Exhibit 99.1



LOGO

GRUPO VASCONIA, S. A. B. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE

YEARS ENDED DECEMBER 31, 2011 AND 2010,

AND INDEPENDENT AUDITORS
REPORT



---

Grupo Vasconia, S. A. B. and Subsidiaries

Consolidated financial statements

For the years ended December 31, 2011 and 2010,

and independent
auditors report

Index



|                                              |  |      |         | 
|--------------------------------------------- |  | ---- | ------- | 
|Contents                                      |  | Page |        
|                                              | 
|Independent auditors report                  |  |      | 1       | 
|                                              | 
|Consolidated financial statements:            |  |      |         | 
|                                              | 
|Balance sheets                                |  |      | 2       | 
|                                              | 
|Statements of income                          |  |      | 3       | 
|                                              | 
|Statements of changes in shareholders equity |  |      | 4       | 
|                                              | 
|Statements of cash flows                      |  |      | 5       | 
|                                              | 
|Notes to the financial statements             |  |      | 6 to 23 | 



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|     |                         |                          |                            |                                  
|---- | ----------------------- | ------------------------ | -------------------------- | ---------------------------------
|LOGO |                         | Tel.: +52 (55) 8503 4200 |                            | Castillo Miranda y Compañia, S.C.
|     | Fax: +52 (55) 8503 4299 |                          | Paseo de la Reforma 505-31
|     | www.bdomexico.com       |                          | Colonia Cuauhtémoc        
|     |                         |                          | Mexico, D.F.              
|     |                         |                          | CP 06500                  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of

Grupo Vasconia, S. A. B. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Grupo Vasconia, S.A.B. and subsidiaries (The Company) as of December 31, 2011 and
the related consolidated statements of income, changes in shareholders equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of The Companys management. Our responsibility is to
express an opinion on these consolidated financial statements based on our audit. The consolidated financial statements of The Company as of December 31, 2010 and for the year then ended, which are presented solely for comparative purposes,
were audited by other independent auditors who issued their unqualified opinion on March 8, 2011.

We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are Free of material misstatements
and whether they are prepared according to Mexican financial reporting standards. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over
financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the financial Information
reporting standards used, the significant estimates made by Management and the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

Subsequent Events:



|1. | As part of the operational strategy, the shareholders decided that Grupo Vasconia, S.A.B. will absorb, by merger, Ekco Querétaro, S.A. de C.V. As a result, Ekco
Querétaro, S.A. de C.V. will cease to exist as of the merge date.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. | Grupo Vasconia, S.A.B., through its subsidiary Industria Mexicana de Aluminio, S.A. de C.V. will acquire on April 24, 2012, the 99.99% of the shares from the
capital stock of Almexa Aluminio, S.A. de C.V. (company dedicated to the manufacturing and sale of aluminum in various presentations), for a total amount of 27 millions of US dollars. As of the date of this report the acquisition is in process. The
funds to pay the shares will be obtained from a bank loan.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In our opinion, the accompanying consolidated financial statements
present fairly, in all material respects, the consolidated financial position of Grupo Vasconia, S.A.B. and subsidiaries as of December 31, 2011, and the results of its consolidated operations, the consolidated changes in shareholders
equity and the consolidated cash flows for the year then ended, in conformity with Mexican financial reporting standards.

The consolidated
financial statements have been translated into English solely for the convenience of readers of this language. In all cases where there are any disagreements between the English and Spanish version, the Spanish version shall be considered
authoritative and controlling,



CASTILLO MIRANDA Y COMPANIA, S. C.Member of BDO International/s/ Bernardo Soto PenafielBernardo Soto Penafiel, CPA


Mexico City, February 29, 2012, except for the events described in paragraphs 1 and 2, dated April 23,
2012



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Grupo Vasconia, S. A. B. and Subsidiaries

Consolidated balance sheets

As of December 31, 2011 and 2010

(Figures expressed in pesos)



|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|---------------------------------------------------------- |  | ---- | -- |  | ---- | - | ------------- | ---- |  | - | ------------- | -
|                                                           |  | Note |    |  | 2011 |   |               | 2010 | 
|Assets                                                     |  |      |    |  |      |   |               |      |  |   |               |  
|Current                                                    |  |      |    |  |      |   |               |      |  |   |               |  
|Cash and cash equivalents                                  |  |      |    |  |      | $ | 8,274,348     |      |  | $ | 37,193,554    |  
|Accounts receivable                                        |  |      | 5  |  |      |   | 424,330,400   |      |  |   | 332,483,662   |  
|Inventories, net                                           |  |      | 6  |  |      |   | 301,661,303   |      |  |   | 319,455,185   |  
|Advance payments                                           |  |      |    |  |      |   | 15,105,394    |      |  |   | 4,448,667     |  
|Recoverable taxes credit, net                              |  |      |    |  |      |   |               |      |  |   | 810,443       |  
|Derivative financial instruments                           |  |      | 7  |  |      |   |               |      |  |   | 3,127,711     |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Total current assets                                       |  |      |    |  |      |   | 749,371,445   |      |  |   | 697,519,222   |  
|Other permanent investments                                |  |      | 8  |  |      |   | 21,244,281    |      |  |   | 19,528,987    |  
|Properties, machinery and equipment, net                   |  |      | 10 |  |      |   | 427,325,695   |      |  |   | 335,453,325   |  
|Deferred charges, net                                      |  |      | 11 |  |      |   | 10,978,978    |      |  |   | 11,483,082    |  
|Deferred income tax and employee statutory profit sharing |  |      | 17 |  |      |   | 3,067,634     |      |  |   | 7,087,282     |  
|Guarantee deposits                                         |  |      |    |  |      |   | 18,244,667    |      |  |   | 18,639,989    |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Total assets                                               |  |      |    |  |      | $ | 1,230,232,700 |      |  | $ | 1,089,711,887 |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Liabilities                                                |  |      |    |  |      |   |               |      |  |   |               |  
|Short term                                                 |  |      |    |  |      |   |               |      |  |   |               |  
|Bank loans                                                 |  |      | 12 |  |      | $ | 31,447,063    |      |  | $ | 6,000,000     |  
|Suppliers                                                  |  |      |    |  |      |   | 120,133,279   |      |  |   | 134,491,093   |  
|Provisions                                                 |  |      | 13 |  |      |   | 36,221,401    |      |  |   | 45,124,892    |  
|Other accounts payable and accrued liabilities             |  |      |    |  |      |   | 7,037,294     |      |  |   | 5,945,399     |  
|Taxes payable, net                                         |  |      |    |  |      |   | 3,552,352     |      |  |   |               |  
|Other taxes payable                                        |  |      |    |  |      |   | 4,572,878     |      |  |   | 4,404,724     |  
|Employee statutory profit sharing                         |  |      |    |  |      |   | 1,294,927     |      |  |   | 1,327,031     |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Total short term liabilities                               |  |      |    |  |      |   | 204,259,194   |      |  |   | 197,293,139   |  
|Long term                                                  |  |      |    |  |      |   |               |      |  |   |               |  
|Bank loans                                                 |  |      | 12 |  |      |   | 25,500,000    |      |  |   | 31,500,000    |  
|Long-term debt                                             |  |      | 14 |  |      |   | 24,670,564    |      |  |   |               |  
|Employee benefits                                          |  |      | 15 |  |      |   | 18,187,960    |      |  |   | 15,806,397    |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Total liabilities                                          |  |      |    |  |      |   | 272,617,718   |      |  |   | 244,599,536   |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Stockholders equity                                       |  |      | 16 |  |      |   |               |      |  |   |               |  
|Capital stock                                              |  |      |    |  |      |   | 442,455,895   |      |  |   | 442,455,895   |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Retained earnings:                                         |  |      |    |  |      |   |               |      |  |   |               |  
|Legal reserve                                              |  |      |    |  |      |   | 29,030,161    |      |  |   | 22,768,637    |  
|To be applied                                              |  |      |    |  |      |   | 361,250,711   |      |  |   | 260,411,261   |  
|For the year                                               |  |      |    |  |      |   | 132,376,481   |      |  |   | 125,230,484   |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|                                                           |  |      |    |  |      |   | 522,657,353   |      |  |   | 408,410,382   |  
|Repurchase of shares                                       |  |      | 16 |  |      |   | (7,498,266    | )    |  |   | (5,753,926    | )
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Total stockholders equity                                 |  |      |    |  |      |   | 957,614,982   |      |  |   | 845,112,351   |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  
|Total liabilities and stockholders equity                 |  |      |    |  |      | $ | 1,230,232,700 |      |  | $ | 1,089,711,887 |  
|                                                           |  |      |    |  |      |   |               |      |  |   |               |  

The accompanying notes are an integral part of these financial statements.



2



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Grupo Vasconia, S. A, B. and Subsidiaries

Consolidated statements of income

For the years ended December 31, 2011 and 2010

(Figures expressed in pesos)



|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|-------------------------------------------------------------- |  | ---- | -- |  | ---- | - | ------------- | ---- |  | - | ------------- | -
|                                                               |  | Note |    |  | 2011 |   |               | 2010 | 
|Net sales                                                      |  |      |    |  |      | $ | 1,651,580,872 |      |  | $ | 1,430,527,586 |  
|Cost of sales                                                  |  |      |    |  |      |   | 1,187,981,198 |      |  |   | 1,021,134,416 |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Gross profit                                                   |  |      |    |  |      |   | 463,599,674   |      |  |   | 409,393,170   |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Sales expenses                                                 |  |      |    |  |      |   | 214,717,753   |      |  |   | 173,537,347   |  
|Administrative expenses                                        |  |      |    |  |      |   | 47,363,947    |      |  |   | 41,594,940    |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|                                                               |  |      |    |  |      |   | 262,081,700   |      |  |   | 215,132,287   |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Other expenses, net                                            |  |      |    |  |      |   | (2,182,535    | )    |  |   | (9,143,033    | )
|Employee profit sharing                                        |  |      |    |  |      |   | (1,121,538    | )    |  |   | (481,161      | )
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|                                                               |  |      |    |  |      |   | (3,304,073    | )    |  |   | (9,624,194    | )
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Comprehensive result of financing:                             |  |      |    |  |      |   |               |      |  |   |               |  
|Interest paid, net                                             |  |      |    |  |      |   | (5,747,426    | )    |  |   | (2,099,235    | )
|Gain (loss) from foreign exchange fluctuation, net             |  |      |    |  |      |   | 679,761       |      |  |   | (1,316,775    | )
|Gain in valuation of derivative financial instruments position |  |      | 7  |  |      |   |               |      |  |   | 3,127,711     |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|                                                               |  |      |    |  |      |   | (5,067,665    | )    |  |   | (288,299      | )
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Profit before taxes on earnings                                |  |      |    |  |      |   | 193,146,236   |      |  |   | 184,348,390   |  
|Taxes on earnings                                              |  |      | 17 |  |      |   | 60,769,755    |      |  |   | 59,117,906    |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Net consolidated income                                        |  |      |    |  |      |   | 132,376,481   |      |  |   | 125,230,484   |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Controlling holding in net income                              |  |      |    |  |      | $ | 132,376,481   |      |  | $ | 125,230,484   |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  
|Net income for common share                                    |  |      |    |  |      | $ | 1.53          |      |  | $ | 1.44          |  
|                                                               |  |      |    |  |      |   |               |      |  |   |               |  

The accompanying notes are an integral part of these financial statements.



3



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Grupo Vasconia, S. A. B. and Subsidiaries

Consolidated statements of changes in stockholders equity

For the years ended on December 31, 2011 and 2010

(Figures expressed in
pesos)



|                                                                                       |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      |              |   |       |   |            |   |  |   |             |  
|-------------------------------------------------------------------------------------- |  | ------------- | ----------- |  | ------------- | - | ---------- | ---------------- |  | - | ---------------------- | - |  | -------------------- | ------------ | - | ----- | - | ---------- | - |  | - | ----------- | -
|                                                                                       |  | Capital stock |             |  | Legal reserve |   |            | Retainedearnings |  |   | Net incomefor the year |   |  | Repurchasesof shares |              |   | Total |  
|Balances as of December 31, 2009                                                       |  | $             | 442,455,895 |  |               | $ | 17,178,311 |                  |  | $ | 170,756,617            |   |  | $                    | 111,806,510  |   |       | $ | (3,064,896 | ) |  | $ | 739,132,437 |  
|Transfer of the years result                                                          |  |               |             |  |               |   |            |                  |  |   | 111,806,510            |   |  |                      | (111,806,510 | ) |       |   |            |   |  |   |             |  
|Increase in the legal reserve                                                          |  |               |             |  |               |   | 5,590,326  |                  |  |   | (5,590,326             | ) |  |                      |              |   |       |   |            |   |  |   |             |  
|Payment of dividends in accordance to agreement of the shareholders meeting (Note 16) |  |               |             |  |               |   |            |                  |  |   | (16,561,540            | ) |  |                      |              |   |       |   |            |   |  |   | (16,561,540 | )
|Comprehensive income for the year                                                      |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      | 125,230,484  |   |       |   |            |   |  |   | 125,230,484 |  
|Repurchase of shares                                                                   |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      |              |   |       |   | (2,689,030 | ) |  |   | (2,689,030  | )
|                                                                                       |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      |              |   |       |   |            |   |  |   |             |  
|Balances as of December 31, 2010                                                       |  |               | 442,455,895 |  |               |   | 22,768,637 |                  |  |   | 260,411,261            |   |  |                      | 125,230,484  |   |       |   | (5,753,926 | ) |  |   | 845,112,351 |  
|Transfer of the years result                                                          |  |               |             |  |               |   |            |                  |  |   | 125,230,484            |   |  |                      | (125,230,484 | ) |       |   |            |   |  |   |             |  
|Increase in the legal reserve                                                          |  |               |             |  |               |   | 6,261,524  |                  |  |   | (6,261,524             | ) |  |                      |              |   |       |   |            |   |  |   |             |  
|Payment of dividends in accordance to agreement of the shareholders meeting (Note 16) |  |               |             |  |               |   |            |                  |  |   | (18,129,510            | ) |  |                      |              |   |       |   |            |   |  |   | (18,129,510 | )
|Comprehensive income for the year                                                      |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      | 132,376,481  |   |       |   |            |   |  |   | 132,376,481 |  
|Repurchase of shares                                                                   |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      |              |   |       |   | (1,744,340 | ) |  |   | (1,744,340  | )
|                                                                                       |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      |              |   |       |   |            |   |  |   |             |  
|Balances as of December 31, 2011                                                       |  | $             | 442,455,895 |  |               | $ | 29,030,161 |                  |  | $ | 361,250,711            |   |  | $                    | 132,376,481  |   |       | $ | (7,498,266 | ) |  | $ | 957,614,982 |  
|                                                                                       |  |               |             |  |               |   |            |                  |  |   |                        |   |  |                      |              |   |       |   |            |   |  |   |             |  

The accompanying notes are an integral part of these financial statements.



4



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Grupo Vasconia, S. A. B. and Subsidiaries

Consolidated statements of cash flows

For the years ended on December 31, 2011 and 2010

(Figures expressed in
pesos)



|                                                                      |  |      |              |   |      |   |              |  
|--------------------------------------------------------------------- |  | ---- | ------------ | - | ---- | - | ------------ | -
|                                                                      |  | 2011 |              |   | 2010 |  
|Operating activities                                                  |  |      |              |   |      |   |              |  
|Profit before taxes on earnings                                       |  | $    | 193,146,236  |   |      | $ | 184,348,390  |  
|Items related to investment activities:                               |  |      |              |   |      |   |              |  
|Depreciation and amortization                                         |  |      | 28,640,967   |   |      |   | 23,461,268   |  
|Interests recoverable                                                 |  |      | (396,904     | ) |      |   | (2,149,501   | )
|Items related to financing activities:                                |  |      |              |   |      |   |              |  
|Interests payable                                                     |  |      | 6,144,330    |   |      |   | 4,248,736    |  
|                                                                      |  |      |              |   |      |   |              |  
|                                                                      |  |      | 227,534,629  |   |      |   | 209,908,893  |  
|Increase in accounts receivable                                       |  |      | (91,846,738  | ) |      |   | (55,286,541  | )
|Decrease in recoverable taxes, credit                                 |  |      | 810,443      |   |      |   | 22,107,902   |  
|Decrease (increase) in inventories                                    |  |      | 17,793,882   |   |      |   | (135,791,943 | )
|(Increase) decrease in other assets                                   |  |      | (7,133,694   | ) |      |   | 10,084,282   |  
|Decrease in deferred taxes                                            |  |      | 4,019,648    |   |      |   | 4,155,569    |  
|(Decrease) increase in suppliers                                      |  |      | (14,357,814  | ) |      |   | 18,915,216   |  
|(Decrease) increase in other accounts payable and accrued liabilities |  |      | (2,012,446   | ) |      |   | 10,644,506   |  
|Increase in employee benefits                                         |  |      | 2,381,563    |   |      |   | 2,948,168    |  
|Increase (decrease) in taxes payable                                  |  |      | 3,720,506    |   |      |   | (17,614,194  | )
|Taxes on earnings paid                                                |  |      | (66,568,905  | ) |      |   | (41,862,088  | )
|(Decrease) increase in employee profit sharing                        |  |      | (32,104      | ) |      |   | 236,563      |  
|                                                                      |  |      |              |   |      |   |              |  
|Net cash flows from operating activities                              |  |      | 74,308,970   |   |      |   | 28,446,333   |  
|                                                                      |  |      |              |   |      |   |              |  
|Investment activities                                                 |  |      |              |   |      |   |              |  
|Acquisition of trademarks                                             |  |      |              |   |      |   | (10,856,925  | )
|Acquisition of properties, machinery and equipment                    |  |      | (120,009,233 | ) |      |   | (93,546,842  | )
|Acquisition of other permanent investments                            |  |      | (1,715,294   | ) |      |   | (6,172,126   | )
|Interests collected                                                   |  |      | 396,904      |   |      |   | 2,149,501    |  
|                                                                      |  |      |              |   |      |   |              |  
|Net cash flows from investment activities                             |  |      | (121,327,623 | ) |      |   | (108,426,392 | )
|                                                                      |  |      |              |   |      |   |              |  
|Cash to be collected from financing activities                        |  |      | (47,018,653  | ) |      |   | (79,980,059  | )
|                                                                      |  |      |              |   |      |   |              |  
|Financing activities                                                  |  |      |              |   |      |   |              |  
|Bank loans                                                            |  |      | 25,447,063   |   |      |   |              |  
|Payment of bank loans                                                 |  |      | (6,000,000   | ) |      |   | (6,000,000   | )
|Long-term debt                                                        |  |      | 24,670,564   |   |      |   |              |  
|Dividends paid                                                        |  |      | (18,129,510  | ) |      |   | (16,561,540  | )
|Interests paid                                                        |  |      | (6,144,330   | ) |      |   | (4,248,736   | )
|Repurchase of shares                                                  |  |      | (1,744,340   | ) |      |   | (2,689,030   | )
|                                                                      |  |      |              |   |      |   |              |  
|Net cash flows from financing activities                              |  |      | 18,099,447   |   |      |   | (29,499,306  | )
|                                                                      |  |      |              |   |      |   |              |  
|Decrease in cash and cash equivalents                                 |  |      | (28,919,206  | ) |      |   | (109,479,365 | )
|Cash and cash equivalents at the beginning of year                    |  |      | 37,193,554   |   |      |   | 146,672,919  |  
|                                                                      |  |      |              |   |      |   |              |  
|Cash and cash equivalents at the end of year                          |  | $    | 8,274,348    |   |      | $ | 37,193,554   |  
|                                                                      |  |      |              |   |      |   |              |  

The accompanying notes are an integral part of these financial statements.



5



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Grupo Vasconia, S. A. B. and Subsidiaries

Notes to the consolidated financial statements

For the years ended on December 31, 2011 and 2010

(All figures are expressed
in Mexican pesos)







|1. | Main Activity
|-- | -------------

The main activity
of Grupo Vasconia, S.A.B. (The Company) and its subsidiaries, is the production and sale of aluminum products for the kitchen and the home, and the marketing of various products for the same market, as well as the production and sale of
aluminum products that are used as raw materials in different industries.

The Subsidiaries of The Company are as follows:

Industria Mexicana del Aluminio, S. A. de C. V. (IMASA) - This Company produces and sells aluminum products that are used as
raw materials in distinct industries. Additionally, it supplies The Company with aluminum discs, which are used as raw materials.

Ekco Querétaro, S. A. de C. V. - Company dedicated to the manufacture and sale of non-stick frying pans and pots, its sales are made by The Company. During 2012 the operation of Ekco
Querétaro, S. A. de C. V. will be transferred to The Company.

La Vasconia (España), S. A. - As of June 2002,
this Company sold products under the Vasconia brand name. As of this date, the products under such brand name are sold by The Company. As of the date of these financial statements, The Company management is in process of selling or liquidating this
subsidiary.

Fomento Productivo S. A. de C. V. e Industrias Ekco, S. A. de C. V. - These are service companies that provide The
Company, Ekco Querétaro, S. A. de C. V., and Industria Mexicana del Aluminio, S. A. de C. V. with administrative personnel and production services.

Vasconia Housewares, LLC. - A United States corporation. Its main line of business is the sale of the aluminum products in the United States that it purchases from The Company.

The Companys interest in the aforementioned companies is as follows:



|                                                |  |                 |        |   |      |  |        |  
|----------------------------------------------- |  | --------------- | ------ | - | ---- |  | ------ | -
|                                                |  | Percentage held |       
|                                                |  | 2011            |        |   | 2010 | 
|Industria Mexicana del Aluminio, S. A. de C. V. |  |                 | 99.97  | % |      |  | 99.97  | %
|Ekco Querétaro, S. A. de C. V.                  |  |                 | 99.99  | % |      |  | 99.99  | %
|La Vasconia (España), S. A.                     |  |                 | 99.99  | % |      |  | 99.99  | %
|Fomento Productivo, S. A. de C. V.              |  |                 | 99.99  | % |      |  | 99.99  | %
|Industrias Ekco, S. A. de C. V.                 |  |                 | 99.99  | % |      |  | 99.99  | %
|Vasconia Housewares, LLC.                       |  |                 | 100.00 | % |      |  | 100.00 | %



6



---

|2. | Basis for consolidation
|-- | -----------------------

The consolidated financial statements have been prepared in order to present the consolidated financial position, results of operations,
changes in shareholders equity, and cash flows of the various companies that make up Grupo Vasconia, S.A.B. and Subsidiaries. Consequently, they include the accounts of the companies mentioned in Note 1. All intercompany transactions and
balances have been eliminated in consolidation. The consolidation was made based on the audited financial statements of the subsidiaries, which were prepared by following the same accounting policies used by the holding company.



|3. | Summary of significant accounting polices
|-- | -----------------------------------------

The accompanying financial statements have been prepared in accordance with Mexican Financial Reporting Standards (NIF) issued by the Mexican Council of the Financial Reporting Standards, A. C. (CINIF).
The NIF require management of The Company, using their professional judgment, make certain estimates and assumptions used to determine the valuation of some items included in the financial statements. Even when they reach their final effect differ
from, The Companys management believes that the estimates and assumptions used are appropriate to the circumstances and the date of issuance of these financial statements. The following summarizes the principal accounting policies followed by
The Company, which are in accordance with the NIF:



| | a. | Basis of presentation and disclosure
| | -- | ------------------------------------

Monetary unit of the financial statements

The financial statements and their
respective notes as of December 31, 2011 and 2010 and for the year ended on that date were audited and are presented in Mexican pesos of distinct purchasing power.

Translation of financial statements

The financial statements of The Company
abroad were translated to Mexican pesos by applying guidelines of NIF B-15, Foreign Currency Transactions and Translations of Financial Statements of Foreign Operations, under the method of translating from functional currency to
reporting currency.

Comprehensive income

The Company follows the practice of recognizing comprehensive income, in compliance with the guidelines of the NIF B-4, Comprehensive income, which establishes disclosure and presentation
rules of comprehensive income and its components.

The amount of comprehensive income presented in the consolidated statement
of changes in shareholders equity is the entire result of The Company performance during the year and is represented by the net profit plus the changes in the retained earnings in the restatement of shareholders equity and
non-controlling holding up to 2007. As of 2008, only the net profit and the non-controlling holding are considered and, in accordance with the financial reporting standards, are carried directly to shareholders equity.

Classification per function

Costs and expenses are presented based on their function, which allows for differentiating the cost of sales from general expenses, which are distributed in sales expenses (sales, marketing, distribution
and management of categories), and administrative expenses.



7



---

| | b. | Recognition of the effects of inflation
| | -- | ---------------------------------------

The accrued inflation for the three prior years is 15.19% for 2011 and 14.48% for 2010. In accordance the NIF, the economic environment for both years is non-inflationary. Therefore, as of January 1,
2008, The Company suspended the recognition of the effects from inflation on its financial statements. Consequently, the assets, liabilities, and shareholders equity as of December 31, 2011 and 2010 include the effects from the
restatement recognized up to December 31, 2007.

The percentages of inflation for the years ended on December 31,
2011 and 2010 were 3.81% and 4.40%, respectively.



| | c. | Significant clients
| | -- | -------------------

The
Companys net sales to its principal client, Nueva Wall Mart de Mexico, S. A. de C. V., represent 16.05% and 14.01% of the total consolidated sales of 2011 and 2010, respectively.



| | d. | Cash and cash equivalents
| | -- | -------------------------

Cash
and cash equivalents include bank deposits, foreign currencies and other marketable instruments. As of the date of the consolidated financial statements, interest earned and valuation gains or losses are included in the years results as a part
of the comprehensive result of financing.



| | e. | Other permanent investments
| | -- | ---------------------------

Other permanent investments are booked at acquisition cost. The profits or losses from these investments are recognized in the years
results in which they are realized.



| | f. | Derivate financial instruments
| | -- | ------------------------------

The Company values all its derivatives in the balance sheet at fair value, notwithstanding the intention of its holding. The fair value
determination is based on market quotations, when the derivative is quoted in a recognized market and, to the contrary, with technical determinations based on recognized valuation models.

The derivatives designated from hedging recognize the following changes in fair value: (1) the fluctuations from the derivative and
the hedged item are valued against results, if they are at fair value, or (2) they are temporarily recognized in comprehensive income and are reclassified to results when the hedged item affects them if they are from cash flows. The ineffective
portion of the change in the reasonable value is immediately recognized in the results, within the comprehensive result of financing (RIF), whether the derivative is designated as hedging at fair value or cash flow.

The Company mainly uses hedges to manage the risk against fluctuations in prices of currency, natural gas and aluminum. The Company
formally documents all hedging relationships by describing the risk management goals and strategies for carrying out transactions with derivatives. The negotiation with derivatives is made only with institutions of recognized solvency.

The Company has a Risk Management Committee that includes members of the Board of Directors who continuously analyze The Companys
risk regarding prices, credit and liquidity.



| | g. | Inventories and cost of sales
| | -- | -----------------------------

Inventories are valued at the lower of cost or market value, which does not exceed realization value. As of 2007 inventories were valued
at replacement cost, the cost of sales was restated at replacement cost upon sale and was restated at the end of the year based on the inflationary index generated as of the month in which it was incurred.



8



---

| | h. | Net income per share
| | -- | --------------------

The net
income per share is determined based on the weighted average of shares outstanding during the year.



| | i. | Properties, machinery and equipment
| | -- | -----------------------------------

Properties, machinery and equipment are recorded at acquisition or construction cost. As of 2007, the effects from inflation were recognized in accordance with the adjustment from changes in the general
price level method by applying factors from the National Consumer Price Index (NCPI) and specific indexing for those fixed assets of foreign origin or those of foreign origin purchased in the country, which are restated by applying their cost in
foreign currency, inflation of the country of origin, and the devaluation of the Mexican pesos against the currency of the country of origin.

Depreciation is calculated on the straight-line method on initial monthly balances based on The Companys estimated useful lives of the fixed assets.



| | j. | Impairment of the recovery value of long-lived assets, properties, machinery and equipment
| | -- | ------------------------------------------------------------------------------------------

The Company periodically assesses the restated values of its long-lived assets, properties, machinery and equipment in order to determine
whether there are indications that these values exceed the recovery value. The recovery value represents the amount of possible net revenues reasonably expected to be obtained as a result of the use or realization of the assets. If the restated
values are excessive, the Company books the necessary allowances in order to reduce them to the recovery value. The Company books the estimates needed to reduce them to their recovery value.



| | k. | Deferred charges
| | -- | ----------------

Deferred
charges are recorded at acquisition cost. As of 2007, the inflationary effects were recognized in accordance with the adjustment from changes in the general level of prices method by means of applying factors derived from the NCPI. Deferred charges
are amortized on the straight-line method over twenty years.



| | l. | Employee benefits
| | -- | -----------------

The NIF D- 3
sets that there into three types of employee benefits: direct short and long-term benefits, termination benefits, and retirement benefits, which are analyzed as follows (Note 15):

Direct employee benefits - These benefits are valued in proportion with services rendered, by considering current wages. They are
recognized as a liability as they are accrued and include mainly profit sharing payable, paid absences, such as vacations and vacation premiums, and incentives.

Employee benefits from termination, retirement, and others - The liability from seniority premiums, post-retirement benefits, and severance payments from termination of employment are recorded as accrued,
which is calculated by independent actuaries based on the projected individual credit method by using nominal interest rates. Therefore, the liability is being recognized at current value and it is estimated it will cover the obligations of these
benefits as of the estimated retirement date of all employees that work at The Company.

Other payments, based on seniority to
which employees may be entitled in the event of separation or death, are recorded in results of the year when they are due, according to the Mexican Federal Labor Law.



9



---

| | m. | Tax on earnings
| | -- | ---------------

Income tax
(ISR) and the flat rate business tax (IETU), are recorded in the results of the year in which they are accrued. The deferred tax is determined based on financial projections on which it is established whether The Company will accrue ISR or IETU, by
recognizing the respective deferred tax The Company will pay. The deferred tax is recognized by applying the corresponding rate to timing differences that result from the comparison of book and fiscal balances of assets and liabilities, which
include the benefits from some tax credits. The deferred tax asset is recorded only when there is a high probability that it will be recovered.

The effect from changes in tax rates on deferred taxes is recognized in the results of the year in which the changes are approved.

The tax on assets (IMPAC) paid as of 2007 and which The Company expects to recover is booked as a tax credit and is presented in the balance sheet by increasing the deferred tax asset.

The years effect from deferred taxes was a debit to results of $4,248,112 in 2011, $4,971,468 in 2010 (Note 17).



| | n. | Employee statutory profit sharing (PTU)
| | -- | ---------------------------------------

PTU is recorded in the results of the year in which it is incurred and is presented in the other expenses (net) in the statement of income. Deferred employee profit sharing is determined from timing
differences that result from the comparison between book and fiscal balances of assets and liabilities.



| | o. | Comprehensive result of financing (RIF)
| | -- | ---------------------------------------

The RIF includes interest and foreign exchange differences.

Transactions in
foreign currency - Transactions in foreign currency are booked at the foreign exchange rate prevailing as of the date they are incurred. Assets and liabilities are restated at the exchange rate as of the balance sheet date. The resulting differences
from foreign exchange fluctuations between the date the transactions are incurred and the settlement or valuation date are applied to results.



| | p. | Revenue recognition
| | -- | -------------------

Income and
related costs are recognized during the year in which inventory risks and benefits are transferred to the customers who acquire them.



| | q. | Contingencies
| | -- | -------------

Significant
obligations or losses related to contingencies are recognized when it is probable that the effects materialize and there are reasonable elements for their quantification. If there are no reasonable elements, they are qualitatively disclosed in the
notes to the financial statements (Note 18). Income, gains, or other contingent assets are recognized when there is practically absolute certainty they will be realized.



| | r. | Provisions
| | -- | ----------

Provisions are
recognized when there is a current obligation that results from a prior event and that will probably result in the use of economic resources, which can be reasonably estimated.



10



---

| | s. | Reclassifications
| | -- | -----------------

The financial
statements for the year ended December 31, 2010 have been reclassified in certain areas to conform to the presentation used in 2011.



|4. | Assets in foreign currency
|-- | --------------------------

The financial position includes the following assets and liabilities in foreign currencies, which are represented principally by U.S.
dollars valued as of December 31, 2011 and 2010 at the foreign exchange rate of $13.9476/US$1.00 and $12.3496/US$1.00, respectively.

The financial position in foreign currency at the close of the year is as follows:



|                    |  |                         |        |   |      |     |        |  
|------------------- |  | ----------------------- | ------ | - | ---- | --- | ------ | -
|                    |  | Thousands of US dollars |       
|                    |  | 2011                    |        |   | 2010 |    
|Current assets      |  | US$                     | 8,791  |   |      | US$ | 7,265  |  
|Current liabilities |  |                         | (2,745 | ) |      |     | (6,189 | )
|                    |  |                         |        |   |      |     |        |  
|Net asset position  |  | US$                     | 6,046  |   |      | US$ | 1,076  |  
|                    |  |                         |        |   |      |     |        |  

As of the date of issue of the financial statements, the foreign exchange rate was $12.8575/US$ 1.00.

The most important foreign currency transactions conducted by The Company during the year are as follows:



|                                                   |  |                         |        |  |      |     |        | 
|-------------------------------------------------- |  | ----------------------- | ------ |  | ---- | --- | ------ | 
|                                                   |  | Thousands of US dollars |       
|                                                   |  | 2011                    |        |  | 2010 |    
|Sales abroad                                       |  | US$                     | 27,014 |  |      | US$ | 24,247 | 
|                                                   |  |                         |        |  |      |     |        | 
|Foreign purchases of inventories and fixed assets. |  | US$                     | 40,277 |  |      | US$ | 33,541 | 
|                                                   |  |                         |        |  |      |     |        | 



|5. | Accounts receivable
|-- | -------------------



|                                      |  |      |             |   |      |   |             |  
|------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                      |  | 2011 |             |   | 2010 |  
|Clients                               |  | $    | 427,047,587 |   |      | $ | 350,237,241 |  
|Less, allowance for doubtful accounts |  |      | (16,108,001 | ) |      |   | (16,108,001 | )
|Reserve for discount on sales         |  |      | (3,531,913  | ) |      |   | (3,531,913  | )
|                                      |  |      |             |   |      |   |             |  
|                                      |  |      | 407,407,673 |   |      |   | 330,597,327 |  
|Other accounts receivable             |  |      | 16,922,727  |   |      |   | 1,886,335   |  
|                                      |  |      |             |   |      |   |             |  
|                                      |  | $    | 424,330,400 |   |      | $ | 332,483,662 |  
|                                      |  |      |             |   |      |   |             |  



11



---

|6. | Inventories
|-- | -----------



|                                      |  |      |             |   |      |   |             |  
|------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                      |  | 2011 |             |   | 2010 |  
|Finished goods                        |  | $    | 143,967,051 |   |      | $ | 139,175,630 |  
|Work in process                       |  |      | 26,364,025  |   |      |   | 66,007,144  |  
|Raw materials                         |  |      | 139,935,386 |   |      |   | 127,954,005 |  
|                                      |  |      |             |   |      |   |             |  
|                                      |  |      | 310,266,462 |   |      |   | 333,136,779 |  
|Less, slow-moving inventory allowance |  |      | (15,264,854 | ) |      |   | (15,264,854 | )
|                                      |  |      |             |   |      |   |             |  
|                                      |  |      | 295,001,608 |   |      |   | 317,871,925 |  
|Merchandise on transit                |  |      | 6,659,695   |   |      |   | 1,583,260   |  
|                                      |  |      |             |   |      |   |             |  
|                                      |  | $    | 301,661,303 |   |      | $ | 319,455,185 |  
|                                      |  |      |             |   |      |   |             |  



|7. | Derivative financial instruments
|-- | --------------------------------

The Companys policy on hedging is that Using hedging permits it to mitigate the volatility of aluminum and natural gas prices and the exchange rate of the Mexican peso against the U.S. dollar
since all the hedging operations are strictly linked to its normal business operation with no speculative purposes.

The
Company has formed a Risk Management Committee, made up of first level executives, that is responsible for authorizing all hedging operations to be undertaken through observing the guidelines established by the Board of Directors.

As of December 31, 2011 have fully expired futures engaged by The Company.

At the end of December 2010 had the following derivative financial instrument positions:



|                                 |  |         |     |  |       |  |           |                 |  |  |                             |  |  |                                       |          |  |                                  |  |          |                  |  |  |                |  |  |                  |         |  |  |  |      |  |  |  |        | 
|-------------------------------- |  | ------- | --- |  | ----- |  | --------- | --------------- |  |  | --------------------------- |  |  | ------------------------------------- | -------- |  | -------------------------------- |  | -------- | ---------------- |  |  | -------------- |  |  | ---------------- | ------- |  |  |  | ---- |  |  |  | ------ | 
|Type ofderivative                |  | Tonnage |     |  | (US$) |  |           | Amount(mmbtus) |  |  | Averagecontractedprice(US$) |  |  | Fair value asofDecember 
31,2010(US$) |          |  | Change(US$aluminum)(MX$ dollars) |  |          | Totalchange(US$) |  |  | Roofvalue(US$) |  |  | Premiumpaid(US$) |        
|Price of aluminum (LME) forwards |  |         | 925 |  |       |  |           |                 |  |  |                             |  |  |                                       | 2,209.01 |  |                                  |  | 2,474.53 |                  |  |  | 265.52         |  |  |                  | 245,606 |  |  |  |      |  |  |  |        | 
|Price in US dollars forwards     |  |         |     |  |       |  | 1,950,000 |                 |  |  |                             |  |  |                                       | 12.37    |  |                                  |  | 12.42    |                  |  |  | 0.05           |  |  |                  | 7,658   |  |  |  |      |  |  |  |        | 
|Price gas, CAP                   |  |         |     |  |       |  |           |                 |  |  | 91,200                      |  |  |                                       |          |  |                                  |  |          |                  |  |  |                |  |  |                  |         |  |  |  | 6.00 |  |  |  | 18,432 | 

The fair value of futures contracts as of December 31, 2010 generated a profit of $3,127,711.



|8. | Other permanent investments
|-- | ---------------------------

As of December 31, 2011, The Company had 670,443 and 660,643 shares of Lifetime Brands, Inc. capital stock, which were booked at acquisition cost of $21,244,281 and $19,528,987, respectively.



|9. | Related parties
|-- | ---------------

In the
course of its operations, The Company performs the following transactions with other companies that are related parties. These transactions are as follows:



12



---

|                                                             |  |      |            |  |      |   |            | 
|------------------------------------------------------------ |  | ---- | ---------- |  | ---- | - | ---------- | 
|                                                             |  | 2011 |            |  | 2010 |  
|Expenses for:                                                |  |      |            |  |      |   |            | 
|Property leasing:                                            |  |      |            |  |      |   |            | 
|Inmobiliaria Aquiles Serdán, S. A. de C. V.                  |  | $    | 23,340,046 |  |      | $ | 23,390,181 | 
|Inmobiliaria Cuautitlán Santo Domingo, S. A. de C. V.        |  |      | 6,981,464  |  |      |   | 6,897,664  | 
|Professional fees:                                           |  |      |            |  |      |   |            | 
|Fomento de Capital, S. A. de C. V.                           |  |      | 5,420,501  |  |      |   | 4,507,630  | 
|Donations:                                                   |  |      |            |  |      |   |            | 
|Fundación para Nosotras las Mujeres, A. C.                   |  |      | 1,200,000  |  |      |   | 1,205,093  | 
|Other concepts:                                              |  |      |            |  |      |   |            | 
|Lifetime Brands, Inc. (Services)                             |  |      | 4,092,080  |  |      |   | 2,750,957  | 
|Lifetime Brands, Inc. (Merchandise purchases)                |  |      | 2,948,017  |  |      |   | 2,613,059  | 
|Lifetime Brands, Inc. (Royalties)                            |  |      | 2,569,886  |  |      |   | 2,800,070  | 
|Editorial Premiere, S. A. de C. V. (Advertising)             |  |      |            |  |      |   | 122,957    | 
|                                                             |  |      |            |  |      |   |            | 
|                                                             |  | $    | 46,551,994 |  |      | $ | 44,287,611 | 
|                                                             |  |      |            |  |      |   |            | 
|Income from:                                                 |  |      |            |  |      |   |            | 
|Fomento de Capital, S. A. de C. V. (Administrative Services) |  | $    | 1,687,979  |  |      |   |            | 
|Inmobiliaria Aquiles Serdán, S. A. de C. V. (Services)       |  |      | 900,000    |  |      | $ | 900,000    | 
|Lifetime Brands, Inc. (Share in sales to Costco México)      |  |      | 436,056    |  |      |   | 1,346,058  | 
|Lifetime Brands, Inc. (Royalties)                            |  |      | 218,464    |  |      |   | 495,364    | 
|                                                             |  |      |            |  |      |   |            | 
|                                                             |  | $    | 3,242,499  |  |      | $ | 2,741,422  | 
|                                                             |  |      |            |  |      |   |            | 



|10. | Properties, machinery and equipment
|--- | -----------------------------------



|                                |  |      |               |   |      |   |              |                  |  |           
|------------------------------- |  | ---- | ------------- | - | ---- | - | ------------ | ---------------- |  | ----------
|                                |  | 2011 |               |   | 2010 |   |              | Depreciationrate
|Machinery and equipment         |  | $    | 773,865,479   |   |      | $ | 745,779,568  |                  |  | 4, 8 y 10%
|Building and installations      |  |      | 98,313,900    |   |      |   | 73,789,328   |                  |  | 3.3 y 5%  
|Adaptations and improvements    |  |      | 39,198,069    |   |      |   | 21,104,445   |                  |  | 5%        
|Office furniture and equipment  |  |      | 66,748,655    |   |      |   | 60,417,643   |                  |  | 30 y 10%  
|Transportation equipment        |  |      | 34,909,142    |   |      |   | 29,936,086   |                  |  | 25%       
|                                |  |      |               |   |      |   |              |                  |  |           
|                                |  |      | 1,013,035,245 |   |      |   | 931,027,070  |                  |  |           
|                                |  |      |               |   |      |   |              |                  |  |           
|Less, accumulated depreciation: |  |      |               |   |      |   |              |                  |  |           
|Machinery and equipment         |  |      | (570,358,599  | ) |      |   | (555,511,527 | )                |  |           
|Building and installations      |  |      | (35,504,518   | ) |      |   | (37,230,017  | )                |  |           
|Adaptations and improvements    |  |      | (4,518,035    | ) |      |   | (119,227     | )                |  |           
|Office furniture and equipment  |  |      | (49,136,287   | ) |      |   | (46,827,373  | )                |  |           
|Transportation equipment        |  |      | (24,340,826   | ) |      |   | (24,276,339  | )                |  |           
|                                |  |      |               |   |      |   |              |                  |  |           
|                                |  |      | (683,858,265  | ) |      |   | (663,964,483 | )                |  |           
|                                |  |      |               |   |      |   |              |                  |  |           
|                                |  |      | 329,176,980   |   |      |   | 267,062,587  |                  |  |           
|Land                            |  |      | 59,808,632    |   |      |   | 53,825,160   |                  |  |           
|Projects in process             |  |      | 45,642,097    |   |      |   | 21,867,592   |                  |  |           
|Asset impairment reserve        |  |      | (7,302,014    | ) |      |   | (7,302,014   | )                |  |           
|                                |  |      |               |   |      |   |              |                  |  |           
|Total                           |  | $    | 427,325,695   |   |      | $ | 335,453,325  |                  |  |           
|                                |  |      |               |   |      |   |              |                  |  |           



13



---

In order to guarantee the loans that were granted by Scotiabank Inverlat, S. A., The Company
and Ekco Querétaro, S. A. de C. V., formed an industrial mortgage and Industria Mexicana del Aluminio, S. A. de C. V. formed a civil and industrial mortgage.

Annual depreciation charged to results was $28,045,456 in 2011 and $22,775,732 in 2010.



|11. | Deferred charges
|--- | ----------------



|                               |  |      |            |   |      |   |            |  
|------------------------------ |  | ---- | ---------- | - | ---- | - | ---------- | -
|                               |  | 2011 |            |   | 2010 |  
|Trademarks                     |  | $    | 11,948,332 |   |      | $ | 11,856,925 |  
|Less, accumulated amortization |  |      | (969,354   | ) |      |   | (373,843   | )
|                               |  |      |            |   |      |   |            |  
|                               |  | $    | 10,978,978 |   |      | $ | 11,483,082 |  
|                               |  |      |            |   |      |   |            |  

In December, 2010, The Company acquired from World Kitchen, LLC. and Ekco Housewares, Inc., for an amount
of $10,856,925, the rights of trademark EKCO for the territories of Colombia and Central America (Belize, Costa Rica, El Salvador, Honduras, Guatemala, Panama, and Nicaragua). The acquisition is part of an export strategy designed by The Company,
which will support the accomplishment of planned foreign sales objectives.

Amortization charged to results was $595,511 in
2011 and $685,536 in 2010.



|12. | Bank loans
|--- | ----------

As of
December 31, 2011 and 2010, this heading is made up as follows:



|                      |  |                 |  |            |            |  |               |            |                    |   |            |  |  |   |            | 
|--------------------- |  | --------------- |  | ---------- | ---------- |  | ------------- | ---------- | ------------------ | - | ---------- |  |  | - | ---------- | 
|                      |  |                 |  |            |            |  |               |            | 2011               |  
|Financial institution |  | Type of loan    |  | Due date   |            |  | Interest rate |            | Thousands of pesos |  
|                      |  |                 |  | Short term |            |  | Long term     |           
|Scotiabank Inverlat   |  | Mortgage        |  |            | 31-01-2014 |  |               | 10.28%     |                    | $ | 6,000,000  |  |  | $ | 25,500,000 | 
|Scotiabank Inverlat   |  | Current account |  |            | 31-01-2014 |  |               | THE + 2.8% |                    |   | 25,447,063 |  |  |   |            | 
|                      |  |                 |  |            |            |  |               |            |                    |   |            |  |  |   |            | 
|                      |  |                 |  |            |            |  |               |            |                    | $ | 31,447,063 |  |  | $ | 25,500,000 | 
|                      |  |                 |  |            |            |  |               |            |                    |   |            |  |  |   |            | 
|                      |  |                 |  |           
|                      |  |                 |  |            |            |  |               |            | 2010               |  
|Scotiabank Inverlat   |  | Mortgage        |  |            | 31-01-2014 |  |               | 10.28%     |                    | $ | 6,000,000  |  |  | $ | 31,500,000 | 
|                      |  |                 |  |            |            |  |               |            |                    |   |            |  |  |   |            | 

In order to guarantee the mortgage credit and the credit line, The Company, Industria Mexicana del
Aluminio, S. A. de C. V. and Ekco Querétaro, S. A. de C. V. created an industrial mortgage in order to guarantee the mortgage credit and credit line with Scotiabank Inverlat, S. A. Industria Mexicana del Aluminio, S. A. de C. V. created a
civil mortgage as well. Additionally, as a part of the loan guarantee The Companys subsidiaries cosigner the loan agreement with the Bank.

The bank-loan agreements establish certain obligations. These obligations include limitations on the payment of dividends, maintaining certain financial ratios, maintaining its pledged goods insured. The
Company may not sell, place a lien on, or dispose of the goods, contract direct or contingent liabilities or any contractual indebtedness. As of the date of the accompanying financial statements, The Company has complied with all the obligations
agreed upon with Scotiabank Inverlat, S. A.



14



---

|13. | Provisions
|--- | ----------

As of
December 31, 2011 and 2010, The Company has the following provisions:



|                 |  |                                |            |  |                   |   |            |          |  |   |                                |  |  |   |            | 
|---------------- |  | ------------------------------ | ---------- |  | ----------------- | - | ---------- | -------- |  | - | ------------------------------ |  |  | - | ---------- | 
|                 |  | Balances as ofDecember 31,2010 |            |  | Charged toresults |   |            | Payments |  |   | Balances as ofDecember 31,2011 | 
|Other provisions |  | $                              | 45,124,892 |  |                   | $ | 20,879,506 |          |  | $ | 29,782,997                     |  |  | $ | 36,221,401 | 
|                 |  |                                |            |  |                   |   |            |          |  |   |                                |  |  |   |            | 



|14, | Long-term debt
|--- | --------------

In May,
2011, IMASA held a contract with title reservation and ad corpus with Tavistock investment Group, Inc. de CV (Tavistock), for the purchase an adjacent land for the amount of $34,870,563, of which $10,200,000 was paid to the signing of the contract
and $24,670,564 will be paid on January 31, 2014, when the ownership of the land be transferred and the title reservation and ad corpus be canceled. Tavistock currently has a leasing agreement with a third party, due on December 31, 2013.



|15. | Employee benefits
|--- | -----------------

The
Company maintains a Liability to cover seniority premium, retirement plan payment and severance, which are determined by actuarial studies using the projected unit cost method. The actuarial calculations as of December 31, 2011 and 2010 are
summarized below:



|                                                                 |  |                   |            |   |                 |   |             |              |  |   |            |   |  |   |             |  
|---------------------------------------------------------------- |  | ----------------- | ---------- | - | --------------- | - | ----------- | ------------ |  | - | ---------- | - |  | - | ----------- | -
|                                                                 |  | 2011              |           
|                                                                 |  | Senioritypremiums |            |   | Retirement plan |   |             | Termpayments |  |   | Total      |  
|Defined benefit liabilities                                      |  | $                 | (5,044,849 | ) |                 | $ | (10,409,292 | )            |  | $ | (4,278,909 | ) |  | $ | (19,733,050 | )
|Items pending to be recognized                                   |  |                   | 392,201    |   |                 |   | 995,232     |              |  |   | 157,657    |   |  |   | 1,545,090   |  
|                                                                 |  |                   |            |   |                 |   |             |              |  |   |            |   |  |   |             |  
|Liability recognized in the balance sheet at the end of the year |  | $                 | (4,652,648 | ) |                 | $ | (9,414,060  | )            |  | $ | (4,121,252 | ) |  | $ | (18,187,960 | )
|                                                                 |  |                   |            |   |                 |   |             |              |  |   |            |   |  |   |             |  
|Net cost for the period:                                         |  |                   |            |   |                 |   |             |              |  |   |            |   |  |   |             |  
|Labor cost of current service                                    |  | $                 | 563,403    |   |                 | $ | 849,523     |              |  | $ | 889,154    |   |  | $ | 2,302,080   |  
|Financial cost                                                   |  |                   | 325,192    |   |                 |   | 708,250     |              |  |   | 227,116    |   |  |   | 1,260,558   |  
|Amortization of the transition liability                         |  |                   | 36,380     |   |                 |   | 58,326      |              |  |   | 111,871    |   |  |   | 206,577     |  
|Net actuarial loss (gain)                                        |  |                   | 148,810    |   |                 |   |             |              |  |   | 1,014,022  |   |  |   | 1,162,832   |  
|Labor cost of prior services                                     |  |                   | 60,821     |   |                 |   | 328,692     |              |  |   | 45,787     |   |  |   | 435,300     |  
|Effect from the advances payment/reduction of liabilities        |  |                   | (96,005    | ) |                 |   | (1,105,764  | )            |  |   |            |   |  |   | (1,201,769  | )
|                                                                 |  |                   |            |   |                 |   |             |              |  |   |            |   |  |   |             |  
|Net cost for the period                                          |  | $                 | 1,038,601  |   |                 | $ | 839,027     |              |  | $ | 2,287,950  |   |  | $ | 4,165,578   |  
|                                                                 |  |                   |            |   |                 |   |             |              |  |   |            |   |  |   |             |  
|Discount rate                                                    |  |                   | 7.50       | % |                 |   | 7.50        | %            |  |   | 7.50       | % |  |   |             |  
|Rate of salary increase                                          |  |                   | 5.31       | % |                 |   | 5.31        | %            |  |   | 5.31       | % |  |   |             |  
|Rate of minimum salary increase                                  |  |                   | 4.27       | % |                 |   | 4.27        | %            |  |   | 4.27       | % |  |   |             |  
|Period of items pending to be amortized                          |  |                   | 4 year     |   |                 |   | 4 year      |              |  |   | 4 year     |   |  |   |             |  



15



---

|                                                                 |  |                   |            |   |                |   |            |              |  |   |            |   |  |   |             |  
|---------------------------------------------------------------- |  | ----------------- | ---------- | - | -------------- | - | ---------- | ------------ |  | - | ---------- | - |  | - | ----------- | -
|                                                                 |  | 2010              |           
|                                                                 |  | Senioritypremiums |            |   | Retirementplan |   |            | Termpayments |  |   | Total      |  
|Defined benefit liabilities                                      |  | $                 | (4,461,383 | ) |                | $ | (9,443,337 | )            |  | $ | (3,514,189 | ) |  | $ | (17,418,909 | )
|Items pending to be recognized                                   |  |                   | 428,893    |   |                |   | 868,304    |              |  |   | 315,315    |   |  |   | 1,612,512   |  
|                                                                 |  |                   |            |   |                |   |            |              |  |   |            |   |  |   |             |  
|Liability recognized in the balance sheet at the end of the year |  | $                 | (4,032,490 | ) |                | $ | (8,575,033 | )            |  | $ | (3,198,874 | ) |  | $ | (15,806,397 | )
|                                                                 |  |                   |            |   |                |   |            |              |  |   |            |   |  |   |             |  
|Net cost for the period:                                         |  |                   |            |   |                |   |            |              |  |   |            |   |  |   |             |  
|Labor cost of current service                                    |  | $                 | 352,066    |   |                | $ | 715,188    |              |  | $ | 536,812    |   |  | $ | 1,604,066   |  
|Financial cost                                                   |  |                   | 387,770    |   |                |   | 664,121    |              |  |   | 131,668    |   |  |   | 1,183,559   |  
|Amortization of the transition liability                         |  |                   | 37,768     |   |                |   | 58,326     |              |  |   | 215,993    |   |  |   | 312,087     |  
|Labor cost of prior services                                     |  |                   | 60,447     |   |                |   | 221,311    |              |  |   | 45,787     |   |  |   | 327,545     |  
|Net actuarial loss (gain)                                        |  |                   | (185,721   | ) |                |   |            |              |  |   | 1,271,163  |   |  |   | 1,085,442   |  
|Effect from the advances payment/ reduction of liabilities       |  |                   | (477,959   | ) |                |   |            |              |  |   |            |   |  |   | (477,959    | )
|                                                                 |  |                   |            |   |                |   |            |              |  |   |            |   |  |   |             |  
|Net cost for the period                                          |  | $                 | 174,371    |   |                | $ | 1,658,946  |              |  | $ | 2,201,423  |   |  | $ | 4,034,740   |  
|                                                                 |  |                   |            |   |                |   |            |              |  |   |            |   |  |   |             |  
|Discount rate                                                    |  |                   | 7.50       | % |                |   | 7.50       | %            |  |   | 7.50       | % |  |   |             |  
|Rate of salary increase                                          |  |                   | 5.31       | % |                |   | 5.31       | %            |  |   | 5.31       | % |  |   |             |  
|Rate of minimum salary increase                                  |  |                   | 4.27       | % |                |   | 4.27       | %            |  |   | 4.27       | % |  |   |             |  
|Period of items pending to be amortized                          |  |                   | 4 years    |   |                |   | 4 years    |              |  |   | 4 years    |   |  |   |             |  



|16. | Shareholders equity
|--- | --------------------



| | a. | Capital stock
| | -- | -------------

As of
December 31, 2011, The Companys capital stock is represented by one series of 87,166,000 registered common shares, with no par value, fully subscribed and paid.

As of December 31, 2011 and 2010, shareholders equity is as follows:



|                     |  |            |             |   |             |   |             |       |  |   |             |   |  |   |             |  
|-------------------- |  | ---------- | ----------- | - | ----------- | - | ----------- | ----- |  | - | ----------- | - |  | - | ----------- | -
|                     |  | 2011       |             |   | 2010        |  
|                     |  | Historical |             |   | Restatement |   |             | Total |  |   | Total       |  
|Capital stock        |  | $          | 346,692,855 |   |             | $ | 95,763,040  |       |  | $ | 442,455,895 |   |  | $ | 442,455,895 |  
|Legal reserve        |  |            | 26,248,456  |   |             |   | 2,781,705   |       |  |   | 29,030,161  |   |  |   | 22,768,637  |  
|Retained earnings    |  |            | 357,942,722 |   |             |   | 3,307,989   |       |  |   | 361,250,711 |   |  |   | 260,411,261 |  
|Income for the year  |  |            | 132,376,481 |   |             |   |             |       |  |   | 132,376,481 |   |  |   | 125,230,484 |  
|Repurchase of shares |  |            | (7,498,266  | ) |             |   |             |       |  |   | (7,498,266  | ) |  |   | (5,753,926  | )
|                     |  |            |             |   |             |   |             |       |  |   |             |   |  |   |             |  
|                     |  | $          | 855,762,248 |   |             | $ | 101,852,734 |       |  | $ | 957,614,982 |   |  | $ | 845,112,351 |  
|                     |  |            |             |   |             |   |             |       |  |   |             |   |  |   |             |  

Net income for the year is subject to a legal requirement that 5% thereof be transferred to a legal
reserve until the reserve equals 20% of the capital stock as established by the Mexican General Law of Commercial Companies.

The Company must pay the prevailing income tax on its profit that is distributed as a dividend that was previously paid tax-free. In the
event of a reduction of capital, the excess shareholders equity on restated paid-in capital would be treated as a dividend, in accordance with the Mexican Income Tax Law.

At the April 29, 2011 general annual shareholders meeting the net income of 2010 was approved and applied. It also approved a declaration of dividends for $18,304,860, from which $18,129,510
was paid, since The Company had repurchased shares as of that date, which have not received payment of dividends.



16



---

At the April 29, 2010 general annual shareholders meeting the net income of 2009
was approved and applied. It also approved a declaration of dividends for $16,561,540.

Restrictions to shareholders

On tax bases, the restated amount of paid-in capital amounting to $655,957,568 may be refunded to the shareholders tax-free
provided that the amount is equal to or greater than shareholders equity.



| | b. | Repurchase of its own shares
| | -- | ----------------------------

In
compliance with the Mexican Stock Market Law, during the general annual shareholders meeting held on April 29, 2011, the amount of $6,000,000 was approved for the repurchase of Company shares in 2011. As of December 31, 2011, The
Company had repurchased 900,000 own shares in the amount of $7,498,266.



| | c. | Comprehensive income
| | -- | --------------------

The
comprehensive income presented in the statements of changes in shareholders equity represents The Companys total performance during the year and consists of those items mentioned below that, in compliance with Mexican financial reporting
standards, are carried directly to shareholders equity.



|                        |  |      |             |  |      |   |             | 
|----------------------- |  | ---- | ----------- |  | ---- | - | ----------- | 
|                        |  | 2011 |             |  | 2010 |  
|Net income for the year |  | $    | 132,376,481 |  |      | $ | 125,230,484 | 
|                        |  |      |             |  |      |   |             | 
|Comprehensive income    |  | $    | 132,376,481 |  |      | $ | 125,230,484 | 
|                        |  |      |             |  |      |   |             | 



|17. | Income tax (ISR), flat business tax (IETU) and tax on assets (IMPAC)
|--- | --------------------------------------------------------------------

In accordance with the current tax legislation through 2008, companies must pay the greater of ISR and IETU. The ISR rate was 28% up to 2009, from 2010 to 2012 it will be 30%, in 2013 it will be 29% and
as of 2014 and thereafter it is once again 28%. The IETU rate is 16.5% for 2008, 17% for 2009, and 17.5% for 2010 and thereafter.



| | a. | Income tax
| | -- | ----------

Taxable income
differs from accounting income due to permanent differences, principally items included in the income statement to reflect the effects of inflation, and to timing differences affecting accounting and taxable income in different periods.

The Company follows the practice of recognizing the effects from deferred taxes. Deferred income tax is determined on the assets and
liabilities method, which compares the book and tax values of the assets and liabilities and from which timing differences result. The applicable tax rate is applied to these timing differences.

The tax expense attributable to the gain was different from what would have resulted by applying the 30% ISR rate to the income before the
tax on earnings as a result of the following items:



|                                           |  |      |    |    |      |  |    |   
|------------------------------------------ |  | ---- | -- | -- | ---- |  | -- | --
|                                           |  | 2011 |    |    | 2010 | 
|Anticipated expense                        |  |      | 30 | %  |      |  | 30 | % 
|Increase (decrease) from:                  |  |      |    |    |      |  |    |   
|FIDECINE fiscal stimulus                   |  |      | (1 | )% |      |  |    |   
|Tax benefit from crediting of tax on asset |  |      | (1 | )% |      |  | (1 | )%
|Effect from IETU incurred greater than ISR |  |      | 1  | %  |      |  | 3  | % 
|Effect of deferred IETU                    |  |      | 1  | %  |      |  | 1  | % 
|Others, net                                |  |      | 1  | %  |      |  | (1 | )%
|                                           |  |      |    |    |      |  |    |   
|Effective tax rate                         |  |      | 31 | %  |      |  | 32 | % 
|                                           |  |      |    |    |      |  |    |   



17



---

As of December 31, 2011 and 2010, the net charge to results from taxes is as follows:



|                                                    |  |      |            |   |      |   |            |  
|--------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | -
|                                                    |  | 2011 |            |   | 2010 |  
|Accrued income tax                                  |  | $    | 52,455,455 |   |      | $ | 50,042,620 |  
|Accrued flat rate business tax                      |  |      | 5,658,671  |   |      |   | 5,818,378  |  
|Deferred income tax                                 |  |      | 4,248,112  |   |      |   | 4,971,468  |  
|Tax benefit from the crediting of the tax on assets |  |      | (1,592,483 | ) |      |   | (1,714,560 | )
|                                                    |  |      |            |   |      |   |            |  
|                                                    |  | $    | 60,769,755 |   |      | $ | 59,117,906 |  
|                                                    |  |      |            |   |      |   |            |  

The effects from timing differences that resulted in deferred taxes as of December 31, 2011 and 2010 are
as follows:



|                                      |  |      |             |   |      |   |             |  
|------------------------------------- |  | ---- | ----------- | - | ---- | - | ----------- | -
|                                      |  | 2011 |             |   | 2010 |  
|Income tax:                           |  |      |             |   |      |   |             |  
|Properties, machinery and equipment   |  | $    | (31,603,036 | ) |      |   | (31,600,455 | )
|Provisions                            |  |      | 18,299,666  |   |      |   | 20,500,021  |  
|Tax on assets pending to be recovered |  |      | 14,332,347  |   |      |   | 15,431,037  |  
|Tax losses                            |  |      | 1,947,316   |   |      |   | 1,990,895   |  
|Prepayments from clients              |  |      | 42,984      |   |      |   | 110,294     |  
|                                      |  |      |             |   |      |   |             |  
|                                      |  |      | 3,019,277   |   |      |   | 6,431,792   |  
|                                      |  |      |             |   |      |   |             |  
|Flat rate business tax:               |  |      |             |   |      |   |             |  
|Accounts receivable                   |  |      | (11,371,694 | ) |      |   | (10,441,709 | )
|Accounts payable                      |  |      | 6,456,629   |   |      |   | 6,454,435   |  
|Tax credits                           |  |      | 1,127,301   |   |      |   | 1,035,107   |  
|                                      |  |      |             |   |      |   |             |  
|                                      |  |      | (3,787,764  | ) |      |   | (2,952,167  | )
|                                      |  |      |             |   |      |   |             |  
|Employee profit sharing:              |  |      |             |   |      |   |             |  
|Liability reserve                     |  |      | 3,836,121   |   |      |   | 3,607,657   |  
|                                      |  |      |             |   |      |   |             |  
|Deferred asset tax                    |  | $    | 3,067,634   |   |      | $ | 7,087,282   |  
|                                      |  |      |             |   |      |   |             |  

The deferred asset tax corresponds to the tax that has been paid in excess of the incurred income tax and
that could be subject to a refund or an offset in compliance with the current tax guidelines.

In order to evaluate the
recoverability of deferred assets, The Company management considers the probability that a part or the total of them will not be recovered. The final realization of deferred assets depends on the generation of taxable income in periods in which the
timing differences are deductible. In preparing this assessment, The Company management considers the expected reversal of deferred liabilities, projected taxable profits, and planning strategies.



| | b. | Tax on assets
| | -- | -------------

Up to
December 31, 2006, the IMPAC Law established a 1.8% tax on restated assets, deducted from certain liabilities. As of 2007, the tax rate was 1.25% with no deductions permitted.



18



---

Up to December 31, 2007, the incurred IMPAC in excess of the years ISR could be
recovered in the following ten years, restated by inflation, provided that in those years the ISR exceeded the IMPAC. Moreover, the ISR incurred in excess of the years IMPAC could be credited with the IMPAC incurred in the following three
years.

As of December 31, 2011, The Company has the following tax on assets to be recovered:



|               |  |  |  |  |  |                   |  |        |            | 
|-------------- |  |  |  |  |  | ----------------- |  | ------ | ---------- | 
|Year of origin |  |  |  |  |  | Year ofexpiration |  | Amount |           
|2002           |  |  |  |  |  | 2012              |  | $      | 926,619    | 
|2003           |  |  |  |  |  | 2013              |  |        | 4,388,982  | 
|2004           |  |  |  |  |  | 2014              |  |        | 4,991,181  | 
|2005           |  |  |  |  |  | 2015              |  |        | 4,025,565  | 
|               |  |  |  |  |  |                   |  |        |            | 
|               |  |  |  |  |  |                   |  | $      | 14,332,347 | 
|               |  |  |  |  |  |                   |  |        |            | 

As of December 31, 2010 the IA amount to be recovered was $15,431,037.



| | c. | Flat rate business tax
| | -- | ----------------------

On
October 1, 2007, new laws were published, a number of tax laws were revised, and additionally a presidential decree was issued on November 5, 2007, which states that the laws will become applicable on January 1, 2008, emphasizing the
following: (1) the Tax on Assets Law is repealed, and (ii) a new tax (Flat Rate Business Tax or IETU), which is based on cash flows and certain restrictions for authorized deductions in addition to the granting of tax credits mainly in
connection with inventories, salaries taxed for income tax purposes, social security contributions, tax losses arising from accelerated deduction, recoverable asset tax, and deductions related to fixed asset investments, deferred charges and
expenses.

Accordingly, beginning in 2008, companies will be required to pay the greater of IETU and income tax. In case IETU
is incurred, the payment will be regarded as final, not subject to recovery in subsequent years.



| | d. | Tax on cash deposits
| | -- | --------------------

In 2011
and 2010, the Tax on Cash Deposits (IDE) was incurred at the 3% rate on the excess on cash deposits monthly that in a cumulative manner exceed $15,000, considering that this will be applicable by each institution of the Mexican Financial System. IDE
will credited against ISR of the year, and in any case against the ISR withhold to third parties.



|18. | Contingencies
|--- | -------------



| | a. | The Company filed an appeal to reverse the denial of a tax credit for alleged non-payment of $8,010,485 for wastewater discharge rights during the period from the first
bimester of 2003 to the fourth bimester of 2007. The appeal was decided on October 31, 2011, upholding the decision of denial. However, in accordance with the foregoing, the Company filed a claim in the Administrative Court of the Federal
District seeking to invalidate the decision on November 24, 2011. As of the date of Issuance of the financial statements, the permissible period for the filing by the tax authority of its answer to the Companys claim had not expired. To
the best of the knowledge of the Companys lawyers handling the matter, the Company has sufficient evidence to obtain a favorable result.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Fomento Productive, S. A. de C. V. filed an appeal to challenge the decision of the lower court in an invalidity proceeding issued in its own favor, alleging excessive
enforcement of the judgment, that the (taxing) authority erroneously and in excess of its powers imposed tax liability for the alleged non-payment of $1,991,555. The appeal was handled as a trial de novo by the Federal Court of Tax and
Administrative Justice, being previously filed and accepted as a proceeding for invalidity. On February 20, 2012, the (Court) declared the total invalidity of the challenged decision. The tax authority may still bring the appeal before the
circuit courts. The lawyers overseeing the matter believe that the Company has sufficient evidence to obtain a favorable result.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



19



---

| | c. | In line with current tax legislation, Mexican tax authorities are empowered to audit for the five years prior to the most recent income tax return filed.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | In accordance with the Mexican Income Tax Law, companies that operate with national or foreign related parties are subject to tax limitations and obligations insofar as
the determination of agreed-upon prices is concerned. These prices must be equal to those used with or between independent parties in comparable operations.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|19. | Commitments
|--- | -----------



| | a. | On September 10, 2007, The Company executed the leasing agreement for the property located at Av. 16 de Septiembre, No. 31, Colonia Santo Domingo,
Delegación Azcapotzalco, Mexico City, by and between Inmobiliaria Aquiles Serdán, S. A. de C. V. The term of the agreement was three years with a monthly rent of USD$175,000. The term of the agreement was mandatory for the parties
during the first year and mandatory for the lessor for the two subsequent years. On November 25, 2008, an amendment agreement was executed to change the monthly rent from the agreement dated September 10, 2007 to a monthly of USD$44,954.
Additionally, a second amendment agreement was executed in September 2010 to extend the lease term two years more.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | On November 25, 2008, The Company executed the leasing agreement of a property located at Av. 16 de Septiembre No. 346, Cuautitlán México, State
of Mexico by and between Inmobiliaria Cuautitlán Santo Domingo, S.A. de C.V. with a term of fifteen years with a monthly rent of USD$138,672, and a guarantee deposit equivalent to 6.5% of the value of the lease in time. The term is mandatory
for the parties.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In 2008, Company Management decided to relocate operations from the Av. 16 de Septiembre No,
31, Colonia Santo Domingo, Delegación Azcapotzalco, Mexico City, and Queretaro facility, the last one property of subsidiary company Ekco Querétaro, S. A. de C. V., to the leased facility mentioned in the paragraph above. During 2009
and 2010, Manufacturing and Distribution Center were relocated, as well as the Finance, Human Resources, and Purchasing areas. It has been considered that the relocation of the entire operation of Ekco Querétaro, S. A. de C. V., will be
concluded during the first semester of 2012, as well as the relocation of the Sales, Marketing, and Category Management Areas.



| | c. | As a result of the association that The Company formed with the North American company Lifetime Brands, Inc., various reciprocal commitments were acquired, among which
the is following underscored;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Lifetime Brands, Inc. has the option to sell the shares of its subsidiary, LTB de
Mexico, S. A. de C. V., which is the holding company of 29.9% of The Companys shares, to The Company under certain assumptions that could take place at two different instances: i) on the first anniversary of LTB de Mexico, S. A. de C.
V.s subscription and payment of Company shares by LTB de México, S. A. de C. V. or, ii) between the third and fifth year of the investment. It is worth mentioning that option i) as mentioned in this paragraph was not exercised by
Lifetime Brands, Inc.

The Company management considers that it will be able to meet the commitments acquired
with Lifetime Brands, Inc.



|20. | Segmented information
|--- | ---------------------

The Company has two business segments: (i) the production and sale of aluminum kitchen products and the sale of various products for
the same market and, (ii) the production and sale of aluminum products used as raw materials in different industries.



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---

The figures for each business segment are shown below:

The production and sale of aluminum kitchen products and the sale of various products for the same market are as follows:



|                   |  |                                  |           |  |                           |  |       |                                  |  |   |                           |  |  |  |       | 
|------------------ |  | -------------------------------- | --------- |  | ------------------------- |  | ----- | -------------------------------- |  | - | ------------------------- |  |  |  | ----- | 
|                   |  | 2011                             |           |  | 2010                      | 
|                   |  | Figures inthousandsMexican pesos |           |  | % overconsolidatedfigures |  |       | Figures inthousandsMexican pesos |  |   | % overconsolidatedfigures | 
|Net sales          |  | $                                | 1,067,489 |  |                           |  | 64.63 |                                  |  | $ | 899,784                   |  |  |  | 62.90 | 
|Operating expenses |  |                                  | 217,819   |  |                           |  | 83.11 |                                  |  |   | 179,126                   |  |  |  | 83.26 | 
|Net income         |  |                                  | 76,932    |  |                           |  | 58.12 |                                  |  |   | 68,822                    |  |  |  | 54.96 | 
|Total assets       |  |                                  | 862,391   |  |                           |  | 70.10 |                                  |  |   | 718,640                   |  |  |  | 65.70 | 
|Total liabilities  |  |                                  | 148,159   |  |                           |  | 54.35 |                                  |  |   | 112,942                   |  |  |  | 45.41 | 

The production and sale of aluminum products used as raw materials in different industries (IMASA).



|                   |  |                                  |         |  |                           |  |       |                                  |  |   |                           |  |  |  |       | 
|------------------ |  | -------------------------------- | ------- |  | ------------------------- |  | ----- | -------------------------------- |  | - | ------------------------- |  |  |  | ----- | 
|                   |  | 2011                             |         |  | 2010                      | 
|                   |  | Figures inthousandsMexican pesos |         |  | % overconsolidatedfigures |  |       | Figures inthousandsMexican pesos |  |   | % overconsolidatedfigures | 
|Net sales          |  | $                                | 584,092 |  |                           |  | 35.37 |                                  |  | $ | 530,744                   |  |  |  | 37.10 | 
|Operating expenses |  |                                  | 44,263  |  |                           |  | 16.89 |                                  |  |   | 36,006                    |  |  |  | 16.74 | 
|Net income         |  |                                  | 55,444  |  |                           |  | 41.88 |                                  |  |   | 56,408                    |  |  |  | 45.04 | 
|Total assets       |  |                                  | 367,841 |  |                           |  | 29.90 |                                  |  |   | 375,183                   |  |  |  | 34.30 | 
|Total liabilities  |  |                                  | 124,461 |  |                           |  | 45.65 |                                  |  |   | 135,768                   |  |  |  | 54.59 | 



|21, | Effects of adoption of the International Financial Reporting Standards (IFRS)
|--- | -------------------------------------------------------------------------------

The National Banking and Securities Commissions (CNBV) established the requirement whereby certain entities that disclose their financial
information to the public through the Mexican Stock Exchange (BMV), must as of the year 2012 prepare and disclose their financial information based on International Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board (IASB).

The financial statements that will be issued by The Company for the year ending December 31, 2012
will be its first annual financial statements that comply with IFRS. The transition date will be January 1, 2011 and, for this reason, the year ended December 31, 2011 will be the comparative period covered by the adoption standard IFRS 1,
Initial Adoption of International Financial Reporting Standards. In accordance with IFRS 1:

The Company will apply the
mandatory exceptions to the retrospective application of the IFRS, as follows:



| | i) | Calculation of estimates.-The estimates at the transition date are consistent with the estimates as of that date in accordance with Mexican Financial Reporting
Standards (NIF).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii) | Accounting for hedges.- The Company will apply hedge accounting as of the transition date only if the hedge relationship complies with the criteria established in the
IFRS.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii) | Noncontrolling interests. - Given that at the transition date the percentage represented by the noncontrolling interest in The Companys stockholders equity
is immaterial, this exception will not have a significant effect.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21



---

The Company will apply the optional exemptions to the retrospective application of the IFRS,
as follows:



| | i) | Assumed cost.- The Company will apply the assumed cost exemption for properties, machinery and equipment. Therefore, it has elected to use the fair value as assumed
cost for certain items of land, buildings and machinery and equipment determined through appraisals as of the transition date. By the same token, it has elected to use the revalued NIF values as assumed cost for furniture and fixtures, vehicles,
computers and leasehold improvements, on the basis that these are broadly comparable with the depreciated cost under IFRS as of the transition date.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ii) | Employee benefits.-The Company will apply the employee benefits exemption. Therefore, it recognizes all of the actuarial gains and losses accumulated as of the
transition date.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iii) | Differences accumulated due to the effect of conversion.- The Company will apply this exemption. Therefore, as of the transition date it will reclassify to retained
earnings the accumulated effects of conversion of entities with a different functional current from that of the latter.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv) | Classification of financial instruments already recognized.- The Company elected to designate certain investments as available for sale as of the transition date.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | v) | Costs of loans.- The Company will apply the requirements established in the IFRS as of the transition date.
| | -- | -----------------------------------------------------------------------------------------------------------

Below we summarize the principal differences which The Company has identified in its transition from the NIF to IFRS as of the date of
these financial statements, together with an estimate of the significant effects. The amounts which are disclosed below may be modified, because The Company is still analyzing their effects:



| | a. | Valuation of financial instruments available for sale.- The IFRS require that financial instruments be classified in accordance with the categories available for them.
The classification and valuation depend on the intended use for the financial assets and liabilities. The Company will classify and value the investment in shares in which there is no control, joint control or significant influence, as financial
instruments available for sale. The effect of this classification and valuation will originate a benefit in stockholders equity at the transition date of approximately $95,000,000.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Revaluation of properties, machinery and equipment.- The Company used the voluntary exemption for Assumed cost established in IFRS 1 First
adoption to determine the value of its property, plant and equipment at the start of the transition date and elected to determine the fair value for some of its assets and revalued NIF values for others. The adjustment to the values of
properies, machinery and equipment will originate an approximate benefit in stockholders equity at the transition date of $31,000,000. The effect on the depreciation for the year 2011 is not expected to be significant.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | Benefits from termination and recognition of actuarial gains and losses.- The IFRS establish that the benefits from termination refer to an obligation which arises from
the termination of the employment relationship, not from a service rendered. For this reason, it can only be recorded when the payment obligation is generated, or based on the requirements of formal retirement plans. Furthermore, The Company elected
to recognize the unamortized actuarial gains and losses related to the seniority premium and pension plan as of the transition date, in accordance with the voluntary exemption contained in IFRS 1, First adoption. The effects derived from
this requirement are not material in the financial statements.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | Cancellation of deferred PTU.- The IFRS do not allow for the recognition of deferred PTU. The Company will cancel the amount recognized as deferred PTU. The effect of
its recognition in stockholders equity as of the transition date is a decrease of approximately $3,000,000.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22



---

| | e. | Revision of functional currency.- The IFRS define that the functional currency is that with which an entity operates in its primary economic environment. The Company
will recognize the effect of conversion from the recording currencies to functional currency and reporting currency of the subsidiary in which the latter are different. The effect of conversion will originate a benefit in stockholders equity
as of the transition date of approximately $2,000,000.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | f. | Deferred taxes.-In accordance with IFRS, the deferred taxes will be recalculated with the adjusted book values of assets and liabilities, in accordance with IFRS, and
with the application of the exemption as of the initial recognition, which will result in a decrease in stockholders equity as of the transition date of approximately $33,000,000.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | g. | Other differences in presentation and disclosures in the financial statements.- Generally, the disclosure requirements contained in IFRS are broader than those of the
NIF, which may result in greater disclosures in relation to accounting policies, significant judgments and estimates, financial instruments and risk management, among others. Furthermore, there may be differences in presentation; for example, IFRS
require the presentation of a statement of comprehensive income, which is not required under NIF.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | h. | Effects on the statement of cash flows.- The Company does not estimate a significant effect on its cash flows due to the adoption of the IFRS.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------

The information which is presented in this note has been prepared in accordance with the standards and interpretations issued and in
effect or issued and adopted in advance, at the date of preparation of these financial statements. The standards and interpretations that will be applicable as of December 31, 2012, including those which will be applicable on an optional basis,
are not known with certainty as of the date of preparation of the accompanying financial statements as of December 31, 2011 and 2010. Furthermore, the accounting policies chosen by The Company could be modified as a result of changes in the
economic environment or in industry trends which may be observed after the date of issuance of these financial statements. The information which is presented in this note is not intended to comply with IFRS, because only a group of financial
statements that includes the statements of financial position, of comprehensive income, and of changes in stockholders equity and cash flows, together with comparative information and explanatory notes, can provide an adequate presentation of
the financial position of The Company and the results of its operations.



|22. | Authorization to issue the financial statements
|--- | -----------------------------------------------

The accompanying financial statements were issued with the authorization of Mr. Emmanuel Reveles Ramirez, Chief Financial Officer, on February 29, 2012 and are subject to the approval of The general
shareholders meeting where they may be modified, in accordance with the guidelines of the Mexican Law of Commercial Companies.



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