Dividend Policy and History

Dividend Policy

The Brazilian Corporation Law and the Company’s By-laws require the shareholders’ ordinary general meeting to be held up to April 30 of each year where the shareholders must, among other things, decide about the distribution of the annual dividends. All shareholders are entitled to receive the dividends on the date when the dividends were declared.

The Company’s shareholders will decide about the Board of Directors proposal to allocate the net income for the prior year. The Brazilian Corporation Law defines “net profits” for any fiscal year as net income for that fiscal year, net of any accumulated losses from prior fiscal years, income tax and social contribution taxes and any amounts allocated to the participation of its employees and management in Metalfrio’s net profits in such fiscal year.

The Metalfrio mandatory dividend is of at least 25% of the adjusted net income, under the terms of the Brazilian Corporate Law and the Company’s By-laws, determined in the unconsolidated financial statements. The yearly distribution of dividends, including dividends in excess of the minimum mandatory dividend, requires approval by a majority vote of the holders of Metalfrio’s common shares and will depend on many factors. These factors include the Company’s results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by Metalfrio’s board of directors and shareholders.

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History and Distribution of Dividends

The compensation payable to shareholders by Metalfrio over the last five fiscal years is indicated below:

(R$ million) 2005 2006 2007 2008 2009 2010 2011
Interest on shareholders’ equity, net of IRRF 1.4 2.0 - - - - -
Dividends distributed - - 25.5 2.6 10.8 24.2 18.5
Subtotal 1.4 2.0 25.5 2.6 10.8 24.2 18.5
IRRF of interest on shareholders’ equity 0.2 0.4 - - - - -
Total 1.6 2.4 25.5 2.6 10.8 24.2 18.5

According to Brazilian Corporate Law, shareholders have a three-year period from the date of the dividend payment to claim the dividends or interest on shareholders’ equity with respect to their shares, after which the aggregate amount of any unclaimed dividend shall legally revert to Metalfrio.