Circular No. 3,221

CIRCULAR No. 003221 ------------------ Amends procedures for the accounting record of increase and reduction of share capital by consortium administrators. The Board of Directors of the Central Bank of Brazil, in a session held on 21 January 2004, based on art. 33 of Law 8,177 of 1 March 1991, D E C I D E D: Art. 1 The increase in share capital of consortium administrators, resolved at a shareholders' meeting or a quotaholders' meeting, must be recorded, while not approved by the Central Bank of Brazil, in account 6.1.1.20.00-8 CAPITAL INCREASE, with the corresponding entry: I - 6.1.1.50.00-9 CAPITAL TO BE PAID IN, when paid in with funds from shareholders or quotaholders; II - Capital Reserves, Profit Reserves or Accumulated Profits or Losses, when paid in with reserves or profits. Sole paragraph. The balances of legal, statutory and for expansion capital reserves, other special profit reserves and accumulated profits, as well as profits relating to the base dates of 30 June and 31 December, may be used to increase share capital. Art. 2 The reduction of share capital of consortium administrators, resolved at a shareholders' meeting or a quotaholders' meeting, must be recorded, while not authorized by the Central Bank of Brazil, as a debit to account 6.1.1.40.00-2 CAPITAL REDUCTION, with the corresponding entry: I - 6.1.8.10.00-2 ACCUMULATED PROFITS OR LOSSES, in the case of amortization of losses; II - 4.9.9.92.00-7 SUNDRY CREDITORS - COUNTRY, in the case of redemption of shares or quotas; III - CAPITAL TO BE PAID IN, in the case of cancellation of shares or quotas not yet fully paid in. Sole paragraph. The reduction of share capital of consortium administrators may only be carried out if the remaining share capital and shareholders' equity are maintained at the minimum levels required in the regulations in force. Art. 3 Arts. 6 and 7 of Circular 2,750 of 9 April 1997 are revoked. Art. 4 This circular enters into force on the date of its publication. Brasília, 21 January 2004. Sérgio Darcy da Silva Alves Director