Mirgor — Annual Report 2008

Aug 11, 2009

Sociedad Anónima, Comercial, Industrial, Financiera, Inmobiliaria y Agropecuaria	Financial statements for the fiscal year beginning January 1, 2008, and ended December 31, 2008, presented jointly with the Independent Auditor’s Report and the Statutory Audit Committee’s Report (Translation into English - originally issued in Spanish)

The Company is not enrolled in the Statutory Optional System

for the mandatory Acquisition of Public Offerings.

FISCAL YEAR No. 38 BEGINNING JANUARY 1, 2008,

AND ENDED DECEMBER 31, 2008

LETTER TO THE SHAREHOLDERS

(information not audited and not covered by the independent auditor’s report)

To the Shareholders:

In compliance with current legal requirements and Company bylaws, we are pleased to submit for your consideration the documentation related to the financial statements for fiscal year No. 38 ended December 31, 2008.

Environment in which the Company operated during the fiscal year

The change in government brought positive expectations in terms of continuity of the Argentine economic cycle's growth.

In March a serious conflict with the farming sector broke out, which is still being waged today. This period marked a point of inflection in the expectations of economic operators.

The explosion of the foreign financial markets rounded off the pessimistic scenario.

The risk that the fall in activity will confirm a recession or a depression in the economy is large and triggers hefty concerns regarding the levels of unemployment that the government is attempting to avoid by measures intended to drive demand.

The automobile industry

There has been a truly paradoxical situation. In the best year in history for the industry, it has not been possible to celebrate the records reached in units produced, exported, imported and sold on the local market.

These important records came about in spite of the terrible loss in the last half of the year, which forced all plants to bring forward their vacation and then extend these vacation periods.

The government took prompt notice of what was happening, especially in trade. Unfortunately, its promptness did not match the measures it attempted to use to ease the situation, as it did not take into account the structure of stock of the trade networks and the specialization profile Argentine had adopted in the past few years.

Up to the third quarter, exports to Brazil had had a strong impact on production, in spite of the increase in costs with an exchange rage that remained fixed until September, thanks to the simultaneous strong revaluation of the Brazilian real vis-à-vis the US dollar.

With this scenario, Argentine cars were “relatively” cheap for our neighbors. Therefore, and in spite of having access to a great amount of markets, sales abroad focused on Brazil, by more than 70%, as was the case in the late nineties.

• 2 -

During this period, there were significant difficulties in being able to meet the strong demand that was facing the sector. From the strikes held by customs authorities in Brazil to the road blocks caused by conflicts with the farming sector and due to the smoke from grassland burnings, to strikes at some companies forming part of the automobile production chain. In this last case, high salary claims had to be accepted to be able to overcome these problems.

At some points in time during the year, due to a lack of foresight of such a strong pace of growth, in Brazil as well as in Argentina there were shortages of raw materials. In many cases increases in costs had to be accepted that could not be fully passed on to the prices of the vehicles or to the parts of those vehicles.

Production reached 597,086 units, which represented a 9.6% increase as compared to 2007, completing 6 years of accumulated growth of more than 270%.

Exports exceeded 351,092 units, with a 10.9 % growth.

In the last 6 years, export growth exceeded 180%, coming back to a 58% market share in the production of vehicles in Argentina.

Local demand increased at a lower rate than production, 8.3%, with a historical record of 611,000 units sold. Out of this amount, 61% involves imported cars, a reversion of the cycle that had been bringing down this market share in the previous two years.

Company activities

An important event for the whole Mirgor family was that on October 17 the Company celebrated its 25th anniversary.

As regards business, for the third year in a row, Mirgor’s sales in units in the car manufacturing market, increased at a higher rate than the rate of car production.

2008 marked the end of the line for two models, the Megane and the Polo Classic, which, oddly enough, had begun production at Mirgor in the same year, 1997.

This year marked an important point of inflection in the diversification stage of the Company’s customers.

Air quality and temperature control system sales went from 273,739 units sold in 2007 to 313,213 units sold in 2008, which represented a 14.4% growth.

Mirgor's market share in this industry continued to be high, comfortably exceeding 50% of cars being made.

With a 470% growth in the last 6 years, Mirgor increased its share from 34% to 52% in the industry of Argentine car manufacturer air quality and temperature control.

Company sales increased 9.1%, going from ARS 820 million to ARS 1.061 billion, exceeding USD 300 million for the first time in history.

Residential air quality and temperature control increased its percentage share in the Company's consolidated sales mix to 40% as a result of the extension in the range of products sold, which allowed for a greater percentage growth in units than in the automobile business.

• 3 -

As with last year, the systems for cars with air conditioning sold by the company continued to represent 88% of the total air quality and temperature control systems for cars.

It is evident that the Argentine production profile is made up of vehicles that are considerably fitted out. This characteristic enables a better marginal contribution and a better balancing point for the plants.

The breakdown of the sales (by model) was the following:

		Breakdown of sales to car manufacturers (in units)
		2008			2007			Difference
Total		313,213	-		273,739	-		39,474	14.4%
OLD MODELS
SPRINTER		19,549	6.2%		17,547	6.4%		2,002	11.4%
CORSA I		57,476	18.4%		51,140	18.7%		6,336	12.4%
PARTNER		20,208	6.5%		18,553	6.8%		1,655	8.9%
KANGOO		24,191	7.7%		26,821	9.8%		(2,630)	(9.8%)
MEGANE		11,143	3.6%		14,383	5.3%		(3,240 )	(22.5%)
POLO		3,865	1.2%		5,999	2.2%		(2,134 )	(35.6%)
CADDY		4,410	1.4%		5,742	2.1%		(1,332)	(23.2%)
CLIO		37,209	11.9%		26,135	9.6%		11,074	42.4%
Subtotal		178,051	56.8%		166,320	60.%		11,731	7.1%
NEW MODELS
CORSA II		-	0.0%		4,483	1.6%		(4,483 )	(100.0%)
307		39,085	12.5%		36,359	13.3%		2,726	7.5%
SURAN		53,325	17.0%		44,781	16.4%		8,544	19.1%
CITROEN C4		33,918	10.8%		21,796	8.0%		12,122	55.6%
NUEVO SPRINTER		4,341	1.4%		-	0.0%		4,341	100.0%
CHERY		1,397	0.4%		-	0.0%		1,397	100.0%
FOX		2,245	0.7%		-	0.0%		2,245	100.0%
SYMBOL		851	0.3%		-	0.0%		851	100.0%
Subtotal		135,162	43.2%		107,419	39.2%		27,743	25.8%

The Interclima condensers plant worked to full capacity throughout the whole year and received new equipment for expansion in the last quarter of the year. Not only was capacity improved, but new technologies were introduced that enabled it to maintain production technology updated. These investments were essential to accompany the demand for parts with greater performance for the models that are being intended for release in the next few years.

As regards the production of residential air conditioning equipment, Interclima produced a total of 298,070 units, 21% more than in 2007.

New products were and customers were added, such as LG Electronics and York. Production capacity and technology was increased, which enabled the Company to continue strongly in the lead in the sector.

Also in this last case, the Company suffered the withdrawal in demand during the last two months of the year.

Towards the end of the year, IATEC S.A. was purchased, a company subject to the industrial promotion benefit of Tierra del Fuego for the production of different electronic products.

• 4 -

Extension of the Letter to the Shareholders under Presidential Decree No. 677/2001

The Company’s current policy is to compensate personnel based on the salaries considered in line with the market in terms of fixed and variable aspects, always taking into consideration education, capacity and experience, as well as the performance assessment and the fulfillment of set goals, without option plans or other variables. This same policy is applied to the Board of Directors, with salaries assigned to those members who also perform technical or administration functions at the Company, and fees approved by the Shareholders' Meeting for independent directors.

Financially, in line with the course of business, the Company closed deals with banks to finance the working capital the Company was unable to generate itself or which proved insufficient. Furthermore, during this year, the shareholders’ meeting held September 4, 2008, decided to approve the Global Program for the issuance of corporate bonds of up to USD 100,000,000, which was approved by the CNV (Argentine securities commission) on February 24, 2009.

The Company’s internal control has procedures and control systems enabling it to analyze and assess, on a regular basis, the operation thereof within the basic internal control guidelines. The Company constantly analyzes control regulations, which are also constantly updated to achieve greater trust in all systems and processes. It also allows us to achieve the international quality certifications required by both suppliers and customers. On the other hand, our external auditors also verify the proper working order of the internal control systems on a regular basis.

Consolidated financial statements analysis

(figures stated at values as of 12.31.08)

• Income for the year

Sales revenues for the year amounted to ARS $ 1,061,742,238 representing a 29.5% year-to-year increase (ARS 819,741,000). The increase in sales this year was due to the greater volume as well as to higher sales prices, even when the crisis of the second half of the year caused stagnation in their growth.

Net income for fiscal 2008 amounted to ARS 28,439,625, representing 2.7% of sales, as compared to the income of ARS 59,269,447 obtained in fiscal 2007. Furthermore, financial income (expense) and holding gains (losses) resulted in a loss of ARS 14,851,000, which represent 1.4% of sales, and in 2007, financial income (expense) and holding gains (losses) resulted in a loss of ARS 1,290,000, representing 0.16% of sales, basically due to financial interest and the effect of the variation in the foreign exchange rate.

Administrative expenses, totaling ARS 31,127,984, represent 2.93% as regards sales this year, slightly less, in proportion to sales and higher in relation to those of the prior year, during which expenses totaled ARS 27,696,331.

The transactions with the subsidiary are described in note 7 to the stand-alone financial statements.

• Cash flows

Cash flows used in ordinary consolidated transactions, net of changes in assets and liabilities for fiscal 2008, amounted to ARS 79,186,535 while during the year ended December 31, 2007, cash flows generated an amount of ARS 467,382. The purchase of P&E during this year totaled ARS 33,182,957, and noncurrent investments amounted to ARS 318,850, while in the prior year, P&E purchases totaled ARS 12,283,624. P&E additions were mainly intended to expand the Company's production capacity and to renovate production technology. During the current year no cash was provided by or used in extraordinary transactions.

• 5 -

In connection with the cash related to financial activities, during fiscal 2008, loans were settled in the amount of ARS 259,745,916 while in fiscal 2007, the settlements amounted to ARS 91,198,228, and the payment of dividends to ARS 4,000,000; net cash flows from financial activities represented cash provided in the amount of ARS 108,883,187 in the light of cash provided totaling ARS 9,001,772 in fiscal 2007.

The cash flows described involved cash amounting to ARS 3,732,236, used in 2008 and cash amounting to ARS 3,306,968 used in 2007.

• Financial position

Shareholders’ equity for 2008 amounted to ARS 206,123,701, showing a 16% year-to-year increase.

The current liquidity ratio for 2008 was 1.31 while, in fiscal 2007, such ratio was 1.42; in addition, the fixed assets-to-shareholders’ equity ratio was 0.15 for 2008 and 0.13 for 2007.

Total consolidated assets for fiscal year 2008 amounted to ARS 588,295,408 which represents a 24.7% year-to-year increase.

Prospects

New automobile products were launched during the year. New models such as the Chery’s Tiggo began to be sold, produced by the largest Chinese company based in the region with a plant in Montevideo.

Mirgor was also involved in the production of systems for new cars including Peugeot, the C4 hatchback, the Mercedes Benz New Sprinter (model intended only for extra zone export) and the Renault Symbol.

Interclima also closed a new business deal by beginning production on condensers for the Peugeot 207.

However, most important in ensuring the Company’s future was that Mirgor received purchase orders for the new GM vehicle that will be launched in 2009. Another very important deal involved production of the air quality and temperature control systems for the RPU pick-up truck presented by VW at the latest Paris Auto Show. In terms of projected volume, this model represents the Company's largest deal since it first started out in 1983.

Lastly, and to round off a very productive year, Renault announced the designation of Mirgor to produce the air quality and temperature control system for a new car for 2011. This deal includes the integration of an Interclima condenser which will launch a new family of latest-generation products.

In terms of activity, vehicle production will suffer the effects of the fall in global demand.

The first aspect that has been affected was exports to Europe of a few given models. In this case, the fall is not as significant as that market covered 5% of the total.

The current projection for the industry stands at around 420,000 units. Although this represents a fall in relation to 2008, compared to a historical perspective this would not be among the worst years of the sector.

The domestic market may be benefitted by the implementation of different government plans boosting the industry’s revival through a plan to finance different ranges of vehicles.

• 6 -

What is helping demand is the fact that Brazil brought down taxes on cars even those manufactured in Argentina.

Early numbers from the car manufacturers are that the program is avoiding a fall that seemed inevitable.

As of year-end, Brazil announced that it would extend the tax relief, given the success of the last few months.

How IATEC S.A. does in the future will be important to the Company; its promotion project features different electronic products, including television sets, microwaves, cell phones, sound equipment, etc.

Proposal submitted by the Board of Directors

Earnings distribution

Unappropriated retained earnings at end of the year include the following information:

Item		In thousands of ARS
Unappropriated retained earnings at beginning of year		163,931
Income for the year		28,440
Total as of December 31, 2008		192,371
To legal reserve		-
Balance at the disposal of the Shareholders’ Meeting		192,371

The Board of Directors suggests not distributing dividends to have access to financing to bear the changes in working capital.

Acknowledgement

The Board of Directors wishes, once again, to express its deep gratitude to the management and employees for their collaboration during the current year as well as the suppliers and customers for the trust in the Company and the support granted, all of which made it possible to achieve these results.

Buenos Aires,

March 06, 2009

JORGE ANTONIO CAPUTO

Vice-Chairman acting as Chairman

INDEPENDENT AUDITORS’ REPORT

(Translation of a report originally issued in Spanish – see note 15 to the financial statements)

To the Chairman and Directors of

MIRGOR S.A.C.I.F.I.A.

Registered office: Einstein 1111

Río Grande – Tierra del Fuego

CUIT (Taxpayer Identification No.): 30-57803607-1

1. We have audited the accompanying balance sheet of MIRGOR S.A.C.I.F.I.A. as of December 31, 2008, and the related statements of income, changes in shareholders’ equity and cash flows for the year then ended. We have also audited the accompanying consolidated balance sheet of MIRGOR S.A.C.I.F.I.A. and its subsidiaries as of December 31, 2008, and the related consolidated statements of income and cash flows for the year then ended, disclosed as supplementary information.

2. The Company’s Management is responsible for the preparation and fair presentation of the financial statements in accordance with the professional accounting standards effective in the Province of Tierra del Fuego, Antarctica and South Atlantic Islands, Argentina, and the applicable Argentine Business Associations Law provisions and CNV (Argentine Securities Commission) regulations for the preparation of financial statements. This responsibility includes: designing, implementing, and maintaining an adequate internal control system so that such financial statements are free from material misstatement whether due to errors or irregularities; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Our responsibility is to express an opinion on these financial statements based on our audit.

3. Our work was conducted in conformity with the auditing standards effective in Argentina. Those standards require that the auditor plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

4. 2 -

An audit involves performing procedures, on a selective test basis, to obtain judgmental evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, who, to this end, assesses the risks of material misstatement of the financial statements, whether due to errors or irregularities. In making these risk assessments, the auditor considers the Company’s internal control relevant to the preparation and fair presentation of the financial statements in order to select the appropriate audit procedures in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control system in place. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Management, as well as evaluating the overall presentation of the financial statements.

We believe that the judgmental evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

1. As mentioned in note 4 to the accompanying financial statements, as of December 31, 2008, the Company and its subsidiaries had in their records, noncurrent value-added tax, income tax, and minimum presumed income tax credits amounting to ARS 11,015,040, the recoverability of which depends on the companies’ possibility of generating enough taxable income to absorb them. Although the Company’s Management understands that based on the business plan those credits will be recoverable, as of the date of issuance of this report, it is not possible to estimate the recoverable amount of such credits.

2. In our opinion, subject to the effect of adjustments, if any, that could have been required if the outcome of the uncertainty mentioned in paragraph (4) had been known, the financial statements mentioned in paragraph (1) present fairly, in all material aspects, the financial position of MIRGOR S.A.C.I.F.I.A. and the consolidated financial position of MIRGOR S.A.C.I.F.I.A. with its subsidiaries as of December 31, 2008, and the related results of its operations and its cash flows for the year then ended, in conformity with the professional accounting standards effective in the province of Tierra del Fuego, Antarctica and the South Atlantic Islands, Argentina.

3. 3 -

4. Regarding the balance sheet of MIRGOR S.A.C.I.F.I.A. and the consolidated balance sheet of MIRGOR S.A.C.I.F.I.A. with its subsidiaries as of December 31, 2007, and the statements of income, changes in shareholders’ equity, and cash flows for the year then ended, presented for comparative purposes, we report that on March 6, 2008, we issued an auditors’ report which included qualifications for: (a) a scope limitation related to the investment in the subsidiary Capdo S.A., and (b) unresolved uncertainties in relation to the recoverability of certain tax credits totaling ARS 6,748,490. Subsequent to the issuance of the abovementioned financial statements and report, we performed audit procedures on the subsidiary Capdo S.A.’s financial statements mentioned in point (a) above, without any significant adjustments having been made.

5. In compliance with current legal requirements, we further report that:

6. The financial statements mentioned in paragraph (1) were transcribed into the Inventory and Financial Statements book and, in our opinion, subject to the effect of the adjustments, if any, that could have been required if the outcome to the uncertainty mentioned in paragraph (4) had been known, they were prepared, in all material aspects, in conformity with the applicable Argentine Business Associations Law provisions and CNV (Argentine securities commission) regulations.

7. Except as mentioned in note 9 to the accompanying financial statements, the financial statements of MIRGOR S.A.C.I.F.I.A. result from books kept, in all formal respects, pursuant to current legal requirements and the conditions established by the Tierra del Fuego province IGJ (provincial regulatory agency of business associations) Resolution No. 1000/00 dated December 13, 2000.

8. The information contained in points 2, and 3 of the “Summary of events for the year ended December 31, 2008”, arises from the accompanying financial statements as of December 31, 2008, and 2007, and the financial statements as of December 31, 2006, 2005, and 2004, which are not included in the accompanying document, on which we had issued our reports dated March 09, 2007, March 10, 2006, and March 11, 2005, respectively, to which we refer and which are to be read jointly with this report.

9. 4 -

10. As of December 31, 2008, liabilities accrued in employer and employee contributions to the ANSeS (National social security administration) resulting from the Company’s accounting books amount to ARS 1,479,839, none of which was due and payable as of that date.

11. During the year ended December 31, 2008, we billed audit services fees to the issuer, representing 100% of the total amount billed to the issuer on any and all accounts, 71% of the total amount of audit services billed to the issuer, its parent company and subsidiary, and 71% of the total amount billed to the issuer, its parent company and subsidiary on any and all accounts.

Buenos Aires City , PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.

March 06, 2009 C.P.C.E.T.F. Cámara Río Grande. Vol. 1 – Fo. 3

Karén Grigorian

(Partner)

Certified Public Accountant (U.B.A.)

C.P.C.E.T.F. Cámara Río Grande. Vol. 1 – Fo. 237

BOARD OF DIRECTORS

MIRGOR S.A.C.I.F.I.A.

CHAIRMAN

Lic. Roberto G. Vazquez (*)

VICE-CHAIRMAN

Ing. Jorge Antonio Caputo

DIRECTORS

Mrs. Mónica María Caputo

Mr. José Fara (*)

Ing. Alejandro Carrera (*)

ALTERNATE DIRECTORS

Dr. Diego García Villanueva

Dr. Mauricio Blacher

Dr. Fabio Rozemblun

Lic. Martín Basaldúa

Dr. Juan José Salas

STATUTORY AUDIT COMMITTEE

Statutory Auditors

Dr. Julio Cueto Rua

Dr. Mario Volman

Dr. Andrés Mercau Saavedra

Alternate Statutory Auditors

Dra.María Andrea Rabal

Dr. Hugo Kaplan

Dra. María Eugenia Ramirez

(*) Audit Committee members.

Registered office: Einstein 1111 – Río Grande – Province of Tierra del Fuego.

Main business: Manufacturing air conditioning equipment for vehicles.

Date of registration with the Public Registry of Commerce:

• Of the articles of incorporation: June 1, 1971.
• Of the last amendment to by-laws: August 12, 2004.

Expiration date of the articles of incorporation: May 31, 2070.

FISCAL YEAR No. 38 BEGINNING JANUARY 1, 2008

AND ENDED DECEMBER 31, 2008

SUMMARY OF EVENTS (*)

(Figures stated in Argentine pesos - Note 1.b)

1. BRIEF COMMENT ON THE COMPANY'S ACTIVITIES FOR THE YEAR

The last quarter of the year was affected by the consequences of the local crisis caused by the conflicts with the farming sector, roadblocks, stoppage in activities and cancellation of transactions, among other consequences. In addition to this, the international financial crisis arose, strongly affecting the whole vehicle industry.

The large international automobile companies decreased their production plans and began dismissing a huge amount of personnel.

Local companies partly felt this conflict, causing a decrease in expected sales for this latter period; it should be noted that estimates at the beginning of the year contemplated a yearly production of 700,000 units and in the end the production for the year totaled 600,000.

The company’s sales, in units, decreased by 22%. The Company sold 59,116 units with air conditioning, 22.8% less than the total for the same period the prior year, and 8,386 units without air conditioning, 16.2% less.

Residential air conditioning systems also suffered the impact of the local as well as international crises, due to the uncertainties they cause in the consumer. Sales in units decreased in this period, going from 112,558 units in the last quarter of the prior year to 101,549 units this quarter, which represents a 9.8% decrease.

• 2 -

• CONSOLIDATED BALANCE SHEET STRUCTURE

		12/31/2008		12/31/2007		12/31/2006		12/31/2005		12/31/2004
Current assets		497,989,141		410,096,404		252,279,352		162,979,749		99,680,710
Noncurrent assets		90,306,267		61,855,690		52,421,886		24,863,153		26,556,016
Total assets		588,295,408		471,952,094		304,701,238		187,842,902		126,236,726
Current liabilities		378,958,766		289,484,456		176,834,854		102,322,723		57,508,603
Noncurrent liabilities		3,192,726		4,767,529		5,439,603		3,100,800		6,032,289
Total liabilities		382,151,492		294,251,985		182,274,457		105,423,523		63,540,892
Minority interest		20,215		16,033		12,152		7,315		5,196
Shareholder´s equity		206,123,701		177,684,076		122,414,629		82,412,064		62,690,638
Total liabilities and Shareholder´s equity		588,295,408		471,952,094		304,701,238		187,842,902		126,236,726

1. CONSOLIDATED STATEMENT OF INCOME STRUCTURE

		12/31/2008		12/31/2007		12/31/2006		12/31/2005		12/31/2004
Ordinary operating income from recurring operations		43,084,818		61,290,797		39,659,811		27,929,181		17,491,758
Financial (expense) / income, net		(14,851,251)		(1,289,928)		563,520		(6,844,800)		(8,938,563)
Other (expenses) / income, net		19,374		88,880		(230,863)		(854,542)		88,840
Income tax		190,866		(816,421)		14,934		(505,080)		(1,341,100)
Minority interest (loss)		(4,182)		(3,881)		(4,837)		(2,119)		(1,078)
Net income		28,439,625		59,269,447		40,002,565		19,722,640		7,299,857

• 3 -

• STATISTICAL DATA (1)

		12/31/2008				12/31/2007				12/31/2006				12/31/2005				12/31/2004
Volume of units		Quarter		Accum.		Quarter		Accum.		Quarter		Accum.		Quarter		Accum.		Quarter		Accum.
Production (2)		230,296		856,538		246,032		690,747		184,917		579,707		117,689		358,217		92,533		275,243
Sales (3)		180,218		676,206		210,872		562,992		149,177		461,891		85,267		256,059		77,832		232,293
* Local		169,051		619,349		201,488		532,277		137,235		399,727		78,415		206,949		54,464		150,632
Equipment with air conditioning		59,116		274,325		76,557		241,801		55,331		173,228		25,206		90,593		21,413		74,837
Equipment without air conditioning		8,386		38,888		10,007		31,938		8,569		32,994		7,749		32,572		10,623		36,183
Instrument Panels		-		8,066		2,366		11,753		3,538		14,288		5,873		22,359		7,173		22,149
Residential air conditioning		101,549		298,070		112,558		246,785		69,797		179,217		39,587		61,425		15,255		17,463
* Exports		11,167		56,857		9,384		30,715		11,942		62,164		6,852		49,110		23,368		81,661

(1) As from fiscal year 2004, the units sold by Interclima S.A. are disclosed as statistical information.

(2) Including the one related to Interclima S.A.

(3) The units sold among members of the consolidated group are not included.

1. RATIOS

	12/31/2008		12/31/2007		12/31/2006		12/31/2005		12/31/2004
Liquidity	1.31		1.42		1.43		1.59		1.73
Solvency	0.54		0.60		0.67		0.78		0.99
Fixed asset-to-equity capital ratio	0.15		0.13		0.17		0.13		0.21
Rentability	0.14		0.33		0.33		0.24		0.12

1. LISTED PRICE (VALUES PER ARS1 NOMINAL VALUE)

Jan 07		Jan 08		Feb 07		Feb 08		Mar 07		Mar 08
88.50		150.00		98.00		165.40		88.00		150.00

Apr 07		Apr 08		May 07		May 08		Jun 07		Jun 08
96.50		147.90		109		190.00		119.45		187.00

Jul 07		Jul 08		Aug 07		Aug 08		Sep 07		Sep 08
117.00		188.70		113.00		172.50		132.00		135.10

Oct 07		Oct 08		Nov 07		Nov 08		Dec 07		Dec 08
135.45		74.80		164.00		43		154.80		39.4

• 4 -

• PROSPECTS

The Company has been in business for 25 years, overcoming many crises and moments of uncertainty through determination and hard work.

For the coming year, the Company received purchase orders for new General Motors vehicles, a very important business deal to produce air quality and temperature control systems for the new Volkswagen pick-up, and the announcement by Renault that it has appointed Mirgor to produce the air quality and temperature control system for a new car that will come out in 2011, also involving Interclima.

Although the level of activity of the automobile industry is not at expected levels in light of the fall in global demand, it cannot be said that the level of activity is a cause for concern.

It is also expected that the business startup of the recently-acquired company (IATEC S.A.) will follow the Company’s development.

Buenos Aires City,
March 6, 2009

Ing. Jorge Antonio Caputo

Vice-Chairman acting as Chairman

1. Information not covered by the independent auditor’s report, except for 2,3 and 5.

FINANCIAL STATEMENTS RELATED TO FISCAL YEAR No. 38

FOR THE YEAR BEGINNING JANUARY 1

AND ENDED DECEMBER 31, 2008,

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

Registered office: Einstein 1111 – Río Grande – Tierra del Fuego.

Main business: Manufacturing air conditioning equipment for vehicles.

Date of registration with the Public Registry of Commerce:

• Of the articles of incorporation: June 1, 1971.
• Of the first amendment to by-laws: July 1, 1994.
• Of the last amendment to by-laws: August 12, 2004.

Registration number with the IGJ (regulatory agency of business associations): 40,071.

Expiration date of articles of incorporation: May 31, 2070.

Parent company: See Note 6 to the stand-alone financial statements.

Capital structure: See Note 3 to the stand-alone financial statements.

The Company is not enrolled in the Statutory Optional System for the Mandatory Acquisition of Public Offerings.

	Argentine pesos
40,000,000 shares of common stock, face value ARS 0.10 each subscribed, paid in issued and registered with the Public Registry of Commerce	4,000,000

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

	12/31/2008		12/31/2007
ASSETS
CURRENT ASSETS
Cash - Note 2	11,979,796		15,712,032
Trade receivables - Note 2	232,680,684		211,812,352
Tax credits - Note 2	4,365,569		4,151,025
Other receivables - Note 2	1,942,934		703,093
Inventories - Note 2	247,020,158		177,717,902
Total current assets	497,989,141		410,096,404
NONCURRENT ASSETS
Tax credits - Note 2	10,498,519		9,298,464
Other receivables - Note 2	614,244		143,735
Property and equipment - Note 1.f.a)	78,143,666		51,579,722
Intangible assets - Note 1.f.b)	209,851		312,632
Subtotal noncurrent assets	89,466,280		61,334,553
Goodwill	839,987		521,137
Total noncurrent assets	90,306,267		61,855,690
Total assets	588,295,408		471,952,094
LIABILITIES
CURRENT LIABILITIES
Trade payables - Note 2	192,753,004		232,224,645
Loans - Note 2	151,080,023		36,870,275
Salaries, payroll taxes and taxes payable - Note 2	21,626,494		13,591,529
Customer advances - Note 2	10,552,560		572,619
Other liabilities - Note 2	2,946,685		6,225,388
Total current liabilities	378,958,766		289,484,456
NONCURRENT LIABILITIES
Loans - Note 2	2,947,978		4,032,579
Other liabilities - Note 2	244,748		734,950
Total noncurrent liabilities	3,192,726		4,767,529
Total liabilities	382,151,492		294,251,985
MINORITY INTEREST IN SUBSIDIARIES	20,215		16,033
SHAREHOLDERS’ EQUITY	206,123,701		177,684,076
Total liabilities, minority interest and shareholders´equity	588,295,408		471,952,094

Notes 1 through 4, and Exhibit H to the consolidated financial statements, and notes 1 through 15, and Exhibit C to the stand-alone financial statements of MIRGOR S.A.C.I.F.I.A., are an integral part of these consolidated financial statements and should be read jointly with those statements.

CONSOLIDATED STATEMENT OF INCOME

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

	12/31/2008		12/31/2007
Net sales - Note 2	1,061,742,238		819,741,119
Cost of goods sold	(945,574,782)		(705,740,483)
Gross income	116,167,456		114,000,636
Administrative expenses - Exhibit H	(31,127,984)		(27,696,331)
Selling expenses - Exhibit H	(41,954,654)		(25,013,508)
Financial income (expense) and holding gains (losses) from assets:
Interest	4,632,682		2,365,866
Foreign exchange difference	1,055,768		83,843
Inventories holding gains	18,626,070		7,863,320
Allowance for doubtful accounts	-		174,023
Allowance for obsolescence and impairment in value of inventories	(1,089,561)		693,249
Allowance for impairment in value of tax credits	(412,299)		(44,803)
Financial income (expense) and holding gains (losses) from liabilities:
Interest	(28,034,284)		(6,631,008)
Foreign exchange difference	(9,629,627)		(5,794,418)
Other (expense) income, net	19,374		88,880
Income before income tax	28,252,941		60,089,749
Income tax	190,866		(816,421)
Income after income tax	28,443,807		59,273,328
Minority interest in subsidiaries	(4,182)		(3,881)
Net income for the year	28,439,625		59,269,447

Notes 1 through 4, and Exhibit H to the consolidated financial statements, and notes 1 through 15, and Exhibit C to the stand-alone financial statements of MIRGOR S.A.C.I.F.I.A., are an integral part of these consolidated financial statements and should be read jointly there with.

CONSOLIDATED STATEMENT OF CASH FLOWS (1)

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

	12/31/2008		12/31/2007
CHANGES IN CASH
Cash at beginning of year	15,712,032		19,019,000
Cash at end of year	11,979,796		15,712,032
(Decrease) in cash, net	(3,732,236)		(3,306,968)
CAUSES OF CHANGES IN CASH OPERATING ACTIVITIES:
Net income for the year	28,439,625		59,269,447
Interest and foreign exchange difference accrued on debt	25,058,532		3,711,479
Income tax	(190,866)		816,421
Adjustments to arrive at net cash flows provided by operating activities:
P&E depreciation and intangible assets amortization	6,648,875		5,058,101
Minority interest	4,182		3,881
(Decrease) in the allowance for doubtful accounts	-		(174,023)
Increase (Decrease) in the allowance for impairment in value and obsolescence of inventories	1,089,561		(693,249)
Increase in the allowance for impairment in value of tax credits	412,299		44,803
Changes in operating assets and liabilities
(Increase) in trade receivables	(20,868,332)		(76,673,147)
(Increase) in inventories	(70,391,817)		(81,741,417)
(Increase) Decrease in other receivables	(1,710,350)		373,886
(Decrease) Increase in trade payables	(39,471,641)		93,425,856
Increase (Decrease) in salaries, payroll taxes and other taxes payable (net of tax credits)	6,398,933		(2,020,477)
Increase (Decrease) in customer prepayments	9,979,941		(1,328,311)
(Decrease) Increase in other liabilities	(3,768,905)		3,295,507
Interest paid	(20,816,572)		(2,901,375)
NET CASH FLOWS (USED IN) PROVIDED BY OPERATING ACTIVITIES	(79,186,535)		467,382
INVESTING ACTIVITIES:
P&E additions	(33,182,957)		(12,283,624)
Investment & goodwill acquisition	(318,850)		-
P&E sales	72,919		-
Investment in intangible assets	-		(492,498)
NET CASH FLOWS (USED IN) INVESTING ACTIVITIES	(33,428,888)		(12,776,122)
FINANCING ACTIVITIES:
Loan repayment	(259,745,916)		(91,198,228)
Inflows from loans	368,629,103		104,200,000
Dividends paid	-		(4,000,000)
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES	108,883,187		9,001,772
(DECREASE) IN CASH, NET	(3,732,236)		(3,306,968)

1. Cash comprises cash on hand and cash in banks.

Notes 1 through 4, and Exhibit H to the consolidated financial statements, and notes 1 through 15, and Exhibit C to the stand-alone financial statements of MIRGOR S.A.C.I.F.I.A., are an integral part of these consolidated financial statements and should be read jointly with those statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008,

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Nota 1.b)

1. SIGNIFICANT ACCOUNTING POLICIES
2. Accounting standards applied to financial statements preparation and presentation:

As established by CNV (Argentine Securities Commission) Resolution No. 368/01, the consolidated financial statements are required to be presented preceding the issuer’s stand-alone financial statements. This regulation only implies a change in the place of consolidated information, and it does not modify the fact that stand-alone financial statements constitute the main information and consolidated financial statements are supplementary, as set forth by Argentine Business Associations Law and current professional accounting standards. Therefore, the correct interpretation of these consolidated financial statements requires that they be read together with the stand-alone financial statements.

• 1. Restatement into constant pesos:

Professional accounting standards establish that the financial statements should be stated in constant pesos. In a monetary stability context, the nominal currency is used as constant currency, but, in an inflationary or deflationary context, the financial statements should be stated in pesos reflecting the purchasing power as of their closing date by recognizing the changes in the Domestic Wholesale Price Index (WPI) published by the INDEC (Argentine Institute of Statistics and Censuses), in accordance with the restatement method set by FACPCE (Argentine Federation of Professional Councils in Economic Sciences) Technical Resolution No. 6.

The Company’s financial statements recognize the changes in the purchasing power of the argentine peso through February 28, 2003, in accordance with Presidential Decree No. 664/2003 and CNV General Resolution No. 441. Under professional accounting standards the restatement method established in Technical Resolution No. 6 should have been discontinued only as from October 1, 2003. The effects of failing to recognize variations in the currency purchasing power until such date were immaterial with respect to the accompanying financial statements.

• 1. Valuation and disclosure method summary:

The valuation and disclosure methods used in the consolidated financial statements are similar to those disclosed in note 1 to the stand-alone financial statements, except for the valuation of interests in subsidiaries, which in the current consolidated statements have been incorporated on a line-by-line basis following the method of FACPCE Technical Resolution No. 21, with the applicable eliminations, and the P&E incorporated in the acquisition of the interest in Capdo S.A., which were valued at their current value as of the acquisition date.

• 1. Consolidation bases:

Following the procedure established in FACPCE Technical Resolution No. 21, MIRGOR S.A.C.I.F.I.A. has consolidated line by line its financial statements as of December 31, 2008, and 2007, with those of its subsidiaries, Interclima Sociedad Anónima and Capdo S.A.

The following information reflects the parent-subsidiary relationship:

Subsidiary		Equity interest and voting rights as of 12/31/2008 and 12/31/2007		Year-end – latest financial statements issued
Interclima Sociedad Anónima		99.9667% 99.9667%		12/31/2008
CAPDO Sociedad Anónima		95.00% 95.00%		12/31/2008

In the consolidation, the amounts invested in the subsidiaries and the share in income (loss) and cash flows are replaced by all the subsidiaries’ assets, liabilities, income (loss) and cash flows, separately disclosing the third-party minority interests in subsidiaries. Receivables, payables, and transactions performed among members of the consolidated group were eliminated from the consolidation. Income (loss) deriving from transactions between members of the consolidated group not reported to third parties and contained in final assets and liabilities are fully eliminated.

• 1. Financial statements used in the consolidation:

The following financial statements were used to prepare the consolidated financial statements as of December 31, 2008, and 2007: 1) The financial statements of Interclima Sociedad Anónima as of those dates, on which the auditor’s report was issued on March 5, 2009, and on March 5, 2008, respectively, including an “except for” qualification related to a discrepancy in the income tax accrual valuation method and the related allocation to income (loss) (such adjustment was considered for the investment valuation and, consequently, in these consolidated financial statements), and including a qualification for uncertainty related to the recoverability of certain tax credits. Furthermore, the report dated March 5, 2008, includes a qualification for scope limitation regarding the investment in the subsidiary, Capdo S.A. (after the issuance of the financial statements and the auditor’s report, the auditors performed audit procedures on CAPDO S.A.'S financial statements, and no significant adjustments were made), and (2) Capdo Sociedad Anónima as of December 31, 2008, and 2007, which includes an unqualified auditor’s report dated March 2, 2009, and March 3, 2008, respectively.

• 1. Changes in Property and equipment and intangible assets:

		12/31/2008		12/31/2007
1. Property and equipment:
Balance at beginning		51,579,722		44,139,712
Additions (1)		33,182,957		12,283,624
Retirements (net of accumulated depreciation) (1)		(72,919)		-
Depreciation		(6,546,094)		(4,843,614)
Balance as of year-end		78,143,666		51,579,722

• 1. Net of 6,551,802 related to capital contribution (fixed assets) made by Interclima S.A. to IATEC S.A., and 5,245,035 of fixed assets sold by Mirgor S.A.C.I.F.I.A. to IATEC S.A.

		12/31/2008		12/31/2007
1. Intangible assets:
Balance at beginning		312,632		34,621
Additions		-		492,498
Amortization		(102,781)		(214,487)
Balance as of year-end		209,851		312,632

• 1. Notes to the stand-alone financial statements of Mirgor S.A.C.I.F.I.A. that are applicable to the consolidated financial statements:

Notes 1, 4, 8, 11, 12 and 13 to the stand-alone financial statements of Mirgor S.A.C.I.F.I.A. are applicable to the present consolidated financial statement.

1. BREAKDOWN OF MAIN ACCOUNTS

		12/31/2008		12/31/2007
CURRENT ASSETS
Cash
On hand in Argentine pesos		28,666		23,609
On hand in foreign currency		64,981		20,650
In banks in Argentine pesos		11,471,499		12,917,557
In banks in foreign currency		414,650		2,750,216
		11,979,796		15,712,032
Trade receivables
Checks to be deposited		82,706,585		7,466,238
Trade receivables		147,513,113		204,163,653
Trade receivables in foreign currency		3,135,818		857,293
Allowance for doubtful accounts		(674,832)		(674,832)
		232,680,684		211,812,352
Tax credits
VAT credit balance		1,857,005		2,554,829
Turnover tax withholdings		2,228,015		1,596,196
Freely-available income tax credit		280,549		-
		4,365,569		4,151,025
Other receivables
Insurance to be accrued		151,051		224,159
Loans and advances to personnel		352,619		317,480
Claims receivable		1,041,364		-
Other		397,900		161,454
		1,942,934		703,093
Inventories
Manufactured products		111,364,827		40,408,609
Raw material		139,046,095		120,489,999
Subtotal		250,410,922		160,898,608
Raw material in transit		1,697,619		18,780,453
Prepayments to vendors in Argentine pesos		5,326,087		2,168,939
Prepayments to vendors in foreign currency		2,754,713		7,949,524
Allowance for impairment in value and obsolescence of inventories		(13,169,183)		(12,079,622)
		247,020,158		177,717,902

		12/31/2008		12/31/2007
NONCURRENT ASSETS
Tax credits
VAT credit balance		5,349,914		4,475,227
Minimum presumed income tax assets		3,532,562		2,399,122
Income tax withholding		132,734		590,735
Freely - available income tax credit		1,428,836		1,025,701
Turnover tax withholdings		-		708,208
Export reimbursements in Argentine pesos		1,814,968		1,818,907
Export reimbursements in foreign currency		433,942		-
Promotional benefits receivable		1,229,537		1,229,537
Allowance for impairment in value of tax credits		(3,584,351)		(3,172,052)
Other tax credits		160,377		223,079
		10,498,519		9,298,464
Other receivables
Receivables from related companies - Note 3		614,244		143,735
		614,244		143,735
CURRENT LIABILITIES
Trade payables
Local vendors		104,226,807		147,172,521
Vendors in foreign currency		88,526,197		85,052,124
		192,753,004		232,224,645
Salaries, payroll taxes and taxes payable
Salaries and payroll taxes		5,507,477		4,112,741
Vacation and annual statutory bonus accruals		2,795,434		1,690,618
Income tax accrual		344,377		261,288
Minimum presumed income tax payable		927,052		449,646
Health and safety assessment		861,490		664,430
Turnover tax payable		2,311,804		784,707
Withholdings payable		1,115,036		767,874
Other taxes payable		7,763,824		4,860,225
		21,626,494		13,591,529
Loans
Financial loans in Argentine pesos		143,473,948		35,373,534
Financial loans in foreign currency		7,606,075		1,496,741
		151,080,023		36,870,275
Customer advances
In Argentine pesos		10,552,560		572,619
		10,552,560		572,619
Other liabilities
Directors' fees accrual		-		4,076,281
Royalties payable		2,364,124		1,850,454
Other		582,561		298,653
		2,946,685		6,225,388

		12/31/2008		12/31/2007
NONCURRENT LIABILITIES
Loans
Financial loans in foreign currency		2,947,978		4,032,579
		2,947,978		4,032,579
Other liabilities
Deferred income tax liabilities (1)		244,748		734,950
		244,748		734,950

1. As of December 31, 2008 and 2007, respectively, net of 2,067,655 and 902,548, respectively, related to the allowance for impairment in value of the deferred income tax asset.

		Income / (Loss)
		12/31/2008		12/31/2007
Net sales
Net sales (including VAT benefits amounting to 178,751,243 and 133,248,392, respectively)		1,060,538,199		818,684,120
Revenues		1,204,039		1,056,999
		1,061,742,238		819,741,119

1. INFORMATION ON RELATED COMPANIES

Receivables from/payables to related companies as of December 31, 2008 and for the year then ended, are as follows:

	12/31/2008		12/31/2007
Other receivables (Noncurrent)
IL TEVERE S.A. (1)	614,244		143,735
Total	614,244		143,735

• • 1. Parent Company.

• INFORMATION BY BUSINESS SEGMENT

The Company and its subsidiaries operate primarily in the automotive and residential air quality and temperature control business segments. The valuation methods applicable to prepare the information by business segment are described in note 1 to these financial statements.

		Air conditioning
Income		Automotive		Residential		Other		Total
Sales (net of imputed interest)		530,893,953		350,893,003		1,204,039		882,990,995
Tax benefit		104,550,757		74,200,486		-		178,751,243
Total		635,444,710		425,093,489		1,204,039		1,061,742,238
BALANCE-SHEET INFORMATION
Allocated assets		275,582,862		302,357,133		10,355,413		588,295,408
Property and equipment additions		15,337,142		17,845,815		-		33,182,957

EXHIBIT H

INFORMATION REQUIRED UNDER SECTION 64(b), FIRST PARAGRAPH, LAW No. 19,550

CONSOLIDATED FOR FISCAL YEAR ENDED DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

		12/31/2008										12/31/2007
Accounts		Operating costs		Service costs		Administrative expenses		Selling expenses		Total		Total
Salaries & wages		84,190,685		-		8,983,590		936,952		94,111,227		54,154,378
Contributions and employee benefits		20,561,603		-		3,917,837		267,985		24,747,425		13,234,670
Insurance		2,449,294		-		149,504		8,450		2,607,248		2,054,326
Fees		9,238,066		-		4,044,773		95,436		13,378,275		9,901,763
Taxes, rates and assessments		14,464,928		-		1,995,903		17,534,618		33,995,449		18,069,493
Maintenance		2,581,730		-		978,495		439,423		3,999,648		3,081,165
Property and equipment depreciation		5,310,666		170,632		1,038,041		26,755		6,546,094		4,843,614
Intangible assets amortization		-		-		102,781		-		102,781		214,487
Leases and rentals		7,974,075		-		60,610		-		8,034,685		1,891,438
Customs clearing and dispatch expenses		9,130,834		-		-		-		9,130,834		8,949,892
Transportation, shipping and handling		66,320,518		-		-		19,206,976		85,527,494		54,947,968
Royalties		-		-		-		3,186,573		3,186,573		4,156,925
Bank expenses		-		-		6,174,506		-		6,174,506		4,428,543
Traveling expenses		26,981		-		658,425		-		685,406		530,629
Cleaning and security expenses		3,187,548		-		336,529		15,279		3,539,356		1,560,436
Other		3,825,715		-		2,686,990		236,207		6,748,912		5,757,551
Total as of 12-31-2008		229,262,643		170,632		31,127,984		41,954,654		302,515,913
Total as of 12-31-2007		134,775,863		291,576		27,696,331		25,013,508				187,777,278

BALANCE SHEET AS OF DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

	12/31/2008		12/31/2007
ASSETS
CURRENT ASSETS
Cash - Note 2	5,633,184		4,693,077
Trade receivables - Note 2	42,972,618		70,407,293
Tax credits - Note 2	3,074,352		3,063,842
Other receivables - Note 2	132,788,984		29,477,618
Inventories - Note 2	143,220,012		134,759,662
Total current assets	327,689,150		242,401,492
NONCURRENT ASSETS
Long-term investments in companies - Exhibit C	63,728,106		50,705,027
Tax credits - Note 2	2,880,848		2,900,839
Other receivables - Note 2	614,244		143,735
Property and equipment	43,035,706		37,778,621
Intangible assets	209,851		312,632
Subtotal noncurrent assets	110,468,755		91,840,854
Goodwill	511,023		495,080
Total noncurrent assets	110,979,778		92,335,934
Total assets	438,668,928		334,737,426
LIABILITIES
CURRENT LIABILITIES
Trade payables - Note 2	61,881,602		103,929,524
Loans - Note 2	144,924,868		36,870,275
Salaries, payroll taxes and taxes payable - Note 2	8,892,899		6,309,298
Customer advances - Note 2	10,053,093		-
Other liabilities - Note 2	2,244,787		5,111,674
Total current liabilities	227,997,249		152,220,771
NONCURRENT LIABILITIES
Loans - Note 2	2,947,978		4,032,579
Other liabilities - Note 2	1,600,000		800,000
Total noncurrent liabilities	4,547,978		4,832,579
Total liabilities	232,545,227		157,053,350
SHAREHOLDERS’ EQUITY (As per respective statement)	206,123,701		177,684,076
Total Liabilities and Shareholders’ equity	438,668,928		334,737,426

The accompanying notes 1 through 15, and Exhibit C are an integral part of these financial statements.

STATEMENT OF INCOME FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR YEAR

(Figures stated in Argentine pesos - Note 1.b)

	12/31/2008		12/31/2007
Net sales (including VAT benefits amounting to 104,550,757 and 80,947,569, respectively) - Note 4(e)	622,354,223		508,184,950
Cost of goods sold	(548,884,224)		(424,241,803)
Gross income	73,469,999		83,943,147
Administrative expenses	(24,293,307)		(22,613,487)
Selling expenses	(23,494,864)		(14,392,095)
Income from long-term investments - Note 2	12,432,636		11,228,836
Financial income (expense) and holding gains (losses) from assets
Interest	3,820,908		1,651,255
Foreign exchange difference	(61,866)		107,379
Inventories holding gains	11,207,693		7,469,710
Allowance for doubtful accounts	-		174,203
Allowance for impairment in value and obsolescence of inventories	34,207		1,702,956
Allowance for impairment in value of tax credits	(412,299)		(103,075)
Financial income (expense) and holding gains (losses) from liabilities
Interest	(23,815,733)		(5,253,750)
Foreign exchange difference	(1,548,398)		(5,716,722)
Other income, net - Note 2	1,100,649		1,071,270
Net income for the year	28,439,625		59,269,447
EARNINGS PER SHARE - NOTE 10
BASIC - COMMON STOCK	0.7110		1.4817
DILUTED - COMMON STOCK	0.7110		1.4817

The accompanying notes 1 through 15, and Exhibit C are an integral part of these financial statements.

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

		12/31/2008
		Owners' contributions
Breakdown		Capital stock		Adjustment to capital stock		Premium on capital stock		Subtotal
Balances at beginning of year		2,000,000		4,155,936		5,243,562		11,399,498
Distribution of cash dividends, approved by the Shareholders’ Meeting No. 63 held on April 30, 2007
Increase in capital approved by the Shareholders’ Meeting No. 66 held on September 04, 2008.		2,000,000		(2,000,000)				-
Net income for the year
Balances as of December 31, 2008		4,000,000		2,155,936		5,243,562		11,399,498
Balances as of December 31, 2007		2,000,000		4,155,936		5,243,562		11,399,498

		12/31/2008										12/31/2007
		Retained earnings
		Appropriated retained earnings
Breakdown		Legal reserve		Other reserves (*)		Total		Unappropriated retained earnings		Total		Total
Balances at beginning of year		2,280,143		73,708		2,353,851		163,930,727		177,684,076		122,414,629
Distribution of cash dividends, approved by the Shareholders’ Meeting No. 63 held on April 30, 2007										-		(4,000,000)
Increase in capital approved by the Shareholders’ Meeting No. 66 held on September 04, 2008.										-		-
Net income for the year								28,439,625		28,439,625		59,269,447
Balances as of December 31, 2008		2,280,143		73,708		2,353,851		192,370,352		206,123,701
Balances as of December 31, 2007		2,280,143		73,708		2,353,851		163,930,727				177,684,076

(*) See Note 3.b).

The accompanying notes 1 through 15, and Exhibit C are an integral part of these financial statements.

STATEMENT OF CASH FLOWS (1)

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

	12/31/2008		12/31/2007
CHANGES IN CASH
Cash at beginning of year	4,693,077		9,009,116
Cash as of year-end	5,633,184		4,693,077
Increase (Decrease) in cash, net	940,107		(4,316,039)
CAUSES OF CHANGES IN CASH
OPERATING ACTIVITIES
Net income for the year	28,439,625		59,269,447
Interest and foreign exchange difference accrued on debt	20,750,401		3,711,479
Adjustments to arrive at net cash flows (used in) operating activities
P&E depreciation and intangible assets amortization	3,780,553		2,986,683
(Decrease) in allowance for doubtful accounts, net	-		(174,023)
(Decrease) in the allowance for impairment in value and obsolescence of inventories	(34,207)		(1,702,956)
Increase in the allowance for impairment in value of tax credits	412,299		103,075
Income from long-term investments	12,432,636		(11,228,836)
Changes in operating assets and liabilities
Decrease (Increase) in trade receivables	27,434,675		(24,511,725)
(Increase) in inventories	(8,426,143)		(58,616,113)
(Increase) in other receivables	(105,839,002)		(21,099,662)
(Decrease) Increase in trade payables	(42,047,922)		52,594,358
Increase (Decrease) in customer prepayments	10,053,093		(1,586,540)
Increase (Decrease) in salaries, payroll taxes and other taxes (net of tax credits)	2,180,783		(2,559,788)
(Decrease) Increase in other liabilities	(2,067,489)		2,614,035
Interest paid	(19,880,658)		(2,901,375)
NET CASH FLOWS (USED IN) OPERATING ACTIVITIES	(97,676,628)		(3,101,941)

(1) Cash comprises cash on hand and cash in banks

The accompanying notes 1 through 15, and Exhibit C are an integral part of these financial statements.

STATEMENT OF CASH FLOWS (1)

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008,

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

	12/31/2008		12/31/2007
INVESTING ACTIVITIES
Net P&E acquisitions	(12,123,957)		(9,723,372)
Long term investments acquisitions (includes goodwill)	(15,942)		-
P&E sales	5,246,227		-
Contribution made to related company	589,842		-
Investment in intangible assets	-		(492,498)
NET CASH FLOWS (USED IN) INVESTING ACTIVITIES	(7,483,514)		(10,215,870)
FINANCING ACTIVITIES
Loan repayment	(226,034,523)		(91,198,228)
Inflows from loans	332,134,772		104,200,000
Dividends paid	-		(4,000,000)
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES	106,100,249		9,001,772
INCREASE (DECREASE) IN CASH, NET	940,107		(4,316,039)

• 1. Cash comprises cash on hand and cash in banks

The accompanying notes 1 through 15, and Exhibit C are an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

1. SIGNIFICANT ACCOUNTING POLICIES
2. Accounting standards applied to financial statements preparation and presentation:

These financial statements have been prepared in conformity with professional accounting standards effective in the Province of Tierra del Fuego, Antarctica and South Atlantic Islands and the applicable CNV (Argentine securities commission) regulations.

The CNV issued General Resolutions No. 485, 487 and 494, which adopted (with certain amendments) and applied, for full fiscal years or interim periods related to the fiscal years beginning as from January 1, 2006, FACPCE (Argentine Federation of Professional Councils in Economic Sciences) Technical Resolutions Nos. 6, 8, 9, 11, 14, 16, 17, 18, 21, 22 and 23 and Interpretations Nos. 1 through 4, including the amendments introduced through April 1, 2005, through FACPCE Resolution No. 312/05, as amended.

For valuation matters not contemplated in general or specific accounting standards and that cannot be resolved by using the general framework of accounting standards, effective International Financial Reporting Standards and Interpretations approved by the International Accounting Standards Board shall be also applied in the year when such supplementary standards are applicable.

The difference between the adjusted book value of P&E and its tax base was considered to be a permanent difference. The total taxation effect of the difference resulting from restating the P&E items and intangible assets into constant pesos as of these financial statements’ closing is 270,454. Had such difference been recognized as temporary, the Company’s shareholders’ equity at the beginning of the year would have decreased by 297,937, and the effect on income for the year ended December 31, 2008, would have been a 27,483 decrease in the income tax charge.

Also, had the abovementioned temporary difference been recognized, the impact on the deferred income tax charge for the coming fiscal years would be reduced as follows:

Terms and amounts
Fiscal year		Amount
2009		20,671
2010		11,848
2011 and forward		237,935
Total		270,454

Preparing the stand-alone financial statements in accordance with current professional accounting standards requires Company Management to consider the estimates and assumptions that may impact the assets and liabilities amounts reported, and the disclosure of contingent liabilities and assets as of the date of such financial statements, as well as the revenues and expenses for each year. Consequently, the final results may differ from such estimates.

• 1. Restatement into constant pesos:

Professional accounting standards establish that the financial statements should be stated in constant pesos. In a monetary stability context, the nominal currency is used as constant currency, but, in an inflationary or deflationary context, the financial statements should be stated in pesos reflecting the purchasing power as of their closing date by recognizing the changes in the domestic WPI published by the INDEC (Argentine Institute of Statistics and Censuses), in accordance with the restatement method set by FACPCE Technical Resolution No. 6.

The Company’s financial statements recognize the changes in the purchasing power of the peso through February 28, 2003, in accordance with Presidential Decree No. 664/2003 and CNV General Resolution No. 441. Under professional accounting standards the restatement method established in Technical Resolution No. 6 should have been discontinued only as from October 1, 2003. The effects of failing to recognize variations in the currency purchasing power until such date were immaterial with respect to the accompanying financial statements.

• 1. Valuation methods:

The main valuation methods used to prepare these financial statements are:

• Cash:
• • In Argentine pesos: at nominal value.
  • In foreign currency: converted at the applicable exchange rate effective as of each year-end for the settlement of such transactions. Foreign exchange differences were charged to income for each year.
• Receivables and payables:
• • In Argentine pesos: the amounts for transactions with independent parties and for commercial transactions with related parties were valued at the present value of the cash flows they will generate, discounted (only if effects are significant) using imputed, explicit or market rates, as the case may be, effective at the time of each transaction. The amounts for noncommercial transactions with related parties were valued at nominal value, considering interest accrued as of each fiscal year-end, as applicable.
  • In foreign currency: the current values in foreign currency were calculated in accordance with the parameters stated in the paragraph above, provided their effects were significant. These amounts were converted into Argentine pesos at the exchange rate effective as of the year-end for the settlement of the related transactions. Foreign exchange differences were charged to income for each year.

Credit risk: in its usual course of business the Company grants credit to customers, including car manufacturers, that represent about 99% of the Company’s total sales revenues. The Company continuously performs credit assessments of its customers’ financial capacity in order to reduce the potential risk of significant credit losses.

The maximum credit risk does not differ significantly from the receivable amounts disclosed in the Balance Sheet. The Company has not endorsed or discounted any negotiable instruments during the years ended December 31, 2008, and 2007

• • • Labor cost liabilities: labor cost liabilities accrue in the periods in which employees have rendered the service that gave rise to such consideration.
  • Deferred income tax credit: at nominal value, net of the respective allowance for impairment in value of tax credits.
  • Financial instruments: the Company has not used derivative financial instruments during the year ended December 31, 2008, and 2007. Receivables and payables related to usual business and financial transactions are valued as stated in the previous paragraphs and, in the opinion of the Company’s Management, such valuation does not differ from their current value.
• Inventories:
• • Raw materials (including those in transit) were valued at replacement cost at end of each year, considering the cash prices for usual purchase amounts. In addition, imported goods were valued at replacement cost in foreign currency translated at the foreign exchange rate effective at the end of each year for the settlement of such transactions.
  • The products manufactured were valued at cash reproduction cost at the end of each year limited by the net realization value thereof.
  • Prepayments to suppliers are valued according to the method described for payables and receivables.
  • The value of inventories determined as of each year-end and after considering the allowance for impairment in value and obsolescence, does not exceed the recoverable value thereof as of the respective dates.
• Long-term investments in subsidiaries:

Interclima S.A.: At equity value as established by FACPCE Technical Resolution No. 21, which was calculated based on Interclima S.A.’s financial statements as of December 31, 2008, and 2007, which include an audit report dated March 04, 2009, and March 05, 2008, respectively, containing except-for qualifications related to discrepancies in the valuation of income tax accrual and the income tax charge to income (loss) and a qualification for uncertainty about the recoverability of certain tax credits. Furthermore, the report dated March 05, 2008, includes a qualification for scope limitation related to subsidiary Capdo S.A.’s investment. After the issuance of the financial statements and the auditor’s report, the auditors performed audit procedures on CAPDO S.A.’s financial statements, and no significant adjustments were made.

In addition, upon determining the value by the equity method, an adjustment to the subsidiary’s book value was taken into account to disclose the effects of not booking certain income tax payables (see “Income tax – Situation in Interclima S.A.”).

The accounting methods followed by Interclima S.A. do not differ from those applied by the Company.

Capdo S.A.: Determined at equity value, as established by FACPCE Technical Resolution No. 21, which was calculated based on the assets and liabilities computed at their current values as of the acquisition date, and considering the accrued income (loss) from that date through year-end of Capdo S.A.’s financial statements as of December 31, 2008, and 2007, which include an unqualified auditor’s report dated March 02, 2009, and March 3, 2008, respectively. The accounting methods as of the respective dates followed by Capdo S.A. do not differ from those applied by the Company.

IATEC S.A.: Determined at equity value, as established by FACPCE Technical Resolution No. 21, which was calculated based on the assets and liabilities computed as of the acquisition date, and considering the accrued income (loss) from that date through year-end of IATEC S.A.’s financial statements as of December 31, 2008, which include an unqualified auditor’s report dated March 04, 2009. The accounting methods followed by IATEC S.A. do not differ from those applied by the Company.

Incomer (loss) from the interest in the subsidiaries is disclosed in the statement of income under “Income (loss) from long-term investments”

The Company has not learned of any subsequent events modifying the equity, financial or income-related conditions of its subsidiaries as of the respective dates with a significant present or future impact on the valuation of investments.

The breakdown of investments is included in Exhibit C.

The value of investments is checked for any impairment in value whenever there is any indication that the book value exceeds their recoverable value (the net realizable value and the use value, whichever higher).

• P&E:
• • P&E was valued at original cost restated as mentioned in note 1(b), net of accumulated depreciation until the end of each year.
  • P&E depreciation is calculated by the straight-line method, applying annual rates sufficient to extinguish P&E by the end of their estimated useful lives.
  • The valuation of P&E items is checked for impairment in value whenever there is any indication that their book value could exceed their recoverable value (the net realizable value and the use value, whichever higher). The losses from impairment in value and related recoveries are recognized in the statement of income under “Financial income (expense) and holding gains (losses)”.
  • The value of P&E, at cash-generating-unit level, does not exceed the recoverable value thereof as of the respective dates.
• Intangible assets:
• • Intangible assets have been valued at original cost restated as mentioned in note 1(b), net of accumulated depreciation until the end of each year.
  • Amortization is calculated following the straight-line method.
  • The valuation of intangible assets is checked to verify whether their value was impaired when there is any indication that their book value could exceed their recoverable value. The losses from impairment in value and related recoveries are recognized in the statement of income under “Financial income (expense) and holding gains (losses)”.
  • The book value of intangible assets, at cash-generating-unit level, does not exceed the recoverable value thereof as of the respective dates.
  • The licenses to sell products acquired by the Company have been amortized by the straight-line method over three years counted as from their initial economic use, taking into account their capacity to generate earnings in the future.
• Goodwill:

Goodwill resulted from the purchase of CAPDO S.A. and IATEC S.A. shares, respectively. The Company considered that the intangible resulting from the purchase of CAPDO S.A. shares has an indefinite useful life, since it is not subject to a contractual or legal utilization term, and it is believed that it will generate cash flows in the future within an indefinite term. The Company also considered that the intangible asset resulting from the purchase of IATEC S.A. shares has a definite useful life and will generate cash through 2023. Amortization is calculated using the straight-line method through that year.

Goodwill is reviewed to verify whether it has suffered any impairment in value, every time the financial statements are prepared. The losses from impairment in value and related recoveries are recognized in the statement of income under “Financial income (expense) and holding gains (losses)”.

Goodwill does not exceed its recoverable value as of the respective dates.

• Allowances and provisions:
• • Allowances:
  • For doubtful accounts: This allowance was set to reduce the value of trade receivables to their estimated recoverable value. An individual analysis was made of the trade receivables to determine this allowance.
  • For impairment in value and obsolescence of inventories: This allowance was set to reduce the value of certain stock of finished products and other obsolete and slow-moving inventories to their probable recoverable value, determined by making an individual analysis thereof as of each year-end.
  • For impairment in value of tax credits: This allowance was set to reduce the book value of such credits to their estimated recoverable value as of year-end. In determining this allowance, Company Management’s estimates regarding the probable use thereof was taken into consideration.
  • For impairment in value of deferred income tax credit: this allowance was set to reduce the value of such assets to their estimated recoverable value as of each year-end, determined by using Company Management’s estimates of future taxable income.
• Shareholders’ equity accounts:

They were restated as mentioned in note 1(b), except for the “Capital stock” account, which remained at original value. The adjustment deriving from the restatement thereof is disclosed under the “Adjustments to capital stock” account.

• Statement-of-income accounts:
• • At nominal value, except for the following cases:

• Income (loss) from long-term investments resulting from the equity interest in CAPDO S.A. was calculated by the equity method applying the Company’s equity interest percentage to this company’s income (loss) for the same period as for the Company, deducting unrealized intercompany profits and losses. Income (loss) from long-term investments resulting from the equity interest in ITATEC S.A. was calculated by the equity method applying the Company’s equity interest percentage to this company’s income (loss) as from the date of acquisition by the Company and through December 31, 2008.

• The depreciation of P&E and the amortization of intangible assets were calculated based on the value of the respective assets after being restated as described in note 1(b).
• The cost of goods sold was determined based on the replacement costs for each month. Holding gains (losses) are disclosed in the account “Financial income (expense) and holding gains (losses) from assets”.
• The account “Financial income (expense) and holding gains (losses)” includes: (a) nominal income and financial costs, (b) inventories holding gains (losses), (c) foreign exchange differences (d) charges and reversals related to impairments in value of assets and (e) the effect of discounted values of payables and receivables.
• • The Company has segregated the imputed financial components accrued during each year provided that they were significant.

• Income tax, minimum presumed income tax and deferred income tax assets:

• • Status of MIRGOR S.A.C.I.F.I.A.

The Company assesses the income tax charge by the deferred income tax method, which consists in recognizing (as asset or liability) the tax effect of temporary differences between the book and tax valuation of assets and liabilities, and the subsequent charge to income for the years in which such assets or liabilities are reversed, and considering the possibility of using net operating losses in the future.

Temporary differences determine deferred income tax assets or liabilities when their future reversal decreases or increases the taxes assessed, respectively.

Should the Company carry NOLs deductible from future income tax or should the deferred income tax resulting from temporary differences be an asset, such receivable would be recognized as long as their use is considered to be probable.

Minimum presumed income tax is supplementary to income tax: while the latter is levied on taxable income for the year, minimum presumed income tax is a minimum levy determined by applying the current 1% rate on the potential income of certain assets. Therefore, the Company’s tax obligations shall be the higher of these two taxes. However, should minimum presumed income tax exceed income tax in any given fiscal year, such excess may be computed as payment on account of any excess of income tax over minimum presumed income tax occurring in any of the ten subsequent fiscal years.

As of December 31, 2008, the Company has NOLs totaling ARS 5,505,073 (which are usable through December 31, 2013). As of December 31, 2008, the deferred income tax credit totaled 2,607,655, which was covered by an allowance that was assessed based on the Company's estimate of future taxable income, as mentioned in Note 4.

The changes in deferred income tax credit and the charge to income for the fiscal years ended December 31, 2008, and 2007, respectively, were as follows:

	12/31/2008				12/31/2007
	Deferred tax credit		Income tax - Income / (loss)		Deferred tax credit		Income tax - Income / (loss)
Balance at beginning of year, less provision	-		-		-		-
Increase / Consumption of NOLs	1,730,105		1,730,105		140,962		140,962
(Decrease) in temporary differences	(24,998)		(24,998)		(31,986)		(31,986)
NOLs prescription	-		-		(1,866,381)		(1,866,381)
Change in the allowance for impairment in value of deferred assets	(1,705,107)		(1,705.107)		1,757,405		1,757,405
Balance as of year-end, less provision	-		-		-		-

The reconciliation between the charge to income for income tax and the amount resulting from applying the 35% rate established by effective tax regulations to book income for the years is:

	12/31/2008		12/31/2007
Net income for the year before income tax	28,439,625		59,269,447
Permanent differences (*)	(33,311,359)		(59,580,807)
Net (loss) income from permanent differences	(4,871,734)		(311,360)
Tax rate	35%		35%
Tax assessed	1,705,107		108,976
NOLs prescription	-		(1,866,381)
Change in the allowance for impairment in value of deferred assets	(1,705,107)		1,757,405
Income-tax book change	-		-

(*) It includes the income exempt under the industrial promotion system effective for the Province of Tierra del
Fuego.

The items included in the deferred income tax credits as of December 31, 2008, and 2007, are shown in detail below:

Asset temporary differences	12/31/2008		12/31/2007
Non-deductible allowances	298,315		351,341
Other	357,566		329,538
NOLs	1,951,774		221,669
Deferred income tax credit as of year-end before provision	2,607,655		902,548
Allowance for impairment in value of deferred income tax credit	(2,607,655)		(902,548)
Deferred income tax credit as of year-end less provision	-		-

The minimum presumed income tax amount for the year ended December 31, 2008, exceeded income tax and amounted to 941,220. This amount was booked under the noncurrent tax credits account in the balance sheet. Accumulated minimum presumed income tax credits as of December 31, 2008, totals 3,214,483. Company’s Management considers that, according to the future business plan, this amount is recoverable.

• • • Situation in the subsidiary Interclima S.A.

In view of the economic crisis resulting from abandoning the currency board, the Management of the subsidiary considered that the conditions required to apply the tax-purposes adjustment for inflation were present. Consequently, it prepared and filed the income tax return for the year ended December 31, 2002, based on adjusted amounts, using the coefficients determined according to domestic WPI variations, which led to the assessment of NOLs amounting to about 5,200,000.

The Management of the subsidiary Interclima S.A., seeking appropriate jurisdictional protection, filed before the courts a request for an injunction because it believed that section 39, Law No. 24,073 dated 1992, which had set the index applicable to the tax adjustment for inflation at one, should be abrogated due to the high inflation that affected tax year 2002 and because it had been introduced to legislation in an economic context differing completely from year 2002.

On July 17, 2003, the judge hearing the case granted the injunction requested by the subsidiary and instructed the Argentine Government to refrain from filing any administrative or judicial proceeding, making any claim, demand or accusation and imposing penalties based on the alleged prohibition to apply the adjustment for inflation.

On October 15, 2004, the trial court judge hearing on the constitutional protection action filed by the subsidiary ruled that the AFIP should accept the legitimacy of the adjustment for inflation provided for in Income Tax Law No. 20,628 Title VI and resolved to declare the unconstitutionality of section 4, Law No. 25,561, amending sections 7 and 10, Law No. 23,928, and section 5, Presidential Decree 214/02, and section 39, Law No. 24,073, since they disregard sections 14 and 17 of the Argentine Constitution, and it has ordered the AFIP to compute the adjustment for inflation in the tax returns for the fiscal year ended December 31, 2002 (filed on May 8, 2003). Argentine tax authorities appealed against such ruling. The Court of Appeals dismissed such appeal. Consequently, the AFIP filed an extraordinary appeal that was denied by the Court of Appeals. The Argentine Attorney General held in a recent opinion that the judgment entered by the Court of Appeals of Comodoro Rivadavia, which had dismissed the appeal filed with the Argentine Supreme Court by the AFIP, should be reviewed considering the first and second instance judgment in favor of Interclima.

Considering the denial mentioned in the preceding paragraph, the AFIP filed a remedy of complaint for appeal denied with the Argentine Supreme Court. Such remedy was granted by the abovementioned court towards the end of the past year. Consequently, the proceedings were remitted back to the Court of Appeals involved for it to issue a new ruling. On September 9, 2008, the Court of Appeals decided to confirm the judgment ruling in favor of Interclima S.A.

Had the tax adjustment for inflation not been made, Interclima S.A. would have assessed income tax amounting to about 384,342 for December 31, 2002 (after computing prior-period NOLs), to 854,892 for the fiscal year ended December 31, 2003, to 1,279,585 for the fiscal year ended December 31, 2004, and 39,793 for fiscal year ended December 31, 2005, plus interest accrued amounting to about 2,696,971 calculated through December 31, 2008. The abovementioned amounts total 5,255,583 as of December 31, 2008.

1. BREAKDOWN OF MAIN ACCOUNTS

	12/31/2008		12/31/2007
CURRENT ASSETS
Cash
Cash on hand in Argentine pesos	12,952		13,207
Cash on hand in foreign currency	64,981		20,650
Cash in banks in Argentine pesos	5,140,601		1,909,004
Cash in banks in foreign currency	414,650		2,750,216
	5,633,184		4,693,077
Trade receivables
Check to be deposited	12,700,796		6,217
Trade receivables in Argentine pesos	30,927,148		70,718,128
Trade receivables in foreign currency	19,506		357,780
Allowance for doubtful accounts	(674,832)		(674,832)
	42,972,618		70,407,293
Tax credits
VAT credit balance	1,012,193		1,997,001
Turnover tax withholdings	1,781,610		1,066,841
Freely-available income tax credit	280,549		-
	3,074,352		3,063,842
Other receivables
Insurance to be accrued	110,943		116,276
Loans and advances to personnel	301,204		317,480
Receivables from related companies - Note 7	131,590,111		28,875,942
Claims receivable	444,096		-
Other	342,630		167,920
	132,788,984		29,477,618
Inventories
Manufactured products	57,208,941		36,404,185
Raw material	85,921,591		80,286,046
Subtotal	143,130,532		116,690,231
Raw material in transit	1,644,322		18,689,338
Prepayments to vendors in Argentine pesos	4,908,780		1,628,281
Prepayments to foreign suppliers	2,604,573		6,854,214
Allowance for impairment in value and obsolescence of inventories	(9,068,193)		(9,102,402)
	143,220,012		134,759,662
NONCURRENT ASSETS
Tax credits
Turnover tax withholdings	-			500,000
VAT credit balance - Note 4	93,481			93,481
Minimum presumed income tax assets - Note 4	3,214,483			2,273,263
Promotional benefits receivable - Note 4	1,229,537			1,229,537
Export reimbursements in Argentine pesos - Note 4	1,023,617			1,016,396
Deferred income tax asset	2,607,655			902,548
Allowance for impairment in value of deferred income tax asset	(2,607,655)			(902,548)
Allowance for impairment in value of tax credits	(2,780,956)			(2,368,657)
Other	100,686			156,819
	2,880,848			2,900,839

		12/31/2008			12/31/2007
Other receivables
Receivables from related companies - Note 7	614,244					143,735
	614,244					143,735
CURRENT LIABILITIES
Trade payables
Local vendors	13,346,746					24,468,421
Vendors in foreign currency	48,534,856					79,461,103
	61,881,602					103,929,524
Salaries, payroll taxes and taxes payable
Salaries and payroll taxes	2,749,441					3,101,106
Annual statutory bonus and vacation accrual	1,395,320					1,310,449
Health and safety assessment	681,298					524,740
Turnover tax payable	51,745					281,341
Withholdings payable	1,115,038					767,875
Minimum presumed income tax payable	733,955					323,787
Other taxes payable	2,166,102					-
	8,892,899					6,309,298
Loans
Financial loans in Argentine pesos	143,473,948					35,373,534
Financial loans in foreign currency	1,450,920					1,496,741
	144,924,868					36,870,275
Customers prepayments
in Argentine pesos	10,053,093					-
	10,053,093					-
Other liabilities
Royalties payable	2,242,969					1,850,454
Directors’ fees accrual	-					3,260,000
Other	1,818					1,220
	2,244,787					5,111,674

NONCURRENT LIABILITIES
Loans
Financial loans in foreign currency	2,947,978		4,032,579
	2,947,978		4,032,579
Other liabilities
Payables due to related companies – Note 7	1,600,000		800,000
	1,600,000		800,000

	Income (loss)
	12/31/2008		12/31/2007
Income from long-term investments
Interclima S.A.	12,164,224		10,857,137
CAPDO S.A.	269,267		371,699
IATEC S.A.	(855)		-
	12,432,636		11,228,836
Other income, net
Leases and rentals – Note 7	1,200,000		1,200,000
Other	(99,351)		(128,730)
	1,100,649		1,071,270

1. CAPITAL STRUCTURE – SHAREHOLDERS’ EQUITY
2. Capital stock status

The Company’s capital stock consists of 40,000,000 book-entry shares of common stock, 0.10 face value each and it is fully subscribed, paid-in, issued and registered, according to the following breakdown:

Class		Votes		Number
“A”		Entitled to three (3) votes each		10,400,000
“B”		Entitled to three (3) votes each		10,400,000
“C”		Entitled to one (1) vote each		19,200,000
Total				40,000,000

Each Class “A”, Class “B” or Class “C” shares have the same rights to collect dividends.

1. Other reserves – For future dividends

This account includes the decisions made by the Shareholders’ Meetings held on May 24, 1995, May 22, 1998, and April 29, 1999, approving the setting of reserves for future dividends in the amounts of 18,784,406, 7,693,924, and 8,353,403, respectively. The Board of Directors would thus be free to allocate such amounts to cash dividend payments, as deemed appropriate. On July 14, 1995, May 12, 1998, July 12, 1999, December 13, 1999, July 18, 2000, and December 15, 2000, the Board of Directors approved the payment of 9,368,077; 9,342,622; 3,846,962; 3,846,962; 4,176,701; and 4,176,701, respectively.

1. TAX SITUATION OF THE COMPANY: TAX SYSTEM – TAX CREDITS

The Company enjoys the benefits of the Industrial Promotion System provided by Law No. 19,640 as regards the assets and for the activities performed in the Province of Tierra del Fuego. Accordingly, the Company is entitled to certain tax and customs benefits, which through Presidential Decree No. 1,234/2007, were extended through 2023, and include:

1. Income tax: Presidential Decree No. 1,395/94 established, as from September 1, 1994, that 85% of the price paid by customers out of the earnings related to the Province of Tierra del Fuego would be income-tax exempt. Subsequently, under Presidential Decree 615/97, the Argentine Government reinstated certain tax benefits granted by Industrial Promotion Law introducing amendments effective August 1, 1997, that provided that the exemption granted to such activities would amount to 100% as established by Law No. 19,640, sections 1 and 4(a).
2. Value-added tax: Company sales in the Province of Tierra del Fuego are exempt from this tax, while sales made on the Argentine mainland are subject to a 21% VAT. Customers are charged for this tax. Presidential Decree No. 1,395/94 provided that presumed VAT credits computable as from September 1, 1994, would be equivalent to the amount resulting from applying the VAT rate on 61.11% of the net sales price to customers so that the tax obligation was reduced to 8% thereof as from April 1995. By issuing Presidential Decree No. 615/97 the government restored certain tax benefits granted under Industrial Promotion Law and provided that the presumed VAT credit computable as from August 1, 1997, is equivalent to the one resulting from applying 100% on the VAT rate at the net sale price to customers on the Argentine mainland.
3. Tax credit certificates: Under Law No. 23,697, the Federal Government suspended the tax benefits during 1989 and 1990. Thus, the Company made payments on account of capital tax and VAT which, under such law, would be reimbursed to the Company through Debt Consolidation Bonds.

DGI (Argentine tax bureau) General Resolution No. 3,838/94 regulated the manner in which the abovementioned bonds would be obtained. Based on this, the Company booked credits in the amount of 1,511,788 (historical value).

On September 17, 1996, the DGI advised the Company of the recognition of a larger amount in favor of the Company amounting to 2,194,142 (un-restated historical value) as a result of the application of the adjustment rate for the prior month used by the Company in the original filing. In addition, the Company booked a 148,853 (un-restated historical value) credit related to the reimbursement of VAT to be requested by other procedures.

The Ministry of Economy and Public Services and Works established through Resolution No. 580/96 that the credits against the Federal Government emerging from the suspension of the industrial promotion established in Law No. 23,697 and prior to April 1, 1991, will be settled through the delivery of Debt Consolidation Bonds.

On May 19, 1997, the Company was advised that the DGI provisionally recognized the amount indicated above.

As a result thereof, the Company booked the credit at the listed price effective as of each fiscal year-end which, as of December 31, 2008, and 2007, amounted to 1,229,537. An accrual has been booked for the full amount thereof.

1. Customs duties and statistical rate: Not paid by the Company for all the inputs imported and used in its operations in Tierra del Fuego under Law No. 19,640.
2. Reimbursements in Argentine pesos: Under Law No. 19,640, exports from the continent to Tierra del Fuego have the benefit of these reimbursements.

Owing to the delay in payment by the Federal Government, the Company filed collection requests with Customs Authorities. Although such requests had unfavorable resolutions at administrative stages (the proceedings are currently in the Customs Legal and Technical Department awaiting the issuance of the respective formal opinions), the Company’s legal counsel and Management understand that the transactions were carried out within the regulatory framework of Law No. 19,640 and, consequently, it would be entitled to collect the rebates that the regulation then-effective barred.

Following with the comments included in the previous points, the benefits accrued during the years ended December 31, 2008, and 2007, amounted to:

	Year ended December 31,
	2008		2007
Value-added tax	104,550,757		80,947,569
Custom duties and statistical rate (estimated)	59,179,429		54,616,239

In addition, and considering the tax system to which the Company is subject, as indicated above, as of December 31, 2008, the Company carried minimum presumed income tax credits in the amount of about 3,214,483, and the Company and its subsidiary (Interclima S.A.) carried VAT credits and other tax credits related to income tax and minimum presumed income tax in the amount of about 7,800,557 disclosed in noncurrent assets. The recoverability of such credits totaling 11,015,040 in the consolidated financial statements and 3,214,483 in the Company’s stand-alone financial statement depends, among other issues, on whether the Companies are able to generate income subject to tax during the coming years. In this respect, the Company’s Management understands that, based on its future business plan, such credits will be recoverable.

1. MAJOR CUSTOMERS

The Company’s sale distribution to its customers (measured in terms of percentages) for the years ended December 31, 2008, and 2007 was:

	12/31/2008		12/31/2007
Peugeot Citröen Argentina S.A	34%		29%
Volkswagen Argentina S.A.	27%		29%
Renault Argentina S.A.	20%		21%
General Motors Argentina	12%		15%
Mercedes Benz	6%		5%
Other	1%		1%

1. PARENT COMPANY

Parent company: II Tevere S.A.

Registered office: Paseo Colón 221, Piso 2 – Buenos Aires, Argentina

Main business: holding company.

Voting rights: 76,47%

Shareholding percentage: 52%

1. INFORMATION ON RELATED PARTIES

For the fiscal years ended December 31, 2008, and 2007, the Company was engaged in transactions with its subsidiaries, related and parent. Receivables and payables are:

	12/31/2008		12/31/2007
CURRENT
Other receivables
INTERCLIMA S.A. (1)	131,590,111		28,875,942
Total	131,590,111		28,875,942
NONCURRENT
Other receivables
IL TEVERE S.A. (2)	614,244		143,735
Total	614,244		143,735
Other liabilities
CAPDO S.A. (1)	1,600,000		800,000
Total	1,600,000		800,000

The transactions carried out with its subsidiaries, the parent company and the related company for the years ended December 31, 2008, and 2007, are as follows:

	12/31/2008
	Purchase of goods		Loans		Other Services		P&E Sale		P&E Acquisition		Contribution made to related company
INTERCLIMA S.A. (1)	13,043,527		102,714,169		1,200,000		-		2,057,127		-
IL TEVERE S.A. (2)	-		470,509		-		-		-		-
Capdo S.A. (1)	-		(800,000)		-		-		-		-
IATEC S.A. (3)	-		-		-		(5,245,036)		-		589,842
	13,043,527		102,384,678		1,200,000		(5,245,036)		2,057,127		589,842

	12/31/2007
	Purchase of goods		Loans		Other Services
INTERCLIMA S.A. (1)	10,082,596		(21,319,268)		1,200,000
IL TEVERE S.A. (2)	-		(538,089)		-
Capdo S.A. (1)	-		800,000		-
	10,082,596		(21,057,357)		1,200,000

• • 1. Subsidiary.
  • Parent company.
  • Related company.

• INCOME TAX WITHHOLDING ON CASH DIVIDENDS

When dividends are paid in cash, in excess of taxable income, as provided for in Income Tax Law, such excess shall be subject to a 35% withholding as single and definitive payment. Earnings which are not subject to income tax as a result of the benefits provided by Law No. 19,640 are not subject to equalization tax.

1. OFFICIALLY STAMPED BOOKS

Due to delays in the administrative process related to the IGJ’s (Argentine regulatory agency of business associations) officially stamping the journal, as of the date of issuance of these financial statements, the Company is currently transcribing the transactions for the last three months into such book.

Below is a breakdown of the transactions for the year ended December 31, 2008, transcribed after the official stamp and seal were placed on the book:

Journal No.		Date officially stamped		Transactions for the period
89		28-Apr-08		12/01/2007 through 01/01/2008
90		28-Apr-08		01/01/2008 through 02/01/2008
91		5-Jun-08		02/01/2008 through 02/29/2008
92		5-Jun-08		02/29/2008 through 04/01/2008
93		24-Jul-08		04/01/2008 through 05/01/2008
94		24-Jul-08		05/01/2008 through 05/15/2008
95		20-Oct-08		05/15/2008 through 05/27/2008
96		20-Oct-08		05/27/2008 through 06/13/2008
97		20-Oct-08		06/13/2008 through 06/27/2008
98		20-Oct-08		06/27/2008 through 07/03/2008
99		4-Nov-08		07/03/2008 through 07/11/2008
100		4-Nov-08		07/11/2008 through 07/19/2008
101		4-Nov-08		07/19/2008 through 07/26/2008
102		4-Nov-08		07/26/2008 through 08/02/2008
103		19-Nov-08		08/02/2008 through 08/09/2008
104		19-Nov-08		08/09/2008 through 08/15/2008
105		19-Nov-08		08/15/2008 through 08/26/2008
106		19-Nov-08		08/26/2008 through 09/05/2008

1. EARNINGS PER SHARE

Net income per share (basic and diluted) is calculated by dividing net income for each year allocable to common shares by the weighted average of outstanding common shares during the same years considering the capitalization mentioned in Note 3. No transactions involving shares of common stock or possible shares of common stock have been performed as from the end of the related year through the issuance of these financial statements.

1. SHAREHOLDING ACQUISITION

On October 23, 2008, the Company used its subsidiary, INTERCLIMA S.A. to acquire 95% of the capital stock of IATEC S.A. (Industrial Austral de Tecnología S.A.), a company organized in the Province of Tierra del Fuego, holder of an industrial promotion project authorized under Law 19,640, for the manufacture of air conditioning equipment, among other electronic products at its factory located in Cuidad de Río Grande, Province of Tierra del Fuego, Antarctica and South Atlantic Islands. The remaining 5 % of IATEC S.A.’s shares was acquired directly by MIRGOR S.A, for a total of 15,943. This investment enables MIRGOR S.A. and INTERCLIMA S.A. to rely on new production alternatives.

On December 15, 2008, the Company’s Board of Directors approved an irrevocable contribution in cash of 589,842. The Board of Directors also approved the sale of a real property belonging to the Company to IATEC, for 5,245,036.

1. CORPORATE BONDS ISSUANCE

On October 28, 2008, the Company requested authorization from the CNV to create a program to issue corporate bonds for a total face value amount of up to USD 100,000,000 (one hundred million US dollars) (or its equivalent in other currencies). The creation of the Program and the terms and conditions thereof were authorized by the Company through Shareholders' Meeting held September 4, 2008, and Board of Directors' Meeting No. 374 held July 28, 2008.

On February 24, 2009, the CNV authorized the Company to publicly offer its securities following the guidelines of the abovementioned program.

1. SUBSEQUENT EVENTS

On January 23, 2009, the Company and its subsidiary Interclima S.A. suffered the effects of a fire in a warehouse storing finished products and raw materials, which was being leased by Interclima from a third party. All of the inventory stored in that warehouse was destroyed in the fire. The book value of the Company’s and its subsidiary’s destroyed inventory amounted to around 3,587,000 and 1,432,000, respectively. In February 2009, the Company and its subsidiary began the claims procedure with the insurance company in relation to the abovementioned event, and it is expected that such amounts will be fully covered by the insurance company.

1. FOREIGN INVESTOR INFORMATION SYSTEM

These financial statements have been prepared in accordance with the regulations on foreign investors information system established by the CNV in Resolution No. 368, as amended, Chapter XXIII, Exhibit III; and based on the above, they are in conformity with professional accounting standards effective in the Province of Tierra del Fuego, Antártica and South Atlantic Islands, Argentina. The effects of differences between professional accounting standards effective in Argentina and those effective in other countries where these financial statements may be used have not been quantified.

Accordingly, these financial statements are not intended to present financial position, results of operations or charges in financial position in accordance with accounting standards effective in the countries of users of the financial statements, other than those effective in Argentina.

1. EXPLANATION ADDED FOR TRANSLATION INTO ENGLISH

These financial statements are the English translation of those originally issued in Spanish. They have also been reformatted in a manner different from that presented in Spanish, but in all other respects follows accounting principles that conform with the CNV regulations.

EXHIBIT “C”

INTEREST IN COMPANIES FOR THE FISCAL YEAR ENDED

DECEMBER 31, 2008, PRESENTED COMPARATIVELY WITH THE PRIOR FISCAL YEAR

(Figures stated in Argentine pesos - Note 1.b)

		12/31/2008										12/31/2007
Name and characteristics of securities		Face value		Amounts		Cost value		Value obtained by the equity method		Book value		Book value
Noncurrent investments: Related companies
INTERCLIMA S.A.		1		11,996		8,815,917		55,200,163		55,200,163		43,035,938
CAPDO S.A.		1		6,650,000		7,792,470		7,938,355		7,938,355		7,669,089
IATEC S.A.		1		600		15,943		589,588		589,588		-
Total noncurrent investments										63,728,106		50,705,027

		12/31/2008
		Information on the issuer
				Last financial statements issued
Name and characteristics of securities		Main business activity		Date		Capital		Income (loss) for the year		Shareholders' equity		Equity interest %
Noncurrent investments: Related companies
INTERCLIMA S.A.		Manufacturing of autoparts and exchangers for air conditioning and heating systems		12/31/08		12,000		12,557,302		60,716,081		99.97%
CAPDO S.A.		Real estate broker		12/31/08		7,000,000		323,643		7,145,045		95.00%
IATEC S.A.		Electronic devices		12/31/08		12,000		(17,097)		11,791,741		5.00%

STATUTORY AUDIT COMMITTEE’S REPORT

To the Shareholders of

MIRGOR S.A.C.I.F.I.A.

Dear Sirs,

1. As required by the BCBA (Buenos Aires stock exchange) Regulations, we examined the accompanying letter to the shareholders and balance sheet of MIRGOR S.A.C.I.F.I.A. as of December 31, 2008, and the related statements of income, changes in shareholders’ equity and cash flows for the year then ended, as well as the consolidated balance sheet of MIRGOR S.A.C.I.F.I.A. with its subsidiaries as of December 31, 2008, and the related consolidated statements of income and cash flows for the year then ended. Such documentation is the responsibility of the Company’s Board of Directors in performing their exclusive functions.

2. Our work was based on the audit of the financial statements indicated above conducted by the firm Pistrelli, Henry Martin y Asociados S.R.L., in accordance with auditing standards effective in Argentina, and it was limited to verifying the fairness of the significant information included in the documents examined, its consistency with the information on corporate decisions entered in minutes, and the compliance of such decisions with the law and by-laws regarding formal and documentary requirements. We did not perform any control over management decisions or performance and, therefore, we did not assess the business decisions or criteria regarding administrative, financial, marketing or production matters, as these are the exclusive responsibility of the Board of Directors.

3. As mentioned in note 4 to the accompanying financial statements, as of December 31, 2008, the Company and its subsidiaries had in their records noncurrent value-added tax, income tax, and minimum presumed income tax credits amounting to ARS 11,015,040, the recoverability of which depends on the companies’ possibility of generating enough taxable income to absorb them. Although the Company’s Management understands that based on the business plan those credits will be recoverable, as of the date of issuance of this report, it is not possible to estimate the recoverable amount of such credits.

4. 2 -

5. In our opinion, based on our review and the report dated March 06, 2009, issued by Karén Grigorian, CPA, (a partner of the firm Pistrelli, Henry Martin y Asociados S.R.L.), subject to the effect of adjustments, if any, that could have been required if the outcome of the uncertainty mentioned in paragraph (3) had been known, the financial statements mentioned in paragraph (1) present fairly, in all material respects, the financial position of MIRGOR S.A.C.I.F.I.A. and the consolidated financial position of MIRGOR S.A.C.I.F.I.A. with its subsidiaries as of December 31, 2008, and the related results of its operations and its cash flows for the year then ended, in accordance with professional accounting standards effective in the Province of Tierra del Fuego, Antarctica and South Atlantic Islands, Argentina, and the provisions of Argentine Business Associations Law and the relevant CNV (Argentine Securities Commission) regulations.

6. We also report that in compliance with current legal requirements, and exercising the control of legality that is our responsibility, during the year, we applied the remaining procedures described in section No. 294, Law No. 19,550, which we considered necessary under the circumstances, with no findings to report in this regard.

7. The accompanying financial statements result from books kept, in all formal respects, pursuant to current legal requirements, except as mentioned in note 9.

Buenos Aires City,

March 06, 2009

On behalf of Statutory Audit Committee

JULIO CUETO RUA

Statutory auditor