For the year ended december 31, 2012 and 2011

Board of directors’ reportand consoLidated financiaL stateMents

tei&c s.a.

During the fiscal year ended December 31, 2012, TEI&C S.A. (TEI&C) was

the holding company of a group of companies that provide Engineering,

Procurement, Construction, Operation and Management for large-scale projects

at a global level to the following market segments: Oil and Gas, Energy,

Pipelines, Industrial Plants, Oil Refineries, Mining, and Major Civil and

Architecture Works. References in this annual report to TEI&C or “Company”

refer to TEI&C S.A. and its consolidated subsidiaries.

Thanks to its experience and its local roots in every country where it operates,

the Company and its subsidiaries are able to develop high-complexity

projects, from the design to the start-up, maintenance, operational and

management services, protecting the environment and ensuring the welfare

of the communities where it operates.

TEI&C develops its projects under ISO 9001, ISO 14001 and OHSAS 18001

standards, thus assuring the quality, health, safety and environmental

conditions required by the client.

With more than 65 years of experience and around 20,000 employees

worldwide, the Company has completed more than 3,500 projects in America,

Europe, Asia and Africa.

2

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I&C

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THE COMPAny

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revenue By Business segMent

oil & gas

mining

iron & steel and other industries

energy

pipelines

CiVil

others

revenue By country

argentina

brazil

mexiCo

peru

uruguay

Chile

boliVia

others

30%

21%

17%

13%

7%

4%

8%

40%

23%

13%

11%

5%

4%

2%

2%

personneL

deC 2010 deC 2011 deC 2012

19,69216,575

22,538

revenue

Jul 2010/deC 2010(6 months)

Jan 2011/deC 2011

(12 months)

Jan 2012/deC 2012

(12 months)

7841,632

1,888

key figures

reVenue

ebitda

ebitda %

profit

total equity

roe(profit /aVerage equity)

1,887.6

190.6

10%

143.4

763.7

20%

1,632.2

253.1

16%

211.4

694.0

31%

783.9

58.5

7%

47.5

665.3

7%

USD MIllIOnSJan 2012 / deC 2012

Jan 2012 / deC 2012

USD MIllIOnS

Jul 2010 / deC 2010 (6 months)

Jan 2012 / deC 2012 (12 months)

Jan 2011 / deC 2011 (12 months)

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I&C

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InDEx

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2Board of directors’ report

consoLidated financiaL stateMents

overview of the yearprospects for fiscal year 2013economic and financial informationmajor Works executed during the year per Countrytei&C subsidiaries’ activities for the year ended december 31, 2012engineeringhuman resourcesprocurementtei&C equipment division health, safety and environment (hse)qualitytechnology and it systemsboard of directors

legal informationreport of the auditorsConsolidated statement of financial positionConsolidated income statementConsolidated statement of Comprehensive incomeConsolidated statement of Changes in equityConsolidated statement of Cash flows index to the notes to the Consolidated financial statements

09 1013 19

22

3738383940404143

4950525455566063

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Board of directors’ report

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I&C

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Pascua lama, Phase III, for Barrick Exploraciones Argentinas S.A.

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overvieW of tHe year

During this fiscal year, ended December 31, 2012, the Company

recorded consolidated revenues for USD 1,887.6 million.

The most significant projects were developed through its

subsidiaries in Argentina, Brazil, Peru, Mexico, Uruguay

and Chile. In addition, other important projects were

carried out in Bolivia, Colombia, Central America and the

Caribbean, providing engineering, procurement, construction,

operational and management services to a wide range of

clients in the infrastructure, industrial and energy areas.

In Argentina, in the mining area, through the Company’s

subsidiary Techint Compañía Técnica Internacional S.A.C.I.

(TEARG), works were continued at the Phase III of the

Pascua Lama construction project for Barrick Exploraciones

Argentinas S.A., an affiliate of Barrick Gold Corp. of Canada.

As regards the execution of services, works and supplies for

construction of the Río Colorado Potassium Plant, for Potasio

Río Colorado S.A. (owned by Vale, of Brazil), the works

were suspended in December 2012, following the client’s

instructions. On March 12, 2013, such client notified the

termination of the contract for the construction of the plant,

and requested the Company to stop the provision of goods

and services. TEARG and its partners in the Joint Venture (JV)

are currently reviewing the closing of legal and contractual

terms and conditions, and the demobilization works deriving

from such termination.

In turn, in the energy sector, the Company continued with

the works for the construction of the Punta Negra hydro dam

for Energía Provincial Sociedad del Estado (EPSE). In March

2012, the Company entered into a contract for Consulting

Services and Technical Assistance to be provided at Atucha

II Nuclear Power Plant, thus continuing the business

relationship after completion of Stage II works, which

comprised piping ends, civil works, painting, insulation and

ancillary power services.

With respect to oil & gas sector, the Company completed

the works at the gasoil hydrodesulphurization plant (HTG) for

YPF S.A. at La Plata refinery.

Also in Argentina, in the architecture and infrastructure works

segment, and related to the contract with Subterráneos

de Buenos Aires Sociedad del Estado (SBASE) for the

construction and commissioning for commercial exploitation

of Subway Line H, by means of a Memorandum of

Understanding signed on December 19, 2012, the scope of

the project was redefined and a 24-month extension was

agreed for the term of execution.

In Brazil, the Company’s subsidiary Techint Engenharia e

Construção S.A. (TEBRA) continued working in the Retarded

Coke Unit Complexo Petroquímico do Rio de Janeiro Project

(COMPERJ) and Wellhead Platforms (WHP) 1 and 2 Project

for OSX Leasing Group B.V. In turn, the projects Diesel Unit

of Landulpho Alves de Mataripe Refinery (RLAM) and Lot I

Tanks Refinaria do Nordeste, Abreu e Lima (RNEST) (both for

Petróleo Brasileiro S.A. (Petrobras)) were completed during

the year.

In Peru, Techint S.A.C. (TESAC), the Company’s subsidiary,

continued working at the Loops del Sur Project, the Fenix

Power Project, Camisea Pipeline Maintenance and the

Camisea Well Head Compression Project. Also during this

fiscal year, TESAC was awarded the Toromocho Project for

Minera Chinalco Perú S.A.

Regarding Mexico, and through the Company’s subsidiary

Techint S.A. de C.V. (TEMEX), works were continued at

Tuxpan Compressor Station for Energía Occidente de México

S. de R.L. de C.V. and Norte II Combined Cycle Power Plant

in association with Samsung E&C. New projects were

awarded during the year such as Tamazunchale Facilities and

Naranjos Compressor Station, both for Transportadora de Gas

Natural de la Huasteca S. de R.L. de C.V., and the Ethane

Pipeline Project for Gasoducto del Sureste S. de R.L. de C.V.

With reference to Uruguay, Techint Compañía Técnica

Internacional S.A.C.I. (TEURU), TEI&C’s subsidiary in this

country, maintained its high level of activity during this

fiscal year through civil and water infrastructure projects.

Likewise, Celulosa y Energía Punta Pereira S.A. awarded

TEURU the construction of the water intake and effluent

outfall pipeline of its paper pulp plant. Also in Uruguay, the

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Company, through TEARG branch, continues developing the

“San Carlos – Melo Electricity Interconnection” project for

Administración Nacional de Usinas y Transmisiones Eléctricas

de Uruguay.

As regards Chile, Techint Chile S.A. (TECHI), the Company’s

subsidiary, renewed its contract with Minera Escondida

Limitada for the Mechanical Maintenance Service until

March 2013. It also continued with other mining projects in

progress, like Pascua Lama (for Compañía Minera Nevada

Ltda.) and Plantas Valle de Huasco (for CAP Minería -

Compañía Minera del Pacífico S.A.). In turn, Sierra Gorda

Sociedad Contractual Minera awarded TECHI the project for

the construction of stations and pipeline for seawater supply

in the Antofagasta region.

In Central America and the Caribbean, the Interconnects

Project for Phoenix Park Gas Processors reached 100%

progress during the year. Additionally, Central American

Interconnection System (SIEPAC) Substation, SIEPAC I and

SIEPAC II are under warranty period.

In Bolivia, the works of the Company´s subsidiary Techint

Ingeniería y Construcción Bolivia S.A. (TEBOL) at the

Margarita project for Repsol YPF E&P Bolivia S.A. were

concluded during the year.

Engineering and construction works in pipe and steel plants

continued with a very high level of activity during this year

for Siderca S.A.I.C. and Siderar S.A.I.C. in Argentina, and

for Ternium de México S.A. de C.V. and Tubos de Aceros de

México S.A. de C.V. in Mexico.

In the area of steel and iron services, the Company, through

its subsidiaries, continued rendering services of Heavy

Duty Cleaning, Industrial Cleaning and Electromechanical

Maintenance. Also during the year, the Company

continued with the loading and transportation services

at Petacalco Project.

Regarding engineering services, the Company continued with

conceptual, basic and detail engineering mainly associated

to ongoing engineering services contracts and other projects

already completed. On the other hand, the Company

also continued to assist in the development of technical

specifications and evaluation of investment projects.

All these activities were undertaken acknowledging the

importance of and strictly complying with the rules and

regulations governing environmental protection, and seeking

the constant improvement of the safety, health and training

of the human resources involved.

prospects for fiscaL year 2013

The Company expects to maintain its presence and activity

level in some Latin American (LATAM) countries. This market

will continue being very active in terms of engineering and

construction in the energy and oil & gas segments, and

mainly in the mining sector. The Company is convinced that

its extensive deployment in this region, and its knowledge of

clients’ local needs and engineering and construction practices

in these countries will be key and positive distinctive factors

for TEI&C. This strategy has been adopted due to the high

number of business opportunities offered by the region and to

the strong competition from European and Asian E&C firms,

which are trying to enter the LATAM market as a result of their

local market crisis and fierce competition.

Likewise, there are sufficient grounds to support TEI&C’s

high expectations of enhancing its marketing positioning in

Brazil, particularly in the offshore sector. The Company will

face significant challenges, such as the accomplishment of

important milestones in the WHP for OSX, and the potential

execution of new projects for Petróleo Brasileiro S.A.

(Petrobras) and other clients. Furthermore, the investment

plan to continually improve TEI&C´s offshore yard operational

capacity will be carried on with new initiatives; we can

highlight the construction of a 300-meter quay that will allow

us to perform more complex projects and therefore gain

access to new segments of the offshore sector. Despite its

strong focus on the offshore opportunities, the Company

will also redouble its efforts in other traditional markets such

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as oil refineries, industrial plants and pipelines, by seeking

strategic partnerships and by analyzing in depth how to

optimize its competitiveness.

In Peru, the Company expects an intense activity in

mining plant expansions and new projects, mainly of

copper and gold. In the oil & gas industry, where TEI&C

has actively participated for several years, there will be

important opportunities for the execution of engineering

and construction works in the expansion of existing pipeline

systems and compression facilities.

Particularly in Chile, in the mining segment, the Company

foresees important opportunities for the execution of several

major pipeline projects (water and concentrate), including

pumping and choking related facilities, other service facilities,

processing facilities and transmission lines. Furthermore,

we will seek to expand the maintenance works that we are

currently executing in some mining plants in Chile to other

LATAM countries.

In Uruguay, the Company’s purpose is to participate in

engineering and construction projects for the state-owned

oil company. In the power generation and transmission

segment as well as in large civil infrastructure works, TEI&C

will continue screening projects to focus on those where it

has the greatest chances of success. Also the Company is

expected to continue growing in the infrastructure sector

given the clear intention of the government to invest in this

area. In road works, the Company is awaiting the award of

the Route 9 contract, taking advantage of a price recovery

in road undertakings. Regarding water and sewage facilities,

the Company will continue working with the Uruguayan

WHP 2 Platform for OSx leasing Group B.V.

12

TE

I&C

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government, and anticipates an extension of the existing

contracts. In the mining sector, the Company is waiting

for the final decision over Aratiris Iron Mining from Ferrous

Indian Group.

In the Colombian mining and oil & gas sectors, the Company

will continue participating in calls for bids related to

engineering and construction activities.

Bidding opportunities in process plants for the oil & gas

industry such as oil & gas separation/treatment facilities,

refineries and basic petrochemical plants are also anticipated

in the countries mentioned herein and TEI&C expects to be

an active player in selected projects.

TEI&C’s capability to successfully complete on time and

within budget engineering and construction projects,

as well as to achieve worldwide standards in safety

and quality will be the Company’s key pillars to sustain

its important participation in the LATAM engineering

and construction market.

Taking into account the capabilities now available to the

Company, it is anticipated that it will manage to keep the

current level of activity in both the private and public sectors.

As a consequence of the corporate restructuring mentioned

in section Economic and Financial Information, the action

plans in relation to Argentina, Mexico and Ecuador described

below, shall be carried out in the new engineering and

construction holding company, Techint Construcciones

Holding S.A. (hereinafter “TECHOLD”).

In Argentina, in the mining sector, TECHOLD will continue

with engineering and construction works. The oil & gas

segment represents a challenge in markets and there are

several growth opportunities for TECHOLD, in which it may

prove its expertise and incorporate new technologies.

In Mexico, TECHOLD will primarily focus on the development

of new markets, and will deepen its participation in the

energy segment. Some of the new business opportunities

TECHOLD is pursuing are in the mining sector, an area

where subsidiaries has been creating a business structure

and forging alliances with related companies. In addition,

TECHOLD is seeking to increase its presence in the

pipeline sector, underpinned by the experience gained in

several bidding processes during this fiscal year, taking

advantage of the Techint Group´s know-how and expertise

in order to look for new business opportunities in public

bids. Likewise, TECHOLD is seeking new business

opportunities in Central America, based on the previous

experience gained in projects related to pipeline and

transmission lines in these countries.

In turn, in Ecuador, incipient opportunities in the mining area

will be analyzed to confirm the company strategic alignment.

In the oil & gas industry, there will be important opportunities

for the execution of engineering and construction works.

In relation to the support to Techint Group’s companies

in the steel and oil & gas sectors, we will continue

delivering engineering, construction and maintenance

services to expand and maintain current steel plants

and pipeline systems.

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econoMic and financiaL inforMation

suMMary of consoLidated incoMe stateMent

USD MIllIOnS

Revenues from construction contracts and other services

Cost of revenue

gross profit

General, administrative and selling expenses

Other operating results

operating income

Financial results, net

Result from investments in associated companies

income before income tax

Income tax

net income

attributable to:

Equity holder of TEI&C

non-controlling interests

12.31.12

1,887.6

(1,596.5)

291.1

(166.3)

14.2

139.0

39.7

0.5

179.2

(35.8)

143.4

136.7

6.7

143.4

1,632.3

(1,389.3)

243.0

(181.5)

144.6

206.1

16.9

1.5

224.5

(13.1)

211.4

204.7

6.7

211.4

12.31.11

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TE

I&C

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Revenues of the year ended December 31, 2012, reached

USD 1,888 million. In the previous fiscal year revenues were

USD 1,632 million.

Gross profit for this fiscal year was USD 291.1 million,

representing 15% of the revenues (as well as in the previous

fiscal year).

EBITDA (Earnings before Interest, Tax, Depreciation and

Amortization) for this year amounted to a total of USD 190.6

million, representing 10% on revenues.

General, administrative and selling expenses represented 9%

of the revenues. In last fiscal year, they represented 11%.

The other operating results showed a profit of USD 14.2

million, mainly generated for the sale of Property, Plant &

Equipment (PP&E). In the previous fiscal year, they showed

a profit of 144.6 million (mainly due to profits deriving from

the recognition of claims submitted by TEBRA in relation

to the civil works contract executed in 1991 by TEBRA with

the Ministry of Education and Sports for the construction

of 200 units of the Integrated Center for Child Support (CIAC,

according to its acronym in Portuguese)).

Financial results showed a gain of USD 39.7 mainly originated

in the financial result deriving from the accrual of the Reference

Stabilization Index (RSI) of the balance to be collected from

the Argentine Government by the Company in its capacity

as member of the TEARG - Impregilo S.p.A. (Sucursal

Argentina) - Iglys S.A. J.V. and the restatement and interest

on claims, net of foreign exchange transaction results.

The income tax expense amounted to USD 35.8 million.

Finally, net income for the year was USD 143.4 million,

representing 8% of revenues (preceding fiscal year

USD 211.4 million and 13%, respectively).

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TEI&C’s consolidated majority shareholders’ equity as of

December 31, 2012, reaches USD 744.2 million as compared

to USD 668 million at the beginning of the year. The increase

of USD 76.2 million is mainly due to the income obtained net

of cash dividend distribution (USD 35 million) and currency

translation differences.

Current Assets increased USD 197.3 million mainly due to

an increase in Cash and cash equivalents, trade and other

receivables and inventories. As regards Current Liabilities,

the increased (USD 96.6 million) is due principally to an

increase in trade and other payables. Thus, the Company’s

working capital, as of the end of this year, amounts to USD

409.1 million, representing an increase of USD 100.7 million

with respect to the previous fiscal year.

While Non-Current Assets increased USD 37.7 million mainly

due to trade and other receivables, Non-Current Liabilities

increased USD 68.7 million mainly due to other liabilities and

long-term bank borrowings.

suMMary of consoLidated

stateMent of financiaL position

USD MIllIOnS

assets

non-current assets

Current assets

total assets

equity

Majority Shareholders

non-Controlling interests

total equity

Liabilities

non-current liabilities

Current liabilities

total Liabilities

total equity and Liabilities

12.31.12

623.7

960.0

1,583.7

744.2

19.5

763.7

269.1

550.9

820.0

1,583.7

586.0

762.7

1,348.7

668.0

26.0

694.0

200.4

454.3

654.7

1,348.7

12.31.11

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I&C

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suMMary of consoLidated stateMent of casH fLoWs

As regards the financial situation, there was a cash and cash

equivalents net increase of USD 104.7 million along the fiscal

year, with a final balance of USD 303.1 million.

TEI&C’s cash increased USD 124.6 million from its operating

activities, which is mainly associated to the income for the

year, net of the items that did not generate cash movements

and the increase of trade and other payables and tax liabilities,

which were partially decreased by income tax payments and the

increase of trade accounts receivable, inventories and tax assets.

In relation to investment activities, there was a cash

decrease of USD 19 million mainly due to the flow

generated in the purchase/sale of PP&E, net of the

decrease in other investment.

Regarding financing activities, the proceeds from borrowings

net of the dividend distribution and the repayment of

borrowings generated an increase of funds of USD 3.0 million.

USD MIllIOnS

net cash and cash equivalents at the beginning of the year

net cash generated by operating activities

net cash used in investing activities

net cash generated by (/ used in) financing activities

net increase (/ decrease) in cash and cash equivalents

Effect of exchange rates changes

net cash and cash equivalents at the end of the year

12.31.12

198.4

124.6

(19.0)

3.0

108.6

(3.9)

303.1

327.0

54.4

(100.7)

(75.3)

(121.6)

(7.0)

198.4

12.31.11

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The main financial indicators are:

On February 22, 2013, the Company’s Board of Directors

provided for the payment of a dividend in cash for the sum

of USD 35,000, to be paid on such date to its controlling

shareholder, Techint Investments NV.

As a result of a new shareholders’ arrangement, on March

14, 2013, all the shares of the Company were transferred

to a new shareholder denominated PROSAT S.A. (company

which is currently taking the steps for a change in its

corporate name to "Techint Construcciones Holding S.A."),

hereinafter "TECHOLD", a new holding of companies

providing engineering, procurement, construction, operation

and management services. This is a holding company

organized in Uruguay, which shall control the engineering and

construction business specially in the American continent.

By virtue of the new business guidelines, TEI&C provided

for a dividend in kind for the sum of USD 349,568 to be paid

to its new shareholder TECHOLD. Through such payment,

it transferred all the interests of the Spanish subsidiaries

Techint Ingeniería y Construcciones SLU and PREGLOSID

SLU, companies which consolidate the provision of

engineering, construction and service management mainly

of their subsidiaries in Argentina, Ecuador, Canada, Central

America, Netherlands and Mexico.

The dividends in cash and in kind were ratified by the

new shareholder TECHOLD by means of a Special

Shareholders’ Meeting held on March 15, 2013; therefore,

it ratified the allocation of accumulated results for the sum

of USD 384,568.

Financial solvency (Assets / liabilities)

liquidity (Current Assets / Current liabilities )

Indebtedness (liabilities / Equity)

Gross profit

12.31.12

1.9

1.7

1.1

15%

2.1

1.7

0.9

15%

12.31.11

indicators

18

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I&C

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USD MIllIOnS

non-Current Assets

Current Assets

total assets

Shareholders’ Equity

Attributable to the Company’s Equity Holders

Share Capital

legal Reserve

Other Reserves

Retained Earnings

non-Controlling Interests

total equity

non-Current liabilities

Current liabilities

total Liabilities

total equity and Liabilities

12.31.12

623.7

960.0

1,583.7

218.6

30.1

(96.3)

591.8

19.5

763.7

269.1

550.9

820.0

1,583.7

355.1

460.8

815.9

218.6

30.1

(26.9)

207.2

(17.1)

411.9

141.0

263.0

404.0

815.9

12.31.12 after effect

of Group´s restructure

operation

(268.6)

(499.2)

(767.8)

–

–

69.4

(384.6)

(36.6)

(351.8)

(128.1)

(287.9)

(416.0)

(767.8)

effect of Group´s

restructure operation

In order to reflect the changes that took place after closing in the

amounts as of December 31, 2012, the allocation of such amounts

is shown below on a comparative and simplified basis:

As a result of these transactions, TEI&C shall focus on

engineering, construction and service management, especially

of its subsidiaries in Brazil, Chile, Colombia, Peru and Uruguay.

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MaJor Works eXecuted during tHe year

per country

TEI&C’s subsidiaries provide full engineering, procurement,

construction, operational and management services to

develop and execute major engineering and construction

projects. The main projects executed during the fiscal year

are listed below.

argentina

Pascua lama Phase III

Potasio Río Colorado (c)

Subway line H Expansion

Punta negra Hydroelectric Power Station

Works and Services in siderurgical plants

BraziL

Retarded Coke Unit Complexo Petroquímico

do Rio de Janeiro (COMPERJ)

WHP 1 and WHP 2 Platforms

MeXico

norte II CCC Power Project

Ethane Pipeline Project

Works and Services in siderurgical plants

Tamazunchale Facilities

Petacalco Project - Maintenance and Operational Contract

Tuxpan Compressor Station

Barrick Exploraciones Argentinas S.A.

Potasio Río Colorado S.A.

Subterráneos de Buenos Aires S.E. (SBASE)

Energía Provincial Sociedad del Estado (EPSE)

Siderar S.A.I.C. - Siderca S.A.I.C.

COMPERJ Petroquímicos Básicos S.A.

OSx leasing Group B.V.

KST Electric Power Company

Gasoducto del Sureste S. de R.l. de C.V.

Ternium de México S.A. de C.V. -

Tubos de Aceros de México S.A. de C.V.

Transportadora de Gas natural de la Huasteca

S. de R.l. de C.V.

Comisión Federal de Electricidad (CFE)

Energía Occidente de México S. de R.l. de C.V.

contract totaL aMount

(usd million)

countrY / proJect cLient

1,449

1,037

539

514

172

1,018

734

333

242

147

67

36

24

(a) projects under a consortium/JV. the amount corresponds to total contract amount at 100%. see note 20 to the financial statement.(b) the amount corresponds to annual revenues. (c) see description of the project within the argentina mining segment.(d) see description of the project within the uruguay architecture and infrastructure segment.

(a)

(a)

(a)

(a)

(b)

(a)

(a)

(b)

(b)

20

TE

I&C

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.

peru

Camisea Pipeline Maintenance

Camisea Well Head Compression Project EPC 30

loops del Sur - Preliminary Works

Toromocho Project

Fenix Power Project

uruguay

Puerto Montes del Plata

San Carlos – Melo Electricity Interconnection

Maldonado Sewage System

Construction of Water Intake and Effluent Outfall Pipeline

Ciudad de la Costa Storm Drainage System (d)

Environmental Works in Maldonado and Punta del Este

cHiLe

Construction of Stations and Pipeline for Seawater Supply

Mechanical Maintenance Service

Plantas Valle de Huasco

Compañía Operadora de Gas del Amazonas S.A.

(COGA)

Pluspetrol Corporation Perú S.A.

Transportadora de Gas del Perú S.A. (TGP)

Minera Chinalco Perú S.A.

Fenix Power Perú S.A.

Zona Franca Punta Pereira S.A.

Administración nacional de Usinas

y Transmisiones Eléctricas

Obras Sanitarias del Estado (OSE)

Celulosa y Energía Punta Pereira S.A.

Consorcio Canario Ciudad de la Costa S.A.

Obras Sanitarias del Estado (OSE)

Sierra Gorda Sociedad Contractual Minera

Minera Escondida limitada

CAP Minería – Compañía Minera del Pacífico S.A.

countrY / proJect cLient

168

111

84

82

38

144

89

40

24

18

15

148

95

32

MaJor Works eXecuted during tHe year

per country (COnT’D.)

(a) projects under a consortium/JV. the amount corresponds to total contract amount at 100%. see note 20 to the financial statement.(b) the amount corresponds to annual revenues. (c) see description of the project within the argentina mining segment.(d) see description of the project within the uruguay architecture and infrastructure segment.

(a)

(a)

(a)

(b)

contract totaL aMount

(usd million)

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MEXICO

Oil and GasTuxpan Compressor Station.Tamazunchale Facilities.Naranjos Compressor Station.

EnergyNorte II CCC Power Project.

PipelineEthane Pipeline Project.

Iron and Steel Plants and Other IndustriesTernium de México S.A. de C.V. Plant in Monterrey.Tubos de Aceros de México S.A. de C.V. Plant in Veracruz.Petacalco Project - Maintenance and Operational Contract.

COLOMBIA

Oleoducto Al Pacífico Project.

Iron and Steel PlantsManizales Plant.

1.

2.

3.

4.

5.

6.

7.PERU

Oil and GasCamisea Well Head Compression Project.

PipelinesCamisea Pipeline Maintenance.Loops del Sur – Preliminary Works.

EnergyFenix Power Project.

MiningToromocho.

BRAZIL

Oil and GasRetarded Coke Unit Complexo Petroquímico do Rio de Janeiro (COMPERJ).WHP 1 and WHP 2 Platforms.

CHILE

MiningMechanical Maintenance Service.Plantas Valle de Huasco.

PipelinesConstruction of Station and Pipeline for Seawater Supply.

ARGENTINA

EnergyPunta Negra Hydroelectric Power Station.

MiningPascua Lama Phase III – Construction.Potasio Río Colorado.

Infrastructure WorksSubway Line H Expansion.

Iron and Steel PlantsSiderar S.A.I.C. Plant in San Nicolás.Siderca S.A.I.C. Plant in Campana.

URUGUAY

Architecture and Infrastructure WorksEnvironmental Works in Maldonado and Punta del Este.Maldonado Sewage System. Ciudad de la Costa Storm Drainage System.Puerto Montes del Plata.Construction of Water Intake and Effluent Outfall Pipeline.

EnergySan Carlos – Melo Electricity Interconnection.

10

1

2

2

3 4

7

6

5

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tei&c suBsidiaries’ activities

for tHe year ended deceMBer 31, 2012

argentina

During this fiscal year, revenues reached the sum of

USD 756 million.

The main projects developed during this year include:

MINING

Throughout its history, TEI&C has developed mining projects

involving copper, gold, silver, zinc, potassium and lithium,

providing engineering, procurement, construction, operation

and integral maintenance services at mining plants.

Its vast experience in the mining segment enables the

Company to design and build processing plants, structures,

Punta negra Hydroelectric Power Station for Energía Provincial S.E. (EPSE).

revenue

194

535

756

Jul 2010 / deC 2010

(6 months)

Jan 2011 / deC 2011

(12 months)

Jan 2012 / deC 2012

(12 months)

USD MIllIOnS

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industrial and service buildings, water pipelines, slurry lines and

perform civil works, such as roads, access ways and ports.

Pascua Lama – Barrick Exploraciones Argentinas S.A.

This is a binational mining undertaking (gold and silver),

located in the border between Chile and Argentina.

TEARG is associated in a JV, on a 50/50% basis, with Fluor

Argentina Inc. Argentine Branch to carry out the works

divided into three phases: Phase I - Consolidation of Basic

Engineering and Feasibility Study of the Project; Phase

II - Detail Engineering and Procurement Management, and

Phase III - Construction Management and Construction.

Phase I was completed in 2007, and Phase II, during 2011.

At present, Phase III is in progress, and the estimated date

for completion of Processing Line 1 is August 2014; of

Processing Line 2, November 2014, and of Processing Line

3, March 2015. The progress as of December 2012 is 30%.

The estimated total amount for Phase III is approximately USD

1.45 billion, value that corresponds to 100% of the contract.

Potasio Río Colorado – Potasio Río Colorado S.A.

On October 25, 2010, a JV was created between

Constructora Norberto Odebrecht (45%), Odebrecht

Argentina (15%) and TEARG (40%) for the management

and construction of Phase I of the Potasio Río Colorado

plant, comprising the facilities for extraction, processing

and commercialization of potassium chloride. This non-

flammable, non-contaminant and non-toxic product is

used as a fertilizer in agriculture. For the extraction and

exploitation of the mineral, a low environmental impact

technology shall be used.

Due to the client’s financial hardship, the works were

suspended in December 2012. On March 12, 2013, the client

notified the termination of the contract for the construction

of the plant, and requested the Company to cease the

provision of goods and services. TEARG and its partners

in the JV are currently reviewing the closing of legal and

contractual terms and conditions, and the demobilization

works deriving from such termination.

The works were developed at Cañadón Amarillo, department

of Malargüe, in the south of the province of Mendoza.

As of December 31, 2012, the progress for Phase I works

is 26%.

Cerro Negro Project – Oroplata S.A.

In October 2012, the Company started procurement and

construction management activities in Dique de Colas of

the Cerro Negro Project, located to the northwest of the

Province of Santa Cruz, for Oroplata S.A.

In December 2012, the client entrusted the Company with

the management of two other projects: Camino de Acarreo

and Camino del Este. The first project consists of a 15-km

rubble road, and the second, of a 20-km rubble road.

Completion of the works is scheduled for June 2013.

ENERGY

The Company entered the Energy segment in the 50s, when

it started to provide engineering and construction services in

transmission lines and hydroelectric power plants. Since then,

TEI&C has acquired vast experience in this area through the

execution of projects involving transmission lines and transformer

stations, power generation undertakings in hydroelectric plants,

conventional thermal power plants, combined cycle, diesel

power, coal-fired and nuclear power plants.

Punta Negra Hydroelectric Power Station – Energía Provincial

S.E. (EPSE)

The contract was executed between EPSE and the TEARG-

Panedile JV, where the Company has a 75% participating

interest. This project is on the San Juan river, and it is

intended to increase the regulation of such an essential river

for San Juan’s economy, and to add 65 MW to the generation

system of the province.

Works were commenced in January 2010, the river deviation

channel was executed in August 2011 and, at present, the

works comprising the dam backfill, dam concrete face,

spillway tunnel excavation, reinforced concrete of spillway,

reinforced concrete of the machinery house, and sub-

floor of the adduction tunnel are in progress. The updated

contract amount is nearly USD 514 million, and the works are

estimated to be completed in August 2015.

As of December 31, 2012, the progress is 44%.

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which has two gas-turbo generators of 40 MW each

one. It was also planned to extend the power station

generation capacity to 160 MW.

The contract corresponded to Phase I of the project,

including:

Development of basic engineering and FEED.

Obtaining offers for the purchase of critical equipment and

the relevant business and technical analysis.

Drafting of a proposal for an EPCM contract for the execution

of the works.

To carry out this project, a JV was created with SENER

Ingeniería y Sistemas S.A., in which TEARG held a 60%

participating interest.

Works were commenced in May 2011 and completed in

March 2012. In October 2012, the client confirmed the

decision not to continue right away with Phase II of the

contract. The Acknowledgement of Completion for the

completed works was signed in December 2012.

Engineering Services, Supplies and Mechanical Assembly at the

Ancillary Building of the Reactor in Atucha II – Nucleoeléctrica

Argentina S.A.

This was a service contract to perform the piping system

erection in the ancillary building of the reactor (UKA

building). The project was carried out in two stages. The first

stage corresponded to piping erection, and the second, to

completion, piping ends and civil works.

Works were completed in February 2012. In March 2012,

the Company entered into a contract to provide consulting

services and technical assistance that, as of December 31,

2012, amounts to USD 0.7 million, and an extension for

approximately USD 0.3 million is anticipated for 2013.

Closing of Cycle at Cerro Dragón FEED – Pan American Energy

LLC Suc. Argentina

The purpose of the project was the conversion to

combined cycle of the power station currently operating,

Subway line H Expansion, Expansion for Subterráneos de Buenos Aires S.E. (SBASE).

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OIL AND GAS

The vast experience of the Company in this sector enables

it to design and build pipelines for the transportation of oil,

gas and by-products, oil and gas treatment plants, facilities

related to transportation systems (pumping compression

stations, storage tanks and other surface facilities) as well as

petrochemical and LNG plants, among others.

Gas Oil Hydrotreatment at La Plata Industrial Complex (HTG at

CILP) – YPF S.A.

The project was awarded on August 9, 2010, and consists of

two activity packages.

Package 1 comprises:

Light Gas Oil Hydrotreatment Unit (HTG-B).

Treatment Unit for Acid Gases with Amines (Amines C).

Conditioning of offsites for the interconnection of new units

with the rest of the complex.

Package 2 comprises the revamping of the existing Gas Oil

Hydrotreatment Unit (HTG-A).

The scope of the project included engineering, supply of

minor installation materials, construction, pre-commissioning

and assistance for commissioning, start-up and performance

tests of the unit. Throughout the year, several stages have

been completed, and the start-up of the most important unit

(HTG-B) took place in July 2012.

However, the project sustained some inconveniences that

prevented it from obtaining the expected results; such

inconveniences were analyzed in detail during the execution of

the project and upon closing, as lessons learned for the future.

Demobilization works were completed in December 2012.

INFRASTRUCTURE WORKS

Civil works have always been related to TEI&C throughout

its history. In recent years, several infrastructure works

have been developed, such as bridges, roads, highways,

tunnels, rail and subway tracks, water pipelines, ports,

airports, effluent and waste water treatment plants,

dams and telecommunication systems. In addition,

the Company performed architectural works, such as

business offices and buildings, housing unit complexes,

cultural and educational premises, penitentiary complexes

and hospitals.

During this fiscal year, the following project was developed:

Subway Line H Expansion – Subterráneos de Buenos Aires S.E.

(SBASE)

On August 15, 2011, SBASE awarded the TEARG Dycasa

JV (where the Company participation is 60%) the integral

construction and commissioning in conditions of commercial

exploitation of the current Subway Line H. The project

includes 4.15 km of tunnels with six stations, workshops,

parking lots and a rectifier substation.

The project includes civil and electromechanical works,

including tracks, power installations, pulling, signaling,

communications, mechanical stairs, elevators and station

equipment.

The contract between the JV and SBASE was executed

on September 16, 2011. The Acknowledgement of

Commencement was granted on October 4, 2011, for a total

term of 43 months. The original contract amount was

USD 376 million.

The failure to pass a resolution with respect to the amparo

action (for the protection of constitutional rights) filed by the

NGO Basta de demoler, which resulted in the suspension

of works at one of the stations, in addition to SBASE’s

failure to define certain aspects in the southern tranche, as

well as on the execution of workshops and parking space,

have led SBASE and the JV to execute a Memorandum of

Understanding to adjust the contract.

Consequently, on December 19, 2012, a Memorandum

of Understanding was executed for the amount of

USD 48 million, establishing a contractual extension

for an additional 24-month term (until April 2017). As of

December 31, 2012, the progress is 3%. The contract

amount, including the Memorandum of Understanding,

and taking into account the last price adjustment of June

2012, is around USD 539 million.

IRON AND STEEL AND OTHER INDUSTRIES

TEI&C has developed highly specialized resources to provide

design, engineering, construction and main maintenance

services to steel-making plants, lamination workshops, blast

and electric furnaces, production facilities, metallurgical

plants, aluminum-making plants and precious metals plants.

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The following works were executed for the plants belonging

to Siderar S.A.I.C. and Siderca S.A.I.C.:

Construction Works – Siderar S.A.I.C. Plant - San Nicolás

The following works carried out in 2012 may be highlighted:

In steel-making, works were started for the new

Continuous Casting, the new water plant; in addition, the

electromechanical works related to Vacuum Degassing (RH

Furnace) were continued.

The relining of Blast Furnace 2 was executed and repairs

were also made in conveyor belt 31 and the Blast Furnace

gas pipeline.

Works were executed in relation to REX (extraordinary

repair) of Continuous Casting 1 and change of shaft of

converter 1, 2 and 3.

At the Coke Oven Plant, expansion works were carried out in

advance facilities for by-product processing.

Total income for this fiscal year was USD 77 million, using

2,600,000 man-hours.

Construction Works – Siderca S.A.I.C. Plant - Campana

The main works executed during this fiscal year that are

worth mentioning include the plant extraordinary repair

(REX 2012), where works were mostly carried out in steel-

making and Continuous Rolling Mill 2 (LACO 2). As a part

of the general structural works in steel-making sections,

crane-support beams were replaced, and connecting

rods in columns and rail welds were reinforced. Works

were continued for the expansion of the fume extraction

system at the steel-making area, the fine dust extraction

devices and the lime loading to bins of Furnace 4 were

assembled, while the third fume filter was started up. In

the lamination area, works comprised the replacement

of nozzles at the top of the tempering furnace and the

revamping of gantry cranes 121 and 11. In addition, two

lathes in the Premium Line were replaced, the ferroalloy

extraction tubes were mounted and works were carried

out on the new passage of Pot Carriers through sections

2 and 4 of the steel-making area. Other works comprised

the expansion of the section and the assembly of

equipment at the inhibitor facility. The works executed

prior to REX 2013, comprised the revamping of Thermal

Treatment 2 and the beginning of works to turn the

direction of sections 2 and 3 in LACO 2.

During the 2012 fiscal year, the Company managed to renew

the contract with the client: the effective term has been

extended from April 2012 to April 2015, and the contract

amount is USD 66 million.

Total income for this fiscal year was USD 24 million, using

948,000 man-hours.

Services – Siderca S.A.I.C. Plant (Campana) and Siderar S.A.I.C.

Plant (San Nicolás)

During this fiscal year, the Company executed these

main services:

Heavy duty cleaning and recycling of iron & steel

sub-products.

Steel and tinplate reel packing.

Light duty cleaning.

OTHER INvESTMENTS AND SERvICES

Railway Cargo Transportation

Ferroexpreso Pampeano S.A. (FEPSA), a company under the

control and corporate decision of TEARG through Compañía

Inversora Ferroviaria S.A.I.F. (COINFER), is the concession

holder of the railway cargo transportation. The company

provides services towards the ports of Bahía Blanca, Rosario,

San Lorenzo and San Martín to exporters, stockers and large-

scale producers within a vast area of the Wet Pampa region.

During the fiscal year, 4.2 million tons of cargo were

transported (a volume similar to the volume transported in

the previous fiscal year).

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BraziL

TEBRA and its subsidiaries perform activities related to

engineering, construction, erection, project management,

petrochemical facilities, offshore projects, power generation,

transmission and distribution, iron and steel units,

transportation systems and infrastructure works in general.

Revenues for this year have reached USD 426 million.

During the current year, works were performed in the

following projects:

OIL AND GAS

Diesel Unit of Landulpho Alves de Mataripe Refinery (RLAM)

– Petróleo Brasileiro S.A.

On June 19, 2008, a contract was signed with Petrobras for

the preparation of the consistency review of the basic project,

Retarded Coke Unit Complexo Petroquímico do Río de Janeiro (COMPERJ) for COMPERJ Petroquímicos Básicos S.A.

revenue

187

425

426

Jul 2010 / deC 2010

(6 months)

Jan 2011 / deC 2011

(12 months)

Jan 2012 / deC 2012

(12 months)

USD MIllIOnS

28

TE

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preparation of the detail project, partial supply of equipment,

supplies of bulk material, civil construction, electromechanical

erection, pre-commissioning, commissioning and technical

assistance during the pre-operation, start-up and assisted

operation of the HDT of Diesel (U-37) and UGH (U-38) units,

the Power Sub-station SE-37 and the Control Room (K-3701)

at the Landulpho Alves de Mataripe Refinery, state of Bahia.

It was a lump sum contract executed under a JV with Andrade

Gutiérrez (50% / 50%).

The project was completed in May 2012.

LOT I Tanks Refinaria do Nordeste, Abreu e Lima (RNEST)

– Petróleo Brasileiro S.A.

In 2009, a contract was entered into with Petrobras for the

preparation of the consistency review of the basic project,

detail engineering, supply of materials, supply of equipment,

civil construction, electromechanical assembly, preservation,

conditioning, support and tests for the pre-operation of Lot I

Tanks of RNEST refinery, belonging to Petrobras, in Ipojuca,

state of Pernambuco. It was a lump sum contract executed

under a joint venture with Usiminas Mecânica, in which

TEBRA holds a 60% participating interest.

The project was completed in November 2012.

Retarded Coke Unit Complexo Petroquímico do Rio de Janeiro

(COMPERJ) – COMPERJ Petroquímicos Básicos S.A.

In April 2010, a contract was executed with Petrobras for the

preparation of the consistency review of the basic project,

preparation of the detail project, partial supply of equipment,

supply of bulk material, civil construction, electromechanical

erection, interconnections, pre-commissioning,

commissioning and technical assistance during the pre-

operation and assisted operation start-up of the Retarded

Coke Unit (U2200), Manipulation and Storage Yard (U6821)

and two electrical substations.

TEBRA is part of the TE-AG JV with Andrade Gutiérrez, with a

50% participating interest each, under the leadership of TEBRA.

The total value of the contract is USD 1.02 billion (at 100%

of the JV), within an original contractual term of 36 months.

The general progress of the project is 72%.

WHP 1 and WHP 2 Platforms – OSX Leasing Group B.V.

In February 2011, a contract was executed with OSX for

the supply of two drilling and operation fixed platforms

(WHP1 and WHP2), including the execution of basic

engineering, detail engineering, materials and equipment

supply, manufacture, construction and erection of the

elements of these platforms (jackets, stakes, topsides and

accommodation modules). The contract also includes the

preparation of such platforms for transportation, shipment,

offshore integration of the topsides, commissioning and

assisted operation.

The platforms shall be installed by the client at the Campos

Basin, approximately 90 km off the Brazilian shore.

The works shall be executed at the yard owned by TEBRA at

Pontal do Paraná, state of Paraná.

The value of the contract is USD 734 million and the total

term is 34 months.

In April 2012, the basic engineering was completed

and detail engineering was commenced. In addition

to engineering works, other works are being developed,

such as materials supply and equipment, manufacturing,

construction and erection of platform components.

The general progress of the project is 8%.

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By the end of the year, TEMEX, was awarded new projects,

which anticipates a favorable outlook for the Company’s

activities in this country.

Additionally, the Company has consolidated its projects in progress

and continues working on the development of new business lines.

Revenues for this year have reached USD 255 million.

The main projects developed were as follows:

OIL AND GAS

Tuxpan Compressor Station – Energía Occidente

de México S. de R.L. de C.V.

The project consists in the engineering, procurement and

construction of facilities for the erection and commissioning

of the compressor station. These works are located at Jalisco

state. The client will be in charge of the procurement of the

Tuxpan Compressor Station Project for Energía Occidente de México S. de R.l. de C.V.

revenue

107

217

255

Jul 2010 / deC 2010

(6 months)

Jan 2011 / deC 2011

(12 months)

Jan 2012 / deC 2012

(12 months)

USD MIllIOnS

30

TE

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compressor. The contract price is USD 24 million and, as of

December 31, 2012, the progress is 99%.

Tamazunchale Facilities – Transportadora de Gas Natural

de la Huasteca S. de R.L. de C.V.

This project consists in the engineering, procurement,

construction and commissioning of one compressor station, and

five additional stations for control, measurement and regulation

purposes. These works are located in Tamazunchale (San Luis

Potosí State), El Cardona (Hidalgo State) and El Sauz (Querétaro

State). The total contractual value is USD 67 million. As of

December 31, 2012, the overall progress for the project is 9%.

Naranjos Compressor Station – Transportadora de Gas Natural

de la Huasteca S. de R.L. de C.V.

The project consists in the designing, engineering, procurement,

construction and commissioning of one compressor station at

km 18 of the Tamazunchale Pipeline in Naranjos (Veracruz State).

It also includes the expansion of the measurement, reception

and control station at the Naranjos site and the delivery station at

Tamazunchale. The total amount of the contract is USD 39 million.

PIPELINES

Ethane Pipeline Project – Gasoductos del Sureste S. de R.L. de C.V.

The project scope includes the engineering, procurement,

construction, commissioning, testing and start-up of an ethane gas

and liquid pipeline, approximately 236 km long and 24", 20" and 16",

and its related facilities, which starts near Ciudad Pemex (Tabasco

State) and ends at the delivery point, next to the Ethylene XXI Plant

(Veracruz State). The contract amount for this project is USD 242

million. As of December 31, 2012, the progress is 3%.

ENERGY

Norte II CCC Power Project – KST Electric Power Company

The project consists in the design, engineering, procurement,

construction, installation, commissioning, testing and

completion of a combined cycle gas turbine power plant

of at least 433 MW net capacity in summer in the state of

Chihuahua, Mexico. The EPC contract price is a lump sum, fixed

price of USD 333 million. The contract is being developed under

a JV with Samsung engineering, where TEMEX participation is

19%. As of December 31, 2012, the project progress is 99%.

IRON AND STEEL AND OTHER INDUSTRIES

Construction Works – Ternium de México S.A. de C.V.

Professional services for the placement of personnel and

materials for the execution of construction works (including

civil and electromechanical works) and structure erection.

During this fiscal year, the most important activity was the con-

struction of the Greenfield Pesquería project which is estimated to

be completed by the end of 2013. This project entails a Galvanizing

Plant to provide the automotive industry with steel products, and a

Cool Rolling Plant to process the hot rolled pickled strips.

Additionally, the Company executed different works in

Ternium plants all over Monterrey City.

At present, TEMEX, has over 3,000 people working on a

direct basis in these two contracts.

Construction Works – Tubos de Aceros de México S.A. de C.V.

Professional services for the placement of personnel and

materials for the execution of construction works (including

civil and electromechanical works) and structure erection.

Maintenance and steel and iron services works have

continued with an average headcount of 1,100 people.

Petacalco Project, Maintenance and Operational Contract

– Comisión Federal de Electricidad (CFE)

Carbonser S. A. de C.V., of which TEMEX owns 50%, was es-

tablished on 8 August, 1994, and its principal activity is to provide

services for the loading and transportation of coal to the President

Plutarco Elías Calles power plant, located in Petacalco Guerrero.

During this year, the Company unloaded 6.25 million tons of coal

and delivered 5.7 million tons to the CFE terminal in Lázaro Cárde-

nas. The total revenue for this year amounted to USD 36 million.

Heavy Duty Cleaning Service – Tubos de Aceros de México S.A. de C.V.

This service is being provided through Sidernet S.A. de C.V.

to Tubos de Aceros de México S.A. de C.V. since April 2005,

and it comprises the reception of raw materials in the scrap

yard, transportation and processing of slag, and the recovery,

cutting and classification of metal junk.

During this fiscal year, this contract had an average of 178

people working on a direct basis, and the billing for the year

was approximately USD 6.5 million. The actual contract was

awarded on 2009 for a nine-year term.

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peru

TESAC, the Company’s subsidiary in Peru, has considerably

increased its activity in this country during the last fiscal year.

Revenues for this year have reached USD 201 million.

The main projects developed during this year were as follows:

OIL AND GAS

Camisea Well Head Compression Project (WHCP) EPC 30

– Pluspetrol Corporation Perú S.A.

In December 2011, the Company received from Pluspetrol

Perú Corporation S.A. a Letter of Intent and a Notice to

Proceed with the engineering and procurement of main

materials for the installation of two gas compression trains.

The total amount of this project is USD 111 million. The

works started in January 2012 and they are expected

Fénix Power Project for Fénix Power Perú S.A.

revenue

59

107

201

Jul 2010 / deC 2010

(6 months)

Jan 2011 / deC 2011

(12 months)

Jan 2012 / deC 2012

(12 months)

USD MIllIOnS

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to be completed by September 2013. As of December 2012,

the project reaches 24% progress.

PIPELINES

Camisea Pipeline Maintenance – Compañía Operadora de Gas

del Amazonas S.A. (COGA)

The Company provides the maintenance of this gas pipeline.

In July 2010, this contract was renewed for a three-year

period, including the maintenance of Peru LNG pipeline. The

total amount of this contractual renewal is USD 168 million.

Loops del Sur - Preliminary Works – Transportadora de Gas

del Perú S.A. (TGP)

In March 2010, the Company received from TGP the notice

to proceed with the early services for the construction of

two 55 km pipelines of 32” and 24” each, including detail

engineering and early works (set-up of camps, permits, land

rental and other activities).

The scope of the project amounts to approximately USD 84

million, and it is expected to be completed by June 2013.

As of December 2012, the project reaches 97% progress.

ENERGY

Fenix Power Project – Fenix Power Perú S.A.

In October 2011, the Company was awarded a contract

for the above ground mechanical installation for Fenix

Power Perú S.A. This includes the installation of the

steam turbine generator, steam surface condenser,

steel structures, piping, and all the balance of plant

equipment.

At the end of December 2011, TESAC was awarded

an extension of the main contract for the installation

of all the above ground electrical package.

The total amount of this project is USD 38 million and it is

expected to be completed by May 2013. As of December

2012, the project reaches 93% progress.

MINING

Toromocho Project – Minera Chinalco Perú S.A.

In March 2012, the Company was awarded a contract by

Minera Chinalco Perú S.A. for the partial procurement

and complete construction of the concrete placement;

structural steel, architectural, mechanical, piping, painting,

electrical and instrumentation services for the hydromet

plant, filter plant and offloading and storage facilities

in the rail yard area, as well as the procurement and

construction of all electrical and instrumentation works

of several areas for the same project.

The total amount of this project is USD 82 million. The

works started in March 2012 and they are expected

to be completed by August 2013. As of December 2012,

the project reaches 30% progress.

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uruguay

TEURU and TEARG branch Uruguay continue confirming the

Company’s presence in Uruguay through several ongoing projects.

Revenues for this year have reached USD 93 million.

The works developed in road, water and civil projects were

as follows:

ARCHITECTURE AND INFRASTRUCTURE WORKS

Environmental Works in Maldonado and Punta del Este

– Obras Sanitarias del Estado (OSE)

The contract for OSE includes four groups of works: works

for the maintenance of sewage and drinkable water networks

at Maldonado, Punta del Este and other locations within the

Department of Maldonado; sanitation works in the city of

Maldonado; sanitation works in the city of Piriápolis, and an

effluent treatment plant in Punta Fría (Piriápolis).

Maldonado Sewage System for Obras Sanitarias del Estado (OSE).

revenue

46

60

93

Jul 2010 / deC 2010

(6 months)

Jan 2011 / deC 2011

(12 months)

Jan 2012 / deC 2012

(12 months)

USD MIllIOnS

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In this year, the Company continued with part of the works

scheduled for the extension of the contract with UDG [Unidad

de Gestión Desconcentrada] in Maldonado. The total contract

amount is USD 15 million, and records 85% progress.

Maldonado Sewage System – Obras Sanitarias del Estado (OSE)

The Company continued with the works of the project

“Treatment and final disposal of Maldonado and Punta del

Este sewage system”. The contract, executed by the joint

venture formed by TEURU, TEARG branch Uruguay, Montec

and Belfi, and OSE, for an amount of USD 37 million,

comprises the construction of 35 km of piping system, a 4-km

land outfall, civil and architecture works in seven pumping

stations (works to be executed by TEI&C), and a 1 km long

offshore outfall (to be executed by Montec and Belfi). The

term for the works, started in January 2010, is 36 months.

As of December 2012, the works record 93% progress. In

this fiscal year, extensions were awarded for USD 3.4 million

and the completion of these works is scheduled for June

2013. It is expected to continue with similar extension works

since the client is assessing the approval of additional works

for approximately USD 25 million.

Ciudad de la Costa Storm Drainage System – Consorcio Canario

Ciudad de la Costa S.A.

In November 2009, the joint venture formed by TEURU (45%)

and TEARG branch Uruguay (55%) was awarded a contract

with Consorcio Canario Ciudad de la Costa S.A., involving

the construction of 34 km of drainage piping system, 56 km

of gutters and 32 km of road works at Ciudad de la Costa,

Department of Canelones. As of December 2012, the project

reaches 93% progress over the reduced scope of the works.

On December 21, 2012, an “amicable transaction” was

signed with the client to reduce the scope of the contract,

and therefore the contractual term would be effective until

the second quarter of 2013. Thus, the contract amount was

reduced from USD 30 million to USD 18 million.

Puerto Montes del Plata – Zona Franca Punta Pereira S.A.

In June and July 2011, Zona Franca Punta Pereira S.A. awarded

the Company two contracts for the preliminary works and the

construction of the terminal at Conchillas Port, Department of

Colonia. For the execution of these works, a joint venture was

created between Constructora Belfi S.A. Sucursal Uruguay (60%

participating interest) and TEURU (40% participating interest).

Both contracts amount to an aggregate of USD 144 million,

and as of December 2012, the works records 52% progress.

The project completion is scheduled for April 2014.

Construction of Water Intake and Effluent Outfall Pipeline –

Celulosa y Energía Punta Pereira S.A.

In January 2012, the abovementioned joint venture was

awarded a contract by Celulosa y Energía Punta Pereira S.A.

for the construction of the water intake and effluent outfall

pipeline of a paper pulp plant.

The contract includes the supply of labor, tools, equipment,

materials and accessory elements necessary for construction.

The contract amount is USD 24 million. As of December

2012, the project reaches 75% progress. The project

completion is scheduled for July 2013.

ENERGY

San Carlos – Melo Electricity Interconnection – Administración

Nacional de Usinas y Transmisiones Eléctricas

During 2011, TEARG branch Uruguay executed an agreement

with Administración Nacional de Usinas y Transmisiones

Eléctricas de Uruguay (UTE), for the sum of USD 89 million,

for the construction of a 500 kV high voltage line, 348 km long.

The project, with a 20-month term, comprises the development

of engineering, materials supply and construction of the

transmission line under turnkey conditions. Approximately

870 metal towers, weighing 9,400 tons, and over 4,200 km

of aluminum and steel conductors will be installed. The works

were started with some difficulties, and this resulted in a

five-month delay for commencement of the project. As of

December 31, 2012, the works reaches 12% progress.

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cHiLe

Although during this year TECHI reduced its revenues, the

new engineering and construction works awarded will now

let the Company recover its level of activity.

Revenues for this year have reached USD 67 million.

During this fiscal year, works have been executed in the

following projects:

MINING

Pascua Lama – Compañía Minera Nevada Ltda.

See project description in the chapter on Argentina.

For the works at the Chilean side, the expected total contract

amount for Phase III is USD 22 million and the project progress

recorded 30%.

Construction of Stations and Pipeline for Seawater Supply for Sierra Gorda Sociedad Contractual Minera.

revenue

144

191

67

Jul 2010 / deC 2010

(6 months)

Jan 2011 / deC 2011

(12 months)

Jan 2012 / deC 2012

(12 months)

USD MIllIOnS

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I&C

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Mechanical Maintenance Service – Minera Escondida Limitada

In November 2009, a contract was entered into with Minera

Escondida Limitada. This contract corresponds to the

mechanical maintenance service of concentration plants

and an oxide plant located in Antofagasta. It is estimated

that the total sale, including this extension, will amount

to USD 95 million. As of December 31, 2012, the project

records 92% progress.

As of the date of this report, it is expected that the contract

may be extended until March 2015.

Plantas Valle de Huasco – CAP Minería - Compañía Minera

del Pacífico S.A.

In December 2010, TECHI was awarded an EPCM project

to increase the capacity of Los Colorados plants

for pellets (iron mineral). These works comprise

the execution of several phases of the contract,

such as management, review and validation of basic

engineering, detail engineering development,

procurement management, construction administration,

commissioning and start-up. The contract amount

is USD 32 million. As of December 31, 2012, this project

records 73% progress.

PIPELINES

Construction of Stations and Pipeline for Seawater Supply –

Sierra Gorda Sociedad Contractual Minera

During September 2012, Sierra Gorda Sociedad Contractual

Minera (SGSCM) sent to TECHI a Letter of Intent regarding

the award of contract CC-15 “Construction of Stations and

Pipeline for Seawater Supply” [“Construcción de Estaciones

y Pipeline Conducción Agua de Mar”], corresponding to the

Sierra Gorda mining project, located 4.5 km Northwest of

Sierra Gorda town, in Antofagasta.

The contract comprises the installation of approximately 145

km of piping for seawater drive and supply to be used in the

mining process in the mine sector and the processing plants,

which will connect the Mina-Planta and Mejillones sectors.

The seawater drive works for the Sierra Gorda project

encompass the construction of a system consisting of GFRP

(glass-fiber reinforced plastic) tubing and carbon steel tubing,

both of them with a 36" diameter, laid underground (for

GFRP tubing) and over the surface (for carbon steel tubing),

a capture and lift station located inside the thermal power

plant at Mejillones, two main pumping stations located along

the outline and a terminal station located inside the mine

site, at Sierra Gorda.

The contract for USD 148 million was signed on November

16, 2012. At present, soil movement works have started,

and preliminary works are being executed, such as camps

and canteens.

BoLivia

During the year, the Company’s activity focused on

this project:

PIPELINES

Margarita Project – Repsol YPF E&P Bolivia S.A.

The project consisted in the construction of collection lines,

pipeline and loop for the Margarita-Huacaya fields. The works

developed in this project comprised detail engineering,

purchase of material, construction, pre-commissioning, and

assistance for start-up of the GTS (gas collection system)

and EXS (export system) and a 28" loop. The top challenge

of the project was the construction work on the Itahuasuti

and Caipipendi hills, which were very complex due to their

topography. This project was completed during the 2012

fiscal year; the provisional acknowledgement was received

on May 18, 2012, and the punch list completion was received

in November 2012.

centraL aMerica and tHe cariBBean

During the fiscal year ended December 31, 2012, the

Company continued working in the Central American

Interconnection System (SIEPAC), focusing on the

resolution of pending issues during the guarantee period

of the project.

OIL AND GAS

Interconnects Project – Phoenix Park Gas Processors Limited

During 2011, a contract with Phoenix Park Gas Processors

Limited was awarded. The offshore contract, signed

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with Techint International Construction Corp. (TENCO),

covered the engineering and procurement activities which

started in April 2011 and ended during this fiscal year.

While the onshore contract, signed with TEARG Branch T&T,

for construction and local procurement reached a 100%

progress at the end of the year.

coLoMBia

Oleoducto Al Pacífico Project – Enbridge (Colombia) S.A.S.

Enbridge awarded TENCO´s Colombian branch a contract

for the conceptual engineering of a pipeline to transport

heavy crude along 700 km from the Llanos basin to the

Pacific coast. These works were completed in the first

quarter of 2012.

During 2012, the Company continued with the first phase

of the Alternative Environmental Diagnosis. This study will

be completed in the second quarter of 2013.

Manizales Plant – Siderúrgica de Caldas S.A.S. (Ternium)

This project consists in the modernization of a smoke

and dust suction system to control the emissions of gases

at the Manizales steel plant. This contract was awarded

in February 2012, and the construction is expected to be

completed in June 2013.

engineering

During this fiscal year, the level of activity developed,

measured in man-hours, reached 1.5 million hours. The main

engineering works performed are related to projects under

development and others already completed, among which

the following are highlighted:

ARGENTINA

yPF

Sulfur Reduction to 50 PPM in gasoil: detail engineering of two

new treatment units, ancillary services and interconnections,

and revamping of an existing hydrotreatment unit.

Subsequent development of construction engineering for the

above-mentioned facilities.

Gas supply to Minera Vale: development of gas pipeline

extended basic engineering for gas transportation up to

the facilities of Minera Potasio Río Colorado.

TEnARIS InGEnIERíA S.A.

Engineering for the thermal treatment line of seamless

tubes with a diameter up to 9 5/8" including the following:

heating furnaces, tempering and forging heads; cooling

lines; adjustment line and non-destructive controls line.

POTASIO RíO COlORADO

Engineering review works carried out by the Odebrecht -

TEARG JV for detail engineering at the phase of execution

by Minerconsult and Progen for Vale.

PUnTA nEGRA HyDROElECTRIC STATIOn

Detail engineering of the hydro dam and other facilities

of this project (intake works, machinery house, spillway,

transformation of bottom outlet and electric substation).

ARGENTINA – CHILE

PASCUA lAMA

Engineering for the bi-national mining project under a JV

with Fluor for the client Barrick Gold.

CHILE

CERRO CASAlE PROJECT

Design and engineering services for pipelines and related

facilities for the Cerro Casale Project (property of Barrick Gold

and Kinross).

CORPORACIón nACIOnAl DEl COBRE DE CHIlE (CODElCO)

Prefeasibility study of water supply at Radomiro Tomic project.

TARKAF CHIlE S.A.

Detail engineering development, disciplines civil-structural,

mechanical and pipes at Antucoya project – Agglomeration Plant.

BATEMAn CHIlE SpA

Detail engineering at the Antucoya project – S.X. (solvents

extraction), T.F. (tank farm) and E.W. (electrowinning) plants.

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I&C

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BRAzIL

DIRECT REDUCED IROn (DRI) PlAnT – VAlE S.A.

Engineering studies for a steel production plant based on

Direct Reduced Iron (DRI). This contract includes FEL 1

(scope studies with “trade off” of DRI technologies and

markets); and FEL 2 (concept engineering).

PERU

CAMISEA 2nd ExPAnSIOn

Basic engineering, procurement management and assistance

to works for the client Pluspetrol.

GAS COMPRESSIOn STATIOn KP127

Basic and detail engineering, and procurement management

regarding main equipment for TGP.

WHCP PROJECT – PlUSPETROl

Engineering, design, procurement, supply, manufacturing,

transportation, installation, construction, quality control,

pre-commissioning, commissioning and start-up for

the new fixtures and facilities of two compression units

at Malvinas Plant.

URUGUAY

InTERCOnExIón EléCTRICA SAn CARlOS – MElO

Engineering for the construction of a 500 kV high voltage

line between Brazil and Uruguay.

HuMan resources

The level of activity, the business perspectives and the resulting

growing demand for talent led the Company and its subsidiaries

to strengthen both the recruitment process and the professional

development program during this fiscal year. Both processes

are intended to align the required profiles and the personnel’s

professional development with the needs of the business.

During the 2012 fiscal year, the Company and its

subsidiaries kept on incorporating newly-graduated

professionals through the Young Professionals Program,

a structured training program allowing for the rapid

insertion of these young professionals into our business

management. For a two-year period, young professionals

receive both technical and management training,

and they take part in a rotation plan which exposes

them to several sectors of the Company, thus allowing

them to complete this initial training process.

The Company and its subsidiaries has also continued

with the training program, reaching out to all Company

levels, from professionals with potential to hold

positions in project management, middle management

and supervision, to field personnel.

procureMent

The main works performed regarding supplies are related

to the projects under development stated in the

Engineering section.

The goals set for this fiscal year will focus more strongly

on the procurement global strategy, and the continuous

improvement process started in previous stages, focusing

on enhancing the Company’s competitiveness based on

the following initiatives:

Global: Through the analysis of competitors in the

market, detecting any technical and business

opportunities for the Company, in order to increase

our potential in bids and our efficiency in the projects

in progress (environment, safety, productivity,

reliability, etc.).

Such activity is supported by a scouting and sourcing

process, which was started in the previous fiscal

year upon execution of long-term agreements

with alternative supply sources and their respective

participation in the bids and projects.

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Synergy: Work teams were created to carry out

personnel training activities related to human resources

management, global suppliers’ management, procurement

and supplies standard documentation, as well as bidding

and auditing systems.

Policies and procedures: The Company kept on developing

new procedures and processes jointly with the In-House

Audit Department and the Improvement Committee,

which ensure the global application of the best practices

so as to streamline management transparency and cost

optimization.

During the next fiscal year, such activities and principles

will be reinforced so as to keep on identifying opportunities,

at Company level, in the market and in the synergy with

the Organization.

tei&c eQuipMent division (tepaM)

During this fiscal year, TEI&C Equipment Division started

the implementation of a reengineering process for this area,

aimed at optimizing investment in construction equipment,

reducing operating costs, building a distinctive and competitive

improvement factor, and increasing productivity in projects.

This reengineering process has enabled the Company

to optimize the allocation of equipment, to improve the

efficiency and effectiveness of repairs, to direct investment

towards critical equipment with higher utilization levels,

and to perform a controlled renewal of TEPAM equipment,

by getting rid of old items with a low return on investment.

TEPAM investment value in equipment, machinery and

vehicles for the 2012 fiscal year amounted to USD 36 million.

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TE

I&C

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HeaLtH, safety and environMent (Hse)

TEI&C is a company operating in several countries, with

different cultures and degrees of evolution in relation to

prevention and also with different clients; however, the

Company has managed to build prevention into its activities

as an intrinsic value, by assigning a high priority to its

management.

TEI&C has developed a preventive vision focused on an

active and visible commitment to safety, occupational health,

environmental protection and the welfare of communities.

In this respect, the implementation of the Integrated

Management System (IMS) has proved to be effective to

anticipate and prevent accidents and unsafe conditions

concerning industrial safety, health and environmental

protection.

Since its implementation, the IMS has allowed reducing

global accident rates. This shows a substantial improvement

in accidentology at worksites, an asset that is acknowledged

and valued by our clients. Such system is externally audited

from time to time by Det Norske Veritas (DNV), which verifies

high compliance with international standards and issues

certification under ISO 14001:2004 and OHSAS 18001:2007

for all the Company’s projects.

Management leaders committed to prevention extend

such strong commitment to all levels so that preventive

behavior is properly acknowledged and assimilated at work

(including subcontractors). This leadership largely contributes

to minimizing the recurrence of incidents and accidents, in

addition to taking actions related to equipment and facilities

as well as safety at the workplace.

Finally, we must state that preventive actions in the last

period have achieved:

An effective operating discipline: example and self-

management.

A sound commitment of employees: management active

leadership in projects.

Throughness in the use of preventive tools with high

Company standards.

An effective review of preventive measures.

Optimization in the analysis of risks related to change

management.

QuaLity

The Company and its subsidiaries established and maintain a

management policy which directs efforts to meet and exceed

the expectations of clients, shareholders, collaborators,

suppliers and the communities where it operates.

In particular, with respect to clients, this entails a special

focus on the quality of the products and services provided.

The Company is clearly oriented to continuous improvement,

and it pays special attention to efficiency, process

simplification and value added in each of its operations.

During 2012, the following actions have been completed,

among others:

Consolidation of the Knowledge Base (Knowledge

Management Project), and generation of new activities

related to this matter.

Improvements in the number and effectiveness of actions

developed, taking into account the results of the main quality

indicators related to the projects executed.

Sustained measurement of client’s satisfaction in the

different projects, and adoption of centralized measures

resulting from the cross-sectional analysis of the information

obtained.

Reformulation of indicators for quality management in

projects (Project Quality Index).

In November 2012, the Company was recertified for another

three years under ISO 9001:2008 standard, and therefore,

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the certification was renewed once again for the quality

management system, which was first obtained in 1986.

The Company has maintained and consolidated the direction

defined in previous years, focused on the adoption of

standardized methodologies based on experience, as

well as the reliance on truthful, updated and transparent

information so as to minimize risks, prevent problems and

ensure the predictability of results in order to comply with

its commitment to meet and exceed the expectations of all

related stakeholders.

tecHnoLogy and it systeMs

During this fiscal year, progress continued to be made

in several IT internal projects related to improvements

in technological infrastructure, upgrade to new software

versions, and implementation of new solutions to cover

different business processes. The most outstanding IT

projects were the following:

Progress continued to be made in the project for the

implementation of new SAP modules for HR management.

Continuous development of internal control panels, on

Business Intelligence (BI) tools (Microstrategy, Business

Warehouse SAP, etc.) based on the information from

transactional systems.

Implementation of a new Customer Relationship

Management (CRM) tool for the Commercial Area.

Implementation of the SAP Investment (IM) module, so as to

improve traceability and the workflow of investment approval.

Start-up of the new Intranet of the Company subsidiaries,

so as to have a more friendly content and modern tool for

browsing and managing contents.

Progress was made in the implementation of new features

for the Equipment Management process, aimed at

supplementing and improving existing tools and covering

new processes.

Implementation of the Suppliers’ Extranet, so as to facilitate

communication with suppliers, which enables the display

and loading of information for the Accounts Payable process.

Launching of an internal review project to detect needs for

the implementation of new tools with greater integration for

Engineering, Material Administration, Procurement, Planning,

Management Control, and Document Administration

processes.

We would like to thank all our clients, suppliers, banking

institutions and, above all, our employees, whose work

on a daily basis have contributed to these results.

The Board of Directors

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I&C

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2Board of directors

president

Lodovico Andrea Palu Rocca

vice president

Carlos Eduardo Bacher

Eduardo Nicolás Rocca Couture

directors

Ricardo Pascale Cavallieri

Luis Pablo Solari Damonte

Mario Osvaldo Lalla

Ricardo Ourique Marques

Directors were appointed

at the Regular Shareholders’ Meeting

held on May 31, 2012.

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I&C

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Pascua lama Project for Barrick Gold Corp. of Canada’s subsidiaries, Chile side.

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I&C

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consoLidated financiaL stateMents

For the year ended december 31, 2012 and 2011

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I&C

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Manizales Plant Project for Siderúrgica de Caldas S.A.S. (Ternium), Colombia.

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LegaL inforMation

denoMination:

TEI&C S.A.

LegaL address:

La Cumparsita 1373 7th Floor

Montevideo (11200)

(598-2) 901-9091

coMpany activity:

Investments.

date of registration:

February 16, 2005.

eXpiration

of coMpany cHarter:

February 16, 2105.

registry nuMBer:

RUC 21-5098860012.

capitaL stock:

Shares: 5,181,537,274 1.

Face Value: UYU 5,181,537,274 2.

1 see note 13 to the consolidated financial statements.2 uyu: uruguayan pesos.3 see note 24.

parent coMpany:

Techint Investments N.V. 3.

LegaL address:

Berg Arrarat 1, Curaçao

Netherlands Antilles.

parent coMpany activity:

Investments.

parent coMpany:

Shares: 100%

Votes: 100%

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I&C

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TE

I&C

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.

All AMOUnTS In USD THOUSAnDS

assets

non-current assets

Property, plant and equipment (PP&E)

Intangible assets

Investments in associated companies

Other investments

non-current tax assets

Trade and other receivables

Deferred income tax assets

total non-current assets

current assets

Inventories

Derivative financial instruments

Current tax assets

Trade and other receivables

Construction contracts work in progress

Assets of disposal group classified as held for sale

Other investments

Cash and cash equivalents

total current assets

total assets

12.31.12

307,602

8,623

2,401

9,952

13,512

219,816

61,786

623,692

74,425

194

37,199

478,668

44,359

1,029

16

324,132

960,022

1,583,714

306,882

6,087

1,848

8,566

11,065

186,387

65,172

586,007

34,499

–

31,166

371,619

50,292

20

40,186

234,908

762,690

1,348,697

4

5

6

7

8

15

9

26

8

11

7

12

12.31.11

consoLidated stateMent

of financiaL position

For the year ended December 31, 2012 and 2011.

notes

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All AMOUnTS In USD THOUSAnDS

eQuity and LiaBiLities

equity

Capital and reserves attributable to the Company’s equity holders

non-controlling interests

total equity

non-current liabilities

Borrowings

Deferred income tax liabilities

non-current tax liabilities

Derivative financial instruments

Trade and other payables

Other liabilities

total non-current liabilities

current liabilities

Borrowings

Trade and other payables

Derivative financial instruments

Construction contracts work in progress

Current tax liabilities

Other liabilities

total current liabilities

total Liabilities

total equity and Liabilities

12.31.12

744,178

19,460

763,638

63,971

25,105

1,371

–

48,370

130,315

269,132

67,499

313,318

5

31,529

48,776

89,817

550,944

820,076

1,583,714

668,023

25,946

693,969

36,676

21,338

739

17

40,869

100,764

200,403

66,144

235,661

2,371

44,320

31,684

74,145

454,325

654,728

1,348,697

14

15

26

16

17

14

16

26

17

12.31.11notes

consoLidated stateMent

of financiaL position (cont’d.)

For the year ended December 31, 2012 and 2011.

the accompanying notes are an integral part of these consolidated financial statements.

54

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I&C

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.

All AMOUnTS In USD THOUSAnDS

Revenues from construction contracts and other services

Cost of revenue

gross profit

General and administrative expenses

Selling expenses

Other operating results

operating income

Financial income

Financial costs

Result from investments in associated companies

income before income tax

Income tax

net income (1)

(1) attributable to:

Equity holders of the Company

non-controlling interests

net income

12.31.12

1,887,631

(1,596,569)

291,062

(152,519)

(13,788)

14,241

138,996

53,078

(13,365)

537

179,246

(35,802)

143,444

136,700

6,744

143,444

1,632,250

(1,389,272)

242,978

(164,828)

(16,692)

144,682

206,140

21,734

(4,874)

1,471

224,471

(13,062)

211,409

204,653

6,756

211,409

27

27

27

29

28

28

6

30

12.31.11notes

consoLidated incoMe stateMent

For the year ended December 31, 2012 and 2011.

the accompanying notes are an integral part of these consolidated financial statements.

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net income

other comprehensive income:

Decrease of revaluation of PP&E

Currency translation differences

Cash flow hedge

other comprehensive income for the year net of tax (2)

(2) attributable to:

Equity holders of the Company

non-controlling interests

143,444

(1,758)

(26,830)

2,570

117,426

111,227

6,199

117,426

211,409

(505)

(78,435)

(2,382)

130,087

125,836

4,251

130,087

4

consoLidated stateMent

of coMpreHensive incoMe

For the year ended December 31, 2012 and 2011.

All AMOUnTS In USD THOUSAnDS notes 12.31.12 12.31.11

the accompanying notes are an integral part of these consolidated financial statements.

56

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attributabLe to the coMpanY´s equitY hoLders

Balance at december 31, 2011

net income for the year

Other comprehensive income

Decrease of revaluation of PP&E net of tax

Depreciation of reserve for revaluation surplus net of tax

Decrease of reserve for revaluation surplus due to PP&E disposal net of tax

Cash Flow Hedge

Currency translation differences

total comprehensive income for the year

Resolution of the Shareholders' meeting held on 05.31.12:

Board of Directors' fees

legal Reserve

Dividend distribution (USD 0.007 per share)

Changes in non-controlling interests – Dividend distribution

Balance at december 31, 2012

LegaL reserve

share capitaL

19,859

–

–

–

–

–

–

–

–

10,233

–

–

30,092

218,535

–

–

–

–

–

–

–

–

–

–

–

218,535

consoLidated stateMent

of cHanges in eQuity

For the year ended December 31, 2012 and 2011.

All AMOUnTS In USD THOUSAnDS

4

notes

the accompanying notes are an integral part of these consolidated financial statements.

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non - controLLinG

interests

totaL equitY

capitaL surpLus

currency transLation differences

reserve for pp&e

revaLuation surpLus

retained earnings

reserve for cash

fLow hedge

totaL

(1,625)

–

–

–

–

–

–

–

–

–

–

–

(1,625)

(102,857)

–

–

–

–

–

(26,285)

(26,285)

–

–

–

–

(129,142)

55,367

–

(1,758)

(9,454)

(9,856)

–

–

(21,068)

–

–

–

–

34,299

481,126

136,700

–

9,454

9,856

–

–

156,010

(72)

(10,233)

(35,000)

–

591,831

(2,382)

–

–

–

–

2,570

–

2,570

–

–

–

–

188

668,023

136,700

(1,758)

–

–

2,570

(26,285)

111,227

(72)

–

(35,000)

–

744,178

25,946

6,744

–

–

–

–

(545)

6,199

–

–

–

(12,685)

19,460

693,969

143,444

(1,758)

–

–

2,570

(26,830)

117,426

(72)

–

(35,000)

(12,685)

763,638

attributabLe to the coMpanY´s equitY hoLders

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attributabLe to the coMpanY´s equitY hoLders

Balance at december 31, 2010

net income for the year

Other comprehensive income

Decrease of revaluation of PP&E net of tax

Depreciation of reserve for revaluation surplus net of tax

Decrease of reserve for revaluation surplus due to PP&E disposal net of tax

Cash Flow Hedge

Currency translation differences

total comprehensive income for the year

Dividend distribution approved by the Board of Directors’ Meeting held on 02.15.11 (USD 0.013 per share) (1)

Resolution of the Shareholders' meeting held on 06.08.11:

Board of Directors' fees

legal Reserve

Dividend distribution approved by the Board of Directors’ Meeting held on 12.13.11 (USD 0.006 per share) (2)

Capital Surplus

Changes in non-controlling interests – Dividend distribution

Changes in non-controlling interests – Disposal of subsidiary

Balance at december 31, 2011

17,645

–

–

–

–

–

–

–

–

–

2,214

–

–

–

–

19,859

218,535

–

–

–

–

–

–

–

–

–

–

–

–

–

–

218,535

consoLidated stateMent

of cHanges in eQuity (cont’d.)

For the year ended December 31, 2012 and 2011.

(1) the dividends were approved by the board of directors and were ratified by the shareholder's meeting held on June 08, 2011.

(2) the dividends were approved by the board of directors and were ratified by the shareholder's meeting held on may 31,2012.

the accompanying notes are an integral part of these consolidated financial statements.

LegaL reserve

share capitaL

All AMOUnTS In USD THOUSAnDS

4

1

1

notes

59

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non - controLLinG

interests

totaL equitY

reserve for cash

fLow hedge

totaL

attributabLe to the coMpanY´s equitY hoLders

(1,476)

–

–

–

–

–

–

–

–

–

–

–

(149)

–

–

(1,625)

(26,927)

–

–

–

–

–

(75,930)

(75,930)

–

–

–

–

–

–

–

(102,857)

73,118

–

(505)

(9,680)

(7,566)

–

–

(17,751)

–

–

–

–

–

–

–

55,367

–

–

–

–

–

(2,382)

–

(2,382)

–

–

–

–

–

–

(2,382)

356,489

204,653

–

9,680

7,566

–

–

221,899

(65,000)

(48)

(2,214)

(30,000)

–

–

–

481,126

637,384

204,653

(505)

–

–

(2,382)

(75,930)

125,836

(65,000)

(48)

–

(30,000)

(149)

–

–

668,023

27,915

6,756

–

–

–

–

(2,505)

4,251

–

–

–

–

–

(2,709)

(3,511)

25,946

665,299

211,409

(505)

–

–

(2,382)

(78,435)

130,087

(65,000)

(48)

–

(30,000)

(149)

(2,709)

(3,511)

693,969

capitaL surpLus

currency transLation differences

reserve for pp&e

revaLuation surpLus

retained earnings

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cash flows from operating activities

net Income for the year

adjustments to reconcile net income to cash flow operations

PP&E depreciation

Intangible amortization

Construction contracts in progress

net provisions

net allowance for doubtful accounts

Gain from claims

Tax accrued

(Gain) / loss from the sales of PP&E

Impairment loss

Interest accrued from trade and other receivables

Interest accrued from borrowings

Result from other investments

Result from investments in associated companies

Other, including currency translation differences

changes in balances corresponding to:

Trade accounts receivable and tax assets

Inventories

Trade and other payables and tax liabilities

Income tax payments

Other liabilities

Changes in non-controlling interests

net cash generated by operating activities

143,444

49,679

1,901

(6,858)

3,229

256

–

35,802

(13,836)

819

(3,972)

4,800

(847)

(537)

(26,705)

(115,471)

(37,588)

97,407

(29,315)

35,150

(12,685)

124,673

211,409

45,868

1,125

(15,246)

47,332

151

(150,169)

13,062

6,781

–

(4,101)

3,882

(818)

(1,471)

(39,864)

(27,186)

(11,206)

16,771

(46,810)

7,676

(2,709)

54,477

4

5

8

29

30

29

29

7

6

consoLidated stateMent

of casH fLoWs

For the year ended December 31, 2012 and 2011.

All AMOUnTS In USD THOUSAnDS 12.31.12 12.31.11notes

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cash flows from investing activities

Proceeds from disposal of PP&E

Purchases of PP&E

Purchases of intangible assets

Revenue on sales of intangibles

Other investments and investment in associated companies (net)

Business combination

Sale of subsidiary, net of cash transferred

net cash used in investing activities

cash flow from financing activities

Proceeds from borrowings

Repayments of borrowings

Board of Director´s fees

Dividend distribution

net cash generated by / (used in) financing activities

net increase / (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Effect of exchange rate changes

cash and cash equivalents at the end of the year

non-cash transactions

Cash Flow hedge

Finance leases

Decrease on revaluation of PP&E, net of tax effects and decrease

28,702

(81,325)

(5,141)

176

38,535

–

(19,053)

70,679

(32,628)

(72)

(35,000)

2,979

108,599

198,400

(3,911)

303,088

2,570

(1,263)

(1,758)

17,866

(74,730)

(3,686)

–

(38,707)

(1,391)

(100,648)

45,046

(25,371)

(48)

(95,000)

(75,373)

(121,544)

326,962

(7,018)

198,400

(2,382)

(702)

(505)

5

1

12

4

consoLidated stateMent

of casH fLoWs (cont’d.)

For the year ended December 31, 2012 and 2011.

the accompanying notes are an integral part of these consolidated financial statements.

All AMOUnTS In USD THOUSAnDS 12.31.12 12.31.11notes

62

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Camisea Pipeline Maintenance for Compañía Operadora de Gas del Amazonas S.A. (COGA), Peru.

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indeX to tHe notes to tHe

consoLidated financiaL stateMents

Basis of preparation

Consolidation

Foreign currency translation

Use of estimates

Property, plant and equipment (PP&E)

Intangible assets

Impairment of non-financial assets

Financial assets

Offsetting financial instruments

Derivative financial instruments

Inventories

Construction contracts work

in progress

Other investments

Trade and other receivables

Trade and other payables

Cash and cash equivalents

Equity

Borrowings

Current and deferred income tax

Employee benefits

Provisions

Revenue recognition

Leases

Assets and liabilities classified

as held for sale

General Information

Accounting policies

1.

2.

a.

b.

c.

d.

e.

f.

g.

h.

i.

j.

k.

l.

m.

n.

o.

p.

q.

r.

s.

t.

u.

v.

w.

x.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

30.

31.

32.

Financial risk management

Property, plant and equipment (PP&E)

Intangible assets

Investments in associated companies

Other investments

Trade and other receivables

Inventories

Financial instruments by category

Assets of disposal group classified

as held for sale

Cash and cash equivalents

Share capital

Borrowings

Deferred income taxes

Trade and other payables

Other liabilities

Provisions

Employee benefits

Participation in Joint Ventures

Contingencies and commitments

Restricted assets

Claims Receivables

Related party transactions

Subsidiaries

Derivative financial instruments

Cost of revenue and expenses by nature

Financial results

Other operating results

Income tax

Main contracts in progress

Subsequent events

64

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 1.

generaL inforMation

TEI&C S.A. (“TEI&C”), a company controlled by Techint

Investments N.V. was registered in Uruguay in February 2005

and is a part of the Techint Group (“TG”). TEI&C’s purpose

is to engage in investments by holding equity interests in

companies or organizations whose corporate purpose includes

engineering, construction and services. References in these

consolidated financial statements to “TEI&C” or “Company”

refer to TEI&C S.A. and its consolidated subsidiaries.

The Special Shareholders’ Meeting held on December 13,

2011 decided to extend the scope of article 3 of the by-laws,

specifically stating in the corporate purpose the granting

of any and all kinds of guarantees and suretyships in favor

of its direct and indirect subsidiaries. This amendment was

authorized by the AIN on April 27, 2012.

During the current fiscal year, TEI&C experienced some

changes in its investment portfolio as regards its participating

interests in companies related to the engineering, construction

and service businesses, which are detailed as follows:

The Dutch subsidiary BV de Nieuwe Weg (“BVNW”)

rearranged the composition of its Shareholders’ Equity

through capitalization of the Share Premium and by using

such new capital to cancel accumulated losses as of

March 2012. In addition to these capital variations, there

was a reduction of the nominal value of shares decided in

May 2012, and therefore, a distribution was made to the

shareholder for a sum of approximately USD 12,798.

On May 8, 2012 and October 17, 2012, an Ordinary General

Shareholders’ Meeting of the Mexican subsidiary Techint

S.A. de C.V. (“TEMEX”) agreed to reduce the variable portion

of its capital stock, for the sum of MXN$ 160,000,000

(equivalent to USD 15,558) and MXN$ 128,600,000

(equivalent to USD 12,505), respectively, which amounts

were distributed pro rata the shares owned by each

shareholder. Taking into account such reduction, 133,095 and

106,975 shares of TEMEX owned by TEI&C, respectively,

were cancelled.

On May 9, 2012, the Company acquired 100% of the

shares of an Ecuadorian company called Construcciones

y Prestaciones Petroleras S.A. (CPP) (“CPP”), the main

purpose of which is the execution of all kinds of public and

private works, the provision of services for development

of oil, hydrocarbon and other mineral fields and the

industrialization of their by-products. On July 10, 2012 and

November 12, 2012, additional contributions were made to

this company for USD 300 and USD 1,000, respectively.

On May 22, 2012, the Spanish subsidiary Techint

Ingeniería y Construcciones SLU (“TIC”) decided to make

a distribution for a sum of USD 20,744, which amount

was taken from the free availability reserve. In October

2012, using funds provided by the Company, TIC made

contributions for future capitalizations in the Argentine

subsidiaries Techint Inversiones SAIF (“TEINVA”) and Techint

Compañía Técnica Internacional S.A.C.I. (“TEARG”), for an

amount of USD 17,595, approximately, which amount will be

capitalized by the Argentine companies with the irrevocable

contributions of their minority shareholders in the next

Shareholders’ Meetings.

On November 8, 2012, TEI&C decided to make a contribution

in kind to TIC, by means of the contribution of the credit it

held with such company for USD 17,595, thus reinforcing

TIC’s financial position.

On July 10, 2012 and November 8, 2012, in order to reinforce

the financial position of Preglosid S.L.U. (“PREGLOSID”),

TEI&C decided to make contributions for Euro 244,041

(equivalent to USD 300) and Euro 784,560 (equivalent to

USD 1,000), respectively, but such contributions do not

entail an increase of the company’s capital stock. Such funds

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

>

>

>

>

>

>

>

were used to make a contribution to the capital stock of the

Ecuadorian branch CPP, to provide it with working capital.

This contribution is irrevocable and does not entail any

consideration in favor of TEI&C.

On July 16, 2012, the subsidiary Techint International

Construction Corp. (TENCO) (“TENCO”) purchased

to TEARG 80% of the shares of Techint Ingeniería y

Construcción Bolivia S.A. (“TEBOL”) and on July 17, 2012

contributed USD 21 million. This contribution came from

a credit TENCO possessed with this company and is

pending capitalization.

On December 28, 2012, the merge of the subsidiaries

companies Sidernet de Venezuela C.A. (“Sidernet

Venezuela”), Servicios Siderúrgicos Sersisa S.A., Avemir

S.A. and Cimimontubi S.A. into Sidernet de Venezuela C.A.

was registrated.

During the fiscal year, TENCO wound up its branch in

Bahrain and decided to close its branch at Abu Dhabi.

TEMEX wound up Elina L.T. S.A. de C.V and provided for

the dissolution of Nitroelina S.A. de C.V. In turn, TEARG

wound up its branch in Ecuador.

During the previous fiscal year, TEI&C experienced some

changes in its investment portfolio which are detailed as

follows:

On February 8, 2011, TENCO acquired a 15% equity interest

in Joint Venture Panamá Inc., a company organized under the

laws of Barbados.

On February 15, 2011, TENCO executed a sale and

purchase agreement with a related company. All the shares

of Saudi Techint Limited (60%) were transferred to such

company; the selling price was USD 5.5 million. As result

of this operation, the non-controlling interest decreased by

USD 3.5 million.

On March 14, 2011, TEI&C acquired 100% of the quotas

of Tecpetrol do Brazil Ltda. from a related company. Then,

in June 2011, this new subsidiary amended its by-laws

and changed its corporate purpose and name (Techint

Engenharia e Construção Offshore Ltda.); it also increased

its capital stock by means of a contribution made

by our Brazilian subsidiary, Techint Engenharia e

Construção S/A (TEBRA), and therefore, it acquired the

controlling interest in such company. The difference

between the cash contributed and the book value was

charge to equity (USD 149).

On October 28, 2011, TENCO purchased from a related

company all the shares of Arosia Comercial S.A. (Panama),

which company, in turn, holds 100% of the shares of Avemir

S.A. (Venezuela). On November 16, 2011, Arosia Comercial

S.A. was wound up and TENCO became the direct holder of

all shares of Avemir S.A.

On November 17, 2011, at a Board of Directors’ Meeting, it

was decided to merge the subsidiaries companies Sidernet

Venezuela C.A., Servicios Siderúrgicos Sersisa S.A., Avemir

S.A. and Cimimontubi S.A. into a new company to be

incorporated in Venezuela under the name of Sidernet de

Venezuela C.A.

On November 21, 2011, TEMEX sold 50% of the shares of

Energía Huasteca, S.A. de C.V. and on such same date it

purchased 50% of the shares of Elina L.T. S.A. de C.V. Thus,

it became the holder of all the capital stock and this enabled

it to commence the winding-up process.

On December 30, 2011, Servicios y Prestaciones Techint

Funchal - Serviços, Comércio e Gestão de Projetos Lda. was

wound up and TENCO assumed all assets and liabilities of

the subsidiary.

These consolidated financial statements were approved for

issue by the Company’s Board of Directors on April 26, 2013.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 2.

accounting poLicies

The principal accounting policies applied in the preparation

of these consolidated financial statements are set out below.

These policies have been consistently applied to all the years

presented, unless otherwise stated.

a. Basis of preparation

These consolidated financial statements are prepared in

accordance with International Financial Reporting Standards

(“IFRS”), as issued by the International Accounting

Standards Board (“IASB”), under the historical cost

convention, as modified by the revaluation of machinery,

equipment and vehicles (“Revaluation of PP&E”), available-

for-sale assets, financial assets and liabilities (including

derivative instruments) at fair value through profit or loss, and

translation of subsidiaries whose functional currency is the

currency of a hyperinflationary economy. The consolidated

financial statements are presented in thousands of U.S.

dollars (“USD”), which is the functional currency of TEI&C.

Certain comparative amounts have been reclassified to

conform to changes in presentation in the current fiscal year.

The preparation of consolidated financial statements in

conformity with IFRS requires the use of certain critical

accounting estimates. It also requires management to

exercise its best judgment in the process of applying the

Company’s accounting policies. The areas involving a higher

degree of judgment of complexity, or the areas where

assumptions and estimates are significant to the consolidated

financial statements, are disclosed in note 2.d.

CHAnGES In ACCOUnTInG POlICy AnD DISClOSURES

Standards and amended standards mandatory for the first

time for the Financial Statements beginning January 1, 2012

and adopted by the Company

There are no IFRSs or IFRIC interpretations that are effective

for the first time for the financial year beginning on 1 January

2012 that have a material impact on TEI&C.

Standards, amendments and interpretations to existing

standards that are not yet effective and have not been early

adopted by the Company

The following standards, amendments and interpretations to

existing standards have been published and are not yet effective

for the Company in the fiscal year ended December 31, 2012:

IFRS 9, “Financial Instruments”

In November 2009, the IASB issued IFRS 9. This addresses

the classification and measurement of financial assets and

is likely to affect the Company’s accounting for its financial

assets. The standard is not applicable until January 1, 2015,

but is available for early adoption.

IFRS 10, “Consolidated financial statements”

In May 2011, the IASB issued IFRS 10, “Consolidated

financial statements”. IFRS 10 replaces all of the guidance

on control and consolidation in IAS 27 and SIC-12. IFRS 10

must be applied for annual periods beginning on or after

January 1, 2013.

IFRS 11 “Joint Arrangements”

In May 2011, the IASB issued IFRS 11, “Joint Arrangements”.

IFRS 11 is a more realistic reflection of joint arrangements

by focusing on the rights and obligations of the arrangement

rather than its legal form. IFRS 11 must be applied for annual

periods beginning on or after January 1, 2013.

IFRS 12, “Disclosures of interest in other entities”

In May 2011, the IASB issued IFRS 12, “Disclosures

of interest in other entities”. This standard includes

the disclosure requirements for all forms of interest

in other entities. IFRS 12 must be applied for annual

periods beginning on or after January 1, 2013.

IFRS 13, “Fair value measurement”

In May 2011, the IASB issued IFRS 13, “Fair value

measurement”. IFRS 13 explains how to measure fair

value and aims to enhance fair value disclosures.

IFRS 13 must be applied for annual periods beginning

on or after January 1, 2013.

>

>

>

>

>

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

IAS 28 (revised 2011), “Associates and joint ventures”

IAS 28 (revised 2011) includes the requirements for joint

ventures, as well as associates, to be equity accounted

following the issue of IFRS 11. The Company shall

apply this standard for annual periods beginning on or

after January 1, 2013.

International Accounting Standard (“IAS”) 1 (amended 2011),

“Presentation of financial statements”

In June 2011, the IASB issued IAS 1 (amended 2011),

“Presentation of financial statements”. The amendment

requires entities to separate items presented in Other

Comprehensive Income into two groups, based on whether

or not they may be recycled to profit or loss in the future.

IAS 1 (amended 2011) must be applied for annual periods

beginning on or after July 1, 2012.

IAS 19 (amended 2011), “Employee benefits”

In June 2011, the IASB issued IAS 19 (amended 2011),

“Employee benefits”, which makes significant changes to the

recognition and measurement of defined benefit pension

expense and termination benefits, and to the disclosures for

all employee benefits. IAS 19 (amended 2011) must be applied

for annual periods beginning on or after January 1, 2013.

Amendment to IFRSs 10, 11 and 12 on transition guidance

These amendments provide additional transition relief to

IFRSs 10, 11 and 12, limiting the requirement to provide

adjusted comparative information to only preceding

comparative period. For disclosures related to unconsolidated

structured entities, the amendments will remove the

requirement to present comparative information for periods

before IFRS 12 is first applied. The amendment must be

applied as from January 1, 2013.

IFRS 7 (amended 2011), “Financial Instruments: Disclosure”

In December 2011, IASB released Disclosures - Offsetting

Financial Assets and Financial Liabilities to require

information about all recognized financial instruments that

are set off in accordance with paragraph 42 of IAS 32. IFRS

7 must be applied for annual periods beginning on or after

January 1, 2013 and interim periods within such annual

periods. Amendments need to be provided retrospectively

to all comparative periods.

The Company is yet to assess the full impact of these

standards.

There are no other IFRSs or IFRIC interpretations that are

not yet effective that would be expected to have a material

impact on the Company.

b. consoLidation

SUBSIDIARy COMPAnIES

Subsidiaries are entities which are controlled by TEI&C

as a result of its ability to govern an entity’s financial and

operating policies generally accompanying a shareholding

of more than 50% of the voting rights. Subsidiaries are

consolidated from the date on which control is exercised

by the Company and are no longer consolidated from the

date when control ceases.

The purchase method of accounting is used to account for the

acquisition of subsidiaries by TEI&C. The cost of an acquisition

is measured as the fair value of the assets given, equity

instruments issued and liabilities incurred or assumed at the

date of acquisition. Acquisition-related costs are expensed as

incurred. Identifiable assets acquired, liabilities and contingent

liabilities assumed in a business combination are measured

initially at their fair values at the acquisition date. Any non-

controlling interest in the acquiree is measured either at fair

value or at the non-controlling interest’s proportionate share

of the acquiree’s net assets. The excess of the aggregate of

the consideration transferred and the amount of any non-

controlling interest in the acquiree over the fair value of the

identifiable net assets acquired is recorded as goodwill. If the

cost of acquisition is less than the fair value of the net assets

of the subsidiary acquired, the difference is directly recognized

in the income statement.

If the companies acquired were under common control, the

assets and liabilities of such companies (and their respective

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subsidiaries) are accounted for at the predecessor’s cost,

reflecting the carrying amount of such assets and liabilities

contributed to the Company. Accordingly, the consolidated

financial statements include the financial position of the

abovementioned companies at historical book values and no

adjustment has been made to reflect fair values at the time of

the contribution. The difference between the price paid and the

historical book value was charged to equity as capital surplus.

Material intercompany transactions, balances and unrealized

gains on transactions between TEI&C and its subsidiaries

have been eliminated in consolidation. Unrealized losses

are also eliminated. Accounting policies of subsidiaries have

been changed where necessary to ensure consistency with

the policies adopted by TEI&C.

According to the laws of the countries of certain subsidiaries,

a portion of the profit of the year is separated to constitute

statutory reserves until they reach statutory capped

amounts. These legal reserves are not available for dividend

distribution and can only be released to absorb losses.

See note 25 to the consolidated financial statements for the

list of consolidated subsidiaries.

TRAnSACTIOnS AnD nOn-COnTROllInG InTERESTS

The Company treats transactions with non-controlling

interests as transactions with equity owners of TEI&C. For

purchases from non-controlling interests, the difference

between any consideration paid and the relevant share

acquired of the carrying value of net assets of the subsidiary

is recorded in equity. Gains or losses on disposals to non-

controlling interests are also recorded in equity. When TEI&C

ceases to have control or significant influence, any retained

interest in the entity is remeasured to its fair value, with the

change in carrying amount recognized in profit or loss.

ASSOCIATED COMPAnIES

Associated companies are entities in which TEI&C has

significant influence but not control, generally accompanying

a shareholding of between 20% and 50% of the voting

rights (see note 6). Investments in associated companies

are accounted for by the equity method of accounting and

are initially recognized at cost. The Company´s investment

in associated companies includes goodwill identified on

acquisition, net of any accumulated impairment loss.

The Company’s share of its associated companies’ post-

acquisition profits or losses is recognized in the income

statement, and its share of post-acquisition movements in

reserves is recognized in reserves. The cumulative post-

acquisition movements are adjusted against the carrying

amount of the investment. When the Company’s share

of losses in an associated company equals or exceeds its

interest in such company, including any other unsecured

receivables, the group does not recognize further losses,

unless it has incurred obligations or made payments on

behalf of the associated companies.

Unrealized gains on transactions between TEI&C and its

associated companies are eliminated to the extent of TEI&C’s

interest in the associated companies. Unrealized losses are

also eliminated unless the transaction provides evidence of

an impairment indicator of the asset transferred. Financial

statements of associated companies have been adjusted

where necessary to ensure consistency with IFRS.

JOInT VEnTURES

Joint Ventures (“J.V.”) are jointly controlled entities, which

involve the establishment of a corporation, partnership or

other entity in which each venturer has an interest.

TEI&C’s interest in jointly controlled entities is accounted

for by the proportionate consolidation method. TEI&C

consolidates its share of the joint ventures’ individual income

and expenses, assets and liabilities on a line-by-line basis

with similar items in TEI&C’s financial statements. See note

20 to the consolidated financial statements.

The Company recognizes the portion of gains or losses on

the sale of assets by the Company to the joint ventures

that is attributable to the other ventures. The Company

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does not recognize its share of profits or losses from the

joint ventures that result from the Company’s purchase of

assets from the joint ventures until it re-sells the assets to

an independent party. However, a loss on the transaction is

recognized immediately if the loss provides evidence of a

reduction in the net realizable value of current assets, or an

impairment loss.

c. foreign currency transLation

i. FUnCTIOnAl AnD PRESEnTATIOn CURREnCy

Items included in the consolidated financial statements of each

entity in which TEI&C holds participating interests are measured

using the currency that best reflects the economic substance

of the underlying events and circumstances relevant to that

entity (“the functional currency”). The consolidated financial

statements are presented in thousands of USD, which is the

functional currency of TEI&C. The consolidated companies’ first

record transactions using their functional currency and their

financial statements are then translated to USD with the only

purpose of being consolidated by TEI&C.

ii. BAlAnCES AnD TRAnSACTIOnS In CURREnCIES

OTHER THAn THE FUnCTIOnAl CURREnCy

Transactions in currencies other than the functional currency

are accounted for at the exchange rates prevailing on the

date of the transactions, and the corresponding exchange

gains and losses are recognized in the income statement.

Monetary assets and liabilities in currencies other than

the functional currency are translated at the year-end

exchange rate.

iii. TRAnSlATIOn OF BAlAnCES AnD RESUlTS

OF COnSOlIDATED COMPAnIES

The results and financial position of all the consolidated

companies that have a functional currency different from

the Company’s presentation currency are translated into the

presentation currency as follows:

assets and liabilities of each balance sheet are translated

at the closing rate on the date of that balance sheet;

income and expenses for each income statement are

translated at an average exchange rate; (unless this average

is not a reasonable approximation of the cumulative effect of

the rates prevailing on the transaction dates, in which case

income and expenses are translated at the rate on the dates

of the transactions);

all resulting exchange differences are recognized as a

separate component of equity.

In the case of sale or other disposition of any such

subsidiary, any accumulated translation adjustment would

be recognized in the income statement as part of the gain or

loss on sales.

The financial statements of subsidiaries companies whose

functional currency is the currency of a hyperinflationary

economy are adjusted for inflation in accordance with the

procedure described in the following paragraph prior to

their translation to USD. Once restated, all the items of

the financial statements are converted to USD using the

closing exchange rate. Amounts shown for prior years for

comparative purposes are not modified.

To determine the existence of hyperinflation, TEI&C

assesses the qualitative characteristics of the economic

environment of the country, such as the trends in inflation

rates over the previous three years. The financial statements

of companies whose functional currency is the currency

of a hyperinflationary economy are adjusted to reflect the

changes in purchasing power of the local currency, such that

all items in the statement of financial position not expressed

in current terms (non-monetary items) are restated by

applying a general price index at the financial statement

closing date, and all income and expense, profit and loss are

restated monthly by applying appropriate adjustment factors.

The difference between initial and adjusted amounts is taken

to profit or loss.

d. use of estiMates

The preparation of consolidated financial statements requires

Management to estimate and evaluate both recorded and

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

contingent assets and liabilities as of a certain date, as well

as income and expenses recorded during the reporting

period. The future actual results may differ from estimates

made as of the date of preparation of these consolidated

financial statements.

Estimates and judgments are continually evaluated and are

based on historical experience and other factors, including

expectations of future events that are believed to be reasonable

under the circumstances.

There follows a description of the most relevant estimates

used to prepare these consolidated financial statements:

PERCEnTAGE OF COMPlETIOn METHOD

The Company uses the percentage-of-completion method in

accounting for its contract revenues and expenses. Use of the

percentage-of-completion method requires the Company to

estimate the services performed to date as a proportion of the

total services to be performed. Furthermore, in determining

the contract revenue, TEI&C considers the estimated outcome

for each of the construction contracts which are in progress.

InCOME TAxES

The Company is subject to income taxes in numerous

jurisdictions. Significant judgment is required in determining

the worldwide provision for income taxes. There are

transactions and calculations for which the ultimate tax

determination is uncertain. TEI&C recognizes liabilities for

anticipated tax audit issues based on estimates of whether

additional taxes will be due. Where the final tax outcome

of these matters is different from the amounts that were

initially recorded, such differences will impact the current

and deferred income tax assets and liabilities in the period in

which such determination is made.

MEASUREMEnT OF ClAIMS RECEIVABlES

The Company reviews its financial assets and financial

liabilities including its terms, maturities and discount rates in

order to adjust them to its realizable value or its settlement

value considering the time value of money and other factors.

At December 31, 2011 TEBRA recorded upon initial

recognition the amounts recorded under "Claims receivables"

at its present value measured considering its terms which

include adjustment based on INPC plus interest of 1% per

month until the issuance of the payment order (precatório)

by the president of the Superior Justice Court (the original

estimate of management upon initial recognition was that

the payment order would be issued before June 30, 2012

and currently management has revised such estimate for

such payment order to be issued before June 30, 2013)

and include adjustment thereafter at 0.5% per month

until its settlement. Management currently estimates that

the amount will be paid by the Federal Government on

the maximum legal period of ten annual installments. The

discount rate used was 7.93% per year (2011 - 9.85% per

year) in all cases based on the DIxTR reference rate provided

by BM&F BOVESPA (see note 23).

In spite of the right of the indemnification and its amount

being defined in the final non-appealable decision of the

Supreme Justice Court the amount recorded is dependent

on assumptions with respect to the estimated date of

issuance of the precatório by the court and with respect to

the timing of settlement which may be settled in up to ten

annual installments.

AllOWAnCES FOR DOUBTFUl ACCOUnTS

Management maintains an allowance for trade and other

receivables to account for estimated losses resulting

from the inability of clients to make required payments.

When evaluating the adequacy of an allowance for trade

receivables, Management bases its estimates on the aging

of accounts receivable balances and historical write-off

experience, client credit worthiness and changes in client

payment terms.

OTHER ESTIMATIOnS

In addition, the Company´s Management makes

estimations to calculate, at certain moment the recoverable

amounts of assets, the depreciation and amortization, the

provision for cost and contingencies, the pension plans

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

provision and to assess annually whether an impairment

of long-live assets exists.

e. property, pLant and eQuipMent (pp&e)

MACHInERy, EqUIPMEnT, VEHIClES AnD OTHERS

As a general rule, TEI&C has adopted historical acquisition

or construction cost less accumulated depreciation as the

measurement criterion for PP&E.

However, in the case of machinery, equipment and vehicles

used in the construction business, TEI&C has adopted fair

value as the measurement criterion (see note 4).

lAnD AnD BUIlDInGS

Land and buildings are stated at historical cost. Buildings

are depreciated using the straight-line method, by applying

annual ratios sufficient to terminate the value of each item

as of the end of their estimated useful life.

FIxED ASSETS OF FERROExPRESO PAMPEAnO S.A.C. (“FEPSA”)

These assets represent improvements on the assets received

under concession by FEPSA, as well as those devoted to

service rendering, which will be transferred to the assignor upon

termination of the concession. Such assets are valued at their

acquisition or construction cost less accumulated depreciation.

The straight-line method has been used to calculate

depreciation, by applying annual ratios sufficient to

terminate the value of each item as of the end of their

estimated useful life or upon termination of concession,

whichever occurs first.

USEFUl lIVES USED TO CAlCUlATE DEPRECIATIOn

CHARGES ARE AS FOllOWS:

The residual values and useful lives of significant machinery,

construction equipment and vehicles are reviewed,

and adjusted if appropriate, at each year-end date.

Where the carrying amount of an asset is higher than

its estimated recoverable amount, it is written down

immediately to its recoverable amount.

Gains and losses on disposals are determined by comparing

proceeds with carrying amounts. When revalued assets

are sold, the amounts included in the reserve for PP&E

revaluation surplus are transferred to retained earnings.

Repairs and maintenance expenses are charged to the

consolidated income statement during the financial year in

which they are incurred.

f. intangiBLe assets

SySTEMS DEVElOPMEnT

Acquired computer software licenses are capitalized on

the basis of the costs incurred to acquire and bring to use

the specific software. These costs are amortized over their

estimated useful lives (three to five years).

Costs associated with developing or maintaining computer

software programs are charged to expenses as incurred.

Costs that are directly associated with the production of

identifiable and unique software products controlled by TEI&C

and that will probably generate economic benefits exceeding

costs beyond one year, are recognized as intangible assets.

Direct costs include the software development employee

costs and an appropriate portion of relevant overhead.

Computer software development costs recognized as

assets are amortized over their estimated useful lives (not

exceeding three years).

OTHER

Compañía Inversora Ferroviaria S.A.I.F. (“COINFER”)

Other intangible assets represent the greater cost derived

from the investment in the subsidiary FEPSA as a result of

Buildings and improvements

Production equipment

Vehicles, furniture and fixtures,

and other equipment

land

20-60 years

5-20 years

3-12 years

not depreciated

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

the compulsory subscription and payment of the portion

of capital corresponding to Ferrocarriles Argentinos (16%)

and the portion corresponding to staff (4%) pursuant to the

concession contract.

It is valued at original cost, less accumulated amortization; it

is calculated over the term of the concession of the service

provided by FEPSA.

g. iMpairMent of non-financiaL assets

Property and equipment and other non-current assets

subject to depreciation, including intangible assets, are

reviewed for impairment losses whenever events or changes

in circumstances indicate that the carrying amount may not

be recoverable. An impairment loss is recognized for the

amount by which the carrying amount of the asset exceeds

its recoverable amount, which is the higher of an asset

net selling price and its value in use. For the purposes of

assessing impairment, assets are grouped at the lowest

levels for which there are separately identifiable cash flows.

h. financiaL assets

The Company classifies its financial assets in the following

categories: at fair value through profit or loss, loans and

receivables, and available for sale. The classification depends

on the purpose for which the financial assets were acquired.

Management determines the classification of its financial

assets at initial recognition.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are

financial assets held for trading. A financial asset is classified

in this category if acquired principally for the purpose of

selling in the short-term. Derivatives are also categorized

as held for trading unless they are designated as hedges.

Assets in this category are classified as current assets.

Loans and receivables

Loans and receivables are non-derivative financial assets

with fixed or determinable payments that are not quoted in

an active market. They are included in current assets, except

for maturities greater than 12 months after the date of the

statement of financial position. These are classified as non-

current assets.

Available-for-sale financial asset

Available-for-sale financial assets are non-derivatives that are

either designated in this category or not classified in any of

the other categories. They are included in non-current assets

unless management intends to dispose of the investment

within 12 months of the end of the reporting year.

RECOGnITIOn AnD MEASUREMEnT

Regular purchases and sales of financial assets are

recognized on the trade-date-the date on which the

Company commits to purchase or sell the asset.

Investments are initially recognized at fair value plus

transaction costs for all financial assets not carried

at fair value through profit or loss. Financial assets carried

at fair value through profit or loss are initially recognized

at fair value and transaction costs are expensed in the

income statement. Financial assets are derecognized when

the rights to receive cash flows from the investments

have expired or have been transferred and the Company

has transferred substantially all risks and rewards of

ownership. Available-for-sale financial assets and financial

assets at fair value through profit or loss are subsequently

carried at fair value. Loans and receivables are carried

at amortized cost using the effective interest method.

The Company assesses at each balance sheet date whether

there is objective evidence that a financial asset or a group

of financial assets is impaired.

i. offsetting financiaL instruMents

Financial assets and liabilities are offset and the net amount

reported in the statement of financial position when there

is a legally enforceable right to offset the recognized

amounts and there is an intention to settle on a net basis,

or realize the asset and settle the liability simultaneously.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

j. derivative financiaL instruMents

Derivatives are initially recognized at fair value on the date a

derivative contract is entered into and are subsequently re-

measured at their fair value. The method of recognizing the

resulting gain or loss depends on whether the derivative is

designated as a hedging instrument, and if so, the nature of

the item being hedged.

The Company documents at the inception of the transaction

the relationship between hedging instruments and hedged

items, as well as its risk management objectives and

strategy for undertaking various hedging transactions. TEI&C

also documents its assessment, both at hedge inception

and on an ongoing basis, of whether the derivatives that are

used in hedging transactions are highly effective in offsetting

changes in fair values or cash flows of hedged items.

CASH FlOW HEDGE

Trading derivatives are classified as a current asset or liability.

The full fair value of a hedging derivative is classified as

a non-current asset or liability if the remaining maturity

of the hedged item is more than 12 months and, as a current

asset or liability, if the maturity of the hedged item is less

than 12 months.

The effective portion of changes in the fair value of

derivatives denominated and qualified as cash flow hedging

is disclosed in Other Comprehensive Income. The gain

or loss related to the ineffective portion is immediately

disclosed in the consolidated income statement.

The amounts accumulated in equity are disclosed in the

consolidated income statement in the year in which the

hedged item affects gains and losses.

When a hedging instrument expires or is sold, or when a

hedge no longer meets the criteria for hedge accounting, any

cumulative gain or loss existing in equity at that time remains

in equity and is recognized when the forecast transaction is

ultimately recognized in the consolidated income statement.

When a forecast transaction is no longer expected

to occur, the cumulative gain or loss that was reported

in equity is immediately transferred to the consolidated

income statement.

FORWARD FOREIGn ExCHAnGE COnTRACTS

The hedged highly probable forecast transactions

denominated in foreign currency are expected to occur at

various dates during the next 12 months. Gains and losses

recognized in the hedging reserve in equity on forward

foreign exchange contracts as of 31 December 2012 and

2011 are recognized in the income statement in the period or

periods during which the hedged forecast transaction affects

the income statement.

k. inventories

Inventories are stated at the lower of cost or net realizable

value less the corresponding allowance for obsolescence.

Net realizable value is the estimated selling price in the

ordinary course of business, less the costs of completion

and direct selling expenses. In general, cost is determined

by using weighted average price.

The allowance for obsolescence has been calculated based

on Management’s analysis of aging.

l. construction contracts Work in progress

A construction contract is a contract specifically negotiated

for the construction of an asset or a combination of assets

that are closely interrelated or interdependent in terms of

their design, technology and functions or their ultimate

purpose or use.

When the outcome of a construction contract can be

reliably estimated, contract revenue and contract costs are

acknowledged by the percentage of completion method.

The stage of completion is measured by reference to the

relationship contract costs incurred for work performed

to date bear to the estimated total costs for the contract.

When it is probable that total contract costs will exceed

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total contract revenue, the expected loss is immediately

recognized as an expense.

When the outcome of a construction contract cannot be

reliably estimated, contract revenue is recognized to the

extent of contract costs incurred where it is probable those

costs will be recoverable. Contract costs are recognized

when incurred.

Costs incurred in the year in connection with future activity

on a contract are excluded from contract costs in determining

the stage of completion. They are presented as inventories,

prepayments or other assets, depending on their nature.

When a construction contract includes reimbursable works

and the Company is responsible for providing design,

engineering and construction services and labor and all

equipment and materials, construction equipment and

supplies, the amount of these works is recognized in

revenues and costs.

TEI&C shows as an asset (within Construction contracts

work in progress) the gross amount due from clients for

construction contracts for all contracts in progress for which

costs incurred plus recognized profits (less recognized

losses) exceed progress billings.

TEI&C presents as a liability (within Construction contracts

work in progress) the gross amount due to clients for

construction contract for all contracts in progress for which

progress billings exceed costs incurred plus recognized

profits (less recognized losses).

m. otHer investMents

Other investments include deposits in investments funds and

equity instruments, which are classified as financial assets

“at fair value through profit and loss” or “available for sale”.

Investments in companies in which TEI&C has less than 20%

of the voting rights are valued at cost, because its fair value

cannot be reliably measured.

n. trade and otHer receivaBLes

Trade and other receivables are initially measured at their

fair value, which is generally their nominal value, unless the

effect of discounting is material, subsequently measured at

amortized cost less provision for impairment.

An allowance for doubtful accounts is established when

there is objective evidence that the Company will not be

able to collect all amounts due according to the original

terms of receivables.

o. trade and otHer payaBLes

Trade and other payables are obligations to pay for goods

or services that have been acquired in the ordinary course

of business from suppliers. Accounts payable are classified

as current liabilities if payment is due within one year or less.

If not, they are presented as non-current liabilities.

Trade and other payables are recognized initially at fair value

and subsequently measured at amortized cost.

p. casH and casH eQuivaLents

Assets recorded in cash and cash equivalents are carried

at fair market value or at historical cost which approximates

fair market value. For the purposes of the consolidated

statement of cash flows, cash and cash equivalents

comprise cash on hand, demand deposits with banks and

other short-term highly liquid investments with original

maturities of three months or less and bank overdrafts.

Bank overdrafts are included within borrowings in current

liabilities in the consolidated statement of financial position.

q. eQuity

Ordinary shares are classified as equity. The balances

of the consolidated statement of changes in equity at

December 31, 2012 and 2011 include:

The value of share capital, capital surplus, reserve for PP&E

revaluation surplus, reserve for cash flow hedge, legal

reserve and retained earnings in accordance with IFRS.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

The currency translation differences of TEI&C’s subsidiaries.

Non-controlling interests in subsidiaries.

Dividends distributions are recorded in the Company’s

financial statements when Company’s shareholders have

the right to receive the payment, or when interim dividends

are approved by the Board of Directors in accordance with

the by-laws of the Company.

r. BorroWings

Borrowings are initially recorded based on the fair value

of the net proceeds. Borrowings are subsequently stated

at amortized cost using the effective yield method; any

difference between proceeds (net of transaction costs) and

the redemption value is recognized in the income statement

over the life of the borrowings.

Borrowings are classified as current liabilities unless TEI&C

has an unconditional right and firm intention to defer

settlement of the liability for at least 12 months after

the balance sheet date.

s. current and deferred incoMe taX

The current income tax charge is calculated on the basis

of the tax laws in force in the countries in which TEI&C

and each one of its subsidiaries operate.

Deferred income tax is recorded in full, using the liability

method, on temporary differences arising between the tax

basis of assets and liabilities and their carrying amounts in

the consolidated financial statements. Currently enacted tax

rates are used in the determination of deferred income tax.

Deferred tax assets are recognized to the extent that it is

probable that future taxable profit will be available to offset

temporary differences.

Deferred income tax is provided on temporary differences

arising on investments in subsidiaries, associated companies

and joint ventures, except where the timing of the reversal

of the temporary difference can be controlled and it is

probable that the temporary difference will not reverse in the

foreseeable future.

The tax expense for the year comprises current and deferred

tax. Tax is recognized in the Consolidated Income Statement,

except to the extent that it relates to items recognized in

the Consolidated Statement of Comprehensive Income.

In this case, the tax is also recognized in the Consolidated

Statement of Comprehensive Income.

t. eMpLoyee Benefits

PEnSIOn PlAnS AnD OTHER POST-RETIREMEnT BEnEFITS

Certain TEI&C’s subsidiaries have in force benefit plans under

the modality of “non-funded defined benefits” and “other

long-term benefits” which, subject to certain conditions

established by such companies, are granted during the

term of employment and after retirement, which plans are

recorded following the guidelines of accounting rules and

regulations in force and effect.

The provisioned liabilities for such employee benefits are

recorded at the current value of the future flows of funds, the

amount being charged during the relevant employees’ remaining

years of services up to the moment when the conditions

necessary for the granting of each benefit are satisfied. Such

liabilities are calculated by independent actuaries, at least once

a year, using the “Projected credit unit” method.

Certain TEI&C’s subsidiaries officers are covered by a specific

employee retirement plan designed to provide retirement,

termination and other benefits to those officers.

Retirement costs are assessed using the projected unit

credit method: the cost of providing retirement benefits is

charged to the statement of income over the service lives of

employees based on actuarial calculations. This provision is

measured at the present value of the estimated future cash

outflows, using applicable interest rates. Actuarial gains and

losses are recognized over the average remaining service

lives of employees.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

Benefits provided by the plan are calculated on a seven-year

salary average.

Certain TEI&C’s subsidiaries are accumulating assets for

the ultimate payment of those benefits in the form of

investments. The investments are not part of a particular

plan, nor are they segregated from TEI&C’s other assets.

Due to these conditions, the plan is classified as “unfunded”

under IFRS.

Other subsidiaries have implemented a supplementary

pension benefit plan with two programs: “PGBL - Plano

Gerador de Benefício Livre” and “ VGBL - Programa de

Seguro de Vida com Cobertura por Sobrevivência”. These

programs are generally funded through payments by the

subsidiaries to independent insurance companies. Both

programs are defined contribution plans.

The laws in the different countries in which TEI&C’s subsidiaries

carry out their operations provide for pension benefits to be

paid to retired employees from government pension plans and/

or private funds managed plans. Amounts payable to such plans

are generally calculated based on a percentage of employee

salaries and are accounted for on an accrual basis.

TERMInATIOn BEnEFITS

Termination benefits are payable whenever an employee’s

employment is terminated before the normal retirement

date or whenever an employee accepts voluntary redundancy

in exchange for these benefits.

TEI&C’s subsidiaries recognize termination benefits when

it is demonstrably committed to either terminating the

employment of current employees according to a detailed

formal plan without possibility of withdrawal, or providing

termination benefits as a result of an offer made to

encourage voluntary redundancy. Benefits falling due more

than 12 months after balance sheet date are discounted to

present value.

PROFIT-SHARInG AnD BOnUS PlAnS

A liability for employee benefits in the form of profit-sharing

and bonus plans is recognized in other provisions when

there is no realistic alternative but to settle the liability and

provided at least one of the following conditions is met:

there is a formal plan and the amounts to be paid are

determined before the time of issuing the financial

statements; or

past practice has created a valid expectation in employees that

they will receive a bonus/profit-sharing and the amount

can be determined before the financial statements are issued.

Liabilities for profit-sharing and bonus plans are expected

to be settled within 12 months and are measured

at the amounts expected to be paid when they are settled.

COnTRIBUTIOn PlAnS

A defined contribution plan is a pension plan under which

the companies pay fixed contributions to a separate entity.

Companies have no further payment obligations once the

contributions have been paid. The contributions are recognized

as employee benefit expense when they are due. Prepaid

contributions are recognized as an asset to the extent that a

cash refund or a reduction in the future payments is available.

Contributions by the companies include: (a) Basic

contribution – Companies are committed to contribute

amounts equal to the amounts contributed by the employees

up to certain limits, (b) Extraordinary contributions – Are non-

mandatory contributions that can be made on a voluntary

basis either by the companies or the employees.

lOnG-TERM InCEnTIVE

TEI&C S.A. adopted a long-term retention and incentive

program for some employees of certain subsidiaries.

According to such program, certain senior executives of such

subsidiaries shall receive a number of units valued at the

>

>

>

>

77

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

book value of the Shareholders’ Equity per share of TEI&C

S.A. (excluding the non-controlling interest).

Units shall accrue within a 4-year period and the applicable

subsidiaries shall pay them upon the lapsing of a 10-year period

from the date of receipt, with the option for the employee to

request them as from the seventh year, or when the employee

leaves the subsidiary in charge of payment, at the book value

of the controlling Shareholders’ Equity per share of TEI&C S.A.

at the time of payment. The beneficiaries shall also receive

amounts in cash equivalent to the dividend paid by share, every

time TEI&C S.A. pays any dividend in cash to its shareholders.

As of December 31, 2012, TEI&C S.A. has acknowledged

liabilities for USD 4,968 (USD 3,396 at December 31,2011).

The charge to profits as of December 31, 2012 for the sum

of USD 3,063 (USD 3,396 at December 31, 2011), is stated

in the line “Labor Costs” in note 27 and in “Net foreign

exchange transaction results” in note 28.

u. provisions

Provisions are recognized when TEI&C has a present legal

or constructive obligation as a result of past events, it is

probable that an outflow of resources will be required to

settle the obligation, and a reliable estimate of the amount

can be made. When TEI&C expects a provision to be

reimbursed, for example under an insurance contract, the

reimbursement is recognized as a separate asset but only

when the reimbursement is virtually certain.

v. revenue recognition

REVEnUES AnD COST RECOGnITIOn FOR lOnG-TERM

COnSTRUCTIOn COnTRACTS

See note 2.l.

SAlES OF SERVICES

The Company sells maintenance services. The revenue is

generally recognized in the period the services are provided,

using a straight-line basis over the term of the contract.

OTHER REVEnUES

Other revenues earned by TEI&C are recognized on the

following bases:

Interest income: on the effective yield basis.

Dividend income from investments in other companies:

when TEI&C’s right to collect is established.

w. Leases

Leases in which a significant portion of the risks and rewards of

ownership are transferred from the lessor to TEI&C are classified

as finance leases. At the commencement of the lease term,

TEI&C recognizes finance leases as assets and liabilities in the

statement financial position at amounts equal to the value of the

leased property or, if lower, the present value of the minimum

lease payments, each determined at the inception of the lease.

The discount rate used in calculating the present value of the

minimum lease payments is the interest rate implicit in the lease

should this be practicable to determine; otherwise, the lessee’s

incremental borrowing cost is used. Any initial direct costs of the

lessee are added to the amount recognized as an asset.

Each lease payment is allocated between the liability and

finance charges. The corresponding rental obligations, net of

finance charges, are included in borrowing. The interest element

of the finance cost is charged to the income statement over

the lease period so as to produce a constant periodic rate of

interest on the remaining balance of the liability for each period.

The property, plant and equipment acquired under finance

leases is depreciated over their estimated useful lives.

See amounts of assets and liabilities held under finance

leases in note 22.

Leases in which a significant portion of the risks and rewards of

ownership are retained by the lessor are classified as operating

leases. Payments made under operating leases (net of any

incentives received from the lessor) are charged to the income

statement on a straight-line basis over the period of the lease.

>

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>

78

TE

I&C

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

x. assets and LiaBiLities cLassified as HeLd

for saLe

Assets of disposal group and liabilities associated with these

assets are classified as “assets and liabilities classified as

held for sale” when their carrying amount is to be recovered

principally through a sale transaction and a sale is considered

highly probable.

They are stated at the lower of carrying amount and fair value

less costs to sell if their carrying amount is to be recovered

principally through a sale.

note 3.

financiaL risk ManageMent

The nature of TEI&C’s operations as well as its multinational

character expose the Company to a variety of risks, including

the effects of changes in foreign currency, exchange rates,

capital risk, concentration of credit risk, liquidity risk and interest

rates risk. The nature of its contracts implies that TEI&C has

to manage risks regarding uncertain conditions in the hiring of

procurement, which is usually a large part of the scope of work.

To manage the high volatility related to these financial

matters, Management evaluates exposures on a

consolidated basis to take advantage of its global and

multinational activity. For some of these exposures,

the Company or its subsidiaries enter into derivative

transactions in order to manage potential adverse impacts

on the Company’s financial performance.

a. capitaL risk

The Company seeks to maintain an adequate debt to total

equity ratio considering the risks involved in the industry

and the markets where it operates. The year-end ratio

of debt to total equity (where “debt” comprises all

financial borrowings and “equity” is the sum of financial

borrowings and shareholders’ equity) is 0.15 as of

December 31, 2012, and 0.13 as of December 31, 2011.

The Company does not have to comply with regulatory

capital adequacy requirements.

b. foreign eXcHange risk

TEI&C’s business activities are conducted in the

respective functional currencies of the subsidiaries.

However, the Company transacts in currencies other than

the respective functional currencies of the subsidiaries.

There are significant monetary balances held by the

Company at each year-end that are denominated in USD.

It is worth stating that the USD is not the functional

currency in some subsidiaries.

79

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

The following tables show a breakdown of the TEI&C’s

net monetary position in various currencies for the main

functional currency in which the Company operates:

ARS

CAD

CRC

EUR

GTq

Hnl

nIO

USD

UyU

GBP

12.31.12

functionaL currencY (in thousand usd)

(42)

(10)

84

5,471

314

(45)

34

103,305

(16)

(139)

108,956

totaL

–

–

–

–

–

–

–

499

–

–

499

bob

(42)

–

–

409

–

–

–

(9,555)

–

–

(9,188)

uyu

–

–

84

–

314

(45)

34

–

(16)

–

371

usd

–

–

–

–

–

–

–

40,125

–

–

40,125

pen

–

–

–

1,229

–

–

–

28,987

–

–

30,216

MXn

–

–

–

–

–

–

–

1,024

–

–

1,024

eur

–

–

–

–

–

–

–

32,784

–

–

32,784

chL

–

–

–

–

–

–

–

243

–

–

243

cad

–

–

–

4,414

–

–

–

27,316

–

–

31,730

brL

–

(10)

–

(581)

–

–

–

(18,118)

–

(139)

(18,848)

arsnet Monetary position asset / (LiabiLity)

80

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

The Company estimates that the impact under IFRS on

the net exposure at December 31, 2012 of a simultaneous

1% favorable or unfavorable movement in the main

exchange rates would result in a maximum pre-tax gain

or loss of approximately USD 1,090 as compared

with a maximum pre-tax gain or loss of approximately

USD 1,099 at December 31, 2011.

The Company’s net exposure to the currency other than the

functional currency is managed on a case-by-case basis,

partly by hedging certain expected cash flows with foreign

exchange derivative contracts.

The Company performed a sensitive analysis of the Derivative

Financials Instruments of a 10% favorable or unfavorable

movement of the Mexican Peso against the USD at December

31, 2012. The impact would have been, in the case of

strengthening (USD 7,071) in equity and (USD 1,319) in profit

or (loss) and in the case of weakening USD 8,642 in equity

and USD 1,612 in profit or (loss).

Chf: swiss franc Chl: Chilean peso CrC: Costa rican Colon uyu: uruguayan pesoeur: euro gbp: sterling poundgtq: guatemalan quetzal

ref:ars: argentine peso hnl: honduran lempirabrl: brazilian real mxn: mexican pesobob: bolivian peso nio: nicaraguan Cordoba oroCad: Canadian dollar pen: peruvian nuevo sol

ARS

CAD

CHF

CRC

EUR

GTq

Hnl

nIO

USD

UyU

12.31.11

(507)

(10)

(3)

758

1,158

395

(94)

(21)

108,277

(62)

109,891

totaL

(219)

–

–

–

1,326

–

–

–

2,519

–

3,626

uyu

(288)

–

–

758

(65)

395

(94)

(21)

–

(62)

623

usd

–

–

–

–

–

–

–

–

22,899

–

22,899

pen

–

–

–

–

1,349

–

–

–

24,007

–

25,356

MXn

–

–

–

–

–

–

–

–

13,442

–

13,442

eur

–

–

–

–

–

–

–

–

10,992

–

10,992

chL

–

–

–

–

–

–

–

–

5,175

–

5,175

cad

–

–

–

–

–

–

–

–

45,506

–

45,506

brL

–

(10)

(3)

–

(1,452)

–

–

–

(16,263)

–

(17,728)

arsnet Monetary position asset / (LiabiLity)

functionaL currencY (in thousand usd)

81

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

c. price risk

The Company has no significant risk from the fluctuation in

the market prices.

The group´s investments in equity, classified on the

consolidated balance sheet as available for sale, are not

publicly traded and are valued at cost.

Cash and cash equivalents and other investments classified

as fair value through profit or loss, are carried at fair

market value or at historical cost which approximates fair

market value.

d. credit risk

Most accounts receivable relate to clients operating in a

range of industries and countries with contract which require

ongoing payments as the development project progresses,

At the date of these consolidated financial statements most

credits past due have been collected.

upon the rendering of services or upon completion and

delivering of the project. It is normal practice that the

Company reserves the right to suspend the project if there

is a remarkable breach of the contract term, in particular the

non-payment of amounts owed.

In general the greatest risk for such assets is the risk of

not collecting a trade account receivable. This is because,

a) it may be a significant value in the development of works

or in the provision of services; b) it is beyond the Company’s

control. However, the risk of customers being unable to make

a payment in such contracts is considered to be low, and

typically relate to problems characterized as technical matters,

i.e. relating to the risk inherent in the service rendered, under

the Company’s control.

The following table sets forth details of the age of trade

receivables:

december 31, 2012

Trade Receivables

Allowance for doubtful accounts

net value

december 31, 2011

Trade Receivables

Allowance for doubtful accounts

net value

11,104

(9,846)

1,258

26,043

(10,570)

15,473

263,008

–

263,008

191,990

–

191,990

39,775

–

39,775

27,847

–

27,847

313,887

(9,846)

304,041

245,880

(10,570)

235,310

> 180 days1 - 180 days

past duenot due trade receivabLes

8

8

notes

82

TE

I&C

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

e. LiQuidity risk

Management maintains sufficient cash and cash equivalents

to finance normal operations and believes that TEI&C also has

access to market for short-term working capital requirements.

TEI&C financing strategy is to maintain adequate financial

resources and access to additional liquidity. During the year

ended December 31, 2012 and 2011, TEI&C has counted

on cash flows from operations as well as additional bank

financing to fund its transactions.

TEI&C has a conservative approach to the management

of its liquidity, which consists of cash and cash equivalents,

comprising cash in banks, short-term money market funds

and highly liquid short-term securities.

TEI&C holds its cash and cash equivalents primarily in USD.

Liquid financial assets as a whole are 20% of total assets

at December 31, 2012 (17% at December 31, 2011).

See note 14 for the maturity of borrowings, note 16

for the maturity of trade and other payables and note 17

for the maturity of other liabilities.

f. interest rate risk ManageMent

The Company’s financing strategy is to manage

interest expense using a mixture of fixed-rate and

variable-rate debt.

The following table summarizes the proportions of

variable-rate and fixed-rate debt as of each year end.

Fixed rate

Variable rate

87,793

15,027

66%

34%

87,235

44,235

85%

15%

borrowings percentage percentageborrowings

As the Company has no significant interest-bearing

assets, the Company’s income and operating cash flows

are substantially independent from changes in market

interest rates.

The Company estimated that, if interest rates would have

been 100 basis points higher, with all other variables held

constant, total profit for the year ended December 31, 2012

would have been USD 442 lower (USD 150 lower for year

ended December 31, 2011).

g. fair vaLue estiMation

The carrying amount of financial assets and liabilities with

maturities of less than one year approximates to their fair value.

See note 10 – “Determining fair values”.

12.31.12 12.31.11

83

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 4.

property, pLant and eQuipMent (pp&e)

The item evolution is as follows:

The item consists in the following:

Beginning of the year

Additions

Disposals

Depreciation

Translation differences

Changes in reserve of PP&E

Transferred to disposal group classified

as held for sale

Other movements

Impairment loss

december 31, 2012

land and buildings

Equipment and machinery

Vehicles

Other assets

total december 31, 2012

59,908

26,002

(528)

(13,253)

(5,642)

–

(164)

(5,010)

(105)

61,208

(23,044)

(143,713)

(48,874)

(81,454)

(297,085)

42,984

10,636

(2,035)

(10,292)

(2,013)

(251)

(740)

3,983

(57)

42,215

104,371

266,565

91,089

142,662

604,687

136,233

25,418

(8,405)

(24,093)

(1,964)

(1,507)

(104)

(2,069)

(657)

122,852

67,757

20,532

(3,898)

(2,041)

(4,119)

–

–

3,096

–

81,327

306,882

82,588

(14,866)

(49,679)

(13,738)

(1,758)

(1,008)

–

(819)

307,602

81,327

122,852

42,215

61,208

307,602

non-current

accuMuLated depreciation

oriGinaL vaLue

totaL 12.31.12

net vaLue 12.31.12

other assets (1)

vehicLesequipMent and Machinery

Lands and buiLdings

(1) it includes deferred costs of our subsidiariary fepsa and miscellaneous assets.

84

TE

I&C

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

The item evolution is as follows:

The item consists in the following:

Lease rentals amounting to USD 64,105 (at December

31, 2011: USD 70,815) relating to the lease of machinery,

construction equipment and vehicles, are included in the

income statement.

Beginning of the year

Additions

Disposals

Depreciation

Translation differences

Other movements

Change in reserve for PP&E

december 31, 2011

land and buildings

Equipment and machinery

Vehicles

Other assets

total december 31, 2011

59,492

21,573

(1,561)

(10,357)

(4,586)

(4,648)

(5)

59,908

(23,577)

(142,136)

(46,702)

(76,619)

(289,034)

49,684

13,537

(7,998)

(8,690)

(3,457)

8

(100)

42,984

91,334

278,369

89,686

136,527

595,916

148,024

28,149

(14,602)

(24,141)

(5,424)

4,627

(400)

136,233

63,197

12,173

(486)

(2,680)

(4,460)

13

–

67,757

320,397

75,432

(24,647)

(45,868)

(17,927)

–

(505)

306,882

67,757

136,233

42,984

59,908

306,882

non-current totaL12.31.11

net vaLue12.31.11

other assets (1)

vehicLesequipMent and Machinery

Lands and buiLdings

accuMuLated depreciation

oriGinaL vaLue

(1) it includes deferred costs of our subsidiariary fepsa and miscellaneous assets.

85

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

tecHnicaL appraisaL of pp&e

The technical appraisal was performed by external

professionally qualified valuation specialists in relation to

machinery, construction equipment and vehicles, based

on periodic valuations of the assets in order not to differ

materially from their fair value at the financial statements date.

Management believes that the resulting value approximates

fair value. As per International Accounting Standard No. 16

“Property, plant and equipment” (“IAS 16”), when an item

of property and equipment is revalued, the entire class of

property and equipment to which that asset belongs should

be revalued. Machinery, construction equipment and vehicles

corresponding to the subsidiaries that did not make the

abovementioned revaluation are not significant.

The “sales comparison” method was used to obtain the

fair value of these assets for which there is a wide and

transparent secondary market. This approach consists

in obtaining information from recent sales or offers of

assets bearing similar characteristics, age and condition.

Correction factors that take into account the status of the

market offer and demand prevailing as of the date of the

appraisal, the relative age, probable residual useful life, state

of conservation and asset obsolescence are applied to the

sales price. The “cost less depreciation” method was used to

obtain the fair value of assets with a restricted sales market.

Depreciation was computed based on generally used and

accepted engineering criteria which led to establishing the

reasonable value of PP&E. Such criteria take into account

factors such as the age of each asset, probable residual

or expected life, state of conservation and degree of

obsolescence. The market value was obtained by applying

the depreciation ratio to the value of a new asset.

These subsidiaries intend to perform this appraisal with the

frequency required by IAS 16 in order to keep fair values of

appraised assets updated.

On December 31, 2012 the net decrease in the value of

machinery, construction equipment and vehicles amounted

to USD 1,758 (at December 31, 2011: USD 505) and was

attributed to other comprehensive income and accumulated

in equity under “Reserve for PP&E revaluation surplus”

(corresponding to decrease in previously revaluated assets).

86

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

If machinery, equipment and vehicles had been valued at

historical cost, the values would have been the following:

Historical cost

Accumulated depreciation

residual value

163,884

(118,934)

44,950

212,954

(137,319)

75,635

12.31.12 12.31.11

The “Reserve for PP&E revaluation surplus” is reversed, net of

tax effects, through (i) the retirement of the equipment appraised

or (ii) depreciation charges. The difference between depreciation

of appraised assets and depreciation of the historical values of

such assets is charged against accumulated results.

The straight-line method has been used to calculate

depreciation, by applying annual ratios sufficient to

terminate the value of each item as to the end of their

estimated useful life.

87

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

Beginning of the year

Additions

Disposals and retirements

Amortization

Translation differences

december 31, 2012

447

–

–

(44)

(53)

350

5,640

5,141

(176)

(1,857)

(475)

8,273

6,087

5,141

(176)

(1,901)

(528)

8,623

other intanGibLe assets - coinfer

accuMuLated aMortization

sYsteMs deveLopMent

oriGinaL vaLue

12.31.12

note 5.

intangiBLe assets

The item evolution is as follows:

The item consists in the following:

Systems development

Other intangible assets – COInFER

total december 31, 2012

(12,867)

(1,145)

(14,012)

21,140

1,495

22,635

8,273

350

8,623

net vaLue 12.31.12

88

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

The item evolution is as follows:

Beginning of the year

Additions

Amortization

Translation differences

december 31, 2011

534

–

(64)

(23)

447

3,292

3,686

(1,061)

(277)

5,640

3,826

3,686

(1,125)

(300)

6,087

other intanGibLe assets - coinfer

sYsteMs deveLopMent

12.31.11

accuMuLated aMortization

oriGinaL vaLue

The item consists in the following:

Systems development

Other Intangible assets – COInFER

total december 31, 2011

(10,744)

(1,261)

(12,005)

16,384

1,708

18,092

5,640

447

6,087

net vaLue12.31.11

89

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

non-current

norpower S.A. de C.V.

Fluor Techint S.R.l. Construcción y Servicios ltda.

Consorcio Constructor Techint Besalco ltda.(1)

Other

total non-current investment in associated companies

Beginning of the year

Translation differences

Result from investments

Reclasification to Other investments

Investment adquisition and contributions

Dividends earned

end of the year

40%

50%

50%

–

40%

50%

50%

–

158

1,482

123

85

1,848

594

508

1,202

97

2,401

1,624

459

1,471

(83)

6

(1,629)

1,848

1,848

16

537

–

–

–

2,401

% of ownership

% of ownership

book vaLue

book vaLue

note 6.

investMents in associated coMpanies

12.31.12

12.31.12

12.31.11

12.31.11

(1) on august 18, 2011 techint Chile s.a. and besalco md montajes s.a. created Consorcio Constructor techint besalco ltda. holding 50% of shares each.

90

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

The result from investments has arisen from the Company’s

participation in the results of the following companies:

Fluor Techint S.R.l. Construcción y Servicios ltda.

Consorcio Constructor Techint Besalco ltda.

norpower S.A. de C.V.

Others

1,836

118

89

(572)

1,471

(1,098)

1,072

419

144

537

The following amounts represent the assets,

liabilities, revenues and results of the most important

associated companies:

december 31, 2012

norpower S.A. de C.V.

Fluor Techint S.R.l. Construcción y Servicios ltda.

Consorcio Constructor Techint Besalco ltda.

december 31, 2011

norpower S.A. de C.V.

Fluor Techint S.R.l. Construcción y Servicios ltda.

Consorcio Constructor Techint Besalco ltda.

28,021

7,970

21,251

30,668

16,622

3,888

13,666

29,894

3,343

21,455

25,692

6,650

15,164

30,911

5,747

21,851

28,656

6,895

1,047

(2,197)

2,144

222

3,672

236

revenuesLiabiLitiesassets resuLts

12.31.12 12.31.11

91

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

non-current

Other investment in related parties

Other

total non-current other investments

current

Temporary placements

total current other investments

non-current

Beginning of the year

Translation differences

Reclasification from Investments in associated companies

Result from other investments

Increase of other investments

Decrease of other investments

end of the year

current

Beginning of the year

Translation differences

Increase of other investments (1)

Result from other investments

Decrease of other investments

end of the year

8,456

110

8,566

40,186

40,186

7,500

(600)

83

818

857

(92)

8,566

622

(1)

40,167

–

(602)

40,186

8,946

1,006

9,952

16

16

8,566

(1,093)

–

631

1,848

–

9,952

40,186

(3)

–

216

(40,383)

16

12.31.12

12.31.12

12.31.11

12.31.11

note 7.

otHer investMents

(1) at december 31, 2011 the Company had financial invested in a financial product denominated pass-through note, issued by Jp morgan Chase bank na, with original maturities of 90 and 180 days and a final due date on January 3, 2012, with average interest of 1.36% per year and a fair value and book value of usd 40,167.

24

notes

92

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

non-current

Trade receivables

Trade receivables from related parties

Claims receivables

Receivables for sales of investments

Other trade receivables – net

Other receivables from related parties

Other

total non-current trade and other receivables

current

Trade receivables – net

Trade receivables from related parties

Invoice holdback

Other trade receivables

Other receivables from related parties

Other receivables

Advanced to suppliers and subcontractors

Prepayments

total current trade and other receivables

–

56

158,961

1,242

12,216

7,780

6,132

186,387

235,310

55,053

5,366

805

7,062

37,738

25,831

4,454

371,619

1,078

43

165,005

97

34,448

9,656

9,489

219,816

302,963

92,187

3,481

570

5,965

40,038

30,205

3,259

478,668

note 8.

trade and otHer receivaBLes

12.31.12 12.31.11

24

23

24

24

24

notes

93

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

non-current (1)

Beginning of the year

Translation differences

Reversal

end of the year

current (2)

Beginning of the year

Translation differences

Additions

Used

end of the year

801

(61)

(8)

732

11,734

(1,254)

159

(69)

10,570

732

(91)

–

641

10,570

(972)

256

(8)

9,846

At December 31, 2012 and 2011 the evolution of the

allowance for doubtful accounts that was deducted from

Trade and Other receivables is:

12.31.12 12.31.11

(1) deducted from other receivables.(2) deducted from trade receivables.

94

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

Materials and spare parts

Valuation allowance

total inventories

Beginning of the year

Translation differences

Reversal

Additions

Used

end of the year

42,617

(8,118)

34,499

7,092

1,015

–

6,160

(6,149)

8,118

80,075

(5,650)

74,425

8,118

(5)

(399)

2,742

(4,806)

5,650

note 9.

inventories

The item consists in the following:

At December 31, 2012 and 2011 the evolution of the

valuation allowance that was deducted from Inventories is:

12.31.12

12.31.12

12.31.11

12.31.11

95

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

assets as per balance sheet

Trade and other receivables (1)

Derivative financial instruments

Other investments

Cash and cash equivalents

total

Liabilities as per balance sheet

Borrowings

Financial leases

Derivative financial instruments

Trade and other payables (1)

Other liabilities (2)

total

124,004

7,466

–

217,038

110,490

458,998

–

–

5

–

–

5

124,004

7,466

5

217,038

110,490

459,003

–

–

98

–

98

avaiLabLe- for-saLe

–

194

–

–

194

derivatives used

for hedGinG

other financiaL LiabiLities at

aMortized cost

derivatives used

for hedGinG

665,020

194

9,968

324,132

999,314

totaL

totaL

665,020

–

9,870

–

674,890

Loans and

receivabLes

–

–

–

324,132

324,132

assets at fair vaLue throuGh the

profit and Loss

12.31.12

(1) excluding prepayments and advanced to suppliers and subcontractors.

(1) excluding social security contributions.

(2) excluding advances received on construction contracts.

note 10.

financiaL instruMents By category

96

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

assets as per balance sheet

Trade and other receivables (1)

Other investments

Cash and cash equivalents

total

Liabilities as per balance sheet

Borrowings

Financial leases

Derivative financial instruments

Trade and other payables (1)

Other liabilities (2)

total

–

110

–

110

93,965

8,855

–

166,793

129,924

399,537

527,721

8,456

–

536,177

–

40,186

234,908

275,094

527,721

48,752

234,908

811,381

93,965

8,855

2,388

166,793

129,924

401,925

avaiLabLe- for-saLe

other financiaL LiabiLities at

aMortized cost

totaL

totaL

assets at fair vaLue throuGh the

profit and Loss

12.31.11

(1) excluding prepayments and advanced to suppliers and subcontractors.

(1) excluding social security contributions.

(2) excluding advances received on construction contracts.

Loans and

receivabLes

–

–

2,388

–

–

2,388

derivatives used

for hedGinG

97

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

deterMining fair vaLues

The table below analyzes financial instruments carried at fair

value, by valuation method.

The different methods have been defined as follows:

Level 1- Quoted prices (unadjusted) in active markets for

identical assets or liabilities.

Level 2- Inputs other than quoted prices included within level 1

that are observable for the asset or liability, either directly (that

is, as prices) or indirectly (that is, derived from prices).

Level 3- Inputs for the asset or liability that are not based

on observable market data (that is, unobservable inputs).

The following table presents the assets that are measured

at fair value:

assets at december 31, 2012

Cash and cash equivalents

total

assets at december 31, 2011

Cash and cash equivalents

Other investments

total

–

–

–

–

–

–

–

–

–

–

324,132

324,132

234,908

40,186

275,094

324,132

324,132

234,908

40,186

275,094

LeveL 3LeveL 2LeveL 1 totaL

98

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 12.

casH and casH eQuivaLents

Cash at bank and on hand

Short-term bank deposits

Short-term deposits in related parties

total cash and cash equivalents

Cash and cash equivalents

Bank overdrafts

total cash and cash equivalents

39,455

167,388

28,065

234,908

234,908

(36,508)

198,400

58,703

220,186

45,243

324,132

324,132

(21,044)

303,088

Cash, cash equivalents and bank overdrafts include the

following for the purposes of the consolidated statement

of cash flows:

12.31.12

12.31.12

12.31.11

12.31.11

note 11.

assets of disposaL group cLassified

as HeLd for saLe

assets

The item consists in the following:

Assets of disposal group classified as held for sale

Property, plant and equipment

Other investment

total held – for – sale assets

–

20

20

1,008

21

1,029

24

12.31.12 12.31.11

notes

99

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 13.

sHare capitaL

The composition of the Company’s capital is as follows:

at december 31, 2011

at december 31, 2012

5,181,537

5,181,537

5,181,537

5,181,537

ordinarY shares

nuMber of shares

In THOUSAnDS OF SHARES

The ordinary shares have a value of UYU 1 per share and one

vote per five shares. All issued shares are fully paid.

At December 31,2012 the authorized capital stock amounted

to UYU 5,500,000 thousand.

On June 26, 2008, the Special Shareholders’ Meeting decided

to increase the authorized capital to UYU 5,500,000 thousand

and accepted an Irrevocable Contribution of USD 30,000

thousand (equivalent to UYU 586,830 thousand) from Techint

Investments NV, the parent company of Techint Limited.

The Special Shareholders' Meeting of September 30,

2008 ratified the decisions taken at the previous Special

Shareholders' Meetings and decided to change from

nominative shares to bearer shares and capitalize all the

pending irrevocable contributions (USD 72,317 thousand).

The new authorized capital, the capitalization and the

change in the type of shares were authorized by the AIN

on July 6, 2011, and such changes were registered

with the Registry of Legal Entities (Registro de Personas

Jurídicas) on July 11, 2011.

100

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 14.

BorroWings

non-current

Bank borrowings

Other borrowings

Financial leases

total non-current borrowings

current

Bank overdrafts

Bank borrowings

Borrowings from related parties

Other borrowings

Financial leases

total current borrowings

Total Borrowings

25,557

4,374

6,745

36,676

36,508

24,974

1,337

1,215

2,110

66,144

56,721

2,092

5,158

63,971

21,044

27,115

15,551

1,481

2,308

67,499

8.07% 10.15%

12.31.12

12.31.12

12.31.11

12.31.11

The weighted average interest rates before tax shown bellow

were calculated using the rates set for each instrument in its

corresponding currency as of December 31, 2012 and 2011.

24

notes

101

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

Breakdown of borrowings by currency and rate is as follows:

non-current

ARS

ARS

BRl

CHl

Mxn

PEn

USD

USD

current

ARS

ARS

BRl

CHl

Mxn

PEn

USD

USD

UyU

Fixed

Variable

Variable

Fixed

Fixed

Fixed

Fixed

Variable

Fixed

Variable

Variable

Fixed

Fixed

Fixed

Fixed

Variable

Fixed

12.31.12 currencY interest rate 12.31.11

9,120

–

30,063

5,158

2,302

–

6,122

11,206

63,971

23,710

31

1,393

2,277

696

5,170

23,995

1,542

8,685

67,499

698

36

–

6,709

3,255

4,889

8,383

12,706

36,676

39,220

130

–

1,980

–

11,258

9,642

2,155

1,759

66,144

ref:ars: argentine pesobrl: brazilian realChl: Chilean pesomxn: mexican pesopen: peruvian nuevo sol uyu: uruguayan peso

102

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

Financial leases

Other borrowings

total Borrowings

interest to be accrued

Financial leases

Other borrowings

total Borrowings

interest to be accrued

1,289

1,227

2,516

131

1,677

5,038

6,715

231

1,289

2,528

3,817

95

1,678

2,098

3,776

315

–

33,213

33,213

–

–

4,856

4,856

–

1,290

12,238

13,528

1,205

1,713

11,132

12,845

916

2,308

65,191

67,499

1,908

2,110

64,034

66,144

1,775

1,290

9,607

10,897

582

1,677

6,807

8,484

500

1 year or Less

1 year or Less

1 - 2 years

1 - 2 years

2 - 3 years

2 - 3 years

3 - 4 years

3 - 4 years

4 - 5 years

4 - 5 years

over 5 years

over 5 years

The maturity of borrowings is as follows:

The fair value of borrowings equals their carrying amount,

as the impact of discounting is not significant.

12.31.12

12.31.11

103

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 15.

deferred incoMe taXes

As further explained in note 2.s., TEI&C and most of the

Company’s subsidiaries are subject to income taxes. At

December 31, 2012 and 2011 the Company discloses

under the caption “deferred income tax assets” the net

balance recognized by those subsidiaries that recorded

a net deferred income tax asset, while the net balance

recognized by those subsidiaries that recorded a net

deferred income tax liability has been disclosed under

“deferred income tax liabilities” in the consolidated

statement of financial position.

The main subsidiaries generating deferred income tax

balances are detailed below:

deferred income tax assets

TEBRA

TEARG

TEMEx and subsidiaries

TEnCO’s subsidiaries

Other

deferred income tax liabilities

TEnCO’s subsidiaries

TEMEx and subsidiaries

TEARG’s subsidiaries

Other

44,331

11,839

3,009

2,066

541

61,786

(13,417)

(1,170)

(8,190)

(2,328)

(25,105)

55,716

1,610

7,156

72

618

65,172

(8,006)

(621)

(9,622)

(3,089)

(21,338)

12.31.12 12.31.11

104

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

At December 31, 2012 and 2011 the deferred tax balance

is originated by the following items:

deferred income tax assets

Tax-loss carry-forwards

Provisions

Deferred costs/Construction contracts

Advances from clients

Different criterion used to assess the tax result of the J.V. Techint

Cía. Técnica Internacional S.A.C.I. - Impregilo S.p.A. (Suc. Argentina) - Iglys S.A.

PP&E

Other

subtotal

deferred income tax Liabilities

Committed investment FEPSA

PP&E

Deferred income/Construction contracts

PP&E revaluation

Inventories

Different criterion used to assess the tax result of the J.V. Techint

Cía. Técnica Internacional S.A.C.I. - Impregilo S.p.A. (Suc. Argentina) - Iglys S.A.

Other

subtotal

net deferred income tax assets

37,647

53,421

1,990

252

–

51

244

93,605

13,332

2,348

25,975

9,552

2,413

287

3,017

56,924

36,681

46,889

48,135

1,042

279

2,369

736

293

99,743

13,142

1,709

14,214

20,008

2,264

–

4,572

55,909

43,834

12.31.12 12.31.11

105

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

The evolution of net deferred income tax asset / (liability)

during the year is as follows:

The amounts shown in the consolidated statement

of financial position include the following:

Deferred tax assets to be recovered within 12 months

Deferred tax assets to be recovered after more than 12 months

Deferred tax liabilities to be recovered within 12 months

Deferred tax liabilities to be recovered after more than 12 months

net deferred income tax assets

Beginning of the year

Translation differences

Other movements

Income statement (charge) / credit

end of the year

31,331

62,274

(29,895)

(27,029)

36,681

43,834

(3,710)

(691)

(2,752)

36,681

24,554

75,189

(19,225)

(36,684)

43,834

33,020

(7,337)

–

18,151

43,834

12.31.12

12.31.12

12.31.11

12.31.11

106

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

The evolution of deferred income tax assets and liabilities

during the year is as follows:

Beginning of the year

Translation differences

Other movements

Income statement (charge)/credit

end of the year

Beginning of the year

Translation differences

Other movements

Income statement charge/(credit)

end of the year

1,308

(36)

–

(725)

547

6,281

(442)

–

(187)

5,652

99,743

(7,825)

(645)

2,332

93,605

55,909

(4,115)

46

5,084

56,924

1,042

226

–

722

1,990

20,008

(1,113)

46

(9,389)

9,552

2,369

(157)

–

(2,212)

–

2,264

(168)

–

317

2,413

48,135

(4,386)

–

9,672

53,421

14,214

(631)

–

12,392

25,975

46,889

(3,472)

(645)

(5,125)

37,647

13,142

(1,761)

–

1,951

13,332

tax-Loss carrY-forwards

coMMited investMent

fepsa

deferred tax assets

deferred tax LiabiLities

provisions

deferred incoMe/construction

contracts

deferred costs/construction

contracts

pp&e revaLuation

different criterion used

to assess the tax resuLt of

the Jv techint-iMpreGiLo-iGLYs

inventories

others

others

totaL

totaL

107

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

The evolution of deferred income tax assets and liabilities

during the previous year is as follows:

Beginning of the year

Translation differences

Income statement (charge)/credit

end of the year

Beginning of the year

Translation differences

Income statement charge/(credit)

end of the year

1,843

(517)

(18)

1,308

4,494

110

1,677

6,281

98,199

(9,255)

10,799

99,743

65,179

(1,918)

(7,352)

55,909

1,891

(68)

(781)

1,042

28,030

(1,545)

(6,477)

20,008

1,075

(136)

1,430

2,369

2,579

299

(614)

2,264

31,721

(3,527)

19,941

48,135

17,697

229

(3,712)

14,214

61,669

(5,007)

(9,773)

46,889

12,379

(1,011)

1,774

13,142

tax-Loss carrY-forwards

coMMited investMent

fepsa

deferred tax assets

deferred tax LiabiLities

provisions

deferred incoMe/construction

contracts

deferred costs/construction

contracts

pp&e revaLuation

different criterion used

to assess the tax resuLt of

the Jv techint-iMpreGiLo-iGLYs

inventories

others

others

totaL

totaL

108

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

The tax loss carry-forwards mature as detailed below:

year 2012

year 2013

year 2014

year 2015

year 2016

year 2017

year 2018

year 2019

year 2020

year 2021

year 2022

Without maturity

–

–

–

649

2,794

24,807

12,892

8,134

4,953

2,824

1,612

82,374

141,039

34

75

111

1,493

3,547

1,646

16,551

20,972

10,001

899

–

110,385

165,714

The recoverable value of deferred tax assets depends on

the existence of future income subject to income tax,

sufficient to be used before their legal prescription. In this

regard, Management estimates that TEI&C’s subsidiaries

will generate sufficient taxable income in future periods so

as to offset the net balance of deferred income tax assets

recorded at December 31, 2012.

12.31.12 12.31.11Year

109

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 16.

trade and otHer payaBLes

non-current

Social security contributions (1)

total non-current trade and other payables

current

Trade payables

Social security contributions (2)

Amounts due to related parties

Other payables

total current trade and other payables

48,370

48,370

213,531

96,280

2,059

1,448

313,318

40,869

40,869

161,401

68,868

2,497

2,895

235,661

The maturity of trade and other payables is as follows:

12.31.12 12.31.11

over 4 Years

3 - 4 Years

2 - 3 Years

1 - 2 Years

1 Year or Less

december 31, 2012

Trade and other payables

total trade and other payables

at december 31, 2011

Trade and other payables

total trade and other payables

325

325

–

–

9,628

9,628

5,608

5,608

1,627

1,627

3,136

3,136

313,318

313,318

235,661

235,661

31,165

31,165

21,149

21,149

5,625

5,625

10,976

10,976

without due date

24

notes

(1) it includes employee benefits usd 33,051 (at december 31, 2011 usd 28,500).

(2) at december 31, 2012 it includes employee benefits usd 1,515.

110

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 17.

otHer LiaBiLities

non-current

Provisions

Advances received on construction contracts

Amounts due to related parties

Other liabilities

total non-current other liabilities

current

Provisions

Advances received on construction contracts

Advances received on construction contracts from related parties

Amounts due to related parties

Other liabilities and provisions

total current other liabilities

53,487

43,787

1,851

31,190

130,315

5,812

65,544

311

1,372

16,778

89,817

54,188

990

1,852

43,734

100,764

8,707

43,798

197

1,085

20,358

74,145

12.31.12 12.31.11

18

24

18

24

24

notes

The maturity of other liabilities is as follows:

over 4 Years

3 - 4 Years

2 - 3 Years

1 - 2 Years

1 Year or Less

december 31, 2012

Other liabilities

total other liabilities

at december 31, 2011

Other liabilities

total other liabilities

11,381

11,381

5,919

5,919

12,893

12,893

24,541

24,541

69,137

69,137

34,959

34,959

89,817

89,817

74,145

74,145

8,724

8,724

8,196

8,196

28,180

28,180

27,149

27,149

without due date

111

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201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 18.

provisions

The evolution of provisions during the year is as follows:

non-current

Beginning of the year

Translation differences

Reversal

Additions

Used

end of the year

current

Beginning of the year

Translation differences

Reversal

Additions

Used

end of the year

7,297

(879)

(988)

1,967

(248)

7,149

452

–

–

44

–

496

184

(15)

(842)

764

–

91

3,446

–

–

–

(1,876)

1,570

6,430

(610)

(1,788)

735

(160)

4,607

3,730

(91)

(1,189)

367

(283)

2,534

31,792

(2,819)

(1,513)

5,540

(103)

32,897

–

–

–

–

–

–

8,485

(227)

(425)

2,882

(1,972)

8,743

1,079

140

–

18

(25)

1,212

54,188

(4,550)

(5,556)

11,888

(2,483)

53,487

8,707

49

(1,189)

429

(2,184)

5,812

civiLstaXesLabor LegaL fees (*) other totaL

12.31.12

112

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

non-current

Beginning of the year

Translation differences

Reversal

Additions

Used

end of the year

current

Beginning of the year

Translation differences

Reversal

Additions

Used (a)

end of the year

6,353

(684)

(1,571)

3,558

(359)

7,297

610

(9)

(149)

–

–

452

966

(50)

(1,216)

484

–

184

3,596

–

–

–

(150)

3,446

7,253

(753)

(268)

229

(31)

6,430

3,561

(76)

–

245

–

3,730

–

(5,750)

–

37,542

–

31,792

–

–

–

–

–

–

9,224

(197)

(932)

2,340

(1,950)

8,485

7,181

2

–

910

(7,014)

1,079

23,796

(7,434)

(3,987)

44,153

(2,340)

54,188

14,948

(83)

(149)

1,155

(7,164)

8,707

(a) on february 16, 2011, tenCo and the minority shareholder of the company in saudi techint ltd. executed a settlement agreement whereby tenCo agrees to pay the sum of usd 7 million, thus settling the disputes for the complaint for damages and claim filed by such minority shareholder before the 15th Commercial tribunal of the board of grievances of saudi arabia.

(*) see note 23.

civiLstaXesLabor LegaL fees (*) other totaL

12.31.11

113

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2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 19.

eMpLoyee Benefits

non-funded defined Benefits

and otHer Long-terM Benefits

The amounts recognized in the consolidated statement

financial position are determined as follows:

The amounts recognized in the consolidated income statement are as follows:

Present value of unfunded obligations

Costs for services rendered in the past not recorded

Unrecognized actuarial losses

Liability in the consolidated statement financial position

Current service cost

Interest cost

net actuarial (gains) losses recognized in the year

Amortization of costs for services rendered in the past not recorded

total included in Labor costs

39,039

(1,044)

(3,429)

34,566

3,834

6,161

3,574

332

13,901

38,689

(1,064)

(9,125)

28,500

3,298

5,334

2,167

328

11,127

12.31.12 12.31.11

12.31.12 12.31.11

114

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

Beginning of the year

Translation differences

Transfers and new participants of the plan

Total expense

Contributions paid

end of the year

28,500

(2,790)

(83)

13,901

(4,962)

34,566

22,173

(1,904)

(105)

11,127

(2,791)

28,500

The amounts and movements in the liabilities recognized in

the consolidated statement financial position are determined

as follows:

At December 31, 2012 and 2011, the main actuarial premises

used for calculation of such plans contemplate a discount

average rate of 7% and of 6% (real) and a salary increase

rate of 2% and 3%, respectively. The actuarial premises

used in TEMEX for calculation of such plans contemplate

a discount rate of 6.50% (real) at December 31, 2012 and

7.30% (real) at December 31, 2011 and a salary increase rate

of 4.54% and 5.91% respectively.

contriBution pLans

During the year ended December 31, 2012 TEBRA contributed

USD 1,055 to the defined contribution plans (at December 31,

2011 USD 1,842).

12.31.12 12.31.11

115

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2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 20.

participation in Joint ventures

The Company’s subsidiaries were part of different J.V.s

which also performs engineering, procurement and

construction activities. The Company’s participation

in those J.V.s was recorded through proportional

consolidation of assets, liabilities and results. The

following balances represent the J.V.s assets and

liabilities at December 31, 2012 and 2011:

Constructora norberto Odebrecht S.A. - Odebrecht Argentina

S.A. - Techint Cía. Técnica Internacional S.A.C.e I. - Unión

Transitoria de Empresas - Proyecto: Potasio Río Colorado (1)

Techint Cía. Técnica Internacional S.A.C.e I. - Dycasa S.A. - Unión

Transitoria de Empresas - Proyecto: Ampliación Subte H (1)

Techint Cía. Técnica Internacional S.A.C.I. - Panedile Argen-

tina S.A. - Unión Transitoria de Empresas - Complejos "los

Caracoles" and "Punta negra" (1)

Techint Cía. Técnica Internacional S.A.C.I. - Impregilo S.p.A.

(Sucursal Argentina)- Iglys S.A. - Unión Transitoria

de Empresas - Complejo Penitenciario Ezeiza (1)

Techint Cía. Técnica Internacional S.A.C.e I. - FlUOR Inc. -

Unión Transitoria de Empresas - Proyecto: Pascua lama (1)

ABB lummus Techint Trinidad Joint Venture - Gasoline Opti-

mization Program Upgrade - Petroleum Company of Trinidad

and Tobago limited - Construction Management Services (1)

Consórcio Techint Confab UMSA - lot I Tanks Refinaria

do nordeste, Abreu e lima (RnEST) (2)

Consórcio Andrade Gutierrez - Techint (AG-TECH) Diesel

Unit of landulpho Alves - Mataripe Refinery (RlAM) (2)

27,246

62,082

49,520

13,024

55,236

3,035

7,641

20,982

40.00%

60.00%

75.00%

65.00%

50.00%

50.00%

41.00%

50.00%

77,333

56,364

27,481

2,279

65,482

11

14,444

6,304

133,415

62,349

47,249

46,123

116,818

2,975

2,010

1,796

16,360

61,387

40,388

1,385

31,824

37

15,354

15,212

40.00%

60.00%

75.00%

65.00%

50.00%

50.00%

41.00%

50.00%

12.31.12

totaL J.v.’s LiabiLities

totaL J.v.’s assets

% of ownership

totaL J.v.'s LiabiLities

% of ownership

totaL J.v.'s assets

Main Joint ventures

12.31.11

116

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

13,512

52,954

15,074

2,654

1,454

5,946

116,490

74

–

3,788

Main Joint ventures (cont’d.)

(1) Controlling interest through tearg.(2) Controlling interest through tebra.(3) Controlling interest through tenCo.(4) Controlling interest through temex.

50.00%

50.00%

50.00%

50.00%

50.00%

Tamburí Comércio de Máquinas e Serviços de Engenharia

ltda. (Tamburí) (2)

Consórcio Andrade Gutierrez - Techint (TE-AG) (2)

ABB lummus Techint Bahamas Joint Venture - Gasoline

Optimization Program Upgrade - Petroleum Company of

Trinidad and Tobago limited - Engineering, Procurement

and Management Services (3)

Techint / Somerville - Clipper Project (4)

Techint / Black & Veatch - lnG Costa Azul Project (4)

1,992

62,834

14,976

248

1,342

394

60,750

3

–

6,694

50.00%

50.00%

50.00%

50.00%

50.00%

12.31.12

totaL J.v.’s LiabiLities

totaL J.v.’s assets

% of ownership

totaL J.v.'s LiabiLities

% of ownership

totaL J.v.'s assets

12.31.11

117

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201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

The following balances represent the J.V.s results

at December 31, 2012 and December 31, 2011:

Constructora norberto Odebrecht S.A. - Odebrecht Argentina S.A. -

Techint Cía. Técnica Internacional S.A.C.e I. - Unión Transitoria de

Empresas - Proyecto: Potasio Río Colorado (1)

Techint Cía. Técnica Internacional S.A.C.e I. - Dycasa S.A. -

Unión Transitoria de Empresas - Proyecto: Ampliación Subte H (1)

Techint Cía. Técnica Internacional S.A.C.I. - Panedile Argentina

S.A. - Unión Transitoria de Empresas - Complejos "los Caracoles"

and "Punta negra” (1)

Techint Cía. Técnica Internacional S.A.C.I. - Impregilo S.p.A

(Sucursal Argentina) - Iglys S.A. - Unión Transitoria de Empresas

- Complejo Penitenciario Ezeiza (1)

Techint Cía. Técnica Internacional S.A.C.e I. - FlUOR Inc.

- Unión Transitoria de Empresas - Proyecto: Pascua lama (1)

ABB lummus Techint Trinidad Joint Venture - Gasoline

Optimization Program Upgrade - Petroleum Company of Trinidad

and Tobago limited - Construction Management Services (1)

41,816

5,736

12,560

35,897

32,901

(48)

J.v.’s resuLts

40.00%

60.00%

75.00%

65.00%

50.00%

50.00%

% of ownership

20,023

719

10,272

(1,822)

21,299

1,019

J.v.’s resuLts

40.00%

60.00%

75.00%

65.00%

50.00%

50.00%

% of ownership

Main Joint ventures

12.31.12 12.31.11

118

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

J.v.’s resuLts

% of ownership

J.v.’s resuLts

% of ownership

41.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

49,237

79,790

8,466

54,702

272

(6,538)

(1,920)

41.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

38,161

(1,590)

988

123,134

(27)

–

(2,812)

Consórcio Techint Confab UMSA - lot I Tanks Refinaria

do nordeste, Abreu e lima (RnEST) (2)

Consórcio Andrade Gutierrez - Techint (AG-TECH) Diesel Unit

of landulpho Alves - Mataripe Refinery (RlAM) (2)

Tamburí Comércio de Máquinas e Serviços de Engenharia ltda.

(Tamburí) (2)

Consórcio Andrade Gutierrez - Techint (TE-AG) (2)

ABB lummus Techint Bahamas Joint Venture - Gasoline

Optimization Program Upgrade - Petroleum Company

of Trinidad and Tobago limited - Engineering, Procurement

and Management Services (3)

Techint / Somerville - Clipper Project (4)

Techint / Black & Veatch - lnG Costa Azul Project (4)

Main Joint ventures (cont’d.)

12.31.12 12.31.11

(1) Controlling interest through tearg.(2) Controlling interest through tebra.(3) Controlling interest through tenCo.(4) Controlling interest through temex.

119

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2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 21.

contingencies and coMMitMents

a. guarantees and Bonds granted

TEI&C and its subsidiaries have entered into a series of

guarantee contracts with third parties through which they

undertake the unconditional and irrevocable obligation

to guarantee the prompt and complete payment and

performance of certain liabilities incurred by related parties.

In addition, certain of the Company’s subsidiaries issued a

number of guarantees to provide for the obligations assumed

in the normal course of business.

As of December 31, 2012 and 2011, TEI&C issued

the following guarantees on behalf of other companies,

as follows:

granted in favor of:

Barrick Explotaciones Arg. S.A.

Siderca S.A.I.C.

Tecgas n.V.

Tecpetrol Internacional S.A.

Tecpetrol Internacional S.l.

ABB lummus Global Overseas Corporation

ABB lummus Global Inc.

JGC Arabia limited

JGC Corporation

Minera Panamá S.A.

Anglo American Sur S.A.

Phoenix Park Gas Processors limited

Pan American Energy S.A.

Transportadora de Gas natural de la Huasteca, S. de R.l. de C.V. (Transcanada)

Energía Occidente de México, S. de R.l. de C.V. (Transcanada)

total

In MIllOn OF USD

23.0

1.9

2.9

5.7

2.0

7.0

9.5

18.3

–

36.0

120.3

4.0

1.4

33.7

12.3

278.0

23.0

1.3

2.9

5.7

2.0

7.0

9.5

18.3

30.1

36.0

114.3

4.0

1.4

129.2

11.9

396.6

12.31.12 12.31.11

(2)

(2)

(1) after the end of the previous fiscal year, this guarantee was returned and replaced by issuing a new guarantee for the amount of usd 33.7 million.

(2) after the end of the fiscal year, these guarantees were returned.

(1)

120

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

b. Works eXecuted under a trust, construction,

and Leasing agreeMent

TEARG, as a member of the J.V. Techint Compañía Técnica

Internacional S.A.C.I. - Impregilo S.p.A. (Sucursal Argentina) - Iglys

S.A., has signed a contract with the Argentine Government for

the construction of a penitentiary institution, under the turnkey

system, located in Ezeiza, province of Buenos Aires, payable in

60 quarterly installments as canon, nominated in USD.

The J.V. accepted the pesification of canons at an ARS 1-USD

1 rate and the application of the Reference Stabilization Index

(RSI) until the effective date of payment, according to the

Agreements executed by the J.V. with the Ministry of Justice

and Human Rights, dated November 19, 2003 and September

9, 2004. The canons collected plus RSI after the Agreement

dated September 9, 2004, were Nos. 17, 18, 19, 20, 21 and

22. On the other hand, before execution of such Agreement,

canon No. 8 was also collected plus RSI in January 2003.

That notwithstanding, the J.V. received from such Ministry

payments for several canons not applying the RSI, which

have been taken by the J.V. as partial payments of the total

amount due and payable arising from the Agreement dated

September 9, 2004.

In addition, after the end of the fiscal year, TEI&C issued the

following guarantees and bonds in favor of other companies:

Thus, from January 2006 to the date of issue of these

consolidated financial statements, the J.V. received

as partial payment a total amount of USD 43,474(1)

corresponding to canons 10 to 16 and 23 to 53 at an ARS

1-USD 1 rate, not applying the RSI. Taking into account this

situation, the J.V.’s Management made a new estimate of

the date of probable collection of the RSI past due and to

become due.

Taking into account the Ministry of Justice’s delay as to

a resolution and payment of the overdue debt, Santander

Río Trust S.A., in its capacity as Trustee and Grantor of

the Leasing, on July 4, 2008, following the J.V.’s express

instructions, submitted a note demanding payment of

amounts due. Upon failure to answer by the Ministry of

Justice, on November 28, 2008, an Arbitration Claim was

filed before the International Court of Arbitration of the

International Chamber of Commerce, for the purpose

of appointing an arbitration tribunal consisting of three

arbitrators and to hold the respondent, the Argentine

Government, liable for payment of the amounts claimed

plus any interest that may be accrued and the new terms

of the debt to expire during the arbitration process. The

arbitration claim was notified to the Argentine Government

granted in favor of:

Gasoductos del Sureste S. de R. l. de C.V.

Transportadora de Gas natural de la Huasteca, S. de R.l. de C.V. (Transcanada)

Petrobras netherlands B.V.

242.3

19.5

172.0

433.8

12.31.12In MIllIOn OF USD

121

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2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

in May 2009, the Arbitral Tribunal was constituted and the

Mission Statement was issued on December 7, 2010.

In May 2009, the J.V. was informed of the passing of

Executive Order No. 541/09, which empowers UNIREN to

renegotiate the Construction, Trust and Leasing Agreement

executed in 1998 in relation to Penitentiary Complex I

(Ezeiza). The J.V. has not consented to the provisions of

such executive order by virtue of the defects thereof. On

June 18, 2009, a letter was submitted through Santander

Río Trust S.A., in its capacity as Trustee and Grantor of

the Leasing, following the J.V.’s express instructions, to

the above-stated respect claiming the unlawful nature of

such executive order. That notwithstanding, and making it

clear that this entails no waiver whatsoever of its rights,

including the right to enforce its rights and defenses in

the ongoing arbitration proceeding, on September 8,

2010, the J.V. executed a Memorandum of Understanding

(MOU) with UNIREN since it believes that under the

terms of such MOU (i) the acknowledgement made in

the Agreement executed with the Ministry of Justice on

September 9, 2004 is ratified, (ii) UNIREN acknowledges

the debt upon failure to apply the RSI and (iii) the J.V.

states its position that as to all the claims and its intention

of suspending the arbitration upon actual payment by the

State of all amounts due.

Following the negotiations with the UNIREN, an Agreement

(Entendimiento Contractual) was executed on November 18,

2011, whereby (i) the MOU dated September 8, 2010, stated

in the preceding paragraph, is ratified and the debt upon

failure to apply the RSI is acknowledged, (ii) the Legal Board

of Juridical Affairs (Dirección Legal de Asuntos Jurídicos) of

the Ministry of Economy and Public Finance concludes that

the application of RSI complies with the provisions under

the applicable legal framework upon the passing of Law

No. 25561 and Executive Order No. 214/2002, (iii) the J.V.

undertakes to suspend the arbitration proceeding for 180

days and to obtain the ratification of such agreement by the

Trustee, (iv) the UNIREN undertakes, upon compliance by the

J.V. with the obligation stated in (iii), to ratify the agreement

within 180 days jointly with the Ministry of Justice and

Human Rights (MINJU) and with the Argentine Executive

Branch (PEN) and (v) upon ratification by the PEN, the MINJU

shall have a 90-day term to cancel the debt, and the J.V.

shall abandon the arbitration proceeding before or after the

administrative act stating the cancellation of the debt is

passed by the MINJU, but before the actual cancellation.

The J.V. had obtained the Trustee’s ratification and had

complied with the staying of the arbitration proceedings for

180 days. Such staying has been extended and the arbitration

proceedings are still suspended waiting for satisfaction of

the administrative formalities agreed under the Agreement

which are currently being conducted, therefore, the

claimants and the defendant are still holding conversations

aimed at speeding up the compliance with the provisions of

the Agreement to cancel the RSI owed and to regularize the

contract for future canons, and in such a case, to abandon

the arbitration proceedings.

As of the date of issue of these consolidated financial

statements, the J.V. was informed that the Agreement

executed on November 18, 2011, is about to be ratified

by the Argentine Executive Branch (PEN), therefore, the

subsidiary Techint Compañía Técnica Internacional S.A.C.I.

resumed the accrual of RSI from January 1, 2009 to

November 30, 2012. At December 31, 2012, the amount

accrued was USD 24,478 and it is included in Financial

Results (see note 28).

Nevertheless, in the event that the provisions of the

Agreement are not satisfied, the arbitration proceedings shall

continue and in the opinion of the J.V.’s Management and of

(1) outstanding collecting amounts are nominated in argentine peso. the figures shown in usd belong to the amounts in argentine pesos which were translated at the year end exchange rate (december 31, 2012: usd 1 – ars 4.918 and december 31, 2011: usd 1 – ars 4.304).

122

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

its legal advisors, it is estimated that, by application of the

legal rules and regulations regarding pesification (application

of RSI to due canons) which should be applicable to this

contractual structure, the J.V. has a solid legal position to

collect its credits within the scope of the abovementioned

legal rules and regulations.

The proportional participation of TEARG in the total balance

receivable of the J.V. with the Argentine Government as of

November 30, 2012 amounts to USD 62,481(1) (at November

30, 2011: USD 48,359(1)).

The amount of such credit recorded in these consolidated

financial statements, which arises from discounting the

amounts mentioned above from their current value on

November 30, 2012, is equal to USD 43,242(1), capital

USD 4,958(1) and RSI USD 38,284(1), (at November 30, 2011:

USD 24,231(1), capital USD 7,610(1) and RSI USD 16,621(1))

of which the amount of USD 30,273(1) is past due at

December 31, 2012 (at December 31, 2011: USD 12,151(1)).

All these financial credits correspond to the canons

receivable from the Argentine Government, due and to

become due, which were recorded as per the Agreement

executed on September 9, 2004 with the Undersecretariat

of Coordination and Innovation under the National Ministry

of Justice and Human Rights, in Pesos at a rate of ARS

1-USD 1 and adjusted with RSI up to November 30, 2012.

c. otHer contingencies and uncertainties

The Company has tax and civil lawsuits for which the legal

advisors do not expect a probable unfavorable outcome

and, therefore, no provision was set up. The amounts of

these contingencies amount as of December 31, 2012 to

USD 6,492 for tax contingencies and USD 7,783 for civil

contingencies (at December 31, 2011: USD 12,808 for tax

contingencies and USD 5,949 for civil contingencies).

note 22.

restricted assets

tenco and suBsidiaries

At December 31, 2012 and 2011, the net carrying amounts

of the PP&E held under finance lease amount to USD 12,483

and USD 9,569 respectively. At December 31, 2012 and

2011, liabilities for finance leases amount to USD 7,435 and

USD 8,689, respectively.

tearg

At December 31, 2012 and 2011, there were PP&E with a

residual book value of USD 2,422 and USD 3,690 respectively,

which were pledged as guarantee for liabilities under pledge

agreements for USD 1,384 and USD 1,902, included in the

account “current and non-current Borrowings“, respectively

(at December 31,2011 USD 923 and USD 3,210 “current and

non-current Borrowings“, respectively).

coincar s.a.

Under the Credit Facility Agreement entered into by Coincar S.A.

with Banco Santander Río S.A. and Banco de Galicia y Buenos

Aires S.A., Coincar S.A. agrees not to sell nor cause to be sold,

assign in ownership and/or use and/or usufruct, mortgage,

pledge, loan and/or loan for use, levy in any manner whatsoever,

lease and/or enter into a leasing, grant a security and/or personal

interest with respect to, not to transfer and/or in any manner

dispose of, either in a transaction or a series of transactions, all or

a substantial portion of any of its assets, goods and/or rights and/

or of its assets, goods and/or rights to be acquired in the future,

nor to distribute dividends, pay fees to the company’s directors

or consultants, without the prior consent of the majority of the

banks that granted the Credit Facility Agreement.

coinfer

Licensed assets:

In conformity with the regulations established in the

123

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

bid specifications and the License Agreement, the

subsidiary FEPSA received from Ferrocarriles Argentinos

assets of its own to be used in the operation (included

in “Property, plant and equipment” non-current). They

primarily comprise infrastructure (main and secondary

railway network), real property (warehouses and

buildings), transportation material (locomotives and

coaches), fixed facilities and other. Upon expiration of

the license, the assets will be returned to Ferrocarriles

Argentinos, at no additional cost, in their normal

condition of maintenance, except for the wear and tear

over time and the normal use.

teBra

At December 31, 2012, the Company had assets with a carrying

amount of USD 524 (at December 31, 2011: USD 716) granted

as guarantee for different legal proceedings.

note 23.

cLaiMs receivaBLes

During the year ended December 31, 2011 TEBRA

recognized a gain for damages based on a final and

irrevocable court decision issued on April 4, 2011 by

the Superior Court of Justice ("STJ") related to the

Civil Construction Contract entered into in October 1,

1991 with the Ministry of Education and Sports for the

construction of 200 units of the Integrated Center for Child

Support (CIAC according to its acronym in Portuguese).

The claim was brought by TEBRA claiming reimbursement

losses resulting from the unilateral termination of the

contract by the government on September 30, 1996 when

only 41 CIACs had already been built. TEBRA claimed

damages for all losses incurred, among which, additional

costs incurred in the production of pre-molded concrete

elements and in the support of the work; the costs of

plant implementation, which could not be recovered due

to the contract termination; loss of profits due to the

failure of the essential purpose of the contract; and costs

required for the demobilization of the plant, the building

sites and equipment.

The STJ recognized the right of TEBRA to damages for

all the costs incurred based on an expert report plus

legal interest and monetary adjustment. The report of

the expert was issued on July 27, 1999 with amounts

updated through December 31, 1998 and the decision of

the STJ issued on April 4, 2011 determined the amount

of damages in the amount of R$ 93,283 adjusted through

December 31, 1998 and subsequently monetarily adjusted

according to the criteria defined in such decision. On July

18, 2011, a request for execution was filed by TEBRA,

accompanied by another expert report which adjusted the

amount of the resulting damages according to the criteria

defined in the final and unappealable decision to a total of

R$ 339,263 on June 30, 2011.

In the year ended December 31, 2011, TEBRA recognized

a gain arising from the claim plus monetary restatement

based on the official indexes (INPC/Brazilian Central

Bank) and interest of 1% p.m. established in the report

prepared by the expert, net of lawyers' fees which are

payable upon realization of the credit and the related

tax effects. This amount was estimated based on: (a)

the estimated date for issuance of the certificate of

government's debt by the judicial authority up to June

30, 2012, and (b) the payment by the Federal Government

in up ten equal and annual installments, payable from

December 31, 2013 (the maximum legal payment date

for certificates of government's debt issued up to

June 30, 2012). The resulting amount was discounted

at present value based on DI x TR indices reported by

BM&FBOVESPA.

124

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

The net amount recorded in income for the year ended

December 31, 2011 is as follows:

details:

Claim restated up to the date of recognition by the final and irrevocable court decision

Restatement for the period between the final and irrevocable court decision

and December 31, 2011 (InPC)

Interest for the period between the final and irrevocable court decision

and December 31, 2011 (1% p.m.)

Total amount at December 31, 2011

Adjustment to present value

Total adjusted to present value at December 31, 2011

Provision for legal fees - 20%

Amount recognized as "Gain from claims, net" in Other operating results

339,263

3,359

13,412

356,034

(57,855)

298,179

(59,636)

238,543

187,711

(37,542)

150,169

aMounts in r$ thousand

aMounts in usd thousand (*)

2.d

30

notes

(*) the amount of the net gain has been translated at the average exchange rate of april 2011 the month on which the final unappealable decision was issued. the receivable as of december 31, 2011 translated at the year-end exchange rate amounts to usd 158,961 (see note 8) and the related provision for legal fees amounts to usd 31,792 (see note 18).

On October 25, 2011, having been duly served with

process, the Government filed a motion to stay execution,

questioning, among other matters, the computation

criteria. The motion to stay was judged by the courts

on October 19, 2012. TEBRA believes that the decision of

the first level judge to change the date when the monetary

restatement should start to be computed in six months

is wrong. TEBRA conservatively reduced the amount

of the indemnity receivable in the amount of R$ 14,906

reflecting the court decision.

On September 6, 2012 the Federal Government presented to

the Superior Tribunal de Justiça ("STJ") a motion to set aside

judgment (ação rescisória), a request to overturn or set aside

the final unappelable ruling on the case. Under Brazilian law

motion to set aside already issued final and unappelable

judgments are only applicable in nine very narrow

circumstances. In the view of management supported by

the opinion of its counsel the probability of the Federal

Government motion being successful is very remote.

At December 31, 2012 the amount of the receivable was

computed assuming that: (a) the estimated date for issuance

of the certificate of government's debt by the judicial

authority up to June 30, 2013 which represents the current

best estimate of the issuance, and (b) the payment by the

Federal Government in up ten equal and annual installments,

payable from December 31, 2014 (the maximum legal

payment date for certificates of government's debt issued

up to June 30, 2012). The resulting amount was discounted

at present value based on DI x TR indices reported by

BM&FBOVESPA.

125

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

The changes in the amounts recorded in the claims

receivable and in the related provision for legal fees are

presented below:

Beginning of the year

Translation effect

Reduction or receivable as result of court decision on October 19, 2012

Increase in the receivable due to application of inflation index (InPC)

and interest (1% p.m.) established in the final court decision

Unwinding of present value adjustment

legal fees paid

end of the year

Amount recognized as "Financial results"

158,961

(14,090)

(7,564)

19,659

8,039

165,005

20,134

(31,792)

2,819

1,513

(3,932)

(1,608)

103

(32,897)

(4,027)

cLaiM provision for LeGaL fees

126

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 24.

reLated party transactions

TEI&C is controlled by Techint Investments N.V., which

owns 100% of the company’s shares. The parent

company is San Faustin S.A., a corporation based in

Luxembourg. San Faustin S.A. owned the company

trough subsidiaries.

Rocca & Partners Stichting Administratiekantoor Aandelen San

Faustin, a Dutch private foundation (Stichting) (“RP STAK”) held

shares in San Faustin sufficient in number to control San Faustin.

No person or group of persons controlled RP STAK.

non-current assets

Other investments in other related parties

Trade receivables from other related parties

Other receivables

norpower S.A. de C.V.

Other receivables from associated parties

Other receivables from other related parties

current assets

Trade receivables

Consorcio Techint Degremont ltda. - Chile

Fluor Techint S.R.l. Construcción y Servicios limitada - Chile

Consorcio Constructor Techint Besalco ltda.

Trade receivables from associated parties

Trade receivables from other related parties

Other receivables

norpower S.A. de C.V.

Others

Other receivables from associated parties

Other receivables from other related parties

Cash and cash equivalents

Short-term deposits in related parties

8,946

43

3,200

3,200

6,456

1,144

35

1,444

2,623

89,564

–

33

33

5,932

45,243

8,456

56

–

–

7,780

–

798

2,232

3,030

52,023

3,246

27

3,273

3,789

28,065

12.31.12 12.31.11

7

8

8

8

8

8

8

8

12

notes

year-end BaLance WitH reLated parties otHers

tHan tHe parent coMpany

127

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2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

non-current liabilities

Other liabilities

Caminos del Oeste S.A.

Other liabilities due to subsidiaries

Other liabilities due to other related parties

current liabilities

Borrowings

Caminos del Oeste S.A.

Borrowings from subsidiaries

Borrowings from other related parties

Trade and other payables due to other related parties

Advances received on construction contracts from other related parties

Other liabilities due to other related parties

684

684

1,167

1,190

1,190

14,361

2,059

311

1,372

931

931

921

1,337

1,337

–

2,497

197

1,085

17

17

14

14

16

17

17

12.31.12 notes 12.31.11

128

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

Sales of goods and services

Purchases of goods and services

355,202

3,650

249,528

2,104

12.31.12 12.31.11

transactions WitH otHer reLated coMpanies

Transactions with associated companies

Sales of goods and services

norpower S.A de C.V.

Consorcio Techint Degremont ltda. - Chile

Fluor Techint S.R.l. Construcción y Servicios limitada - Chile

Consorcio Constructor Techint Besalco ltda.

236

1,718

36

5,044

7,034

–

–

2,174

1,441

3,615

12.31.12 12.31.11

transactions WitH reLated parties otHers

tHan tHe parent coMpany

The aggregate compensation of the directors and executive

officers earned during the annual year ended December 31,

2012 and December 31, 2011 amounts to USD 19,425 and

USD 16,852 respectively.

129

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 25.

suBsidiaries

Avemir S.A.

B.V. de nieuwe Weg

BVT lnG Costa Azul, S. de R.l. de C.V.

Caminos del Oeste S.A.

Carbonser, S.A. de C.V.

Carbontec, S.A. de C.V.

Cimimontubi S.A.

Coincar S.A.

Compañía Interamericana de Trabajos Civiles Comintrac S.A.

Compañía Inversora Ferroviaria S.A.I.F.

Constructora Mexicana Electromecánica y de Instrumentación, S.A. de C.V.

Cotecol Compañía Técnica de Construcciones S.A.

Construcciones y Prestaciones Petroleras S.A. (CPP)

Elina 406, S.A. de C.V.

Elina lT, S.A. de C.V.

Energía Tamaulipas S.A. de C.V.

Ferroexpreso Pampeano S.A.C.

Flinwok S.A.

Mexcarbón, S.A. de C.V.

nitroelina, S.A. de C.V.

norgas S.A.

Preglosid S.l.U.

Prestaciones Globales Siderúrgicas S.A.I.F.

Saudi Techint ltd.

Servicios Siderúrgicos Sersisa, S.A.

SICI - Servicios de Ingeniería y Construcciones Industriales S.A. de C.V.

Sidernet S.A.

Sidernet de Venezuela C.A.

Sidernet Mexicana S.A. de C.V.

Socominter Sociedade Comercial Internacional ltda.

Tanks Technologies, S.A. de C.V.

Techint Engenharia e Construção Offshore ltda.

100.00%

100.00%

50.00%

(1)

50.00%

50.00%

100.00%

65.00%

100.00%

77.14%

100.00%

99.86%

–

51.00%

100.00%

100.00%

(4)

100.00%

50.00%

70.00%

50.00%

100.00%

100.00%

(6)

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

51.00%

100.00%

Venezuela

netherlands

Mexico

Argentina

Mexico

Mexico

Venezuela

Argentina

Ecuador

Argentina

Mexico

Colombia

Ecuador

Mexico

Mexico

Mexico

Argentina

Uruguay

Mexico

Mexico

Argentina

Spain

Argentina

Saudi Arabia

Venezuela

Mexico

Argentina

Venezuela

Mexico

Brazil

Mexico

Brazil

(5)

100.00%

50.00%

(1)

50.00%

50.00%

(5)

65.00%

100.00%

77.14%

100.00%

99.86%

100.00%

51.00%

(3)

100.00%

(4)

100.00%

50.00%

70.00%

50.00%

100.00%

100.00%

–

(5)

100.00%

100.00%

100.00%

100.00%

100.00%

51.00%

100.00%

12.31.12 (*)

% of oWnership12.31.11 (*)

% of oWnershipcountrYcoMpanY

(7)

(2)

(2)

(7)

(2)

(7)

(7)

(5)

(2)

(2)

(5)

(2)

(5)

(5)

130

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

Techint Chile S.A.

Techint Compañía Técnica Internacional S.A.C.I.

Techint Compañía Técnica Internacional S.A.C.I.

Techint Compañía Técnica Internacional S.A.

Techint Construction limited

Techint E&C, S.A. de C.V.

Techint Engenharia e Construção S/A.

Techint E&C, Inc.

Techint International Construction Corp. (TEnCO)

Techint Ingeniería y Construcción Bolivia S.A.

Techint Ingeniería y Construcciones, S.l.U.

Techint Inversiones S.A.I.F.

Techint nigeria limited

Techint S.A.C.

Techint, S.A.

Techint, S.A. de C.V.

Techint, S.A. de C.V.

Techint, S.A.

Techint, S.A.

Techint Servicios, S.A. de C.V.

Tecnomatter Instalaciones y Construcciones S.A.I.F.

Tecnopower S.A de C.V.

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

Chile

Argentina

Uruguay

Venezuela

Canada

El Salvador

Brazil

Canada

Bahamas

Bolivia

Spain

Argentina

nigeria

Peru

Guatemala

Honduras

Mexico

nicaragua

Panamá

Mexico

Argentina

Mexico

12.31.12 (*)

% of oWnership12.31.11 (*)

% of oWnershipcountrYcoMpanY

(*) direct and indirect participating interests are included.

(1) at december 31, 2012 and 2011 the Company decided to include its proportional shareholders’ equity in the liabilities since the subsidiary has a negative shareholders’ equity.

(2) temex has the power to govern the financial and operating policies of the entity.(3) during the current or previous fiscal year, these companies were wound-up.(4) Controlling interest through Compañía inversora ferroviaria s.a.i.f.(5) see note 1.(6) on february 2011, the subsidiary tenCo executed the sale and purchase agreement with a

related company. all the quotas of sauteC (60%) were transferred to such company.(7) Company in process of merger.

131

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201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

12.31.12

current

Cash-flow hedge

total derivative financial instruments - current

non-current

Cash-flow hedge

total derivative financial instruments - non-current

current

Cash-flow hedge

total derivative financial instruments - current

194

194

–

–

–

–

5

5

17

17

2,371

2,371

assets LiabiLities

note 26.

derivative financiaL instruMents

There was no ineffectiveness to be recorded from net

investment in foreign entity hedges.

forWard foreign eXcHange contracts

The notional principal amounts of the outstanding forward

foreign exchange contracts at 31 December 2012 and 2011

were USD 14,676 and USD 16,781, respectively.

12.31.11

assets LiabiLities

132

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 27.

cost of revenue and eXpenses By nature

labor costs

Taxes, rates and contributions

Fees and technical advice

Sub-contract for services

Purchases of material and supplies

PP&E depreciation

Intangible assets amortization

Work structure expenses

Office structure expenses

Participation in J.V. balances

Unallocated costs

total december 31, 2012

total december 31, 2011

716,696

28,259

46,340

236,183

244,074

45,868

1,125

34,925

56,756

80,673

79,893

–

1,570,792

6,958

2,180

136

3,701

16

–

–

–

124

–

673

13,788

16,692

641,732

15,369

32,397

169,412

294,706

44,526

1,325

24,795

38,783

290,190

43,334

1,596,569

1,389,272

86,466

14,113

17,914

4,339

489

5,153

576

3,345

5,336

–

14,788

152,519

164,828

735,156

31,662

50,447

177,452

295,211

49,679

1,901

28,140

44,243

290,190

58,795

1,762,876

seLLinG expenses

cost of revenue

GeneraL and adMinistrative

expenses

4

5

notes 12.31.12 12.31.11

133

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2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

note 28.

financiaL resuLts

income

Interests and indexation

net foreign exchange transaction results

Results from Techint Cía. Técnica Internacional S.A.C.I. - Impregilo S.p.A. (Suc. Argentina) -

Iglys S.A. - Unión Transitoria de Empresas – Complejo Penitenciario Ezeiza

Restatement and interest on claims

Holding results

Other

costs

Interests and indexation

net foreign exchange transaction results

Results from Techint Cía. Técnica Internacional S.A.C.I. - Impregilo S.p.A. (Suc. Argentina) -

Iglys S.A. - Unión Transitoria de Empresas – Complejo Penitenciario Ezeiza

Holding results

Comissions

Other

6,386

–

23,440

16,107

6,012

1,133

53,078

(6,340)

(6,147)

–

–

(618)

(260)

(13,365)

6,636

12,972

–

–

2,180

(54)

21,734

(2,634)

–

(1,025)

(205)

(913)

(97)

(4,874)

12.31.12 12.31.11

21.b

21.b

notes

134

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 29.

otHer operating resuLts

Gain from claims, net

Gain / (loss) from the sale of PP&E

Impairment loss

net result for provisions for legal claims and contingencies

Other

–

13,836

(819)

(681)

1,905

14,241

150,169

(6,781)

–

(951)

2,245

144,682

note 30.

incoMe taX

Current income tax

Deferred income tax

(33,050)

(2,752)

(35,802)

(31,213)

18,151

(13,062)

12.31.12

12.31.12

12.31.11

12.31.11

notes

notes

23

15

135

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2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

224,471

(77,242)

1,304

(629)

(1,827)

(9,889)

63,822

(4,202)

9,894

705

(181)

3,044

401

1,738

(13,062)

The net difference between the tax calculated at the rate

in effect in each country and the total charge for the year

is generated by the following:

income before income tax

tax calculated at the applicable rate on the result for the year

Effect of restatement in constant currency

Result due to participating interests in subsidiaries and related companies

Dividends earned

Provisions for deferred tax assets

Gain from claims

Revenue and cost provisions, net

Tax loss carry - forwards

Gain (loss) in the income statement, net of taxable effect in derivative financial instruments

PP&E

Tax-deductible interest on own capital

non-deductible expenses

Other, net

income tax

179,246

(58,905)

1,171

(58)

(1,558)

4,589

6,846

(6,511)

6,737

(765)

4,789

6,081

268

1,514

(35,802)

12.31.12 12.31.11

136

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 31.

Main contracts in progress

argentina

Punta negra Hydroelectric Power Station

Gas Oil Hydrotreatment at la Plata Industrial Complex (HTG at CIlP)

Potasio Río Colorado

Subway line H Expansion

Pascua lama Phase III

Bolivia

Margarita Project

peru

loops del Sur - Preliminary Works

Camisea Pipeline Maintenance

Camisea Well Head Compression Project EPC 30

Toromocho Project

chile

Construction of Stations and Pipeline for Seawater Supply

Mechanical Maintenance Service

uruguay

Maldonado Sewage System

Puerto Montes del Plata

San Carlos – Melo Electricity Interconnection

514

105

1,037

539

1,449

80

84

168

111

82

148

95

40

144

89

44%

100%

26%

3%

30%

100%

97%

–

24%

30%

0%

92%

93%

52%

12%

19%

72%

1%

1%

0%

72%

78%

–

1%

–

–

68%

75%

26%

1%

456

105

700

430

631

80

72

140

110

–

–

81

39

111

89

physicaL progress

physicaL progress

totaL contract aMount

(usd MiLLion)

totaL contract aMount

(usd MiLLion)

country / work

At December 31, 2012 and 2011, the main contracts

are the following:

(1)

(2)

(3)

(4)

(2)

12.31.12 12.31.11

137

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201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

Brazil

Diesel Unit of landulpho Alves de Mataripe Refinery (RlAM)

lot I Tanks Refinaria do nordeste, Abreu e lima (RnEST)

Retarded Coke Unit - Complexo Petroquímico do Rio de Janeiro

(COMPERJ)

WHP 1 and WHP 2 Platforms

Mexico

norte II CCC Power Project

Tuxpan Compressor Station

Ethane Pipeline Project

Tamazunchale Facilities

central america & caribbean

Siepac Substations

Siepac I

Siepac II

602

282

1,018

734

333

24

242

67

42

145

45

100%

100%

72%

8%

99%

99%

3%

9%

100%

100%

100%

95%

88%

40%

4%

37%

24%

–

–

99%

98%

98%

875

221

1,130

1,061

333

24

–

–

42

145

45

(4)

(3)

(4)

(5)

physicaL progress

physicaL progress

totaL contract aMount

(usd MiLLion)

totaL contract aMount

(usd MiLLion)

country / work

12.31.12 12.31.11

(1) the Company's participation is 75%(2) the Company's participation is 40%(3) the Company's participation is 60%(4) the Company's participation is 50%(5) the Company's participation is 19%

138

TE

I&C

S.A

.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAll AmounTS ArE Shown In uSD ThouSAnDS, unlESS oThErwISE STATED.

note 32.

suBseQuent events

On February 22, 2013, the Company’s Board of Directors

provided for the payment of a dividend in cash for the sum

of USD 35,000, to be paid on such date to its controlling

shareholder, Techint Investments N.V.

As a result of a new arrangement of shareholdings, on

March 14, 2013, all the shares of the Company were

transferred to a new shareholder denominated PROSAT S.A.

(which company is currently taking the steps for change

of corporate name to “Techint Construcciones Holding

S.A.“), hereinafter “TECHOLD“, a new holding of companies

providing engineering, supplies, construction, operation and

management services. This is a holding company organized

in Uruguay, which shall control engineering and construction

businesses specifically in the American continent.

By virtue of the new business guidelines, TEI&C provided

for a dividend in kind for the sum of USD 349,568 to be paid

to its new shareholder TECHOLD, through which payment

it transferred all the interests of the Spanish subsidiaries

Techint Ingeniería y Construcciones SLU and PREGLOSID

SLU, which companies consolidate the provision of

engineering, construction and service management mainly

of their subsidiaries in Argentina, Ecuador, Canada, Central

America, Netherlands and Mexico.

These dividends in cash and in kind were ratified by the new

shareholder TECHOLD by means of a Special Shareholders’

Meeting held on March 15, 2013; therefore, it ratified the

allocation of accumulated results for the sum of USD 384,568.

139

an

nu

al

re

po

rt

201

2

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSall amounts are shown in usD thousanDs, unless otherwise stateD.

In order to reflect the changes that took place after closing in

the amounts as of December 31, 2012, the allocation of such

amounts is shown below on a comparative and simplified basis:

As a result of these transactions, TEI&C shall focus on

engineering, construction and service management,

especially of its subsidiaries in Brazil, Chile, Colombia, Peru,

and Uruguay.

Except for the situation stated in the previous paragraphs

and in note 21 after December 31, 2012, no other events,

situations or circumstances have occurred which might

significantly affect the Company´s equity or financial position,

which have not been adequately contemplated or mentioned

in these consolidated financial statements.

non-Current Assets

Current Assets

total assets

shareholders’ equity

Attributable to the Company’s Equity holders

Share Capital

legal reserve

Other reserves

Retained Earnings

non-controlling interests

total equity

non-current Liabilities

Current liabilities

total Liabilities

total equity and Liabilities

355,075

460,830

815,905

218,535

30,092

(26,864)

207,263

(17,131)

411,895

141,005

263,005

404,010

815,905

12.31.12 after effect of

Group´s restructure operation

(268,617)

(499,192)

(767,809)

–

–

69,416

(384,568)

(36,591)

(351,743)

(128,127)

(287,939)

(416,066)

(767,809)

effect of Group´s restructure

operation

623,692

960,022

1,583,714

218,535

30,092

(96,280)

591,831

19,460

763,638

269,132

550,944

820,076

1,583,714

12.31.12

140

TE

I&C

S.A

.

tei&c s.a.

Board of directors’ report and consoLidated financiaL stateMents

for tHe year ended deceMBer 31, 2012 and 2011