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Corporate Governance  Corporate By-Laws
Chapter I - of The Name, Headquarters, Object and Term of The Corporation.
ARTICLE 1 - MAHLE METAL LEVE S.A. has its headquarters and jurisdiction at Avenida Ernst Mahle, 2.000, in the City of Mogi Guaçu, State of São Paulo. (AGE 04.24.2002)
SOLE PARAGRAPH - The Board of Administration shall deliberate on the opening and closing of branches, agencies, plants or offices, anywhere within the country or abroad.
ARTICLE 2 – The object of the corporation shall be the manufacturing, sale, distribution, importation and exportation of parts and accessories for the manufacturing and assembly of engines and automotive vehicles, internally produced or manufactured by third parties; of special machinery, tools, devices, instruments and measuring and precision apparatus; equipment and machines in general; metal, ferrous and non-ferrous and alloy artifacts and related articles; of application software for the development of metallurgic processes; as well as the rendering of services inherent to its activities. The company may also participate in the shareholding capital of other societies or companies, including as holding or affiliate.
ARTICLE 3- The Company shall endure for undetermined time.
Chapter II - of The Corporate Capital and Shares
ARTICLE 4 – The Corporate capital is BRL 352,754,684.00 (three hundred fifty-two million, seven hundred fifty-four thousand, six hundred eighty-four reais), fully paid up, represented by 30,453,570 (thirty million, four hundred fifty-three thousand, five hundred seventy) with no face value, being 12,260,373 (twelve million, two hundred sixty thousand, three hundred seventy-three) ordinary shares and 18,193,197 (eighteen million, one hundred ninety-three thousand, one hundred ninety-seven) preferred shares . (EGM [Extraordinary General Meeting] 08.19.2005)
PARAGRAPH ONE – The Company may acquire its proprietary shares for the purpose of canceling or holding them in treasury to be traded later on, always upon authorization by the Board of Administration.
PARAGRAPH TWO – The Society is authorized to increase its Corporate capital, by issuing ordinary and/or preferred shares, regardless of amendment to its by-laws, up to the limit of 10,000,000,000 shares, upon deliberation of the Board of Administration, which shall determine the class of shares to be issued, respecting the issuing price and placement conditions.
ARTICLE 5 – The shares, in any of their classes, shall be nominative, with or without the issuance of certificates, or book-entry ones, at the Board of Administration’s discretion. If book-entry shares, they should be held in deposit accounts held by their owners, in the accredited financial institution authorized and appointed by the Board of Administration.
SOLE PARAGRAPH – The depositary financial institution may charge the shareholder for fees corresponding to the transfer of title of the book-entry shares, observing the maximum limits set by the Securities and Exchange Commission [Comissão de Valores Mobiliários].
ARTICLE 6 – Observing the provisions under article 7 herein, the preferred shares shall have priority for capital redemption, without premium, being these shares also ensured the right to dividend distributions in amounts exceeding at least 10% (ten per cent), of those granted to ordinary shares.
PARAGRAPH ONE – The company may, at any time, in view of capital increase upon subscription of shares, issue preferred shares without voting right, being not necessary to observe any proportion in relation to the existing ones, up to the limit set under the law.
PARAGRAPH TWO - The Board of Administration may, under the provisions of article 172 of Law 6,404/76, exclude the right of preference in the placement of shares, the debentures convertible into shares or subscription bonus, which placement is made upon trading in the stock exchange, public subscription or share exchange in public offerings for acquisition of shareholding control, under the terms of articles 257 to 263 of the referred to Law 6,404/76.
ARTICLE 7 - To the group of shareholders, owners of shares of any class, it shall always be granted, in each fiscal year, a dividend not lower than 25% (twenty-five per cent) of the net profit, respecting the provisions under article 6 "in fine" of the present by-laws, after deducted or added of the amounts foreseen in the "caput" of article 202 of Law 6,404/76.
SOLE PARAGRAPH – The amount of dividends paid or credited as interest on own capital, under the terms of article 9, paragraph 7 of Law 9,249/95 and pertinent legislation and regulations, may be charged to the amount of mandatory dividend and statutory dividend of preferred shares, being part of such sum, the total amount of dividends distributed by the Company, for all legal effects. (EGM 04.24.2002)
ARTICLE 8 – To each ordinary share shall correspond one vote in the deliberations of the General Meeting.
ARTICLE 9 – The preferred shares shall not have the right to vote in the General Meetings. However, they shall acquire such right; in the event that, for 03 (three) consecutive fiscal years, they are not granted the minimum dividend provided for under article 6.
ARTICLE 10 – The share certificates, if issued, shall be signed by two Directors or by one Director altogether with proxy holder, or by two proxy holders with special powers, or authenticated by mechanical sealing.
ARTlCLE 11 - The Company may issue multiple certificates of shares and, temporarily, vouchers representing such shares. The replacement and splitting of such certificate, upon shareholders request, shall be carried out within 15 (fifteen) days and shall imply payment of the corresponding cost.
ARTICLE 12 – The new shares resulting from capital increase, shall be distributed to shareholders within a maximum of 60 (sixty) days from the date of publication of the respective minutes.
Chapter III - of The General Meeting
ARTICLE 13 – The General Meetings, either Ordinary or Extraordinary, shall be called by the Board of Administration.
ARTlCLE 14 – The General Meeeting shall be presided by the Chairman of the Board of Administration, who shall appoint another shareholder to act as secretary.
Chapter IV - of The Corporate Administration
Section 1: Administrative Boards
ARTICLE 15 – The managing boards of the Company are the Board of Administration and the Board of Directors.
Section 2: Board of Administration
ARTlCLE 16 - The Board of Administration shall comprise at least 3 (three) a maximum of 8 (eight) full members and up to an equal number of substitutes, all of which shareholders, elected by the General Meeting for a 01 (one) year term, and can be re-elected.
PARAGRAPH ONE – In the same General Meeting which elects him, each Member of the Board can appoint his substitute who, if elected, shall substitute him in his impediments or occasional absences and who, in case of vacancy, shall complete his mandate.
PARAGRAPH TWO - The Board of Administration, once its full members take office, shall appoint, among them, its Chairman.
ARTlCLE 17 – In case there occurs an opening in the Board of Administration, relative to a Member who does not have a substitute to replace him, the General Meeting shall be called within 30 (thirty) days to elect the substitute to complete the mandate of the Member replaced.
SOLE PARAGRAPH – In case of temporary leave or temporary impediment of the Chairman, this shall be replaced by another Member of the Board, chosen by his peers.
ARTICLE 18 – In addition to the other attributions applicable deriving from its express legal mandate or from the provisions under the present By-laws, it shall be under the Board of Administration’s responsibility:
| I. |
To set the Company’s general business guidelines; |
| II. |
Respecting the provisions under article 21 herein, to elect and dismiss Company Directors and set their attributions; |
| III. |
To supervise the Directors’ management, to examine at any time Company books and papers, to request information on contracts executed, or about to be executed and any other acts; |
| IV. |
To summon the Ordinary and Extraordinary General Meetings; |
| V. |
To express his opinion on the management report and on the Board of Directors’ accounts; |
| VI. |
To authorize the acquisition and/or sale of shares issued by the Company; |
| VII. |
To previously manifest on: |
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a. |
the contract of foreign currency debts, except those resulting from the importation of items for current assets; |
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b. |
the acquisition of real estate; |
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c. |
the acquisition or assignment of real estate or use of trademarks and patents, the execution of contracts for the acquisition or supply of industrial technology; |
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d. |
foreign supply contracts, which terms exceed one year; |
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| VIII. |
authorize the sale of properties, constitution of actual burdening on permanent asset items and the rendering of guarantees to third party obligations, whenever this is of interest to the Company, and the obligations of affiliates or controlled societies; |
| IX. |
to select and dismiss independent auditors; |
| X. |
to approve the annual budget and investments proposed by the Board of Directors; |
| XI. |
to deliberate on the issue of Promissory Notes and Commercial Papers for public distribution, under the legislation in force; |
| XII. |
the issue, for subscription, of shares and subscription bonus, within the authorized limit of capital; |
| XIII. |
establishment of American Depositary Receipts (ADRs) programs; |
ARTICLE 19 - The Board of Administration meetings shall be ordinary or extraordinary, being installed with the presence of at least 05 (five) Members of the Board, if the Board comprises 08 (eight) members, of 04 (four) if the Board comprises 07 (seven) or 06 (six) members, of 03 (three), if the Board comprises 05 (five) or 04 (four)members and of 02 (two), if the Board comprises 03 (three) members.
PARAGRAPH ONE - The Board of Administration shall deliberate by absolute majority of votes by the Members present.
PARAGRAPH TWO - The Board of Administration shall elaborate the internal regulations that shall govern its operation and provide for the periodicity of the ordinary meetings.
PARAGRAPH THREE – The extraordinary meetings shall be called by any of the Board members, upon written notice to the other members, within at least 72 (seventy-two) hours in advance.
PARAGRAPH FOUR – The meetings shall be presided by the Chairman of the Board who, besides his own vote, shall have the casting vote.
ARTICLE 20 – The General Meeting shall fix the global remuneration for the members of the Board of Administration, to be shared among them by deliberation of the Board, itself, without prejudice to their share in the Company’s net profit, as provided for under 30.II. (b) herein.
Section 3 – Board of Directors
ARTICLE 21 - The Board of Directors shall comprise at least 02 (two) and a maximum of 09 (nine) Executive Directors, either shareholders or not, elected by the Board of Administration for a 01 (one) year mandate, re-election being admitted.
ARTICLE 22 - The Board of Administration shall set the attributions of the Directors, being allowed to change them at any time.
ARTICLE 23 – Company representation in court, actively or passively, shall be the responsibility of the Director so assigned by the Board of Administration. Except for the provisions under article 26, the representation of the Company shall take place by means of two Directors, of one Director and a proxy holder or of two proxy holders. The Board of Administration shall determine that the Company be represented by one Director previously assigned for each specific case.
ARTICLE 24 – Respecting the provisions under article 26, it shall be the responsibility of each Director the practice of the acts required for the regular operation of the Company, observing the attributions assigned to each of them by the Board of Administration.
ARTICLE 25 – In case of temporary impediment or leave of any Director, the Board of Administration shall appoint a substitute to perform his functions during the period of temporary impediment or leave. In case of vacancy, the Board of Administration shall elect a substitute to complete the term of mandate of the replaced member.
ARTICLE 26 – The validity of the acts of alienation or burdening of permanent assets, acquisition of property, and offering of guarantees to third party debts shall depend upon the joint signature of two Directors, or one Director and one proxy holder, or two proxy holders.
PARAGRAPH ONE – Company proxy holders shall always be appointed for specific purposes and for determined term, except in case of "ad judicia" powers or to defend corporate interests in administrative proceedings. The referred to appointment shall be carried out jointly, by two Directors.
PARAGRAPH TWO – The Board of Directors is forbidden to offer guarantees to third party obligations on behalf of the Company, except when this is duly authorized by the Board of Administration (article 18, VIII herein).
ARTICLE 27 – The General Meeting shall fix the global remuneration for the members of the Board of Directors, to be shared among them by deliberation of the Board of Administration, without prejudice to their eventual participation in the Company’s net profit, as provided for under 30.II. (b) herein.
Chapter V - of The Fiscal Board
ARTICLE 28 – The Fiscal Board shall comprise up to 05 (five) members and up to 05 (five) substitutes, either shareholders or not, elected by the Ordinary General Meeting.
PARAGRAPH ONE – The General Meeting that elects the members of the Fiscal Board shall fix their remuneration, observing the provisions under law.
PARAGRAPH TWO – The Fiscal Board shall not have an ongoing operation and shall be installed by the General Meeting, at shareholders request, under the law.
Chapter VI - of The Fiscal Year and Distribution of Profits
ARTICLE 29 – The fiscal year shall be closed on December 31, each year.
ARTICLE 30 – At the closing of the fiscal year, the financial statements required under the law shall be elaborated, observing the following rules pursuant to the distribution of the results earned: :
| I. |
The accumulated losses and the provision for income tax shall be deducted from the fiscal year result, before any participation. |
| II. |
With basis on the remaining profits and respecting legal provisions, the following shall be calculated, observing this order: |
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a. |
global employee profit sharing, being the Board of Directors responsible for appointing which employees shall receive the profit sharing and the amount to be granted to each of them; |
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b. |
global administrators’ profit sharing, to be divided among them upon deliberation of the Board of Administration, observing the provisions under article 152, paragraph one, of Law 6404/76; |
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| III. |
The net profit earned shall be distributed observing the following order: |
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a. |
5% (five per cent) for constitution of the legal reserve, up to 20% (twenty per cent) of the corporate capital; |
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b. |
constitution of other reserves, as foreseen under the law, and |
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c. |
distribution of dividends to shareholders, under the provisions of articles 6 and 7 herein. |
PARAGRAPH ONE – In addition to the dividends distributed on account of profits earned, in each half-yearly balance sheet, the Board of Administration shall, equally distribute interim dividends on account of accumulated profits or profit reserves existing in the last half-yearly balance sheet, as well as to determine the elaboration of a quarterly balance sheet and the consequent distribution of dividends, respecting, in this last hypothesis, the provisions under article 204, paragraph 1, of Law 6,404/76.
PARAGRAPH TWO – The amount of dividends shall be made available to shareholders within a maximum of 60 (sixty) days from the date when they are distributed and, in any hypothesis, within the current fiscal year.
Corporate By-Laws Complet / Print Version
CHAPTER I
OF THE NAME, HEADQUARTERS, OBJECT AND TERM OF THE CORPORATION
ARTICLE 1 - MAHLE METAL LEVE S.A. has its headquarters and jurisdiction at Avenida Ernst Mahle, 2.000, in the City of Mogi Guaçu, State of São Paulo. (AGE 04.24.2002)
SOLE PARAGRAPH - The Board of Administration shall deliberate on the opening and closing of branches, agencies, plants or offices, anywhere within the country or abroad.
ARTICLE 2 – The object of the corporation shall be the manufacturing, sale, distribution, importation and exportation of parts and accessories for the manufacturing and assembly of engines and automotive vehicles, internally produced or manufactured by third parties; of special machinery, tools, devices, instruments and measuring and precision apparatus; equipment and machines in general; metal, ferrous and non-ferrous and alloy artifacts and related articles; of application software for the development of metallurgic processes; as well as the rendering of services inherent to its activities. The company may also participate in the shareholding capital of other societies or companies, including as holding or affiliate.
ARTICLE 3 - The Company shall endure for undetermined time.
CHAPTER II
OF THE CORPORATE CAPITAL AND SHARES
ARTICLE 4 – The Corporate capital is BRL 352,754,684.00 (three hundred fifty-two million, seven hundred fifty-four thousand, six hundred eighty-four reais), fully paid up, represented by 30,453,570 (thirty million, four hundred fifty-three thousand, five hundred seventy) with no face value, being 12,260,373 (twelve million, two hundred sixty thousand, three hundred seventy-three) ordinary shares and 18,193,197 (eighteen million, one hundred ninety-three thousand, one hundred ninety-seven) preferred shares . (EGM [Extraordinary General Meeting] 08.19.2005)
PARAGRAPH ONE – The Company may acquire its proprietary shares for the purpose of canceling or holding them in treasury to be traded later on, always upon authorization by the Board of Administration.
PARAGRAPH TWO – The Society is authorized to increase its Corporate capital, by issuing ordinary and/or preferred shares, regardless of amendment to its by-laws, up to the limit of 10,000,000,000 shares, upon deliberation of the Board of Administration, which shall determine the class of shares to be issued, respecting the issuing price and placement conditions.
ARTICLE 5 – The shares, in any of their classes, shall be nominative, with or without the issuance of certificates, or book-entry ones, at the Board of Administration’s discretion. If book-entry shares, they should be held in deposit accounts held by their owners, in the accredited financial institution authorized and appointed by the Board of Administration.
SOLE PARAGRAPH – The depositary financial institution may charge the shareholder for fees corresponding to the transfer of title of the book-entry shares, observing the maximum limits set by the Securities and Exchange Commission [Comissão de Valores Mobiliários].
ARTICLE 6 – Observing the provisions under article 7 herein, the preferred shares shall have priority for capital redemption, without premium, being these shares also ensured the right to dividend distributions in amounts exceeding at least 10% (ten per cent), of those granted to ordinary shares.
PARAGRAPH ONE – The company may, at any time, in view of capital increase upon subscription of shares, issue preferred shares without voting right, being not necessary to observe any proportion in relation to the existing ones, up to the limit set under the law.
PARAGRAPH TWO - The Board of Administration may, under the provisions of article 172 of Law 6,404/76, exclude the right of preference in the placement of shares, the debentures convertible into shares or subscription bonus, which placement is made upon trading in the stock exchange, public subscription or share exchange in public offerings for acquisition of shareholding control, under the terms of articles 257 to 263 of the referred to Law 6,404/76.
ARTICLE 7 - To the group of shareholders, owners of shares of any class, it shall always be granted, in each fiscal year, a dividend not lower than 25% (twenty-five per cent) of the net profit, respecting the provisions under article 6 "in fine" of the present by-laws, after deducted or added of the amounts foreseen in the "caput" of article 202 of Law 6,404/76.
SOLE PARAGRAPH – The amount of dividends paid or credited as interest on own capital, under the terms of article 9, paragraph 7 of Law 9,249/95 and pertinent legislation and regulations, may be charged to the amount of mandatory dividend and statutory dividend of preferred shares, being part of such sum, the total amount of dividends distributed by the Company, for all legal effects. (EGM 04.24.2002)
ARTICLE 8 – To each ordinary share shall correspond one vote in the deliberations of the General Meeting.
ARTICLE 9 – The preferred shares shall not have the right to vote in the General Meetings. However, they shall acquire such right; in the event that, for 03 (three) consecutive fiscal years, they are not granted the minimum dividend provided for under article 6.
ARTICLE 10 – The share certificates, if issued, shall be signed by two Directors or by one Director altogether with proxy holder, or by two proxy holders with special powers, or authenticated by mechanical sealing.
ARTlCLE 11 - The Company may issue multiple certificates of shares and, temporarily, vouchers representing such shares. The replacement and splitting of such certificate, upon shareholders request, shall be carried out within 15 (fifteen) days and shall imply payment of the corresponding cost.
ARTICLE 12 – The new shares resulting from capital increase, shall be distributed to shareholders within a maximum of 60 (sixty) days from the date of publication of the respective minutes.
CHAPTER III
OF THE GENERAL MEETING
ARTICLE 13 – The General Meetings, either Ordinary or Extraordinary, shall be called by the Board of Administration.
ARTlCLE 14 – The General Meeeting shall be presided by the Chairman of the Board of Administration, who shall appoint another shareholder to act as secretary.
CHAPTER IV
OF THE CORPORATE ADMINISTRATION
Section 1: Administrative Boards
ARTICLE 15 – The managing boards of the Company are the Board of Administration and the Board of Directors.
Section 2: Board of Administration
ARTlCLE 16 - The Board of Administration shall comprise at least 3 (three) a maximum of 8 (eight) full members and up to an equal number of substitutes, all of which shareholders, elected by the General Meeting for a 01 (one) year term, and can be re-elected.
PARAGRAPH ONE – In the same General Meeting which elects him, each Member of the Board can appoint his substitute who, if elected, shall substitute him in his impediments or occasional absences and who, in case of vacancy, shall complete his mandate.
PARAGRAPH TWO - The Board of Administration, once its full members take office, shall appoint, among them, its Chairman.
ARTlCLE 17 – In case there occurs an opening in the Board of Administration, relative to a Member who does not have a substitute to replace him, the General Meeting shall be called within 30 (thirty) days to elect the substitute to complete the mandate of the Member replaced.
SOLE PARAGRAPH – In case of temporary leave or temporary impediment of the Chairman, this shall be replaced by another Member of the Board, chosen by his peers.
ARTICLE 18 – In addition to the other attributions applicable deriving from its express legal mandate or from the provisions under the present By-laws, it shall be under the Board of Administration’s responsibility:
- To set the Company’s general business guidelines;
- Respecting the provisions under article 21 herein, to elect and dismiss Company Directors and set their attributions;
- To supervise the Directors’ management, to examine at any time Company books and papers, to request information on contracts executed, or about to be executed and any other acts;
- To summon the Ordinary and Extraordinary General Meetings;
- To express his opinion on the management report and on the Board of Directors’ accounts;
- To authorize the acquisition and/or sale of shares issued by the Company;
- To previously manifest on:
a. the contract of foreign currency debts, except those resulting from the importation of items for current assets;
b. the acquisition of real estate;
c. the acquisition or assignment of real estate or use of trademarks and patents, the execution of contracts for the acquisition or supply of industrial technology;
d. foreign supply contracts, which terms exceed one year;
- authorize the sale of properties, constitution of actual burdening on permanent asset items and the rendering of guarantees to third party obligations, whenever this is of interest to the Company, and the obligations of affiliates or controlled societies;
- to select and dismiss independent auditors;
- to approve the annual budget and investments proposed by the Board of Directors;
- to deliberate on the issue of Promissory Notes and Commercial Papers for public distribution, under the legislation in force;
- the issue, for subscription, of shares and subscription bonus, within the authorized limit of capital;
- establishment of American Depositary Receipts (ADRs) programs;
ARTICLE 19 - The Board of Administration meetings shall be ordinary or extraordinary, being installed with the presence of at least 05 (five) Members of the Board, if the Board comprises 08 (eight) members, of 04 (four) if the Board comprises 07 (seven) or 06 (six) members, of 03 (three), if the Board comprises 05 (five) or 04 (four)members and of 02 (two), if the Board comprises 03 (three) members.
PARAGRAPH ONE - The Board of Administration shall deliberate by absolute majority of votes by the Members present.
PARAGRAPH TWO - The Board of Administration shall elaborate the internal regulations that shall govern its operation and provide for the periodicity of the ordinary meetings.
PARAGRAPH THREE – The extraordinary meetings shall be called by any of the Board members, upon written notice to the other members, within at least 72 (seventy-two) hours in advance.
PARAGRAPH FOUR – The meetings shall be presided by the Chairman of the Board who, besides his own vote, shall have the casting vote.
ARTICLE 20 – The General Meeting shall fix the global remuneration for the members of the Board of Administration, to be shared among them by deliberation of the Board, itself, without prejudice to their share in the Company’s net profit, as provided for under 30.II. (b) herein.
Section 3 – Board of Directors
ARTICLE 21 - The Board of Directors shall comprise at least 02 (two) and a maximum of 09 (nine) Executive Directors, either shareholders or not, elected by the Board of Administration for a 01 (one) year mandate, re-election being admitted.
ARTICLE 22 - The Board of Administration shall set the attributions of the Directors, being allowed to change them at any time.
ARTICLE 23 – Company representation in court, actively or passively, shall be the responsibility of the Director so assigned by the Board of Administration. Except for the provisions under article 26, the representation of the Company shall take place by means of two Directors, of one Director and a proxy holder or of two proxy holders. The Board of Administration shall determine that the Company be represented by one Director previously assigned for each specific case.
ARTICLE 24 – Respecting the provisions under article 26, it shall be the responsibility of each Director the practice of the acts required for the regular operation of the Company, observing the attributions assigned to each of them by the Board of Administration.
ARTICLE 25 – In case of temporary impediment or leave of any Director, the Board of Administration shall appoint a substitute to perform his functions during the period of temporary impediment or leave. In case of vacancy, the Board of Administration shall elect a substitute to complete the term of mandate of the replaced member.
ARTICLE 26 – The validity of the acts of alienation or burdening of permanent assets, acquisition of property, and offering of guarantees to third party debts shall depend upon the joint signature of two Directors, or one Director and one proxy holder, or two proxy holders.
PARAGRAPH ONE – Company proxy holders shall always be appointed for specific purposes and for determined term, except in case of "ad judicia" powers or to defend corporate interests in administrative proceedings. The referred to appointment shall be carried out jointly, by two Directors.
PARAGRAPH TWO – The Board of Directors is forbidden to offer guarantees to third party obligations on behalf of the Company, except when this is duly authorized by the Board of Administration (article 18, VIII herein).
ARTICLE 27 – The General Meeting shall fix the global remuneration for the members of the Board of Directors, to be shared among them by deliberation of the Board of Administration, without prejudice to their eventual participation in the Company’s net profit, as provided for under 30.II. (b) herein.
CHAPTER V
OF THE FISCAL BOARD
ARTICLE 28 – The Fiscal Board shall comprise up to 05 (five) members and up to 05 (five) substitutes, either shareholders or not, elected by the Ordinary General Meeting.
PARAGRAPH ONE – The General Meeting that elects the members of the Fiscal Board shall fix their remuneration, observing the provisions under law.
PARAGRAPH TWO – The Fiscal Board shall not have an ongoing operation and shall be installed by the General Meeting, at shareholders request, under the law.
CHAPTER VI
OF THE FISCAL YEAR AND DISTRIBUTION OF PROFITS
ARTICLE 29 – The fiscal year shall be closed on December 31, each year.
ARTICLE 30 – At the closing of the fiscal year, the financial statements required under the law shall be elaborated, observing the following rules pursuant to the distribution of the results earned:
- – The accumulated losses and the provision for income tax shall be deducted from the fiscal year result, before any participation.
- With basis on the remaining profits and respecting legal provisions, the following shall be calculated, observing this order:
- global employee profit sharing, being the Board of Directors responsible for appointing which employees shall receive the profit sharing and the amount to be granted to each of them;
- global administrators’ profit sharing, to be divided among them upon deliberation of the Board of Administration, observing the provisions under article 152, paragraph one, of Law 6404/76;
- The net profit earned shall be distributed observing the following order:
- 5% (five per cent) for constitution of the legal reserve, up to 20% (twenty per cent) of the corporate capital;
- constitution of other reserves, as foreseen under the law, and
- distribution of dividends to shareholders, under the provisions of articles 6 and 7 herein.
PARAGRAPH ONE – In addition to the dividends distributed on account of profits earned, in each half-yearly balance sheet, the Board of Administration shall, equally distribute interim dividends on account of accumulated profits or profit reserves existing in the last half-yearly balance sheet, as well as to determine the elaboration of a quarterly balance sheet and the consequent distribution of dividends, respecting, in this last hypothesis, the provisions under article 204, paragraph 1, of Law 6,404/76.
PARAGRAPH TWO – The amount of dividends shall be made available to shareholders within a maximum of 60 (sixty) days from the date when they are distributed and, in any hypothesis, within the current fiscal year.
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