Martifer — Audit Report / Information 2009

Apr 5, 2010

FINANCIAL STATEMENTS, NOTES AND MANAGEMENT REPORT

(Translation from the Portuguese Original)

• 1. MANAGEMENT REPORT
• 1. RESULTS APPROPRIATION PROPOSAL
• 1. OTHER INFORMATION
• 1. MANDATORY INFORMATION
• 1. FINANCIAL INFORMATION
• 1. AUDIT REPORTS

1. MANAGEMENT REPORT

Martifer SGPS, S.A., apart from the individual financial statements, prepared also consolidated financial statements, which includes a detailed management report that is being disclosed and published.

As such, and given that in the individual financial statements has reflected the application the equity method, and there are no other relevant facts, we consider that the information to be prepared for the individual financial statements is similar to the one prepared for the consolidated management report.

2. RESULTS APPROPRIATION PROPOSAL

The Board of Directors proposes that the net profits of Euro 99,672,120.37 be applied in the following manner:

• 5% to legal reserve: Euro 4,983,606.02;
• To retained earnings: Euro 84,688,514.35;
• Distribution to shareholders amounting Euro 10,000,000.00, meaning a dividend of EUR 0.10 per common share.

3. OTHER INFORMATION

Martifer SGPS, S.A. has no debts for arrears of payments to the Tax Authorities or any other government entity, including the Social Security.

4. MANDATORY INFORMATION

4.1 SHAREHOLDINGS OF THE MEMBERS OF THE MANAGEMENT AND SUPERVISORY BODIES

In accordance with article 447 of the Portuguese Companies Code, the following are the securities issued by MARTIFER SGPS, SA and companies dominated by it, held by members of the governing bodies, as of 31 December 2009:

Holder	Governing Body	Number of Shares held on 31.12.2009
Carlos Manuel Marques Martins	Board of Directors	70,030
Jorge Alberto Marques Martins	Board of Directors	131,760
I"M – SGPS, S.A. *	Board of Directors	41,590,473
Jorge Paulo Sacadura Almeida Coelho	Board of Directors	0
Eduardo Jorge de Almeida Rocha	Board of Directors	20,000
MOTA-ENGIL, SGPS, S.A. **	Board of Directors	37,500,000
Mário Jorge Henriques Couto ***	Board of Directors	0
Luís Valadares Tavares	Board of Directors	0
Jorge Bento Ribeiro Barbosa Farinha	Board of Directors	0
Manuel Simões de Carvalho e Silva	Supervisory Board	0
Carlos Alberto da Silva e Cunha	Supervisory Board	0
Carlos Alberto de Oliveira e Sousa	Supervisory Board	0
Américo Agostinho Martins Pereira	Statutory Auditor	0
José Carreto Lages	Chairman of the General Meeting	0

* Directors Carlos Manuel Marques Martins and Jorge Alberto Marques Martins are holders of the share capital of I"M SGPS, SA and are, respectively, its Chairman of the Board of Directors and Director.

** Directors Jorge Paulo Sacadura Almeida Coelho and Eduardo Jorge de Almeida Rocha are Directors of the Board of Directors of MOTA-ENGIL, SGPS, S.A.

*** Director Mário Jorge Henriques Couto was elected by the Board of Directors on 19 May 2009, after the resignation of the Director Pedro Álvaro de Brito Gomes Doutel

EVENTS DESCRIBED IN ARTICLE 447 OF THE PORTUGUESE COMPANIES CODE

Member of the Governing Bodies	Shares held on		Shares held on
	31.12.2008	Date	Purchase	Sale	Average Price (€)	31.12.2009
Carlos Manuel Marques Martins	70,030					70,030
Jorge Alberto Marques Martins	131,760					131,760
Eduardo Jorge de Almeida Rocha	20,000					20,000

Directors Carlos Manuel Marques Martins and Jorge Alberto Marques Martins, respectively Chairman and Vice-Chairman of the Board of Directors, besides the shares held as described above, are sole equal shareholders of I"M SGPS, SA, that, on 31 December 2009, held a total of 41,590,473 of shares of Martifer SGPS, S.A..

The following are the share transactions of I"M SGPS, SA during 2009:

Date	Purchases	Sales	Average Price (€)	Date	Purchases	Sales	Average Price (€)
5-Jan	12,232		3.64 €	16-Feb	50		3.25 €
5-Jan	5,500		3.63 €	17-Feb	2,620		3.16 €
5-Jan	3,678		3.65 €	17-Feb	2,100		3.20 €
13-Jan	5,000		3.55 €	17-Feb	10		3.25 €
27-Jan	4,806		3.38 €	17-Feb	250		3.24 €
30-Jan	5,000		3.35 €	17-Feb	50		3.23 €
2-Feb	7,010		3.32 €	17-Feb	100		3.17 €
2-Feb	7,623		3.32 €	17-Feb	1,701		3.18 €
3-Feb	2,050		3.32 €	17-Feb	100		3.16 €
4-Feb	17,000		3.30 €	18-Feb	20		3.17 €
5-Feb	11,570		3.28 €	18-Feb	150		3.15 €
6-Feb	1,650		3.31 €	18-Feb	20		3.16 €
9-Feb	78		3.32 €	18-Feb	50		3.14 €
9-Feb	992		3.31 €	18-Feb	160		3.11 €
10-Feb	3,872		3.31 €	18-Feb	1,135		3.12 €
10-Feb	10		3.33 €	19-Feb	4,951		3.10 €
10-Feb	18		3.34 €	20-Feb	110		3.12 €
10-Feb	2,450		3.29 €	20-Feb	1,211		3.11 €
10-Feb	1,081		3.31 €	20-Feb	20		3.10 €
11-Feb	1,459		3.29 €	20-Feb	1,000		3.13 €
11-Feb	4		3.30 €	23-Feb	50		3.13 €
11-Feb	203		3.27 €	23-Feb	900		3.12 €
12-Feb	720		3.27 €	23-Feb	1,200		3.10 €
12-Feb	101		3.26 €	24-Feb	3,514		3.05 €
12-Feb	398		3.28 €	24-Feb	500		3.02 €
13-Feb	1,450		3.29 €	24-Feb	986		3.04 €
16-Feb	300		3.29 €	24-Feb	300		2.98 €
16-Feb	260		3.28 €	24-Feb	4		3.10 €
16-Feb	680		3.27 €	24-Feb	100		3.09 €

Date	Purchases	Sales	Average Price (€)	Date	Purchases	Sales	Average Price (€)
24-Feb	31		3.08 €	31-Mar	3,252		2.58 €
13-Mar	177		2.80 €	1-Apr	1,350		2.61 €
13-Mar	1,300		2.81 €	1-Apr	150		2.62 €
13-Mar	50		2.82 €	1-Apr	2,209		2.64 €
13-Mar	4,500		2.86 €	1-Apr	100		2.63 €
16-Mar	1,600		2.84 €	1-Apr	501		2.66 €
17-Mar	255		2.83 €	2-Apr	599		2.70 €
17-Mar	100		2.82 €	2-Apr	49		2.72 €
17-Mar	385		2.80 €	2-Apr	250		2.71 €
17-Mar	15		2.81 €	2-Apr	438		2.75 €
17-Mar	70		2.75 €	2-Apr	2,050		2.74 €
18-Mar	50		2.80 €	2-Apr	289		2.73 €
18-Mar	200		2.79 €	3-Apr	429		2.85 €
18-Mar	340		2.77 €	3-Apr	2,250		2.87 €
18-Mar	10		2.78 €	3-Apr	21		2.88 €
19-Mar	800		2.77 €	3-Apr	600		2.81 €
19-Mar	50		2.79 €	3-Apr	60		2.83 €
19-Mar	340		2.78 €	3-Apr	250		2.86 €
19-Mar	5,090		2.76 €	3-Apr	4,500		2.84 €
20-Mar	3,700		2.69 €	6-Apr	770		2.77 €
20-Mar	3,700		2.66 €	7-Apr	500		2.84 €
23-Mar	500		2.70 €	7-Apr	500		2.85 €
24-Mar	300		2.73 €	7-Apr	2,020		2.86 €
24-Mar	300		2.72 €	8-Apr	77		2.83 €
24-Mar	570		2.69 €	8-Apr	10		2.82 €
24-Mar	1		2.71 €	8-Apr	3,150		2.80 €
24-Mar	360		2.70 €	9-Apr	10,050		2.82 €
24-Mar	1,000		2.68 €	9-Apr	10		2.83 €
26-Mar	4,360		2.65 €	9-Apr	1,700		2.84 €
26-Mar	90		2.66 €	14-Apr	10,000		2.88 €
26-Mar	250		2.64 €	14-Apr	200		2.95 €
26-Mar	250		2.62 €	14-Apr	43		2.92 €
27-Mar	1,000		2.59 €	14-Apr	27		2.93 €
27-Mar	5		2.60 €	15-Apr	1,910		2.93 €
27-Mar	2,700		2.61 €	15-Apr	450		2.89 €
27-Mar	5,000		2.57 €	15-Apr	5		2.91 €
30-Mar	2,750		2.59 €	15-Apr	200		2.92 €
30-Mar	42		2.60 €	15-Apr	205		2.93 €
30-Mar	508		2.58 €	15-Apr	440		2.94 €
31-Mar	253		2.56 €	15-Apr	5		2.95 €
31-Mar	300		2.57 €	16-Apr	5,110		3.00 €

Date	Purchases	Sales	Average Price (€)	Date	Purchases	Sales	Average Price (€)
16-Apr	7,000		3.08 €	8-May	3,010		3.48 €
17-Apr	2,743		3.15 €	11-May	1,121		3.49 €
17-Apr	600		3.19 €	11-May	979		3.50 €
17-Apr	67		3.20 €	12-May	4,155		3.35 €
17-Apr	3,000		3.35 €	12-May	6,450		3.36 €
17-Apr	200		3.18 €	12-May	4,408		3.40 €
20-Apr	10,000		3.34 €	13-May	530		3.25 €
20-Apr	505		3.45 €	3-Jun	5,000		3.41 €
20-Apr	400		3.57 €	4-Jun	1,700		3.36 €
20-Apr	100		3.58 €	4-Jun	5,000		3.36 €
20-Apr	200		3.63 €	8-Jun	5,000		3.27 €
20-Apr	100		3.44 €	9-Jun	10		3.34 €
20-Apr	100		3.43 €	9-Jun	50		3.32 €
20-Apr	653		3.28 €	9-Jun	10		3.30 €
20-Apr	2		3.29 €	10-Jun	50		3.32 €
20-Apr	1,100		3.24 €	11-Jun	350		3.31 €
21-Apr	8,590		3.22 €	12-Jun	95		3.41 €
22-Apr	350		3.30 €	12-Jun	5		3.44 €
22-Apr	5		3.32 €	15-Jun	2,330		3.45 €
22-Apr	150		3.31 €	17-Jun	550		3.37 €
22-Apr	120		3.29 €	17-Jun	10		3.38 €
22-Apr	914		3.26 €	17-Jun	800		3.34 €
22-Apr	2		3.27 €	18-Jun	3,700		3.30 €
22-Apr	150		3.25 €	18-Jun	650		3.24 €
22-Apr	120		3.23 €	23-Jun	5,000		3.37 €
23-Apr	149		3.22 €	23-Jun	450		3.45 €
23-Apr	991		3.25 €	23-Jun	5		3.46 €
23-Apr	230		3.24 €	23-Jun	100		3.44 €
24-Apr	2,500		3.30 €	23-Jun	1,200		3.40 €
28-Apr	32		3.17 €	30-Jun	3,000		3.42 €
28-Apr	3		3.21 €	8-Jul	2,982		2.98 €
28-Apr	120		3.20 €	9-Jun	5,000		3.25 €
28-Apr	150		3.18 €	13-Jul	235		3.19 €
28-Apr	240		3.13 €	20-Jul	100		3.25 €
28-Apr	2,005		3.14 €	21-Jul	155		3.25 €
28-Apr	10		3.15 €	22-Jul	330		3.27 €
28-Apr	3,986		3.12 €	3-Aug	150		3.25 €
6-May	2,830		3.33 €	27-Aug	5,000		3.56 €
6-May	1,300		3.43 €	28-Aug	1,506		3.45 €
7-May	10,000		3.47 €	28-Aug	4,000		3.46 €
8-May	1,738		3.44 €	28-Aug	4		3.47 €

Date	Purchases	Sales	Average Price (€)	Date	Purchases	Sales	Average Price (€)
28-Aug	12,000		3.48 €	11-Nov	5,000		3.74 €
29-Sep	3,780		3.62 €	26-Nov	5,000		3.45 €
27-Oct	5,000		3.80 €	26-Nov	5,000		3.39 €
28-Oct	5,000		3.60 €	10-Dec	407		3.49€
30-Oct	5,000		3.65 €	10-Dec	4,254		3.30€

4.2 HOLDERS OF QUALIFING SHAREHOLDINGS

According to paragraph 1b) of article 8 of CMVM regulation number 5/2008, the following is the list of qualifying shareholders, with an indication of number of shares and percentage of voting rights held, calculated according article 20 of the Securities Code (Código de Valores Mobiliários), as of 31 December 2009:

SHAREHOLDERS	Number of shares	Percentage of share capital	Percentage of voting rights
I'M – SGPS, SA	41,590,473	41.59%	41.59%
Carlos Manuel Marques Martins *	70,030	0.07%	0.07%
Jorge Alberto Marques Martins *	131,760	0.13%	0.13%
Attributable to I'M – SGPS, SA	41,792,263	41.79%	41.79%
Mota-Engil – SGPS, SA	37,500,000	37.50%	37.50%
Eduardo Jorge de Almeida Rocha **	20,000	0.02%	0.02%
Attributable to FM – Sociedade de Controlo, SGPS, SA	37,520,000	37.52%	37.52%

* Holder of a position in the Governing Bodies of I"M SGPS, SA;

** Holder of a position in the Governing Bodies of Mota-Engil SGPS, SA.

4.3 STATEMENT OF COMPLIANCE ACCORDING TO ARTICLE 245, NUMBER 1, PARAGRAPH C) OF THE SECURITIES CODE (CÓDIGO DE VALORES MOBILIÁRIOS)

Dear Shareholder,

In the terms of article 245, number 1, paragraph c) of the Securities Code (Código de Valores Mobiliários) the Board of Directors declare that in accordance with the best of our knowledge :

i) The information contained in the management report faithfully reports the evolution of trading, the performance and the position of Martifer SGPS, S.A., public company, and contains a description of the main risks and uncertainties facing its business; and

ii) The information contained in its financial statements and accompanying notes, was prepared in accordance with the applicable accounting practices, giving a true and fair view of the assets, liabilities, financial position and financial results of Martifer SGPS, S.A., public company.

Oliveira de Frades, 25 February 2010

The Board of Directors,

Carlos Manuel Marques Martins (Chairman of the Board of Directors) [Mário Jorge Henriques Couto](javascript:abrirJanela() (Member of the Board of Directors)

Jorge Alberto Marques Martins (Vice-Chairman of the Board of Directors) Luís Valadares Tavares (Member of the Board of Directors)

Jorge Paulo Sacadura Almeida Coelho (Member of the Board of Directors)

Jorge Bento Ribeiro Barbosa Farinha (Member of the Board of Directors)

Eduardo Jorge de Almeida Rocha (Member of the Board of Directors)

5. FINANCIAL INFORMATION

5.1 Financial Statements

MARTIFER, SGPS, S.A.

BALANCE SHEETS AT 31 DECEMBER 2009 AND 2008

					MARTIFER, SGPS, S.A.
				BALANCE SHEETS AT 31 DECEMBER 2009 AND 2008
			31.12.2009		31.12.2008		Notes	31.12.2009	31.12.2008
	Notes	GA	D	N A	N A
Assets Fixed assets:						Shareholders' Equity and Liabilities Equity:
Intangible fixed assets:						Share capital	36, 37 and 40	50,000,000.00	50,000,000.00
Establishment expenses	3a), 8 and 10	7,123,890.41	5,905,091.28	1,218,799.13		3,593,664.30 Own shares - nominal value		0.00	0.00
Industrial property and other rights	3a), 8 and 10	10,850.67	3,779.78	7,070.89		756.30 Own shares - discounts and premiums		0.00	0.00
		7,134,741.08	5,908,871.06	1,225,870.02		3,594,420.60 Supplementary capital		0.00	0.00
Tangible fixed assets:						Share premium	4 0	186,500,000.00	186,500,000.00
Transport equipment	3b) and 10	103,515.64	12,530.29	90,985.35		54,763.19 Adjustments in associated companies	4 0	3,499,339.44	4,225,677.17
Administrative equipment	3b) and 10	17,984.30	1,809.88	16,174.42	1,244.12
		121,499.94	14,340.17	107,159.77	56,007.31 Reserves:
Investments:						Legal reserve	4 0	2,713,238.44	2,508,168.82
Equity investments in group companies	3c), 10 and 16	128,836,210.74	0.00	128,836,210.74		188,240,254.39 Other reserves	3g) and 40	17,347.33	0.00
Loans to group companies	3c), 10 and 16	206,843,255.89	0.00	206,843,255.89		169,497,881.06 Retained earnings	4 0	31,350,452.13	27,196,982.44
Equity investments in associated companies	3c), 10 and 16	80,992.27	0.00	80,992.27	1,233,771.91			274,080,377.34	270,430,828.43
Securities and other investments	3c) and 10	25,000.00	0.00	25,000.00	25,000.00
		335,785,458.90	0.00	335,785,458.90		358,996,907.36 Net profit of the year	4 0	99,672,120.37	4,101,392.40
Long-term debtors:						Total Equity		373,752,497.71	274,532,220.83
Affiliated companies	1 6	82,807,567.28	0.00	82,807,567.28	9,312,629.95
		82,807,567.28	0.00	82,807,567.28	9,312,629.95	Liabilities
Short-terms debtors:						Provisions:
Trade debtors	1 6	2,463,077.23	0.00	2,463,077.23		619,778.99 Other provisions	3f) and 34	33,812,550.40	12,730,157.50
Affiliated companies	1 6	51,266,352.26	0.00	51,266,352.26	14,088,718.88			33,812,550.40	12,730,157.50
State and public sector		411,516.61	0.00	411,516.61		456,646.14 Long-term liabilities:
Other debtors	1 6	6,804,278.57	0.00	6,804,278.57	34,248,682.86 Bank loans		4 8	0.00	1,196,241.51
		60,945,224.67	0.00	60,945,224.67	49,413,826.87			0.00	1,196,241.51
						Short-term liabilities:
Bank deposits and cash in hand:						Bank loans	4 8	1,551,867.03	13,312,955.92
Bank deposits		873,151.73		873,151.73		114,030.88 Trade creditors	1 6	279,567.61	467,368.51
Cash in hand		0.00		0.00		0.00 Affiliated companies	1 6	22,223.34	22,223.34
		873,151.73		873,151.73		114,030.88 Other loans	4 8	74,500,000.00	121,750,000.00
Accruals and deferrals:						Suppliers of fixed assets		0.00	20,154.55
Accrued income	3d)	0.00		0.00		592.17 State and public sector		298,556.25	202,140.71
Deferred costs	3d)	839,535.86		839,535.86		1,568,091.91 Other creditors		204.02	11,804.06
Deferred taxes assets	3e) and 6	2,054,196.15		2,054,196.15	2,054,196.15			76,652,418.25	135,786,647.09
	4 9	2,893,732.01		2,893,732.01		3,622,880.23 Accruals and deferrals:
						Accrued costs	3d) and 49	420,698.02	865,436.27
Total Amortisation and Depreciation			5,923,211.23					420,698.02	865,436.27
Total Adjustments			0.00			Total Liabilities		110,885,666.67	150,578,482.37
Total Assets		490,561,375.61	5,923,211.23	484,638,164.38		425,110,703.20 Total Shareholders' Equity and Liabilities		484,638,164.38	425,110,703.20

MARTIFER, SGPS, S.A.

INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

		Notes	2009		2008
	Costs & Expenses
Cost of sales:
Merchandise			-		-
Materials			-	-	-	-
External supplies and services		1 6		603,061.09		1,068,723.24
Personnel Costs
Wages and Salaries		4 3	1,493,158.27		1,581,002.10
Social charges:
Pensions			58,187.50		49,390.00
Others			267,266.70	1,818,612.47	120,525.09	1,750,917.19
Amortizations and Depreciation		1 0	2,394,122.31		2,365,740.71
Adjustments			-		-
Provisions		3 4	11,731,706.40	14,125,828.71	5,512,176.39	7,877,917.10
Taxes			1,015.35		12,467.69
Other operating costs			16,549.28	17,564.63	15,000.00	27,467.69
	(A)			16,565,066.90		10,725,025.22
Losses on group and associated companies		10 and 45	53,983,471.58		4,852,523.08
Interest and similar expenses
From affiliated companies		16 and 45	-		1,095,384.89
Others		4 5	4,200,661.52	58,184,133.10	44,234,042.86	50,181,950.83
	(C)			74,749,200.00		60,906,976.05
Extraordinary expenses		4 6		176,205.67		192,947.19
	(E)			74,925,405.67		61,099,923.24
Income Tax		3e) and 6		3,787.12		(2,049,825.30)
	(G)			74,929,192.79		59,050,097.94
Net profit of the year				99,672,120.37		4,101,392.40
				174,601,313.16		63,151,490.34
	Income & Revenues
Services rendered		16 and 44	1,887,380.94		1,030,787.87
Supplementary income			1,206.81	1,888,587.75	-	1,030,787.87
	(B)			1,888,587.75		1,030,787.87
Gains on group and associated companies		10 and 45	8,328,246.87		17,362,566.04
Income from investment in shares		4 5	-		2,211,938.13
Income from short term investments:
From affiliated companies			-		-
Others		4 5	-		9,189.47
Interest and similar income:
From affiliated companies		16 and 45	3,071,396.91		1,860,126.92
Others		4 5	320,336.05	11,719,979.83	65,737.74	21,509,558.30
	(D)			13,608,567.58		22,540,346.17
Extraordinary Income		4 6		160,992,745.58		40,611,144.17
	(F)			174,601,313.16		63,151,490.34
Summary:
Operating Results: (B)-(A)=				(14,676,479.15)		(9,694,237.35)
Financial Results: (D-B)-(C-A)=				(46,464,153.27)		(28,672,392.53)
Current Results: (D)-(C)=				(61,140,632.42)		(38,366,629.88)
Profit before income tax: (F)-(E)=				99,675,907.49		2,051,567.10
Net profit of the year: (F)-(G)=				99,672,120.37		4,101,392.40

MARTIFER SGPS, S.A.

INCOME STATEMENTS BY FUNCTIONS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

	2009	2008
Services rendered	1,887,380.94	1,030,787.87
Cost of the services rendered	(963,159.17)	(841,000.05)
Gross profit/(loss)	924,221.77	189,787.82
Other operating income	10,182.99	-
Distribution costs	-	-
Administrative costs	(3,852,636.97)	(4,344,381.09)
Other operating costs	(193,770.03)	(220,414.88)
Operating profit/(loss)	(3,112,002.24)	(4,375,008.15)
Net financial expenses	(808,928.56)	(7,159,474.03)
Profit/loss on group and associated companies	103,498,538.89	6,278,919.22
Profit/loss in other investments	98,299.40	7,307,130.06
Other financial costs	-	-
Current profit/(loss) before taxes	99,675,907.49	2,051,567.10
Income taxes on current profit	(3,787.12)	2,049,825.30
Current profit/(loss) before taxes	99,672,120.37	4,101,392.40
Extraordinary results	-	-
Taxes on extraordinary results	-	-
Net profit of the year	99,672,120.37	4,101,392.40
Earnings per share	1.00	0.04

MARTIFER SGPS, S.A.

CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

	2009		2008
Operating activities:
Cash received from trade debtors	45,289.51		885,457.97
Cash paid to Suppliers	(818,696.92)		(539,662.15)
Payments to Employees Cash used in operations	(1,696,541.29) (2,469,948.70)		(971,268.78) (625,472.96)
Income taxes (paid)/received	41,342.41		(375,259.47)
Other cash receipts/payments relating to operating activities	335,822.50		137,855.30
Cash flow before extraordinary items	(2,092,783.79)		(862,877.13)
Receipts related to extraordinary items	8,976.18		-
Payments related to extraordinary items	(125,712.28)		(250.00)
Cash flow used in operating activities [1]		(2,209,519.89)		(863,127.13)
Investing activities: Cash receipts arising from:
Investments	233,047,436.44		186,658,342.91
Tangible assets	-		-
Intangible assets	-		-
Grants	-		-
Loans	1,115,718.55		-
Interest and similar income	3,913,351.47		1,201,927.85
Other	-	238,076,506.46	7,163,358.05	195,023,628.81
Cash payments arising from:
Investments	(51,300,000.00)		(271,856,524.82)
Tangible assets	(96,878.74)		(100,561.69)
Intangible assets	-		-
Loans	(119,788,040.42)	(171,184,919.16)	-	(271,957,086.51)
Cash flow generated by/(used in) investing activities [2]		66,891,587.30		(76,933,457.70)
Financing activities:
Cash receipts arising from:
Borrowings	836,726,324.71		1,009,450,795.79
Issue of equity shares, supplementary capital and share premiums	-		-
Grants and donations	-		-
Sale of shares	-		-
Coverage of losses	-	836,726,324.71	-	1,009,450,795.79
Cash payments arising from:
Borrowings	(896,933,655.11)		(932,329,642.72)
Leasings	-		-
Interest and similar costs	(3,768,609.55)		(9,413,261.33)
Dividends	-		-
Capital reduction and supplementary capital	-		-
Purchase of shares	-	(900,702,264.66)	-	(941,742,904.05)
Cash flow generated by/(used in) financing activities [3]		(63,975,939.95)		67,707,891.74
Net increase in cash and cash equivalents [4]=[1]+[2]+[3]		759,120.85		(10,088,693.09)
Effect of foreign exchange currencies		0.00		-
Cash and cash equivalents at the beginning of the year		114,030.88		10,202,723.97
Cash and cash equivalents at the end of the year		873,151.73		114,030.88

MARTIFER SGPS, S.A.

NOTES TO THE CASH FLOW STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008

1. Disclosure of information regarding the acquisition or sale of group and associated companies:

	Transaction
	price	Cash Flow
Sales
Repower AG	268,935,611.00	233,047,436.44
	268,935,611.00	233,047,436.44

During the second quarter o f 2009, i t was concluded the sale o f the equity stake held by the Group i n the share capital o f Repower Systems, AG. The total amount o f the transaction was Euro ²⁶⁸ million (Euro 204,157,561 i n 2009), from which, Euro ²³³ million were received by the company i n 2009. The cash flow can be detailed as follows:

Value paid directly by Suzlon Group	181,768,561.00
Valor paid by subsidiaries of Martifer Group, from wind turbines that were acquired to Suzlon Group
and that were not yet paid at that date	51,278,875.44
	233,047,436.44

Cash payments arising from financial investments, amounting Euro 51.3 million, relates to the supplementary capital contributions made to Martifer Renewables SGPS, S.A. in September 2009.

1. Disclosure of the components of cash and cash equivalents and reconciliation to amounts reported in the balance sheet:

	2009	2008
Cash on hand	-	-
Bank balances	873,151.73	114,030.88
Cash equivalents	-	-
Cash and cash equivalents	873,151.73	114,030.88

5.2 NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS | 2009 YEAREND

INTRODUCTION

Martifer SGPS, S.A. ("The company"), with its head-office at Zona Industrial, Apartado 17, Oliveira de Frades – Portugal, was incorporated by public deed on 29 October 2004 and has, as its main activity is the investment management in Group Companies.

As from June 2007, and as a result of the success of an Initial Public Offer (IPO), the Group is listed on Euronext Lisbon.

According to the art. 4º of the Regulation (EC) nº 1606/2002, of the European Parlamient and of the Cuncil, of 19th July, the Company is required to prepare and present consolidated financial statements in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union (art. 3º of the above mentioned Regulation).

However, the accompanying individual financial statements and notes which follow are numbered as defined in the Portuguese Official Chart of Accounts. The numbers not included relate to notes that are not applicable to the Company or their presentation is not significant to the accompanying financial statements.

All the figures presented in this notes are expressed in Euro, except if stated otherwise.

3. BASIS OF PRESENTATION AND PRINCIPAL ACCOUNTING POLICIES

The accompanying financial statements were prepared on a going concern basis from the Company"s accounting records maintained in accordance with generally accepted accounting principles in Portugal.

These financial statements reflect only the Company"s non-consolidated accounts, prepared in accordance with legislation to be approved by the General Shareholder"s Meeting.

Although investments have been recorded in accordance with the equity method, which is in accordance with the portuguese generally accepted accounting principles, the accompanying financial statements only reflect the effect of consolidation of the results for the year and equity of the subsidiary and affiliated companies, but not the effect of a full consolidation of assets, liabilities, income and costs.

The main figures from the consolidated financial statements, prepared in accordance with the International Financial Reporting Standards ("IFRS") as adopted by the European Union, on 31 December 2009 are as follows:

	Values
Total do assets	1,422,697,663
Total liabilities	984,669,634
Non-controlling interests	50,957,635
Equity (excluding non-controlling interest)	387,070,394
Profit for the year attributable to equity holders of Martifer	107,705,244
Sales and services rendered, excluding the business unit held for sale	512,705,658

Note 16 includes financial information relating to the group and associated companies.

The main accounting policies used in preparing the financial statements are as follows:

a) Intangible fixed assets

Intangible fixed assets, which include, essentially, the expenses with the Initial Public Offer (IPO) occurred in 26 June 2007, are recorded at the acquisition cost and are being depreciated on a straight line basis during three years.

b) Tangible fixed assets

Tangible assets are recorded at acquisition cost, including all costs necessary to put them in use, net of accumulated depreciation and adjustments.

Depreciation is calculated on a straight line basis, over the expected useful life for each class of tangible assets. The useful life is estimated taking in consideration the expected use of each class of tangible assets, as well as their natural consumption and technical obsolescence.

The depreciation rates used correspond to the following estimated useful lives:

Equipment:

Transport equipments	4 years
Administrative equipments	3 a 10 years

Maintenance and repair costs that do not increase the useful life, nor create significant improvements in tangible assets, are recognized as costs in the year in which they occur.

c) Investments

Investments in group and associated companies are recorded using the equity method of accounting, such investments being initially recorded at cost.

In accordance with the equity method of accounting, investments are adjusted annually by the amount corresponding to the parent company"s share in the net results of the group and associated companies by credit or charge to financial income or costs for the period or, in the case of other changes in their equity, by corresponding entry to the caption "Adjustments in equity investments in group companies", except as regards changes in the equity of subsidiary companies resulting from capital increases with share premiums, resulting in dilution of the participation held, in which case the corresponding adjustment in the participation is made by corresponding entry to financial income and costs. Dividends from these companies are recorded when declared, as decreases in the amount of the investments.

When the Group"s share of losses exceeds the carrying amount of the investment, such investment is reported at nil value while the equity of the associated company is negative, except when the Group has assumed commitments to the associated company, situation on which a provision is recorded for that purpose.

If investments generated Goodwill at the acquisition, the depreciation of the Goodwill is deducted to the gross amount of those investments.

The remaining investments and the loans to group and associated companies, are recorded at cost less, where applicable, an adjustment for loss on their realisation, which is recorded in the profit and loss statement in caption "Adjustments for investments".

d) Accrual basis

Income and expenses are recorded on an accruals basis, under which they are recognised in the period to which they apply independently of when they are received or paid. Differences between the amounts received and paid and the related income and expenses are recorded under "Accruals and Deferrals" captions.

e) Deferred taxes

Deferred taxes refer to temporary differences between the amount of assets and liabilities for accounting and for tax purposes, as well as those resulting from tax incentives obtained and temporary differences between the tax and accounting results.

Deferred tax assets and liabilities are calculated and periodically evaluated using the tax rates expected to be applicable on date the temporary differences revert.

Deferred tax assets are recorded only when there is reasonable expectation of sufficient future taxable profits for them to be used. On each balance sheet date, a reassessment is made of the temporary differences underlying the deferred tax assets in order for them to be recognised or adjusted depending on the current expectation their for future recovery.

f) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. These provisions are reviewed at each balance sheet date and are adjusted to reflect the best estimate at the date, taking into consideration all the risks and uncertainties inherent to such estimates. When a provision is determined using the future cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

g) Stock Options

Martifer Group rewards the services rendered by some workers through an equity-settled stock option plan. Since the accounting treatment of the Stock Options is not envisaged by the Portuguese generally accepted accounting principles, the Company applied the IFRS 2 – Share Based Payments. As such, the fair value of the services received is recognized as cost, and registered under the equity account during the vesting period. The amount registered as cost represents the fair value of the stock option attributed, estimated based only on market conditions. Acquisition conditions different from market conditions were used to estimate the number of options vested at the end of acquisition period. The number of options expected to become exercisable is reviewed for each reporting date, and the difference from the previous estimate is reviewed and registered in the profit and loss account as well as in equity.

6. INCOME TAX

Martifer SGPS is individually taxed and is subject to a tax rate of 25%, in terms of corporate income tax ("Imposto sobre o Rendimento das Pessoas Colectivas" or IRC). However, because it is located in the municipality of Oliveira de Frades, it benefit from a reduced income tax rate of 15% with a limit of 200,000 Euro benefit per company, for a period of 3 years, as "de minimis" aid. The limit of this benefit, granted under Commission Regulation (CE) nº 1998/2006, of 15 December 2006, was raised to 500,000 Euro for a 3 year period, covering all aid granted from 1 January 2009 until 31 December 2010, as described in Portaria nº 184/2009 of 20 February.

According to the article 81º of the Corporate Income Tax Code (Código do Imposto sobre o Rendimento das Pessoas Colectivas), the Company is also subject to autonomous taxation over some expenses.

At 31 December 2009 and 2008, the components of the deferred tax assets were as follows:

	Balances		Income tax recognised in the income statements		Other movements in Equity
			Dec-2009			Reavaluation		Other
	Dec-2009	Dec-2008					Dec-2008	Dec-2009	Dec-2008	Dec-2009
Temporary differences on deferred tax assets Tax losses	13,694,641.00	13,694,641.00	-	13,694,641.00
Deferred tax assets		(2,054,196.15) (2,054,196.15)	-	(2,054,196.15)

No deferred tax assets were recorded during 2009. The deferred tax assets as of 31 December 2009 were reviewed considering the expectations from the Board of Directors regarding whether sufficient taxable profits will be available to allow all or part of the asset to be recovered, based on the approved Business Plan.

Tax losses generated in each year, may be deductible from taxable profits during subsequent six years.

The reconciliation of the effective tax rate is presented as follows:

	Total		Income tax recognised in the income statement
	Dec-2009	Dec-2008	Dec-2009	Dec-2008
Current tax	3,787.12	4,370.85	3,787.12	4,370.85
Change to the recoverable amount of tax losses and
temporary differences from previous years:
1. Temporary differences originated during the year		( 2,054,196.15)		( 2,054,196.15)
2. Temporary differences reversed during the year
Deferred taxes assets		( 2,054,196.15)		( 2,054,196.15)
Adjustment to prior year estimation
Deferred taxes		( 2,054,196.15)		( 2,054,196.15)
Income taxes	3,787.12	( 2,049,825.30)	3,787.12	( 2,049,825.30)

The calculation of the income tax considers, among other factors, the differences resulting from the application of the equity method to the financial investments and the legislation in force regarding the calculation of the gains and losses on the sale of investments, namely the non consideration, for tax purposes, of the gains from the sale of the equity stake held by the Group in the share capital of Repower Systems, AG.

The 2009 current tax relates only with autonomous taxation.

In accordance with current legislation, tax returns are subject to review and correction by the tax authorities during a period of four years (five years for social security), except where there are tax losses, tax benefits have been granted or inspections, claims or appeals are in progress, in which case, depending on the circumstances, the period can be extended or suspended. Therefore the Company"s tax returns for the years 2006 to 2009 are still subject to review and correction. The Board of Directors believes that any possible corrections resulting from revisions/inspections of these tax returns will not have a significant effect on the financial statements as of 31 December 2009.

7. AVERAGE NUMBER OF PERSONNEL

During the year ended 31 December 2009, the average number of employees of the Company was 30 (6 in 2008).

8. ESTABLISHMENT EXPENSES, INDUSTRIAL PROPERTY AND OTHER RIGHTS

On 31 December 2009 and 2008, the composition of these captions is as follows:

	Dec-09	Dec-08
Establishment expenses:
Expenses with increases in share capital	7,123,890.41	7,123,890.41
Industrial property and other rights:
Rights and licensing	10,850.67	1,265.00

10. FIXED ASSETS

During the year ended 31 December 2009, the changes in intangible and tangible fixed assets and investments, as well as in the corresponding accumulated amortisation, depreciation and adjustments were as follows:

Gross assets
	Beginning Balance	Revaluation / Adjustments	Increases	Disposals	Transfers and write-offs	Ending Balance
Intangible fixed assets:
Establishment expenses	7,123,890.41					7,123,890.41
Industrial property and other rights	1,265.00		9,585.67			10,850.67
	7,125,155.41		9,585.67			7,134,741.08
Tanglible fixed assets:
Transport equipment	62,541.66		71,773.97	30,799.99		103,515.64
Administrative equipment	1,444.76		16,993.34	453.80		17,984.30
	63,986.42		88,767.31	31,253.79		121,499.94
Investments:
Equity investments in group companies	188,240,254.39	(37,613,885.56)	12,469.55	21,802,627.64		128,836,210.74
Loans to group companies	169,497,881.06		58,507,953.20	21,162,578.37		206,843,255.89
Equity investments in associated companies	1,233,771.91	78,600.34		1,231,379.98		80,992.27
Securities and other investments	25,000.00					25,000.00
	358,996,907.35	(37,535,285.22)	58,520,422.75	44,196,585.99		335,785,458.90

Accumulated amortisation
	Beginning Balance	Increases	Disposals	Ending Balance
Intangible fixed assets:
Establishment expenses	3,530,226.11	2,374,865.17		5,905,091.28
Industrial property and other rights	508.70	3,271.08		3,779.78
	3,530,734.81	2,378,136.25		5,908,871.06
Tanglible fixed assets:
Transport equipment	7,778.47	14,376.82	( 9,625.00)	12,530.29
Administrative equipment	200.64	1,609.24		1,809.88
	7,979.11	15,986.06	( 9,625.00)	14,340.17

During the second quarter of 2009, it was concluded the sale, to Suzlon Group, of the equity stake held by the Group in the share capital of Repower Systems, AG (Euro 1,231,380), as well as the stake held in the share capital of RPW Investments, SGPS, S.A. (Euro 21,802,628). This transaction, which amounted Euro 204,157,561, generated a financial gain of Euro 160,885,470 (Note 46). The amount presented in "Disposals and write-offs" of investments is explained, essentially, by this transaction, since, apart from the share capital, there were loans to RPW Investments, SGPS, S.A. of Euro 20,777,705.

The decrease of Euro 37,535,285.22 shown in the table above as "Revaluation / Adjustment" of investments, results from the application of the Equity Method and relates with the appropriation of the parent company"s share in the net results of the group and associated companies, or the recognition of other changes in their equity, amortisation of the Goodwill and distribution of dividends.

	Profit in group companies	Loss in group companies	Amortisation of Goodwill	Adjustments in Equity	Split of Prio
	(Note 45)	(Note 45)	(Note 45)	(Note 40)
Group companies
Prio SGPS S.A.	-	(333.33)	(415,818.08)	-	-
Prio Advanced Fuels SGPS S.A.	-	(25,875.58)	(147,803.86)	-	8,225,934.80
Martifer Renewables SGPS S.A.	-	(53,957,262.67)	-	(444,711.05)	-
Eviva Hidro	-	-	-	-	-
Martifer Metallic Constructions, SGPS, S.A.	3,990,008.74	-	(197,632.93)	410,141.58	-
Martifer Inovação e Gestão, S.A.	-	-	-	(322.69)	-
Martifer Beteiligungsverwaltungs GmbH	28,872.17	-	(301.32)	(11,975.28)	-
Ventinveste, S.A.	-	-	-	-	-
Martifer Energy Systems II, SGPS, S.A.	4,230,737.68	-	-	702,456.26	-
	8,249,618.59	(53,983,471.58)	(761,556.19)	655,588.82	8,225,934.80
Associated companies
Power Blades, S.A.	78,628.28	-	-	(27.94)	-
Total	8,328,246.87	(53,983,471.58)	(761,556.19)	655,560.88	8,225,934.80

At 31 December 2009, the effect of the application of the equity method is as follows:

In December 2009, it was materialized a reorganization that implied the split of part of the assets from Prio SGPS, S.A. to the creation of a new company, Prio Advanced Fuels SGPS, S.A.. The assets that were split in the demerger process amount to Euro 8,225,934.80.

At 31 December 2009, the captions "Equity investments in group companies", "Loans to group companies" and "Equity investments in associated companies" are detailed as follows:

	Equity Investments	Loans
Group companies
Prio SGPS S.A.	7,543,136.26	68,460,000.00
Prio Advanced Fuels, SGPS, S.A.	10,885,162.75	6,540,000.00
Martifer Renewables SGPS, S.A.	28,061,906.04	115,301,173.00
Eviva Hidro	-	2,006,563.83
Martifer Metallic Constructions, SGPS, S.A.	62,649,425.82	1,544,359.45
Martifer Inovação e Gestão, S.A.	-	8,987,940.83
Martifer Beteiligungsverwaltungs GmbH	22,019.29	100,218.78
Martifer Energy Systems II, SGPS, S.A.	19,674,560.58	3,903,000.00
Total	128,836,210.74	206,843,255.89
Associated companies
Power Blades, S.A.	80,992.27	-
Total	128,917,203.01	206,843,255.89

16. GROUP AND ASSOCIATED COMPANIES

Group and associated companies, as well as the main information extracted from their financial statements as of 31 December 2009, are as follows (it does not include the equity method of accounting effect in 31 December 2009):

PRIO SGPS, S.A.

Percentage of participation – 60% Shareholders" equity at 31 December 2009 – Euro 75,647,255.97 (Including Supplementary Capital of Euro 112,100,000.00) Net Result for 2009 – Euro (3,156,043.95) Head office: Oliveira de Frades – Portugal

PRIO ADVANCED FUELS SGPS, S.A.

Percentage of participation – 60% Shareholders" equity at 31 December 2009 – Euro 24,609,891.33 (Including Supplementary Capital of Euro 10,900,000.00) Net Result for 2009 – Euro 0 Head office: Oliveira de Frades – Portugal

MARTIFER GMBH

Percentage of participation – 100% Shareholders" equity at 31 December 2009 – Euro 79,050.27 (Including Supplementary Capital of Euro 100,218.78) Net Result for 2009 – Euro (10,610.16) Head office: Wien – Austria

VENTINVESTE, S.A.

Percentage of participation – 5% Shareholders" equity at 31 December 2009 – Euro 558,992.41 (Including Supplementary Capital of Euro 1,000,000.00) Net Result for 2009 – Euro (310,170.71) Head office: Lisbon - Portugal

Martifer Renewables SGPS, S.A.

Percentage of participation – 100% Shareholders" equity at 31 December 2009 – Euro 202,780,937.49 (Including Supplementary Capital of Euro 115,301,173.00) Net Result for 2009 – Euro 3,424,016.12 Head office: Oliveira de Frades - Portugal

EVIVA HIDRO

Percentage of participation – 1% Shareholders" equity at 31 December 2009 – Euro 277,076.35 (Including Supplementary Capital of Euro 2,395,813.83) Net Result for 2009 – Euro (1,640,358.95) Head office: Buchareste – Romania

MARTIFER METALLIC CONSTRUCTIONS SGPS, S.A.

Percentage of participation – 100% Shareholders" equity at 31 December 2009 – Euro 56,209,369.89 (Including Supplementary Capital of Euro 1,544,359.45) Net Result for 2009 – Euro (174,755.12) Head office: Oliveira de Frades – Portugal

MARTIFER ENERGY SYSTEMS II SGPS, S.A.

Percentage of participation – 100% Shareholders" equity at 31 December 2009 – Euro 18,273,081.52 (Including Supplementary Capital of Euro 3,903,000.00) Net Result for 2009 – Euro (1,195,912.81) Head office: Oliveira de Frades – Portugal

MARTIFER INOVAÇÃO E GESTÃO, S.A.

Percentage of participation – 100% Shareholders" equity at 31 December 2009 – Euro 8,951,123.07 (Including Supplementary Capital of Euro 8,987,940.83) Net Result for 2009 – Euro 484,809.84 Head office: Oliveira de Frades – Portugal

Associated Companies:

POWER BLADES, S.A.

Percentage of participation – 10% Shareholders" equity at 31 December 2009 – Euro 809,922.69 Net Result for 2009 – Euro 786,282.78 Head office: Oliveira de Frades – Portugal

The financial statements of the Company are included in the consolidated financial statements prepared by I"M – SGPS, S.A., located in Oliveira de Frades and by MOTA-ENGIL, SGPS, S.A., located in Porto.

At 31 December 2009, the balances and transactions with group and associated companies, are as follows:

Balances	Trade Debtors	Other Debtors	Trade Creditors	Group companies - Assets	Group companies - Liabilities
Martifer-Construções Metalomecânicas, S.A.	376,230.62	-	-	-	-
Martifer Constructii, s.r.l.	-	-	-	107,647.85	-
Prio SGPS S.A.	191,457.18	-	-	-	22,223.34
Prio Advanced Fuels, S.A.	107,865.23	-	299.03	-	-
Prio Biocombustíveis, S.A.	67,217.58	-	-	-	-
Martifer Renewables, SGPS, S.A.	25,308.57	826,361.58	-	84,451,149.59	-
Martifer Gestão de Investimentos, S.A.	30,341.54	-	-	-	-
Martifer Solar Sistemas Solares	60,000.00	-	-	-	-
SolarParks Construccion de Parques Solares ETVE S.A.	60,000.00	-	-	-	-
Martifer Metallic Constructions, SGPS, S.A.	56,311.19	615,005.39	-	35,298,012.26	-
Martifer Inovação e Gestão, S.A.	149,373.03	-	71,297.55	4,312,254.36	-
Martifer Construções Metálicas Angola, S.A.	-	-	-	468.89	-
Power Blades, S.A.	-	-	-	205,406.35	-
Martifer Renewables, S.A.	506,380.70	-	26,208.34	-	-
Martifer Deutschland	-	-	-	2,677.45	-
Repower Portugal, S.A.	371,167.29	-	-	-	-
Martifer Energy Systems SGPS, S.A.	12,000.00	-	-	9,696,302.79	-
Martifer Energia, S.A.	147,286.34	5,359,039.35	9,998.18	-	-
Martifer Inox, S.A.	158,953.97	-	-	-	-
PVGlass S.A.	6,959.95	-	-	-	-
Ventipower	54,438.24	-	-	-	-
Eviva Hidro s.r.l.	2,994.07	-	(47.15)	-	-
EVIVA Beteiligungsverwaltungs GmbH	-	183.31	-	-	-
Martifer Alumínios, S.A.	64,760.21	-	-	-	-
Total	2,449,045.71	6,800,589.63	107,755.95	134,073,919.54	22,223.34

Transactions	Services rendered	External Supplies and Services	Personnel Costs	Interests received
Martifer-Construções Metalomecânicas, S.A.	339,211.38	-	-	-
Prio SGPS S.A.	159,547.65	-	-	-
Prio Advanced Fuels, S.A.	100,757.64	2,223.14	-	-
Prio Biocombustíveis, S.A.	88,624.51	-	-	-
Martifer Renewables, SGPS, S.A.	12,000.00	-	-	2,180,418.94
Martifer Gestão de Investimentos, S.A.	25,093.78	-	-	-
Martifer Solar, S.A.	256,881.53	-	-	-
Martifer Solar Sistemas Solares	50,000.00	-	-	-
SolarParks Construccion de Parques Solares ETVE S.A.	50,000.00	-	-	-
Martifer Metallic Constructions, SGPS, S.A.	12,000.00	-	-	349,406.34
Martifer Inovação e Gestão, S.A.	50,552.69	6,245.53	4,071.00	207,430.66
Power Blades, S.A.	-	-	-	5,985.93
Martifer Renewables, S.A.	290,603.28	-	-	-
Martifer Deutschland	-	-	-	102.73
Repower Portugal, S.A.	168,648.72	-	-	-
Martifer Energy Systems SGPS, S.A.	10,000.00	-	-	328,052.31
Martifer Energia, S.A.	141,346.14	59,735.79	-	-
Martifer Inox, S.A.	26,981.28	-	-	-
Ventipower	45,365.20	-	-	-
PVGlass S.A.	5,799.96	-	-	-
Martifer Alumínios, S.A.	53,966.84	-	-	-
Total	1,887,380.60	68,204.46	4,071.00	3,071,396.91

32. GUARANTEES

At 31 December 2009, the Company had operational and financial guarantees of Euro 130 million, which include a guarantee pledged in favour of BP Portugal to cover payments resulting from the acquisition of fuels by Prio Advanced Fuels, S.A., a bank guarantee to SC Hidroeléctrica S.A., as well as other guarantees assumed under contracts to build solar parks.

Mortgages

At 31 December 2009, the company had no assets given as collateral.

34. CHANGE IN PROVISIONS

The changes in the provision account balance during the year ended 31 December 2009 were as follows:

Accounts	Beginning Balance	Increases	Reductions	Ending Balance
298 - Other provisions	12,730,157.50	21,199,787.11	117,394.21	33,812,550.40

The "Other provisions" are related with the application of the equity method to the financial investments held by the Company. Provisions were created to face to commitments assumed to some group companies and associates, after the Group"s share of losses exceeds the carrying amount of the investment

The increases are due to: (i) Euro 11,731,706.40 relating to the recognition of the commitments assumed for the company"s share in the negative net result of the group and associated companies; (ii) Euro 1,242,145.91 relating to the recognition of the commitments originated by other variations in the negative equity of the group and associated companies (Note 40) and (iii) Euro 8,225,934.80 related to the split of part of the assets from Prio SGPS, S.A. to the creation of a new company, Prio Advanced Fuels SGPS, S.A..

The reduction in Provisions is related to the dissolution of the company Martifer C.Z., sro, and the sale of the stake held in Martifer Retail & Warehousing srl.

36. CAPITAL

Martifer SGPS, S.A. share capital, fully subscribed and paid at 31 December 2009, amounts to 50,000,000 Euro and it is represented by 100,000,000 bearer shares with a nominal value of 50 cents each.

37. LEGAL ENTITIES HOLDING MORE THAN 20% OF THE SHARE CAPITAL

At 31 December 2009, shareholders with qualified holdings (at least 20% of share capital) in Martifer were:

- I"M - SGPS, S.A.	Euro 20,795,236.50 (41.59%)
- MOTA-ENGIL, SGPS, S.A.	Euro 18,750,000.00 (37.50%)

40. CHANGES IN SHAREHOLDERS" EQUITY

The changes in Shareholders" Equity in the year ended 31 December 2009 were as follows:

Accounts	Beginning Balance	Appropriation of Profit	Increases	Reductions	Transfers	Ending Balance
Equity:
Share capital	50,000,000.00					50,000,000.00
Share premiums	186,500,000.00					186,500,000.00
Adjustments in associated companies	4,225,677.17		1,385,099.28	1,971,684.31	(139,752.70)	3,499,339.44
Legal reserve	2,508,168.82	205,069.62				2,713,238.44
Other reserves			17,347.33			17,347.33
Retained earnings	27,196,982.44	3,896,322.78	117,394.21		139,752.70	31,350,452.13
	270,430,828.43	4,101,392.40	1,519,840.82	1,971,684.31	-	274,080,377.34
88 - Net profit of the year	4,101,392.40	(4,101,392.40)	99,672,120.37			99,672,120.37
	274,532,220.83	-	101,191,961.19	1,971,684.31	-	373,752,497.71

In accordance with a decision of the Shareholders" General Meeting, held on 15 April 2009, net profit for the year ended 31 December 2008 was appropriated as follows:

• 5% to Legal reserve: Euro 205,069.62
• To Retained earnings: Euro 3,896,322.78

The movements shown in caption "Adjustments in associated companies" are due to:
Positive variations on the equity of group and associated companies:
Group and associated companies (Note 10)	1,112,597.84
Reversion of responsibilities assumed for negative equity (Note 34)	272,501.44
Negative variations on the equity of group and associated companies:
Group and associated companies (Note 10)	(457,036.96)
Responsibilities assumed for negative equity (Note 34)	(1,514,647.35)

The variations in equity, mentioned above, were justified, essencially, by exchange rate differences resulting from the translation of the financial statements of group companies expressed in foreign currencies.

Apart from the appropriation of the net profit of 2008, the following transfers occurred between equity captions:

Reclassification of the profits appropriated in 2008, following the equity method application, that were not distributed by the group and associated companies	17,362,566.04
Reclassification from Adjustments in associated companies to Retained earnings, of the balance related to RPW Investments, SGPS, S.A., due to the sale of that stake	(17,502,318.74)
	(139,752.70)

The amount recorded in "Other reserves" results from the Stock Options Plan. The group rewards the services rendered by some workers through an equity-settled stock option plan. The fair value of the services received is recognized as cost, and registered under the equity account during the vesting period. The amount registered as cost represents the fair value of the stock option attributed, estimated based only on market conditions and is recorded against equity. During 2009 this amount was Euro17,347.

43. REMUNERATION OF THE MEMBERS OF THE STATUTORY BOARDS

The remuneration attributed to the members of the statutory boards of the Company during the year ended 31December 2009 was as follows:

Rubricas	Dec-2009	Dec-2008
Board of Directors
Fixed remuneration	1,176,763	1,021,003
Variable remuneration	121,000	190,000
Post-employment benefit	30,550	40,190
Supervisory Board *	108,800	100,569
	1,437,113	1,351,762

"* It includes the remuneration of the Supervisory Board (Euro 14,400) and of the Statutory Auditor

The values expressed in the table represent the total sums paid in the year 2009 to the members of the Board of Directors and Supervisory Board, as remuneration. In 2009, the remuneration paid to Board Members was Euro 1,176,763, as fixed remuneration. The total amount received as variable remuneration was Euro 121,000.00 euro in stock options.

The statement on the remuneration policy for the management and supervisory bodies of the Company, approved in accordance with Law 28/2009, as well as the total sums of remuneration attributed to them in 2009, individually and aggregated, are included in the Corporate Governance Report.

44. SERVICES RENDERED

At 31 December 2009, the services rendered relate, essentially, with management fees to group and associated companies, which detail is presented in Note 16 above.

45. FINANCIAL RESULTS

Net financial items for the years ended 31 December 2009 and 2008 are made up as follows:

Expenses	Dec-2009	Dec-2008	Income	Dec-2009	Dec-2008
681-Interest expense	2,750,830.15		8,586,299.94 781-Interest income	3,309,957.07	1,925,623.87
682-Losses in group and associated companies	53,983,471.58		4,852,523.08 782-Gains from investments in associated companies	8,328,246.87	17,362,566.04
683-Depreciation of real estate investments			783-Income from real estate investments
684-Adjustments for investments			784-Gains from investments in other companies		2,211,938.13
685-Exchange losses			785-Exchange Gains	249
686-Financial discounts			786-Financial discounts	41.84	32.81
687-Losses on short-term investments			787-Gains from short-term investments	0.00	9,189.47
688-Other financial expenses	1,449,831.37		36,743,127.81 788-Other financial income	81,485.21	207.98
Net financial items	(46,464,153.27)	(28,672,392.53)
	11,719,979.83	21,509,558.30		11,719,979.83	21,509,558.30

The caption "Interest income" is related, essencially, to interests debited to group and associated companies (Euro 3,071,397).

The account "Interest expense" relates, essentially, to interests on bank loans obtained

The detail of the account "Gains from investments in associated companies" is presented in note 10 above.

The caption "Other financial expenses" correspond to the following:

a) Amortisation of Goodwill (Notes 3.c and 10) related to financial investments:

Martifer Gmbh Total	301.32 761,556.19
Martifer Metallic Constructions SGPS, S.A.	197,632.93
Prio Advanced Fuels SGPS, S.A.	147,803.86
Prio SGPS, S.A.	415,818.08

Goodwill is depreciated during the period of 20 years.

b) The remainder amount is related, essencially, to the expenses with bank guarantees, charges on loans and several commissions on financing.

46. EXTRAORDINARY RESULTS

Net extraordinary items for the years ended 31 December 2009 and 2008 are made up as follows:

Expenses	Dec-2009	Dec-2008	Income	Dec-2009	Dec-2008
691-Donations			250.00 791-Recovery of taxes
692-Bad debts			104,000.00 792-Recovery of bad debts	8,976.18
693-Losses in inventories			793-Gains in inventories
694-Losses on fixed assets	50,493.39		87,812.50 794-Gains on fixed assets	160,983,769.40	40,611,144.17
695-Fines and Penalties	125,100.00		795-Contractual penalties
696-Increase in amortisations			796-Reduction in provisions
697-Prior year adjustments	612.28		797-Prior year adjustments
698-Other extraordinary expenses	0.00		884.69 798-Other extraordinary income
Net extraordinary items	160,816,539.91	40,418,196.98
	160,992,745.58	40,611,144.17		160,992,745.58	40,611,144.17

The caption "Gains in fixed assets" relates, essencially, to the financial gain recorded on the sale of the equity stake held by the Company in the share capital of Repower Systems, AG that was concluded in the second quarter of 2009.

48. BANK AND OTHER LOANS

Loans at 31 December 2009 are made up as follows:

Account	Short term	Medium and long term	Total
Loaans obtained from financial institutions
Bank loans	1,196,241.52		1,196,241.52
Bank overdrafts	355,625.51		355,625.51
Authorised overdrafts
	1,551,867.03	0.00	1,551,867.03
Other obtained loans
Commercial paper	74,500,000.00		74,500,000.00
	76,051,867.03	0.00	76,051,867.03

The bank and other loans are denominated in Euro and bear interests at market annual rates.

49. ACCRUALS AND DEFERRALS

These captions for the years ended 31 December 2009 and 2008 are made up as follows:

Accounts	Dec-2009	Dec-2008
Accrued income:
Accrued interest	-	592.17
	-	592.17
Deferred costs:
Insurance	7,020.20	3,905.57
Deferred interests	-	981,892.12
Commissions of commercial paper	832,515.66	582,294.22
	839,535.86	1,568,091.91
Deferred tax assets:
Tax losses (Note 6)	2,054,196.15	2,054,196.15
	2,054,196.15	2,054,196.15
Accrued costs:
Personnel expenses to be paid	355,019.22	237,392.15
Interests to be paid	10,644.40	550,544.12
Fees and specialized works	-	75,650.00
Other accrued costs	55,034.40	1,850.00
	420,698.02	865,436.27

EXPLANATION ADDED FOR TRANSALATION OF THE FINANCIAL STATEMENTS

These financial statements are a translation of the individual financial statements originally issued in Portuguese in accordance with the Portuguese Generally Accepted Accounting Principles (POC). In the event of discrepancies, the Portuguese version prevails.

Oliveira de Frades, 25 February 2010

The Certified Accountant Board of Directors

Lourenço Santos Matos Carlos Manuel Marques Martins

__________________________________ __________________________________

__________________________________ Jorge Alberto Marques Martins

__________________________________ Mário Jorge Henriques Couto

__________________________________ Jorge Paulo Sacadura Almeida Coelho

__________________________________ Eduardo Jorge de Almeida Rocha

__________________________________ Luís Valadares Tavares

__________________________________ Jorge Bento Ribeiro Barbosa Farinha

6. SUPERVISORY REPORTS

6.1 SUPERVISORY BOARD REPORT AND RECOMMENDATION

REPORT AND OPINION OF THE SUPERVISORY BOARD On the individual Accounts of 2009

(TRANSLATION OF A REPORT ORIGINALLY ISSUED IN PORTUGUESE)

Dear Shareholders,

• 1. In accordance with the law, statutes and our mandate, we enclose our report on our supervisory activity and our opinion on Martifer – SGPS, S.A. management report and individual accounts for the year ending December 31, 2009, as well as on the proposals presented by the Board of Directors.
• 1. We followed, as much as needed for such purpose, the activity of the company and of its major subsidiaries, having received from the executive members of the Board and from company officials all required explanations and support for the completion of our duties.
• 1. We accompanied the work of the statutory auditor, Dr. Américo Agostinho Martins Pereira, and we reviewed the Legal Certification of Accounts, which have our agreement.
• 1. Within the scope of competence conferred upon us, we have found that:
• a) the management report and financial statements shows a clear picture of the financial position, financial results and cash flows of the Company;
• b) the accounting policies and valuation criteria used, in accordance with the generally accepted accounting principles in Portugal, are appropriate to understanding the net worth of the Company at the end of the financial year and its results;

• c) the proposal for the appropriation of net profit presented by the Board of Directors in its report is adequate.

• 1. Therefore, taking into account the information received from the Board of Directors and the conclusions of the Legal Certification of Accounts, we are of the opinion that:
• a) the Management Report should be approved;
• b) the Individual Financial Statements should be approved;
• c) the proposal for the appropriation of net profit presented by the Board of Directors in its report should be approved.

Oliveira de Frades, 18 March 2010

The Supervisory Board,

STATEMENT OF COMPLIANCE

(In the terms of article 245, number 1, paragraph C of the Securities Code)

Dear Shareholders,

We hereby declare that as to the best of our knowledge:

i) the information in the individual and consolidated financial statements, as well and the appendices, was compiled according to the applicable accounting standards, giving a true and appropriate picture of the assets and liabilities, financial position and results of Martifer - SGPS, S.A. and of the companies included in the consolidation perimeter;

ii) the information contained in the Management Report truthfully represents the operational performance and position of Martifer – SGPS, S.A. and the companies included in the consolidation perimeter, including a description of the main risks and uncertainties faced by the company.

Oliveira de Frades, 18 March 2010

The Supervisory Board,

6.2 STATUTORY AUDIT REPORT

6.3 EXTERNAL AUDIT REPORT

AUDITORS' REPORT

INDIVIDUAL FINANCIAL STATEMENTS

(Translation of a report originally issued in Portuguese)

Introduction

1. In compliance with article nº 245 of the Securities Market Code, we hereby present our Auditors' Report on the financial information contained in the Board of Directors Report and on the accompanying financial statements for the year ended 31 December 2009 of Martifer SGPS, S.A. ("the Company"), which comprise the Balance sheet as of 31 December 2009 that presents a total of 484,638,164 Euros and shareholders' equity of 373,752,498 Euros, including a net profit of 99,672,120 Euros, the Statements of profit and loss by nature and by functions, the Statement of cash flows for the year then ended and the corresponding notes.

Responsibilities

• 1. The Company's Board of Directors is responsible for: (i) the preparation of financial statements that present a true and fair view of the financial position of the Company, the results of its operations and its cash flows; (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) the adoption of adequate accounting principles and criteria and the maintenance of appropriate internal control systems; (iv) informing of any significant facts that have influenced its operations, financial position or results.
• 1. Our responsibility is to verify the financial information included in the documents of account referred to above, namely if, 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 professional and independent report on that financial information based on our examination.

Scope

1. Our examination was performed in accordance with the Technical Review/Audit Standards ("Normas Técnicas e as Directrizes de Revisão/Auditoria") issued by the Portuguese Institute of Statutory Auditors ("Ordem dos Revisores Oficiais de Contas"), which require that the examination be planned and performed with the objective of obtaining reasonable assurance about whether the financial statements are free of material misstatement. An examination includes verifying, on a sample basis, evidence supporting the amounts and disclosures in the financial statements and assessing the estimates, based on judgements and criteria defined by the Company's Board of Directors, used in their preparation. An examination also includes: the assessment of the adequacy of the accounting principles used and their disclosure, taking into consideration the circumstances, the verification of the applicability of the going concern concept, the assessment of the adequacy of the overall presentation of the financial statements, and the assessment that, in all material respects, the financial information is complete, true, up-to-date, clear, objective and licit. Our examination also comprises verifying that the financial information contained in the Board of Directors' Report is in accordance with the other documents of account. We believe that our examination provides a reasonable basis for expressing our opinion.

Page 2 of 2

Opinion

1. In our opinion, the financial statements referred to in paragraph 1 above, present fairly, in all material respects, the financial position of Martifer SGPS, S.A. as of 31 December 2009, the results of its operations and its cash flows for the year then ended, in accordance with generally accepted accounting principles in Portugal and the financial information contained therein is, in terms of the definitions included in the technical standards referred to in paragraph 4 above, complete, true, up-to-date, clear, objective and licit.

Emphasis

1. The financial statements referred to in paragraph 1 above, relate to the Company's operations on an individual non consolidated basis and were prepared in accordance with the legislation in force for approval in the Shareholders' General Meeting. As disclosed in Note 3 c) of the Notes to the financial statements, the investments in group and associated companies are recorded by the equity method. The Company prepared, in accordance with the legislation in force, consolidated financial statements as of 31 December 2009, in accordance with the International Financial Reporting Standards as adopted by the European Union whose main indicators are disclosed in Note 3 of the Notes to the financial statements.

Porto, 19 March 2010

Deloitte & Associados, SROC S.A. Represented by Jorge Manuel Araújo de Beja Neves