PROPOSALS OF THE BOARD OF DIRECTORS

WITH RESPECT TO THE ISSUES TO BE CONSIDERED AT THE MEETING.

In compliance with Section 71 (included by Decree No. 677/01) of Law 17,811 that provides that 20 days before any Shareholders’ Meeting, the Board of Directors must make available to the shareholders any material information related to the Meeting “and the Board of Directors’ proposals” , the Board of Directors makes available such proposals, as it may consider advisable on the issues to be considered at the Meeting.

In respect of the proposals to be submitted to the meeting on: (i) Board of Directors’ fees for fiscal year 2004; (ii) appointment of Independent Auditors to review the financial statements for fiscal year 2005; and (iii) fees for auditing services payable to Independent Auditors of the financial statements for fiscal year 2004, the prior approval by the Audit Committee has been obtained in all cases. Furthermore, the Audit Committee made an estimate of the funds it shall need to perform its duties during fiscal year 2005 in order to request the budget approval at the Meeting. Directors and Members of the Surveillance Committee received in advance a copy of the Audit Committee’s opinion on the proposals submitted to consideration.

The Board of Directors has unanimously resolved to submit to the shareholders the following proposals concerning the issues to be discussed at the General Ordinary Meeting called for April 27, 2005:

First item : The Board proposes the appointment of the two shareholders (or shareholders’ representatives) who registered the largest number of shares to participate at the Meeting.

Second item : The Board proposes the approval of the documents of fiscal year ended on December 31, 2004 (Annual Report, Summary Information, Report under section 68 of the Listing Regulation of the Bolsa de Comercio de Buenos Aires, Financial Statements with all Schedules, Notes and Exhibits thereto, Report of Surveillance Committee, annual report of the Audit Committee, and all other documents of the fiscal year, including documents in English required by the Securities & Exchange Commission), as submitted by the Board of Directors, the Surveillance Committee, and the Audit Committee.

Third item : The Board of Directors considers that the application of section 206 of the Companies Law to the Company could be temporary, since upon completion of the Company debt restructuring which is scheduled for this fiscal year, a significant accounting earnings will be reported allowing reduction of a material portion of the cumulated loss. Therefore, the Board of Directors submits the following proposals to the Meeting:

a) That the transfer to the new fiscal year of all negative retained earnings as at December 31, 2004 be approved and the decision to apply section 206 of the LSC to the Company be postponed until completion of the debt restructuring process; and

(b) That if in the meantime no new decree is issued to stay the application of section 206 of the LSC, the Board of Directors should call a shareholders’ meeting to consider such issue after the approval of the first financial statements reporting the earnings derived from the debt restructuring of the Company.

Fourth item : The Meeting shall review the performance of the members of the Board of Directors and of the Surveillance Committee acting during fiscal year ended December 31, 2004.

Fifth item : An aggregate compensation of $ 1,670,000.- is proposed to be assigned to the Board of Directors acting during fiscal year 2004 to be distributed among independent directors in the manner decided by the Board of Directors. In the opinion of the Audit Committee, this proposal and the one included in the following item are reasonable.

Sixth item: It is proposed that the Meeting authorize the Board of Directors to make advance payments up to a global aggregate amount of $ 1,800,000.- to those directors acting as “independent directors” or performing technical and administrative tasks or special assignments during fiscal year ending on December 31, 2005 and to increase such amount in the event of inflation.

Seventh item : An aggregate compensation of $ 170,000.- is proposed to be distributed among regular members of the Surveillance Committee in such manner as they may agree.

Eighth item : It is proposed to set the number of regular directors to six (6) and the number of alternate directors to six (6) to act during fiscal year ending December 31, 2005.

Ninth and Tenth items : The Board of Directors abstains from submitting a proposal in respect of these items and reminds the shareholders who propose candidates to serve on the Board of Directors and the Surveillance Committee of the requirement to inform the Meeting if the candidates are “independent” or “non-independent”. Furthermore, the Board of Directors reminds the shareholders that, of the total number of directors to be designated, at least three must be “independent” (under both CNV Regulation and the Rule 10 A-3 of the Securities & Exchange Commission), to take part in the Audit Committee, which as from July 31, 2005 must be exclusively composed of “independent directors” according to the Regulation of the Securities & Exchange Commission.

Eleventh item: The Board of Directors proposes that the accounting firm “Price Waterhouse&Co. S.R.L.”, which acted as Independent Auditors during fiscal year 2004, should be appointed for the same position for the fiscal year ending on December 31, 2005. It also proposes that its compensation be fixed at the Meeting reviewing the documents of the fiscal year ending on December 31, 2005, and delegates to the Audit Committee the powers to determine how the service will be rendered and to make advance payments of fees. In respect of compensation for financial statement auditing services rendered by the Independent Auditors during fiscal year ended December 31, 2004, it is proposed that total compensation be set at $ 650,000.- (without VAT).

Twelfth item : In accordance with the estimate made by the Audit Committee, the Board of Directors proposes that the budget for the operation of the Audit Committee during fiscal year ending December 31, 2005 be set at $ 600,000.