Dividend Distribution Policy

Pursuant to the Brazilian Corporate Law, the mandatory minimum dividend was established in paragraph 2 of article 24 of our Bylaws, in the amount of 25% of the net income adjusted by law.

In any circumstances, the shareholders shall be entitled to receive, in each fiscal year, as dividends, the mandatory minimum percentage of 25% of the net income to be adjusted as follows:

i) the addition of the amounts resulting from the reversal, in the fiscal year, of contingency reserves, previously created;

ii) the decrease in the amounts intended, in the fiscal year, for creation of legal reserves and contingency reserves;

iii) whenever the mandatory minimum dividend amount exceeds the realized portion of the net income of the fiscal year, the management may propose and the Extraordinary General Meeting approve, the allocation of the exceeding amount to create a unrealizable profit reserve (pursuant to article 197 of Law 6,404/76, with wording of Law 10,303/01).

At the Board of Directors’ discretion, the Company may prepare financial statements, on a half-yearly, quarterly and interim basis, with due regard for legal provisions (pursuant to article 24 of the Bylaws). In addition, the Board of Directors may, as per article 11, item VIII of the Bylaws and after consulting the Fiscal Council, if the latter is under operation, state, during the fiscal year and until the holding of the Extraordinary General Meeting, interim dividends, including as partial or total anticipation of the mandatory minimum dividend, to the earned income account ascertained in half-yearly, quarterly or interim balance sheets or retained earnings or reserve of profits ascertained in the last balance sheet, as well as resolve on the approval and payment of interest on own capital.

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