materio-base-d7/modules

This directory is reserved for core module files. Custom or contributed modules
should be placed in their own subdirectory of the sites/all/modules directory.
For multisite installations, they can also be placed in a subdirectory under
/sites/{sitename}/modules/, where {sitename} is the name of your site (e.g.,
www.example.com). This will allow you to more easily update Drupal core files.

For more details, see: http://drupal.org/node/176043