SCENARIO AND MARKET STRATEGIC MANAGEMENT

Transcription

1 SCENARIO AND MARKET The first half of the year presented a great volatility in the markets due to the concerns on the fiscal deficit level in some Euro Zone countries, remarkably Portugal, Ireland, Italy, Greece and Spain. The greater risk aversion arising from the liquidity condition of these countries has contributed for a slight devaluation of the Brazilian Real before the US Dollar, ending the period with a parity of R$1,8015 per US Dollar (R$1,7412 at the end of the prior year). The credit lines available by IMF and the European Central Bank, together with austerity measures contribute for a better accounts balance, reducing the default risk, however adding some uncertainty on the recovery speed of the economic activity in this region. This situation reinforces the feeling that the full recovery of the economic activity level in the developed countries will be slow and gradual. On the other hand, the economy performance in Brazil, throughout the period, should be highlighted. A strong expansion of the GDP together with stimulation policies and availability of credit and financing term has prevailed. This macro condition has contributed for the decrease in the unemployment rates, improvement of the consumer reliability and income expansion, among other factors, which confirms the expectations that the GDP growth rate will be strong in Particularly in Duratex, whose sales are concentrated in the country and main markets, the joinery and civil construction materials industry have had a strong performance development when compared to the same 2009 period, peak of the crisis. STRATEGIC MANAGEMENT Duratex takes advantage of the good economic moment to reinforce its presence and service capacity to the growing demand of its markets. Accordingly, the Company Board of Directors approved additional investments to those already in course in Deca Division, in the amount of R$ 220 million. This amount contemplates the increase of the ceramics production capacity through the modernization and expansion of Queimados - RJ site, in which R$100 million will be invested. This unit will add 160 thousand pieces monthly, contributing for the increase of the total ceramics capacity to 9, 9 million of pieces as from R$120 million will be invested in the metal sanitary fittings segment, in Jundiaí SP plant, to increase the production capacity and optimize the production mix, which will increase the capacity from 15.8 million of pieces per annum to 18.2 million. The Project is estimated to be concluded by This expansion should be joined to the one already in course, including new equipment in metal sanitary fittings and a new furnace for the ceramics unit in the Northeast region.

2 The Wood Division has also benefitted from a strategic investment for the purchase of land, through auction held on July 15, Through its wholly-owned subsidiary Duraflora S.A., Duratex acquired seven farms with total area of 8,671 hectares of forests, in the State of São Paulo, for the amount of R$ 148 million. Accordingly, the total land area reaches 224 thousand hectares, 52% of which are own land and 48% are leased. This operation is aligned with the integrated model strategy to supply the panels plants. Further, the logistics and forest productivity will allow the supply of wood in rather favorable cost conditions to the future expansion under study in the State of São Paulo. Another highlight was the conclusion and beginning of operations of the new resins plant located in the city of Agudos SP, which contributes for the full supply of inputs to the plants located in the State of São Paulo, and for a better competitive differentiation in relation to the competitor. At the end of the quarter Duratex IT systems migrated to a new processing basis in SAP platform. This migration should contribute for more data integrity and improvement of managerial controls. Several preventive measures have been adopted so as to permit a quick and safe transition. Among them we highlight the inventories formation at the migration eve and the stoppage of plants for an average period of 7 days. At the end of the first fortnight of July both the production and the invoicing had already been normalized. CONSOLIDATED PERFORMANCE The official financial statements available at this date, at CVM and BM&FBovespa, due to the merger operation between Duratex and Satipel, carried out in August 2009, consider only Satipel results from January to June In order to provide a better comparative analysis of results and to have transparent communication with the market, the company management opted for disclosing this executive summary contemplating the combined data of both companies in the 2nd. Quarter and 1st. Half of (in R$ 000, unless otherwise indicated) 2nd. quarter/10 1st. quarter/10 2nd. quarter/09(1) 1st. half/10 1st. half/09 (1) BALANCE SHEET Cash Current assets Total assets Current liabilities Total Financial Debt Stockholders Equity

3 STATEMENT OF INCOME Net Revenue Domestic Market Foreign Market Gross Profit Gross Margin 39,0% 37,9% 36,3% 38,5% 35,6% EBITDA (2) EBITDA Margin 32,0% 32,3% 22,9% 32,2% 24,4% Net Income Net Margin 15,7% 13,3% 9,0% 14,6% 9,7% INDICATORS Current liquidity (3) 1,82 1,68 1,26 1,82 1,26 Net working capital (4) Net Indebtedness (5) Net Indebtedness/ 1,02 1,27 2,09 1,09 1,99 Annualized EBITDA Average Net Equity Annualized ROE (6) 18,2% 13,5% 8,3% 15,8% 8,8% SHARES Net Income per Share (R$) 0,24 0,18 0,10 0,42 0,22 Closing Quotation 16,40 15,35 7,95 16,40 7,95 (R$) Book Value per 5,44 5,29 5,07 5,44 5,07 Share (R$) Market Value (R$1,000) (7) (1) pro forma data and comparable to the other results presented. (2) EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization): measurement of operational performance provided by Earnings before Interest, Taxes, Depreciation and Amortization (LAJIDA). (3) Current liquidity: result from the division of current assets by current liabilities and reflects the amount of reais available to face the short term requirements. (4) Net working capital: it is the result of the difference between current assets and liabilities and reflects the exceeding capital in the short term. (5) Net Indebtedness: Total Financial Debts ( ) Cash. (6) ROE (Return on Equity): performance measurement provided by the division of Net Income for the period annualized by average Net Equity. (7) The Market Value related to the 2nd. Quarter of 2009 was obtained from the sum of the parties (Duratex and Satipel) and the quotation reflects the number of current adjusted shares. The calculation doe not consider the shares held in Treasury in the periods.

4 CONSOLIDATED PERFORMANCE Solvency The company presented improvement in the current liquidity indicators, and for each R$1.00 due in the short term, it had R$1.82 in assets. Total indebtedness at the end of June amounted to R$1,643.9 million equivalent to a net debt of R$926.1 million, which represents a 7.3% decrease in relation to March This net indebtedness level is equivalent to 1,02x EBITDA of the annualized period and to 37.1% of Net Equity at the end of June, which is considered low. As comparison basis, the multiple in relation to Ebitda was of 2.09x at the end of the second quarter of 2009 in which the relation with Net Equity achieved 43.8%. In the six-month period new loans in the amount of R$427.9 million were contracted and R$242.4 million was amortized. Net Revenue In the six-month period, net revenue totaled R$1,318.9 million equivalent to a 26.2% expansion in relation to the same 2009 period. In the quarter, revenue amounted to R$712.3 million, equivalent to a 17.4% sales expansion in relation to the prior quarter and to 34.4% in relation to the same 2009 period. The improvement noticed in 2010 is based on the increase in shipped products volume and on better price basis. Sales for the foreign market are still pressed, due to the slow recovery process. In total, 4.1% of revenues arose from the foreign market, corresponding to R$54.7 million. EBITDA The Company operational result, measured by Ebitda, presented a strong expansion of 66.2% in the first half of the year, in relation to the same 2009 period, totaling R$424.2 million, which corresponds to a 32.2% margin in relation to net revenue. During the second quarter, Ebitda amounted to R$228.1 million, corresponding to an Ebitda margin of 32.0% against 22.9% in the same prior year period. In relation to the prior quarter, the expansion was of 16.3%, with a stable margin. In relation to 2009,the operational improvement is based on a more favorable scenario for civil construction materials and joinery, main destinations of the Company sales. In addition, the synergies and scale gains, arising from the association, the dilution of fixed costs linked to a higher level of industrial occupation and a more favorable prices scenario contribute for the good moment. Net Income As result, net income amounted to R$192.3 million in the six month period which represents a strong 90.2% expansion in relation to 2009 performance. The income for the second quarter, of R$111.7 million has more than doubled in relation to the same prior year period, presenting a 133.8% expansion.

5 Accordingly, the return on the average net equity in the period, annualized, totaled 15.8% in the six-month period and 18.2% in the second quarter, evidencing the Company favorable moment in relation to its performance markets. PERFORMANCE BY DIVISION Wood Division The Wood Division ended the six-month period with an increase of 30.8% in the shipped volume, in relation to the same 2009 period, attaining 1,152,834 m 3, 590,269 m 3 of which during the second quarter. This expansion was possible due to a better activity level in the joinery segment, main sales destination. This improvement started as from the second half of last year, since the credit for furniture retail market was retaken together with the expansion of financing terms. This situation has also contributed for the beginning of recovery in the discounts granted, on prices basis, during the peak of the crisis in It should also be highlighted in the period the exemption from the IPI collection for panels, which was effective up to the end of March, and was retaken in April, but with a lower rate equivalent to 5%, against 10% previously to the benefit, which improves the furniture competitiveness in the sales points. The sales mix, however, presented a higher expansion in the standard segment, of lower unit value and margins. As a reflex of the business environment improvement, the expansion of 25.2% in net revenue for the six-month period in relation to the same 2009 period to R$883.7 million, should be pointed out. During the second quarter, the expansion was of 32.4% in relation to the same 2009 period and of 14.0% in relation to the prior quarter, to R$470.7 million. The prices recovery contributed for the increase of 8.6% of the unit net revenue in the quarter, in relation to the same prior period, to R$797.42/m 3, regardless the worsening of sales mix due to the higher growth in the shipment of standard panels. The division Ebitda benefitted from the volume expansion and prices basis and reached R$286.5 million, R$153.6 million during the 2nd. quarter, equivalent to an expressive expansion of 62.3% in relation to the same 2009 six-month period. The Ebitda margin totaled 32.4%, in the six-month period, and presented strong expansion in relation to the margin presented in the same 2009 six-month period, 24.9%. On May 28, Duratex, Agudos (SP) unit was awarded with Excelência Empresarial CIESP 2010 granted by Centro das Indústrias do Estado de São Paulo, in the large size companies category. The award is granted to the outstanding companies in best practices of strategic management, planning, customer s satisfaction, environmental and social responsibility, technological innovation, personnel, processes and results management.

6 2nd. 1st. quarter10 quarter10 % 2nd. quarter 09* % 1 st. Half 10 1st. Half 09* SHIPMENT (in m 3 ) STANDARD , , ,3 COVERING , , ,6 TOTAL , , ,8 FINANCIAL HIGHLIGHTS (R$1.000) NET REVENUE , , ,2 DOMESTIC MARKET , , ,8 FOREIGN MARKET , , ,5 Unit Net Revenue (in R$ per m 3 shipped) 797,42 734,08 8,6 764,68 4,3 766,51 800,56-4,3 EBITDA , , ,9 EBITDA Margin 32,6% 32,2% - 22,1% - 32,4% 24,9% - * pro forma data. Deca Division The strong demand for civil construction products reflects the good moment for the sector. In this sense, Deca products shipment presented a 18.6% expansion in the first half of the year in relation to the same 2009 period, attaining 10,696 thousand pieces, 5,932 thousand pieces in the second quarter. The volumes expansion together with a more favorable prices basis contributed for the increase of 28.4% in net revenue for the period, totaling R$435.2 million. The sales expansion during the second quarter was 24.8%, to R$241.6 million. Ebitda was still more benefitted, presenting an expressive growth of 73.6%, totaling R$137.7 million, equivalent to a 31.6% margin in the six-month period. This margin is 8.2 percentage points better than the 23.4% margin presented during the first half of In order to reinforce its image of avant-garde company, Deca attended Casa Cor São Paulo, main decoration event in the market. During the event, from May 25 up to July 18, 2010, the Company had the opportunity of exhibiting new ceramics and sanitary fittings to the public present in more than 105 environments of the event, 61 of which comprising the trademark products. Further to the exhibition of products and trends, Deca conducted visits, lectures and events for the opinion maker public including students, architects, decorators and resellers, among others. %

7 2nd. 1st. quarter10 quarter10 % 2nd. quarter 09* % 1st. Half 10 1st. Half 09* SHIPMENT (in 1,000 pieces BASIC , , ,0 FINISHING , , ,7 TOTAL , , ,6 FINANCIAL HIGHLIGHTS (R$1.000) NET TREVENUE , , ,4 DOMESTIC MARKET , , ,0 FOREIGN MARKET , , ,8 Unit Net Revenue (in R$ per shipped piece) 40,73 40,64 0,2 36,5511,4 40,69 37,61 8,2 EBITDA , , ,6 EBITDA Margin 30,8% 32,6% - 24,5% - 31,6% 23,4% - * pro forma data. % CAPEX In the six-month period, R$146.4 million was invested, with approximately 80% addressed to the panels area, including the forest basis, and the remaining 20% to Deca. The electro mechanics assembly work for the new resins plant located in Agudos (SP) and its effective opening on April 21 should be highlighted, which will contribute for the total input supply in the plants located in the State of São Paulo. It is in progress in Deca, an organic expansion movement which shall add approximately 20% of capacity for metal and ceramics fittings up to the end of this year. In July, 8,671 hectares of land, with planted forest were acquired, representing an investment of R$148 million to be recorded in the results for the third quarter, whose amount had not been considered in the original budget of R$420 million, for In addition, as previously mentioned, the modernization and expansion of the ceramics site located in Queimados RJ and the metals capacity expansion in Jundiaí SP, were approved. VALUE ADDED The Value Added in the six-month period totaled R$712,9 million. R$237,4 million of which, equivalent to 13.8% from obtained revenues and to 33.3% from total value added, was addressed to the federal, state and municipal governments as taxes and contributions. Distribution of Value added

8 Work remuneration: 29,3% Government remuneration: 33,3% Financing remuneration: 10,4% Stockholders remuneration: 27,0% CAPITAL MARKETS Duratex shares increased 1.2% in the year whereas the Ibovespa index decreased 11.2% in the same period. The share quotation at the end of June totaled R$16.40, corresponding to a market value for the Company of R$7.5 billion. According to the publication Melhores & Maiores of Exame Magazine, 2010 edition, Duratex was in the 45th place in the ranking of the largest companies by market value in During the six-month period, million of shares were traded, in thousand businesses representing a financial volume of R$2,596.6 million. This amount corresponds to a daily average trade of 1.3 million of shares, or R$21.3 million for the period. The company shares are listed in BM&FBovespa New Market, and as a consequence, it counts only on common shares issued, to which a voting is granted in the Stockholders General Meetings one share, one vote further to the tag along right of 100%. In the New Market scope, the company is linked to the arbitration in the BM&FBovespa New Market Arbitration Chamber to solve any dispute or controversy that may arise between the Company, stockholders and management. The company shares are included in the main market reference indices; Ibovespa and ISE. Ibovespa comprises approximately 60 shares, and as main inclusion criterion are aspects related to the shares liquidity. ISE Index of Corporate Sustainability, comprises approximately 40 shares which were highlighted in the application of the international sustainability concept Triple Bottom Line that evaluates, in an integrated means, social, environmental and economic financial, aspects, to which corporate governance practices, business characteristics and product nature were incorporated. STOCKHOLDERS REMUNERATION Duratex has a differentiated policy for minimum profit sharing equivalent to 30% of adjusted net income for the period. According to the meeting held on the Board of Directors decided to credit to the stockholders, interest on own capital attributed as dividends, in the amount of R$65,6 million. Said payment shall occur as from August 13, 2010 and on , the share starts being negotiated at ex condition. This payment corresponds to an approximate unit value of R$0,14/share. ENVIRONMENTAL AND SOCIAL RESPONSIBILITY At the end of the period, the Company had 9,385 employees, which represents the creation of 271 new positions in the period. There were adjustments in the number

9 of employees in past periods, since those allocated in our operations abroad had not been considered (162 in the indicated periods). (Amounts in R$ 1,000) 2nd. 1st. 2nd. quarter/10 quarter/10 quarter/09 EMPLOYEES (number) Remuneration Mandatory legal charges Differentiated benefits The Company invested R$7,7 million in environmental actions, with highlight for the treatment of effluents, the residues collection and the maintenance of Forest areas. Duratex had two cases selected for presentation during the 4th. Mostra Fiesp de Responsabilidade Social; Planeta Água Um Mundo Sustentável e Escola de Marcenaria Tide Setúbal. The first one is related to environmental education of young people, particularly in the range from 8 to 12 years old, and includes initiatives for the society awareness on matters related to the proper use of natural resources, specially water, reforestation and maintenance of biodiversity, further to discharge and recycling. The joinery school was opened in 2000, in the city of Agudos (SP), and arose from a partnership between the Company and the Municipality of the city of Agudos and the National Service for Industrial Training (SENAI). It is a professionalizing carpenter course for needy adolescents of the region and aims at preparing the young people for the labor market. INDEPENDENT AUDITORS In accordance with CVM Instruction 381, of January 14, 2003, and with CVM/SEP/SNC 02/2003 Circular Letter of March 20, Duratex and its subsidiaries inform that their independent audits are performed by PricewaterhouseCoopers Auditores Independentes, who did not provide any other type of services to the Company or its subsidiaries, in the period ended June 30, The Company performance policy upon the contracting of services which are not related to the external audit from our independent auditors is based on the internationally accepted principles that preserve the independence of these auditors and comprises: (a) the auditor should not audit his own work, (b) the auditor should not perform managerial positions in his client and (c) the auditor should not promote his client interests. ACKNOWLEDGEMENTS We would like to thank the support from our stockholders, the dedication and commitment of our coworkers, the partnership with suppliers and the reliability from our customers and consumers. The Management

10 CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2010 AND MARCH 31, 2010 ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY JUN/10 MAR/10 JUN/10 MAR/10 CURRENT ASSETS 1,727,398 1,432,900 CURRENT LIABILITIES 950, ,515 Cash / cash equivalents 717, ,602 Loans and financing 587, ,422 Clients 505, ,718 Suppliers 116, ,575 Inventories 315, ,358 Personnel 87,183 68,585 Accounts receivable 19,017 18,302 Accounts payable 31,922 32,614 Tax credits 156, ,133 Taxes and contributions 52,779 46,616 Other credits 12,986 11,787 Dividends and profit sharing 74,142 27,703 NON - CURRENT ASSETS 3,133,095 3,123,494 NON CURRENT LIABILITIES 1,414,206 1,279,848 LONG-TERM RECEIVABLES 136, ,089 Loans and financing 1,056, ,115 Provision for contingencies 165, ,356 Other accounts payable 131, ,832 Restriced deposits 11,677 12,134 Taxes and contributions 60,702 64,545 Accounts receivable 37,760 40,394 Tax credits 87,027 98,561 MINORITY INTEREST 0,672 0,776 SHAREHOLDERS' EQUITY 2,495,615 2,423,255 Others investments 0,652 0,652 Property, plant and equipment 2,560,567 2,555,956 Capital 1,288,085 1,288,085 Forest reserves 386, ,373 (-) IPO costs (7,823) (7,823) Intangible assets 48,956 45,424 Capital reserves 297, ,560 Revaluation reserves 150, ,053 Cumulative translation adjustments (7,339) (6,303) Revenue reserves 780, ,794 Treasury shares (6,555) (8,111) TOTAL LIABILITIES AND TOTAL ASSETS 4,860,493 4,556,394 SHAREHOLDERS' EQUITY 4,860,493 4,556,394

11 CONSOLIDATED INCOME STATEMENT in R$ thousands DURATEX S.A DURATEX S.A + SATIPEL June/2010 June/2009 (1) GROSS SALES 1,693,384 1,395,967 Domestic market 1,638,487 1,321,698 Foreign market 54,897 74,269 Taxes and contributions on sales (374,501) (351,091) NET SALES 1,318,883 1,044,876 Cost of products sold (708,920) (603,508) Depreciation/Amortization/Depletion (102,607) (68,888) GROSS PROFIT 507, ,480 Selling expenses (144,258) (126,276) General and administrative expenses (50,364) (49,185) Other operating results 4,378 (13,704) OPERATING PROFIT BEFORE FINANCIAL RESULTS 317, ,315 Financial income 23,216 39,604 Financial expenses (74,851) (70,359) OPERATING PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION 265, ,560 Income tax and social contribution (57,564) (28,416) Profit sharing (7,175) (9,142) Statutory interest (8,245) (12,300) Minority interest (0,178) (1,595) NET INCOME 192, ,107 (1) Duratex + Satipel not reviewed by the Independent Auditors, obtained from their respective Financial Statements.

12 STATEMENTS OF CASH FLOWS Consolidated JUNE/10 JUNE/09 Operating activities Net income for the year 192, ,107 Items not affecting cash Depreciation, amortization and depletion 104,157 71,875 Interest, foreign exchange and monetary variations, net 68,871 (38,805) Provisions, disposal of assets 13,257 13,116 Investiments in working capital: ( Increase ) Decrease in Assets Clients (78,853) (8,423) Inventories (54,505) 34,143 Other Assets 38,754 (6,916) Increase (Decrease) in Liabilities Suppliers 8,899 (14,047) Personnel Liabilities 12,169 (6,367) Accounts payable 92,782 (19,415) Taxes and contributions 23,380 28,446 Other liabilities 0,640 (3,603) Cash provided by operating activities 421, ,111 Investing activities: Investiments in fixed and intangible assets (146,400) (277,710) Cash used in investing activities (146,400) (277,710) Financing activities: Financing 427, ,878 Amortization of financing (242,447) (267,173) Dividends and profit sharing (40,772) (69,835) Treasury shares and others (3,650) 5,562 Cash provided by financing activities 141,005 (122,568) Exchange variation on cash and cash equivalents 0,337 (8,767) Increase (Decrease) in cash for the year 416,808 (257,934) Opening Balance 300, ,772 Closing Balance 717, ,838

13 NOTES TO THE FINANCIAL STATEMENTS (All amounts in thousands of Reais, unless otherwise indicated) NOTE 1 - OPERATIONS Duratex S.A. is a listed company headquartered in the city of São Paulo - SP, a subsidiary of Itaúsa Groups Investimentos Itaú S.A, the largest group of the country operating in the financial, chemical and IT sector and subsidiary of Companhia Ligna de Investimentos which has significant operations in the input retail and distribution market for civil construction and joinery, also operating in the construction and rental of real estate ventures. It currently has thirteen industrial units in Brazil and one in Argentina, with branches in the main Brazilian cities and commercial subsidiaries in the United States and Europe. The main activity of the Company and its subsidiaries is the production of wood panels, ceramics and metal sanitary fittings. The Wood Division operates six industrial units in Brazil; responsible for the production of fiber sheets, medium density particle board (MDP), medium, high and super density fiberboard (MDF, HDF, SDF) and Durafloor laminate flooring, semi-finished components for furniture and industrial resins. The Deca Division operates seven industrial units in Brazil and one in Argentina, responsible for the production of ceramics and metal sanitary fittings under the trademarks Deca, Hydra, Belize and Deca Piazza (in Argentina). On June 22, 2009 Itaúsa Investimentos Itaú S.A (Itaúsa) and Companhia Ligna de Investimentos (Ligna) signed an irrevocable contract of association between the companies Satipel Industrial S.A. and Duratex S.A., approved at the Extraordinary General Meeting held on August 31, 2009 aiming at the unification of their operations, which resulted in the creation of: The largest Wood panel industry of the South hemisphere and one of the largest in the world; The second largest manufacturer of sanitary fittings in Brazil; The leader company in the manufacture of metal sanitary fittings of the Brazilian market.

14 NOTE 2 PRESENTATION AND PREPARATION OF THE QUARTERLY INFORMATION The quarterly information of Duratex S.A. and the consolidated quarterly information, which were approved by the Company's Board of Directors on August 4, 2010, have been prepared and are presented in accordance with accounting practices adopted in Brazil, based on the provisions of Brazilian Corporation Law and the rules established by the Brazilian Securities Commission (CVM). In the preparation of the quarterly information, accounting estimates based on objective factors were used by management to determine the useful lives of property, plant and equipment, provisions for contingent liabilities, the allowance for doubtful accounts and other similar provisions, when necessary. Due to the corporate restructuring described above, and due to the merger of Duratex S.A. by Satipel S.A., adopting the name of the latter one, the Quarterly Information for June 30, 2009, correspond to Satipel S.A amounts. As regards the amounts originally disclosed, certain reclassifications that are not significant for the financial statements as a whole and do not change the result, net equity, working capital or the main balance indices, have been carried out. The main accounting practices adopted in the preparation of this quarterly information correspond to the Standards and guidelines effective up to December 31, 2009, as permitted by CVM Deliberation 603 of November 10, 2009, that will differ from those that will be used at December 31, 2010, because the adoption of all pronouncements, interpretations and orientations issued by the Accounting Pronouncement Committee CPC, for the elaboration of all financial statements in accordance with International Financial Reporting Standard (IFRS). Because of this course of action, the quarterly information ITR should be represented according to article 2 nd of Deliberation 603 of November NOTE 3 SIGNIFICANT ACCOUNTING PRACTICES a) Current and non current assets Cash and cash equivalents Cash and cash equivalents include cash on hand, bank deposits and short term investments with high liquidity and insignificant risk of change in value. Financial Instruments The Company classifies its financial assets according to three categories:

15 calculated at fair value through results, loans and receivables and held to maturity. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of the financial assets when first recorded. Financial assets calculated at fair value through results These are financial assets held for active and frequent trading. Derivatives are also classified as held for trading, unless they have been designated as hedge instruments. These assets are classified as current assets. Gains or losses arising from the fair value variations of financial assets calculated at fair value through results are recorded in the statement of income in "financial result" in the period they occur, unless the instrument has been contracted in connection with another instrument. In that case, the variations are recognized in the same item of the statement of income affected by this other instrument. Loans and receivables These comprise loans granted and receivables which are non-derivative financial assets with fixed or determinable payments, not quoted in an active market. Loans and receivables are included in current assets, except for those with maturity of more than 12 months after the balance sheet date (these are classified as non-current assets). The Company's loans and receivables comprise trade accounts receivable, other accounts receivable and cash and cash equivalents, excluding short-term investments. Loans are recorded at amortized cost, based on the effective interest rate method, and receivables brought to present value, when significant. Assets held to maturity These are basically financial assets that cannot be classified as loans and receivables, because they are quoted in an active market. In this case, these financial assets are acquired with the purpose and financial ability of being held in the portfolio up to their maturity. They are evaluated at the acquisition cost, plus accrued earnings with a contra-entry to income for the year, based on the effective interest rate method. Fair value For financial assets without an active market or public quotation, the Company determines fair value through valuation techniques, which consist of the use of recent transactions with third parties, reference to other substantially similar instruments, the analysis of discounted cash flows and option pricing models which make the greatest use possible of information from the market and the least use possible of information from Company management.

16 The Company evaluates, periodically, if there is objective evidence that a financial asset or a group of financial assets is overstated (impaired) in relation to its recoverable value. If there is such evidence for available-for-sale financial assets, the cumulative loss - calculated as the difference between the acquisition cost and current market value minus any impairment loss of this financial asset previously recognized in results - is transferred from equity to the statement of income. Derivative Instruments and hedge activities Initially, derivatives are recognized at fair value at the date when the derivative agreement is signed and subsequently recalculated at their fair value, with the fair value variations recorded to results, except when the derivative is recorded as a hedge of foreign subsidiaries investments, which variations are recorded on shareholders equity under cumulative translation adjustments.. Trade accounts receivable Trade accounts receivable refer to short term transactions and are adjusted to present value if this adjustment is significant. In the period presented, the adjustment to present value calculated in trade accounts receivable was not considered significant. The allowance for doubtful accounts was recorded based on the evaluation of risks on the realization of credits, at an amount considered sufficient to cover eventual losses on the realization of accounts receivable. Inventories Inventories are stated at the average cost of purchase or production, which is lower than replacement costs or realizable values and, when applicable, reduced by a provision to cover possible losses. Imports in transit are stated at the accumulated cost of each import. Other assets The other assets are stated at realizable values, including, when applicable, accrued earnings and monetary and exchange variations. Investments The investments in subsidiaries are recorded and evaluated based on the equity accounting method, recognized in the result for the year as operating income (or expense), plus goodwill and minus negative goodwill, and the other investments at acquisition cost. The exchange rate variations on investments in foreign subsidiaries, with functional currency other than that of the parent company, are recognized directly in stockholders equity in a specific account

17 named "Cumulative translation adjustments. for the following companies: Duratex Europe NV, Duratex North America Inc. and Deca Piazza S.A. The financial statements of the companies headquartered abroad were converted into reais through the following procedures: a) Assets and liabilities, converted using the exchange rate at the balance sheet date. b) Initial stockholders equity, converted using the exchange rate at December 31, c) Income and expenses, converted by the average exchange rate of each month. The goodwill calculated in the acquisition of companies, classified as investments, is based on the expectation of future profitability (goodwill). After the merger of the companies Deca Indústria e Comércio de Materiais Sanitários Ltda. e Cerâmica Monte Carlo S.A., as described in Note 10-c, the goodwill for expectation of future profitability was transferred to Intangible Assets and its recuperation ability tested annualy. Property, plant and equipment Property, plant and equipment are recorded at acquisition, formation or construction cost (including interest and other financial charges) plus spontaneous revaluation and monetary restatement up to Depreciation is calculated on the straight line method at the rates disclosed in Note 11. The depletion of Forest reserves is carried out due to the volume of wood extracted in the period. Intangible assets Intangible assets comprise trademarks, patents, rights to use software and include goodwill for expectation of future profitability. Impairment of assets Property, plant and equipment and other non-current assets, including goodwill and intangible assets, are reviewed to identify evidence of unrecoverable losses annually and also whenever events or alterations in the circumstances indicate that the book value may not be recoverable. In this case, the recoverable value is calculated to verify if there is any loss. In the event of loss, it is recognized at the amount by which the book value of the asset exceeds its recoverable value, which is the higher between the net sales price and the value in use of the asset. For evaluation purposes, assets are grouped at the lowest level for which there are separately identifiable cash flows.

18 b) Current and long term liabilities Provisions Provisions are recognized when the Company has a legal or informal present obligation as a result of past events, it is probable that a cash outflow is necessary to settle the obligation, and a reliable estimate of the amount can be made. Borrowings Borrowings are initially recognized at fair value, upon the receipt of funds, net of transaction costs. Subsequently, the borrowings are presented at amortized cost, i.e., plus charges and interest in proportion to the period incurred (pro rata temporis). The financing with Banco de Desenvolvimento de Minas Gerais BDMG working capital is stated at present value at the balance sheet date, considering the long term payment discounted at TJLP rate. Deferred income tax and social contribution Deferred tax assets are recognized to the extent that it is probable sufficient future taxable profit will be available to be offset by temporary differences and/or tax losses, and the revaluation reserve in the extent that its realization is probable. Revaluation reserve As permitted by Law 11638/07 the Company and its subsidiaries Duraflora S.A. and Jacarandá Mimoso Participações Ltda., decided for the maintenance of the revaluation balances of existing assets revaluations at December 31, Costs with operating leasing of land (rural leasing) The leasing contracts whose portion of significant risks and ownership rights is maintained by the lessor are classified as operating lease. The costs incurred in the operating lease contracts are recorded in investment and in the result for the year on a straight line basis during the effectiveness of these contracts. Net income per share Calculated based on the number of outstanding shares at the balance sheet dates.

19 Transitional Tax Regime The Company and its direct subsidiaries elected the Transitional Tax Regime (RTT) according to the Provisional Measure 449/08 converted into Law 11941/09 and manifested their election in the Corporate Annual Income Tax Return for Income Tax and Social Contribution on Net Income for the year were calculated in this assumption. c) Benefits to employees Private pension plan The Company offers to all employees a defined contribution plan managed by Fundação Itaúsa Industrial. The effective plan regulation establishes the sponsors contributions between 50% and 100% of the amount provided by the employees. Profit sharing The Company remunerates its coworkers through profit sharing if the performance targets established are attained. Share-based remuneration The Company offers to the executives, duly approved by the Board of Directors, a stock option plan according to which it receives their services in return for to the options to purchase shares. The fair value of these options, calculated at the grant date, is recognized as expense with a contra-entry to stockholders equity during the vesting period. d) Determination of results of operations Income and expenses are recognized on the accrual basis of accounting. Revenue from sales and cost of sales are taken to income when the related risks and benefits are transferred to the buyer. e) Accounting pronouncements and interpretations of standards that are not yet effective The accounting pronouncements and interpretations of standards listed below were published and are mandatory for years beginning on or after January 1, In addition, other pronouncements and interpretations were also published, which alter the accounting practices adopted in Brazil, within the process of convergence with international standards. The standards below are only those that could (or should) more significantly affect the Company's quarterly

20 information. The Company did not elect early adoption of these standards for the quarterly information at June 30, 2010, as permitted by CVM Deliberation 603/09. Pronouncements CPC 15 - Business Combinations CPC 22 - Segment Information CPC 23 - Accounting Policies, Changes in Accounting Estimates and Error Correction CPC 27 - Property, Plant and Equipment CPC 29 - Biological Assets and Agricultural Produce CPC 31 - Non-current Assets Held for Sale and Discontinued Operations CPC 33 - Employee Benefits CPC 37 - First-time Adoption of International Financial Reporting Standards CPC 38 - Financial Instruments: Recognition and Measurement CPC 39 - Financial Instruments: Presentation CPC 40 - Financial Instruments: Disclosure Interpretations. ICPC 08 - Accounting for Proposed Dividends. ICPC 10 - Clarifications of CPC 27 Due to the stage of studies and analyses of the impacts from the adoption of these CPC s, remarkably the Business Combination (CPC 15), the one related to Biological Assets (CPC 29) and the one related to Employee Benefits (CPC 33), it is not possible to disclose the effects of these new pronouncements. NOTE 4 CONSOLIDATED QUARTERLY INFORMATION The consolidated quarterly information was prepared in conformity with the accounting practices adopted in Brazil and the rules issued by the Brazilian Securities Commission (CVM) and comprises the quarterly information of the Company and those subsidiaries where it has direct or indirect control. The consolidated quarterly information includes the companies: Duratex S.A. and its direct subsidiaries: Duraflora S.A., Estrela do Sul Participações Ltda., Duratex Empreendimentos Ltda., Duratex Comercial Exportadora S.A.,and DRI Resinas Industriais S.A., and the indirect subsidiaries: Duratex Overseas, Duratex North America Inc., Duratex Europe NV., TCI Trading S.A., Jacarandá Mimoso Participações Ltda. and Deca Piazza S.A.. Intercompany investments between the consolidated companies, in proportion to their equity interests, as well as intercompany assets, liabilities, income, expenses and unrealized profits, have been eliminated.

21 NOTE 5 CASH AND CASH EQUIVALENTS PARENT COMPANY CONSOLIDATED Jun/10 Mar/10 Jun/10 Mar/10 Cash and banks 4,060 3,436 20,976 12,066 Fixed Income securities ,673 19,883 Bank deposit certificates 545, , , ,653 TOTAL 549, , , ,602 The balance of financial investments is comprised of bank deposit certificates, remunerated in accordance with the variation of the Interbank Deposit Certificate (CDI). Abroad, it is comprised of investment funds in US dollars, which are remunerated based on interest rates. The Bank Deposit Certificates, although maturing in the long term, may be redeemed at any time without affecting the remuneration. NOTE 6 - CLIENTS PARENT COMPANY CONSOLIDATED Jun/10 Mar/10 Jun/10 Mar/10 Local 531, , , ,617 Foreign 3,369 3,048 15,980 13,836 Discounted Drafts (8,903) Allowance for doubtful accounts (37,252) (35,074) (37,834) (37,832) TOTAL 497, , , ,718 Trade accounts receivable by age maturity : PARENT COMPANY CONSOLIDATED Jun/10 Mar/10 Jun/10 Mar/10 Falling Due 470, , , ,846 Due up to 30 days 21,476 21,064 21,645 22,735 From 31 to 60 days 1,941 1,742 1,941 1,742 From 61 to 90 days 1, ,142 1,327 From 91 to 180 days 2,098 1,173 2,256 1,561 More than 180 days 37,900 35,367 38,369 38,242 TOTAL 535, , , ,453

22 NOTE 7 INVENTORIES PARENT COMPANY CONSOLIDATED Jun/10 Mar/10 Jun/10 Mar/10 Finished products 105,067 89, , ,029 Raw materials 76,173 61,754 78,895 66,496 Work in progress 46,858 44,121 46,859 44,863 General warehouse 46,869 43,505 47,863 47,412 Advances to suppliers 3,283 2,295 4,866 2,519 Other 10,609 7,925 10,610 8,039 TOTAL 288, , , ,358 NOTE 8 TAX CREDITS Current PARENT COMPANY CONSOLIDATED Mar/10 Dec/09 Mar/10 Dec/09 Deferred income tax and social contribution(*) 61,804 47,462 65,939 52,889 Income tax and social contribution to offset 4,347 13,982 7,418 17,260 ICMS/ PIS/ COFINS on acquisition of fixed assets (**) 52,945 60,110 66,014 67,450 PIS and COFINS to offset 3, ,049 5,294 ICMS and IPI to be recovered 5,070 9,244 6,601 11,240 TOTAL 127, , , ,133 Non Current Deferred income tax and social contribution(*) 27,462 27,695 38,343 38,791 ICMS/ PIS/ COFINS on acquisition of fixed assets (**) 40,135 46,238 48,684 59,770 TOTAL 67,597 73,933 87,027 98,561 (*) see Note 14 b (**)ICMS, PIS and COFINS to offset, were mainly generated upon the acquisition of property, plant and equipment for the industrial plants. To comply with the legislation effective at the time, Management recorded based on tax documents the amounts to offset, and such offset will be in 12, 24 and 48 months for PIS and COFINS and 48 months for ICMS. NOTE 9 RELATED PARTIES a) Transactions with subsidiaries Transactions between subsidiaries, mainly purchases and sales of products, were carried out at prices and under terms and conditions compatible with those of the market. These transactions are carried out between the parent company and its subsidiaries, and the balances are eliminated upon consolidation.

23 PARENT COMPANY DESCRIPTION SUBSIDIARY Duratex Coml. Duraflora Estrela do Sul Duratex Deca Ind. Comercio Cerâmica Monte DRI- Resinas Total Exportadora participações Empreendimentos Industriais Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Assets Clients 2, ,452 7, ,384 8,457 Dividends receivable ,389 14, ,389 14,665 Accounts receivable 74-1,662 1, ,060-3,797 1,695 Subsidiaries ,300 11, ,817 12,142 Liabilities Suppliers ,001 19, , ,020 37,944 Accounts payable - 7, ,131-13,151 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Result Sales 21, ,743 - Purchases , , , ,477 11,434 Financial (181) PARENT COMPANY DESCRIPTION INDIRECT SUBSIDIARIES Jacarandá Mimoso TCI Trading Duratex North Duratex Europe Deca Piazza Total America Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Assets Clients ,009-1, ,691 - Accounts receivable Liabilities Suppliers 1, ,270 - Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Jun/10 Jun/09 Result Purchases 4,940-29, ,415 - Financial - - (35) (35) - b) Other related parties DESCRIPTION Leo Madeiras Leroy Merlin Ligna Elekeiroz S.A. Itautec S.A. Maqs.& Fer. Ltda Cia Bras.Bricolagem Florestal Ltda. Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Assets Clients 13,138 11,667 12,753 11, ,699 - Liabilities Suppliers Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Jun/10 Mar/10 Result Sales 43,007 4,539 26, ,083 - Purchases 74-1, , Other sales Leasing costs (*) ,936 5, (*)Refer to costs with rural leasing entered into its Subsidiary Duraflora S.A. with Ligna Florestal Ltda. (subsidiary of Ligna de Investimentos) related to land that will be used for reforestation. The monthly charges related to this leasing amount to R$ 1,156. Such contract falls due in July 2036, and may be automatically renewed for 15 years more, and will be annually restated by the variation of the average price practiced by the Company on sale of MDP panels. c) Management compensation At June 30, 2010 the compensation paid or to be paid to the main executives of the Company Management was R$ 5,200 as fees (R$ 2,477 at June 30, 2009) R$ 5,714 as profit sharing and R$ 1,902 related to the long term remuneration represented by Stock Options.

24 NOTE 10 INVESTMENTS IN SUBSIDIARIES a) Changes DIRECT INDIRECT (*) Duratex Estrela Duratex Deca Ind. Cer. Monte DRI - Res. Deca North Duratex Duratex Deca Ind. TCI Jacarandá Coml. Exp. Duraflora do Sul Empreend. Comércio Carlo Industriais Total Piazza America Overseas Europe Comércio Trading Mimoso Shares/ quotas held (thousands) Common Preferred Quotas Holding 100,00 100,00 99,99 100, ,98 100,00 100,00 100,00 100,00-82,00 100,00 Capital 10, , , ,150 5, ,904-3,000 82,850 Stockholder s equity 36, ,867 5,586 5, ,029 5,335 7,833 4,688 22,738-3,734 91,623 Net income / (loss) for the period 4,600 39, (121) (125) , ,819 Change in investments At December 31, , ,177 5,396 5, ,153 78,222 71, ,300 5,452 7,208 18,550 22,945 58,069 3,021 86,454 Equity in the results 2,957 17, ,156 5, (204) , Advance for capital increase , Exchange variation on net equity (563) (563) (349) At March 31, , ,191 5,484 5, ,309 83,642 75, ,967 5,266 7,401 19,112 22,887 59,703 3,289 86,527 Equity in the results 2,137 20, ,314 7,906 (121) 35, ,746 Advance for capital increase - 5, , ,350 Exchange variation on net equity (1,038) (1,038) (10) (1,001) Dividends (14,952) - - (881) - Capital decrease with quotas from Deca Ind. e Comércio (59,703) , (59,703) - - Subsidiary merged on (179,326) (91,548) - (270,874) At June 30, , ,973 5,586 5, , ,265 5,335 7,833 4,688 22,738-3,061 91,623 Negative goodwill on acquisition of subsidiaries (I) - (15,152) (15,152) Goodwill on acquisition of subsidiaries (II) At June 30, , ,056 5,586 5, , ,348 5,335 7,833 4,688 22,738-3,061 91,623 * The investments in indirect subsidiaries are carried out through the subsidiary Duratex Comercial Exportadora S.A and Duraflora. (I) Negative goodwill of R$ 15,152 on the acquisition of Satipel Florestal quotas in March and April (II) Goodwill of R$ 235 on the acquisition of the subsidiary Duraflora S.A. The advances for future capital increase (AFAC s), are not remunerated. b) Joint Venture - SCP During the 1st quarter 2010, the wholly-owned subsidiary Duraflora S.A. transferred part of its forest reserves, in the amount of R$ 141,268 to form 5 joint ventures (SCP s), aiming at the maximization of results from plantation, cultivation of forests and the consequent sale of its wood. For this Quarterly Information (ITR) purposes, the SCP s are consolidated. Duraflora S.A investment is equivalent to 84% of SCP s capital and the minority interest that holds 16% of capital, transferred resources of R$ c) Merger of companies On June 30, 2010 the Extraordinary General Meeting approved the corporate restructuring with the merger by Duratex S.A. of its wholly-owned subsidiaries Deca Indústria e Comércio de Materiais Sanitários Ltda. and Cerâmica Monte Carlo S.A., at book values, aiming at the optimization of its production and

25 distribution processes and the rationalization of commercial and administrative operations. The main assets and liabilities of the merged companies are as follows: MERGER BALANCE SHEET at June 30, 2010 ASSETS CURRENT ASSETS Cash and banks /Financial investments Clients Inventories Other assets DECA Ind.e Com. de Mats. Sanitários Ltda Cerâmica Monte Carlo S.A NON CURRENT PROPERTY, PLANT AND EQUIPMENT TOTAL ASSETS LIABILITIES AND STOCKHOLDERS EQUITY CURRENT LIABILITIES Suppliers Personnel Other liabilities NON CURRENT STOCKHOLDERS EQUITY TOTAL LIABILITIES AND STOCKHOLDERS EQUITY NOTE 11 PROPERTY, PLANT AND EQUIPMENT Composition of property, plant and equipment PARENT COMPANY CONSOLIDATED Annual Jun/10 Mar/10 Jun/10 Mar/10 Description Depreciation Net carrying Net carrying Net carrying Net carrying Rate Cost Depreciation value value Cost Depreciation value value Land - 81,985-81,985 65, , , ,361 Construction and improvements 4% 573,060 (217,285) 355, , ,897 (220,495) 372, ,976 Machinery, equip. and facilities 5% to 10% 2,235,521 (843,866) 1,391,655 1,393,764 2,354,620 (879,559) 1,475,061 1,424,108 Construction in progress - 144, , , , , ,118 Furniture and fixtures 10% 27,450 (21,427) 6,023 5,406 29,698 (23,139) 6,559 6,623 IT equipment 20% 28,076 (21,286) 6,790 6,633 29,167 (22,046) 7,121 7,190 Vehicles 20% and 25% 13,026 (9,536) 3,490 3,748 33,947 (19,954) 13,993 14,072 Other assets 10% to 20% 43,152 (28,957) 14,195 11,775 44,244 (29,299) 14,945 15,508 SUM 3,146,438 (1,142,357) 2,004,081 1,952,148 3,755,059 (1,194,492) 2,560,567 2,555,956 Forest reserves , , ,373 TOTAL 3,146,438 (1,142,357) 2,004,081 1,952,148 4,141,515 (1,194,492) 2,947,023 2,926,329 Construction in progress substantially refers to structures and machinery and equipment being installed. The Company has contracts signed for the acquisition of several equipment and services that amount approximately to R$ 24.2 million of commitments assumed at June 30, 2010.

26 As determined by the Accounting Pronouncements Committee Technical Interpretation ICPC10, approved by CVM Deliberation 619/09, the Company concluded the first periodical analyses in order to review and adjust the estimated economic useful life for the depreciation calculation. Although calculations are still being made, no relevant adjustments are expected. The Company intends to change the depreciation rates up to the end of the year, as soon as the mentioned analysis is approved by the related Management authorities. For purposes of this analysis, the Company considered the operating planning for the coming years, internal preceding, as the level of maintenance and use of the items, external elements of comparison such as available Technologies, manufacturers recommendations and manuals and life rate of the assets. NOTE 12 INTANGIBLE ASSETS Description PARENT COMPANY Jun/10 Mar/10 CONSOLIDATED Jun/10 Mar/10 Cost Amortization Net Net Cost Amortization Net Net Softwares 41,106 (16,642) 24,464 20,962 41,336 (16,805) 24,531 21,065 Trademarks, patents and others 2,267-2,267 2,202 2,271-2,271 2,205 Goodwill based on Future Profitability ( * ) 22,154-22,154-22,154-22,154 22,154 TOTAL 65,527 (16,642) 48,885 23,164 65,761 (16,805) 48,956 45,424 (*) Goodwill for expectation of future profitability on the acquisition of the subsidiary Cerâmica Monte Carlo S.A.. NOTE 13 - LOANS AND FINANCING Financing subject to foreign exchange variation is restated based on the respective exchange rate in effect on the last business day of the quarter. Other financing is monetarily restated, when applicable, by the corresponding contractual charges. :

27 Loans and financing have the following characteristics Sureties for Duratex S.A. loans were provided by Itaúsa S.A. in the amount of R$ 357,735, by Companhia Ligna de Investimentos in the amount of R$ 401,830 and by Duratex Comercial Exportadora S.A. in the amount of R$ 480,391. In the case of loans and financing raised by the subsidiaries, the sureties were granted by Itaúsa S.A. in the amount of R$ 29,533, by Duratex S.A.. in the amount of R$ 108,083 and by Duratex Comercial Exportadora S.A. in the amount of R$ 482. Covenants Loans and financing from BNDES, are subject to covenants in accordance with usual market practices that establish, further to certain usual obligations: a) MDP plants of Taquari and MDF plants of Uberaba - presenting operation licenses, to adopt measure and actions to avoid or correct damages to the environment, measures for the security and labor medicine. In the financing contract of MDP plant of Taquari the maintenance of covenants is based on the consolidated balance sheet of Companhia Ligna de Investimentos, that should maintain: payable on liabilities not above 60% and EBITDA margin higher than 13%. In the financing contract of MDF plant of Uberaba the maintenance of covenants is based on Duratex S.A balance sheet, and should maintain: the coverage limit of net debt through the relation of net bank debt/ebitda is not above 3.5, and the relation of gross debt/gross debt plus net equity is not above 0.75 b) HDF plants of Botucatu, MDFII of Agudos, Resinas Industriais de Agudos, Louças de Jundiaí, Deca Metais sanitários of São Paulo and of Jundiaí and Forest area - to maintain, during the contract effectiveness, the indices of the audited balance sheet of Duratex S.A. (i) EBITDA/Net Financial Expenses: