Anuario 2010 - Techint Contrucciones

Annual Report and Consolidated Financial Statements as of June 30, 2010

TEI&C S.A.

4 | TEI&C S.A.

PERU LNG Project, Peru. Construction of a 408 km 34” gas pipeline

and the respective facilities.

Thecompany

Annual Report | 5

TEI&C S.A. (TEI&C) generates value to its

clients and shareholders by providing design,

procurement, construction and management

services to develop and execute major engineering

and construction projects.

Due to its wide experience in the market, it is capable

of developing high complexity projects, from basic

design to execution, taking care of the environment

and the well-being of the communities.

Nowadays, the Company provides services to the

following market segments: Oil & Gas Upstream,

Energy, Industrial Plants, Oil Refineries, Mining, and

Major Civil and Architecture Works.

TEI&C develops its projects under ISO 9001 standards,

thus assuring the quality required by the client.

With the aim of providing high impact integral

solutions, the Company relies on highly trained

human resources, state-of-the-art engineering

and constructions techniques, a global network of

suppliers and well-proven management skills.

EnergyIron & Steel andothers industriesOil & GasPipelinesMiningOthers

Revenue 09 - 10 by business segment

16% 11%

27%

33%

3%

7%

ArgentinaBrazilPeruMexicoCentral Americaand CaribbeanCanadaChile

Revenue 09 - 10 by geographic area

Others

29%21%

20%

14%6%4%9%

3%

Key figures

Revenue

EBITDA

EBITDA %

Net Income

Equity with Min.Interest

ROE

07-08

997.6

87.5

9%

21.1

372.7

6%

08-09 09-10

213.6

14%

114.4

605.8

19%

1,598.4 1,530.3

211.6

13%

171.5

484.9

35%

USD millions Personnel

21,036 20,63620,603

07-08 08-09 09-10

Revenue

998

1,598 1,530

07-08 08-09 09-10

Board of Directors’ Report

Overview of the Year

Major Works in Progress per Country

Current Structure

Economic and Financial Information

Prospects for Fiscal Year 2010-2011

Board of Directors

Legal Information

Report of the Auditors

Consolidated Statement of Financial Position

Consolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

TEI&C and subsidiaries’ activities

for the period 2009-2010

09

09

12

15

17

22

24

25

28

30

31

33

34

38

40

104

Index

8 | TEI&C S.A.

Atucha II Project, Lima, Argentina. Engineering Services, Supplies and Mechanical

Assembly at the Ancillary Building of the Reactor.

Annual Report | 9

Overview of the yearDuring the fiscal year ended in June 2010, TEI&C and

its subsidiaries recorded sales for USD 1.53 billion.

The most significant projects were developed in

Argentina, Brazil, Peru and Mexico. In addition,

other important projects were developed in

Bolivia, Chile, Central America and Canada by its

subsidiaries, providing engineering, procurement,

construction, operational and management services

to a wide range of clients in the infrastructure,

industrial and energy areas.

Regarding the activities developed in the energy

sector in Argentina, works at Los Caracoles

Hydroelectric Station were completed for Energía

Provincial Sociedad del Estado (EPSE) in the

province of San Juan, and both generation units

became operational in July and December 2009,

respectively. In November 2009, a contract was

executed with the same client for the construction

of the Punta Negra dam, whose works started in

January 2010. This is a project of a similar size as

Los Caracoles, downstream such project.

In addition, works were continued for the assembly

of the piping system in the UKA building of Atucha II

Nuclear Power Plant, for Nucleoeléctrica Argentina S.A.

In the mining area, the works regarding the

extension of the Veladero Mine were completed

and the Company continued with the detail

engineering and procurement management works

for the development of the Pascua Lama project.

Both contracts are performed by Barrick Gold Corp.

from Canada.

Besides, in January 2010, the Company obtained

the Acknowledgement of Completion for the

engineering, procurement and construction

management activities of the Pirquitas Mine Project,

for Mina Pirquitas Inc. Argentine Branch, subsidiary

of Silver Standard Resources Inc. from Canada.

Boardof Directors’Report

10 | TEI&C S.A.

In the oil & gas sector, in December 2009, an

agreement was executed with Petrobras Bolivia for

engineering, procurement and construction of the

Third Processing Train of Sábalo Gas Treatment Plant,

thus resuming activities in the Bolivian market.

In Brazil, the Company’s subsidiary Techint

Engenharia e Construção S.A. (TEBRA) continued

with the development of large projects for

Petrobras. Progress was made in engineering,

procurement and construction (EPC) activities at the

Presidente Bernardes de Cubatão Refinery, at Lot I

Tanks of Refinaria do Nordeste (RNEST), and at the

Landulpho Alves de Matarife Refinery (RLAM). In

addition, TEBRA continued rendering maintenance

and improvement services for the off-shore

platforms at Macaé Northeast and Marlim.

During the fiscal year, this subsidiary was awarded

the contract to develop EPC works in Complexo

Petroquimico do Rio de Janeiro (COMPERJ). In

turn, the project in Gasduc III was successfully

completed, for Transportadora Associada de Gás –

TAG de Petrobras.

In Peru, the Company maintained its leading

position in the pipeline market by getting two new

contracts – Jungle Loops and the Addition of a

fourth pump to the LNG transportation system -

while continuing to carry out other maintenance

services. On the other hand, Peru LNG a 408 KM 34’’

gas pipeline was successfully completed in January

2010, Chiquintirca Gas Compression Plant was also

accomplished by May 2010 while Loop de la Costa

Gas Pipeline was finished by June 2010. All this

contracts were executed for TGP.

In Mexico, EPC works were finished concerning

the Central Thermoelectric Plant of 750 MW, for

Comisión Federal de Electricidad (CFE). Within the

market of high voltage transmission lines and sub-

stations, the projects of SE 1125 Distribution-Second

Phase and SLT 1119 for CFE were continued.

During the fiscal year

ended in June 2010,

TEI&C and its subsidiaries

recorded sales for

USD 1.53 billion.

Annual Report | 11

for Municipalidad de Maldonado, Corporación Vial

de Uruguay and Obras Sanitarias del Estado.

Works in the iron & steel plants continued; for

TenarisSiderca, and TerniumSiderar, in Argentina

and for TerniumHylsa and TenarisTamsa in Mexico.

In the area of steel & iron services, the Company,

through its subsidiaries, continued rendering

services of Heavy Duty Cleaning, Industrial Cleaning

and Electromechanical Maintenance.

In the engineering market, the following activities

were carried out: concept, basic and detail

engineering works; assistance for the development

of technical specifications, and assessment

of investment and site assistance projects for

several clients, including Exxon Mobil, Repsol –

YPF, Transportadora de Gas del Perú (TGP) and

Pluspetrol Peru Corporation S.A.

All these activities were undertaken recognizing the

importance of, and adhering to, the strict compliance

of the rules and regulations which govern the

protection of the environment, and in search of the

constant improvement of safety & health and the

continuous training of human resources.

In Chile, the Company’s subsidiary Techint Chile S.A.

was awarded the Plant Maintenance Service and

Sea Water Drive Systems Construction Contract for

Minera Escondida Limitada, as well as two contracts

with Anglo American Sur S.A., and Engineering

Services for Compañía Minera Casale.

In Central America and the Caribbean, the Company’s

subsidiary Techint International Construction Corp.

(TENCO) is carrying out, under an engineering,

procurement, and construction management (EPCM)

contractual arrangement, the Alky Acid Unit and

Acid Regeneration Unit of the Gasoline Optimization

Program Upgrade Project for Petroleum Company of

Trinidad and Tobago (PETROTRIN). Additionally, the

Company’s subsidiary Techint S.A. de C.V. (TEMEX)

continued working in the Sistema de Interconexión

de Países de America Central (SIEPAC Project), an

EPC including 1,850 km of transmission lines and 16

substations, crossing through six countries of Central

America for Empresa Propietaria de la Red S.A. (EPR).

In Canada, Techint E&C Inc. (TECAN) successfully

completed the Alberta Clipper Project, a 345-km

long pipeline. In the second part of the period, the

Subsidiary has focused its efforts on developing

activities in the Oil Sands and other oil & gas

producing areas in Western Canada, bidding C and

EPC projects for execution of pipelines and facilities

in these areas belonging to clients such as Enbridge,

CNRL, Suncor and Husky.

In Saudi Arabia, the Company’s subsidiary Saudi

Techint Ltd. (SAUTEC) has successfully completed

the subcontract it was working on, Nuayyim ASL

Crude Increment Facilities Project, with Saudi

Arabian Oil Co. as the final user. Meanwhile, the

Project awarded last fiscal year, Tanajib-Manifa

Water Pipeline, for JGC Corporation, is in full swing

since last May 2010.

In Uruguay, the Company keeps involved in different

projects in the civil and water infrastructure sector,

12 | TEI&C S.A.

management services to develop and execute major

engineering and construction projects. The main

projects currently in progress are listed below.

Major works in progress per countryTEI&C’s subsidiaries provide full engineering,

procurement, construction, operational and

Country Project Client Contract total amount USD millions

Argentina

Brazil

Canada

Central America and the Caribbean

Chile

Energía Provincial Sociedad del Estado (EPSE)

Nucleoeléctrica Argentina S.A. - Atucha II

Barrick Gold Corp.

Barrick Gold Corp.

Ternium - Tenaris

COMPERJ Petroquimicos basicos

Petroleo Brasileiro S.A. (Petrobras)



ThyssenKrupp (C.S.A.)

Enbridge Pipelines Inc.

Petroleum Company of Trinidad and Tobago Ltd.

Empresa Propietaria de la Red S.A.

Consorcio Abengoa-Inabensa (APCA)

Empresa Propietaria de la Red S.A.

Anglo American Sur S.A.

Minera Esperanza (Antofagasta Minerals S.A.)

Compañía Minera Casale

Minera Escondida Limitada

368

236

136

54

59

1,058

782

380

200

3

251

318

139

57

43

156

133

1

14

(b)

(b)

Punta Negra

Engineering Services, Supplies and Mechanical Assembly at the Ancillary Building of the Reactor

Pascua Lama(a)

Veladero Mine(a)

Works and Services in plants

Unidad de Coque Retardado (COMPERJ)

Diesel Unit of Landulpho Alves-Mataripe Refinery (RLAM)(a)

Gasoline Unit of Pres. Bernardes de Cubatão Refinery (RPBC)

Lot I Tanks Refineria do Nordeste, Abreu e Lima (RNEST)(a)

ThyssenKrupp Companhia Siderúrgica do Atlantico

Canadian Mainline Pipeline Project (Alberta Clipper Project)(a)

Gasoline Optimization Program Upgrade(a)

SIEPAC 1(a)

SIEPAC 2

SIEPAC Substations

Replacement of Mineral Pipeline and Reclaimed Water System

Esperanza Water Pipeline and Concentrate Pipeline

Engineering Services for water and con-centrate transportation system

Mechanical Maintenance

Annual Report | 13

Country Project Client Contract total amount USD millions

Mexico

Peru

Saudi Arabia

Bolivia

Uruguay

Comisión Federal de Electricidad


Ternium Hylsa - TenarisTamsa


Compañía Operadora de Gas del Amazonas S.A.

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

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

JGC Corporation

Petrobras Bolivia

Obras Sanitarias del Estado


Corporación Vial del Uruguay (CVU)


Municipalidad de Maldonado

91

46

87

33

126

73

14

48

87

37

20

8

5

2

(b)

(b)

SLT 1119 Transmission and Transformation of the Southeast (a)

195 SE 1125 Distribution (2° phase)

Works and Services in plants

Petacalco Project

Camisea Maintenance

Jungle Loops - Early Works

Expansion of LNG transportation system - Addition of fourth pump

Tanajib - Manifa Water Pipeline

Third Processing Train of the Sabalo Gas Treatment Plant

Maldonado Effluents

Sanitation of Ciudad de la Costa

Road 18

Sanitation of Maldonado

Bridge over Jose Ignacio Stream

(a) Projects under a consortium. The amount corresponds to total contract

amount at 100%.

(b) The amount corresponds to annual estimated sales.

14 | TEI&C S.A.

CanadaPipelinesCanadian MainlinePipeline Project (Alberta Clipper Project)

BrazilOil & GasGasoline Unit at RPBCDiesel Unit at RLAMLot I Tanks at RNESTCoke Unit (COMPERJ)

UruguayInfrastructure Sanitation of Maldonado Maldonado EffluentsSanitation of Ciudadde la CostaRoad 18Bridge overJose Ignacio Stream

ChileMiningPlant Maintenance ServicesReplacement of Mineral Pipeline – Los BroncesConstruction of Stations and Singular Points – Los BroncesPipelinesEsperanza Water and Concentrate Pipelines

Central Americaand the CaribbeanOil & Gas Gasoline Optimization Program Upgrade EnergySiepac Lots I and IISiepac Substations

Others-ArabiaPipelinesTanajib - Manifa Water Pipeline

MexicoIron & Steel PlantsTernium Plant in MonterreyTenaris Plant in VeracruzEnergyCentral Expansion Petacalco SLT 1119 Transmission andTransformation of the Southeast195 SE 1125 Distribution(2nd phase)

ArgentinaMiningPirquitas MineVeladero MinePascua LamaEnergyAtucha IIPunta Negra Hydroelectric Station Iron & Steel PlantsTernium Plant in CampanaTenaris Plant in San Nicolas

PeruPipelinesAddition of a fourth pumpJungle LoopsCAMISEA Pipeline Maintenance

BoliviaOil & GasThird Processing Train for Sábalo

Annual Report | 15

In March, Preglosid S.L.U. (PREGLOSID) subscribed

and paid in a capital increase in its subsidiary

Sidernet Mexicana S.A. de C.V. for USD 1,7 million.

By mid-April 2010, TEI&C contributed to PREGLOSID

the direct participating interest (97.50% of the

capital stock) it held in the Argentine company

Prestaciones Globales Siderúrgicas S.A. Upon this

transaction, PREGLOSID increased its capital stock,

thus consolidating in its shareholders’ equity the

transactions for the supply of steel and iron services

recorded in Argentina, Mexico and Venezuela.

In June 2010, the shareholders of the Argentine

companies Tecnomatter Instalaciones y

Construcciones S.A. and Sidernet S.A resolved

a corporate reorganization, consisting in the

capitalization of both companies, the spin off of

Tecnomatter and the subsequent merge of the spin

off with Sidernet, the latter becoming the successor

for the supply of steel and iron services.

For the purpose of unification of the end of the fiscal

year of engineering and construction companies,

the governing bodies have determined December

31 as the most suitable date. Therefore, the Board

of Directors’ Meeting of TEI&C held on December 9,

2009, resolved that next December 31, 2010 will be

the enforcement date.

Current StructureDuring the fiscal year ended June 30, 2010, TEI&C

recorded the following changes in the participating

interests of related companies in the engineering,

construction and service business (see further detail

in note 1 of the Financial Statements):

In September 2009, the Company contributed

to Techint Ingeniería y Construcciones S.L.U.

(hereinafter, TIC) the direct participating interests it

held as of such date in Argentine engineering and

construction companies, 97.71% of the capital stock

of Techint Inversiones S.A.I.F. and 38.94% of the

capital stock and voting rights of Techint Compañía

Técnica Internacional S.A.C.I. Upon this transaction,

TIC increased its capital stock, thus becoming

also the European holding of this business by

concentrating the operations in Argentina, Mexico,

Canada and Central America.

Throughout this fiscal year, the Mexican subsidiary

Techint S.A. de C.V. (TEMEX) continued with

transactions aimed at reorganizing its business

areas. In August 2009, it transferred together

with Constructora Mexicana Electromecánica y

de Instrumentación, S.A. de C.V. (COMEI) 60%

of the shareholding in Norpower, S.A. de C.V.,

and 100% of the shares of TGT de México, S.A.

de C.V. to companies of the energy sector of the

Techint Group. After the recomposition of capital

of Terminal Portuarias del Pacífico S.A.P.I. de C.V.

(TPP), subsidiary of TEMEX Carbonser S.A. de C.V.,

TEMEX sold its whole participating interest. Finally,

in June 2010, TEMEX acquired 25% of the shares of

Sociedad Mexcarbón S.A. de C.V. and of Sociedad

Carbonser, S.A. de C.V., since the relevant contract

undertaking such purchase had been executed in

November 2008. In December 2009, Tecnopower

S.A. de C.V. was created, but to this date this

company has not engaged in any business activities.

Besides, TEMEX wound up three companies whose

purposes had already been performed.

16 | TEI&C S.A.

The family tree for TEI&C (including the most importantcompanies) as of June 30, 2010, is as follows:

FLINWOK

TEI&C S.A.(Uruguay)

CARBONSER S.A. de C.V. (Mexico)

MEXCARBON S.A. de C.V. (Mexico)

Techint S.A.(Nicaragua)

Techint Servic S.A. de C.V. (Mexico)

Techint S.A. de C.V.(Honduras)

Techint E&C S.A. de C.V.(El Salvador)

Techint S.A.(Guatemala)

Servicios Siderúrgicos SERSISA S.A. (Venezuela)

PREGLOSID S.L.U.(Spain)

Techint Ing y Const S.L.U.(Spain)

BV de NIEUWE WEG(the Netherlands)

Techint S.A. de C.V. (Mexico)

COMEI S.A. de C.V.(Mexico)

Sidernet de Vz C.A.(Venezuela)

Sidernet S.A. de C.V.(Mexico)

SICI S.A. de C.V.(Mexico)

Energ Tamaulipas S.A.de C.V. (Mexico)

Techint E&C Inc.(Canada)

Techint S.A.(Panama)

Costa Azul BMVT S.A.de C.V. (Mexico)

Tanks Tech S.A. de C.V.(Mexico)

Elina 406 S.A. de C.V.(Mexico)

BVT LNG Costa Azul S.R.L. (Mexico)

Nitroelina S.A. de C.V.(Mexico)

100%

100%

99.92%

100%

100%

25%

40%

40%

100%

100%

37.84%

51%

50%

70%

51%

99%

99%

96%

98%

99%

50%

50%

75%

60%

1%

1%

4%

2%

1%

60%

62.16%

Others

49%

Others

49%

Others

50%

Others

30%

Other OT

99.999%

50%

Others

50%

Others

100%

0.0001%

Prest. Glob. Siderúrgicas S.A.I.F. (Argentina)

Sidernet S.A.(Argentina)

97.5%

1.81%

TEARG

2.5%

TEARG

1.19%

FLINWOK

97%

Flinwok S.A.(Uruguay)

100%

100%

Techint Comp Tec Int S.A.C.I. (Uruguay)

Tecnomatter In y Cons S.A.I.F. (Argentina)

TENCO(Colombia Branch)

Saudi Techint Ltd (Saudi Arabia)

96,94%

60%

100%

38.94%

Techint Inversiones S.A.I.F. (Argentina)

Techint Comp Tec Int S.A.C.I. (Argentina)

97.71%

53.68%

7.38%

FLINWOK

0.09%

TEI&C S.A.

3.06%

TEINVA

23.12%

0.01%

76.88%

99.99%

Fluor Techint S.R.L. Consty Serv Ltda (Chile)

Techint Chile S.A.(Chile)

Techint S.A.C.(Peru)

50%

50% Others

40% Others

Cia. Inv. Ferroviaria S.A.I.F. (Argentina)

Ferroexpreso Pampeano S.A. Conc (Argentina)

80%

22.86%

Others

20%

Others

77.14%

Coincar S.A.(Argentina)

TECHINT (Trinidad & Tobago Branch)

100%

Techint Ing y Const S.A.(Bolivia)

95%

65%

35%

Others

TEBRA(Brazil)

SOCOMINTER(Brazil)

99.91%

96%4%

2.5%

TEINVA

2.5%

TEI&C S.A.

Techint Int Const Corp(TENCO) (Bahamas)

100%

2.29%

Annual Report | 17

Economic and financial information

Summary of Income StatementUSD millions

June 30, 2010 June 30, 2009

Revenues from construction contracts and other services

Cost of sales

Gross profit

General, administrative and selling expenses

Other income and expenses, net

Operating income

Gain from the purchase and sale of shares and investments

Financial results, net

Result from investments in companies

Income before income tax

Income tax expense

Net income from continuing operations

Income / (Loss) from discontinued operations

Net income for the year

Attributable to

Equity holder of TEI&C

Non-Controlling interests

1,598.4

(1,332.2)

266.2

(109.5)

1.0

157.7

10.7

21.2

(0.4)

189.2

(14.4)

174.8

(3.3)

171.5

162.0

9.5

171.5

Gross margin reached USD 304.6 million, an increase

of USD 38.4 million with respect to the previous fiscal

year, growing from 17% to 20% on sales.

EBITDA (Earnings before Interest, Tax, Depreciation

and Amortization) for this fiscal year amounted to

a total of USD 213.6 million, representing 14% on

sales, as compared to USD 211.6 million and 13% of

the previous fiscal year, respectively.

The Company’s very good performance during this

fiscal year is reflected in its economic and financial

position.

Revenues of the fiscal year ended June 30,

2010 reached the sum of USD 1,530.3 million,

representing a 4% decrease with respect to the

previous fiscal year.

1,530.3

(1,225.7)

304.6

(134.9)

(4.9)

164.8

0.3

(2.1)

2.7

165.7

(56.5)

109.2

5.2

114.4

109.8

4.6

114.4

18 | TEI&C S.A.

Financial results showed a loss of USD 2.1 million,

compared to the profit of USD 21.2 in the previous

fiscal year, mainly due to exchange differences.

Finally, net income was USD 114.4 million,

representing 8% of revenues, as compared to the

sum of USD 171.5 million and 11% in previous

period, respectively.

Current liabilities, the decrease is due to a sharp

decline in borrowings and trade and other payables.

Thus, the Company’s working capital, as of the end

of the fiscal year, amounts to USD 319.9 million,

representing an increase of USD 112.9 million with

respect to fiscal year 2008/09.

Within non-current assets and liabilities, there was

an increase mainly due to revaluation of property,

plant and equipment and borrowings, respectively.

General, administrative and selling expenses, with

respect to sales showed an increase, representing

9% with respect to 7% of the previous fiscal year,

mainly originated by the escalation in the different

markets where the Company operates.

The other operating results have recorded a loss of

USD 4.9 million, mainly due to a decreased value in

some Property, Plant & Equipment as a result of the

assessment performed by independent professionals.

TEI&C’s consolidated majority shareholders’ equity

as of June 30, 2010 reaches USD 577.7 million as

compared to USD 450.2 million at the beginning of

the fiscal year. The increase of USD 127.5 million is

mainly due to the income obtained, the revaluation

of machinery, net of cash dividend distribution

(USD 33 million).

Current assets have recorded similar values to

those of the previous fiscal year. With respect to

Summary of Balance Sheet USD millions

June 30, 2010 June 30, 2009

Non Current Assets

Current Assets

Equity

Shareholders

Non-Controlling interests

Non Current Liabilities

Current Liabilities

399.7

804.2

1,203.9

577.7

28.1

113.8

484.3

1,203.9

369.8

802.0

1,171.8

450.2

34.7

91.9

595.0

1,171.8

Annual Report | 19

(USD 33 million), mainly, generated an application

of funds of USD 116.1 million.

The main financial indicators are:

All indicators are very satisfactory, and reveal TEI&C’s

good performance in the execution of its operations.

As regards the financial situation, there was a cash

and cash equivalents net increase of USD 59.6

million along the fiscal year, with a final balance of

USD 282.4 million.

TEI&C’s cash increased USD 199.1 million from its

operating activities, which is mainly associated

to the income for the period, net of the items that

didn’t generate cash movements and an increase in

the working capital.

Related to investment activities, there was a cash

decrease of USD 27 million due to the purchases

of fixed assets, net of proceeds from disposal of

those assets.

Regarding financing activities, the repayment of

borrowings and the dividend distribution

Summary of Cash Flow Statement USD millions

June 30, 2010 June 30, 2009

Net cash and cash equivalents at the beginning of the year

Net cash generated by operating activities

Net cash (used in) generated by investing activities

Net cash (used in) financing activities

Net increase in cash and cash equivalents

Effect of exchange rates changes

Net cash and cash equivalents at the end of the year

Indicators

June 30, 2010 June 30, 2009

Financial solvency

Liquidity

Indebtedness

Gross margin

2.01

1.66

0.99

20%

1.71

1.35

1.42

17%

222.8

199.1

(27.0)

(116.1)

56.0

3.6

282.4

131.0

101.4

37.4

(38.8)

100.0

(8.2)

222.8

20 | TEI&C S.A.

Health, Safety and Environment (HSE)Techint has developed a preventive vision focused

on a commitment to safety, occupational health,

environmental protection and the welfare of

communities. In this respect, the Integrated

Management System (IMS) has proved to be

suitable for a corporate management focused

on prevention as to industrial safety, health and

environmental protection.

The system is focused on the identification of risks

associated to the work developed by the Company,

compliance with local laws, application of coherent

preventive procedures for all the Company’s units

together with an ongoing and widespread training,

and by innovating in methods such as behavior-

based safety and preventive safety observation

at work (OST), the goals of which are focused on

reducing sub-standard actions and conditions to

prevent accidents.

To minimize the repetition of accidents, in addition

to performing other actions addressed to equipment

and facilities and to safety in the working place,

individual performance is monitored by means of a

specific indicator, TACOP (Tablero de Comando de

Actividades Operativas de Prevención – Preventive

Actions Command Switchboard- PACS), with the

basic goal of reducing occurrence of behaviors

characterized by non-compliance with safe

operating rules and practices, thus promoting a

strong commitment of employees to become aware

and internalize preventive conducts. This approach

involves management and workers alike, as well as

sub-contractors.

Since its implementation, the IMS has resulted in

the reduction of global accident rates (Frequency

Rate and Seriousness Rate) by over 80%, and this

shows a substantial improvement in preventive

control in execution of works, as well as the

acknowledgement of clients.

•

•

•

The IMS is audited by Det Norske Veritas (DNV)

and certified under international standards (ISO

14.001:2004 and OHSAS 18.001:2007).

Regarding the latter, 21 million hours were

devoted to pipeline works, 10 million hours to oil

& gas services, 7 million hours to refineries and 5

million hours to industrial works without disabling

accidents, in addition to the recognition for good

performance in prevention by our leading clients,

such as Barrick, Petrobras and Hunt Oil, and

partners such as Fluor Daniel.

QualityThe Company is always seeking to constantly

meet and exceed the expectations of its clients,

shareholders, collaborators, suppliers and the

communities where it operates.

In particular, with respect to our clients, this entails

a special focus on the quality of the products and

services provided.

From our processes standpoint, we are clearly

oriented to continuous improvement, paying special

attention to efficiency, simplification of processes

and value added in each of our operations.

In the 2009 – 2010 period, we have completed the

following actions:

Substantial completion of the review and update of

the Company’s Documentary Database.

Redefinition and establishment of the main Quality

Indicators for products associated to the Projects

developed by the Company.

Quantitative and qualitative improvement of

measurement of Client’s Satisfaction in the different

projects, by deeply focusing on the cross-sectional

Annual Report | 21

analysis of information obtained and on generating

actions for improvement.

Boosting and improvement in measurement and

use of quality management indicators for projects,

in particular the PQI (Project Quality Index).

Improvement of the single database of findings

follow-up, by establishing the status follow-up of

each one of them in the projects, as well as an alert

system for the different functional areas with a

direct responsibility.

In December 2009, the Company was recertified

pursuant to ISO 9001:2008 of Quality Management

Systems (certification in force since 1996).

The Company’s Management has decided to

maintain the direction adopted in previous years,

focused on the unification and improvement of

methodologies and the reliance on truthful and

updated information so as to minimize risks. It

also seeks to prevent problems and ensure the

predictability of results in order to comply with our

commitment to meet and exceed the expectations

of all related stakeholders.

Human resourcesHuman resources management is based on the

use of several tools enabling to draft, implement

and follow up plans for personnel development

and training. The long training cycles in this

industry demand a strict planning in order to

anticipate the skills that will be required to face

business challenges. This planning is translated

into recruitment, training and development plans

involving all the Company’s personnel. Thus,

Techint seeks to have within the Company the talent

required to take part in the projects submitted by

our clients.

With a remarkable emphasis on development of

technical and managerial competencies, during

this fiscal year, the Company developed a training

program that comprised different corporate

levels. These actions allowed that over 3% of

worked man-hours were devoted to training. The

foundations of the training plan continued to be

the Project Management Program, addressed to

professionals in different areas of the Company

with the potential required to hold key positions in

project management, and the Young Professionals

Program, seeking to speed up the insertion of newly

graduated professionals in the business. Other

programs are also worth mentioning, such as those

addressed to supervisors of the Company’s projects,

as well as the external and in-house programs

carried out in the Engineering Direction.

•

•

•

22 | TEI&C S.A.

Prospects for fiscal year 2010-2011Although last year’s international crisis has not yet

concluded and still affects the activity of the markets

where the Company operates, we anticipate

reasonable general perspectives since clients seem

to have decided to continue with various investment

projects.

Against this backdrop, the Company subsidiaries’

strategy is to focus on keeping an active presence

in the market of large infrastructure, industrial and

energy works, especially where this presence makes

the difference due to our knowledge, expertise or

track record.

Thus, we continue working to accompany our

clients under the new market conditions, in order to

offer creative alternatives that facilitate investment

decision-making. These alternatives include the

search for technical and financing strategies that

may involve the multilateral lending agencies and

export-promotion agencies of other countries, so

as to work hand in hand with our clients from the

initial stages of study of their investment projects.

In the Oil & Gas sector, the Company is closely

following the development of projects in Argentina,

Brazil, Canada, Colombia, Mexico, Peru and Trinidad

& Tobago. We foresee important opportunities for

the execution of engineering and construction

works in Oil and Gas Transportation Projects

in Peru, Bolivia and Colombia (where we were

recently awarded the engineering contract of

OCENSA’s pumping stations, the first one since the

reopening of Bogota’s business office), as well as in

processing facilities – such as petrochemical plants

and refining – in Brazil (Premium I and Premium II),

Colombia, Peru and Trinidad & Tobago where we are

planning to participate in the corresponding bidding

processes. In Argentina a contract was signed

after the end of the fiscal year for the construction

of a new gas oil hydrotreatment (HTG) plant of

La Plata refinery for YPF, and the Company keeps

The Company

subsidiaries’ strategy is to

focus on keeping an active

presence in the market

of large infrastructure,

industrial and energy

works, especially where

this presence makes the

difference due to our

knowledge, expertise or

track record.

Annual Report | 23

In the Energy area, in Argentina, works will continue

at the Punta Negra hydroelectric station and other

products are being analyzed. After the end of this

fiscal year, a contract was executed for a new stage

in the Atucha II project, thus proving the Company’s

active involvement in the Argentine nuclear plan.

In Mexico, the Company seeks to keep its current

share in the Power Transmission and Distribution

system of the Mexican market, with an active

participation in this sector. At the beginning of

the new fiscal year, the proposal of the Kepco-

Samsung-Techint consortium was signed with

Comisión Federal de Electricidad for the Combined

Cycle Power Plant North II project. The Company

has also focused on the segment of engineering

services which seems to be an interesting niche

for development in the Mexican market, and has

participated in bids submitted to private clients.

The brief description above shows the Company’s

willingness and efforts to maintain its presence

and leadership in the Latin American engineering

and construction market, showing its skills

in the completion of important projects of a

multidisciplinary nature and its high compliance rate.

This Board wishes to express its gratitude to all

employees of TEI&C and its subsidiaries for the

cooperation and effort shown in the project carried

out during the fiscal year. We would also like to

acknowledge financial institutions, suppliers,

customers and sub-contractors for their trust,

assistance and cooperation.

The Board of Directors

its business activities for future undertakings. In

Bolivia, the Company expects to quote several

works for gas separation plants. Meanwhile, in

Canada, it is majorly pursuing opportunities in two

fields Pipelines (with projects out for bid from major

clients such as Transcanada and Enbridge) where

Techint will participate in the bidding process for

the Canadian portion of Keystone, a liquids pipeline

for Transcanada that runs from Hardisty in Alberta

to facilities in Houston, TX. And Oil Sands where

Techint has participated in bid processes for EPC

thermal (in-situ) projects for Husky Energy; next

year it is expected to participate in similar or mine-

type projects in the oil sands for Total, Statoil, CNRL

among others.

Regarding the Mining area, as the sector becomes

stable and the prices of the main minerals recover

and/or improve, we expect that the activities

in several projects –suspended because of the

crisis– will be resumed. In this case, we foresee

important opportunities in copper and other

mineral developments in Peru and Chile; carbon

developments in Colombia; and in Brazil, Vale has

strong expansion programs where we plan to

bid. In Argentina, the Company’s presence will be

reinforced with the beginning of Stage III of the

Argentine-Chilean bi-national project of Pascua

Lama and the participation in the EPC activities at

Río Colorado Potassium Mine, a project in which the

Company is working at an early stage.

In the Infrastructure sector, the Company will

continue analyzing several opportunities regarding

energy projects and civil infrastructure. Such projects

include San Carlos / Melo / Frontera High Voltage

Line in Uruguay, as well as the water and sewage of

Ciudad de la Costa in Canelones, recently awarded

to our subsidiary by Intendencia Municipal de

Canelones. In Brazil, we foresee high activity in this

area, mainly in sanitation, urban transport system,

railways, and ports; besides the urban infrastructure

for sporting events taking place in 2014 and 2016.

24 | TEI&C S.A.

PresidentCarlos Eduardo Bacher

Vice presidentEduardo Nicolás Rocca Couture

DirectorsRicardo Pascale

María Virginia Jubin Vértiz

Mario Osvaldo Lalla

Luis Pablo Solari Damonte.

Directors were appointed at the Regular

Shareholders’ Meeting held on December 2, 2009.

Officers were appointed at the Board of Directors’

Meeting held on that same date.

Boardof Directors

Consolidated Financial Statements | 25

Denomination: TEI&C S.A.

Legal Address: La Cumparsita 1373 7th Floor

Montevideo (11200)

(598-2) 901-9091

Company activity: Investments

Date of registration: February 16, 2005

Expiration of Company Charter: February 16, 2105

Registry number: RUC 21-5098860012

Capital Stock: Shares: 5,181,537,274 1

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

Parent Company: Techint Limited

Legal address: Equity Trust House

28-30 The Parade, JE4 8XY

St. Helier, Jersey

Channel Islands

Parent Company activity: Investments

Parent Company: Shares: 88.67%

Votes: 88.67%

Legal Information

1 See note 14 to the consolidated financial statements2 UYU: Uruguayan Pesos

26 | TEI&C S.A.

Punta Negra Hydroelectric Station, San Juan, Argentina.

30 | TEI&C S.A.

Notes June 30, 2010 June 30, 2009

Assets

Equity and Liabilities

4

5

6

7

8

16

9

12

8

11

7

13

15

16

17

18

15

17

18

309,723

2,662

1,389

6,774

38,480

40,735

35,848

-

366,953

116,731

67

1,010

283,567

577,642

28,134

18,648

35,490

23,211

36,472

19,308

-

269,906

92,339

102,789

254,376

2,479

355

6,076

41,340

65,139

27,752

5,265

458,091

83,350

4,287

158

223,140

450,175

34,750

6,658

30,614

17,862

36,780

98,463

3,603

304,131

94,542

94,230

Non-current assets

Property, plant and equipment

Intangible assets

Investments in associated companies

Other investments

Trade and other receivables

Deferred income tax assets

Current assets

Inventories

Derivative financial instruments


Construction contracts work in progress

Held - for - sale assets

Other investments

Cash and cash equivalents

Total assets

Equity

Capital and reserves attributable

to the Company's equity holders

Non-controlling interests

Total equity

Non-current liabilities

Borrowings

Deferred income tax liabilities

Trade and other payables

Other liabilities

Current liabilities

Borrowings

Held - for - sale liabilities


Construction contracts work in progress

Other liabilities

Total liabilities

Total equity and liabilities

Consolidated Statement of Financial Position

at June 30, 2010 and 2009

All amounts in USD thousands

The accompanying notes are an integral part of these consolidated financial

statements.

399,763

804,176

1,203,939

605,776

113,821

484,342

598,163

1,203,939

369,765

802,043

1,171,808

484,925

91,914

594,969

686,883

1,171,808


Notes June 30, 2010 June 30, 2009

27

27

27

29

28

28

6

30

24

Continuing operations


Cost of sales

Gross profit

General and administrative expenses

Selling expenses

Other income and expenses, net

Operating income

Gain from the purchase and sale of shares and investments

Financial income

Financial costs

Result from investments in associated companies

Income before income tax

Income tax expense

Income from continuing operations

Discontinued operations

Income / (Loss) from discontinued operations

Net Income for the year (1)

(1) Attributable to:

Equity holders of the Company

Non - controlling interests

Net Income for the year

Consolidated Income Statement

for the years ended June 30, 2010 and 2009



statements.

1,530,337

(1,225,766)

304,571

(124,982)

(9,944)

(4,851)

164,794

246

9,118

(11,189)

2,724

165,693

(56,542)

109,151

5,236

114,387

109,812

4,575

114,387

1,598,409

(1,332,196)

266,213

(101,903)

(7,594)

1,008

157,724

10,678

53,191

(32,033)

(384)

189,176

(14,374)

174,802

(3,251)

171,551

162,038

9,513

171,551

32 | TEI&C S.A.

Gasoline Optimization Program Upgrade Project, Trinidad and Tobago.

As of June 30, 2010, the physical progress rate was 94%.


Notes June 30, 2010 June 30, 2009

4

4

12


Other comprehensive income:

Gain on revaluation of PP&E

Decrease of revaluation of PP&E

Depreciation of reserve for revaluation surplus

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

Currency translation differences

Cash flow hedge

Other comprehensive income for the year net of tax

Attributable to:

Equity holders of the Company

Non - controlling interests

Consolidated Statement of Comprehensive Income




statements.

114,387

55,995

(4,967)

-

-

(158)

(215)

165,042

157,977

7,065

165,042

171,551

6,178

-

3,269

508

(60,828)

215

120,893

120,653

240

120,893

34 | TEI&C S.A.

Attributable to the Company’s Equity Holders

Capital Stock Irrevocable Contributions

Legal Reserve

72,317

-

-

-

-

-

-

-

-

-

(72,317)

-

-

-

-

2,293

-

-

-

-

-

-

-

-

-

-

-

-

-

2,293

Balance at June 30, 2008


Other comprehensive income

Gain on revaluation of PP&E net of tax (see note 4)

Depreciation of reserve for revaluation surplus net of tax

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

Changes in equity reserves (see note 12)


Total comprehensive income for the year

Capital Surplus (see note 1)

Disposals of reserve for investment sale

Resolution of the Special Shareholders' meeting held on 09.30.08:

Capitalization of irrevocable contributions

Resolution of the Shareholders' meeting held on 11.07.08:

Board of Directors' fees

Dividend distribution (1)

Changes in non - controlling interests


Consolidated Statement of Changes in Equity



146,218

-

-

-

-

-

-

-

-

-

72,317

-

-

-

218,535

(1) The dividends were approved by the Board of Directors’ meeting held on May 8,

2009 and May 20, 2009 and were ratified by the Shareholder's meeting held on

December 2, 2009.


(1,154)

-

-

-

-

-

-

-

(2,884)

-

-

-

-

-

(4,038)

9,127

-

-

-

-

-

(51,555)

(51,555)

-

-

-

-

-

-

(42,428)

63,018

-

6,178

(14,927)

(2,758)

-

-

(11,507)

-

-

-

-

-

-

51,511

-

-

-

-

-

215

-

215

11,914

(11,914)

-

-

-

-

215

60,647

162,038

-

18,196

3,266

-

-

183,500

-

-

-

(60)

(20,000)

-

224,087

20,243

9,513

-

-

-

-

(9,273)

240

-

-

-

-

-

14,267

34,750

372,709

171,551

6,178

3,269

508

215

(60,828)

120,893

9,030

(11,914)

-

(60)

(20,000)

14,267

484,925

CapitalSurplus

CumulativeTranslation

Adjustments

Reserve for PP&ERevaluation Surplus

OtherReserve

RetainedEarnings

Non - ControllingInterests

TotalEquity

36 | TEI&C S.A.

Attributable to the Company’s Equity Holders

Capital Stock Irrevocable Contributions

Legal Reserve

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

2,293

-

-

-

-

-

-

-

-

-

9,632

-

-

-

-

11,925



Other comprehensive income

Gain on revaluation of PP&E net of tax (see note 4)

Decrease of revaluation of PP&E net of tax (see note 4)

Depreciation of reserve for revaluation surplus net of tax

Decrease of reserve for revaluation surplus due to fixed assets disposal net of tax

Changes in equity reserves (see note 12)


Total comprehensive income for the year

Resolution of the Shareholders' meeting held on 12.02.09:

Board of Directors' fees

Legal Reserve

Dividend distribution

Dividend distribution approved by the Board of Directors’

Meeting held on 02.25.10 (2):

Capital Surplus (see note 1)

Changes in non - controlling interests


Consolidated Statement of Changes in Equity (Cont.)



218,535

-

-

-

-

-

-

-

-

-

-

-

-

-

-

218,535

(2) The dividends were approved by the Board of Directors and will be ratified by

the next Shareholder's meeting.

The accompanying notes are an integral part of these consolidated

financial statements.


(4,038)

-

-

-

-

-

-

-

-

-

-

-

-

2,562

-

(1,476)

(42,428)

-

-

-

-

-

-

(2,430)

(2,430)

-

-

-

-

-

-

(44,858)

51,511

-

55,777

(4,967)

(10,771)

(4,015)

-

-

36,024

-

-

-

-

-

-

87,535

215

-

-

-

-

-

(215)

-

(215)

-

-

-

-

-

-

-

224,087

109,812

-

-

10,771

4,015

-

-

124,598

(72)

(9,632)

(24,000)

(9,000)

-

-

305,981

34,750

4,575

218

-

-

-

-

2,272

7,065

-

-

-

-

-

(13,681)

28,134

484,925

114,387

55,995

(4,967)

-

-

(215)

(158)

165,042

(72)

-

(24,000)

(9,000)

2,562

(13,681)

605,776

CapitalSurplus

CumulativeTranslation

Adjustments

Reserve for PP&ERevaluation Surplus

OtherReserve

RetainedEarnings

Non - ControllingInterests

TotalEquity

38 | TEI&C S.A.

Notes June 30, 2010 June 30, 2009

4

5

8

30

20

29

4

28

7

6

Consolidated Statement of Cash Flows



114,387

48,033

812

(35,584)

(310)

414

61,473

6,428

(410)

(13,399)

5,701

(3,768)

(1,600)

7,340

(586)

(205)

(246)

(2,724)

99,964

(12,362)

(80,304)

16,619

617

(11,209)

199,081

171,551

53,215

671

(25,577)

11,429

(244)

14,112

6,242

724

(4,639)

-

(18,948)

(2,061)

18,722

(1,640)

(159)

(10,014)

(384)

(23,148)

29,123

(67,924)

(30,534)

2,327

(21,386)

101,458

Cash flows from operating activities


Adjustments to reconcile net income to cash flow operations

PP&E depreciation

Intangible amortization

Construction contracts in progress

Net provisions

Net allowance for doubtful accounts

Tax accrued

Social security costs

Unrealized gain / losses on derivate financial instruments

Gain from the sales of PP&E

Impairment loss

Interest accrued from trade and other receivables

Discount at current value credits

Interest accrued from borrowings

Financial results, net and others

Result from other investments

Result from the sale of shares and investments

Result from investments in associated companies

Changes in balances corresponding to:

Trade accounts receivable

Material and supplies


Other liabilities

Held - for - sale assets and liabilities net

Currency translation adjustments

Net cash generated by operating activities


Notes June 30, 2010 June 30, 2009

5

13

Cash flows from investing activities

Proceeds from disposal of PP&E

Purchases of PP&E

Purchases of intangible assets

Proceeds from sales of other investments and investment

in associated companies (net)


Increase due to business combination (see note 1)

Decrease due to sale of subsidiaries (see note 1)

Net cash (used in) / generated by investing activities

Cash flow from financing activities

Repayments of borrowings (net)

Changes in non-controlling interests

Board of Director’s fees

Dividend distribution

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Effect of exchange rate changes

Cash and cash equivalents at the end of the year

Non - Cash transactions

Finance leases

Gain on revaluation of machinery, equipment and vehicles,

net of tax effects and decrease

Consolidated Statement of Cash Flows (Cont.)




statements.

24,957

(54,411)

(915)

(2,082)

5,460

-

-

(26,991)

(71,879)

(11,120)

(72)

(33,000)

(116,071)

56,019

222,842

3,565

282,426

3,470

50,810

10,635

(41,711)

(976)

12,526

(4,213)

61,282

(95)

37,448

(14,836)

(3,952)

(60)

(20,000)

(38,848)

100,058

130,984

(8,200)

222,842

7,508

6,178

40 | TEI&C S.A.

1. General Information

2. Accounting policies

a. Basis of preparation

b. Consolidation

c. Foreign currency translation

d. Use of estimates

e. Property, plant and equipment

f. Intangible assets

g. Impairment of non-financial assets

h. Financial assets

i. Offsetting financial instruments

j. Derivative financial instruments

k. Inventories

l. Construction contracts work in progress

m. Other investments

n. Trade and other receivables

o. Trade and other payables

p. Cash and cash equivalents

q. Equity

r. Borrowings

s. Current and deferred income tax

t. Employee benefits

u. Provisions

v. Revenue recognition

w. Leases

x. Held for sale assets and liabilities and

discontinued operations

3. Financial risk management

4. Property, plant and equipment

5. Intangible assets

6. Investments in associated companies

7. Other investments

8. Trade and other receivables

9. Inventories

10. Financial instruments by category

11. Held-for-sale assets

12. Derivative financial instruments

13. Cash and cash equivalents

14. Share capital

15. Borrowings

16. Deferred income taxes

17. Trade and other payables

18. Other liabilities

Indexto the Notes to the Consolidated Financial Statements


19. Provisions

20. Employee benefits

21. Participation in Joint Ventures

22. Contingencies and commitments

23. Restricted assets

24. Discontinued operations

25. Related party transactions

26. Subsidiaries

27. Cost of sales and expenses by nature

28. Financial results

29. Other income and expenses, net

30. Income tax expense

31. Main contracts in progress

32. Subsequent events

42 | TEI&C S.A.

1. General Information

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

Techint Limited, was registered in Uruguay in

February 2005 and is a part of the Techint Group

(“TG”). TEI&C’s purpose is to engage in investments

by holding equity interests in companies or

organizations whose corporate purpose includes

engineering, construction and services. References

in these consolidated financial statements to

“TEI&C” or “Company” refer to TEI&C S.A. and its

consolidated subsidiaries.

During the current fiscal year, TEI&C experienced

some changes in its investment portfolio as regards

its participating interests in companies related to the

engineering, construction and service businesses,

which are detailed as follows:

In September 2009, the Company contributed

to Techint Ingeniería y Construcciones S.L.U.

(“TIC”) the direct participating interests it held

as of such date in Argentine engineering and

construction companies, i.e. 140,516,186 shares,

representing 97.70538% of the capital stock of

Techint Inversiones S.A.I.F. and 125,981,909 shares

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

(“TEARG”), representing 38.94340% of the capital

stock and voting rights. Upon this transaction, TIC

increased its capital stock, and therefore, the new

Company’s participating interest is 5,000,002 shares

plus an issue premium for EUR 81,699,999.99,

thus becoming also the European holding of

this business by concentrating the operations in

Argentina, Canada, Central America and Mexico.

As a result of the capital contribution made in March

2010 by the Company in Socominter Sociedade

Comercial Internacional Ltda. (“SOCOMINTER”),

and the spin off merger of the latter with its parent

company, Techint Engenharia e Construção S.A.

(“TEBRA”), which took place in May, our direct

shareholding in SOCOMINTER is 0.088%.

•

•

•

•

Throughout this fiscal year, the Mexican subsidiary

Techint S.A. de C.V. (“TEMEX”) continues with

transactions aimed at reorganizing its business areas.

In August 2009, it transferred together with

Constructora Mexicana Electromecánica y de

Instrumentación, S.A. de C.V. (COMEI) 60% of the

shareholding in Norpower, S.A. de C.V., and 100%

of the shares of TGT de México, S.A. de C.V. to

companies of the energy sector of the Techint Group.

After the recomposition of capital of Terminales

Portuarias del Pacífico S.A.P.I. de C.V. (“TPP”),

subsidiary of TEMEX, Carbonser S.A. de C.V. sold

its whole participating interest in TPP. Finally, in

June 2010, TEMEX acquired 25% of the shares of

Mexcarbón S.A. de C.V. and of Carbonser, S.A. de C.V.,

since the relevant contract undertaking such purchase

had been executed in November 2008. The difference

between the price paid and the book value was

charged to equity as capital surplus (USD 2.6 million).

In December 2009, Tecnopower S.A. de C.V. was

created, but to this date this company has not

engaged in any business activities.

Besides, TEMEX wound up the companies the

purpose of which had already been performed

or which were inactive, including the following:

Tecnomatter, S.A. de C.V., Elina 407, S.A. de C.V.,

Elinatech S.A. de C.V., and after the end of the fiscal

year, in September 2010, the company Elina Sureste

S.A. de C.V. was also wound up.

In March 2010, Preglosid S.L.U. (“PREGLOSID”)

subscribed and paid in a capital increase in its

subsidiary Sidernet Mexicana S.A. de C.V. for

21,398,889 shares. By mid-April 2010, TEI&C

contributed to PREGLOSID the direct participating

interest it held in the Argentine company

Prestaciones Globales Siderúrgicas S.A., i.e.

8,445,080 shares, representing 97.50% of the capital

stock. Upon this transaction, PREGLOSID increased


All amounts are shown in USD thousands, unless otherwise stated




its capital stock, and therefore, the new Company’s

participating interest is 6,500,001 shares plus an

issue premium for the sum of EUR 1,636,499.99,

thus consolidating in its shareholders’ equity the

transactions for the supply of steel and iron services

recorded in Argentina, Mexico and Venezuela.

In June 2010, the shareholders of the Argentine

companies Tecnomatter Instalaciones y

Construcciones S.A. (“TMR”) and Sidernet S.A.

resolved a corporate reorganization, consisting in

the capitalization of both companies, the spin off of

Tecnomatter and the subsequent merger of the spin

off with Sidernet, the latter becoming the successor

for the supply of steel and iron services.

On July 21, 2009 TEARG founded Techint Ingeniería

y Construcción Bolivia S.A. to take part in

construction projects for buildings, roads, dams,

dwelling houses and transformation industrial

plants for any kind of industries and activities.

For the purpose of unification of the end of the fiscal

year of engineering and construction companies,

the governing bodies have determined December

31 as the most suitable date. Therefore, the Board

of Directors’ Meeting of TEI&C held on December 2,

2009, resolved that next December 31, 2010 will be

the enforcement date.

During the previous fiscal year, TEI&C experienced

some changes in its investment portfolio, which are

detailed as follows:

In July 2008, the Company acquired the control over

the Mexican company TEMEX through the purchase

of 51,032 common shares, equal to 100% of the

outstanding shares, from its parent company B.V.

de Nieuwe Weg, a company organized pursuant to

the laws of The Netherlands. The difference between

the price paid and the book value was charged to

equity as capital surplus (USD 9.0 million). This

expansion in the business geographical area in

Mexico and Canada required TEI&C to make capital

contributions in the Dutch company for the sum of

USD 34.8 million. Consequently, during the fiscal

year, TEMEX received capital contributions for

USD 38.4 million whereas Techint E&C Inc.

(“TECAN”) (a Canadian company) increased its

capital stock in CAD 0.5 million (USD 0.4 million).

Throughout the previous fiscal year, several

transactions were concluded in TEMEX in order to

reorganize its business areas. In September 2008,

TEMEX transferred 10% of its shareholding in

Servicios Múltiples de Burgos, S.A. de C.V. The profit

generated by this transaction (USD 11.9 million)

is being disclosed in the Consolidated Income

Statement under “Gain from the purchase and sale

of share and investments”. In November 2008, TEMEX

sold 40% of the shares in Techint S.A. (a Spanish

company), and executed a contract undertaking

to purchase 25% of the shares of Mexcarbón S.A.

de C.V. and of Carbonser, S.A. de C.V. In addition,

TEMEX wound up the companies the purpose of

which had already been performed or which were

inactive, including the following: Corporación

Mexicana de Promociones Energéticas, S.A. de C.V.,

Promociones e Ingeniería de Proyectos, S.A. de C.V.,

Impretech Infraestructura, S.A. de C.V., Divat, S.A. de

C.V., Hidro La Yesca, S.A. de C.V., Laguna de Cuyutlan

LNG, S.A. de C.V., Proyecto La Yesca, S.A. de C.V. and

Elina Noreste S.A. de C.V.

During April 2009, Techint Chile S.A. (“TECHI”), a

subsidiary of Techint International Construction Corp.

(TENCO) (“TENCO”), exercised the put option on the

51% equity interest of Proyectos y Montajes Comin

S.A. and Servicios Industriales Comin S.A. The net

loss generated by this transaction (USD 1.7 million) is

being disclosed in the Consolidated Income Statement

under “Gain from the purchase and sale of share and

investments”, including the return of goodwill.

During February 2009, TEI&C created TIC, a Spanish

company, the purpose of which is the administration

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•

44 | TEI&C S.A.

and management of security and share interests.

In May 2009, TIC received 100% of the outstanding

securities of B.V. de Nieuwe Weg as capital

contribution.

In June 2009, the Company increased its direct

participating interest in Techint Engenharia e

Construção S.A., through the purchase of 18.25%

and 15% of the shares from TENCO and TEARG,

respectively.

These consolidated financial statements were

approved for issue by the Company’s Board of

Directors on October 29, 2010.

2. Accounting policies

The principal accounting policies applied in

the preparation of these consolidated financial

statements are set out below. These policies have

been consistently applied to all the years presented,

unless otherwise stated.

a. Basis of preparation

These consolidated financial statements are

prepared in accordance with International Financial

Reporting Standards (“IFRS”), as issued by the

International Accounting Standards Board (“IASB”),

under the historical cost convention, as modified

by the revaluation of machinery equipment and

vehicles (“Revaluation of PP&E”), available-for-sale

assets, financial assets and liabilities (including

derivative instruments) at fair value through profit or

loss, and translation of subsidiaries whose functional

currency is the currency of a hyperinflationary

economy. The consolidated financial statements are

presented in thousands of U.S. dollars (“USD”),

which is the functional currency of TEI&C.

Certain comparative amounts have been reclassified to

conform to changes in presentation in the current year.

The preparation of consolidated financial

statements in conformity with IFRS requires the

•

•

•

•

use of certain critical accounting estimates. It

also requires management to exercise its best

judgment in the process of applying the Company’s

accounting policies. The areas involving a higher

degree of judgment of complexity, or the areas

where assumptions and estimates are significant to

the consolidated financial statements, are disclosed

in note 2.d.

Classification of Venezuela as a hyperinflationary

economy

During the fiscal year, a number of factors arose

in the Venezuelan economy that led the Company

to reconsider the treatment it follows with respect

to the translation of the financial statements

of subsidiaries. Within these factors it is worth

highlighting the level of cumulative inflation

over the past three years; the restrictions to the

official foreign exchange market and, finally, the

devaluation of the Bolivar fuerte.

As a result, in accordance with IFRS, Venezuela

must be considered a hyperinflationary economy.

The main implications of this circumstance are as

follows:

At June 30, 2009 the figures were not restated.

Adjustment of the income statement to reflect the

financial loss caused by the impact of inflation in

the year on net monetary assets (loss of purchasing

power).

All components of the financial statements of the

Venezuelan companies have been translated at the

closing exchange rate, which at June 30, 2010 was

4.3 Bolivares fuertes per USD

Standards and amendments effective in the year

ended June 30, 2010 and adopted by the Company

The following standards and amendments have

been published and were mandatory for the

Company in the year ended June 30, 2010:




IAS 1 (Revised) “Presentation of Financial

Statements” was issued in September 2007 and was

effective for annual periods beginning on or after

January 1, 2009. The revised standard introduces the

concept of a statement of comprehensive income,

which enables users of the financial statements to

analyze changes in a company’s equity resulting

from transactions with owners separately from non-

owner changes. The revised standard provides the

option of presenting items of income and expense

and components of other comprehensive income

either as a single statement of comprehensive

income or in two separate statements. The Company

has elected to present two statements: an income

statement and a statement of comprehensive

income. The consolidated financial statements

have been prepared under the revised disclosure

requirements.

IAS 27 (Revised), “Consolidated and separate

financial statements” (effective July 1, 2009).

The revised standard requires the effects of all

transactions with non-controlling interests to be

recorded in equity if there is no change in control

and these transactions will no longer result in

goodwill or gains and losses. The standard also

specifies the accounting when control is lost. Any

remaining interest in the entity is re-measured to

fair value, and a gain or loss is recognized in profit

or loss.

IFRS 3 (Revised) “Business Combinations” was

issued in January 2008 and will apply to business

combinations occurring on or after July 1, 2009. The

revised standard introduces a number of changes

in the accounting for business combinations that

will impact the amount of goodwill recognized,

the reported results in the period that a business

acquisition occurs and future reported results. The

adoption of the standard did not have a material

impact on the presentation of the Company’s results

of operations, financial position or cash flows.

IFRS 7 (Amendment) “Financial instruments:

Disclosures” was issued in March 2009 and is effective

for annual periods beginning on or after January 1,

2009. The amendment requires enhanced disclosures

about fair value measurements and liquidity risk.

In particular, the amendment requires disclosure

of fair value measurements by level of a fair value

measurement hierarchy. As the change in accounting

policy only results in additional disclosures, there is no

impact on the presentation of the Company’s results

of operations, financial position or cash flows.

Standards, amendments and interpretations to

existing standards that are not yet effective and

have not been early adopted by the Company

The following standards, amendments and

interpretations to existing standards have been

published and are not yet effective for the Company

in the year ended June 30, 2010:

IFRS 9 “Financial Instruments”, issued in November

2009. This standard addresses the classification

and measurement of financial assets and is likely

to affect the Company’s accounting for its financial

assets. The standard is not applicable until January

1, 2013 but is available for early adoption. The

Company’s management has not yet assessed the

potential impact that the application of IFRS 9 will

have on the Company’s financial statements.

IAS 24 (Revised), “Related party disclosures”, issued

in November 2009. It supersedes IAS 24, ‘Related

party disclosures’, issued in 2003. IAS 24 (revised)

is mandatory for periods beginning on or after

January 1, 2011. Earlier application, in whole or in

part, is permitted.

The revised standard clarifies and simplifies the

definition of a related party and removes the

requirement for government-related entities

to disclose details of all transactions with the

government and other government-related entities.



46 | TEI&C S.A.

The application of this revised standard is not

expected to have a significant impact on the

presentation of the Company’s results of operations,

financial position or cash flows.

IAS 32 (Amendment), “Financial instruments:

Presentation on classification of rights issues”

issued in October 2009. The amendment addresses

the accounting for rights issues (rights, options or

warrants) that are denominated in a currency other

than the functional currency of the issuer. Prior to the

amendment, such rights issues were accounted for

as derivative liabilities. The amendment states that, if

such rights are issued pro rata to an entity's existing

shareholders for a fixed amount of any currency,

they should be classified as equity, regardless of the

currency in which the exercise price is denominated.

The amendment is effective for annual periods

beginning on or after February 1, 2010. The Company

is assessing the impact in the results of operations,

financial position or cash flows.

As follows, other standards and interpretations to

existing standards not yet effective and not adopted

by the Company before, though they are not

relevant to the Company’s operations:

IFRS 1 (Amendments), “First time adoption, on

'Financial instrument disclosures”.

IFRIC 19 “Extinguishing financial liabilities with

equity instruments”.

IFRIC 14 (Amendment), “Prepayments of a minimum

funding requirement”.

Improvements to International Financial Reporting

Standards

In May 2010, the IASB published the annual

improvements with several international accounting

and financial reporting standards amendments.

Entities shall apply these amendments for annual

periods beginning on or after January 1, 2011. If

•

•

•

entities apply these amendments to an earlier

period, they shall disclose this fact.

The Company’s management estimates that the

application of these amendments will not have a

material effect on the Company’s financial condition

or results of operations.

b. Consolidation

Subsidiary companies

Subsidiaries are entities which are controlled

by TEI&C as a result of its ability to govern an

entity’s financial and operating policies generally

accompanying a shareholding of more than 50%

of the voting rights. Subsidiaries are consolidated

from the date on which control is exercised by the

Company and are no longer consolidated from the

date control ceases.

The purchase method of accounting is used to

account for the acquisition of subsidiaries by TEI&C.

The cost of an acquisition is measured as the fair

value of the assets given, equity instruments issued

and liabilities incurred or assumed at the date of

acquisition. This cost includes the fair value of

any asset or liability resulting from a contingent

consideration arrangement. Acquisition-related

costs are expensed as incurred. Identifiable assets

acquired, liabilities and contingent liabilities

assumed in a business combination are measured

initially at their fair values at the acquisition date.

The excess of the cost of acquisition over the fair

value of TEI&C share of the identifiable net assets

acquired is recorded as goodwill. If the cost of

acquisition is less than the fair value of the net

assets of the subsidiary acquired, the difference is

recognized directly in the income statement.

If the companies acquired were under common

control, the assets and liabilities of such companies

(and their respective subsidiaries) are accounted

for at the predecessor’s cost, reflecting the carrying

amount of such assets and liabilities contributed




to the Company. Accordingly, the consolidated

financial statements include the financial position

of the abovementioned companies at historical

book values and no adjustment has been made to

reflect fair values at the time of the contribution. The

difference between the price paid and the historical

book value was charged to equity.

Material inter-company transactions, balances

and unrealized gains on transactions between

TEI&C and its subsidiaries have been eliminated in

consolidation. Unrealized losses are also eliminated.

Accounting policies of subsidiaries have been

changed where necessary to ensure consistency

with the policies adopted by TEI&C.

According to the laws of the countries of certain

subsidiaries, a portion of the profit of the year is

separated to constitute statutory reserves until

they reach statutory capped amounts. These legal

reserves are not available for dividend distribution

and can only be released to absorb losses.

See note 26 to the consolidated financial statements

for the list of consolidated subsidiaries.

Transactions and non-controlling interests

The Company treats transactions with non-

controlling interests as transactions with equity

owners of TEI&C. For purchases from non-

controlling interests, the difference between any

consideration paid and the relevant share acquired

of the carrying value of net assets of the subsidiary

is recorded in equity. Gains or losses on disposals to

non-controlling interests are also recorded in equity.

When TEI&C ceases to have control or significant

influence, any retained interest in the entity is

remeasured to its fair value, with the change in

carrying amount recognized in profit or loss.

Associated companies

Associated companies are entities in which TEI&C

has significant influence but not control, generally

accompanying a shareholding of between 20% and

50% of the voting rights (see note 6). Investments in

associates are accounted for by the equity methods

of accounting and are initially recognized at cost.

The Company’s investment in associates includes

goodwill identified on acquisition, net of any

accumulated impairment loss.

The Company’s share of its associates’ post-

acquisition profits or losses is recognized in the

income statement, and its share of post-acquisition

movements in reserves is recognized in reserves.

The cumulative post-acquisition movements

are adjusted against the carrying amount of the

investment. When the Company’s share of losses

in an associate equals or exceeds its interest in

the associate, including any other unsecured

receivables, the group does not recognise further

losses, unless it has incurred obligations or made

payments on behalf of the associate.

Unrealized gains on transactions between TEI&C

and its associated companies are eliminated to the

extent of TEI&C’s interest in the associated companies.

Unrealized losses are also eliminated unless the

transaction provides evidence of an impairment

indicator of the asset transferred. Financial statements

of associated companies have been adjusted where

necessary to ensure consistency with IFRS.

Joint Ventures

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

which involve the establishment of a corporation,

partnership or other entity in which each venturer

has an interest.

TEI&C’s interest in jointly controlled entities is

accounted for by the proportionate consolidation

method. TEI&C consolidates its share of the joint

ventures’ individual income and expenses, assets

and liabilities on a line-by-line basis with similar

items in TEI&C’s financial statements. See note 21 to

the consolidated financial statements.



48 | TEI&C S.A.

The Company recognises the portion of gains or

losses on the sale of assets by the Company to

the joint ventures that is attributable to the other

ventures. The Company does not recognise its

share of profits or losses from the joint ventures

that result from the Company’s purchase of assets

from the joint ventures until it re-sells the assets

to an independent party. However, a loss on the

transaction is recognized immediately if the loss

provides evidence of a reduction in the net realizable

value of current assets, or an impairment loss.

c. Foreign currency translation

i Functional and presentation currency

Items included in the financial statements of each

entity in which TEI&C holds participating interests are

measured using the currency that best reflects the

economic substance of the underlying events and

circumstances relevant to that entity (“the functional

currency”). The consolidated financial statements

are presented in thousands of U.S. dollars, which is

the functional currency of TEI&C. The consolidated

companies’ first record transactions using their

functional currency and their financial statements are

then translated to U.S. dollars with the only purpose

of being consolidated by TEI&C.

ii Balances and transactions in currencies other

than the functional currency

Transactions in currencies other than the functional

currency are accounted for at the exchange rates

prevailing on the date of the transactions, and

the corresponding exchange gains and losses are

recognized in the income statement.

Monetary assets and liabilities in currencies other

than the functional currency are translated at the

year-end exchange rate.

iii Translation of balances and results of

consolidated companies

The results and financial position of all the

consolidated companies that have a functional

•

•

•

currency different from the Company’s presentation

currency are translated into the presentation

currency as follows:

assets and liabilities of each balance sheet are

translated at the closing rate on the date of that

balance sheet;

income and expenses for each income statement

are translated at an average exchange rate; (unless

this average is not a reasonable approximation

of the cumulative effect of the rates prevailing on

the transaction dates, in which case income and

expenses are translated at the rate on the dates of

the transactions);

all resulting exchange differences are recognized as

a separate component of equity.

In the case of sale or other disposition of any such

subsidiary, any accumulated translation adjustment

would be recognized in the income statement as

part of the gain or loss on sales.

The financial statements of subsidiaries companies

whose functional currency is the currency of a

hyperinflationary economy are adjusted for inflation

in accordance with the procedure described in the

following paragraph prior to their translation to

USD. Once restated, all the items of the financial

statements are converted to USD using the closing

exchange rate. Amounts shown for prior years for

comparative purposes are not modified.

To determine the existence of hyperinflation,

TEI&C assesses the qualitative characteristics of

the economic environment of the country, such

as the trends in inflation rates over the previous

three years. The financial statements of companies

whose functional currency is the currency of a

hyperinflationary economy are adjusted to reflect

the changes in purchasing power of the local

currency, such that all items in the statement of




financial position not expressed in current terms

(non-monetary items) are restated by applying

a general price index at the financial statement

closing date, and all income and expense, profit and

loss are restated monthly by applying appropriate

adjustment factors. The difference between initial

and adjusted amounts is taken to profit or loss.

d. Use of estimates

The preparation of consolidated financial

statements requires Management to estimate and

evaluate both recorded and contingent assets and

liabilities as of a certain date, as well as income and

expenses recorded during the reporting period. The

future actual results may differ from estimates made

as of the date of preparation of these consolidated

financial statements.

Estimates and judgments are continually evaluated

and are based on historical experience and other

factors, including expectations of future events

that are believed to be reasonable under the

circumstances.

There follows a description of the most relevant

estimates used to prepare these consolidated

financial statements:

Percentage of completion method

The Company uses the percentage-of-completion

method in accounting for its contract revenues and

expenses. Use of the percentage-of-completion

method requires the Company to estimate the

services performed to date as a proportion of the

total services to be performed. Furthermore, in

determining the contract revenue, TEI&C considers

the estimated outcome for each of the construction

contracts which are in progress.

Income taxes

The Company is subject to income taxes in

numerous jurisdictions. Significant judgment

is required in determining the worldwide

provision for income taxes. There are transactions

and calculations for which the ultimate tax

determination is uncertain. TEI&C recognises

liabilities for anticipated tax audit issues based

on estimates of whether additional taxes will be

due. Where the final tax outcome of these matters

is different from the amounts that were initially

recorded, such differences will impact the current

and deferred income tax assets and liabilities in the

period in which such determination is made.

Allowances for doubtful accounts

Management maintains an allowance for trade

and other receivables to account for estimated

losses resulting from the inability of clients to

make required payments. When evaluating the

adequacy of an allowance for trade receivables,

Management bases its estimates on the aging of

accounts receivable balances and historical write-off

experience, client credit worthiness and changes in

client payment terms.

Other estimations

In addition, the Company’s Management makes

estimations to calculate, at certain moment the

recoverable amounts of assets, the depreciation

and amortization and the provision for cost and

contingencies.

e. Property, plant and equipment

Machinery, equipment, vehicles and others

As a general rule, TEI&C has adopted historical

acquisition or construction cost less accumulated

depreciation as the measurement criterion for PP&E.

However, in the case of machinery, equipment and

vehicles used in the construction business, TEI&C

has adopted fair value as the measurement criterion

(see note 4).

Land and buildings

Land and buildings are stated at historical cost.

Buildings are depreciated using the straight-line



50 | TEI&C S.A.

method, by applying annual ratios sufficient to

terminate the value of each item as of the end of

their estimated useful life.

Fixed assets of Ferroexpreso Pampeano S.A.C.

(“FEPSA”)

These assets represent improvements on the assets

received under concession by FEPSA, as well as

those devoted to service rendering, which will be

transferred to the assignor upon termination of

the concession. Such assets are valued at their

acquisition or construction cost less accumulated

depreciation.

The straight-line method has been used to calculate

depreciation, by applying annual ratios sufficient

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

their estimated useful life or upon termination of

concession, whichever occurs first.

Useful lives used to calculate depreciation charges

are as follows:

The residual values and useful lives of significant

machinery, construction equipment and vehicles are

reviewed, and adjusted if appropriate, at each year-

end date.

Where the carrying amount of an asset is higher

than its estimated recoverable amount, it is written

down immediately to its recoverable amount.

Gains and losses on disposals are determined by

comparing proceeds with carrying amounts. When

revalued assets are sold, the amounts included

in the reserve for PP&E revaluation surplus are

transferred to retained earnings.

Repairs and maintenance expenses are charged

to the consolidated income statement during the

financial period in which they are incurred.

f. Intangible assets

Systems development

Acquired computer software licenses are capitalized

on the basis of the costs incurred to acquire and bring

to use the specific software. These costs are amortized

over their estimated useful lives (three to five years).

Costs associated with developing or maintaining

computer software programs are charged to

expenses as incurred. Costs that are directly

associated with the production of identifiable and

unique software products controlled by TEI&C and

that will probably generate economic benefits

exceeding costs beyond one year, are recognized as

intangible assets. Direct costs include the software

development employee costs and an appropriate

portion of relevant overhead.

Computer software development costs recognized

as assets are amortized over their estimated useful

lives (not exceeding five years).

Goodwill

TENCO and subsidiaries

Goodwill represents the excess of the cost of an

acquisition over the fair value of the Company’s

share of the net identifiable assets of the acquired

subsidiaries at the date of acquisition. Goodwill on

acquisitions of subsidiaries is included in intangible

assets and it is tested for impairment annually as

part of the overall balances (see note 5).

Impairment losses on goodwill are not reversed.

Gains and losses on the disposal of an entity

include the carrying amount of goodwill relating to

the entity sold.



20-50 years

10-20 years

4-10 years

Not depreciated

Buildings and improvements

Production equipment

Vehicles, furniture and fixtures,

and other equipment

Land


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

Goodwill represents the greater cost derived from

the investment in the subsidiary FEPSA as a result

of the compulsory subscription and payment of the

portion of capital corresponding to Ferrocarriles

Argentinos (16%) and the portion corresponding to

staff (4%) pursuant to the concession contract.

Goodwill is valued at original cost, less accumulated

amortization; it is calculated over the term of the

concession of the service provided by FEPSA.

g. Impairment of non-financial assets

Assets that have an indefinite useful life, for

example Goodwill, are not subject to amortization

and are tested annually for impairment.

Property and equipment and other non-current

assets subject to depreciation, including intangible

assets, are reviewed for impairment losses

whenever events or changes in circumstances

indicate that the carrying amount may not be

recoverable. An impairment loss is recognized for

the amount by which the carrying amount of the

asset exceeds its recoverable amount, which is the

higher of an asset net selling price and its value

in use. For the purposes of assessing impairment,

assets are grouped at the lowest levels for which

there are separately identifiable cash flows.

h. Financial assets

The Company classifies its financial assets in the

following categories: at fair value through profit or

loss, loans and receivables, and available for sale.

The classification depends on the purpose for which

the financial assets were acquired. Management

determines the classification of its financial assets at

initial recognition.

Financial assets at fair value through profit or loss.

Financial assets at fair value through profit or loss

are financial assets held for trading. A financial asset

is classified in this category if acquired principally

for the purpose of selling in the short-term.

Derivatives are also categorized as held for trading

unless they are designated as hedges. Assets in this

category are classified as current assets.

Loans and receivables

Loans and receivables are non-derivative financial

assets with fixed or determinable payments that are

not quoted in an active market. They are included in

current assets, except for maturities greater than 12

months after the date of the statement of financial

position. These are classified as non-current assets.

Available-for-sale financial asset

Available-for-sale financial assets are non-derivatives

that are either designated in this category or not

classified in any of the other categories. They are

included in non-current assets unless management

intends to dispose of the investment within 12

months of the end of the reporting period.

Recognition and measurement

Regular purchases and sales of financial assets are

recognized on the trade - date - the date on which

the Company commits to purchase or sell the asset.

Investments are initially recognized at fair value plus

transaction costs for all financial assets not carried

at fair value through profit or loss. Financial assets

carried at fair value through profit or losses are

initially recognized at fair value and transaction costs

are expensed in the statement of income. Financial

assets are derecognized when the rights to receive

cash flows from the investments have expired or have

been transferred and the Company has transferred

substantially all risks and rewards of ownership.

Available-for-sale financial assets and financial assets

at fair value through profit or loss are subsequently

carried at fair value. Loans and receivables are carried

at amortized cost using the effective interest method.

i. Offsetting financial instruments

Financial assets and liabilities are offset and the

net amount reported in the statement of financial



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•

52 | TEI&C S.A.

position when there is a legally enforceable right

to offset the recognized amounts and there is an

intention to settle on a net basis, or realize the asset

and settle the liability simultaneously.

j. Derivative financial instruments

Derivatives are initially recognized at fair value on

the date a derivative contract is entered into and

are subsequently re-measured at their fair value.

The method of recognizing the resulting gain or loss

depends on whether the derivative is designated as

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

item being hedged. The Company designates certain

derivatives as hedges of a particular risk associated

with a highly probable forecast transaction as cash

flow hedge.

The Company documents at the inception of the

transaction the relationship between hedging

instruments and hedged items, as well as its

risk management objectives and strategy for

undertaking various hedging transactions. TEI&C

also documents its assessment, both at hedge

inception and on an ongoing basis, of whether the

derivatives that are used in hedging transactions

are highly effective in offsetting changes in fair

values or cash flows of hedged items.

The fair values of various derivative instruments are

disclosed in note 12.

Cash flow hedge

The effective portion of changes in the fair value

of derivatives denominated and qualified as cash

flow hedging is disclosed in other Comprehensive

income. The gain or loss related to the ineffective

portion is immediately disclosed in the consolidated

income statement.

The amounts accumulated in equity are disclosed in

the consolidated income statement in the periods in

which the hedged item affects gains and losses.

k. Inventories

Inventories are stated at the lower of cost or net

realizable value less the corresponding allowance

for obsolescence. Net realizable value is the

estimated selling price in the ordinary course of

business, less the costs of completion and direct

selling expenses. In general, cost is determined by

using weighted average price.

The allowance for obsolescence has been calculated

based on Management’s analysis of aging.

l. Construction contracts work in progress

A construction contract is a contract specifically

negotiated for the construction of an asset or a

combination of assets that are closely interrelated or

interdependent in terms of their design, technology

and functions or their ultimate purpose or use.

When the outcome of a construction contract

cannot be reliably estimated, contract revenue is

recognized to the extent of contract costs incurred

where it is probable those costs will be recoverable.

Contract costs are recognized when incurred.

When the outcome of a construction contract

can be reliably estimated, contract revenue and

contract costs are acknowledged by the percentage

of completion method. The stage of completion is

measured by reference to the relationship contract

costs incurred for work performed to date bear to

the estimated total costs for the contract. When it is

probable that total contract costs will exceed total

contract revenue, the expected loss is immediately

recognized as an expense.

Costs incurred in the year in connection with future

activity on a contract are excluded from contract

costs in determining the stage of completion. They

are presented as inventories, prepayments or other

assets, depending on their nature.




When a construction contract includes reimbursable

works and the Company is responsible for providing

design, engineering and construction services and

labor and all equipment and materials, construction

equipment and supplies, the amount of these works

is recognized in revenues and costs.

TEI&C shows as an asset (within Construction

contracts work in progress) the gross amount

due from clients for construction contracts for all

contracts in progress for which costs incurred plus

recognized profits (less recognized losses) exceed

progress billings.

TEI&C presents as a liability (within Construction

contracts work in progress) the gross amount due

to clients for construction contract for all contracts

in progress for which progress billings exceed costs

incurred plus recognized profits (less recognized

losses).

m. Other investments

Other investments include deposits in investments

funds and equity instruments, which are classified

as financial assets “at fair value through profit and

loss” or “available for sale”.

Other investment funds comprise mainly financial

resources within offshore trusts, the purpose of which

is exclusively to ensure that the financial needs for the

normal development of their operations are met.

Investments in companies in which TEI&C has less

than 20% of the voting rights are valued at cost,

because its fair value cannot be measured reliably.

n. Trade and other receivables

Trade and other receivables are initially measured

at their fair value, which is generally their nominal

value, unless the effect of discounting is material,

subsequently measured at amortized cost less

provision for impairment.

An allowance for doubtful accounts is established

when there is objective evidence that the Company

will not be able to collect all amounts due according

to the original terms of receivables.

o. Trade and other payables

Trade and other payables are obligations to pay

for goods or services that have been acquired in

the ordinary course of business from suppliers.

Accounts payable are classified as current liabilities

if payment is due within one year or less. If not, they

are presented as non-current liabilities.

Trade and other payables are recognized initially at

fair value and subsequently measured at amortized

cost using the effective interest method.

p. Cash and cash equivalents

Assets recorded in cash and cash equivalents are

carried at fair market value or at historical cost

which approximates fair market value. For the

purposes of the consolidated statement of cash

flows, cash and cash equivalents comprise cash

on hand, demand deposits with banks and other

short-term highly liquid investments with original

maturities of three months or less and bank

overdrafts.

Bank overdrafts are included within borrowings in

current liabilities in the consolidated statement of

financial position.

q. Equity

Ordinary shares are classified as equity. The

balances of the consolidated statement of changes

in equity at June 30, 2010 and 2009 include:

The value of share capital, irrevocable contributions,

capital surplus, reserve for PP&E revaluation

surplus, legal reserve, other reserve, and retained

earnings in accordance with IFRS.



•

54 | TEI&C S.A.

The currency translation differences of TEI&C’s

subsidiaries.

Non-controlling interests in subsidiaries.

Dividends distributions are recorded in the

Company’s financial statements when Company’s

shareholders have the right to receive the payment,

or when interim dividends are approved by the

Board of Directors in accordance with the by-laws of

the Company.

r. Borrowings

Borrowings are initially recorded based on the

fair value of the net proceeds. Borrowings are

subsequently stated at amortized cost using the

effective yield method; any difference between

proceeds (net of transaction costs) and the

redemption value is recognized in the income

statement over the life of the borrowings.

Borrowings are classified as current liabilities unless

TEI&C has an unconditional right and firm intention

to defer settlement of the liability for at least twelve

months after the balance sheet date.

s. Current and deferred income tax

The current income tax charge is calculated on the

basis of the tax laws in force in the countries in which

TEI&C and each one of its subsidiaries operate.

Deferred income tax is recorded in full, using the

liability method, on temporary differences arising

between the tax basis of assets and liabilities and

their carrying amounts in the financial statements.

Currently enacted tax rates are used in the

determination of deferred income tax.

Deferred tax assets are recognized to the extent

that it is probable that future taxable profit will be

available to offset temporary differences.

Deferred income tax is provided on temporary

differences arising on investments in subsidiaries,

associates and joint ventures, except where the

timing of the reversal of the temporary difference can

be controlled and it is probable that the temporary

difference will not reverse in the foreseeable future.

t. Employee benefits

Certain TEI&C’s subsidiaries have in force benefit

plans under the modality of “non-funded defined

benefits” and “other long-term benefits” which,

subject to certain conditions established by

such companies, are granted during the term of

employment and after retirement, which plans are

recorded following the guidelines of accounting

rules and regulations in force and effect.

The provisioned liabilities for such employee

benefits are recorded at the current value of the

future flows of funds, the amount being charged

during the relevant employees’ remaining years

of services up to the moment when the conditions

necessary for the granting of each benefit are

satisfied. Such liabilities are calculated by

independent actuaries, at least once a year, using

the “Projected credit unit” method.

Other subsidiaries have implemented a

supplementary pension benefit plan with two

programs: “PGBL - Plano Gerador de Benefício

Livre” and “ VGBL - Programa de Seguro de Vida

com Cobertura por Sobrevivência”. These programs

are generally funded through payments by the

subsidiaries to independent insurance companies.

Both programs are defined contribution plans.

Pension plans and other post-retirement benefits

Certain TEI&C’s subsidiaries officers are covered by

a specific employee retirement plan designed to

provide retirement, termination and other benefits

to those officers.



•

•


TEI&C’s subsidiaries are accumulating assets for

the ultimate payment of those benefits in the form

of investments. The investments are not part of

a particular plan, nor are they segregated from

TEI&C’s other assets. Due to these conditions, the

plan is classified as “unfunded” under IFRS.

Retirement costs are assessed using the projected

unit credit method: the cost of providing retirement

benefits is charged to the statement of income over

the service lives of employees based on actuarial

calculations. This provision is measured at the

present value of the estimated future cash outflows,

using applicable interest rates. Actuarial gains and

losses are recognized over the average remaining

service lives of employees.

Benefits provided by the plan are calculated on a

seven-year salary average.

The laws in the different countries in which

TEI&C’s subsidiaries carry out their operations

provide for pension benefits to be paid to retired

employees from government pension plans and/

or private funds managed plans. Amounts payable

to such plans are generally calculated based on a

percentage of employee salaries and are accounted

for on an accrual basis.

Termination benefits

Termination benefits are payable whenever an

employee’s employment is terminated before the

normal retirement date or whenever an employee

accepts voluntary redundancy in exchange for these

benefits.

TEI&C’s subsidiaries recognize termination benefits

when it is demonstrably committed to either

terminatimg the employment of current employees

according to a detailed formal plan without

possibility of withdrawal, or providing termination

benefits as a result of an offer made to encourage

voluntary redundancy. Benefits falling due more

than twelve months after balance sheet date are

discounted to present value.

Profit-sharing and bonus plans

A liability for employee benefits in the form of

profit-sharing and bonus plans is recognized

in other provisions when there is no realistic

alternative but to settle the liability and provided at

least one of the following conditions is met:

there is a formal plan and the amounts to be paid

are determined before the time of issuing the

financial statements; or

past practice has created a valid expectation in

employees that they will receive a bonus/profit-

sharing and the amount can be determined before

the financial statements are issued.

Liabilities for profit-sharing and bonus plans are

expected to be settled within twelve months and are

measured at the amounts expected to be paid when

they are settled.

Contribution plans

A defined contribution plan is a pension plan under

which the companies pay fixed contributions to a

separate entity. Companies have no further payment

obligations once the contributions have been paid.

The contributions are recognized as employee benefit

expense when they are due. Prepaid contributions are

recognized as an asset to the extent that a cash refund

or a reduction in the future payments is available.

Contributions by the companies include: (a)

Basic contribution – Companies are committed

to contribute amounts equal to the amounts

contributed by the employees up to certain limits,

(b) Extraordinary contributions- Are non-mandatory

contributions that can be made on a voluntary basis

either by the companies or the employees.



•

•

56 | TEI&C S.A.

u. Provisions

Provisions are recognized when TEI&C has a present

legal or constructive obligation as a result of past

events, it is probable that an outflow of resources

will be required to settle the obligation, and a reliable

estimate of the amount can be made. When TEI&C

expects a provision to be reimbursed, for example

under an insurance contract, the reimbursement is

recognized as a separate asset but only when the

reimbursement is virtually certain.

v. Revenue recognition

Revenues and cost recognition for long-term

construction contracts

See note 2.l.

Sales of services

The Company sells maintenance services. The

revenue is generally recognized in the period the

services are provided, using a straight-line basis

over the term of the contract.

Other revenues

Other revenues earned by TEI&C are recognized on

the following bases:

Interest income: on the effective yield basis.

Dividend income from investments in other

companies: when TEI&C’s right to collect is established

w. Leases

Leases in which a significant portion of the risks

and rewards of ownership are transferred from

the lessor to TEI&C are classified as finance leases.

At the commencement of the lease term, TEI&C

recognizes finance leases as assets and liabilities in

the statement financial position at amounts equal

to the value of the leased property or, if lower, the

present value of the minimum lease payments, each

determined at the inception of the lease. The discount

rate used in calculating the present value of the

minimum lease payments is the interest rate implicit

in the lease should this be practicable to determine;

otherwise, the lessee’s incremental borrowing cost is

used. Any initial direct costs of the lessee are added

to the amount recognized as an asset.

See amounts of assets and liabilities held under

finance leases in note 23.

Leases in which a significant portion of the risks and

rewards of ownership are retained by the lessor are

classified as operating leases. Payments made under

operating leases (net of any incentives received from

the lessor) are charged to the income statement on a

straight-line basis over the period of the lease.

x. Held for sale assets and liabilities and

discontinued operations

When the Company intends to dispose of, or

classify as held for sale, a business component

that represents a separate major line of business

or geographical area of operations it classifies such

operations as discontinued. The post tax profit or

loss of the discontinued operations is shown as

a single amount on the face of the consolidated

income statement, separate from the other results

of the Company.

The measurement of the held-for-sale assets and

liabilities is the book value of the group of assets

and liabilities. Thus, the carrying amount of this

held-for-sale assets and liabilities does not represent

their fair value at the moment of the measurement.

3. Financial risk management

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

multinational character expose the Company to

a variety of risks, including the effects of changes

in foreign currency, exchange rates, capital risk,

concentration of credit risk, liquidity risk and

interest rates risk. The nature of its contracts implies

that TEI&C has to manage risks regarding uncertain

conditions in the hiring of procurement, which is

usually a large part of the scope of work.



•

•


To manage the high volatility related to these financial

matters, Management evaluates exposures on a

consolidated basis to take advantage of its global and

multinational activity. For some of these exposures,

the Company or its subsidiaries enter into derivative

transactions in order to manage potential adverse

impacts on the Company’s financial performance.

a) Capital Risk

The Company seeks to maintain an adequate debt

to total equity ratio considering the risks involved in

the industry and the markets where it operates. The

year end ratio of debt to total equity (where “debt”

comprises all financial borrowings and “equity” is

the sum of financial borrowings and shareholders’

equity) is 0.06 as of June 30, 2010, in comparison

with 0.18 as of June 30, 2009. The Company

does not have to comply with regulatory capital

adequacy requirements.

b) Foreign exchange risk

TEI&C’s business activities are conducted in the

respective functional currencies of the subsidiaries.

However, the Company transacts in currencies

other than the respective functional currencies of

the subsidiaries. There are significant monetary

balances held by the Company at each year-end

that are denominated in US dollars (non-functional

currency).

The following tables show a breakdown of the

TEI&C’s net monetary position in various currencies

for the main functional currency in which the

Company operates:



ARS

BOB

CAD

EUR

GTQ

HNL

MXN

NIO

SVC

USD

VEF

-

-

-

(371)

-

-

-

-

-

2,592

-

2,221

(183)

-

-

-

-

-

-

-

-

2,218

-

2,035

-

282

-

666

208

(41)

18,961

12

1,713

-

2,658

24,459

-

-

-

(978)

-

-

-

-

-

(1,102)

-

(2,080)

-

-

-

-

-

-

-

-

-

29,087

-

29,087

-

-

-

1,190

-

-

-

-

-

42,701

-

43,891

-

-

-

-

-

-

-

-

-

(1,689)

-

(1,689)

-

-

-

-

-

-

-

-

-

12,322

-

12,322

-

-

-

-

-

-

-

-

-

13,545

-

13,545

-

-

-

-

-

-

-

-

-

24,587

-

24,587

-

-

(10)

1

-

-

-

-

-

1,021

-

1,012

(183)

282

(10)

508

208

(41)

18,961

12

1,713

125,282

2,658

149,390

Net monetary position Asset / (Liability)

VEFUYUUSDSARPENMXNEURCHLCADBRLARS Total

June 30, 2010

Functional Currency (in thousand USD)

ARS= Argentine Peso, BRL= Brazilian Real, BOB= Bolivian Peso, CAD= Canadian

Dollar, CHL= Chilean Peso, EUR= Euro, GTQ= Guatemalan Quetzal, HNL= Honduran

Lempira, MXN= Mexican Peso, NIO= Nicaraguan Cordoba Oro, PEN= Peruvian

Nuevo Sol, SAR= Saudi Riyal, SVC= El Salvador Colon, UYU= Uruguayan Peso,

VEF= Venezuelan Bolivar Fuerte

58 | TEI&C S.A.

The Company estimates that the impact under IFRS on

the net exposure at June 30, 2010 of a simultaneous

1% favorable or unfavorable movement in the main

exchange rates would result in a maximum pre-tax

gain or loss of approximately USD 1,494 thousands

as compared with a maximum pre-tax gain or loss of

approximately USD 659 thousands at June 30, 2009.

The Company’s net exposure to the currency other

than the functional currency is managed on a case-by-

case basis, partly by hedging certain expected cash

flows with foreign exchange derivative contracts.

c) Credit risk

Most accounts receivable relate to clients

operating in a range of industries and countries

with contract which require ongoing payments

as the development project progresses, upon the

rendering of services or upon completion and

delivering of the project. It is normal practice

that the Company reserves the right to suspend

the project if there is a remarkable breach of the

contract term, in particular the non-payment of

amounts owed.

In general the greatest risk for such assets is the risk

of not collecting a trade account receivable. This

is because, a) it may be a significant value in the

development of works or in the provision of services;

b) it is beyond the Company’s control. However, the

risk of customers being unable to make a payment

in such contracts is considered to be low, and

typically relate to problems characterized as technical

matters, i.e relating to the risk inherent in the service

rendered, under the Company’s control.

The following table sets forth details of the age of

trade receivables:



CAD

EUR

GTQ

HNL

MXN

NIO

SVC

USD

VEF

-

(592)

-

-

-

-

-

(2,737)

-

(3,329)

-

-

-

-

-

-

-

(904)

-

(904)

-

(70)

1,369

64

230

(14)

473

-

5,514

7,566

-

14

-

-

-

-

-

(1,308)

-

(1,294)

-

-

-

-

-

-

-

19,901

-

19,901

-

2,362

-

-

-

-

-

34,078

-

36,440

-

-

-

-

-

-

-

2,352

-

2,352

-

(43)

-

-

-

-

-

3,371

-

3,328

-

-

-

-

-

-

-

1,079

-

1,079

(9)

(261)

-

-

-

-

-

989

-

719

(9)

1,410

1,369

64

230

(14)

473

56,821

5,514

65,858

Net monetary position Asset / (Liability)

VEFUYUUSDSARPENMXNCHLCADBRLARS Total

June 30, 2009

Functional Currency (in thousand USD)

ARS= Argentine Peso, BRL= Brazilian Real, BOB= Bolivian Peso, CAD= Canadian

Dollar, CHL= Chilean Peso, EUR= Euro, GTQ= Guatemalan Quetzal, HNL= Honduran

Lempira, MXN= Mexican Peso, NIO= Nicaraguan Cordoba Oro, PEN= Peruvian

Nuevo Sol, SAR= Saudi Riyal, SVC= El Salvador Colon, UYU= Uruguayan Peso,

VEF= Venezuelan Bolivar Fuerte


At the date of these consolidated financial

statements most credits past due 1-180 days have

been collected. Receivables overdue for more than

180 days are in the process of approval for payment

by the ENARGAS (Argentine Gas Regulatory Board).

d) Liquidity risk

Management maintains sufficient cash and cash

equivalents to finance normal operations and

believes that TEI&C also has access to market for

short-term working capital requirements.

TEI&C financing strategy is to maintain adequate

financial resources and access to additional

liquidity. During the year ended June 30, 2010 TEI&C

has counted on cash flows from operations as well

as additional bank financing to fund its transactions.

TEI&C has a conservative approach to the

management of its liquidity, which consists of cash

and cash equivalents, comprising cash in banks,

short-term money market funds and highly liquid

short-term securities.

TEI&C holds its cash and cash equivalents primarily

in USD. Liquid financial assets as a whole are 24% of

total assets at June 30, 2010 (19% at June 30, 2009).

See note 15 for the maturity of borrowings and note

17 for the maturity of trade and other payables.

e) Interest rate risk management

The Company’s financing strategy is to manage

interest expense using a mixture of fixed-rate and

variable-rate debt.

The following table summarizes the proportions of

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



June 30, 2010

Trade Receivables

Allowance for doubtful accounts

Net Value

224,739

(10,923)

213,816

167,104

-

167,104

21,875

(10,886)

10,989

35,760

(37)

35,723

Trade Receivables

Not Due Past due 1 - 180 days

Past due > 180 days

June 30, 2009

Fixed rate

Variable rate

66%

34%

69,217

35,904

PercentageBorrowings

June 30, 2010

65%

35%

24,690

13,266

PercentageBorrowings

60 | TEI&C S.A.

As the Company has no significant interest-bearing

assets, the Company’s income and operating cash

flows are substantially independent from changes in

market interest rates.

The Company estimated that, if interest rates would

have been 100 basic points higher, with all other

variables held constant, total profit for the year ended

June 30, 2010 would have been USD 132 thousands

lower (USD 359 thousands lower at June 20, 2009).

The item consists in the following:

f) Fair value estimation

The carrying amount of financial assets and liabilities

with maturities of less than one year approximates to

their fair value.

See note 10 – “Determining fair values”.

4. Property, plant and equipment

The item evolution is as follows:



Beginning of the year

Additions

Disposals

Annual depreciation

Translation differences

Other movements

Revaluation Surplus (2)

Impairment loss

June 30, 2010

Land and buildings

Equipment and machinery

Vehicles

Other assets

Total June 30, 2010

49,261

2,985

-

(2,244)

(122)

5,212

-

-

55,092

75,960

301,356

109,143

128,883

615,342

254,376

50,941

(11,558)

(48,033)

(1,470)

-

71,168

(5,701)

309,723

53,654

13,794

(3,264)

(10,158)

(1,202)

1,494

2,446

(568)

56,196

36,186

8,593

(2,000)

(12,521)

(74)

(8,734)

27,205

(517)

48,138

55,092

150,297

48,138

56,196

309,723

115,275

25,569

(6,294)

(23,110)

(72)

2,028

41,517

(4,616)

150,297

(20,868)

(151,059)

(61,005)

(72,687)

(305,619)

Lands and buildings

OriginalValue


AccumulatedDepreciation

Vehicles

Net ValueJune 30, 2010

TotalJune 30, 2010

Otherassets (1)

Non-current

(1) It includes deferred costs of our subsidiary FEPSA and miscellaneous assets. (2) It includes gain on revaluation of PP&E USD 76,976 and decrease of revaluation

of PP&E USD 5,808.


Lease rentals amounting to USD 44,946 thousand

relating to the lease of machinery, construction

equipment and vehicles, are included in the income

statement.

Technical appraisal of PP&E

On June 30, 2010, a technical appraisal was

performed by external professionally qualified

valuation specialists in relation to machinery,



construction equipment and vehicles, based on

periodic valuations of the assets in order not to

differ materially from their fair value at the financial

statements date.

Management believes that the resulting value

approximates fair value. As per International

Accounting Standard No. 16 “Property, plant and

equipment” (“IAS 16”), when an item of property



Land and buildings


Vehicles

Other assets

Total June 30, 2009

67,295

259,132

102,519

116,513

545,459

49,261

115,275

36,186

53,654

254,376

(18,034)

(143,857)

(66,333)

(62,859)

(291,083)

OriginalValue

AccumulatedDepreciation

Net ValueJune 30, 2009


Additions

Disposals

Annual depreciation


Other movements

Revaluation Surplus

Increase due to business combinations

(see note 1)

Decrease due to sale / deconsolidation

of subsidiaries (see note 1)

June 30, 2009

49,866

5,802

(95)

(1,360)

(5,896)

-

-

944

-

49,261

268,031

49,219

(5,866)

(53,215)

(37,440)

(133)

9,506

26,864

(2,590)

254,376

66,989

13,944

(1,252)

(8,750)

(10,352)

(8,846)

1,014

1,696

(789)

53,654

44,534

6,202

(1,885)

(20,003)

(9,229)

2,856

79

14,988

(1,356)

36,186

106,642

23,271

(2,634)

(23,102)

(11,963)

5,857

8,413

9,236

(445)

115,275

Lands and buildings


Vehicles TotalJune 30, 2009

Otherassets (1)

Non-current

(1) It includes deferred costs of our subsidiary FEPSA and miscellaneous assets.

62 | TEI&C S.A.

thousand (2009: USD 3,328 thousand) in other

comprehensive income and accumulated in equity

under the heading of “Reserve for PP&E revaluation

surplus”. The decrease in the carrying amount of

asset as a result of revaluation (amounting to

USD 5,701 thousand) has been recorded in the

Consolidated Income Statement in “Other income

and expenses, net”, during the fiscal year ended

June 30, 2010. The decrease of prior revaluation

increases of the same asset were charged to other

comprehensive income and accumulated in equity

under “Reserve for PP&E revaluation surplus”

amounted to USD 5,808 thousand and has been

recorded net of tax effects USD 841 thousand.

If machinery, equipment and vehicles had been

valued at historical cost, the values would have

been the following:

The “Reserve for PP&E revaluation surplus”

is reversed, net of tax effects, through (i) the

retirement of the equipment appraised or (ii)

depreciation charges. The difference between

depreciation of appraised assets and depreciation

of the historical values of such assets is charged

against accumulated results.

The straight-line method has been used to calculate

depreciation, by applying annual ratios sufficient

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

their estimated useful life.

and equipment is revalued, the entire class of

property and equipment to which that asset belongs

should be revalued. Machinery, construction

equipment and vehicles corresponding to the

subsidiaries that did not make the abovementioned

revaluation are not significant.

The “sales comparison” method was used to obtain

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

and transparent secondary market. This approach

consists in obtaining information from recent sales or

offers of assets bearing similar characteristics, age and

condition. Correction factors that take into account the

status of the market offer and demand prevailing as

of the date of the appraisal, the relative age, probable

residual useful life, state of conservation and asset

obsolescence are applied to the sales price. The “cost

less depreciation” method was used to obtain the fair

value of assets with a restricted sales market.

Depreciation was computed based on generally

used and accepted engineering criteria which led

to establishing the reasonable value of PP&E. Such

criteria take into account factors such as the age

of each asset, probable residual or expected life,

state of conservation and degree of obsolescence.

The market value was obtained by applying the

depreciation ratio to the value of a new asset.

These subsidiaries intend to perform this appraisal

with the frequency required by IAS 16 in order to

keep fair values of appraised assets updated.

The increase in value of machinery, construction

equipment and vehicles resulting from the technical

appraisal performed on June 30, 2010 amounted to

USD 76,976 thousand (2009: USD 9,506 thousand)

and has been recorded net of tax effects USD 20,981



168,218

(132,696)

35,522

240,858

(156,628)

84,230

Historical cost

Accumulated depreciation

Residual value

June 30, 2009 June 30, 2010


5. Intangible assets







Additions

Amortization


June 30, 2010

1,839

915

(760)

102

2,096

2,479

915

(812)

80

2,662

640

-

(52)

(22)

566

Systems development

Goodwill COINFER

June 30, 2010

Systems development

Goodwill – COINFER

Total June 30, 2010

13,270

1,870

15,140

2,096

566

2,662

(11,174)

(1,304)

(12,478)

OriginalValue

AccumulatedAmortization

Net Value atJune 30, 2010


Additions

Amortization


Decrease due to business combination (see note 1)


June 30, 2009

1,215

976

(584)

485

(16)

(237)

1,839

2,447

-

-

-

(2,447)

-

-

4,532

976

(671)

485

(2,463)

(380)

2,479

870

-

(87)

-

-

(143)

640

Systems development

Goodwill TENCO and subsidiaries

Goodwill COINFER

June 30, 2009

64 | TEI&C S.A.

6. Investments in associated companies




Systems development

Goodwill – COINFER

Total June 30, 2009

12,469

1,936

14,405

1,839

640

2,479

(10,630)

(1,296)

(11,926)

OriginalValue

AccumulatedAmortization

Net Value atJune 30, 2009

Non-Current

Norpower S.A. de C.V.

Fluor Techint S.R.L. Construcción y Servicios Ltda. (1)

Consorcio Stabile Infrastrutture

Other

Total Investment in associated companies

100%

50%

30%

-

-

-

170

185

355

Book value

June 30, 2009

% of ownership

40%

50%

0.01%

-

886

297

-

206

1,389

Book value

June 30, 2010

% of ownership

(1) At June 30, 2009 the investment is recorded in liabilities



Dividends received

Result from investments

Sale and disposal of investments

Investment adquisition and contributions


Amount recorded in liabilities at the beginning of the year

Amount recorded in liabilities at the end of the year

End of the year

355

208

-

2,724

(254)

1,027

-

(2,671)

-

1,389

120

84

(972)

(384)

-

-

238

(1,402)

2,671

355

June 30, 2009 June 30, 2010


7. Other investments

The result from investments has arisen from

the Company’s participation in the results of the

following companies:

The following amounts represent the assets,

liabilities, revenues and results of the most important

associated companies as of June 30, 2010:

Non-Current

Current

Government Bonds

Other investment fund

La Nacion’s Trust fund

Other

Total other investments

Low liquidity funds in correspondent accounts

Government Bonds

Temporary placements

Total other investments

Fluor Techint S.R.L.Construcción y Servicios Ltda.


Others


Fluor Techint S.R.L. Construcción y Servicios Ltda.

-

6,597

140

37

6,774

990

-

20

1,010

2,329

705

(310)

2,724

34

5,821

162

59

6,076

-

137

21

158

408

-

(792)

(384)

1,763

4,659

5,584

36,241

7,184

9,291

9,400

9,886

June 30, 2010

June 30, 2010

Liabilities RevenuesAssets

June 30, 2009

June 30, 2009

Results



66 | TEI&C S.A.



Non-Current

Current

At the beginning of the year


Result from other investment

Investments currently consolidated (a)


Increase of other investments

Reclassification

Decrease of other investments

At the end of the year



Reclassification

Increase of other investments

Decrease of other investments


6,076

(205)

205

-

-

1,091

(33)

(360)

6,774

158

(5)

33

990

(166)

1,010

6,448

(1,197)

159

(448)

21

1,251

(138)

(20)

6,076

281

(57)

138

-

(204)

158

June 30, 2010 June 30, 2009

(a) During the year ended June 30, 2009 Servicios y Prestaciones Techint Funchal

- Serviços, Comércio e Gestão de Projetos Lda. acquired 80.78% equity interest of

Techint Compañía Técnica Internacional S.A. therefore the Company controls 97.33%

of this company and increased its indirect participation in Compañía Interamericana

de Trabajos Civiles Comintrac S.A (97.84%) and Cotecol Compañía Técnica de

Construcciones S.A. (97.73%)


Non-Current

Current

Other trade receivables - net

Guarantee deposit for investment acquisition

Receivables for sales of investments

Invoice holdback

Tax credit

Trade receivables from related parties (see note 25)

Other receivables from related parties (see note 25)

Other

Total trade and other receivables

Trade receivables - net

Trade receivables from related parties (see note 25)

Invoice holdback

Other trade receivables – net

Other receivables from related parties (see note 25)

Other receivables

Advanced to suppliers and subcontractors

Prepayments

Tax credit

Total trade and other receivables

12,393

-

3,755

5,491

5,032

914

8,639

2,256

38,480

213,816

28,477

11,862

565

2,090

26,841

32,239

3,569

47,494

366,953

15,170

8,250

-

727

6,985

-

9,240

968

41,340

301,855

42,173

13,212

613

3,876

28,283

25,874

1,940

40,265

458,091

June 30, 2010 June 30, 2009



8. Trade and other receivables

68 | TEI&C S.A.



9. Inventories


At June 30, 2010 and 2009 the evolution of the

allowance for doubtful accounts that was deducted

from Trade receivables is:

Non-Current

Current

Values at the beginning of the year

Translation

Additions

Values at the end of the year


Translation


Reversal

Additions

Used


-

(15)

870

855

10,955

425

-

(529)

73

(1)

10,923

-

-

-

-

14,976

(2,808)

140

(272)

28

(1,109)

10,955

June 30, 2010 June 30, 2009

Materials and spare parts

Others

Valuation allowance

Total Inventories

30,424

324

(2,996)

27,752

41,786

160

(6,098)

35,848

June 30, 2010 June 30, 2009



Translation

Reversal

Additions

Used


2,996

118

(24)

4,478

(1,470)

6,098

742

(139)

-

2,504

(111)

2,996

June 30, 2010 June 30, 2009



At June 30, 2010 and 2009 the evolution of the

valuation allowance that was deducted from

inventories is:

10. Financial instruments by category

Assets as per balance sheet


Other investments


Total

At June 30, 2010

Liabilities as per balance sheet

Borrowings

Financial lease liabilities


Other liabilities

Total

349,338

7,784

283,567

640,689

35,340

2,616

173,705

139,261

350,922

-

37

-

37

35,340

2,616

173,705

139,261

350,922

349,338

990

-

350,328

-

6,757

283,567

290,324

Assets at fair value through the profit and loss


Total

Total

Available for sale

Other financial liabilities at amortized cost

70 | TEI&C S.A.



Assets as per balance sheet



Other investments


Total

Liabilities as per balance sheet

Borrowings

Financial lease liabilities


Other liabilities

Total

5,265

450,241

6,234

223,140

684,880

89,620

15,501

209,431

131,010

445,562

-

-

59

-

59

89,620

15,501

209,431

131,010

445,562

-

450,241

-

-

450,241

4,789

-

6,175

223,140

234,104

476

-

-

-

476

Assets at fair value through the profit and loss

Derivatives used for hedging


Total

Total

Available for sale

Other financial liabilities at amortized cost

Determining fair values

The table below analyzes financial instruments

carried at fair value, by valuation method.

The different methods have been defined as follows:

Level 1- Quoted prices (unadjusted) in active

markets for identical assets or liabilities.

Level 2- Inputs other than quoted prices included

within level 1 that are observable for the asset

or liability, either directly (that is, as prices) or

indirectly (that is, derived from prices).

Level 3- Inputs for the asset or liability that are

not based on observable market data (that is,

unobservable inputs).

Comparative information is not presented for

the first year of application, as permitted by the

transitional provisions of the standard.

The following table presents the assets that are

measured at fair value at June 30, 2010.

•

•

•

Assets


Other investments

Total

283,567

6,757

290,324

-

140

140

-

-

-

283,567

6,617

290,184

Level 3Level 2Level 1 Total

At June 30, 2009




11. Held-for-sale assets


12. Derivative financial instruments

As of June 30, 2010, all the Company’s outstanding

derivative financial instruments were realized. In

addition, the Company has no foreign currency

forward contracts as of such date.

As of June 30, 2009, the Company has denominated

as accounting hedging some future contracts for

the sale of USD the reasonable value of which

contracts as of June 30, 2009, has generated a net

income of USD 476 thousand, and has been stated

in accounting records as follows: (i) charge to other

reserves of the equity for USD 215 thousand, net of

the tax effect, which amounts to USD 92 thousand;

and (ii) charge to results for USD 169 thousand

for those hedged contracts that turned out to be

ineffective. In addition, during the year ended on

June 30, 2009, the settlement of 8 contracts was

recorded in results, the settled expense of which

contracts was USD 3,451 thousand, the reasonable

value of such contracts in force as of June 30, 2008

for USD 1,469 thousand was reversed.

On October 31, 2008 the Company entered into a

foreign-currency swap with an initial amount of BRL

10,500, equivalent to USD 5,000. Under the swap

the Company receives a fixed amount of USD plus

interest of 5.95% and pays interest at 100% of the

Interbank Deposit Certificate. The fair value as of

June 30, 2009 is USD 4,789. The swap had a 361

days maturity and matured on October 27, 2009.

There are no derivatives outstanding as of June 30,

2010.

The net fair values of derivative financial

instruments at the balance sheet date were:

Discontinued operations (see note 24)

Advances to suppliers for equipment to be sold

Other investment

Total held – for – sale assets

45

-

22

67

4,048

239

-

4,287

June 30, 2010 June 30, 2009

Net fair value of derivative financial instruments

Forward foreign exchange contracts

Swap foreign currency

Total

476

4,789

5,265

-

-

-

-

-

-

-

-

-

Assets

At June 30, 2009

LiabilitiesAssets

At June 30, 2010

Liabilities

72 | TEI&C S.A.



13. Cash and cash equivalents

Cash, cash equivalents and bank overdrafts include

the following for the purposes of the consolidated

statement of cash flows:

14. Share capital

The composition of the Company’s capital is as

follows:

The ordinary shares have a value of UYU 1 per

share and one vote per five shares. All issued shares

are fully paid.

At June 30, 2008 the authorized capital stock

amounts to UYU 4,600,000 thousand.

On June 26, 2008, the Special Shareholders’ Meeting

decided to increase the authorized capital to UYU

5,500,000 thousand and accepted an Irrevocable

Contribution of USD 30,000 thousand (equivalent to

UYU 586,830 thousand) from Techint Investments NV,

the parent company of Techint Limited.

The Special Shareholders' Meeting of September

30, 2008 ratified the decisions taken at the previous

Special Shareholders' Meetings and decided

to change from nominative shares to bearer

shares and capitalize all the pending irrevocable

contributions (USD 72,317 thousand).

The new authorized capital, the capitalization and

the change in the type of shares are under process

of authorization in the AIN.

Cash at bank and on hand

Short-term bank deposits

Total cash and cash equivalents


Bank overdrafts

Total cash and cash equivalents

56,033

227,534

283,567

283,567

(1,141)

282,426

69,676

153,464

223,140

223,140

(298)

222,842

June 30, 2010

June 30, 2010

June 30, 2009

June 30, 2009

In thousands of shares

At June 30, 2009 (1)

At June 30, 2010 (1)

5,181,537

5,181,537

5,181,537

5,181,537

Number of shares

Ordinaryshares

(1) Including a provisional certificate by UYU 581.537 thousands, to be replace by

bearer shares after the Auditoría Interna de la Nación (AIN) authorization


16.80%

16.80%

14.00%

-

LIBOR6M + 2%

-

-

-

-

5.85%

-

-

-

4.70%

-

12.80%

-

39

365

13

-

10,928

-

-

-

-

6,445

-

-

-

848

-

10

-

-

18,648

45

-

41

34

-

435

248

2,051

262

-

693

2,003

136

-

408

220

40

42

6,658

ARS

ARS

ARS

-

USD

-

-

-

-

USD

-

-

-

CLP

-

USD

-

June 30, 2010Company Lender June 30, 2009

AmountAmount InterestRate

Currency



15. Borrowings

Non-Current COINFER

TEARG

TENCO

Techint S.A.C.

Techint Cía. Técnica

Internacional S.A.C.I. - Uruguay

TECHI

Sidernet S.A.

Sidernet Mexicana S.A. de C.V.

Other

Banco Supervielle S.A.

Banco Itaú BBA S.A.

Standard Bank Argentina S.A.

BBVA Banco Frances S.A.

Banco Itaú S.A (New York)

Banco Itaú S.A (New York)

HSBC Bank Argentina S.A.

Santa María Financial S.A.


Caterpillar Leasing Chile S.A.

HSBC Bank Perú S.A.

Banco Internacional del Perú S.A

– Interbank

HSBC Bank (Uruguay) S.A.

Banco Itaú Chile S.A.

Standard Bank Argentina S.A.

CGM Leasing Argentina S.A.

Banco Nacional de México S.A.

(*)

(*)

(*)

(*)

(*)

(*)

(*) Variable Rate

74 | TEI&C S.A.



16.80%

-

11.80%

-

-

LIBOR 6M + 2%

LIBOR + 2,5%

-

14.00%

-

-

8.75%

-

-

6.00%

9.50%

-

-

-

-

14.00%

12.80%

2.00%

2.00%

13

-

32

-

-

1,166

440

-

27

-

-

220

-

-

2,176

251

-

-

-

-

411

211

39

29

62

317

228

475

132

12,242

870

210

597

2,021

6,110

337

1,407

1,000

-

-

1,338

47

180

210

682

273

-

50

ARS

-

ARS

-

-

USD

USD

-

ARS

-

-

USD

-

-

USD

ARS

-

-

-

-

ARS

USD

USD

USD



Currency

Current COINFER

TEARG

TMR

Sidernet S.A.

Prestaciones Globales

Siderúrgicas S.A.

Prestaciones Globales

Siderúrgicas S.A.

Banco Supervielle S.A.

Sociedad Comercial del Plata S.A.


BBVA Italia


Banco Itaú S.A. (New York)

Banco Itaú S.A. (New York)

Banco Itaú BBA S.A. (Brazil)

Standard Bank Argentina S.A

Banco de San Juan S.A.

Banco Itaú Argentina S.A.




Santa María S.A.I.y F.



Banco Hipotecario S.A.

Banco Hipotecario S.A.


Standard Bank Argentina S.A

CGM Leasing Argentina S.A.


Agrupación Fdo. Copartic.

Financ. ACE

(*)

(*)

(*)

(*)

(*)

(*)

(*)

(*)

(*)




-

LIBOR 6M + 2.5%

5.85%

4.70%

7.00%

7.00%

-

4.50%

-

-

7.00%

-

LIBOR + 2.65%

-

-

3.94%

3.56%

-

-

-

273

1,531

136

220

71

-

600

-

-

284

-

42

-

-

5,018

5,015

-

-

1,103

19,308

18,160

271

-

-

6,325

3,412

1,344

-

150

171

-

260

96

20,203

10,000

-

-

5,876

2,167

1,240

98,463

-

USD

USD

CLP

USD

USD

-

USD

-

-

UYU

-

MXN

-

-

USD

USD

-

-



Currency

Current TENCO

TECHI

Techint S.A.C.

Techint Cía. Técnica

Internacional S.A.C.I. - Uruguay

Techint Inversiones S.A.I.F.

Sidernet Mexicana S.A. de C.V.

TEMEX

TECAN

Other



Caterpillar Leasing Chile S.A.

Banco Itaú Chile S.A.

HSBC Bank Perú S.A.


- Interbank


- Interbank




Crédit Uruguay Banco S.A.


Banco Nacional de Mexico S.A.

BNP Paribas S.A. (Spain)



Santander S.A.

BNP Paribas S.A. (Canada)

BNP Paribas S.A. (Canada)

(*)

(*)

(*)

(*)

(*) Variable Rate

76 | TEI&C S.A.

4 - 5 years3 - 4 years2 - 3 years1 year or less

Without due date

1 - 2 years Over 5 years



The maturity of borrowings is as follows:

The fair value of borrowings equals their carrying

amount, as the impact of discounting is not significant.

16. Deferred income taxes

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

the Company’s subsidiaries are subject to income

taxes. At June 30, 2010 and 2009 the Company

discloses under the caption “deferred income

tax assets” the net balance recognized by those

subsidiaries that recorded a net deferred income

tax asset, while the net balance recognized by those

subsidiaries that recorded a net deferred income tax

liability has been disclosed under “deferred income

tax liabilities” in the consolidated statement of

financial position.

The main subsidiaries generating deferred income

tax balances are detailed below:

June 30, 2010

June 30, 2009

Financial leases

Other borrowings

Total borrowings

Interest to be accrued

Financial leases

Other borrowings

Total borrowings

Interest to be accrued

37

6,684

6,721

-

-

-

-

-

217

2,548

2,765

49

-

-

-

-

207

2,866

3,073

165

-

-

-

-

400

2,710

3,110

276

23

-

23

-

414

2,565

2,979

388

3,624

3,011

6,635

429

1,341

17,967

19,308

713

11,854

86,609

98,463

1,583

-

-

-

-

-

-

-

-

Deferred Income Tax Assets

Deferred Income Tax Liabilities

TEBRA

Sidernet de Venezuela C.A.

TEMEX’s Subsidiaries

Other

TEARG

TENCO’s Subsidiaries

FEPSA

Other

36,639

-

3,682

414

40,735

(14,959)

(7,160)

(9,867)

(3,504)

(35,490)

45,106

2,868

16,083

1,082

65,139

(10,620)

(9,556)

(10,259)

(179)

(30,614)

June 30, 2010 June 30, 2009




At June 30, 2010 and 2009 the deferred tax balance

is originated by the following items:

The amounts shown in the balance sheet include

the following:

Deferred Income Tax Assets

Deferred Income Tax Liabilities

Tax-loss carry-forwards

Provisions

Deferred costs/Construction contracts

Exchange differences

Advances from clients

Different criterion used to assess the tax gain/

(loss) of the J.V.Techint Cía. Técnica Internacional

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

Other

Subtotal

Committed investment FEPSA

Different criterion used to assess the tax gain/

(loss) of the J.V.Techint Cía. Técnica Internacional

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

PP&E

Exchange differences

Deferred income/Construction contracts

PP&E revaluation (see note 4)

Inventories

Effect of restatement in constant currency

Other

Subtotal

Net deferred income tax asset

54,914

37,997

2,705

-

1,308

353

1,065

98,342

11,970

-

1,436

349

41,493

31,741

2,731

29

3,348

93,097

5,245

44,908

40,284

5,199

740

1,303

-

1,865

94,299

11,760

1,161

644

502

23,874

17,414

2,294

618

1,507

59,774

34,525

June 30, 2010 June 30, 2009

Deferred tax assets to be recovered within 12 months

Deferred tax liabilities to be recovered within 12 months

21,069

26,334

June 30, 2010

78 | TEI&C S.A.



The evolution of net deferred income tax asset /

(liability) during the year is as follows:

The evolution of deferred income tax assets and

liability during the year is as follows:

Deferred Tax Assets



Income statement charge / (Credit)


Deferred Tax Liabilities



PP&E revaluation

Income statement charge / (Credit)


44,908

3,191

6,815

54,914

40,284

170

(2,457)

37,997

5,199

386

(2,880)

2,705

1,303

5

-

1,308

11,760

(411)

-

621

11,970

23,874

(1,761)

-

19,380

41,493

17,414

(928)

20,140

(4,885)

31,741

2,294

-

-

437

2,731

2,605

512

(1,699)

1,418

4,432

419

-

311

5,162

94,299

4,264

(221)

98,342

59,774

(2,681)

20,140

15,864

93,097

Other

Other

Advances from clients

Inventories

Provisions

Deferred Income/Construction

contracts

Deferred costs/Construction

contracts

PP&E revaluation

Tax-loss carry-forwards

Committed investment

FEPSA

Total

Total



Increase due to business combinations (see note 1)

Decrease due to sale of subsidiaries (see note 1)

PP&E revaluation (net) (see note 4)

Future contracts

Income statement (charge) / credit


34,525

6,945

-

-

(20,140)

-

(16,085)

5,245

(13,292)

(416)

14,710

(18)

449

(92)

33,184

34,525

June 30, 2010 June 30, 2009




The tax loss carry-forwards mature as detailed below:

The recoverable value of deferred tax assets

depends on the existence of future income subject

to income tax, sufficient to be used before their

legal prescription. In this regard, Management

estimates that TEI&C’s subsidiaries will generate

sufficient taxable income in future periods so as to

offset the net balance of deferred income tax assets

recorded at June 30, 2010.

17. Trade and other payables

Year 2010

Year 2011

Year 2012

Year 2013

Year 2014

Year 2015

Year 2016

Year 2017

Year 2018

Year 2019

Year 2020

Without maturity

-

2

38

82

1,302

3,129

89

20,463

33,272

21,716

32,203

108,049

220,345

767

2,816

2,784

87

2,372

20

113

18,280

31,028

27,568

-

112,729

198,564

June 30, 2010 June 30, 2009

Non-Current

Current

Trade payables

Social security and other taxes

Total trade and other payables

Trade payables

Social security and other taxes

Amounts due to related parties (see note 25)

Other payables

Total trade and other payables

467

22,744

23,211

149,444

114,543

4,120

1,799

269,906

246

17,616

17,862

192,974

107,951

3,206

-

304,131

June 30, 2010 June 30, 2009

80 | TEI&C S.A.



The maturity of trade and other payables is as follows:

18. Other liabilities

At June 30, 2010


Total Trade and other payables

8,110

8,110

269,906

269,906

7,146

7,146

2,198

2,198

1,021

1,021

4,736

4,736

3 - 4 years2 - 3 years1 year or less

1 - 2 yearsWithout due date

Over 4 years

Non-Current

Current

Provisions (see note 19)


Other liabilities

Total other liabilities

Provisions (see note 19)

Advances received on construction contracts

Advances received on construction contracts from related parties (see note 25)


Other liabilities and provisions

Total other liabilities

26,332

748

9,392

36,472

14,607

81,677

115

1,000

5,390

102,789

31,113

3,750

1,917

36,780

10,300

76,653

784

2,166

4,327

94,230

June 30, 2010 June 30, 2009




19. Provisions

Non-Current

Current

Non-Current

Current

Values at June 30, 2009

Translation

Reversal

Additions

Used



Translation

Reversal

Additions (a)

Used



Translation

Reversal

Additions

Increase due to business

combination (see note 1)

Used



Translation

Additions

Increase due to business

combination (see note 1)

Used


11,107

5

(2,000)

2,290

(2,141)

9,261

630

-

-

6,137

(525)

6,242

7,970

468

(555)

1,181

193

9,257

4,459

(16)

(1,500)

790

-

3,733

5,061

394

(5,118)

1,270

(326)

1,281

3,586

-

-

-

-

3,586

6,975

138

(2,408)

3,647

(1,819)

6,533

1,625

14

-

960

(1,553)

1,046

31,113

1,005

(10,081)

8,388

(4,093)

26,332

10,300

(2)

(1,500)

7,887

(2,078)

14,607

522

(124)

-

1,825

10,907

(2,023)

11,107

1,118

-

-

-

(488)

630

3,776

(602)

(697)

6,853

-

(1,360)

7,970

1,568

(341)

47

3,497

(312)

4,459

6,640

(1,238)

(7,718)

7,485

-

(108)

5,061

-

-

3,586

-

-

3,586

6,950

(1,548)

(2,289)

4,208

-

(346)

6,975

7

(1)

1,121

503

(5)

1,625

17,888

(3,512)

(10,704)

20,371

10,907

(3,837)

31,113

2,693

(342)

4,754

4,000

(805)

10,300

Other

Other

Civils

Civils

Taxes

Taxes

Labor

Labor

Total

Total

(a) The Saudi Techint Ltd.’s minority shareholder filed a complaint against TENCO

before the 15th Commercial Tribunal of the Board of Grievances of Saudi Arabia

seeking relief for damages and claim; therefore, the Company created an allowance

for USD 6 million, i.e. the amount estimated by the Company and its legal counsel

that should be paid to settle such dispute.

82 | TEI&C S.A.



20. Employee benefits

Non-funded defined benefits and other

long-term benefits

The amounts recognized in the consolidated

statement financial position are determined as follows:

The amounts recognized in the income statement

are as follows:

Present value of unfunded obligations

Costs for services rendered in the past not recorded

Unrecognized actuarial losses

Liability in the consolidated statement financial position

Current service cost

Interest cost

Net actuarial (gains) losses recognized in the year

Amortization of costs for services rendered in the past not recorded

Total included in Labor costs

27,033

(1,251)

(7,907)

17,875

2,201

2,833

879

515

6,428

18,578

(724)

(4,849)

13,005

1,496

2,881

1,544

321

6,242

Year endedJune 30, 2010







At June 30, 2010 and 2009, the main actuarial

premises used for calculation of such plans

contemplate a discount rate of 7% and of 6%

(real) and a salary increase rate of 2% and 3 %,

respectively. The actuarial premises used in TEMEX

for calculation of such plans contemplate a discount

rate of 8.58% (real) for both years and a salary

increase rate of 6.08% and 6.40% respectively.

Contribution plans

During the year ended June 30, 2010 TEBRA

contributed USD 1,229 to the defined contribution

plans.

The amounts and movements in the liabilities

recognized in the consolidated statement financial

position are determined as follows:


Translation

Transfers and new participants of the plan

Total expense

Services rendered in the past not recorded

Contributions paid


13,005

(387)

(315)

6,428

773

(1,629)

17,875

10,490

(2,419)

69

6,242

-

(1,377)

13,005



84 | TEI&C S.A.



21. Participation in Joint Ventures

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

which also perform engineering, procurement and

construction activities. The Company’s participation

in those J.V.s was recorded through proportional

consolidation of assets, liabilities and results.

The following balances represent the J.V.s assets

and liabilities at June 30, 2010 and 2009:

Techint Cia. Técnica Internacional S.A.C.I. - Panedile

Argentina S.A. - Unión Transitoria de Empresas -

Complejos “Los Caracoles” and “Punta Negra“ (1)

Techint Cia. Técnica Internacional S.A.C.I. - Impregilo

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

de Empresas - Complejo Penitenciario Ezeiza (1)

Techint Cia. Técnica Internacional S.A.C.I. - Luis M.

Pagliara S.A. - Unión Transitoria de Empresas - C. Re.

Ma. Malla 332 (1)

Techint Cia. Técnica Internacional S.A.C.I. - B.Roggio

e Hijos S.A. - Unión Transitoria de Empresas – Subte

Linea A (1)

Techint Cia. Técnica Internacional S.A.C.e I. - FLUOR

Inc. - Unión Transitoria de Empresas - Proyecto:

Pascua Lama (1)

Techint Cia. Técnica Internacional S.A.C.e I. - FLUOR

Inc. - Unión Transitoria de Empresas - Proyecto:

Expansión Veladero (1)

Consórcio Techint UMSA II - Alumina do Norte do

Brasil S.A. - Boilermaking (2)

Consórcio Techint UMSA III - Alumina do Norte do

Brasil S.A.- Electromechanical Assembly West Area (2)

26,071

17,248

1,162

588

1,998

2,677

-

-

12,450

20,471

1,219

2,182

2,445

14,362

30,320

34,010

24,683

2,011

131

971

3,846

12,363

-

-

75.00%

65.00%

60.00%

50.00%

50.00%

50.00%

60.00%

80.00%

26,820

1,580

236

88

2,250

518

-

-

75.00%

65.00%

60.00%

50.00%

50.00%

50.00%

-

-

Total J.V.'s Liabilities


Total J.V.'s Assets

Total J.V.'s Assets

Main Joint Ventures

June 30, 2009June 30, 2010

% of ownership

% of ownership




Consórcio Techint Confab UMSA - Lot I Tanks

Refinaria do Nordeste, Abreu e Lima (RNEST) (2)

Consórcio Andrade Gutierrez - Techint (AG-TECH) Diesel

Unit of Landulpho Alves - Mataripe Refinery (RLAM) (2)

Consórcio Odebrecht-Techint (ODETECH)-Gasduc III (2)

Tamburí Comércio de Máquinas e Serviços de

Engenharia Ltda. (Tamburí) (2)

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

ABB Lummus Techint Trinidad Joint Venture - Gasoline

Optimization Program Upgrade - Petroleum Company

of Trinidad and Tobago Limited - Construction

Management Services (1)

ABB Lummus Techint Bahamas Joint Venture - Gasoline

Optimization Program Upgrade - Petroleum Company of

Trinidad and Tobago Limited - Engineering, Procurement

and Management Services (3)

Chiquintirca Joint Venture - Chiquintirca Gas

Compression Plant (3)

Techint / Somerville - Waupisoo Project (4)

Techint / Somerville - Corridor Project (4)

Techint / Somerville - Clipper Project (4)

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

136,741

7,266

196

54,574

16,946

13,448

17,097

13,003

-

70

26,774

3,093

75

43,661

97,985

13,880

-

13,623

33,396

51,765

812

2,856

80,702

22,456

1,233

29,103

17,655

8,858

-

8,735

17,500

47,907

2,390

2,704

49,532

58,416

60.00%

50.00%

50.00%

50.00%

-

50.00%

50.00%

60.00%

50.00%

50.00%

50.00%

50.00%

82,551

10,968

174

46,734

10,518

10,425

2,142

11,105

1,452

1,679

3,631

8,485

60.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

60.00%

50.00%

50.00%

50.00%

50.00%



Total J.V.'s Assets

Total J.V.'s Assets

Main Joint Ventures

June 30, 2009June 30, 2010

% of ownership

% of ownership

(1) Controlling interest through TEARG.

(2) Controlling interest through TEBRA.

(3) Controlling interest through TENCO.

(4) Controlling interest through TEMEX.

86 | TEI&C S.A.



The following balances represent the J.V.s results at

June 30, 2010 and 2009:

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

- Unión Transitoria de Empresas - Complejos “Los Caracoles“ and

“Punta Negra“ (1)

Techint Cia. Técnica Internacional S.A.C.I. - Impregilo S.p.A (Sucursal

Argentina) - Iglys S.A. - Unión Transitoria de Empresas - Complejo

Penitenciario Ezeiza (1)

Techint Cia. Técnica Internacional S.A.C.I.- Luis M. Pagliara S.A.-

Unión Transitoria de Empresas-C. Re. Ma. Malla 332 (1)

Techint Cia. Técnica Internacional S.A.C.I. - B. Roggio e Hijos S.A. -

Unión Transitoria de Empresas - Subte Linea A (1)

Techint Cia. Técnica Internacional S.A.C.e I. - FLUOR Inc. - Unión

Transitoria de Empresas - Proyecto: Pascua Lama (1)

Techint Cia. Técnica Internacional S.A.C.e I. - FLUOR Inc. - Unión

Transitoria de Empresas - Proyecto: Expansión Veladero (1)

Consórcio Techint UMSA II - Alumina do Norte do Brasil S.A. -

Boilermaking (2)

Consórcio Techint UMSA III - Alumina do Norte do Brasil S.A.-

Electromechanical Assembly West Area (2)

Consórcio Techint Confab UMSA - Lot I Tanks Refinería do Nordeste,

Abreu e Lima (RNEST) (2)

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

Landulpho Alves - Mataripe Refinery (RLAM) (2)

Consórcio Odebrecht - Techint (ODETECH) - Gasduc III (2)

11,258

(2,200)

(117)

(572)

1,229

2,625

-

-

17,146

10,542

78,316

(17,278)

1,784

(88)

(1,174)

505

4,405

329

6,338

480

27,388

39,610

75.00%

65.00%

60.00%

50.00%

50.00%

50.00%

60.00%

80.00%

60.00%

50.00%

50.00%

75.00%

65.00%

60.00%

50.00%

50.00%

50.00%

-

-

60.00%

50.00%

50.00%

J.V.'sResults

J.V.'s Results

Main Joint Ventures

June 30, 2009June 30, 2010

% of ownership

% of ownership


J.V.'sResults

J.V.'s Results

June 30, 2009June 30, 2010

% of ownership

% of ownership



Tamburí Comércio de Máquinas e Serviços de Engenharia Ltda.

(Tamburí) (2)

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

ABB Lummus Techint Trinidad Joint Venture - Gasoline Optimization

Program Upgrade - Petroleum Company of Trinidad and Tobago

Limited - Construction Management Services (1)

ABB Lummus Techint Bahamas Joint Venture - Gasoline Optimization

Program Upgrade - Petroleum Company of Trinidad and Tobago

Limited - Engineering, Procurement and Management Services (3)

Chiquintirca Joint Venture - Chiquintirca Gas Compression Plant (3)

Techint / Somerville - Waupisoo Project (4)

Techint / Somerville - Corridor Project (4)

Techint / Somerville - Clipper Project (4)

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

2,352

4,806

(1,805)

(486)

4,905

180

1,595

114,489

(2,017)

3,790

-

4,554

1,836

6,845

13,090

36,584

46,090

22,218

50.00%

-

50.00%

50.00%

60.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

60.00%

50.00%

50.00%

50.00%

50.00%

Main Joint Ventures

(1) Controlling interest through TEARG.

(2) Controlling interest through TEBRA.

(3) Controlling interest through TENCO.

(4) Controlling interest through TEMEX.

88 | TEI&C S.A.



22. Contingencies and commitments

a. Guarantees and bonds granted

TEI&C and its subsidiaries have entered into a

series of guarantee contracts with third parties

through which they undertake the unconditional

and irrevocable obligation to guarantee the prompt

and complete payment and performance of certain

liabilities incurred by related parties. In addition,

b. Works executed under a trust, construction, and

leasing agreement

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

Técnica Internacional S.A.C.I. – Impregilo S.p.A.

(Sucursal Argentina) – Iglys S.A., has signed a contract

with the Argentine Government for the construction

of a penitentiary institution, under the turnkey system,

located in Ezeiza, province of Buenos Aires, payable in

60 quarterly installments as canon, nominated in USD.

The J.V. accepted the pesification of canons at

a ARS 1-USD 1 rate and the application of the

Reference Stabilization Index (RSI) until the effective

date of payment, according to the Agreements

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

and Human Rights, dated November 19, 2003 and

September 9, 2004. The canons collected plus RSI

certain of the Company’s subsidiaries issued a

number of guarantees to provide for the obligations

assumed in the normal course of business.

As of June 30, 2010 and 2009, TEI&C issued the

following guarantees on behalf of other companies,

as follows:

after the Agreement dated September 9, 2004, were

Nos. 17, 18, 19, 20, 21 and 22. On the other hand,

before execution of such Agreement, canon No. 8

was also collected plus RSI in January 2003.

That notwithstanding, the J.V. received from such

Ministry payments for several canons not applying

the RSI, which have been taken by the J.V. as partial

payments of the total amount due and payable arising

from the Agreement dated September 9, 2004.

Thus, from January 2006 to the date of issue of

these financial statements, the J.V. received as

partial payment a total amount of USD 40,0771

thousand corresponding to canons 10 to 16 and 23

to 43 at a ARS 1-USD 1 rate, not applying the RSI.

Taking into account this situation, in the past fiscal

SIDOR C.A.

Barrick Explotaciones Arg. S.A.

Caterpillar Financial Services Corporation

Siderca S.A.I.C.

ABB Lummus Global Overseas Corporation

ABB Lummus Global Inc.

JGC Arabia Limited

JGC Corporation

Anglo American Sur S.A.

Total

Granted in favor of:

(in million of USD)

10.9

23.0

0.3

0.8

7.0

9.5

18.4

30.1

116.2

216.2

10.9

23.0

6.7

0.8

7.0

9.5

-

-

-

57.9

June 30, 2010 June 30, 2009




year the J.V. Management made a new estimate of

the date of probable collection of the RSI past due

and to become due.

The proportional participation of TEARG in the total

balance receivable of the J.V. with the Argentine

Government as of May 31, 2010 amounts to

USD 56,6301 thousand (at May 31, 2009: USD 62,776

thousand).

The amount of such credit recorded in these

consolidated financial statements, which arises from

discounting the amounts mentioned above from

their current value on May 31, 2010, is equal to USD

28,2851 thousand, capital USD 10,0871 thousand and

RSI USD 18,1981 thousand, (at May 31, 2009: USD

31,8021 thousand, capital USD 12,9621 thousand and

RSI USD 18,8401 thousand) of which the amount of

USD 10,8571 thousand is past due at June 30, 2010 (at

June 30, 2009: USD 10,514 thousand).

All these financial credits correspond to the canons

receivable from the Argentine Government, due

and to become due, which were recorded as per the

Agreement executed on September 9, 2004 with the

Undersecretariat of Coordination and Innovation

under the National Ministry of Justice and Human

Rights, in Pesos at a rate of ARS 1-USD 1 and

adjusted with RSI up to December 31, 2008. As from

such date, credits were no longer adjusted with

RSI as a result of the filing of the Arbitration Claim

before the International Court of Arbitration of the

International Chamber of Commerce stated in the

following paragraph.

Taking into account the Ministry of Justice’s delay

as to a resolution and payment of the overdue

debt, Santander Río Trust S.A., in its capacity as

Trustee and Grantor of the Leasing, on July 4, 2008,

following the J.V.’s express instructions, submitted

a note demanding payment of amounts due.

Upon failure to answer by the Ministry of Justice,

on November 28, 2008, an Arbitration Claim was

filed before the International Court of Arbitration

of the International Chamber of Commerce, for

the purpose of appointing an arbitration tribunal

consisting of three arbitrators and to hold the

respondent, the Argentine Government, liable for

payment of the amounts claimed plus any interest

that may be accrued and the new terms of the

debt to expire during the arbitration process. The

arbitration claim was notified to the Argentine

Government in May 2009, the Arbitral Tribunal was

constituted and the process is now at the stage of

issue of the Mission Statement. In the opinion of

the J.V.’s Management and of its legal advisors, it

is estimated that, by application of the legal rules

and regulations regarding pesification (application

of RSI to due canons) which should be applicable to

this contractual structure, the J.V. has a solid legal

position to collect its credits within the scope of the

abovementioned legal rules and regulations.

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

of Executive Order No. 541/09, which empowers

UNIREN to renegotiate the Construction, Trust and

Leasing Agreement executed in 1998 in relation

to Penitentiary Complex I (Ezeiza). The J.V. has not

consented to the provisions of such executive order

by virtue of the defects thereof. On June 18, 2009,

a letter was submitted through Santander Río Trust

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

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

to the above-stated respect claiming the unlawful

nature of such executive order.

(1) Outstanding collecting amounts are nominated in argentine peso.

The figures shown in USD belong to the amounts in argentine pesos which were

translated at the year end exchange rate.(2010: USD 1 – ARS 3,931

and 2009: USD 1 – ARS 3,797)

90 | TEI&C S.A.



As of the date of issue of these financial statements,

while the arbitration proceeding continues, the

claimants and respondent continue holding

conversations in order to assess the possibility of an

eventual solution of the conflict.

c. Other Contingencies and uncertainties

The company has tax and civil lawsuits for which

the legal advisors consider the possibility of loss

is possible and, therefore, no provision was set

up. The amounts of these contingencies amount

as of June 30, 2010 to USD 9,611 thousand for tax

contingencies and USD 4,198 thousand for civil

contingencies.

23. Restricted assets

TENCO and subsidiaries

At June 30, 2010 and 2009, the net carrying amounts

of the PP&E held under finance lease amount to

USD 5,992 thousand and USD 17,579 thousand,

respectively. At June 30, 2010 and 2009, liabilities

for finance leases amount to USD 1,275 thousand

and USD 12,433 thousand, respectively.

TEARG

At June 30, 2010, there are PP&E with a residual

book value of USD 748 thousand (at June 30,

2009: USD 1,655 thousand) which are pledged as

guarantee for liabilities under leasing agreements

for USD 279 thousand (at June 30, 2009: USD

1,163 thousand) and USD 13 thousand (at June

30, 2009: USD 322 thousand), included in the

account "Borrowings" (current and non-current,

respectively).

Coincar S.A.

Under the Credit Facility Agreement entered into

by Coincar S.A. with Banco Río de la Plata S.A.

and Banco de Galicia y Buenos Aires, Coincar S.A.

agrees not to sell nor cause to be sold, assign in

ownership and/or use and/or usufruct, mortgage,

pledge, loan and/or loan for use, levy in any manner

whatsoever, lease and/or enter into a leasing, grant

a security and/or personal interest with respect to,

not to transfer and/or in any manner dispose of,

either in a transaction or a series of transactions, all

or a substantial portion of any of its assets, goods

and/or rights and/or of its assets, goods and/or

rights to be acquired in the future, nor to distribute

dividends, pay fees to the company’s directors

or consultants, without the prior consent of the

majority of the banks that granted the Credit Facility

Agreement.

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

Licensed assets:

In conformity with the regulations established in

the bid specifications and the License Agreement,

the subsidiary FEPSA received from Ferrocarriles

Argentinos assets of its own to be used in the

operation (included in “Property, plant and

equipment” non-current). They primarily comprise

infrastructure (main and secondary railway

network), real property (warehouses and buildings),

transportation material (locomotives and coaches),

fixed facilities and other. Upon expiration of the

license, the assets will be returned to Ferrocarriles

Argentinos, at no additional cost, in their normal

condition of maintenance, except for the wear and

tear over time and the normal use.

TEBRA

At June 30, 2010, the Company had USD 4,007

thousand (at June 30, 2009: USD 5,884 thousand)

in assets granted as guarantee for different

proceedings.

TEMEX

At June 30, 2010 and 2009, TEMEX and its

subsidiaries had obtained resources from financial

entities amounting to USD 45,639 thousand

and USD 28,246 thousand respectively, which

are supported with percentage-of-completion

certificates for projects in process. Those resources

have been paid by assigning the above-mentioned

collection rights.




Sidernet S.A.

At June 30, 2010, there are PP&E with a residual book

value of USD 1,205 thousand (at June 30, 2009: USD

1,836 thousand) which are pledged as guarantee

for liabilities under leasing agreements for USD

622 thousand (at June 30, 2009: USD 955 thousand)

and USD 10 thousand (at June 30, 2009: USD 628

thousand), included in the account "Borrowings"

(current and non-current, respectively).

24. Discontinued operations

In April 2008, the Government of the Bolivarian

Republic of Venezuela made public its decision

to nationalize SIDOR C.A., Sidernet de Venezuela

C.A. (“Sidernet”) and Servicios Siderúrgicos

Sersisa, S.A. (“Sersisa”)’s only client. On April 29,

2008, the National Assembly of Venezuela agreed

to declare SIDOR C.A.’s shares of public use and

social interest. On April 30, 2008, the President of

Venezuela sent to the Supreme Court of Justice

an Executive Order with the rank, value and force

of an Organic Law (Ley Orgánica de Ordenación)

to regulate the companies involved in iron & steel

activities in the Region of Guayana, for such Court

to render an opinion on the constitutional standing

of the Executive Order’s organic nature. On May

9, 2008, the Supreme Court of Justice declared the

constitutionality of the organic nature and ordered

the transformation of SIDOR C.A, its affiliates

and subsidiaries into state-owned companies,

and declared the activities performed by SIDOR

C.A., its affiliates and subsidiaries, as well as the

works, tasks and services required to perform such

activities, of public use and social interest.

Based on the foregoing, on June 12, 2008, the

Sidernet’s management sent a notification to SIDOR

C.A.’s new board stating its intention to transfer

the services rendered by the Company to SIDOR

C.A. through the sale of all its pieces of equipment,

fixtures and fittings and other investments made,

as well as to transfer its entire and detailed payroll,

except for expatriated personnel, together with the

stock of spare parts, tools and consumables in the

inventory, and the services paid in advance as of the

date the service is transferred.

On September 26, 2008, SIDOR was notified of the

company’s intention to early terminate the contract,

which early termination took place on April 7, 2009.

On such date, SIDOR and Sidernet executed the

Agreement for Early Termination of “The Contract”,

Final Receipt of services and delivery of equipment

and spare parts, whereby both parties stated that

the business relationship existing between them

by virtue of such Contract was terminated, and

therefore, all the obligations to do (affirmative

covenants) assumed by the companies deriving

from the execution of “The Contract” became

extinguished, except as otherwise provided for in

such document.

Based on the facts and circumstances described

above the Company ceased consolidating Sidernet

and Sersisa’s results of operations as from July 1,

2007 and classified a group of assets and liabilities

as held-for-sale.

The results of operations generated by Sidernet

and Sersisa as held-for-sale were presented

as discontinued operations in these financial

statements.

92 | TEI&C S.A.



Analysis of the result of discontinued operations:


Cost of sales (see note 27)

Gross (loss) / profit

General and administrative expenses (see note 27)

Other income and expenses, net (see note 29)

Operating profit / (loss)

Financial results, net (see note 28)

Results before income tax

Income tax (see note 30)

Results from discontinued operations

-

(494)

(494)

(1,173)

13,969

12,302

(2,135)

10,167

(4,931)

5,236

7,581

(5,305)

2,276

(2,885)

238

(371)

(3,142)

(3,513)

262

(3,251)

June 30, 2010 June 30, 2009




25. Related party transactions

The group is controlled by Techint Limited, which

owns 88.67% of the company’s shares. The ultimate

parent of the group is San Faustin N.V.

Year-end balances with related parties others than

the Parent Company.

Transactions with associated parties

914

8,639

711

1,699

2,410

26,067

2,090

748

-

115

1,000

4,120

2,244

-

9,240

103

-

103

42,070

3,876

3,750

2,051

784

2,166

3,206

2,965

June 30, 2010 June 30, 2009

Non-Current Assets

CurrentAssets

Non-Current Liabilities

Current Liabilities

Trade receivables from related parties

Other receivables from related parties

Trade receivables

Fluor Techint S.R.L. Construcción y Servicios Limitada - Chile


Trade receivables from associated parties

Trade receivables from related parties

Other receivables from related parties

Other liabilities due to related parties

Borrowings from related parties

Advances received on construction contracts from related parties

Other liabilities due to related parties

Trade and other payables due to related parties

Borrowings from related parties

8

8

8

8

8

18

15

18

18

17

15

Notes

Sales of goods and services

Fluor Techint S.R.L. Construcción y Servicios Limitada - Chile 3,363 3,755

June 30, 2010 June 30, 2009

94 | TEI&C S.A.



Transactions with related parties others than the

Parent Company

The aggregate compensation of the directors and

executive officers earned during 2010 and 2009

amounts to USD 12,105 thousand and USD 9,889

thousand, respectively.

Sales of goods and services

Purchases of goods and services

191,206

6,773

220,592

20,914

June 30, 2010 June 30, 2009




26. Subsidiaries

% of ownership

June 30, 2009 (*)

B.V. de Nieuwe Weg

BVT LNG Costa Azul, S. de R.L. de C.V.

Caminos del Oeste S.A.

Carbonser, S.A. de C.V.

Carbontec, S.A. de C.V.

Cimimontubi S.A.

Coincar S.A.

Compañía Interamericana de Trabajos Civiles Comintrac S.A.

Compañía Inversora Ferroviaria S.A.I.F.

Constructora Mexicana Electromecánica y de Instrumentación, S.A. de C.V.

Cotecol Compañía Técnica de Construcciones S.A.

Elina 406, S.A. de C.V.

Elina de Occidente, S.A. de C.V.

Elina LT, S.A. de C.V.

Elina Sureste, S.A. de C.V.

Elinatech, S.A. de C.V.

Energía Tamaulipas S.A. de C.V.

Ferroexpreso Pampeano S.A.C.

Fidelis Management S.A.

Flinwok S.A.

Mexcarbón, S.A. de C.V.

Nitroelina, S.A. de C.V.

Norgas S.A.

Norpower, S.A. de C.V.

Preglosid S.L.U.

Prestaciones Globales Siderúrgicas S.A.

Saudi Techint Ltd.

Servicios Siderúrgicos Sersisa, S.A.

Servicios y Prestaciones Techint Funchal - Serviços, Comércio e Gestão de

Projetos Lda.

SICI - Servicios de Ingeniería y Construcciones Industriales S.A. de C.V.

Sidernet S.A.

Sidernet de Venezuela C.A.

Sidernet Mexicana S.A. de C.V

Socominter Sociedade Comercial Internacional Ltda.

Tanks Technologies, S.A. de C.V.

Holland

Mexico

Argentina

Mexico

Mexico

Venezuela

Argentina

Ecuador

Argentina

Mexico

Colombia

Mexico

Mexico

Mexico

Mexico

Mexico

Mexico

Argentina

Panama

Uruguay

Mexico

Mexico

Argentina

Mexico

Spain

Argentina

Saudi Arabia

Venezuela

Portugal

Mexico

Argentina

Venezuela

Mexico

Brazil

Mexico

100.00%

50.00%

(1)

50.00%

50.00%

100.00%

65.00%

100.00%

77.14%

100.00%

99.86%

51.00%

100.00%

50.00%

53.00%

(3)

100.00%

(4)

100.00%

100.00%

50.00%

70.00%

50.00%

(6)

100.00%

100.00%

60.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

51.00%

Company

Country % of ownership

June 30, 2010 (*)

100.00%

50.00%

(1)

25.00%

25.00%

100.00%

65.00%

100.00%

77.14%

100.00%

99.86%

51.00%

100.00%

50.00%

53.00%

100.00%

100.00%

(4)

100.00%

100.00%

25.00%

70.00%

50.00%

100.00%

100.00%

100.00%

60.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

51.00%

(2)

(2)

(2)

96 | TEI&C S.A.



% of ownership

June 30, 2009 (*)

Techint Chile S.A.

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

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

Techint Compañía Técnica Internacional S.A.

Techint E&C, S.A. de C.V.

Techint Engenharia e Construção S.A.

Techint E&C, Inc.

Techint International Construction Corp. (TENCO)

Techint Ingeniería y Construccion Bolivia S.A.

Techint Ingeniería y Construcciones, S.L.U.

Techint Inversiones S.A.I.F.

Techint Nigeria Limited

Techint S.A.C.

Techint, S.A.

Techint, S.A. de C.V.

Techint, S.A. de C.V.

Techint, S.A.

Techint, S.A.

Techint Servicios, S.A. de C.V.

Tecnomatter Instalaciones y Construcciones S.A.I.F.

Tecnomatter S.A. de C.V.

Tecnopower S.A de C.V.

Terminales Portuarias del Pacífico, S.A.P.I. de C.V.

TGT de México, S.A. de C.V.

Chile

Argentina

Uruguay

Venezuela

El Salvador

Brazil

Canada

Bahamas

Bolivia

Spain

Argentina

Nigeria

Peru

Guatemala

Honduras

Mexico

Nicaragua

Panamá

Mexico

Argentina

Mexico

Mexico

Mexico

Mexico

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

(3)

66.66%

(5)

(7)

Company

Country % of ownership

June 30, 2010 (*)

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

-

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

100.00%

(5)

12.00%

100.00%

(2)

(*) Direct and indirect participating interests are included.

(1) At June 30, 2010 the Company decided to include its proportional shareholders’

equity in the liabilities since the subsidiary has a negative shareholders’ equity. At

June 30, 2009, assets, liabilities and results are not included in the consolidated

financial statements because the Company decided to set up an allowance for the

full investment value.

(2) TEMEX has the power to govern the financial and operating policies of the entity

(3) During the fiscal year, these companies were wound-up.

(4) Controlling interest through Compañía Inversora Ferroviaria S.A.I.F.

(5) See note 1.

(6) On August 27, 2009, TEMEX sold 60% of its shares in Norpower, S.A. de C.V.

(7) On August 27, 2009, TEMEX sold 100% shares owned in TGT de Mexico SA de C.V.




27. Cost of sales and expenses by nature

June 30, 2009

Labor costs

Taxes, rates and contributions

Fees and technical advice

Sub-contract for services

Purchases of material and supplies

PP&E depreciation

Intangible assets Amortization

Work structure expenses

Office structure expenses

Participation in J.V. balances

Unallocated costs

Subtotal

Discontinued operations (See note 24)

Total June 30, 2010

Total June 30, 2009

589,634

28,469

51,748

219,034

247,311

48,033

812

27,065

58,892

53,481

37,880

1,362,359

(1,667)

1,360,692

-

4,348

1,116

222

2,785

95

-

-

54

14

-

1,310

9,944

-

9,944

7,594

66,203

7,305

15,126

10,952

565

4,024

655

3,879

8,118

-

9,328

126,155

(1,173)

124,982

101,903

519,083

20,048

36,400

205,297

246,651

44,009

157

23,132

50,760

53,481

27,242

1,226,260

(494)

1,225,766

1,332,196

June 30, 2010Selling expenses

Cost of sales General and administrative

expenses

511,631

58,774

44,213

263,084

293,126

53,215

671

18,586

42,235

130,494

33,854

1,449,883

(8,190)

-

1,441,693

98 | TEI&C S.A.



28. Financial results

10,723

-

586

1,600

2,870

26

15,805

(6,687)

9,118

(7,344)

(6,832)

(304)

(101)

(3,648)

(1,782)

(20,011)

8,822

(11,189)

21,835

29,123

-

2,061

274

214

53,507

(316)

53,191

(18,867)

-

(5,551)

(5,374)

(2,969)

(2,730)

(35,491)

3,458

(32,033)

June 30, 2010 June 30, 2009

Income

Costs

Interests and indexation

Net foreign exchange transaction

Derivate financial instruments

Discount at current value credits Techint Cia. Técnica Int. S.A.C.I.-

Impregilo S.p.A (Suc. Argentina) - Iglys S.A. - U.T.E.

Holding results

Other


Interests and indexation

Net foreign exchange transaction

Derivate financial instruments

Holding results

Comissions

Other





29. Other income and expenses, net

13,399

(5,701)

601

819

9,118

(13,969)

(4,851)

4,639

-

(5,363)

1,970

1,246

(238)

1,008

June 30, 2010 June 30, 2009

Gain from the sale of PP&E

Impairment loss

Net result for provisions for legal claims and contingencies

Other


100 | TEI&C S.A.



30. Income tax expense

The net difference between the tax calculated at the

rate in effect in each country and the total charge for

the year is generated by the following:

(45,388)

(16,085)

(61,473)

4,931

(56,542)

(60,066)

1,153

4,180

-

544

(7,765)

-

2,514

(1,410)

5,582

(2,944)

(3,261)

(61,473)

(47,296)

33,184

(14,112)

(262)

(14,374)

(64,626)

2,696

(684)

3,050

1,419

1,045

37,367

8,724

(2,505)

-

(110)

(488)

(14,112)

June 30, 2010

June 30, 2010

June 30, 2009

June 30, 2009

Current income tax

Deferred income tax

From discontinued operations (see note 24)

Tax calculated at the applicable rate on the result for the year

Effect of restatement in constant currency

Result due to participating interests in subsidiaries and related companies

Sale of participating interests

Dividends earned

Provisions for deferred tax assets

Recognition of deferred tax assets

Tax benefit arising from the reversal of impairment of net operating losses recognized in prior years

PP&E

Tax-deductible interest on own capital

Non-deductible expenses

Other, net

Income Tax


Physical progress



31. Main contracts in progress

At June 30, 2010 and 2009, the main contracts are

the following:

80

280

368

236

54

30

136

15

87

428

127

50

152

133

156

48

7

5

8

37

20

100%

100%

3%

95%

100%

100%

100%

100%

3%

100%

100%

100%

67%

11%

100%

18%

10%

20%

0%

70

224

-

118

50

28

118

16

-

416

110

38

123

-

-

-

4

15

-

-

-

82%

98%

-

67%

89%

99%

75%

97%

-

72%

71%

23%

-

-

-

50%

67%

-

-

-

Country / Work

Argentina

Campana Refinery

Los Caracoles Hydroelectric Station

Punta Negra Hydroelectric Station

Engineering Services, Supplies and Mechanical Assembly at the

Ancillary Building of the Reactor - Atucha II

Veladero Mine

Pirquitas Mine

Pascua Lama

Underground "A" Line - Renewal of Stations

Bolivia

Third Processing Train of the Sábalo Gas Treatment Plant

Peru

LNG Pipeline

Chiquintirca Gas Compression Plant

Loop de la Costa Gas Pipeline

Camisea Maintenance

Chile

Construction of Sea Water Drive Pipeline- Minera Esperanza

Replacement of Mineral Pipeline and Reclaimmed Water System

Arabia

Manifa Water Pipeline

Uruguay

Av. Ferreira Aldunate

Sanitation of Maldonado

Road 18

Maldonado Effluents

Sanitation of Ciudad de la Costa

Total contract amount (USD million)


June 30, 2010 June 30, 2009

Physical progress

(1)

(1)

(2)

(2)

(2)

(3)

102 | TEI&C S.A.



Physical progress

149

202

380

782

200

387

1,058

30

46

91

158

90

73

251

318

96

43

139

57

100%

100%

92%

49%

30%

100%

1%

100%

67%

90%

100%

100%

100%

100%

94%

100%

72%

74%

64%

155

201

332

628

157

295

-

30

-

91

158

90

73

224

293

92

43

139

57

100%

95%

58%

18%

4%

60%

-

95%

-

14%

98%

100%

100%

60%

88%

99%

40%

52%

55%

Country / Work

Brazil

Maintenance and Improvement of Offshore Platforms at Macaé –

Northeast

Maintenance and Improvement of Offshore Platforms at Macaé –

Marlim

Gasoline Unit of President Bernardes de Cubatão Refinery (RPBC)

Diesel Unit of Landulpho Alves-Mataripe Refinery (RLAM)

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

Gasduc III

Unidad de Coque Retardado - Complexo Petroquímico do Río de

Janeiro (COMPERJ)

Mexico

SE 1125 Distribution

SE 1125 Distribution - Phase II

SLT 1119 Transmission and Transformation of the Southeast

Central Expansión Petacalco Thermoelectric Plant

Canada

Waupisoo Pipeline Project

Corridor Pipeline Expansion Project

Canadian Mainline Pipeline Project

Central America & Caribbean

Gasoline Optimization Program Upgrade Project for Petroleum

Company of Trinidad and Tobago

Pipeline Limón – La Garita

Siepac Substations

Siepac I

Siepac II



June 30, 2010 June 30, 2009

Physical progress

(1) The Company's participation is 75%




(2)

(3)

(2)

(2)

(4)

(2)

(2)

(2)

(2)

32. Subsequent events

After June 30, 2010, no events, situations or

circumstances have occurred which might significantly

affect the Company's equity or financial position,

which have not been adequately contemplated or

mentioned in these consolidated financial statements.


Gasoline Unit of President Bernardes de Cubatão Refinery (RPBC), Brazil. The main physical amounts are: 11,400 m3 of concrete,

730 tons of metallic structures, 2,300 tons of equipment, 1,549 tons of piping, 423,000 m of cables and 5,917 instruments.

104 | TEI&C S.A.

ARGENTINADuring the fiscal year ended in June 2010, total

revenue in the country amounted to USD 325 million.

The main projects developed during the fiscal year

include:

EnergyLos Caracoles Hydroelectric Station - Energía

Provincial S.E. The project was handled by the

Techint-Panedile Argentina S.A. Joint Venture

(JV), where the Company has a 75% participating

interest. Its purpose is to generate power and

improve the stream-flow regulation of San Juan

River, the main water resource of the province of the

same name. With a power of 125 MW, Los Caracoles

will provide a mean power capability of 715 GWh,

and this would represent a significant step towards

San Juan’s power self-sufficiency.

The total contract amount was USD 280 million,

at 100% of the JV. The two generation units

became operational in July and December 2009,

respectively. Civil works were completed during this

fiscal year, and the works are now in the warranty

period since the Company has already obtained the

Provisional Acknowledgments of Receipt.

Punta Negra Hydroelectric Station – Energía

Provincial S.E. In November 2009, a contract was

executed between Empresa Provincial S.E. and the

Techint-Panedile JV where the Company has a 75%

participating interest. This project is on the San Juan

River, 20 Km. downstream Los Caracoles project, and

it is intended to increase the regulation of this river,

which is essential for San Juan’s economy, and to add

65 MW to the generation system of the Province. The

contract amount is USD 368 million and the execution

term is 54 months. Works were commenced in

January 2010; at present, the construction of the river

deviation channel and the engineering tasks devoted

to review the executive design are in progress. As of

June 30, 2010, the progress rate of construction is 3%.

TEI&C subsidiaries’ activities for the period 2009-2010Revenue

369

457

325

07-08 08-09 09-10

Annual Report | 105

Engineering Services, Supplies and Mechanical

Assembly at the Ancillary Building of the Reactor

- Nucleoeléctrica Argentina S.A. - Atucha II. This

is a service contract to perform the piping system

assembly in the ancillary building of the reactor

(UKA building). This building is divided into four

main sectors, having different functions: radioactive

waste processing and storage, heavy water

enrichment, ventilation systems, locker rooms and

access to restricted zone.

This project is carried out in two stages. The

first stage corresponds to piping assembly and

comprises 235 tons of supports and 280 tons of

piping. The physical progress rate for the piping

assembly as of June 30, 2010, is 95%. The second

stage, the contract of which was executed after the

end of the fiscal year, comprises piping ends, Civil

Works, Painting, Insulation and Auxiliary Electricity

Services, in the same Building. Both stages works

will reach USD 236 million.

MiningIn this sector, the Company has the experience and

resources required to perform civil works, roads,

runways, assembly of processing plants, installation

of tubing and soil movement.

Sales during the fiscal year reached the sum of

USD 29 million.

During the period under analysis, the Company kept

on developing the following projects:

Veladero Mine - Barrick Gold Corp. In October 2009,

the Company completed the works of extension of

the current facilities, executed in association with

Fluor Argentina Inc., under a JV on a 50%/50%

basis. The total amount was USD 54 million.

Also in October 2009, Techint was awarded the

repair of 3.5 km. of the transportation belt as well

as works on 30” piping corresponding to part of the

106 | TEI&C S.A.

second stage of pumping, which works were

completed in May 2010.

Pirquitas Mine - Mina Pirquitas Inc. Argentine

Branch. During this fiscal year, Mina Pirquitas Inc.

Argentine Branch, subsidiary of Silver Standard

Resources Inc. from Canada, acknowledged

receipt of the project, upon execution of the

Acknowledgement of Completion in January 2010.

The works consisted in the provision of services

of basic and detail engineering, procurement

management, construction direction and start-up of

an opencast silver, tin and zinc mine, with facilities

to process 9,000 tons a day through flotation and

gravimetric concentration. The total contract amount

was USD 30 million.

Pascua Lama - Barrick Gold Corp. Bi-national gold

and silver mining undertaking, located in the border

between Chile and Argentina. The Company is

associated in a JV with Fluor Daniel Argentina Inc.

Argentine Branch (on a 50%/50% basis) to carry

out the works divided into three phases: Phase I -

Consolidation of Basic Engineering and Feasibility

Study of the Project; Phase II - Detail Engineering

and Procurement Management, and Phase III

- Construction Management and Construction.

During this fiscal year, works were continued in

Phase II, starting in April 2007. The total expected

amount for this phase is USD 136 million. In

addition, the preliminary works have been started

for commencement of Phase III, which phase is

expected to begin during the next fiscal year.

Architecture and infrastructure works As regards infrastructure activities, the Company

has the capacity and expertise required to

develop projects related to roads, highways,

bridges, tunnels, railroad and underground

tracks, aqueducts, ports, airports, effluent and

sewage water treatment plants, dams and

telecommunication systems. In addition, the

Company performed architectural works, such


ended in June 2010,

total revenue in the

country amounted to

USD 325 million.

Annual Report | 107

Oil & GasCampana Refinery - ESSO. During the first half

of the fiscal year, the works committed under

Assignment No. 10 of the EPC – RC- 1585 umbrella

contract were completed.

The works developed comprised management

service, development of engineering, procurement

and construction for the re-adaptation of the facilities

for import and export of low-sulfur fuels (50 ppm),

the execution of a new 33kv line, in a covered duct

way (with a total length of 1,150 m), as well as

facilities for interconnection of the Campana Refinery

with the HMU (Hydrogen Manufacturing Unit).

In October 2009, the applicable turnover /

acceptance notices were signed, and during the

subsequent 2-month period the demobilization and

closing of the project took place.

The final accumulated certified amount was

USD 80 million

Iron & Steel Industry and Other Industries The Company has developed highly specialized

resources to provide design, engineering,

construction and main maintenance services

to steel-making plants, lamination workshops,

blast and electric furnaces, production facilities,

metallurgical plants, aluminum-making plants and

precious metals plants.

The amount of sales reached during this fiscal year

was USD 64 million.

Several works were executed in Argentina for

Tenaris Siderca and Ternium Siderar, among which

the following stand out:

Ternium Iron & Steel Projects. Relining of Blast

Furnace 1. The project consists in increasing the

capacity of Blast Furnace 1 from 3000 Tn/day to

3600 Tn/day. The scope of works includes: change

as business offices and buildings, housing unit

complexes, cultural and educational premises,

penitentiary complexes and hospitals.

During this fiscal year, the following projects were

developed:

Renewal of Line A Underground Stations –

Secretaría de Transporte de la Nación. This project

was performed under a JV with Benito Roggio

e Hijos S.A., where the Company holds a 50%

participating interest, and for a total amount of

USD 15 million. During this fiscal year, the works

were completed and delivered. Such works

consisted in the completion of the overall renewal

of several underground stations of the Line A of the

City of Buenos Aires.

Crema 332 - Dirección Nacional de Vialidad

(National Road Department). The contract included

the performance of recovery and maintenance

works in the roads of the province of San Juan and

was awarded to the Joint Venture (JV) formed by the

Company and L. M. Pagliara S.A. (with a 60% and a

40% participating interest, respectively). Works were

completed on May 2, 2010, and maintenance works

are currently in progress to obtain the Provisional

Acknowledgement of Receipt. The total contract

amount was $ 61 million, at 100% of the JV.

Road 14 - Dirección Nacional de Vialidad (National

Road Department). The contract was awarded to the

Joint Venture (JV) formed by the Company, with a

60% participating interest, and ICF S.A. and Hidraco

S.A., with a 20% each. The works consisted in the

construction of a second roadway on National Road

No. 14, in the province of Corrientes, in the so-called

Tranche No. 7, between the junction with National

Road No. 127 and the junction with Provincial

Road No. 126. During this fiscal year, the Dirección

Nacional de Vialidad approved the assignment by

the Company of 100% of its participating interest in

such JV to ICF S.A.

108 | TEI&C S.A.

of internal heat-resisting steel and cover in tap

hole area, increase of refrigeration system capacity

(construction of new pump rooms and cooling

towers), construction of a new casting room,

construction of an INBA granulation system and

alternative granulation basin and new electrical

rooms, among other tasks.

Total man-hours used were approximately 4.5 million

and the general progress rate is 99%.

New extension of Silo High Voltage Line (Línea

Alta de Silos - LAS). The scope of works included:

disassembly of the existing Coke Conveyor Belt and

replacement by the new C1A and C1B conveyor belt;

expansion of Rancho Negro (electrical room); lifting

of Conveyor Belt 5; assembly of two new automated

trippers, directed from a control tower; assembly of

a control tower; new extension of the whole power

source line and lighting of the sector and assembly

of level sensors at silos.

Total man-hours used in LAS were 186,700 and the

progress rate during the fiscal year was 100%.

Total income in this fiscal year reached the sum of

USD 48 million, using 2.5 million man-hours.

Tenaris Iron & Steel Projects. The most remarkable

works performed during this fiscal year include the

change of five beams in Section 7, fume extraction

2nd stage in the steel-making area and extraordinary

repair of Plant 2009 - 10.

Total income of the period reached USD 10.9 million,

using 562,000 man-hours.

Other Investments and ServicesRailway Cargo Transportation

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

under the control and corporate decision of Techint

through Compañía Inversora Ferroviaria S.A.I.F.,

is the concession holder of the railway cargo

transportation. This company provides services

towards the ports of Bahía Blanca, Rosario,

Annual Report | 109

San Lorenzo and San Martín to exporters, stockers

and large-scale producers within a vast area of the

Wet Pampa region.

During this fiscal year, 3.4 million tons of cargo

were transported, which represents a 15% volume

reduction with respect to the preceding period.

Puentes del Litoral S.A. - Rosario - Victoria

The Company is a minority stockholder (with an 8%

participating interest) and together with Impregilo

S.p.A., Iglys S.A., Hochtief Aktiengesellschaft

Vorm. Gebr. Helfmann, Benito Roggio e Hijos

S.A., Sideco Americana S.A. and Iecsa S.A., forms

the road company connecting the city of Rosario

(Santa Fe) and Victoria (Entre Ríos), the temporary

commissioning of which occurred in May 2003.

On May 22, 2007, the reorganization proceedings

concerning such company began before the

National Court of First Instance in Commercial

Matters No. 13, Court Clerk Office No. 26, of the

City of Buenos Aires. On December 30, 2009, the

Court passed a ruling approving the composition

settlement agreed between the company and its

creditors and thus, the reorganization proceedings

are terminated. As of the date of this Annual Report,

the Company has paid the obligations undertaken

in such composition settlement. In addition,

negotiations continue to settle the Concession

Contract with the Unidad de Renegociación de

Contratos de Obras y Servicios Públicos (UNIREN).

BRAZILTechint Engenharia & Construção S.A. (TEBRA) -

Brazil performs activities related to engineering,

construction, assembly, works management, off-

shore projects, power generation, transmission

and distribution, iron & steel units, transportation

systems and infrastructure works in general.

Revenues for this fiscal year have increased by 19%,

from USD 39 million to USD 396 million.

Revenue

243

331

396

07-08 08-09 09-10

110 | TEI&C S.A.

During the current fiscal year, works were

performed in the following projects:

Oil & GasPetroleo Brasileiro S.A. - Gasoline Unit of President

Bernardes de Cubatão Refinery (RPBC). In March

2007, a contract was executed with Petrobras for the

preparation of the consistency review of the basic

project, preparation of the detail project, partial

supply of equipment, supplies of bulk material,

civil construction, electromechanical assembly,

pre- commissioning, commissioning and technical

assistance during the pre-operation and start-up of

the units of Cracked Gasoline Hydrodesulphurization

(HDS), Diethanolamine (DEA) and Coke Gasoline

Hydrotreatment (HDT) at the Refinery Presidente

Bernardes de Cubatão, State of São Paulo.

The total updated contract value amounts to USD

380 million. The works are performed under a Lump

Sum Contract.

The main physical amounts are: 11,400 m3 of

concrete, 730 tons of metallic structures, 2,300 tons

of equipment, 1,549 tons of piping, 423,000 m of

cables and 5,917 instruments.

The general progress rate of the project is 92%.

Petroleo Brasileiro S.A. - Diesel Unit of Landulpho

Alves-Mataripe Refinery (RLAM). On June, 2008,

a contract was signed with Petrobras for the





pre-commissioning, commissioning and technical

assistance during the pre-operation, start-up and

assisted operation of the HDT of Diesel (U-37) and

UGH (U-38) units, the Power Sub-station SE-37

and the Control Room (K-3701) at the Refinery

Landulpho Alves de Mataripe, State of Bahía.

It is a Lump Sum contract for an updated total

amount of USD 782 million, under a horizontal

consortium (50% / 50%) with Andrade Gutierrez.

The total execution term is expected to be 36 months.

The main physical amounts reach: 11,000 m2 of

concrete, 408 tons of metallic structures, 4,751 tons

of equipment, 1,570 tons of piping, 240,000 m of

cables, and 2,732 instruments.

The general progress rate is 49%.

Petroleo Brasileiro S.A. - Lot I Tanks Refinaria

do Nordeste, Abreu e Lima (RNEST). On March,

2009, a contract was entered into with Petrobras

for the preparation of the consistency review of

the basic project, detail engineering, supply of

materials, supply of equipment, civil construction,

electromechanical assembly, preservation,

conditioning, support and tests for the pre-operation

of Lot I Tanks of RNEST Refinery, belonging to

Petrobras, in Ipojuca, State of Pernambuco.

The project includes three raw water tanks

(Ø 65.0 m; 14.7m high; and 670 tons each) and eight

crude oil tanks (Ø 98.5m; 14.7m high; and 2,430 tons

each). The main physical amounts are 9,637 m3 of

concrete, 21,558 tons of assembly and 177,300 m2

of painting.

It is a Lump Sum Contract being executed under

a consortium with Equipamentos y Usiminas

Mecânica, in which Techint has a 60% participating

interest.

The activities started in April 2009 and will

be completed in May 2012. The updated value

of the contract is USD 200 million (at 100% of

the consortium).


Annual Report | 111

Petroleo Brasileiro S.A. – Retarded Coke Unit

–Complexo Petroquímico do Río de Janeiro

(COMPERJ). On April, 2010, a contract was executed

with COMPERJ Petroquimicos Basicos for the





pre- commissioning, commissioning and technical

assistance during the pre-operation and assisted

operation start-up of the Retarded Coke Unit

(U2200), Manipulation and Storage Yard (U6821)

and 2 Electrical Sub-stations.

It is an EPC Lump Sum contract, with guaranteed

physical amounts.

Techint is part of the TE-AG Consortium with Andrade

Gutierrez, with a 50% participating interest each,

under the leadership of Techint. The total value of

the contract is USD 1,058 billion (at 100% of the

Consortium), within a contractual term of 36 months.

The main physical amounts are as follows: 46,204

m3 of concrete, 4,062 tons of metallic structures,

7,433 tons of static and rotating equipment,

2,411 tons of piping, over one million meters of

electricity and instrument cables, 78,529 meters of

electroducts, and 4,938 instruments.

The general progress rate is 1%.

PipelinesTransportadora Associada de Gás - Gasduc III –

Pacote 01. In August, 2008, a contract was executed

with Transportadora Associada de Gás – TAG, of

Petrobras, for the consistency review of basic

engineering, and construction and assembly of

the trunk line, special works, civil, mechanical,

electrical, instrumentation and hydraulic works,

tests, conditioning and support to the pre-operation

of Package I of Gasduc III Gas Pipeline Project.

112 | TEI&C S.A.

Package I of the gas pipeline extends from Macaé

to Cachoeiras de Macacú. Such pipeline will have a

38" diameter and will be 104 km long. Overall, the

pipeline will cover 178 km and will go from Estación

de Cabiúnas to Estación de Campos Elíseos, located

in the municipality of Duque de Caxias, in the State

of Río de Janeiro.

It is an EPC contract, with Unit Prices, and will

be executed under a horizontal consortium with

Constructora Norberto Odebrecht S.A. (50% / 50%).

The works were completed in January 2010. The

updated value of the contract is USD 387 million (at

100% of the consortium).

Off ShorePetroleo Brasileiro S.A. - Maintenance and

Improvement of Offshore Platforms at Macaé. The

updated contract value is USD 351 million, divided

into two contracts: Northeast, USD 149 million and

Marlim, USD 202 million. Both contracts are for unit

prices and are developed in 10 offshore platforms

in the Campos Basin, opposite to the shores of

the State of Rio de Janeiro. The Northeast contract

was completed in March 2009, whereas the Marlim

contract was completed in September 2009.

Iron and Steel Industry and Other IndustriesThyssenKrupp – Companhia Siderúrgica do

Atlântico (CSA). The contract encompasses the

rendering of Technical Support and Management

Services, including technical analysis, preparation

of welding procedures, construction management,

contract management and audit management,

among other activities. The updated contract value

is USD 3.4 million and the works are estimated to be

completed by June 2011.


The Northeast contract

of maintenance and

improvement of Offshore

Platforms at Macaé was

completed in March

2009, whereas the Marlim

contract was completed

in September 2009.

Annual Report | 113

PERUThe fiscal year ended with a minimum sales

decrease in the country as a result of the progress in

the projects under development. For next years, we

foresee good chances of sustainable development

through the identification and progress in execution

- mainly at early stages - of new projects throughout

the country.

The main projects developed during this fiscal year

were as follows:

LNG Pipeline - PERU LNG S.R.L. Construction

of a 408 km 34” gas pipeline and the respective

facilities. The main activities included consistency

review of engineering provided by the client, the

supply of materials (excluding the casing and main

equipment) as well as construction, assembly and

pre-commissioning tasks. The contract amount was

USD 428 million. The project was completed

in January 2010 (Mechanical Completion

Certificate Date).

Camisea Maintenance – Compañía Operadora de

Gas del Amazonas S.A. The Company provides the

maintenance of this gas pipeline. The total contract

amount is USD 152 million by June 2010.

In July 2010, this contract was renewed for a thirty-

month period. The total amount of this renewal is

USD 126 million.

Chiquintirca Gas Compression Plant Transportadora

de Gas del Perú S.A. (TGP). The contract consisted

in the construction of a gas compression plant. To

carry out this project, the Company partnered with

GyM S.A. and formed the Proyecto Chiquintirca

Consortium, with a 60% and 40% participating

interest, respectively. The contract total amount

was USD 127 million, and includes USD 43 million

corresponding to purchases made directly by the

client. The project was completed in May 2010.

Revenue

106

317

259

07-08 08-09 09-10

114 | TEI&C S.A.

Loop de la Costa Gas Pipeline - Transportadora de Gas

del Perú S.A. (TGP). On February, 2009, the Company

received from TGP the notice to proceed with the

construction of a 107 km 24” gas pipeline and the

respective facilities. The total amount of the contract

was USD 50 million and it was completed in January

2010. The project was accomplished by January 2010.

During this fiscal year, the Company was awarded

two new Projects:

Jungle Loops – Early Works (TGP). In March 2010,

the Company received from TGP the notice to

proceed with the early services for the construction

of two pipelines of 32” and 24”, 150 km each,

including detailed engineering and early works

activities (erection of camps, issue of permits, land

rental and others activities).

The total amount of this first scope of the project

is around USD 73 million and it is expected to

be completed in March 2011. As of June 2010, the

project reached an 8% progress rate.

Expansion of LNG transportation system - Addition

of fourth pump (TGP). On June, 2010, the Company

received from TGP a contract and notice to proceed

with the Expansion of the LNG transportation

system, by adding a fourth pump in each pumping

station, two of them in the jungle and the other two

in the mountain section.

The total amount of this project is around

USD 14 million and it is expected to be completed

in April 2011. The project started in July 2010.

Annual Report | 115

MEXICOIn the year ended on June 30, 2010, Techint S.A.

de C.V. (TEMEX) consolidated its ongoing projects

in this country and continues working in the

development of new business.

Throughout its history, TEMEX has participated in

the engineering and construction of major industrial

and infrastructure projects.


were as follows:

EnergyCentral Expansion Petacalco Thermoelectric Plant

– Mitsubishi – Comisión Federal de Electricidad

(CFE). Turnkey contract for design, supply,

construction, testing and commissioning of a new

power generation unit of 750 MW of the Central

Thermoelectric Power Station Presidente Plutarco

Elías Calles, in the city of Petacalco, Guerrero. The

Company’s scope of work is the balance of plant of

the unit. As of June 30, 2010, the project reached a

100% progress rate and the total contract amount

was USD 158 million.

SE 1125 Distribution – CFE. Lump sum financed

public works contract and unit price contract with

CFE for the execution of six works: four distribution

substations and two high voltage lines with a length

of 111 km, whose locations are in the states of San

Luis Potosi, Hidalgo and Queretaro. As of June 30,

2010, the project reached a 100% progress rate and

the contract amount was USD 30 million.

Revenue

53

171

210

07-08 08-09 09-10

116 | TEI&C S.A.

SLT 1119 Transmission and Transformation of the

Southeast – CFE. Lump sum financed public works

contract and unit price contract with CFE for the

execution of engineering, supply and transportation

of installation materials, equipment inspection,

supervision of civil and electro mechanic works, pre-

operative tests, and technical support to allow for

the start up of electric substation and transmission

lines, located in the state of Tabasco. The contract is

being developed under a consortium where TEMEX

participating interest is 43%. As of June 30, 2010,

the overall progress for the project was 90% and the

contract total amount was USD 91 million.

195 SE 1125 Distribution (2nd phase) – CFE. Lump

sum financed public works contract and unit price

contract with CFE for the execution of nine works:

six distribution substations and three high voltage

lines with a length of 168 km, whose locations are

in the states of San Luis Potosi, Aguascalientes and

Zacatecas. As of June 30, 2010, the project reached

a 67% progress rate and the contract amount was

USD 46 million.

Iron and Steel Industry and Other IndustriesConstruction Works at Monterrey Plant – Ternium.

Provision of personnel and materials for the

execution of construction works (including civil and

electro mechanic works) and structure mountings.

During the period, the Company executed different

works in Ternium plants all over Monterrey and

Puebla in Mexico. Worth mentioning are some

works executed in Churubusco Plant, like the

construction and assembly of a cold lamination

facility and the construction of rolls transfer line.

In the North Plant the Company was working in

the construction and assembly of a cooling water

system and smoke collection system. In Juventud

Plant main works were the construction of trailer

entrance and external illumination systems. In

Universidad Plant the most important works were

the completion of a shipping warehouse, the

hydrogen system construction and the demolition

of several buildings. Lastly, in Puebla Plant there

were works related to a steel bars storage system

and installation of a casting machine system.

At present, there are around 500 persons, but there

were peaks of 600 people working for this contract

on a direct basis.

The sales obtained during the fiscal year amounted

to USD 17.5 million.

Construction Works at Veracruz Plant – Tenaris.

Provision of personnel and materials for the

execution of construction works (including civil and

electro mechanic works) and structures erection.

Maintenance and steel & iron services works were

continued with an average headcount of 1,800

persons.

At present, in the Plant Expansion Project contract

and the main contract, there are 3,089 persons

working on a direct basis. It is estimated that in the

first four-month period of 2011, such number will

exceed 1,000 people.

In the 09/10 fiscal year, the consolidated sales were

for USD 64 million.

Heavy Duty Cleaning Service – Tenaris. The annual

billing was approximately USD 5.4 million. In general

terms, the service comprises the transportation and

processing of slag, and the recovery, cutting and

classification of junk. The current contract in force

was awarded in 2009 for a 9-year term.

Petacalco Project – CFE. Carbonser, S. A. de C.V. was

established on 8 August 1994 and its main activity is

to provide services to load and transport coal to the

Power Plant President Plutarco Elias Calles, located

in Petacalco Guerrero. In the year ended on June

30, 2010, the Company unloaded 5.06 million tons

Annual Report | 117

of coal and delivered 5.80 million tons to the CFE

terminal in Lázaro Cárdenas. Total revenue for this

fiscal year amounted to USD 33 million.

CHILEFounded in 1951, Techint Chile S.A. engages in

activities related to engineering, construction

and assembly of pipelines; mining projects;

power generation, transmission and distribution;

transportation systems and infrastructure works in

general. Tenco holds a 76.88% participating interest

in Techint Chile S.A.’s capital stock.

During this fiscal year, the Company resumed its

level of activity, which had suffered a decrease

during the previous fiscal year. Works were

performed mainly in the following projects:

Minera Esperanza – Construction of Sea Water Drive

System. During July 2009, the Company received

the notice to proceed regarding the contract

for “Construction of Sea Water Drive System

and Transportation and Concentrate System”

[“Construcción del Sistema de Impulsión de Agua

de Mar y Sistema de Transporte y Concentrado”],

for Minera Esperanza. The work consists in an

engineering, procurement and construction (EPC)

contract and the scope of works contemplates

the construction of the concentrate transportation

system, consisting in the line to transport

concentrate from the Mina Esperanza plant to

the port of Michilla, with the applicable energy

dissipation station. In addition, works contemplate

the construction of the sea water transportation

and drive system, which shall transport water from

fore bay at the port of Michilla to a pool near the

Esperanza plant. The amount of the contract is USD

133 million and the execution term is 14 months.

Anglo American Sur S.A. – Replacement of Mineral

Pipeline and Reclaimed Water System. In December

2009, the Company received, from Anglo American

Sur S.A., the notice to proceed and then, the contract

Revenue

110

7

146

07-08 08-09 09-10

118 | TEI&C S.A.

for “Construction of Replacement Pipes Phase 1-A,

New 28” Mineral Pipeline and Reclaimed Water

System (Phase II)” [“Construcción de Tuberías

Reemplazo Fase 1-A, Nuevo Mineroducto 28” y

Sistema de Agua Recuperada (Fase II)] for their Los

Bronces Development Project. The work consists in

replacement of pipes corresponding to Phase I of the

existing mineral pipeline and the implementation of a

new 28” mineral pipeline, from San Francisco upper

sector to Las Tórtolas sector, on the existing track. In

addition, the work contemplates an expansion of the

capacity of the recirculated water drive system from

Las Tórtolas to the grinding facility, by means of a

new drive system contemplating the reutilization of

pipe sections of Phase I to be replaced. The term for

completion of all aspects of the contract is July 30,

2011 and the total amount of the contract is

USD 156 million.

Anglo American Sur S.A. Construction of Stations

and Singular Points for the reclaimed water system.

In April 2010, the Company received the notice to

proceed regarding the works related to the stations

corresponding to the reclaimed water system for

Los Bronces Development Project, which shall

constitute addenda to the contract for the Mineral

Pipeline and Reclaimed Water System already

executed with Anglo American.

Minera Escondida Limitada Service of Mechanical

Maintenance. During November 2009, the new

contract “Service of Mechanical Maintenance per

Families and Equipment of Processes” [“Servicio

de Mantenimiento Mecánico por Familias y Equipos

de Procesos”] was executed with Minera Escondida

(MEL). This contract contemplates the service

of mechanical maintenance of Los Colorados,

Laguna Seca and Área Seca de Hidrometalurgia

concentration plants. The term of the contract is

until October 31, 2012.

Annual Report | 119

Sociedad Contractual Minera el Morro (Detail

Engineering Service). During June 2009, the

Company was awarded “El Morro” project by

Sociedad Contractual Minera El Morro (Xstrata

Copper). The scope of the contract contemplated

detail engineering of Phase I of the desalinated

sea water transportation system located in the 3rd

Region of Chile. In December 2009, services were

completed and the Company received the final

acknowledgment of receipt.

Compañia Minera Casale – Engineering Services

for water and concentrate transportation system.

In May 2010, the Company received the notice to

proceed with works of basic and detail engineering

of the water and concentrate transportation system

of the Cerro Casale Project owned by Barrick Gold

and Kinross. Works will be executed in collaboration

with Brass. The execution term is 15 months.

In addition, two flats (2600 m2) were bought in the

region of Las Condes (Santiago) to move Techint

Chile’s offices. The delivery and subsequent move of

Techint Chile’s office will take place in the first half

of 2011.

CANADADuring the fiscal year 2009 – 2010, Techint E&C Inc

(TECAN) completed the execution of most of the

works under the ongoing contracts. The efforts

were focused on developing activities in the Oil

Sands and other oil & gas producing areas in

Western Canada; TECAN, either as a stand-alone

company or in partnership with other firms, has

bidded C and EPC projects for the execution of

pipelines and facilities in these areas belonging to

clients such as Enbridge, CNRL, Suncor and Husky.

As of June 2010, Techint E&C Inc. is waiting for the

results of some of such bids.

Revenue

107

58

07-08 08-09 09-10

120 | TEI&C S.A.


were as follows:

PipelinesCorridor Pipeline Expansion Project (CPX) and

Products Pipeline NPS 20 - Interpipeline Funds. The

contract was signed in March, 2008. To undertake this

project, TECAN associated with Robert B. Somerville,

through a JV on a 50%/50% basis. The works under

this contract included a 32 km 42" pipeline and a

second one of 42 km 20" pipeline. The contract total

amount is USD 73 million. The mechanical completion

took place in November 2008. Final completion notice

was received on January 29th, 2010.

Canadian Mainline Pipeline Project (Alberta Clipper

Project) - Enbridge Pipelines Inc. The contract was

awarded in July 2007 to the JV formed by TECAN

and Robert B. Somerville, where the Company has

a 50% participating interest. The project includes

Spreads 3, 4 and 5, with a total length of 345 km

and 36" diameter. The contract, originally structured

as a Cost plus Fee, was replaced for the Spread 5

by a Lump Sum plus Unit Prices contract. The total

contract amount is USD 250.6 million. The Spread 5

was substantially completed in October 2009, and

Spreads 3 and 4 received Final Acknowledgement

as of September 2009. As of June 30, 2010, the Joint

Venture is working in the correction of deficiencies

and warranty attention in the three spreads, and

works are expected to be completed by fall 2010. The

contracts have been paid in full by Enbridge with

the exception of the 10% Holdback and the Warranty

Fund, a sum provided for the warranty period.

Business Development/ EngineeringCO2 Slurry Pipeline Joint Industry Project

-Pathfinders- As part of the Pathfinders Group,

Techint jointly participates with Enbridge, Syncrude,

Snamprogetti, Electric Power Research Institute, SNC

Lavalin, Cimarron Engineering and Stantec in the

design of a CO2 slurry pipeline to transport sulfur,

coke, limestone and other solid products from the


2009 – 2010, Techint E&C

Inc. (TECAN) completed

the execution of most

of the works under the

ongoing contracts.

Annual Report | 121

Fort McMurray area to the Southern markets in a

pipeline with dense phase CO2 as the carrier.

CENTRAL AMERICA AND THE CARIBBEAN

Sales in this region reached USD 96 million, and

include several works that are being executed by

the Company’s subsidiaries.

Oil & GasGasoline Optimization Program Upgrade Project

for Petroleum Company of Trinidad and Tobago

(PETROTRIN). This project is being developed in

Trinidad and Tobago by a joint venture with ABB

Lummus Global Overseas Corporation (currently,

CB&I), in which the Company holds a 50%

participating interest. It comprises the following

works: basic and detail engineering, procurement

management, construction and pre-commissioning

management, commissioning assistance, start-up

assistance and performance tests for the Gasoline

Optimization Program. The amount of the contract

for the JV is USD 74.9 million, plus a fixed fee of

USD 10.5 million for procurement management in

addition to refundable costs of around USD 232.6

million. As of June 30, 2010, the physical progress

rate was 94%.

PipelinesPipeline Limón – La Garita Refinadora Costarricense

de Petroleo S.A. Turnkey contract involving the

design, engineering, outfitting, construction and

startup of a 12-inch, 123 kilometer pipeline, plus

three pumping stations in Costa Rica. As of June 30,

2010, the overall progress for the project was 100%

and the contract amount was USD 95.6 million.

EnergySIEPAC 1 – Empresa Propietaria de la Red S.A.

Lump sum turnkey contract for the design of final

engineering, the supply of materials and equipment,

civil works, electromechanical works, final testing and

startup of SIEPAC line 1. The purpose of the Electrical

Revenue

144

49

96

07-08 08-09 09-10

122 | TEI&C S.A.

Interconnection System for the countries of Central

America (SIEPAC) is to establish an electrical market

in the region that will traverse Guatemala, El Salvador

and Honduras (SIEPAC I) as well as Nicaragua,

Panama and Costa Rica (SIEPAC II). As of June 30,

2010, the project reached a 74% progress rate and the

total contract amount was USD 139 million.

SIEPAC II – Consorcio Abengoa- Inabensa (APCA).

Lump sum turnkey subcontract for the design

of final engineering, the supply of materials and

equipment, civil works, electromechanical works,

final testing and startup of SIEPAC II. As of June 30,

2010, the overall progress for the project was 64%

and the contract amount was USD 57 million.

SIEPAC Substations – Empresa Propietaria de la

Red S.A. Contract for design, supply, construction,

testing and startup of the SIEPAC I and II Projects,

which connect the 15 substations pertaining to this

project. As of June 30, 2010, the project reached a

72% progress rate and the contract amount was

USD 43 million.

BOLIVIATechint Ingeniería y Construcción Bolivia S.A.

was founded on July 21, 2009, is to take part in

construction projects for buildings, roads, dams,

dwelling houses and transformation industrial

plants for any kind of industries and activities.

Oil & GasThird Processing Train of the Sábalo Gas Treatment

Plant – Petrobras Bolivia S.A. On December 28, 2009,

the Company and Petrobras Bolivia S.A. executed a

contract for construction, assembly, interconnection,

pre-commissioning, commissioning, start-up and

performance test of the Third Processing Train of

Sábalo Gas Treatment Plant, located at Tarija.

Such contract contemplates the expansion of the plant

by means of the construction of a processing plant

of gas from well-head, sweetening with amines and

Annual Report | 123

adjustment of dew point; as well as the construction of

Condensate Storage Tanks and other facilities required

for the operation of the Plant. The execution term is 18

months and the contract amount is USD 87 million.

URUGUAYOur historical presence in Uruguay was again

ratified during this fiscal year. Sales reached the

amount of USD 16 million, exceeding the sales of

the previous period.

The development of projects within the road and

water markets continued, including the following:

Maldonado Effluents. During this period, the

Company started the works related to the call for

bids “Treatment and final disposal of Maldonado

and Punta del Este system effluents” [“Tratamiento

y disposición final de efluentes del sistema

Maldonado y Punta de Este”]. The contract, entered

into between the consortium TECHINT, Montec,

Belfi and Obras Sanitarias del Estado (OSE), for

an amount of USD 37 million, comprises the

construction of 35 kilometers of tubing, 1 land

outfall of 4 kilometers and civil and architecture

works in 7 pumping stations, to be executed by

Techint, and 1 off-shore outfall, 1 km long, to be

executed by Montec, Belfi. The execution term is

36 months, and so far the project reached a 20%

progress rate.

Sanitation of Ciudad de la Costa. A contract was

entered into with OSE for USD 20 million for the

construction of 34 Km of sanitation networks, 56 Km.

of gutters and 32 Km. of road works at Ciudad de la

Costa, Department of Canelones. Some works related

to construction site facilities and setting out have

already been performed, and the commencement of

works is planned for the next fiscal year.

Road 18. In January 2010, works were commenced

under the contract executed with Ministerio de

Transporte y Obras Públicas through Corporación

Revenue

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07-08 08-09 09-10

124 | TEI&C S.A.

Vial de Uruguay, CVU, for an amount of

USD 8 million. Works consist in the structural

reinforcement of 22 km of road in the Department

of Treinta y Tres, remarking the elaboration of around

60,000 tons of asphalt mixtures for which around

70,000 tons of rock must be ground, plus foundation

works, verge reconstruction and signaling.

Av. Ferreira Aldunate. In May 2010, the works

under this contract were completed. This contract

was executed with Municipalidad de Maldonado

for USD 7 million. Works consisted in the

construction of a double paved way and

surrounding streets on the current Av. Ferreira

Aldunate (to the North of downtown Maldonado)

which included, in addition to road works, hydraulic

infrastructure and lighting works.

Sanitation of Maldonado - Punta del Este. Works

were resumed for OSE, UGD Maldonado, upon

agreement on a third contractual phase for

USD 5.0 million. Works executed include: sanitation

of Punta del Este and Maldonado, removal and

replacement of pavement and network maintenance

in both cities, in addition to infrastructure works at

Planta del Chileno. For this contractual phase, the

works have reached an 18% progress rate.

Bridge over José Ignacio Stream. A bridge is being

built over José Ignacio Stream, Department of

Maldonado, under a contract with Corporación Vial

del Uruguay for an amount of USD 2 million. Works,

including placement of 200 m3 of reinforced concrete

and construction of 24 prefabricated beams, started in

August 2009 and have reached a 70% progress rate.

SAUDI ARABIAPipelinesTanajib - Manifa Water Pipeline – JGC Corporation.

During this period, we started the works under the

contract with JGC at Tanajib – Manifa, awarded

last year. This project consists in an 18” pipeline,

about 60 km long, which will connect the Tanajib

Annual Report | 125

water treatment plant and the Central Processing

Facilities. It also includes a surface facility with a

manual cut-off valve halfway along the course. The

contract total amount is USD 48 million with a two-

year term for execution.

ENGINEERINGDuring this fiscal year, the level of activity

developed, measured in man-hours, was around

1.8 million. The main engineering works performed

are related to projects under development and

others already completed, among which the

following are highlighted:

Punta Negra Hydroelectric Station (San Juan).

Conceptual, detail and basic engineering; including

detail engineering of works for the deviation of San

Juan River.

Pascua Lama Project - Barrick Gold (Argentina-Chile).

Basic engineering and project feasibility study, work

schedule and control budget. Detail engineering and

procurement, including management of purchase

orders placed by the client.

Pirquitas Mine Project (Jujuy). Basic engineering and

project feasibility study, work schedule and investment

estimate. Detail engineering and procurement,

including management of purchase orders.

Esso Clean Fuels Project (Campana). Assistance to

complete basic and detail engineering works, as

well as procurement.

YPF – Sulfur Reduction Phase 1 (Argentina).

Detail engineering and preparation of the bidding

conditions for an EPC contract.

Petrotrin Alky Acid Project (Trinidad & Tobago).

Completion of basic engineering, detail engineering

and procurement management.

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Atucha II Nuclear Plant (Argentina). Construction

engineering works of piping installations.

Perú LNG (Perú). Construction engineering and

assistance for works.

TGN-TGS Loops (Argentina). Detail engineering

for the expansion of the gas transportation pipeline

network

Camisea Expansion (Peru). Gas separation and

fractioning plants of Camisea. Conceptual, basic and

detail engineering. Procurement management of

equipment and material.

TGP - Chiquintirca Gas Compression Plant (Peru).

Conceptual, basic and detail engineering and

assistance for works. Procurement management of

equipment and materials.

TGP - NG Loop de la Costa Expansion (Peru).

Detail engineering. Procurement management of

equipment and material. Technical bidding terms for

EPC contract.

TGP - NGL Fourth Pump Expansion (Peru). Detail

engineering. Technical bidding terms for EPC contract.

TGP - Camisea Loops de la Selva (Peru). Conceptual

and basic engineering.

PLUSPETROL – Camisea 2nd Expansion (Peru).

Conceptual and extended basic engineering,

plus the preparation of bidding conditions for the

extension of Malvinas and Pisco plants.

El Morro Water Pipeline (Chile). Completion of basic

engineering and detail engineering.

MINERA ESPERANZA – Esperanza Pipelines (Chile).

Completion of detail engineering.

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cutting lines of 2.8 tons for L2C2 consisting of 1 roller,

one loading device and one walking beam each one.

TENARIS - LC2F-PEMA, INDUCTION FURNACE

REVAMPING (Campana -Argentina). The project

addressed the replacement of 2 induction furnaces,

and the design of a new reel carrier.

TENARIS - BAR LOADING TABLE FOR HOT MILL #2

(Canada). Installation of a new bar loading line.

TENARIS - FAT3 (Veracruz - Mexico). Installation

of all cold-cycle equipment for the new plant of

TENARIS TAMSA.

TENARIS - FAT3 - CASING THERMAL TREATMENT

(Veracruz - Mexico). Installation of seamless tubing

thermal treatment up to 7”.

PROCUREMENT The main works performed regarding supplies are

associated to the projects under development stated

in the preceding section, Engineering.

Procurement contributes to improve the Company’s

competitiveness by means of a comprehensive

revision of the respective purchasing strategies and

of processes and procedures, seeking to optimize

costs, reliability and transparency in management.

In this respect, the Company put the emphasis on

the specialization of procurement headcount and

the increased use of IT tools, with a focus on the

following aspects of procurement management:

(i) Increasing the contribution of value by focusing

the purchasing strategy on the critical success

factors, management total cost, productivity and

strategic factors.

(ii) Encouraging the specialization of the sector and,

consequently, organizing the structure based on

demand.

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ANGLOAMERICAN / BECHTEL - Los Bronces.

Pipelines and Stations (Chile): Two contracts,

including detail engineering completion.

Cerro Casale (Chile). Detail engineering for a slurry

line for Barrick mining company.

PETROBRAS - RNEST (Brazil). Detail engineering for

a storage tanks’ yard.

PETROBRAS – COMPERJ (Brazil). Detail engineering

for a new coking unit at the Petrochemical Complex

of Río de Janeiro.

EPR – Siepac Bahías & Líneas (Mexico). Detail

engineering for transmission lines and electrical

sub-stations.

CFE – SE 1125 Distribution Second Phase (Mexico).

Detail engineering for transmission lines and

electrical sub-stations.

CFE – SLT 1119 Southeast Transmission and

Transformation 1st Phase (Mexico). Detail

engineering for five power transmission lines and

two transformation sub-stations.

TENARIS - STEEL-MAKING AREA – FUME

EXTRACTION (Campana - Argentina). Installation of

new refrigerated pipelines for primary extraction of

dust in furnace 5 and non-refrigerated pipelines for

secondary extraction of furnace 4 – Steel-making area.

TENARIS - LC2F (Continuous cold-strip mill) - AJUS

1 / 2 / 3 – Non-Destructive Control Equipment (CND)

ENTRANCE (Campana - Argentina). Insertion in 3

existing ways of tilting rotators to perform a 90°

turn of master tubes, before they enter the CND for

subsequent calibration of the latter.

TENARIS - LACO 2 HOT LAMINATION - BAR CUTTING

2 (Campana - Argentina). Installation of new bar

Annual Report | 127

(iii) Boosting the use of IT supporting systems for

bids and suppliers’ management.

During the next fiscal year, the Company will keep

on working on the abovementioned actions which

will impact on the management indicators defined.

TECHINT EQUIPMENT DIVISION (TEPAM)During this fiscal year, TEPAM, in addition to the

administration, maintenance, repair, assistance

and allocation of equipment to the different

projects for use, continued to provide assistance

to Warehouse and General Services –areas that

centralize the Company’s logistics, with the

objective of supporting the beginning of works

upon commissioning, and subsequently, monitoring

their needs throughout the development of projects.

The program for the total renewal of TEPAM

equipment in 10 years continues, with the purpose

of setting the aging of such machinery in 5 years;

this will help reduce costs for repairs and obtain a

competitive improvement.

In the area of building infrastructure, we acquired

a location in La Negra- Antofagasta (Chile) and we

entered into a rental agreement in Chincha Alta

(Peru) in order to comply with the requests of our

internal clients.

The investment value in machinery, vehicles and

tools for the 2009-2010 fiscal year was

USD 21.8 million.

TEI&C S.A.

Anuario 2010 - Techint Contrucciones

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