REFERENCE FORM (Free translation of FORMULRIO DE REFERNCIA)

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MILLS ESTRUTURAS E SERVIOS DE ENGENHARIA S.A. Publicly Held Company CNPJ n. 27.093.558/0001-15 NIRE 33.3.0028974-7 Avenida das Amricas 500, bloco 14, loja 108 e salas 207 e 208, Barra da Tijuca, CEP 22640-100 Rio de Janeiro - RJ

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January 8, 2013

1.

Declaration of those responsible for the content of the form 1.1 Declaration of the President and Investor Relations Officer Ramon Nunes Vazquez President Director Alessandra Eloy Gadelha Investor Relations Officer

Name of the responsible for the content of the form: Title of the responsible: Name of the responsible for the content of the form: Title of the responsible:

The officers qualified above declare that: a. They reviewed the reference form (Form). b. All information contained in the form meets the requirements of CVM Instruction 480, especially arts. 14 to 19. c. The information contained in the form is true, accurate and complete with respect to the issuers financial situation and the risks inherent in its activities and the securities issued by it.

2.1/2.2 Identification and compensation of Auditors

CVM auditor code: 385-9 Name ofcompany responsible: Deloitte Touche Tomahtsu Auditores Independentes (Deloitte) CPF/auditor CNPJ: 49.928.567/0001-11 Date of hired service: 4/18/2011 Service end date: Name of individual responsible: Antonio Carlos Brando de Souza CPF of individual responsible: 892.965.757/53 Address: Avenida Presidente Wilson, n 231, Rio de Janeiro, RJ, Brasil, CEP 20030-02, Telefone (21) 3981-050, Fax (21) 3981-0600, email: antoniobrandao@deloitte.com Description of contracted service: In the fiscal year ended 2011 the following services were provided by Deloitte: (i) independent audit of the financial statements of Mills Estruturas e Servios de Engenharia S.A. (Company or Mills) for the fiscal year ended 2011, with issuance of the opinion, limited review of quarterly financial statements for the periods ended March31, June 30 and September 30, 2011, with the issuance of the related reports; and (ii) elaboration of the valuation report of GP Andaimes Sul Locadora Ltda. (GP Sul) for purposes of its merger by the Company. Deloitte did not provide any services to the company in 2009 and 2010. Total amount of remuneration of auditors separated by offered services: For the services described above, Deloitte received in 2011 the following values: (i) audit services and limited review of financial statements: R$263.2 thousand; (ii) for services related to the issuance of asset appraisal of GP Sul: R$34.5 thousand. The expenses in 2011 with contracted services which are not audit of the financial statements amounted to 11.5% of the total fees paid to Deloitte.

CVM auditor code: 287-9 Name of company responsible: PricewaterhouseCoopers Auditores Independentes (PwC) CPF/auditor CNPJ: 61.562.112/0001-20 Date of hired service: 10/30/2009 Service end date: 4/17/2011 Name of individual responsible: Patricio Marques Roche CPF of individual responsible: 61.562.112/0001-20 Address: Rua da Candelria, 65, Centro, Rio de Janeiro, RJ, Brasil, CEP 20091-020, Telefone (21) 3232 6048 Fax (21) 2516 6591 e-mail: patrcio.roche@br.pwc.com Description of contracted service: For the fiscal years ended 2009, 2010 and 2011 the following services were provided by PwC: (i) independent audit of the company's annual financial statements for the fiscal years 2009 and 2010, with the issue of the related opinions, and limited review of quarterly financial statements for the three months periods ending March 31, June 30 and September 30, 2009 and 2010 (original for the years 2009 and 2010 and restatement of 2010) with the issue of the related reports; (ii) review of the prospect and issue of comfort letter during the process of the Companys initial public offering, held in 2010; and (iii) consulting services in information technology and processes for choosing and implementing a new system (ERP) for the Company, including (a) mapping of processes to assist the company in the choice of ERP software, with hiring date of September 1, 2009 and duration of twelve months and (b) monitoring of the implementation of the ERP (PA-Project assurance and QA-quality assurance)dated December 8, 2010 and term lasting less than twelve months. Total amount of remuneration of auditors separated by offered services:

For the services described above, PwC received the following values in 2011: (i) services of audit and limited review of the restated financial statements for the fiscal year ended 2010: R$441.9 thousand; (ii) for services related to the implementation of ERP: R$180 thousand. The expenses in 2011 with the contracted services that are not audit or limited review of financial statements amounted to 28.9% of total fees paid to PwC.

Possible replacement of auditor:

(i) (ii) Replacement justification: Periodic rotation of auditors, in the form of CVM 308/99 Instruction. Reason presented by the auditor in the event of a discrepancy between the statement of issuer: Not applicable.

2.3

Other information that the Company deems relevant:

In the Board of Directors meeting held on April 8th of 2011, has been approved the replacement of PricewaterhouseCoopers Auditores Independentes with Deloitte Touche Tohmatsu Auditores Independentes, as of the first quarter of fiscal year 2011, as the Companys independent auditors.

3. Selected Financial Information

3.1 Financial Information

Stockholders equity (in thousands of R$) Total Assets (in thousands of R$) Net revenues (in thousands of R$) Gross profit (in thousands of R$) Net income (in thousands of R$) Number of shares, excluding treasury Book value per share (in R$) Earnings per Share (in R$)

2009 172,641 440,294 404,193 234,590 68,388 87,420,577 1.97 0.78

For the Year ended December 31 2010 655,152 924,093 549,884 295,086 103,283 125,495,309 5.22 0.82

2011 736,140 1,288,603 677,592 337,170 92,177 125,656,724 5.86 0.73

3.2 Non accounting measures

EBITDA
EBITDA is a non-accounting measurement adopted by the Company, reconciled with its financial statements, in accordance with CVM Instruction 01/2007, when applicable. The Company has calculated its EBITDA as net earnings before financial results, the effect of depreciation of assets and equipment used for rental, and the amortization of intangible assets. EBITDA is not a measure recognized under BR GAAP, IFRS or US GAAP. It is not significantly standardized and cannot be compared to measurements with similar names provided by other companies. The Company has reported EBITDA because it is used to measure its performance. EBITDA should not be considered in isolation or as a substitute for "net income" or "operating income" as indicators of operational performance or cash flow, or for the measurement of liquidity or debt repayment capacity.

Reconciliation of EBITDA with Operational Earnings:

For the Year ended December 31 2009 2010 2011 (in thousands of R$) 125,799 147,463 161,968 31,851 47,060 76,188 157,650 194,523 238,156

Operating income before financial result (+)Depreciation and amortization ............................................... EBITDA ................................................................................

Reasons for using the EBITDA

EBITDA is used as a performance measurement by the Companys Management, reason why it is important to be included in this Reference Form. The Company believes that the EBITDA is an efficient measurement to evaluate the performance of operations, as an indicator that is less impacted by interest rates fluctuation, changes in the rates and chances of incidence of the corporate income tax (IRPJ) and social contribution on net profits (CSLL) and depreciation levels.

Return on Invested Capital

Return on Invested Capital (ROIC) is a non-GAAP measurement elaborated by the Company. It is calculated as Operating Income before financial results and after the payment of income tax and social contribution (theoretical 30% income tax rate) on this income, includes remuneration from affiliates,

divided by average Invested Capital. ROIC is not a measure recognized under BR GAAP, and it is not significantly standardized and cannot be compared to measurements with similar names provided by other companies. Annual ROIC: (Annual Operational Income (30% Income Tax Rate) + remuneration from affiliates) / Average Invested Capital of the last thirteen months. For the Company, invested capital is defined as the sum of its own capital (net equity or shareholders equity) and capital from third parties (total loans and other liabilities that carry interest, from banks or not), both being average capital from the beginning to the end of the period considered.

ROIC calculation from the Operating Income

For the Year ended December 31 2009 2010 2011 (in thousands of R$, except when percentages) Operating Income before financial results .................................... 125,799 147,463 161,968 (+) Income tax and CSLL provision (1).......................................... (42,772) (40,078) (48,590) (+)Remuneration of affiliated companies 228 Operating profit before financial income, after taxation and remuneration of affiliated 83,027 107,385 1 companies ........................................................................... () Average invested capital ............................................... 332,713 (=) net equity (2) ................................................................... 141,128 (+) capital from third parties (3) .............................................. 193,252 (-) Cash and Cash equivalents ............................................... 1,667 ROIC (%) ............................................................................ 25.0%
(1) (2) (3)

510,538 501,006 182,561 173,029 21.0%

932,708 498,821 433,887 97,929 12.3%

Effective tax rate on operational Income before financial result, and since 2011 theoretical rate of 30%. Comprising shareholders equity. Comprising total loans and other liabilities that carry interest.

Reasons for using ROIC as a performance measure

ROIC is used by the Companys Management as a measure of return to its shareholders, which is why the Company believes it is important its inclusion in this Reference Form. The Company believes that ROIC indicates the level of wealth generated by the Company from its sources of funds, reflecting adequately the return on investment for its shareholders. The Company also considers that, since ROIC is based on operating profit before financial result, it provides a more reliable measure of the wealth generated by its operating activities. ROIC should not be considered solely or as a substitute for net income or operating income as indicators of the Companys performance or return effectively earned by investors. 3.3 Events subsequent to the latest financial statements

Issuance of Commercial Promissory Notes

On April 23, 2012, the Company issued, in a single series, 30 commercial notes each with a nominal value of R$1.0 million, amounting to R$30.0 million, with maturity on December 3, 2012. Over the nominal face value of the notes will yield interest corresponding to 100% of accumulated variation of daily average rates of DIs, added 4.9% per year. The remuneration shall be fully paid by the due date.
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Increase of the Companys Capital Stock

On November 12, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$ 463,838.37 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2010"). There was issuance of 37,029 new common stocks. Also on November 12, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$982,280.40 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 48.151 new common stocks. On August 9, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$886,108.00 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2010"). There was issuance of 70,550 new common stocks. Also on August 9 , 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$20,000.00 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 1,600 new common stocks. Also on August 9, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$1,633,370.82 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 80,422 new common stocks. On July 2nd, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$31,276.80 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Plano Especial TopMills). There was issuance of 13,032 new common stocks. On April 24, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$4,613,384.16 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2010"). There was issuance of 371,448 new common stocks. Also on April 24, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$892,862.10 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 44,421 new common stocks. On April 2nd, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$112,171.78 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Plano Especial TopMills). There was issuance of 47,131 new common stocks. On February 28th, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$4,227.33 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2010"). There was issuance of 339 new common stocks.

On January 24th, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$398,490.09, due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2010"). There was issuance of 32,583 new common stocks.

Debentures Issuance
On August 15, 2012, the Company held its second issuance, in two series of simple debentures, non convertible into shares, unsecured, public offering object with limited placement efforts, pursuant to CVM Instruction 476. 27,000 debentures were issues, each with a nominal value of R$ 10,000.00, of which: i) 16,094 debentures of the first series, amounting to R$ 160.9 million, with maturity date on August 15, 2017, not subject to monetary adjustment. The nominal value of the first series debentures will be amortized in two annual installments starting on the fourth year of the issuance, and the interest paid semi-annually and equal to surtax of 0.88% per annum of 100% of DI accrued variation. ii) 10,906 debentures of the second series, amounting to R$ 109.1 million, with maturity date on August 15, 2020, subject to monetary adjustment by the accrued variation of the IPCA. The nominal value of the second series debentures will be amortized in three annual installments starting on the sixth year of the issuance, and the interest paid annually and equal to 5.50% per annum of the above mentioned monetarily adjusted amount. The credit risk agency Moody's assigned rating Aa3.br for the Company's corporate credit in national currency, as well as for their debentures. The net proceeds of the Offering will be fully used to: (a) finance investments to be made by the Company, (b) payment of Company debts, and (c) general corporate purposes of the Company. For more information on the securities issued by the Company, see item 18 from this Reference Form.

Other Events
On June 21 , 2012 was approved, in the Board of Directors Meeting, the removal of 4,000 registered common shares with no par value, held in treasury, as a result of the appraisal rights extended to dissenting shareholders in connection with the resolutions passed at the shareholders meeting held on th April 20 , 2012. 3.4 Policy for allocation of results
Fiscal Year Ended December 31 2009 Rules on retention of profits In accordance with article 27 of the Companys by-laws, the Company should deduce (i) 5% of net income should be allocated for constitution of legal reserve, which shall not exceed 20% of its capital; (ii) the minimum dividend provided in Article 28; (iii) the percentage provided in Paragraph 2 of Article 25; and (iv) amounts 2010 In addition to the cases provided by the law, as provision introduced on February 8, 2010, the Companys bylaws provide that up to 75% of the adjusted net income for the year could be allocated to the expansion reserve, as long as the recorded amount in such reservation does not exceed 80% of its capital. 2011 In provision introduced on February 8, 2010, the Companys bylaws provide that up to 75% of the adjusted net income for the year could be allocated to the expansion reserve, as long as the recorded amount in such reservation does not exceed 80% of its capital. th

for the constitution of reserves so that the General Assembly determines about legal limitations. At the Extraordinary Shareholders Meeting held on March 12, 2010, it was approved the increase of the Companys capital in the amount of R$16,200,604.68, as a result of the capitalization of part of the statutory reserve expansion.

At the Ordinary Shareholders Meeting held on April 19, 2011, it was approved the constitution of statutory reserves in the net income in the amount of (i) R$71,526,715.40 of net income retention, that will be used to fund part of the planned investments in the Companys capital budget to acquire equipment for expansion and investment in facilities and information technology to support the planned expansion; and (ii) R$ 5,164,160.73 destinated to the Legal Reserve. The Companys shareholders are entitled to receive the mandatory minimum dividend of 25% from the adjusted net income (after allocation to the legal reserve). At the Ordinary Shareholders Meeting held in 2011, it was approved the payment of 25% of the adjusted net income recorded in 2010 to its shareholders, as dividends and interest on capital. The dividends are distributed according to the deliberation from the Companys AGO. Some of the financial contracts include, in the acceleration of maturity cases, the payment of dividends in an amount greater than 50% of the adjusted net income for the year.

At the Ordinary Shareholders Meeting held in April 20, 2012, it was approved the constitution of statutory reserves in the net income in the amount of (i) R$63,741,776.68 of net income retention, that will be used to defray part of the planned investments in the Companys capital budget to acquire equipment for expansion and investment in facilities and information technology to support the planned expansion; and (ii) R$4,608,857.70 destinated to the Legal Reserve. The Companys shareholders are entitled to receive the mandatory minimum dividend of 25% from the adjusted net income (after allocation to the legal reserve). At the Ordinary Shareholders Meeting held in 2012, it was approved the payment of 25% of the adjusted net income recorded in 2011 to its shareholders, as dividends and interest on capital. The dividends are distributed according to the deliberation from the Companys AGO. No restrictions. The debt contained in the clause of prepayment to the payment of dividends in an amount greater than 50% of the adjusted net income for the year. was settled in 2011.

Arrangements for distribution of dividends

The Companys shareholders are entitled to receive the mandatory minimum dividend of 25% from the adjusted net income (after allocation to the legal reserve). At the Ordinary Shareholders Meeting held in 2010, it was approved the payment of 25% of the adjusted net income recorded in 2009 to its shareholders, as dividends. The dividends are distributed according to the deliberation from the Companys AGO. Some of the financial contracts include, in the acceleration of maturity cases, the payment of dividends in an amount greater than 50% of the adjusted net income for the year.

Frequency of dividend distribution Restrictions to dividend distribution

3.5

Summary of distributions of dividends and retained earnings occurred

3.6

Dividends declared on account of retained earnings or reserves

The dividends presented in the chart of item 3.5 were declared in the net income of the fiscal year. 3.7 Debt

For the Year ended December 31, 2011 in R$ thousands, except percentages

Total amount of debt of any nature..................................... () Stockholders equity ..................................................... Debt Ratio ...........................................................................

552,463 736,140 75.0%

Fiscal Year ended December 31 Dividends 2009 2010 (in R$ thousands) Net Income after transfer to legal reserve % of dividend distributed Rate in return Total gross dividend distributed Total dividend distributed Net interest on Capital retention Net Income retained 64,969 25.0% 39.6% 16,956 16,242 52,146 98,119 25.0% 15.8% 28,113 24,530 71,527 87,568 25.0% 12.5% 25,347 21,892 63,742 2011

Date of approval of the retention

03/12/10

04/19/11

4/20/2012

Date of dividend payment Dividend paid to common Dividend paid to preferred Interest on capital paid to common

04/28/2010 7,780 2,943 4,548 1,685

04/29/2011 2,713 25,400 -

4/30/2012 947 24,400 -

Net Debt over EBITDA

Interest on capital paid to preferred

Net debt over EBITDA is a non-accounting measurement that reflects, in percentage, the total debt amount, of any nature, or gross debt, subtracted by the total availabilities amount, divided by the EBITDA.
For the Year ended December 31, 2011 in R$ thousands, except percentages Gross Debt ................................................................................. (-) Availabilities .......................................................................... Net debt .............................................................................. 410,946 (35,179) 375,767

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() EBITDA ......................................................................... Net debt on EBITDA ............................................................

238,156 157.8%

Reasons to use the Net debt / EBITDA ratio

The Net debt/EBITDA ratio is used by the Companys management as a debt measure and there are clauses in bank credit contracts that require the observance of this financial indicator, among others. The management believes that the Net debt/EBITDA ratio consists in an efficient debt level and payment capability indicator of the Company. The Net debt over EBITDA ratio should not be considered solely or as a substitute for the total liabilities over shareholders equity ratio as the Companys debt indicator. 3.8 Obligations of the Company
Less than 1 year Maturity Between 1 and 3 Between 3 and 5 years years (in R$ thousands) 33,607 4,513 118,352 179,786 151,959 184,299 Over 5 years Total

Collateral Floating Guarantee Unsecured obligations Total

32,924 144,813 177,737

7,081 31,387 38,468

78,125 474,338 552,463

3.9

Other information that the Company deems relevant

There are other relevant information pertaining to this item 3.

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4.

RISK FACTORS

4.1

Risk factors

a.

to the Company

The Company may not be able to fully implement its business strategy
One of the Companys key objectives over the next few years is to sustain its accelerated annual growth rate. The continued growth depends on several factors, many of which are beyond the Companys control. In particular, the Companys strategy for the expansion of its divisions is based on the assumption that the Brazilian construction, industrial, and oil and gas sectors will experience significant growth in coming years, driven, to a large extent, by public investments aimed at improving Brazils infrastructure for energy, sanitation, public transportation and housing, as preparing the country to host the 2014 FIFA World Cup and the 2016 Olympic Games, meeting the objectives set by the Brazilian governments PAC program, the Brazilian governments low income housing program and exploiting natural resources recently discovered in the pre-salt strata, among others. If these investments are not made, the Company would expect a significant decrease in the demand for its products and services and would not be able to implement its growth strategy satisfactorily. The Companys organic growth strategy also includes substantial geographic expansion of its operations through the opening of new branches. The Company may not be able to successfully expand its operations to additional Brazilian cities and regions for a number of reasons, including shortages of qualified workers, lack of reliable suppliers in such cities and regions, competition from local players, and difficulties in securing market acceptance of its brands. Although the geographic expansion occurs satisfactorily, the Company will be subjected to risks from the local economy of these new regions. Additionally, the Companys future performance will depend on its ability to manage the rapid and significant growth of its operations. The Company cannot guarantee that it will be able to manage its growth successfully, or that this growth will not have an adverse effect on its existing business. If the Company is unable to manage its growth, it may lose its leading market position, which could have a material adverse effect on its financial condition, results of operations and the negotiation price of its shares.

The Company provides solutions for companies that operate in a number of industries, primarily the residential, commercial and heavy construction sectors and the oil and gas sectors. As a result, the Companys business is exposed to risks that are similar to those faced by companies that operate in these and in other sectors.
The Heavy Construction division offers customized solutions to companies involved in the implementation of large infrastructure projects, while the Jahu division provides services to residential and commercial construction companies. The main sectors served by the Industrial Services division include the oil and gas, chemicals and petrochemicals, heavy construction, pulp and paper, naval, and mining industries, among others, as the products offered by the equipment of the Rental division are leased to companies operating in a broad number of industrial segments. Consequently, the Companys financial condition and results of operations are directly linked to the growth and performance of these several industries, and the Company is exposed to many of the risks faced by companies operating in these industries. Events that may negatively affect these industries in such sectors, including macroeconomic factors, adverse climate conditions, deterioration of the Brazilian social conditions, decreases in public investment, changes to laws and regulations that adversely affect these industries, credit restrictions, supplier problem, reductions in client purchasing power, and difficulties in the management of the clients business, among others, are beyond the managements control and may cause an adverse material effect on the Companys operations and results.

Adverse conditions in the financial and credit markets, or the Companys failure to secure financing on adequate terms, may adversely affect its ability to run its business or to implement its strategy.
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The implementation of the Companys expansion strategy will demand additional investments and require additional capital, which may not result in an equivalent increase in its operating income. In addition, the Company may face an increase in operating costs as a result of other factors, as shortages of raw materials, equipment or skilled labor, increased equipment costs and increased competition in the segments in which it operates. The Company may need to raise additional funds through securities offerings, including offerings of its shares or debt instruments, or through credit financings, in order to meet its future capital needs. The Company may not be able to secure such funds on favorable terms, or at all. The Company future capital needs will be determined by a number of factors, including the rate of growth of its revenues, the cost and significance of future acquisitions, and the expansion of its business operations. The Company may need to increase its cash flow and/or seek alternative funding by entering into strategic partnership agreements. Efforts to increase its cash flow by means of an increase in sales, reduction in operating expenses, introduction of more efficient processes for the collection of receivables, or inventory cuts may not be successful. In addition, the Company may not be able to raise funds to finance the Companys operations on favorable terms, in which case it may be unable to take advantage of future opportunities, to react to an increase in competition, or to meet its existing debt obligations. Any of the events mentioned above could have a material adverse effect on its financial condition, operation results and the negotiation price of its shares. The current funding lines from the Company represented, on December 31 of 2011, a short-term debt of R$71.4 million, and long-term debt of R$339.5 million. Pursuant to the terms of the Companys existing financing agreements it must comply with certain conditions which restrict, among other things, its ability to incur additional debt, pay dividends and carry out capital reductions. As a result of these restrictions, the Company may have difficulty in securing additional financing to run its operations. In addition, some of the Companys clients are dependent on the credit availability to finance their investments. A scenario of credit shortages and high interest rates may adversely affect its clients ability to fund their projects and, consequently, purchase the Companys services, which may have a material adverse effect on its financial condition and results of operations. The Company is also exposed to the fact that counterparts to its financing agreements may be prevented from fulfilling their obligations toward the company, should they go bankrupt or into receivership due to a sharp decrease in their liquidity levels, so great that such institutions may be prevented from fulfilling their obligations. The Companys difficulty in the credit scarcity may also adversely affect its suppliers. Therefore, should the Companys financial counterparts or suppliers be unable to satisfactorily meet their obligations under the terms of the Companys existing agreements, the Company may need to secure alternative financing and/or approach alternative suppliers in order to meet its own obligations toward its clients. Such events could also lead to litigation with its partners or clients, which could have a significant adverse impact on its reputation, operation and financial condition.

The Companys growth may be adversely affected if it fails to identify and complete strategic acquisitions. Difficulties in the integration of acquisitions could adversely affect its results of operations.
The Company operates in a fragmented market, where the credit access is limited. The Company believes, therefore, that its sector will go through a process of consolidation over the next few years, which may significantly change the existing competitive landscape. The Company believes that identifying and executing strategic acquisitions is one way it could successfully implement its growth strategy and quickly and efficiently expand its operations and geographic footprint. However, this strategy could be adversely affected if the Company fails to identify suitable acquisition opportunities and/or fail to execute such acquisitions on favorable terms. In addition, the Company may not be able to integrate companies it acquires into its operations within the timeframe and in the manner determined by its management. Any such failure could have an adverse effect on the rate of return on the Companys investment, preventing from taking full advantage of the potential synergies of any such acquisition and result in an adverse effect on its financial condition and results of operations.
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The loss of members of the Companys management team may have a material adverse effect on its operations.
The Companys current market position and its ability to maintain this position is largely dependent on the skill of its highly experienced management team. None of the Companys executive officers are subject to long-term employment contracts or non-compete agreements. The Company cannot guarantee that it will be able to retain its current executive officers or hire other qualified professionals. The loss of a few of the Companys senior executive officers, or its failure to attract and retain experienced professionals, may adversely affect its business.

The Companys expansion strategy could be adversely affected if it is unable to hire qualified professionals and provide training to its staff.
As part of the execution of its expansion strategy, the Company will need to hire new qualified professionals active in the most various business sectors. However, it faces significant competition in the hiring of qualified personnel from other providers of engineering and industrial services and there can be no assurance that it will be able to attract the number of professionals necessary to implement its expansion plan in the desired timeframe. In addition, the Company may face difficulties in retaining its current staff if it is unable to preserve its corporate culture and offer competitive compensation packages. The Company believes that the hiring and retention of skilled labor is a critical factor for business success and its growth strategy. The Companys financial condition and results of operations could be adversely affected if it fails to implement this strategy.

The Companys operations have already been interrupted in the past by labor issues, and the Company cannot guarantee that such interruptions will not occur in the future.
As of December 31, 2011, approximately 3.9% of the Companys employees were members of labor unions, primarily in the civil construction and trade industries. The Company has entered into collective bargaining agreements with each of these unions, which agreements are renegotiated on an annual basis. The renegotiation of these agreements could become more difficult as unions campaign for salary increases on the basis of the growth of its operations. During the last three years, the operations of Industrial Services division have been interrupted during negotiation of new collective bargaining agreements. In addition, the Companys employees could become involved in the suspension of the operations of its clients. Strikes affecting any of the Companys divisions could have an adverse impact on its operations, including the cost of its projects and its ability to make timely delivery.

The Companys success depends, to a large extent, on the quality and safety of its services and products.
The Companys success depends, to a large extent, on the quality and safety of the machinery and equipment that it uses in the provision of its services or that are rented to its clients. If the Companys products are in any way defective, incorrectly assembled or unsafe, if they cause any kind of accident or delay in its clients operations, or if they do not meet the expected quality and safety standards, the Companys relationships with its clients and partners could suffer, its reputation and strength of its brand could be adversely affected, and the Company could lose market share, besides being exposed to administrative proceedings and lawsuits in connection with any potential failures of its machinery or equipment and incur significant expenses. The occurrence of any of these factors could adversely affect the Companys business, financial condition and results of operations.

Proceeds from the Companys insurance policies may not be sufficient to cover damages resulting from a contingent event.
The Company cannot guarantee that proceeds from its insurance policies will be sufficient to cover the damages resulting from any event covered by such policies. Accordingly, certain risks may not be covered under the terms of its insurance policies (such as war, fortuitous events, force majeure and interruption of
15

certain operations). Therefore, if any non-covered event occurs, the Company may incur additional expenses to rebuild or refurbish its buildings, or to repair or replace its equipment. Furthermore, the Company cannot guarantee that the proceeds from its insurance policies will be sufficient to cover the damages caused by any event for which its insurance policies provide coverage. There can be no assurance that the Company will be able to renew its insurance policies on favorable or acceptable terms, or at all, or enter into new insurance policies with alternate providers.

The Companys results could be adversely affected if it receives an unfavorable judgment or decision in one or more of the administrative proceedings and lawsuits filed against the company.
As of December 31, 2011, the Company was involved in administrative proceedings and lawsuits for which it has recorded provisions of R$52.4 million. The Companys financial condition and results of operations could be materially adversely affected, if it receives an unfavorable judgment or decision with respect to a significant share of these proceedings and lawsuits. In addition, proceedings involving alleged acts of negligence, imprudence or failure could affect the Companys reputation and adversely affect its operations, whether or not it receives an unfavorable decision.

The nature of the services rendered by the Company requires to make significant financial and technical investments before knowing whether or not it will be hired.
Due to the nature of the services the Company provides, it is required to make substantial initial investments in the development of new processes, the provision of constant training to its employees and, in particular, the acquisition of machinery and equipment to be used in the provision of its services. Some of these investments are carried out before the Company knows whether its services will be used on a continuous, successive basis and it is exposed to the risk that significant initial investments will not generate the returns that are anticipated. The Company is particularly vulnerable to a sudden decrease in the level of demand for its services that would result in an increase in its spare capacity and leave its revenue-generating assets idle, which could have an adverse affect on its financial condition and results of operations.

All of the Companys business divisions face significant competition in the markets in which they operate.
The Company faces strong competition in all of the segments in which it operates. Moreover, the Company may be exposed in the future to additional competition from new market players, as well as from foreign competitors entering the Brazilian market. The Company operates in a fragmented market which demonstrates considerable potential for growth and is served by a substantial number of companies offering less sophisticated and, therefore, less cost services. The Companys clients decision to hire a particular service provider is influenced by a number of factors, including the quality of the services, the reliability of the contractor and its ability to offer innovative solutions, and the price charged for the services required. The Companys competitors are making substantial efforts to improve their market positions and the Company may lose certain clients to these competitors, including long-standing clients that regularly employ its services. Certain competitors of the Industrial Services division have more experience and greater scale in the provision of certain industrial maintenance services, and may have greater financial resources. If the Company is unable to effectively compete against these companies, its market share could decrease, which would adversely affect the Companys financial condition and results of operations. In addition, if construction companies and companies operating in the oil and gas sector create new inhouse departments to complement their core operations, so as to no longer require the Companys services (or even to compete with the Company), it may experience a reduction in the demand for its services, and a potential increase in competition, which may adversely affect its financial condition and results of operations.
16

The development of engineering solutions and technological innovations which add value to the Companys services is critical to the protection of its leading market position and to the expansion of its business.
Due to the nature of the Companys business, it must remain abreast of the latest engineering solutions and technological innovations in its industry. The Company must employ qualified personnel, maintain an adequate infrastructure, and expand relationships with suppliers that have a successful track record. Should the Company fail to provide value-added engineering solutions, or to buy or license new technologies developed by third-parties on acceptable terms, the services rendered by the Company could become outdated or obsolete in comparison to the services offered by its competitors. Any failure to remain at the technological forefront of the industry would adversely affect its relationship with clients and, consequently, its financial condition and results of operations.

b.

to the controlling shareholder.

The interests of the Companys controlling shareholder may conflict with the interests of its investors.
The Companys controlling shareholder has the ability, among other things, to elect the majority of the members of its board of directors and determine the outcome of decisions requiring shareholder approval, including with respect to transactions with related parties, corporate restructurings, asset sales and partnership agreements, and will have power to influence the amount and timing of any dividends to be distributed in the future, subject to the provisions of the Brazilian corporate law regarding the payment of mandatory dividends. The Companys controlling shareholder may choose to pursue acquisition opportunities, dispose of assets, and enter into partnership and financing agreements or similar operations which may conflict with the interests of its other shareholders.

After the completion of the public offering, the Company became to be a diffused controlled company, since it does not have a controlling shareholder or group of shareholders holding more than 50% of its voting capital, which can allow it be susceptible to alliances and conflicts between shareholders and other events resulting from the absence of a controlling shareholder or shareholder group holding more than 50% of the voting capital.
After the completion of the public offering, the Company came to not have a shareholder holding more than 50% of its voting capital. There is no established practice in Brazil of a public company with no controlling shareholder of the voting capital. Alliances or agreements can be made between the new shareholders, which could have the same effect as having a group of shareholders. In the event of a group of shareholders and this group takes a hold of the decision power of the company, it can suffer sudden and unexpected changes in the corporate policies and strategies, including through mechanisms such as the replacement of the Companys management staff. Besides this, the Company may be more vulnerable to hostile attempts to acquire control and conflicts from this outcome. Additionally, the Company's shareholders can possibly change or exclude these provisions from its bylaws which provide a public offering for share acquisition by a shareholder who becomes holder of 20% of its share capital and then disregard their obligation to make a public offering to acquire shares as it is required by its bylaws. The absence of a controlling shareholder or controlling group of shareholders of more than 50% of the voting shares of the Company may also hinder certain decision-making processes, which could not be reached the quorum required by law for certain decisions. In the case that there isnt a controlling shareholder holding the absolute majority of the voting shares of the Company, the Company's shareholders may not use of the same protection granted by Share Companies Law against abuses practiced by other shareholders and, consequently, may have difficulty in repairing the damage caused. Any sudden or unexpected change in the Company's management team in its business policy or strategic direction, attempt to acquire control or any dispute among shareholders concerning their respective rights may adversely affect the Company's business and operating results.

c.

to the shareholders.
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An active and liquid market for the Companys shares may not develop. The volatility and lack of liquidity of the Brazilian capital market could substantially limit the investors ability to sell their shares at the desired price and time.
An investment in securities traded in emerging market countries such as Brazil frequently involves a greater degree of risk when compared to investments in securities of issuers located in major international securities markets, and are generally considered to be more speculative in nature. The Brazilian securities market is substantially smaller, less liquid, more concentrated and usually more volatile than major international securities markets such as the United States. As of December 31, 2011, the BM&FBOVESPA represented a market capitalization of approximately R$2.3 trillion (US$1.2 trillion), with an average daily trading volume of R$6.5 billion during the period from December 30, 2009 to December 30, 2010. The Brazilian capital market is significantly concentrated. The main ten shares traded on the BM&FBOVESPA accounted for approximately 48.8% of the total volume of shares traded on this stock exchange during the year ended December 31, 2011. These characteristics from the Brazilian Capital Market may substantially limit investors ability to sell the Companys shares for the desired price and at the desired time, which in turn may have a significant adverse effect on the price of its shares. The average daily trading volume of the Companys shares, in 2011, was of R$ 5.6 million.

Shareholders may not receive dividends.

The Companys bylaws provide that 25% of the net profit for any year, adjusted pursuant to the provisions of the Brazilian corporate law, should be distributed to shareholders as mandatory dividends or as interest on stockholders equity. Despite the requirements regarding the payment of mandatory dividends, the Company may limit such payment to the realized portion of the dividends or suspend the distribution of dividends to its shareholders in any year, if the Companys board of directors determines that such distribution would not be advisable given its financial condition.

The Company may need additional funds in the future and may issue additional securities to secure such funds. This may adversely affect the price of the shares and result in a dilution of the investors percentage interest in the Companys shares.
The Company may need to raise funds in the future through an additional public or private offering of shares or securities convertible into or exchangeable for shares. Any additional funds raised by the distribution of shares or securities convertible into or exchangeable for shares may impact their price and dilute the investors percentage interest.

Provisions in the Companys bylaws may discourage, delay or make more difficult a change of control of the company or the approval of transactions that might otherwise in the best interests of its shareholders.
The Companys bylaws contain provisions intended to avoid the concentration of ownership of its shares in small groups of investors and to foster a dispersed ownership. These provisions require that any shareholder that acquires or becomes the holder, except any involuntary increase, as provided in the Bylaws of the Company, of (i) Companys shares representing 20% of its capital stock, (ii) derivatives to be settled in shares of the Company and / or paid in currency, exchange-traded or privately organized market, which are referenced in any actions or other securities issued by the Company and having rights to shares of the Company representing 20% or more of the Companys shares, or (b) giving the right to receive an amount equal to 20% or more of the Companys shares; or (iii) certain other rights in the corporate nature of amount equal to or greater than 20% of the total shares issued by the Company or which may result in the acquisition of Company shares in the amount equal to or greater than 20% of the total shares the Companys capital; shall make, within sixty days to the purchase date of this acquisition or event that resulted in this acquired percentage, an OPA for all shares issued by the Company at the price determined by its bylaws. These provisions could have the effect to discourage, delay or even
18

prevent the Company to merge with another company or be acquired by another company, including transactions in which the investor may receive a bonus over the market value of the Companys shares. Likewise, statutory provision might allow the maintenance or perpetuation of the staff members of the Company nominated and elected by shareholders holding less predominant portion of the Company's capital.

d.

to its subsidiaries and affiliates.

The Company does not have subsidiaries or affiliates. The only society in which the Company holds a stake is Rohr S/A Estruturas Tubulares (Rohr). Since Rohr operates in the same market of the Company, the Companys management believes that both societies are subject to the same risks listed in the items (a) above and (e), (f) and (g) below. In addition, the minority stake held by the Company in Rohr does not allow it to prevail in the deliberations of its general meetings or elect administrators, and shall only be facultative to elect a fiscal council member and exercise the rights of shareholders provided for in corporate law. Consequently, the Company is exposed to various risks, such as (i) does not receive dividends beyond the minimum required in Rohrs bylaws, the corresponding amount, in each fiscal year of 6% of its capital, (ii) to not be able to influence the executive administration and management of Rohr, including the case of disagreeing with decisions made by its officers, and (iii) eventual difficulty to access Rohrs documents and information, or related to its operations.

e.

to its suppliers.

Fluctuations in the price of raw materials, components and equipment used in the Companys operations, as well as of commodities, may adversely affect its results.
Certain raw materials and components used in the Companys operations are prone to sudden and significant fluctuations in price, over which it has no control. The final price of components, machinery and equipment that are acquired or rented from third parties correlates to a significant extent with the price of commodities such as steel and aluminum. A substantial increase in the price of such commodities generally results in an equivalent increase in the Companys suppliers operating costs and, consequently, in an increase in the prices they charge for their products. The Company may not be able to pass these price increases on to its clients, which could have an adverse effect on its operating costs and financial condition and results of operations. In addition, all of the equipment used by the Rental division is imported, as there is no equipment of comparable quality available locally, and their prices are defined in foreign currencies. Should the real depreciate against the foreign currencies in which the Company purchases equipment, its purchase costs will increase and it may be unable to reflect the increased cost of equipment in the rental prices charged.

The components, machinery and equipment used in the Companys operations are manufactured and supplied by third parties.
The components, machinery and equipment used in the Companys operations are manufactured by thirdparties. The Company also buys other materials used in its operations from local or foreign companies. The Company generally does not carry a very large inventory of equipment in its warehouses, only the minimum required for the provision of its services. As a result, the Company is vulnerable to delays in the delivery of equipment or increases in the prices charged by its suppliers, which could prevent from providing its services or renting its equipment to its clients in a timely manner. Also, if the Companys suppliers are not prepared for and are unable to meet potential increases in the demand for their products, it may not be able to buy the amount of equipment or volume of raw materials necessary to carry out its operations. If such delays in delivery or lack of products become recurrent, the company may not be able to find new suppliers quickly enough to meet its clients needs. In addition, the introduction of restrictions on the acquisition of imported goods, or the increase of taxes due on imported equipment, may have a negative impact on the Companys business, in particular on the operations of the Rental division. Any delays or price increases resulting from the actions or failures of the Companys suppliers, or
19

due to new import regulations, could result in increased costs for the Company, requiring a price increase, in which case the demand for the Companys services could be adversely affected, affecting its financial condition and operation results.

f.

to its clients.

The success of the Heavy Construction division depends on the development of long-term relationships with a limited number of large companies operating in the Brazilian civil construction sector.
According to O Empreiteiro magazine, the revenue of the ten largest Brazilian construction companies represented, in the year 2010, 57.1% of the revenues from the 50 largest construction companies in the country. Maintaining long-standing partnerships with such companies is the key to ensure the Companys involvement in the implementation of prestigious and innovative activities and execute its operations, in particular, more complex projects. Should the Company lose any of its main clients, or in case the Company is unable to maintain a close relationship with such clients, the operations and revenue from the Heavy Construction division could be materially adversely affected.

The Company may be unable to attract new clients or to develop new business at the pace required for the expansion of the Jahu and Rental divisions.
The average term of the service agreements between the Jahu and Rental divisions and their clients is generally shorter than that of the service agreements negotiated by the other business divisions. As a result, both the Jahu and Rental divisions rely on the constant generation of new business in order to maintain their revenue at a constant level. Due to the high degree of competition faced by the Jahu and Rental divisions, the Company must make significant investments in order to attract new clients and retain existing ones, in addition to offering its services at competitive prices. In 2011, the Jahu and Rental divisions accounted for 23% and 25.9%, respectively, of the Companys net revenue, compared to 19.1% and 17.3%, respectively, of the Companys net revenue in 2010. If the Company is unable to generate new business at the rate required by the Jahu and Rental divisions, the operations and expansion of the activities carried out by these divisions could be adversely affected.

The Company may be unable to meet the needs of all of its clients or deliver its services in a timely manner.
The Company owns a limited number of machinery and equipment, which must be properly allocated to each project in which it is involved. Delays or interruptions in the manufacturing and maintenance of such equipment and its component parts, as well as sudden increases in the demand for the Companys services, could prevent from providing its services in the agreed timeframe or from meeting the needs of its clients satisfactorily and efficiently, as a result of any of the following factors: inability to foresee the needs of its clients; delays caused by its suppliers; insufficient production capacity; equipment failure; shortage of qualified workers, strikes and labor claims; interruption in the provision of public services, in particular power cuts; delays or interruption of the equipment transportation system; changes to customs regulations;
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macroeconomic factors; and natural disasters.

If the Company is unable to meet its deadlines, either due to internal problems, or as a result of events over which it has no control, it may lose the trust of its clients and, therefore, experience a decrease in the demand for its services, which could adversely affect its financial condition and operation results.

The Company is exposed to the credit risk of its clients

The company is subject to the credit risk of clients for payments due by the equipment rental and service provision. Provisions for allowance for doubtful debts made by the Company from time to time, may not be sufficient to deal with any inadimplementos. For more information, see the section "Credit Risk (accounts receivable)" in table 5.1 of this reference form. Losses above Companys expectations (and therefore not reflected in provisions) may adversely impact the Company's results.

Fluctuations in the price of commodities may impact the Companys clients investment decisions and the cost of equipment and, consequently, the Company may face cancellations or delays affecting its existing and future projects or loss of revenue.
Fluctuation in commodity prices may affect the Companys clients in many areas. For example, for clients engaged in the oil and gas, copper and fertilizers business, fluctuation in their product prices may have a direct impact in the profit margins and cash flows, and consequently influence decisions between maintaining existing investments or making new expenditures. Should the Companys clients choose to postpone new investments and/or to cancel or delay the execution of existing projects, the demand for the Companys services would drop, which could have a material adverse effect on its operations and financial condition. The Companys operations and financial situation has been adversely affected in the past, and could be substantially affected in the future, due to cancellations and delays in connection with projects in which it was or is involved. The prices of commodities may also have a strong impact on the cost of the Companys equipment and projects. Any increase in such prices could adversely affect the potential return on the planned projects that the Company was going to execute, as well as the current investments, should its clients choose to postpone, cancel or delay their execution.

g.

to the economic sectors in which the issuer is involved.

The Brazilian government has been and continues to be a significant influence over the Brazilian economy. This influence, as well as Brazilian political and economic conditions, could adversely affect the Companys business and results of operations.
The Brazilian government has frequently intervened in the Brazilian economy and has occasionally introduced significantly changes to the countrys monetary, credit and tax policies, among others. The Brazilian governments actions to control inflation have often involved, among others, increases in interest rates, changes in tax policies, price controls, currency devaluations, capital controls, and customs restrictions. The Company haa no control over and cannot predict what measures or policies may be introduced by the Brazilian government in the future. The Companys business, financial condition and operations results, as well as the trading price of its shares, may be adversely affected by Brazilian, state and municipal changes to public policies relating to tax rates and exchange controls or regulations involving or affecting factors such as: interest rates; exchange controls and restrictions on remittances abroad; fluctuations in exchange rates; inflation; social and political instability; expansion or contraction of the global or Brazilian economies;
21

liquidity of domestic capital and financial markets; tax burden and policy; and other political, social and economic developments in or affecting Brazil.

Uncertainty over whether the Brazilian government will implement changes in policy or regulation affecting these or other factors in the future may contribute to economic uncertainty in Brazil and heightened volatility in the Brazilian securities markets. For example, on October 20, 2009, the Brazilian government introduced a 2% tax on foreign investments in the Brazilian financial and capital markets. With the purpose of reducing the exchange rate pressure, on October 18, 2010, Finance Minister Guido Mantega, announced the increase of the IOF tax rate on foreign investments in fixed income to 6%. In 2011, the IOF tax rate returned to the level of 2%, but on December 1st the government cut this tax on investments in equities in order to stimulate the national economy and protect the Country from the effects of the international financial crisis. In October 2010, Dilma Rouseff was elected president of Brazil. Brazilian presidents have significant power to determine public policies, as well as to introduce measures affecting the Brazilian economy and the operations and financial results of companies such as the Company, whose operations rely to a significant extent on public investment in infrastructure and development. The campaign for the presidency could result in changes to existing public policies. For example, the new government faces pressure to cut expenses and public investments, including investments in infrastructure, due to increasing inflation and public debt, which can cause negatively and relevant impact in the Companys operations. In February of 2011, the Federal Government announced a cut of R$ 50 billion in the Union budget. There was also the contention of R$ 5 billion from the government to the program Minha casa, Minha vida, as a consequence of the delay in the approval of the second part of the program by the Congress. Public investments suffered reduction in 2011, when the spending on buildings and equipment declined around 6%, reaching a level of R$ 41.9 billion in 2011 from a level of R$ 44.7 billion in 2010. In December 2011, was announced by the Minister Guido Mantega that there would be efforts to reduce the spending in public administration and that the increase of the investments would be a priority in 2012, thus it has a key role in the creation of infrastructure and logistics needed to sustain further growth. Moreover, there are major sport events, such as the 2014 World Cup and 2016 Olympic Events, which will be held in Brazil, demanding the government to fulfill its public investments goals. The Company cannot predict whether the current or future Brazilian government will implement changes to existing policies on taxation, exchange controls, monetary strategy and social security, among others, nor estimate the possible impact of any such changes on the Brazilian economy or the Companys operations.

Federal Government's efforts to reduce inflation may delay the Brazilian economys growth and affect the Company's business negatively.
In the past, Brazil experienced extremely high inflation rates and, consequently, adopted monetary policies that resulted in one of the largest real interest rates in the world. Between 2005 and 2011, the SELIC medium rate was 19.1% and 11.7% respectively. Inflation and measures taken by the Federal Government to combat it, especially through the Central Bank, had and can return to have significant impact on the Brazilian economy and on the Company's business. The strict monetary policy with high interest rates may limit the Brazilian growth and the credit availability. Conversely, looser government and monetary policies, the decline in interest rates and the intervention in the exchange and stock markets to adjust or fix the real value may trigger increases in inflation rates and, consequently, the volatility of growth and the need for sudden and significant interest rate increases. Besides this, the Company may not have conditions to adjust the prices to offset the effects of inflation on its cost structure. Any of these factors could adversely affect the Companys business.

Exchange rate instability may affect the Brazilian economy, as well as the Companys operations and the market value of its shares.

22

Over the last few decades, the Brazilian currency faced frequent and substantial exchange rate fluctuations in relation to the U.S. dollar and other foreign currencies. The real showed significant devaluation against the U.S. dollar between 2000 and 2002, reaching an exchange rate of R$3.53 per U$1.00 by the end of 2002. On the other hand, the real appreciated substantially against the U.S. dollar in the period from 2003 to mid-2008 as a result of stability in the macroeconomic environment and strong growth in foreign investments in the country, reaching an exchange rate of R$1.56 per US$1.00 in August 2008. As a result of the global financial crisis in mid-2008, the real depreciated 31.9% against the U.S. dollar, reaching an exchange rate of R$2.34 per US$1.00 by the end of 2008. In 2009, due to the recovery of the Brazilian economy at a faster rate than the global economy, the real once again appreciated 25% against the U.S. dollar, reaching an exchange rate of R$1.74 per U$1.00 by December 31, 2009. This recovery also happened in 2010, the real increased 3.4% in comparison to U.S. dollar, reaching the exchange rate of R$1.67 per U$1.00 in December 31, 2010. In 2011, the dollar reached its lower price on July 26, when it reached the level of R$1.53 per US$1.00, or an appreciation of 7.1% in the year. Yet, at the end of the year it showed a devaluation of 13.6% in the year, reaching an exchange rate of R$1.66 per U$1.00 on December 31. The depreciation of the real against the U.S. dollar could create additional inflationary pressures in the Brazilian economy and lead to increase the interest rates, which could negatively impact Brazilian economic growth as a whole, as well as the Companys financial condition and results of operations, besides limiting access to international financial markets and lead to governmental interventions, which could include the introduction of recessive policies. In the context of the current slowdown in global economic activity, the depreciation of the real against the U.S. dollar could also trigger a drop in consumer spending, as well as create deflationary pressures and result in lower economic growth. On the other hand, the appreciation of the real in comparison to the U.S. dollar and other foreign currencies in turn lead to deterioration in the Brazilian balance of payments and a drop in export-based growth. Depending on the circumstances, the depreciation or appreciation of the real could have a material adverse effect on the countrys economic growth, as well as on the Companys business and the market value of the Companys shares.

Events and the perception of risk in other countries, especially the United States and emerging market countries, may adversely affect the market price of Brazilian securities, including that of the Companys shares.
The market price of securities issued by Brazilian companies is affected to varying degrees by economic and market conditions in other countries, including the United States and other Latin American and emerging market countries. Therefore, investors reactions to developments in these other countries may have an adverse effect on the market value of securities of Brazilian issuers. Crisis in other emerging market countries may reduce investor interest in securities issued by Brazilian companies, including those issued by the Company. In the past, the development of adverse economic conditions in other emerging market countries resulted, in general, in capital flight and, as a consequence, in a decrease in the value of foreign investments in the country. The financial crisis originated in the United States during the third quarter of 2008 triggered a recession of global scale. This adversely affected the Brazilian economy and Brazilian capital markets, both directly and indirectly, and led to, among other things, fluctuations in the trading prices of securities issued by publicly owned companies, scarcity of credit, cut in expenditures, slowdown in the global economy, exchange rate volatility, and inflationary pressures. Any of these factors may negatively affect the market value of the Companys shares and make it more difficult for it to access capital markets and finance its operations in the future on acceptable terms, or at all.

The demand for the Companys services is directly linked to the volume of public investment in the engineering, construction and infrastructure sectors.
The public sector is generally involved in the implementation of large engineering and infrastructure projects in Brazil, either by means of direct investment in such projects or through financing agreements. For example, over the coming years, the Company expects that approximately R$955 billion will be invested between the 2011 to 2014 period to fund public construction projects linked to the Brazilian
23

governments PAC 2 program. According to estimates from BNDES, the public and private sectors are expected to invest R$3.3 trillion between 2011 and 2014, of which R$ 1.0 trillion in the industry and R$401 billion in infrastructure. The planned direct investments for the 2014 FIFA World Cup and the 2016 Olympic Games totaled R$47 billion by 2014, of which approximately R$11.5 billion for urban mobility, R$5.6 billion for stadiums and R$4.8 billion for airports, according to Minister of Sports. The Company believes that the involvement of the public sector will be the key in the viability of such enterprises and in the execution of such new projects. In Brazil, public investments have historically been influenced by macroeconomic, political and legal factors, which are all beyond of the Companys control. Such factors could determine, among other things, the suspension or cancelation of projects that require the involvement of the public sector. Any such suspension or cancellation could have a material adverse effect on the Companys clients operations and on the demand for its services. If estimates regarding the level of future investments in construction and infrastructure are not correct, or if such investments are not made, the Companys clients operations (and, consequently, the Companys financial condition and operations) may be adversely affected.

The nature of the services rendered by the Company requires to make significant financial and technical investments before knowing whether or not it will be hired.
Due to the nature of the services the Company provides, it is required to make substantial initial investments in the development of new processes, the provision of constant training to its employees and, in particular, the acquisition of machinery and equipment to be used in the provision of its services. Some of these investments are carried out before the Company knows whether its services will be used on a continuous, successive basis and it is exposed to the risk that significant initial investments will not generate the returns that are anticipated. The Company is particularly vulnerable to a sudden decrease in the level of demand for its services that would result in an increase in its spare capacity and leave its revenue-generating assets idle, which could have an adverse affect on its financial condition and results of operations.

All of the Companys business divisions face significant competition in the markets in which they operate.
The Company faces strong competition in all of the segments in which it operates. Moreover, the Company may be exposed in the future to additional competition from new market players, as well as from foreign competitors entering the Brazilian market. The Company operate in a fragmented market which demonstrates considerable potential for growth and is served by a substantial number of companies offering less sophisticated and, therefore, less cost services. The Companys clients decision to hire a particular service provider is influenced by a number of factors, including the quality of the services, the reliability of the contractor and its ability to offer innovative solutions, and the price charged for the services required. The Companys competitors are making substantial efforts to improve their market positions and the Company may lose certain clients to these competitors, including long-standing clients that regularly employ its services. Certain competitors of the Industrial Services division have more experience and greater scale in the provision of certain industrial maintenance services, and may have greater financial resources. If the Company is unable to effectively compete against these companies, its market share could decrease, which would adversely affect the Companys financial condition and results of operations. In addition, if construction companies and companies operating in the oil and gas sector create new inhouse departments to complement their core operations, so as to no longer require the Companys services (or even to compete with the Company), it may experience a reduction in the demand for its services, and a potential increase in competition, which may adversely affect its financial condition and results of operations.

24

The development of engineering solutions and technological innovations which add value to the Companys services is critical to the protection of its leading market position and to the expansion of its business.
Due to the nature of the Companys business, it must remain abreast of the latest engineering solutions and technological innovations in its industry. The Company must employ qualified personnel, maintain an adequate infrastructure, and expand relationships with suppliers that have a successful track record. Should the Company fail to provide value-added engineering solutions, or to buy or license new technologies developed by third-parties on acceptable terms, the services rendered by the Company could become outdated or obsolete in comparison to the services offered by its competitors. Any failure to remain at the technological forefront of the industry would adversely affect its relationship with clients and, consequently, its financial condition and results of operations.

h.

to the sectors regulation in which the issuer acts.

Costs related to laws and workplace safety regulations as well as those third-party professionals. Such costs can be relevant and impact adversely the Companys results.
As of December 31, 2011, the Company had 4,541 employees, most of them either based at its equipment warehouses or engaged in the assembly of equipment used in the Industrial Services division and in the provision of services offered by such division. Due to the nature of the services provided, both the Companys employees and employees of third parties face risks when executing its projects, which could result in serious injury or death. In accordance with existing labor laws and regulations, the Companys required to provide and ensure the use of safety equipment for its employees and other individuals working on its projects, under the Companys responsibility. If the Company fail to provide all necessary safety equipment and ensure its proper use, or if it works with companies that are not sufficiently committed to ensuring the safety of their staff, the Company could be deemed responsible for any accidents that take place at the worksites where it provides services. Any accidents at the worksites where it provides its services could potentially reduce the number of able bodied employees available to carry out its operations and would expose the Company to the payment of fines and penalties. Any changes to existing safety regulations may impose additional obligations on the Company and result in an increase in its expenses with respect to safety equipment and procedures. The Company cannot predict whether any such changes would have a significant impact on its operations. For example, changes imposing a reduced work day, for safety reasons, could result in a drop in employee productivity, therefore forcing the Company to hire additional staff. Similarly, provisions requiring the Company to install additional safety components could increase the cost of its equipment and, therefore, adversely impact its operating costs and results. In addition, the Company engaged a third-party labor provider to hire temporary employees during periods of rapid increases in the demand for the Companys services, particularly for the Companys Industrial Services division. As a result, the Company could be considered responsible for meeting any employment obligations relating to such professionals, or deemed to be their employer under the terms of existing laws and regulations, and would be subject to potential costs associated with failure to comply with workplace safety regulations with respect to such professionals. Besides, the editing of stricter legal and regulatory provisions regarding the use of outsourced personnel, or of provisions imposing additional obligations on the contractor of outsourced services, could increase the Companys labor costs and have a negative effect on its financial condition and results of operations.

The technical requirements and the use of the Companys equipments, as well as, the way which the Company renders its services, may suffer relevant changes due to the incident of drastic climate change. Moreover, the Companys inability to adapt to climate change may adversely affect its business and financial results. Additionally, the Company is subjected to several environmental laws and regulations that may become stricter in the future, as a response to the drastic climate changes, and may result in higher duties and greater capital investment.
25

Climate change, including flooding or erosion caused by increased rainfall, could adversely affect the technical requirements in the projects and equipments to which the Company is subjected to, the way in which the Company uses its equipment and the way it render its services. For instance, increased rainfall could interfere with the Companys ability to perform industrial painting services. In addition, variations in weather caused by climate change may lead to postponements in project schedules, which in turn may lead to a decrease in the demand for the Companys services. The Companys inability to adapt its operations to such climate change and maintain its quality standards from our equipment and services, may lead to a decrease in its market share, adversely affecting its business and financial results. The Companys operations are subject to several federal, state and municipal environmental laws and regulations, including protocols and international treaties to which Brazil is party. Such regulatory framework may become more stringent in the future due to, among other things, climate change. Compliance with the provisions of these laws and regulations is monitored by certain governmental bodies and agencies that are responsible for applying administrative sanctions in the event of the breach of any relevant provisions. These sanctions may consist of fines ranging from R$500 to R$50,000,000, result in the cancelation of our licenses and, ultimately, the temporary or permanent suspension of the Companys operations, among other penalties. Environmental laws and regulations may become stricter in the future, which may require the Company to make additional investments in compliance and, as a result, affect its existing investment program. Such changes may cause an adversely affect to its financial condition and results of operations. Besides, the failure to comply with such laws and regulations, such as operating without the necessary environmental licenses and permits, or failing to adequately dispose of residues arising from the Companys painting and equipment maintenance services, may result in the application of criminal and administrative sanctions, as well as the obligation to repair the alleged harm or pay penalties for any potential damage to the environment. Criminal sanctions may include, among other things, the arrest of the persons responsible for the breach, the revocation or restriction of tax incentives and the cancelation or suspension of credit facilities provided by public financial institutions. The Company could also be prohibited from providing services to the public sector. The application of any of these sanctions could have an adverse effect on the Companys revenues and prevent us from being able to raise capital in the financial markets. The introduction of additional environmental obligations in the future as a result of legal or regulatory changes or as a consequence of an increase in the environmental impact of the Companys operations, or failure to obtain any necessary environmental licenses and permits, may result in additional and substantial compliance costs and have an adverse effect on its business, financial condition and results of operations.

i.

to the foreign countries to which the issuer acts.

Not applicable, since the Company restricts its operations to Brazil. 4.2 Comments on the Companys expectations to reduce or increase its exposure to the risks factors The Company is constantly analyzing the risks to which it is exposed to and which may adversely affect its business, financial condition and results of operations. The Company is constantly monitoring changes in the macroeconomic and sector scenarios that can influence its activities through monitoring of key performance indicators. Currently, the Company has not identified the any scenario that can increase or decrease its exposure to the risks listed in the item 4.1 above. 4.3 Legal, administrative or arbitral significant and non confidential suits

The Company is part of a judicial and administrative proceedings in the civil, tax and social security, labor and environment, as described below. The Companys contingency provisions are recorded in the financial statements for the total amount of probable losses. On December 31st, 2011, the total value of cases involving contingent liabilities was R$52.4 million and the total value involved in processes with probable loss, according to its assessment and its legal counsel, was R$12.8 million, as indicated below:

26

Proceeding/Contingency 2009

Year ended December 31, 2010 (in thousands of R$)

2011

Civil proceedings Possible losses Probable losses

Tax and social security proceedings

1,547 803

772 430

2,349 440

Possible losses Probable losses Labor claims Possible losses Probable losses Other Possible losses Probable losses Provisions Judicial deposits

9,582 5,617

11,501 7,296

13,743 9.902

10,787 1,420

12,649 1,672

9,004 1,396

18 687 8,527 5,960

1,741 11,139 7,328

5,000 1,096 12,834 7,666

The Company believes that its provisions for legal and administrative contingencies are sufficient to cover probable losses. The Company describes below the main legal and administrative proceedings in which it is involved.

Civil Proceedings
The Company is defendant in 75 proceedings concerning civil liability and indemnification payments, regarding, above all, contract terminations and indemnification payments, whose total value was of R$ 2.8 million on December 31, 2011. Based on the advice of the Companys external legal counsel, as of December 31, 2011 it has recorded provisions of R$0.4 million to cover probable losses arising from these proceedings.

Tax and Social Security Proceedings

As of December 31, 2011, the Company was defendant in 91 tax proceedings for an aggregate amount of R$33 million. From this amount, R$9.9 million are provisioned, and the value from the net provision of judicial deposits and appellate was of R$4.8 million. Below is a description of its main tax proceedings:
Process n 2005.51.01.533217-9 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts Federal Justice 1st Instance 03/21/2006 Mills Formas e Escoramento Ltda. (succeeded by the Company) and Federal Union R$1,569,623.92 (on 03/21/07) Subject Matter: This is a Tax Foreclosure seeking the payment of tax liabilities substantiated in Tax Proceedings Nos. 15374.001299/00-95 (CDA No. 70.6.05.018933-01/ Installment Plan) and 15374.001300/00-72 (CDA No. 70.2.05.013557-18), filed by reason of the cancellation of expenses incurred by Mills (former Aluma), by

27

Chances of loss Analysis of impact in the case of losing the suit

reason of the supposed lack of proof of operating costs and expenses deducted from the profits earned for purposes of determination of the taxable income, in relation to the hiring of the company Mills do Brasil. Possible In the event of an unfavorable decision, the Company will have to pay the tax liabilities subject matter of the administrative procedures in question, in the updated amount of R$1.9 million (until December 31, 2011). Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results. -

Amount provisioned (if any)

Process n 2007.51.01.505428-0 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts Federal Justice 1st Instance 06/07/2006 Mills Indstria e Comrcio Ltda. (succeeded by the Company) and Federal Union R$759,205.70 (on 12/18/06) Subject Matter: This is a Lawsuit seeking the cancellation of the tax liabilities substantiated in Administrative Proceedings Nos. 13707.002177/93-71 (CDA No. 70.2.06.003889-75) (IRPJ) and 13707.002178/93-34 (CDA No. 70.6.06.007170-64) (FINSOCIAL). The taxpayer executed with its affiliate Mills Equipamentos Ltda a lease agreement of some equipment of its production. At first, the agreement provided that the amounts would be paid on a monthly basis and adjusted at the OTN rate. On January 5, 1998, the parties entered into a new agreement whereby the rent would be paid annually, but that the adjustment would still be made on a monthly basis. However, on August 3, 1998, there was the execution of the reratification agreement whereby the parties ratified the agreement that the payment would be annual and agreed that the adjustment would also be made at the average rate of OTN. The Tax Authority understood that the lessee should have paid, until January 5, 1998, the IRPJ and the CSLL levied upon the amounts supposed received by way of rent in the first seven months of the year. In the Companys defense, it claimed that no amount was due in the period, because according to the terms of the agreement executed with the affiliate the amount would only be paid to the Company at the end of the fiscal year, for which reason the taxable event of the said taxes had not yet occurred. Current stage: Waiting for the entry of judgment. Possible If the claim is held to be invalid, the Company will have to pay the tax liability disputed, in the adjusted amount of R$826 thousand (until December 31, 2010). Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Process n 2006.51.01.011682-5 Jurisdiction Federal Justice

28

Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts

1st Instance 06/07/2006 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and Federal Union R$1,352,277.35 (on 12/31/10) Subject Matter: This is an Action for Annulment of Tax Liability seeking the annulment of the tax liability claimed in Administrative Proceeding No. 13708.000745/2003-12 (CDAs Nos. 70.2.08.000115-81, 70.2.08.000116-62 and 70.6.08.000444-38), because a substantial part of the liability claimed refers to the tax on net income (ILL), which was deemed to be unconstitutional by the Federal Supreme Court, and that the full amount of the liability claimed is liable to cancellation because of the offset against the accumulated tax loss of the year. Current stage: Waiting for the judgment by the 1st Instance. Remote If the claim is held to be invalid, the Company will have to pay the tax liability disputed, in the adjusted amount of R$2.1 million (until December 31, 2011). Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Process n 2008.51.01.505089-8 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts Federal Justice of Rio de Janeiro 1st Instance June/25/2008 Mills Estruturas e Servios Ltda. and Federal Union R$1,946,671.65 (on May/26/08) Subject Matter: This is a Tax Foreclosure that seeks to compel the Company to pay the tax liabilities of IRPJ substantiated in Overdue Tax Liabilities Certificates (local acronym CDA) Nos. 70.2.08.000115-81; 70.2.08.000116-62 and 70.6.08.000444-38. Current stage: This has the same subject matter of the action for annulment of tax liability 2006.51.01011682-5 (mentioned in the previous schedule). On May 25, 2009, the Company presented a petition informing that it filed Incidental Provisional Measure No. 2007.51.01.031485-8 requesting the acknowledgment of the right to presentation of assets so that the liabilities subject matter of the CDAs in question do not prevent the issuance of the proper CND (local acronym of the Debt Clearance Certificate). Therefore, it requested the issuance of a Warrant for Levy of Execution upon the assets presented in the record of the Action for Provisional Remedy. Possible If the claim is held to be invalid, the Company will have to pay the tax liability, in the adjusted amount of R$2.1 million (December 31, 2011). Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Process n 18471.001569/2006-13

29

Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts

Receita Federal of Brasil (IRS)

2nd Instance December/15/2006 Jahu Indstria e Comrcio Ltda. (succeeded by the Company) and Federal Union. R$9,441,433.55 (12/31/2011) Subject Matter: This is a tax-deficiency notice issued by RFB seeking the payment of IRPJ and CSLL liabilities, in relation to the 1st, 2nd and 3rd Quarters of 2001 by reason of (i) supposed divergences with regard to the criteria used for the depreciation of fixed assets and (ii) supposed irregularities with regard to the deductibility of expenses with service providers. Current stage: The decision by the lower court was partially favorable, with the exclusion from the tax-deficiency notice of the liabilities of IRPJ and CSL with regard to the 1st, 2nd and 3rd quarters of 2001, for being barred by the statute of limitations, and accepts the claim by the Company with regard to depreciation. The Federal Government filed an official appeal and the Company filed a voluntary one. Waiting for the judgment by the appellate instance in CARF. Possible The Company must pay the tax liability in question if the tax-deficiency notice is considered to be valid, in the updated amount of R$9.4 million on 12/31/2011. Since this is an isolated fact, which is not a habitual practice of the Company, and considering the amount of the provision, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results. R$5,475,986.71

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

NFLD n 35.739.838-6 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts

Receita Federal of Brasil (IRS)

1st Instance May/23/2005 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and INSS (Social Security Administration) R$444,243.60 (on May/23/05) This is a Tax-Deficiency Notice seeking the collection of supposed deficiencies in relation to the contributions collected by the INSS (Social Security Administration) and intended for other entities and funds, especially the so-called education-salary. Current stage: We have filed an objection informing that a part of the education-salary liability has been paid into court, in the proper lawsuit. The case is pending disposition of the objection. Remote The Company will have to pay the tax liability in question, in the adjusted amount of R$840 thousand (on December 31, 2011), if it does succeed in proving that it has been deposited into court. The Company already duly pays the education-salary. Taking into account the amount involved in the lawsuit, the Company does not believe that an unfavorable decision will have a material adverse effect on its financial condition or operating results. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

30

Process n 12267.000047/2007-14 (NFLD n 35.739.839-4) Receita Federal of Brasil (IRS) Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts 1st Instance May/23/2005 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and INSS (Social Security Administration) R$1,378,410.22 (on May/23/05) This is a tax-deficiency notice seeking the payment of amounts supposedly not paid by way of contribution to SAT. In the Companys defense, we claimed that the amounts were deposited in Case No. 99.0012818-4 already converted into revenue for the Federal Treasury. We also claim that the tax assessment disregarded payments made by the Company. Current stage: The case is pending disposition of the objection. Remote The Company will have to pay the tax liability in question, in the adjusted amount of R$2.3 million (on December 31, 2011), if it does succeed in proving that it has been deposited into court. Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Process n 37280.000387/2006-17 (NFLD n 35.739.841-6) Receita Federal of Brasil (IRS) Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts 1st Instance May/23/2005 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and INSS (National Institute of Social Security) R$747,906.59 (on May/23/05) This is a tax-deficiency notice (NFLD n 35.739.841-6) seeking the payment of amounts supposedly not paid by way of social-security contributions, because the tax authority acknowledged the employment relationship between the members of Coopcel, a cooperative, and the Company. In its defense, the Company claims that the tax authority cannot acknowledge the employment relationship and that the tax liability has been barred by the statute of limitations. Current stage: The case is pending disposition of the objection. Remote In the event of an unfavorable decision, the Company will have to pay the tax liability in question, in the updated amount of R$1.4 million (on December 31, 2011). Since this is an isolated fact, which is not a habitual practice of the Company, the Company does not believe that an unfavorable decision would have a material adverse effect on its financial situation or on its operating results. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Process n 11330.000329/2007-30 (NFLD n 35.102.808-0) Receita Federal of Brasil (IRS) Jurisdiction

31

Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts

2nd Instance December/10/2001 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and INSS (National Institute of Social Security) R$262,723.43 (on October/29/03) Subject Matter: This is a tax-deficiency notice issued because the taxpayer supposedly did not make the withholding of 11%, by way of social-security contribution, levied upon invoices for services that had been rendered to it, as provided for by Law No. 9711/98. In its defense, the Company claims that it could not defend itself, because the tax-deficiency notice allegedly failed to list the services in relation to which there was no 11% withholding. It also claims that the company did not make the withholding only in those cases exempted by law (for example: services provided by companies that opt for the simple-taxation system). Current stage: Currently, the case is awaiting disposition of the voluntary appeal filed by the Company. Remote If the claim is held to be valid, the Company will have to pay the tax liability in question, in the adjusted amount of R$552 thousand (on December 31, 2011). Taking into account the amount involved in the lawsuit, the Company does not believe that an unfavorable decision will have a material adverse effect on its financial condition or operating results. R$ 206 thousand

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Process n 2005.51.01.026197-3 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts Federal Justice 2nd Instance September/21/2005 Mills do Brasil Estruturas e Servios Ltda. and INSS (National Institute of Social Security) R$967,953.94 (on December/10/01) Subject Matter: This is a Lawsuit seeking the termination of the tax liability subject matter of NFLD No. 35.102.802-1 (Education-Salary) because the respective amounts had been deposited in Provisional Remedy No. 97.0010128-2 Current stage: The Claim was deemed to be invalid. Currently, the case is awaiting disposition of the appeal filed by the Company. Possible The Company will have to pay the tax liability subject matter of NFLD No. 35.102.802-1, in the adjusted amount of R$1.7 million (on December 31, 2011). The Company already duly pays the educationsalary. Taking into account the amount involved in the lawsuit, the Company does not believe that an unfavorable decision will have a material adverse effect on its financial condition or operating results. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Labor Claims
The Company is defendant in 208 labor claims, and with the advisory of an external legal counsel, the Company has recorded provisions on the amount of R$1.4 million on December 31, 2011, to cover probable losses resulting from the labor claims filed against the Company.
32

The labor claims filed against the Company relate to the following matters: (i) payment of indemnifications for material damages; (ii) payment of risk, hazard, transfer and night shift allowances; (iii) length of lunch and shift breaks; (ix) payment of equal pay for equal work; (v) workplace accidents; (vi) re-hiring as a result of the development of professional illness; (vii) recognition of employment relationships; and (viii) existence of subsidiary (or joint and several) responsibility between the Company and its services providers, with respect to outsourced workers employed by such providers and allocated to providing services for the Company. Below, the Company included a structured summary of the major labor claims that it is part:
Action n 01316.2007.009.19.00.7 Jurisdiction Instance Date of filing Parties in the suit 9 Vara do Trabalho de Macei/AL 2nd Instance November/08/2007 Plaintiff: S.R.F. Defendant: Mills Estruturas e Servios de Engenharia Ltda. and Braskem S/A. Amounts, goods or rights involved Main facts R$ 990,000.00 (12/31/2011) The lawsuit filed by one of our former employees, concerning a claim for moral and pecuniary damages resulting from the disability caused by an alleged occupational disease, whose contingency is approximately R$1.0 million. The said labor claim was denied in first instance and, on December 2, 2009, the Appellate Labor Court of the 1st Region granted the appeal filed by the plaintiff, and ordered the payment of moral damages in the amount of R$15.0 thousand. The Company appealed for a review but it was denied. Possible Considering the denial by the lower court, and the possibility of loss, we do not see any greater impact on the Company. However, if there is any reversal in the Appellate Labor Court of the judgment entered by the lower court, the Company will have to pay the plaintiff some R$1.0 million. -

Chances of loss Analysis of impact in the case of losing the suit

Amount provisioned (if any)

Action n 0143400-71.2008.5.17.0009 Jurisdiction Instance Date of filing Parties in the suit 9 Vara do Trabalho de Vitria/ES 2st Instance December/19/2008 Author: Ministrio Pblico do Trabalho Defendant: Mills Estruturas e Servios de Engenharia Ltda., HZM Servios de Manuteno e Montagens Ltda. and ArcelorMittal S/A Amounts, goods or rights involved Main facts R$ 200 thousand This is a public civil action filed by the Labor Prosecution office with a plea for preliminary injunction seeking the suspension of business in the workplace (City of Serra, State of Esprito Santo), under penalty of payment of a daily fine of R$50,000.00, an award against Mills for the payment of collective moral damages, on account of the purported

33

violation of Regulation No. 18, in the amount of R$5.0 million. On 9/15/2011, was promulgated a sentence condemning the companies to adjust the safety systems of Vitrias branch, and dismissed the claim for indemnity for moral damage of R$50 million. On 12/2/2011, The Judgment of the Tribunal Regional do Trabalho do Esprito Santo, dismissed the defendant appeals and giving provision, in part, to the ordinary appeal of the Ministrio pblico(public prosecutors Officer) to condemn companies to pay indemnification for moral damage in the amount of R$ 200 thousand. On 12/9/2011, opposition claims by the company pending. Chances of loss Analysis of impact in the case of losing the suit Probable Considering the subject matter of the case, we understand that the validity of the claim could create a material precedent for the Company, in addition to the payments sought in the action. The estimated value of the condemnation by the lawyer is R$200 thousand (in 31/12/2011). -

Amount provisioned (if any)

Action n 01106. 5.134.05.00.1 Jurisdiction Instance Date of filing Parties in the suit

4 Vara do Trabalho (4th Labor Staff) of Camaari/BA

1st Instance October/24/2005 Author: Public Ministry of Labor Defendant: Mills Estruturas e Servios de Engenharia Ltda.

Amounts, goods or rights involved Main facts

R$437,0 thousand Compliance with legal quota regarding the employment of disabled workers. This public civil action deals with the allegation that we do not comply with the legal quota regarding the employment of disabled workers. The Public Labor Prosecution Office requested an injunction to compel our company to employ disabled workers in line with the minimum percentage set by the applicable legislation. The prosecutors also seek our conviction for collective punitive damages allegedly caused by our company. Our defense claims that the principal operations carried out by our company require the employment of persons capable of meeting rigorous physical demands, such as workers for the assembly of scaffolding structures, painters, high pressure water gun operators, and workers in the provision of insulation services. These activities are performed under very demanding physical conditions, which makes the employment of disabled workers impractical, as such workers would be exposed to a significantly higher risk of accident. As of the date of this reference form, no decision has been handed down in respect of this public civil action.

Chances of loss Analysis of impact in the case of losing the suit

Possible In the event of loss, the Company will have to pay the amount in dispute and will have to extend the number of employees that suffer from deficiency, under penalty of fine. According to the external consulting lawyer, the estimated value for the condemnation would be R$ 340 thousand (in 12/31/2011).

34

Amount provisioned (if any)

4.4 Judicial, administrative or arbitral awards, which are not under confidentiality, in which the company or its subsidiaries are part and whose appellees are administrators or former administrators, owners or ex-owners or investors of the company or its subsidiaries. Not applicable to the Company. 4.5 Relevant confidential lawsuit

To the present date, the Company is not part of any confidential lawsuit. 4.6 Judicial, administrative or arbitral lawsuits, repetitive or related, non confidential and based on similar legal facts and causes, which are not under confidentiality and which together, are relevant. Not applicable to the Company. 4.7 Other significant contingencies.

The Company is part of a police investigation initiated by the Bureau of Environment Protection of the State of Rio de Janeiro on July 5, 2006, for violation of Articles 54 and 60 of the Environmental Crimes Act, on grounds of alleged improper disposal of solid waste and liquids in Rio de Janeiro. The investigation is not complete, but the Company is carrying out works to remedy the deficiencies pointed out and ask for the environmental licensing of activities on site. The Delegacia de Meio Ambiente e produtos controlados of Osasco (Environment and controlled products Police) initiated the police inquiriy, based on the Police report dated October 18, 2011, to investigate the alleged practice of crime against the environment, provided for in Article 56 of Law 9.605/98, due to (i) irregularities in the artesian well, (ii) irregular use and storage of chemicals and (iii) irregular disposal of waste in the Company's subsidiary in Osasco/SP. The investigation has not been concluded yet, but the Company is now taking all measures to search, verify and correct the deficiencies pointed out, together with the police authority and the environmental agencies of the State of So Paulo. 4.8 Rules of the country of origin of foreign issuer and rules of the country in which the foreign Company's securities are held in custody, if different from the country of origin. Not applicable to the Company.

35

5.

MARKET RISKS

36

5.1

Description of the main market risks.

Interest Rate Risk

The Company's indebtedness is denominated in reais, subject to floating interest rates, particularly the Interbank deposit certificate - CDI and Long-term interest rate -TJLP rates. There is a risk that the Company might incur losses on account of interest rate fluctuations that increase the finance expense of loans and financing raised in the market. In December 31, 2009, 2010 and 2011, the CDI rate was of 8.6%, 10.6% and 10.9%, respectively, and the TJLP rate was of 6.0% during the same period. It is Company policy not to use any instrument to reduce its exposure to interest rate fluctuations. This is a market risk arising from macroeconomic and regulatory conditions to which all companies operating in Brazil are subject. The Company analyzes its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration refinancing, financing and hedging. Based on these scenarios, the Company defines a reasonable change in the interest rate. The scenarios are run only for liabilities that represent the major interest-bearing positions. See below the sensitivity analysis of potential interest rate fluctuations. Sensitivity analysis The following table shows the sensitivity analysis of the financial instruments, including the derivatives, describing the risks that could generate material losses for the Company, with the most probable scenario (scenario I), as assessed by management, considering the three-month horizon until the next financial information containing this analysis is due for disclosure. Two other scenarios are also shown, as required by the Brazilian Securities Commission - CVM, in Instruction No. 475/2008, in order to show deterioration of 25% and 50% in the risk variable considered, respectively (scenarios II and III):
Scenario I Interest rate risk Debt Description (probable) Scenario II +25% R$ (thousand) BNDES - TJLP Leasing - CDI Working Capital - CDI Debentures - CDI Promissory Notes CDI Increase in the indicator Increase in the indicator Increase in the indicator Increase in the indicator Increase in the indicator Total Variation Cumulative effect on income and stockholders equity, respectively 22,134 52,159 34,889 276,598 27,210 412,990 22,138 53,607 35,023 297,783 27,885 436.436 5.7% 23,447 22,142 55,058 35,155 318,849 28,561 459.765 11.3% 46,776 Scenario III +50%

The sensitivity analysis presented above considers changes in relation to the particular risk, maintaining constant other variables, associated with other risks.
Scenario I Rate Reference CDI (%) TJLP (%) Maintenance 11.00% 6.00% Scenario II +25% 13.75% 7.50% Scenario III +50% 16.50% 9.00%

1 Regarding interest risk, the Company's management considered as likely premise (scenario I) for its financial instruments to the maintenance of the Selic rate, consequently, the CDI rate also, since there is a direct relationship between the rates, and a rate increase as premise for the other two scenarios. 2 For financial liabilities related to loans and financing - BNDES, the Company's management considered as likely premise (scenario I) would be the maintenance of the TJLP for the next three months, since there is no evidence of a change in the short term, and a rate increase as a premise for the other two scenarios.

37

Inflation risk
The Company seeks to reflect inflation rates in the prices that are charged for its products and services. However, Brazilian laws and regulations provide that long-term agreements may only be adjusted for inflation once every 12 months. The main inflation indexes used by the Company to adjust prices under long-term agreements are IGP-M and IPCA. In addition, the Companys payroll is affected by salary increases negotiated under collective bargaining agreements, which are usually in line with increases in the main Brazilian inflation indexes. During 2010, the IGP-M index calculated by FGV was of 5.1%, while the IPCA index announced by IBGE was of 6.5%.

Exchange Rate Risk

The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and the euro. Foreign exchange risk arises from future imports of equipment, mainly telescopic handlers, aerial platforms and formwork. It is Company policy, conservatively, to eliminate 100% of cash risk related to exchange rate, since all of its revenue is received in Brazilian reais. As a consequence, the Company has entered into swap and NonDeliverable Forwards agreements with financial institutions for hedging purposes. All these contracts provide for a simple exchange of indexes under which the financial institution assumes the foreign exchange risk and the Company, in counterpart, undertakes to pay interest on the notional amount (corresponding to the original amount of its foreign currency liability). As a result from hedging operations, the Company had no exposure to exchange rate fluctuations as of December 31, 2009, 2010 and 2011. The Company had no exposure to the exchange rate for the motorized equipments already bought. However, since these equipments are not produced in Brazil, the Company is exposed to exchange rate for future investments in such equipments either to replace and/or increase its fleet. As seen below, the sensitivity analysis of possible fluctuations on exchange rates. Sensitivity analysis The following table shows the sensitivity analysis of the financial instruments, including the derivatives, describing the risks that could generate material losses for the Company, with the most probable scenario (scenario I), as assessed by management, considering the three-month horizon until the next financial information containing this analysis is due for disclosure. Two other scenarios are also shown, as required by the Brazilian Securities Commission - CVM, in Instruction No. 475/2008, in order to show deterioration of 25% and 50% in the risk variable considered, respectively (scenarios II and III):
In R$ thousand Scenario I Scenario II Scenario III Risk Instrument/operation Description (probable) +25% +50%

Exchange rate (USD)

Commercial commitments* NDF

Increase in the exchange rate Increase in the exchange rate

(69,253) 1,295 (67,958)

(86,566) 18,608 (67,958) 0%

(103,879) 35,921 (67,958) 0%

Total Variation Risk Exchange rate (EURO) Instrument/operation Commercial commitments * NDF Description Increase in the exchange rate Increase in the exchange rate

(206) (0)

(257) 51

(308) 102

38

Total Variation
*

(206) 0%

(206) 0%

(206)

Commercial commitments of equipment purchased in foreign currency, but not accounted for. The swap contracts are signed to exchange 100% of the risk of foreign currency (USD) to national currency (R$).

The sensitivity analysis presented above considers changes in relation to the particular risk, maintaining constant other variables, associated with other risks.
Scenario I Rate Reference US$ (R$/US$) Euro (R$/Euro) Maintenance Scenario II +25% Scenario III +50%

1.88 2.43

2.34 3.04

2.81 3.65

, : The Company's management considered as likely premise (scenario I) the maintenance of the exchange rate for the next three months and a rate increase as premise for the other two scenarios.

Risk of Price Fluctuation of Raw Materials and Imported Equipment

Increases in the price of commodities used for manufacturing the equipment necessary for the provision of the Companys services, such as steel and aluminum, at rates higher than those recorded by the Brazilian inflation indexes used for adjustments of the prices charged, may have an adverse effect on the Companys future profitability unless these increases can be factored into prices. Additionally, for imported equipment contracts, as is the case of the Rental Division, the exchange rate increases above inflation also have a negative impact on the Companys future profitability, until these increases can be factored into prices.

Credit Risk (Trade Receivables)

The Company periodically bills the outstanding amounts due by its clients for rentals and services, generally for periods of 30 to 45 days, with average receipt terms of 50 days. Accordingly, it is subject to the risk of default on accounts receivable. The default rates are relatively low, which can be attributed to the background of long relationships with clients and, in the case of the Jahu and Rental Divisions, the pulverized client and project bases. The Company's trade credit portfolio comprises primarily Brazilian clients. The Company records a provision for impairment when it judges that there is a risk of default on the amounts due. Client credit risk management is exercised by the Company's financial management, which assesses the clients' financial capacity to pay. This analysis is made prior to the effective commercial agreement between the parties and involves an individual analysis of each client, taking mainly the following information into consideration: (i) registered data; (ii) financial information and indicators; (iii) risk categories (SERASA methodology); (iv) majority interests and; (v) pending items and protests in Serasa. It is not Company practice to obtain financial guarantees from its clients to manage credit risks. The table below shows the items from Trade Receivables and Allowance for Doubtful Debts from the Company detailed by division and consolidated on the indicated dates:
2009 2010 (in R$ thousands, except percentages)
Trade Receivables Allowanc e for doubtful debts Trade Receivable s Allowanc e for doubtful debts

2011
Allowanc e for doubtful debts

Trade Receivable s

Heavy Construction Division Industrial Services Division Jahu Division Equipment Rental Events Division* Total

34,729 27,826 7,608 7,002 7,500 84,665

3,625 1,504 1,246 363 1,029 7,767

47,960 45,550 19,143 16,616 6,563 135,832

4,042 1,705 1,285 1,231 1,030 9,293

40,934 49,755 31,844 34,708 5,627 162,868

9,214 1,644 2,721 6,037 1,030 20,646

39

*Value to receive for the sale of the fixed asset from the Division events that was discontinued in 2008.

5.2

Policy description for managing market risks

a.

Risks for which protection is sought

The Companys activities are exposed to several financial risks (including risks of interest rate, inflation, exchange rate, price fluctuation from raw materials and imported equipment and credit risk). The risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge against certain risk exposures and has a policy not to participate in any trading of derivatives for speculative purposes. Risk management is carried out by the Finance department, under policies approved by the Board of Directors. The Finance department identifies, evaluates and protects the Company from financial risks in co-operation with the Company's operating units. The Finance department establishes principles for overall risk management, as well as for specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of housing surplus.

b.

Asset protection strategy (hedge)

The Company intends on using financial derivative instruments locally and abroad to manage the exchange and interest rate fluctuation risks. In accordance with the accounting principles generally accepted in Brazil, the derivative contracts are going to be recorded to the balance sheet based on the fair market value recognized in the revenues statements, unless in cases when the specific hedging criteria are met. The market value estimations are going to be held on a specific date, usually based on the mark-to-market.

c.

Instruments used for asset protection (hedge)

In order to protect equity from exposure to foreign currency commitments, the Company developed a strategy to mitigate the market risk. When applied, the objective of the strategy is to reduce the volatility of the desirable cash flow, maintaining the planned disbursement of resources. The Company considers management of these risks essential to support its growth strategy without potential financial losses reducing its operating income, as the Company does not seek financial gains from derivatives. Foreign currency risk management is carried out by the Financial Management and Directors, who assess the potential exposure to risks and establish guidelines for measurement, monitoring and management of the risks of the Company's operations. Based on this objective, the Company contracts derivative operations, normally swaps and NDF (Non Deliverable Forwards), with prime financial institutions (brAAA credit rating - national scale, Standard & Poor's or similar), to guarantee the commercial value agreed on ordering the item to be imported. Similarly, swap or NDF contracts should be contracted to guarantee the payment flow (amortization of principal and interest) of foreign currency financing. Under the Company's by-laws, any contract or assumption of obligation in excess of R$ 10,000 (ten million reais) must be approved by the Board, unless foreseen in the Business Plan. It is not necessary to contract hedge operations for amounts of less than R$ 100 (one hundred thousand reais), with maturities of less than 90 days. Other commitments should be protected against foreign exchange exposure. Swap and NDF transactions are carried out to translate future foreign currency financial commitments into reais. By contracting these operations, the Company minimizes the foreign exchange risk by leveling both the amount of the commitment and the exposure period. The cost of contracting the derivative is tied to the interest rate, normally to the CDI (Interbank deposit certificate) percentage. Swaps and NDFs maturing before or after the final maturity of the commitments may, in time, be renegotiated so that their final maturities are the same as - or close to - the final maturity of the commitment. In this way, on the settlement date, the result of the swap and the NDF may offset part of the impact of the exchange variation of the foreign currency against the real, assisting stabilization of the cash flow.
40

As derivatives, the monthly position is calculated by the fair value methodology, calculating the present value by applying the market rates that are impacted on the determination dates. This widely used methodology may result in monthly distortions in relation to the curve of the derivative contracted, however, the Company is of the opinion that this is the best methodology to use, as it measures the financial risk in the event of the need for early settlement of the derivative. By monitoring the commitments assumed and the monthly valuation of the fair value of the derivatives, it is possible to monitor the financial results and the impact on the cash flow and to ensure that the original objectives are achieved. The calculation of the fair value of the positions is provided monthly for management supervision. The derivative instruments contracted by the Company are intended to protect its equipment import operations against fluctuations in the exchange rate in the interval between placing the order and the corresponding formal receipt in Brazil. They are not used for speculative purposes. As of December 31, 2011, the Company had equipment purchase orders with foreign suppliers amounting approximately to US$ 36.9 million and EUR 84,300 (in 2009, such orders amounted to US$ 72.8 million and EUR 127,500), all of them with payments expected during 2012. In order to reduce the Companys exposure to exchange rate fluctuations between the date of the order and the date of the settlement of these obligations, the Company hired derivative instruments represented by swap contracts in the aggregate amount of R$68.0 million, which fair value on December 31, 2011, totalized R$2.8 million, as presented in the table below.
Notional Value Fair Value Receivable/ Payable Values Notional Value Fair Value Receivable/ Payable Values

Tipo NDF Dollar Term Puchase Contracted rate: 1.70 to 1.94 (USD) Contracted rate: 1.64 to 1.94 (USD) Euro Term Purchase Contracted rates : 2.22 (EURO) Contracted rates : 2.44 (EURO) Total

December 31, 2011

December 31, 2011 (in thousands R$)

134,712

(7,003)

(7,003) 67,958 2,842 2,842

238 134,950

(7,003)

(7,003) 206 68,164 (1) 2,841 (1) 2,841

The derivatives are evaluated by the market rate present value, in the base data of future flow determined by the application of contractual rates until maturity. For contracts with limiter or double index were considered, in addition, the embedded option in the swap contract. The Companys hedge operations are realized in order to seek protection against fluctuations in foreign currency of its equipments and machines importations. Such operations are classified as hedge accounting. The company ensures it effectiveness of these instruments with the Dollar offset methodology, which is commonly used by derivative market participants, and consists in comparing the present value, net of foreign currency exposure and Company commitments with the derivatives hired for such hedge. On December 31, 2011, there was no inefficiency in the results of the hedge operations of the Company. Considering the fact that the Company ensures the effectiveness of the realized hedge accounting operations, the gains and losses observed in these derivative operations are recognized in counterpart of the hedged asset (fixed asset) as part of the initial cost of the asset in the same moment of the accounting. In December 31, 2011, the amount of R$0.3 million was transferred from the net equity and deducted in equipments initial cost.

41

d.

Parameters used to managing these risks

Regarding the exchange rate risk, The Company's policy is to not be exposed to any commitments in foreign currency. For the interest rate risk, the Companys policy is to operate with floating interest rates, since their revenues also grow along with inflation. The Company does not use protection against the inflation risk caused by momentary mismatch between its revenues and costs.

e. If the Company uses various financial instruments with various objectives for asset protection (hedge) and what these objectives goals are
The Company operates financial instruments in order to maintain the price of imported equipments and, consequently with foreign currency prices, in Brazilian reais.

f.

Organizational structure for risk management control

The risk control politics and procedures are defined directly through the Companys Board of Directors and are implemented by the Companys board of Executive Officers. The Board of Directors are also responsible for monitoring the fulfillment of these practices.

g. Adequacy of the operational structure and internal controls to verify the effectiveness of the adopted policy
The Companys Board of Directors analyzes its operational structure and intern controls, and believes that the policies and procedures of adopted controls are appropriate to the Companys operational structure. In fiscal years ended in December 31, 2009, 2010 and 2011, the opinion of independent auditors did not identify deficiencies in those controls. 5.3 Significant changes in the main market risks.

In the fiscal years ended December 31, 2009, 2010 and 2011, there were no events that could significantly change the main market risks to which the Company is exposed. 5.4 Other information that the Company deems relevant.

There is no further relevant information about this item "5".

42

6.

COMPANY HISTORY

43

6.1

Constitution of the Company

The Company was established on December 1, 1980 as a limited liability company. On January 29, 2009, the Companys shareholders approved a corporate transformation of the Company, which became a privately held corporation. The first company of Mills group, named Aos Firth Brown SA was established in 1952 in the city of Rio de Janeiro, State of Rio de Janeiro, in the form of privately held corporation. 6.2 Company Lifetime

Undetermined. 6.3 Brief Company History

The Company was formed in 1952 by the Nacht family, as a scaffold and shoring company which provided services to the civil construction sector. Mr. Andres Cristian Nacht was a member of the Companys management team from 1969 to 1998, being president director from 1978 till 1998. In 1998, Mr. Andres Cristian Nacht became Chairman of the Board of Directors of the Company, position that occupies till this Reference Forms date. In the 70s and 80s, the Company had substantial growth due to the significant civil construction and industrial sectors expansion in Brazil. Among its activities from this period can be highlighted the construction of the Rio-Niteroi Bridge (1971), the Itaipu Hydroelectric Plant (1979) and the first Brazilian oil drilling platform (1983), among other projects. During this period the Company made important partnerships with international companies that cooperated with the Companys development. From 1974 to 1986, GKN plc, a large British conglomorate, was the Companys shareholder, strengthening the beginning of good governance and credibility. In 1980, the Company signed a partnership with the Canadian company Aluma Systems Inc., the Aluma Systems Concrete Forms and Formwork Ltda., which had as main objective the introduction of aluminum forms in the civil construction sector in Brazil which lasted until 2001. In the 90s, while seeking to expand the Companys portfolio of services, it made new strategic partnerships. In 1996, the Company entered into a licensing contract with the German company NOESchaltechnik Georg Meyer-Keller GmbH, to produce and supply modular steel and aluminum panels formwork to the Brazilian civil construction market. In 1997, the Company entered into a joint venture partnership with the American company JLG Industries, Inc., to begin activities in the equipment rental sector in Brazil. In 2001, the Argentine company Sullair Argentina S.A., replaced JLG Industries, Inc. as the Companys partner in the in the industrial equipment rental venture, and subsequently acquired its stake in 2003. In 2007, the private equity funds, Peninsula FIP, managed by IP, and the Natipriv Global L.L.C., managed by the Axxon Group, became the Companys shareholders, acquiring, each one, 10% of the Company for R$20 million. The resources from these investments were used, mainly, to acquire equipment. In 2008, the Company returned to its activities in the rental segment in an organic way, with the establishment of the Rental Division, and suspended the operations of its Events Division, which was responsible for providing temporary structures, such as such as outdoor stages and grandstands for the sports and entertainment segment, as an objective to focus on the segments where it has competitive advantages. Also in 2008, the Company acquired Jahu Indstria e Comrcio Ltda., which became the Jahu Division, focused on providing engineering services to the residential and commercial civil construction industry, complementing its activities in the Heavy Construction segment.

44

The Companys IPO was on April 2010, with a transaction totaling R$685 million, of which R$411 million related to the primary offering that, consequently, were used to enable its growth plan. Shortly after the offer, the Companys free float were of 48%. In October 2010, after the expiration from the lock-up period, due to the IPO, the private equity funds, Peninsula FIP and Natipriv Global L.L.C., sold the joint participation of 6.2% of the Companys capital, increasing its free float to 57.2%. On January 19, 2011, the Company entered into a purchase and sales agreement to acquire 25.0% of the voting and total capital stock of Rohr S/A Estrutura Tubulares (Rohr), a privately held company specialized in access engineering and solutions for civil construction, for R$90.0 million. This strategic acquisition will enable the Company to broaden its exposure to the sectors it serves, especially in the areas of infrastructure and the oil and natural gas industry. In September 2011, there was a rise in the stake held in Rohr to 27.5%, resulting from the repurchase by Rohr of 9% of its shares held as treasury stock. In May 2011, the Company entered into a purchase and sales agreement to acquire 100% of the voting and total capital stock of GP Sul, one of the largest players in the suspended scaffold rental market to residential and commercial construction in the state of Rio Grande do Sul, for R$5.5 million, which was merger into the Company in August 2011. This strategic acquisition, according to Managements opinion, enabled the Company to become the leader in the suspended scaffold rental market in the state of Rio Grande do Sul and to broaden its exposure to the residential and commercial construction market in the South region, in line with the geographic expansion plan of Jahu - Residential and Commercial Construction division. 6.4 Date of registration with the CVM

April 14th, 2010. 6.5 Major corporate events which the Company or any of its subsidiaries or affiliates have gone through CORPORATE EVENTS AND RESTRUCTURING

Acquisition of Kina Participaes Ltda. and Jahu Indstria e Comrcio Ltda

In June 2008, the Company acquired Kina Participaes Ltda., or Kina, and its wholly-owned subsidiary Jahu Indstria e Comrcio Ltda., or Jahu Indstria, for R$60.1 million. Jahu Indstria, a provider of engineering solutions and shoring, scaffolding and access equipment for the residential and commercial construction projects. The results of operations of Kina and Jahu Indstria have been included in the Companys combined financial statements from July 1, 2008. Kina and Jahu Indstria were merged into the Company on August 30, 2008, and established as the Jahu division. As a result of the acquisition of Kina and Jahu Indstria, the Company registered a goodwill of R$42.3 million, reflecting the difference between the acquisition price and the book value of such companies. The Company believed such goodwill was justified based on its expectations of future revenue to be generated by the acquired companies. The premium paid in connection with the acquisition was amortized until December 31, 2008.

Corporate Restructuring
Between 2008 e 2009, the Company underwent a corporate restructuring, that included the conversion of the Company into a Brazilian corporation (on January 29, 2009); and the merger of the Companys subsidiaries Mills Indstria e Comrcio Ltda., Mills Andaimes Tubulares do Brasil S.A. and Itapo Participaes S.A. into the Company (on January 30, 2009).

45

Increase of Capital from the Company and Staldzene

Due to the exercise of the stock option granted under the Special ex-CEO Plan, the shareholders of the Company and Staldzene Empreendimentos e Participaes S.A. (Staldzene) approved, on March 12, 2010, a capital increase from both Companies of R$ 323.8 thousand, through the issuance by the Company of 153,690 shares and 24,809,032 shares issued by Staldzene. The capital increase of the Company was fully subscribed by Staldzene, while the capital increase of Staldzene was fully subscribed by the beneficiary of the Special ex-CEO Plan.

Corporate rearrangements involving Staldzene and Nacht Participaes

On March 18, 2010, Staldzenes shareholders, the Companys controlling shareholder, ratified the reduction of the share capital of that Company, which was approved at the Extraordinary General Meeting held on December 4, 2009. The reduction was of R$13.3 million, with the distribution of 6,307,457 shares of the Company to Staldzenes shareholders, disproportionately distributed to the participation held by those shareholders. Also on March 18, 2010 shareholders of Nacht Participaes S.A. (Nacht Participaes), controlling shareholder of Staldzene, ratified the reduction of the share capital of that Company approved at the Extraordinary General Meeting held on December 4, 2009. The reduction was of R$13.3 million, with the distribution of 6,307,457 shares of the Company to Nachts shareholders, disproportionately distributed to the participation held by those shareholders. On September 30, 2010, Staldzene had its share capital decreased after capitalizing intermediate profits and part of the legal reserve. The share capital reduction occured by transferring a certain quantity of Mills shares, which are currently owned by Staldzene, to Staldzenes shareholders. Staldzene participation in the Companys total and voting capital was reduced in 6.7%, from 46.0% to 39.3%. On November 30, 2010, Staldzene was extinguished due to a corporate restructuring. Nacht merged Staldzene, succeeding it in all its rights and obligations. As a result, Nacht becomes Mills direct controlling shareholder with 39.3% of the total and voting capital stock. In February 2011, Nacht Participaes reduced its capital stock through the delivery of shares issued by the Company currently held by Nacht to some of its shareholders, the transaction was completed on April 18, 2011. In order to regulate the right to vote and the transfer of shares of Nacht Participaes and the Company, the shareholders of Nacht Participaes celebrated a Shareholders Agreement, on February 11, 2011, date prior to its capital reduction and thus including all of its former shareholders. The capital reduction and the execution of the Shareholders Agreement have not led to any change in management structure or in control of the company, which continues to be owned by the Familia Nacht (Nacht Family), in the same proportion of 39% detained earlier. Additionally, this operation did not involve change in number of shares or in the value of total capital of the Company.

Primary offering and secondary distribution of shares

The Company with some of its shareholders promoted primary public offering of 37,037,037 shares issued by the Company and secondary public offering of 14,814,815 shares held by selling shareholders. The Offer Shares have been traded on the Novo Mercado segment of BM&FBOVESPA since April 16, 2010. On May 14, 2010, the leading coordinator of the public offer fully exercised the option of placing additional 7,777,777 common shares owned by certain selling shareholders. The shares subject to such allotment will be traded on the Novo Mercado segment of BM&FBOVESPA on May 19, 2010. There was no increase in the capital of the Company due to the exercise of the over-allotment option.

Acquisition of 25% of Rohr S/A Estruturas Tubulares

46

On January from 2011, the Company entered into a purchase and sale agreement to acquire 25.0% of the voting and total capital of Rohr S/A Estrutura Tubulares (Rohr), company specializing in access engineering and the provision of construction solutions, for R$90.0 million. With this strategic acquisition, the Company, expands its exposure to the sectors it serves, mainly in infrastructure and oil & gas industry.

Acquisition of 100% of GP Andaimes Sul Locadora Ltda

In May 2011, the Company entered into a purchase and sales agreement to acquire 100% of the voting and total capital stock of GP Sul, one of the largest players in the suspended scaffold rental market to residential and commercial construction in the state of Rio Grande do Sul, for R$ 5.5 million. This strategic acquisition enable the Company to become the leader in the suspended scaffold rental market in the state of Rio Grande do Sul and expanded its exposure to the residential and commercial construction market in the South region, in line with the geographic expansion plan of Jahu Residential and Commercial Construction division. On August 1st, 2011, was approved, in Extraordinary Shareholders Meeting, the merger of GP Sul by the Company, in the Protocol and Justification terms, without a capital increase and without the issuance of new shares. The objectives of the merger were (i) optimize and centralize the activities developed by GP Sul in the Companys management, therefore, retionalizing the operations and consequently reducing costs; and (ii) take advantage of the tax benefit resulting from the amortization of R$ 4.7 million generated in its acquisition of at least five years, as from the 2011 fiscal year.

Increase of the Companys Capital

On July 27th, 2011 was approved, in Board of Directors Meeting, the increase of the Companys capital, totalizing on the amount of R$1,548,424.09, due to the exercise of stock option, according to the Companys Stock Option Plan (1/2010), archived in the Companys headquarters ("Programa de Outorga de Opes").There was issuance of 128,287 new common stocks. On September 23th, 2011 was approved, in Board of Directors Meeting, the increase of the Companys capital, totalizing on the amount of R$124,637.58, due to the exercise of Companys Special TopMills Plan (Plano Especial Top Mills) ans Companys Special Mills Plan (Plano Especial Mills). There was issuance of 66,626 new common stocks. On the same period was approved the cancellation of 99,140 common shares, book-entry shares, with no par value of the Company, held in treasury, due to reimbursement payment to shareholders who exercised their withdrawal rights arising from the resolution passed by the Extraordinary Shareholders Meeting held on August 1, 2011. On October 24th, 2011 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$790,329.68, due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2010"). There was issuance of 65,642 new common stocks. On January 24th, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$398,490.09, due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2010"). There was issuance of 32,583 new common stocks. On February 28th, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$4,227.33 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2010"). There was issuance of 339 new common stocks.

47

On April 2nd, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$112,171.78 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Plano Especial TopMills "). There was issuance of 47.131 new common stocks. On April 24, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$4,613,384.16 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2010"). There was issuance of 371.448 new common stocks. Also on April 24, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$892,862.10 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2011"). There was issuance of 44.421 new common stocks. On July 2nd, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$31,276.80 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Plano Especial TopMills). There was issuance of 13,032 new common stocks. On August 9, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$886,108.00 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2010"). There was issuance of 70,550 new common stocks. Also on August 9 , 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$20,000.00 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 1,600 new common stocks. Also on August 9, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$1,633,370.82 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 80,422 new common stocks.

Capital Reduction of Nacht Participaes S.A.

The Company was informed, on December 28, 2012, by Nacht Participaes S.A. (Nacht Participaes), which resulted in the transfer of all shares issued by Mills held by Nacht Participaes to its shareholders, in complementation to the notification sent by Nacht Participaes on October 30, 2012, announcing the approval of such capital reduction. According to the terms of such notification, upon the effectiveness of the aforementioned capital reduction, after the 60-day statutory period provided by article 174 of Law 6,404, of December 15, 1976, as amended, all 27,421,713 (twenty-seven million, four hundred and twenty-one thousand, seven hundred and thirteen) shares issued by Mills formerly held by Nacht Participaes, were transferred to Nacht Participaes' shareholders, proportionally to their ownership interest in Nacht Participaes capital stock. As a result of such transfer, the shareholders Andres Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kjellerup Nacht, and Francisca Kjellerup Nacht, inform that they currently hold, directly, 27,421,713 (twenty-seven million, four hundred and twenty one thousand, seven hundred and thirteen) common nominative shares with no par value, issued by Mills, representing 21.7% of Mills capital.

48

As per the terms of such notification, Nacht Participaes also informed that neither the capital reduction, nor the related transfer of the shares issued by Mills, resulted in any change of Mills' corporate control, which, before the capital reduction, was formerly exercised jointly, by Nacht Participaes, by its shareholders and by Snow Petrel S.L., and, after the capital reduction, will be exercised by Nacht Participaes' shareholders jointly with Snow Petrel S.L. Such shares remains encumbered and subject to the terms of the "Shareholders Agreement of Nacht Participaes S.A.", executed on February 11, 2011, as amended, which also applies to Mills. The above mentioned shareholders have also reported on this date, that (i) except for the Shareholders' Agreement, are not parties to any agreement or contract regulating the exercise of any voting rights or the purchase and sale of any securities issued by Mills, and (ii) they do not hold any other shares, warrants, subscription rights of shares, call options nor convertible debentures into Mills shares.

Dissolution of Jeroboam Investments LLC

The Company was informed, on March 14, 2012, by Snow Petrel S.L. (Snow Petrel), a company headquartered in Barcelona, Spain, at Calle Johann Sebastian Bach 20, 3rd floor, and registered with the CNPJ/MF under n. 14.740.333/0001-61, of the transfer of all common shares, book-entry shares, with no par value issued by Mills held by Jeroboam Investments LLC (Jeroboam) for Snow Petrel, due to the dissolution and consequent extinction of its wholly owned subsidiary Jeroboam. Therefore, Snow Petrel came to hold 19,233,281 (nineteen million, two hundred thirty-three thousand, two hundred eighty-one) shares of Mills, representing 15.3% of its capital stock. Snow Petrel also reported that: (a) it does not hold, directly or indirectly, including through a person connected to it, other shares issued by the Company, subscription warrants or convertible debentures, subscription rights or an option to purchase shares issued by the Company; (b) due to the transfer of the shares, Snow Petrel will succeed Jeroboam as a party to the Nacht Participaes S.A. Shareholders Agreement executed on February 11, 2011; (c) Snow Petrel, as was Jeroboam until its extinction, is controlled by Sr. Nicolas Nacht; (d) Snow Petrel intends to continue to hold shared control of the Company, this being the main objective of its participation; and (e) since all of the capital of Jeroboam was already held by Snow Petrel, the transfer discussed in this notice does not impact, in any way, control of the Company.

Other Events
On June 21 , 2012 was approved, in the Board of Directors Meeting, the removal of 4,000 registered common shares with no par value, held in treasury, as a result of the appraisal rights extended to dissenting shareholders in connection with the resolutions passed at the shareholders meeting held on th April 20 , 2012. 6.6 Bankruptcy filings based on relevant values, or judicial or extrajudicial recovery of the Company Not applicable. 6.7 Other information that the Company deems relevant.
th

There is no further relevant information about this item "6.

49

7.

COMPANYS ACTIVITIES

50

7.1 Summary of Company and Subsidiary activities According to information released in 2011 by the magazine "O Empreiteiro" and by the IRN - 100 (International Rental News) publication, the Company believes to be one of the specialty engineering services company and the largest provider of temporary concrete formwork and tubular structures and motorized access equipment for the Brazilian market. The Company also serves the industrial services market (access, industrial painting and thermal insulation) being one of the major players in this market. The Company offers its clients specialized engineering services, providing differentiated solutions, skilled labor and equipment that are essential to large infrastructure projects, residential and commercial construction and industrial maintenance and installation. Customized engineering solutions include planning, design and implementation of the temporary structures for civil construction (such as concrete forms, shoring and scaffolding), industrial services (such as access, painting and thermal insulation for construction and maintenance of industrial sites) and motorized access equipments (such as aerial platforms and telescopic handlers), as well as technical assistance and skilled labor. During 59 years of history, the Company has developed relationships with most of the largest and most active Brazilian companies in heavy construction, residential and commercial construction and industry sector. Additionally, as the services were provided on a consistent, timely, reliable, and quality manner, observing the high safety standards, the Company acquired a strong reputation, as certified by the "O Empreiteiro" magazine published in 2011, that qualified it as one of the leading companies in providing specialized engineering services in Brazil. The Company believes that the sectors in which it operates will have a strong growth in the coming years due, among other things, (i) the favorable macroeconomic fundamentals and the increasing availability of credit in Brazil, (ii) the significant investment in infrastructure projects, financed with the Brazilian Federal Governments growth program, Programa de Acelerao do Crescimento (PAC), estimated in R$955 billion between 2011 to 2014, according to the Report of the 3rd PAC2 balance released in March 2012, (iii) to the Federal Governments low-income home building program (Minha Casa, Minha Vida), with on the amount of R$278 billion in 2011, included in PAC, (iv) to the massive investments needed for the World Cup of 2014 and the 2016 Olympics Games, estimated in R$ 47 billion until 2014, according to the Minister of Sport; and (v) the need for significant investment in various sectors of the Brazilian industries, including oil and gas and petrochemical. According to the provided data from the BNDES, are estimated in public and private investments in the period from 2011 to 2014 on the value of R$ 3.3 trillion, of which R$ 1 trillion in the industry and R$ 401 billion in infrastructure in Brazil. The services are offered by four divisions: (i) Heavy Construction Division (heavy construction, largesized, such as infrastructure), (ii) Jahu Division (residential and commercial construction), (iii) Industrial Services Division (industrial maintenance and installation), and (iv) Rental Division (rental of motorized access equipments).
2009 Heavy Construction Division Net revenue (in thousands of R$) Net income (in thousands of R$) Net margin(1) Industrial Services Division Net revenue (in thousands of R$) Net income (in thousands of R$) Net margin(1) Jahu Division (2) Net revenue (in thousands of R$) Net income (in thousands of R$) Net margin(1) Equipment Rental Division Net revenue (in thousands of R$) Net income (in thousands of R$) 146,210 35,995 24.6% 141,412 3,241 2.3% Year ended December 31 2010 2011 154,270 39,882 25.9% 195,396 12,569 6.4% 131,638 20,066 15.2% 214,783 3,204 1.4%

62,177 17,364 27,9% 54,934 11,555

105,151 26,041 24.8% 95,067 24,791

155,761 28,188 18.1% 175,410 39,373

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Net margin(1)

21%

26.1%

22.4%

________________________________ Heavy Construction Division

(1) Represents net income divided by net revenue of each division.

With R$131.6 million of net revenue in 2011, the Company estimates, according to data published by the O Empreiteiro magazine in 2011, that its Heavy Construction division is Brazils leading provider of specialty engineering solutions and equipment in revenue. In this segment, the Companys focus is directed to large engineering projects, including infrastructure projects toward the logistics sectors (specially railways, underground urban networks, highways, airports, ports and shipyards), social and urban infrastructure (including sanitation networks) and energy (primarily regarding hydroelectric, thermoelectric and nuclear plants), besides the industrial and large building construction projects. Such projects are characterized by long-term (usually over one year), usually developed by the major construction companies in Brazil. The Company offers to the clients of the Heavy Construction division customized engineering solutions according to the specific characteristics of each project, the peculiarities of the construction or development location, and the complexity of the work to be undertaken, which the Company believes helps to facilitate execution and reduce costs. Given the Companys extensive experience in the sectors in which the Heavy Construction division operates, at the request of its clients the Company often participates in the initial studies to help prepare bidding proposals for large engineering projects. The Company believes that its main competitive advantages are its expertise, agility, reliability, quality and safety standards, as well as its ability to provide equipment on a large scale, factors that contribute to the reduction of overall duration and costs from its clients projects. The Company provides services throughout the Brazilian territory and also in international projects from its customers, providing high value service and providing equipment. The Company has a history of long-standing relationships with almost all of the largest and best-known companies in the construction sector, including Construtora Norberto Odebrecht S.A., Camargo Corra S.A., Andrade Gutierrez S.A., Construtora OAS Ltd. and Construtora Queiroz Galvo S.A. The Companys extensive track record includes participation on several of the largest and most important infrastructure projects in Brazil, such as the construction of the city of Braslia (Brazils capital), the Rio de Janeiro-Niteri Bridge and the Itaipu hydroelectric plant. More recently, the Company assisted in the construction of the State of So Paulo Beltway (Rodoanel), the subway systems in the cities of Rio de Janeiro and So Paulo, the Santos Dumont and Congonhas airports in the cities of Rio de Janeiro and So Paulo, respectively, the Santo Antnio and Jirau hydroelectric plants in the north of Brazil and the Joo Havelange Olympic Stadium in the city of Rio de Janeiro. Typical contract terms for this division range from six to 24 months, as the services that the Company provides are critical during an extended phase of major civil construction projects. In order to facilitate the implementation of solutions that the Company idealizes, its offered to the clients, through rental contracts and in some cases sales, a wide range of equipments, including concrete forms and shoring structures, which include projects and technical studies, technical support and necessary training for its proper use. Taking into account the specific needs from a particular project, there is flexibility to hire the manufacture of special shaped equipments for specific construction works. The Companys clients generally use their own employees to implement the solutions developed by the Heavy Construction division. However, for complex projects or at the request of its clients, the Company is able provide labor for the assembly and disassembly of its equipment. Due to the complexity and size of the projects in which the Heavy Construction division is engaged, revenues for this division depend significantly on the volume of investment in large-scale engineering projects, primarily by the public sector, and on availability of credit for such projects.

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The Company believes that the favorable long-term macroeconomic fundamentals in Brazil and the need for investments in large infrastructure projects, including investments under the Brazilian governments PAC program and those related to the 2014 FIFA World Cup and 2016 Olympic Games, as well as future projects with the objective of overcoming the bottleneck of Brazilian infrastructure deficiencies, represent a major opportunity for future growth. The chart below, presents the financial information for the Heavy Construction Division on the indicated periods:
Year ended December 31 2010 154,270 73,573 47.7%

Heavy Construction Division Net revenue (in thousands of R$) EBITDA (in thousands of R$)(1) EBITDA margin(2)

2009 146,210 73,651 50.4%

2011 131,368 57,823 44.0%

__________________________________________________________

(1) EBITDA is a non-GAAP measurement adopted by the Company. The calculation of the EBITDA consists of our operating results before financial expenses, from the depreciation and goodwill. The EBITDA is not a Brazilian, IFRS or US GAAP measure, have no standardized meaning and our definition may not be comparable to that used by other companies. The Company uses the EBITDA to measure its performance. The EBITDA should not be considered as alternatives to net income, as an indicator of our operating performance, or as alternatives to cash flow as an indicator of liquidity or debt payment capability. (2) EBITDA from the Division divided by its net revenue.

Industrial Services Division The Industrial Services division is focused on the provision of services to the oil and gas sector, as well as to the chemical and petrochemical, naval, steel, pulp and paper, and mining industries. The Industrial Services division was established in the 1980s with the recognition that certain equipment used in its civil construction projects could also be employed to provide access to the structures and facilities of large industrial plants. At that time, the Company began renting access equipment, such as scaffolding systems, to carry out maintenance work in industrial plants, rapidly, expanding its services in the industrial sector to include assembly and disassembly, a sector that the Company believed could easily exploit in view of its past expertise in civil construction, and in sequence, it also began offering specialized maintenance services, in particular, industrial painting and thermal insulation, which started to compete with companies that had regularly rented the Companys access equipment for these purposes of providing such surface treatment services and helping its clients manage their costs more effectively as they were able to reduce the number of suppliers contracted for the provision of such services. This way, the Industrial Services division provides the equipment and also the labor required for the provision of its services, being labor-intensive. Based on data published on 2011 by the O Empreiteiro magazine, the Company believes to be one of Brazils major players in providing structures designed to provide access for personnel and materials during the assembly of equipments and pipes, during the construction of industrial plants, as in the maintenance phase, preventive and corrective. The Company also offers industrial painting services, surface treatments and thermal insulation. The Industrial Services Division works, generally, together with the industrial contractor or the plants maintenance department in planning, erecting and dismantling structures, when and where they are needed, and performing painting and insulation, with own labor, as a way to guarantee the quality and safety of its execution. The contracts from the Industrial Services Division with its clients are usually long-term, from one to three years, being able to be renewed at the end of the contracted period. On most cases, this Division is generally paid based on units of finished services or in service levels, such as meters of erected scaffolding, or square meters of painted or insulated surface, being able to hire on a man-hour based price.
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Currently, the Company provides two types of services: Maintenance. Most of the revenue from this division, 73.7% of net revenue in 2011, are from maintenance services in existing plants and facilities on a continuous basis, where most contracts have from one to two years term, which are often successively renewed for equal terms. Additional revenue is generated by the provision of scheduled maintenance services usually carried out once a year and which generally require an extended interruption of its clients operations. Because its clients necessarily suffer losses as a result of any extended interruptions, the Company believes that it has a competitive advantage based on its proven ability to provide maintenance services quickly and safely, as evidenced by its high rate of repeat business. New Plants. The Company also offers services in connection with the assembly of new industrial plants, oil and gas platforms and vessels, which are often provided as a natural extension of the services rendered by the Heavy Construction division. The revenue generated through the assembly of new projects and structures represented 26.3% of the total revenue of the Industrial Services division in 2011. The Company expects that future investments in the sectors in which the Industrial Services division operates, in particular the petrochemical and oil and gas sectors, will lead to a significant increase in revenue generated from assembly services rendered by the Industrial Services division. The Company also seeks to develop long-term relationships with its new plants clients, with the objective of establishing agreements for the provision of maintenance services. The Industrial Services division is present in the main industrial centers in Brazil (the states of Rio de Janeiro, So Paulo, Minas Gerais, Bahia, Pernambuco and Rio Grande do Sul), and has a long history of developing innovative solutions and making on-time or early delivery of projects, including with respect to deep sea oil platforms. The Company believes that the Industrial Services divisions clients value its reliability, consistent quality and award-winning safety performance. These qualifications have yielded high client renewal rates (86% in 2011), and have allowed us to develop long-lasting relationships with clients such as the corporate groups Dow do Brasil, Braskem and Fibria, for whom the Company has worked continually for up to 15 years. Clients seek the Company for expert, fast and flexible delivery of equipment and highly skilled installation, as well as in-depth understanding of local needs. The main sectors served by the Industrial Services division are oil and gas, petrochemicals, steel, paper and pulp, mining, and naval. The Companys clients include some of the largest industrial groups in Brazil, such as Arcelor Mittal, Braskem, Companhia Siderrgica Nacional, Dow do Brasil, Petrobras. The Industrial Services division has significant synergies with the Heavy Construction division. After the completion of the concrete structures in large industrial projects, such as plants or refineries, its clients often engage the Industrial Services division to support the industrial construction of the plant and subsequently to provide preventive and corrective maintenance. The Companys commitment to safety, which is reflected in all of its operations, is particularly critical to the clients from this Division, many of which operate according to international safety standards established by their headquarters. Many of its clients operations involve the use of flammable and toxic substances. Seeking continuous improvement, along the years, the Industrial Services division has secured several international safety certifications, such as OHSAS 18001, ISO 9001 and ISO 14001. The Companys commitment to the application of robust safety standards has also been recognized by its clients, as demonstrated by the following awards: Destaque Petrobrs, Braskem Ouro, TOP Copene, Prmio Isopol de Segurana, Prmio DOW for 13 consecutive years of providing services without work loss time injuries, Prmio 5 Estrelas Arcelor Mittal (five star award), Prmio Excelncia na Construo Bahia (excellency in construction), Prmio Performance SSMA Millennium Cristal , Prmio Reconhecimento pelos resultados de SSMA in the Braskem unit at Alagoas, Prmio Zero Acidente Reportvel - Dow. The Company's strategy for this division is to increase its profitability by identifying opportunities of complementary services with higher added value and hence higher profitability, to offer its customers, mainly in the offshore market.
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The chart below, presents the financial information for the Industrial Services Division on the indicated periods:
Year ended December 31 2010 195,396 26,120 13.4%

Industrial Services Division Net revenue (in thousands of R$) EBITDA (in thousands of R$)(1) EBITDA margin(2)

2009 141,412 20,815 14.7%

2011 214,783 20,727 9.7%

__________________________________________________________

(1) EBITDA is a non-GAAP measurement adopted by the Company. The calculation of the EBITDA consists of our operating results before financial expenses, from the depreciation and goodwill. The EBITDA is not a Brazilian, IFRS or US GAAP measure, have no standardized meaning and our definition may not be comparable to that used by other companies. The Company uses the EBITDA to measure its performance. The EBITDA should not be considered as alternatives to net income, as an indicator of our operating performance, or as alternatives to cash flow as an indicator of liquidity or debt payment capability. (2) EBITDA from the Division divided by its net revenue.

Jahu Division While the Heavy Construction Division is focused on large engineering and infrastructure projects, the Jahu Division attends, primarily, the residential and commercial construction contractors, developing projects and providing services of concrete formwork, scaffolding, shoring and access equipment. The Company also provides engineering services in connection with building refurbishing and maintenance, primarily through the provision of suspended scaffolding. Inside of this Division's activities, the Company provides planning, project development, technical supervision, equipment and related services. With outstanding performance in the sector for over 50 years and being one of the major leaders for ten years in net revenue terms, Jahu is a strong, well-established brand in the residential and commercial construction markets, acquiring an extensive client base along its history. Due to that, as part of its expansion and diversification strategy, the Company invested, in June 2008, R$60.1 million so that Jahu could be incorporated in the group, becoming one of the business Divisions. Since then the Company has been improving Jahus performance by introducing the concrete formwork in the product portfolio, increasing significantly the equipment inventory, capitalizing on the strong brand names of both Jahu and Mills and therefore increasing its client base. The residential and commercial construction sector in Brazil is fragmented. When compared to the Heavy Construction market, the projects from this division, are generally dispersed within cities, are smaller in size and have shorter durations, being the average contract term of four and a half months. The recognized reputation on the Brazilian market is a really important factor for the Companys success in the activities from this division. Its main competitive advantage is the extensive presence at a large number of worksites, which enables it, together with its clients, to analyze the job needs and to supply the requested services and equipment on demand. Its main clients are the largest real estate companies, such as AGRA Empreendimentos Imobilirios S.A, Emcamp Residencial S.A., Gafisa S.A., JFE 2 Empreendimentos Imobilirios Ltda, PDG Realty S.A, Queiroz Galvo Master Desenvolvimento Ltda. The Jahu divisions operations are concentrated in the Southeast and South regions of Brazil, which are the most economically developed and densely populated in the country. However, the Brazilian government is introducing initiatives such as the low income housing program Minha Casa, Minha Vida to reduce the Brazilian housing deficit and increase the number of homes available in the North and Northeast regions of the country. In order to join this expansion program and take advantage of the expected public investments in this market, in 2009 the Jahu division began an expansion plan, which launched one branch in 2009, eight in 2010 and one in 2011. The Company believes that the growth perspectives for the Jahu Division are positive in the long-term outlook, as a result of the projected growth of the Brazilian real estate industry, the expansion of the mortgage financing, the recent fundraising by several large Brazilian real estate developers, the large public housing programs, such as the Brazilian governments program Minha Casa, Minha Vida and the
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tendency of the major developers to contract the services from large nationwide suppliers, such as the company. The chart below, presents the financial information for the Jahu Division on the indicated periods:

Diviso Jahu Net revenue (in thousands of R$) EBITDA (in thousands of R$)(1) EBITDA margin(2)

2009 62,177 31,846 51.2%

Year ended December 31 2010 105,151 43,874 41.7%

2011 155,761 65,978 42.4%

__________________________________________________________

(1) EBITDA is a non-GAAP measurement adopted by the Company. The calculation of the EBITDA consists of our operating results before financial expenses, from the depreciation and goodwill. The EBITDA is not a Brazilian, IFRS or US GAAP measure, have no standardized meaning and our definition may not be comparable to that used by other companies. The Company uses the EBITDA to measure its performance. The EBITDA should not be considered as alternatives to net income, as an indicator of our operating performance, or as alternatives to cash flow as an indicator of liquidity or debt payment capability. (2) EBITDA from the Division divided by its net revenue.

Rental Division The Company is one of the largest providers of motorized access equipment, in Brazil, supplying aerial work platforms and telescopic handlers, to lift people and cargo to considerable heights, based on data published in the O Empreiteiro magazine in 2011. The equipment enables safe, fast, versatile and precise access for professionals to perform tasks safely and efficiently at heights from two to 48 meters. The handlers allows materials weighing up to 4,500 kg to be lifted, transported and delivered to heights of over 17 meters, at a job site or within an industrial plant. The Rental division serves the same sectors as the other divisions, such as heavy or residential and commercial construction and industrial construction and maintenance, as well as other economic sectors, as the automotive, retail and logistics sectors, among others. Therefore, its client base is diverse, including clients from the other divisions, such as Camargo Corra S.A., Construtora OAS Ltd., Construtora Norberto Odebrecht S.A., Construtora Queiroz Galvo S.A., UTC Engenharia S.A. and etc. Generally, the Company rents equipment on a monthly basis, being the average contract length from two to three months, although 18-month or even longer contracts. The Company introduced the large-scale use in Brazil of motorized access equipment specific for height purposes in 1997, when it entered into a joint venture agreement with the American company JLG Industries Inc., world leader in access equipment manufacturing, to rent aerial platforms and telescopic handlers, the first joint venture in JLGs history. In 1999, the Company introduced the large-scale use of telescopic handlers in the Brazilian market. This motorized equipment can be used to transport loads to various heights and replaces a number of other pieces of equipment traditionally used at construction sites, such as cranes, munck trucks and service lifts, among other equipment. In 2001, Sullair, an Argentine equipment rental company, replaced JLG as the Companys partner. In 2003, due to unfavorable market conditions in Brazil and the lack of capital necessary to carry out essential investments, the Company suspended its equipment rental operations and transferred the joint venture to Sullair. In December 2007, as part of its diversification strategy and based on favorable market and credit conditions, the Company established its Rental division and began renting aerial platforms and telescopic handlers again. According to the Companys estimates, based on data of 2011 from Terex and Brazilian import statistic of 2011, there are currently 13,812 aerial platforms and 1,965 telescopic handlers in Brazil. In comparison, 614,000 aerial platforms and 175,000 telescopic handlers are available in the United States based on data
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provided by Yengst Associates. The Company believes that this gap, together with the current favorable economic conditions in Brazil, indicates that this rental market is incipient in Brazil, offering significant opportunities for expansion in the segment. The Company believes that its scale, specific industrial sector expertise, reliability and safety record have been the primary factors driving the growth of the Rental division since the beginning of its activities in 2008. In addition, the Company may benefit from the introduction of stricter technical norms and procedures, in particular with respect to safety regulations for work performed at significant heights or in areas that are difficult to access. Among other provisions, Regulatory Norm 18 establishes that workers must be lifted with the use of motorized access equipment, rather than manual equipment, which has resulted in an expansion of the potential market for rental of its equipment. The Company believes that the long-term outlook for the Rental division is strong as a result of favorable macroeconomic conditions in Brazil, including exchange rate stability, considerable infrastructure construction investments under the Brazilian governments PAC program, the Brazilian governments low income housing program and the overall growth of the real estate industry in Brazil, anticipated industrial plant expansions (including major investments in the oil and gas sector), investments related to the 2014 FIFA World Cup and 2016 Olympic Games, and the multitude of other projects that will require safe working conditions at elevated heights. The chart below, presents the financial information for the Rental Division on the indicated periods:
Year ended December 31 2010 95,067 50,956 53.6%

Diviso Rental Net revenue (in thousands of R$) EBITDA (in thousands of R$)(1) EBITDA margin(2)

2009 54,394 31,338 57.6%

2011 175,410 93,628 53.4%

__________________________________________________________

(1) EBITDA is a non-GAAP measurement adopted by the Company. The calculation of the EBITDA consists of our operating results before financial expenses, from the depreciation and goodwill. The EBITDA is not a Brazilian, IFRS or US GAAP measure, have no standardized meaning and our definition may not be comparable to that used by other companies. The Company uses the EBITDA to measure its performance. The EBITDA should not be considered as alternatives to net income, as an indicator of our operating performance, or as alternatives to cash flow as an indicator of liquidity or debt payment capability. (2) EBITDA from the Division divided by its net revenue.

7.2 Regarding each operational segment(s) disclosed in the consolidated financial statements for the past fiscal years

a.

Commercialized products e services

Heavy Construction Division

Offered Equipment
The main equipment offered by the Company to the clients of the Heavy Construction division includes: Steel Shoring Equipment. The primary shoring equipment the Company provides are Millstour shoring posts, a versatile system capable of supporting loads ranging from 24 to over 156 tons per post, depending on the configuration. In accordance with the Companys market perception, its shoring equipment is considered the most flexible and versatile shoring system in Brazil. This system provides for ease of assembly with its heaviest component parts weighing less than 13 kilograms. Each shoring post has an automatic locking element and can support loads of up to six tons. Load-bearing capacity may be doubled or even tripled with the use of connecting trusses. In addition, these telescopic shoring posts are fully adjustable to meet nearly any height requirement and may be used in multiple applications. Millstour is typically used in the construction of bridges, viaducts and dams, as well as in large-scale industrial projects.

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Shoring Aluminium. The main equipment used is the Alu-Mills, a system of aluminum shoring with load capacity up to 14 tons, which can be connected by trusses forming isolated towers of different heights. This system also allows total displacement of the joint without the need for disassembly also bringing significant labor savings. Compared to the shoring post systems or conventional steel shoring, this system is the one with the lightest weight / resistance, saving very much in the amount of equipment deployed in the works. The Alu-Mills can be used in buildings and even heavy construction works reaching a wide range of application. Trusses. The Aspen Launching Truss is a motorized horizontal truss able to transport and position precast beams weighing up to 140 tons and spanning up to 45 meters. This truss may be used during all stages of a construction project, from the delivery of the beams at the construction site to positioning the beams on permanent supports. The truss may also be used to launch braces for the construction of viaducts with a high degree of safety and minimum labor. No additional equipment is required to launch such braces, as the Aspen Launching Truss also transports the supports, stands and other accessories required for launching such braces. Moreover, the truss may be operated at inclines as steep as 6% without additional components and without any deterioration in its load-bearing capacity. The Aspen Launching Truss is typically used in the construction of bridges, viaducts and industrial structures. The M150 Truss is a horizontal heavy duty truss used for laying concrete. The Company believes that the M150 Truss has the highest load-bearing capacity among similar products in the market, while remaining as light as conventional trusses. The M150 can bear positive stress of 150 tons per meter and negative stress of 100 tons per meter, thus requiring fewer modules than for conventional trusses and less movement of materials, which reduces costs for labor and secondary equipment. The Company believe that the M150 Truss is the only truss available in the market which is able to absorb negative stress and which includes a curvature adjustment mechanism. The lower rail supports the truss via an exclusive connecting post, eliminating the need for additional supports. The Companys Truss can be operated either with the use of supporting structures, or through the even distribution of weight, providing it with the capacity to be operated at significant heights over great spans. Reusable Steel Concrete Formwork. Formwork is used to shape concrete structures. There are two main types of formwork: vertical formwork for casting of walls and columns, and horizontal formwork for molding beams and slabs. The Company entered the concrete formwork market in 1980 through a joint venture with the Canadian company Aluma, which provided know-how regarding the manufacturing of steel formwork, which is extremely light. In addition, the Company entered into a license agreement with the German company NOE Schaltechnik in 1996, which allowed us to manufacture and distribute NOE formwork in Brazil, using SL 2000 steel panels. In 2005, the Company began working with ALU-L steel panels. These panels have a large area and support a concrete pressure of up to 60 kilograms per square meter, and yet are light enough to be moved by a single worker. The introduction of ALU-L steel panels represented a significant innovation in the heavy construction industry. Also in 2005, the Company introduced Deck Mills, a steel formwork system for casting concrete slabs that is extremely simple to assemble and disassemble, which helps reduce construction time. The Company also provides a formwork system named Aluma Light, a floating table system designed for creating large single slabs of concrete of up to 90 square meters for use in projects which involve the construction of a large number of identical floors, such as for the construction of high-rise structures. The floating table system can be transported from one floor to the next with the use of a crane and without need for disassembly, thus reducing labor costs and overall construction time. Prior to the development of steel formwork, the construction industry relied heavily on wood formwork, which had a short useful life and which was very heavy and required a large number of workers for each project. In contrast, steel formwork has a useful life of more than 10 years, is available in a number of different sizes and shapes, and can be transported and installed either manually or with the help of the proper equipment. Consequently, the use of steel formwork as opposed to wood formwork allows for a significant reduction in construction costs, primarily labor
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costs, with as much as a 70% reduction in costs according to the Companys estimates. The Company believes that the broad range of systems offered by the Company, together with its extensive experience in the provision of customized engineering solutions, provides a significant advantage over its competitors in the provision of concrete formwork solutions. Access Scaffolding. The Company offers a scaffolding system called Elite, which is a tubular metal tower system that can be assembled into access structures of varying heights and dimensions. Elite is a simple system composed of only three types of pieces: support posts, transverse pieces and diagonal supports, manufactured from galvanized steel. Each post can bear loads of up to three tons. No tools, bolts or screws are required to assemble the scaffolding system as each part is simply slotted into each other part. On average, a single worker is generally able to assemble 15 linear meters of scaffolding per hour.

Industrial Services Division

Offered Services and Equipment

The Industrial Services Division is divided into project and providing access, thermal insulation and industrial painting solutions. Access. The Industrial Services division offers engineering solutions, equipment and labor relating to the provision of access to construction sites, plants and other structures, for the performance of maintenance and assembly work. Most of the equipment used for this purpose has been designed by the Company, and the main products adopted in the provision of these services are the scaffolding systems TuboMills, Elite and Mills Lock. The latter two have slotting mechanisms and can therefore be assembled without clamps, which results in reduced assembly time. The platforms for these systems are being transitioned from wood to metal, either steel or aluminum, due to the longer useful life, higher load-bearing capacity, and slotting mechanisms of such metal platforms. In addition, the Company offers customized safety products, such as skirting boards, that help prevent objects from falling. Finally, the Company uses specially designed ladders and in some cases mechanical lifts for quick movement between levels. Assembly and Disassembly of Access Equipment. In most cases, the Companys clients require to assemble the access structures for the provision of maintenance services. The Company provides continuous technical operation and safety training to its employees for the use of such equipment specific to the needs of the work to be performed at the plants and facilities of its clients. The Companys employees use individual safety equipment in compliance with the characteristics of each workplace during the complete operation in which its equipment is in use, as evidenced by technical reports prepared by its safety engineers. Industrial Painting. The industrial painting process includes the following stages: (1) evaluation of the technical treatment needs of each surface, which is performed in partnership with its clients; (2) use of its equipment or aerial platforms provided by the Rental division to access the surface to be painted (if the Company is unable to access the surface with the use of its equipment, the Company engages its specialized climbing painters in the performance of the work); (3) preparation of the surface to be painted, which is a critical stage in the process and consists of the removal of the existing layer of paint with the use of high pressure water guns (or other abrasive means complying with national and international technical norms and procedures); (4) priming of the surface for the application of the new layer of paint and anti-corrosive treatment; and (5) application of the new layer of paint. The Company also performs industrial painting operations inside boilers, furnaces and tanks. Environmental concerns have led the Company to invest heavily in additional employee training for its employees and the progressive suspension of the use of abrasive chemicals and other materials for paint removal and their replacement with high pressure water guns. The Company has also adopted new models of painting chambers that allow the workspace to be completely isolated from the surrounding environment.

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Insulation. The provision of services relating to the removal and replacement of insulation is key to the operation of companies that work with fluids, due to the high temperatures to which volatile fluids are exposed while travelling through pipes, ducts and equipment. The Company uses a special foam for basic insulation and external coating, the characteristics of which differ according to the type of structure to be insulated. In most cases, the existing insulation cannot be repaired, requiring the removal of the existing layer of foam and the application of a new layer of insulation whenever a pipe or similar insulated equipment requires maintenance work. Pressurized environment modules. Mills Habitat, Scottish technology, which is an advanced model of pressurized environment, composed by non-flammable panels of PVC, flexible and modular, with safety installation for heated works (ex. welding) in the oil and gas industries, which presents explosion risks. This equipment allows the execution of maintenance safely, without stopping production, providing substantial productivity gain for the customer.

Jahu Division

Offered Equipment
The Jahu Division offers specialty engineering solutions and equipment, such as concrete formwork, access and maintenance scaffolding and shoring equipment. The Companys employees are generally responsible for the development of engineering solutions, as well as for supervising the use of its equipment, while its clients are usually in charge of the assembly and disassembly of such equipment. However, for more complex projects, the Company may provide the labor for the assembly and disassembly of equipment. Shoring Solutions. The main shoring equipment used by the Jahu division is a system of modular metal towers that may be pieced together through the assembly of tubular frames and kept in place by diagonal supports, and which can bear loads of up to eight tons per tower. Additional frames may be integrated with the structure through the use of joints, thereby increasing loadbearing capacity. In addition, specialized props and adjustable supports provide for precise alignment of the base with the top of each tower. These props and supports contribute to a substantial reduction in the time required for tower alignment and structure disassembly. Finally, metal plates are used to connect the whole structure to concrete slabs, which generally contributes to a substantial reduction in costs. An alternative shoring system for use with ribbed slabs is assembled over props which work as support for the guides. This allows the slab to remain shored without adjustments while the concrete formwork is removed from the ribbed slabs. As a result, the whole horizontal and vertical shoring structure can be quickly assembled on each successive slab, significantly reducing the costs and construction time. Tubular Scaffolding. The access and service scaffolding offered by the Jahu division enjoys strong brand recognition and wide use in the civil construction market, and is an integral element in the day-to-day operations of several Brazilian construction workers and foremen. The Company believes the use of its access and service scaffolding equipment offers a substantial operational advantage in the execution of a residential or commercial construction project. This equipment is easily and quickly assembled, as the scaffolding towers are pieced together by slotting tubular frames together and are kept in place by diagonal supports fixed to the post framework through efficient locking mechanisms. The frames used in the access and service scaffolding are safe and versatile, having been developed based on market and technological studies. For example, the access ladder is incorporated into the tubular frame, which contributes to its structural rigidity and facilitates access by the worker. The frames also include porches and trusses, which make them ideal for use in urban centers, as they allow pedestrians to pass by without being blocked by the tubular structure. Suspended Scaffolding. Suspended scaffolds are systems that use steel cables fixed to the facade of the buildings. The motorized suspended scaffolding offered by the Jahu division is recommended for the performance of rapid, automated services, as its engine, which is powerful
60

and easy to run, works at constant speeds of approximately ten meters per minute. The platforms have non-slip flooring, can be assembled in lengths of two to eight meters, and are used with steel cables up to 150 meters-long. The Companys light suspended scaffolding with intertwined cable is ideal for refurbishing, painting and finishing facades, where speed and cost control are important. The products performance and ease of operation are a result of its mechanical traction system and modular platform, which can be assembled in lengths of up to eight meters. Finally, the heavy suspended scaffolding is recommended for the performance of work which requires a large effective load and must be completed at a low cost. The platform of the heavy suspended scaffolding can be assembled in lengths of up to eight meters, and is supported by hoists installed up to two meters apart and fixed to steel beams by wire cables. The system is flexible and versatile enough to surround an entire building, thus allowing work to be simultaneously carried out on all facades of the structure. Reusable Connecting Panel Concrete Formwork. Following the establishment of the Jahu division in 2008, the Company pioneered the use of SL 2000 NOE formwork, which was regularly used by the Heavy Construction division, in dimensions appropriate for the construction of residential and commercial buildings. The use of this formwork in the residential and commercial market substantially reduces the time and cost of construction of new residential and commercial units. Reusable Steel Concrete Formwork (used in residential construction relating to the Minha Casa, Minha Vida program). In October 2009, the Company imported the first load of steel concrete formwork from the Canadian company Aluma, in order to meet the needs of Homex, the largest Mexican low-income homebuilder, which also builds homes in Brazil. In addition, the Company entered into two other agreements with Bairro Novo, a company owned by Construtora Norberto Odebrecht that is focused on the low-income housing market. As a result of these three agreements, the Company is among the largest providers of steel formwork in Brazil. The reusable steel concrete formwork system is completely manufactured in steel, which reduces its weight considerably and allows for quick turnaround time in the mass construction of low-income housing. Houses with a total constructed area of 45 square meters can be completed in an average of eight days using this system. The Company believe that most of the units to be built in the context of the Minha Casa, Minha Vida program will be constructed with the use of steel formwork. In addition, in December 2009 the Company entered into an agreement with Aluma to grant us exclusive rights for the manufacture and distribution of their steel concrete formwork in Brazil. Mills Deck Light. The Mills Deck Light is a system of forms of flat slab formworks for the residential and commercial segment. Formed by struts, aluminum panels and "dropheads" which allow the removal of the bottom panels from the slabs keeping them shored, the Deck System provides the economy of a form set to the builder and also provides more speed to the construction work. Mast Climbing Platforms. The Mast Climbing Platforms, is automatic, delivering more speed in the external coating of building during construction or refurbishing than the traditional scaffolding, providing greater safety in the operations.

Rental Division

Offered Equipment
The Rental Division offers aerial platforms, which allow workers to perform tasks at different altitudes, and telescopic handlers, which are used to lift loads to varying heights. Boom Platforms. Offered both telescopic and articulated boom platforms, which provide access to heights ranging from 2 to 48 meters. Offered with several options, as two or four-wheel, allterrain kits, models with a narrow or wide base, and either diesel or electric engines.

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Scissor Platforms. Scissor platforms provide an alternative to boom platforms that allow access to narrow spaces. These platforms have a platform extension sliding system, and are available with either diesel or silent electric engines. These platforms are available in a number of models which may be used in various types of terrain and provide access to heights ranging from 6.4 to 18 meters. Telescopic Handlers. Telescopic handlers are an extremely versatile type of equipment able to lift loads weighting up to 4,500 kilos to a height of up to 17 meters.

The Company believes that the equipment offered by the Rental division can increase its clients productivity and reduce required time for the accomplishments of certain tasks, as well as contribute to making their facilities safer.

b.

Revenue from the segment and its participation in the Company's net revenues

The table below indicates the net revenue from each of the divisions and its share in the total net revenue on the indicated periods:
Division 2009 Net Revenue % of Total Net Revenue Heavy Construction Division Industrial Services Divisions Jahu Division Equipment Rental Division Total 146,210 141,412 62,177 54,394 404,193 36% 35% 15% 13% 100% Fiscal year ended December 31 2010 2011 Net Revenue % of Total Net Revenue % of Total Net Revenue Net Revenue (in thousands of R$, except in percentage) 154,270 28% 131,638 19.4% 195,396 105,151 95,067 549,884 36% 19% 17% 100% 214,783 155,761 175,410 677,592 31.7% 23.0% 25.9% 100%

________________________________

c. Profit or loss resulting from the segment and its participation in the Company's net income.
The table below indicates the net income from each of the divisions and its share in the total net income on the indicated periods:
Division 2009 Net % of Total Income Net Income Heavy Construction Division Industrial Services Divisions Jahu Division Equipment Rental Division Others Total 35,995 3,241 17,364 11,788 68,388 53% 5% 25% 17% 100% Fiscal year ended December 31 2010 2011 % of Total % of Total Net Income Net Income Net Income Net Income (in thousands of R$, except in percentage) 39,882 39% 20,066 21.8% 12,569 12% 3,204 3.5% 26,041 25% 28,188 30.6% 24,791 24% 39,373 42.7% 1,346 1.4% 103,283 100% 92,177 100%

________________________________

7.3 Products and services that correspond to the operating segments disclosed in item "7.2

a.

Characteristics of the production process

The Company outsources the entire process of production of the equipment used in their operations. See item 7.3(e) below.

b.

Characteristics of the distribution process

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The Company rents its equipment and provides their services according to the needs from their clients. See previous item.

c. (i)

Characteristics of the markets, in particular: participation in each market

The Company believes to be Brazils leading provider of specialty engineering solutions and equipment, such as formwork, shoring and scaffolding, and in the access motorized equipment rental for the for the Brazilian market, according to the Brazilian magazine O Empreiteiro published in 2011. The Company also performs in the industrial services segment (access equipment, industrial painting and insulation) being one of the major players in this market. However, there is no public information about the exact market share of the Company and its competitors.

(ii)

competition conditions in the markets

Each of the Companys divisions faces significant competition in the segments in which it operates. However, the Company believes its ability to offer innovative solutions at competitive prices and its capacity to meet or beat client deadlines are a significant competitive advantages in the segments in which it operates. By the Companys understandings, the considerable size and importance of the Brazilian engineering and construction services market creates numerous business opportunities in the segments in which it operates, which generally provides incentives for new competitors to try enter the market.

Heavy Construction Division Competition

The Company believes that its Heavy Construction Division enjoys an established leading presence in its segments, having as main competitors Doka, Estub, Pashal, Peri, Rohr (in which the Company is owner of 27.5% of its participation), SH Formas and Ulma.

Industrial Services Division Competition

The Industrial Services division operates in highly competitive market segments. While in the access segment the Company believes to have solid leadership, in the industrial painting and, in particular, the insulation market, the Company competes with larger competitors. The Company believes that the competitive in this sector consists on offering solutions both innovative and high level of excellence at low cost, building long-term commercial relationships with its clients. The main competitors in the markets served by the Industrial Services Division are Accoplation, Andaime, Calorisol, Contrex, NM Engenharia, RIP Rohr(in which the Company is owner of 27.5% of its participation).

Jahu Division Competition

Since the demand in the residential and commercial construction markets tends to be more constant and fragmented than demand from the heavy construction market, the Company faces a higher number of companies, some of them with strong regional operations. In this market, the ability to reduce construction costs and to provide solutions for reducing execution time is crucial to attracting new clients and securing participation in new construction projects. The Company believes that its Jahu division is a leader in the residential and commercial construction market. Despite the lack of public data about the competition, the Company believes that it has maintained a leading position for the past ten years. The main competitors in this sector are Doka, Locguel, Mecan, Metax, Pashal, Peri, SH Formas and Ulma.
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Equipment Rental Division Competition

Due to the participation in a still minor market with great potential for expansion, the Rental Division faces a moderate level of competition when compared to the other divisions. The Company believes that its Rental Division is one of the major providers of motorized access equipments, aerial platforms and telescopic handlers, both for lifting personnel and cargo to considerable heights in Brazil. Besides the lack of public information about its competitors, the Company believes that its main competitors are A Geradora, Bilden, Brasif Rental, Locar, Solaris and Trimak.

d.

Possible seasonality

The demand for the services rendered by the Industrial Services division increases significantly during periods when industries suspend normal operations and use such down-time to carry out maintenance work. However, suspensions of operations are not concentrated at any particular time of the year, but rather are determined in accordance with the operational practices adopted by each industry. The operations of the other three divisions are not affected by seasonality.

e. Key inputs and raw materials: (i) description of the relationships with suppliers, including whether they are subject to governmental control or regulation, identifying the bodies and the respective legislation; (ii) potential dependence on few suppliers; and (iii) possible volatility in their prices
To the Heavy Construction, Industrial Services and Jahu divisions are acquired from habitual suppliers, the raw material necessary for the manufacture of equipments offered by the Company, primarily steel and aluminum sheets, which prices paid for such materials are directly impacted by fluctuations in commodity prices. The Company has a large number of options when choosing its raw material suppliers and the choice is influenced mainly by the charged price. In the fiscal year ended December 31, 2011, the main raw material suppliers to the Companys divisions were Indstria Santa Clara, Alcoa and CBA. After purchasing the raw materials, the Company outsources the entire manufacturing process to third parties, as well as subsequent to the assembly. In this manner, all of the equipment manufactured is done by third-parties. Due to the very high quality standards that are needed from the equipment, the Company has very careful restricted selected companies to perform the manufacturing which are, Caldren, Jesiana, and Fundiferro. In addition, the Industrial Services division occasionally rent equipment from third-parties, in particular from S Leone and Construservice, and enters into agreements with AGM for the provision of temporary labor. The Company acquires the aerial platforms and telescopic handlers offered by the Equipment Rental division from selected third parties. The determination of which suppliers it uses is based on product quality and post-sale customer service. The main equipment suppliers used by the Equipment Rental division are JLG and Terex, in which the Company is dependent due to the lack of suppliers in the market. Furthermore, it is also bought motorized components from the Cummins, Deutz and Perkins, besides the axes bought from Dana and ZF do Brasil. Most of the equipment acquired by the Equipment Rental division is imported. Regarding the supplies, it is acquired regularly industrial paint used by the Industrial Services division from Akzo Nobel and Renner, besides gasoline and diesel for the motorized equipments from the Rental Division. Generally, the agreements with the suppliers are short-term. The charged prices by the suppliers may experience volatility as a result from the labor prices, and commodities that are used in the equipment
64

manufacturing, especially steel and aluminum. The Rental Divisions equipment, are impacted by the exchange rate fluctuations. 7.4 Clients accounted for more than 10% of total net revenues of the Company

In the fiscal years ended December 31, 2011, 2010 and 2009, the Company had no clients accounting for more than 10% of the total net revenue. 7.5 Relevant effects of state regulation on the Company's activities

a. The need for government authorization to exercise the activities and long-standing relationships with the government to obtain such permits
There is no specific regulation on the activities that the Company carries. The Company does not need to obtain permission or license in addition to those required to all commercial companies. On July 5, 2006, environmental authorities in the state of Rio de Janeiro, the Delegacia de Proteo ao Meio Ambiente, launched an investigation against the Company for the alleged breach of articles 54 and 60 from the Environmental Crimes Law (Lei de Crimes Ambientais) resulting from the alleged inadequate disposal of solid and liquid waste. The investigation has not yet been completed, though the Company has started the necessary works to remedy the irregularities appointed by the authorities and requested the environmental licenses required for the works carried out at the construction site. For further information regarding relevant non-confidential judicial, administrative or arbitrary lawsuits, see item 4.3 from this Reference Form. }The Delegacia de Meio Ambiente e produtos controlados of Osasco initiated the Police inquiry, based on the Police report dated October 18, 2011, to investigate the alleged practice of crime against the environment, provided for in Article 56 of Law 9.605/98, due to (i) irregularities in the artesian well, (ii) irregular use and storage of chemicals and (iii) irregular disposal of waste in the Company's subsidiary in Osasco/SP. The investigation is not complete, but the Company is now taking all measures to search, verify and correct the deficiencies pointed out, together with the police authority and the environmental agencies of the State of Sao Paulo.}

b. environmental policy of the Company and costs incurred for compliance with environmental regulation and, where appropriate, other environmental practices, including adherence to international standards of environmental protection.
Considering the nature of the Companys activities, it does not adopt environmental policies and regulations and is not subjected to specific environmental regulations.

c. reliance on patents, trademarks, licenses, concessions, franchises, contracts, royalties for the development of relevant activities.
In case the Company may not use its main brands, Mills and Jahu, or if such brands lose distinctiveness, the Company may have problems in relationships with their clients to tailor their services and equipments in the market, which may prevent the development from its activities in a satisfactory condition. The development from its activities does not dependent on secondary brands, patents, concessions, franchises and contracts, royalties. 7.6 Countries to which the Company derives revenue

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a) revenue from the clients assigned to the host country and their participation share in the Companys total net revenue; The fiscal year ended on December 31, 2011, 100% of the Company's revenue came from clients located in Brazil. b) revenue from the clients assigned to each foreign country and their participation share in the Companys total net revenue; Not applicable, since, the fiscal year ended December 31, 2011, 100% of the Company's revenue came from clients located in Brazil. c) total revenue from foreign countries and their participation share in the Company's total net revenue. Not applicable, since, the fiscal year ended December 31, 2011, 100% of the Company's revenue came from clients located in Brazil. 7.7 Regulation of foreign countries in which the Company obtains relevant revenue.

Not applicable. 7.8 Description of long-term relationships relevant to the Company that are not listed in this form. {The company does not publish sustainability report or similar. Considering the significant increase of transparency about the sustainability issue, the Company is considering formalizing a process of analysis (diagnosis) and action plan to improve its sustainability practices.} 7.9 Other information that the Company deems relevant.

No further relevant information about this item "7 ".

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8.

MILLS GRUP

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8.1

Description of the group which the Company is inserted

a.

direct and indirect controllers

The Companys capital stock is comprised exclusively of common shares. The table below presents the Companys ownership structure, as of December 28, 2012, highlighting the amount of shares held by the Company, its main shareholders and its Administrators: Shareholders Andres Cristian Nacht ................................... Other signatories of the Companys Shareholders Deal (1) Snow Petrel S.L. . HSBC Bank Brasil S.A. (2) ............................................... Administrators ..................................... Others .................................. Total ....................................................................... Free Float (3) ........................................................... Share Ownership Shares (%) 15,596,249 12.3% 11,825,464 9.4% 17,728,280 14.0% 6,323,300 5.0% 3,662,709 2.9% 71,263,428 56.4% 126,399,430 100% 77,586,728 61.4%

________________ (1) Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kjellerup Nacht, e Francisca Kjellerup Nacht, all owners of individual participations worth less than 5% of the companys capital, represented as shareholders, with voting rights included, by Andres Cristian Nacht. (2) On October 2, 2012. According to information received officially by the Company and released to the CVM. (3) Considers all the shares issued by the Company, except for shares held by the Direct and indirect Controlling shareholders and administrators

Andres Cristian Nacht Mr. Andres Cristian Nacht is a direct controller shareholder of the Company and is part of its board of employees since 1969, having acted as President Director between 1978 and 1998 and currently acting as President of its Administration Board. Snow Petrel S.L, Malachite Limited, Nicolas Nacht e Helen Anne Margaret Ahrens The tables below show the share ownership of Snow Petrel S.L., member of the Companys controller group, to the individual level, indicating holders of direct, indirect, equal to or over 5.0% of its capital stock. Both Snow Petrel S.L. and Malachite Limited have their respective ownership exclusively divided in shares with voting rights.
Snow Petrel S.L. Shareholder Malachite Limited ................................................ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Total .............................................................. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Malachite Limited Shareholders Nicolas Nacht ...................................................... ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Helen Anne Margaret Ahrens................................ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Others ................................................................ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Total .............................................................. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Share Ownership (%) 100.0 100.0 Share Ownership (%) 40.0 40.0 20.0 100.0

The Snow Petrel S.L. is a company with headquarter in Barcelona, Spain, at Calle Johann Sebastian Bach 20, 3rd floor, registered under CNPJ/MF n 14.740.333/0001-61. Snow Petrel is a part of Mills Estruturas e Servios de Engenharia S.A.s controlling group and its entire capital stock is held by Malachite Limited, a holding company organized under the laws of Malta and whose shares are fully held by: (i) Mr. Nicolas
68

Nacht, the brother of Mr. Andres Cristian Nacht; (ii) Mrs. Helen Anne Margaret Ahrens, the wife of Mr. Nicolas Nacht; and (iii) other shareholders, also members of the Nacht family. Shareholders' agreement of Nacht Participaes S/A Aiming to regulate its relationship as shareholders of Mills and continue to be qualified jointly as the controlling group of Mills, even after Nachts capital reduction, all shareholders of Nacht Participaes S.A. on February 11, 2011, which included at the time Jeroboam Investments L.L.C and the members of the Nacht family (Nacht Family), including Cristian Nacht and Jytte Nacht, executed a shareholders agreement regulating the voting rights and the transfer of shares of Nacht and Mills. The main terms of the shareholders agreement are: (a) maintenance of the Nacht Family and Jeroboam (succeeded as a Companys shareholder by Snow Petrel) as the group controlling shareholder, (b) joint exercise of voting rights in each and any resolution pertaining to Mills, (c) Andres Nacht's appointment as representative of the controlling group on the Board of Directors and on Mills Shareholder Meetings, and (d) prohibition of sale of Mills shares of more than 10% interest that each shareholder owns, individually, to third parties. Due to the extinction of Jeroboam Investments L.L.C, Snow Petrel S.L., as its sole member, succeeded all of its rights and obligations, including as a party to the Nacht Participaes S.A. Shareholders Agreement executed on February 11, 2011. As of December 28, 2012, Nacht Participaes S.A. reduced its capital stock, transferring the totality of its previously held shares issued by Mills to its shareholders, which was approved in an extraordinary shareholders meeting of Nacht Participaes S.A.s shareholders in October 29, 2012. All 27,421,713 (twenty-seven million, four hundred and twenty-one thousand, seven hundred and theirteen) shares issued by Mills previously held by Nacht Participaes were transferred to its shareholders, in proportion to their respective participation in Mills capital stock As a consequence of that transfer, shareholders Andres Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kjellerup Nacht, e Francisca Kjellerup Nacht now hold, directly, 27,421,713 (twenty-seven million, four hundred and twenty-one thousand, seven hundred and theirteen) common nominative shares with no par value, issued by Mills, representing 21.7% of Mills capital stock. Neither the capital reduction nor the related transfer of the shares issued by Mills resulted in any change of Mills corporate control, which, before the capital reduction, was formerly exercised jointly by Nacht Participaes, its shareholders and Snow Petrel S.L., and, after the capital reduction, will be exercised by Nacht Participaes shareholders jointly with Snow Petrel S.L. Such shares remains encumbered and subject to the terms of the "Shareholders Agreement of Nacht Participaes S.A.", executed on February 11, 2011, as amended, which also applies to Mills. HSBC Bank Brasil S.A. Banco Mltiplo HSBC Bank Brasil S.A. Banco Mltiplo (HSBC) is a legal entity of private law, headquartered at the city of Curitiba, Paran, Travessa Oliveira Bello n. 34, 4 floor, Brazil, under corporate number CNPJ 01.710.201/0001-89.

b.

subsidiaries and affiliates.

The Company does not have subsidiaries or affiliates.

c.

Mills shareholdings in companies in the group.

On January 19, 2011, the Company entered into a purchase and sales agreement to acquire 25.0% of the voting and total capital stock of Rohr for R$90.0 million, paid fully on February 8, 2011.
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Rohr is a privately held company specialized in access engineering and solutions for civil construction and has 45 years of experience in this market. The company serves the following sectors: heavy construction and infrastructure, residential and commercial construction, industrial maintenance and events. The Company does not participate in Rohrs administration, once this was a strategic acquisition, in which enables the Company to broaden its exposure to the sectors it serves - infrastructure, residential and commercial construction, the oil and gas industry, among others. In September 2011, there was a rise in the stake held in Rohr to 27.5%, resulting from the repurchase by Rohr of 9% of its shares held as treasury stock.

d.

Shareholdings in Mills held by companies in the group

Not applicable

e.

companies under common control

See items 8.1(a) above and 8.2 below. 8.2 Organization chart where Company operates, compatible with information presented in item 8.1.

Nacht Family 21.7%

Snow Petrel L.L.C 14.0%

Administrators 2.9%

HSBC 5.0%

Others 56.4%

MILLS ESTRUTURAS E SERVIOS DE ENGENHARIA S.A.

8.3 Description of the restructuring operations, such as additions, mergers, splits, incorporation of shares, corporate divestitures and acquisitions, corporate governance, acquisitions and disposals of important assets, which may have taken place in the Group.

Date of Operation Corporate Event

12/28/2012 Other
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Description of Corporate Event Other Operation Description

Capital Reduction of Nacht Participaes S.A. In an extraordinary shareholders meeting, which took place in October 29, 2012, Nacht Participaes S.A.s shareholders approved its capital stock reduction. The aforementioned capital stock reduction occured through the delivery of the totality of its previously held shares issued by Mills to its shareholders (27,421,713 shares), after the 60-day statutory period provided by article 174 of Law 6,404, of December 15, 1976, as amended. There was no change in the Companys corporate control.

Date of Operation Corporate Event Operation Description

08/01/2011 Merger At Extraordinary Shareholders Meeting held on August 1st, 2011, GP Sul was merged to the Company, in the Protocol and Justification terms, without a capital increase and without the issuance of new shares.

Date of Operation Corporate Event Operation Description

05/27/2011 Acquisition. On May 27th, 2011, the Company entered into a purchase and sales agreement to acquire 100% of the voting and total capital stock of GP Sul, one of the largest players in the suspended scaffold rental market to residential and commercial construction in the state of Rio Grande do Sul, for R$ 5.5 million. This strategic acquisition enabled the Company to become the leader in the suspended scaffold rental market in the state of Rio Grande do Sul and to broaden its exposure to the residential and commercial construction market in the South region, in line with the geographic expansion plan of Jahu Residential and Commercial Construction division.

Date of Operation Corporate Event Description of Corporate Event Other Operation Description

02/17/2011 Other Capital Reduction of Nacht Participaes S.A. At Extraordinary General Shareholders Meeting held on February 17, 2011, after the capitalization of part of the accumulated profits and the legal reserve, Nacht Participaes S.As shareholders, approved its capital reduction. Such capital reduction was through the delivery of shares issued by the Company, at the time held by Nacht, to some of its shareholders after the 6071

day period provided by law to creditors opposition. Date of Operation Corporate Event Operation Description 01/19/2011 Acquisition of equity interest. In January 2011, the Company entered into a purchase and sale agreement to acquire 25% of the voting and total capital of Rohr S/A Estrutura Tubulares (Rohr), company specializing in access engineering and the provision of construction solutions, for R$ 90 million. With this strategic acquisition, the Company seeked to expand its exposure to the sectors it serves, mainly in infrastructure and oil & gas industry. Date of Operation Corporate Event Operation Description 11/30/2010 Incorporation. Exclusion of Staldzene by the incorporation of Nacht Participaes S.A.

Date of Operation Corporate Event Description of Corporate Event Other Operations Description

09/30/2010 Other. Reduction of Staldzenes Capital Reduction from Staldzenes capital through the capital refund to its shareholders. As a result from the voting capital reduction, Staldezenes voting capital reduced by 6.7%, going from 46.0% to 39.3%.

Date of Operation Corporate Event Description of Corporate Event Other Operations Description

05/14/2010 Other. Secondary public offering of share distribution. On May 14, 2010, the lead manager of the public offering exercised in full the option of supplementary placement of 7,777,777 shares of common stock owned by some of the selling shareholders. The shares subject matter of the said supplementary lot started to be negotiated in the segment called Novo Mercado of BM&FBOVESPA on May 19, 2010. There was no stock issuance of the Company by reason of the exercise of the option of supplementary lot.

Date of Operation Corporate Event Description of Corporate Event Other Operations Description

04/16/2010 Other. Primary public offering of share distribution. The Company, in conjunction with some shareholders,
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carried out a public offering of primary distribution of 37,037,037 shares of common stock issued by the Company and secondary of 14,814,815 shares of common stock held by the selling shareholders. The shares subject matter of the Offering started to be traded on the segment called Novo Mercado of BM&FBOVESPA on April 16, 2010.

Date of Operation Corporate Event Operations Description

01/30/2009 Incorporation. Incorporation from the Mills Indstria e Comrcio Ltda., Mills Andaimes Tubulares do Brasil S.A. and Itapo Participaes S.A corporates.

Date of Operation Corporate Event Description of Corporate Event Other Operations Description

01/29/2009 Other. Conversion from sociedade limitada (limited liability) into sociedade annima (brazilian corporation). Conversion from sociedade limitada (limited liability) into sociedade annima (brazilian corporation).

8.4

Other information which the Company judges to be relevant.

There is no other relevant information pertaining to this item 8.

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9.

RELEVANT ASSETS

74

9.1 Description of noncurrent relevant assets for the development of the Companys activities

a.

Fixed assets, including those subject to rent or lease, indicating its location.

Most of the Companys revenues are generated by the rental and use of equipment, as well the provision of services related to such equipment, including insulation, industrial painting and equipment assembly and disassembly. The Company also owns several fixed assets for its own use; mainly warehouses to storage the equipment described above, offices, furniture, fixtures, and other general equipment used at the Companys facilities. The Companys main fixed assets are listed in the table below:
Ativos 2009 Accumulated Depreciation (674) (469) (123,428) (3,406) (4,118) (132,095) (132,095) Exerccio Social Encerrado em 31 de dezembro de 2010 Accumulated Net Cost Depreciation Net Cost (in thousands of R$) 7,759 8,433 (774) 7,659 11,049 115 1,089 (501) 588 1,197 251,986 632,208 (162,978) 469,230 1,001,891 1,472 6,840 (4,034) 2,806 8,526 5,469 17,949 (4,753) 13,196 28,645 266,801 666,519 (173,040) 493,479 1,051,308 9,187 57,695 57,695 57,503 275,988 724,214 (173,040) 551,174 1,108,811 2011 Accumulated Depreciation (884) (569) (223,549) (4,999) (5,924) (235,925) (235,925)

Cost Buildings and Land Facilities Equipment IT Equipment Others Subtotal Construction in Progress Total 8,433 584 375,414 4,878 9,587 398,896 9,187 408,083

Net 10,165 628 778,342 3,527 22,721 815,383 57,503 872,886

The Companys Facilities The Company requires, primarily, warehouses to safely and efficiently store the equipment used in its operations. The Company believes that the location of the warehouses, which covers most part of the Brazilian territory, consists of a relevant competitive advantage, as it is able to rapidly deploy its equipment to its clients at various locations. The table below shows the Companys main facilities:

Facility Headquarters / Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse

Plot Size (square meters) 54,793 m2 49,620 m2 7,500 m2 1,500 m2 6,975 m2

Constructed Area Status (square meters) 11,032 m2 18,841 m2 2,260 m2 910 m2 1,557 m2 4,377 m2 Owned Rented Rented Rented Rented Owned Rented

End of Term of Lease 31/1/2018 31/5/2012 10/12/2012 12/4/2015 31/12/2012

City

State

Localization Estrada do Guerengu n 1381, Taquara Rua Humberto de Campos, 271, Vila Yolanda Setor S.A.A., Quadra 02, 550 Setor S.A.A., Quadra 02, 450 Av. Concntrica, 137 Centro Av. Concntrica, s/n Centro DICA - Distrito Industrial do Calado, Quadra 5, Lote 1, CIA

Rio de Janeiro Osasco Braslia Braslia Camaari Camaari Simes Filho

RJ SP DF DF BA BA BA

4,500 m2

1,286 m2

75

Office/Warehouse Office/Warehouse Headquarter/Office Headquarter/Office Office Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse

5,257 m2 2,742 m2

2,570 m2 1,583 m2 293 m2 216 m2 48 m2

Rented Rented Owned Rented Rented Rented

Vigorando por prazo indeterminado 31/8/2015 24/1/2015 1/7/2015 1/12/2014 29/10/2013 Vigorando por prazo indeterminado 11/1/2013 Vigorando por prazo indeterminado 28/2/2015 31/8/2015 27/10/2015 1/1/2016 1/11/2014 1/11/2013 1/1/2016 1/1/2016 16/1/2014 1/5/2016 31/8/2012 09/2/2016 23/1/2017 31/12/2014

Belo Horizonte Curitiba Rio de Janeiro Rio de Janeiro Marechal Deodoro Serra Porto Alegre Belo Horizonte Sumar Uberlndia Rio Grande Ribeiro Preto So Jos dos Campos Goinia Fortaleza Campinas Parauapebas Manaus Pernambuco Curitiba Cuiab Porto Alegre Itabora Itatiaia So Lus

MG PR RJ RJ AL ES RS MG SP MG RS SP SP GO CE SP PA AM CE PR MT RS RJ RJ MA

Rodovia Anel Rodovirio - BR 262, n. 24.277, km 24, Bairro Dom Silvrio Rua Willian Booth, 630, Boqueiro Av. das Amricas, 500, bloco 14, salas 207 e 208, Barra da Tijuca Av. das Amricas, 500, bloco 14, loja 108, Barra da Tijuca Rua Divaldo Suruagy, s/n KM 12 Via 2 Bairro Distrito Federal Rua Holdercin, s/n Setor II Quadra 05 Lote 11 Bairro Civit II Av. Manoel Elias,1480 Bairro Passo das Pedras Rodovia Anel Rodovirio Celso Mello Azevedo,24139 So Gabriel Rua William Garcia, 61 Jardim Aclimao Rua Nicargua, 1656 Tibery Rua Benjamin Constant 195 Sala 301 Centro Estrada das Palmeiras, acesso Rua Antonia Mugnato Marincek, 1150 Palmeiras Rodovia Presidente Dutra, s/n KM 154,7 Edifcio 36 Rio Comprido Rodovia BR 153, s/n Quadra CH Lote 11 e 12 Chcaras Retiro Rodovia BR 116, 5360 A KM 14 Bairro Pedras Rua Padre Jos de Quadros,204 Parque Industrial Rodovia PA 275, s/n KM 67 Zona Rural Travessa Anduzeiro, 19 Loteamento Rio Piorini Bairro Colnia Terra Nova Rua Interna 07, n 645 Pontezinha Avenida Senador Salgado Filho, n. 6.008, Uberaba Rua B, n. 632- Complemento L1 L5 com 2-AV. B ESQ/B-E Distrito Industrial Rua Conselheiro Travassos, n. 344, So Geraldo Avenida 22 de Maio, n. 4.100, Manoel dos Santos Cid Rodovia Presidente Dutra, KM 316, Galpo 2, rea A, Centro Rua Dezesseis, n 1, Mdulo 1, Quadra 1, Lote 1, Distrito Industrial

760 m2 8,064 m2 4,612 m2 818 m2 2,869 m2 120 m2 64 m2 80 m2 4,764 m2 1,882 m2

Rented Rented Rented Rented Rented Rented Rented

11,689 m2 13,552 m2 3,718 m2

1,849 m2 4,360 m2 297 m2

Rented Rented Rented Rented

4,200 m2 5,000 m2 1,500 m2 3,600M2 1,100 m2 2,880 m2 74,551.20 m2

1,200 m2 2,188 m2 650 m2 940 M2 780 m2 1,330.91m2 1,000 m2 2,399 m2

Rented Rented Rented Rented Rented Rented Rented Rented

76

All facilities used by the Company, whether they are owned or leased from third parties, are free of liens and charges.
Description of the fixed asset Real property Real property Land Land Equipment for rent (formwork, shoring and equipment machines) IT Equipment Facilities Construction in progress Country of Location Brasil Brasil Brasil Brasil Brasil Brasil Brasil Brasil Municipality of Location Type of propriety Rio de Janeiro Camaari Rio de Janeiro Camaari Type of propriety Owned Owned Owned Owned Owned Owned Owned Owned

b Patents, trademarks, licenses, concessions, franchises and contracts for technology transfer:
DURATION
UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED

BRAND Coverage Territory REGISTRATION N

6268625 740164244 780190670 7200595 800121546 829369724 812940792 821121316 821121324 200018167 817692177 817692215 817692223 817692231 6989454 6989462 200065726 608965065 800221737 812987683 812987691 813141010 813782414 815236662 830724915 830724931 824647548 824647556 NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL

Events that may cause the loss of the rights

Consequences of losing the rights

The requested brand registrations still not granted by the INPI may be refused. The granted registrations may be challenged through, invalidity lawsuites, in the event of a unvalid granted registration, either by revocational applications, partial or total, in case the brand is not being utilized, to mark all of the products or services included in the service registry certificate. In the judicial sphere, despide the Company already be a holder of several brands, we can not ensure that third parties will not claim that the Company violated the intellectual property rights and eventually obtain success in court. The Company is not aware of any procedure violation by the Company other than those described in this Reference Form. The brand registration maintenance are done by perioricaly fee payments to the INPI.

The impact cannot be qualified. The loss of rights over the brands imply the impossibility to prevent third parties from using the identical brands or similar to mark, specially, services or competing products, once the holder loses its right to use exclusively. There is also the possibility that the holder suffers criminal and civil lawsuits, for misuse in case of infringement of third parties, possibly resulting in the inability to use the brand to conduct their activities. Consequently, the Company would have to incur the costs related to the creation and promotion of any new brand, extraordinary marketing initiatives and use of human resources and managements time to deal with this situation.

DURATION
20 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS

PATENT Coverage Territory REGISTRATION N

PI 0705035-6 MU 7800863-8 MU 7801091-8 MU 7801367-4 MU 7801603-7 MU 7901814-9 MU 7902162-0 MU 7903337-7 NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL

Events that may cause the loss of the rights

Consequences of losing the rights

The requested brand registrations still not granted by the The impact cannot be qualified. The loss of rights over INPI may be refused. The granted registrations may be the brands imply the impossibility to prevent third challenged through, invalidity lawsuites, in the event of a parties from using the identical brands or similar to unvalid granted registration, either by revocational mark, specially, services or competing products, once 77 applications, partial or total, in case the brand is not being the holder loses its right to use exclusively. There is utilized, to mark all of the products or services included in also the possibility that the holder suffers criminal and the service registry certificate. In the judicial sphere, civil lawsuits, for misuse in case of infringement of despide the Company already be a holder of several third parties, possibly resulting in the inability to use brands, we can not ensure that third parties will not claim the brand to conduct their activities. Consequently, the

UNDETERMINED UNDETERMINED UNDETERMINED UNDETERMINED

830724915 830724931 824647548 824647556

NATIONAL NATIONAL NATIONAL NATIONAL

DURATION
20 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS 15 YEARS

PATENT Coverage Territory REGISTRATION N

PI 0705035-6 MU 7800863-8 MU 7801091-8 MU 7801367-4 MU 7801603-7 MU 7901814-9 MU 7902162-0 MU 7903337-7 MU 7903347-4 MU 8402798-3 MU 8901783-8 MU 8901887-7 NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL NATIONAL

Events that may cause the loss of the rights

Consequences of losing the rights

The requested brand registrations still not granted by the INPI may be refused. The granted registrations may be challenged through, invalidity lawsuites, in the event of a unvalid granted registration, either by revocational applications, partial or total, in case the brand is not being utilized, to mark all of the products or services included in the service registry certificate. In the judicial sphere, despide the Company already be a holder of several brands, we can not ensure that third parties will not claim that the Company violated the intellectual property rights and eventually obtain success in court. The Company is not aware of any procedure violation by the Company other than those described in this Reference Form. The brand registration maintenance are done by perioricaly fee payments to the INPI.

The impact cannot be qualified. The loss of rights over the brands imply the impossibility to prevent third parties from using the identical brands or similar to mark, specially, services or competing products, once the holder loses its right to use exclusively. There is also the possibility that the holder suffers criminal and civil lawsuits, for misuse in case of infringement of third parties, possibly resulting in the inability to use the brand to conduct their activities. Consequently, the Company would have to incur the costs related to the creation and promotion of any new brand, extraordinary marketing initiatives and use of human resources and managements time to deal with this situation.

c.

Companies in which the Company has a share participation

The Company does not have any subsidiaries or affiliated Companies 9.2 Other information the Company deems relevant

On January 19, 2011, the Company entered into a purchase and sale agreement to acquire 25% of the voting and total capital of Rohr for R$ 90 million, paid on February 8, 2011. Rohr is a private company specializing in access engineering and the provision of construction solutions, with more than 45 years of experience in the market. The company operates in the heavy construction and infrastructure, building construction, industrial maintenance and events sector. The Company does not participate in the management of Rohr, as this is a strategic acquisition, whereby the Company aimed to increase its presence in its areas of activity - infrastructure, residential and commercial construction, oil and gas, etc. (i) Company Name: Rohr S.A. Estruturas Tubulares (ii) Headquarter: Avenida Francisco Matarazzo, 1400 Conjunto 181, cidade de So Paulo, Estado de So Paulo, Brasil. (iii) Activities developed: Rohr is a private company specializing in access engineering and the provision of construction solutions, with more than 45 years of experience in the market. The company operates in the heavy construction and infrastructure, building construction, industrial maintenance and events sector. (iv) Ownership: 27.5% (v) Ownership profile: investment recorded at the cost of acquisition. (vi) CVM registration: not applicable (vii) Book value of participation: R$87.4 million (as of December 31, 2011) (viii) market value of ownership according to stock price at the date of the fiscal year, when such stocks are traded on organised markets of securities: not applicable (ix) appreciation or depreciation of such ownership, over the last 3 fiscal years, according to the book value: not applicable. On January 19, 2011, the Company entered into a purchase and sale agreement to acquire 25.0% of the voting and total capital of Rohr for R$90.0 million. In September 2011, there was a rise in the stake held in Rohr to 27.5%, resulting from the repurchase by Rohr of 9.0% of its shares held as treasury stock. (x) appreciation or depreciation of such ownership, over the last 3 fiscal years, according to the market value, to stock price at the date of the fiscal year, when such stocks are traded on organised markets of securities: not applicable
78

(xi) Dividends received in the 3 last fiscal years: 2011 R$1,346 thousand. 2010 - R$2,035 thousand. 2009 Not applicable (xii) reasons for the ownership acquisition and its maintenance: through this acquisition, the Company aimed to increase its presence in its areas of activity - infrastructure, residential and commercial construction and oil and gas.

10.

MANAGEMENT COMMENTS

79

10.1

The management should comment on.

a. Financial status and general assets

The management of the Company believes that the Company is one of the largest providers of specialized engineering services, the leading supplier of concrete formwork and tubular structures and motorized access equipment for the Brazilian market. The Company is also one of the leading providers of industrial services (access, industrial painting and thermal insulation) of Brazil, according to the magazine "O Empreiteiro". The company offers to its clients specialized engineering services, providing creative and differentiated solutions to major infrastructure projects, residential and commercial construction, and industrial maintenance and assembly. Our customized engineering solutions include planning, design, technical supervision and providing temporary structures for civil construction (such as formwork, shoring and scaffolding), industrial services (such as access services, industrial painting, surface treatment and thermal insulation for both stages of construction and maintenance of major industrial plants) and motorized access equipment (such as aerial work platforms and telescopic handlers), as well as technical assistance and specialized workforce. The Company believes that the sectors in which it operates will have a strong growth in coming years due (i) the favorable macroeconomic fundamentals and the increasing availability of credit in Brazil; (ii) the significant investment in infrastructure projects; (iii) the Brazilian governments low income housing program (Minha Casa, Minha Vida); (iv) the investments required for the World Cup in 2014 and the 2016 Olympic Games; and (v) the necessity for significant investment in various sectors of industry in Brazil, mainly in the oil and gas sector. The Company's revenues come mainly from rental of equipment and technical assistance services which accounted together 91% of Companys total net revenues which correspond to R$677.6 million in the fiscal year ended December 31, 2011. The revenue from the performance of services is recognized based on the measurement of the stages for performance of the services carried out through the reporting date. Revenue from the sale of merchandise is recognized when the significant risks and benefits of ownership of the merchandise are transferred to the buyer. Accordingly, the Company adopts the date on which the product is delivered to the buyer as the basis for its revenue recognition policy. Rental revenue is recognized on a prorated basis in monthly results on a straight-line basis, according to the equipment lease agreements. The Management of the Company believes that the current availabilities and its operational cash, together with its borrowing capacity, with proper leverage of EBITDA in relation to the Company's net debt are sufficient to comply with the investment plan and the need for working capital during the same period. The Management of the Company believes that the Company has financial conditions and sufficient assets in order to implement its business plan and to comply with its short and medium term obligations. Impact of Brazilian General Macroeconomic Conditions on its Financial Condition and Results of Operations. The Heavy Construction Division offers customized solutions to companies involved in major construction and infrastructure projects, while the Jahu Division is dedicated to providing services to residential and commercial construction companies. Customers of the Industrial Services Division are engaged in the heavy industry, including the oil and gas, chemicals and petrochemicals, construction and industrial assembly, pulp and paper, shipbuilding, mining, among others, while Equipment Rental Divisions products are focused on the rental, technical assistance and sale of motorized access equipment, these products are required by companies operating in various industries. All these sectors are directly affected by changes in macroeconomic conditions in Brazil, especially the growth of gross domestic product - GDP, interest rates, inflation, credit availability, unemployment level, exchange rates and commodity prices, the latter two because they affect the cost of equipment the Company uses in its activities. Consequently, these factors affect, indirectly, its operations and results.

80

In addition, the Companys operations and results of operations are directly affected by changes in (i) inflation rates, which are used as a reference for the adjustment of the prices paid under long-term contracts, (ii) interest rates, which affect the Companys financial obligations, (iii) fluctuating of prices of materials consumed in the construction job or fluctuating of the prices of maintenance of the equipment of the Company.

b. Capital structure and stock redemption possibility

According to the Company's balance sheet on December 31, 2011, the capital structure of the Mills was 57.1% equity, measured by the stockholders equity, and 42.9% capital from third party, measured by total liabilities. The management of the Company typically use both equity, from operating cash generation, and capital from third-party, though the contraction of new loans to finance the needs for investments in non-current assets and working capital of the company. For strategic operations, when necessary, the company may resort to the capital from their shareholders. There are no hypotheses of redemption of shares issued by the Company in addition to the legally provided for.

c. Financial commitments
The Companys EBITDA for the year ended December 31 st, 2011, was R$238.1 million and its financial expenses, net of financial revenue in the same period were R$31.8 million. Thus, the Companys EBITDA for year ended December 31st, 2011 presented a coverage ratio of 7.5 times its net financial expenses during the same period. Only considering its financial expenses, which amounted to R$46,6 million in the year ended December 31st, 2011, the coverage ratio would be 5.1 times. The Companys total indebtedness for the year ended December 31 st, 2011, amounted to R$ 410.9 million, or, 1.7 times the Companys EBITDA for the year ended December 31 st, 2011. The flow of payment from this debt will take place in a period of ten years, of which R$71.4 million in less than one year, R$184.7 million from 1 to 2 years, R$185.8 million in a period between 3 to 5 years and R$5.0 million in more than five years. The Companys long-term debt profile has a policy for contracting loans and financing aimed at ensuring that all financial commitments are honored, if necessary, through its cash generation. This way, the Company's Management believes that its cash generation is sufficient to meet its financial commitments. In addition, on December 31st, 2011, the Company had installment of tax payments on its balance sheet in the amount of R$ 18.7 million, which the greatest amount of payments of R$10.9 million, refers to the Tax Recovery Program (REFIS) with a maturity of 180 months. The lengthening of the payment of the installments within this period contributes to the Company to be able to timely make payments due. With regard to contractual limitations for assumption of new debt, there are clauses in the Company's bank credit contracts that require adherence to certain financial indicators, among which: the ratio between EBITDA and net debt, the ratio of net short-term debt and total net debt, and the ratio between net financial expenses and EBITDA. On the date of this Reference Form, the Company was within the limits of contractual financial indicators.

d. Source of financing for working capital and investments in non-current assets.

The investments from the Company in non-current assets and working capital are financed by its own cash generation and third party capital, through the contraction of new loans. For strategic operations, when necessary, the Company turns to its shareholders capital. In the year ended December 31st, 2010, the Company raised R$ 411 million through initial public offering of shares issued.
81

On April 2011, the Company issued R$270 million in non-convertible unsecured debentures, with maturity on April 18th, 2016. The nominal value will be amortized in three annual installments starting on the third year of the issuance, and shall pay semi-annually interest of 112.5% of accrued variation of the CDI interest rate. The net proceeds from the Offering were used for (a) the redemption of all commercial papers, issued under the first public offering of the Company, totaling R$ 30 million, (b) investments defined in the Mills expansion plan, including estimated investments of R$ 337 million in 2011, (c) rearrangement of cash balance following disbursement of R$ 90.0 million in February 2011 in connection with the acquisition of 25.0% of the Rohr S/A Estruturas Tubulares (Rohr) total capital stock, and (c) general corporate purposes and expenses of the Company. On December 7, 2011 the Company issued a single series of 3 (three) commercial promissory notes with unit face value of R$ 9.0 million, for a total amount of R$ 27.0 million with maturity on December 1 st, 2012. Remuneration interest charges will fall due corresponding to 100% of the accumulated variation in the average daily Domestic Demand (DI) rates, plus 1.10% per annum. Remuneration will be fully paid upon the maturity date.

e. Potential sources of financing used for working capital and for investments in noncurrent assets.
The Companys main sources of liquidity are: cash flow from our operations; financing agreements and through capital market; and increases in its capital stock.

The Companys main liquidity requirements are: investments for maintenance and increase of the equipment inventory; working capital needs; investments in the Companys facilities and the technology center, which are necessary to support its operations; investments in the improvement of processes and controls; investments in training and occupational safety; and distribution of dividends and payment of interest on equity.

The Management of the Company believes that the existing resources and the cash flow to be generated from its operations, along with its borrowing capacity, with proper leverage, will be sufficient to cover its investment plan and the need for working capital during the same period.

f. Debt level and composition: (i) relevant loan and financing contracts
The table below shows the outstanding balances of its loans and financings, organized by interest rate as of December 31st, 2009, 2010 and 2011:
Yearly Interest Rate 2009 As of December 31, 2010 2011

(in million of R$)

82

Financings provided by financial institutions Financings provided by financial institutions Leasing agreements entered into with financial institutions Unconvertible debentures Total ...............................................................................

CDI+1.1% to 4.5% TJLP+0.2% to 7.0% CDI + 1.0% to 4.5% 112.5% of CDI

101.5 4.3 78.1 183.9

41.9 17.8 72.9 132.6

62.1 22.1 52.2 274.6 410.9

Short Term Debt

As of December 31st, 2010, short-term debt amounted to R$46.7 million, compared to R$56.8 million as of December 31, 2009, a reduction of R$10.1 million or 17.8%. This reduction was due to the utilization of the initial public offering funds to advance higher cost debts. As of December 31st, 2011, short-term debt amounted to R$71.4 million, compared to R$46.7 million as of December 31, 2010, an increase of R$24.7 million or 52.9%. This increase was due to the need to finance, among other uses, working capital and general expenses of the company, to what the commercial promissory notes were issued in December 2011, in the amount of R27 million. This increase was due to the second issuance of commercial promissory notes, in the amount of R$ 27 million, for the recovery of the Company's cash after investments made in the year 2011 and uses and general expenses from the Company.

Long Term Debt

As of December 31st, 2010, long-term debt amounted to R$85.9 million, compared to R$127.1 million as of December 31, 2009, a decrease of R$41.2 million or 32.4%. This decrease was due to the utilization of the initial public offering funds to advance higher cost debts. As of December 31st, 2011, the Companys long-term debt amounted to R$339.5 million, compared to R$85.9 million as of December 31, 2010, an increase of R$253.6 million or 295.2%. This increase was mainly due to the need to finance, among other things, the acquisition of 25.0% of the capital of Rohr and investments in equipment purchase, for what there was debentures were issued, in April 2011, in the amount of R$ 270.0 million.

Relevant Financial Contracts

As of December 31st, 2011, the Company's debt with financial institutions totaled R$84.2 million, of which the main debts are described below.

Ita Unibanco S.A.

International Loan Agreement n 201030.1. The Company signed, on May 27th, 2011, a borrowing agreement with the Ita BBA S.A., in the total amount of R$25.4 million. The agreement contains usual terms of early maturity and financial covenants. Settlement of the borrowing will be in a single installment on May 28, 2013. As of December 31st, 2011, the outstanding amount under this contract was R$25.7 million. In order to annul the risk of exchange variation on this borrowing, originally contracted in foreign currency, on the same date as the borrowing, a swap was contracted with the same bank, so all the obligations are fully converted into local currency. The swap cost is already added to the debt cost.

Banco Bradesco S.A.

CCB. On April 18th, 2008, the Company issued a CCB in favor of Banco Bradesco S.A., in the amount of R$5.0 million. Payments on the note must be made in 48 monthly installments. The obligations assumed under the banking credit note above are secured by a pledge of receivables owed to the Company by Dow Chemical. The contract includes customary events of default, and provides for the acceleration of the debt upon a change of control, as well as in case of incorporation, spin-off, and merger or corporate reorganization of the Company. The payment must be made monthly, in 48 installments, with maturity on April 13th, 2012. As of December 31st, 2011, the outstanding amount under this CCB was R$0.4 million.
83

Banco do Brasil S.A.

The Company entered into two agreements with Banco do Brasil for the provision of overdrafts to cover working capital needs. The table below shows the main terms of these contracts:
CCB Number 345.500.737 345.500.724
(1)

Issue Date 05.27.2008 02.27.2008

Maturity Date 04.20.2013 01.25.2013

Original Value(1) 8.0 5.0

Outstanding as of December 2011(1) 2.4 1.2

In millions of R$

Banco Fibra S.A.

CCB. On April 11th, 2008, the Company issued a CCB in favor of Banco Fibra S.A., in the amount of R$6.0 million, to be paid in 48 monthly installments by April 10, 2013. The CCB includes customary events of default, and provides for the acceleration of the debt in case of a change of control, as well as in case of incorporation, spin-off, merger of our company, or on the occurrence of any event which may decrease our capacity to meet its obligations under the CCB. As of December 31, 2011, the outstanding amount under this CCB was R$3.3 million.

Debentures
On April 8, 2011 approval was granted for issue by the Company of a total of 27 thousand simple nonstock-convertible debentures in the total amount of R$ 270,0 million, and unit face value of R$ 10 thousand, issued on April 18, 2011. The debentures have maturity on April 18, 2016, with remuneration equivalent to 112.5% of the CDI rate and semi-annual payments of interest and amortization in 3 (three) consecutive installments, with the first mature date on April 18, 2014. The transaction costs associated with this issue, in the amount of R$ 2.4 million, are being recognized as Company funding expenses, in accordance with the contractual terms of the issue. As at December 31, 2011 the balance of the debentures, net of the transactions costs, is broken down to R$ 6,6 million under current liabilities and R$ 270,0 million under noncurrent liabilities (R$ 6,1 million and R$ 268,4 million net of transaction costs respectively).

Promissory Notes
On December 7, 2011 the Company issued a single series of 3 (three) commercial promissory notes with unit face value of R$ 9.0 million, for a total amount of R$ 27.0 million with maturity on December 1 st, 2012. Remuneration interest charges will fall due corresponding to 100% of the accumulated variation in the average daily Domestic Demand (DI) rates, plus 1.10% per annum. Remuneration will be fully paid upon the maturity date.

Leasing Agreements
Several leasing agreements which the Company entered are guaranteed through promissory notes. The table below shows the promissory notes which amounts are considered relevant:
Contract binding 569686 19340105656 176086 175796 100021789 100027813 100018086 Bank Itauleasing HSBC Bradesco Leasing Bradesco Leasing Alfa Arrendamento Mercantil Alfa Arrendamento Mercantil Alfa Arrendamento Mercantil Promissory Note R$6.25 million R$5.85 million R$5.62 million R$5.67 million R$4.88 million R$6.33 million R$6.89 million Contract binding 10.31.2008 05.25.2009 03.12.2009 09.08.2008 03.20.2008 07.01.2008 01.10.2008 Contract binding Issue Date 12/19/2013 07/01/2014 04/04/2014 09/11/2013 03/20/2012 06/01/2012 01/10/2012

As of the date of this Reference Form, the Company is part of several leasing agreements with several financial entities, representing obligations of R$52.2 million as of December 31st, 2011. The Company entered into such agreements as lessee, with the purpose of leasing (or in certain cases purchasing) the
84

equipment and other assets necessary for running its operations. Upon maturity of each leasing agreement, the Company has the option to return the equipment or assets to the respective lessor, or exercise an option to buy such equipment or asset. The amounts owed under these leasing agreements are repaid in monthly installments, subject to a minimum guaranteed payment corresponding to the lower amount for which the equipment or assets could be sold to a third-party.

(ii) other long-term relationships with financial institutions

The Company contracted with financial institutions, instruments for monetary exchange protection. These derivative instruments contracted by the Company have the intention to protect it, on their equipment import operations, in the interval between the placing of orders and nationalization against the risk of fluctuation in the exchange rate, and are not used for speculative means. On December 31st, 2011, the Company possessed purchase orders with foreign suppliers of equipment valued at approximately US$69.2 million (in 2010, these orders amounted to US$72.8 million, and in 2009, it amounted to US$34 million), all schedule for payment until December, 2012.

(iii) degree of subordination between the debts

Usually the Companys loans and financings are guaranteed by: (a) statutory lien (b) promissory notes (c) receivables which the Company is entitled during the course of its activities; (d) pledge; and (e) pledge of trade bills; The promissory notes are enforceable guarantees and serve as additional guarantees regarding loans and financings. Most of the guarantees offered by the Company refers to loans contracted in previous years, when the financial situation required that the Company offered substantial guarantees to facilitate its access to credit. After its initial public offer of shares held in April 2010, the Company conducted financing operations with real guarantee only for FINAME, credit line from BNDES to finance investments in manufacturing portion of its equipment, where, at the request of the financing contract, the equipment manufactured is disposed to the end of the financing contract. The Company believes that the existing terms relating to the provision of guarantees does not significantly restrict the ability to contract new debt to meet our capital needs.

(iv) any restrictions imposed on the issuer, in particular, for limits of indebtedness and contracting of new debts, the distribution of dividends, disposal of assets, the issuance of new securities or disposal of corporate control
Some of the Companys long-term financial instruments contain obligations relating to the maintenance of certain levels for determined financial indicators. The main conditions imposed on financial instruments entered into by the Company are: (i) the ratio between EBITDA and net debt (total bank debt minus cash equivalents); and (ii) the ratio between EBITDA and net financial expenses. Thus, the Company is required to maintain a relatively low indebtedness and a satisfactory capacity to pay its financial obligations, and the hiring of new borrowings should meet these prerequisites. On the fiscal years ended December 31st, 2009, 2010 and 2011, the Company was in compliance with the required levels for the indicators.

85

The Management of the Company believes that the current provisions will not significantly restrict the ability to recruit new debt to meet its capital needs.

g. limits of use of financing already concluded

On December 31st, 2011, the Company had approximately R$1,2 billion limit on credit operations (leasing, working capital, borrowings and long-term debt, derivatives and pledge) with major financial institutions operating in Brazil, and the amount of R$136.4 million has already been released to the Company and it is registered in its debt position.

h.

significant changes in each item of the financial statements

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Year ended December 31 (in millions of R$) 2009 Revenue of Products Sold e Services Provided Heavy Construction Division Jahu Division Industrial Services Division Equipment Rental Division Events Division (Discontinued) Cost of Products Sold e Services Provided Gross Profit Operating Revenues (Expenses) General and Administrative Operating Profit Financial Expenses Financial Income EBTIDA Income Tax and Social Contribution 404.2 146.2 62.2 141.4 54.4 (169.6) 234.6 VA
(1)

(%)

2010 549.9 154.3 105.1 195.4 95.1 (254.8) 295.1

VA(1) (%) 100% 28.1% 19.1% 35.5% 17.3% 46.3% 53.7%

HA(2) (%) 36.0% 5.5% 69.0% 38.2% 74.8% 50.2% 25.8%

2011 677.6 131.6 155.8 214.8 175.4 (340.4) 337.2

VA(1) (%) 100% 19.4% 23.0% 31.7% 25.9% 50.2% 49.8%

HA (%) 23.2% (14.7%) 48.2% 9.9% 84.5% 33.6% 14.3%

100% 36.2% 15.4% 35.0% 13.5% 42.0% 58.0%

(108.8) 125.8 (25.3) 0.9 101.4 (33.0)

26.9% 31.1% 6.3% 0.2% 25.1% 8.2%

(147.6) 147.5 (24.3) 18.7 141.8 (38.5)

26.8% 26.8% 4.4% 3.4% 25.8% 7.0%

35.7% 17.2% (4.0%) 1884% 49.8% 16.7%

(175.2) 162.0 (46.6) 14.7 130.1 (38.0)

25.9% 23.9% 6.9% 2.2% 19.2% 5.6% 13.6%

18.7% 9.8% 91.6% (21.3%) (8.3%) (1.4%) (10.7%)

Net Income for the 68.4 16.9% 103.3 18.8% 51.0% 92.2 Year (1) Vertical analysis, which is a percentage of total net sales and services. (2) Horizontal analysis, which is the percentage of variation in the income statement accounts between fiscal years indicated.

Year ended December 31st, 2011 compared with year ended December 31st, 2010 Revenue of Products Sold e Services Provided
In accordance with the existing accounting policies adopted in Brazil, the revenue reported in the income statement should include only the gross inflows of economic benefits received and receivable by the Company, when originating from their own activities. Amounts collected on behalf of third parties - such as sales taxes, taxes on goods and services and from taxes on added value - do not generate benefits for the Company and do not result in an increase in equity and therefore are excluded from revenue. Thus, the comments below relating to variations between the results for the years ended December 31st, 2009, 2010 and 2011 refer only to net revenue, not to the gross revenue. The following table shows the Companys net revenue by division for the years ended December 31st, 2010 and 2011:

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2010 Heavy Construction Division ....................... Jahu Division ............................................ Industrial Services Division ........................ Equipment Rental Division ......................... Total .....................................................
(1) (2)

Year ended December 31, VA (%)(1) 2011

VA (%)(1) 19.4% 23.0% 31.7% 25.9% 100%

HA (%)

(2)

(in million of R$)

154.3 105.1 195.4 95.1 549.9 28.1% 19.1% 35.5% 17.3% 100% 131.6 155.8 214.8 175.4 677.6 (14.7%) 48.1% 9.9% 84.5% 23.2%

Vertical analysis, which is a percentage of total net sales and services. Horizontal analysis, which is the percentage of variation in the income statement accounts between 2010 and 2011.

In the year ended December 31st, 2011 the Companys net revenue from sales and services totaled R$677.6 million, a new annual record, compared with R$549.9 million in the same period in 2010, an increase of R$127.7 million, or 23.2%. This increase comes from the incremental revenue from the Rental, Jahu and Industrial Services divisions, partially offset by the Construction division revenues decrease. The analysis of the Company's Management regarding the factors that led to these changes are listed below. Heavy Construction Division Net revenue from the Heavy Construction Division, decreased from R$154.3 million in the year ended December 31st, 2010 to R$131.6 million in 2011, a R$22.7 million reduction, or 14.7%. The Management of the Company attribute that this reduction was mainly due to the weakening of demand in the Heavy Construction segment from the end of 2010 to mid-2011. Jahu Division Net revenue from the Jahu Division, increased from R$105.1 million in the year ended December 31 st, 2010 to R$155.8 in 2011, an increase of R$50.7 million, or 48.1%. The Management of the Company attributed this expansion as a result of the investments made and the success of the geographic expansion of this division. Industrial Services Division Net revenues for the Industrial Services Division increased from R$195.4 million in the year ended December 31st, 2010 to R$214.8 million in 2011, an increase of R$19.4 million, or 9.9%. On the evaluation of the Management of the company, this revenue increase is mainly due to revenue growth in maintenance services. Rental Division Net Revenue from the Rental division increased from R$95.1 million in the year ended December 31 st, 2010 to R$175.4 million in 2011, an increase of R$80.3 million, or 84.5%. On the evaluation of the Management of the company, this increase is associated with the organic growth from this division, with increasing fleet of equipment and geographical expansion.

Taxes on Sales and Services

In accordance with existing accounting policies adopted in Brazil, the revenue reported in the financial statement should include only the gross inflows of economic benefits received and receivable by the Company, when originating from their own activities. Amounts collected on behalf of third parties - such as sales taxes, taxes on goods and services and from taxes on added value - do not generate benefits for the Company and do not result in an increase in equity and therefore are excluded from revenue. Thus, the Company has not reported for the years ended December 31, 2010 and 2011, figures comparable to this item posted for the year ended December 31, 2009.

Cost of Products Sold and Services Rendered and General, Administrative and Operating Expenses
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Since 2010, the Company began to detail its costs of goods sold and general and administrative expenses by division and by nature, and the information by division has been presented only on a consolidated basis, excluding the effects of depreciation. The table below shows the Companys cost of goods sold and services rendered by nature in fiscal years ended December 31, 2010 and 2011.
Year ended December 31, 2010 Direct cost of construction and renting General and Administrati ve Expenses Total Year ended December 31, 2011 Direct cost of construction and renting General and Administrati ve Expenses Total Variation 2010 x 2011(1) Direct cost of construction and renting General and Administrati ve Expenses Total

(in millions of R$)

Labor (122.3) (80.0) (15.0) (0.4) (6.2) (5.4) (8.5) (1.7) (0.5) (202.2) (20.1) (12.7) (30.5) (16.7) (14.7) (46.6) (0.5) (4.0) (1.5) (0.6) 2.6 (1.5) (0.6) 2.6 (162.3) (7.0) (13.4) (35.3) (10.0) (8.6) (73.0) 0.00 (4.6) (11.3) (3.1) (1.4) (7.9) (15.4) (175.2) (89.9) (17.4) (0.6) (4.1) (9.5) (11.4) (2.5) (0.7) (252.3) (24.4) (14.0) (39.3) (19.4) (20.0) (75.5) (0.7) (4.6) (11.3) (3.1) (1.4) (7.9) (41.7) (515.6) (40.1) (1.9) (1.1) (10.9) 1.3 (2.4) (28.1) 0.00 (0.5) 0.00 0.00 0.00 0.00 (1.9) (85.6) (10.0) (2.4) (0.2) 2.1 (4.1) (2.9) (0.8) (0.2) 0.00 (9.8) (2.5) (4.0) 9.7 (2.4) (27.6) (50.0) (4.3) (1.3) (8.9) (2.8) (5.3) (29.0) (0.2) (0.5) (9.8) (2.5) (4.0) 9.7 (4.3) (113.2)

Third-party (5.1) Services Freight (12.4) Construction Material / (24.4) Maintenance & Repair Rent (11.3) equipment Travel (6.2) Depreciation (44.9) Amortization of intangible 0.00 assets Asset (4.0) impairment Allowance for Doubtful Debts - ADD Stock Option Update provisions Profit sharing Other (24.4) Total (254.8) (1) Increase (decrease) of

(17.6) (17.6) (13.1) (37.4) (26.3) (147.6) (402.4) (340.4) the total recorded from one period to another.

The table below shows the Companys cost of goods sold and services rendered and general and administrative expenses by division in fiscal years ended December 31, 2010 and 2011. The information provided in this table does not reflect the effects of depreciation on such costs.
2010 x 2011 Var. (%)

2010 Heavy Construction Division ....................... Jahu Division ............................................. Industrial Services Division......................... Rental Division .......................................... Total .....................................................
(1) (2)

Year ended December 31, (%) (1) 2011 22.7% 17.2% 47.6 12.4% 100% (73.8) (89.8) (194.1) (81.8) (439.4)

(%)

(1)

(2)

(in millions of R$, except percentage)

(80.7) (61.3) (169.3) (44.1) (355.4) 16.8% 20.4% 44.2% 18.6% 100% (8.6%) 46.5% 14.6% 85.5% 23.6%

Percentage share of the division of goods sold and services rendered and general and administrative expenses. Percentage increase (decrease) of the total registered from one period to another.

Cost of goods sold and services rendered, excluding the effects of depreciation, went from R$209.9 million in the year ended December 31, 2010 to R$267.4 million year ended December 31, 2011, an increase of R$57.5 million, or 27.4%, mainly due to growth of the Companys business in 2011, both in number of transactions and contracts as geographically.
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The item cost of goods sold and services rendered which showed the largest absolute increase between fiscal years ended December 31, 2010 and 2011 was personnel item, which increased R$42.0 million, mainly influenced by the growth of Industrial Services and Jahu Divisions revenue, which were responsible for 76% of this increase. The depreciation of assets used in services rendered, which is part of the costs of goods sold and services rendered increased 61.9% due to higher investments in the fiscal year ended December 31, 2011, from R$46.6 million for the year ended on December 31, 2010 to R$75.5 million in the fiscal year ended December 31, 2011, maintaining the average depreciation period of 10 years. Considering the depreciation costs, the Companys cost of goods sold and services rendered totaled R$340.4 million in the fiscal year ended December 31, 2011, compared with R$254.8 million in the fiscal year ended December 31, 2010, representing an increase of 33.6%. As a result of these factors, compared to net operating revenues, the total cost of goods sold and services rendered, excluding the effects of depreciation, increased from 38.2% in the year ended December 31, 2010 to 39.4% in the year ended December 31, 2011. Including the effects of depreciation, the same ratio increased from 46.3% in the year ended December 31, 2010 to 50.2% in the fiscal year ended December 31, 2011. The general and administrative expenses increased from R$147.6 million in the fiscal year ended December 31, 2010 to R$175.2 million in the fiscal year ended December 31, 2011, an increase of R$27.6 million, or 18.7%. The main explanation for the increase was the need to develop technical and commercial teams in the new branches from the Jahu and Rental divisions, to meet the expansion of these divisions, which led to the hiring of new employees for this purpose. The ratio between the Companys operating, general, and administrative expenses in relation to the net operating income went from 26.8% in the fiscal year ended December 31, 2010 to 25.9% in the fiscal year ended December, 2011.

Operating profit
Operating profit before financial income increased from R$147.5 million in the fiscal year ended December 31, 2010 to R$162.0 million in the fiscal year ended December 31, 2011, an increase of R$14.5 million, or 9.8%. Such increase was a consequence of the recovery of the Heavy Construction and the maturation of the new branches from the Rental and Jahu division. Operating profit represented 23.9% of net revenues in December 31, 2011, compared to 26.8% of net revenues in December 31, 2010.

Financial Results
Net financial expenses increased from R$5.6 million in the fiscal year ended December 31, 2010 to R$31.8 million in the fiscal year ended December 31, 2011, representing an increase of R$26.2 million. The Company's bank debt, which was R$ 132.6 million in the fiscal year ended December 31, 2010 increased to R$410.9 million in the fiscal year ended December 31, 2011. On April from 2011, the Company issued its first debentures offering, a total amount of R$ 270.0 million. The Company used the net proceeds from the issuance for (a) the redemption of all 90 days commercial papers, issued on March 2011, totaling R$ 30.0 million, (b) investments defined in the Mills expansion plan, including part of estimated investments of R$ 337.0 million in 2011, (c) rearrangement of cash balance following the acquisition of 25.0% of Rohrs total capital stock, and (c) general corporate.

Income Tax and Social Contribution

Expenditure on income tax and social contribution went from R$38.5 million in the fiscal year ended December 31, 2010 to R$38.0 million in the fiscal year ended December 31, 2011, a decrease of R$0.5 million, or 1.3%.

89

In the fiscal year ended December 31, 2011, the Companys deduct from its income tax and social contribution the amount of R$8.3 million, due to the provisioning of interest on equity for distribution of part of the annual results, while in fiscal year ended December 31, 2010 this deduction totaled R$8.6 million. Moreover, the effective rate of 2011 was 29.2% after adjustment of expenses not deductible, compared with 27.2% in 2010.

Net Income
The net profit increased from R$103.3 million in the fiscal year ended December 31, 2010 to R$92.2 million in the fiscal year ended December 31, 2011, a decrease of R$11.1 million, or 10.8%, based on the combined effect of the components mentioned above.

Year ended December 31st, 2010 compared with year ended December 31st, 2009
The following table shows our net sales by division for the years ended December 31st, 2009 and 2010:
2009 Heavy Construction Division ....................... Jahu Division ............................................ Industrial Services Division ........................ Equipment Rental Division ......................... Total.........................................................
(1) (2)

Year ended December 31, VA (%)(1) 2010 36.2% 15.4% 35.0% 13.5% 100% 154.3 105.1 195.4 95.1 549.9

VA (%)(1) 28.1% 19.1% 35.5% 17.3% 100%

HA (%)

(2)

(in millions of R$, except percentages)

146.2 62.2 141.4 54.4 404.2 5.5% 69.1% 38.2% 74.8% 36.0%

Vertical analysis, which is a percentage of total net sales and services. Horizontal analysis, which is the percentage of variation in the income statement accounts between fiscal years of 2009 and 2010.

In the year ended December 31st, 2010 the Companys net revenue from sales and services totaled R$549.9 million compared with R$404.2 million in the same period in 2009, an increase of R$145.7 million, or 36.0%. This increase comes from the increase in revenues from all divisions. Heavy Construction Division Net revenue from sales and services rendered by the Heavy Construction division, after deductions for discounts and cancellations, increased 5.5%, or R$8.1 million, from R$146.2 million in 2009 to R$154.3 million in 2010. This increase was mainly due to more revenue from technical support services and sales, which increased from R$20.9 million to R$32.4 million in 2010, partially offset by a reduction of R$3.5 million, or 2.8%, in revenue from equipment rental. The increase of volume of equipment rented contributed to the decrease of revenue from equipment rental amounting to R$5.0 million, while the combination of rental price and mix of rented equipment led to a reduction in rent revenue in the amount of R$8.5 million, reflecting the weakening demand in the heavy construction segment from September 2010. Jahu Division Net income for the Jahu Division went from R$62.2 million in the fiscal year ended December 31, 2009 to R$105.1 million in the fiscal year ended 2010, an increase of R$42.9 million, or 69.1% due mainly to the increase in equipment rental revenue which contributed 55% of the total increase and the increase in sales revenue which contributed 34% of the total increase. The remaining percentage of 11% of the increase was due to higher revenues from technical assistance services and indemnities in the ordinary course of operations received from customers due to equipment lost or damaged. Between the fiscal years ended December 31, 2009 and 2010, revenue from equipment rental has increased R$23.5 million, or 40.4%, of which the increase in volume helped to expand the rental revenue in R$28.8 million, while the combination of rental price and mix of equipment led to a reduction in rental revenue in the amount of R$5.3 million.
90

Industrial Services Division Net revenues for the Industrial Services Division increased from R$141.4 million in the fiscal year ended December 31, 2009 to R$195.4 million in the fiscal year ended December 31, 2010, an increase of R$54.0 million, or 38.2%, as explained below. In the year ended December 31, 2010, the services performed in the construction of new plants contributed with R$56.9 million, or 29.1% of total net revenues, while maintenance services accounted for R$138.5 million, or 70.9% of total revenue. Of the total increase occurred between the fiscal years ended December 31, 2009 and 2010, the services performed in the construction of new plants were responsible for 12.8%, while maintenance services accounted for 87.2%. Rental Division Net revenue from sales and services of the Rental Division went from R$54.4 million in the fiscal year ended December 31, 2009 to R$95.1 million in the fiscal year ended December 31, 2010, an increase of R$40.7 million, or 74.8%, mainly due to organic growth in this division with the increase of the fleet of equipment. The growing market for this type of equipment, still in its initial stage, has enabled the rapid uptake of this fleet. In the year ended December 31, 2010, 89.3% of net revenue of the Rental Division was due to equipment rental, while the remaining 10.7% was related to sales and technical assistance services. Between the fiscal years ended December 31, 2009 and 2010, equipment rental revenue has increased from R$83.8 million, or 66.2%, and the increase in volume helped to expand the leased rent revenue in the amount of R$42.5 million, while the combination of rental price and mix of equipment led to a reduction in equipment rental revenue in the amount of R$8.7 million.

Taxes on Sales and Services

In accordance with accounting policies adopted in Brazil in force, the revenue reported in the income statement should include only the gross inflows of economic benefits received and receivable by the Company, when originating from their own activities. Amounts collected on behalf of third parties - such as sales taxes, taxes on goods and services and from taxes on added value - do not generate benefits for the Company and do not result in an increase in equity and therefore are excluded from revenue. Thus, the Company has not reported for the year ended December 31, 2010, figures comparable to this item posted for the year ended December 31, 2009.

Cost of Products Sold and Services Rendered and General, Administrative and Operating Expenses
From 2010, the Company began to detail its costs of goods sold and general and administrative expenses by division and by nature. The information by division has been presented only on a consolidated basis, excluding the effects of depreciation. The table below shows our cost of goods sold and services rendered by nature in fiscal years ended December 31, 2009 and 2010.
Year ended December 31, 2009 Year ended December 31, 2010 Variation 2009-20101) Genera l and Direct Admini cost of strativ construct e ion and Expens renting es Total (39.1) (0.1) (25.4) (6.1) (64.6) (6.2)

Direct cost of constructi on and renting (83.1) Labor ............................................................... (5.0) Third-party Services ...........................................

General and Administr ative Expenses (54.5) (8.8)

Total (137.6) (13.9)

Direct cost of construct ion and renting (122.3) (5.1)

General and Administ rative Expenses (80.0) (15.0)

Total (202.2) (20.1)

(in millions of R$)

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(6.4) Freight ............................................................. Construction Material / Maintenance & (13.9) Repair .............................................................. (13.7) Rent equipment ................................................ (3.7) Rent others ....................................................... (4.4) Travel .............................................................. (30.3) Depreciation ..................................................... Amortization of intangible assets ......................... (0.3) Asset impairment .............................................. (7.5) Sales ................................................................ Debtors Provision .............................................. Action Plan ....................................................... Update provisions .............................................. Profit sharing .................................................... (1.2) Other ............................................................... (169.6) Total ...............................................................
(1)

(0.9) (6.8) (3.5) (4.4) (1.2) (0.3) (3.5) (4.1) 1.5 (13.8) (8.5) (108.8)

(7.2) (20.8) (13.7) (7.2) (8.8) (31.5) (0.3) (0.3) (7.5) (3.5) (4.1) 1.5 (13.8) (9.7) (278.4)

(12.4) (24.3) (4.9) (6.4) (6.2) (44.9) (4.0) (23.2) (1.2) (254.8)

(0.4) (6.2) (5.4) (8.5) (1.7) (0.4) (1.5) (0.6) 2.6 (17.6) (13.0) (147.6)

(12.7) (30.5) (4.9) (11.8) (14.7) (46.6) (0.4) (4.0) (23.2) (1.5) (0.6) 2.6 (17.6) (14.2) (402.4)

(6.0) (10.4) 8.8 (2.7) (1.8) (14.6) (3.7) (15.8) 0.1 (85.2)

0.5 (0.7) (1.9) (4.1) (0.5) (0.1) 2.0 3.5 1.1 (3.7) (4.6) (38.8)

(5.5) (9.7) 8.8 (4.6) (5.9) (15.1) (0.1) (3.7) (15.8) 2.0 3.5 1.1 (3.7) (4.5) (124.0)

The table below shows the Companys cost of goods sold and services rendered and general and administrative expenses by division in fiscal years ended December 31, 2009 and 2010. The information provided in this table does not reflect the effects of depreciation on such costs.
Year ended December 31, (%) (1) 2010 29.4% 12.3% 48.9% 9.4% 100% (80.7) (61.3) (169.3) (44.1) (355.4) 2009 x 2010 Var. (%)

Increase (decrease) of the total recorded from one period to another.

2009 Heavy Construction Division ....................... Jahu Division ............................................. Industrial Services Division......................... Rental Division .......................................... Total .....................................................
(1) (2)

(%)

(1)

(2)

(in millions of R$, except percentage)

(72.6) (30.3) (120.6) (23.1) (246.5) 22.7% 17.2% 47.6% 12.4% 100% 11.2% 102.3% 40.4% 90.9% 44.2%

Percentage share of the division of the total cost. Percentage increase (decrease) of products sold and services rendered costs in 2009, relative to 2008.

Cost of goods sold and services rendered (excluding the effects of depreciation) increased by 50.7%, or R$70.6 million, from R$139.3 million in 2009 to R$209.9 million in 2010. This increase was mainly due to growth of our business in 2010. The item cost of goods sold and services rendered which showed the largest absolute increase between fiscal years ended December 31, 2009 and 2010 was personnel item, which increased R$39.1 million, mainly influenced by the growth of Industrial Services Divisions revenue, which is workforce intensive. The sale item, which represents the cost of equipment sold by the Company, increased R$15.8 million, driven primarily by the increase of sales revenue and of the mix of equipment sold in 2010. The depreciation of assets used in services rendered, which is part of the costs of goods sold and services rendered increased 47.8% due to higher investments in the fiscal year ended December 31, 2010, from R$30.3 million for the year ended on December 31, 2009 to R$44.9 million in the fiscal year ended December 31, 2010, maintained the average depreciation period of 10 years. Considering the depreciation costs, our cost of goods sold and services rendered totaled R$254.8 million in the fiscal year ended December 31, 2010, compared with R$169.6 million in the fiscal year ended December 31, 2009, representing an increase of 50.2%. As a result of these factors, compared to net operating revenues, the total cost of goods sold and services rendered, excluding the effects of depreciation, increased from 34.4% in the year ended December 31, 2009 to 38.2% in the year ended December 31, 2010. Including the effects of depreciation, the same
92

ratio increased from 42.0% in the year ended 31 December 2009 to 46.3% in the fiscal year ended December 31, 2010. The general and administrative expenses increased from R$108.8 million in the fiscal year ended December 31, 2009 to R$147.6 million in the fiscal year ended December 31, 2010, an increase of R$38.8 million, or 35.7%. This increase was due primarily to the employment of additional labor which contributes to an increase of R$25.4 million. Our total number of employees increased from 907 at the end of 2009 to 1,261 at the end of 2010, an increase of 39% to meet an increase in demand for our services and the strong geographic expansion, mainly from the Rental Division and the Jahu Division. The Companys operating general, administrative and operating Expenses compared to net operating income were maintained at 27% in the fiscal years ended December 31, 2009 and 2010.

Operating profit
Operating profit before financial income increased from R$125.8 million in the fiscal year ended December 31, 2009 to R$147.5 million in the fiscal year ended December 31, 2010, an increase of R$21.7 million, or 17.2%. This increase was because the growth in net revenues was higher than the growth of cost of goods sold and services rendered and general and administrative expenses. Operating profit represented 26.8% of net revenues in December 31, 2010, compared with 31.1% of net revenues in December 31, 2009.

Financial Results
Net financial expenses increased from R$24.4 million in the fiscal year ended December 31, 2009 to R$5.6 million in the fiscal year ended December 31, 2010, representing a decrease of R$18.8 million, or 77.0%. The Company's bank debt, which was R$183.9 million in the fiscal year ended December 31, 2009 increased to R$132.6 million in the fiscal year ended December 31, 2010. In April 2010, the Company completed its initial public offering of shares which resulted in net proceeds of R$411 million. The Company used part of these proceeds to settle debts of higher costs. Financial income on December 31, 2010 was benefited by the financial gain with interest of low risk applications of The Companys cash, which totaled R$17.3 million in the fiscal year ended December 31, 2010.

Income Tax and Social Contribution

Expenditure on income tax and social contribution went from R$33.0 million in the fiscal year ended December 31, 2009 to R$38.5 million in the fiscal year ended December 31, 2010, an increase of R$5.5 million, or 16.7%. This increase was lower than in the Companys profit before taxes due to dividend payments in the form of interest on equity. In the fiscal year ended December 31, 2010, the Company deducted income tax and social contribution the amount of R$8.6 million, due to the provisioning of interest on equity for distribution of part of the annual results, while in fiscal year ended December 31, 2009 this deduction totaled R$1.9 million. Moreover, the effective tax rate of 2010 was 27% after adjustment of non deductible expenses, compared with 32% in 2009.

Net Income
The net profit increased from R$68.4 million in the fiscal year ended December 31, 2009 to R$103.3 million in the fiscal year ended December 31, 2010, an increase of R$34.9 million, or 51%, based on the combined effect of the components mentioned above.

Year ended December 31, 2011 compared to year ended December 31, 2010
Current Assets
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The Companys current assets increased from R$307.9 million as of December 31, 2010 to R$224.9 million as of December 31, 2011, a decrease of R$83.0 million or 27.0%. The main reasons for such increase, in the assessment of the Management of the Company, were: a reduction of R$136.1 million in securities and marketable securities, the outstanding amount was completely used during the acquisition of Rohrs share and other investments of the Company; an increase of R$29.0 million in cash, cash equivalents, due to proceeds from the Companys primary offering of debentures held in April 2011; an increase of R$17.0 million in accounts receivable, reflecting an increase in the Companys revenue; an increase of R$5.6 million in inventories due to the expanding activities of the Company;

Non-current Assets The Companys non-current assets of R$23.1 million as of December 31, 2010 was increased to R$58.0 million as of December 31, 2011 an increase of R$34.9 million or 151.1%. The main variations in the noncurrent assets were: an increase of R$27.7 million in the taxes recoverable account, referring to claims of PIS Programa de Integrao Social and COFINS - Contribuio para Financiamento da Seguridade Social on fixed assets, given the need to change the calculation method of 1/12 to 1/48. The Company not agreeing with the interpretation from the IRS, filed a petition for a writ of mandate in order to continue to use the credits to a ratio of 1/12 and; an increase of R$8.1 million in the deferred taxes account due to the increase of provisions for losses by the reduction of the recoverable value of the receivables and since on December 31, 2011 being presented gross from deferred liabilities.

Investment
In 2011 the Company registered an investment value of R$87.4 million. In January, 2011 it acquired 25.0% of the total voting capital of Rohr for R$ 90.0 million. The Company received in 2011, R$2.6 million of shareholder remuneration from Rohr related to previous fiscal years than 2011, and therefore was recorded as a reduction for the acquisition investment.

PPE Property, Plant and Equipment

The Companys PPE increased from R$551.2 million at December 31, 2010 to R$872.9 million at December 31, 2011, an increase of R$321.7 million, or 58.4%. On the evaluation of the Company, the increase in this category, plus depreciation and write-offs, reflects the investments made by the Company to meet the increasing demands of their clients increased customer demand.

Intangible assets
The Companys intangible assets increased from R$41.9 million as of December 31, 2010 to R$45.5 million as of December 31, 2011, mainly due to R$2.6 million in software acquisition and R$2.0 million of goodwill from the acquisition of GP Andaimes Sul Locadora Ltda (GP Sul).

Current liabilities
The Companys current liabilities increased from R$160.8 million as of December 31, 2010, to R$177.7 million as of December 31, 2011, an increase of R$16.9 million. The main factors that led to this change, according to the Managements opinion, were:
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increase of R$18.6 million in the short-term loans and financing balance, due to the issuance of promissory notes in December 2011, to enable the Companys investments in 2011; decrease of R$9.6 million in the profit sharing payable account, due to the reduction of the variable remuneration program EVA in the year of 2011, in comparison with 2010; reduction of R$7.0 million in the Companys derivative financial instruments account, due to the settlement of the hedge contracts and also the Dollar variations; increase of R$6.1 million, in the short-term debentures balance, due to the debentures offering in April 2011, in the amount of R$270 million; increase of R$3.2 million in the trade payables account, due to the higher investment volume in 2011; increase of R$3.7 million in salaries and payroll charges, due to the increase in payroll resulting from the higher number of employees necessary to accommodate the increased volume of business.

Non-current liabilities
The non-current liabilities increased from R$108.2 million as of December 31, 2010 to R$374.7 million as of December 31, 2011, an increase of R$266.5 million, or 246.3%. The main factor that led to this variation according to the Managements opinion, was the R$268.4 million increase in the long-term debenture account, due to the debenture issuance in April 2011, in the amount of R$270.0 million. Additionally, the deferred tax liability started to be presented as gross.

Stockholders' equity
Shareholder's equity increased from R$655.2 million as of December 31, 2010 to R$736.1 million as of December 31, 2011, an increase of R$80.9 million, or 12.3%, substantially due to the increase of the Companys income reserve. As a result of the exercise of the right of withdrawal by dissident shareholder of the deliberations of the extraordinary general meeting held on August 1, 2011, the company repaid to the unrealized profit reserve, issuing 99,140 of its own shares, for R$535 thousand. On September 23, 2011 approval was granted by the Board of Directors to a motion to cancel all the shares.

Year ended December 31, 2010 compared to year ended December 31, 2009
Current Assets
The Companys current assets increased from R$104.5 million as of December 31, 2009 to R$307.9 million as of December 31, 2010, an increase of R$203.5 million or 194.6%. The main reasons for such increase were: an increase of R$140.8 million in cash, cash equivalents and marketable securities due to the proceeds from the primary public offering of shares of the Company held in April 2010; increase of R$50.6 million in its trade receivables, reflecting an increase in its revenues; an increase of R$7.3 million in other assets due to the increase in advances to suppliers account in the amount of R$5.3 million, the number of imports of equipment and the loans and benefit to employees account amounting to R$1.5 million; an increase of R$4.2 million in inventories due to the expanding activities of the Company;

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Non-current Assets The Companys non-current assets of R$20.6 million as of December 31, 2009 were increased to R$23.1 million as of December 31, 2010 an increase of R$2.5 million or 12.1%. The main changes in its noncurrent assets were: an increase of R$3.8 million in taxes recoverable account, referring to claims of PIS - Programa de Integrao Social and COFINS - Contribuio para Financiamento da Seguridade Social on fixed assets that was reclassified from short-term to long term; an increase of R$1.4 million in the judicial deposits account due to the monetary update of historical value of deposits recorded that was made on December 31, 2010, and; reduction of R$2.0 million in the deferred tax account, affected by the amortization of R$1.5 million on deferred taxes of a tax credit previously held by Itapo Participaes Ltda. as a result of its merger by the Company.

PPE Property, Plant and Equipment

The Companys PPE increased from R$276.0 million as of December 31, 2009 to R$551.2 million as of December 31, 2010, an increase of R$275.2 million, or 100%. The increase in this category, plus depreciation and write-offs, reflects the investment the company has made to meet increased customer demand.

Intangible assets
The Companys intangible assets increased from R$39.3 million as of December 31, 2009 to R$41.9 million as of December 31, 2010. The main component of its intangible asset is the balance of goodwill accounted on acquisition of Kina Participaes Ltda and Jahu Industria e Comercio Ltda. Under accounting rules in force, goodwill recorded in this acquisition is no longer amortized by book value, but only for tax purposes, being subject only to tests of impairment.

Current liabilities
The Companys current liabilities increased from R$119.4 million as of December 31, 2009, to R$160.8 million as of December 31, 2010, an increase of R$41.4 million. The main factors that led to this change were: Increase of R$21 million, in its accounts payable, due to the higher volume of investment in 2010; Increase of R$11.9 million in dividends and interest on shareholders equity payable due to the increase in net profit in 2010 compared to 2009, maintaining the policy of distributing shareholders 25% of these results, with some adjustments; Decrease of R$10.1 million in its outstanding short-term loans and financing due to the utilization of the initial public offering funds to advance higher costs debts; Increase of R$8.1 million in other current liabilities, due to the increase in its derivative financial instruments account, the Company contracted derivative financial instruments in order to protect transactions carried out in foreign currency, Increase of R$6.5 million in salaries and social charges payable, due to the increase in payroll resulting from the higher number of employees necessary to accommodate the increased volume of business;

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Increase of R$3.7 million in its account of profit sharing payable, due to the increase in net profit in fiscal 2010, compared to 2009;

Non-current liabilities
The Companys Non-current liabilities were reduced from R$148.2 million at December 31, 2009 to R$108.2 million at December 31, 2010, a decrease of R$40.1 million or 27%. The main factors that led to this change were: Decrease of R$41.2 million in its long-term loans and financing account, due to the utilization of the initial public offering funds to advance higher costs debts; Increase of R$2.6 million in its account of provision for contingencies, mainly due to the inclusion in 2010 of contingency related to the Fator Acidentrio Previdencirio - FAP in the amount of R$2.1 million and inclusion of new cases in the civil area of R$0.7 million; Reduction of R$1.0 million into the account the Tax Recovery Program - REFIS, mainly due to the low of R$2.7 million related to PIS and COFINS, partially offset by the rate of Special System for Settlement and Custody ("Sistema Especial de Liquidao e Custdia - SELIC") updating the value of R$1.0 million.

Stockholders' equity
Shareholder's equity increased from R$172.6 million as of December 31, 2009 to R$655.2 million as of December 31, 2010, an increase of R$482.5 million, or 279%, substantially due to the increase of Companys share capital as a result of the initial public offering of shares in April 2010. CASH FLOW
2009 Cash flow from operating activities ................................................................... 89.7 (71.5) Cash flow from investment activities ................................................................. (18.4) Cash flow from (used in) financing activities ..................................................... Increase (decrease) in liquidity......................................................................... (0.2) Years ended December 31, 2010 2011

(in millions of R$)

121.6 (461.8) 344.8 4.6

140.6 (359.4) 247.8 29.0

Cash Flow from Operating Activities

Between 2009 and 2011, the Company was able to improve significantly its operating results, as discussed above, improving its cash flow from operating activities, that in 2009, was R$89.7 million, increasing to R$121.6 million in 2010 and reaching R$140.6 million in 2011, an increase in 2010 and 2011 of 35.6% and 15.6% respectively. On the evaluation of the Management of the Company, the realized investments were key drivers for this improvement, that enabled the Company, in an increasing market demand, to increase significantly its revenues and operational results.

Cash Flow from Investment Activities

The gross investments in fixed assets during the years ended December 31, 2009, 2010, and 2011 amounted to R$76.4 million, R$348.5 million and R$430.3 million, respectively. In 2009, as a result of the global financial crisis, the Company reduced its gross investments when compared to 2008, decreasing in R$99.2 million. In 2010, the Initial Public Offering of shares of the Company provided net proceeds of R$411 million, which enabled the Company to expand its investments in all divisions to meet the growing demand in markets where it operates. In 2011, the Company maintained its level of investment in organic growth, in addition to the acquisition of 25.0% stake of Rohr and the total the capital of GP Sul at R$87.4 million and R$5.5 million, respectively. The table below shows the investments made in 2009, 2010 and 2011:
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Year Ended December, 31 2009 2010 2011 Gross investments, before PIS and COFINS credits ............................................ Acquisition of Rohrs stake Remuneration from Rohrs stake Acquisition of GP Sul Total Gross investments ................................................................................... PIS and COFINS credits ................................................................................... Net investments .............................................................................................. (76.4)

(in millions of R$)

(348.5)

(76.4) 14.5 (61.9)

(348.5) 19.4 (329.1)

(430.3) (90.0) 2.6 (5.5) (523.2) 29.5 (493.7)

Cash Flow from Financing Activities

The cash flow from financing activities includes new loan agreements, the amortization of the principal and payment of interest on existing loans, as well as increases in the capital stock, and dividend payment. In 2009, due to a less favorable credit conditions prevailing during the first half of the year, the Company was highly selective in its new operations and entered into financing agreements in the amount of only R$31.9 million, in comparison to amortizations and interest payments of R$62.1 million in the year. In 2010, the Company completed its Initial Public Offering which generated net proceeds of R$411 million and allowed the Company to expand its investments across all divisions to meet the growing demand in the markets which it serves and to liquidate part of the more expensive debt. The Company is committed to maintain its total indebtedness at manageable levels in relation to its cash flows, in terms of deadlines and values. In 2011, the Company completed its first debentures issuance on a total amount of R$270.0 million with maturity of five years, and issued commercial promissory notes totaling R$27.0 million, maturing in December 1, 2012. 10.2 The directors must comment on

a.

Results of the Companys operations, in particular:

(i) description of important components of revenue

Net Revenue from Sales and Services

The net revenues from sales and services are denominated in reais, and are derived from the rental and sale of equipment, the provision of technical support services, and penalty payments for unreturned or damaged equipment. The table below sets forth the breakdown of the net revenue for the periods indicated:
Year ended December 31, 2009 2010 2011 62.2% 67.0% 70.0% 6.7% 6.0% 3.1% 27.5% 23.6% 25.7% 3.5% 3.4% 1.2%

Equipment Rental ........................................................................... Sale of Equipment ........................................................................... Technical Support Services .............................................................. Indemnifications .............................................................................

(ii) Factors that affected materially operational outcomes Cost of Products Sold and Services Rendered
Its main cost of products sold and services rendered relates to costs for executing the projects in which the Company are involved, including (i) personnel for assembly and disassembly of equipment rented to its clients when such tasks are carried out by the Company; (ii) cost of the equipment sub-leased from third parties when the Companys inventories are insufficient to meet demand; (iii) cost of materials used in the provision of its services, which include individual safety equipment, wood, paint and insulation
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material; and (iv) freight costs relating to the transportation of equipment between its branches and to its clients. Costs related to the execution of its projects represented 94.4%, 87.0% and 78.5% of its principal costs of sales and services rendered in the years ended December 31, 2009, 2010 and 2011, respectively. On the evaluation of the company's Management, this reduction was due to the expansion of equipment sales costs, mainly in the Jahu and Rental divisions. In addition, the Company incurred in (i) costs deriving from the sale of equipment; (ii) depreciation of equipment rented; (iii) expenses with equipment storage, as from and including 2011; and (iv) cost of write-offs (derecognition) of assets. The cost of products sold and services rendered by its Heavy Construction, Jahu and Rental divisions tends to grow less than their net revenues, as some components of these costs do not grow at the same rate of the revenue. As for the Industrial Services Division, which by the nature of its activities require the use of more workforce, variation tends to be directly related to the change in net revenue.

General, Administrative and Operating Expenses

The Companys main general, administrative and operating expenses refer to contract coordination, encompassing the project teams and engineers in the commercial area, are responsible for the management and supervision of each of its projects, which correspond basically to salaries, payroll charges and benefits, with the rest relating to travel, representation and communications expenses, as well as the overhead of the administrative areas. Due to the nature of its business, the Company does not have a department only dedicated to sales. Expenses related to the management of its contracts represented 46.2%, 47.8% and 57.3% of its total general, administrative and operating expenses during the fiscal years ended December 31, 2009, 2010 and 2011, respectively. According to the Companys Management, this increase was mainly due to the need to form technical and commercial teams in the new branches of the Jahu and Rental divisions. Other material general, administrative and operating expenses include: (i) expenses relating to equipment storage until 2010, inclusive, (ii) administrative expenses incurred with respect to its financial, investor relations, and human resources departments, as well as its executive management, including salaries and benefits, (iii) expenses in connection with the Companys employee profit-sharing plans and expenses related to its stock option plans, and (iv) other administrative expenses, which include, in particular, expenses resulting from adjustments to its provisions for contingencies.

Financial Results
The Companys financial results consist of its financial expenses, net of financial revenues. The Companys main financial expenses include interest payments on loans, leasing operations, and costs associated with discounting to present value certain long-term receivables derived from the sale of equipment owned by its former Events division. Its main financial revenues consist of income from its financial investments and interest in connection with late payments by its clients.

Income and Social Contribution Taxes

Income and social contribution taxes are calculated in accordance with Brazilian tax laws and regulations in force at the date of presentation of its financial statements. Deferred income and social contribution taxes are calculated in accordance with accumulated tax losses, accumulated bases of social contributions, and the corresponding temporary differences between the asset and liability tax bases and the accounting values entered in the financial statements. The current income and social contribution tax rates applicable to the calculation of such deferred credits are 25.0% and 9.0%, respectively.

b. Changes attributable to changes in prices, volume changes and introduction of new products and services.

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The Companys revenues have a direct correlation with changes in price and volume of equipment rented to clients. Introduction of new products and services also directly impact revenue. As for inflation, the correlation of its revenue is indirect, in the extent that the adjustments take place only in the renewal or closing of new contracts, reflecting the past inflation. As regards to the exchange rate fluctuation, currently there is no correlation to its revenue, except that the Rental division's equipment are imported and hence have their acquisition cost in foreign currency. Consequently, in the future, the rental revenue from this division may be influenced by possible in exchange rates variations. In terms of volume, the revenue variation for the Heavy Construction division was affected by the volume decrease from the end of 2010, and only recovering at the second half of 2011. The increased revenue from the Jahu and Rental divisions over the past three years are the result of the increase in the volume of rented equipment and sales, given favorable market conditions and its geographic expansion.

c. Impact of inflation, price variations of main inputs and products, exchange rate and interest rate on operating profit and the issuer's financial result
The Companys expenses are subject to impact of inflation via wage increases for employees, a raise in the cost of the hired services, such as freight, and inputs used in the provision of services, such as paints and materials for thermal insulation. Moreover, the equipment the Company invests in to use at its services are also subject to increases due to inflation and changes in commodity prices, mainly steel and aluminum. In the case of Rental division, the prices of the equipment the Company uses can increase according to the fluctuation of the exchange rate. 10.3 Relevant effects on Financial statements

a.

Introduction or disposal of operating segment

The Company did not introduce or disposed any operating segment in the analyzed period.

b.

Constitution, acquisition or divestiture of shareholdings

Acquisition of 25% of Rohr S/A Estruturas Tubulares

On January 19, 2011, the Company entered into a purchase and sale agreement to acquire 25.0% of the voting and total capital of Rohr for R$ 90.0 million, paid on February 8, 2011. In September 2011, there was a rise in the stake held in Rohr to 27.5%, resulting from the repurchase by Rohr of 9% of its shares held as treasury stock. Rohr is a private company specializing in access engineering and the provision of construction solutions, with more than 45 years of experience in the market. The company operates in the heavy construction and infrastructure, building construction, industrial maintenance and events sector. The Company will not participate in the management of Rohr, as this is a strategic acquisition, whereby Mills aims to increase its presence in its areas of activity - infrastructure, residential and commercial construction, oil and gas, etc.

Acquisition of GP Sul
On May 27, 2011, the Company entered into a purchase and sale agreement to acquire 100% of the voting and total capital of GP Sul for R$ 5.5 million. GP Sul, is a privately held company, located in Porto Alegre, and one of the largest players in the suspended scaffold rental market to residential and commercial construction in the state of Rio Grande do Sul. On the evaluation of the Management of the Company, this strategic acquisition enabled the Company to become the leader in the suspended scaffold rental market in the state of Rio Grande do Sul and to
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broaden its exposure to the residential and commercial construction market in the South region, in line with the geographic expansion plan of Jahu Residential and Commercial Construction division. On August 1st, 2011, was approved, in Extraordinary Shareholders Meeting, the merger of GP Sul by the Company, in its protocol and merger justification terms. The objectives of the merger were (i) optimize and centralize the activities developed by GP Sul in the Companys management, therefore, rationalizing the operations and consequently reducing costs; and (ii) take advantage of the tax benefit resulting from the amortization of R$ 4.7 million generated in its acquisition of at least five years, as from the 2011 fiscal year.

c.

Unusual transactions or events

Over the past three financial years there were no unusual transactions or events. 10.4 Changes in accounting practices

a. Significant changes in accounting practices

Adoption of new and revised IFRS without material effects on the financial statements. The following new and revised international financial reporting standards (IFRS) have also been adopted in these financial statements. Adoption of such new and revised IFRS, in assessing the Company's Management, has not had any material effects on the amounts reported for the current and previous year. Nevertheless, such adoption may affect the recognition of future transactions or agreements. (i) Modifications in IAS 1 Presentation of Financial Statements (as part of Improvements to the IFRS issued in 2010) The modifications to IAS 1 clarify that an entity may elect to disclose its analysis of other comprehensive income as an item of the statement of changes in stockholder equity. Mills elected to continue presenting such information in a separate statement. (ii) IAS 24 - Disclosure of Related Parties (already adopted by CPC 05 - R1)24 Divulgaes de Partes Relacionadas (j adotada pelo CPC 05 - R1) IAS 24 (revised in 2009) altered the definition of a related party. Adoption of the revised definition of related parties under IAS 24 (revised in 2009) in the current year permits identification of related parties not identified as such in accordance with the previous standard. The disclosures of the Companys related parties already include such alterations, in that they already consider CPC 5 (R1) Disclosures of Parties Related to the financial statements. New and revised IFRS that affect financial performance and/or financial position reported (i) Modifications in IFRS 3 Business Combinations

As part of the Improvements to the IFRS issued in 2010, IFRS 3 was changed in order to clarify that the option of appraising minority equity interests as of the acquisition date will only be available in the case of minority equity interests that represent current minority equity interests granting such stockholders the right to proportional stakes in the entitys net assets in the event of liquidation. All other types of minority equity interests are appraised at fair value as of the acquisition date, unless other standards require use of another basis for appraisal. Moreover, IFRS 3 was modified to provide more guidelines on the recording of share-based compensation rights held by the employees of the business acquired. Specifically, the modifications required that transactions involving payments based on shares of the business acquired that are not replaced are to be measured according to IFRS 2 Sharebased Payment (equivalent to CPC 10(R1)) as of the acquisition date (marked to market measurement).
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The Companys Management believes that the adoption of this modification did not affect the Company, since GP Sul (the company acquired in 2011, see Note 1 of the Financial Statements), did not have any minority shareholders and nor did it offer its employees share-based payment. (iii) Modifications in IAS 32 Classification of Rights

The alterations in this international accounting standard deal with the classification of certain rights denominated in foreign currency, such as equity instruments or financial liabilities. According to the changes made, the rights, options or bonuses issued by an entity in order for the holders thereof to be able to acquire a fixed quantity of the entitys equity instruments for a fixed amount in any currency are to be classified as equity instruments in the entitys financial statements, provided that the offer is made proportionally to all the existing holders of the same class of non-derivative equity instruments. Prior to the changes made in IAS 32, the rights, options or bonuses for acquisition of a fixed quantity of an entitys equity instruments for a fixed amount in foreign currency were classified as derivatives. The changes require retrospective adoption. In any event, the adoption of these modifications by the Company did not affect the amounts reported in the current and previous years, since Mills did not issue instruments of this kind. (iv) Modifications in IFRIC 14 Prepayments of Minimum Funding Requirements

The changes determine when refunds or reductions of future contributions should be considered as available under IAS 19.58; how minimum funding requirements may affect the availability of the reductions in future contributions; and when minimum funding requirements may result in a liability. With the modifications, the standard began to permit recognition of an asset in the form of pre-payment of minimum funding requirements. The Companys Management expects the application of the changes will not have a material effect on the financial statements. (v) IFRIC 19 Extinction of Financial Liabilities with Equity Instruments

This Interpretation provides guidelines on recording the extinction of a financial liability through issue of equity instruments. Directors Specifically, under IFRIC 19 the equity instruments issued with such a transaction are to be measured at fair value and any difference between the carrying value of the extinguished liability and the effective payment for the equity instruments issued is to be recognized in results. On the evaluation of the Company's Management, the adoption of IFRIC 19 did not affect the amounts reported in the current and previous year since the Company has not carried out any transactions of this nature. New and revised interpretations already issued and not yet adopted The Company has not adopted the following new and revised IFRS that have already been issued: Modifications in IFRS 7 IFRS 9 IFRS 10 IFRS 11 IFRS 12 IFRS 13 Modifications in IAS 1 Disclosures of Transfers of Financial Assets (1) Financial Instruments (2) Consolidated Financial Statements (2) Joint Arrangements Disclosure of Interests in Other Entities (2) Fair Value Measurement (2) Presentation of Items of Other Comprehensive Income (3) Modifications in IAS 12 Deferred Taxes Recovery of Underlying Assets (4) IAS 19 (revised in 2011) Employee Benefits (2) IAS 27 (revised in 2011) Separate Financial Statements (2) IAS 28 (revised in 2011) Investments in Associates and Joint Ventures (2) (1) In effect for annual periods beginning on or after July 1, 2011. (2) In effect for annual periods beginning on or after January 1, 2013. (3) In effect for annual periods beginning on or after July 1, 2012.
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(4) In effect for annual periods beginning on or after January 1, 2012.

IFRS 7
The changes in IFRS 7 increase the disclosure requirements for transactions involving financial assets. Such alterations intend to provide greater transparency to exposures to risks when financial assets are transferred but the transferor continues retaining a certain level of exposure due to the asset. The alterations also require disclosure of the transfer of financial assets when they are not equally distributed over the period. The Companys Management does not expect that these modifications in IFRS 7 will have a significant effect on its disclosures in relation to the transfers of receivables previously affected. Nonetheless, in the event Mills undertakes other types of transfers of financial assets in the future, the disclosures relating to such transfers may be affected.

IFRS 9
IFRS 9 Financial Instruments, which was issued in November 2009 and altered in October 2010, introduced new requirements for the classification, measurement and derecognition of financial assets and liabilities. IFRS 9 establishes that all financial assets recognized that are covered by the scope of IAS 39 Financial Instruments: Recognition and Measurement (equivalent to CPC 38) be subsequently measured at amortized cost or fair value. Specifically, debt instruments that are held according to a business model aimed at receiving contractual cash flows and which have contractual cash flows that refer exclusively to payments of the principal and interest on the principal due are generally measured at the amortized cost at the end of the subsequent reporting periods. All other debt instruments and investments in equity instruments are measured at fair value at the end of the subsequent reporting periods. The most significant effect of IFRS 9 related to the classification and measurement of financial liabilities refers to the recording of changes in the fair value of a financial liability (designated at fair value through profit and loss - FVTPL) attributable to changes in the credit risk of such liability. Specifically, under IFRS 9, in relation to financial liabilities recognized at FVTPL, the amount of the change in the fair value of the financial liability attributable to changes in the credit risk of such liability is recognized under Other comprehensive income, unless recognition of the changes in the liabilitys credit risk under Other comprehensive income results in or increases the accounting dissolution in income. Changes in the fair value attributable to the credit risk of a financial liability are reclassified in income. Previously, under IAS 39 and CPC 38, the total amount of the change in the fair value of a financial liability recognized at FVTPL was recognized under results. IFRS 9 is applicable to annual periods beginning on or after January 1, 2013. Company Management expects IFRS 9 to be adopted in the financial statements for the annual period beginning January 1, 2013 and that adoption of this new standard will not have a material effect on the reported balances of its financial assets and liabilities. Nonetheless, it is not possible to provide a reasonable estimate of such effect until such time as a detailed review is conducted.

Consolidation rules, participation agreements, affiliates and disclosures, including IFRS 10, IFRS 11, IFRS 12, IAS 27 (revised in 2011) and IAS 28 (revised in 2011).
In May of 2011 a package of five standards for consolidation, joint arrangements, associates and disclosures was issued: IFRS 10, IFRS 11, IFRS 12, IAS 27 (revised in 2011) and IAS 28 (revised in 2011). The main requirements of these five standards are as follows.
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IFRS 10 substitutes the parts of IAS 27 Consolidated and Separate Financial Statements that deal with consolidated financial statements. SIC-12 Consolidation Special Purpose Companies was withdrawn with the issue of IFRS 10. According to IFRS 10, there is only one base for consolidation, that is, control. In addition, IFRS 10 includes a new definition of control that contains three elements: (a) power over an investee; (b) exposure or rights to variable returns from its interest in the investee and (c) capacity for using its power over the investee to affect the amounts of the returns to the investor. Comprehensive guidelines have been included in IFRS 10 to deal with complex scenarios. IFRS 11 substitutes IAS 31 Interests in Joint Ventures. IFRS 11 deals with how a joint arrangement where to or more parties have joint control is to be classified. SIC-13 Joint Ventures Non-Monetary Contributions of Investors was withdrawn with the issue of IFRS 11. Under IFRS 11, joint arrangements are classified as combined or joint ventures according to the rights and obligations of the parties to the joint arrangements. On the other hand, under IAS 31 there are three types of joint arrangements: jointly held entities, jointly controlled assets and jointly controlled operations. In addition, under IFRS 11 joint ventures are to be recorded under the equity accounting method, whereas jointly held entities, according to IAS 31, can be recognized under the equity accounting method or the proportional accounting method. IFRS 12 is a disclosure standard applicable to entities that have interests in subsidiaries, joint arrangements, associates and/or unconsolidated structured entities. By and large, the disclosure requirements under IFRS 12 are more comprehensive than the current standards. These five standards are applicable to annual periods beginning on or after January 1, 2013. Management believes that these five norms will be adopted for the Companys financial statements for the annual period beginning January 1, 2013, although it does not expect significant effects.

IFRS 13

IFRS 13 presents a single source of orientation for measurement of fair value and disclosures regarding fair value measurements. The standard defines fair value, presents a fair value measurement structure and requires disclosures of the fair value measurements. The scope of IFRS 13 is comprehensive, applying to items of financial and non-financial instruments for which other IFRSs require or permit fair value measurements and disclosures of fair value measurements, except in determined cases. For example, quantitative and qualitative disclosures based on the fair value hierarchy of three levels, currently employed for financial instruments only under IFRS 7 Financial Instruments: Disclosures, will be complemented by IFRS 13 so as to include all assets and liabilities in its scope. IFRS 13 is applicable to annual periods beginning on or after January 1, 2013. Management expects IFRS 13 to be adopted in the Companys financial statements for the annual period beginning January 1, 2013 and that adoption of the new standard may result in amounts being reported in the financial statements and more comprehensive disclosures in the financial statements.

IAS 1
The changes to IAS 1 permit presentation of income and other comprehensive income in a single statement or in two separate and consecutive statements. Even so, the changes to IAS 1 require additional disclosures in other comprehensive income, such that the items of other comprehensive income are grouped in two categories: (a) items that will not be reclassified later in income, and (b) items that will be reclassified later according to determined conditions. The income tax on the items of other comprehensive income will be dealt with likewise. The modifications in IAS 1 are applicable to annual periods beginning on or after July 1, 2012. Presentation of the items of other comprehensive income will be modified appropriated as the changes are adopted in future reporting periods.
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IAS 12
The changes to IAS 12 involve an exception to the general principles of IAS 12 in the sense that measurement of deferred tax assets and liabilities is to reflect the tax effects resulting from the manner in which the entity expects to recover the carrying value of an asset. Specifically, according to the changes, it is expected the investment properties measured based on the fair value model under IAS 40 Investment Property be recovered through sale for purposes of measuring deferred taxes, unless the premises are invalidated in determined circumstances. The modifications in IAS 12 are applicable to annual periods beginning on or after January 1, 2012. Management has not yet conducted a detailed analysis of the impact of applying these Standards, though it does not expect the effects thereof to be material.

The Transition Taxation System (RTT)

For purposes of calculating income tax and social contribution on net profit for the fiscal year 2008, Brazilian companies could opt for Transition Taxation System (Regime Tributrio de Transio - RTT), which allows the corporation to eliminate the accounting effects of the Law 11,638, through records in the Book of Calculation of Taxable Income (Livro de Apurao do Lucro Real - LALUR) or auxiliary, without any change in bookkeeping. The choice of this scheme should be made upon presentation of the Declaration of Legal Entities Income Tax of calendar year 2008. The Transition Taxation System (RTT) will remain in effect until such time as laws take effect in Brazil to govern the tax effects of the new accounting practices introduced, with a view to tax neutrality. The Company elected to adopt the RTT in 2008. As a consequence, for purposes of calculating income tax and social contribution on net income for the years ended December 31, 2009 and 2008 the Company used the prerogatives defined in the RTT, which in 2010 became mandatory.

b.

Significant changes in accounting practices

There was no change in significant accounting practices, methods of calculation, judgments, estimates and accounting assumptions in the financial statements of the company for the fiscal years ended December 31, 2011, December 31, 2010 and December 31, 2009.

c.

Qualifications or points on the auditors opinion

There were no qualifications or points relating to financial statements on the opinion issued by the independent auditor. 10.5 The management shall indicate and comment on critical accounting policies adopted by the issuer, by exposing mainly the accounting estimates made by management on uncertain and relevant questions for description of the financial situation and the results, which require subjective or complex judgments, such as: provisions, contingencies, recognition of revenue, fiscal credits, long-term assets, useful life of non-current assets, pension plans, conversion adjustments in foreign currency, recovery environmental costs, standards for testing the recovery of assets and financial instruments.

Estimates and judgments used in the preparation of Financial Statements

Preparation of the Companys financial statements requires Management to make judgments and estimates and adopt premises that affect the amounts of revenues, expenses, assets and liabilities, as well as disclosures of contingent liabilities as of the reporting date. Nevertheless, the uncertainty relating to such assumptions and estimates may lead to results that require significant adjustment to the carrying value of the asset or liability affected in future periods.
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The main assumptions relating to sources of uncertainties in the future estimates and other importance sources of uncertainty in estimates as of the reporting date, involving significant risk of causing a major change in the carrying value of assets and liabilities in the next financial year, are as set out below: Impairment of non-financial assets Transactions with payments based on shares Taxes Fair value of financial instruments Provisions for tax, civil and labor risks Useful life of fixed assets Revenue recognition

Following, the Companys Management presents a discussion about what they consider relevant as accounting practices for the presentation of Companys financial information. (i) Financial instruments Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the respective instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs directly attributable to the acquisition or issuance of financial assets and liabilities (except financial assets and liabilities recognized at fair value in results) are added to or deducted from the fair value of the financial assets or liabilities, if applicable, after initial recognition. Transaction costs directly attributable to the acquisition of financial assets and liabilities appraised at fair value through profit and loss (FVTPL) are recognized immediately in results. (ii) Current and deferred income tax and social contribution The Companys expenses on the federal corporate income tax (IRPJ) and social contribution on net income (CSLL) encompass both current and deferred taxes. Such income taxes are recognized in the income statement, except in the proportion in which they are related to items recognized directly under stockholders equity or comprehensive income. In this case, the tax is also recognized in one of the latter two captions. The current IRPJ and CSLL expense is calculated according to the legal tax bases effective in Brazil as of the reporting date, namely 15% plus a surcharge of 10% for taxable income in excess of R$ 240 for income tax and 9% on taxable results for social contribution purposes. The Companys Board periodically evaluates the positions adopted in relation to tax issues that are subject to interpretation and recognizes a provision when there are expectations for payment of IRPJ and CSLL on the tax bases. The deferred IRPJ and CSLL are calculated on temporary differences between the bases for calculation of taxes on assets and liabilities and the carrying values recognized in the financial statements. The rates for such taxes as currently defined for determination of such deferred credits are 25% for income tax and 9% for social contribution. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be available for use in offsetting the temporary differences, based on projections for future results drawn up
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and grounded on internal premises and on future economic scenarios that may therefore be subject to alterations. The recoverability of the balance of deferred tax assets is reviewed at the end of each reporting period and, when it is no longer considered probable that future taxable income will be available to permit recovery of all such assets, or part of them, the balance thereof is adjusted to the amount that it is expected will be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Companys Board expects, at the end of the reporting period, the Company to recover or settle the carrying amount of its assets and liabilities. For purposes of calculating the IRPJ and CSLL, the Company adopted the Transition Tax System (RTT), pursuant to Law No. 11.941/09, that is to say, in determining the taxable income, Management considered the accounting criteria under Law No. 6.404/76 (the previous Brazilian corporation law), prior to the alterations imposed by the new corporation Law (No. 11.638/07). Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred tax assets and liabilities are related to the income taxes levied by the same taxing authority on the taxable entity or different taxable entities when there is the intent to settle the balances on a net basis. Current and deferred taxes are recognized in results, except when they correspond to items recorded under Other comprehensive income, or directly under Stockholders equity, in which case the current and deferred taxes are also recognized under Other comprehensive income or directly under Stockholders equity, respectively. When current and deferred taxes result from the initial recognition of a business combination, the tax effect is considered in recording the business combination. (iii) PP&E: Company use and rental and operational use

Property, plant and equipment for rental and operational use provides the better part of its revenues, either through simple rental, or rental combined with assembly/dismantling services. The PP&E for Company use consists principally of the installations for equipment storage, offices, betterments, furniture, fixtures and equipment required for functioning of the installations. The items of PP&E is valued at historic cost, less accumulated depreciation and impairment losses, which includes expenditures directly attributed to the acquisition of such fixed assets. Subsequent costs are incorporated into the residual value of the PP&E or recognized as a specific item, as appropriate, only if the economic benefits associated with such items are probable and the amounts thereof can be reliably measured. The residual balance of the replaced item is derecognized. Other repair and maintenance work is recognized directly in results when incurred. Depreciation is recorded under the straight-line method, at the rates presented in Note 11 of the financial statements, which take into consideration the estimated useful economic life of the assets. Land is not depreciated.

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Assets maintained through finance leases are depreciated based on their expected useful life, just as the Companys own assets, or for a shorter period, if applicable, as per the terms of the lease agreement in question. Gains and losses on disposals are determined by comparing the values of the sale with the carrying value and are included in operating results. The residual value and estimated useful life of the assets are reviewed each year and the effect of any changes in the estimates is recognized on a forward-looking basis. (iv)Goodwill The goodwill resulting from a business combination is recognized at cost as of the business combination date, net of any accumulated impairment losses. The goodwill is allocated to cash generation units (CGUs) for impairment testing purposes. Allocation is made to CGUs or groups of CGUs that should benefit from the business combination from which the goodwill arose, and such units/groups are identified per business segment. (v) Impairment of assets

PP&E and other noncurrent assets, including goodwill and intangible assets, are reviewed annually to identify evidence of impairment, or further, whenever events or changes in circumstances indicate that the carrying values thereof may not be recoverable. When such is the case, the recoverable amount is calculated to check whether there is a loss. When there is, it is recognized at the amount by which the carrying value of the asset exceeds is recoverable amount, which is the greater of the net sale price and the value of the asset in use. For impairment testing purposes, assets are grouped into the lowest levels for which separately identifiable cash flows exist (CGUs). Non-financial assets, except goodwill, that have become impaired are reviewed for analysis of possible reversal of the impairment as of the reporting date. (vi)Provisions Provisions are recognized when the Company has a present, legal or non-formalized obligation as a result of past events and it is probable that an outflow of funds will be needed to settle the obligation and a reliable estimate of the amount thereof can be made. The provisions for tax, civil and labor risks are recorded in the amount of probable losses, with due heed being paid to the nature of each provision (according to Note 18 of the financial statement). Based on the opinion of legal counsel, the Companys Management believes that the provisions set up are sufficient to cover any losses on cases underway. The provisions are measured at the present value of the expenditures that should be needed to settle the obligation, with use of a pre-tax rate that reflects current market appraisals of the time value of money and the specific risks of the obligation. The increase in the obligation as a result of the passage of time is recognized as an expense. A provision for onerous contracts is recognized when the expected benefits to be derived from the contract are lower than the inevitable cost of meeting the contractual obligations. The provision is measured at the present value of the lower of the expected cost for terminating the contract and the expected net cost of continuing with the contract. (vii) Stock-based remuneration

Mills offers its employees and executives a remuneration plan based on stock options that are convertible into common shares, whereby the Company receives their services as consideration for the stock
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purchase options. For further information, see item 13 of this Reference Form.The fair value of the options granted is recognized as an expense during the period in which the rights vest, during which the specific terms for the vesting rights are to be met. At the reporting date the Company revises its estimates of the quantity of options that are to be vested based on such terms, in order to recognize the impact of the revision of the initial estimates, if any, on the income statement, with a contra entry in the capital reserve under stockholders equity. The amounts received, net of any directly attributable transaction costs, are credited to the capital stock upon exercise of the options. (viii) Revenue recognition

Revenue from the performance of services is recognized based on the measurement of the stages for performance of the services carried out through the reporting date. Revenue from the sale of merchandise is recognized when the significant risks and benefits of ownership of the merchandise are transferred to the buyer. Accordingly, the Company adopts the date on which the product is delivered to the buyer as the basis for its revenue recognition policy. Leasing revenue is recognized on a prorated basis in monthly results on a straight-line basis, according to the equipment lease agreements. The Company separates the identifiable components of a single contract or group of contracts in order to reflect the substance thereof, recognizing the revenue from each one of the elements in a manner that is proportional to their fair value. Accordingly, the Companys revenue is divided into leasing, technical assistance, sales and indemnities/recoveries of expenses. Interest income is recognized in a manner proportional to time, taking into consideration the outstanding principal and the effective interest rate over the period to maturity, at which time it is determined that such revenue will be appropriated to the Company. The revenues from dividends from investments made by Mills is recognized when the shareholders right to receive such dividends is established, provided that it is probable that the future economic benefits will flow to the Company and the amount of such revenues can be reliably measured. Revenues, expenses and assets are recognized net of the taxes levied on sales. 10.6 Regarding the internal controls adopted to ensure the preparation of reliable financial statements, the management shall comment on:

a.

Efficiency of such controls, and any flaws and steps taken to correct them

Our management is responsible for establishing and maintaining adequate internal control over financial through a process designed to provide reasonable comfort for the reliability of financial reporting and the preparation of financial statements.

b. Weaknesses and recommendations on internal controls present in the report of the independent auditor
No deficiencies or recommendations were submitted by the independent auditors in their report about the effectiveness of internal controls adopted by the Company.

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10.7 Management comments on the use of resources from public offerings for distribution of securities In April, 2010, the Initial Public Offering of shares of the Company provided net proceeds of R$411 million, which enabled the Company to expand its investments in all divisions to meet the growing demand in markets where it operates and to settle higher cost debts. In the fiscal years ended December 31st, 2010 and 2011, the Company invested R$348.5 million and R$430.4 million, respectively, mainly in equipment acquisition. The Company also invested the amount of R$95.5 million in acquisitions in 2011. On January 19th, 2011, the Company entered into a purchase and sale agreement to acquire 25.0% of the voting and total capital of Rohr, a private company specializing in access engineering and the provision of construction solutions, for R$90.0 million. On May 27th, 2011, the Company entered into a purchase and sale agreement to acquire 100% of the voting and total capital of GP Sul, one of the largest players in the suspended scaffold rental market to residential and commercial construction in the state of Rio Grande do Sul, for R$ 5.5 million. To obtain sufficient resources for such investments, the Company used the resources from its Initial Public Offering, cash generation and debt issuance. On March 29th, 2011, the Company conducted its first issue of 30 promissory notes, each with par value of R$1.0 million, totaling R$30.0 million. On April 18th, 2011, the Company conducted its first issue of 27,000 debentures, each with par value of R$10,000.00, totaling of R$270.0 million. In terms of their deed of issuance, it was established the following destination for net resources of this offering (a) the redemption of commercial papers of 90 days issued in March 2011, totaling R$30 million, (b) the investments defined in the expansion plan of Mills, including estimated investments of R$ 337 million in 2011, (c) rearrangement of cash balance following disbursement of R$90.0 million in February 2011 in connection with the acquisition of 25.0% of the Rohr total capital stock, and (d) general corporate purposes and expenses of the Company. On December 7th, 2011 the Company issued a single series of 3 (three) commercial promissory notes with unit face value of R$ 9.0 million, for a total amount of R$ 27.0 million with maturity on December 1 st, 2012. Remuneration interest charges will fall due corresponding to 100% of the accumulated variation in the average daily Domestic Demand (DI) rates, plus 1.10% per annum. Remuneration will be fully paid upon the maturity date. The resources used for strategic acquisitions until December 31st, 2011, totaled R$95.5 million, R$61.7 million, or 39%, less than the amount estimated at the date of the prospectus for Initial Public Offering shares issued by the Company. 10.8 Managements comments on significant items not included in the balance sheet and their effects on the consolidated financial statements In the evaluation of the Management, there are no significant items not included in the balance sheet of the Company. 10.9 Managements comments about the obligations not accounted in financial statements.

In the evaluation of the Management, there are no significant obligations not included on the financial statements of the Company.

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10.10 Management shall indicate and comment on key elements of the Company's business, specifically exploring the following topics:

a. Investments, including: (i) quantitative and qualitative description of investments in progress and forecasted investments; (ii) financing sources of investments and (iii) relevant alienations in progress and forecasted alienations
The Company plans its investment policy in accordance with its cash flow and credit availability in the market. The Companys internal policy is to maintain its leverage around 1.0x Net Debt to EBITDA. To ensure the necessary amount of capital for the implementation of its investment plan, the Company constituted a statutory reserve, of which the shareholders may allocate up to 75% of net income, provided that such reservation does not exceed the limit of 80% of the capital. The Management presents below major investments made in the course of the years ended December 31, 2009, 2010 and 2011, and highlight the investment budget for fiscal year 2012.

Investments in 2008, 2009 and 2010

The Company experienced a period of rapid expansion in 2009, 2010 and 2011, due in large part to the investments and geographic expansion of Jahu and Rental division. Companys principal investments in this period are described below:

Heavy Construction Division

In the fiscal years ended by December, 31st, 2009, 2010 and 2011, the Heavy Construction division invested, mainly, in shoring structures and industrialized steel and aluminum formwork, amounting to R$23.5 million in 2009, R$74.3 million in 2010 and R$47.3 million in 2011.

Industrial Services Division

Along the fiscal years ended by December, 31st, 2009, 2010 and 2011, the Industrial Services division invested R$4.6 million, R$25.0 million and R$ 17.3 million, respectively, in the acquisition of equipment and raw materials, mainly, tubes, aluminum flooring, and third-party equipment that had previously been rented by the division.

Jahu Division
Over the past three fiscal years ended by December, 31 st, 2009, 2010 and 2011, the Jahu Division invested mainly in acquisition of shoring equipment, formwork and suspended scaffolding and industrialized steel and aluminum formwork, having disbursed R$16.0 million in 2009, R$104.0 million in 2010, R$185.0 million in 2011. In 2011, there was the acquisition of GP Sul by R$5.5 million, amouting to R$190.5 million.

Rental Division
In 2009, despite the world macroeconomic scenario being unfavorable for most of the year, the Company continued to implement its strategy of expanding its portfolio of aerial work platforms and telescopic handlers, investing approximately R$30 million in the acquisition of such equipment. In 2010 and 2011, the Company continued to implement its plan of geographic expansion, investing approximately R$130.6 million in 2010 and R$162.8 million in 2011 in the acquisition of new rental equipment.

Acquisition of Rohr
On January 19, 2011, the Company entered into a purchase and sale agreement to acquire 25.0% of the voting and total capital of Rohr, a private company specializing in access engineering and the provision of construction solutions, for R$90.0 million. This strategic acquisition enabled the Company to broaden its exposure to the sectors it serves infrastructure, residential and commercial construction, oil & gas industry, among others.
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Acquisition of GP Sul
On May 27, 2011, the Company entered into a purchase and sales agreement to acquire 100% of the voting and total capital stock of GP Sul, which the Companys Management believed to be one of the largest players in the suspended scaffold rental market to residential and commercial construction in the state of Rio Grande do Sul, by the time of the acquisition, for R$5.5 million. This strategic acquisition, as evaluated by the Management, enabled the Company to become the leader in the suspended scaffold rental market in the state of Rio Grande do Sul and to broaden its exposure to the residential and commercial construction market in the South region, in line with the geographic expansion plan of Jahu Residential and Commercial Construction division. The Company intends to finance its investments through (i) cash generated from its own activities, and (ii) indebtedness.

Investments Planned for 2012

In 2012, the Company aims to invest R$127 million in equipment acquisition for all divisions. The budget predicted for 2012 targets the leverage reduction, as measured by the Net Debt/EBITDA indicator, to 1.0x. In case the market continues offering attractive opportunities and the macroeconomic scenario is favorable, the Company may expand our investments for 2012 over the year, as our operating cash flow increases, since we have great flexibility as regards increasing our inventory of equipment, because the time between investment decision-making and receiving equipment is around 90 days. The following table sets forth its planned investments for 2012 by division :
Division Heavy Construction Division Industrial Services Division Project Acquisition of equipment, primarily shoring structures and industrialized formwork. Acquisition of equipment, primarily steel and aluminum tubes, aluminum flooring and Mills modules Acquisition of equipment, primarily expanding of its portfolio of shoring structures, industrialized steel and aluminum formwork and suspended access equipment Acquisition of equipment necessary to meet the demand of all existing branches. Acquisition of goods, materials and supplies for the facilities used by each of its divisions, and development and implementation of SAP, integrated software of enterprise resource planning (ERP) in the company. Investments (in millions of R$) 22 7

Jahu Division

28

Rental Division

53

Corporation

17

b. Since it has already disclosed, indicate the purchase of plants, equipment, patents or other assets that should materially affect the productive capacity of the Company
The Company has in its estimated budget the continued expansion of its operations, through the purchase of equipment for part of which orders have already been made.

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c. New products and services, by indicating: (i) description of researches in progress already disclosed; (ii) total amounts paid by the issuer in researches for development of new products or services; (iii) projects under development already disclosed and (iv) total amounts paid by the issuer for the development of new products or services
The Companys management believes that providing innovative solutions is a constant mark of its activities and a key aspect to retain its customers. However the Company doesnt realize internally research and development. The Company visits the main national and international fairs of the industrial equipment and construction annually to meet the major technological innovations available to the industry in which the Company operates. Furthermore, the Companys representatives visit the factories of leading national and international manufacturers of equipment and construction sites around the world to assess the functioning and operation of advanced equipment available for purchase. The Company does not develop new products and services, so it doesnt incur expenses related to the research and development. All the technology and innovation present in its equipment and offered to its clients come from its suppliers. For this, the Company seeks to acquire or license new technologies from third parties on acceptable terms in the domestic and international market, preferably with usual suppliers with whom the Company seeks to establish long term partnerships. As an example of such partnerships, the Company entered into a licensing contract in 1996 with the German company NOE Schaltechnik, to produce and supply modular steel and aluminum panel formwork (replacing the wood) for the Brazilian construction market, an innovation in the Brazilian market. In January 2012, the Company has entered into a exclusive cooperation agreement with Beerenberg Corp. AS (Beerenberg) to produce, sell and install its Benarx product line in the Brazilian market. 10.11 Management is expected to discuss and analyze other material factors that influenced operating performance, which were not discussed under previous items in this section. There are no other factors to comment on.

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11.

PROJECTIONS

114

11.1

Identification of projections

Not applicable, as the Company does not disclose guidance. 11.2 Projection monitoring

Not applicable, as the Company does not disclose guidance.

115

12.

GENERAL MEETING AND ADMINISTRATION

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12.1

Administrative Structure

a.

Responsibilities of each body and committee

BOARD OF DIRECTORS The Board of Directors is a decision-making body responsible for both formulating and monitoring the implementation of the general guidelines and policies of its business, including long-term strategies, and appointing and supervising the Executive Officers. In accordance with the Companys bylaws, the Board of Directors shall be comprised of a minimum of five and a maximum of 11 members, shareholders or not, residing in the Country, in accordance with the Novo Mercado Listing Rules. Members of the Board of Directors are to be elected for a continuous twoyear term at the General Shareholders meeting. Further, such members may be reelected and removed from office at any time by a decision of the Companys shareholders, at the General shareholders meeting. Pursuant to the Brazilian corporate law and CVM Instruction No. 282, dated June 26, 1998, the minimum percentage of voting capital required to adopt cumulative voting in publicly-held companies is 5%. If the adoption of cumulative voting is not required, the directors will be elected by a majority vote of the shareholders that are present, or represented by proxy. The CVM Board elected by majority on November 8, 2005 established that shareholders who, individually or collectively, represent at least 10% of the total capital of publicly-held companies, are entitled to appoint a director and its substitute in separate voting. All members of the Board of Directors must a sign a Consent Agreement of the Administrators, in which their respective position will depend on the signing of the document. Through the Consent Agreement, the Companys new members of the Board of Directors are personally responsible to act in accordance with the Contract of Novo Mercado, Regulation of the Market Arbitration Chamber and the Rules of the Novo Mercado. Currently the Companys Board of Directors is comprised of seven members (without any substitutes), of which were elected at Ordinary Shareholders Meeting held on April 20, 2012. The members were elected for a two-year term expiring in the next Ordinary General Meeting. The table below indicates the name, age and title of the board of directors.
Date of Las Election 4.20.2012 Date of Office Term of Office Other Titles Elected by the Controlling Shareholder Yes

Name Andres Cristian Nacht Elio Demier Diego Jorge Bush Nicolas Wollak Pedro Chermont Pedro Malan Jorge M. T. Camargo

Age

Profession Business Administration Bachelor of Social Communication Business Administration Executive Engineer

CPF 098.921.337 /49 260.066.507 -20 060.903.038 -87 057.378.217 -22 023.120.657 -70 028.897.227 -91 114.400.151 -04

Title

69

Chairman Vice Chairman Director Director Director Independent Director Independent Director

4.20.2012

2 years

No

61

4.20.2012

4.20.2012

2 years

Yes

Yes

68 50 38

4.20.2012 4.20.2012 4.20.2012

4.20.2012 4.20.2012 4.20.2012

2 years 2 years 2 years

No No No

Yes Yes Yes

69

Economist Geologist and Physicist

4.20.2012

4.20.2012

2 years

No

Yes

57

4.20.2012

4.20.2012

2 years

No

Yes

According to the Novo Mercado Listing Rules and the Companys bylaws, the companys board of directors must have at least 20% independent members. Whenever the percentage of 20% mentioned above
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results in fractional number of members, the number shall be rounded to reach a whole number: (i) immediately above, if fractional number is equal to or higher than 0.5; or (ii) immediately below, if fractional number is lower than 0.5. Since the Companys Board of Directors is composed of seven members, it should have at least one independent director. The Independent director should be identified as such in the minutes of the General Shareholders meeting that elects him. Currently Mr. Pedro Malan and Mr. Jorge Camargo are the Companys Independent Directors. The decisions of the Companys Board of Directors are taken by a majority vote of the members that are present. Under Brazilian corporate law, members of the board of directors are prohibited to vote in any meeting ou General Meeting, on any matter or intervene in any transaction that would create a conflict of interest between the Company and that board member. EXECUTIVE BOARD The Companys Executive Officers are responsible for the management of daily operations of the business and for implementing the general policies and guidelines established by the Board of Directors. The Brazilian corporate law provides that executive officers must reside in Brazil and that they may or may not be shareholders of the company in which they serve. In addition, up to one-third of the members of a companys Board of Executive Officers may also serve as members of the Board of Directors. The members of the board of executive officers are elected by the Companys board of directors for oneyear term and they may be reelected. Any executive officer may be removed by the board of directors before the expiration of his or her term. According to the Companys bylaws, the board of executive officers must be comprised of four to 11 officers, including one chief executive officer, one chief financial officer and the remaining without specific designation. All the members of the Board of executive officers must a sign a Consent Agreement of the Administrators, in which their respective position will depend on the signing of the document. Through the Consent Agreement, the Companys new members of the Board of executive officers are personally responsible to act in accordance with the Contract of Novo Mercado, Regulation of the Market Arbitration Chamber and the Rules of the Novo Mercado. The table below indicates the name, age and title of the board of executive officers.
Name Ramon Nunes Vazquez Erik Wright Barstad Roberto Carmelo de Oliveira Frederico tila Silva Neves Alessandra Eloy Gadelha Age Profession CPF 336.997.80759 Title Chief Executive Officer Date of Last Election 2.9.2012 Date of Office 2.9.2012 Term of Office Until OSM 2013 Until OSM 2013 Until OSM 2013 Until OSM 2013 Until OSM 2013 Other Titles Yes Elected by the Controlling Shareholder Yes

59

Engineer

55

Engineer

57

Engineer

54

Engineer

Heavy 012.491.708- Construction and 93 Jahu divisions Officer Industrial 399.935.827Services Division 00 Officer Chief Financial 595.166.407and 10 Administrative Officer 021.092.59736 Investor Relations Officer

2.9.2012

2.9.2012

No

Yes

2.9.2012

2.9.2012

No

Yes

2.9.2012

2.9.2012

No

Yes

37

Engineer

2.9.2012

2.9.2012

No

Yes

FISCAL COUNCIL Under the Brazilian Corporate Law, the Fiscal Concil is responsible for: (i) reviewing, by any of its members, the actions of management and verify compliance with its legal and statutory duties; (ii) opine on management's
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annual report, including in its opinion the additional information it deems necessary or useful to the General Meeting decision; (iii) give their opinion on the administrations proposals, to be submitted to the General Meeting, relating to changes in capital, issuance of debentures or warrants, capex plans or capital budget, capital distribution, dividend distribution, transformations, incorporations, merger or split up; (iv) report, by any of its members, to the administrators or, if they do not take the necessary action to protect the interests of the company, to the general meeting, the mistakes, fraud or crimes they find out, and suggest necessary measures to the company; (v) convene the ordinary shareholder meeting, if the administrative bodies delay for more than one month calling, and extraordinary, whenever there are serious or urgent matters, including in the agenda the subjects they deem relevant; (vi) analyze, at least quarterly, the balance sheet and other financial statements periodically prepared by the company; (vii) review and give an opinion on the financial statements of the fiscal year; and (viii) exercise those powers during the settlement, in view of the special rules that govern it. According to the Company's Bylaws, the Fiscal Council works on a permanent basis, and consists of three members and an equal number of alternates, shareholders or not, resident in Brazil and elected at the General Meeting, when will determine their remuneration. The Chrairman of the Fiscal Council is elected at the General Meeting. All new members of the Fiscal Council must sign a Fiscal Council Compliance Statement, conditioned on possession in their respective offices the signing of this document. Through the Compliance Agreement, new members of its Board of Directors are personally responsible to act in accordance with the Novo Mercado, with the Rules of the Arbitration Chamber and the Novo Mercado Listing Rules. At the the Ordinary and Extraordinary General Meeting held on April 19, 2011, the Company's shareholders requested the installation of the Fiscal Council and elected three members and three alternates. At the Extraordinary General Meeting held on April 20, 2012 the Fiscal Council became a permanent body. The table below presents name, age and title of the Fiscal Council members:
Name Rubens Branco da Silva Daniel Oliveira Branco Silva Eduardo Botelho Kiralyhegy Maria Cristina Pantoja da Costa Faria Maurcio Rocha Alves de Carvalho Peter Edward Cortes Marsden Wilson Age 61 32 32 34 50 40 Professi on Lawyer Lawyer Lawyer Lawyer Engineer Administr ator CPF 120.049.10763 080.968.46752 082.613.21703 886.793.57715 709.925.507-00 168.126.648-20 Title Date of Last Election 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012 Date of Office 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012 Office Term 1 year 1 year 1 year 1 year 1 year 1 year Other Titles No No No No No No Elected by the Yes Yes Yes Yes No No

President Substitute Member Substitute Member Substitute

ADVISORY COMMITTEE With the goal of improving the decision-making process, sustaining the execution of our growth plan, and supporting it in its functions, the Board of Directors has approved the creation of the Human Resources and Strategy Committees, in line with the best practices of corporate governance. The Human Resources Committee is responsible for: (a) supervision and support during the development, planning and execution of strategies that enable the company to attract and retain talent, as well as the improvement of the work environment, and (b) proposals for the remuneration of Mills executive officers for analysis and approval by the Board of Directors. The current members of the Human Resources Committee are Elio Demier (Vice-Chairman of Mills Board of Directors), Ramon Nunes Vazquez (Mills CEO) and Jos Felipe Vieira de Castro.

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The Strategic Committee is responsible for: (a) supervision and support during the development, planning and execution of strategic projects of significant impact in the future development of the Company, and (b) other related matters defined by the Companys Board of Directors from time to time. The members of the Strategic Comittee are Nicolas Wollack (member of the Board of Directors), Jorge M. T. Camargo (member of the Board of Directors) and Ramon Vazquez (CEO). Committees of this type are non-permanent and therefore can be either created or extinguished anytime by the Board of Directors. The table below presents the names, ages and positions of the Human Resources and Strategic Committees members: Human Resources Commitee
Date of Last Election Starting Date Term of Office Other positions Elected by Controlling Shareholder

Name

Age

Profession

CPF

Title

Ramon Nunes Vazquez Elio Demier Jos Felipe Vieira de Castro

59 61 59

Engineer Bachelor of Social Communication Economist

336.997.807 -59 260.066.507 -20 402.760.747 -34

Member Member Member

05.22.2012 05.22.2012 05.22.2012

05.22.2012 05.22.2012 05.22.2012

1 year 1 year 1 year

Yes Yes No

Yes Yes Yes

Strategic Committee
Name Age Profession CPF Title Date of Last Election Starting Date Term of Office Other positions Elected by Controlling Shareholder

Nicolas Wollack Jorge M. T. Camargo Ramon Nunes Vazquez

50 57 59

Executive Geologist and Physicist Engineer

057.378.217 -22 114.400.151 -04 336.997.807 -59

Member Member

09.12.2012 09.12.2012 09.12.2012

12.9.2012 12.9.2012 12.9.2012

1 year 1 year 1 year

Yes Yes Yes

Yes Yes Yes

Member

b.

Date of formation of Fiscal Council and Committees

The Companys Board of Directors approved, in a meeting held on September 15, 2010, the establishment of the Human Resources Committee, to support in its functions, aiming to improve the decision making process and to sustain the execution of the Companys growth plan. Two members of the Human Resources Committee were reelected at the Board of Directors Meeting held on May 22, 2012, Elio Demier and Ramon Nunes Vazquez, and a new one was elected, Jos Felipe Vieira de Castro. As a request of the Companys shareholders, the Fiscal Council was installed and its members and respective alternates were elected at the Ordinary and Extraordinary General Meeting held on April 19, 2011. At the Extraordinary General Meeting held on April 20, 2012, the Fiscal Council became a permanent body. The Companys Board of Directors approved, in a meeting held on September 12, 2012, the establishment of the Strategic Committee. The purpose of the Committee shall be to monitor and advise the elaboration, planning and execution of strategic projects of great impact in the future development of the Company and other related matters defined by the Companys Board of Directors from time to time.

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c.

Mechanisms for evaluating the performance of each body or committee

The activities of the Executive Officers are supervised and evaluated by the Board of Directors, whose performance is an object of appreciation by its shareholders. Until the end of 2010, the Company did not adopt mechanisms or pre-set avaliation methods to measure the performance of its Administration. In 2011 a Performance Management Program was established, aiming to map the competence gaps and guide the development programs to improve the attributes that lead to high performance, and establish and evaluate individual goals. For compensation and calculation purposes of the aggregated economic value that will determine the output participation, the organs of its Administration are, jointly with its employees, evaluated based on the results obtained by the Company. Each member of the Committee shall be entitled to compensation equivalent to 50% (fifty percent) of the Board of Directors monthly payment. The members of the Committee who are Executive Officers or employees of the Company shall not be entitled to any compensation.

d.

Responsibilities and individual powers of the Executive officers

Is the responsibility of the Chief Executive Officer: (i) to convene and chair meetings of the Executive Officers meetings; (ii) to maintain permanent coordination between the Executive Board and the Board of Directors; (iii) To Comply with and enforce, within his authority, these Articles provisions and the resolutions made by the Executive Board, Board of Directors and Shareholders Meetings. The Director of Investor Relations is responsible: (i) release and inform CVM and BM&FBOVESPA, if necessary, any act or relevant fact occurred or related to the Companys business. As well as, ensure the immediate dissemination, simultaneously in all markets where such securities are negotiated, besides other duties established by the Board of Directors; (ii) provide information to the investors; and (iii) keep the registration of the Company in accordance with the applicable rules of the CVM. The remaining Directors will have the assignments that may be established by the Board of Directors upon his election, as set forth in the Company's Bylaws.

e. Mechanisms for evaluating the performance of the Board of Directors, committees and the Executive Board
See item 12.1(c). 12.2 Description of rules, policies and practices with respect to general meetings

a.

Notification

Brazilian Corporate Law for listed companies requires that all general shareholders meetings are convened after three publications of the same in the Federal Gazette (Dirio Oficial da Unio) or of the State in which the company is based, as well as in another newspaper with a wide circulation. The Companys publications are currently placed in the Rio de Janeiro State Gazette (Dirio Oficial do Rio de Janeiro), the official means of communication used by the state government of Rio de Janeiro, as well as in the daily newspaper in Rio de Janeiro, Valor Econmico, with the first call made at least 15 days before the meeting, and the second eight days before, as stipulated in its bylaws. However, the CVM can, in specified circumstances, determine that the first call for a general shareholders meeting be made with 30 days prior notification from the date on which the documents related to the issues to be decided upon are made available to shareholders. The Company, when possible, seeks to antecipate the term of the first convocation of the General Assembly, allowing shareholders having informations of the General Meeting in advance to that required by law.
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b.

Powers

Without prejudice to the other matters provided for by law, General Shareholders Meeting solely shall: Appreciation of the Managements Report, the Managements accounts, the Companys Financial Statements and the independent auditors report; Approval of the capital budget; Approval of the Managements Proposal for the Allocation of Net Income; Make amendments to the By-Laws; Establishment of the remuneration of the Senior Management of the Company; assign bonus shares and decide on possible share reverse splits and splits; Elect and dismiss members of the Board of Directors; Elect and dismiss members of the Fiscal Council, if installed; Establish plan for granting call option or subscription for shares to directors and employees of the Company and its subsidiaries; resolve on the cancellation of open capital company registration before the Brazilian Securities and Exchange Commission, under Chapter VII of the By-Law; Resolve, under Chapter VII of the By-Law, on the delisting from the Novo Mercado; and select among the companies indicated in a triple list by the Board of Directors, a specialized company to be responsible for elaborating an appraisal report of the company shares in the event of cancellation of company registration with the CVM and its delisting from the Novo Mercado.

c. Addresses (physical or electronic) at which documents relating to the General Meeting shall be available to shareholders for their review
The documents related to the issues to be decided upon at the General Shareholders Meeting will be available to shareholders at the Companys headquarters, located at: Avenida das Amricas 500, bloco 14, loja 108 e salas 207 e 208, Barra da Tijuca, CEP 22640-100, City and State of Rio de Janeiro. Electronic: www.mills.com.br; www.cvm.gov.br; www.bmfbovespa.com.br

d.

Identification and handling of conflicts of interests

See item 16.3 for a description of the mechanisms the Company uses to avoid and mitigate conflicts of interest.

e.

Request for power-of-attorney by the directors to exercise voting rights

Requests for power of attorney and proxy are based on the legal and regulatory requirements. To date, its management has never made any public request for power of attorney or proxy.

f. Necessary formalities to accept powers-of-attorney granted for shareholders, indicating if the Company receives powers from shareholders electronically

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Subject to the provisions of Article 126 of Law 6404/76, to shareholders who are represented by proxy, are requested to deliver at the Companys headquarter the documents that prove the powers of the legal representative, preferably with advance of 2 (two) days from the date of the Meeting. As defined in the Companys bylaws, shareholders may be represented at General Meetings of the Company by a proxy appointed less than 1 year, who is a shareholder or officer of the Company, attorney or financial institution. The supporting document evidencing his commission shall be filed with the Companys registered office within the maximum period of 48 hours before the date scheduled for each General Meeting. The Company does not accept powers of attorney granted by electronic means.

g.

Internet forums and pages for shareholders comments relating to minutes

The Company does not keep Internet forums and pages for shareholders to receive and share comments.

h.

Transmission of meetings by live video or audio

The Company does not transmit meetings by live video or audio.

i.

Mechanisms allowing for inclusion of shareholders proposals

There are no mechanisms allowing for the inclusion of shareholders proposals. 12.3 Dates of Newspaper Publications
2011 Date(s) of Newspaper publication Notice to shareholders announcing the availability of the Financial Statements General Shareholders Meeting Convening Notice DOE-RJ Valor Econmico RJ DOE-RJ Valor Econmico RJ DOE-RJ Valor Econmico RJ 2010 Date(s) of Newspaper publication DOE-RJ Valor Econmico RJ DOE-RJ Valor Econmico RJ DOE-RJ Valor Econmico RJ Publicated Newspaper 2009 Date(s) of Newspaper publication Publicated Newspaper

Publicated Newspaper

3/21/2012

3/18/2011

Minute of the General Shareholders Meeting Financial Statements

4/25/2012

6/15/2011

4/16/2010

DOE-RJ Monitor Mercantil DOE-RJ Monitor Mercantil

3/6/2012

3/17/2011

3/5/2010

12.4

Board rules, policies and practices

The Board of Directors shall consist of a minimum of five (5) and a maximum of eleven (11) members, all shareholders, of which 20% shall be independent, elected at a General Meeting for a unified 2 (two)-year term of office and who may be reelected. In the event of a fractional number of directors as a result, due to the compliance with this percentage, the fractional number shall be rounded off to: (i) the next higher whole number, where the fraction is equal or higher than 0.5 (five tenths); or (ii) next lower whole number, where the fraction is lower than 0.5 (five tenths).

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a.

Frequency of meetings

The Board of Directors holds ordinary meetings once a month, and extraordinary meetings, whenever corporate interests so require.

b. Shareholder provisions establishing voting restrictions on members of the Board of Directors

Does not exist

c.

Identification rules and handling of conflicts of interest

See item 16.3. 12.5 Description of binding clause, if applicable, in the bylaws for the resolution of conflicts by and between shareholders and the Company through arbitration Under article 47 of the By-Law,the Company, its shareholders, managers and members of the Fiscal Council obligate themselves to resolve, through arbitration, before the Market Arbitration Chamber, any and all disputes or controversies that may arise among them, related to or arising in particular from the application, validity, effectiveness, interpretation, breach and sequelae, of the dispositions contained in the Brazilian Corporations Law, the By-Laws, the standards issued by the National Monetary Council, the Central Bank of Brazil and the CVM, as well as other standards applicable to the functioning of the capital markets in general, beyond those contained in the Novo Mercado Rules, the Sanctions Regulation, the Contract for Participation in the Novo Mercado and the Arbitration Rules of the Market Arbitration Chamber. 12.6 Administration and members of the Fiscal Council

Board of Directors The Companys Board of Directors is currently comprised of seven members, elected at the Ordinary Shareholders Meeting held on April 20, 2012. The members were elected for a two-year term expiring in the next Ordinary General Meeting. The table below indicates the name, age and title of the board of directors.
Date of Las Election 4.20.2012 Date of Office Term of Office Other Titles Elected by the Controlling Shareholder Yes

Name Andres Cristian Nacht Elio Demier Diego Jorge Bush Nicolas Wollak Pedro Chermont Pedro Malan Jorge M. T. Camargo

Age

Profession Business Administration Bachelor of Social Communication Business Administration Executive Engineer

CPF 098.921.337 /49 260.066.507 -20 060.903.038 -87 057.378.217 -22 023.120.657 -70 028.897.227 -91 114.400.151 -04

Title

69

Chairman Vice Chairman Director Director Director Independent Director Independent Director

4.20.2012

2 years

No

61

4.20.2012

4.20.2012

2 years

Yes

Yes

68 50 38

4.20.2012 4.20.2012 4.20.2012

4.20.2012 4.20.2012 4.20.2012

2 years 2 years 2 years

No No No

Yes Yes Yes

69

Economist Geologist and Physicist

4.20.2012

4.20.2012

2 years

No

Yes

57

4.20.2012

4.20.2012

2 years

No

Yes

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Board of Executive Officers The Companys executive officers are the legal representatives and are principally responsible for the dayto-day management of the business and for implementing the general policies and guidelines established by the board of directors. According to the Brazilian Corporate Law, each member of the executive board should be resident in the country, and may or may not be a shareholder. In addition, up to a maximum of one-third of the positions of the board of executive officers may be occupied by members of the board of directors. The members of the Companys Board of Executive Officers are elected by the Board of Directors for oneyear terms and they may be reelected. Any Executive Officer may be removed by the Board of Directors before the expiration of his or her term. According to the Companys bylaws, its Board of Executive Officers must be comprised of four to 11 officers, including one Chief Executive Officer, one Chief Financial Officer and the others without specific designation. All new members of the Board of Executive Officers must sign a Statement of Consent of Directors, conditioned on possession in their respective positions to the signing of this document. By this Consent Agreement, the companys new management is personally committed to act in accordance with the Participation Agreement of the Novo Mercado, Arbitration Rules of the Market Arbitration Committee and the Rules of the Novo Mercado. The table below shows the name, age, years of experience, position, date of election and term of the current members of the Companys Board of Executive Officers.
Date of Last Election 2.9.2012 Starting Date 2.9.2012 Term of Office Until 2013 Sharehol ders Meeting Until 2013 Sharehol ders Meeting Until 2013 Sharehol ders Meeting Until 2013 Sharehol ders Meeting Until 2013 Sharehol ders Meeting Other Positio ns No Elected by the Controller Yes

Name

Age

Profession

CPF

Title

Ramon Nunes Vazquez

58

Engineer

336.997.807-59

Chief Executive Officer

Erik Wright Barstad

55

Engineer

012.491.708-93

Heavy Construction and Jahu division Officer Industrial Services division Officer Chief Financial Officer

2.9.2012

2.9.2012

No

Yes

Roberto Carmelo de Oliveira Frederico tila Silva Neves Alessandra Eloy Gadelha

57

Engineer

399.935.827-00

2.9.2012

2.9.2012

No

Yes

54

Engineer

595.166.407-10

2.9.2012

2.9.2012

No

Yes

37

Engineer

021.092.597-36

Investor Relations Officer

2.9.2012

2.9.2012

No

Yes

Fiscal Council At the the Ordinary and Extraordinary General Meeting held on April 19, 2011, the Company's shareholders have requested the installation of the Fiscal Council and elected three members and three alternates. At the Erdinary General Meeting held on April 20, 2012 the Fiscal Council became a permanent body. The table below presents name, age and title of the Fiscal Council members:
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Name Rubens Branco da Silva Daniel Oliveira Branco Silva Eduardo Botelho Kiralyhegy Maria Cristina Pantoja da Costa Faria Maurcio Rocha Alves de Carvalho Peter Edward Cortes Marsden Wilson

Age 61 32 32 34 50 40

Professi on Lawyer Lawyer Lawyer Lawyer Engineer Administ rator

CPF 120.049.10763 080.968.46752 082.613.21703 886.793.57715 709.925.50700 168.126.64820

Title President Substitute Member Substitute Member Substitute

Date of Last Election 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012

Date of Office 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012 4.20.2012

Office Term 1 year 1 year 1 year 1 year

Other Titles No No No No

Elected by the Yes Yes Yes Yes No No

1 year 1 year

No No

12.7 Provide information mentioned in item 12.6 related to the members of the statutory committees, as well as audit, risk financial and remuneration committees even if such committees or structures are not statutory Human Resources Committee
Elected by Controlling Shareholder

Name

Age

Profession

CPF

Title

Date of Last Election

Starting Date

Term of Office

Other positions

Ramon Nunes Vazquez Elio Demier Jos Felipe Vieira de Castro

59 61 59

Engineer Bachelor of Social Communication Economist

336.997.807 -59 260.066.507 -20 402.760.747 -34

Member Member Member

05.22.2012 05.22.2012 05.22.2012

05.22.2012 05.22.2012 05.22.2012

1 year 1 year 1 year

Yes Yes No

Yes Yes Yes

Strategic Committe
Elected by Controlling Shareholder

Name

Age

Profession

CPF

Title

Date of Last Election

Starting Date

Term of Office

Other positions

Nicolas Wollack Jorge M. T. Camargo Ramon Nunes Vazquez

50 57 59

Executive Geologist and Physicist Engineer

057.378.217 -22 114.400.151 -04 336.997.807 -59

Member Member

09.12.2012 09.12.2012 09.12.2012

12.9.2012 12.9.2012 12.9.2012

1 year 1 year 1 year

Yes Yes Yes

Yes Yes Yes

Member

12.8 Summary of the business experience, activities and areas of expertise of members of administration and Fiscal Council 12.8.1 Board of Directors

Andres Cristian Nacht has been the Chairman of the Companys board of directors since 1998. The son of

Mr. Jose Nacht, one of the founders of the Company, Mr. Nacht has a degree in Engineering from Cambridge University, England. In 1965, Mr. Nacht joined GKN, a British engineering company, where he worked for three years, holding engineering posts in the UK. In 1967, has worked for one year as Engeneer in Echafaudages Tubulaires Mills from France. Mr. Nacht became a director of the company in 1969 and was appointed managing director in 1978, a position he held until 1998 when he became the Chairman of the Board of Directors.
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Elio Demier is a graduate of Social Communication from the Fluminense Federal University. He also holds

an MBA from the Institute of Post-Graduation and Research in Administration of the Rio de Janeiro Federal University. He served as the Companys chairman from 1998 to 1999 and has been a member of the Companys board of directors since 1998. Mr. Demier was President of the Bomtexto Publisher, company in the book publishing business located in Rio de Janeiro.

Diego Jorge Bush is a graduate in Business Administration from Yale University in 1967 and also holds an

MBA from Harvard Business School in 1971. Having worked as Chairman of the Boston Finance, Boston Distributor and Boston Leasing, companies connected to the Bank Boston, an office he held until 1973. After leaving Boston bank, Mr. Bush founded a specialist finance brokerage company, Edim Comercial e Imobiliria Ltda., which he manages to-date. Between 1988 and 1996 he has been Chairman of So Paulo Alpargatas S.A. Mr. Bush has been a member of the Companys Board of Directors since 1998.

Nicolas Wollak has been a member of the Companys Board of Directors since 2007. Graduated from
Harvard University, Mr. Wollack is a founder of the Axxon Group in Brazil, where is Managing Partner since 2001. Mr. Wollak has nearly 20 years of private equity investment experience having already been a partner of BISA fund (Argentina) prior to founding the Axxon Group. Current chairman of the board of directors from Guerra S.A (manufacturer of road implements), member of Luxxon S.A., which controls Aspro Ltda (manufacturer of compressed natural gas), director of MV Investimentos S.A. (investment vehicle which controller of the franchise network of Mundo Verde), and also a member of the Deliberative Board of the Brazilian Private Equity Association (ABVCAP). In the past five years, Mr. Wollack has been (i) managing partner of the Axxon Group in Brazil, as one of the responsible for its investments in their Investment Funds, (ii) Chairman of the Board of Director from Guerra S.A (as described above) since July 2008 until the present date, (iii) director in MV Investimentos S.A. (as described above) since August 2009 until the present date, (iv) member of the Deliberative Board from ABVCAP since March 2010 until the present date, (v) member of the Board of Directors from Luxxon S.A (as described above) since December 2007 until the present date, and (vi) member of the Board of Directors from Lupatech S.A. (equipment and services supplier mainly for the oil and gas industry) sinde March 2005 until October 2007.

Pedro Chermont has a degree in Civil Engineering from PUC-RJ and is the funding partner and portfolio

manager of Leblon Equities Gesto de Recursos funds. Mr. Chermont has 15 years of experience in the Brazilian equity market, having worked 13 years at Investidor Profissional, one of the first independent asset management companies in Brazil, where he managed funds that amounted to approximately U.S $ 1.5 billion. Current chairman of the Board of Directors of BR Home Centers, retail company in the building material sector, and a member of the Board of Directors of Companhia Brasileira de Distribuio (CBD), which is the holding company of Po de Acars group. Mr. Chermont has served as a member of the Companys Board of Directors between July 9, 2007 and August 20, 2008, returning as a member in 2010. In the last five years, Mr. Chermont has been: (i) co-founder of Leblon Equities, being responsible for the investments of its funds (since September 2008), (ii) partner of Investidor Profissional, where he was also responsible for investments its investment funds, (iii) member of the Board of Directors of BR Home Centers (from May 2009 onwards), and (iv) member of the Board of Directors of the Companhia Brasileira de Distribuio, described above (from August 2009 until the present date), beyond the participation of the Board of Directors from Globex and Ponto Frio.com.

Pedro Malan obtained a degree in electrical engineering in 1965 from Polytechnic School at Pontifical

Catholic University of Rio de Janeiro (PUC-RJ). He holds a Ph.D. in economics from the University of Berkeley. Mr. Malan is a professor at the Department of Economics at PUC-RJ, has published essays and articles in economic journals and books, both in Brazil and abroad and is a member of the Board of Trustees of the IFRS Foundation. He served as Brazils Minister of Finance from 1995 to 2002. President of the Central Bank of Brazil from 1993 to 1994. Special Counsel and Chief External Debt Negotiator of the Ministry of Finance from 1991 to 1993. Executive Director of the World Bank from 1986 to 1990, and again from 1992 to 1993. Executive Director of the Inter-American Development Bank from 1990 to 1992. Director of the Center of Transnational Corporations in New York from 1983 to 1984. Director of the UN Department of International Economic and Social Affairs in New York from 1985 to 1986. Mr. Malan has been an independent member of the board of director since March 2010. In the last five years, Mr. Malan has been a member of the board of directors of Souza Cruz S.A. (since March 2010), chairman of the
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advisory board of Unibanco-Itau (since august 2009), member of the board of directors of OGX (since 2008), member of the board of directors of EDP Energias do Brasil (since 2004), has been a member of the board of directors of Globex Ponto Frio (since 2004) and Chairman of the board of directors of Unibanco (from 2004 until 2008).

Jorge M. T. Camargo has been for 36 years in the oil industry. Obtained a degree in geology from the

University of Brasilia and masters degree in geophysics from the University of Texas, worked 27 years in Petrobras in Brazil and abroad, holding various technical and management positions in the Exploration Department, as well as Superintendent of the Rio Grande do Norte and Cear Exploration Districts, General Manager of Petrobras in the UK and a member of the Executive Board as Director of the International Sector. Over the past eight years, worked for Statoil, initially as Vice-President at the headquarter in Stavanger, Noruega, and later as president of Statoil in Brazil. In 2010 redirected his professional activities to consulting, corporate boards, serving currently as consulting in Satatoil and in the boards of Karoon Oil and Gas, Deepflex, Energy Ventures, Iposeira O&G and the Brazilian Oil Institute (IBP). Over the past five years, none of the members of our Board of Directors has suffered any (a) criminal conviction; (b) conviction in an administrative proceeding of CVM; or (c) any conviction that has become final in the judicial or administrative area, that has suspended or disqualified our members of the practice of professional or commercial activity whatsoever. 12.8.2 Board of Executive Officers

Ramon Nunes Vazquez has been the Companys Chief Executive Officer since 2009, returning to the

Company in 2007 as the Rental Division Director, after more than six years serving as Chief Executive Officer of Solaris Equipamentos e Servios Ltda, an equipment rental company. Mr. Vazquez has over 30 years of experience in our business sector, graduated in Civil Engineering from the Rio de Janeiro Federal University (UFRJ) and with a degree in Marketing from Pontifcia Universidade Catlica do Rio de Janeiro (PUC/RJ). Mr. Vazquez also holds an MBA in Marketing from PDG/RJ. Over the past five years, Mr. Vazquez was CEO of Solaris, whose activities are stated above (until 2007), served as our Rental Division Director (2007 to 2009) and the Companys Chief Executive Officer (from 2009 to the present date).

Erik Wright Barstad has been executive officer responsible for the Heavy Construction and Jahu divisions
since 1998 and has over 33 years experience in this market. He has a degree in Civil Engineering from the Mackenzie Presbyterian Faculty of So Paulo and a degree in Marketing from PUC/RJ. Mr. Barstad also holds an MBA from PDG/RJ. On the past five years, Mr. Barstad was our Construction Division Officer, and since 2008 responsible for our Jahu Division.

Roberto Carmelo de Oliveira has been the executive officer responsible for the Industrial Services division

since 1999. He has a degree in Civil Engineering from Souza Marques University. Mr. de Oliveira holds an Executive MBA from PDG/IBMEC and obtained a specialization diploma from the Trevisan Business School of So Paulo. For two years Mr. Oliveira worked at Ecia Irmos Arajo Engenharia e Comrcio Ltda, followed by five years at the technical division of Construtora Norberto Odebrecht S.A. In 1981, Mr. Carmelo de Oliveira began working at the company as an engineer and today he has 30 years of experience in that sector. In the last five years, Mr. Oliveira Mr. Oliveira has been an Officer of the Company, responsible for the Industrial Services Division, formerly Division Maintenance, renamed Industrial Services Division since 2008.

Frederico tila Silva Neves has a degree in Civil Engineering from the Rio de Janeiro Federal University

and in 1984 was awarded a Masters Degree in Business Administration by the Institute of PostGraduation and Research in Administration (COPPEAD) of the Federal University of Rio de Janeiro. Mr. Neves worked for six years at large multinational companies in the industrial and financial sectors, before before joining Ceras Johnson Ltda. as controller in 1990. Mr. Neves also became the Companys Chief Financial Officer, and until 2010, he was also the Investor Relations Offiver.

Alessandra Eloy Gadelha has a bachelors degree in chemical engineering from the Universidade Federal do Rio de Janeiro (UFRJ) and a masters degree in Business Administration from Rensselaer Polytechnic
128

Institute, located in the state of New York, in the US. In the past five years, Mrs. Gadelha worked in the Investors Relations department at Vale S.A., before coming to the Company to become the Investor Relations Officer since July 2010. Over the past five years, none of the members of our Board of Executive Officers has suffered any (a) criminal conviction; (b) conviction in an administrative proceeding of CVM; or (c) any conviction that has become final in the judicial or administrative area, that has suspended or disqualified our members of the practice of professional or commercial activity whatsoever. 12.8.3 Fiscal Council

Rubens Branco da Silva obtained a degree in Law from the Federal University of Rio de Janeiro (UFRJ)

and in Accounting by the Accounting and Administrative School Moares Junior. He worked professionally at Arthur Andersen for 29 years, being 20 years as an associate responsible for the Tax and Legal area. Currently a member of the Advisory Board of the SR-Rating, the American Chamber of Commerce for Brazil-Rio de Janeiro, and the Board of Mediation and Arbitration of Rio de Janeiro. He is also a member of the Brazilian Institute of Financial Executives (IBEF), Brazilian Association of Financial Law (ABDF) and the International Fiscal Association (IFA), the Chamber of Commerce and Industry Brazil-Germany (AHK), Business Council of Commerce Association of RJ (ACRJ) and a vowel from the Board of Commerce of the State of Rio de Janeiro. He is currently a partner at the Branco Consultores Tributrios Ltda.

Eduardo Botelho Kiralyhegy graduated in Law from the Candido Mendes University, a member of the

Brazilian Lawyers Association, and founding partner of the Negreiro Office, Medeiros & Kiralyhegy Lawyers, in Rio de Janeiro, specializing in Tax Law, Administrative and Regulatory. Currently a member of the Special Committee of Tax Issues of the Brazilian Lawyers Association, the Special Committee of the Federal Justice of the Brazilian Lawyers Association, the Brazilian Academy of Tax Law, and the Brazilian Association of Financial Law and the International Fiscal Association.

Mauricio Rocha Alves de Carvalho is a graduate in Mechanical Engineering from Pontifical Catholic

University of Rio de Janeiro (PUC) and master in business administration from the Wharton School University of Pennsylvania, with certifications in CFA, CNPI and IBGC. Member of the Board of Directors of Network 1 and Tupy S.A., vice-president of CFA Society of Brazil, technical director of Apimec-SP and member of IBGC.

Daniel Oliveira Branco Silva graduated in law from the Pontifical Catholic University of Rio de Janeiro
(PUC) in 2004 and has a postgraduate degree in Corporate Law, specialization in tax Law at the fundao Getlio Vargas (FGV). Mr. Daniel is a legal manager at Branco Consultores Tributrios and a member of Branco Advogados since 2003.

Maria Cristina Pantoja da Costa Faria graduated in law from the Pontifical Catholic University of Rio de

Janeiro (PUC), specializing in corporate finance for lawyers by the Foundation Institute of Management from the University of So Paulo, and earned her masters degree in executive management of insurances at IBMEC. Member of the Brazilian Lawyers Association. Currently a member of the Negreiro Office and Medeiros & Kiralyhegy Lawyers.

Peter Edward Cortes Marsden Wilson is a graduate in business administration from the Getulio Vargas
Foundation (So Paulo) and Master in Economics, Business Administration and Finance from the Getlio Vargas Foundation (So Paulo). Worked as an analyst, trader, controller, and a portfolio manager in the Banque Nationale group of Paris. He was a portfolio manager for Globalvest Management LP / Latinvest Asset Management for two years, and Ourinvest Asset Management Ltd. for another two years. Was investment director of the Dartley Bank & Trust (Nassau) for a year. Currently a member of the Board of Directors from PHI Capital Management, specializing in portfolio management and corporate finance.

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12.9 Relationship (as a spouse or significant other) or relationship to the second degree between:

a.

Members of the Board of Directors, Executive Board and Fiscal Council

b. (i) members of the Board of Directors, Executive Board and Fiscal Council and (ii) members of management of entities controlled by the Company, either directly or indirectly
There is no marital relationship, stable union or any kind of relationship up to the second degree between the Administrators of the Company and any of the persons indicated in items (a) and (b) above.

c. (i) members of management of entities controlled by the company, either directly or indirectly; and (ii) Companys direct or indirect controlling shareholders
Administrator of the Company or Controlled Company: Name: Andres Cristian Nacht / CPF: 098.921.337-49 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Chairman of the Board of Directors

Related Person: Name: Jytte Kjellerup Nacht/ CPF: 289.858.347-20 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Direct Controlling Shareholder

Type of relationship: Husband/Wife -------------------------------------Administrator of the Company or Controlled Company: Name: Andres Cristian Nacht / CPF: 098.921.337-49 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Chairman of the Board of Directors

Related Person: Name: Tomas Richard Nacht / CPF: 042.695.577-37 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Direct Controlling Shareholder

Type of relationship: Father/Son -------------------------------------Administrator of the Company or Controlled Company: Name: Andres Cristian Nacht / CPF: 098.921.337-49

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Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Chairman of the Board of Directors

Related Person: Name: Antonia Kjellerup Nacht / CPF: 073.165.257-62 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Direct Controlling Shareholder

Type of relationship: Father/Daughter -------------------------------------Administrator of the Company or Controlled Company: Name: Andres Cristian Nacht / CPF: 098.921.337-49 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Chairman of the Board of Directors

Related Person: Name: Pedro Kjellerup Nacht / CPF: 127.276.837-66 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Direct Controlling Shareholder

Type of relationship: Father/Son -------------------------------------Administrator of the Company or Controlled Company: Name: Andres Cristian Nacht / CPF: 098.921.337-49 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Chairman of the Board of Directors

Related Person: Name: Francisca Kjellerup Nacht / CPF: 124.175.657-06 Corporate name of the issuer company, controlled or controlling: Nacht Participaes S.A. / CNPJ: 27.109.446/0001-05 Title: Direct Controlling Shareholder

Type of relationship: Father/Daughter -------------------------------------Administrator of the Company or Controlled Company: Name: Andres Cristian Nacht / CPF: 098.921.337-49 Corporate name of the issuer or controlled company: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15
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Title: Chairman of the Board of Directors

Related Person: Name: Nicolas Nacht/ CPF: 734.150.811-68 Corporate name of the issuer company, controlled or controlling: Snow Petrel SL / CNPJ: 14.740.333/0001-61 Title: Controlling Company and shareholder Type of relationship: Brother

d. (i) members of the Board of Directors, Executive Board and Fiscal Council and (ii) Millss direct or indirect controlling shareholders
Administrator of the Company: Name: Andres Cristian Nacht / CPF: 098.921.337-49 Corporate name of the issuer or controlled company: Mills Estruturas e Servios de Engenharia S.A. / CNPJ: 27.093.558/0001-15 Title: Chairman of the Board of Directors

Related Person: Name: Nicolas Nacht/ CPF: 734.150.811-68 Corporate name of the issuer company, controlled or controlling: Snow Petrel SL / CNPJ: 14.740.333/0001-61 Title: Controlling company and shareholder Cargo: shareholder Type of relationship: Brother Additionally, Mr. Andres Cristian Nacht is the Chairman of the Board of Directors of the Company since 1998 and is a shareholder of the Company. 12.10 Subordination, rendering of services or control relationships for the previous three fiscal years between directors/officers and:

a. b.

Controlled entities, either directly or indirectly by the company Direct or indirect controlling shareholders of the company; and

Mr. Rubens Branco, through the partnership of Branco Consultores Tributrios Ltda., has provided over the last three fiscal years legal advisory services, accounting and taxation to Mr. Andres Cristian Nacht. Mr. Daniel Oliveira Silva White, through the partnership of Branco Consultores Tributrios Ltda., has provided over the last three fiscal years legal advisory services, accounting and taxation to Mr. Andres Cristian Nacht.

c. In case its relevant, supplier, client, debtor or creditor of the Company or its controlled or controlling shareholders
Not applicable, as there is no information about relationships of subordination, provision of service or control over the past three fiscal years, between the Administrators of the Company and any of the persons indicated in items (a) to (c) above.
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12.11 Directors Insurance The Company has held civil responsibility insurance since 2009, for administration and proxy holders acting on behalf of them, with full cover for fines and civil penalties, statutory responsibilities, regulatory risks, responsibility for errors and omissions, among others, excluding intentional acts, complaints arising from acts known about prior to the policy date, responsibilities associated with product failures (already covered by civil responsibility insurance), among other events. The policy contract was renewed for the period December 31, 2011 until December 31, 2012. 12.12 Other relevant information Positions held by the members of the Board of Directors in other companies or entities. Diego Jorge Bush - Member of the Board of Directors Administrative positions occupied in other companies / entities: Founder and Chariman of Edim Comercial e Imobiliria Ltda. Nicolas Wollak - Member of the Board of Directors Administrative positions occupied in other companies / entities: Co-founder of the Axxon Group in Brazil, where is Managing Partner since 2001; Chairman of the Board of Director from Guerra S.A since July 2008; member of the Board of Directors from Luxxon S.A since December 2007; Director of MV Investimentos S.A. since August 2009; and member of the Deliberative Board from ABVCAP since March 2010.

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Pedro Chermont - Member of the Board of Directors Administrative positions occupied in other companies / entities: Co-founder of Leblon Equitites since September 2008; Chairman of the Board of Directors from BR Home Centers since May 2009; and member of the Companhia Brasileira de Distribuio (CBD) since August 2009 and member of the Advisory Board of the BR Home Centers since August 2010. Pedro Malan - Member of the Board of Directors Administrative positions occupied in other companies / entities: Member of the Board of Directors of Globex / Nova Casa Bahia S.A; EDP-Energias do Brazil S.A.; OGX Petrleo e Gs Participaes S.A. and Souza Cruz S.A, Chairman of the International Advisory Council of Ita Unibanco and member of the Advisory Council of BUNGE Fertilizantes S.A. Jorge M. T. Camargo - Member of the Board of Directors Administrative positions occupied in other companies / entities: Member of the Board of Directors from Deepflex and Brazilian Oil Institute (IBP). Also is part of the Advisory Council of Energy Ventures and is a Consultant for Statoil do Brasil and Karoon Oil & Gas. Information about the General Meetings held by the Company, after its IPO, on April 12, 2010: Ordinary and Extrardinary General Meeting First Call Realization date: 04/20/2012 Quorum: Shareholders representing 72.48% of the capital

Extrardinary General Meeting First Call Realization date: 08/01/2011 at 11:00 a.m. Quorum: Shareholders representing 67.81% of the capital

Extrardinary General Meeting First Call Realization date: 08/01/2011 - at 12:00 a.m. Quorum: Shareholders representing 67.81% of the capital

Extrardinary General Meeting First Call Realization date: 04/19/2011 Quorum: Shareholders representing 70.54% of the capital

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13.

COMPENSATION FOR ADMINISTRATION

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13.1 Description of the compensation policy or practices for the Executive Board, the Statutory and Non-Statutory Boards, the Fiscal Committee, the Statutory Committees and the Audit, Risk, Finance and Compensation Committees, covering the following topics:

a.

Objectives of the compensation policy or practices

Board of Directors For the Board of Directors of the Company, the total remuneration is fixed in amount discretionary determined by the general meeting with no regarding with the remuneration policy applicable to officers and other employees of the Company and therefore there is no goal at the policy or remuneration practice of this body. As part of total remuneration discretionary approved by the general meeting, there is a fixed component and a variable component, according to the results of the Company. The Company believes that the variable remuneration of the members of the Board is a way to encourage them to successfully lead the Company's business by aligning the interests of members of the Board of Directors with those of shareholders. Statutory Directors and Non-Statutory Directors For statutory directors and non-statutory directors of the Company, the remuneration policy aims to enable it to hire and guarantee that the qualified professionals required remain in management positions and have a proper remuneration. The fixed amount of the remuneration of the Directors includes the salary and direct and indirect benefits tailored for statutory directors and non-statutory directors. In addition to the fixed compensation, there is a variable component, which includes profit-sharing in the Companys results and the granting of stock options or subscribing to shares issued. The Company believes that the profit-sharing and stock option programs benefiting statutory directors and non-statutory directors is a way to motivate them to carry out the Companys business in its best interest, thus stimulating an entrepreneurial and results orientated culture in line with the interests of both shareholders and management. Fiscal Council: The Fiscal Council was installed at the Ordinary Shareholders Meeting held on April 19, 2011. At the Extraordinary Shareholders Meeting held on April 20, 2012, was approved the proposal to transform the Fiscal Council on a permanent body, with three members and their alternates. Members of the Fiscal Council are entitled to remuneration equivalent to 10% of the average remuneration of the statutory board, corresponding to the minimum set by law. In this way, their remuneration is not correlated to the remuneration policy applicable to officers and other employees of the Company and therefore there is no objective of the policy or practice of remuneration for that body. Human Resources Committee: The members of the Human Resources Committee will be entitled to remuneration equivalent to 50% of the monthly remuneration of the members the Board of Directors. The Committee members who are directors, officers or employees of the Company shall not be entitled to remuneration. The remuneration of members of the Committee may be amended at any time by the Board. The purpose of this remuneration policy is adequately compensate Committee members for time spent in office, except by those who are already paid by the Company to its directors or employees. The Human Resources Committee members will be entitled to remuneration equivalent to 50% of the monthly remuneration of members of the Board of Directors. Committee members who are directors, officers or employees of the Company are not entitled to remuneration. The remuneration of members of committees may be amended at any time by the Board of Directors. The purpose of this remuneration

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policy is adequately compensate Committee members for time spent in office, except by those who are already paid by the Company to its directors or employees.

b. Composition of compensation packages: (i) description of the different elements of the compensation packages and the objectives of each of them; (ii) proportion of each element to make up the total compensation package; (iii) the method for calculating and adjusting each of the elements in the compensation packages; and (iv) reasons for the composition of remuneration
(i) Description of the different elements of the compensation packages: Salary and pro-labore. The fixed remuneration of statutory directors and non-statutory directors is designed to recognize and reflect the value of the job position internally and externally, considering the competitors of the Company and companies of similar size in terms of their gross sales. The comparison with the market remuneration is carried out by market research conducted by consulting firm hired or through database purchased from a consultant. In 2010 and 2011, the Company conducted market research with companies Saliby RH and Towers Watson, respectively. Additionally, the Company uses the database with market remuneration from the consulting company Mercer. For the Board of Directors of the Company (and the Human Resources Committee), the remuneration, fixed and/or variable (the last as bonus), is discretionary determined by the general meeting with no regarding with the remuneration policy applicable to officers and other employees of the Company and therefore there is no goal at the policy or remuneration practice of this body. Members of the Fiscal Council are entitled to remuneration equivalent to 10% of the average remuneration of the statutory board, corresponding to the minimum set by law. In this way, their remuneration is not correlated to the remuneration policy applicable to officers and other employees of the Company and therefore there is no aim of policy or practice of remuneration for that body.

Direct and indirect benefits.

Granted exclusively to statutory directors and non-statutory directors, the direct and indirect benefits includes medical assistance, life insurance, vehicle leasing and food vouchers, with the aim of complementing the social welfare benefits offered. The comparison with the market remuneration is carried out by market research conducted by consulting firm hired or through database purchased from a consultant. In 2010 and 2011, the Company conducted market research with companies Saliby RH and Towers Watson, respectively. Additionally, the Company uses the database with market remuneration from the consulting company Mercer. Members of the Board of Directors, Fiscal Council and Human Resources Committee are not entitled to any direct and indirect benefits.

Profit-sharing and bonus

Granted to statutory directors and non-statutory directors, the profit-sharing aim is to motivate management to carry out the Companys business in its best interest, thus stimulating an entrepreneurial and results orientated culture in line with the interests of both shareholders and management. Eventual bonuses paid to members of the Board of Directors, discretionary determined by the general meeting with no regarding with the remuneration policy applicable to officers and other employees of the Company, have the same goal. Members of the Fiscal Council and Human Resources Committee are not entitled to participate in the profit-sharing and bonus of the Company.

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Stock options or subscription to shares

Granted exclusively to statutory directors and non-statutory directors, the stock option and subscription to shares aim to motivate management to carry out the Companys business in its best interest, thus stimulating an entrepreneurial and results orientated culture in line with the interests of both shareholders and management. Members of the Board of Directors, Fiscal Council and Human Resources Committee are not entitled to stock option and subscription to shares. (ii) Proportion of each element to make up the total remuneration package: According to the table below the ratio for the year 2011 were:
Pro-labor and wage 84.5% 67.4% 100% 100% % Compared to the total compensation amount paid to Direct and Profit Grant of indirect benefits Bonus sharing options 15.5% 5.8% 8.5% 18.3%

Board of Directors Executive Officers Human Resources Committee Fiscal Council

Total 100% 100% 100% 100%

(iii) The method for calculating and adjusting each of the elements in the compensation packages: The fixed portion of compensation paid to statutory directors and non-statutory directors is determined based on market standards, and thus readjusted annually at the normal levels to account for the loss in currency value. In terms of the profit-sharing program granted to statutory directors and non-statutory directors, and bonus, granted to members of Board of Directors, this plan is based on the aggregate economic value, which consists of the adjusted net profit deducted from shareholder obligations. If positive, 25% of the Economic Value Added (EVA) will be distributed to Management and employees, and whose share will be defined in an increasing manner in accordance with their hierarchical level in the Company and results obtained by their respective divisions. i.e. in a proportion of 50% based on the divisions results that the manager or employee in question is linked to and 50% based on the result of our Company as a whole. For the employees of corporate areas, the program considers the total result of the company. In 2010 the Company distributed R$13.8 million related to 2009 results, in 2011 the Company distributed R$17.5 million related to the results of 2010, and in 2012 were distributed R$7.9 million for the results of 2011. As from 2012, from 20% to 30% of the EVA can be distributed to Management and employees of the Company, being determined by the Board of Directors the percentage to be applied each year. The share will continue to be increasingly defined according to their hierarchical level and according to the results obtained by their respective Division, however in the ratio of 75% on the result of the Division to which the Management or employee concerned belongs, and 25% on the outcome of the Company as a whole. For the employees of corporate areas, the program will continue considering the total result of the company. Regarding the Stock Option plan to purchase or subscribe shares, granted to the statutory directors and non-statutory directors, the number of options granted is proportional to the investment in the Company's shares with resources obtained from the profit sharing program described above. Additionally, the Board of Directors may distribute stock options or subscription of discretionary shares to statutory directors and non-statutory directors, that is, independent of the investment in the Company's shares with resources obtained from the profit sharing program described above, based on performance merit and/or outcome. For the Board of Directors of the Company (and the Human Resources Committee), the remuneration is discretionary determined by the general meeting with no regarding with the remuneration policy applicable to officers and other employees of the Company and therefore there is no goal at the policy or
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remuneration practice of this body. Members of the Fiscal Council are entitled to remuneration equivalent to 10% of the average remuneration of the statutory board, corresponding to the minimum set by law. In this way, their remuneration is not correlated to the remuneration policy applicable to officers and other employees of the Company and therefore there is no aim of policy or practice of remuneration for that body. So, there is no method of calculation and adjustment of each element of remuneration. (iv) Reasons for the composition of remuneration: For the statutory directors and non-statutory directors, the policy aims the remuneration of professionals based on the responsibilities inherent in their job positions, market practices and the Companys level of competiveness. For the Board of Directors, the Human Resources Committee and the Fiscal Council, the remuneration paid by the Company is fixed, in amount discretionary determined by the general meeting, in case of Board of Directors (and the Human Resources Committee), and according to the law, in case of Fiscal Council. The remuneration of the member of these bodies has no regard with the remuneration policy applicable to officers and other employees of the Company and therefore there is no goal at the policy or remuneration practice of this body. For the statutory directors and non-statutory directors and the member of the Board of Directors, the variable portion is justified by the Companys focus on results and the aim of aligning management interests with those of the Company.

c. Main performance indicators that are taken into consideration when determining each element of the compensation package
The main performance indicator used to determine the variable component of management remuneration is the Companys Economic Value Added (EVA), which is calculated from the net profit of the Company, deducting from this remuneration the capital invested in the Company at capital invested in the Company at book value multiplied by the weighted average of each capital of the Company. The variable portion of remuneration is determined from the economic value generated in the Company and in the division, under its responsibility.

d. How the compensation package is structured to reflect the development of the performance indicators
The remuneration consists of a significant variable portion, represented by profit-sharing in the Companys results, and the values to be distributed are directly proportionate to the Companys Economic Value Added (EVA), calculated annually in accordance with the formula described in item (c) above.

e. How the compensation policy is aligned with the Companys short-, medium- and long-term interests
The remuneration paid monthly to statutory directors and non-statutory directors is in line with the shortterm interests of the Company to attract and retain qualified professionals. The profit-sharing and stock options plan is aligned with the medium-to-long-term interests of the Company to motivate management to carry out the Companys business, stimulating an entrepreneurial and results-orientated culture, to the extent that both shareholders and directors benefit from improvements in the results and increases in the price of the shares. For the Board of Directors of the Company (and the Human Resources Committee), the remuneration is fixed in amount discretionary determined by the general meeting with no regarding with the remuneration policy applicable to officers and other employees of the Company and therefore there is no goal at the policy or remuneration practice of this body. Members of the Fiscal Council are entitled to remuneration equivalent to 10% of the average remuneration of the statutory board, corresponding to the minimum set by law. In this way, their remuneration is not correlated to the remuneration policy applicable to officers
139

and other employees of the Company and therefore there is no aim of policy or practice of remuneration for that body. For the Board of Directors, the bonus, which is based on profit-sharing, is in line with the Companys mid and long term best interest of stimulating an entrepreneurial and results orientated culture.

f. Existence of compensation supported by subsidiaries, and direct or indirect affiliates or holding companies
Not applicable. There isnt any remuneration supported by subsidiaries, and direct or indirect affiliates or holding companies.

g. Existence of any compensation or benefits connected to the occurrence of a given corporate event, such as the sale of the Companys controlling interest
Not applicable. There is no remuneration or benefits connected to the occurrence of a given corporate event, such as the sale of the Companys controlling interest. 13.2 With respect to compensation acknowledged in the results of the last 3 accounting reference periods and the estimated compensation for the current accounting reference period for the Executive Board, the Statutory Board and the Fiscal Council:
Estimated for Current Fiscal Year Board of Directors Number of members Annual fixed compensation Salaries or pro-labore fees Direct and indirect benefits Compensation for participation in Committees Other Variable Compensation Bonus Profit share Compensation for participation in meetings Commissions Other Post-employment benefits Employment cessation benefits Stock-based compensation Total Compensation 750,000 2,236,000 2,000,000 1,700,000 10,135,000 345,700 750,000 2,000,000 1,700,000 12,716,700 1,136,700 100,000 249,300 4,345,000 660,000 1,430,000 260,700 85,000 5,742,400 660,000 100,000 1,764,300 7 Board of Executive Officers 5 Fiscal Council 3 Total 15

Year ended December 31, 2011 Board of Directors Number of members Annual fixed compensation Salaries or pro-labore fees Direct and indirect benefits Compensation for participation in Committees Other Variable Compensation 850,800 65,000 183,160 3,038,949 354,261 1,087,908 120,000 24,000 4,009,749 354,261 65,000 1,295,068 6.75 Board of Executive Officers 5 Fiscal Council 3 Total 14.75

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Bonus Profit share Compensation for participation in meetings Commissions Other Post-employment benefits Employment cessation benefits Stock-based compensation Total Compensation

168,162 33,632 1,300,754

523,747 1,121,894 6,126,759

144,000

168,162 523,747 33,632 1,121,894 7,571,513

(1) According to maximum total remuneration of R$9,100,000.00 for the Board of Directors and Executive Officers approved at the Ordinary General Meeting of April 19, 2011, excluding stock based compensation. (2) Based on salary or pro-labor average of the Executive Officers in April 2011. (3) Includes one month of occupation of the position of member of the Board of Directors by Gustavo Felizolla, who resigned in January 2011, and eight months in the same position occupied by Jorge Camargo, who took office in May 2011.

Year ended December 31, 2010 Board of Directors Number of members Annual fixed compensation Salaries or pro-labore fees Direct and indirect benefits Compensation for participation in Committees Other Variable Compensation Bonus Profit share Compensation for participation in meetings Commissions Other Post-employment benefits Employment cessation benefits Stock-based compensation Total Compensation 133,952 808,472 1,859,254 353,734 6,194,421 133,952 1,859,254 353,734 7,002,893 7 639,520 35,000 Board of Executive Officers 4.5 2,628,940 445,814 906,679 Fiscal Council Total 11.5 3,268,460 445,814 35,000 906,679

Year ended December 31, 2009 Board of Directors Number of members Annual fixed compensation Salaries or pro-labore fees Direct and indirect benefits Compensation for participation in Committees Other Variable Compensation Bonus Profit share Compensation for participation in meetings Commissions Other Post-employment benefits 246,400 22,568 1,615,110 246,400 1,615,110 22,568 248,320 49,664 2,269,800 2,518,120 49,664 2 Board of Executive Officers 4 Fiscal Council Total 6

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Employment cessation benefits Stock-based compensation Total Compensation

566,952

2,522,000 6,406,910

2,522,000 6,973,862

13.3 With respect to variable compensation in the last 3 accounting reference periods and compensation estimated for the current accounting reference period for the Board of Directors, the Board of Executive Officers and the Fiscal Council:
Estimated for Current Fiscal Year Board of Directors Number of Members Bonus Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met Amount actually acknowledged in the formal results Profit share Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met 7 20,0% a 30,0% do EVA 20,0% a 30,0% do EVA Board of Executive Officers 5 Fiscal Council 3 20,0% a 30,0% do EVA Total 15 20,0% a 30,0% do EVA -

(in R$ thousand, except for number of members)

Year ended December 31, 2011 Board of Directors Board of Executive Officers 5 25,0% do EVA Fiscal Council Total

(in R$ thousand, except for number of members)

Number of Members Bonus Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met Amount actually acknowledged in the formal results Profit share Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met Amount actually acknowledged in the formal results

6,75 25,0% do EVA 168,2

3 -

14,75 25,0% do EVA 168,2 25,0% do EVA -

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Minimum amount estimated by compensation plan

523,7

523,7

Year ended December 31, 2010 Board of Directors Number of Members Bonus Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met Amount actually acknowledged in the formal results Profit share Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met Amount actually acknowledged in the formal results Minimum amount estimated by compensation plan
1

Board of Executive Officers 4,5 -

Fiscal Council -

Total 11,5 25,0% do EVA 134,0 25,0% do EVA 1.859,3

(in R$ thousand, except for number of members)

7 25,0% do EVA 134,0 -

25,0% do EVA 1.859,3

Considers the hiring, in July, 2010, of Mrs. Alessandra Eloy Gadelha for the position of Investor Relations Officer of the Company.

Year ended December 31, 2009 Board of Directors Number of Members Bonus Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met Amount actually acknowledged in the formal results Profit share Minimum amount estimated by compensation plan Maximum amount estimated by compensation plan Amount estimated by the compensation plan if preestablished goals are met Amount actually acknowledged in the formal results Minimum amount estimated by compensation plan 2 25,0% do EVA 246,4 25,0% do EVA 1.615,3 Board of Executive Officers 4 Fiscal Council 25,0% do EVA 1.615,3 Total 6 25,0% do EVA 246,4 -

(in R$ thousand, except for number of members)

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13.4 With respect to the stock-based compensation plan for the Executive Board and the Board of Executive Officers, which was in force in the last accounting reference period and which is estimated for the current accounting reference period:

STOCK-BASED COMPENSATION PLANS

On December 31st of 2011, the Company had a single stock option plan for the benefit of its managers, these being the Plano de Opes de Compra de Aes 2011, as described below. This plan will remain for the fiscal year 2012, with no expectation for the creation of new plan this year. Until December 31st of 2011, a total of 51,251 options had been exercised associated with this plan, with 879,509 previously granted purchase options remaining.

Stock Option Plan 2010 (Plano de Opes de Compras de Aes 2010)

a. Terms and general conditions: At the Extraordinary General Shareholders meeting held on February 8, 2010, the Stock Option Plan for Shares Issued by the Company was approved called Plano de Opes de Compra de Aes 2010 (Stock Option Plan - 2010), with amendments approved by the Board of Directors Meeting held on May 31, 2010 and by the Extraordinary General Shareholders meeting held on April 20, 2012. The Board of Directors approved (i) on March 11th, 2010, the Companys Program 1/2010 Stock Options Plan (1/2010 Program); and (ii) on March 25th, 2011, the Program 1/2011 Stock Options Plan (1/2011 Program). The 2010 Stock Options Plan is managed by our Board of Directors, which considers the contribution of each beneficiary to achieving the targets designed to create added value, the development potential of each, and the essential nature of their jobs among other characteristics considered strategically relevant, elected as beneficiaries of the 2010 Stock Options Plan (i) for the 1/2010 Program, all the directors (or executives with similar roles) of the Company, and Company managers who have held their positions in 2009 for more than 6 (six) months; and (ii) for the 1/2011 Program, all the directors (or executives with similar roles) of the Company, and Company managers who have held their positions in 2010 for more than 6 (six) months. b. Major Plan Objectives: The aim of the 2010 Stock Options Plan is to allow for the Companys managers or employees or those in any of its subsidiaries, subject to determined conditions, to acquire shares in the Company, for the purpose of (i) stimulating expansion, determining and implementing the Companys corporate guidelines; (ii) align the interests of the Companys shareholders with those of its managers and employees or other entities it controls; and (iii) allow the Company or its subsidiaries to attract and retain the managers and employees it requires. c. How the plans contribute for the achievement of these objectives: As most of the options are available over the long term, the beneficiaries tend to stay with the Company until at least the time they can contribute to its long-term results. d. How the plan is included in the Companys compensation policy : As mentioned in Item 13.1b, this plan is part of the variable compensation package paid to Company directors.

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e. How the plans promote the alignment between management and the Company interests at short, mid and long term: The plan aligns the interests of management, the Company, and shareholders by means of the benefits offered to the beneficiaries based on the performance of shares in the Company. Through this plan, the Company seeks to stimulate expansion, the scope and implementation of the Companys social objectives and the retention of the beneficiaries, looking ahead to gains made through their commitment to longterm results and short-term performance. f. The maximum number of shares options to be granted:

The stock options granted within the scope of this plan confer the rights to acquire up to 5% of shares in our capital stock. In addition, the aim of the plan is to grant share purchase options in an amount that does not exceed 1.5% of shares in our total capital every year, as verified on the date the plan was approved. As part of the 1/2010 Program, 538,714 options have been granted that will be converted into ordinary shares in the Company. Up to December 31st, 2011, 51,251 options have been exercised. As part of the 1/2011 Program, 392,046 options have been granted that will be converted into ordinary shares in the Company. Up to December 31st, 2011, no options have been exercised.

g. The maximum number of stock options to be granted

As a result of the number of shares that can be acquired within the scope of the stock option plan. The maximum total number of shares to be issued is up to 5% of total stock. h. Conditions for acquiring the shares To receive the stock options in the 1/2010 Program, each beneficiary had to use at least 33% of the variable component of their compensation associated with the Companys Profit-Sharing Program, net of taxes, which were received related to the 2009 financial year, to acquire shares issued by the Company. To receive the stock options in the 1/2011 Program, each beneficiary had to use at least 33% of the variable component of their compensation associated with the Companys Profit-Sharing Program, net of taxes, which were received related to the 2010 financial year, to acquire shares issued by the Company. Additionally, the Board of Directors approved grants within the 1/2010 and 1/2011 Programs, independent of the investment in the Company's shares to certain employees of the Company, due to its performance in the exercise of their jobs. i. Criteria for determining the acquisition or exercise price

Until April 20, 2012, the price of the ordinary shares to be acquired by the beneficiaries, by exercising their option rights were determined by the Companys Board of Directors or committee based exclusively on the average share price on the BM&FBOVESPA, weighted by the trading volume in the month or the two months prior to the granting of the stock option, monetarily adjusted by the inflation index IPCA (ndice de Preos ao Consumidor Amplo), and deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date. On April 20, 2012, according to the resolution of the General Meeting held on that date, the criterion for fixing the exercise price of the options that have as a counterpart the acquisition of shares by its beneficiary was changed and was defined as the equity value of the shares on the last day of the subsequent fiscal year. This change does not affect the options granted prior to that General Meeting and the new criterion does not apply to options granted that have no counterpart of the acquisition of shares by the beneficiary, which continues to be applied the criterion of market price, described above. For the 1/2010 Program, the exercise price of the options will be based on the value of the shares issued at the Companys Initial Public Offering (R$11.50), monetarily adjusted by the inflation according to the IPCA, deducting the value of dividends and interest on equity per share paid by the Company as from the
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stock option date. Regarding the 1/2011 Program, the exercise price of the options will be (i) the average share price acquired according to brokerage invoice sent by the beneficiary to the Board of Directors or Human Resources Committee of the Company (R$ 19.28), (ii) monetarily adjusted by the inflation according to the IPCA, disclosed by the Brazilian Institute of Geography and Statistics (IBGE), or by another index determined by the Board of Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, (iii) deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date. j. Criteria used to determine the exercise term

The options granted under the terms of this plan will be subject to grace periods of up to 72 (seventy two) months for the conversion of options into shares. k. Form of liquidation/settlement The shares resulting from the exercising of purchase options will be integrated and/or acquired by their respective beneficiaries in cash, in current national currency. l. Restrictions on the transfer of shares

Until the exercise price is fully paid, the shares acquired through exercising the option rights under the terms of the Plan cannot be sold to third parties, except with the prior authorization of the Board, based on the hypothesis that the product of the sale will preferably be used to settle any debt the beneficiary has with the Company. Based on the terms of the respective Option Contract, no beneficiary will be allowed to trade the shares acquired for a period of 5 (five) years, observing the following rules: (i) after a period of one year after signing the respective Option Contract, beneficiaries will be free to trade up to 25% of the shares acquired; (ii) after a period of one year after the term defined in item i, beneficiaries will be free to trade an additional 25% of the shares acquired; (iii) after a period of one year after the term defined in item ii, beneficiaries will be free to trade an additional 25% of the shares acquired; and (iv) after a period of one year after the term defined in item iii, beneficiaries will be free to trade the outstanding balance of the shares acquired. m. criteria and events that, when verified, will lead to the suspension, alteration or extinction of the plan The stock option rights granted under the terms of the Plan will automatically all be cancelled in the following cases: (i) on the complete and full exercising of the same; (ii) after the option term has expired; (iii) through the mutual rescission of the stock option; (iv) if the Company is dissolved, liquidated or files for bankruptcy; or (v) if the beneficiary fails to observe the trading restriction rules described in item n below. In addition, in the event the beneficiary is laid off, with or without just cause, resigns or steps down from their job, retires, or suffers from permanent disability, or dies, the option rights granted can either be cancelled or modified, as described in item n below. n. Effects generated by the Company`s Board and Committee Manager`s departure upon his/her rights as provided by the stock-based compensation plan If at any time during the validity of the 2010 Stock Options Plan, the beneficiary:
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(i) resigns voluntarily from the Company or leave their management role: (i) the rights not exercised in accordance with the respective Option Contract on the date they leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity; and (ii) the rights already exercised in accordance with the respective Option Contract on the date they leave the Company may be exercised within a period of 30 days from the same date, after which all rights will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity; (ii) leaves the Company as a result of being fired for just cause, or failure to fulfill their duties adequately as a manager, all the right (exercised and not exercised) in accordance with the respective Option Contract on the date they leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity; (iii) leaves the Company as a result of being fired with no just cause, or failure to fulfill their duties adequately as a manager: (i) the rights not exercised in accordance with the respective Option Contract on the date they leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity; except if the Board decides to anticipate the grace period term for some or all of these rights, and the beneficiary leaves the Company within a period of up to 12 (twelve) months after the change in share control in the Company all the unexercised rights in accordance with the respective Option Contract on the date they leave the Company may be exercised within a period of 30 days from the same date, after which all rights will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity, will have their grace period anticipated; and (ii) the rights already exercised in accordance with the respective Option Contract on the date they leave the Company may be exercised within a period of 30 days from the same date, after which all rights will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity; (iv) on retiring from the Company: (i) the rights not exercised in accordance with the respective Option Contract on the date they leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity, except if the Board decides to anticipate the grace period term for some or all of these rights; and (ii) the rights already exercised in accordance with the Options Contract on the date of leaving the Company will have their grace period anticipated, allowing the Beneficiary to exercise the respective stock option, as long as this is within a period of 12 (twelve) months from the date of retirement, after which all the remaining rights will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity; (v) leaving the Company due to death or permanent disability: (i) the rights not exercised in accordance with the respective Option Contract on the date they leave the Company will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity, except if the Board decides to anticipate the grace period term for some or all of these rights; and (ii) the rights already exercised in accordance with the Options Contract, on the date of passing away, can be exercised by the Beneficiarys legal successors, as long as this is done within a period of 12 (twelve) months from the aforementioned date, after which all the remaining rights will automatically all be cancelled, with no need for any prior warning or notification, and with no right to any indemnity. Over and above the above item, the Board or Committee (whichever is the case) can, at their exclusive criteria, whenever they deem social interests are better met by this approach, chose not to abide by the rules stipulated above, and treat a determined beneficiary in a differentiated and individual manner. 13.5 Number of stocks or direct or indirect stock holdings, either in Brazil or overseas, and other securities that might be converted into stock or quotas, issued by the Company, direct or indirect affiliates, subsidiaries or companies under common control, by members of the Executive Board, of the Board of Executive Officers or the Fiscal Board, grouped per board or committee, on the closing date of the last accounting reference period:

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The table below indicates the number of our shares held directly by our administrators and the percentage that their direct individual contributions represent of the total number of shares issued by our Company, in the last fiscal year, December 31st, 2011.
On December 31st of 2011
Board of Directors Board of Executive Officers Fiscal Council Number of Shares 5,119,954 1,336,161 Percentage (%) 4.1% 1.1%

13.6 With respect to stock-based compensation, as acknowledged in the past three accounting reference periods and as estimated for the current accounting reference period, for Executive Board and the Board of Executive Officers. The tables below show the impact of those stock option plans on the compensation of our statutory directors in the years 2009, 2010 and 2011 and the estimated impact for 2012. The Companys Board of Directors does not have stock based compensation.
Plano Especial Top Mills(1)
Number of Members of the Board of Executive Officers Grant Date Number of granted options Number of non-redeemable options Number of redeemable options Deadline for options to become redeemable Deadline for redeeming options Grace period for stock transfer Quantity of options exercised Pondered average price within accounting reference period for each of the following option groups Outstanding at the beginning of the accounting reference period Not redeemed throughout accounting reference period Redeemed within accounting reference period Expired within accounting reference period Fair option price on grant date Potential dilution in the event of exercise of all options granted(6) 2009 3rd Grant 3 1/1/09 92,854 269,726(2) Immediately after IPO (3) 4 years after IPO(3) 3 years after the end of Fiscal Year 2010 3 269,726(2) 2011 2012 -

269,726

R$1.99(4) R$911.826(5) 0.31%

R$2.08(4) R$2.18(4) 0.22%

1. All options of the plan have been granted. There were no stock options granting in 2010 and 2011 and no stock options granting in 2012. 2. 88,436 options regarding the first grant on 01/01/2008 and 88,436 options regarding the second grant on 07/01/2008. 3. Initial public offering of distribution of shares conducted by the Company in April 2010. 4. Book value for the fiscal year ended 12.31.2008, corrected by the IPCA since January 2008. 5. Fair value of R$9.82 per share. Calculation premises available in item 13.9(b). 6. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year 2009, the amount of shares were 87,420,577 and at the end of fiscal year 2010, the total number of shares was equal to 125,495,309.

Stock Option Plan 2010 - Plano de Opes de Compra de Aes 2010 1/2010 Program Number of Members of the Board of Executive Officers Grant Date Number of granted options Number of non-redeemable options Number of redeemable options() Deadline for options to become redeemable Deadline for redeeming options Grace period for stock transfer Quantity of options exercised Pondered average price within accounting reference period for each of the following option groups 2009 2010 1st Grant 4 05/31/2010 495,236 495,236 25% by year, from the date of Grant 05/31/2016 2010 2nd Grant 1 07/05/2010 43,478 43,478 25% by year, from the date of Grant 07/05/2016 2011 5 404,035 83,428 2012 5 269,357 218,106

51,251

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Outstanding at the beginning of the accounting reference period Not redeemed throughout accounting reference period Redeemed within accounting reference period Expired within accounting reference period Fair option price on grant date Potential dilution in the event of exercise of all options granted(3)

R$1,911,611 0.40%

R$238,694 0.03%

R$11.65

R$12.22

R$ 12.05 0.39% 0.39%

1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable options exercised in years previous to the current year. 2. Fair value of R$3.86 per share for the first grant and R$5.49 per share for the second grant. Calculation premises available in item 13.9(b). 3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year 2010, the amount of shares were 125,495,309 and at the end of fiscal year 2011, the total number of shares was equal to 125,656,724.

1/2011 Program Number of Members of the Board of Executive Officers Grant Date Number of granted options Number of non-redeemable options Number of redeemable options() Deadline for options to become redeemable Deadline for redeeming options Grace period for stock transfer Quantity of options exercised Pondered average price within accounting reference period for each of the following option groups Outstanding at the beginning of the accounting reference period Not redeemed throughout accounting reference period Redeemed within accounting reference period Expired within accounting reference period Fair option price on grant date Potential dilution in the event of exercise of all options granted(3)

2009

2010

2011 1st Grant 5 4/16/2011 392,046 392,046 25% by year, from the date of Grant 4/16/2017 R$2,575,742 0.31%

2012 5 294,035 98,011

R$19.77

0.31%

13.7 With respect to outstanding options for the Board of Directorsand the Board of Executive Officers at the closing of the last accounting reference period

1. Total amount of redeemable options less the total amount of redeemable options exercised at the end of the period for the fiscal years ended and total amount of redeemable options at end of period less the total amount of redeemable options exercised in years previous to the current year. 2. Fair value of R$6.57 per share. Calculation premises available in item 13.9(b). 3. Dilution of outstanding options based on the total shares of the Company's capital at the end of fiscal year, except for the current year that considers the total shares of the Company's capital at beginning of year. At the end of fiscal year 2011, the total number of shares was equal to 125,656,724.

Board of Executive Officers

Fiscal Year ended December 31, 2011 1/2010 Program Number of members Non-Outstanding options Number Deadline for options to become redeemable Deadline for redeeming options Grace period for stock transfer Fair option price on the last day of the fiscal year Outstanding options Number Deadline for options to become redeemable Deadline for redeeming options Grace period for stock transfer Fair option price on the last day of the fiscal year 83,428 05.31.2016 R$12.05 R$607,227 83,428 05.31.2016 R$12.05 R$607,227 455,286 134,678 options become redeemable each year until 2013 05.31.2016 R$3,313,572 392,046 98,011 options become redeemable each year until 2014 04.16.2017 R$1,842,616 847,332 Until 2014 04.16.2017 R$5,156,188 5 1/2011 Program 5 Total 5

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Fair option price on the last day of the fiscal year

R$3,920,799

R$1,842,616

R$5,763,415

Board of Directors
Board of Directors has no stock-based compensation. 13.8 With respect to redeemed and delivered options for the Board of Directors and the Board of Executive Officers, in the past three accounting reference periods

Board of Executive Officers

Redeems Options fiscal year ended in 12/31/2011 2010 Stock Option 2010/1 Program 2 51,251 R$12.05 R$281,881 51,251 R$12.05 R$281,881

Number of Members Redeemable Options Number of shares Pondered average price within accounting reference period Total value of the difference between the exercise value and market value of shares related to options exercised1 Shares Granted Number of granted shares Pondered average price of acquisition Total value of the difference between the exercise value and market value of shares related to options exercised 1 Redeems Options fiscal year ended in 12/31/2010

1 Average market price, pondered by volume, in the last trading day of the fiscal year, equals R$ 17.55 at the end of 2011.

Plano Especial CEO Number of Members Redeemable Options Number of shares Pondered average price within accounting reference period Total value of the difference between the exercise value and market value of shares related to options exercised1 Shares Granted Number of granted shares Pondered average price of acquisition Total value of the difference between the exercise value and market value of shares related to options exercised 1 119.782 R$2,18 R$2.200.395 1

Plano Especial Top Mills 3 269.726 R$2,18 R$4.954.867

Total 4 389.508 R$2,18 R$7.155.262

119.782 R$2,18 R$2.200.395

269.726 R$2,18 R$4.954.867

389.508 R$2,18 R$7.155.262

1 Average market price, pondered by volume, in the last trading day of the fiscal year, equals R$ 20.55 at the end of 2010.

There were no option exercised by the Executive Officers in the fiscal year ended in December 31 st, 2009.

Board of Directors

Board of Directors has no stock-based compensation. 13.9 Summary of relevant information aiming at a broader understanding of data presented under items 13.6 through 13.8 above, as well as an explanation of the pricing method used for stock and option values

a. Pricing model
In pricing the equity component cost of the plan the applicable volatility, risk-free rates and stock prices were determined for each plan, based on valuations of 6.6 times EBITDA, less net debt in the plan period. The Black-Sholes-Merton Model was used to calculate the fair values.

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The Company classified the plans granted in 2009 as compound instruments, as they include a debt component (right/possibility of receiving payment in cash if there is no public offer) and a capital component (right/possibility of receiving payment by an equity instrument in the event of a public offer) in which the settlement choice is beyond the control of the Company and the beneficiary. Calculation of the fair value of the debt amount took into account how much the Company would disburse, the current value, according to the EBITDA multiple mentioned above, weighted by the probability of the occurrence of a public share offer. The resulting amount is recorded in long-term liabilities. The public offer took place on April 14, 2010, and there is therefore no debt amount as from that date. The plans granted from 2010 onwards were classified as equity instruments, which the weighted average fair value of options is determined using the Black-Scholes valuation model using as premises: (a) weighted average share price, (b) exercise price, (c) volatility, (d) dividend yield, (e) expected option life and (f) annual risk-free interest rate. The equity portion is priced only at the grant date and the fair value is not remeasured on every reporting date. The portions of equity and debt are appropriated plan by plan, taking into consideration the respective lock up periods (period in which shares are blocked for trading), based on management's best estimate as to their end dates.

b. Data and assumptions used in the pricing model

The table below shows the data and assumptions of our pricing model:

Plans granted in 2009

Fiscal year ended on December 31st from (in thousand R$) (except the fair value per share, in R$) 2009 2010 2011 157,650 N.A. N.A. 1,040,510 N.A. N.A. 182,363 N.A. N.A. 858,147 N.A. N.A. 9.82 N.A. N.A.

Calculation of fair value EBITDA EBITDA multiple Net debt (1) Fair value Fair value per share
(1)

Composed of loans and short and long term financing, net cash and cash equivalents

Plans granted in 2010

Calculation of fair value Grant Date Exercise price Weighted average share price Expected volatility1 Expected option life (days) Dividend yield Risk-free interest rate Fair value per share at the end of 2010 Exercise price Weighted average share price Expected volatility1 Expected option life (days) Dividend yield Risk-free interest rate Fair value per share at the end of 2010 Exercise price Weighted average share price Expected volatility1 Expected option life (days) Dividend yield Risk-free interest rate Fair value per share 1 Based on the Companys historical EBITDA 1st Grant (05/31/2010) R$11.50 R$11.95 31% 1,461 1.52% 6.60% R$3.86 R$11.65 R$20.55 34.92% 1,247 1.71% 6.08% R$10.49 R$12.22 R$17.55 38.68% 882 1.06% 4.81% R$7.27 2nd Grant (07/05/2010) R$11.50 R$14.10 31% 1,461 1.28% 6.37% R$5.49 R$11.59 R$20.55 34.92% 1,282 1.71% 6.08% R$10.56 R$12.16 R$17.55 38.68% 917 1.06% 4.83% R$7.37

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Plans granted in 2011

Calculation of fair value 1st Grant (04/16/2010) Grant Date Exercise price R$19.28 Weighted average share price R$21.08 Expected volatility1 35.79% Expected option life (days) 1,461 Dividend yield 1.73% Risk-free interest rate 6.53% Fair value per share at the end of 2010 R$6.57 Exercise price R$19.77 Weighted average share price R$17.55 Expected volatility1 38.68% Expected option life (days) 1,202 Dividend yield 1.06% Risk-free interest rate 4.94% Fair value per share R$4.70 1 Measured by the historical behavior of the value of the stock of the Company

c. Method used and assumed premises to incorporate the effects from expected early exercise
There was no early exercise.

d. Way of determining the expected volatility

Expected volatility is determined by the volatility of the share price between April 15, 2010, date of initial public offering of the Company, and the reference date for calculating the fair value.

e. Other characteristics incorporated in the fair value measurement option

There are none. 13.10 Private Pension Funds in force granted to members of the Board of Directorsand the Board of Executive Officers The Company does not sponsor or pay Private Pension Funds for the members of the the Board of Executive Officers and members of the Fiscal Council. 13.11 Administrators Average Compensation
Compensation 2009 Year ended December 31, 2010 2011 (in R$, except when number of members) 7 179,236 90,000 115,496 4,5 1,974,725 1,067,751 1,376,566 N/A N/A N/A 6,75 261,336 180,732 192,704 5 2,009,980 687,584 1,232,078 3 48,000 48,000 48,000

Board of Directors Number of members Highest individual compensation value Lowest individual compensation value Average individual compensation value Board of Executive Officers Number of members Highest individual compensation value Lowest individual compensation value Average individual compensation value Board of Fiscal Council Number of members Highest individual compensation value Lowest individual compensation value Average individual compensation value
_______________________________________________

2 328,476 238,476 283,476 4 3,412,435 841,613 1,525,534 N/A N/A N/A

(1)

In 2009, the Board members Andres Cristian Nacht, Nicolas Wollack and Gustavo Felizzola renounced to their compensation. This way, only two members were paid by the Company in 2009.

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(2) (3)

Compensation paid for Executive Officer which occupied the position for the 12 months of the year. In July 2010 the Company hired Alessandra Eloy Gadelha as Investor Relations Officer. Not applicable because the fiscal council was installed in April 2011

The Companys Fiscal Council installed on April 19th, 2011. 13.12 Contract agreements, insurance policies or other instruments that might underlie the compensation or indemnity mechanisms applicable to managers in the occurrence of dismissal or retirement Not applicable. The Company has no contract agreements, insurance policies or other instruments that might underlie the compensation or indemnity mechanisms applicable to managers in the occurrence of dismissal or retirement 13.13 With respect to the last three accounting reference periods, disclose the percentage of total compensation for each board or committee as acknowledged in the Company results and which applies to members of the Executive Board, of the Board of Executive Officers or the Fiscal Board, that are somehow connected to direct or indirect affiliates, in compliance with the accounting rules that govern this matter.
Board or Committee Board of Directors Board of Executive Officers Fiscal Council 2009 20% Year ended December 31, 2010 20% 2011 16% -

13.14 With respect to the last three accounting reference periods, disclose the amounts as acknowledged in the Company results for compensation paid to members of the Executive Board, of the Board of Executive Officers or the Fiscal Board, grouped by board or committee, for any purpose other than the function they perform, such as commissions, consulting or advisory services.
Balance on December 31, Consulting Board of Directors Board of Executive Officers Fiscal Council 2009 95.0 2010 (em R$ mil) 125.0 2011

13.15 Compensation of Executive Officers and Fiscal Council members recognized in the results of controlling companies, direct or indirect, of companies under common control of subsidiaries of the issuer Not Applicable. There were no compensation of Executive Officers and Fiscal Council members recognized in the results of controlling companies, direct or indirect, of companies under common control of subsidiaries of the issuer in the fiscal years ended in 2009, 2010 and 2011. 13.16 Other relevant information There are no additional relevant information than the ones mentioned above.

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14.

HUMAN RESOURCES

154

14.1

Description of the Companys Human Resources, providing the following information

a. the number of employees (total, by groups based on activity and by geographic location)
The chart below shows the number of our employees in the financial years ended December 2008, 2009 and 2010:
Year ended December 31, 2009 2010 2011 521 572 534 2,474 3,006 2,777 308 460 687 103 222 294 1 130 208 249 3,537 4,469 4,541

Heavy Construction Division Industrial Services Division Jahu Residential and Commercial Construction Division1 Rental Division Events Division Corporate Total (1) Division acquired in 2008.

On December 31 of 2011, all employees were allocated in Brazil. The table below indicates the location of the employees of the Company, considering the divisions and departments to which they belong, as indicated below:
2011 States Heavy Construction 38 76 19 36 144 1 220 534 Industrial Services 927 38 103 421 416 283 589 2,777 Employees Jahu 8 48 17 89 23 24 8 59 44 31 112 56 168 687 Rental 19 6 6 9 41 29 13 24 47 11 89 294 Corporate 23 1 5 3 6 12 159 1 39 249 Total 8 1,055 24 176 73 24 8 228 29 57 524 878 352 1,105 4,541

Amazonas Bahia Cear Distrito Federal Esprito Santo Goias Mato Grosso Minas Gerais Par Paran Pernambuco Rio de Janeiro Rio Grande do Sul So Paulo Total

2010 States Heavy Construction 57 67 17 1 1 161 235 539 Industrial Services 1.309 248 570 870 2.997

Employees Jahu 44 51 13 54 36 37 108 102 445 Rental 31 3 42 7 7 39 60 189 Corporate 29 3 1 4 124 28 189 Total 1.470 121 17 365 43 1 45 1.002 1.295 4.359

Bahia Distrito Federal Esprito Santo Minas Gerais Paran Pernambuco Rio Grande do Sul Rio de Janeiro So Paulo Total

2009 States Heavy Construction Industrial Services Jahu Employees Rental Events Corporate Total

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2009 States Heavy Construction 137 262 19 30 50 498 Industrial Services 769 599 133 963 2,464 Jahu 82 84 41 53 18 278 Employees Rental 25 33 16 14 88 Events 1 1 Corporate 94 19 5 18 3 2 141 Total 1.107 998 214 1,025 56 70 3,470

Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Paran Rio Grande do Sul Distrito Federal Total

b. the number of outsourced employees (total, by groups based on activity and by geographic location)
The Company has outsourced certain activities which are not directly related to its core business, such as janitorial services, security, transport, meal preparation, and IT support, among others. In addition, the Company signs short-term employment contracts in accordance with the fluctuation in demand for their services. In December 31, 2011, the Company had 172 outsourced workers, as detailed below:
2011 State Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Cear Pernambuco Paran Rio Grande do Sul Distrito Federal Gois Par Manaus Total Janitorial services 14 24 5 2 4 1 3 10 1 64 Security 15 20 12 4 3 5 2 5 9 4 4 83 Transport 3 3 2010 State Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Cear Pernambuco Paran Rio Grande do Sul Distrito Federal Gois Par Total Janitorial services 10 16 2 1 1 1 4 35 Janitorial services 8 7 Security 12 15 7 2 4 1 2 1 44 2009 State Rio de Janeiro So Paulo Security 6 9 Transport 2 2 Catering 0 1 IT Support 3 2 Total 19 21 1 12 Transport Catering IT Support 5 4 1 1 Total 27 35 10 3 5 2 7 1 91 Catering IT Support 8 5 1 1 2 1 2 1 1 22 Total 40 49 18 7 9 7 7 6 9 11 5 4 172

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Minas Gerais Esprito Santo Bahia Paran Rio Grande do Sul Distrito Federal Total

1 1 0 0 0 2 19

4 0 2 0 0 2 23

0 0 0 0 0 0 4

0 0 0 0 0 0 1

0 0 0 0 0 0 5

5 1 2 0 0 4 52

c.

employee turnover index

The index of employee turnover (churn) in financial years ending in 2011, 2010 and 2009 was 5.5%, 5.9% and 4.8%, respectively, considering the employees allocated in the Industrial Services division. The turnover rate of professionals who assemble and disassemble equipment is significantly higher than the Company average, and reached 6.6% in 2011. This is a consequence of the short-term employment contracts signed to meet the fluctuation in demand for the Industrial Services division. Excluding this effect, the turnover rate in 2011, 2010 and 2009 would be 3.6%, 4.3% and 3.4% respectively.

d.

company's exposure to labor liabilities and contingencies

See item 4.3. 14.2 Comments about any relevant change that occurred with regard to the figures in the item 14.1" above. In 2011, the increase in the Company's workforce is related to the growth of their businesses, mainly in the Jahu and Rental divisions, especially due to formation of technical and commercial teams in the new branches. In 2010, the increase in the Company's workforce is related to the growth of their businesses, especially the Industrial Services division, which is labor intensive. 14.3 Description of Company employee remuneration policies

a.

Salary and variable remuneration policy

The Company believes one of its key competitive advantages is the quality of its skilled labor. The Company has developed, over the years, a human resources development culture based on achievement, employee participation and transparency. The Company also has profit sharing programs and offer opportunities for professional development. The Company believes this culture promotes the loyalty, engagement and enthusiasm of the employees, which leads to a historically low rate of substitution of skilled labor (turnover) and increases our ability to provide quality services to our customers. The Companys compensation policy includes the payment of salaries consistent with those in the market. Additionally, the Company offers the Profit Sharing Program to all its employees.

b.

Benefits policy

As a standard policy, the Company offers its employees the following benefits and facilities, which may change due to contracts executed with its clients: health insurance with coverage for hospital stays: employees contribute part of the cost of this benefit (15% to 35%, according to their salary);
157

group life insurance fully funded by the Company; dental care fully funded by the employees opting in for this benefit; essential food baskets partially funded by the Company (50%) for employees who receive up to six times the minimum wage, and that have not missed a workday or arrived late in the month. Each of these employees receives one food basket per month. In December 2011 the Company distributed 4,195 food baskets to our employees; meal allowance: 10% to 20% of the cost of the benefit is discounted from the employee's paycheck; loans to employees under the "Desafogo" Project: the funds should be allocated to specific purposes and cannot exceed one nominal salary of the employee, limited to the amount of 6 minimum wages; pharmacy benefit agreement; lending of a car to the executives, who must bear all maintenance costs of the vehicle (except for insurance and IPVA property tax); and stock option plan (only for our directors and executives).

c. Characteristics of compensation plans based on stock options of non-administrator employees

The Company has two stock option plans that benefit their employees, namely, "Plano Especial Top Mills and Plano de Opes de Compra de Aes 2010, previously granted purchase options remaining.

Plano Especial Top Mills

a. Groups of beneficiaries Managers of the Company, provided that they have been in this position since June 2007 or as otherwise deemed eligible by the Board of Directors. b. Conditions for the exercise Virtual stock options were converted into stock options upon the Companys IPO. c. Exercise price

The price of common shares to be acquired by beneficiaries through the exercise of options was R$1.88 per share, restated by the IPCA, calculated from January 2008 to the date of exercise of the option is exercised. d. Exercise terms The term for exercising the options will expire four years after the IPO, on April 15, 2014. e. Number of shares in the plan Up to 782,027 common shares issued by the Company, of which 512,301 are allocated to employees. So far, options were awarded to the employees which, when exercised, should be converted into 142,580 common shares of the Company.

158

Plano de Opes de Compras de Aes 2010

At the Extraordinary General Shareholders meeting held on February 8, 2010, the Stock Option Plan for Shares Issued by the Company was approved called Plano de Opes de Compra de Aes 2010 (Stock Option Plan - 2010), with amendments approved by the Board of Directors Meeting held on May 31, 2010 and by the Extraordinary General Shareholders meeting held on April 20, 2012. The Board of Directors approved (i) on March 11th, 2010, the Companys Program 1/2010 Stock Options Plan (1/2010 Program); and (ii) on March 25th, 2011, the Program 1/2011 Stock Options Plan (1/2011 Program). Groups of beneficiaries The 2010 Stock Options Plan is managed by the Companys Board of Directors, which considers the contribution of each beneficiary to achieving the targets designed to create added value, the development potential of each, and the essential nature of their jobs among other characteristics considered strategically relevant, elected as beneficiaries of the 2010 Stock Options Plan (i) for the 1/2010 Program, all the directors (or executives with similar roles) of the Company, and Company managers who have held their positions in 2009 for more than 6 (six) months; and (ii) for the 1/2011 Program, all the directors (or executives with similar roles) of the Company, and Company managers who have held their positions in 2010 for more than 6 (six) months. a. Conditions for the exercise To receive the stock options in the 1/2010 Program, each beneficiary must use at least of 33% of the variable portion of their compensation under the Company's Profit Sharing Program, net of taxes, which were received related to the 2009 financial year, to acquire shares issued by the Company. To receive the stock options in the 1/2011 Program, each beneficiary must use at least of 33% of the variable portion of their compensation under the Company's Profit Sharing Program, which were received related to the 2010 financial year, to acquire shares issued by the Company. Additionally, the Board of directors approved grants within the 1/2010 and 1/2011 Programs, independent of the investment in the Companys shares to certain employees of the Company, due to its performance in the exercise of their jobs. For as long as the exercise price is not fully paid, the shares acquired through the exercise of the option under the Plan cannot be sold to third parties, except upon prior authorization from the Board of Directors, in which case the sale proceeds will be mainly used to settle the beneficiary's debt with the Company. Pursuant to the respective Option Agreement, each beneficiary is prohibited to trade their acquired shares for a period of 5 years, respecting the following rules: (i) After one year as of the execution of the respective Option Agreement, beneficiaries are free to trade up to 25% of their acquired shares; (ii) After one year as of the term defined in item i, beneficiaries are free to trade another 25% of their acquired shares; (iii) After one year as of the term defined in item ii, the beneficiary is free to trade another 25% of the acquired shares; and (iv) After one year as of the term defined in item iii, each beneficiary is free to trade the remainder of their acquired shares; b. Exercise price

159

Until April 20, 2012, the price of the ordinary shares to be acquired by the beneficiaries, by exercising their option rights were determined by the Companys Board of Directors or committee based exclusively on the average share price on the BM&FBOVESPA, weighted by the trading volume in the month or the two months prior to the granting of the stock option, monetarily adjusted by the inflation index IPCA (ndice de Preos ao Consumidor Amplo), and deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date. On April 20, 2012, according to the resolution of the General Meeting held on that date, the criterion for fixing the exercise price of the options that have as a counterpart the acquisition of shares by its beneficiary was changed and was defined as the equity value of the shares on the last day of the subsequent fiscal year. This change does not affect the options granted prior to that General Meeting and the new criterion does not apply to options granted that have no counterpart of the acquisition of shares by the beneficiary, which continues to be applied the criterion of market price, described above. For the 1/2010 Program, the exercise price of the options will be based on the value of the shares issued at the Companys Initial Public Offering (R$11.50), monetarily adjusted by the inflation according to the IPCA, deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date. Regarding the 1/2011 Program, the exercise price of the options will be (i) the average share price acquired according to brokerage invoice sent by the beneficiary to the Board of Directors or Human Resources Committee of the Company (R$ 19.28), (ii) monetarily adjusted by the inflation according to the IPCA, disclosed by the Brazilian Institute of Geography and Statistics (IBGE), or by another index determined by the Board of Directors or committee, according to the case, from the date of conclusion of the stock option agreement until the date the option is exercised, (iii) deducting the value of dividends and interest on equity per share paid by the Company as from the stock option date. The price of the common shares to be acquired by the beneficiaries through the exercise of options shall be set by our Board of Directors or committee, based on the average trading price of our shares on the BM&FBOVESPA, weighted by the trading volume in the month or two months prior to the grant, adjusted for inflation using the IPCA, less any dividends and interest on equity per share paid by us as of the grant date. Exceptionally for the first grant, the exercise price of the options will be based on the IPO issue price (R$11.50), adjusted for inflation using the IPCA, less any dividends and interest on equity per share paid by us as of the date of grant. The options granted under this plan will be subject to vesting periods of up to 72 months for the conversion of options into shares. c. Number of shares in the plan

In the 2010/1 Program: Up to 1,475,234 common shares issued by the Company, which 936,520 designated to non-administrators employees. By December, 31, 142,678 shares were exercised. In the 2011/1 Program: Up to 1,184,229 common shares issued by the Company, which 792,183 designated to non-administrators employees. 14.4 Description of the relationships between the Company and trade unions

At December 31, 2011, approximately 3.9% of the Companys employees were represented by a trade union, especially the Civil Construction Trade Union and the Commerce Union. The Company has agreements with each trade union, and renegotiates them every year. The Company maintains a good relationship with the main trade unions its employees are represented by. Even so, the Company has had strikes in the Industrial Services Division for past three years in Rio de Janeiro, Minas Gerais, Esprito Santo and Bahia, triggered by disagreements with the trade unions regarding the collective bargaining agreements, totaling a downtime of 57 days, and reaching only part of the workforce. Additionally, the Companys employees were involved in strikes at clients sites.

160

15.

OWNERSHIP

161

15.1/15.2

Controling Group:

The table below presents the ownerhip structure of company to date, emphasizing the quantity of shares of capital stock held by direct controlling and administrators on October 2nd, 2012:
MILLS ESTRUTURAS E SERVIOS DE ENGENHARIA S.A. Participat es in Controlli sharehold ng er sharehol agreemen der t Yes Yes Yes 14.740.333/0001-61 01.701.201/0001-89 Spanish Brazilian Yes No No No Yes Yes No No No
Quantity of common shares % Capita l Stock

Name

Date of last amendment

Type of Person

CNPJ/CPF

Nationality

UF

Andres Cristian Nacht Other signatories of the Companys Shareholders Agreement Snow Petrel S.L. HSBC Bank Brasil S.A Administrators Others

12/28/2012 12/28/2012 7/20/2012 10/2/2012 12/28/2012 12/28/2012

Individual Individual Entity Entity Individual

098.921.337-49

Argentinian

15,596,249 11,825,464 17,728,280 6,323,300 3,662,709 71,263,428

12.3% 9.4% 14.0% 5.0% 2.9% 56.4%

SNOW PETREL S.L. Participat es in Controlli sharehold ng er sharehol agreemen der t Yes Yes
Quantity of common shares % Capita l Stock

Name

Date of last amendment

Type of Person

CNPJ/CPF

Nationality

UF

Malachite Limited Malachite Limited

3/14/2012

Entity

N/A

Malta

100%

Name

Date of last amendment

Type of Person

CNPJ/CPF

Nationality

UF

Nicolas Nacht Helen Anne Margaret Ahrens Outros

3/14/2012 3/14/2012 3/14/2012

Entity Entity Entity

734.150.811-68

Argentino

Participat es in Controlli sharehold ng er sharehol agreemen der t Yes Yes Yes Yes Yes Yes

Quantity of common shares

% Capita l Stock

2,000 2,000 1,000

40% 40% 20%

15.3

Description of Share Capital

On April 20, 2012: Number of individual shareholders Number of corporate shareholders Number of institutional investors Date of last General Meeting Number of outstanding shares free float % free float 511 525 26 4/20/2012 77,586,728 61.4%

162

15.4

Organization chart of company shareholders with equal to or more than 5% of shares

See item 8.2. 15.5 Shareholder Agreements filed at the headquarters of the Company in which the controlling entity participates, which regulate the exercise of voting rights or rights to transfer Company shares: The Shareholder Agreement signed on July 9, 2007 was terminated because of the public offering of primary and secondary distribution of shares of the Company. On February 11 of 2011, the controlling shareholders of Nacht Participaes S.A. (Nacht Participaes) signed a new Shareholders Agreement regulating the exercise of the Company's control, as described below. a. Members: (i) Andrs Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kjellerup Nacht, Francisca Kjellerup Nacht (jointly, Famlia Nacht), (ii) Jeroboam Investments LLC, and (iii) as actors, Nacht Participaes S.A. and Mills Estruturas e Servios de Engenharia S.A.. Due to the extinction of Jeroboam Investments L.L.C, Snow Petrel S.L., as its sole member, succeeded all of its rights and obligations, including as a party to the Nacht Participaes S.A. Shareholders Agreement executed on February 11, 2011. b. c. Date: 02.11.2011 Term: 05.31.2013

d. Description of the clauses relating to the exercise of voting rights and control power. The vote of the parties with respect to any resolutions pertaining to the Company, whether in general meetings or other corporate events, must be set by agreement between the parties. The shareholder Andrs Cristian Nacht, for this purpose, either in general meetings or board of directors meetings, will always represent the parties. e. Description of the clauses relating to the appointment of administrators. See item d. No other provisions for the appointment of directors, in addition to the prediction that the parties will be represented on the board by Mr. Andrs Cristian Nacht. f. Description of the clauses concerning the transfer of shares and the preference for buying them. The shareholder agreement forbids the transfer of shares to persons outside the family connection consanguinity between the control group in excess of 10% of the shares held by each party to the shareholders agreement. g. Description of the clauses restricting or binding the voting rights of members of the board. See item d. No other provisions for the restriction or binding vote of the directors, in addition to the prediction that the parties will be represented on the board by Mr. Andrs Cristian Nacht. In October 29, 2012, an extraordinary shareholders meeting took place to approve Nachts capital stock reduction after the 60-day statutory period provided by article 174 of Law 6,404, of December 15, 1976, as amended, transferring the totality of its previously held shares issued by Mills, meaning that the Nacht Family will now hold direct participation in the Company, as Snow Petrel already did. Neither the capital reduction nor the related transfer of the shares issued by Mills resulted in any change of Mills corporate control, which, before the capital reduction, was formerly exercised jointly by Nacht Participaes, its shareholders and Snow Petrel S.L., and, after the capital reduction, will be exercised by Nacht Participaes shareholders jointly with Snow Petrel S.L. In view of the foregoing and the proximity of the end of the Shareholders Agreement term (12/31/2012), the parties, in October 30, 2012, extended the term until May 31, 2013, allowing for the negotiation of
163

new terms, without any change in its values and foundations nor any change in Mills corporate control structure. As of December 28, 2012, Nacht Participaes S.A. reduced its capital stock, transferring the totality of its previously held shares issued by Mills to its shareholders, who now has direct participation in the Company, as already did Snow Petrel. 15.6 Significant Changes in the shareholdings of Members of the Control Group and directors of the Company in the last 3 financial years

Increases of Capital of the Company and Staldzene

Shareholders of the Company and Staldzene approved on March 12, 2010 an increase in the capital of both companies worth R$ 323.8 thousand through the issue of 153,690 shares by the Company and 24,809,032 shares of Staldzene Empreendimentos e Participaes S.A. (Staldzene). The increase was approved due to the exercise of options to purchase shares granted under the "Special Plan ex-CEO". The increase in the share capital of the company was fully subscribed by Staldzene, while the increase in the share capital of Staldzene was fully subscribed by the recipient of the "Special Plan ex-CEO".

Corporate rearrangements involving Staldzene and Nacht Participaes

On March 18, 2010, Staldzenes shareholders, the Companys controlling shareholder, ratified the reduction of the share capital of that Company, which was approved at the Extraordinary General Meeting held on December 4, 2009. The reduction was of R$13.3 million, with the distribution of 6,307,457 shares of the Company to Staldzenes shareholders, disproportionately distributed to the participation held by those shareholders. Also on March 18, 2010 shareholders of Nacht Participaes S.A. (Nacht Participaes), controlling shareholder of Staldzene, ratified the reduction of the share capital of that Company approved at the Extraordinary General Meeting held on December 4, 2009. The reduction was of R$13.3 million, with the distribution of 6,307,457 shares of the Company to Nachts shareholders, disproportionately distributed to the participation held by those shareholders. On September 30, 2010, Staldzene had its share capital decreased after capitalizing intermediate profits and part of the legal reserve. The share capital reduction occured by transferring a certain quantity of Mills shares, which are currently owned by Staldzene, to Staldzenes shareholders. Staldzene participation in the Companys total and voting capital was reduced in 6.7%, from 46.0% to 39.3%. On November 30, 2010, Staldzene was extinguished due to a corporate restructuring. Nacht merged Staldzene, succeeding it in all its rights and obligations. As a result, Nacht becomes Mills direct controlling shareholder with 39.3% of the total and voting capital stock. In February 2011, Nacht Participaes reduced its capital stock through the delivery of shares issued by the Company currently held by Nacht to some of its shareholders, the transaction was completed on April 18, 2011. In order to regulate the right to vote and the transfer of shares of Nacht Participaes and the Company, the shareholders of Nacht Participaes celebrated a Shareholders Agreement, on February 11, 2011, date prior to its capital reduction and thus including all of its former shareholders. The capital reduction and the execution of the Shareholders Agreement have not led to any change in management structure or in control of the company, which continues to be owned by the Familia Nacht (Nacht Family), in the same proportion of 39% detained earlier. Additionally, this operation did not involve change in number of shares or in the value of total capital of the Company.

164

Primary offering and secondary distribution of shares

The Company with some of its shareholders promoted primary public offering of 37,037,037 shares issued by the Company and secondary public offering of 14,814,815 shares held by selling shareholders. The Offer Shares have been traded on the Novo Mercado segment of BM&FBOVESPA since April 16, 2010. On May 14, 2010, the leading coordinator of the public offer fully exercised the option of placing additional 7,777,777 common shares owned by certain selling shareholders. The shares subject to such allotment will be traded on the Novo Mercado segment of BM&FBOVESPA on May 19, 2010. There was no increase in the capital of the Company due to the exercise of the over-allotment option.

Transfer of ownership from controlling shareholder

The company, in December 28, 2012, was notified by Nacht Participaes S.A. about the effectiveness of its capital stock reduction, with the delivery of the totality of its previously held shares issued by Mills to its shareholders, following the correspondence sent by Nacht Participaes in October 30, 2012, which informed of such capital reduction approval. According to that notices terms, with the effectiveness of the aforementioned capital stock reduction, after the 60-day statutory period provided by article 174 of Law 6,404, of December 15, 1976, as amended, all 27,421,713 (twenty-seven million, four hundred and twenty-one thousand, seven hundred and thirteen) shares issued by Mills and previously held by Nacht Participaes were transferred to its shareholders, proportionally to their respective participations in Mills capital stock. As a consequence of such transfer, shareholders Andres Cristian Nacht, Jytte Kjellerup Nacht, Tomas Richard Nacht, Antonia Kjellerup Nacht, Pedro Kjellerup Nacht and Francisca Kjellerup Nacht, all headquartered at Avenida Marechal Floriano n. 22, 12 andar, Centro, ZIP Code 20080-006, in the city of Rio de Janeiro, part of the state of Rio de Janeiro, inform that they now hold, directly, 27,421,713 commons nominative shares with no par value, issued by Mills, which represent 21.7% of Mills capital. Still within the notices terms, neither the capital reduction nor the related transfer of the shares issued by Mills resulted in any change of Mills corporate control, which, before the capital reduction, was formerly exercised jointly by Nacht Participaes, its shareholders and Snow Petrel S.L., and, after the capital reduction, will be exercised by Nacht Participaes shareholders jointly with Snow Petrel S.L.. Such shares remain encumbered and subject to the terms of the "Shareholders Agreement of Nacht Participaes S.A.", executed on February 11, 2011, as amended, which also applies to Mills. The above mentioned shareholders have also reported on this date, that (i) except for the Shareholders' Agreement, are not parties to any agreement or contract regulating the exercise of any voting rights or the purchase and sale of any securities issued by Mills, and (ii) they do not hold any other shares, warrants, subscription rights of shares, call options nor convertible debentures into Mills shares. The Company was informed, on March 14, 2012, by Snow Petrel S.L., a company headquartered in Barcelona, Spain, at Calle Johann Sebastian Bach 20, 3rd floor, and registered with the CNPJ/MF under n. 14.740.333/0001-61 (Snow Petrel), of the transfer of all common shares, book-entry shares, with no par value issued by Mills held by Jeroboam Investments LLC (Jeroboam) for Snow Petrel, due to the dissolution and consequent extinction of its wholly owned subsidiary Jeroboam. Therefore, Snow Petrel came to hold 19,233,281 (nineteen million, two hundred thirty-three thousand, two hundred eighty-one) shares of Mills, representing 15.3% of its capital stock. Snow Petrel also reported that: (a) it does not hold, directly or indirectly, including through a person connected to it, other shares issued by the Company, subscription warrants or convertible debentures, subscription rights or an option to purchase shares issued by the Company; (b) due to the transfer of the shares, Snow Petrel will succeed Jeroboam as a party to the Nacht Participaes S.A. Shareholders Agreement executed on February 11, 2011; (c) Snow Petrel, as was Jeroboam until its extinction, is controlled by Sr. Nicolas Nacht; (d) Snow Petrel intends to continue to hold shared control of the Company, this being the main objective of its participation; and (e) since all of the capital of Jeroboam
165

was already held by Snow Petrel, the transfer discussed in this notice does not impact, in any way, control of the Company.

Controlling shareholder ownership reduction

The company, in December 28, 2012, was notified by Nacht Participaes S.A. about the effectiveness of its capital stock reduction, with the delivery of the totality of its previously held shares issued by Mills to its shareholders, following the correspondence sent by Nacht Participaes in October 30, 2012, which informed of such capital reduction approval. According to that notices terms, with the effectiveness of the aforementioned capital stock reduction, after the 60-day statutory period provided by article 174 of Law 6,404, of December 15, 1976, as amended, all 27,421,713 (twenty-seven million, four hundred and twenty-one thousand, seven hundred and thirteen) shares issued by Mills and previously held by Nacht Participaes were transferred to its shareholders, proportionally to their respective participations in Mills capital stock. Still within the notices terms, neither the capital reduction nor the related transfer of the shares issued by Mills resulted in any change of Mills corporate control, which, before the capital reduction, was formerly exercised jointly by Nacht Participaes, its shareholders and Snow Petrel S.L., and, after the capital reduction, will be exercised by Nacht Participaes shareholders jointly with Snow Petrel S.L.. Such shares remain encumbered and subject to the terms of the "Shareholders Agreement of Nacht Participaes S.A.", executed on February 11, 2011, as amended, which also applies to Mills. The Company was informed, on July 2012, by Snow Petrel S.L, of the sale of 1,505,001 shares of the Company, reducing it ownership from 15.24% to 14.05% of its capital stock. Snow Petrel also reported that it does not hold any debentures convertible into shares, warrants, subscription rights, options for the purchase of shares, nor any securities that are representative or convertible into shares and any contract that may result into the exercise of voting rights based on shares issued by Mills. According to the notice, Snow Petrel and Nacht Participaes S.A., parties of Nacht Participaes S.A. Shareholders Agreement executed on February 11, 2011, having as its object, among other terms, Mills control, reported that this sale does not change, neither has the intention to change, the control or administrative structure of Mills and that the terms of the mentioned shareholders agreement are in full force. 15.7 Other information which the Company deems relevant

On November 12, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$ 463,838.37 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2010"). There was issuance of 37,029 new common stocks. Also on November 12, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$982,280.40 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 48.151 new common stocks. On August 9, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$886,108.00 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2010"). There was issuance of 70,550 new common stocks. Also on August 9 , 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$20,000.00 due to the exercise of stock option, according to
166

the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 1,600 new common stocks. Also on August 9, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$1,633,370.82 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Programa de Outorga de Opes 1/2011"). There was issuance of 80,422 new common stocks. On July 2nd, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$31,276.80 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes - Plano Especial TopMills). There was issuance of 13,032 new common stocks. On June 21 , 2012 was approved, in the Board of Directors Meeting, the removal of 4,000 registered common shares with no par value, held in treasury, as a result of the appraisal rights extended to dissenting shareholders in connection with the resolutions passed at the shareholders meeting held on th April 20 , 2012. On April 24, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$4,613,384.16 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2010"). There was issuance of 371.448 new common stocks. Also on April 24, 2012 was approved, in the Board of Directors Meeting, the increase of the Companys capital stock, totalizing on the amount of R$892,862.10 due to the exercise of stock option, according to the Companys Stock Option Plan, archived in the Companys headquarters ("Programa de Outorga de Opes- Programa de Outorga de Opes 1/2011"). There was issuance of 44.421 new common stocks. According to Ofcio circular/CVM/SEP/n 007/2011, the number of shares free-float reported in item 15.3 refers to the changes described above. Additional information regarding item 15.3 Shareholders Meeting on April 20, 2012 Number of individual shareholders Number of corporate shareholders Number of institutional investors Date of last General Meeting Number of outstanding shares free float % free float 511 525 26 4/20/2012 72,452,383 57.6%
th

On December 28, 2012 Number of individual shareholders Number of corporate shareholders Number of institutional investors Date of last General Meeting Number of outstanding shares free float % free float
167

642 690 20 4/20/2012 77,586,728 61.4%

16.

TRANSACTIONS WITH RELATED PARTIES

168

16.1

Rules, Policies and Practices for Transactions with Related Parties.

The business and transactions with related parties of the Company are always performed by observing price and usual market conditions and they do not generate any benefit or detriment to the Company or any other party. Under the Companys bylaws, the Board must approve any transaction with any of the Company's shareholders. 16.2 Information on Transactions with Related Parties
Amount (R$ thousand
(R$ thousand)

Name of related party

Relationship with the Company

Date of Transaction

Purpose of the contract

Oustanding on December 31 of 2012

(R$ thousand)

Amount of related party(R$

thousand)

Guaranties and insurance

Duration (months)

Conditions of termination or expiration

Elio Demier

Board of Directors Member

10/1/2009

Consulting IPO

175,000

175,000

04/30/2010

Loan and Debts Purpose and Interest reason rate -

16.3

Measures Taken to Address the Conflict of Interest

The Company adopts corporate governance practices and those recommended and/or required by applicable regulations including those set out in Novo Mercado regulations. The Board of Directors must approve the policies and make necessary arrangements for directors and shareholders to not be involved in conflict of interest situations. Additionally, pursuant to the Companys by-laws, the Board of Directors must approve any transaction with any of the Company's shareholders. The transactions described in Item 16.2 above were conducted by administrator who had no conflict of interest with the Company, as it was evidenced by the instruments that guided these operations.

17.

SHARE CAPITAL

170

17.1

Information about the share capital

Type of Capital: Authorized Capital Date of approval: 04/20/2012 Capital R$: Quantity of common shares: 200,000,000 Total quantity of shares: 200,000,000 Type of Capital: Issued Capital Date of approval: 11/12/2012 Capital R$: 537,625.207.74 Quantity of common shares: 126,399,430 Total quantity of shares: 126,399,430 Type of Capital: Subscribed Capital Date of approval: 11/12/2012 Capital R$: 537,625.207.74 Quantity of common shares: 126,399,430 Total quantity of shares: 126,399,430 Type of Capital: Paid-up Capital Date of approval: 11/12/2012 Capital R$: 537,625.207.74 Quantity of common shares: 126,399,430 Total quantity of shares: 126,399,430

17.2

Regarding the increase of Capital increases

Corporate Body that ruled the increase

Resolution Date

Issue Date

Total amount of the increase

Type of Increase

Shares issued

Subscription / previous capital

Issue price

Rate Unit

Criteria used to determine the issue price The issue price was determined based on the equity value of the Companys shares. The issue price was determined based on the equity value of the Companys shares. The issue price was determined based on the equity value of the Companys shares.

Form of Payment

1/30/2009

General Meeting

1/30/2009

R$27,178,575.61

Private Subscription

20,096,393

40.4899

R$1.35

R$ Unit

Goods

10/1/2009

General Meeting

10/1/2009

R$134,423.51

Private Subscription

199,853

0.1541

R$0.67

R$ Unit

Cash

3/12/2010

General Meeting

R$16,200,604.68

Without Share Issuance

R$ Unit

3/12/2010

General Meeting

3/12/2010

R$323,828.12

Private Subscription

153,690

0.3998

R$2.11

R$ Unit

Cash

171

4/14/2010

Board of Directors

4/14/2010

R$425,925,926.00

Public Subscription

37,037,037

436.7241

R$11.50

R$ Unit

11/30/2010

Board of Directors

11/30/2010

R$ 1,670,424.84

Private Subscription

884,005

0.3191

R$1.89

R$ Unit

07/27/2011

Board of Directors

07/27/2011

R$1,548,424.09

Private Subscription

128,287

0.2949

R$ 12.07

R$ Unit

The issue price was determined based on the gathering of investment intentions conducted by the issuance coordinators and related companies together with institucional investors (bookbuilding procedures) Regards the average issue price. Values related to the Companys stock option plans (Special Plan Top Mills, Special CEO Plan, Special Rental - Director Plan, Special Rental - Manager Plan). The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (July 2011). The price is based according to the Companys stock option plan (Special TopMills Plan, Special Plan) The price is based according to the Companys stock option plan (Special TopMills Plan, Special Plan) The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date

Cash

Cash

Cash

09/23/2011

Board of Directors

09/23/2011

R$110,495.40

Private Subscription

48,028

0.0210

R$ 2.30

R$ Unit

Cash

09/23/2011

Board of Directors

09/23/2011

R$14,142.18

Private Subscription

18,598

0.0027

R$ 0.76

R$ Unit

Cash

10/24/2011

Board of Directors

10/24/2011

R$790,329.68

Private Subscription

65,642

0.1498

R$ 12.04

R$ Unit

Cash

172

01/24/2012

Board of Directors

01/24/2012

R$398,490.09

Private Subscription

32,583

0.0755

R$12.23

R$ Unit

02/28/2012

Board of Directors

02/28/2012

R$ 4,227.33

Private Subscription

339

0.0008

R$12.47

R$ Unit

04/2/2012

Board of Director

04/02/2012

R$ 112,171.78

Private Subscription

47,131

0.0212

R$2.38

R$ Unit

04/24/2012

Board of Director

4/24/2012

R$ 4,613,384.16

Private Subscription

371,448

0.8736

R$ 12.42

R$ Unit

04/24/2012

Board of Director

4/24/2012

R$ 892,862.10

Private Subscription

44,421

0.1691

R$ 20.20

R$ Unit

(Oct/2011) The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (Jan/2012) The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (Feb/2012) The price is based on the Companys stock option plan corrected monetarily by the agreedment with the IPCA, from January 2008 until the option contract date The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (April/2012) The exercise price of options granted under this programme is equal to (i) the average price of shares purchased as brokerage note sent by the beneficiary to the human resources Department of the company, (ii) restated

Cash

Cash

Cash

Cash

Cash

173

07/02/2012

Board of Director

07/02/2012

R$ 31,276.80

Private Subscription

13,032

0.0059

R$ 2.40

R$ Unit

08/09/2012

Board of Director

08/09/2012

R$886,108.00

Private Subscription

70,550

0.1660

R$12.56

R$ Unit

08/09/2012

Board of Director

08/09/2012

R$20,000.00

Private Subscription

1,600

0.0037

R$12.50

R$ Unit

08/09/2012

Board of Director

08/09/2012

R$1,633,370.82

Private Subscription

80,422

0.3056

R$20.31

R$ Unit

11/12/2012

Board of Director

11/12/2012

R$ 445,178.37

Private Subscription

35,529

0.0830%

R$12.53

R$ Unit

according to the IPCA, from the date of The price is based according to the Companys stock option plan (Special TopMills Plan, Special Plan) The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (2010/1 Plan) The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (2010/1 Plan) The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (2010/1 Plan) The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date, deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date

Cash

Cash

Cash

Cash

Cash

174

(2010/1 Plan)

11/12/2012

Board of Director

11/12/2012

R$ 18,660.00

Private Subscription

1,.500

0.0035%

R$12.44

R$ Unit

11/12/2012

Board of Director

11/12/2012

R$ 982,280.40

Private Subscription

48,151

0.1830%

R$20.40

R$ Unit

The price is based on the issue price of Mills shares during the IPO, adjusted monetarily by the IPCA, as from the option contract date, deducted from the dividend and interest on capital values per share paid by Mills, until the fiscal date (2010/1 Plan) The exercise price of options granted under this programme is equal to (i) the average price of shares purchased as brokerage note sent by the beneficiary to the human resources Department of the company, (ii) restated according to the IPCA, as from the option contract date, (2011/1 Plan)

Cash

Cash

17.3

Stock splits, reverse splits and bonuses.

Not applicable, as none of these operations occurred. 17.4 Regarding reductions in the Companys share capital

The table below details the reduction of the Companys capital approved on June 30, 2009:
Capital Reductions Resolution Date 06/30/2009 Reduction Date 06/30/2009 Body Resolution Shareholder Meeting Value Reduction R$13,434,306.72 Canceled Shares Refund per Share Percentual Reduced(1) 14.2% Reasons for the Reduction Loss Reduction

_____________________________ Represents the percentage of the capital reduction relative to the capital immediately prior to the reduction.

17.5

Other information that the Company considers relevant

Additionally, at the Extraordinary General Meeting held on January 30, 2009, the Companys shareholders approved the conversion of 23,990,948 common shares into the same number of class A preferred shares. On February 8, 2010, the Companys shareholders approved at the Extraordinary General Meeting the conversion of all of the Companys class A preferred shares into common shares at a ratio of one new common share for each class A preferred share converted. At the Ordinary and Extraordinary General

175

Meeting held on April 19, 2011, it was approved the amendment of the caput of Article 5 of the Company's Bylaws, to adjust it to the deliberations of the Board of Directors taken on April 14, 2010 and November 30, 2010, which approved the increase of capital stock within the limit of authorized capital. At the Extraordinary General Meeting held on April 20, 2012, it was approved the amendment of the

caput of Article 5 of the Company's Bylaws, to adjust it to the deliberations of the Board of Directors
taken on July 27, 2011, September 23, 2011, October 24, 2011, January 24, 2012 and February 28, 2012, which approved the increase of capital stock within the limit of authorized capital, passing the relevant article to henceforth as the following wording

"5th Article The capital stock, which is fully subscribed and paid in, is R$ 527,989,915.31 (five hundred twenty-seven million, nine hundred eighty-nine thousand, nine hundred and fifteen reais and thirty-one centavos), represented by 125,689,646 (one hundred twenty-five million, six hundred eighty-nine thousand, six hundred and forty-six) book entry common shares without par value."

176

18.

SECURITIES

177

18.1

Description of the rights of each class and type of share issued

Type of shares: Common

Tag Along: 0.00% Dividend rights: At each Ordinary Shareholder Meeting, the Board of Directors should make a recommendation on the allocation of net income for the preceding fiscal year, which will be subject to approval by the shareholders. The Company's Bylaws provides that an amount equivalent to 25% of the adjusted net income for the year should be available for the payment of dividends or interest on equity in any fiscal year. This amount represents the compulsory dividends. If the mandatory dividend exceeds the realized portion of net income, the excess may be allocated to an unrealized profit reserve. The calculation of net income and allocations to reserves and the amounts available for distribution are made based on financial statements prepared pursuant to the Brazilian Corporate Law. Voting rights: Full Convertibility to other class or type of share: no Right to reimbursement of capital: yes Description of the reimbursement of capital: The Company's statutory provisions follow, in this subject, the rules established in the Corporate Law Act and applicable legislation. Restrictions regarding outstanding shares: no Circumstances where guaranteed rights of said securities may be altered: Under the Brazilian Corporate Law, the Bylaws, or resolutions adopted by shareholders in General Meetings can restrict the shareholders from the following rights: (i) Right to profit sharing; (ii) Right to participate in the distribution of any remaining assets in case of Company liquidation, proportionately to their interest in the capital stock; (iii) Preemptive rights in the subscription of shares, convertible debentures or subscription rights, except in certain circumstances provided in the Brazilian Corporate Law; (iv) The right to supervise the management of corporate businesses, as provided by the Brazilian Corporate Law; (v) The right to vote in Shareholders General Meeting; (vi) The right to leave the Company, in the cases provided in the Brazilian Corporate Law. Changes in rights assured by shares other than those listed above (e.g.: change in the minimum compulsory dividend, change in the reimbursement amount, limitations to the exercise of voting rights, etc.) may be modified by decisions made in general shareholders meetings, by simple or qualified majority of the Company's shareholders, depending on the nature of the matter to be resolved. Other Relevant Characteristics: No further relevant information pertaining to this item 18. 18.2 Statutory regulations which limit the right to vote of relevant shareholders or which cause them to hold a public offering. According to Article 32, Chapter 7 of the Companys bylaws, the transfer of shareholding Control of the Company, directly or indirectly, whether through a single transaction, or through successive transactions, shall be contracted under a condition precedent or subsequent that the acquiring party shall obligate itself to make a Public Tender Offer for the remaining shares of the other shareholders of the Company, subject to the conditions and periods provided for in applicable legislation and the Novo Mercado Rules, such that they are assured treatment equal to that given to the Selling Controlling Shareholder. Paragraph 1 The public offering referred to in this article shall also be required: (a) when there is encumbered assignment of subscription rights or an option to acquire shares or other securities or rights

178

relating to securities convertible into shares, or that give the right to their subscription or acquisition, as applicable, which comes to result in the sale of Control of the Company, and (b) in the case of a transfer of control of company(ies) holding the Power of Control of the Company, in which case, the Selling Controlling Shareholder shall be obliged to declare to the BM&FBOVESPA the value assigned to the Company in such transaction and provide supporting documentation. 18.3 Description of exceptions and suspensive clauses relative to ownership or political rights set forth in the bylaws Not applicable, as there are no exceptions or suspensive clauses relative to ownership or political rights set forth in the Companys bylaws. 18.4 Information on the volume of trading as well as minimum and maximum values for securities traded on the stock exchange or the over-the-counter market, in each of the quarters in the last 3 fiscal years.
Quarter ended Securities Type Class Market Administrative Authority Total financial volume traded (Reais) Highest price (Reais) Lowest price (Reais) Factor price (Reais)

03/31/2010

Not applicable, as the company did not have securities traded on stock exchange or over-the-counter market in that period. Stock Exchange Stock Exchange Stock Exchange Stock Exchange Stock Exchange Stock Exchange Stock Exchange BM&FBOVESPA R$ per unit R$ per unit R$ per unit R$ per unit R$ per unit R$ per unit R$ per unit

06/30/2010

Shares

Common

Bolsa de Valores, Mercadorias e Futuros Bolsa de Valores, Mercadorias e Futuros Bolsa de Valores, Mercadorias e Futuros Bolsa de Valores, Mercadorias e Futuros Bolsa de Valores, Mercadorias e Futuros Bolsa de Valores, Mercadorias e Futuros Bolsa de Valores, Mercadorias e Futuros
BM&FBOVESPA BM&FBOVESPA BM&FBOVESPA BM&FBOVESPA BM&FBOVESPA BM&FBOVESPA -

205,417,537

13.99

10.10

09/30/2010

Shares

Common

181,735,768

17.13

13.40

12/31/2010

Shares

Common

660,681,560

25.30

16.65

03/31/2011

Shares

Common

389,456,322

23.27

17.13

06/30/2011

Shares

Common

393,427,101

23.49

18.06

09/30/2011

Shares

Common

273,785,519

23.77

16.56

12/31/2011

Shares

Common

337,269,490

18.95

14.49

18.5

Description of other securities which are not shares

first issue of commercial papers in a single series already fully redeemed. 30 commercial papers R$30,000,000.00 March 29, 2011 June 27, 2011

a Identification of securities b Quantity c Total amount d Issue date Deadline

179

e f

Restrictions on trading Convertibility

The Commercial Papers were the object of a public distribution offer with restricted placement efforts, targeted at qualified investors, as defined in Article 4 of CVM Rule 476, on a firm guarantee basis. Not applicable. The first issue of promissory notes are not convertible into shares issued by the company.

g Possibility of redemption: Each commercial note of first issue was subject to early repayment, in whole, at any time from the date of issue, at the discretion of the company, provided that its holder is notified within 5 (five) working days in advance of the date set for the rescue. Additionally, the (i) hypotheses of redemption Company was obliged to redeem all the notes in advance of the first issue on the date of subscription of the debentures of the first issue, described below. Therefore, all commercial notes of first issue were fully redeemed on April 28, and are no longer in circulation. The amount to be paid by the Company to the holder of each commercial note first issued (ii) Assumptions and method of corresponded to their nominal value plus the remuneration, calculated pro rata temporis calculating the redemption value since the date of issue until the date of effective payment, but without payment of prize or penalty. h if debt securities, indicate where applicable: Maturing on June 27, 2011. The notes were redeemed when the Company issued debentures, on April 28, 2011. Subject to the provisions of the cartouches in Commercial Notes, the holder could declare early maturity of the obligations under the Commercial Paper, and may demand immediate payment of the Nominal Amount plus the remuneration, the occurrence of any of the following events, provided in addition to other cartouches and those provided by law (each event, an "Event of Default"): (i) declaration of acceleration of any other Commercial Paper; (ii) default by the Company of any monetary obligation due under the Commercial Paper; (iii) default by the Company of any non-pecuniary obligation due under the Commercial Paper; (iv) sale, assignment or pledge any form of transfer or promise to transfer to third parties in whole or in part, by the Company of any of the Obligations, without the prior consent in writing of the Holder; (v) transformation of the Company into a privately held Company or any other social arrangement; (vi) approval of any corporate reorganization involving the Company, without the prior consent in writing of the Holder; (vii) change in the Company's Control; (viii) Changing the corporate purpose, unless such change does not result in changing the company's main activity; (ix) acceleration of any financial obligation of the Company and/or any Subsidiary of the Company, the value of which, individually or in aggregate, be less than R$ 5,000,000.; (x) default by the Company due to mandatory early redemption of subscription and payment of the Debentures, as provided under "Early Redemption" above, or (xi) the Company does not use the net proceeds of the offering as described under "Use of Proceeds" in the cartouche. The nominal value of each commercial note of first issue was not subject to monetary correction. On the nominal value of each note were added remuneration interest focused corresponding to the variation of accumulated 105% (one hundred and five per cent) of the DI rate (Remuneration), from the date of issue until the date of the effective payment of their commercial note, and followed the criteria for calculating the Trade Notes formulas and Obligations CETIP21, which is available on the Web (www.cetip.com.br). (ii) interest The remuneration was paid in full on the date of early redemption, subject to the terms and conditions provided for in each commercial note first issued. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment . (iii) guarantee and, if in the form of collateral, Not applicable description of the goods used as collateral (iv.) in the absence of a guarantee, if the credit is The credit represented by each commercial note of first issued were unsecured. secured or subordinate

(i) maturity date, including conditions for acceleration

180

i j

(v) possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities (vi) the fiduciary agent, indicating the key terms of the contract conditions for amendment of the rights conferred by such securities other relevant characteristics

See terms of acceleration described above

Not applicable The amendment of any rights conferred by each commercial note first issued depends on approval of the holder. None

a Identification of securities b Quantity c Total amount d Issue date Maturity date e Restrictions on trading f Convertibility

Second issuance of commercial papers in a single series 3 Commercial Notes Total Amount of R$27,000,000.00. December 7, 2011 December 1, 2012 The commercial notes were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue Not applicable. The second issue of promissory notes are not convertible into shares issued by the company.

g Possibility of redemption: (i) Possibility of redemption (ii) Assumptions and method of Not applicable. The Company may not redeem the promissory notes in advance. calculating the redemption value h if debt securities, indicate where applicable: Regular maturity on December 1, 2012, when should be paid the value of the principal and the remuneration (interest). Subject to the provisions of the cartouches in Commercial Notes, the holder could declare early maturity of the obligations under the Commercial Paper, and may demand immediate payment of the Nominal Amount plus the remuneration, the occurrence of any of the following events, provided in addition to other cartouches and those provided by law (each event, an "Event of Default"): (i) declaration of acceleration of any other Commercial Paper; (ii) default by the Company of any monetary obligation due under the Commercial Paper; (iii) default by the Company of any non-pecuniary obligation due under the Commercial Paper; (i) maturity date, including (iv) sale, assignment or pledge any form of transfer or promise to transfer to third parties in conditions for acceleration whole or in part, by the Company of any of the Obligations, without the prior consent in writing of the Holder; (v) transformation of the Company into a privately held Company or any other social arrangement; (vi) approval of any corporate reorganization involving the Company, without the prior consent in writing of the Holder; (vii) change in the Company's Control; (viii) Changing the corporate purpose, unless such change does not result in changing the company's main activity; (ix) acceleration of any financial obligation of the Company and/or any Subsidiary of the Company, the value of which, individually or in aggregate, be less than R$ 5,000,000.; (x) default by the Company due to mandatory early redemption of subscription and payment of the Debentures, as provided under "Early Redemption" above, or (xi) the Company does not use the net proceeds of the offering as described under "Use of Proceeds" in the cartouche. The nominal value of the promissory note will not be updated monetarily. (ii) interest Over the nominal value of each note there will be remuneration interest of 100% of

181

accumulated variation of the DI rate plus spread 1.10% per annum from the date of issue until the date of the effective payment of their commercial note. The remuneration shall be paid in full by the due date or the date of any anticipated payment. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment (iii) guarantee and, if in the form of collateral, description of the goods used as collateral (iv) in the absence of a guarantee, if the credit is secured or subordinate v. possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities vi the fiduciary agent, indicating the key terms of the contract Not applicable. The second issue of promissory notes does not have collateral or surety.

The credit of the promossory note is unsecured.

See accelerated maturity conditions described above.

Not applicable.

i
j

conditions for amendment of the rights conferred by such Not applicable. securities
other relevant characteristics The amendment of any rights conferred by each commercial note of second issuance depends on the holders approval.

a Identification of securities b Quantity c Total amount d Issue date Maturity date e Restrictions on trading f Convertibility

Third issuance of commercial papers in a single series 30 Commercial Notes Total Amount of R$30,000,000.00. April 23, 2012 December 3, 2012 The commercial notes were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue Not applicable. The second issue of promissory notes are not convertible into shares issued by the company.

g Possibility of redemption: (i) Possibility of redemption (ii) Assumptions and method of calculating the redemption value h if debt securities, indicate where applicable: (i) maturity date, including conditions for acceleration Regular maturity on December 3, 2012, when should be paid the value of the principal and the remuneration (interest). Subject to the provisions of the cartouches in Commercial Notes, the holder could declare early maturity of the obligations under the Commercial Paper, and may demand immediate Not applicable. The Company may not redeem the promissory notes in advance.

182

payment of the Nominal Amount plus the remuneration, the occurrence of any of the following events, provided in addition to other cartouches and those provided by law (each event, an "Event of Default"): (i) declaration of acceleration of any other Commercial Paper; (ii) default by the Company of any monetary obligation due under the Commercial Paper; (iii) default by the Company of any non-pecuniary obligation due under the Commercial Paper; (iv) sale, assignment or pledge any form of transfer or promise to transfer to third parties in whole or in part, by the Company of any of the Obligations, without the prior consent in writing of the Holder; (v) transformation of the Company into a privately held Company or any other social arrangement; (vi) approval of any corporate reorganization involving the Company, without the prior consent in writing of the Holder; (vii) change in the Company's Control; (viii) Changing the corporate purpose, unless such change does not result in changing the company's main activity; (ix) acceleration of any financial obligation of the Company and/or any Subsidiary of the Company, the value of which, individually or in aggregate, be less than R$ 5,000,000.; (x) default by the Company due to mandatory early redemption of subscription and payment of the Debentures, as provided under "Early Redemption" above, or (xi) the Company does not use the net proceeds of the offering as described under "Use of Proceeds" in the cartouche. The nominal value of the promissory note will not be updated monetarily. Over the nominal value of each note there will be remuneration interest of 100% of accumulated variation of the DI rate plus spread 4.9% per annum from the date of issue until the date of the effective payment of their commercial note. (ii) interest The remuneration shall be paid in full by the due date or the date of any anticipated payment. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment (iii) . guarantee and, if in the form of collateral, description of the goods used as collateral (iv) in the absence of a guarantee, if the credit is secured or subordinate (v) possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities (vi) the fiduciary agent, indicating the key terms of the contract Not applicable. The second issue of promissory notes does not have collateral or surety. The credit of the promossory note is unsecured.

See accelerated maturity conditions described above.

Not applicable.

i
j

conditions for amendment of The amendment of any rights conferred by each note issuance depends on commercial the rights conferred by such second holder approval. securities
other relevant characteristics None

Non-convertible Unsecured Debentures of First issuance of the Company

Securities Identification of securities Issue date Debentures Non-convertible Unsecured Debentures of First issuance single tranche April 18, 2011

183

Maturity date Quantity Total amount Restrictions on trading Description of trading restrictions Convertibility Possibility of redemption

April 18, 2016 27,000 270,000,000.00 yes The debentures were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue Not applicable Not applicable

Assumptions and method of Not applicable calculating the redemption value h. if debt securities, indicate where applicable: Maturity date on April 18, 2016. Payment of the nominal value of each debenture in 3 (three) successive yearly instalments, in the following order: (i) 2 (two) instalments, each corresponding to matured 33.3333% of nominal value (without considering any amortisation) of each of the debentures, being the first installment of this sub-item due in April 18, 2014 and the second installment of this sub-item due in April 18, 2015; and (ii) 1 (one) installment, in the amount of the outstanding amount, due on the maturity date. The obligations may be declared mature in advance, if the terms and conditions set forth in the Deed of Issue are maintained, in the occurrence of any of the events summarized below: I. Default by non-payment of the Nominal Value, of Remuneration, premium, or any other amounts owed to the debenture holders; V. assignment or pledge any form of transfer or promise of transfer to third parties in whole or in part by the Company, any of its obligations under the Deed, without the prior consent in writing of Debenture Holders representing at least 75% of the outstanding; VI. invalidity, unenforceability or invalidity of the deed and / or the Distribution Agreement, is not remedied within 10 days from the date of the respective event; VII. (a) bankruptcy of the Company, and /or any of its subsidiary or controlling Company; (b) voluntary bankruptcy application made by the Company and / or any of its subsidiary or controlling Company; (c) bankruptcy filing by the Company, and /or any of its subsidiary or controlling Company, formulated by others, not elided within legal; (d) petition for judicial or extrajudicial recovery of the Company and /or any of its subsidiary or controlling Company, regardless of approval of the request; or (e) liquidation, dissolution or extinction of the Company, and /or any of its subsidiary or controlling Company, unless the liquidation, dissolution and / or extinction during the course of a corporate transaction which does not constitute an Event of Default; VIII. changing the company into a limited liability company, pursuant to articles 220 to 222 of Law No. 6,404/76;IX. approval of incorporation, merger or split of the company or sale, by the company, of all or substantially all of its assets or its mining properties, with some exceptions: (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; or (b) if the Debenture Holders that wish to do so, be assured that, during the minimum period of six months from the date of publication of the minutes of corporate acts in the transaction, the redemption of the Debentures held by them, by paying the outstanding balance of the Nominal Value, plus Remuneration, calculated pro rata from the Issue Date or the date of payment of compensation immediately preceding, whichever is applicable until the date of actual paymentse; or (c) by the incorporation of the Company (so that the Company is the remaining entity), of any Subsidiary; or (d) if the operation is carried out solely between Subsidiaries; X. capital reduction, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures, pursuant to Article 174, paragraph 3, of Law No. 6,404/76; XI. change or transfer of control (as defined under Article 116 of Law No. 6,404/76), direct or indirect, of the Company, from any Controlling Company and / or any Subsidiary, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures; XV. early maturity of any financial obligation of the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies, and/or occurrence of any event or default of any obligation which, after the expiration of any period provided in their document, or in other cases, within 10 days from the date of their default, give rise to the declaration of acceleration any financial obligation of the Company and / or any Subsidiary, which amount, individual or aggregate, is

Conditio ns for acceleration

184

equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies.

The face value of the debentures of the first issue will not be monetarily updated. Interest paid semi-annually will account for 112.5% of the accumulated variation of the interest rate of CDI. The remuneration provided above shall be paid every six months from the date of issue, being the first payment on October 18, 2011, and the last payment of the maturity date, or on the date of any settlement. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment iii. guarantee and, if in the form of collateral, description of the goods used as collateral iv. in the absence of a guarantee, if the credit is secured or subordinate v. possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities vi the fiduciary agent, indicating the key terms of the contract Not applicable. The first issue of debentures does not have collateral or surety. The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.

ii.

Interest

See terms of acceleration

PENTGONO S.A. DISTRIBUIDORA DE TTULOS E VALORES MOBILIRIOS

185

Remuneration: The performance of duties and tasks assigned to compete in accordance with the law and its deed of issue, the fiduciary agent, or the institution which will replace him in that capacity, he shall receive a remuneration: (i) R$13,000.00 per year, due from the company, being the first instalment of remuneration payable within 30 days from the date of conclusion of the deed of issue, and the other, on the same day of subsequent years; (ii) Additionally, in the event of a close-out netting of obligations of the company under the debentures of the first emission, equivalent to R$500.00 per hour-working man devoted to activities related to the issue and the debentures, to be paid within 5 days from the date of attestation of delivery by the trustee and approval by the company, of the report, concerning hours of activities (a) advice to debenture holders in the process of renegotiation required by the company; (b) attendance at formal meetings with the company eou debentureholders eou general meetings of debenture holders; and (c) implementation of the decisions taken by the debenture holders (iii) brought out yearly since the date of payment of the first annual instalment by the change in the general price index-market, published by Fundao Getlio Vargas, or by any other that eventually is replaced, calculated pro rata temporis, if necessary; (iv) plus the sales tax of any kind TAXES, contributing to the Social Integration Programme PIS, Social contribution on net income CSLL, contributing to the financing of Social Security COFINS and any other taxes that may relate to the remuneration payable to the trustee, except for tax on income and proceeds of Any Nature GOunder existing rates for the dates of each payment; (v) due to maturity, redemption or cancellation of debentures of the first issue, and even after its maturity, redemption or cancellation in the event of actions of the trustee in charge of any defaults on bonds not remedied by the company, in cases where the remuneration payable to the trustee shall be calculated in proportion to the months of operation of the fiduciary agent, based on the value specified in item i, readjusted as the paragraph iii; and (vi) plus, where lives in your payment, regardless of notice, judicial or extrajudicial notification or notification, on the valores arrears, (a) fine 2 moratorium; and (b) interest on arrears of 1 month, calculated pro rata temporis since the date of default until the payment date. Reimbursement of expenses: the Trustee shall be repaid by the company for all reasonable costs incurred that have proven to protect the rights and interests of the debenture holders or to perform their claims within 30 (thirty) days from the delivery of the evidentiary documents accordingly, provided that, where possible, the costs have been approved in advance by the company, which shall be deemed to be approved if the company does not appear within 2 (two) working days from the date of receipt of their request by fiduciary agent. Obligations. The fiduciary agent, as provided for in the deed of issue, will have the functions laid down in the law and in accordance with the rules and regulations of the Securities and Exchange Commission, and use of any action to protect rights or defend interests of the debenture holders. Replacement: In case of absence, temporary impediments, renunciation, intervention, judicial or extrajudicial settlement, bankruptcy, or any other case of vacancy in the fiduciary agent, the following rules shall apply: (i) is provided to debenture holders, after the closing of the offer of the debentures of the first issue, proceed with the replacement of the trustee and the indication of his replacement, general meeting of debenture holders especially convened for this purpose; (ii) if the Trustee is unable to continue to perform their duties by supervening circumstances to the deed of issue, shall immediately communicate the fact to debentureholders, requesting his replacement and convene a general meeting of debenture holders for this purpose; (iii) if the fiduciary agent, renounces functions, should remain in the exercise of their duties until a replacement is indicated by the institution and approved by general meeting of debenture holders, and assume their functions effectively; (iv) shall be performed, within the maximum period of 30 (thirty) days from the date of the event that determine, general meeting of debenture holders, for choosing the new fiduciary agent; (v) replacement, on a permanent basis, the fiduciary agent (a) shall be subject to prior notification to the CVM and its manifestation on the attendance to the requirements provided for in article 9 of CVM Instruction No. 28, November 23, 1983, as amended, and (b) shall be subject to the addition to the deed of issue; payments to the trustee replaced shall be effected in accordance with the proportionality to the period of effective service delivery; (vi) the trustee will be entitled to the same salary replacement perceived by the previous, if (a) the company has not agreed with the new value of the remuneration of the trustee proposed by general meeting of debenture holders, or (b) the general meeting of debenture holders does not act on the matter; (vii) the fiduciary agent should substitute, immediately after his appointment, communicate it to the company and to debentureholders; and (viii) shall apply to cases of substitution of Trustee the norms and precepts from the Securities and Exchange Commission.

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During deliberations of the General Meetings of debenture holders for each of the series, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders representing at least 75% of outstanding Debentures. conditions for amendment of the Not included in the quorum above are: I. quorums expressly provided for in other clauses of the rights conferred by such deed of issue; and II. changes, which should be approved by debenture holders representing securities at least 90% of outstanding Debentures: (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (j) of any Event of Default. other relevant characteristics None

Securities Identification of securities Issue date Maturity date Quantity Total amount Restrictions on trading

Debentures Non-convertible Unsecured Debentures of second issuance first series August 15, 2012 1st series: August 15, 2017. 16,094 R$ 160,900,000.00 Yes The debentures were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment to the placement of 20,000 debentures, and under the best-efforts placement in relation to the remaining debentures. The debentures can only be traded between qualified investors and after a 90 days period from the date of subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and compliance by the Company of its obligations under Article 17 of CVM Instruction 476. Not applicable Not applicable

Description of trading restrictions

Convertibility Possibility of redemption

Assumptions and method of Not applicable calculating the redemption value h. if debt securities, indicate where applicable: Maturity date of the first series on August 15, 2017. Payment of the nominal value of each first series debenture in 2 (two) successive yearly installments, each one corresponding to matured 50% (fifty percent) of nominal value of each of the debentures of the first series, being the first installment due in August 15, 2016 and the second installment on the maturity date of the first series. The obligations may be declared mature in advance, if the terms and conditions set forth in the Deed of Issue. The remuneration of each of the First Series Debentures will be as follows: I. Monetary Adjustment: The nominal value of the debentures of the first issue will not be monetarily updated. II. Compensatory Interests: On the nominal value of each of the First Series Debentures will incur interest corresponding to 100% of the cumulative variation of the DI rate plus surcharge of 0.88% (eighty-eight per cent) per year. Notwithstanding the payments due to early redemption of the First Series Debentures and/or acceleration of the obligations under the Debentures, pursuant to the Deed of Issue, the First Series Compensation will be paid semiannually from the Issue Date, with the first payment on February 15, 2013 and the last, on the maturity date of the First Series.

ns for acceleration

Conditio

ii.

Interest

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iii. guarantee and, if in the form of collateral, description of the goods used as collateral iv. in the absence of a guarantee, if the credit is secured or subordinate v. possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities vi the fiduciary agent, indicating the key terms of the contract

Not applicable. The second issue of debentures does not have collateral or surety. The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.

See terms of acceleration

Identification: Pentgono S.A. Distribuidora de Ttulos e Valores Mobilirios During deliberations of the General Meetings of first series debenture holders, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the first series representing at least 75% of outstanding First Series Debentures.

Not included in the quorum above are: (i) quorums expressly provided for in other clauses of conditions for amendment of the the deed of issue; and (ii) changes, which should be approved by debenture holders of the first rights conferred by such series representing at least 90% of outstanding first series debentures and by debenture securities holders of the second series representing at least 90% of outstanding second series debentures, (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except for changes resulting from extinction, limitation and / or non-disclosure of the DI rate or IPCA, as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (h) the provisions relating to optional early redemption; (i) the provisions relating to early amortization (j) of any Event of Default. other relevant characteristics See item 18.10 of this Referecence Form

Securities Identification of securities Issue date Maturity date Quantity Total amount Restrictions on trading

Debentures Non-convertible Unsecured Debentures of second issuance second series August 15, 2012 2nd series: August 15, 2020. 10,906 R$ 109,100,000.00 Yes The debentures were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment to the placement of 20,000 debentures, and under the best-efforts placement in relation to the remaining debentures. The debentures can only be traded between qualified investors and after a 90 days period from the date of subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and compliance by the Company of its obligations under Article 17 of CVM Instruction 476. Not applicable Not applicable

Description of trading restrictions

Convertibility Possibility of redemption

Assumptions and method of Not applicable calculating the redemption value h. if debt securities, indicate where applicable:

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Maturity date of the second series on August 15, 2020. Payment of the nominal value of each second series debenture in 3 successive yearly installments, in the following order: (a) 2 installments, each corresponding to matured 33.33% of nominal value of each of the debentures of the second series monetarily adjusted, due to August 15, 2018 and August 15, 2019; and (b) 1 installment, in the amount of the outstanding amount of nominal value of each of the debentures of the second series monetarily adjusted, due to the maturity date of second series debenture. The obligations may be declared mature in advance, if the terms and conditions set forth in the Deed of Issue. The remuneration of each of the Second Series Debentures will be as follows: I. Monetary Adjustment: The nomeinal of each Second Series Debentures will be adjusted by the National Index of Consumer Prices Broad, released by the Brazilian Institute of Geography and Statistics ("IPCA"), since the Issue Date until the date of actual payment, being the update incorporated into the Nominal value of each Second Series Debentures automatically ("Second Series Monetary Adjustment"). Notwithstanding the payments due to early redemption of the Debentures and/or acceleration of the obligations under the Debentures, pursuant to the Deed of Issue, the Second Series Monetary Adjustment will be paid on the same dates and the same amount of amortization of nominal value of each Second Series Debentures, as provided in the Deed of Issue. II. Compensatory Interests: On the outstanding amount of the nominal value of each Second Series Debentures, updated by the Second Series Monetary Adjustment, will incur interest corresponding to 5.50% per year, on a 252 (two hundred and fifty-two) working days base. Notwithstanding the payments due to early redemption of the Debentures and/or acceleration of the obligations under the Debentures, pursuant to the Deed of Issue, the Second Series Compensation will be paid annually from the Issue Date, with the first payment on August 15, 2013 and the last, on the maturity date of the Second Series. iii. guarantee and, if in the form of collateral, description of the goods used as collateral iv. in the absence of a guarantee, if the credit is secured or subordinate v. possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities vi the fiduciary agent, indicating the key terms of the contract Not applicable. The second issue of debentures does not have collateral or surety. The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.

ns for acceleration

Conditio

ii.

Interest

See terms of acceleration

Identification: Pentgono S.A. Distribuidora de Ttulos e Valores Mobilirios During deliberations of the General Meetings of second series debenture holders, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, all deliberations to be taken in the General Meeting of second series debenture holders will depend on approval of second series debenture holders representing at least 75% of outstanding second series Debentures.

Not included in the quorum above are: (i) quorums expressly provided in other clauses of the conditions for amendment of the deed of issue; and (ii) changes, which should be approved by debenture holders of the first rights conferred by such series representing at least 90% of outstanding first series debentures and by second series securities debenture holders representing at least 90% of outstanding second series debentures, (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except for changes resulting from extinction, limitation and / or nondisclosure of the DI rate or IPCA, as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (h) the provisions relating to optional early redemption; (i) the provisions relating to early amortization (j) of any Event of Default. other relevant characteristics See item 18.10 of this Referecence Form

189

18.6 Description of the Brazilian markets where the company's securities are admitted for trading

Shares
The Companys common shares are traded at the BM&FBOVESPA.

Commercial Paper
The Companys first, second and third issuance of commercial paper, described in table 18.5 of this Reference Form, were registered for trading in the secondary market, through CETIP21 - Ttulos e Valores Mobilirios, managed and operated by CETIP, trading being settled through CETIP and electronical custody of the commercial paper by CETIP. The first issue of commercial papers were already fully redeemed on April 28, 2011.

Debentures
The debentures issued by the Company, first and second issuance, described at table 18.5 of this Reference Form, were registered for trading in the seconday market and electronic custody SND Mdulo Nacional de Debntures, managed and operated by CETIP. 18.7 Description of the securities admitted to trading in foreign markets

Not applicable, as the Company does not have securities admitted to trading in foreign markets. 18.8 Description of the public offerings made by the Company or by third parties, including controlling companies and subsidiaries, relating to the Companys securities

Primary and Secundary Offering of share distribution

The Company, in conjunction with some shareholders, carried out a public offering of primary distribution of 37,037,037 shares of common stock issued by the Company and secondary of 14,814,815 shares of common stock held by the selling shareholders. The shares subject matter of the Offering started to be traded on the segment called Novo Mercado of BM&FBOVESPA on April 16, 2010. On May 14, 2010, the lead manager of the said public offering exercised in full the option of supplementary placement of 7,777,777 shares of common stock owned by some of the selling shareholders. The shares subject matter of the said supplementary batch started to be traded in the segment called Novo Mercado of BM&FBOVESPA on May 19, 2010. There was no capital increase of the Company due to the exercise of the option of supplementary shares.

Public offerings of distribution of commercial promissary notes and debentures, with restricted placement efforts
Promissory notes of first, second and third issue and the debentures of the first issue were subject of public offerings, with restricted efforts of placement, in accordance with CVM Instruction No. 476, of January 16, 2009, intended exclusively for qualified investors. The promissory notes of first issuance were settled on April 28, 2011. All relevant characteristics of these securities are described in section 18.5 of this Reference Form. 18.9 Description of takeover bids made by Company for shares issued by third parties

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Not applicable, as the Company did not make takeover bids for shares issued by third parties. 18.10 Other information which the Company deems relevant
a Identification of securities b Quantity c Total amount d Issue date Deadline e Restrictions on trading f Convertibility

first issue of commercial papers in a single series already fully redeemed. 30 commercial papers R$30,000,000.00 March 29, 2011 June 27, 2011 The Commercial Papers were the object of a public distribution offer with restricted placement efforts, targeted at qualified investors, as defined in Article 4 of CVM Rule 476, on a firm guarantee basis. Not applicable. The first issue of promissory notes are not convertible into shares issued by the company.

g Possibility of redemption: Each commercial note of first issue was subject to early repayment, in whole, at any time from the date of issue, at the discretion of the company, provided that its holder is notified within 5 (five) working days in advance of the date set for the rescue. Additionally, the (i) hypotheses of redemption Company was obliged to redeem all the notes in advance of the first issue on the date of subscription of the debentures of the first issue, described below. Therefore, all commercial notes of first issue were fully redeemed on April 28, and are no longer in circulation. The amount to be paid by the Company to the holder of each commercial note first issued (ii) Assumptions and method of corresponded to their nominal value plus the remuneration, calculated pro rata temporis calculating the redemption value since the date of issue until the date of effective payment, but without payment of prize or penalty. h if debt securities, indicate where applicable: Maturing on June 27, 2011. The notes were redeemed when the Company issued debentures, on April 28, 2011. Subject to the provisions of the cartouches in Commercial Notes, the holder could declare early maturity of the obligations under the Commercial Paper, and may demand immediate payment of the Nominal Amount plus the remuneration, the occurrence of any of the following events, provided in addition to other cartouches and those provided by law (each event, an "Event of Default"): (i) declaration of acceleration of any other Commercial Paper; (ii) default by the Company of any monetary obligation due under the Commercial Paper; (iii) default by the Company of any non-pecuniary obligation due under the Commercial Paper; (iv) sale, assignment or pledge any form of transfer or promise to transfer to third parties in whole or in part, by the Company of any of the Obligations, without the prior consent in writing of the Holder; (v) transformation of the Company into a privately held Company or any other social arrangement; (vi) approval of any corporate reorganization involving the Company, without the prior consent in writing of the Holder; (vii) change in the Company's Control; (viii) Changing the corporate purpose, unless such change does not result in changing the company's main activity; (ix) acceleration of any financial obligation of the Company and/or any Subsidiary of the Company, the value of which, individually or in aggregate, be less than R$ 5,000,000.; (x) default by the Company due to mandatory early redemption of subscription and payment of the Debentures, as provided under "Early Redemption" above, or (xi) the Company does not use the net proceeds of the offering as described under "Use of Proceeds" in the cartouche. The nominal value of each commercial note of first issue was not subject to monetary correction. On the nominal value of each note were added remuneration interest focused corresponding to the variation of accumulated 105% (one hundred and five per cent) of the DI rate (Remuneration), from the date of issue until the date of the effective payment of their commercial note, and followed the criteria for calculating the Trade Notes formulas and Obligations CETIP21, which is available on the Web (www.cetip.com.br). The remuneration was paid in full on the date of early redemption, subject to the terms and

(i) maturity date, including conditions for acceleration

(ii) interest

191

conditions provided for in each commercial note first issued. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment . (iii) guarantee and, if in the form of collateral, description of the goods used as collateral (iv.) in the absence of a guarantee, if the credit is secured or subordinate (v) possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities (vi) the fiduciary agent, indicating the key terms of the contract conditions for amendment of the rights conferred by such securities other relevant characteristics Not applicable

The credit represented by each commercial note of first issued were unsecured.

See terms of acceleration described above

Not applicable The amendment of any rights conferred by each commercial note first issued depends on approval of the holder. None

i j

a Identification of securities b Quantity c Total amount d Issue date Maturity date e Restrictions on trading f Convertibility

Second issuance of commercial papers in a single series 3 Commercial Notes Total Amount of R$27,000,000.00. December 7, 2011 December 1, 2012 The commercial notes were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue Not applicable. The second issue of promissory notes are not convertible into shares issued by the company.

g Possibility of redemption: (i) Possibility of redemption (ii) Assumptions and method of Not applicable. The Company may not redeem the promissory notes in advance. calculating the redemption value h if debt securities, indicate where applicable: Regular maturity on December 1, 2012, when should be paid the value of the principal and the remuneration (interest). Subject to the provisions of the cartouches in Commercial Notes, the holder could declare (i) maturity date, including early maturity of the obligations under the Commercial Paper, and may demand immediate conditions for acceleration payment of the Nominal Amount plus the remuneration, the occurrence of any of the following events, provided in addition to other cartouches and those provided by law (each event, an "Event of Default"): (i) declaration of acceleration of any other Commercial Paper; (ii) default by the Company of any monetary obligation due under the Commercial Paper; (iii) default by the Company of any non-pecuniary obligation due under the Commercial Paper;

192

(iv) sale, assignment or pledge any form of transfer or promise to transfer to third parties in whole or in part, by the Company of any of the Obligations, without the prior consent in writing of the Holder; (v) transformation of the Company into a privately held Company or any other social arrangement; (vi) approval of any corporate reorganization involving the Company, without the prior consent in writing of the Holder; (vii) change in the Company's Control; (viii) Changing the corporate purpose, unless such change does not result in changing the company's main activity; (ix) acceleration of any financial obligation of the Company and/or any Subsidiary of the Company, the value of which, individually or in aggregate, be less than R$ 5,000,000.; (x) default by the Company due to mandatory early redemption of subscription and payment of the Debentures, as provided under "Early Redemption" above, or (xi) the Company does not use the net proceeds of the offering as described under "Use of Proceeds" in the cartouche. The nominal value of the promissory note will not be updated monetarily. Over the nominal value of each note there will be remuneration interest of 100% of accumulated variation of the DI rate plus spread 1.10% per annum from the date of issue until the date of the effective payment of their commercial note. (ii) interest The remuneration shall be paid in full by the due date or the date of any anticipated payment. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment (iii) guarantee and, if in the form of collateral, description of the goods used as collateral (iv) in the absence of a guarantee, if the credit is secured or subordinate v. possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities vi the fiduciary agent, indicating the key terms of the contract Not applicable. The second issue of promissory notes does not have collateral or surety.

The credit of the promossory note is unsecured.

See accelerated maturity conditions described above.

Not applicable.

i
j

conditions for amendment of the rights conferred by such Not applicable. securities
other relevant characteristics The amendment of any rights conferred by each commercial note of second issuance depends on the holders approval.

a Identification of securities b Quantity c Total amount d Issue date Maturity date e Restrictions on trading

Third issuance of commercial papers in a single series 30 Commercial Notes Total Amount of R$30,000,000.00. April 23, 2012 December 3, 2012 The commercial notes were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue

193

Convertibility

Not applicable. The second issue of promissory notes are not convertible into shares issued by the company.

g Possibility of redemption: (i) Possibility of redemption (ii) Assumptions and method of calculating the redemption value h if debt securities, indicate where applicable: Regular maturity on December 3, 2012, when should be paid the value of the principal and the remuneration (interest). Subject to the provisions of the cartouches in Commercial Notes, the holder could declare early maturity of the obligations under the Commercial Paper, and may demand immediate payment of the Nominal Amount plus the remuneration, the occurrence of any of the following events, provided in addition to other cartouches and those provided by law (each event, an "Event of Default"): (i) declaration of acceleration of any other Commercial Paper; (ii) default by the Company of any monetary obligation due under the Commercial Paper; (iii) default by the Company of any non-pecuniary obligation due under the Commercial (i) maturity date, including Paper; (iv) sale, assignment or pledge any form of transfer or promise to transfer to third conditions for acceleration parties in whole or in part, by the Company of any of the Obligations, without the prior consent in writing of the Holder; (v) transformation of the Company into a privately held Company or any other social arrangement; (vi) approval of any corporate reorganization involving the Company, without the prior consent in writing of the Holder; (vii) change in the Company's Control; (viii) Changing the corporate purpose, unless such change does not result in changing the company's main activity; (ix) acceleration of any financial obligation of the Company and/or any Subsidiary of the Company, the value of which, individually or in aggregate, be less than R$ 5,000,000.; (x) default by the Company due to mandatory early redemption of subscription and payment of the Debentures, as provided under "Early Redemption" above, or (xi) the Company does not use the net proceeds of the offering as described under "Use of Proceeds" in the cartouche. The nominal value of the promissory note will not be updated monetarily. Over the nominal value of each note there will be remuneration interest of 100% of accumulated variation of the DI rate plus spread 4.9% per annum from the date of issue until the date of the effective payment of their commercial note. (ii) interest The remuneration shall be paid in full by the due date or the date of any anticipated payment. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment (iii) . guarantee and, if in the form of collateral, description of the goods used as collateral (iv) in the absence of a guarantee, if the credit is secured or subordinate (v) possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities (vi) the fiduciary agent, indicating the key terms of the contract Not applicable. The second issue of promissory notes does not have collateral or surety. The credit of the promossory note is unsecured. Not applicable. The Company may not redeem the promissory notes in advance.

See accelerated maturity conditions described above.

Not applicable.

194

i
j

conditions for amendment of The amendment of any rights conferred by each note issuance depends on commercial the rights conferred by such second holder approval. securities
other relevant characteristics None

Non-convertible Unsecured Debentures of First issuance of the Company

Securities Identification of securities Issue date Maturity date Quantity Total amount Restrictions on trading Description of trading restrictions Convertibility Possibility of redemption Debentures Non-convertible Unsecured Debentures of First issuance single tranche April 18, 2011 April 18, 2016 27,000 270,000,000.00 yes The debentures were the subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment and, consequently, can only be traded between qualified investors. The trading restriction period laid down in article 13 of that 90 days after the statement expired date of issue Not applicable Not applicable

Assumptions and method of Not applicable calculating the redemption value h. if debt securities, indicate where applicable: Maturity date on April 18, 2016. Payment of the nominal value of each debenture in 3 (three) successive yearly instalments, in the following order: (i) 2 (two) instalments, each corresponding to matured 33.3333% of nominal value (without considering any amortisation) of each of the debentures, being the first installment of this sub-item due in April 18, 2014 and the second installment of this sub-item due in April 18, 2015; and (ii) 1 (one) installment, in the amount of the outstanding amount, due on the maturity date. The obligations may be declared mature in advance, if the terms and conditions set forth in the Deed of Issue are maintained, in the occurrence of any of the events summarized below: I. Default by non-payment of the Nominal Value, of Remuneration, premium, or any other amounts owed to the debenture holders; V. assignment or pledge any form of transfer or promise of transfer to third parties in whole or in part by the Company, any of its obligations under the Deed, without the prior consent in writing of Debenture Holders representing at least 75% of the outstanding; VI. invalidity, unenforceability or invalidity of the deed and / or the Distribution Agreement, is not remedied within 10 days from the date of the respective event; VII. (a) bankruptcy of the Company, and /or any of its subsidiary or controlling Company; (b) voluntary bankruptcy application made by the Company and / or any of its subsidiary or controlling Company; (c) bankruptcy filing by the Company, and /or any of its subsidiary or controlling Company, formulated by others, not elided within legal; (d) petition for judicial or extrajudicial recovery of the Company and /or any of its subsidiary or controlling Company, regardless of approval of the request; or (e) liquidation, dissolution or extinction of the Company, and /or any of its subsidiary or controlling Company, unless the liquidation, dissolution and / or extinction during the course of a corporate transaction which does not constitute an Event of Default; VIII. changing the company into a limited liability company, pursuant to articles 220 to 222 of Law No. 6,404/76;IX. approval of incorporation, merger or split of the company or sale, by the company, of all or substantially all of its assets or its mining properties, with some exceptions: (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; or (b) if the Debenture Holders that wish to do so, be assured that, during the minimum period of six months from the date of publication of the minutes of corporate acts in the transaction, the redemption of the Debentures held by them, by paying the outstanding balance of the Nominal Value, plus Remuneration, calculated pro rata from the Issue Date or the date of payment of

ns for acceleration

Conditio

195

compensation immediately preceding, whichever is applicable until the date of actual paymentse; or (c) by the incorporation of the Company (so that the Company is the remaining entity), of any Subsidiary; or (d) if the operation is carried out solely between Subsidiaries; X. capital reduction, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures, pursuant to Article 174, paragraph 3, of Law No. 6,404/76; XI. change or transfer of control (as defined under Article 116 of Law No. 6,404/76), direct or indirect, of the Company, from any Controlling Company and / or any Subsidiary, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures; XV. early maturity of any financial obligation of the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies, and/or occurrence of any event or default of any obligation which, after the expiration of any period provided in their document, or in other cases, within 10 days from the date of their default, give rise to the declaration of acceleration any financial obligation of the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies.

The face value of the debentures of the first issue will not be monetarily updated. Interest paid semi-annually will account for 112.5% of the accumulated variation of the interest rate of CDI. The remuneration provided above shall be paid every six months from the date of issue, being the first payment on October 18, 2011, and the last payment of the maturity date, or on the date of any settlement. In case of payment after the deadline of any amount due in respect of any obligation under the Commercial Papers, on any and all amounts in arrears would address, without notice, notification or judicial or extrajudicial, and subject to the Remuneration, calculated pro rata from the date of default to the date of actual payment, (i) fines of 2% (two percent), and (ii) interest of 1% (one percent) per month or fraction of a month, calculated pro rata from the date of default until the date of actual payment iii. guarantee and, if in the form of collateral, description of the goods used as collateral iv. in the absence of a guarantee, if the credit is secured or subordinate v. possible restrictions imposed on the issuer the dividend distribution the sale of certain assets the possibility of new debt the issue of new securities vi the fiduciary agent, indicating the key terms of the contract Not applicable. The first issue of debentures does not have collateral or surety. The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. 6,404/76.

ii.

Interest

See terms of acceleration

PENTGONO S.A. DISTRIBUIDORA DE TTULOS E VALORES MOBILIRIOS

196

Remuneration: The performance of duties and tasks assigned to compete in accordance with the law and its deed of issue, the fiduciary agent, or the institution which will replace him in that capacity, he shall receive a remuneration: (i) R$13,000.00 per year, due from the company, being the first instalment of remuneration payable within 30 days from the date of conclusion of the deed of issue, and the other, on the same day of subsequent years; (ii) Additionally, in the event of a close-out netting of obligations of the company under the debentures of the first emission, equivalent to R$500.00 per hour-working man devoted to activities related to the issue and the debentures, to be paid within 5 days from the date of attestation of delivery by the trustee and approval by the company, of the report, concerning hours of activities (a) advice to debenture holders in the process of renegotiation required by the company; (b) attendance at formal meetings with the company eou debentureholders eou general meetings of debenture holders; and (c) implementation of the decisions taken by the debenture holders (iii) brought out yearly since the date of payment of the first annual instalment by the change in the general price index-market, published by Fundao Getlio Vargas, or by any other that eventually is replaced, calculated pro rata temporis, if necessary; (iv) plus the sales tax of any kind TAXES, contributing to the Social Integration Programme PIS, Social contribution on net income CSLL, contributing to the financing of Social Security COFINS and any other taxes that may relate to the remuneration payable to the trustee, except for tax on income and proceeds of Any Nature GOunder existing rates for the dates of each payment; (v) due to maturity, redemption or cancellation of debentures of the first issue, and even after its maturity, redemption or cancellation in the event of actions of the trustee in charge of any defaults on bonds not remedied by the company, in cases where the remuneration payable to the trustee shall be calculated in proportion to the months of operation of the fiduciary agent, based on the value specified in item i, readjusted as the paragraph iii; and (vi) plus, where lives in your payment, regardless of notice, judicial or extrajudicial notification or notification, on the valores arrears, (a) fine 2 moratorium; and (b) interest on arrears of 1 month, calculated pro rata temporis since the date of default until the payment date. Reimbursement of expenses: the Trustee shall be repaid by the company for all reasonable costs incurred that have proven to protect the rights and interests of the debenture holders or to perform their claims within 30 (thirty) days from the delivery of the evidentiary documents accordingly, provided that, where possible, the costs have been approved in advance by the company, which shall be deemed to be approved if the company does not appear within 2 (two) working days from the date of receipt of their request by fiduciary agent. Obligations. The fiduciary agent, as provided for in the deed of issue, will have the functions laid down in the law and in accordance with the rules and regulations of the Securities and Exchange Commission, and use of any action to protect rights or defend interests of the debenture holders. Replacement: In case of absence, temporary impediments, renunciation, intervention, judicial or extrajudicial settlement, bankruptcy, or any other case of vacancy in the fiduciary agent, the following rules shall apply: (i) is provided to debenture holders, after the closing of the offer of the debentures of the first issue, proceed with the replacement of the trustee and the indication of his replacement, general meeting of debenture holders especially convened for this purpose; (ii) if the Trustee is unable to continue to perform their duties by supervening circumstances to the deed of issue, shall immediately communicate the fact to debentureholders, requesting his replacement and convene a general meeting of debenture holders for this purpose; (iii) if the fiduciary agent, renounces functions, should remain in the exercise of their duties until a replacement is indicated by the institution and approved by general meeting of debenture holders, and assume their functions effectively; (iv) shall be performed, within the maximum period of 30 (thirty) days from the date of the event that determine, general meeting of debenture holders, for choosing the new fiduciary agent; (v) replacement, on a permanent basis, the fiduciary agent (a) shall be subject to prior notification to the CVM and its manifestation on the attendance to the requirements provided for in article 9 of CVM Instruction No. 28, November 23, 1983, as amended, and (b) shall be subject to the addition to the deed of issue; payments to the trustee replaced shall be effected in accordance with the proportionality to the period of effective service delivery; (vi) the trustee will be entitled to the same salary replacement perceived by the previous, if (a) the company has not agreed with the new value of the remuneration of the trustee proposed by general meeting of debenture holders, or (b) the general meeting of debenture holders does not act on the matter; (vii) the fiduciary agent should substitute, immediately after his appointment, communicate it to the company and to debentureholders; and (viii) shall apply to cases of substitution of Trustee the norms and precepts from the Securities and Exchange Commission.

197

During deliberations of the General Meetings of debenture holders for each of the series, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders representing at least 75% of outstanding Debentures. conditions for amendment of the Not included in the quorum above are: I. quorums expressly provided for in other clauses of the rights conferred by such deed of issue; and II. changes, which should be approved by debenture holders representing securities at least 90% of outstanding Debentures: (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (j) of any Event of Default. other relevant characteristics None

Non-convertible Unsecured Debentures of Second issuance of the Company

Securities Identification of securities Issue date Debentures Non-convertible Unsecured Debentures of second issuance double series August 15, 2012 1st series: August 15, 2017. 2nd series: August 15, 2020. 27,000 R$ 270,000,000.00 yes The debentures were subject of public distribution with restricted placement efforts, pursuant to CVM Instruction 476, under the firm commitment to the placement of 20,000 debentures, and under the best-efforts placement in relation to the remaining debentures. The debentures can only be traded between qualified investors and after a 90 days period from the date of subscription or purchase according to the articles 13 and 15 of CVM Instruction 476, and compliance by the Company of its obligations under Article 17 of CVM Instruction 476. Not applicable Not applicable

Maturity date

Quantity Total amount Restrictions on trading

Description of trading restrictions

Convertibility Possibility of redemption

Assumptions and method of Not applicable calculating the redemption value h. if debt securities, indicate where applicable: Maturity date of the first series on August 15, 2017. Payment of the nominal value of each first series debenture in 2 (two) successive yearly installments, each one corresponding to matured 50% (fifty percent) of nominal value of each of the debentures of the first series, being the first installment due in August 15, 2016 and the second installment on the maturity date of the first series. Conditio The obligations may be declared mature in advance, if the terms and conditions set forth in the Deed of Issue. Maturity date of the second series on August 15, 2020. Payment of the nominal value of each second series debenture in 3 successive yearly installments, in the following order: (a) 2 installments, each corresponding to matured 33.33% of nominal value of each of the debentures of the second series monetarily adjusted, due to August 15, 2018 and August 15, 2019; and (b) 1 installment, in the amount of the outstanding amount of nominal value of each of the debentures of the second series monetarily adjusted, due to the maturity date of second series debenture.

ns for acceleration

198

The obligations may be declared mature in advance, on the terms and conditions set forth in the Deed of Issue, in the occurrence of any of the events summarized below: I. Default by the Company of any financial obligation on the Debentures, due under the Deed of Issue, at the date of payment provided for in the Deed of Issue; II. Default by the Company of any nonfinancial obligation on the Debentures foreseen in the Deed of Issue (a) that is not properly solved within specific remedy; or (b) not having specific term remediation, if it is not properly solved within 15 days from the date of such default, being the period provided in this subsection does not apply to obligations to which it has a deadline stipulated or specific cure for which the period of cure has been expressly excluded; III. judicial questioning by the Company for any controlling company, directly or indirectly (controlling as defined in article 116 of the Corporate Law) of the Company (Controlling), and / or controlled company (controlled as defined in article 116 of the Corporate Law) by the Company (Controlled), of the Issue of Deed; IV. judicial questioning by any person not mentioned in section III above, the Issue of Deed, suspended or not remedied within 15 days from the date on which the Company becomes aware of the judging of such legal challenge; V. assignment or pledge any form of transfer or promise of transfer to third parties in whole or in part by the Company, any of its obligations under the Deed, without the prior consent in writing of Debenture Holders representing at least 75% of the outstanding; VI. invalidity, unenforceability or invalidity of the Deed and/or the Distribution Agreement, is not remedied within 15 days from the date of the respective event; VII. (a) bankruptcy of the Company, and/or any of its subsidiary or controlling Company; (b) voluntary bankruptcy application made by the Company and / or any of its subsidiary or controlling Company; (c) bankruptcy filing by the Company, and/or any of its subsidiary or controlling Company, formulated by others, not suppressed within the legal deadline; (d) petition for judicial or extrajudicial recovery of the Company and /or any of its subsidiary or controlling Company, regardless of approval of the request; or (e) liquidation, dissolution or extinction of the Company, and/or any of its subsidiary or controlling Company, unless the liquidation, dissolution and/or extinction during the course of a corporate transaction which does not constitute an Event of Default, pursuant to section IX below; VIII. changing the company into a limited liability company, pursuant to articles 220 to 222 of Law No. 6,404/76; IX. approval of incorporation, merger or split of the company or sale, by the company, of all or substantially all of its assets or its mining properties, with some exceptions: (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; or (b) if the Debenture Holders that wish to do so, be assured that, during the minimum period of 6 months from the date of publication of the minutes of corporate acts in the transaction, the redemption of the Debentures held by them, by paying the outstanding balance of the Nominal Value, plus Remuneration, calculated pro rata from the Issue Date or the date of payment of compensation immediately preceding, whichever is applicable until the date of actual payments; or (c) by the incorporation of the Company (so that the Company is the remaining entity), of any Subsidiary; or (d) if the operation is carried out solely between Subsidiaries; X. capital reduction, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures, pursuant to Article 174, paragraph 3, of Law No. 6,404/76; XI. change or transfer of control (as defined under Article 116 of Law No. 6,404/76), direct or indirect, of the Company, from any Controlling Company and / or any Subsidiary, except if previously approved by Debenture Holders representing at least 75% of the outstanding Debentures; XII. amendment of the Company's purposes and / or any Subsidiary, as provided in its bylaws or social contract as applicable, in effect on the Issue Date, unless such amendment: (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; (b) does not lead to a change in the principal activity of the Company or its Subsidiary; XIII. non-renewal, cancellation, revocation or suspension of licenses and permits, including environmental, required by the competent bodies to carry out regular activities of the Company, since its effects have not solved or suspended within 15 days from the date of its non-renewal, cancellation, revocation or suspension respective (s) permit (s) or license (s); XIV. occurrence of any event that causes (a) in relation to the Company, (i) any material adverse effect on the condition (financial or of any nature), business, property, results of operations and/or prospects; (ii) any adverse effect on the powers or legal capacity and/or economic-financial to fulfill any of the obligations under the Deed of Issue, and/or (iii) any event or condition that, after the deadline, formal notice, or both, may result in a Default event, or (b) with respect to Deed of Issue, any adverse effect on (i) the proper execution, legality, validity and / or enforceability of the obligations documents, and / or (ii) the rights contained in the Debenture Deed of Issue, since it has not solved its effects or suspended within 15 days from the date of knowledge of event the Company ("Material Adverse Effect"); XV. non maintenance by the Company and/or any Subsidiary, insurance, as the current best practices in the market segment of the Company with respect to its material operating assets, not solved within 15 days from whatever happens first: (a) the date on which the Company becomes aware of the event, and promptly notifies the Fiduciary Agent or (b) the date on which the Company receives written notice from the

199

Fiduciary Agent; XVI. early maturity of any financial obligation of the Company and/or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, and / or the occurrence of any event or default of any obligation which, after the expiration of any cure period provided for in the respective document, may give rise, immediately the declaration of acceleration of any financial obligation of the Company and/or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies XVII. securities protest against the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00(ten million reais), annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, unless, within 10 (ten) days from the date of their protest has been proven that (a) the protest has been made in error or bad faith of the third and was taken to the appropriate judicial order restraining or cancellation of their effects; b) the protest was canceled, or (c) the value (s) of title (s) protested (s) was deposited in court; XVIII. default by the Company and / or any subsidiary of any decision or final court judgment or any judgment or arbitral award not subject to appeal against the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, not paid within the stipulated payment for their decision or judgment XIX. attachment or sequestration of assets of the Company and / or any Subsidiary, which amount, individual or aggregate, is equal to or greater than R$ 10,000,000.00, annually updated, from the Issue Date, by the positive variation of the IPCA, or its equivalent in other currencies, unless, within ten days from the date of their arrest or abduction, has been proven that the arrest or abduction was challenged or replaced by other security; XX. expropriation, confiscation or any other measure of any governmental entity in any jurisdiction that results in loss by the Company and / or any Subsidiary of the property and / or the direct or indirect ownership of a substantial portion of its assets; XXI. sale, assignment, or alienation in any form or constitution of mortgage, pledge, lien, Fiduciary assignment agreement, usufruct, trust, promise to sell, purchase option, right of first refusal, charge, encumbrance or onus, judicial or extrajudicial, voluntary or involuntary, or any other action which has the practical effect similar to any of the above expressions ("Onus"), whether in a single transaction or a series of transactions, related or not, on assets of the Company and/or any subsidiary amounting more than 15% of the total assets of the Company, based on the latest Company's Consolidated Financial Statements (as defined in Section 7.1 of Deed of Issue), unless (a) if the transaction has been approved in advance by the Debenture Holders representing at least 75% of the outstanding Debentures; or (b) the establishment of liens on any asset acquired by the Company or any Subsidiary, provided that the lien consists exclusively on assets acquired and to finance the acquisition of such asset; XXII. verifying that any of the statements made by the Company in the Issue Deed and / or the Underwriting Agreement is false, inconsistent, inaccurate, incomplete, insufficient or incorrect in any material respect, not cured within ten (10) days from the earlier of (a) the date upon which the Company is aware of the incorrectness or (b) the date upon which the Company receives written notice from the Fiduciary Agent; XXIII. non-use by the Company, the net resources obtained of the Issue strictly in terms the Deed of Issue; XXIV. distribution and/or payment by the Company of dividends, interest on capital or other distributions of profits to shareholders, if the Company is in default of any of its obligations under the Issuance Deed, except for the payment of dividend must not exceed 25% of net income under Article 202 of the Corporations Act, except for the payment of the mandatory dividend of no more than 25% of net income under Article 202 of the Law No. 6,404/76, and XXV. non-compliance by the Company of any financial ratios below ("ndices Financeiros"), to be determined by the Company under the Deed of Issue and verified by the Fiduciary agent within 10 days from the date of receipt by the Fiduciary agent, the information referred to the Deed of Issue based on the Consolidated Financial Statements of the Company for each quarter of the calendar year, from and including the Consolidated Financial Statements of the Company on December 31, 2012: (a) the financial index due to the quotient of dividing Net Debt (as defined in the Issue Deed) to EBITDA (as defined in the Issue Deed), which must be less than or equal to 3 and (b) the financial index due to the quotient of dividing EBITDA by Net Financial Expenses (as defined in the Issue Deed), which should be equal or higher than 2. The remuneration of each of the First Series Debentures will be as follows: I. Monetary Adjustment: The nominal value of the debentures of the first issue will not be monetarily updated. II. Compensatory Interests: On the nominal value of each of the First Series Debentures will incur interest corresponding to 100% of the cumulative variation of the DI rate plus surcharge of 0.88% (eighty-eight per cent) per year.

ii.

Interest

200

Notwithstanding the payments due to early redemption of the First Series Debentures and/or acceleration of the obligations under the Debentures, pursuant to the Deed of Issue, the First Series Compensation will be paid semiannually from the Issue Date, with the first payment on February 15, 2013 and the last, on the maturity date of the First Series. The remuneration of each of the Second Series Debentures will be as follows: I. Monetary Adjustment: The nomeinal of each Second Series Debentures will be adjusted by the National Index of Consumer Prices Broad, released by the Brazilian Institute of Geography and Statistics ("IPCA"), since the Issue Date until the date of actual payment, being the update incorporated into the Nominal value of each Second Series Debentures automatically ("Second Series Monetary Adjustment"). Notwithstanding the payments due to early redemption of the Debentures and/or acceleration of the obligations under the Debentures, pursuant to the Deed of Issue, the Second Series Monetary Adjustment will be paid on the same dates and the same amount of amortization of nominal value of each Second Series Debentures, as provided in the Deed of Issue. iii. guarantee and, if in the form of collateral, description of Not applicable. The first issue of debentures does not have collateral or surety. the goods used as collateral iv. in the absence of a The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. guarantee, if the credit is secured 6,404/76. or subordinate v. possible restrictions imposed on the issuer the dividend distribution the sale of certain See terms of acceleration assets the possibility of new debt the issue of new securities PENTGONO S.A. DISTRIBUIDORA DE TTULOS E VALORES MOBILIRIOS Compensation: The performance of duties and tasks assigned to compete in accordance with the law and its deed of issue, the fiduciary agent, or the institution which will replace him in that capacity, shall receive a remuneration: (i) R$3,500.00 per year, due from the company, being the first installment of remuneration payable on the fifth business day following the date of celebration of the deed of issue, and the remaining, on the same day of subsequent years, until the maturity of the issue, or as long as the fiduciary agent is representing the debentures holders interests;(ii) monetary adjustment yearly from the date of payment of the first annual instalment by the change in the general price index-market, published by Fundao Getlio Vargas, or by any other that eventually is replaced, calculated pro rata temporis, if necessary; (iii) plus the sales tax of any kind TAXES, contributing to the Social Integration Programme PIS, Social contribution on net income CSLL, contributing to the financing of Social Security COFINS and any other taxes that may relate to the remuneration payable to the trustee, except for tax on income and proceeds of Any Nature go under existing rates for the dates of each payment; (iv) due to maturity, redemption or cancellation of debentures, and even after its vi the fiduciary agent, indicating maturity, redemption or cancellation in the event of actions of the trustee in charge of any the key terms of the contract defaults on debentures not remedied by the Company, in cases where the remuneration payable to the fiduciary agent shall be calculated in proportion to the months of operation of the fiduciary agent, based on the value specified in item i, readjusted as the paragraph ii above; (v) plus, in cases of delay in payment, regardless of notice, judicial or extrajudicial notification, on the delinquent amounts, without prejudice to monetary restatement, (a) interest for late payment of 1% per month, calculated pro rata temporis since the date of default until the date of actual payment; (b) moratorium fine of 2%, non-compensatory and rigid; (c) restatement by IGPM variation, calculated pro rata from the date of default until the date of actual payment; and (vi) realized upon deposit held in the current account to be specified in writing by the Fiduciary Agent to the Company, serving the receipt as settlement of payment. Reimbursement of expenses: the Fiduciary Agent shall be refunded by the company for all reasonable costs incurred that have proven to protect the rights and interests of the debenture holders or to perform their claims within 30 days from the delivery of the evidentiary documents accordingly, provided that, where possible, the costs have been approved in advance by the company, which shall be considered approved if the company does not appear within 2 working

201

days from the date of receipt of their request by the Fiduciary Agent. Obligations. The Fiduciary Agent, as provided for in the deed of issue, will have its duties established in the law and in accordance with the rules and regulations of the Securities and Exchange Commission of Brazil (CVM), and use of any action to protect rights or defend interests of the debenture holders. Replacement: In case of absence, temporary impediments, renunciation, intervention, judicial or extrajudicial settlement, bankruptcy, or any other case of vacancy in the fiduciary agent, the following rules shall apply: (i) is provided to debenture holders, after the closing of the offer, to proceed with the replacement of the fiduciary agent and the indication of its replacement at general meeting of debenture holders especially convened for this purpose; (ii) if the fiduciary agent is unable to continue to perform its duties by supervening circumstances to the deed of issue, shall immediately communicate the fact to debenture holders, requesting its replacement and convene a general meeting of debenture holders for this purpose; (iii) if the fiduciary agent, renounces its functions, should remain in the exercise of its duties until another institution is indicated by the Company fot its replacement and approved by general meeting of debenture holders, and assume their functions effectively; (iv) shall be performed, within the maximum period of 30 days from the date of the event that determine, general meeting of debenture holders, for choosing the new fiduciary agent, that may be called by the fiduciary agent to be replaced, by the Company, by debenture holders of the first series representing at least 10% of the debentures of the first series in circulation, or for debenture holders of the second series representing at least 10% of the second series ' debentures in circulation, or by CVM; in the event of convocation notice do not occur within 15 days before the expiration of the time limit here predicted, it will be up to the Company making it, being sure that the CVM may appoint interim replacement pending consummating the process of choosing the new trustee; (v) replacement, on a permanent basis, of the fiduciary agent (a) shall be subject to prior notice to the CVM and its manifestation on the attendance to the requirements provided for in article 9 of CVM Instruction No. 28, November 23, 1983, as amended, and (b) shall be subject to the addition to the deed of issue; (vi) payments to the fiduciary agent replaced shall be effected in accordance with the proportionality to the period of effective service delivery; (vii) the fiduciary agent will be entitled to the same compensation of the perceived by the previous, if (a) the company has not agreed with the new value of the remuneration of the fiduciary agent proposed by general meeting of the debenture holders, referred to in item iv above, or (b) the general meeting of debenture holders referred to in item iv above does not act on the matter; (vii) the fiduciary agent should replace, immediately after his appointment, communicate it to the company and to debenture holders; and (viii) shall apply to cases of substitution of fiduciary agent the norms and precepts from the brazilian Securities and Exchange Commission (CVM). During deliberations of the General Meetings of first series debenture holders and General Meetings of second series debenture holders, for each outstanding Debenture one vote will be granted, permitting the establishment of proxy, whether Debenture holder or not. Except for the provisions below, (i) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the first series representing at least 75% of outstanding First Series Debentures; and (ii) all deliberations to be taken in the General Meeting of debenture holders will depend on approval of debenture holders of the second series representing at least 75% of outstanding Second Series Debentures;. conditions for amendment of the Not included in the quorum above are: (i) quorums expressly provided for in other clauses of rights conferred by such the deed of issue; and (ii) changes, which should be approved by debenture holders of the first securities series representing at least 90% of outstanding first series debentures and by debenture holders of the second series representing at least 90% of outstanding second series debentures, (a) of the provisions of this clause; (b) of the quorums for approval provided for in the Deed of issue; (c) the remuneration, except for changes resulting from extinction, limitation and / or non-disclosure of the DI rate or IPCA, as provided in Clause of the Deed of issuance; (d) any dates for payment of any amounts provided for in the Deed of issuance; (e) of the term of the Debentures; (f) of the type of Debentures; (g) creation of a repricing event; (h) the provisions relating to optional early redemption; (i) the provisions relating to early amortization (j) of any Event of Default. other relevant characteristics None

202

19.

BUY-BACK PLANS AND SECURITIES HELD IN TREASURY

203

19.1

Share buyback plans

As of December 31, 2011 the Company didnt have a share buyback plan. 19.2 Securities held in Treasury

The Company doesnt have shares in Treasury. 19.3 Securities held in Treasury at the end of the last financial year

As of December 31, 2011 the Company didnt have shares in Treasury 19.4. Other information that the Company considers relevant

As a result of the exercise of the right of withdrawal by dissident shareholder of the deliberations of the extraordinary general meeting held on August 1, 2011, the company repaid to the unrealized profit reserve, issuing 99,140 of its own shares, for R$535 thousand, and these shares were subsequently cancelled, as the approval of the Board of Directors on September 23, 2011.

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20.

SECURITIES TRADING POLICY

205

20.1 Description of the Companys policy for trading of securities by major shareholders, direct or indirect, directors, members of the Board of Directors, or of any body with consultative or technical functions, created by any statutory provision

a. Date of approval
February 8, 2010

b. Related parties
The Company, the Controlling Shareholder, the Administrators, members of the Fiscal Council, employees (when they have insider information regarding the Company) and any person who adopted this trading policy (Securities Trading Policy) due to their title, job or position in companies that control or are controlled by the Company (Persons Bound to the Trading Policy).

c. Main characteristics
The main characteristics of the Trading Policy are: prohibiting the trading of securities issued by the Company by Bound Persons who have material information about the Company; prohibiting the trading of securities issued by the Company by Bound Persons who leave board positions, for the period of six months after they leave the position or until the material information is disclosed; prohibiting the trading of securities issued by the Company by Related Parties whenever a purchase or sale of shares issued by the Company is in progress, or execution of any agreement or contract for the transfer of Companys share control, existence of intention of promoting amalgamation, total or partial spin-off, transformation or corporate restructuring involving the Company. This restriction only applies to controlling shareholders, direct or indirect, and administrators when the ongoing purchase or sale of shares of the Company by the Company; and prohibiting on trading in securities issued by the Company by persons linked to negotiating policy within fifteen days prior to the release of quarterly and annual required by the CVM.

d. Prohibitions on trading and description of monitoring procedures

When Material Fact not yet disclosed is pending; after the disclosure of material fact, provided that negotiations could adversely affect business conditions described in the act or fact in question; Related Parties may not trade securities over a 15-day period prior to the disclosure, as applicable, of Company's quarterly information (ITR) or standard financial statements (DFP); by former Administrators, for the period of six months after they leave the position or until the material information is disclosed;. All trading activities with securities issued by the Company carried out by Bound Persons shall only be performed through one of the accredited brokers included in the list sent by the Company to CVM, updated on a regular basis. 20.2 Other information that the Company considers relevant Trading Policy

The full version of Mills Securities Trading Policy can be obtained in the following address: http://mills.infoinvest.com.br/static/enu/arquivos/Politica_de_Negociacao_MILL_RCA_2010_02_08_i.pdf

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21.

DISCLOSURE POLICY

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21.1 Rules, bylaws or procedures adopted to ensure that information to be disclosed publicly is collected, processed and reported accurately and in a timely manner It is incumbent on the Investor Relations Officer to report and communicate the Material Information to CVM and Market Entities, through the institutional media, as well as adopting the procedures described under this policy. The information should be disclosed to the public: (i) by means of an advertisement published in the newspaper of wide circulation habitually used by the Company and (ii) availability of the announcement, whose content at least identical to that provided to CVM and the Market Entities, in the Internet (www.mills.com.br/ri). At the discretion of the Investor Relations Officer, the announcement referred to in item above can be a summarized description of the information in question in which case reference shall be made to the webpage www.mills.com.br/ri, where a full description of the Material Information can be found. The information should be presented in a clear and precise manner, in language accessible to the investing public. Whenever a technical concept that used at the discretion of the Investor Relations Officer, is considered more complex, an explanation of its meaning must be on the information disclosed. Whenever Material Information is released by any means of communication, including information to the press or in meetings with professional associations, investors, analysts or selected public, in the Country or abroad, that Investor Relations Officer shall release the Material information simultaneously to the market. The controlling shareholders, the members of the Board of Directors and Fiscal Council, and any employee, who have knowledge of the information related to the Material Information, and signed the adherence instrument containing the policy on disclosure of Material Information, shall immediately notify the Investor Relations Officer about such Material information, in case the Officer is not yet aware of the information, as well as verify that the Investor Relations Officer have taken the measures described in this document. The communication to the Investor Relations Officer mentioned in item 4.4 above, must be carried out by email, to the email address ri@mills.com.br. If the groups mentioned in item above certify that there has been omission in the disclosure of that Material Information by the Investor Relations, and the terms provided by the policy on disclosure of Material Information, such group must immediately communicate the Material information to CVM for their exemption from liability imposed by non-compliance with the rules on disclosure. Whenever the CVM or any market entity require further explanation from the Investor Relations Officer about the disclosed Material Information, or if an atypical variation in price or trading volume of securities

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issued by the Company or related thereto, the the Investor Relations Officer should inquire persons with access to Material Information, in order to establish whether they are aware of information that must be disclosed to the market. The administrators and employees inquired in item above, should respond to the request of the Investor Relations Officer immediately. If not able to meet personally or talk on telephone with the Investor Relations Officer on the same day of the request, administrators and employees in question should send an email with the information to the address ri@mills.com.br regarding the information relevant to. The disclosure of any Material information, should be simultaneously to CVM and Market entities, and shall take place before the opening or after the closing of trading on the Stock Exchanges, and in case of hour incompatibility with other markets, the Brazilian market trading hours shall prevail. If, exceptionally, it is imperative that the communication of Material information occurs during trading hours, the Investor Relations Officer when disclosing the Material information, may simultaneously request the Market entities in Brazil and abroad, the suspension of trading of securities issued by the Company or related thereto, the time necessary to properly disclose their information. The Investor Relations Officer must prove to Brazilian Market entities that the requested suspension of trading also was accomplished in foreign Market entities. The Company can disclose to the market expectations of future performance (guidance), for short and long term, especially with regard to financial and operational figures of their businesses, by decision of the board of directors, noted that such guidance shall be in accordance with CVM regulations, paragraph 4 of article 13 of CVM Instruction No. 358/02. In the event that disclosure of such expectations, should be subject to the following assumptions: (i) The anticipated dissemination of results may be accepted in the case of preliminary information, not yet audited, clearly presented for each of the items and timeframes, memories of the assumptions and calculations used; (ii) The results or information prepared in accordance with foreign accounting standards should provide a reconciliation to the Brazilian accounting practices, as well as reconciliation with the accounting items expressed directly in the financial statements of the Company and, therefore, obtained by the accounting principles adopted in Brazil; (iii) If disclosures involves the preparation of projections, a comparison with the actual results must be submitted, on the occasion of the release of Form ITR of the Company;

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(iv)

If the projections are discontinued, it should be informed, together with the reasons that led to its loss of validity in the form of Material Information.

21.2 Disclosure policy for relevant events or facts adopted by the issuer, indicating the procedures for maintaining secrecy about relevant information not disclosed The Companys policy on Disclosure of Material information is based on the following principles and objectives: (i) (ii) (iii) to disclose full information to shareholders and investors; to ensure prompt widespread dissemination of Material information; to allow equity access to public information on the Company by every shareholder and investor; (iv) (v) (vi) to protect secrecy of any undisclosed Material information; to contribute to the stabilization and fostering of the Brazilian capital market; and to strengthen the Companys good corporate governance practices.

The controlling shareholder, directors, members of the board of directors and the fiscal council, as well as other employees and agents of the Company, shall preserve the confidentiality of the information pertaining Material Information to which they have privileged access due to the position they hold, until their actual release to the market and ensure that subordinates and third parties they trust to do the same, being jointly responsible with them in case of noncompliance. For the purpose of maintaining confidentiality referred to in item 6.1 above, the individuals mentioned therein shall observe and ensure observance of the following, without prejudice to the adoption of other measures that are appropriate in front of each situation: (i) disclose the confidential information strictly to those people who absolutely need to know it; (ii) not discuss confidential information in the presence of third parties who are not aware of such information, though if expected that third party cannot understand the meaning of the conversation;

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(iii)

not to discuss confidential information in conference calls in case one cannot be sure of who actually will participate in it;

(iv)

maintain documents of any kind relating to confidential information, including handwritten personal notes in a safe, locked cabinet or file, to which only authorized persons have access to the information;

(v)

create documents and electronic files related to confidential information always with password protection systems;

(vi)

to circulate internally documents containing confidential information in sealed envelopes, which should always be delivered directly to the recipient;

(vii)

not to send confidential documents through facsimile, unless there is certainty that only authorized personnel to take notice of such information will have access to the receiver, and

(viii)

without prejudice to the responsibility of those who are transmitting confidential information, require a third party outside the Company who need access to information to sign a confidentiality agreement, which shall specify the nature of information and include in the statement that it recognizes its confidential nature, pledging not to disclose it to anyone else and do not trade securities issued by the Company prior to disclosure of information to the market.

When confidential information needs to be disclosed to any employee of the Company or other person holding title, function or position in the Company, its controlling shareholders, subsidiaries or affiliates, other than a director, member of the Board of directors or the Fiscal Council of the Company, the individual responsible for the transmission of information should make sure that the person receiving it is aware of the Policy Disclosure of Material Information of the Company, requiring even to sign the Policy Disclosure of Material Information before providing access to information. 21.3 Administrators responsible for implementation, supervision of the information disclosure policy Investor Relations Officer. 21.4 Other information that the Company deems relevant maintenance, evaluation and

The full version of Mills Policy on Disclosure of Material Information can be obtained in the following address: http://mills.infoinvest.com.br/fck_temp/12_1//Politica_de_Divulgacao_MILLS_RCA_2010_02_08_i.pdf

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22.

EXTRAORDINARY BUSINESS

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22.1 Acquisition or disposal of any significant asset which does not belong to the normal operations of the Company There was no acquisition or disposal of any significant assets which does not belong to the normal operations of the Company. 22.2 Significant changes in the running of the Companys business

There were no significant changes in the running of the Companys business. 22.3 Identify relevant contracts concluded by the Company and its subsidiaries which are not directly connected to its operations No relevant contracts were concluded by the Company and its subsidiaries which are not directly connected to its operations. 22.4 Other information that the Company deems relevant

There is no other relevant information for this item 22.

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