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December 31, 2008 Altri, S.G.P.S., S.A. (Open capital Company) Rua General Norton de Matos, 68 4050-424 Porto Share Capital: 25.641.459 € Fiscal number: 507172086

ALTRI, S.G.P.S., S.A. (OPEN CAPITAL COMPANY)

Directors’ Report Consolidated Accounts

DIRECTORS’ REPORT

Annual Report ’08 1

INDEX Introduction 2 Macroeconomic background 4

Stock Exchange evolution 7 Group’s activity 11 Financial review 15 2009 outlook 17 Proposal of the Board of Directors for appropriation of the non consolidated net profit for the year 17 Corporate Governance 18 Legal Matters 39 Declaration of responsibility 40 Closing remarks 40

DIRECTORS’ REPORT


To the Shareholders Pursuant to the legal requirements, the Board of Directors of Altri, S.G.P.S., S.A. (Open Capital Company) hereby presents its Director’s Report for the year 2008.

INTRODUCTION Altri was incorporated as of March 2005, as a result of the demerger of Cofina. Altri is a reference European producer of bleached eucalyptus pulp and is a public listed company included in the PSI 20 (Portuguese Stock Index), the benchmark stock market index. In addition to pulp production, the company is also present in electric energy from forest renewable sources, namely industrial cogeneration and biomass. Altri runs around 80 thousand ha of forests in Portugal, fully certificated by Forest Stewardship Council (FSC), one of the world’s most known certification entities. As of June 2008 Altri materialized a reorganization that implied the split of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and warehousing systems sector. Thus, Altri maintains the management of pulp and paper business unit, while the new company created in the demerger process (F. Ramada Investimentos, SGPS, S.A.) stays with the management of the steel and warehousing systems business activity. Altri’s shareholders who had shares until June 18 received one Ramada Investimentos share for each four shares of Altri held. Nowadays, Altri major assets are three pulp production mills, with a capacity higher than 500 thousand tonnes/year of bleached eucalyptus pulp. The company has investment projects ongoing that will increase its production capacity to more than 900 thousand tonnes/year in 2010. Under these investments is to highlight the Celbi’s expansion project that during the second semester of 2009 will double the mill’s capacity to 600 thousand tonnes/year. Altri’s industrial strategy implementation is based on integrated forest management in Portugal. This model is based on forest optimization, ensuring a full recovery of all its components. Thus, the eucalyptus is processed in Altri mills, producing pulp and power (cogeneration). The bark, the branches and forest waste are used to produce electric energy from biomass. The last years were highlighted by various acquisitions that allowed Altri to reinforce its position in its operating markets and by the development of a set of expansion activity projects. During 2008, Altri’s most significant events were: -Strategic focus on forest management and paper pulp: Altri defined the forest management and pulp production as its core business. Therefore, in 2008 FRamada (the steel and warehousing systems company) demerger process took place and CPK unit was finally closed (paper industrial unit integrated into Celtejo). This operation had, as main strategic rational, the exclusive focus on Altri’s core business – forest management and pulp production.

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-In progress projects development: during 2008, Altri started up the new Celtejo’s bleaching line and refreshed Celbi’s pulp production line (project with estimated conclusion in the 2nd semester of 2009). -Forest Stewardship Certification Council (FSC): Altri obtained in 2008 Forest Stewardship Council (FSC) Certification to all forest area under Altri’s management (about 80 thousand ha) and for all its industrial units. Altri’s structure as of 31 December 2008 is as follows:

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MACROECONOMIC BACKGROUD

International background

2008 was a year marked by the interaction of the international financial crisis with the slowdown of overall economic activity. In most developed economies since the end of 2006 that this economic activity slowdown trend appeared, as a result of the strong increase of raw material prices, but this year has been seriously stepped with the impact of financial crisis in economic agents’ confidence. This decrease in economic activity in developed economies combined with financial markets conditions deterioration seriously affected the markets of the emerging economies which were representing a major pillar for global growth in recent years and showing high inflationary pressures. The lower growth rates were recorded in Latin America and Central and Eastern Europe, regions that have various business relations with the U.S. and where there are countries with large deficits of current balance financed by bank capital contributions or by portfolio investment.

According to the International Monetary Fund (IMF) it is estimated that world economy has registered a growth rate of approximately 3.4% which represents a deceleration of about 1.8 pp compared to 2007, with the worsening financial crisis in Autumn on the basis of this slowdown.

During last year there was a severe financial turbulence that put into question the banking systems. This resulted in tightened credit conditions worldwide, rapid confidence deterioration in business and consumers, and finally, a sharp decline in major stock exchanges.

Another disruption in economic activity was the world oil and food price behavior. The oil price was much influenced by the high demand from emerging economies and the reduced supply resulting from low levels of stocks and overcapacity. Food price was mainly affected by adverse weather conditions and some trade restrictions by some exporting countries.

Global economy has also been very affected by the turbulence in international financial markets that were characterized by a high-revaluation of risk and decreased liquidity in the markets for wholesale debt and interbank money markets in major developed economies.

At EU level the most striking feature was the rapid economic slowdown. The impact of financial crisis on the real economy exacerbated at the end of the year when the Euro Area knew its first technique recession. Domestic demand slowed due to the slowdown of investment and private consumption.

Regarding European Central Bank (ECB) monetary policy, in the first half of 2008 there was a restrictive trend (in July the interest rate reached the reference level of 4.25%) in order to halt the inflationary trend caused by escalating oil and food prices. However, the acute of financial crisis eliminated the inflationary concerns and since October 2008 the ECB reversed its monetary policy to an expansionary one, successively cutting the

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reference interest rate at the end of 2008 and beginning of 2009, which in March of 2009 reached its historical minimum of 1.50%.

At exchange level, the 2007 trends have been reversed, since there were losses of Euro against Dollar and Yen.

National Background

During the year 2008, Portugal faced a slowdown in its economy, interrupting the values of recovery of homologous previous two years. The Portuguese Gross Domestic Product growth about 0.3% during 2008 representing the record of the lowest growth among euro area countries and the European Union. This evolution occurs in a context of interactions between a serious crisis in international financial markets and a sharp global economic downturn. This way, Portugal recorded a growth of gross domestic product close to zero percent, escaping from recession.

Portuguese economy showed an increase in the external deficit, as a result of the slowdown in external demand and rising energy and raw material prices. Furthermore, the saving rate, at institutional and private level, showed again a decline to address these difficulties.

The inflation rate, measured by the annual average of the Harmonized Index of Consumer Prices, set up in 2.6%, reflecting mainly the price evolution of energy goods.

As a result of an open and fully integrated economy, as the Portuguese one, the propagation of disturbances in the financial system and the slowdown of world economic activity had adverse implications. On one hand, due to the high uncertainty concerning financial market stabilization, led to delays in decisions on consumption and investment, on the other hand the turbulence in money and wholesale founding markets led to the rise in interest rates of bank credit and contributed to greater restriction of financing conditions of non-financial private sector.

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Future prospects

The last months of 2008 saw a period of greater instability of financial markets in decades, accompanied by an unusual synchronization in the cooling degree, strong, of the economic activity in most of the countries, with particular focus on world trade. The adjustment in production plans and concurrent review of business strategies must increase further during the first months of 2009, with negative repercussions on employment levels, limiting in short term the improvement of the situation. The action of automatic stabilizers, as the downturn in raw materials price, the aggressive reduction of interest rates and measures of direct intervention in weak economic sectors should contribute to an economic recovery and for normalization of the behavior of financial markets in long term, but are not free of risk and with significant and unusual challenges on public upturn by the private sector.

An environment of weak economic growth slightly spread and worsening, it is conducive to the intensification of competition and, eventually, to frequent occurrence of geopolitical tensions, due to a call for greater state intervention in the economy. In these circumstances, foreign trade, exchange rate policy and development aid can resume a prominent status in the economic and political world.

It is expected that the economy's performance in 2009 will be characterized by strong restrictions on the financing of consumption and investment and a general slowdown in exports. For greater social concern, it will be the rise in unemployment, but that may also cause a greater propensity as a preventive reason. Involved in a crisis environment, there will be put fiscal stimulus to growth aiming to reverse the present economic situation.

Concerning GDP evolution, there is a perspective of an annual decline between 1 to 2 percent, but the activity recovery should de felt from the third quarter of 2009, although slower than in the U.S.

The most likely scenario for Portugal will be a recession, in line with the average performance expected for the euro area. The main risk results from the ability of the financial system to maintain the level of founds collection abroad to fill the shortfall of domestic savings in order to soften the inevitable transition to a more balanced regime in terms of financing of domestic consumption and investment. As well as in the euro area, inflationary pressures should moderate throughout 2009, reflecting simultaneously the lower energy prices and a broad context of slack production, translated in the maintenance of relatively high rates of unemployment.

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STOCK EXCHANGE EVOLUTION

(Note: in order to enable a better comparison of the stock fluctuations, the PSI 20 index has been considered as being equal in value to the opening price of the shares in question.)

2008 will be in the history of Portuguese stock exchange as the darkest period ever. The PSI 20, the main index, dropped in 2008, 51%, this being the worst performance of a set of 20 global indices accompanied by Euronext.

During the twelve months, the PSI 20 stock exchange capitalization reduce significantly. At the last year end, the value of the 20 companies of the major Portuguese stock market index reached 94.3 thousand million Euro, decreasing to 46.2 thousand million at the end of 2008, representing a decrease of 48.1 thousand million Euro.

Altri’s share prices behavior had not been different from the other companies, as it was also greatly affected by this negative year, which had reflex on its share quotation, which present a decrease compared to the previous year.

Altri’s share price decreased around 49% during 2008, and closed bearing at 2.10 Euro per share with a market capitalization amounting to, approximately, 215 million Euro.

Were traded during the year 2008 approximately 146.4 million securities of the Company, volume extremely relevant if we take into consideration that their capital is composed of about 103 million shares.

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The main events that distinguished the stock evolution during 2008 may be described chronologically as follows:

3 January 2008 - Altri announces that in the year 2007 the Group achieved production records in all its industrial units (Celbi, Celtejo, Caima and CPK), reaching a consolidated production of 639 thousand tons, a 5% increase comparing to 2006;

30 January 2008 – Altri announces that Millennium bcp – Gestão de Fundos de Investimentos, S.A., representing its funds, decrease in 28 January 2008, its participation in Altri SGPS, S.A. share capital to 1,310,979 shares corresponding to 1.28% of the share capital and voting rights of this company;

12 March 2008 - Altri announces the Group’s financial performance for the year 2007, with a net profit (including minority interests) of 35.26 million Euro. Operating income amounted to 419 million Euro and EBITDA reached 102 million Euro. In the year 2007 Celbi/Caima/Celtejo Group’s operating income reached about 312 million euro, a 59% increase if compared with 2006 and 4% when compared with pro-forma 12 months from Celbi. EBITDA amounted to approximately 92 million euro, recording a 79% growth in comparison with 2006 and 16% when comparing with pro-forma EBITDA considering 12 months of Celbi’s activity. Operating profit reached 67 million euro, which represents a 99% growth when compared with 2006 figures and of 25% if considering the above mentioned pro-forma information;

16 April 2008 – Altri’s Board of Directors approved a demerger project (spin off) for the company. The planned reorganization implies the splitting of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and warehousing systems sector;

28 May 2008 – Altri communicated to the market the results of Altri for the 1st quarter of 2008. The consolidated operating income of Altri Group reached

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around 109 million euro which represents a growth of 2.5% and 3.6% compared to the 1st quarter of 2007 and the 4th quarter of 2007, respectively. The EBITDA exceeded 24 million euro and registered a decrease of 15% compared with the 1st quarter of 2007 (28 million euro) and a growth of 9% compared with the 4th quarter of 2007 (22 million euro);

9 June 2008 – the Company informed the Securities Market Commission (“Comissão do Mercado de Valores Mobiliários” - CMVM) regarding the payment of a dividend of 0.05 Euro per share for the year 2007 as from 25 June 2008. At this day the share’s price listed at 3.13 Euro;

9 June 2008 – the Company informed the Securities Market Commission (“Comissão do Mercado de Valores Mobiliários” - CMVM) regarding the attribution clauses of F. Ramada – Investimentos share capital stocks to Altri’s shareholders: the shares were attributed through the application of factor 0.25 to the number of registered demerger rights;

28 August 2008 – the Group announced its performance for the first semester of 2008 with the net profit including minority interests of approximately 8.9 million Euro, from which 1.3 refer to operating discontinued units (Ramada). The consolidated operating income amounted was up than 162 million Euro. The operating cash flow (operating results + depreciation) was 41.5 million euro;

5 November 2008 – Altri announces the results for the 3rd quarter of 2008. The consolidated operating income of Altri Group reached around 242.8 million Euro which represents a growth of 3.3% compared to the 3rd quarter of 2007. The operating cash flow amounted to about 59.5 million Euro and registered a decrease of 16.9% compared with the 3rd quarter of 2007. These results produced a consolidated net profit greater than 11 million Euro (-61.8% compared with the 3rd quarter of 2007), from which 1.3 refer to operating discontinued units (Ramada);

6 December 2008 – Altri informed the Securities Market Commission (“Comissão do Mercado de Valores Mobiliários” - CMVM) that Cofihold, SGPS, S.A. sold, out of stock, 21,000,000 shares of Altri - SGPS corresponding to 20.47% of the voting rights, at the price of 2.244 Euro per share. As result of this operation, COFIHOLD, SGPS, S.A. no longer held any participation of Altri’s SGPS share capital. On that same date it was also communicated that Caderno Azul, SGPS, S.A., Paulo Jorge dos Santos Fernandes, Domingos José Vieira de Matos and Pedro Miguel Matos Borges de Oliveira bought, out of stock exchange market, 4,666,660 shares, 3,500,000 shares, 3,500,000 shares and 2,333,340 shares, respectively, representative of 9.02%, 6.48%, 6.80% and 4.22%, respectively, of Altri’s capital and voting rights;

11 December 2008 – Altri informed the Securities Market Commission (“Comissão do Mercado de Valores Mobiliários” - CMVM) that Promendo – SGPS, S.A. bought, out of stock, 7,000,000 shares of ALTRI, SGPS, S.A. corresponding to 6.82% of Altri’s capital and voting rights, at the price of 2.244 Euro per share. These shares are considered attributable to Ana Rebelo de Carvalho Menéres de Mendonça Mariz Fernandes, holder of 59.6% of the share capital of that Company and its director, to whom are also considered attributable 6,731,891 shares directly hold by Ana Rebelo de Carvalho Menéres de Mendonça Mariz Fernandes and 1,162,000 shares hold by

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Promendo – Promoções Empresariais, S.A., in which she holds 68% of the capital and voting rights and is also director. The ownership of the above mentioned shares makes it attributable to Ana Rebelo de Carvalho Menéres de Mendonça Mariz Fernandes, a total amount of 14,893,891 shares, corresponding, approximately to 14.52% of Altri, SGPS, S.A. voting rights;

9 January 2009 – Altri informed the Securities Market Commission (“Comissão do Mercado de Valores Mobiliários” - CMVM) that its subsidiary CPK – Papel Kraft, S.A. decided to shut down permanently its kraft sack paper unit. The shut down costs, reaching 5 million Euro, are totally allocated to the 4th quarter 2008. This strategic decision was taken due to the negative environment currently felt in kraft sack business and the negligible current impact of CPK to Altri’s consolidated EBITDA. Altri reinforces its strategic position in its core business: forest management and pulp production.

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GROUP’S ACTIVITY With its genesis in the reorganization process of Cofina with the purpose of setting into a separate holding the industrial operations, Altri held until 1 June 2008 the investments in the paper, pulp, steel and storage systems, date considered for the demerger process accounting impacts. The planned reorganization implies the splitting of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and storage systems sector. This reorganization is part of a focusing and business transparency strategy, aiming at giving greater visibility to each area and increasing market perception of value.

The Group currently operates in this sector through Celulose do Caima, S.G.P.S., S.A., which, in its turn, holds participations in:

- Caima – Indústria de Celulose (Constância), producer and distributor of paper pulp;

- Celbi – Celulose da Beira Industrial, S.A. (Figueira da Foz), producer and distributor of paper pulp;

- Celtejo – Empresa de Celulose do Tejo, S.A. (Vila Velha de Ródão), producer and distributor of paper pulp;

- Silvicaima – Sociedade Silvícola do Caima, S.A. (Constância), owner and manager of the Group’s forestry resources;

- Caima Energia – Empresa de Gestão e Exploração de Energia, S.A. (Constância), provide its associated companies with its electric and thermal energy needs.

Moreover, in order to fulfill its energetic needs and expand its activity in a strategic sector, the Group holds a participation of 50% of the share-capital of EDP Bioeléctrica.

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Caima SGPS

Inflora

Invescaima

Silvicaima Caima Indústria

Caima Energia

100%100%

100%Celtejo

99,59%EDP Bioeléctrica

45%

CPK

100%

Altri, SL

100%

100%

Sosapel

100%

100%

Celbi

Viveiros do Furadouro Unipessoal, Lda Celbinave, Lda

100%100%

Operfoz, Lda

33%

100%

Sócasca

100%

Altri Sales, SA

100%

Altri – Energias Renováveis, SA

5%

100%

Captaraíz

100%

Pedro Frutícola

60%

40%

Altri SGPS

100%

CPK II

100%

Paper pulp market

The paper pulp global market, specifically bleached eucalyptus kraft pulp (BEKP), suffered a slowdown in demand during the third quarter of 2008 mainly motivated by the international financial crisis. This slowdown increased during the 4th quarter. Temporary stoppages announced during the last quarter of the year were not sufficient to offset the fall in demand. However, the decline in pulp sale price is leading to a market reorganization, with some inefficient producers leaving permanently the market. In the beginning of 2009 were publicly announced the closure of about 1.5 million tonnes (U.S.A. and Scandinavia) of pulp production. Nowadays, the company is strengthening its market share in Europe. Moreover, in consequence of the financial crisis, capacity expansion and new units projects were postponed or abandoned. In terms of operating costs, the year 2008 can be divided into two parts: first, until September there was an increased cost of raw materials, specially wood, but from September, the price of wood recorded a downward trend, driven by the deepening economic crisis.

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In 2008 it was not yet felt the impact of wood price decrease, because during the year the company accumulated raw material stocks, with an average cost higher than the one than the last quarter price. At the end of 2008, the wood stock level was about 2 months, and it was expected that only from the second half of 2009 the operating costs reflect the reality of wood price decrease. The market price of pulp BEKP (according to PIX) at the end of 2008 stood at 584 USD/ton, corresponding to 417 EUR/ton. The BEKP average price was around 788 USD/ton, which corresponds to an average price of pulp BEKP of 537 EUR/ton.

CELBI GROUP Celbi reached during 2008 sales of 270.4 thousand tons of pulp, representing a decrease of 16.7% over the previous year. Regarding the production of pulp this amounted to 275 thousand tons, 15.4% below the production of the previous year, as result of the stops during 2008 associated to the increase capacity in progress project. CAIMA GROUP In 2008, the sales volume was 102.6 thousand tons of pulp which represents a decrease of 9.8% compared with sales recorded in 2007. The Iberian Peninsula and the other European Countries of European Union remained as the main markets. During 2008 Caima Group produced 113.2 tons of pulp, volume 1.1% above the previous year and that configures an optimal exploitation of the production capacity of the factory.

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Silvicaima still has an important role in the supply of the group companies making possible to achieve, together with supplies from outside, comfortable wood stocks at the end of 2008.

CELTEJO GROUP

The sales volume in 2008 amounted to 106.9 thousand tons of Kraft pulp raw and 50.5 tons of paper Kraftsack, representing a decrease, respectively, of 17.5% and 16.2% compared with the same period the previous year. The production of raw Kraft pulp in the year was 122.9 tons, 12% lower than the production of 2007. On paper Kraftsack the production was 52.8 tons, 15.8% below the occurred in 2007, due to the temporary stop need for the start up of the new bleaching line. The Group is increasing its production capacity in its units, with particular emphasis on Celtejo and Celbi. Altri estimated that in 2010 will reach a total production capacity of 910 thousand tons of pulp, which puts the company among the 10 largest in the world in the area of eucalyptus pulp. During 2008 production facilities in the sector of pulp and paper continued to scrupulously comply with environmental legislation, particularly regarding the parameters of liquid and gaseous emissions as well as the management and exploitation of solid waste. At the end of 2008 Altri decided to close its kraft sack unit (CPK). This strategic decision was taken due to the negative environment currently felt in kraft sack business and the negligible current impact of CPK to Atri’s consolidated EBITDA, not being predictable any possible trend change. This decision allowed Altri to concentrate in its core business: forest management and pulp production.

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FINANCIAL REVIEW

Altri, SGPS, S.A. The consolidated financial information of Altri for the year 2008 and its comparison with the same period of 2007, was prepared in accordance with the recognition and measurement principles defined by the International Financial Reporting Standards as adopted by the European Union. During the second quarter of 2008 the demerger of FRamada took place, with Altri concentrating its efforts in forestall activity and pulp production. Consequently, the financial information for the first semester of 2008 only refers to the forestall and pulp production activities, with FRamada activity in group Altri (5 months) being recorded under the caption “Profit for the period from discontinued operations”. Moreover, in late December, CPK, the packaging paper produce unity, with an annual capacity to produce 60 thousand tonnes, was closed. So, CPK’s activity was also classified as a non-continued unity, and its results recorded under the caption “Profit for the period from discontinued operations”. For comparison effects, the financial information of 2007 provides both a column with only forestall and pulp production activities and a consolidated column with forestall and pulp production activities and steel and warehouse systems activities. Therefore, the key data and consolidated activity Group indicators can be summarised as follows:

(amounts in thousand Euro) Dec-08 Dec-08 Var %IFRS IFRS 08/07

Blance sheetNet Assets 1,114,851 1,056,119 5.6% n.a.Shareholder´s equity 86,381 118,276 -27.0% n.a.Gross remunerated nominal debt 824,450 783,038 5.3% n.a.Cash and cash equivalents 74,300 136,330 -45.5% n.a.Net remunerated debt 750,150 646,708 16.0% n.a.

Statement of profit and loss Dec-08 Dec-2007 (b) Var % Dec-07 (c)Operating income 280,174 287,968 -2.7% 419,336 Operating profit (EBIT) 39,709 57,954 -31.5% 75,778 Net financial income (37,446) (31,922) -17.3% (33,462)Net consolid. profit attib. to the parent company´s shareholders of continued operations 4,109 20,925 -80.4% 35,194Net consolid. profit attib. to the parent company´s shareholders of non-continued operations 559 14,269 -96.1% -Minority interests 48 62 -23.5% 62Net consolidated profit for the period 4,716 35,256 -86.6% 35,256

Ratios Dec-08 Dec-2007 (b) Var % Dec-07 (c)Net profit / Operating income 1.5% 7.3% n.a. 8.4%EBITDA (a) 68,530 81,082 -15.5% 102,315 Shareholder´s equity / Net Assets 7.7% 11.2% n.a. 11.2%Return on Equity 4.8% 17.7% n.a. 29.8%

(a) EBITDA = Operating profit + Amortisation;

(b) Forestall and pulp production activity; (c) Forestall and pulp production activity and steel and warehouse systems activities.

In 2008, the Altri Group consolidated operating income reached around 280 million Euro, which represents a decrease of 3% compared with the figures recorded in 2007.

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2008 was an investment year in capacity expansion and operational efficiency improvements; is should be highlighted Celtejo’s new bleaching line (2nd quarter 2008) and the installation of the new Celbi’s pulp production line (2nd half 2008). As normal in these kind of industrial projects, both Celtejo’s startup as Celbi’s stoppage required non-recurring operational costs and temporary reductions on production capacity. Furthermore, in 2008 was recorded an impairment loss of approximately 5.8 Million Euro, which is essentially related to Celtejo stocks. Note that CPK (unit closed in December 2008) was fully provided by Celtejo pulp. 2008 net income from the sale of electricity produced by cogeneration was 10.1 Million Euro, while the previous year has reached 14.3 Million Euro. This reduction was related to investments in Celtejo and Celbi. Thus, 2008 EBITDA was, approximately, 68.5 million euro, compared with approximately 81 million euro in 2007 (less 15%). Operating profit (EBIT) reached, approximately, 40 million euro, representing a 32% decrease when compared with 58 million euro in 2007. The net profit of forestall and pulp production areas in 2008 was, approximately, 4.1 million euro, 80% less when compared to 2007. Total investment (CAPEX) reached 261.8 million euro. The main responsible for the investment made was Celbi with 216.6 million euro. The Celbi’s project – double its pulp production capacity – is on time and on budget. In the second half of 2009 the mill will be able to produce 600 thousand tonnes/year of bleached eucalyptus kraft pulp. Altri’s nominal net debt as of December 31, 2008 was 750.1 million euro. It should be stressed that all the financing needs to the undergoing projects are totally assured. Altri produced in 2008, approximately, 511 thousand tonnes of pulp, which represents an 11% decrease in comparison with 2007. F. Ramada demerger process originated a shareholders’ funds decrease of, approximately, 39.5 million Euro.

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2009 OUTLOOK

Wood price showed a downward trend since September 2008, driven by the deepening of economic crisis. Although, during 2008 it was not yet felt the impact of wood price decrease, because over the years the company accumulated raw material stocks, with an average cost higher than the one than the last quarter price. It was expected that only from the second half of 2009 the operating costs reflect the reality of wood price decrease. In what concerns to Pulp and Paper, while the paper production contraction combined with an increase in pulp supply may have negative effects on price evolution, wood cost pressure and exchange will pressure in the opposite direction. It is expected a year with prospects of increasing prices of paper pulp compared to what happened in December 2008, mainly from the second half of 2009. PROPOSAL OF THE BOARD OF DIRECTORS FOR APPROPRIATION OF THE NON CONSOLIDATED NET PROFIT FOR THE YEAR

Altri, S.G.P.S., S.A., as holding company for the Group, achieved in its statements prepared in accordance with generally accepted accounting principles in Portugal, a non-consolidated net profit of 24,649,164 Euro which, in accordance with the applicable legislation and the Company’s articles of association, the Board of Directors proposes to the Shareholders’ General Meeting to be appropriated as follows: Legal Reserve 1,232,458.20 Free Reserves 23,416,705.73 --------------------- 24,649,163.93 ===========

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CORPORATE GOVERNANCE Altri adopts the regulations and recommendations from Corporate Governance as it is disclosed in this report.

In compliance with the guidelines included in Stock Exchange Regulation (Regulamento da CMVM) 7/2001 with the changes introduced by Regulations 11/2003, 10/2005, 01/2007 and 05/2008 this section serves to summarise the fundamental aspects of the management of the Company as regards the Board of Directors, considering the need for transparency with respect to this matter and the need for information for the investors and others to which the information is addressed. This section is organized in accordance with the instructions included in the Regulation 05/2008, being the Board of Directors’ belief that the majority of the items included in the Stock Exchange Recommendations for Governance of Listed Companies have been complied with. In the Shareholders’ General Meeting of 28 May 2008 it was approved the constitution of the Remuneration Committee for the term 2008-2010, composed by:

• Pedro Nuno Fernandes de Sá Pessanha da Costa – President

• João da Silva Natária - Member

• Fernando Eugénio Cerqueira Magro Ferreira – Member

Additionally, due to Carlos Manuel Matos Borges de Oliveira death, the Board of Directors decided to coopt as new director, until the end of the current term (2008/2010) Laurentina da Silva Martins.

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0. Statement of compliance

0.1 Indication of where are available to the public the text of the codes of corporate governance to which the issuer is subject

This report was prepared in accordance with the Stock Exchange Regulation (Regulamento da CMVM) 1/2007 of November 21, as with the changes introduced by Regulation 5 / 2008 of 15 October and with the Code of Corporate Governance. The regulation is available for consultation on the website of the CMVM on the Internet at: www.cmvm.pt 0.2 Indication of the recomendations contained in the CMVM Code of Corporate

Governance adopted and not adopted Altri, S.G.P.S., S.A. complies with the majority of recommendations of the Securities Market Commission (Comissão do Mercado de Valores Mobiliários – CMVM) relating to Corporate Governance, except for the following (in accordance with the numeration set in the attachment of the regulation 5/2008 and in the Code of Corporate Governance):

CMVM recommendations Complies Fails Not

applicable

I. SHAREHOLDERS’ GENERAL MEETINGSI.1. Board of the Shareholders’ General Meeting

I.1.1 The Chairman of the Board of the Shareholders’ General Meeting shall be givenadequate human and logistical resources, taking into consideration the financial position of the Company.

I.1.2 The remuneration of the Chairman of the Board of the Shareholders’ General Meetingshall be disclosed in the annual Corporate Governance Report.

I.2. Participation at the MeetingI.2.1 The requirement to deposit or block shares before Shareholders’ General Meetings,contained in the Articles of Association, shall not exceed five working days.

I.2.2 Should the Shareholders’ General Meeting be suspended, the Company shall not require share blocking during the full perioduntil the meeting is resumed, but shall apply the same period as for the first session.

I.3. Voting and Exercising Voting Rights

I.3.1 Companies should not impose any statutory restriction on postal voting. √

I.3.2 The statutory advance deadline for receiving voting ballots by post shall not exceedthree working days.

I.3.3 The Company’s Articles of Association shall respect the one share-one vote principle. √

I.4. Quorum and Resolutions

I.4.1 Companies shall not set a constitutive or deliberative quorum that exceeds the minimum required by Portuguese Company Law. √

I.5. Attendance Lists, Minutes and Information on Resolutions Adopted

I.5.1 The minutes of the Shareholders’ General Meetings shall be made available to shareholders on the Company’s websitewithin a five day period, irrespective of the fact that such information may not be legallyclassified as material information. The lists of attendees, agendas items and resolutions adoptedshall be kept in a historic file on the Company’s website, covering meetings held for at least the last three years.

I.6. Measures Relating to Changes in ControlI.6.1 Measures aimed at preventing the success of takeover bids, shall respect the interestsof the both the Company and its shareholders.

I.6.2 In accordance with the principle established in the previous sub-paragraph, any Company that has Articles of Associationwith clauses that restrict or limit the number of votes that may be held or exercised by a singleshareholder, either individually or acting in concert with other shareholders, shall also require that,at least once every five years, the continuation of such clauses must be ratified at a Shareholders’ GeneralMeeting, at which the quorum shall not exceed the legal minimum and all votes cast shall count,without applying any restriction.

I.6.3 Defensive measures that automatically lead to a serious erosion in the value of the Company’sassets should not be adopted, when there has been a change in control or a changein the Company’s management, as this prevents the free transmission of shares andthe ability of shareholders to effectively evaluate those responsible for managing the Company.

II. MANAGEMENT AND AUDIT BOARDSII.1. General PointsII.1.1. Structure and Duties

II.1.1.1 In the Corporate Governance Report, the Board of Directors shall assess the governance modeladopted by the Company, by identifying any restrictions that are holding back performanceand by proposing actions to be taken that are judged to be appropriate to resolve them.

II.1.1.2 Companies shall set up internal control systems to efficiently detect risks relating to the Company’s activity,in order to protect its assets and keep its corporate governance transparent.

II.1.1.3 The Board of Directors and Statutory Audit Board shall establish internal regulations,which shall be disclosed on the Company’s website.

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II.1.2. Incompatibility and Independence

II.1.2.1 The Board of Directors shall include a sufficient number of non-executive members to ensure thatthere is the capacity to effectively supervise, audit and assess the activity of the executive members.

II.1.2.2 Non-executive members shall include an adequate number of independent members,taking into account the size of the Company and its shareholder structure, but thisshall never be less than one quarter of the total number of Board members.

II.1.3. Eligibility Criteria for Appointment

II.1.3.1 Depending on the governance model adopted, the Chairman of the Statutory AuditBoard, or of the Board Audit Committee or of the Financial Matters Committee shall beindependent and possess the necessary skills to perform their duties.

II.1.4. Policy on the Reporting of Irregularities

II.1.4.1 The Company shall adopt a policy of reporting any irregularities that have allegedly occurred, which includesthe following information:i) the means through which any irregularities may be reported internally, including the persons that are entitled to receive the reports;ii) how the report is to be handled, including confidential treatment, should this be requested by the reporter.

II.1.4.2 General guidelines from this policy should be disclosed in the Corporate Governance Report. √

II.1.5. Remuneration

II.1.5.1 The remuneration of the members of the Board of Directors shall be structured to be alignedwith the interests of the shareholders. In this sense: i) The remuneration of Directors carryingout executive duties should include a variable component based on performance linked to a performance assessmentthat shall be carried out periodically by the governance body or committee appointed for this purpose;ii) the variable component shall be consistent with the maximisation of the long-termperformance of the Company, and shall be dependent on sustainability of the variables adopted to measure performance;iii) non-executive members of the Board of Directors shall only receive fixed remuneration,unless the legal requirements dictate otherwise.

II.1.5.2 The Remuneration Committee and the Board of Directors shall present to the Shareholders’ Annual General Meetinga statement of the remuneration policy applied to the Statutory Governing Bodies(including the Board of Directors and Statutory Audit Board),as well as to other persons discharging managerial responsibilities (‘Dirigentes’) as defined in Article 248º-B, Clause 3 of the PortugueseSecurities Code. The information to shareholders shall include the criteria and main indicators proposed to be used in assessing perform and determining the variable component, independently of whether this is in the form of bonuses paid in shares, share options,annual bonuses or other awards.

II.1.5.3 At least one representative of the Shareholders’ Remuneration Committee shall bepresent at the Shareholders’ Annual General Meeting (‘AGM’).

II.1.5.4 A proposal shall be submitted to the Shareholders’ General Meeting to approve plans to grant shares and/or share options or awardcompensation based on variations in share prices, to members of the Statutory Governing Bodies (including the Board of Directorsand Statutory Audit Board), as well as to other persons discharging managerial responsibilities (‘Dirigentes’) as defined in Article 248º-B,Clause 3 of the Portuguese Securities Code. The proposal shall include all information necessary for a comprehensive assessment of the plan. The proposal shall be presented together with the regulation that governs the plan or if this has not yet been prepared, the general conditions that will be applied. Similarly, the main characteristics of any retirement benefit plan that benefits the Statutory Governing Bodies (including the Board of Directors and Statutory Audit Board), as well as other persons discharging managerial responsibilities (‘Dirigentes’)as defined in Article 248º-B, Clause 3 of the Portuguese Securities Code, shall also be approved at a Shareholders’ General Meeting.

II.1.5.5 The remuneration of the members of the Statutory Governing Bodies (including the Board of Directors and Statutory Audit Board)shall be individually disclosed on an annual basis. Fixed and variable components must be disclosed separately,when applicable, as well as any other remuneration received from other companies within the same Groupor from companies controlled by shareholders with qualifying share holdings.

II.2. Board of Directors

II.2.1 Within the limits established by Portuguese Company Law for each management and audit governance structure, and unless the Companyis restricted by its size, the Board of Directors shall delegate the day-to-day running of the Company and the powers and terms of thedelegation should be set out in the Corporate Governance Report.

II.2.2 The Board of Directors shall ensure that the Company acts in accordance with its objectives, and should not delegate its own responsibilities, including: i) definition of the Company’s strategy and general policies; ii) definition of the corporate structure of the Group; and iii) decisions that are considered to be strategic due to the amounts, risks and special circumstances involved.

II.2.3 Should the Chairman of the Board of Directors have an executive role, the Board of Directors shall set up efficient mechanismsto co-ordinate the work of the nonexecutive members, to ensure that they may take decisionsin an independent and informed manner, and shall also explain these mechanisms to the shareholdersin the Corporate Governance Report.

II.2.4 The Annual Management Report shall include a description of the activity carried out by the non-executiveBoard Members and shall, in particular, report any restrictions that they encountered.

II.2.5. The governing body responsible for management (Board of Directors) should promote the rotationof the Board member responsiblefor financial matters (CFO) at least at the end of every two mandates.

II.3. Chief Executive Officer (‘CEO’), Executive Committee and Executive Board of Directors

II.3.1 When Directors, who carry out executive duties are requested by other Board Members to supply information, they shall provideanswers in a timely manner with information that adequately responds to the request made.

II.3.2 The Chairman of the Executive Committee shall send the notices convening meetings and minutes of the respective meetings to the Chairman of the Board of Directors and, when applicable, to the Chairman of the Statutory Audit Boardor the Audit Committee.

II.3.3 The Chairman of the Executive Board of Directors shall send the notices convening meetings and minutes of the respective meetings to the Chairman of the General and Supervisory Board and to the Chairman of theFinancial Matters Committee. √

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II.4. General and Supervisory Board, Financial Matters Committee, Audit Committee and Statutory Audit Board

II.4.1 In addition to fulfilling its supervisory and verification roles, the General and Supervisory Boardshall fulfil a role of advisor, as well as monitor and continually assess the management of the Company by the Executive Board of Directors. Amongst the other matters on which the General and Supervisory Board should opine are the following: i) definition of the strategy sand general policies of the Company; ii) the corporate structure of the Group; and iii) decisions that are considered to be strategic due to the amounts, risks and specialcircumstances involved.

II.4.2 The annual reports on the activity of the General and Supervisory Board, the FinancialMatters Committee, the Audit Committee and the Statutory Audit Board shall bedisclosed on the Company’s website together with the financial statements.

II.4.3 The annual reports on the activity of the General and Supervisory Board, the FinancialMatters Committee, the Audit Committee and the Statutory Audit Board shall include a description of the supervisoryand verification work completed and shall, in particular, report any restrictions that they encountered.

II.4.4 The Financial Matters Committee, the Audit Committee or the Statutory Audit Board (depending on the governancemodel adopted) shall represent the Company, for all purposes, in the relationship with the external auditor.This shall include proposing who will provide this service, their respective remuneration, and ensuring that the Companyprovides adequate conditions to allow them to deliver their service, as well as acting as the point of contact with the Companyand being the first recipient of their reports.

II.4.5 The Financial Matters Committee, the Audit Committee or the Statutory Audit Board (depending on the governance model adoptedshall assess the external auditor on an annual basis and propose to the Shareholders’ General Meeting that the external auditor shouldbe discharged, should justifiable grounds exist.

II.5. Specialised Committees

II.5.1 Unless the Company is restricted by its size, the Board of Directors and the General and Supervisory Committee, depending on the governance model adopted, shall set up the necessary Committees in order to: i) ensure that a robust and independent assessment of the performance of the Executive Directors is carried out, as well as of its own overall performance and including the performance of all existing Committees; and ii) consider the governance system adopted, assess its efficiency and propose to the relevant bodies measures to make improvements.

II.5.2 Members of the Shareholders’ Remuneration Committee or alike, shall be independentfrom the Members of the Board of Directors.

II.5.3 All Committees shall draw up minutes of the meetings they hold. √

III. INFORMATION AND AUDITING

III.1. General Disclosure Requirements

III.1.2 Companies shall ensure that permanent contact is maintained with the market, upholding the principle ofequal treatment for all shareholders and avoiding any asymmetry in the access to information by investors.To achieve this, the Company shall set up an Investor Relations Office.

III.1.3 The following information disclosed on the Company’s Internet website, shall be available in English:a) The Company, its listed company status, registered office and the remaininginformation set out in Article 171 of Portuguese Company Law;b) Articles of Association;c) Identification of the members of the Statutory Governing Bodies and of the Representative for Relations with the Market;d) Investor Relations Office — its functions and contact details;e) Financial Statements;f) Half-Yearly Calendar of Company Events;g) Proposals presented to Shareholders’ General Meetings; andh) Notices convening Shareholders’ General Meetings.

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0.3 Not adopted and not applicable recommendations Recommendations I.3.2, II.1.1.3, II.1.2.1, II.1.4.1, II.1.4.2, II.1.5.2, II.1.5.5 and II.2.1 are not fully adopted by Altri, and Recommendations II.1.2.2, II.1.5.4, II.2.3, II.2.4, II.3.2, II.3.3 and II.4.1 are not applicable to Altri, as it is explained below: Not adopted recommendations: Recommendation I.3.2: The statutory advance deadline for receiving voting ballots

by post shall is five working days. The Board of Directors believes that the difference to the Portuguese Company Law (3 working days) is not relevant;

Recommendation II.1.1.3: The Board of Directors and Statutory Audit Board did not

establish internal regulations formally approved and published in its web site, though its powers are disclosed in Altri regulation, which also has a code of conduct applicable to all employees of the Group and extended to its Board of Directors;

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Recommendation II.1.2.1: The Board of Directors, elected by the Shareholders’ General Meeting, does not include any member that may be independent nor has non-executive members;

Recommendation II.1.4.1 and II.1.4.2: Taking into consideration the proximity of the

members of the Board of Directors in relation to the current activities of the several group companies and its workers, there is no formal model of communication of internal irregularities. Each time any irregularity is detected, it is promptly communicated to the Board members that make sure that the adequate and fair procedure is adopted to deal with the irregularities. At evaluation of ethical issues skills level and the structure of governance, such functions are performed directly by the Board of Directors, which maintains a constant debate on this issue;

Recommendation II.1.5.2: Altri, S.G.P.S., S.A. believes that the disclosure of the

parameters for calculating the variable component of the Board merbers’ remuneration of members does not bring relevant information to shareholders, being disclosed in the Directors’ Report general information about directors’ fixed and variable remuneration;

Recommendation II.1.5.5: In this section Altri, S.G.P.S., S.A. discloses information relating the fixed and variable remuneration of its Board of Directors and believes that disclosure of the individual remuneration of each director does not provide relevant information for the shareholders;

Recommendation II.2.1: all Altri’s directors are executive and take part in the operational companies’ management.

Not applicable recommendations:

Recommendations II.1.2.2, II.2.3 and II.2.4: The Board of Directors has no non-

executive members, so those Recommendations are not applicable;

Recommendation II.1.5.4: There are no plans or incentive systems related to stock option plans for the members of the Board of Directors or the employees, so this Recommendation is not applicable;

Recommendation II.3.2: There is no Executive Committee, so this recommendation

is not applicable;

Recommendations II.3.3 e II.4.1: Altri does not have General and Supervisory Board nor Financial Matters Committee, so those recommendations are not applicable.

0.4 Measuring the governance bodies’ independence The governance bodies’ members, except from the Board of Directors, are considered independent, being its independence measured at the time of their designation by their own expressed declaration.

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I. SHAREHOLDERS’ GENERAL MEETING

I.1 Board of the Shareholders’ General Meeting

The Shareholders’ General Meeting, is made up of all the shareholders with voting rights, who are responsible for approving changes in the articles of association, making a general assessment of the Management and monitoring the Company, approving the Directors’ Report and financial statements for the year, electing the members of the corporate bodies of its competence and, in general, considering all the matters submitted to it by the Board of Directors.

The Shareholders’ General Meeting elected for the term 2008/2010 is composed as follows:

o Pedro Nuno Fernandes de Sá Pessanha da Costa - President

o Fernando Eugénio Cerqueira Magro Ferreira - Member

The President of the Shareholders’ General Meeting has the manpower and logistical support that are appropriate to his needs and fulfill his duties, including the support and collaboration provided by the secretariat of the company and the Secretary of the Company. His remuneration for the year ended 31 December 2008 amounted to 5,000 Euro.

I.2 Participation at the Meeting

Prior to each General Shareholders’ Meeting, in compliance with the legally required periods of notice, Altri publishes extensively the dates on which meetings are to take place, complementing this with inclusion of the notice calling the meeting in its institutional site (www.altri.pt). Shareholders may vote if they hold at least one share registered or deposited in their name in the centralised securities system. Registration and deposit referred to must be shown to have been made at least five working days before the date of the General Shareholders’ Meeting. In case of suspension of the session, the shares previously blocked remain blocked to be resumed when the session is given continuity to the previously interrupted session.

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I.3 Voting and Exercising Voting Rights The General Shareholders’ Meeting is made up of all the shareholders with the right to vote, with one vote for each share held.

The vote by mail can be made under the following terms: - the vote by correspondence should be exercised through a written declaration, with a signature recognized by a public notary or an attorney and accompanied by a document supporting the registration of shares on behalf of the shareholder and respective immobilization, until the term of the day of the General Shareholders’ Meeting;

- the declaration of intent to exercise the vote by and the supporting document of the quality of shareholder must be delivered in the Company’s headquarters, until 5 p.m. of the fifth working day prior to the day assigned for the meeting, with identification of the remittent, directed to the Chairman of the General Shareholders’ Meeting”;

- there must be a declaration of vote for each point of the Order of the Day for which the vote by correspondence is admitted and each declaration of vote will have to be sent in a closed and sealed envelope, inside the mentioned letter, which can only be opened by the Chairman of the General Shareholders’ Meeting at the moment of the counting of the votes, for what each envelope will have to indicate in its exterior the point of the Order of the Day that it respects to;

- the votes by correspondence will be valid as negative votes in relation to the proposals of deliberation presented after to the emission of the vote;

- the presence of the shareholder in the General Meeting, or its representative, will be understood as revocation of its vote by correspondence. The model for the mail vote is available in the Company’s headquarters with the time in advance legally predicted and indicated in the convocation of the General Shareholders’ Meeting.

At this time there is no provision for voting by electronic means.

Individual persons who are shareholders with the right to vote may be represented by another shareholder, spouse, ascendant or descendant, or any member of the Board of Directors. Legal entities which are shareholders of the Company are represented by the person designated for that purpose. Such representation must be communicated to the President of the Board of the General Shareholders’ Meeting, by letter delivered to the Company’s head office up to 5 p.m. on the fifth day preceding that of the meeting. There is no a specific model provided for representation in the Shareholders’ General Meeting. Shareholders that do not have a sufficient number of shares to vote may do so by grouping together so as to have the number of shares needed to vote, only one of the members of the group being designated to represent the group at the Shareholders’ General Meeting.

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I.4. Quorum and Resolutions Altri's articles do not contemplate any constituent or deliberative quorum higher than considered in the law.

I.5 Attendance lists, minutes and information on resolutions adopted The minutes of the Shareholders’ General Meeting are available to shareholders on the website of Altri, where it is maintained an historical archive of the main information on those meetings.

I.6 Measures relating to changes on control

Altri did not adopt any clause or defensive measure to prevent the free transfer of shares representing its capital and free assessment, by the Shareholders, of the Board of Directors performance. The Company is not aware of any para-social arrangement in what it concerns to the exercise of social rights or to the transferability of the shares nor is there, to the best of its knowledge, any agreement that aims to secure or frustrate the success of bids.

II. MANAGEMENT AND AUDIT BOARDS

II.1 General Points II.1.1 Structure and duties Corporate Bodies The corporate bodies of Altri, S.G.P.S., S.A. are:

The Shareholders’ General Assembly, made up of all the shareholders with voting rights, who are responsible for approving changes in the articles of association, making a general assessment of the Management and monitoring the Company, approving the Directors’ Report and financial statements for the year, electing the members of the corporate bodies of its competence and, in general, considering all the matters submitted to it by the Board of Directors;

The Board of Directors, elected by the Shareholder’s General Assembly, currently made up of 5 members who are responsible for carrying out all the management functions to implement the operations inherent in its corporate objectives, acting in the best interests of the Company, its shareholders and employees. At the date of this report, this corporate body was composed of the following members:

o Paulo Jorge dos Santos Fernandes President

o João Manuel Matos Borges de Oliveira Member

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o Pedro Macedo Pinto de Mendonça Member

o Domingos José Vieira de Matos Member

o Laurentina da Silva Martins Member

Statutory Audit Board, appointed by the General Assembly, composed of three members and one or two alternates, responsible for the surveillance of the society and the appointment of the Statutory Auditor. On December 31, 2008 this corporate body was composed by the following members:

o João da Silva Natária – President

o Manuel Tiago Alves Baldaque de Marinho Fernandes - Member

o Cristina Isabel Linhares Fernandes – Member

o Joaquim Augusto Soares da Silva – Substitute

The Statutory Auditor, who is responsible for the examination of Company’s financial statements. On December 31, 2008 this function was performed for Deloitte & Associados, SROC S.A.

Risk control system

The Board of Directors consider that the group is exposed to the normal risks associated with its operations, namely in its operating units. Therefore, the main risks considered by the Group are: Credit Risk, Interest Rate Risk, Exchange rate Risk and Commodities Price variability Risk. Credit Risk Like any activity involving a commercial component, the Group’s exposure to credit risk is attributable mainly to the accounts receivable resulting from the Group’s operating activity. The first approach is performed through the daily management of the credit rating attributed to each credit prior to its acceptance and additionally through the adequacy of the granted payment periods. Credit risk evaluation is done in a regular basis, by analysing the current economic conjuncture conditions, in particular the credit situation of each company and, when necessary, adopting the corrective measures. Interest Rate Risk Considering the Group’s debt, possible variations on the interest rate may have an unwanted impact on the results. Therefore, the Group adopts a balanced position between the cost of the debt and its exposure to the interest rate variability. When the reasonable risk is exceeded, the Group engages interest rate swaps in order to reduce its exposure to risk and to restrict the potential volatility of results.

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Exchange Rate Risk Due to the great volume of transactions with non resident entities and with different currencies, exchange rate instability might have a relevant impact on the Group’s performance. Therefore, whenever the Group considers necessary to reduce the volatility of its results, the position is covered by contracting derivative instruments. Commodities Price variability Risk By developing its activity in two commodities transactional industries’ (paper pulp and steel), the Group is particularly exposed to its price fluctuations, with the correspondent impacts in their results. However, being in these industries allows the celebration of paper pulp price fluctuations hedging contracts’ by the adequate amounts by the foreseen operations, reducing the volatility of its results. As Altri is an open capital company, its Management and employees pay great attention to compliance with the duties of confidentiality in its relations with third parties, safeguarding Altri’s position in situations of conflict of interest. In terms of internal control, Altri’s operating companies include management control bodies, which perform work at all levels of the subsidiary companies and prepare monthly reports for each Board of Directors, in addition to the work performed in the various companies by the Statutory Auditor and external auditors under the provisions of the law. II.1.2 Incompatibility and Independence

All members of Altri’s Board of Directors perform executive functions and cannot be considered independent, according to the definition no 2 of the article no 1 of CMVM Regulation no 7/2001. II.1.3 Eligibility Criteria for Appointment

The governance bodies’ members are elected in the Shareholder General Meeting for three year terms. Regarding the Statutory Audit Board as a college body that is, the measure of independence is made to all those that compose it, given the application of paragraph 6 of art. 414 of the CSC, considering independence in accordance with the definition that is given under paragraph 5 of art. 414 and incompatibility as defined in paragraph 1 in 414-A both from CSC. The three members of the Statutory Audit Board meet the rules of incompatibility and independence identified above. In what it concerns to the competence for the exercise of functions, it is considered that all members have appropriate skills to carry out their tasks and the President is adequately supported by other members of the Statutory Audit Board.

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II.1.4 Policy on the Reporting of Irregularities

Taking into consideration the proximity of the members of the Board of Directors in relation to the current activities of the several group companies and its workers, there is no formal model of communication of internal irregularities. Each time any irregularity is detected, it is promptly communicated to the Board members that make sure that the adequate and fair procedure is adopted to deal with the irregularities. At evaluation of ethical issues skills level and the structure of governance, such functions are performed directly by the Board of Directors, which maintains a constant debate on this issue.

II.1.5 Remuneration According to the Entity articles, the members of the governing bodies will have their remuneration fixed the remuneration committee composed of three elements, one of whom shall be the President and will have a quality vote and must be elected by shareholders' resolution. Additionally, the remuneration committee president must be present in all the Shareholders’ General Meetings. Shareholders’ General Meeting President The remuneration of the Shareholders’ General Meeting amounted, during the year ended 31 December 2008, was 5,000 Euro. Board of Directors Board of Directors members receive no remuneration from the Company, being remunerated directly by the other Altri Group companies in which they exercise board functions. Remuneration of the members of the Board of Directors is not directly dependent upon the short term evolution of the price of the Company’s shares. There is no defined policy regarding compensation attributable to the Board members in case of dismissal or early release of their labour contracts. Remuneration for the year 2008 of the members of Altri’s Board of Directors for the exercise of their functions in Group companies was as follows:

Fixed remuneration 493,200 Variable remuneration 540,000 ------------- 1,033,200 ======= The variable remuneration results from the performance of the Group companies,

being its attribution criteria previously defined and according to the maximization of the company long-term performance.

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There are no: - plans or incentive systems related to stock option plans for the members of

the Board of Directors; - indemnities paid or due to former Board members related to the

suspension of duties during the year; - complementary pension or early retirement regimes for the Board

members; - non monetary benefits considered as remuneration.

Altri, S.G.P.S., S.A. has no plans or incentive systems related to stock option plans for the members of the Board of Directors or the employees Statutory Audit Board The Statutory Audit Board members’ remuneration is composed by an annual fixed amount, based on Altri’s situation and the market current practices. As of the year ended 31 December 2008 their total remuneration amounted to 23,760 Euro. Statutory Auditor Fees paid to the Group’s auditors and other entities belonging to the same network by the Company and its subsidiaries amounted to, approximately, 917 thousand Euros, distributed as follows:

- Statutory audit 22.5% - Other assurance services 34.1% - Tax consultancy services 40.5% - Other services 2.9%

In requesting projects, before awarding the services, the Board of Directors ensures that services are not contracted that, under the terms of European Commission Recommendation C (2002) 1873 of 16 May 2002, can put in question the independence of the auditors and their respective network. In addition, independence is usually safeguarded by the fact that the other services are rendered by different professionals from those performing financial audit services. II.2 Board of Directors In accordance with Altri’s articles of association, the Board of Directors is made up of three, five, seven or nine members, shareholders or not, elected by the General Shareholders’ Meeting for a three year period. The present members of the Board of Directors were nominated for the three-year period of 2008/2010. All members of Altri’s Board of Directors perform executive functions and cannot be considered independent, according to the definition no 2 of the article no 1 of CMVM Regulation no 7/2001.

The Board of Directors, elected in the Shareholders’ General Meeting, develops its tasks on a collective basis with the functions of management and coordination of the Group companies and is currently made up of a president and four members, all with executive functions.

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The Board of Directors has broad powers to manage and represent the Company and carry out all operations relating to its corporate objects, namely:

- Acquire, sell and encumber moveable assets, namely vehicles and, within

the legal limits, immovable assets; - Acquire participations in other companies; - Sell participations in other companies; - Rent moveable and immovable assets from and to third parties; - Issue mandates and powers of attorney for specific acts or categories of

acts, defining the extent of the mandates; - Actively and passively represent the Company in law and otherwise,

propose and have legal actions followed, confess and desist from legal actions, as well as to commit themselves to arbitrators.

There is no limit to the maximum number of duties that the Board members can accumulate in administrative organs of other companies. The members of Altri’s Board of Directors endeavour to be part of the administration of the most significant group companies, so as to enable their activities to be more closely attended. The Board of Directors meets regularly, and its decisions are only valid if a majority of its members is present. In 2008 the Board of Directors met 12 times, the corresponding minutes of the meetings being recorded in the Board of Directors’ Meetings Minute Book. The Board of Directors’ meetings from the associated companies, where Altri directors also take part, these occur with the frequency necessary for proper monitoring of its operations.

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The distribution of functions among the several members of the Board of Directors may be presented as follows:

Generically, Altri SGPS directors focus their activities in managing the Group’s participation and defining its strategic development. The daily management of each operating company is a responsibility of its Board of Directors, which includes some of Altri’s directors but also some other members with defined jurisdictions. Thus, taking into consideration the activities developed by the Board Members, both in Altri SGPS and in the several group companies, the functional organization chart can be presented as follows:

Altri SGPS

Board of Directors:

Paulo FernandesJoão Borges de OliveiraPedro Pinto Mendonça

Domingos MatosLaurentina Martins

Celtejo

Board of Directors

PauloFernandesJoão Borges de OliveiraPedro Pinto Mendonça

Agostinho Dolores FerreiraJoaquim Ferreira Matos

Celbi

Board of Directors

Paulo FernandesDomingos Matos

Pedro Pinto MendonçaJoão Borges de Oliveira

Graham DewarAgostinho Dolores Ferreira

Luís Todo Bom

Celulose do Caima

Board of Directors

Paulo FernandesJoão Borges de OliveiraPedro Pinto Mendonça

Domingos MatosFrancisco Silva Gomes

Agostinho Dolores FerreiraJoaquim Ferreira Matos

As of 31 December 2008, the Board members owned Altri’s shares as follows:

(a) 9,246,660 shares represent the total shares of Altri SGPS, SA owned by Caderno Azul -

SGPS SA, which the administrator João Manuel Matos Borges de Oliveira is shareholder.

Name Shares held

Paulo Jorge dos Santos Fernandes 6,645,746 Pedro Macedo Pinto de Mendonça 852,500 Domingos José Vieira de Matos 6,969,716 João Manuel Matos Borges de Oliveira (a) 9,246,660 Laurentina da Silva Martins

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Paulo Fernandes Chairman

João Borges Oliveira Chief Financial Officer

Pedro Pinto Mendonça

Members . .

Laurentina Martins

Domingos Matos

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The professional qualification of the present members of the Board of Directors, its professional activity and the detail of other companies where they also carry out management functions are as follows:

Paulo Jorge dos Santos Fernandes

Was one of the founders of Cofina (company that led to the creation of Altri, by spin-off), and has been involved in the Group’s management since its incorporation. Graduated from Porto University with a degree in Electronic Engineering, also has an MBA from the University of Lisbon. Develops his activity in the media and industrial operations, as well as in the strategic definition of the Group. In addition to the Companies which currently exercises functions of administration, his professional experience includes: 1982/1984 Assistant Director of Production of CORTAL 1986/1989 General Director of CORTAL 1989/1994 President of the Board of CORTAL 1995 Administrator of CRISAL – CRISTAIS DE ALCOBAÇA, SA 1997 Administrator of the Group Vista Alegre, SA 1997 Chairman of the Board of ATLANTIS - Cristais de Alcobaça, SA 2000/2001 Administrator of SIC 2001 Administrator of V.A.A. Throughout his career, also played roles in several associations: 1989/1994 President of FEMB (Fédération Européene de Mobilier de Bureau) for Portugal; 1989/1990 President of the General Assembly Assoc. Industr. Águeda 1991/1993 Member of the Advisory Board Assoc. Ind. Portuense The other companies where he carries out management functions as of 31 December 2008, are as follows: - Altri, S.G.P.S., S.A. - Caima – Indústria de Celulose, S.A. - Celbi – Celulose da Beira Industrial, S.A. - Celtejo – Empresa de Celulose do Tejo, S.A. - Celulose do Caima, S.G.P.S., S.A. - Cofihold, S.G.P.S., S.A. (a) - Cofina Media, S.G.P.S., S.A. (a) - CPK – Companhia Produtora de Papel Kraftsack, S.A. - Edisport – Soc. de Publicações, S.A. (a) - Efe Erre Participações, S.G.P.S., S.A. (a) - F. Ramada – Produção e Comercialização de Estruturas Metálicas de

Armazenagem, S.A. (a) - F. Ramada II Imobiliária, S.A. (a) - F. Ramada Serviços de Gestão, Lda. (a) - F. Ramada, Aços e Indústrias, S.A. (a) - F. Ramada – Investimentos, SGPS, S.A. (a) - Invescaima, S.G.P.S., S.A. - Mediafin – S.G.P.S., S.A. (a)

DIRECTORS’ REPORT


- Presselivre – Imprensa Livre, S.A. (a) - Prestimo – Prestígio Imobiliário, S.A. (a) - Ródão Power, S.A. (a) - Sociedade Imobiliária Porto Seguro – Investimentos Imobiliários, S.A. (a)

(a) – Companies that, as of December 31, 2008 cannot be considered to be part

of Altri, S.G.P.S., S.A. Group João Manuel Matos Borges de Oliveira Was one of the founders of Cofina (company that led to the creation of Altri, by spin-off), and has been involved in the Group’s management since its incorporation. Graduated from the Porto University with a degree in Chemical Engineering, holds an MBA from INSEAD. Develops his activity in the media and industrial operations, as well as in the strategic definition of the Group. In addition to the Companies which currently exercises functions of administration, his professional experience includes: 1982/1983 Assistant Director of Production of Cortal 1984/1985 Production Director of Cortal 1987/1989 Marketing Director of Cortal 1989/1994 General Director of Cortal 1989/1995 Vice President of the Board of Cortal 1989/1994 Administrator of Seldex 1996/2000 Non-executive Director of Atlantis, SA 1997/2000 Non-executive Director of Vista Alegre, SA 1998/1999 Administrator of Efacec Capital, SGPS, SA The other companies where he carries out management functions as of 31 December 2008, are as follows: - Altri, S.G.P.S., S.A. - Caima – Indústria de Celulose, S.A. - Celbi – Celulose da Beira Industrial, S.A. - Celtejo – Empresa de Celulose do Tejo, S.A. - Celulose do Caima, S.G.P.S., S.A. - Cofihold, S.G.P.S., S.A. (a) - Cofina Media, S.G.P.S., S.A. (a) - Edisport – Soc. de Publicações, S.A. (a) - Efe Erre Participações, S.G.P.S., S.A. (a) - F. Ramada – Produção e Comercialização de Estruturas Metálicas de

Armazenagem, S.A. (a) - F. Ramada II Imobiliária, S.A. (a) - F. Ramada Serviços de Gestão, Lda. (a) - F. Ramada, Aços e Indústrias, S.A. (a) - F. Ramada – Investimentos, SGPS, S.A. (a) - Invescaima, S.G.P.S., S.A. - Jardins de França – Empreendimentos Imobiliários, S.A. (a) - Presselivre – Imprensa Livre, S.A. (a) - Prestimo – Prestígio Imobiliário, S.A. (a) - Storax Racking Systems, Ltd. (a)

DIRECTORS’ REPORT


(a) – Companies that, as of December 31, 2008 cannot be considered to be part

of Altri, S.G.P.S., S.A. Group

Pedro Macedo Pinto de Mendonça Attended the Faculty of Medicine in Porto for two years, and holds a degree in Mechanics from the École Superiore de L’Etat in Brussels. He is shareholder of the Company since its incorporation and has been administrator since that date. In addition to the Companies which currently exercises functions of administration, his professional experience includes: 1959 Director of Supply of Empresa de Metalurgia Artística Lisboa 1965 Production Director of Empresa de Metalurgia Artística Lisboa 1970 Administrator and sales responsible of Seldex 1986 Founding Partner of Euroeel 1986/1990 Administrator of Euroeel 1986 Chairman of the Board of Seldex 1989 Administrator of Cortal The other companies which perform functions of administration as of 31 December 2008 are: - Altri, S.G.P.S., S.A. - Caima – Indústria de Celulose, S.A. - Celbi – Celulose da Beira Industrial, S.A. - Celtejo – Empresa de Celulose do Tejo, S.A. - Celulose do Caima, S.G.P.S., S.A. - Cofihold, S.G.P.S., S.A. (a) - Cofina Media, S.G.P.S., S.A. (a) - Efe Erre Participações, S.G.P.S., S.A. (a) - F. Ramada – Produção e Comercialização de Estruturas Metálicas de

Armazenagem, S.A. (a) - F. Ramada II Imobiliária, S.A. (a) - F. Ramada Serviços de Gestão, Lda. (a) - F. Ramada, Aços e Indústrias, S.A. (a) - F. Ramada – Investimentos, SGPS, S.A. (a) - Universal Afir – Aços, Máquinas e Ferramentas, S.A. (a) - Prestimo – Prestígio Imobiliário, S.A. (a) (a) – Companies that, as of December 31, 2008 cannot be considered to be part

of Altri, S.G.P.S., S.A.

DIRECTORS’ REPORT


Domingos José Vieira de Matos Holds a degree in Economics from the Faculty of Economy of the University of Porto. Initiated his carrier in management in 1978. He is shareholder of the Company since its incorporation and has been administrator since that date. In addition to the Companies which currently exercise functions of administration, his professional experience includes: 1978/1994 Administrator of CORTAL, SA 1983 Founding Partner of PROMEDE – Produtos Médicos, SA 1998/2000 Administrator of ELECTRO CERÂMICAS, SA The other companies where he carries out management functions as of 31 December 2008 are as follows: - Altri, S.G.P.S., S.A. - Caima – Indústria de Celulose, S.A. - Celbi – Celulose da Beira Industrial, S.A. - Celulose do Caima, S.G.P.S., S.A. - Cofihold, S.G.P.S., S.A. (a) - Efe Erre Participações, S.G.P.S., S.A. (a) - F. Ramada – Produção e Comercialização de Estruturas Metálicas de

Armazenagem, S.A. (a) - F. Ramada II Imobiliária, S.A. (a) - F. Ramada Serviços de Gestão, Lda. (a) - F. Ramada, Aços e Indústrias, S.A. (a) - F. Ramada – Investimentos, SGPS, S.A. (a) - Jardins de França – Empreendimentos Imobiliários, S.A. (a) - Prestimo – Prestígio Imobiliário, S.A. (a) - Silvicaima – Sociedade Silvícola Caima, S.A. - Universal Afir – Aços, Máquinas e Ferramentas, S.A. (a) (a) – Companies that, as of December 31, 2008 cannot be considered to be part

of Altri, S.G.P.S., S.A Laurentina da Silva Martins

With formation in Finance and Administration from Instituto Superior do Porto and is connected with Altri Group since incorporation. Her Professional experience includes: 1965 Finance Direction Assessor of Companhia de Celulose do Caima, S.A. 1990 Finance Director of Companhia de Celulose do Caima, S.A. 2001 Director of Cofina Media, SGPS, S.A. 2001 Director of Caima Energia – Empresa de Gestão e Exploração de

Energia, S.A. 2004 Director of Grafedisport – Impressão e Artes Gráficas, S.A. 2005 Director of Silvicaima – Sociedade Silvícola do Caima, S.A. 2006 Director of EDP – Produção Bioeléctrica, S.A. 2007 Director of Edisport – Sociedade de Publicações, S.A. 2007 Director of Metro News – Publicações, S.A. 2008 Director of Edirevistas – Sociedade Editorial, S.A.

DIRECTORS’ REPORT


The other companies where she carries out management functions as of 31 December 2008 are as follows: - Altri, S.G.P.S., S.A. - Cofina Media, SGPS, S.A. (a) - Caima Energia – Empresa de Gestão e Exploração de Energia, S.A. - Grafedisport – Impressão e Artes Gráficas, S.A. (a) - Silvicaima – Sociedade Silvícola do Caima, S.A. - EDP – Produção Bioeléctrica, S.A. - Edisport – Sociedade de Publicações, S.A. (a) - Metro News – Publicações, S.A. (a) - Edirevistas – Sociedade Editorial, S.A. (a) (a) – Companies that, as of December 31, 2008 cannot be considered to be part

of Altri, S.G.P.S., S.A

II.3 Chief Executive Officer (‘CEO’), Executive Committee and Executive Board of Directors

There is no Executive Committee with management powers. Management’s decisions are taken by the Board of Directors under the normal course of its functions, and so such a committee is considered to be unnecessary for the Company’s operations and for the investors’ protection. II.4 General and Supervisory Board, Financial Matters Committee, Audit Committee

and Statutory Audit Board Statutory Audit Board, appointed by the General Shareholders’ Meeting, composed of three members and one or two alternates, responsible for the superintendence of the society and the appointment of the Sole Statutory Auditor. The company’s supervision is responsibility of this two bodies: the Statutory Audit Board and the Sole Statutory Auditor. Regarding the Statutory Audit Board as a college body that is, the measure of independence is made to all those that compose it, given the application of paragraph 6 of art. 414 of the CSC, considering independence in accordance with the definition that is given under paragraph 5 of art. 414 and incompatibility as defined in paragraph 1 in 414-A both from CSC. The three members of the Statutory Audit Board meet the rules of incompatibility and independence identified above. In 2008 the Statutory Audit Board met 4 times, the corresponding minutes of the meetings being recorded in the Statutory Audit Board’s Meetings Minute Book. In what it concerns to the competence for the exercise of functions, it is considered that all members have appropriate skills to carry out their tasks and the President is adequately supported by other members of the Statutory Audit Board. The annual reports on the activities undertaken by the Statutory Audit Board are subject to disclosure on the website of the company, together with the financial statements.

DIRECTORS’ REPORT


II.5 Specialized Committees In accordance with the Company’s articles of association, the members of the corporate bodies will be entitled to the remunerations fixed by a committee composed of three shareholders, one of which will be the president and will have a quality vote, elected by the General Shareholders’ Meeting. The remuneration may be previously settled or include a percentage that can never exceed five per cent of the net profit for the year. In the Shareholders’ General Meeting of 28 May 2008 it was approved the constitution of the Remuneration Committee for the term 2008-2010, composed by:

o Pedro Nuno Fernandes de Sá Pessanha da Costa – President o João da Silva Natária - Member o Fernando Eugénio Cerqueira Magro Ferreira – Member

Any member of this Commission is a member of the board of the Society as well as none of their spouses or relatives in a straight line to the 3rd degree, inclusive. It is practice of the Compensation Committee to be represented in the General Assembly. There are no other specialized committees formally constituted and operating in the Company.

III. INFORMATION AND AUDIT

III.1 Information general duties Dividend distribution As it was incorporated during 2005, Altri has not yet a dividends distribution historial perfectly defined. Although, according to the Board of Directors’ defined policy, there are proposed dividend distributions which aim to provide the shareholders with adequate compensation on invested capital, and at the same time, provide the Group’s needs regarding its continuous growth and investment. In 2005 there was a dividend distribution amounting to 2,564,146 Euro, corresponding to an earning per share of 0.05 Euro, in a total of 51,282,918. In the years 2006 and 2007 there were dividend distributions amounting 5,128,292 Euro, corresponding to an earning per share of 0.05 Euro, in a total of 102,565,836.

For the year 2008, the Board proposes not to distribute any dividends. Transactions carried out between the Company and members of its corporate boards During 2008 no transactions were carried out between the Company and the members of its corporate boards (direction or superintendence), holders of qualified participations or subsidiaries of the Group that were not performed under normal market conditions for similar transactions, and always performed under the Company’s normal course of business of managing its participations.

DIRECTORS’ REPORT


Market relationships There is in the Company a market relationships’ delegate - Alfredo Luís Portocarrero Pinto Teixeira, a company’s secretary. The contact for investors to obtain information is as follows: Rua do General Norton de Matos, 68 – r/c 4050-424 Porto Tel: 22 8346502 Fax: 22 8346503 E-mail: [email protected] When need, he provides to the market to provide all relevant information regarding the events, facts considered as the relevant facts, disclosure of quarterly results and answers to any requests for clarification by the investors or the general public on public financial information. Additionally, Altri provides financial information relating to its non consolidated and consolidated operations, as well as that of its participated companies, through its official internet page (www.altri.pt). This site is also used by the Company to provide information on press releases, as well as any relevant facts occurring in the life of the Company. This page also includes the Company’s documents of accounts.

mailto:[email protected]�

http://www.altri.pt/�

DIRECTORS’ REPORT


LEGAL MATTERS

Treasury stock Pursuant to the requirements of article 66 of the Commercial Companies’ Code (Código das Sociedades Comerciais), the Directors inform that as of 31 December 2008 Altri had no treasury stock and did not acquire or sell any treasury stock during the year. Shares held by the governing bodies of Altri Pursuant to the requirements of article 447 of the Commercial Companies’ Code, the Directors inform that, as of 31 December 2008, they held the following shares:

Paulo Jorge dos Santos Fernandes 6,645,746 Pedro Macedo Pinto de Mendonça 852,500 Domingos José Vieira de Matos 6,969,716 João Manuel Matos Borges de Oliveira (a) 9,246,660 Laurentina da Silva Martins 0

(a) 9,246,660 shares represent the total shares of Altri SGPS, SA owned by Caderno Azul - SGPS SA, which the administrator João Manuel Matos Borges de Oliveira is shareholder.

As of 31 December 2008, the Statutory Auditor, the members of the Statutory Audit Board and the members of the Board of the General Shareholders’ Meeting held no shares of the Company.

Participation in the Company’s share capital Pursuant to the requirements of articles 16 and 20 of the Stock Exchange Code (Código de Valores Mobiliários) and article 448 of the Commercial Companies Code, the Directors inform that, in accordance with the notifications received, the companies and/or individuals that hold qualified participations exceeding 2%, 5%, 10%, 20%, 33% and 50% of the voting rights, are as follows:

Exceeding 2% of the voting rights Shares held at

31.12.2008 Direct % of the

voting rights Pedro Miguel Matos Borges de Oliveira 4,333,340 4.22%

Exceeding 5% of the voting rights Shares held at

31.12.2008 Direct % of the

voting rights UBS AG, Zurique 9,778,608 9.53% Caderno Azul, SGPS, S.A. (a) 9,246,660 9.02% Promendo – SGPS, S.A. (b) 7,000,000 6.82% Domingos José Vieira de Matos 6,969,716 6.80% Ana Rebelo Mendonça Fernandes (c) 6,731,891 6.56% Paulo Jorge dos Santos Fernandes 6,645,746 6.48% Bestinver Gestión, SGIIC, S.A. 5,184,748 5.06% (a) 9,246,660 shares represent the total shares of Altri SGPS, SA owned by Caderno Azul - SGPS SA, which the administrator João Manuel Matos Borges de Oliveira is shareholder;

DIRECTORS’ REPORT


(b) 7,000,000 shares of Altri – SGPS, S.A. held by PROMENDO – SGPS, S.A., are attributable to Ana Rebelo Mendonça Fernandes, manager and shareholder, holder of 59.6% of the capital; (c) it is also, due to Ana Rebelo Fernandes Mendonça, in addition to the 7,000,000 shares of Altri - SGPS, SA held by the company Promo - SGPS, SA mentioned in (b) also 1,162,000 actions of Altri - SGPS, SA held by the company Promendo – Promoções Empresariais SA, for which she is manager and shareholder, holder of 68% of their capital. Thus, in legal terms, are considered attributable to Ana Rebelo Fernandes Mendonça, a total of 14,893,891 shares, representing 14.52% of the capital and voting rights of Altri - SGPS, SA.

Altri was not informed of any participation exceeding 20% of the voting rights. DECLARATION OF RESPONSIBILITY

The members of the Board of Directors of Altri, S.G.P.S., S.A. declare that they assume responsibility for this information and affirm that the items included herein are true and that, to the best of their knowledge, there are no omissions. As required by article 21 of Decree-Law 411/91 of 17 October, the Board of Directors informs that there are no overdue debts to the State, namely with respect to Social Security. CLOSING REMARKS The Board of Directors concludes by expressing a vote of thanks to the Personnel of the Altri Group for their dedication and effort, and also wishes to express its’ thanks to the other Corporate Boards and to the Financial Institutions that co-operated with the Group. Porto, 28 April 2009 The Board of Directors Paulo Jorge dos Santos Fernandes – President João Manuel Matos Borges de Oliveira Pedro Macedo Pinto de Mendonça Domingos José Vieira de Matos Laurentina da Silva Martins

Statement Under the terms of Article 245, paragraph 1, c) of the Securities Code The signatories individually declare that, to their knowledge, the Management Report, the Individual Financial Statements prepared in accordance with generally accepted accounting principles in Portugal and the Consolidated Financial Statements prepared meeting the standards of the applicable International Financial Reporting Standards as adopted by the European Union, and other accounting documents required by law or regulation, giving a truthful (fairly) and appropriate image, in all material respects, of the assets and liabilities, financial position and the consolidated and individual results of Altri, SGPS, S.A. (“Altri”) at 31 December 2008 and that the Management Report faithfully describes the business evolution and position of Altri and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties that they face. Porto, 28 April 2009 Paulo Jorge dos Santos Fernandes President of the Board of Directors João Manuel Matos Borges de Oliveira Member of the Board of Directors Pedro Macedo Pinto de Mendonça Member of the Board of Directors Domingos José Vieira de Matos Member of the Board of Directors Laurentina da Silva Martins Member of the Board of Directors

ALTRI, SGPS, S.A.

CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2008 AND 2007(Translation of financial statements originally issued in Portuguese – Note 42)

(Amounts expressed in Euro)

ASSETS Notes 31.12.2008 31.12.2007NON CURRENT ASSETS:Biological assets 9 75.879.431 61.757.351Tangible assets 6 473.140.189 314.751.323Goodwill 7 269.323.108 270.523.604Intangible assets 8 538.237 967.621Investments in associated companies 4.2 17.909.611 11.481.318Investments available for sale 4.3 780.330 882.572Other non current assets 16 397.414 117.767Deferred tax assets 10 10.983.234 11.925.730

Total non current assets 848.951.554 672.407.286

CURRENT ASSETS:Inventories 9 57.613.288 70.235.470Customers 11 57.819.150 88.593.128Other debtors 12 14.749.641 28.215.022State and other public entities 13 24.418.762 29.362.081Other current assets 14 10.127.859 4.877.667Derivatives 26 12.546.735 3.748.671Investments recorded at fair value through profit and loss 4.4 747.450 1.280.512Cash and cash equivalents 15 74.300.279 135.049.790Assets classified as held for sale or in discontinuation 4.5 13.576.029 22.349.034

Total current assets 265.899.193 383.711.375

Total assets 1.114.850.747 1.056.118.661

SHAREHOLDERS' FUNDS AND LIABILITIES 31.12.2008 31.12.2007

SHAREHOLDERS' FUNDS:Share capital 17 25.641.459 25.641.459Legal reserve 17 1.630.523 1.527.560Other reserves 17 54.156.623 55.639.142Consolidated net profit 4.668.149 35.193.702Total shareholders' funds attributable to the parent company's shareholders 86.096.754 118.001.863

Minority interests 18 283.991 274.494

Total Shareholders' funds 86.380.745 118.276.357

LIABILITIES:NON CURRENT LIABILITIES:Bank loans 19 150.015.292 207.729.419Other loans 19 521.270.017 327.280.808Other non current creditors 21 491.190 349.073Other non current liabilities 22 1.513.306 1.396.405Deferred tax liabilities 10 3.914.691 1.884.051Provisions 20 5.107.335 4.817.457

Total non current liabilities 682.311.831 543.457.213

CURRENT LIABILITIES:Bank loans 19 51.886.464 80.005.517Other loans - short term 19 110.996.123 134.992.560Suppliers 23 58.901.992 43.289.485Other current creditors 24 70.905.701 53.281.583State and other public entities 13 3.062.921 14.781.864Other current liabilities 25 38.487.310 39.403.914Derivatives 26 6.059.446 4.183.446Liabilities associated with assets classified as held for sale or in discontinuation 4.5 5.858.214 24.446.722

Total current liabilities 346.158.171 394.385.091

Total shareholders' funds and liabilities 1.114.850.747 1.056.118.661

The accompanying notes form an integral part of the consolidated financial statements.

The Board of Directors

ALTRI, SGPS, S.A.

CONSOLIDATED STATEMENTS OF PROFIT AND LOSS BY NATURESFOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007

(Translation of financial statements originally issued in Portuguese – Note 42)(Amounts expressed in Euro)

Notes 31.12.2008* 31.12.2007* 31.12.2007Continuing operations

Operating incomeSales 36 253.154.116 278.758.121 403.612.867Services rendered 36 2.325.100 1.763.469 5.873.101Other operating income 32 24.694.996 7.446.168 9.849.716

Total operating income 280.174.212 287.967.758 419.335.684Operating expenses

Cost of sales 9 79.542.865 90.882.672 154.777.850External supplies and services 86.636.886 76.824.375 104.594.086Payroll expenses 30.924.372 31.972.472 47.417.599Amortisation and depreciation 6 and 8 28.820.774 23.127.987 26.537.622Provisions and impairment losses 20 5.822.688 643.596 2.426.988Other operating expenses 33 8.717.661 6.562.708 7.803.786

Total operating expenses 240.465.246 230.013.810 343.557.931Operating profit 39.708.966 57.953.948 75.777.753

Gains and losses related with assets classified as held for sale 4.5 (251.693) 187.820 187.820Gains and losses in associated companies 34 (1.074.707) (429.249) (429.249)Gains and losses in other investments 34 (520.597) 619.059 619.059Financial expenses 34 (46.375.356) (36.158.785) (39.085.833)Financial income 34 10.775.865 3.859.506 5.245.717

Profit before income tax 2.262.478 26.032.299 42.315.267

Income tax 10 1.894.609 (5.045.381) (7.059.232)Net profit 4.157.087 20.986.918 35.256.035

Attributable to:Parent company's shareholders 35 4.109.378 20.924.585 35.193.702Minority interests 18 47.709 62.333 62.333

Discontinued operations

Profit for the year from discontinued operations 4.5 and 5 558.771 14.269.117

Attributable to:Parent company's shareholders 4.5 and 5 558.771 14.269.117Minority interests - -

Consolidated net profit 4.715.858 35.256.035 35.256.035

Attributable to:Parent company's shareholders 4.668.149 35.193.702 35.193.702Minority interests 18 47.709 62.333 62.333

4.715.858 35.256.035 35.256.035

Earnings per share:Continuing operations

Basic 35 0,04 0,20Diluted 35 0,04 0,20

Continuing and discontinued operationsBasic 35 0,05 0,34 0,34Diluted 35 0,05 0,34 0,34

* Considering the steel and storage systems operating unit in discontinuation (Note 5)



ALTRI, S.G.P.S., S.A.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007

(Translation of financial statements originally issued in Portuguese – Note 42)


Attributable to the parent company's shareholders

Share capital Legal reserve Other reserves Net profit TotalMinority interests

Total shareholders'

funds

NotesHedging reserves

Conversion reserves Others

Balance as of 1 January 2007 25.641.459 182.597 (3.396.295) (141.249) 42.578.635 20.843.789 85.708.936 290.356 85.999.292Appropriation of the consolidated net profit of 2006:

Transfer to legal reserves and retained earnings - 1.344.963 - - 14.370.534 (15.715.497) - - -Distributed dividends 38 - - - - - (5.128.292) (5.128.292) - (5.128.292)

Change in reserves:Conversion reserves - - - (232.079) - - (232.079) - (232.079)Hedging reserves - - 2.464.893 - - - 2.464.893 - 2.464.893Others - - - - (5.297) - (5.297) - (5.297)

Acquisition of additional share capital of Celtejo - Empresa de Celulose do Tejo, S.A. 5 - - - - - - - (78.195) (78.195)Net consolidated profit for the

year ended 31 December 2007 - - - - - 35.193.702 35.193.702 62.333 35.256.035Balance as of 31 December 2007 25.641.459 1.527.560 (931.402) (373.328) 56.943.872 35.193.702 118.001.863 274.494 118.276.357

Balance as of 1 January 2008 25.641.459 1.527.560 (931.402) (373.328) 56.943.872 35.193.702 118.001.863 274.494 118.276.357Appropriation of the consolidated net profit of 2007:

Transfer to legal reserves and retained earnings - 102.963 - - 29.962.447 (30.065.410) - - -Distributed dividends 38 - - - - - (5.128.292) (5.128.292) - (5.128.292)

Change in reserves:Conversion reserves - - - (195.568) - - (195.568) - (195.568)Hedging reserves - - 8.225.583 - - 8.225.583 - 8.225.583Others - - - - (348) - (348) - (348)

Demerger of F. Ramada 5 - - - 568.896 (40.043.529) - (39.474.633) - (39.474.633)Acquisition of additional share capital of Celtejo - Empresa de Celulose do Tejo, S.A. 5 - - - - - - - (38.212) (38.212)Net consolidated profit for the

year ended 31 December 2008 - - - - - 4.668.149 4.668.149 47.709 4.715.858Balance as of 31 December 2008 25.641.459 1.630.523 7.294.181 - 46.862.442 4.668.149 86.096.754 283.991 86.380.745



ALTRI , SGPS, S.A.

CONSOLIDATED CASH-FLOW STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2008 AND 2007

(Translation of financial statements originally issued in Portuguese – Note 42)(Amounts expressed in Euro)

Notes

Operating activities:Collections from customers 314.653.759 411.899.754Payments to suppliers (208.830.728) (280.294.763)Payments to personnel (33.101.347) (40.418.855)Other collections/payments relating to operating activities (19.221.783) (26.226.867)Income tax (4.586.460) 48.913.441 (7.572.085) 57.387.184

Cash flow from operating activities (1) 48.913.441 57.387.184

Investment activities:Collections relating to:

Investments 1 21.682.699 3.620.539Tangible assets 1.944.083 3.876.789Borrows 21.640.843 -Investment subsidies 83.849 346.504Interest and similar income 10.543.510 55.894.984 2.388.630 10.232.462

Payments relating to:Investments 1 (8.659.281) (10.033.310)Intangible assets (107.117) (465.863)Tangible assets (245.764.240) (93.941.508)Loans granted - (10.915.196)Biological assets (11.727.778) (266.258.416) (5.591.139) (120.947.016)

Cash flow from investment activities (2) (210.363.432) (110.714.554)

Financing activities:Collections relating to:

Loans obtained 375.033.065 375.033.065 539.303.784 539.303.784Payments relating to:

Lease contracts (167.168) (973.426)Interest and similar costs (40.527.407) (28.467.770)Distributed dividends (5.128.292) (5.128.292)Loans obtained (180.582.847) (226.405.714) (339.927.370) (374.496.858)

Cash flow from financing activities (3) 148.627.351 164.806.926

Cash and cash equivalents at the beginning of the year 2 125.514.513 13.931.279Effect of change in the companies consolidated (39.668.476) 103.678Variation of cash and cash equivalents: (1)+(2)+(3) (12.822.640) 111.479.556Cash and cash equivalents at the end of the year 2 73.023.397 125.514.513

The accompanying notes form an integral part of the consolidated cash flow statement.


2008 2007


NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2008

(Translation of notes originally issued in Portuguese – Note 42)

(Amounts stated in Euro)

1. PAYMENTS/COLLECTIONS RELATING TO INVESTMENTS

During the year ended 31 December 2008 the payments/collections relating to investments were as follows:

Transaction Amount amount Paid/collected Acquisitions EDP – Produção Bioeléctrica, S.A. (a) 7,503,000 7,503,000 Socasca – Recolha e Comércio de Recicláveis, S,A. (b) 5,118,924 337,979 Sosapel – Sociedade Comercial de Sacos de Papel, Lda (c) 2,000 2,000 Celtejo – Empresa de Celulose do Tejo, S,A. (d) 5,539 5,539 Celbi – Celulose da Beira Industrial, S,A. (e) 810,763 810,763 --------------- ---------------- 13,440,226 8,659,281 ========= ========= Sales Ródão Power – Energia e Biomassa do Ródão, S.A. 21,657,703 21,657,703 Investments available for sale 24,996 24,996 --------------- ---------------- 21,682,699 21,682,699 ========= ========= (a) – Increase of loans; (b) – Until 31 December 2007, it had been paid the amount of 4,470,945 Euro; (c) – Acquisition of a part representing 20% of the share capital; (d) – Acquisition of an additional part representing 0.013% of the share capital; (e) – Additional payment regarding a price adjustment . 2. BREAKDOWN OF CASH AND CASH EQUIVALENTS Cash and its equivalents presented in the consolidated statement of cash flows and the reconciliation

between that amount and the amounts shown in the balance sheet as of those dates, are as follows: 31-12-2008 31-12-2007 Cash 24,911 671,914 Bank deposits 74,275,368 134,377,876 --------------- ----------------- 74,300,279 135,049,790 --------------- ----------------- Bank overdrafts (1,276,882) (9,535,277) --------------- ----------------- 73,023,397 125,514,513 ========= ==========


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF 31 DECEMBER 2008



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1.

INTRODUCTORY NOTE

Altri, SGPS, S.A. (“Altri” or “Company”) was incorporated as of 1 March 2005, has its head-office located at Rua General Norton de Matos, 68, r/c – Porto, Portugal and its shares are listed in the Lisbon Euronext Stock Exchange. Its main activity is the management of investments.

Altri was incorporated as a result of the reorganization process of Cofina, SGPS, S.A. through the demerger of

the investment previously held by this group in Celulose do Caima, SGPS, S.A. (representing 97.23% of this company’s share capital), under a simple demerger operation predicted in item 1.a), article 118 of the Commercial Companies Code (“Código das Sociedades Comerciais”). The relevant date for the production of juridical and accounting effects of this operation was 1 March 2005. During the year ended at 31 December 2008, Altri’s activity was affected by a business reorganization, as opportunely disclosed public, which involved the demerger process of the equity share held at F. Ramada - Aços e Indústrias, S.A., representative of the voting rights of the mentioned company. The restructuring involved a simple demerger operation predicted on item 1.a), article 118, of the Commercial Companies Code (“Código das Sociedades Comerciais”), for the constitution of a new company – F. Ramada – Investimentos, SGPS, S.A. (“Ramada Investimentos”). Due to this process, the company’s patrimonial share related to the equity holdings management business unit for the sector of steel and storage systems was demerged to Ramada Investimentos, including all other resources (such as human resources, assets and liabilities) related to those companies activities. Demerger public deed was signed at 16 April 2008 and the relevant date for the production of effects of this operation was 1 June 2008. Altri is the parent company of a group of companies listed in Note 4 known as Altri Group, and its main activity is the management of investments mainly in the industrial sector. The Group focus its operations in the production of pulp and paper through the Celbi, Celtejo and Caima Groups.

With the demerging operation of F. Ramada Group, the current activity of Altri Group focuses on the production of bleached paper pulp of eucalyptus through three production units (Celbi in Figueira da Foz, Caima in Constância do Ribatejo and Celtejo in Vila Velha de Ródão). Due to this new reality of Altri Group, the Board of Directors believe that there is only one business segment (production and commercialization of bleached paper pulp from eucalyptus) for which the segmental information mentioned in Note 36 is limited by this. The consolidated financial statements of Altri Group are presented in Euro, which is the currency used by the Group in its operations and considered as the functional currency. The operations of foreign companies whose functional currency isn’t the Euro are not included in the consolidated financial statements in accordance with the policy set out in Note 2.2.d).

2.

BASIS OF PRESENTATION AND MAIN ACCOUNTING POLICIES

The basis of presentation and main accounting policies adopted in the preparation of the accompanying consolidated financial statements are as follows:

2.1

BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, issued by the International Accounting Standards Board ("IASB"), and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") or by the previous Standing Interpretations Committee ("SIC"), as adopted by the European Union. Interim financial statements are presented quarterly in accordance with the rules imposed by CMVM (“Comissão do Mercado de Valores Mobiliários”).






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The accompanying consolidated financial statements have been prepared from the books and accounting records of the companies included on the consolidation (Note 4) adjusted to reflect the recognition and measurement principles of IFRS on a going concern basis and under the historical cost convention, except for some financial instruments which are stated at fair value.

New standards and their impact in the consolidated financial statements

In 2007 it was endorsed by the European Union, the IFRS 8 – Operating Segments, which is mandatory for economic periods starting after 1 January 2009. During 2008 and up to the financial statements approval date, the following Standards and Interpretations, have been endorsed by European Union:

Effective Date

With mandatory application in 2008 IAS 39/IFRS 7 - Amendments: Reclassification of financial instruments 01-07-2008 IFRIC 13 - Customer loyalty programmes 01-07-2008 IFRIC 14 - IAS 19 The limit on defined benefit asset, minimum funding requirements and

their interaction 01-01-2008 With mandatory application after 2008

IFRS 8 - Operating segments 01-01-2009 IFRS 2 - Amendments: Share-based payments 01-01-2009 IAS 1 - Amendments: Fist-time adoption 01-01-2009 IAS 23 - Amendments: Borrowing costs 01-01-2009 IAS 32/IAS 1 - Amendments: Puttable financial instruments and obligations arising on

liquidation 01-01-2009

Amendments to International Financial Reporting Standards (2007) 01-01-2009 IFRS 1/IAS 27 - Cost of an investment in a subsidiary, jointly controlled entity or associated 01-01-2009 IFRIC 12 - Service concession arrangements 26-03-2009 The entry into force in 2008 of the above mentioned standards had no relevant impacts in the attached consolidated financial statements. It is not expected to arise material impacts to the Group consolidated statements from the application of the above mentioned standards. As at this date, the following standards and interpretations have already been issued but have not yet been endorsed by the European Union:

Effective Date

Amendments to IFRS 3 – Business combinations 01-07-2009 Amendments to IFRS 1 – First-time adoption of International Financial Reporting

Standards 01-07-2009

Amendments to IAS 27 - Consolidated and separate financial statements 01-07-2009 Amendments to IAS 39 – Qualifying hedging instruments 01-07-2009 Amendments to IAS 39 – Reclassification of financial assets 01-07-2009 Amendments to IFRS 7 – Financial Instruments: Disclosures 01-01-2009 IFRIC 15 – Agreements for the construction of real estate 01-01-2009 IFRIC 16 – Hedges of a net Investments in a foreign operation 01-10-2008 IFRIC 17 – Distributions of non-cash assets to owners 01-07-2009 IFRIC 18 – Transfer of assets from customers 01-07-2009

The future application of the standards mentioned above, which have not been yet endorsed by de European Union, is not expected to produce material impacts to the consolidated financial statements, except from the amendement to IFRS 3, which will represent significant changes on the goodwill calculation.

The accounting policies used in the preparation of the consolidated financial statements are consistent with those used in the preparation of the financial statements for the period ended 31 December 2007.






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2.2

CONSOLIDATION POLICIES

The consolidation policies adopted by the Group in the preparation of the consolidated financial statements are as follows:

a)

Investments in group companies

Investments in companies in which the Group owns, directly or indirectly, more than 50% of the voting rights at the Shareholders’ General Meeting and is able to control the financial and operating policies so as to benefit from its activities (definition of control normally used by the Group), are included in the consolidated financial statements by the full consolidation method. Equity and net profit attributable to minority shareholders are shown separately, under the caption “Minority interests”, in the consolidated balance sheet and in the consolidated statement of profit and loss. Companies included in the consolidated financial statements by the full consolidation method are listed in Note 4.1.

When losses attributable to the minority interests exceed the minority interest in the equity of the subsidiary, the excess and any further losses attributable to the minority interests are charged against the majority interests except to the extent that the minority shareholders have a binding obligation and are able to cover such losses. If the subsidiary subsequently reports profits, such profits are allocated to the majority interests until the minority’s share of losses previously absorbed by the Group has been recovered.

Under concentration processes, occurred after the transition date to International Financial Reporting Standards as adopted by the European Union (1 January 2004) the assets and liabilities of each subsidiary are measured at their fair value at the date of acquisition according to IFRS 3 - “Business Combinations”. Any excess on the cost of acquisition over the fair value of the identifiable net assets and liabilities acquired is recognised as goodwill. Any excess of the fair value of the identifiable net assets and liabilities acquired over its cost is recognised as income in the profit and loss statement of the period of acquisition, after reassessment of the estimated fair value. Minority interests are presented according to their share in the fair value of the identifiable assets and liabilities of the acquired subsidiaries. The results of subsidiaries acquired or disposed during the period are included in the consolidated statement of profit and loss from the effective date of acquisition or up to the effective date of disposal, respectively. Adjustments to the financial statements of Group companies are performed, whenever necessary, in order to adapt its accounting policies to those used by the Group. All intercompany transactions, balances and distributed dividends are eliminated during the consolidation process. Whenever the Group has, in substance, control over other entities created for a specific purpose (“Special Purpose Entities”), even if no share capital interest is directly held in those entities, these are consolidated by the full consolidation method.

b)

Investments in associated companies

Investments in associated companies (companies where the Group has significant influence but has no control over the financial and operating decisions - usually corresponding to holdings between 20% and 50% in a company’s share capital) are accounted for in accordance with the equity method. According to the equity method, the investments in associated companies are initially recorded at acquisition cost, which is adjusted proportionally to the Group’s corresponding share capital, as at the acquisition date or as at the date of the first adoption of the equity method. On a yearly basis, investments are adjusted in accordance with the Group’s participation in the associated company’s net income. Additionally, the dividends of the subsidiary are recorded as a reduction in the investment’s book value and the Group’s proportion in the changes occurred in the associated company’s equity are recorded as a change in the Group’s equity.






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Any excess of the cost of acquisition over the Group’s share in the fair value of the identifiable net assets acquired is recognised as goodwill, which is included in the caption “Investments in associated companies”. If that difference is negative it is recorded as a gain in the caption “Gains and losses in associated companies” after reassessment of the fair value of the identifiable assets and liabilities acquired. An evaluation of investments held in associated companies is performed whenever there are signs of impairment in those investments. Impairment losses are recorded in the statement of profit and loss for the period. When those losses recorded in previous periods vanish, they are reverted in the statement of profit and losses for the period. When the Group’s share of losses of the associated company exceeds the investment’s book value, the investment is recorded at nil value, except to the extent of the Group’s commitments to the associate. In such case, the Group records a provision to cover those commitments. Unrealised gains arising from transactions with associated companies are eliminated to the extent of the group’s interest in the associate against the investment held.

Unrealised losses are eliminated but only to the extent that there is no evidence of impairment of the asset transferred.

Investments in associated companies are listed in Note 4.2.

c)

Goodwill

In concentration processes, the difference between the acquisition cost of the investment in group and associated companies and the fair value of the identifiable assets and liabilities of those companies as at the date of acquisition is recorded, when positive, in the balance sheet captions “Goodwill” and “Investments in associated companies”, respectively. The excess of the cost of acquisition of investments in foreign companies over the fair value of their identifiable assets and liabilities as at the date of acquisition is calculated using the local currency of each of those companies. Translation to the Group’s currency (Euro) is made using the exchange rate as at the balance sheet date. Exchange rate differences arising from this translation are recorded under the equity caption “Conversion reserves”. Goodwill transferred through the demerger process (Introductory Note) arising from acquisitions made prior to the date of transition to IFRS (1 January 2004) is stated using the carrying amounts in accordance with generally accepted accounting principles in Portugal and was subject to impairment tests. The impact of these adjustments was recorded in the caption “Other reserves”, in accordance with IFRS 1. Goodwill arising from the acquisition of foreign companies was recalculated retrospectively using the local currency of each subsidiary.

Goodwill is not amortised, but is subject to impairment tests on an annual basis. Impairment losses identified in the period are recorded in the statement of profit and loss under the caption “Provisions and impairment losses”, and may not be reversed.

The differences between the acquisition cost of group companies and the fair value of the identifiable assets and liabilities of those companies at the date of acquisition, if negative, are recorded, at the date of acquisition and after reassessment of the fair value of the identifiable assets and liabilities acquired, as gains in the profit and loss statement. The Group tests on an annual basis the impairment of goodwill. The recoverable amount of the cash-generating unities is computed based on the value of use. This computation implies the use of assumptions based on estimates of future events which may occur differently from expected.






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d)

Translation of financial statements of foreign companies

Assets and liabilities in the financial statements of foreign entities are translated to Euro using the exchange rates in force at the balance sheet date. Profit and loss and cash flows are converted to Euro using the average exchange rate for the period. The exchange rate differences originated are recorded in the equity caption “Conversion reserves”.

Goodwill and adjustments to the fair value arising from the acquisition of foreign subsidiaries are recorded as assets and liabilities of those companies and translated to Euro at the balance sheet date exchange rate.

Whenever a foreign company is sold, the accumulated exchange rate differences are recorded in the statement of profit and losses as a gain or loss associated with the sale.

2.3

MAIN ACCOUNTING POLICIES

The main accounting policies used in the preparation of the consolidated financial statements are as follows:

a)

Intangible assets

Intangible assets are recorded at cost, net of depreciation and accumulated impairment losses. Intangible assets are only recognised if it is likely that future economic benefits will flow to the Group, are controlled by the Group and if its cost can be reliably measured. Development costs are recognised as an intangible asset if the Group has proven technical feasibility and ability to finish the development and to sell/use such assets and it is likely that those assets will generate future economic benefits. Development costs which do not fulfil these conditions are recorded as an expense in the period in which they are incurred. Internal costs related with maintenance and development of software are recorded as expenses in the statement of profit and loss for the period in which they are incurred, except when these costs are directly attributable to projects for which the existence of future economic benefits is likely. Being this the case, they are capitalized as intangible assets. Amortisation is calculated on a straight line basis, as from the date the asset is first used, over its expected useful life (usually 3 to 5 years).

b)

Tangible assets

Tangible assets acquired until 1 January 2004 (IFRS transition date) and transferred to Altri Group through the demerger (Introductory Note), are recorded at deemed cost, which corresponds to its acquisition cost, or its acquisition cost revalued in accordance with generally accepted accounting principles in Portugal until that date, net of accumulated amortisation and accumulated impairment losses. Tangible assets acquired after that date are recorded at acquisition cost, net of depreciation and accumulated impairment losses. Depreciation is calculated on a straight line basis, as from the date the asset is first used, over the expected useful life for each group of assets.






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The depreciation rates used correspond to the following estimated useful lives: Years Land and natural resources 20 to 50

Buildings and other constructions 10 to 50 Plant and machinery 2 to 15 Vehicles 2 to 10 Tools 4 to 14 Office equipment 2 to 10 Other tangible assets 3 to 10 Maintenance and repair costs related to tangible assets which do not increase the useful life or result in

significant benefits or improvements in tangible fixed assets are recorded as expenses in the period they are incurred.

Tangible assets in progress correspond to fixed assets still in construction and are stated at acquisition

cost, net of impairment losses. These assets are depreciated from the date they are concluded or ready to be used.

Gains or losses arising from the sale or disposal of tangible assets are calculated as the difference

between the selling price and the asset’s net book value as at the date of its sale/disposal, and are recorded in the statement of profit and loss under the captions “Other operating income” or “Other operating expenses”, respectively.

c)

Lease contracts

Classifying a lease as financial or as operational depends on the substance of the transaction rather than the form of the contract.

Lease contracts are classified as (i) a finance lease if the risks and rewards incidental to ownership lie with

the lessee and (ii) as an operating lease if the risks and rewards incidental to ownership do not lie with the lessee.

Tangible fixed assets acquired under financial lease contracts and the corresponding liabilities are recorded

in accordance with the financial method. Under this method, the cost of the fixed assets and the corresponding liability are reflected in the balance sheet. In addition, interests included in the lease instalments and depreciation of the fixed assets, calculated as explained in Note 2.3.b), are recorded in the statement of profit and loss of the period to which they apply.

The operational lease instalments on assets acquired under long-term rental contracts are recognized in

full as expenses in the period to which they refer to.

d)

Subsidies

Subsidies for personnel training programmes or production support are recorded in the statement of profit and loss caption “Other operating income” when attributed, independently of when they are received.

Non-repayable subsidies obtained to finance investment in tangible fixed assets are recorded as “Other non

current liabilities” and “Other current liabilities” corresponding to the instalments repayable in the long and short term, respectively. These subsidies are recognised in the statement of profit and loss in accordance with the depreciation of the related tangible fixed assets.

e)

Impairment of assets, except for goodwill

Assets are assessed for impairment at each balance sheet date and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.






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Whenever the carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the statement of profit and loss under the caption “Provisions and impairment losses”.

The recoverable amount is the higher of an asset’s net selling price and its value of use. The net selling

price is the amount obtainable from the sale of an asset in an arm’s length transaction less the costs of the disposal. The value of use is the present value of estimated future cash flows expected to arise from the continued use of an asset and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if not possible, for the cash-generating unit to which the asset belongs.

Reversal of impairment losses recognised in prior years is recorded when the Group concludes that the

impairment losses previously recognised for the asset no longer exist or has decreased. The reversal is recorded in the statement of profit and loss as “Other operating income”. However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognised to the extent it does not exceed the carrying amount that would have been determined (net of depreciation and amortisation) had no impairment loss been recognised for that asset in prior years.

f)

Borrowing costs

Borrowing costs are recognised as expense in the statement of profit and loss for the period in which they are incurred, in an accrual basis.

When the Company contracts loans to specifically finance capital assets, the corresponding interests are

capitalized, being part of the cost of the asset. The capitalization of these interests starts after the beginning of the preparation of the activities of construction, and ceases when the asset is ready for use or in case the project is suspended.

g)

Inventories

Raw, subsidiary and consumable materials are stated at acquisition average cost, deducted from quantity discounts granted by suppliers, which is lower than its market value.

Finished and intermediate goods, sub-products and work in progress are stated at production cost, which

includes the cost of raw materials, direct labour and production overheads, which is lower than market value. Therefore, harvested wood owned by the Group is valued at production cost, which includes the costs incurred with the cutting, gathering and transport of harvested wood, as well as the accumulated cost of plantations, maintenance and administrative expenses in proportion to the harvested area.

When necessary the Group companies record impairment losses to reduce inventories to its net realisable

or market value.

h)

Biological assets

Plantations owned by the Group are classified in the caption “Biological assets”. Costs incurred with the acquisition of plantations and plantations made, and costs incurred with its development, conservation and maintenance are included in this caption. The cost of wood is transferred to production cost when the wood is harvested. The cost of wood harvested is determined based on the specific cost of each plantation attributed to each harvesting, which also includes the costs incurred on each plantation since the last harvesting. The Group records, as costs of the period, the accumulated cost of plantations, maintenance and administrative expenses in proportion to the area harvested during the period.

The Board of Directors decided not to record the biological assets at their its value for considering that,

bearing in mind the type of assets being evaluated, the computation depends on assumptions which might not be accurately determined and consequently the fair value might not be reliably measured. However, the Board of Directors believes, based in some indicators, that the acquisition cost of the biological assets is close to its fair value.






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i)

Provisions

Provisions are recognised when, and only when, the Group has an obligation (legal or constructive) arising from a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of that obligation. Provisions are reviewed and adjusted at each balance sheet date to reflect the best estimate as of that date.

Restructuring provisions are recorded by the Group whenever a formal and detailed restructuring plan exists and has been communicated to the involved parties.

j)

Pension complements

Some Group companies have assumed commitments to provide pension complements to employees retiring due to age or disability. To cover these liabilities there have been created autonomous pension funds, which annual charges, computed in accordance with actuarial analysis, are recorded in the statement of profit and loss in accordance with IAS 19 – “Employee benefits”. These liabilities were calculated under the “Projected unit credit” method under the actuarial and financial assumptions deemed to be the most adequate (Note 28).

k)

Financial instruments

i)

Investments

Investments held by the Group are divided into the following categories:

Investments held to maturity

, are classified as non-current assets unless they mature within 12 months of the balance sheet date. The investments classified as held to maturity are non-derivative assets with defined or determinable payment dates, have defined maturity and the Group has the intention and ability to maintain them until the maturity date.

Investments measured at fair value through profit and loss

are classified as current assets. The purpose of these investments is to obtain short term profits.

Investments available for sale

are all the other investments that are not classified as held to maturity or measured at fair value through profit and loss, being classified as non current assets.

Investments are initially measured at cost, which is the fair value of the price paid, including transaction costs if related with held to maturity and available for sale investments. Investments available for sale and investments measured at fair value through profit and loss are subsequently measured at fair value by reference to the market value at the balance sheet date without any deduction for transaction costs which may be incurred until its sale. Investments in equity instruments which are not listed on a stock exchange market and whose fair value cannot be reliably measured are stated at cost net of impairment losses. Investments held to maturity are recorded at amortised cost, using the effective interest method.

Gains or losses arising from a change in the fair value of available for sale investments are recognised under the equity caption “Fair value reserve” included in caption “Other reserves”, until the investment is sold or disposed, or until it is determined to be impaired, at which time the cumulative loss previously recognised in equity is transferred to profit and loss account for the period.

All purchases and sales of investments are recorded on its trade date, independently of the liquidation date.






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ii)

Accounts receivable

Receivables are stated at nominal value less impairment losses so that those receivables reflect its net realisable value.

Impairment is recognised if there is objective and measurable evidence that, as a result of one or

more events that occurred, the balance will not be fully received. Therefore, each group company takes into consideration market information which shows the client default in their responsibilities’, as well as historic information on outstanding debts not received.

Recognized Impairment losses equals to the difference between the nominal value of the receivable

balance and the correspondent present value of future estimated discounted cash-flows at the initial effective interest rate; when the payment is expected to occur in a period less than a year, the rate is considered null.

iii)

Loans

Loans are recorded as liabilities at nominal value, net of up-front fees and commissions directly related to the issuance of those instruments. Financial expenses are calculated based on the effective interest rate and are recorded in the statement of profit and loss on an accrual basis. The portion of the effective interest charge relating to up-front fees and commissions, if not paid in the period, is added to the book value of the loan.

Assets and liabilities are compensated and presented for its net amount as long as there is the right

for compulsory fulfilment of compensation and the Board of Directors intends to realise them on a net basis or realise the asset and simultaneously settle the liability.

iv)

Accounts payable

Non interest bearing accounts payable are stated at nominal value. v)

Derivatives

Altri uses hedge derivatives for the management and hedging of its financial risks.

Derivatives classified as cash flow hedge instruments are used by the Group mainly to hedge interest rate fluctuation and to fix pulp price. The index, the computation conventions, the interest rate hedging instruments are similar to the ones established for the underlying loans and therefore are qualified as perfect hedging. The derivatives most used by the Group are the price indexations of pulp using future contracts.

The Group’s criteria for classifying a derivative instrument as a cash flow hedge instrument are:

- the hedge transaction is expected to be highly effective in offsetting changes in cash flows

attributable to the hedged risk; - the effectiveness of the hedge can be reliably measured; - there is adequate documentation of the hedging relationships at the inception of the hedge; - the forecasted transaction that is being hedged is highly probable.

The cash flow hedge instruments are recorded at its fair value. Changes in the fair value of these instruments are recorded in assets or liabilities, against the corresponding entry under the equity caption “Hedging reserves”, and transferred to the statement of profit and loss when the operation subjected to hedging affects the net profit.






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The determination of the fair value of these financial instruments is made with informatic systems of derivative instruments valuation and had, on its basis the actualization, for the balance sheet date, of the future fix and variable leg cash flows of the derivative instrument.

Hedge accounting of derivative instruments is discontinued when the instrument matures or is sold. Whenever a derivative instrument can no longer be qualified as a hedging instrument, the fair value differences recorded and deferred in equity under the caption “Hedging reserves” are transferred to profit and loss of the period or to the carrying amount of the asset that resulted from the hedged forecast transaction. Subsequent changes in fair value are recorded in the income statement. When embedded derivatives exist, they are accounted for as separate derivatives when the risks and the characteristics are not closely related to economic risks and characteristics of the host contract and when these are not stated at fair value with gains and losses not realizable are recorded in the profit and loss statement. When derivative instruments, although specifically contracted to hedge financial risks, do not fulfil the requirements listed above to be classified and accounted as hedge instruments, the changes in fair value are directly recorded in the profit and loss statement, as financial results.

vi)

Financial liabilities and Equity instruments

Financial liabilities and equity instruments are classified and accounted for based upon its contractual substance. Equity instruments are those that represent a residual interest upon the Group’s net assets and are recorded by the amount received, net of costs incurred with its issuance.

vii)

Own shares

Own shares are recorded at acquisition cost as a deduction to equity captions. Gains or losses on its sale are recorded in the equity caption “Other reserves”.

viii)

Discounted bills and accounts receivable transferred to factoring companies

Only when the assets´ cash flows contractual right has expired or when the risks and benefits inherent to those assets property are transferred to a third entity the Group derecognise the financial assets of its financial statements. If the Group retains substantially the risks and benefits inherent to the property of such assets, the Group continues to recognize them in its financial statements, by recording in the caption “Loans” the monetary counterparty for the conceded assets. In consequence, the costumers balances formed by non outstanding discounted bills and accounts receivable transferred to factoring companies as of the balance sheet date, with exception of the non-appealing factoring operations are recognized in the Group’s financial statements until the moment of its collection.

ix)

Cash and cash equivalents

Cash and cash equivalents include cash on hand, cash at banks on demand and term deposits and other treasury applications which reach maturity within less than three months and may be mobilized without significant risk of change in value.

For purposes of the consolidated statement of cash flows, “Cash and cash equivalents” caption also includes bank overdrafts, which are included in the balance sheet caption “Bank loans”.






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x)

Assets classified as held for sale or in discontinuation

The assets and liabilities are classified as held for sale or in discontinuation, when their realization is made not by its use but by its sale. The Group classifies assets and liabilities in this caption when exists a high probability of its sale becomes effective and the assets and liabilities are available for immediate sale. The Board of Directors is committed in the sale of the assets and liabilities recorded in this caption, and is their understanding that this sale will be completed in the next twelve months.

The assets classified as held for sale or in discontinuation are valued at the lower of its accounting value at the date of the sale decision and its fair value deducted of their selling costs.

l)

Contigent assets and liabilities

Contingent assets are possible assets arising from past events and whose existence will be confirmed, or not, by uncertain future events not controlled by the Company.

Contingent assets are not recorded in the consolidated financial statements but only disclosed when the

existence of future economic benefits is likely. Contingent liabilities are defined by the Company as (i) possible obligations that arise from past events and

which existence will be confirmed, or not, by one or more occurrences of uncertain future events not controlled by the Company, or (ii) present obligations that arise from past events but that are not recorded because it is unlikely that an outflow of resources occurs to settle the obligation or the obligation amount can not be reliably measured.

Contingent liabilities are not recorded in the consolidated financial statements, being disclosed, unless the

probability of a cash outflow is remote, in which case no disclosure is made.

m)

Income tax

Income tax for the period is determined based on the taxable results of the companies included in the consolidation and takes into consideration deferred taxation.

Current income tax is determined based on the taxable results of the companies included in the

consolidation, in accordance with tax regulations in force at the location of the head office of each Group company, considering the annual estimated income tax rate.

For some of the companies included in the consolidation of Altri Group by the full consolidation method, the

income tax is determined in accordance with article 63 of the Corporate Income Tax Code (Código do Imposto sobre o Rendimento das Pessoas Colectivas), under the special regime of taxation of groups of companies.

Deferred taxes are computed using the balance sheet liability method and reflect the timing differences

between the amount of assets and liabilities for accounting purposes and the correspondent amounts for tax purposes. Deferred taxes are computed using the tax rate that is expected to be in force at the time these temporary differences are reversed.

Deferred tax assets are only recorded when there is reasonable expectation that sufficient taxable profits

will arise in the future to allow such deferred tax assets to be used. At the end of each period the company reviews its recorded and unrecorded deferred tax assets which are reduced whenever its realisation ceases to be likely, or recorded if it is likely that taxable profits will be generated in the future to enable its recovery.

Deferred tax assets and liabilities are recorded in the statement of profit and loss, except if they relate to

items directly recorded in equity. In these cases the corresponding deferred tax is recorded in the same equity captions.






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n)

Income recognition and accrual basis

Revenue arising from the sale of goods is recognised in the consolidated income statement when (i) the risks and benefits have been transferred to the buyer, (ii) the company retains neither continued management involvement in a degree usually associated with ownership nor effective control over the goods sold, (iii) the amount of the revenue can be measured reasonably, (iv) it is likely that the economic benefits associated with the transaction will flow to the Company, and (v) the costs incurred or to be incurred related with the transaction can be reliably measured. Sales are recorded net of taxes, discounts and other expenses arising from the sale, and are measured at the fair value of the amount received or receivable.

Dividends are recognised as income in the period its distribution is approved.

All other income and expenses are recognised in the period to which they relate, independently of when the amounts are received or paid. Differences between the amounts received and paid and the corresponding income and expenses are recorded in the captions “Other current assets”, “Other current liabilities”, “Other non current assets” and “Other non current liabilities”. When the actual amount of income or expenses is yet unknown, these are recorded based on the best estimate of the Board of Directors of the Group companies.

o)

Balances and transactions expressed in foreign currencies

All assets and liabilities expressed in foreign currencies were translated to Euro using the exchange rates in force on the balance sheet date.

Favourable and unfavourable exchange differences arising from changes in the exchange rates between those prevailing on the dates of the transactions and those in force on the dates of payment, collection or as of the balance sheet date are recorded in the consolidated statement of profit and loss, except the ones related to non monetary values which fair value variation be directly recorded in equity.

p)

Subsequent events

Post balance sheet date events that provide additional information about conditions that existed at the balance sheet date (adjusting events), are reflected in the consolidated financial statements. Post balance sheet date events that provide information about conditions that have only arise after the balance sheet date are considered non adjusting events and are disclosed in the notes to the financial statements, if material.

q)

Segment information

In each period, the Company identifies the most adequate segment division taking into consideration the business areas in which the Group is present.

Information regarding the business segments identified is included in Note 36. r)

Jugments and estimates

The most significant accounting estimates reflected in the consolidated income statements include:

a) Useful lives of the tangible and intangible assets; b) Impairment analysis of goodwill and of other tangible and intangible assets; c) Recognition of impairment on assets, namely inventory and account receivables, and provisions; d) Pension Fund responsabilities’ calculation; and e) Fair value of Derivative Financial Instruments.






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Estimates used are based on the best information available during the preparation of consolidated financial statements and are based on best knowledge of past and present events. Although future events are neither controlled by the Group nor foreseeable, some could occur and have impact on the estimates. Changes to the estimates used by the management that occur after the date of these consolidated financial statements, will be recognised in net income, in accordance with IAS 8, using a prospective methodology.

2.4

FINANCIAL RISK MANAGEMENT

Altri´s Group is exposed essentially to the: (i) market risk; (ii) liquidity risk and (iii) credit risk. The main objective of the Board of Directors, on what risk management concerns, is to reduce these risks to a level considered acceptable for the development of the Group activities. The guiding lines of the risk management policy are defined by Altri´s Board of Directors, which determines the acceptable risk limits. The operational concretization of the risk management policy is made by the Board of Directors and by the management of each participated company. a)

Market risk

At this level of market risk, a particular importance is given to interest rate risk, exchange rate risk and variability of the commodities’ price risk. The Group uses derivative instruments on the management of their market risks which is exposed as a way of ensure its hedging and does not use derivative instruments with the objective of negotiation or speculation.

i) Interest rate risk The exposure of the Group to interest rate results of the long term loans constituted, mainly, by debt indexed to Euribor. The Group objective is to limit the cash-flows and results volatility according to its operational activity through the utilization of an adequate combination of fix and variable tax debt. The Group policy allows the use of interest rate derivatives in order to obtain a reduction of the exposure to Euribor variations and not to speculative transactions. Most derivative instruments used by the Group in interest rate management are defined as cash-flow hedging instruments as these configure perfect hedging relations. The index, the computation conventions, the interest rate hedging instruments are similar to the ones established for the underlying loans. Nevertheless, there are some derivative instruments which, although have been contracted with the hedging interest risk objective, do not match with the requirements above defined for the hedging instruments classification. ii) Exchange rates risk The Group is exposed to exchange rates risk in transactions related with the finished goods sales in international markets with different currency from Euro. Whenever The Board of Directors considers necessary to reduce the volatility of their results to the variability of exchange rates the exposition is managed trough forwards programs.






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As of 31 December 2008 and 2007 the balances expresses in USD are as follow:

31.12.2008 31.12.2007

Accounts receivable 6.605.312 15.113.769Accounts payable 7.223 24.717

6.612.535 15.138.486

The Board of Directors considers that eventual changes in exchange rates do not have a significant effect in the consolidated financial statements. iii) Variability risk on commodities’ price By developing its activity in a commodity transactional industry (paper pulp), the Group is particularly exposed to its price fluctuations, with the correspondent impacts in their results. However, in order to manage this risk, paper pulp price fluctuations hedging contracts’ were celebrated by the adequate amounts by the foreseen operations, reducing the volatility of its results.

b)

Liquidity risk

The purpose of liquidity risk management is to ensure, at all times, that the Group has the financial capacity to fulfil its commitments as they become due and to carry on its business activities and strategy trough an adequate financing maturities management. The Group prosecutes an active refinancing policy distinguished by the maintenance of high free and immediate available resources to face short term necessities and the extension or sustenance of the debt maturity in accordance with the predicted cash flows and the Balance leverage capability. The liquidity analysis’ for financial instruments is disclosed next to the respective note to each financial liabilities class. c)

Credit risk

The Group is exposed to the credit risk in its current operational activity. This risk is controlled trough a collecting information system of financial and qualitative information provided by recognized entities that supply information of risks, which allow the assessment of the clients’ viability in the fulfilment of their obligations in order to reduce the credit concession risk. The amounts presented in the balance sheet are net of accumulated impairment losses to doubtful debts which were estimated by the Group; as a result these assets are presented at fair value. The risk credit is limited by the risk concentration management and a strict selection of counterparts as well as the contracting of credit insurances’ to specialized institutions which ensure a significant part of the conceded credit in result of the activity developed by the Group.

3.

CHANGES IN ACCOUNTING POLICIES AND CORRECTION OF MISTAKES

During the period there were no changes in accounting policies and were identified no material mistakes related to previous periods.






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4. INVESTMENTS 4.1 INVESTMENTS IN GROUP COMPANIES

The companies included in the consolidated financial statements by the full consolidation method, its headquarters, percentage participation held and main activity as of 31 December 2008 and 2007, are as follows:

Company Head Office Percentage Held Activity2008 2007

Parent-Company:Altri, SGPS, S.A. Porto Investment management

Caima / Celtejo / Celbi Group

Celulose do Caima, SGPS, S.A. Lisbon 100% 100% Investment management

Caima Indústria de Celulose, S.A. Lisbon 100% 100% Production and commercialisation of pulp

Silvicaima – Sociedade Silvícola do Caima, S.A. Lisbon 100% 100% Sylvan exploration

Caima Energia – Empresa de Gestão e Exploração de Energia, S.A. Lisbon 100% 100% Production of energy

Invescaima – Investimentos e Participações, SGPS, S.A. Lisbon 100% 100% Investment management

Inflora – Sociedade de Investimentos Florestais, S.A. Lisbon 100% 100% Sylvan exploration

Sócasca – Recolha e Comércio de Recicláveis, S.A. Águeda 100% 100% Commercialisation of recycled products

Celtejo – Empresa de Celulose do Tejo, S.A. Vila Velha de Ródão 99.59% 99.58% Production and commercialisation of pulp

CPK – Companhia Produtora de Papel Kraftsack, S.A. (b) Vila Velha de Ródão 99.59% 99.58% Production and commercialisation of paper

Altri - Energias Renováveis, SGPS, S.A. Lisbon 99.59% 99.58% Investment management

Sosapel – Sociedade Comercial de Sacos de Papel, Lda. Vila Velha de Ródão 99.59% 79.66% Commercialisation of pulp

Celbi – Celulose da Beira Industrial, S.A. Figueira da Foz 100% 100% Production and commercialisation of pulp

Celbinave – Tráfego e Estiva SGPS, Unipessoal, Lda. Figueira da Foz 100% 100% Freightage of ships

Viveiros do Furadouro Unipessoal, Lda. Óbidos 100% 100% Production of plants in nurseries and services related with forests and landscapes

Altri, Participaciones Y Trading, S.L. Madrid, Spain 100% 100% Investment management

Altri Sales, S.A. Nyon, Switzerland 100% 100% Commercialisation of pulp

CPK II - Comércio e Indústria, S.A. (d) Vila Velha de Ródão 99.59% - Commercialisation of raw materials and pulp

Pedro Frutícola, Sociedade Frutícola, Lda. (c) Constância 100% - Agriculture production

Captaraíz Unipessoal, Lda. (d) Lisbon 100% - Property bying and selling

Ramada Group

F. Ramada – Aços e Indústrias, S.A. Ovar (a) 100% Steel commercialisation

F. Ramada – Produção e Comercialização de Estruturas Metálicas de Armazenagem, S.A. Ovar (a) 100% Production and commercialisation of storage systems

F. Ramada II, Imobiliária, S.A. Ovar (a) 100% Real Estate

F. Ramada, Serviços de Gestão, Lda. Ovar (a) 100% Administration and management services

Universal Afir - Aços, Máquinas e Ferramentas, S.A. Porto (a) 100% Steel commercialisation

BPS – Equipements, S.A. Paris, France (a) 100% Commercialisation of storage systems

Storax Racking Systems, Ltd.Bromsgrove, United

Kingdom (a) 100% Commercialisation of storage systems

Storax Benelux, S.A. Belgium (a) 100% Commercialisation of storage systems (a) – company merged in 2008 (Note 5); (b) – company whose assets and liabilities were classified in 2008 as "in discontinuation” (Note 4.5); (c) – company acquired durin 2008; (d) – company incorporated during the first half of 2008.

All the above companies were included in the consolidated financial statements in accordance with the full consolidation method, as established in Note 2.2.a).






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4.2 INVESTMENTS IN ASSOCIATED COMPANIES The associated companies, percentage of capital held and main activity as of 31 December 2008 and 2007 are

as follows:

Company Percentage held Act ivity2008 2007

EDP – Produção Bioeléctrica , S.A. 50% 50% Energy production and trading

Operfoz – Operadores do Porto da Figueira da Foz, Lda. 33,33% 33,33% Harbor operations

Ródão Power - Energia e Biomassa do Ródão, S.A. (a) 50% 100% Energy production and trading

(a) – company partially sold to the associated company EDP – Produção Bioeléctrica, S.A. during 2008 (Note 4.5)

These associated companies were included in the consolidated financial statements in accordance with the equity method, as explained in Note 2.2b).

The book value, share capital and net profit for the year ended on 31 December 2008 for these associated companies were as follows:

Company Book value (a) Asset Equity Net profit

EDP – Produção Bioeléctrica , S.A. 17.664.516 134.221.492 4.990.283 (2.176.891)

Operfoz – Operadores do Porto da Figueira da Foz, Lda. 245.095 3.570.251 735.283 49.307

Ródão Power - Energia e Biomassa do Ródão, S.A. - 23.206.501 39.641 (162.053)

17.909.611

(a) – includes loans conceded.

The accounting policies used by these associated companies do not differ significantly from those used by the Altri’s Group, fact that led to no accounting policies harmonization.

4.3 INVESTIMENTS AVAILABLE FOR SALE As of 31 December 2008 and 2007 the investments available for sale and their book value as of that date,

were as follows:

2008 2007

Buildings 737.522 793.497Others 42.808 199.957

780.330 993.454

Accumulated impairment losses in investments (Note 20) - (110.882)

Net book value 780.330 882.572

Book value

4.4 INVESTMENTS RECORDED AT FAIR VALUE TROUGH PROFIT AND LOSSES

The amount included in the caption “Investments recorded at fair value through profit and loss” as of 31 December 2008 and 2007 refers to shares of companies listed in stock exchange markets and are recorded in accordance with its market value as of that date.






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4.5 ASSETS CLASSIFIED AS HELD FOR SALE OR IN DISCONTINUATION

In the end of December 2008 the industrial paper unit of CPK - Companhia Produtora de Papel Kraftsack, S.A, was closed so its assets and liabilities, as of 31 December 2008 were classified as in discontinuation (net from intragroup operations) which are recorded according to the accounting policy described in Note 2.3 k) x). The detail of assets and liabilities from CPK in discontinuation as of 31 December 2008 are as follow: Tangible assets 2.516.063Intangible assets 3.194Inventories 5.827.543Customers 4.419.345Other debtors 806.842Other current assets 1.542Cash and cahs equivalents 1.500Assets classif ied as in discontinuation 13.576.029

Provisions (3.400.000)Suppliers (1.728.199)Other payables (101.799)Other current liabilities (628.216)Liabilities associated w ith assets classif ied as in discontinuation (5.858.214)

Assets net from liabilities in discontinuation 7.717.815

During the year ended 31 December 2008 the net loss of CPK – Companhia Produtora de Papel Kraftsack, S.A. (net from intragroup operations) amounted to (752,764) Euro, which is presented in the Income Statement caption “Profit for the year from discontinued operations”. As of 31 December 2007 the assets and liabilities of Ródão Power – Energia e Biomassa do Ródão, S.A. (net from intragroup operations), were recorded as held for sale and, in 2008, this company was sold to the associated company EDP – Produção Bioeléctrica, S.A. (Note 4.2). The detail of assets and liabilities held for sale as of 31 December 2007 are as follow: Tangible fixed assets 19.176.545Intangible fixed assets 6.107Inventories 194.722Customers 1.522.097Other debtors 1.449.465Other current assets 98Assets classified as held for sale 22.349.034

Suppliers (2.443.139)Group companies (Note 12) (21.640.843)Other payables (183.047)Other current liabilities (179.693)Liabilities associate with assets held for sale (24.446.722)

Assets net from liabilities held for sale (2.097.688)

During the year ended 31 December 2007 the net profit of Ródão Power - Energia e Biomassa do Ródão, S.A. amounted to 187.820 Euro, and during the year ended 31 December 2008 until its selling date, the net loss of this company amounted to (251.693) Euro, recorded in the Income Statement caption “Profits related with assets classified as held for sale”.






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5. CHANGES IN THE GROUP COMPANIES

At 16 April 2008 was signed the F. Ramada – Aços e Indústrias, S.A. demerger public deed. Under the terms of the project, the planned reorganization implies the split of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and storage systems sector. The demerger process originated the constitution of a new company, F. Ramada – Investimentos, SGPS, S.A. (“Ramada Investimentos”) and the relevant date for the production of effects of this operation was 1 June 2008, the date when F. Ramada – Aços e Indústrias, S.A. (“F. Ramada - Aços”) and its subsidiaries were no longer included in the consolidated financial statements of Altri, SGPS, S.A. As a consequence of the demerger process, F. Ramada – Aços and its subsidiaries contributes during five months to the consolidated income statement of Altri, SGPS, S.A., have been classified as Discontinued Operations, according to IFRS 5 – Non Current Assets Held For Sale and Discontinued Operations. The impacts of the Ramada – Aços and its subsidiaries’ net assets demerger process on the consolidated balance sheet on the 1st of June 2008 (Demerger date) were as follows:

Demerge dateTangible and intangible assets (Notes 6 e 8) 84.899.532Goodwill (Note 7) 2.199.238Deferred tax assets (Note 10) 2.681.528Inventories (b) 42.408.422Derivatives 626.696Cash and cash equivalents 39.668.476Other assets (a) 94.587.310Loans (110.070.311)Provisions (Note 20) (137.084)Deferred tax liabilities (Note 10) (401.714)Other liabilities (116.987.460)Total demerged 39.474.633

The impacts of the demerger process on the consolidated income statement were as follows:

Demerge dateSales and services rendered 49.278.067Other operating income 521.685Cost of sales (26.972.174)Other operating expenses (19.489.828)Financial loss (1.556.007)Income before tax 1.781.743Income tax (470.208)Net profit 1.311.535

(a) – The amount of the caption “Other assets” is net of impairment losses in investments of 85,886 Euro and impairment losses in other current assets of 17,071,176 Euro (Note 20). (b) – The net amount of the caption “Inventories” corresponds to a gross amount of 42,781,708 Euro (Note 9) and to impairment losses in inventories of 373,286 Euro (Note 20). Additionally, during the year ended in 31 December 2008 the Group acquired the remaining 20% of the share capital of Sosapel – Sociedade Comercial de Sacos de Papel, Lda., for 2,000 Euro which was fully payed, as well as an additional percentage of 0.013% of Celtejo Group share capital for 5,539 Euro which was also fully payed. During 2008 it was made an additional payment of 810,763 Euro (Note 7) for the correction of the purchase price of Celbi, in August 2006, related to the receiving of a subsidy.






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In November 2007 Altri SGPS, S.A. trough its participated company Invescaima – Investimentos e Participações, SGPS, S.A. acquired 100% of the share capital and voting rights of the company Socasca – Recolha e Comércio de Recicláveis, S.A. (“Socasca”) which main activity consists on the gathering and commerce of recyclable materials. As this acquisition took place in the end of 2007, Socasca integrated the consolidation perimeter of Altri, SGPS, S.A., with effects on 31 December 2007. The fair value of the net assets acquired as well as the Goodwill generated with this acquisition are as follow: Fair value as of the

acquisiton date

AssetsCurrent 1,240,950Non current 3,562,410

4,803,360

LiabilitiesCurrent 1,451,703Non current 2,068,351

3,520,054

Net assets 1,283,306

Goodwill (Note 7) 3,647,639Acquisition cost 4,930,945

Considering the nature of the assets and liabilities of Socasca, Altri considers that, as of 31 December 2007, the book value do not differs significantly from its fair value. Nevertheless during 2008, a new analysis of this situation was made, and the fair value of the assets and liabilities did not differ significantly from its accounting fair value.

As result of this acquisition an amount of 4,470,945 Euro was already paid remaining 460,000 Euro to be paid in the years 2008, 2009 and 2010 (the amount of 150,000 Euro was paid during 2008). The cash-flows generated in this operation can be detailed as follow:

Acquisition cost already paid 4,470,945Cash and cash equivalents in the acquired subsidiary (103,678)

4,367,267

The price of acquisition of Socasca still depends on correction that will be determined by the obtaining of an exploration licence, of the financial performance of this company until 2009 and of the effective collection of a subsidy of investment. Because of that, it was made an additional payment, during 2008, amounting 187,979 Euro (Note 7) concerning Socasca acquisition. It’s estimated that this correction will be, approximately 1,500,000 Euro maximum. If this operation had been reported with effects on 1 January 2007, the operational income of Altri Group in 2007 would have an increase of approximately, 2,900,000 Euro and the operational result would have an increase of, approximately, 200,000 Euro. During the year ended 31 December 2007, trough the classification of assets as held for sale, Ródão Power – Energia e Biomassa do Ródão, S.A. was no longer consolidated by the full consolidation method. This company was parcially sold during 2008 (Notes 4.2 and 4.5).






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6. TANGIBLE ASSETS

During the years ended 31 December 2008 and 2007, the movement occurred in tangible fixed assets and the corresponding accumulated depreciation, was as follows:

2008Gross assets

Land

Buildings and other

constructionsPlant and machinery Vehicles Tools Office equipment Other tangible assets Work in progress

Advances on account of fixed assets Total

Opening Balance 90.049.788 112.550.957 594.921.277 7.351.968 4.420.896 13.834.867 10.055.506 98.297.789 7.532.931 939.015.979Changes in demerged activities untill demerge date 13.973.510 (69.197) (60.182) (62.305) (49.317) (100.300) 325.622 492.716 - 14.450.547Changes in the group - demerge (Note 5) (78.578.699) (12.729.575) (24.241.511) (3.524.910) (755.798) (3.255.273) (445.620) (836.574) - (124.367.960)Changes in the group - decreases (Note 4.5) - (364.337) (14.040.636) (65.257) (2.924) (29.325) (24.400) - - (14.526.879)Additions 162.254 3.420.127 28.774.424 598.785 31.112 340.494 317.448 229.432.443 - 263.077.087Disposals (1.528.801) (65.612) (283.238) (265.362) - (44.470) (208.019) - - (2.395.502)Transfers and write-offs 51.064 979.256 46.221.092 - - 146.218 128.516 (43.896.698) (4.237.376) (607.928)

Closing balance 24.129.116 103.721.619 631.291.226 4.032.919 3.643.969 10.892.211 10.149.053 283.489.676 3.295.555 1.074.645.344

Accumulated deppreciation

Land

Buildings and other

constructionsPlant and machinery Vehicles Tools Office equipment Other tangible assets Total

Opening Balance 5.455.125 88.503.234 498.838.444 5.821.660 4.221.193 12.477.510 8.947.490 624.264.656Changes in demerged activities untill demerge date - 159.628 660.008 (46.370) (15.292) (80.811) 250.857 928.020Changes in the group - demerge (Note 5) - (9.374.385) (22.985.794) (3.214.351) (714.874) (3.066.245) (335.383) (39.691.032)Changes in the group - decreases (Note 4.5) - (74.253) (11.651.498) (19.299) (2.924) (14.647) (24.400) (11.787.021)Additions 214.107 1.873.605 24.918.424 333.498 43.929 578.698 611.265 28.573.526Disposals (815) (39.440) (231.780) (203.972) - (97.156) (208.019) (781.182)Transfers and write-offs - - (1.812) - - - - (1.812)

Closing balance 5.668.417 81.048.389 489.545.992 2.671.166 3.532.032 9.797.349 9.241.810 601.505.155

18.460.699 22.673.230 141.745.234 1.361.753 111.937 1.094.862 907.243 283.489.676 3.295.555 473.140.189

2007Gross assets

Land

Buildings and other

constructionsPlant and machinery Vehicles Tools Office equipment Other tangible assets Work in progress

Advances on account of fixed assets Total

Opening Balance 84.349.285 110.840.548 591.562.062 6.571.971 4.243.701 13.946.774 10.255.158 25.727.723 2.082.575 849.579.797Changes in the group - decreases (Note 4.5) - - - - - - - (14.127.570) (1.444.250) (15.571.820)Changes in the group - additions (Note 5) 732.744 1.168.332 1.651.388 934.739 24.824 46.166 7.552 295.920 - 4.861.665Additions 5.261.826 187.511 2.261.243 388.245 121.918 645.010 261.694 92.902.846 6.894.606 108.924.899Disposals (338.735) (318.823) (5.972.843) (542.987) (17.146) (878.548) (178.094) - - (8.247.176)Transfers and write-offs 44.668 673.389 5.419.427 - 47.599 75.465 (290.804) (6.501.130) - (531.386)

Closing balance 90.049.788 112.550.957 594.921.277 7.351.968 4.420.896 13.834.867 10.055.506 98.297.789 7.532.931 939.015.979

Accumulated deppreciation

Land

Buildings and other

constructionsPlant and machinery Vehicles Tools Office equipment Other tangible assets Total

Opening Balance 5.225.597 85.357.399 483.063.138 5.519.493 4.076.506 12.563.535 8.681.357 604.487.025Changes in the group (Note 5) - 181.689 680.369 393.837 15.635 24.499 3.226 1.299.255Additions 263.736 3.102.091 20.930.435 432.571 118.480 742.158 647.256 26.236.727Disposals (34.208) (141.681) (5.633.841) (524.241) (17.146) (924.266) (183.272) (7.458.655)Transfers and write-offs - 3.736 (201.657) - 27.718 71.584 (201.077) (299.696)

Closing balance 5.455.125 88.503.234 498.838.444 5.821.660 4.221.193 12.477.510 8.947.490 624.264.656

84.594.663 24.047.723 96.082.833 1.530.308 199.703 1.357.357 1.108.016 98.297.789 7.532.931 314.751.323

The most significant values included in the caption “Work in progress” as of 31 December 2008 and 2007 refer to the following projects:

31-12-2008 31-12-2007Project to expand capacity 278.787.766 49.449.537Mechanical equipment improvement 3.160.044 -Bleaching line - 37.204.728Peeling line - Woods Park - 6.299.171Pressing machine and electric filter for boiler - 1.712.729Other projects 1.541.866 3.631.624

Total 283.489.676 98.297.789

As of 31 December 2008 one major project is in progress: the increase in the production capacity of Celbi – Celulose da Beira Industrial, S.A., project with the estimated conclusion in 2009 (Note 28). During 2008, the financial costs supported by Altri Group with the borrowing for the acquisition of fixed assets related to the expansion of production capacity amounted to 8,525,560 Euro, which were capitalized under the caption "work in progress" according to the policy described in Note 2.3 f).






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7. GOODWILL

During the years ended 31 December 2008 and 2007, the movement occurred in goodwill and the corresponding impairment losses, was as follows:

Opening Balance as of 01.01.2008 270.523.604Increases 998.742Decreases - Demerge effects (Note 5) (2.199.238)Closing Balance as of 31.12.2008 269.323.108

Opening Balance as of 01.01.2007 266.875.965Increases (Note 5) 3.647.639Closing Balance as of 31.12.2007 270.523.604

The increases recorded in the year ended 31 December 2008 are related to additional payments for the acquisition of Sócasca - Recolha e Comércio de Recicláveis, S.A. (187,979 Euro) and Celbi - Celulose Beira Industrial, SA (810,763 Euro) (Note 5). The increases recorded in the year ended 31 December 2007 refer to the acquisition of Sócasca, Recolha e Comércio de Recicláveis, S.A. (Note 5).

Goodwill is not amortised. Impairment tests to Goodwill are made on an annual basis and whenever an event or a change in circumstances that reveals the amount which the related asset is recorded could not be recoverable. Whenever the amount which the asset is recorded is superior to its recoverable amount an impairment loss is recognized. The recoverable amount is the highest between the net sale price and the value of use. During the years ended 31 December 2008 and 2007, there were not recorded or reverted any impairment losses. During 2008, in order to analyze the existence or not of impairment on the main goodwill amount that resulted from Celbi - Celulose Beira Industrial, SA acquisition, in the year 2006, amounting to 253,391,251 Euro, the Group evaluated this affiliated company, and concluded that there was no impairment at that goodwill level. That evaluation was based on Celbi’s historical performance and an estimate of discounted cash flows based on a Celbi’s 6 year business plan. The main assumptions used in this calculation were:

Inflation rate 2,00%

Discount rate 8,19%

Growth rate in perpetuity 2,00% The discount rate net of taxes used was 8.19% and was calculated according to the WACC, considering the following assumptions:

Risk-free interest rate 4,18%

Equity risk premium 6,00%

Debt risk premium 2,00%

Regarding the remaining goodwill amounting to 15,931,857 Euro, in order to analyze the existence or not of impairment losses as of 31 December 2008, the Group made a comparison of net cash flows generated annually by company with the correspondent goodwill, and concluded that there was no impairment.






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8. INTANGIBLE ASSETS During the years ended in 31 December 2008 and 2007, the movement in intangible assets, as well as in the

corresponding accumulated depreciation, was as follows:

2008Gross assets

Installation expenses

Development expenses

Industrial property and other rights Software

Intangible assets in progress Total

Opening balance 46,018 3,586,299 88,873 491,199 505,922 4,718,311Changes in demerged activities untill demerge date - - - (54,571) - (54,571)Changes in the group - demerge (Note 5) - - - (436,628) - (436,628)Changes in the group - (193,293) (8,000) - (5,934) (207,227)Additions 2,656 94,117 - - 88,276 185,049Disposals - - - - - -Transfers and write-offs - 132,300 - - (229,777) (97,477)

Closing balance 48,674 3,619,423 80,873 - 358,487 4,107,457

Accumulated depreciationInstallation expenses




Opening balance 3,888 3,428,145 80,767 237,890 3,750,690Changes in demerged activities untill demerge date - - - (23,866) (23,866)Changes in the group - demerge (Note 5) - - - (214,024) (214,024)Changes in the group - (185,050) (5,778) - (190,828)Additions - 237,254 9,994 - 247,248Disposals - - - - -Transfers and write-offs - - - - -

Closing balance 3,888 3,480,349 84,983 - 3,569,220

44,786 139,074 (4,110) - 358,487 538,237

2007Gross assets

Installation expenses




Opening balance 57,555 3,521,114 93,373 230,374 230,791 4,133,207Changes in the group (11,537) - (4,500) - (77,844) (93,881)Additions - 54,685 - 274,376 363,475 692,536Disposals - - - - - -Transfers and write-offs - 10,500 - (13,551) (10,500) (13,551)

Closing balance 46,018 3,586,299 88,873 491,199 505,922 4,718,311

Accumulated depreciationInstallation expenses




Opening balance 8,097 3,205,558 71,148 180,506 3,465,309Changes in the group (4,209) - (375) - (4,584)Additions - 222,587 9,994 68,314 300,895Disposals - - - - -Transfers and write-offs - - - (10,930) (10,930)

Closing balance 3,888 3,428,145 80,767 237,890 3,750,690

42,130 158,154 8,106 253,309 505,922 967,621 9. BIOLOGICAL ASSETS AND INVENTORIES As of 31 December 2008 and 2007, the amount recorded in the caption “Biological assets” relates to the

plantations and related charges held by the Group and can be detailed as follows:

31.12.2008 31.12.2007Biological assets 76.259.437 62.219.275Accumulated impairment losses in biological assets (Note 20) (380.006) (461.924)

75.879.431 61.757.351






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As of 31 December 2008 and 2007 the caption “Inventories” was made up as follows:

31.12.2008 31.12.2007Raw, subsidiary and consumable materials 33.592.703 30.621.230Sub-products and others 58.380 54.773Work in progress 387.955 6.187.993Finished and intermediate goods 30.879.007 19.363.928Merchandise - 17.911.343

64.918.045 74.139.267Accumulated impairment losses (Note 20) (7.304.757) (3.903.797)

57.613.288 70.235.470

The cost of sales for the period ended 31 December 2008 amounted to 79,542,865 Euro and was computed as follows:

MerchandiseRaw, subsidiary and

consumable materials Sub-products Finished and

intermediate goods Work in progress Biological assets Total

Opening balance 17.911.343 30.621.230 54.773 19.363.928 6.187.993 62.219.275 136.358.542Increases in the demerged activities until demerge 1.740.220 (40.567) 9 (569.666) 7.744.554 - 8.874.550Changes in the group - demerge (Note 5) (19.605.565) (7.480.223) (18) (2.019.149) (13.676.753) - (42.781.708)Changes in the group - sales (Note 4 .5) - (1.301.196) - (2.225.345) - - (3.526.541)Purchases 1.390.381 120.822.048 - - - - 122.212.429Inventory adjustment 176.634 64.467 - (527.718) (130.308) - (416.925)Closing balance - (33.592.703) (58.380) (30.879.007) (387.955) (76.259.437) (141.177.482)

1.613.013 109.093.056 (3.616) (16.856.957) (262.469) (14.040.162) 79.542.865

The cost of sales for the period ended 31 December 2007 amounted to 154,777,850 Euro and was computed as follows:

MerchandiseRaw, subsidiary and

consumable materials Sub-products Finished and

intermediate goods Work in progress Biological assets Total

Opening balance 13.255.297 23.048.898 56.799 15.282.907 7.634.884 55.895.935 115.174.720Purchases 21.145.220 154.839.791 - - - - 175.985.011Inventory adjustment (81.545) (51.730) 5 54.557 (282.390) (48.257) (409.360)Perimeter adjustment (Note 5) - 340.023 - - 45.998 - 386.021Existências finais (17.911.343) (30.621.230) (54.773) (19.363.928) (6.187.993) (62.219.275) (136.358.542)Closing balance

16.407.629 147.555.752 2.031 (4.026.464) 1.210.499 (6.371.597) 154.777.850

10. CURRENT AND DEFERRED TAXES

In accordance with current legislation, tax returns are subject to review and correction by the tax authorities during a four-year period (five years for Social Security), except when there has been tax losses, there have been granted tax benefits, or tax inspections or claims are in progress, in which cases the periods may be extended or suspended. Therefore, the tax returns of Altri and its subsidiary and associated companies for the years 2005 to 2008 are still subject to review. The Board of Directors of Altri believes that any potential corrections resulting from reviews/inspections of these tax returns by the tax authorities will not have a significant effect on the consolidated financial statements as of 31 December 2008 and 2007.






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The movements occurred in deferred tax assets and liabilities in the years ended in 31 December 2008 and 2007 were as follows:

2008Deferred tax assets Deferred tax liabilities

Opening balance as of 1 January 2008 11.925.730 1.884.051

Increases in demerged activities untill demerge date 271.316 77.106

Change in the group (Note 5) (2.681.528) (401.714)

Effect on the profit and loss statement:

Increases/(Decreases) in provisions not accepted for tax purposes 1.157.188 -

Harmonization of depreciation rates 1.416.837 -

Annulement of gains and transactions between group companies (1.183.753) -

Other effects 537.059 (150.823)

Effect on shareholders' funds:

Fair values of derivatives (Note 26) (459.615) 2.506.071

Closing balance as of 31 December 2008 10.983.234 3.914.691

2007Deferred tax assets Deferred tax liabilities

Opening balance as of 1 January 2007 8.992.788 1.167.417

Effect on the profit and loss statement:

Increases/(Decreases) in tax losses carried forward (673.747) -

Increases/(Decreases) in provisions not accepted for tax purposes 279.159 -

Harmonization of depreciation rates 682.533 -

Annulement of gains and transactions between group companies 2.489.552 -

Other effects 225.334 (102.180)

Effect on shareholders' funds:

Fair values of derivatives (Note 26) (69.889) 818.814

Closing balance as of 31 December 2007 11.925.730 1.884.051

As of 31 December 2008 and 2007 the detail of deferred tax assets and liabilities, in accordance with the timing differences that originated them, were as follows:

31.12.2008 31.12.2007Deferred tax assets Deferred tax liabilities Deferred tax assets Deferred tax liabilities

Provision and impairment losses not accepted for tax purposes 3.953.777 - 5.062.438 -

Fair value of derivatives 1.037.092 3.324.885 1.154.625 818.814

Write-off of tangible assets 327.145 - 306.826 -

Write-off of intangible assets 120.917 - 50.821 -

Pension fund 1.154.875 - 1.085.775 -

Harmonization of accounting principles 2.805.973 - 1.389.136 -

Annulement of gains and transactions between group companies 1.305.799 - 2.489.552 -

Other 277.656 589.806 386.557 1.065.237

10.983.234 3.914.691 11.925.730 1.884.051

According to the legislation in force, the Group uses a deferred tax of 26.5%% in those cases where there is a municipal income tax of 1.5%, except from deferred tax assets that result from tax losses carried forward, when it is used a rate of 25%.






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Income taxes recorded in the profit and loss statement for the years ended 31 December 2008 and 2007 can be detailed as follows:

31.12.2008 31.12.2007

Current income tax 183.545 10.164.243 Deferred income tax (2.078.154) (3.105.011)

(1.894.609) 7.059.232

The reconciliation of the Income before Tax to the Income Tax is as follow:

31.12.2008 31.12.2007Resultado antes de Imposto 2.262.478 42.315.267 Taxa de Imposto (incluindo taxa máxima e derrama) 26,50% 26,50%

599.557 11.213.546

Outros custos não aceites fiscalmente 2.030.494 263.761Insuficiência/(Excesso) da estimativa de imposto (103.796) (183.635)Diferença entre mais e menos valias fiscais e contabilísticas (4.858.494) (376.530)Actualização de encargos de explorações silvícolas (1.092.589) (1.277.641)Utilização de perdas fiscais que não deram origem a activos por impostos diferidos (289.387) (2.228.907)Efeito da existência de taxa de imposto diferente da acima apresentada 1.118.305 3.144.075Benefícios fiscais (72.173) (2.641.321)Outros efeitos 773.474 (854.116)Imposto sobre o rendimento (1.894.609) 7.059.232

11. COSTUMERS As of 31 December 2008 and 2007 this caption can be detailed as follows:

31.12.2008 31.12.2007

Costumers, current accounts 58.222.047 92.417.253Costumers, notes receivables - 3.811.654Costumers, doubtful debts 347.851 8.462.009

58.569.898 104.690.916Accumulated impairment losses (Note 20) (750.748) (16.097.788)

57.819.150 88.593.128

The Group’s exposure to credit risk is attributable mainly to the accounts receivable resulting from the Group’s

operating activity. The amounts recorded in the balance sheet are presented net of accumulated impairment losses for doubtful accounts that were estimated by the Group, in accordance with its experience and based on the economical environment evaluation. The Board of Directors believes that the recorded net amounts are close to its fair value; once these accounts receivable do not pay interests and the discount effect is immaterial.






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As of 31 December 2008 and 2007, the age of costumer’s balances can be analysed as follow:

31.12.2008 31.12.2007

Not due 32.563.401 73.438.865

Due with no impairment losses recorded 0 - 30 days 8.962.391 10.074.460 30 - 90 days 3.836.399 2.316.410 + 90 days 12.456.959 93.131

25.255.749 12.484.001Due with impairment losses recorded 90 - 180 days - 2.630.206 180 - 360 days - 40.056 + 360 days - -

- 2.670.262

Total 57.819.150 88.593.128

The Group contracted credit insurances to cover the recoverability risk from these accounts receivables as follow:

31.12.2008 31.12.2007With credit insurance 20.371.976 43.630.996Without credit insurance 38.197.922 61.059.920

58.569.898 104.690.916

The Group does not charge any interests as long as defined pay terms (in average 60 days) are respected. Once that period ends, interests are charged in accordance with the contract and the applicable law to each particular situation, which only occurs in extreme situations.

12. OTHER DEBTORS As of 31 December 2008 and 2007 this caption can be detailed as follows:

31.12.2008 31.12.2007

Advances to suppliers 244.013 198.780Other debtors 15.514.810 31.212.628

15.758.823 31.411.408

Accumulated impairment losses (Note 20) (1.009.182) (3.196.386)14.749.641 28.215.022

As of 31 December 2008 the caption "Other debtors" is, mainly, composed by accounts receivable originated from the disposal of fixed assets and accounts receivable for which were constituted impairment losses. As of 31 December 2007, the caption “Other debtors” includes an amount of 21,640,843 Euro, related to an account receivable from Ródão Power - Energia e Biomassa do Ródão, S.A. (Note 4.5).






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As of 31 December 2008 and 2007, the age of the balances in “Other Debtors” can be analysed as follow:

31.12.2008 31.12.2007

Not due 12.042.910 26.106.116

Due with no impairment losses recorded 0 - 30 days 886.383 22.295 30 - 90 days 10.442 147.027 > 90 days 1.809.906 1.939.584

2.706.731 2.108.906Due with impairment losses recorded > 360 days - -

14.749.641 28.215.022

The not due balances do not present any sign of impairment, the net accounting value of these assets is considered as being close to its fair value.

13. STATE AND PUBLIC SECTOR As of 31 December 2008 and 2007 this caption can be detailed as follows:

Debtor balances 31.12.2008 31.12.2007Corporate income tax 102.723 3.125.285Advanced payments 3.918.969 6.126.147Retentions 1.019.410 802.058Value added tax 19.377.660 19.293.564Other taxes - 15.026

24.418.762 29.362.081

Creditor balancesCorporate income tax (1.727.266) (9.929.396)Value added tax - (2.354.413)Retentions (743.291) (1.459.645)Social Security contributions (567.817) (962.426)Other taxes (24.547) (75.984)

(3.062.921) (14.781.864)

14. OTHER CURRENT ASSETS As of 31 December 2008 and 2007 this caption can be detailed as follows:

31.12.2008 31.12.20071.938.506 532.220

936.995 199.525

2.400.735 2.559.8561.080.141 430.114

465.752 154.2171.905.111 350.416

Others 1.400.619 651.31910.127.859 4.877.667

Accrued income:Amounts to be invoicedOthers

Deferred costs:Rents paid in advanceTransportation costs paid in advanceInsurances paid in advanceOther external supplies and services paid in advance






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15. CASH AND CASH EQUIVALENTS

As of 31 December 2008 and 2007 the caption “Cash and cash equivalents” can be detailed as follows:

31.12. 2008 31.12. 2007

Cash 24.911 671.914Bank deposits on demand 74.275.368 134.377.876

74.300.279 135.049.790

16. OTHER NON CURRENT ASSETS

As of 31 December 2008 and 2007 the caption “Other non current assets” can be detailed as follows:

2008 2007

Gross ValueAccumulated Impairment

LossesNet Values Gross Value

Accumulated Impairment

LossesNet Values

Rents paid in advance 397.414 - 397.414 117.767 - 117.767Accounts receivable from commercial activity and other debtors - - - 1.104.512 1.104.512 -

397.414 - 397.414 1.222.279 1.104.512 117.767

The accounts receivables from commercial activity and other debtors resulted from transactions with entities who revealed incapacity to pay their debts. The value is fully covered by impairment losses (Note 20). As of 31 December 2008 and 2007, the age of these values can be analysed as follows:

31.12.2008 31.12.2007

Not due 397.414 117.767

Due with impairment losses recorded< 6 months - -6-12 months - -> 1 year - 1.104.512

- 1.104.512397.414 1.222.279

17. SHARE CAPITAL AND RESERVES

Share Capital

As of 31 December 2008 and 2007 the company’s fully subscribed and paid up capital consisted of 102,565,836 shares with a nominal value of 25 cents of a Euro each.

As of 31 December 2008 there were no entities holding more than 20% of the subscribed share capital.

Legal reserves

As of 31 December 2008, the Company presented the amount of 1,630,523 Euro (1,527,560 Euro as of 31 December 2007) of legal reserves, which can not be distributed to share holders unless the Company closes, although these reserves can be used to absorb losses after all other reserves are over, or incorporated in share capital.






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Other Reserves

31.12.2008 31.12.2007

Hedging reserves 7.294.181 (931.402)Conversion reserves - (373.328)Other reserves 46.862.442 56.943.872

54.156.623 55.639.142

The caption “Hedging reserves” reflects the fair value of the derivative financial instruments classified as cash-flows hedging in the effective hedging component, net of the tax effect (Note 26). The “Conversion reserves” reflect the exchange variations occurred in the migration of the associated companies in currencies different from Euro and cannot be distributed or used to absorb losses.

18. MINORITY INTERESTS

The amounts of this caption during the years ended 31 December 2008 and 2007 are as follow:

31.12.2008 31.12.2007Opening balance 274.494 290.356

Part acquired to minorities from Celtejo - Empresa de Celulose do Tejo, S.A. (9.335) (78.195)Acquisition of 20% of Sosapel - Sociedade Comercial de Sacos de Papel, Lda. (28.877) -Net profit attributable to minority interests 47.709 62.333

Closing balance 283.991 274.494

19. BANK LOANS AND OTHER LOANS As of 31 December 2008 and 2007, the captions “Bank loans” and “Other loans” can be detailed as follows:

2008Nominal Value Book Value

Current Non current Total Current Non current Total

Bank loans 50.887.167 150.785.809 201.672.976 50.609.582 150.015.292 200.624.874 Bank overdrafts 1.276.882 - 1.276.882 1.276.882 - 1.276.882

Bank loans 52.164.049 150.785.809 202.949.858 51.886.464 150.015.292 201.901.756

Commercial paper 85.000.000 115.000.000 200.000.000 84.974.531 114.578.800 199.553.331 Bonds 21.500.000 375.000.000 396.500.000 21.236.178 367.814.561 389.050.739 Factoring - - - - - -Other loans 4.785.414 38.876.656 43.662.070 4.785.414 38.876.656 43.662.070

Other loans 111.285.414 528.876.656 640.162.070 110.996.123 521.270.017 632.266.140

163.449.463 679.662.465 843.111.928 162.882.587 671.285.309 834.167.896

2007Nominal Value Book Value

Current Non current Total Current Non current Total

Bank loans 70.470.240 209.055.959 279.526.199 70.470.240 207.729.419 278.199.659 Bank overdrafts 9.535.277 - 9.535.277 9.535.277 - 9.535.277

Bank loans 80.005.517 209.055.959 289.061.476 80.005.517 207.729.419 287.734.936

Commercial paper 131.000.000 - 131.000.000 130.402.691 - 130.402.691 Bonds - 321.500.000 321.500.000 - 315.393.671 315.393.671 Factoring 1.438.136 - 1.438.136 1.438.137 - 1.438.137 Other loans 3.151.732 11.887.137 15.038.869 3.151.732 11.887.137 15.038.869

Other loans 135.589.868 333.387.137 468.977.005 134.992.560 327.280.808 462.273.368

215.595.385 542.443.096 758.038.481 214.998.077 535.010.227 750.008.304

These loans bear market interest rates.






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Bank Loans In August 2006, the subsidiary Altri, S.L. signed a loan agreement with a bank syndicate amounting to 400,000,000 Euro with the purpose of buying 99.96% of the share capital corresponding to 100% of the voting rights of Celbi. In 2007 this loan suffered an extraordinary amortization of 250,000,000 Euro. Interests are payable half-yearly at the end of the period and capital will be repaid in 5 successive half-yearly instalments, beginning in August 2011. In July 2005 Invescaima, SGPS, S.A. signed a loan agreement with Caixa Geral de Depósitos (CGD) and Caixa Banco de Investimento (CBI) amounting to 30,000,000 Euro with interest payable half-yearly and capital being repaid in 10 successive, equal half-yearly instalments, beginning in January 2007. The remaining amount of the loan not yet reimbursed of 18,000,000 Euro is recorded as “current debt” because of contractual terms that give the banks the option to require early repayment although the Board of Directors is convinced that this early repayment will not be required. As of 31 December 2008, contracted bank overdrafts amounted to 121 million Euro (55.7 million Euro as of 31 December 2007) from which were being used 32,887,167 Euro (17,877,770 Euro as of 31 December 2007), classified in the caption “Bank Loans”. Other Loans

In August 2005 Celulose do Caima, SGPS, S.A. issued a bond loan amounting to 21,500,000 Euro repayable in 6 years which has associated some covenants related with the accomplishment of financial ratios. The due amount is recorded as “current debt” because of contractual terms that give the banks the option to require early repayment, although the Board of Directors is convinced that this early repayment will not be required. Celbi – Celulose da Beira Industrial, S.A. issued, in February 2007, a bond loan amounting to 300,000,000 Euro repayable in 8 years until 2015. Interests are payable half-yearly at the end of the period since the subscription date at a rate equal to Euribor 6 months plus a spread. In the first semester of 2008 the Celbi – Celulose da Beira Industrial, S.A. issued two 10 year bond loans, amounting 50,000,000 Euro and 25,000,000 Euro, respectively. These loans have full repayment in 2018. The Group has renewable commercial paper programs in the maximum amount of 265,000,000 Euro as of 31 December 2008 (264,750,000 Euro as of 31 December 2007), with collocation guarantees subscribed by the several companies. As of 31 December 2008 the amount in use amounted to 200,000,000 Euro (131,000,000 Euro as of 31 December 2007). The amount of 85,000,000 Euro is classified as current liability because, according to the contracts, both parties can terminate the program with a pre-defined warning of 30 to 60 days, although, if the programs are not terminated before its maturity, they will only be repaid in years 2010, 2011 and 2012 in the amounts of 15,000,000 Euro, 25,000,000 Euro and 25,000,000 Euro respectively, and the Board of Directors is convinced that there will be no early terminations from any parts to these commercial paper program. The expenses incurred with the issuance of loans are deducted to its nominal value and deferred and recognized as interest expenses during the period of the loan (Note 34). In February 2005, the application of the subsidiary Celtejo to the financial benefits granted by the ”Programa Operacional da Economia – POE” (Operating Economics Program) to finance the expansion and modernization of the industrial unity was approved. The main purpose of this project is to increase the production capacity and establish a better market differentiation of the pine and eucalyptus pulp. This represents an investment of, approximately, 49,464,000 Euro. The financial grant is made up as follows: (i) a repayable benefit up to 14,919,000 Euro; (ii) a success fee similar to a non-repayable benefit with a maximum amount of 14,919,000 Euro that will be deducted to the repayable benefit mentioned in (i); and (iii) a non-repayable grant related with personnel training programs.






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During the year 2006 it was submited an application under the PRIME in the aim of the pulp bleaching on Celtejo unit. This investment had an estimated total amout of 72,000,000 Euro and was concluded in 2008. The financial grant is made up as follows: (i) a repayable benefit up to 15,323,000 Euro; (ii) a success fee similar to a non-repayable benefit with a maximum amount of 12,317,000 Euro that will be deducted to the repayable benefit mentioned in (i). The success fee will be awarded according to the fulfillment degree of the contract, determined in measurements to be made at the end of the years 2010, 2011 and 2013.The repayable financial benefit will be paid by Celtejo in 10 semiannual installments, the first of them at 18 January 2012. Additionally, in January 2007 Altri and Celbi signed a contract for granting financial and tax incentives under Decree-Law no. 203/2003 of 10 September, with AICEP (Agência para o Investimento e Comércio Externo de Portugal, E.P.E.) which the Portuguese Government considered of national interest PIN (Projecto de Interesse Nacional) this project to expand the productive capacity of Celbi. The investment project will run from 1 January 2007 to 30 June 2009 and the contract value is 320,000,000 Euro and the Portuguese Government will grant a financial incentive equal to 16.5% of the eligible expenses. If Celbi complies with the proposed objectives measured at the end of 2009, 2010, 2013 and 2016 the Portuguese Government will give a success fee which will correspond to the the non-repayment of up to 80% of the amount of the repayable incentive. The Portuguese Government will also grant a tax incentive, corresponding to a tax credit amounting to 12% of relevant applications. In the year ended 31 December 2008 Celbi received the amount of 13,050,012 Euro concerning to the repayable incentive, which is recorded under the caption "Other loans". In the years ended 31 December 2008 and 2007 the Group sensitivity to the change of the interest rate index of more or less 1 percentual point, measured as variation on Financial Profit, not considering the hedging effects of the derivative financial instruments (Note 26), may be analysed as follow:

31.12.2008 31.12.2007

Interests (Note 34) 34,528,851 35,933,846

Positive change of 1 p.p. in the interest rate (8,431,119) (8,264,454)

Negative change of 1 p.p. in the interest rate 8,431,119 8,264,454






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The bank loans and other loans reimbursement plan as well as the associated interests are as follow:

31/12/2008

2009 2010 2011 2012 >2013 Total

Bank loansCapital 50,887,167 11,111,310 21,998,810 117,500,468 175,221 201,672,976Interests (a) 8,066,919 5,488,603 5,754,589 5,130,660 8,043 24,448,814

Bank overdraftsCapital 1,276,882 - - - - 1,276,882Interests (a) 52,352 - - - - 52,352

Commercial paperCapital 85,000,000 - - 25,000,000 90,000,000 200,000,000Interests (a) 2,507,500 2,978,500 3,530,500 3,806,500 9,558,000 22,381,000

Bond loansCapital 21,500,000 - - - 375,000,000 396,500,000Interests (a) 13,877,500 11,775,000 13,575,000 14,475,000 42,945,000 96,647,500

Other loansCapital 4,785,414 3,888,620 6,297,387 6,217,167 22,473,482 43,662,070Interests (a) - - - - - -

TotalCapital 163,449,463 14,999,930 28,296,197 148,717,635 487,648,703 843,111,928 Interests 24,504,271 20,242,103 22,860,089 23,412,160 52,511,043 143,529,666

187,953,734 35,242,033 51,156,286 172,129,795 540,159,746 986,641,594

31/12/20072008 2009 2010 2011 >2012 Total

Bank loansCapital 70,470,240 10,877,146 9,107,045 19,494,546 169,577,222 279,526,199 Interests (a) 16,791,139 12,223,502 11,423,027 11,020,993 16,111,272 67,569,933

Bank overdraftsCapital 9,535,277 - - - - 9,535,277 Interests (a) 515,572 - - - - 515,572

Commercial paperCapital 131,000,000 - - - - 131,000,000 Interests (a) 6,690,170 - - - - 6,690,170

Bond loansCapital - - - 21,500,000 300,000,000 321,500,000 Interests (a) 18,026,505 17,512,105 17,245,260 17,454,235 65,322,000 135,560,105

FactoringCapital 1,438,136 - - - - 1,438,136 Interests (a) 74,884 - - - - 74,884

Other loansCapital 3,151,732 4,198,333 3,721,894 3,245,450 721,460 15,038,869 Interests (a) - - - - - -

TotalCapital 215,595,385 15,075,479 12,828,939 44,239,996 470,298,682 758,038,481 Interests 42,098,270 29,735,607 28,668,287 28,475,228 81,433,272 210,410,664

257,693,655 44,811,086 41,497,226 72,715,224 551,731,954 968,449,145

(a) Considering the available information related to the interest rates evolution and the capital amortisation in the end of each year.






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20. ACCUMULATED PROVISIONS AND IMPAIRMENT LOSSES

The movements occurred in provisions and impairment losses for the years ended 31 December 2008 and 2007 can be detailed as follows:

31-12-2008

Provisions

Impairment losses in accounts receivable (Notes 11 and 12)

Impairment losses in inventories and biological

assets (Note 9)Impairment losses in

investments (Note 4.3) Total

Opening balance 4.817.457 20.398.686 4.365.721 110.882 29.692.746Increases in demerged activities untill demerge date 72.547 589.344 29.489 - 691.380Changes in the group - demerge (Note 5) (137.084) (17.071.176) (373.286) (85.886) (17.667.432)Changes in the group (Nota 4.5) (412.916) (200.000) (225.000) - (837.916)Increases 1.367.931 200.000 4.254.757 - 5.822.688Decreases (Nota 32) - - (366.918) - (366.918)Utilizations (600.600) (2.156.924) - (24.996) (2.782.520)Transfers - - - - -

Closing balance 5.107.335 1.759.930 7.684.763 - 14.552.028

31-12-2007

Provisions

Impairment losses in accounts receivable (a)(Notes 11, 12 and 16)

Impairment losses in inventories and biological

assets (Note 9)Impairment losses in

investments (Note 4.3) Total

Opening balance 4.270.534 19.574.755 4.441.217 110.882 28.397.388Increases 863.247 1.493.385 70.356 - 2.426.988Decreases (Nota 32) (163.617) (691.349) (109.240) - (964.206)Utilizações (152.707) (3.331) - - (156.038)Transfers - 25.226 (36.612) - (11.386)

Closing balance 4.817.457 20.398.686 4.365.721 110.882 29.692.746

(a) - including provisions for accounts receivable recorded as non current assets, amounting to 1,104,512 Euro (Note 16).

With the exception of impairment losses in investments (Note 34), the increases in impairment losses occurred

in the year ended 31 December 2008 and 2007 were recorded against the caption “Provisions and impairment losses” of the profit and loss statement.

The amount recorded under the caption “Provisions”, at 31 December 2008 and 2007, is the best estimate of

the Administration in order to face all the losses that may be supported due to the law suits under trial. 21. OTHER NON CURRENT CREDITORS As of 31 December 2008 and 2007 this caption is made up as follows:

31.12.2008 31.12.2007

Fixed assets' suppliers (Nota 29.2) 491,190 349,073

22. OTHER NON CURRENT LIABILITIES

As of 31 December 2008 the caption “Other noncurrent liabilities” refers to the medium and long term instalments of investment subsidies.






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23. SUPPLIERS

As of 31 December 2008 and 2007 this caption is made up as follows:

31.12.2008 0-90 days 90-180days >180 daysSuppliers, current account 51.010.434 35.029.737 246.038 15.734.659Suppliers, invoices in conference 7.891.558 7.891.558 - -

58.901.992 42.921.295 246.038 15.734.659

31.12.2007 0-90 days 90-180days >180 daysSuppliers, current account 36.853.719 33.651.464 2.180.179 1.022.076Suppliers, invoices in conference 6.435.766 6.435.766 - -

43.289.485 40.087.230 2.180.179 1.022.076

Payables

Payables

As of 31 December 2008 and 2007 the caption “Suppliers” refers to accounts payable from the normal activities of the Group. The Board of Directors understands that the book value of these debts is close to its fair value.

24. OTHER CURRENT CREDITORS

As of 31 December 2008 and 2007 the caption “Other current creditors” can be detailed as follows:

31.12.2008 0-90 days 90-180days >180 daysFixed assets suppliers 33.679.259 30.760.558 825.373 2.093.328Advances on account of sales 471.078 471.078 - -Other debts 36.755.364 36.379.505 - 375.859

70.905.701 67.611.141 825.373 2.469.187

31.12.2007 0-90 days 90-180days >180 daysFixed assets suppliers 20.258.471 19.748.941 68.184 441.346Advances on account of sales 1.133.071 1.133.071 - -Other debts 31.890.041 30.782.882 706.197 400.962

53.281.583 51.664.894 774.381 842.308

Payables

Payables

The caption “Other debts” includes, as of 31 December 2008, 25,000,000 Euro payable to Parpública, SGPS, S.A. which, in accordance with the current contractual conditions, will be paid in 2009.

25. OTHER CURRENT LIABILITIES As of 31 December 2008 and 2007 the caption “Other current liabilities” can be detailed as follows:

31.12.2008 31.12.2007

Accrued expenses:Amounts payable to employees (3.694.075) (5.380.134)Interest payable (9.699.807) (11.741.922)Pension Fund (Note 28) (4.703.443) (5.443.290)Rents (1.146.825) (853.628)Others (4.805.398) (4.782.718)

Current deferred income:Investment subsidies (1.770.860) (1.507.343)Amounts to be invoiced (Note 2.3 n) - (9.088.374)Others (12.666.902) (606.505)

(38.487.310) (39.403.914)

The caption "Other deferred income" includes the amount of 11,877,697 Euro related to the gain generated in the sale of Ródão Power - Empresa e Biomassa do Ródão, S.A. to EDP – Produção Bioeléctrica, S.A. which is deferred due to the fact that the second one is an associated company (Notes 4.2 and 4.5).






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26. DERIVATIVE FINANCIAL INSTRUMENTS

Interest rate derivatives

In order to reduce the exposition to the interest rates volatility, the Group signed interest rates swap contracts and an interest rate collar. These contracts were evaluated by its fair value as of 31 December 2008 and 2007, and the correspondent amount has been recognized under the caption “Derivatives”.

As of 31 December 2007 and 2006 there were established derivatives contracts which total amounts are as follow:

Fair valueType Notional value Interest Expiration date 31.12.2008 31.12.2007

Interest rate collar (b) 155.000.000 Pays fixed interest rate and receives Euribor 6M 2013 (3.883.723) 3.089.863

Interest rate swap (a) 25.000.000 Pays fixed interest rate and receives Euribor 3M 2015 (2.175.723) -

Interest rate swap (a) (c) 13.000.000 Pays fixed interest rate and receives Euribor 3M 2010 - 658.808

(6.059.446) 3.748.671

(a) Although these contracts were made with the purpose of risk hedging (and not speculation), these

contracts do not fulfill every necessary requirements so they can be classified as hedging (Note 2.3k) v)), and therefore, the variation of its fair value was recorded in the Statements of Profit and Losses in the caption “Gains/losses in derivative instruments” (Note 34).

(b) In accordance with the accounting policies adopted, these derivatives fulfil every requirement to be

designed as interest rate hedging instruments (Note 2.3k) v)).

(c) F. Ramada Group’s derivatives (Note 5).

The fair value of the Group’s contracted derivatives is determined by the respective counterparts (financial institutions with who were signed such contracts). The derivative evaluation model, used by the counterparts is based on the Discounted Cash Flows Method, i.e., using the Swaps Par Rates, listed in the interbank market and available on the Reuters and Bloomberg, for the applicable periods where the forward rates and the discount factors used to discount the fixed cash flows (fix leg) and the variable cash-flows (variable leg) are computed. The sum of these two components results on the Net Present Value of the future cash flows or on the fair value of the derivatives.

The increase/decrease of 1 p.p. on the interest rate indexes verified during 2008 and estimated for the period of these derivatives duration would result in a increase/decrease of the financial results of the year ended 31 December 2008 of 1,264,003 Euro/2,343,098 Euro and of the equity’s caption “Hedging reserves” of 1,738,480 Euro/2,985,485 Euro before considering the tax effects.

Paper pulp price hedging derivatives In order to reduce its exposure to volatility of paper pulp price volatility, the Group signed paper pulp price hedging derivatives, which were evaluated according to its fair value as of 31 December 2008 and 2007; the correspondent amount was recognized under the caption “Derivatives”.






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As of 31 December 2008 and 2007 there were established the following paper pulp derivative contracts which total amounts are as follow:

Hedging Quantity MaturityFair value

31.12.2008Fair value

31.12.2007

6.000 ton/month 31-12-2008 - (4.183.446)3.500 ton/month 31-12-2011 9.120.226 -1.750 ton/month 31-12-2010 3.426.509 -

12.546.735 (4.183.446)

The Derivative fair value valuation of the paper pulp price hedging, contracted by the Group was executed by the respective counterparts (financial institutions with which were signed such contracts). The derivative evaluation model, used by these counterparts is based on the Discounted Cash Flows Method, i.e., it’s calculated the difference between the estimated paper pulp quotation (PIX) and the fixed price for the relevant periods, which is, afterwards, discounted to the evaluation date. In accordance with the adopted accounting policies, these paper pulp derivatives fulfil with the requirements to be classified as hedging instruments; so the variation on its fair value was recorded in the equity’s caption “Hedging reserves”. The increase/decrease of 5% on the paper pulp price indexes (PIX) during the year ended 31 December 2008 and estimated for the period of these derivatives duration would result in a decrease/increase of the operational result of the year ended 31 December 2008 of 979,602 Euro and an decrease/increase on the equity’s caption “Hedging reserves” of 1,295,424 Euro before considering the tax effects.

The movement occurred in the fair value of the financial instruments during the periods ended 31 December 2008 and 2007 can be detailed as follow:

2008Pulp price hedging

derivativesInterest rates derivatives Total

Opening balance (4.183.446) 3.748.671 (434.775)

Derivatives fair value variation 16.730.181 (9.808.117) 6.922.064

Closing balance 12.546.735 (6.059.446) 6.487.289

2007Pulp price hedging

derivativesInterest rates derivatives Total

Opening balance (3.327.260) (2.003.248) (5.330.508)

Derivatives fair value variation (856.186) 5.751.919 4.895.733

Closing balance (4.183.446) 3.748.671 (434.775)

The periods’ gains and losses associated to the fair value variation, during 2008, of the hedging instruments in the non matured part (as described in IAS 39), in the amount of 11,191,269 Euro (3,353,596 Euro as of 31 December 2007) were directly recorded under equity’s captions net of the respective deferred tax liabilities, in the amount of 2,965,686 Euro (888,703 Euro as of 31 December 2007) (Note 10). The periods’ gains and losses associated to the fair value variation, during 2008, of the hedging instruments in the matured part and of the instruments which although had been contracted with a hedging purpose, do not gather the requirements to be classified as so, in the total amount of 4,269,205 Euro were recorded directly in the Statement of Profit and Losses for the year 31 December 2008 (Note 34).






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27. GUARANTEES PROVIDED TO THIRD PARTIES As of 31 December 2008 and 2007 the Group companies had provided bank guarantees as follows:

31.12.2008 31.12.2007AICEP 30.036.372 6.291.290DGCI - 215.744Others 864.837 961.747

30.901.209 7.468.781

28. FINANCIAL COMMITMENTS NOT INCLUDED IN THE CONSOLIDATED BALANCE SHEET

a) Pension Fund

Some of the group companies have assumed commitments related with retirement pensions not included in the consolidated balance sheet. The Caima and Silvicaima Pension Funds, managed by “BPI Pensões - Sociedade Gestora de Fundos de Pensões, S.A.” was created by a public deed held 31 December 1987, and aims to provide the employees who (i) at its normal retirement age or (ii) at the end of its contract with the company have completed at least 10 years of continuous service and 57 years old, with a monthly pension complement based on their average gross salary for the two years preceding the date of their retirement, beginning in the usual year of retirement. Following a decision of Caima’s Board of Directors and after obtaining approval from “Instituto de Seguros de Portugal” (the Portuguese insurance institute), the Caima and Silvicaima Pension Fund was divided into two independent funds in December 1998. Under the set of laws of the Social Benefits Regulation, the employees of the permanent board of Celtejo and CPK with at least five years of continuous service, are entitled to a monthly pension complement after their retirement or if they become disabled. This complement is defined according with a formula that takes into consideration the net monthly salary applicable to the employee as of the retirement date and the number of years of continuous service, in a maximum of 30 years, also guarantying survival pensions to the employees’ spouses and direct descendants. To cover those responsibilities there is an autonomous pension fund named Tejo Pension Fund. Celbi grants to its workers, with non-defined term labour contract, which retire while working for Celbi, a set of benefits in accordance with the company’s Rules for Pension Funds, published in the Republic Journal (“Diário da República”) number 221-III serie, dated 21 September 1999. In accordance with those rules, the Company grants the following benefits:

i) Retirement by age limit: the participants that retire in the normal timing will be entitled to an annual pension, equal to 11.5% of

the pensionable annual salary; ii) Retirement due to disability:

Plan A – If the participant retires himself permanently due to disability by the normal regime of social security, or is accepted as so by the medical services of the company and the management entity, the Fund secures the payment of a pension calculated in accordance with the following formulas:

Pension 1: 1. With less than 10 years of service – 50% of the annual pensionable salary; 2. With 10 or more years of service – 80% of the annual pensionable salary. The amount of the annual pension is deducted to the annual pension computed as described above. Pension 2:

The participants will be entitled to an amount equal to one fifth of the monthly salary earned at the retirement date by each year of service.






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Pension 3:

If the disability happens when the participant is more than 55 years old, to the amount referred to in Pension 2 is added 50% of the annual pensionable salary.

Plan B - If the participant retires himself permanently due to disability by the normal regime of social security, or is accepted as so by the medical services of the company and the management entity, the Fund secures the payment of an annual pension equal to 11.5% of the pensionable annual salary.

Only the participants working for the company when the present change took place can benefit from Plan A. In relation to these workers and in relation to plans A and B the most favourable will be applicable.

To the other participants is applicable the Plan B.

This regime applies to all Celbi’s workers.

In accordance with the latest actuarial valuation prepared by the funds’ managers, the present value of the past service liabilities with retired and current employees as of 31 December 2008 and 2007 as well as the funds’ patrimonial situation were as follows:

2008Caima Indústria Silvicaima Celtejo CPK Celbi Total

Present value of past services liabilities 2.989.026 226.679 14.903.246 - 7.397.736 25.516.687

Pension Funds patrimonial situation 2.680.365 378.449 11.955.771 1.597.021 7.767.535 24.379.141

2007Caima Indústria Silvicaima Celtejo CPK Celbi Total

Present value of past services liabilities 3.434.044 282.148 15.855.597 2.370.686 6.954.702 28.897.177

Pension Funds patrimonial situation 3.134.641 429.816 13.171.810 1.732.373 8.668.184 27.136.824

The detail of the amounts recorded in the Statement of Profit and Losses under the caption “Payroll expenses” related with the benefit Pension plans defined in the year ended 31 December 2008 and 2007 is as follow:

2008 2007

Current services cost (731.787) (652.709)Interest on obligation (1.316.100) (1.370.776)Actuarial gains/(losses) 2.082.097 (139.118)Return on plan assets (2.011.911) 1.067.243

(1.977.701) (1.095.360)

The movement in the present value of responsibilities for past services during the years ended 31 December 2008 and 2007 is as follow:

2008 2007

Responsibilities in the beginning of the year 28.897.177 27.796.855

Benefits paid by the Pension Funds (975.594) (1.062.281)Current service cost 731.787 652.709Interest costs 1.316.100 1.370.776Actuarial (gains)/losses (2.082.097) 139.118Responsabilities extinguished by the CPK closing activity (Note 4.5) (2.370.686) -

Responsibilities in the end of the year 25.516.687 28.897.177






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The movement verified on Pension Funds patrimonial situation during the years ended 31 December 2008 and 2007 is as follow:

2008 2007

Pension funds value at the beginnig of the year 27.136.824 26.981.862

Contributions 250.000 150.000Paid pensions (995.772) (1.062.281)Return on plan assets (2.011.911) 1.067.243

Pension funds value at the end of the year 24.379.141 27.136.824

To cover differences between the present value of past services liabilities and the funds patrimonial situation, the Group has recorded under the caption “Other current liabilities – accrued expenses” (Note 25) the amount needed to cover those differences, when positive. Those liabilities, except for Celbi, were determined using the “Projected Unit Credit” method, the TV 73/77 mortality tables and the EKV-80 handicap tables. In addition to the technical parameters referred to above, for Caima and Silvicaima, the valuation was performed assuming real long term profitability of 3% when compared with salary increases and 6% regarding pension increase. In the calculation of Celtejo and CPK’s liabilities it was assumed a real long term profitability of 4.5% when compared with pension increases of 1.25%. For Celbi, those liabilities were determined using the “Projected Unit Credit” method, the GKF95 mortality tables and the SR 2001 handicap tables. In addition to the technical parameters referred to above, the valuation was performed assuming real long term profitability of 4% until the age of retirement and a rate of 3% after that that age and a salary increase of 2.5%.

b) Other commitments

As of 31 December 2008, the contractual obligations for the acquisitions of fixed assets assumed by the Group companies amounted to, approximately, 72,000,000 Euro (380,000,000 Euro as of 31 December 2007) (Note 6). As of 31 December 2008, the estimated value for assumed responsibilities with the acquisition of raw materials, evaluated at the average market price of stand wood, amounts to, approximately, 14,400,000 Euro (17,200,000 Euro as of 31 December 2007).

29. LEASE CONTRACTS

29.1 OPERATIONAL LEASES As of 31 December 2008 it was recognized in the Statement of Profit and Losses of the year an amount of, proximately, 7,200,000 (3,900,000 Euro as of 31 December 2007) of operational leases paid rents, essentially, related with explored lands by the Group. Additionally, at the balance sheet date the Group held as lessee, operational lease contracts, which minimal lease payments present the following maturity:

Year

2009 7.978.5162010 7.749.2182011 7.886.7972012 and next 111.203.419

134.817.950






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As of 31 December 2007 the Group held as lessee, operational lease contracts, which minimal lease payments present the following maturity:

Year

2008 2.575.7512009 2.279.5372010 1.404.0912011 and next 7.764.039

14.023.418

29.2 FINANCIAL LEASES

As of 31 December 2008, the responsibilities reflected in the Balance Sheet related to financial leases had the following maturity:

Year

2010 187.6892011 140.1042012 and next 163.397 Mid-long term total (Note 21) 491.1902009 (short term) 192.678

683.868

As of 31 December 2007, the responsibilities reflected in the Balance Sheet related to financial leases had the following maturity:

Year

2009 159.6512010 107.4682011 and next 81.954 Mid-long term total (Note 21) 349.0732008 (short term) 473.689

822.762

30. RELATED PARTIES The participated companies of the Group realize between them and at market prices, transactions that classifies as transactions with related parties. In the consolidation procedures the transactions between the companies included in consolidation by the full consolidation method are eliminated, once the consolidated financial statements present the owner and its subsidiaries information as one single company.






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As of 31 December 2008 and 2007 the balances and transactions with related parties are as follow: Transactions 31.12.2008 31.12.2007 31.12.2008 31.12.2007 31.12.2008 31.12.2007 31.12.2008 31.12.2007Parent company - - - - - - 379.225 78.384Group companies (a) 86.074.392 134.057.182 69.958.440 124.622.918 9.265.844 6.380.618 7.788.767 5.068.600Associated companies (b) 483.167 584.354 9.083.244 12.196 - - 976.800 260.813Other related parties (c) 21.484.961 - 29.000.836 10.006.422 - - 121.052 972.821

108.042.520 134.641.536 108.042.520 134.641.536 9.265.844 6.380.618 9.265.844 6.380.618

Fixed Assets Transactions 31.12.2008 31.12.2007 31.12.2008 31.12.2007Parent company - - - -Group companies (a) - 28.064.729 31.721.210 30.414.729Associated companies (b) - - - -Other related parties (c) 31.721.210 2.350.000 - -

31.721.210 30.414.729 31.721.210 30.414.729

Balances 31.12.2008 31.12.2007 31.12.2008 31.12.2007 31.12.2008 31.12.2007 31.12.2008 31.12.2007Parent company 172.806 191.878 962.461 742.786 11.000.000 3.000.000 - -Group companies (a) 84.135.976 164.699.435 88.705.376 162.988.000 130.125.764 94.146.357 165.905.265 107.766.262Associated companies (b) 25.406 51.683 2.907.144 - 18.122.905 10.619.905 - -Other related parties (c) 14.102.526 - 5.861.732 1.212.210 11.114.525 - 4.457.929 -

98.436.714 164.942.996 98.436.713 164.942.996 170.363.194 107.766.262 170.363.194 107.766.262

Fixed assets acquisitions Fixed assets disposals

LoansAccounts receivable Accounts payable Obtained Granted

Sales and services rendered Purchases and services obtained Interest income Interest expense

(a) All entities consolidated by the full consolidation method as of 31 December 2008 and 2007 (Note 4.1) except from CPK – Papel Kraft, S.A. in descontinuing activity as of 31 December 2008 (Note 4.5);

(b) All entities consolidated by the equity method as of 31 December 2008 and 2007 (Note 4.2); (c) Were considered as related parties CPK – Papel Kraft, S.A. (Note 4.5) and Group Ramada companies (Note 4.1) as of 31

December 2008, and Ródão Power – Energia e Biomassa do Ródão, S.A. as of 31 December 2007. Besides the companies included in consolidation (Note 4), entities considered as related parties as of 31 December 2008 can be detailed as follow:

Cofihold, S.G.P.S., S.A. F. Ramada – Investimentos, SGPS, S.A. (Note 5) Cofina, SGPS, S.A. Cofina B.V. Efe Erre Participações, S.G.P.S., S.A. Cofina Media, SGPS, S.A. Presselivre – Imprensa Livre, S.A. Edisport – Sociedade de Publicações, S.A. Edirevistas – Sociedade Editorial, S.A. Medianfin, SGPS, S.A. Metronews – Publicações S.A. Grafedisport – Impressão e Artes Gráficas, S.A. VASP – Sociedade de Transportes e Distribuições, S.A. Destak Brasil – Editora de Publicações, S.A. Destak Brasil – Empreendimentos e Participações, S.A. O Sol é Essencial, S.A.

31. KEY MANAGEMENT COMPENSATIONS

The compensations attributed to key managers, the Board of Directors in Altri´s case due to its governance model, during the years ended 31 December 2008 and 2007 amounted to 1,033,200 Euro and 2,000,820 Euro, respectively. The remunerations attributed to key managers can be detailed as follow:

31.12.2008 31.12.2007

Fixed remunerations 493.200 850.820Variable remunerations 540.000 1.150.000

1.033.200 2.000.820






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32. OTHER OPERATIONAL INCOME The detail of other operational income in 2008 and 2007 are as follow:

31.12.2008 31.12.2007

Gains in fixed assets disposals 8.527.411 3.742.644Supplementary income 1.333.966 2.179.741Exploration/Investment subsidies 1.312.806 987.526Impairment losses reversals (Note 20) 366.918 964.206Compensations received 67.037 302.073Other income 13.086.858 1.673.525

24.694.996 9.849.716

As of 31 December 2008, the caption “Other income” includes the part of the gain from the sell of Ródão Power – Empresa e Biomassa do Ródão, S.A. to the associated company EDP – Produção Bioeléctrica, S.A. (Notes 4.2, 4.5 and 25).

33. OTHER OPERATIONAL EXPENSES

The detail of other operational expenses in 2008 and 2007 are as follow:

31.12.2008 31.12.2007

Losses in commodities derivative contracts (Note 26) 6.141.384 4.364.159Claims 894.367 -Indirect taxes 557.917 1.398.013Donations 117.952 186.860Doubtful debts written-off - 51.265Other expenses 1.006.041 1.803.489

8.717.661 7.803.786

34. NET FINANCIAL PROFIT

Consolidated net financial profit for the years ended 31 December 2008 and 2007 is made up as follows:

31.12.2008 31.12.2007

Gains and losses in other investments:Gains in investments measured at fair value trough Profit and Losses - 972.529Losses in investments measured at fair value trough Profit and Losses (520.597) (353.470)

(520.597) 619.059Financial expenses:

Interest (Note 19) (34.528.851) (35.933.846)Exchange losses (1.181.370) (903.964)Losses in derivatives (8.108.548) -Other financial expenses (2.556.587) (2.248.023)

(46.375.356) (39.085.833)Financial income:

Interest 6.665.365 4.127.497Exchange gains 1.990.329 269.444Gains in derivative instruments 1.666.859 658.808Other financial income 453.312 189.968

10.775.865 5.245.717






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As of 31 December 2008 the captions "Losses on derivatives" and "Gains on derivatives" in the net amount of (6,441,689) Euro include the amount of (4,269,205) Euro related with derivatives effective on 31 December 2008 (Note 26) and the amount of (2,172,484) Euro for the net loss on derivatives that matured or were paid until that date. The caption “Other financial expenses” includes, mainly, expenses with the loans settlement, which are recognized in the Statement of Profit and Losses trough the period of life of those loans (Note 19). The caption “Gains and losses in associated companies” correspond, mainly, to the appropriation of the Group quote of the results in the investments in associated companies.

35. EARNING PER SHARE

Earning per share for the years ended 31 December 2008 and 2007 were determined taking into consideration the following amounts:

31-12-2008 31-12-2007

Share number considered for the computation of basic and diluted earning 102.565.836 102.565.836

Net profit considered for the computation of basic and diluted earning for continuing operations 4.109.378 20.924.585

Continuing operations earnings per shareBasic 0,04 0,20Diluted 0,04 0,20

Net profit considered for the computation of basic and diluted earning for continuing and non-continuing activities 4.668.149 35.193.702

Continuing and non-continuing operations earnings per shareBasic 0,05 0,34Diluted 0,05 0,34

As of 31 December 2008 and 2007 there are no diluted effects of the circulation shares number.

36. SEGMENTAL INFORMATION

On 16 April 2008 was signed the F. Ramada – Aços e Indústrias, S.A. demerger public deed. Under the terms of the project, the planned reorganization implies the split of Altri's two business units that manage equity holdings in the pulp and paper sector and in the steel and storage systems sector. This reorganization aimed a bigger focus and transparency on ALTRI’s business, and giving each of the areas an opportunity to be better seen and better evaluated by the market. Furthermore, in the end of 2008 ALTRI decided to shut down its Kraft paper industry unit. This decision was based on the declining Kraft paper business perspectives and on the poor contribute that this unit was giving to Group Altri’s EBITDA (a tendency that showed no possibility of reversion). Therefore, the contributes of this the units mentioned above, on the income statement, was recorded as “Operational units in discontinuation” (Notes 4.5 and 5). This decision allows Altri Group to focus its activity on its core business, production and commercialization of bleached paper pulp form eucalyptus, so the Board of Directors believe that there is only one business segment.






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Sales and services rendered in 2008 and in 2007 by the Group, according to the geographic segments, were as follows:

31.12.2008 31.12.2007Domestic market 67.337.288 117.300.937Foreign market 188.141.928 292.185.031

255.479.216 409.485.968

37. NUMBER OF PERSONNEL

During the years ended 31 December 2008 and 2007, the average number of employees of the companies included in the consolidated financial statements by the full consolidation method was of 726 and 1,246, respectively.

38. DIVIDENDS

In accordance with the decision taken in the General Shareholders Meeting held in 28 May 2008, the Company distributed dividends amounting to 5,128,292 Euro related to dividends (5,128,292 Euro equally distributed in 2007). These dividends were only distributed to the Company’s ordinary shares.

Regarding 2008, the Board of Directors purpose, in their annual report, that the Altri SGPS, SA net profit of 24,649,163.93 Euro was applied as follow: Legal reserves 1.232.458,20Other reserves 23.416.705,73

24.649.163,93

39. ENVIRONMENTAL INFORMATION Following the Kyoto Protocol, the European Union committed herself to reduce the emission of greenhouse gases. Therefore, it has issued a Directive that predicts the commercialisation of carbon dioxide emission licenses. This directive was transposed to the Portuguese legislation and became mandatory since 1 January 2005, namely, for the pulp and paper industry. Following the ministerial dispatch number 2836/2008 dated 5 February 2008, the Portuguese government distributed to the companies the carbon dioxide emission licenses. The Group companies received a free license for the emission of 110,135 tons of carbon dioxide in 2008. If the Group exceeds that amount it will have to buy in the market the remaining licenses. The distribution of the carbon dioxide emission licenses is made in the beginning of the following year, being the emission amounts presented subject to a certification made by an independent entity. Bearing in mind that these licenses refer to the period 2008-2012, in accordance with the estimates for the year 2008, the Group does not expect this new legislation to carry significant additional costs. As of 31 December 2008 the Group has not recorded any liability concerning environmental issues, nor has disclosed any environmental contingency, since the Board of Directors believes that, as of that date, no obligations and responsibilities arising from past events have occurred that lead to significant costs to the Group.

40. SUBSEQUENT EVENTS

In January 2009 the subsidiary company Celbi – Celulose da Beira Industrial, S.A. issued an additional commercial paper program, not yet used, amounting to 65,000,000 Euro (Note 19).






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41. FINANCIAL STATEMENTS APPROVAL

The financial statements were approved by the Board of Directors and authorized for issuance in 28 April 2009. The final approval depends on the agreement of the General Shareholders Meeting.

42. EXPLANATION ADDED FOR TRANSLATION These consolidated financial statements are a translation of financial statements originally issued in

Portuguese in accordance with International Financial Reporting Standards (IFRS/IAS), some of which may not conform or be required by generally accepted accounting principles in other countries. In the event of discrepancies, the Portuguese language version prevails.

The Board of Directors, Paulo Jorge dos Santos Fernandes – President João Manuel Matos Borges de Oliveira Pedro Macedo Pinto de Mendonça Domingos José Vieira de Matos Laurentina da Silva Martins

STATUTORY AUDIT AND AUDITOR’S REPORT

CONSOLIDATED FINANCIAL STATEMENTS

(Translation of a report originally issued in Portuguese – Note 42) Introduction

1. In compliance with the applicable legislation, we hereby present our Statutory Audit and Auditors’ Report on the consolidated financial information contained in the Board of Directors’ Report and the consolidated financial statements of Altri, S.G.P.S., S.A. (“Company”) and subsidiaries for year ended 31 December 2008, which comprise the consolidated balance sheet, that reflects a total of 1,114,850,747 Euro and shareholders’ equity of 86,380,745 Euro, including net profit attributable to the Company’s Equity Holders of 4,668,149 Euro, the consolidated statements of profit and loss, cash flows and changes in equity for the year then ended and the corresponding notes.

Responsibilities

2. The Company’s Board of Directors is responsible for: (i) the preparation of consolidated financial statements that present a true and fair view of the financial position of the companies included in the consolidation, the consolidated results of their operations and their consolidated cash flows; (ii) the preparation of historical financial information in accordance with International Financial Reporting Standards as adopted by the European Union and that is complete, true, timely, clear, objective and licit, as required by the Securities Market Code (“Código dos Valores Mobiliários”); (iii) the adoption adequate accounting policies and criteria and the maintenance of appropriate systems of internal control; and (iv) informing any significant facts that have influenced the operations, financial position or results of operations of the companies included in the consolidation.

3. Our responsibility is to examine the financial information contained in the accounting documents referred to above, including verifying that, in all material aspects, the information is complete, true, timely, clear, objective and licit, as required by the Portuguese Securities Market Code, and to issue a professional and independent report based on our work.

Scope

4. Our examination was performed in accordance with the Auditing Standards (“Normas Técnicas e as Directrizes de Revisão/Auditoria”) issued by the Portuguese Institute of Statutory Auditors (“Ordem dos Revisores Oficiais de Contas”), which require that the examination be planned and performed with the objective of obtaining reasonable assurance about whether the consolidated financial statements are free of material misstatement. An examination includes verifying, on a sample basis, evidence supporting the amounts and disclosures in the financial statements and assessing the significant estimates, based on judgements and criteria defined by the Company’s Board of Directors, used in their preparation. An examination also includes verifying the consolidation procedures used and the application of the equity method, and that the financial statements of the companies included in the consolidation have been appropriately examined, assessing the adequacy of the accounting principles used, their uniform application and their disclosure, taking into consideration the circumstances, verifying the applicability of the going concern concept, verifying the adequacy of the overall presentation of the consolidated financial statements, and assessing if, in all material aspects, the consolidated financial information is complete, true, timely, clear, objective and licit. An examination also includes verifying that the consolidated financial information included in the consolidated Directors’ Report is consistent with the consolidated financial statements. We believe that our examination provides a reasonable basis for expressing our opinion.

of 2

Opinion

5. In our opinion, the consolidated financial statements referred to in paragraph 1 above present fairly, in all material aspects, the consolidated financial position of Altri, S.G.P.S., S.A. and subsidiaries as of 31 December 2008, the consolidated results of its operations and its consolidated cash flows for the year then ended, in conformity with International Financial Reporting Standards as adopted by the European Union and the financial information contained therein is, in terms of the definitions included in the auditing standards referred to in paragraph 4 above, complete, true, timely, clear, objective and licit.

Emphasis

6. As referred to in the Directors’ Report and in the Introductory Note to the financial statements, during the year ended 31 December 2008 the Company demerged the steel and storage systems activity to F. Ramada - Investimentos, SGPS, S.A. with effects from 1 June 2008. Therefore, the balance sheet at 31 December 2008 is not directly comparable with the previous period.

Porto, 28 April 2009 DELOITTE & ASSOCIADOS, SROC S.A. Represented by António Manuel Martins Amaral

REPORT AND OPINION OF THE STATUTORY AUDIT BOARD CONSOLIDATED FINANCIAL STATEMENTS

(Translation of a report originally issued in Portuguese – Note 42)

To the Shareholders of Altri, SGPS, S.A. 1. Report In compliance with the applicable legislation and our mandate, we hereby submit our Report and Opinion, which covers the Management Report and consolidated Financial Statements of Altri, SGPS, S.A. (“Company”) for the year ended 31 December 2008, which are the responsibility of the Company’s Board of Directors. During the year under analysis, the Statutory Audit Board accompanied the operations of the Company and its affiliates, the timely writing up of accounting records, compliance with statutory and legal requirements and the effectiveness of the risk management and internal control systems, having held meetings with the periodicity and length considered appropriate and having always obtained, from the Board of Directors and personnel of the Company and its affiliates, all the information and explanations required. As part of its duties, the Statutory Audit Board examined the consolidated balance sheet as of 31 December 2008, the consolidated statements of profit and loss by nature, cash flow, and changes in shareholders’ funds for the year then ended, and the corresponding notes. Additionally, the Statutory Audit Board examined the Report of the Board of Directors for the year 2008, and fulfilled its duties concerning the review of the qualifications, independence and work of the Statutory Auditor, and reviewed the Statutory Audit and Auditors’ Report and was in agreement with its content. 2. Opinion Considering the above, in the opinion of the Statutory Audit Board, the Management Report and the consolidated Financial Statements are in accordance with accounting, legal and statutory requirements and consequently should be approved by the Shareholders’ General Meeting. 3. Declaration of responsibility In accordance with the terms of the Article 8º paragraph 1, a) of the Securities Code Regulation 5/2008 the members of the Statutory Audit Board declare that, to their knowledge, the Management Report, the Consolidated Financial Statements prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, and other accounting documents required by law or regulation, giving a truthful (fairly) and appropriate image, in all material respects, of the assets and liabilities, financial position and the consolidated results of the Company at 31 December 2008 and that the Management Report faithfully describes the business evolution and position of Altri, SGPS, S.A. and of the companies included in the consolidation perimeter and contains a description of the major risks and uncertainties that they face.

We wish to thank the Company’s Board of Directors and the departments of the Company and its affiliates involved for the assistance provided to us. Porto, 28 April 2009 The Statutory Audit Board João da Silva Natária President of the Statutory Audit Board Manuel Tiago Alves Baldaque de Marinho Fernandes Member of the Statutory Audit Board Cristina Isabel Linhares Fernandes Member of the Statutory Audit Board

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