Bradespar S.A. · On December 15, 2006, ... Votorantim Energia Ltda. and Camargo Corrêa Energia S.A., pursuant to Significant Event Notice published in the media,

Bradespar S.A. Interim Financial Statements for the Quarter Ended June 30, 2007 and Independent Accountants’ Review Report Deloitte Touche Tohmatsu Auditores Independentes

(Convenience Translation into English from the Original Previously Issued in Portuguese)


INDEPENDENT ACCOUNTANTS’ REVIEW REPORT

To the Shareholders and Management of Bradespar S.A. São Paulo - SP

1. We have performed a special review of the accompanying interim financial statements of Bradespar S.A. (the “Company”), consisting of the balance sheet as of June 30, 2007, the related statement of income for the quarter then ended and the performance report, all expressed in Brazilian reais and prepared in accordance with Brazilian accounting practices under the responsibility of the Company’s management.

2. Our review was conducted in accordance with specific standards established by the Brazilian Institute of Independent Auditors (IBRACON), together with the Federal Accounting Council, and consisted principally of: (a) inquiries of and discussions with certain officials of the Company who have responsibility for accounting, financial and operating matters about the criteria adopted in the preparation of the interim financial statements; and (b) review of the information and subsequent events that had or might have had material effects on the financial position and results of operations of the Company.

3. As mentioned in note 7, the financial statements of the subsidiaries Millennium Security Holdings Corp. and Valepar S.A. (except its investment in Companhia Vale do Rio Doce), accounted for under the equity method of accounting in the interim financial statements, were not reviewed by independent accountants and, therefore, were not included in our review. The balance of these investments as of June 30, 2007 is R$1,689,550 thousand and the related equity gains in subsidiaries for the quarter then ended totals R$144,411 thousand.

4. Based on our special review, except for the effects of the matter mentioned in paragraph 3, if any, we are not aware of any material modifications that should be made to the interim financial statements referred to in paragraph 1 for them to be in conformity with Brazilian accounting practices and standards established by the Brazilian Securities Commission (CVM), specifically applicable to the preparation of mandatory interim financial statements.

5. The accompanying statement of cash flows for the quarter ended June 30, 2007 is presented for purposes of additional analysis and is not a required part of the basic interim financial statements. Such information has been subjected to the review procedures mentioned in paragraph 2 and, based on our special review, we are not aware of any material modifications that should be made to these interim financial statement for it to be fairly stated in all material respects in relation to the interim financial statements taken as a whole.

Deloitte Touche Tohmatsu

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6. We had previously audited the balance sheet as of March 31, 2007, presented for comparative purposes, and issued an unqualified opinion thereon, dated May 14, 2007, containing a scope limitation similar to that described in paragraph 3. The statements of income and of cash flows for the quarter ended June 30, 2006, presented for comparative purposes, were reviewed by us and our review report thereon, dated August 14, 2006, contained a scope limitation similar to that described in paragraph 3.

7. The accompanying interim financial statements have been translated into English for the convenience of readers outside Brazil.

São Paulo, August 10, 2007

DELOITTE TOUCHE TOHMATSU Maurício Pires de Andrade Resende Auditores Independentes Engagement Partner


BRADESPAR S.A.

BALANCE SHEETS AS OF JUNE 30 AND MARCH 31, 2007(In thousands of Brazilian reais - R$)

ASSETS 06/30/2007 03/31/2007

CURRENT ASSETS 181,674 252,567 Cash and cash equivalents 131,471 175,171 Interest on capital/dividends receivable 50,200 77,379 Other 3 17

NONCURRENT ASSETS 3,624,788 3,323,437

LONG-TERM ASSETS 73,684 74,455 Recoverable taxes 38,682 39,453 Tax credits 35,002 35,002 PERMANENT ASSETS 3,551,104 3,248,982 Investments 3,550,911 3,248,773 Property, plant and equipment 190 206 Deferred charges 3 3

TOTAL ASSETS 3,806,462 3,576,004

The accompanying notes are an integral part of these interim financial statements.

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BRADESPAR S.A.

(In thousands of Brazilian reais - R$)

LIABILITIES AND SHAREHOLDERS' EQUITY 06/30/2007 03/31/2007

CURRENT LIABILITIES 27,914 85,714 Payroll and related charges - 763 Taxes payable 59 83 Accrued interest on capital and dividends 1,818 58,727 Other 26,037 26,141

NONCURRENT LIABILITIES 80,179 76,275

LONG-TERM LIABILITIES 80,179 76,275 Provisions 80,179 76,275

SHAREHOLDERS' EQUITY 3,698,369 3,414,015 Capital 2,500,000 2,500,000 Profit reserve 651,607 651,607 Retained earnings 546,762 262,408

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 3,806,462 3,576,004


BALANCE SHEETS AS OF JUNE 30 AND MARCH 31, 2007

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BRADESPAR S.A.

STATEMENTS OF INCOMEFOR THE QUARTERS ENDED JUNE 30, 2007 AND 2006(In thousands of Brazilian reais - R$)

06/30/2007 06/30/2006

OPERATING INCOME (EXPENSES) 631,694 402,166

Equity in subsidiaries 657,062 376,895 Extraordinary equity in subsidiaries - 218,201 General and administrative expenses (36,275) (259,068) Financial income (expenses) 10,899 8,429 Other operating expenses 8 57,709 INCOME FROM OPERATIONS 631,694 402,166

INCOME BEFORE TAXES ON INCOME 631,694 402,166

NET INCOME 631,694 402,166


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(Convenience Translation into English from the Original Previously Issued in Portuguese) BRADESPAR S.A. NOTES TO THE INTERIM FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 30, 2007 (Amounts in thousands of Brazilian reais - R$, unless otherwise stated) 1. OPERATIONS

Bradespar S.A. (the “Company” or “Bradespar”) holds equity interest in other companies as a partner or shareholder.

Direct and indirect investments are held in the following companies:

a) Millennium Security Holdings Corp. (“Millennium”)

The main activity of this company is to participate in any acts or activities which are not prohibited by the legislation in force in the British Virgin Islands.

b) Antares Holdings Ltda. (“Antares”)

Antares is engaged in the management, lease, purchase and sale of owned assets and investments in other companies as a shareholder.

c) Brumado Holdings Ltda. (“Brumado”)

Brumado holds equity interest in other companies as a partner or shareholder.

d) Valepar S.A. (“Valepar”)

The sole activity of Valepar is to hold an equity interest in Companhia Vale do Rio Doce.

e) Companhia Vale do Rio Doce (“CVRD”)

CVRD is a publicly-traded corporation engaged in the mining, processing and sale of iron ore, pellets, copper and potassium, provision of logistics services, generation of electric power and mining research and development. In addition, through its direct and indirect subsidiaries and jointly-owned subsidiaries, CVRD operates in the following business segments: iron ore, pellets, manganese, ferroalloys, kaolin, iron and steel products, aluminum products and logistics services.

f) CPFL Energia S.A. (“CPFL Energia” or “CPFL”)

CPFL Energia is a publicly-traded company that acts as a holding company, investing in other companies engaged in the distribution, generation and sale of electric power.

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On December 15, 2006, Bradespar concluded the agreement signed on August 10 with Votorantim Energia Ltda. and Camargo Corrêa Energia S.A., pursuant to Significant Event Notice published in the media, and restructured its investments involving the shares of CPFL, which were previously held directly and indirectly by the parties through VBC Participações S.A. and VBC Energia S.A. As a result, Bradespar withdrew from the Group that controls CPFL and VBC Energia S.A., which is now equally held by Votorantim Energia Ltda. and Camargo Corrêa Energia S.A., and Bradespar began holding only shares in CPFL.

2. PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS

We present the interim financial statements of Bradespar as of June 30, 2007.

We present herein, as supplemental information, the consolidated interim financial statements of Bradespar S.A. and its holding subsidiaries (“Consolidated Holding”), which include Bradespar, Antares, Brumado, Millennium, Malta and Bradesplan, the last two considered in the consolidation process until the date of their mergers or spin-offs/sales (note 7.c) - items 8 and 9), and a summary of the balance sheet and statement of income of the jointly-owned subsidiaries (note 15.1.).

The individual and consolidated interim financial statements have been prepared and are presented in conformity with Brazilian accounting practices and standards established by the Brazilian Securities Commission (CVM). These financial statements reflect the changes introduced by the following accounting standards: Accounting Standards and Procedures (NPC) No. 27, “Presentation and Disclosures”, and No. 22, “Provisions, Liabilities, Contingent Liabilities and Contingent Assets”, both issued by the Brazilian Institute of Independent Auditors (IBRACON) on October 3, 2005 and approved by CVM Resolutions No. 488 and No. 489, respectively, on the same date. Certain reclassifications have been made to the financial statements for the quarter ended June 30, 2006 to conform them to the aforementioned accounting standards and allow comparability with the current quarter. The main changes resulting from applying these standards are as follows:

• Presentation of the group “Noncurrent” in assets and liabilities.

• Reclassification of escrow deposits, previously classified in assets, to liabilities as a reduction to the account “Reserve for contingencies”, when applicable.

Accounting estimates used in the preparation of the interim financial statements for deferred taxes, reserves and contingent liabilities were based on the best evidence available and assumptions existing at the balance sheet date. Actual results could differ from those estimates.

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3. SIGNIFICANT ACCOUNTING PRACTICES

a) Current and noncurrent/long-term assets

Stated at cost, including, where applicable, income earned and monetary and exchange variations (on a daily pro rata basis), adjusted to their probable realizable values, where appropriate.

Tax credits are stated at probable realizable values, result from tax loss carryforwards and temporary differences and are recognized, where applicable, in current assets and long-term assets.

b) Investments

Stated at acquisition cost, considering the following:

I) Significant investments in affiliates, subsidiaries and jointly-owned subsidiaries are accounted for under the equity method, plus/less unamortized goodwill/negative goodwill and provision for losses, where applicable. Other investments are stated at cost, less provision for losses, where applicable.

II) Goodwill on acquisition of investments is amortized over the periods described in note 7.d) - item 1.

c) Current and noncurrent/long-term liabilities

Stated at known or estimated amounts, including, where applicable, accrued interest and monetary and exchange variations (on a daily pro rata basis). Income tax is calculated on taxable income at the rate of 15% plus a 10% surtax, where applicable.

Social contribution tax is calculated on pretax income at the rate of 9%. Provisions were recorded for other taxes in accordance with applicable legislation.

d) Contingent assets and liabilities and legal obligations - tax and social security

Contingent assets and liabilities are measured, recorded and disclosed according to the criteria established by CVM Resolution No. 489/05.

• Contingent assets: are not accounted for, unless management has total control over the situation or when there is assurance of favorable, final and unappealable judicial decision, indicating that a favorable outcome is practically certain. Contingent assets with probable favorable outcome are merely disclosed in the financial statements.

• Contingent liabilities: are recorded taking into consideration the legal counsel’s opinion, nature of the lawsuits, similarity with prior lawsuits, complexity and prior court decisions, whenever the risk of loss is assessed as probable, with probable outflow of funds to settle obligations, and when the amounts involved can be reliably measured. Contingent liabilities assessed as possible losses are not accounted for and are merely disclosed in the notes to the financial statements, and contingent liabilities assessed as remote losses do not require reserve and disclosure.

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• Legal obligations - tax and social security: arise from lawsuits in which the legality or constitutionality of taxes is challenged. Regardless of the assessment of the likelihood of a favorable outcome, the total amount of these lawsuits is recorded in the financial statements.

e) Results of operations

Determined on the accrual basis.

4. CONSOLIDATED HOLDING FINANCIAL STATEMENTS

a) In the financial statements titled “Consolidated Holding”, intercompany investments, balances and transactions have been eliminated. Goodwill on acquisition of consolidated investments is recorded in permanent assets - investments. Minority interest in subsidiaries is recorded in a separate caption of shareholders’ equity when applicable.

The consolidated interim financial statements of Bradespar include the following direct and indirect subsidiaries and jointly-owned subsidiaries:

Bradespar’s direct and indirect ownership interest - %

06/31/2007 03/31/2007 06/30/2006 Antares Holdings Ltda. 100.00 100.00 100.00Millennium Security Holdings Corp. 100.00 100.00 100.00Brumado Holdings Ltda. (*) 100.00 100.00 - (*) This company was acquired on December 15, 2006.

b) Presentation of Consolidated Holding interim financial statements

We present below, as supplemental information, the consolidated balance sheets as of June 30, 2007 and 2006 and March 31, 2007 and the consolidated statements of income for the second quarters of 2007 and 2006 and fourth quarter of 2006 of Bradespar and its holding subsidiaries (note 2).

Bradespar S.A.

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BRADESPAR CONSOLIDATED HOLDING

BALANCE SHEETS LIABILITIES AND ASSETS 06/30/2007 03/31/2007 06/30/2006 SHAREHOLDERS’ EQUITY 06/30/2007 03/31/2007 06/30/2006 CURRENT ASSETS 286,010 262,577 314,915 CURRENT LIABILITIES 29,247 86,179 27,400Cash and cash equivalents Trade accounts receivable

286,0073

262,56017

292,06122,854

Accrued interest on capital and dividends 1,817 58,727 864

Other 27,430 27,452 26,536 NONCURRENT ASSETS 3,521,785 3,313,892 2,832,271 NONCURRENT LIABILITIES 80,179 76,275 67,529 LONG-TERM ASSETS 85,797 85,681 79,137 LONG-TERM LIABILITIES 80,179 76,275 67,529Recoverable taxes 50,795 50,679 44,135 Reserve for contingencies 80,179 76,275 67,529Tax credits 35,002 35,002 35,002 PERMANENT ASSETS 3,435,988 3,228,211 2,753,134 SHAREHOLDERS’ EQUITY 3,698,369 3,414,015 3,052,257Investments 3,435,795 3,228,002 2,752,876 Capital 2,500,000 2,500,000 2,045,000Property, plant and equipment 190 206 253 Profit reserve 651,607 651,607 605,091Deferred charges 3 3 5 Retained earnings 546,762 262,408 402,166 TOTAL ASSETS 3,807,795 3,576,469 3,147,186 TOTAL LIABILITIES AND

SHAREHOLDERS’ EQUITY 3,807,795 3,576,469 3,147,186

Bradespar S.A.

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BRADESPAR CONSOLIDATED HOLDING

STATEMENTS OF INCOME Quarters Six-month periods 2nd Q/2007 2nd Q/2006 06/30/2007 06/30/2006

Equity in subsidiaries 315,192 234,911 588,145 376,581 Extraordinary equity in subsidiaries - - - 218,201 Proceeds from sales of investments - 57,706 - 57,706 Dividends from subsidiaries 64,778 - 64,778 - OPERATING INCOME 379,970 292,617 652,923 652,488 Personnel, general and administrative expenses (1,369) (3,882) (6,080) (9,474)Goodwill amortization (12,901) (12,900) (25,802) (25,802)Extraordinary goodwill amortization - - - (218,201)Financial income 8,929 12,659 17,440 16,028 Other operating expenses (4,339) (8,493) (4,763) (13,541) INCOME FROM OPERATIONS 370,290 280,001 633,718 401,498

INCOME BEFORE TAXES ON INCOME 370,290 280,001 633,718 401,498 INCOME AND SOCIAL CONTRIBUTION TAXES (1,004) 2,028 (2,024) 668

NET INCOME 369,286 282,029 631,694 402,166

5. CASH AND CASH EQUIVALENTS

a) Cash and cash equivalents consist of:

Company Consolidated Holding 06/30/2007 03/31/2007 06/30/2007 03/31/2007 06/30/2006

Financial investment funds 131,460 175,139 284,314 260,768 290,238Cash and cash equivalents 11 32 1,693 1,792 1,823Total 131,471 175,171 286,007 262,560 292,061

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b) Cash flows

For purposes of additional information for readers, we present below the statements of cash flows (Company and Consolidated Holding), prepared under the indirect method: Company Consolidated Holding Six-month periods Quarters Six-month periods 06/30/2007 06/30/2006 2nd Q/2007 2nd Q/2006 06/30/2007 06/30/2006 OPERATING ACTIVITIES Net income 631,694 402,166 369,286 282,029 631,694 402,166 Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 33 42 17 20 33 42 Proceeds from barter/sale of investments - (57,706) - (57,706) - (57,706) Current/deferred income and social contribution taxes

- - 1,004

(2,028) 2,024

(668)

Interest, monetary and exchange variations, net (564) (1,647) (384) (3,378) (924) (3,659) Goodwill amortization 25,802 25,802 12,901 12,900 25,802 25,802 Extraordinary goodwill amortization - 218,201 - - - 218,201 Equity in subsidiaries (657,062) (376,895) (315,192) (234,911) (588,145) (376,581) Extraordinary equity in subsidiaries - (218,201) - - - (218,201) Dividends received from investments stated at cost

- - (64,778)

- (64,778)

-

Other 3,285 4,452 2,540 3,180 3,296 9,821 Changes in assets and liabilities: Decrease in securities - - - 109,650 - 109,650 (Increase) decrease in other assets (2,898) (1,003) (3,133) (1,141) (3,764) (1,173) Barter/sale of investments - 308,000 - 308,000 - 308,000 Acquisition of investments - (5,001) - (1) - (1) Interest on capital and dividends received 89,217 77,518 153,995 146,517 153,995 146,517 Decrease in other liabilities (604) (813) (235) (11,072) (811) (11,323) Net cash provided by (used in) operating activities 88,903 374,915 156,021 552,059 158,422 550,887 INVESTING ACTIVITIES Acquisition of investments - (16) - - - (16) Net cash used in investing activities - (16) - - - (16) FINANCING ACTIVITIES Loans - - - (107,015) - (107,015) Issuance of securities - - - (114,415) - (114,415) Other - - - (10,378) - (10,378) Interest on capital and dividends paid (239,115) (111,987) (132,574) (111,983) (239,115) (111,987) Net cash used in financing activities (239,115) (111,987) (132,574) (343,791) (239,115) (343,795) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

(150,212) 262,912 23,447

208,268 (80,693)

207,076

CHANGES IN CASH AND CASH EQUIVALENTS, NET

At beginning of period 281,683 20,179 262,560 83,793 366,700 84,985 At end of period 131,471 283,091 286,007 292,061 286,007 292,061 CASH AND CASH EQUIVALENTS (150,212) 262,912 23,447 208,268 (80,693) 207,076

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6. TRADE ACCOUNTS RECEIVABLE

Company Consolidated Holding 06/30/2007 03/31/2007 6/30/2007 03/31/2007 06/30/2006

Interest on capital/dividends receivable 50,200 77,379 - - 22,804Sundry advances/other 3 17 3 17 50Total 50,203 77,396 3 17 22,854

7. INVESTMENTS

a) Organization chart of Bradespar

For a better understanding, we summarize below the organization chart of the main direct and indirect investments of Bradespar as of June 30, 2007:

(1) Companies whose interim financial statements for the quarter ended March 31, 2007 were reviewed by the same independent auditors of Bradespar.

(2) Companies whose interim financial statements were not reviewed by independent auditors.

(3) Includes treasury shares.

100.0% V/T

5.9% V/T

100.0% V/T

21.2% V

17.4% T

52.3% V

100.0% V/T

Brumado

(1)

Valepar (2)

Antares(1)

Millennium (2)

CPFL Energia(1)

CVRD (1)

V – Voting

T – Total

3.1% V/T

(3)

31.9% V/T

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b) Adjustments resulting from investments valued by the equity method were recorded in the caption “Equity in subsidiaries” and represented, for the Company, earnings of R$657,062 in the first half of 2007 (R$595,096 as of June 30, 2006), and in Consolidated Holding, earnings of R$588,145 in the first half of 2007 and earnings of R$315,192 in the second quarter of 2007 (R$594,782 as of June 30, 2006 and R$234,911 in the second quarter of 2006).

c) Bradespar’s direct investments, accounted for under the equity method, are as follows:

Capital

Adjusted shareholders’ equity

Adjusted result

Number ofshares held(thousand)

Number ofshares held(thousand)

Ownership interest Investments

Equity accounting

adjustments (3) ON 06/30/2007 03/31/2007 2nd Q/2007 2nd Q/2006 06/30/2007 06/30/2006Bradesplan

Participações S.A. (9) - - - - - - - -

-

4,445 - 16,328Antares

Holdings Ltda. (1) (7) 274,547 264,763 68,917 - 274,547 100.000% 264,763 170,418

67,166

35,700 68,917 35,700Malta Holdings

Ltda. (8) - - - - - - - -

-

(2,619) - 8,995Valepar S.A. (1) (2) (4) (5)

(6)(10) 7,083,206 18,716,416 3,372,002 68,398 - 17.442% 3,286,148 3,078,355

315,192

202,196 588,145 534,073Total 3,550,911 3,248,773 382,358 239,722 657,062 595,096

(1) Information relating to June 30, 2007.

(2) Jointly-owned subsidiary.

(3) This adjustment considers the subsidiaries’ results from the acquisition date and includes subsidiaries’ changes in assets and liabilities not derived from results, as well as adjustments for consistent accounting principles, when applicable;

(4) The financial statements as of June 30, 2007 of certain subsidiaries, jointly-owned subsidiaries and affiliates, whose investment balances total R$1,687,883 and equity in investments totals R$49,913 in the second quarter of 2007 and R$144,550 in the first half of 2007, were not reviewed by independent auditors.

(5) In Consolidated Holding, investments include goodwill based on the difference between the market value of the investments and their carrying value, in the amount of R$21,631 (R$34,532 as of March 31, 2007, of which R$4,750 is based on the future profitability of the investments, and R$73,236 as of June 30, 2006, of which R$37,533 is based on the future profitability of the investments). The amount amortized in the first half of 2007 was R$25,802 (R$12,901 in the second quarter of 2007, R$12,900 in the second quarter of 2006 and R$25,802 in the first half of 2006).

(6) Adjusted shareholders’ equity includes R$525,492 related to the adjustment to the controlling shareholder’s accounting criteria with respect to the goodwill amortization period, whose effect on income for the second quarter of 2007 is R$58,388 and R$58,388 in the first quarter of 2006.

(7) The interim financial statements of this company for the quarter ended June 30, 2007 were reviewed by the same independent auditors of Bradespar.

(8) Company merged into Antares Holdings Ltda. on May 15, 2006.

(9) On May 15, 2006, Banco Bradesco S.A. and Bradespar entered into an “Agreement for Sale of Shares of Bradesplan Participações S.A.”, whereby Bradespar sold to Bradesco 100% of the shares of Bradesplan for R$308,000. The transaction increased Bradespar’s income by R$57,706.

(10) Company not reviewed by independent auditors.

d) Investments in subsidiaries (Consolidated Holding) are represented by:

Goodwill Investment amount Total investments

Adjustment arising from valuation

06/30/2007 03/31/2007 06/30/2006 2nd Q/2007 2nd Q/2006 06/30/2007 06/30/2006 Valepar S.A. (1) 21,631 3,264,517 3,286,148 3,078,355 2,561,011 315,192 202,196 588,145 534,073VBC Participações S.A. (2) - - - - 191,865 - 32,715 - 60,709Other investments-

CPFL Energia S.A. (2) - - 149,647 149,647 - - - - -Total 21,631 3,264,517 3,435,795 3,228,002 2,752,876 315,192 234,911 588,145 594,782 (1) The goodwill of R$21,631, net of accumulated amortization, is based on the difference between the fair value of investments and

their carrying value, to be amortized over ten years or, when applicable, as these assets are sold or written off. Analyses of the realizable value of goodwill are performed on a periodic basis, based on projections of future results.

(2) On December 15, 2006, Bradespar completed the restructuring of its investments involving the shares of CPFL Energia. As a

result, Bradespar withdrew from the Group that controls CPFL and VBC Energia and became the holder of 43,049,000 shares in CPFL, without any relation to the CPFL shareholders’ agreement and representing 8.97% of CPFL’s capital.

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8. SHAREHOLDERS’ EQUITY (COMPANY)

a) Capital

Fully subscribed and paid-up capital is represented by registered book-entry shares, with no par value, as follows:

06/30/2007 03/31/2007 06/30/2006 Common 61,332,252 61,332,252 30,666,126Preferred 113,512,448 113,512,448 56,756,224Total 174,844,700 174,844,700 87,422,350 The Extraordinary Shareholders’ Meeting held on January 8, 2007 approved the capital increase in the amount of R$455, from R$2,045 to R$2,500, by means of capitalization of part of the caption “Profit reserve - statutory reserve”, granting to the Company’s shareholders, for free and as a bonus, 1 new share of the same type for each share held.

b) Interest on capital

Preferred shares are nonvoting but entitle their holders to all rights and advantages of common shares, as well as priority guaranteed by the bylaws in capital reimbursement and an additional 10% sum added to interest on capital and/or dividends, according to item II, paragraph 1, article 17 of Law No. 6,404/76, with new wording provided by Law No. 10,303/01.

According to the bylaws, shareholders are entitled to interest on capital and/or dividends that total at least 30% of net income adjusted as per Brazilian corporate law.

To improve Corporate Governance practices and better estimate the return on shareholders’ capital, beginning 2006 the Company adopted an Indicative Policy for Minimum Annual Compensation to be paid in the form of dividends and/or interest on capital, based on the Company’s projected cash flows, as shown below:

• The Company’s Executive Board will announce by the last business day of February of each year a proposal to be submitted to the Board of Directors for payment of a minimum compensation to shareholders, in U.S. dollars, in two semiannual installments due by the 15th of May and November.

• The amounts approved will be translated into local currency at the U.S. dollar selling rate (“Ptax-opção 5”), released by the Central Bank of Brazil on the business day prior to that of the Board of Directors’ meetings in which the declaration and payment of said compensation will be resolved.

• The Executive Board may also propose to the Board of Directors, based on an analysis of the Company’s cash flow, the declaration and payment of additional dividends and/or interest on capital, besides the minimum compensation to be announced.

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On May, 15, 2006, Bradespar paid dividends to its shareholders, in the amount of R$57,315, to supplement interest on capital for 2006, at R$0.307820882 per common share and R$0,338602971 per preferred share, and interest on capital in the amount of R$84,932, at the gross amount of R$0.456143124 per common share (R$0.387721655 net of withholding income tax) and R$0.5017574370 per preferred share (R$0.426493821 net of withholding income tax). These amounts total R$142,247, equivalent to US$70,000,000, relating to the first installment of the minimum annual compensation for 2007.

c) Profit reserve

06/30/2007 03/31/2007 Profit reserves 651,607 651,607Legal reserve (1) (3) 83,429 83,429Statutory reserve for capital increase (2) (3) 568,178 568,178 (1) 5% of net income for the year is required to be allocated to this reserve until it

equals 20% of paid-up capital or 30% of capital plus capital reserves. After this limit, allocation is no longer required. The legal reserve can only be used to increase capital or offset losses.

(2) This reserve can be comprised of 100% of remaining net income after legal allocations, upon a proposal of the Executive Board approved by the Board of Directors and Shareholders’ Meeting, up to a limit of 100% of paid-up capital.

(3) Allocation of income occurs only in the annual balance sheets.

d) Change in shareholders’ equity in the quarter

2nd Q/07 2nd Q/06 06/30/2007 6/30/2006 Opening balance 3,414,015 2,770,228 3,151,607 2,650,091Net income for the quarter 369,286 282,029 631,694 402,166Interest on capital/proposed dividends (84,932) - (84,932) -Closing balance 3,698,369 3,052,257 3,698,369 3,052,257

9. TAX CREDITS - CURRENT AND LONG TERM (CONSOLIDATED)

I - Company

a) Recoverable taxes refer mainly to income tax loss carryforwards from prior years and withholding income tax in the amount of R$38,682 (R$39,453 as of March 31, 2007).

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17

b) Calculation of income and social contribution tax charges:

06/30/2007 06/30/2006 Income before income and social contribution taxes 631,694 402,166 Income and social contribution taxes at the statutory rates of 25% and 9%, respectively (214,776) (136,736) Effect of additions and deductions on tax calculation: Investments in subsidiaries, taxed in the corresponding companies 223,401 202,333 Nondeductible expenses and provisions, net of nontaxable income (733) (1,072) Interest on capital (received) (11,967) (15,491) Interest on capital (paid) 28,877 - Unrecorded tax credits (24,802) (49,034)Income and social contribution taxes - -

c) Tax credits

Tax credits as of June 30 and March 31, 2007 refer to income tax loss carryforwards of R$24,682, social contribution tax loss carryforwards of R$9,552 and temporary differences of R$768, which are expected to be realized in up to six years. Unrecorded tax credits total R$298,016.

II - Consolidated Holding

a) Recoverable taxes refer mainly to income and social contribution tax loss carryforwards from prior years and withholding income tax on temporary cash investments and interest on capital in the amount of R$50,795 (R$50,679 as of March 31, 2007 and R$44,135 as of June 30, 2006).

b) Calculation of income and social contribution tax charges:

Quarters Six-month periods 2nd Q/07 2nd Q/06 06.30.2007 06.30.2006

Income before income and social contribution taxes 370,290 280,001 633,718 401,498 Income and social contribution taxes at the statutory rates of 25% and 9%, respectively (125,899) (95,200)

(215,463) (136,509)

Effect of additions and deductions on tax calculation: Investments in subsidiaries, taxed in the corresponding companies 107,165 79,870 199,969 202,226 Nondeductible expenses and provisions, net of nontaxable income 21,897 (286) 21,189 (1,072) Interest on capital (received) (11,967) (15,491) (11,967) (15,491) Interest on capital (paid) 28,877 - 28,877 - Unrecorded tax credits (21,084) 31,116 (24,641) (49,407) Other 7 2,019 12 921 Income and social contribution taxes (1,004) 2,028 (2,024) 668

Bradespar S.A.

18

c) Tax credits as of June 30, 2007 and March 31, 2007 are represented by income tax loss carryforwards of R$24,682, social contribution tax loss carryforwards of R$9,552, and temporary differences of R$768, which are expected to be realized in up to six years. Unrecorded tax credits total R$332,063.

10. FINANCIAL INSTRUMENTS

Bradespar, its subsidiaries and jointly-owned subsidiaries enter into operations involving financial instruments, which are recorded in balance sheet accounts or memorandum accounts, in order to manage their exposure to interest rate risks, as shown below:

a) Bradespar

The main financial instruments recorded as assets in balance sheet accounts consist principally of direct and indirect investments accounted for under the equity method. The main investments frequently traded on the stock exchanges are summarized below, considering the latest available price as of June 30, 2007:

Book value

Stock exchange price (*)

Valepar/CVRD - registered common shares 3,286,148 11,789,164CPFL Energia - registered common shares 149,647 1,668,579 (*) Closing price on June 29, 2007.

The prices of these investments on stock exchanges do not reflect the control premium corresponding to a lot of shares.

b) CVRD

As of June 30, 2007, CVRD’s loans and financing were collateralized by:

• Government guarantees in the amount of R$24,607, for which a counterguarantee was offered.

• Receivables securitization program in the amount of R$571.246.

• Other assets in the amount of R$789.917.

Bradespar S.A.

19

11. RELATED PARTIES

The main balances and transactions between Bradespar and its subsidiaries are as follows:

a) Bradespar

Assets (Liabilities) Revenue (Expense) 06/30/2007 03/31/2007 06/30/2006 2nd Q 07 2nd Q 06 06/30/2007 06/30/2006 Accrued interest on

capital and dividends-

Antares Holdings Ltda. 50,200 77,379 - - - - -

b) Antares

Assets (Liabilities) Revenue (Expense) 06/30/2007 03/31/2007 06/30/2006 2nd Q 07 2nd Q 06 06/30/2007 06/30/2006 Accrued interest on capital

and dividends-

Bradespar S.A. (50,200) (77,379) - - - - -

12. OTHER OPERATING EXPENSES (CONSOLIDATED HOLDING)

2nd Q/07 2nd Q/06 06/30/2007 06/30/2006 Tax expenses (4,339) (7,082) (4,771) (7,131)Provision for loss on Globopar Euronotes - (1,413) - (6,412)Other - 2 8 2 Total (4,339) (8,493) (4,763) (13,541)

13. CONTINGENT ASSETS AND LIABILITIES/LEGAL OBLIGATIONS/ GUARANTEES/ESCROW DEPOSITS (CONSOLIDATED)

a) Contingent assets

As of June 30, 2007 contingent assets were not recognized, although there are lawsuits in which the likelihood of a favorable outcome is probable, as shown below:

• COFINS - R$7,572: seeks refund or offset of COFINS (tax on revenue) paid under the terms of Law No. 9,718/98, in the period from January to October 2001, in the amount exceeding the tax due on revenues.

• PIS - R$1,641: seeks refund or offset of PIS (tax on revenue), paid under the terms of Law No. 9,718/98, in the period from January to October 2001, in the amount exceeding the tax due as per Supplementary Law No. 07/70 (“PIS Repique”) or at least the amount exceeding the tax due on revenues.

Bradespar S.A.

20

b) Contingent liabilities assessed as probable losses and legal obligations - tax and social security

The companies included in the Consolidated Holding are parties to tax lawsuits arising in the normal course of business.

The reserves were recorded taking into account the legal counsel’s opinion, nature of lawsuits, similarity with prior lawsuits, complexity and prior court decisions, whenever loss is assessed as probable.

Bradespar’s management understands that the reserve recorded is sufficient to cover losses that may result from lawsuits.

The liability related to legal obligations under litigation is maintained until a favorable, final and unappealable court decision is rendered or the statute of limitations has expired.

I - Contingent liabilities

Under the sale agreement for Bradesplan shares signed with Banco Bradesco in May 2006 (note 7.c) - item (9)), Bradespar is liable for tax lawsuits (PIS and COFINS) of the former subsidiary Bradesplan, and a reserve for contingencies was recorded in the amount of R$49,774.

II - Legal obligations - tax and social security

Bradespar is challenging in court the legality and constitutionality of certain taxes, which are fully covered by a reserve, despite the good chances of a favorable outcome in the medium and long terms, based on the legal counsel’s opinion.

The main matters are:

• PIS and COFINS - R$17,514: seeks the noninclusion, in the PIS and COFINS tax basis, of the interest on capital received from investees, since this interest is legally considered to be dividends, which are not subject to PIS and COFINS.

• COFINS - R$8,016: seeks the right to calculate and pay COFINS, from November 2001 to January 2004, on actual revenue, as set forth in article 2 of Supplementary Law No. 70/91, thus not considering the unconstitutional increase in the tax basis established by paragraph 1, article 3 of Law No. 9,718/98.

• PIS - R$5,218: seeks the cancellation of the changes introduced by Law No. 10,637/02 and the release from penalty for having calculated and paid PIS, beginning December 2002, as provided for in Supplementary Law No. 07/70 (“PIS Repique”).

Bradespar S.A.

21

III - Change in legal obligations and contingent liabilities

Contingencies Legal obligations Contingent liabilities Total

Consolidated Holding Company



At beginning of year 27,349 27,349 49,774 49,774 77,123 77,123 Monetary adjustment 4,573 4,573 - - 4,573 4,573 Escrow deposits (1,517) (1,517) - - (1,517) (1,517)Balance as of 06/30/2007 30,405 30,405 49,774 49,774 80,179 80,179 Balance as of 03/31/2007 26,501 26,501 49,774 49,774 76,245 76,245 Balance as of 06/30/2006 17,755 17,755 49,774 49,774 67,529 67,529

c) Contingent liabilities assessed as possible losses

Bradespar monitors all administrative and judicial proceedings filed by or against it and classifies the proceedings according to the estimate of loss based on the legal counsel’s opinion. In this respect, proceedings assessed as possible loss are not accounted for. Bradespar and subsidiaries (Consolidated Holding) did not have material contingent liabilities assessed as possible loss.

14. OTHER INFORMATION

a) Other liabilities in Consolidated Holding refer principally to share fractions from the reverse stock split approved at the Extraordinary Shareholders’ Meeting on April 30, 2004, which were sold at the auction on the São Paulo Stock Exchange (BOVESPA) on July 14, 2004, and the amount of R$26,016 (March 31, 2007 - R$26,053 and June 30, 2006 - R$26,151).

Bradespar S.A.

22

15. ADDITIONAL INFORMATION ON THE JOINTLY-OWNED SUBSIDIARIES

The reported amounts are those disclosed by Valepar S.A. (“Valepar”), Companhia Vale do Rio Doce (“CVRD”), VBC Participações S.A. (“VBC”) and do not represent the proportional portion of Bradespar:

15.1. Condensed balance sheets and statements of income of jointly-owned subsidiaries

Following are the balance sheets and statements of income of the main indirect jointly-owned subsidiaries of Bradespar as of June 30, 2007:

Balance sheets CVRD Valepar VBC (*)

06/30/2007 03/31/2007 06/30/2006 06/30/2007 03/31/2007 06/30/2006 06/30/2006 ASSETS CURRENT ASSETS 21,741,006 26,339,770 14,659,527 505,724 1,046,636 452,770 1,488,625 NONCURRENT ASSETS 106,330,693 99,064,838 48,537,769 18,737,058 16,900,834 14,219,136 4,051,344 Long-term assets 5,242,095 5,629,432 4,997,804 7,675 7,675 7,642 1,162,632 Permanent assets 101,088,598 93,435,406 43,539,965 18,729,383 16,893,159 14,211,494 2,888,712 TOTAL 128,071,699 125,404,608 63,197,296 19,242,782 17,947,470 14,671,906 5,539,969 LIABILITIES CURRENT LIABILITIES 13,117,883 16,391,242 8,855,240 494,277 1,035,243 438,072 1,588,533 NONCURRENT LIABILITIES 56,935,661 60,084,386 16,399,966 - - - 3,375,021 Long-term liabilities 56,888,915 60,082,538 16,393,179 - - - 3,375,021 Deferred income 46,746 1,848 6,787 - - - - Minority interest 4,920,318 4,736,816 2,363,186 - - - 815 Shareholders’ equity and

capitalizable funds 53,097,837

44,192,164 35,578,904

18,748,505

16,912,227 14,233,834

575,600 TOTAL 128,071,699 125,404,608 63,197,296 19,242,782 17,947,470 14,671,906 5,539,969 Direct and indirect ownership 5.66% 5.66% 5.63% 17.44% 17.44% 17.44% 33.33%

Statements of income

CVRD Valepar VBC (*) 06/30/2007 06/30/2006 06/30/2007 06/30/2006 06/30/2006 Gross revenue from sales and services 34,825,941 18,411,789 - - 2,204,633 Taxes on sales and services (767,969) (666,646) - - (597,319)Net revenue from sales and services 34,057,972 17,745,143 - - 1,607,314 Cost of sales and services (14,656,303) (8,295,432) - - (1,044,637)Gross profit (loss) 19,401,669 9,449,711 - - 562,677 Operating income (expenses), net (2,127,290) (934,210) (120,360) (121,820) (142,026)Financial income (expenses), net (255,356) (725,459) 543 229 (94,035)Equity in subsidiaries (1,187,528) (40,870) 3,550,192 1,991,823 - Capital gain - - 15 1,251,011 - Income from operations 15,831,495 7,749,172 3,430,390 3,121,243 326,616 Nonoperating income (expenses) 1,260,766 - - (1,397)Income before taxes on income 17,092,261 7,749,172 3,430,390 3,121,24 3 325,219 Income and social contribution taxes (5,270,359) (1,178,436) - - (136,814)Extraordinary item, net of taxes - - - - (6,266)Minority interest (884,739) (481,077) - - (12)Net income 10,937,163 6,089,659 3,430,390 3,121,243 182,127

(*) Since November 21, 2006 Bradespar is no longer consolidating VBC (see note 7.d) - item (2)), and equity gain was determined through that date.

Bradespar S.A.

23

CVRD is a publicly-traded company and, accordingly, files its interim financial statements with the CVM. Therefore, detailed information on this company as of June 30 and March 31, 2007 and June 30, 2006 can be obtained directly from the CVM site www.cvm.gov.br.

Bradespar S.A.

24

MANAGEMENT REPORT

For a better understanding of its results, BRADESPAR presents supplemental (note 4), financial information consolidating only its nonoperating subsidiaries. The Company believes that this form of presentation is the one that best reflects its financial position, clearly segregating its receivables and payables from those of its investees. The information is expressed in thousands of Brazilian reais (R$) and in conformity with Brazilian corporate law.

OPERATING REVENUE

As an investment company, Bradespar’s current operating revenues are derived from equity in subsidiaries of Companhia Vale do Rio Doce - CVRD, dividends and interest on capital received from CPFL Energia S.A., and gain on sale of its ownership interests. In 2Q07, the operating income of R$379.9 million was 29.9% higher than the recurring income for the same period in 2006, due to: (i) CVRD’s excellent performance, with an increase of 55.9% in equity in subsidiaries, and (ii) dividends of R$64.8 million received from CPFL Energia that, comparing to VBC Energia S.A.’s equity in subsidiaries recorded in 2Q06, increased 98%.

In 1H07, the operating income of R$652. 9 million was in line with the same period of 2006. However, the recurring operating income (excluding extraordinary equity in subsidiaries arising from the merger of Caemi into Vale) increased 50.3%. PERSONNEL, GENERAL AND ADMINISTRATIVE EXPENSES

Personnel, general and administrative expenses totaled R$1.4 million in 2Q07, 64.7% lower than in 2Q06 due to the reduction in the number of the Company’s employees and Directors. In February, Bradespar outsourced general and administrative services. At the end of the quarter, the Company had three Directors and, beginning May, only two. In 1H07, the decrease in expenses, due to the effects mentioned above, was 35.8%. GOODWILL AMORTIZATION EXPENSES

Goodwill amortization expenses refer solely to the investment in CVRD/Valepar S.A. The amortized amounts of R$12.9 million in 2Q07 and R$25.8 million in 1H07 were in line with the amortization for the same period of the prior year.

R$thousand

1H07 1H06 2Q07 2Q06

588,145 376,581 56.2% 315,192 234,911 34.2%

Valepar/CVRD 588,145 315,872 86.2% 315,192 202,196 55.9%VBC - 60,709 - - 32,715 -

- 218,201 - - - -

- 57,706 - - 57,706 -

64,778 - - 64,778 - -

652,923 652,488 0.1% 379,970 292,617 29.9%

Variation %OPERATING REVENUE Variation

%

TOTAL

SALE OF INVESTMENT IN BRADESPLAN

EXTRAORDINARY EQUITY IN SUBSIDIARIES -VALEPAR

DIVIDENDS RECEIVED FROM CPFL

EQUITY IN SUBSIDIARIES

Bradespar S.A.

25

The remaining goodwill (R$21.6 million) represents only 0.6% of the book value of the investments and will be amortized by the end of the year. OTHER OPERATING EXPENSES

Other operating expenses in 2Q07 totaled R$4.3 million, 48.9% lower than in 2Q06, as a result of: (i) recording, in that period, 2 months of the valuation allowance for Globopar Euronotes (sold together with Bradesplan in May 2006), and (ii) lower amount of tax expenses. In 1H07, the reduction in expenses, due to the effects mentioned above, was 64.8%. NET INCOME

Net income was R$369.2 million in 2Q07 and R$631.7 million in 1H07, 30.9% and 57.1%, respectively, higher than net income for the same periods in 2006, representing the best results for those periods in Bradespar’s history.

PERFORMANCE OF INVESTEES

Companhia Vale do Rio Doce

CVRD is the world’s largest producer and exporter of iron ore and nickel. The main consolidated results of the company for 2007, compared to the prior year, were as follows:

• Gross revenue of R$18.2 billion (+ 79.6%);

• EBITDA of R$10.3 billion (+99%);

• Net income of R$5.8 billion (+49.6%);

1º Trimestre 2º Trimestre

631.7

402.1 308.1

5.3

- 236.8

- 677.3

- 75.5 - 50.3

1H00 1H01 1H02 1H03

1H04 1H05 1H06 1H07

- 54.2

-3.9

- 594.5 -119.1

27.4

185.8282.0

369.2

3.9

- 71.6 - 82.8 - 117.7 - 22.1

122.3 120.1 262.5

1st Quarter 2nd Quarter

Bradespar S.A.

26

CPFL Energia

CPFL Energia is the largest private electricity group in Brazil and the leader in the Brazilian electricity distribution and sale markets, with a market share of 13.1% and 23%, respectively. Its electricity distribution companies serve the interior and coast of the State of São Paulo and the North and Northeast Regions of the State of Rio Grande do Sul.

The main consolidated results of the company in 2Q07, compared to the prior year, were as follows:

• Gross revenue of R$3.409,6 million (+16%);

• EBITDA de R$814.1 million (+23.5%);

• Net income of R$369.4 million (+20.9%). CAPITAL MARKETS

In the first half of 2007, the performance of Bradespar preferred shares (BRAP4) exceeded IBOVESPA and that of the investees CVRD (VALE3) and CPFL Energia (CPFE3). Considering stock prices already adjusted for earnings, including dividends, BRAP4, VALE3 and CPFE3 shares appreciated 46.9%, 36.4% and 35.7%, respectively, whereas IBOVESPA had a positive variation of 22.3% in the period.

Stock Prices in 1H07

-20%

0%

20%

40%

60%

12/29

/06

01/24

/07

02/19

/07

03/17

/07

04/12

/07

05/08

/07

06/03

/07

06/29

/07

BRAP4: + 46.9%

VALE3: + 36.4%

CPFE3: + 35.7%

IBOVESPA: + 22.3%

Source: Economática

Bradespar S.A.

27

The average daily trade volume of Bradespar preferred shares (BRAP4) has continuously improving, and amounted to R$47.4 million in 1H07, the highest daily average for a six-month period in the Company’s history.

Source: Economática

The market value of the investments held by BRADESPAR, plus net cash, without considering the control premium for the investment in CVRD, was R$13.7 billion at the close of 1H07, of which 85.8% refers to the investment in CVRD, 12.1% refers to the investment in CPFL Energia, and 2.1% refers to cash. The market value of BRADESPAR in relation to the market value of its investees, plus net cash, showed a discount of 6% on the last business day of 1H07.

Number of shares % of total capital

Market value (R$ thousand)

Market value (US$

thousand)

Market value (€ thousand)

CVRD (1) 86.18 136,796,982 5.56% 11,789,164 6,120,426 4,530,112 CPFL-E 38.76 43,049,000 8.97% 1,668,579 866,254 641,169

Total value of Bradespar's assets ( A ) 13,457,743 6,986,680 5,171,281

Net cash of Bradespar ( B ) 286,007 148,483 109,901

Net value of Bradespar's assets ( C ) = ( A ) + ( B ) 13,743,750 7,135,163 5,281,182

Market value of Bradespar ( D ) 12,981,713 6,739,546 4,988,361 Common shares (BRAP3) 76.00 61,332,252 4,661,251 2,419,921 1,791,135 Preferred shares (BRAP4) 73.30 113,512,448 8,320,462 4,319,625 3,197,226

Difference between the net value of assets and the market value of Bradespar ( C ) - ( D ) 762,037 395,617 292,821

DISCOUNT (2) 6%

(1) The number of CVRD shares was calculated based on the ownership interest held through Valepar. (2) ((Market value of Bradespar) / (Value of assets + net cash)) - 1

Companies Share price (R$)

Bradespar's ownership interestNet value of Bradespar's assets X Bradespar's market value (closing prices on June 29, 2007)

47.4

33.931.0

16.1

12.3

8.0

2.71.71.20.91.31.52.6

8.1

2H00 1H01 2H01 1H02 2H02 1H03 2H03 1H04 2H04 1H05 2H05 1H06 2H06 1H07

Average Daily Volumeof BRAP4 Shares Traded in Bovespa

(R$ million)

Bradespar S.A.

28

The discount between the net value of BRADESPAR’s assets and their market value, which at the end of 2006 was 15%, was reduced to 11% at the end of 1Q07 and 6% at the end of 1H07.

15%

13%

9%

10%

9%

10%

11%

12% 12%

10%

7% 7%

6%

12/28/06 01/15/07 01/31/07 02/15/07 02/28/07 03/15/07 03/30/07 04/15/07 04/30/07 05/15/07 05/31/07 06/15/07 06/29/07

SSEERRVVIICCEESS PPRROOVVIIDDEEDD BBYY TTHHEE IINNDDEEPPEENNDDEENNTT AAUUDDIITTOORRSS

In conformity with Instruction No. 381, of January 14, 2003, of the Brazilian Securities Commission (CVM), Bradespar informs that its Independent Auditor, Deloitte Touche Tohmatsu Auditores Independentes, did not provide nonaudit services in the first half of 2007.

In contracting nonaudit services, Bradespar follows the auditor independence regulations and international principles, adopting procedures that include the following: (a) auditors should not audit their own audit work, (b) auditors should not function as client management, and (c) auditors should not act as advocates for their audit clients. Additionally, in the event of contracting other services, the scope and procedures of said services are discussed with the independent auditors, so as not to impair the established independence rules.

FFIISSCCAALL CCOOUUNNCCIILL’’SS RREEPPOORRTT

The undersigned members of the Fiscal Council of Bradespar S.A., in accordance with the duties and responsibilities assigned to them by law and bylaws, have examined the Management Report and the Financial Statements for the six-month period ended June 30, 2007, and, based on the report issued by Deloitte Touche Tohmatsu Auditores Independentes, are of the opinion that said documents, examined in light of the prevailing Brazilian corporate law, reflect fairly the financial position of the Company and recommend that they be approved by the Annual Shareholders’ Meeting.

São Paulo, August 13, 2007

Antonio José da Barbara Osmar Roncolato Pinho Manuel Maria Pulido Garcia Ferrão de Sousa

Bradespar S.A.

29

16. FURTHER RELEVANT INFORMATION

16.1. PRESENTATION OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

a) Consolidated Holding

We present below the consolidated balance sheet, consolidated statement of income and consolidated statement of cash flows for the periods ended June 30 and March 31, 2007 and June 30, 2006 of Bradespar S.A. and its subsidiaries and jointly-owned subsidiaries Valepar, CVRD, Antares, Brumado, Millennium and VBC, the latter was consolidated until November 21, 2006 (see note 7.d) - item (2)), and the result was recorded through that date. The summary of the balance sheet and statement of income of the jointly-owned subsidiaries in the consolidated and the ownership interest percentages are stated in note 15.1.

Bradespar consolidated balance sheets (In thousands of Brazilian reais (R$))

ASSETS 06/30/2007 03/31/2007 06/30/2006LIABILITIES AND SHAREHOLDERS’ EQUITY 06/30/2007 03/31/2006 06/30/2006

CURRENT ASSETS 1,519,060 1,755,842 1,616,125 CURRENT LIABILITIES 686,031 833,651 956,208Cash and cash equivalents 493,638 734,869 674,760 Payroll and related charges 52,880 43,175 24,049Securities - - 5,372 Taxes payable 153,903 100,755 107,436Trade accounts receivable 461,234 463,536 509,662 Trade accounts payable 225,513 288,572 212,201Allowance for doubtful accounts - - (8,898) Accrued interest on capital

and dividends

8,744

58,727 6,831Inventories 385,689 387,145 188,188 Loans and financing 121,302 235,211 277,591Recoverable taxes 60,584 59,886 83,927 Debentures - 153,264Tax credits 64,232 51,162 28,657 Other 123,689 107,211 174,836Other 53,683 59,244 134,457 NONCURRENT LIABILITIES 3,477,146 3,488,209 2,117,133NONCURRENT ASSETS 6,622,574 6,248,215 4,642,777 LONG-TERM LIABILITIES 3,474,499 3,488,104 2,116,751LONG-TERM ASSETS 385,444 415,903 750,753 Debentures - - 650,576Securities - - 13,684 Trade accounts payable - - 18,169Trade accounts receivable 120 19 46,783 Reserve for contingencies 224,089 214,817 300,196Loans and financing 13,665 13,621 8,114 Loans and financing 2,053,643 2,580,916 854,201Escrow deposits 61,768 57,077 149,621 Deferred income and social

contribution taxes

510,130

195,285 5,134Recoverable taxes 82,780 86,713 104,580 Other 686,636 497,086 288,475Tax credits 73,073 126,334 227,877 Other 152,521 132,139 200,094 DEFERRED INCOME 2,647 105 382 PERMANENT ASSETS 6,237,130 5,832,312 3,892,024 MINORITY INTEREST 278,571 268,182 133,304Investments 1,322,917 1,304,003 1,199,964 Property/Deferred 4,14,213 4,528,309 2,692,060 SHAREHOLDERS’ EQUITY 3,698,369 3,414,015 3,052,257 Capital 2,500,000 2,500,000 2,045,000 Profit reserve 651,607 651,607 605,091 Retained earnings 546,762 262,408 402,166 TOTAL 8,140,117 8,004,057 6,258,902 TOTAL 8,140,117 8,004,057 6,258,902

Bradespar S.A.

30

Bradespar consolidated statements of income - (In thousands of Brazilian reais (R$))

Quarters Six-month periods 2nd Q/2007 2nd Q/2006 06/30/2007 06/30/2006 NET REVENUE FROM SALES AND SERVICES 1,008,263 824,216 1,928,245 1,534,702 COST OF SALES (419,499) (425,114) (829,789) (815,188) GROSS PROFIT 588,764 399,102 1,098,456 719,514 OPERATING EXPENSES (12,881) (49,763) (116,258) (178,523) Equity in subsidiaries (32,297) 4,223 (31,726) 7,281 Extraordinary equity in subsidiaries - - - 218,201 Proceeds from sale of investments 71,380 - 71,380 100,274 Investment dividend 64,778 - 64,778 - General and administrative expenses (18,660) (45,210) (36,905) (68,365) Goodwill amortization (49,101) (40,068) (92,435) (74,772) Extraordinary goodwill amortization - - - (218,201) Financial income (expenses), net 6,313 (27,246) 3,078 (56,115) Other operating expenses (55,294) 58,538 (94,428) 13,448 INCOME FROM OPERATIONS 575,883 349,339 982,198 540,991

NONOPERATING EXPENSES - (271) - (466) INCOME BEFORE TAXES ON INCOME AND MINORITY INTEREST 575,883 349,068

982,198

540,525

Income and social contribution taxes (181,929) (53,833) (300,413) (111,274) Minority interest in subsidiaries (24,668) (13,206) (50,091) (27,085) NET INCOME 369,286 282,029 631,694 402,166

Bradespar S.A.

31

b) Cash flows

Statements of cash flows Bradespar Consolidated

(In thousands of Brazilian reais (R$)) Quarters Six-month periods 2nd Q/07 2nd Q/06 06/30/2007 06/30/2006 OPERATING ACTIVITIES Net income 369,286 282,029 631,694 402,166 Adjustments to reconcile net income to net cash provided by

operating activities: Proceeds from barter/sale of investments and property,

plant and equipment (71,380) (95,805) (71,380) (95,843)Current/deferred income and social contribution taxes 181,929 53,833 300,413 111,274 Interest, monetary and exchange variations, net (107,836) 27,420 (104,909) 3,480 Goodwill amortization 49,101 40,068 92,435 74,772 Extraordinary goodwill amortization - - - 218,201 Equity in subsidiaries 32,297 (4,223) 31,726 (7,281)Extraordinary equity in subsidiaries - - - (218,201)Dividends received from investment stated at cost (64,778) - (64,778) - Other (134,337) (544) (197,138) (32,006)

Changes in assets and liabilities Decrease in securities - 109,650 - 109,650 Increase (decrease) in other assets (32,698) (31,630) (74,361) (19,621)Purchase of investments (121,312) (51,385) (368,082) (57,691)Barter/sale of investments 73,728 362,630 73,728 365,351 Interest on capital and dividends received 67,352 11,295 67,352 11,370 Change in minority interest 24,668 13,206 50,091 27,085 Increase (decrease) in other payables 170,016 (5,863) 54,198 (108,735)Net cash provided by (used in) operating activities 436,036 710,681 420,989 783,971 INVESTING ACTIVITIES Acquisition of property, plant and equipment and deferred

charges (191,423) (165,459) (329,528) (279,709)Sale of property, plant and equipment and deferred charges - 226 - 422 Net cash used in investing activities (191,423) (165,233) (329,528) (279,287) FINANCING ACTIVITIES Loans, financing and issuance of securities (323,786) (272,518) (243,509) (127,417)Interest on capital and dividends paid (132,574) (108,855) (239,115) (111,987)Other (29,484) (25,092) (36,357) (31,735)Net cash used in financing activities (485,844) (406,465) (518,981) (271,139) (DECREASE) INCREASE IN CASH AND CASH

EQUIVALENTS (241,231) 138,983 (427,520) 233,545 CHANGES IN CASH AND CASH EQUIVALENTS, NET At beginning of period 734,869 535,777 921,158 441,215 At end of period 493,638 674,760 493,638 674,760 (DECREASE) INCREASE IN CASH AND CASH

EQUIVALENTS (241,231) 138,983 (427,520) 233,545

Bradespar S.A.

32

16.2. CORPORATE GOVERNANCE (NEW MARKET) (“NOVO MERCADO”) - LEVEL 1

According to the Differentiated Corporate Governance Practices Regulation, we present below supplemental information on the Company.

SHAREHOLDING POSITION OF HOLDERS OF MORE THAN 5% OF EACH CATEGORY AND CLASS OF SHARES OF THE COMPANY, UP TO THE INDIVIDUAL LEVEL

Company: BRADESPAR S.A.

Position as of 06/29/2007

(In [units] shares) Shareholder Common shares Preferred shares Total

Number % Number % Number % Cidade de Deus - Cia.

Comercial de Participações 22,441,612 36.5902 150,480 0.1326 22,592,092 12.9212 Hedging Griffo (Fundos) 3,161,990 5.1555 8,816,134 7.7667 11,978,124 6.8507 Fundação Bradesco 9,089,652 14.8203 1,449,492 1.2769 10p,539,144 6.0277 NCF Participações S.A 8,573,756 13.9792 - - 8,573,756 4.9036 BlackRock, Inc. (Fundos) - - 6,270,600 5.5242 6,270,600 3.5863 Fundo Pensões do Banco

Espírito Santo 5,950,000 9.7013 - - 5,950,000 3.4031 Ações em tesouraria - - - - - - Other shareholders 12,115,242 19.7535 96,825,742 85.2997 108,940,984 62.3073 Total 61,332,252 100.00 113,512,448 100.00 174,844,700 100.00

DISTRIBUTION OF CAPITAL OF THE LEGAL ENTITY (COMPANY’S SHAREHOLDER) UP TO THE

INDIVIDUAL LEVEL Name: CIDADE DE DEUS - CIA. COMERCIAL DE PARTICIPAÇÕES


(In [thousand] shares)

Shareholder Common shares Preferred shares Total Number % Number % Number % Nova Cidade de Deus Participações S.A. 2,574,939,991 44.7760 - - 2,574,939,991 44.7760Fundação Bradesco 1,903,839,616 33.1061 - - 1,903,839,616 33.1061Lina Maria Aguiar 488,038,330 8.4866 - - 488,038,330 8.4866Lia Maria Aguiar 417,744,408 7.2642 - - 417,744,408 7.2642Other shareholders 366,156,434 6.3671 - - 366,156,434 6.3671Total 5,750,718,779 100.00 - - 5,750,718,779 100.00


INDIVIDUAL LEVEL Name: CIDADE DE DEUS - CIA. COMERCIAL DE PARTICIPAÇÕES


(In [thousand] shares)

Shareholder Common shares Preferred shares Total Number % Number % Number % Fundação Bradesco 101,082,737 46.3016 231,332,928 98.3481 332,415,665 73.2949Elo Participações e Investimentos

S.A. 117,230,771 53.6984 - - 117,230,771 25.8484Caixa Beneficente dos

Funcionários do Bradesco - - 3,885,487 1.6519 3,885,487 0.8567Total 218,313,508 100.00 235,218,415 100.00 453,531,923 100.00

Bradespar S.A.

33


INDIVIDUAL LEVEL Name: NCF PARTICIPAÇÕES S.A.


(In [thousand] shares) Shareholder Common shares Preferred shares Total

Number % Number % Number % Fundação Bradesco 14,331,333 25.1040 50,828,750 100.0000 65,160,083 60.3800Cidade de Deus - Cia. Comercial de

Participações 41,979,583 73.5350 - - 41,979,583 38.9000Nova Cidade de Deus Participações

S.A. 777,000 1.3610 - - 777,000 0.7200Total 57,087,916 100.00 50,828,750 100.00 107,916,666 100.00


INDIVIDUAL LEVEL Name: ELO PARTICIPAÇÕES E INVESTIMENTOS S.A.


(In [thousand] shares) Shareholder Common shares Preferred shares Total

Number % Number % Number % Lázaro de Mello Brandão 9,188,513 5.9249 - - 9,188,513 4.1215Other shareholders 145,894,884 94.0751 67,859,087 100.0000 213,753,971 95.8785Total 155,083,397 100.00 67,859,087 100.00 222,942,484 100.00

CONSOLIDATED SHAREHOLDING POSITION OF CONTROLLING SHAREHOLDERS AND

MANAGEMENT AND OUTSTANDING SHARES Position on 06/29/2007

Shareholder

Number of common shares (in units) %

Number of preferred shares (in units) %

Total number of shares

(in units) % Controlling shareholder 40,923,524 66.7243 2,004,988 1.7663 42,928,512 24.5524 Management:

Board of Directors 411,420 0.6708 600,732 0.5292 1,012,152 0.5789 Directors 4 - 828 0.0007 832 0.0005

Fiscal Council 840 0.0014 5,516 0.0049 6,356 0.0036 Treasury shares - - - - - - Other shareholders 19,996,464 32.6035 110,900,384 97.6989 130,896,848 74.8646 Total 61,332,252 100.00 113,512,448 100.00 174,844,700 100.00 Outstanding shares 19,997,304 32.6049 110,905,900 97.7037 130,903,204 74.8683

Bradespar S.A.

34

CONSOLIDATED SHAREHOLDING POSITION OF CONTROLLING SHAREHOLDERS AND MANAGEMENT AND OUTSTANDING SHARES

Position as of 06/30/2006 (12 months ago)

Shareholder

Number of common shares (in units) %

Number of preferred shares (in units) %

Total number of shares

(in units) % Controlling shareholder 20,461,762 66.7243 1,002,494 1.7663 21,464,256 24.5524 Management:

Board of Directors 205,710 0.6708 302,366 0.5327 508,076 0.5812 Directors 2 - 1,054 0.0019 1,056 0.0012

Fiscal Council 420 0.0014 2,758 0.0049 3,178 0.0036 Treasury shares - - - - - - Other shareholders 9,998,232 32.6035 55,447,552 97.6942 65,445,784 74.8616 Total 30,666,126 100.00 56,756,224 100.00 87,422,350 100.00 Outstanding shares 9,998,652 32.6049 55,450,310 97.6991 65,448,962 74.8653

* * * * * RB0549*.*

Documents

Bradespar S.A. · On December 15, 2006, ... Votorantim Energia Ltda. and Camargo Corrêa Energia S.A., pursuant to Significant Event Notice published in the media,