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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

_______________________________________________________________

May 2, 2012
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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: 287-9 Name ofcompany responsible: PricewaterhouseCoopers Auditores Independentes (PwC) CPF/auditor CNPJ: 61.562.112/0001-20 Date of hired service: 10/30/2009 Service end date: 04/17/2011 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, Tel: (21) 3232 6048 Fax: (21) 2516 6591 E-mail: patricio.roche@br.pwc.com Description of contracted service: Professional services to audit the financial statements of Mills Estruturas e Servios de Engenharia S.A. (Company), additionally were provided tax consulting services and consulting services in information technology and processes for choosing and implementing a new system (ERP) for the Company. Total amount of remuneration of auditors separated by offered services: Additionally, in reference to the year ended 2010, PwC received by the Company a total amount of R$100,000 of fees, equivalent to 11.7% of the auditor expenses in the same period, related to two projects: (a) process mapping to assist the Company in the selection of the new ERP system, with hiring date of September 1st of 2009 and maturity of twelve months; and (b) monitoring the implementation of ERP (PA - Project assurance e QA - quality assurance), with hiring date of December 8 th of 2010 with maturity of less than twelve months. The fees to be disbursed related to the last contract, will only happen on the fiscal period ended on 2011.

CVM auditor code: 385-9 Name of company responsible: Deloitte Touche Tomahtsu CPF/auditor CNPJ: 49.928.567/0001-11 Date of hired service: 04/18/2011 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, Tel (21) 3981050, Fax (21) 3981-0600 E-mail: antoniobrandao@deloitte.com Description of contracted service: Professional services to audit the financial statements of Mills Estruturas e Servios de Engenharia S.A. (Company) on the first quarter of 2011. Total amount of remuneration of auditors separated by offered services: none in 2010

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 millions of R$) Total Assets (in millions of R$) Net revenues (in millions of R$) Gross profit (in millions of R$) Net income (in millions of R$) Number of shares, excluding treasury(1) Book value per share (in R$) Earnings per Share (in R$)(2)

2010 655,152 924,093 549,884 295,086 103,283 125,495,309 5.22 0.82

For the Year endend December 31 2009 172,641 440,294 404,193 234,590 68,388 87,420,577 1.97 0.78

2008 109,613 371,573 299,378 155,549 30,588 67,124,331 1.63 0.46

(1) Number of shares issued by the Company, considering that this was a limited company until its transformation adopted by a meeting of shareholders held on January 29, 2009.. (2) Basic earnings per share.

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 (usually defined as earnings before interest, tax, depreciation and amortization) 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 2008 2009 2010 (in thousands of R$) 70,805 125,799 147,463 18,732 31,851 47,060 89,537 157,650 194,523

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 form. The Companys Administration 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, tax changes and depreciation.

Return on Invested Capital

Return on Invested Capital (ROIC) is a non-GAAP measurement that reflects, in percentage, the Operating Income before financial results and after the payment of income tax and social contribution on this income, divided by average invested capital. The 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 2008 2009 2010 (in thousands of R$, except when percentages) Operating Income before financial results .................................... 70,805 125,799 147,463 (+) Income tax and CSLL provision (1).......................................... (24,074) (42,772) (40,078) Operating profit before financial income and after taxation ...................................................................... 46,731 83,027 107,385 () Average invested capital ............................................... 192,261 (=) net equity (2) ................................................................... 82,275 (+) capital from third parties (3) .............................................. 111,702 (-) Cash and Cash equivalents ............................................... 1,716 ROIC (%) ............................................................................ 24%
________________________________________ (1) Effective tax rate on operational Income before financial result. (2) Comprising shareholders equity. (3) Comprising total loans and other liabilities that carry interest.

332,713 141,128 193,252 1,667 25%

510,538 501,006 182,561 173,029 21%

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 to its inclusion in this form. Management 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 Administration 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

Transfer of ownership from its controlling shareholder


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

Increase of the Companys Capital Stock


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 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 October 24th, 2011 was approved, in 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"). On September 23th, 2011 was approved, in Board of Directors Meeting, the increase of the Companys capital stock, 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. In 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 July 27th, 2011 was approved, in Board of Directors Meeting, the increase of the Companys capital stock, 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").

Amendment of the Companys Bylaws


In August 1st, 2011, on Extraordinary Shareholders Meeting, was approved the amendment of the Companys Bylaws in accordance with the Proposal to Amend the Bylaws approved by the Board of Directors on July 14, 2011, and its restatement.

Merger of GP Andaimes Sul Locadora Ltda


In August 1st, 2011, was approved, in Extraordinary Shareholders Meeting, the merger of GP Andaimes Sul Locadora Ltda (GP Sul) by the Company, in the Protocol and Justification terms, without a capital increase and without the issuance of new shares. The Protocol and Justification, executed between the Company and GP Sul on July 14, 2011, was also approved in the Exrtaordinary Shareholders Meeting.

GP Andaimes Sul Locadora Ltda Acquisition


In 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 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. In 2010, GP Suls net revenues and cash generation, measured by EBITDA, were R$ 2.0 million and R$ 1.4 million, respectively. The company has no debt. This strategic acquisition will enable 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.

Debentures Issuance
On April 18, 2011, the Company held its first issuance, in a single series of simple debentures, non convertible into shares, unsecured, public offering object with limited placement efforts, pursuant to CVM Instruction 476. Were issued 27,000 debentures, each with a nominal value of R$ 10,000.00 and maturity on April 18, 2016, bringing the total amount of R $ 270,000,000.00. The nominal value will be paid in three annual installments from the third year from the issuance and interest payable semiannually corresponding to 112.5% of the accumulated variation of the CDI interest rate. 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. This debentures issuance will allow the reduction of the average debt cost of the Company, besides the lengthening of its average maturity. For more information on the securities issued by the Company, see item 18 from this Reference Form.

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 paid in full by the due date. On December 7, 2011, the Company held its second issuance, in a single series of promissory notes, 3 (three) commercial promissory notes each with a nominal value of R$9.0 million, amounting to R$27.0 million, with maturity on December 1, 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 1.1% per year. The remuneration shall be paid in full by the due date. On March 29, 2011, the Company held its first issuance, in a single series of promissory notes, pursuant to CVM Instruction No. 134 of November 1st of 1990, and CVM Instruction No. 155, August 7, 1991, as amended, which were the object of public offering with limited placement efforts, pursuant to CVM Instruction No. 476 of January 16, 2009, as amended (CVM Instruction 476). Were issued 30 commercial papers, each with a nominal value of R$1 million, with a maturity of 90 days from the date of its issuance, redeemed early (and therefore no longer in circulation) after the debentures issuance held by the Company on April 18, 2011, as described below.

Rohr S.A. Estruturas Tubulares stake acquisition


In January 19, 2011, the Company entered into a purchase and sales agreement to acquire 25% of the voting and total capital stock of Rohr S/A Estrutura Tubulares (Rohr) for R$ 90 million, paid fully in February 8, 2011. 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 and will 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.

Capital reduction of its main shareholder


Nacht Participaes S.A. (Nacht), Mills main and controlling shareholder, reduced its capital stock, as approved at an Extraordinary General Shareholders Meeting held on February 17, 2011. After the capitalization of part of the accumulated profits and the legal reserve, Nachts capital stock was reduced. Such capital reduction was concluded on April 18, 2011, with the delivery of shares issued by the Company currently held by Nacht to some of its shareholders after the 60-day period provided by law to creditors opposition. As a result of the capital reduction, the interest of Nacht on the voting and total capital stock of the Company was reduced in 17.2%, from 39.0% to 21.8%, and the shareholders Jeroboam Investments LLC (Jeroboam), Andres Cristian Nacht (Cristian Nacht) and Jytte Kjellerup Nacht (Jytte Nacht) holds a direct stockholding at the Company of 15.3%, 1.4% and 0.5%, respectively. Moreover, to regulate its relationship as shareholders of the Company and continue to be qualified jointly as the controlling group of the Company, even after Nachts capital reduction, all of Nachts shareholders, which included Jeroboam and the members of the Nacht family, including Cristian Nacht and Jytte Nacht, executed, on February 11, 2011, a shareholders agreement regulating the voting rights and the transfer of shares of Nacht and the Company.

The main terms of this shareholders agreement are: (a) maintenance of the Nacht Family and Jeroboam as the controlling group of Mills, (b) joint exercise of the voting rights in any decision involving Mills, (c) designation of Cristian Nacht as representative of the controlling group at the Board of Directors and Shareholders Meetings of Mills, and (d) prohibition of sale to third parties of shares of Mills representative of more than 10% of the participation that each shareholder holds individually. The capital reduction of Nacht and the execution of the shareholders agreement did not cause any changes on the administrative structure and control of the Company, which will still be held by the Nacht family in the same proportion held previously. In addition, this transaction does not involve any change in the number of shares or in the amount of the capital stock of the Company.

3.4

Policy for allocation of results


Fiscal Year Ended December 31 2010 2009 2008 In provision introduced In provision introduced The Companys bylaws on February 8, 2010, on February 8, 2010, did not have rules on the Companys bylaws the Companys bylaws retention of profits, provide that up to provide that up to 75% beyond the ones 75% of the adjusted of the adjusted net legally established. net income for the income for the year year could be could be allocated to allocated to the the expansion reserve, expansion reserve, as as long as the recorded long as the recorded amount in such amount in such reservation does not reservation does not exceed 80% of its exceed 80% of oits capital. capital. 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 The Companysshareholders 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, the Companys shareholders received, as dividends, 25% of its adjusted net income recorded in 2009. The Companysshareholders 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 2009, the Companys shareholders received, as dividends, 25% of its adjusted net income recorded in 2008.

Rules on retention of profits

Arrangements for distribution of dividends

Frequency of dividend distribution

The dividends are distributed according to the deliberation from the Companys AGO. Some of the financial contracts include

The dividends are distributed according to the deliberation from the Companys AGO. Some of the financial contracts include

Restrictions to dividend distribution

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Dividends 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 Date of approval of the retention Date of dividend payment Date of dividend payment Dividend paid to common Dividend paid to preferred Interest on capital paid to common Interest on capital paid to preferred Date of dividend payment Dividend paid to common Dividend paid to preferred Interest on capital paid to common Interest on capital paid to preferred

2008 29,059 25.7% 6.8% 7,476 7,476 23,112 04/29/09 05/29/09 04/30/2009 2,710 1,028 0 0 05/29/2009 2,710 1,028 0 0 between the early expiration cases the payment of dividends in an amount greater than 50% of the adjusted net income for the year.

Fiscal Year ended December 31 2009 (in R$ thousands) 64,969 25.0% 9.4% 16,242 16,242 52,146 03/12/10 04/28/10 04/28/2010 7,780 2,943 4,004 1,515 between the early expiration cases the payment of dividends in an amount greater than 50% of the adjusted net income for the year.

2010 98,119 25.0% 3.7% 28,113 24,530 71,527 04/19/11 04/29/11 -

04/29/2011 2,713 25,400 between the early expiration cases the payment of dividends in an amount greater than 50% of the adjusted net income for the year.

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 retained earnings account. 3.7 Debt
For the Year ended December 31 2008 2009 2010 (in R$ thousands, except percentages) Total amount of debt of any nature .................................... () Stockholders equity ..................................................... Debt Ratio........................................................................... 261,959 109,614 239% 267,653 172,641 155% 268,941 655,152 41%

Net Debt over EBITDA

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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.

Gross Debt................................................................................. (-) Availabilities .......................................................................... Net debt .............................................................................. () EBITDA ......................................................................... Net debt on EBITDA ............................................................
________________________________________

For the Year ended December 31 2008 2009 2010 (in R$ thousands, except percentages) 189,493 183,938 132,623 (1,758) (1,575) (142,338) 187,735 89,537 48% 182,363 157,650 86% (9,715) 194,523 -5%

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 lshareholders equity ratio as the Companys Debt indicator. 3.8 Obligations of the Company in the fiscal year of December 31, 2010, with collateral and maturity date:
Maturity Between 1 and 3 Between 3 and 5 years years (in R$ thousands) 35,757 44,570 6,683 12,358 25,505

Less than 1 year

Over 5 years

Total

Collateral Floating Guarantee Unsecured obligations

681 114,321

10,755 18,311

91,763 6,683 170,495

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.
14

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 2010, a short-term debt of R$46.7 million, and long-term debt of R$85.9 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 Companymay 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.
15

The loss of members of the Companys management team may have a material adverse effect on itsoperations.
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, 2010, approximately 4% 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
16

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, 2010, the Company was involved in administrative proceedings and lawsuits for which it has recorded provisions of R$11.1 million. The Companys financial condition and results of operations could be materially adversely affected, if it receive 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.

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
17

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.

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, 2010, the BM&FBOVESPA represented a market capitalization of approximately R$2.56 trillion (US$1.55 trillion), with an average daily trading volume of R$6.48 billion during the period from December 30, 2009 to December 30, 2010. The Brazilian capital market is significantly concentrated. The main ten shares traded on the BM&FBOVESPA accounted for approximately 43.4% of the total volume of shares traded on this stock exchange during the year ended December 31, 2010. These characteristics from the Brazilian Capital Market may substantially limit investors ability to sell the Companys shares for the desired price and at the desired time, which in turn may have a significant adverse effect on the price of its shares. Between the IPO date on April 15, 2010 until December 31, 2010, the average daily volume of the Companys traded shares, without considering the auction of the private equities held October 15, 2010, was of R$ 5.1 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
18

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 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.

Not applicable.

e.

to the 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 the Companyis subject to recurring delays in delivery, it 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 due to new import regulations, could result in increased costs for the Company, requiring a price increase, in which case the
19

demand for the Companys services could be adversely affected, affecting its financial condition and operation results.

f.

to the 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 2009, 60.2% 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 2010, the Jahu and Rental divisions accounted for 19.1% and 17.3%, respectively, of the Companys net revenue, compared to 15.4% and 13.5%, respectively, of the Companys net revenue in 2009. 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; macroeconomic factors; and
20

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.

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; 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.

21

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 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. 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 2010, the SELIC rate ranged between 19.13% and 9.82% per year. 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.
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 February of 2011, the exchange rate of the real against the U.S. dollar was of R$1.66 per U$1.00. 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
22

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 governments PAC 2 program, approximately R$132 billion will be invested in the Brazilian cities hosting the 2014 FIFA World Cup and the 2016 Olympic Games, there is a need of significant investment in various sectors in the Brazilian industry, including oil and gas and petrochemical. According to estimates from BNDES, the public and private sectors are expected to invest R$1.601 billion in the industrial, infrastructure and residential construction segments between 2011 and 2014. 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.

23

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.

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.

24

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, 2010, the Company had 4,359 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 Companyis 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.
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
25

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 31, 2010, the total value of cases involving contingent liabilities was R$109 million and the total value involved in processes with probable loss, according to its assessment and its legal counsel, was R$11.1 million, as indicated below:

Proceeding/Contingency 2008

Year ended December 31, 2009 (in thousands of R$)

2010

Civil proceedings Possible losses Probable losses


Tax and social security proceedings

1,183 422

1,547 803

772 430

Possible losses Probable losses Labor claims Possible losses Probable losses

2,614 20,075

9,582 5,617

11,501 7,296

4,077 1,270

10,787 1,420

12,649 1,672

26

Other Possible losses Probable losses Provisions Judicial deposits 27 567 22,334 6,527 18 687 8,527 5,960

1,741 11,139 7,328

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 48 proceedings concerning civil liability and indemnification payments, regarding, above all, contract terminations and indemnification payments, whose total value was of R$ 2.5 million on December 31, 2010. Based on the advice of the Companys external legal counsel, as of December 31, 2010 it has recorded provisions of R$430 thousand to cover probable losses arising from these proceedings.

Tax and Social Security Proceedings


As of December 31, 2010, the Company was defendant in 126 tax proceedings for an aggregate amount of R$91 million. From this amount, R$7.3 million are provisioned, and the value from the net provision of judicial deposits and appellate was of R$2.2 million. Below is a description of its main tax proceedings:
Process n 10768.008181/98-36 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts IRS 2nd Instance April/07/1998 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and Secretaria da Receita Federal do Brasil R$30,817,554.53 (on 02/24/06) This is a tax-deficiency notice that seeks the payment of amounts supposedly not paid by way of COFINS, CSLL, IRPJ and PIS by reason of supposed omissions of revenues, cancellation of expenses incurred by the taxpayer with rents of real estates, personal property, machines, automobiles and equipment necessary and indispensable for its business and because the taxpayer failed to respond to the notice of March 23, 1998 that notified it to justify the revaluation reserve. In the Companys defense, we claimed that the tax liability relating to the period from January 1992 to March 1993 has been time-barred. We also argued that the allegation of omission of revenue was due to transactions of spin-off and consolidation of the companies Mills Eventos and Mills Servios de Manuteno, which caused no loss for the tax authority, for which reason the tax-deficiency notice must be cancelled. The company claims that the revenues in its name were subjected to taxation by a subsidiary, by reason of the delay by the Commercial Registry in acknowledging the transactions that had been conducted. Current stage: On January 28, 2010, there was a trial in which the Administrative Tax Appeals Chamber decided to annul the tax assessment. However, it must be emphasized that the Tax Collector may still file a Special Appeal against the said decision. Remote If the tax-deficiency notice is held to be valid, the Company will have

Chances of loss Analysis of impact in the case of losing

27

the suit

Amount provisioned (if any)

to pay the updated value of the tax (until December 31, 2010) of R$47 million. Since this is an isolated fact, which does not reflect on the habitual practice of the Company, the Company does not believe that an unfavorable decision in the administrative proceedings in question would lead to a loss in other claims. However, by reason of the amount in dispute, the Company may have to obtain a foreign loan or revaluate its investment plan if we are required to pay the said taxes. -

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 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, 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 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

28

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

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. 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$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. -

Amount provisioned (if any)

Process n 2006.51.01.011682-5 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts Federal Justice 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, 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 2005.51.01.002775-7 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Federal Justice of Rio de Janeiro 2nd Instance February/15/2005 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and Nacional Treasury R$1,182,037.77 (on February/15/05)

29

Main facts

Subject Matter: This is a Lawsuit seeking the acknowledgment of the right of Plaintiff to offset the amounts unduly paid in the last 10 years, and the acknowledgment of the right of Plaintiff to ratification of the offset conducted in year 2002 against the liabilities unduly paid in year 1993. Current stage: In view of the judgment that held the claim to be invalid, the Plaintiff filed an Appeal which was granted by a majority of votes. At this time, the case is waiting from judgment of an Appeal filed by the Federal Government. Remote In the event of an unfavorable decision, the Company will have to pay the disputed tax liabilities. Additionally, after Supplementary Law No. 118/2005, the company may only offset the tax liabilities that had been unduly paid within a five-year period before the petition for offset/restitution. 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, 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 18471.001569/2006-13 Jurisdiction Instance

Receita Federal of Brasil (IRS)


2nd Instance

30

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

December/15/2006 Jahu Indstria e Comrcio Ltda. (succeeded by the Company) and Federal Union. R$8,886,083.64 (12/31/2010) 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$8.9 million on 12/31/2010. 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$4,948,377.84

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. Possible The Company will have to pay the tax liability in question, in the adjusted amount of R$776.6 thousand (on December 31, 2010), 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)

Process n 12267.000047/2007-14 (NFLD n 35.739.839-4) Receita Federal of Brasil (IRS) Jurisdiction

31

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$2.2 million (on December 31, 2010), 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)

NFLD n 35.739.844-0 Jurisdiction Instance Date of filing Parties in the suit Amounts, goods or rights involved Main facts

Receita Federal of Brasil (IRS)


1st Instance May/24/2005 Mills do Brasil Estruturas e Servios Ltda. and INSS (Social Security Administration) R$376,742.79 (on May/23/2005) This is a tax-deficiency notice seeking the payment of amounts supposedly not paid by way of social-security contributions. The Company claims that the tax assessment has factual errors and that the tax liabilities were actually paid. Current stage: The case is pending disposition of the objection. Remote If the assessment is deemed to be valid, the Company will have to pay the tax liability in question, in the updated amount of R$626 thousand (on 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 37280.000387/2006-17 (NFLD n 35.739.841-6) Receita Federal of Brasil (IRS) Jurisdiction Instance Date of filing Parties in the suit 1st Instance May/23/2005 Mills do Brasil Estruturas e Servios Ltda. (succeeded by the Company) and INSS (National Institute of Social Security)

32

Amounts, goods or rights involved Main facts

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$1.2 million (on 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 11330.000329/2007-30 (NFLD n 35.102.808-0) Receita Federal of Brasil (IRS) Jurisdiction 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$504 thousand (on December 31, 2010). Taking into account the amount involved in the lawsuit, the Company does not believe that an unfavorable decision will have a material adverse effect on its financial condition or operating results. R$ 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 Federal Justice 2nd Instance September/21/2005 Mills do Brasil Estruturas e Servios Ltda. and INSS (National Institute of Social Security)

33

Amounts, goods or rights involved Main facts

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$1.5 million (on December 31, 2010). 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 368 labor claims, and with the advisory of an external legal counsel, the Company has recorded provisions on the amount of R$1.6 million on December 31, 2010, to cover probable losses resulting from the labor claims filed against the Company. 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: Srgio Roberto de Figueiredo Filho Defendant: Mills Estruturas e Servios de Engenharia Ltda. and Braskem S/A. Amounts, goods or rights involved Main facts R$ 977,541.75 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.

34

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

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. -

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 1st 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$ 5.0 million 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 violation of Regulation No. 18, in the amount of R$5.0 million. The case is awaiting an action by the Regional Labor Office for subsequent judgment. Possible 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. If the amount payable is material, we may have to obtain a foreign loan or reassess our investment plan. -

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

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

35

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. -

Amount provisioned (if any)

Action n 01106.2009.018.01.00.0 Jurisdiction Instance Date of filing Parties in the suit

18 Vara do Trabalho (18th Labor Staff) of Rio de Janeiro/RJ


1st Instance August/20/2009 Author: Labor Syndicate in Empresas Locadoras de Bens Mveis, Assistncia Tcnica e Prestadoras de Servios em Geral - SINTALOCAS Defendant: Mills Estruturas e Servios de Engenharia Ltda.

Amounts, goods or rights involved Main facts

R$ 20,000.00 This is a labor claim, filed by the Union of Works in Companies of Furniture, Technical Assistance and Providers of General Services (SINTALOCAS), whose subject matter is the trade-union contribution set forth in Article 583 of the CLT (Consolidated Labor Laws), which should have been paid to the said Union with regard to years 2006 to 2009. On March 3, 2010, a judgment was entered in this case, which terminated the case because of lack of conditions of action. In view of the adverse judgment, the union filed an appeal that is pending disposition. Possible In the event of loss, the Company will have to pay the amounts claimed and will have to start contributing to another Union (SINTALOCAS), without the possibility of deduction of the amounts previously paid to the current union. -

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

Amount provisioned (if any)

36

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.

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.

37

5.

MARKET RISKS

38

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.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 Risk Interest rate Instrument/operation Debt BNDES - TJLP Leasing - CDI Working Capital - CDI Total Variation Increase in the indicator Increase in the indicator Increase in the indicator 18,122 72,945 41,557 132,624 18,152 75,742 42,017 135,911 2% 18,179 78,584 42,473 139,236 5% Description (probable) Scenario II +25% R$ (thousand) 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 10.75% 6.00% Scenario II +25% 13.44% 7.50% Scenario III +50% 16.13% 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.

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
39

the main Brazilian inflation indexes. During 2010, the IGP-M index calculated by FGV was of 11.32%, while the IPCA index announced by IBGE was of 5.91%. For the next 12 months period in March 31, 2011 the IGP-M was of 10.95% and the IPCA was of 6.30%.

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 , mainly telescopic handlers, aerial platforms, formwork and shoring. 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, 2008, 2009 and 2010. 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 Risk Instrument/operation Description (probable) Scenario II +25% Scenario III +50%

Exchange rate (USD)

Commercial commitments* NDF

Increase in the exchange rate Increase in the exchange rate

(121,368) (13,326) (134,695)

(151,710) 17,239 (134,472) 0%

(182,052) 47,852 (134.200) 0%

Total Variation Risk Exchange rate (EURO) Instrument/operation Commercial commitments * NDF Total Variation
*

Description Increase in the exchange rate Increase in the exchange rate (284) (1) (285) (355) 71 (284) 0% (426) 141 (285) 0%

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$).

40

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 1,6662 2,228 Scenario II +25% 2,0828 2,7850 Scenario III +50% 2,4993 3,342

1 e 2 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) registrered 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 Allowanve for Doubtful Debts from the Company detailed by division and consolidated on the indicated dates:
2008 2009 (in R$ thousands, except percentages) Allowance for doubtful debts 2,089 940 0 128 1,029 4,186 Allowance for doubtful debts 3,625 1,504 1,246 363 1,029 7,767 2010 Allowa nce for doubtf ul debts 4,042 1,705 1,285 1,231 1,030 9,293

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

Trade Receivables 23,800 20,497 4,059 5,964 7,875 62,195

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

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

41

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 excess liquidity.

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.
42

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, 2010, the Company had equipment purchase orders with foreign suppliers amounting approximately to US$ 72.8 million and EUR 127,500 (in 2009, such orders amounted to US$ 34 million), all of them with payments expected during 2011. 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 swap contracts in the aggregate amount of R$135.0 million, which fair value on December 31, 2010, totalized R$135.0 million, as presented in the table below.

Tipo

Notional Value

Fair Value

Receivable /Payable Values December 31, 2010

Gains/ Losses

Notional Value

Fair Value

Receivable /Payable Value December 31, 2009

Gains/ Losses

(in R$ thousands)

Swap contracts
Receiving position Citibank Santander/ABN Paying position Citibank Santander/ABN 65.969 65.950 66.053 -

65.969

66.294

66.192

(345)

Tipo

Notional Value

Fair Value December 31, 2010

Receivable/ Payable Values

Notional Value

Fair Value

Receivable/ Payable Values

Decemeber 31, 2009 (in R$ thousands)

Dollar Term Purchase Bradesco Santander Ita 909 133.145 658 134.712 (16) (6.974) (13) (7.003) (16) (6.974) (13) (7.003) -

Tipo

Notional Value

Fair Value

Receivable/ Payable Values

Notional Value

Fair Value

Receivable/ Payable Values

43

December 31, 2010 (in R$ thousands) NDF Euro Term Purchase Santander 283 -

Decemeber 31, 2009

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 uses 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 does not have financial instruments with various objectives of asset protection.

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
Policies and control procedures adopted are appropriate to its operational structure. 5.3 Significant changes in the main market risks.

There were no events that significantly changed 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".

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6.

COMPANY HISTORY

45

6.1

Constitution of the Company

The Company was established on December 1, 1980 as a private 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 the Mills group, called 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 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.

46

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 Companysree 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%. In January 19, 2010, the Company entered into a purchase and sales agreement to acquire 25% 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 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 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 will enable 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

Suspension of Events Division


In 2007, the Company permanently suspended the operations of its Events division, as it did not consider it sufficiently profitable. However, the results of residual operations, including with respect to the performance of obligations under agreements in force at the time of suspension of operations of its Events division, are reflected in its combined financial statements for the year ended December 31, 2008.

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
47

Between 2007 and 2009, the Company underwent a corporate restructuring that included the following steps: The merger of the Companys subsidiary Mills do Brasil Estruturas e Servicos Ltda., or Mills do Brasil, into the Company on December 31, 2007, becoming the direct owner of Mills Indstria e Comrcio Ltda., and being controlled by Mills Andaimes Tubulares do Brasil S.A., The conversion of the Company from a limited liability company into a Brazilian corporation, which was approved on January 29, 2009; and The mergers of the Companys subsidiaries Mills Indstria e Comrcio Ltda., or MIC, Mills Andaimes Tubulares do Brasil S.A., or MAT, and Itapo Participaes S.A., or Itapo, into the Company, which were approved on January 30, 2009.

Increase of Capital from the Company and Staldzene


By reason of the exercise of the stock option granted under the Special ex-CEO Plan, the shareholders of the Company and of Staldzene approved, on March 12, 2010, a stock issue of both companies in the amount of R$323,800 thousand, through the issue by the Company of 153,690 shares and 24,809,032 shares issued by Staldzene. The stock issue of the Company was fully subscribed by Staldzene, whereas the stock issue of Staldzene was fully subscribed by the beneficiary of the Special ex-CEO Plan.

Extinction of Staldzene by incorporation by Nacht Participaes


At an Extraordinary Shareholders Meeting held on November 30, 2010, the Nacht Participaes S/A (Nacht), the Companys indirect controller, merged to Staldzene, on a corporate restricting operation, succeeding it in all its rights and obligations. As a result from this operation, Nacht becomes the Companys direct controlling shareholder with 39% of the total and voting capital stock.

Reduction of Capital from Staldzene and Nacht Participaes


On March 18, 2010, the shareholders of Staldzene, the Companys controlling shareholder, ratified the decrease in the capital stock of that company approved in the Extraordinary Shareholders Meeting held on December 4, 2009. The amount of the reduction was of R$13.3 million with the cancellation and involved the delivery of 6.307.457 shares issued by the Company, in a manner that was disproportional to the holdings of the said shareholders. Also on March 18, 2010, the shareholders of Nacht Participaes, controlling shareholder of Staldzene, ratified the decrease in the capital stock of that company approved in the Extraordinary Shareholders Meeting held on December 4, 2009. The amount of the reduction was of R$13.3 million with the cancellation and involved the delivery of 6.307.457 shares issued by the Company, in a manner that was disproportional to the holdings of the said 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 Mills total and voting capital was reduced in 6.7%, from 46.0% to 39.3%. In February 2011, Nacht Participaes S.A. reduced its capital stock, after capitalization of part of the accumulated profits and the legal reserve. Such capital reduction will be effected through the delivery of shares issued by the Company currently held by Nacht to some of its shareholders after the 60-day period provided by law to creditors opposition. On April 18, 2011, as a result of the capital reduction, the interest of Nacht on the voting and total capital stock of Mills will be reduced in 17.2%, from 39.0% to 21.8%, and the shareholders Jeroboam Investments LLC (Jeroboam), Andres Cristian Nacht (Cristian Nacht) and Jytte Kjellerup Nacht (Jytte Nacht) will hold a direct stockholding at Mills of 15.3%, 1.4% and 0.5%, respectively.
48

Primary and Secundary public 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 negotiated in the segment called Novo Mercado of BM&FBOVESPA on May 19, 2010. There was no stock issue of the Company by reason of the exercise of the option of supplementary batch.

Acquisition of 25% of Rohr S/A Estruturas Tubulares


On January from 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, 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 will enable 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.

Merger of GP Andaimes Sul Locadora Ltda


In August 1st, 2011, was approved, in Extraordinary Shareholders Meeting, the merger of GP Andaimes Sul Locadora Ltda (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 Stock


In July 27th, 2011 was approved, in Board of Directors Meeting, the increase of the Companys capital stock, 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. In September 23th, 2011 was approved, in Board of Directors Meeting, the increase of the Companys capital stock, 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.

49

In 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. 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.

Transfer of ownership from controlling shareholder


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

50

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.

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

51

7.

COMPANYS ACTIVITIES

52

7.1 Summary of Company and Subsidiary activities According to information released in 2010 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 58 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 2010, 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, (iii) to the Federal Governments low-income home building program (Minha Casa, Minha Vida), with on the amount of R$278 billion in 2011, included in PAC, (iv) to the massive investments needed for the World Cup of 2014 and the 2016 Olympics Games, estimated in R$ 132 billion; 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$ 1,601 billion in the industrial, infrastructural and residential construction sectors 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).
2008 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$) Net income (in thousands of R$) Net margin(1) Year ended December 31 2009 2010 146,210 35,995 25% 141,412 3,241 2% 154,270 39,882 26% 195,396 12,569 6%

110,189 20,678 19% 135,333 6,195 5%

24,691 1,633 7% 25,447 3,810 15%

62,177 17,364 28% 54,934 11,555 21%

105,151 26,041 25% 95,067 24,791 26%

53

________________________________

(1) Represents net income divided by net revenue of each division. (2) The Jahu acquisition was concluded in June 2008.

Heavy Construction Division With R$154.3 million of net revenue in 2010, the Company estimates, according to data published by the O Empreiteiro magazine in 2010, 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 2009 146,210 73,651 50.4%

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

2008 110,189 49,565 45.0%

2010 154,270 73,573 47.7%

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(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 Companybelieved 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 2010 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, 71% of net revenue in 2010, 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 29% of the total revenue of the Industrial Services division in 2010. 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 itsr reliability, consistent quality and award-winning safety performance. These qualifications have yielded high client renewal rates (90% in 2010), 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 Petrobras, Vale, Companhia Siderrgica Nacional, Gerdau, Braskem and Dow from Brasil. 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 the 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 believes that the main challenges faced by the Industrial Services division are upgrading the divisions operations to work in partnership with oil companies for drilling in the pre-salt strata and the expansion of the operations to the southern and northern regions of Brazil, due to the large projects
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which are expected to be implemented in such regions, including the construction of the oil platforms P55 and P-63, the implementation of part of the Cacimbas project for distillation of gas in the state of Rio Grande do Sul, and the construction of the Premium Petrochemical Refineries in the states of Maranho and Cear, as well as large mining projects in the state of Par, taking advantage of potential synergies across the other divisions. In 2010 the Company launched new Industrial Services branches, one in Rio Grande, in the state of Rio Grande do Sul, and another one in Recife, in the state of Pernambuco. The Company plans to launch in 2011 one more branch in Parauapebas, in the state of Par, given the business opportunities in the region. The chart below, presents the financial information for the Industrial Services Division on the indicated periods:
Year ended December 31 2009 141,412 20,815 14.7%

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

2008 135,333 19,123 14.1%

2010 195,396 26,120 13.4%

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(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 Divisions 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 Brookfield Incorporaes S.A., Cyrela Brazil Realty S.A., Desarrolladora Homex, S.A.B. de C.V., Gafisa S.A., MRV Engenharia e Participaes S.A., Odebrecht Realizaes Imobilirias, and PDG Realty S.A.

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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 and eight in 2010. The Company plans to launch seven more branches until 2013, three of which are planned for 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 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)

2008 24,691 11,127 45.1%

Year ended December 31 2009 62,177 31,846 51.2%

2010 105,151 43,874 41.7%

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(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 maganize in 2010. 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.

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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 2010 from Terex and Brazilian import statistic of 2010, there are currently 10,200 aerial platforms and 1,050 telescopic handlers in Brazil. In comparison, 560,000 aerial platforms and 161,000 telescopic handlers are available in the United States based on data 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 2009 54,394 31,338 57.6%

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

2008 25,447 11,439 45.0%

2010 95,067 50,956 53.6%

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(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
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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. 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.
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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 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
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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. 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
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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 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 deliver more speed in the external coating of buildings during construction or refurbishing
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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. 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 2008 Net Revenue % of Total Net Revenue Heavy Construction Division Industrial Services Divisions Jahu Division(1) Equipment Rental Division Events Division(2) Total 110,189 135,333 24,691 25,447 3,716 299,377 37% 46% 8% 9% 1% 100% Fiscal year ended December 31 2009 Net Revenue % of Total Net Revenue (in thousands of R$, except in percentage) 146,210 36% 141,412 62,177 54,394 404,193 35% 15% 13% 100% 2010 % of Total Net Revenue 28% 36% 19% 17% 100%

Net Revenue

154,270 195,396 105,151 95,067 549,884

________________________________ (1) The acquisition of Jahu was concluded in june 2008. (2) The Events Division was terminated in 2008.

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 2008 Net % of Total Income Net Income Heavy Construction Division 20,678 68% Fiscal year ended December 31 2009 2010 % of Total Net % of Total Net Net Income Income Net Income Income (in thousands of R$, except in percentage) 35,995 53% 39,882 39%

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Industrial Services Divisions Jahu Division(1) Equipment Rental Division Events Division(2) Total

6,195 1,633 3,810 (1,729) 30,588

20% 5% 12% (6%) 100%

3,241 17,364 11,788 68,388

5% 25% 17% 100%

12,569 26,041 24,791 103,283

12% 25% 24% 100%

________________________________ (1) The acquisition of Jahu was concluded in june 2008. (2) The Events Division was terminated in 2008.

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

a.

Characteristics of the production process

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

b.

Characteristics of the distribution process

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 2010. 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 that 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 operate. 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 Rohr (in which the Company is owner of 25% of its participation), SH Formas, Estub, Ulma, PASHAL, Doka e Peri.

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 RIP, NM Engenharia,
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Blasting, Rohr (in which the Company is owner of 25% of its participation), Isobrasil, Calorisol, SH Formas and Fast Engenharia.

Jahu Division Competition


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 Mecan, SH Formas, Ulma, Locguel, Doka and Peri.

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 Solaris, Locar, Bilden, Trimak, A Geradora and Brasif Rental.

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 payed 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, 2010, 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.
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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 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, 2010, 2009 and 2008, 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 additional 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.

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.

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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 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, 2010, 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, 2010, 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, 2010, 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. There are no relevant long-term relationships from the Company other than those listed in this form. 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 capital stock is comprised exclusively of common shares. The table below presents the Companys ownership structure, as of April 24, 2012, highlighting the amount of shares held by the Company, its main shareholders and its Directors:
Shareholders Nacht Participaes S.A. .................................................... Snow Petrel S.L. Capital Group International, Inc.(1) ..................................... Administrators ................................................................ Others ................................................................................ Total ................................................................................... Free Float (2) ...................................................... Share Ownership Shares (%) 27,421,713 21.7% 19,233,281 15.2% 7,032,185 5.6% 6,043,710 4.8% 66,421,757 52.7% 126,152,646 100 72,858,952 57.8%

________________ (1) According to information received officially by the Company and released to the CVM on April 20, 2010. (2) Considers all the shares issued by the Company, except for shares held by the Direct and indirect Controlling shareholders and administrators

The tables below show the share ownership of the Companys main shareholders until the, as well as indicate the holders of direct and indirect interests in the company, where such interests are equal to or greater than 5% from the total capital stock. The Nacht Participaes and Snow Petrel S.L. have their respectively divided capital exclusively in shares with voting rights.
Nacht Participaes S.A. Shareholders Andrs Cristian Nacht .......................................... ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Jytte Kjellerup Nacht ........................................... ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Others ................................................................ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Total .............................................................. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Snow Petrel S.L. Shareholder Malachite Limited, ............................................... ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Total .............................................................. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Malachite Limited Shareholders Nicolas Nacht ...................................................... ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Helen Anne Margaret Ahrens................................ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Others ................................................................ ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Total .............................................................. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Share Ownership Shares (%) 2,689,232 56.9 923,341 19.5 1,115,704 23.6 8,446,035 100.0 Share Ownership (%) 100.0 100.0 Share Ownership (%) 40.0 40.0 20.0 100.0

Nacht Participaes S/A, Andres Cristian Nacht and Jytte Kjellerup Nacht Nacht Participaes is a family-held corporation organized under the laws of Brazil, whose capital is integrally controlled by Mr. Andres Cristian Nacht, and his wife, Mrs. Jytte Kjellerup Nacht, and by other members from the Nacht family. Nacht Participaes registered office is located at Av. das Amricas, No. 500, Bloco 14, suites 108, 207 and 208, in the City of Rio de Janeiro, State of Rio de Janeiro. Mr. Andres Cristian Nacht is the Companys indirect controlling shareholder and has been part of the Companys management team since 1969, appointed as President Director from 1978 until 1998 and currently occupying the Chairman of the Companys board of directors. Mrs. Jytte Kjellerup Nacht is the wife of Mr. Andres Cristian Nacht, the other members of Nacht Participaes S.A. are also members of the Nacht family.
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Snow Petrel S, Malachite Limited, Nicolas Nacht and Helen Anne Margaret Ahrens 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 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 between Nacht Participaes S/A and Jeroboam Investments LLC 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 as the group controlling shareholder, (b) joint exercise of voting rights in each and any resolution pertaining to Mills, (c) Cristian 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. Capital Group International, Inc. The Capital Group International, Inc. is a fund manager founded in 1987, based in Los Angeles, California, United States. The funds managed by Capital Group International, Inc., on April 20th of 2010, had together, shares representing 5.6% of the total capital of the Company.

b.

subsidiaries and affiliates.

The Company does not have subsidiaries or affiliates.

c.

Mills shareholdings in companies in the group.

Not applicable, since the Company does not have subsidiaries or affiliates.

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.

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Nacht Participaes S.A. 21.7%

Snow Petrel L.L.C 15.2%

Capital Group International, Inc 5.6%

Administrators 4.8%

Others 52.7%

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 Corporate Event Other Description Operation Description

09/23/2011 Other Increase of Companys capital Was approved, on the Board of Directors Meeting held on September 23, 2011, the cancellation of 99,140 (ninety-nine thousand, one hundred and forty) 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.

Date of Operation Corporate Event Operation Description

08/01/2011 Merger In 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

07/27/2011
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Corporate Event Corporate Event Other Description Operation Description

Other Increase of Companys capital Was approved, on the Board of Directors Meeting held on July 27th,2011, the issuance of 128,287 (one hundred and twenty eight thousand and two hundred and eighty seven) common shares, book-entry shares, with no par value of the Company, within the authorized capital limit, in view of the exercise of stock option by a part of the beneficiaries of the Companys Stock Option Plan.

Date of Operation Corporate Event Operation Description

05/27/2011 Acquisition. 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 will enable 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 Operation Description

02/17/2011 Nacht Participaes S.A.s capital reduction 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 will be enable by the delivery of shares issued by Mills currently held by Nacht to some of its shareholders after the 60-day period provided by law to creditors opposition.

Date of Operation Corporate Event Operation Description

01/19/2011 Acquisition of corporate capital. On January from 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.
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With this strategic acquisition, the Company, expands 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 Capital from Staldzene Reduction from Staldzenes capital through the capital restitution 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 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 negotiated in the segment called Novo Mercado of BM&FBOVESPA on May 19, 2010. There was no stock issue of the Company by reason of the exercise of the option of supplementary batch.

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, 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

03/12/2010
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Corporate Event Description of Corporate Event Other Operations Description

Other. Increase of Capital from the Company and its Controller. By reason of the exercise of the stock option granted under the Special ex-CEO Plan, the shareholders of the Company and of Staldzene approved, on March 12, 2010, a stock issue of both companies in the amount of R$323.8 thousand, through the issue by the Company of 153,690 shares and 24,809,032 shares issued by Staldzene. The stock issue of the Company was fully subscribed by Staldzene, whereas the stock issue of Staldzene was fully subscribed by the beneficiary of the Special ex-CEO Plan.

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

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

Date of Operation Corporate Event Operations Description

08/31/2008 Incorporation. 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 was a provider of engineering solutions and shoring, scaffolding and access equipment for use in 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 its Jahu division. As a result of the acquisition of Kina and Jahu Indstria, it was registered a premium of R$42.3 million, reflecting the difference between the acquisition price and the book value of such companies. The Company believes
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such premium was justified based of the Companys 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.

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

77

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 part from 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 services. The Company also owns several fixed assets for its own use, consistent in 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:
Assets 2008(1) Accumulated Depreciation (576) (459) (94,990) (4,534) (7,721) (108,280) Year Ended December 31, 2009 Accumulated Cost Depreciation Net (em R$ mil) 8,433 (674) 7,759 584 (469) 115 375,414 (123,428) 251,986 4,878 (3,406) 1,472 9,587 (4,118) 5,469 398,896 (132,095) 266,801

Cost Buildings and Land Facilities Equipment IT Equipment Others Subtotal Construction in Progress Total
(1)

Net 7,738 50 225,774 2,211 42,739 278,512

Cost 8,433 1,089 632,208 6,840 17,949 666,519

2010 Accumulated Depreciation (774) (501) (162,978) (4,034) (4,753) 173,040

Net 7,659 588 469,230 2,806 13,196 493,479

8,314 509 320,764 6,745 50,460 386,792

7,592 394,384

(108,280)

7,592 286,104

9,187 408,083

(132,095)

9,187 275,988

57,695 724,214

(173,040)

57,695 551,174

Includes fixed assets owned by Jahu Indstria prior to the acquisition.

The Companys Facilities The Companys primarily facility needs, above all, are warehouses to safely and efficiently store the equipment used in the Companys operations. The Company believes that the location of the warehouses, which are spread across a significant cross-section of Brazil, is an important competitive advantage, as it is able to rapidly deploy its equipment to its clients at various locations. All of the facilities are free from liens and encumbrances. The table below shows the Companys main facilities:

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

Plot Size (square meters) 49,546 m2 49,620 m2 10,000 m2 7,500 m2 1,500 m2

Constructed Area (square meters) 9,237 m2 18,841 m2 480 m2 2,260 m2 910 m2

Status

End of Term of Lease 1/31/2018 10/1/2011 5/31/2012 12/10/2012

City

State

Localization Estrada do Guerengu n 1381, Taquara Rua Humberto de Campos, 271, Vila Yolanda Rodovia BA 523 km 7, Chcara Nossa Senhora de Ftima Setor S.A.A., Quadra 02, 550 Setor S.A.A., Quadra 02, 450

Owned Rented Rented Rented Rented

Rio de Janeiro Osasco So Francisco do Conde Braslia Braslia

RJ SP BA DF DF

78

Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Office/Warehouse Headquaters/Office Headquaters/Office Office Warehouse Office/Warehouse 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

6,975 m2

1,557 m2 4,377 m2

Rented Owned Rented Rented Rented Owned Rented Rented Rented

4/12/2015 12/31/2012 2/29/2012 7/31/2011 1/24/2015 7/1/2015 12/1/2014 10/29/2013 7/31/2011 1/11/2013 7/11/2011 2/28/2015 8/31/2015 10/27/2015 1/1/2016 11/1/2014 11/1/2013 1/1/2016 1/1/2016

Camaari Camaari Simes Filho Belo Horizonte Curitiba Rio de Janeiro Rio de Janeiro Marechal Deodoro Serra Rio de Janeiro Rio de Janeiro Porto Alegre Belo Horizonte Sumar Uberlndia Rio Grande Ribeiro Preto So Jos dos Campos Goinia Fortaleza Campinas Parauapebas Manaus Pernambuco

BA BA BA MG PR RJ RJ AL ES RJ RJ RS MG SP MG RS SP SP GO CE SP PA AM CE

Av. Concntrica, 137 Centro Av. Concntrica, s/n Centro DICA - Distrito Industrial do Calado, Quadra 5, Lote 1, CIA 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 Rua Lima Barros, 11 e 13 Vasco da Gama Rua Francisco Palheta, 8 e 38 Vasco da Gama 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

4,500 m2 5,257 m2 2,742 m2

1,286 m2 2,570 m2 1,583 m2 293 m2 216 m2 48 m2

760 m2 2,036 m2 801 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 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

1,200 m2 2,188 m2

Rented Rented

79

All facilities used by the Company, whether they are owned or leased from third parties, are free of liens and charges.

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 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 80 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.

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 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$8.4 million (as of December 31, 2011) (viii) market value of ownership according to stock price at the date of the fiscal year, when such stocks are traded on organised markets of securities: not applicable (ix) appreciation or depreciation of such ownership, over the last 3 fiscal years, according to the book value: not applicable. On January 19, 2011, the Company entered into a purchase and sale agreement to acquire 25% of the voting and total capital of Rohr for R$ 90 million. In September 2011, there was a rise in the stake held in Rohr to 27.47%, resulting from the repurchase by Rohr of 9% 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
81

(xi) Dividends received in the 3 last fiscal years: 2010 - R$2,035 thousand. 2009 Not applicable 2008 - 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

82

10.1

The management should comment on.

a.

Financial Status and general assets

The Directors of the Company intend 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 its clients specialized engineering services, providing creative and differentiated solutions to major projects of infrastructure, residential and industrial construction. The Companys customized engineering solutions include planning, design, technical supervision and providing temporary structures for civil construction, such as formwork, shoring and scaffolding. In the industrial services market, the Company offers access services, industrial painting, surface treatment and thermal insulation for both stages of construction and maintenance of major industrial plants. 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, financed with funds from the Programa de Acelerao do Crescimento-PAC from the Federal Government; (iii) the program to construction of housing for lowincome families from the Federal Government (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, including oil and gas and petrochemical sectors. The Company's revenues come mainly from rental of equipment and technical assistance services which accounted together 90% of Companys total net revenues which correspond to R$549.9 million in the fiscal year ended December 31, 2010. The Company recognizes revenue for services based on the stage of implementation of services performed to date-base balance, according to the overall percentage of services executed. The Directors of the Company believe 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 Directors of the Company believe 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 itsFinancial Condition and Results of Operations.
The Heavy Construction Division of the Company offers customized solutions to companies involved in major construction and infrastructure projects, while the Jahu Division of the Company is dedicated to providing services to residential and commercial building companies. Customers of the Industrial Services Division of the Company 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 and sale of powered devices to access, 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, 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. In addition, itsoperations 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 entered into by its company, (ii) interest rates, which affect its financial obligations, (iii) fluctuating prices of materials consumed in construction or fluctuating prices of maintenance of the equipment of the Company.
83

b.

Capital structure and hypotheses of redemption.

There is no chance of redemption of shares issued by the Company beyond the legally established.

c.

Financial commitments.

The Companys EBITDA for the year ended December 31st, 2010, was R$194.5 million and its financial expenses, net of financial revenue in the same period were R$5.6 million. Thus, EBITDA of 2010 presented a coverage ratio of 34.7 times net financial expenses of the period, meaning only its financial expenses which amounted to R$24,3 million in the year ended in December 31st, 2010 the coverage ratio would be 8.0 times. The Companys total indebtedness from loans and financing provided by financial institutions for the year ended December 31st, 2010, amounted to R$ 194.5 million, or, 0.68 times its EBITDA in 2010. The flow of payment of debt will take place in a period of ten years, of which R$46.7 million in less than one year, R$65.9 million from 1 to 3 years, R$14.5 million in a period from 3 to 5 years and 5.5 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. In addition, in December 31st, 2010 the Company had installment payments on its balance sheet in the amount of $ 15.1 million; they are subjected to monthly update the basic interest rate announced by the Monetary Policy Committee (COPOM) (Selic rate). The greatest amount of the payments of R$10.8 million, refers to the Tax Recovery Program (REFIS) with a maturity of 180 months. The lengthening of the partial payment 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 EBITDA and net financial expenses. 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.

Its investments in non-current assets and working capital are financed by its own cash generation and debt, particularly in working capital. For strategic operations, when necessary, the Company turns to its shareholders capital. In the year ended December 31st, 2010, the Company raised $ 411 million through initial public offering of shares issued.

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 its operations; Financing agreements; and Increases in its capital stock. The Companys main liquidity requirements are: Investments for the acquisition of new equipment and maintenance and repair of its existing inventory; Working capital needs; Investments in its facilities and its informational technology center, which are necessary to support its operations;
84

Investments in the improvement of processes and controls; Investments in training and occupational safety; and Distribution of dividends and payment of interest on stockholders equity. The Company believes that its existing resources and the cash flow to be generated by its operations, together 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, 2008, 2009 and 2010:
Yearly Interest Rate Loans and financings provided by financial institutions Loans and financings provided by financial institutions Leasing agreements entered into with financial institutions Total ............................................................................... CDI + 1.0% to 4.5% TJLP + 3.3% to 7.5% CDI + 1.0% to 5.4% 2008 5.0 18.6 9.4 33.0 As of December 31, 2009 2010 101.5 4.3 78.1 183.9

(in million of R$)


128.8 6.8 53.8 189.5

As of December 31st, 2010 its total indebtedness from loans and financing provided by financial institutions amounted to R$132.6 million, divided as follows: (i) R$46.7 million in short-term debt (35% of the total), of which R$27.7 million relates to leasing operations for the acquisition of the equipment owned by its Rental division, and (ii) R$85.9 million in long-term debt (65% of the total), of which R$45.3 million relates to leasing operations for the acquisition of the equipment owned by its Rental division. The debts above are denominated in reais.

Short Term Debt


As of December 31st, 2009, its short-term debt amounted to R$56.8 million, compared to R$47.4 million as of December 31, 2008, an increase of R$9.4 million or 19.8%. This increase was not due to a change in its debt profile, as its total debt decreased in relation to the outstanding balance recorded as of December 31st, 2008, but rather, was due to the reclassification of long-term debt as short-term debt due based on the maturity profile of its indebtedness, in addition to the short-term portion of the loan agreements the Company entered into during 2009. As of December 31st, 2010, its 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 18%. This reduction was not due to the utilization of the initial public offering funds to advance higher cost debts.

Long Term Debt


As of December 31st, 2009, its long-term debt amounted to R$127.1 million, compared to R$142.1 million as of December 31st, 2008, a decrease of R$14.9 million or 10.5%. This reduction was a result of its efforts to reduce its indebtedness through the application of part of its cash flows to pay principal and interest on existing debts. The aggregate amount of new loan agreements the Company entered into during 2009 was lower than its payments of principal and interest on existing debt, which amounted to R$30.2 million. As of December 31st, 2010, its 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%. This decrease was due to the utilization of the initial public offering funds to advance higher cost debts.
85

Relevant Financial Contracts


As of December 31st, 2010 Company's debt with financial institutions totaled R$41.9 million, of which the main debts are described below.

Ita Unibanco S.A.


CCB n 100108060006400. On June 20th, 2008, the Company issued a CCB in favor Ita Unibanco, in the amount of R$37.7 million, to help finance the acquisition of Kina and its wholly-owned subsidiary Jahu Indstria. The note includes customary events of default, and provides for the acceleration of the debt in the event of changes to its capital stock or the capital stock of its guarantor. In addition, the Company is required to meet certain financial ratios. Payments are due semi-annually with final maturity on June 26, 2014. As of December 31, 2010, the outstanding amount due under this CCB was R$24.1 million. Loan Agreement n. 1467616944. On January 28th, 2008, the Company entered into a loan agreement with Ita Unibanco, in the amount of R$6.5 million, with final maturity on January 2nd, 2013. The agreement includes customary events of default, such as acceleration of the debt, at the discretion of Ita Unibanco, in the event of its merger, spin-off, incorporation or corporate reorganization. As of December 31st, 2010, the outstanding balance of the loan was R$3.4 million.

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, with final maturity on April 13th, 2012. 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 us 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. As of December 31st, 2010, the outstanding amount under this CCB was R$1.7 million.

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 Issue Date Maturity Date 2013.04.20 2013.01.25 Original Value(1) 8.000 5.000 Outstanding as of December 31, 2009(1)

345.500.737 345.500.724
_________________________ (1) In Thousands of R$

27.05.2008 27.02.2008

4,1 2,3

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 repaid 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 its company, or on the occurrence of any event which may decrease its capacity to meet its obligations under the CCB. As of December 31, 2009, the outstanding amount under this CCB was R$5.0 million.

Leasing Agreements
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 31.10.2008 25.05.2009 12.03.2009 08.09.2008 20.03.2008 01.07.2008 10.01.2008 Contract binding Issue Date 19/12/2013 01/07/2014 04/04/2014 11/09/2013 20/03/2012 01/06/2012 10/01/2012

86

As of the date of this Reference Form, the Company are party to several leasing agreements with several financial entities, representing obligations of R$72.9 million in the aggregate as of December 31st, 2010. The Company entered into such agreements as lessee, with the purpose of leasing (or in certain cases purchasing) the equipment and other assets necessary for running its operations. Upon maturity of each leasing agreement, we have the option to return the equipment or assets to the respective lessor, or exercise an option to buy such equipment or asset. The amounts owed under these leasing agreements are repaid in monthly installments, subject to a minimum guaranteed payment corresponding to the lower amount for which the equipment or assets could be sold to a third-party. The table below shows the outstanding balance of its leasing agreements as of December 31st, 2010, broken down by lessor. These agreements bear interest in the range of CDI + 1.0% to 5.4% per year:
Lessor ABN Amro Real S.A. Alfa S.A. ................................................................ Bradesco S.A. ........................................................ Banco de Lage ....................................................... Dibens ................................................................... Banco do Brasil ...................................................... Banco Ita S.A. ...................................................... Rodobens S.A. ...................................................... Safra S.A. ............................................................. HSBC Bank Brasil S.A.............................................. Santander S.A. ....................................................... Total.................................................................. Outstanding Amount (in thousands of R$) 1,385 11,665 12,130 397 2,011 4,387 8,013 175 6,927 7,304 18,548 72,944

(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 the import operations of equipment, 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, 2010, the Company possessed purchase orders with foreign suppliers of equipment valued at approximately US$72.8 million (in 2009, these orders amounted to US$34 million; and in 2008, it amounted to US$2 million), all schedule for payment until February, 2012.

(iii) degree of subordination between the debts


Usually the Companys loans and financings are guaranteed by: (a) real estate; (b) Pledge of trade bills; (c) receivables; (d) pledge; (e) statutory lien; and (f) promissory notes. 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
87

credit. The Company believe that the clauses in force relating to the provision of guarantees does not significantly restrict the ability to contract new debt to meet its 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 its long-term financial instruments contain obligations relating to the maintenance of certain levels for certain 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), (ii) the ratio of net short-term debt (short-term debt minus cash equivalents) and total net debt, and (iii) the ratio between EBITDA and net financial expenses. The Company is in compliance with the required levels for the indicators. 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. The Company believe that the current provisions do 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, 2010, the Company had approximately R$170 million limit on leasing transactions with major financial institutions operating in Brazil, and the amount of R$79.2 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


VA(1) (%) 100% 37% 8% 45% 8% 1% 48% 52% Year ended December 31, VA(1) HA(2) (%) (%) 2010 VA(1) (%) 100% 28% 19% 36% 17% 46% 54% HA(2) (%) 36% 6% 69% 38% 75% 50% 26%

2008 Revenue of Products Sold e Services Provided Heavy Construction Division Jahu Division Industrial Services Division Equipment Rental Division Eventos 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 299.4 110.2 24.7 135.3 25.4 3.7 (143.8) 155.5

2009 404.2 146.2 62.2 141.4 54.4 (169.6) 234.6

(in millions of R$)


100% 36% 15% 35% 13% 42% 58% 35% 33% 152% 5% 114% 18% 51% 549.9 154.3 105.1 195.4 95.1 (254.8) 295.1

(84.7) 70.8 (20.5) 2.3 48.3 (17.7)

28% 24% 7% 1% 16% 6%

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

27% 31% 6% 0% 25% 8%

28% 78% 23% (59%) 110% 86%

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

27% 27% 4% 3% 26% 7% 19%

36% 17% (4%) 1884% 40% 17% 51%

30.6 10% 68.4 17% 124% 103.3 Net Income for the 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.

88

Year ended December 31st, 2010 compared with year ended December 31st, 2009 Revenue of Products Sold e Services Provided
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 comments below relating to variations between the results for the years ended December 31st, 2009 and 2010 refer only to net revenue, not to the gross revenue, while the later comments concerning the variations between the results for the years ended on December 31st, 2008 and 2009 refer to gross revenue, in according to the disclosure form adopted at the time of presentation of the results of such exercises. The following table shows its 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

VA (%)(1) 28% 19% 36% 17% 100%

HA (%) 6% 69% 38% 75% 36%

(2)

(in millions of R$)


146.2 62.2 141.4 54.4 404.2 36% 15% 35% 14% 100% 154.3 105.1 195.4 95.1 549.9

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 indicated.

In the year ended December 31st, 2010 its 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%. 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 6%, 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 for 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 3%, 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% 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 leasing has increased from R$23.5 million, or 40%, and the increase in volume helped to expand the equipment rent revenue in
89

R$28.8 million, while the combination of rental price and mix of equipment led to a reduction in equipment rental revenue in the amount of $ 5.3 million. Industrial Services Division Net revenues for the Industrial Services Division increased from R$41.4 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%, 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% of total net revenues, while maintenance services accounted for R$138.5 million, or 71% 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 13%, while maintenance services accounted for 87%. Equipment 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 75%, 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 infancy, has enabled the rapid uptake of this fleet. In the year ended December 31, 2010, 89% of net revenue of Equipment Rental Division was due to equipment rental, while the remaining 11% 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%, 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 its cost of goods sold and services rendered by nature in fiscal years ended December 31, 2009 and 2010.
Year ended December 31, 2009 Direct cost General of and constructio Administrati n and ve renting Expenses Total (83.1) (5.0) (54.5) (8.8) (137.6) (13.9) Year ended December 31, 2010 Direct cost of constructio General and n and Administrati renting ve Expenses Total Variation 2009-20101) Direct cost of constructio General and n and Administrati renting ve Expenses Total (39.1) (0.1) (25.4) (6.1) (64.6) (6.2)

(in millions of R$)


Labor ................................................................ Third-party Services ........................................... (122.3) (5.1) (80.0) (15.0) (202.2) (20.1)

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Freight .............................................................. Construction Material / Maintenance & Repair ....... Rent equipment ................................................. Rent others ....................................................... Travel ............................................................... Depreciation ...................................................... Amortization of intangible assets ......................... Asset impairment ............................................... Sales................................................................. Debtors Provision ............................................... Action Plan ........................................................ Update provisions .............................................. Profit sharing ..................................................... Other ................................................................

(6.4) (13.9) (13.7) (3.7) (4.4) (30.3) (0.3) (7.5) (1.2)

(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)

Total ................................................................ (169.6)


(1)

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

The table below shows its 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.
2009 x 2010 Var. (%) 11% 102% 40% 91% 44%

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

Year ended December 31, (%) (1) 2010 29% 12% 49% 9% 100% (80.7) (61.3) (169.3) (44.1) (355.4)

(%)

(1)

(2)

(in millions of R$, except percentage)


(72.6) (30.3) (120.6) (23.1) (246.5) 23% 17% 48% 12% 100%

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 (disregarding the effects of depreciation) increased by 51%, 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 its 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 labor item, which increased R$39.1 million, mainly influenced by the growth of Industrial Services Divisions revenue, which is intensive in manpower. The sale item, which represents the cost of equipment sold by the Company, had an increase of R$15.8 million, driven primarily by 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 48% 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, its 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%.

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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% in the year ended 31 December 2009 to 38% in the year ended 31 December 2010. Including the effects of depreciation, the same ratio increased from 42% in the year ended 31 December 2009 to 46% 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 36%. This increase was due primarily to the employment of additional labor which contributes to an increase of R$25.4 million. The Companys 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 its services and the strong geographic expansion, mainly from the Equipment 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%. 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%. The Company's bank debt, which was $ 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 its 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 17%. This increase was lower than in its profit before taxes due to dividend payments in the form of interest on capital. In the fiscal year ended December 31, 2010, the Company deducts income tax and social contribution the amount of R$8.6 million, due to the provisioning of interest on capital for distribution of part of the annual results, while in fiscal year ended December 31, 2009 this deduction totaled only R$1.9 million. Moreover, the effective rate of 2010 was 27% after adjustment of expenses not deductible, 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.

92

Comparison of Results of Operations for the Years Ended December 31, 2008 and 2009 Gross Revenue from Sales and Services Rendered
The table below sets forth its gross revenue from sales and services, after deductions for discounts and cancellations, generated by each of its divisions in the years ended December 31, 2008 and 2009:
2008 x 2009 Var. (%) 34% 151% 4% 115% 35%

2008

(1)

Year ended December 31, (%) (2) 2009 (1) 36% 8% 46% 8% 1% 100% 158.2 67.4 156.8 59.2 441.6

(%)

(2)

(3)

(in millions of R$, except percentage)


118.0 Heavy Construction Division ....................... 26.9 Jahu Division ............................................. 150.2 Industrial Services Division......................... 27.6 Rental Division .......................................... 4.0 Eventos Division ........................................ 326.7 Total ..................................................... ..................................
(1) (2) (3)

36% 15% 36% 13% 100%

Gross revenue from sales and services in the period Percentage share of division in our total gross sales and services in the period. Increase (reduction) of gross revenue from sales and services from one period to the other.

The Companys gross revenue from sales and services rendered, after deductions for discounts and cancellations, increased 35.2%, or R$114.9 million, from R$326.7 million in 2008 to R$441.6 million in 2009. This increase was primarily due to increases in revenues generated by the Heavy Construction, Jahu and Equipment Rental divisions, as the increase in revenues generated by the Industrial Services division was proportionally lower, as described below. Heavy Construction Division Gross revenue from sales and services rendered by the Heavy Construction division, after deductions for discounts and cancellations, increased 34.0%, or R$40.2 million, from R$118.0 million in 2008 to R$158.2 million in 2009. This increase was primarily due to higher equipment rental volumes and increases in the rental prices it charged. The Company acquired 8.5 million tons of equipment in 2008, and an additional 2.7 million tons in 2009, in order to meet the increasing demand for its products and services. Additionally, the average price of renting has increased 8%. The rest of the variation comes from revenues other than leasing, especially with assembly services and technical assistance services, which represented only 4.3% of total gross revenue of the Heavy Construction Division in 2008 and now represent 6.4% of gross revenue in 2009, due to more complex construction projects, in which the demand for these services tends to be higher, leading to an increase in gross revenue for these services from R$5.2 million in 2008 to R$10.7 million in 2009, representing an increase of 102.8%. Jahu Division Gross revenue from sales and services rendered by the Jahu division, after deductions for discounts and cancellations, increased 150.8%, or R$40.5 million, from R$26.9 million in 2008 to R$67.4 million in 2009. As a result of its acquisition of Jahu Indstria in June 2008, its results of operations have been included in its combined financial statements since July 1, 2008. Jahu divisions gross revenue from sales and services, after deductions for discounts and cancellations, in each of the six-month periods ended December 31, 2008, June 30, 2009, and December 31, 2009, showing a significant increase in the gross revenue generated by the Jahu division after the acquisition.

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Six-Month Period Ended December 31st, 2008 Gross revenue from sales and services June 30th, 2009 December 31st, 2009 (in millions of R$) 36.2

Comparative Analysis 12.31.2008 e 06.30.2009 e 06.30.2009 12.31.2009

26.9

31.2

16.2%

15.8%

In 2009, the Company introduced the use of NOE modular concrete formwork in the Jahu division, as well as the use of aluminum formwork for use in the Brazilian governments low-income housing program (Minha Casa, Minha Vida). The use of this equipment generated an additional R$4.0 million in revenue in the period (R$1.1 million from the rental of equipment and R$2.9 million from the sale of aluminum formwork). The remaining increase in revenues resulted primarily from investments the Company made in additional metal shoring structures following the acquisition of Jahu in order to meet the strong demand for its products and services during the period. The average volume of equipment rented by its clients increased 22.3%, from 12.7 thousand tons in 2008 to 15.6 thousand tons in 2009.

Industrial Services Division Gross revenue from sales and services rendered by the Industrial Services division, after deductions for discounts and cancellations, increased 4.4%, or R$6.6 million, from R$150.2 million in 2008 to R$156.8 million in 2009. The gross revenue generated by the division was adversely affected by a significant reduction in revenue from contracts for maintenance services to sectors other than oil and gas (which represented 71.0% of the divisions gross revenue during 2008). Such maintenance revenue dropped by 31.0%, from R$106.5 million in 2008 to R$73.2 million in 2009, in particular due to the lower volume of services rendered to the metallurgy and pulp and paper industries, two sectors that were severely impacted by the global financial crisis at the end of 2008. The increase in revenue in 2009 was primarily due to revenue generated for additional services rendered to the oil and gas sector, which increased by 76.0%, from R$32.4 million in 2008 to R$57.1 million in 2009, as well as revenue generated from the provision of services connected to the assembly of industrial plants other than oil and gas (such as the new plant of Companhia Siderrgica do Atlntico, in the state of Rio de Janeiro), which increased by 137.0 %, from R$11.2 million in 2008 to R$26.5 million in 2009. Finally, revenue generated from industrial painting and insulation services amounted to R$13.2 million in 2008 and R$18.9 million in 2009, an increase of 42.2% compared to 2008. Rental Division Gross revenue from sales and services in the Rental division, after deductions for discounts and cancellations, increased (in only its second year of operation) 114.8%, or R$31.6 million, from R$27.6 million in 2008 to R$59.2 million in 2009. The increase in revenues in this division was primarily due to its acquisition of new equipment to meet market demand, reaching a total of 723 units as of December 31, 2009. The expansion in the market for the equipment offered by the Rental division, which is still in developmental states, allowed us to rapidly deploy this new equipment in its operations.

Taxes on Sales and Services


Taxes on sales and services increased 37.0%, or R$10.1 million, from R$27.3 million in 2008 to R$37.4 million in 2009. This increase is consistent with the 35.2% growth in 2009 in its gross revenue from sales and services after deductions for discounts and cancellations. The difference between the percentage increase in such gross revenue, relative to the percentage increase in the value of taxes sales and services is primarily a result of export sales of structures for long-term projects to international clients; as such sales are exempt from taxation. The sale of these structures, both abroad and in Brazil, accounted for 5.2% and 6.1% of the Heavy Construction divisions gross revenue from sales and services, after deductions for discounts and cancellations, in 2009 and 2008, respectively. Although approximately 85.0% of such structures sold in 2008 were acquired by international clients, this percentage dropped to 22.0% in 2009 due to the global financial crisis. As a result, taxes on sales and services represented 7.6%
94

of the Heavy Construction divisions gross revenue from sales and services, after deductions for discounts and cancellations, in 2009, compared to 6.7% in 2008. The table below shows the taxes due for each of its divisions, as a percentage of their gross revenue from sales and services, after deductions for discounts and cancellations, for the years ended December 31, 2008 and 2009:
2008 x 2009 Var. (%)(2) 53% 139% 3% 127% 37%

2008

Year ended December 31, (%) (1) 2009 7% 8% 10% 8% 7% 8% (12.0) (5.2) (15.4) (4.8) (37.4)

(%)

(1)

(in millions of R$, except percentage)


Heavy Construction Division ....................... (7.9) Jahu Division ............................................. (2.2) Industrial Services Division......................... (14.9) Rental Division .......................................... (2.1) Eventos Division ........................................ (0.3) Total ..................................................... .................................. (27.3)
(1) (2)

8% 8% 10% 8% 9%

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

Cost of Products Sold and Services Rendered


The table below shows the costs of products sold and services rendered by each of its divisions for the years ended December 31, 2008 and 2009. The information provided in this table does not reflect the effects of depreciation on such costs.
2008 x 2009 Var. (%) 28% 4% 103% 10%

2008

Year ended December 31, (%) (1) 2009 (33.4) (2.4) (96.5) (6.9) (139.2)

(%)

(1)

(2)

(in millions of R$, except percentage)


Heavy Construction Division ....................... (26.1) 21% Jahu Division ............................................. Industrial Services Division......................... (92.7) 73% Rental Division .......................................... (3.4) 3% Eventos Division ........................................ (4.0) 3% Total ..................................................... .................................. 100% (126.2)
(1) (2)

24% 2% 69% 5% 100%

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

The table below shows the effects of depreciation on the results of each of its divisions for the years ended December 31, 2008 and 2009.
2008 x 2009 Var. (%) 54% 158% 37% 132% 72%

2008

Year ended December 31, (%) (1) 2009 (12.8) (3.1) (6.2) (8.3) (30.3)

(%)

(1)

(2)

(in millions of R$, except percentage)


Heavy Construction Division ....................... (8.3) 47% Jahu Division ............................................. (1.2) 7% Industrial Services Division......................... (4.5) 26% Rental Division .......................................... (3.6) 20% Eventos Division ........................................ (0.1) Total ..................................................... .................................. 100% (17.6)
(1) (2)

42% 10% 20% 27% 100%

Percentage share of the division of the total depreciation. Percentage increase (decrease) in depreciation amounts in 2009 relative to 2008.

95

Cost of products sold and services rendered (disregarding the effects of depreciation) increased by 10.3%, or R$13.1 million, from R$126.2 million in 2008 to R$139.3 million in 2009. This increase was not as significant as the 35.2% increase recorded in its revenues in 2009, mainly due to (1) the increase in the share of cost of products sold and services rendered of the Heavy Construction, Jahu and Equipment Rental divisions to 64.5% in 2009 compared to 52.8% in 2008, as these divisions have lower variable costs, and (2) the increase in costs of the Heavy Construction, Jahu and Equipment Rental divisions below increase in revenues. The depreciation of assets used in the render of services increased 72.2% in face of the high investments made in 2008, from R$17.6 million in 2008 to R$30.3 million in 2009, maintained the average depreciation period of 10 years. Considering the depreciation costs, its cost of goods sold and services rendered totaled R$169.6 million in 2009 compared with R$143.8 million in 2008, representing a growth of 17.9%. As a result of the factors discussed above, cost of products sold and services rendered, excluding the effect of depreciation, represented 34.5% of its net operating income in 2009, compared to 42.2% in 2008. Including the effects of depreciation, cost of products sold and services rendered represented 42.0% of its net operating income in 2009, compared to 48.0% in 2008.

Gross Profit
Gross profit increased 50.8% to R$234.6 million in 2009 from R$155.5 million in 2008. This increase surpassed the 35.2% increase in its net revenue in 2009 for the reasons described above. In 2009, its gross profit represented 58.0% of its net revenue, compared to 52.0% in 2008.

General, Administrative and Operating Expenses


The Companys general, administrative and operating expenses increased 28.4%, or R$24.1 million, from R$84.7 million in 2008 to R$108.8 million in 2009. This increase was due primarily to the employment of additional labor to meet an increase in demand for its services. The Companys total number of employees increased from 3,090 at the end of 2008 to 3,537 at the end of 2009, representing an increase in headcount of 14.5%, and a payroll increase of 5.0% as a result of a salary increase tied to new collective bargaining agreements. In addition, its financial statements for the year ended December 31, 2009 include all general, administrative and operating expenses incurred by its Jahu division in 2009, compared to only six months of operations in 2008. The Companys general, administrative and operating expenses represented 26.9% of its net operating income in 2009, a decrease compared to 2008 when it represented 28.3%. The table below provides a breakdown of the general, administrative and operating expenses incurred by each of its divisions, in absolute terms and as a percentage of its total general, administrative and operating expenses and net revenues, for the years ended December 31, 2008 and 2009:
Year ended December 31, 2008 Expenses (1) % Total 41% 16% 28% 13% 2% 100%
(2)

2009 % Net Revenue (3) 32% 55% 18% 42% 39% 28% Expenses (1) (39.7) (28.1) (24.5) (16.4) (108.8) % Total 36% 26% 23% 15% 100%
(2)

% Net Revenue (3) 27% 45% 17% 30% 27%

Heavy Construction Division ....................... (34.9) Jahu Division ............................................. (13.6) Industrial Services Division ......................... (23.9) Rental Division ........................................... (10.8) Eventos Division ........................................ (1.4) Total ..................................................... (84.7)

(in millions of R$, except percentage)

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(1) (2) (3)

Divisions total general, administrative and operating expenses. Participation in operating expenses, general and administrative division in our total operating expenses. general and administrative. Percentage of operating expenses. general and administrative of the division in relation to net revenues generated by the division itself.

Financial Results
The Companys financial expenses, net of its financial revenue, increased 33.4% from R$18.3 million in 2008 to R$24.4 million in 2009. Its financial indebtedness decreased from R$189.5 million at December 31, 2008 to R$183.9 million at December 31, 2009. However, its average total indebtedness increased from R$129.8 million for the year ended 2008 to R$187.8 million for the year ended 2009. The increase in its average total indebtedness was partially offset by a decrease in the interest rates charged in the Brazilian financial markets during 2009, directly affecting its debt service requirements.

Income Tax and Social Contribution


The Companys expenses for income tax and social contributions increased by 86.5%, or R$15.3 million, from R$17.7 million in 2008 to R$33.0 million in 2009. This increase was less than the increase in its profit before taxes, due to the offsetting effect of tax credits in the amount R$1.8 million during 2008, as a result of the merger of Mills Andaimes Tubulares do Brasil S.A. into its company. The Companys effective income tax and social contribution rate in 2008 was 31.9% (as a result of tax credits amounting to R$4.3 million, which had been offset in full by the end of 2008), assuming the offsetting effect of tax credits mentioned above is disregarded and its results are adjusted to reflect non-deductible expenses relating to its stock option plans. In 2009, the Company deducted R$1.9 million from its income tax and social contribution, as the Company made provisions to cover the payment of interest on stockholders equity. In 2008, the distribution of part of its results to its shareholders was carried out through the payment of dividends only, which are not deductible expenses for tax purposes. The Companys effective income tax and social contribution rate for 2009 was 33.1%, after adjustments to exclude expenses that are not deductible for tax purposes.

Net Income
The Companys net income increased by 123.6%, or R$37.8 million, from R$30.6 million in 2008 to R$68.4 million in 2009, for the reasons described above. DISCUSSION AND ANALYSIS OF BALANCE SHEET

97

2008 Assets Current Cash and cash equivalents Marketable securities Trade accounts receivable Inventories Recoverable taxes Prepaid expenses Other assets Total Current Non-current Trade accounts receivable Recoverable taxes Deferred taxes Judicial deposits 1.8 51.5 0.5 6.6 1.1 1.7 63.2

VA (%)

2009

Year Ended December, 31 VA (%) HA (%) 2010

VA (%)

HA (%)

(in millions of R$)


0% 0% 14% 0% 2% 0% 0% 17% 1.6 71.5 1.4 25.7 0.2 4.1 104.5 0% 0% 16% 0% 6% 0% 1% 24% (10)% 39% 204% 289% (80)% 134% 65% 6.2 136.1 122.1 5.6 26.2 0.3 11.3 307.9 1% 15% 13% 1% 3% 0% 1% 33% 293% 100% 71% 307% 2% 43% 180% 195%

5.2 0.2 10.4 6.5 22.3 247.0 39.1 286.1

1% 0% 3% 2% 6% 66% 11% 77% 83%

4.4 0.2 10.0 6.0 20.6 276.0 39.3 315.3 335.8

1% 0% 2% 1% 5% 63% 9% 72% 76%

(15)% 0% (3)% (9)% (8)% 12% 0% 10% 9%

3.8 3.9 8.1 7.3 23.1 551.2 41.9 593.1 616.2

0% 0% 1% 1% 3% 60% 5% 64% 67%

(14)% 2179% (20)% 23% 12% 100% 7% 88% 83% 110%

Property, plant and equipment Intangible assets

Total Non-current

308.4

371.6 100% 440.3 100% 18% 924.1 100% Total Assets (1) Vertical analysis, which is a percentage of total liability. (2) Horizontal analysis, which is the percentage of variation in the income statement accounts between fiscal years indicated. Liabilities Current Suppliers Loans and financing Salaries and social charges Income tax and social contribution Tax recovery program (REFIS) Taxes payable Profit-sharing payable Proposed dividends Other liabilities Total Current Non-current Loans and financing Provision for contingency Taxes payable Deferred Tax recovery program (REFIS) Taxes payable stock options Other liabilities Total Non-current Stockholders' equity Capital Revenue reserves Capital reserves Equity adjustment Total stockholders' equity 13.6 47.4 13.2 2.5 3.7 8.5 7.5 0.1 96.5 4% 13% 4% 0% 1% 1% 2% 2% 0% 26% 11.7 56.8 14.7 0.1 0.8 4.0 13.8 16.2 1.3 119.4 3% 13% 3% 0% 0% 1% 3% 4% 0% 27% -14% 20% 12% (69)% 10% 62% 117% 763% 24% 32.7 46.7 21.3 0.7 4.4 17.5 28.1 9.4 160.8 4% 5% 2% 0% 0% 0% 2% 3% 1% 17%

180% (18)% 44% (100)% (9)% 8% 27% 73% 650% 34%

142.1 22.3 0.6 0.4 165.4

38% 6% 0% 0% 45%

127.1 8.5 0.4 11.0 0.6 0.6 148.2

29% 2% 0% 0% 3% 0% 0% 34%

(11)% (62)% (40)% 41% (10)%

85.9 11.1 10.0 1.0 108.2

9% 1% 1% 0% 12%

(32)% 31% (9)% 76% (27)%

80.5 27.3 1.8 109.6

22% 7% 0% 29%

80.7 86.2 5.7 172.6

18% 20% 1% 39%

0% 216% 222% -58%

525.1 145.2 (8.2) (7.0) 655.2

57% 6% 1% 1% 71%

551% 68% (222)% 279% 110%

Total liabilities and stockholders' 371.6 100.0% 440.3 100% 18% 924.1 100% equity (1) Vertical analysis, which is a percentage of total liability. (2) Horizontal analysis, which is the percentage of variation in the income statement accounts between fiscal years indicated.

Year ended December 31, 2010 compared to year ended December 31, 2009 Current Assets
The Companys current assets increased from R$104.5 million at December 31, 2009 to R$307.9 million at December 31, 2010, an increase of R$203.5 million or 195%. The main reasons for such increase were:
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an increase of R$140.8 million in cash, cash equivalents and marketable securities due to proceeds from the primary public offering of shares of the Company held on April 2010; increase of R$50.6 million in its receivable, reflecting an increase in its sales; 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; Non-current Assets The Companys non-current assets of R$20.6 million at December 31, 2009 were increased to R$23.1 million at December 31, 2010 an increase of R$2.5 million or 12%. The main changes in its non-current 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 account judicial deposits 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 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 at December 31, 2009 to R$551.2 million at December 31, 2010, an increase of R$275.2 million, or 100%. The increase in this category, plus depreciation and low, reflecting the investment the company has aimed to meet increased customer demand.

Intangible assets
The balance of its intangible assets increased from R$39.3 million at December 31, 2009 to R$41.9 million at 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 at December 31, 2009, to R$160.8 million at 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, the policy of distributing to shareholders 25% of these results was maintained; 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;
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Increase of R$8.1 million in its accounts of 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 its account of 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; 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 $ 17.2 million. 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 at December 31, 2009 to R$655.2 million at 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.

Year ended December 31, 2009 compared to year ended December 31, 2008 Current Assets
The Companys current assets increased from R$63.2 million at December 31, 2008 to R$104.5 million at December 31, 2009, an increase of R$41.3 million or 65.4%. The main reasons for such increase were: Increase of R$20.0 million. or 38.7% in its receivable, reflecting an increase in its sales; Increase of R$19.1 million or 289.4% in its taxes recoverable which includes the withholding of Social Security (INSS) on its service invoices for labor to be offset against this tax payments and other tax credits is entitled to use the occasion of the payments due. This variation is partly explained by an increase of R$14.3 million of Social Integration Program (PIS) and Social Security Financing Contribution (COFINS) on equipment purchases to permanent assets that had been credited until December 31, 2009 for purposes of calculating non-cumulative at the same rate of depreciation accounting. As Brazilian law provides that these credits may be taken in terms of between 12 and 48 months depending on the date of acquisition and type of good the Company improved the corresponding credit so the Company can begin to amortize it against future payments of these taxes. The remaining variation is explained by the calculation of credits from income tax and social contribution on net income for 2009 these credits to be used in fiscal 2010.

Long-term Assets
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Its long-term assets of R$22.3 million at December 31, 2008 were reduced to R$20.6 million at December 31, 2009 a decrease of R$1.7 million or 7.6%. The main changes in its long-term assets were: Reduction in its long-term assets accounts receivable in 0.8 million receipts for the sale of equipment of Events Accounting for deferred taxes under the heading of a tax credit of R$6.8 million previously owned by Itapo Participaes Ltda due to its incorporation by us which is being amortized monthly showing a balance on December 31, 2009 of R$5.4 million; Reduction of deferred tax account by the accounting from year 2009 values corresponding to the income tax and social contribution on the remaining portion of goodwill on acquisition of Jahu Indstria e Comrcio Ltda whose balance liabilities on December 31, 2009 was R$2.9 million; Reduction of deferred tax item due to a reduction of contingent and deferred taxes on them for R$3.9 million. Decrease of R$0.6 million or 8.7% in its judicial deposits balance especially in the action from Jahu Industria e Comercio Ltda questioning the increase in PIS and COFINS due to additional provision;

Permanent Assets
The permanent assets group of accounts is the most important of its balance sheet, representing on December 31, 2008 and 2009, respectively, 77.0% and 71.6% of its total assets. Its permanent assets increased from R$286.1 million at December 31, 2008 to R$315.3 million at December 31, 2009, an increase of R$29.2 million, or 10.2%. The reasons for this increase are explained in the following account by account: Investments The balance on its account equity on 31 December 2008, equity securities representing in value not significant, it was downloaded in fiscal year 2009, for not having a recoverable value PPE Property, Plant and Equipment The Companys PPE at December 31, 2009 totaled R$276.0 million compared with R$247.0 million at December 31, 2008 an increase of R$29.0 million or 11.8%. The increase in this category, plus depreciation and low, reflects the investment of R$73.5 million made in fiscal 2009 with an increase in the availability of its equipment in order to meet the increased demand from its customers. Additionally, in 2008 the Company acquired the warehouse that previously were renting in the neighborhood of Jacarepagua, in the city of Rio de Janeiro, whose purchase price was R$7.5 million. The growth of its property, between December 31, 2008 and 2009 was modest compared with growth between 31 December 2007 and 2008, from 210.8%, and reflects its more conservative stance on the global financial crisis. Intangible assets The balance of its intangible assets increased from R$39.1 million, on December 31, 2008, to R$39.3 million, on December 31, 2009, due mostly the recognition of goodwill recorded on acquisition of Kina Participaes Ltda. and Jahu Indstria e Comrcio Ltda which remained unchanged during the period, the difference being represented by investments in the acquisition of software. Under accounting standards in force, goodwill recorded in this acquisition is no longer amortized in the accounts, but only for tax purposes, subject only to tests of impairment.

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Current liabilities
The Companys current liabilities increased from R$96.5 million, on December 31, 2008, to R$119.4 million at December 31, 2009, an increase of R$22.9 million, or 23.7%. The main factors that led to this change were: Decrease of R$1.9 million or 13.8% in its short-term liabilities to suppliers reflecting the decreased volume of its investments in 2009; Increase of 19.8%, or $ 9.4 million, in its short-term loans and financing, without changing the profile of its debt, due to the financial update of the values transferred from the corresponding long-term, plus the current portion of borrowings in fiscal 2009; Increase of R$1.5 million, or 11.9%, in its account of salaries and social charges payable, due to the increase in payroll due to the higher number of employees necessary to accommodate the increased turnover; Decrease of R$2.4 million, or 97.1%, in its account of income tax and social contribution payable due to recognition in December 2009 for interest expense of capital spending and tax installment due for inclusion in Tax Recovery Program (REFIS) part of the contingency reserve, with values of respectively R$5.5 million and R$14.1 million, reducing taxes to pay 34% of these values, being part of this credit is on account of taxes recoverable in the current assets; Increase of R$1.8 million, or 50.7%, in its account of taxes payable, including sales taxes payable, taxes withheld from third parties and payment of taxes, due to (i) short-term portion of installment due to the inclusion of contingency REFIS above the value of R$0.8 million, (ii) R$ 0.6 million due to withholding taxes on interest on shareholders equity, to be collected in January 2010, and (iii) increase in company revenues. Increase of R$5.3 million, or 62.2%, in its profit sharing payable account due to the increase in net profit in fiscal 2009 compared to 2008; Increase of R$8.1 million, or 107.7%, in dividends and interest on shareholders equity payable due to the increase in net profit in 2009 compared to 2008, the policy of distributing to shareholders 25% of these results was maintained; Increase of R$1.1 million in its accounts of other current liabilities, mainly due to an increase in advances from customers.

Long-term liabilities
The Companys long-term liabilities decreased from R$165.4 million at December 31, 2008 to R$148.2 million at December 31, 2009, a decrease of R$17.2 million, or 10.4%. The main factors that led to this change were: Decrease of R$14.9 million, or 10.5% in its long-term loans and financing account, aiming to reduce the level of its debt in exercise, with total funding of new loans in 2009 under the total amortization payments and financial charges in the year; Decrease of R$13.8 million, or 61.8%, in its account of provision for contingencies, mainly due to lower provision for contingency to compensate PIS and COFINS on rental income, and the inclusion of it in REFIS, in view of adverse decisions in higher courts in similar cases; Increase of R$11 million in its long-term taxes payable, due to the inclusion of splitting the contingency to compensate PIS and COFINS on receipts above;

Stockholders' equity

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The Companys Stockholders' equity increased from R$109.6 million at December 31, 2008 to R$172.6 million at December 31, 2009, an increase of R$63.0 million, or 57.5%. The reasons for this increase were mainly the growth of net income minus dividends

CASH FLOW
2008 Cash flow from operating activities ................................................................... Cash flow from investment activities ................................................................. Cash flow from (used in) financing activities ..................................................... Increase (decrease) in liquidity......................................................................... Years ended December 31, 2009 2010

47.2 (228.8) 181.7 0.1

(in millions of R$)


89.7 (71.5) (18.4) (0.2)

121.6 (461.8) 344.8 4.6

Cash Flow from Operating Activities


As discussed above, its operating results improved significantly between 2008 and 2010. As a result, its cash flow from operating activities increased from R$47.2 million in 2008 to R$89.7 million in 2007, and R$121.6 million in 2010, an increase of 90% and 36% in 2009 and 2010 from the respective prior years. These increases were driven in large part by the investments the Company carried out, as such investments enabled us to meet increasing market demand and increase its revenues significantly, gain economies of scale and, consequently, improve its margins.

Cash Flow from Investment Activities


The Companys gross investments in fixed assets during the years ended December 31, 2008, 2009 and 2010 amounted to R$175.6 million, R$76.4 million and R$348.5 million, respectively. In 2008, in addition to increasing investments made in the Heavy Construction and Industrial Services divisions, the Company applied R$ 61.1 million to the establishment of the Rental division and the acquisition of Jahu. Investments in 2009 decreased R$99.2 million compared to 2008, or 56.5%, as a result of the global financial crisis. 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.

The table below shows the investments made by its company in each of 2008, 2009 and 2010:

2008 Gross investments, before PIS and COFINS credits ............................................ Acquisition of Jahu Indstria ............................................................................ Total Gross investments ................................................................................... PIS and COFINS credits ................................................................................... Net investments ..............................................................................................

Year Ended December, 31 2009 2010

(175.6) (60.1) (235.7) 4.0 (231.7)

(in millions of R$)


(76.4) (76.4) 14.5 (61.9)

(348.5) (348.5) 19.4 (329.1)

Cash Flow from Financing Activities


The Companys cash flow from financing activities includes new financing agreements, the amortization of the principal and payment of interest on existing loans, increases in its capital stock, and dividend distributions. In view of favorable market conditions prevailing until mid-2008, both with respect to market interest rates and maturity dates, the Company entered into additional financing agreements in 2008 for loans in the aggregate amount of R$162.4 million. In 2009, however, due to less favorable credit conditions prevailing during the first half of the year, the Company were highly selective in its new
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operations and entered into financing agreements in the amount of only R$31.9 million. In addition, the Company paid a total of R$62.1 million principal and interest on existing loans in 2009. In 2010, the Company completed its Initial Public Offering which would have generated net proceeds of R$411 million and allowed us to expand its investments across all divisions to meet the growing demand in the markets which the Company serve and to liquidate part of its more expensive debt. The Company are committed to maintaining its total indebtedness at manageable levels in relation to its cash flows, both in terms of total value and maturity dates. 10.2 Operating and financial result

a.

Results of the Companys operations, in particular:

(i) Description of important components of revenue Net Revenue from Sales and Services
The Companys 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 its net revenue for the periods indicated:

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

Year ended December 31, 2008 2009 2010 62.2% 64.5% 70.0% 6.7% 3.2% 3.1% 27.5% 30.5% 25.7% 3.5% 1.8% 1.2%

(ii) Factors that affected materially operational outcomes Cost of Products Sold and Services Rendered
Its cost of products sold and services rendered relates to costs for implementing the projects in which the Company are involved, including (i) labor costs for assembly and disassembly of equipment rented to its clients when such tasks are carried out by us; (ii) cost of equipment rented from third-parties, when the Company does not have all equipment on-hand to meet client demand; (iii) cost of materials used in the provision of its services, which include individual safety equipment, wood, paint and insulation 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 83.4%, 77.9% and 79.9% of its principal costs of sales and services rendered in the years ended December 31, 2008, 2009 and 2010, respectively. In addition, its cost of products sold and services rendered also comprises (1) costs deriving from the sale of new equipment, (2) depreciation of equipment rented and (3) cost of used rental equipment sold. The cost of products sold and services rendered by its Heavy Construction, Jahu and Equipment Rental divisions tends to grow at a lower rate than their net sales, as part of the cost of products sold and services rendered by these divisions includes the cost of technical personnel, which is a fixed cost for these divisions. On the other hand, the services rendered by its Industrial Services division are more labor-intensive than the services rendered by its other divisions. As a result, costs for this division tend to increase (or decrease) in line with variations in the revenue generated by the division.

General, Administrative and Operating Expenses


The Companys main general, administrative and operating expenses relate to personnel-related expenses, in particular the payment of salaries, benefits and social security contributions related to its project teams and commercial engineers, who are responsible for the management and supervision of each of its projects. The remaining expenses in this category refer to travel and related expenses and
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communication expenses. 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 54.8%, 46.2% and 47.8% of its total general, administrative and operating expenses during the years ended December 31, 2008, 2009 and 2010, respectively. Other material general, administrative and operating expenses include: (i) expenses relating to equipment storage, (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% and 9%, respectively.

b. Changes attributable to changes in prices, volume changes and introduction of new products and services.
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 renovation or closing of new contracts, reflecting the past inflation. As regards to the exchange rate, there is no correlation to its revenue. The revenue variations over the past three years are the result of price increases above inflation, given favorable market conditions, increased volume of rented equipment and, for the Jahu Division, as a consequence of the introduction of modular concrete forms for the program Minha Casa Minha Vida.

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 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

In 2007, the Company permanently suspended the operations of its Events division, as the Company did not consider it sufficiently profitable. However, the results of residual operations, including with respect to
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the performance of obligations under agreements in force at the time of suspension of operations of its Events division, are reflected in its combined financial statements for the year ended December 31, 2008. As a result of this decision, the net revenues of this Division in 2008 were R$ 3.7 million when it ended. The Division had a negative EBITDA of R$1.7 million in 2008 on account of final demobilization expenditures. On the other side, from the year 2009, the discontinuation of the division, took out a focus of a business that had shown a profit after depreciation close to zero for a few years.

b.

Constitution, acquisition or divestiture of shareholdings

Acquisition of 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 was a provider of engineering solutions and shoring, scaffolding and access equipment for use in residential and commercial construction projects. The results of operations of Kina and Jahu Indstria have been included in its combined financial statements from July 1, 2008. Kina and Jahu Indstria were merged into its company on August 30, 2008, and established as its Jahu division.

Acquisition of interest in Rohr S/A Estruturas Tubulares


On January 19, 2010, Mills Estruturas e Servios de Engenharia S.A. (Mills) entered into a purchase and sale agreement to acquire 25% of the voting and total capital of Rohr S/A Estrutura Tubulares (Rohr) for R$ 90 million, paid on February 8, 2011. Rohr has not yet published its financial statements for the year ended December 31, 2010, and it was therefore not possible to determine the probable goodwill on the operation. 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. This strategic acquisition will enable Mills 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.

Merger of GP Andaimes Sul Locadora Ltda


In August 1st, 2011, was approved, in Extraordinary Shareholders Meeting, the merger of GP Andaimes Sul Locadora Ltda (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)
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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

Law No. 11,638 was enacted on December 28, 2007, and altered by Law No. 11.941, of May 27, 2008, amending and introducing new provisions to Brazilian Corporation Law. The adoption of this law is mandatory for annual financial statements for years ended December 1, 2008 and applicable to all entities incorporated in the form of corporations, including listed companies. The main purpose of this law was to amend the Brazilian Corporation Law to allow the process of convergence of the accounting practices adopted in Brazil with those included in the International Financial Reporting Standards issued by the International Accounting Standards Board (IASB) and allow new accounting rules and procedures are dispatched by regulators and by the CVM in accordance with international accounting standards. The changes in the Brazilian Corporation Law had the following principal impacts on the financial statements of the Company: (i) Financial instrumentsthe Company contracted derivative financial instruments in order to protect transactions carried out in foreign currency. The derivative financial instruments were recognized initially by their fair value; transaction costs, when directly attributable, were recognized in the result of the year. (ii) Present value adjustmentcertain short and long-term accounts receivable were adjusted to present value, based on specific interest rates that reflect the nature of these assets considering the term, risk, currency and prefixed receipt condition, based on the initial balance of the transition date as permitted by the Brazilian Accounting Pronouncements Committee (CPC) Technical Pronouncement 13First-time Adoption of Law No. 11,638/07 and MP No. 449/08. The effects of the present value adjustments arising from the first-time adoption of Law No. 11,638 and MP No. 449/08 were charged to accumulated profit or loss, and those related to transactions carried out after this date with a corresponding entry to the result for the year. (iii) Financial leasethe assets acquired through a financial lease, leased to the respective financial institutions by the Company, were recorded in property and equipment and the correspondent balances payable, in Loans and financings. (iv) Intangible assetscertain intangible assets existent in the Company, recognized before the first-time adoption of Law No. 11,638 and Law No. 11,941, and that meet the specific requirements of CPC Technical Pronouncement No. 04Intangible asset, were reclassified from the property and equipment account group to the intangible assets specific account group.

Transitional Tax System


For purposes of calculating income tax and social contribution on net profit for the year 2008, Brazilian companies could opt for Tax Regime Transition (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.

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The Company opted for the RTT in 2008. Consequently, for income tax and social contribution for net income calculation purposes in 2010, 2009 and 2008, the Company used the prerogatives defined in the RTT.

b.

Significant changes in accounting practices.

The table below shows the significant effects on its financial statements arising as a result of recent changes in accounting practices:
Significant changes in accounting practices Changes 2008 Balance Sheet

Fixed assets Property and equipment Intangible assets


1 1

(534) 534

Shareholders Equity Asset Valuation Adjustment2 Asset Valuation Adjustment Stock option plan (58) -

Statements of Operations Present Value Adjustment - Long Term Accounts Receivable Financial Leasing Stock option plan 311 (805)

____________________________________ 1 Variation as a consequence of transfer of the intangible assets account as a standalone line of permanent assets, not covered by fixed assets. 2 Variation resulted by losses on financial instruments for protection (hedging).

The Company doent recognize effects that result from changes in accounting practices in its financial statements for the years ended December 31, 2009 and ended December 31, 2010.

c.

Significant changes in accounting practices

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


The preparation of financial statements requires estimates for certain assets, liabilities and transactions. To make these estimates, its management uses the best information available at the time of preparation of financial statements, as well as the experience of past or current events, also considering assumptions regarding future events. The financial statements therefore include estimates regarding the useful lives of fixed assets, estimated recovery value of long-lived assets, provisions for contingent liabilities, determination of provisions for income taxes, determining the fair value of financial instruments (active
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and passive) and others. The result of the transactions and information upon realization may differ from estimates. Following is a discussion about what the Company considers relevant as accounting practices for the presentation of Companys financial information. (i) Cash and cash equivalents

Cash and cash equivalents are maintained to meet short-term cash commitments and not for investment or other purposes. They include cash in hand, bank deposits, short-term, highly-liquid investments with original maturities of three months or less, readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. (ii) (a) Financial instruments Initial recognition and measurement

The Company classifies its financial assets in the following categories: (i)financial assets available for sale and (ii)financing and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets on initial recognition, the date on which it becomes part of the contractual provisions of the instrument. Financial assets are initially recognized at fair value plus direct transaction costs. Purchases and sales of financial assets that require delivery of assets within a timeframe established by regulations or market convention (regular purchases) are recognized on the trade-date - the date on which the group commits to purchase or sell the asset. The Company's financial assets include cash and cash equivalents, trade and other accounts receivable and marketable securities. (b) Financial assets available for sale

The financial assets available for sale are non-derivatives, which are designated in this category or are not classified in any other category. They are included in non-current assets unless management intends to dispose of the investment within 12 months after the balance sheet date. The fair value variations of the financial assets available for sale are charged to stockholders equity. The interests on those titles are charged to the statements of income as finance income. They comprise marketable securities with immediate liquidity with prime finance institutions and are indexed by the Interbank Deposits Certificate - CDI with the interest being charged to the income statement under "finance income" in the period in which they arise. Those marketable Securities book, once entered by CDI, are substantially closed to the fair valor. (c) Financing and receivables

This category comprises non-derivative receivables with fixed or determinable payments, not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period. These are classified as non-current assets. The Company's loans and receivables comprise trade and other receivables, judicial deposits and cash and cash equivalents, excluding short-term investments. Loans and receivables are recorded at amortized cost, based on the effective interest rate method. (d) Impairment of financial assets at amortized cost

The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result
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of one or more events that occurred after the initial recognition of the asset (a 'loss event') and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The criteria that the Company uses to determine that there is objective evidence of an impairment loss include:

(i) (ii) (iii)

significant financial difficulty of the issuer or debtor; a breach of contract, such as a default or delinquency in interest or principal payments; it becomes probable that the borrower will enter bankruptcy or other financial reorganization;

(iv) the disappearance of an active market for that financial asset because of financial difficulties; or observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including: adverse changes in the payment status of borrowers in the portfolio; national or local economic conditions that correlate with defaults on the assets in the portfolio. The Company first assesses whether objective evidence of impairment exists. The amount of the loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized in the income statement. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor's credit rating), the reversal of the previously recognized impairment loss is recognized in the income statement. (e) Hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value are recorded in the income statement, except when the derivative is designated as cash flows hedge. (e.1) Cash flows hedge

The Company documents, at the inception of the transaction, the relationship between the hedging instruments and the hedged items, as well as its risk management objectives and strategy for undertaking hedging transactions. The Company also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in equity. The gain or loss relating to the ineffective portion is recognized immediately in the statement of profit and loss. The gain or loss relating to the ineffective portion, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, fixed assets), previously deferred in equity is transferred from equity and included in the initial measurement of the cost of the fixed asset. The deferred amounts are ultimately recognized in profit and loss by depreciation of the fixed assets.
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In the year from June 2009 to June 2010, the gain or loss related to the cash flow hedge was recognized in profit or loss since the documentation described above had not been prepared. The full fair value of a hedging derivative is classified as a non-current asset or liability, when the remaining maturity of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity is less than 12 months. (iii) Trade receivables

Receivables are recognized on an accrual basis at the time the service are provided and/or sale to the customers. Trade receivables are recognized at fair value at the time of the sale , adjusted by the provision for impairment of the accounts receivable. The provision for impairment is recorded when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the accounts receivable. The amount of the provision is based on credit risk analysis, which considers the individual situation of the customers, that of the economic group to which they belong, the collateral for the debts and the opinion of its legal advisors. (iv) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the Weighted Average Cost method. Net realizable value is the estimated selling price in the ordinary course of business, less applicable execution costs and selling expenses. (v) Current and deferred income tax and social contribution

The income tax and social contribution expenses for the period comprises current and deferred tax. Income tax is recognized in the income statement, except to the extent that it relates to items recognized directly in equity or in other comprehensive income. In this case the tax is also recognized in equity or comprehensive income. The current income tax charge is calculated on the basis of the tax laws enacted in Brazil at the balance sheet date, which is 15%, plus 10% on taxable income in excess of R$240, in the case of income tax, and 9% on taxable income in the case of a social contribution on net income. Management periodically evaluates positions taken with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax and social contribution is calculated on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. The current tax rates of 25% for income tax and 9% for social contribution are used to calculate deferred taxes. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized, taking into consideration projections of future income based on internal assumptions and future economic scenarios which may, therefore, be subject to change. For purposes of determination of income tax and social contribution on net income, the Company opted for the Transition Tax Regime - RTT, as established in Law 11.941/09, and follows the accounting criteria laid down by Law 6,404/76, prior to the changes introduced by Law 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 income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. (vi) Judicial deposits
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Judicial deposits are shown in monetarily update amounts and are presented as noncurrent assets. (vii) Property, plant and equipment: own use and rental and operational use

The major part of the income of the Company is produced by equipment rental, whether through rental only or rental together with assembly and disassembly. Property, plant and equipment for the Company's use comprises mainly the facilities for storing equipment, offices, improvements and furnishing and fittings required for these facilities. Property, plant and equipment is recorded at historical cost, less accumulated depreciation and impairment loss. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when future economic benefits associated with the item are probable and the cost of the item can be measured reliably. The carrying amount of the replaced part is excluded from the assets. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Depreciation is calculated using the straight-line method, at the rates disclosed in Note 10, which take into account the estimated useful and economic life of the assets. Land is not depreciated. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are included in operating income (loss). The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the balance sheet date. The Company's appraisals and measurements of the useful lives used have proved to be relatively accurate estimates of the actual wear on the equipment and assets (viii) Intangible assets

Computer Software Software is valued at cost, less accumulated amortization and impairment losses, if applicable. Costs associated with maintaining and developing computer software programs are recognized as an expense as incurred. Computer software has an established useful life and is amortized over five years. (ix) Goodwill

Refers to the goodwill determined on the acquisition of Jahu and Kina in relation to the difference between the purchase price and the carrying value of the assets and liabilities. The goodwill is based on future profitability and was amortized to December 31, 2008. Since January 1, 2009, the goodwill is tested annually for impairment. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose identified according to the operating segment. (x) Impairment of assets

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Property, plant and equipment and other non-current assets, including goodwill and intangible assets, are tested annually for impairment, or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If this is the case, the recoverable amount is calculated to check for impairment. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's net selling price and the value of an asset in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. (xi) Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method. In practice, they are usually recognized at the amount of the related invoice. (xii) Provisions

Provisions are recognized when: the Company has a present legal or unformalized obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. The provisions for contingencies are recorded at the amount of probable losses, considering the nature of each contingency (Note 15). Management, supported by the opinion of its legal advisors, understands that the constituted provisions are sufficient to cover eventual losses with ongoing lawsuits. Monthly charges are due on the provisions for contingencies using the correction index of the rate of the Special System for Settlement and Custody ("Sistema Especial de Liquidao e Custdia - SELIC"). The provision increments are recognized as operational expenses in the income statement. A provision for onerous contracts is recognized when it is probable that the future economic benefits of the contract will be lower than the unavoidable cost of meeting the contractual obligations. The provision is measured at present value and at the lower of the estimated cost of terminating the contract and the estimated net cost of maintaining the contract. (xiii) Profit-sharing

Profit sharing is recognized throughout the year and paid in the following year. The amount distributed is 25% of the EVA (operating profit after tax), less interest on capital (xiv) Share-based compensation

The Company offers employees and executives a compensation plan based on share options, converted into common shares in the Company at the time of the initial public offer. Under this plan, the Company receives services from the employees in exchange for the grant of the options. The fair value of the options granted is recognized as an expense over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the balance sheet date, the Company reviews its estimates of the number of options to which the rights should be acquired based on the conditions, taking into account the impact of the review of the initial estimates, if any, on the statement of income, set against stockholders' equity.

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The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. (xv) Loans and financing

Loans are recognized initially at fair value, and subsequently carried at amortized cost, that is, including interest proportionate to the period, according to the contractual conditions agreed with each financial institution. The calculation methodology for each loan follows the particular conditions of each contract, using the effective interest rate method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan, and are also recorded under finance expenses. Management controls the balances of the loans on a monthly basis, using management controls, that updates the financial indicators (interest rates) in accordance with each contract. Loans and financing are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. (xvi) Leases

The Company leases certain property, plant and equipment. Leases of property, plant and equipment which the group has substantially all the risks and rewards of ownership are classified as finance leases. The leased asset is initially recognized at the lower of the fair value of the leased asset and the present value of the minimum lease payments. Subsequently, the asset is recorded in accordance with the pertinent accounting policy. The balance of the finance lease account, presented under current and non-current liabilities, refers to lease payments still outstanding. (xvii) Foreign currency conversion Foreign currency transactions are translated into reais using the exchange rates prevailing at the dates of the transactions. Balance sheet amounts are converted at the exchange rates on the balance sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except when deferred in equity as qualifying cash flows hedges. (xviii) Capital stock The Company's capital is divided into common shares with no par value. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (xiv) Distribution of dividends and interest on capital

Distribution of dividends and interest on capital to the Company's stockholders is recognized as a liability in the group's financial statements at year-end based on the Company's By-laws. Any amount that

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exceeds the minimum required is only provided on the date it is approved by the stockholders at the annual general meeting. The tax benefit of interest on capital is recognized in the income statement. (xv) Revenue recognition

Sales revenue is recognized when significant risks and benefits of ownership of goods are transferred to the purchaser. The Company's policy of revenue recognition, therefore, is the date on which the product is delivered to the purchaser. Income from services rendered is recognized based on the services performed to the reporting date as a percentage of the total services to be performed. Rental income is recognized monthly in the income statement on a pro rata basis, using the straight-line basis, in accordance with equipment rental agreements. The Company separates the identifiable components of an agreement or group of agreements in order to reflect the substance of the agreement or group of agreements, recognizing the revenue from each of the elements in proportion to its fair value. Accordingly, the Company's revenue is divided into rental, technical assistance, sales and indemnities/recovery of expense. Interest income is recognized in proportion to the time elapsed, taking into consideration the outstanding principal and the effective rate during the period to maturity, when this revenue will be credited to the Company. Revenue, expenses and assets are recognized net of taxes on sales.

(xvi)

Earnings per share

Basic earnings per share are calculated by dividing the profit attributable to the controlling and minority equity holders of the Company by the weighted average number of common shares in issue during the period. Diluted earnings per share are calculated by adjusting the weighted average number of common shares in issue to assume conversion of all dilutive potential common shares, in the periods presented, pursuant to CPC 41 and IAS 33. (xvii) New standards and interpretations not yet effective The following standards and amendments to existing standards have been published and are mandatory for the Company's accounting periods beginning on or after January 1, 2011, or later periods, but the Company has not opted to adopted them earlier than required. The main IFRS standards, amendments and interpretations published by the IASB, are set out below: Comparative IFRS 7 Disclosures for First-time Adopters - offers entities adopting IFRS for the first time the same options allowed to current users of the IFRS in adopting the amendments to IFRS 7. It also explains the transition rules for the amendments to IFRS 7. Improvements to IFRS 2010 - various improvements have been made to IFRS 2010. The changes generally apply to annual periods after January 1, 2011, unless otherwise indicated. Early application, although permitted by the IASB, is not available in Brazil.

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IFRS 9 Financial Instruments - issued in November 2009. The standard is the first step in the process of substitution of IAS 39 "Financial Instruments: Recognition and Measurement". IFRS 9 introduces new requirements for classification and measurement of financial assets. The standard does not apply until January 1, 2013, but is available for early adoption. IAS 24 (revised), "Related Party Disclosures", issued in November 2009. Substitutes IAS 24, "Related Party Disclosures", issued in 2003. IAS 24 (revised) is mandatory for periods beginning on or after January 1, 2011. Full or partial early application is permitted. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. Prepayment of a minimum fund requirement (Amendment to IFRIC 14) - the amendments correct an unintentional consequence of IFRIC 14, IAS 19 - "The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction". Without the amendments, entities are not permitted to recognize as an asset voluntary prepayments of minimum funding contributions. This was not the intention when IFRIC 14 was issued, and the amendments correct this. The amendments are effective in annual periods beginning January 1, 2011. Early application is permitted. The amendments should be applied retrospectively to the first comparative period presented. Amendment to IAS 32, "Financial Instruments: Presentation - Classification of Rights Issues"- issued in October 2009, the amendment is effective for annual periods beginning on or after February 1, 2010, with earlier application permitted. The amendment addresses the accounting for rights issues denominated in a currency other than the functional currency of the issuer. Provided certain conditions are met, these share rights are now classified as equity, irrespective of the currency in which the exercise price is denominated. Previously, the shares had to be accounted for as derivative liabilities. The amendment applies retroactively, in accordance with IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors". IFRIC 19, "Extinguishing Financial Liabilities with Equity Instruments" has been in effect since July 1, 2010. The interpretation addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments to a creditor of the entity to extinguish all or part of the financial liability (conversion of the debt). This requires recognition of a gain or loss in profit or loss, measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued. If the fair value is not reliably determinable, the equity instruments should be measured at the fair value of the liability extinguished The CPC has not yet issued pronouncements equivalent to the above-mentioned IFRSs, but is expected to do so prior to the date on which they become mandatory. Early adoption of the pronouncements of the IFRSs is conditional on prior approval in a regulatory act of the Brazilian Securities Commission. The Company still has to estimate the total impact of these new standards, interpretations and amendments to the standards on its financial statements, however, it does not expect significant impacts as a result of adoption. 10.6 Internal controls

a.

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

The Companys 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.

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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. 10.7 Public offerings for distribution of securities

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 and to settle higher cost debts. According to the final prospectus of Initial Public Offering of shares of the Company, dated April 15 th, 2010, the estimated allocation for resources from the IPO was R$254.8 million in acquisition equipment and R$156.2 million in strategic acquisitions. In the year ended December 31st, 2010, the Company invested R$333.9 million in equipment acquisition, R$79.1 million, or 31%, higher than the amount estimated at the date of the prospectus for IPO but in line with the investment budget of R$325.7 for acquisition of rental equipment for the year 2010, as reported in the same prospectus. On January 19th, 2010, the Company entered into a purchase and sale agreement to acquire 25% of the voting and total capital of Rohr S/A Estrutura Tubulares for R$90 million. Rohr is a private company specializing in access engineering and the provision of construction solutions. On May 27th, 2011, io de 2011, the Company entered into a purchase and sale agreement to acquire 100% of the voting and total capital of GP Sul, one of the largest players in the suspended scaffold rental market to residential and commercial construction in the state of Rio Grande do Sul, for R$ 5.5 million. The resources used for strategic acquisitions to date 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. Variations in the amounts realized in respect of the estimated values of proceeds from Initial Public Offering shares issued by the Company are derived from the exploitation of market opportunities. Since the growing demand in markets where the Company operates, the Company expands investments to purchase rental equipment. 10.8 Managements comments on significant items not included in the balance sheet and their effects on the consolidated financial statements 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.

As described on item 10.8 there are no significant obligations not included on the financial statements of the Company. 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

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The Company plans to invest R$1.1 billion in the period between 2010 and 2012. The Company invested R$348.5 million in 2010 and its investment budget for 2011 totals R$433 million. The directors consider that the public offering of its shares, which provided us with net proceeds of R$411 million, and ability to generate cash from operations of the Company, together with its indebtedness, with maximum leverage desirable of 1.0 time EBITDA on net debt, will be sufficient to finance its investment plan of R$1.1 billion in the period between 2010 and 2012. The Company plans its investment policy in accordance with its cash flow and credit availability in the market. Exceptionally, for extraordinary capital disbursements, rely on capital investments from its shareholders, as occurred in the acquisition of Jahu commented below. To ensure the necessary amount of capital for the implementation of its investment plan, we constituted a statutory reserve, of which its shareholders may allocate up to 75% of net income, provided that such reservation does not exceed the limit of 80% of the capital. The Company presents below major investments made in the course of the years ended December 31, 2008, 2009 and 2010, and highlight the investment budget for fiscal year 2011

Acquisition of 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 was a provider of engineering solutions and shoring, scaffolding and access equipment for use in residential and commercial construction projects. The results of operations of Kina and Jahu Indstria have been included in its combined financial statements from July 1, 2008. Kina and Jahu Indstria were merged into its company on August 30, 2008, and established as its Jahu division.

Investments in 2008, 2009 and 2010


The Company experienced a period of rapid expansion in 2008, 2009 and 2010, due in large part to the acquisition of Jahu Indstria and the launch of operations of its Equipment Rental division. Its principal investments in this period are described below:

Heavy Construction Division


The Heavy Construction division invested R$66.5 million, R$23.5 million and R$74.3 million in 2008, 2009 and 2010, respectively, primarily in connection with the acquisition of shoring structures and industrialized steel and aluminum formwork.

Industrial Services Division


The Industrial Services division invested approximately R$29.4 million, R$4.6 million and R$25.0 million during the years ended December 31, 2008, 2009 and 2010, respectively, primarily in the acquisition of equipment and raw materials. These purchases included aluminum flooring, and third-party equipment that had previously been rented by the division.

Jahu Division
Over the past three years, the Jahu Division invested mainly in shoring equipment, formwork and suspended scaffolding and industrialized steel and aluminum formwork, having disbursed R$6.5 million in 2008, R$16.0 million in 2009 and R$104.0 million in 2010 .

Equipment Rental Division


In 2008, this division invested R$61.5 million to commence operations in the state So Paulo and to continue to acquire new rental equipment. In 2009, the Company continued to implement its strategy of expanding of its portfolio of aerial platforms and telescopic handlers, investing approximately R$30 million in the acquisition of such equipment. In 2010, the Company continued to implement its plan of geographic expansion, investing approximately R$130.6 million in the acquisition of new rental equipment
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Investments Planned for 2011


The Company expects to invest a total of approximately R$400.3 million in 2011, primarily to expand the geographic reach of the operations of the Jahu and Equipment Rental divisions, and to acquire additional equipment for all of its divisions. The following table sets forth its planned investments for 2011 by division.
Division Projects 2011 Investments (in millions of R$) 39.9

Heavy Construction

Acquisition of equipment, primarily shoring structures and industrialized formwork. Acquisition of equipment, primarily steel and aluminum tubes, aluminum flooring and Mills Lock Access systems and 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 run its new branches and to meet the demand for the services rendered by existing branches. Acquisition of goods, materials and supplies for the facilities used by each of our divisions, and development and implementation of SAP, integrated software of enterprise resource planning (ERP) in the company.

Industrial Services

24.8

Jahu

199.5

Equipment Rental

128.9

All four divisions

7.2

Acquisition of interest in Rohr S/A Estruturas Tubulares


On January 19, 2010, the Company entered into a purchase and sale agreement to acquire 25% of the voting and total capital of Rohr, a private company specializing in access engineering and the provision of construction solutions, for R$ 90 million. This strategic acquisition will enable Mills to broaden its exposure to the sectors it serves infrastructure, residential and commercial construction, oil & gas industry, among others. The net proceeds from the issuance of the commercial paper, held in march 2011, were used to finance investments and rearrangement of cash balance after investments made in the fiscal year of 2011, including the acquisition of 25% of the Rohr total capital stock; In addition, part of the net proceeds obtained through the Companys first issuance of debentures, held on April 18, 2011, were used for the redemption of all commercial papers, issued in March 2011, and rearrangement of cash balance after investments made in the fiscal year of 2011, including the acquisition of 25% of the Rohr total capital stock;

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, 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 will enable 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

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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.

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 budget provided for the continued expansion of its operations, through the purchase of equipment for part of which orders have already been made.

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
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 Company visits 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. 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. All factors that had a relevant influence on the Company's operating performance have already been identified and commented in all other items of this section; thus, there are no other factors to comment on.

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11.

PROJECTIONS

11.1

Identification of projections

Not applicable, as the Company does not disclose guidance.


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11.2

Projection monitoring

Not applicable, as the Company does not disclose guidance.

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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 and the Novo Mercado Listing Rules, the board of directors shall be comprised of a minimum of five and a maximum of 11 members. Members of the board of directors are to be elected for a continuous two-year 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. In order to serve on its board of directors, the Novo Mercado Listing Rules requires all members to execute a management compliance statement. 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. All the 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 68 50 38

4.20.2012 4.20.2012 4.20.2012 4.20.2012

4.20.2012 4.20.2012 4.20.2012 4.20.2012

2 years 2 years 2 years 2 years

Yes No No No

Yes Yes Yes Yes

69

Economist Geology and Physical

4.20.2012

4.20.2012

2 years

No

Yes

57

4.20.2012

4.20.2012

2 years

No

Yes

124

Pursuant to Brazilian corporate law, each of the directors shall hold at least one share issued by the Company. 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 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 is the Companys Independent director. 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 directors 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 Professio n CPF Title Date of Last Election 2.9.2012 2.9.2012 2.9.2012 2.9.2012 2.9.2012 Date of Office Term of Office Until OSM 2013 Until OSM 2013 Until OSM 2013 Until OSM 2013 Until OSM 2013 Other Titles Eleito pelo Control ador Yes Yes Yes No No No Yes Yes

Age

Ramon Nunes Vazquez Erik Wright Barstad Roberto Carmelo de Oliveira Frederico tila Silva Neves Alessandra Eloy Gadelha

59 55 57 54 37

Engineer Engineer Business Administrat or Engineer Engineer

336.997.807 -59 012.491.708 -93 399.935.827 -00 595.166.407 -10 021.092.597 -36

Chief Executive Officer Heavy Construction and Jahu divisions Officer Industrial Services Division Officer Chief Financial and Administrative Officer Investor Relations Officer

2.9.2012 2.9.2012 2.9.2012 2.9.2012 2.9.2012

Yes No

125

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 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 does not work on a permanent basis, being installed in the fiscal years in which there is the request of shareholders, and will consist of three members and an equal number of alternates, shareholders or not, resident in Brazil and 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 have requested the installation of the Fiscal Council and elected three members and three alternates. At the Ordinary 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

President Substitute Member Substitute Member Substitute

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

ADVISORY COMMITTEE The Companys Board of Directors approved, in a meeting held in September 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 Mills growth plan. The Human Resource Committee will: (a) supervise and support the elaboration, planning and execution of strategies that enable the company to attract and retain talents, as well as to improve the work
126

environment, and (b) submit proposal for the remuneration of Mills executive officers for analysis and approval of the Board of Directors. The Board of Directors appointed Elio Demier (Vice-Chairman of Mills Board of Directors), Ramon Nunes Vazquez (Mills CEO) and Cristinna Rebello (Mills Human Resources Officer) to the Human Resource Committee. The committee is non-permanent and therefore can be either created or extinguished anytime by the Board of Directors.

b.

Date of formation of Fiscal Council and Committees

The Companys Board of Directors approved, in a meeting held in 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 Mills growth plan. 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.

c.

Mechanisms for evaluating the performance of each body or committee

The activities from 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.

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).

127

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.

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, Cidade e Estado do Rio de Janeiro. Electronic: www.mills.com.br; www.cvm.gov.br; www.bmfbovespa.com.br

d.

Identification and handling of conflicts of interests


128

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

e.

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.

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

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

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
2010 Date(s) of Newspaper publication 03/18/2011 2009 Date(s) of Newspaper publication Publicated Newspaper 2008 Date(s) of Newspaper publication Publicated Newspaper

Notice to shareholders announcing the availability of the Financial Statements General Shareholders Meeting Convening Notice

Publicated Newspaper DOE-RJ Valor Econmico RJ DOE-RJ Valor Econmico RJ DOE-RJ Valor Econmico RJ DOE-RJ Valor Econmico RJ

06/10/2011 Minute of the General Shareholders Meeting 03/17/2011 Financial Statements


_______________________

04/16/2010

DOE-RJ Monitor Mercantil DOE-RJ Monitor Mercantil

05/14/2009

DOE-RJ Monitor Mercantil DOE-RJ Monitor Mercantil

03/05/2010

04/29/2009

129

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).

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, and the parties may, under such Rules, choose by common accord another arbitration chamber or center to resolve their disputes. 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

Age

Profession Business Administration Bachelor of Social Communication Business Administration

CPF 098.921.337 /49 260.066.507 -20 060.903.038 -87

Title

69

Chairman Vice Chairman Director

4.20.2012

2 years

No

61 68

4.20.2012 4.20.2012

4.20.2012 4.20.2012

2 years 2 years

Yes No

Yes Yes

130

Nicolas Wollak Pedro Chermont Pedro Malan Jorge M. T. Camargo

50 38

Executive Engineer

057.378.217 -22 023.120.657 -70 028.897.227 -91 114.400.151 -04

Director Director Independent Director Independent Director

4.20.2012 4.20.2012

4.20.2012 4.20.2012

2 years 2 years

No No

Yes Yes

69

Economist Geology and Physical

4.20.2012

4.20.2012

2 years

No

Yes

57

4.20.2012

4.20.2012

2 years

No

Yes

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 02.09.2012 Starting Date 02.09.2012 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

02.09.2012

02.09.2012

No

Yes

Roberto Carmelo de Oliveira Frederico tila Silva Neves Alessandra Eloy Gadelha

57

Business Administration

399.935.827-00

02.09.2012

02.09.2012

No

Yes

54

Engineer

595.166.407-10

02.09.2012

02.09.2012

No

Yes

37

Engineer

021.092.597-36

Investor Relations Officer

02.09.2012

02.09.2012

No

Yes

131

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 Ordinary 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:
Professi on Lawyer Lawyer Lawyer Lawyer 34 50 40 Engineer Administ rator 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 No Member Substitute 1 year 1 year No No Yes No No Other Titles No No No Elected by the Yes Yes Yes

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

CPF 120.049.10763 080.968.46752 082.613.21703 886.793.57715 709.925.50700 168.126.64820

Title President Substitute Member Substitute

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
Date of Last Election Other positions Elected by Controlling Shareholder

Name

Age

Profession

CPF

Title

Starting Date

Ramon Nunes Vazquez Elio Demier Cristinna Rebello

57 60 56

Engineer Bachelor of Social Communication Business Administration

336.997.80759 260.066.50720 401.196.377. 15

Chief Executive Officer Vice Chairman of the Board of Directors Non Statutory Human Resources Director

09.15.2010 09.15.2010 09.15.2010

09.15.2010 09.15.2010 09.15.2010

Yes Yes Yes

Yes Yes Yes

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.

132

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
133

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 35 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 32 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 29 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
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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.
None

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 Mills, either directly or indirectly
None

c. (i) members of management of entities controlled by the company, either directly or indirectly; and (ii) Millss 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 Company 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: 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: Director and 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 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: Jeroboam Investments LLC / CNPJ: not applicable 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:

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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: Jeroboam Investments LLC / CNPJ: not applicable 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 Nacht Participaes S.A..

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

c. In case its relevant, supplier, client, debtor or creditor of the Company or its controlled or controlling shareholders
Not applicable 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 most recent policy taken out for this purpose was on December 31, 2009, and is valid through to December 31, 2010. The policy contract was renewed for the period December 31, 2010 until December 31, 2011. 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 in MV
137

Investimentos S.A. since August 2009; and member of the Deliberative Board from ABVCAP since March 2010. 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. Pedro Malan - Member of the Board of Directors Administrative positions occupied in other companies / entities: Member of the Board of Trustees of the IFRS Foundation; member of the Board of Directors of Souza Cruz S.A. since March 2010; Chairman of the advisory board of Itau Unibanco 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; and member of the Board of Directors of Globex Ponto Frio since 2004. Jorge M. T. Camargo - Member of the Board of Directors Administrative positions occupied in other companies / entities: Member of the Board of Directors from Karoon Oil & Gas, Deepflex, Energy Ventures, Iposeira O&G and the Brazilian Oil Institute (IBP).

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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

Executive Board, Statutory Directors and Non-Statutory Directors The Companys compensation policy aims to enable it to hire and guarantee that the qualified professionals required remain in management positions. The Companys management compensation comprises of a fixed amount that includes: (i) the pro-labore paid to the Board members; and (ii) the salary and direct and indirect benefits tailored for 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 management 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. The members of the Fiscal Council shall be entitled to compensation equivalent to 10% of the average remuneration of the Board of Executive Officers. Human Resources Committee: The Human Resources Committee members will be entitled to compensation equivalent to 50% of the monthly remuneration of members of the Executive Board. Committee members who are directors, officers or employees of the Company are not entitled to compensation. The remuneration of members of committees may be amended at any time by the Board of Executive Officers.

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 compensation is designed to recognize and reflect the value of the job position internally and externally. Direct and indirect benefits. Includes medical assistance, life insurance, vehicle leasing and food vouchers, with the aim of complementing the social welfare benefits offered. Profit-sharing and stock options or subscription to shares. The 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. (ii) Proportion of each element to make up the total compensation package: According to the table below the ratio for the year 2010 were:
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Executive Board Statutory Directors Committees

% Compared to the total compensation amount paid to Pro-labor and Direct and indirect Grant wage benefits Profit sharing options 83% 17% 57% 7% 30% 6% 100% -

of

Total 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 management 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, 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 our 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 employees in the administrative area, the program takes into account the results of the Company as a whole. In 2007, 2008 and 2009, totals of R$1.6 million, R$5.6 million and R$8.5 million were distributed, respectively. (iv) Reasons for the composition of remuneration: Compensation of professionals is paid based on the responsibilities inherent in their job positions, market practices and the Companys level of competiveness. 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 indicators used to determine the variable component of management compensation is the Companys net profit, after deducting capital invested by shareholders (equity), and the performance bonus paid to each division.

d. How the compensation package is structured to reflect the development of the performance indicators
The compensation is made up 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 annual net profit.

e. How the compensation policy is aligned with the Companys short-, medium- and long-term interests
The compensation paid monthly to management is in line with the short-term 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. f. Existence of compensation supported by subsidiaries, and direct or indirect affiliates or holding companies There isnt any compensation supported by subsidiaries, and direct or indirect affiliates or holding companies.
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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 There is no compensation 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:
Estimates for the Accounting Reference Period to be closed on December 31, 2011 Board of Directors1 7 Board of Executive Officers1 5 Fiscal Council2 -

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

Total 12

1,050,000

3,759,000 632,000

117,000

4,926,000 632,000

800,000

2,859,000

3,659,000

1,850,000

1,243,000 8,493,000

117,000

1,243,000 10,460,000

Year ended December 31, 2010 Board of Executive Officers 4.5

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

Board of Directors 7

Fiscal Council -

Total 11.5

639,520 35,000 -

2,628,940 445,814 906,679

3,268,460 445,814 35,000 906,679

133,952 -

1,859,254 -

1,993,206 -

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Employment cessation benefits Stock-based compensation Total Compensation

808,472

353,734 6,194,421 Year ended December 31, 2009 Board of Executive Officers 4

353,734 7,002,893

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

Board of Directors 2

Fiscal Council -

Total 6

248,320 246,400 22,568 566,952

2,269,800 1,615,110 2,522,000 6,406,910 Year ended December 31, 2008 Board of Executive Officers 4.25

2,518,120 1,861,510 22,568 2,522,000 6,973,862

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

Board of Directors 8

Fiscal Council -

Total 12.25

226,800

2,967,100 434,700

3,193,900 434,700

488,500

831,400

1,319,900

715,300

502,000 4,735,200

502,000 5,450,500

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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:
Board of Directors Compensation 2008 Year ended December 31, 2009 2010 (in thousands of R$, except number of members) 2 7

2011(1)

Number of Members 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 Board of Executive Officers Compensation

0 25% do EVA 488.5

0 25% do EVA 246.4

0 25% do EVA 134.0

0 25% do EVA Not Applicable

2008

Year ended December 31, 2009 2010 (in thousands of R$, except number of members) 4 4.5(3)

2011(1)

Number of Members 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

4.25(2)

0 25% do EVA 831.4

0 25% do EVA 1,615.1

0 25% do EVA 1,859.3

0 25% do EVA Not Applicable

_______________________________________________
(1) (2) (3)

Estimates for the accounting reference period to be closed on December 31, 2011. Taking into consideration the compensation paid to the Director responsible for Equipment Rental Division, Ramon Nunez Vazquez, who became statutory in October 2008. Taking into consideration the hiring in July 2010, Mrs. Alessandra Eloy Gadelha to occupy the position of Investor Relations Officer of the Company.

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 2010, the Company had seven stock option plans, of which six are already effective and five benefit its administrators, these being the Plano Especial Top Mills, Plano Especial CEO, Plano Especial ex-CEO, Plano Especial Diretor - Rental and the Plano de Opes de Compra de Aes 2010, as described below. Until December 31st of 2010, a total of 666,628 options had been exercised associated with these plans, with 538,714 previously granted purchase options remaining.

Plano Especial Top Mills


a. General Terms and Conditions At the Extraordinary General Meeting held on May 28, 2008, the Special Stock Option Plan for New Shares Issued (Plano Especial de Opo de Compra de Aes de nossa emisso) was ratified, called Plano Especial TopMills, as approved by the Board on November 27, 2007, as a purchase option of virtual
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shares. The beneficiaries were the executives indicated by the Board and who were directors or managers between 2007 and 2008. The plan consists of a mechanism to give our executives virtual stock options that represented, on the date Plano Especial Top Mills was set up, approximately 1% of total shares in the Company. The granting of these virtual rights to the beneficiaries in question in the Plano Especial Top Mills was made in three installments, on January 1, 2008. July 1, 2008, and January 1, 2009. On deciding about the granting of these virtual options, the Board determined the number of virtual shares available on an individual basis to each beneficiary. b. Major Plan Objectives Motivate senior management to make decisions aimed at increasing the profitability of the Companys business and, as a result, stimulate an increase in the Companys shareholders equity over the long term. c. How the plan contribute for the achievement of these objectives

The Plano Especial Top Mills allows the Companys executives to be compensated proportionately to the equity gains the Company earns as a result of their decisions. d. How the plan is included in the issuers compensation This plan is part of the variable compensation paid to the Companys directors. e. How the plan promote the alignment between the administrators and the Companys interests at short, mid and long term The plan aligns the interests of the beneficiaries in the Company and shareholders by means of the benefits offered 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 long-term results and short-term performance. f. Maximum number of comprised stocks

Up to a total of 782,027 ordinary shares issued by the Company, of which 269,726 shares are set aside for the Companys administrators. g. Maximum number of options to be granted As a result of the number of shares that can be acquired with each option granted, the maximum number of shares that can be issued is 782,027. h. Stock purchasing conditions The virtual stock purchase options were converted into real purchase options as the distribution of IPO shares were made. After this conversion, the beneficiaries can exercise purchase options within a period of four years after the aforementioned offer, observing the relevant lock-up period for the sale of these shares. i. Criteria for stock pricing or option reference period

The price of the ordinary shares to be acquired by the beneficiaries exercising their options will be R$1.88 per share, a value that will be corrected by the IPCA, calculated since January 2008 to the exercise date of the options.

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j.

Criteria for establishing the reference period

The term for exercising the stock options will end four years after the effective date of the initial public offer and associated distribution of shares, on April 15th of 2014. k. Restrictions to stock transfer

The beneficiaries of the plan will be subject to a lock-up period (restriction on the sale of shares) of three years, until April 15th of 2013. l. Liquidation conditions

The beneficiary will only pay for the shares on the option exercise date. m. Criteria and events that, upon occurrence, shall result in the plan suspension, change or extinction The right to the benefit will automatically expire, without any kind of indemnity, if the payment is not made on the option exercise date and under the conditions stipulated in the plan. 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 a beneficiary of the plan resigns voluntarily or is fired for just cause, the beneficiary will lose their rights. On the assumption the beneficiary leaves or is asked to leave the firm without just cause, the beneficiary is authorized to exercise their options from 2 (two) years after their employment termination date, as long as they do not take part in any activities that compete with the Company (non-compete clause). In the event of the death of the beneficiary, the beneficiaries of their last will and testament as inheritors will immediately be authorized to exercise the options.

Plano Especial CEO


a. General Terms and Conditions

At the Board meeting held on August 28, 2008, the Company instituted a stock option plan specifically for our CEO, called the Plano Especial CEO, ratified at the Extraordinary General Meeting held on September 10, 2008, the characteristics of which are identical to the Plano Especial Top Mills and within the scope of which 119,782 virtual options were granted on November 1, 2008. b. Major Plan Objectives

Motivate the CEO to continue to take decisions to ensure the continued and development and profitability of the Company in its business activities, consequently stimulating an increase in its shareholders equity. c. How the plans contribute for the achievement of these objectives

The Plano Especial CEO allows the CEO to be compensated proportionately with the equity gains that Mills obtains as a result of his decisions. d. Where the plans fit into the Company`s compensation policy

This plan is part of the variable compensation package paid to Company directors. e. How the plans promote the alignment between management and the Company interests at short, mid and long term

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The plan aligns the interests of the Companys CEO and shareholders by means of the benefits offered based on the performance of shares in the Company. Through this plan, we seek 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 long-term results and shortterm performance. f. Maximum number of comprised stocks 119,782 ordinary shares with voting rights in the Company. g. Maximum number of options to be granted

Due to the number of shares that can be acquired within the scope of each option granted. The total maximum number of shares to be issued is 119,782. h. Stock purchasing conditions

The virtual stock purchase options were converted into real purchase options when distribution of IPO shares were made. After this conversion, the beneficiaries can exercise purchase options within a period of four years after the aforementioned offer, observing the relevant lock-up period for the sale of these shares. i. Criteria for stock pricing or option reference period

The price of the ordinary shares to be acquired by the beneficiaries exercising their options will be R$1.88 per share, a value that will be corrected by the IPCA, calculated since January 2008 to the exercise date of the options. j. Criteria for establishing the reference period The exercise term of the options will end 4 (four) years after the distribution of shares at our Initial Public Offer. k. Restrictions to stock transfer

The beneficiaries of the plan will be subject to a lock-up period (restriction on the sale of shares) of three years, until April 15th of 2013. l. Liquidation conditions

The beneficiary will only pay for the shares on the option exercise date. m. Criteria and events that, upon occurrence, shall result in the plan suspension, change or extinction

The right to the benefit will automatically expire, without any kind of indemnity, if the payment is not made on the option exercise date and under the conditions stipulated in the plan. 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 a beneficiary of the plan resigns voluntarily or is fired for just cause, the Beneficiary will lose their rights. On the assumption the beneficiary leaves or is asked to leave the firm without just cause, the beneficiary is authorized to exercise their options from 2 (two) years after their employment termination date, as long as they do not take part in any activities that compete with the Company (non-compete clause). In the event of the death of the beneficiary, the beneficiaries of their last will and testament as inheritors will immediately be authorized to exercise the options.

Plano Especial ex-CEO


147

a.

Terms and general conditions

At the Board Meeting held on November 27, 2007, the Company instituted a stock option plan specifically for their CEO, called the Plano Especial CEO at the time, who left as a director in 2008 to become a Board member in 2010. This plan was called the Plano Especial ex-CEO and ratified at the Extraordinary General Shareholders meeting held on May 28, 2008, within the scope of which 153,690 virtual options were granted on November 1, 2008. b. The main objectives of the plan Motivate the beneficiary to continue to take decisions to ensure the continued and development and profitability of the Company in its business activities, consequently stimulating an increase in its shareholders equity. c. How the plan contributes to these objectives The Plano Especial ex-CEO allows the beneficiary to be compensated proportionately with the equity gains that Mills obtains as a result of his decisions. d. How the plan is included in the issuers compensation policy This plan is part of the variable compensation package paid to Company directors. e. How the plan aligns the short, medium and long-term interests of managers and the issuer The plan aligns the interests of the beneficiary, Company, and shareholders by means of the benefits offered to the former CEO 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. Maximum number of shares included

153,690 ordinary shares with voting rights in the Company. g. The maximum number of shares options to be granted Due to the number of shares that can be acquired within the scope of each option granted. The total maximum number of shares to be issued is 153,690. h. Conditions for the acquisition of shares The beneficiary has already acquired all the stock options associated with this plan. i. Criteria to determine the acquisition or exercise price

The price of the ordinary shares to be acquired by the beneficiaries exercising their options will be R$1.88 per share, a value that will be corrected by the IPCA, calculated since January 2008 to the exercise date of the options. The exercise price corrected by the IPCA was R$2.11 per share. j. Criteria to determine the exercise term for the stock options

The options were exercised on the effective date of the Initial Public Offer (IPO). The beneficiary has already acquired all the stock options associated with this plan through the exercise of their respectively stock options.
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k. Restrictions related to the transfer of shares Not applicable. l. Liquidation/settlement

The beneficiary paid for the shares on March 12th of 2010. m. Criteria and events that when verified will lead to the suspension, alteration or extinction of the plan The right to the benefit will automatically expire, without any kind of indemnity, if the payment is not made on the option exercise date and under the conditions stipulated in the plan. n. Effects of management leaving the issuer on their rights associated with the compensation plan based on shares The beneficiary will maintain his rights to the plan, as long as he does not invest or participate in any business that competes with the Company for a period of two years.

Plano Especial Diretor - Rental


a. Terms and general conditions Our Board approved at a meeting held on October 25, 2007 the creation of a stock option plan specifically for our CEO (who at the time held the position of Director of the Rental Division), called the Plano Especial Diretor - Rental, which was ratified at the Extraordinary General Shareholders meeting held on May 28, 2008. b. The main objectives of the plan Motivate the CEO to continue to take decisions to ensure the continued and development and profitability of the Company in its business activities, consequently stimulating an increase in its shareholders equity. c. How the plan contributes to these objectives

The Plano Especial Diretor - Rental allows the CEO to be compensated proportionately with the equity
gains that Mills obtains as a result of his decisions. d. How the plan is included in the issuers compensation policy This plan is part of the variable compensation package paid to Company directors. e. How the plan aligns the short, medium and long-term interests of managers and the issuer The plan aligns the interests of the beneficiary, Company, and shareholders by means of the benefits offered to the former CEO 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. Maximum number of shares included

282,646 ordinary shares with voting rights in the Company.

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g. The maximum number of shares options to be granted Due to the number of shares that can be acquired within the scope of each option granted. The total maximum number of shares to be issued is 282,646. h. Conditions for the acquisition of shares The first target established for the plan (which consisted of the EBITDA reported by the Rental Division reaching R$11.0 million, was achieved in December 2008), when 128,937 options were exercisable. When the second target (which consists of the EBITDA reported by the Rental Division reaching R$22.0 million) was achieved in December 2009, 153,709 options were exercisable. And 252,267 have already been exercised. i. Criteria to determine the acquisition or exercise price

The price of the ordinary shares to be acquired by the beneficiaries exercising their options will be R$0.62 per share, a value that will be corrected by the IPCA, calculated since January 2008 to the exercise date of the options. j. Criteria to determine the exercise term for the stock options

The targets can be met prior to December 2012. The exercise term for the options will end in December 2013. k. Restrictions related to the transfer of shares The plan states that for the options granted after the first target is met, the beneficiary of the plan will be subject to a lock-up period (restriction on the sale of shares) which will extend: (i) for three years from the date the shares are obtained; (ii) when the second target is met; and (iii) before the end of 2013. The shares acquired on meeting the second target can be sold immediately. As the second target has already been met, the shares acquired within the scope of the plan in question can be sold immediately. l. Liquidation/settlement

The beneficiary will only pay for the shares on the option exercise date. criteria and events that, when verified, will lead to the suspension, alteration or extinction of the plan The right to the benefit will automatically expire, without any kind of indemnity, if the payment is not made on the option exercise date and under the conditions stipulated in the plan. m. Effects of management leaving the issuer on their rights associated with the compensation plan based on shares If a beneficiary of the plan resigns voluntarily or is fired for just cause, the Beneficiary will lose their rights. On the assumption the beneficiary leaves or is asked to leave the firm without just cause, the beneficiary is authorized to exercise their options from 2 (two) years after their employment termination date, as long as they do not take part in any activities that compete with the Company (non-compete clause). In the event of the death of the beneficiary, the beneficiaries of their last will and testament as inheritors will immediately be authorized to exercise the options. 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). On March 11, 2010, our Board approved the Companys Program 1/2010 Stock
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Options Plan with the aim of defining the specific terms and conditions associated with the same (1/2010 Program). The 2010 Stock Options Plan is managed by our Board, 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) all the directors (or executives with similar roles) of the Company, and (ii) Company managers who have held their positions in 2009 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. 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. To this date, options have been granted that, when converted, will represent 1,475,234 ordinary shares in the Company. 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

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To receive the stock options in the 1/2010 Program, each beneficiary should 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. i. Criteria for determining the acquisition or exercise price

The price of the ordinary shares to be acquired by the beneficiaries by exercising their option rights will be determined by our Board or committee based 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, corrected for inflation by the IPCA, and deducting the value of dividends and shareholders equity per share paid by us from the stock option date. Exceptionally, on the first option date, the exercise price of the options will be based on the value of the shares launched at our Initial Public Offer to distribute shares (R$11.50), corrected for inflation by the IPCA, deducting the value of dividends and shareholders equity per share paid by the Company 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 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. 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.

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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. m. 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: (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.

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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: The table below indicates, on December 31st, 2010, and October 24, 2011, 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.

Number of Shares Percentage (%)

On December 3st of 2010


Board of Directors Board of Executive Officers Fiscal Council 3,351,092 1,418,625 2.67% 1.13% -

On October 24 of 2011
Board of Directors Board of Executive Officers Fiscal Council 5,113,054 1,336,161 4.1% 1.0% -

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. On December 31st of 2010, the Company had six stock option plans in place, five of which benefit our Directors. The table below shows the impact of those stock option plans on the compensation of our directors in the years 2008, 2009 and 2010:
Plano Especial Top Mills
(1)

1st Grant (2008) 3 01/01/08 88,436 Immediately after IPO(2) 4 years after IPO(2) 3 years after the end of Fiscal Year 88,436

2nd Grant (2008) 3 07/01/08 88,436 Immediately after IPO(2) 4 years after IPO(2) 3 years after the end of Fiscal Year 88,436

3rd Grant (2009) 3 01/01/09 92,854 Immediately after IPO(2) 4 years after IPO(2) 3 years after the end of Fiscal Year 92,854

Number of members Board of Executive Officers Grant date Number of granted options Board of Executive Officers 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

1.88(3) 4.62(4)

1.88(3) 4.62(4)

1.88(3) 9.82(4)

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Plano Especial Top Mills(1)

1st Grant (2008)

2nd Grant (2008)

3rd Grant (2009)

_______________________________________ 1 All grants of stock-based compensation plan have already been made. There will be no grants in 2010 or 2011.
2 3 4 IPO conducted by the Company in April, 2010. Adjusted for inflation (IPCA) since January 2008. Fair price calculated using EBITDA for the fiscal year multiplied by 6.6 minus net debt, which consists of short and long term financing and loans.

Plano Especial CEO(1)


Number of members Board of Executive Officers Grant date Number of granted 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

1st Grant (2008) 1 11/01/2008 119,782 Immediately after IPO(2) 4 years after IPO(2) 3 years after the end of Fiscal Year 119,782 1.88(3) 4.62(4)

_______________________________________
1 2 3 4 All grants of stock-based compensation plan have already been made. There will be no grants in 2010 or 2011. IPO conducted by the Company in April, 2010. Adjusted for inflation (IPCA) since January 2008. Fair price calculated using EBITDA for the fiscal year multiplied by 6.6 minus net debt, which consists of short and long term financing and loans.

Plano ex-CEO(1)
Number of members Board of Executive Officers Grant date Number of granted 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

1st Grant (2008) 1 05/01/2008 153,690 03/12/2010 03/12/2010 There isnt 153,690 1.88(3) 4.62(4)

______________________________________
1 2 3 4 All grants of stock-based compensation plan have already been made. There will be no grants in 2010 or 2011. IPO conducted by the Company in April, 2010. Adjusted for inflation (IPCA) since January 2008. Fair price calculated using EBITDA for the fiscal year multiplied by 6.6 minus net debt, which consists of short and long term financing and loans.

Plano Especial Diretor - Rental(1)


Number of members Board of Executive Officers Grant date Number of granted options

1st Grant (2008) 1 12/29/2008 128,937

2nd Grant (2008) 1 12/31/2009 123,430

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Plano Especial Diretor - Rental(1)


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

1st Grant (2008) Immediately (3) 12/31/2013 Not Applicable(5) 128,937 0.62(6) 0.62(6) 4.62(7)

2nd Grant (2008) Immediately (4) 12/31/2013 There isnt 123,430 0.62(6) 0.62(6) 9.82(7)

_______________________________________
(1) (2) (3) (4) (5) (6) (7) All grants of stock-based compensation plan have already been made. There will be no grants in 2010 or 2011. Amounts differ from amounts recorded since the amounts recorded were estimates made during the grant of the plan. The 1st goal is to obtain in the Equipment Rental Division an annual EBITDA of at least R$11.0 million, which occurred in December, 2008. The 2nd goal is to obtain in the Equipment Rental Division an annual EBITDA of at least R$22.0 million, which occurred in December, 2008. Considering the second goal has been reached, which was linked to the period in which the options become exercisable. Adjusted for inflation (IPCA) since January 2008. Fair price calculated using EBITDA for the fiscal year multiplied by 6.6 minus net debt, which consists of short and long term financing and loans.

Plano de Opes de Compra de Aes 2010


Number of members Board of Executive Officers Grant date Number of granted 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

1st Grant (2010) 4 05/31/2010 495,236 25% by year, from the date of Grant. 6 years after Grant 5 years R$11.50 R$11.50

2nd Grant (2010) 1 07/05/2010 43,478 25% by year, from the date of Grant. 6 years after Grant 5 years R$11,50 R$11.50

Potential dilution in the event of exercise of all options granted: 1,14%(1)

_______________________________________ 1 Dilution estimated on the price per share during IPO. Board of Directors has no stock-based compensation. 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
Fiscal Year ende December 31, 2010 Plano Especial Plano Especial TopMills Plano Especial CEO Diretor Rental 3 1 1 30,279

Features Number of members Board of Executive Officers Non-Outstanding options Number of Non-Outstanding options Deadline for options to become redeemable Deadline for redeeming options Grace period for stock transfer Pondered average price within accounting reference period Fair option price on the last day of the fiscal year Outstanding options Number of Outstanding options

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Features Deadline for redeeming options Grace period for stock transfer Pondered average price within accounting reference period Fair option price on the last day of the fiscal year Fair option price of all options on the last day of the fiscal year

Fiscal Year ende December 31, 2010 Plano Especial Plano Especial TopMills Plano Especial CEO Diretor Rental 31/12/2013 There is no 0.62 9.82 9.82

_______________________________________ 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
Compensation Plano Especial ex-CEO Year ended December 31, 2008 2009 (in R$, except number of members) 1 1 -

2010 1 153,690(1) 0.62(2)

Number of Councilors Number of Directors 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 exercised

(1) (2)

9.13

Whereas a termination of employment of the beneficiary as a member of the Board of Directors and its non-reappointment to the position. Exercised in March 2010 under the Initial Public Offering of Shares held by the Company.

Plano Especial Diretor Rental Compensation 2008 Year ended December 31, 2009 (in R$, except number of members) 1 128,937 0.67 9.15

2010

Number of Directors 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 exercised

1 -

1 123,430 0.71 19.89

Plano Especial CEO Compensation 2008 Year ended December 31, 2009 (in R$, except number of members) -

2010

Number of Directors Number of Shares

1 119,782

157

Pondered average price within accounting reference period Total value of the difference between the exercise value and market value of shares related to options exercised

2.18 18.42

Plano Especial Top Mills Compensation 2008 Year ended December 31, 2009 (in R$, except number of members) -

2010

Number of Directors 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 exercised

3 269,726 2.18 18.42

Our 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. With regard to the plan 2002, as this is a straightforward mechanism for purchasing common shares, the options, which have already been exercised, are entirely considered as equity instruments and recorded in the capital reserve account, under stockholders' equity. The Company classified the other plans granted to 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 weighted average fair value of options granted during 2010 determined using the Black-Scholes valuation model was R$3.86 (1st grant) and 5.49 (2nd grant) per option. The significant inputs into the model were weighted average share price of R$11.95 (1st grant) and 14.10(2nd grant) at the grant date, exercise price of R$11.50 (1st and 2nd grants), volatility of 31% measured at the Company's historic EBTIDA, dividend yield of 1.52% (1st grant) and 1.28% (2nd grant), an expected option life of four years, and an annual risk-free interest rate of 6.6% and 6.37% respectively. The equity portion was priced only at the grant date and the fair value is not remeasured on every reporting date. The portions of equity and debt are appropriated plan by plan, taking into consideration
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the respective lock up periods, based on management's best estimate as to their end dates. The lock up period considered by management took into account the scenario of the public offer being made in 2010. b. Data and assumptions used in the pricing model The table below shows the data and assumptions of our pricing model:
Calculation of fair value 2008 Fiscal year ended on December 31st from: 2009 (in R$) 157,650 1,040,510 182,363 858,147 87,420,577 9.82 2010

EBITDA EBITDA multiple Net debt (1) Fair value Share quantity Fair value per share

89,537 590,944 187,735 403,209 87,420,577 4.62

194,523 1,283,851 (9,715) 1,293,566 125,495,309 10.31

___________________________
Composed of loans and short and long term financing.

Calculation of the weighted average fair value of which was granted in 2010: 3.91 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 It does not apply to volatility, considering the method used to price the options is the multiple method. e. Other characteristics incorporated in the fair value measurement option There are no. 13.10 Private Pension Funds in force granted to members of the Board of Directorsand the Board of Executive Officers There is no Private Pension Funds in force granted to members of the Board of Directors and the Board of Executive Officers in the Company 13.11 Administrators Average Compensation
Compensation 2008 Year ended December 31, 2009 2010 (in R$, except when number of members) 2 328,476 238,476 283,476 4 3,412,435 841,613 1,525,534 7 179,236 90,000 115,496 4.5 1,974,725 1,067,751 1,376,566

Board of Directors(1) Number of members Highest individual compensation value Lowest individual compensation value Average individual compensation value Board of Executive Officers(2) Number of members Highest individual compensation value Lowest individual compensation value Average individual compensation value

8 167,100 45,700 102,200 4.25 1,742,800 729,500 1,114,100

(1)

In the fiscal year that ended on December 31st of 2009, our Board of Directors was composed of five members. However, the 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)

Compensation paid for Executive Officer which occupied the position for the 12 months of the year. Does not consider the compensation received by Mr. Ramon Nunes Vazquez, elected in October 2008. In July 2010 the Company hired Alessandra Eloy Gadelha as Investor Relations Officer.

The Companys Fiscal Council was not installed during the fiscals years ended on December 31st of 2008, 2009 and 2010. 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, and the financial burden they result in for the Company There are 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, and the financial burden they result in for the Company 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 2008 13.1% 86.9% Year ended December 31, 2009 8.1% 91.9% 2010 11.5% 88.5%

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.
Consulting Ronald Miles(1) Elio Demier 2010 170 125 Balance on December 31, 2009 (in R$ thousands) 45 50 2008 -

_______________________________________________
(1) Amounts paid to the company Londra Consultoria Ltda., a company controlled and managed by Ronald Miles, who was director of the Company until 2008 and member of the Board of Directors in 2009.

13.15 With respect to the last three accounting reference periods, disclose the amounts as acknowledged in the results released by 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, specifying the purpose of such amounts paid to the referred individuals. Not Applicable 13.16 Other information that the Company might judge relevant There is no other relevant information with respect to item 13.

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14.

HUMAN RESOURCES

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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:
2008 449 2,154 Year ended December 31, 2009 2010 521 572 2,474 3,006 460 222 1 208 4,469

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

323 308 69 103 2 1 92 130 3,090 3,537 ___________________________

On December 31 of 2010, 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:
2010 State Heavy Construction 170 246 20 0 60 0 1 74 1 Industrial Services 572 874 249 0 1311 0 0 0 0 Employees Jahu 112 105 54 14 47 38 37 53 0 Rental 47 69 45 3 39 9 10 0 0 Corporate 141 29 5 1 29 0 0 3 0 Total 1042 1324 373 18 1486 47 48 130 1

Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Paran Rio Grande do Sul Distrito Federal Pernambuco 2009 State

Employees Heavy Construction 141 271 20 0 30 0 0 59 Industrial Services 612 604 135 159 964 0 0 0 Jahu 98 89 44 0 0 26 32 19 Rental 30 37 18 0 18 0 0 0 Corporate 89 17 2 0 20 0 0 2 Total 970 1018 219 159 1032 26 32 80

Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Paran Rio Grande do Sul Distrito Federal 2008 State

Employees Heavy Construction 125 228 17 0 21 0 0 58 Industrial Services 637 490 65 198 764 0 0 0 Jahu 152 77 40 0 0 28 26 0 Rental 19 27 12 0 11 0 0 0 Corporate 64 16 0 0 12 0 0 1 Total 997 840 134 198 808 28 26 59

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

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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, 2010, the Company hired 90 outsourced workers, as detailed below:
2010 State Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Cear Pernambuco Paran Rio Grande do Sul Distrito Federal Gois Par Janitorial services 10 16 2 1 1 1 4 Security 12 15 7 2 4 1 2 1 2009 State Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Paran Rio Grande do Sul Distrito Federal Janitorial services 8 7 1 1 0 0 0 2 Security 6 9 4 0 2 0 0 2 Transport 2 2 0 0 0 0 0 0 2008 State Rio de Janeiro So Paulo Minas Gerais Esprito Santo Bahia Paran Rio Grande do Sul Distrito Federal Janitorial services 7 7 1 0 0 0 0 0 Security 6 10 0 0 4 0 0 0 Transport 0 0 0 0 0 0 0 0 Catering 0 0 0 0 0 0 0 0 IT Support 5 2 0 0 0 0 0 0 Total 18 19 1 0 4 0 0 0 Catering 0 1 0 0 0 0 0 0 IT Support 3 2 0 0 0 0 0 0 Total 19 21 5 1 2 0 0 4 Transport Catering IT Support 5 4 1 1 Total 27 35 10 3 5 2 7 1

c.

employee turnover index

The index of employee turnover (churn) in financial years ending in 2010, 2009 and 2008 was 5.87%, 4.82% and 4.92%, 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 6.63% in 2010. 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 2010 would be 4.33%.
163

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. 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); 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 2010 the Company distributed 2,688 food baskets to our employees; meal allowance: 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 R$2.5 thousand; 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).

164

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


The Company has four stock option plans that benefit their employees, namely, " Plano Especial Top Mills, Plano Especial Rental Diretor, Plano Especial Rental Gerentes e Plano de Opes de Compra de Aes 2010.

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, 2011. 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.

Plano Especial Rental Diretor


a. Groups of beneficiaries The executive responsible for the Rental Division. b. Conditions for the exercise The stock options were granted upon implementation of the plan. The first target established in the plan (which consisted in the Rental Division's EBITDA reaching R$11.0 million) was met in December 2008, and 19,341 options became exercisable. When the second target (which consisted in the Rental Division's EBITDA reaching R$22.0 million) was met in December 2009, 23,056 options became exercisable. c. Exercise price

The price of common shares to be acquired by beneficiaries through the exercise of options will be R$1.88 per share, restated by the IPCA, calculated from January 2008 to the date the option is exercised. d. Exercise terms The term for the exercise of the options will expire in December 2013. The plan provides that, for options granted after the first target is reached, the plan's beneficiary is subject to a lock-up period with the following duration: (I) three years from the date the shares are obtained; (Ii) when the second target is reached; and (iii) up to the end of 2013. Shares acquired due to achievement of the second target may be readily disposed of. Considering that the second target has been reached, shares acquired under said plan may be readily disposed of.
165

e. Number of shares in the plan Up to 42,397 shares issued by the Company, of which 23,056 can still be subscribed or purchased under the plan.

Plano Especial Rental Gerentes


a. Groups of beneficiaries Managers in the Rental Division. b. Conditions for the exercise The stock options were granted upon implementation of the plan. The first target established in the plan (which consisted in the Rental Division's EBITDA reaching R$11.0 million) was met in December 2008, and 51,575 options became exercisable. When the second target (which consisted in Rental Division's EBITDA reaching R$22.0 million) was reached in December 2009, 61,484 options became exercisable. c. Exercise price

The price of common shares to be acquired by beneficiaries through the exercise of options will be R$1.88 per share, restated by the IPCA, calculated from January 2008 to the date the option is exercised. d. Exercise terms The term for the exercise of the options will expire in December 2013. The plan provides that, for options granted after the first target is reached, the plan's beneficiary is subject to a lock-up period with the following duration: (I) three years from the date the shares are obtained; (Ii) when the second target is reached; and (iii) up to the end of 2013. Shares acquired due to achievement of the second target may be readily disposed of. Considering that the second target has been reached, shares acquired under said plan may be readily disposed of. e. Number of shares in the plan Up to 113,059 shares issued by the Company, of which 61,484 can still be subscribed or purchased under the plan.

Plano de Opes de Compras de Aes 2010


a. Groups of beneficiaries Employees in managing positions, and board members. b. Conditions for the exercise In order to be entitled to grants under 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 and for the year of 2009, to acquire shares issued by the Company. 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:

166

(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; c. Exercise price

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. d. Exercise terms The options granted under this plan will be subject to vesting periods of up to 72 months for the conversion of options into shares. e. Number of shares in the plan The stock options granted under the plan may grant rights to acquire up to 5% of the shares in our capital stock. Additionally, the plan's target is to grant stock options in a number that does not exceed, annually, 1.5% of the shares of our capital stock at the date of approval of the plan. To date, were granted options that, when exercised, shall be converted into 935,520 common shares issued by the Company. 14.4 Description of the relationships between the Company and trade unions

At December 31, 2010, approximately 4% 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 renegotiate 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 47 days, and reaching only part of the workforce. Additionally, the Companys employees were involved in strikes at clients' sites.

167

15.

OWNERSHIP

168

15.1/15.2

Identification of majority shareholder or group of shareholders:

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 April 24, 2012:
MILLS ESTRUTURAS E SERVIOS DE ENGENHARIA S.A. Participates in shareholder Controlling CPF/CNPJ Nationality agreement Shareholder Quantity 27.109.446/000105 14.740.333/000161 Brazilian Spanish

Shareholder NACHT PARTICIPAES S/A Snow Petrel S.L. Administrators Capital Group International Inc Others

Date of last change 4/18/2011 3/14/212 4/24/212 4/20/2010 4/24/212

% Capital Stock

Yes Yes No

Yes Yes No No No

27,421,713 19,233,281 6,043,710 7,032,185 66,421,757

21.7% 15.2% 4.8% 5.6% 52.7%

American

No No

Shareholder Andres Cristian Nacht Jytte Kjellerup Nacht Others

Date of last change 4/18/2011 4/18/2011 4/18/2011

CPF/CNPJ

NACHT PARTICIPAES S/A Participates in shareholder Controlling Nationality agreement Shareholder Argentine Yes Yes Danish Yes Yes Yes Yes

Quantity

% Capital Stock

098.921.337-49 289.858.347-20

2.689.232 923.341 1.115.704

56.9% 19.5% 23.6%

Shareholder Malachite Limited

Date of last change 03/14/2012

CPF/CNPJ

SNOW PETREL S.L. Participates in shareholder Nationality agreement Malta Yes

Controlling Shareholder Yes

Quantity

% Capital Stock

100%

Shareholder Nicolas Nacht Helen Anne Margaret Ahrens Others

Date of last change

CPF/CNPJ

MALACHITE LIMITED Participates in shareholder Controlling Nationality agreement Shareholder Argentine Yes Yes Yes Yes Yes Yes

Quantity

% Capital Stock

734.150.811-68 289.858.347-20

40% 40% 20%

15.3

Description of Share Capital


169

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 15.4 511 525 26 4/20/2012 72,858,952 57.8%

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

See item 8.2.

170

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, Nacht Participaes S.A. controlling shareholders 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. b. c. Date: 02.11.2011 Term: 12.31.2011

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. 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. 15.6 Significant Changes in the shareholdings of Members of the Control Group and directors of the Company in the last 3 financial years

Transfer of ownership from controlling shareholder


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.

171

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.

Nacht Participaes S.A. Capital Reduction


At the Extraordinary General Shareholders Meeting held on February 17, 2011, the shareholders of Nacht, after capitalization of part of the accumulated profits and the legal reserve, approved the capital reduction of the capital stock of Nacht. Such capital reduction will be effected through the delivery of shares issued by Mills currently held by Nacht to some of its shareholders after the 60-day period provided by law to creditors opposition. As a result of the capital reduction, the interest of Nacht on the voting and total capital stock of Mills will be reduced in 17.2%, from 39.0% to 21.8%, and the shareholders Jeroboam Investments LLC (Jeroboam), Andres Cristian Nacht (Cristian Nacht) and Jytte Kjellerup Nacht (Jytte Nacht) will hold a direct stockholding at Mills of 15.3%, 1.4% and 0.5%, respectively. Moreover, 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 on February 11, 2011, which included Jeroboam 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 this shareholders agreement are: (a) maintenance of the Nacht Family and Jeroboam as the controlling group of Mills, (b) joint exercise of the voting rights in any decision involving Mills, (c) designation of Cristian Nacht as representative of the controlling group at the Board of Directors and Shareholders Meetings of Mills, and (d) prohibition of sale to third parties of shares of Mills representative of more than 10% of the participation that each shareholder holds individually. The capital reduction of Nacht and the execution of the shareholders agreement do not cause any change on the administrative structure and control of the Company, which will still be held by the Nacht family in the same proportion held previously. In addition, this transaction does not involve any change in the number of shares or in the amount of the capital stock of Mills.

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. The increase was approved depending on 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".

Reductions of Capital of Staldzene and Nacht Participaes


On March 18, 2010, Staldzene shareholders, our controlling shareholder, ratified the reduction of the share capital of that company, the reduction was approved at an Extraordinary General Meeting held on December 4, 2009. The reduction value was R$13.3 million with the cancellation and it involved the issue of 6,307,457 shares of the Company disproportionately distributed to the shareholdings.

172

Also on March 18, 2010 shareholders of Natch Participaes, controlling shareholder of Staldzene, ratified the reduction of the share capital of that company approved at an Extraordinary General Meeting held on December 4, 2009. The reduction value was R$13.3 million with the cancellation and involved the issue of 6,307,457 shares of the Company disproportionately distributed to the shareholdings. 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 Mills 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.

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. 15.7 Other information which the Company deems relevant

According to Ofcio circular/CVM/SEP/n 007/2011, the number of shares free-float reported in item 15.3 refers to April 24, 2012, after the capital increase. Additional information about of 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%

On April 24, 2012, after the capital increase Number of individual shareholders Number of corporate shareholders Number of institutional investors 501 522 28
173

Date of last General Meeting

4/20/2012

Number of outstanding shares free float 72,858,952 % free float 57.8%

16.

TRANSACTIONS WITH RELATED PARTIES

174

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 our 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 2011


(R$ thousand)

Amount of related party(R$


thousand)

Guaranties and insurance

Duration (months)

Conditions of termination or expiration

Ronald Miles Ronald Miles Elio Demier

Ex-Board Member Ex-Board Member Board of Directors Member

1/2/2009 4/2/2010 10/1/2009

Consulting Consulting Consulting IPO

125,000 90,000 175,000

2011 60,000.00 -

125,000 90,000 175,000

15 15 7

3/2/2010 7/02/2012 04/30/2010

Loan and Debts Purpose and Interest reason rate -

_______________________________________________

16.3

Measures Taken to Address the Conflict of Interest

The Company has adopted 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 and adopt the policies necessary arrangements for directors and shareholders will not be involved in conflict of interest situations. Additionally, pursuant to our 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 administrators who had no conflict of interest with the Company, as it was evidenced by the instruments that guided these operations. Additionally, the steps adopted followed the general rules of the Company with respect to the processing of operations in situations of conflict of interest; and the commutativity of operations with Mr Elio Demier and Ronald Miles is proving impossible, given the personal character of their services. All shareholders were fully aware of the existence of such operations. and the financial statements for the fiscal years in which the operations incurred were approved by shareholders representing 100% of capital.

17.

SHARE CAPITAL

176

17.1

Information about the share capital

Type of Capital: Authorized Capital Date of approval: 04/20/2012 Capital R$: Quantity of common shares: 200,000,000 Total quantity of shares: 200,000,000 Type of Capital: Issued Capital Date of approval: 24/4/2012 Capital R$: 533,608,333.35 Quantity of common shares: 126,152,646 Total quantity of shares: 126,152,646 Type of Capital: Subscribed Capital Date of approval: 24/4/2012 Capital R$: 533,608,333.35 Quantity of common shares: 126,152,646 Total quantity of shares: 126,152,646 Type of Capital: Paid-up Capital Date of approval: 24/4/2012 Capital R$: 533,608,333.35 Quantity of common shares: 126,152,646 Total quantity of shares: 126,152,646

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 asset value of the Companys shares. The issue price was determined based on the asset value of the Companys shares. The issue price was determined based on the asset 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

29.93905891

R$1.35

R$ Unit

Goods

10/1/2009

General Meeting

10/1/2009

R$134,423.51

Private Subscription

199.853

0.22913476

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

0.17580529

R$2.11

R$ Unit

Cash

177

4/14/2010

Board of Directors

4/14/2010

R$425,925,926.00

Public Subscription

37.037.037

42.29214616

R$11.50

R$ Unit

11/30/2010

Board of Directors

11/30/2010

R$ 1,670,424.84

Private Subscription

884.005

0.71000000

R$1.89

R$ Unit

07/27/2011

Board of Directors

07/27/2011

R$1,548,424.09

Private Subscription

128.287

0,10%

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 by 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 released value of Mills shares during the IPO, corrected monetarily by the agreedment with the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paied by Mills, until the fiscal date (July 2011). The price is based on the Companys stock option plan (Special TopMills Plan, Special Plan) The price is based on the Companys stock option plan (Special TopMills Plan, Special Plan) The price is based on the released value of Mills shares during the IPO, corrected monetarily by the agreedment with the IPCA, as from the option contract date (05/31/2011), deducted from the dividend and interest on capital values per share paied by Mills,

Cash

Cash

Cash

09/23/2011

Board of Directors

09/23/2011

R$110,495.40

Private Subscription

48,028

0.04%

R$ 2.30

R$ Unit

Cash

09/23/2011

Board of Directors

09/23/2011

R$14,142.18

Private Subscription

18,598

0.01%

R$ 0.76

R$ Unit

Cash

10/24/2011

Board of Directors

10/24/2011

R$790,329.68

Private Subscription

65,642

0,05%

R$ 12.04

R$ Unit

Cash

178

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

0.00027

R$12.47

R$ Unit

4/02/2012

Board of Director

04/02/2012

R$ 112,17.78

Private Subscription

47,131

0.0021

R$2.38

R$ Unit

4/24/2012

Board of Director

4/24/2012

R$ 4,613,384.16

Private Subscription

371,448

0.874

R$ 12.42

R$ Unit

4/24/2012

Board of Director

4/24/2012

R$ 892,862.10

Private Subscription

44.421

0,169

R$ 20,20

R$ Unit

until the fiscal date (July 2011). The price is based on the released value of Mills shares during the IPO, corrected monetarily by the agreedment with the IPCA, as from the option contract date (from June, 2010 to 01/24/12), deducted from the dividend and interest on capital values per share paied by Mills, until the fiscal date. The price is based on the released value of Mills shares during the IPO, corrected monetarily by the agreedment with the IPCA, as from the option contract date (from June, 2010 to 02/28/12), deducted from the dividend and interest on capital values per share paied by Mills, until the fiscal date. 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 released value of Mills shares during the IPO, corrected monetarily by the agreedment with the IPCA, as from the option contract date (from June, 2010 to 4/24/12), deducted from the dividend and interest on capital values per share paied by Mills, until the fiscal date. The exercise price of options granted under this programme is equal to (i) the average price of shares purchased

Cash

Cash

Cash

Cash

Cash

179

as brokerage note sent by the beneficiary to the human resources Department of the company, (ii) restated according to the IPCA, from the date of

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

_____________________________ (1) 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 Shareholders 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, passing the relevant article to henceforth as the following wording:

"5th Article The capital, fully subscribed and paid, is R$ 525,123,806.54 (five hundred twenty-five million, one hundred twenty-three thousand, eight hundred and six dollars and fifty-four cents), represented by 125,495,309 (one hundred twenty-five million, four hundred ninety-five thousand, three hundred and nine) common, nominative, inscribed and without par value shares."

180

18.

SECURITIES

181

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 Shareholder General 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. For purposes of the Brazilian Corporate Law, net income is the profit or loss for the year that remains after deducting accumulated losses from prior fiscal years, amounts relating to income tax and social contribution, and any amounts allocated to the payment of profit sharing to the employees and executives of the Company. 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 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 share control of the Company, directly or indirectly, whether through a single operation, or through successive operations, shall be contracted under a precedent or subsequent condition that the acquiring party shall make the call option for purchase of the remaining shares of other shareholders of the Company, subject to any conditions and terms provided for in existing legislation and the rules of the New Market, in order to ensure them equal treatment given to the seller.

182

Paragraph 1 - public offering referred to in this article shall also be required: (a) when onerous assignment of subscription rights or options to acquire shares or other securities or rights to securities convertible into shares or carrying rights to subscribe or acquisition, as appropriate, which may result in the sale of the Company's control, and (b) in case of transfer of control of company(ies) holding Control of the Company, which, in this case, the Controlling Shareholder shall be obliged to declare to MM&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 financial years.
Quarter ended, 03/31/2010 30/6/2010 30/9/2010 31/12/2010 31/3/2011 Total financial Highest volume traded price (Reais) (Reais) Not applicable, as the Company did not have shares during this period. Stock BM&FBOVESPA Aes Common 13.99 Exchange S.A. 205,417,537.00 Common Stock BM&FBOVESPA Aes 17.13 Exchange S.A. 181,735,768.00 Common Stock BM&FBOVESPA Aes 25.30 Exchange S.A. 660,681,560.00 Common Stock BM&FBOVESPA Aes 23.27 Exchange S.A. 389,456,322.00 Securities Type Class Market Administrative Authority Lowes price (Reais) 10.10 13.40 16.65 17.13 Factor price (Reais) R$ per share R$ per share R$ per share R$ per share

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 The Commercial Papers will be 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 Pursuant to CVM Rule 134, the Company may redeem the Commercial Papers, in full an unilaterally, in accordance with the procedures to be set forth in the Commercial Papers, upon payment of the Nominal Unit Value plus the Yield calculated pro rata temporis from the Issue Date to the date of effective payment, without any goodwill or penalty. To do so, the owner of the respective Commercial Paper must give his or her prior irrevocable and irreversible consent, at the moment of subscription or acquisition. The early redemption would imply (a) the extinction of the Commercial Papers redeemed, prohibited its holding in treasury, as provided in article 7, 3 paragraph, of Instruction CVM 134; and (b) return of the redeemed Commercial Papers. Additionally, the Company should follow the mandatory early redemption of the Commercial Paper at the date of subscription and payment of

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

g Possibility of redemption:

(i) Possibility of redemption

183

debentures that were issued in April 2011, if such date is earlier than the Maturity Date, upon payment of the Nominal Valeu plus the Remuneration, calculated pro rata from the Issue Date until the date of actual payment, without premium or penalty. Commercial Notes were redeemed in advance and are no longer outstanding, without premium or penalty. 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 with 5 (five) working days in advance of the date set for the rescue. Additionally, the (ii) Assumptions and method of company was obliged to redeem all the notes in advance of the second issue on the date calculating the redemption value trade subscription and payment of the debentures of the first issue, described below. Therefore, all commercial notes were redeemed on April 20, 2011 and are no longer in circulation. h if debt securities, indicate where applicable: Maturing on June 27, 2011. The notes were redeemed when the Company issues debentures. 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. 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 Not applicable

(i) maturity date, including conditions for acceleration

(ii) interest

(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

See terms of acceleration

Not applicable

i
j

conditions for amendment of the rights conferred by such Not applicable securities
other relevant characteristics Commercial Papers issued by Mills Estruturas e Servios de Engenharia S.A.

184

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. Not applicable. The Company may not redeem the promissory notes in advance. Not applicable. The Company may not redeem the promissory notes in advance.

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 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; (iv) sale, assignment or pledge any form of transfer or promise to transfer to third parties in (i) maturity date, including whole or in part, by the Company of any of the Obligations, without the prior consent in conditions for acceleration 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. (ii) interest The nominal value of the promissory note will not be updated monetarily. Over the nominal value of each note there will be remuneration interest focused commercial 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. (iii) . guarantee and, if in The remuneration shall be paid in full by the due date or the date of any anticipated the form of collateral, payment. description of the goods used as collateral 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 iv. in the absence of a guarantee, if the credit is Not applicable. The second issue of promissory notes do not have collateral or surety. secured or subordinate v. possible restrictions The credit of the promossory note is unsecured. imposed on the issuer

185

the dividend See accelerated maturity conditions described above. 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

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 note issuance depends on commercial second holder 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. Not applicable. The Company may not redeem the promissory notes in advance. Not applicable. The Company may not redeem the promissory notes in advance.

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 Paper; (iv) sale, assignment or pledge any form of transfer or promise to transfer to third parties in (i) maturity date, including whole or in part, by the Company of any of the Obligations, without the prior consent in conditions for acceleration 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. (ii) interest (iii) . guarantee and, if in The nominal value of the promissory note will not be updated monetarily. the form of collateral, description of the goods used as Over the nominal value of each note there will be remuneration interest focused commercial collateral 100% of accumulated variation of the DI rate plus spread 4.9% per annum from the date of

186

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 iv. in the absence of a guarantee, if the credit is Not applicable. The third issue of promissory notes do not have collateral or surety. secured or subordinate v. possible restrictions The credit of the promossory note is unsecured. imposed on the issuer the dividend See accelerated maturity conditions described above. 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

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 note issuance depends on commercial second holder approval.

Non-convertible Unsecured Debentures of First issuance of the Company


Securities Identification of securities Issue date Maturity date Quantity Total amount Restrictions on trading 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 will be registered for trading in the secondary market through the National Debenture Module (SND), administered and operated by CETIP S.A. OTC Clearing House ("CETIP"). The Debentures shall only be traded among Qualified Investors and after a period of ninety (90) days from the respective subscription or acquisition date, pursuant to articles 13 and 15 of CVM Rule 476. no no

Description of trading restrictions

Convertibility Possibility of redemption

Assumptions and method of no calculating the redemption value h. if debt securities, indicate where applicable: Maturity date April 18, 2016

187

for acceleration

Conditions

ii.

Interest

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 equal to or greater than R$ 5,000,000.00 or its equivalent in other currencies. interest paid semi-annually will account for 112.5% of the accumulated variation of the interest rate of CDI.

iii. guarantee and, if in the form of collateral, description of the None goods used as collateral iv. in the absence of a guarantee, The Debentures will be unsecured, in accordance with Article 58, caput of the Law No. if the credit is secured or subordinate 6,404/76. 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 See terms of acceleration

vi the fiduciary agent, indicating the PENTGONO S.A. DISTRIBUIDORA DE TTULOS E VALORES MOBILIRIOS key terms of the contract

188

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 rights conferred by such securities the deed of issue; and II. changes, which should be approved by debenture holders representing 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 Debentures issued by Mills Estruturas e Servios de Engenharia S.A.

18.6 Description of the Brazilian markets where the company's securities are admitted for trading The Companys common shares are traded at the BM&FBOVESPA. The commercial paper 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 debentures issued by the Company, first issuance, single tranche, of non-convertible unsecured debentures, or placement in a public offering with restricted sales efforts, according to CVM Instruction No. 476, 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. 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. 18.9 Description of takeover bids made by Company for shares issued by third parties

Not applicable.

189

18.10 Other information which the Company deems relevant There are no other relevant information pertaining to this item 18.

19.

BUY-BACK PLANS AND SECURITIES HELD IN TREASURY

190

19.1

Share buyback plans

As of December 31, 2010 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, 2010 the Company didnt have shares in Treasury 19.4. Other information that the Company considers relevant

There are no other relevant information pertaining to this item 19.

191

20.

SECURITIES TRADING POLICY

192

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 legal statute

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 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
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 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.(i) 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

Companys Trading Policy

193

21.

DISCLOSURE POLICY

194

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 Disclosure Policy 21.2 Disclosure policy for relevant events or facts adopted by the issuer, indicating the procedures for maintaining secrecy about relevant information not disclosed Disclosure Policy 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

There is no other relevant information for this item 21.

195

22.

EXTRAORDINARY BUSINESS

196

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.

197

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