FUNDAP

1. FUNDAP

2. 2 FRECOMEX Comércio Exterior Ltda.   FRECOMEX is a company operating in foreign trade and dedicating itself to rendering services in the import operations. It is registered with BANDES – Espírito Santo State Bank for Development, as well as with FUNDAP – Development Fund for Port Activities, and as such in a position to offer services, providing significant financial and economic advantages.   FRECOMEX is well situated in Vitória, capital of the State of Espírito Santo, close to the most important port complex in South America.

3. 3 PRIVILEGED LOCATION Espírito Santo is one of the Brazilian states with the highest GNP growth rates, consequently attracting important investments. Integrated in an efficient and highway network, the State of Espirito Santo is na important doorway to the foreign markets. Within a radius of 1000 km from Vitória 60 millions consumers command 70 per cent of the Brazilian GNP.

5. 5

6. 6 CONTENTS ADVANTAGES OBTAINED WITH IMPORTS BENEFITTED BY LAW 2508 OF 1970 - FUNDAP INVOICE BILL OF LADING – B.L. SISCOMEX – FRONT PAGE SISCOMEX – LOADING RECORD SISCOMEX – PAYMENT DI – IMPORT DECLARATION ICMS TAX WAIVER SISCOMEX – PARAMETRICATIONS GREEN CHANNEL YELLOW CHANNEL RED CHANNEL FISCAL NOTE (NF) – ENTRANCE OF MERCHANDIZE FISCAL NOTE (NF) – EXIT OF MERCHANDIZE DUPLICATE INVOICE

7. 7 1) Our Fiscal Note (NF) or Sales Note represents the cost of merchandize entering our client’s stockrooms. Consequently, as we will issue a Fiscal Note to “a tax-payer”, we will not include the IPI tax in the cost build-up, the result being a “reduction” in the cost of merchandize entering our clients’ stockrooms, particularly so, after the introduction of “EC no. 33” that “includes ICMS” in the cost build-up at the entrance of imported merchandize, including purchase values (FOB + Freight) and after Import Tax and IPI Tax, if a NCM or NCMs are required. 2) An improved cash flow results from the above, as the ICMS Tax is ef-fectively waivered at liberation of the merchandize/products, as well as the extended payment term already acts as an important factor, in view of the actual market situation. Note: From the example below we learn, that the cash flow is significantly improved, as the payment of ICMS (21%) in the Port of Santos falls due at the moment the merchandize is liberated by the Customs, whereas the payment of the ICMS Tax at Vitória Port is waivered by Law no. 2508/70 at the liberation of merchandize/product, actually with payment extension of 53 days outside of the month of our invoicing to our clients.   Note 2: The merchandize enters the stockrooms at a cost reduction of 20,4% of the IPI Tax. This way the cost reduction in FOB is very signi-ficant, as for every 5% of IPI Tax we obtain approximately a 1% reduction on the FOB cost.   Note 3: As to payment terms, we assure at present an extension of 53 days outside of the month of invoicing for the payment of the ICMS Tax.   Finally, with the monthly economic return of 25% on the value of the Fiscal Note (Exit), applying the cost build-up as shown, the cash require-ment for ICMS payment is reduced to only 9%, against originally almost 21%. This represents additional savings of 3% on FOB cost of merchandize TARIFF, FISCAL, FINANCIAL AND ECONOMIC COST BUILD-UP OPERATING THROUGH VITÓRIA PORTS BENEFITTED BY LAW 2508 OF 1970 – FUNDAP

8. 8 INVOICE

9. 9 BILL OF LADING

10. 10 SISCOMEX – FRONT PAGE

11. 11 LOADING RECORD

12. 12 SISCOMEX – PAYMENT

13. 13 D.I. – IMPORT DECLARATION

14. 14

15. 15

16. 16 Parametrication – Green Channel

17. 17 Parametrication – Yellow Channel

18. 18 Parametrication – Red Channel

19. 19 Fiscal Note (NF) – Entrance of Merchandize

20. 20 Fiscal Note (NF) – Exit of Merchandize

21. 21