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2 AUDITING REPORT

4 ANNUAL ACCOUNTS

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cuentas anuales

TOTAL ASSETS 1,017,856 958,169

GRUPO COOPERATIVO ULMA

COMBINED BALANCE SHEETS AT 31 DECEMBER 2010 AND 2009

(Expressed in thousands of euros)

(Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails)

ASSETS

Property, plant and equipment 7 465,244 485,790

Goodwill 8 27,352 20,535

Other intangible assets 8 10,312 5,359

Investment property 10 2,462 2,421

Non-current financial assets 14 35,724 29,623

Derivative financial instruments 15 3 95

Deferred tax assets 17 24,894 22,847

TOTAL NON-CURRENT ASSETS 565,991 566,670

Unpaid calls on share capital 20 292 363

Inventories 18 130,372 120,720

Derivative financial instruments 15 300 433

Trade and other receivables 16 241,546 238,123

Other current financial assets 14 36,481 5,861

Cash and cash equivalents 19 42,874 25,999

TOTAL CURRENT ASSETS 451,865 391,499

Note 2010 2009

The accompanying notes form an integral part of the combined fi nancial statements for 2010.

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cuentas anuales

TOTAL EQUITY AND LIABILITIES 1,017,856 958,169


COMBINED BALANCE SHEETS AT 31 DECEMBER 2010 AND 2009

(Expressed in thousands of euros)


EQUITY

LIABILITITES

Members’ contributions 20 152,929 158,262

Subordinated financial contributions 20 18,625 9,500

Reserves 20 182,600 202,405

Other comprehensive income 20 4,869 (2,651)

Retained earnings 20 (557) (8,639)

Equity attributable to equity holders of the parent 20 358,466 358,877

Non-controlling interests 20 22,609 16,590

TOTAL EQUITY 381,075 375,467

Financial liabilities – members 23 11,396 6,010

Bonds, loans and other interest-bearing liabilities 21 234,518 258,293

Derivative financial instruments 15 1,158 2,255

Government grants 28 8,704 7,936

Provisions 26 5,903 6,811

Deferred tax liabilities 17 6,818 5,068

TOTAL NON-CURRENT LIABILITIES 268,497 286,373

Financial liabilities – members 23 9,115 22,311

Loans and other interest-bearing liabilities 21 182,631 131,878

Associates 381 249

Trade and other payables 24 165,551 132,517

Derivative financial instruments 15 1,001 385

Current tax liabilities 1,366 3,221

Provisions 26 8,239 5,768

TOTAL CURRENT LIABILITIES 368,284 296,32

TOTAL LIABILITIES 636,781 582,702

Note

Note

2010

2010

2009

2009


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COMBINED INCOME STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2010 AND 2009

(Expressed in thousands of Euros) (Translation from the original in Spanish. In the event of discrepancy, the Spanish-

language version prevails)

Revenue 5 613,252 577,435

Other income 29 17,401 18,833

Changes in inventories of finished goods and work in progress 11,181 (15,816)

Work carried out by the Group for non-current assets 40,150 65,377

Raw materials and consumables used 30 (268,544) (253,520)

Personnel expenses 32 (163,387) (155,564)

Amortisation and depreciation 7, 8 & 10 (99,290) (98,686)

Other expenses 31 (141,390) (134,693)

RESULTS FROM OPERATING ACTIVITIES 9,373 3,366

Finance income 33 16,369 18,824

Finance expenses 33 (18,961) (28,163)

NET FINANCE EXPENSE (2,592) (9,339)

Profit/(loss) before tax from continuing operations 6,781 (5,973)

Income tax expense 17 (7,039) (2,905)

LOSS FOR THE YEAR (258) (8,878)

Attributable to:

Equity holders of the parent (557) (8,639)

Non-controlling interests 299 (239)

Note 2010 2009


PROFIT/(LOSS) FOR THE YEAR (258) (8.878)

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LOSS FOR THE YEAR (258) (8,878)

Other comprehensive income

Translation differences of financial statements

of foreign operations 7,031 4,160

Available-for-sale financial assets 14 141 485

Cash flow hedges 15 (c) (487) (1,354)

Cash flow hedges transferred to

the income statement 15 (c) 1,415 370

Tax effect 17 (107) 50

OTHER COMPREHENSIVE INCOME, NET OF TAXES 7,993 3,711

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 7,735 (5,167)

Total comprehensive income attributable to:

Equity holders of the parent 7,028 (4,969)

Non-controlling interests 707 (198)

7,735 (5,167)


COMBINED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED 31 DECEMBER

2010 AND 2009



Note 2010 2009


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Balance at 1 January 2010 158,262 9,500 202,405 (3,273) (1,828) 2,450 (2,651) (8,639) 358,877 16,590 375,467

Total comprehensive income for the year - - - 6,623 819 143 7,585 (557) 7,028 707 7,735

Application of 2009 loss 139 - (10,973) - - - - 8,639 (2,195) - (2,195)

Contributions 1,615 18,141 279 - - - - - 20,035 - 20,035

Disposals (10,629) (9,596) (1,237) - - - - - (21,462) - (21,462)

Dividends 4,380 - (6,563) - - - - - (2,183) - (2,183)

Business combinations (note 6) - - - - - - - - - 2,653 2,653

Transfer of capitalised funds (580) 580 - - - - - - - - -

Transfer from inactive members to capitalised funds (258) - - - - - - - (258) - (258)

Changes in equity holdings - - (183) - - - - - (183) 500 317

Incorporations into the group and other movements - - (1,128) (65) - - (65) - (1,193) 2,159 966

Balance at 31 December 2010 152,929 18,625 182,600 3,285 (1,009) 2,593 4,869 (557) 358,466 22,609 381,075


COMBINED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2010



EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

Other comprehansive income

Members’contributions

Subordinatedfinancial

contributions

Other reserves

Translationdifferences

Cash flowhedges

Available-for-salefinancial

assets

Total TotalNon-

controllinginterests

Totalequity

Retainedearnings


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Balance at 1 January 2009 162,583 11,636 210,558 (7,395) (940) 2,014 (6,321) 553 379,009 16,402 395,411

Total comprehensive income for the year - - - 4,122 (888) 436 3,670 (8,639) (4,969) (198) (5,167)

Distribution of 2008 profit 1,788 - (1,603) - - - - (553) (368) - (368)

Contributions 1,877 - 118 - - - - - 1,995 - 1,995

Disposals (9,244) - (694) - - - - - (9,938) (113) (10,051)

Dividends 4,184 - (5,728) - - - - - (1,544) - (1,544)

Capitalisation of 2008 interest - - (482) - - - - - (482) - (482)

Business combinations - - - - - - - - - 259 259

Other movements/(transfers) (2,926) (2,136) 236 - - - - - (4,826) 240 (4,586)

Balance at 31 December 2009 158,262 9,500 202,405 (3,273) (1,828) 2,450 (2,651) (8,639) 358,877 16,590 375,467


COMBINED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2009



EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT

Other comprehansive income

Members’contributions

Subordinatedfinancial

contributions

Other reserves

Translationdifferences

Cash flowhedges

Available-for-salefinancial

assets

Total TotalNon-

controllinginterests

Totalequity

Retainedearnings


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COMBINED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2010 AND 2009



CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Loss for the year (258) (8,878)Adjustments for Amortisation and depreciation 7, 8 & 10 99,290 98,686Impairment losses on non-current assets 7 (66) 173Impairment losses on current financial assets 16 11,552 12,440Impairment losses on inventories 18 6,635 1,182Changes in provisions 4,642 1,389Foreign exchange gains/(losses) - (51)Government grants taken to income 28 (1,070) (1,100)Loss on derivative financial instruments at fair value through profit or loss 670 2,862Finance income (15,739) (18,541)Finance expenses 18,448 28,257Other income and expenses 617 (3,962)Gain/(loss) from the sale of property, plant and equipment 31 912 1,121Tax paid 17 7,039 2,905

CHANGES IN WORKING CAPITALTrade and other receivables (14,003) 12,798Inventories (9,588) 27,279Other current assets (7,751) 16,606Trade and other payables 11,658 (41,191)Other current liabilities 5,100 (6,555)Application of provisions (2,366) -Other non-current assets and liabilities (2,225) (5,599)

CASH FLOWS FROM OPERATING ACTIVITIES 113,497 119,821Interest paid (17,243) (27,428)Interest received 15,739 18,583Other amounts paid/received (5,818) (57)

NET CASH FLOWS FROM OPERATING ACTIVITIES 106,175 110,919

CASH FLOWS FROM (USED IN) INVESTING ACTIVITIESProceeds from sale of property, plant and equipment 7 27,177 51,150Proceeds from sale of investment property 10 213 -Proceeds from sale of intangible assets 8 116 2,852Proceeds from sale of financial assets 11,411 16,602Acquisition of subsidiaries, net of cash and cash equivalents 6 (7,937) -Acquisition of property, plant and equipment 7 (87,965) (135,131)Acquisition of investment property 10 (377) (251)Acquisition of intangible assets 8 (2,257) (5,630)Acquisition of other financial assets (42,098) (6,892)

NET CASH FLOWS USED IN INVESTING ACTIVITIES (101,717) (77,300)

Note 2010 2009

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COMBINED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED 31 DECEMBER 2010 AND 2009



CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES Proceeds from the issue of equity instruments 23,302 1,761Payments for disposal of equity instruments (20,522) (9,268)Proceeds from loans and borrowings 67,854 59,193Payment of loans and borrowings (50,983) (77,030)Proceeds from other financial liabilities 25,614 11,386Payment of other financial liabilities (25,952) (5,497)Interest on equity instruments (6,896) (7,127)

NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES 12,417 (26,582)Net increase/(decrease) in cash and cash equivalents 16,875 7,037Cash and cash equivalents at 1 January 25,999 18,962

Note 2010 2009

CASH AND CASH EQUIVALENTS AT 31 DECEMBER 42.874 25.999


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GRUPO COOPERATIVO ULMA COMBINED FINANCIAL STATEMENTS 31 DECEMBER 2010PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION (With Auditors’ Report Thereon (Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails)

1. NATURE, ACTIVITIES AND COMPOSITION OF THE GROUP

Grupo Cooperativo ULMA (the ULMA Group or the Group), which is governed in accordance with the internal regulations of the Group approved in July 1998 and subsequent updates, sets out the mutually binding terms and conditions among its member cooperatives through the planning of commercial and fi nancial relations and exchange of personnel, placing specifi c emphasis on the following:

Developing corporate policies that strengthen the current multi-location presence of the Group, consolidating its presence in Oñati (Gipuzkoa) and the surrounding area, and adapting the projection and dimension of activities to requirements of size or of the European Economic Area.

Maintaining existing jobs and creating new ones, preferably through cooperatives, as an intrinsic demand of successful business.

Managing a future global project, generating the maximum number of economies of scale, strengthening supply and other corporate functions, and assessing emerging alternatives and expectations with a view to progressively ensuring a more cohesive cooperative group.

Jointly participating in a close cooperative and corporate environment in such a way as to achieve clear opportunities for consolidation and development through agreed joint actions.

Formally participating in suprastructure entities that arise as part of the Mondragón cooperative experience, in particular Caja Laboral and Lagun Aro EPSV, and in any technological education organisations or those of another nature.

The Group is governed by a General Assembly and a Governing Body. The General Assembly is comprised of members of the general assemblies of associate cooperatives, as well certain founding members. The Governing Body, which is the representative, governing and management body of the Group, is made up of members of the boards of governors of the associate cooperatives that form part of the ULMA Group.

A second-degree cooperative, Grupo ULMA, S. Coop., was incorporated in 1995, the objective of which is to promote the harmonious and balanced development of a group of companies (hereinafter parent companies or member companies), currently comprising the following:

COMPANY LOCATION AUDITOR

ULMA C y E, S. Coop. Oñati (Spain) KPMG ULMA Packaging Business ULMA Construction Business ULMA Forja, S. Coop. Oñati (Spain) LKS AuditoresULMA Hormigón Polímero, S. Coop. Oñati (Spain) LKS AuditoresULMA Manutención, S. Coop. Oñati (Spain) LKS Auditores Negocio Handling Systems Negocio Carretillas Elevadoras ULMA Fundazioa Oñati (Spain) UnauditedULMA Agrícola, S. Coop. Oñati (Spain) LKS AuditoresULMA Servicios de Logística, S. Coop. Otxandio (Spain) LKS AuditoresULMA Conveyor Components, S. Coop. Otxandio (Spain) LKS Auditores

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The main activities carried out by the ULMA Group cooperatives are the following:

Design and production, using own machine technology, of packing and packaging equipment, systems and services that provide added value, protection and quality presentation for its customers’ products. The principal feature of this machinery is the use of plastic fi lm or complex materials during the packaging process (Packaging Business).

Design, production and sale of auxiliary components for the construction industry in general, including the lease, sale and assembly of scaffolding, bracing and shuttering systems (Construction Business).

Integral installations for sheltered agricultural operations (Agricultural Business).

The manufacture and sale of fl anges, piping accessories and forged components in general (ULMA Forja, S. Coop.).

Manufacture, sale and technical assistance of fork-lift trucks and maintenance systems and components (ULMA Manutención, S. Coop.).

Design, production and sale of prefabricated construction components for concrete, polymers and metals, as well as the rendering of on-site assembly services (ULMA Hormigón Polímero, S. Coop.).

Design, manufacture, sale and installations of rollers, supports and drums for transformers (ULMA Conveyor Components, S. Coop.).

Design, manufacture, sale, installation and maintenance of components and systems for classifying articles and parcels, as well as order preparation systems (ULMA Servicios de Logística, S. Coop.).

In carrying out their activity, the parent companies mainly invest in the share capital of other subsidiaries and associates.

In accordance with the ULMA Group’s organisational project, the surplus or loss for the year for each cooperative is determined by deducting or incorporating the amounts deriving from the redistribution of profi t, as appropriate, based on the agreements reached at the General Assembly.

In 2004 Grupo ULMA, S. Coop. established a foundation called ULMA Fundazioa. This foundation administers the Corporate Promotion Fund and the Remunerated Solidarity Fund, which receive annual contributions equivalent to 0.08% of sales in the case of the Corporate Promotion Fund and 3% of gross profi t in the case of the Remunerated Solidarity Fund.

Grupo ULMA. S. Coop. is associated with Mondragón, a cooperative regulated by Basque Parliament Law 4 of 24 June 1993 and subsequent amendments. In 1991, as a result of the III Cooperative Congress of the group of cooperatives associated with Caja Laboral, Mondragón Corporación Cooperativa (hereinafter Mondragón) was formed, which is a private umbrella organisation for voluntarily associated cooperatives. The objective of this organisational model is business effi ciency based on the following principles:

The unity of strategic management. The organisation of cooperatives by sector.

Grupo ULMA, S. Coop. is also associated with Mondragón Corporación Cooperativa Inversiones (SPE), S. Coop. and the Intercooperative Promotion and Education Fund (FEPI) as a base cooperative and within a group that includes the other companies that form part of the ULMA Group.

Each year the companies associated with the ULMA Group must transfer an equivalent of 2% of gross profi t to the Corporate Solidarity Fund administered by the Mondragón Foundation and 3% of gross profi t to the Central Intercooperation Fund, the objective of which is to offset potential losses incurred by cooperatives belonging to the Industrial Group, and to transfer an equivalent of 20% from the Contribution for Cooperative Education and

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Promotion to the Intercooperative Education and Promotion Fund. Furthermore, the companies transfer an amount equivalent to 5% of profi t before income tax to Mondragón Corporación Cooperativa Inversiones (SPE), S. Coop. and the Foundation as a contribution to the Central Intercooperation Fund (FCI).

These companies also have an association agreement with Caja Laboral, whereby they benefi t from the latter’s fi nancial resources, which sets out, inter alia, the equity contributions they must make to Caja Laboral and the limits and conditions governing the distribution of patronage returns and payments on contributions.

2. BASIS OF PRESENTATION

The combined fi nancial statements have been prepared based on the consolidated annual accounts of ULMA C y E, S. Coop., the consolidated fi nancial statements of ULMA Manutención, S. Coop., ULMA Forja, S. Coop. and ULMA Hormigón Polímero, S. Coop., and the fi nancial statements of ULMA Fundazioa, ULMA Agrícola, S. Coop., ULMA Servicios de Logística, S. Coop. and ULMA Conveyor Components, S. Coop. These combined fi nancial statements for 2010 have been prepared by the Governing Body of Grupo Cooperativo ULMA under International Financial Reporting Standards as adopted by the European Union (EU-IFRS) to present fairly the combined equity and combined fi nancial position of the ULMA Group at 31 December 2010, as well as the combined results of its operations, combined comprehensive income and combined cash fl ows and changes in combined equity for the year then ended.

The combined fi nancial statements for 2008 were the fi rst to be prepared by the Group under EU-IFRS.

(a) Basis of presentation of the combined fi nancial statements

These combined fi nancial statements have been prepared using historical cost criteria, except for the following:

Property, plant and equipment held for trading (derivative fi nancial instruments); Hedging derivatives; Available-for-sale fi nancial assets recognised at fair value.

(b) Comparative information

The accounting policies adopted in the preparation of these combined fi nancial statements have been applied consistently for the two years presented.

(c) Relevant accounting estimates and relevant assumptions and judgements in the application of the accounting policies

Relevant accounting estimates and judgements, and other estimates and assumptions have to be made when applying the Group’s accounting principles to prepare the combined fi nancial statements under EU-IFRS. A summary of the items requiring a greater degree of judgement or which are more complex, or where the assumptions and estimates made are signifi cant to the preparation of the combined fi nancial statements is as follows:

Useful life of property, plant and equipment and intangible assets: (see notes 3(c) and 3(d)).

The assumptions employed to determine the value in use of cash-generating units (CGUs) or groups of CGUs to evaluate the impairment of goodwill or other assets (see note 9).

Capitalisation of tax credits (see note 17).

Although estimates are calculated by the parent companies’ directors based on the best information available at 31 December 2010, future events may take place requiring these estimates to be modifi ed in subsequent years. The effect on the combined fi nancial statements of modifi cations resulting from adjustments to be made in subsequent years are recognised prospectively.

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(d) Standards and interpretations not applied

The IASB has issued new accounting standards (IFRS) and interpretations (IFRIC) which are due to become effective for accounting periods beginning on or after 1 January 2010. Details of the nature of the changes in accounting policy and a summary of group management’s assessment of the impact of these new standards are as follows:

IAS 24 (revised): Related party disclosures – issued November 2009 This revised standard includes a new defi nition of related parties which reinforces the concept of symmetry,

thus giving rise to new relationships being included in the defi nition and others falling outside the scope thereof.

The Group will evaluate the impact this revised standard could have in 2011, the fi rst period in which it is applicable.

IAS 9 – Financial Instruments – issued November 2009 (pending adoption by the European Union). This standard, which partially replaces IAS 39, simplifi es the classifi cation and measurement criteria for

fi nancial instruments, maintaining a mixed measurement model and establishing only two main fi nancial asset categories: amortised cost and fair value. The classifi cation criteria is based on the entity’s business model and the characteristics of the fi nancial asset’s contractual cash fl ows.

The Group will assess the impact of this for the fi rst year in which it becomes effective.

3. SIGNIFICANT ACCOUNTING PRINCIPLES

The combined fi nancial statements have been prepared in accordance with the accounting principles and measurement standards set out in International Financial Reporting Standards (IFRS) and IFRIC interpretations adopted by the European Union (EU-IFRS).

A summary of the most signifi cant principles is as follows:

(a) Combination and consolidation method

The fi nancial statements have been combined by aggregating the fi nancial statements of the companies and subgroups of companies involved in the combination, following elimination of all signifi cant balances and transactions between them.

Subsidiaries.Subsidiaries are companies over which the parent companies, either directly or indirectly through subsidiaries, exercises control. Control is the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities.The revenue and expenses of subsidiaries are included in the combined fi nancial statements from their acquisition date, which is the date on which the Group obtained effective control of the aforementioned subsidiaries. Subsidiaries are no longer consolidated once control is lost.The most signifi cant details of the subsidiaries of the parent companies that form part of the ULMA Group are shown in Appendix I, which forms an integral part of this note.The Group has applied IFRS 3 Business Combinations, revised in 2008, to transactions made on or after 1 January 2010.The Group applies the acquisition method for business combinations.The acquisition date is the date on which the Group obtains control of the acquiree.The consideration paid for the business combination is calculated at the acquisition date as the sum of the fair values of the assets transferred, the liabilities incurred or assumed, equity instruments issued and any contingent consideration dependent upon future events or compliance with certain conditions in exchange for control of the acquiree. The consideration paid excludes any amount that does not form part of the exchange for the acquired business. Costs related to the acquisition are recognised as expenses when incurred.The Group recognises acquired assets and assumed liabilities (and any non-controlling interests) at their fair

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value at the acquisition date. Non-controlling interests in the acquired business are recognised at fair value or at the proportional part of the fair value of the acquired net assets. This latter criterion is only applicable for non-controlling interests that give present access to economic benefi ts and the right to the proportional part of the net assets of the acquired entity in the event of liquidation.The excess between the consideration paid plus the value assigned to non-controlling interests and the net amount of assets acquired and liabilities assumed is recognised as goodwill.In 2009 the cost of the business combination was calculated as the sum of the acquisition-date fair values of the assets transferred, the liabilities incurred or assumed, and equity instruments issued by the Group, in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The cost of the business combination was distributed amongst the fair values of the acquired assets and liabilities and contingent liabilities assumed (identifi able net assets) from the acquired entity and the excess of the cost of the business combination over the Group’s interest in the fair value of the identifi able net assets of the acquiree was recognised as goodwill.Intragroup balances and transactions and any unrealised gains or losses are eliminated on consolidation. The accounting policies of subsidiaries have been adapted to those of the Group for transactions and other events in similar circumstances. The fi nancial statements of subsidiaries and subgroups used in the combination process refer to the same reporting date and period as the parent companies.

Non-controlling interests.Non-controlling interests in subsidiaries acquired after 1 January 2005 are recognised at the acquisition date at the proportional part of the fair value of the identifi able net assets. Non-controlling interests in subsidiaries acquired after 1 January 2010 are recognised at the acquisition date at fair value or at the proportional part of the fair value of the acquired net assets. Non-controlling interests are disclosed in the consolidated balance sheet under equity separately from equity attributable to the Parent. Minority interests’ share in the consolidated profi t or loss for the year (and in consolidated comprehensive income for the year) is disclosed separately in the consolidated income statement (consolidated statement of comprehensive income).

Principal changes in the consolidated group.The changes made to the consolidated group in 2010 are as follows:

ULMA C y E, S. Coop. and subsidiaries:• Inclusion of GH, NV with an indirect investment of 60% (see note 6).• Inclusion of Harpak – ULMA Packaging, LLC with an indirect investment of 52% (see note 6).• Inclusion of Hubildu, NV with an investment of 60%. This company was incorporated in 2010. As part of

its incorporation, ULMA C y E, S. Coop. contributed its fully owned subsidiary ULMA Packaging, BV (see note 6). This inclusion does not constitute a business combination.

ULMA Manutención, S. Coop. and subsidiaries:• Inclusion of ULMA Safe Equipment, S. Coop., which was incorporated on 29 December 2009. Although

the investment held in this company is 24.51%, it is fully consolidated as the Group holds control over it. This inclusion does not constitute a business combination.

ULMA Forja, S. Coop.:• Inclusion of Lazkao Forging, S.L. with an investment of 60%. This company was incorporated on 17

November 2010. This inclusion does not constitute a business combination.

The following changes occurred in the consolidated group in 2009:

ULMA C y E, S. Coop. and subsidiaries:• Inclusion of ULMA Construction Systems Canada, Inc. (Canada), ULMA Packaging Ukraine, Ltd. (Ukraine)

and ULMA Packaging Russia, all of which were incorporated and are fully owned by the Group. These inclusions do not constitute business combinations.

• Inclusion of Integral Packaging Solutions, S.L., an 80% investment in which was acquired during the year (see note 6).

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ULMA Manutención, S. Coop. and subsidiaries:• In July 2009 the fork-lift section of ULMA Manutención, S. Coop. acquired 100% of Centroman Norte, S.A.

and Centroman Alquiler, S.L. This percentage was reduced to 63.36% prior to the year end following the sale of 36.64% to Mondragón Inversiones, S.P.E., S. Coop. for Euros 1,980,000 for the part corresponding to Centroman Norte, S.A. and Euros 220,000 for the part corresponding to Centroman Alquiler, S.L.

Certain group companies have not been included in the consolidated group as they are dormant and not relative to the Group (see Appendix I).

(b) Foreign currency transactions and balances

(i) Functional and presentation currency.The fi gures disclosed in the combined fi nancial statements are expressed in thousands of Euros, the Group’s functional and presentation currency, rounded off to the nearest thousand.

(ii) Foreign currency transactions, balances and cash fl ows.Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies have been translated into Euros at the closing rate, while non-monetary assets and liabilities measured at historical cost have been translated at the exchange rate prevailing at the transaction date. Exchange gains and losses arising on the settlement of foreign currency transactions and the translation into Euros of monetary assets and liabilities denominated in foreign currencies are recognised in profi t or loss.

(iii) Translation of foreign operations. ULMA C y E, S. Coop. applied the exemption permitted by IFRS 1 “First-time Adoption of International Financial Reporting Standards” regarding cumulative translation differences, and translation differences from ULMA C y E, S. Coop. subsidiaries generated prior to 1 January 2005 and recognised in the combined fi nancial statements are refl ected in reserves. Goodwill generated prior to the translation date is refl ected in Euros.As of that date, foreign operations whose functional currency is not the currency of a hyperinfl ationary economy have been translated into Euros as follows:• Assets and liabilities, including goodwill and net asset adjustments derived from the acquisition of the

operations, including comparatives, are translated at the closing rate at the balance sheet date; • The revenues and expenses of foreign operations, including comparative balances, are translated at the

exchange rates prevailing on each transaction date; and• All resulting exchange differences are recognised as translation differences in equity.Translation differences related to foreign operations recorded in equity are recognised in the combined income statement on disposal of the foreign operation.

(c) Property, plant and equipment

(i) Initial recognition.Property, plant and equipment are measured at cost, less accumulated depreciation and any impairment losses. The cost of self-constructed assets is determined using the same principles as for an acquired asset, considering the principles established for the cost of production of inventories. The cost of production is capitalised with a credit to non-current self-constructed assets in the combined income statement.Materials for rent, included under other property, plant and equipment, consist of auxiliary items manufactured by the construction business and fork-lift business. Construction business materials for rent are measured at average cost, which does not differ signifi cantly from the historical cost of these items. Proceeds from the sale of these items are recognised in revenue and their carrying amount (as well as the carrying amount of scrapped items) is recognised under raw materials and consumables used in the income statement.

(ii) Amortisation and depreciation.Property, plant and equipment are depreciated by allocating the depreciable amount of an asset on a systematic basis over its useful life. The depreciable amount is the cost of an asset, less its residual value. Each part of an item of property, plant and equipment with a cost that is signifi cant in relation to the total cost of the item is depreciated separately.

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Property, plant and equipment are depreciated on a straight-line basis through the application of annual percentages resulting from the estimated useful life of each item, as follows:

Estimated years of useful lifeBuildings 10 – 33Plant and machinery 5 – 15 Other installations, equipment and furniture 3 – 10Other property, plant and equipment 1 – 7

The Company reviews residual values, useful lives and depreciation methods at each fi nancial year end. Changes to initially established criteria are accounted for as a change in accounting estimates.

(iii) Subsequent costs.After initial recognition of an asset, only costs which generate future economic benefi ts and which can be classifi ed as probable and be reliably estimated are capitalised. Costs of day-to-day servicing are recognised in profi t and loss as incurred.

(iv) Impairment.The Group evaluates and determines losses and reversals of impairment losses on property, plant and equipment based on the criteria set out in note 3(f).

(d) Intangible assets

(i) Goodwill.Goodwill on business combinations (see note 8) occurring subsequent to the transition date (1 January 2005 for ULMA C y E, S. Coop. and 1 January 2007 for the remaining members of the Group) is recognised initially as the excess of the cost of the business combination over the Group’s interest in the net fair value of the assets, liabilities and contingent liabilities of the subsidiary or the business combination acquired.Goodwill is not amortised but is subject to annual impairment testing, or more frequently where events or circumstances indicate that an asset may be impaired. Goodwill on business combinations is allocated to the cash-generating units (CGUs) or groups of CGUs which are expected to benefi t from the synergies of the business combination and the criteria described in note 8 are applied. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill relating to business combinations formed prior to 1 January 2005 in the case of ULMA C y E, S. Coop. and prior to 1 January 2007 in the case of the remaining group companies, is included at its carrying amount as refl ected in the annual accounts for the years then ended, considering this value to be the deemed cost.Internally-generated goodwill is not recognised as an asset.

(ii) Internally-generated intangible assets.Expenditure on research is recognised as an expense when it is incurred. Costs related with development activities are capitalised when:• The Group has technical studies justifying the feasibility of the production process.• The Group has an obligation to complete production of the asset to ensure it is suitable for sale (or internal

use).• The asset will generate suffi cient economic benefi ts.• The Group has the necessary fi nancial and technical resources to complete production of the asset and has

developed budget and cost accounting control systems which allow budgeted costs, introduced changes and costs actually assigned to different projects to be monitored.

(iii) Patents and trademarks.Trademarks and licences are recognised at acquisition cost. Licences have fi nite useful lives and are subsequently measured at cost less accumulated amortisation and impairment. The Group tests trademarks with indefi nite useful lives for impairment at least annually or whenever there is an indication that they may be impaired.

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annual accounts

(iv) Other intangible assets.Intangible assets are carried at cost, less accumulated amortisation and any accumulated impairment valuation allowances.

(v) Useful life and amortisation rates.The Group assesses whether the useful life of each intangible asset acquired is fi nite or indefi nite. An intangible asset is regarded as having an indefi nite useful life when there is no foreseeable limit to the period over which the asset will generate net cash infl ows.Intangible assets with indefi nite useful lives are not amortised but tested for impairment at least annually. Intangible assets with fi nite useful lives are amortised by allocating the depreciable amount of an asset on a straight line basis over its useful life, by applying the following criteria:

Estimated years of useful lifePatents 7,5Software 3 – 5Other 1 – 5.5

The depreciable amount is the cost of an asset, less its residual value.The Group reviews the residual value, useful life and amortisation method for intangible assets at each fi nancial year end. Changes to initially established criteria are accounted for as a change in accounting estimates.

(vi) Impairment .The Group evaluates and determines losses and reversals of impairment losses on intangible assets based on the criteria set out in note 3(f).

(e) Investment property

Investment property comprises property which is earmarked totally or partially to earn rentals or for capital appreciation or both, rather than for use in the production or supply of goods or services, for administrative purposes or for sale in the ordinary course of business. Investment property is initially recognised at cost, including transaction costs.

After initial recognition, investment property is measured using the cost or deemed cost criteria applicable to property, plant and equipment. The depreciation methods and useful lives are refl ected in this note.

(f) Impairment of non-fi nancial assets subject to amortisation or depreciation

The Group evaluates whether there are indications of possible impairment losses on non-fi nancial assets subject to amortisation or depreciation, including entities accounted for using the equity method, to verify whether the carrying amount of these assets exceeds the recoverable amount.

The Group tests goodwill, intangible assets with indefi nite useful lives and property, plant and equipment not yet available for use for impairment at least annually, irrespective of whether there is any indication that the assets may be impaired.

The recoverable amount of assets is the greater of their fair value less costs to sell and value in use. An asset’s value in use is calculated based on the expected future cash fl ows deriving from use of the assets, expectations of possible variations in the amount or timing of those future cash fl ows, the time value of money, the price for bearing the uncertainty inherent in the asset and other factors that market participants would refl ect in pricing the future cash fl ows the entity expects to derive from the asset.

Negative differences resulting from the comparison of the carrying amounts of the assets with their recoverable amount are recognised in the combined income statement.

Recoverable amount is determined for each individual asset, unless the asset does not generate cash infl ows

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annual accounts

that are largely independent of those from other assets or groups of assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs.

Impairment losses for cash-generating units are allocated fi rst to reduce the carrying amount of goodwill allocated to the unit and then to the other assets of the unit pro rata with their carrying amounts. The carrying amount of each asset may not be reduced below the highest of its fair value less costs to sell, its value in use and zero.

At the end of each reporting period the Group assesses whether there is any indication that an impairment loss recognised in prior periods no longer exists or may have decreased. Impairment losses on goodwill are not reversible. Impairment losses for other assets are only reversed if there has been a change in the estimates used to calculate the recoverable amount of the asset.

A reversal of an impairment loss is recognised in profi t or loss. The increase in the carrying amount of an asset attributable to a reversal of an impairment loss may not exceed the carrying amount that would have been determined, net of depreciation or amortisation, had no impairment loss been recognised.

(g) Leases

(i) Lessor accounting records.The Group has transferred the right to use certain assets through lease contracts.Assets leased to third parties under operating lease contracts are presented according to their nature, applying the accounting policies set out in note 3(c).

(ii) Lessee accounting records. Leases in which the Group assumes substantially all the risks and rewards incidental to ownership are classifi ed as fi nance leases, otherwise they are classifi ed as operating leases. • Finance leases At the commencement of the fi nance lease term, the Group recognises an asset and a liability at the

lower of the fair value of the leased asset and the present value of the minimum lease payments. Initial direct costs are added to the asset’s carrying amount. Minimum lease payments are apportioned between the fi nance charge and the reduction of the outstanding liability. Interest is expensed using the effective interest method.

The accounting policies applied to the assets used by the Group by virtue of fi nance lease contracts are the same as those set out in note 3(c).

• Operating leases Lease payments under an operating lease are recognised as an expense on a straight-line basis over the

term of the lease.

(h) Financial instruments

(i) Financial assets and liabilities at fair value through profi t or loss.Financial assets and liabilities at fair value through profi t or loss are initially recognised at fair value. Transaction costs directly attributable to the acquisition or issue are recognised as an expense when incurred.After initial recognition, they are recognised at fair value through profi t or loss.

(ii) Loans and receivables.These assets are recognised initially at fair value, including transaction costs, and are subsequently measured at amortised cost using the effective interest method.

(iii) Available-for-sale fi nancial assets.Available-for-sale fi nancial assets are non-derivative fi nancial assets that are either designated specifi cally to this category or do not comply with requirements for classifi cation in the above categories. Available-for-sale fi nancial assets are initially recognised at fair value plus transaction costs directly attributable to the acquisition.Subsequent to initial recognition, fi nancial assets classifi ed in this category are measured at fair value,

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annual accounts

recording the gain or loss in income and expenses in equity. Fair value is not reduced by transaction costs incurred on sale or disposal. Amounts recognised in equity are taken to the combined income statement when the fi nancial assets are derecognised.

(iv) Financial assets and fi nancial liabilities carried at cost.Investments in equity instruments whose fair value cannot be reliably estimated are stated at cost. The Group recognises income on investments only to the extent that the reserves of retained earnings from the investee, created following its acquisition, are distributed. Dividends received in excess of these profi ts are considered as a recovery of the investment and therefore recognised as a decrease in its carrying amount.

(v) Impairment and defaults of fi nancial assets.The Group recognises impairment losses and defaults on loans and other receivables and debt instruments through recognition of a corrective provision for fi nancial assets. When impairment and defaults are considered irrecoverable, the carrying amount is written off against the provision. Reversals of impairment are also recognised against the provision.

(vi) Financial liabilities.Financial liabilities, including trade and other payables, which are not classifi ed as at fair value through profi t or loss, are initially recognised at fair value less any transaction costs that are directly attributable to the issue of the fi nancial liability. After initial recognition, liabilities classifi ed under this category are measured at amortised cost using the effective interest method.

(vii) Derecognition of fi nancial assets.Financial assets are derecognised when the contractual rights to the cash fl ows from the fi nancial asset expire or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and the sum of the consideration received, net of transaction costs, including any new asset obtained less any new liability assumed and any cumulative gain or loss deferred in other comprehensive income, is recognised in profi t or loss.

(viii) Derecognition of fi nancial liabilities.A fi nancial liability, or part of it, is derecognised when the Group either discharges the liability by paying the creditor, or is legally released from primary responsibility for the liability either by process of law or by the creditor. The difference between the carrying amount of a fi nancial liability, or part of a fi nancial liability, extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profi t or loss.

(i) Hedge accounting

Derivative fi nancial instruments which qualify for hedge accounting are initially measured at fair value, plus any transaction costs that are directly attributable to the acquisition, or less any transaction costs directly attributable to the issue of the fi nancial instruments.

The Group hedges cash fl ows related to loans extended at variable interest rates.

The Group recognises the gain or loss on the measurement at fair value of a hedging instrument that is determined to be an effective hedge in other comprehensive income. The ineffective portion and the specifi c component of the gain or loss or cash fl ows on the hedging instrument, excluding the measurement of the hedge effectiveness, are recognised under fi nance income or expenses.

If a hedge of a forecast transaction subsequently results in the recognition of a fi nancial asset or a fi nancial liability, the associated gains or losses that were recognised in equity are reclassifi ed from equity to profi t or loss in the same period or periods during which the asset acquired or liability assumed affects profi t or loss and under the same caption of the income statement.

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annual accounts

(j) Inventories

Stocks are stated at cost of acquisition or production as follows:- Goods for resale, raw materials and other supplies: the Construction Business uses the FIFO method (fi rst

in, fi rst out); the Packaging, Maintenance, Agricultural Components and Logistics Businesses use weighted average price. The Polymer Concrete and Foundry Business uses average price, the valuation of which does not differ signifi cantly from using the FIFO method.

- Finished goods and work in progress are stated at average cost, which includes the cost of materials used, labour costs and direct and indirect manufacturing overheads based on hourly rates, which do not signifi cantly differ from actual rates and are corrected if economic variations are relevant.

Volume discounts from suppliers are recognised when it is probable that the discount conditions will be met. Prompt payment discounts are recognised as a reduction in the cost of inventories acquired.

(k) Cash and cash equivalents

Cash and cash equivalents include cash on hand and demand deposits in fi nancial institutions. They also include other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignifi cant risk of changes in value. An investment normally qualifi es as a cash equivalent when it has a maturity of less than three months from the date of acquisition.

The Group recognises interest and dividends received and paid under cash fl ow from fi nancing activities.

(l) Government grants

Government grants are recognised in the balance sheet when there is reasonable assurance that they will be received and that the Group will comply with the conditions attached. (i) Capital grants.

Capital grants in the form of monetary assets are debited to government grants, and taken to other income in the combined income statement in line with the depreciation of the corresponding fi nanced assets.

(ii) Operating grants. Operating grants are recognised as a reduction with a credit to other income.

(iii) Interest-rate grants. Financial liabilities comprising implicit assistance in the form of below market interest rates are initially recognised at fair value. The difference between this value, adjusted where necessary for the emission costs of the fi nancial liability and the amount received, is recorded as an offi cial grant based on the nature of the grant awarded.

(m) Employee benefi ts

• Defi ned contributions In prior years, certain ULMA group cooperatives approved a plan to encourage voluntary early retirement at

the age of 60 for members who were 50 years of age or more. In accordance with this plan, the cooperatives in question undertake to make fi xed monthly payments to Arogestión Ahorro-Jubilación (voluntary social welfare entity) to improve the contribution base or to contribute to the pension plans of members eligible for the plan up until the date of retirement.

Given the voluntary and revocable nature of the amounts, they are expensed as they are accrued during the period between the date of incorporation into the plan and the effective date of early retirement.

• Termination benefi ts Termination benefi ts paid or payable that are not associated with current restructuring processes are

recognised when the Group has a demonstrable obligation to rescind an employee contract prior to the

/23

annual accounts

normal retirement date. The Group has demonstrable obligations to rescind employees’ contracts when a detailed formal plan exists, and there is no real possibility of the decision being reversed or modifi ed.

• Short-term employee benefi ts The Group recognises the expected cost of short-term employee benefi ts in the form of accumulating

compensated absences when the employees render service that increases their entitlement to future compensated absences. In the case of non-accumulating compensated absences, the expense is recognised when the absences occur.

(n) Provisions

Provisions are recognised when the Group has a legal or constructive present obligation as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account all risks and uncertainties surrounding the amount to be recognised as a provision and, where the time value of money is material, the fi nancial effect of discounting provided that the expenditure to be made each period can be reliably estimated.

The fi nancial effect of provisions is recognised as a fi nance expense in the combined income statement.

The machinery sold by the Packaging Business and maintenance systems sold by the Handling Systems section have an after sale warranty that covers part of the cost of materials and labour for repairs made during the fi rst six/twelve months following the installation of machinery or sale of a fork-lift. These expenses are recorded in the year in which the related sale is made in changes in other trade provisions, under other expenses. At 31 December 2010 and 2009 the Group has recognised under trade and other payables a provision for the estimated expenses to be incurred in 2010 and 2009 for sales made in 2009 and 2008, respectively.

If it is no longer probable that an outfl ow of resources will be required to settle the obligation, the provision is reversed against the combined income statement entry where the corresponding expense was recognised, and any excess is recognised as other income.

(o) Contribution for Cooperative Education and Promotion and Other Public Interests

In accordance with Law 4 of 24 June 1993 governing cooperatives in the Basque Country, a minimum of 30% of net profi t for each year, after taxes, is to be appropriated to the mandatory reserve fund and the Contribution for Education and Promotion in the proportion of a minimum of 20% and 10%, respectively. In the event the mandatory reserve fund does not reach 50% of members’ funds, the minimum contribution made to the Contribution for Cooperative Education and Promotion may be reduced by half. The Contribution for Cooperative Education and Promotion is legally protected from seizure. It is comprised of fi nes and other sanctions imposed by the Cooperative on its members as well as other amounts, credited to available surpluses, agreed at the General Assembly.

(p) Revenue recognition

Revenue from the sale of goods or services is measured at the fair value of the consideration received or receivable. Volume, prompt payment or other types of discounts are recognised as a reduction in revenues if considered probable at the time of revenue recognition.

(i) Sale of goods. The Group recognises revenue from the sale of goods when: • The Group has transferred to the buyer the signifi cant risks and rewards of ownership of the goods;• The Group retains neither continuing managerial involvement to the degree usually associated with

ownership nor effective control over the goods sold;• The amount of revenue can be measured reliably;

/24

annual accounts

• It is probable that the economic benefi ts associated with the transaction will fl ow to the Group; and • The costs incurred or to be incurred in respect of the transaction can be measured reliably.

(ii) Revenue from operating leases. Operating lease income is recognised in income on a straight-line basis over the term of the lease.

(iii) Dividends. Dividends from investments in equity instruments are recognised when the Group is entitled to receive them.

(q) Income tax

The income tax expense and tax income for the year comprises current tax and deferred tax.

Current tax is the amount of income taxes payable or recoverable in respect of the combined taxable income or combined tax loss for the year. Current tax assets or liabilities are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and tax laws that have been enacted or substantially enacted at the balance sheet date.

Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences, whereas deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carryforward of unused tax losses, and the carryforward of unused tax credits. Temporary differences are differences between the tax base of an asset or liability and its carrying amount in the balance sheet.

Current and deferred tax are recognised as income or an expense and included in profi t or loss for the year, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different year, directly in equity, or a business combination.

In application of Local Law 9 of 14 October 1997 governing cooperative tax regulations, cooperatives are entitled to reduce their tax liability by 50%. The appropriations to the Education, Training and Promotion Fund and 50% of the allocation to the Mandatory Reserve Fund are considered tax deductible.

(i) Taxable temporary differences. Taxable temporary differences are recognised in all cases except where:• They arise from the initial recognition of goodwill or an asset or liability in a transaction which is not a business

combination and at the time of the transaction, affects neither accounting profi t nor taxable income.• They are associated with investments in subsidiaries and joint ventures over which the Group is able to

control the timing of the reversal of the temporary difference and it is not probable that the difference will reverse in the foreseeable future.

(ii) Deductible temporary differences. Deductible temporary differences are recognised provided that:• It is probable that taxable profi t will be available against which the deductible temporary difference can

be utilised, unless the differences arise from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profi t nor taxable income.

• The temporary differences are associated with investments in subsidiaries and joint ventures which will reverse in the foreseeable future and suffi cient taxable income is expected to be generated against which the temporary difference can be offset.

(iii) Measurement. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the years when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted. The tax consequences that would follow from the manner in which the Group expects to recover or settle the carrying amount of its assets or liabilities are also refl ected in the measurement of deferred tax assets and liabilities.

/25

annual accounts

The carrying amounts of deferred tax assets are reviewed by the Group at each balance sheet date to reduce these amounts to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow the benefi t of the deferred tax assets to be utilised.

Deferred tax assets that do not meet the aforementioned conditions are not recognised in the combined balance sheet. At each year end the Group evaluates whether the conditions for recognising deferred tax assets not previously recognised have been met.

(r) Environmental issues

The Group takes measures to prevent, reduce or repair the damage caused to the environment by its activities.

Costs incurred from environmental activities, other than those relating to the acquisition of property, plant and equipment, are recognised under other expenses in the year in which they are incurred.

Non-current assets acquired by the Group to minimise the environmental impact of its activity and protect and improve the environment, including the reduction and elimination of future pollution from the Company’s activities are recognised as assets, applying the measurement, presentation and disclosure criteria described in sections (c) and (d) of this note.

4. RISK MANAGEMENT POLICY

(a) Financial risk factors

The Group’s activities are exposed to various fi nancial risks: market risk (including currency risk, interest rate risk in fair value and price risk), credit risk, liquidity risk and interest rate risk in cash fl ows.

(i) Market risk.

Currency risk

The Group operates internationally and is therefore exposed to currency risks when operating with foreign currencies, especially with regard to the US Dollar. Currency risk is associated with future commercial transactions, recognised assets and liabilities, and net investments in foreign operations. In order to control the currency risk associated with future commercial transactions and recognised assets and liabilities in US Dollars, the Group uses forward currency contracts.The Group holds several investments in foreign operations, the net assets of which are exposed to currency risk. Currency risk affecting net assets of the Group’s foreign operations are mitigated primarily through borrowings in the corresponding foreign currencies. Although the currency futures contracted by the Group are used to hedge currency risk, it does not recognise these contracts using hedge accounting, given the diffi culty of complying with the requirements established in IAS 39 to prove their effectiveness. Consequently, the change in fair value of these contracts at each balance sheet date is recognised in the income statement for the year.

(ii) Credit risk. The Group is not signifi cantly exposed to credit risk. The Group has policies to ensure that sales are only made to customers with an adequate credit history. Derivative and cash operations are only performed with fi nancial institutions that have high credit ratings. The Group has policies to limit the amount of risk with any one fi nancial institution. Valuation allowances for bad debts and a review of individual balances based on customers’ credit ratings, market trends and historical analysis of bad debts at an aggregated level are subject to in-depth study.Financial assets subject to credit risk are recognised under trade and other debtors (see note 16).

(iii) Liquidity risk. The Group employs a prudent policy to cover its liquidity risks based on having suffi cient cash and marketable

/26

annual accounts

securities as well as suffi cient fi nancing through credit facilities to settle market positions. The Group aims to be fl exible with regard to fi nancing through drawdowns on contracted credit facilities.

(iv) Cash fl ow and fair value interest rate risks. As the Group does not have a considerable amount of remunerated assets, income and cash fl ows are not affected by fl uctuations in market interest rates. Interest rate risks arise from other long-term borrowings. Borrowings at variable interest rates expose the Group to cash fl ow interest rate risks. Fixed-interest loans which expose the Group to fair value interest rate risks are not signifi cant. The Group manages interest rate risks in cash fl ows through variable to fi xed interest rate swaps. These interest rate swaps convert variable interest rates on borrowings to fi xed interest rates. Generally the Group obtains other long-term borrowings with variable interest rates and swaps these for fi xed interest rates. These are generally at lower rates than those which would have been obtained had the funds been obtained directly with fi xed interest rates. The Group applies hedge accounting to fi nancial swaps.Details of derivative instruments comprising variable to fi xed interest rate swaps to manage exposure to fl uctuations in bank loan interest rates are included in note 15 on derivative fi nancial instruments.

(v) Changes in fair value. The carrying amounts of the Group’s different classes of fi nancial assets and liabilities do not differ signifi cantly from their fair values at 31 December 2010 and 2009.

5. SEGMENT REPORTING

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete fi nancial information is available.

At 31 December 2010 the Group has the following business segments, the principal products and services of which are as follows:

Construction: design, production and sale of auxiliary components for the construction industry in general, including the lease, sale and assembly of scaffolding, bracing and shuttering systems. Both direct sale and lease operations are carried out in the same markets and with the same customers based on customers’ needs or the characteristics of the local markets of the subsidiaries through which the Group carries out its operations.

Packaging: design and production, using own machine technology, of packing and packaging systems and services that provide added value, protection and quality presentation for its customers’ products.

Agricultural: design, production and sale of integral installations for sheltered agricultural operations.

Fundazioa: Administration of the Corporate Promotion Fund and the Remunerated Solidarity Fund.

ULMA Group: planning of commercial and fi nancial relations and exchange of personnel between ULMA Group companies.

Logistics: design, manufacture, sale, installation and maintenance of components and systems for classifying articles and parcels, order preparation systems, integrated baggage handling at airports and similar installations and special machinery.

Foundry: manufacture and sale of fl anges, tube accessories and wrought iron parts in general and any type of industrial, commercial and service activity related to or which complements those already mentioned.

Maintenance: design, manufacture, assembly and sale of maintenance equipment and systems and fork-lift

/27

annual accounts

trucks and related technical assistance. Analysis, development and implementation of logistics IT systems and consulting services.

Polymer Concrete: design, production and sale of prefabricated construction components for concrete, polymers and metals, as well as the rendering of on-site assembly services.

ULMA Conveyor Components: design, manufacture, sale and installation of heavy, medium and light rollers, gravity-based and motorised rollers for applications in the fi eld of maintenance, supports and drums for transformers, and components which comprise the items mentioned in the previous points.

Inter-segmental sales prices are established applying the normal trade terms and conditions available to unrelated third parties.

Segment reporting is shown in Appendix III, which forms an integral part of this note.

Eliminations correspond to the elimination of balances and transactions between business segments.

The Group has non-current assets outside of Spain amounting to Euros 467 million (Euros 407 million in 2009).

6. BUSINESS COMBINATIONS

On 19 July 2010 ULMA C y E, S. Coop. subsidiary ULMA Packaging Systems, Inc. (UPS) set up a company called Harpak-ULMA Packaging, LLC. (HUP) together with Harpak, Inc., which provides integrated solutions to packaging companies. Both of the aforementioned companies have registered offi ces in the United States. The reason for creating the new company is to combine the potential of both entities to offer integrated services to customers.

In incorporating the company, UPS contributed assets which at that date had a net value of Euros 207 thousand and its percentage interest was 26%. UPS then simultaneously acquired an additional 26% of HUP for Euros 7,884 thousand, thus gaining control of the company.

The acquired business has generated revenue and consolidated profi t of Euros 12,722 thousand and Euros 150 thousand, respectively, between the acquisition date and the closing date.

If the acquisition had been made on 1 January 2010, the Group’s revenue and consolidated profi t for the year ended 31 December 2010 would have amounted to Euros 29,624 thousand and Euros 2,039 thousand, respectively.

Details of the aggregate cost of the combination, the fair value of net assets and goodwill, converted to thousands of Euros, are as follows:

Thousands of EurosConsideration paid Cash paid 7,884 Total consideration paid 7,884Non-controlling interests 2,653Fair value of net assets acquired (5,740)Goodwill (excess of net assets acquired over costof acquisition) (note 8) 4,797

The goodwill recognised relates to the synergies that are expected to be produced as a result of the operations carried out jointly by both companies.

The Group has recognised transaction costs of Euros 157 thousand under other expenses in the consolidated income statement.

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annual accounts

Amounts recognised at the date of acquisition by signifi cant classes of assets and liabilities are as follows:

Thousands of Euros Fair value Plant and machinery 114Other intangibles (commercial relationships) (note 8) 2,073Trademarks (note 8) 852Patents (note 8) 1,781Other intangibles (fi rm orders) (note 8) 679Trade and other receivables 2,093Other fi nancial assets 524Inventories 3,959Cash and cash equivalents 1,255Other assets 240Total assets 13,570

Trade and other payables (7,735)Other liabilities (95) Total liabilities (7,830) Total net assets 5,740 Cash paid 7,884Cash and cash equivalents of the acquired company (1,255)Cash outfl ow for the acquisition 6,629

In 2010 ULMA C y E, S. Coop. (Packaging business) reached an agreement with Moneybee BVBA, a Belgian company, to set up Hurbildu, NV. Moneybee BVBA fully owns GH, NV, a Belgian company that distributes products that complement those of the Company. The reason for creating the new company is to combine the potential of both entities to offer integrated services to customers in the Benelux region.

Hurbildu was incorporated on 14 April 2010 with an initial capital of Euros 75 thousand, which was paid in by Moneybee BVBA. On 5 July 2010 Hurbildu increased its capital by Euros 1,175 thousand, in which the Company participated by contributing 100% of its shares in ULMA Packaging BV, at a fair value of Euros 547 thousand, and paying Euros 202 thousand in cash, thus acquiring a 60% interest in Hurbildu. On the same date, Hurbildu acquired 100% of GH, NV for Euros 1,700 thousand.

The acquired business has generated revenue and consolidated losses for the Group of Euros 9,057 thousand and Euros 554 thousand, respectively, between the acquisition date and the 2010 close.

If the acquisition had been made on 1 January 2010, the Group’s revenue and consolidated losses for the year ended 31 December 2010 would have amounted to Euros 6,267 thousand and Euros 83 thousand, respectively.

Details of the aggregate cost of the combination, the fair value of net assets and goodwill, converted to thousands of Euros, are as follows:

Thousands of EurosConsideration paid Cash paid 1,700 Total consideration paid 1,700Fair value of net assets acquired (560)Goodwill (excess of net assets acquired overcost of acquisition) (note 8) 1,140

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annual accounts

The fair value of assets acquired is a provisional value as the acquisition price has yet to be assigned.

The Group has recognised transaction costs of Euros 7 thousand under other expenses in the consolidated income statement.

Amounts recognised at the date of acquisition by signifi cant classes of assets and liabilities are as follows:

Thousands of Euros Fair value Property, plant and equipment 270Investment in Phi Pack, NV 743Software 114Trade and other receivables 1,843Other fi nancial assets 40Inventories 329Cash and cash equivalents 392Other assets 41Total assets 3,772

Loans and borrowings (242)Trade and other payables (2,970) Total liabilities (3,212) Total net assets 560 Cash paid 1,700Cash and cash equivalents of the acquired company (392)Cash outfl ow for the acquisition 1,308

The investment in Phi Pack, NV comprises 100% of the shares held by GH, NV in this company. This investment includes goodwill of Euros 880 thousand (see note 8).

On 8 April 2009 ULMA C y E, S. Coop. acquired 80% of Integral Packaging Solutions, S.L. for Euros 2,830 thousand, which is payable in four instalments of Euros 707 thousand between 19 April 2009 and 4 April 2012. The investment was recognised by the Parent company at its restated value of Euros 2,727 thousand. At 31 December 2010 the outstanding restated value payable is recognised in non-current and current interest-bearing liabilities in the combined balance sheet for amounts of Euros 685 thousand and Euros 703 thousand, respectively (Euros 1,388 thousand and Euros 631 thousand, respectively, in 2009) (see note 6). This company has registered offi ces in La Rioja (Spain) and its principal activity is the production, sale and repair of industrial machinery and supplies.

Details of the aggregate cost of the combination, the fair value of net assets and goodwill in 2009 were as follows:

Thousands of EurosCost of the business combination Cash paid 2,727 Fair value of net assets acquired (2,480)Goodwill (excess of net assets acquired over costof acquisition) (note 8) 247

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Amounts recognised at the date of acquisition for assets and liabilities are as follows:

Thousands of Euros 2009 Fair value Previous carrying amount Intangible assets (Development) 1,030 -Property, plant and equipment 2,466 1,782Other intangible and fi nancial assets 26 26Inventories 1,349 1,349Deferred tax assets acquired 325 -Other (1,637) (1,637)Tax effect (367) - Total net assets 3,192 1,520 Non-controlling interests (712) (304) Total net assets acquired 2,480 1,216

In July 2009 the fork-lift truck division of Cooperativa ULMA Manutención acquired 100% of Centroman Norte, S.A. and Centroman Alquiler, S.L., and subsequently sold a 36.64% interest in each company for Euros 1,980,000 and Euros 220,000, respectively, to Mondragón Inversiones, S.P.E., S. Coop. before the 2009 close.

EurosCost of the investment Centroman Norte, S,A, 3,561,529 Centroman Alquiler, S,L, 395,725 Total investment 3,957,254

Payments (2,157,254)

Outstanding payments - Centroman members Centroman Norte, S,A, 1,620,000 Centroman Alquiler, S,L, 180,000

Total outstanding payments 1,800,000

The goodwill arising on the aforementioned acquisitions is as follows:

Euros

Centroman Norte, S.A. goodwill 2,412,567Centroman Alquiler, S,L, goodwill 226,661 Total 2,639,228

(note 8)

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7. PROPERTY, PLANT AND EQUIPMENT

Details of property, plant and equipment and movement during 2010 and 2009 are as follows:

Thousands of Euros Land and Plant Other installations, Other Under buildings and equipment and property, plant construction machinery furniture and equipment and advances Total

Balance at 1 January 2010 162,728 58,021 25,005 213,975 26,061 485,790Cost 204,573 140,210 106,011 607,802 26,061 1,084,657Accumulated depreciation and impairment losses (41,845) (82,189) (81,006) (393,827) - (598,867)Carrying amount at 1 January 2010 162,728 58,021 25,005 213,975 26,061 485,790Additions 2,369 13,374 1,882 53,553 16,787 87,965Additions to business combinations (note 6) 139 80 88 77 - 384Disposals (net of depreciation) (5,668) (5,448) (458) (12,354) (4,161) (28,089)Transfers (net of depreciation) (2,719) 82 261 18,859 (17,060) (577)Depreciation for the year (4,773) (10,852) (7,677) (73,253) - (96,555)Impairment losses recognised in the income statement - 66 - - - 66Translation differences and other movements 1,747 136 265 14,336 (224) 16,260Balance at 31 December 2010 153,823 55,459 19,366 215,193 21,403 465,244Cost 194,064 142,818 98,815 573,213 21,403 1,030,313Accumulated depreciation and impairment losses (40,241) (87,359) (79,449) (358,020) - (565,069)Carrying amount at 31 December 2010 153,823 55,459 19,366 215,193 21,403 465,244

Thousands of Euros Land and Plant Other installations, Other Under buildings and equipment and property, plant construction machinery furniture and equipment and advances Total

Balance at 1 January 2009 149,581 55,711 31,231 242,009 16,892 495,424Cost 186,661 130,580 103,705 584,640 16,892 1,022,478Accumulated depreciation and impairment losses (37,080) (74,869) (72,474) (342,631) - (527,054)Carrying amount at 1 January 2009 149,581 55,711 31,231 242,009 16,892 495,424Additions 15,894 12,001 1,864 58,233 30,939 118,931Additions to the combined group - 45 73 10,818 557 11,493Additions to business combinations (note 6) 1,824 1,046 148 13 - 3,031Disposals (net of depreciation) (961) (3,490) (314) (32,101) (17,685) (54,551)Transfers (net of depreciation) 213 2,411 700 (366) (5,506) (2,548)Depreciation for the year (4,502) (9,571) (8,907) (73,446) - (96,426)Impairment losses recognised in the income statement - (173) - - - (173)Translation differences and other movements 679 41 210 8,815 864 10,609Balance at 31 December 2009 162,728 58,021 25,005 213,975 26,061 485,790Cost 204,573 140,210 106,011 607,802 26,061 1,084,657Accumulated depreciation and impairment losses (41,845) (82,189) (81,006) (393,827) - (598,867)Carrying amount at 31 December 2009 162,728 58,021 25,005 213,975 26,061 485,790

(a) Other property, plant and equipmentDisposals of other property, plant and equipment amounting to Euros 12,354 thousand (Euros 32,101 thousand in 2009) mainly consist of construction business rental materials sold and/or scrapped during 2010 and 2009.

Additions to other property, plant and equipment primarily relate to own production of materials for rent, the income from which is included in the combined income statement under work carried out by the Group for non-current assets.

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(b) Mortgaged property, plant and equipmentAt 31 December 2010 and 2009 the Group does not own any mortgaged property, plant or equipment.

(c) InsuranceThe Group has contracted insurance policies to cover the risk of damage to its property, plant and equipment. The coverage of these policies is considered suffi cient.

(d) CommitmentsAt 31 December 2010 the Group has not signed any contracts for the purchase of property, plant and equipment that will materialise in 2010.

(e) Fully depreciated assetsAt 31 December 2010 this caption primarily comprises fully depreciated machinery, equipment and other items of property, plant and equipment, most of which are still in use, and whose cost is approximately Euros 264 million (approximately Euros 323 million at 31 December 2009).

(f) Capitalised fi nance expensesDuring 2010 and 2009 the Group has not capitalised fi nance expenses as assets under construction as the construction or installation period is less than one year.

8. GOODWILL AND OTHER INTANGIBLE ASSETS

Details of intangible assets, including goodwill, and movement during 2010 and 2009 are as follows:

Thousands of Euros Patents and Computer Development In trademarks software expenses progress Other Total GoodwillCost or deemed cost 1,461 14,306 2,698 87 - 18,552 20,535Accumulated amortisation and impairment losses (1,294) (11,550) (349) - - (13,193) -Carrying amount at 1 January 2010 167 2,756 2,349 87 - 5,359 20,535Additions 6 635 1,482 134 - 2,257 -Additions to business combinations (note 6) 2,633 113 - - 2,752 5,498 6,817Disposals (net of amortisation) - (16) (89) (11) - (116) -Transfers (net of amortisation) 53 (210) 38 (38) - (157) -Amortisation and depreciation (139) (1,586) (399) - (488) (2,612) -Translation differences and other movements 15 64 - - 4 83 -Balances at 31 December 2010 2,735 1,756 3,381 172 2,268 10,312 27,352Cost, deemed cost or revalued cost 4,168 14,411 4,129 172 2,752 25,632 27,352Accumulated amortisation and impairment losses (1,433) (12,655) (748) - (484) (15,320) -Carrying amount at 31 December 2010 2,735 1,756 3,381 172 2,268 10,312 27,352

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Thousands of Euros Patents and Computer Development In trademarks software expenses progress Other Total GoodwillCost or deemed cost 1,410 11,570 1,444 54 14,478 17,682Accumulated amortisation and impairment losses (1,241) (8,135) (624) - (10,000) -Carrying amount at 1 January 2009 169 3,435 820 54 4,478 17,682Additions 10 3,423 1,010 87 4,530 -Additions to business combinations (note 6) 19 - 824 - 843 2,886Disposals (net of amortisation) - (2,812) - (7) (2,819) (33)Transfers (net of amortisation) - 524 - (47) 477 -Amortisation and depreciation (39) (1,851) (305) - (2,195) -Translation differences and other movements 8 37 - - 45 -Balances at 31 December 2009 167 2,756 2,349 87 5,359 20,535Cost, deemed cost or revalued cost 1,461 14,306 2,698 87 18,552 20,535Accumulated amortisation and impairment losses (1,294) (11,550) (349) - (13,193) -Carrying amount at 31 December 2009 167 2,756 2,349 87 5,359 20,535

Patents and trademarks include a trademark for an amount of Euros 852 thousand with an indefi nite life which was acquired as part of the Harpak acquisition (see note 6).

Additions to goodwill comprise amounts of Euros 4,797 thousand and Euros 2,026 thousand relating to the acquisition of Harpak and GH, NV, respectively (see note 6).

(a) Intangible assets subject to guarantees

At 31 December 2010 and 2009 there are no intangible assets subject to guarantees.

9. IMPAIRMENT AND ALLOCATION OF GOODWILL AND INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES TO CGUS

(a) Evaluation of impairment of goodwill by CGU

For impairment testing purposes goodwill has been allocated to the cash generating units (CGU) of the Group by country of operation and business segment.

A summary by CGU (or groups of CGUs) of the allocation of goodwill is as follows:

Thousands of Euros 2010 Construction Packaging Maintenance segment segment segment TotalDomestic - 247 2,697 2,944Europe – Italy 15,982 - - 15,982Europe – Poland 864 - - 864Europe – Netherlands - 2,020 - 2,020Asia - Dubai 745 - - 745América - 4,797 - 4,797Totales 17,591 7,064 2,697 27,352 (note 8)

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Thousands of Euros 2009 Construction Packaging Maintenance segment segment segment TotalDomestic - 247 2,697 2,944Europe – Italy 15,982 - - 15,982Europe – Poland 864 - - 864Asia - Dubai 745 - - 745Total 17,591 247 2,697 20,535 (note 6) (note 6) (note 8)

The recoverable amount of a CGU is calculated from its value in use. These calculations are based on cash fl ow projections from the fi nancial budgets approved by management for a period of fi ve years. After 5 years, cash fl ows are extrapolated using the estimated growth rates indicated below. The growth rate does not exceed the average long-term growth rate for the different businesses in which the CGUs operate.

(b) Key assumptions used in calculating value in use

Thousands of Euros Construction segment 2010 2009Allocated goodwill in thousands of Euros 17,591 17,591Growth rate1 0-5% - 1% 1%Discount rate2 9.09 – 11.89% 8.98%-10.18%

1 Weighted average growth rate used to extrapolate cash fl ows beyond the budgeted period.

2 Discount rate before tax applied to cash fl ow projections.

These assumptions have been used to analyse each CGU within the construction business segment.

Management determined the budgeted gross margin based on past returns and the foreseeable development of the market. The weighted average growth rates are consistent with the forecasts included in industry reports. The discount rates used are pre-tax values and refl ect specifi c risks related to the relevant segments.

No impairment losses relating to the aforementioned goodwill have come to light as a result of this analysis.

Packaging segment goodwill almost entirely corresponds to business combinations carried out in 2010. The Group has therefore not considered it necessary to test for impairment.

10. INVESTMENT PROPERTY

Details of investment property and movement during the year are as follows:

Thousands of Euros BuildingsCost at 1 January 2010 2,546Additions 377Disposals (213)Cost at 31 December 2010 2,710Accumulated depreciation at 31 December 2010 (125)Depreciation (123)Accumulated depreciation at 31 December 2010 (248)Carrying amount at 31 December 2010 2,462

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Thousands of Euros BuildingsCost at 1 January 2009 2,295Transfers 251Cost at 31 December 2009 2,546Accumulated depreciation at 31 December 2009 (60)Depreciation (65)Accumulated depreciation at 31 December 2009 (125)Carrying amount at 31 December 2009 2,421

(a) Insurance

The Group has contracted insurance policies to cover the risk of damage to its investment property. The coverage of these policies is considered suffi cient.

11. OPERATING LEASES – LESSEE

The Group leases certain warehouses, premises, industrial installations and “Rent to Rent” operations with fork-lifts from third parties under operating leases.

Future minimum payments under non-cancellable operating leases are as follows:

Thousands of Euros 2010 2009Less than one year 2,736 2,266One to fi ve years 18,076 5,678Over fi ve years 1,094 33 21,906 7,977

Operating lease instalments recognised as expenses for 2010 amount to Euros 2,354 thousand (Euros 2,832 thousand in 2009).

12. FINANCE LEASES – LESSEE

The Group has mainly leased land and buildings under fi nance leases:

Thousands of Euros 2010 2009Cost 18,127 22,101Accumulated depreciation (1,528) (1,421)Carrying amount at 31 December 16,599 20,680

The instalments paid in 2010 and 2009 amount to Euros 1,529 thousand and Euros 2,321 thousand, respectively.

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Details of minimum payments and the present value of fi nance lease liabilities, by maturity, are as follows:

Thousands of Euros 2010 2009 Minimum Present Minimum Present payments Interest value payments Interest valueLess than one year 2,817 (76) 2,741 2,078 (284) 1,794One to fi ve years 7,530 (1,557) 5,973 5,409 (1,581) 3,828Over fi ve years 12,352 (3,390) 8,962 18,311 (3,757) 14,554Less current portion (2,817) 76 (2,741) (2,078) 284 (1,794)Total non-current 19,882 (4,947) 14,935 23,720 (5,338) 18,382 (note 22) (note 22)

Finance lease liabilities are effectively secured as the rights on the leased assets revert to the lessor in the event of default.

13. OPERATING LEASES – LESSOR

The Group has certain items of property, plant and equipment leased to third parties under operating leases, the carrying amount of which at 31 December 2010 amounts to Euros 256,864 thousand (Euros 221,905 thousand at 31 December 2009).

Lease contracts primarily relate to rental materials of scaffolding and fork-lifts, which are included under other property, plant and equipment. The duration of scaffolding contracts rarely exceeds six months, although they may be cancelled at any time.

Future minimum payments collectable under non-cancellable fork-lift operating leases are as follows:

Thousands of Euros 2010 2009Less than one year 10,679 11,220One to fi ve years 15,233 14,197Over fi ve years 170 20 26,082 25,437

14. AVAILABLE-FOR-SALE FINANCIAL ASSETS AND OTHER CURRENT AND NON-CURRENT FINANCIAL ASSETS

Details of available-for-sale fi nancial assets and other fi nancial assets at 31 December are as follows:

Thousands of Euros Non-current Current 2009 2008 2009 2008Available-for-sale fi nancial assets Equity instruments at fair value 10,870 10,729 - -Total 10,870 10,729 - -Debt securities - - 31,010 -Other fi nancial assets at cost or amortised cost

Loans and other receivables 24 93 224 18 Debt instruments 14,594 14,486 812 2,289 Guarantee deposits and other fi nancial assets 10,251 4,647 4,435 3,554 Less impairment (15) (332) - -

Total 24,854 18,894 36,481 5,861Total fi nancial assets 35,724 29,623 36,481 5,861

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Details of debt and equity instruments are as follows: Thousands of Euros 2010 2009Equity instruments at fair value

Caja Laboral 10,870 10,729 10,870 10,729Debt instruments

Mondragón Inversiones, S,P,E,, S, Coop, 13,409 13,320Other contributions 1,185 1,166

14,594 14,486Total 25,464 25,215

The Group classifi es its investment in Caja Laboral as an equity instrument at fair value and recognises its investment based on the cost of acquisition (monetary contribution), to which it adds the returns it receives each year and which may not be recovered until the Group transfers its investment to another cooperative member of Caja Laboral, to the Caja Laboral itself or to a new member which has been accepted by Caja Laboral. The Group considers that the accumulated returns plus the initial redeemable contribution constitutes a reliable fair value as it refl ects the value at which the contribution could be redeemed by the member upon leaving.

The investment in Caja Laboral has generated returns of Euros 141 thousand in 2010 (Euros 485 thousand in 2009) and accrued interest of Euros 782 thousand (Euros 534 thousand in 2009), which are recorded under fi nance income in the combined income statement.

Debt instruments largely correspond to those considered as equity instruments in the aforementioned cooperative companies in accordance with prevailing legislation. These instruments are remunerated by agreement at the general assemblies of the corresponding cooperatives.

Given that these instruments will be settled in the event that these cooperative entities leave the Group, and that they are considered equity instruments, as mentioned in the preceding paragraph, they are presented as non-current debt instruments.

No related income from these debt instruments was recognised in 2010 and 2009.

Debt securities at 31 December 2010 consist of several deposits made by the companies that make up the ULMA Group which earn annual interest at market rates. Accrued income in 2010 was not signifi cant.

Net gains or losses from other fi nancial assets recognised at cost or amortised cost are not signifi cant.

15. DERIVATIVE FINANCIAL INSTRUMENTS

Details of derivative fi nancial instruments at 31 December are as follows:

Fair values 2010 Assets Liabilities Non-Current Current Non-Current CurrentDerivatives held for trading Forward exchange contracts - 187 61 809Hedging derivatives

Interest rate swaps 3 14 1,097 192 Foreign currency futures - 99 - -

Total traded on OTC markets 3 300 1,158 1,001

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Fair values 2009 Assets Liabilities Non-Current Current Non-Current CurrentDerivatives held for trading Forward exchange contracts - 433 - 385Hedging derivatives

Interest rate swaps 95 - 2,255 -Total traded on OTC markets 95 433 2,255 385

(a) Interest rate swaps

The Group uses derivative instruments on variable to fi xed interest rate “swaps” with fi xed rate values ranging from 1.76% to 3.75% to manage its exposure to interest rate fl uctuations, primarily in relation to its bank loans.

The fair value of fi nancial swaps is based on the market values of equivalent derivative fi nancial instruments at the combined balance sheet date. The valuation is classifi ed as level 2 in accordance with the hierarchy established in IFRS 7.

(b) Forward exchange contracts

To manage its exchange risks on fi rm sale transactions and future purchases, the Group has entered into forward exchange contracts in the principal markets in which it operates. However, despite the economic hedging provided by these contracts, the Group does not apply hedge accounting to these derivatives owing to the diffi culty of evaluating their effectiveness under IFRS.

The fair values of these forward contracts have been estimated through cash fl ow discounting using forward exchange rates available in public databases. The valuation is classifi ed as level 2 in accordance with the hierarchy established in IFRS 7.

The gains and losses resulting from measuring or settling these contracts are taken to fi nancial results for the year.

(c) Cash fl ow hedges

The total amount of cash fl ow hedges recognised in equity is as follows:

Thousands of Euros Expense 2010 2009Interest rate swaps (433) (1,354)Foreign currency futures (54) -Total (487) (1,354)

The total amount of cash fl ow hedges which has been transferred to combined profi t and loss is as follows:

Thousands of Euros 2010 2009Finance expense 1,415 370

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16. TRADE AND OTHER RECEIVABLES

Details of trade and other receivables at 31 December are as follows:

Thousands of Euros 2010 2009Trade receivables 262,883 261,590Other receivables and receivables from personnel 6,223 4,806Receivables from public entities 8,764 7,722 277,870 274,118

Impairment allowances for default (36,324) (35,995)

Total 241,546 238,123

The carrying amount of trade and other receivables does not differ signifi cantly from the fair value thereof.

Movement in the provision for impairment and uncollectibility for the years ended 31 December 2010 and 2009 is as follows:

Thousands of Euros 2010 2009Balance at 1 January 35,995 26,298

Additions to the combined group - 39Charge for the year (note 31) 11,552 13,617Write-offs (11,618) (3,498)Reversals (536) -Conversion differences 931 (461)

Balance at 31 December 36,324 35,995

Exposure to credit risk and valuation allowances for bad debts are described in note on risk management policy (see note 4).

17. INCOME TAX

The companies that comprise the ULMA Group fi le annual income tax returns. The standard rate of tax is 20%, which may be reduced by certain credits for investment. Due to its status as a specially protected cooperative, the Parent company is entitled to the following tax benefi ts:

(a) The taxable portion of profi ts which must be transferred to the mandatory reserve fund is reduced by 50%.

b) Deductible expenses are considered to be, inter alia, the obligatory amounts destined for the Education, Training and Promotion Fund and interest accrued on members’ contributions to equity within certain limits established in Local Law 2/1997 of 22 May 1997 governing cooperative tax regimes.

(c) Contributions by the Company to intercooperative cooperation institutions, which have been previously recognised by the taxation authorities and which are used to fi nancially assist, promote or develop cooperatives, are also deemed tax deductible.

d) As a result of its specially protected status, the Cooperative’s total tax liability may be reduced by 50%.

ULMA Group companies fi le consolidated tax returns.

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Details of deferred tax assets and liabilities at 31 December are as follows:

Thousands of Euros 2010 2009 Assets Liabilities Netos Net Liabilities NetProperty, plant and equipment 4,875 (3,504) 1,371 4,646 (3,011) 1,635Inventories 1,002 - 1,002 887 - 887Goodwill 113 (706) (593) 113 (660) (547)Trade and other receivables 202 - 202 96 - 96Available-for-sale fi nancial assets - (554) (554) - (538) (538)Financial assets held for trading 121 (6) 115 212 (8) 204Bonds, loans and other interest-bearing liabilities - (1,110) (1,110) 3 (426) (423)Financial debt instruments 64 (9) 55 289 (86) 203Provisions 3,166 (929) 2,237 2,235 (331) 1,904Total deferred tax assets/liabilities 9,543 (6,818) 2,725 8,481 (5,060) 3,421

Tax loss carryforwards and deductions 15,351 - 15,351 14,366 (8) 14,358Net assets and liabilities 24,894 (6,818) 18,076 22,847 (5,068) 17,779

Details of the income tax expense at 31 December are as follows:

Thousands of Euros 2010 2009Current tax

Present year 6,297 3,910Prior year adjustments (34) -

10,870 10,729Deferred tax

Source and reversal of temporary differences 491 447Tax credits 285 (1,452)

7,039 2,905

Deferred income tax in relation to items recognised directly in equity comprises available-for-sale fi nancial assets and fi nancial assets held for trading for amounts of Euros 16 thousand and Euros 91 thousand, respectively.

The Group has recognised deferred tax assets and liabilities, the amounts and reversal periods of which are shown below:

Thousands of Euros 2010 2009 Assets Liabilities Assets LiabilitiesLess than one year 3,317 (1,632) 4,614 (2,731)More than one year 21,577 (5,186) 18,233 (2,337) 24,894 (6,818) 22,847 (5,068)

At 31 December 2010 the companies that form part of Grupo Cooperativo ULMA have available deductions of Euros 46,429 thousand (Euros 40,210 thousand at 31 December 2009).

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Details of the amounts and reversal periods of deductions available to Grupo Cooperativo ULMA companies are as follows:

Year originated 2010 2009 Final year2001-2003 11,364 11,364 2016-20182004 3,849 3,849 20192005 5,718 5,718 20202006 8,436 8,436 20212007 3,204 3,204 20222008 8,458 8,458 20232009 2,700 2,700 20242010 2,700 - 2025 46,429 43,729

Details of the amounts and reversal periods of tax loss carryforwards available to Grupo Cooperativo ULMA companies are as follows:

Year Thousands of Euros Final year2008 8,363 20232009 22,032 20242010 14,320 2025 44,715

Deferred tax assets in respect of tax loss carryforwards and other deductions are recognised to the extent that the corresponding tax credits are expected to be applied against future taxable income based on the forecast business plan.

Due to the treatment permitted by fi scal legislation of certain transactions, additional tax liabilities could arise in the event of inspection. In any event, the directors of ULMA group companies do not consider that any such contingencies that could arise would have a signifi cant effect on the combined fi nancial statements taken as a whole.

18. INVENTORIES

Details of inventories at 31 December are as follows:

Thousands of Euros 2010 2009

Goods for resale 7,973 6,000Raw materials and other supplies 42,627 42,597Work in progress 41,282 28,759Finished goods 45,096 47,057Advances to suppliers 5,539 1,640Reduction in cost value (12,145) (5,333)

130,372 120,720

(a) Insurance

The Group’s companies have contracted insurance policies to cover the risk of damage to its inventories. The coverage of these policies is considered suffi cient.

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19. CASH AND CASH EQUIVALENTS

Details of cash and cash equivalents at 31 December are as follows:


Cash in hand and at banks 37,639 21,996Current bank deposits 5,235 4,003

42,874 25,999

The average effective interest rate applied to current bank deposits in 2010 and 2009 was a market rate.

Current bank deposits comprise investments of surplus cash which mature in less than three months.

20. EQUITY

Details of combined equity and movement during the year are shown in the statement of changes in equity.

(a) Members’ contributions

Members’ contributions mainly consist of voluntary and mandatory contributions made by worker members and collaborators, patronage returns on the distribution of profi t, capitalisation of interest on contributions and the capitalisation of revaluation reserves, when distributable, as established in relevant legislation. Members’ contributions also include Euros 5.5 million from collaborator member Mondragón Inversiones Sociedad de Promoción de Empresas, S. Coop. (Mondragón Inversiones). Reimbursement of these contributions may be unconditionally refused by the cooperatives.

Each year the general assembly of members approves the mandatory contributions to be made and the amount payable by new members, which at 31 December 2010 and 2009 amount to Euros 11 thousand and Euros 2 thousand, respectively, and the annual interest rate applicable thereto, which is accrued within the limits set out in prevailing legislation and internal regulations and agreements. Payment on members’ contributions is dependent on the existence of net profi t or freely distributable reserves.

During 2010 members have accrued interest of Euros 8,828 thousand (Euros 5,728 thousand in 2009) in respect of interest on members’ contributions and other funds, which has been recognised as a decrease in equity.

At 31 December 2010 members’ contributions of Euros 292 thousand are payable (Euros 329 thousand at 31 December 2009).

Movement in contributions in 2010 and 2009 is as follows:


At 1 January 158,262 162,583Contributions 1,615 1,877Disposals (10,629) (9,244)Application of prior year’s profi t/loss 139 1,788Capitalisation of interest on capital contributions 4,380 4,184Transfers to capitalised funds (capital) (580) -Transfers to capitalised funds (fi nancial liabilities) (258) (2,926)

152,929 158,262

In 2009 ULMA C y E, S. Coop. approved the issue of new subordinated fi nancial contributions. In this regard, certain cooperative members requested part of their capital to use it to acquire these contributions. A total of Euros 2,926 thousand was transferred from capital for the acquisition of these contributions.

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The Group’s objectives in relation to capital management are to safeguard its capacity to continue as a going concern and therefore continue to provide returns to members and benefi t other stakeholders and maintain an optimum capital structure to reduce the cost of capital.

In order to maintain or adjust its capital structure, the Group can adjust the amount of dividends to be paid to or capitalised for members (interest and returns on capital contributions and subordinated fi nancial contributions (SFC)), attract additional funds in the market through the issue of SFC, accept voluntary contributions from worker members or dispose of assets to reduce debt.

The ULMA Group controls its capital structure based on the leverage ratio. This ratio is calculated as net debt divided by total equity. Members’ contributions and issues of SFC are considered for these purposes, irrespective of whether they are classifi ed as equity or liabilities, as their characteristics of perpetuity and subordination mean they perform the same function.

The structure of the combined capital of the ULMA Group is detailed in the table below, in thousands of Euros:


Total liabilities 636,781 582,702Less: worker members’ and collaborators’ contributions and SFC (note 23) (2,931) (10,797)Liabilities considered 633,850 571,905Equity considered 384,006 386,264Ratio: equity / liabilities 61% 68%

(b) Subordinated fi nancial contributions (SFC) or capitalised funds

Subordinated fi nancial contributions are issued in accordance with article 57.5 of Basque Country Law 4/1993 of 24 June 1993 governing cooperatives, as set out in Law 1/2000 of 29 June 2000.

At 31 December 2010 subordinated fi nancial contributions amounted to Euros 18,625 thousand (Euros 18,431 thousand in 2009; Euros 9,500 thousand was considered to be an equity instrument and the remainder, due to it characteristics, was included under fi nancial liabilities payable to members), of which Euros 10 million is subscribed by Mondragón Promoción S.P.E., S.A. (Euros 9.5 million in 2009 subscribed by Mondragón Desarrollo S.P.E., S.A.) and the remainder consists of issues subscribed by members.

During 2010 Mondragón Desarrollo S.P.E., S.A. exercised its redemption right and, consequently, ULMA C y E, S. Coop. paid out Euros 10,210 thousand (Euros 9,500 thousand as payment and Euros 710 thousand in the form of redemption premium).

On 14 June 2010 ULMA C y E, S. Coop. entered into a new capital investment agreement with Mondragón Promoción, S.A. for an amount of Euros 10,000 thousand.

At 31 December 2010 and 2009 no interest has been accrued on the contributions of Mondragón Promoción, S.P.E. and no interest was accrued in 2010 or 2009 on the contributions of Mondragón Desarrollo, S.P.E.

(c) Mandatory reserve fund

In accordance with applicable Basque Country legislation governing cooperatives, a minimum of 30% of the net surplus for each year, after taxes and amounts allocated to offset prior years’ losses, is to be appropriated to the mandatory reserve fund and the Education, Training and Promotion Fund in the proportion of a minimum of 20% and 10%, respectively. In the event the mandatory reserve fund does not reach 50% of members’ funds, the minimum contribution made to the Education, Training and Promotion Fund may be reduced by half.

The mandatory reserve fund is not distributable to members. This fund comprises percentage appropriations made as explained above, reductions to mandatory contributions in the event of loss of membership and

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income earned, in addition to the discretionary amounts agreed at the general assembly in accordance with article 67 of the aforementioned law governing cooperatives.

(d) Special reserve fund and extraordinary reserve fund

The special reserve fund and the extraordinary reserve fund are voluntary funds which are not distributable to members, except in the event of liquidation of the Cooperative and for payment on members’ contributions, as well as to offset losses.

(e) Capital contribution reserve fund

This is a reserve fund set up to guarantee the repayment of the Euros 9.5 million contribution made by Mondragón Desarrollo S.P.E. in 2004, which was repaid in 2010. This fund is freely distributable.

(f) Non-controlling interests

Details by company of the balances at 31 December 2010 and 2009 are as follows:


ULMA Construcción Polska, S,A, 16,464 15,335ULMA Packaging Systems, Inc, 2,729 -ULMA Cofrage Rumania 160 58Integral Packaging Solution, S,L, 151 296Hurbildu, N,V, 188 -Pick To Light Systems, S,L: 151 139Centro Man Norte, S,A, 744 664Centro Man Alquiler, S,L, 39 98ULMA Safe Hadling Equipment, S, Coop, 582 -Lazkao Forging, S,L, 1,401 -

22,609 16,590

(g) Other reserves

These reserves are freely distributable except for losses for the year. Details of other reserves and movement during the period are included in Appendix II, which forms an integral part of this note.

21. BONDS, LOANS AND OTHER INTEREST-BEARING LIABILITIES

Details of current and non-current fi nancial liabilities at 31 December are as follows:

Thousands of Euros Non-current Current 2010 2009 2010 2009Financial liabilities – loans and borrowings(note 22) 205,245 235,722 171,225 120,779Other fi nancial liabilities (note 25) 29,273 22,571 11,406 11,099 234,518 258,293 182,631 131,878

The carrying amount of these fi nancial liabilities recognised in the combined balance sheet at cost or amortised cost does not differ signifi cantly from the fair value thereof.

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22. FINANCIAL LIABILITIES – LOANS AND BORROWINGS

Details of fi nancial liabilities from loans and borrowings at 31 December are as follows:

Thousands of Euros Non-current Current 2010 2009 2010 2009Loans 188,823 217,340 103,746 55,026Discounted notes and export advances - - 42,447 60,769Other loans and credit facilities 1,487 - 21,145 2,430Finance leases (note 12) 14,935 18,382 2,741 1,794Accrued interest - - 1,146 760 205,245 235,722 171,225 120,779

Loans generally accrue interest at a variable percentage indexed to Euribor.

The companies that form part of Gupo Cooperativo ULMA have several credit facilities and discount lines at 31 December, the accumulated amounts of which are as follows:

Thousands of Euros Drawn down Limit 2010 2009 2010 2009Credit facilities 13,268 10,849 26,000 20,330Discount lines 33,869 25,765 68,921 67,600 47,137 36,614 94,921 87,930

Loans accrue interest at market rates indexed to Euribor.

Details by maturity of non-current loans at 31 December 2010 and 2009 are as follows:

Thousands of EurosMaturity 2010 20092010 - 55,0262011 103,746 70,8132012 79,262 61,3422013 53,344 85,1852014 and thereafter 56,217 - 292,569 272,366Less current portion (103,746) (55,026)Total non-current 188,823 217,340

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At 31 December the carrying amount of current and non-current group loans and borrowings is denominated in the following currencies:

Thousands of Euros 2010 2009Euro 303,651 286,784Zloty (Poland) 53,118 58,391Chilean Peso 2,943 2,555Renminbi-Yuan (China) - 397US Dollar 5,591 1,047Australian Dollar 182 129Peruvian New Sol 7,249 6,869Rumanian Ron 32 322Mexican Peso 5 7Brazilian Real 3,650 -Argentine Peso 49 - 376,470 356,501

Net losses and gains on these fi nancial liabilities consist of fi nance expenses, which at 31 December 2010 amount to Euros 9,802 thousand (Euros 13,339 thousand at 31 December 2009) (see note 33).

The companies that form part of Gupo Cooperativo ULMA have extended guarantees of Euros 4,800 thousand and USD 810 thousand to subsidiaries to cover credit facilities granted by fi nancial entities at 31 December 2010 (Euros 4,500 thousand at 31 December 2009).

The directors of ULMA C y E, S. Coop. consider remote the possibility of having to honour any of the aforementioned guarantees.

23. FINANCIAL LIABILITIES – MEMBERS

Details of this caption at 31 December are as follows: Thousands of Euros Non-current Current 2010 2009 2010 2009Subordinated fi nancial contributions (note 20) 2,124 - 807 10,797Interest on contributions - - 411 6,840Other balances payable to members 9,272 6,010 7,897 4,674 11,396 6,010 9,115 22,311

The carrying amount of these fi nancial liabilities recognised in the consolidated balance sheet at cost or amortised cost does not differ signifi cantly from the fair value thereof.

Other balances payable to members comprise mandatory contributions of former members, following approval of their withdrawal from the Cooperative by the General Assembly. These contributions are repayable within a maximum period of fi ve years and accrue interest at the statutory interest rate (see note 33).

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24. TRADE AND OTHER PAYABLES

Details of trade and other payables at 31 December are as follows:

Thousands of Euros 2010 2009Trade payables 105,707 88,079Other payables

Salaries payable 12,904 10,356Public entities 11,008 6,879Advances from customers 28,790 14,981Other payables 7,142 12,222

165,551 132,517

25. OTHER FINANCIAL LIABILITIES

Details of other fi nancial liabilities at 31 December are as follows:

Thousands of Euros 2010 2009 Non-current Current Total Non-current Current TotalInterest-free loans 12,809 4,880 17,689 14,537 2,368 16,905Deferrals of payment 4,791 1,321 6,112 5,579 466 6,045Integral Packaging Solutions, S,L, (note 6) 685 703 1,388 1,388 631 2,019Ekarpen loan 10,000 - 10,000 - - -Other 988 4,502 5,490 1,067 7,634 8,701(note 21) 29,273 11,406 40,679 22,571 11,099 33,670

Interest-free loans comprise loans received from offi cial bodies repayable with subsidised interest, primarily relating to research and development activities. Final maturity of these loans is between 15 April 2011 and 30 June 2025 (15 April 2011 and 30 October 2017 in 2009).

In 2009 the Gipuzkoa taxation authorities granted ULMA C y E, S. Coop. a deferral on the payment of personal income tax and Value Added Tax for the period between February 2009 and January 2010 for an accumulated amount of Euros 6,650 thousand. These debts accrue annual interest at market rates.

The Ekarpen loan was extended by Ekarpen SPE, S.A. It matures on 1 June 2017 and accrues annual interest at market rates.

26. PROVISIONS

Details of other provisions and their classifi cation between current and non-current at 31 December are as follows:

Thousands of Euros Non-current Current 2010 2009 2010 2009Provision for liabilities 1,856 934 4,208 1,673Provision for tax risks 2,798 2,613 - -Provision for ETPF 562 1,635 500 -Other provisions 687 1,629 3,531 4,095Total 5,903 6,811 8,239 5,768

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Movement in provisions in 2010 and 2009 is as follows:

Thousands of Euros Provision for Provision for Other liabilities tax risks ETPF provisions TotalAt 1 January 2010 2,607 2,613 1,635 5,724 12,579Charges 3,455 185 262 751 4,653Applications and reversals (729) - (835) (2,288) (3,852)Other movements 731 - - 31 762At 31 December 2010 6,064 2,798 1,062 4,218 14,142

Thousands of Euros Provision for Provision for Other liabilities tax risks ETPF provisions TotalAt 1 January 2009 2,135 2,691 2,640 5,065 12,531Charges 1,032 - 71 923 2,026Applications and reversals 63 - (1,076) (878) (1,891)Other movements 188 (78) - (197) (87)Transfers (811) - - 811 -At 31 December 2009 2,607 2,613 1,635 5,724 12,579

(a) Provision for liabilities

The Group makes provision for the estimated amount necessary to adequately cover probable or defi nite liabilities deriving from contingencies and/or obligations of an indeterminate nature.

(b) Provision for tax risks

The provision for taxes covers tax risks deriving from claims.

(c) Contribution to Cooperative Education and Promotion

The Contribution for Cooperative Education and Promotion is legally protected from seizure and, in addition to the appropriations foreseen in the Group’s articles of association, comprises fi nes and other disciplinary sanctions imposed by the Cooperatives on their members. The portion of the fund which has not been applied must be converted, within the fi nancial year following that in which the appropriation is made, into government debt securities issued by the Autonomous Region of the Basque Country, the fi nancial yield of which will be applied to the same end. These securities may not be pledged or used as collateral for loans or credit accounts.

Charges to the Contribution for Cooperative Education and Promotion must be used, among other purposes, to train and educate members and workers in cooperative principles and values or in matters relating to the work and other activities of cooperatives, and to promote intercooperative relations, cultural, professional and welfare activities, and the cooperative movement.

(d) Contingencies

The Group has contingent liabilities for bank and other guarantees related with its normal business operations amounting to Euros 11,405 thousand (Euros 18,579 thousand in 2009). Parent company management does not expect any signifi cant liabilities to arise from these guarantees.

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27. ENVIRONMENTAL INFORMATION

The costs incurred in acquiring machinery, installations and other assets to protect and improve the environment are considered as investments in property, plant and equipment. Environmental expenses not related to the purchase of property, plant and equipment are recognised in the income statement in the year in which they are incurred.

The Group has not received any environment-related grants in 2010 or 2009.

At 31 December 2010 and 2009 the directors of the parent companies consider that no signifi cant contingencies exist concerning possible litigation, indemnities or other items connected with the environment and, accordingly, the Group has not made any provision in this regard.

28. GOVERNMENT GRANTS

Movement in outright government grants has been as follows:

Thousands of Euros 2010 2009Balance at 1 January 7,936 4,652Grants received during the year 1,905 4,415Capital grants taken to income (note 29) (1,070) (1,080)Other movements (67) (51)Balance at 31 December 8,704 7,936

29. OTHER INCOME

Details of other income at 31 December are as follows:

Thousands of Euros 2010 2009Revenue from the rendering of services 1,766 2,035Government grants (note 28) 1,070 1,080Operating grants 3,169 6,444Gain on disposal of property, plant and equipment 1,218 2,963Recovery of bad debts eliminated from the balance sheet 1,655 -Reversal of impairment of assets 66 -Other income 8,457 6,311 17,401 18,833

30. RAW MATERIALS AND CONSUMABLES USED

Details of raw materials and consumables used at 31 December are as follows:

Thousands of Euros 2010 2009Purchases and other goods consumed 259,831 249,964Change in inventories 2,224 (855)Subcontracted work 6,489 4,411 268,544 253,520

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31. OTHER EXPENSES

Movement in other expenses in 2010 and 2009 is as follows:

Thousands of Euros 2010 2009Operating lease expenses 8,258 6,333Research and development costs 1,227 1,855Repairs and maintenance 4,085 6,670Services received 31,608 23,656Transport 26,773 31,834Insurance premiums 3,104 3,652Advertising and publicity 4,788 4,932Supplies 13,460 11,797Local taxes 7,273 4,362Total other operating expenses 100,576 95,091

Losses on the sale of property, plant and equipment 912 1,121Impairment losses on property, plant and equipment - 173Impairment losses and default on trade and otherreceivables (note 16) 11,552 13,617Changes in other trade provisions 3,840 7,031Other expenses 24,510 17,660Total other gains and losses 40,814 39,602 141,390 134,693

32. PERSONNEL EXPENSES

Details of personnel expenses during 2010 and 2009 are as follows:

Thousands of Euros 2010 2009Wages and salaries 131,281 130,907Termination benefi ts 8,084 1,638Employee benefi ts expense 20,939 21,720Other 3,083 1,299 163,387 155,564

The average headcount of companies belonging to Grupo Cooperativo ULMA in 2010 was 2,184 employees (2,220 in 2009).

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33. FINANCE INCOME AND EXPENSES

Details of fi nance income and expenses are as follows:

Thousands of Euros 2010 2009Other fi nance income 3,810 2,721Available-for-sale assets (note 14) 782 534Net profi t on fair value adjustments to derivative fi nancialinstruments 750 6,278Exchange gains 11,027 9,291Total fi nance income 16,369 18,824

Finance expenses – loans and borrowings (note 22) 9,802 13,339Finance expenses – former member loans (note 23) 376 233Finance expenses – other fi nancial liabilities without explicit interest (note 26) 342 272Finance expenses – balances payable to members (note 23) 316 416Other fi nance expenses 2,365 4,473Net losses on fair value adjustments to derivative fi nancialinstruments 1,817 3,344Exchange losses 3,943 6,086Total fi nance expenses 18,961 28,163

34. INFORMATION ON LATE PAYMENTS TO SUPPLIERS, THIRD ADDITIONAL PROVISION OF LAW 15/2010 OF 5 JULY 2010: “REPORTING OBLIGATION”

The amendment to Spanish legal payment requirements made in the second half of 2010 has given rise to an outstanding payment to suppliers past due by more than the legal limit at 31 December of Euros 12,539 thousand. In many cases these balances relate to stockpiling and supplies necessary for the production of products for the export market, which are sold under payment conditions not affected by Spanish legislation.

35. RELATED PARTY TRANSACTIONS

The Group carries out major transactions, generally under conditions similar to market conditions, with certain investees and other companies belonging to the Mondragón Group, or which render centralised services, belonging to the Mondragón Group.

(a) Group transactions with related parties

A summary of group transactions with related parties is as follows:

Thousands of Euros 2010 2009Purchases 375 -Other operating, fi nance and extraordinary expenses - -Sales 1,753 603Other operating, fi nance and extraordinary income - 403 163,387 155,564

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(b) Group balances with related parties

A summary of group balances with related parties at 31 December 2010 and 2009 is as follows:

Thousands of Euros 2010 Other related Members parties TotalEquity instruments - 10,870 10,870Debt instruments - 13,409 13,409Total non-current assets - 24,279 24,279 Trade and other receivables - 373 373Total current assets - 373 373Total assets - 24,652 24,652Balances payable to members 11,396 - 11,396Total non-current liabilities 11,396 - 11,396Balances payable to members 9,115 - 9,115Trade and other payables - 43 43Total current liabilities 9,115 43 9,158Total liabilities 20,511 43 20,554

Thousands of Euros 2009 Other related Members parties TotalEquity instruments - 10,729 10,729Debt instruments - 13,320 13,320Total non-current assets - 24,049 24,049 Trade and other receivables - 1,771 1,771Total current assets - 1,771 1,771Total assets - 25,820 25,820Balances payable to members 6,010 - 6,010Total non-current liabilities 6,010 - 6,010Other fi nancial liabilities - 249 249Balances payable to members 22,311 - 22,311Trade and other payables - 110 110Total current liabilities 22,311 359 22,670

Total liabilities 28,321 359 28,680

(c) Profi t/(loss) contributed by each business

Details of the profi t/(loss) contributed by each business are as follows:

Thousands of Euros 2010 Attributable Minority to parent companies interestsULMA C y E, S, Coop, and subsidiaries

Construction business (8,660) 628Packaging business 3,584 (381)

ULMA Forja, S,Coop, 2,598 1ULMA Hormigón Polímero, S,Coop, 1,146 -ULMA Manutención, S,Coop, 694 51ULMA Agrícola, S,Coop, 203 -ULMA Conveyor Components, S,Coop, (122) - (557) 299

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Thousands of Euros 2009 Attributable Minority to parent companies interestsULMA C y E, S, Coop, and subsidiaries

Construction business (9,203) (269)Packaging business 1,120 -

ULMA Forja, S,Coop, (297) -ULMA Hormigón Polímero, S,Coop, 1,018 -ULMA Manutención, S,Coop, (578) 30ULMA Agrícola, S,Coop, (606) -ULMA Conveyor Components, S,Coop, (93) - (8,639) (239)

(d) Remuneration of and Balances with the Board of Governors and Other Information

The directors or members of the boards of governors of the companies comprising Grupo Cooperativo ULMA receive no remuneration in their capacity as such. However, as worker members they have received remuneration of Euros 2,360 thousand during the year ended 31 December 2010 (Euros 2,551 thousand in 2009), of which Euros 226 thousand (Euros 286 thousand in 2009) relates to 2008 gross interest monetarised in 2009 and Euros 17 thousand (Euros 300 thousand in 2009) to 2009 returns capitalised in 2010. The employee benefi ts expense relating to this remuneration has been recorded under personnel expenses.

At 31 December 2010 the companies comprising Grupo Cooperativo ULMA have no obligations with current or former governors in respect of pension plans or life insurance, nor have they extended any guarantees on their behalf.

Senior management of the companies comprising Grupo Cooperativo ULMA have received remuneration of Euros 4,166 thousand in 2010 (Euros 5,104 thousand in 2009), of which Euros 276 thousand (Euros 578 thousand in 2009) relates to 2008 gross interest monetarised in 2009 and Euros 46 thousand (Euros 810 thousand in 2009) to 2009 returns capitalised in 2010.

(e) Audit Fees

The fees and expenses invoiced by KPMG Auditores, S.L., auditors of the combined fi nancial statements of the Group, for audit services during the year ended 31 December 2010 amount to Euros 126 thousand and include the total fees relating to the 2010 audit (Euros 136 thousand in 2009), irrespective of the date of invoice.

Other KPMG Europe LLP Group companies have invoiced the Group fees and expenses for audit services amounting to Euros 31 thousand and Euros 29 thousand during the years ended 31 December 2010 and 2009, respectively.

Other companies related to KPMG International have invoiced the Group fees and expenses for audit services amounting to Euros 243 thousand and Euros 238 thousand during the years ended 31 December 2010 and 2009, respectively.

Other auditors have invoiced the Group fees and expenses for audit services amounting to Euros 283 thousand and Euros 240 thousand during the years ended 31 December 2010 and 2009, respectively.

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36. SUBSEQUENT EVENTS

At 31 December 2010 certain companies that form part of Grupo Cooperativo ULMA are in the process of refi nancing their debt. As part of the refi nancing process, on 24 February 2011 they entered into a long-term commercial loan agreement with fi nancial institutions for an amount of Euros 188,575 thousand.

This new loan has a grace period of two years, with repayments commencing on 1 April 2013. The loan matures on 1 May 2017 and accrues interest at market rates.

Also on 24 February 2011 and as part of the refi nancing process, a renewal agreement was signed modifying the economic terms of existing credit facilities. Through this agreement, the funding bodies undertake to maintain and renew current limits for a period of three years and the companies that have access to the credit facilities undertake to make drawdowns in proportion to the agreed limits.

During the term of the aforementioned contract, one of the borrowers jointly and severally undertakes to repay the loan principal and pay all interest, commissions and other items covered in the contract in relation to the individual amounts drawn down by each of the borrowers.

On 3 January 2011 a spin-off project was registered through which ULMA Manutención, S. Coop. (see note 1), which carries out the Handling Systems activity, was partially spun off from the Group. As part of this process, the fork-lift truck branch of activity was transferred en bloc to ULMA Servicios de Manutención, S. Coop., a newly created company which has been incorporated into Grupo Cooperativo ULMA.

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NOTES TO THE COMBINED FINANCIAL STATEMENTS.DETAILS OF SUBSIDIARIES AT 31 DECEMBER 2010


Company name Registered Activity Auditor Shareholding % % voting Consolidation address company interest rightsPackaging BusinessULMA Packaging Ltda. Brazil (i) Moreira & Asociados Auditores/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging Systems, Inc. USA (i) Malloy, Linch Bienvenue LLP/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullHarpak-ULMA Packaging LLC USA (i) Malloy, Linch Bienvenue LLP/(b) ULMA Packaing Systems, Inc. 56.00% 56.00% FullULMA Packaging Systems, (SA)(Propietary) Limited South Africa (i) DJ Conacher & Co. /(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging S.A.R.L. France (i) Sogeca/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging GMBH Germany (i) Eggert Und Partner/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging, S.A. Argentina (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging, S.A. de C.V. Mexico (i) Jesús Rodríguez González/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullGH N.V. Belgium (i) Unaudited Hurbildu N.V. 60.00% 60.00% FullULMA Packaging, Ltd. UK (i) Dafferns (b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging, S.R.L. Italy (i) Michele Pederzini/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging, Pty, Ltd. Australia (i) Johnston Rorke/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging Technological, S. Coop. Oñate (Spain) (ii) LKS Auditores, S.L./(a) ULMA C y E, S. Coop. 35.28% 100.00% FullULMA Packaging Polska Sp. Zo.o Poland (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Servicios de Packaging, S. Coop. Logroño (Spain) (iii) No auditada ULMA C y E, S. Coop. 49.00% 49.00% FullULMA Precinox S. Coop. Legazpia (Spain) (iv) No auditada ULMA C y E, S. Coop. 63.00% 63.00% FullULMA Packaging Ukraine, Ltd. Ukraine (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging, Sociedade Unipessoal, Lda. Portugal (i) Pedro Roque & Crisóstomo Real, SROC ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging S.R.L. Romania (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Packaging Rusia Russia (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00% FullIntegral Packaging Solution, S.L. La Rioja (Spain) (iv) Unaudited ULMA C y E, S. Coop. 80.00% 80.00% FullHurbildu N.V. Belgium (i) Unaudited ULMA C y E, S. Coop. 60.00% 60.00% FullULMA Packaging, B.V. The Netherlands (i) Accure Accountants B.V./(b) Hurbildu, N.V. 100.00% 100.00% FullGH, NV Belgium (i) Unaudited Hubildu, N.V. 100.00% 100.00% FullPhi-Pack, NV Belgium (i) Unaudited Hubildu, N.V. 100.00% 100.00% FullULMA Packaging Automation Limited UK (i) Unaudited ULMA C y E, S. Coop. 60.00% 60.00% Not consolidated

Construction BusinessULMA, S.A.R.L. France (v) Exco Cap Exper/b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Services, S.A.R.L. France (vi) Exco Cap Exper/b) ULMA, S.A.R.L. 100.00% 100.00% FullAlfre, S.L. Oñate (Spain) (vi) KPMG/(c) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Portugal – Cofragens eAndaimes, Lda. Portugal (v) KPMG/(a) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Chile Andamios yMoldajes, S.A. Chile (v) KPMG/(a) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Andamios y EncofradosArgentina, S.A. Argentina (v) Estudio Supertino/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Andaimes, Forma eEscoramentos, Ltda. Brazil (v) KPMG/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Form Works, Inc. USA (v) KPMG/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Encofrados Perú, S.A. Peru (v) PWC/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Betonschalungen und Gersute GMBH Germany (viii) KPMG/(a) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Construcción Polska, S.A. Poland (viii) KPMG/(a) ULMA C y E, S. Coop. 75.49% 75.49% FullAlpi, Spa. Italy (viii) Revisa, Srl/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullAlpi East, s.r.o. Slovakia (vii) Revisa, Srl/(b) Alpi, Spa. 100.00% 100.00% Full

APPENDIX I

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Bauma Ukrania Ukraine (v) KPMG/(b) ULMA Construcción Polska, S.A. 75.49% 75.49% FullBauma Rus Russia (v) KPMG/(b) ULMA Construcción Polska, S.A. 75.49% 75.49% FullULMA Cimbras y Andamios deMéxico, S.A. de C.V. Mexico (v) KPMG/(c) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Proyectos de Ejecución, S.L. Oñate (Spain) (ix) Unaudited ULMA C y E, S. Coop. 100.00% 100.00% GlobalNantong Hua Rong ScaffoldingIndustries. Co. Ltd. China (viii) Rugao Xinggaorui United CPA/(b) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Formworks UAE Llc Dubai (v) KPMG/(a) ULMA C y E, S. Coop. 100.00% 100.00% FullULMA Cofrage Rumania Romania (v) Unaudited ULMA C y E, S. Coop. 70.00% 100.00% Full ULMA Construcción Polska, S.A. 30.00% - ULMA Formworks Singapore Pte. Ltd. Singapore (v) TS Choo & Co./(a) ULMA C y E, S. Coop. 100.00% 100.00% GlobalULMA Constructión Systems Canada, Inc. Canada (v) KPMG/(b) ULMA C y E, S. Coop. 100.00% 100.00% Full

Wrought Iron BusinessIndustrias ULMA Venezolana, C.A. Venezuela (x) Ortega, Rodriguez Arrieta & Asociados ULMA Forja, S. Coop. 100.00% 100.00% GlobalLazkao Forging S.L. Lazkao (Spain) (x) Unaudited ULMA Forja, S. Coop. 60.00% 60.00% Full

Polymer Concrete BusinessBetao Polimere Lda. Portugal (xi) Unaudited ULMA Hormigón y Polímero, S. Coop. 100.00% 100.00% FullBeton Polímero Lda. France (xi) Unaudited ULMA Hormigón y Polímero, S. Coop. 100.00% 100.00% FullULMA Polimerbeton Sp. z.o.o. Poland (xi) Unaudited ULMA Hormigón y Polímero, S. Coop. 100.00% 100.00% Full

Maintenance BusinessPick to Light Systems, S.L. Zamudio (Spain) (xii) LKS Auditores, S.L. ULMA Manutención, S. Coop. 55.00% 55.00% FullULMA Handling Systems France, S.A.R.L. France (xii) Unaudited ULMA Manutención, S. Coop. 100.00% 100.00% FullUHSN, B.V. The Netherlands (xii) Accure Accountants, B.V. ULMA Manutención, S. Coop. 100.00% 100.00% FullLogistica de Armazons do Brasil, Ltda. Brazil (xii) Unaudited ULMA Manutención, S. Coop. 99.00% 99.00% FullCentro Man Norte, S.A. Madrid (Spain) (xii) Unaudited ULMA Manutención, S. Coop. 63.36% 63.37% FullCentro Man Alquiler, S.L. Madrid (Spain) (xii) Unaudited ULMA Manutención, S. Coop. 63.36% 63.36% FullULMA Safe Handling Equipment, S. Coop. Oñate (Spain) (xii) Zubizarreta Consulting, S.L. ULMA Manutención, S. Coop. 24.51% 24.51% FullEse Erre Centroamérica S.A.C.V. San Salvador (xii) Unaudited ULMA Manutención, S. Coop. 54.97% 54.97% Not consolidatedULMA Emplihadeiras Comercio Industrial LTDA Sao Paulo (xii) Unaudited ULMA Manutención, S. Coop. 95.00% 95.00% Not consolidated

Agricultural BusinessULMA México, S.A. de C.V. Mexico (xiii) Unaudited ULMA Agrícola, S. Coop. 100.00% 100.00% Not consolidated

Logistics Services BusinessProgramación y Desarrollo Eléctricos, S.L. Otxandio (Spain) (xiv) Gasso Auditores, SL. ULMA Servicios de Logística, S. Coop. 25.00% 25% Not consolidated

APPENDIX I

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annual accounts



Company name Registered Activity Auditor Shareholding % % voting address company interest rightsPackaging BusinessULMA Packaging Ltda. Brazil (i) Moreira & Asociados Auditores/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging Systems, Inc. USA (i) Pate, Cerqueda, Morgan, Gault & Comes, LLP. /(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging Systems, (SA)(Propietary) Limited South Africa (i) DJ Conacher & Co. /(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging S.A.R.L. France (i) Sogeca/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging GMBH Germany (i) Eggert und Partner/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging, S.A. Argentina (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging, S.A. de C.V. Mexico (i) Jesús Rodríguez González/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging, B.V. The Netherlands (i) Accure Accountants B.V./(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging, Ltd. UK (i) Dafferns (b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging, S.R.L. Italy (i) Michele Pederzini/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging, Pty, Ltd. Australia (i) Johnston Rorke/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging Technological, S. Coop. Oñate (Spain) (ii) Gassó Auditores/(a) ULMA C y E, S. Coop. 35.28% 100.00%ULMA Packaging Polska Sp. Zo.o Poland (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%ULMA Servicios de Packaging, S. Coop. Logroño (Spain) (iii) Unaudited ULMA C y E, S. Coop. 49.00% 49.00%ULMA Precinox S. Coop. Legazpia (Spain) (iv) Unaudited ULMA C y E, S. Coop. 63.00% 63.00%ULMA Packaging Ukraine, Ltd. Ucrania (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging, SociedadeUnipessoal, Lda. Portugal (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging S.R.L. Romania (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%ULMA Packaging Rusia Russia (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%EURL ULMA Conveyor Components France (i) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%Integral Packaging Solution, S.L. La Rioja (Spain) (iv) Unaudited ULMA C y E, S. Coop. 80.00% 80.00%

Construction BusinessULMA, S.A.R.L. France (v) Exco Cap Exper/b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Services, S.A.R.L. France (vi) Exco Cap Exper/b) ULMA, S.A.R.L. 100.00% 100.00%Alfre, S.L. Oñate (Spain) (vi) KPMG/(c) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Portugal – Cofragens e Andaimes, Lda. Portugal (v) KPMG/(a) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Chile Andamios y Moldajes, S.A. Chile (v) KPMG/(a) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Andamios y EncofradosArgentina, S.A. Argentina (v) Estudio Supertino/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Andaimes, Forma eEscoramentos, Ltda. Brazil (v) KPMG/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Form Works, Inc. USA (v) KPMG/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Encofrados Perú, S.A. Peru (v) PWC/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Betonschalungen und Gersute GMBH Germany (viii) KPMG/(a) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Construcción Polska, S.A. Poland (viii) KPMG/(a) ULMA C y E, S. Coop. 75.49% 75.49%Alpi, Spa. Italy (viii) Revisa, Srl/(b) ULMA C y E, S. Coop. 100.00% 100.00%Alpi East, s.r.o. Slovakia (vii) Revisa, Srl/(b) Alpi, Spa. 100.00% 100.00%Bepatech spol, s.r.o. Czech Republic (vii) Revisa, Srl/(b) Alpi, Spa. 70.00% 70.00%Bepatech Bratislava, s.r.o. Slovakia (vii) Revisa, Srl/(b) Alpi, Spa. 70.00% 70.00%ULMA System, S.A. Poland (v) KPMG/(a) ULMA Construcción Polska, S.A. 75.49% 75.49%Bauma Ukrania Ukraine (v) KPMG/(b) ULMA Construcción Polska, S.A. 75.49% 75.49%Bauma Rus Russia (v) KPMG/(b) ULMA Construcción Polska, S.A. 75.49% 75.49%ULMA Cimbras y Andamios deMéxico, S.A. de C.V. Mexico (v) KPMG/(c) ULMA C y E, S. Coop. 100.00% 100.00%

APPENDIX I

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annual accounts

ULMA Proyectos de Ejecución, S.L. Oñate (Spain) (ix) KPMG/(c) ULMA C y E, S. Coop. 100.00% 100.00%Nantong Hua Rong ScaffoldingIndustries. Co. Ltd. China (viii) Rugao Xinggaorui United CPA/(b) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Formworks UAE Llc Dubai (v) KPMG/(c) ULMA C y E, S. Coop. 100.00% 100.00%ULMA Cofrage Rumania Romania (v) Unaudited ULMA C y E, S. Coop. 70.00% 100.00% ULMA Construcción Polska, S.A. 30% ULMA Formworks Singapore Pte. Ltd. Singapore (v) Unaudited ULMA C y E, S. Coop. 100.00% 100.00%ULMA Construction Systems Canada, Inc. Canadá (v) Unaudited ULMA C y E, S. Coop. 100,00% 100,00%

Wrought Iron BusinessIndustrias ULMA Venezolana, C.A. Venezuela (x) Soto Romero & Asociados ULMA Forja, S. Coop. 100.00% 100.00%

Polymer Concrete BusinessBetao Polimero Lda. Portugal (xi) Unaudited ULMA Hormigón y Polímero, S. Coop. 100.00% 100.00%Beton Polímero Lda. France (xi) Unaudited ULMA Hormigón y Polímero, S. Coop. 100.00% 100.00%ULMA Polimerbeton Sp. z.o.o. Polonia (xi) Unaudited ULMA Hormigón y Polímero, S. Coop. 100.00% 100.00%

Maintenance BusinessPick to Light Systems, S.L. Zamudio (Spain) (xii) Gasso Auditores, S.L. ULMA Manutención, S. Coop. 55.00% 55.00%ULMA Handling Systems France, S.A.R.L. France (xii) Unaudited ULMA Manutención, S. Coop. 100.00% 100.00%UHSN, B.V. The Netherlands (xii) Accure Accountants, B.V. ULMA Manutención, S. Coop. 100.00% 100.00%Logistica de Armazons do Brasil, Ltda. Brazil (xii) Unaudited ULMA Manutención, S. Coop. 99.00% 99.00%Centro Man Norte, S.A. Madrid (Spain) (xii) Unaudited ULMA Manutención, S. Coop. 63.37% 63.37%Centro Man Alquiler, S.L. Madrid (Spain) (xii) Unaudited ULMA Manutención, S. Coop. 63.36% 63.36%ULMA Safe Handling Equipment, S. Coop. Oñate (Spain) (xii) Unaudited ULMA Manutención, S. Coop. 24.51% 24.51%

Agricultural BusinessULMA México, S.A. de C.V. Mexico (xiii) Unaudited ULMA Agrícola, S. Coop. 100.00% 100.00%

Logistics Services BusinessProgramación y Desarrollo Eléctricos, S.L. Otxandio (Spain) (xiv) Gasso Auditores, SL. ULMA Servicios de Logística, S. Coop. 25.00% 25%

APPENDIX I

/59

annual accounts


Activities (i) Sale of packing and packaging machinery.(ii) Research and development activities in packing and packaging machinery.(iii) Manufacture and sale of stainless steel and boiler-making components.(iv) Production and sale of packing and packaging machinery.(v) Rental, sale and assembly of products for the construction business.(vi) Assembly of products sold by parent companies.(vii) Rental, sale and assembly of auxiliary construction equipment.(viii) Manufacture, rental, sale and assembly of auxiliary construction equipment.(ix) Engineering activities for the construction business.(x) Manufacture and sale of fl anges, accessories and wrought iron parts.(xi) Activities related to equipment for construction in concrete, polymers and metals.(xii) Design, manufacture, assembly, sale and technical assistance services for maintenance equipment and services.(xiii) Sale of agricultural products.(xiv) Electrical projects, automated installations and related maintenance.

Observations

(a) Full scope audit of the annual accounts for the year.(b) Full scope audit of the fi nancial statements for the year.(c) Agreed procedures on the fi nancial statements for the year.

This Appendix forms an integral part of note 3 to the combined fi nancial statements, in conjunction with which it should be read.

APPENDIX I

/60

annual accounts

NOTES TO THE COMBINED FINANCIAL STATEMENTS.DETAILS OF AND MOVEMENT IN OTHER RESERVES AND RETAINED EARNINGS AT 31 DECEMBER 2010



Thousands of Euros

Members’ Mandatory Special Extraordinary contributions Other Total reserve fund reserve fund reserve fund reserve fund reservesBalance at 1 January 2010 98,896 12,580 3,404 6,333 81,192 202,405Change in reserves 2010 - - - - - -Application of 2009 loss (3,759) (488) 17 - (6,743) (10,973)Contributions 255 24 - - - 279Disposals - - - (710) (527) (1,237)Dividends - (3,613) (2,950) - - (6,563)Changes in equity holdings - - - - (183) (183)Other movements 4 - - - (1,132) (1,128)Balance at 31 December 2010 95,396 8,503 471 5,623 72,607 182,600

NOTES TO THE COMBINED FINANCIAL STATEMENTS.DETAILS OF AND MOVEMENT IN OTHER RESERVES AND RETAINED EARNINGS AT 31 DECEMBER 2009



Thousands of Euros

Members’ Mandatory Special Extraordinary contributions Other Total reserve fund reserve fund reserve fund reserve fund reservesBalances at 1 January 2009 101,393 27,448 4,813 6,333 70,571 210,558Change in reserves 2009 - - - - - -Distribution of 2008 profi t (2,071) (5,902) - - 6,370 (1,603)Contributions 166 - - - (48) 118Disposals (1) - - - (693) (694)Dividends - (4,316) (700) - (1,194) (6,210)Other movements (591) (4,650) (709) - 6,186 236Balances at 31 December 2009 98,896 12,580 3,404 6,333 81,192 202,405

This Appendix forms an integral part of notes 5 and 20 to the 2010 combined fi nancial statements, in conjunction with which it should be read.

APPENDIX II

/61

annual accountsN

OTE

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TH

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INA

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68,5

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367,

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105

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8,82

8

APPENDIX III

/62

annual accounts

APPENDIX III

NO

TES

TO T

HE

CO

MB

INED

FIN

AN

CIA

L ST

ATE

MEN

TS. S

EGM

ENT

REP

OR

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1 D

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BER

201

0 A

ND

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9.

Tho

usa

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s o

f Eu

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Sp

ain

Euro

pe

Asi

a, A

fric

a an

d O

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Am

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a Co

nsol

idat

ion

20

10

2009

20

10

2009

20

10

2009

20

10

2009

20

10

2009

Reve

nue

from

ext

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l cus

tom

ers

355,

660

374,

488

168,

062

161,

649

9,35

7 6,

481

80,1

73

34,8

17

613,

252

577,

435

Segm

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sset

s 72

7,94

5 69

8,20

5 21

4,39

5 21

0,81

8 1,

049

1,59

8 74

,467

47

,548

1,

017,

856

958,

169

Inve

stm

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in a

sset

s w

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dur

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of o

ver 1

yea

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,709

43

,026

32

,635

55

,925

8,

182

6,77

9 27

,955

33

,098

96

,481

13

8,82

8

This

App

endi

x fo

rms

an in

tegr

al p

art

of n

ote

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Garagaltza auzoa 51 - PK 22

20560 Oñati (Gipuzkoa)

Tel.: 943 25 03 00 - Fax: 943 78 09 17

www.ulma.com

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