• 
  • Consolidated Balance Sheets
  • Consolidated Statements of income Yeares Ended
  • Consolidated Statements of Comprehensive Income Years Ended
  • Consolidated Statements of Shareholders' Equity
  • Consolidated Statements of Cash Flow Years Ended
  • Notes To the Consolidated Financial Statements
    • 1. Operations
    • 2. Presentation of the Financial Statements and Accounting Practices
    • 3. Critical Accounting Estimates
    • 4. Accounting Pronouncements not yet Adopted
    • 5. First-time Adoption of IFRS
    • 6. Financial Instruments
    • 7. Cash and Cash Equivalents
    • 8. Financial Assets
    • 9. Trade Accounts Receivable, Net
    • 10. Customer and Commercial Financing
    • 11. Collateralized Accounts Receivable and Recourse and Non Recourse Debt
    • 12. Inventories
    • 13. Other Assets
    • 14. Guarantee Deposits
    • 15. Related Party Transactions
    • 16. Property, Plant and Equipment
    • 17. Intangible Assets
    • 18. Financial Liabilities by Category
    • 19. Loans and Financing
    • 20. Trade Accounts Payable
    • 21. Other Payables
    • 22. Contribution from Suppliers
    • 23. Advances from Customers
    • 24. Axes and Payroll Charges Payable and Income Tax Social Contribution
    • 25. Other Provisions
    • 26. Provisions for Contingencies
    • 27. Post-retirement Benefits
    • 28. Shareholders' Equity
    • 29. Stock Compensation
    • 30. Earnings Per Share
    • 31. Employee Profit Sharing-plan
    • 32. Other Operating (expense) Income, Net
    • 33. Revenue and (expenses) by Nature
    • 34. Financial Income (expense)
    • 35. Foreign Exchange Gains (losses), Net
    • 36. Income Taxesincome Taxes
    • 37. Impairment Test
    • 38. Financial Guarantees
    • 39. Financial Instruments
    • 40. Responsibilities and Commitments
    • 41. Insurance (unaudited)
    • 42. Additional Information of Cash Flow
    • 43. Segment Information
    • 44. Events After the Balance Sheet Date
  • Proposal to the Board of Directors
  • ANNUAL REPORT

PROPOSAL TO THE BOARD OF DIRECTORS

To The Directors:

SUBJECT: Proposal to be presented to the Annual General Meeting in respect of appropriation of net income for the year ended December 31, 2010.

Whereas

• The Company, in compliance with the provisions of Brazilian Corporate Law, has adopted International Accounting Standards for the presentation of its financial statements in accordance with International Financial Reporting Standards (IFRS), introduced by Law 11638 of December 28, 2007, and has also incorporated all the accounting pronouncements approved by the CVM;


• Any effects on previous years' financial statements as a result of having adopted the new accounting practices will be recorded against shareholder's equity for the current year;
• The financial statements for the year ended December 31, 2010 show that the Company recorded net income of R$573,592,297.95; and


• Distribution to shareholders of interest on own capital to be ascribed as dividends, was approved, amounting to R$200,983,492.67 in respect of the 2010 financial year.

Hereby Propose

That the Board of Directors, in exercise of its powers provided under article 33, subsection XI of the Company's Bylaws, submit the following proposal for appropriation of net income for the financial year ended December 31, 2010:

1. Ratification of the amount of R$200,983,492.67, distributed to shareholders as interest on own capital, ascribed as dividends, of which R$34,540,532.55 refers to the 1st and 2nd quarters of 2010, R$21,709,951.32 refers to the 3rd quarter of 2010 and R$144,733,008.80 refers to the 4th quarter of 2010;

2. Transfer of the amount of R$15,328,303.51, in respect of investment subsidies utilized in 2010, to the Investment Subsidy Reserve account;

3. To record a legal reserve of R$28,679,614.90, representing 5% of the net income for 2010, in accordance with the provisions of article 193 of Law 6404/76;

4. Absorption into shareholders' equity of the effects on previous years' financial statements, as a result of having adopted the International Accounting Standards, amounting to R$285,052,995.94, by means of the Reserve for Investments and Working Capital account, in accordance with the Company's Bylaws; and

5. Transfer of the balance of net income for the year, amounting to R$328,600,886.87 to the Reserve for Investments and Working Capital account, in accordance with Annex I of the Company's Bylaws.

São José dos Campos, March 16, 2011.

Frederico Fleury Curado
President and Chief Executive Officer

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