Management Report of the Directors, Financial Statements and Opinion of the Audit Committee, for the 2003 fiscal year.

Capital Budget, for the fiscal year 2004 in the amount of R$ 18,860,495,235.00.

The use of fiscal year 2003 results, according to the proposition, and with the following consideration:

It was approved the distribution of dividends and interest on own capital in total amount of R$ 5.15 per common and preferred share, including R$ 3.00 regarding the payment of interest on own capital paid on February 13, 2004, according to the decision of the Board of Directors on November 13, 2003. The balance of R$ 2.15 per share to be paid, restated at the Selic rate from December 31, 2003 to March 29, 2004, amounts to R$ 2.23 per common and preferred shares, composed as follows:

R$ 1.04 per share of dividends;
R$ 1.19 per share of interest on own capital.

Interest on capital is subject to 15% (fifteen percent) withholding tax except for shareholders with immunity or tax exemption.
As from March 30, 2004, the shares will be traded ex-dividend and ex-interest on own capital.
Payment date for the dividends and interest on own capital will be announced in due course.

Election of members of the Board of Directors, Audit Committee and their respective substitutes as follows:

Increase the capital stock of the Company by the absorption of part of the profits reserves in the amount of R$ 13,033,503,377.70 (thirteen billion, thirty-three million, five hundred and three thousand, three hundred and seventy-seven reais and seventy centavos), increasing the capital stock from R$ 19,862,634,372.30 (nineteen billion, eight hundred and sixty-two million, six hundred and thirty-four thousand, three hundred and seventy-two reais and thirty centavos) to R$ 32,896,137,750.00 (thirty-two billion, eight hundred and ninety-six million, one hundred and thirty-seven thousand, seven hundred and fifty reais), with no change to the number of issued shares.

Under these circumstances, Article 4 of the Company’s Bylaws shall be amended as follows:

“Article 4. The corporate capital is R$ 32,896,137,750.00 (thirty-two billion, eight hundred and ninety-six million, one hundred and thirty-seven thousand, seven hundred and fifty reais), divided into 1,096,537,925 (one billion, ninety-six million, five hundred and thirty-seven thousand, nine hundred and twenty-five) shares without nominal value, being 634,168,418 (six hundred and thirty-four million, one hundred and sixty-eight thousand, four hundred and eighteen) common shares and 462,369,507 (four hundred and sixty-two million, three hundred and sixty-nine thousand, five hundred and seven) preferred shares”.

A new authorized capital limit pursuant to Paragraph 1, Article 4 of the Company’s Bylaws. The proposal recommends that authorized capital be increased from R$ 30 billion to R$ 60 billion, all other provisions in Paragraph 1, Article 4 remaining unchanged;

Under these circumstances, Paragraph 1, Article 4 of the Company’s Bylaws shall be amended as follows:

Paragraph 1-The Company is authorized to increase the corporate capital irrespective of an amendment to the Bylaws upon deliberation of the Board of Directors up to R$ 60,000,000,000.00 (sixty billion reais), and up to the quantitative limit of 200,000,000 (two hundred million shares) by means of the issuance of preferred shares to be paid in: a) in currency; b) in goods, subject to the prior deliberation of the General Meeting evaluating them (Item IV of Article 122 of the Joint Stock Corporation Law); c) by means of credit capitalization.

Establishment of the compensation of management and effective members of the audit board as well as their participation in the profits pursuant to articles 41 and 51 of the company’s bylaws.