Since January 1, 1996, Brazilian companies have been permitted to pay limited interest to holders of equity securities and treat those payments as a deductible expense for purposes of calculating Brazilian income tax and, since 1998, social contribution tax. The rate applied in calculating interest on capital cannot exceed the variation of TJLP for the applicable period and is limited to the greater of (i) 50% of our net income (before payment of any interest or any deduction for income taxes or social contribution) and (ii) 50% of our accumulated profits and profit reserves, in each case only for the relevant period. The amount distributed to shareholders as interest on capital, net of any withholding tax, may be included as part of the mandatory distribution. In accordance with applicable law, we are required to pay to shareholders an amount sufficient to ensure that the net amount they receive in respect of interest on capital, after payment of the applicable withholding tax, plus the amount of declared dividends is at least equivalent to the mandatory dividend amount.