries in order to deliver complete solutions under EPC (Engineering, Procurement and Construction), through the development of studies and engineering projects and consultancy to the delivery of maintenance, construction, assembly and technical assistance services. Release of these financial statements was authorized on March 31, 2011. NOTE 2 – GROUNDS FOR THE PREPARATION OF THE FINANCIAL STATEMENTS Financial statements of the Company and its affiliate include:

a) Holding Company’s Individual Financial Statements

The Holding Company’s individual financial statements were prepared and are in full compliance with the accounting principles generally accepted in Brazil, with the Act no. 11638/07 and Act no. 11941/09, and statements issued by CPC – Accounting Pronouncements Committee and approved by CFC – Brazilian Accounting Committee and by CVM – Brazilian Securities Commission. Independent financial statements present the assessment of investments in affiliates by the equity method pursuant to current Brazilian law, thus, they are not considered in compliance with IFRS which require the assessment of said investments in the Holding Company statements in separate by cost or fair value. b) Consolidated Financial Statements Consolidated financial statements were prepared and are presented in compliance with the accounting international standards (IFRS) issued by International Accounting Standard Board – IASB, and also with the accounting principles generally accepted in Brazil, and in full compliance with Act no. 11638/07 and Act no. 11941/09, and statements issued by statements issued by CPC – Accounting Pronouncements Committee and approved by CFC – Brazilian Accounting Committee and by CVM – Brazilian Securities Commission.

As there is no difference between consolidated net shareholders’ equity and the result of the Holding Company included in the individual financial statements prepared in accordance with the accounting practices generally accepted in Brazil, the Company has elected to present these individual and consolidated financial statements jointly.



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Company has elected the transition date to IFRS on October 1, 2009. These financial statements were prepared by considering some exceptions to the date of transition. For comparison purposes, and considering that there is no strong evidence that fair value of the fixed asset measured on the basis date of January 1, 2010 is significantly different from the fair value measured on the beginning of the accounting year on January 1, 2009, and since the effects of said difference are not significant, this value has been accepted as the fair value of fixed asset on the beginning of accounting year of this comparative statement. The effects of main differences between the accounting practices generally accepted in Brazil by December 31, 2008 and IFRS, including the reconciliation of net shareholders’ equity and the Company’s result are given in the Note no. 04. NOTE 3 – SUMMARY OF THE MAIN ACCOUNTING PRINCIPLES ADOPTED 3.1 Consolidation Bases The consolidated financial statements incorporate the financial statements of IESA Óleo & Gás and the affiliated presented below: Affiliate % Interest 31/12/2010 31/12/2009 QUIP S.A. 13.25% 13.25% Controlling interest of the affiliate QUIP S/A is shared with other shareholders, thus the consolidation is proportional to the IESA Óleo & Gás S.A. interest in the capital stock. Criteria adopted for consolidation are those set ou in Act no. 6404/76 and amendments enacted by Act no. 11638/07 and Act no. 11941/09 which are stressed as follows:

a) Elimination of balances out of asset and liabilities account resulted from transactions between the companies included in the consolidation;

b) Elimination of investments in affiliate companies in the proportion of their respective equities. c) Elimination of revenues and expenses resulted from business with the companies included in

the consolidation; and Standardization of accounting policies and procedures adopted by the companies included in these consolidated financial statements to align with the accounting policies of the holding company so the presentation will use the uniform bases for classification and measurement.

Additional Information on the Jointly Controlled Company

IESA Óleo & Gás jointly with Construtora Queiroz Galvão, Construtora Camargo Correa, UTC Engenharia and PJMR Ltda. has interest in the QUIP S.A. capital, a company providing offshore constructions to the market, currently in charge of the construction of the Platform P-55 to Petrobras



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and Platform P-63 for JV Petrobras-Chevron. In accordance with the “Shareholders Agreement” corporate resolutions are not subject to the preponderance of any shareholders, and all strategic resolutions will be approved by the Board of Directors represented by the members appointed by shareholders companies.

With the adoption of IFRS the financial statements of QUIP S.A. were proportionally consolidated in compliance with CPC 19 - Investments in Jointly Controlled Ventures (IAS 31). 3.2 Changes in Accounting Policies In the convergence process to adopt IFRS (International Financial Reporting Standards) pursuant to Acts no. 11638/07 and 11941/09 and Technical Statements issued by Accounting Standards Committee, the primary changes impacting on the accounting policies adopted by the Company were: a) Measurement of certain financial assets maintained for negotiation at fair value by the result and

measurement of financial assets maintained for sale at fair value by net shareholders’ equity.

b) Sales revenue is measured at its fair value of the consideration to the respective adjustment at present value of long term and short term account receivable, when relevant. Adjustment of acquisition cost of assets and services contract at fair value with such respective adjustment at the present value of long term and short term account receivable, when relevant.

c) Activation of assets, object to the financial leasing, considering the recognition of corresponding financing value.

d) Performance of impairment tests according to the Technical Statement CPC 01 whenever there is

an indication that an asset may be impaired.

e) Creation of an asset evaluation adjustment account for offsetting of increase or decrease of value attributable to items of assets and liabilities due to assessment at fair value.

3.3 Classification of Current and Non-Current Items In the Balance Sheet assets and unmatured liabilities, or expected to be realized within the next twelve months are classified as current assets, and with maturity or expected to be realized longer than twelve months are classified as non-current assets. 3.4 Accounts Offset



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As a general rule, in the financial statements neither assets nor liabilities, or revenues and expenses are offset unless when offset is required or set out by a Technical Statement or Brazilian accounting standard, and when this offset reflects the transaction itself. 3.5 Foreign Currency Transactions Items in these financial statements are measured in Reais (R$) which is the currency of the primary economic environment in which the Company operates, and where transactions are predominantly made and are presented in this same currency. Transactions in foreign currencies are recorded at the functional currency rate as set out in the Technical Statement CPC 02—Effects of Changes in Foreign Exchange Rates and Conversion of Financial Statements. Monetary assets are translated at the rate of exchange ruling at the balance sheet date. Non-monetary items are translated using the exchange rates as at the dates of the initial transactions. 3.6 Cash and Cash Equivalents Cash and Cash Equivalents comprise cash at bank, cash on hand and short term highly liquid assets with original maturity of three months or less. 3.7 Financial Assets Company’s assets are classified into the following categories: Measured at fair value through the profit or loss (FVTPL), loans and receivables and available for sale (AFS). The classification depends on the purpose of the financial assets were acquired. Management determines the classification of its financial assets at the time of initial recognition. (a) Financial assets are classified at fair value through profit or loss. Financial assets classified at fair value through profit or loss are financial assets maintained for negotiation. A financial asset is classified under this category in case of sale primarily for short term sale. The assets in this category are classified as current assets. (b) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active market. They are included as current asset except those with maturity date longer than 12 months after the date of the balance sheet is issued (these are classified as non-current assets). Group’s loans and receivables comprise the “clients accounts receivables and other accounts receivables” and “cash and cash equivalents”.



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(c) Financial assets available for sale Financial assets available for sale are non-derivatives which are designated in this category or are not classified in any other category. They are included in non-current assets unless the Management intends to dispose the investment within 12 months after the date of the balance sheet. Recognition and Measurement: Regular purchases and sales of the financial assets are recognized on the trade date – when the Company undertakes to purchase or sell the asset. Initially the investments are recognized by the fair value plus the transaction costs for all financial assets not measured at fair value through profit and loss. Initially the investments are recognized by the fair value plus the transaction costs for all financial assets not measured at fair value through profit and loss. Financial assets are write-off when the rights to receive the cash flows of investments are matured or have been transferred. In this last case, provided that the Group has transferred significantly all risks and benefits of the property. Financial assets available for sale and financial assets measured at fair value through profit and loss are subsequently carried by the fair value. Loans receivable and other receivables are carried at amortized cost using the effective interest rate method. Gains and losses resulted from the variations at fair value of financial assets measured at fair value through profit and loss are recognized through the consolidated income statement at the time they occur. Variations in the value of assets classified as available for sale are split between the variations in the amortized cost and variations at fair value of the asset. Variations in the amortized cost are recognized in the profit and loss. Variations at fair value are recognized in the shareholders’ equity. When assets classified as available for sale are sold or impaired, the adjustments accrued in the fair value and recognized in the shareholders’ equity are included in the income statements. The Company evaluates on the date of balance sheet if there is any objective evidence of impairment of the financial asset or group of financial assets. In the case of assets classified as available for sale, a significant or long loss in amount of impairment loss decreases is considered an indicator of assets impairment. Should any of these evidences exist in the financial assets available for sale, the accrued loss is reversed from the shareholders’ equity and recognized through the income statements. 3.8 Clients Accounts Receivables



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Clients accounts receivables correspond to the amounts to be received from clients for the sale of goods or provision of services during the regular course of the Company’s activities. The clients accounts receivables are initially recognized at fair value and subsequently measured at the amortized cost using the effective interest rate method less the impairment provision (losses in the credits receivables). In general, they are recognized at the invoiced value adjusted at the present value and adjusted by the impairment provision, if required. 3.9 Inventories Inventories are demonstrated at the cost of acquisition of ongoing services, net of recovered taxes, and do not exceed the market prices. 3.10 Investments Permanent investments in affiliates and under an ordinary controlling are assessed by the equity method. 3.11 Property and Equipment (Fixed Asset) As set ou in the Technical Interpretation ICPC 10 of Accounting Statements Committee, approved by Resolution CVM no. 619/99, the Company has completed the first of periodical analysis in order to revise and adjust the estimated useful economic life for depreciation calculation. For the purposes of this analysis, the Company has based on the expectancy of goods utilization, estimate of useful life of assets as well as estimate of their residual value in accordance with previous experiences with assets. Subsequent costs are included in the asset carrying value or recognized as a separate asset, as appropriate, when it is likely to obtain future associate economic benefits to the item and that the item cost can be safely measured. Carrying value of items or parts replaced is write-off. All other repairs and maintenance are recorded to offset the loss and profit of the period, when incurred. Land is not depreciated. Depreciation of other assets is calculated on a straight-line basis over the estimate useful life of the asset. Residual values and the useful life of the assets are reviewed and adjusted, if appropriate, at the end of each year. Carrying value of the asset is immediately adjusted when this value is higher than its estimate recoverable value. In order to comply with the item 22 of ICPC 10 which sets out on the attribution of a new cost to the fixed assed, the Company understands that the value of fixed asset accounted on the date base as of



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December 31, 2009 reflects the fair market value, thus the Company has decided to not attribute the deemed cost at the initial adoption of Resolution CVM no. 583/09. 3.12 Intangible Intangible assets acquired are measured at cost at date of initial recognition. Following initial recognition, intangible assets are reflected at cost, less amortization and impairment losses. Except for capitalized development costs, internally generated intangible assets are not capitalized, and development expenditure is reflected in the consolidated income statement in the year in which the expenditure is incurred. Useful life of intangible assets is assessed as finite or indefinite. Intangible assets with finite lives are amortized over their useful economic life and are assessed for impairment whenever there is an indication that the intangible asset may be impaired. 3.13 Non-Financial Assets Impairment Intangible assets with indefinite useful life are not subject to amortization and are tested annually for impairment. Assets subject to depreciation or amortization are reviewed for impairment whenever events or changes in the circumstances indicate that the carrying value of the asset may be impaired. Impairment loss is recognized at the value the carrying value of the asset exceeds its recoverable value. The recoverable value is the higher of the asset’s value in the fair value less costs to sell and its value in use. For the purposes of impairment assessment, assets are grouped in the lowest levels where cash flows are identified in separate (Cash Generating Units – UGC). Impaired non-financial assets are reviewed for the analysis of possible impairment reversal on the presentation date of financial statements. 3.14 Accounts Payable to Suppliers Accounts payable to suppliers are payable obligations for goods or services acquired from suppliers in the ordinary course of business and are, initially, recognized by the fair value and subsequently measured at amortized cost using the effective interest rate method. In practice, they are generally recognized at the corresponding invoice value adjusted to the present value, when pertinent. 3.15 Loans and Financing



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Loans and financing are initially recognized at fair value, net of transaction costs and are subsequently demonstrated at the amortized cost. Any difference between the captured values (net of transaction costs) and the withdrawal value (payments) is recognized through the income statements during the period in which the loans are in progress using the effective interest rate method. 3.16 Provisions Provisions are recognized when the Company has a present liability or non-formalized liability (constructive liability) as a result of past events; it is likely that an outflow of resources is required to settle the liability; and the value was safely estimated. When existing a series of similar liabilities the probability of Company to settle the liabilities is determined by considering the class of liabilities as a whole. A provision is recognized even when the probability of settling related to any individual item include in the same class of liabilities is little. Provisions are measured at the present value of expenditure required for the settlement of liability using a pre-tax rate that reflects the current market assessments of the temporal value of money and of the risks specific to the liability. Any increase in the provision due to the passage of time is recognized as a finance cost. 3.17 Tax and Contribution Payable Tax expenses in the period include the current and deferred income tax. Tax is recognized through income statements except in the proportion it relates to the items recognized directly in the shareholders’ equity. In this case the tax is also recognized in the shareholders’ equity. The current tax payable is based on the tax laws enacted on the balance sheet date. Management periodically assesses the Company’s assumptions in the income tax statements related to the situations in which the applicable tax regulation gives rise to interpretations. When appropriate, sets out provisions based on the values to be collected to the tax authorities. Deferred income tax and social charge accounted in the non-current asset or in the non-current liability result from temporary differences arising out of revenues and expenses recorded in the result, however, added or excluded temporarily from the taxable income and social charge calculation. 3.18 Leasing



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Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset.. The ownership may be transferred or not. Operating lease is a leasing that is not classified as financial lease. Operating lease is recorded as assets and liabilities in a similar manner to the financing operations under equal amounts at fair value of the leased property or, if lower, at the present value of the minimum lease payments, each determined at the inception of the lease. Operating lease payments of lease are segregated between financial cost recorded in the result and reduction of open liability. Operating lease payments are recognized as an expense on a straight-line basis over the lease term. 3.19 Employees’ Benefits Company recognizes a liability and an expense for share-profit based on a programme approved by the corresponding Union, and takes into consideration the quality, productivity goals and profit attributable to the Company’s shareholders after certain adjustments. 3.20 Closing Process The result is calculated under accrual basis accounting and includes the recognition of the result of construction contracts and deliveries accounted for using the percentage-of-completion method on the basis of existing relation between updated estimate revenue and estimate budgeted costs and incurred costs in accordance with applicable regulations to CPC 17 (IAS 11). Expenses and costs are recognized in case of a reduction of asset or recording of a liability, and since they may be reasonably measured. 3.21 Recognition of Sales Revenues Sales revenue comprises the fair value of remuneration payable or receivable for the commercialization of products and services in the ordinary course of Company's activities. Revenue is demonstrated net of taxes, devolutions, discounts as well as after the elimination of sales between the Company subsidiaries. Company recognizes the revenue when: The value of revenue may be safely measured; (ii) it is probable that the economic benefits will flow to the Company; and



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(iii) specific criteria have been complied with for each activity of the Company. Revenue value is not considered as safely measured until all contingencies related to the sales are settled down. Company bases its estimates on historical outcomes by taking into consideration the type of client, type of transaction and specifications of each sale. 3.22 Dividends Distribution of dividends to the Company’s shareholders is provisioned only as a liability on the date of approval by shareholders in a General Meeting. 3.23 Critical Accounting Judgment and Key Sources of Estimation When preparing the financial statements the Company Management is required to make estimates for the recording of transactions that affect the assets and liabilities, revenues and expenses as well as the publication of information on its financial statements. Actual results of these transactions and information may differ from these estimates under different conditions. Accounting policies and areas requiring a larger level of judgment and use of estimates in the preparation of financial statements are: a) Uncollectible account which are initially provisioned and subsequently accounted as loss when all

possible recovery is exhausted; b) Useful life and residual value of fixed and intangible assets;

c) Impairment of fixed and intangible assets;

d) Expectancy to realize tax credits deferred from the income tax and social charge;

e) Contingent liabilities provisioned in accordance with possible success, obtained and measured

jointly with the Company legal department. Company reviews the estimates and assumptions on a three month and/or annually basis at least. NOTE 4 – INITIAL ADOPTION OF IFRS



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Company elected January 1, 2009 as the transition date, therefore all comparative information related to the year ended December 31, 2009 are represented in accordance with new practices and applicable laws. 4.1 – Conciliation between previous accounting credits and IFRS

SHAREHOLDERS' EQUITY 31/12/2009 01/01/2009 31/12/2009 01/01/2009In accordance with previous accounting practices 131.188 88.161 131.188 88.161

a) Net assets write-off (11.152) (11.152) (11.152) (11.152) b) Adjust in depreciation relating to the useful life of fixed asset 194 - 194 - b) Deferred IR/CS with no adjust in depreciation relating to the useful life of fixed asset (63) - (63) - c) Deferred IR/CS with no temporary additions and exclusions (1.596) 570 (1.596) 570

In accordance with IFRS 118.571 77.579 118.571 77.579 12.617- 10.582- - 12.617- 10.582-

INCOME STATEMENT 2009 2009In accordance with previous accounting practices 30.063 30.063

b) Adjust in depreciation relating to the useful life of fixed asset 194 194 b) Deferred IR/CS with no adjust in depreciation relating to the useful life of fixed asset (63) (63) c) Deferred IR/CS with no temporary additions and exclusions (2.167) (2.167)

In accordance with IFRS 28.027 28.027


a) Net Assets Write-Off

According to the new accounting standard, recognition and reassessment of intangible assets produced internally is not allowed, thus on the transaction date the Company provided the write-off of these net assets. b) Revision of Useful Life of Fixed and Intangible Asset From the transition date onwards Company has revised all estimates for useful life of fixed and intangible assets and consequently has changed its annual rates of depreciation and amortization.



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c) Deferred IR/CS on Temporary Additions and Exclusions Deferred income tax and social charge accounted result from temporary differences added or excluded temporarily on the calculation of taxable income and social charge controlled in part B of LALUR for year 2008. NOTE 5 - FINANCIAL INSTRUMENTS RISKS MANAGEMENT In compliance with Resolution CVM no. 604 as of November 19, 2009 that approved the Technical Statements CPC nos. 38, 39 and 40, and the Instruction CVM 475 as of December 17, 2008, the Company revises the main financial instruments as well as the criteria for valorization, assessment, classification and risks associated as follows: (a) Receivables: Receivables are the values of cash and cash equivalents, accounts receivables

and other current assets whose values recorded are similar on the balance sheet date and realization date.

(b) Measured at fair value through Profit or Loss: Financial investments are classified as cash equivalent for their high liquidity and readily convertible in cash, and are measured at fair value through profit or loss.

(c) Derivatives: Company does not maintain operations in derivatives.

(d) Other Financial Liabilities: This group includes the loans and financing, balances with suppliers and other current liabilities. Loans and financing are not adjusted by rates subsidized, and all operations are subject to the market rates.

(e) Fair Value: Fair values of financial instruments are equal to carrying values.

(f) Financial Instruments Risks Management: Company manages the exposure to the risks of

rates, exchange rates, credit and liquidity of its operations using financial instruments in accordance with its business policy.

Risks of Interest Rates The purpose of management policy of interest rates is to minimize possible impacts resulted from variations of the interest rates adjusted to its financial instruments. Therefore the Company's strategy is to diversify its operations by securing the financial operations under fixed and variable rates.



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Company has undergone a sensitivity test for adverse scenarios by deteriorating the variable rates (CDI) by 25% (Management judgment) which would result in an increase of finance costs by R$1.786 during year 2010. Risks of Exchange Rates

On December 31, 2010 Company had an foreign currency exposure of US$27,9 million whose detailed composition is in the table “Sensitivity Analysis of Foreign Currency Exposure” in this Note hereof. Risks of Credit and Price Formation The nature of services and deliveries by IESA Óleo & Gás S.A. is of large projects, mostly having medium and long term construction phases, which are paid over the execution thus reducing the credit risks. All prices are adjusted annually in accordance with the contract formula. Sensitivity Analysis of Financial Instruments In order to present the risks to generate significant losses for the Company, as set out by CVM through Instructions nos. 475 and 550/08, we present the sensitivity analysis of financial instruments which potentially show risk associated with the variation of exchange rate (risk of rising dollar price).

Assets 31/12/2010 Scenario I Scenario II Scenario IIIR$ Mil R$ Mil R$ Mil R$ Mil

LiabilitiesBanking debt 48.241 20.533 59.963 71.685 Derivatives - - - - Other liabilities - - - -

48.241 20.533 59.963 71.685

Net Exposure - R$ Mil 48.241 20.533 59.963 71.685

Net Exposure - US$ Mil 27.941 27.941 27.941 27.941

Dollar Exchange Rate 1,73 0,73 2,15 2,57

Demonstrative Chart of Sensitivity Analysis on Exchange Rate Exposure



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Description 31/12/2010 Scenario I Scenario II Scenario IIIR$ Mil R$ Mil R$ Mil R$ Mil

LiabililitiesBank Debts 48.241 49.686 59.963 71.685 Derivatives - - - - Other Liabilities - - - -

48.241 49.686 59.963 71.685

Net Exposure - R$ Mil 48.241 49.686 59.963 71.685

Net Exposure - US$ Mil 27.941 27.941 27.941 27.941

Dollar Exchange Rate 1,73 1,78 2,15 2,57

Demonstrative Chart of Sensitivity Analysis of Foreign Currency Exposure

NOTE 6 – CASH AND CASH EQUIVALENTS

31/12/2010 31/12/2009 31/12/2010 31/12/2009Cash 83 28 84 29Banks 1.778 14.644 2.079 14.784Banks - Foreign currency 3.691 3.359Financial investments 61.666 37.220 118.244 56.722Total Cash Equivalents 63.527 51.892 124.098 74.894

Holding Company Consolidated



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Financial investments are secured by certificate of deposit (CDB) and Agreed Operations certificate whose earnings depend on CDI performance. NOTE 7 – CLIENTS AND OTHER CREDITS

31/12/2010 31/12/2009 31/12/2010 31/12/2009Clients Accounts Receivable 25.829 18.159 11.052 18.159Clients Accounts Receivables to be billed ( 54.486 17.862 54.486 17.862Receivables from Consortia (b) 56.688 113.640 72.083 113.640Impairment (allowance for losses) (1.751) (1.751)Advance against draft presentation (19.462) (19.462)Clients Accounts Receivables 137.003 128.448 137.621 128.448Other accounts receivable 521 814 521 814Dividends receivable 263Advances 1.180 545 1.306 1.184Current installments 138.967 129.807 139.448 130.446

Loans with affiliate companies 400Other receivables 7 358 122 447Non-current installments 7 358 122 847

Total clients' receivables 137.003 128.448 137.621 128.448Total of other accounts receivables 1.971 1.717 1.949 2.845Total 138.974 130.165 139.570 131.293


a) Balance of the clients accounts receivables to be billed refer to contracts in which the portions are

recognized under the accrual basis in accordance with the physical progress of services. This procedure does not modify the receipt deadlines as stipulated in contracts with clients attached to the expenditure evolution schedules.

b) Credits with consortia represent the receivable values relating to the results generated in the ventures the Company has interests in, with other partners, in EPC (Engineering, Supply of Equipment/Procurement and Construction) contracts for platforms, refineries and gas plants. Realization of these values is given as follows: Consortia pay an administration fee to the companies on a monthly basis, and periodically the profit is distributed. Below the balance breakdown on December 31, 2010 is given:



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Equity % of Income BalanceConsortia Assets Liabilities Net Revenues Result Interest Distributed ReceivableConsórcio QI - Reduc HDS 219.103 58.950 63.427 428.999 96.726 35,0% (31.533) 24.521Consórcio QI - Reduc Plangás 339.563 154.211 125.656 609.315 59.696 35,0% (4.031) 60.842Consórcio QI - Revap 48.081 2.356 62.135 21.523 (16.410) 35,0% (1.388) 14.616Consórcio UTGCA - Caraguatatub 459.054 328.048 35.935 518.485 95.071 17,5% (11.664) 11.262Consórcio Odebei - Plangas 153.510 6.159 91.442 141.404 55.909 15,0% (21.422) 681Consórcio Odebei - Flare 63.824 18.613 7.633 119.060 37.578 15,0% (5.941) 841Consórcio Marlim Leste 188.084 32 108.430 88.521 79.622 15% (27.331) 877Em 31 de dezembro de 2009 1.471.219 568.369 494.658 1.927.307 408.192 (103.310) 113.640

Consórcio CII - Ipojuca Rnest Inter 55.855 42.348 146.921 13.507 40,0% (261) 5.142Consórcio QI - Reduc HDS 238.007 24.278 160.153 310.141 53.576 35,0% (56.182) 18.623Consórcio QI - Reduc Plangás 143.368 22.408 185.349 266.935 (64.389) 35,0% (36.123) 6.213Consórcio QI - Revap 30.969 45.725 3.632 (14.756) 35,0% (10.597) 242Consórcio QGGI - Comperj HDT 10.940 5.071 5.869 24,5% (111) 1.327Consórcio UTGCA - Caraguatatub 456.002 172.886 131.006 1.004.789 152.110 17,5% (24.832) 24.713Consórcio Odebei - Plangas 162.886 1.237 147.352 21.627 14.297 15,0% (24.433) (186)Consórcio Odebei - Flare 46.129 45.215 8.636 914 15,0% (6.877) 42Consórcio Marlim Leste 188.071 188.053 18 15,0% (27.639) 572Em 31 de dezembro de 2010 1.332.227 268.228 902.853 1.762.681 161.146 (187.055) 56.688

NOTE 8 - INVENTORIES

31/12/2010 31/12/2009 31/12/2010 31/12/2009Services in preparation 30.087 47.430 30.087 47.430Import in process 5.811 5.031Deferred revenue to suppliers 5.082 4.911 14.004 5.475Total Inventories 35.169 52.341 49.902 57.936


NOTE 9 – TAX CREDITS



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Current 31/12/2010 31/12/2009 31/12/2010 31/12/2009ICMS 169 112 195 121PIS 1.331 921 1.331 921COFINS 6.137 4.253 6.137 4.253IRRF 603 603CSLL 1.007 1.007IRPJ Estimated 38 1.392 38 1.634CSLL Estimate 215 725 215 755Refund request (Pis and Cofins) 4.692 4.692INSS withholding 188 189Others 3 22 4Total Taxes Credit 9.691 12.095 9.737 12.380


NOTE 10 – ASSETS HELD FOR SALE On December 30, 2010, IESA Óleo & Gás acquired from Inepar Administração e Participações S.A. (IAP) 15% of total amount of shares of GFS Premium Administração e Participações S.A., representing 66,000 (sixty-six thousand) common shares for R$128.897. As part of payment method IESA Óleo & Gás transferred to IAP the credits resulted from Brazilian Government Bonds (TDP) named “State of Rio de Janeiro – 7% Sterling Loan of 1927”, authenticated by Brazilian Treasury policy no. 11067 in the proportion of 21,77948%. At the Board of Directors meeting held on the same date, the Board of Directors approved the acquisition of GFS shares for further disposal as well as authorized the Board of Executives to set a sales plan in order to find a purchaser. GFS Premium Administração e Participações is a holding controlling 100% of the capital stock of Companhia Brasileira de Diques (CBD), that is the owner of land and properties in the Port area of Rio de Janeiro, district of Caju, former shipyard ISHIKAWAJIMA (IHI) in an area larger than 400,000 square meters. This area is provided with two dry docks, one of them being considered the largest in the South America with capacity for 400,000 DWT. CBD also holds 99.86% of capital stock of BRIC Brazilian Intermodal Complex S.A. (BRICLOG), a port base support operating company. NOTE 11 – INVESTMENTS



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31/12/2010 31/12/2009 31/12/2010 31/12/2009Investments in Affiliates Companies 5.878 3.287 450 1.737Properties for investment 20.600 20.600( - ) Dividends advance (576)Total Investments 26.478 2.711 21.050 1.737


11.1 Investments in Affiliates Companies In the Holding Company’s financial statements the following investments in affiliate companies are recognized and assessed by the net equity of companies in accordance with the interest held in each company.

31/12/2010 31/12/2009Initial Balance 2.711 4.682 Shareholders' Equity:

Income from affiliates and controlled compan 5.019 1.963 Comprehensive results (41) -

Investments write-off - (184) Dividends paid (1.811) (3.174)

Balance on December 31 5.878 3.287

Shareholders' Equity % of Investment Name Assets Liabilities Net Revenues Income Interest ValueOn December 31, 2009QUIP S.A. 261.420 249.743 11.677 13,25% 1.547 QUEBEC - Constr.Mont.Transp. Estrut.Ltda 7.588 2.617 4.971 15.109 2.213 35,00% 1.740

269.008 252.360 16.648 15.109 2.213 3.287

On December 31, 2010QUIP S.A. 736.321 695.356 40.965 616.520 39.660 13,25% 5.428 QUEBEC - Constr.Mont.Transp. Estrut.Ltda 1.595 309 1.286 267 (699) 35,00% 450

737.916 695.665 42.251 616.787 38.961 5.878



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11.2 Property for Investment Holding Company 31/12/2010 31/12/2009 Initial Balance Additions Transferences 11.784 Adjustment at fair value 8.816 December 20.600 In compliance with CPC 28 – Property for Investment, the Company hired experts in order to obtain the fair value of an estate having 440,000 square meters and 26,986 square meters of construction located on BR 116 KM 121,5, District of Iriri, in the City of Magé/RJ. The fair value was obtained on the date base of December 31, 2010, and the price that the property could reach in case of sale within a reasonable time, and the owner planning but not being obliged to sell the property, and the purchaser buying it fully aware of all uses and purposes the property is adapted to and may be used however without being committed to the purchase. In financial statements as of December 31, 2009 and on the date of IFRS adoption on January 1, 2010, the property herein was for sale. In 2010 the Board of Executives decided to maintain the property in the short term for obtaining better valorization for the estate since its location is close to the future facilities of Rio de Janeiro Petrochemical Complex (Comperj), in Itaboraí/RJ. NOTE 12 – FIXED ASSETS



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Building Machines Furniture Softwares Lease Fixed AssetCONSOLIDATED Land construct and Equip. Facilities Vehicles Hardwares Hardware in process Total

Depreciation rates 2% 10% 10% 10% 20% 20%

On December 31, 2008Cost 4.400 12.525 2.534 526 1.451 11 1.713 23 23.183Accrued Dep and Impairment (3.558) (543) (368) (305) (7) (699) (5.480)Net accounting value 4.400 8.967 1.991 158 1.146 4 1.014 23 17.703

Initial balance 4.400 8.967 1.991 158 1.146 4 1.014 23 17.703Additions 1.441 249 58 347 364 1.315 3.774ReassessmentLoans costsWrite-offs (32) (29) (14) (75)Transf. Mant. For saleImpairment Impairment reversalReclassifications 966 156 (966) 156Reclassifications - depreciation (49) (49)Depreciation (184) (328) (4) (168) (509) (1.193)Depreciation write-off 9 5 14Final balance 4.400 11.190 1.889 212 1.301 4 962 372 20.330

On December 31, 2009Cost 4.400 14.932 2.751 584 1.769 11 2.219 372 27.038Accrued Dep and Impairment (3.742) (862) (372) (468) (7) (1.257) (6.708)Net accounting value 4.400 11.190 1.889 212 1.301 4 962 372 20.330

Initial balance 4.400 11.190 1.889 212 1.301 4 962 372 20.330Additions 2.400 8.765 2.612 44 428 3.270 977 638 899 20.033ReassessmentLoans costsWrite-offs (2) (1) (34) (37)Transf. Mant. For saleImpairment Impairment reversalReclassifications 118 30 (148)Depreciation (603) (361) (5) (211) (354) (1.534)Depreciation write-off 1 1Final balance 6.800 19.470 4.168 251 1.518 3.274 1.551 638 1.123 38.793

On December 31, 2010Cost 6.800 23.815 5.391 628 2.196 3.281 3.162 638 1.123 47.034Accrued Dep and Impairment (4.345) (1.223) (377) (678) (7) (1.611) (8.241)Net accounting value 6.800 19.470 4.168 251 1.518 3.274 1.551 638 1.123 38.793



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Company conducted the assessment of Economic Useful Life of Fixed Asset in accordance with Act 11638/07 and 11941/09 in full compliance with the Resolution CVM no. 583 as of July 31, 2009 which approves the Technical Statement CPC 27, addressing the fixed assets and their useful life, and Resolution CVM no. 619 as of December 22, 2009, which approves the Technical Interpretation ICPC 10, upon a report issued by a specialized company. In order to comply with the item 22 of ICPC 10 which sets out on the attribution of a new cost to the fixed assed, the Company understands that the value of fixed asset accounted on the date base as of December 31, 2009 reflects the fair market value, thus the Company has decided to not considered the deemed cost at the initial adoption of Resolution CVM no. 583/09. Methodology Used to Determine the New Depreciation Calculation Base adopted for determining the new depreciation calculation was the Company’s policy on new useful lives and residual percentages for each item of the fixed asset of the units assessed. For each group of items, Company set out a new useful life in accordance with premises, criteria and comparative elements provided below:

Assets renovation policy; Company’s expectancy based on the experience of the Group companies; Information on economic environment; Accounting and equity control information; Technical specifications, and Assets maintenance policy.

In determining the estimate useful life policy, the criteria used by expert were the assets maintenance condition, technological evolution, assets renovation policy, company’s expectancy based on the market with similar assets. On December 31, 2010, the amount of R$246 (R$85 on December 31, 2009) related to the depreciation of fixed assets was discounted from the item “costs of products and services” and the amount of R$578 (R$768 on December 31, 2009) as “general and administrative expenses”. Because of several financing contracts, whose debt balance amounted to R$13,977 on December 31, 2010, Company’s fixed assets such as computer equipment, licenses for software use and one property located in the City of São Vicente/SP are under a security fiduciary sale.



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NOTE 13 - INTANGIBLE

Lease Roll out of Roll out of CONSOLIDATED Software Software New Processes ERP in process Total

On December 31, 2008Cost 437 437Accrued Amortization and Impairmen (206) (206)Net accounting value 231 231

Initial balance 231 231Additions 574 601 1.175Reclassification (156) (156)Reclassification - amortization 49 49Amortization (159) 5 (154)Final balance 539 606 1.145

On December 31, 2009Cost 855 601 1.456Accrued Amortization and Impairmen (316) 5 (311)Net accounting value 539 606 1.145

Initial balance 539 606 1.145Additions 644 1.272 657 447 3.020Amortization (39) (72) (111)Amortization write-offs (169) (169)Saldo Final 975 1.191 3.885

On December 31, 2010Cost 1.499 1.258 4.476Accrued Amortization and Impairmen (524) (67) (591)Net accounting value 975 1.191 3.885



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On December 31, 2010 the amount of R$111 (R$(94) on December 31, 2009) was accounted as “general and administrative expenses”. NOTE 14 – IMPAIRMENT Annually or whenever an indication of loss exists, the Company conducts the recoverability tests of accounting balance of intangible, fixed assets and other non-current assets in order to determine if these assets were impaired. These tests are conducted in accordance with the Technical Statement CPC 01 – Reduction to the Recoverable Value of Assets. On December 31, 2010, the Company conducted the recoverability test for intangible, fixed assets and other non-current assets, and no losses for impairment were identified.



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NOTE 15 – SUPPLIERS AND OTHER OBLIGATIONS SUPPLIERS AND OTHER OBLIGATIONS

31/12/2010 31/12/2009 31/12/2010 31/12/2009Suppliers Accounts Payable 12.509 4.962 14.479 6.480Subsidiaries Companies Accounts Payable 42 927 42 927Suppliers Accounts Payable 12.551 5.889 14.521 7.407Social liabilities 13.845 10.555 14.663 10.639Tax liabilities 2.578 7.770 3.538 7.903Order advances 149 150 88.238 31.159Other Accounts Payable 3.092 965 3.101 1.013Current Liabilities 32.215 25.329 124.061 58.121

Suppliers Accounts PayableSubsidiaries Companies Accounts PayableSuppliers Accounts PayableTax liabilities 8.063 6.359 8.063 6.359Loans with Affiliates companies 18.938 383 2.427Other Accounts Payable 27Non-current Liabilities 27.001 6.742 10.517 6.359

Total Suppliers Accounts Payable 12.551 5.889 14.521 7.407Total Other Accounts Payable 46.665 26.182 120.057 57.073Total 59.216 32.071 134.578 64.480




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NOTE 16 – FINANCING AND LOANS LOANS AND FINANCING

CurrentModality Average Rate Securities 31/12/2010 31/12/2009Working capital CDI 0,40 - 1.361% Promisory Note/Receivables 91.013 87.919Advances against exchange VC + 6.2% per year Security Fiduciary Sale 30.588Advances against exchange VC + 100% CDI Security Fiduciary Sale 17.653Permanent assets TJLP + 0.4915% Security Fiduciary Sale 986Financial lease 100% CDI Security Fiduciary Sale 438Costs of financial transactions (2.514) (3.788)

138.165 84.131

Non-currentModality Average Rate Securities 31/12/2010 31/12/2009Working capital CDI 0,40 - 1.361% Promisory Note/Receivables 92.577 80.617Working capital CDI + 0.4074 Security Fiduciary Sale 10.059Permanent assets TJLP + 0.4915% Security Fiduciary Sale 2.358Financial lease 100% CDI Security Fiduciary Sale 1.560Costs of financial transactions (1.092) (2.664)

105.462 77.954

Total Loans and Financing 243.627 162.085

31/12/2010 31/12/2009Per maturity dateWithin 12 months 138.165 84.131From 1 to 2 years 82.567 44.552From 2 to 3 years 18.163 32.138From 3 to 4 years 4.108 1.263From 4 to 5 years 624

243.627 162.085

31/12/2010 31/12/2009Per type of currencyReais - R$ 195.386 162.085North American dollar - US$ 48.241

243.627 162.085

Holding Company

Holding Company

Holding Company

Holding Company

NOTE 17 – TAX AND CONTRIBUTION PAYABLE



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17.1 Deferred Taxes DEFERRED TAXES

Deferred charges IRPJ CSLL Total IRPJ CSLL Total IRPJ CSLL Total IRPJ CSLL Total

Provisions of contingencies 372 134 506 440 158 598 372 134 506 440 158 598Unrealized profits 36 12 48

Total Non-Current Asset 372 134 506 440 158 598 408 146 554 440 158 598

Deferred liabilities IRPJ CSLL Total IRPJ CSLL Total IRPJ CSLL Total IRPJ CSLL Total

Deferred profit on Public Bodies 5.626 2.027 7.653 7.097 2.557 9.654 5.626 2.027 7.653 7.097 2.557 9.654Costs with Financial Transactions 874 315 1.189 1.613 581 2.194 874 315 1.189 1.613 581 2.194Depreciation on Useful Life Revision 261 94 355 46 16 62 261 94 355 46 16 62Fair Value on Investment Property 2.204 793 2.997 2.204 793 2.997Lease 5 2 7 5 2 7Total Non-Current Asset 8.970 3.231 12.201 8.756 3.154 11.910 8.970 3.231 12.201 8.756 3.154 11.910

31/12/2010 31/12/2009Holding Company Consolidated

31/12/2010 31/12/2009

Holding Company Consolidated31/12/2010 31/12/2009 31/12/2010 31/12/2009

The income tax and social contribution deferred are assessed on corresponding temporary differences between the basis for calculation of income tax and social contribution on assets and liabilities and the accounting values in the financial statements assessed in compliance with Resolution CVM no. 599/09 and Instruction CVM no 371/02. Tax rates currently defined for these deferred credits are 25% for income tax and 9% for social charge. 17.2 Expenses with Taxes on Profit The charges and taxes applicable to the profit accounted for in the period are given below:



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31/12/2010 31/12/2009 31/12/2010 31/12/2009Earnings before taxes 37.705 43.718 40.645 44.072

Nominal rate 34% 34% 34% 34%

IRPJ and CSLL calculated at nominal rate 12.798 14.862 13.798 14.981

Adjustments for calculation of effective rateResult of Shareholders' Equity (1.707) (667) 80 (237)Tax Incentives (154) (215) (154) (215)Permanent Additions and Exclusions (3.039) 1.711 (2.885) 1.711Other adjustments (11) (11)

IRPJ and CSLL in the Result 7.887 15.691 10.828 16.240Current Tax (7.504) (11.926) (10.493) (12.475)Deferred Tax (383) (3.765) (335) (3.765)

Effective Rate 21% 36% 27% 37%


NOTE 18 - PROVISIONS In the course of business, Company is subject to labor and tax suits, and the suits which the amount of the loss can be reasonably estimated, are recorded in the Non-Current Liabilities.



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Holding Company Labor Tax Total Consolidated Labor Tax Total

On December 31, 2008 1.339 342 1.681 On December 31, 2008 1.339 342 1.681

Assessed during the year 78 78 Assessed during the year 78 78


Assessed during the year Assessed during the yearProvisions reversal (68) (203) (271) Provisions reversal (68) (203) (271)


Related deposit in court 5 5 Related deposit in court 5 5

Net effect 1.344 139 1.483 Net effect 1.344 139 1.483

Labor Tax Total Labor Tax Total

Short-term liability Short-term liability Long-term liability 1.417 342 1.759 Long-term liability 1.417 342 1.759On December 31, 2009 1.417 342 1.759 On December 31, 2009 1.417 342 1.759

Short-term liability Short-term liability Long-term liability 1.349 139 1.488 Long-term liability 1.349 139 1.488On December 31, 2010 1.349 139 1.488 On December 31, 2010 1.349 139 1.488

Tax and Labor Requirements Company’s income statements are subject to the revision and eventual additional issuance by Tax Authorities over a five year period. Other taxes, rates and charges are also subject to these conditions pursuant to the applicable law. As the law is frequently subject to interpretations, final approval of such taxes and charges may not be guaranteed. Foreign Trade Special Tariffs System Company obtained through Executive Declaratory Acts no. 12 and 13 as of July 6, 2009, issued by Brazil Federal Revenue (RFB), the authorization to operate under the Foreign Trade Special Tariffs System based on Normative Instruction 513/2005 for the construction of modules used on floating oil and gas exploration platform P-55. This system allows that Brazilian and imported materials are admitted and manufactured fully exempted from federal taxes in the condition that the modules are for export. On December 31, 2010, Company had an amount of R$23.590 (R$1.542 on December 31, 2009) in outstanding federal taxes.



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NOTE 19 – RELATED PARTY TRANSACTIONS 19.1 Transactions with Holding and Affiliate The following transactions were made with related parties:

31/12/2010 31/12/2009 31/12/2010 31/12/2009IESA Projetos, Equipamentos e Montagens S/A (i) 5 381QUIP S/A (ii) 63

5 444

31/12/2010 31/12/2009 31/12/2010 31/12/2009IESA Projetos, Equipamentos e Montagens S/A (i) 4 889QUIP S/A (ii) 18.938 383

4 889 18.938 383

31/12/2010 31/12/2009 31/12/2010 31/12/2009QUIP S/A (ii) 3.102 20.696

3.102 20.696

(i) Holding Company(ii) Affiliate

LoanNon-Current Liability

Non-Current AssetLoans

Current LiabilityAccounts Payable

Accounts PayableCurrent Asset

CostsResult (Revenues) Result (Expenses)

Sales

19.2 Remuneration of Key Management Personnel In compliance with CPC 05 – Disclosure on Related Parties and as set out and approved in the minutes of meeting, the remuneration of officers, below described, in 2010 are given below:



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REMUNERATION OF KEY MANAGEMENT PERSONNEL

31/12/2010 31/12/2009

Remuneration of Executive Officers - CLT 184Remuneration of Executive Officers 2.337 2.204Profit Sharing Executive Officers - CLT 20Profit Sharing Executive Officers 1.639 946Other Benefits 392 314

Balance on December 31 4.572 3.464

Holding Company

NOTE 20 – CAPITAL STOCK The capital stock is R$102.995 represented by 65,995,745 (sixty five million, nine hundred ninety five thousand, seven hundred forty-five) common shares, with voting right, non-split towards capital and at no par value. In the 15th General Meeting held on December 20, 2010, the capital stock was increased to R$3.128 by using the dividends due to minority shareholders on the base date of November 30, 2010. 20.1 Distribution Proposal and Result Destination DISTRIBUTION PROPOSALS AND RESULTS DESTINATION

R$ MilNet income or loss 29.818( - ) Effects of IFRS adoption (10.582)Net income 19.236Legal reserve assessment - 5% (962)Net income for General Meeting disposal 18.274

NOTE 21 – PROFIT SHARING



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Company maintains a Results Leverage Program (PAR) to its employees binding to the goals accomplishment, whose parameters for the year 2010 are included in the agreement signed on June 21, 2010. R$3.000 were provisioned in the current liability to be distributed to the registered employees (under CLT system) concerning year 2010. NOTE 22 – SALES REVENUES REVENUES

31/12/2010 31/12/2009 31/12/2010 31/12/2009

Re-sale 434 42.518 434 42.518Services 165.765 103.182 168.867 103.182Sale of scrap 815 121 815 121Consortia revenues 440.524 493.285 440.524 513.981Sales to the external market 121.431 42.092 200.018 67.163Intercompanies sales 3.102 20.696Gross Revenue 732.071 701.894 810.658 726.965

( - ) Taxes on sales (62.987) (74.516) (62.987) (74.516)

Net Operating Revenue 669.084 627.378 747.671 652.449


Gross sales revenues in the period present an increase of 4.3% controlling and 11.5% consolidated when compared to the previous year. NOTE 23 – OTHER REVENUES AND EXPENSES



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OTHER REVENUES AND EXPENSES

31/12/2010 31/12/2009 31/12/2010 31/12/2009Income from the sale of fixed assets Sales income 394 74 438 116 (-) Net accounting value write-off (430) (441) (570) (516)Income from the sale of investments Sales income 8.817 1.357 8.817 1.489 (-) Net accounting value write-off (7.200) (184) (7.200) (184)Other revenues 5.753 2.249 5.753 2.249Other expenses (5.840) (11.724) (5.840) (11.724)Other Revenues and Expenses 1.494 (8.669) 1.398 (8.570)


NOTE 24 – FINANCIAL REVENUES AND EXPENSES FINANCIAL REVENUES AND EXPENSES

31/12/2010 31/12/2009 31/12/2010 31/12/2009Financial ExpensesBanking expenses 1.164 2.546 1.453 2.832 Interests on loans with affiliates 40.990 36.332 40.990 36.332 Interests on other liabilities 1.532 2.863 1.532 2.773 Passive exchange rates variations 82 2.076 1.170 3.195 Total Financial Expenses 43.768 43.817 45.145 45.132

Financial Revenues Revenues from financial investments 3.356 3.861 3.356 3.861 Interests on other assets 13.606 459 16.537 1.601 Active exchange rates variations 162 3.359 665 3.359 Deferred deductions 170 120 170 120 Total Financial Revenues 17.294 7.799 20.728 8.941

Net Financial Income (26.474) (36.018) (24.417) (36.191)




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NOTE 25 - INSURANCES Values are contracted on technical bases that may be sufficient for the coverage of losses resulted from accidents with goods of Fixed Assets and Inventories. On December 31, 2010, the Company contracted insurance policies for the following risks:

Loss of profits; Civil liability; Transportation Heavy equipment (Trucks and Cranes); Group Life; and

For reduction of risks related to failure to comply with contracted performance by clients, Company acquired the performance insurance which ensures compensation of until R$140 millions of contractual penalties. NOTE 26 – SURETIES AND SECURITIES In order to exclusively secure its financial operations, Company provided nearly R$22.4 million (market price) in fiduciary sale (note 16). NOTE 27 – COMPREHENSIVE FINANCIAL STATEMENT

31/12/2010 31/12/2009 31/12/2010 31/12/2009

Net Income in the year 29.818 28.027 29.818 28.027

Other comprehensive resultsConversion adjustments for affiliate overseas (41) (41)

Total Comprehensive Result in the Year 29.777 28.027 29.777 28.027




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NOTE 28 – INFORMATION PER SEGMENT Information per segment are being presented in accordance with CPC 22 – Information per Segment, approved by Resolution CVM 582/09. Management defined the Company’s operational segments based on the model of its strategic plan including the following areas:

Revenues in 2010Platforms and

ModulesInfrastructure

services in RefineriesOffshore Operations Infrastructure

services in Gas Total

Total gross revenue 146.497 313.205 82.238 190.131 732.071Taxes on sales (2.650) (29.111) (9.406) (21.820) (62.987)Costs of Products and Services (102.550) (254.090) (69.043) (119.384) (545.067)Gross Margin 41.297 30.004 3.789 48.927 124.017

Revenues in 2010

Platforms and

Modules

Infrastructure

services in Refineries

Offshore Operations Infrastructure services in Gas

Plants Total

Total gross revenue 225.084 313.205 82.238 190.131 810.658Taxes on sales (2.650) (29.111) (9.406) (21.820) (62.987)Costs of Products and Services (167.360) (254.090) (69.043) (119.384) (609.877)Gross Margin 55.074 30.004 3.789 48.927 137.794

CONSOLIDATED

NOTE 29 – COMPLEMENTARY INFORMATION - EBITDA

31/12/2010 31/12/2009 31/12/2010 31/12/2009

Net Operating Revenue 669.084 627.378 747.671 652.449 Cost of goods and/or services sold (545.067) (494.759) (609.877) (514.843) Gross Operating Income 124.017 132.619 137.794 137.606 (-) Selling expenses (7.098) (6.148) (7.098) (6.148) (-) General, administrative and operating expenses (48.728) (49.698) (56.271) (52.861) (+) Depreciation / Amortization 191 954 191 86 (+/-) Equity 5.019 1.963 (236) 761 EBITDA 73.401 79.690 74.380 79.444

% on Net Operating Revenue 11% 13% 10% 12%

Holding company Consolidated



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***** BOARD OF OFFICERS: Valdir Lima Carreiro; Irajá Galliano Andrade; José Eduardo Catelli Soares de Figueiredo; Otto Garrido Sparenberg. Accountant: Gilberto Marques CPF 141.526.788-01 CRC - TC - 1SP231969/O-8-S-RJ

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IESA ÓLEO & GÁS S/A · IESA Óleo & Gás S/A is one of the most acknowledged and respected ... Company is also aware of the opportunities for construction of power plants primarily