Investor Presentaiton

CORPORATE LAW BY PAULO SALVADOR RIBEIRO PERROTTI AND FERNANDO MAURO BARRUECO BRAZIL - CANADA COMPARATIVE LAW cumulative, and thus tax due maybe offset by credits arising from the purchase of raw materials, intermediary products, and packaging materials. Which allows the taxpayer to record input tax credits from the ICMS paid on the purchase of raw materials, intermediary products, packaging materials. Tax credits for goods destined to become fixed assets may be accepted, subject to certain restrictions. Intrastate rates normally vary from 7% to 25% (the average rate in the states of RJ, SP, MG and RS is 18%, whereas for other states and the DF it is 17%). Rates applied to interstate commerce are 7% or 12%, depending on the destination. Export goods are exempted from ICMS. 4. Municipal Taxes Municipalities and the Federal District are empowered to levy the following taxes: - urban property tax (IPTU); - tax on real estate transfers (ITBI); services tax (ISS). Services tax (ISS) is levied on certain services listed in federal law, and the average rate is 5%. 5. Social Charges The Federal Government may levy the following charges (or social contributions) to fund social programs: • Social contribution on corporate profits (CSL): levied on pre-tax profits, assessed in accordance with commercial law, with adjustment s and exceptions set forth in law. The current rate is 9%; • Social contribution for funding Social Security (COFINS): levied monthly on the gross income. Current rates are 3% and 7.6%, the former being cumulative and the latter non-cumulative, in accordance with criteria set forth in law. Export goods are exempted from COFINS. Contribution toward the Social Integration Program (PIS): levied monthly on the gross income of corporate entities. Current rates are 0.65% and 1.65%, the former being cumulative and the latter non- cumulative, in accordance with criteria set forth in law; Export goods are exempted from PIS. Contribution toward the Social Integration Program (PIS) and Social contribution for funding Social Security (COFINS), levied on imports, assessed on the customs value of goods or the price paid for services, including applicable taxes. The general rates are 1.65% for PIS/PASEP, and 7.6% for COFINS, aside from other specific rates; . Payroll charges for Social security contributions (CINSS): employers must withhold this charge on behalf of their employees, at the rate 10

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