QUEIROZ GALVÃO PARTICIPAÇÕES INDÚSTRIA E AGROPECUÁRIA S. A.

QUEIROZ GALVÃO PARTICIPAÇÕES INDÚSTRIA E AGROPECUÁRIA S. A.

2 MANAGERIAL REPORT To the Stockholders, In accordance with the by-laws, we are submitting for your consideration the annual report of the management, and the related financial statements for the year ended December 31, 2009, of Queiroz Galvão Participações Indústria e Agropecuária S. A. The Management is grateful to all those who contributed toward the results achieved, especially our team of collaborators for their hard work and dedication, to suppliers and service providers for their good quality and punctuality and to clients for their faith in our work. Rio de Janeiro, April 12th, 2010. BOARD OF DIRECTORS Advisory Council Roberto de Queiroz Galvão President Maurício José de Queiroz Galvão Vice President Fernando de Queiroz Galvão Counselor Executive Board André de Oliveira Câncio Sérgio de Lima Cavalcanti ACCOUNTANT Flávio de Castro e Souza CRC-RJ 60.913

3 C O N S O L I D AT E D B A L A N C E S H E E T S At December 31, 2009 and 2008 (in thousand of US dollars) CONSOLIDATED HOLDING COMPANY ASSETS 2009 2008 2009 2008 Current assets: Cash 598 1,208 28 26 Marketable securities 199 10,819 - - Trade accounts receivable 16,564 26,472 - - Inventories (note 5) 43,641 36,077 - - Taxes recoverable 36,683 30,650 - - Advance to supplier 12,573 35,692 - - Other accounts receivable 4,068 3,989 - - Total current assets 114,326 144,906 28 26 Non current assets: Judicial deposits 1,291 1,103 - - Subsidiary and associated companies (note 7) - - 171,981 119,320 Other investments (482) (428) - - Fixed assets (note 6) 217,039 159,709 - - Deferred assets 535 501 - - Total non current assets 218,383 160,884 171,981 119,320 See notes to financial statements. 332,709 305,790 172,009 119,346 (continued)

4 C O N S O L I D AT E D B A L A N C E S H E E T S At December 31, 2009 and 2008 (in thousand of US dollars) CONSOLIDATED HOLDING COMPANY LIABILITIES 2009 2008 2009 2008 Current liabilities: Loans and debentures (note 8) 72,257 107,909 - - Supplier 4,951 16,161 1,003 93 Fiscal and social obligations 658 4,668 - - Payroll and social securities 1,761 2,532 - - Dividends payable 8,441 8,442 - - Related parties 37,856 25 33,194 4,140 Other accounts payable 4,680 5,464 - - Total Current liabilities 130,604 145,200 34,197 4,233 Non Current liabilities: Loans and debentures (note 8) 38,297 25,117 - - Discount in consolidated investiments 25,996 20,359 - - Total Non Current liabilities 64,293 45,477 - - Shareholders equity: Capital stock (note 9) 68,882 51,321 68,882 51,321 Revaluation reserve 2,291 2,037 2,291 2,037 Profit reserve 66,639 61,755 66,639 61,755 137,812 115,113 137,812 115,113 332,709 305,790 172,009 119,346 See notes to financial statements.

5 C O N S O L I D AT E D S TAT E M E N T S O F I N C O M E CONSOLIDATED HOLDING COMPANY 2009 2008 2009 2008 Service income 112,595 220,348 - - Cost of services (92,281) (177,581) - - Gross profit 20,314 42,767 - - Operating income (expenses): Administrative (16,697) (19,238) (26) (6) Tax expenses (29) (19) (10) (7) Depreciation (130) (18) - - Equity in earnings - - (14,868) 16,201 Other 4,676 7,139 - - (12,180) (12,135) (14,904) 16,188 Financial income 9,443 14,420 - - Financial expenses (33,150) (30,518) (1,786) (3,253) (23,707) (16,098) (1,786) (3,253) Profit before income tax and social contribution (15,573) 14,534 (16,690) 12,935 Social contribution (1,117) (5) - - Income tax - (1,594) - - Net income for the year (16,690) 12,935 (16,690) 12,935 Earning per share (0.209) 0.162 Number of shares of capital stock 79,979,869 79,979,869 See notes to financial statements.

6 S TAT E M E N T S O F C H A N G E S I N S H A R E H O L D E R S E Q U I T Y PROFIT RESERVE CAPITAL STOCK REVALUATION RESERVE LEGAL RESERVE RETAINED EARNINGS TOTAL Balances at December 31, 2007 67,711 9,806 57,293-134,811 Gain on translation (16,390) (2,374) (53,065) 39,197 (32,633) Reversal on revaluation reserve - (5,395) - 5,395 - Net income for the year - - - 12,935 12,935 Destination of net income for the year: Unrealized profits reserve - - 56,880 (56,880) - Legal reserve - - 647 (647) - Balances at December 31, 2008 51,321 2,037 61,755-115,113 Gain on translation 17,561 697 4,884 16,247 39,389 Reversal on revaluation reserve - (443) - 443 - Net income for the year - - - (16,690) (16,690) Balances at December 31, 2009 68,882 2,291 66,639-137,812 See notes to financial statements.

7 S TAT E M E N T S O F C A S H F L O W CONSOLIDATED HOLDING COMPANY Cash flows from operating activities: 2009 2008 2009 2008 (Loss) for the year (16,690) 12,935 (16,690) 12,935 Adjustments for: Depreciation 17,929 8,967 - - Equity in earnings - - 14,868 (16,201) Interest expenses 23,707 16,098 1,786 3,253 24,946 37,999 (36) (13) Decrease (increase) in accounts receivable 9,908 16,072 - - Decrease (increase) in inventories (7,564) (5,762) - - Decrease (increase) in recoverable taxes (6,033) 5,265 - - Decrease (increase) in other accounts receivable 22,852 (39,430) - - Increase (decrease) in suppliers (11,210) 5,588 910 - Increase (decrease) in salaries, charges and tax obligations to pay (4,781) 1,071 - - Increase (decrease) in related parties 37,831 7,982 29,054 (398) Increase (decrease) in other trade accounts payable 4,852 (3,832) - - Cash flows from operating activities 70,801 24,955 29,928 (412) (-) Interests paid (33,150) (30,518) (1,786) (3,253) Net cash used in operating activities 37,651 (5,563) 28,142 (3,665) Cash flows used in investing activities (-) Additions in Fixed assets (75,294) (29,109) - - (-) Additions Subsidiary and Associated 54 (198) (67,529) 3,673 Interests received 9,443 14,420 - - Net cash used in investing activities (65,797) (14,887) (67,529) 3,673 Cash flows from financing activities Financing (22,472) 13,127 - - Net cash used in financing activities (22,472) 13,127 - - Increase in cash and cash equivalents (50,618) (7,323) (39,387) 8 Cash and cash equivalents, beginning of the year 12,026 25,534 26 24 Cash and cash equivalents, end of the year 797 12,026 28 26 Gain on translation (39,389) 6,185 (39,389) 6 Increase in cash and cash equivalents (50,618) (7,323) (39,387) 8 See notes to financial statements.

8 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S (A translation of the original report in Portuguese containing financial statements prepared in accordance with accounting practices generally accepted in Brazil) 1 > OPERATIONS The Queiroz Galvão Participações-Indústria e Agropecuária S.A. is a joint-stock private company, a whole owned subsidiary of Queiroz Galvão S.A. The Company was incorporated on February 01, 1998 as part of an ample corporate reorganization process of the Queiroz Galvão S.A. group which included new strategic plans and the realignment of operation by area of activity within that scenery the Company was created with the objective to increment the activities in the areas of industrialization and farming fields, though investments in the capital of other companies oriented to such activities. The investments and the respective activity areas are as follows: 2009 2008 PARTICIPATION Agropecuária Rio Arataú S.A 90.08% 90.08% Direct SIMASA - Siderúrgica do Maranhão S.A 94.65% 94.65% Direct Cia. Siderúrgica Vale do Pindaré 86.48% 86.48% Direct Queiroz Galvão Alimentos S.A. 91.68% 91.68% Direct EOL Energy Ltda. 90.20% - Direct Potiporã Alimentos Ltda. 100.00% 100.00% Direct COSIMA Siderúrgica do Maranhão Ltda 100.00% 100.00% Direct Energia Verde Produção Rural Ltda. 100.00% 100.00% Direct Queiroz Galvão Alimentos S.A. originated from Potiporã Aquacultura Ltda. which merged Timbaúba Agrícola S.A. was created with the objective the scope of farming fields, with highlight on irrigated agriculture, industrialization and commercialization, including export of own and third-parties products, mainly fruit and investigation, creation, reproduction, benefit and commercialization of shrimp. Agropecuária Rio Arataú develops agricultural and farming activities in all their modalities. The activities of Siderúrgica do Maranhão (SIMASA), Cia Siderúrgica Vale do Pindaré (PINDARÉ) and COSIMA Siderúrgica do Maranhão Ltda are the production and commercialization, including import and export, of pig iron, charcoal and metallurgical products in general and their by-products. Energia Verde Produção Rural Ltda. has as the main activity a rural production of vegetables products in a natural state or industrialized ones. EOL Energy Ltda. has as the main activity a production of electric energy and renewable ways of energies.

9 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 2 > SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES a. Brazilian accounting practices The financial statements have been prepared in accordance with the Brazilian accounting practices which include the principles prescribed by the Brazilian Corporate Law, the Law nº 9,249 of December 26, 1995 and Instruction nº 248 from the Security and Exchange Commission CVM. b. Translation into United States dollars The United States dollar amounts result from translation of the financial statements at the year-end rate of exchange as follows: 2009 2008 R$ 1.7412 per US$ 1.00 R$ 2.337 per US$ 1.00 The translation should not be construed as representation that the real (R$) amounts actually represent or have been, or could be converted into United States dollars. 3 > CONSOLIDATED FINANCIAL STATEMENTS AND HOLDING COMPANY a. Statements of income Service income, the related costs and other income and expenses are recorded for in accordance to the accrual basis method of accounting; b. Marketable securities They are represented by investments in fixed income securities and are stated at cost, plus accrued income to the balance sheet date; c. Inventories They are stated at the lower of the average cost or market; d. Fixed assets They are stated at cost plus monetary correction up to December 31, 1995. Depreciation is provided by the straight-line method over the estimated useful lives of depreciable assets; e. Investments in subsidiaries They are accounted for by the equity method based on invested companies financial statements. The amortization of excess of price over the carrying value and discount on investments was record based on economic events that support such amounts. The obtained results are demonstrated as an operating result in the equity in earnings;

10 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S f. Deferred assets They are represented by actual net expenses on income incurred. The amortization is calculated using the straight-line method at annual rates of 10% and 20%. 4 > CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements at December 31, 2009 and 2008 were represented of holding company Queiroz Galvão Participações Indústria e Agropecuária S.A. and the others companies that obtain participation with describe in note 7. The financial statements have been prepared in accordance with the rules and procedures established by the Brazilian Securities and Exchange Commission (CVM Instruction nº 247/96). The consolidation process resulted from the application of the percentages describes on note 1 to the balance sheet and statement of income accounts of the investor, adjusted by the following eliminations: a. Income and expenses, reserves and other results among the consolidated companies; b. Current account and others of asset and liability balances among the consolidated companies; c. Effects from transactions undertaken by the above mentioned companies; d. Discount and excess of price over the carrying value in investments were based on the expectation of future income and in line with the above-mentioned CVM regulatory instruction they were classified as result deferred income; and e. The minority benefits are represented at liabilities and the statements of income in minority interest. 5 > INVENTORIES CONSOLIDATED 2009 2008 Finished metallurgical products 10,237 10,104 Create and multiply animals and others 3,596 2,041 Metallurgical raw material 28,165 18,345 Stock room 1,643 1,602 Shrimp - 3,985 Total 43,641 36,077

11 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 6 > FIXED ASSETS CONSOLIDATED TAXES 2009 2008 Equipments and others 10% and 20% 62,258 51,795 Constructions 4% and 8% 68,827 48,094 Permanent culture and forests 6.66% and 10% 88,241 56,649 Lands - 46,982 31,305 Vehicles 20% and 40% 10,787 8,831 Facilities 10% 10,672 7,774 Other fixed assets 10% 42,950 29,374 330,717 233,822 Less: Accumulated depreciation (113,678) (74,113) Total 217,039 159,709 7 > INVESTMENTS As of December 31, 2009 and 2008 the investments account was stated as follows: 2009 2008 INVESTMENT DISCOUNT AGIO TOTAL TOTAL Queiroz Galvão Alimentos S.A. 6,397 - - 6,397 9,526 Simasa - Siderúrgica do Maranhão S.A 54,159 (21,836) - 32,323 15,862 Cia Siderúrgica Vale do Pindaré 61,238 (7,216) - 54,022 34,582 Potiporã Alimentos Ltda. 4,600 (2,174) - 2,426 3,878 Energia Verde-Produção Rural Ltda. 14,552 - - 14,552 3 Cosima Siderúrgica do Maranhão Ltda. 55,972-986 56,958 52,835 EOL Energy Ltda. (130) - 1330 1,200 - Agropecuária Rio Arataú S.A. 1,191-2,912 4,103 2,634 Total 197,979 (31,226) 5,228 171,981 119,320

12 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 8 > LOANS AND DEBENTURES INSTITUTIONS FINALITY CHARGE TAXES SHORT-TERM LONG-TERM GUARANTEE Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 1,233 3,698 Mortgage Banco do Nordeste do Brasil S.A. Debenture L.T.I.R 2.00%aa 478 - Surely and floating Banco do Nordeste do Brasil S.A. Credit extension - 8.00%aa 761 752 Mortgage Banco do Nordeste do Brasil S.A Credit extension L.T.I.R 10.00%aa 287 5,446 Mortgage Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 760 3,799 Mortgage Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 462 164 Mortgage Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 203 80 Mortgage Banco do Nordeste do Brasil S.A. Banco do Nordeste do Brasil S.A. 2009 Costing Agricultural - Farming - 8.50%aa 13,764 - Mortgage Costing Agricultural - Farming - 8.50%aa 15,473 - Mortgage Banco do Nordeste do Brasil S.A. Credit extension - 9.00%aa 818 364 Mortgage Banco da Amazônia S.A. Debenture L.T.I.R 4.00%aa - 10,469 Surely and floating BNDES Credit extension Basket of currencies 2.75%aa 4,394 2,911 Mortgage BNDES Credit extension L.T.I.R 2.75%aa 340 282 Mortgage Banco Bradesco S.A. Working capital - - 1,690 5,774 Promissory notes Banco Bradesco S.A. Working capital Dollar 3.61%aa 12,487 - Promissory notes Banco Bradesco S.A. Working capital Dollar 1.53%aa 2,054 - Promissory notes Banco Bradesco S.A. Working capital Euro 3.72%aa 5,571 - Promissory notes Banco Bradesco S.A. Working capital Euro 4.48%aa 611 - Promissory notes CEF Project Finance - - 155 - Promissory notes HSBC Bamerindus Working capital Dollar 3.02%aa 1,307 - Promissory notes HSBC Bamerindus Working capital Dollar 10.84%aa 1,054 - Promissory notes Itaú Working capital Dollar 2.90%aa 879 - Promissory notes Itaú BBA Credit extension - 9.00%aa 311 1,520 Mortgage Itaú BBA Banco Votorantim S.A. Banco Votorantim S.A. Banco Votorantim S.A. Costing Agricultural - Farming - 6.75%aa 1,404 - Promissory notes Finame L.T.I.R 2.38%aa 333 487 Finame L.T.I.R 1.35%aa 34 - Finame - 11.00%aa 101 143 Bond fidelity/ Trustee Bond fidelity/ Trustee Bond fidelity/ Trustee Banco Votorantim S.A. Credit extension L.T.I.R 2.65%aa 105 2,215 Promissory notes Banco Votorantim S.A. Finame L.T.I.R 3.15%aa 26 39 Promissory notes Banco Votorantim S.A. Finame L.T.I.R 3.15%aa 69 108 Promissory notes Banco Votorantim S.A. Finame L.T.I.R 3.15%aa 30 46 Promissory notes Banco do Brasil Working capital Dollar 3.08%aa 5,063 - Promissory notes 72,257 38,297 LTIR = Represent Long Term Interest Rate used in Brazil named TJLP, fixed by Brazilian Central Bank.

13 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S INSTITUTIONS FINALITY CHARGE TAXES SHORT-TERM LONG-TERM GUARANTEE Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 566 3,397 Mortgage Banco do Nordeste do Brasil S.A. 2008 Costing Agricultural - Farming - 8.50%aa 11,406 - Mortgage Banco do Nordeste do Brasil S.A. Credit extension - 9.00%aa 674 543 Mortgage Banco do Nordeste do Brasil S.A. Costing Agricultural - Farming - 8.50%aa 10,146 - Mortgage Banco do Nordeste do Brasil S.A. Credit extension - 8.00%aa 562 1,118 Mortgage Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 382 245 Mortgage Banco do Nordeste do Brasil S.A. Debenture - 2.00%aa 650 325 Surely and floating Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 919 3,674 Bond fidelity/trustee Banco do Nordeste do Brasil S.A. Credit extension - 11.50%aa 166 120 Mortgage Banco do Nordeste do Brasil S.A Debenture - 8.75%aa 195 - Surely and floating Banco Bradesco S.A. Working capital Dollar 5.50%aa 38,312 - Promissory notes Banco Bradesco S.A. Working capital Dollar 5.226%aa 28,881 - Promissory notes Banco Bradesco S.A. Working capital Euro 5.18%aa 2,498 - Promissory notes Banco Bradesco S.A. Working capital Euro 5.25%aa 8,015 - Promissory notes BNDES Credit extension Basket of currencies 2.75%aa 3,282 5,416 Mortgage BNDES Credit extension L.T.I.R 2.00%aa 445 - Mortgage BNDES Credit extension L.T.I.R 2.75%aa 342 621 Mortgage Banco Votorantim S.A. Finame - 11%aa 49 24 Bond fidelity/trustee Banco Votorantim S.A. Finame L.T.I.R 1.35%aa 75 181 Bond fidelity/trustee Banco Votorantim S.A. Finame L.T.I.R 3.15%aa 51 131 Promissory notes Banco Votorantim S.A. Finame L.T.I.R 3.15%aa 20 49 Promissory notes Banco Votorantim S.A. Finame L.T.I.R 3.15%aa 22 55 Promissory notes Banco Votorantim S.A. Finame L.T.I.R 2.38%aa 247 611 Bond fidelity/trustee Banco Votorantim S.A. Credit extension L.T.I.R 2.65%aa 4 1,551 Promissory notes Banco da Amazônia S.A. Credit extension L.T.I.R 4%aa - 7,056 Surely and floating 107,909 25,117 LTIR = Represent Long Term Interest Rate used in Brazil named TJLP, fixed by Brazilian Central Bank.

14 N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S 9 > CAPITAL The capital, subscribed and fully paid, comprises 79,979,869 ordinary nominative shares with no par value. On December 31, 2009 the Company s book value per thousand of shares was R$ 2,987.73 equivalent to US$ 1,715.90 (R$ 3,363.58 equivalent to US$ 1,439.27 at 2008). The shareholders have the right to a minimum dividend of 3% of the net income for the year, according to the company s by-law. The shareholders general meeting has the power to decide for lower distribution or retention of the whole net income. Also, 5% of the net income for the year is appropriated to legal reserve limited to 20% of the capital stock. 10 > FINANCIAL INSTRUMENTS The financial instruments are recorded for in the balance sheet accounts as of December 31, 2009 and 2008 at compatible market value. The management of these instruments is made in a strategic way with the objective of liquidity, profitability and security. The investment control consists of a permanent follow-up of the contracted rates compared to the daily market rates. The company does not operate with derivatives or any other risk asset. 11> CONTINGENCIES The Company s management, based on the opinion of its legal advisors believes that the appropriate referrals and arrangements for any fiscal, tax, pension and labor liability purposes; have been taken in each situation and are sufficient to preserve the company s equity no indications, in December 31, 2009, of the need to recognize any provision for contingencies in the financial statements. The accounting records and operations are subject to examination of tax authorities in different mature dates according to the specific tax laws applicable.