CVM BRAZILIAN SECURITIES AND EXCHANGE COMMISSION STANDARD FINANCIAL STATEMENTS 12/31/ LUPATECH S.A.

Transcription

1 THIS IS A FREE TRANSLATION OF THE ORIGINAL TEXT IN PORTUGUESE IN CASE OF DIVERGENCE OF INTERPRETATION, THE PORTUGUESE TEXT WILL PREVAIL CVM - BRAZILIAN SECURITIES AND EXCHANGE COMMISSION STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A 1 - General Date Date Company name: LUPATECH S.A. Last change of company name 03/30/1993 Previous company name: Valmicro Indústria e Comércio de Válvulas S.A. Date of establishment: 08/08/1980 CNPJ: / CVM Code: Date of CVM registration: 05/08/2006 Status of CVM registry: Active Beginning date of status of CVM registration: 05/08/2006 Country of origin: Brazil Country where securities are held in custody: Brazil Internet page: Registry Participant type: Open Company Category of CVM registry: A Registry date of the current category: 01/01/2011 Emitter situation: Operational phase Date of beginning of situation 05/08/2006 Type of stocks control: Private Date of last change of stocks control: 05/15/2006 Date of last change of fiscal year: 08/08/1980 Fiscal year end: Day: 31 Month:12 Sector Activity Sector: Description of activity: Oil and Gas Production of equipment and redering of services for the oil and gas industrial valves and microcasting parts Newspapers of Disclose Newspapers: Diario Oficial do Rio Grande do Sul - RS Valor Econômico - SP Foreign Countries Country: Admission date: United States 11/16/2009 Luxembourg 07/10/ Address Headquarters: Company Mailing Address: Rua Dalton Lahm dos Reis, 201 Distrito Industrial, Caxias do Sul, RS, Brazil, CEP Telephone: (54) Fax: (54) ri@lupatech.com.br Rua Pequetita, conj. 44, Vila Olímpia, São Paulo, SP, Brazil CEP Telephone: (11) Fax: (11) ri@lupatech.com.br

2 3 - Securities Market: Stock Exchange Entity: BM&FBOVESPA Negotiation - beginning: 05/15/2006 Segment: New Market 4 - Auditors Information Name: Deloitte Touche Tohmatsu Auditores Independentes CVM Code Auditor Type: National CPF/CNPJ: / Technician in Charge: Fernando Carrasco CPF: Beginning: 03/24/ Custodian Agent Name: Banco Bradesco S.A. CPF/CNPJ: / Beginning: 04/25/2006 Address: Cidade de Deus - Prédio Amarelo, Subsolo, Vila Yara, Osasco, SP, Brasil CEP: Telephone: (11) Fax: (11) acoes@bradesco.com.br 6 - Investor Relations Officer Name: Alexandre José Gerra de Castro Monteiro Type: CEO & IRO CPF/CNPJ: Beginning: 04/29/2011 Address: Rua Pequetita, conj. 44, Vila Olímpia, São Paulo, SP, Brazil CEP Telephone: (11) Fax: (11) ri@lupatech.com.br 7 - Investor Relations Department Contact: Alexandre José Gerra de Castro Monteiro Beginning: 04/29/2011 Address: Rua Pequetita, conj. 44, Vila Olímpia, São Paulo, SP, Brazil CEP Telephone: (11) Fax: (11) ri@lupatech.com.br 8 - Capital Stock Number of shares (Units) 12/31/2011 Paid-up Capital Common Preferred 0 Total Treasury Stock Common Preferred 0 Total

3 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statements / Balance Sheet Assets (In Reais Thousands) Code Description Last Year 12/31/2011 Penultimate Year 12/31/2010 Before the Penultimate Year 12/31/ Total Assets 1,248,913 1,241,685 1,284, Current Assets 220, , , Cash and Cash Equivalents 8,690 10,404 99, Accounts Receivable 83,424 44, , Clients 82,402 43, , Other Accounts Receivable 1,022 1, Other Accounts Receivable - Related Parties 1,022 1, Inventories 77,933 64,978 48, Recoverable Taxes 8,894 12,646 19, Recoverable Current Taxes 8,894 12,646 19, Prepaid Expenses 4, Other Current Assets 36,663 5,957 3, Assets Held for Sale 32, Others 3,825 5,957 3, Derivative Financial Instruments - 3, Other Accounts Receivable 1,916 2,888 1, Securities 1, Non-Current Assets 1,028,899 1,102, , Long-Term assets 81,415 81,106 75, Deferred Tax 59,262 59,695 41, Deferred Income Tax and Social Contribution 59,262 59,695 41, Credit with Related Parties , Credit with Subsidiaries , Other Non-Current Assents 22,153 21,411 23, Judicial Deposits 2,768 2,680 1, Recoverable Taxes 19,369 18,024 22, Other Accounts Receivable Investments 599, , , Investments 599, , , Investments in Subsidiaries 573, , , Other investments 26,208 26, Fixed Assets 131, , , Fixed Assets in Operations 129, , , Fixed Assets in Progress 1,849 2,896 1, Intangible 216, ,322 11, Intangible 216, ,322 11, Software and Other Licenses 7,295 6,251 3, New Products Development 11,634 9,099 7, Goodwill 197, ,972 -

4 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statements / Balance Sheet Liabilities (In Reais Thousands) Code Description Last Year 12/31/2011 Penultimate Year 12/31/2010 Before the Penultimate Year 12/31/ Total Liabilities 1,248,913 1,241,685 1,284, Current Liabilities 690, ,150 66, Social and Labor Obligations 8,421 8,789 6, Labor Obligations 8,421 8,789 6, Suppliers 39,177 21,329 15, Domestic Suppliers 36,668 20,063 14, Export Suppliers 2,509 1, Tax 5,484 5, Federal Tax 4,404 3, Other Federal Tax 4,404 3, State Tax 909 1, Municipality Tax Loans and Financing 534,909 43,353 26, Loans and Financing 167,207 14,891 9, Local Currency 167,176 14,891 9, Foreign Currency Debentures 367,702 28,462 16, Other Liabilities 102,922 54,669 17, Liabilities with Related Parties 65,895 10, Debts with Subsidiaries 65,895 10, Other 37,027 44,334 17, Losses on Derivatives - 2, Commissions Payable 1,259 1,156 8, Advances from Customers 5, , Profit Sharing 2, Accounts Payable Related to Investment Acquisition 20,518 27, Other Liabilities 7,185 12,484 3, Non-Current Liabilities 604, , , Loans and Financing 43, , , Loans and Financing 43,449 95,325 98, Local Currency 43,369 95,325 98, Foreign Currency Debentures - 329, , Other Liabilities 486, , , Liabilities with Related Parties 474, , , Debts with Subsidiaries 474, , , Other 11,754 17,020 4, Taxes Payable 2,668 2,632 2, Accounts Payable Related to Investment Acquisition 7,978 14, Other Obligations 1, , Deferred Tax 34,796 24,324 19, Deferred Income Tax and Social Contribution 34,796 24, Provisions 39,852 36,372 38, Social Security, Tax, Labor and Civil Provisions 1,474 2,801 4, Tax Provisions 550 2,577 3, Labor and Social Security Provisions Civil Provisions Other Provisions 38,378 33,571 33, Provision for Negative Equity in Subsidiaries 38,378 33,571 33, Shareholder's Equity (46,428) 182, , Paid-up Capital 312, , , Capital Reserves 12,786 15,387 11, Stock Options 12,904 15,505 11, Treasury Shares (118) (118) Accumulated Earnings / Losses (319,325) (77,993) (4,770) Equity Evaluation Adjustments (52,606) (67,637) (53,078)

5 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statements / Statement of Income (In Reais Thousands) Code Description Last Year 01/01/2011 to 12/31/2011 Penultimate Year 01/01/2010 to 12/31/2010 Before the Penultimate Year 01/01/2009 to 12/31/ Gross Revenue from Sales and/or Services 253, , , Cost of Goods Sold (185,735) (118,239) (174,906) 3.03 Gross Profit 67,650 19,197 61, Operating Income/Expenses (116,494) (13,515) (25,963) Selling Expenses (32,950) (16,274) (24,416) General and Administrative Expenses (32,694) (19,738) (17,628) Other Operating Income (24,395) (6,274) 2, Other Operating Expenses 5,550 3,110 (12,851) Equity Pick-up (32,005) 25,661 26, Operating Income/Expenses Before Financial Results and Income Tax (48,844) 5,682 35, Financial Results (177,315) (88,588) (20,301) Financial Income 127, , , Financial Income 36,831 19,260 19, Gain on Exchange Variance 90,906 86,095 89, Financial Expenses (305,052) (193,943) (128,977) Financial Expenses (167,206) (127,112) (79,358) Loss on Exchange Variance (137,846) (66,831) (49,619) 3.07 Income Before IncomeTax (226,159) (82,906) 15, Provision for Income Tax and Social Contribution (9,850) 20,911 (131) Deferred (9,850) 20,911 (131) 3.09 Net Income from Continuing Operations (236,009) (61,995) 15, Net income from Discontinued Operations (5,323) (11,229) Income (Loss) from discontinued operations (5,323) (11,229) Income/Loss for the Period (241,332) (73,224) 15, ON (5.0855) (1.5348) ON (5.0855) (1.5348)

6 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statements / Statement of Comprehensive Income (In Reais Thousands) Code Description Last Year 01/01/2011 to 12/31/2011 Penultimate Year 01/01/2010 to 12/31/2010 Before the Penultimate Year 01/01/2009 to 12/31/ Income/Loss for the Period (241,332) (73,224) 15, Other Comprehensive Income 15,031 (14,559) (72,423) Exchange Variation on Investments Abroad 14,907 (14,435) (72,423) Unrealized Losses on Cash Flow Hedges 124 (124) Comprehensive Income of the Period (226,301) (87,783) (57,015)

7 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statments / Statement of Changes in Shareholder's Equity - 01/01/2011 to 12/31/2011 (In Reais Thousands) Capital Reserves, Stock Options and Accumulated Profit/Loss Other Comprehensive Income Shareholders' Equity Code Description Capital Stock Treasury Shares 5.01 Opening Balance 312,703 15,387 (77,993) (67,637) 182, Adjusted Balance 312,703 15,387 (77,993) (67,637) 182, Capital Transactions 14 (2,601) - - (2,587) Capital Increase Stock Options - (2,601) - - (2,601) 5.05 Comprehensive Income - - (241,332) 15,031 (226,301) Income / Loss for the Period - - (241,332) - (241,332) Other Comprehensive Income ,031 15, Cumulative Translation Effects ,907 14, Unrealized Losses on Cash Flow Hedges Ending Balance 312,717 12,786 (319,325) (52,606) (46,428)

8 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statments / Statement of Changes in Shareholder's Equity - 01/01/2010 to 12/31/2010 (In Reais Thousands) Capital Reserves, Stock Options and Accumulated Profit/Loss Other Comprehensive Income Shareholders' Equity Code Description Capital Stock Treasury Shares 5.01 Opening Balance 311,525 11,002 (4,769) (53,078) 264, Adjusted Balance 311,525 11,002 (4,769) (53,078) 264, Capital Transactions 1,178 4, , Capital Increase 1, , Stock Options - 4, , Treasury Shares - (118) - - (118) 5.05 Comprehensive Income - - (73,224) (14,559) (87,783) Income / Loss for the Period - - (73,224) - (73,224) Other Comprehensive Income (14,559) (14,559) Cumulative Translation Effects (14,435) (14,435) Unrealized Losses on Cash Flow Hedges (124) (124) 5.07 Ending Balance 312,703 15,387 (77,993) (67,637) 182,460

9 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statments / Statement of Changes in Shareholder's Equity - 01/01/2009 to 12/31/2009 (In Reais Thousands) Capital Reserves, Stock Options and Accumulated Profit/Loss Other Comprehensive Income Shareholders' Equity Code Description Capital Stock Treasury Shares 5.01 Opening Balance 309,850 7,516 (20,178) 9, , Previous Years Adjustments ,907 9, Adjustment of Conversion ,907 9, Adjusted Balance 309,850 7,516 (20,178) 19, , Capital Transactions 1,675 3, , Capital Increase 1, , Stock Options - 3, , Comprehensive Income ,408 (72,423) (57,015) Income / Loss for the Period ,408-15, Other Comprehensive Income (72,423) (72,423) Cumulative Translation Effects (72,423) (72,423) 5.07 Ending Balance 311,525 11,002 (4,770) (53,078) 264,679

10 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statments / Statement of Cash Flow - Indirect Method (In Reais Thousands) Code Description Last Year 01/01/2011 to 12/31/2011 Penultimate Year 01/01/2010 to 12/31/2010 Before the Penultimate Year 01/01/2009 to 12/31/ Cash Flow from Operation 44 30, , Cash Flow from Operation 15,307 (56,868) 41, Net Loss for the Period (241,332) (73,224) 15, Depreciation and Amortization 15,521 13,798 17, Equity Pick-up 32,005 (25,661) (26,677) Cost of Write-off or Sale of Fixed Assets Financial Expenses and Exchange Variation of Financing, Debentures and Derivatives 181,845 44,182 31, Stock Option Expenses (2,601) 4,503 3, Deferred income Tax and Social Contribution 9,850 (20,911) Provision for Losses by Non-Recoverability of Assets 19, Change in Assets and Liabilities (15,263) 87,181 74, Accounts Receivable (26,402) 68,390 37, Inventories (9,527) (16,924) 7, Recoverable Taxes ,729 (2,333) Other Assets (1,945) 4,421 2, Suppliers 17,955 7,537 (11,327) Taxes Payable 1,295 18,193 (1,160) Others 2,864 (5,165) 41, Cash Flow from Investing Activities (23,065) (57,978) (225,731) Acquisition Cost of Investments (21,639) (45,914) (226,375) Acquisition of Fixed Assets (4,532) (9,740) (23,893) Addition to Intangibles (7,660) (5,516) (1,983) Dividends and Interest on Equity Reserve Received 2 3,192 26, Cash of Incorporated Companies 12, (Application) Redemption Application Financeria Restricted (1,909) Cash Flow from Financing Activities 21,307 (61,686) 208, Proceeds from Loans and Financing 134,515 10,545 36, Proceeds (Payments) from Loans and Financing - Related Parties (1,751) (14,840) 257, Payments of Debentures (48,289) (38,228) 328, Capital Increase - 1,178 1, Payments of Loans and Financing - Principal (50,672) (9,150) (371,363) Payments of Loans and Financing - Interest (12,496) (11,191) (45,724) 6.05 Increase/Decrease in Cash and Cash Equivalents (1,714) (89,351) 98, Cash and Cash Equivalents at the Beginning of Period 10,404 99,755 1, Cash and Cash Equivalents at the End of Period 8,690 10,404 99,755

11 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Individual Financial Statments / Statement of Added Value (In Reais Thousands) Code Description Last Year 01/01/2011 to 12/31/2011 Penultimate Year 01/01/2010 to 12/31/2010 Before the Penultimate Year 01/01/2009 to 12/31/ Revenue 329, , , Sales of Goods, Products and Services 325, , , Other Revenues 5,550 2,886 2, Allowance for Doubtful Accounts (1,078) (40) (126) 7.02 Input Acquired from Third Parties (206,709) (166,838) (181,775) Cost of Products, Goods and Services Sold (139,010) (125,385) (150,158) Materials, Energy, and Other Outsourced Services (42,899) (32,766) (16,951) Loss / Recovery of Assets (4,637) (6) (110) Other Expenses (20,163) (8,681) (14,556) 7.03 Gross Added Value 123,115 46,681 87, Retentions (15,521) (13,798) (17,413) Depreciation and Amortization (15,521) (13,798) (17,413) 7.05 Net Added Value Generated by the Company 107,594 32,883 70, Added Value Received by Transfer 95, , , Equity pick-up (32,005) 25,661 26, Financial income 127,941 98, , Total Added Value to be Distributed 203, , , Distribution of Added Value 203, , , Personal 70,333 50,154 42, Direct Compensation 54,507 40,067 34, Benefits 10,061 5,916 4, FGTS 5,765 4,171 3, Taxes and Contributions 68, , Federal 45,430 3,265 16, States 22,493 (2,828) 1, Municipality Payment of debt 306, , , Interest 305, , , Rentals Capital compensation (241,332) (73,224) 15, Income/Loss for the period (241,332) (73,224) 15,408

12 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statements / Balance Sheet Assets (In Reais Thousands) Code Description Last Year 12/31/2011 Penultimate Year 12/31/2010 Before the Penultimate Year 12/31/ Total Assets 1,503,219 1,445,274 1,454, Current Assets 490, , , Cash and Cash Equivalents 24,055 58, , Accounts Receivable 183, , , Clients 183, , , Inventories 173, , , Recoverable Taxes 39,125 39,605 45, Recoverable Current Taxes 39,125 39,605 45, Prepaid Expenses 6,531 5, Other Current Assets 64,058 19,316 28, Assets Held for Sale 53, Other 10,618 19,316 28, Derivative Financial Instruments - 3, Securities 1,909-20, Other Accounts Receivable 8,709 16,247 7, Non-Current Assets 1,012,330 1,038, , Long-term Assets 114, ,651 96, Accounts Receivable - - 3, Clients - - 3, Deferred Tax 84,945 84,375 62, Deferred Income Tax and Social Contribution 84,945 84,375 62, Other Non-Current Assents 29,655 54,276 29, Judicial Deposits 2,962 2,864 1, Securities 3 21, Recoverable Taxes 22,767 22,284 23, Other Accounts Receivable 3,923 7,184 5, Investments 40,259 26,347 2, Investments 40,259 26,347 2, Investments in Affiliates , Other Investments 40,096 26, Fixed Assets 339, , , Fixed Assets in Operations 312, , , Fixed Assets in Progress 26,565 24,822 10, Intangible 518, , , Intangible 24,999 21,715 16, Software and Other Licenses 10,742 7,914 5, New Products Development 14,257 13,801 11, Goodwill 493, , ,360

13 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statements / Balance Sheet Liabilities (In Reais Thousands) Code Description Last Year 12/31/2011 Penultimate Year 12/31/2010 Before the Penultimate Year 12/31/ Total Liabilities 1,503,219 1,445,274 1,454, Current Liabilities 864, , , Social and Labor Obligations 22,193 22,983 14, Labor Obligations 22,193 22,983 14, Suppliers 74,666 48,466 35, Domestic Suppliers 67,100 42,012 31, Export Suppliers 7,566 6,454 4, Tax 25,162 20,827 17, Federal Taxes 17,646 16,523 14, Income Tax and Social Contribution 2,409 3,730 2, Others Federal Taxes 15,237 12,793 12, State Taxes 6,690 3,709 1, Municipality Tax Loans and Financing 666,743 79,928 46, Loans and Financing 299,041 51,466 29, Local Currency 251,833 34,108 20, Foreign Currency 47,208 17,358 9, Debentures 367,702 28,462 16, Other Obligations 63,625 75,921 36, Other 63,625 75,921 36, Losses on Derivatives - 2, Perpetual bonds 12,318 10,548 10, Commissions Payable 1,362 1,234 9, Advances from Customers 8,732 4,054 8, Profit Sharing 5,819 6, Accounts Payable Related to Investment Acquisition 23,883 36,178 2, Other Obligations 11,511 15,033 5, Liabilities Held for Sale 12, Liabilities Held for Sale 12, Non-Current Liabilities 682,215 1,012,796 1,039, Loans and Financing 90, , , Loans and Financing 90, , , Local Currency 79, , , Foreign Currency 10,625 20,607 25, Debentures - 329, , Other Obligations 532, , , Other 532, , , Perpetual Bonds 515, , , Taxes Payable 4,207 2,849 3, Accounts Payable Related to Investment Acquisition 7,978 14,655 2, Other Obligations 5,016 4,340 1, Deferred Tax 54,258 41,727 34, Deferred Income Tax and Social Co 54,258 41,727 34, Provisions 5,455 7,347 7, Social Security, Tax, Labor and Civ 5,455 7,347 7, Tax Provisions 3,359 5,590 6, Labor and Social Security Provision 1,793 1,704 1, Civil Provisions Shareholder's Equity (43,734) 184, , Paid-up Capital 312, , , Capital Reserves 12,786 15,387 11, Stock Options 12,904 15,505 11, Treasury Shares (118) (118) Accumulated Earnings / Losses (319,325) (77,993) (4,770) Equity Evaluation Adjustments (52,606) (67,637) (53,078) Non-Controlling Interests 2,694 1,893 -

14 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statments / Statement of Income (In Reais Thousands) Last Year 01/01/2011 to 12/31/2011 Penultimate Year 01/01/2010 to 12/31/2010 Before the Penultimate Year 01/01/2009 to 12/31/2009 Code Description 3.01 Gross Revenue from Sales and/or Services 574, , , Cost of Goods Sold (406,207) (371,319) (402,996) 3.03 Gross Profit 167, , , Operating Income/Expenses (180,703) (116,022) (122,287) Selling Expenses (68,547) (55,726) (57,170) General and Administrative Expenses (69,702) (51,260) (54,722) Other Operating Income (49,468) (15,285) 6, Other Operating Income (49,468) (15,285) 6, Other Operating Expenses 6,773 5,996 (17,775) Equity Pick-up Operating Income/Expenses Before Financial Results and Income Tax (12,907) 27,942 29, Financial Results (198,754) (93,340) (2,519) Financial Income 138, , , Financial Income 40,994 23,545 26, Gain on Exchange Variance 97,742 93, , Financial Expenses (337,490) (210,378) (191,842) Financial Expenses (185,592) (138,900) (126,813) Loss on Exchange Variance (151,898) (71,478) (65,029) 3.07 Income Before Income Tax (211,661) (65,398) 27, Provision for Income Tax and Social Contribution (19,777) 3,565 (11,952) Current (8,871) (11,197) (14,581) Deferred (10,906) 14,762 2, Net Income (Loss) from Continuing Operations (231,438) (61,833) 15, Net Income (Loss) from Discontinued Operations (10,473) (11,327) Net Income (Loss) from Discontinued Operations (10,473) (11,327) Income (Loss) for the Period (241,911) (73,160) 15, Parent company's interests (241,332) (73,224) 15, Non-controlling interests (579) Earnings per Share (R$/Share) (10,473) (11,327) Basic Earnings per Share ON (5.0855) (1.5348) Diluted Earnings per Share ON (5.0855) (1.5348)

15 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statments / Statement of Changes in Shareholder's Equity - 01/01/2011 to 12/31/2011 (In Reais Thousands) Code Description Capital Stock Capital Reserves, Stock Options and Treasury Shares Accumulated Profit/Loss Other Comprehensive Income Shareholders' Equity Non-controlling interest Consolidated Shareholders' Equity 5.01 Opening Balance 312,703 15,387 (77,993) (67,637) 182,460 1, , Adjusted Balance 312,703 15,387 (77,993) (67,637) 182,460 1, , Capital Transactions 14 (2,601) - - (2,587) - (2,587) Capital Increase Stock Options - (2,601) - - (2,601) - (2,601) 5.05 Comprehensive Income - - (241,332) 15,031 (226,301) (579) (226,880) Income / Loss for the Period - - (241,332) - (241,332) (579) (241,911) Other Comprehensive Income ,031 15,031-15, Cumulative Translation Effects ,907 14,907-14, Unrealized Losses on Cash Flow Hedges Internal Equity Mutations ,380 1, Non-controlling interests ,380 1, Ending Balance 312,717 12,786 (319,325) (52,606) (46,428) 2,694 (43,734)

16 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statments / Statement of Changes in Shareholder's Equity - 01/01/2010 to 12/31/2010 (In Reais Thousands) Capital Reserves, Stock Options and Treasury Shares Accumulated Profit/Loss Other Comprehensive Income Shareholders' Equity Non-controlling interest Consolidated Shareholders' Equity Code Description Capital Stock 5.01 Opening Balance 311,525 11,002 (4,769) (53,078) 264, , Adjusted Balance 311,525 11,002 (4,769) (53,078) 264, , Capital Transactions 1,178 4, ,563-5, Capital Increase 1, ,178-1, Stock Options - 4, ,503-4, Treasury Shares - (118) - - (118) - (118) 5.05 Comprehensive Income - - (73,224) (14,559) (87,783) 64 (87,719) Income / Loss for the Period - - (73,224) - (73,224) 64 (73,160) Other Comprehensive Income (14,559) (14,559) - (14,559) Cumulative Translation Effects (14,435) (14,435) - (14,435) Unrealized Losses on Cash Flow Hedges (124) (124) - (124) 5.06 Internal Equity Mutations ,829 1, Non-controlling interests ,829 1, Ending Balance 312,703 15,387 (77,993) (67,637) 182,460 1, ,353

17 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statments / Statement of Changes in Shareholder's Equity - 01/01/2009 to 12/31/2009 (In Reais Thousands) Code Description Capital Stock Capital Reserves, Stock Options and Treasury Shares Accumulated Profit/Loss Other Comprehensive Income Shareholders' Equity Consolidated Shareholders' Equity 5.01 Opening Balance 309,850 7,516 (20,178) 9, , , Previous Years Adjustments ,907 9,907 9, Adjusted Balance 309,850 7,516 (20,178) 19, , , Capital Transactions 1,675 3, ,161 5, Capital Increase 1, ,675 1, Stock Options - 3, ,486 3, Comprehensive Income ,408 (72,423) (57,015) (57,015) Income / Loss for the Period ,408-15,408 15, Other Comprehensive Income (72,423) (72,423) (72,423) Cumulative Translation Effects (72,423) (72,423) (72,423) 5.07 Ending Balance 311,525 11,002 (4,770) (53,078) 264, ,679

18 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statments / Statement of Cash Flow - Indirect Method (In Reais Thousands) Code Description Last Year 01/01/2011 to 12/31/2011 Penultimate Year 01/01/2010 to 12/31/2010 Before the Penultimate Year 01/01/2009 to 12/31/ Cash Flow from Operating Activities 10, ,225 96, Cash Flow from Operation 38,739 44,426 64, Net Loss for the Period (241,911) (73,160) 15, Depreciation and Amortization 35,940 29,218 36, Equity Pick-up (241) (253) (749) Cost of Write-off or Sale of Fixed Assets 1, Financial Expenses and Exchange Variation of Financing, Debentures and Derivatives 199,304 98,005 11, Stock Option Expenses (2,601) 4,503 3, Deferred income Tax and Social Contribution 11,961 (14,762) (2,629) Provision for Losses by Non-Recoverability of Assets 35, Change in Assets and Liabilities (27,871) 80,799 32, Accounts Receivable (64,737) 60,547 55, Inventories (24,620) (2,635) 9, Recoverable Taxes (177) 7,030 (12,311) Other Assets 21,498 (13,632) Suppliers 34,924 15,378 (11,988) Taxes Payable 7,229 16,811 (6,221) Others (1,988) (2,700) (2,775) 6.02 Cash Flow from Investing Activities (85,369) (66,235) (136,479) Acquisition Cost of Investments - (20,177) (6,594) Payment of acquisition of investment (33,147) (9,435) (71,282) Acquisition of Fixed Assets (61,787) (28,387) (54,014) Addition to Intangibles (10,467) (8,236) (4,589) Cash & Marketable Securities - restirct account 20, Cash Flow from Financing Activities 40,029 (131,618) (100,912) Proceeds from Loans and Financing 286,705 26, , Payments of Perpetual Bond (44,071) (47,958) Payments of Debentures (48,289) (41,919) 328, Capital Increase - 1,178 1, Purchase of Treasury Shares - (118) Payments of Loans and Financing - Principal (126,051) (38,880) (461,351) Payments of Loans and Financing - Interest (28,265) (30,743) (106,627) 6.04 Exchange Variation on Cash Equivalents 62 (67) (45,048) 6.05 Increase/Decrease in Cash and Cash Equivalents (34,410) (72,695) (185,714) Cash and Cash Equivalents at the Beginning of Period 58, , , Cash and Cash Equivalents at the End of Period 24,055 58, ,160

19 STANDARD FINANCIAL STATEMENTS - 12/31/ LUPATECH S/A Consolidated Financial Statements / Statement of Added Value (In Reais Thousands) Code Description Last Year 01/01/2011 to 12/31/2011 Penultimate Year 01/01/2010 to 12/31/2010 Before the Penultimate Year 01/01/2009 to 12/31/ Revenue 729, , , Sales of Goods, Products and Services 723, , , Other Revenues 6,932 5,973 6, Allowance for Doubtful Accounts (1,081) (79) (1,052) 7.02 Input Acquired from Third Parties (401,336) (401,584) (382,475) Cost of Products, Goods and Services Sold (233,172) (281,036) (277,127) Materials, Energy, and Other Outsourced Services (117,818) (108,311) (82,677) Loss / Recovery of Assets (11,426) 2,934 (4,897) Other Expenses (38,920) (15,171) (17,774) 7.03 Gross Added Value 327, , , Retentions (35,940) (29,218) (36,227) Depreciation and Amortization (35,940) (29,218) (36,227) 7.05 Net Added Value Generated by the Company 291, , , Added Value Received by Transfer 138, , , Equity pick-up Financial income 138, , , Total Added Value to be Distributed 430, , , Distribution of Added Value 430, , , Personal 200, , , Direct Compensation 153, , , Benefits 31,252 16,375 11, FGTS 15,052 8,892 7, Taxes and Contributions 129,782 62,327 54, Federal 88,850 51,103 44, States 37,199 8,680 9, Municipality 3,733 2, Payment of debt 342, , , Interest 337, , , Rentals 4,927 2, Other - 1,941 9, Capital compensation (241,911) (73,160) 15, Income/Loss for the period (241,332) (73,224) 15, Non-Controlling Interests (579) 64 -

20 Dear Sirs, Lupatech S.A. ( Company ) presents the Management Report and the Company s Consolidated Financial Statements for the 2011 fiscal year and the quarter ended on December 31, 2011 (4Q11) drawn up in line with the International Accounting Standards (IAS) and the accounting practices adopted in Brazil. It is recommended to read this report together with the Notes to the Annual Consolidated Statements. COMPANY PROFILE AND BUSINESS OVERVIEW We are one of the main Brazilian suppliers of products and services with high value added with focus in the oil and gas sector. Our businesses are currently organized in two segments: Products and Services, and we have 3,589 employees. Up to the 3Q11 our businesses were organized in three segments Energy Products, Flow Control and Metallurgy. With the sale of the Metallurgy segment and with the review of the Company s and its businesses strategic alignment and positioning, our results will be presented from the 4Q11 with a new organization, being these businesses divided between Products and Services. The Products segment offers mainly to the oil and gas sector, anchoring ropes for production platforms, valves, completion tools, fiber optic sensors and vehicular natural gas compressors. The Services segment offers services as workover 1, well intervention, coating and inspection of pipes. MESSAGE OF THE MANAGEMENT TO SHAREHOLDERS AND MARKET AGENTS Dear shareholders and capital market agents, we present the 2011 fiscal year results of Lupatech S.A. OPERATIONAL PERFORMANCE During the 2011 fiscal year, most of the businesses of the Company presented progress, resulting in 11% growth in Net Consolidated Revenues compared to 2010 fiscal year, reaching R$574.0 million. Among the businesses that presented higher activity level we can mention: anchoring ropes (+174%), oilfield services (+80%), coating (+32%), completion tools and sensors (+24%), oil & gas services (+9%), and industrial valves (+4%). The Gross Consolidated Profit presented growth of 17%, reaching R$167.8 million, due mainly to a product mix with higher value added in the anchoring ropes, completion tools and sensors businesses. Due to the trend presented in the Gross Consolidated Profit, it was noticed growth of 1% as well in the Consolidated Adjusted EBITDA that reached R$62.2 million. The growth of the Consolidated Adjusted EBITDA in lower proportion than the Gross Consolidated Profit is due to the growth of 29% in Sales, Administrative and Management Salary expenses in the same period, a consequence of expenses with the restructuring process of the Company that amounted to R$9.1 million, and new units that started to operate during For such reason, the Consolidated EBITDA Margin was 11% in 2011 fiscal year versus 12% in 2010 fiscal year. [The remaining of this page was left in blank intentionally] 1 Workove r: term used to describe operations in an oil well to clean, repair and maintain the well with the purpose of increase and/or reestablish the production.

21 The Net Financial Result presented 113% growth in 2011 fiscal year, resulting in an expense of R$198.8 million versus R$93.3 million in 2010 fiscal year. This variation is justified mainly due to the net exchange variance verified during the period, besides the growth in the Company s indebtedness that resulted in higher volume of Interest Expenses. As a consequence of these factors, the Net Consolidated Result of 2011 fiscal year was a loss of R$241.9 million. RATIONALIZATION OF STRUCTURES We announced during 2011 fiscal year the rationalization process of our structures seeking to potentize the synergies among the acquired businesses in the past five years. For such purpose, besides the analysis of potential physical integration of similar businesses, we have initiated the rationalization of the corporate structure and diversification of suppliers base, resulting in higher competitiveness for our businesses. The corporate structure related to medium and high management was significantly reduced and this process concluded during the 1Q12. The suppliers base was diversified and we continue to seek for more competitive alternatives and with higher efficiency level in the raw materials that we acquire. It is also part of our rationalization process the divestitures of noncore assets for our Company. At the end of 2011 and during the 1Q12 we announced the conclusion of the sale of the units Steelinject and Microinox that composed the Metallurgy segment, by the amount of R$46.0 million. Other assets are under analysis and can result in other divestitures. BACKLOG Today we announced to the market through a Material Fact that the contracts to provide specialized offshore services related with well workover (intervention and recovery) and chartering of semisubmersible platforms ( Light Workover ), signed on June 7, 2010 and published to the market in the same date through a Material Fact, were cancelled in joint consent by the Company and Petróleo Brasileiro S.A. ( Petrobras ), with no charge for both parts. The cancellation is part of the Company s restructuring process and took into consideration the investment needs of the contracts. With that, both parts understood that the cancellation would be the best alternative considering their current needs. As a result, our backlog of firm orders on December 31, that amounted to R$2.3 billion, is now R$935 million. The conversion of this backlog is concentrated in the long term (over 1 year) considering that for the next 12 months it is foreseen R$278 million to be converted into revenues, and the remaining, R$657 million, over 12 months. 2,384 2,535 2,581 2,610 2,524 2,470 2,330 1, ,396 1,396 1,396 1,396 1, May-10 Jun-10 Oct -10 Dec -10 Mar-11 Jun-11 Sep-11 Dec-11 *LWO: Light Workover contracts 1year over1 year LWO*

22 INVESTMENTS FOR THE 2012 FISCAL YEAR The Management has reviewed all the projects in which Lupatech is involved, seeking to guarantee attractive return rates that create value to its shareholders. Considering that, the amount of investments (capex) forecasted for the 2012 fiscal year is around R$69 million, being 81% of this capex to be allocated in projects already hired and undergoing operations in services and 19% in projects already hired and undergoing operations in products. Products Services TOTAL % Maintenance % Expansion % TOTAL % 81% Of the total investments forecasted for the 2012 fiscal year, 72% are related to expansion of businesses capacity and 28% in the maintenance of existing structures. In case the Company adds new projects to its backlog during 2012 fiscal year and they demand additional investments, it will communicate its shareholders and the market. [The remaining of this page was left in blank intentionally]

23 FINAL REMARKS Our Management would like to reaffirm the long term commitment to clients, shareholders, creditors, employees and the capital markets. Lupatech S.A. together with its independent auditors, regarding the services not related to external auditing, is based in the principles that preserve the auditor independency. These principles are based in the fact that the auditor should not audit its own work, nor exercise managing roles or yet to act as a lawyer to its client. During the fiscal year ended December 31, 2011, the independent auditors of the Company, Deloitte Touche Tohmatsu Auditores Independentes (Deloitte), were hired to additional services other than the examination of financial statements, and the fees for these services represented approximately 14.9% of the amount related to external auditing of the financial statements of the fiscal year. The additional services refer to auditing work related to the issue of comfort letter about specific financial information for the issue of Offering Memorandum for Public Offer. The responsibility for the definitions inherent to the executed procedures and its application are prerogative of the Management, so therefore, it is of the understanding of the Company and of its external auditors that such services do not affect its professional independency. The fees related to additional services hired were R$242 thousands. The comments on the Company s consolidated businesses performance are available on its website Our Company is subject to the rules of the Market Arbitration Panel pursuant to the arbitration clause in our Bylaws. Caxias do Sul, March 30, Board of Directors Nestor Perini Carlos Eduardo Sardenberg Bellot Clóvis Benoni Meurer José Mauro Mettrau Carneiro da Cunha Luis Carlos Fernandes Afonso Peter Dvorsak Wilson Santarosa Fiscal Council Amoreti Franco Gibbon Carlos Osvaldo Pereira Hoff Paola Rocha Ferreira Board of Directors Substitute Members Carlos Fernando Costa José Teófilo Abu-Jamra Newton Carneiro da Cunha Fiscal Council - Substitute Members Juliano Puchalski Teixeira Imer José Puerari Teresa Rodriguez Cao Directors Alexandre Monteiro João Raful Thiago Piovesan [The remaining of this page was left in blank intentionally]

24 MANAGEMENT COMMENTS ON CONSOLIDATED ECONOMIC AND FINANCIAL PERFORMANCE IFRS NET REVENUES Net Revenues (in R$ thd) 1Q11 2Q11 3Q11 4Q11 % Change % Change Products 87, , , ,531-1% 397, ,514 7% O&G Valves 26,191 33,006 28,393 24,992-12% 130, ,581-14% Industrial Valves 33,033 39,803 41,791 47,782 14% 155, ,409 4% Anchoring Ropes 13,032 25,003 26,202 16,585-37% 29,534 80, % Completion and Sensors 1,266 2,670 2,657 3,783 42% 8,351 10,376 24% Compressors 13,501 15,690 11,745 16,390 40% 73,769 57,326-22% Services 33,654 38,636 39,408 38,792-2% 117, ,489 28% Oil & Gas Services 16,911 16,090 13,268 11,080-16% 52,731 57,349 9% Oilfield Services 5,353 5,997 7,643 9,595 26% 15,859 28,588 80% Coating 11,390 16,548 18,497 18,117-2% 49,038 64,552 32% Total 120, , , ,323-1% 515, ,003 11% % Products 72% 75% 74% 74% 77% 74% % O&G Valves 30% 28% 26% 23% 25% 20% % Industrial Valves 38% 34% 38% 44% 30% 28% % Anchoring Ropes 15% 22% 24% 15% 6% 14% % Completion and Sensors 1% 2% 2% 3% 2% 2% % Compressors 16% 14% 11% 15% 14% 10% % Services 28% 25% 26% 26% 23% 26% % Oil & Gas Services 50% 42% 34% 29% 10% 10% % Oilfield Services 16% 16% 19% 25% 3% 5% % Coating 34% 43% 47% 47% 10% 11% The Net Consolidated Revenues in 2011 fiscal year presented growth of 11% in comparison with 2010 fiscal year, reaching R$574.0 million versus R$515.3 million. Such variation is justified by the growth in both Products and Services segments, highlighting the business units as oilfield services, coating and anchoring ropes, all of them due to higher sales volume. The Net Consolidated Revenues in the 4Q11 decreased 1% in comparison with the 3Q11 reaching R$148.3 million versus R$150.2 million. Such variation is justified mainly due to the businesses of (i) anchoring ropes and O&G valves, which had projects with lower value added mix in this quarter and, (ii) oil & gas services due to lower volume of contracts in operation. [The remaining of this page was left in blank intentionally]

25 REVENUE BREAKDOWN BY CLIENT GEOGRAPHIC REGION TOTAL 2011 NET CONSOLIDATED REVENUES 12% 5% 1% 3% 9% 10% 60% Brazil Repetro Argentina Asia Europe North America Others BY INDUSTRIAL SECTOR TOTAL 2011 NET CONSOLIDATED REVENUES 15% 7% 3% 75% Energy Capital Goods Others Civil Construction BY BUSINESS UNIT TOTAL 2011 NET CONSOLIDATED REVENUES 10% 10% 5% 2% 28% 11% 14% 20% Industrial Valves O&G Valves Anchoring Ropes Coating Oil & Gas Services Compressors Oilfield Services Completion and Sensors [The remaining of this page was left in blank intentionally]

26 COSTS OF GOODS SOLD COGS (in R$ thd) 1Q11 2Q11 3Q11 4Q11 % Change % Change Products 63,226 74,445 72,113 83,996 16% 285, ,779 3% Services 25,037 26,151 30,737 30,503-1% 85, ,428 31% Total 88, , , ,499 11% 371, ,207 9% % Products 72% 74% 70% 73% 77% 72% % Services 28% 26% 30% 27% 23% 28% COGS/Total Net Revenues 73% 65% 68% 77% 72% 71% COGS/ Net Revenues - Products 73% 64% 65% 77% 72% 69% COGS/ Net Revenues - Services 74% 68% 78% 79% 73% 75% The Consolidated Cost of Goods Sold (COGS) in 2011 fiscal year grew 9% in comparison with 2010 fiscal year, reaching R$406.2 million versus R$371.3 million. The growth of the Consolidated COGS in the period is a consequence of the Net Consolidated Revenues growth of 11% in the same period. The Consolidated Cost of Goods Sold (COGS) in the 4Q11 grew 11% in comparison with the 3Q11, reaching R$114.5 million versus R$102.8 million. The growth of the Consolidated COGS is a consequence mainly of the Products segment which presented growth of 16% in COGS when the Net Revenues of this segment decreased 1% in the same period, a consequence of product mix with lower value added mainly in the O&G valves, industrial valves and anchoring ropes. COST STRUCTURE The following table shows the behavior of costs structure between the 1Q11 and the 4Q11. Cost Structure (in %) 1Q11 2Q11 3Q11 4Q11 Products Raw Material 62% 59% 60% 69% Labor 23% 27% 26% 25% Manufacturing Expenses 8% 8% 9% 2% Depreciation 7% 6% 5% 4% Services Raw Material 1% 0% 0% 2% Labor 51% 52% 46% 50% Manufacturing Expenses 40% 40% 47% 40% Depreciation 8% 8% 7% 8% Raw Material in % 11% 13% 1% 2% 6% 7% 9% StainlessStell Carbon Steel Polyester Carcass Bronze Other Metal Alloys Bobbin Others

27 GROSS PROFIT AND GROSS MARGIN Gross Profit (in R$ thd) 1Q11 2Q11 3Q11 4Q11 % Change The Gross Consolidated Profit in 2011 fiscal year reached R$167.8 million, 17% growth compared to 2010 fiscal year when reached R$144.0 million. The Gross Consolidated Margin went from 28% in 2010 to 29% in 2011 due mainly to the gain in gross margin in the Products segment, highlighting anchoring ropes and completion and sensors. The Gross Consolidated Profit in the 4Q11 reached R$33.8 million, 29% decrease in comparison with the 3Q11 when reached R$47.3 million. The Gross Consolidated Margin went from 32% in the 3Q11 to 23% in the 4Q11 due mainly to the loss in gross margin in the Products segment, highlighting O&G and industrial valves that worked during the period with a product mix with lower value added. [The remaining of this page was left in blank intentionally] % Change Products 23,796 41,727 38,676 25,535-34% 111, ,735 16% Gross Profit - Products 27% 36% 35% 23% 28% 31% Services 8,617 12,485 8,672 8,288-4% 32,125 38,061 18% Gross Profit - Services 26% 32% 22% 21% 27% 25% Total 32,414 54,212 47,347 33,823-29% 143, ,796 17% Gross Margin Total 27% 35% 32% 23% 28% 29% % Products 73% 77% 82% 75% 78% 77% % Services 27% 23% 18% 25% 22% 23%

28 EXPENSES Expenses (in R$ thd) 1Q11 2Q11 3Q11 4Q11 % Change % Change Total Sales Expenses 11,899 16,760 15,259 24,630 61% 55,726 68,547 23% Total Administrative Expenses 13,922 15,201 16,587 19,764 19% 47,823 65,473 37% Products 19,145 24,268 24,230 33,904 40% 82, ,546 23% Sales Expenses - Products 10,256 14,612 12,880 21,599 68% 49,942 59,347 19% Administrative Expenses - Products 8,889 9,656 11,350 12,304 8% 32,495 42,199 30% Services 6,676 7,693 7,616 10,490 38% 21,111 32,474 54% Sales Expenses - Services 1,643 2,148 2,378 3,030 27% 5,784 9,199 59% Administrative Expenses - Services 5,033 5,545 5,237 7,460 42% 15,328 23,274 52% Total Sales and Administrative 25,820 31,961 31,845 44,394 39% 103, ,020 29% Management Salary 995 1,117 1,113 1,005-10% 3,437 4,229 23% Total Sales, Administrative and Management Salary 26,815 33,077 32,958 45,398 38% 106, ,249 29% % Products 74% 76% 76% 76% 80% 76% % Services 26% 24% 24% 24% 20% 24% Sales Expenses/Total Net Revenues 46% 52% 48% 55% 54% 51% Administrative Exp./Total Net Revenues 54% 48% 52% 45% 46% 49% Management Salary/Total Net Revenues 4% 3% 3% 2% 3% 3% Expenses/Net Revenues - Total 22% 21% 22% 31% 21% 24% Expenses/Net Revenues - Products 22% 21% 22% 31% 21% 24% Expenses/Net Revenues - Services 20% 20% 19% 27% 18% 22% The Consolidated Sales and Administrative Expenses and the Management Salary increased 29% in 2011 fiscal year and reached R$138.2 million versus R$107.0 million in 2010 fiscal year. This difference is due to the growth in Administrative and Sales Expenses in the period. The Sales Expenses in 2011 presented 23% growth reaching R$68.5 million versus R$55.7 million in This variation is associated to the growth of Sales Expenses of both Products and Services segments, due to mainly to the growth in Net Consolidated Revenues, lay-offs expenses and increase in commissions paid. The Administrative Expenses in 2011 presented 37% growth reaching R$65.5 million versus R$47.8 million in This variation is associated to the growth of Administrative Expenses in both Products and Services segments, mainly due to lay-offs expenses, new units and the Shared Service Center (CSC) that entered in operation in the period. The Consolidated Sales and Administrative and the Management Salary grew 38% in the 4Q11 and reached R$45.4 million versus R$33.0 million in the 3Q11. This difference is due mainly to the growth in Administrative and Sales Expenses in the period. The Sales Expenses in the 4Q11 presented growth of 61% reaching R$24.6 million versus R$15.3 million in the 3Q11. This variation is associated to the growth of Sales Expenses of both Products and Services segments, due mainly to the recognition of losses with fines from clients, besides lay-offs expenses. The Administrative Expenses in the 4Q11 presented growth of 19% reaching R$19.8 million versus R$16.6 million in the 3Q11. This variation is associated to the growth of Administrative Expenses mainly of the Services segment, due mainly to lay-offs expenses.